Summit Industrial Income REIT Expands Montreal Presence with Purchase of Major Property Portfolio

Summit Industrial Income REIT (Summit II) announced that it had waived conditions and would acquire a portfolio of three light industrial properties and one fully-occupied office building located in Pointe Claire, Lasalle and St. Laurent in the Greater Montreal Region. The three industrial properties total 206,612 square feet of gross leaseable area (GLA) with the office property adding 20,859 square feet. The REIT will pay approximately $15.3 million for the portfolio, financed by a new $9.9 million mortgage with the balance in cash from the REIT's revolving credit facility. Closing is anticipated on or before October 1, 2013. The purchase price equates to a solid acquisition cost for the industrial properties of $56.00 per square foot and a strong initial capitalization rate of approximately 8.0%.
The industrial properties are 93% occupied by national and strong regional tenants with a weighted average remaining lease term of 6.8 years. The small office property is 100% occupied with a remaining lease term of 6.8 years. All of the properties are close to highways, rail and Montreal's major airport, and there is some expansion potential available on land within the acquired portfolio. The acquisition significantly increases the REIT's presence in the strong Montreal market to a total of 308,558 square feet of GLA, or approximately 9% of the REIT's total portfolio.
"We are very pleased to be expanding our presence in the strong and vibrant Montreal market with this high quality property portfolio," stated Paul Dykeman, Chief Executive Officer. "With a solid 8% initial cap rate and attractive five-year financing, the purchase will be immediately and significantly accretive to our Adjusted Funds from Operations and make a solid contribution to our cash flows going forward."

on July 30, 2013