NXR.UN Nexus Industrial REIT

Nexus Real Estate Investment Trust (TSX:NXR.UN) (“Nexus” or the “REIT”) announced today that it has entered into an agreement to sell to a syndicate of underwriters led by BMO Capital Markets and Desjardins Capital Markets (collectively, the “Underwriters”), on a bought deal basis, 3,700,000 units of the REIT (the “Units”) at a price of $8.20 per Unit (the “Offering Price”) for gross proceeds of approximately $30 million (the “Offering”). The REIT has also granted the Underwriters an over-allotment option to purchase up to an additional 555,000 Units on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering, which, if exercised in full, would increase the gross proceeds of the Offering to approximately $34.9 million.

The REIT intends to use the net proceeds from the Offering to fund the REIT’s future acquisitions and for general corporate purposes.

“We look forward to continuing to execute on our strategic growth plan, with a focus on growing our industrial portfolio,” Kelly Hanczyk, the REIT’s Chief Executive Officer stated. “The recent and pending acquisitions of industrial properties in London and Ajax, Ontario, Moncton, New Brunswick and Edmonton, Alberta demonstrate our strong commitment to increasing the industrial weighting within the REIT’s portfolio. We continue to pursue a pipeline of potential acquisition of industrial properties to capitalize on attractive opportunities. The equity offering enables us to continue the REIT’s momentum and allows us to execute on those opportunities.”

Recent Acquisition and Operational Updates

• The REIT has a conditional agreement to acquire six industrial properties in London, Ontario which will add 1,191,184 square feet of gross leasable area (GLA) to its portfolio for a purchase price of $103.5 million, representing a 6% going-in capitalization rate. The REIT expects to issue approximately $65.6 million in Class B LP units to the vendor at a price of $7.64 per unit, which approximates the trading price of the REIT’s units at the time of entering into the conditional agreement. Closing is anticipated for April 1, 2021.
• The REIT has a conditional agreement to acquire two industrial buildings in Edmonton, Alberta with 108,156 square feet of GLA for $14 million. The buildings are fully leased to non-oil and gas tenants. The REIT expects to issue $7.0 million in Class B LP units to the vendor at a price of $8.20 per unit. Closing is anticipated for March 1, 2021.
• On December 31, 2020, the REIT completed the acquisition of a 50% interest in a 500,000 square foot industrial property (including 95,000 square foot building expansion) located in Ajax, Ontario for $28.5 million, which was partially financed with new mortgage proceeds.
• On December 1, 2020, the REIT completed the acquisition of a single-tenant industrial property with 93,443 square feet of GLA in Moncton, New Brunswick for $8.0 million, representing 7.5% going-in capitalization rate. The building is fully leased to a Fortune 500 company. The REIT issued $3.2 million in Units to the vendor at a deemed value of $8.00 per Unit, to partially satisfy the purchase price.
• To date, the REIT has collected 97.4% of contractual gross rent charged between March and December 2020, and has collected 96.6% of its December 2020 contractual gross rent.

The Units under the Offering will be offered in Canada pursuant to a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, pursuant to National Instrument 44-101 - Short Form Prospectus Distributions. The Offering is subject to customary conditions and receipt of all necessary approvals, including the approval of the Toronto Stock Exchange. The Offering is expected to close on or about March 4, 2021.

The Units have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, (the "1933 Act") and may not be offered, sold or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the 1933 Act), except pursuant to an exemption from the registration requirements of the 1933 Act. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Units in the United States or to, or for the account or benefit of, U.S. persons.

About Nexus REIT

Nexus is a growth-oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial, office and retail properties located in primary and secondary markets in North America. The REIT currently owns a portfolio of 75 properties comprising approximately 4.4 million square feet of rentable area. The REIT has approximately 28,095,000 Units issued and outstanding. Additionally, there are Class B LP units of subsidiary limited partnerships of Nexus issued and outstanding, which are convertible into approximately 6,326,000 Units.

Forward Looking Statements

Certain statements contained in this news release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.

While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.

For further information please contact: Kelly Hanczyk, CEO at (416) 906-2379; or Rob Chiasson, CFO at (416) 613-1262.