VANCOUVER, BC--(Marketwired - April 04, 2017) - Pure Industrial Real Estate Trust (TSX: AAR.UN) ("the "Trust") announced today the successful completion of the previously announced Houston acquisition, the completion of the previously announced Texas land acquisition and the closing of certain previously announced dispositions.
The Trust announced today that it has completed the previously announced acquisition of Cedar Port Distribution Centre, (the "Houston Acquisition"), for approximately $85.3 million (US$63.5 million), representing an approximate 6.8% going-in capitalization rate.
As previously announced on February 22, 2017, the Houston Acquisition is an investment in two brand new Class A distribution centres in one of the Trust's target U.S. markets. The distribution centres are 100% leased to IKEA Distribution Services, and will serve as their distribution and e-commerce logistics hub for Texas and surrounding growth markets
The Houston Acquisition was funded with existing cash on hand and the Trust's operating line. Subsequent to the closing, the Trust will enter into a new mortgage secured by the assets in the amount of approximately $42.4 million (US$31.5 million) with a 10-year term and a fixed interest rate of 3.88% per annum.
TEXAS LAND ACQUISITION
The Trust also announced today that it has completed the previously announced acquisition of 16 acres of land adjacent to an existing property in San Antonio, Texas (the "Texas Land Acquisition") for a purchase price of $3.8 million (US$2.8 million). As previously announced on January 30, 2017, the land provides future development potential for the Trust with a forecast yield of approximately 9%. The acquisition closed on March 8, 2017 and was funded with existing cash on hand.
JOINT VENTURE DISPOSITION IN ALBERTA AND ONTARIO
The Trust further announced that is has completed the previously announced partial interest sale in five assets to an existing joint-venture partner for $47.3 million. The purchaser assumed its proportionate interest in the properties' existing mortgages totaling $29.3 million, resulting in net proceeds of $18.0 million to the Trust. The Trust is retaining a 25% interest in the assets, four located in Alberta and one in Ontario, and will continue to manage the assets in accordance with the governing joint venture partnership agreement.
The Trust announced also today that it has disposed of an 101,039 SF asset in Mississauga, Ontario for $7.8 million. The asset was classified as an asset held for sale as at December 31, 2016, and was a single-tenant building with an age of 42 years. Closing occurred on April 1, 2017.
ABOUT PURE INDUSTRIAL REAL ESTATE TRUST
The Trust is an unincorporated, open-ended investment trust that owns and operates a diversified portfolio of income-producing industrial properties in leading markets across Canada and key distribution and logistics markets in the United States. The Trust is an internally managed REIT and is one of the largest publicly-traded REITs in Canada that offers investors exposure to industrial real estate assets in Canada and the United States.
Additional information about the Trust is available at www.piret.ca or www.sedar.com.
The Trust prepares and releases unaudited quarterly and audited consolidated annual financial statements prepared in accordance with IFRS (GAAP). In this release, the Trust discloses and discusses a non-GAAP financial measure, specifically, capitalization rate. The non-GAAP measure is further defined and discussed in the MD&A filed on March 8, 2017 on SEDAR, which should be read in conjunction with this release. Since capitalization rate is not determined by IFRS, such measure may not be comparable to similar measures reported by other issuers. The Trust has presented such non-GAAP measure as management believes the measure is a relevant measure of the ability of the Trust to earn and distribute cash returns to Unitholders and to evaluate the Trust's performance. The non-GAAP measure should not be construed as an alternative to net income (loss) or cash flow from operating activities determined in accordance with GAAP as an indicator of the Trust's performance. Please refer to "Additional IFRS Measures and Non-IFRS Measures" in the Trust's MD&A.
Certain statements contained in this news release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Forward looking statements in this news release include the following: (i) the Texas Land Acquisition provides future development potential for the Trust with forecast yields of approximately 9% and (ii) Subsequent to the closing, the Trust will enter into a new mortgage secured by the Houston Acquisition in the amount of approximately $42.4 million (US$31.5 million) with a 10-year term and a fixed interest rate of 3.88% per annum.
Although the Trust believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Trust can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, competitive factors in the industries in which the Trust operates, prevailing economic conditions, and other factors, many of which are beyond the control of the Trust.
The forward-looking statements contained in this news release represent the Trust's expectations as of the date hereof, and are subject to change after such date. The Trust disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
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