- REIT Has Option to Acquire Property
Following Stabilization at a 5% Discount to Market Value -
OTTAWA, ON, April 29, 2021 /CNW/ - Minto Apartment Real
Estate Investment Trust ("the REIT") (TSX: MI.UN) today announced
an agreement to provide up to $51.4
million in financing (the "Financing") to a subsidiary of
Minto Properties Inc. ("MPI") to develop a residential site in
Ottawa, Ontario ("Beechwood").
Beechwood comprises approximately one acre of land fronting
Beechwood Avenue in New Edinburgh,
one of Ottawa's most desirable
urban main streets and neighbourhoods.
The Financing will bear interest at 6% per annum, which will
accrue and be payable in full on the maturity of the loan. On
stabilization of the property, which is expected in the fourth
quarter of 2024, the REIT will have the exclusive option to
purchase Beechwood at a 5% discount to its then-appraised fair
market value. The Financing will be accretive to the REIT's AFFO
per unit during the development period and accretive to the REIT's
NAV upon an exercise of its purchase option.
The Beechwood development is consistent with the REIT's strategy
of growing its institutional quality portfolio of urban
multi-residential assets in Canada's six major markets. Beechwood has an
attractive location with diverse amenities, a strong retail
presence and a Walk Score of 84. Much of the REIT's growth strategy
will be through development and intensification, lowering the
average age of the portfolio and reducing associated capex
requirements. Subject to the outcome of final rezoning and site
plan approval, Beechwood is expected to be a 9-storey building with
approximately 229 rental suites comprising approximately 153,000
square feet and up to three ground floor retail units comprising
approximately 6,000 square feet. Suites are expected to range in
size from 463 square foot studios to 1,076 square foot two-bedrooms
plus den.
"This is the third investment financing transaction that we have
entered into with MPI, following the Fifth + Bank project in
Ottawa and the Lonsdale Square
project in Vancouver," said
Michael Waters, Chief Executive
Officer of the REIT. "Like those transactions, this one provides
the REIT with preferential access to a new, high quality
purpose-built rental property in an attractive urban location. The
Financing structure insulates the REIT from development and
construction risks, while we earn an attractive return during the
development period. This transaction again highlights the unique
benefit of the REIT's relationship with the Minto Group."
The initial advance under the Financing of $9.1 million was made on April 29, 2021 and the balance of the
Financing will be advanced as the development progresses.
Construction of Beechwood is expected to commence in early 2022
with stabilization of the project scheduled for late 2024. The REIT
intends to fund the Financing through draws on its revolving credit
facility. The Financing is secured by a mortgage on the property
and is guaranteed by MPI. The Financing will be subordinate to
senior construction financing.
MPI is a related party to the REIT. Accordingly, the terms of
the Financing were reviewed, considered and approved by a committee
of independent trustees of the REIT.
About Minto Apartment Real Estate Investment Trust
Minto Apartment Real Estate Investment Trust is an
unincorporated, open-ended real estate investment trust established
pursuant to a declaration of trust under the laws of the Province
of Ontario to own income-producing
multi-residential properties located in urban markets in
Canada. The REIT owns a portfolio
of high-quality income-producing multi-residential rental
properties located in Toronto,
Montréal, Ottawa, Calgary and Edmonton. For more information on Minto
Apartment REIT, please visit the REIT's website at:
https://www.mintoapartments.com/.
Forward-Looking Information
This news release may contain forward-looking information within
the meaning of applicable securities legislation, which reflects
the REIT's current expectations regarding future events and in some
cases can be identified by such terms as "will" and "expected".
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond the REIT's control that could cause actual results and
events to differ materially from those that are disclosed in or
implied by such forward-looking information. Such risks and
uncertainties include, but are not limited to, the completion of
the transactions contemplated in this news release in the manner
anticipated, and the factors discussed under "Risk and
Uncertainties" in the REIT's 2020 Management's Discussion and
Analysis dated March 11, 2021 (the "2020 MD&A"), which is
available on SEDAR (www.sedar.com). The REIT does not undertake any
obligation to update such forward-looking information, whether as a
result of new information, future events or otherwise, except as
expressly required by applicable law. This forward-looking
information speaks only as of the date of this news release.
Non-IFRS Financial Measures
This news release contains financial measures that are not
defined under International Financial Reporting Standards ("IFRS")
and may not be comparable to similar measures presented by other
real estate investment trusts or enterprises. The REIT believes
that AFFO is an important measure of operating performance and NAV
is an important measure of the value of the REIT. These measures
are not defined by IFRS and do not have standardized meanings
prescribed by IFRS, and therefore should not be construed as an
alternative to IFRS measures. See the REIT's 2020 MD&A for
further discussion of these non-IFRS financial measures and
reconciliations to the nearest IFRS measures.
SOURCE MINTO Real Estate
Investment Trust