Automotive Properties Real Estate Investment Trust (REIT) announced that it has agreed to purchase two automotive dealership properties from the Dilawri Group for a total purchase price of approximately $28.9 million.
Pursuant to the strategic alliance agreement entered into with the Dilawri Group at closing of the REIT’s initial public offering, the REIT has a right of first offer to acquire any REIT-suitable property from the Dilawri Group. The REIT and Dilawri have agreed in principle to the purchase by the REIT of a BMW automotive dealership property located in Regina, Saskatchewan (“Regina BMW”) and an Acura property located in North Vancouver, British Columbia (“Acura North Vancouver”).
On closing of the applicable Dilawri Acquisition, the tenant of the Regina BMW property will enter into a 20-year triple-net lease with the REIT and the tenant of the Acura North Vancouver property will enter into an 18-year triple-net lease with the REIT. The leases will include four five-year renewal options, a contractual 1.5 per cent annual rent increase after the first year of the lease term and will be indemnified by Dilawri.
The Dilawri Group property, located at 1001 Broad Street in Regina, Saskatchewan, includes a 19,619 square foot newly-built full-service BMW automotive dealership facility, located on 3.04 acres of land and with accessibility to major provincial highways. Currently, 1.46 acres of land is being used by the BMW dealership, with an additional 1.58 acres of land available for future development potential.
The Acura North Vancouver property, located at 828 Automall Drive in Vancouver, British Columbia, includes a full-service automotive dealership facility that is undergoing a renovation, expected to result in a total of 37,700 square feet of gross leasable area, and which is scheduled to be completed in March 2020. The Acura North Vancouver property occupies 2.4 acres of land, with access to major provincial highways.
“The Dilawri Acquisitions continue to demonstrate the REIT’s commitment to growing the REIT’s AFFO on an accretive basis while maintaining a flexible balance sheet,” said Milton Lamb, president and CEO of the REIT.