Tricon Residential is selling an 80% stake in a $1.33bn (€1.08bn) US multi-family apartments portfolio to two unnamed institutional investors.
The North American residential real estate manager said it will retain a 20% interest in the portfolio of 23 multi-family apartments following the joint venture with the investors.
The transaction reflects a total portfolio value of $1.33bn including in-place debt. Tricon said it intends to use the $425m of gross proceeds from the sale of its 80% equity interest primarily to repay outstanding debt and for general corporate purposes.
Tricon said it is also in talks with the investors to form a separate growth-oriented joint venture to acquire additional multi-family properties in the US Sun Belt.
Gary Berman, president and CEO of Tricon Residential, said when Tricon acquired its US multi-family portfolio in 2019, it saw an opportunity to create a platform for growth within the largest investible property type in residential real estate and to explore synergies with our single-family rental business.
“Our intent has always been to pursue this strategy in partnership with third-party investors, and we are thrilled to work with two leading investors to add scale to our portfolio and to harness operational efficiencies over time.
“Moreover, today’s announcement marks a significant step in our commitment to deleveraging our balance sheet. In the midst of a pandemic, we have been able to not only grow our business but also, upon closing this syndication, reduce leverage to ~50% net debt/assets, a reduction of approximately 1100 basis points over the past year.”
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