All amounts are in $US Dollars unless otherwise
stated
TORONTO, Dec. 19, 2016 /CNW/ - Firm Capital American
Realty Partners Corp. ("the "Company"), (TSXV : FCA.U) is
pleased to announce that the Company has agreed to invest
approximately $1.0 million in a 115
unit apartment building joint venture located in the Washington, D.C. area (the
"Property").
JOINT VENTURE MULTI-RESIDENTIAL INVESTMENT - WASHINGTON D.C.
The Property, which
consists of eight buildings, is located in Brentwood, Maryland and is being acquired for
$9.3 million (excluding $0.5 million of closing costs and $0.75 million of capital improvement reserves)
and at a 7.6% going-in capitalization rate. The Company, along with
a consortium of investors (collectively the "Firm Capital
Group") are acquiring a 50% interest in the joint venture (the
"Joint Venture") alongside a local owner/property manger in
the Washington, D.C. area
(collectively the "Partners").
The Joint Venture will acquire the Property and embark on a
program to refurbish the buildings, add units and apply more
hands-on management in order to increase the Net Operating Income
or NOI over a seven-year time horizon. The Joint Venture will
be funded, in part, through the assumption of two mortgages
totalling $7.8 million, with a
weighted average interest rate of 5.18%. The residual equity of
$2.7 million will be funded by a
group of investors including the Firm Capital Group in a
combination of 50% preferred equity funded by the Firm Capital
Group and 50% common equity split equally with the Partners. The
preferred equity will yield 8% per annum and the common equity is
expected to yield a seven-year Levered Internal Rate of Return
("IRR") of approximately 29%. On a blended basis, the
expected seven year Levered IRR for both the preferred and common
equity is anticipated to yield approximately 18%. The Property is
expected to produce sufficient cash flow immediately to pay the
preferred equity yield. The Company's expected pro-rata share of
the Joint Venture investment is approximately $1.0 million and will be funded from net proceeds
received from the recently closed $10.0
million Rights Offering. Closing of the Portfolio is
expected to occur during the fourth quarter of 2016.
NEW YORK CITY
MULTI-RESIDENTIAL JOINT VENTURE INVESTMENT
The Company is
also pleased to announce that it will close on its previously
announced New York City Joint Venture Investment on or about
December 20, 2016. The Company has
decided to invest approximately $6.0
million into this transaction.
SHARE CONSOLIDATION
The Company is also pleased to
announce that it will commence with the consolidation of all of the
issued and outstanding common shares of the Company such that the
trading price of the post-consolidation common shares of the
Company is $5.00 per common share
(the "Consolidation"). The Consolidation will be calculated
based on the 20-day Volume Weighted Average Trading Price or VWAP
of the common shares on the effective date of the consolidation
which is anticipated occur during the first quarter of 2017.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm
Capital American Realty Partners Corp. focuses on capital
partnership investing in U.S. income producing real estate &
mortgage debt investments.
The Company is focused on the following investment
platforms:
- Income Producing Real Estate Investments: Acquiring
income producing U.S. real estate assets in major cities across
the United States. Acquisitions
are completed solely by the Company or in joint-venture partnership
with local industry expert partners who retain property management;
and
- Mortgage Debt Investments: Real estate debt and equity
lending platform focused on 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 in this news release include, but are not limited to,
statements regarding the Company's intended use of the net proceeds
of the Rights Offering; the Company's intention to complete any
current or future proposed acquisitions; anticipated returns on its
Joint Venture Investments in Washington
D.C.; the anticipated closing date for the Joint Venture and
the closing date for the Consolidation.
Forward-looking statements necessarily involve known and unknown
risks, including, without limitation, 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, including those described in the
Company's public disclosure documents on SEDAR at
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.
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.
Additional information about the Company is available at
www.firmcapital.com or www.sedar.com.
SOURCE Firm Capital American Realty Partners Corp.