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NexLiving Communities Inc. has announced it will sell a $19.4-million property in Moncton, N.B. to lower its debt, as it prepares to close a transformative transaction with Devcore.
Based in Halifax, NexLiving sold a seven-building complex in east Moncton at 145-155 McLaughlin Rd. with buildings that range from two to four storeys and six to 24 units. The McLaughlin Estates property totals 127 apartments.
The complex is close to the University of Moncton campus.
The transaction is at a five per cent premium to the property's IFRS fair value as of March 31, 2024, NexLiving says in a release. The company expects approximately $4.7 million in cash proceeds that will go to reducing its debt and decrease its ratio of net debt to gross book value by approximately 300 basis points.
The transaction is expected to close on June 24. NexLiving does not name the prospective buyer of the property.
As NexLiving concludes the sale, it is also continue to work on closing a major acquisition of 16 multifamily properties from Gatineau-based Devcore that will significantly expand its geographic reach and portfolio.
“Looking ahead, our priority remains the closing of the highly accretive and transformational Devcore transaction, which remains on track for closing by the end of the second quarter,” Stavro Stathonikos, president and CEO of NexLiving, said in its Q1 financials.
About 145-155 McLaughlin Rd.
The seven properties at 145-155 McLaughlin Rd. were bought by NexLiving, then named ViveRE Communities Inc., in a transaction that closed in April 2020.
The investment for 145-155 McLaughin Rd. made in 2020 was $14.7 million.
Details about the properties, such as sizes of the units, is limited, but websites for 149, 151 and 155 McLaughlin Rd. show two-bedroom suites are available for rent.
The close distance to downtown Moncton and the University of Moncton are listed as features, as well as cafes and shopping.
NexLiving prepares for Devcore acquisition
The decision to sell the Moncton complex comes as NexLiving progresses on buying a $224-million portfolio from Devcore.
In January, NexLiving revealed an agreement with Devcore to acquire 16 multifamily properties of 991 apartments in a transaction financed by a share issuance and transfer to Devcore, as well as the assumption of mortgage debt.
NexLiving’s multifamily portfolio would almost double from 1,166 apartments to 2,157 units, and the company would own apartments outside of primarily Moncton to Ottawa, Saint John and other parts of Ontario and Quebec.
In exchange, NexLiving would issue approximately 16.5 million shares to Devcore worth 49 per cent of the firm, valued at approximately $31.7 million. The company would additionally assume approximately $166 million of mortgage debt.
On the debt side, NexLiving held a net debt to gross book value of 68.4 per cent in Q1, a decrease of 22 basis points from 68.6 per cent in Q4 2024. The McLaughlin Estates sale, based on NexLiving's estimate, would reduce that to 65.4 per cent -- prior to the Devcore transaction.
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