2007-04-18 22:42:13 -
NEWTOWN SQUARE, Pa., April 18 /PRNewswire-FirstCall/ -- GMH Communities Trust through its student housing division, College Park Communities, today announced that it has completed a joint venture transaction with the Fidelity Real Estate Group, a unit of Pyramis Global Advisors, a Fidelity Investments Company, encompassing a total of six student housing properties. The Company previously announced that it would seek to place several of its currently-owned student housing properties into a joint venture as part of a strategic initiative to raise capital proceeds to repay outstanding indebtedness under
its line of credit with Wachovia Bank, National Association. Under the new ownership structure, the Company has completed the transfer of its 100% interest in five of the six student housing properties into the joint venture entity, which is now jointly owned by Fidelity and the Company. The sixth property to be included in the joint venture will be transferred upon lender approval of the joint venture's assumption of existing mortgage indebtedness on that property.
As part of the transaction the joint venture simultaneously placed new mortgage indebtedness on the five properties in an aggregate amount of approximately $88.0 million. The new mortgage debt has a five-year term and requires interest-only payments at a fixed rate of approximately 5.52%. After the repayment of previously existing mortgage debt on the properties, the Company received net proceeds from both the Fidelity equity contribution and the new mortgage debt totaling approximately $56.1 million, and has used these proceeds to repay an equal amount of indebtedness outstanding under the Company's line of credit.
The five properties currently included in the joint venture include University Uptown (Denton, TX), University Heights (Knoxville, TN), University Walk (Charlotte, NC), The Ridge (Morgantown, WV), and Campus Edge - Phase I (Charlotte, NC). The transfer of the sixth property to be placed into the joint venture, Campus Edge - Phase II, is expected to be completed within the next 30 days. Under the terms of the joint venture, the Company will continue to manage the properties and receive management fees.
"We are extremely pleased to announce our new joint venture agreement and look forward to working with Fidelity," commented John DeRiggi, Chief Investment Officer and President of the Company's student housing division. "Entering into this joint venture allows us to monetize the value of several assets and reduce outstanding indebtedness under our line of credit. Additionally, we expect to explore opportunities to acquire complementary student housing assets through similar joint venture structures that would enable us to enhance our franchise value by leveraging our property management and leasing talents."
About GMH Communities Trust
GMH Communities Trust (http://www.gmhcommunities.com/) is a publicly-traded Maryland real estate investment trust (REIT). We are a self-advised, self- managed, specialty housing company focused on providing housing to college and university students residing off-campus and to members of the U.S. military and their families residing on or near bases throughout the United States. GMH Communities also provides property management services to third-party owners of student housing properties, including colleges, universities, and other private owners. The Company, based in Newtown Square, PA, employs more than 2,150 people throughout the United States.
About Fidelity Real Estate Group
Fidelity Real Estate Group pursues value-added real estate investment opportunities throughout the U.S. on a fully discretionary basis for its managed funds. Fidelity Real Estate Group is a division of Pyramis Global Advisors which is a wholly owned subsidiary of Fidelity Investments. Fidelity Real Estate Group manages in excess of $17 billion on behalf of institutional and individual clients.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release that express the current beliefs and expectations of our management are "forward-looking statements," and include, but are not limited to, statements regarding the anticipated transfer of the final property to be transferred into the joint venture. These forward-looking statements are subject to risks and uncertainties, such as the ability to obtain lender approval on the transfer of the final property into the joint venture when currently anticipated or at all, as well as the risk factors discussed in the Company's periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties could cause our future results, performance or achievements to differ significantly from the results, performance or achievements expressed or otherwise implied by such forward- looking statements. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update publicly or revise any of the forward-looking statements.
Source: GMH Communities Trust
