Granite REIT Announces C $ 330.7 Million Acquisitions and New Custom Construction Lease for its Houston Development | National company
TORONTO – (BUSINESS WIRE) – August 24, 2021–
Granite Real Estate Investment Trust (“Granite” or the “REIT”) (TSX: GRT.UN / NYSE: GRP.U) today announced the acquisition of a property under development in Canada and has agreed to acquire five income properties in the United States together comprising approximately 4.2 million square feet at a combined purchase price of approximately C $ 330.7 million. Additionally, Granite announced that it has entered into a 690,000 square foot custom construction lease with a leading e-commerce retailer, which will be built as part of the second phase of its development in Houston.
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Developable land in Brantford, Ontario (Photo: Business Wire)
Kevan Gorrie, President and CEO of Granite, said: “These transactions reflect our continued commitment to develop and acquire institutional grade assets in key distribution and e-commerce markets in Canada, United States. and in Europe. The acquisition of the development site provides us with the opportunity to leverage our platform and expertise to develop state-of-the-art large-scale facilities in an active and rapidly growing distribution node. Once stabilized, the Brantford development is expected to generate significant net asset value growth for our unitholders. We are also excited to expand our reach in our target markets in the United States through the acquisitions of the income-generating properties. These modern assets are consistent with the quality of our existing portfolio and have strong growth potential for NOI and NAV. Finally, we are delighted to announce our first major Build-to-Suit project in Houston, which will complement the initial phase of our development already underway. This bespoke construction project, involving a national e-commerce tenant, will generate a return consistent with our pro forma development return for the entire project.
Brantford, Ontario developable land
On August 16, 2021, Granite acquired a 92.2 acre parcel of land in Brantford, Ontario for the development of a multi-phase business park comprising a total of approximately 1.7 million square feet of land. modern distribution and logistics space for $ 62.2 million. The new site is serviced and capable of accommodating state-of-the-art buildings ranging from 100,000 square feet to 500,000 square feet, with the first phase of construction scheduled to begin in the third quarter of 2022. The project is expected to generate a yield of development of about 5.5%. The site is located 0.5 miles from Highway 403, in one of Brantford’s rapidly evolving distribution nodes, providing access to nearly 8.8 million people within a 90-minute drive. The property is one of the development properties mentioned in Granite’s press release of June 2, 2021 as subject to exclusive negotiations.
1600 Rock Creek Boulevard, Joliet, Illinois
Granite has agreed to acquire a modern 0.1 million square foot distribution facility located in the Chicago submarket in Joliet, Ill. For $ 20.8 million (US $ 16.4 million ). The building is 100% leased to two tenants for a weighted average residual lease term of 4.4 years and is acquired at an ongoing yield of 4.9%. Located in close proximity to three recently acquired Granite assets in Chicago, the building has a clear height of 32 feet and is located on 8 acres of land, near the intersection of I-55 and I- 80. The acquisition is subject to customary closing conditions and is expected to close in the third quarter of 2021. The property is one of the lucrative properties mentioned in Granite’s press release of June 2, 2021 as subject to exclusive negotiations.
Acquisition of American portfolio
Chicago (0.4 million square feet)
Cincinnati (0.7 million square feet)
Memphis (1.3 million square feet)
1243 Gregory Dr., Antioch, Illinois
60, boul. Logistics, Richwood, Kentucky
12577 Stateline Road. Olive Branch, MS & 8740 South Crossroads Dr., Olive Branch, MS
Granite has agreed to acquire a portfolio of four modern distribution warehouses located in Chicago, Cincinnati and Memphis, totaling 2.4 million square feet. The properties are acquired at a combined purchase price of approximately $ 247.7 million (US $ 195.0 million) representing an ongoing yield of 4.7%. The buildings are 100% let to seven tenants for a weighted average residual lease term of 3.2 years. These institutional grade assets have a minimum headroom of 32 ‘and an average age of 8 years. All the assets are well located in their respective markets, close to the main transport and distribution infrastructures. The acquisition is subject to customary closing conditions and is expected to be finalized in the third quarter of 2021.
The Canadian acquisition was funded from cash and the US acquisitions are expected to be funded from Granite’s cash.
Granite and its partner NorthPoint Development have entered into a new bespoke construction lease with a leading e-commerce retailer in its Houston Development NorthPoint 90, for an initial term of 10.9 years. The modern distribution building of approximately 690,000 square feet, 40 ‘headroom, is under construction as a second phase of the multi-phase development, in addition to the first phase of approximately 700,000 square feet currently under construction. This bespoke construction project is expected to be completed in the third quarter of 2022.
Granite is a Canadian REIT engaged in the acquisition, development, ownership and management of logistics, warehouse and industrial properties in North America and Europe. Granite owns 119 investment properties representing approximately 51.3 million square feet of leasable area.
Copies of financial data and other public documents relating to Granite are available on the Internet on the Canadian Securities Administrators’ Electronic Document Search and Analysis System (SEDAR), accessible at www.sedar.com and on the United States Stock Exchange. The Commission’s Electronic Data Collection, Analysis and Retrieval System (EDGAR), available at www.sec.gov. For more information, please visit our website at www.granitereit.com or contact Teresa Neto, Chief Financial Officer, at 647-925-7560 or Andrea Sanelli, Director, Legal and Investor Services, at 647- 925-7504.
This press release may contain statements which, to the extent that they are not statements of historical fact, constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws, including the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended, and applicable Canadian securities laws. Forward-looking statements and forward-looking information may include, among other things, statements regarding the expected square footage and stabilized performance of the Brantford development lands, the expected timing of the closing of acquisitions in the United States, the date of completion. planned completion and development performance of the second phase of Houston’s development or the impact of such acquisitions on Granite’s net operating income and net asset value and plans, objectives, strategies, intentions, beliefs, estimates, costs , objectives, economic performance, expectations or forecasts of Granite or the assumptions underlying all of the above. Words such as “may”, “would”, “could”, “will”, “probably”, “expect”, “anticipate”, “believe”, “intend”, “plan” , “Anticipate”, “plan”, “estimate”, “seek”, “objective” and similar expressions are used to identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be construed as guarantees of events, performance or results and will not necessarily constitute precise indications as to when or when such events, performance or results will be achieved. We should not place undue reliance on such statements. Forward-looking statements and forward-looking information are based on information available at the time and / or on management’s good faith assumptions and analyzes made in light of its perception of historical trends, current conditions and expected future developments. , as well as other factors that management believes are appropriate in the circumstances, and are subject to known and unknown risks, uncertainties and other unforeseeable factors, many of which are beyond the control of Granite, which could cause so that actual events or results differ materially from such forward-looking statements and forward-looking information. Important factors that could cause such differences include, without limitation, the risks set out in the Annual Information Form of Granite Real Estate Investment Trust and Granite REIT Inc. dated March 3, 2021 (the “Annual Information Form”) and the discussions and analysis of the results of operations and financial position for the three and six month periods ended June 30, 2021 (the “Second Quarter MD&A”. The “Risk Factors” section of the Annual Information Form and the Report Quarterly Management Reports also contain information about the material factors or assumptions underlying such forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information speak only as of the date on which the statements and information were made. made and, except as otherwise provided by applicable securities laws, Granite expressly disclaims any intention and does not assume any u no obligation to update or revise any forward-looking statements or information that appears to be contained in this press release to reflect subsequent or other information, events or circumstances.
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CONTACT: Teresa Neto
Manager, Legal and Investor Services
KEYWORD: OHIO MISSISSIPPI ILLINOIS TEXAS TENNESSEE KENTUCKY UNITED STATES NORTH AMERICA CANADA
INDUSTRY KEYWORD: REIT FINANCE PROFESSIONAL SERVICES COMMERCIAL BUILDING AND REAL ESTATE CONSTRUCTION AND PROPERTY
SOURCE: Granite Real Estate Investment Trust
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PUB: 08/24/2021 17:01 / DISC: 08/24/2021 17:02