05:16 PM EDT, 05/22/2024 (MT Newswires) -- Firm Capital Apartment Real Estate Investment Trust (FCA-U.V, FCA-UN.V) after trade Wednesday reported it has completed the sale of one of its wholly-owned multi-family assets located in Florida for US$30.5 million. A statement noted the Florida property had a sales price in line with its IFRS value.

Wednesday's statement noted net of associated mortgage debt and closing costs, the net sale proceeds were near $12.0 million. As part of the transaction, the Trust has agreed to provide seller financing for $4 million due in 12 months (with a possible further one time six month extension) that will provide the Trust a possible escalating return on its investment as follows: for the first six months, the interest rate is 9%; is 11% from months 6 to 12; and is 15% from months 12 to 18.

On closing, the Trust received net sale proceeds of approximately $8.0 million which are being used for working capital purposes and debt reduction, which includes the Convertible Debenture.

Also, the Trust announced that it intends to redeem early all of its outstanding $13.8 million (C$18.8 million) aggregate principal amount of 6.25% convertible unsecured subordinated debentures due June 30, 2026 on or about July 2, 2024.

On the Redemption Date, the Trust will pay holders of Convertible Debentures a redemption price equal to $1,000 for each $1,000 principal amount of Convertible Debentures and all accrued and unpaid interest up to but excluding the Redemption Date. The Trust intends to use cash on hand to pay the redemption price of the redeemed Convertible Debentures.

As a result of the Florida property sale, the Trust has the following remaining Real Estate Investments: Wholly Owned -- two actively-managed properties located in Houston, Texas comprised of 485 multi-family units; Joint Ventures -- four joint venture investment properties managed by its partners located in Connecticut, Georgia, Maryland and New York comprised of 614 multi-family units; and Preferred Capital -- three preferred capital investments located in South Dakota, Texas and Florida.

"Currently," it said, "the remaining Wholly Owned properties are listed for sale, while the Trust is working with the various Joint Venture sponsors in either various sale processes or to hold for longer periods of time until unitholder value is realized. In the interim, the Trust has ample liquidity in dealing with the Convertible Debenture two years prior to maturity and has made the decision to repay early given its current cash position. Post repayment of the Convertible Debenture, the Trust will only have conventional, non-recourse mortgages secured against its various Wholly Owned and Joint Venture Real Estate Investments."

The Board added it will continue to assess matters on a quarterly basis and determine if the Trust should: distribute excess income; distribute net proceeds from asset sales, after debt repayment; reinvest net proceeds into other investments; distribute proceeds as a return of capital or special distribution; and/or use excess proceeds to repurchase Trust units in the marketplace. It is the Trust's current intention not to disclose developments with respect to the Strategic Review unless and until it is determined that disclosure is necessary or appropriate, or as required under applicable securities laws.