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TORONTO — Granite Real Estate Investment Trust (“Granite”) (TSX: GRT.UN / NYSE: GRP.U) announced today that it has acquired two income producing properties and has agreed to acquire three development properties, together comprising approximately 2.5 million square feet (“SF”) at a combined purchase price of approximately C$246.7 million. Collectively, the acquisitions represent an anticipated stabilized yield of approximately 5.1%.
Granite also announced it has extended its C$300 million term loan to December 11, 2026 and refinanced the related cross-currency interest rate swap resulting in Euro-denominated payments at a 1.355% fixed interest rate.
In addition, Granite announced that it has completed the acquisition of the development property in Dallas, Texas that it had contractually committed to acquire. Further, on December 4,2019, Granite completed the disposition of its five western Michigan assets that were held for sale for gross proceeds of US$29.5 million.
Kevan Gorrie, Granite’s President and CEO, commented that, “consistent with our strategy of acquiring and developing modern e-commerce and distribution facilities in Granite’s target markets, we expect these acquisitions to further enhance the quality of our portfolio, deliver stable and growing cash flow and generate net asset value growth. Further, as evidenced by the recent refinancing outlined herein, we continue to leverage our unique access to lower cost Euro-denominated debt to enhance our returns and cash flow. Following these commitments, we estimate our pro forma liquidity to be approximately C$650 million.”
330 & 440 E. Stateline Rd., Southaven, Mississippi, USA
Granite has acquired 330 & 440 E. Stateline Road, two multi-tenant modern distribution buildings totaling 1.7 million SF, featuring 32’ clear height and situated on 95 acres of land in Southaven, Mississippi for US$87.9 million. Constructed in 2005 and 2007, the properties are 81% leased to established tenants for a remaining weighted average lease term of 5.6 years. The acquisition closed on December 19, 2019.
The properties are located within 2.0 miles of Memphis International Airport, the world’s busiest cargo airport and home to the FedEx World Hub and UPS Airport Facility. The properties benefit from superior access to Interstate 55, Interstate 22 and the BNSF Memphis Intermodal Facility.
De Kroonstraat 1 (Tilburg), Francis Baconstraat 4 (Ede), Oude Graaf 15 (Weert)
Granite has agreed to acquire three state-of-the-art facilities in the Netherlands for approximately €89 million. Currently under construction, the properties will be delivered mid-2020, with the 488,000 SF Tilburg property being delivered in two phases, including a 142,000 SF second phase to be delivered in the first quarter of 2021. The properties have a combined leasable floor area of approximately 852,000 SF and include approximately 1.8 acres of additional land for potential future expansion. The properties are 100% leased to three prominent European tenants for a weighted average lease term of approximately 11 years.
In line with Granite’s European strategy, the properties are located in highly-desirable distribution nodes along the main supply corridor from Rotterdam, Europe’s largest port, to Germany and continental Europe. Furthermore, the assets are situated in one of the most densely populated areas in Europe, making them attractive e-commerce locations. The design of these build-to-suit properties incorporates several sustainability features, leading management to expect the properties to receive a BREEAM “Very Good” certification.
Extension of $300M term loan and refinancing of related cross-currency interest rate swap
On November 27, 2019, Granite extended its C$300 million term loan (the “Term Loan”) and refinanced the related cross-currency interest rate swap (the “Euro Swap”). The Term Loan, with an original maturity date of December 12, 2025, has been extended for one year, on the same terms, to December 11, 2026. Concurrently, the previously existing Euro Swap was terminated and Granite entered into a new seven-year cross-currency interest rate swap resulting in Euro-denominated payments at a 1.355% fixed interest rate, approximately 85 basis points lower than the previous rate. The refinancing is expected to result in interest expense savings of approximately C$2.3 million, or C$0.04 of funds from operations per unit, annually.
1301 Chalk Hill Road, Dallas, Texas
On November 19, 2019, Granite acquired 1301 Chalk Hill Road, a state-of-the-art, 2.3 million SF, multi-level e-commerce fulfillment centre, situated on 101 acres of land in Dallas, Texas. The newly constructed property is 100% leased to a leading global e-commerce provider for an initial lease term of 20 years. The previously-announced acquisition closed on November 19, 2019.
The completed acquisitions were funded using cash on hand and the acquisition of the European properties will be funded from Granite’s available liquidity.
Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of industrial, warehouse and logistics properties in North America and Europe. Granite owns over 90 rental income properties representing approximately 40 million square feet of leasable area.
Copies of financial data and other publicly filed documents about Granite are available through the internet on the Canadian Securities Administrators’ Systems for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com and on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR) which can be accessed at www.sec.gov.
For further information, please see our website at www.granitereit.com or contact Teresa Neto, Chief Financial Officer, at 647-925-7560 or Andrea Sanelli, Manager, Legal & Investor Services, at 647-925-7504.
Forward Looking Statements
This press release may contain statements that, to the extent they are not recitations of historical fact, constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation, including the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended, and applicable Canadian securities legislation. Forward-looking statements and forward-looking information may include, among others, statements regarding the expected timing of the closing of the European acquisitions, the expected stabilized yield of the Mississippi and European acquisitions and impact of such acquisitions on Granite’s cash flow and net asset value growth, the expected impact of the extension of the Term Loan and refinancing of the Euro Swap on Granite’s liquidity and interest expense obligations, the expected BREEAM certification of the European acquisition properties, Granite’s intention and ability to make future investments and acquisitions and Granite’s plans, goals, strategies, intentions, beliefs, estimates, costs, objectives, economic performance, expectations, or foresight or the assumptions underlying any of the foregoing. Words such as “may”, “would”, “could”, “will”, “likely”, “expect”, “anticipate”, “believe”, “intend”, “plan”, “forecast”, “project”, “estimate”, “seek”, “objective” and similar expressions are used to identify forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information should not be read as guarantees of the closing of the European acquisitions, the expected stabilized yield of the Mississippi and European acquisitions and impact of such acquisitions on Granite’s cash flow and net asset value growth, the expected impact of the extension of the Term Loan and refinancing of the Euro Swap on Granite’s liquidity and interest expense obligations, the expected BREEAM certification of the European acquisition properties, Granite’s intention and ability to make future investments and acquisitions or other events, performance or results and will not necessarily be accurate indications of whether or the times at or by which such impact of the acquisitions or other events or performance will be achieved. Undue reliance should not be placed on such statements. Forward-looking statements and forward-looking information are based on information available at the time and/or management’s good faith assumptions and analyses made in light of its perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances, and are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond Granite’s control, that could cause actual events or results to differ materially from such forward-looking statements and forward-looking information. Important factors that could cause such differences include, but are not limited to, the risks set forth in the annual information form of Granite Real Estate Investment Trust and Granite REIT Inc. dated March 6, 2019 (the “Annual Information Form”). The “Risk Factors” section of the Annual Information Form also contains information about the material factors or assumptions underlying such forward-looking statements and forward-looking information. Forward-looking statements and forward-looking information speak only as of the date the statements and information were made and unless otherwise required by applicable securities laws, Granite expressly disclaims any intention and undertakes no obligation to update or revise any forward-looking statements or forward-looking information contained in this press release to reflect subsequent information, events or circumstances or otherwise.
Teresa Neto, Chief Financial Officer
Andrea Sanelli, Manager, Legal & Investor Services
This ingenious company is bringing art investing to the masses – Financial Post
There’s a reason the ultra-wealthy tend to take up art collecting, and it’s not just because the paintings look cool hanging on their walls. It’s a great investment, a hedge against inflation and other forms of economic volatility , and the right piece can result in huge gains. But, it can also be quite an expensive hobby, and you pretty much have to have millions in the bank in order to take part. Or at least that used to be the case because, thanks to Masterworks , the online platform that brings art investing to the masses, almost anyone can invest in fine art.
Put simply, Masterworks allows investors to purchase shares in some of the great (and most valuable) pieces in the art world, and share in the profits when those paintings are eventually sold. And the pieces available for investment on Masterworks really live up to the platform’s name. They’ve been selected and curated according to myriad different factors, all with the goal of maximizing their value and their earning potential.
Masterworks Art Investing Platform: Request Your Invite Now
On Masterworks , you can purchase shares in “blue chip” paintings by some of the most famous artists of all time that were selected to represent their most mature and characteristic (and thus commercially lucrative) periods. They’re acquired from major auction houses, private collectors and established galleries. And when the time is right, they are eventually sold, and the profits are divided up among the shareholders.
But you don’t have to wait for a painting to sell to make money on Masterworks . On the Masterworks Secondary Market, you can buy, sell and trade shares with other Masterworks investors, making Masterworks shares a high-liquidity asset that allows you to quickly cash out if need be. That isn’t really the case when you own an actual painting and have to chase down a buyer in order to sell.
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If you’re interested in art primarily as an investment, you know it costs a lot of money to buy and sell. Outside of the occasional story about finding a lost Picasso at a garage sale and selling it for millions of dollars, pretty much anyone who invests in art needs to be wealthy in the first place in order to make any money at it. But with Masterworks , some of the most valuable paintings in the world are divided up into shares, making it an art investing platform for the people. And now you can give it a try.
Right now, Masterworks is available by invitation only. But you can request an invitation, and receive a lot more information on the platform’s official site . So if you’re ready to diversify your investment portfolio and acquire shares in a commodity that is a well-known hedge against inflation (not to mention other economic storms that might be coming), check out Masterworks and request your invitation today.
David Tepper doesn't think stocks are a great investment here, but says it all depends on rates – CNBC
Hedge fund manager David Tepper has turned somewhat bearish on the stock market, citing uncertainties around interest rates and inflation.
“I don’t think it’s a great investment right here,” Tepper said Friday on CNBC’s “Halftime Report.” “I just don’t know how interest rates are going to behave next year… I don’t think there’s any great asset classes right now… I don’t love stocks. I don’t love bonds. I don’t love junk bonds.”
The Federal Reserve has been keeping its benchmark short-term interest rate anchored near zero since the start of the pandemic. In recent weeks, officials have indicated they are ready to start tapering the monthly asset purchases, possibly starting in November.
Many believe that rising inflation, which is running near a 30-year high, could put pressure on the central bank to pull back some of the ultra-easy monetary policy soon. Traders have upped their bets that the Fed will move faster than anticipated on rate hikes, with market pricing implying a first rate increase coming in September 2022, according to the CME’s FedWatch tracker.
The founder of Appaloosa Management, whose comments have been known to move markets, said his hedge fund has been “probably too conservative” this year but has done OK because of its bets on commodities and oil.
“We continued to keep that exposure relatively low but keep investing, I think stay invested in the stock market to some extent, but don’t have your highest concentration you’ve ever had,” Tepper said.
Tepper stressed, though, that it’s nowhere near the time to short the stock market, and he still believes equities make a great long-term investment that everyone should own in their portfolio.
The hedge fund manager said if bond yields stay stable after the Fed moves to taper its bond-buying program, stocks could see a relief rally.
“If we are going to sit here with 1.60% [on the 10-year Treasury yield] after the Fed announces tapering, then you could get a rally. There might be a trading rally. You might get 5% to 10% up. I’ll go in and get out,” Tepper said.
The billionaire investor has made a number of prescient calls recently, including foreseeing the market collapse due to the Covid-19 pandemic. Back in February 2020 before the S&P 500 tumbled into a bear market, he warned that the virus could be a game changer for markets and “certainly ruined the environment” for stocks.
In March this year, Tepper turned bullish on the market, saying it’s very difficult to be bearish on stocks. The S&P 500 enjoyed seven positive months in a row from February to August, The benchmark is up more than 20%, hitting a fresh all-time high Friday.
Investment firm head joins Algoma Steel's board – Sault Star
The president and chief executive officer of a New York-based investment firm is a new Algoma Steel board member.
Eric Rosenfeld founded Crescendo Partners in 1998.
He is a master of business administration graduate from Harvard University. Rosenfeld also serves on the boards of Primo Water Corp., CPI Aerostructures, Aecon Group and Pangaea Logistics Solutions, a release says.
He has served on boards since 1998. His first directorship was with Spar Aerospace, the company that developed the Canadarm used in space flights. Rosenfeld also served on the board of beverage maker Cott Corp.
He headed the arbitrage department of Oppenheimer & Co., an investment and brokerage bank, for 14 years before establishing Crescendo Partners.
Mary Anne Bueschkens, Gale Rubenstein, James Gouin, David Sgro, Brian Pratt and Rosenfeld join chair Andrew Harshaw, Andrew Schultz and Michael McQuade, a release says.
“ Our new board members bring critical expertise and diversity to the team,” said McQuade.
The other new members have backgrounds in the automotive, legal and construction sectors.
Bueschkens is a lawyer who has held various roles, including president and CEO of ABC Technologies, an automotive parts supplier.
Rubenstein is a partner in the Toronto-based law firm Goodmans LLP. She is counsel in the firm’s corporate restructuring group.
Gouin is a former head of Tower International, a global manufacturer of automotive products. He also worked 28 years at Ford Motor Company. He held two vice-president roles with the automaker.
Sgro is a senior managing director at Crescendo Partners. The firm’s services include consulting, mergers, acquisitions and capital raising support and private equity investment.
Pratt is a former chair and director of Primoris Services Corp., a parent company of construction and engineering firms. He was also president and chief executive officer and board chair of the Dallas-based Primoris, and its predecessor entity, ARB Inc., from 1983 to 2015. Pratt is a former chair of Legato Merger Corp.
All the board members are independent, except McQuade. He is ASI’s CEO.
The Sault Ste. Marie steelmaker started trading on the Toronto Stock Exchange on Thursday.
– with files from Postmedia Network
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