CALGARY, ALBERTA–(Marketwired – Nov. 15, 2017) – Northview Apartment Real Estate Investment Trust (“Northview”) (TSX:NVU.UN) today announced it has agreed to acquire a 1,250 unit portfolio from independent third-party vendors and affiliates of Starlight Group Property Holdings Inc. (“Starlight”), for an aggregate purchase price of $196.8 million, with a weighted average capitalization rate of 4.4%. In addition, Northview has agreed to a sale, to an independent third-party vendor, of a 216 unit non-core asset located in Kitchener, ON, for $37.7 million. Following these transactions, which are expected to close in early December 2017, Northview's multi-family portfolio will increase to over 25,000 units.
Todd Cook, President and CEO, commented, “These transactions represent continued progress to our 2017 strategic priorities supporting the strategic capital redeployment and non-core asset sales. These high-quality assets are located in strong markets with an average occupancy level of 97.5%. It will further improve the overall geographic diversification and quality of our portfolio with a meaningful increase in the Ontario portfolio. This transaction also increases strong organic growth opportunities for our proven high-end renovation program.”
Mr. Cook concluded, “The acquisition is expected to be leverage neutral following future non-core asset sales. In an extremely competitive market landscape, these off-market transactions demonstrate the benefits of Northview's strategic relationship with Starlight and our continued focus on driving sustainable value creation for Unitholders.”
Summary of the Transaction
|2837 Yonge Street||Toronto||67|
|320 – 342 Avenue Road (1)||Toronto||109|
|2920 Fairlea Crescent||Ottawa||113|
|340 Colborne Street||London||132|
|204 Hespeler Road||Cambridge||146|
|24 – 28 Helen Avenue||Brantford||284|
|939 – 959 Boulevard de la Cote Vertu||Saint Laurent||89|
|105 Milton Street||Montreal||112|
|7840 Lochside Drive (1)||Saanichton||126|
|9 – 54 Paige Plaza||Lower Sackville||72|
(1) Properties acquired from Starlight.
The aggregate purchase price of $196.8 million for the acquisition will be funded by:
- Insured mortgage debt relating to the acquisition of approximately $121.9 million;
- Issuance of $52.0 million in Trust Units and Class B LP Units to the vendors valued at Northview's five day volume weighted average unit price prior to the closing date; and
- Cash consideration of $22.9 million funded by existing credit facilities and proceeds from the non-core asset sale in Kitchener, ON.
Related Party Transaction
The transactions include the acquisition of two properties from Starlight for total consideration of $58.2 million, including the issuance of $14.0 million in Class B LP Units to Starlight. In conjunction with the transactions, a fee of $1.6 million is payable to Starlight from Northview in accordance with the Transitional Service Agreement. The transactions were unanimously approved by the independent Trustees of Northview.
Northview is one of Canada's largest publicly traded multi-family REITs. Prior to this transaction, Northview's portfolio consist of approximately 24,000 quality residential suites in more than 60 markets across eight provinces and two territories. Northview's portfolio includes markets characterized by expanding populations, growing economies, high occupancy levels, and rising rents, which provides Northview the means to deliver stable and growing profitability and cash distributions to Unitholders of Northview over time. Northview currently trades on the TSX under the ticker symbol: NVU.UN. Additional information concerning Northview is available at www.sedar.com or www.northviewreit.com.
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