TORONTO, ONTARIO, Nov 10, 2011 (MARKETWIRE via COMTEX) –
Allied Properties REIT
/quotes/zigman/26584 CA:AP.UN
+0.59%
announced today that it has
entered into agreements to purchase the following properties for $112
million:
Total Office Retail Parking
Address GLA GLA GLA Spaces
----------------------------------------------------------------------------
Leeson and Lineham Block, Calgary 30,770 25,594 5,176 4
Westcoast Building, Calgary 19,499 19,499 0 9
The Chambers, Ottawa 211,110 196,328 15,951 144
----------------------------------------------------------------------------
Total 261,379 241,421 21,127 157
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Allied also announced that it has entered into an agreement to sell 67
Richmond Street West in Toronto for $13.5 million.
With the acquisitions announced today, Allied has completed or
announced 23 acquisitions in 2011 for $461 million. “On closing of
these acquisitions, we’ll have established five new target markets in
a short period of time,” said Michael Emory, President CEO. “While
adhering to our investment and operating focus, we’ve propelled our
urban office portfolio to a national scale and significantly boosted
our annual AFFO per unit in the process.”
Calgary Acquisitions
Located on the Stephen Avenue Mall, immediately west of Fashion
Central, which Allied acquired earlier this year, the Leeson and
Lineham Block (209 – 8th Avenue S.W.) is a restored heritage property
comprised of 30,770 square feet of GLA and four surface parking
spaces. It is fully leased to tenants consistent in character and
quality with Allied’s tenant base. Built in 1910 as one of several
business blocks, the property was extensively restored and renovated
between 1998 and 2000. It is on the Inventory of Evaluated Historic
Resources maintained by the City of Calgary.
Located on the 11th Avenue S.W., in close proximity to the Roberts
Block, which Allied acquired earlier this year, the Westcoast
Building (522 – 11th Avenue S.W.) is a restored heritage property
comprised of 19,499 square feet of GLA and nine surface parking
spaces. It is fully leased to tenants consistent in character and
quality with our tenant base. Built in 1912 as a warehouse, the
property was extensively restored and renovated in the 1980s. It is
on the Inventory of Evaluated Historic Resources maintained by the
City of Calgary.
Ottawa Acquisition
Located on the southwest corner of Sparks and Elgin, just west of
Confederation Square and a half-block south of the Parliament
Buildings, The Chambers (40-46 Elgin Street) is comprised of four
contiguous structures, three of which are heritage buildings and the
fourth of which is a 14-storey office building. Similar to what
Allied envisages with respect to its large-scale intensification
project at QRC West, the property is comprised of 211,110 square feet
of GLA and 144 underground parking spaces. It is 96.5% leased to
investment-grade tenants, including the National Capital Commission
(70% of the GLA) and Shaw Communications. The leases have a weighted
average lease term in excess of 6.7 years. The heritage components of
the property–The Scottish-Ontario Chambers, The Central Chambers and
The Bell Block–were constructed between 1867 and 1891, renovated
extensively in 1994 and are designated under the Ontario Heritage
Act. The newer component of the property was constructed in 1994.
Toronto Disposition
Located on the south side of Richmond Street, just west of the
intersection with Bay Street, 67 Richmond Street West is comprised of
50,122 square feet of GLA and is fully leased. It has no strategic
significance in the context of Allied’s portfolio. On disposition at
the sale price, the property will have afforded a very high internal
rate of return to Allied’s unitholders over a six-year period.
Closings and Financing
The disposition is expected to close in December of 2011, and the
acquisitions are expected to close by the end of February, 2012, in
all cases subject to customary conditions. The purchase price for the
three properties to be acquired represents a capitalization rate of
approximately 6.7% applied to the annual net operating income (“NOI”)
in year one. On closing, the Leeson and Lineham Block will be subject
to a first mortgage financing in the approximate principal amount of
$5.24 million, having a term expiring in July of 2013, bearing
interest at 4.25% per year and payable in blended instalments of
principal and interest based on a 25-year amortization period. The
Chambers will be subject to a first mortgage in the principal amount
of $52.4 million, having a term expiring in September of 2018,
bearing interest at an effective rate of 3.8% per year and payable in
blended instalments of principal and interest based on a 20-year
amortization period. The remaining property will be free and clear on
closing. Allied will fund the acquisitions with proceeds from
recently completed first mortgage financings.
Cautionary Statements
This press release may contain forward-looking statements with
respect to Allied, its operations, strategy, financial performance
and condition. These statements generally can be identified by use of
forward looking words such as “may”, “will”, “expect”, “estimate”,
“anticipate”, intends”, “believe” or “continue” or the negative
thereof or similar variations. The actual results and performance of
Allied discussed herein could differ materially from those expressed
or implied by such statements. Such statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations, including that the transactions contemplated herein are
completed. Important factors that could cause actual results to
differ materially from expectations include, among other things,
general economic and market factors, competition, changes in
government regulations and the factors described under “Risk Factors”
in Allied’s Annual Information Form, which is available at
www.sedar.com . These cautionary statements qualify all
forward-looking statements attributable to Allied and persons acting
on Allied’s behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release and the
parties have no obligation to update such statements.
“Capitalization rate” is not a measure recognized under International
Financial Reporting Standards (“IFRS”) and does not have any
standardized meaning prescribed by IFRS. Capitalization rate is
presented in this press release because management of Allied believes
that this non-IFRS measure is relevant in interpreting the purchase
price of the properties being acquired. Capitalization rate, as
computed by Allied, may differ from similar computations as reported
by other similar organizations and, accordingly, may not be
comparable to capitalization rate reported by such organizations.
NOI is not a measure recognized under IFRS and does not have any
standardized meaning prescribed by IFRS. NOI is presented in this
press release because management of Allied believes that this
non-IFRS measure is relevant in interpreting the purchase price of
the property being acquired. NOI, as computed by Allied, may differ
from similar computations as reported by other similar organizations
and, accordingly, may not be comparable to NOI reported by such
organizations.
Allied Properties REIT is a leading owner, manager and developer of
urban office environments that enrich experience and enhance
profitability for business tenants operating in Canada’s major
cities. Its objectives are to provide stable and growing cash
distributions to unitholders and to maximize unitholder value through
effective management and accretive portfolio growth.
Contacts:
Allied Properties Real Estate Investment Trust
Michael R. Emory
President and Chief Executive Officer
(416) 977-0643
memory@alliedpropertiesreit.com
SOURCE: Allied Properties Real Estate Investment Trust
mailto:memory@alliedpropertiesreit.com
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