Pure Industrial Picks Up Properties in U.S., Canada
- Dec 22, 2017
Two Fort Worth, Texas, industrial facilities are among three acquisitions in the U.S. announced or made by Canadian-based Pure Industrial Real Estate Trust totaling $109.5 million. The REIT also announced an agreement to purchase a fourth asset in Montreal for $25.4 million.
“We are excited to add assets with industry-leading physical characteristics in exceptionally strong locations. Once leased, these assets will be accretive to our portfolio and further strengthen our position in our target markets,” Kevan Gorrie, PIRET president & CEO, said in a prepared statement.
Including the Montreal transaction closing expected in January and the closing of one of the Fort Worth assets set for August 2018, PIRET will have completed or announced year-to-date acquisitions of approximately $850 million.
The REIT also announced dispositions of three Canadian assets totaling C$22.7 million (approximately $17.9 million), which are among C$176 million ($138 million) in assets sold year-to-date. They are located in Etobicoke, Ontario; Vaughan, Ontario; and Winnipeg, Manitoba.
A 301,500-square-foot, Class A, cross-dock industrial facility in the East Fort Worth submarket sold by Hunt Southwest Real Estate Development, was among the U.S. acquisitions. The Riverbend West Distribution Center located on 16.7 acres at 2101 Reeves Place and 2152 Riverbend West Drive was marketed by HFF, which represented the seller. The HFF investment advisory team included Managing Director Adam Herrin and Director Stephen Bailey.
Completed in 2016, the distribution center features 32-foot clear heights, 76 overhead dock doors and four drive-in doors. It is 86 percent leased to Ecolab and PODS, with a weighted average lease term of 8.1 years. The purchase price of approximately $25 million represented a stabilized capitalization rate of about 5.2 percent.
The second Fort Worth asset is a new 657,043-square-foot distribution center, with 36-foot clear heights in the North Fort Worth industrial submarket. The deal, expected to close in August, calls for PIRET to pay $48 million for the center, representing a stabilized capitalization rate of approximately 5.2 percent. It is 75 percent leased to a large national apparel company on a 10.5-year lease term.
The third U.S. acquisition is 150 Distribution Drive, a new 760,256-square-foot distribution center with 36-foot clear heights in McDonough, Ga., purchased for $36.5 million. It was acquired vacant and is being marketed for lease. Located in Henry County, Atlanta’s strongest submarket, the site is within 200 miles from the Port of Savannah. The property is close to 201 Greenwood Court in McDonough, which the Trust acquired in February 2017.
PIRET planned to use cash and an unsecured line of credit to fund all the acquisitions.
In Montreal, PIRET has reached an agreement to acquire 2220 Rue de l’Aviation, a 287,338-square-foot, 32-foot clear height distribution center. The purchase price of C$32.5 million (about $25.5 million) represents a stabilized capitalization rate of approximately 6.8 percent, inclusive of rental payments related to a long-term ground lease with Aeroports de Montreal. Built in 2015, the build-to-suit asset is fully leased to Cardinal Health Canada Inc., with a 10-year remaining term.
The Montreal acquisition will be funded with the assumption of a C$22.8 million ($17.9 million) mortgage bearing an interest rate term of 3.48 percent and cash. The deal is expected to close in January.
Following the acquisitions and dispositions, PIRET will have 26 U.S. assets, representing 26 percent of its portfolio. Of 175 total assets, 12 will be in British Columbia; 41 in Alberta; and 78 in Ontario, or 69 percent of the Trust’s holdings.
The Vancouver, B.C.-based REIT has been active earlier this year, particularly in the U.S., where it acquired two industrial properties in Texas for $66.3 million. In February, PIRET paid $39.5 million for the 800,000-square-foot distribution center in McDonough, Ga.
Image courtesy of Pure Industrial Real Estate Trust