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Lion Electric sells new Mirabel facility to BTB REIT for $28M

The battery plant in 9900, rue Irénée-Vachon, Mirabel, Que. (Courtesy BTB Real Estate Investment Trust)

Saint-Jérôme, Que.-based electric vehicle manufacturer Lion Electric Company has completed a sale-leaseback transaction with Montreal's BTB Real Estate Investment Trust for its new battery factory in Mirabel, Que. for $28 million.

The production facility is located at 9900 Irénée-Vachon street in Mirabel and is identified as a class-A industrial property by BTB REIT. It was completed in 2022, has an approximate leasable area of 176,819 square feet, and a building clear height of 32 feet.

Proceeds from the transaction will be used by Lion Electric (LEV-T) to “repay amounts outstanding under its revolving credit facility and to fund transaction expenses.”

BTB REIT (BTB-UN-T) says net proceeds from other recent property divestments were reinvested into this acquisition, allowing the company to “consolidate its short- and medium-term growth strategy by adding an industrial building to its portfolio.”

RBC Capital Markets acted as the real estate advisor to Lion Electric for the transaction.

A 20-year lease agreement

In its announcement, BTB noted ". . . this property has been developed to be a benchmark of environmental sustainability, with materials that promote energy recovery such as a LED-controlled lighting system and a high-performance thermal insulation."

The Mirabel battery manufacturing plant is part of a 1.6-million-square-foot Lion Electric site at the YMX International Aerocity of Mirabel, adjacent to Mirabel Airport.

The entire complex involved a $185-million investment and also includes an innovation centre for research and development. The R&D facility is not part of the transaction, and remains in Lion's hands.

As part of the transaction, Lion Electric entered into a lease agreement with BTB REIT for the battery factory with an initial 20-year term plus renewal options. Lion Electric does not expect the transaction to impact its operations.

The electric bus and truck manufacturer expects to equip 14,000 medium- and heavy-duty electric vehicles per year from the factory.

In a similar transaction, Avison Young Investment Management (AYIM) acquired Lion's Chicago-based Clarius Park Joliet in February 2022 on behalf of the Nova Scotia Pension Services Corporation. The 906,517-square-foot industrial facility is used by Lion Electric for making zero-emission medium- and heavy-duty vehicles, with an expected production capacity of up to 20,000 vehicles per year.

Lion Electric also completed a public market offering for $68 million in December 2022.

About Lion Electric, BTB REIT

Founded in 2008, Lion Electric designs, develops, manufactures and distributes fully electric school buses, minibuses and commercial trucks.

With more than 800 vehicles on the road, Lion currently employs more than 1,350 employees in all functions, including manufacturing, research and development, sales and marketing and administration.

It operates in the United States and Canada.

BTB is a real estate investment trust investing in industrial, off-downtown core office and necessity-based retail properties across Canada.

BTB owns and manages 74 properties, representing a total leasable area of approximately six million square feet.

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