The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Crombie REIT announces acquisition of five property portfolio, mortgage financing and revolving credit facility renewal

Tuesday, June 26, 2012

Crombie REIT announces acquisition of five property portfolio, mortgage financing and revolving credit facility renewal16:33 EDT Tuesday, June 26, 2012/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/STELLARTON, NS, June 26, 2012 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has completed the acquisition of five retail properties (the "Properties") from affiliated entities of Shoppers Drug Mart Inc. for a purchase price of approximately $42.8 million, subject to closing adjustments ("Purchase Price"). The Properties include total gross leasable area of approximately 107,000 square feet, with three Properties located in Quebec and one each in Ontario and Alberta.Crombie will complete mortgage financing totaling approximately $29.1 million on the properties, with mortgages on four locations funding immediately following closing of the acquisition. An additional mortgage on the fifth property is expected to fund before the end of June. The mortgages have interest rates ranging from 4.15% to 4.33% with 10 to 17 year terms and 25 year amortizations. The balance of the Purchase Price, closing adjustments and transaction costs was drawn from Crombie's existing revolving credit facitity (the "Revolver").Crombie also completed the annual renewal of its Revolver, extending its term to maturity one year to June 30, 2015.  As part of the renewal, Crombie exercised and gained lender approval for the $50 million accordion feature on the Revolver, increasing the maximum authorized credit under the Revolver to $200 million, subject to available borrowing base, and including both funds drawn on the facility and issued Letters of Credit."With the completion of this transaction, Crombie has added to its portfolio of high quality assets across Canada and, importantly, increased our geographic diversification," commented Donald E. Clow FCA, Crombie's President and Chief Executive Officer. "The acquisition is anticipated to be accretive to Crombie's Adjusted Funds From Operations ("AFFO") per unit.  We are also pleased with the renewal of our Revolver and the additional $50 million afforded under the accordion feature. We are committed to maintaining a strong balance sheet with ample liquidity. Our Revolver renewal combined with the recently announced $60 million, 5.00%, seven-year Convertible Debenture issuance which is expected to close on July 3, 2012 provides additional liquidity and balance sheet strength to support our future growth stategy."About Crombie Crombie Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie REIT currently owns a portfolio of 166 commercial properties in nine provinces, comprising approximately 13.6 million square feet of gross leasable area. More information about Crombie REIT can be found at www.crombiereit.com.This news release may contain forward looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "continue", "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward looking statements. These statements reflect current beliefs and are based on information currently available to management of Crombie, and include, without limitation, statements regarding (a) the completion of additional mortgage financing with respect to certain of the Properties and (b) the expectation that the acquisition of the Properties will be accretive to Crombie's AFFO. Forward looking statements necessarily involve known and unknown risks and uncertainties.A number of factors, including those discussed in the 2011 annual Management Discussion and Analysis under "Risk Management", could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct. Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements.Additional information relating to Crombie can be found on Crombie's web site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory filings at www.sedar.com.For further information: Mr. Glenn Hynes, FCA Chief Financial Officer and Secretary Crombie REIT (902) 755-8100