- What Trillium Acquisition Corp. will buy three rental properties in Calgary valued at $84.7m
- Why The move is part of a business combination agreement that will also see the company operate under a new name
- What’s next The company is evaluating other new Class-A buildings in Calgary for possible purchase
Trillium Acquisition Corp. agreed last week to buy three new multifamily properties in Calgary — the first investments for the capital pool company, which aims to purchase more such properties in the city.
The total purchase price is $84.7m, with each property worth about $28m. Trillium will pay $14.5m in cash and 118,920,000 common shares of Trillium to acquire the properties from three private businesses — Bankview1827 Investment Corp., Capitol Hill 1426 Development Corp. and Sunalta 1509 Development Corp.
As part of the deal, Trillium will amalgamate with the sellers and will be renamed, likely to Distinctive Quality Living Residential.
The properties, built by Brava Development Corp., are: The Nimmons, an 84-unit apartment building and a heritage house converted to a law office at 1420 19 Avenue SW; The Cunningham, a 41-unit building at 1509 15 Avenue SW; and The Wilderness Ridge, a 24-townhouse complex at 1426 23 Avenue NW.
Going forward, Trillium will focus on new Class-A multifamily properties in Calgary, which has become increasingly attractive to investors due its relatively more affordable prices and growing population. Trillium is looking at other properties in the city, particularly those that meet environmental sustainability standards and include affordable housing. No contracts are in place as of yet.
The pending acquisitions are being financed through the Canada Mortgage and Housing Corp.’s MLI Select mortgage loan insurance program, which offers incentives based on affordability, accessibility and energy efficiency.
Several industry veterans will serve as directors of the company. Ryan Bazant, president of Lear Construction Management Ltd., will chair the board. The other directors are Rob Geremia, co-founder of RKG Consulting Inc. and former president of Boardwalk REIT; Kelly Hanczyk, CEO of Nexus Industrial REIT; and Theodore Manziaris, co-founder of Right at Home Realty and founder of Edgefront REIT, which later evolved into Nexus REIT.
Geremia will serve as CEO of the company, and the board will select other senior managers.
A number of closing conditions are in place for the pending sale, including a receipt by Trillium of an $84.7m valuation of the assets. Proceeds from a private placement set to occur as part of the amalgamation are expected to total at least $13m. Those funds will be used to satisfy the cash consideration of the deal. If the funds are insufficient, a vendor takeback mortgage up to $9.5m with a 12-month term and no interest will be made available.
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