Summit Industrial Income REIT entered into a joint-venture partnership with construction and engineering firm Urbacon Ltd to develop and own data centers across Canada.
Summit will make a C$15 million investment and assume 50% of the construction debt of Urbacon's Data Centre One property in the Barker Business Park Digital Campus in Richmond Hill, Ontario. DC1 is 50% leased with a 15-year term and is the first of five data centers to be built on land Urbacon owns on the Barker campus.
Summit extended a three-year C$14.3 million working-capital loan to Urbacon, primarily for the development of additional data centers on the Barker campus and in other markets. Summit has exclusive rights to participate in Urbacon's future Canadian data center developments.
Summit also extended a C$15.8 million mezzanine loan to Urbacon with which Urbacon will purchase its partner's 50% interest in a newly developed data center in downtown Montreal. Summit has the option to convert the loan into a 50% interest in the nine-story property, which has 16 MW of power available.
Altogether, Summit's C$45 million initial cash investment in Urbacon's data center program is expected to produce an accretive yield of between 8% and 10%.
The investment, as well as C$138 million of other recent acquisitions, means Summit has fully invested the proceeds of its C$103.5 million equity offering completed Dec. 13, Summit CEO Paul Dykeman said in a release.