Thursday, June 26, 2008

InterRent Buys Ottawa Centretown Condo Building for $6.1M

InterRent Real Estate Investment Trust has completed its $6.1-million purchase of a 42-suite Ottawa Centretown apartment building.

The Toronto-based trust said it has closed the acquisition of the recently renovated class-A property of condominium quality, which was announced March 20. The building was one of four local properties InterRent had agreed to buy at the time.

"Ottawa currently represents 16% of our portfolio, and is its best-performing region, with an approximately 1.5-per-cent vacancy rate, and a 65-per-cent net operating income," said InterRent CEO Michael Newman in a statement. "The addition of a fully renovated, condominium-quality building in Ottawa's downtown, without the addition of any incremental costs, will serve to strengthen our overall operating performance."

Mr. Newman added that the company was looking to buy more properties in the nation's capital.

InterRent also announced the closing of the sale of a 68-suite, class-B apartment building in the GTA's Scarborough area for $4.65 million, the purchase of which was also announced at the same time as the Ottawa deals.

The company said it had flipped the property to an arm's-length purchaser because it "did not meet management's initial financial operating expectations, and was negatively impacting (the trust's) operating performance."

The Ottawa acquisition is being financed through the assumption of two existing first and second mortgages in the amount of $1.7 million, a vendor take-back mortgage of $1.9 million and the issuance of $360,000-worth of InterRent REIT units at $3.50 each, with the balance being paid in cash.


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