- CT REIT to acquire a 1.4 million square foot facility and 81 acres of trailer parking from Canadian Tire Corporation at a total investment of $325 million
- CT REIT to host a conference call on Friday, February 19 at 8:00 a.m. ET to discuss details of the transaction
TORONTO, Feb. 18, 2016 /CNW/ – CT Real Estate Investment Trust (“CT REIT”) (TSX: CRT.UN) announced today that it has reached an agreement with Canadian Tire Corporation, Limited (“CTC”) for the sale and leaseback of the Canadian Tire Distribution Centre (“DC”), nearing completion in Bolton, Ontario. The transaction is subject to standard closing conditions and is expected to close in June 2016.
“We are delighted to be adding this high quality, state of the art facility to our portfolio,” said Ken Silver, Chief Executive Officer, CT REIT. “The Bolton DC reflects CTC’s ongoing commitment to growth and productivity improvement and underscores the competitive advantage that the REIT’s relationship with CTC provides.”
The new Bolton DC is a replacement of a facility CTC currently operates on 90 acres of land at the intersection of Steeles Avenue East and Bramalea Road in Brampton, Ontario. CT REIT, on behalf of CTC, has initiated the municipal approval process for the redevelopment of this property.
Financing
CT REIT proposes to use any combination of Class B limited partnership (LP) units, Class C LP units, cash on hand, draws on its credit facility and/or proceeds of other new debt or equity financings to fund the transaction. Series 2 of the Class C LP Units of CT REIT are set to be redeemed/rate reset on June 1, 2016. Both CT REIT and CTC have recently agreed that the redemption will be funded by the issuance to CTC of $200 million of Class B LP units, subject to TSX approval.
Leaseback
The lease term is 20 years with a going in cap rate of 5.23% and has 1.25% annual rent escalations built in for both the building and trailer parking rent. The lease terms were negotiated with CTC based on market terms and reflect the site and building premiums in the CTC specifications. The lease rates will be finalized on closing to reflect CT REIT’s cost of capital achieved in the second quarter, 2016. Rent will become payable beginning January 1, 2017.
Conference Call
A conference call on the announcement will be held on Friday, February 19 at 8:00 a.m. ET.
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CALL DETAILS: |
416-340-2216 or 1-866-223-7781 |
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The conference call will be webcast live in its entirety at 8:00 a.m. ET at http://www.ctreit.com/en/media-centre/events-webcasts and will be archived for 12 months |
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A conference call replay will be available at 905-694-9451 or 1-800-408-3053 |
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Passcode: 1142719 (available until March 19, 2016) |
Forward Looking Statements
This document contains forward-looking information that reflects management’s current expectations related to the acquisition of the Bolton, Ontario Distribution Centre from Canadian Tire Corporation, Limited (CTC) and leaseback. Forward-looking statements are provided for the purposes of providing information about CT REIT’s future outlook and anticipated events or results. Readers are cautioned that such information may not be appropriate for other purposes.
All statements other than statements of historical facts included in this document may constitute forwardâlooking information, including but not limited to, statements concerning the REIT’s ability to complete the acquisition and leaseback transaction and the funding thereof, including the timing, terms and impact of such transactions on the REIT’s business and financial results, and other statements concerning management’s expectations relating to the possible or assumed future benefits and results, or assumptions in respect thereof. Forward-looking information is based on reasonable assumptions, estimates, analyses, beliefs and opinions of management made in light of its experience and perception of prospects and opportunities, current conditions and expected trends, as well as other factors that management believes to be relevant and reasonable at the date such information is provided.
By its very nature forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the REIT’s assumptions, estimates, analyses, beliefs and opinions may not be correct and that the REIT’s expectations and plans will not be achieved. Although the forward looking information contained in this press release is based on information, assumptions and beliefs which are reasonable and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking information for a variety of reasons. Some of the factors – many of which are beyond our control and the effects of which can be difficult to predict – include, but are not limited to, changes in economic and market conditions and other risks and uncertainties discussed in the REIT’s materials filed with the Canadian securities regulatory authorities from time to time, including the “Risk Factors” section of our Annual Information Form for fiscal 2015 and our 2015 Management’s Discussion and Analysis, as well as the Company’s other public filings, available at www.sedar.com and at www.ctreit.com.
Investors and other readers are urged to consider the foregoing risks, uncertainties, factors and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof. The REIT does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, unless required by applicable securities laws.
About CT Real Estate Investment Trust
CT Real Estate Investment Trust (TSX:CRT.UN) is an unincorporated, closed end real estate investment trust formed to own income producing commercial properties primarily located in Canada. Its portfolio is comprised of 290 properties totaling over 21.5 million square feet of GLA, consisting primarily of retail properties located across Canada. Canadian Tire Corporation, Limited is CT REIT’s most significant tenant. For more information, visit ctreit.com.
SOURCE CT Real Estate Investment Trust (CT REIT)
