Business
Killam Properties Inc. announces Ottawa acquisition and joint venture with Kingsett Capital and Alberta Investment Management Corporation
HALIFAX , Sept. 9, 2014 /CNW/ - Killam Properties Inc. ("Killam") is pleased to announce ...
About this update from Killam Apartment Reit
[{"type":"text","content":"\n\nHALIFAX, Sept. 9, 2014 /CNW/ - Killam Properties Inc. (\"Killam\") is pleased to announce it has agreed to acquire a 50% interest in Kanata Lakes Apartments II, a newly constructed, 152-unit apartment building in Ottawa, Ontario in a joint venture with affiliates of KingSett Capital Inc. (\"KingSett\") and AIMCo Realty Investors LP, a limited partnership managed by Alberta Investment Management Corporation (\"AIMCo\") on behalf of certain of its clients. The property, located at 1025 Canadian Shield Avenue, Kanata, is the second of a five-building complex having a shared clubhouse. \n\nConstruction of the building was completed in December 2013 and it is completing its lease-up phase. The purchase agreement includes a revenue guarantee of 90% for the next year. The building includes 129 one-bedroom units and 23 two-bedroom units. The average rent is $1,785 and the average unit size is approximately 950 square feet. The units have condo quality features, including stainless steel appliances, granite countertops and in-suite laundry. The building also includes 196 underground parking stalls and its proportionate interest in a shared two-storey 18,000 square foot clubhouse and fitness facility.\n\nThe purchase price for Kanata Lakes Apartments II is $48.7 million ($320,000 per suite), with Killam's 50% ownership interest being $24.4 million. The purchase price will be satisfied with a new 10-year CMHC insured mortgage of $28.5 million and cash. The acquisition is expected to close by the end of September.\n\nThe property will be owned in a joint venture between Killam and affiliates of KingSett and AIMCo.  In connection with the acquisition, Killam has agreed to issue common shares of Killam to the KingSett and AIMCo joint venture with a total value of $7.0 million based on the five-day volume weighted average price (VWAP) of Killam common shares preceding this announcement, less 3%. Proceeds from the private placement will be used by Killam to partially fund its proportionate share of the Kanata Lakes acquisition.  \n\nFollowing the completion of the private placement, the KingSett and AIMCo joint venture will, collectively, beneficially own common shares of Killam representing approximately 10.8% of Killam's common shares outstanding.  In connection with the private placement, the KingSett and AIMCo joint ...