MISSISSAUGA, ON, June 28, 2013 /CNW/ - Morguard North American Residential Real Estate Investment Trust (TSX: MRG.UN) (the "REIT") is pleased to announce that it has completed the purchase of six multi-unit residential properties from a subsidiary of Morguard Corporation for US$89.0 million (excluding closing costs).
The six properties acquired are residential apartment and townhome communities comprised of 1,690 suites located in Mobile, Alabama and Pensacola, Florida. The properties are low-rise, garden-style apartment communities with modern leasing centers and attractive amenity packages.
The purchase price has been satisfied by the assumption of certain Fannie Mae insured mortgages with an aggregate carrying amount of US$64.4 million (the "Assumed Fannie Mae Mortgages") and a reduction of the balance owing by Morguard Corporation to the REIT under an existing, revolving loan agreement. The Assumed Fannie Mae mortgages have a weighted average interest rate of 5.6% and a weighted average term to maturity of 3.5 years. In connection with the acquisition of the properties, Morguard Corporation has agreed to provide installment payments during the remaining terms of the Assumed Fannie Mae Mortgages to the REIT in order for the REIT to achieve an effective annual interest rate of 4.6% on the assumed Fannie Mae Mortgages. The transaction has an adjustment date of May 1, 2013.
After closing this acquisition the REIT will own interests in a total of 12,850 suites in Canada and the U.S valued at approximately $1.5 billion.
About Morguard North American Residential Real Estate Investment Trust
Morguard North American Residential REIT is an unincorporated, open-ended real estate investment trust which owns, through a limited partnership, interests in a portfolio of 14 Canadian residential apartment communities, located in Alberta and Ontario, and 30 U.S. low-rise and mid-rise, garden-style apartment communities located in Alabama, Colorado, Florida, Georgia, Louisiana, North Carolina and Texas consisting of 12,850 residential suites.
SOURCE: Morguard North American Residential Real Estate Investment Trust
For further information:
K. (Rai) Sahi
Chief Executive Officer
Chief Financial Officer