All amounts are in $US Dollars unless otherwise stated
TORONTO, Feb. 27, 2017 /CNW/ - Firm Capital American Realty Partners Corp. (the "Company"), (TSXV : FCA.U) is pleased to announce the appointment of Kursat Kacira as President, Chief Executive Officer and a Director of the Company. In addition, the Company is pleased to announce the repayment of approximately $0.5 million of the Senior Secured Notes ("SSN") and provides an update on its remaining single family home inventory and current investment portfolio.
NEW PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Effective immediately, Kursat Kacira is the new Chief Executive Officer and a Director of the Company. Kursat is currently the Chief Executive Officer and Trustee of Maplewood International REIT ("Maplewood") (TSXV: MWI.UN), which he founded in 2013, and continues to serve in those capacities as Maplewood progresses with its value maximization process. Kursat is an accomplished professional with 25 years of experience in financial management, real estate investment, international business, investment banking, and public accounting, in Canada, the United States, and Europe. Previously, Kursat was Chief Financial Officer of TSX-listed Whiterock REIT, which was sold for C$1.4 billion in 2012. Prior to that, Kursat had a long-standing career in investment banking at TD Securities Inc. in Toronto and Bear, Stearns & Co. Inc. in New York, as well as in public accounting at Price Waterhouse in Toronto. Kursat is a Chartered Professional Accountant (CPA, CA), has a Master of Business Administration (Dean's Scholarship Recipient) from the Stern School of Business at New York University, and a Bachelor of Mathematics (Honours) from the University of Waterloo.
As a result of this appointment, Robert McKee will be stepping down as Interim President and Interim Chief Executive Officer of the Company effective immediately. The Company wishes to thank Robert for his service to the Company.
The Company's Manager, Firm Capital Realty Partners Advisors Inc. (Firm Capital Organization), has the authority to appoint the Chief Executive Officer of the Company, but this appointment is subject to final approval of the Board of Directors of the Company. In addition to his role with the Company, Kursat is also the Managing Director and Co-Head of Special Situation Investments with the Firm Capital Organization.
DEBT REPAYMENT UPDATE
The Company is also pleased to report that from the period from February 1, 2017 through to February 24, 2017, that it has closed on 10 single family home sales located in Florida and Atlanta for total gross proceeds of approximately $0.6 million and net proceeds of approximately $0.5 million. The variance between gross and net proceeds of just under $0.1 million is attributed to closing costs which include, but are not limited to selling commissions, legal and title document closing costs. The net proceeds from these single-family homes sales were used to make a $0.5 million SSN repayment. The annual interest expense savings from this debt repayment is approximately $0.04 million.
With this repayment, the current SSN and First Mortgage New Jersey Promissory Note ("NJPN") balances stand at approximately $6.0 million and $2.4 million, respectively. Overall, the Company has repaid approximately $20 million or 70% of the original SSN and NJPN balances.
The Company believes that the continuing sale of the single-family home portfolio accompanied by the pay down of debt strengthens its balance sheet while increasing operating income by eliminating the costs associated with operations of the single-family homes.
SINGLE FAMILY HOME INVENTORY HELD FOR SALE UPDATE
In addition to closed home sales, the Company has under contract 43 single family homes located in South Florida, Tampa, New Jersey and Atlanta for net proceeds of approximately $3.8 million. These home sales are anticipated to close during the first and second quarter of 2017 and the net proceeds generated will be used for further repayment of the SSN and NJPN. Beyond these conditional home sales, the Company currently has five homes in South Florida, 21 homes in New Jersey, 21 homes in Tampa and 231 homes in Atlanta. 120 of the Atlanta homes are part of a rental pool secured by a $4.0 million first mortgage due July 1, 2019 and 111 homes are currently being marketed for sale. With the exception of the 120 single family homes as outlined above, all of the remaining inventory across the Company's portfolio are currently held for sale.
CURRENT INVESTMENT PORTFOLIO UPDATE
Beyond the single family home inventory as outlined above, the Company's investment portfolio consists of six wholly-owned multi-family investment properties located in Florida (four properties) and Texas (two properties) comprised of 377 units with a 97% weighted average occupancy rate and two multi-family joint venture investments located in New York City and Maryland comprised of 242 units with a 92% weighted average occupancy rate.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm Capital American Realty Partners Corp. focuses on capital partnership investing in U.S. income producing real estate & mortgage debt investments.
The Company is focused on the following investment platforms:
- Income Producing Real Estate Investments: Acquiring income producing U.S. real estate assets in major cities across the United States. Acquisitions are completed solely by the Company or in joint-venture partnership with local industry expert partners who retain property management; and
- Mortgage Debt Investments: Real estate debt and equity lending platform focused on major cities across the United States. Focused on providing all forms of bridge mortgage loans and joint venture capital.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this news release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "intend" and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company's intention to complete the sale of its single-family homes and ultimate debt repayments, potential capital financing and growth opportunities, as well as the Company's intention to acquire income producing U.S. real estate assets and complete joint venture partnerships and mortgage debt and equity lending investments. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse factors affecting the U.S. real estate market generally or those specific markets in which the Company holds properties; volatility of real estate prices; inability to complete the Company's single family property disposition program or debt restructuring in a timely manner; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; industry and government regulation; changes in legislation, income tax and regulatory matters; the ability of the Company to implement its business strategies; competition; currency and interest rate fluctuations and other risks, including those described in the Company's public disclosure documents on SEDAR at www.sedar.com.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward- looking statements contained in this news release are expressly qualified by this cautionary statement.
Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Additional information about the Company is available at www.firmcapital.com or www.sedar.com.
SOURCE Firm Capital American Realty Partners Corp.
For further information: Kursat Kacira, President & Chief Executive Officer, (416) 635-0221; Sandy Poklar, Chief Financial Officer, (416) 635-0221