Real estate investment company Starlight Investments, along with Campar Capital Corporation , has announced the successful completion of a previously declared plan to consolidate four Starlight funds invested in the US multi-family real estate market into one main fund.
According to their statement, outstanding units of the Starlight US Multi-Family Core Fund, Starlight US Multi-Family (No. 2) Core Fund, Starlight US Multi-Family (No. 3) Core Fund, Starlight US Multi-Family (No. 4) Core Fund, which they referred to individually as Funds 1 through 4, have all been acquired by Starlight US Multi-Family (No. 5) Core Fund, referred to as Fund5. Fund5 has also acquired the outstanding common shares of Campar.
In connection with the completed arrangement, former unitholders of Funds 1 to 4 should have received a stub period distribution from Oct. 1 to Oct. 17, with distributions to be paid out on or about Oct. 28 to investors documented as unitholders as of Oct. 14.
The consolidation was announced to the investing public in September, with promised benefits that include increased cash distributions, increased geographic diversification in US multi-family real estate with further upside potential, experienced managers with track record of value creation, and possible deferral of capital gains tax for Canadian unitholders.
"Under Starlight's management, the income and value of the underlying assets in the existing Starlight Funds have increased significantly, with each existing Starlight Fund outperforming the targeted 12% internal rate of return considerably and delivering a weighted average internal rate of return of 35%1 while producing stable distributions," said President of Starlight U.S. Multi-Family Evan Kirsch in the September release. "The combination of the existing Starlight Funds is a compelling opportunity for existing Starlight Fund unitholders to substantially increase cash distributions and provide an exceptional yield on the cost of their initial investment."
Class A and Class U units of Fund5 were listed on the TSX Venture Exchange on Oct. 14. As of the date of the news release, trading on these units was expected to commence on Oct. 18. Funds 1 through 4, as well as Campar, should also be delisted from the TSX Venture Exchange by then.
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