Dundee Real Estate Investment Trust will spend $140-million to buy office buildings in Toronto and Ottawa, it said Wednesday as it reported third quarter earnings.
The company said funds from operations - an important measure of profitability for real estate companies - was $16.2-million, or 54 cents a unit, compared to $15.8-million, or 50 cents, in the same quarter a year ago. It saw its lease rate across all properties decrease to 94.9 per cent from 95.9 per cent a year ago, though the number increased slightly over the last quarter.
"We continue to work closely with existing and prospective tenants, and are pleased to see our efforts rewarded not only with an increase in occupancy levels in the third quarter but also increases in rent," said president Michael Knowlton.
Dundee ended the quarter with $110-million of cash, and an undrawn operating line of $31-million. It will put the money to work in Ottawa and Toronto, though it hasn't released details on the acquisitions.
"The trust has entered into exclusive letter agreements, subject to due diligence and finalizing purchase and sale agreements, to acquire $140-million of predominantly office properties in Toronto and Ottawa totalling 1.2-million square feet at an overall cap rate of approximately 9.3 per cent," the company said in a statement.
It will release more information Wednesday morning when it holds a conference call to discuss the earnings