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Morguard North American Residential REIT Announces Material U.S. Transactions and Financings

Morguard 7/12/2017

Morguard North American Residential Real Estate Investment Trust (the "REIT") (TSX: MRG.UN) announced today an update on the status of various investment and financing transactions.

On July 10, 2017, the REIT closed on the acquisition of a 515-suite apartment building in Chicago for $287.5 million (US$222.5 million).  Coast at Lakeshore East is a recently built, urban high-rise rental apartment building located in a prime Chicago submarket, with spectacular views of the Chicago River, Millennium Park and the Chicago skyline. The building is a LEED Silver candidate, offers 19,000 square feet of indoor and outdoor amenity space and an additional 18,000 square feet of commercial retail space. Concurrent with the acquisition, financing of $158.3 million (US$122.5 million), with a fixed term of eight years and an interest rate of 3.49%, was completed.

On July 6, 2017, the REIT closed on the acquisition of a newly built, 104-suite mid-rise apartment building located in the Greater Washington D.C. suburb of Falls Church, Virginia for the purchase price of $55.7 million (US$43 million). Northgate at Falls Church includes 32,000 square feet of high street commercial space and modern amenity space, including community courtyards with patio fireplace and grill, fitness center, clubroom and garage parking.  The property was completed in 2014 and is subject to a long-term land lease, with a fixed price land purchase option available in 12.25 years.  Concurrent with the acquisition, financing of $30.7 million (US$23.7 million), with a fixed term of 12.25 years and an interest rate of 4.05%, was completed.

On June 1, 2017, the REIT waived conditions on the acquisition of a 492-suite apartment community with a purchase price of US$129 million.  Fenestra Apartments, located at Rockville Town Square, Rockville, Maryland is a multi-building, 6-storey complex with high-end condo-style amenities, completed in 2008.  Fenestra is located near public transportation and at the social and cultural hub of the area.  Closing is targeted for the third quarter of 2017.

Additionally, on July 12, 2017, the REIT closed on the disposition of four properties comprising 1,329 suites located in Mobile, Alabama for $89.3 million (US$70.1 million).  The four properties in the REIT's Alabama portfolio were constructed between 1970 and 1978 and have no mortgage debt.

"We are excited about these acquisitions because they are located in urban growth markets and, being recently constructed, will mitigate capital risk for the REIT.  The sale of the Alabama properties is consistent with our strategy to opportunistically dispose of non-core assets," said Rai Sahi, Chief Executive Officer of the REIT.  "We continue to focus on improving the quality of the REIT's cash flow within North America and maximizing long-term value for unitholders."

During June 2017, the REIT also completed $81.3 million (US$60.9 million) of refinancing secured by three of its existing properties, located in Colorado, Georgia and Florida, at a weighted average interest rate of 3.84% and a weighted average term to maturity of 10 years.  The refinancings resulted in $26.6 million (US$20.0 million) of additional mortgage proceeds on the maturing loans, which had a weighted average interest rate of 4.46%. The REIT has now completed financing arrangements on all mortgages scheduled to mature during 2017.

About Morguard North American Residential REIT

The REIT is an unincorporated, open-ended real estate investment trust which owns, through a limited partnership, interests in a portfolio of 16 Canadian residential apartment communities, located in Alberta and Ontario, and 29 U.S. low-rise and mid-rise, garden-style apartment communities located in Colorado, Texas, Louisiana, Illinois, Georgia, Florida, North Carolina and Virginia consisting of nearly 13,000 residential suites.

Forward-Looking Information

Certain information in this press release may constitute forward-looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the REIT's business results of operations. Forward-looking statements use the words "believe", "expect", "anticipate", "may", "should", "intend", "estimate" and other similar terms, which do not relate to historical matters. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the REIT operates; changes in business strategy or development/acquisition plans; environmental exposures; financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the REIT; and other factors referred to in the REIT's filings with Canadian securities regulators. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The REIT does not assume the obligation to update or revise any forward looking statements.

For further information: K. Rai Sahi, Chief Executive Officer, (905) 281-3800; Robert D. Wright, Chief Financial Officer, (905) 281-3800

 

Morguard North American Residential REIT; Real Estate Investment