Preferred Apartment Communities Buys Seven Shopping Centers from Hines REIT
Preferred Apartment Communities Inc. (NYSE: APTS), a publicly traded REIT and sponsor of alternative investments, purchased seven grocery-anchored shopping centers located in Georgia, Florida, Texas and North Carolina for $158 million, exclusive of acquisition-related and financing-related transaction costs. The seller, Hines Real Estate Investment Trust, is a non-traded REIT that recently announced its plan of liquidation.
“This is a transformative transaction for us in that we now own 30 grocery-anchored centers across seven states, consistent with our strategy of acquiring well-positioned grocery-anchored centers in suburban Sunbelt markets anchored by strong market leaders,” said Joel Murphy, president and chief executive officer of New Market Properties, LLC.
The 650,400-square-foot portfolio, which was acquired through the subsidiary New Market Properties, includes three properties in the Atlanta area, two in Florida and one in San Antonio, including:
• Thompson Bridge Commons: 92,600-square-foot Kroger-anchored property in Gainesville, Georgia
• Cherokee Plaza: 102,900-square-foot Kroger-anchored property in Atlanta, Georgia
• Sandy Plains Exchange: 72,800-square-foot Publix-anchored property in Marietta, Georgia
• Shoppes at Parkland: 145,700-square-foot BJ’s Wholesale Club-anchored property in Parkland, Florida
• University Palms: 99,200-square-foot Publix-anchored property located in Oviedo, Florida.
• Heritage Station: 72,900-square-foot Harris Teeter-anchored property in Wake Forest, North Carolina.
• Oak Park Village: 64,300-square-foot HEB anchored property in San Antonio, Tex.
The acquisitions were financed utilizing separate non-recourse first mortgage loans from Nationwide Life Insurance Company and Keybank National Association for approximately $97.7 million, with the balance of the purchase price paid from PAC’s available funds.
Five of the loans from Nationwide have a 10-year term and a fixed 3.45 percent interest rate. The sixth loan from Nationwide, which finances the Cherokee Plaza asset, is a 5-year, floating rate loan at 2.25 percent over the 30-day LIBOR rate. The loan from Keybank for the Shoppes at Parkland is a 7-year loan with a fixed rate of 4.67 percent.
Preferred Apartment Communities was launched as a non-traded REIT in 2010 and began trading on the New York Stock Exchange the following year. It recently began offering 2 million shares of nontraded 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 Tuesday, shares of APTS common stock closed at $14.93.
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