TORONTO,
July 8, 2013 /CNW/ - Firm
Capital Property Trust ("FCPT" or the "Trust") (TSXV:
FCD.UN) is pleased to announce that the Trust has contracted to
purchase a 50% participation in a property portfolio acquisition.
The total acquisition of 25 industrial buildings located in
Montreal is $48.2 million, excluding transaction costs (the
"Portfolio"). The acquisition is still subject to certain
due diligence conditions.
ACQUISITION DETAILS:
The Portfolio is comprised of 1,029,898 square feet located in
Montreal. The Portfolio consists
of seventeen multi-tenant and eight single-tenant industrial
buildings. The Portfolio has a total of 90 tenants. The Portfolio
is in proximity to Pierre Elliott Trudeau Airport as well as the
Trans-Canada Highway. The Portfolio is approximately 90%
occupied.
The acquisition is an off market transaction
originated and structured by the Trust's asset manager ("Asset
Manager"), Firm Capital Realty Partners Inc. 100% of the
Portfolio is being acquired for $48.2
million, before transaction costs, or under $47 per square foot. The Portfolio will be
financed with a new first mortgage to be provided by a Canadian
Chartered Bank for proceeds of approximately $32 million. Subject to timing, the closing may
occur by utilizing a bridge acquisition facility, which will
subsequently be replaced with long term bank financing. Long term
financing interest rates are currently in the 3.75% and 4.5% range
depending if the term is five or ten years. 50% of the Portfolio
will be acquired by the Trust, while the remaining 50% will be
acquired by an entity associated with the Asset Manager that
consists predominantly of senior management and certain trustees of
FCPT. The joint acquisition by the parties associated with the
Asset Manager confirms the alignment of interests and is in
accordance with the Trust's stated business strategy of completing
joint acquisitions with experienced real estate industry
professionals. The Portfolio acquisition is expected to close on or
around July 24, 2013.
NON-BROKERED PRIVATE PLACEMENT
The funding required by the Trust for its 50% interest in the
Portfolio will come from a combination of existing cash resources
and a Board of Trustees approved non-brokered private placement of
up to $8.0 million at $5.10 per trust unit. Closing of the non-brokered
private placement will occur on or about July 24, 2013.
ACQUISITION IMPACT ON THE TRUST:
Pro-forma the Portfolio acquisition and financing activity, the
Trust's Adjusted Funds From Operations ("AFFO") payout ratio
is anticipated to be below 80% (assuming 10 year mortgage debt
interest rates) and Debt to Gross Book Value of approximately 55%.
The Trust will increase the size of its current portfolio to
approximately $58 million and will
grow to 30 properties. In addition, the acquisition adds
diversification through the addition of the industrial asset class
to the existing retail and medical office portfolio.
ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value
for Unitholders, through capital preservation and disciplined
investing to achieve stable distributable income. In partnership
with management and industry leaders, The Trust plan is to co-own a
diversified property portfolio of multi-residential, flex
industrial, net lease convenience retail, and core service provider
professional space. In addition to stand alone accretive
acquisitions, the Trust will make joint acquisitions with strong
financial partners and acquisitions of partial interests from
existing ownership groups, in a manner that provides liquidity to
those selling owners and professional management for those
remaining as partners. Firm Capital Realty Partners Inc.,
through a structure focused on an alignment of interests with the
Trust, will source, syndicate and participate in investments.
FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some
cases, forward-looking statements can be identified by the use of
words such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential",
"continue", and by discussions of strategies that involve risks and
uncertainties. The forward-looking statements are based on certain
key expectations and assumptions made by the Trust regarding, among
other things, the use of the net proceeds from the Offering, the
closing of the Offering, and the closing of the Acquisition. By
their nature, forward-looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, projections and various future events will not occur.
Although management of the Trust believes that the expectations
reflected in the forward-looking statements are reasonable, there
can be no assurance that future results, levels of activity,
performance or achievements will occur as anticipated. Neither the
Trust nor any other person assumes responsibility for the accuracy
and completeness of any forward-looking statements, and no one has
any obligation to update or revise any forward-looking statement,
whether as a result of new information, future events or such other
factors which affect this information, except as required by
law.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy, which may be made
only by means of a prospectus, nor shall there be any sale of the
Units in any state, province or other jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under securities laws of any such state, province
or other jurisdiction. The Units of the Firm Capital Property Trust
have not been, and will not be registered under the U.S. Securities
Act of 1933, as amended, and may not be offered, sold or delivered
in the United States absent
registration or an application for exemption from the registration
requirements of U.S. securities laws.
SOURCE Firm Capital Property Trust