HALIFAX, April 9, 2014 /CNW/ - Killam Properties Inc. ("Killam") is pleased to announce three acquisitions totaling $35.0 million, located in Ottawa, Moncton and Halifax.
On March 14, 2014, Killam acquired two adjacent properties in Ottawa, 50 Selkirk Street, a 75-unit building, and 350 Mayfield Avenue, a 61-unit building. The average rent of the combined 136 units is $723 per month, with rental increase opportunities expected following capital upgrades. The combined purchase price was $12.5 million ($92,000 per unit) and was satisfied with cash. A CMHC insured mortgage for $7.8 million is expected to be placed on the properties during the second quarter.
On February 21, 2014, Killam acquired 65 Bonaccord Street, a 35-unit building located in downtown Moncton. The steel and concrete building was constructed in 2004 and includes many amenities, including a common room, fitness centre, underground parking and high-end finishes. The average rent is $930 per unit. The purchase price of $3.9 million ($112,000 per unit) is well below replacement cost. A new ten-year CMHC insured mortgage of $2.3 million at 3.48% has been arranged and will fund by the end of the month.
Killam has also agreed to acquire an 83-unit luxury apartment building located at 300 Royale Boulevard in Halifax for $18.6 million ($224,000 per unit). The four-storey concrete building is located adjacent two Killam buildings, 100 and 200 Royale, acquired in 2011 and 2013, respectively. The three buildings together create a community of 247 new, condo-quality apartment units with a shared courtyard. Completed in November 2013, 300 Royal is in its initial lease-up and the acquisition includes a rental guarantee of 95% occupancy through to April 2015. The building includes underground parking, a social room and a fitness centre. The average rent of $1,550 per unit reflects the building's spacious units, which include six appliances and high-end finishes. The closing is scheduled for April 15, 2014, and the purchase price is expected to be satisfied with a new ten-year CMHC insured mortgage of $13.0 million at 3.5% and the balance in cash.
"We are pleased to add these properties to our portfolio", noted Philip Fraser, Killam's President & CEO. "The three acquisitions will have a weighted average cap rate of 5.2%. The two properties in Atlantic Canada are condo quality and complement our existing portfolios in Moncton and Halifax. The buildings in Ottawa will contribute to our growth in that market and increase our unit count to 628 units."
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 report may constitute forward-looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecast and projections, which we believe are reasonable as of the current date. 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.
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