Allied Properties Real Estate Investment Trust is to purchase 555 Richmond Street West in Toronto for USD100 million.
“Adjacent to a cluster of four properties we already own on the southeast corner of Bathurst and Richmond Streets, 555 Richmond West will give us a cost-effective, large-floor-plate alternative for office users in the supply-constrained Downtown West sub-market, along with significant surplus land," says Michael Emory, president and chief executive. "In addition to being accretive to our AFFO per unit, the property will be an excellent addition to our large inventory of future intensification opportunities."
Allied has also entered into an agreement with a syndicate of underwriters led by Scotia Capital to issue to the public, on a bought-deal basis, 4,250,000 units from treasury at a price of USD35.30 per unit for gross proceeds of approximately USD150 million.
Allied has granted the underwriters an option to purchase up to an additional 637,500 units on the same terms and conditions, exercisable at any time, in whole or in part, for a period of 30 days following the closing of the offering. The issue will be offered in all provinces of Canada.
Closing of the offering is expected to occur on or about 3 September 2014 and is subject to regulatory approvals.
Allied intends to use the net proceeds of the offering to fund the acquisition of the property on an all-cash basis and for general trust purposes.