TORONTO and MONTREAL, June 16, 2021 (GLOBE NEWSWIRE) — Nexus Real Estate Investment Trust (the “REIT”) (TSX: NXR.UN) announced today an acquisition update, the June distribution, and the expected sale of a retail property located in Beamsville, Ontario.
Industrial Acquisitions Completed to Date in 2021
- March 1, 2021: acquired two industrial buildings in Edmonton, Alberta with 108,156 square feet of gross leasable area (GLA) for $14MM. The buildings are fully leased to non-oil and gas tenants. The REIT issued $7.0MM in Class B LP units to the vendor at a price of $8.20 per unit. The purchase price represented an approximately 8% going in capitalization rate.
- April 1, 2021: completed the $103.5MM acquisition of six industrial properties in London, Ontario with 1,191,184 square feet of GLA, representing a 6% going-in capitalization rate. The REIT issued approximately $65.6 million in Class B LP units to the vendor at a price of $7.64 per unit, which approximates the trading price of the REIT’s units at the time of entering into the conditional agreement.
- June 10, 2021: acquired a 153,052 square foot single-tenant industrial property located at 6777 Edgar Industrial Drive, Red Deer, Alberta for a purchase price of $16.3MM. FCA Canada Inc. (formerly Chrysler Canada) is the tenant, and this is their only western Canada distribution center.
- June 11, 2021: acquired a newly constructed 130,500 square foot single-tenant industrial property located at 70 Dennis Road, St. Thomas, Ontario for a purchase price of $13.8MM. Element5 Limited Partnership is the tenant.
- June 14, 2021: acquired a 120,000 square foot, approximately 2-year old single-tenant industrial property located at 446 Jutras Drive South, Lakeshore (Windsor), Ontario for a purchase price of $14.7MM. Can Art Aluminum Extrusion LP is the tenant.
- The weighted average capitalization rate for the three most recently acquired properties is 6.7%.
Industrial Properties Under Agreements of Purchase and Sale
The REIT has a total of 5 industrial properties totalling approximately 0.9MM square feet currently under contract with 4 vendors for an aggregate purchase price of approximately $120MM, including a previously unannounced property in Edmonton, Alberta under contract for a purchase price of $19.7MM. Details of the purchase and sale agreements are as follows:
- A 391,074 square foot property located at 1040 Wilton Grove Road and 961 Pond Mills Road in London, Ontario under contract for $44.1MM, representing a going-in capitalization rate of approximately 5.9%. The purchase price is expected to be satisfied through the issuance of 3,303,275 Class B LP Units of a subsidiary limited partnership of the REIT valued at $8.6278 per unit (the volume weighted average trading price of the REIT’s units for the 5 days prior to the April 26, 2021 purchase and sale agreement execution date), and through the assumption of approximately $15.6MM of mortgage financing with a maturity date of June 28, 2028 and bearing interest at 4.26% per year. The acquisition is condition on the REIT completing due diligence to its satisfaction and TSX and unitholder approval for the issuance of the Class B LP Units.
- 4 industrial properties under three separate purchase and sale agreements totalling approximately 0.5MM square feet under contract for an aggregate purchase price of $75.75MM, representing a weighted average going-in capitalization rate of 6.7%. Two of the properties are located in Edmonton, Alberta, one in Calgary, Alberta, and one in Winnipeg, Manitoba. The REIT has waived conditions to acquire these properties, and the purchases are expected to close in early and mid-July. The aggregate purchase price is expected to be satisfied through proceeds of new mortgage financing, cash on hand and funds available under credit facilities, and through the issuance of $15.4MM of Class B LP Units of a subsidiary limited partnership of the REIT valued at $8.4526 per unit, being the volume weighted average trading price of the REIT’s units for the 5 days prior to the April 16, 2021 execution date of the related purchase and sale agreement. The release of further details of the transactions is restricted by confidentiality clauses contained within the agreements of purchase and sale.
Expected Sale of a Retail Property in Beamsville, Ontario
The REIT has entered into a firm agreement, supported by a non-refundable deposit, to sell a retail property in Beamsville, Ontario to a third party on market terms, with an expected closing date of August 31, 2021. The release of further details of the transaction is restricted by confidentiality clauses contained within the agreement of purchase and sale.
June 2021 Distribution
The REIT will make a cash distribution in the amount of $0.05333 per unit, representing $0.64 per unit on an annualized basis, payable July 15, 2021 to unitholders of record as of June 30, 2021.
The REIT’s distribution reinvestment plan (“DRIP”) entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 4% of each distribution that was reinvested by them under the DRIP.
About Nexus REIT
Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 85 properties comprising approximately 6.1 million square feet of gross leasable area. The REIT has approximately 33,632,000 Units issued and outstanding. Additionally, there are Class B LP Units of subsidiary limited partnerships of Nexus issued and outstanding, which are convertible into approximately 14,701,000 Units.
Forward Looking Statements
Certain statements contained in this news release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.
While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.
For further information please contact:
Kelly C. Hanczyk, CEO at (416) 906-2379 or
Rob Chiasson, CFO at (416) 613-1262.