Business & Finance
Business and Finance
Business and Finance
Thu, June 16, 2011
Wed, June 15, 2011 KILLAM PROPERTIES INC. ANNOUNCES $50.4 MILLION OF ACQUISTIONS
HALIFAX, June 15, 2011 /CNW/ - Killam Properties Inc. (TSX: KMP) is pleased to announce acquisitions in New Brunswick totalling $50.4 million. The acquisitions include a total of 470 units in Fredericton and Moncton and will increase Killam's total apartment portfolio to 10,196 units and will bring Killam's New Brunswick apartment portfolio to 3,830 units, representing 38% of the total apartment portfolio.
On June 6, 2011, Killam closed the previously announced acquisition of a six-building, 310-unit apartment portfolio in Fredericton. The buildings are located within a block from each other, on Reynolds Street (200, 300 and 305 Reynolds) and neighbouring McKnight Street (25, 110 and 120 McKnight). The portfolio, built between 1996 and 2010, contains 35 one-bedroom, 212 two-bedroom and 63 three-bedroom units. The average rent is $931 per month, with tenants responsible for their own heating costs. The purchase price of $36.1 million ($116,500 per unit) was satisfied with $22.2 million in new and existing mortgages with a weighted average interest rate of 4.3%, and the balance in cash. The cap rate on the acquisition is approximately 6.2%.
Killam will acquire a three-building, 96-unit portfolio in Moncton. The properties, 155 Canaan Street and 115 - 133 Kedgwick Street, were built between 2008 and 2010. The buildings include 12 one-bedroom units, 81 two-bedroom units and 3 three-bedroom units, and have an average monthly rent of $922 per month, with tenants responsible for their own heating costs. The purchase price of $10.0 million ($104,200 per unit) will be satisfied with the assumption of $7.2 million of existing debt with a weighted average interest rate of 5.05% and the balance in cash. The cap rate on the acquisition, expected to close during the first week of July, is approximately 6.1%.
Killam will also acquire a two-building, 64-unit complex on Church Street located in Moncton. The buildings include 64 two-bedroom units with an average rent of $669 per month, with tenants responsible for their own heating costs. The purchase price of $4.3 million ($67,000 per unit) will be satisfied with the assumption of an existing mortgage of $2.6 million at 4.38%, and the balance in cash. The cap rate on the acquisition, expected to close during the last week of June, is approximately 6.2%.
"We are pleased to be expanding our portfolio of apartments in Fredericton and Moncton, two of our core markets", noted Philip Fraser, Killam's President and Chief Executive Officer. "In addition to complementing our existing portfolios in each city, these properties increase the percentage of Killam's apartment portfolio heated with electricity, where Killam is not exposed to rising energy costs."
"We continue to have an active acquisition pipeline and look forward to announcing additional acquisitions in the coming months as we grow our business though expansion in our existing markets in Atlantic Canada and in Ontario."
Corporate Profile
Killam Properties Inc, based in Halifax, Nova Scotia, is one of Canada's largest residential landlords, owning and operating multi-family apartments and manufactured home communities.
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 relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecast and projections, which we believe are reasonable as of the current date. 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.
