Minto Apartment Real Estate Investment Trust took an earnings hit in the first quarter as demand for rental suites dipped in the wake of stricter measures aimed at curbing the spread of the novel coronavirus, the company said.
The REIT said it generated funds from operations of $10.9 million for the three-month period ending March 31, down from $12.1 million a year earlier. The average occupancy rate of unfurnished apartments in Minto’s buildings fell to 91.1 per cent compared with nearly 97 per cent a year earlier, a drop the company blamed on the economic fallout from the pandemic.
As a result, the average monthly rent across the REIT’s portfolio rose just 1.9 per cent year-over-year to $1,630.
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Minto Apartment Real Estate Investment Trust is providing more than $50 million in financing for a subsidiary of Minto Properties to develop a multi-residential property in New Edinburgh.
The REIT says it will contribute up to $51.4 million to the project, which will see its sister firm construct a nine-storey building with about 230 rental suites at a one-acre site on Beechwood Avenue.
Minto Apartment REIT said the units are expected to range from studio apartments to two-bedroom suites, adding the development will also include about 6,000 square feet of ground-floor retail space.
Under the deal, the REIT will loan Minto Properties the money to build the project at an annual interest rate of six per cent. Once the property is ready for occupancy – expected to be in the fourth quarter of 2024 – the REIT will have the option to purchase the development at a five per cent discount on its appraised fair market value.
Minto Properties will construct the nine-storey building with about 230 rental suites at a one-acre site on Beechwood Avenue, and the REIT will have the option to purchase it at a discount.
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