- What Artis REIT announced $520m in senior secured credit facilities
- Why It completed a strategic review that began in August 2023
- What next The firm has more liquidity and is looking for growth opportunities
Artis Real Estate Investment Trust has negotiated a collective $520m in new senior secured credit facilities.
The move to refinance debt and improve the REIT’s risk profile came as part of the firm’s year-and-a-half-long strategic review process, which has now concluded.
The new three-year credit facilities include a $350m revolving credit facility and a $170m nonrevolving credit facility. At closing, they will have an interest rate of prime plus 110 bps. Artis will have the option to convert to a rate of an adjusted Canadian Overnight Repo Rate Average plus 210 bps.
BMO Capital Markets and CIBC jointly arranged the facilities, which will be used for general corporate purposes including acquisitions and development of commercial real estate.
As part of the strategic review, Artis sold $1.1bn of assets and used the proceeds to decrease the total debt-to-gross book value from 47.2% in June 2023 to 39.8% in September 2024.
“Since announcing the strategic review in August 2023, we have been navigating a very challenging interest rate environment,” Samir Manji, president and chief executive of Artis, said in a release.
“Despite the significant headwinds we faced, the quality and resilience of Artis’s portfolio enabled us to monetize $1.1 billion of real estate and, through this active disposition exercise, we have been able to materially reduce leverage and de-risk Artis’s balance sheet.”
The REIT’s near-term debt maturities are satisfied and it can now turn its attention to growth opportunities that will “produce above average risk-adjusted returns,” Manji said.
