Minto Apartment REIT has acquired interests in 753 multiresidential rental suites at two downtown properties, the new Niagara West tower in Toronto and The International in Calgary, for $201 million.
Minto (MI-UN-T) is paying $114.5 million to acquire a 28.35 per cent managing interest in the Niagara West building and $86.5 million for a 100 per cent interest in The International, the trust announced on Monday.
“This is a unique opportunity to acquire institutional-quality assets in highly desirable downtown markets,” said Michael Waters, Minto’s chief executive officer, in the announcement. “These acquisitions increase our scale to 8,277 suites, reduce the average age of the portfolio by 2.6 years, increase our exposure to Toronto to 33 per cent and improve operating efficiencies in the management of our Calgary portfolio.”
The acquisitions increase Minto Apartment REIT’s suite count by about 10 per cent.
Both were acquired from limited partnerships involving Minto Properties Inc. (MPI), which was involved in the development, refurbishment and lease-ups of the properties.
“The acquisitions also underline the value of our relationship with the Minto Group, through which we were able to acquire these premier assets in off-market transactions,” Waters said in the release.
The Niagara West property
Niagara West comprises 14- and a 19-storey buildings, completed in 2020, containing 501 apartments, 52,594 square feet of retail at grade anchored by a Farm Boy grocery store and 379 parking stalls. They’re located in a mixed-use urban neighbourhood with access to public transportation, walking paths and green space (Walk Score of 91 and Bike Score of 95).
Suites range from bachelors to three-bedroom townhomes. Amenities include a 24/7 concierge, fitness centre, sauna, steam room, outdoor rooftop pool and urban garden, rooftop off-leash dog run, games room and a party room.
The average rental rate in Niagara West is $2,573 per month. The building is 95 per cent occupied.
The remaining 71.65 per cent in Niagara West will be acquired by an Canadian institutional investment manager, which is not named and is the majority owner of the vendor.
The International in Calgary
The International was originally constructed in 1970 as an apartment building and later operated as a hotel.
The property was acquired in 2015 and converted to luxury apartments with upgrades to infrastructure, common areas and its amenities. All 247 suites were renovated and five penthouse units created in former amenity space.
The building also has 2,700 square feet of commercial space.
The International has direct access to the Plus 15 Skywalk, a pedestrian network throughout Calgary’s central business district via an 18-kilometre, weather-protected, above-ground walkway.
The upgraded apartments offer quartz countertops, stainless steel appliances, in-suite laundry, air conditioning and balconies. Amenities include a 24/7 concierge, full fitness centre with spin studio, indoor swimming pool, hot tub, sauna, gaming area, movie theatre, private lounge and a dog washing station.
The average rental rate is $1,699 per month and the building is 99 per cent occupied.
Minto Apartment REIT’s financing of the acquisitions
Minto Apartment REIT said the $114.5 million for Niagara West will be satisfied by a $2.6 million cash payment, $46.2 million of existing mortgage financing and the issuance of 2,985,956 Class B limited partnership units at a price of $22 per unit to MPI’s subsidiary following closing.
The $86.5 million for The International acquisition will be paid via a $24.3 million cash payment and the assumption of $62.2 million of existing mortgage financing.
The trust plans to refinance both properties with CMHC-insured financing.
The REIT owns and operates a portfolio of high-quality income-producing multiresidential rental properties located in Toronto, Montreal, Ottawa, Calgary and Edmonton.