Business & Finance
Business and Finance
Business and Finance
Tue, March 1, 2011 NORTHWEST HEALTHCARE PROPERTIES REAL ESTATE INVESTMENT TRUST ANNOUNCES ACQUISITION OF TORONTO MEDICAL OFFICE BUILDING
TORONTO, March 1 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (TSX: NWH.UN) (the "REIT") announced today it has entered into an agreement to acquire the Malvern Medical Arts Building, a prominent medical office building anchored by the Malvern Medical Clinic, one of the busiest medical clinics in the Greater Toronto Area. The purchase is expected to close in the first half of 2011, subject to customary closing conditions, and is expected to be immediately accretive and further advance the REIT's presence in the Toronto medical office building market.
The Malvern Medical Arts Building is a Class "A" office complex located at 1333 Neilson Road, in the former city of Scarborough portion of Toronto, approximately 3.7 kilometers from the Rouge Valley Centenary Hospital. The property consists of a 40,974 square foot medical office building located on 1.67 acres of land, with a 120-stall pay surface parking facility. The building is occupied by 17 tenants including a laboratory, diagnostic imaging clinics, a pharmacy, and the anchor tenant Malvern Medical Clinic. With more than 30 physicians and 23 in the Malvern Medical Clinic alone, the Malvern Medical Arts Building has experienced consistently high occupancy rates and is currently 99% occupied.
Malvern Medical Clinic, has served the local community for over 20 years, and has agreed to a new ten year lease with the acquisition. We expect this commitment to continue the building's legacy of strong tenant retention and significant patient foot traffic.
The purchase price will be approximately $16.75 million, subject to adjustments, which represents a 7.9% capitalization rate applied to in-place annual net operating income (reflecting the going forward year one projected net operating income expected by the REIT) or $409 per square foot of rentable area ($380 per square foot if the parking valuation is excluded). The Malvern Medical Arts Building will be acquired free and clear of any existing mortgages. The equity portion of the REIT's investment will be funded from existing resources.
This investment will be the REIT's tenth Toronto area property and its twenty-third asset in the Province of Ontario. The REIT believes that the acquisition of the Malvern Medical Arts Building will further solidify its market leadership in healthcare real estate in Toronto, Ontario and Canada.
About NorthWest Healthcare Properties Real Estate Investment Trust
NorthWest Healthcare Properties Real Estate Investment Trust, "Canada's Healthcare Landlord", is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT holds a portfolio of 52 income-producing properties, with a focus on medical office buildings and healthcare real estate, comprising approximately 3.7 million square feet of gross leasable area located in British Columbia, Alberta, Ontario, Québec, Nova Scotia and New Brunswick.
Forward-Looking Information
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", or "continue" or the negative thereof or similar variations. The REIT's actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are not completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors (including changes in interest rates), competition, changes in government regulations, the performance of the acquired property, and the factors described under "Risk Factors" in the Short Form Prospectus dated October 22, 2010, including the risks and uncertainties set out in the Management Discussion and Analysis dated November 11, 2010 for the quarter ending September 30, 2010 included by reference therein, which are available on [ www.sedar.com ]. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements. Certain statements included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release.
"Capitalization rate", "AFFO" and "Net operating income" (or NOI) are not measures recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by GAAP. Capitalization rate and NOI are presented in this press release because management of the REIT believes that these non-GAAP measures are relevant in interpreting the purchase price of the property being acquired. Capitalization rate, and NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to capitalization rate and NOI reported by such organizations. For additional information regarding each of the foregoing non-GAAP measures, including the definitions thereof, refer to the REIT's management's discussion and analysis for the three months ended September 30, 2010, a copy of which is filed on [ www.sedar.com ].
