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Preferred Apartment Communities Board Suspends Multifamily Investment Threshold

The board of Preferred Apartment Communities Inc. (NYSE: APTS), a publicly traded REIT and sponsor of alternative investments, reaffirmed the company’s strategy of acquiring grocery-anchored shopping center assets through New Market Properties, an indirect subsidiary of Preferred Apartment Communities.

According to a filing with the Securities and Exchange Commission, the board agreed to temporarily suspend PAC’s 20 percent investment threshold on owning and operating non-multifamily properties due to the growth New Market has experienced.

The objective is to spin-off, sell or distribute New Market once PAC believes it has reached sufficient scale and market conditions allow. However, PAC said it will continue its primary focus of owning and operating multifamily communities and expects to reinstate the 20 percent investment threshold following the spin-off, sale or distribution of New Market.

Preferred Apartment Communities was launched as a non-traded REIT in 2010 and began trading on the New York Stock Exchange the following year. The company owns 30 grocery-anchored shopping centers, 23 multifamily communities, one student housing community, one class A office building and a 96 percent interest in one multifamily community joint venture. PAC recently began offering 2 million shares of non-traded redeemable preferred stock for $1,000 per share with a 6 percent yield. The preferred share also includes one warrant to purchase 20 shares of the company’s common stock. On Friday, shares of APTS common stock closed at $13.74.

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