TORONTO, Feb. 16 /CNW/ - Whiterock Real Estate Investment Trust ("Whiterock") announced today that it has closed, effective February 12, 2010, its previously-announced acquisition of an equity interest in a $214 million portfolio of office properties including West Metro Corporate Centre, 2810 Matheson Boulevard and Valhalla Executive Centre, three primary market assets consisting of seven office buildings, located along the Highway 427 corridor in the geographic centre of the Greater Toronto Area (GTA). These multi-tenant office buildings, consisting of 1.1 million square feet, offer excellent visibility and a diverse tenant base, with an occupancy rate of approximately 98%, and an average remaining lease term of six years. The properties have been well-maintained to institutional standards, with extensive improvements completed within the past four years, including lobby upgrades, washroom modernizations and a new parking structure.
In keeping with its accretive acquisition program, Whiterock acquired a 49.9% equity interest in this portfolio and will assume the exclusive property management of this portfolio. The in-place AFFO from the properties is expected to add approximately $0.12 per unit to Whiterock's annualized AFFO. The addition of these assets to Whiterock's portfolio strengthens its owned and/or managed presence in the key Toronto market to 1.9 million square feet and brings the total market value of assets in which Whiterock has an interest to over $800 million; 49% of these assets are in the GTA, 11% are in the major markets of Ottawa, Edmonton, and Montreal, and a further 14% are in Saskatchewan, one of the best performing markets in North America. Of the remaining 26% of the assets, 54% are leased to government and investment grade tenants primarily in provincial capitals. All-in-all, the GTA, Ottawa, Montreal, Edmonton, Saskatchewan and government and investment grade tenants in secondary markets account for approximately 88% of Whiterock's over $800 million asset base.
Whiterock's equity investment partner in this portfolio acquisition is Return on Innovation Capital Inc. ("ROI Capital"), an investment firm based in Toronto that specializes in private placement investments, including a focus on high quality properties with visible growing cash-flow streams backed by solid covenants and longer-term leases. With over $600 million in assets under management, ROI Capital is one of the fastest-growing investment firms in Canada.
This acquisition includes the assumption by the co-owners of two mortgages totaling $140 million with a weighted average interest rate of 5.87%, of which $55 million matures in 2012, and $85 million matures in 2013. Whiterock's 49.9% equity investment in this portfolio, net of debt, totals approximately $41.2 million including closing costs and was funded with the net proceeds from its recently closed public equity offering.
In connection with the acquisition, Whiterock issued to an affiliate of the vendor 375,000 trust unit purchase warrants. Each warrant entitles the holder, for a period of 24 months from the date of issuance, to subscribe for one trust unit at $17.11, being a 10% premium to the closing price of Whiterock units on the TSX on January 25, 2010. These warrants did not form part of the public equity offering which closed on February 11, 2010.
With the completion of this portfolio acquisition, Whiterock's aggregate real estate portfolio totals approximately 4 million square feet across 54 properties in 7 provinces, with a weighted average lease term of more than 7 years, and 54% of the portfolio consists of government and investment-grade tenants.
Valhalla Executive Centre
The Valhalla Executive Centre, located at 300, 302 and 304 The East Mall is a 327,000 square foot office park consisting of three buildings with excellent access and visibility from Hwy 427 providing attractive signage opportunities. The site is comprised of three low- and mid-rise multi-tenanted buildings and has a prestigious tenant roster of national and international organizations led by TD Meloche Monnex, the largest direct-response home and automobile insurer in Canada and SNC Lavalin, a Canadian-based company providing engineering, project and construction management and maintenance services through its network of offices across the country and in over 35 countries worldwide.
West Metro Corporate Centre
The West Metro Corporate Centre consists of three freestanding buildings located at 185, 191 and 195 The West Mall that were constructed between 1984 and 1989, as well as a recently constructed parking structure. The combined GLA of the three buildings totals approximately 613,000 square feet and the main lobbies, washroom and elevators in each of the buildings have recently been retrofitted adding to the clean modern look of the complex which boasts excellent exposure, creating prime signage opportunities. The buildings are 99% occupied with a mix of high quality tenants including SNC Lavalin; Transat Tours, an industry leader in developing and marketing vacation products; Consumer Impact Marketing, a privately held, international, bilingual organization with focused expertise in the areas of brand marketing, sales management and measurement; and Cogeco Cable Inc., a major cable telecommunications company and the second largest cable system operator in Ontario and Quebec in terms of basic cable service customers served.
2810 Matheson Boulevard East
2810 Matheson Boulevard East is a prestigiously situated asset in the Airport Corporate Centre node of Mississauga. The Class A suburban office building is visible from both Hwy. 401 and Hwy. 427 and contains eight floors comprised of approximately 135,000 square feet of leasable area. The site includes excess land that could in the future support 110,000 square feet of new construction. The building is 100% occupied with high quality tenants including Central 1 Credit Union, which serves as a central financial facility, liquidity manager, payments processor and trade association for the provincial credit union systems of B.C. and Ontario and holds more than $7.5 billion in assets.
This news release contains "forward-looking statements" within the meaning of applicable securities legislation, including but not limited to statements with respect to Whiterock's financial performance. These forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "estimate", "anticipate", "intend", "believe" or "continue", the negative forms thereof and similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs, and are based on information currently available to management. These statements are not guarantees of future events or performance and, by their nature, are based on Whiterock's estimates and assumptions, which are subject to known and unknown risks, uncertainties and other factors that may cause the actual events, results or prospects to be materially different from those expressed or implied herein. Readers are cautioned that a number of risks, uncertainties and other factors, and the risks discussed in Whiterock's various securities filings, including the section entitled "Risk Factors" in Whiterock's Annual Information Form, which can be obtained at www.sedar.com, could cause actual events, results or prospects to differ materially from those stated or implied. These risks, uncertainties and other factors should be considered carefully, and a reader should not place undue reliance on forward-looking statements, as there can be no assurance that actual events, results or prospects will be consistent with such statements. In particular, but without limitation, there can be no assurance that Whiterock will be able to increase its AFFO. Except as required by law, Whiterock does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
SOURCE WHITEROCK REAL ESTATE INVESTMENT TRUST
For further information: For further information: www.whiterockreit.ca, Frank Bucys, CFO, (416) 907-4864; Jennifer Kosloski, (416) 979-3026