Press release from CNW Group
FAM REIT announces closing of previously announced capital redeployment initiative
Wednesday, May 01, 2013
FAM REIT announces closing of previously announced capital redeployment initiative16:05 EDT Wednesday, May 01, 2013
RICHMOND, BC, May 1, 2013 /CNW/ - FAM Real Estate Investment Trust (TSX: F.UN, F.WT) ("FAM REIT" or the "REIT") announced today that it completed its first acquisition - the previously announced purchase of a 170,000 square foot urban office building municipally known as 4211 Yonge Street, Toronto, Ontario ("4211 Yonge"), which is currently 92% leased. The purchase price was $43 million, exclusive of closing costs.
Debt financing for the acquisition of 4211 Yonge consisted of a new $25 million first mortgage from a Canadian Schedule I Chartered Bank, with a 10-year term, 3.7% fixed interest rate, and a 25 year loan amortization. The cash component was funded through the net cash proceeds from the sale of our interest in 220 Portage Ave, Winnipeg, Manitoba ("220 Portage") and FAM REIT's existing liquidity.
FAM REIT also announced today that on April 30, 2013 it completed the previously announced sale of its 50% interest in 220 Portage for $20.5 million, subject to certain adjustments. After taking into account repayment of the existing first mortgage, debt extinguishment costs and closing adjustments, the net cash proceeds were approximately $13.5 million.
Shant Poladian, Chief Executive Officer of FAM REIT, commented, "These first two transactions since FAM REIT's IPO on December 28, 2012 represent key milestones in the execution of our business strategy. The benefits include leverage neutral AFFO per unit accretion, increased primary market presence, broader geographic diversification, and an enhanced organic growth profile for our overall portfolio. Overall, we have strengthened the quality and reliability of our cash distribution for the benefit of our existing unitholders."
About FAM Real Estate Investment Trust
The REIT is a diversified commercial real estate investment trust focused on owning and acquiring strategically well-located industrial, office and retail real estate located primarily across Canada's large population centres.
This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE: FAM Real Estate Investment Trust
For further information:
Shant Poladian, CA, CPA
Chief Executive Officer
FAM Real Estate Investment Trust