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Pure Industrial to acquire Texas distribution center for C$61M

Pure Industrial Real Estate Trust reached a roughly C$61.4 million deal to buy a 657,043-square-foot distribution center in Fort Worth, Texas, reflecting a stabilized capitalization rate of about 5.2%.

The company said the facility is 75% leased to a "large national apparel company" for a term of 10.5 years. It will use existing cash on hand and proceeds from its unsecured line of credit to fund the transaction, which it expects to close Aug. 30, 2018.

SNL Image
Fort Worth, Texas, distribution center
Source: Pure Industrial Real Estate Trust

Pure Industrial also agreed to buy the 287,338-square-foot distribution center at 2200 Rue de l'Aviation in Montreal for C$32.5 million, representing a roughly 6.8% stabilized capitalization rate. The facility is fully leased to Cardinal Health Canada Inc. with a remaining term of 10 years. The transaction is slated to close in January 2018 and will be funded with C$22.8 million of assumed mortgage and existing cash on hand.

Additionally, the company paid about C$32.0 million to buy another Fort Worth distribution center that is newly constructed and contains 301,500 square feet, reflecting a roughly 5.2% stabilized capitalization rate. It is 86% leased to two investment-grade tenants with a weighted average lease term of 8.1 years. In McDonough, Georgia, Pure Industrial paid C$46.7 million to acquire the brand new, 760,256-square-foot distribution facility at 150 Distribution Dr., which it projects will have a stabilized yield on cost of about 6.0% once leased. The company funded both completed acquisitions with existing cash on hand and proceeds from its unsecured line of credit.

Pure Industrial also disposed of certain noncore assets, including the 212,110-square-foot multitenant asset at 75-77 Fima Crescent in Etobicoke, Ontario, for C$14.9 million, and the 33,479-square-foot single-tenant asset at 10 Whitmore Rd. in Vaughan, Ontario, for C$5.9 million. A C$1.7 million mortgage was discharged at the time of sale of the Vaughan property.

The company also sold the 20,185-square-foot single-tenant asset at 90 Park Lane in Winnipeg, Manitoba, for C$1.9 million.