- REIT Provides Update on Property Dispositions and Tax Treatment of Cash Distributions -
TORONTO/DALLAS, Feb. 16, 2016 /CNW/ - Milestone Apartments Real Estate Investment Trust (TSX: MST.UN) ("Milestone" or the "REIT") today announced a cash distribution of US$0.04583 per REIT unit for the month of February, representing US$0.55 per REIT unit on an annualized basis. Payment will be made on March 15, 2016 to unitholders of record as at February 29, 2016.
Update on Parks at Treepoint and Post Oak Place Dispositions
The REIT has completed the previously announced dispositions of Parks at Treepoint (Dallas / Fort Worth - 586 units - built in 1984) and Post Oak Place (Dallas / Fort Worth - 354 units - built in 1983). The US$63.7 million in combined gross proceeds from the sale of these assets will be used to reduce the balance on the REIT's revolving line of credit.
Update on Tax Withholdings
The REIT also announced today that, due to realized capital gains from recent asset dispositions, it will begin withholding from a portion of the distributions payable to Canadian (and other non-U.S.) unitholders. Distributions paid by the REIT to Canadian investors that are made out of the REIT's "current or accumulated earnings and profits" (as determined under U.S. federal income tax principles) generally are subject to U.S. withholding tax at a rate of 15% for investors that qualify for benefits under the United States-Canada Income Tax Convention (1980, as amended). It is estimated that, as a result of the realized capital gains from recent asset dispositions, approximately US$0.02841 or 62% of the cash distribution for the month of February will be paid out of the REIT's current or accumulated earnings and profits, and accordingly will be subject to U.S. withholding tax. The composition of the REIT's distributions may change over time, which may affect the amount withheld in the future.
To the extent a Canadian investor is subject to U.S. withholding tax with respect to distributions paid by the REIT out of the REIT's current or accumulated earnings and profits, the amount of such tax generally will be eligible for foreign tax credit or deduction treatment, subject to the detailed rules and limitations under the Income Tax Act (Canada). Qualified residents of Canada that are tax-exempt entities established to provide pension, retirement or other employee benefits (including trusts governed by a RRSP, a RRIF or a RDSP, but excluding trusts governed by a TFSA, a RESP or a RDSP) may be eligible for an exemption from U.S. withholding tax.
Distributions to non-Canadian holders may also be subject to Canadian withholding tax. However, in general, income distributions from the REIT to a U.S. unitholder will not be subject to Canadian withholding provided the unitholder is a qualifying resident of the U.S. for purposes of the Canada-U.S. Tax Treaty. Similarly, return of capital distributions to a U.S. unitholder will not be subject to Canadian withholding tax.
For a general summary of the taxation of distributions paid to Canadian and U.S. unitholders, including information regarding U.S. withholding tax, please see the sections titled "Certain Canadian Federal Income Tax Considerations" and "Certain U.S. Federal Income Tax Considerations" in the REIT's initial public offering prospectus dated February 27, 2013 and "Risk Factors – Tax-Related Risks" in the REIT's annual information form for the year ended December 31, 2014, copies of which are available on the SEDAR website at www.sedar.com. Additional tax information regarding the REIT's distributions is also available on the REIT's website at http://www.milestonereit.com/investor-relations/distributions/tax-information. Unitholders should consult their own tax advisors for advice with respect to the tax consequences of receiving a distribution from the REIT in their own circumstances.
Milestone is an unincorporated, open-ended real estate investment trust that is governed by the laws of Ontario. The REIT's portfolio consists of 72 multifamily garden-style residential properties, comprising 22,546 units that are located in 14 major metropolitan markets throughout the Southeast and Southwest United States. Milestone is the largest real estate investment trust listed on the TSX focused solely on the United States multifamily sector. The REIT operates its portfolio through its internal property management company, Milestone Management, LLC, which has approximately 1,500 employees across the United States. Based in Dallas, TX, TMG Partners, L.P., an affiliate of The Milestone Group, LLC, is the external asset manager of the REIT. For more information, please visit www.milestonereit.com.
About The Milestone Group, LLC
The Milestone Group is a privately-held real estate investment management company with expertise and presence in major metropolitan markets throughout the United States. The firm has corporate offices in Dallas, Texas and New York, New York with regional acquisition and management offices across the United States. Founded in 2004, The Milestone Group has a strong track record of investing in the U.S. multifamily sector, including completion of approximately US$10 billion in multifamily transactions. For more information, please visit www.milestonegp.com.
This news release may contain forward-looking statements (within the meaning of applicable securities laws). Forward-looking statements are identified by words such as "estimate", "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. Some of the specific forward-looking statements in this news release include, but are not limited to, statements with respect to composition of distributions and amounts subject to withholding tax. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the REIT's actual accumulated earnings and profits and factors discussed under the heading "Risk Factors" in the REIT's annual information form, available at www.sedar.com. The forward-looking statements in this news release are based on certain assumptions. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
SOURCE Milestone Apartments REIT
Image with caption: "Milestone Apartments Real Estate Investment Trust (CNW Group/Milestone Apartments REIT)". Image available at: http://photos.newswire.ca/images/download/20160215_C6167_PHOTO_EN_621112.jpg
For further information: Robert Debs, Investor Relations, Milestone Apartments REIT, Tel: 214.561.1215; Bruce Wigle, Investor Relations, Bay Street Communications, Tel: 647.496.7856