Tricon Capital buys 550 houses in Charlotte, N.C.

2013-01-03 06:29 ET - News Release


Mr. David Berman reports


Tricon Capital Group Inc. has acquired a 550-unit portfolio of homes in Charlotte, N.C., for $26-million (U.S.).

Highlights include:


  • Tricon acquires a portfolio of approximately 550 homes in Charlotte, N.C., for $26-million (U.S.). Based on current income in place, the portfolio is generating an income yield/cap rate of over 12.5 per cent (before maintenance/capex reserves).
    • The acquisition marks Tricon's expansion into Charlotte. The company's operating partner in the market will be Lake Success Living, Tricon's current partner in southeast Florida, which also has operations in Charlotte.
      • Tricon has also closed on a new partnership in Los Angeles county with Turnstone LLC, a leading local single-family rental operator, which will be launched in early 2013.
        • At year-end 2012, Tricon had deployed approximately $140-million of capital into its U.S. single-family rental platform and has acquired over 1,500 homes.


        The portfolio was assembled over several decades by a private individual and has an occupancy rate of approximately 95 per cent. Based on current rents in place and historical operating expenses, the purchase price equates to a cap rate of over 12.5 per cent (before maintenance/capex reserves). Tricon is entering Charlotte in partnership with Lake Success Living, which has been active in southeast Florida (Miami-Dade, Broward and Palm Beach counties) since 2009 and in Charlotte since mid-2012.

        In addition to its Charlotte expansion, Tricon has also closed on a new partnership in Los Angeles with Turnstone, a company that has been active in the single-family rental and for-sale sectors since 1997, and is known for its well-defined geographic focus, acquisition expertise and renovation acumen. This new partnership will begin acquiring homes in early 2013.

        "As part of the expansion plan for our U.S. single-family rental platform, we had identified Charlotte as a city with strong underlying population and employment growth fundamentals that serves as a regional hub for the southeastern United States," said David Berman, Tricon's chairman and chief executive officer. "This portfolio acquisition came along at an opportune time and has allowed us to quickly become a local market leader. Over time we intend to drive additional value from this acquisition by increasing rents to market levels and renovating homes that turn over with the long-term goal of maximizing rents and minimizing ongoing maintenance costs. In addition to Charlotte, we are excited about expanding into Los Angeles with Turnstone, an industry veteran with a stellar track record. As a whole, I am extremely pleased with the U.S. single-family rental platform that we built over the course of 2012 and fully expect that we will experience continued success in 2013 and beyond."

        We seek Safe Harbor.