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Russell Lake Sobeys in Dartmouth. (Google Street View image)
Firm Capital Property Trust (FCD-UN-X) has bought a 50 per cent interest in a portfolio of seven retail properties in five provinces from Crombie REIT (CRR-UN-T) for $41.6 million.
In a release issued late Monday, Firm calls the acquisition “transformative” to its business. The acquisition expands Firm’s current portfolio by about 19 per cent, to $263 million in holdings.
“We are pleased to be able to partner with one of Canada’s premier owner and operators of grocery-anchored retail properties.” said Robert McKee, the president and CEO of Firm, in the release.
The transaction involves seven properties totalling 296,376 square feet. Six of the properties are anchored by Sobeys-owned grocery stores and the other is anchored by a Shoppers Drug Mart store.
The portfolio is 100 per cent occupied and will continue to be managed by Crombie.
Properties in the transaction
Included in the transaction are:
* Forest Hills Cole Harbour: 2 Forest Hills Parkway, Dartmouth, N.S., 43,585 square feet, anchored by Sobeys;
* Russell Lake shopping centre: 268 Baker Drive, Dartmouth, 61,485 square feet, anchored by Sobeys;
* 13th Avenue Regina Safeway: 2915 13th Avenue, Regina, 40,717 square feet;
* University Park shopping centre: 2231 East Quance Street, Regina, 37,219 square feet, anchored by Sobeys;
* Coliseum Safeway: 8118 118 Avenue NW, Edmonton, 44,308 square feet;
* 409 Bayfield St., Barrie, 47,742 square feet, anchored by FreshCo;
* 1 Westminster Avenue N., Montreal, 20,960 square feet, anchored by Shoppers Drug Mart.
The partnership brings together a company which was in the market to increase its portfolio, with a trust looking to raise equity for ongoing major development projects at its properties across the country.
Crombie has interests in more than 300 commercial properties across Canada, according to its website. It is currently involved in developing a series of commercial/residential projects which will result in about 1.4 million square feet of GLA (about 450,000 commercial and the rest for residential).
Crombie said it expects to invest more than $500 million in its mixed-use, active development projects during the next few years.
Firm has been steadily purchasing interests in properties for the past two years, expanding the portfolio from about $130 million early in 2016.
The acquisition is being financed through existing cash resources (including the trust’s credit facility) and new and existing mortgages. It is expected to close before the end of Q1 2019.
Firm says the ROI for the transaction is approximately 10.5 per cent.
About Firm Capital Property Trust, Crombie REIT
FCPT’s strategy is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space.
In addition to stand-alone properties, FCPT makes joint acquisitions with selected partners in a manner that provides liquidity to those selling owners, and professional management for those remaining as partners. Firm Capital Realty Partners Inc. syndicates, and property and asset manages investments on behalf of the trust.
Crombie REIT is an unincorporated, open-ended real estate investment trust incorporated in Ontario.
Crombie is one of the country’s leading national retail property landlords with a strategy to own, operate and develop a portfolio of grocery- and drug store-anchored shopping centres, freestanding stores and mixed-use developments primarily in Canada’s top urban and suburban markets.
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