Killam Apartment Real Estate Investment Trust : REIT Announces Agreement To Acquire a $190.5 Million Portfolio in Ontario and a $95 Million Bought Deal Public Offering of Trust Units

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HALIFAX, NS, May 23 / PRNewswire / – The Killam Apartment REIT (“Killam” or the “REIT”) (TSX: KMP.UN) is pleased to announce that it has agreed to build an 11-building building of four properties to acquire portfolio of a total of 785 units in Kitchener and Waterloo, ON (the “KW Portfolio”) for approximately USD 190.5 million (approximately USD 243,000 per door). After the acquisition of the KW portfolio has been completed, the REIT’s Ontario portfolio will increase significantly to 3,342 units, with a further 485 units under development.

The REIT also announced today that it has entered into an agreement with a consortium of subscribers led by RBC Capital Markets to purchase 5,135,200 trust units (the “Units”) at $ 18.50 per unit for gross proceeds of 5,135,200 trust units to spend to the public $ 95,001,200 (the “Offer”).

Killam has granted the Underwriters an over-allotment option to cover the Underwriters’ overallocation position for an additional 770,280 shares which can be exercised up to 30 days after the closing of the offering.

Killam intends to use the net proceeds from the offering to fund a portion of the purchase price for the KW portfolio, to repay any outstanding amounts on its credit facility (currently approximately $ 51 million outstanding balance) and, if necessary, to fund the balance in future acquisitions and Developments and for general trust purposes.

The KW portfolio is currently 98% occupied and consists of a mix of Bachelor (9 units), 1-bedroom (130 units), 2-bedroom (631 units) and 3-bedroom (15 units) units with an average unit size of approximately 853 square feet. The average in-place rent is approximately $ 1,200 ($ 1.41 per square foot). Killam expects to complete the acquisition of the KW portfolio on June 30, 2021 and finance the purchase with a combination of first mortgage financing based on a mortgage lending value of approximately 60-65% and the balance using the net proceeds from the offering.

Upon completion of the offering and the use of the proceeds, Killam expects access to available capital through its credit facilities of approximately $ 110 million.

“We are excited to expand our portfolio in the Kitchener and Waterloo markets,” said Philip Fraser, President and CEO. “This investment will be a valuable addition to our portfolio based on the attractive locations, alignment with our existing asset base, and the ability to grow operating income through unit repositioning and energy-saving investments. Including the KW portfolio, Killam will be $ 256 million. Dollar have completed acquisitions since the beginning of the year, 94% of them outside of Atlantic Canada. “

The shares issued as part of the offer are being offered in accordance with the final short-form base shelf prospectus of the REIT dated December 2, 2019. The terms of the offering are set out in a supplement to the prospectus which is required to be filed with the securities regulators in each of the provinces of Canada and may also be offered as a private placement in the United States. The offering is expected to close on or about May 31, 2021 and is subject to customary closing conditions, including approval by the Toronto Stock Exchange.

This press release is not an offer of securities for sale in the United States. The shares being offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) and state securities laws. Accordingly, the units may not be offered or sold in the United States without registration or an exemption from the registration requirements of the US Securities Act.

About Killam Apartment REIT

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of the largest residential rental companies in Canada. He owns, operates, and develops a $ 3.9 billion portfolio of homes and prefabricated housing communities. Killam’s strategy to increase value and profitability is centered on three priorities: 1) increasing income from existing operations, 2) expanding portfolio and geographical diversification through acquisitive acquisitions with an emphasis on newer properties, and 3) developing high quality properties at its core Markets.

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may be forward-looking statements. In some instances, forward-looking statements may be identified by the use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “intend” or the negatives of those terms or other comparable terminology and the discussion of strategies that involve risks and uncertainties. These forward-looking statements may include, among other things, statements about the size, the expected completion and terms of the offer, the expected use of the net proceeds of the offer, the filing and content of an addendum to the prospectus and the planned acquisition of the KW portfolio (including the terms and conditions and Details, sources of funding and expected closing), the impact of such a planned acquisition on the REIT’s portfolio in Ontario, the REIT’s expected access to capital and liquidity, and the expected year of the REIT year-to-date acquisitions. These forward-looking statements are based on our expectations, estimates, prognoses and forecasts, which we believe to be appropriate at the current point in time. Such forward-looking statements involve risks, uncertainties and other factors that could cause the actual results, performance or accomplishments of Killam to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements, including the effects of the evolving COVID-19 pandemic on the REIT’s performance; the effectiveness of measures to mitigate the effects of COVID-19 and any variants thereof; Competition; national and regional economic conditions; and the availability of capital to fund further investment in Killam’s business. More detailed information on these and other risks and uncertainties can be found in our most recently submitted annual information form as well as in the Management Discussion and Analysis, both of which are available at www.sedar.com. Readers are cautioned not to place undue reliance on such forward-looking statements. Furthermore, any forward-looking statement speaks only as of the date on which that statement is made and should not be relied upon as reliance on any other point in time. Except as required by law, Killam undertakes no obligation to update such forward-looking statements.

SOURCE Killam Apartment REIT

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