Allied Properties REIT has entered into agreements to purchase properties in Montreal and Calgary for USD69.2m.
The properties are 85 Rue St. Paul, Montreal; The Pilkington Building, 402 - 11th Avenue, Calgary; and The Biscuit Block, 438 - 11th Avenue, Calgary.
"We continue to find high-quality infill properties that fit squarely within our investment parameters," says Michael Emory, president and CEO. "In addition to being immediately accretive, each of these properties is close to one or more of our existing properties. The Calgary properties form nearly half a city block in the heart of the Warehouse District."
Allied has also established a fourth intensification joint venture with RioCan REIT through the acquisition of an undivided 50 per cent interest in 491 College Street and 289 Palmerston Avenue in Toronto.
"This is our fourth intensification JV with RioCan," says Emory. "It will enable both of us to build on the collaborative relationship that has been developed through the College & Manning JV, the King & Portland JV and the Downtown West JV, all of which are progressing well."
Located on the northeast corner of Rue St. Paul and Rue St. Sulpice, this property is comprised of 79,778 square feet of GLA, all of which is leased to tenants consistent in character and quality with Allied's tenant base. Built in 1861, the building was renovated and upgraded in 2001.
The Pilkington Building, located on northeast corner of 11th Avenue S.E. and 3th Street S.E., is comprised of 48,223 square feet of GLA, all of which is leased to tenants consistent in character and quality with Allied's tenant base, and 44 surface parking spaces. Built in 1913, the building was renovated and upgraded in 2012.
The Biscuit Block, located on northwest corner of 11th Avenue S.E. and 4th Street S.E., is comprised of 54,073 square feet of GLA, all of which is leased to tenants consistent in character and quality with Allied's tenant base, nine surface parking spaces and 30 underground parking spaces. Built in 1912, the building was renovated and upgraded in 2013.
The acquisitions in Montreal and Calgary are expected to close in February and March of 2014, subject to customary conditions. The purchase price for the three properties represents a capitalisation rate of approximately 6.8 per cent applied to the current annual net operating income (NOI). The properties will be free and clear of mortgage financing immediately prior closing. Allied plans to place mortgage financing on the properties on or soon after closing and will fund the equity component of the acquisitions with cash-on-hand.