The buyer is a private investment group including Houlihan-Parnes Realtors LLC and C.L.K. Management Corp. Salomon Smith Barney advised New Plan in the transaction. Roughly $55 million of the gross proceeds from the sale will be used to pay off existing mortgage debt on the garden apartment communities.
Short-term plans for the remaining proceeds are to pay down New Plan's existing debt. Down the road, leftover cash from the sale will be used to spruce up the REIT's core shopping-center portfolio, repurchase public equity or debt or in the pursuit of new acquisitions. The portfolio comprises 53 garden-apartment communities, leaving New Plan with roughly 250 properties after the sale.
The only loose end in what appears to be a tightly closed deal is an Alabama-based property, the Club Apartments. The community is currently under contract to be sold separately to the Homewood City Board of Education, Homewood, AL. The sale is slated to close within 30 days, but in the event that it does not go through, the buyer of the portfolio is obligated to purchase the property.
As part of the sale, New Plan has provided the buyer with a $31 million letter of credit for which the REIT will earn a 9% annual fee with a one-point commitment fee. The letter of credit has a three-year term but after 18 months the buyer has the right to terminate or reduce the debt. The buyer can also extend the term for an extra year.
New Plan, a major player in the shopping-center REIT arena, has $2.9 billion in assets and its properties stretch across 31 states with roughly 36 million sf of gross leasable area.
In a separate announcement yesterday, New Mark plans to release its third quarter 2001 results the morning of Thursday, November 8, 2001. A teleconference with the Company's Chief Executive Officer and President, Glenn J. Rufrano, will be held on that same day at 2 p.m. For details, see the company's Web site at http://www.newplanexcel.com
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
