Allied Properties Real Estate Investment Trust Announces Acquisition of Redevelopment Opportunity in Calgary
June 21 2012 - 1:49PM
Marketwired
Allied Properties REIT (TSX:AP.UN) announced today that it has
entered into an agreement to purchase the following property for
$13.1 million:
Address Total Office Retail Parking
GLA GLA GLA Spaces
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Burns Building, Calgary 78,781 69,483 9,298 -
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"We see this as an attractive redevelopment opportunity for
Allied," said Michael Emory, President & CEO. "It will enable
us to take advantage of the strong demand for Class I office space
that we've experienced since establishing our Calgary
portfolio."
Located on the north side of the Stephen Avenue Mall, just west
of Calgary City Hall, the Burns Building (237-8th Avenue S.E.) is
comprised of 78,781 square feet of GLA, 66% of which is leased. The
largest tenant is scheduled to vacate its premises on August 31 of
this year, at which time the building will be 39% occupied.
Allied is acquiring a leasehold interest in the property. The
land lease will have a term of 92 years. Rent is payable at a fixed
amount per year, escalating every seven years starting in 2019
based on increases in underlying land value.
Built in 1913 as corporate headquarters for Burns Foods, the
building was renovated on several occasions from 1983 onward. The
building is designated by the Province of Alberta as a historic
resource under the Historical Resources Act.
Allied plans to re-lease the property to tenants consistent in
character and quality with its tenant base. Given the strength of
the Calgary office leasing market, Allied expects to complete the
re-leasing within 15 months.
The purchase price for the property represents a relatively low
cost per square foot of GLA. On closing, the property will be free
and clear of mortgage financing. Allied will carry it as a Property
Under Development until it is re-leased. On completion of the
re-leasing, Allied will place first mortgage financing on the
property.
This press release may contain forward-looking statements with
respect to Allied, its operations, strategy, financial performance
and condition. These statements generally can be identified by use
of forward looking words such as "may", "will", "expect",
"estimate", "anticipate", intends", "believe" or "continue" or the
negative thereof or similar variations. The actual results and
performance of Allied discussed herein could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations, including that the transactions
contemplated herein are completed. Important factors that could
cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
competition, changes in government regulations and the factors
described under "Risk Factors" in Allied's Annual Information Form,
which is available at www.sedar.com. These cautionary statements
qualify all forward-looking statements attributable to Allied and
persons acting on Allied's behalf. Unless otherwise stated, all
forward-looking statements speak only as of the date of this press
release and the parties have no obligation to update such
statements.
Allied Properties REIT is a leading owner, manager and developer
of urban office environments that enrich experience and enhance
profitability for business tenants operating in Canada's major
cities. Its objectives are to provide stable and growing cash
distributions to unitholders and to maximize unitholder value
through effective management and accretive portfolio growth.
Contacts: Allied Properties REIT Michael R. Emory President and
Chief Executive Officer (416)
977-0643memory@alliedpropertiesreit.com
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