Skyline Industrial REIT has recently expanded its portfolio with the acquisition of two new properties in Quebec and Ontario as part of its strategy to focus on more modern assets across Canada. The company’s president, Mike Bonneveld, stated that Skyline is actively seeking out assets despite being selective in its acquisitions.
Following the sale of its last office property in February and other non-core assets over the past few years, Skyline’s balance sheet is in a strong position. Bonneveld attributes this to both strategic foresight and a bit of luck, which has allowed the company to be discerning in its acquisitions.
Among the new acquisitions is a facility at 3601 Avenue de la Gare in Mascouche, Quebec, a suburb of Montreal. The multi-tenant development, completed in late September, spans 321,000 square feet, with a 226,000-square-foot cold-storage facility occupied entirely by Congebec. The company had expressed a need for a new building in the Montreal area several years ago, leading to the acquisition of the Mascouche site based on a 20-year lease commitment for the new development.
Skyline is currently in lease negotiations for the remaining dry-storage space at the site. Bonneveld anticipates closing a deal for about 60% of the space soon, with interest from two other tenants for the remaining space.
In addition to the Mascouche property, Skyline is partnered with Rosefellow on nine other developments in the Montreal and Ottawa areas. Seven of these are in various stages of development and are on track or ahead of schedule. Two projects in Montreal are essentially complete and fully leased. Skyline plans to buy out its equity partners in these two projects, with closures expected in the first quarter of 2024.
Skyline Industrial REIT has further expanded its portfolio with the acquisition of a 148,050-square-foot building at 353 Griffin Way in Woodstock, Ontario. The building, which was completed in October, is fully leased to IPEX on a long-term basis. The deal, valued at $28.5 million, was brokered late in 2022 when the building was still under construction.
The Woodstock property is Skyline’s second acquisition in the area, which has become increasingly popular with manufacturers and logistics companies. Bonneveld expressed satisfaction with the acquisition, citing the rent discount compared to Kitchener-Waterloo and Brantford, the quality of the new building, and the strength of the tenant, IPEX.
Skyline is also conducting due diligence on two other potential acquisitions. One is expected to close before Christmas, while the other is still in the early stages.
In September, Skyline sold 12 non-core assets across four provinces in two separate transactions. These sales, totalling 485,488 square feet, included 11 light industrial/showroom spaces leased by Cervus Equipment Corporation, which were acquired by Brandt Tractor Ltd. for $68 million. Skyline also sold an older cold-storage facility in Montreal for $22.6 million. The proceeds from these sales will be reinvested in acquisitions and development.
Skyline’s current strategy is focused on acquiring warehousing and logistics-centered properties along major highway corridors and transportation routes. However, the company is open to selling properties if presented with a compelling offer.
With these recent transactions, Skyline now owns 49 properties across five provinces, totalling 9,196,171 square feet of industrial space. The company, based in Guelph, Ontario, is now 84% weighted in warehousing, distribution, and logistics-focused assets. Skyline, a privately owned and managed real estate investment trust that launched in 2012, is distributed as an alternative investment product through Skyline Wealth Management Inc. The properties are managed by Skyline Commercial Management, a commercial real estate property management company within the Skyline Group of Companies.
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