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TORONTO, Dec. 15, 2020 /CNW/ - Starlight U.S.
Multi-Family (No. 1) Core Plus Fund (TSX.V: SCPO.UN) (the "Fund")
announced today that it has acquired (the "Acquisitions") The
Bluffs at Highlands Ranch ("The
Bluffs") and LaVie Southpark ("LaVie") (together, the "Acquired
Properties"). The Bluffs is a 340-suite, Class "A", garden-style,
core-plus multi-family property completed in 1994 and located in
the Metropolitan Area of Denver,
Colorado, while LaVie is a 321-suite Class "A" mid-rise
multi-family property completed in 2015 and located in Charlotte, North Carolina.
Pursuant to separate purchase and sale agreements with separate
vendors, the Acquired Properties were purchased through
wholly-owned indirect subsidiaries of the Fund (Bluffs Acquisition
LLC for The Bluffs and LaVie Acquisition LLC for LaVie)
unencumbered for a combined price of US$185.75 million. In connection with the
Acquisitions, the Fund has expanded the committed availability on
its existing credit facility which matures November 1, 2024 by US$50.0 million to US$300.0 million, of which the Fund had drawn
US$127.65 million prior today's date
(the "Credit Facility") and has drawn (i) an additional
US$122.6 million from the Credit
Facility for the Acquisitions; and (ii) US$36.2 million relating to the refinancing of
the Fund's Autumn Vista Apartments property. The Credit Facility
carries interest only payments until maturity at the U.S. 30-day
Secured Overnight Financing Rate ("SOFR") + 2.37%. The Fund has
also entered into a one year, open, unsecured loan on market terms
for a loan of this nature of 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. Including the Loan, the weighted average interest rate for
the financing of the Acquisitions is approximately 2.93%.
"We are delighted to complete the purchase of two high-quality
properties in The Bluffs at Highlands
Ranch and LaVie Southpark which will further diversify the
Fund's portfolio and present strong opportunities for growth in net
operating income and value," commented Evan
Kirsh, the Fund's President. "We are also pleased that the
Fund has now completed the deployment of its initial public
offering proceeds having assembled a geographically diversified
portfolio of 2,219 multi-residential suites which the Fund will
continue to diligently asset manage to maximize returns for our
unitholders."
The Bluffs at Highlands
Ranch
The Bluffs consists of 37, three storey walk-up buildings on a
21.0-acre site comprised of one-bedroom, two-bedroom and
three-bedroom suites, in addition to one two-storey clubhouse
building. Currently, suites feature quartz countertops with
undermounted sinks, upgraded plumbing fixtures, stainless steel
appliances, updated lighting and upgrades to the flooring in
entryways and wet areas (kitchen and bath) for all suites and
additionally in the living areas of all ground floor suites. The
suites also include a built-in dry bar area, balconies for every
bedroom, gas fireplaces, washers and dryers, large bedroom closets
and vaulted ceilings in select suites. Indoor amenities include an
expansive clubhouse, state-of-the-art fitness centre with on-demand
WEXER fitness classes and Peloton bikes, media room, business
centre, recreation room with a shuffleboard, racquetball court,
sauna and dog wash station. Outdoor amenities include a
resort-style pool with spa and sundeck, outdoor fireplace and
seating area, basketball court, tennis court, volleyball court,
jogging trails, dog park, and package lockers. As part of the
Fund's business plan, The Bluffs will be further repositioned to a
modern standard with additional upgrades to suite finishes, common
areas and amenity spaces, and the property's curb appeal will be
improved.
The Fund has retained Avenue5 Residential ("Avenue5") to
property manage The Bluffs. Avenue5 is currently the
15th largest property management company in the United States with approximately 70,000
apartment units under management.
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, undermounted sinks with gooseneck
faucets, 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 a 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.
The Fund has retained RKW Residential ("RKW") to property manage
LaVie. RKW is a boutique property management company with over
20,000 apartment units under management, including the Fund's
Southpoint Crossing Apartments property located in Raleigh, North Carolina.
The Fund Portfolio
With the Acquisitions, the Fund has interests in and operates a
portfolio comprising 2,219 multi-family suites in seven class "A"
core-plus, income producing apartment 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 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 and the
Acquired Properties. 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
operations of the Acquired Properties; the impact of COVID-19 on
the Fund's portfolio, including the Acquired Properties, 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 the Acquired
Properties;; 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 the Acquired
Properties; the impact of COVID-19 on the Fund's portfolio,
including the Acquired Properties, 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