NorthWest Healthcare Properties Reit makes acquisitions in Toronto and Ottawa
NorthWest Healthcare Properties Real Estate Investment Trust has entered into an agreement to acquire 84 per cent of 807 Broadview Avenue, a 54,720 square foot medical office condominium property in Toronto.
The purchase is expected to close in the third quarter of 2012, subject to customary closing conditions and is expected to be immediately accretive.
Located in a well-established Riverdale neighbourhood northeast of the downtown core, 807 Broadview Avenue is a recently constructed, design built, medical office condominium building that benefits from a central location and a modern design. The 45,770 square feet being acquired is 100 per cent leased on a long term basis to the Albany Medical Clinic, a large full service family health group that represents one of Canada's oldest, and one of Toronto's largest, healthcare clinics.
The purchase price will be CAD16.44m, subject to adjustments. NorthWest will assume and expects to increase and extend the vendor's existing first mortgage which, once increased and extended, will have an aggregate principal amount of approximately CAD10.5m, a weighted average interest rate of approximately CAD4.3 per cent (subject to bond rate fluctuations) and a 2022 maturity. The equity portion of the Reit's investment will be funded from existing resources. The investment will be the Reit's 13th acquisition in Toronto.
In a separate transaction, the Reit has entered into agreements to acquire a controlling interest in Smyth Medical Centre, a 35,000 square foot medical office condominium property in Ottawa. The purchases are expected to close in the third quarter of 2012, subject to customary closing conditions and are expected to be immediately accretive.
Located just east of downtown, Smyth Medical Centre (1929 Russell Road) is a premier building in the Ottawa medical office market due to its favourable location, diversified healthcare tenant mix and appealing design. The property is well-leased to primarily healthcare related uses that include pharmacy, laboratory, physiotherapy, dental and specialist physicians who benefit from the building's close proximity to the Ottawa Hospital General Campus.
The purchase price will be CAD3.5m, subject to adjustments. The condo units are being acquired free and clear of mortgages, providing an opportunity to secure longer term financing in due course. The equity portion of the Reit's investment will be funded from existing resources.
The investment will be the Reit's first acquisition in the Ottawa area and its 26th asset (including 807 Broadview Avenue) in the Province of Ontario.
In a separate transaction, the Reit has entered into a commitment letter for a new ten year CAD33m mortgage against its Sunridge Professional Centre asset in Calgary, which will provide net proceeds of approximately CAD21m to the Reit after discharge and related transaction costs associated with the existing mortgage. The mortgage loan is expected to fund in the third quarter, at which time the interest rate will be determined and fixed for the term by way of an interest rate swap arrangement, with a current indicative rate of approximately 4.0 per cent.
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