TORONTO--(BUSINESS WIRE)--Agellan Commercial Real Estate Investment Trust (the “REIT”) (TSX:ACR.UN) announced today that a third-party purchaser has agreed to purchase the REIT’s approximate 45,000 square foot multi-tenant retail plaza located at 195-215 Rue Bellehumeur in Gatineau, Quebec (the “Property”).
The sale price for this non-core asset of the REIT is approximately C$9.2 million before closing costs and represents an in-place capitalization rate of approximately 7.2%. The proceeds of disposition will be used by the REIT to temporarily reduce the outstanding balance on its credit facility, which is currently partially secured by the Property.
“The disposition further supports the net asset value of the REIT, and will ultimately help advance the composition of the REIT’s portfolio,” said Frank Camenzuli, the Chief Executive Officer of the REIT.
The disposition is consistent with the REIT’s strategy of recycling capital by selling assets in certain markets that are no longer aligned with its core strategies in order to fund new investment opportunities. Consistent with the REIT’s past practices and in the normal course of business, the REIT is engaged in discussions, and has in place various agreements, with respect to possible acquisitions of new properties and dispositions of existing properties in its portfolio. However, there can be no assurance that these discussions or agreements will result in acquisitions or dispositions or, if they do, what the final terms or timing of such acquisitions or dispositions would be. The REIT expects to continue current discussions and actively pursue other acquisition, investment and disposition opportunities.
The sale is expected to close on or about May 3, 2016 and is subject to certain conditions typical for transactions of this type. There can be no assurance that all conditions to closing will be satisfied or waived.
About Agellan Commercial Real Estate Investment Trust
The 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 was 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 4.7 million square feet of gross leasable area in 32 properties. The properties are primarily located in major urban markets in the United States and Canada.
This press release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information can be identified by words or expressions including, but not limited to, “plans”, “expects”, “scheduled”, “estimates”, “intends”, “anticipates”, “predicts”, ”projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “should”, “might”, “occur”, “be achieved” or “continue” or similar expressions. Forward-looking information is necessarily based on a number of estimates and assumptions that are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are beyond the REIT’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to: the REIT’s future growth potential; results of operations; future prospects for additional investment opportunities in Canada and the U.S., including access to debt and equity capital at acceptable costs and the ability to obtain necessary approvals and to minimize any unexpected costs or liabilities, environmental or otherwise, relating to any acquisitions or dispositions; demographic and industry trends remaining unchanged, including occupancy levels, lease renewals, rental increases and retailer competition; future levels of the REIT’s indebtedness remaining at acceptable levels, including its credit rating; tax laws as currently in effect remaining unchanged, including applicable SIFT rules; and current economic conditions remaining unchanged, including interest rates and applicable foreign exchange rates. Readers, therefore, should not place undue reliance on any such forward-looking statements. All forward-looking information in this press release speaks only as of the date of this press release. The REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities laws. All forward-looking statements in this press release are qualified by these cautionary statements. Additional information about these assumptions and risks and uncertainties is contained in the REIT’s filings with securities regulators, including its latest annual information form and MD&A.