TORONTO, Dec. 3 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT") announced today it has entered into an agreement to acquire The Dundas-Edward Centre, a 410,000 square foot two-tower office complex and eight-level parking facility located in downtown Toronto, Ontario for approximately $103 million (including mortgage prepayment costs and excluding closing costs). The purchase is expected to close in the first quarter of 2011 subject to customary closing conditions, and is expected to be immediately accretive.
Located in the Discovery District of downtown Toronto, one block from University Avenue, the complex is in close proximity to several hospitals including SickKids, Princess Margaret, Toronto General, and Mount Sinai. The complex is currently 97% leased to primarily medical, professional and government tenancies including the following healthcare tenants: SickKids, Medisys Diagnostic Imaging, a pharmacy, labs, clinics and numerous specialist physicians and general practitioners. The balance of the tenancy is comprised of tenants who value the close proximity to the Provincial Legislature (Queen's Park), the Provincial Courts, Toronto City Hall and the City's financial core.
The purchase price represents approximately a 7% capitalization rate applied to in-place annual net operating income or $251 per square foot of rentable area ($228 per square foot if the parking NOI is not included). The REIT will have the option to assume the existing first mortgage of approximately $25 million at a 5.125% interest rate which matures September 1, 2014, and receive credit for the mortgage pre-payment costs which the vendor would otherwise incur. The equity portion of the REIT's investment will be funded from existing resources.
This investment will be the REIT's twelfth asset in the Greater Toronto Area and its twenty-first asset in the Province of Ontario. The REIT believes that the acquisition of The Dundas-Edward Centre will further solidify its market leadership in healthcare real estate and its position as "Canada's Healthcare Landlord".
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 49 income-producing properties, with a focus on medical office buildings and healthcare real estate, comprising approximately 3.0 million square feet of gross leasable area located in British Columbia, Alberta, Ontario, Québec, Nova Scotia and New Brunswick.
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", or "continue" or the negative thereof or similar variations. The REIT's actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are not completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors (including changes in interest rates), competition, changes in government regulations, the performance of the acquired property, and the factors described under "Risk Factors" in the Short Form Prospectus dated October 22, 2010, including the risks and uncertainties set out in the Management Discussion and Analysis dated November 11, 2010 for the quarter ending September 30, 2010 included by reference therein, which are available on www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements. Certain statements included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release.
"Capitalization rate", "AFFO" and "Net operating income" (or NOI) are not measures recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by GAAP. Capitalization rate and NOI are presented in this press release because management of the REIT believes that these non-GAAP measures are relevant in interpreting the purchase price of the property being acquired. Capitalization rate, and NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to capitalization rate and NOI reported by such organizations. For additional information regarding each of the foregoing non-GAAP measures, including the definitions thereof, refer to the REIT's management's discussion and analysis for the three months ended September 30, 2010, a copy of which is filed on www.sedar.com.
For further information: For further information: Mike Brady, Senior Vice President, NorthWest Healthcare Properties Real Estate Investment Trust, (416) 366-2000 ext. 243, or www.nwhp.ca