Canadian Apartment Properties Real Estate Investment Trust
TSX : CAR.UN

Canadian Apartment Properties Real Estate Investment Trust

January 22, 2008 09:37 ET

CAP REIT Generates Net Cash Proceeds of $63.4 Million and Strengthens Financial Position With Sale of Non-Core Properties

TORONTO, ONTARIO--(Marketwire - Jan. 22, 2008) - Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT") (TSX:CAR.UN) announced today that it had completed the previously announced sale of ten non-core properties to TransGlobe Property Management Services Ltd. ("TransGlobe") containing 1,478 suites located in Niagara, the Greater Toronto Area and Montreal. The disposition was related to the acquisition of eight apartment properties from TransGlobe announced on October 1, 2007 containing 748 suites located in British Columbia and Alberta. The total sales price was approximately $121.2 million for 558 suites in Ontario (221 Glenridge Avenue and 351, 363 Geneva Street in St. Catharines, 100 Lancaster Drive in Welland and 274, 276, 278 Cedar Avenue in Richmond Hill) and 920 suites in Quebec (Jardins Sur Le Parc and Complex Sur Le Parc in Longueuil and Bois Franc, Cote Vertu and 55 Laframboise in Saint-Laurent).

In addition, CAP REIT has sold two Quebec City apartment properties (111, 115 Boul. Johnny Parent, 136, 140 Rue Legare and Trudeau complexes) to a separate purchaser containing a total of 152 suites for approximately $6.4 million.

The two sale transactions resulted in a total gain of approximately $17.0 million. Net cash proceeds, after estimated closing costs and the purchasers' assumption and repayment of approximately $59.8 million in mortgages, will amount to approximately $63.4 million. The net proceeds will be used to reduce CAP REIT's Acquisition and Operating Facilities, fund its Normal Course Issuer Bid, and for other general REIT purposes.

"One of our stated strategies is to continually monitor our portfolio to identify non-core properties, and to redeploy the capital from their disposition to acquire strategic assets better suited to our targeted portfolio composition and property management objectives. We had maximized the value we could achieve with these non-core properties, and determined we could generate significant cash from their sale to help finance our related purchases in the strong Western Canadian markets and other markets across Canada," commented Thomas Schwartz, President and Chief Executive Officer. "In addition, the significant gains we generated on these sales clearly demonstrate the success we are achieving in enhancing the value of our property portfolio through our active property management and capital investment programs."

Mr. Schwartz continued: "Combining the net proceeds of $95.2 million from our recent equity offering with the almost $63.4 million from these dispositions, we have significantly strengthened our balance sheet and liquidity position. By using the net proceeds to reduce our credit facilities, our pro-forma ratio of total debt to gross book value will be approximately 60.0%. Going forward, we will also use the proceeds to aggressively execute on our Normal Course Issuer Bid to enhance Unitholder value."

"With these transactions we have also significantly enhanced the geographic diversification of our property portfolio. We have creatively strengthened our presence in key Western Canadian markets and reduced our exposure in the affordable Quebec segment of our business as well as in the Niagara market where we did not have the critical mass to generate efficient operations."

"Looking ahead, we remain very confident about our future prospects. Fundamentals in the rental residential business remain strong as demand for well maintained and well managed apartment and townhouse properties continues to increase in all of our key markets. In addition, our ongoing ability to access CMHC-guaranteed financing largely insulates us from the debt issues that are impacting other industries and allows us to continue executing our mortgage re-financing and other programs that will further enhance our financial position and growth prospects. All of these factors will result in much improved value for our Unitholders over the long term," Mr. Schwartz concluded.



With the completion of these dispositions, the composition of CAP REIT's
property portfolio is as follows:

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PORTFOLIO BY GEOGRAPHY Suites %
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Ontario
Greater Toronto Area 13,394 48.5
Ottawa 1,527 5.5
London/Kitchener/Waterloo 1,482 5.4
Other Ontario 1,470 5.3
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Ontario Residential Suites 17,873 64.7
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Land Lease Sites 1,233 4.5
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Ontario Residential Suites and Sites 19,106 69.2
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Quebec
Montreal 2,545 9.2
Quebec City 1,756 6.4
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Total Quebec 4,301 15.6
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Nova Scotia
Halifax 1,083 3.9
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Total Nova Scotia 1,083 3.9
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Alberta
Edmonton 310 1.1
Calgary 1,070 3.9
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Total Alberta 1,380 5.0
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Saskatchewan
Saskatoon 133 0.5
Regina 108 0.4
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Total Saskatchewan 241 0.9
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British Columbia
Greater Vancouver Region 1,117 4.1
Victoria 371 1.3
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Total British Columbia 1,488 5.4
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Total Residential Suites 26,366 95.5
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Total Suites and Sites 27,599 100.0
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PORTFOLIO BY PROPERTY TYPE Suites %
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Affordable 3,638 13.2
Mid-Tier 13,783 49.9
Luxury 8,945 32.4
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Total Residential Suites 26,366 95.5
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Land Lease Sites 1,233 4.5
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Total Suites/Sites 27,599 100.0
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As one of Canada's largest residential landlords, CAP REIT (TSX:CAR.UN) is a growth-oriented investment trust owning interests in 26,366 residential suites and two land lease communities comprising 1,233 land lease sites located in or near major urban centres from coast to coast. Since its Initial Public Offering in May 1997, CAP REIT has grown monthly distributions per Unit by 51%. For more information about CAP REIT, its business and its investment highlights, please refer to our web site at www.capreit.net.

Contact Information

  • CAP REIT
    Mr. Michael Stein
    Chairman
    (416) 861-5788
    or
    CAP REIT
    Mr. Thomas Schwartz
    President & CEO
    (416) 861-9404
    or
    CAP REIT
    Mr. Yazdi Bharucha
    CFO & Secretary
    (416) 861-5771
    Website: www.capreit.net