Adventus Realty Trust Announces New Financing Arrangements and a Proposed Offering of Convertible Debentures

July 31, 2020

Adventus Realty Trust by its Trustee, Adventus Realty Services Inc. (“Adventus”, the “Trust” or the “Company”) Announces New Financing Arrangements and a Proposed Offering of Convertible Debentures

As previously announced, 2020 is an extremely important year for Adventus in terms of funding significant early lease renewals totalling over 500,000 sq. ft., effected at higher rental rates, to create large accretion in value to the Trust’s portfolio. The cost of funding these early leases and other aspects of our 2020 Plan requires approximately US $30M of new financing to be raised in the 2nd half of 2020.

Adventus is pleased to announce that it has closed a new unsecured debt financing arrangement with a Canadian institution which provided approximately US$16 million towards these 2020 funding requirements. The debt funding is for a 1‑year term with two 1-year extension options.

In order to complete the balance of the required US $30M financing, Adventus has undertaken the following two initiatives.

1. We have engaged a major U.S. firm to seek an additional US $15 million in debt funding from U.S. investors on an unsecured basis. We will have more to report on this in future news releases.              
 

2. Adventus also announces that it is considering an offering of up to US $20 million of convertible debentures (the “Proposed Offering”). The Proposed Offering would be made available to all existing holders of units of Adventus Realty Trust, provided that they qualify as an “Accredited Investor” under applicable securities laws. These convertible debentures are NOT eligible for investment by registered accounts (e.g. RRSP’s). Other material terms of the Proposed Offering also include the following:

  • Interest rate of 8%, payable monthly;
  • Maturity date of December 31, 2023, callable at par from January 1, 2022 at the option of Adventus;
  • Convertible into units of Adventus Realty Trust at US $16.75 per unit; and
  • Minimum investment of US $50,000 by Accredited Investors in Canada, pursuant to National Instrument 45-106 – Prospectus Exemptions.

Eligible investors who are interested in participating in the Proposed Offering should contact their broker or submit their expression of interest to Adventus at miannacone@adventusrealty.com, Attention: Mike Iannacone. Upon receipt of sufficient expressions of interest, Adventus will finalize the terms of the Proposed Offering and further advise all interested parties.

This news release does not constitute an offer to sell, nor the solicitation of an offer to buy, securities in any jurisdiction; nor shall there be any sale of securities mentioned in this news release in any jurisdiction in which such offer, solicitation or sale would be unlawful.

As previously announced on May 29, 2020 in the Q1 2020 Report to Unitholders, the Trust relies on the following Cash Inflows to fund its Cash Outflows (including Distributions to investors):

Cash Inflows

Cash Outflows

  1. Rental Collections
  2. Debt Proceeds
  3. Equity Proceeds
  4. Property Refinancing
  5. Property Sales
  1. Operating Expenditures, Maintenance Capital Expenditures, and Normal Renewal Leasing Costs
  2. Investing in New Leases and Property Acquisitions
  3. Overhead
  4. Debt Servicing Costs
  5. Distributions

In order to determine the timing for reinstatement of Distributions, the Board will continue to evaluate the Trust’s performance on a monthly basis in terms of measuring its Cash Inflows and Cash Outflows. In this regard, the Board will need to be confident that sufficient Cash Inflows are available going forward to fund our anticipated Cash Outflows in order to be able to reinstate Distributions.

About Adventus

Adventus is a Canadian based private Real Estate Investment Trust (REIT) and is focused on US income producing commercial real estate, in the suburban office markets of Chicago, Illinois and Atlanta, Georgia. For more information on Adventus, including our team, corporate strategy, photo gallery, details of our portfolio and press releases, we invite you to visit our website at www.adventusrealty.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release may contain forward-looking statements with respect to the REIT and its operations, strategy, financial performance and financial condition, as well as with respect to the previously disclosed acquisitions and future acquisitions of properties. These statements generally can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “forecast”, “expect”, “intend”, “would”, “could”, “if”, “may” and similar expressions. The actual results and performance of the REIT and the acquisitions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, changes in interest rates, competition and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.

Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.

Per: Rodney B. Johnston, FCPA, FCA
President and Chief Executive Officer

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