TORONTO - FAM Real Estate Investment Trust (TSX:F.UN) said Monday it has signed a deal to buy an office complex in Mississauga, Ont., for $39 million.
The complex known as the Promontory is located on a 4.5 hectare site and includes 159,752 square feet of Class A office space.
The property is 100 per cent leased with the top five tenants representing 88 per cent of the base rent. The trust said there were no major tenant leases expiring before December 2015.
FAM REIT also said Monday it planned to raise about $20 million to help pay for the deal in an offering of 2.23 million units at $9 per unit. The trust has also granted the underwriters an over-allotment option for up to an additional 334,500 units on the same terms.
In addition to the offering, the trust will issue 425,532 units on a private placement basis to Huntingdon Capital Corp. (TSX:HNT), the manager of the REIT, at a purchase price of $9.40 per unit for gross proceeds of $4 million. Following the private placement and the offering, Huntingdon will hold an approximate 27 per cent stake in the trust.
Units in FAM REIT, which holds a portfolio of office, industrial and retail real estate, were up eight cents at $9.40 on the Toronto Stock Exchange on Monday.