Agellan Commercial REIT has provided an update on substantial recent leasing activity. The REIT has recently completed a number of lease transactions that upon commencement are expected to increase overall occupancy of the REIT's portfolio from 91% at January 25, 2013 to 93%.
Parkway Place, Toronto, Ontario:
• The REIT completed an early lease renewal of IBM Canada's premises comprising approximately 102,000 square feet at Parkway Place for an additional ten years at market rates. IBM Canada's renewal premises comprises both office and data centre space. In addition, the tenant renewed approximately 22,000 square feet of enclosed space outside the building's BOMA GLA that is used to support IBM's data centre space. The early renewal extends the lease until 2025. In addition, the REIT has reduced the scope of the existing restrictive covenant in favour of IBM, which allows for greater leasing flexibility for the REIT going forward.
• The REIT completed an early lease extension of CH2M Hill Canada's premises comprising approximately 58,000 square feet at Parkway Place. The extension is effective until March 2018.
• The REIT entered into two new long term leases at Parkway Place resulting in a reduction in the "Vendor Lease Space" of approximately 36%. ZTE, an international provider of telecommunications equipment, entered into a lease for approximately 13,500 square feet for a term of five years at market rents. Cogent Inc., one of the world's largest internet service providers, entered into a lease for approximately 23,000 square feet for a 10 year term at market rents. The Cogent premises comprises both office and data centre space.
• The REIT leased approximately 6,450 square feet of non-"Vendor Lease Space" to Venus Concepts for a term of 5 years, at market rents.
• As a result of the recent leases, the occupancy in the building without including the "Vendor Lease Space" is now at 83%, up from 78% at January 25, 2013.
• The REIT entered into an option agreement with a prestigious European car manufacturer to locate their corporate head office and corporate dealership on a portion of the excess lands on a 20 year lease basis at $3.5 million per acre.
240 Bank Street, Ottawa, Ontario:
• The REIT completed a new 5 year lease with AIDS Committee of Canada for approximately 6,800 square feet, which increases the occupancy of the building from 50% to 67%.
• The REIT completed a new 5 year lease with Ocean Providence for approximately 9,500 square feet, which increases the occupancy at the REIT's property in Columbus Ohio to 87%.
• The REIT completed approximately 60,000 square feet of new leasing, which has resulted in an increase in occupancy in the Houston portfolio from 88% at January 25, 2013 to 92% currently.
• The REIT completed approximately 24,000 square feet of new leasing in Austin, resulting in an increase in occupancy to 95% from 89% at January 25, 2013. The REIT is on track with its stated goal of being 100% occupied in Austin by the end of the year.
Frank Camenzuli, Chief Executive Officer of the REIT said, "As evidenced by these recently completed transactions, we continue to see strong leasing momentum across our portfolio. The activity at Parkway Place is testament to the quality of the building, its unique features as a significant Toronto data centre and its desirable location at the busiest highway artery in Canada. Our US portfolio has benefited from the recovery of the US economy and we expect to see continued improvements in occupancy and lease rates for the remainder of this year and next.”
Agellan Commercial Real Estate Investment Trust current portfolio aggregates approximately 4.3 million square feet of gross leasable area in 24 properties. The properties are primarily located in Texas, Ontario and the U.S. Midwest. The REIT's portfolio is well diversified by geographic location, asset class and tenant mix.