STELLARTON, NS, March 24 /CNW/ – Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has completed the acquisition of the remaining three properties of the previously announced portfolio of eight retail properties from subsidiaries of Empire Company Limited ("Empire"). The purchase price in respect of the three properties is approximately $28 million, subject to normal adjustments at Closing. Commitments for mortgage financing for the properties of approximately $19 million will be assigned to Crombie and funded following the acquisition. The mortgage commitments have a weighted average term of 10 years and a weighted average amortization period of 24 years. The interest rates will be fixed under the terms of each mortgage with committed interest rate spreads ranging from 220 to 300 basis points over the applicable Government of Canada bond rates at the date of the rate fix. The purchase price will be financed by Crombie with its existing credit facility pending advance of the mortgage proceeds.
The following is a description of the properties acquired:
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No. of Property
Property Location Area Tenants Type
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Mountain Locks St. Catharines, Retail -
Plaza Ontario 84,673 13 Plaza
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Mountain Road,
Mountain Road Moncton, Retail -
Plaza New Brunswick 16,694 2 Plaza
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Catherwood Drive,
Saint John, Retail -
Catherwood Drive New Brunswick 45,916 1 Freestanding
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The properties acquired comprise approximately 147,000 square feet of gross leaseable area, consisting of one freestanding tenant and two retail plazas. Each property is newly constructed or recently renovated and is 100% leased after providing for a head lease provided by Empire on certain of the properties. The weighted average lease term is approximately 15 years with no GLA expiring in the next 10 years.
One of the plazas is anchored by a Sobeys-bannered grocery store. The second plaza and the freestanding location each include a Lawtons Pharmacy.
"We are very pleased to complete the final tranche of this acquisition which continues to reflect the sustainable competitive advantage that Crombie enjoys through our relationship with Empire and Sobeys. The properties acquired have long term leases, enhance our portfolio diversification and will be immediately accretive to AFFO." said Crombie President and Chief Executive Officer, Donald E. 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 118 commercial properties in seven provinces, comprising approximately 11.5 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