Starlight U.S. Multi-Family Fund Completes Sale of Orlando Property, Announces Lender Taking Ownership of Raleigh Property and Commences Fund Liquidation.

Starlight U.S. Multi-Family (No. 2) Core Plus Fund has completed the sale of Hudson at East Apartments in Orlando, Florida, for US$68.4 million. The proceeds were used to repay the loan secured by Hudson. Additionally, the lender of the Summermill Loan has taken ownership of the Summermill property in Raleigh, North Carolina, discharging the Fund's liabilities and providing no cash proceeds. The Fund is now in the process of liquidation.

Title: Starlight U.S. Multi-Family (No. 2) Core Plus Fund Completes Sale of Orlando Property, Begins Liquidation

Starlight U.S. Multi-Family (No. 2) Core Plus Fund has completed the sale of Hudson at East Apartments, a 275-suite Class "A" institutional quality multi-family property located in Orlando, Florida. The property was sold for cash proceeds of US$68.4 million, with the funds used to fully repay the loan secured by Hudson, totaling US$67.0 million [1].

In addition to the sale, the lender of the loan secured by Summermill at Falls River Apartments, a 320-suite multi-family property located in Raleigh, North Carolina, has taken ownership of the property. This transfer satisfied the outstanding mortgage on Summermill, which amounted to approximately US$85.6 million, and discharged all other liabilities associated with the property. The Fund did not receive any cash proceeds from this transaction [1].

Both the Hudson Loan and the Summermill Loan matured on May 7, 2025. The Fund was unable to meet the conditions required to extend the term of the loans under the respective loan agreements, despite engaging in good faith negotiations. The lenders were unwilling to modify or extend the term of the loans without significant principal paydowns, which the Fund did not have the ability to satisfy [1].

As a result of these transactions, the Fund has completed the liquidation of all of its investment properties and is now in the process of completing its final wind-up and liquidation process. This process includes using cash on hand, including the net proceeds from the sale of Hudson, to pay all final liabilities of the Fund. Additionally, the Fund will delist its Class A and Class U Units from trading on the TSXV and issue the final liquidating distribution [1].

The Dissolution is expected to be completed in the fourth quarter of 2025, and the Fund expects to announce a specific date and amount for the Liquidating Distribution at a later date once it has determined the amount of any final liabilities to be paid [1]. The final T5013 tax slip for the Partnership is expected to be issued by no later than December 31, 2025 and is expected to include a U.S. source capital loss allocated to investors on a pro-rata basis. This capital loss will reduce the adjusted cost base of units of the Fund held by investors. Investors who acquired Units as part of the initial public offering of the Fund and have held them since such date are expected to trigger a capital loss if such Units are held until the final Liquidating Distribution is received [1].

References

[1] https://www.newswire.ca/news-releases/starlight-u-s-multi-family-no-2-core-plus-fund-completes-sale-of-orlando-property-announces-lender-taking-ownership-of-raleigh-property-and-commences-fund-liquidation-848587816.html