7.	Investment and Disposition Activities

2015 and 2016 Transactions

Vintage Housing Holdings – sale of interest – On January 2, 2015 the Trust contributed an additional $5,645,000 to the venture to acquire the limited partner interests in two of the underlying properties. During the six months ended June 30, 2015 the Trust received distributions, inclusive of return of capital distributions, totaling $4,959,000 from the venture. On June 1, 2015 the Trust sold its interest in Vintage Housing Holdings LLC to an independent third party and received net proceeds of approximately $82,471,000. The liquidation value of this investment was $82,928,000 at December 31, 2014.

Edens Center and Norridge Commons – loan satisfaction - On February 5, 2015 the Norridge, Illinois property, which was one of the two properties that collateralized this loan receivable, was sold and the Trust received a principal payment of $15,275,000 plus all accrued and unpaid interest due in connection with the sale. The outstanding principal balance on the loan receivable was $97,000 at September 30, 2015. Upon satisfaction of the loan, the Trust was entitled to a participation interest equal to 30% of the value of both of the properties which collateralized the loan in excess of $115,000,000. On October 9, 2015 the Trust received $3,100,000 in full satisfaction of the loan receivable and the participation interest.

In connection with the repayment in full of the loan receivable collateralized by the Edens Center and Norridge Commons properties, the Trust sold its general partner interests in the two properties for an aggregate price of $493,000 pursuant to the terms of an existing option agreement. The sale price plus aggregate distributions received in 2015 was consistent with the Trust’s liquidation value at December 31, 2014.

44 Monroe, Phoenix, Arizona – property sale – On April 14, 2015 the venture in which the Trust holds an 83.7% interest sold its apartment building located in Phoenix, Arizona for gross proceeds of $50,650,000. The entire net proceeds, after closing costs and pro-rations, of approximately $49,143,000 were used to pay down the loan collateralized by the remaining properties in the venture. The liquidation value of the property was $50,650,000 at December 31, 2014.

Concord Debt Holdings – loan satisfaction—During May 2015 the Trust received a distribution of $20,173,000 from its Concord Debt Holdings LLC venture. The distribution was in connection with the sale of the luxury hotel assets owned by the MSREF hotel venture in which Concord Debt Holdings LLC holds an interest.

CDH CDO LLC – loan sale/satisfaction - On June 25, 2015 the venture closed on the sale of four bond assets and one loan asset for gross proceeds of $54,122,000. The proceeds of the sale were utilized to fully satisfy the debt of the venture. Additionally, in June 2015 a loan asset held by the venture was repaid at par, which was consistent with the Trust’s liquidation value at December 31, 2014. On July 1, 2015 the Trust received a $6,200,000 distribution from this venture.

Cerritos, California – property sale—On September 16, 2015 the Trust sold its office property located in Cerritos, California for gross proceeds of $30,500,000 and received net proceeds of $6,174,000 after satisfaction of third party mortgage debt, closing costs and pro rations. The liquidation value of the property was $29,916,000 at December 31, 2014.

Highgrove, Stamford, Connecticut – contract for sale – On June 26, 2015 the venture in which the Trust holds an 83.7% interest entered into a contract (the “First Purchase Agreement”) to sell its apartment building located in Stamford, Connecticut for gross proceeds of $90,000,000. An additional $1,000,000 non-refundable deposit was received from the buyer in November 2015 bringing the total aggregate non-refundable deposits received from the buyer to $5,000,000. On January 21, 2016 the First Purchase Agreement was terminated due to the prospective purchaser’s inability to timely close. In accordance with the terms of the First Purchase Agreement, the venture retained the $5,000,000 deposit.

On February 18, 2016 the venture entered into a purchase agreement (the “Second Purchase Agreement”) to sell this asset for gross proceeds of $87,500,000. The purchaser has provided a $10,000,000 non-refundable deposit. The closing is expected to occur, if at all, in the second quarter of 2016. In connection with entering into the Second Purchase Agreement, the venture entered into a settlement agreement with the purchaser under the First Purchase Agreement providing for the return of $1,000,000 of the previously retained deposit and an agreement to return up to an additional $1,500,000 of the previously retained deposit upon the closing or termination of the Second Purchase Agreement. As a result, assuming the consummation of the transaction contemplated by the Second Purchase Agreement, the venture will receive gross sales proceeds, inclusive of forfeited deposits, totaling $90,000,000.

701 Seventh Avenue – capital contributions—The Trust has invested an additional $8,865,000 in this venture during 2015. As of December 31, 2015 the Trust has total invested capital in the venture of $115,489,000.

Sullivan Center, Chicago, Illinois – capital contributions / contract for sale – The Trust has committed to fund 100% of retail tenant improvements and capital expenditure needs and 80% of office tenant improvements and capital expenditure needs at the Sullivan Center property in Chicago, Illinois that are not met by current operating cash flow at the property. During 2015 the Trust funded $3,998,000 for improvements, and to date in 2016 the Trust funded an additional $2,794,000 for improvements. All amounts funded are considered additions to the mezzanine loan and accrue interest at the rate of 15% per annum.

On January 8, 2016 the Trust entered into a contract with its Sullivan Center venture partner to sell its interest in WRT One South State Lender LP which holds the mezzanine loan on the property and its interest in WRT-Elad One South State Equity LP for an aggregate purchase price of approximately $91,576,000 subject to upward adjustment for additional advances on the mezzanine loan by the Trust prior to closing plus accrued and unpaid interest. The additional $2,794,000 advanced on the mezzanine loan on January 15, 2016 will be added to the purchase price at closing. The buyer’s $3,000,000 deposit under the purchase contract is non-refundable. If consummated, the sale is expected to close by the end of the second quarter of 2016.

Lake Brandt, Greensboro, North Carolina – contract for sale—On January 20, 2016 the Trust entered into a contract with an independent third party to sell its residential property known as Lake Brandt Apartments for gross proceeds of $20,000,000. The Buyer’s $500,000 deposit under the contract is non-refundable. If consummated, the sale is expected to close in the second quarter of 2016. The liquidation value was $20,000,000 at December 31, 2015 and $18,610,000 at December 31, 2014.

2014 Transactions

Playa Vista – loan activity – On January 10, 2014 the mezzanine loan agreement was amended to increase the principal balance by up to $4,000,000 and to increase the interest rate by 1.5% to a rate of 16.25% per annum. The Trust’s share of the increased loan amount was up to $2,000,000 of which $1,992,000 was funded.

On July 7, 2014 the Trust acquired for $14,000,000 the additional 50% interest in the Playa Vista loan. The Trust also paid $108,000 for the prorated share of interest accrued through June 30, 2014. The purchase price represented a premium of approximately $762,000 over the face of the loan inclusive of interest through June 30, 2014.

On December 9, 2014 the Trust received repayment in full on its $27,394,000 loan receivable collateralized by the office complex in Playa Vista, California. In addition, the Trust received $6,565,000 in exchange for its equity participation interest in the underlying collateral resulting in total proceeds of $33,959,000. The liquidation value of this investment, including the loan receivable and the equity participation, was $29,369,000 at August 1, 2014. Total proceeds exceeded the initial liquidation value as a result of the cash received in satisfaction of the Trust’s participation interest exceeding the Trust’s initial estimate at August 1, 2014.

Loan portfolio – sale of interest – In February 2014 the Trust sold its interests in the loans secured directly or indirectly by Hotel Wales, Wellington Tower, 500-512 Seventh Avenue, Legacy Orchard and San Marbeya for an aggregate sales price of $42,900,000. The selling price is net of the secured financings on the Hotel Wales and San Marbeya loans which totaled $29,150,000. In connection with the sale, the Trust retained an interest only participation in each of the Legacy Orchard and Hotel Wales loans entitling the Trust to interest at 2.5% per annum on the principal amount of the Legacy Orchard loan and 0.5% per annum on the principal amount of the Hotel Wales loan. No gain or loss was recognized on the sale of the loans.

Newbury Apartments – property sale – On February 26, 2014 the Trust sold its interest in the Newbury Apartments property located in Meriden, Connecticut to an independent third party for gross sale proceeds of $27,500,000. After costs, pro-rations and the transfer of the debt, the Trust received net proceeds of approximately $5,106,000 and recorded a gain of $4,422,000 on the sale of the property which is included in income from discontinued operations.

Marc Realty – sale of interest – On March 5, 2014 the Trust sold to Marc Realty, its venture partner, the Trust’s equity investments in High Point Plaza LLC, 1701 Woodfield LLC and Enterprise Center LLC and its interest in the River City, Chicago, Illinois property for gross sale proceeds of $6,000,000. The Trust received $1,500,000 in cash and a note receivable for the remaining $4,500,000. The note was repaid in full during June 2014. The Trust recorded a $3,000 gain on the sale of its interest in River City which is included in income from discontinued operations. The Trust recorded a $69,000 gain on sale of the three equity investments which is included in equity in income of equity investments.

The Trust also granted Marc Realty an option exercisable prior to March 1, 2016 to acquire its equity investment in Brooks Building LLC. Marc Realty exercised its option and acquired the Trust’s interest in Brooks Building LLC on September 8, 2014. The liquidation value of the investment was $5,770,000 at August 1, 2014, and the Trust received net proceeds of $5,770,000 on the sale.

Norridge—equity acquisition – On March 5, 2014, in connection with the Edens Center and Norridge Commons loan origination discussed below, the Trust acquired for $250,000 all of the issued and outstanding shares of Harlem Properties, Inc. (“Harlem”). Harlem is the entity that ultimately controls the entity that owns Norridge Commons, a retail shopping center located in Norridge, Illinois (the “Norridge Property”). The Trust, through its ownership of Harlem, has an effective 0.375% interest in the property and controls the business of the entity and all decisions affecting the entity, its policy and its management. As no other parties have significant participating rights, the Trust consolidated the Norridge Property as of March 5, 2014, the date it acquired the general partner interest.

The accompanying unaudited pro forma information for the seven months ended July 31, 2014 and the year ended December 31, 2013 is presented as if the acquisition of the Norridge Property on March 5, 2014 had occurred on January 1, 2013. This unaudited pro forma information is based upon the historical consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto. The unaudited pro forma information does not purport to represent what the actual results of operations of the Trust would have been had the above occurred. Nor do they purport to predict the results of operations of future periods.


Pro forma (unaudited)	For the Seven Months			For the Year Ended
(In thousands, except for per share data)	Ended July 31, 2014			December 31, 2013
Total revenue	$	57,101		$	108,333
Income (loss) from continuing operations		(2,776	)		7,666
Net income attributable to Winthrop Realty Trust		12,480			24,414
Per common share data—basic		0.16			0.38
Per common share data—diluted		0.16			0.38

Edens – equity acquisition – On March 5, 2014 the Trust acquired for $250,000 all of the issued and outstanding shares of Edens Properties, Inc. (“Edens”). Edens is a co-general partner of a limited partnership that is a general partner of Edens Center Associates, a retail shopping center located outside of Chicago, Illinois (the “Edens Property”). As the other co-general partner of Edens Center Associates has significant participating rights, the Trust accounts for this investment under the equity method of accounting.

Edens Center and Norridge Commons – loan origination – On March 5, 2014 the Trust originated a $15,500,000 mezzanine loan to an affiliate of the Trust’s venture partner in both the Sullivan Center and Mentor Retail LLC ventures (“Freed Management”) secured by a majority of the limited partnership interests in entities that hold a majority interest in the Edens Property and the Norridge Property. The loan bears interest at LIBOR plus 12% per annum (increasing by 100 basis points in each extended term), requires payments of current interest at a rate of 10% per annum (increasing by 50 basis points each year) and has a three-year term, subject to two, one-year extensions. Upon satisfaction of the loan, the Trust will be entitled to a participation interest equal to the greater of (i) a 14.5% internal rate of return (“IRR”) (increasing to 15.5% IRR after the initial term) and (ii) 30% (increasing to 40% after the initial term and 50% after the first extended term) of the value of the properties in excess of $115,000,000. As additional collateral for the loan, Freed Management pledged to the Trust its ownership interest in the Trust’s Sullivan Center and Mentor Retail LLC ventures.

Queensridge – loan satisfaction – During the quarter ended March 31, 2014 several of the condominium units collateralizing the Queensridge loan receivable were sold resulting in principal payments to the Trust of approximately $2,908,000. As a result of the payments, the outstanding principal balance on the Queensridge loan has been fully satisfied. In addition, the Trust received an exit fee of $1,787,000 in connection with the early satisfaction of the loan which is classified as interest income.

Crossroads I & II – property sale – On May 1, 2014 the Trust sold its wholly-owned office properties referred to as Crossroads I and Crossroads II located in Englewood, Colorado to an independent third party for aggregate gross sale proceeds of $31,100,000. After costs and pro-rations the Trust received net proceeds of approximately $29,633,000 and recorded a gain of $5,723,000 on the sale of the properties which is included in income from discontinued operations.

Amherst – property sale – On June 25, 2014 the Trust sold its wholly-owned office property located in Amherst, New York to an independent third party for gross sale proceeds of $24,500,000. After costs, pro-rations and a reserve holdback the Trust received net proceeds of approximately $21,226,000 on the sale of the property. Upon completion of the parking area for the office property the Trust received $2,449,000 from the reserve in November 2014, which resulted in aggregate net proceeds of approximately $23,675,000. The Trust recorded a gain of $946,000 on the sale of the property which is included in income from discontinued operations.

Wateridge – sale of interest – On August 6, 2014 the Trust sold its interest in the WRT-Fenway Wateridge venture to its venture partner for approximately $2,383,000 which equaled its liquidation value at August 1, 2014.

Stamford – loan satisfaction – On August 6, 2014 the Trust’s venture which held the mezzanine loan secured by seven office properties in Stamford, Connecticut received payment in full on the loan. The Trust received net proceeds, inclusive of accrued interest, of $9,450,000 in connection with the payoff which equaled the liquidation value at August 1, 2014.

Shops at Wailea – loan satisfaction – On August 7, 2014 the Trust received $7,556,000, inclusive of accrued interest, in full repayment at par of its loan receivable collateralized by the Shops at Wailea. The liquidation value of this investment was $7,516,000 at August 1, 2014.

5400 Westheimer – sale of interest—On October 1, 2014 the Trust received $1,033,000 in full repayment of the note due from its venture that owns the property located at 5400 Westheimer Court, Houston, Texas. On October 15, 2014 the Trust sold its interest in this venture to one of the venture partners for approximately $9,690,000. The liquidation value of this investment, including the note and the Trust’s interest in the venture, was $10,777,000 at August 1, 2014.

Waterford Place Apartments – property sale—On October 16, 2014 the Trust sold its Waterford Place apartment building in Memphis, Tennessee to an independent third party for gross proceeds of $28,160,000 which equaled the liquidation value at August 1, 2014. After satisfaction of the debt and payment of closing costs, the Trust received net proceeds of approximately $15,290,000.

Kroger-Atlanta – property sale—On October 20, 2014 the Trust sold its retail property located in Atlanta, Georgia for gross proceeds of $1,500,000 and received net proceeds of approximately $1,464,000. The liquidation value of this property was $2,000,000 at August 1, 2014. The decline in value was the result of a change in the lease up assumptions for the property.

Kroger-Greensboro – property sale - On October 20, 2014 the Trust sold its retail property located in Greensboro, North Carolina for gross proceeds of $1,750,000 and received net proceeds of approximately $1,709,000. The liquidation value of this property was $2,500,000 at August 1, 2014. The decline in value was the result of a change in the lease up assumptions for the property.

Pinnacle II—loan sale - On October 22, 2014 the Trust sold its B-Note receivable which had an outstanding principal balance of $5,017,000 for net proceeds of approximately $4,967,000. The liquidation value of this investment was $4,989,000 at August 1, 2014.

San Pedro – property sale - On October 24, 2014 the venture in which the Trust holds an 83.7% interest sold its apartment building located in San Pedro, California for gross proceeds of $23,800,000 which equaled the liquidation value at August 1, 2014. The entire net proceeds of approximately $23,090,000 were used to pay down the $150,000,000 loan collateralized by the four properties in the venture.

Kroger-Louisville – property sale - On November 25, 2014 the Trust sold its retail property located in Louisville, Kentucky for gross proceeds of $2,500,000 and received net proceeds of approximately $2,334,000. The liquidation value of this property was $2,500,000 at August 1, 2014.

1515 Market – property sale - On December 2, 2014 the Trust sold its office property located at 1515 Market Street, Philadelphia, Pennsylvania for gross proceeds of $82,345,000 and received net proceeds of approximately $40,304,000 after satisfaction of the third party mortgage debt, closing costs and pro rations. The liquidation value of this property was $81,314,000 at August 1, 2014.

Burlington – property sale – On December 23, 2014 the Trust sold its office property located in South Burlington, Vermont for gross proceeds of $2,850,000 and received net proceeds of approximately $2,475,000. The liquidation value of this property was $3,225,000 at August 1, 2014. The decline in value was the result of a change in the lease up assumptions for the property.

Sealy Northwest Atlanta – sale of interest—On December 23, 2014 the Trust sold to Sealy, its venture partner, the Trust’s interest in Sealy Northwest Atlanta for total proceeds of $5,641,000. The liquidation value of this investment was $5,692,000 at August 1, 2014.

701 Seventh – capital contributions – During 2014 the Trust made additional capital contributions of $53,187,000 with respect to its interest in the venture that holds an indirect interest in the property located at 701 Seventh Avenue, New York, New York, bringing aggregate capital contributions through December 31, 2014 to $106,624,000.

Other Activity:

Notes Payable – On September 10, 2014 the Trust obtained a $25,000,000 unsecured working capital loan from KeyBank National Association. Borrowings under the loan bore interest at LIBOR plus 3%. The loan required monthly payments of interest only and had an initial maturity of March 10, 2015 with two, three-month extension options. Mandatory principal payments were required from net transaction proceeds from the sale or refinancing of any of the Trust’s assets. The loan was repaid in full in October 2014 from the proceeds of asset sales.

Series D Preferred Shares – On September 15, 2014 the Trust made the full liquidating distribution of $122,821,000 ($25.4815 per share) to the holders of its Series D Preferred Shares. Pursuant to the terms of the Series D Preferred Shares, the holders thereof have no further rights or claim to any of the remaining assets of the Trust.