Pure Industrial Real Estate Trust (TSX: AAR.UN) (“PIRET” or the “Trust”) announced today that it has entered into conditional agreements to acquire $131.4 million of income producing properties (collectively, the “Acquisitions”), consisting of nine industrial properties representing over 1.5 million square feet of gross leasable area (“GLA”). The Acquisitions consist of a property located in Calgary, Alberta (the “Calgary Property”), a portfolio of five properties located in Bolton, Stoney Creek, Hamilton, Burlington and Woodstock, Ontario (the “First Ontario Portfolio”), and a portfolio of three properties located in Toronto and London, Ontario (the “Second Ontario Portfolio”). The properties are being acquired at a weighted average going-in capitalization rate of 6.89%.
PIRET also announced today that it has entered into an agreement to sell to a syndicate of underwriters led by Canaccord Genuity Corp., RBC Capital Markets, and BMO Nesbitt Burns Inc. on a bought deal basis, 14,300,000 trust units ("Units") at a price of $4.55 per Unit for gross proceeds to PIRET of $65.1 million (the "Financing"). PIRET has also granted the underwriters an overallotment option to purchase up to an additional 2,145,000 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Financing. The Financing is expected to close on or about January 28, 2014 and is subject to regulatory approval.
The net proceeds from the Financing, together with the proceeds of new mortgages, will be used to fund the Acquisitions, as follows:
The First Ontario Portfolio consists of two multi-tenant and three single-tenant industrial properties comprising an aggregate of 1,229,150 square feet of GLA. The First Ontario Portfolio is 100% leased to quality international, national and regional tenants with a weighted average remaining lease term of approximately 5.0 years. The purchase price for the First Ontario Portfolio is $93.5 million, representing a 6.95% going-in capitalization rate.
The Second Ontario Portfolio consists of one multi-tenant and two single-tenant industrial properties comprising an aggregate of 245,530 square feet of GLA. The Second Ontario Portfolio is 100% leased to quality international, national and regional tenants with a weighted average remaining lease term of approximately 8.2 years. The purchase price for the Second Ontario Portfolio is $25.8 million, representing a 6.51% going-in capitalization rate.
The Calgary Property consists of one single-tenant industrial property comprising 27,781 square feet of GLA. The Calgary Property is 100% leased to a quality national tenant with a remaining lease term of approximately 6.4 years. The purchase price for the Calgary Property is $12.1 million, representing a 7.25% going-in capitalization rate.
Consistent with PIRET’s past practices and in the normal course, PIRET engages in ongoing discussions with respect to possible acquisitions and has entered into acquisition agreements in respect of the properties described above, which are subject to a number of conditions. There can be no assurance that any of these acquisitions will be completed on the terms of such agreement or at all. PIRET continues to actively pursue acquisition and investment opportunities.
In aggregate, PIRET intends to place new mortgage financing in respect of the Acquisitions of approximately $72.3 million, representing 55% of the purchase price, bearing an anticipated weighted average interest rate of 4.0%.
On December 31, 2013, PIRET completed the disposition of the properties located at 120 – 140 Finchdene Square and 3615 – 3625 Weston Road in Toronto, Ontario for aggregate gross proceeds of $12.2 million. PIRET acquired the properties on April 15, 2011 for $11.9 million. The properties have a total of 173,248 square feet of GLA and were built in 1977 and 1970, respectively.
Kevan Gorrie, President of PIRET, said “PIRET continues to take advantage of a well-established pipeline of acquisition opportunities across Canada. We are pleased to have identified these high quality, well tenanted industrial properties in key markets which we can acquire on an accretive basis. Further, the property dispositions underscore management’s ability to actively manage our portfolio over and above our accretive acquisition program.”
New Co-Chief Executive Officer
PIRET also announced today that its President, Kevan Gorrie, has been appointed by the Board of Trustees as Co-Chief Executive Officer of the Trust. Mr. Gorrie will remain as President and a member of the Board of Trustees. Stephen Evans will continue as the Trust’s other Co-Chief Executive Officer.
Mr. Gorrie has been PIRET’s President since October 14, 2012 and a Trustee since May 13, 2013. As President, Mr. Gorrie has been responsible for acquisitions, asset management and the day-to-day business of PIRET. Since Mr. Gorrie’s arrival in October 2012, PIRET has raised over $300 million in equity financing and completed over $730 million in acquisitions. Mr. Gorrie has over 15 years of real estate experience and has been involved in transactions totaling over $1.6 billion in Canada, the United States and Germany. A graduate of the Civil Engineering program at the University of Toronto, Mr. Gorrie is a licensed Professional Engineer in the Province of Ontario.
Stephens Evans commented on the appointment, “We are very pleased to announce Kevan’s appointment as Co-CEO. As President, Kevan has successfully led our asset management, property management and acquisitions teams through transformational growth. As Co-CEO, Kevan will have an increased leadership role for PIRET internally and externally.”
About Pure Industrial Real Estate Trust
PIRET is an unincorporated, open-ended investment trust that acquires, owns and operates a diversified portfolio of income-producing industrial properties in primary markets across Canada. PIRET focuses exclusively on investing in industrial properties and is the largest internally managed publicly traded REIT in Canada that offers investors exclusive exposure to Canada’s industrial asset class.
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Toronto Stock Exchange – AAR.UN
Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include the following: (i) the Financing is expected to close on or about January 28, 2014 and is subject to regulatory approval; and (ii) in aggregate, PIRET intends to place and assume new and existing mortgage financing in respect of the Acquisitions in the aggregate of approximately $72.3 million, representing 55% of the purchase price, bearing an anticipated weighted average interest rate of 4.0%.
The forward-looking statements contained in this news release are based on certain key expectations and assumptions made by PIRET, including: expectations and assumptions concerning receipt of required regulatory approvals and the satisfaction of other conditions to the completion of and use of proceeds from the Financing.
Although PIRET believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because PIRET can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the Financing or mortgage financings, competitive factors in the industries in which PIRET operates, prevailing economic conditions, and other factors, many of which are beyond the control of PIRET.
The forward-looking statements contained in this news release represent PIRET’s expectations as of the date hereof, and are subject to change after such date. PIRET disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
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