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Agellan Commercial Real Estate Investment Tru
Symbol ACR
Shares Issued 23,479,420
Close 2014-12-18 C$ 8.14
Market Cap C$ 191,122,479
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Agellan's Texas portfolio occupancy rate climbs to 94%

2014-12-19 10:22 ET - News Release

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:

  • 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.
  • 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.
  • 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.
  • 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.
  • The weighted average term of these new and renewing leases is approximately 3.8 years.

Agellan's exposure to the oil and gas industry:

  • 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.
  • 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.
  • 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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