Preferred Apartment Communities, Inc. (NYSE: APTS) announced the acquisition on November 4, 2016 of Galleria 75, an outstanding well-located seven acre site that was recently rezoned to allow mixed-use redevelopment, including up to 600 multifamily units. The property is strategically located immediately north of the Encore multifamily property development and south of the Cobb Energy Performing Arts Center off Cumberland Boulevard in Cobb County, Georgia.
"The property currently maintains a 110,000 square foot office property, which offers a unique combination of in-place yield and future redevelopment potential," said Daniel M. DuPree, the Chief Investment Officer for PAC. John A. Williams, PAC's Chairman and Chief Executive Officer, added, "Concurrent with our acquisition, we were able to rezone the property to allow mixed-use redevelopment, including up to 600 multifamily units. Because the existing office is stabilized and generating excellent cash flow we have the flexibility to continue to own and operate the property on an "as-is" basis until such time we believe the market will reward us for adding density."
PAC acquired this property through a wholly-owned subsidiary and financed the acquisition by assuming the existing first mortgage loan from RGA Reinsurance Company, with an outstanding principal balance of approximately $5.9 million that has a maturity date of July 1, 2022 and a fixed interest rate of 4.25% per annum. There are no loan guaranties provided by PAC.
About Preferred Apartment Communities, Inc.
Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States. As part of our business strategy, we may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and we may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the development of multifamily communities and other properties. As a secondary strategy, we may acquire or originate senior mortgage loans, subordinate loans or real estate loans secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest not more than 20% of our assets, subject to any temporary increase unanimously approved by our board of directors, in other real estate related investments such as grocery-anchored shopping centers, senior mortgage loans, subordinate loans or real estate loans secured by interests in grocery-anchored shopping centers, membership or partnership interests in grocery-anchored shopping centers and other grocery-anchored shopping center related assets as determined by our manager as appropriate for us. At September 30, 2016, the Company was the approximate 96.5% owner of Preferred Apartment Communities Operating Partnership, L.P., or the Operating Partnership. Preferred Apartment Communities, Inc. has elected to be taxed as a real estate investment trust under the Internal Revenue Code of 1986, as amended, commencing with its tax year ended December 31, 2011.
