Nexus REIT has entered contracts to acquire commercial assets in Edmonton, Alberta and London, Ontario, for $56.1 million.
The separate conditional purchase and sale agreements will see the REIT acquire a combined gross leasable area of approximately 496,000 square feet.
“The aggregate purchase price represents a weighted average going-in capitalization rate of 6%,” the trust said. “The acquisitions are conditional on the REIT completing due diligence to its satisfaction, and one of the transactions will require TSX and unitholder approval for the issuance of Class B LP Units of a subsidiary limited partnership of the REIT as partial purchase price consideration.”
The units will be priced at $8.6278 apiece, “being the volume weighted average trading price of the REIT’s units for the five days prior to the April 26, 2021 purchase and sale agreement execution date.”
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“The REIT anticipates that these acquisitions will be funded with cash on hand, $28,500,000 of Class B LP Units issued as consideration, assumed mortgage financing and with the proceeds of new mortgage financing to be placed on the properties,” the company said.
Nexus REIT is anticipating the Edmonton acquisition to close on July 04, and the London acquisition on November 01.
“The vendor of the London, Ontario, property we have put under contract is the same vendor that we acquired six industrial properties from earlier this month,” said Kelly Hanczyk, chief executive officer of Nexus REIT. “We are very excited to be working with this vendor on another deal, and we hope that this relationship will lead to more properties being vended to the REIT in the future.”