Morguard North American Residential REIT Acquires US$633 million of U.S. Multi-Family Assets

MISSISSAUGA, ON, Jan. 9, 2013 /CNW/ - Today, Morguard North American Residential Real Estate Investment Trust (TSX: MRG.UN) (the "REIT") announced that it has finalized two separate agreements to acquire a total of 6,474 multi-family residential units in the U.S. for gross consideration of US$633 million.

The first agreement is for the purchase, through a subsidiary, of 12 multi-family residential apartment and townhome complexes comprised of 3,752 units located in Dallas, Texas, Denver, Colorado, Tampa, Florida, Raleigh, North Carolina and Atlanta, Georgia.  The acquisition is expected to close on or about March 31, 2013 and conditions, other than customary closing conditions and certain consents, have now been satisfied.

The 12 properties are best-in-class low rise, enclave, garden-style walk-ups with surface and covered parking, leasing centers and amenity packages with a weighted average age from construction of 11+years (featuring 2,200 units built post 2002).

Additionally, the REIT has finalized an agreement to purchase, through a subsidiary, 12 multi-family residential apartment and townhome complexes comprised of 2,722 units located in Pensacola, Florida, Mobile, Alabama and south-west Louisiana from Morguard Corporation. The acquisition is expected to close during the first quarter of 2013 and conditions, other than customary closing conditions and certain consents, have now been satisfied.

The properties are typical enclave three-storey garden style walk-ups with up-graded suites, surface and covered parking, leasing centers and amenity packages; the properties are generally in excess of 15 years old.

Combined, the two portfolios, will be purchased for gross consideration of approximately US$633 million (excluding closing costs and asset performance bonus'), financed through (i) the assumption of mortgages in the principal amount of approximately US$400 million with a weighted average interest rate of 4.5% and a weighted average maturity of 4.5 years; and (ii) other available sources of funds.

After closing both transactions, the REIT will own interests in a total of 12,850 units in Canada and the U.S valued at approximately $1.5 billion.

"These investments afford the REIT the opportunity to acquire a portfolio of institutional quality assets with a known operational history, solid yield and high quality physical plant," said Rai Sahi, Chief Executive Officer, Morguard North American Residential REIT. "This acquisition will contribute to the REIT on an accretive basis and is indicative of our U.S. growth strategy."

About Morguard North American Residential Real Estate Investment Trust

Morguard North American Residential REIT is an unincorporated, open-ended real estate investment trust which owns, through a limited partnership, interests in a portfolio of 14 Canadian residential apartment buildings and six U.S. residential walk-up garden communities consisting of 6,376 residential suites that are located in Ontario, Alberta, Louisiana and Florida.

SOURCE: Morguard North American Residential Real Estate Investment Trust

K. (Rai) Sahi
Chief Executive Officer
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Beverley G. Flynn
General Counsel & Secretary
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