/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S. NEWSWIRES/
TORONTO, Feb. 21, 2013 /CNW/ - True North Apartment Real Estate
Investment Trust (the "REIT") (TSXV: TN.UN) is pleased to announce that
it intends to acquire (the "Acquisition") four multi-family properties
(the "Properties") in Ontario for an aggregate purchase price of $25.7
million (inclusive of an installment note to be provided at closing).
The Properties consist of four mid-rise buildings and a townhouse
complex, and are located in Kitchener, Guelph and Brantford.
The Properties were originally constructed between 1968 and 1972, and
comprise a total of 265 suites, the majority of which are two bedroom
units. These suites are currently 97% occupied at an average in-place
rent of $833 per suite. In keeping with the REIT's stated strategy, the
Properties are well maintained, and near-term capital expenditures are
expected to be minimal. The transaction further demonstrates the
benefits of the REIT's relationship with Starlight Investments Ltd.
("Starlight") through their ability to source attractive off-market
acquisition opportunities for the REIT.
The purchase price of $25.7 million implies a capitalization rate of
approximately 5.7% or $96,900/unit. The purchase price will be financed
through a combination of cash and the assumption of $12.7 million in
existing mortgage debt, representing a transaction
debt-to-gross-book-value of 49.4%. On closing of the Acquisition, the
assumed mortgage debt is expected to have an effective weighted average
term to maturity of 7.8 years and an effective 2.5% interest rate after
giving effect to an installment note to be provided in connection with
the Acquisition. The impact on the REIT's overall capital structure is
expected to be minimal. Completion of the Acquisition is expected to
occur on or about February 28, 2013.
"The REIT is very pleased to be able to further strengthen both our
overall property portfolio, as well as our position in Kitchener and
Guelph, two communities where we have witnessed strong performance to
date," stated Leslie Veiner, the REIT's Chief Executive Officer. "While
the transaction is immediately accretive, we look forward to increasing
its value by pursuing opportunities for further organic growth."
Acquired Properties Summary
191 Silver Creek Pwy S
292 Elgin St.
550 Westmount Rd. W
607 & 611 Heritage Dr.
Certain statements contained in this press release constitute
forward-looking information within the meaning of Canadian securities
laws. Forward-looking statements are provided for the purposes of
assisting the reader in understanding the REIT's financial position and
results of operations as at and for the periods ended on certain dates
and to present information about management's current expectations and
plans relating to the future and readers are cautioned that such
statements may not be appropriate for other purposes. Forward-looking
information may relate to the REIT's future outlook and anticipated
events or other financial or operating results, including completion of
the Acquisition and may include statements regarding the financial
position, business strategy, budgets, litigation, the implied
capitalization rate of a particular acquisition, projected costs,
anticipated capital expenditures, financial results, taxes, plans and
objectives of or involving the REIT. Particularly, statements regarding
future results, performance, achievements, prospects or opportunities
for the REIT or the real estate industry are forward-looking
statements. In some cases, forward-looking information can be
identified by such terms such as "may", "might", "will", "could",
"should", "would", "occur", "expect", "plan", "anticipate", "believe",
"intend", "seek", "aim", "estimate", "target", "project", "predict",
"forecast", "potential", "continue", "likely", "schedule", or the
negative thereof or other similar expressions concerning matters that
are not historical facts.
Forward-looking statements necessarily involve known and unknown risks
and uncertainties, that may be general or specific and which give rise
to the possibility that expectations, forecasts, predictions,
projections or conclusions will not prove to be accurate, that
assumptions may not be correct and that objectives, strategic goals and
priorities will not be achieved. A variety of factors, many of which
are beyond the REIT's control, affect the operations, performance and
results of the REIT and its business, and could cause actual results to
differ materially from current expectations of estimated or anticipated
events or results. These factors include, but are not limited to, the
risks discussed in the REIT's materials filed with Canadian securities
regulatory authorities from time to time on www.sedar.com. The reader is cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements as there can be no assurance
that actual results will be consistent with such forward-looking
Information contained in forward-looking statements is based upon
certain material assumptions that were applied in drawing a conclusion,
including management's perceptions of historical trends, current
conditions and expected future developments, as well as other
considerations that are believed to be appropriate in the
circumstances, including the following: the Canadian economy will
remain stable over the next 12 months; inflation will remain relatively
low; interest rates will remain stable; conditions within the real
estate market, including competition for acquisitions, will be
consistent with the current climate; the Canadian capital markets will
continue to provide the REIT with access to equity and/or debt at
reasonable rates when required; Starlight will continue its involvement
as asset manager of the REIT in accordance with its current asset
management agreement; and the risks identified or referenced above,
collectively, will not have a material impact on the REIT. While
management considers these assumptions to be reasonable based on
currently available information, they may prove to be incorrect.
The forward-looking statements made in this press release are dated, and
relate only to events or information, as of the date of this press
release. Except as specifically required by law, the REIT undertakes no
obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise,
after the date on which the statements are made or to reflect the
occurrence of unanticipated events.
About the REIT
The REIT is an unincorporated, open-ended real estate investment trust
established under the laws of the Province of Ontario.
The REIT focuses on a long-term strategy to generate stable cash
distributions on a tax-efficient basis for unitholders. The REIT
intends to actively look for opportunities to expand its asset base and
increase its distributable cash flow through acquisitions of additional
multi-suite residential rental properties across Canada, the United
States and other jurisdictions where opportunities may arise.
Additional information concerning the REIT is available at www.sedar.com.
Neither the TSXV nor its Regulation Services Provider (as that term is
defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
SOURCE: True North Apartment Real Estate Investment Trust
For further information:
Chief Executive Officer
Chief Financial Officer