TODAY’S DEALS: PAC Completes $19.9M Apartment Acquisition in Atlanta
Preferred Apartment Communities completes a 140-unit purchase; Steadfast Apartment REIT commences its IPO; and Eastern Consolidated brokers the sale of a Queens development site to a private Chinese investor for $17 million.
Atlanta—Preferred Apartment Communities Inc. has acquired a 140-unit apartment community in Atlanta known as Summit II. The asset is adjacent to the REIT’s 345-unit Summit Crossing, aka Summit I. The newly acquired property was completed in 2013 and enjoys a current occupancy of approximately 96.4 percent.
PAC intends to combine both assets under a single operating platform known as Summit Crossing. The acquisition was pursuant to the terms of the purchase option that was executed when PAC made a mezzanine loan investment to partially finance the construction of Summit II. In connection with the acquisition, PAC’s mezzanine loan was paid in full, including the payment of approximately $605,000 in an accrued exit fee.
Upon the acquisition of Summit II, PAC assumed the current $12.4 million senior loan from Atlantic Capital Bank. In connection with this assumption, the ACB loan was increased to $13.0 million, the maturity date was changed to June 2014 and the interest rate was set at a floating rate of 30-day LIBOR plus 2.50 percent. There are no loan guaranties provided by PAC. PAC currently intends to refinance Summit II with a new loan from Freddie Mac within six months.
For more information on Preferred Apartment Communities, be sure to check out MHN’s recent interview with John Isakson, chief capital officer at the REIT.
Steadfast REIT Investments Launches Steadfast Apartment REIT
Irvine, Calif.—Steadfast Apartment REIT Inc. has commenced its IPO of $1.1 billion in common stock. The entity, which intends to elect to quality as a REIT for federal income tax purposes, will used the proceeds from its continuous offering to acquire and operate what the company describes as “a diverse portfolio of well-positioned, institutional-quality apartment communities in targeted markets through the United States that have demonstrated high occupancy and income levels across market cycles.”
The REIT is sponsored by Steadfast REIT Investments LLC, an affiliate of Steadfast Cos., and will offer up $1 billion in shares of common stocks for sale at $15.00 per share and up to an additional $100 million in shares of its common stock under its distribution reinvestment plan at $14.25 per share.
Eastern Consolidated brokers sale of Queens, N.Y. development site to private Chinese investor for $17M
Corona, N.Y.—Eastern Consolidated has arranged the sale of 112-21 Northern Boulevard, in the Corona neighborhood of Queens, for $17 million. Property owner Dick DiBlasi sold the parcel to a private Chinese investor.
The entire triangular-shaped parcel—which includes two structures making up DiBlasi Ford, the largest and oldest Ford car dealership in the Northeast—is zoned for up to 357,000 square feet of developable land.
The new property owner is preparing for major new construction on the site, situated on the Corona/Flushing border in close proximity to Citi Field. DiBlasi Ford currently leases its space and is actively negotiating to relocate within Corona.
The 112-21 Northern Boulevard transaction is now the fourth property sale Eastern Consolidated has arranged in Corona/Flushing over the past few years.
“We are thrilled to continue to represent owners of large tracks of land in the New York City boroughs and assist with the transformation of entire neighborhoods,” says David Schechtman, a principal and executive managing director with Eastern Consolidated, who represented both the buyer and the seller. “The sale of 112-21 Northern Boulevard was a 12-month process. The broad and widespread marketing program resulted in a significant positive outcome.”
Schechtman noted that several new construction projects have recently been completed in the area, including the 173-key Springhill Suites LaGuardia Airport hotel across the street, as well as a new public school a few blocks away. The sale of 112-21 Northern Boulevard continues that trend.
“There will be no displacement of tenants,” Schechtman said. “DiBlasi Ford is planning to relocate nearby, keeping those jobs local. And the new owners are under discussion to bring a major project to Corona, which itself will create hundreds of local jobs and further enhance property values in the area.”
The property at 112-21 Northern Boulevard is in close proximity to public transportation and parks, and features excellent accessibility, as it is bounded by Northern Boulevard to the south, 112th Place to the west, and Astoria Boulevard to the north and east, and is close to major highways. The site is also located within one mile of John F. Kennedy International Airport, LaGuardia Airport, Citi Field, the U.S. Open Tennis Center at Flushing Meadows, and the World Fair Marina.
In addition, 112-21 Northern Boulevard is within walking distance of downtown Flushing, the largest urban center in Queens and one of the largest “Chinatowns” in the United States. Corona is predominantly a residential neighborhood with its main commercial corridor along Northern Boulevard.