NEW GLASGOW, NS, Sept. 30, 2024 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announced today that it has entered into a binding agreement to acquire the remaining 50% of Zephyr, in Vancouver, British Columbia, from its partner, Westbank Corp., for an aggregate purchase price of $133 million. Through this acquisition, Crombie will now own 100% of the residential component, in addition to its existing full ownership of the ground floor grocery-anchored retail. The acquisition is scheduled to close in October 2024, subject to Competition Bureau approval.
"We are pleased to announce that upon closing of this transaction, Crombie will become the sole owner of one of Canada's premier rental residential assets. Zephyr is in one of the country's top markets and further enriches the quality of our rental residential platform," said Mark Holly, President and CEO. "The acquisition delivers on our strategy of optimizing our portfolio and to own and operate high-quality assets in vibrant community hubs that serve the everyday essential needs of Canadians. Our strong financial condition allowed us to pursue this important opportunity providing immediate recurring cash flow with significant future growth potential."
Built in 2021, Zephyr is a mixed-use residential asset anchored by Safeway and includes other complementary necessity-based retailers. Well-located in the West End of downtown Vancouver, offering panoramic views of English Bay and Stanley Park, Zephyr is comprised of two residential towers, totalling 330 rental suites, and was 93.9% occupied at June 30, 2024. This community of homes is focused on living-locally and enjoys a high walkability score in a city ranked among the most walkable cities in the world.
As a result of the acquisition, Crombie will fully consolidate Zephyr and assume the additional 50% of existing mortgages, equivalent to approximately $89 million, with remaining term to maturity of over three years with the balance of the purchase price funded by drawing on a new unsecured bank credit facility. Together, the debt has an attractive blended interest rate of 3.4%.
About Crombie REIT
Crombie invests in real estate with a vision of enriching communities together by building spaces and value today that leave a positive impact on tomorrow. As one of the country's leading owners, operators, and developers of quality real estate assets, Crombie's portfolio primarily includes grocery-anchored retail, retail-related industrial, and mixed-use residential properties. As at June 30, 2024, our portfolio contains 304 properties comprising approximately 19.3 million square feet, inclusive of joint ventures at Crombie's share, and a significant pipeline of future development projects. Learn more at www.crombie.ca.
Cautionary Statements
This press release contains forward-looking statements that reflect the current expectations of management of Crombie about Crombie's future results, performance, achievements, prospects, and opportunities. Wherever possible, words such as "may", "will", "estimate"," anticipate", "believe", "expect", "intend", and similar expressions have been used to identify these forward-looking statements.
Specifically, this press release includes forward-looking statements regarding anticipated timing for completion of the acquisition and the impact of the acquisition on the quality of Crombie's residential platform. Forward-looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including the timing and need for regulatory approval, and those discussed in the 2023 annual Management's Discussion and Analysis under "Risk Management" and the Annual Information Form for the year ended December 31, 2023 under "Risks", could cause actual results, performance, achievements, prospects, or opportunities to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully, and a reader should not place undue reliance on the forward-looking statements. There can be no assurance that the expectations of management of Crombie will prove to be correct, and Crombie can give no assurance that actual results will be consistent with these forward-looking statements.
SOURCE Crombie REIT
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