Nexus Industrial REIT Announces Sale of Montreal Office Buildings, Expands Industrial Focus

Strategic Insights -

Nexus Industrial REIT, a Canada-focused industrial real estate investment trust (REIT), has announced the sale of its 50% ownership interest in six office buildings in Montreal, Quebec. The sale completes the REIT's strategy to exit its legacy office and retail portfolios and further concentrate on industrial assets. The sale marks a significant milestone in Nexus Industrial REIT's transformation into a pure-play industrial REIT.

Key Takeaways:

  • Nexus Industrial REIT has sold its 50% ownership interest in six office buildings in Montreal, totaling 143,223 square feet of gross leasable area (GLA).
  • The sale enables the REIT to further its strategy as a Canada-focused pure-play industrial REIT, with industrial assets now contributing 94% of its net operating income (NOI) on a proforma basis.
  • The REIT has leased the remaining 109,000 sq. ft. of its recently completed Titan Park industrial property at 905 Park St., Regina, SK, with an annual rent escalation clause.
  • The REIT completed construction of the Titan Park industrial property on April 1, 2024, for development costs of $48 million, and projects stabilized net operating income (NOI) of $3.8 million per year.
  • The REIT has extended its existing $70 million credit facility with ATB Financial, maturing on September 15, 2025.
  • The REIT is targeting asset sales of approximately $110 million in the second half of 2024.

Statistics:

  • 143,223 sq. ft. of gross leasable area (GLA) in six Montreal office buildings sold by Nexus Industrial REIT.
  • 94% of Nexus Industrial REIT's NOI contributed by industrial assets on a proforma basis.
  • 109,000 sq. ft. of Titan Park industrial property leased by Nexus Industrial REIT.
  • $48 million in development costs for the Titan Park industrial property.
  • $3.8 million per year in stabilized NOI for the Titan Park industrial property.
  • $70 million in the extended credit facility with ATB Financial.
  • $110 million target for asset sales in the second half of 2024.

Sources:

  • Source: Nexus Industrial REIT's press release (no date listed)
  • Source: Nexus Industrial REIT, Fact Sheet (no date listed)