Nexus Industrial REIT Sells Legacy Properties and Expands Operations
Nexus Industrial REIT Strengthens Focus on Industrial Real Estate
Nexus Industrial REIT is making waves in the market with its recent strategic moves. The company has officially sold a 50% interest in six office buildings, significantly solidifying its focus on industrial assets. This sale marks an important milestone, reinforcing Nexus's position as a leading industrial REIT in Canada.
The Legacy Office Properties Sale
The properties sold, totaling 143,223 square feet, were located in Montreal. Kelly Hanczyk, the CEO of Nexus Industrial REIT, expressed satisfaction over this decision, stating, “The sale of these legacy office buildings furthers our strategy as a Canada-focused pure-play industrial REIT.” With industrial assets now contributing 94% of their net operating income (NOI) on a proforma basis, this transition highlights an intensified focus on industrial real estate. The company aims to continue this trend by disposing of remaining legacy office and retail portfolios, targeting total asset sales of approximately $110 million by year-end.
Details of The Disposed Properties
Here are the properties detailed in the recent announcement:
- 353 rue St-Nicolas - 16,946 sq. ft.
- 410 rue St-Nicolas - 77,466 sq. ft.
- 360 rue Notre-Dame Ouest - 14,810 sq. ft.
- 321 rue de la Commune - 5,751 sq. ft.
- 329 rue de la Commune - 10,514 sq. ft.
- 127, 137 & 145 rue St-Pierre - 17,736 sq. ft.
The net proceeds from this substantial sale are expected to be allocated towards repaying existing debts tied to the sold properties, thus strengthening Nexus's financial posture.
Latest Lease Update
Nexus is also excited to announce significant leasing activity regarding its Titan Park industrial property located at 905 Park St., Regina. The company successfully leased out 109,000 square feet of space, with occupancy scheduled for February. This deal is a 10-year lease, which will include annual rent escalations, showcasing the demand for high-quality industrial spaces in the region.
A Look at Titan Park
Completed recently in April with a total development cost of $48 million, Titan Park is set to deliver an impressive stabilized NOI of $3.8 million annually. This expected yield exceeds Nexus's initial investment forecasts, indicating strong performance potential moving forward.
Credit Facility Extension for Future Growth
In further strategic moves, Nexus has extended its $70 million credit facility with ATB Financial, thereby ensuring continued financial flexibility and support for general corporate operations. This secured, committed revolving line of credit is set to mature in September 2025 and comes with interest tied to short-term rates, favorable for future financial planning.
Expanding the Portfolio
Adding to its robust strategy, Nexus is focused on expanding its holdings and management of industrial properties across Canada. With a current impressive portfolio comprising 113 properties and approximately 13 million square feet of gross leasable area, Nexus stands firmly in a growth trajectory. Their strategy emphasizes acquiring high-potential industrial properties located in both major and secondary markets.
Frequently Asked Questions
What prompted Nexus Industrial REIT to sell its office properties?
The sale aligns with Nexus's strategy to concentrate on industrial assets, which now comprise 94% of their NOI.
What are the plans for the proceeds from the property sale?
The proceeds will be used primarily to repay existing debts associated with the sold properties.
When is occupancy expected for the recently leased industrial property?
Occupancy for the Titan Park industrial property is scheduled for February 1, 2025.
What financial benefits does the credit facility extension provide for Nexus?
The extension of the credit facility enhances financial stability and flexibility, supporting future growth and operational needs.
How does this move affect Nexus's overall portfolio?
Nexus aims to enhance unitholder value by expanding its industrial asset portfolio, fostering growth, and rebuilding strength in the real estate sector.
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