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TORONTO, March 15, 2018 /CNW/ - Starlight U.S.
Multi-Family (No. 5) Core Fund (TSX.V: STUS.A, STUS.U) (the "Fund")
announced today that it has sold Greenhaven Apartments
("Greenhaven"), a 216 suite, class "A", garden-style apartment
community located in north Dallas,
Texas and constructed in 2009, for sale price of
approximately US$32.60 million. The
Fund subsequently announced that it has entered into an agreement
to acquire Alexander Village, a
320 suite, Class "A", garden style apartment community completed in
2015 and located in Charlotte, North
Carolina at 9224 Graham Ridge Drive ("Alexander
Village").
Pursuant to purchase and sale agreements made and entered into
on March 15, 2018, as may be amended
from time to time, the Fund has agreed to purchase Alexander Village for the purchase price of
approximately US$59.10 million.
Subject to the satisfaction or waiver of conditions precedent, the
purchase of Alexander Village is
scheduled to close on or about March 28,
2018.
The acquisition of Alexander
Village will be on a partially tax-deferred basis and
satisfied by approximately $19.72M of
cash through the proceeds of the sale of Greenhaven and the
previously announced sale of The Villages at Sunset Ridge in
Houston, Texas. The remaining
portion of the acquisition will be satisfied through the expansion
of the previously announced revolving credit facility ("Credit
Facility"), to be secured by seven properties including
Alexander Village, at an interest
only rate of U.S. one-month LIBOR plus 2.00%. The acquisition of
Alexander Village will improve the
Fund's geographical diversification, average portfolio vintage, and
average number of apartment suites per apartment community,
enhancing operational efficiencies to drive net operating income
("NOI") growth.
"The sale of Greenhaven Apartments and The Villages at Sunset
Ridge, and the redeployment of proceeds into Alexander Village, highlights the Fund's
strategy to continue to dispose of smaller, older apartment
complexes and recycle proceeds into larger and newer vintage
properties in order to improve the Fund's geographical
diversification, key operating metrics and provide better economies
of scale and enhanced returns," commented Evan Kirsh, the Fund's President.
Alexander Village
Alexander Village is located
approximately 14 kilometres northeast of downtown Charlotte in the University Research Park. The
property consists of twelve, three and four storey walk-up
buildings and four, one storey cottages on an approximately 18.5
acre site comprised of one, two, and three bedroom suites.
Alexander Village's suites feature
modern interior finishes including stainless steel appliances,
granite countertops, custom cabinetry, tile backsplashes, under
mount sinks, new carpet and wood-style plank flooring, walk-in
closets, soaker tubs and a full-size catering kitchen. As at
March 8, 2018, Alexander Village's occupancy was 92.5%.
Following completion of the acquisition, the Fund expects to
retain Greystar Real Estate Partners ("Greystar"), the largest
third-party multi-residential property management company in
the United States to property
manage Alexander Village. Greystar
currently manages eight apartment communities, including
Alexander Village, for Starlight
U.S. Multi-Family in Atlanta,
Georgia; Charlotte and
Raleigh, North Carolina;
Denver, Colorado; and Houston, Texas.
About Starlight U.S. Multi-Family (No. 5) Core 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 diversified income producing rental properties in the
U.S. multi-family real estate market. Following completion of the
acquisition of Alexander Village,
the Fund will own 23 properties, consisting of 7,289 suites with an
average year of completion in 2012.
Securities Law
The acquisition of Alexander
Village 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 (a) and paragraph 5.7 (1)(a)
of MI 61-101, respectively. Alexander
Village's acquisition was approved by the Fund's Board of
Directors (other than Daniel
Drimmer, who declared his interest in the acquisition of
Alexander Village and was recused
from voting) in accordance with the Fund's amended and restated
limited partnership agreement dated as of October 12, 2016.
Non-IFRS Financial Measures
NOI does not have a standardized definition prescribed by
International Financial Reporting Standards ("IFRS") and is,
therefore, unlikely to be comparable to similar measures presented
by other reporting issuers. The Fund uses this measure to better
assess the Fund's underlying performance and financial position and
provides this additional measure so that investors may do the same.
Details on non-IFRS measures are set out in the Fund's management's
discussion and analysis for the period ended December 31, 2017 that is available on the Fund's
profile on SEDAR at www.sedar.com.
About Starlight U.S. Multi-Family (No. 5) Core Fund
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 statements concerning future
acquisitions and their impact on the Fund's geographical
diversification, average portfolio vintage and NOI growth
opportunities. 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 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
reliance on a wholly-owned subsidiary of Starlight Property
Holdings Inc., the Fund's manager; 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
ability of the Fund to complete future acquisitions and their
impact on the Fund's geographical diversification, average
portfolio vintage, and NOI growth opportunities; the inventory of
multi-family real estate properties; the availability of mortgage
financing and current interest rates; the extent of competition for
properties; the population of multi-family real estate market
participants; assumptions about the markets in which the Fund
operates; the ability of the Fund to manage and operate the
properties; 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 specifically required by
applicable Canadian laws, the Fund undertakes no obligation to
update or revise publicly any forward-looking 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. 5) Core Fund