True North Apartment Real Estate Investment Trust has announced that it would acquire four properties in the Ontario area for a total purchase price of US$25.7 million. The properties are four mid rise buildings together with a townhouse complex located in the neighborhoods of Bradford, Guelph and Kitchener.
The properties were constructed between 1968 and 1972 and have 265 suites, many being two bedroom suites. There is a 97% occupancy rate with an average lease rate of US$833 per unit. The properties are well maintained requiring no substantial capital expenditures during the acquisition.
The purchase price is capitalized at 5.7% or about US$96,900 per unit and would financed through a mixture of cash payment and assumption of US$12.7 million mortgage debt. This is a debt to gross book value of nearly fifty percent. The mortgage debt is to mature in 7.8 years with a 2.5% interest rate. The full transfer is expected to be done by February 28, 2013.
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