Minto Apartment REIT has announced a substantial $51.4 million in financing for a new 229-suite multi-residential development in Ottawa.
At an interest rate of 6% per annum, the funds will be provided to a subsidiary of Minto Properties Inc. (MPI) to develop the Beechwood residential site in Ottawa. The development will arise on a roughly one-acre parcel fronting Beechwood Avenue in New Edinburgh, which Minto described as one of Ottawa’s “most desirable urban main streets and neighbourhoods.”
An initial advance of $9.1 million in financing was made on April 29, while the balance will be fulfilled during the course of the development.
“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,” the company said. “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.”
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Beechwood is slated to be a nine-storey building offering approximately 153,000 square feet and up to three ground floor retail units, subject to final rezoning and site plan approval. Suites will range from 463 sq. ft. studios to 1,076 sq. ft. two-bedroom-plus-den units.
“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 Minto Apartment REIT. “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.”
Construction of Beechwood is expected to begin in early 2022, with operations scheduled for late 2024.