Partners Real Estate Investment Trust has completed its previously announced acquisition of the Cobblestone Shopping Centre, a 100 per cent economically occupied shopping centre in Grande Prairie, Alberta.
Cobblestone, which was built in 2007 and 2008, is composed of three buildings that in aggregate comprise 42,980 square feet of leasable space.
Cobblestone is anchored by Shoppers Drug Mart, TD Canada Trust, Starbucks, Liquor Depot, and Aurora Eye Care. Seventy eight per cent of Cobblestone's rentable area and 81 per cent of its in-place base rental income is generated by national or regional tenants. There is very little near-term rollover with only two tenants occupying 12.8 per cent of the space expiring before 2016.
The REIT's purchase price for Cobblestone for approximately CAD16.6m, satisfied primarily through a combination of assumed and new mortgages totalling CAD11.3m. These mortgages mature in January 2018 and bearing a combined effective interest rate of 4.03 per cent. The balance of the purchase price was satisfied with cash.
Cobblestone is expected to generate current in-place annualised net operating income of CAD1.1m and CAD0.7m in funds from operations, with a negligible impact on the REIT's overall capital structure.
"The acquisition of Cobblestone is a very accretive transaction which reflects Partners' strategy of acquiring high-quality, necessity-based and stable properties in strong markets," says Edward Boomer, the REIT's president and chief investment officer. "We look forward to completing further accretive acquisitions over the balance of 2013."