Timbercreek U.S. Multi-Residential Opportunity Fund #1 Raises $40.5 million in Initial Public Offering and Private Placement
TORONTO, Oct. 25, 2012 /CNW/ - Timbercreek U.S. Multi-Residential Opportunity Fund #1 (the "Fund") announced today that it has completed its initial public offering of 2,244,350 class A units (the "Offering") for aggregate gross proceeds of $22,443,500. The class A units were offered to the public under a final prospectus of the Fund dated September 28, 2012, as amended on October 17, 2012, by a syndicate of agents co-led by Raymond James Ltd., CIBC, and GMP Securities L.P., and including BMO Nesbitt Burns Inc., National Bank Financial Inc., Scotia Capital Inc., Canaccord Genuity Corp., Macquarie Capital Markets Canada Ltd., Dundee Securities Ltd. and Manulife Securities Incorporated (the "Agents").
The Fund has also issued 1,605,000 class C units to certain Canadian investors by way of private placement for aggregate gross proceeds of $16,050,000 to the Fund, which amount includes the subscription for 250,000 class C units by Timbercreek Asset Management Inc., who will act as asset manager to the Fund (the "Manager"). In addition, 200,000 units of a parallel US partnership were issued to Elco Landmark Residential Holdings, LLC ("Elco Landmark") by way of private placement for aggregate gross proceeds of US$2,000,000 to the parallel US partnership.
"We are extremely pleased to provide Canadian investors with an opportunity to capitalize on what we believe are mispriced and undermanaged multi-residential properties in the southeastern United States," said Blair Tamblyn, CEO of the Manager. "The timing for deploying capital in this market and strategy could not be better and we are pleased to be working with who we feel is the best partner to execute on this strategy."
Net proceeds from the Offering will be used to acquire multi-residential real estate assets located in the southeastern United States (the "Properties") that are mispriced and/or undermanaged in the view of the Manager.
The Manager is an investment management company that employs a conservative and risk-averse approach to real estate-based investments. The Manager and its affiliates currently manage approximately $3 billion in real estate related assets based on fair value, including direct real estate ownership (primarily multi-residential), mortgages and global real estate securities. The Manager employs a team of over 90 professionals located in its head office in Toronto with substantial experience in real estate acquisitions, disposals, financing and administration, property and asset management, construction and redevelopment, as well as over 350 people at its 14 additional offices across Canada.
Elco Landmark will operate and act as property manager for the Properties. Elco Landmark is a Jupiter, Florida based private equity multi-residential real estate company, and is currently responsible for operating approximately 18,000 units across the southeastern United States and employs a dedicated team of 21 corporate and over 400 operational employees.
"We're very excited to have the opportunity to partner with a premier Canadian asset manager in Timbercreek. We're seeing tremendous activities in the marketplace and look forward to bringing those opportunities to the Fund," said Joe Lubeck, CEO of Elco Landmark.
The total return objective of the Fund is to generate a 15% net IRR (or average annualized total rate of return) on a pre-tax basis and net of all fees and expenses, inclusive of an annual distribution yield of 4% to 5% (which includes the allocation to unitholders of the Fund of U.S. taxes paid by the Fund) paid quarterly.
Based upon market fundamentals in the real estate markets in which the Fund plans to invest, the Fund currently is targeting the size of its total capital to be approximately $200 million.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Fund in the United States, nor shall there be any sale of the securities of the Fund in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.
This press release contains forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE: Timbercreek U.S. Multi-Residential Opportunity Fund #1For further information:
Timbercreek Asset Management Inc.
Managing Director, Capital Markets & Corporate Communications