Adventus Realty Trust (the Trust) is pleased to provide an update to unit holders regarding the second quarter 2012 operations for the Trust.
In April, 2012, we closed on our first office building, being a 55% interest in the Elgin Chase Campus located in suburban Chicago, and are delighted to report the Elgin Chase Campus is operating exceptionally well (and as we anticipated) during our early ownership of the building.
Effective, June 29, 2012, the Trust acquired a further 6.5% interest in the Elgin Chase Campus, bringing the Trust’s interest to 61.5%. As well, the Trust has acquired, on June 29, 2012, an option to purchase an additional 17.7% interest in the Elgin Chase Campus, on or before September 30, 2012, to bring the Trust’s total interest in the Elgin Chase Campus, if the option is exercised, to just less than 80%. We are very pleased with the operating performance at the Elgin Chase Campus, and feel this additional interest is an exceptionally good strategic investment.
In our acquisitions, we look for properties that can operate at a profit (to pay quarterly distributions) and which have long-term potential for capital appreciation. As a result of the excellent operating results of the Elgin Chase Campus, we are making a 2% distribution (or 8% per annum) for the second quarter 2012, payable to unit holders of record as of June 28, 2012, and you will find cheques included in this mail out or forwarded directly to your financial institution.
As well, we are also including in this mail out or by separate email, the June 30, 2012 financial statements of the Trust, for your information.
During the second quarter 2012, we also signed two separate purchase agreements for additional office buildings in Chicago and Milwaukee. We were not able to close on either building due to issues concerning profitability that arose during the due diligence process, and these agreements have been terminated. It is very important that we stay disciplined on acquiring the right kind of buildings that meet our criteria, in order to reach our long-term goals and, accordingly, we would rather pass on buildings than get into a poor acquisition that negatively affects our long-term growth prospects.
We are continuing to pursue additional office buildings, and we will advise you of any developments in our upcoming quarterly reports to unit holders.
We are focused on a certain niche of U.S. office buildings (acquisitions in the $10-$50 million range, which are too big for small operators and too small for larger operators). There are plenty of opportunities available in this niche, and that looks to be the case for the foreseeable future.
With these various opportunities available, we feel it is prudent to raise additional funds to increase the size of our portfolio prior to executing on our planned initial public offering (IPO). Having a portfolio of projects that is over $100 million, should make our IPO more attractive to the investment community.
We are reviewing opportunities to raise additional funds of around $15-$25 million that would put us in a position to grow our portfolio to $100 million or more in the near term, and continue our pursuit of an IPO for Adventus within the next 12 months.
Finally, our first Adventus Charity Golf Tournament held on June 14, 2012 was highly successful, and we are pleased to report that we were able to raise funds of just over $32,000, for three charities focused on helping children and youth. These funds have recently been distributed to Reach Child and Youth Development Society, Fraser Academy Association, and Mind Check. In this regard, we would like to acknowledge the financial contributions of our corporate sponsors: Farris, PwC, the Nick DeMare Group of Companies and Kings Links By The Sea Ltd., as well as all those that participated in the event. We intend to continue this annual charity event in future years.
We trust that our second quarter of operations have met your expectations. We will continue to work diligently on your behalf to move Adventus forward towards our goal for profitable growth.
ADVENTUS REALTY SERVICES INC.
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCA