STELLARTON, NS, Feb. 22 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has completed the acquisition of five properties of the previously announced portfolio of eight retail properties from subsidiaries of Empire Company Limited ("Empire"). The purchase price in respect of the five properties is approximately $31.5 million, excluding closing and transaction costs. Empire has obtained mortgage financing for the properties of approximately $8.4 million. The mortgages have a weighted average term of 8.6 years, a 25 year amortization period and a weighted average interest rate of 6.26%, and were assumed by Crombie. The balance of the purchase price will be financed by Crombie with its existing credit facility.
The following is a description of the properties acquired:
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Property Location Area Tenants Property Type
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Vaughan Harvey Vaughan Harvey Retail - Plaza
Plaza Boulevard, Moncton, 85,324 4
New Brunswick
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Highland Square Westville Road, 20,085 1 Retail -
Mall New Glasgow, Freestanding
Nova Scotia Building at
existing mall
site
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Greenfield Park Avenue Auguste, 18,890 1 Retail -
Longueuil, Quebec Freestanding
Building at
existing plaza
site
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Saint-Romuald Boulevard de la 8,866 2 Retail- Plaza at
Plaza Rive Sud, existing plaza
Saint-Romuald, site
Quebec
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Saint- Rue Principale, 52,763 3 Retail - Plaza
Apollinaire Saint-Apollinaire,
Plaza Quebec
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>>
The properties acquired comprise approximately 186,000 square feet of gross leaseable area, consisting of two freestanding tenants and three retail plazas. Each property is newly constructed or recently renovated and the portfolio is 100% leased. The weighted average lease term is approximately 14.9 years with less than 7% of the GLA expiring in the next 10 years.
Two of the plazas are anchored by Sobeys bannered grocery stores. The freestanding locations include a Future Shop and Mountain Equipment Co-op and are adjacent to locations owned by Crombie.
"We are extremely pleased to complete this acquisition which, together with our other acquisitions from Empire, reflects the sustainable competitive advantage that Crombie enjoys through our relationship with Empire. The properties acquired enhance our portfolio diversification and will be immediately accretive to AFFO. The closing of the acquisition of the final three properties in the portfolio is anticipated to occur prior to the end of the first quarter of 2010." said Crombie President and Chief Executive Officer, Donald Clow, FCA.
About Crombie
Crombie is an open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. The trust invests in income-producing retail, office and mixed-use properties in Canada, with a future growth strategy focused primarily on the acquisition of retail properties. Crombie currently owns a portfolio of 115 commercial properties in seven provinces, comprising approximately 11.4 million square feet of rentable space.
This news release contains forward looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects and opportunities. Wherever possible, words such as "may", "will", "estimate", "anticipate", "believe", "expect", "intend" and similar expressions have been used to identify these forward looking statements. These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward looking statements necessarily involve known and unknown risks and uncertainties. A number of factors could cause actual results, performance, achievements, prospects or opportunities to differ materially from the results discussed or implied in the forward looking statements. These factors should be considered carefully and a reader should not place undue reliance on the forward looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct.
In particular, certain statements in this document discuss the anticipated closing of the acquisition of additional properties in the portfolio which is dependent on the completion of normal closing conditions and the closing of mortgage financing.
Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements.
AFFO does not have standardized meaning under Canadian generally accepted accounting principles ("GAAP") and therefore may not be comparable to similarly titled measures used by other publicly traded companies. Crombie has referenced AFFO in this new release because it believes that it is a useful measure for investors to evaluate the financial impact of the acquisition on Crombie. AFFO is calculated as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable real estate and extraordinary items, plus depreciation and amortization, future income taxes and after adjustments for equity accounted entities and non-controlling interests, adjusted for non-cash amounts affecting revenue and discontinued operations, less maintenance capital expenditures, maintenance tenant improvements and leasing costs, and the settlement of effective interest rate swaps.
Additional information relating to Crombie can be found on Crombie's web site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory filings at www.sedar.com.
Contact: Scott Ball, C.A., Vice President, Chief Financial Officer and Secretary, Crombie REIT, (902) 755-8100