Minto Apartment REIT Enters Greater Vancouver Market

OTTAWA, ON, Dec. 1, 2020 /CNW/ - Minto Apartment Real Estate Investment Trust ("the REIT") (TSX: MI.UN) today announced an agreement to provide $11.9 million in financing (the "Financing") to a 50-50 joint venture between Minto Properties Inc. ("MPI") and a subsidiary of Darwin Properties Ltd. to develop Phase I of Lonsdale Square (the "Building"), a large master-planned community on a pre-paid 99-year land lease with the City of North Vancouver.   

The Financing will bear interest at 7%, which will accrue and be payable in full on the maturity of the loan. On stabilization of the property, which is expected in the spring of 2023, the REIT will have the exclusive option to purchase the Building at a 5% discount to its then-appraised fair market value.  

The Building will comprise 113 rental suites over six stories, ranging in size from 495 square foot junior one-bedroom suites to 1,054 square foot three-bedroom suites, plus approximately 7,800 square feet of retail at-grade. The Building will front on East 21st Street and a new public park connected to the Green Necklace, an urban greenway that forms a 7.5-kilometre scenic loop around North Vancouver's city centre. With a walk score of 79, the Building will provide easy access to some of the city's most highly sought-after amenities and lifestyle activities including parks, hiking, skiing, boating and sightseeing. Moreover, the REIT anticipates that the location will continue to improve as the community is developed with additional amenities in subsequent phases planned for the Lonsdale Square project, including a new 2.4-acre park, diverse retail, daycare and, directly north of the site, the new $200 million Harry Jerome Community Recreation Centre. Pursuant to the REIT's strategic alliance agreement with MPI, the REIT will have the opportunity to participate in future multi-residential phases of the Lonsdale Square project, currently estimated to be an additional 700 suites.

"The Lonsdale Square development opportunity represents a great way for the REIT to partner with a highly reputable local developer and enter the Greater Vancouver market, meeting our strategic mandate to be in all six of Canada's major real estate markets," said Michael Waters, Chief Executive Officer of the REIT. "By participating as a lender to the development, the REIT generates accretive earnings during the construction period without any exposure to construction risk. The option to purchase the property at a 5% discount to fair value upon stabilization provides the REIT with the opportunity to enter the market with a newly developed property that would be immediately accretive to the REIT's net asset value. The deal structure is similar to our investment in the Fifth Avenue and Bank Street redevelopment project in Ottawa and underlines the continuing benefit of the REIT's relationship with the Minto Group."

The REIT intends to fund the Financing through draws on its revolving credit facility. The Financing is secured by a mortgage on the property and is guaranteed by the joint venture partners. The Financing is senior to joint venture equity and will be subordinate to senior construction financing.

MPI is a related party to the REIT. Accordingly, the terms of the Financing were reviewed, considered and approved by a committee of independent trustees of the REIT.

About Minto Apartment Real Estate Investment Trust

Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montréal, Ottawa, Calgary and Edmonton. For more information on Minto Apartment REIT, please visit the REIT's website at: https://www.mintoapartments.com/.

About Darwin Properties Ltd.

Darwin Properties Ltd. ("Darwin") is a real estate development company headquartered in North Vancouver, British Columbia. Darwin is part of the Darwin Group of Companies, which also includes Darwin Construction Ltd., an experienced construction company. Darwin has over 30 years of experience in real estate development and construction, developing residential, commercial, mixed-use and institutional projects throughout British Columbia. Darwin currently has more than 65 acres of land located on Vancouver's North Shore in various stages of development. For more information on Darwin, please visit its website at: https://www.darwin.ca/.

Forward-Looking Information

This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the completion of the transactions contemplated in this news release in the manner anticipated, and the factors discussed under "Risk Factors" in the REIT's third quarter 2020 Management's Discussion and Analysis dated November 10, 2020, which is available on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

Non-IFRS Financial Measures

This news release contains a financial measure which is not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. The REIT believes that net asset value is an important measure of the value of the REIT's assets net of its liabilities. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS, and therefore should not be construed as an alternative to equity calculated in accordance with IFRS. See the REIT's Q4 2019 MD&A for further discussion of this non-IFRS financial measure.

SOURCE Minto Apartment Real Estate Investment Trust

Julie Morin, Chief Financial Officer, Minto Apartment Real Estate Investment Trust, Tel: [phone]