New York, NY (December 23, 2015) – Bluerock Residential Growth REIT, Inc. (NYSE MKT: BRG) (“BRG” or “the Company”) announced today that it has completed the second phase of its acquisition of the Class A Ashton Reserve apartment community (“Ashton Reserve II”) in Charlotte, North Carolina. BRG acquired the first phase (“Ashton Reserve I”) in August of this year. With the second phase, BRG added an additional 151 newly-completed units.
BRG acquired Ashton Reserve II for $21.8 million or approximately $144,500 per unit, which compares favorably to pricing of $160,000 for similar projects in the market. The company funded the acquisition with an equity investment of approximately $7.5 million and with the proceeds of a $15.3 million 10-year, floating rate loan from Fannie Mae.
Ashton Reserve I and II were off-market transactions sourced directly with the seller, and BRG moved quickly to structure and execute the complex, two-part transaction. Ashton Reserve I was operating and carrying pre-existing mortgage debt while Ashton Reserve II was still under development. The Ashton Reserve II property was acquired at a cap rate of approximately 6.3%, equating to a combined cap rate of 6% for the two phases. This compares favorably to local market cap rates of approximately 5%
Built in two stages in 2013 and 2015, the Ashton Reserve Apartments feature high-end one-, two- and three-bedroom layouts, offering some of the most desirable in-unit features available in Charlotte’s Northlake submarket. All units feature nine foot ceilings with a stainless steel appliance package that includes a full-sized refrigerator, granite countertops, undermount sinks, and full size washer/dryers. Community amenities include lush landscaping, two clubhouses, fitness facilities, a swimming pool with oversized deck and grilling stations, as well as a business center and a private media center.
The Charlotte, NC market reports strong population growth among the rental-oriented 20-year-old to 34-year-old demographic, and BRG management believes that Ashton Reserve is well situated to take advantage of that growth. The Northlake submarket in which the property is located is approximately eight miles from Uptown Charlotte and is anchored by the one million square foot Northlake Mall, a premier retail destination for the affluent communities in the North Charlotte metropolitan area. Ashton Reserve is in close proximity to Lake Norman as well as to regional employers, major travel routes and the Charlotte-Douglas International Airport.
“This acquisition speaks to BRG’s deal sourcing capability as well as our ability to execute complex transactions, and we are very pleased to have completed the remainder of this deal,” said Ramin Kamfar, Chairman and CEO of BRG. “The fundamentals are strong, both phases leased up quickly, and the property is performing in line with the market, as we had expected.”
About Bluerock Residential Growth REIT, Inc.
Bluerock Residential Growth REIT, Inc. (NYSE MKT: BRG) is a real estate investment trust that focuses on acquiring a diversified portfolio of Class A institutional-quality apartment properties in demographically attractive growth markets to appeal to the renter by choice. The Company’s objective is to generate value through off-market/relationship-based transactions and, at the asset level, through improvements to operations and properties. The Company generally invests with strategic regional partners, including some of the best-regarded, private owner-operators in the United States, making it possible to operate as a local sharpshooter in each of its markets while enhancing off-market sourcing capabilities. BRG is included in the Russell 2000 and Russell 3000 Indexes. The Company has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes. For more information, please visit our website at: www.bluerockresidential.com.
Forward Looking Statements
This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward looking statements. These forward looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. 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. Investors should not place undue reliance upon forward looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 4, 2015, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.