ATLANTA, GA - Preferred Apartment Communities, Inc. announced that on July 25, 2014 Preferred Apartment Communities Operating Partnership, L.P., its operating partnership, signed an Agreement of Purchase and Sale with Sandstone Overland Park, LLC; Estancia Dallas, LLC; Stoneridge Nashville, LLC; and Vineyards Houston, LLC to acquire an aggregate of 1,397 multifamily units.
"I've visited all of the communities and believe they are a perfect fit, both in terms of location and quality, with our existing portfolio," said John A. Williams, PAC's Chairman and Chief Executive Officer. Williams added, "I'm confident we're buying these assets at a substantial discount to current replacement cost and believe they will be very accretive to our stockholders."
Under the Purchase Agreement, PAC has agreed to acquire a fee simple interest in a 364-unit multifamily community on approximately 29.3 acres in Kansas City, Kansas; a fee simple interest in a 300-unit multifamily community on approximately 15.0 acres in Dallas, Texas; a fee simple interest in a 364-unit multifamily community on approximately 30.5 acres in Nashville, Tennessee; and a fee simple interest in a 369-unit multifamily community on approximately 31.5 acres in Houston, Texas for an aggregate purchase price of $181.7 million, exclusive of acquisition-related and financing-related transaction costs. PAC expects the Acquisition will close late in the third quarter or early in the fourth quarter of 2014.
The Company expects to fund the acquisition of the Acquired Communities with planned debt financing for each Acquired Communities and a combination of the following: cash on hand; borrowings under the Company's senior secured credit facility with KeyBank National Association; bridge-debt financing; net proceeds from additional issuances of our securities, including under our Series A Redeemable Preferred Stock and Warrant Unit offering and common stock under our current shelf registration statement; and net proceeds from refinancing certain of our existing assets.
The Company currently is in discussion with Freddie Mac to provide a non-recourse first mortgage loan on each of the Acquired Communities at approximately 65% of the purchase price, or approximately an aggregate of $118 million for all of the Acquired Communities. PAC expects each of the New Loans will be non-recourse to the borrower, will mature in five to seven years, and will bear interest at a fixed rate of approximately 1.4% over the interest rate on the 5- or 7-Year United States Treasury security. The Company expects each of the New Loans will require monthly installments of interest only through the first year of the New Loans and will amortize over a 30-year term for the balance of the stated term of the New Loans. PAC expects each New Loan will only be secured its respective Acquired Community and there will be no loan guaranties by the Company or PAC-OP.
Source: Preferred Apartment Communities / #Apartments #Multifamily