Automotive Properties REIT Closes on $54M Sale of Markham Dealership to Dilawri
Automotive Properties REIT has completed its divestment of a Markham, Ont.-based car dealership to Dilawri Group for $54 million.
The property, known as the Kennedy Lands, is located at 8210 and 8220 Kennedy Road and 7 and 13/15 Main Street. The site currently serves as the home of Markham Honda, which is operated by a Dilawri affiliate.
Signs indicate that the property could become a mixed-use redevelopment project, possibly with an upgraded auto dealership and a multi-family residential component. In addition to obtaining the purchase price, the REIT will receive additional cash if the Kennedy Lands are rezoned with density in excess of an agreed threshold, according to an earlier news release.
Dilawri is the Toronto-based REIT’s largest unitholder. The sale price represents a 79% premium above the property’s International Financial Reporting Standards value as of March 31, with a 3.36% capitalization rate, said the REIT when the deal was announced.
“Many of our properties are located in urban areas that are experiencing intensification and, therefore, represent opportunities to work with our tenants to crystalize significant incremental value for our unitholders,” said Milton Lamb, president and CEO of the REIT, said previously.
“The completion of the transaction will enable us to unlock substantial embedded value from a property subject to a long-term lease, and the repayment of our revolving debt with the proceeds therefrom will immediately increase our [adjusted funds from operations] per unit without incurring any development risk. In turn, the additional availability under our revolving credit facilities will give us additional acquisition capacity.”
The deal closed on schedule.
Photo: Dilawri Group
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