Retrocom Real Estate Investment Trust

Retrocom Real Estate Investment Trust

October 18, 2012 16:38 ET

Retrocom REIT Announces $40 Million Bought Deal Financing and Announces Acquisition of $61.4 Million Property Portfolio from Calloway REIT

TORONTO, ONTARIO--(Marketwire - Oct. 18, 2012) -


Retrocom Mid-Market Real Estate Investment Trust (TSX:RMM.UN) (the "REIT" or "Retrocom") today announced that it has entered into an agreement to sell, on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., 7,150,000 units of the REIT ("Units") at a price of $5.60 per Unit for gross proceeds of $40,040,000 (the "Offering"). In addition, Retrocom has granted the syndicate an over-allotment option, exercisable for a period of 30 days following closing, to purchase up to an additional 1,072,500 Units which, if exercised, would increase the gross offering size to $46,046,000.

The net proceeds from the Offering are expected to be used to partially fund the acquisition of three investment properties from Calloway REIT, to fund development and re-development activities and for general trust purposes.

The offering is expected to close on or about November 9, 2012. Closing of the offering is subject to certain customary conditions, including the receipt of all necessary regulatory approvals.

Portfolio Acquisition

Retrocom has entered into a purchase agreement with Calloway REIT to acquire three investment properties for a total purchase price of approximately $61.4 million (inclusive of transaction costs) (the "Acquisition"). The properties are located in Toronto, Burlington and Renfrew, Ontario, totaling 250,000 square feet and are fully leased.

"The portfolio we are acquiring are a high quality addition to our portfolio." said Richard Michaeloff, Chief Executive Officer. "The properties will provide stable cash flows and grows our portfolio by 10%. Each property is located in a retail node close to residential communities and is shadow anchored by a well-known national retailer".

Property Location Rentable Area Square Feet Leased Major Tenants
Toronto, On 95,297 100% Staples, Royal Bank
Burlington, On 134,225 100% Future Shop, Staples
Renfrew, On 17,471 100% LCBO, Marks Warehouse
Total Portfolio 246,993 100%

Retrocom intends to fund part of the purchase price by placing conventional first mortgages on the three properties which will be unencumbered upon closing.

The acquisition is expected to close in November, 2012 and is subject to the satisfaction of customary closing conditions.

This press release is not an offer of securities for sale in the United States. The units being offered have not been and will not be registered under the U.S. Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of U.S. securities laws.

About Retrocom REIT

Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term unitholder value.

Forward-Looking Information

This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT regarding, among other things, the use of the net proceeds from the Offering, the closing of the Offering, and the closing of the Acquisition. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom Mid-Market REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.

Contact Information