Asset Recycling Transactions
In June 2012, the company acquired the newly developed 256-unit Class A apartment community Colonial Grand at Fairview located in Dallas, Texas, for a total purchase price of $29.8 million. The purchase was funded with proceeds from asset dispositions and borrowings on the company’s unsecured credit facility. Colonial Grand at Fairview was recently completed and is currently in lease-up.
Also, effective June 30, 2012, the company sold its remaining 15 percent ownership interest in the 18-asset DRA/CLP office joint venture with DRA Advisors LLC (the Joint Venture). Pursuant to the transaction, which was effective as of June 30, 2012, the Joint Venture repurchased the company’s 15 percent membership interest for $2.0 million, and the company no longer has responsibility for $111.3 million of Joint Venture mortgage debt, which represents the company’s pro rata share of debt of the Joint Venture’s mortgage debt. The $2.0 million consideration is payable to the company following the occurrence of one or more capital events and after certain returns have been achieved with respect to additional capital expected to be invested in the Joint Venture by other members of the Joint Venture. Additionally, the company was released from a $4.2 million contingent liability related to a debt guaranty provided by the Joint Venture, which amount represents the company’s pro rata share of such guaranty obligation. The company also expects to transition management and certain leasing responsibilities to a third party over the next 60 to 90 days.
Development ActivityConstruction continued during the quarter on five wholly owned apartment communities: Colonial Grand at Hampton Preserve, a $58.3 million development with 486 units in Tampa, Florida; Colonial Grand at Double Creek, a $31.7 million development with 296 units in Austin, Texas; Colonial Grand at Lake Mary (Phase I), a $30.3 million development with 232 units in Orlando, Florida; Colonial Reserve at South End, a $59.3 million development with 353 units in Charlotte, North Carolina; and Colonial Grand at Lake Mary (Phase II), a $13.9 million development with 108 units in Orlando, Florida.