Alexis Nihon Real Estate Investment Trust

Alexis Nihon Real Estate Investment Trust

April 04, 2006 11:45 ET

Alexis Nihon Announces $15 Million Acquisition of Retail Properties in Suburban Montreal

MONTREAL, QUEBEC--(CCNMatthews - April 4, 2006) -

Acquisition will increase REIT's portfolio diversification

Alexis Nihon REIT (TSX:AN.UN) today announced the acquisition of a commercial property portfolio in the south shore region of the greater Montreal area. The acquisition price of $15 million represents a going-in capitalization rate of approximately 8.1%.

The acquisition comprises six free standing retail buildings totaling approximately 98,000 square feet. The properties were purchased from the principals of a leading south shore real estate developer.

"We have been looking to increase our diversification in the suburban Montreal area," said Paul J. Massicotte, President and CEO. "These retail properties, located in high traffic and high growth areas, create a strong complement to our existing industrial properties on the south shore."

"This transaction offers the advantages of immediate accretion to distributable income and a purchase price below replacement cost," said Rene Fortin, Senior Vice-President and Chief Financial Officer. "These quality properties host stable, long-term tenants and we are pleased to welcome them to the REIT."

"The properties are located in three heavily developed commercial, retail and entertainment zones that feature a prosperous and regular clientele," said Guy Charron, Executive Vice President and Chief Operating Officer.

Three of the properties are situated in a retail district at the corner of Roland Therrien Boulevard and Chemin du Tremblay in Longueuil, two are near the Promenades Saint-Bruno regional mall and the last, called Place Nobel, is located within a mix of retail, entertainment, restaurant and hotel developments in Boucherville at a major interchange serving Highway 20.

The six buildings hold leasable area totaling approximately 98,000 square feet, representing an acquisition price of $153 per square foot. The Tremblay and Promenades properties are recently constructed retail facilities that were developed by the vendor.

The portfolio is 90.2% occupied. Some of the principal tenants with long term leases include Caisse Populaire Desjardins, Harvey's, Kelsey's and Tim Hortons. The weighted average term of leases in place for the portfolio is 5.71 years.

The addition increases the retail segment of the portfolio by 6.6% to 1,585,845 square feet. Following the acquisition, the asset allocation within the REIT's portfolio consists of the following:

Asset class No. of properties Square footage Per cent of total
Industrial 31 3,711,139 43.2%
Office 20 2,987,677 34.8%
Retail 10 1,585,845 18.5%
Residential (i) 0 300,321 3.5%

(i)Residential apartments are located in Place Alexis Nihon, classed as an office property.

The purchase price, less an assumed mortgage of approximately $3.9 million, will be funded by the REIT's credit facilities. The interest rate on the assumed mortgage is 6.19%, has a 20 year amortization, and matures July 1, 2009.

About Alexis Nihon REIT

The REIT currently owns interests in 61 office, retail, and industrial properties, including a 426-unit multi-family residential property, all located in the greater Montreal area and the National Capital region. The REIT's portfolio has an aggregate of 8.6 million square feet of leasable area, of which 0.4 million square feet is co-owned.

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