Automotive Properties Real Estate Investment Trust (REIT) announced that it has completed the previously announced $36.5 million acquisition of the newly constructed Audi Queensway dealership property in Toronto from the Dilawri Group.
Under terms of the acquisition agreement, the REIT paid Dilawri $31.5 million of the total purchase price on closing and will receive monthly lease payments from Dilawri reflecting this purchase price deferral. The remaining $5.0 million of the purchase price is anticipated to be paid by the end of the fourth quarter of 2019, upon completion by Dilawri of certain post-closing obligations.
At that time, the REIT will start receiving full monthly lease payments from Dilawri pursuant to the 18-year triple-net lease entered into, which includes contractual 1.5 per cent annual rent increases after the first year of the term.
Audi Queensway is a 65,547 square foot newly constructed automotive dealership located on 2.5 acres of land along an attractive commercial corridor in Toronto, adjacent to the intersection of Highway 427 and the Gardiner Expressway, two of Toronto’s busiest freeways.
The REIT funded the initial $31.5 million payment with proceeds from its June 2019 equity offering and draws from existing credit facilities. The deferred $5.0 million payment will be funded from draws on the REIT’s existing credit facilities.