HALIFAX, July 30, 2013 /CNW/ - Summit Industrial Income REIT ("Summit II" or the "REIT") (TSXV: SMU.UN) announced today that it had waived conditions and would acquire a portfolio of three light industrial properties and one fully-occupied office building located in Pointe Claire, Lasalle and St. Laurent in the Greater Montreal Region. The three industrial properties total 206,612 square feet of gross leaseable area ("GLA") with the office property adding 20,859 square feet. The REIT will pay approximately $15.3 million for the portfolio, financed by a new $9.9 million mortgage with the balance in cash from the REIT's revolving credit facility. Closing is anticipated on or before October 1, 2013. The purchase price equates to a solid acquisition cost for the industrial properties of $56.00 per square foot and a strong initial capitalization rate of approximately 8.0%.
The industrial properties are 93% occupied by national and strong regional tenants with a weighted average remaining lease term of 6.8 years. The small office property is 100% occupied with a remaining lease term of 6.8 years. All of the properties are close to highways, rail and Montreal's major airport, and there is some expansion potential available on land within the acquired portfolio. The acquisition significantly increases the REIT's presence in the strong Montreal market to a total of 308,558 square feet of GLA, or approximately 9% of the REIT's total portfolio.
"We are very pleased to be expanding our presence in the strong and vibrant Montreal market with this high quality property portfolio," stated Paul Dykeman, Chief Executive Officer. "With a solid 8% initial cap rate and attractive five-year financing, the purchase will be immediately and significantly accretive to our Adjusted Funds from Operations and make a solid contribution to our cash flows going forward."
About Summit II
Summit Industrial Income REIT is an open-ended mutual fund trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit II's units are listed on the TSX Venture Exchange and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit II. Although Summit II believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit II can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, market conditions, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit II being unable to obtain any required financing and approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit II undertake no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Summit Industrial Income REIT