Agellan Commercial Real Estate Investment Trust (Agellan or the REIT) (TSX: ACR.UN) announced today it has entered into a binding agreement to lease with Shoppers Realty Inc. (SRI), extending 133,000 square feet of their existing leased space at Parkway Place in Toronto, Ontario for a further term of 10 years at rental rates comparable with their existing lease. As part of the agreement, SRI will be vacating approximately 47,000 square feet at Parkway Place effective July 15, 2018.
Agellan has also entered into a lease with North York General Hospital (NYGH) at Parkway Place for approximately 33,000 square feet at current market rental rates. NYGH will take occupancy of approximately 3,500 square feet commencing June 1, 2018 for a period of 7 years, and the remaining 29,500 square feet beginning on April 1, 2019 for a period of 10 years.
Over the past few years, we have continuously displayed our ability to execute on our operational objectives, including strengthening the profile of Parkway Place, said Frank Camenzuli, Chief Executive Officer of the REIT. Our management team is looking forward to continuing our long-standing relationship with Shoppers and are excited to welcome North York General Hospital to the Parkway Place complex.
As previously announced, Agellan recently agreed with a third-party purchaser to dispose of the approximate 824,000 square foot office property and approximate 42,000 square foot retail space and parking garage known as Parkway Place. The sale price is approximately $256.3 million (excluding closing costs) and is subject to certain adjustments in respect of, among other things, certain committed leasing costs.
Following the sale of Parkway Place, Agellan expects to be retained by the purchaser to provide it with certain management services in respect of Parkway Place.
The sale of Parkway Place is expected to close during the second quarter of 2018 and is subject to certain conditions typical for a transaction of this type (other than a due diligence condition which has been waived by the purchaser). There can be no assurance that all conditions to closing will be satisfied or waived. For additional details in respect of the anticipated sale of Parkway Place, please refer to the REITs press release dated May 4, 2018.
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