07/30/2012 05:03 EDT | Updated 09/29/2012 05:12 EDT

Cominar REIT buys 68 properties from GE Capital Real Estate for $697M

QUEBEC - Cominar Real Estate Investment Trust (TSX:CUF.UN) said Monday it has signed a deal to buy a portfolio of 68 properties in Quebec and Ottawa from GE Capital Real Estate for $697 million.

The deal includes 14 office buildings and one vacant lot of land in Ottawa, 23 office properties and 23 industrial properties in Montreal and four office properties and three industrial properties in Quebec City.

"With this acquisition, we are integrating the team and the operating platform that has managed and operated these assets," Cominar president and chief executive Michel Dallaire said in a statement.

"We are excited by this strategic acquisition, which is a logical move for us to enhance our platform for meaningful future growth in Ontario."

The deal is expected to close in mid-September.

To help pay for the deal, Cominar also said it has signed a deal to raise $250 million in an offering of 10.1 million trust units at $24.70 per unit.

The underwriters have also been granted an over-allotment option for up to an additional 1.5 million units that could raise the financing to as much as $287.5 million.

Cominar said the remainder of the purchase price will be funded through its current bank facilities and a new interim bank facility, as well as the assumption of $30 million of existing mortgage debt.

Following the deal, Cominar expects to have a debt-to-gross-book-value ratio of approximately 53 per cent.

In January, Cominar reached a deal to acquire Canmarc (TSX:CMQ.UN), one of Eastern Canada's largest real-estate trusts, for $905.4 million.

Cominar currently owns a portfolio of 415 properties, including 82 office, 158 retail and 175 industrial and mixed-use buildings.

Units in the trust, which announced the deal after the close of markets, were down 28 cents at $25.17 on the Toronto Stock Exchange on Monday.