TORONTO, Aug. 16, 2017 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire the previously-announced 511,848 square foot logistics property in Montreal, Quebec. The property is strategically located on the Trans-Canada Highway with transportation links to Ontario and US markets, and close to Pierre Elliott Trudeau International Airport. It is 100% occupied by a single tenant with ten years remaining on its lease term, including 1.5% annual rent escalations. The building sits on 21.2 acres of land with frontage on the Trans-Canada Highway, providing potential for future re-development or expansion.
The REIT will pay $43.0 million (which includes $1.6 million for capital upgrades) for the property, financed by proceeds from the REIT's June 2017 equity offering. The purchase price equates to $84 per square foot, well below replacement cost, and generates a very strong going-in capitalization rate of 6.42% and averages 6.9% over the ten year term of the lease. Summit expects to close the transaction on or before the end of August, 2017.
"Our growth continues to accelerate this year with nine properties already acquired to date totaling 1.8 million square feet, and another two properties under agreement in our target Greater Toronto Area market aggregating 388,000 square feet," commented Paul Dykeman, Chief Executive Officer. "Looking ahead, our pipeline of further acquisition opportunities remains strong, and we are confident we will maintain our track record of strong accretive growth in the quarters ahead."
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]