Re: new reit (TN.UN)
Good question.....but note that the apartments they purchased are in Quebec.
But apartments have to be self-sustaining on affordable rents....as opposed to condos where purchasers often count on capital appreciation to cover their costs and/or provide an investment return. I don't know much about TN.UN....but the reading I have done suggests it is certainly worth a close look and a small position. Here is what prompted the issue @ $3.92:
True North Apartment Real Estate Investment Trust (the "REIT") (TSX VENTURE:TN.UN) announced today that it has agreed to acquire a portfolio of residential properties (the "Acquisition Properties") comprising 127 buildings that contain 1,528 residential suites and are located in the borough of Saint-Laurent, Montreal, Quebec (the "Acquisition").
The purchase price for the Acquisition Properties of approximately $121 million implies a capitalization rate of approximately 7% and will be satisfied by a combination of approximately $37 million in cash and the assumption of approximately $58 million aggregate principal amount of CMHC insured mortgage debt and approximately $26 million aggregate principal amount of vendor take-back mortgage debt. The assumed mortgages have an effective interest rate of 2.75% and an expected weighted average term to maturity of approximately 3 years. The Acquisition Properties have had an average occupancy rate of approximately 97% over the last 10 years.
The REIT's management team has demonstrated a proven track record for growth:
President, Chief Executive Officer & Trustee Founded TransGlobe Investment Management Ltd., TransGlobe Property Management Services Ltd. and TransGlobe Apartment Real Estate Investment Trust. Expanded TransGlobe Investment Management Ltd.'s original portfolio of seven properties to a portfolio exceeding 25,000 residential suites (including those owned by TransGlobe Apartment Real Estate Investment Trust, as at September 1, 2011). Chairman of TransGlobe Apartment Real Estate Investment Trust between May 2010 and August 2011. Founded Starlight Investments Ltd in September 2011. Daniel has completed over $6 billion of real estate transactions in last 5 years.
Chief Financial Officer & Secretary Executive Vice-President and CFO of Leisureworld Senior Care Corporation from 2006 until 2011. Significant senior management experience in finance, strategic planning, mergers and acquisitions and corporate governance and played a critical role in Leisureworld's initial public offering in March 2010. Chief Financial Officer of NBS Technologies Inc. (at the time a TSX-listed company and since privatized). Between 2000 and 2005, served in a variety of increasingly senior corporate development and financial management roles at Tyco International Ltd., and prior to that from 1995 to 2000, provided strategic corporate finance and mergers and acquisitions advice to clients at KPMG LLP.