Canadian REIT Wraps Up $121M in Apartment Purchases

Toronto-based Canadian Apartment Properties Real Estate Investment Trust has closed the disposition of a group of 10 apartment communities in metropolitan Toronto and Montreal, and Niagara. TransGlobe Property Management acquired the assets, which account for an aggregate 1,478 units, for just over $121 million. CAP REIT had identified the properties as non-core assets, having maximized their value. The proceeds from the sale will be applied toward the reduction of the company’s Acquisition and Operating Facilities–through which it will continue to purchase properties in Western Canada and other thriving markets across the country–and will also be used to fund its Normal Course Issuer Bid, as well as for other general corporate activities. Demand for apartments was strong in Canada’s urban centers as well as its smaller markets last year, according to a study distributed at the 2007 Canadian Apartment Investment Conference last September by real estate brokerage and management firm Primecorp Commercial Realty Inc. The national average vacancy rate was 2.2 percent at mid-year, as per a report by commercial real estate services firm CB Richard Ellis Inc. In Montreal, the average vacancy rate, though having increased a bit over the last few years, was still at a low 2.9 percent, and Toronto’s average vacancy rate was 4 percent. It seems investors cannot get enough of the market. Sales volume had already reached $2.3 billion by mid-2007, having jumped up from $1.4 billion at the same point in 2006. And portfolio trades were hardly rare last year. Timbercreek Asset Management paid Controlex Corp. $107 million for a group of eight properties totaling 1,257 units in the Ottawa area; the three-property, 503-unit Stonebridge-Callingwood Portfolio in Edmonton fetched $76 million; and the Bitton Portfolio, consisting of three buildings with a total of 505 residences in Quebec City, sold for $45 million. CAP REIT and TransGlobe engaged in one of the largest deals of the year, with CAP REIT purchasing eight properties from TransGlobe in British Columbia and Alberta for $94.6 millionKnown as one of Canada’s largest multi-family real estate owners, CAP REIT owns interests in approximately 26,400 residential units. Additionally, the company has two land lease communities accounting for 1,233 land lease sites. Mississauga, Ont.-based TransGlobe owns and manages residential, commercial and industrial properties across Canada. The company’s residential portfolio encompasses more than 25,000 apartment units.