Agellan Commmerial REIT announces $18.25 million property acquisition
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TORONTO, May 8, 2013 /CNW/ - Agellan Commercial REIT (TSX: ACR.UN) ("Agellan"
or the "REIT") announced today that it has entered into an agreement to
purchase an office property (the "Property") located in Texas for a total
purchase price of $18.25 million (the "Purchase Price"), representing a
going-in capitalization rate of 8.16%. The Property is a two-storey commercial
office facility located in the fast growing Techway and Energy Corridor in
Houston, Texas. The Property has approximately 101,000 square feet of gross
leasable area. The multi-tenant building is 100% occupied by three tenants and
was constructed in 2003 and is part of a larger corporate office park which
has attracted many investment grade tenants. The lead tenant, National Oilwell
Varco, is S&P rated A and occupies approximately 75% of the Property until
Highlights of the acquisition include:
-- The REIT is executing its growth plan by acquiring a
well-located, high-quality property in a major U.S. market
which is experiencing significant growth.
-- The Property was acquired at an attractive relative valuation,
and is located next to several of the REITs current assets in a
strategically clustered portfolio providing economies of scale
in key Houston submarkets.
-- The REIT is acquiring the Property at an attractive
capitalization rate of 8.16%.
-- The REIT has negotiated an interest only 5-year term mortgage
of approximately $10 million that will be fixed at an interest
rate of less than 3.0%.
-- The balance of the Purchase Price will be completed through a
combination of cash on hand and drawing on the REIT's
-- The property is 100% leased and has an attractive lease
maturity profile of approximately 6.5 years at contractual
rates determined to be under market.
-- Approximately 83% of the Property NOI is derived from
investment grade tenants.
-- The acquisition is expected to be approximately 3% accretive to
the REITs Forecasted Adjusted Funds From Operations ("AFFO")
Frank Camenzuli, Agellan's Chief Executive Officer, commented, "We are excited
because the acquisition is consistent with our previously stated growth
strategy of acquiring high-quality assets located in strategic clusters in
growing markets at attractive relative valuations. The REIT continues to see
similar investment opportunities in the targeted U.S. markets."
About Agellan Commercial Real Estate Investment Trust
Agellan Commercial 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 4.2 million square feet
of gross leasable area in 23 properties. The properties are primarily located
in Texas, Ontario and the U.S. Midwest.
Additional information about Agellan is available at
www.agellancommercialreit.com or www.sedar.com.
Derek Dermott, President Agellan Commercial Real Estate Investment Trust Tel:
(416) 593-6800 x269 Fax: (416) 593-6700
Frank Camenzuli, CEO Agellan Commercial Real Estate Investment Trust Tel:
(416) 593-6800 x226 Fax: (416) 593-6700
SOURCE: Agellan Commercial Real Estate Investment Trust
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-0- May/08/2013 18:28 GMT
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