Automotive Properties REIT Agrees to Acquire Automotive Dealership Property in Montréal for $7.2 million

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TORONTO, Dec. 22, 2015 /CNW/ – Automotive Properties Real Estate Investment Trust (TSX: APR.UN) (the “REIT”) today announced that it has agreed to purchase the real estate underlying Toyota Woodland, a 50,000 square foot Toyota dealership in Montréal, Québec from an unrelated party, for approximately $7.2 million, representing a cap rate of approximately 7.3%. The addition of this property is expected to be immediately accretive to the REIT's Adjusted Funds from Operations (“AFFO”) on a per unit basis.

This is the first acquisition to be undertaken by the REIT with the Dilawri Group pursuant to the strategic alliance agreement entered into with Dilawri at closing of the REIT's initial public offering (“IPO”). The Dilawri Group, Canada's largest automotive dealership company, will be the operating tenant of Toyota Woodland and will enter into a 16-year lease with the REIT on closing of the acquisition.  Toyota Woodland was built in 2007 / 2008 and is located within an attractive commercial corridor at 1000 – 1039 Woodland Avenue in Montréal.

“Montréal is a new market entry for the REIT, further diversifying our geographic presence. We are pleased to establish a foothold inCanada's second largest urban market with this recently constructed, best-in-class dealership,” said Milton Lamb, President and CEO of Automotive Properties REIT. “Consistent with our existing property portfolio, Toyota Woodland's long-term lease is triple-net and has an annual 1.5% fixed rent escalator, thereby further enhancing our stable cash flows.”

“In addition to the acquisition opportunities available to the REIT through the Dilawri Group, we remain focused on building the REIT's third party acquisition opportunities. We are targeting prime automotive dealership properties in urban markets across Canada that can further enhance our brand and geographic diversification and grow cash available for distribution to our unitholders,” added Mr. Lamb.

The REIT will fund the purchase of Toyota Woodland through a combination of cash on hand from the exercise of the over-allotment option by the underwriters in the REIT's IPO and a draw on its credit facility.  Although the REIT has completed its diligence in connection with this acquisition, closing of the acquisition, which is expected to occur before the end of the year, is subject to customary closing conditions.

About Automotive Properties REIT 

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. The REIT's portfolio of 26 income producing commercial properties represents approximately 958,000 square feet of gross leasable area in Ontario, Saskatchewan, Alberta and British Columbia. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca

Forward-Looking Information

This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as “will” and “expected”. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under “Risks and Uncertainties” in the REIT's management's discussion and analysis (“MD&A”) most recently filed on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Non-IFRS Financial Measure

This news release contains a financial measure which is not defined under IFRS and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. AFFO is a key measure of performance used by real estate businesses.  This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to net income or cash flow from operating activities calculated in accordance with IFRS. The REIT believes that AFFO is an important measure of economic performance and is indicative of the REIT's ability to pay distributions. The IFRS measurement most directly comparable to AFFO is net income. Please refer to the REIT's MD&A for further discussion of this non-IFRS financial measure.

SOURCE Automotive Properties Real Estate Investment Trust