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Summit Industrial Income REIT Announces Closing of Acquisition of 37 Property Portfolio for $588 Million and Conversion of Subscription Receipts

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES /

TORONTO , Nov. 1, 2019 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (SMU-UN.TO) is pleased to announce the closing of its previously announced acquisition of an institutional quality portfolio of 37 light industrial properties in Alberta totaling over 3.3 million square feet of quality space (the "Acquisitions") for an aggregate purchase price of approximately $588 million . Of the total, 22 of the properties (1.8 million square feet) are in Edmonton , 14 properties (1.4 million square feet) are in Calgary , and one property is in Grand Prairie. The purchase also includes one parcel of land (which is leased) in Edmonton .

The purchase price was partially satisfied from the proceeds of the sale of 17,836,500  subscription receipts of the REIT (the "Subscription Receipts") at a price of $12.90 per Subscription Receipt for gross proceeds of approximately $230 million , which closed on October 17, 2019 .

The portfolio contains a mix of single tenant and multi-tenant properties. Approximately 67% of the portfolio consists of modern Class A space, significantly enhancing the quality of Summit's overall portfolio, with almost 60% of the total space consisting of logistics buildings. Occupancy currently stands at approximately 91.7%, providing the opportunity to enhance the yield on the acquisition through the lease up of the vacancies. The tenant base consists primarily of transportation, warehouse and light manufacturing firms, with only 17% exposure to the oil and gas industry. Site coverage is approximately 22% of total land being acquired, providing the opportunity for development, re-development and tenant expansions over time.

"This important acquisition significantly increases the size and scale of our total portfolio to 145 properties aggregating 16.9 million square feet with an asset value of approximately $2.5 billion ," commented Paul Dykeman , Chief Executive Officer. "We are also pleased to have quickly and accretively recycled the funds generated from the sale of our non-core data centre properties into our core light industrial business where we have a proven track record of creating value for our Unitholders."

Additional property information regarding the portfolio is set out below:

City

         Area



           Site




SF

%

Avg.
Year Built

Avg. Year Last
Expanded

Acres

Avg. Cov.

Avg.
Occ.

Weighted
Avg. Lease
Term

Edmonton

1,834,691

55.2%

1994

2001

158.7

26%

91%

4.3

Calgary

1,447,690

43.6%

2000

2001

117.8

28%

93%

5.2

Grand Prairie

26,180

0.8%

2006

2006

20.1

3%

100%

12.9

Bldg Subtotal

3,308,561

99.6%

1997

2001

296.6

26%

92%

4.7

Land

12,647

0.4%



52.5

0.5%

100%

11.7

Total

3,321,208

100.0%



349.1

22%

92%

4.8

 

BMO Capital Markets Real Estate Inc. acted as an exclusive advisor on this transaction.

Subscription Receipts

As a result of the completion of the Acquisitions, each of the 17,836,500 outstanding Subscription Receipts will be automatically exchanged for one Unit and a cash distribution equivalent payment of $0.045 (being equal to the aggregate amount of distributions paid by the REIT per Unit for which record dates have occurred since the closing of the Subscription Receipt offering), less any applicable withholding taxes. Trading in the Subscription Receipts will be halted on the Toronto Stock Exchange and the REIT expects that the Subscription Receipts will be delisted from the Toronto Stock Exchange after the close of markets on Monday and that the Units issued in exchange for the Subscription Receipts will immediately commence trading on the Toronto Stock Exchange.

The REIT further expects that in the upcoming days, holders of Subscription Receipts will receive the Units and the distribution equivalent payment to which they are entitled.

About Summit
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties across Canada . Summit's units are listed on the TSX and trade under the symbol SMU.UN.  For more information, please visit our web site at www.summitIIreit.com.

Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "goal" and similar expressions are intended to identify forward-looking information or statements. Forward-looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry, outlook and anticipated events or results. Some of the specific forward looking statements contained herein include statements with respect to the following: the expected benefits and results of the Acquisitions to the REIT; the timing of the exchange of Units for Subscription Receipts and the delivery of a cash distribution equivalent payment; the timing of the delisting of the Subscription Receipts from the Toronto Stock Exchange; the timing of trading of the Units issued in exchange for Subscription Receipts.

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. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully as there can be no assurance actual results will be consistent with such forward-looking statements.

Information contained in forward-looking statements is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Summit Industrial Income REIT


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