WPT Industrial REIT Announces US$96 Million of Acquisitions and Bought Deal Financing

TORONTO, ONTARIO--(Marketwired - June 27, 2017) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

WPT Industrial Real Estate Investment Trust (TSX:WIR.U) (the "REIT") announced today that it has entered into agreements to acquire two distribution properties - one in the Portland, Oregon metropolitan area and one in the Houston, Texas metropolitan area - comprising a total of approximately 903,154 square feet of gross leasable area for an aggregate purchase price of approximately US$96,400,000 (exclusive of closing and transaction costs) representing a blended stabilized capitalization rate of approximately 5.1%.

The Portland and Houston properties are both highly-functional, modern, Class A buildings located in highly-desirable submarkets. On a blended basis, the properties have an occupancy rate of 93.7%, annual rent increases of 2.5%, weighted average remaining lease term of 7.4 years, average building clear height of 31.3 feet and an average building age of 3.5 years.

The REIT continues to proceed with its due diligence investigation of both properties. Assuming satisfaction of all closing conditions including the waiver of diligence conditions, it is expected that the acquisition of the Portland property will be completed on or about the first week of July 2017, while the acquisition of the Houston property is expected to be completed on or about the first week of August 2017.

Both properties are being acquired free and clear of existing debt financing. The purchase price for the Portland property will be initially satisfied using a draw down from the REIT's revolving credit facility. The purchase price for the Houston property is expected to be satisfied using a combination of proceeds from the equity offering described more fully below and a draw down from the REIT's revolving credit facility. The REIT anticipates refinancing such draw downs on the revolving credit facility with permanent financing at a future date.

Scott Frederiksen, Chief Executive Officer of the REIT, commented, "These contemplated acquisitions reflect our commitment to continued growth and diversification of the REIT. Upon closing, these acquisitions represent a strategic expansion into two new target markets and demonstrate the REIT's ability to source attractive opportunities in today's market."

The REIT also announced today that the REIT and Welsh Property Trust, LLC ("Welsh") have entered into an agreement to sell to a syndicate of underwriters co-led by Desjardins Capital Markets, CIBC Capital Markets and RBC Capital Markets, with Desjardins Capital Markets and CIBC Capital Markets acting as bookrunners, on a bought deal basis, 8,955,000 units of the REIT at a price of US$12.85 per unit (the "Offering Price") for gross proceeds of approximately US$115,000,000 (the "Offering").

The Offering consists of a treasury offering (the "Treasury Offering") of 5,840,000 units by the REIT for gross proceeds of approximately US$75,000,000 and a secondary offering (the "Secondary Offering") of 3,115,000 units by Welsh for gross proceeds of approximately US$40,000,000. In addition, the REIT has granted the underwriters an option (the "Over-Allotment Option") on the Offering, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 895,500 units of the REIT from Treasury at the Offering Price to cover over-allotments, if any. The Offering is expected to close on or about July 18, 2017.

The net proceeds from the Treasury Offering will be used to repay existing outstanding indebtedness under the REIT's revolving credit facility (currently US$23 million drawn but expected to be drawn down further to complete acquisition of the Portland property), which can then be re-borrowed and used by the REIT to complete acquisition of the Houston property, as well as for potential additional future acquisitions, development, working capital and general trust purposes. The REIT will not receive any proceeds from the Secondary Offering.

Welsh is the former external manager of the REIT and currently holds, directly or indirectly, 4,112 units and 6,722,695 Class B Units for a total of 6,726,807 units (assuming all Class B Units are redeemed for units of the REIT) representing an approximate 16.3% effective equity interest in the REIT (assuming all Class B Units are redeemed for units of the REIT, but otherwise on a non-diluted basis). Welsh's effective equity interest in the REIT is subject to a loan secured by those units held by Welsh. The net proceeds from the sale of units pursuant to the Secondary Offering will be used to repay in full the outstanding loan. Upon completion of the Secondary Offering, while Welsh's effective equity interest in the REIT will be reduced to approximately 7.6%, Welsh's net effective investment in the REIT will be unchanged and will no longer be subject to any financing or associated collateral pledge of units. In addition, Welsh has agreed that, for a period of 120 days following the closing of the Offering, it will not, directly or indirectly, offer, sell, contract to sell, secure, pledge, grant any option right or warrant to purchase or otherwise lend, transfer or dispose of any REIT units (or securities convertible into or exerciseable, exchangeable or redeemable for REIT units).

The units forming part of the Offering will be offered in Canada pursuant to a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, pursuant to National Instrument 44-101 - Short Form Prospectus Distributions.

The Offering is subject to certain conditions, including, but not limited to, receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Units have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

About WPT Industrial Real Estate Investment Trust

WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 15.6 million square feet of gross leasable area, comprised of 47 industrial properties and two office properties located in 12 states within the United States.

Forward-Looking Statements

This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words" plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify forward-looking statements. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the closing of the Offering and the expected closing date thereof; the REIT's intended use of proceeds of the Treasury Offering; the sources of funding of the Portland and Houston property acquisitions; the completion of the acquisitions of the Portland and Houston properties and the expected timing thereof; the REIT's pursuit of acquisition, development and investment opportunities. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT's and each property's future growth potential, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, continued positive net absorption and declining vacancy rates in the markets in which the REIT's properties are located, and, with respect to the Portland and Houston properties, reasonable assumptions concerning future tenancy, market rent rates, tenant improvements, leasing commissions, downtime, and costs of materials.

When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, including that there can be no assurance that the Portland and Houston property acquisitions will be completed and if completed on the described terms, and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the REIT's annual information form for the year ended December 31, 2016, which is available under the REIT's profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.