All amounts are in US Dollars unless otherwise
stated.
TORONTO, Nov. 5, 2018 /CNW/ - Firm Capital American Realty
Partners Corp. (the "Company"), (TSXV: FCA.U), (TSXV: FCA)
is pleased to announce a $29.5
million New York City
acquisition, non-brokered private placement and new independent
director:
$25.9 MILLION NEW YORK CITY ACQUISITION
The Company
has entered into a joint venture with SBT Property to acquire the
Tinton Portfolio, a 132 unit multi-family residential portfolio
comprised of three buildings located in New York City (the "Tinton Portfolio").
The Tinton Portfolio is being acquired for approximately
$25.9 million (including transaction
costs), representing a 5.8% going-in capitalization rate or
$223 per square foot.
The Tinton Portfolio will be financed, in part, by three new
secured first mortgages at a 4.4% interest rate for approximately
$16.6 million. The terms of the
financing include a two year interest-only period, 30 year
amortization and a seven year term. The remaining capital
requirement of approximately $9.3
million will be funded through a combination of (i)
$5.6 million of preferred equity
yielding 8.0% to be held by the Company and certain entities
indirectly related to the Company; and (ii) $3.7 million of common equity held 50% by the
Company and certain entities indirectly related to the Company and
50% by SBT Property. The expected cash return on the Company's
investment in the preferred and common shares is expected to be
approximately 8.6%.
SBT Property will also be responsible for property management of
the Tinton Portfolio. Prior to founding SBT Property, the
principals have many years of real estate acquisition and property
management experience. The Tinton Portfolio is a transaction they
specifically sourced.
The Tinton Portfolio transaction is expected to close on about
November 8, 2018.
NON-BROKERED PRIVATE PLACEMENT
The Company has decided
to proceed with a non-brokered private placement that will allow it
to issue up to 850,000 Common Shares and Warrants of the Company
(collectively "Units") for total proceeds of approximately
$6.8 million. The Offering Price for
the Units will be US$8.10 per Unit or
the Canadian equivalent at the time of closing. Each Warrant will
entitle the holder to purchase one Common Share of the Company at
any time commencing on the date of closing until the date that is
two years from the date of issuance, at a price of US$9.50 per Common Share. Participants in the
private placement include, but are not limited to members of the
board of directors and senior management of the Company.
The net proceeds from the private placement will be used by the
Company to fund prospective acquisitions of income producing
multi-family residential properties in the United States primarily in joint venture
partnerships, to fund prospective investments in mortgage debt on
real estate properties in the United
States, for the repayment of debt, for working capital and
for general corporate purposes. The Private Placement is expected
to close on or about November 8,
2018.
The Company expects that certain insiders of the Company will
subscribe for Units pursuant to the Private Placement and as such,
the Private Placement will constitute a "related party transaction"
as this term is defined in Multilateral Instrument 61-101 –
Protection of Minority Securityholders in Special Transactions.
Details of amounts subscribed for by related parties will be
disclosed once finalized. The Company expects that the Private
Placement will be exempt from the valuation requirement and the
minority approval requirement as the fair market value of the
consideration involved is not expected to exceed 25% of the
Company's market capitalization.
A material change report will be filed as soon as practicable
following the issuance of this news release, which will be less
than 21 days before the closing date of the Private Placement. The
Company considers this reasonable in the circumstances due to
the timing of when the terms of the Private Placement were
finalized and the desire of the Company to complete the Private
Placement as expeditiously as possible.
NEW INDEPENDENT DIRECTOR
The Company is also pleased
to announce the appointment of Ojus
Ajmera as an independent director of the Company. Ojus is
the co-founder of FGF Brands ("FGF"). FGF is one of
North America's largest and
fastest growing baking companies, focusing on providing baked goods
to foodservice and retailers across North
America. Ojus has deep experience in real estate as he has
transacted in approximately $500
million of real estate throughout North America. The appointment of Ojus is
subject to TSXV approval.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm
Capital American Realty Partners Corp. is a U.S. focused real
estate investment entity that pursues real estate and debt
investments through the following platforms:
- Income Producing Real Estate Investments: Acquiring
income producing real estate assets in major cities across
the United States. Acquisitions
are completed solely by the Company or in joint-venture partnership
with local industry expert partners who retain property management
responsibilities; and
- Mortgage Debt Investments: Real estate debt and equity
lending platform in major cities across the United States, focused on providing all
forms of bridge mortgage loans and joint venture capital.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
Certain information in this news release
constitutes forward-looking statements under applicable securities
law. Any statements that are contained in this news release that
are not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements are often
identified by terms such as "may", "should", "anticipate",
"expect", "intend" and similar expressions. Forward-looking
statements in this news release include, but are not limited to,
statements with respect to the Company's intention to complete the
sale of its single-family homes (and the ability to do so for
consideration that accords with the estimated value of the
portfolio, as set out above) and ultimate debt repayments, the use
of proceeds from the new loan described above, the use of proceeds
from (and timing of) the disposition of the Company's portfolio of
single family homes located in Atlanta, potential capital financing and
growth opportunities, as well as the Company's intention to acquire
income producing U.S. real estate assets and complete joint venture
partnerships and mortgage debt and equity lending investments.
Forward-looking statements necessarily involve known and unknown
risks, including, without limitation, risks associated with general
economic conditions; adverse factors affecting the U.S. real estate
market generally or those specific markets in which the Company
holds properties; volatility of real estate prices; inability to
complete the Company's single family property disposition program,
debt repayments or debt restructuring in a timely manner; inability
to access sufficient capital from internal and external sources,
and/or inability to access sufficient capital on favourable terms;
industry and government regulation; changes in legislation, income
tax and regulatory matters; the ability of the Company to implement
its business strategies; competition; currency and interest rate
fluctuations and other risks, including those described in the
Company's public disclosure documents on SEDAR at
www.sedar.com.
Readers are cautioned that the foregoing list is not exhaustive.
Readers are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Neither the Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this
release. Additional information about the Company is available at
www.firmcapital.com or www.sedar.com.
SOURCE Firm Capital American Realty Partners Corp.
