TORONTO, Nov. 11, 2014 /CNW/ - Firm Capital Property Trust ("FCPT" or the "Trust"), (TSXV: FCD.UN) is pleased to announce it has entered into a binding agreement to acquire a 50% interest in a 135 unit multi-residential complex (the "Property") located in Ottawa, Ontario with the balance being acquired by others that may include related parties of the Trust. The purchase price for the Property is approximately $11.2 million (excluding closing costs), of which the Trust will pay approximately $5.6 million (excluding closing costs) for its 50% participation. The acquisition is expected to close during Q4/2014.
The Property is comprised of 135 units situated in two multi-residential buildings located in the Carlington sector of Ottawa. The Property has an attractive suite mix consisting of spacious one and two bedroom multi-residential units and is currently 95.6% occupied. The Property is being acquired for approximately $83,000 per unit, which is well below replacement cost. The capitalization rate for the Property is approximately 6.0%. The acquisition of the Property represents the first multi-residential acquisition for the Trust and while it is expected to be initially neutral to AFFO, it diversifies the Trust's cash flow into stable multi-residential income. Upon closing, the Trust will generate cash flow from all of its targeted asset classes.
The funding required to acquire the Property will be sourced from a combination of cash, the assumption of an existing first mortgage from a Canadian Chartered Bank and the arrangement of a new second mortgage financing from a Canadian Chartered Bank.
ABOUT FIRM CAPITAL PROPERTY TRUST
Firm Capital Property Trust is focused on creating long-term value for Unitholders, through capital preservation and disciplined investing to achieve stable distributable income. In partnership with management and industry leaders, The Trust's plan is to co-own a diversified property portfolio of multi-residential, flex industrial, net lease convenience retail, and core service provider professional space. In addition to stand alone accretive acquisitions, the Trust will make joint acquisitions with strong financial partners and acquisitions of partial interests from existing ownership groups, in a manner that provides liquidity to those selling owners and professional management for those remaining as partners. Firm Capital Realty Partners Inc., through a structure focused on an alignment of interests with the Trust, will source, syndicate and participate in investments.
FORWARD LOOKING INFORMATION
This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the Trust regarding, among other things, the use of the net proceeds from the Offering, the closing of the Offering, and the closing of the Acquisition. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the Trust believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the Trust nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Firm Capital Property Trust have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an application for exemption from the registration requirements of U.S. securities laws.
SOURCE: Firm Capital Property Trust
Renseignements: Robert McKee, President & Chief Executive Officer, (416) 635-0221; Sandy Poklar, Chief Financial Officer, (416) 635-0221