Trade Street Residential Redeems Non-Controlling Interests

Full-service, self-administered and self-managed real estate investment trust Trade Street Residential announced the redemption of the non-controlling interests in four of its property-owning subsidiaries for total consideration of approximately $7.7 million.

Adventura, Fla.—Full-service, self-administered and self-managed real estate investment trust Trade Street Residential announced the redemption of the non-controlling interests in four of its property-owning subsidiaries for total consideration of approximately $7.7 million. The non-controlling interests had been subject to average annual interest rates of 10.5 percent, plus additional monthly charges.

Trade Street Residential additionally secured a commitment for a new 12-year, $25.8 million first mortgage loan. That loan, secured by a 494-unit Sandy Springs, Ga., apartment community called Point at Canyon Ridge, is slated to close on May 31 of this year, subject to customary closing conditions.

The loan is expected to have a fixed annual interest rate of 4.1 percent. It calls for two years of interest-only payments, after which principal and interest payments will be based on a 30-year amortization schedule.

Following its redemption of the non-controlling interests, Trade Street Residential now owns 100 percent of the interests of the property-owning subsidiaries that own The Beckana on Glenwood, a 254-unit Raleigh, N.C., apartment community; Merce Apartments, a 114-unit Addison, Texas, apartment community; Park at Fox Trails, a 286-unit Plano, Texas, apartment community; and Terrace at River Oaks, a 314-unit San Antonio apartment property.

The redemption of the non-controlling interests was funded from proceeds of the company’s recent public offering of its common stock. Proceeds from the new mortgage loan secured by Point at Canyon Ridge will repay a $26.4 million 6 percent first mortgage loan secured by the property that will be maturing on May 31, 2013.

“We are pleased to announce these completed and anticipated financing transactions as we execute our strategy to increase the flexibility of our balance sheet, and begin to improve our cost of capital,” says Michael Baumann, chairman and chief executive officer of Trade Street Residential. “Once completed, we anticipate the net benefit of these transactions will reduce our annual interest costs by approximately $1.3 million, which will improve our financial position and provide greater flexibility as we consider incremental opportunities to grow our portfolio in the future.”

Trade Street Residential is a fully integrated owner and operator of high-quality apartment communities in targeted growth markets across the Southeastern United Sates, as well as in Texas. It focuses on acquiring, owning, operating and managing conveniently located, garden-style and mid-rise apartment properties in mid-sized cities and suburban submarkets.