TORONTO--(BUSINESS WIRE)--Agellan Commercial Real Estate Investment Trust (the “REIT” or “Agellan”) (TSX:ACR.UN) is pleased to provide an update on substantial recent leasing activity in Texas. The REIT has recently completed a number of lease transactions that have increased the overall occupancy of the REIT’s Texas portfolio from approximately 90% as at September 30, 2014 to a current occupancy of approximately 94%.
Texas Lease Transactions Subsequent to Quarter End
- Subsequent to the third quarter ended September 30, 2014, the REIT has completed lease transactions in Texas representing a total of approximately 145,000 square feet. Thirteen leases totalling approximately 130,000 square feet were completed in Houston, while the remainder were in Austin.
- Of these lease transactions completed, approximately 46,000 square feet represent renewals and approximately 99,000 square feet represent new leases. Nine new leases totaling approximately 85,000 square feet were completed in Houston, while the remainder were completed in Austin.
- The aforementioned leasing activity increases the occupancy of the REIT’s Texas portfolio by approximately 4% to 94%. This is the REIT’s highest level of occupancy in Texas since the REIT’s IPO in January 2013.
- Houston’s occupancy rate now sits at approximately 92%, up from approximately 87% at quarter end, while Austin’s occupancy rate is now 100%, up from approximately 96%.
- The weighted average term of these new and renewing leases is approximately 3.8 years.
Agellan’s Exposure to the Oil and Gas Industry
- Agellan has very little exposure to tenants who derive revenue from the oil and gas industry and is pleased to state that only approximately 170,000 square feet of its Texas portfolio is occupied by tenants with direct exposure to oil and gas. Of this, National Oilwell Varco, an A+ S&P rated company, occupies approximately 88,000 square feet until September 2020.
- The weighted average remaining lease term for the REITs oil and gas related tenants is approximately 3.8 years with only approximately 38,000 square feet expiring in the next 2 years.
- This exposure accounts for approximately 8% of the REIT’s total Texas gross leasable area and approximately 4% of the REITs entire gross leasable area. It also accounts for approximately 13% of the Texas minimum rent, and approximately 6% of the REIT’s total minimum rent.
"As evidenced by these recently completed lease transactions, we continue to see strong leasing momentum in our Texas portfolio, notwithstanding the recent decline in oil prices. We believe this is a result of the diversification of the Houston economy, with energy employment accounting for approximately 38% of local GDP currently, versus approximately 75% in 1980s.” says Frank Camenzuli, Chief Executive Officer of the REIT. “Furthermore, Texas has accounted for approximately 1 out of every 6 jobs created in the United States in last 12 months, with the vast majority those being in industries other than oil and gas.”
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 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.