Prospect Capital Corp., a business-development company, recently acquired seven self-storage properties in Michigan for $10.6 million. The real estate purchase was part of three separate transactions totaling $55.4 million and 16 properties, including self-storage and multi-family apartments.
The acquisitions were made through Prospect’s private real estate investment trusts (REITs) with three different co-investment property managers. Two of the transactions included nine multi-family garden-style apartment real estate properties for a combined investment of $44.8 million.
Prospect structures its real estate property investments as investments of debt and equity into multiple REITs. The company currently has three such REITs, each of which works with different operating managers and co-investors to close and manage real estate acquisitions.
"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."
Over the past two years, Prospect has invested $365 million in 16 separate transactions across 48 properties, including 38 multi-family apartment properties, seven storage properties, and three single-tenant net lease facilities, totaling approximately 15 million rentable square feet. The company may invest in other REITs in the future to make additional real estate-related investments in a tax efficient manner, company officials said in a press release. Prospect has more than $7 billion of capital under management, and has closed nearly $3 billion of new originations this year.