Press release from Marketwire
InterRent Announces $38.6 Million Acquisition in Ottawa, Ontario
Thursday, May 02, 2013
InterRent Announces $38.6 Million Acquisition in Ottawa, Ontario08:37 EDT Thursday, May 02, 2013
OTTAWA, ONTARIO--(Marketwired - May 2, 2013) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
InterRent Real Estate Investment Trust (TSX:IIP.UN) ("InterRent") announced today that it has entered into an unconditional agreement to acquire a concrete high-rise building situated in downtown Ottawa, Ontario.
Totaling 444 suites and approximately 10,000 square feet of commercial space, the building is located at 201 to 219 Bell Street which is bordered by the Glebe/Centretown to the East, Little Italy to the West, Chinatown to the North and the Queensway to the South. The building consists of 378 1-bedroom, 57 2-bedroom and 9 large penthouse suites.
The property is located in an up and coming residential neighbourhood with a desirable geographic location offering close proximity to many parks, convenient access to public transportation, schools, the University of Ottawa and Carlton University as well as many other amenities. Residents have easy access to major road arteries, Hwy 417, bus routes and the new light rail system currently under development. Downtown office and government buildings, shopping/dining/nightlife on Bank St, Preston St and Elgin St are all within a short walk.
A major construction and repositioning program has been underway at the property and has seen the installation of new boilers, elevators, electrical supply, a new roof system, five newly constructed penthouses as well as a suite renovation program. InterRent will continue with further construction and repositioning efforts which is expected to take approximately 12-18 months to complete. Efforts shall include several energy saving measures, a new curtain wall system, the addition of many resident amenities, and common area upgrades. Additionally, major unit renovations will be completed in large scale during the first year. As part of the acquisition, InterRent has also received the option to acquire a nearby vacant lot which could be used for future development.
The purchase is expected to be completed by the middle of May at a purchase price of $38,625,000. The acquisition has a going in capitalization rate of 5.5% and a short-term mortgage of approximately $19.5 million at a rate of 1.93% will be assumed as part of the transaction.
"This property is one of the largest multifamily assets in downtown Ottawa, and being that it is located in the same city as our head office we believe it will allow us to drive this major construction/repositioning project to become a showcase property in the city once completed. The property is bordered by neighbourhoods that have undergone significant development and upgrading in recent years and we believe that we are on the ground floor of the redevelopment of this particular neighbourhood. This is our most ambitious repositioning to date however, our proven team with their many years of experience managing these types of projects are looking forward to transforming this building and the area as a whole," said Mike McGahan, CEO.
InterRent REIT is a growth-oriented real estate investment trust engaged in increasing Unitholder value and creating a growing and sustainable distribution through the acquisition and ownership of multi-residential properties.
InterRent's strategy is to expand its portfolio primarily within markets that have exhibited stable market vacancies, sufficient suites available to attain the critical mass necessary to implement an efficient portfolio management structure and, offer opportunities for accretive acquisitions.
InterRent's primary objective is to use the proven industry experience of the Trustees, Management and Operational Team to: (i) provide Unitholders with stable and growing cash distributions from investments in a diversified portfolio of multi-residential properties; (ii) enhance the value of the assets and maximize long-term Unit value through the active management of such assets; and (iii) expand the asset base and increase Distributable Income through accretive acquisitions.
This news release contains "forward-looking statements" within the meaning applicable to Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements contained in this release. A full description of these risk factors can be found in InterRent's most recently publicly filed information located at www.sedar.com. InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward looking statements contained in this release to reflect actual events or new circumstances.
FOR FURTHER INFORMATION PLEASE CONTACT:
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.Contact Information:
InterRent Real Estate Investment Trust
Chief Executive Officer
(613) 569-5699 Ext 244
(613) 569-5698 (FAX)
InterRent Real Estate Investment Trust
Curt Millar, CA
Chief Financial Officer
(613) 569-5699 Ext 233
(613) 569-5698 (FAX)