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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 acquire a multi-tenant, industrial distribution facility located in Sarasota, Florida (the “Meridian Distribution Center” or the “Acquisition”).
The Meridian Distribution Center comprises approximately 907,000 square feet of gross leasable area and will be acquired for an aggregate purchase price of approximately US$52.5 million (before closing costs), representing a going-in capitalization rate of approximately 8.1%.
The Meridian Distribution Center is one of the largest distribution facilities in the State of Florida and is 100% occupied by four national and regional tenants. The weighted average remaining lease term with these tenants is approximately 5.5 years.
The REIT expects to finance the Acquisition with proceeds from its recently completed public unit offering and the assumption of an existing mortgage that is secured by the property.
- The Acquisition is expected to be immediately accretive to the REIT’s adjusted funds from operations (“AFFO”) per unit.
- The Meridian Distribution Center has a state-of-the-art refrigeration and freezer system which represents approximately 20% of the total gross leasable area, allowing the property to accommodate a diverse range of tenants, and is unique in the submarket.
- The Acquisition is strategically located to reach 87% of Florida’s population with round trip, same day service, making it logistically appealing to many distributors.
- Agellan Capital Partners Inc., the external asset manager of the REIT, has direct experience with refrigeration and freezer distribution facilities in Central Florida, and will leverage their existing relationships and market knowledge to the REIT’s benefit.
The Acquisition is expected to close during the third quarter of 2016 and is subject to certain closing conditions typical for a transaction of this type. Accordingly, 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 current portfolio aggregates approximately 4.7 million square feet of gross leasable area in 31 properties. The properties are primarily 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 and AFFO are reconciled to net income, in management’s discussion and analysis for the three and six months ended June 30, 2016, 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, 416-593-6800 x226