TORONTO, ON–(Marketwired – October 07, 2016) – WPT Industrial Real Estate Investment Trust (TSX: WIR.U) (OTCQX: WPTIF) (the “REIT”) announced today that it has waived diligence conditions and plans to acquire two new properties — one in the Minneapolis-St. Paul, Minnesota metropolitan area and one in the Columbus, Ohio metropolitan area — from third-party vendors for a total purchase price of US$60,075,000 (exclusive of closing and transaction costs), representing a blended going-in capitalization rate of approximately 6.9%. The Minnesota property is approximately 86% occupied and the Ohio property is 100% occupied. The purchase price will be satisfied with a combination of cash on hand and the assumption of a property level mortgage loan for the Minnesota property. The transactions are expected to close in the fourth quarter of 2016.
Both properties contain highly functional, modern, Class A, industrial buildings, well-positioned to attract and maintain quality tenancies in their respective markets and submarkets. The REIT expects to release further property details following closing of the transactions.
“We expect the Ohio property to be immediately accretive to the REIT’s AFFO per unit and the Minnesota property to be accretive to the REIT’s AFFO per unit upon stabilization. These high quality, functional properties complement the REIT’s existing portfolio and demonstrate our ability to source third-party acquisitions that can both immediately enhance unitholder value and provide opportunities for future growth,” commented Scott Frederiksen, Chief Executive Officer of the REIT.
About WPT Industrial Real Estate Investment Trust:
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT’s operating subsidiary) indirectly owns a portfolio of properties consisting of approximately 14.8 million square feet of gross leasable area, comprised of 45 industrial properties and two office properties located in 12 states within the United States.
Forward-Looking Statements
This press release contains “forward-looking information” as defined under applicable Canadian securities law (“forward-looking information” or “forward-looking statements“) which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes” or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved” or “continue” and similar expressions identify forward-looking statements. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the closing of the acquisitions, closing of the mortgage loan assumption, and the expected closing dates thereof; and expectations regarding accretion to the REIT’s AFFO per unit and future growth. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT’s estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, the REIT’s and each property’s future growth potential, results of operations, future prospects and opportunities, the demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current economic conditions remaining unchanged, and continued positive net absorption and declining vacancy rates in the markets in which the REIT’s properties are located.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under “Risk Factors” in the REIT’s annual information form for the period ended December 31, 2015, which is available under the REIT’s profile on SEDAR at www.sedar.com. These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-IFRS Measures
Funds from operations (“FFO“), adjusted funds from operations (“AFFO“), net operating income (“NOI“), capitalization rate and payout ratio are not measures recognized under International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the Canadian Institute of Chartered Accountants in Part I of The Canadian Institute of Chartered Accountants Handbook – Accounting, as amended from time to time (“IFRS“) and do not have standardized meanings prescribed by IFRS. Management believes that these terms are supplemental measures of a Canadian real estate investment trust’s performance and the REIT believes they are relevant measures of the ability of the REIT to earn and distribute cash returns to investors in the REIT’s trust units and to evaluate the REIT’s performance. The IFRS measurement most directly comparable to FFO, AFFO and NOI is net income.
“FFO” is defined as net income in accordance with IFRS, (i) plus or minus fair value adjustments on investment properties; (ii) plus or minus gains or losses from sales of investment properties; (iii) plus or minus other fair value adjustments; (iv) plus amortization of tenant incentives; (v) plus transaction costs expensed as a result of the purchase of a property being accounted for as a business combination; (vi) plus distributions on redeemable or exchangeable units treated as interest expense; (vii) plus or minus any negative goodwill or goodwill impairment; and (viii) plus deferred income tax expense, after adjustments for equity accounted entities and joint ventures calculated to reflect FFO on the same basis as consolidated properties. FFO has been prepared consistently with the definition presented in the White Paper on funds from operations prepared by the Real Property Association of Canada for all periods presented.
“AFFO” is defined as FFO subject to certain adjustments, including: (i) amortization of fair value mark-to-market adjustments on long-term debt and amortization of financing costs; (ii) adjusting for any differences resulting from recognizing property rental revenues or expenses on a straight-line basis; (iii) amortization of grant date fair value related to compensation incentive plans; (iv) adjusting for any non-cash compensation expense; and (v) deducting a reserve for normalized maintenance capital expenditures, tenant inducements and leasing commissions, as determined by the REIT. Other adjustments may be made to AFFO as determined by the trustees of the REIT in their sole discretion. FFO and AFFO should not be construed as alternatives to net income and comprehensive income determined in accordance with IFRS as indicators of the REIT’s performance. The REIT’s method of calculating FFO and AFFO may differ from other issuers’ methods and accordingly may not be comparable to measures used by other issuers.
“NOI” is used by industry analysts, investors and management to measure operating performance of real estate investment trusts. NOI represents investment properties revenue less investment properties operating expenses (adjusted for property taxes accounted for under IFRIC 21), as presented in the consolidated statements of net income and comprehensive income prepared in accordance with IFRS.
“capitalization rate” is defined as NOI divided by purchase price.
FOR FURTHER INFORMATION CONTACT:
Scott Frederiksen
Chief Executive Officer
WPT Industrial Real Estate Investment Trust
Tel: (952) 897-7737
Fax: (952) 842-7737
www.wptreit.com