Sherrin U.S. Multi-Family (No. 1) Holding LP will acquire the entire Starlight U.S. Multi-Family (No. 1) Core Plus Fund’s portfolio of seven Class A institutional quality multifamily properties totaling 2,219 units in the U.S. Valued at approximately $600 million, the transaction will provide all-cash consideration to unitholders of the fund.
The transaction includes gross cash consideration of approximately $269.6 million payable to the fund. The purchaser will also indirectly assume all the fund’s existing debt, estimated to be approximately $333.8 million at transaction closing, less the amount of the fund’s working capital, estimated to be approximately $1 million, and less the amount of the fund’s capital expenditures up to the transaction’s closing, estimated at approximately $2.4 million.
The fund anticipates distributing the net proceeds from the sale of the fund portfolio, after payment of applicable taxes, to unitholders, and canceling the issued and outstanding limited partnership units of the fund.
In a statement, Starlight noted the income and value of the fund’s underlying assets have grown substantially under the stewardship of the company’s asset management team. That growth has exceeded the company’s pre-tax targeted IRR for unit holders.
The progress of the fund’s business plan, along with favorable real estate conditions in markets where the portfolio’s properties are situated, results in the proposed transaction being a compelling opportunity for unitholders to realize returns on initial investments exceeding targeted amounts, the company’s statement reported.
The transaction is expected to close in mid to late October, subject to the satisfaction or waiver of a number of closing conditions. In June, Starlight U.S. Multi-Family selected RKW Residential to handle management of two Georgia properties.