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TORONTO, Oct. 31, 2024 /CNW/ – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (“Automotive Properties REIT” or the “REIT”) announced today that it has entered into two separate agreements to acquire a total of three properties (the “Acquisitions”). The first agreement is to acquire a Rivian-tenanted automotive property in Tampa, Florida (the “Tampa Property”) for a purchase price of approximately US$13.5 million. The second agreement is to acquire two heavy construction equipment dealership properties in the Greater Montreal Area (the “Greater Montreal Properties”) for a purchase price of approximately $25.4 million. The additions of the Tampa Property and the Greater Montreal Properties are expected to be accretive to the REIT’s Adjusted Funds from Operations (“AFFO”)¹ per unit.
“Our acquisition of this Rivian property in Tampa will mark our targeted entry into the U.S. market and increase our exposure to the electric vehicle retail and service market in North America. Our acquisition of these two heavy construction equipment dealership properties in Greater Montreal will mark our entry into a new industry vertical that has similar characteristics to automotive dealerships, including the essential nature of their business,” said Milton Lamb, President and CEO of Automotive Properties REIT. “Upon closing, these acquisitions will enhance the tenant and geographic diversification within our portfolio, and are expected to drive AFFO.”
The Tampa Property is a 25,000 square-foot Rivian sales, delivery and service facility that is situated on 2.75 acres of land located at 701 N. Dale Mabry Highway in Tampa, Florida, in close proximity to Interstate 275 and the Tampa International Airport. The Tampa Property is tenanted by Rivian LLC, which recently completed a major renovation to the facility, under a long term, triple-net lease that includes contractual fixed annual rent increases with renewal options. Rivian LLC is a leading American developer and manufacturer of electric vehicles and accessories that completed its US$13.7 billion initial public offering on the NASDAQ stock exchange in November 2021. The REIT expects to close the Tampa Property acquisition in the first quarter of 2025, subject to customary closing conditions.
The Greater Montreal Properties consist of a 31,000 square-foot Brandt Tractor Ltd. facility with a John Deere heavy construction equipment dealership that is situated on 6.6 acres of land located at 3855 Boulevard Matte in Brossard, Québec, and a 28,611 square-foot Strongco heavy construction equipment dealership (Volvo, and other equipment brands) that is situated on 5.1 acres of land located at 72 Chemin du Tremblay in Boucherville, Québec. The REIT expects to close the Greater Montreal Properties acquisition in December 2024, subject to customary closing conditions.
The triple-net lease on the Brandt Tractor Ltd. heavy construction equipment dealership property, is a mid-term lease, and includes contractual bi-annual fixed rent increases. Brandt Tractor Ltd. is the world’s largest John Deere construction and forestry dealer and a division of the Brandt Group of Companies, a privately-owned, Canadian based manufacturing and distribution company that was founded in 1932 and serves customers in industries such as agriculture, construction, forestry, rail, mining, steel, transportation, material handling, and energy in Canada, the United States, Australia, and New Zealand.
The Strongco heavy construction equipment dealership property is tenanted pursuant to a mid-term lease, and includes contractual annual fixed rent increases. Strongco is owned by Nors, S.A. Founded in 1933, Nors is a privately-owned, Portuguese based company that sells, rents and services construction, infrastructure, mining and forestry equipment, trucks, busses, cars and marine and industrial engines in 16 countries in four continents.
The REIT expects to fund the respective purchase prices of the Acquisitions with cash on hand and by drawing on its revolving credit facilities which had been paid down in full from the net proceeds of the previously announced closing of the sale of the REIT’s Markham, Ontario dealership property on October 1, 2024.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT’s portfolio currently consists of 76 income-producing commercial properties, representing approximately 2.8 million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
(1) Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of earnings performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT’s ability to pay distributions from earnings. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT’s Management Discussion & Analysis (“MD&A”) most recently filed on SEDAR+ for further discussion of this non-IFRS financial measure.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events and in some cases can be identified by such terms as “will”, “should”, “anticipates”, “could” and “expects”. Forward-looking information includes statements regarding the financial impact of the Acquisitions on the REIT’s AFFO per unit and the expected timing of closing the Acquisitions. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT’s control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risks & Uncertainties, Critical Judgments & Estimates” in the REIT’s Management’s Discussion & Analysis (“MD&A”) for the three and six-month periods ended June 30, 2024 and in the REIT’s annual information form dated March 7, 2024, which are available on SEDAR+ (www.sedarplus.ca) and the REIT’s website (www.automotivepropertiesreit.ca). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.
SOURCE Automotive Properties Real Estate Investment Trust
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