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Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

10. SUBSEQUENT EVENTS

 

Wendy’s – Peach Orchard, Augusta, GA Property

 

On July 4, 2018, a fire occurred at the Property located at 3013 Peach Orchard Road in Augusta, Georgia, which is leased to a Wendy’s franchisee, Wendgusta, LLC (the “Tenant”), resulting in a total destruction, as defined in the lease with the Tenant. The Tenant anticipates that the restaurant will be closed until approximately the end of December 2018 while the building is reconstructed. The Tenant maintains insurance on the Property. Under the lease for this Property, the Tenant is responsible for the cost of repairing or rebuilding the structure on the Property.

 

On July 26, 2018, the Partnership and the Tenant entered into a lease amendment (the “Amendment”). Pursuant to the Amendment, among other things, (1) the base rent and percentage rent will continue to be due and payable from the date of the casualty through the reconstruction period, (2) the Tenant is obligated to pay the total costs of rebuilding the store as a prototype Wendy’s, provided that such plans, costs and timeline for completion are approved in advance by the Partnership, and (3) the final settlement of the insurance claim requires the consent of the Partnership. If the Tenant defaults in its obligations to rebuild under the Amendment, the Partnership may take over the reconstruction work at the Tenant’s expense.

 

Proposed sale of Properties and liquidation

 

On July 24, 2018, the Partnership mailed to interested parties a confidentiality agreement and a letter that included procedures, terms and conditions for a sealed bid sale for the potential sale of the Properties. The sealed bids are due to be returned to the Partnership by September 28, 2018. The proposed sale of the Properties and subsequent liquidation of the Partnership is expected to be completed by December 31, 2018.

 

We have reviewed all material events through the date of this report in accordance with ASC 855-10.