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

Canadian Apartment Properties Real Estate Investment Trust

July 09, 2007 16:33 ET

CAP REIT Acquires Two of Canada's Premier Adult Lifestyle Communities

CONFERENCE CALL TO BE HELD JULY 9 AT 4:45 PM ET

TORONTO, ONTARIO--(Marketwire - July 9, 2007) - Canadian Apartment Properties Real Estate Investment Trust ("CAP REIT") (TSX:CAR.UN) announced today that it is acquiring two of Canada's premiere luxury land lease adult lifestyle communities located near Bowmanville and in Grand Bend, Ontario. Combined the two communities consist of 1,233 rental sites on 371 acres of land. Occupancies at the two properties are a very stable 99.5%. The total purchase price is $75.0 million, or approximately $61,000 per rental site, and includes the acquisition of all community services and amenities. The purchase will be financed by a $55 million first mortgage financing, the issuance to the vendor of $8.0 million in new CAPREIT Limited Partnership Units (at a weighted average price of $19.45 per unit, exchangeable into CAP REIT Trust Units), and the balance from its acquisition facility.

"We are very proud to be adding two of Canada's premiere adult lifestyle communities to our growing portfolio. These superior properties are recognized as among the best in the country, offering the highest quality of lifestyle available in the market with a complete range of services and amenities," commented Thomas Schwartz, President and CEO.

Wilmot Creek, one of Canada's finest adult lifestyle communities, is situated near Bowmanville, Ontario. Surrounding a 9-hole golf course, the community is comprised of 861 large and landscaped rental sites well-located in a rural setting along a 3 kilometer expanse of Lake Ontario shoreline, just 40 minutes east of Toronto. Average monthly rents at Wilmot Creek are approximately $648 per site. The well-planned community is comprised of high-quality, single storey site-built homes ranging from 828 to 1,805 square feet situated on large land lots. Homeowners in this prestigious community enjoy membership in The Wheelhouse Country Club with the golf course as its focal point and including numerous other activities and amenities such as tennis courts, lawn bowling, a gym and weight room, games room, spa and two large swimming pools. The services of an aesthetician, hairdresser and a banking centre are available on-site.

Grand Cove is a high-quality, 372 site adult lifestyle community situated in Grand Bend, Ontario close to the shores of scenic Lake Huron northwest of London. The bungalow-style, single storey homes of Grand Cove range from 1,167 to 1,805 square feet set back from the street on lush private lots. Average rents are approximately $481 per month. Homeowners receive membership in the Grand Cove Country Club, which includes a large heated swimming pool, tennis court, lawn bowling, exercise and billiard rooms, laundry, library, craft room, garden plots, grandchildren's playground and many other amenities.

"We are very excited about this new line of business for CAP REIT," Mr. Schwartz continued. "Owning and operating a land lease adult lifestyle community is very similar to the apartment business. However, Unitholders will benefit from the significantly lower capital and maintenance costs, minimal rent collection issues, reduced exposure to energy costs, high stable occupancies and generally longer lease terms with low resident turnover. Most importantly, the acquisition will enhance our overall profitability and be immediately accretive to our Distributable Income."

Homeowners in a land lease community own their home and enter into a lease agreement for the lot on which it is located for terms up to twenty years for a monthly rental charge. In Ontario, residents are subject to annual Provincial guideline rent increases. Homeowners are responsible for all of their utility costs, and all sites are connected to full municipal services. The homes are constructed by a high quality home builder in a variety of styles and floor plans, and can be customized to an owner's specifications. Homeowners are primarily "empty nesters" in their 50's and 60's seeking the lifestyle and amenities provided by these communities along with the serenity, security, location and affordability they offer. The average age of homeowners at CAP REIT's two new properties is approximately 65 years.

"Looking ahead, we will prudently examine additional acquisitions in this new line of business. With more than 1,100 land lease communities in Canada, and over 92% managed by singleproperty owners, there is ample opportunity to expand our presence in this highly accretive sector," Mr. Schwartz concluded.

CONFERENCE CALL

Management will hold a conference call to discuss this acquisition on July 9, 2007 at 4:45 pm ET. Interested parties can access the call by dialing local (416) 340-2216 or toll free at (866) 898-9626, or accessing a webcast of the call on the investor relations home page of CAP REIT's website at www.capreit.net. A slide presentation to accompany the conference call will also be available on the investor relations home page of CAP REIT's website at www.capreit.net.

The telephone numbers to listen to the call after it is completed (Instant Replay) are local (416) 695-5800 or toll free (800) 408-3053. The Passcode for the Instant Replay is 3228325#. The Instant Replay will be available until midnight, July 16, 2007. The call and accompanying slides will also be archived on the CAP REIT web site at www.capreit.net.

As one of Canada's largest residential landlords, CAP REIT (TSX:CAR.UN) is a growth oriented investment trust owning interests in 27,105 residential suites located in major urban centres from coast to coast and two land lease adult lifestyle communities comprising 1,233 rental sites located in Ontario. 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 www.capreit.net.

All statements in this press release that do not relate to historical facts constitute forward looking statements. These statements represent CAP REIT's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.

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