- Acquisition of 10 active-living properties comprising 370 units
with an average age of approximately 4 years grows the overall
number of suites in the Company's portfolio by almost 70%
- Doubles exposure to Moncton,
NB, one of Canada's fastest
growing rental markets with 8.7% year-over-year rent growth
- Attractive acquisition cap rate of approximately 5.0% expected
to deliver FFO per share accretion in excess of 30%
- $24 million equity financing
launched through a strong syndicate with a lead strategic order of
$4 millon will help broaden the
Company's shareholder base and improve trading liquidity
HALIFAX, NS, Nov. 4, 2021 /CNW Telbec/ - (TSXV:
NXLV) – NexLiving Communities Inc. ("NexLiving" or
the "Company") announced today that it has entered into agreements
to acquire ten recently constructed apartment properties
comprising, 370 units (collectively, the "Acquisition Portfolio")
in Moncton and Riverview, New Brunswick, for an aggregate
purchase price of $72.6 million,
subject to customary adjustments. The Acquisition Portfolio is
comprised of newer buildings with an average age of approximately
four years. One of the buildings under agreement is currently in
the initial lease-up stage, while one of them is still under
construction with an expected completion date of March 31, 2022 (together, the "Mountain Road
Properties").
NexLiving has structured the acquisition of the portfolio as
four separate transactions, which will allow the Company to assume
a CMHC mortgage on one of the buildings with an interest rate of
1.76%, and also allow for the Mountain Road Properties to stabilize
and meet the Company's lease-up and income thresholds prior to
completing their purchase. Upon full construction and lease-up of
the Mountain Road Properties (anticipated to occur in the second
quarter of 2022), the Acquisition Portfolio is expected to generate
approximately $3.6 million of net
operating income ("NOI"), which implies an overall Acquisition
Portfolio capitalization rate of approximately 5.0%. All four
transactions are subject to due diligence, financing and, in the
case of the Mountain Road Properties, certain performance
conditions. The transaction is expected to be immediately
accretive, and once fully stabilized, in excess of 30% accretive to
FFO per share.
NexLiving's CEO, Mike Anaka, commented "We are proud to announce
these transformative acquisitions that provide both operational and
financial scale to the Company. Over the past three years,
NexLiving has grown from one building and 31 units to 18 buildings
and 549 units. The acquisitions allow us to nearly double the
portfolio to 919 units, while providing significant FFO accretion
to shareholders."
Financing Overview
The Company also announced today that it has entered into an
engagement agreement with Echelon Capital Markets and CIBC Capital
Markets as co-lead agents and co-bookrunners, on behalf of a
syndicate of agents (collectively the "Agents"), and has filed a
preliminary short form prospectus (the "Prospectus") with the
securities regulatory authorities in the provinces of Nova Scotia, New
Brunswick, Newfoundland and
Labrador, Ontario, Manitoba, Saskatchewan, Alberta, British
Columbia and Prince Edward
Island, pursuant to which the Company has agreed to issue,
and the Agents have agreed to sell, on a commercially reasonable
"best efforts" basis (the "Offering"), up to 100,000,000 common
shares at an offering price of $0.20
per common share for gross proceeds of $20,000,000. The syndicate of Agents
includes Scotia Capital Inc., Desjardins Securities Inc.,
Cormark Securities Inc., Canaccord Genuity Corp., iA Private Wealth
Inc., and Richardson Wealth Ltd.
The Company has also agreed to grant the Agents an option,
exercisable in whole or in part at the sole discretion of the
Agents, any time not later than the 30th day following
the Closing Date (as defined below), to offer up to an additional
15,000,000 common shares at the offering price for additional gross
proceeds of up to $3,000,000, for the
purpose of covering over-allotments made in connection with the
Offering and for market stabilization purposes.
The closing of the Offering is anticipated to occur on
November 24, 2021 or such other date
as the Company and the Agents may agree (the "Closing Date").
Concurrent with, or shortly following, the closing of the
Offering, the Company also announced plans to complete a
non-brokered private placement with a strategic party of
approximately 20,000,000 common shares at an offering price of
$0.20 per common share for gross
proceeds of approximately $4,000,000,
to be completed in one or more tranches (the "Private Placement").
The common shares sold pursuant to the Private Placement will not
be qualified under the Prospectus. Closing of the Private Placement
is subject to a number of conditions, including the approval of the
TSX Venture Exchange. The closing of the Offering is not
conditional on the closing of the Private Placement, or vice
versa.
The Company intends to use a portion of the gross proceeds of
the Offering and Private Placement to finance, in part, the
purchase of the Acquisition Portfolio, to provide additional
working capital for the Company, to pay down existing debt and/or
to use for future acquisitions.
The acquisition of the Acquisition Portfolio and the completion
Offering will be subject to certain customary conditions including,
but not limited to, the receipt of all necessary approvals,
including the approval of the TSX Venture Exchange, and the
applicable securities regulatory authorities. A copy of the
Prospectus is available on SEDAR under the Company's profile at
www.sedar.com.
Overview of Acquisition Portfolio
The Acquisition Portfolio consists of ten, newly built
multi-residential buildings, comprised of 370 units, in
Moncton and Riverview, New Brunswick.
2251 Mountain Road
The 2251 Mountain Road property is
a 75 unit, five-storey building with two elevators. The property
features spacious well-appointed luxury units with stone
countertops, stainless steel appliances, balconies and two levels
of heated underground parking, including charging stations for
electric vehicles. The property was constructed in the fourth
quarter of 2021 and is currently in lease up stage. The Company's
agreement to acquire the 2251 Mountain Road property is subject to
the property being occupied and 90% leased to tenants that meet the
Company's stated profile and rented at a rate which meets or
exceeds the pro forma rent roll. Management expects to close
the transaction and waive all conditions in the first quarter of
2022.
2261 Mountain Road
The 2251 Mountain Road property is
currently in the construction stage, with expected completion by
the first quarter of 2022. It's expected to be a replica of the
2251 Mountain Road property. The Company's agreement to acquire the
2261 Mountain Road property is subject to the property being
occupied and 90% leased to tenants that meet the Company's stated
profile and rented at a rate which meets or exceeds the pro forma
rent roll. Management expects to close the transaction and waive
all conditions in the second quarter of 2022.
1009 Cleveland Avenue
The 1009 Cleveland property is
a 64 unit, four-storey building. The property has one level of
heated underground parking and storage, and each unit has stone
countertops, stainless steel appliances and a balcony. The property
was constructed between 2018 and 2019 and is fully-occupied.
NexLiving shall satisfy part of the purchase price with the
assumption of an associated ten-year CMHC mortgage with an
attractive interest rate of 1.76% annually. Management expects to
close the transaction and waive all conditions in the fourth
quarter of 2021.
Cleveland & Whitepine
Properties
The Cleveland
& Whitepine properties are a complex of seven buildings, for a
total of 156 units. The units have in-floor heating,balconies and
modern finishes. The properties were constructed during the period
from 2011 to 2016 and are currently 99% occupied. The properties
are in close proximity to select amenities, such as grocery stores,
pharmacies, restaurants, a fitness centre and public transit.
Management expects to close the transaction and waive all
conditions in the fourth quarter of 2021.
2019 Convertible Debenture Amendment
NexLiving provides the following update to the previously
announced amendment of the conversion price to $0.20 for its convertible debentures due
September 30, 2021. The Company has
issued 2,312,500 common shares to debenture holders representing
$462,500 of principal, who elected to
convert their debentures into common shares and the remaining
$275,000 of principal has been repaid
in cash.
The common shares subject to the Offering have not been and
will not be registered under the U.S. Securities Act and may not be
offered or sold in the United
States absent registration under or an applicable exemption
from the registration requirements of the U.S. Securities Act. This
press release does not constitute an offer to sell or the
solicitation of an offer to buy the shares herein described, and
shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of that jurisdiction.
For more information about NexLiving, please refer to our
website at www.nexliving.ca and our public disclosure at
www.sedar.com.
About the Company
NexLiving continues to execute its plans to acquire recently
built or refurbished, highly leased multi-residential properties in
bedroom communities across Canada.
The Company aims to satisfy the needs of the newly emerging 55+
resident. The demographic that has changed the world is now
changing the way residential rental apartments cater to their
requirements. Their desire for community, along with service,
quality and convenience has led to the emergence of the 55+ active
living segment. Apartments are their next "home", after years of
owning they look forward to the carefree lifestyle provided through
renting in a community of their peers. NexLiving intends to
consolidate this emerging market niche. The Company currently owns
549 units in New Brunswick and
Ontario. NexLiving has also
developed a robust pipeline of qualified properties for potential
acquisition. By screening the properties identified to match the
criteria set out by the Company (proximity to healthcare,
amenities, services and recreation), management has assembled a
significant pipeline of potential acquisitions for consideration by
the Company's Board of Directors.
Forward-Looking Statements
This news release forward-looking information within the meaning
of applicable Canadian securities laws ("forward-looking
statements"). All statements other than statements of
historical fact are forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "projects", "estimates", "forecasts", "intends",
"continues", "anticipates", or "does not anticipate" or "believes"
or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements contained in this news release
include, but are not limited to: the Company's intention to
complete the Offering and the anticipated timing thereof; the
Company's intention to complete the Private Placement and the
anticipated timing thereof; the Company's intention to complete the
acquisition of Acquisition Portfolio and the anticipated timing
thereof; the expected benefits of the acquisition of the
Acquisition Portfolio to Company shareholders, including that the
acquisition is anticipated to be accretive to the Company's FFO per
share; that the acquisition of the Acquisition Portfolio will
further enhance the Company's overall growth profile; that the
acquisition of the Acquisition Portfolio will generate the expected
NOI growth; that the Acquisition Portfolio, once acquired and
stabilized, will generate the expected capitalization rate of 5.0%;
the Company's intended use of proceeds of the Offering and the
Private Placement; the completion of the acquisitions of the
Acquisition Portfolio on the terms contemplated; the anticipated
timing of the completion of construction of the Mountain Road
Properties. Such forward-looking statements are qualified in their
entirety by the inherent risks and uncertainties surrounding future
expectations, including that the transactions contemplated herein
are completed. These forward-looking statements reflect the current
expectations of the Company's management regarding future events
and operating performance, but involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Actual
events could differ materially from those projected herein and
depend on a number of factors, including, without limitation, the
failure by the Company to complete the acquisitions of the
Acquisition Portfolio on the terms contemplated or on the
anticipated timeline; material shifts in demographic trends or
actual future market conditions being different than anticipated by
NexLiving's management; material changes to government or
environmental policy or regulations affecting NexLiving's
operations; and the risks described under "Risk Factors" in the
Prospectus and the Company's Annual Information Form. Certain
information in this press release may be considered as "financial
outlook" within the meaning of applicable securities legislation.
The purpose of this financial outlook is to provide readers with
disclosure regarding the Company's reasonable expectations with
respect to the acquisition of the Acquisition Portfolio. Readers
are cautioned that the financial outlook may not be appropriate for
other purposes. Although forward-looking statements contained in
this new release are based upon what management believes are
reasonable assumptions, there can be no assurance that actual
results will be consistent with these forward-looking statements.
These material assumptions are more fully described in regulatory
filings, including in the Prospectus and the Company's MD&A
released on November 2,
2021. Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking statements in this
new release speak only as of the date of this news release. Except
as required by applicable securities laws, the Company does not
undertake, and specifically disclaims, any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future developments or otherwise, except as required
by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
SOURCE NexLiving Communities Inc.