Partners Real Estate Investment Trust
TSX VENTURE : PAR.UN

Partners Real Estate Investment Trust

August 31, 2011 16:00 ET

Partners REIT Completes Quebec Acquisition

VICTORIA, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2011) - Partners Real Estate Investment Trust (TSX VENTURE:PAR.UN) ("Partners REIT") announced today that it had completed the acquisition (the "Acquisition") of Place Desormeaux, a 250,000 square foot enclosed shopping centre in Longueuil, Quebec on the south shore of the Greater Montreal Region. The property is well situated in a growing urban market and anchored by high quality necessity-based retailers including a Super C grocery store, Pharmaprix, Zellers, Dollarama, the SAAQ, National Bank and Bank of Montreal. It is currently 98.0% occupied. The centre also offers the opportunity to enhance income through the expansion of existing tenants and the development of three new retail pad sites. The property currently generates rental income, net of property operating expenses, of approximately $2.4 million on an annualized basis and management expects it will contribute approximately $600,000 after interest expense in incremental annualized net income.

Partners REIT paid approximately $32.2 million for the property with approximately $3.6 million in additional acquisition and capital improvement costs to be incurred in the future. The aggregate outlay of funds was funded by a $23.0 million loan from OMERS Administration Corporation secured by the property with a three year term and bearing interest at a rate of 4.05%. The balance of the purchase price was funded by a 25-month loan facility from Firm Capital Corporation ("FCC") for $13.5 million ($7.5 million of which is revolving) secured against the Partners REIT portfolio of properties with a floating interest rate that is the greater of 9.00% or the TD Canada Trust Posted Bank Prime Rate of Interest plus 4.00%. In connection with the loan facility, Partners REIT has agreed to issue 2,500,000 unit purchase warrants (the "Lender Warrants") to FCC as a funding fee, subject to the TSX Venture Exchange approval. Each whole warrant would entitle the holder to acquire one Partners REIT unit at $1.80 per unit (the "Exercise Price"), subject to adjustment, for a period of 3 years. The Exercise Price is subject to adjustment if, among other circumstances, Partners REIT issues units through an investment bank syndicated offering or through a private placement in excess of $8,000,000, within 120 days of the date of the advance under the Loan at an issue price of less than $1.80 per unit (the "Lower Price"). In such event, the acquisition price on the Lender Warrants will be reset to the Lower Price for the full term of the Lender Warrants, provided that such Lower Price is approved by the TSX Venture Exchange. In addition, if the number of Lender Warrants is less than 2,500,000, Partners REIT has agreed to issue additional warrants to the holder for the shortfall amount, nine months from the initial advance of funds, at an exercise price equal to the volume weighted average price of Partners REIT's units for the 5 business days prior to the issuance of the shortfall units.

The transaction, including the granting of the Lender Warrants on these terms, is subject to TSX Venture Exchange approval.

"We are very pleased to be adding this high quality shopping centre to the portfolio and increasing our presence in the Province of Quebec," commented Adam Gant, Chief Executive Officer.

About Partners REIT

Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 19 retail properties located in British Columbia, Ontario, Manitoba and Quebec, aggregating approximately 1.5 million square feet of leaseable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.

Forward-looking Statements

Certain statements included in this press release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "will", "offers the opportunity" and similar expressions to the extent they relate to Partners REIT. The forward-looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including TSX Venture Exchange approval of the Lender Warrants and the transactions contemplated by this press release, the integration of the Acquisition with our property portfolio, our expectations regarding an increase in incremental funds as a result of the Acquisition, our intention to continue to grow and diversify our portfolio, access to capital, regulatory approvals, intended acquisitions and general economic and industry conditions. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Partners Real Estate Investment Trust
    Patrick Miniutti
    President and Chief Operating Officer
    (250) 940-5500
    www.partnersreit.com