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TORONTO, March 31,
2022 /CNW/ - Starlight U.S. Multi-Family (No. 2) Core
Plus Fund (TSXV: SCPT.A) (TSXV: SCPT.U) (the "Fund")
announced today that it has entered into separate agreements to
refinance Hudson at East
("Hudson") and to acquire a
320-suite Class "A" institutional quality multi-family property
completed in 2002 and located in Raleigh,
North Carolina (the "Property").
In connection with the refinancing of Hudson, the Fund, through its wholly-owned
subsidiary, Hudson at East Acquisition LLC, has agreed to refinance
Hudson. New financing in the
amount of US$67.0 million has been
secured for an initial term of three years, with two one-year
extension options. The financing will be interest only and payable
at an annual interest rate of one-month Secured Overnight Financing
Rate ("SOFR") + 2.70%, subject to an all-in interest rate
floor of 2.80%. Existing financing of US$39.1 million is expected to be repaid on
completion.
Pursuant to a purchase and sale agreement (the
"Agreement") dated March 18,
2022, a wholly owned subsidiary of the Fund, has agreed to
purchase the Property unencumbered for approximately US$106.0 million. The Agreement contains
customary representations and warranties for a transaction of this
nature and, subject to the satisfaction or waiver of conditions, is
scheduled to close on or about April 27,
2022. The Fund has waived its due diligence conditions set
out in the Agreement.
In connection with the acquisition of the Property, new
financing in the amount of approximately US$82.9 million, including US$76.5 million of initial funding and
US$6.4 million of future funding for
capital expenditures, has been secured for an initial term of three
years, with two one-year extension options. The financing will be
interest only and payable at an annual interest rate of the
one-month SOFR + 2.95%, subject to an all-in interest rate floor of
3.05%.
The Property
The Property consists of 11 garden-style buildings on a 16-acre
site comprised of one, two and three-bedroom suites. Currently,
suites feature 9' ceilings, large floor plans, granite countertops,
and stainless steel appliances.
Amenities include a resident clubhouse, business centre, movie
theatre room, package room and a 24-hour fitness centre. Additional
amenities include resort-style pool, large summer seating areas
with barbeques, a playground and a dog park.
Upon completion of the acquisition, the Fund intends to retain
High 5 Residential ("High 5") to property manage the
Property. High 5 currently manages approximately 2,100 units for
Starlight U.S. Residential in Raleigh,
North Carolina and Nashville,
Tennessee.
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 refinancing of Hudson, the acquisition of the Property and
its financing, 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 Property. 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
refinancing of Hudson, the
acquisition and financing of the Property; the ability to deploy
any refinancing; the impact of COVID-19 on the Fund's portfolio,
including the Property, 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 Property; the property management of the Property;
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 United States 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 Property; the
ability to deploy any refinancing; the impact of COVID-19 on the
Fund's portfolio, including the Property, 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.
About Starlight U.S. Multi-Family
(No. 2) 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 multifamily real estate
market.
SOURCE Starlight U.S. Multi-Family (No. 2) Core Plus Fund