HOUSTON, TX - Preferred Apartment Communities, Inc. announced that on December 2, 2014 Preferred Apartment Communities Operating Partnership, its operating partnership, signed a Purchase and Sale Contract to acquire two multifamily communities in Houston, Texas representing an aggregate of 520 units.
"We're very pleased to have the opportunity to acquire these Class A multifamily assets," said Daniel M. DuPree, the Company's Chief Investment Officer and Vice Chairman. DuPree continued, "These assets are located in strong and growing submarkets in Houston, and have superior finishes and attached garages." Leonard A. Silverstein, the Company's President and Chief Operating Officer, further added, "These two transactions reflect PAC's continued acquisition growth strategy." "We intend to fund these acquisitions with first mortgage debt financing for each community, together with cash on hand, borrowings under our senior secured credit facility and other available capital sources. As with our most recent acquisitions, we do not anticipate the need for capital raised through a traditional secondary common stock offering," said Silverstein.
Under the Purchase Agreement, PAC has agreed to acquire the Avenues at Northpointe a 280-unit multifamily community, and the Avenues at Cypress, a 240-unit multifamily community, both located in Houston, Texas for an aggregate purchase price of approximately $76 million, exclusive of acquisition-related and financing-related transaction costs. PAC's inspection period expired on January 9, 2015 and PAC expects to complete the Acquisition in February 2015.
The Company currently is in discussion with Freddie Mac to provide a first mortgage loan on Cypress and with Fannie Mae to provide a first mortgage loan on Northpointe at approximately 65% of the underwritten value of the Acquired Communities, or approximately $50.1 million in the aggregate. PAC expects each of the New Loans will have a seven year maturity, will be secured only by the respective Acquired Community to which the New Loans relate, and will have no loan guaranties by the Company or PAC-OP.
PAC further expects the New Loan for Cypress will bear interest at a fixed rate of approximately 1.4% over the interest rate on the 7-Year United States Treasury security, which we have index-locked at 2.05%, and the New Loan on Northpointe will bear interest at a fixed rate of 3.16% per annum. PAC anticipates the New Loan for Northpointe will require monthly installments of interest only through the second year of the New Loan and will amortize over a 30-year term for the balance of its stated term and anticipates the New Loan for Cypress will amortize over a 30-year term for its stated term.
Source: Preferred Apartment Communities / #Apartments #Multifamily