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Agellan Commercial Real Estate Investment Trust Announces the Closing of Interests in Two Industrial Properties Located in Atlanta, Georgia and Austin, Texas

October 1, 2018

TORONTO--(BUSINESS WIRE)--Oct 1, 2018--Agellan Commercial Real Estate Investment Trust:

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES

Agellan Commercial Real Estate Investment Trust (the “REIT”) (TSX: ACR.UN) announced today that it has completed its previously announced acquisition of a light industrial property located in Northcentral Austin, Texas and a 50% interest in an industrial distribution center in the I-85 South submarket of Atlanta, Georgia (together, the “Acquisitions”).

Atlanta, Georgia

The Newnan Distribution Center comprises approximately 1.9 million square feet of gross leasable area and was acquired for an aggregate purchase price of approximately US$53 million (before closing costs), representing a going-in capitalization rate of approximately 5.5%, and a stabilized capitalization rate of approximately 7.25%.

The REIT, together with a private Canadian-based investor, acquired the property through a strategic partnership, of which the REIT has a 50% interest. The acquisition is consistent with the REIT’s objective of acquiring value-add opportunities with higher returns. The REIT will also provide asset management services to this new partnership. The purchase price for this property was satisfied with cash on hand.

Acquisition Highlights

This property comprises modern warehouse and distribution features, is currently 87% leased to two tenants, and has a remaining weighted average lease term of approximately 16.4 years; The purchase price is below replacement cost and this acquisition is expected to be accretive to the REIT’s adjusted funds from operations (“AFFO”) per unit; This property is strategically located along the rapidly growing I-85 South corridor, which provides seamless access to a network of major transportation thoroughfares, including I-65, I-285 and I-75; This property is expected to provide long-term stable cash flow as well as expected growth through contractual rent increases, and lease-up of the remaining vacant space; and The Atlanta industrial market has established itself as one of the premier industrial markets in the U.S., offering excellent regional accessibility, a skilled work force and a low cost of operation.

Austin, Texas

The acquisition of Corridor Park D comprises approximately 56,000 square feet of gross leasable area and was acquired for an aggregate purchase price of approximately US$8.35 million (before closing costs), representing a going-in capitalization rate of approximately 7.59%.

This property is comprised of 4 suites that are all currently leased to a single tenant, with just over three years of the lease term remaining. This acquisition was undertaken solely by the REIT and was purchased with cash on hand.

Acquisition Highlights

This acquisition is expected to be immediately accretive to the REIT’s AFFO per unit; This property is well-located in the North Central Austin Submarket, which has recently seen strong vacancy and net absorption trends; and This property is expected to provide a stable cash flow and will require limited capital expenditures due to recent improvements to HVAC, landscaping, painting and significant tenant investment.

About Agellan Commercial Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning industrial, office and retail properties in select target markets in the United States and Canada.

The REIT’s 46 properties contain 8.3 million square feet of gross leasable area, with the REIT’s ownership interest at 7.0 million square feet. The properties are primarily located in major urban markets in the United States.

Additional information about the REIT is available at www.agellancommercialreit.com or www.sedar.com.

Non-IFRS supplemental measures:

Certain terms used in this press release are not recognized under International Financial Reporting Standards (“IFRS”) and therefore these terms should not be construed as alternatives to IFRS measures, such as net income or cash flow from operating activities, nor are these terms necessarily comparable to similar measures presented by other reporting issuers. These terms are used by management to measure, compare and explain the operating results and financial performance of the REIT. Management believes that these terms are relevant measures in comparing the REIT’s performance to industry data and the REIT’s ability to earn and distribute cash to holders of the REIT’s units. These non-IFRS measures are defined, and AFFO is reconciled to net income, in management’s discussion and analysis for the three and six month periods ended June 30, 2018, which should be read in conjunction with this press release.

Forward-Looking Statements:

This press release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT’s current expectations regarding future events. 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. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

View source version on businesswire.com:https://www.businesswire.com/news/home/20181001005973/en/

CONTACT: Agellan Commercial Real Estate Investment Trust

Frank Camenzuli, CEO

Tel: (416) 593-6800 x226

Fax: (416) 593-6700

KEYWORD: UNITED STATES NORTH AMERICA CANADA GEORGIA TEXAS

INDUSTRY KEYWORD: PROFESSIONAL SERVICES REIT FINANCE CONSTRUCTION & PROPERTY

SOURCE: Agellan Commercial Real Estate

Copyright Business Wire 2018.

PUB: 10/01/2018 04:08 PM/DISC: 10/01/2018 04:08 PM

http://www.businesswire.com/news/home/20181001005973/en

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