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InStorage REIT Buys InScotia for C$68 Million

October 13, 2008

1 Min Read
InStorage REIT Buys InScotia for C$68 Million

InStorage Real Estate Investment Trust  agreed to buy its third-party development partner InScotia Developments Limited Partnership for approximately C$68 million. The acquisition is expected to benefit InStorage and its unitholders by acquiring a portfolio of income-producing properties with considerable upside.

According to the company, InScotia's portfolio comprises of interests in eight self-storage properties that are currently in their lease-up phase and a land parcel zoned to permit construction of a 93,000-square-foot facility. InStorage estimates stabilized net operating income from the acquired properties to be in the range of C$5.5 million on an annualized basis.

The company noted that it would pay about C$68 million for InScotia, funded with the issuance of C$14.3 million of convertible debentures that will bear no interest and have a three-year term to the InScotia vendors, the assumption of C$33.6 million of first mortgage and construction loans, and the repayment of C$20.2 million in mezzanine loans to it. The company expects the transaction to close by late October, subject to receiving all required consents. For more information, visit www.instoragereit.ca/.

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