TORONTO, Oct. 31, 2017 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire a 50% interest in a 70,000 square foot light industrial property well-located in Laval, Quebec. The REIT is purchasing the property with its Quebec joint venture partner Groupe Montoni. The REIT will pay $3.1 million for its 50% interest, financed by a new $2 million two-year mortgage bearing an expected interest rate of 3.3% with the balance in cash from its operating credit facility, generating a going-in capitalization rate of approximately 6.42%. Closing of the acquisition is expected on or before November 16, 2017.
The property is a well-maintained, modern Class A warehouse facility in a prime location close to major highways and other transportation links. The building is 100% occupied by a single tenant with 2.4 years remaining on a ten-year lease. There is an opportunity to expand the building in conjunction with the tenant renewing its lease.
The REIT also announced today that it has waived conditions and will acquire 100% of a 158,831 square foot industrial warehouse on a 7.8 acre site located in Pickering, Ontario. The REIT will pay approximately $14.3 million for the property, financed by its operating credit facility, generating a going-in capitalization rate of approximately 6.07%. Closing of the acquisition is expected on or before November 15, 2017. The property is a well-maintained and well-managed warehouse facility located in a prime location close to major highways and other transportation links. The building is 100% occupied by three tenants with a weighted average lease term of 6.3 years and contractual annual rent escalations of 1.4%.
With the completion of these two transactions the REIT's portfolio will grow to 65 properties well-located in key markets across Canada totaling 7.5 million square feet of gross leasable area ("GLA").
"We continue to expand our presence in our target Montreal and Greater Toronto regions, capitalizing on strong demand and excellent fundamentals in these markets," commented Paul Dykeman, Chief Executive Officer. "Looking ahead, we have a number of additional properties in various stages of due diligence totaling approximately 385,000 square feet of GLA with total acquisition costs of approximately $46.6 million. We expect to complete these transactions in the next few months."
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, firstname.lastname@example.org