Automotive Properties REIT Announces $101.3 Million Ottawa and Kingston Property Portfolio Acquisition

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Automotive Properties REIT Announces $101.3 Million Ottawa and Kingston Property Portfolio Acquisition

Canada NewsWire

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– Acquisition marks the REIT's entry into the Ottawa and Kingston, Ontario markets, and further tenant diversification in the REITs portfolio –    

TORONTO, Dec. 7, 2018 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the "REIT") announced today that is has entered into an agreement to acquire a portfolio of 11 properties from a privately-held automotive dealership group and subject to a leaseback, for a combined purchase price of approximately $101.3 million (the "Acquisition"). The portfolio includes six properties that are exclusively occupied by nine automotive dealerships and five properties designated for ancillary dealership services, representing a total gross leasable area ("GLA") of approximately 303,817 square feet located on approximately 29.7 acres. Upon closing of the Acquisition, the REIT's GLA will increase by approximately 18% and the portfolio will consist of 54 income-producing properties. Nine of the properties are located in the Ottawa, Ontario metropolitan area and two properties are located in Kingston, Ontario. Ottawa and Kingston represent two new metropolitan markets for the REIT.

"This is our largest property acquisition to date and we look forward to adding a major new tenant group to our portfolio," said Milton Lamb, President and CEO of the REIT. "The Acquisition marks our entry into the Ottawa market, effectively positioning us in another major Canadian metropolitan area. In addition to enhancing the REIT's geographic and tenant diversification, we are adding representation of two more major automotive brands to our portfolio – Subaru and Lexus – bringing the total number of brands represented in our property portfolio to 31."  

Upon closing of the Acquisition, the respective operators of each of the automotive dealerships and the related non-retail dealership properties will enter into long-term, triple-net leases with the REIT with terms ranging from 17 to 20 years. The leases include contractual 1.0% annual rent increases for the first five years of the lease terms. Thereafter, the annual rents will increase in accordance with the Ontario Consumer Price Index. The leases will be indemnified by MAG Holdings LP (operating as Mierins Automotive Group) a private entity that owns and operates 10 dealerships.

Automotive Dealerships(1) 

Brand

Address

Year Built

Lease
Term

GLA of dealership
(sq. ft.)

Acreage

Elite BMW

1040 Ogilvie Rd., Ottawa

2016

18 years

48,366

3.23

Civic Motors (Honda)

1171 St. Laurent Blvd., Ottawa

2002
(Reno 2012)

18 years

30,000

1.38

Camco Acura

1475 Carling Ave., Ottawa

2016

19 years

45,879

2.14

Mini Ottawa

1501 Carling Ave., Ottawa

2015


30,000

1.75

Mendes Toyota

1811 Bank St., Ottawa

2013

17 years

57,152

3.22

Ogilvie Subaru

1056 Parisien St., Ottawa

2014

19 years

13,533

1.40

Orleans Honda

2055 Mer Bleve Rd., Ottawa

2015

20 years

24,531

3.18

Kingston Toyota

1911 Bath Rd., Kingston

2005

20 years

25,130

2.68

Lexus of Kingston

1917 Bath Rd., Kingston

2005

20 years

16,226

1.78

(1)

Excludes five non-retail dealership properties and GLA that are included in the Acquisition (to be used for current and future ancillary purposes) on 8.95 acres.

 

The REIT will fund the Acquisition purchase price through draws on its credit facilities. In conjunction with the Acquisition, two of the REIT's senior lenders have agreed to increase the amount available under the REIT's credit facilities by $110.0 million, secured by properties included in the Acquisition and two other previously unencumbered properties. The REIT has completed its due diligence in connection with the Acquisition and expects to close the Acquisition in December 2018, subject to customary closing conditions and approval by the Competition Bureau.

About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio currently consists of 43 income-producing commercial properties, representing approximately 1.7 million square feet of gross leasable area, and one development property, in metropolitan markets across Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.

Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will", "intends", "anticipates" and "expected". Forward-looking information includes statements regarding the Acquisition. 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. Such risks and uncertainties include, but are not limited to, the failure to successfully close the Acquisition on the terms described, or at all, and the factors discussed under "Risks and Uncertainties" in the REIT's management's discussion and analysis ("MD&A") most recently filed on SEDAR (www.sedar.com) and in the REIT's current annual information form, which is available on SEDAR. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks as of the date of this news release.

SOURCE Automotive Properties Real Estate Investment Trust

View original content: http://www.newswire.ca/en/releases/archive/December2018/07/c7582.html

Copyright CNW Group 2018

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