TORONTO, Nov. 16, 2017 /CNW/ - Summit Industrial Income
REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it
has waived conditions and will acquire 100% of a four property
light industrial portfolio located in the REIT's key target
markets. In total, the portfolio will add 238,783 square feet of
space for a total purchase price of approximately $35.0 million. The acquisitions will be financed
by new $20.7 million five-year debt
with an expected interest rate of 3.33% and the balance in cash
from the REIT's operating credit facility, generating a strong
going-in capitalization rate of approximately 6.14%. The weighted
average lease term for the portfolio is a solid 6.75 years. Closing
is expected on or before December 15,
2017.
The portfolio being acquired consists of the following:
- A 41,566 square foot logistics centre in Mississauga, Ontario located close to major
transportation links leased to a single tenant under a recently
renewed five year lease expiring in 2023. The property is
cross-docked with an attractive 20% site coverage to allow ample
truck and trailer parking.
- A 119,060 square foot modern distribution facility in
Kitchener, Ontario design-built
for a single tenant in 2005 with a lease expiring in 2025. The
area's strong fundamentals include high tenant retention, low
vacancy and strong lease rate inflation.
- A 26,665 square foot light industrial property in Cambridge, Ontario leased to a single tenant
under a recently-renewed seven-year lease expiring in 2024. The
property is well-located in the City's largest industrial park with
historically low vacancy rates and solid lease rate inflation.
- A 51,492 square foot light industrial property in
Calgary, Alberta leased to a
single tenant occupying the property since its construction in
1998. It is well-positioned in the Foothills Industrial Park with
excellent access to major transportation inks.
"With these acquisitions, we will have almost fully invested the
proceeds of our June 30, 2017
bought-deal equity offering in quality income producing properties
well-located in our key target markets. With the completion of this
transaction, our leverage will be approximately 54%, allowing us
the flexibility to maintain our track record of accretive growth,"
commented Paul Dykeman, Chief
Executive Officer. "Once completed, our total property portfolio
will grow to 69 properties aggregating 7.7 million square feet. Our
acquisition pipeline remains robust, and we are confident we will
see further growth in the months ahead."
About Summit
Summit Industrial Income REIT is an unincorporated open-end
trust focused on growing and managing a portfolio of light
industrial properties across Canada. Summit's units are listed on the TSX
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. More particularly and
without limitation, this news release contains forward looking
statements and information concerning the goal to build Summit's
property portfolio. The forward-looking statements and information
are based on certain key expectations and assumptions made by
Summit, including general economic conditions. Although Summit
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 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, tenant risks, current economic environment,
environmental matters, general insured and uninsured risks and
Summit 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 undertakes 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.
SOURCE Summit Industrial Income REIT