Automotive Properties REIT (APR-UN-T) is acquiring seven automotive dealership and collision centre properties, in Greater Montreal and in Orlando, Fla., for a total of $93.5 million, the trust announced today in its Q2 financial report.

Six of the properties (five dealerships and the collision centre) are in the Montreal suburb of Île-Perrot. They are being acquired from Groupe AutoForce Inc. for approximately $70.5 million.

The dealerships include GM Île-Perrot, Île-Perrot Toyota, Mazda 2-20, Hyundai Île-Perrot and Ford Île-Perrot, and comprise an aggregate of 177,932 square feet on 28 acres of land. 

The acquisition is expected to close in Q3, and remains subject to customary closing conditions. 

"We continue to advance our strategy of acquiring properties in growing metropolitan markets and enhancing our tenant and geographic diversification,” Milton Lamb, the REIT CEO, said in the announcement. “We look forward to further expanding our presence in the Greater Montreal Area with the acquisition of five automotive properties and one collision centre property and also adding our second Rivian-tenanted property in Florida to our portfolio.” 

Automotive Properties REIT plans to fund the Montreal acquisition by issuing $10 million in Class B LP Units via Automotive Properties Limited Partnership, the REIT's operating subsidiary, at $12 per unit. The balance is to be funded through credit facilities.

The Île-Perrot tenants are under long-term net leases, with annual adjustments linked to the consumer price index. The leases will be indemnified by Groupe AutoForce Inc.

Second acquisition in Florida this year

The REIT also waived conditions to acquire the real estate underlying a 34,938 square-foot automotive property on 6.4 acres of land at 4000 Shader Rd. in Orlando for C$23 million. 

The sales, delivery and service facility is tenanted by Rivian LLC under a long-term, net lease with fixed annual rent increases. This acquisition is also slated to close in Q3, subject to customary closing conditions.

Funding is to be satisfied via its credit facilities.

The property is the second Rivian-tenanted dealership the REIT is acquiring this year. In April, Automotive Properties closed on a C$18.8 million property in Tampa, Fla. 

Distribution increase, financial highlights

Elsewhere, Automotive Properties also announced a 2.2 per cent distribution increase in its financial report. The new distribution (paid monthly) will be $0.822 per unit on an annual basis.

"We generated continued growth in our rental revenue, cash NOI, same property cash NOI and AFFO per unit in the quarter and our AFFO payout ratio declined to 80.7 per cent," Lamb said in the announcement. "Supported by this strong financial performance, the trustees and management of the REIT have determined that an increase to our unitholder distributions is appropriate at this time."

Among its other highlights, Automotive Properties reported net income of $11.2 million (compared to $37.3 million for Q2 2024). Funds from operations in the quarter rose to $12.8 million from $12 million year-over-year.

It generated AFFO per unit of $0.249 (diluted), compared to $0.233 (diluted) for the year-earlier period.

Automotive Properties had a debt-to-gross-book value ratio of 44.4 per cent and had $68.5 million of undrawn capacity under its revolving credit facilities, $0.6 million of cash on hand and $85.8 million of unencumbered properties.