TSX-Venture-IIP
TORONTO, April 13 /CNW/ - InterRent International Properties Inc.
("InterRent" or the "Company") today announced that it has continued the
deployment of the proceeds from its $8.0 million equity financing in December
2004 by entering into conditional agreements of purchase with arms length
parties, to acquire a total of 224 apartment units in London, Ottawa,
Hamilton, Toronto and Trenton, for a total cost of $12 million or $53,705 per
unit. Additionally, InterRent also announced the completion of its previously
disclosed purchase of 180 apartment units in London, Kingston, Trenton and
Hamilton, for approximately $8.0 million, or $44,000 per unit, and the
successful closing of its previously announced sale of a 3 unit building in
the GTA at a capital gain of $76,000. Upon the closing of these transactions,
the Company's portfolio will increase from 383 units to 787 units across
Ontario, an increase of 105%, and the Company will have deployed 85% of the
funds raised in the December 2004 equity financing.
The suite composition of the $12 million in acquisitions was 5x3 bedroom,
118x2 bedroom, 79x1 bedroom and 22 bachelor apartments with an average monthly
rent of $681.00, with a large percentage of tenants paying their own hydro.
The occupancy rates at the properties was 97% at the end of March. Upon the
expected completion of these transactions, the Company's portfolio has grown
over the past year by more than 100%, to a book value of approximately
$37.0 million. The acquisitions are scheduled to close between mid-April and
June 15, 2005, and are subject to completion of due diligence by InterRent and
the approval of the share issue portion of the purchase price by the TSX.
The $12,030,000 purchase price will be satisfied by the assumption of
$5,370,000 in existing first mortgages with an average interest rate of 5.9%
and maturity dates extending from two to fifteen years, a new ten year CMHC
insured first mortgage for $1,575,000 at 5.25%, a new two and a half year CMHC
insured second mortgage for $552,000 at 3.99%, Vendor Take Back (VTB) first
and second mortgages of $1,608,000 at rates ranging from 2.5% to 6%, and
$2,519,000 in cash from the proceeds of InterRent's recently completed equity
financing, and by the issuance of $445,680 worth of InterRent shares based on
the average closing price of InterRent common shares on the TSX.V for the ten
trading days prior to closing of the transaction, subject to receipt of
approval from the TSX. The debt financing portion of the transactions
represents a 75.7% Loan To Value (LTV) ratio. The acquisitions, based on
historical vendor data, are projected to generate average monthly rents of
$681.00 per unit, or $1,830,486 in stabilized annual gross revenues and
stabilized net operating income of $1,006,767 at a purchase capitalization
rate of 8.4%.
Michael Newman, President & CEO of InterRent, commenting on the accretive
impact of the pending acquisitions stated "With these pending acquisitions our
portfolio will total 787 units and will put us within striking distance of
achieving our goal of having at least 1,000 apartment units under ownership by
year end. We expect that these new purchases will contribute significantly to
our bottom line in the coming quarters as synergies are captured and non-
operating expenses are amortized over a larger portfolio. As many of the rents
at these new buildings are below market, we believe that significant revenue
upside is available to us going forward. InterRent is firmly focused on
building a profitable portfolio of neighborhood multi-residential real estate
in Ontario".
InterRent is a rapidly expanding, growth oriented real estate company
engaged in building shareholder value through the acquisition, ownership and
operation of strategically located income producing multi-residential real
estate within the Greater Toronto Area (GTA), and other major Ontario
population centers.
Certain information in this press release may contain forward-looking
statements. This information is based on current expectations that are subject
to significant risks and uncertainties that are difficult to predict. Actual
results might differ materially from results suggested in any forward-looking
statements. The Company assumes no obligation to update the forward-looking
statements, or to update the reasons why actual results could differ from
those reflected in the forward looking-statements unless and until required by
securities laws applicable to the Company. Additional information identifying
risks and uncertainties is contained in the Company's filings with the
Canadian securities regulators, which filings are available at www.sedar.com.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
%SEDAR: 00010579E
