Nexus Industrial REIT T.NXR.UN

Alternate Symbol(s): EFRTF

Nexus Industrial REIT is a Canada-based open-ended real estate investment trust. The Company and its subsidiaries own and operate commercial real estate properties across Canada. The Company is focused on increasing unitholder value through the acquisition of industrial properties located in primary and secondary markets in Canada, and the ownership and management of its portfolio of properties. It owns a portfolio of 119 properties comprising approximately 13.0 million square feet of gross leasable area. Its industrial properties include 11250 - 189 STREET, 3501 GIFFEN ROAD NORTH, 10774 - 42 STREET SE, 261185 WAGON WHEEL WAY, 502-25 AVENUE and others. Its office properties include 127-145 RUE SAINT-PIERRE, 360 RUE NOTRE-DAME WEST, 329 RUE DE LA COMMUNE WEST, 353 RUE SAINT NICOLAS, 410 RUE SAINT NICOLAS, 2045 Rue Stanley, and others. Its retail properties include 2000 BOULEVARD LOUIS-FRECHETTE, 250 BOULEVARD FISET AND 240 RUE VICTORIA, 340 RUE BELVEDERE SOUTH and others.

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Nexus Industrial REIT > BMO analyst update

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Comment by GassXXon Oct 18, 2021 2:27pm

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Post# 34019183

RE:BMO analyst update

CanSiamCyp wrote:
Steadily Executing on the Portfolio Transformation

Bottom Line:

We maintain our Outperform rating and target price on Nexus REIT following thecompletion of previously announced acquisitions. We continue to favourably viewNexus's transformation towards being a nearly pure-play industrial REIT, as well as theREIT's ability to continue to source its industrial acquisitions on an off-market basis. Weexpect the valuation gap between Nexus and its pure-play Canadian industrial REITs willcontinue to close as Nexus’s portfolio transformation progresses at a steady cadence.

Key Points

Equity issue. On August 23, 2021, NXR.UN closed on the issuance of 9,918,750 units(includes the full over-allotment) at $11.30/unit for gross proceeds of $112.1M. Proceedswere utilized towards the partial funding of the acquisition of a portfolio of threedistribution centres (discussed below) and for general corporate purposes.

Keeping cadence on portfolio transformation towards a higher industrialweighting. On October 1, 2021, NXR.UN closed on the previously announced acquisitionof three distribution centres for $230.4M. The three acquired properties are all single-tenant distribution centres with clear heights ranging from 37 to 46 ft. and totalling~1.4M sf. Two of the distribution centres are located in Moncton, NB and one is inRegina, SK. The acquisitions were partially funded with $172.4M of mortgage financing(10yr term with a weighted average interest rate of 2.84%). Nexus's acquisitionpipeline remains active. The REIT expects to complete the previously announced $44.1Macquisition of an industrial property in London, ON (391K sf) in November. NXR.UN alsoexpects to close on the previously announced $58.2M acquisition of four industrialproperties in London, ON in early 2022. Furthermore, the REIT is in advanced stages ofnegotiation with respect to the acquisition of additional properties for the remainderof 2021. Pro forma the aforementioned acquisitions, we expect industrial will represent~80% of the REIT's NOI vs. 73% in Q2/21.

Establishment of ATM equity program. On September 24, 2021, NXR.UN announced ithas established a $50M at-the-market equity program. The ATM equity program will beeffective until August 17, 2023. NXR.UN intends to utilize the net proceeds from the ATMequity program to fund future acquisitions and developments, repay indebtedness, aswell as for general working capital purposes.