Agellan Commercial Real Estate Investment Trust:
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Agellan Commercial Real Estate Investment Trust (the “REIT”) (TSX: ACR.UN) announced today that it has entered into an agreement to purchase (the “Acquisition”) eight industrial properties located throughout suburban Chicago, Illinois (the “Acquired Properties”).
The Acquisition comprises approximately 314,000 square feet of gross leasable area and was acquired for an aggregate purchase price of approximately US$28.0 million (before closing costs), representing a going-in capitalization rate of approximately 7.7%.
The Acquired Properties are fully leased to 17 tenants and have a remaining weighted average lease term of approximately 4.6 years. The REIT expects to finance the Acquisition by drawing down on its operating credit facility and by obtaining a first mortgage.
- The Acquisition is expected to be immediately accretive to the REIT’s adjusted funds from operations (“AFFO”) per unit.
- The Acquired Properties are well-located throughout several key industrial sub-markets in suburban Chicago, the largest industrial market in the United States.
- The Acquired Properties reflect a diverse tenant roster, with the largest tenant occupying only 14.3% of the gross leasable area of the Acquired Properties.
- While the Chicago industrial market has experienced recent supply increases in the “big box distribution” sector, the Acquired Properties, offer a differentiated product that has experienced consistent demand.
“The REIT is excited to expand its presence in the Greater Chicago Area with this acquisition,” said Frank Camenzuli, Chief Executive Officer of the REIT. “The Chicago industrial market is the largest industrial market in the U.S. and the REIT expects to benefit from acquiring these high quality U.S. industrial assets.”
The transaction is expected to close prior to end of the second quarter. Closing of the transaction is subject to certain closing conditions typical for a transaction of this type. There can be no assurance that all conditions to closing will be satisfied or waived.
May 2017 Distribution
The REIT also announced today that its Board of Trustees has declared a distribution of $0.06458 per unit for the month of May, 2017, representing $0.775 per unit on an annualized basis. The distribution will be payable on June 15, 2017 to unitholders of record as at May 31, 2017.
The REIT offers a distribution reinvestment plan (“DRIP”) to unitholders whereby the participants may elect to have their cash distributions used to purchase trust units of the REIT. Unitholders wishing to participate should contact their investment advisors to enroll in the DRIP.
About Agellan Commercial Real Estate Investment Trust
The REIT is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning industrial, office and retail properties in select target markets in the United States and Canada.
The REIT’s 36 properties contain 6.7 million square feet of gross leasable area, with the REIT’s ownership interest at 6.3 million square feet. The properties are located in major urban markets in the United States and Canada.
Non-IFRS supplemental measures:
Certain terms used in this press release are not recognized under International Financial Reporting Standards (“IFRS”) and therefore these terms should not be construed as alternatives to IFRS measures, such as net income or cash flow from operating activities, nor are these terms necessarily comparable to similar measures presented by other reporting issuers. These terms are used by management to measure, compare and explain the operating results and financial performance of the REIT. Management believes that these terms are relevant measures in comparing the REIT’s performance to industry data and the REIT’s ability to earn and distribute cash to holders of the REIT’s units. These non-IFRS measures are defined, and FFO, AFFO and ACFO are reconciled to net income, in management’s discussion and analysis for the three month period ended March 31, 2017, which should be read in conjunction with this press release.
This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events. 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. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Agellan Commercial Real Estate Investment Trust
Frank Camenzuli, CEO
Tel: (416) 593-6800 x226
Fax: (416) 593-6700