The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Agellan Commercial REIT announces the closing of $18.25 million property acquisition

Thursday, June 13, 2013

Agellan Commercial REIT announces the closing of $18.25 million property acquisition

16:29 EDT Thursday, June 13, 2013

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TORONTO, June 13, 2013 /CNW/ - Agellan Commercial REIT (TSX: ACR.UN) ("Agellan" or the "REIT") today announced the successful closing of its previously announced transaction of an office property (the "Property") located in Texas for a total purchase price of $18.25 million (the "Purchase Price"), representing a going-in capitalization rate of 8.16%.

The Property is a two-storey commercial office facility located in the fast growing Techway and Energy Corridor in Houston, Texas. The Property has approximately 101,000 square feet of gross leasable area, and is 100% occupied by three tenants.  Constructed in 2003, the building is part of a larger corporate office park which has attracted many investment grade tenants. The lead tenant, National Oilwell Varco, is S&P rated A, and occupies approximately 75% of the Property until 2020.

The REIT has obtained an interest only 5-year term mortgage of approximately $10.1 million at a fixed interest rate of 3.0%.  The balance of the Purchase Price will be funded through a combination of cash on hand, and the REIT's operating line.

Highlights of the acquisition include:

  • The REIT is executing its growth plan by acquiring a well-located, high-quality property in a major U.S. market which is experiencing significant growth.
  • The Property was acquired at an attractive relative valuation, and is located next to several of the REITs current assets providing economies of scale in key Houston submarkets.
  • The property is 100% leased and has an attractive lease maturity profile of approximately 6.5 years at contractual rates determined to be under market.
  • Approximately 83% of the Property NOI is derived from investment grade tenants.
  • The acquisition is expected to be approximately 3% accretive to the REITs Forecasted Adjusted Funds From Operations ("AFFO") per unit.

Frank Camenzuli, Agellan's Chief Executive Officer, commented, "We believe this acquisition solidifies our investment mandate of acquiring high quality assets at attractive relative valuations across strategic major US markets. The REIT continues to see similar investment opportunities in our targeted U.S. markets."

About Agellan Commercial Real Estate Investment Trust

Agellan Commercial REIT is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning industrial, office and retail properties in select target markets in the United States and Canada.

The REIT's current portfolio aggregates approximately 4.3 million square feet of gross leasable area in 24 properties. The properties are primarily located in Texas, Ontario and the U.S. Midwest.

Additional information about Agellan is available at www.agellancommercialreit.com or www.sedar.com.

SOURCE: Agellan Commercial Real Estate Investment Trust

For further information:

Derek Dermott, President
Agellan Commercial Real Estate Investment Trust
Tel: (416) 593-6800 x269
Fax: (416) 593-6700

Frank Camenzuli, CEO
Agellan Commercial Real Estate Investment Trust
Tel: (416) 593-6800 x226
Fax: (416) 593-6700

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections