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Northview Apartment REIT to acquire 6-apartment portfolio for C$152M

Northview Apartment REIT agreed to acquire a six-property apartment portfolio for C$151.8 million from Starlight Group Property Holdings Inc. affiliates.

The residential real estate investment trust will fund the transaction through the issuance of C$15 million in class B limited partnership units to Starlight at C$26.20 per share, C$80.1 million in cash and C$56.7 million of new and assumed mortgage debt, which will have a weighted average interest rate of about 3.1% per year and mature in about six years.

The REIT also plans to sell 4.2 million trust units at C$26.20 per share for gross proceeds of about C$110 million, in a bought-deal offering expected to close on or around June 25. The transaction is expected to close after completion of the offering.

The 623-unit portfolio is in Ontario and Nova Scotia.

The syndicate of underwriters for the offering, which is co-led by CIBC Capital Markets and Scotiabank, has been granted a 30-day, 630,000-unit overallotment option.

Proceeds from the offering will be used in part to fund the acquisition and repay a portion of the REIT's credit facilities. Northview expects to complete additional mortgage financing following the close of the acquisition in order to fund future and current developments, value creation initiatives, acquisitions and for working capital.