Partners REIT Completes Quebec Acquisition
August 31 2011 - 4:00PM
Marketwired
Partners Real Estate Investment Trust (TSX VENTURE: PAR.UN)
("Partners REIT") announced today that it had completed the
acquisition (the "Acquisition") of Place Desormeaux, a 250,000
square foot enclosed shopping centre in Longueuil, Quebec on the
south shore of the Greater Montreal Region. The property is well
situated in a growing urban market and anchored by high quality
necessity-based retailers including a Super C grocery store,
Pharmaprix, Zellers, Dollarama, the SAAQ, National Bank and Bank of
Montreal. It is currently 98.0% occupied. The centre also offers
the opportunity to enhance income through the expansion of existing
tenants and the development of three new retail pad sites. The
property currently generates rental income, net of property
operating expenses, of approximately $2.4 million on an annualized
basis and management expects it will contribute approximately
$600,000 after interest expense in incremental annualized net
income.
Partners REIT paid approximately $32.2 million for the property
with approximately $3.6 million in additional acquisition and
capital improvement costs to be incurred in the future. The
aggregate outlay of funds was funded by a $23.0 million loan from
OMERS Administration Corporation secured by the property with a
three year term and bearing interest at a rate of 4.05%. The
balance of the purchase price was funded by a 25-month loan
facility from Firm Capital Corporation ("FCC") for $13.5 million
($7.5 million of which is revolving) secured against the Partners
REIT portfolio of properties with a floating interest rate that is
the greater of 9.00% or the TD Canada Trust Posted Bank Prime Rate
of Interest plus 4.00%. In connection with the loan facility,
Partners REIT has agreed to issue 2,500,000 unit purchase warrants
(the "Lender Warrants") to FCC as a funding fee, subject to the TSX
Venture Exchange approval. Each whole warrant would entitle the
holder to acquire one Partners REIT unit at $1.80 per unit (the
"Exercise Price"), subject to adjustment, for a period of 3 years.
The Exercise Price is subject to adjustment if, among other
circumstances, Partners REIT issues units through an investment
bank syndicated offering or through a private placement in excess
of $8,000,000, within 120 days of the date of the advance under the
Loan at an issue price of less than $1.80 per unit (the "Lower
Price"). In such event, the acquisition price on the Lender
Warrants will be reset to the Lower Price for the full term of the
Lender Warrants, provided that such Lower Price is approved by the
TSX Venture Exchange. In addition, if the number of Lender Warrants
is less than 2,500,000, Partners REIT has agreed to issue
additional warrants to the holder for the shortfall amount, nine
months from the initial advance of funds, at an exercise price
equal to the volume weighted average price of Partners REIT's units
for the 5 business days prior to the issuance of the shortfall
units.
The transaction, including the granting of the Lender Warrants
on these terms, is subject to TSX Venture Exchange approval.
"We are very pleased to be adding this high quality shopping
centre to the portfolio and increasing our presence in the Province
of Quebec," commented Adam Gant, Chief Executive Officer.
About Partners REIT
Partners REIT is a growth-oriented real estate investment trust,
which currently owns (directly or indirectly) 19 retail properties
located in British Columbia, Ontario, Manitoba and Quebec,
aggregating approximately 1.5 million square feet of leaseable
space. Partners REIT focuses on expanding and managing a portfolio
of retail and mixed-use community and neighbourhood shopping
centres located in both primary and secondary markets across
Canada.
Forward-looking Statements
Certain statements included in this press release constitute
forward-looking statements, including, but not limited to, those
identified by the expressions "expect," "will", "offers the
opportunity" and similar expressions to the extent they relate to
Partners REIT. The forward-looking statements are not historical
facts but reflect Partners REIT's current expectations regarding
future results or events. These forward looking statements are
subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current
expectations, including TSX Venture Exchange approval of the Lender
Warrants and the transactions contemplated by this press release,
the integration of the Acquisition with our property portfolio, our
expectations regarding an increase in incremental funds as a result
of the Acquisition, our intention to continue to grow and diversify
our portfolio, access to capital, regulatory approvals, intended
acquisitions and general economic and industry conditions. Although
Partners REIT believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and,
accordingly, readers are cautioned not to place undue reliance on
such statements due to the inherent uncertainty therein.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Partners Real Estate Investment Trust Patrick Miniutti
President and Chief Operating Officer (250) 940-5500
www.partnersreit.com
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