TORONTO, ONTARIO--(Marketwired - Feb. 16, 2017) - Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) announced today that it has waived conditions and will acquire a luxury 256-suite residential apartment property located in the affluent Côte-Saint-Luc neighbourhood in the Greater Montréal Area. The property is well-located within walking distance of a high-end shopping centre, hospital, community centre and public library. The purchase price, to be initially financed in cash from the CAPREIT's Acquisition and Operating credit facility, is $23.5 million, generating a very strong going-in capitalization rate of approximately 6.51% and a price per suite of approximately $92,000, well below replacement cost. Closing of the transaction is expected on or before May 3, 2017.
The property was constructed in 1975 and currently is operating as a seniors' residence. On closing, the vendor will deliver the property to CAPREIT substantially vacant and will deposit $2.5 million in escrow to be disbursed to CAPREIT on a monthly basis in an equal to the rents projected for any suites that remain vacant for a period of up to two years after closing. CAPREIT will invest approximately $8.6 million in capital improvements over a three-year period, including a garage restoration, fire safety systems, in-suite and common area renovations, and energy efficiency initiatives. The property also has the potential to add additional suites on the ground floor over time.
CAPREIT, working with the vendor, has initiated certain capital projects and has begun marketing the property to prospective residents for occupancy on or after closing.
"This unique and highly accretive transaction is just another example of how we are bringing our culture of innovation to our focus on enhancing long-term Unitholder value," commented Thomas Schwartz, President and CEO. "As we invest in this new property, and apply our proven management programs to efficiently lease-up the building and reduce operating costs, we will generate a very strong return on investment with, stable, sustainable and growing cash flows over time."
As one of Canada's largest residential landlords, CAPREIT is a growth-oriented investment trust owning interests in 48,738 residential units, comprising 42,287 residential suites and 31 manufactured home communities comprising 6,451 land lease sites located in and near major urban centres across Canada and the Netherlands. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net and our public disclosure, which can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT'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.