TORONTO, May 12, 2014 /CNW/ - Firm Capital Property Trust
("FCPT" or the "Trust"), (TSXV: FCD.UN) is pleased to
announce it has entered into a binding agreement to acquire a 70%
interest in a 27 property retail portfolio with the balance being
acquired by an entity related to the Trust. The purchase price for
the entire portfolio is approximately $32.7
million (excluding closing costs and one-time adjustments),
of which the Trust will pay approximately $22.9 million (excluding closing costs and
one-time adjustments) for its 70% participation. The acquisition is
expected to close during Q2/2014.
ACQUISITION DETAILS:
The Portfolio is comprised of
234,768 square feet of gross leasable area across Canada with the majority of the portfolio
being located in Ontario. The
Portfolio has a weighted average lease term of 3.4 years and a
total of 50 tenants with the largest being PPG Industries
Inc.(PPG:NYSE) an investment grade rated entity accounting for 32%
of Net Operating Income ("NOI"), operating predominantly
under the Dulux Paints brand. The Portfolio is approximately 95%
occupied with no significant short term lease maturities.
FINANCIAL IMPACT:
The funding required by the Trust
for its 70% interest in the Portfolio will be sourced from a
combination of existing cash, the revolving credit facility, the
assumption of existing mortgage debt and the arrangement of new
first mortgage financing. The assumption of existing mortgage debt
and the arrangement of new first mortgage financing represents a
58% loan-to-purchase price. Pro forma closing the Trust expects the
acquisition to reduce the AFFO payout ratio to approximately 75% on
an annualized basis, well below the Trust's targeted AFFO payout
ratio of 85%, while increasing our Debt/Gross Book Value
("GBV") ratio nominally to 56%, which continues to be below
the Trust's 60% debt/GBV target. Going forward PPG Industries would
be the Trust's largest tenant at 9% of NOI; however lease
maturities would be spread over 12 locations.
PORTFOLIO HIGHLIGHTS:
Pro forma the acquisition, the
Trust's investment portfolio will be well diversified across
geographies and asset classes. 54% of NOI will come from
Ontario, followed by Quebec (31%), Nova
Scotia (10%) and British
Columbia, Alberta,
Manitoba and New Brunswick (collectively 5%). 60% of NOI
will come from our Net Lease Convenience Retail, followed by
Industrial (31%) and Core Service Provider Office (9%).
For additional information, please visit the Trust's website at
www.firmcapital.com
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's 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