Finance REITs
July 3, 2008
By: Gail Kalinoski, Contributing Editor
Colonial Properties Trust, a multi-family-focused REIT, is continuing its plan to dispose of older assets by selling five apartment communities in two transactions for a total of $81.8 million. The buyer or buyers were not identified.
The wholly-owned properties, which have a total of 1,250 units, are Cottonwood Crossing, Colonial Village at Bedford and Colonial Village at Bear Creek, all in Fort Worth, Texas; Colonial Village at Pear Ridge in Dallas and Colonial Grand at Shelby Farms I and II in Memphis, Tenn. The average age of the Texas properties was 23 years and the average age of the Shelby Farms properties was seven years, according to the Birmingham, Ala.-based REIT.
“The pricing demonstrates the value we have created in these properties as well as our ability to execute our plan in a challenging real estate environment,” Weston Andress, president & CFO, said in a statement. “We are pleased with the interest we received on these properties and are cautiously optimistic about the remainder of our sales pipeline that appears to be firming up for the balance of this year.”
The sale of the four Texas properties represented a market cap rate of 6.5 percent and the 450-unit Colonial Grand at Shelby Farms sale had a market cap rate of 5.9 percent, including a short-term seller financing of $27.8 million with a maximum term of 90 days, according to a news release. The combined market cap rate for all the properties was 6.2 percent.
In the past year, Colonial has decreased its interests in office and retail assets as part of its goal of becoming primarily a multifamily REIT. It has not totally relinquished its presence in those sectors entirely, often selling some of its assets into joint ventures. As of March 31, the company owned or managed 16.2 million square feet of office space and 8.1 million square feet of retail shopping space mostly in key Sunbelt states from Virginia to Nevada.
As of the end of the first quarter, the REIT owned or managed 38,822 apartment units. A July 16, 2007, CPN story noted Colonial’s strategy involves developing new properties and renovating existing properties.
When it released its first-quarter 2008 financial results on April 24, Colonial noted that it had completed four multifamily developments with a total of 824 units in that period. Including joint venture development activity, Colonial also had 2,539 apartment homes under construction at the end of Q1 with a total investment of about $241.1 million.
As of March 31, the company said its current multifamily development pipeline included seven wholly-owned communities with 1,998 units and one joint venture development with 541 apartments. Most of the new apartment communities are in growth markets like Charlotte, N.C., and Austin, Tex.
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By: Gail Kalinoski, Contributing Editor
Colonial Properties Trust, a multi-family-focused REIT, is continuing its plan to dispose of older assets by selling five apartment communities in two transactions for a total of $81.8 million. The buyer or buyers were not identified.
The wholly-owned properties, which have a total of 1,250 units, are Cottonwood Crossing, Colonial Village at Bedford and Colonial Village at Bear Creek, all in Fort Worth, Texas; Colonial Village at Pear Ridge in Dallas and Colonial Grand at Shelby Farms I and II in Memphis, Tenn. The average age of the Texas properties was 23 years and the average age of the Shelby Farms properties was seven years, according to the Birmingham, Ala.-based REIT.
“The pricing demonstrates the value we have created in these properties as well as our ability to execute our plan in a challenging real estate environment,” Weston Andress, president & CFO, said in a statement. “We are pleased with the interest we received on these properties and are cautiously optimistic about the remainder of our sales pipeline that appears to be firming up for the balance of this year.”
The sale of the four Texas properties represented a market cap rate of 6.5 percent and the 450-unit Colonial Grand at Shelby Farms sale had a market cap rate of 5.9 percent, including a short-term seller financing of $27.8 million with a maximum term of 90 days, according to a news release. The combined market cap rate for all the properties was 6.2 percent.
In the past year, Colonial has decreased its interests in office and retail assets as part of its goal of becoming primarily a multifamily REIT. It has not totally relinquished its presence in those sectors entirely, often selling some of its assets into joint ventures. As of March 31, the company owned or managed 16.2 million square feet of office space and 8.1 million square feet of retail shopping space mostly in key Sunbelt states from Virginia to Nevada.
As of the end of the first quarter, the REIT owned or managed 38,822 apartment units. A July 16, 2007, CPN story noted Colonial’s strategy involves developing new properties and renovating existing properties.
When it released its first-quarter 2008 financial results on April 24, Colonial noted that it had completed four multifamily developments with a total of 824 units in that period. Including joint venture development activity, Colonial also had 2,539 apartment homes under construction at the end of Q1 with a total investment of about $241.1 million.
As of March 31, the company said its current multifamily development pipeline included seven wholly-owned communities with 1,998 units and one joint venture development with 541 apartments. Most of the new apartment communities are in growth markets like Charlotte, N.C., and Austin, Tex.
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