TORONTO, Sept. 26 /CNW/ - Allied Properties REIT (TSX:AP.UN) announced
today that it has entered into an agreement to purchase 67 Richmond Street
West, a Class I office building located in downtown Toronto, for $9.5 million.
The acquisition is expected to close on or about October 11, 2005, subject to
customary conditions.
The building is comprised of 50,664 square feet of gross leasable area
(GLA) and is 87% leased to five tenants. The principal tenant, Omnicom Group,
occupies 62% of the GLA pursuant to a lease that expires in 2011.
The purchase price represents an initial capitalization rate of 7.7%
after deducting the operating costs associated with a full-floor vacancy and
an ongoing capitalization rate of 9.6% upon lease-up of the vacant floor. The
property will be free and clear on closing. The REIT intends to finance the
acquisition initially with its acquisition credit facility and also intends to
place first mortgage financing on the property in the approximate principal
amount of $6.5 million as soon after closing as possible. The REIT expects the
acquisition to be accretive to Distributable Income per unit from the outset.
Allied Properties REIT owns a portfolio of predominantly Class I office
properties in downtown Toronto, downtown Montreal and downtown Winnipeg. The
objectives of the REIT are to provide stable and growing cash distributions to
its unitholders and to maximize unitholder value through the effective
management and accretive growth of its portfolio.
This press release may contain forward-looking statements with respect to
the REIT, its operations, strategy, financial performance and condition. These
statements generally can be identified by use of forward looking words such as
"may", "will", "expect", "estimate", "anticipate", "intends", "believe" or
"continue" or the negative thereof or similar variations. The actual results
and performance of the REIT discussed herein could differ materially from
those expressed or implied by such statements. Such statements are qualified
in their entirety by the inherent risks and uncertainties surrounding future
expectations, including that the transaction contemplated herein is completed.
Important factors that could cause actual results to differ materially from
expectations include, among other things, general economic and market factors,
competition, changes in government regulations and the factors described under
"Risk Factors" in the Annual Information Form of the REIT which is available
at www.sedar.com. The cautionary statements qualify all forward-looking
statements attributable to the REIT and persons acting on their behalf. Unless
otherwise stated, all forward-looking statements speak only as of the date of
this press release and the parties have no obligation to update such
statements.
"Capitalization rate" is not a measure recognized under Canadian
generally accepted accounting principles ("GAAP") and does not have
standardized meanings prescribed by GAAP. Capitalization rate is presented in
this press release because management of the REIT believes that this non-GAAP
measure is relevant in interpreting the purchase price of the property being
acquired. Capitalization rate, as computed by the REIT, may differ from
similar computations as reported by other similar organizations and,
accordingly, may not be comparable to capitalization rate reported by such
organizations.
