TORONTO, July 15, 2013 /CNW/ - WPT Industrial Real Estate Investment Trust (the "REIT") (TSX: WIR.U) announced today that it has completed the previously announced acquisition of an industrial property located in Illinois for a total purchase price of approximately US$53 million (exclusive of closing and transaction costs and acquisition fee). The REIT, through WPT Industrial, LP (the "Partnership") (the REIT's operating subsidiary), indirectly acquired the property from Welsh Property Trust, LLC ("Welsh"), the external asset and property manager of the REIT.
The property, located in Pontoon Beach, Illinois, is a single-tenant bulk distribution building, totalling approximately 1.3 million square feet of gross leaseable area with 32-foot clear ceiling height, cross-dock configuration, ample trailer storage on three sides of the building, 185-foot truck court depth and ESFR sprinkler systems. The property is currently 100% leased to Conopco, Inc. dba Unilever Home & Personal Care USA, a division of Unilever (NYSE: UN), with a lease expiration of June 30, 2023.
With the completion of this transaction, the REIT's portfolio now consists of 36 industrial properties and two office properties totaling approximately 9.9 million square feet of gross leaseable area.
The purchase price (exclusive of closing and transaction costs and acquisition fee) was satisfied by: (i) the indirect assumption by the Partnership of a senior secured promissory note in the principal amount of US$31.8 million with a per annum floating interest rate of 2.25% plus the one-month LIBOR rate and a 90-day maturity date, which note is held by a subsidiary of Welsh, secured by a mortgage on the property and pre-payable without premium or penalty, at any time and from time to time, in whole or in part; and (ii) the issuance by the Partnership of 2,192,347 Class B partnership units of the Partnership ("Class B Units"). The REIT expects the note to be repaid on or prior to the maturity date for the note by obtaining from a third party financial institution mortgage financing secured by the property.
The number of Class B Units issued to a subsidiary of Welsh in connection with the acquisition was determined applying a price of US$9.67 per unit, which is the 20-trading day volume-weighted average price for the trust units of the REIT ("Units") for the period up to and including June 28, 2013, the last trading day before the transaction was announced by the REIT. The closing price of the Units on the Toronto Stock Exchange on June 28, 2013 was US$9.60 per Unit.
Welsh now directly and indirectly owns 13,059,709 Class B Units, representing an approximate 53.3% effective interest in the REIT (assuming all Class B Units are redeemed for Units, but otherwise on a non-diluted basis).
Class B Units are economically equivalent to Units and redeemable by the holder thereof for cash or Units (on a one-for-one basis subject to customary anti-dilution adjustments), as determined by the general partner of the Partnership in its sole discretion. As previously disclosed, the REIT and Welsh have agreed to certain restrictions on transfer and redemption and related liquidity rights that apply to the Class B Units issued in connection with the acquisition of the Illinois property unless and until the REIT has received all necessary acceptances and approvals from the Toronto Stock Exchange for the issuance and listing of the underlying Units, details of which can be found in the REIT's material change report dated July 8, 2013 and the contribution agreement for the acquisition available under the REIT's profile on the SEDAR website at www.sedar.com.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 9.9 million square feet of gross leasable area, comprised of 36 industrial properties and two office properties located in 12 states in the United States. Welsh Property Trust, LLC is the external asset manager and property manager of the REIT.
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the REIT's expectation that the senior secured promissory note indirectly assumed by the Partnership in connection with the purchase of the property will be repaid on or prior to the maturity date for the note by obtaining mortgage financing secured by the property from a third party financial institution. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT's and the property's future growth potential, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT's properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the REIT's final prospectus dated April 18, 2013, which is available under the REIT's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: WPT Industrial Real Estate Investment Trust
For further information:
Matt Cimino, General Counsel & Secretary
WPT Industrial Real Estate Investment Trust
Tel: (952) 837-3083
Fax: (952) 541-8083