EDMONTON, ALBERTA--(Marketwired - May 9, 2014) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
Melcor Real Estate Investment Trust (TSX:MR.UN) (the "REIT") announced today the closing of the purchase of two multi-tenant retail properties from Melcor Developments Ltd. ("Melcor"). The two properties, Kingsview Market Phase Three located in Airdrie, Alberta and Market Mall located in Regina, Saskatchewan, represent approximately 54,126 square feet of gross leasable area, and will be managed by Melcor, the REIT's external asset manager and property manager.
Approximately $7.40 million of the $ 13.5 million purchase price was satisfied by the issuance to Melcor of 694,836 Class B LP Units of Melcor REIT Limited Partnership, a subsidiary of the REIT, each with an issue price of $10.65. Melcor currently holds an approximate 48.1% effective interest in the REIT through the ownership of: (i) 10,225,634 Special Voting Units of the REIT; and (ii) 10,225,634 Class B LP Units of the Partnership, each of which is economically equivalent to, and exchangeable for, one trust unit of the REIT.
Darin Rayburn, Chief Executive Officer of the REIT commented on the transaction: "We are pleased to complete this transaction - our first purchase via Melcor's pipeline. These properties represent both aspects of the Melcor opportunity pipeline - new construction that fits our criteria for vend in to the REIT, and a redeveloped property.
"We've grown our portfolio GLA by 15% through 5 acquisitions since our initial public offering. At the same time, we have made good progress towards our portfolio diversification goals with substantial growth in both the industrial and retail asset classes GLA. These properties meet our acquisition criteria: markets we know well and have a presence in, complementary to our existing portfolio, quality construction and immediately accretive on a leverage neutral basis."
About Melcor REIT
Melcor REIT is an unincorporated, open-ended real estate investment trust. Melcor REIT owns, acquires, manages and leases quality retail, office and industrial income-generating properties with exposure to high growth Canadian markets. Its portfolio is currently made up of interests in 31 properties representing approximately 1.81 million square feet of gross leasable area located across Alberta and in Regina, Saskatchewan and Kelowna, British Columbia. For more information, please visit www.melcorREIT.ca.
This press release may contain forward‐looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking information. Such risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of tenants; the REIT's ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. The REIT's objectives and forward‐looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward‐looking information in this press release speaks as of the date of this press release. The REIT does not undertake to update any such forward‐looking information whether as a result of new information, future events or otherwise.
Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulators.