Canadian-Based Granite Real Estate Investment Trust Acquires Commercial Properties in West Jefferson, Ohio
Granite, a Toronto-based REIT engaged in the acquisition, development, ownership and management of predominantly industrial, warehouse and logistics properties in North America and Europe, reported it acquired the commercial sites at a purchase price of $232.5 million, representing an in-going stabilized yield of approximately 6.0%.
The Columbus industrial market has emerged as a major distribution corridor in the United States due to its central location, excellent interstate highway system and strong labour base, company officials said.
According to company officials, the modern e-commerce distribution facilities are single tenanted and currently 100% occupied. Tenants in two of the buildings have expansion options of at least 200,000 square feet. While one of the tenants is currently in liquidation and may vacate the 743,600 square foot building, Granite said it believes the re-leasing prospects for this building are strong.
The Acquisition is subject to customary closing conditions and closing is anticipated to take place later in May 2018. Granite said it expects to fund the purchase through a combination of cash on hand, largely from the proceeds of the dispositions that occurred in January 2018, and a drawdown of its unsecured credit facility.
Michael Forsayeth, Granite's CEO, said, "This acquisition will be immediately accretive to funds from operations and adjusted funds from operations and is another strategic milestone in Granite's transformation from a largely single tenanted REIT to a broadly tenanted, globally diversified industrial real estate business.”
“As a result of this acquisition and initiatives announced earlier in the year, significant progress has been made towards Granite's strategic priorities including a reduction in Magna concentration from 61% at the beginning of the year to 52% as measured by gross leasable area. Also, on a run rate basis, Granite will have made substantial progress towards replacing the cash flow from the 10 properties sold earlier in the year.”
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