TORONTO -- H&R Real Estate Investment Trust has signed a deal to buy the Hess Tower, an office building in downtown Houston, for $442.5-million (U.S.).
The trust said Wednesday the 29-storey office building, which was completed in June, includes 844,763 square feet of office space and is fully leased to U.S. energy company Hess Corp.
To help pay for the deal, the Toronto-based trust said it has signed a deal with a syndicate of underwriters co-led by Canadian Imperial Bank of Commerce and RBC Dominion Securities Inc. to raise $125-million (Canadian) in an offering of units at a price of $23.30 each.
Units of the trust closed at $23.75, up 13 cents, on the Toronto Stock Exchange on Wednesday.
The trust also said it has secured a commitment for a $250-million (U.S.) first mortgage financing at 4.5 per cent.
"Hess Tower, along with the recently acquired Gotham Center in New York City and the Bow in downtown Calgary, will together become the hallmark of our portfolio of high-quality properties that will provide stable and growing cash flow to our unitholders for decades to come," H&R president and chief executive officer Tom Hofstedter said in a statement. H&R has a portfolio of 38 office, 117 industrial and 133 retail properties across North America.
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