TORONTO, ONTARIO -- (Marketwired) -- 01/20/16 -- Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE: UFC) ("Urbanfund" or the "Company"), announced today that the Company completed the acquisition of a controlling interest in a proposed multi-residential rental development site located at 59-65 Weber Street West in Kitchener, Ontario (the "Property"), which Property was acquired for an aggregate purchase price of $1,250,000.
The 17,300 square foot site is strategically located at the corner of Scott Street and Weber Street East, across the street from the new Region of Waterloo Consolidated Courthouse and 300 metres from the proposed Frederick Street LRT Station. Urbanfund proposes to construct approximately 62 purpose built rental units on the site. Subject to the receipt of municipal approvals, construction of the low-rise project should begin in fall-2016 with occupancy beginning approximately 12 months later.
Pursuant to a limited partnership agreement through which Urbanfund holds its controlling interest in the Property, Urbanfund's initial capital contribution was approximately $543,750 representing approximately 87% of the total initial equity capital contributed. The balance of the purchase price was funded by a 1st Mortgage Loan provided by the Vendor at market rates. Prior to construction beginning, the limited partnership will secure appropriate construction financing and is estimated at this time to be in the amount of approximately $7,900,000. Details of this financing will be made public once the funding is secured.
To the extent that additional capital contributions are required, each limited partner's contribution shall be determined by multiplying each limited partner's proportionate share by the total additional capital required. If any limited partner does not contribute its share of additional capital, the general partner, or any limited partners who are prepared to do so, may advance such amount to the limited partnership on behalf of the non-contributing partner, and such advance shall be treated as an interest-bearing limited recourse loan from the contributing partner(s) to the non-contributing partner(s), which shall be repayable out of the first cash available for distribution otherwise payable to the non-contributing partner(s).
Following redevelopment of the Property, any cash available for distribution shall be paid or distributed by the limited partnership (i) first, to Urbanfund until it has received its initial capital contribution amount, plus an amount required to achieve an annualized internal rate of return equal to 6% thereon; (ii) second, to one of the other limited partners (the "second limited partner") until it has received its initial capital contribution amount, plus an amount required to achieve an annualized internal rate of return equal to 6% thereon; and (iii) thereafter, 64.99% to Urbanfund, 10% to the second limited partner, subject to meeting certain conditions precedent, 25% to the other limited partner (the "third limited partner"), and 0.01% to the general partner.
Urbanfund currently holds an 82.5% voting interest in the limited partnership. Such voting interest is subject to a carried interest held by the third limited partner, which is contingent upon satisfaction of certain conditions. If such conditions are met, Urbanfund's voting interest shall be reduced to 65%.
ABOUT URBANFUND CORP.
Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund's focus is to identify, evaluate and invest in real estate or real estate related projects. The Company's assets are located in Belleville, Kitchener, London and Toronto, Ontario, Quebec City and Montreal, Quebec. The Company's strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements and forward-looking information within the meaning of applicable securities laws, including statements about the Company's acquisition of the Property and the proposed development, construction and financing thereof. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company's control such as real estate taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company's assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the "Risks and Uncertainties" section of the Company's most recent Management's Discussion and Analysis filed under the Company's profile at www.sedar.com.
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 the accuracy of this release
President & CEO