/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TORONTO,
Feb. 24, 2014 /CNW/ - Starlight U.S.
Multi-Family Core Fund (TSX.V: UMF.A, UMF.U) (the "Fund")
and Starlight U.S. Multi-Family (No. 2) Core Fund (TSX.V: SUD.A,
SUD.U) ("Fund No. 2") announced today that they have entered
into an agreement to acquire Soho Parkway Apartments ("Soho
Parkway"), a 379 unit, garden style, Class A, apartment complex
built in 2008 and located at 6653 McKinney Ranch Parkway in
McKinney, Texas, a rapidly growing
area of North Dallas.
In connection with the acquisition, the Fund is
expected to acquire a 25% interest and Fund No. 2 is expected to
acquire a 75% interest in Soho Parkway. In order to satisfy its
cash portion of the purchase price, the Fund has secured a
supplementary loan on the Falls of
Copper Lake for up to approximately US$4,000,000 that will mature on April 1, 2017. The supplementary loan will be
interest only for the entire term and will be payable at a rate
equal to the interpolated three-year United States Treasury Yield +
3.52%. Fund No. 2 expects to satisfy its cash portion of the
purchase price with the remaining proceeds from its initial public
offering completed on November 15,
2013 at which time Fund No. 2 will be fully deployed.
Each of the Fund and Fund No. 2 are expected to
assume responsibility for the liabilities of Soho Parkway on a
pro-rata ownership basis. It is expected, that all decision
making in respect of Soho Parkway, including day-to-day and
material decisions, will be shared by the Fund and Fund No. 2
equally through their established governance practices.
Soho Parkway
Soho Parkway consists of 16, three storey
walk-up buildings on a 15.04 acre site and is comprised of one, two
and three bedroom units. The apartment units are of an above
average size, well laid out and contain modern features including
laminate wood flooring, granite counter tops, cultured marble
vanities, brushed nickel fixtures and full size washer and dryer
sets. Amenities at Soho Parkway include a central clubhouse with a
24-hour state-of-the-art fitness centre, a resident lounge with a
large screen television and an executive business centre. Outdoor
amenities include a resort style pool with barbeque picnic areas.
Soho Parkway also has Wi-Fi high speed internet access throughout
the property. Soho Parkway's current occupancy is approximately
90.8%.
Following completion of the acquisition, it is
expected that property management at Soho Parkway will be
transferred to the Pinnacle Family of Companies
("Pinnacle"), the fourth largest third party, multi-family
property manager in the United
States. Pinnacle is currently managing Bridgemoor at
Denton and Greenhaven Apartments
located in North Dallas and
Villages of Towne Lake located in Houston for the Fund.
Pursuant to a purchase and sale agreement made
as of January 16, 2014, Soho Parkway
Acquisition LLC, an indirect wholly owned subsidiary owned 25% by
the Fund and 75% by Fund No. 2, has agreed to purchase Soho Parkway
unencumbered. It is expected that the Fund will contribute
US$10,325,000 for its 25% interest in
the property and Fund 2 will pay US$30,975,000 for its 75% interest in the
property. The purchase agreement contains customary representations
and warranties for a transaction of this nature. Subject to the
satisfaction or waiver of conditions precedent, the purchase of the
property is scheduled to close on or about April 1, 2014. The purchase agreement is a
material contract of Fund 2.
A first mortgage loan in respect of the purchase
of Soho Apartments in the amount of approximately US$28,300,000 has been secured for a three year
term with two one year extensions available. The loan will be
interest only for the entire term and will be payable at an annual
rate of LIBOR + 2.00%.
The Fund and Fund No. 2
Portfolios
Following completion of the acquisition of Soho
Parkway, the Fund expects to own and operate a portfolio comprising
interests in 1,747 recently constructed, Class "A" stabilized,
income producing multi-family real estate suites located in
Dallas-Fort Worth and Houston, Texas, and Fund No. 2 expects to own
and operate a portfolio comprising interests in 1,131 recently
constructed, Class "A" stabilized, income producing multi-family
real estate suites located in Austin, Dallas-Fort
Worth and Houston,
Texas.
About Starlight U.S. Multi-Family Core Fund
and Starlight U.S. Multi-Family (No. 2) Core Fund
Each of the Fund and Fund No. 2 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.
Forward-Looking Information
This news release contains statements that may
constitute forward-looking statements within the meaning of
Canadian securities laws and which reflect the current expectations
of the Fund and Fund No. 2 regarding future events, including
statements concerning the acquisition of Soho Parkway, the
financing of Soho Parkway and the refinancing of the Falls of Copper Lake by the Fund.
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 materials of the Fund and Fund No. 2 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: reliance on the manager of the Fund
and Fund No. 2; the ability to complete the acquisition of Soho
Parkway; the terms and availability of financing for Soho Parkway;
the terms and availability of supplementary financing for
the Falls of Copper Lake by the
Fund; the expected benefits of the ownership of Soho Parkway; the
relationship and obligations of the Fund and Fund No. 2 in respect
of Soho Parkway; the experience of the officers and directors and
the Fund and Fund No. 2; 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 ability of the Fund and Fund No. 2 to complete
the acquisition of Soho Parkway and secure acceptable financing;
the ability of the Fund to secure acceptable financing for
the Falls of Copper Lake; the
ability of the manager of the Fund and Fund No. 2 to manage and
operate Soho Parkway; the relationship and obligations between the
Fund and Fund No. 2 in respect of Soho Parkway; the inventory of
multi-family real estate properties; the population of multi-family
real estate market participants; assumptions about the markets in
which the Fund and Fund No. 2 operate; the global and North
American economic environment; foreign currency exchange rates; and
governmental regulations or tax laws. Readers are cautioned against
placing undue reliance on forward-looking statements. Except as
required by applicable Canadian securities laws, neither the Fund
nor its manager undertakes any obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
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 Core Fund