/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
TORONTO, July 29, 2015 /CNW/ - True North Commercial
Real Estate Investment Trust (the "REIT") (TSX: TNT.UN) is
pleased to announce it has closed the acquisition of a portfolio
consisting of four office buildings located in Fredericton, New Brunswick (the "New
Brunswick Office Portfolio") and a non-brokered private
placement of 45,454 trust units of the REIT
("Units") at a price of $6.60
per Unit for aggregate gross proceeds of approximately $300,000 (the "Private Placement").
The New Brunswick Office Portfolio comprises four standalone
office buildings totalling approximately 233,000 rentable square
feet. Three of the four properties share a common parking lot and
are within one kilometre of the REIT's property located at 551 King
Street. Based on gross revenue, government and credit rated tenants
account for 82% of the New Brunswick Office Portfolio.
Following the acquisition and consistent with the REIT's unique
value proposition, occupancy is 98% with an average remaining lease
term of 4.2 years. Government and credit-rated tenants remain a
strategic priority and currently generate approximately 89% of
gross revenue. The REIT's debt to gross book value ratio following
the Acquisition is approximately 59.3%.
The $35 million purchase price for
the New Brunswick Office Portfolio was satisfied by: (i)
approximately $5 million in cash from
the proceeds of the previously announced sale of Coronation Mall;
(ii) the Private Placement to D.D. Acquisitions Partnership, an
entity controlled by Daniel Drimmer,
the REIT's President, Chief Executive Officer and Chairman of the
Board, and an affiliate of Starlight Investments Ltd.
("Starlight"), the asset manager of the REIT; (iii) the
issuance to the vendor of the New Brunswick Office Portfolio of
909,090 class B limited partnership units of True North Commercial
Limited Partnership ("Class B LP Units") at $6.60 per Class B LP Unit representing, in
aggregate, approximately $6.0
million; and (iv) approximately $24.5
million aggregate principal amount of new mortgage financing
with a five-year term and a fixed rate of approximately 2.98%.
As of the date of this news release, Mr. Drimmer (together with
his affiliates) holds an approximate 19.0% effective interest in
the REIT through the ownership of, or direction or control over,
2,978,507 Units, 828,123 Class B LP Units, 828,123 special voting
units of the REIT to provide voting rights with respect to the REIT
to the holders of the Class B LP Units, and 252,084 options to
acquire Units.
About the REIT
The REIT is an unincorporated, open-ended real estate investment
trust established under the laws of the Province of Ontario.
The REIT is focused on acquiring and operating commercial rental
properties across Canada and such
other jurisdictions where opportunities exist. Additional
information concerning the REIT is available at www.sedar.com.
Non-IFRS Financial Measures
The REIT's consolidated financial statements are prepared in
accordance with International Financial Reporting Standards
("IFRS"). Debt to gross book value ratio as well as other
measures discussed elsewhere in this news release, do not have a
standardized definition prescribed by IFRS and are, therefore,
unlikely to be comparable to similar measures presented by other
reporting issuers. The REIT uses non-IFRS measures to better assess
the REIT's underlying performance and financial position and
provides these additional measures so that investors may do the
same. Details on non-IFRS measures are set out in the REIT's
Management's Discussion and Analysis for the period ended
March 31, 2015 and available on the
REIT's profile at www.sedar.com.
Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking information within the meaning of Canadian
securities laws. Forward-looking statements are provided for the
purposes of assisting the reader in understanding the REIT's
financial position and results of operations as at and for the
periods ended on certain dates and to present information about
management's current expectations and plans relating to the future
and readers are cautioned that such statements may not be
appropriate for other purposes. Forward-looking information may
relate to the REIT's future outlook and anticipated events,
including financial or operating results and may include statements
regarding the financial position, business strategy, budgets,
financing rates and costs, taxes and plans and objectives of or
involving the REIT. Particularly, statements regarding future
results, performance, achievements, prospects or opportunities for
the REIT or the real estate industry are forward-looking
statements. In some cases, forward-looking information can be
identified by terms such as "may", "might", "will", "could",
"should", "would", "occur", "expect", "plan", "anticipate",
"believe", "intend", "seek", "aim", "estimate", "target",
"project", "predict", "forecast", "potential", "continue",
"likely", "schedule", or the negative thereof or other similar
expressions concerning matters that are not historical facts.
Forward-looking statements necessarily involve known and unknown
risks and uncertainties, that may be general or specific and which
give rise to the possibility that expectations, forecasts,
predictions, projections or conclusions will not prove to be
accurate, assumptions may not be correct and objectives, strategic
goals and priorities will not be achieved. A variety of factors,
many of which are beyond the REIT's control, affect the operations,
performance and results of the REIT and its business, and could
cause actual results to differ materially from current expectations
of estimated or anticipated events or results. These factors
include, but are not limited to, the risks discussed in the REIT's
materials filed with Canadian securities regulatory authorities
from time to time on www.sedar.com. The reader is cautioned to
consider these and other factors, uncertainties and potential
events carefully and not to put undue reliance on forward-looking
statements as there can be no assurance that actual results will be
consistent with such forward-looking statements.
Information contained in forward-looking statements is based
upon certain material assumptions, including management's
perceptions of historical trends, current conditions and expected
future developments, including considerations that are believed to
be appropriate in the circumstances, such as: the Canadian economy
will remain stable over the next 12 months; inflation will remain
relatively low; interest rates will remain stable; conditions
within the real estate market, including competition for
acquisitions, will be consistent with the current climate; the
Canadian capital markets will continue to provide the REIT with
access to equity and/or debt at reasonable rates when required;
Starlight will continue its involvement as asset manager of the
REIT in accordance with its current asset management agreement; and
the risks identified or referenced above, collectively, will not
have a material impact on the REIT. While management considers
these assumptions to be reasonable based on currently available
information, they may prove to be incorrect.
The forward-looking statements made in this press release are
dated, and relate only to events or information, as of the date of
this press release. Except as specifically required by law, the
REIT undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise, after the date on which the statements
are made or to reflect the occurrence of unanticipated events.
SOURCE True North Commercial Real Estate Investment Trust