CAPREIT Acquires Eight Vancouver-Area Properties, Sells Seven in Ontario and Quebec
August 10, 2010
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Canadian Apartment Real Estate Investment Trust (CAPREIT) has acquired eight low-rise and mid-rise apartment properties, totaling 307 suites, in or near Victoria, British Columbia.
The purchase price of approximately $46.7 million, excluding closing and transaction costs, was funded by $25.6 million in new mortgage financing, the assumption of one mortgage of $0.8 million maturing in February 2016, and the balance from the Acquisition and Operating Facility.
The acquisitions increase CAPREIT’s British Columbia portfolio to a total of 2,268 suites now representing approximately eight per cent of its total portfolio.
“We are extremely pleased to be enhancing the geographic diversification of our portfolio and increasing our presence in the high-growth British Columbia market,” says Thomas Schwartz, CAPREIT’s President and Chief Executive Officer. “These are quality properties with significant upside potential. By applying our proven property management and value-enhancing strategies, we are confident the buildings will make a solid and growing contribution to our results in the years ahead.”
CAPREIT has also sold five non-core apartment properties, aggregating 570 suites, for a total sales price of $45.9 million, excluding closing and transaction costs. Four properties are located in Kitchener, Ontario, with the fifth in Mississauga, Ontario. The company will represent a gain of about $8.1 million on the sale. After estimated closing costs, and the repayment of approximately $20.1 million in mortgages, the net cash proceeds from the sale were approximately $23.2 million.
The company also announces that it has sold two apartment properties in two separate transactions, comprising of 338 suites located in Montreal for total sales prices of $14.8 million, excluding closing and transaction costs. The two sales transactions resulted in a net gain of approximately $1.3 million. After estimated closing costs, and the repayment of approximately $5.9 million in mortgages, the net cash proceeds from the sales were approximately $7.5 million.
“One of our stated strategies is to continually monitor our portfolio to identify non-core properties, and to redeploy the capital from their disposition to acquire strategic assets better suited to our targeted portfolio composition and property management objectives,” says Schwartz. “We believe we had maximized the value we could achieve with these non-core properties and determined we could generate cash from these sales to repay bank indebtedness and help finance our future growth initiatives.”
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