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TORONTO, Feb. 20, 2018 (GLOBE NEWSWIRE) -- Firm Capital American Realty Partners Corp. (the “Company”) (TSXV:FCA.U) (TSXV:FCA) is pleased to announce the following transactions:
Acquisition in Irvington, NJ
The Company is under contract with a partner as outlined below, subject to customary closing conditions, for the acquisition of a multi-family residential portfolio in Irvington, New Jersey (the “Portfolio”), comprised of 7 different properties and 189 units in total (184 apartment units and 5 ground floor retail units). The Portfolio will be be acquired by the Company (the “Acquisition”) for a purchase price (excluding transaction costs) of approximately US$17.8 million, representing a going-in capitalization rate of approximately 5.8%, or approximately US$94,180 per unit. The Acquisition will be financed with 7 individual 20-year non-recourse first mortgage loans from a U.S. government-sponsored enterprise for approximately US$14.2 million, or approximately 80% loan-to-cost, at an estimated interest rate of 3.85% fixed for the initial 5-year period, with interest-only for the first 12 months, and a 30-year amortization period.
The Company will complete the Acquisition through an investment of approximately US$3.4 million, for a 50% ownership interest in a joint venture with an experienced New York City based real estate owner and operator who will own the other 50%. The Company expects the Acquisition to close within the next 30 days and will fund it from cash on hand.
Acquisition in Houston, TX
The Company is under contract with a partner as outlined below, subject to customary closing conditions, for the acquisition of a multi-family residential property in Houston, Texas (the “Property”), comprised of 12 buildings and 235 apartment units. The Property will be acquired by the Company (the “Acquisition”) for a purchase price (excluding transaction costs) of approximately US$15.3 million, representing a going-in capitalization rate of approximately 6.2%, or approximately US$65,106 per unit. The Acquisition will be financed with a 10-year non-recourse first mortgage loan from a U.S. government-sponsored enterprise for approximately US$11.6 million, or approximately 76% loan-to-cost, at an estimated interest rate of 4.85% fixed for the 10 years, with interest-only for the first 12 months, and a 30-year amortization period.
The Company will complete the Acquisition through an investment of approximately US$4.7 million, for a 50% ownership interest in a joint venture with an experienced New York City based real estate owner and operator who will own the other 50%. The Company expects the Acquisition to close within the next 30 days and will fund it from cash on hand.
Closing of Supplemental Loan
The Company has closed the previously announced supplemental first mortgage loan of approximately $4.0 million (the “Supplemental Loan”) from the existing lender on its multi-family residential property located in Sunrise, Florida (the “Property”) with a fixed interest rate of approximately 5.8%, a term to maturity of approximately 4.6 years and co-terminous with the existing first mortgage loan (the “Existing Loan”), and a 30-year amortization period.
As at September 30, 2017, the pro forma weighted average fixed interest rate for the Existing Loan and the Supplemental Loan would have been approximately 4.9%. Based on the Company’s carrying value for the Property as at September 30, 2017, the Existing Loan represented a loan-to-value (“LTV”) of approximately 34.5% and pro forma for the Supplemental Loan, the LTV would have been approximately 51.8%.
The Company will use the net cash proceeds from the Supplemental Loan to fund the aforementioned acquisitions in Irvington, NJ and Houston, TX.
About the Company
The Company is a U.S. focused real estate investment entity that pursues real estate and debt investments through the following investment platforms:
- Income Producing Real Estate Investments: Acquiring income producing real estate assets in major cities across the United States. Acquisitions are completed by the Company primarily in joint venture partnerships with local industry expert partners who retain property management responsibility; and
- Mortgage Debt Investments: Real estate debt and equity lending platform in major cities across the United States, focused on providing all forms of bridge mortgage loans and joint venture capital.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain 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 those described in the Company’s Annual Information Form under “Risk Factors” (a copy of which can be obtained at www.sedar.com). Those risks include, without limitation, the ability of the Company to complete the Offering and if so, to allocate the net proceeds as stated above; risks associated with general economic conditions; adverse factors affecting the U.S. real estate market generally or those specific markets in which the Company holds properties; volatility of real estate prices; inability to complete the Company’s single family property disposition program or debt restructuring in a timely manner; 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 Company to implement its business strategies; competition; currency and interest rate fluctuations and other risks.
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. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, either as a result of new information, future events or otherwise.
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.
For further information, please contact:
| Kursat Kacira | Sandy Poklar | |
| President & Chief Executive Officer | Chief Financial Officer | |
| (416) 635-0221 | (416) 635-0221 |