True North Commercial Real Estate Investment Trust (TNT-UN-T) has an unconditional agreement to sell a three-storey, 90,600-square-foot office building in Burnaby, B.C., in addition to three properties for which it has previously announced sales agreements.
In total, the divestments are to provide $61.4 million in proceeds for True North, which the company says exceeds the aggregate purchase price of $56.8 million for the four properties.
The Burnaby property, located at 9200 Glenlyon Parkway in the Metro Vancouver city, is being sold for $37 million with the deal expected to close near the end of June. It had been acquired by True North in 2018 for $35.25 million.
“With available liquidity in the market for smaller commercial properties, the REIT capitalized by strategically disposing select smaller non-core assets under favourable terms,” Daniel Drimmer, the REIT’s chief executive officer, said in the announcement.
“All four properties were either sold or will be sold for more than their initial purchase value.
“These dispositions underscore the strength of the REIT’s portfolio and its ability to access liquidity and attract buyers for its assets despite challenging market conditions.”
9200 Glenlyon has a FITWEL certification and offers a suite of amenities including 310 surface parking spots, rooftop and ground-floor patios, employee lounge areas, meeting rooms, grade- and dock-level loading, bike storage, fitness facilities and an outdoor tennis/basket ball court.
Other divestments, and True North’s NCIB
The other properties which have been sold, or are being sold, are:
- 251 Arvin Ave., in Hamilton and 6865 Century Ave., in Mississauga. The two properties total 70,700 square feet of space and have been sold for $18 million. Those sales have closed.
- 135 Hunter St. E. in Hamilton, for $6.4 million. That sale is to close on April 22.
The properties also sold above their IFRS values as of Dec. 31, 2023, the REIT reported.
The sales will generate estimated net proceeds of approximately $19.1 million for True North, which the REIT intends to use to repay debt and to repurchase additional units under its normal course issuer bid.
True North reports its NCIB, which is also incorporating funds which were previously used for distributions, has the capacity to acquire up to an additional 1,334,889 units during the coming year if they remain at a suitable discount to NAV.
During the past year, the REIT bought back 1,147,532 of its units for $10.5 million, which it says represented at inferred distribution yield of 18.7 per cent.
The Toronto-based REIT owns and operates a portfolio of 42 commercial properties consisting of approximately 4.7 million square feet in urban and select secondary markets across Canada, focusing on long-term leases with government and credit-rated tenants.