PROREIT announces $42.7 million of property acquisitions and filing of a
preliminary short form prospectus
/NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION THROUGH UNITED
STATES NEWS OR WIRE SERVICES./
MONTRÉAL, Oct. 23, 2013 /CNW/ - PRO Real Estate Investment Trust ("PROREIT"
or the "REIT") (TSXV: PRV.UN) announced today that it has filed a preliminary
prospectus with securities authorities in each of the provinces of Canada (the
"Prospectus") for a proposed public offering (the "Offering") of trust units
The Offering is being made on an underwritten basis through a syndicate of
underwriters led by Canaccord Genuity Corp. and including TD Securities Inc.,
Scotia Capital Inc., National Bank Financial Inc., Desjardins Securities Inc.,
GMP Securities L.P., and Dundee Securities Ltd.
James Beckerleg, President & CEO of PROREIT, commented: "We are pleased to be
bringing PROREIT back to market. We have an experienced management team,
with particular knowledge and expertise in the commercial real estate markets
in Eastern Canada, including a wide and established network of relationships
in these markets. We believe that there is tremendous potential in
commercial real estate in Eastern Canada, and we believe we have the right
team and the right platform with which to accretively build a strong and
diversified property portfolio, generating both income and growth for our
Property Acquisitions and the Initial Portfolio
The REIT has entered into conditional agreements to acquire five commercial
properties (collectively, the "Acquisitions" and individually, an
"Acquisition") from five separate and unrelated vendors. The properties
being acquired were all part of the acquisition portfolio that PROREIT had
assembled in connection with the offering announced in July 2013, which was
postponed due to market conditions. Since that time, PROREIT has worked
closely with the vendors of these properties, and has amended and extended
certain of the acquisition agreements, and has terminated certain others.
Upon closing of the Acquisitions, the REIT's portfolio will be comprised of 9
commercial properties (the "Initial Portfolio") totalling 396,872 square feet
of gross leasable area ("GLA"). The Initial Portfolio will be diversified by
property type and geography across Eastern Canada, including the Greater
Montréal Area and certain urban centres of Atlantic Canada.
The Initial Portfolio will consist of threeoffice properties representing
125,407 square feet of GLA, five retail properties representing
171,795square feet of GLA, and one commercial mixed use property
representing 99,670 square feet of GLA. The properties are mostly situated in
prime locations within their respective markets, along major traffic arteries
benefiting from high visibility and easy access. Management believes the
quality and diversity of the Initial Portfolio will enable the REIT to attract
new tenants and retain existing tenants, providing a strong base on which to
generate stable and growing cash flows.
The aggregate purchase price (excluding closing costs) for the properties to
be acquired under the acquisition agreements is anticipated to be
approximately $42.7million. The Acquisitionsare subject to customary
closing conditions, including with respect to financing and regulatory
The net proceeds from the offering of units are expected to be used by the
REIT, along with the issuance of Class B limited partnership units of PRO REIT
Limited Partnership to certain property vendors ("Class B LP Units"), cash on
hand, an assumed mortgage, a new mortgage, and a revolving credit facility to
be established, to fund the purchase of the Acquisitions. The REIT also
intends to use a portion of the net proceeds to repay existing indebtedness
and for general trust and working capital purposes.
The Offering is expected to close in early November 2013 and is subject to
usual closing conditions. For more information on the Offering and the
Acquisitions, please see the REIT's preliminary short form prospectus.
Issuance of Class B LP Units to Certain Vendors
Vendors of certain of the properties that PROREIT intends to acquire have
agreed to accept approximately $5.6million of Class B LP Units as partial
consideration for the sale of such properties. The Class B LP Units are
economically equivalent to and exchangeable for Units on a one-for-one basis,
and will be accompanied by special voting units that provide their holder with
equivalent voting rights to holders of Units of the REIT. The Class B LP Units
will be issued upon the closing of the acquisition of the applicable
properties at the price that the Units are offered to the public pursuant to
the Offering (the "Offering Price"). The Class B LP Units will be issued on a
private placement basis, which is subject to regulatory approvals, including
the approval of the TSX Venture Exchange. The vendors that will receive Class
B LP Units have agreed that such units will be subject to a hold period of 180
days following the closing of the relevant Acquisitions, and are all dealing
at arm's length with the REIT.
Immediately following the closing of the Offering and the Acquisitions,
members of management, the board of trustees, and certain vendors are expected
to hold a 24.7% equity interest in the REIT.
Mr. Beckerleg concluded: "While equity markets have gone through a recent
period of uncertainty, I believe investors realize that high quality
commercial real estate is a sound investment choice, offering income and
growth potential. We are pleased with the steps that have been taken over the
last few months to strengthen PROREIT's Offering, which we believe is
demonstrated by the significant support and investment provided by our
PROREIT is managed by President and CEO James W. Beckerleg and CFO Gordon G.
Lawlor, accompanied by an experienced senior management team with knowledge
and relationships in the REIT's target markets. Messrs. Beckerleg and Lawlor
possess, in aggregate, over 50years of experience in acquiring, managing and
financing Canadian real estate, totaling approximately $4.2billion of
commercial real estate transactions.
Most recently (from May2010 until March2012), the REIT's management team
held senior management positions with CANMARC Real Estate Investment Trust
("CANMARC"), a publicly-traded REIT with a nationally diversified portfolio of
115 commercial properties totalling 9.4 million square feet of GLA, including
a significant portfolio in Eastern Canada. CANMARC was ultimately acquired by
Cominar Real Estate Investment Trust ("Cominar") in March2012, generating a
compounded annualized total return of approximately 43% for CANMARC's
The REIT's management team has an extensive network of relationships and
contacts in the Canadian real estate industry, with particular experience
within the REIT's target markets, which management believes will assist in the
A preliminary prospectus containing important information relating to the
securities has been filed with securities commissions or similar authorities
in each of the provinces of Canada. The preliminary prospectus is still
subject to completion or amendment. Copies of the preliminary prospectus are
available on SEDAR at www.sedar.com under the REIT's profile. There will not
be any sale or any acceptance of an offer to buy the securities until a
receipt for the final prospectus has been issued.
The securities offered have not and will not be registered under the United
States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any
U.S. State securities laws and may not be offered or sold, directly or
indirectly, within the United States or its territories or possessions or to
or for the account of any U.S. person (as defined in Regulation S under the
U.S. Securities Act) other than pursuant to an available exemption from the
registration requirements of the U.S. Securities Act. This press release does
not constitute an offer to sell or a solicitation of an offer to buy any such
securities within the United States, or its territories or possessions, or to
or for the account of any U.S. person.
PROREIT is an unincorporated open-ended real estate investment trust
established pursuant to a declaration of trust under the laws of the Province
of Ontario. PROREIT was established in March 2013 to own a portfolio of
diversified commercial real estate properties in Canada, with a focus on
primary and secondary markets in Québec, Atlantic Canada and Ontario.
This news release may contain forward-looking information within the meaning
of applicable securities legislation. 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 PROREIT'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.
Forward-looking information contained in this press release includes, without
limitation, statements pertaining to the proposed Offering and the closing of
the acquisitions described in the Prospectus. PROREIT's objectives and
forward-looking statements are based on certain assumptions, including that
(i) PROREIT will receive financing on favourable terms; (ii) the future level
of indebtedness of PROREIT and its future growth potential will remain
consistent with PROREIT's current expectations; (iii) there will be no changes
to tax laws adversely affecting PROREIT's financing capacity or operations;
(iv) the impact of the current economic climate and the current global
financial conditions on PROREIT's operations, including its financing capacity
and asset value, will remain consistent with PROREIT's current expectations;
(v) the performance of PROREIT's investments in Canada will proceed on a basis
consistent with PROREIT's current expectations; and (vi) capital markets will
provide PROREIT with readily available access to equity and/or debt.
The forward-looking statements contained in this news release are expressly
qualified in their entirety by this cautionary statement. All forward-looking
statements in this press release are made as of the date of this press
release. PROREIT does not undertake to update any such forward-looking
information whether as a result of new information, future events or
otherwise, except as required by law.
Additional information about these assumptions and risks and uncertainties is
contained in PROREIT's preliminary prospectus dated October 22, 2013 under
"Risk Factors", which is available on SEDAR at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
SOURCE Pro Real Estate Investment Trust
PRO Real Estate Investment Trust James W. Beckerleg President and Chief
Executive Officer 514-933-9552
PRO Real Estate Investment Trust Gordon G. Lawlor, CA Chief Financial Officer
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-0- Oct/23/2013 17:29 GMT
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