TORONTO, ONTARIO--(Marketwired - June 27, 2017) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
WPT Industrial Real Estate Investment Trust (TSX:WIR.U) (the "REIT") announced today that it has entered into agreements to
acquire two distribution properties - one in the Portland, Oregon metropolitan area and one in the Houston, Texas metropolitan
area - comprising a total of approximately 903,154 square feet of gross leasable area for an aggregate purchase price of
approximately US$96,400,000 (exclusive of closing and transaction costs) representing a blended stabilized capitalization rate of
approximately 5.1%.
The Portland and Houston properties are both highly-functional, modern, Class A buildings located in highly-desirable
submarkets. On a blended basis, the properties have an occupancy rate of 93.7%, annual rent increases of 2.5%, weighted average
remaining lease term of 7.4 years, average building clear height of 31.3 feet and an average building age of 3.5 years.
The REIT continues to proceed with its due diligence investigation of both properties. Assuming satisfaction of all
closing conditions including the waiver of diligence conditions, it is expected that the acquisition of the Portland property
will be completed on or about the first week of July 2017, while the acquisition of the Houston property is expected to be
completed on or about the first week of August 2017.
Both properties are being acquired free and clear of existing debt financing. The purchase price for the Portland property
will be initially satisfied using a draw down from the REIT's revolving credit facility. The purchase price for the Houston
property is expected to be satisfied using a combination of proceeds from the equity offering described more fully below and a
draw down from the REIT's revolving credit facility. The REIT anticipates refinancing such draw downs on the revolving
credit facility with permanent financing at a future date.
Scott Frederiksen, Chief Executive Officer of the REIT, commented, "These contemplated acquisitions reflect our commitment to
continued growth and diversification of the REIT. Upon closing, these acquisitions represent a strategic expansion into two new
target markets and demonstrate the REIT's ability to source attractive opportunities in today's market."
The REIT also announced today that the REIT and Welsh Property Trust, LLC ("Welsh") have entered into an agreement to sell to
a syndicate of underwriters co-led by Desjardins Capital Markets, CIBC Capital Markets and RBC Capital Markets, with Desjardins
Capital Markets and CIBC Capital Markets acting as bookrunners, on a bought deal basis, 8,955,000 units of the REIT at a price of
US$12.85 per unit (the "Offering Price") for gross proceeds of approximately US$115,000,000 (the "Offering").
The Offering consists of a treasury offering (the "Treasury Offering") of 5,840,000 units by the REIT for gross proceeds of
approximately US$75,000,000 and a secondary offering (the "Secondary Offering") of 3,115,000 units by Welsh for gross proceeds of
approximately US$40,000,000. In addition, the REIT has granted the underwriters an option (the "Over-Allotment Option")
on the Offering, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional
895,500 units of the REIT from Treasury at the Offering Price to cover over-allotments, if any. The Offering is expected to close
on or about July 18, 2017.
The net proceeds from the Treasury Offering will be used to repay existing outstanding indebtedness under the REIT's revolving
credit facility (currently US$23 million drawn but expected to be drawn down further to complete acquisition of the Portland
property), which can then be re-borrowed and used by the REIT to complete acquisition of the Houston property, as well as for
potential additional future acquisitions, development, working capital and general trust purposes. The REIT will not receive any
proceeds from the Secondary Offering.
Welsh is the former external manager of the REIT and currently holds, directly or indirectly, 4,112 units and 6,722,695 Class
B Units for a total of 6,726,807 units (assuming all Class B Units are redeemed for units of the REIT) representing an
approximate 16.3% effective equity interest in the REIT (assuming all Class B Units are redeemed for units of the REIT, but
otherwise on a non-diluted basis). Welsh's effective equity interest in the REIT is subject to a loan secured by those units
held by Welsh. The net proceeds from the sale of units pursuant to the Secondary Offering will be used to repay in full the
outstanding loan. Upon completion of the Secondary Offering, while Welsh's effective equity interest in the REIT will be
reduced to approximately 7.6%, Welsh's net effective investment in the REIT will be unchanged and will no longer be subject to
any financing or associated collateral pledge of units. In addition, Welsh has agreed that, for a period of 120 days
following the closing of the Offering, it will not, directly or indirectly, offer, sell, contract to sell, secure, pledge, grant
any option right or warrant to purchase or otherwise lend, transfer or dispose of any REIT units (or securities convertible into
or exerciseable, exchangeable or redeemable for REIT units).
The units forming part of the Offering will be offered in Canada pursuant to a short form prospectus to be filed with the
securities commissions and other similar regulatory authorities in each of the provinces of Canada, pursuant to National
Instrument 44-101 - Short Form Prospectus Distributions.
The Offering is subject to certain conditions, including, but not limited to, receipt of all necessary regulatory approvals,
including the approval of the Toronto Stock Exchange.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale
of, the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Units have not been
registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements.
About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant
to a declaration of trust under the laws of the Province of Ontario. The REIT has been formed to own and operate an
institutional-quality portfolio of primarily industrial properties located in the United States, with a particular focus on
warehouse and distribution industrial real estate. WPT Industrial, LP (the REIT's operating subsidiary) indirectly owns a
portfolio of properties consisting of approximately 15.6 million square feet of gross leasable area, comprised of 47 industrial
properties and two office properties located in 12 states within the United States.
Forward-Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities law
("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives,
plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT.
The words" plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate",
"projects", "believes" or variations of such words and phrases or statements to the effect that certain actions, events or
results "may", "will", "could", "would", "might", "occur", "be achieved" or "continue" and similar expressions identify
forward-looking statements. Some of the specific forward-looking statements in this press release include, but are not limited
to, statements with respect to: the closing of the Offering and the expected closing date thereof; the REIT's intended use of
proceeds of the Treasury Offering; the sources of funding of the Portland and Houston property acquisitions; the completion of
the acquisitions of the Portland and Houston properties and the expected timing thereof; the REIT's pursuit of acquisition,
development and investment opportunities. Forward-looking statements are necessarily based on a number of estimates and
assumptions that, while considered reasonable by management of the REIT as of the date of this press release, are inherently
subject to significant business, economic and competitive uncertainties and contingencies. The REIT's estimates, beliefs and
assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to,
the REIT's and each property's future growth potential, results of operations, future prospects and opportunities, the
demographic and industry trends remaining unchanged, no change in legislative or regulatory matters, future levels of
indebtedness, the tax laws as currently in effect remaining unchanged, the continual availability of capital, the current
economic conditions remaining unchanged, continued positive net absorption and declining vacancy rates in the markets in which
the REIT's properties are located, and, with respect to the Portland and Houston properties, reasonable assumptions concerning
future tenancy, market rent rates, tenant improvements, leasing commissions, downtime, and costs of materials.
When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these
statements, as forward-looking statements involve significant risks and uncertainties, including that there can be no assurance
that the Portland and Houston property acquisitions will be completed and if completed on the described terms, and should not be
read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times
at or by which such performance or results will be achieved. A number of factors could cause actual results to differ materially
from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk
Factors" in the REIT's annual information form for the year ended December 31, 2016, which is available under the REIT's profile
on SEDAR at www.sedar.com. These forward-looking statements are made as of the
date of this press release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new information, future events or otherwise.