Nexus REIT (NXR.UN-T) declared Monday afternoon it has deals to purchase a complete of nine distribution centres and other industrial qualities in four provinces, for a whole price tag of $359 million, as it continues to transform to a pure-participate in industrial entity.
There are four transactions concerned in the announcement, together with the acquisition of a portfolio of a few distribution centres in Saskatchewan and New Brunswick for $230.4 million. The REIT has waived conditions on this portfolio.
Nexus has also waived conditions on five industrial attributes in two different acquisitions in Southwestern Ontario. Four of the houses are being acquired in a single transaction and the fifth, which is going through a 150,000-square-foot growth, will be obtained beneath a forward-obtain arrangement.
Nexus is also obtaining an Alberta industrial home which was declared on August 12.
“Breakout year” for Nexus REIT
In complete, the nine houses will incorporate 2.5 million square toes of GLA to the Nexus portfolio.
All are remaining obtained as a outcome of off-market transactions.
“This is definitely a breakout yr for the REIT,” mentioned Kelly Hanczyk, the REIT’s chief govt officer, in the announcement. “We are happy with the sizeable progress we have produced this year toward our intention of reworking into a pure-play industrial REIT. Upon closing of the announced transactions, we will have accomplished about $640 million of industrial acquisitions since the commencing of 2021.
“Our industrial portfolio weighting will raise to approximately 80 for each cent of NOI, very well surpassing our earlier stated target of 75 for each cent. The acquisition chances are highly compelling and constant with our stated strategy.”
The acquisitions are modern facilities with an typical very clear top of 28 toes, site protection of 30 for each cent and an regular developing dimension of approximately 279,000 square ft. Eighty-5 per cent of the acquisitions are single-tenant belongings.
The remaining weighted ordinary lease time period is approximately 8.7 a long time and weighted regular occupancy is 99 per cent.
The a few distribution centres
The distribution centres are single-tenant services comprising total GLA of somewhere around 1.4 million sq. ft. Nexus will pay $230.4 million for these acquisitions, with just one facility located in Regina and the other two in Moncton.
The solitary tenant of the centres is underneath a triple-web lease with a weighted average phrase of 10.6 years. This acquisition is envisioned to shut at the commencing of Oct.
It will be funded in portion by an providing led by BMO Cash Markets and Desjardins Cash Marketplaces. The providing is made up of 6,640,000 units at $11.30 for each unit, for gross proceeds of roughly $75 million. If an above allotment is also fully exercised, it could elevate a complete of $86 million.
Nexus options to fund the relaxation of the cost by way of up to $172.4 million in new property finance loan financing.
The Ontario and Alberta acquisitions
The 5 industrial houses in Southwestern Ontario complete about 900,000 square ft, and are remaining acquired for a whole of $108.8 million.
The seller is the identical counterparty from whom the REIT has acquired 6 industrial qualities so considerably in 2021. Very similar to these previous transactions, this acquisition will also be partially funded by the issuance of 5,460,275 Course B LP Units, valued at roughly $61.7 million, to the London-dependent seller.
The balance will be funded by a blend of dollars on hand, assumed and/or new property finance loan financing.
“The pipeline of asset acquisition chances in exchange for units from our London Seller reinforces their dedication to Nexus and their belief in the REIT’s potent progress fundamentals,” Hanczyk reported. “We continue on to see superior industrial acquisition prospects throughout Canada and anticipate solid fundamentals and momentum in the asset course to persist.”
Four of the Southwestern Ontario houses are expected to shut in January 2022 the forward-invest in house is predicted to close by the end of 2022. The transactions are subject matter to standard closing conditions and diligence.
The earlier announced 189,625 sq. foot warehouse residence in Red Deer, Alta., is anticipated to shut on or about September 9, 2021.
About Nexus REIT
Nexus is a growth-oriented REIT centered on the acquisition, ownership and management of industrial, office and retail attributes positioned in principal and secondary markets in North The usa.
The REIT owns a portfolio of 89 homes comprising roughly 6.6 million sq. toes of gross leasable region.