â The REIT also announces the funding of a $2.0 million dealership facility expansion at its Frost Chevrolet Buick GMC Cadillac dealership property â
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TORONTO, June 11, 2018 /CNW/ – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the “REIT”) today announced that it has entered into an agreement to purchase the Country Hills Volkswagen dealership property in Calgary, Alberta (the “Property”) for a purchase price of approximately $18.0 million. The addition of the Property is expected to be accretive to the REIT’s Adjusted Funds from Operations (“AFFO”)¹ on a per unit basis.
The Property includes a newly-built 34,646 square-foot, full-service Volkswagen dealership facility operated by a Dilawri Group (“Dilawri”) company. The Property is located on approximately 4.7 acres at 11380 Stonehill Drive NE, just north of the Calgary International Airport, with convenient access from the Deerfoot Trail Highway and in close proximity to substantial commercial development. Upon closing of the acquisition, Country Hills Volkswagen will be the operating tenant and will enter into an 18-year, triple-net lease with the REIT. The lease includes a contractual 1.5% annual rent increase after year one and is indemnified by a Dilawri company.
As part of the purchase consideration, the REIT will issue 480,522 trust units of the REIT(“Units”) to Dilawri valued at approximately $5.0 million, based on a price of $10.4047 per Unit, which represents the volume-weighted average closing price of Units for the 20 trading days ended May 2, 2018. The REIT intends to satisfy the remaining $13.0 million of the purchase price from cash on hand and through draws on its credit facilities. The REIT’s independent trustees unanimously approved the acquisition and issuance of Units. The REIT has completed its diligence in connection with this acquisition, which included receipt of an arm’s length appraisal supporting, among other things, the purchase price. Closing is expected to occur later this month, subject to customary closing conditions.
The REIT funded the recently completed dealership facility expansion at its Frost Chevrolet Buick GMC Cadillac dealership property in Brampton, Ontario. The expansion added 7,706 square-feet of gross leasable area (“GLA”) to the dealership facility’s existing 35,504 square-feet of GLA for a cost of approximately $2.0 million that results in an annual rent increase effective June 1, 2018. Frost Chevrolet Buick GMC Cadillac, the operator of the dealership, has exercised an early lease renewal and extended the duration of the existing lease term to 2033. The REIT paid for the expansion through cash on hand and draws on its revolving credit facility.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. Currently, the REIT’s portfolio consists of 39 income-producing commercial properties, representing approximately 1.4 million square feet of gross leasable area, and one development property in metropolitan markets across Ontario, Saskatchewan, Alberta, British Columbia and QuÃ©bec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events and in some cases can be identified by such terms as “will”, “intends”, “anticipates” and “expected”. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risks and Uncertainties” in the REIT’s management’s discussion and analysis (“MD&A”) most recently filed on SEDAR (www.sedar.com) and in the REIT’s current annual information form which is also available on SEDAR. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks as of the date of this news release.
(1) Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of earnings performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT’s ability to pay distributions from earnings. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT’s MD&A most recently filed on SEDAR for further discussion of this non-IFRS financial measure.
SOURCE Automotive Properties Real Estate Investment Trust
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