Summit Industrial Income REIT Announces $200 Million Equity Offering and Update on Near-Term Acquisitions
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
THIS PRESS RELEASE CONSTITUTES A "DESIGNATED NEWS RELEASE" FOR THE PURPOSES OF SUMMIT INDUSTRIAL INCOME REIT'S PROSPECTUS SUPPLEMENT DATED JUNE 21, 2021 TO ITS BASE SHELF PROSPECTUS DATED JUNE 21, 2021
TORONTO, March 24, 2022 (GLOBE NEWSWIRE) -- Summit Industrial Income REIT (“Summit” or the “REIT”) (TSX: SMU.UN) announced today that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets (collectively, the "Underwriters") to sell, on a bought deal basis, 9,030,000 Units of the REIT (the “Units”) at a price of $22.15 per Unit for gross proceeds to Summit of approximately $200 million (the "Offering"). In addition, Summit has granted the Underwriters an over-allotment option to purchase up to an additional 1,354,500 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering. The Offering is expected to close on or about March 31, 2022 and is subject to customary conditions, including approval of the Toronto Stock Exchange.
The Units will be offered by way of a prospectus supplement to the REIT’s short form base shelf prospectus dated June 21, 2021, which prospectus supplement is expected to be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada on or about March 28, 2022.
In keeping with its commitment to a disciplined approach to capital allocation as well as maintaining conservative debt metrics and ample liquidity levels, the REIT intends to use the net proceeds of the Offering, including any exercise of the Over-Allotment Option, to:
1) Fund approximately $29 million for a 50% interest in a joint venture partnership, with respect to a well-located 40-acre development ready site in close proximity to the 401 and other existing REIT properties just outside of the GTA (the “Development Site”), subject to customary conditions;
2) Fund the recently announced approximately $25 million acquisition of a 76,000 square foot single-tenant property located in Vaughan, Ontario (see our March 22 announcement);
3) Fund the approximately $39 million near-term acquisition of the expected 150,000 square foot net zero carbon expansion project on the Trans-Canada Highway in Pointe-Claire, Quebec upon completion (see our February 23 announcement);
4) Fund potential near term acquisitions of well-located properties in the GTA, for an anticipated, aggregate purchase price of approximately $95 million, subject to customary adjustments, that the REIT is actively pursuing and is subject to customary conditions, including the REIT being satisfied with its due diligence; and,
5) Repay certain amounts outstanding under its unsecured credit facilities (approximately $110 million currently outstanding) that were drawn during Q1 to fund recently announced acquisitions including:
- The 226,000 square foot industrial property located on the Trans-Canada Highway in Pointe-Claire, Quebec (see our February 23 announcement);
- The remaining 50% interest in 2 LEED certified buildings in the Hanlon Creek Business Park (see our January 18 announcement);
6) For general trust purposes.
Pro forma the Offering, the intended use of proceeds, and previously disclosed activities subsequent to Q4 2021, the REIT’s consolidated leverage is expected to be approximately 30%. Given the accretive nature of the acquisitions and the cost of debt that will be repaid, the REIT expects the Offering and the intended use of proceeds to be immediately accretive to the REIT.
The closing of the Offering is not conditional upon the closing of any of the foregoing acquisitions.
“Since the inception of Summit, management has had conviction in its investment strategy and the strength of the Canadian light industrial market. We are pleased that our strategy and investment focus have been proven out in the performance that we have continued to deliver to unitholders,” commented Dayna Gibbs, Chief Operating Officer. “Management remains committed to sourcing attractive investment opportunities, both income producing and for our development platform, that continue to accretively grow the REIT’s portfolio.”
The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the “1933 Act”) and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.
About Summit Industrial Income REIT
Summit Industrial Income REIT is an unincorporated open-end trust focused on growing and managing a portfolio of light industrial properties in key markets across Canada. Summit's units are listed on the TSX and trade under the symbol SMU.UN. For more information, please visit our web site at .
Caution Regarding Forward Looking Information
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", “goal” and similar expressions are intended to identify forward-looking information or statements. Forward-looking information may relate to future results, performance, achievements, events, prospects or opportunities for the REIT or the real estate industry, outlook and anticipated events or results. More particularly and without limitation, this news release contains forward-looking statements and information with respect to the following: the intention of the REIT to complete the real estate transactions described in this press release; and to complete the Offering on the terms and conditions described herein; the date on which the closing of the Offering is expected to occur; the timing for the filing of the prospectus supplement; the use of the proceeds of the Offering; and Summit’s plans, goals, strategies, intentions, beliefs, estimates, costs, objectives, economic performance or expectations or the assumptions underlying any of the foregoing.
A variety of factors, many of which are beyond the REIT's control, affect the operations, performance and results of the REIT and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in the REIT's materials filed with Canadian securities regulatory authorities from time to time on Readers are cautioned to consider these, and other factors, uncertainties and potential events carefully as there can be no assurance that actual results will be consistent with such forward-looking statements.
The forward-looking statements and information are based on certain key expectations and assumptions made by Summit, including general economic conditions. Although Summit believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Summit can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed, and given the impact of the COVID-19 pandemic and government measures to contain it, as well as the current geopolitical environment, there is inherently more uncertainty associated with the REIT’s assumptions as compared to prior periods. These risks and uncertainties include, but are not limited to, tenant risks, current economic environment, geopolitical events, including disputes between nations, war and international sanctions, environmental matters, general insured and uninsured risks and Summit being unable to obtain any required financing and approvals.
Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Summit undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
For more information, please contact:
Summit Industrial Income REIT
Dayna Gibbs
Chief Operating Officer
(905) 791-1181, ext. 220
