Thorunn Howatt
Northern News Services

Yellowknife (June 05/02) - Yellowknife's biggest landlord got bigger this week after a buyout of six more buildings. And Urbco Inc. is changing its name too.

"We closed on some real estate transactions on Friday in Yellowknife -- Lahm Ridge Tower, Hudson House and Rock Ridge," said Urbo Inc. spokesperson Greg Herndier of properties previously owned by Mackenzie Management.

Lanky Court Town Homes, Bison Estates Town Homes and Bison Hill Apartments were part of a separate deal with Nova Construction Ltd. More building purchases are on the horizon for the new company and that could mean good news for tenants. Last week Urbco, a company that now owns about 25 residential apartment buildings as well as office towers in the city became Northern Properties Real Estate Income Trust (NPR). Urbco still exists but it is just a subsidiary company of NPR now.

More access to capital

"This is really going to help expand our operations in the North because we will have access to capital. Raising capital through a real estate income trust is far easier than a public company."

The name change took place last Thursday but the concept of moving from a publicly listed company to a trust company was approved at Urbco's December board meeting. But tenants shouldn't feel any changes because of the transformation. "It's the same management team. All the staff are in place," said Herndier.

NPR's acquisitions are part of a game plan to expand its property collection all over the North.

"NPR was just listed last week," Herndier said adding that Urbo shareholders now become NPR unitholders. The units were first issued at $10 each and were already selling for $10.50 earlier this week. NPR is listed on the Toronto Stock Exchange as NPR.UN.

"In a public company it is hard to get the cash flow out to the shareholders of the company," said Herndier explaining that real estate income trusts take all the cash flow produced by the company on a monthly basis and they send it out to the unit-holders on a monthly basis. "Most of the real estate companies have converted themselves from public companies to real estate investment trusts."

The changes mean three advantage to the company: The company's value is raised, it distributes income more quickly back to unit-holders and it allows NPR better access to capital. NPR is making its expansion move during a construction boom.

"The vacancy rates are low now," said Herndier adding that with new apartment building construction in the city going full force this year the situation should be short term.

In the North heating fuel, electricity and water costs more than in the south. Rents in the north are not significantly higher when compared to the rate of northern salaries over the south.

One of Urbco's, now NPR's properties, the Garden Town Homes has had moderately fixed rental rates. "We were charging $1,150 to $1,250 in 1988 - 89 and we are at $1,250 to $1,300 today - that's not even a 10 percent increase in 10 years," said Herndier. As a whole, Urbco apartment rental prices increased four percent over the last two years.