TORONTO, July 26, 2018 /CNW/ – Summit Industrial Income REIT (“Summit” or the “REIT”) (TSX: SMU.UN) announced today that it has waived conditions and will acquire 100% of a 369,500 square foot single tenant logistics facility located in Oshawa, Ontario. The building, constructed in 2007, has 28-foot clear celling height, excellent rail and highway transportation links, and extensive truck trailer storage on site. The property is leased to a North American logistics company which recently extended its lease for a five-year term beginning January 8, 2018.
Summit will pay $36.6 million ($99 psf) for the property, well below replacement cost, paid for with exchangeable units of the REIT and the balance in cash from the REIT’s operating facility. The leased building is being acquired with a going-in capitalization rate of approximately 5.6%. Closing of the acquisition is expected on or before August 15, 2018.
In satisfaction of the Purchase Price, on closing of the Transaction, a wholly-owned subsidiary of the REIT expects to issue 1,005,780 exchangeable units (approximately $8.7 million) to the vendor, together with related special voting units of the REIT, subject to customary conditions, including any required approvals of the Toronto Stock Exchange. The exchangeable units will be exchangeable into trust units of the REIT on a one-for-one basis at the option of the holder. The special voting units have the same voting rights as the REIT’s trust units and will entitle the holder of the exchangeable units to such number of votes at meetings of the REIT’s unitholders as is equal to the number of trust units of the REIT such exchangeable units are exchangeable for. The exchangeable units will represent an approximate 1.2% interest in the REIT on an “as exchanged” basis. The number of exchangeable units to be issued to the Vendor was determined using a price of $8.65 per unit for the REIT’s trust units. The unit price of Summit’s most recent offering that closed on June 15, 2018 was $8.65 per unit.
“We continue to build our presence in the Greater Toronto Area, a key target of our growth programs and Canada’s strongest industrial property market,” commented Paul Dykeman, Chief Executive Officer.
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada. Summit’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 goal to build Summit’s property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic 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 financing and approvals. 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.
SOURCE Summit Industrial Income REIT
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