Nexus REIT to acquire 2 industrial properties for $64m

by Paolo Taruc 28 Mar 2018 MBN

Nexus Real Estate Investment Trust has announced it has entered into conditional agreements to acquire two industrial properties in Richmond, British Columbia and one in Regina, Saskatchewan for approximately $64m.

The REIT’s CEO Kelly Hanczyk expects the acquisitions to generate increases in its AFFO per unit and also result in significant improvement in its NAV/unit once the repurposing associated with the Richmond assets is complete. “We are currently in negotiations with several additional vendors for similar unit structured deals and hope that these are the first in a series of transactions that we will announce in the near future and complete in the second quarter," Hanczyk added.

The CEO expects the acquisitions to grow Nexus’ market capitalization by approximately $22.7m – without the need to raise equity in the public markets. The Richmond, British Columbia properties are two industrial buildings being acquired for a contractual purchase price of $57.4m with a 6.5% capitalization rate. Meanwhile, the Regina, Saskatchewan asset is a multi-tenant industrial property which the REIT will acquire for a purchase price of $6.6mand a going in cap rate of 7.5%. The property consists of two single buildings.

Nexus also announced the sale of two non-core properties in Kelowna, BC and Yellowknife, NWT for $11.3m, about $2.6m greater than the original purchase price.

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