True North to buy 29 apartment properties in $286-million deal with its chairman

TORONTO – True North Apartment REIT (TSX:TN) has agreed to nearly 3,000 apartment suites in a total of 29 properties in a $286-million deal with entities controlled by the chairman of its own board of trustees.

The portfolio includes a variety of high-rise, mid-rise and low-rise apartment buildings and town houses in a number of Alberta and Ontario communities including Calgary and Lethbridge, Alta., as well as Kitchener and Guelph, Ont.

The proposed deal requires prior appoval by a majority of the REIT’s unitholders, excluding those controlled by True North chairman Daniel Drimmer, who is a major investor in the real estate investment trust.

True North says it will issue about $80 million worth of equity to the vendors as part of the deal.

The rest of the acquisition will be funded by a combination of $12.9 million in cash raised through a convertible debt offering, $65.6 million of assumed existing mortgage debt and $127.5 million of new mortgage debt.

A vote by True North’s unitholders is scheduled for June 27 at its annual meeting.