Adventus Realty Trust (the Trust) is pleased to provide the First Quarter 2013 update to our investors, which was a significant quarter, as we passed another milestone with the acquisition of our second property in Metro Chicago. During March, 2013 we acquired the Oak Brook Office Center, in Oak Brook, Illinois, and are excited to have been able to purchase this property at a very attractive price, with strong tenants, solid operating profit, and in an exceptional area of Metro Chicago for future growth.
Now, we have two significant Metro Chicago office properties under Adventus ownership and management, namely the JPMorgan Chase Campus and the newly acquired Oak Brook Office Center. These two properties provide Adventus investors with a great combination of yield (cap rate) in excess of 10% and capital appreciation potential. These attributes will be beneficial as Adventus proceeds towards its TSX Initial Public Offering (goal for second half of 2013).
For the acquisition of the Oak Brook Office Center, we raised equity of more than $13M pursuant to our 2nd Term Sheet, which is now closed as of the end of March, 2013. This brings the aggregate equity fundraising to over $19M for the 1st and 2nd Adventus Term Sheets. A significant portion of this 2nd Term Sheet equity was used for the Oak Brook acquisition, but we have close to $4M of capital on hand in order to acquire additional properties.
The Oak Brook Office Center was purchased for $33 million, and to debt finance the acquisition, we were able to secure 10 year financing from CIBC, at fixed interest of just over 4% (30 year amortization). In addition, we have also initiated action to refinance the JPMorgan Chase Campus to obtain more attractive terms for this property going forward.
As we move forward with our goals of profitable growth and a TSX Initial Public Offering, we will be initiating our 3rd Term Sheet later in April, with equity being raised at higher unit prices than in the 1st and 2nd Term Sheets. This will assist in financing any additional acquisition(s) in advance of the TSX listing. We will provide the 3rd Term Sheet to investors when documentation is prepared.
We will also provide additional updates concerning new property acquisitions to investors as we conclude negotiations in respect thereto.
For our Adventus investors who received distributions during 2012 (1st Term Sheet investors only), they will be receiving T3 slips shortly from our disbursing agent which were mailed last week. All distributions received in 2012 by investors were treated as a return of capital, such that there is no income to be included in your 2012 income, just a reduction of adjusted cost base.
We are currently underway with the 2012 audits of Adventus Realty Trust, and our management entity, Adventus Capital Partners Ltd., and we will provide these 2012 audited financial statements to Adventus investors in due course. When we provide the 2012 audited financial statements, we will also provide notice to Adventus Investors at the same time for the 2013 Annual General Meetings for each entity.
Finally, we are making a 2% distribution (or 8% per annum) for the 1st quarter 2013, which is our fifth consecutive quarterly distribution, payable to unit holders of record as of March 31, 2013 and have commenced the process to distribute these amounts to unit holders on or about April 25, 2013.
We trust that our first quarter of operations for 2013 have met the expectations of our unit holders. We continue to work diligently on your behalf to move Adventus forward with our goals for profitable growth and becoming a publicly traded REIT.
ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCA