Press Release

Crombie REIT Announces $161.6 Million Portfolio Disposition

Company Release - 4/11/2019 7:48 AM ET

NEW GLASGOW, NS, April 11, 2019 /CNW/ - Crombie Real Estate Investment Trust ("Crombie") (TSX: CRR.UN) announces today that it has entered into an agreement of purchase and sale to sell an 89% non-managing interest in a 26 property portfolio ("Portfolio") for an aggregate purchase price of approximately $161.6 million ("the "Disposition" or "Transaction") to a U.S. Private Equity group ("Buyer").

Crombie will retain an 11% ownership interest and will continue to manage and operate the properties. The Buyer has waived due diligence conditions on the Transaction, with the potential to waive on the acquisition of an additional three properties for a total of 29 properties. The aggregate purchase price for the 89% interest in the 29 property portfolio is approximately $190.9 million.

This transaction is part of Crombie's previously announced plan to recycle capital from the sale of certain non-core, and/or lower growth assets. None of the assets subject to the Transaction are included in Crombie's mixed use development pipeline.

"This transaction is another example of our team's solid execution against strategy," said Don Clow, President and CEO. "Such partial dispositions at pricing in line with IFRS fair values highlight the quality and value of our portfolio and demonstrate our attractiveness as a strong managing partner."

Highlights of the Transaction include:

  • The aggregate selling price is in line with IFRS fair values.
  • All the properties are subject to long term leases with Sobeys.
  • Improves the REIT's urban concentration as 100% of the Transaction properties are in secondary and tertiary markets.
  • Crombie will head lease the properties from a new jointly owned nominee with terms that mirror the terms of the Sobeys leases.
  • As partial consideration for the Transaction, the Buyer will assume an 89% interest in 10 mortgages which will be assigned to the new jointly owned nominee with Crombie remaining as guarantor until mortgage maturity.
  • Proceeds to Crombie net of mortgage assumptions and transaction costs are estimated to be approximately $107.8 million, or approximately $123.6 million if the additional three properties close.
  • Use of proceeds will be directed towards pursuing our value creating mixed use major development pipeline, funding of capital investments in Sobeys occupied properties, repaying existing indebtedness and general trust purposes.
  • The 26 property Transaction is expected to close on or about April 25, 2019 subject to receipt of Competition Act approval and other customary conditions. The additional three properties, should conditions be waived, are expected to close on or shortly after April 25, 2019.

The Disposition includes approximately 883,167 square feet of primarily free-standing grocery anchored properties in secondary and tertiary markets.

Property Portfolio details:

 


Property

Property Address

City, Province

Anchor Tenant

Property GLA

1

100 Mile House

575 Alder Ave

100 Mile House, BC

Safeway

21,377

2

Antigonish

151 Church Street

Antigonish, NS

Sobeys

51,272

3

Bird's Hill

3156 Bird's Hill Rd E

St Paul, MB

Sobeys

39,193

4

Bromptonville

50 rue Bourgeoys

Bromptonville, QC

IGA

23,006

5

Castlegar

1721 Columbia Ave

Castlegar, BC

Safeway

27,190

6

Catherwood

105-107 Catherwood St

Saint John, NB

Lawtons

45,916

7

Chatham

215 Park Ave W

Chatham, ON

Sobeys

48,000

8

Dawson Creek

11200 8th St

Dawson Creek, BC

Safeway

42,754

9

Fenelon Falls

15 Lindsay St

Fenelon Falls, ON

Sobeys

34,610

10

Grand Falls

21 Cromer Ave

Grand Falls, NL

Sobeys

27,287

11

Havelock

32-38 Ottawa St

Havelock, ON

Sobeys

14,866

12

Kenora

400 First Ave South

Kenora, ON

Safeway

36,730

13

Fairway Plaza

2750 Fairway Plaza Rd S

Lethbridge, AB

Safeway

63,514

14

Louiseville

714 Blvd St-Laurent Ouest

Louiseville, QC

IGA

23,176

15

Matane

551 Ave du Phare Est

Matane, QC

IGA

30,415

16

Neepawa

498 Mountain Ave

Neepawa, MB

Safeway

18,349

17

New Waterford

75 Emerald St

Scotchtown, NS

Sobeys

26,023

18

Niagara Falls

5931 Kalar Rd

Niagara Falls, ON

FreshCo

36,005

19

Okotoks

410 & 610 Big Rock Lane

Okotoks, AB

Safeway

41,844

20

Placentia

71 Blockhouse Rd

Placentia, NL

Sobeys

19,602

21

Quesnel

445 Reid Street

Quesnel, BC

Safeway

30,499

22

Rimouski

395 Ave Sirois

Rimouski, QC

IGA Extra

47,135

23

Rouyn-Noranda

680 Ave Chaussée

Rouyn-Noranda, QC

IGA Extra

43,037

24

Sheet Harbour

22579 Hwy 7

Sheet Harbour, NS

Foodland

8,992

25

Ste-Anne-de-Beaupré

10505 Blvd Ste-Anne

Ste-Anne-de-Beaupré, QC

IGA

38,128

26

St Georges de Beauce

8980 Blvd Lacroix

St Georges de Beauce, QC

IGA

44,247


Total




883,167

Three Additional Properties

27

Moose Jaw

200-1 Ave NW

Moose Jaw, SK

Safeway

38,656

28

Prince Albert

2895-2 Ave W

Prince Albert, SK

Safeway

55,949

29

Charlottetown

400 University Ave

Charlottetown, PE

Sobeys

49,987


Total




1,027,759

 

BMO Capital Markets Real Estate Inc. is acting as exclusive advisor to Crombie REIT on this transaction.

About Crombie REIT
Crombie Real Estate Investment Trust ("Crombie") is an unincorporated, open-ended real estate investment trust established under, and governed by, the laws of the Province of Ontario. Crombie is one of the country's leading national retail property landlords with a strategy to own, operate and develop a portfolio of high quality grocery- and drugstore-anchored shopping centres, freestanding stores and mixed use developments primarily in Canada's top urban and suburban markets. More information about Crombie can be found at www.crombiereit.com.

Forward-looking Information
This news 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.  These statements reflect current beliefs and are based on information currently available to management of Crombie. Forward-looking statements necessarily involve known and unknown risks and uncertainties. A number of factors, including those discussed in the 2018 annual Management Discussion and Analysis under "Risk Management", 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. Readers are cautioned that such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these statements. Crombie can give no assurance that actual results will be consistent with these forward-looking statements. Specifically, this document includes, forward-looking statements regarding the anticipated timing for completion of pending co-ownership transactions, and statements regarding Crombie's intended use of proceeds from completed and pending dispositions, which may depend on Crombie's financial requirements at the time proceeds are received.

 

SOURCE Crombie REIT

Media Inquiries: Glenn Hynes, FCPA, FCA, Executive Vice President, Chief Operating Officer, Chief Financial Officer and Secretary, 902-755-8100; Claire Mahaney Lyon, CFA, MFM, Manager, Investor Relations, 902-474-6670