Item 2.01 Completion of Acquisition or Disposition of Assets.
Purchase and Sale Agreement
First Real Estate Investment Trust of New Jersey, Inc. ("FREIT") previously
reported that on November 22, 2021, certain affiliates (the "Sellers") of FREIT
entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement")
with MCB Acquisition Company, LLC (the "Purchaser") pursuant to which the
Sellers agreed to sell three properties (the "Properties") to the Purchaser. The
Properties consist of a retail center, an office building and a multifamily
apartment community owned by Grande Rotunda, LLC (the "Rotunda Property"), a
shopping center owned by Damascus Centre, LLC (the "Damascus Property"), and a
shopping center owned by WestFREIT Corp. (the "Westridge Square Property").
FREIT owns 100% of its subsidiary, WestFREIT Corp. ("WestFREIT"), a 60% interest
in Grande Rotunda, LLC ("Grande Rotunda"), the joint venture that owns the
Rotunda Property, and a 70% interest in Damascus Centre, LLC ("Damascus
Centre"), the joint venture that owns the Damascus Property.
In a Current Report on Form 8-K filed on January 6, 2022, FREIT reported that
the sale of the Rotunda Property was consummated on December 30, 2021 and
included financial information and pro forma financial information with respect
to the sale of the Rotunda Property as well as the anticipated sales of the
Damascus Property and the Westridge Square Property.
On January 7, 2022, the sale of the Westridge Square Property was consummated by
WestFREIT and the Purchaser for a purchase price of $20,984,604. WestFREIT paid
net cash outlays from the sale of approximately $0.7 million, after payment of
related mortgage debt in the amount of approximately $21.1 million and certain
transactional expenses and transfer taxes. In addition, the Purchaser deposited
a total of $1,015,396 in escrow with respect to certain leases at the Westridge
Square Property where the rent commencement date has not occurred or economic
obligations of WestFREIT under certain leases remain unpaid. The sale of the
Westridge Square Property resulted in a net gain of approximately $8.7 million
to FREIT, which includes approximately $0.7 million of proceeds anticipated to
be released from the $1,015,396 held in escrow.
On January 10, 2022, the sale of the Damascus Property was consummated by
Damascus Centre and the Purchaser for a purchase price of $36,685,067. Damascus
Centre received net proceeds from the sale of approximately $16.9 million after
payment of related mortgage debt in the amount of approximately $18.2 million
and certain transactional expenses and transfer taxes. In addition, the
Purchaser deposited a total of $484,934 in escrow with respect to certain leases
at the Damascus Property where the rent commencement date has not occurred or
economic obligations of Damascus Centre under certain leases remain unpaid. The
sale of the Damascus Property resulted in a net gain of approximately $10.1
million to FREIT, which includes approximately $0.4 million of proceeds
anticipated to be released from the $484,934 held in escrow.
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Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial Statements
Pro forma financial information with respect to the sale of the Properties was
filed with the Securities and Exchange Commission by FREIT on January 6, 2022
under Item 9.01 of its Current Report on Form 8-K dated December 30, 2021 ,
which information is incorporated herein by reference.
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