CRESCENT COMMUNITIES TO BE ACQUIRED BY SUMITOMO FORESTRY AMERICA, INC.
Charlotte, NC and Bellevue, WA (April 27, 2018) – Crescent Communities, LLC, a residential and commercial real estate company, and Sumitomo Forestry America, Inc. (“Sumitomo”), a comprehensive housing and wood products corporation and a wholly owned subsidiary of Sumitomo Forestry Co., Ltd., today announced the signing of a definitive agreement under which Crescent Communities’ three key businesses will be acquired by Sumitomo. The transaction is expected to close in the second quarter of 2018 and is subject to customary closing conditions. The transaction is not subject to any financing contingency.
The acquired business will take the Crescent Communities name and remain headquartered in Charlotte, North Carolina, under the existing management team led by Todd Mansfield, Chief Executive Officer. Palmetto Bluff, the acclaimed 20,000-acre resort community with a Montage branded hotel located in Bluffton, South Carolina, will be retained by Crescent Communities’ existing owners, with the local management team continuing in their roles and David O’Donoghue continuing to serve as President.
Crescent Communities has been a leading operator and developer of residential, commercial/mixed use communities for more than 55 years, with an established track record of successful and sustainable value creation through real estate ventures across a wide array of asset classes. Crescent Communities’ real estate platform focuses on owning and developing assets in high growth markets across the southeast and southwest. Crescent Communities is a recognized leader across the real estate industry with expertise in sourcing, development and asset management.
Sumitomo Forestry Co., Ltd. (“Sumitomo Forestry”), based in Japan, was founded over 320 years ago and is engaged in projects utilizing wood, with a goal of continuing to enhance the value of timber resources and contributing to the environment by enhancing housing and lifestyle in Japan and globally. Since inception, Sumitomo Forestry has worked steadily to expand its fields of business and meet the growing needs of society. Sumitomo Forestry is positioning its overseas business as a main area for growth, consistently expanding its real estate investments in the U.S. over the past 15 years through its subsidiary, Sumitomo Forestry America, Inc.
“We are excited to partner with Sumitomo as their investment will continue Crescent Communities’ growth strategy and enhance our capital structure,” said Todd Mansfield, Chief Executive Officer of Crescent Communities. “This acquisition is evidence of Sumitomo’s favorable view of our multi-product platform and geographic footprint in high growth markets. We look forward to leveraging their extensive real estate expertise, financial strength and global network to support our ongoing commitment to unleash value for all stakeholders.”
“Crescent Communities has successfully established itself as an integrated platform of diverse real estate assets with a significant development pipeline that provides a long runway for future growth,” said Atsushi Iwasaki, President of Sumitomo Forestry America, Inc. “We have been pursuing further expansion of our U.S. real estate business and the acquisition of Crescent Communities is a perfect fit with our investment philosophy. With favorable demographics, including outsized employment growth, Crescent Communities’ markets are well positioned to support healthy long-term real estate fundamentals. The Crescent Communities team brings a wealth of real estate development experience to our organization, and we look forward to our new partnership with Crescent Communities.”
Sumitomo Forestry America, Inc. will acquire Crescent Communities’ multifamily, single family, and commercial and mixed use businesses. Crescent Communities’ multifamily business, operating under the “NOVEL by Crescent Communities” brand, includes 20 communities in development and/or operations, totaling approximately 6,400 units. The company’s Fielding Homes single family home building business includes over 1,700 single family lots across six communities in Charlotte and Raleigh-Durham, North Carolina. The commercial and mixed use business development portfolio includes nearly 1.5 million square feet of assets, including the recently announced 742,000 square foot Ally Charlotte Center project in Charlotte, North Carolina. In addition, Sumitomo Forestry America, Inc. is also acquiring Crescent Communities’ development pipeline of nearly $2.0 billion of real estate projects, including 5,500 multifamily units, 2,200 single family units, and 2.5 million square feet of office and industrial assets.
In connection with the transaction, Crescent Communities is expected to redeem all of its outstanding 8.875% Senior Secured Notes due 2021. Terms of the transaction were not disclosed. Moelis & Company served as the exclusive financial advisor to Crescent Communities. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisor to Crescent Communities. Vinson & Elkins served legal advisor to Sumitomo.