TORONTO, May 10, 2018 /CNW/ - Granite Real Estate
Investment Trust ("Granite") (TSX: GRT.UN) (NYSE: GRP.U)
announced today that it has agreed to acquire a portfolio of four
Class A, single tenanted buildings totaling approximately 3.8
million square feet on 78 acres of land near Columbus, Ohio (the "Acquisition") at a
purchase price of US$232.5 million,
representing an in-going stabilized yield of approximately 6.0%.
The properties are located in West
Jefferson which is approximately 20 miles west of
Columbus. Key highlights of the
Acquisition include:
- Located in the greater Columbus industrial market, which has emerged
as a major distribution corridor in the
United States due to its central location, excellent
interstate highway system and strong labour base;
- A diverse tenant base comprised of large public and global
private entities;
- The buildings are modern e-commerce distribution facilities
with an average age of approximately 7 years;
- Tenants in two of the buildings have expansion options of
at least 200,000 square feet;
- The buildings are single tenanted and are currently 100%
occupied; and
- While one of the tenants is currently in liquidation and may
vacate the building 743,600 square foot building, Granite believes
the re-leasing prospects for this building are strong.
The Acquisition is subject to customary closing conditions and
closing is anticipated to take place later in May 2018. Granite expects to fund the purchase
through a combination of cash on hand, largely from the proceeds of
the dispositions that occurred in January 2018, and a drawdown of its unsecured
credit facility.
Summary of property details:
|
|
|
|
Address
|
GLA
|
Lease
Term
|
Tenant
Industry
|
15 Commerce
Parkway
|
1,305,000
|
4.0
|
Pet Food
Distribution
|
10 Enterprise
Parkway
|
534,040
|
6.4
|
Hardware
Distribution
|
100 Enterprise
Parkway
|
1,223,780
|
10.4
|
Home Furnishing
Distribution
|
115 Enterprise
Parkway
|
743,600
|
7.3
|
Consumer Retail
Distribution
|
|
|
WALT
(1)
|
|
Total
|
3,806,420
|
7.0
|
|
|
(1) Weighted
average lease term (WALT) includes the lease term of the tenant in
liquidation
|
Michael Forsayeth, Granite's CEO,
commented that "This acquisition will be immediately accretive to
funds from operations and adjusted funds from operations and is
another strategic milestone in Granite's transformation from a
largely single tenanted REIT to a broadly tenanted, globally
diversified industrial real estate business. As a result of this
acquisition and initiatives announced earlier in the year,
significant progress has been made towards Granite's strategic
priorities including a reduction in Magna concentration from 61% at
the beginning of the year to 52% as measured by gross leasable
area. Also, on a run rate basis, Granite will have made substantial
progress towards replacing the cash flow from the 10 properties
sold earlier in the year."
ABOUT GRANITE
Granite is a Canadian-based REIT engaged in the acquisition,
development, ownership and management of predominantly industrial,
warehouse and logistics properties in North America and Europe. Granite owns over 85 rental income
properties representing approximately 30 million square feet of
leasable area. Through the thoughtful deployment of its balance
sheet and selective dispositions, Granite is continuing to build a
high quality, globally diversified industrial real estate
business.
OTHER INFORMATION
Copies of financial data and other publicly filed documents
about Granite are available through the internet on the Canadian
Securities Administrators' Systems for Electronic Document Analysis
and Retrieval (SEDAR) which can be accessed at www.sedar.com and on
the United States Securities and Exchange Commission's Electronic
Data Gathering, Analysis and Retrieval System (EDGAR) which can be
accessed at www.sec.gov. For further information, please see our
website at www.granitereit.com or contact Michael Forsayeth, Chief Executive Officer, at
647-925-7600 or Ilias
Konstantopoulos, Chief Financial Officer, at
647-925-7540.
FORWARD-LOOKING STATEMENTS
This press release may contain statements that, to the extent
they are not recitations of historical fact, constitute
"forward-looking statements" or "forward-looking information"
within the meaning of applicable securities legislation, including
the United States Securities Act of 1933, as amended, the
United States Securities Exchange Act of 1934, as amended,
and applicable Canadian securities legislation. Forward-looking
statements and forward-looking information may include, among
others, statements regarding the intention of Granite and the
vendors to complete the Acquisition on the terms and conditions
described herein, the date on which closing of the Acquisition is
expected to occur, the impact of the Acquisition on Granite's funds
from operations, adjusted funds from operations and cash flow,
the potential vacating by one of the tenants
and Granite's ability to re-lease the property on satisfactory
terms or at all and Granite's plans, goals, strategies, intentions,
beliefs, estimates, costs, objectives, economic performance,
expectations, or foresight or the assumptions underlying any of the
foregoing. Words such as "may", "would", "could", "will", "likely",
"expect", "anticipate", "believe", "intend", "plan", "forecast",
"project", "estimate", "seek", "objective" and similar expressions
are used to identify forward-looking statements and forward-looking
information. Forward-looking statements and forward-looking
information should not be read as guarantees of future events,
performance or results and will not necessarily be accurate
indications of whether or the times at or by which such events,
performance or results will be achieved. Undue reliance
should not be placed on such statements. Forward-looking statements
and forward-looking information are based on information available
at the time and/or management's good faith assumptions and analyses
made in light of its perception of historical trends, current
conditions and expected future developments, as well as other
factors management believes are appropriate in the circumstances,
and are subject to known and unknown risks, uncertainties and other
unpredictable factors, many of which are beyond Granite's control,
that could cause actual events or results to differ materially from
such forward-looking statements and forward-looking information.
Important factors that could cause such differences include, but
are not limited to, the risks set forth in the annual information
form of Granite REIT and Granite GP dated March 1, 2018 (the "Annual Information Form").
The "Risk Factors" section of the Annual Information Form also
contains information about the material factors or assumptions
underlying such forward-looking statements and forward-looking
information. Forward-looking statements and forward-looking
information speak only as of the date the statements and
information were made and unless otherwise required by applicable
securities laws, Granite expressly disclaims any intention and
undertakes no obligation to update or revise any forward-looking
statements or forward-looking information contained in this press
release to reflect subsequent information, events or circumstances
or otherwise.
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SOURCE Granite Real Estate Investment Trust