Preferred Apartment Communities, Inc. bought a newly-constructed 312-unit Class-A multifamily community in Birmingham, Alabama, known as Retreat at Greystone.
"This property is a well-located, premier, high-quality multifamily asset, the acquisition of which reflects our continued strategy to have the youngest portfolio of Class A apartments in the REIT space," said John A. Williams, the Chairman and Chief Executive Officer for PAC.
PAC financed the acquisition using its newly closed Revolving Credit Facility with Freddie Mac and KeyBank. The Facility provides for aggregate borrowings of up to $200 million, subject to increasing the Facility to $300 million in KeyBank's sole discretion. The Facility has a five-year term and a floating interest rate that is dependent on both the type of property financed under the Facility and the amount of leverage utilized.
In addition, there will be no loan guaranties provided by PAC or its operating partnership and no property mortgages originated under the Facility will be cross-collateralized. For the acquisition of Retreat at Greystone, PAC borrowed $35.2 million on the Facility at a floating interest rate 185 basis points above 30-day LIBOR. PAC intends to refinance its loan on the property and has submitted its loan application and locked the interest rate with KeyBank to provide a seven-year term, non-recourse first mortgage loan at a fixed rate of 4.31% per annum.
Preferred Apartment Communities, Inc. is a Maryland corporation formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States.