Canadian Apartment Properties Real Estate Investment Trust

Canadian Apartment Properties Real Estate Investment Trust

October 03, 2005 08:45 ET

CAP REIT Acquires High Quality British Columbia Portfolio

TORONTO, ONTARIO--(CCNMatthews - Oct. 3, 2005) -

Selling Non-Core Ontario Properties in Related Transaction

Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT") (TSX:CAR.UN) announced today that it had purchased a portfolio of two luxury and one mid-tier apartment properties situated in British Columbia's Greater Vancouver Area containing a total of 406 rental suites from Transglobe Property Management Services ("Transglobe"). The purchase price (excluding acquisition costs and land transfer taxes) was approximately $56.0 million. CAP REIT funded the acquisition from its existing credit facility, however, approximately $35 million in mortgage financing has been arranged, of which $29.2 million is for new mortgages with an interest rate of 3.957% and an average term of five years. The acquired properties are well maintained with average rents at or near market levels. Occupancy in the acquired portfolio stands at approximately 97%. The transaction closed on September 30, 2005.

In a related transaction, CAP REIT has agreed to sell to Transglobe a portfolio of thirteen non-core apartment complexes in Ontario, including eleven in the Greater Toronto Area ("GTA"), and the remainder outside the GTA, aggregating 797 suites, with closing expected to occur in mid December 2005. The total sale price will be approximately $70.3 million, and CAP REIT will record a gain on the disposition of these properties of approximately $10.0 million in the December quarter 2005 financial statements. The total cash proceeds from the sale, net of closing costs, will be approximately $42.0 million, which will be used to pay down the REIT's acquisition credit facility at the time of closing. The purchaser has waived due diligence, subject to normal closing conditions.

"This important, innovative and accretive transaction is aimed at expanding our presence in Vancouver, one of Canada's strongest rental markets, and repositioning our portfolio by selling certain smaller, non-core properties in Ontario that do not suit our current operating infrastructure," commented Thomas Schwartz, President and Chief Executive Officer.

With the completion of these transactions, CAP REIT's British Columbia portfolio will grow to 879 suites, or 3.5% of the total portfolio. The Ontario portfolio will reduce to 69.7% of the total portfolio from 71.7% prior to the transaction, with the GTA portfolio reducing from 52.3% to 50.5% of the total portfolio. The increase in size of the Vancouver portfolio will now enable us to realize economies of scale and further enhance the performance of the combined properties.

"One of our key objectives this year was to further reduce Unitholder risk by enhancing the geographic diversification of our portfolio and increasing our presence in key Canadian markets," Mr. Schwartz continued. "With this transaction, and our recent purchases in Montreal and Quebec City, we have made significant progress toward meeting this goal."

As one of Canada's largest residential landlords, CAP REIT (TSX:CAR.UN) is a growth-oriented investment trust owning interests in 26,049 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 cash distributions per Unit by 51%. For more information about CAP REIT, its business and its investment highlights, please refer to our web site at

Contact Information

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