Au­to­mo­tive Prop­er­ties to buy 11 prop­er­ties for $101.3M

Stockwatch Daily - - FINANCE - Mr. Mil­ton Lamb re­ports

AU­TO­MO­TIVE PROP­ER­TIES Real Es­tate In­vest­ment Trust has en­tered into an agree­ment to ac­quire a port­fo­lio of 11 prop­er­ties from a pri­vately held au­to­mo­tive deal­er­ship group, sub­ject to a lease­back, for a com­bined pur­chase price of ap­prox­i­mately $101.3-mil­lion. The port­fo­lio in­cludes six prop­er­ties that are ex­clu­sively oc­cu­pied by nine au­to­mo­tive deal­er­ships and five prop­er­ties des­ig­nated for an­cil­lary deal­er­ship ser­vices, rep­re­sent­ing a to­tal gross leasable area (GLA) of ap­prox­i­mately 303,817 square feet lo­cated on ap­prox­i­mately 29.7 acres. Upon closing of the ac­qui­si­tion, the REIT’s GLA will in­crease by ap­prox­i­mately 18 per cent and the port­fo­lio will con­sist of 54 in­come-pro­duc­ing prop­er­ties. Nine of the prop­er­ties are lo­cated in the Ot­tawa, Ont., metropoli­tan area and two prop­er­ties are lo­cated in Kingston, Ont. Ot­tawa and Kingston rep­re­sent two new metropoli­tan mar­kets for the REIT.

“This is our largest prop­erty ac­qui­si­tion to date and we look for­ward to adding a ma­jor new ten­ant group to our port­fo­lio,” said Mil­ton Lamb, pres­i­dent and chief ex­ec­u­tive of­fi­cer of the REIT. “The ac­qui­si­tion marks our en­try into the Ot­tawa mar­ket, ef­fec­tively po­si­tion­ing us in an­other ma­jor Cana­dian metropoli­tan area. In ad­di­tion to en­hanc­ing the REIT’s geo­graphic and ten­ant diver­si­fi­ca­tion, we are adding rep­re­sen­ta­tion of two more ma­jor au­to­mo­tive brands to our port­fo­lio — Subaru and Lexus — bring­ing the to­tal num­ber of brands rep­re­sented in our prop­erty port­fo­lio to 31.”

Upon closing of the ac­qui­si­tion, the re­spec­tive op­er­a­tors of each of the au­to­mo­tive deal­er­ships and the re­lated non-re­tail deal­er­ship prop­er­ties will en­ter into long-term, triple net leases with the REIT with terms rang­ing from 17 to 20 years. The leases in­clude con­trac­tual 1.0-per-cent an­nual rent in­creases for the first five years of the lease terms. There­after, the an­nual rents will in­crease in ac­cor­dance with the On­tario Con­sumer Price In­dex. The leases will be in­dem­ni­fied by MAG Hold­ings LP (op­er­at­ing as Mierins Au­to­mo­tive Group) a pri­vate en­tity that owns and op­er­ates 10 deal­er­ships.

(See APR.UN Ta­ble 1 on page 25)

The REIT will fi­nance the ac­qui­si­tion pur­chase price through draws on its credit fa­cil­i­ties. In con­junc­tion with the ac­qui­si­tion, two of the REIT’s se­nior lenders have agreed to in­crease the amount avail­able un­der the REIT’s credit fa­cil­i­ties by $110.0-mil­lion, se­cured by prop­er­ties in­cluded in the ac­qui­si­tion and two other pre­vi­ously unen­cum­bered prop­er­ties. The REIT has com­pleted its due dili­gence in con­nec­tion with the ac­qui­si­tion and ex­pects to close the ac­qui­si­tion in De­cem­ber, 2018, sub­ject to cus­tom­ary closing con­di­tions and ap­proval by the Com­pe­ti­tion Bureau.

About Au­to­mo­tive Prop­er­ties Real Es­tate In­vest­ment Trust Au­to­mo­tive Prop­er­ties REIT is an un­in­cor­po­rated, open-ended real es­tate in­vest­ment trust fo­cused on own­ing and ac­quir­ing pri­mar­ily in­come-pro­duc­ing au­to­mo­tive deal­er­ship prop­er­ties lo­cated in Canada. The REIT’s port­fo­lio cur­rently con­sists of 42 in­come-pro­duc­ing com­mer­cial prop­er­ties, rep­re­sent­ing ap­prox­i­mately 1.7 mil­lion square feet of gross leasable area, and one de­vel­op­ment prop­erty, in metropoli­tan mar­kets across On­tario, Saskatchewan, Al­berta, Bri­tish Columbia and Que­bec. Au­to­mo­tive Prop­er­ties REIT is the only pub­lic ve­hi­cle in Canada fo­cused on con­sol­i­dat­ing au­to­mo­tive deal­er­ship real es­tate prop­er­ties.

We seek Safe Har­bor.

Kapil Di­lawri, Louis Marie Forbes, Stu­art Lazier, James Whit­ney Matthews, John Ren­nie Mor­ri­son

(APR) Shares: 21,796,552

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.