Agellan Commercial Real Estate Investment Trust Completes the
Disposition of a Single
Tenant Distribution Centre in
Dallas, Texas and Completes US$12 Million Mortgage Financing on
Charlotte Office Building
Not for distribution to United States Newswire Services or for dissemination in the United States
TORONTO--(BUSINESS WIRE)--Agellan Commercial Real Estate Investment Trust (the “REIT") (TSX:ACR.UN) announced today that it has completed the sale of 5800 West Kiest Boulevard in Dallas, Texas to a third-party purchaser.
“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 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.
Additionally, the REIT announced today that it has closed a US$12.3 million mortgage financing secured by the REIT’s property in Charlotte, North Carolina. The mortgage, which matures in 2024, carries a favourable fixed interest rate of 3.90% per annum. The proceeds from the mortgage will be initially used to reduce the amount outstanding under the REIT’s revolving credit facility.
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 4.3 million square feet of gross leasable area in 26 properties. The properties are primarily located in major urban markets in the United States and Canada.
This press release may contain 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”, “estimates”, “anticipates”, “predicts”, “believes”, “continue”, or variations of such words and phrases or statements. 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, 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, general and local economic and business conditions; the financial condition of tenants; the REIT’s ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest and currency rate functions. The REIT’s objectives and forward-looking statements are based on certain assumptions, including that the general economy remains stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this press release speaks 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. 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.