CHICAGO, IL - Morguard Corporation announced that it has finalized an agreement to purchase, through a wholly-owned subsidiary, a 100% freehold interest in Alta at K Station, a LEED Gold Certified high rise residential rental complex in Chicago, IL. The property comprises two towers built on an eight-level parking and retail podium with 848 residential units, 700 above-grade parking stalls and 12,000+ SF of high-street retail. The acquisition is expected to close on or about December 27, 2012 and conditions, other than customary closing conditions, have now been satisfied.
Alta at K Station, located at 555 West Kinzie Street in Chicago's West Loop, sits directly on the city's urban rail system on a 1.7 acre site. The 37 storey and 41 storey towers were completed for occupancy in 2010 and currently have an occupancy rate of about 94%.
Morguard will assume management of the complex on March 1, 2013.providing all asset management and property management services to support this long-term investment.
Alta at K Station will be purchased free and clear of financial encumbrances for total consideration of approximately US$300 Million (excluding closing costs). Morguard expects to finance the purchase price with: (i) a mortgage in the principal amount of approximately US$200 million for a term of ten years, bearing interest at 3.29% per annum; (ii) and other available sources of funds.
"This opportunity allows Morguard Corporation to expand its footprint in the U.S. and execute on our U.S. growth strategy to acquire high-quality core assets," said Rai Sahi, Chief Executive Officer, Morguard Corporation. "We're building on our successful track record of ownership and management of real assets to deliver shareholder value. "
In a separate transaction earlier this month, Morguard acquired a 95% equity interest in the Toronto Airport Marriott Hotel. The full service hotel located on five+ acres at Pearson International Airport in Ontario features 424 rooms, a 26,000 SF banquet facility and a 500+ stall car park. The opportunity augments Morguard's current direct and indirect hotel investments. Additionally, Morguard Real Estate Investment Trust (TSX: MRT.UN) ("Morguard REIT"), announced on October 31, 2012 that it had acquired a 100% freehold interest in Penn West Plaza, Calgary, a Class A office property that is comprised of two office towers with 621,628 square feet of gross leasable area, 379 parking spaces and 17,766 square feet of prime retail space.
The purchase of Alta at K Station brings the total value of acquisitions by the Morguard group of companies to more than $700 Million in the fourth quarter of 2012.