TORONTO, ONTARIO--(Marketwire - March 8, 2012) - Canadian Real Estate Investment Trust (CREIT) (TSX:REF-UN.TO - News) announced it has acquired a 50% managing interest in Altius Centre located in Calgary, Alberta (the Property).
The Property was acquired in a co-ownership with Kingsett Capital on behalf of its Canadian Real Estate Income Fund. CREIT is responsible for providing full property management, leasing, accounting and project management services.
Altius Centre is comprised of approximately 310,000 square feet of leasable area in a thirty-two (32) storey building located in the Central Business District of downtown Calgary. The Property is directly connected to Calgary's Plus 15 pedestrian walkway system which is linked to all major office buildings in Calgary's business core.
Altius Centre is currently 92% leased to 24 tenants with a weighted average remaining lease term of 5 years. The available space in the Property represents an opportunity in the tight Calgary office market where demand for space is strong and rental rates are rising.
Downtown Calgary's robust office market has experienced nine (9) consecutive quarters of positive absorption as vacancy in Class A office space continues to diminish.
Altius Centre benefits from one of the highest parking ratios in downtown Calgary with 287 stalls located in a below and above grade parkade directly adjacent to the building. The Property's large parkade represents a unique opportunity to provide a significant parking amenity which is in high demand in downtown Calgary.
The purchase price of $89.9 million (CREIT's share) was partially settled with the placement of new mortgage financing on the Property totalling $55.0 million (CREIT's share) with a weighted average interest rate of 3.98% and a term to maturity of ten (10) years. A payment equal to $2.4 million (CREIT's share) was made on Closing to terminate and discharge an existing loan secured by the Property.
Stephen Johnson, President and Chief Executive Officer of CREIT said "This investment is consistent with our strategy of owning a managing interest in well-located office properties in large Canadian cities. We are delighted to partner with Kingsett on this transaction."
CREIT currently owns (a 50% interest) and manages over one million square feet of Class A office space in Sun Life Plaza, a major property located approximately three blocks east of Altius Centre. This is a logical addition to CREIT's existing portfolio.
CREIT is a real estate investment trust focused on accumulating a portfolio of high-quality real estate assets and delivering the benefits of real estate ownership to Unitholders. The primary benefit is a reliable and, over time, increasing cash distribution.
Cautionary Statements Regarding Forward-looking Statements
This news release contains forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except as required by law.