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Agellan Commercial Real Estate Investment Trust

Exchange: TSX Exchange | Feb 19, 2019, 12:41 AM EST

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Agellan Commercial Real Estate Investment Trust Announces the Acquisition of Seven Light Industrial Properties in Dallas, Texas


Agellan Commercial Real Estate Investment Trust:


Agellan Commercial Real Estate Investment Trust (the “REIT”) (TSX: ACR.UN) announced today that it has entered into an agreement to purchase (the “Acquisition”) seven light industrial properties located in Northeast Dallas, Texas (the “Acquired Properties”).

The Acquisition comprises approximately 194,000 square feet of gross leasable area and will be acquired for an aggregate purchase price of approximately US$12.2 million (before closing costs), representing a going-in capitalization rate of approximately 7.7%.

The Acquired Properties are currently 97% leased to 13 tenants and have a remaining weighted average lease term of approximately 2.5 years. The REIT expects to finance the Acquisition by drawing down on its operating credit facility and by obtaining a first mortgage secured by the Acquired Properties.

Acquisition Highlights

  • 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 in the Northeast Dallas sub-market. The sub-market benefits from a dense surrounding labour pool.
  • Dallas/Fort Worth is the 4th largest metropolitan statistical area in the United States and one of the strongest U.S. employment markets.
  • The Acquired Properties reflect a diverse tenant roster, with the largest tenant occupying only 24% of the gross leasable area of the Acquired Properties.

“The REIT is excited to expand its presence in Dallas/Fort Worth,” said Frank Camenzuli, Chief Executive Officer of the REIT. “The Dallas/Fort Worth industrial market is the fifth largest industrial market in the U.S. and the REIT expects to benefit from its extensive knowledge and experience in several Houston sub-markets.”

The Acquisition is expected to close prior to the end of the second quarter of 2018. Closing of the Acquisition 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.

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 45 properties contain 7.1 million square feet of gross leasable area, with the REIT’s ownership interest at 6.7 million square feet. The properties are located in major urban markets in the United States and Canada.

Additional information about the REIT is available at www.agellancommercialreit.com or www.sedar.com.

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 year ended December 31, 2018, which should be read in conjunction with this press release.

Forward-Looking Statements:

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, 416-593-6800 x226
Fax: 416-593-6700

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