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Summit Industrial to buy 5 assets for C$127M, launches C$100M unit offering

Summit Industrial Income REIT struck deals to acquire a five-property Canadian warehouse and logistics portfolio for about C$127 million and launched a C$100 million bought-deal unit offering to partially fund the purchases.

The properties are in Markham and Burlington, Ontario, and Calgary, and have a total gross leasable area of 798,673 square feet.

The Canadian light industrial property trust agreed to pay C$70.0 million for the two single-tenant Markham properties, which total 321,028 square feet and are fully occupied. The consideration includes an assumed C$8.5 million, 14.8-year mortgage carrying a 4.34% interest rate. The company expects to close the purchase on or before the end of June.

The portfolio also includes a 250,000-square-foot, single-tenant industrial property in Burlington, for which the company agreed to pay C$28.1 million in cash. The property includes 7.5 acres of additional land with exposure to the Queen Elizabeth Way that can accommodate the development of a new building covering up to 160,000 square feet. The purchase is expected to close on or before the end of June.

In Calgary, the company is acquiring for approximately C$29.6 million in cash a new class A, two-building multitenant logistics center totaling 227,645 square feet on land leased from the Calgary Airport Authority with a remaining 54-year term.

The property developer has an agreement with the airport authority involving about 60 acres of vacant land at the airport, of which the first phase consisting of the two buildings being acquired represents 13.2 acres. Closing is scheduled to take place on or before July 15.

The bought-deal offering comprises 11,565,000 units, to be issued at C$8.65 apiece for roughly C$100 million in gross proceeds. The offering, slated to close on or about June 15, carries a 30-day overallotment option for the underwriters to acquire up to 1,734,750 additional units.

Summit plans to use the net proceeds and cash from its credit lines, along with the assumed C$8.5 million mortgage primarily to fund the acquisitions. The remaining proceeds will go toward debt repayment, future acquisitions and general trust purposes.

The syndicate of underwriters for the offering is led by BMO Capital Markets.