Cottonwood Residential acquires Pavilions Apartments, a 240-unit apartment community located in Albuquerque, NM.

FOR IMMEDIATE RELEASE

Salt Lake City, Utah, July 28, 2011 -- Cottonwood Residential acquired Pavilions Apartments, a 240-unit apartment community located in Albuquerque, NM from a tenant in common syndicate sponsored by Evergreen Realty. Cottonwood Residential provided a solution for investors to exchange out of their TIC position in the property into the Cottonwood Residential Operating Partnership in a tax-deferred exchange.

The management of the property was sold by Evergreen Realty to American Spectrum Realty in early 2010. Cottonwood Capital, an affiliate of Cottonwood Residential, will manage the property on behalf of Cottonwood Residential and the Tenant in Common investors who converted to owners in the LLC as partners with Cottonwood Residential. Chad Christensen, President of Cottonwood Capital, comments, “This is a transaction that we have worked on for over a year and we are happy to have everything finally come together so well in the end. The investors benefit from a new tax-deferred ownership vehicle with diversification across our portfolio, a new loan, and new property management.” Cottonwood Capital’s management portfolio consists of approximately 18,000 units, in 18 states.

This transaction is unique in that it provided the tenant in common investors the opportunity to voluntarily exchange their ownership stake in a single property for limited partnership units in Cottonwood’s diversified apartment portfolio, representing  interests in several multifamily properties.

Over 90% of the tenant in common owners participated in Cottonwood’s voluntary exchange offer, transferring their direct property ownership to Cottonwood via a tax-free 721 exchange.  This exchange allows the owners to preserve their tax deferred status for up to 15 years into the future assuming they retain their interest in the Cottonwood Residential portfolio.

Cottonwood simultaneously secured new first mortgage financing from Fannie Mae through CBRE Multifamily Capital, Inc. in Boston, MA, with assistance from CBRE’s Capital Markets group in Denver, CO. Given the loan’s loan-to-value of 75% and strong sponsorship from Cottonwood Residential, CBRE was able to price the 10-year loan at an interest rate of 5.31%.

According to Cottonwood CEO Daniel Shaeffer, “This transaction shows the validity of the Cottonwood Residential model. A group of TIC investors who need to refinance and are not ready to sell the property can maintain their tax deferral and potentially enjoy value growth through our diversified platform. The platform has also been well received from tenant-in-common investors in properties where a financing need is not imminent.” Cottonwood Residential controls a diversified apartment portfolio through an operating partnership that was originally formed for the purpose of acquiring equity interests in multifamily properties currently or formerly owned by tenant in common investor groups.  Cottonwood Residential is in the process of growing its portfolio through similarly structured transactions as well as direct acquisitions in its key operating markets.

Contact:
Haley Harper, Investor Relations
info@cottonwoodcap.com
(801) 278-0700

Cottonwood Residential acquires Lily Flagg Station Apartments, a 386-unit apartment community located in Huntsville, Alabama. 
FOR IMMEDIATE RELEASE

Cottonwood Residential acquired Lily Flagg Station Apartments, a 386-unit apartment community located in Huntsville, AL from a tenant in common syndicate sponsored by RealSource Equity Services of Salt Lake City, Utah.

This transaction is unique in that it provided the tenant in common investors the opportunity to voluntarily exchange their ownership stake in a single property for limited partnership units in Cottonwood’s diversified apartment portfolio, which consists of interests in several multifamily properties.

Over 90% of the tenant in common owners participated in Cottonwood’s voluntary exchange offer, transferring their direct property ownership to Cottonwood via a tax-free 721 exchange. This exchange allows the owners to preserve their tax deferred status for up to 15 years into the future assuming they retain their interest in the Cottonwood Residential portfolio.

Cottonwood simultaneously secured new first mortgage financing from Fannie Mae through Beech Street Capital in Birmingham, Alabama. Given the loan’s low loan-to-value of 65% and strong sponsorship from Cottonwood Residential, Beech Street was able to price the 10-year loan at an interest rate of 5.29%.

Cottonwood Capital Property Management, an affiliate of Cottonwood Residential, will manage the property on behalf of its owners. Cottonwood Capital Property Management’s portfolio consists of approximately 15,000 units, in 18 different states.

According to Cottonwood CEO Daniel Shaeffer, “This transaction shows the validity of the Cottonwood Residential model. A group of TIC investors who need to refinance and are not ready to sell the property can maintain their tax deferral and potentially enjoy value growth through our diversified platform. The platform has also been well received from tenant in common investors in properties where a financing need is not imminent. Cottonwood Residential controls a diversified apartment portfolio through an operating partnership that was originally formed for the purpose of acquiring equity interests in multifamily properties currently or formerly owned by tenant in common investor groups. Cottonwood Residential is in the process of growing its portfolio through similarly structured transactions as well as direct acquisitions in its key operating markets."

Contact:
Jennifer Pendleton, Investor Relations
info@cottonwoodcap.com
(801) 278-0700

Cottonwood Capital Announcement -  December 8, 2010
Cottonwood Capital Property Management takes over San Brisas Apartments in Houston, Texas. San Brisas was originally structured as a Delaware Statutory Trust and syndicated by a partnership of US Advisors and Creekstone. Cottonwood’s management began on December 1, 2010. San Brisas contains 312 units and is an A+ property 3 miles away from Watersong, a B property on Westheimer Drive; it is also managed by Cottonwood Capital Property Management. Cottonwood has already made some valuable strategic moves at San Brisas and they look forward to continuing to work with the San Brisas investors.

Max Cap Properties Announcement - July 15, 2010
Salt Lake City based Max Cap Properties, a Property Management subsidiary of Real Source Properties, incorporates its platform with Cottonwood Capital. Mark Hanks who oversees the Max Cap portfolio will also be joining Cottonwood Capital as a Senior Executive. Mr. Hanks will continue to work with the investors in these properties. It is the hope and intention that all investors of the Max Cap properties will see a seamless transition. “The Max Cap portfolio folds in nicely with our geographic presence and we think given our scale that we can bring some efficiencies and benefits to the Max Cap investors,” says Chad Christensen, President of Cottonwood Capital. Max Cap manages 1,236 units in 3 states. With this addition Cottonwood Capital now manages 12,453 units across 18 states.

Eliason 1031 Properties Announcement - May 26, 2010
Eliason 1031 Properties announces the recommendation of Cottonwood Capital as the replacement sponsor/asset manager for their Eliason TIC and DST portfolio. Eliason wrote in a letter to investors and registered representatives last night, “Cottonwood Capital has been a strong competitor of ours since we entered the TIC business in 2004. Just like Eliason, they put a very high priority on investor relations, and are similarly focused on multi-family assets. In fact, many of Cottonwood’s current properties are in the same markets as the Eliason properties. We feel that Cottonwood most closely resembles the culture and business philosophy of Eliason and that Cottonwood is the best option for you and your property over the long-term.

Chad Christensen, President of Cottonwood Capital notes “We are very pleased with the trust and confidence that Eliason has shown us. We look forward to working with David and Brian and with the Eliason investors in providing a smooth transition. We will bring our full support and attention both to the transition process and to the properties.”

Based in Salt Lake City, UT, Cottonwood Capital is a fully-integrated multifamily-focused real estate operating company. Cottonwood has sponsored 17 multifamily properties in the Tenant in Common channel over the last 5 years. Currently Cottonwood manages over 8,500 multifamily units in 11 states. Please see our Team section to read more about the people of Cottonwood Capital and our Property Management page to read about our Management philosophy and capabilities.

Cottonwood Capital continues to expand its property and asset management focus. Last year Cottonwood took over the property and asset management of a several DBSI properties. Cottonwood announced earlier this year that it now manages six properties sponsored by Desanto Realty Group. Additionally, we have recently been appointed by the investor groups from four Evergreen properties to take over asset management as well. Throughout these appointments we continue to focus on driving lasting results through sound operations at each of the properties we manage.