True North Commercial Real Estate Investment Trust Completes Previously Announced $80.5 Million Equity Offering With Full Exercise of Over-Allotment Option
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/
TORONTO, Nov. 18, 2019 /CNW/ - True North Commercial Real Estate Investment Trust (the "REIT") (TSX: TNT.UN) is pleased to announce it has closed its previously announced bought deal offering (the "Offering") of trust units ("Units") with a syndicate of underwriters (the "Underwriters") led by CIBC Capital Markets and Raymond James Ltd. An aggregate of 11,638,000 Units were issued by the REIT at a price of $6.92 per Unit, including 1,518,000 Units issued on the full exercise of the Underwriters' over-allotment option, for gross proceeds of approximately $80.5 million. Pursuant to the Offering, certain trustees and officers of the REIT purchased 543,426 Units, including the purchase of 505,780 Units by an entity controlled by Daniel Drimmer, the REIT's President, Chief Executive Officer and Chairman of the Board of Trustees of the REIT.
The REIT intends to deploy the net proceeds from the Offering to fund the potential acquisition of two high-quality Class "A" office properties located in the Greater Toronto Area, Ontario (the "Potential Acquisition Properties") from two arm's length vendors. The Potential Acquisition Properties are expected to be accretive to the REIT's funds from operations ("FFO") and adjusted funds from operations ("AFFO") per Unit. The Offering was not conditional on the closing of either of the Potential Acquisition Properties, and in the event either acquisition does not close, the REIT intends to use the unutilized net proceeds of the Offering to fund potential future acquisitions and for general trust purposes.
About the REIT
The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT currently owns and operates a portfolio of 47 commercial properties consisting of approximately 4.2 million square feet in urban and select secondary markets across Canada. The REIT is focused on growing its portfolio principally through acquisitions across Canada and such other jurisdictions where opportunities exist.
For more information regarding the REIT, please visit www.sedar.com or the REIT's website at www.truenorthreit.com.
Non-IFRS measures
Certain terms used in this press release such as FFO and AFFO are not measures defined by International Financial Reporting Standards ("IFRS") as prescribed by the International Accounting Standards Board ("IASB"), do not have standardized meanings prescribed by IFRS and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS.
FFO is a measure of operating performance based on the funds generated from the business of the REIT before reinvestment or provision for capital needs. The REIT calculates FFO in accordance with the guidelines set out by the Real Property Association of Canada ("Realpac"). Management considers this non-IFRS measure to be an important measure of the REIT's operating performance.
AFFO is an important performance measure to determine the sustainability of future distributions paid to holders of Units. In calculating AFFO, the REIT makes certain non-cash adjustments to FFO such as: amortization of fair value mark-to-market adjustments on assumed mortgages, amortization of deferred financing costs, straight-line rent, instalment note receipts and non-cash compensation expense related to Unit-based incentive plans and a deduction of a reserve for capital expenditures, tenant inducements, and leasing costs. The method applied by the REIT to calculate AFFO differs from the definition of AFFO as defined by Realpac. Management considers these non-cash adjustments important in determining the amount of sustainable cash available to fund future distributions to Unitholders.
Forward-looking Statements
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking statements are provided for the purposes of assisting the reader in understanding the REIT's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned such statements may not be appropriate for other purposes. Forward-looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry, outlook and anticipated events or results, and may include statements regarding the use of net proceeds from the Offering including the acquisition of either or both of the Potential Acquisition Properties, the completion of future acquisitions or investments by the REIT, as well as the financial position, business strategy, budgets, projected costs, capital expenditures, financial results, financing rates and costs, taxes, plans and objectives of or involving the REIT. In some cases, forward-looking information can be identified by such terms as "may", "might", "will", "could", "should", "would", "expect", "plan", "anticipate", "believe", "intend", "seek", "aim", "estimate", "target", "goal", "project", "predict", "forecast", "potential", "continue", "likely", or the negative thereof or other similar expressions suggesting future outcomes or events.
Forward-looking statements involve known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, risks related to the Units and risks related to the REIT and its business. See the REIT's Annual Information Form for the year ended December 31, 2018, annual MD&A at "Risks and Uncertainties" and the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements as there can be no assurance actual results will be consistent with such forward-looking statements.
Information contained in forward-looking statements is based upon certain material assumptions applied in drawing a conclusion or making a forecast or projection, including management's perception of historical trends, current conditions and expected future developments, as well as other considerations believed to be appropriate in the circumstances, including the following: the REIT will acquire either or both of the Potential Acquisition Properties; the Canadian economy will remain stable over the next 12 months; inflation will remain relatively low; interest rates will remain relatively stable; conditions within the real estate market, including competition for acquisitions, will be consistent with the current climate; the Canadian capital markets will provide the REIT with access to equity and/or debt at reasonable rates when required; Starlight Group Property Holdings Inc., or any of its affiliates will continue its involvement as asset manager of the REIT in accordance with its current asset management agreement; and the risks referenced above, collectively, will not have a material impact on the REIT. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
The forward-looking statements made in this news release are dated and relate only to events or information as of the date of this news release. Except as specifically required by applicable Canadian law, the REIT undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
SOURCE True North Commercial Real Estate Investment Trust
Daniel Drimmer, President and Chief Executive Officer, (416) 234-8444 or Tracy Sherren, Chief Financial Officer, (416) 234-8444
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