Real Estate News Exchange (RENX)
c/o Squall Inc.
P.O. Box 1484, Stn. B
Ottawa, Ontario, K1P 5P6
Canada: 1-855-569-6300

Nexus buying 50% stake in new Montreal fulfillment centre

Nexus REIT (NXR-UN-T) will acquire a 50 per cent non-managing interest in a newly constructed 309...

IMAGE: IMAGE: Nexus REIT logo.Nexus REIT (NXR-UN-T) will acquire a 50 per cent non-managing interest in a newly constructed 309,000-square-foot, automated grocery fulfillment centre in Pointe-Claire, Que., from Crombie REIT (CRR-UN-T) for $98.2 million.

The class-A property, located at 2400 Trans-Canada Highway in the Greater Montreal city, is fully leased on a long-term, triple-net basis to a subsidiary of Empire. The grocery giant operates its Quebec Voilà par IGA e-commerce platform out of the facility, which also includes about 186,000 square feet of mezzanine space.

“We are extremely pleased to be purchasing a 50 per cent share of a brand-new, state-of-the-art CFC (customer fulfilment centre) in one of Canada’s strongest markets.” said Kelly Hanczyk, Nexus REIT’s chief executive officer, in the announcement Tuesday morning.

“This automated facility located on the island of Montreal is anchored by a long-term lease with a subsidiary of Empire, an excellent investment-grade covenant. 

“More importantly, it represents the beginning of what we believe will be a long-term relationship with Crombie REIT, one of Canada’s largest and most respected national REITs.”

Crombie to continue to manage property

Nexus plans to assume $61.5 million of existing mortgage financing, with approximately 15 years remaining in the term.

The balance is to be satisfied in cash. Nexus says it has sufficient liquidity available from its credit facilities and unencumbered properties to finance this acquisition and other properties it has under contract.

The agreement is conditional upon mortgage assumption and other approvals and is expected to close in December 2021.

Crombie will continue to manage the property via a property management agreement with Empire.

“We are pleased with this transaction as it speaks to the quality of our retail-related industrial portfolio and our attractiveness as a partner in completing joint arrangements, where Crombie retains both an ownership interest and ongoing property management,” said Don Clow, president and CEO of Crombie, in a separate release.

“Crombie continues to access multiple sources of capital and remains committed to a strong and improving balance sheet. 

“The net proceeds from the partial interest sale will primarily be used to support our continued investment in Empire-related initiatives and our development program as we continue to focus on creating an optimal asset mix of grocery-anchored retail combined with mixed-use residential and retail-related industrial properties in Canada’s top urban markets.”

BMO Capital Markets acted as exclusive advisor to Crombie in connection with the establishment of the joint operation.

About Nexus and Crombie REITs

Nexus is a growth-oriented commercial REIT with a quality portfolio of industrial, office and retail properties in Canada. It’s focus is on acquiring and owning industrial properties.

Nexus owns a portfolio of 94 properties comprising approximately 8.3 million square feet of gross leasable area.

Crombie REIT’s portfolio includes grocery-anchored retail, shopping centres, industrial and mixed-use developments in Canada’s top urban and suburban markets.

Crombie is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of Ontario.

Industry Events