CAPREIT Expands Presence in Ontario MHC Business and Completes Early Buyout of One Operating Lease

TORONTO, Oct. 08, 2020 (GLOBE NEWSWIRE) — Canadian Apartment Properties Real Estate Investment Trust (“CAPREIT”) (TSX:CAR.UN) announced today that it has completed the prepayment of the buyout of one operating lease for a property located near Yonge Street and Lawrence Avenue in midtown Toronto. The purchase price for the operating lease buyout is approximately $7.8 million, funded by cash. To date CAPREIT has successfully converted twelve of its fifteen operating lease properties to traditional fee simple ownership interests, with only three remaining properties under operating leases. The aggregate purchase price for the prepayment of the total twelve operating lease buyouts over the last several months is approximately $161 million, representing a 31% discount to the aggregate purchase price for the buyouts set out in the respective operating leases, which buyouts would have been exercisable beginning in 2024.

“The early buyout of this operating lease further increases our financial capacity, provides meaningful NAV accretion, simplifies our balance sheet, and adds to the potential for future accretive development opportunities,” commented Mark Kenney, President and CEO.

Ontario MHC Portfolio
CAPREIT also announced today that it completed the acquisition of a portfolio of three manufactured home communities (“MHC”) located in Wingham, Espanola and Midland, Ontario, comprising 169 MHC sites on October 1, 2020. CAPREIT paid $9.0 million for the three properties, funded by cash and the assumption of approximately $4.0 million in existing mortgages. Residential occupancy in the portfolio currently stands at 100%.

Turnberry Estates contains 46 well-maintained sites on 20.3 acres of land within the town of Wingham, Ontario. The park includes a community centre and outdoor pool, is close to the town centre and schools, and is walking distance to green space and the Middle Maitland River.

The Espanola Mobile Home Park contains 60 sites on 16.3 acres in the town of Espanola in Northern Ontario near numerous local amenities including grocery stores, restaurants and retail shops.

Leeshore Estates is a 63-site mobile home park on 12.9 acres of land just north of the Midland town centre on the shore of Portage Park. The park is close to the picturesque town of Midland with its retail shops, grocery stores and restaurants.

“We continue to build our presence in the accretive MHC business,” commented Mark Kenney. “With a track record of full occupancies, stable and growing monthly rents, and low capital requirements, this portfolio will make a solid contribution to our cash flows for years to come.”

A Media Snippet accompanying this announcement is available by clicking on the image below: