Agellan Commercial Real Estate Investment Trust Announces Closing of Property Transactions and Renewal of a Lease in Austin, Texas

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TORONTO--()--Agellan Commercial Real Estate Investment Trust (the “REIT” or “Agellan”) (TSX:ACR.UN) announced today the closing of certain previously announced transactions and the renewal of a lease in Austin, Texas.

“Furthermore, as evidenced by the spread in cap rates between the Canadian and US markets, we believe that our US focused investment strategy will drive Net Asset Value and AFFO growth.”

Property Transactions

On February 5, 2015, the REIT completed the sale of 20 Valleywood Drive in Markham, Ontario, to a third party purchaser for approximately $8.2 million (before closing costs), representing an in-place capitalization rate of approximately 5.9%.

On February 9, 2015, the REIT completed the acquisition of 6 industrial properties (the “Oakbrook Technology Center”) located in Atlanta, Georgia, for an aggregate purchase price of approximately US$12.9 million (before closing costs). The purchase price represents a going-in capitalization rate of approximately 8.4%. The Oakbrook Technology Center consists of approximately 299,000 square feet in a park-like setting, and is currently 95% occupied with 28 tenants, however, the occupancy rate is expected to decrease to approximately 91% as at March 1, 2015. The REIT satisfied the aggregate purchase price for the acquisition with approximately US$6.2 million of available cash and the remainder with certain of the net proceeds from the disposition of 20 Valleywood Drive.

Each of the above transactions is consistent with the REIT’s investment strategy, where the REIT will seek to dispose of all or substantially all of its existing Canadian real estate assets and reinvest the related proceeds of disposition in U.S. real estate assets.

Lease Renewal in Austin, Texas

On February 2, 2015, the REIT completed the renewal of 103,645 square feet of the expiring 117,437 square feet in Austin, Texas, to Life Technologies Corporation, a wholly-owned subsidiary of Thermo Fisher Scientific Inc., for a term of 5 years ending June 2020. The lease includes an increase in net rent per square foot of approximately 27% versus the tenant’s in-place net rent per square foot. As well, the renewal accounts for approximately 33% of the REIT’s total 2015 Texas lease expiries.

”We are experiencing solid economic growth in the majority of our US markets, which is resulting in strong rental rate growth and increases in occupancy,” says Frank Camenzuli, Chief Executive Officer of the REIT. “Furthermore, as evidenced by the spread in cap rates between the Canadian and US markets, we believe that our US focused investment strategy will drive Net Asset Value and AFFO growth.”

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 was 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 current portfolio aggregates approximately 4.6 million square feet of gross leasable area in 31 properties. The properties are primarily located in major urban markets in the United States and Canada.

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.

Contacts

Agellan Commercial Real Estate Investment Trust
Derek Dermott, 416-593-6800 x 269
President
Fax: 416-593-6700
or
Frank Camenzuli, 416-593-6800 x 226
CEO
Fax: 416-593-6700

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