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NorthWest Healthcare Properties Real Estate Investment Trust announces portfolio acquisition in the province of Quebec
TORONTO, July 19 /CNW/ - NorthWest Healthcare Properties Real Estate Investment Trust (the "REIT") announced today it has waived conditions and expects to close the acquisition of a 117,000 square foot property portfolio of two buildings in the province of Quebec (the "Portfolio"). The purchase is expected to close in the third quarter of 2010, subject to customary closing conditions.
The Portfolio comprises one property located in Richelieu near Montreal and one property located in Levis, a suburb of Quebec City. The properties are newly constructed, in 2008 and 2009, respectively.
Both properties are occupied by CSSS (Centres de Santé et de Services Sociaux), a provincial government agency that provides public health and social services from the buildings through, in part, the operation of a CLSC clinic. The property in Levis will also be occupied by SIQ (Société Immobilière du Québec), the real estate management arm of the Quebec government who will take occupancy in December 2010. The three leases have an average remaining lease term of approximately 12.7 years.
The acquisition of this Portfolio is consistent with the REIT's strategy to target select major markets and establish a significant presence in markets where the REIT operates. This portfolio includes the REIT's third asset in Quebec City and the ninth asset in the Greater Montreal area.
The total purchase price is expected to be approximately $21.1 million, subject to adjustments, which represents approximately an 8% capitalization rate applied to the annual net operating income from the property, as of December 1, 2010 when the third and final tenant takes occupancy. NorthWest expects to assume the vendor's existing mortgage (maturing in 2014, with a current balance of approximately $13.3 million at a fixed rate of 4.91%). The REIT's equity investment will be funded from existing resources. The acquisition is expected to be immediately accretive.
This investment will be the REIT's second acquisition since its initial public offering ("IPO"). In the REIT's offering prospectus dated March 16, 2010 (the "Prospectus") in respect of the IPO, the REIT outlined its strategic vision and plans for external growth and further consolidation of private sector ownership of medical office buildings and healthcare real estate in Canada. The REIT believes that the acquisition of this portfolio will further solidify its market leadership in this asset class and its position as "Canada's Healthcare Landlord".
About NorthWest Healthcare Properties Real Estate Investment Trust
NorthWest Healthcare Properties Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established under the laws of the province of Ontario. The REIT holds a portfolio of 46 income-producing properties, with a focus on medical office buildings and healthcare real estate, comprising approximately 2.8 million square feet of gross leasable area located in British Columbia, Alberta, Ontario, Québec, Nova Scotia and New Brunswick.
This press release may contain forward-looking statements with respect to the REIT, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward-looking words such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", or "continue" or the negative thereof or similar variations. The REIT's actual results and performance discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in the Prospectus and the risks and uncertainties set out in the Management Discussion and Analysis dated May 14, 2010 for the Quarter ending March 31, 2010, which are available on www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release, and, except as expressly required by applicable law, the REIT assumes no obligation to update such statements.
"Capitalization rate" and "Net operating income" (or NOI) are not measures recognized under Canadian generally accepted accounting principles ("GAAP") and do not have any standardized meanings prescribed by GAAP. Capitalization rate and NOI are presented in this press release because management of the REIT believes that these non-GAAP measures are relevant in interpreting the purchase price of the property being acquired. Capitalization rate, and NOI, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to capitalization rate and NOI reported by such organizations.
For further information: Mike Brady, Senior Vice President, NorthWest Healthcare Properties Real Estate Investment Trust, (416) 366-2000 ext. 243, or www.nwhp.ca