Inuvik (Apr 01/05) - A multi-million dollar real estate deal is poised to scoop up almost half of Inuvik's key commercial sites.

Northern Property Real Estate Investment Trust (Northern REIT), already the town's largest residential landlord, has partnered with the Gwich'in Tribal Council (GTC) and the Nihtat Gwich'in Council (NGC) and entered into conditional agreements to purchase eight office structures in the town and one in Yellowknife.

For $10,805,000, the partnership will assume control of 98,000 square feet of commercial space and 10 residential units in the town.

Included in the deal are the Business Development Bank of Canada building in Yellowknife and the Semmler, Jim Koe, RWED and Mac Travel buildings in Inuvik.

An agreement in principal for the Alex Moses building will soon be finalized, as well.

"We wanted to ensure a wider range of income sources and continue to build on the relationships that were formed with Northern REIT and the GTC during our first project, Inuvik's recently completed Capital Suites," said Chief Richard Nerysoo, vice president of the Nihat Gwich'in Development Corporation, the business arm of the GTC.

Majority owner Northern REIT, will control a 50 per cent stake while the GTC holds a 35 per cent share. The NGC owns the remaining 15 per cent.

"It all comes down to operating efficiencies. They have local market knowledge and operations and we already provide maintenance and management services," said Alan Vaughan, vice president acquisitions for Northern REIT.

"So we thought let's put it all in one hat and share."

Although it is unclear to what extent the exterior of the buildings may change, the partnership has budgeted $1,765,000 for capital improvements.

"The overwhelming majority will be related to the Mac Travel building," said Vaughan, noting that heating and ventilation work will be necessary.

Prior renovations to the Alex Moses building will also be completed, while electrical and plumbing work at the Semmler building and overall modernization will take place.

Northern REIT, which made waves after raising residential rents 20-30 per cent last year, said the commercial nature of these properties will prevent the same situation from occurring.

"We absolutely intend to honour the leases that are there," said Vaughan, who explained that most of the leases are long term.

"There is no anticipation of a raise."