Mr. Frank Camenzuli reports
AGELLAN COMMERCIAL REAL ESTATE INVESTMENT TRUST PROVIDES UPDATE ON RECENT LEASING ACTIVITY IN TEXAS
Agellan Commercial Real Estate Investment Trust has provided an update on
substantial recent leasing activity in Texas. The REIT recently
completed a number of lease transactions that have increased the overall
occupancy of the REIT's Texas portfolio from approximately 90 per cent as at
Sept. 30, 2014, to a current occupancy of approximately 94 per cent.
Texas lease transactions subsequent to quarter-end:
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Subsequent to the third quarter ended Sept. 30, 2014, the REIT has
completed lease transactions in Texas representing a total of
approximately 145,000 square feet. Thirteen leases totalling
approximately 130,000 square feet were completed in Houston, while the
remainder were in Austin.
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Of these lease transactions completed, approximately 46,000 square
feet represent renewals, and approximately 99,000 square feet represent
new leases. Nine new leases totalling approximately 85,000 square feet
were completed in Houston, while the remainder were completed in
Austin.
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The aforementioned leasing activity increases the occupancy of the
REIT's Texas portfolio by approximately 4 per cent to 94 per cent. This is the REIT's
highest level of occupancy in Texas since the REIT's initial public offering in January, 2013.
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Houston's occupancy rate now sits at approximately 92 per cent, up from
approximately 87 per cent at quarter-end, while Austin's occupancy rate is now
100 per cent, up from approximately 96 per cent.
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The weighted average term of these new and renewing leases is
approximately 3.8 years.
Agellan's exposure to the oil and gas industry:
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Agellan has very little exposure to tenants which derive revenue from
the oil and gas industry, and is pleased to state that only
approximately 170,000 square feet of its Texas portfolio is occupied
by tenants with direct exposure to oil and gas. Of this, National
Oilwell Varco, an S&P A-plus-rated company, occupies approximately 88,000
square feet until September, 2020.
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The weighted average remaining lease term for the REIT's oil and gas
related tenants is approximately 3.8 years with only approximately
38,000 square feet expiring in the next two years.
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This exposure accounts for approximately 8 per cent of the REIT's total Texas
gross leasable area, and approximately 4 per cent of the REIT's entire gross
leasable area. It also accounts for approximately 13 per cent of the Texas
minimum rent, and approximately 6 per cent of the REIT's total minimum rent.
"As evidenced by these recently completed lease transactions, we
continue to see strong leasing momentum in our Texas portfolio,
notwithstanding the recent decline in oil prices. We believe this is a
result of the diversification of the Houston economy, with energy
employment accounting for approximately 38 per cent of local [gross domestic product] currently,
versus approximately 75 per cent in 1980s," says Frank Camenzuli, chief
executive officer of the REIT. "Furthermore, Texas has accounted for
approximately one out of every six jobs created in the United States in last
12 months, with the vast majority those being in industries other than
oil and gas."
We seek Safe Harbor.
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