Pure Industrial Real Estate Trust Announces $169.2 Million of Property Acquisitions and $50 Million Equity Financing

Pure Industrial Real Estate Trust (TSX: AAR.UN) ("PIRET") announced that it has entered into conditional agreements to acquire $169.2 million of income producing properties (collectively, the "Acquisitions"), consisting of seven industrial properties representing 1,524,818 square feet of gross leasable area ("GLA") located in Richmond and Surrey, British Columbia, Edmonton, Alberta, Toronto Ontario, and QuebecCity, Quebec. The Acquisitions consist of a portfolio of two properties located in Richmond, British Columbia (the "Richmond Portfolio"), another property located in Richmond, British Columbia (the "Second RichmondProperty"), one property located in Surrey, British Columbia (the "Surrey Property), two properties located inEdmonton, Alberta and Toronto, Ontario (collectively, the "Edmonton-Toronto Properties") and one property located inQuebec City, Quebec (the "Quebec Property").  The properties are being acquired at a weighted average going-in capitalization rate of 6.25%.
 
PIRET also announced today that it has entered into an agreement to sell to a syndicate of underwriters led by Canaccord Genuity Corp. (the "Underwriters"), on a bought deal basis, 10,530,000 trust units ("Units") at a price of$4.75 per Unit for gross proceeds to PIRET of approximately $50.0 million (the "Financing").  PIRET has also granted the Underwriters an over-allotment option to purchase up to an additional 1,579,500 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Financing. The Financing is expected to close on or about December 12, 2012 and is subject to regulatory approval.
 
Use of Proceeds
The net proceeds from the Financing, together with the proceeds of assumed and new mortgages, will be used to fund the acquisitions of the Richmond Portfolio, the Surrey Property and the Edmonton-Toronto Properties.
 
The Richmond Portfolio consists of two multi-tenant industrial properties comprising an aggregate of 927,429 square feet of GLA.  The Richmond Properties are 100% leased to four high quality national and regional tenants with a weighted average remaining lease term of approximately five years.  The purchase price for the Richmond Properties is $102,460,000 million, representing a 6.16% going-in capitalization rate.
 
The Surrey Property consists of one multi-tenant industrial property comprising 38,232 square feet of GLA and will be 100% leased to a high quality regional tenants with a weighted average remaining lease term of approximately 1.8 years.  The purchase price for the Surrey Property is $4.6 million, representing a 5.97% going-in capitalization rate.
 
The Edmonton-Toronto Properties consist of two single-tenant industrial properties comprising an aggregate of 52,782 square feet of GLA and will be 100% leased to a high quality national tenant under 10 year, triple net leases.  The purchase price for the Edmonton-Toronto Properties is $6.5 million, representing a 6.71% going-in capitalization rate.
 
Properties To Be Acquired with Funds on Hand
The acquisitions of the Second Richmond Property and the Quebec Property will be funded from cash on hand and with the proceeds from new mortgages.
 
The Second Richmond Property consists of a single-tenant industrial property comprising 412,375 square feet of GLA.  The Second Richmond Property is 100% leased to a large national tenant with a remaining lease term of approximately 10 years.  The purchase price for the Richmond Properties is $44,100,000 million, representing a 6.21% going-in capitalization rate.
 
The Quebec Property consists of a single-tenant industrial property comprising 94,000 square feet of GLA and will be 100% leased to a high quality regional tenant with a remaining lease term of 25 years.  The purchase price for theQuebec Property is $11.5 million, representing a 6.96% going-in capitalization rate.
Consistent with PIRET's past practices and in the normal course, PIRET engages in ongoing discussions with respect to possible acquisitions and has entered into acquisition agreements in respect of the properties described above, which are subject to a number of conditions. There can be no assurance that any of these acquisitions will be completed on the terms of such agreement or at all. PIRET continues to actively pursue acquisition and investment opportunities.
 
Mortgages
In aggregate, PIRET intends to place and assume new and existing mortgage financing in respect of the Acquisitions in the aggregate of approximately $97.665 million, bearing an anticipated weighted average interest rate of 4.25%.
 
Darren Latoski, Co-CEO of PIRET, said "PIRET is continuing to take advantage of our well-established pipeline of acquisition opportunities across Canada.  We are pleased to have identified these high quality, well tenanted industrial properties which we can acquire on an accretive basis."

 

on November 27, 2012