Minto Apartment Real Estate Investment Trust is providing more than $50 million in financing for a subsidiary of Minto Properties to develop a multi-residential property in New Edinburgh.
The REIT says it will contribute up to $51.4 million to the project, which will see its sister firm construct a nine-storey building with about 230 rental suites at a one-acre site on Beechwood Avenue.
Minto Apartment REIT said the units are expected to range from studio apartments to two-bedroom suites, adding the development will also include about 6,000 square feet of ground-floor retail space.
Under the deal, the REIT will loan Minto Properties the money to build the project at an annual interest rate of six per cent. Once the property is ready for occupancy – expected to be in the fourth quarter of 2024 – the REIT will have the option to purchase the development at a five per cent discount on its appraised fair market value.
It’s the third time Minto Apartment REIT has entered into such a financing arrangement with Minto Properties, following the Fifth + Bank project in the Glebe and a development in the Vancouver area.
“Like those transactions, this one provides the REIT with preferential access to a new, high-quality purpose-built rental property in an attractive urban location,” Minto Apartment REIT chief executive Michael Waters said in a statement.
“The financing structure insulates the REIT from development and construction risks, while we earn an attractive return during the development period. This transaction again highlights the unique benefit of the REIT's relationship with the Minto Group.”
Spun off from the Minto Group in 2018, Minto Apartment REIT owns 29 multi-residential properties in Ottawa, Toronto, Montreal, Calgary and Edmonton with more than 7,200 apartment units. Minto Properties continues to retain a majority ownership stake in the trust.