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TORONTO, Dec. 9, 2020 /CNW/ - Starlight U.S. Multi-Family
(No. 1) Core Plus Fund (TSX.V: SCPO.UN) (the "Fund") announced
today that it has entered into an agreement to acquire LaVie
Southpark ("LaVie"), a 321-suite Class "A" mid-rise multi-family
property completed in 2015 and located in Charlotte, North Carolina (the
"Acquisition").
Pursuant to a purchase and sale agreement (the "Agreement")
dated December 8, 2020, LaVie
Acquisition LLC, a wholly owned indirect subsidiary of the Fund,
has agreed to purchase LaVie unencumbered for approximately
US$77.25 million. The Agreement
contains customary representations and warranties for a transaction
of this nature and, subject to the satisfaction or waiver of
conditions precedent, is scheduled to close on or about
December 15, 2020. In connection with
the Acquisition, the Fund is expected to expand the committed
availability on its existing credit facility which matures
November 1, 2024 by approximately
US$50.0 million to approximately
US$300.0 million, of which the Fund
has drawn US$127.65 million to date
(the "Credit Facility"). The Fund expects to draw approximately:
(i) an additional US$49.0 million
from the Credit Facility for the acquisition of LaVie; (ii)
US$74.6 million for the previously
disclosed acquisition of Bluffs at Highlands Ranch; and (iii) US$36.3 million relating to the refinancing of
the Fund's Autumn Vista property. The Credit Facility carries
interest only payments until maturity at the U.S. 30-day Secured
Overnight Financing Rate ("SOFR") + 2.35% for the initial
US$250.0 million tranche of the
Credit Facility and SOFR + 2.45% on the expansion amount of
US$50.0 million. While the Fund
intends to purchase LaVie using only cash on hand and third-party
debt proceeds from the Credit Facility, if there is a shortfall,
the Fund may enter into a one-year, open, unsecured loan on market
terms for a loan of this nature of approximately US$6.4 million (the "Loan") from Daniel Drimmer, a unitholder of the Fund as well
as the Chief Executive Officer and a Director of the general
partner of the Fund. Assuming the full amount of the Loan is drawn,
the weighted average interest rate for the financing of the
acquisition of LaVie would be approximately 3.61%.
"The purchase of LaVie further diversifies the Fund's portfolio
with the apartment community presenting a strong opportunity for
growth as it is well located in the highly sought-after Southpark
submarket of Charlotte." commented
Evan Kirsh, the Fund's President.
"We are also pleased that with the acquisitions of LaVie and, the
Bluffs at Highlands Ranch, the
Fund will have completed the deployment of its initial public
offering proceeds having assembled a geographically diversified
portfolio of 2,219 apartment suites which the Fund will continue to
diligently asset manage to maximize returns for our
unitholders."
LaVie Southpark
LaVie consists of one, mid-rise five storey building on a
7.3-acre site comprised of studio, one-bedroom and two-bedroom
suites. Currently, suites feature full size washers and dryers,
fully wired fiber high speed internet, granite countertops,
stainless steel appliances, undermount sink with gooseneck faucet,
tile backsplash, high ceilings, walk-in closets, wood-style plank
flooring, and kitchen islands in select suites. Indoor amenities
include a clubroom, chef-quality demonstration kitchen, two-storey
fitness centre with yoga studio, pet spa, coffee bar, secured
access buildings and parking deck. Outdoor amenities include wooded
dog park, nearby walking trails, saltwater swimming pool, spacious
courtyard, outdoor kitchen, fireplace and elegant landscaping. As
part of the Fund's business plan, LaVie will be further
repositioned with additional upgrades to suite finishes, common
areas and amenity spaces.
Upon completion of the acquisition, the Fund is planning to
retain RKW Residential ("RKW") to property manage LaVie. RKW is a
boutique property management company with over 20,000 suites under
management, including the Fund's Southpoint Crossing Apartments
property located in Raleigh, North
Carolina.
The Fund Portfolio
Following the Acquisition and the previously announced
acquisition of The Bluffs at Highlands
Ranch scheduled to close on or about December 15, 2020, the Fund expects to have
interests in and operate a portfolio comprising 2,219 multi-family
suites in seven class "A" core-plus, income producing multi-family
communities located in Tampa,
Florida; Atlanta, Georgia;
Nashville, Tennessee, Charlotte and Raleigh, North Carolina; Austin, Texas; and Denver, Colorado.
About Starlight U.S. Multi-Family (No. 1) Core Plus
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 income producing rental properties in the United States multi-family real estate
market.
Securities Law
The Loan, if made by Daniel Drimmer to the Fund, 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(b) and paragraph 5.7(1)(f)
of MI 61-101, respectively. The Loan was approved by the Fund's
Board of Directors (other than Daniel Drimmer, who declared
his interest in the Loan and was recused from voting) in accordance
with the Fund's second amended and restated limited partnership
agreement dated as of February 6, 2020.
Forward-looking Statements
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 the financial performance of the
Fund and its properties, including the impact of
COVID-19 on the business and operations of the Fund, LaVie and
Bluffs at Highlands Ranch.
Particularly, statements regarding future results, performance,
achievements, prospects or opportunities for 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
acquisition and financing of LaVie and Bluffs at Highlands Ranch; the impact of COVID-19 on the
Fund's portfolio, including LaVie and Bluffs at Highlands Ranch, as well as the impact of
COVID-19 on the markets in which the Fund operates and the
trading price of the Fund's listed units; the applicability of any
government regulation concerning the Fund's tenants or rents as a
result of COVID-19; reliance on the Fund's manager; the expected
benefits of the ownership of LaVie and Bluffs at Highlands Ranch; the property management of
LaVie; 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 including as
a result of the acquisition and financing of LaVie and Bluffs at
Highlands Ranch; the impact
of COVID-19 on the Fund's portfolio, including LaVie and
Bluffs at Highlands Ranch, as well
as the impact of COVID-19 on the markets in which the Fund operates
and the trading price of the Fund's listed units; the applicability
of any government regulation concerning the Fund's tenants or rents
as a result of COVID-19; 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 multi-family 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. Readers
are cautioned against placing undue reliance on forward-looking
statements. Except as required by applicable Canadian securities
laws, none of the Fund or its manager undertake 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 (No. 1) Core Plus Fund