Granite Real Estate Investment Trust (“Granite” or the “REIT”)
(TSX: GRT.UN / NYSE: GRP.U) announced today that it has acquired
one development property in Canada and has agreed to acquire five
income-producing properties in the United States together
comprising approximately 4.2 million square feet at a combined
purchase price of approximately C$330.7 million. In addition,
Granite announced that it has entered into a 690,000 square foot
build-to-suit lease with a leading e-commerce retailer, to be
constructed as the second phase of its Houston development.
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Brantford, Ontario Development Land
(Photo: Business Wire)
Kevan Gorrie, Granite’s President and Chief Executive Officer
commented that, “These transactions reflect our ongoing commitment
to developing and acquiring institutional-quality assets in key
distribution and e-commerce markets in Canada, the U.S. and Europe.
The acquisition of the development site provides us with the
opportunity to leverage our platform and expertise to develop
state-of-the-art facilities at scale in an active and
rapidly-growing distribution node. Upon stabilization, the
Brantford development is expected to generate significant NAV
growth for our unitholders. We are also pleased to add scale in our
target markets in the U.S. via the acquisitions of the
income-producing properties. These modern assets are consistent
with the quality of our existing portfolio and possess strong
potential for NOI and NAV growth. Finally, we are excited to
announce our first major Build-to-Suit project in Houston, which
will complement the initial phase of our development already in
progress. This build-to-suit project, involving a national
e-commerce tenant, will generate a yield consistent with our pro
forma development yield for the overall project.”
Canadian Acquisition
Brantford, Ontario Development Land
On August 16, 2021, Granite acquired a 92.2 acre parcel of land
in Brantford, Ontario for the development of a multi-phased
business park comprising a total of approximately 1.7 million
square feet of modern distribution and logistics space for $62.2
million. The greenfield site is serviced and capable of
accommodating state-of-the-art buildings ranging from 100,000
square feet to 500,000 square feet with the first phase of
construction anticipated to commence in the third quarter of 2022.
The project is anticipated to generate a stabilized development
yield of approximately 5.5%. The site is centrally located 0.5
kilometers from Highway 403, in one of Brantford's rapidly evolving
distribution nodes, providing access to nearly 8.8 million people
within a 90-minute drive. The property is one of the development
properties referred to in Granite’s June 2, 2021 press release as
being the subject of exclusive negotiations.
U.S. Acquisitions
1600 Rock Creek Boulevard, Joliet, Illinois
Granite has agreed to acquire a 0.1 million square foot modern
distribution facility located in the Chicago submarket of Joliet,
IL for $20.8 million (US $16.4 million). The property is 100%
leased to two tenants for a weighted average remaining lease term
of 4.4 years and is being acquired at an in-going yield of 4.9%.
Located in immediate proximity to Granite’s three recently acquired
assets in Chicago, the building features 32’ clear height and is
situated on 8 acres of land, near the intersection of the I-55 and
I-80. The acquisition is subject to customary closing conditions
and is expected to close in the third quarter of 2021. The property
is one of the income-producing properties referred to in Granite’s
June 2, 2021 press release as being the subject of exclusive
negotiations.
U.S. Portfolio Acquisition
Chicago (0.4 million
square feet)
Cincinnati (0.7
million square feet)
Memphis (1.3 million
square feet)
1243 Gregory Dr., Antioch, IL
60 Logistics Blvd., Richwood,
KY
12577 Stateline Rd. Olive Branch,
MS & 8740 South Crossroads Dr., Olive Branch, MS
Granite has agreed to acquire a portfolio of four modern
distribution warehouses located in Chicago, Cincinnati and Memphis,
collectively totaling 2.4 million square feet. The properties are
being acquired at a combined purchase price of approximately $247.7
million (US $195.0 million) representing an in-going yield of 4.7%.
The properties are 100% leased to seven tenants for a weighted
average remaining lease term of 3.2 years. These
institutional-quality assets have minimum 32’ clear heights with an
average age of 8 years. All of the assets are well located in their
respective markets, with close proximity to key transportation and
distribution infrastructure. The acquisition is subject to
customary closing conditions and is expected to close in the third
quarter of 2021.
The Canadian acquisition was funded using cash on hand and the
U.S. acquisitions are expected to be funded from Granite’s cash on
hand.
Houston Development
Granite and its partner NorthPoint Development have entered into
a new build-to-suit lease with a leading e-commerce retailer at its
Houston Development NorthPoint 90, for an initial term of 10.9
years. The approximately 690,000, 40’ clear height, modern
distribution building is being constructed as the second phase of
the multi-phase development, in addition to the initial phase one
of approximately 700,000 square feet currently under construction.
This build-to-suit project is estimated to be completed in the
third quarter of 2022.
ABOUT GRANITE
Granite is a Canadian-based REIT engaged in the acquisition,
development, ownership and management of logistics, warehouse and
industrial properties in North America and Europe. Granite owns 119
investment properties representing approximately 51.3 million
square feet of leasable area.
OTHER INFORMATION
Copies of financial data and other publicly filed documents
about Granite are available through the internet on the Canadian
Securities Administrators’ System for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed at www.sedar.com and on
the United States Securities and Exchange Commission’s Electronic
Data Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov. For further information, please see our
website at www.granitereit.com or contact Teresa Neto, Chief
Financial Officer, at 647-925-7560 or Andrea Sanelli, Manager,
Legal & Investor Services, at 647-925-7504.
FORWARD LOOKING STATEMENTS
This press release may contain statements that, to the extent
they are not recitations of historical fact, constitute
“forward-looking statements” or “forward-looking information”
within the meaning of applicable securities legislation, including
the United States Securities Act of 1933, as amended, the United
States Securities Exchange Act of 1934, as amended, and applicable
Canadian securities legislation. Forward-looking statements and
forward-looking information may include, among others, statements
regarding the expected square footage and stabilized yield of the
Brantford development lands, the expected timing of the closing of
the Unites States acquisitions, the expected completion date and
development yield of the second phase of the Houston development or
the impact of such acquisitions on Granite’s net operating income
and net asset value and Granite’s plans, goals, strategies,
intentions, beliefs, estimates, costs, objectives, economic
performance, expectations, or foresight or the assumptions
underlying any of the foregoing. Words such as “may”, “would”,
“could”, “will”, “likely”, “expect”, “anticipate”, “believe”,
“intend”, “plan”, “forecast”, “project”, “estimate”, “seek”,
“objective” and similar expressions are used to identify
forward-looking statements and forward-looking information.
Forward-looking statements and forward-looking information should
not be read as guarantees of the events, performance or results and
will not necessarily be accurate indications of whether or the
times at or by which such events, performance or results will be
achieved. Undue reliance should not be placed on such statements.
Forward-looking statements and forward-looking information are
based on information available at the time and/or management’s good
faith assumptions and analyses made in light of its perception of
historical trends, current conditions and expected future
developments, as well as other factors management believes are
appropriate in the circumstances, and are subject to known and
unknown risks, uncertainties and other unpredictable factors, many
of which are beyond Granite’s control, that could cause actual
events or results to differ materially from such forward-looking
statements and forward-looking information. Important factors that
could cause such differences include, but are not limited to, the
risks set forth in the annual information form of Granite Real
Estate Investment Trust and Granite REIT Inc. dated March 3, 2021
(the “Annual Information Form”) and management’s discussion and
analysis of results of operations and financial position for the
three and six month periods ended June 30, 2021 (the “Q2 MD&A).
The “Risk Factors” section of the Annual Information Form and the
Q2 MD&A also contain information about the material factors or
assumptions underlying such forward-looking statements and
forward-looking information. Forward-looking statements and
forward-looking information speak only as of the date the
statements and information were made and unless otherwise required
by applicable securities laws, Granite expressly disclaims any
intention and undertakes no obligation to update or revise any
forward-looking statements or forward-looking information contained
in this press release to reflect subsequent information, events or
circumstances or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210824005831/en/
Teresa Neto Chief Financial Officer 647-925-7560 or Andrea
Sanelli Manager, Legal & Investor Services 647-925-7504
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