Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”) announced today that Prospect recently invested in three separate real estate transactions an aggregate of $55.4 million in 16 properties through its private real estate investment trusts (“REITs”) with three different co-investment property managers. Two of these transactions included nine multifamily garden-style apartment real estate properties with a combined investment by Prospect of $44.8 million. In the other transaction, Prospect acquired seven self-storage properties for a $10.6 million investment.
The multifamily transactions involved the purchase of an eight-property portfolio in the Columbus, Ohio area managed by a 25% equity co-investor property manager and one property in Fort Wayne, Indiana managed by a co-investment property manager with whom Prospect has previously co-invested. The self-storage transaction involved the acquisition of a seven-property portfolio located in multiple cities in Michigan.
Prospect structures its real estate property investments as investments of debt and equity into multiple REITs. Prospect currently has three such REITs, each of which works with different operating managers and co-investors to close and manage real estate property acquisitions. In combination with its prior real estate investments, Prospect in the past two years has in the aggregate invested $365.0 million in 16 separate transactions across 48 properties that include 38 multifamily residential apartment properties, seven self-storage properties, and three single tenant net lease facilities, with such 48 properties totaling approximately 15 million rentable square feet. Prospect may invest into other REITs in the future to make additional real estate-related investments in a tax efficient manner. Current areas of yield-oriented real estate interest for Prospect beyond apartment and self-storage assets include student housing and senior living.
“These real estate investments continue Prospect’s strategy of selectively acquiring stabilized properties at a discount to replacement cost in markets with limited new construction pipelines and positive demographic and economic trends,” said Ted Fowler, Managing Director of Prospect Capital Management LLC. “These rent-producing properties generate attractive and growing current yields (with long-term fixed rate financing), long-term capital appreciation potential, inflation-protecting income streams, and diversification across geography, construction vintage, and operating manager. We are actively screening new investment opportunities in real estate with a focus on properties involving diversified tenant bases that produce recurring and stable cash flow streams that we can distribute to our shareholders.”
Currently with over $7 billion of capital under management, Prospect has closed nearly $3 billion of new originations so far in calendar year 2014.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Prospect’s investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). Prospect is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Prospect could have an adverse effect on Prospect and its shareholders.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under Prospect’s control, and that Prospect may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and Prospect undertakes no obligation to update any such statement now or in the future.