Calgary Airport property expansionThe acquisition looks good compared to last year's.
- One building built 2019
- 121,456 sq ft.
- $15.9 million
- 100% leased (75% FedEx Ground)
- Cap Rate: 6.25% (7.8% first 2 years)
The land is leased from the Calgary Airport Authority for at least 53 more years.Selling developer has additional leased land, which means there could be competing industrial properties or potential future acquisitions. I'm leaning towards acquisitions since SMU acquired a couple properties from this developer back in 2018. Are they working together/coordinating to prevent overbuilding?
Here's the 2018:
- Two buildings built 2015.
- 227,645 sq ft.
- $29.6 million
- 89% leased.
- Cap rate 5.86%.
https://www.globenewswire.com/news-release/2018/06/06/1518044/0/en/Summit-Industrial-Income-REIT-Announces-Significant-Portfolio-Expansion-and-100-Million-Bought-Deal-Equity-Offering.html https://www.newswire.ca/news-releases/summit-industrial-income-reit-expands-presence-in-calgary-airport-logistics-park-815065954.html Summit Industrial Income REIT ("Summit" or the "REIT") (TSX: SMU.UN) announced today that it has waived conditions and will acquire 100% of a brand new Class A light industrial property totaling 121,456 square feet located in the YYC Logistics Centre, an industrial park under development adjacent to the Calgary International Airport on land leased from the Calgary Airport Authority. The developer of the property has a comprehensive development agreement with the Calgary Airport Authority involving a further 38.2 acres of airport land capable of supporting an additional 465,000 square feet of Class A industrial inventory. Summit acquired two properties from the park developer in 2018. The new building being acquired is 100% leased to two tenants with a weighted average lease term of 4.3 years. 75% of the building is occupied by Fedex Ground. The building has an attractive exterior faade and is extremely functional with a 28-foot clear ceiling height, modern sprinkler systems, an abundance of loading doors, large marshalling areas, ample parking and good circulation.
Summit will pay $15.9 million in cash for the property, funded by its recently completed bought-deal equity offering, generating a stabilized cap rate of 6.25% with a going-in capitalization rate of approximately 7.8% for the first two years due to cost savings on non-recoverable costs. Closing is anticipated on December 2, 2019.
https://www.newswire.ca/news-releases/summit-industrial-income-reit-expands-presence-in-calgary-airport-logistics-park-815065954.html