SOURCE: Prospect Capital Corporation

Prospect Capital Corporation

November 11, 2015 07:00 ET

Prospect Capital Invests $9.0 Million in Orchard Village Apartments, Bringing Total Real Estate Portfolio to 54 Properties

NEW YORK, NY--(Marketwired - Nov 11, 2015) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect") announced today that a Prospect affiliate and co-investors recently acquired Orchard Village Apartments ("Orchard") for $34.5 million of total asset value, $9.0 million of which was funded by a Prospect affiliate.

Sinatra & Company Real Estate, LLC ("Sinatra") and Stadt Group Ltd. ("Stadt"), two residential property acquisition and management firms, provided 20% of the equity capital on a basis subordinated to Prospect's capital. Prospect invested through National Property REIT Corp. ("National"), a private real estate investment trust owned and controlled by Prospect. Sinatra and Stadt serve as day to day managers of Orchard's operations.

Orchard is a 272-unit garden-style multifamily complex built in 2000 and located on 17.3-acres in Aurora, Illinois. Orchard's units feature private entrances, spacious patios and balconies, full-size in-unit washers/dryers, and 9-foot or vaulted ceilings in a majority of units. The stand-alone clubhouse includes a fitness center, clubroom with kitchen, leasing/management office, and outdoor swimming pool with large sundeck. Prospect, Sinatra, and Stadt plan on implementing a value-added investment program that includes both property amenity and in-unit upgrades.

Prospect structures its real estate property investments as investments of debt and equity in its multiple private real estate investment trusts ("REITs"). Prospect currently has three such REITs, including National, each of which works with different operating managers and co-investors to close and manage real estate property acquisitions. In combination with its prior real estate investments, Prospect in the past three years has in the aggregate invested $411.3 million in 18 separate transactions across 54 properties that include 39 multifamily residential apartment properties (aggregating approximately 14,000 multifamily units), 12 self-storage properties, and three single tenant net lease facilities, totaling approximately 14.8 million rentable square feet.

"The Orchard real estate investment continues Prospect's strategy of selectively acquiring stabilized yield 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 LP. "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."

ABOUT PROSPECT CAPITAL CORPORATION

Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 ("1940 Act"). Prospect is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Prospect could have an adverse effect on Prospect and its shareholders.

ABOUT SINATRA & COMPANY REAL ESTATE

Sinatra & Company Real Estate LLC (www.SinatraAndCompany.com) invests in distressed and value-add real estate opportunities. The company has invested in over $150 million in real estate assets in Western New York and Southern California, which includes funding from Colony Capital, the Pritzker/Vlock Family Office, as well as local, regional and national banks. Today, in addition to its investment and development groups, Sinatra manages all of its properties through its world-class property management arm.

ABOUT STADT GROUP

Stadt Group Ltd. (www.StadtGroup.com) is a vertically integrated residential property management, development and acquisitions firm headquartered in Chicago. The firm's strategy is to acquire and manage value-add multifamily assets to achieve superior investment returns. Stadt Group is committed to the institutional quality multifamily markets and is pursuing programmatic value added acquisitions in specific core and core plus markets.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under Prospect's control, and that Prospect may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and Prospect undertakes no obligation to update any such statement now or in the future.