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Real Estate Transactions
12 Months Ended
Nov. 03, 2019
Leases [Abstract]  
Real Estate Transactions
Real Estate Transactions

Orange, CA
In March 2016, Volt Orangeca Real Estate Corp., an indirect wholly-owned subsidiary of the Company, completed the sale of real property comprised of land and buildings with office space of approximately 200,000 square feet in Orange, California for a purchase price of $35.9 million. The Company concurrently entered into a Purchase and Sale Agreement (the “PSA”) and a Lease Agreement (the “Lease”) with Glassell Grand Avenue Partners, LLC (the “Buyer”), a limited liability company formed by Hines, a real estate investment and management firm, and funds managed by Oaktree Capital Management L.P., an investment management firm. The Buyer assigned the PSA and the Lease to Glassell Acquisitions Partners LLC, an affiliate of the Buyer, prior to the closing.
The transaction was accounted for as a sale-leaseback transaction and as an operating lease. The initial lease term is 15 years plus renewal options for two terms of five years, each based on the greater of fair market value at the time of the renewal or the base annual rent payable during the last month of the then-current term immediately preceding the extended period. The annual base rent was $2.9 million for the first year of the initial term and subsequently increases on each adjustment date by 3.0% of the then-current annual base rent. A security deposit of $2.1 million was required for the first year of the lease term which is secured by a letter of credit under the Company’s existing financing program, which was reduced to $1.4 million in the second quarter of fiscal 2017 and further reduced to $0.7 million in the second quarter of fiscal 2018. The security deposit will subsequently be reduced if certain conditions are met. Accordingly, the gain on sale of $29.4 million was deferred and, through the fourth quarter of fiscal 2019, was being recognized over the remaining lease term in proportion to the related gross rental charges. However, in the first quarter of fiscal 2020, the unamortized deferred gain of $22.2 million will be recognized as a cumulative-effect adjustment to equity upon adoption of ASU 2016-02, Leases (Topic 842). For fiscal 2019 and 2018, the amortization was $1.9 million and $1.9 million, respectively.