SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2019

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 15 – SUBSEQUENT EVENTS

Joint venture – property acquisition

Through a wholly-owned subsidiary, we own a 10% interest in a joint venture with TF Cornerstone (the “250 North 10th Street JV”) formed to acquire and operate the property located at 250 North 10th Street (the “Property”), a 234-unit apartment building in Williamsburg, Brooklyn, New York. On January 15, 2020, the joint venture closed on the acquisition of the property through a wholly-owned special purpose entity for a purchase price of $137.75 million, of which $82.75 million was financed through a 15-year mortgage loan (the “250 North 10th Loan”) secured by the Property and the balance was paid in cash. Our share of the equity totaling approximately $5.9 million (of which $0.7 million was outstanding at December 31, 2019) (“Partner Loan”) was funded through a loan from our joint venture partner. This Partner Loan bears interest at 7% and is prepayable any time within its 4 year term. Our partner has the option of having the Partner Loan repaid in our common stock if the price of our common stock exceeds $6.50 per share at the time of conversion. The non-recourse 250 North 10th Loan bears interest at 3.39% for the duration of the loan term and has covenants, defaults, and a non-recourse carve out guaranty executed by the Company.  We earned an acquisition fee at closing and are entitled to ongoing asset management fees and a promote upon the achievement of certain performance hurdles.

Loan refinancing

On February 20, 2020, we repaid in full the $15.4 million mezzanine loan in respect of 237 11th.   

On February 28, 2020, in connection with a refinancing, the Berkley Joint Venture repaid the Berkley Loan in full.  The new 7-year, $33.0 million loan bears interest at a fixed rate of 2.717% and is interest only during the initial five years. It is pre-payable at any time and can be upsized by up to $6.0 million under certain circumstances.

In March 2020, the maturity date for the secured line of credit, which is secured by the Paramus, New Jersey property, was extended to March 21, 2021.