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Tricon Capital Group Inc. (TCN-T) continues to “simplify” its holdings, announcing Monday an agreement to sell the 14 American manufactured housing communities in its Tricon Lifestyle Communities portfolio.
Longhaven Estates in Phoeniz, Arz., is one of 14 properties in the Tricon Lifestyle Communities portfolio. (Google Street View image)
Tricon did not identify the purchaser, other than to say it is an institutional investor. Financial details were not immediately released.
“The sale of our TLC manufactured housing communities portfolio represents the next meaningful step along our stated plan to simplify Tricon’s business,” said Gary Berman, president and CEO of Tricon Capital, in a release Monday morning. “We are very pleased with the outcome of the sales process, which upon closing is expected to result in a gain on our balance sheet carrying value.”
This is the second major property sale in recent months for the Toronto-based principal investor and asset management firm, which had announced in 2017 an intention to sell assets it no longer considers core to its business strategy. Late last year, it sold 1,523 residences in its Tricon American Homes portfolio to an institutional single-family rental owner and operator.
The sale of the TLC portfolio is expected to close in Q3, subject to customary closing conditions.
Communities in Arizona, California
In its Q1 2017 financial report to shareholders, Tricon valued the portfolio at approximately US$132 million.
The properties are located in Arizona (11) and California and comprise 3,065 rental pads. Thirteen of the communities are age-restricted.
Average rents, from its Q1 2017 report, were $423 per month at the time. That places them well below Tricon’s stated intention to focus on “middle market” properties, with rents above $1,000 per month.
“We intend to use the net proceeds largely to pay down our corporate credit facility, reducing our overall debt level and creating additional flexibility for future investments,” said Berman in the release. “Going forward, we will focus our growth efforts on our core investment verticals, where we have a clear path to scale, leadership and attractive long-term returns.”
The portfolio had largely been built during 2016, when Tricon purchased nine of the properties.
About Tricon Capital Group
At the end of 2017, Tricon had US$4.6 billion of assets under management, an increase of 53 per cent year-over-year according to its annual report.
Its investments and other business lines include Tricon Housing Partners, Tricon American Homes, Tricon Lifestyle Rentals (formerly Tricon Luxury Rentals), as well as private funds and advisory.
About 91 per cent of Tricon’s portfolio has been located in the United States, with the remaining nine per cent in Canada.
In addition to Tricon’s Toronto head office, the company has a regional office in San Francisco.
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