Dear Unitholders,
On behalf of Management for All Island REIT, please see attached our Q2 Financial Statements and our Fall 2024 Acquisition Update.
Acquisition Update
Given the high-interest rate environment through the first half of 2024, the inflationary pressure on operating and capital expenditures, and the regulatory uncertainty at both the federal and provincial levels, All Island Equity REIT (“All Island REIT”) has taken a conservative approach in underwriting new acquisitions for the portfolio.
While All Island REIT’s approach may be conservative, management is continuously investigating and
underwriting potential assets. To pass our high bar, potential assets need to be centrally located in our core communities, have below-market in-place rents, offer re-development potential, and be accretive to our unitholders. Management also negotiates advantageous terms when securing assets under contract, including extended due diligence and closing periods, assumable CHMC secured financing, and control over lease terms and commitments through the contract period.
Through this approach, All Island REIT has secured two properties in our core region, the Comox Valley. The first acquisition is scheduled to close in late 2024/early 2025 and the second acquisition opportunity remains under conditional contract as we perform due diligence.
Both properties are located in the Comox Valley and will increase our presence in both the Courtenay and Comox markets. This will allow All Island REIT to gain operational efficiencies through holding a newly constructed asset and continued concentration of our portfolio within the Comox Valley.
In addition, All Island REIT continues to acquire units within our leasehold properties in Victoria from the individual sub-leaseholders. These units typically are priced <$400,000 individually and generate rental yields of +5%, significantly outpacing the Victoria market. Year to date October 25, 2024, All Island REIT has acquired 4 of these units totaling $1,242,500.