Valley of the Sun

Valley of the Sun

November 30, 2009 08:00 ET

Valley of the Sun Completes Closing of Minimum Offering Proceeds for Acquisition and Rental of Greater Phoenix Single-Family Homes

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2009) –

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE SERVICES.

Valley of the Sun Limited Partnership and Valley of the Sun Fund (hereinafter "Valley of the Sun") are pleased to announce the successful initial closing of approximately $1.7 million of bundled equity units for the minimum offering of Valley of the Sun. The offering is still open and it is anticipated that the final closing will occur in 2010.

Proceeds, other than the associated startup costs, will be deployed for the acquisition of single-family homes in Greater Phoenix, Maricopa County, Arizona. Valley of the Sun will acquire single-family homes in the $60,000-120,000 targeted price range, within several indentified communities in the core metropolitan area of Greater Phoenix. Thereafter, the homes will be rented through Valley of the Sun's engagement with one of the State of Arizona's premiere single-family home property managers.

The Valley of the Sun offering allows investors to earn a minimum 8% hurdle rate return and indirectly participate in the ownership of a cash-flowing portfolio of undervalued and foreclosed homes in Greater Phoenix via the Limited Partnership and earn dedicated quarterly distributions of 8% through the Fund. With an offering objective of purchasing and renting "average class assets in above average locations", it is also an opportunity for Canadian investors to enhance and diversify their investment portfolios, without the hassles of directly owning foreign real estate or being subjected to the daily fluctuations of the stock market.

Through the offering, investors receive a first charge secured investment, which investment recognizes and capitalizes on the fundamentals of the undervalued single-family home market in Greater Phoenix. While the area is experiencing a depressed real estate market, it still possesses demographics that lend to long-term growth and stability. Phoenix also boasts an average age of 31.6 years, which is expected to provide long-term organic population growth and household formation. These factors unveil a rare opportunity for investment during the trough of the real estate cycle.

"We have seen month-over-month increases in resale median sales price on a per home and per square foot basis over the course of the last several months within our targeted price range. As well, year-over-year sales are up 61%. This is coupled with continued strong demand in the rental market due to current credit conditions. In addition, we continue to see the Greater Phoenix market fare better than neighbouring Southwest US cities with respect to unemployment and median monthly income. "When looking at real-time data from the Greater Phoenix Multiple Listing Service (MLS) and the Cromford Report, it is clear that home prices in Greater Phoenix have changed direction in a stabilizing manner" explains Jarrett Zielinski, President, CEO and Director of the offering, who has experience in real estate acquisitions with some of Canada's top real estate companies, including Boardwalk REIT. "Purchasing undervalued assets through the bottom of the real estate cycle, has turned single-family residential property in Greater Phoenix into a viable cash-flow investment with the potential for long-term capital appreciation. Leveraging our longstanding relationships on the ground has enabled us to package a cash-flowing, tax efficient investment, supported by a strong management team. We believe the current market in Greater Phoenix, together with the strict criteria and processes we have implemented on the ground, provides a once in a generation investment opportunity."

Investors will benefit from our acquisition of residential real estate at these historical low values, properties are vended in at original purchase cost typically from auction at the court house steps, optimizing investor capital with very low transaction costs. In addition to quarterly distributions earned from rental of the portfolio of homes, Valley of the Sun provides a minimum 8% hurdle rate with the remaining distributable cash to be split 72% to investors and 28% to the Valley of the Sun general partner.

This press release is not an offer to sell securities in the United States. Securities may not be offered or sold in the United States in the absence of registration or an exemption from registration.

Jarrett Zielinski is available to the media for interviews and comments about the Valley of the Sun offering or about the real estate market in the Phoenix, Arizona area.

About the Valley of the Sun offering

The Valley of the Sun offering is a tax-efficient real estate investment capitalizing on the real estate downturn of Greater Phoenix, Maricopa County, Arizona. The offering will acquire, tenant and manage a diversified portfolio of existing high-quality, single-family residential properties as income producing real estate for long-term investment.

The Valley of the Sun offering is supported by a diverse management team that brings hands-on real estate valuation, regulatory and structuring experience.

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