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

Canadian Apartment Properties Real Estate Investment Trust

July 18, 2005 15:44 ET

Canadian Apartment Properties Real Estate Investment Trust Announces Acquisition Of 1,431 Suite Apartment Portfolio And Financing Of $60.065 MM

TORONTO, ONTARIO--(CCNMatthews - July 18, 2005) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT")(TSX:CAR.UN) of Toronto, Ontario today announced that it has agreed to sell, subject to regulatory approval, 4,100,000 Units for $14.65 per Unit for aggregate gross proceeds of $60,065,000 to a syndicate of underwriters led by RBC Capital Markets on a bought-deal basis.

CAP REIT will, within the next few days, file with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, a preliminary short form prospectus relating to the issuance of the Units. Closing of the offering is expected to take place on or about August 4, 2005.

CAP REIT intends to use the net proceeds of this offering to repay a portion of the amounts owing under CAP REIT's acquisition and operating facility, of which approximately $28 million will be used to acquire the L.S.R. Apartment Portfolio, and the balance to fund CAP REIT's capital improvement program, future acquisitions and for general business purposes.

The LSR Apartment Portfolio includes 1,431 residential suites in the mid-tier category and 18 commercial units in 34 buildings in the Greater Montreal Area. The Portfolio includes 7 high-rise buildings, 27 low-rise multi-residential complexes and approximately 27,800 square feet of commercial space in Longueuil (693 units in 26 buildings), Ville Saint-Laurent - Ahuntsic (646 units in 4 buildings) and Downtown Montreal (110 units in 4 buildings). The LSR Apartment Portfolio is being purchased for approximately $80 million (including acquisition costs and land transfer tax of approximately $1.6 million) with $52.2 million of 5 to 7 year mortgages that will be placed on the properties at closing. The LSR closing is expected to occur on or about September 1, 2005. CAP REIT has completed its due diligence and only minor matters remain to be completed by July 20, 2005. The acquisition of the LSR portfolio is not conditional upon the completion of this offering and the offering is not conditional upon the acquisition by CAP REIT of the LSR Apartment Portfolio.

Mr. Thomas Schwartz, Chief Executive Officer of CAP REIT, stated that: "we are very pleased with our proposed acquisition of the LSR Apartment Portfolio. Not only is it accretive, but it serves to further broaden CAP REIT's geographic diversification and increases our presence in Quebec from 2,782 suites to 4,213 suites. The LSR Apartment Portfolio has remained over 99% occupied over the past five years and has average rents-in-place that we believe are below market".

CAP REIT intends to make monthly cash distributions to Unitholders of record on each record date, on or about the 15th day of the month following the record date. CAP REIT's current monthly cash distribution since November 2003 has been $0.09 per Unit. The first cash distribution to which purchasers of the Units under this offering will be entitled to participate will be for the month of August expected to have a record date of August 31, 2005 and a payment date of September 15, 2005.

The Units being offered have not been and will not be registered under the United States Securities Act of 1933 and state securities laws. Accordingly, the Units may not be offered or sold to U.S. persons except pursuant to applicable exemptions from registration.

CAP REIT (TSX:CAR.UN.) is a growth-oriented investment trust owning interests in 24,212 residential suites located in major urban centres from coast to coast across the country. 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 CAP REIT's web site at www.capreit.net.

Contact Information

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