F-10: Granite REIT Files Shelf Prospectus for Up to $1.5 Billion in Securities

Granite Real Estate Investment Trust and Granite REIT Inc. have filed a shelf prospectus allowing them to offer up to $1.5 billion in various securities over the next 25 months.

Summary

• Granite Real Estate Investment Trust and Granite REIT Inc. have jointly filed a shelf prospectus to offer up to $1.5 billion in securities.
• The securities may include stapled units, stapled convertible debentures, stapled subscription receipts, stapled warrants, and units (a combination of the aforementioned securities).
• The securities may be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in one or more prospectus supplements.
• The filing incorporates by reference previously registered but unsold securities from prior registration statements.
• The offering is regulated by securities commissions in Canada and the U.S.
• The stapled units are currently listed on the TSX under the symbol GRT.UN and on the NYSE under the symbol GRP.U.
• As of February 16, 2024, the closing price of the Stapled Units on the TSX was $74.70 and on the NYSE was US$55.44.

Sentiment

Score: 7

Explanation: The document is neutral to positive. It outlines a financial strategy for Granite REIT, providing flexibility for future capital raises. The lack of specific details makes it difficult to assess the immediate impact, but the overall tone is stable and forward-looking.

Risks

• There is no guarantee that an active trading market will develop for the Stapled Convertible Debentures, Stapled Subscription Receipts, Stapled Warrants or Units.
• The purchase of the Securities may have tax consequences both in the United States and Canada.
• The ability to enforce civil liabilities under U.S. federal securities laws may be affected adversely by the fact that Granite REIT and Granite GP are formed or incorporated under the laws of Canada, most of Granites officers and directors and most of the experts named in this Prospectus are residents of Canada, and all or a substantial portion of their assets, and a substantial portion of Granites assets, are located outside the United States.
• A return on a purchasers investment in Stapled Units is not comparable to the return on an investment in a fixed income security.
• The recovery of a purchasers initial investment is at risk, and the anticipated return on a purchasers investment is based on many performance assumptions.
• Although Granite intends to make distributions to holders of Stapled Units (Unitholders), these distributions may be reduced or suspended.

Future Outlook

Granite may offer and issue securities from time to time during the 25-month period that the short form base shelf prospectus remains valid.

Industry Context

This announcement is typical for REITs seeking flexible access to capital markets to fund acquisitions, developments, or refinance debt.

Comparison to Industry Standards

• Many REITs use shelf prospectuses to efficiently raise capital.
• Comparable REITs with similar market capitalization and investment strategies also utilize this method.
• For example, Allied Properties REIT and RioCan REIT have used shelf prospectuses to access capital markets.

Stakeholder Impact

• Shareholders: Potential dilution if stapled units are issued.
• Creditors: Potential impact on debt ratios depending on the use of proceeds.
• Potential investors: Opportunity to invest in Granite REIT through various types of securities.

Next Steps

• Granite will file prospectus supplements to detail the terms of any specific offerings under the shelf prospectus.
• Potential investors should review these supplements carefully before making investment decisions.

Key Dates

Keywords

stapled units, shelf prospectus, Granite REIT, Granite GP, securities, convertible debentures, subscription receipts, warrants, units, offering