Alexis Nihon Real Estate Investment Trust
TSX : AN.UN

Alexis Nihon Real Estate Investment Trust

September 01, 2005 06:00 ET

Alexis Nihon REIT Announces $24.5 Million Acquisition of Office Property in Ottawa

MONTREAL, QUEBEC--(CCNMatthews - Sept. 1, 2005) -

REIT makes third acquisition in National Capital Region

Alexis Nihon REIT (TSX:AN.UN) today announced the acquisition of an office property in downtown Ottawa. The acquisition price of $24.5 million represents a going-in capitalization rate of approximately 9.7%.

"Since we acquired our initial two office properties in Gatineau in 2004, we have been actively seeking to expand our presence in the National Capital Region," said Paul J. Massicotte, President and CEO. "This acquisition achieves that objective, while diversifying outside of Quebec for the first time and establishing a presence for further expansion."

"The purchase price is accretive to unitholders at the time of acquisition, and we expect the property's cash flow contribution to rise as leases are renewed in the future," said Rene Fortin, Senior Vice-President and Chief Financial Officer. "This is a quality property with stable, long-term tenants and represents excellent value to the REIT."

The leasable area of the property totals 174,000 square feet, representing an acquisition price of $141 per square foot. The ground floor consists of office and retail space comprising 15% of leasable area. Upper floors account for 85% of the total and house Class B office space. Three floors and an exterior parking lot provide 326 spaces for tenants' vehicles.

The property, which is 96% occupied, was built in 1974 and renovated in 1998 to accommodate government tenancies. Federal departments and agencies account for 72% of space, provincial health care facilities occupy 16%, and Ottawa Police Service and retail shops account for the remainder. The weighted average term of leases in place is 4.7 years.

The property is in the Centretown district of downtown Ottawa. Its location at the corner of Cooper Street and Bank Street is approximately midway between the Parliament Buildings to the north and the Queensway highway to the south.

The addition increases the office segment of the portfolio by 6.1% to 2,986,741 square feet. Following the acquisition, asset allocation within the REIT's portfolio consists of the following:



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Asset class No. of properties Square footage Per cent of total
(millions)
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Industrial 31 3.71 44.0%
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Office 20 2.99 35.4%
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Retail 4 1.47 17.0%
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Residential(a) 0 0.30 3.6%
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(a)Residential apartments are located in Place Alexis Nihon, classed
as an office property.


The purchase price, less $18.8 million in an assumed mortgages, will be funded by the REIT's credit facilities. The blended interest rate on the mortgages is approximately 5.50%.

About Alexis Nihon REIT

The REIT currently owns interests in 55 office, retail, and industrial properties, including a 426-unit multi-family residential property, all located in the greater Montreal area and the National Capital region. The REIT's portfolio has an aggregate of 8.4 million square feet of leasable area, of which 0.4 million square feet is co-owned.

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