InterRent Real Estate Investment Trust

InterRent Real Estate Investment Trust

June 26, 2008 07:30 ET

InterRent REIT Announces Closings of Property Purchase and Sale Transactions

TORONTO, ONTARIO--(Marketwire - June 26, 2008) -


InterRent Real Estate Investment Trust (TSX:IIP.UN)("InterRent") announced today that it has closed the acquisition of a 42 suite apartment building located in Ottawa's downtown, and the sale of a 68 suite building in the GTA's Scarborough neighborhood. Details of the Ottawa acquisition were disclosed in a press release dated March 20, 2008.

The purchase price for the Ottawa building was $6,135,000 ($146,071 per suite). The purchase is being financed through the assumption of two existing first and second mortgages in the amount of $1,714,856, a Vendor Take Back Mortgage "VTB" of $1,925,938, the issuance of $360,000 worth of InterRent REIT units at a deemed price of $3.50 per unit, and the balance in cash. The existing, and VTB mortgages are to be replaced with a new CMHC insured first mortgage at a 60% Loan To Value (LTV) ratio, within 60 days of closing. The issuance of the units is subject to the receipt of all regulatory approvals, and such units will also be subject to a four month statutory hold period. The "going in" capitalization rate "CR" was at 6.7%.

The GTA building was sold to an arms length purchaser for $4,650,000 ($68,382 per suite).

Commenting on the transactions, Michael Newman, InterRent's CEO said, "Ottawa currently represents 16% of our portfolio, and is its best performing region, with an approximately 1.5% vacancy rate, and a 65% Net Operating Income "NOI". The addition of a fully renovated, condominium quality building in Ottawa's downtown, without the addition of any incremental costs will serve to strengthen our overall operating performance. Management will continue to seek out accretive acquisition opportunities as they present themselves in the nation's capital. The property sold in the GTA did not meet management's initial financial operating expectations, and was negatively impacting our operating performance. As a consequence, management decided that it was in the REIT's best interest to dispose of an asset that was not generating positive cash flow, and would have taken significant capital resources to stabilize and bring up to InterRent's current portfolio quality and financial operating standards."

About InterRent

InterRent is a rapidly expanding, growth oriented real estate investment trust engaged in building unitholder value through the accretive acquisition, ownership and operation of strategically located income producing multi-residential real estate, with 4,012 apartment suites under ownership and 191 suites under contract, for a total of 4,203 apartment suites in Ontario.

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "anticipated", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". InterRent is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements contained in this release. A full description of these risk factors can be found in InterRent's publicly filed information which may be located at InterRent cannot assure investors that actual results will be consistent with these forward looking statements and InterRent assumes no obligation to update or revise the forward-looking statements contained in this release to reflect actual events or new circumstances.

The TSX Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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