Automotive Properties REIT Enters Agreements to Acquire Two Honda Dealership Properties in Quebec and 2.15 Acres of Land Underlying an Existing Tenant Dealership in Langley, B.C. for a Combined Purchase Price of $38.5 Million

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TORONTO, Dec. 30, 2021 /CNW/ - Automotive Properties Real Estate Investment Trust (TSX: APR.UN) ("Automotive Properties REIT" or the "REIT") announced today that it has entered into agreements with a dealership group to purchase two automotive dealership properties in Quebec (the "Properties") for a combined purchase price of $23.4 million. The Properties consist of Sherbrooke Honda, located at 2555 / 2615 King Street West in Sherbrooke and Magog Honda, located at 2390 / 2400 Sherbrooke Street in Magog. The addition of the Properties is expected to be immediately accretive to the REIT's Adjusted Funds from Operations ("AFFO")¹ per unit on a leverage-neutral basis.

The Sherbrooke Honda property consists of a 26,990 square-foot, full-service Honda dealership facility, renovated in 2014, that is situated on 1.7 acres of land along a commercial corridor on King Street West (Route 112). The Sherbrooke Metropolitan Area has a population of approximately 212,000, representing the fourth largest metropolitan area in Quebec. On closing, the operating tenant of Sherbrooke Honda will enter into a 15-year, triple-net lease with the REIT that includes a contractual annual rent increase based on the Quebec Consumer Price Index, and no less than 1.5%, after year one of the lease term.

The Magog Honda property consists of two buildings totaling 56,195 square-feet, including a full-service Honda dealership facility built in 2006 with expansions completed in 2009 and 2011, and a used car and service facility, built in 2008.  Magog Honda is situated on 6.5 acres of land along a commercial corridor at the intersection of Autoroute 55 and Route 112 in close proximity to Sherbrooke. On closing, the operating tenant of Magog Honda will enter into a 15-year, triple-net lease with the REIT that includes a contractual annual rent increase based on the Quebec Consumer Price Index, and no less than 1.5%, after year one of the lease term.

The REIT has also exercised its Right of First Refusal and entered into an agreement to purchase approximately 2.15 acres of land at 20257 Langley Bypass in Langley, British Columbia from a third party, that is subject to a land lease paid by the operator of the Acura Langley dealership, an affiliate of the Dilawri Group, and an existing tenant of the REIT. The land lease matures on June 30, 2032. The purchase price for the land was approximately $15.1 million (the "Acura Langley Land and Lease Acquisition").

"The acquisition of the Sherbrooke Honda and Magog Honda properties will increase our footprint in Quebec and expand our relationships with leading dealership groups," said Milton Lamb, President and CEO of the REIT. "The transaction involving Acura Langley enables us to consolidate ownership of the land and building and the related leases, thereby further enhancing the value of our property portfolio in the Greater Vancouver Area."

The REIT expects to close the acquisitions of the Properties and the Acura Langley Land and Lease Acquisition in January 2022, subject to customary closing conditions, and fund their respective purchase prices by drawing on its revolving credit facilities.  The Acura Langley Land and Lease Acquisition was unanimously approved by the REIT's independent trustees.   

About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio currently consists of 66 income-producing commercial properties, representing approximately 2.5 million square feet of gross leasable area, in metropolitan markets across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.

(1) Non-IFRS Financial Measure
This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of earnings performance used by real estate businesses. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic earnings performance and is indicative of the REIT's ability to pay distributions from earnings. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT's Management Discussion & Analysis ("MD&A") most recently filed on SEDAR for further discussion of this non-IFRS financial measure.

Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "is expected". Forward-looking information includes statements regarding the financial impact of the acquisition on the REIT's AFFO per unit and the expected timing of closing the acquisitions. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks & Uncertainties, Critical Judgements & Estimates" in the REIT's most recent MD&A and in the REIT's annual information form dated March 23, 2020, both of which are available on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

SOURCE Automotive Properties Real Estate Investment Trust

Bruce Wigle, Investor Relations, Bay Street Communications, Tel: [phone]; Milton Lamb, President & CEO, Automotive Properties REIT, Tel: [phone]; Andrew Kalra, CFO & Corporate Secretary, Automotive Properties REIT, Tel: [phone]

Related Links

www.automotivepropertiesreit.ca