Preferred Apartment Communities sold two Class A multifamily communities located in Kansas City, Kansas and Atlanta, Georgia. PAC sold the properties for gross aggregate disposition proceeds of approximately $113.6 million.
The properties combined to have an average annualized return of approximately 19.1%. "The attractive return on the sold properties provides PAC with further opportunities to reinvest our shareholders' capital into well-located, newly constructed and high-quality multifamily communities in our core markets," said John A. Williams, the Chairman and Chief Executive Officer for PAC.
The proceeds from one of the properties sold were deposited into a 1031 exchange account to be used for the acquisition of multiple assets in the future. The 1031 mechanism will allow the Company to defer tax liability on the sale of an asset and more efficiently redeploy its capital.
The first use of these proceeds was for the acquisition of Retreat at Greystone, a Class A multifamily community in Birmingham, Alabama, the acquisition of which was previously announced on March 27, 2017. We expect to use the remaining proceeds from the 1031 exchange for future acquisitions.