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AIP Realty Trust cancels unit offering, industrial acquisition

AIP Realty Trust (AIP-U-X) is cancelling an offering to raise up to US$25 million in equity and w...

IMAGE: The new light industrial property in Mesquite, TX. (Courtesy AIP Realty Trust)

The new light industrial property in Mesquite, Texas. (Courtesy AIP Realty Trust)

AIP Realty Trust (AIP-U-X) is cancelling an offering to raise up to US$25 million in equity and will not exercise a previously announced intention to buy a new light industrial facility in Texas, the firm says.

AIP Realty Trust has offices in Toronto and in Lewisville, Texas, and trades on the Canadian TSX Venture Exchange.

In June, AIP had announced its intention to issue up to $25 million (all figures US unless otherwise noted) worth of units at a per-unit price of $2 via a short-term prospectus in Canada. It was to be led by Laurentian Bank Securities Inc. and Raymond James Ltd., and iA Private Wealth Inc. and Canaccord Genuity Corp.

Last week, AIP Realty Trust followed that announcement with a release stating it would acquire a 49,713-square-foot property in the Mesquite, Texas market from its exclusive development and property management partner, Dallas-based AllTrades Industrial Properties, Inc.

Cancellation of AIP’s unit offering

The announcement on Wednesday states: “The trust will not be exercising its option to acquire the Mesquite property at this time; however, it retains the exclusive right to do so in the future if certain conditions are met.”

Mesquite is part of the Dallas-Fort Worth region, and the property is the first of several AllTrades developments which AIP has rights to acquire.

Cancellation of the offering itself follows an assessment by AIP that “current market conditions are not conducive for an offering on terms that would be in the best interests of AIP’s unitholders,” an announcement on Wednesday states.

AIP units were trading at $1.26 this morning, and since commencing trading in April, have traded as high as $2.59 and as low as $1.25.

On the acquisition and development front, AIP says AllTrades is continuing its pipeline of new light industrial flex properties in both Dallas-Fort Worth and Austin.

The first five Texas properties in this venture were announced in May and comprise a total of about 376,000 square feet of leasable space:

Location Rentable Square Feet WorkSpace Shops™ WorkSpace Studios™ WorkSpace Secured Parking™ spaces
Mesquite 49,713 12 10 32
Lewisville 69,000 22 6 27
Carrollton 100,000 22 22 54
Frisco 75,000 22 6 45
Plano 82,000 30 51

The Mesquite property was 96 per cent leased upon completion of construction, AIP reports, and it said pre-leasing on the other facilities was progressing according to forecasts “at an equivalent stage.”

Units in the building are divided into a variety of offerings, known as WorkSpace Shops, WorkSpace Studios and amenities include parking spaces.

Each of the properties has a different mix of these types of units, with varied features.

Future industrial development by AllTrades

In addition to these properties, AIP reports AllTrades is to begin development on six facilities this month, being “fully funded” from AllTrades and Trinity Investors, a $6-billion Dallas-based real estate private equity fund.

AllTrades also plans to start another six facilities by the end of this year.

AIP’s agreement with AllTrades provides it the option to purchase these facilities in the future.

AIP Realty Trust was established to create a portfolio of light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S.

Its management team is headed by executive chairman Leslie Wulf and president/CEO Greg Vorwaller.

With an initial focus on the Dallas-Fort Worth market, AIP says it has plans to expand the portfolio into other U.S. markets.

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