Prospect Capital REIT Invests $46 Million in Diverse Student Housing Portfolio

NEW YORK, Oct. 04, 2016 -- Prospect Capital Corporation (NASDAQ:PSEC) (“Prospect”) announced today that a Prospect portfolio company, together with a co-investor, invested a combined total of approximately $72 million on September 28, 2016 in the acquisition of eight student housing properties located at Division I universities in five U.S. states.

National Property REIT Corp. (“NPRC”), a private real estate investment trust (“REIT”) owned by Prospect, committed to provide 67% of the junior acquisition capital, a portion of which will be funded post-closing. Vesper Holdings LLC (“Vesper”), an established student housing property management firm, provided 33% of the junior acquisition capital. Vesper serves as day-to-day manager of operations for the acquired portfolio.

The portfolio includes eight purpose built student housing properties that serve students attending Texas A&M University, Texas A&M University Corpus Christi, Kennesaw State University, Georgia Southern University, the University of Alabama, the University of Iowa, and Kansas State University. The properties, which have a total of 4,925 bedrooms, have been designed for and are focused on the particular requirements of the student housing market. These properties generally feature two to four bedroom suites; property-wide WiFi; top of the line exercise, pool, outdoor kitchen, and cabana facilities; and large clubhouses with computer-equipped study rooms, lounge areas, meeting spaces, high-tech entertainment areas, and catered coffee and refreshment bar areas. Prospect and Vesper are implementing an $11 million value-added investment program, including upgrades to both unit interiors and community amenities, which is scheduled to be completed over the next two years.

In the past four years, Prospect’s portfolio company REITs have invested a total of $471 million in 22 separate transactions across 62 properties with approximately 25 million of rentable square feet. These properties include 39 multifamily residential apartment properties (aggregating approximately 14,000 multifamily units), 12 self-storage properties (aggregating approximately 6,000 units), three single tenant net lease facilities, and now eight student housing properties with 1,709 units and 4,925 beds.

"The acquisition of this student housing portfolio continues Prospect's strategy of selectively acquiring real estate assets in conjunction with established property managers, where the assets benefit from a highly diverse tenant base, stabilized cash flow, and discount to replacement cost in markets with limited new construction pipelines and positive demographic and economic trends," said Ted Fowler, Managing Director of Prospect Capital Management L.P. "These rent-producing properties benefit from long-term fixed rate financing to support a targeted strategy seeking increasing current yields on invested capital, long-term capital appreciation, inflation-protected income streams, and diversification across tenant count, geography, construction vintage, real estate sub-sector, and operating management.”

ABOUT PROSPECT CAPITAL CORPORATION

Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Prospect’s investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). Prospect is required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to Prospect could have an adverse effect on Prospect and its shareholders.

ABOUT VESPER

Vesper is a privately-held New York based real estate investment firm founded in 2007 by Elliot J. Tamir and Isaac J. Sitt. Vesper owns a diverse portfolio comprised of retail, parking and office, with a primary focus on student housing.

Vesper is a vertically integrated company that is deeply involved in every aspect of its real estate investments including asset management, construction, and real estate management. Vesper ensures optimal bottom line performance through its operating platform by maintaining control over business plan development, property branding and marketing, revenue management, expense control, and asset preservation.

Vesper Holdings ranks as one of the top 10 student housing owners in the United States. The Vesper portfolio consists of 31 properties totaling over 15,000 beds in 10 states.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under Prospect’s control, and that Prospect may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and Prospect undertakes no obligation to update any such statement now or in the future.

For further information, contact: 
Grier Eliasek, President and Chief Operating Officer 
[email protected] 
Telephone (212) 448-0702