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Killam Apartment REIT TSX: KMP-UN-T

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Killam Apartment REIT Announces Agreement To Acquire a $190.5 Million Portfolio in Ontario and a $95 Million Bought Deal Public Offering of Trust Units

CNW Group - CND - Tue May 25, 3:50PM CDT

/NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

Killam Apartment REIT ("Killam" or the "REIT") (TSX:KMP-UN.TO) is pleased to announce that it has agreed to acquire a four-property, 11-building portfolio totaling 785 units in Kitchener and Waterloo, ON (the "KW Portfolio") for approximately $190.5 million (approximately $243,000 per door). Upon completion of the KW Portfolio acquisition, the REIT's Ontario portfolio will significantly increase to 3,342 units, with an additional 485 units under development.

The REIT also announced today that it has reached an agreement with a syndicate of underwriters led by RBC Capital Markets to issue to the public, on a bought deal basis, 5,135,200 trust units (the "Units") for $18.50 per Unit for gross proceeds of $95,001,200 (the "Offering").

Killam has granted the Underwriters an over-allotment option for the purposes of covering the Underwriters' over-allocation position for an additional 770,280 Units, exercisable up to 30 days after closing of the Offering.

Killam intends to use the net proceeds from the Offering to finance a portion of the purchase price for the KW Portfolio, to repay amounts outstanding on its credit facility (current outstanding balance of approximately $51 million), and the remainder, if any, to fund future acquisitions and developments and for general trust purposes.

The KW Portfolio is currently 98% occupied and comprises a mix of bachelor (9 units), 1-bedroom (130 units), 2-bedroom (631 units) and 3-bedroom (15 units) units with an average unit size of approximately 853 square feet. The average in-place rent is approximately $1,200 ($1.41 per square foot). Killam expects to close the acquisition of the KW Portfolio on June 30, 2021 and to finance the purchase with a combination of first mortgage financing based on approximately 60-65% loan-to-value, and the balance using net proceeds from the Offering.

Upon completion of the Offering and the use of proceeds, Killam expects to have access to approximately $110 million of available capital through its credit facilities.

"We are pleased to expand our portfolio in the Kitchener and Waterloo market," noted Philip Fraser, President and CEO. "This investment will be a valuable addition to our portfolio based on its attractive locations, alignment with our existing asset base and an opportunity for net operating income growth through unit repositionings and energy saving investments. Including the KW Portfolio, Killam will have completed $256 million of acquisitions year-to-date, with 94% of these outside of Atlantic Canada."

The Units issued under the Offering will be offered pursuant to the REIT's final short form base shelf prospectus dated December 2, 2019. The terms of the Offering will be described in a prospectus supplement to be filed with securities regulators in each of the provinces of Canada and may also be offered by way of private placement in the United States. Closing of the Offering is expected to take place on or about May 31, 2021, and is subject to customary closing conditions, including the approval of the Toronto Stock Exchange.

This press release is not an offering of securities for sale in the United States. The Units being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and state securities laws. Accordingly, the Units may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the U.S. Securities Act.

About Killam Apartment REIT

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning, operating and developing a $3.9 billion portfolio of apartments and manufactured home communities. Killam's strategy to enhance value and profitability focuses on three priorities: 1) increasing earnings from existing operations, 2) expanding the portfolio and diversifying geographically through accretive acquisitions, with an emphasis on newer properties, and 3) developing high-quality properties in its core markets.

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may constitute forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend" or the negative of these terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Such forward-looking statements may include, among other things, statements relating to the size, anticipated closing date and terms of the Offering, the anticipated use of the net proceeds of the Offering, the filing and contents of a prospectus supplement, the proposed acquisition of the KW Portfolio (including the terms and details thereof, sources of funding and anticipating closing), the effect of such proposed acquisition on the REIT's Ontario portfolio, the REIT's anticipated access to capital and liquidity, and the REIT's anticipated year-to-date acquisitions. These forward-looking statements are based on our expectations, estimates, forecast and projections, which we believe are reasonable as of the current date. Such forward-looking statements involve risks, uncertainties and other factors, which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including the effects of the evolving COVID-19 pandemic on the performance of the REIT; the effectiveness of measures intended to mitigate the impact of COVID-19 and any variants thereof; competition; national and regional economic conditions and the availability of capital to fund further investments in Killam's business. For more detailed information on these and other risks and uncertainties, you should refer to our most recently filed annual information form and management's discussion & analysis, each of which is available at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. Other than as required by law, Killam does not undertake to update any of such forward-looking statements.

SOURCE Killam Apartment REIT

View original content: http://www.newswire.ca/en/releases/archive/May2021/25/c7754.html

SOURCE: Killam Apartment REIT

Philip Fraser, President & CEO, pfraser@killamreit.com, (902) 453-4536 or Nancy
Alexander, CPA, CA, Vice President, Investor Relations & Sustainability,
nalexander@killamreit.com, (902) 442-0374
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COMTEX_387272474/2452/2021-05-25T16:50:00

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