PROREIT Completes Acquisition of Industrial Properties
PRO Real Estate Investment Trust (PROREIT) has made a noteworthy step in its growth strategy with the acquisition of a portfolio of six high-quality industrial properties. This strategic move enhances PROREIT's position in the commercial real estate market and underlines its commitment to expanding its footprint in prime locations across Canada.
Details of the Transaction
The acquisition, which was finalized for a total price of $96.5 million, brings approximately 678,177 square feet of gross leasable area (GLA) into PROREIT's inventory. The deal, a significant milestone for the REIT, was executed with Parkit Enterprise Inc., representing a purchase price of around $142 per square foot.
Payment Structure of the Acquisition
To fund this acquisition, PROREIT utilized a combination of cash and equity. Approximately $40 million of the purchase price was satisfied by issuing units to Parkit, valuing these units at $6.20 each. This issuance included 3,776,613 trust units along with 2,675,000 Class B LP Units. These Class B Units can be exchanged for trust units, giving Parkit a vested interest in the future performance of PROREIT.
Investor Rights Agreement
On closing the transaction, PROREIT forged an investor rights agreement with Parkit, which includes various provisions such as lock-up and standstill arrangements. Importantly, this agreement affords Parkit the right to nominate a trustee to PROREIT's board, strengthening the collaboration between the two entities. Steven Scott, the current Chairman of Parkit's board, has been appointed as the initial Parkit nominee to PROREIT's board.
Financial Overview of the Acquisition
The financing component of the $96.5 million acquisition is supported by a new $63 million secured credit facility. This non-revolving credit facility, set for a term of three years with options for two one-year renewals, is structured at a competitive fixed swap rate of 4.54%. Funds from this facility are also being allocated towards repayment of existing debts and general business needs.
About PRO Real Estate Investment Trust
Founded in 2013, PROREIT is recognized as an unincorporated open-ended real estate investment trust, firmly rooted in the Province of Ontario. It boasts a diversified and high-quality portfolio focused primarily on commercial properties, thereby establishing a commanding presence in key secondary markets across Canada. PROREIT's strategy emphasizes the acquisition of properties with development potential, further solidifying its industry footprint.
Future Outlook
This acquisition positions PROREIT well for future growth as it capitalizes on strong industrial demand, particularly in secondary Canadian markets. With a growing portfolio, the trust aims to leverage its properties' value while maximizing returns for its investors. PROREIT's strategic focus remains on enhancing shareholder value through prudent management and targeted acquisitions.
Frequently Asked Questions
What properties did PROREIT acquire?
PROREIT acquired a portfolio of six industrial properties totaling 678,177 square feet of GLA.
How much did the acquisition cost?
The acquisition was completed for a total price of $96.5 million.
Who did PROREIT acquire these properties from?
The properties were acquired from Parkit Enterprise Inc.
What financing options did PROREIT utilize for this acquisition?
PROREIT utilized a combination of cash, an equity issuance, and a secured credit facility to fund the acquisition.
How long has PROREIT been operational?
PROREIT was founded in 2013 and has been actively involved in real estate investments since then.
