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ARTIS REAL ESTATE INVESTMENT TRUST ANNOUNCES SALE OF MINNESOTA INDUSTRIAL PORTFOLIO AND PROVIDES UPDATE ON PROPERTY DISPOSITIONS

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WINNIPEG, MB, Nov. 4, 2022 /CNW/ – Artis Real Estate Investment Trust (“Artis” or the “REIT”) (TSX: AX.UN) announced today that it has closed on the sale of 17 industrial properties located in the Twin Cities Area, Minnesota (“Minnesota Industrial Portfolio I”) and has entered into unconditional agreements to sell a portfolio of six industrial properties in the Twin Cities Area, Minnesota (“Minnesota Industrial Portfolio II”) and an office property in New Hartford, New York.

The Minnesota Industrial Portfolio I comprises 17 properties totalling approximately 2.5 million square feet of leasable area. The sale price for the Minnesota Industrial Portfolio I was US$248.9 million and represented a price per square foot of US$100. After adjusting for outstanding mortgage financing of approximately US$97.1 million and anticipated closing costs, the transaction generated total net proceeds of US$148.0 million. The transaction went unconditional and closed simultaneously on November 4, 2022.

On October 18, 2022, the REIT entered into an unconditional agreement to sell the Minnesota Industrial Portfolio II, comprising six properties that total approximately 0.7 million square feet of leasable area. The sale price for the Minnesota Industrial Portfolio II is US$74.8 million and represents a price per square foot of US$108. This portfolio is unencumbered and the transaction is expected to close in the fourth quarter of 2022.

Additionally, on November 4, 2022, the REIT entered into an unconditional agreement to sell Hartford Corporate Plaza, a 123,210 square foot office property for US$13.7 million, representing a price per square foot of US$111. This property is unencumbered and the transaction is expected to close on November 15, 2022.

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The sale price for these dispositions is in line with the REIT’s International Financial Reporting Standards (“IFRS”) fair values reported at September 30, 2022.

“The sale of the two Minnesota industrial portfolios and Hartford Corporate Plaza mark another significant milestone in the implementation of our Business Transformation Plan,” said Samir Manji, President and Chief Executive Officer of Artis. “Unlocking value for our unitholders through the monetization of these assets will enhance our overall financial flexibility and will reduce leverage and improve our overall liquidity. In the current economic environment, strengthening our balance sheet and liquidity will allow us to consider a range of capital allocation options, including buying back units and investing in other opportunities that we believe can generate above average risk-adjusted returns. Ultimately, our goal is to grow net asset value per unit for our unitholders, the most important metric tied to our long-term strategy.”

In March 2021, Artis announced a new vision and strategy for the REIT – to build a best-in-class asset management and investment platform focused on growing net asset value per unit and distributions for investors through debt repayment, return of capital and value investing in real estate. As part of this strategy, Artis announced that it will monetize part of its portfolio to strengthen its balance sheet and to provide Artis with the liquidity and flexibility to execute on this strategy.

Since March 2021, including the Minnesota Industrial Portfolio I disposition, Artis has sold 48 industrial, 10 office and six retail assets for a total of 64 properties. The REIT’s real estate portfolio now comprises 135 properties totalling approximately 15.6 million square feet of leasable area in select markets in Canada and the United States.

Artis is a diversified Canadian real estate investment trust with a portfolio of industrial, office and retail properties in Canada and the United States. Artis’ vision is to build a best-in-class asset management and investment platform focused on growing net asset value per unit and distributions for investors through debt repayment, return of capital and value investing in real estate.

please contact Mr. Samir Manji, President and Chief Executive Officer, Ms. Jaclyn Koenig, Chief Financial Officer or Ms. Heather Nikkel, Vice-President – Investor Relations and Sustainability of the REIT at 1.204.947.1250.

Cautionary Statements

This press release contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “expects”, “anticipates”, “intends”, “estimates”, “projects”, “seeks”, and similar expressions or variations of such words and phrases or state that certain actions, events or results ”may”, ”would” or ”will” occur or be achieved are intended to identify forward-looking statements. Particularly, statements regarding Artis’ Business Transformation Plan, the steps required to implement the Business Transformation Plan, building Artis into a best-in-class asset management and investment platform focused on value investing in real estate, significant value creation, the REIT’s ability to execute its strategy, the REIT’s ability to unlock unitholder value and anticipated net proceeds of the transaction are forward-looking statements. Forward-looking statements are based on a number of factors and assumptions which have been used to develop such statements, but which may prove to be incorrect. Artis cannot assure investors that actual results will be consistent with any forward-looking statements and Artis assumes no obligation to update or revise such forward-looking statements to reflect actual events or new circumstances. All forward-looking statements contained in this press release are qualified by this cautionary statement.

Suite 600-220 Portage Avenue
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AX.UN on the TSX

SOURCE Artis Real Estate Investment Trust

For further information: Mr. Samir Manji, President and Chief Executive Officer; Ms. Jaclyn Koenig, Chief Financial Officer or Ms. Heather Nikkel, Vice-President – Investor Relations and Sustainability of the REIT at 1.204.947.1250.

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November Capital Region Commercial Real Estate Report – Business Examiner

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A rendering depicting a redevelopment proposal for 129-135 Gorge Road East, which includes a public waterfront component. The project will deliver nearly 500 new rental units to Victoria’s Burnside Gorge neighbourhood. © Belmont Properties / Intracorp Projects

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COWICHAN
A nearly $890 million replacement project for Duncan’s Cowichan District Hospital has taken a major step forward as land clearing at the Bell McKinnon Road site begins.
Initially scheduled for 2021, the North Cowichan property near the intersection of Herd Road and the Trans Canada Highway is being cleared this month ahead of a construction start planned for 2023, pushing the hospital’s completion target to 2027 after some three and-a-half years of building.

ESQUIMALT
A landmark condominium project coming soon to Esquimalt’s Gorge Waterway is now selling one, two and three-bedroom residences with ‘junior’ floorplan options.
Central Block, from Victoria-based developer Abstract Developments, is comprised of 99 suites at pricing from $339,900. Nearly 40 per cent of Central Block’s inventory is priced below $500,000 and over 80 per cent of homes are available from under $750,000.
Slated to begin construction next March, the six-storey Central Block will rise in the former location of the Gorge Pointe Pub opposite Gorge Park’s Tillicum Road entrance, offering unimpeded views of the picturesque Gorge Waterway from many homes, and park, city and urban canopy views from most units.

REGIONAL
BC Housing has started work on the last of six facilities announced in the spring of 2021 to house individuals in the Capital Region experiencing homelessness or who may be at-risk of homelessness.
As construction winds down on five buildings in Victoria, Saanich and Central Saanich, crews have begun preliminary work on a 56-unit complex at 953-959 Balmoral Road in Victoria’s North Park neighbourhood.
The five-storey low-rise will be operated by the Cool Aid Society as permanent housing with support services, and is scheduled for occupancy in 2023.
Collectively, the six builds will contribute nearly 300 permanent supportive homes as part of a provincial plan to address homelessness in the Capital through the creation of 24/7-managed housing solutions.

SAANICH
A nearly 100-unit rental proposal is in motion from telecommunications giant TELUS and Victoria-based Aryze Developments for several parcels at Feltham Road and Tyndall Avenue in Gordon Head.
Planned for 1805-1811 Feltham Road, TELUS and partner Aryze are working to redevelop a TELUS network facility into TELUS Living, a five-storey, purpose-built rental project that would provide high density housing to Gordon Head in addition to network infrastructure for the telecom.
Although the proposed building height and density are a departure from the immediate area’s built form, a document drafted by Aryze’s Director of Development, Chris Quigley, for the District of Saanich and the local community describes the effort as taking “an existing public utility site and [transforming] it into a much-needed rental housing development while also continuing to deliver critical telecommunications infrastructure.”

VICTORIA
A 488-unit rental project envisioned for the 100-block of Gorge Road East in the Burnside Gorge neighbourhood could also include a significant public realm improvement along the Gorge Waterway.
Proposed for 129-135 Gorge Road East, property owner Belmont Properties and partner Intracorp Projects have unveiled plans for a five-building redevelopment of the Oxford Motel (turned rental complex) and three rental blocks known as the Gordreau Apartments. The existing density totals 200-units, and is described by the proponents as nearing its end-of-life.
Belmont and Intracorp, along with architectural firm IBI Group, have designed a two-phase masterplan that will deliver 488 new residential units on the land, padding the City of Victoria’s rental housing stock by 288 net rental homes.

Victoria-based Alpha Project Developments has proposed its latest residential investment in the James Bay neighbourhood’s legislative precinct.
Planned as a seven-storey complex at 475 Kingston Street, the lowrise will include approximately 60 up-market condominium suites in one, two and three-bedroom configurations, along with ground oriented, family-sized layouts.
The majority of the property is presently a surface parking lot, as is an expansive province-owned parcel immediately to the east known as the ‘Q-Lot,’ currently planned as future office space for government ministries.

A boutique pre-sale comprised of seven three-bedroom plus-den townhomes is coming soon to Victoria’s Fairfield neighbourhood.
Known as Seven by Aryze, the offering represents an evolution in design from a firm known for its innovative, market-leading infill projects, at a time when ‘missing middle’ housing is top of mind among urban homebuyers.
Situated at 931 McClure Street – a quaint no-through lane between Vancouver and Quadra streets – Seven’s location is within short walking distance to the heart of downtown Victoria, Cook Street Village, and the Dallas Road waterfront.

Mike Kozakowski is with Citified Media and can be reached at mailto:mike@citifiedmedia.com

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Is now the right time for your business to buy real estate? – BNN Bloomberg

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For small businesses hoping to establish or expand their brick-and-mortar presence, it may seem like a bad time to sink cash into a commercial property purchase.

Amid predictions of an upcoming recession, the U.S. Federal Reserve increased the federal funds rate for the sixth time in 2022, citing inflation risks and global conflict. Inevitably, this will make loans more expensive for borrowers.

In reality, though, the perfect time to buy commercial real estate doesn’t exist. And when you consider the bigger picture, not all signs point to doomsday.

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 “There are still really amazing opportunities out there, but I think it really requires small-business owners to think about what their goals and their plans are,” says Alyssa Dangler, a commercial real estate attorney and president-elect of Commercial Real Estate Women Network.

Here’s what small-business owners should consider when deciding whether to purchase commercial real estate.

COST OF BORROWING

While higher interest rates might not make or break a deal, they could push business owners to cut the size of their down payments or reduce spending elsewhere to accommodate larger monthly payments. Small-business owners waiting for interest rates to fall might be in a holding pattern for longer than they expected, though. According to the Federal Reserve, future fed rate hikes are likely.

However, today’s interest rates don’t seem as astronomical when you look at rates throughout history, Dangler says. For instance, the annual average rate for a 30-year fixed-rate mortgage was 8.39 per cent in 1992 and 16.04 per cent in 1982. This year’s average currently stands at 5.08 per cent.

Some entrepreneurs, like Elaina Paige Thomas, owner of Next Paige Talent Management and Production, are choosing to move forward despite rising rates.

“It didn’t scare me because I know that we can always refinance down the road,” Thomas says. “It’s still going toward ownership and equity, so for me, that was always the goal.”

POTENTIAL RENOVATIONS

Buying commercial property becomes more complicated if construction loans are involved. Interest rates for this type of financing are typically variable, leaving plenty of opportunity for rates to climb over the duration of the project.

To mitigate the risk of a business being unable to afford costlier future payments, Dangler explains, lenders may ask borrowers to purchase an interest rate cap. While this safety net ensures their rate won’t exceed a set limit, it’s also an additional cost.

Understand and prepare for these added costs before moving forward with a real estate deal. If you’re concerned about stretching your finances too thin, consider looking at buildings that don’t require major renovations, or scale back the scope of the project to only the essentials.

YOUR BUSINESS’S GROWTH STAGE

Typically, more mature businesses have capital and a strong understanding of their growth trajectory. These factors, plus time in business and more established credit, make for a more appealing loan application — and likely a better interest rate.

On the other hand, startup businesses may want to consider leasing before buying right away, suggests Max Grover, president-elect of Commercial Alliance of Realtors West Michigan. As opposed to more established businesses, he says, some startups might see better returns putting their cash toward inventory, equipment, hiring or marketing. Additionally, leasing gives them more flexibility to move locations if they grow.

EXPERT ADVICE

Connecting with a commercial real estate agent or broker who specializes in a particular type of property can help buyers weigh their options.

“It helps to have your own representation so that your interests are pursued,” says Barbi Reuter, CEO, chairman and designated broker of Cushman & Wakefield ‘ PICOR, a commercial real estate firm. “You want to have the expertise to move at the right time.”

In particular, they can help small-business owners narrow down their options, compare buy-versus-lease situations, run calculations and navigate market changes, she adds. They can also look into commercial zoning laws that determine which types of businesses can occupy the property and how it can be used.

YOUR MARKET

Factor in the market conditions for your particular industry and geographic region before committing to a space. Property demand may vary from sector to sector, which dictates how much competition you’ll face and, subsequently, how much negotiating power you’ll have.

Depending on your business type, Reuter suggests finding out where your customer base, suppliers or workforce are located, too.

 “You really have to be super focused on what the dynamics are in your … geographic market and the market in which you sell or trade or operate your business,” Reuter says.

Data on where people are moving to and from, as well as industry reports on how other businesses in your sector are faring, can provide more insight.

This article was provided to The Associated Press by the personal finance website NerdWallet. Hillary Crawford is a writer at NerdWallet.

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Blackstone To Limit Withdrawals From $125 Billion Real Estate Fund

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Topline

Blackstone will limit investor withdrawals from its $125 billion real estate investment fund following a spike in redemption requests, according to the New York-based firm, following an announcement that it will sell its stake in two Las Vegas properties.

Key Facts

Only 0.3% of the fund’s net assets will be available for redemption in December, according to a notice sent to investors Thursday, following a surge in requests in November and October.

In October, Blackstone received $1.8 billion in redemption requests—2.7% of the net asset value—and has already received requests in November and December exceeding its quarterly limit, according to the Financial Times.

Only 43% of redemption requests from investors were fulfilled in November, totaling $1.3 billion in assets.

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Following the announcement, shares at the company fell by as much as 10%.

Blackstone will receive $1.27 billion in cash—generating about $730 million for shareholders—from Vici Properties Inc. for its 49.9% stake in the MGM Grand Las Vegas and the Mandalay Bay, two properties valued at $5.5 billion total, according to a release Thursday.

Crucial Quote

“Our business is built on performance, not fund flows, and performance is rock solid,” a Blackstone spokesperson told the Financial Times, adding the company will continue to focus on rental housing opportunities.

Big Number

$69 billion. That’s the estimated value of Blackstone’s assets across logistics facilities, apartment buildings, casinos and medical office parks. Forbes estimates the real estate firm totaling $15.5 billion in revenue through 2022.

Key Background

The Blackstone Real Estate Income Trust rose in the real estate industry with its inception in 2017, according to Bloomberg, as it quickly acquired apartments, suburban homes and dorms during a period of low interest rates. Investors have become increasingly more cautious about accumulating money in assets that are hard to trade and value while Blackstone continues to place more limits on access to its funding. Because of the two Las Vegas property sales, in addition to the earlier $5.6 billion sale of The Cosmopolitan, the firm now has access to more liquid assets, potentially allowing it to redeem more requests in the near future.

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