Minto Apartment REIT has sold its remaining properties in Edmonton for more than $30 million as it looks to reduce its debt.
The sale of the REIT’s last two buildings in the Alberta capital closed last Thursday, the Ottawa-based company said in a news release Monday.
The total price was $32.3 million, delivering net proceeds of $7 million after mortgage and commission costs were deducted, Minto said. The REIT said it plans to use the funds to repay a portion of its variable-rate revolving credit facility.
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The two properties contained a total of 190 suites.
“The sale of these properties is consistent with our capital recycling strategy,” Minto REIT president and chief executive officer Jonathan Li said in a statement. “In total, the REIT has completed $42.2 million of dispositions this year and has utilized the proceeds to reduce variable-rate debt, furthering our objective of enhancing cash flow per unit.”
Minto REIT’s portfolio now includes 29 properties with a total of about 8,000 suites in Ottawa, Toronto, Montreal and Calgary.
The sale comes amid Minto REIT’s effort to refinance mortgages on several of its properties, a move it estimates could generate between $55 million and $65 million in incremental proceeds.
Minto said last spring it was replacing a variable-rate mortgage on its Niagara West property in downtown Toronto with a fixed-rate mortgage and was in the process of refinancing its variable-rate mortgage at The International, a building in downtown Calgary, with a new fixed-rate mortgage.
Minto also said it has submitted applications to the Canada Mortgage and Housing Corp. to refinance nearly $137 million of maturing variable-rate mortgages at other properties with fixed-rate mortgages.
The company said it expected the switch to result in “incremental proceeds” of between $60 million and $70 million, which it plans to use to repay a portion of its revolving credit facility.
In its most recent earnings report, Minto said its funds from operations – a key measure of cash flow – for the third quarter ending Sept. 30 were $15.7 million, virtually unchanged from a year earlier.
Overall revenues totalled $39.8 million, up from $37.8 million in the same period last year thanks to higher average rents and lower vacancy rates in the REIT’s buildings.
Minto’s unit price was down six cents to $15.46 in late-morning trading Monday on the Toronto Stock Exchange.
