Charter Real Estate Investment Trust

Charter Real Estate Investment Trust

July 09, 2007 13:15 ET

Charter Real Estate Investment Trust (TSX-V:CRH.UN) Announces Agreement to Acquire a Portfolio of Western Canadian Properties

TORONTO, ONTARIO--(Marketwire - July 9, 2007) - Charter Real Estate Investment Trust ("Charter REIT")(TSX VENTURE:CHR.UN) is pleased to announce that it has entered into an agreement to purchase a portfolio of triple net leased properties and development properties located primarily in Western Canada (the "Acquisition"). The purchase price for the portfolio is approximately $80 million before closing costs and is subject to customary closing adjustments.

The Acquisition

The triple net properties comprise approximately 632,000 square feet of gross leaseable area ("GLA"), and are 100% leased. There are also five development properties in the portfolio, of which four, comprising approximately 60,000 square feet of GLA, are subject to a lease or an offer to lease. Of these four, one is currently under construction, while construction is expected to begin shortly on the other three. The fifth development property (approximately 10,000 square feet of potential GLA) is land held for future development. Once the four initial development properties are completed, which is expected to be the second quarter of 2008, approximately 64% of the portfolio, based on net operating income, will be retail uses while the balance of the portfolio would be classified as industrial properties. On an unlevered basis after completion of the contemplated development, the portfolio is expected to yield between 7.75% and 8.00% before closing costs.

Charter REIT expects to finance the Acquisition by drawing down on its acquisition facility (which is expected to be available to Charter REIT following closing of the acquisition of Cornwall Square Shopping Centre, as described in the press release dated June 29, 2007), by the assumption of existing mortgages and by entering into new debt arrangements. The closing of the Acquisition is subject to significant conditions, including the completion of due diligence and environmental investigations with respect to the properties that must be satisfactory to Charter REIT in its sole discretion, and there can be no assurance that the Acquisition will be completed. The Acquisition is also subject to approval by the TSX Venture Exchange in accordance with the applicable policies of the exchange. If the conditions under the purchase agreement are fulfilled, the Acquisition is scheduled to close on or about October 8, 2007.

Charter REIT

Charter Real Estate Investment Trust is an open-end real estate investment trust established under the laws of the Province of Ontario. Charter REIT is focused on acquiring a portfolio of retail and mixed-use retail real estate comprised of stable cash flow and value-add properties from both primary and secondary markets throughout Canada, with the principal goal of generating a reliable and growing yield for its investors. Charter REIT owns four commercial real estate properties located in Ontario and Quebec.

This press release contains forward-looking statements with respect to the Acquisition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe" or "continue" or the negative thereof or similar variations. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Forward-looking statements are based on a number of assumptions which may prove to be incorrect. The completion of the acquisition of the Properties is subject to significant conditions and may not be completed by the REIT. In particular, the REIT has not yet completed its due diligence investigations of the Properties nor received the approval of the TSX Venture Exchange for the Acquisition. If the REIT is not satisfied with the results of its due diligence on the properties or does not receive the approval of the TSX Venture Exchange, it may not complete the acquisition. All forward-looking statements contained in this press release are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Accordingly, readers should not place undue reliance on forward-looking statements. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the REIT has no obligation to update such statements except as required by law.

The Exchange Tower
130 King Street West
Suite 2810, P.O. Box 104
Toronto, Ontario M5X 1A4
Telephone: (416) 364-5705
Fax: (416) 861-8166

The TSX Venture Exchange does not accept responsibility for the adequacy of this press release.

Contact Information

  • Charter Real Estate Investment Trust
    Ari Silverberg
    President and Chief Operating Officer
    (416) 364-5705
    (416) 861-8166 (FAX)