Automotive Properties Real Estate Investment Trust has entered agreed to purchase a portfolio of three properties consisting of two Go Auto dealership properties and a vehicle service compound facility in Edmonton.
The combined value of the dealership properties – Ericksen Infiniti and Southtown Hyundai – and the service compound at Kentwood Ford is approximately $23.2 million.
The addition of the Properties to the REIT’s portfolio is expected to be accretive to the REIT’s adjusted funds from operations on a per unit basis.
On closing, the REIT will assume the existing long-term triple-net leases on the properties, each of which expires in June 2028 and include 10 per cent rent escalations effective July 2018 and July 2023.
The leases are indemnified by the parent company of Go Auto.
“This portfolio of properties will be a strong addition to the REIT and this transaction provides important strategic benefits,” REIT CEO Milton Lamb said in a release.
“It expands our relationship with Go Auto, one of Canada’s leading automotive retailers, which further diversifies our tenant base, it builds on our geographic diversification in major markets and the transaction is expected to be accretive to AFFO per unit.”
The Ericksen Infiniti property includes a 25,550 square-foot dealership facility built in 2008 sitting on approximately two acres. The Southtown Hyundai property includes a 13,357 square-foot dealership facility built in 2004 sitting on 2.38 acres. The Kentwood Ford vehicle service compound property is located on approximately 4.1 acres.
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada.
Its current portfolio consists of 35 income producing commercial properties representing approximately 1.4 million square feet of gross leasable area in metropolitan markets across Ontario, Saskatchewan, Alberta, British Columbia and Québec.
It is also the only public vehicle in Canada focused on consolidating automotive dealership real estate properties.