WINNIPEG, MB, Dec. 12,
2024 /CNW/ - Artis Real Estate Investment Trust
("Artis" or the "REIT") (TSX: AX.UN) announced today that it has
concluded the strategic review process, first announced on
August 2, 2023 (the "Strategic
Review").
The Strategic Review was overseen by a special committee of
trustees (the "Special Committee") and its external advisors and
was initiated for the purpose of considering and evaluating
strategic alternatives available to the REIT to unlock and maximize
value for unitholders.
"Since announcing the strategic review in August 2023, we have been navigating a very
challenging interest rate environment," said Samir Manji, President and Chief Executive
Officer of Artis. "Despite the significant headwinds we faced, the
quality and resilience of Artis's portfolio enabled us to monetize
$1.1 billion of real estate and,
through this active disposition exercise, we have been able to
materially reduce leverage and de-risk Artis's balance sheet. We
are very pleased with what we have achieved during this time on
behalf of our owners with the guidance and efforts of the Special
Committee and Board."
As part of the Strategic Review, the Special Committee
considered external macroeconomic factors, including rising
interest rates, combined with Artis's near-term debt profile. A key
area of focus during this time was improving the REIT's balance
sheet and enhancing liquidity. Since the initiation of the
Strategic Review, Artis sold $1.1
billion of assets at sale prices in line with the REIT's
IFRS values and used the proceeds from these dispositions primarily
to reduce debt. As a result, Artis has significantly improved its
balance sheet, reporting that total debt to gross book value had
decreased to 39.8% at September 30,
2024, compared to 47.2% at June 30,
2023.
Further, as part of the Strategic Review, the Special Committee
considered Artis's upcoming debt obligations. To refinance debt and
improve the REIT's risk profile, Artis finalized terms on new
three-year senior secured credit facilities in an aggregate amount
of $520 million Canadian dollars (the
"Facilities"), which include a $350
million revolving credit facility and a $170 million non-revolving credit facility. BMO
Capital Markets and Canadian Imperial Bank of Commerce acted as
Co-Lead Arrangers. At closing, the Facilities will bear interest at
a rate of Canadian prime rate plus 110 basis points, and thereafter
the REIT has the option to convert to a rate of adjusted CORRA plus
210 basis points. The Facilities will replace the existing senior
unsecured revolving and non-revolving credit facilities. The
Facilities can be utilized for general corporate purposes,
including the acquisition or development of additional income
producing properties and can be drawn in Canadian or US
dollars.
Since the announcement of the Strategic Review, Artis has made
substantial progress with its disposition strategy, strengthening
its balance sheet and improving its risk profile related to
upcoming debt obligations. At a macro level, the interest rate
environment has improved significantly in recent months. In light
of these factors, the Board believes it is in the best interest of
Artis and its unitholders to continue to pursue the REIT's existing
business strategy. With the REIT's near-term debt maturities
satisfied, Artis is well positioned to pursue opportunities that
are aligned with the REIT's long-term goal of growing net asset
value per unit.
"With the tide turning on interest rates and a healthy level of
liquidity, we can now turn our attention to growth opportunities
that we believe will produce above average risk-adjusted returns
and will grow net asset value per unit for Artis's unitholders,"
added Samir Manji. "We remain
committed to our strategy and confident about the road ahead. We
want to thank the members of the Special Committee for their hard
work, time and effort over the past 16 months and the Board for
their continued guidance and support. The Artis Board and
management team is excited to shift this attention now to pursuing
growth opportunities and remain grateful to our loyal unitholders
for their continued confidence and trust."
Artis is a diversified Canadian real estate investment trust
with a portfolio of industrial, office and retail properties in
Canada and the United States. Artis's vision is to become
a best-in-class real estate asset management and investment
platform focused on value investing.
Cautionary Statements
This press release contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "expects", "anticipates",
"intends", "estimates", "projects", "seeks", and similar
expressions or variations of such words and phrases or state that
certain actions, events or results ''may'', ''would'' or ''will''
occur or be achieved are intended to identify forward-looking
statements. Particularly, statements regarding building Artis into
a best-in-class asset management and investment platform focused on
value investing, the REIT's ability to strengthen its balance
sheet, enhance its liquidity and grow net asset value are
forward-looking statements. Forward-looking statements are based on
a number of factors and assumptions which have been used to develop
such statements, but which may prove to be incorrect. Artis cannot
assure investors that actual results will be consistent with any
forward-looking statements and Artis assumes no obligation to
update or revise such forward-looking statements to reflect actual
events or new circumstances. All forward-looking statements
contained in this press release are qualified by this cautionary
statement.
SOURCE Artis Real Estate Investment Trust