TORONTO,
March 13, 2013 /CNW/ - Summit
Industrial Income REIT ("Summit II") (TSXV: SMU.UN)
announced today that it has completed its previously announced
acquisition of fifteen light industrial properties well located in
the Greater Toronto Area (the
''GTA''); Moncton, New
Brunswick; and Edmonton,
Alberta. Summit II paid approximately $171.4 million for the properties, satisfied by
the assumption of new and existing mortgages with the balance in
cash from its recently completed equity offering. The new
properties will add approximately 2.0 million square feet of gross
leasable area ("GLA") to Summit II's existing portfolio.
New financings totalling $107.5 million have been arranged, including new
mortgage financings of $90.5 million
consisting of approximately $23.5
million with a five-year term, an assumed mortgage of
$13.0 million with four years of term
remaining, and $54.0 million with
seven-year terms, resulting in an overall weighted average term to
maturity of 6.1 years for the new mortgages. Importantly, the new
mortgages bear an attractive weighted average interest rate of
3.69%. Additionally, Summit II did not use the $68.0 million interim backstop debt originally
approved to complete the acquisitions, but instead generated
significant transaction savings by finalizing all necessary
mortgage debt prior to closing the property purchases.
In addition, Summit II announced today that it
has increased its revolving line of credit to $55.0 million from $38.0
million, providing management with increased financial
resources and flexibility to capitalize on future growth
opportunities.
With the completion of these acquisitions,
Summit II's property portfolio will consist of 25 light industrial
properties aggregating 2.7 million square feet of GLA well-located
in key urban markets in British
Columbia, Saskatchewan,
Alberta, Ontario and New
Brunswick with a total asset value of approximately
$260.0 million. The portfolio is well
balanced in terms of lease maturities with an improved geographic
exposure and diversification between single and multi-tenant
properties. In addition, the portfolio's tenant base is
considerably strengthened with a diverse group of national and
regional tenants and no single tenant generating more than 12% of
total base rental income. Importantly, there are no mortgage
maturities before 2017, and Summit II's leverage ratio stands at a
conservative 54.5%.
"With the completion of these key acquisitions,
Summit II now has a platform with sufficient size and scale to
generate stable and increasing long-term cash flows and on which we
can grow significantly in the coming quarters," commented
Paul Dykeman, Chief Executive
Officer. "We were also pleased to have improved on the forecasted
mortgage profile for the acquired properties, arranging longer-term
funding at lower overall interest rates, improving our cost profile
for the next few years."
About Summit II
Summit II is an open-ended mutual fund trust focused on
growing and managing a portfolio of light industrial properties
across Canada. Summit II's units
are listed on the TSX Venture Exchange 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 closing of the
acquisitions. The forward-looking statements and information are
based on certain key expectations and assumptions made by Summit
II. Although Summit II 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 II 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, market conditions, tenant risks,
current economic environment, environmental matters, general
insured and uninsured risks and Summit II 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 II
undertake 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.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Summit Industrial Income REIT