HALIFAX, April 1, 2015 /CNW/ - Killam Properties Inc. ("Killam") (TSX: KMP) is pleased to announce the acquisition of the Brewery Market and Keith Hall in Halifax and land for future apartment developments.
Killam acquired the Brewery Market and Keith Hall, located in downtown Halifax, across from the waterfront, for $22.3 million, representing a capitalization rate of 7.0%. The fully modernized heritage complex can trace its roots back to the early 1800s and contains 158,000 square feet of office and retail space. The property is 95% occupied.
Killam has also acquired a 50% interest in 47,650 square feet of vacant land located adjacent to the Brewery Market for $5.2 million. The site is approved, through a development agreement, for construction of a 240 unit multi-residential property which will be known as The Alexander. The land also includes capacity for an additional 40 units. Killam and its 50% partner expect to begin construction during the second half of 2015.
The total purchase price of $27.5 million was based on the average of two independent appraisals. The purchase price was satisfied with the assumption of $8.7 million of existing mortgages with a weighted average interest rate of 5.2%, $5.1 million in a vendor take-back loan at 3.0%, the issuance of $12.0 million of common shares of Killam (1,092,548 common shares at $10.9835, based on the 5-day volume weighted average price at March 25, 2015), and the balance in cash. The vendor of the properties was Halkirk Properties Limited, a company partially owned by James Lawley, a director of Killam.
"We are pleased to have completed this acquisition," noted Philip Fraser, Killam's President and CEO. "This unique, historic property and development site is one of the best mixed-use locations in Atlantic Canada. We now own a landmark office and retail complex at a very attractive yield, and have partnered with the previous owner to build a new apartment building on a 50/50 basis. Once the apartment building is completed, our tenants will enjoy the benefit of a mixed-use property with dining, entertainment, and office space all contained in one complex with incredible ocean views."
Killam Properties Inc., based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning, operating and developing multi-family apartments and manufactured home communities.
Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more exhaustive information on these risks and uncertainties, you should refer to our most recently filed annual information form which is available at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. Other than as required by law, Killam does not undertake to update any of such forward-looking statements.
SOURCE Killam Properties Inc.
Image with caption: "Killam Properties Inc. acquired Halifax's Brewery Market and Keith Hall, and adjacent land for development, on March 31, 2015. (CNW Group/Killam Properties Inc.)". Image available at: http://photos.newswire.ca/images/download/20150401_C8165_PHOTO_EN_13880.jpg
For further information: Philip Fraser, President & CEO, [email protected], 902-453-4536; Dale Noseworthy, CA, CFA, Vice President, Investor Relations and Corporate Planning, [email protected], Phone: (902) 442-0388