Agellan Commercial Real Estate Investment Trust Announces the Disposition of a Single Tenant Distribution Centre in Dallas, Texas
TORONTO--(BUSINESS WIRE)--Agellan Commercial Real Estate Investment Trust (the “REIT") (TSX: ACR.UN) announced today that a third-party purchaser has agreed to acquire 5800 West Kiest Boulevard in Dallas, Texas from the REIT and has now completed its due diligence investigations in connection therewith.
“This transaction demonstrates our ability to enhance unitholder value by capitalizing on the aggressive pricing conditions in select markets in the United States”
The property is known as the Kiest Distribution Center and consists of a single-tenant building containing 343,617 square feet. The property is 100% leased to RSI Home Products Manufacturing, Inc. for a remaining lease term of approximately 2.8 years. The sale price for the Keist Distribution Center is US$11.6 million before closing costs, representing an in-place capitalization rate of 7.4%. The sale price represents an increase of approximately US$1.6 million, or 16%, from the purchase price paid by the REIT when it acquired the property in conjunction with its initial public offering in January 2013.
“This transaction demonstrates our ability to enhance unitholder value by capitalizing on the aggressive pricing conditions in select markets in the United States,” said Frank Camenzuli, the Chief Executive Officer of the REIT. “Agellan Capital Partners Inc., the REIT’s asset manager, has a long history of finding value and we fully expect that in the near term, the REIT will redeploy the capital from this disposition into one or more higher yielding investments with upside potential.”
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 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 August 11, 2014 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 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 4.7 million square feet of gross leasable area in 27 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, 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.