TORONTO, Jan. 8, 2019 /CNW/ - Firm Capital American Realty
Partners Corp. ("the "Company"), (TSXV: FCA.U), (TSXV: FCA)
is pleased to provide investors a 2018 year in review of its many
accomplishments:
CURRENT INVESTMENT PORTFOLIO
The Company currently
owns 311 wholly-owned multi-family apartment units located across
three properties, investments in six joint ventures with ownership
interests in 1,263 multi-family apartment units and one investment
in a preferred capital loan. As at Q3/2018 and pro-forma the recent
Bronx, NY joint venture
investment, the Company has pro-rata ownership interests in
approximately $109 million of US
multi-family real estate.
INCREASED NET ASSET VALUE ("NAV") BY AN +11% CAGR TO
$8.31 PER SHARE
Since Q3/2017,
the Company has increased NAV from $7.85 per Share to $8.31 per Share for an +11% Compounded Annual
Growth Rate ("CAGR") through a combination of accretive
investments, debt reduction, new capital and other value-creation
initiatives that have ultimately generated higher earnings and cash
flows for the Company as outlined below:
INVESTED $14.7 MILLION INTO
THREE NEW JOINT VENTURE INVESTMENTS
During 2018, the Company
completed three joint venture investments comprised of 556
multi-family residential units located in Irvington, New Jersey; Houston, Texas and New York City, NY for a total purchase price
of approximately $58.1 million. The
Company invested approximately $14.7
million in a combination of 100% preferred equity
($10.9 million) and common equity
($3.8 million), which represents a
50% ownership interest. The preferred equity has a weighted average
fixed rate of return of approximately 8.6% per annum:
- IRVINGTON, NEW
JERSEY: On February 28,
2018, the Company closed a joint venture investment that
consists of seven multi-family buildings comprised of 189
residential units. The purchase price for 100% of the investment
was $17.8 million, representing a
going-in capitalization rate of approximately 5.8%, or
approximately $94,180 per unit. The
company invested $3.4 million in a
combination of 100% preferred equity ($2.6
million) and common equity ($0.8
million), which represents a 50% ownership interest. The
preferred equity has a fixed rate of return of 9% per annum;
- HOUSTON, TEXAS: On
February 28, 2018, the Company closed
a joint venture investment that consists of 12 multi-family
buildings comprised of 235 residential units located in in
Houston, Texas. The purchase price
for 100% of the investment was $15.3
million, representing a going-in capitalization rate of
approximately 6.2%, or approximately $65,106 per unit. The company invested
$4.7 million in a combination of 100%
preferred equity ($3.5 million) and
common equity ($1.2 million), which
represents a 50% ownership interest. The preferred equity has a
fixed rate of return of 9% per annum; and
- BRONX, NY: On
December 24, 2018, the Company closed
a joint venture to acquire three multi-family buildings comprised
of 132 residential units. The purchase price for 100% of the
investment was approximately $25.0
million, representing a going-in capitalization rate of
approximately 6.0%, or approximately $189,393 per unit. The Company invested
approximately $6.7 million through a
combination of 100% preferred equity ($4.8
million) and common equity ($1.9
million), which represents a 50% ownership interest. The
preferred equity has a fixed rate of return of 8% per annum.
$0.19 PER SHARE REALIZATION OF
VALUE ON BRENTWOOD JOINT
VENTURE
During 2018, the Company announced that the
Brentwood, Maryland Joint Venture
undertook the following accretive activities: (1) entered into a
$10.3 million, 4.81% secured first
mortgage financing (the "New Brentwood Mortgage"), (2)
received an appraisal that valued the real estate at $13.7 million, representing a $3.9 million appraisal surplus over the original
$9.8 million cost in only 20 months
of ownership; and (3) approval to construct 14 additional apartment
units on site for an expected cost of approximately $0.8 million or $60,000 per apartment unit. The accretion impact
of the New Brentwood Mortgage and the appraisal impacted Q3/2018
earnings by approximately $0.05 per
share. Once completed, the accretion impact of the 14 apartment
units is expected to impact earnings by $0.14 per share annually;
$0.25 PER SHARE REALIZATION OF
VALUE ON BRIDGEPORT JOINT
VENTURE
The Company is pleased to announce that the
Bridgeport, Connecticut Joint
Venture recently undertook the following accretive activities: (1)
entered into a new $10.0 million,
4.82% secured first mortgage financing (the "New Bridgeport
Mortgage") that has a 12 year term (with a 6 year interest-only
period) that generated net cash proceeds of approximately
$1.9 million which was used to repay,
in part, the preferred equity, and (2) received appraisals that
valued the real estate at $38.7
million, representing an $8.2
million appraisal surplus over the original $30.5 million cost in only 15 months of
ownership. The accretion impact of the New Bridgeport Mortgage and
the appraisal surplus will be approximately $0.25 per share;
$4.0 MILLION OF ADDITIONAL DEBT
FINANCING
On February 20,
2018, the Company closed a $4.0
million supplemental first mortgage loan on its multi-family
residential property located in Sunrise,
Florida with a fixed interest rate of approximately 5.8%, a
term to maturity of approximately 4.6 years and co-terminous with
the existing first mortgage loan, and a 30-year amortization
period;
$6.6 MILLION OF NEW
EQUITY
On November 9, 2018,
the Company completed a non-brokered private placement and issued
808,643 Common Shares at US$8.10 per
Share and 808,643 Warrants with an exercise price of US$9.50 per Share for total proceeds of
approximately $6.6 million;
ATLANTA SINGLE FAMILY HOMES
LISTED FOR SALE AT A 33% PREMIUM
During 2018, the Company
entered into a conditional contract with an unrelated third party
to dispose of its entire portfolio of 120 single family homes
located in Atlanta for an
anticipated gross value of approximately $10.6 million that was ultimately terminated. The
Company then listed the homes for sale individually with multiple
third-party brokers who had provided to the Company their opinions
of value that approximated a 33% increase over the previously
entered into conditional contract;
78% OF ATLANTA HOMES SOLD.
ONLY 26 HOMES REMAIN
To date, the Company has sold or closed
sales on 94 homes, or 78% of the total, for gross proceeds of
approximately $10.0 million. The
remaining unsold 26 single family homes, which have a current list
price of $3.2 million are anticipated
to generate on closing, assuming that the current list price is
achieved, net proceeds sufficient to fully repay existing debt (as
discussed below) and provide additional working capital;
FULLY EXITED NEW JERSEY
SINGLE FAMILY HOME MARKET
During 2018, the Company closed
sales on all 82 of its remaining single family home units located
in New Jersey for gross proceeds
of approximately $4.2 million;
$15.0 MILLION IN LEGACY DEBT REDUCTION. ONLY
$1.4 MILLION REMAINS
During
2018, the Company repaid $11.0
million of the 7.0% Convertible Unsecured Debentures leaving
a principal balance of only $1.4
million, or just 9% of the original balance. Further, the
Company fully repaid a $4.0 million
first mortgage secured by 120 single family homes located in
Atlanta, Georgia;
FULL YEAR OF DIVIDENDS TO SHAREHOLDERS
During 2018,
the Company paid $0.225 per common
share to shareholders of record. These payments represented a total
of five consecutive payments since the inception of the dividends;
and
2019 BEGINS WITH A 5% DIVIDEND INCREASE
The Company
recently announced that as a result of the disposition of its
single family homes to date and ultimate debt repayment combined
with accretive acquisition activity, it will be implementing a 5%
dividend increase to $0.236 per Share
per annum effective January, 2019. This equates to a quarterly
dividend of $0.059 per Share.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm
Capital American Realty Partners Corp. (the "Company") 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 regarding the Company's single family property
disposition program and debt repayments, which may not be completed
within the estimated time frames specified above or at all. Failure
to complete the steps described above or any delays in their
implementation may have a material adverse effect upon the business
of the Company and its market value. There is no assurance that the
Company will be able to complete the disposition of the single
property disposition portfolio at anticipated values or at all or
that market conditions will support the debt and equity raises
contemplated by the Company. There is no assurance that the
implementation of the steps described above, even if completed as
described above, will increase the market value of the Company's
securities, which is subject to numerous factors beyond the
Company's control.
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
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.
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.
Certain financial information presented in this press release
reflect certain non-International Financial Reporting Standards
("IFRS") financial measures, which include NOI, FFO and
AFFO. These measures are commonly used by real estate investment
companies as useful metrics for measuring performance, however,
they do not have standardized meaning prescribed by IFRS and are
not necessarily comparable to similar measures presented by other
real estate investment companies. These terms are defined in The
Company's Management Discussion and Analysis for the quarter and
year ended December 31, 2017 filed on
www.sedar.com.
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.
SOURCE Firm Capital American Realty Partners Corp.
