Prospect Capital Corporation has invested $144.5 million in four new deals encompassing 19 rent-producing multifamily residential properties totaling 5,652 rental units and 5.66 million rentable square feet. Prospect now has an aggregate investment of $288.3 million in 10 separate deals.
Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”) announced today that Prospect has recently invested $144.5 million in four new transactions encompassing 19 rent-producing multifamily residential properties totaling 5,652 rental units and 5.66 million rentable square feet. In combination with prior multifamily residential investments, Prospect has in the aggregate invested $288.3 million in ten separate transactions encompassing 25 multifamily residential properties with 9,168 rental units and 9.11 million rentable square feet.
Prospect structures its multifamily investments as an investment of debt and equity into Prospect’s controlled portfolio company APH Property Holdings, LLC (“APH”), which owns a private real estate investment trust (“REIT”). This REIT works with multiple operating managers and co-investors to close and manage multifamily residential property acquisitions. Prospect may set up other REITs in the future to house its real-estate-related investments in a tax efficient manner. The four recently closed transactions include the acquisition of a single property, Bexley Apartment Homes (“Bexley”), as well as the acquisition of three multifamily property portfolios called Oxford, Gulf Coast, and Stonemark.
The Oxford portfolio consists of six multifamily residential rental properties located in Atlanta, Charlotte, Dallas, and Orlando. The properties were constructed between 1983 and 2001 and together consist of 2,271 units encompassing 2.18 million rentable square feet. Our operating manager and co-investor in this transaction is McDowell Properties, a firm whose principals have decades of experience acquiring and managing multifamily residential properties nationwide.
The Gulf Coast portfolio consists of six residential rental properties located in Birmingham, Mobile, Pensacola, and Tallahassee. The properties were constructed between 1971 and 1999 and together consist of 1,537 units encompassing 1.56 million rentable square feet. Our operating manager and co-investor in this transaction is Providence Management Company, a firm with a 27-year history of acquiring and managing multifamily residential properties, particularly in the southeast.
The Stonemark portfolio consists of six residential rental properties located in Atlanta. The properties were constructed between 1999 and 2004 and together consist of 1,350 units encompassing 1.46 million rentable square feet. Our operating manager and co-investor in this transaction is GoldOller Real Estate Investments, a firm whose principals have decades of experience acquiring and managing multifamily residential properties nationwide.
Bexley is a residential rental property located in Marietta, Georgia. The property was constructed in 1988 and consists of 494 units encompassing 461,890 rentable square feet. Our operating manager and co-investor in this transaction is the Carroll Organization, a firm with a nine-year history of acquiring and managing multifamily residential properties, particularly in the southeast.
“These multifamily investments continue Prospect’s strategy of selectively acquiring stabilized properties in conjunction with highly regarded multi-family real estate management companies at a fraction of replacement cost in markets with limited new construction pipelines and positive demographic and economic trends,” said Ted Fowler, Managing Director of Prospect Capital Management LLC. “These rent-producing properties generate attractive current yields (with long-term fixed rate financing), long-term capital appreciation potential, inflation-protecting income streams, and diversification across geography, construction vintage, and operating manager. We are actively screening new investment opportunities in real estate and beyond with a focus on businesses that produce recurring and stable cash flow streams that we can distribute to our shareholders.”
With more than $5.5 billion of assets and committed capital across more than 130 portfolio companies, Prospect is one of the largest and most diversified companies in the business development company peer universe. Prospect’s diversified yield strategies include private equity sponsor finance, non-sponsor direct lending, Prospect-sponsored recapitalizations, structured credit investments, and real estate investments. Prospect examines all industries as part of its investment review.
Prospect has closed more than $2.4 billion of new originations to date during the current calendar year, with further origination activity expected in the rest of December and the coming months. Prospect closed approximately $2.9 billion of originations in the twelve months ended September 30, 2013.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a closed-end investment company that lends to and invests in private and microcap public businesses. Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
We have elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). We are required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to us could have an adverse effect on us and our shareholders.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.