Investment trust continues to expand its industrial portfolio
PRO Real Estate Investment Trust (PROREIT) has completed two key transactions, including the sale of two office properties and the acquisition of an industrial building in Dorval, Québec.
The commercial real estate investment trust finalized the acquisition for a total of $32.6 million and sold two non-core office properties for $26.6 million in gross proceeds.
PROREIT primarily invests in high-quality commercial real estate across Canada, with a growing focus on industrial assets in secondary markets.
Following these transactions, PROREIT’s portfolio now consists of 116 income-generating commercial properties, covering approximately 6.1 million square feet of gross leasable area (GLA). Industrial properties now account for 86% of the portfolio’s GLA and 80% of its base rent.
The recently acquired industrial building, located near Montréal-Trudeau International Airport, spans 134,340 square feet and is fully occupied by a national logistics company. The tenant is under a long-term lease with annual rent escalations and an option to renew.
The total purchase price of the property was $32.6 million, representing a going-in capitalization rate of 6.7%. The acquisition was financed through a $21.2 million five-year first mortgage at a rate of 5.10%, with the remainder funded by proceeds from the sale of non-core properties and a draw on PROREIT’s operating facilities.
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The purchase came after PROREIT completed the sale of two non-core office properties in Ottawa earlier this month.
On September 13, the trust sold the property at 2 Gurdwara Road, a 94,000-square-foot office building, for $15.3 million. The proceeds from this sale were primarily used to pay down a $10.5 million mortgage with an interest rate of 6.6%, which was set to mature in 2025. The remainder was allocated to reducing PROREIT’s credit facility and general working capital purposes.
Additionally, on September 5, PROREIT sold a second office property at 1335 Carling Avenue, covering 69,000 square feet, for $11.3 million. The proceeds were similarly used to pay down an $8.2 million mortgage and allocated to general business needs.
PROREIT has also entered into a binding agreement to sell a non-core retail property in Lacombe, Alberta. The 11,000-square-foot property is expected to sell for $5 million, with the transaction anticipated to close in the fourth quarter of 2024, subject to standard closing conditions.
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