Press Release
TORONTO, March 28, 2018 /CNW/ - Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire 100% of a distribution warehouse totaling 141,034 square feet of gross leasable area located in Stratford, Ontario. The building is leased to Samsonite Canada, a global manufacturer and retailer of consumer durable goods, under a twelve-year lease with contractual lease escalations. The property is a brand new, build-to-suit facility with clear 36 foot ceiling heights and the potential for future expansion based on tenant demand. The REIT will pay $14.9 million for the property, financed by a new $10.0 million five-year mortgage with an expected 3.82% interest rate, with the balance in cash from the REIT's credit lines, generating a very strong 6.0% capitalization rate. The REIT expects to close the transaction on or before June 1, 2018.
The REIT also announced today that it has replaced the $90.0 million bridge facility established late in 2017 with $88.0 million in new mortgages on recently acquired properties with a weighted average term of ten years and an interest rate of 4.1%. The bridge facility was due to expire in September 2018. With these new mortgages, approximately 10.0% of the REIT's total debt now incurs a floating interest rate.
"We are very pleased to be increasing our presence in the strong Southwestern Ontario region and enhancing the quality and average age of our portfolio with the acquisition of this brand new property," commented Paul Dykeman, Chief Executive Officer. "We are also pleased to be replacing the bridge facility with these long-term mortgage financings, further strengthening the stability and predictability of our cash distributions to Unitholders."
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. More particularly and without limitation, this news release contains forward looking statements and information concerning the goal to build Summit's property portfolio. The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required financing and approvals. 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
Paul Dykeman, CEO at (902) 405-8813, pmdykeman@sigmarea.com
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