Charter Real Estate Investment Trust Announces Agreement to Acquire a Portfolio of Western Canadian Properties
Press Release
Charter Real Estate Investment Trust (“Charter REIT”)(TSX VENTURE:CHR.UN) is pleased to announce that it has entered into an agreement to purchase a portfolio of triple net leased properties and development properties located primarily in Western Canada (the “Acquisition”). The purchase price for the portfolio is approximately $80 million before closing costs and is subject to customary closing adjustments.
The Acquisition
The triple net properties comprise approximately 632,000 square feet of gross leaseable area (“GLA”), and are 100% leased. There are also five development properties in the portfolio, of which four, comprising approximately 60,000 square feet of GLA, are subject to a lease or an offer to lease. Of these four, one is currently under construction, while construction is expected to begin shortly on the other three. The fifth development property (approximately 10,000 square feet of potential GLA) is land held for future development. Once the four initial development properties are completed, which is expected to be the second quarter of 2008, approximately 64% of the portfolio, based on net operating income, will be retail uses while the balance of the portfolio would be classified as industrial properties. On an unlevered basis after completion of the contemplated development, the portfolio is expected to yield between 7.75% and 8.00% before closing costs.
Charter REIT expects to finance the Acquisition by drawing down on its acquisition facility (which is expected to be available to Charter REIT following closing of the acquisition of Cornwall Square Shopping Centre, as described in the press release dated June 29, 2007), by the assumption of existing mortgages and by entering into new debt arrangements. The closing of the Acquisition is subject to significant conditions, including the completion of due diligence and environmental investigations with respect to the properties that must be satisfactory to Charter REIT in its sole discretion, and there can be no assurance that the Acquisition will be completed. The Acquisition is also subject to approval by the TSX Venture Exchange in accordance with the applicable policies of the exchange. If the conditions under the purchase agreement are fulfilled, the Acquisition is scheduled to close on or about October 8, 2007.
Charter REIT
Charter Real Estate Investment Trust is an open-end real estate investment trust established under the laws of the Province of Ontario. Charter REIT is focused on acquiring a portfolio of retail and mixed-use retail real estate comprised of stable cash flow and value-add properties from both primary and secondary markets throughout Canada, with the principal goal of generating a reliable and growing yield for its investors. Charter REIT owns four commercial real estate properties located in Ontario and Quebec.
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