TORONTO, March 3, 2020 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it had waived conditions and will acquire 100% of a Class A temperature-controlled single tenant distribution facility in Guelph, Ontario. The 282,133 square foot building is LEED Gold Certified and is the main distribution facility for Central and Eastern Canada for one of the country's largest food producers. It is located just north of Highway 401, close to other Summit-owned properties. The tenant is currently in the seventh of a fifteen-year lease with 6% rent escalations every three years.
Summit will pay approximately $77.7 million for the property. The purchase price is below replacement cost and will be financed by the assumption of a $20.9 million mortgage maturing in December 2021 bearing an interest rate of 4.19% and cash from the REIT's acquisition credit facility (generating a going-in capitalization rate of approximately 4.5%). Closing is anticipated by the end of March 2020.
Built in 2013, the property combines dry, refrigerated and frozen food storage in one fully integrated facility. The institutional grade tenant has seven five-year options to extend its lease at market rents, demonstrating a long-term commitment to the property. The property is the first refrigerated facility in Canada to achieve LEED Gold Certification with a best-in-class physical plant capable of supporting 24/7 operations, a range of cooling capabilities and high-volume shipping and receiving through 38 loading doors with 40 foot clear ceiling height and innovative racking systems. Additionally, the 23.7 acre property has only 27% site coverage, allowing for future expansion of approximately 100,000 square feet, based on tenant demand.
"We are very pleased to be acquiring this mission-critical, modern design-built facility, extending our presence in the vibrant GTA region with future expansion potential," commented Paul Dykeman, Chief Executive Officer. "We are also proud to be demonstrating our commitment to environmental responsibility with this acquisition. The property has an extensive track record of sustainable and green performance with numerous features that support carbon neutral operations."
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit's units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the goal to build Summit's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required financing and approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE Summit Industrial Income REIT
For further information: Paul Dykeman, CEO at (902) 405-8813, [email protected]