1985 CEDAR BRIDGE AVENUE, SUITE 1
LAKEWOOD, NEW JERSEY 08701
(732) 367-0129
ITS OUTSTANDING COMMON STOCK
AT A PURCHASE PRICE OF $5.00 PER SHARE
AT 11:59 P.M. EASTERN TIME, JULY 24, 2020,
UNLESS EXTENDED OR WITHDRAWN
• | The MacKenzie Offer price is significantly less than the most recently published Estimated Per-Share NAV of the Shares. The Company’s board of directors approved an Estimated Per-Share NAV of $11.82 as of September 30, 2019. The MacKenzie Offer price is $4.50 per Share, or 62%, less than the Estimated Per-Share NAV, and the Purchase Price in this Offer is 58% less than the Estimated Per-Share NAV. |
• | Given the MacKenzie Offer price, the Company’s board of directors believes that the MacKenzie Offer represents an opportunistic attempt by MacKenzie to make profit by purchasing the Shares at a deeply discounted price relative to their most recently published estimated value, thereby potentially depriving the stockholders who tender Shares in the MacKenzie Offer of the full value of their Shares as well as the opportunity to realize the full potential long-term value of their investment. |
• | The Offer provides stockholders who desire immediate liquidity an alternative to the MacKenzie Offer at an 11% premium to the MacKenzie Offer price. |
• | The MacKenzie Offer price is significantly less than the most recently published Estimated Per-Share NAV of the Shares. The Company’s board of directors approved an Estimated Per-Share NAV of $11.82 as of September 30, 2019. The MacKenzie Offer price is $4.50 per Share, or 62%, less than the Estimated Per-Share NAV, and the Purchase Price in the Offer is 58% less than the Estimated Per-Share NAV. |
• | Given the MacKenzie Offer price, the Company’s board of directors believes that the MacKenzie Offer represents an opportunistic attempt by MacKenzie to make profit by purchasing the Shares at a deeply discounted price relative to their most recently published estimated value, thereby potentially depriving the stockholders who tender Shares in the MacKenzie Offer of the full value of their Shares as well as the opportunity to realize the full potential long-term value of their investment. |
• | The Offer provides stockholders who desire immediate liquidity an alternative to the MacKenzie Offer at an 11% premium to the MacKenzie Offer price. |
• | Unlike the MacKenzie Offer, the Offer price will not be reduced by any distributions paid on the Shares that you tender. |
• | Depending on how many Shares are purchased, the Offer will decrease the amount of cash we have available for other purposes, such as paying distributions, funding acquisitions, or improvement costs, and paying operating and administrative expenses or continuing debt service obligations. |
• | Purchases of Shares pursuant to the Offer will increase the proportionate interest of stockholders that do not tender their Shares. |
• | Stockholders who tender all of their Shares will give up the opportunity to participate in any potential future benefits from owning Shares, including the right to receive any future distributions that we may pay and any future increases in the value of the Shares. |
• | First, we will purchase all the Shares properly tendered and not properly withdrawn by any “Odd Lot Holder” (a stockholder of less than 100 Shares) who tenders all of that holder’s Shares; and |
• | Second, after the purchase of all the Shares properly tendered by Odd Lot Holders, we will purchase all other Shares properly tendered on a pro rata basis with appropriate adjustments to avoid the purchase of fractional Shares. |
• | no threatened or pending action, suit or proceeding by any third-party, including any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic, foreign or supranational, before any court, authority, agency or other tribunal shall have been instituted or shall be pending, nor shall we have received notice of any such action, that directly or indirectly: |
• | challenges or seeks to challenge, makes illegal, or delays or otherwise directly or indirectly restrains, prohibits or otherwise affects our making of the Offer, the acquisition by us of some or all of the Shares pursuant to the Offer or any other matter relating to the Offer, or seeks to obtain any material damages or otherwise relates to the transactions contemplated by the Offer; |
• | in our reasonable judgment, could be expected to materially and adversely affect our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of operations or prospects, taken as a whole, or otherwise materially impair in any way our ability to purchase some or all of the Shares pursuant to the Offer; |
• | makes our purchase of, or payment for, some or all of the Shares pursuant to the Offer illegal, or otherwise restricts or prohibits consummation of the Offer; or |
• | materially impairs the contemplated benefits to us of the Offer; |
• | no change in the general political, market, economic or financial conditions, domestically or internationally, that could reasonably be expected to materially and adversely affect our business or prospects or the benefits to us of the Offer, including, but not limited to, the following: |
• | any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market; |
• | the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory; |
• | the commencement or escalation of war, armed hostilities or other international or national calamity, including, but not limited to, an act of terrorism directly or indirectly involving the United States; |
• | any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, could materially affect the extension of credit by banks or other lending institutions in the United States; |
• | a change in the tax law or regulations, the effect of which, in our reasonable judgment, would be to materially change the tax consequences of the Offer in any manner that would reasonably be expected to materially and adversely affect us; or |
• | in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; |
• | no tender or exchange offer for any or all Shares (other than the Offer and the MacKenzie Offer), or any merger, acquisition, business combination or other similar transaction with or involving us or our subsidiaries, has been proposed, announced or commenced by any person or has been publicly disclosed and we have not entered into a definitive agreement or an agreement in principle with any person with respect to a merger, business combination or other similar transaction, other than in the ordinary course of business; |
• | we learn that: |
• | any entity, group or person who has filed a Schedule 13D or Schedule 13G with the SEC has acquired or proposes to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than by virtue of the Offer), beneficial ownership of an additional 2% or more of our outstanding Shares; or |
• | any new group has been formed that beneficially owns more than 5% of our outstanding Shares (options for and other rights to acquire Shares that are acquired or proposed to be acquired being deemed to be immediately exercisable or convertible for purposes of this clause); |
• | no person, entity or group has filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting an intent to acquire us or any Shares, or has made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of our respective assets or securities; |
• | no action has been taken and no statute, rule, regulation, judgment, decree, injunction or order (preliminary, permanent or otherwise) has been proposed, sought, enacted, entered, promulgated, enforced or deemed to be applicable to the Offer or us by any court, government or governmental agency or other regulatory or administrative authority, domestic or foreign, which, in our reasonable judgment: |
• | indicates that any approval or other action of any such court, agency or authority may be required in connection with the Offer or the purchase of Shares thereunder; |
• | could reasonably be expected to prohibit, restrict or delay consummation of the Offer; or |
• | otherwise could reasonably be expected to materially adversely affect our business or prospects, or the benefits to us of the Offer; |
• | no change or changes have occurred in our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of operations or future business prospects that, in our reasonable judgment, has or have a material adverse effect on our business or prospects, or the benefits to us of the Offer; |
• | no approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the Offer shall not have been obtained on terms satisfactory to us in our reasonable discretion; |
• | we shall have determined that the consummation of the Offer and the purchase of the Shares may cause the Shares to be held of record by less than 300 persons; or |
• | the MacKenzie Offer has been terminated or withdrawn before the purchase of any Shares in the Offer. |
• | terminate the Offer and return all tendered Shares to the tendering stockholders; |
• | extend the Offer and, subject to withdrawal rights as set forth in “The Offer - Section 4,” retain all of the tendered Shares until the expiration of the Offer as so extended; |
• | waive the condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the Shares validly tendered and not withdrawn before the Expiration Date; or |
• | delay acceptance for payment or payment for Shares, subject to applicable law, until satisfaction or waiver of the conditions to the Offer. |
• | general economic and market conditions; |
• | uncertainties regarding the impact of the current COVID-19 pandemic restrictions intended to prevent its spread on our business and the economy generally; |
• | competition, tenant or joint venture partner(s) bankruptcies; |
• | changes in governmental, tax, real estate and zoning laws and regulations; |
• | failure to increase tenant occupancy and operating income, rejection of leases by tenants in bankruptcy; |
• | financing and development risks, construction and lease-up delays, cost overruns, the level and volatility of interest rates, the rate of revenue increases versus expense increases; |
• | the financial stability of various tenants and industries; |
• | the failure to upgrade our tenant mix, restrictions in current financing arrangements; |
• | the failure to fully recover tenant obligations for common area maintenance (“CAM”), insurance, taxes and other property expenses; |
• | the failure of the Company to continue to qualify as a real estate investment trust (“REIT”); |
• | the failure to refinance debt at favorable terms and conditions; |
• | an increase in impairment charges; |
• | loss of key personnel; |
• | failure to achieve earnings/funds from operations targets or estimates; |
• | conflicts of interest with the Company’s Advisor, Sponsor and their affiliates, and |
• | failure of joint venture relationships, significant costs related to environmental issues. |
Price; Number of Shares; Expiration Date; Proration |
• | The MacKenzie Offer price is significantly less than the most recently published Estimated Per-Share NAV of the Shares approved by the Company’s board of directors of $11.82 as of September 30, 2019. The MacKenzie Offer price is $4.50 per Share, or 62%, less than the Estimated Per-Share NAV, and the Purchase Price in the Offer is 58% less than the Estimated Per-Share NAV. |
• | Given the MacKenzie Offer price, the Company’s board of directors believes that the MacKenzie Offer represents an opportunistic attempt by MacKenzie to make profit by purchasing the Shares at a deeply discounted price relative to their most recently published estimated value, thereby potentially depriving the stockholders who tender Shares in the MacKenzie Offer of the full value of their Shares as well as the opportunity to realize the full potential long-term value of their investment. |
• | The Offer provides stockholders who desire immediate liquidity an alternative to the MacKenzie Offer at an 11% premium to the MacKenzie Offer price. |
• | Unlike the MacKenzie Offer, the Offer price will not be reduced by any distributions paid on the Shares that you tender. |
Procedures for Tendering Shares |
• | the Letter of Transmittal is signed by the registered holder of the Shares tendered; or |
• | Shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, the New York Stock Exchange, Inc. Medallion Signature Program, the Stock Exchange Medallion Program, or an “eligible guarantor institution,” as the term is defined in Rule 17-Ad-15 promulgated under the Exchange Act (each of the foregoing constituting an “Eligible Institution”). |
Amount of Tenders |
Withdrawal Rights |
Purchase and Payment for Tendered Shares |
Conditions of the Offer |
• | any threatened or pending action, suit or proceeding by any third-party, including any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic, foreign or supranational, before any court, authority, agency or other tribunal shall have been instituted or shall be pending, or we have received notice of any such action, that directly or indirectly: |
• | challenges or seeks to challenge, makes illegal, or delays or otherwise directly or indirectly restrains, prohibits or otherwise affects our making of the Offer, the acquisition by us of some or all of the Shares pursuant to the Offer or any other matter relating to the Offer, or seeks to obtain any material damages or otherwise relates to the transactions contemplated by the Offer; |
• | in our reasonable judgment, could be expected to materially and adversely affect our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of operations or prospects, taken as a whole, or otherwise materially impair in any way our ability to purchase some or all of the Shares pursuant to the Offer; |
• | makes our purchase of, or payment for, some or all of the Shares pursuant to the Offer illegal, or otherwise restricts or prohibits consummation of the Offer; or |
• | materially impairs the contemplated benefits to us of the Offer; |
• | any change in the general political, market, economic or financial conditions, domestically or internationally, that could reasonably be expected to materially and adversely affect our business or prospects or the benefits to us of the Offer, including, but not limited to, the following: |
• | any general suspension of trading in, or limitation on prices for, securities on any U.S. national securities exchange or in the over-the-counter market; |
• | the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory; |
• | the commencement or escalation of war, armed hostilities or other international or national calamity, including, but not limited to, an act of terrorism directly or indirectly involving the United States; |
• | any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that, in our reasonable judgment, could materially affect the extension of credit by banks or other lending institutions in the United States; |
• | a change in the tax law or regulations, the effect of which, in our reasonable judgment, would be to materially change the tax consequences of the Offer in any manner that would reasonably be expected to materially and adversely affect us; or |
• | in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; |
• | a tender or exchange offer for any or all Shares (other than the Offer and the MacKenzie Offer), or any merger, acquisition, business combination or other similar transaction with or involving us or our subsidiaries, has been proposed, announced or commenced by any person or has been publicly disclosed and we have not entered into a definitive agreement or an agreement in principle with any person with respect to a merger, business combination or other similar transaction, other than in the ordinary course of business; |
• | we learn that: |
• | any entity, group or person who has filed a Schedule 13D or Schedule 13G with the SEC has acquired or proposes to acquire, whether through the acquisition of stock, the formation of a group, the grant of any option or right, or otherwise (other than by virtue of the Offer), beneficial ownership of an additional 2% or more of our outstanding Shares; or |
• | any new group has been formed that beneficially owns more than 5% of our outstanding Shares (options for and other rights to acquire Shares that are acquired or proposed to be acquired being deemed to be immediately exercisable or convertible for purposes of this clause); |
• | any person, entity or group has filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting an intent to acquire us or any Shares, or has made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of our respective assets or securities; |
• | any action has been taken or any statute, rule, regulation, judgment, decree, injunction or order (preliminary, permanent or otherwise) has been proposed, sought, enacted, entered, promulgated, enforced or deemed to be applicable to the Offer or us by any court, government or governmental agency or other regulatory or administrative authority, domestic or foreign, which, in our reasonable judgment: |
• | indicates that any approval or other action of any such court, agency or authority may be required in connection with the Offer or the purchase of Shares thereunder; |
• | could reasonably be expected to prohibit, restrict or delay consummation of the Offer; or |
• | otherwise could reasonably be expected to materially adversely affect our business or prospects, or the benefits to us of the Offer; |
• | any change or changes have occurred in our business, properties, assets, liabilities, capitalization, stockholders’ equity, condition (financial or otherwise), income, operations, results of operations or future business prospects that, in our reasonable judgment, has or have a material adverse effect on our business or prospects, or the benefits to us of the Offer; |
• | any approval, permit, authorization, favorable review or consent of any governmental entity required to be obtained in connection with the Offer shall not have been obtained on terms satisfactory to us in our reasonable discretion; or |
• | we shall have determined that the consummation of the Offer and the purchase of the Shares may cause the Shares to be held of record by less than 300 persons; or |
• | the MacKenzie Offer has been terminated or withdrawn before the purchase of any Shares in the Offer. |
• | terminate the Offer and return all tendered Shares to the tendering stockholders; |
• | extend the Offer and, subject to withdrawal rights as set forth in Section 4, retain all of the Shares until the expiration of the Offer as so extended; |
• | waive the condition and, subject to any requirement to extend the period of time during which the Offer is open, purchase all of the Shares validly tendered and not withdrawn before the Expiration Date; or |
• | delay acceptance for payment or payment for Shares, subject to applicable law, until satisfaction or waiver of the conditions to the Offer. |
Extension of the Offer; Termination; Amendment |
• | we adjust the Purchase Price for Shares purchased in the Offer or increase or decrease the number of Shares sought in the Offer (and thereby increase or decrease the number of Shares that may be purchased in the Offer), and, in the event of an increase in the number of Shares accepted for payment in the Offer increases by more than 1% of the outstanding Shares, and |
• | the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such an increase or decrease is first published, sent or given to the stockholders in the manner specified in this Section 7. |
Certain Effects of the Offer |
• | Depending on how many Shares are purchased, the Offer will decrease the amount of cash we have available for other purposes, such as paying distributions, funding acquisitions, improvement costs or repurchases under the SRP, and paying operating and administrative expenses or continuing debt service obligations. |
• | Purchases of Shares pursuant to the Offer will increase the proportionate interest of stockholders that do not tender their Shares. |
• | Stockholders who tender all of their Shares will give up the opportunity to participate in any potential future benefits from owning Shares, including the right to receive any future distributions that we may pay and any future increases in the value of the Shares. |
Treatment of Fractional Shares |
Use of Securities Acquired |
Plans and Proposals |
• | an extraordinary transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries; |
• | a purchase, sale or transfer of a material amount of our assets or any of our subsidiaries, other than the acquisition and disposition of properties in the ordinary course of business; |
• | any material change in our present distribution rate or policy, or in the indebtedness or capitalization of the Company; |
• | any change in our present board of directors or management; |
• | any other material change in our corporate structure or business; |
• | any class of our common stock becoming eligible for termination of registration under Section 12(g)(4) of the Exchange Act; |
• | the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; or |
• | any changes in our charter, bylaws or other governing instruments or other actions that could impede the acquisition of control of the Company. |
Source and Amount of Funds |
Certain Information about the Company |
For the three-month period ended | | | Total distribution paid | | | Distribution per Share | | | Date paid |
March 31, 2020 | | | $3,910,806.34 | | | $0.175 | | | April 15, 2020 |
December 31, 2019 | | | $3,959,925.05 | | | $0.175 | | | January 15, 2020 |
September 30, 2019 | | | $3,992,227.00 | | | $0.175 | | | October 15, 2019 |
June 30, 2019 | | | $4,026,561.54 | | | $0.175 | | | July 15, 2019 |
March 31, 2019 | | | $4,043,490.09 | | | $0.175 | | | April 15, 2019 |
December 31, 2018 | | | $4,130,964.29 | | | $0.175 | | | January 15, 2019 |
September 30, 2018 | | | $4,236,577.97 | | | $0.17643765 | | | October 15, 2018 |
June 30, 2018 | | | $4,295,119.75 | | | $0.17451984 | | | July 16, 2018 |
March 31, 2018 | | | $4,266,984.49 | | | $0.17260199 | | | April 16, 2018 |
Beneficial Owner(1) | | | Number of Shares Beneficially Owned | | | Percent of Class |
David Lichtenstein | | | 20,000 | | | 0.09% |
George R. Whittemore | | | — | | | — |
Yehuda “Judah” L. Angster | | | — | | | — |
Alan Retkinsky | | | — | | | — |
Mitchell Hochberg | | | — | | | — |
Joseph Teichman | | | — | | | — |
Seth Molod | | | — | | | — |
Our directors and executive officers as a group (7 persons) | | | 20,000 | | | 0.09% |
(1) | The business address of each individual or entity listed in the table is 1985 Cedar Bridge Avenue, Suite 1, Lakewood, NJ 08701. Unless otherwise indicated, the individual or entity listed has sole voting and investment power over the Shares listed. |
• | Our Annual Report on Form 10-K, filed on March 30, 2020; |
• | Our Quarterly Report on Form 10-Q, filed on May 15, 2020. |
Additional Information |
Certain Legal Matters; Regulatory Approvals |
Material U.S. Federal Income Tax Consequences |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any of its states or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if either a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or it has a valid election in place to be treated as a U.S. person. |
Recommendation |
• | The MacKenzie Offer price is significantly less than the most recently published Estimated Per-Share NAV approved by the Company’s board of directors of $11.82 as of September 30, 2019. The MacKenzie Offer price is $4.50 per Share, or 62%, less than the Estimated Per-Share NAV, and the Purchase Price in the Offer is 58% less than the Estimated Per-Share NAV. |
• | Given the MacKenzie Offer price, the Company’s board of directors believes that the MacKenzie Offer represents an opportunistic attempt by MacKenzie to make profit by purchasing the Shares at a deeply discounted price relative to their most recently published estimated value, thereby potentially depriving the stockholders who tender Shares in the MacKenzie Offer of the full value of their Shares as well as the opportunity to realize the full potential long-term value of their investment. |
• | The Offer provides stockholders who desire immediate liquidity an alternative to the MacKenzie Offer at an 11% premium to the MacKenzie Offer price. |
• | Unlike the MacKenzie Offer, the Offer price will not be reduced by any distributions paid on the Shares that you tender. |
Miscellaneous |
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