True North Apartment REIT has agreed to acquire a portfolio of 26 properties comprising an aggregate of 2,076 suites, currently owned and operated by Blue-Starlight LP, an entity controlled by Daniel Drimmer. The properties are located in Ontario, New Brunswick and Nova Scotia and were originally acquired by Blue-Starlight in connection with the privatization of TransGlobe Apartment Real Estate Investment Trust, which was completed on June 29, 2012.
The REIT will acquire the property portfolio by acquiring control of Blue-Starlight for the price of $138.95 million. This transaction will more than double the number of rental suites under management from 1,657 to 3,733 units.
“We are very pleased with this strategic acquisition which will further develop our national footprint by expanding into Nova Scotia and New Brunswick and significantly increase our presence in the Province of Ontario. This is a logical move for us to enhance our platform in markets with significant upside potential. One of our stated goals is to expand and further diversify our portfolio in high-growth markets across Canada,” said Daniel Drimmer, Chair of the Board of Trustees of the REIT. “This represents a unique opportunity for the REIT to take advantage of a high quality portfolio with below market average rent of $686 per suite which is being purchased at an attractive price per suite of approximately $67,000, well below replacement cost. Over time, we expect to reduce operating costs, streamline marketing and drive rental growth, thereby providing long-term unitholder value.”