Tricon on track to acquire over 4,000 single-family rental homes
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TORONTO, June 13, 2013 /CNW/ - Tricon Capital Group (TSX: TCN) ("Tricon" or the "Company") today announced that the Company has closed a US$150 million credit facility with Deutsche Bank for its U.S. single-family rental program. The credit facility bears interest at a rate equal to the London Interbank Offered Rate ("LIBOR") plus 3.60%, subject to a LIBOR floor of 0.5%. Deutsche Bank, one of the world's top lenders, has rapidly emerged as the leader in this asset class, having recently closed on numerous other facilities.
Tricon launched its single-family rental program in April 2012 and has deployed over $225 million from its balance sheet to acquire over 2,300 homes across Northern and Southern California, Phoenix, Reno, Southeast Florida and Charlotte. The Company's single-family rental platform is an industry leader with an average occupancy rate of 93% for homes owned more than six months and with an average gross yield of approximately 14%, as highlighted in the table below.
|At March 31, 2013|| April 1 - May 31,
| At May 31,
|# of Homes Acquired / Owned||1,794||533||2,327|
|Average Gross Yield||14%||13%||14%|
| Occupancy Rate for Homes
Owned 6+ Months
"Tricon's single-family rental portfolio continues to perform well, generating meaningful cash flow with many operational metrics exceeding those of our peer group," said David Berman, Chairman and Chief Executive Officer. "I am also pleased to note that as part of this credit facility, Deutsche Bank conducted third-party property valuations on over 300 of our homes, the results of which easily substantiated the values we reported in Q1 2013. We continue to view this as a historic opportunity and believe the buying window will remain open for another 12 to 18 months given the significant amount of remaining shadow inventory in the U.S. relative to available investor capital. The prudent use of leverage, including this credit facility, should enable us to execute on our previously stated goal of acquiring roughly 4,000 homes by the end of 2014 and should ultimately enable us to generate very attractive double-digit cash-on-cash yields on the whole portfolio."
About Tricon Capital Group Inc.
Founded in 1988, Tricon Capital Group Inc. is a North American real estate asset manager and principal investor with a primary focus on the residential sector. Tricon currently has approximately $1.2 billion of assets under management and owns a portfolio of over 2,300 U.S. single-family rental homes. Tricon provides financing to local operators or developers in select markets in the United States and Canada, with a primary focus on for-sale housing in growing markets. Since inception, Tricon has invested in approximately 150 transactions for development projects valued at more than $10 billion. More information about Tricon is available at www.triconcapital.com.
This press release may contain forward-looking statements relating to expected future events and financial and operating results and projections of the Company, including statements regarding future plans, objectives or economic performance that involve risks and uncertainties. Forward-looking information and statements are based on management's expectations, intentions and assumptions. If unknown risks arise, or if any of the assumptions underlying the forward-looking statements prove incorrect, actual results may differ materially from management expectations as projected in such forward-looking statements. Examples of such risks include, but are not limited to, the risks disclosed in the Company's final long form prospectus dated May 14, 2010, the risks disclosed in the Company's final short form prospectus dated April 24, 2012, the risks disclosed in the Company's final short form prospectus dated July 23, 2012, the risks disclosed in the Company's final short form prospectus dated November 27, 2012, the risks disclosed in the Company's final short form prospectus dated February 15, 2013 and the risks described in the Company's continuous disclosure materials from time-to-time, as available on SEDAR at www.sedar.com. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
SOURCE: Tricon Capital Group Inc.
For further information:
Chief Financial Officer
Email: [email protected]
Email: [email protected]