News & Press

- REIT Has Option to Acquire Property Following Stabilization at a 5% Discount to Market Value -

OTTAWA, ON, April 29, 2021 /CNW/ - Minto Apartment Real Estate Investment Trust ("the REIT") (TSX: MI.UN) today announced an agreement to provide up to $51.4 million in financing (the "Financing") to a subsidiary of Minto Properties Inc. ("MPI") to develop a residential site in Ottawa, Ontario ("Beechwood"). Beechwood comprises approximately one acre of land fronting Beechwood Avenue in New Edinburgh, one of Ottawa's most desirable urban main streets and neighbourhoods.

The Financing will bear interest at 6% per annum, which will accrue and be payable in full on the maturity of the loan. On stabilization of the property, which is expected in the fourth quarter of 2024, the REIT will have the exclusive option to purchase Beechwood at a 5% discount to its then-appraised fair market value. The Financing will be accretive to the REIT's AFFO per unit during the development period and accretive to the REIT's NAV upon an exercise of its purchase option.

The Beechwood development is consistent with the REIT's strategy of growing its institutional quality portfolio of urban multi-residential assets in Canada's six major markets. Beechwood has an attractive location with diverse amenities, a strong retail presence and a Walk Score of 84. Much of the REIT's growth strategy will be through development and intensification, lowering the average age of the portfolio and reducing associated capex requirements. Subject to the outcome of final rezoning and site plan approval, Beechwood is expected to be a 9-storey building with approximately 229 rental suites comprising approximately 153,000 square feet and up to three ground floor retail units comprising approximately 6,000 square feet. Suites are expected to range in size from 463 square foot studios to 1,076 square foot two-bedrooms plus den.

"This is the third investment financing transaction that we have entered into with MPI, following the Fifth + Bank project in Ottawa and the Lonsdale Square project in Vancouver," said Michael Waters, Chief Executive Officer of the REIT. "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. 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."

The initial advance under the Financing of $9.1 million was made on April 29, 2021 and the balance of the Financing will be advanced as the development progresses. Construction of Beechwood is expected to commence in early 2022 with stabilization of the project scheduled for late 2024. The REIT intends to fund the Financing through draws on its revolving credit facility. The Financing is secured by a mortgage on the property and is guaranteed by MPI. The Financing will be subordinate to senior construction financing.

MPI is a related party to the REIT. Accordingly, the terms of the Financing were reviewed, considered and approved by a committee of independent trustees of the REIT.

About Minto Apartment Real Estate Investment Trust

Minto Apartment Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario to own income-producing multi-residential properties located in urban markets in Canada. The REIT owns a portfolio of high-quality income-producing multi-residential rental properties located in Toronto, Montréal, Ottawa, Calgary and Edmonton. For more information on Minto Apartment REIT, please visit the REIT's website at: https://www.mintoapartments.com/.

Forward-Looking Information

This news release may contain forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the completion of the transactions contemplated in this news release in the manner anticipated, and the factors discussed under "Risk and Uncertainties" in the REIT's 2020 Management's Discussion and Analysis dated March 11, 2021 (the "2020 MD&A"), which is available on SEDAR+ (www.sedarplus.ca). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

Non-IFRS Financial Measures

This news release contains financial measures that are not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. The REIT believes that AFFO is an important measure of operating performance and NAV is an important measure of the value of the REIT. These measures are not defined by IFRS and do not have standardized meanings prescribed by IFRS, and therefore should not be construed as an alternative to IFRS measures. See the REIT's 2020 MD&A for further discussion of these non-IFRS financial measures and reconciliations to the nearest IFRS measures.

SOURCE MINTO Real Estate Investment Trust