TORONTO, July 3, 2013 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT") announced today that it has entered into an agreement to acquire an office portfolio comprising 70,247 square feet primarily located at 490-494, 496 & 500 Hargrave Street, Winnipeg ("Hargrave Portfolio"). The purchase is expected to close in the third quarter of 2013, subject to customary closing conditions, and is expected to be immediately accretive.
Encompassing the majority of two blocks within the downtown Exchange District, the Hargrave Portfolio is comprised of one recently developed and two recently upgraded office buildings, and is a leading example of contemporary design in the City of Winnipeg. The portfolio is fully-occupied, with the majority of the premises (84%) leased to the Winnipeg Regional Health Authority ("WRHA") on a longer term basis, with the majority of the space leased until 2031. The WRHA is funded by the provincial government and is charged with the organization and provision of healthcare services for Winnipeg and surrounding municipalities, operating and funding over 200 healthcare facilities and programs with an annual budget of over $2 billion. Primary use at the Hargrave Portfolio relates to the WRHA's home-care nursing program, while secondary uses relate to community health services, including a travel and tropical medicine clinic. Additional tenancies include a provincially funded post-secondary institution and a non-profit educational NGO.
The purchase price is $21.0 million, subject to adjustments. The REIT will assume and up-finance the vendor's existing first mortgage for a principal amount of approximately $15.8 million, a blended interest rate of approximately 4.76% and a 2023 maturity. The equity portion of the REIT's investment will be funded from existing resources.
The investment will be the REIT's second asset in the Province of Manitoba. The REIT believes that the acquisition of the Hargrave Portfolio will further enhance its presence in the large and growing healthcare market of Winnipeg while further solidifying its market leadership in healthcare real estate in Canada.
In a separate transaction, the REIT has completed the previously announced acquisition of 741, 755 and 765 Portage Avenue ("Portage Portfolio"), a 43,750 square foot three building office portfolio in Winnipeg. The purchase is expected to be immediately accretive.
Located just west of "Portage and Main" at the periphery of the downtown core, the Portage Portfolio is comprised of three buildings, with the feature of the portfolio being a recently developed, purpose-built government healthcare building located at 755 Portage Avenue. The Portage Portfolio is fully-leased to three tenants, of which the Winnipeg Regional Health Authority is the most significant, occupying 80% of the rentable area under a long-term lease (2029). The WRHA provides community related healthcare services at this location, focusing on childhood development, mental health, public health and child and family services.
The purchase price was $13.2 million, subject to adjustments. NorthWest assumed the vendor's existing first mortgage, as well as securing a new vendor take-back second mortgage, for an aggregate principal amount of approximately $9.6 million, a weighted average interest rate of 4.56% and an average term to maturity of 14 years. The equity portion of the REIT's investment was funded from existing resources.
About NorthWest Healthcare Properties Real Estate Investment Trust
NorthWest Healthcare Properties Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT holds a portfolio of 77 income-producing properties, with a focus on medical office buildings and healthcare real estate, comprising approximately 4.6 million square feet of gross leasable area located in British Columbia, Alberta, Manitoba, Ontario, Québec, Nova Scotia and New Brunswick.
This press release contains forward-looking statements which reflect the REIT's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual results could differ materially from those projected herein. The REIT disclaims any obligation to update these forward-looking statements.
SOURCE: NorthWest Healthcare Properties Real Estate Investment Trust
For further information:
Ernie Spraggs, Chief Financial Officer, NorthWest Healthcare Properties Real Estate Investment Trust, (416) 601-3221, or www.nwhp.ca.