TORONTO-Hines REIT of Chicago is acquiring a 1.05 million-sf mixed-use CBD development here from Brookfield Properties of New York for $252 million. The property is Atrium on Bay, which includes three office towers, a two-story retail mall, and a two-story parking garage. The transaction is expected to close toward the end of February.
Atrium on Bay is located at Bay and Dundas streets in the Downtown North submarket of Toronto. It was constructed during the early-to-mid 1980s and renovated in 2000 and 2001. The three office towers range from eight- to 13 stories in height and have a combined rentable area of 914,000 sf. The retail mall totals 137,000 sf.
The development is 85% leased. The major office tenant, with 372,733 sf, is the Canadian Imperial Bank of Commerce. The bank's leaseholds expire in 2011, 2013 and 2016. The balance of the complex is leased to 31 office tenants and 56 retail tenants, none of which leases more than 10% of the rentable area of the complex, according to Hines.
The $252-million purchase price does not include transaction costs, financing fees and working capital reserves. Hines REIT anticipates that it will fund the acquisition using borrowings under its revolving credit facility with KeyBank National Association and proceeds from its current public offering.
The closing is scheduled to occur on or about Feb. 23, 2007. Hines REIT put up $1 million in non refundable earnest money on Dec. 28, 2006 and expects to put up an additional $9 million on or about Jan. 29, 2007. Brookfield Properties declined comment.
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