VANCOUVER, Dec. 18, 2017 /CNW/ - Pure Industrial Real Estate
Trust (TSX: AAR.UN) (the "Trust") announced today the
following transactions:
- $32.0 million (US$25.0 million) acquisition of a core asset in
Fort Worth, Texas;
- $61.4 million (US$48.0 million) agreement to acquire a core
asset in Fort Worth, Texas;
- $46.7 million (US$36.5 million) acquisition of a core asset in
McDonough, Georgia;
- $32.5 million agreement to
acquire a core asset in Montreal,
Quebec;
- $14.9 million disposition of a
non-core asset in Etobicoke,
Ontario;
- $5.9 million disposition of a
non-core asset in Vaughan,
Ontario; and
- $1.9 million disposition of a
non-core asset in Winnipeg,
Manitoba.
FORT WORTH I
ACQUISITION
The Trust announced today that it has completed the acquisition
of a newly-constructed, 301,500 square foot ("SF"), 32' clear
height distribution centre in Fort Worth,
TX (the "Fort Worth I Acquisition"), for a purchase price of
approximately $32.0 million
(US$25.0 million), representing a
stabilized capitalization rate of approximately 5.2%.
The asset is located in the well-established East Fort Worth industrial node that is within
close proximity to DFW airport and major highways. The asset
is currently 86% leased two investment-grade tenants with a
weighted average lease term of 8.1 years. The remaining
41,324 SF is currently being marketed for lease. An earn-out
structure exists with the Seller to lease the vacant space to a
prospective tenant over a set time period, which could result in a
stabilized capitalization rate of 5.1%.
The Fort Worth I Acquisition was funded with existing cash on
hand and proceeds from the Trust's unsecured line of
credit.
FORT WORTH II
ACQUISITION
The Trust announced today that it has reached an agreement to
acquire a brand new, state-of-the-art, 657,043 SF, 36' clear height
distribution centre in Fort Worth,
TX (the "Fort Worth II Acquisition"), for a purchase price
of approximately $61.4 million
(US$48.0 million), representing a
stabilized capitalization rate of approximately 5.2%.
The asset is located in the prominent North Fort Worth industrial submarket with
exceptional access to regional transportation networks. The
asset is currently 75% leased to a large national apparel company
on a 10.5-year lease term. The remaining vacant space is
being actively marketed, and should a lease deal be completed by
closing (subject to the Trust's approval), a promote structure
exists whereby the stabilized capitalization rate will be
4.8%.
The Fort Worth II Acquisition is expected to be funded with
existing cash on hand and proceeds from the Trust's unsecured line
of credit and will close on August 30,
2018.
KING MILL II ACQUISITION
The Trust announced today that it has completed the acquisition
of 150 Distribution Drive, a brand new, state-of-the-art, 760,256
SF, 36' clear height distribution centre in McDonough, Georgia (the "King Mill II
Acquisition") for a purchase price of $46.7
million (US$36.5 million), or
US$48 per SF. This
newly-constructed asset is being acquired vacant, and is currently
being marketed for lease. The Trust forecasts a stabilized
yield on cost of approximately 6.0% once leased.
The asset is located in Henry
County, Atlanta's strongest
submarket and located only 200 miles from the Port of Savannah. The asset is in close
proximity to the Trust's 201 Greenwood Court property which was
acquired in February 2017.
The King Mill II Acquisition was funded with existing cash on
hand and proceeds from the Trust's unsecured line of
credit.
MONTREAL ACQUISITION
The Trust announced today that it has reached an agreement to
acquire 2200 Rue de l'Aviation in Montreal, Quebec (the "Montreal Acquisition")
a 287,338 SF, 32' clear height distribution centre for a purchase
price of $32.5 million, representing
a stabilized capitalization rate of approximately 6.8% (inclusive
of rental payments related to a long-term ground lease with the
Aéroports de Montréal).
Constructed in 2015 by Broccolini as a design-build, the asset
is located adjacent to the P.E. Trudeau International Airport, and
is 100% leased to Cardinal Health Canada Inc. with a 10-year
remaining lease term. Cardinal Health Canada Inc. is part of
a global healthcare services and products company specializing in
the distribution of pharmaceuticals and medical products around the
world. This location services multiple health care facilities
across the province of Quebec with
medical supplies.
The Montreal Acquisition will be funded with the assumption of a
$22.8 million mortgage bearing an
interest rate of 3.48% and remaining term of approximately 7 years
and existing cash on hand and is expected to close in January 2018, subject to customary closing
conditions.
SUMMARY OF ACQUISITIONS
|
|
|
|
|
|
|
|
|
|
|
Property
|
Location
|
GLA (SF)
|
Site
Size
(Acres)
|
Site
Coverage
(%)
|
Year
Built
|
Clear
Height
|
Price
(CAD$)
|
Price
(USD$)
|
PSF (CAD$/USD$)
|
Stabilized Cap Rate
|
Fort Worth
I
|
Fort Worth,
TX
|
301,500
|
16.7
|
41%
|
2016
|
32'
|
$32.00
|
$25.00
|
$106/$83
|
5.20%
|
Fort Worth
II
|
Fort Worth,
TX
|
657,043
|
34.5
|
44%
|
2017
|
36'
|
$61.40
|
$48.00
|
$94/$73
|
5.20%
|
King Mill
II
|
McDonough,
GA
|
760,256
|
57
|
31%
|
2017
|
36'
|
$46.70
|
$36.50
|
$61/$48
|
5.75 -
6.25%
|
Montreal
|
Montreal,
QC
|
287,338
|
17.5
|
38%
|
2015
|
32'
|
$32.50
|
$25.40
|
$113/$88
|
6.80%
|
TOTAL
|
|
2,006,137
|
125.8
|
37%
|
|
|
$172.70
|
$134.90
|
$86/$67
|
5.6 -
5.8%
|
NON-CORE DISPOSITIONS
The Trust today announced that it has completed the sale of
75-77 Fima Crescent, a 212,110 SF multi-tenanted asset located in
Etobicoke, ON. The asset was
53 years old at the time of sale and features covered shipping, a
clear height of 21' and a site coverage ratio of approximately
60%.
The property was originally acquired in May 2013 as part of a larger portfolio
transaction and a purchase price of $12.9
million was attributed to the asset at that time. The
asset was sold for $14.9 million, or
approximately $1.9 million per
acre. The asset was unencumbered at time of sale and was not
classified as an Asset Held For Sale.
The Trust also announced the disposition of 10 Whitmore Road, a
33,479 SF single-tenant asset located in Vaughan, Ontario. The asset was 28 years old
at the time of sale and features a clear height of 20'.
The property was originally acquired in May 2013 as part of a larger portfolio
transaction and a purchase price of $3.2
million was attributed to the asset at that time. The
asset was sold for $5.9 million with
a capitalization rate of approximately 3.6%. A $1.7 million mortgage was discharged at time of
sale and the asset was not classified as an Asset Held For
Sale.
The Trust also announced the disposition of 90 Park Lane, a
20,185 SF single-tenant asset located in Winnipeg, Manitoba. The asset was originally
acquired for $1.1 million and sold
for $1.9 million. The asset was
originally constructed in 1979 and had a clear height of 30'.
The Trust was able to relocate the existing tenant from this asset
to another Trust-owned asset. The tenant expanded its GLA by over
80% and signed a new long-term lease, thus reducing overall vacancy
and increasing the Trust's weighted average lease term in
Winnipeg. The timing of the sale
of this asset was tied to the relocation, thus removing any
downtime to the Trust. The asset was unencumbered at time of sale
and was not classified as an Asset Held For Sale.
Kevan Gorrie, President and Chief
Executive Officer, commented, "We are excited to add assets with
industry-leading physical characteristics in exceptionally strong
locations. Once leased, these assets will be accretive to our
portfolio and further strengthen our position in our target
markets."
IMPACT OF THE TRANSACTIONS
Following the acquisitions and the disposition described herein,
the Trust expects the following changes to the Trust's geographic
exposure as a percentage of total revenue:
|
PRE-TRANSACTIONS
|
|
POST
TRANSACTIONS
|
REGION
|
# OF
ASSETS
|
%
PORTFOLIO
|
|
#OF
ASSETS
|
%
PORTFOLIO
|
BC
|
12
|
13%
|
|
12
|
13%
|
AB
|
41
|
19%
|
|
41
|
18%
|
ON
|
80
|
38%
|
|
78
|
38%
|
USA
|
23
|
24%
|
|
26
|
26%
|
OTHER
|
18
|
6%
|
|
18
|
7%
|
|
174
|
100%
|
|
175
|
100%
|
"Pre-Transactions" figures represent the Trust's portfolio as at
Q3 2017 including the Richmond Development as outlined in the news
release dated July 12, 2017, and
excludes assets held for sale.
Following these transactions, the Trust will have completed or
announced year-to-date acquisitions of approximately $850 million and year-to-date asset dispositions
of approximately $176 million.
Pro-forma these transactions, the Trust will have estimated
liquidity of approximately $100
million comprised of cash and available lines.
ABOUT PURE INDUSTRIAL REAL ESTATE TRUST
The Trust is an unincorporated, open-ended investment trust that
owns and operates a diversified portfolio of income-producing
industrial properties in leading markets across Canada and key distribution and logistics
markets in the United States. The
Trust is an internally managed REIT and is one of the largest
publicly-traded REITs in Canada
that offers investors exposure to industrial real estate assets in
Canada and the United States.
Additional information about the Trust is available at
www.piret.ca or www.sedar.com.
Toronto Stock Exchange – AAR.UN
Non-GAAP Measures:
The Trust prepares and releases unaudited quarterly and
audited consolidated annual financial statements prepared in
accordance with IFRS (GAAP). The Trust may disclose and discuss
certain non-GAAP financial measures, including capitalization rate.
The non-GAAP measures are further defined and discussed in the
MD&A dated November 8, 2017,
available on SEDAR at www.sedar.com, which should be read in
conjunction with this release. Since capitalization rate is not
determined by IFRS, such measure may not be comparable to similar
measures reported by other issuers. The Trust has presented such
non-GAAP measure as management believes this measure is a relevant
measure to evaluate the Trust's performance. The non-GAAP
measure should not be construed as alternatives to net income
(loss) or cash flow from operating activities determined in
accordance with GAAP as an indicator of the Trust's performance.
Please refer to "Additional IFRS Measures and Non-IFRS Measures" in
the Trust's MD&A.
Forward-Looking Information:
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 Fort Worth II
Acquisition is expected to be funded with existing cash on hand and
proceeds from the Trust's unsecured line of credit and will close
on August 30, 2018; ii) The
Montreal Acquisition will be funded with the assumption of a
$22.8 million mortgage bearing an
interest rate of 3.48% and remaining term of approximately 7 years
and existing cash on hand and is expected to close in January 2018, and iii) pro-forma the
announced transactions, the Trust will have estimated liquidity of
approximately $100 million comprised
of cash and available lines.
Although the Trust 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 the Trust 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, competitive factors in the industries in which the
Trust operates, prevailing economic conditions, and other factors,
many of which are beyond the control of the Trust.
The forward-looking statements contained in this news release
represent the Trust's expectations as of the date hereof, and are
subject to change after such date. The Trust 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.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT
ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS
RELEASE.
SOURCE Pure Industrial Real Estate Trust (PIRET)