TORONTO, March 26, 2019 (GLOBE NEWSWIRE) -- WPT Industrial Real Estate Investment Trust (the “REIT”) (TSX: WIR.U - OTCQX: WPTIF) announced today that it has waived diligence conditions and plans to acquire a portfolio of 13 industrial buildings and three land parcels located in multiple markets in the United States (the “Acquisition Portfolio”) totaling approximately 2.2 million square feet of gross leasable area.
The Acquisition Portfolio increases the REIT’s scale in Chicago, Milwaukee and Minneapolis and adds properties in three new markets for the REIT, including the high-barrier coastal markets of Los Angeles and Miami. The Acquisition Portfolio also features well-located, highly functional distribution properties with a balanced blend of eight single-tenant and five multi-tenant buildings, which add scale and diversification to the REIT’s portfolio and tenant base.
Total purchase price for the Acquisition Portfolio is approximately US$226 million (exclusive of transaction and closing costs), which is expected to be funded with cash on hand and proceeds from the REITs senior unsecured credit facility (the “Credit Facility”). Subject to satisfaction of customary closing conditions, the Acquisition Portfolio is scheduled to close within the next 30 days and is expected to be immediately accretive to the REIT’s adjusted funds from operations (“AFFO”).
Credit Facility Amendment
In anticipation of closing on the Acquisition Portfolio, the REIT has received lender commitments to amend and extend the Credit Facility, increasing availability from US$300 million to US$450 million and maintaining an additional US$300 million accordion feature. The increased commitments were comprised of a US$70 million increase to the unsecured revolving credit facility (the “Revolving Facility”) and a new US$80 million unsecured delayed draw term loan (“Delayed Draw Term Loan”). The Credit Facility, which previously matured in June 2022, will now mature in March 2023, with the option for two six-month extensions. The Delayed Draw Term Loan will have an initial draw period of one year from the date of the amendment and mature in March 2024.
“We are very pleased to source a high-quality portfolio acquisition that advances the REIT’s strategic priorities to add scale and diversification with a focus on markets and properties that have the greatest potential to drive long-term growth. With the new amendment to our Credit Facility, we will have increased capacity and flexibility to continue our pursuit of strategic acquisition and development opportunities for the REIT,” said Scott Frederiksen, Chief Executive Officer.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. WPT Industrial, LP (the REIT’s operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 18.9 million square feet of gross leasable area, comprised of 56 industrial properties and one office property located in 15 states in the United States. The REIT’s objective is to acquire, develop, manage and own industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. The REIT pays monthly cash distributions, currently at $0.0633 per Unit, or approximately $0.76 per Unit on an annualized basis, in US funds.
For more information, please contact:
Scott Frederiksen, Chief Executive Officer
WPT Industrial Real Estate Investment Trust
Tel: (612) 800-8501
This press release contains “forward-looking information” as defined under applicable Canadian securities law (“forward-looking information” or “forward-looking statements”), including with respect to the expected acquisition of the Acquisition Portfolio, the cost, timing and composition thereof and funding therefor, the expected impact of the Acquisition Portfolio on the REIT’s adjusted funds from operations and timing of such impact, as well as anticipated amendments to the Credit Facility. Such statements reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “projects”, “believes” or variations of such words and phrases (including negative variations) or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved” or “continue” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such estimates, beliefs and assumptions include that the conditions to closing of the acquisition of the Acquisition Portfolio will be met or waived in a timely manner, that the acquisition of the Acquisition Portfolio will be completed on the current agreed upon terms, that the Credit Facility will be amended on the terms agreed to pursuant to the lender commitments, that the Acquisition Portfolio’s projected operating expenses and recoveries align with historical financial results, that projected capital expenditure reserves are in-line with estimates from third-party reports, as well as with respect to rent growth potential, occupancy levels, anticipated amounts of expenses, anticipated amounts of base rent, tenant creditworthiness, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT’s properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved, if achieved at all. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed or referenced under “Risk Factors” in the REIT’s annual information form for the year ended December 31, 2017, which is available under the REIT’s profile on SEDAR at www.sedar.com. These forward-looking statements have been approved by management to be made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Funds from operations (“FFO”) is defined as net income, in accordance with International Financial Reporting Standards (“IFRS”), (i) plus or minus fair value adjustment to investment properties; (ii) plus or minus gains or losses from sales of investment properties; (iii) plus or minus other fair value adjustments; (iv) plus amortization of tenant incentives; (v) plus transaction costs expensed as a result of the purchase of an entity being accounted for as a business combination; (vi) plus distributions on redeemable or exchangeable units treated as interest expense; (vii) plus or minus any negative goodwill or goodwill impairment; (viii) plus deferred income tax expense, after adjustments for equity accounted entities and joint ventures calculated to reflect FFO on the same basis as consolidated investment properties; and (ix) adjustments for property taxes accounted for under International Financial Reporting Interpretations Committee (“IFRIC”) 21. FFO has been prepared consistently with the definition presented in the white paper on funds from operations prepared by REALPAC issued on February 2019 and is intended to be used as a sustainable, economic earnings metric. However, from time to time the REIT may enter into transactions that materially impact the calculation of FFO and are adjusted as determined by the board of trustees of the REIT (the “Board” or the “Board of Trustees”) in their sole discretion. The REIT considers FFO to be a useful measure of operating performance and adjusts for items included in net income (or net loss) that do not arise from operating activities or do not necessarily provide an accurate depiction of the REIT’s past, current or recurring performance.
AFFO is defined as FFO subject to certain adjustments, including: (i) any differences resulting from recognizing investment property rental revenues on a straight-line basis; and (ii) minus a reserve for normalized maintenance capital expenditures, tenant inducements and leasing commissions, as determined by the REIT. AFFO has been prepared consistently with the definition presented in the white paper on adjusted funds from operations prepared by REALPAC issued on February 2019 for all periods presented. However, from time to time the REIT may enter into transactions that materially impact the calculation of AFFO and are adjusted as determined by the Board of Trustees in their sole discretion. The REIT considers AFFO to be a useful measure of operating performance and adjusts for items included in net income (or net loss) that do not arise from operating activities or do not necessarily provide an accurate depiction of the REIT’s past, current or recurring performance.
FFO and AFFO should not be construed as alternatives to net income and comprehensive income determined in accordance with IFRS as indicators of the REIT’s performance. The REIT’s method of calculating FFO and AFFO may differ from other issuers’ methods and accordingly may not be comparable to measures used by other issuers.