Adventus Realty Trust Announces Signing of a Term Sheet to Refinance Majority of Portfolio

April 20, 2021

On April 19, 2021, we signed a term sheet with a US subsidiary of a major global bank (the “Bank”) for a 1st mortgage refinancing of approximately 62% of our portfolio value. As is typical in such transactions, the term sheet is non-binding at this point and subject to due diligence by the Bank. The closing for this refinancing is expected to occur on or before June 30, 2021.

The key features of this Bank refinancing include:

  1.  Reduced borrowing rate across the mortgaged properties to sub 3% (from 4.5%);

  2.  Increased cash liquidity to Adventus of US$90M and annual finance cost savings of approximately US$9M; and

  3.  Increased debt leverage to 71% across the entire portfolio (from 66%).

As has been the case throughout the past year, the financial markets have been changing rapidly and this Bank refinancing opportunity only became known to us following the issuance of our Strategic Plan Update on March 19, 2021. Accordingly, we have pivoted our strategy quickly to take advantage of this opportunity and, assuming the successful closing of the Bank refinancing transaction on a timely basis, our Strategic Plan will be amended as set out below.

Change in Strategic Plan

On March 19, 2021, we advised investors of our two-phase Plan to achieve Investor Liquidity. For Phase I of this Plan, we communicated four sources of financing/fundraising to achieve desired Phase I results by the end of Q3 2021, as follows:

  1.  Discounted Common Equity Issue – US $25M (Minimum at a 25-30% discount to the December 31, 2020 NAV/Unit;

  2.  Preferred Equity Issue – US$50-75M for a 3-5 year term and a low double-digit coupon rate;

  3.  Other 1st mortgage-secured refinancings – US$15-20M; and

  4.  Sale of 2 Non-Core Assets located in Chicago – US$15-20M (net).

As a result of the current Bank refinancing opportunity described above, we have made the following changes to Phase I of the Strategic Plan, as follows:

  1.  Discounted Common Equity Issue – on hold and to be cancelled upon successful closing of the Bank refinancing. We will pursue the issuance of more equity when appropriate market conditions return;

  2.  Preferred Equity Issue – reduced to US$50M (Maximum) and at a single-digit coupon rate;

  3.  Other 1st mortgage-secured refinancings – reduced to US$6M for one refinancing which has already been completed to date in 2021 (as the Bank refinancing replicates the other refinancings, but on a much larger scale); and

  4.  Sale of 2 Non-Core Assets located in Chicago – reduced to only 1 Asset to be sold.

The revisions to Phase I of our Strategic Plan, if and as completed, would result in Adventus exceeding the upper Target of US$140M for our Phase I financing previously announced, within the same deadline of Q3 2021.

As previously disclosed in our investor communications, debt financing/refinancing proceeds are a key component of the cash inflows required to fund our business operations and to provide cash distributions to investors (cash outflows). The closing of this significant Bank refinancing transaction on a timely basis should result in the reinstatement of Distributions at that time in an amount per Unit to be determined by the Board of Directors.

We look forward to working with the Bank and its advisors to achieve a timely completion of this refinancing by June 30, 2021. We appreciate the patience of our investors as we work diligently to strive to return to normal business practices following a very difficult year of COVID-19.

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

Investors News Releases Adventus Realty Trust Announces Signing of a Term Sheet to Refinance Majority of Portfolio