Tricon Capital Group Announces the Closing of a US$67.5 Million Commitment

Tricon Capital Group Inc. (Tricon) announced that it has committed US$67.5 million to a joint venture with Shea Homes active adult division (Shea) in Phoenix, Arizona.  Shea is one of the largest private homebuilders in the United States. The business plan is to develop 358 acres of land adjacent to the nearly complete Trilogy at Vistancia community (Vistancia West).  Of the $67.5 commitment, Tricon will commit approximately $49.5 million and Tricon's existing fund, Tricon XI, will commit the remaining $18.0 million -  Tricon intends to syndicate up to 90% of its commitment to an institutional investor.  The investment in Vistancia West will increase the Company's assets under management to greater than $1.5 billion, which in combination with the recent acquisitions of i) a 68.4% interest in Tricon IX, ii) the second close of Tricon XI and iii) Fulshear Farms, represents an increase of approximately 37% in AUM since December 31, 2012.
Investment Highlights:
  • This transaction is intended to start a broader relationship with Shea through their Trilogy division, which is considered to be the premier developer in North America of age-targeted resort style communities (otherwise referred to as active adult).
  • Vistancia West is adjacent to the almost completed Trilogy at Vistancia active-adult community in the Phoenix metropolitan area with a proven track record and an established base of residents. This community was the number one selling active adult community in the Phoenix market for a number of years, selling over 400 units per annum at its peak.
  • The Project seeks to take advantage of the strong demographics of the baby-boom generation in an established and desirable retiree market.
  • The Phoenix market, where Tricon has almost 25 years of investment experience, continues to recover from the recession and is ranked in the top 10 metropolitan areas for job growth in the United States for the year ending July 2013, leading to home price appreciation, as reported by the National Association of Realtors, of approximately 24% over the year ending Q2 2013.
"Tricon is very excited to enter into a new relationship with Shea Homes, one of the largest and most respected private homebuilders in the US.  Vistancia West, an institutional quality active adult community, provides Tricon with exposure to one of the fastest growing segments of the housing industry where the Arizona baby-boomer population continues to grow almost twice as fast as the national average," said David Berman, Tricon's Chairman and Chief Executive Officer.  "It has been a very productive year for Tricon which is reflected in the significant growth of assets under management.  Furthermore, we continue to find very attractive investment opportunities in the U.S. for both our existing fund and separate account partners.

on September 23, 2013