Firm Capital American Realty Partners Trust Completes REIT Conversion and Reiterates Business Plan
January 08 2020 - 5:01PM
Firm Capital American Realty Partners Trust (the
“
Trust”), (TSXV: FCA.U), (TSXV: FCA.UN) is pleased
to announce that it has commenced trading as a Trust following its
conversion from its predecessor corporation that took effect on
January 1, 2020.
The Trust trades on the TSXV Exchange under the
ticker symbols FCA.U and FCA.UN for US and Canadian Dollar trading,
respectively. In addition, the Trust has a series of Convertible
Unsecured Debentures and Warrants trading on the TSXV Exchange
under the ticker symbols FCA.DB and FCA.WT.U, respectively.
TRUST INVESTMENT OVERVIEW: The
Trust specializes in the investment and ownership of US
multi-residential properties with a focused strategy of: (I) Core
Markets: Wholly owned multi residential acquisitions; (II) Core and
Non-Core Markets: Joint venture real estate acquisitions in
partnership with industry operating leaders and; (III) Bridge
lending of mortgage and preferred capital secured by
multi-residential properties:
- CORE MARKETS: WHOLLY OWNED
INVESTMENTS: The Trust is focused on growing its wholly
owned multi-residential property portfolio in large core markets
with a particular attention to cities located in Texas, Florida,
New Jersey, North and South Carolina, Colorado, Georgia and New
York. Currently, the Trust owns a 100% interest in 311
multi-family apartment units located in Sunrise, Florida and
Austin, Texas with an IFRS value of $47.3 million.
- CORE AND NON-CORE MARKETS:
JOINT VENTURE INVESTMENTS:The Trust will also purchase in
both core and non-core markets where it lacks knowledge or
experience, partial ownership interests in multi-residential
properties with industry leaders as partners. These partners bring
both expertise in operations and knowledge, especially in non-core
markets. The Trust strives to have a minimum 50% ownership interest
and will fund the equity in a combined preferred/common equity
investment structure. The preferred equity provides a fixed rate of
return for investors in the Trust, resulting in a secured structure
ahead of the partners ownership interest, while the common equity
provides investors an upside return for investors as the investment
meets its targeted objectives. Preferred equity returns are
approximately 8.4% per annum. Currently, the Trust has partial
ownership interests in eight joint ventures comprised of 1,512
multi-family apartment units with a combined IFRS value of
approximately $84.4 million (on a proportionate consolidated basis)
as outlined below:
-
- Houston, TX: 50%
interest in 235 multi-family apartment units;
- Irvington, NJ: 50%
interest in 189 multi-family apartment units;
- Canton, GA: 50%
interest in 138 multi-family apartment units;
- Bronx, NY: 50%
interest in 132 multi-family apartment units;
- Hartford, CT: 50%
interest in 109 multi-family apartment units;
- Bridgeport, CT:
30% interest in 462 multi-family apartment units;
- Brentwood, MD: 25%
interest in 118 multi-family apartment units; and
- New York, NY:
22.8% interest in 129 multi-family apartment units.
- MORTGAGE
LENDING:The Trust, using Firm Capital’s plus 30-year
experience as a leader in the mortgage lending industry, provides
bridge lending of mortgage and preferred capital secured by
residential / multi-residential properties. The Trust
currently has invested $5.2 million as a participant as a syndicate
partner in a mortgage and preferred capital portfolio with a 12.0%
per annum weighted average interest rate, encumbering 1,405
multi-family apartment units. Firm Capital Corporation is the
mortgage banker and loan servicer.
STRONG BASE OF GROSS ASSETS:As
at September 30, 2019 and pro-forma all recent acquisition
activity, the Trust had gross assets of approximately $148.7
million on an IFRS proportionate consolidated basis.
GROWING NET ASSET VALUE (“NAV”) PER
UNIT:As at September 30, 2019, NAV per Unit was $9.07,
Since Q3/2017, the Trust has grown NAV at a +10% CAGR from $7.85
per Unit to its current level.
STABLE DISTRIBUTIONS THAT ARE LARGELY
RETURN OF CAPITAL:The Trust’s current distribution policy
is quarterly with a current distribution of $0.059 per unit quarter
or $0.236 per unit annualized. However, it is the Trust’s intent to
go to monthly distributions in due course. Further, it is
anticipated that the Trust’s Return of Capital for 2020 will be
approximately 85% of distributions.
STRONG BOARD OF TRUSTEES WITH
SIGNIFICANT OWNERSHIP: The Trust has a strong board of
trustees with significant experience in real estate, capital
markets, lending and finance. In addition, the board of trustees
have a significant stake in the Trust, controlling approximately
40% of the trust units.
The Board of Trustees is comprised of the
following:
-
- Ojus Ajmera
- Geoffrey Bledin
- Eli Dadouch
- Pat DiCapo
- Robert Janson
- Sandy Poklar
- Keith Ray
- Scott Reid
- Howard Smuschkowitz
TICKER SYMBOLS: The Trust
trades on the TSXV Exchange under the ticker symbols FCA.U and
FCA.UN for US and Canadian Dollar trading, respectively. In
addition, the Trust has a series of Convertible Unsecured
Debentures and Warrants trading on the TSXV Exchange under the
ticker symbols FCA.DB and FCA.WT.U, respectively.
FORWARD LOOKING
INFORMATIONCertain 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 press release include statements relating to the
timing of trading of the Trust's securities. 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 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, including those described in the
Trust’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 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.
For further information, please contact: |
|
|
Eli Dadouch |
Sandy Poklar |
President & Chief Executive Officer |
Chief Financial Officer |
(416) 635-0221 |
(416) 635-0221 |
|
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