Mr. Dale Noseworthy reports

KILLAM PROPERTIES INC. ANNOUNCES $35 MILLION IN ACQUISITIONS

Killam Properties Inc. has made three acquisitions totalling $35-million, located in Ottawa, Moncton and Halifax.

On March 14, 2014, Killam acquired two adjacent properties in Ottawa: 50 Selkirk St., a 75-unit building, and 350 Mayfield Ave., a 61-unit building. The average rent of the combined 136 units is $723 per month, with rental increase opportunities expected following capital upgrades. The combined purchase price was $12.5-million ($92,000 per unit) and was satisfied with cash. A CMHC-insured (Canada Mortgage and Housing Corporation) mortgage for $7.8-million is expected to be placed on the properties during the second quarter.

On Feb. 21, 2014, Killam acquired 65 Bonaccord St., a 35-unit building located in downtown Moncton. The steel and concrete building was constructed in 2004, and includes many amenities, including a common room, fitness centre, underground parking and high-end finishes. The average rent is $930 per unit. The purchase price of $3.9-million ($112,000 per unit) is well below replacement cost. A new 10-year CMHC-insured mortgage of $2.3-million at 3.48 per cent has been arranged and will be financed by the end of the month.

Killam has also agreed to acquire an 83-unit luxury apartment building located at 300 Royale Blvd. in Halifax for $18.6-million ($224,000 per unit). The four-storey concrete building is located adjacent two Killam buildings, 100 and 200 Royale, acquired in 2011 and 2013, respectively. The three buildings together create a community of 247 new, condo-quality apartment units with a shared courtyard. Completed in November, 2013, 300 Royal is in its initial lease-up, and the acquisition includes a rental guarantee of 95-per-cent occupancy through to April, 2015. The building includes underground parking, a social room and a fitness centre. The average rent of $1,550 per unit reflects the building's spacious units, which include six appliances and high-end finishes. The closing is scheduled for April 15, 2014, and the purchase price is expected to be satisfied with a new 10-year CMHC-insured mortgage of $13-million at 3.5 per cent and the balance in cash.

"We are pleased to add these properties to our portfolio," noted Philip Fraser, Killam's president and chief executive officer. "The three acquisitions will have a weighted average cap rate of 5.2 per cent. The two properties in Atlantic Canada are condo quality, and complement our existing portfolios in Moncton and Halifax. The buildings in Ottawa will contribute to our growth in that market and increase our unit count to 628 units."

We seek Safe Harbor.