DBRS Morningstar Comments on Artis REIT's Participation in Investor Group to Acquire Cominar

DBRS Limited (DBRS Morningstar) notes that Artis Real Estate Investment Trust announced on October 24, 2021, its participation in a consortium (the Consortium), which has announced an agreement to acquire Cominar Real Estate Investment Trust and is expected to close in the first quarter of 2022. Artis' participation in this acquisition is consistent with its Business Transformation Plan, which includes purchasing real estate capital markets investments.

Should DBRS Morningstar determine that the REIT’s reduction of leverage is highly probable, DBRS Morningstar would likely remove the Under Review with Negative Implications designation and change the trend for Artis’ ratings upon completion of its review in the fourth quarter of 2021. Conversely, DBRS Morningstar would likely take a negative rating action on Artis’ ratings should it determine that management is unlikely to reduce its total debt-to-EBITDA ratio to below 9.8 times (x) or increase EBITDA interest coverage above 2.70x, on a sustained basis, all else equal. DBRS Morningstar emphasizes that, to the extent that Artis engages in activities outside those contemplated by the RE Methodology, leverage and interest coverage will likely need to be meaningfully better than the aforementioned thresholds.