HALIFAX, NOVA SCOTIA--(Marketwired - July 5, 2016) - Killam Apartment REIT (TSX:KMP.UN) ("Killam") is pleased to announce that it has completed the previously announced redemption of its $57.5 million, 5.65% convertible debentures. Proceeds from Killam's $98 million public offering of trust units, which closed on June 2, 2016, were used to fund the redemption.
Killam also closed two previously announced acquisitions, Kanata Lakes Apartments III and Garden Park Apartments. On June 10, 2016, Killam acquired a 50% interest in Kanata Lakes Apartments III, located at 1047 Canadian Shields Avenue in Ottawa. The new 173‐unit apartment building is part of a five‐building complex with a shared clubhouse. Killam and its 50/50 partner now own three of the buildings and have the two remaining buildings under contract with closings scheduled for Q1-2017. The acquisition cost of $30.8 million for Killam's 50% interest in Kanata Lakes Apartments III was funded through a new 10‐year CMHC‐insured mortgage at 2.51% ($18.4 million), and the remainder in cash.
On June 30, 2016, Killam acquired the remaining 51% interest in Garden Park Apartments in Halifax which it did not already own. The $23.7 million acquisition was funded with cash. Killam plans to pledge the unencumbered asset against a new acquisition line of credit, increasing Killam's acquisition line from $2 million to $30 million.
In addition to completing the previously announced acquisitions, Killam also acquired a 28-unit apartment building in Fredericton on July 17, 2016, for $1.8 million. The building, 270 Parkside Drive, is located adjacent existing Killam properties.
"We have strengthened our balance sheet during the first half of 2016," noted Philip Fraser, Killam's President and CEO. "We used the proceeds from our recently completed equity raise to redeem $57.5 million in convertible debentures and to close $56.3 million in acquisitions. These transactions add high-quality assets to our real estate portfolio and improve our leverage ratios. The ability to acquire Garden Park Apartments mortgage-free enables Killam to increase its acquisition line of credit, ensuring increased acquisition capacity and flexibility in the future."
About Killam Apartment REIT
Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning, operating and developing multi-family apartments and manufactured home communities. Killam's current portfolio includes $1.9 billion in real estate assets. Killam's strategy to maximize its value and long-term profitability includes concentrating on three key areas of growth: 1) increasing the earnings from its existing portfolio, 2) expanding its portfolio and diversifying geographically through accretive acquisitions, with an emphasis on newer properties, and 3) developing high-quality properties in its core markets.
Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this report may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of Killam to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For more exhaustive information on these risks and uncertainties, you should refer to our most recently filed annual information form which is available at www.sedar.com. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. Other than as required by law, Killam does not undertake to update any of such forward-looking statements.