Minto Apartment REIT announced it has purchased two new multi-residential buildings in Calgary for $63.8 million. In addition, it is moving forward on the redevelopment of a commercial property in Ottawa, which will become a mixed-use multi-residential and retail property.
Located in Quarry Park, Calgary, the newly-built “Quarters” is a two-building multi-residential rental property comprising 199 suites. The property is currently 98 per cent occupied with an average monthly rent of $1,506 per suite.
Quarry Park is home to thriving retail amenities and numerous corporate campuses and headquarters, across 1.7 million sq. ft. of office space, including Imperial Oil, Stantec, Jacobs Engineering, AECOM and Lafarge. Surrounded by a 50-acre nature reserve and kilometers of pathways and trails, Quarry Park is serviced by three bus routes, including one Bus Rapid Transit route, and is a short walk from the proposed Quarry Park LRT Station.
The Quarters is in close proximity to another Minto property, The Laurier, which will provide the REIT with an opportunity to generate operating efficiencies. With this transaction, the REIT will become the sole purpose-built multi-residential landlord in the Quarry Park corporate campus.
The purchase price for The Quarters is approximately $63.8 million (approximately $321,000 per suite), representing a 4.1 per cent cap rate (based on in-place net operating income) and 6.25 per cent discount to the property’s appraised value. The purchase price will be satisfied with a newly arranged term mortgage and from the REIT’s existing credit facility. The transaction is currently expected to close in January 2019.
Fifth and Bank, Ottawa
Over in Ottawa, the REIT has agreed to advance up to $30.0 million of financing in support of MPI’s planned redevelopment of a commercial property located at 99 Fifth Avenue into a mixed-use multi-residential rental and retail property. The property is located in the heart of Glebe, one of Ottawa’s most desirable neighbourhoods, with the city’s lowest multi-residential vacancy rate of 0.2 per cent according to CMHC.
It is surrounded by diverse amenities and a strong retail presence, and features a Walk Score of 96. Zoning for this intensification project has already been secured. Construction of the approximately 160-suite multi-residential rental component is scheduled to start in 2019, with occupancy expected to begin in the first half of 2021.
“The acquisition of the Calgary properties and the provision of financing for the Fifth and Bank redevelopment are consistent with our growth strategy as outlined in our IPO prospectus earlier this year,” said Michael Waters, Chief Executive Officer of the REIT. “The Calgary transaction will further diversify our holdings by increasing the REIT’s presence in Alberta from 8 per cent of the gross book value of our portfolio to 12 per cent.”