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WPT, IMCO create major US industrial JV | RENX – Real Estate News EXchange

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LOGO: WPT Industrial REIT.WPT Industrial REIT (WIR-U-T) is selling a minority interest in a $370 million (all figures US) industrial portfolio to the Investment Management Corporation of Ontario (IMCO) to create a joint venture focused on the American industrial sector.

WPT’s contribution to the JV is a 13-property portfolio spread across five states and comprising about 4.75 million square feet of leasable space. The agreement will expand on an existing relationship with IMCO, which contributed $150 million to the original venture in the summer of 2020.

“The formation of a new stabilized joint venture represents meaningful progress on our capital recycling initiative and underscores the REIT’s ability to attract and expand our relationships with strong institutional capital partners,” said Scott Frederiksen, chief executive officer of WPT REIT, in the announcement Monday morning. “The transaction strengthens our balance sheet, provides additional capacity to fund our growing development pipeline, and accelerates growth in our private capital management platform.”

Properties in the WPT, IMCO joint venture

WPT REIT will manage the properties acquired by the joint venture.

The 13 properties contributed to the joint venture by WPT are:

Property

Market

Size (SF)

Year

Built/Ren

Clear

Height

#

Tenants

Avg Tenant

Size (SF)

320 East Fullerton Ave.

Chicago

263,208

1999

32

2

131,604

535 Shingle Oak Dr.

Chicago

150,000

2007

30

1

150,000

99 Ave. A.

N. New Jersey

160,575

1983/2020

26.5

1

160,575

105 Ave. A.

N. New Jersey

188,343

2020

36

1

188,343

2940 Old Norcross Rd.

Atlanta

132,394

1994

28

1

132,394

8 Mount Moriah Rd.

Atlanta

202,250

2007

28

1

202,250

6751 Discovery Blvd.

Atlanta

115,000

2001

30

1

115,000

1975 Sarasota Parkway

Atlanta

145,262

1993

25

1

145,262

1871 Willow Springs Church Rd.

Atlanta

1,512,552

2010

32

1

1,512,552

2401 Midpoint Dr.

Kansas City

180,000

2005

30

1

180,000

2440 Midpoint Dr.

Kansas City

330,000

2006

30

1

330,000

8500 Hedge Lane Terrace

Kansas City

111,000

1999

26

2

55,500

5620 Inner Park Dr.

St. Louis

1,262,648

2003

32

1

1,262,648

Total/ Average

4,753,232

2005

31

15

316,882

WPT reports the portfolio is 100 per cent leased with a weighted average lease term of approximately 5.5 years.

The JV intends to hold stabilized, income-producing properties, expands the REIT’s management fee income and includes future leasing and incentive fees.

The REIT says it is achieving slightly higher than IFRS fair value for the interest in the portfolio, which will generate approximately $255 million in sale and financing proceeds. This will be used to pay down debt and fund future developments and investments.

The funds will allow WPT to lower its debt-to-assets by four per cent on a consolidated basis and two per cent on a proportionate share basis, resulting in liquidity of $153 million.

IMCO and WPT closed on their joint first acquisition in August of 2020, a 772,800-square-foot industrial development in Burlington County, N.J. At that time, it said the two parties intended to pursue additional industrial value-add and development investments in strategic U.S. distribution and logistics markets.

“Consumers are relying on e-commerce more than ever and expect robust inventories and rapid delivery times throughout the U.S.,” said Brian Whibbs, managing director, IMCO, in its 2020 announcement. “Our joint venture with the REIT is well aligned to IMCO’s real estate strategy to invest in logistics networks that help meet consumer demands and diversify our portfolio to include industrial.

“WPT Industrial REIT has a strong track record and is a leader in the logistics space, representing the kind of resilient partner we seek for our clients and portfolio.”

Last fall, IMCO, TorQuest Partners and OPTrust created a partnership to acquire another significant logistics provider, VersaCold Logistics Services. VersaCold is one of Canada’s largest cold-storage warehousing and food logistics firms, and had been owned by KingSett Capital and Ivanhoé Cambridge. Financial terms of the transaction were not disclosed.

ABOUT IMCO and WPT

IMCO manages $70.3 billion of assets on behalf of its clients.

Its mandate is to provide broader public sector institutions with investment management services, including portfolio construction advice, better access to a diverse range of asset classes and risk management capabilities.

WPT Industrial REIT is established under the laws of Ontario. It acquires, develops, manages and owns industrial properties in the United States, with a particular focus on warehouse and distribution properties.

Its operating subsidiary WPT Industrial LP indirectly owns a portfolio of 100 industrial properties across 20 states with approximately 31.8 million square feet of GLA.

EDITOR’S NOTE: This article has been updated to clarify the timing (August 2020) of the original venture involving both WPT and IMCO.

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Real eState

What Is the Canada Mortgage and Housing Corporation (CMHC)

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The Canada Mortgage and Housing Corporation (CMHC) is a Canadian Crown Corporation that serves as the national housing agency of Canada and provides mortgage loans to prospective buyers, particularly those in need.

Understanding the Canada Mortgage and Housing Corporation (CMHC)

The Canada Mortgage and Housing Corporation (CMHC) serves as the national housing agency of Canada. CMHC is a state-owned enterprise, or a Crown corporation, that provides a range of services for home buyers, the government, and the housing industry.

CMHC’s stated mission is to “promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing, and generally to contribute to the well-being of the housing sector.”1

A primary focus of CMHC is to provide federal funding for Canadian housing programs, particularly to buyers with demonstrated needs. CMHC, headquartered in Ottawa, provides many additional services to renters and home buyers, including mortgage insurance and financial assistance programs. CMHC acts as an information hub for consumers, providing information on renting, financial planning, home buying, and mortgage management.

CMHC also provides mortgage loan insurance for public and private housing organizations and facilitates affordable, accessible, and adaptable housing in Canada.2 Additionally, CMHC provides financial assistance and housing programs to First Nations and Indigenous communities in Canada.3

Professionals and Consumers

CMHC provides services to both professionals and consumers. For professionals, CMHC aims to work in collaboration with different groups to provide affordable housing. Services include project funding and mortgage financing, providing information to understand Canada’s housing market, innovation and leadership networks to access funding and talent to spur housing innovation and increase supply, and providing speakers and hosting events for the industry.4

For consumers, CMHC seeks to provide all the tools an individual would need to either buy a home or rent a home and a variety of information and assistance for current homeowners, such as managing a mortgage, services for seniors to age in place, and financial hardship assistance.56

For financial hardship and mortgage assistance, CMHC provides tools that include payment deferrals, extending the repayment period, adding missed payments to the mortgage balance, moving from a variable-rate to a fixed-rate mortgage, and other special payment arrangements.7

Canada Mortgage and Housing Corporation (CMHC) and the National Housing Strategy

In November 2017, the Canadian government announced the National Housing Strategy.8 Rooted in the idea that housing is a human right, this 10-year, $70 billion project will largely be administered by CMHC, although some services and deliverables will be provided by third-party contractors and other Canadian federal agencies.9

Strategic initiatives of the National Housing Strategy include:

  • Building new affordable housing and renewing existing affordable housing stock
  • Providing technical assistance, tools, and resources to build capacity in the community housing sector and funds to support local organizations
  • Supporting research, capacity-building, excellence, and innovation in housing research10

History of the Canada Mortgage and Housing Corporation (CMHC)

CMHC was established in 1946 as the Central Mortgage and Housing Corporation by the federal government in Canada with the primary mission of administering the National Housing Act and the Home Improvement Loans Guarantee Act and facilitating discounts to mortgage companies. Initially, CMHC began by providing housing to returning Canadian war veterans, and toward the end of the 1940s, CMHC began to administer a program providing low-income housing across Canada.11

In 1947, CMHC was responsible for opening Regent Park, a large low-income housing project, and Toronto’s first urban renewal project. By the 1960s, CMHC introduced co-op housing and multi-unit apartment buildings throughout Canada.11

In 1979, the Central Mortgage and Housing Corporation changed its name to the Canada Mortgage and Housing Corporation

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Real eState

Canadian home price gains accelerate again in May

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Canadian home prices accelerated again in May from the previous month, posting the largest monthly rise in the history of the Teranet-National Bank Composite House Price Index, data showed on Thursday.

The index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 2.8% on the month in May, led by strong month-over-month gains in the Ottawa-Gatineau capital region, in Halifax, Nova Scotia, and in Hamilton, Ontario.

“It was a third consecutive month in which all 11 markets of the composite index were up from the month before,” said Daren King, an economist at National Bank of Canada, in a note.

On an annual basis, the Teranet index was up 13.7% from a year earlier, the 10th consecutive acceleration and the strongest 12-month gain since July 2017.

Halifax led the year-over-year gains, up 29.9%, followed by Hamilton at 25.5% and Ottawa-Gatineau at 22.8%.

Housing price gains in smaller cities outside Toronto and its immediate suburbs again outpaced the major urban centers, with Barrie, Ontario leading the pack, up 31.4%.

On a month-over-month basis, prices rose 4.9% in Ottawa-Gatineau, 4.3% in Halifax and 3.7% in Hamilton.

The Teranet index measures price gains based on the change between the two most recent sales of properties that have been sold at least twice.

Canada‘s average home selling price, meanwhile, fell 1.1% in May from April, Canadian Real Estate Association data showed on Tuesday, but jumped 38.4% from May 2020.

 

(Reporting by Julie Gordon in Ottawa; Editing by Christopher Cushing)

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Economy

Bank of Canada seeing signs of cooling in hot housing market

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The Bank of Canada is starting to see signs that the country’s red hot housing market is cooling down, although a return to a normality will take time, Governor Tiff Macklem said on Wednesday.

The sector surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. The national average selling price fell 1.1% in May from April but was still up 38.4% from May 2020.

“You are starting to see some early signs of some slowing in the housing market. We are expecting supply to improve and demand to slow down, so we are expecting the housing market to come into better balance,” Macklem said.

“But we do think it is going to take some time and it is something that we are watching closely,” he told the Canadian Senate’s banking committee.

Macklem reiterated that the central bank saw evidence people were buying houses with a view to selling them for a profit and said recent price jumps were not sustainable.

“Interest rates are unusually low, which means eventually there’s more scope for them to go up,” he said.

Last year, the central bank slashed its key interest rate to a record-low 0.25% and Macklem reiterated it would stay there at least until economic slack had been fully absorbed, which should be some time in the second half of 2022.

“The economic recovery is making good progress … (but) a complete recovery will still take some time. The third wave of the virus has been a setback,” he said.

The bank has seen some choppiness in growth in the second quarter of 2021 following a sharp economic recovery from the COVID-19 pandemic at the start of the year, he added.

(Reporting by David Ljunggren and Julie Gordon; Editing by Peter Cooney and Richard Pullin)

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