First Islamic launches new US real estate offering

The joint venture vehicle, Sunrise First Assisted Living Holdings LLC ("Sunrise First LLC"), has acquired lease (Ijara) interests in 12 properties comprising 940 residential units in the assisted living sector in the United States. The properties are located in six key markets: Los Angeles, New York, Chicago, Detroit, Philadelphia and Virginia. The total transaction value for the transaction is approximately $203.4 million.

First Islamic and its co-investors own 80% in the joint venture, with Sunrise holding the remaining 20%. Sunrise will act as asset manager of the joint venture and Sunrise personnel will manage the properties. Fannie Mae, one of the largest providers of funds for home mortgages in the United States, provided a $138 million Islamic Ijara financing facility to leverage 11 of the properties in the portfolio and GMAC provided an Ijara facility for one of the properties.

First Islamic's joint venture partner, Sunrise, is the oldest and largest (in terms of equity market capitalization) provider of assisted living services in the United States and has a strong reputation in the assisted living sector. Assisted living facilities cater to elderly people who need assistance with activities of daily living, but wish to live as independently as possible for as long as possible. Assisted living bridges the gap between independent living and nursing homes. Americans spend over $150 billion annually on senior housing and care, indicating a large and robust market with demographics heavily influencing positive economic trends. Sunrise operates or has commenced development of over 200 communities in 25 states, and several in Canada and the United Kingdom, with a total resident capacity of over 15,000.

First Islamic projects that the investment will generate a blended Internal Rate of Return ("IRR") of approximately 13.0% over the five-year investment horizon, inclusive of a projected annual cash yield of approximately 10.0% per annum, which will be distributed on a monthly basis.

Atif A. Abdulmalik, First Islamic's Chief Executive Officer, said "We are pleased to add a third asset class to our real estate portfolio following on the success of the US multifamily and distribution facilities investment offerings. Due to its healthcare focus, the assisted living sector is more recession resistant compared to other real estate asset classes."

Mohamed A. Nooruddin, Executive Director, Investment Placement, said "We have structured the investment to generate a stable annual cash yield, which will be distributed on a monthly basis to our investors. This should suit institutions and individuals looking for stabilized real estate assets with a steady income stream."