State of the Units & Property Report Q3 2011
Autumn is traditionally a hectic time of the year after the relaxed pace of summer. We're sure you and your families have settled into busy new routines with the start of a fresh school year and that the pace has accelerated at your workplaces.
At LEAGUE, we've certainly experienced a flurry of activity over the last few months. We launched some important new projects, made substantial progress on others, and organized some widely popular special events.
Looking Back
September began with the independent revaluation of all properties in LEAGUE's IGW REIT by Colliers International Realty Advisors.
This was our first revaluation after transitioning to IFRS (International Financial Reporting Standards) as mandated by regulatory authorities. IFRS requires a different approach to how some balance sheet items are treated -- and thereby affects how the current unit-price is calculated. However, adopting it strengthens our already superior level of transparency for Member-Partners, while allowing us to attract a broader -- and perhaps more global -- range of financial resources into the IGW REIT.
Also in September, we reported that Partners REIT's purchase of Place Desormeaux in Montreal and Evergreen Centre in Sooke, BC benefited the IGW REIT in two ways -- first because the IGW REIT and Member Partners hold a 41.5% ownership stake in Partners and secondly because the purchase occurred without any dilution in the IGW REIT.
More good news came in early October when we announced that Member-Partners who had invested in the SegDebt 1 LP received an additional payment after we sold -- at a considerable profit -- another portion of the Canadian mortgage-backed securities investments held by the SegDebt 1.
In our continuing efforts to help Member-Partners achieve their Intergenerational WealthTM goals, we were busy throughout the last quarter promoting great new investment opportunities at LEAGUE. For example, there was so much interest in our live presentation on the Solar Energy investment offering that we couldn't fit all those who wanted to attend the event. Fortunately, we recorded the session and posted a video of it on our website, so anyone can view it to learn how this offering can deliver a 9% or 10.5% return.
In addition, a conference call introducing the LEAGUE Family Equity Fund (LeaFE) attracted more than 100 participants. This investment might well be the most innovative and transformative that LEAGUE has ever offered. LeaFE has the potential to allow more Canadians than ever before to acquire residential real estate . . . and sooner!
We also introduced another compelling offering: 11% Colwood Promissory Notes. These notes are offered at 11% per annum paid monthly over a three-year term or less.
While construction will soon begin at the Colwood City Centre development, activity has picked up at other properties as well. In particular, leasing progress has accelerated in recent weeks at our Eagle Landing shopping centre project in Chilliwack, BC, where many well-known retail tenants have either opened for business or signed leases for space.
Another noteworthy highlight of the quarter was how we shared the LEAGUE story in some unique and powerful ways:
Looking Ahead
Now that we've entered the home stretch of the year we will be as busy as ever. As described in the November edition of Legacy, we're introducing two compelling new investment opportunities -- the Tsawwassen Retail Limited Partnership, which delivers an 8% return, and the IGW Diversified Redevelopment Fund LP, which provides a set 6.6%1 return, plus 80% of net ROI up to 20%, and 50% of net ROI over 21%. You will hear more about these in the coming weeks.
As we mentioned in our recent Thanksgiving letter, it's humbling to consider how much and how fast LEAGUE has grown. From our start in 2006, when 181 families joined together to acquire $42 million in assets, we now have more than 2,700 families owning and managing nearly $1 billion in tangible Canadian assets -- including Partners REIT, which is listed on the TSX exchange. We thank each of you for your continued faith in our vision and values as we continue down the path toward prosperity for all Member-Partners.
As always, we are pleased to provide the attached updates on the properties we manage on your behalf. Should you have any questions, please call a LEAGUE Member Services Manager, who will be happy to assist you.
State of the Units & Property Report Q3 2011
Part A: IGW REIT Properties
Arbutus Industrial Park -- Parksville, BC
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
Vinet's Village Shopping Centre -- Vegreville, AB
- The centre is 94% leased. Leasing activity to fill the remaining space continues.
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
Sobey's Centre (formerly Camrose IGA Garden Market) -- Camrose, AB
- While plans and permits remain in place for constructing 10,000 additional sq. ft. of commercial/retail space, we are also considering severing the freestanding pad site and selling it off.
The Lindholm Building -- Victoria, BC
- Leasing activities continue.
Merivale Business Park -- Ottawa, ON
- Leasing activities continue.
- The facade upgrade is in preliminary stages.
Market Square -- Fort Saskatchewan, AB
- Planning has begun for constructing an additional 6,000 sq. ft. pad for new retail space. A construction schedule will be determined once we have sufficient pre-leasing in place.
- Leasing activities continue.
Westlock Shopping Centre -- Westlock, AB
- Negotiation is underway to amend Bargain Shop's lease so space can be freed for the construction of new storefronts, which will be attractive to customers. This plan has been approved by the City and a development permit granted. Our preference is to sell the property at an appropriate price. It is currently listed for sale.
Fort Saskatchewan Industrial Park -- Fort Saskatchewan, AB
- We await completion of a sewer line extension by the City before making further improvements to this property.
- We currently have a pending Offer to Purchase on this land.
Londondale Shopping Centre -- Edmonton, AB
- Re-merchandising and renovations are complete and the centre is now 100% leased.
Tiffany Suites -- Victoria, BC
- Suites continue to be upgraded as per our original plan.
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
Stettler Town Mall -- Stettler, AB
- The mall's remaining vacant space is being marketed for lease.
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
Seaway Village -- Cornwall, ON
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
Carlton Court -- Prince Albert, SK
- Revenue is up 9.4% from the previous year.
Dodson Plaza -- Drayton Valley, AB
- We're reviewing the opportunity to add new commercial pads to attract more profitable tenants. These would replace the existing gas bar.
- A 3,000 sq. ft. vacancy is being marketed for lease.
- Rexall Drugs has purchased the existing pharmacy, is extending the lease term, and is providing the property with a stronger covenant for the long term. Rexall will be expanding the pharmacy to almost double its current size.
Westwinds Shopping Centre -- Taber, AB
- The centre is 100% leased.
- We have begun to pre-lease space for our planned 14,000 sq. ft. expansion.
Tyee Plaza - Campbell River, BC
- Leasing activities continue on in-line vacancies and finding tenants to replace the Loblaw store.
Partners REIT (TSX-V: PAR.UN)
- IGW REIT, through a subsidiary, owns 41.5% of Partners REIT.
- For more information on Partners REIT, visit: www.partnersreit.com.
Part B: Development Limited Partnerships
The Cygnet Apartment Building -- Port Alberni, BC
Colwood City Centre LP -- Colwood, BC
- We have successfully refinanced for this Limited Partnership, reducing our interest charges.
- Pre-sales of condominiums in the first residential building are nearly complete with only a few residences remaining. For a chance to participate in this offering, please email
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- Feasibility studies have been completed and we can now sign leases with commercial occupants. Lease marketing activities continue.
- Proposals have been made to the new anchor tenants and a construction phasing plan will allow site development work to begin.
- Farmer Construction Ltd. has been awarded the contract for lead contractor.
- Design development continues and the team is working with the City of Colwood to obtain building permits.
- Tenants have been relocated prior to construction, which is set to begin later in 2011.
- Demolition of the nine single-family residences is now complete with plans to raze the recently vacated commercial components this month.
Duncan Mall -- Duncan, BC
- We have secured refinancing for this Limited Partnership, reducing our interest charges.
- Lease negotiations for the smaller spaces are in the final stages.
- Negotiations continue on renewing our land lease for an extended term.
- We recently accepted an Offer to Lease from Lubexx for 1,653 sq. ft. and we accepted an Offer to Lease from Aarons Furniture for 6,000 sq. ft.
473 Albert Office Tower -- Ottawa, ON
- BOMA (http://www.boma.org) has approved this building's "Go Green" environmental certification.
- We recently accepted an Offer to Lease from the federal government for the entire 8th floor. Other leasing negotiations with the federal government continue.
80 Aberdeen -- Ottawa, ON
- We are bringing in new tenants while receiving income from existing ones.
- A technology company has leased 5,247 sq. ft.
Fort St. John Power Centre -- Fort St. John, BC
- We have received a positive judgment and an order nisi. The owner received an offer on a portion of the property against which we have security. We await court confirmation that the subdivision approval can proceed.
Place Trans Canadienne Commercial -- Montreal, QC
- The site was successfully rezoned to allow large-format retail shopping complexes.
- We have leased space to three new retail tenants. The tenancies are necessarily short term, to provide flexibility for our redevelopment plans. This enables the property to continue its transition from industrial to retail.
Eagle Landing Retail LP -- Chilliwack, BC
- Negotiations are underway with numerous tenants.
- Many offers to lease are in the works, such as Subway, East Side Mario's, Pier 1 Imports, Tim Hortons, etc.
North Vernon LP -- Vernon, BC
- Anderson Crossing's leasing activities continue.
- A bulk food store has opened, occupying 5,091 sq. ft.
Wesbrooke Retirement LP -- Pitt Meadows, BC
Part C: IGW Residential Capital LP
125 North Condominiums (formerly Wellington Suites) -- Hamilton, ON
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
- Leasing activities continue.
- A strata plan is being incorporated.
Centre One Condominiums (formerly Rosewood Towers) -- Hamilton, ON
- Improvements to the common areas continue, and there is a plan for a vertical garden.
- Pre-sales of suites are underway.
- The building is in the final stages of condo registration.
Chimney Springs Apartments -- Vegreville, AB
- The property is being leased to new tenants.
Sundel Square Shopping Centre -- Langley, BC
- In accordance with our strategy to replace smaller properties with one property that's larger and easier to manage, this property is listed for sale, and we will consider acceptable offers.
- As a future residential redevelopment site, work is proceeding on releasing vacant spaces and leasing activities continue.
Part D: SegDebt 1 and 2
SegDebt 1
- There was a 15% distribution, with payouts in March, July and October totalling 166.62% of the original principal and 70.84% treated as return of capital.
SegDebt 2
- There was a 12.1% distribution, with payouts in March and May totalling 132.75% of the original principal and 72.5% treated as a return of capital.
Part E: Member-Partners' Solar Energy LP
- 9% distributions for non-registered investors.
- 10.5% distributions for registered investors.
- There was $9,568,619 raised as of October 31, 2011.
- This investment remains open for subscription. For more information about this investment opportunity, please call a LEAGUE Member Services Manager, who will be happy to assist you.
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