TSX-Venture-IIP
TORONTO, Aug. 5 /CNW/ - InterRent International Properties Inc.,
("InterRent" or the "Company") today announced that it has passed the critical
1,000 suite ownership level by the acquisition of a 108 suite apartment
building in Hamilton, Ontario and an additional 65 suite building in Niagara
Falls, Ontario.
Michael Newman President & CEO of InterRent, commenting on the
acquisitions stated. "When we closed our $8.0 million equity financing in
December of 2004 we made a commitment to our investors to deploy these funds
expeditiously and accretively. Over the past six months we have purchased
approximately 700 suites at an average per suite cost below $50,000 and at an
average capitalization rate of 8.5%. With these new acquisitions InterRent has
reached a critical milestone in its evolution to build a sizeable portfolio of
multi residential real estate in Ontario. We entered fiscal 2005 with
ownership of 372 units in our portfolio, with a book value of $17.0 million,
and a revenue run rate of just over $2.4 million. We will now own 1,050
apartment suites with a net book value of approximately $54 million, and an
estimated market value, based on third party appraisals and independent market
information, in excess of $60 million. This equates to a net asset value of
approximately $0.60 per share."
With the integration of projected revenues from the most recent
acquisitions, InterRent will enter fiscal 2006 with a forecasted annual
revenue run rate of $8.3 million and a projected FFO (Funds From Operations)
run rate of $0.05 per share.
In its latest acquisitions, the Company entered into binding purchase and
sale agreements with arms length vendors for the purchase of 173 suites in
Hamilton's Mountain District and in the Stamford Center area of Niagara Falls.
The 108 unit Hamilton property is located next to Henderson Hospital
which is currently part of an ongoing $250 million expansion program. The
Hamilton building's purchase price of $4.9 million ($45,370 per suite) will be
paid for by the assumption of a $3.7 million first mortgage, bearing interest
at 4.86%, due in 2008, $25,000 in common shares of InterRent priced in the
context of the market, and the balance in cash. The closing of the transaction
is scheduled for September 19, 2005.
The 65 unit Niagara Falls building's purchase price of $3.825 million
($58,846 per suite) purchase price will be satisfied through the assumption of
a $ 1.92 million first mortgage, bearing interest at 6.1%, due in 2008, a
Vendor Take Back (VTB) mortgage for $760,000 at 5% (payable as to interest
only) and maturing concurrently with the existing first mortgage, and the
balance in cash. The building has undergone recent, extensive upgrades,
including a new membrane roof, renovated common areas and new appliances. The
transaction is scheduled to close on September 20, 2005.
The Company also announced that it has now completed the previously
announced purchase of 166 suites for a total consideration of $7.935 million
($47,801 per suite), in Kingston, Ottawa, London and Trenton, Ontario, and has
made its previously conditional purchase of 48 suites in Prescott, Ontario,
binding.
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, with 1,050 apartment suites under ownership or binding agreements of
purchase.
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
