NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE
SERVICES OR DISSEMINATION IN THE UNITED STATES
BTB Real Estate Investment Trust (TSX:BTB.UN)
(“
BTB” or the “
REIT”) announces
today that it has reached an agreement with a syndicate of
underwriters led by National Bank Financial Inc. and including TD
Securities Inc., Echelon Wealth Partners Inc., Laurentian Bank
Securities Inc., Raymond James Ltd., Scotiabank, GMP Securities
L.P. and Industrial Alliance Securities Inc. (together, the
“
Underwriters”) to issue to the public, subject to
regulatory approval, on a bought deal basis 5,435,000 trust
units (the “
Units”) at a price of $4.60 per Unit
for gross proceeds of approximately $25 million. The REIT has
granted the Underwriters an over-allotment option exercisable in
whole or in part at any time up to 30 days after closing to
purchase up to an additional 815,250 Units at the same
offering price.
The net proceeds from the offering (after
deducting the Underwriters’ fee and expenses of the offering) will
be used to finance the acquisition of two properties (as defined
below). Should either or both of these acquisitions not
materialize, BTB will use the unallocated net proceeds to repay all
or a portion of the amounts outstanding on its acquisition line of
credit and for general trust purposes.
The REIT will file with the securities
commissions and other similar regulatory authorities in each of the
provinces of Canada a short form preliminary prospectus relating to
the offering of the Units on or about June 5, 2018. Closing of the
offering is expected to take place on or about June 19, 2018.
This press release does not constitute an offer
to sell, or the solicitation of an offer to buy, any securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful. The securities being offered have not been and will not
be registered under the U.S. Securities Act of 1933 as amended and
may not be offered or sold in the United States absent registration
or pursuant to applicable exemption from registration.
Acquisition of a Mixed-Use Office and Retail
Property in Montreal
The REIT is finalizing due diligence for the
acquisition of a retail property located at 1325 Saint-Catherine
Street West and an adjacent mixed-use property located at 1411
Crescent Street in Montreal for a total purchase price of $30.2
million excluding transaction fees, at a normalized capitalization
rate of 6.75%. It is expected that approximately
$18.0 million of the net purchase price will be financed by way of
a new mortgage on the property with the balance being funded using
a portion of the proceeds of the offering. The properties comprise
approximately 31,000 sq. ft., with one property being a single
story commercial property and the other being the adjacent 5-story
building strategically situated on the prime commercial artery of
Montreal with retail tenants on the ground floor and office space
on the floors above. BTB would use one and a half story for its
head office premises (having recently sold its current head office)
while a major international retailer occupies part of a floor. The
remaining space would be subject to a head lease with the seller
until December 31st 2018, the value of which is approximately
$567,000. BTB expects to lease the vacant spaces within the next 24
months. The acquisition is expected to close within the next 4
weeks, subject to completing confirmatory due diligence and
customary closing conditions.
Acquisition of a Retail Property in Lévis
The REIT is also finalizing due diligence for
the acquisition of a strip mall located in Lévis, Québec, known as
“Mega Centre Rive-Sud”, comprising approximately 207,000 square
feet for a total purchase price of $43 million. The largest tenant
of this property is Wal-Mart, which occupies approximately 112,000
square feet. The occupancy rate of this property is 99.3%. BTB
expects to finance this acquisition through the assumption of the
current outstanding mortgage on the property in the amount of
approximately $26.1 million and the balance using a portion of the
net proceeds of the offering. The acquisition is expected to close
within 6 weeks, subject to completing confirmatory due diligence
and customary closing conditions.
Acquisition of 25% Remaining Stake in Complexe
Lebourgneuf Phase 2
Concurrent with these two acquisitions, BTB is
also purchasing the remaining 25% equity stake in Complexe
Lebourgneuf Phase 2 in Quebec City (the REIT currently owns 75% of
the property) for $7.5 million, including assumed mortgage, which
represents an implied capitalization rate of 6.75%. The REIT will
satisfy the purchase price of this interest through the issuance of
532,265 limited partnership units to the seller at a price of $4.68
per unit, each unit exchangeable, at the discretion of the vendor,
for a Unit of BTB.
About BTB
BTB is a real estate investment trust listed on
the Toronto Stock Exchange. BTB is an important owner of properties
in eastern Canada. BTB owns 71 retail, office and industrial
properties for a total leasable area of more than 5.4 million
square feet. BTB's asset value is approximately $763M. The
objectives of BTB are: (i) to grow its revenues from its assets to
increase distributable income and therefore fund distributions;
(ii) to maximize the value of its assets through dynamic management
of its properties in order to sustain the long-term value of its
units; and (iii) to generate cash distributions that are fiscally
beneficial to unitholders.
BTB offers a distribution reinvestment plan to
unitholders whereby the participants may elect to have their
monthly cash distribution reinvested in additional units of BTB at
a price based on the weighted average price for BTB's Units on the
Toronto Stock Exchange for the five trading days immediately
preceding the distribution date, discounted by 3%.
Forward-Looking Statements
This press release may contain forward-looking
statements with respect to BTB. These statements generally can be
identified by use of forward looking words such as “may”, “will”,
“expect”, “estimate”, “anticipate”, “intends”, “believe” or
“continue” or the negative thereof or similar variations. The
actual results and performance of BTB could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Some important factors that could
cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
competition, changes in government regulation and the factors
described from time to time in the documents filed by BTB with the
securities regulators in Canada. Forward looking statements in this
news release include namely that the offering is expected to close
on or about June 19, 2018. The cautionary statements qualify all
forward looking statements attributable to BTB and persons acting
on their behalf. Unless otherwise stated or required by applicable
law, all forward-looking statements speak only as of the date of
this press release.
For more information, please
contact:
BTB REAL ESTATE INVESTMENT TRUSTMr. Michel LéonardPresident and
Chief Executive Officer514-286-0188 ext. 228
Mr. Benoit CyrVice-President and Chief Financial
Officer514-286-0188, ext. 230
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