Summit Industrial Income REIT Announces Acquisition and $25.0 Million Equity Financing

TORONTO, ONTARIO--(Marketwired - May 15, 2014) -

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Summit Industrial Income REIT (TSX:SMU.UN) ("Summit" or the "REIT") announced today that it has entered into an agreement to acquire a portfolio of three light industrial single tenant properties (the "Acquisitions" or the "Acquisition Properties") in the GTA. The Acquisition Properties, located in key GTA industrial sub-markets, comprise approximately 260,000 square feet of gross leaseable area and will be acquired for approximately $18.2 million, representing a going-in capitalization rate of approximately 7.45%. The REIT anticipates that the Acquisition Properties will be satisfied in part by a new 7-year mortgage of approximately $12 million with an interest rate calculated by reference to the Government of Canada Bonds yield, plus 1.75%, which today would be an all-in rate of 3.75%. The price to be paid for the Acquisition Properties equates to approximately $70 per square foot - which is well below replacement cost. The Acquisition Properties are being acquired as part of a sale-leaseback transaction with a major North American packaging supplier that will enter into an agreement to lease the Acquisition Properties for a period of 10-years upon the closing of the transaction, which is expected to occur on or before May 30, 2014. The lease agreement for the Acquisition Properties is expected to include a combination of annual and bi-annual rent escalations.

Acquisition Highlights

• Summit continues to execute its strategic growth initiative by acquiring high quality industrial properties with long-term leases.
• The Acquisition Properties are located in key GTA industrial sub-markets and nearby to existing properties providing economies of scale for the REIT.
• The Acquisition Properties will be fully leased to a major North American packaging supplier for a period of 10-years upon closing of the transaction.
• The Acquisitions are expected to be immediately accretive to the REIT's Adjusted Funds From Operations per unit.

"We are pleased to be making our first acquisition of 2014, properties that will make a solid and accretive contribution to our cash flows and further strengthen our Greater Toronto Area portfolio," commented Paul Dykeman, Chief Executive Officer. "With the completion of this transaction, our overall portfolio will consist of 33 light industrial properties totaling approximately 3.6 million square feet of gross leaseable area. We look for further portfolio growth through the balance of the year."

Equity Financing

Summit also announced today that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets (collectively, the "Underwriters"), to sell on a bought deal basis, 4,320,000 Units at a price of $5.80 per Unit for gross proceeds to Summit of $25,056,000 (the "Offering"). Summit has also granted the Underwriters an over-allotment option to purchase up to an additional 648,000 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering. The Offering is expected to close on or about June 5, 2014 and is subject to customary conditions, including regulatory approval and the approval of the Toronto Stock Exchange. The Offering is not conditional upon closing of the Acquisitions.

The REIT intends to use the net proceeds from the Offering primarily for the funding of a portion of the purchase price in respect of the Acquisition Properties, for repayment of debt, for the funding of future acquisitions and for general trust purposes. In the event the REIT is unable to consummate the Acquisitions and the Offering is completed, the REIT would use the net proceeds of the Offering for the repayment of debt and/or to fund future acquisitions and for general trust purposes.

The Units will be offered by way of a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada.

The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.

About Summit Industrial Income REIT

Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit II's units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at www.summitIIreit.com.

Caution Regarding Forward Looking Information

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this news release contains forward looking statements and information concerning the closing of the Offering and the use of proceeds. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit including general economic and market conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required approvals in respect of the Offering. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.