TORONTO, Oct. 8, 2020 /CNW/ – Summit Industrial Income REIT (“Summit” or the “REIT”) (TSX: SMU.UN) announced today that it has waived all conditions and will acquire the remaining 50% ownership interest in a portfolio of eleven light industrial properties from its joint venture partner the Groupe Montoni (“Montoni”). The purchase price of $88.0 million for the remaining 50% interest will be financed by the assumption of approximately $31.8 million of mortgage debt bearing an average interest rate of 3.38% and with an average term to maturity of 4.6 years, and cash from the REIT’s unsecured revolving credit facility. The purchase price represents a going-in capitalization rate of approximately 5.0%.
In a related agreement with Montoni, Summit will sell its 50% interest in a 22,023 square foot Montreal office building for cash proceeds of approximately $5.8 million.
Closing of both transactions is expected on October 9, 2020.
On completion of this acquisition, Summit will own 100% of the eleven-property light industrial portfolio totaling approximately 1 million square feet of gross leasable area, increasing Summit’s presence in the attractive Montreal market. Approximately 40% of this modern, high-quality portfolio consists of new Class A LEED-certified buildings. In addition, the portfolio generates 1.8% average annual contractual rental rate growth, with a weighted average lease term for the portfolio of approximately 8.7 years. The REIT will assume all property management functions for the portfolio, providing the REIT with further economies of scale and operating synergies in the Montreal market. Summit now internally property manages 100% of its portfolio.
“We are pleased to be able to acquire full ownership of this exceptionally high-quality portfolio, increasing the REIT’s concentration in Montreal,” commented Paul Dykeman, Chief Executive Officer. “Rent collections in our overall Montreal portfolio have remained strong and stable throughout the pandemic, with solid same property net operating income growth. We look for our expanding Montreal portfolio to continue to generate stable and growing returns for Unitholders going forward.”
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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