29 Park Road Sold

We are pleased to report that we have sold our 50% interest in the ownership of 29 Park Road to one of the doctor tenants who was our partner in the deal. As part of the transaction, the purchaser also bought out his partner (they each owned 25% of the property) in the clinic after many years of negotiations. The sale was based on a valuation of $5.6MM minus the current mortgage balance of: $2.53MM. This equals a capitalization rate of about 4.2% which we believe is an excellent result in this market. As part of the deal, we also sold the shares of the General Partner corporation (of the 29 Park Road Limited Partnership) to the buyer for a sale price of $200,000 which is to be paid in equal monthly instalments over the next 3 years. The combined sale price, which would be equal to a sale at a valuation of $6MM, returns a cap rate of 3.9% on the current income.

The deal closed earlier today and we will be making a distribution tomorrow to LP Unitholders equal to 15% of the original capital contribution amount. We had been unable to report the terms of this deal in advance because we did not receive final confirmation on its status until the day of closing. The uncertainty was caused by a lack of communication from the exiting doctor and his counsel prior to closing. Regardless of the unique nature of the process for a real estate transaction, we are very pleased with the end result.