New York, NY (PRWEB) May 28, 2014
Based on April collections, the property is achieving a yield to cost of 6.65% vs. a market cap rate for the asset of 5.75% as estimated by the company. The Company’s underwriting projects the property to attain a better than 7.40% return on cost, for more than a 2.0x return on its invested equity of $14.2 million at the completion of its business plan. This includes the purchase of additional units at the property.
“We are pleased to be able to invest a significant part of our IPO proceeds in this transaction, as we expect it to provide attractive cash flows plus the potential for substantial value growth over time. Our Lansbrook purchase is at a significant discount to replacement cost and to comparable apartment properties because of its current structure as a ‘fractured condominium’ community,” said Mr. Kamfar, Chairman and CEO of BRG. “We are working on several transactions to commit our remaining IPO proceeds, and we expect to announce these in upcoming days.”
Lansbrook is a Class A apartment community located in the Tampa, Florida suburb of Palm Harbor. The joint venture in which the Company has invested acquired 573 units out of a 774-unit condominium community. These units are currently 94% leased and operated as a rental community.
Located in one of the most affluent areas of the Tampa area, Lansbrook Village offers upscale amenities including fully equipped clubhouses and multiple, oversized swimming pools, a state-of-the-art fitness center, lighted tennis courts, a sand volleyball court, progressive play space, outdoor grills, a pet playground, and interactive fountains. Planned improvements include upgrades to landscaping, additional dog park amenities, new signage, and further upgrades to social center, outdoor kitchens, and clubhouse. The development, which is surrounded by protected environmental areas, is located in the prestigious A-rated Pinellas County School district and in close proximity to the region’s largest business districts, encouraging a diverse and stable tenant base, the Company said.
BRG has joint ventured on this investment with Atlanta-based Carroll Organization. Founded in 2004, Carroll Organization is an established owner and operator of high-quality multifamily real estate, dedicated to acquiring, improving, and operating well-located multifamily real estate assets in high-growth markets. The organization’s property management division currently has responsibility for a portfolio of approximately 14,000 units. Carroll Organization will manage the pool of 573 units owned by the joint venture and will work closely with HOA management on planned improvements.
About Bluerock Residential Growth REIT, Inc.
Bluerock Residential Growth REIT, Inc. (NYSE MKT: BRG) is a real estate investment trust formed to acquire a diversified portfolio of institutional-quality apartment properties in demographically attractive growth markets throughout the United States. The Company has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.
Forward Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur, including the expected performance of the Lansbrook Village property, management’s commentary regarding the property’s potential to create income and value and expectations regarding the Company’s pipeline of investments. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the prospectus dated March 28, 2014 and filed by the Company with the Securities and Exchange Commission (“SEC”) on April 1, 2014, and subsequent filings by the Company with the SEC.