Marwest Apartment Real Estate Investment Trust : REIT Announces Proposed


/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

WINNIPEG, MB, Sept. 24, 2021 /CNW/ – Marwest Apartment Real Estate Investment Trust (“Marwest Apartment REIT” or the “REIT”) (TSXV: MAR.UN) is pleased to announce that it has entered into agreements, on September 23, 2021, to purchase 112 units over two adjacent multi-family residential properties (the “Element Properties“) in Winnipeg, Manitoba.

The purchase consists of 112 new-generation units, which were completed between 2019 and 2021. The Element Properties are currently 99% occupied.

“We are thrilled to be able to add to our growing portfolio with this significant acquisition that will increase our current unit count by over 40%. I’m also extremely proud of our team to have been able to act on an acquisition of this quality within only 45 days of closing our most recent equity offering.” said William Martens, CEO of the REIT.

The Element Properties

Marwest (Element) Apartments L.P. (“Element LP“) is a Manitoba limited partnership which owns two complexes comprising a total of 112 units located at 85 Fiorentino Street (“Element I“) and 30 El Tassi Drive (“Element II“) in Winnipeg, Manitoba. Element I consists of 40 units and Element II consists of 72 units.

The only material assets and liabilities of the Element LP relate to the Element Properties.  Prior to closing, the REIT will enter into assumption agreements with the lenders for the mortgages that will be in place on Element I and Element II.

Element Acquisition

The total value of the Element Properties has been set at $27,000,000  for the acquisition. As the REIT will be purchasing all of the current limited partnership units in the Element Properties, the purchase price is the value of $27,000,000 less the outstanding debt of the Element LP, which will be assumed and is anticipated to be $24,631,607, leading to a purchase price for the limited partnership units of $2,368,393.  There are no finder’s fees payable in connection with the proposed transaction.

On closing, the REIT anticipates paying $1,184,197 in cash, and issuing 1,029,736 Exchangeable Units at a price of $1.15 per unit to satisfy the approximated $2,368,393 purchase price.  The REIT will also repay $1,200,000 to the vendors for current and outstanding loans to affiliates.

Independent Trustee Review and Approval Process

The independent trustees of the REIT negotiated and approved the terms of the Element Purchase Agreements.

Independent Appraisal of Element Properties

Although the REIT was not required to obtain a formal valuation (within the meaning of Multilateral Instrument 61-101 (“MI 61-101“) and TSXV Policy 5.9) of the Element LP Units, the REIT obtained an independent appraisal of the…



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