True North Commercial Real Estate Investment Trust Bolsters Income Profile Stability with the Acquisition of a 99% Federally Leased Property with a 6.5-Year Lease Term in Downtown Ottawa
174,000 square feet, 98% occupancy, LEED Gold certified
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TORONTO, July 14, 2022 /CNW/ – True North Commercial Real Estate Investment Trust (TSX: TNT.UN) (the “REITs“) is pleased to announce that it has agreed to acquire a 174,000 square foot office building located at 400 Cumberland Street, Ottawa, ON (there “Ottawa Property“).
“We are excited to add this downtown, transit-focused property to our portfolio. The REIT should benefit from increased cash flow through the redeployment of proceeds from the forward sale of 32071 South Fraser Way, Abbotsford, BC a lower-yielding property with a shorter lease term in a higher-yielding property anchored by the federal government of the Canada with a long-term lease.” said Daniel Drimmer, CEO of the REIT. “This transaction demonstrates the REIT’s commitment to strengthening its position in Ottawa with the highest quality tenant Canada and further capitalize operational efficiencies with our existing assets in Downtown Ottawa.”
The purchase price of the Ottawa property is approximately $40.5 million, excluding closing costs. The acquisition is expected to be satisfied by a combination of: (i) first mortgage financing of approximately $30.4 million; and (ii) bridge financing from the REIT’s secured credit facility. Closing is expected to occur on or about August 15, 2022.
The Ottawa property is an 11-story LEED Gold certified office building of approximately 174,000 leasable square feet with 53 underground parking spaces. Overlooking Rideau Street at from Ottawa Byward Market area, Ottawa property is a 5 minute walk to Rideau Station (in the Rideau Center Mall). The Ottawa property has a weighted average remaining lease term of 6.5 years with an occupancy rate of 98%, of which 99% is leased to the federal government of Canada.
About the REIT
The REIT is an unincorporated open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT currently owns and operates a portfolio of 46 properties comprising approximately 4.8 million square feet in selected urban and strategic secondary markets across Canada. The REIT is focused on growing its portfolio primarily through acquisitions in Canada and other jurisdictions where opportunities exist.
Certain statements contained in this press release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purpose of assisting the reader to understand the REIT’s financial performance, financial condition and cash flows as of certain dates and for the periods ending on certain dates and to present information about expectations and management’s current plans for the future, including the successful completion of the acquisition of the Ottawa Property and the financial performance of the REIT resulting from the acquisition of the Ottawa Property, and readers are cautioned that these statements may not be appropriate for other purposes. Forward-looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry, prospects and anticipated events or results, and may include statements regarding the acquisition of Ottawa’s ownership and financial position, business strategy, budgets, projected costs, capital expenditures, financial results, financing rates and costs, taxes, plans and objectives of the REIT or involving the REIT. In some instances, forward-looking information may be identified by terms such as “may”, “could”, “should”, “could”, “should”, “would occur”, “expect”, “plan”. , “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “goal”, “project”, “predict”, “plan”, “potential “, “continue”, “probable”, “program”, or their negative form or other similar expressions concerning matters that are not historical facts.
Forward-looking statements necessarily involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that the expectations, forecasts, predictions, projections or conclusions will not prove to be correct, the assumptions may not be correct and objectives, strategic objectives and priorities may not be achieved. A variety of factors, many of which are beyond the REIT’s control, affect the operations, performance and results of the REIT and its businesses, and could cause actual results, including those related to the acquisition of the Ottawa property, differ materially from actual results or expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks associated with the REIT’s Trust Units (“Units“) and risks relating to the REIT’s annual information form for the year ended December 31, 2021annual report and MD&A under the heading “Risks and Uncertainties” and the risks discussed in the REIT’s documents filed with the Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to carefully consider these and other factors, uncertainties and potential events and not to place undue reliance on any forward-looking statements, as there can be no assurance that actual results will be consistent with such forward-looking statements.
The information contained in forward-looking statements is based on certain important assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments and the REIT’s financial performance resulting from the acquisition of the Ottawa Property, as well as other considerations deemed appropriate in the circumstances, including: the REIT’s ability to complete the acquisition of the Ottawa Property and obtain acceptable mortgage financing; the extent of the impact of the coronavirus (SARS-CoV-2) (“COVID-19[feminine]“) on the REIT’s business, operations and performance, including the performance of its Units; (b) the REIT’s ability to mitigate any impact related to COVID-19; inflation will remain relatively low; interest rates interest will remain stable; conditions in the real estate market, including competition for acquisitions, will be consistent with the current climate; Canadian capital markets will continue to provide the REIT with access to equity and/or securities at reasonable rates when required Starlight Group Property Holdings Inc., or one of its affiliates, will continue its involvement as the REIT’s asset manager pursuant to its current asset management agreement; and risks identified or referenced above, collectively, will not have a material impact on the REIT.Although management considers these assumptions to be based on reasonable information on information currently available nible, they may turn out to be incorrect.
Forward-looking statements made in this press release are dated and relate only to events or information as of the date of this press release. Except as expressly required by applicable law, the REIT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date which statements are made or to reflect the occurrence of unforeseen events.
SOURCE True North Commercial Real Estate Investment Trust
For further information: Daniel Drimmer, CEO, (416) 234-8444; or Tracy Sherren, President and Chief Financial Officer, (416) 234-8444