Firm Capital Apartment REIT Announces the Acquisition of a 50% Interest in a 245 Unit, Multi-Family Residential Building for ...
March 15 2021 - 5:01PM
Firm Capital Apartment REIT (the “
Trust”), (TSXV:
FCA.U), (TSXV: FCA) is pleased to announce it has
entered into a joint venture agreement with an unrelated third
party to acquire a $39.5 million multi-family
residential property located in the Washington D.C.
Metro Area.
Hamilton Manor (“Hamilton
Manor” or the “Property”) is a 245-unit,
multi-family residential property located in Hyattsville, Maryland.
Hyattsville, MD is located within the Washington D.C. Metro Area.
Hamilton Manor is also in close proximity to the Trust’s Brentwood
and Hyattsville, MD joint ventures. The joint venture is purchasing
the property for $39.5 million or
approximately $161,225 per unit ($206 per square
foot). The acquisition of the Property is expected to close during
the second quarter of 2020 and is subject to various closing
conditions. The unrelated third party is the same partner in the
current Hyattsville, MD joint venture.
The Property is being financed by a new first
mortgage for approximately $26.5 million with an approximate 2.7%
interest rate. The terms of the financing include a four-year
interest-only or I/O period, 30 year amortization and a ten year
term. The remaining capital requirement, including closing and
working capital, is approximately $16.9 million and is being funded
through $5.5 million of common equity held 50% by the Trust and 50%
by the unrelated third party, with the remaining $5.9 million being
funded as preferred equity at an 8% rate of return, being held 100%
by the Trust.
To facilitate the closing of Hamilton Manor, the
trust has retained Firm Capital Corporation, an entity affiliated
to management of the Trust, to arrange (predominately to members of
the Trust’s board and senior management) a CAD$5.0 million (US$4.0
million), two year promissory note that is matched off against the
preferred equity investment. The promissory note will yield a
positive spread for the Trust as the preferred equity investment is
US$5.9 million at 8% and the promissory note is US$4.0 million at
6%.
ABOUT FIRM CAPITAL APARTMENT REAL ESTATE
INVESTMENT TRUST Firm Capital Apartment Real Estate
Investment Trust is a U.S. focused real estate investment trust
that pursues multi-residential income producing real estate and
related debt investments on both a wholly owned and joint venture
basis. Upon closing of Hamilton Manor, the Trust will have
ownership interests in a total of 2,091 apartment units diversely
located in Florida, Connecticut, Texas, New York, New Jersey,
Georgia and Maryland.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTSCertain information in this news
release constitutes forward-looking statements under applicable
securities law. Any statements that are contained in this news
release that are not statements of historical fact may be deemed to
be forward-looking statements. Forward-looking statements are often
identified by terms such as "may", "should", "anticipate",
"expect", "intend" and similar expressions.
Forward-looking statements necessarily involve
known and unknown risks, including, without limitation, the closing
of Hamilton Manor and the promissory note with the Firm Capital
Corporation, risks associated with general economic conditions;
adverse factors affecting the U.S. real estate market generally or
those specific markets in which the Trust holds properties;
volatility of real estate prices; inability to access sufficient
capital from internal and external sources, and/or inability to
access sufficient capital on favourable terms; industry and
government regulation; changes in legislation, income tax and
regulatory matters; the ability of the Trust to implement its
business strategies; competition; currency and interest rate
fluctuations and other risks. Additional risk factors that may
impact the Trust or cause actual results and performance to differ
from the forward looking statements contained herein are set forth
in the Trust's Annual Information Form under the heading Risk
Factors (a copy of which can be obtained under the Trust's profile
on www.sedar.com).
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. Except as
required by applicable law, the Trust undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise
Neither the 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.
For further information, please contact: |
|
|
Sandy PoklarPresident & Chief Executive Officer(416)
635-0221 |
Mark GoldreichChief Financial Officer(416) 635-0221 |
|
|
For Investor Relations information, please
contact: |
|
|
Victoria Moayedi Director, Investor Relations (416)
635-0221 |
|
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