CAR.UN:CC - CAPREIT Announces Strategic Capital Recycling in Ottawa

TORONTO, Feb. 27, 2023 (GLOBE NEWSWIRE) -- Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today that it has completed the acquisition of an on-strategy, newly-built property located in a major suburb of Ottawa. The amenity-rich property, which contains 143 residential suites that are approximately 95% occupied, is located in close proximity to another newly-built property that CAPREIT purchased in 2022, providing economies of scale. CAPREIT acquired the high-quality asset for a purchase price of $61 million (excluding transaction costs), which was satisfied by the following sources of capital: $16 million in cash, $42 million from the assumption of an existing mortgage, and $3 million from a Vendor Take-Back (“VTB”) loan. Repayment of the five-year interest-free VTB may be waived, subject to certain conditions. The mortgage being assumed carries contractual interest of 3.25% per annum for a remaining ten-year term to maturity.

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“This beautiful new asset is well-built and well-located in a thriving neighbourhood that has strong fundamentals, perfectly in line with our asset re-positioning strategy,” commented Mark Kenney, President and CEO. “In addition to improving the quality of our portfolio, we are assuming a below-market, long duration mortgage that adds incremental value and liquidity available to continue securing strategic returns.”

“Following our successful disposition of three older, value-add assets in Ottawa last month, we paid down higher interest debt and are now re-allocating capital back into Ottawa through this new-build property that has both a strong growth profile and low capital expenditure needs,” added Julian Schonfeldt, Chief Investment Officer. “We sold at a capitalization rate in the mid 3% range and are re-investing at a capitalization rate that is in excess of 4%, at a price that is below replacement cost, creating value for our Unitholders.”

ABOUT CAPREIT
CAPREIT is Canada’s largest publicly traded provider of quality rental housing. As at December 31, 2022, CAPREIT owns or has interests in approximately 67,000 residential apartment suites, townhomes and manufactured home community sites well-located across Canada and the Netherlands, with approximately $17 billion of investment properties in Canada and Europe. For more information about CAPREIT, its business and its investment highlights, please visit our website at www.capreit.ca and our public disclosure which can be found under our profile at www.sedar.com.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT’s intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.

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