OTTAWA, ONTARIO--(Marketwire - Jan. 25, 2012) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
InterRent Real Estate Investment Trust (TSX:IIP.UN)(TSX:IIP.DB) ("InterRent") announced today that it has entered into an unconditional agreement to acquire a property consisting of 2 high-rise apartment buildings, totaling 230 suites, situated in Burlington, Ontario.
The complex is located at 2386 & 2400 New Street, and each building contains 115 suites with a total of 39 1-bedroom, 183 2-bedroom and 8 3-bedroom suites and 253 parking spaces. Ample unused storage space exists in both buildings for possible future apartment suite and amenity room build outs. The property is ideally located between Highway 403 to the North and Lake Ontario to the South (many of the suites having a view of the lake) and is walking distance to Central Park and many other amenities.
The acquisition is expected to be completed on or about March 7, 2012 at a purchase price of $19,910,000 or $85,565 per suite. The property is being purchased with a going in capitalization rate of 6.6% and is immediately accretive to the REIT. The acquisition will be financed at 75% of purchase price through a combination of an existing first and new second mortgage with a blended rate of approximately 3%.
As part of the repositioning of the portfolio that began in late 2009, InterRent has invested heavily in its existing portfolio, has disposed of assets that are non-core to its growth objectives and is focused on growth in a structured and prudent manner. This addition to InterRent's 4310 suites currently under ownership represents a 5% suite increase to InterRent's portfolio in an accretive manner. InterRent is actively seeking synergistic and accretive acquisitions through a strong broker network and self directed private sources.
"This acquisition adds more scale to our operations in the Burlington, which based on our experience is a strong market.", said Mike McGahan, CEO. "We feel that there is untapped value in the buildings that we can capture through investing in the property and repositioning the site similar to what we have done with our other Burlington location."
InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties.
InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure and, offer opportunities for accretive acquisitions.
InterRent's primary objective is to use the proven industry experience of the Trustees, Management and Operational Team to: (i) provide Unitholders with stable and growing cash distributions from investments in a diversified portfolio of multi-residential properties; (ii) enhance the value of the assets and maximize long-term Unit value through the active management of such assets; and (iii) expand the asset base and increase Distributable Income through accretive acquisitions.
Forward Looking Statements
This news release contains "forward-looking statements" within the meaning applicable to Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "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". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent's most recently publicly filed information located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.