Automotive Properties to raise $50-million in offerings

Executive Summary

• Automotive Properties REIT announced a $34 million equity offering (3.07 M units at $11.11) with an overallotment option that could raise total gross proceeds to ~$39 million.
• Concurrently, the REIT will acquire three automotive dealership properties in Dorval, Québec for a purchase price of $52.5 million, financed partly with $21 million from the offering and a $31.5 million vendor take‑back mortgage.
• The combined transaction is expected to increase AFFO per unit, strengthen the balance sheet, and result in a post‑transaction debt‑to‑gross‑book‑value ratio of ~46.3 %.

Key Details

• Public Offering:
• Units offered: 3.07 million (bought‑deal basis)
• Price per unit: $11.11
• Gross proceeds: ≈ $34 million

• Overallotment option: up to 460,500 additional units, potentially raising gross proceeds to ≈ $39 million

• Concurrent Private Placement:

• Units issued to Dilawri Group member: 1,442,844 at offering price
• Additional option for Dilawri: up to 216,427 units (mirroring overallotment) – could add ≈ $18 million gross proceeds

• Hold period: statutory four months + one day

• Use of Net Proceeds:

• Finance portion of acquisition purchase price and related closing costs

• General trust purposes, including repayment of indebtedness

• Acquisition Details:

• Properties: three automotive dealership sites (Subaru, Honda, Volkswagen) at 2291‑2311 Place Transcanadienne, Dorval, Québec
• Total gross leasable area: 140,693 sq ft on ~9 acres; combined with existing Mazda property will total four adjoining properties on ~11 acres
• Purchase price: $52.5 million

• Tenants: Dilawri Group members under short‑term triple‑net leases with renewal rights

• Financing Structure of Acquisition:

• Cash from offering proceeds: $21.0 million

• Vendor take‑back mortgage (interest‑only): $31.5 million, 4.5% interest, 5‑year term, affiliate of vendor

• Closing Timeline & Conditions:

• Expected public offering closing: on or about Oct. 23 2025, subject to customary conditions and TSX approval
• Offering not conditional on acquisition closing; both transactions interdependent for timing

• Short‑form prospectus filing anticipated around Oct. 7 2025

• Post‑Transaction Financial Outlook:

• Expected debt‑to‑gross‑book‑value ratio: ~46.3% after offering, acquisition, and utilization of credit facilities (including prior acquisitions in Rivian, Orlando and Ile‑Perrot)

• Distribution Information:

• First distribution to purchasers expected on or about Nov. 17 2025 to unitholders of record as of Oct. 31 2025

Notable Quotes

“We believe that the acquisition is attractive to the REIT given its location and proximity to Montreal, reputable tenant and brands, as well as rent escalators included in the leases… Proceeds from the offering will provide the REIT with the ability to strengthen its balance sheet through the repayment of indebtedness, which we believe will enhance our financial flexibility…” – Milton Lamb, Chief Executive Officer, Automotive Properties REIT.