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BTB REIT plans C$25M offering of new units for C$73M acquisition of 3 properties

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BTB REIT plans C$25M offering of new units for C$73M acquisition of 3 properties

BTB REIT signed a roughly C$25 million bought-deal agreement to issue new trust units to help fund its potential C$73.2 million acquisition of three properties in Canada.

Aside from the public offering of 5,435,000 trust units, the Canadian real estate investment trust granted underwriters a 30-day overallotment option for up to an additional 815,250 units. The new trust units will be issued at C$4.60 apiece.

For the first two properties, the REIT is finalizing due diligence for the 1411 Crescent St. mixed-use office and 1325 Saint-Catherine St. West retail property in Montreal. The properties, which are adjacent to each other, will be bought for C$30.2 million at a normalized cap rate of 6.75%. The acquisition of the properties covering roughly 31,000 square feet is expected to close within four weeks from May 30.

The REIT is also in the final due diligence stage for Mega Centre Rive-Sud in Lévis, Québec. The roughly 207,000-square-foot strip mall will be bought for C$43 million, and the deal is expected to close in six weeks. The property is 99.3% occupied, with Walmart as the largest tenant.

Both acquisitions will be funded by new mortgages on the respective properties and with proceeds from the bought-deal offering. Completion of the deals is also subject to confirmatory due diligence and customary closing conditions.

Concurrently, BTB REIT is buying the 25% stake it does not already own in Complexe Lebourgneuf Phase 2 in Quebec City for C$7.5 million at a 6.75% cap rate. The office deal will be carried out through its C$4.68-per-unit issuance of 532,265 exchangeable limited partnership units to the seller.