TORONTO,
Oct. 16, 2013 /CNW/ - Summit
Industrial Income REIT ("Summit II" or the "REIT") (TSXV: SMU.UN)
announced today that it had completed the financing on the
previously-announced acquisition of six light industrial properties
aggregating approximately 653,000 square feet of Gross Leaseable
Area ("GLA") and one office property for a total purchase price of
approximately $52.7 million. The
purchases were financed with $26.5
million in new five-year mortgages with a weighted average
interest rate of 3.85%, the assumption of a current $5.4 million mortgage, and the balance in cash.
The average capitalization rate on the acquired properties is 7.22%
with a weighted average remaining lease term of 5.1 years. Details
of the specific property purchases can be found below.
"We continue to successfully execute our strategy of buying
well-located, modern and attractive properties with strong cap
rates, and with the favourable low-cost financing we have arranged
for these acquisitions, they will be immediately and significantly
accretive to our Adjusted Funds from Operations. In addition, we
have further strengthened the size and scale of our portfolio and
the REIT's presence in our key targeted regional markets," stated
Paul Dykeman, CEO.
Effective August 29, 2013 the REIT
completed the previously-announced purchase of three light
industrial properties located in Brampton and Barrie,
Ontario, and Laval, Quebec
aggregating 446,379 square feet of GLA. The REIT paid approximately
$37.4 million for the portfolio,
financed by the assumption of an existing 2-year $5.4 million mortgage bearing an interest rate of
5.22%, a new five-year $16.4 million
mortgage with an interest rate of 3.85%, and the balance in cash
from the REIT's revolving credit facility. The purchase price
resulted in a very strong 6.89% initial capitalization rate. All of
the properties are close to highways, rail or other major
transportation links, and all are 100% occupied by single
credit-worthy national tenants with a weighted average remaining
lease term of approximately 4.3 years.
Effective October 1, 2013 Summit
II completed the previously-announced purchase of a portfolio of
three light industrial properties and one fully-occupied office
building located in Pointe Claire,
Lasalle and St. Laurent in the Greater Montreal Region.
The three industrial properties total 206,612 square feet of GLA
with the office property adding 20,859 square feet. The REIT paid
approximately $15.3 million for the
portfolio, financed by a new five-year $10.1
million mortgage bearing an interest rate of 3.84% with the
balance in cash from the REIT's revolving credit facility. The
purchase price equates to a strong initial capitalization rate of
8.02%. The industrial properties are 93% occupied by national and
strong regional tenants with a weighted average remaining lease
term of 6.8 years. The office property is 100% occupied with a
remaining lease term of 6.8 years. All of the properties are close
to highways, rail and Montreal's
major airport, and there is expansion potential available on land
within the acquired portfolio.
About Summit II
Summit Industrial Income REIT is an unincorporated open-end trust
focused on growing and managing a portfolio of light industrial
properties across Canada. Summit
II's units are listed on the TSX-V 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 II's
property portfolio. The forward-looking statements and information
are based on certain key expectations and assumptions made by
Summit II, including general economic conditions. 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, 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