MONTREAL, April 9, 2015 /CNW Telbec/ – (TSXV: NEL.UN) The Nobel Real Estate Investment Trust (« Nobel REIT ») consolidates its commitment to its growth plan by announcing a new acquisition and an increase of distributions to unitholders.
The REIT will acquire, in the coming weeks, an investment property located at 1600 rue Montgolfier in Laval. The property is an office building comprising 26,934 square feet, strategically located on 108,833 square feet land, at the corner of Highway 13 and Boulevard Saint-Martin. It is a sale-leaseback transaction that will take place with a company related to the main tenant. The purchase price, excluding acquisition costs, is of $5.2 million. The effective capitalization rate of this acquisition is 6.96%. The fully occupied building houses the headquarters of Crescendo Systems Corporation, which occupies 21,031 square feet. Crescendo has signed a new 10-year term lease, effective upon the closing of the transaction. A subsidiary of Shimadzu Canada occupies the rest of the building.
The payment of this acquisition is provided in part by the REIT’s equity and also by a first rank mortgage consented by MCAP Financial Corporation, in the amount of $ 3,380,000 for a 10 year term amortized over a period of 25 years, at a rate which will be confirmed at the time of closing.
The Montreal team of Jones Lang Lasalle, real estate brokers, is acting as an intermediary in the transaction.
Increase in distribution
On December 30, 2013, the REIT announced a low leverage and sustainable distribution policy, according to which it would distribute 25% of the planned adjusted funds from operations (“AFFO”).
Following the publication of financial results for the year ending December 31, 2014, two salient facts emerged. The long term debt ratio of Nobel declined, from 64.3% to 58.8%, thus contributing to an increase in the equity value of Nobel; AFFO significantly increased by approximately $563,000 compared to the previous year.
Considering the recent 2014 acquisitions and its positive impacts on an annualized basis, the Board of Trustees decided to increase, starting April 2015, the distribution to an amount equivalent to 50% of the planned AFFO. The amount payable accordingly on May 15 will be announced in the coming days.
“With the support of unitholders, we are happy to take another step further toward our growth and sustainable distribution policies” stated Jean Teasdale, President and Chief Executive of Nobel.
About Nobel REIT
Nobel REIT is an unincorporated open-ended real estate investment trust governed by the laws of the Province of QuÃ©bec. Nobel REIT has been created for the purpose of acquiring and owning income producing properties. The REIT will focus on acquiring commercial retail, mixed-used retail, and industrial and suburban office properties in the primary and secondary markets in the Province of QuÃ©bec. Nobel REIT currently owns eight properties located in QuÃ©bec, comprising 395,970 square feet of gross leasable area.
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Forward-looking statements contained in this press release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of Nobel REIT to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements.
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SOURCE Nobel Real Estate Investment Trust