AIP Realty Trust Provides Update on the Execution of its Expansion Plans

VANCOUVER, British Columbia, March 10, 2025 (GLOBE NEWSWIRE) — AIP Realty Trust (the “Trust” or “AIP”) (TSXV: AIP.U) today provides a corporate update on the progress of the execution of its expansion plans.

Credit Facility: AIP has entered into a term sheet and mandate letter with a leading US banking institution to serve as the administrative agent and sole lead arranger of a senior first mortgage, secured, interest-only credit facility (the “Facility”). The total Facility will be for USD $300,000,000, with the initial amount being USD $100,000,000. The Facility will be subject to an accordion option whereby the Trust shall have the right to increase the Facility by an amount equal to an additional USD $200,000,000.

Closing of the Facility will be subject to certain customary conditions precedent, and further details will be disclosed in a press release of the Trust upon entering into the definitive documentation for the Facility, which will be filed on the Trust’s SEDAR+ profile at www.sedarplus.com. The funds made available pursuant to the Facility will be used to finance the acquisition of AllTrades branded Serviced Industrial Business Suites (“SIBS”) light industrial flex facilities following the completion of the AllTrades Transaction (as defined below).

Off-Balance Sheet Development JV: AIP has entered into a non-binding term sheet (the “Term Sheet”) between the Trust and a significant financial institutional group (the “JV Partner”), pursuant to which the Trust and the JV Partner will form a joint venture entity (the “Joint Venture”), governed by a joint venture agreement (the “Joint Venture Agreement”) to be negotiated by the parties. This joint venture will serve as an off-balance sheet development vehicle to construct new AllTrades SIBS facilities (each a “SIBS Facility”) across the Sunbelt states, which AIP will then acquire outright upon completion and leasing stabilization.

Pursuant to the terms set out in the Term Sheet, among other things:

1. for each new SIBS Facility being developed under the joint venture, AIP will provide 10% of the required development equity, and the JV Partner will provide 90%; AIP has the option to invest up to 45% of equity into each new SIBS Facility development;
2. the Trust and the Joint Venture will enter into forward purchase agreements (each, a “Forward Purchase Agreement”) for each SIBS Facility being developed in the Joint Venture, pursuant to which the Trust will have a right but not obligation to purchase such SIBS Facility at a 10% discount to the independently appraised value for one year after property completion. AIP and the JV Partner, from the sale of the SIBS Facility to AIP, after the 10% discount, will receive equal waterfall return economics based on the equity each has provided for the development; and
3. AllTrades Industrial Properties, LLC (“AllTrades”) (which is to become an indirect, wholly-owned subsidiary of the Trust, following the completion of the proposed transaction whereby the Trust’s subsidiary AIP OP, LP is to acquire all of the issued and outstanding membership interests of AllTrades (the “AllTrades Transaction”))¹ will serve as the operations manager for the development of each new SIBS Facility pursuant to the terms of a management agreement to be entered into in connection with the approval of each new SIBS Facility (each, a “Management Agreement”).

¹ For further information with respect to the proposed acquisition of AllTrades, please refer to the Trust’s press release dated November 14, 2024, which has been filed on the Trust’s SEDAR+ profile at www.sedarplus.com.

In addition, AIP will issue the JV Partner warrants in AIP equal to five percent (5%) of the JV Partner’s funds invested in each new SIBS Facility at the time of the primary investment in such SIBS Facility, each warrant to be exercisable for a period of three years from issuance with an exercise price equal to the thirty-day VWAP price of the Class A Trust Units of the Trust on the date of grant.

Closing of the acquisition of each SIBS Facility will be subject to certain customary conditions precedent. Upon entering into the Joint Venture Agreement, the Trust will issue a press release with further details on the proposed Joint Venture which will be filed on the Trust’s SEDAR+ profile at www.sedarplus.com.

“We are excited to be reaching this substantial milestone in putting in place all the components necessary for the execution of AIP’s rapid expansion plans to build, own, and operate a significant portfolio of AllTrades branded light industrial flex SIBS across the Sunbelt States of the United States. Having AllTrades, a fully vertically integrated development and construction company, an institutional joint venture development funding partner, and a credit facility led by a formidable US bank provides AIP with the experience, resources, and ability to grow well into the future,” said Les Wulf, Executive Chairman of the Trust.  

AllTrades and Property Acquisition: In addition, the Trust provides the following update highlighting its progress:

• The Trust continues to advance the proposed AllTrades Transaction. Further information regarding the AllTrades Transaction will be disclosed by the Trust in a comprehensive news release to be filed on the Trust’s SEDAR+ profile at www.sedarplus.com. Further information regarding the special meeting of unitholders of the Trust in respect of the AllTrades Transaction will also be disclosed in the coming weeks.
• Concurrently with the completion of the AllTrades Transaction, AIP intends to acquire six (6) completed and leased AllTrades SIBS properties, totaling approximately 430,355 sq. ft. and 161 rental units, for $118.1 million, subject to final closing adjustments and approvals. AIP expects to utilize $65.0 million of new debt from the Facility in order to finance a portion of these acquisitions:  

• Due to demand surrounding the new SIBS asset class created by AllTrades, AllTrades has increased rent rates from between 21% to 35% over the past two years on the above-mentioned facilities to be acquired.
• The quality of the SIBS asset class is further reflected in the creditworthiness of the SIBS tenants over older traditional light industrial flex tenants, which is further demonstrated across all the existing tenants in the AllTrades SIBS Facilities; their gross rental paid is only 5.8% of their gross revenue, and the average tenant has been in business for approximately 11 years.    

About AIP Realty Trust
AIP Realty Trust is a real estate unit investment trust with a growing portfolio of AllTrades branded Serviced Industrial Business Suites light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capex intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. For more information, please visit www.aiprealtytrust.com.

For further information from the Trust, contact:
Leslie Wulf
Executive Chairman
(214) 679-5263
les.wulf@aiprealtytrust.com

Or

Greg Vorwaller
Chief Executive Officer
(778) 918-8262
Greg.vorwaller@aiprealtytrust.com

Cautionary Statement on Forward-Looking Information
This press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of AIP Realty Trust with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding the proposed Facility, the Joint Venture and its targeted SIBS. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to the entering into of the definitive documentation regarding the Facility and the Joint Venture, the closing of each of the SIBS Facility acquisitions, the entering into of the Forward Purchase Agreements and the Management Agreements in respect of each SIBS Facility, proposed financing activity, proposed acquisitions, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Trust’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Trust, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward- looking statements. The Trust does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this news release are made as of the date of this news release. AIP does not undertake to update any such forward- looking information whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The Trust has not registered and will not register the securities under the U.S. Securities Act. The Trust does not intend to engage in a public offering of their securities in the United States.

Source: AIP Realty Trust