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Contingencies and Commitments
6 Months Ended
Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Commitments

NOTE 9 – CONTINGENCIES AND COMMITMENTS

 

From time to time, we may be subject to claims and litigation in the ordinary course of business. We do not believe that any such claim or litigation will have a material adverse effect on the Consolidated Balance Sheets or results of operations.

 

In addition to the property purchased subsequent to quarter end, as described below in Note 10, we have entered into agreements to purchase two new industrial buildings. One of the purchase commitments is for a new built-to-suit industrial building that is leased to Amazon Fulfillment Services, Inc. and is guaranteed by Amazon.com, Inc. The other purchase commitment is for a new build-to-suit industrial building that is currently being developed in Charleston, SC and is leased to FedEx Ground Package System, Inc. The two new buildings consist of approximately 624,000 square feet, with a weighted average net-leased term of 12.3 years. The total purchase price for these two properties is approximately $80,863,000. Approximately 363,000 square feet, or 58%, is leased to Amazon Fulfillment Services, Inc. and approximately 261,000 square feet, or 42%, is leased to FedEx Ground Package System, Inc. Subject to satisfactory due diligence and other customary closing conditions and requirements, we anticipate closing these transactions sometime during the remainder of fiscal 2018 and the first quarter of fiscal 2019. In connection with one of these properties, we have entered into a commitment to obtain a 15 year, fully-amortizing mortgage loan of $29,860,000 at a fixed rate of 3.82%.

 

We are under contract to sell two properties consisting of (i) an 87,500 square foot vacant building located in Ft. Myers, FL, for $6,400,000, which is approximately $2,400,000 above our U.S. GAAP net book carrying value, and (ii) a 68,370 square foot building located in Colorado Springs, CO for $5,800,000, which was approximately our U.S. GAAP net book carrying value. The completion of these two sales are each anticipated to close during the third quarter of fiscal 2018 and are subject to customary closing conditions and requirements.

 

We have committed to construct a parking lot expansion at a property that is being leased to FedEx Ground Package System, Inc. located in Ft. Mills, SC. The expansion costs are expected to be approximately $1,834,000. Upon completion, annualized rent will be increased by approximately $183,000 from approximately $1,415,000 to approximately $1,598,000. Additionally, the lease will be extended for 10 years from the date of completion.