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Preferred Apartment Communities, Inc. Announces Acquisition

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Preferred Apartment Communities, Inc. (NYSE: APTS) ("PAC" or the "Company") today announced its acquisition of a 96-unit townhome community located in Hampton, Virginia ("Trail II") adjacent to the Company's 204-unit Trail Creek community ("Trail I") for a purchase price of approximately $18.1 million. Trail II was completed in 2012 and has a current occupancy of approximately 94%. PAC intends to combine Trail II with Trail I and operate the combined properties as "Trail Creek" and brand it as "a Preferred Apartment Community." PAC acquired Trail II pursuant to the terms of the purchase option that was executed when PAC made a mezzanine loan investment to partially finance the construction of Trail II. In connection with the acquisition, PAC's mezzanine loan was paid in full, including the payment of approximately $283,000 in an accrued exit fee. We expect the expanded Trail Creek community will be a solid contributor to the continued dynamic growth of the Company.

(Logo: http://photos.prnewswire.com/prnh/20110420/HS87275LOGO)

Upon the acquisition of Trail II, PAC refinanced Trail I with a combined loan of approximately $28.1 million on the combined Trail Creek community originated by KeyCorp Real Estate Capital Markets, Inc., and expects the loan to be transferred to Freddie Mac within 60 days. The new financing is non-recourse, interest only at a fixed interest rate of 4.22% per annum, and matures in June 2020. There are no loan guaranties provided by PAC. The new loan replaces floating rate debt currently used to finance Trail I.

Posted-In: News M&A Press Releases

 

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