Winnipeg Free Press
Wednesday, January 4th, 2006
By Geoff Kirbyson
THE ongoing acquisition spree by Huntingdon Real Estate Investment Trust has netted a prominent downtown building and set the wheels in motion to wind down Manitoba's smallest publicly-traded company.
The Winnipeg-based REIT has purchased the 150,000-square-foot Medical Arts Building for just over $14 million, the latest in a long line of acquisitions that has seen its portfolio of office, retail and industrial buildings across Western Canada grow to more than $400 million in value.
"It's the premiere medical building in Winnipeg," Arni Thorsteinson, president and CEO of Huntingdon, said in an interview yesterday. "Huntingdon is in the business of owning good quality downtown properties and this one fits the bill."
The deal is expected to close April 1. Shareholders of Medical Arts Building Ltd. (MABL), the company that owns the property plus a parkade and surface parking lot, have to approve the transaction at a special meeting to be held Jan. 19. Assuming everything goes as planned, the company will be wound down this spring.
Mandate
Rudy Braun, general manager of MABL, said he doesn't anticipate much opposition to the deal, considering the company's shareholders gave the board of directors an overwhelming mandate at its annual meeting last June to negotiate the sale of its assets.
Since then, MABL's stock has spiked from about $35 to its most recent close of $85. It hit a 52-week high of $90 in September.
"I think it's a very positive thing for the shareholders, they're getting a return for their shares. We haven't had dividends for close to five years," Braun said in an interview yesterday.
MABL has been talking openly about winding itself down for several years because of escalating costs associated with maintaining a public listing. With a market capitalization of $5.2 million and a share float of just 61,600, it has long been the smallest of Manitoba's publicly traded companies.
Braun said there were a number of suitors for the Medical Arts Building, but Huntingdon was the best fit.
"They're quite concerned about keeping the existing tenants, they're a local company and they have a sense of the history of the Medical Arts Building."
He said it will be business as usual for medical practitioners and patients alike during the transition to the new owner.
Thorsteinson said it's likely Huntingdon will be active with its latest purchase. He said it's possible to add two or three additional floors to the 400-stall parkade and the REIT will also look at developing the 54-stall surface lot on the corner of Kennedy Street and Graham Avenue.
There are 120 medical and dental professionals who run their businesses out of the 72 offices in the Medical Arts Building. Its revenue is derived from rent and parking.
Huntingdon shares (HNT.UN/TSX Venture Exchange) closed up 11 cents to $2.75 yesterday on volume of $67,600.
geoff.kirbyson@freepress.mb.ca