PureIndustrial Real Estate Trust struck deals to buy income-producingproperty portfolios in Alberta's core markets for roughly C$171.1 million andin the Southeastern U.S. for about US$81.0 million, and kicked off the fourthphase of its industrial park development project in Vancouver.
To help fund the acquisitions and development project, thecompany also launched a bought-deal offering of 23,370,000 trust units atC$5.35 apiece for roughly C$125 million in gross proceeds. The offering alsocarries a 30-day overallotment option for the underwriters to buy up to3,505,500 additional units. The syndicate of underwriters is ledby BMO Nesbitt Burns Inc. and RBC Dominion Securities Inc.
The proceeds from the offering, set to close on or aboutOct. 13, will also go toward new acquisitions and general trust purposes.
The Alberta portfolio comprises four single-tenant and fourmultitenant industrial facilities with a gross leasable area of 1.2 millionsquare feet in prime business parks in Calgary and Edmonton. The portfolio isleased to international, national and regional tenants with a 5.03-yearweighted average lease term.
Pure Industrial is buying the Alberta portfolio fromArtis Real Estate InvestmentTrust, which was rumored in late September to be the sale of roughly C$300million worth of retail and industrial properties in the oil-producingprovince. The roughly C$171.1 million purchase price, which represents a 6.3%going-in cap rate, will also be funded with an estimated C$86.6 million in newand assumed mortgage financing.
The Southeastern U.S. portfolio, meanwhile, comprises sixproperties covering about 1.6 million square feet of gross leasable area incore markets. Pure Industrial is also funding the roughly US$81.0 millionpurchase price, which represents a 6.9% going-in cap rate, with US$40.5 millionin new mortgage financing. It expects to close on the transaction during thefourth quarter.
The Vancouver project involves the development of a330,000-square-foot distribution facility in Richmond, British Columbia, withan estimated cost of C$40.0 million. Pure Industrial is working to obtain aC$22.3 million loan to help fund the development, which is ongoing.
Pure Industrial is also funding the Alberta and U.S.acquisitions, as well as the Vancouver development, with its existing workingcapital.
Overall, Pure Industrial plans to place roughly C$139.7million in new and assumed mortgage financing with respect to the acquisitions,accounting for 50.4% of the total purchase price, with a 2.9% weighted averageinterest rate and a five-year weighted average term to maturity. The companyestimates its debt-to-gross book value to be about 45.5% pro forma for theacquisitions, the Vancouver project and the offering.
Pure Industrial expects the acquisitions and the Vancouverproject to expand its gross leasable area to 3.1 million square feet.