Parkit Enterprise Inc. is continuing its expansion into the industrial sector with the acquisition of its third such property in the Greater Toronto Area. While the $12.25-million acquisition isn’t large by Toronto standards, the property is adjacent to one of its existing assets and has the capacity for significant expansion.
The site at 5610 Finch Ave. E. gives Parkit (PKT-X) a total of over 11.6 acres of land at the property – it bought 5600 Finch Ave. E. in November when the firm made its first industrial acquisitions.
The firm is also seeking to raise about $84 million in new equity through share issuances.
The class-A building adds 54,853 square feet of GLA to its current portfolio, but together with the 5600 Finch property the site can be expanded by another 62,000 square feet.
In total, once the transaction closes and pending the new development, the properties could contain more than 245,000 square feet of GLA.
“The proposed acquisition is a natural purchase for Parkit as it not only supports the company’s strategy of acquiring high-quality industrial properties in the Greater Toronto Area but provides for a valuable expansion opportunity and optionality in the future,” said Parkit chairman Steve Scott in the announcement Tuesday morning.
Parkit’s Finch avenue properties
According to a sale brochure marketed by Colliers International, the building is a combined distribution centre and office. Constructed as a design-build in 2001, it features 26-foot clear ceiling heights and contains three truck-level and two drive-in shipping doors.
The office portion of the building is constructed on two storeys.
Parkit said the transaction is expected to close on or before March 31. It intends to finance the acquisition through its existing cash resources and mortgage financing.
Traditionally an owner/operator of parking facilities in Canada and the United States, Parkit management announced in November 2020 it would expand into the industrial sector, acquiring the Finch Avenue site and a second property in Burlington.
Still seeking parking properties
“I am an opportunistic investor,” Parkit CEO Avi Geller told RENX at that time. “I’m always looking to come into a situation where I think I’m getting in at a good time, at a good price.”
Geller and Scott both said Parkit does not intend to exit its parking business, though the firm did divest one of its properties in Connecticut for about $5.7 million in early December. That was held in partnership with its OP Holdings Joint Venture.
Geller said parking assets remain hard to acquire, and are often expensive. The move into industrial offers the firm a better chance to continue to expand its holdings, he explained.
Through its joint ventures, Vancouver-based Parkit still owns four parking properties valued at about $75 million. Its industrial holdings will comprise three properties and about 290,000 square feet of GLA once the 5610 Finch transaction closes.
Parkit’s new equity initiatives
Following the acquisition announcement, Parkit also announced it plans to raise up to $69 million through private placements, and up to $15 million more via the issuance of common shares to other subscribers.
The bought-deal private placement offering is being led by Stifel GMP and Scotiabank and includes a $60-million offering plus 15 per cent overallotment provision. Parkit is issuing up to 72,631,585 shares at $0.95 per share as part of this offering.
The concurrent $15 million offering is being made on the same terms.
Both offerings are scheduled to close on or about Feb. 17.
Parkit plans to use the proceeds for future acquisitions and “general corporate purposes”.