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TORONTO, Feb. 1, 2018 /CNW/ - Starlight U.S.
Multi-Family (No. 5) Core Fund (TSX.V: STUS.A, STUS.U) (the "Fund")
announced today it has acquired Altis at Sand Lake ("Sand Lake"), a 315-suite
multi-family property completed in 2016 and located in Orlando, Florida at 7118 Altis Way. The
acquisition of Sand Lake improves
the average vintage of the Fund's portfolio from 2011 to 2012 and
is expected to be immediately accretive.
The acquisition of Sand Lake
was completed by utilizing a portion of the proceeds from a new
revolving credit facility ("Credit Facility") that is secured by
six properties, including Sand
Lake, for gross proceeds of approximately $259.5 million. The Credit Facility has a five
year term with an interest only rate of U.S. one-month LIBOR plus
2.00%. The Credit Facility proceeds will also be utilized to repay
a tranche of financing on a recently acquired property in
Dallas, Texas, lowering the
interest rate on the financing secured on that property to U.S.
one-month LIBOR plus 2.00% from a blended rate of approximately
U.S. one-month LIBOR plus 3.00%. The remaining proceeds from the
Credit Facility will be utilized to finance value-enhancing capital
expenditures across the Fund's apartment portfolio.
Pursuant to purchase and sale agreements made and entered into
on January 10, 2018, as amended from
time to time, the Fund indirectly purchased Sand Lake for a purchase price of
approximately US$69.3 million. In
connection with the acquisition of Sand
Lake, financing in the amount of approximately US$50.7 million has been secured through the
Credit Facility.
"The Credit Facility demonstrates the Fund's continued success
at implementing its strategy surrounding enhancing asset values and
allows the Fund to execute on its business plan of improving the
Fund's portfolio vintage and implementing its value-enhancing
capital expenditure program," commented Evan Kirsh, the Fund's President. "With the
acquisition of Sand Lake, the Fund
has added a high quality, newly constructed apartment community in
one of the strongest performing markets in the United States."
Sand
Lake
Sand Lake is
located approximately 20 minutes from downtown Orlando, a major employment centre, and
consists of 13 three-storey garden style apartment buildings on a
13.2 acre site. Each suite at Sand
Lake features gourmet kitchens with granite countertops,
under mount sinks, stainless steel appliances, pendant lighting,
kitchen islands or breakfast bars and a full-size chef's pantry.
Suites also include wood-style plank flooring, in-suite washers and
dryers, spacious soaking tubs, designer tile flooring, private
balconies, additional storage, and, in select suites, direct access
parking garages. Indoor amenities consist of a 24-hour fitness
centre, a high energy game room, a luxurious modern clubhouse with
an ultra-luxe theatre, free Wi-Fi, a Starbucks lounge, kitchen,
billiards table and flat screen televisions, and a business centre.
Exterior features include a resort-style saltwater swimming pool,
an entertainment area with a fire pit, an outdoor kitchen with
grills and televisions, a pet park, a community garden, a
playground and an expansive courtyard with fountains as well as 130
direct access parking garages, a unique feature for the submarket.
In the surrounding area, major employers include Sea World, Disney,
Dr. Phillips Hospital, UCF Rosen College of Hospitality Management
and the Darden headquarters. As of January
10, 2018, Sand Lake's
occupancy was 91.4%.
Following completion of the acquisition, the Fund retained
Altman Management Company ("Altman") to property manage
Sand Lake. Altman currently
manages two apartment communities, including Sand Lake, for Starlight U.S. Multi-Family in
Orlando and Tampa, Florida.
The Fund Portfolio
Following the acquisition of
Sand Lake, the Fund has interests
in and operates a portfolio comprising 7,442 multi-family suites in
24 recently constructed, Class "A" stabilized, income producing
apartment communities with an average year of completion of 2012
and located in Arizona,
Colorado, Florida, Georgia, Nevada, North
Carolina, Tennessee and
Texas.
About Starlight U.S. Multi-Family (No. 5) Core
Fund
The Fund is a limited partnership formed under the
Limited Partnerships Act (Ontario)
for the primary purpose of indirectly acquiring, owning and
operating a portfolio of diversified income-producing rental
properties in the U.S. multi-family real estate market.
Securities Law
The acquisition of Sand Lake constitutes a "related party
transaction" under Multilateral Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions ("MI
61-101"). The Fund relied on the exemptions from the formal
valuation and minority approval requirements set out in subsection
5.5 (a) and paragraph 5.7 (1)(a) of MI 61-101, respectively.
Sand Lake's acquisition was
approved by the Fund's Board of Directors (other than Daniel Drimmer, who declared his interest in the
acquisition of Sand Lake and was
recused from voting) in accordance with the Fund's amended and
restated limited partnership agreement dated as of October 12, 2016.
Forward Looking Statement
This news release contains
statements that may constitute forward-looking statements within
the meaning of Canadian securities laws and which reflect the
Fund's current expectations regarding future events, including
statements concerning the future financial performance of
Sand Lake, the overall financial
performance of the Fund resulting from the acquisition of
Sand Lake and the Credit Facility
and the use of proceeds of the Credit Facility Particularly,
statements regarding future results, performance, achievements,
prospects or opportunities for the Fund or the real estate industry
are forward-looking statements. In some cases, forward-looking
statements can be identified by terms such as "may", "might",
"will", "could", "should", "would", "occur", "expect", "plan",
"anticipate", "believe", "intend", "seek", "aim", "estimate",
"target", "project", "predict", "forecast", "potential",
"continue", "likely", "schedule", or the negative thereof or other
similar expressions concerning matters that are not historical
facts.
The forward-looking statements in this news release involve
risks and uncertainties, including those set forth in the Fund's
materials filed with the Canadian securities regulatory authorities
from time to time at www.sedar.com. Actual results could differ
materially from those projected herein. Those risks and
uncertainties include, among other things, risks related to: the
overall financial performance of Sand
Lake and the Fund's portfolio resulting from the acquisition
of Sand Lake and the Credit
Facility; the use of proceeds of the Credit Facility; reliance on a
wholly-owned subsidiary of Starlight Group Property Holding Inc.,
the Fund's manager; the expected benefits of the ownership of
Sand Lake; the property management
of Sand Lake; the experience of
the Fund's officers and directors; substitutes for residential real
estate rental suites; reliance on property management; competition
for real property investments and tenants; and U.S. market
factors.
Information contained in forward-looking statements is based
upon certain material assumptions that were applied in developing
such forward-looking statements including management's perceptions
of historical trends, current conditions and expected future
developments, as well as other considerations that are believed to
be appropriate in the circumstances, including the following: the
overall financial performance of the Fund's portfolio resulting
from the acquisition of Sand Lake
and the Credit Facility; the use of proceeds of the Credit
Facility; the ability of the manager of the Fund to manage and
operate the Fund's properties; the ability of the property managers
selected to manage the Fund's properties; the population of
multifamily real estate market participants; assumptions about the
markets in which the Fund operates; the global and North American
economic environment; foreign currency exchange rates; and
governmental regulations or tax laws.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Starlight U.S. Multi-Family (No. 5) Core Fund