Preferred Apartment Communities, Inc. (“PAC”)

Active Offering Industry: Real Estate (REIT)

Sector: Multifamily

Minimum investment: $5,000 (then $1,000 increments)

Offering Type: Prospectus

Offering Amount (Max): $1,500,000,000

Offering Amount (Min.): N/A

Offering Price: $1,000 per unit

Targeted Annual Yield: 6% (paid monthly)

  • There is no public market for the Series A Redeemable Preferred Stock or Warrants and they do not expect one to develop.
  • Shares of Series A Redeemable Preferred Stock may be redeemed for shares of common stock, which rank junior to the Series A Redeemable Preferred Stock with respect to dividends and upon liquidation.
  • PAC will be able to call your shares of Series A Redeemable Preferred Stock for redemption under certain circumstances without your consent.
  • The cash distributions you receive may be less frequent or lower in amount than you expect.
  • Distributions paid from sources other than our net cash provided by operating activities, particularly from proceeds of any offerings of our securities, will result in PAC having fewer funds available for the acquisition of properties and other real estate-related investments, which may adversely affect PAC’s ability to fund future distributions with net cash provided by operating activities and may adversely affect your overall return.
  • PAC’s revenue and net income may vary significantly from one period to another due to investments in opportunity oriented properties and portfolio acquisitions, which could increase the variability of our cash available for distributions.
  • The Series A Redeemable Preferred Stock will be subordinate in right of payment to any corporate level debt that PAC may incur, and your interests could be diluted by the issuance of additional preferred stock, including additional Series A Redeemable Preferred Stock, and by other transactions.

INVESTOR MATERIALS

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OVERVIEW

Preferred Apartment Communities, Inc. (NYSE: APTS) completed its IPO on April 5, 2011.  PAC was formed primarily to acquire and operate multifamily properties in select targeted markets throughout the United States with current operations in over 20 nationwide markets, PAC affiliated entities include a full-service investment management firm, a full-service acquisition, asset management and disposition firm, as well as their core business, a full-service property level management firm. Collectively their management service firms oversee operations of over 31,000 multi-family units with over $2 billion in real estate assets.

PAC investment objectives are:

  • Primarily targeting assets that are:
    • Class A Multifamily, Student Housing, Grocery-Shopping Centers
    • Located in strong metropolitan markets throughout U.S.
    • Class A multifamily communities which they believe will generate sustainable cash flow.

Key statistics:

  • Minimum Offering Amount: N/A
  • Maximum Offering Amount: $1,500,000,000
  • OFFERING UNIT: 1 share of Preferred Stock and 1 Warrant to buy 20 shares of Common Stock
  • Offering Price: $1,000 per unit ($5,000 minimum investment then $1,000 increments)
  • Warrant Terms:
    • RIGHTS: Warrant grants the investor the right to purchase Common Stock at a fixed price.
      STRIKE PRICE: 20% above the prior 20 trading day weighted average price of our Common Stock on the date of issue. HOLDING PERIOD: Exercisable after 1 year. MATURITY: Expires after 4 years. TRANSFERABILITY: Detachable and fully transferrable.

As part of their business strategy, they may enter into forward purchase contracts or purchase options for to-be-built multifamily communities and may make real estate related loans, provide deposit arrangements, or provide performance assurances, as may be necessary or appropriate, in connection with the construction of multifamily communities and other properties. As a secondary strategy, they may acquire or originate senior mortgage loans, subordinate loans or mezzanine debt secured by interests in multifamily properties, membership or partnership interests in multifamily properties and other multifamily related assets and invest not more than 20% of their assets, subject to any temporary increase unanimously approved by their board of directors, in other real estate related investments such as grocery-anchored shopping centers, senior mortgage loans, subordinate loans or mezzanine debt secured by interests in grocery-anchored shopping centers, membership or partnership interests in grocery-anchored shopping centers and other grocery-anchored shopping center related assets as determined by their manager as appropriate for them.

An investment in the securities described herein involves risks and other considerations, including the ones described below. Before you invest, you should read the prospectus and other documents that Preferred Apartment Communities, Inc. (“PAC”) filed with the Securities and Exchange Commission (“SEC”) for more complete information about GWG and the risks and other considerations relating to the securities described herein. Any terms of securities described herein represent a general overview of certain selected terms and are qualified in their entirety by reference to the prospectus and other documents that PAC filed with the SEC.

THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN. AN OFFERING IS MADE ONLY BY THE PROSPECTUS. THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.

LEGAL NOTICE THE OFFERING STATEMENT FOR THIS OFFERING HAS NOT YET BEEN QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION UNLESS OTHERWISE INDICATED ABOVE. ACCORDINGLY, NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT, WILL NOT BE ACCEPTED. NO SALES WILL BE MADE OR COMMITMENTS TO PURCHASE ACCEPTED UNTIL THE OFFERING STATEMENT RELATING TO THIS OFFERING HAS BEEN QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION. A PROSPECTIVE PURCHASER’S INDICATION OF INTEREST IS NON-BINDING.