STELLARTON, NS, Sept. 29 /CNW/ – Crombie Real Estate Investment Trust ("Crombie') announced that it has completed the acquisition of nine properties from Sobeys Inc., a wholly owned subsidiary of Empire Company Limited ("Empire").
Seven properties are located in Western Canada, including six in the Edmonton and Calgary, Alberta markets and one located in Regina, Saskatchewan. One property is located in Halifax, Nova Scotia and one in Orleans, Ontario. Five of the nine locations are freestanding Sobeys bannered grocery stores while each of the other four locations is a Sobeys anchored property with one additional tenant. The properties are 100% leased with a total gross leasable area of approximately 400,000 square feet. The purchase price for the properties is $84.3 million which represents a blended 7.6% cap rate.
Concurrent with the closing, Crombie has entered into mortgage financing on seven of the nine properties. The mortgages total $51.6 million with terms ranging from nine to 15 years, at fixed interest rates between 4.805% and 5.00% and amortizations of between 20 and 25 years. The balance of the purchase price will be financed through the use of proceeds from a $50 million equity issue completed in August, 2010.
Commenting on the property acquisitions, Donald E. Clow, FCA, President and Chief Executive Officer stated: "The purchase of these locations is consistent with our strategy of buying high quality properties at a reasonable price while also allowing Crombie to build a presence in Western Canada on which to execute our growth strategies. This acquisition again demonstrates the strong relationship that Crombie enjoys with Empire Company and Sobeys. The achievement of 15 year fixed term mortgage debt at 5.00% on five of the properties is consistent with Crombie's conservative capital structure."
These nine properties were included in the previously announced July, 2010 eleven property 499,000 square foot portfolio acquisition from Sobeys Inc. Two properties are subject to further evaluation and are expected to be acquired at a later date.
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 127 commercial properties in eight provinces, comprising approximately 11.9 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, including those discussed in the 2009 annual Management Discussion and Analysis under "Risk Management", 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.
Contact: Glenn Hynes, C.A., Chief Financial Officer and Secretary, Crombie REIT, (902) 755-8100