Item 2.01 Completion of Acquisition or Disposition of Assets
On January 10, 2020, a subsidiary of Broad Street Realty, Inc. (the "Company")
completed the acquisition of the land underlying the Cromwell Field Shopping
Center from unrelated third party sellers for a purchase price of $2.21 million.
The Cromwell Field Shopping Center is located in Glen Burnie, Maryland and has
gross leasable area of 233,486 square feet. The land is ground leased to BSV
Cromwell Parent LLC ("BSV Cromwell"), a limited liability company that is
managed by a subsidiary of the Company. As a result of the land acquisition, BSV
Cromwell Land, LLC, a subsidiary of the Company, assumed the ground lease from
the previous owner and now serves as the lessor to BSV Cromwell under such
ground lease, which provides for annual lease payments by BSV Cromwell of
approximately $145,000 and expires in 2040, and also includes three ten-year
renewal options. In addition, Broad Street Realty, LLC ("BSR"), another
subsidiary of the Company, serves as the property manager for the Cromwell Field
Shopping Center and receives a property management fee from BSV Cromwell equal
to 3% of the property's gross income. Michael Z. Jacoby, the Company's chairman
and chief executive officer, Thomas M. Yockey, a director of the Company, and
Alexander Topchy, the Company's chief financial officer, own approximately 18%,
18% and 2%, respectively, of BSV Cromwell.
As previously disclosed, the Company and BSV Cromwell entered into an agreement
and plan of merger on May 28, 2019, pursuant to which BSV Cromwell will merge
with and into a subsidiary of the Company with BSV Cromwell surviving (the
"Cromwell Merger"). The Cromwell Merger is one of the 19 separate mergers
(collectively, the "Mergers") described in the Company's Current Report on Form
8-K filed on May 31, 2019. To date, 12 of the Mergers have closed, as described
in the Company's Current Reports on Form 8-K filed on December 27, 2019 and
January 6, 2020.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the U.S. federal securities laws. These statements are based on
current expectations of the Company's management with respect to the
transactions and other matters described in this Current Report on Form 8-K.
While the Company's management believes the assumptions underlying its
forward-looking statements and information are reasonable, such information is
necessarily subject to uncertainties and may involve certain risks, many of
which are difficult to predict and are beyond the control of the Company's
management. These risks include, but are not limited to: the occurrence of any
event, change or other circumstances that could give rise to the termination of
any of the remaining merger agreements; the outcome of any legal proceedings
that may be instituted against the Company, the Broad Street entities or others
in connection with the Mergers; the inability to complete the remaining Mergers
due to the failure to satisfy other conditions to completion of the remaining
Mergers, including the financing condition and obtaining consent from the
requisite lenders, or otherwise; the ability to recognize the benefits of the
Mergers; the amount of the costs, fees, expenses and charges related to the
Mergers; the Company's substantial leverage as a result of indebtedness incurred
and preferred equity issued in connection with the Mergers, which could
adversely affect the Company's ability to pay cash dividends and meet other cash
needs; the Company's ability to repay, refinance, restructure and/or extend its
indebtedness as it comes due; the availability of financing and capital to the
Company; the Company's ability to identify, finance, consummate and integrate
additional acquisitions or investments; adverse economic or real estate
developments, either nationally or in the markets in which the Company's
properties are located; adverse changes in financial markets or interest rates;
the nature and extent of competition for tenants and acquisitions; other factors
affecting the retail industry or the real estate industry generally; and other
risks that are set forth under "Risk Factors" in the Company's Annual Report on
Form 10-K for the year ended December 31, 2018, and other documents filed by the
Company with the SEC from time to time. The Company can provide no assurances as
to the timing of the closing of the remaining Mergers (including the Cromwell
Merger) or whether such Mergers will close at all. All forward-looking
statements speak only as of the date of this Current Report on Form 8-K. All
subsequent written and oral forward-looking statements attributable to us or any
person acting on our behalf are qualified by the cautionary statements in this
section. Except as otherwise may be required by law, the Company undertakes no
obligation to update or publicly release any revisions to forward-looking
statements to reflect events, circumstances or changes in expectations after the
date of this Current Report on Form 8-K.
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