NexLiving Communities enters into definitive agreement to acquire 47 unit multi-family property in Saint John, NBJune 17 2021
- NexLiving continues to deliver on the strategy of acquiring premium properties within its key 55+ active living demographic
- Acquisition of 47 units in Saint John will grow the overall number of suites in the Company’s portfolio by approximately 9%
- Attractive cap rate of 5.1% and mortgage rate of 1.95%
- Building was constructed in 2020 and is fully leased
Halifax, Nova Scotia – June 17, 2021 – NexLiving Communities Inc. (TSXV:NXLV) (“NexLiving” or the “Company”) announced today that it has entered into an agreement to acquire Village View No. 4 Limited Partnership, whose sole asset is a 47 unit multi-family rental property located at 49 Noel Avenue, Saint John, New Brunswick (the “Noel Property” or “Acquisition”). The purchase price for the Noel Property is $12,750,000, subject to customary adjustments, which will be paid by the issuance of 3,750,000 common shares of NexLiving to the vendors at a price of $0.20 per common share, the assumption of a first mortgage in the amount of approximately $9,400,000 and the balance in cash. The Noel Property is 100% leased and generates a run-rate net operating income of approximately $650,000, which implies a capitalization rate at the time of the acquisition of 5.1%. The mortgage has a 3-year term and a fixed interest rate of 1.95%.
The Acquisition is an arm’s length transaction and is subject to customary closing conditions for transactions of this nature. The Acquisition is also subject to TSX Venture Exchange approval. NexLiving expects the closing of the Acquisition to occur on June 30, 2021.
Description of the Noel Property
The Noel Property is a high quality, 47 unit, multi-family building, constructed in 2020 and is focused on the over 55 year old active living demographic. It is located at the intersection of the Saint John and Kennebecasis Rivers in the growing Saint John NB sub-market of Millidgeville and adjacent to three of the Company’s existing properties located at 41, 50 and 51 Noel Avenue. The Noel Property offers high-end living spaces with granite countertops, stainless steel appliances, dishwasher, microwave range hood, washer and dryer, walk-in closet, ensuite bathrooms and private balconies. Common areas include gym facilities, media and community room, storage lockers as well as 31 heated underground parking spaces. The property has close proximity to a prominent transit route, Horizon’s Saint John Regional Hospital, the University of New Brunswick and an abundance of nearby shopping, dining, and recreation.
Disposition of Non-Core Properties
On April 30 and May 7, 2021, the Company completed the sale of its non-core investment properties located at 27 Edmond Street and 50 Maplewood Drive in Moncton, NB. Total proceeds of the sales amounted to $3,053,000 which resulted in a pre-tax gain on sale of approximately $40,000. The purchaser assumed mortgages of approximately $2,540,000 and the balance was received in cash.
About the Company
NexLiving continues to execute its plans to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities across Canada. The Company aims to satisfy the needs of the newly emerging 55+ resident. The demographic that has changed the world is now changing the way residential rental apartments cater to their requirements. Their desire for community, along with service, quality and convenience has led to the emergence of the 55+ active living segment. Apartments are their next “home”, after years of owning they look forward to the carefree lifestyle provided through renting in a community of their peers. NexLiving intends to consolidate this emerging market niche. The Company currently owns 502 units in New Brunswick and Ontario. NexLiving has also developed a robust pipeline of qualified properties for potential acquisition. By screening the properties identified to match the criteria set out by the Company (proximity to healthcare, amenities, services and recreation), management has assembled a significant pipeline of potential acquisitions for consideration by the Company’s Board of Directors.
This news release contains forward-looking statements relating to the future operations of NexLiving and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the future plans and objectives of NexLiving Communities Inc, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from NexLiving Communities Inc.’s expectations include other risks detailed from time to time in the filings made by NexLIving Communities Inc. with securities regulators.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of NexLiving Communities Inc. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and NexLiving Communities Inc. will only update or revise publicly the included forward-looking statements as expressly required by Canadian securities law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
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Chief Executive Officer