Firm Capital American Realty Partners Trust Announces the Acquisition of a 50% Interest in a 250-Unit, Multi Residential Building Located in Houston, Texas for $27.9 Million
Firm Capital American Realty Partners Trust Announces the Acquisition of a 50% Interest in a 250-Unit, Multi Residential Building Located in Houston, Texas for $27.9 Million |
[23-January-2020] |
All amounts are in US Dollars unless otherwise stated. TORONTO, Jan. 23, 2020 /CNW/ - Firm Capital American Realty Partners Trust (the "Trust"), (TSXV: FCA.U), (TSXV: FCA.UN) is pleased to announce that it has entered into a $27.9 million joint venture located in Houston, Texas. The Trust has entered into a joint venture with an unrelated third party to acquire the Woodglen Village Apartments ("Woodglen" or the "Property"), a 250-unit, multi-family residential building. The joint venture is investing approximately $27.9 million (including transaction costs and the capital expenditure program as outlined below) into the property, representing a 6.3% going-in capitalization rate based on the purchase price of $24.2 million or approximately $96,700 per unit ($99 per square foot). In addition, a capital expenditure program (the "CAPEX Program") will be implemented to undertake various upgrades to the apartment units and of certain common area elements. This CAPEX Program is anticipated to take three years and is expected to further increase cash flow and be accretive to the joint venture. The Property is being financed, in part, by a new first mortgage for approximately $22.1 million with an approximate 4.6% interest rate. The terms of the financing also include a two-year interest-only period, three-year term, with two one-year extension options. The goal is to refinance the new first mortgage once the CAPEX Program is completed. The remaining capital requirement of approximately $5.8 million is being funded through approximately $2.3 million of common equity held 50% by the Trust and 50% by the unrelated third party, and the excess equity of approximately $3.5 million is being funded as preferred equity at an 9% rate, also held by the Trust. The unrelated third party is an experienced New York City based real estate owner and operator who is also a 50% partner with the Trust on its existing 235 apartment unit joint venture also located in Houston, Texas. The Trust will be funding its portion of the capital from the final remaining net proceeds received from its CAD$18.1 million convertible unsecured subordinated debenture issuance closed during Q3/2019. Closing is anticipated to be on or about January 31, 2020. ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS TRUST
FORWARD LOOKING INFORMATION Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Additional information about the Trust is available at www.firmcapital.com or www.sedar.com. SOURCE Firm Capital American Realty Partners Trust | ||
Company Codes: TorontoVE:FCA.U, TorontoVE:FCA.UN |
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