Joint venture purchases Kanata apartment building

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A recently constructed 152-unit apartment building in Kanata has been purchased for $48.7 million, or $320,000 per suite, as part of a three-way deal that involves companies from across the country.

Halifax-based Killam Properties announced Tuesday it has entered a joint venture with Toronto-based KingSett Capital and the Alberta Investment Management Corporation (AIMCo) to purchase Kanata Lakes Apartment II.

Under terms of the deal, Killam will own 50 per cent of the building and will issue $7 million worth of its shares to KingSett and AIMCo, with proceeds from the private placement used to partially fund Killam’s share of the purchase.

Once the deal is completed by the end of September, KingSett and AIMCo will own 10.8 per cent of Killam’s shares.

“We welcome both KingSett, one of Canada's most successful private equity investors in real estate, and AIMCo, one of the largest institutional investment managers in Canada, as JV partners, and strategic shareholders,” Killam’s president & CEO Philip Fraser said in a statement. “This relationship will enable us to increase our ownership interest in the Kanata Lakes development, from a 25 per cent interest in Kanata Lakes I to 50 per cent for Kanata Lakes II. We look forward to exploring future growth opportunities with KingSett and AIMCo.”

Killam first purchased part of Kanata Lakes I in a joint venture with Kuwait Finance House (KFH) in May 2012. KFH has since ended that relationship and left the Canadian market.

Kanata Lakes II, on Canadian Shield Avenue, is the second of a five-building complex with a shared clubhouse. The majority of the units – 129 – are one-bedroom with the rest being two-bedroom. The average unit size is 950 square feet, and the average rent is $1,785.

Leasing continues for the building, which was completed last December.