Choice Properties Real Estate Investment Trust to Acquire Properties from Loblaw Companies Limited and a Third-Party Vendor

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BRAMPTON, ON, Oct. 17, 2013 /CNW/ - Choice Properties Real Estate Investment Trust ("Choice Properties" or the "REIT") (TSX: CHP.UN) announced today it has entered into an agreement to acquire a portfolio of nine commercial properties from Loblaw Companies Limited ("Loblaw"). In conjunction with this transaction, the REIT also intends to complete the acquisition of a single-tenant retail property, comprising approximately five thousand square feet ("sq. ft.") of gross leasable area ("GLA"), from a third-party vendor before December 31, 2013. The aggregate purchase price for both acquisitions is expected to be approximately $150 million, excluding transaction costs.

Highlights of Properties to be Acquired:

• Expands portfolio by more than 900,000 sq. ft. of GLA, with an occupancy rate of 99.9%;
• Located across Canada and consists of four stand-alone supermarkets, three shopping centres, two single-tenant retail stores, and one commercial complex, which includes a stand-alone supermarket and warehouse;
• Offers potential for intensification and future re-development, including approximately 95,000 sq. ft. of GLA (about 43,000 sq. ft. net of demolition) currently entering the construction phase on two sites; and
• Immediately accretive with an estimated stabilized net operating income ("NOI") of $10.7 million, representing an overall year-one capitalization rate of 6.65%, adjusted for development costs expected to be incurred and includes a warehouse of more than 450,000 sq. ft.

"Since the closing of our initial public offering, we have been focused on our objectives to generate stable and growing cash distributions, enhance the value of owned assets and grow our asset base. Today, we are pleased to announce the acquisition of a portfolio of high-quality, retail-focused commercial properties that are located in prime locations and provide potential for site intensification and rent growth," said John Morrison, President and Chief Executive Officer, Choice Properties. "This portfolio of properties builds on our ability to grow our portfolio in an accretive way and marks the first two site intensification projects in our development program."

Upon completion of these acquisitions, Choice Properties' portfolio will consist of 435 properties comprising 425 retail properties, nine warehouse properties and one office complex, totaling approximately 36.2 million square feet across Canada.

The transaction with Loblaw is subject to customary closing conditions for transactions of this size and type, and is expected to be completed on or about October 22, 2013.  The acquisitions are expected to be funded by issuing Class B LP Units of Choice Properties Limited Partnership and cash. The total number of Class B LP Units to be issued to Loblaw is expected to be approximately 10 million based on a 5-day volume weighted average unit price of $9.9649.

Property Summary:

Vendor: Loblaw

Address	Property Class	Banner	Year Built	Last Renovated	Loblaw GLA	3^rd Party GLA	% Occupied
5528 Highway 7, Porter's Lake, NS	Retail	Atlantic Superstore	1999	2010	47,067	7,233	100
3070 Main Street, Salisbury, NS	Retail	Save Easy	1993	2007	8,578	8,713	97
12 Hurontario Street, Collingwood, ON	Retail	Loblaws	2000	2008	57,795	-	100
3501 Yonge Street, Toronto, ON	Retail	Loblaws	1990	2008	33,700	-	100
1811 Avenue Road / 352 Melrose, Toronto, ON	Retail	no frills	1992	2006	13,299	-	100
192 Bullock Drive, Markham, ON	Retail	N/A	2003	NA	-	12,102	100
3730 Lakeshore Boulevard, Toronto, ON*	Retail	no frills	2000	2004	32,011	-	100
102 Highway 8, Stoney Creek, ON*	Retail	Fortinos	1999	2010	52,544	40,002	100
350 SE Marine Drive, Vancouver, BC	Retail & Warehouse	Real Canadian Superstore	1989	2011	621,177	-	100
				Sub-total:	866,171	68,050

Vendor: Third Party

Address	Property Class	Banner	Year Built	Last Renovated	Loblaw GLA	3^rd Party GLA	% Occupied
1199 Oxford Street W, London, ON	Retail	N/A	2004	NA	-	5,538	100
				Total:	866,171	73,588

* Properties currently entering construction phase

About Choice Properties Real Estate Investment Trust
Choice Properties Real Estate Investment Trust is an owner, manager and developer of well-located commercial real estate across Canada. Choice Properties' initial portfolio spans approximately 35.3 million square feet of gross leasable area and consists of 425 properties primarily focused on supermarket-anchored shopping centres, stand-alone supermarkets and other retail properties. Choice Properties' strategy is to create value by enhancing and optimizing its property portfolio, which was built over thirty years by Loblaw,  the REIT's principal tenant, and largest Unitholder and lender. Choice Properties' strong alliance with Loblaw positions it well for future growth. For more information, visit Choice Properties' website at www.choicereit.ca and Choice Properties' issuer profile at www.sedar.com.

Forward-Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Choice Properties' current expectations regarding future events. 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 Choice Properties' 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 "Risk Factors" in the final base shelf prospectus of Choice Properties dated September 3, 2013. Choice Properties 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.

"NOI" is not a measure recognized under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and does not have any standardized meaning prescribed by IFRS. NOI is a supplemental measure of an issuer's performance and management believes that NOI is useful in the assessment of the REIT's operating performance for valuation purposes, and is also a relevant measure of the ability of the REIT to earn and declare distributions to Unitholders. NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to NOI reported by such organizations. NOI should not be construed as an alternative to comprehensive income determined in accordance with IFRS as indicators of the REIT's performance. For additional information regarding this non-IFRS measure, including the definition thereof, please refer to the REIT's most recent management's discussion and analysis of results of operations and financial condition, a copy of which is available at www.sedar.com. 

 

 

 

SOURCE: Choice Properties Real Estate Investment Trust

Kim Lee
Vice President, Investor Relations and
Financial Planning & Analysis
Choice Properties Real Estate Investment Trust
t [phone]
e [email protected]