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TORONTO, Oct. 31,
2024 /CNW/ - Automotive Properties Real Estate
Investment Trust (TSX: APR.UN) ("Automotive Properties REIT" or the
"REIT") announced today that it has entered into two separate
agreements to acquire a total of three properties (the
"Acquisitions"). The first agreement is to acquire a
Rivian-tenanted automotive property in Tampa, Florida (the "Tampa Property") for a
purchase price of approximately US$13.5
million. The second agreement is to acquire two heavy
construction equipment dealership properties in the Greater Montreal Area (the "Greater Montreal
Properties") for a purchase price of approximately $25.4 million. The additions of the Tampa
Property and the Greater Montreal Properties are expected to be
accretive to the REIT's Adjusted Funds from Operations ("AFFO")¹
per unit.
"Our acquisition of this Rivian property in Tampa will mark our targeted entry into the
U.S. market and increase our exposure to the electric vehicle
retail and service market in North
America. Our acquisition of these two heavy construction
equipment dealership properties in Greater Montreal will mark our entry into a
new industry vertical that has similar characteristics to
automotive dealerships, including the essential nature of their
business," said Milton Lamb,
President and CEO of Automotive Properties REIT. "Upon closing,
these acquisitions will enhance the tenant and geographic
diversification within our portfolio, and are expected to drive
AFFO."
The Tampa Property is a 25,000 square-foot Rivian sales,
delivery and service facility that is situated on 2.75 acres of
land located at 701 N. Dale Mabry Highway in Tampa, Florida, in close proximity to
Interstate 275 and the Tampa
International Airport. The Tampa Property is tenanted by Rivian
LLC, which recently completed a major renovation to the facility,
under a long term, triple-net lease that includes contractual fixed
annual rent increases with renewal options. Rivian LLC is a leading
American developer and manufacturer of electric vehicles and
accessories that completed its US$13.7
billion initial public offering on the NASDAQ stock exchange
in November 2021. The REIT expects to
close the Tampa Property acquisition in the first quarter of 2025,
subject to customary closing conditions.
The Greater Montreal Properties consist of a 31,000 square-foot
Brandt Tractor Ltd. facility with a John Deere heavy construction
equipment dealership that is situated on 6.6 acres of land located
at 3855 Boulevard Matte in Brossard, Québec, and a 28,611 square-foot
Strongco heavy construction equipment dealership (Volvo, and other
equipment brands) that is situated on 5.1 acres of land located at
72 Chemin du Tremblay in
Boucherville, Québec. The REIT
expects to close the Greater Montreal Properties acquisition in
December 2024, subject to customary
closing conditions.
The triple-net lease on the Brandt Tractor Ltd. heavy
construction equipment dealership property, is a mid-term lease,
and includes contractual bi-annual fixed rent increases. Brandt
Tractor Ltd. is the world's largest John Deere construction and
forestry dealer and a division of the Brandt Group of Companies, a
privately-owned, Canadian based manufacturing and distribution
company that was founded in 1932 and serves customers in industries
such as agriculture, construction, forestry, rail, mining, steel,
transportation, material handling, and energy in Canada, the United
States, Australia, and
New Zealand.
The Strongco heavy construction equipment dealership property is
tenanted pursuant to a mid-term lease, and includes contractual
annual fixed rent increases. Strongco is owned by Nors, S.A.
Founded in 1933, Nors is a privately-owned, Portuguese based
company that sells, rents and services construction,
infrastructure, mining and forestry equipment, trucks, busses, cars
and marine and industrial engines in 16 countries in four
continents.
The REIT expects to fund the respective purchase prices of the
Acquisitions with cash on hand and by drawing on its revolving
credit facilities which had been paid down in full from the net
proceeds of the previously announced closing of the sale of the
REIT's Markham, Ontario dealership
property on October 1, 2024.
About Automotive Properties REIT
Automotive
Properties REIT is an unincorporated, open-ended real estate
investment trust focused on owning and acquiring primarily
income-producing automotive dealership properties located in
Canada. The REIT's portfolio
currently consists of 76 income-producing commercial properties,
representing approximately 2.8 million square feet of gross
leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. Automotive Properties REIT
is the only public vehicle in Canada focused on consolidating automotive
dealership real estate properties. For more information, please
visit: www.automotivepropertiesreit.ca.
(1) Non-IFRS Financial Measure
This news release
contains a financial measure which is not defined under
International Financial Reporting Standards ("IFRS") and may not be
comparable to similar measures presented by other real estate
investment trusts or enterprises. AFFO is a key measure of earnings
performance used by real estate businesses. This measure is not
defined by IFRS and does not have a standardized meaning prescribed
by IFRS, and therefore should not be construed as an alternative to
net income or cash flow from operating activities calculated in
accordance with IFRS. The REIT believes that AFFO is an important
measure of economic earnings performance and is indicative of the
REIT's ability to pay distributions from earnings. The IFRS
measurement most directly comparable to AFFO is net income. Please
refer to the REIT's Management Discussion & Analysis
("MD&A") most recently filed on SEDAR+ for further
discussion of this non-IFRS financial measure.
Forward-Looking Information
This news release
contains forward-looking information within the meaning of
applicable securities legislation, which reflects the REIT's
current expectations regarding future events and in some cases can
be identified by such terms as "will", "should", "anticipates",
"could" and "expects". Forward-looking information includes
statements regarding the financial impact of the Acquisitions on
the REIT's AFFO per unit and the
expected timing of closing the Acquisitions. Forward-looking
information is based on a number of assumptions and is subject to a
number of risks and uncertainties, many of which are beyond the
REIT's control that could cause actual results and events to differ
materially from those that are disclosed in or implied by such
forward-looking information. Such risks and uncertainties include,
but are not limited to, the factors discussed under "Risks &
Uncertainties, Critical Judgments & Estimates" in the REIT's
Management's Discussion & Analysis ("MD&A") for the three
and six-month periods ended June 30,
2024 and in the REIT's annual information form dated
March 7, 2024, which are available on
SEDAR+ (www.sedarplus.ca) and the REIT's website
(www.automotivepropertiesreit.ca). The REIT does not undertake any
obligation to update such forward-looking information, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable law. This forward-looking
information speaks only as of the date of this news
release.
SOURCE Automotive Properties Real Estate Investment Trust