TORONTO, ONTARIO--(Marketwired - Nov. 28, 2016) - Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) ("Urbanfund" or, the "Company"), announced today that Urbanfund has entered into a binding letter of intent to form a joint venture, with an arm's length real estate investment firm, to purchase, renovate, change to condominium title and sell units in, an industrial complex, comprised of two buildings, located at 11-13 Edvac Drive in Brampton, Ontario near the intersection of Goreway Road and Williams Parkway.
The complex is comprised of two industrial buildings, aggregating 64,000 square feet, and is under contract for a purchase price of $5.315 million (subject to customary adjustments). The property has 40 units and is currently 94.2% occupied.
It is anticipated that the Company will hold a 50% interest as will its joint venture partner, Takol Real Estate Inc. Each party will invest $1.625 million (inclusive of purchase price deposits) with the remainder of the purchase price and funds to renovate the property provided by a private lender at a rate of 6% per annum. The debt is partial recourse, open after the ninth month of term, and provides for partial discharges.
"We are very excited about our new joint venture with Takol," noted Mitchell Cohen. "We look forward to Takol providing Urbanfund with a pipeline of similar opportunities."
The existing rent roll allows for the renovation and turnover of units into condominiums while still collecting rental revenue from the tenants whose leases have term left. The expected NOI for Year 1, prior to any sales or renovation is $310,000 which is based on a 5.8% cap rate on the purchase price. Closing is scheduled to take place in mid-December 2016 with renovations and sales projected over four years.
ABOUT URBANFUND CORP.
Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund's focus is to identify, evaluate and invest in real estate or real estate related projects. The Company's assets are located in Belleville, Kitchener, London and Toronto, Ontario, Quebec City and Montreal, Quebec. The Company's strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.
ABOUT TAKOL REAL ESTATE INC.
Takol is a Canadian private equity company specializing in commercial real estate investment, development and re-development with national market expertise. The company is currently working on other opportunities in Ottawa, Ontario and Winnipeg, Manitoba.
This press release contains certain forward-looking statements, which reflect Management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities. Statements about the acquisition, renovation, condominium conversion, and sale, of 11-13 Edvac Drive in Brampton, Ontario constitute forward-looking statements. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company's control such as Real Estate Taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company's assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the "Risks and Uncertainties" section of the Company's most recent Management's Discussion and Analysis.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this release.