AVENTURA, Fla., May 28, 2013 /PRNewswire/ -- Trade Street Residential, Inc. (the "Company"), a fully integrated owner and operator of high-quality apartment communities in targeted growth markets in the southeastern United States, including Texas, today announced the redemption of the noncontrolling interests in four of its property-owning subsidiaries for total consideration of approximately $7.7 million. The noncontrolling interests were subject to interest rates at an average annual rate of 10.5%, plus additional monthly charges.
In addition, the Company has secured a commitment for a new 12-year $25.8 million first mortgage loan secured by Point at Canyon Ridge, a 494-unit apartment community located in Sandy Springs, Georgia. The loan is expected to have a fixed interest rate of 4.1% per annum with two years of interest only payments, followed by principal and interest payments based on a 30-year amortization schedule thereafter. The loan is expected to close on May 31, 2013, subject to customary closing conditions.
"We are pleased to announce these completed and anticipated financing transactions as we execute our strategy to increase the flexibility of our balance sheet, and begin to improve our cost of capital," stated Michael Baumann, Chairman and Chief Executive Officer of the Company. "Once completed, we anticipate the net benefit of these transactions will reduce our annual interest costs by approximately $1.3 million, which will improve our financial position and provide greater flexibility as we consider incremental opportunities to grow our portfolio in the future."
After redemption of the noncontrolling interests, the Company now owns 100% of the interests of the property-owning subsidiaries that own The Beckana on Glenwood, a 254-unit apartment community located in Raleigh, North Carolina, Merce Apartments, a 114-unit apartment community located in Addison, Texas, Park at Fox Trails, a 286-unit apartment community located in Plano, Texas and Terrace at River Oaks, a 314-unit apartment community located in San Antonio, Texas. The Company funded the redemption of these noncontrolling interests from proceeds of its recent public offering of its common stock. Proceeds from the new mortgage loan secured by Point at Canyon Ridge will be used to repay a $26.4 million 6.0% first mortgage loan, secured by the property, maturing on May 31, 2013.
About Trade Street Residential, Inc.
Trade Street Residential, Inc. (TSRE) is a full service, vertically integrated, self-administered and self-managed real estate investment trust focused on acquiring, owning, operating and managing conveniently located, garden-style and mid-rise apartment communities in mid-sized cities and suburban submarkets of larger cities primarily in the southeastern United States, including Texas.
This press release contains forward-looking statements within the meaning of the federal securities laws, including statements related to the offering and the expected use of the net proceeds therefrom, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases, which are predictions of or indicate future events or trends and which do not relate solely to historical matters. While forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could impact the Company's future results, performance or transactions, see the section entitled "Risk Factors" in the Company's final prospectus relating to the Company's recent public offering of its common stock.
SOURCE Trade Street Residential, Inc.