The property, at 165 Chain Lake Drive, is fully leased to a single national retail tenant – Value Village – on a long-term lease. Closing is expected prior to month end and is subject to customary conditions. The purchase price represents a going-in capitalization rate of seven per cent, rising to 7.6 per cent in 2018.
“A strong addition”
“The Chain Lake Drive acquisition, with a single national tenant in the specialized retail market, will be a strong addition to the PROREIT portfolio,” James W. Beckerleg, president and CEO, said in a release announcing the transaction.
“Our acquisition pipeline is strong and we expect other quality acquisitions to be announced and closed before the end of the year.”
165 Chain Lake Drive is a 44,720-square-foot, freestanding retail building built in 2005 and expanded in 2007. It stands on 3.6 acres of land with 195 parking stalls.
Located on an elevated pad in the Bayers Lake retail power centre, one of the largest destination shopping, dining and entertainment areas in Atlantic Canada, the site offers good visibility.
PROREIT has received new 10-year $5.3 million committed financing from a major national financial institution in anticipation of mortgage financing.
The interest rate on the new mortgage is anticipated to be approximately 3.9 per cent and will be amortized over 25 years. The balance of the purchase price will be paid from cash-on-hand from the REIT’s recent bought-deal financing.
43 properties across Canada
Once the acquisition of 165 Chain Lake Drive is completed, the PROREIT portfolio will consist of 43 properties across Canada, with total gross leasable area of 2,383,853 square feet.
According to PROREIT’s website, it owns eight other properties in Nova Scotia, representing about 20 per cent of its total holdings.
The Montreal-based trust is heavily invested in New Brunswick, with 17 properties representing about a third of its portfolio. The REIT, which was formed in 2013, also owns properties in Quebec, Ontario, Alberta and P.E.I.