TORONTO, Oct. 23 /CNW/ - Whiterock Real Estate Investment Trust (TSX:WRK.UN) announced today that it has entered into a binding contract, subject to customary closing conditions, to acquire 460 Two Nations Crossing, located in Fredericton, for $9.7 million before closing costs. Whiterock will have a 40% equity interest in the property, a long-term property management contract and a right of first opportunity to purchase the partner's interest in the asset. Whiterock's partner on this acquisition is an established institutional investor that focuses on high quality properties, with visible growing cash flow streams backed by solid covenants and longer term leases.
460 Two Nations Crossing is a newly constructed 50,945 square foot office building located on Two Nations Crossing just northeast of downtown Fredericton. The building is 100% occupied by the Province of New Brunswick with a remaining lease term of 19 years. The property features easy access to a major arterial road, Ring Road, and is within 10 minutes of downtown Fredericton and within 30 minutes of the Greater Fredericton Airport.
Whiterock's equity investment in this property, after assumption of the existing debt, will be approximately $1.3 million, with an in-place AFFO return of 17%. Whiterock intends to use cash on hand to finance its investment. On acquisition, the in-place AFFO from the property will add almost $0.05 per unit to Whiterock's annualized AFFO.
The transaction is scheduled to close in November 2009. On acquisition, Whiterock's portfolio will total 3.4 million square feet across 45 properties, with a weighted average lease term of approximately 8 years. 58% of the portfolio consists of government and investment grade tenants.