H&R REIT Announces Receipt of Final Instalment of $180 Million First Mortgage Proceeds Related to 160 Elgin Sale
TORONTO, Aug. 21, 2023 /CNW/ - H&R Real Estate Investment Trust ("H&R" or "the REIT") (TSX: HR.UN) is pleased to announce it is in receipt of the remaining $170.0 million of proceeds from the $180.0 million vendor take-back mortgage that H&R provided to Groupe Mach (the "Purchaser"), of 160 Elgin Street ("160 Elgin") at the time of the sale of 160 Elgin. The REIT intends to allocate the majority of proceeds to repay outstanding indebtedness and fund current development projects.
On April 20, 2023, H&R announced the closing of the sale of 160 Elgin for $277.0 million. 160 Elgin was H&R's only Ottawa office property, comprising 973,611 square feet in downtown Ottawa, Ontario. This sale is consistent with the REIT's strategic repositioning plan to surface significant value for unitholders, by transforming into a simplified, growth-oriented company focused on residential and industrial properties.
H&R provided the Purchaser with the $180.0 million vendor take-back mortgage secured by a first mortgage on the property, which earned interest at 6.5% per annum. The REIT received an initial instalment of $10.0 million on July 20, 2023 and has now received the remaining balance of $170.0 million, resulting in repayment in full of the mortgage. In addition, H&R provided the Purchaser with a second vendor take-back mortgage of $30.0 million bearing interest at 4.5% per annum, maturing April 20, 2028.
H&R REIT is one of Canada's largest real estate investment trusts with total assets of approximately $11.1 billion as at June 30, 2023. H&R REIT has ownership interests in a North American portfolio comprised of high-quality residential, industrial, office and retail properties comprising over 27.7 million square feet. H&R's strategy is to create a simplified, growth-oriented business focused on residential and industrial properties in order to create sustainable long term value for unitholders. H&R plans to sell its office and retail properties as market conditions permit. H&R's target is to be a leading owner, operator and developer of residential and industrial properties, creating value through redevelopment and greenfield development in prime locations within Toronto, Montreal, Vancouver, and high growth U.S. sunbelt and gateway cities.
Certain information in this news release contains forward-looking information within the meaning of applicable securities laws (also known as forward-looking statements) including, among others, statements relating to H&R's objectives, beliefs, plans, estimates, targets, projections and intentions and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts including, with respect to H&R's strategic repositioning plan, the intended sales of office and retail properties, portfolio exposure, and the use of proceeds from the sale of 160 Elgin, and. Forward-looking statements generally can be identified by words such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans", "project", "budget" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect H&R's current beliefs and are based on information currently available to management.
Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements are not guarantees of future performance and are based on H&R's estimates and assumptions that are subject to risks, uncertainties and other factors including those risks and uncertainties discussed in H&R's materials filed with the Canadian securities regulatory authorities from time to time, which could cause the actual results, performance or achievements of H&R to differ materially from the forward-looking statements contained in this news release. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements include assumptions relating to the general economy, including the effects of increased inflation; the debt markets continuing to provide access to capital at a reasonable cost, notwithstanding rising interest rates; and assumptions concerning currency exchange and interest rates. Additional risks and uncertainties include, among other things, risks related to: real property ownership; current economic environment; credit risk and tenant concentration; lease rollover risk; interest rates and other debt-related risks; development risks; residential rental risk; capital expenditure risk; currency risk; liquidity risk; risks associated with disease outbreaks; cyber security risk; financing credit risk; ESG and climate change risk; co-ownership interest in properties; general uninsured losses; joint arrangements and investment risk; dependence on key personnel and succession planning; potential acquisition, investment and disposition opportunities and joint venture arrangements; potential undisclosed liabilities associated with acquisitions; competition for real property investments; and potential conflicts of interest; unit-price risk; availability of cash for distributions; credit ratings; ability to access capital markets; tax risk; additional tax risks applicable to unitholders; dilution; unitholder liability; redemption right risk; investment eligibility; risks relating to debentures; and statutory remedies. H&R cautions that these lists of factors, risks and uncertainties are not exhaustive. Although the forward-looking statements contained in this news release are based upon what H&R believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements.
Readers are also urged to examine H&R's materials filed with the Canadian securities regulatory authorities from time to time as they may contain discussions on risks and uncertainties which could cause the actual results and performance of H&R to differ materially from the forward-looking statements contained in this news release. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of today and H&R, except as required by applicable Canadian law, assumes no obligation to update or revise them to reflect new information or the occurrence of future events or circumstances.
Additional information regarding H&R is available at www.hr-reit.com and on www.sedarplus.ca
SOURCE H&R Real Estate Investment Trust
Larry Froom, Chief Financial Officer, 416-635-7520, or e-mail [email protected]
Share this article