Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX:CAR.UN) has bought two apartment properties in Calgary totalling 405 residential suites. The purchase price for the two properties was approximately $68.4 million, or about $160,000 per "door".
CAPREIT assumed existing mortgages of $31.0 million with a weighted average interest rate of 3.38% as part of the purchase.
The first property is a high rise mid-tier building with 152 one and two-bedroom suites in downtown Calgary. The property is a low rise mid-tier three-storey building comprised of 253 one, two and three-bedroom apartments, many with fenced yards, located in NE Calgary. Both properties are close to public transportation and key amenities.
Calgary has become a hot spot for multi-family rentals this year, as the apartment vacancy rate has plunged to 2.5%. This is down from 3.4% a year ago and among the tightest markets in Canada.
“Rental demand in Calgary is getting support from positive migration flows as well as more young workers finding jobs. This is has helped move vacancies down,” said Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp.
“Demand for rental accommodations will continue to be sustained by the activity in Calgary’s economy and we are also not expecting to see any large net additions to supply in the near term," he added.
"We are pleased to be expanding our presence in the strong downtown Calgary market," said Thomas Schwartz, president and CEO of CAPREIT. who is predicting immediate positive cash flow from the two buildings.
