PRO Real Estate Investment Trust (TSX: PRV.UN) (“PROREIT” or the “REIT”) is pleased to announce the closing of its previously announced 100% interest acquisition in a mixed-used industrial property in Kanata, Ontario, for $48.5 million before closing costs, representing a going-in capitalization rate of 6.60%. The property adds 279,388 square feet of gross leasable area (“GLA”) to the REIT’s current portfolio.
“PROREIT is pleased to have completed this last of seven recently announced property acquisitions. The Kanata property is a prestigious quality asset that has been institutionally owned and maintained. It increases our industrial exposure as well as our portfolio concentration in the attractive Ottawa market,” said Jim Beckerleg, President and CEO, PROREIT.
“These recent acquisitions reflect our continued growth as a high-quality diversified commercial Canadian REIT and have allowed us to successfully strengthen and broaden our portfolio on an accretive basis. In addition to increasing our industrial exposure, these acquisitions have also enhanced the concentration of our portfolio value within larger urban centres, with approximately one-third of GLA now located in the compelling Greater Montreal and Ottawa regions,” concluded Mr. Beckerleg.
500 Palladium Drive, Ottawa, Ontario
Located in the Kanata neighborhood of Ottawa, a high technology growth node, the property is a state-of-the-art, multi-tenant flex industrial building featuring prestigious office, research and lab facilities. The property has a weighted average lease term of 7.5 years and is 100% occupied by an outstanding group of tenants operating in the fields of material sciences, defense, communications and medical technology. It is favorably located, adjacent to a major retail node offering countless amenities, shops, restaurants, a movie theatre, and the Terry Fox transit terminal.
The Kanata region is currently undergoing major economic growth with numerous new tenants, adding to continued dynamic growth of existing ones. Technology employers in the neighbourhood include Cisco, Ericsson, HP, Lockheed Martin, Microsoft and Apple. Industrial and office vacancies in the area are at multi-year lows.
The $48.5 million purchase price was financed by the proceeds from a new $33.9 million 7-year first mortgage at a rate of 3.51%. The balance of the purchase price was satisfied with cash on hand of $14.6 million from the recent equity financing.
PROREIT now owns 91 income producing commercial properties representing approximately 4.4 million square feet of GLA. PROREIT’s portfolio exposure to the Greater Montreal and Ottawa regions now accounts for 34% by real estate value. Ontario is now PROREIT’s largest provincial market. PROREIT also improved its portfolio balance with industrial and mixed-used exposure now representing 64% of total GLA and 46% of total base rent.
About PRO Real Estate Investment Trust
PROREIT (www.proreit.com) is an unincorporated open-ended real estate investment trust owning a diversified portfolio of 91 commercial properties across Canada representing over 4.4 million square feet of GLA. Established in 2013, PROREIT is mainly focused on strong primary and secondary markets in Quebec, Atlantic Canada and Ontario, with selective exposure in Western Canada.
For more information on PROREIT, please visit the REIT’s website at: https://proreit.com.
This news release contains forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond PROREIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements.
Forward-looking statements contained in this press release include, without limitation, statements pertaining to the impact of PROREIT’s recent acquisitions on its financial performance and the ability of PROREIT to execute its growth strategies. PROREIT's objectives and forward-looking statements are based on certain assumptions, including that (i) PROREIT will receive financing on favorable terms; (ii) the future level of indebtedness of PROREIT and its future growth potential will remain consistent with REIT's current expectations; (iii) there will be no changes to tax laws adversely affecting PROREIT's financing capacity or operations; (iv) the impact of the current economic climate and the current global financial conditions on PROREIT's operations, including its financing capacity and asset value, will remain consistent with PROREIT's current expectations; (v) the performance of PROREIT's investments in Canada will proceed on a basis consistent with PROREIT's current expectations; and (vi) capital markets will provide PROREIT with readily available access to equity and/or debt.
The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this press release are made as of the date of this press release. PROREIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law.
Additional information about these assumptions and risks and uncertainties is contained under "Risk Factors" in PROREIT's latest annual information form, which is available on SEDAR at www.sedar.com.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
PRO Real Estate Investment Trust
James W. Beckerleg
President and Chief Executive Officer
PRO Real Estate Investment Trust
Gordon G. Lawlor, CPA, CA
Executive Vice President and Chief Financial Officer