UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 14, 2010
CB RICHARD ELLIS REALTY TRUST
(Exact name of registrant as specified in its charter)
| | | | |
| Maryland | | 000-53200 | | 56-2466617 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
47 Hulfish Street, Suite 210, Princeton, NJ 08542
(Address of principal executive offices)
(609) 683-4900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 | Entry Into a Material Definitive Agreement. |
Duke Joint Venture Office Portfolio
The information disclosed under Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Third Amended and Restated Advisory Agreement
On December 21, 2010, the Company entered into that certain third amended and restated advisory agreement (the “Amended Advisory Agreement”) with CBRE Operating Partnership, L.P., the Company’s operating partnership (“CBRE OP”) and CBRE Advisors LLC, the Company’s investment advisor (the “Investment Advisor”). The Amended Advisory Agreement contains the same terms and conditions as the Second Amended and Restated Advisory Agreement dated January 30, 2009, except that the term of the agreement has been extended to April 30, 2011, subject to an unlimited number of successive one-year renewals upon the mutual consent of the parties.
The foregoing description of the Amended Advisory Agreement is qualified in its entirety by reference to the text of the agreement which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
Duke Joint Venture Office Portfolio
On December 17, 2010, Duke/Hulfish, LLC, a joint venture (the “Duke Joint Venture”) between CBRE OP and Duke Realty Limited Partnership (“Duke”), the operating partnership of Duke Realty Corporation (NYSE: DRE), entered into a purchase and sale agreement (the “Purchase Agreement”) with Duke, Duke Secured Financing 2009-1PAC, LLC and Duke Realty Ohio, affiliates of Duke, for the acquisition of up to $516,650,000 in office real property assets (the “Office Portfolio”). The Office Portfolio consists of 20 office properties (each a “Property” and together the “Properties”) that are expected to be contributed to the Duke Joint Venture in three separate tranches. CBRE OP owns an 80% interest and Duke owns a 20% interest in the Duke Joint Venture. On December 21, 2010, the Duke Joint Venture acquired fee interests in the first tranche of Properties as described further below.
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Property and
Market | | Address | | Year
Built | | | Major
Tenant1 | | Net Rentable
Square Feet | | | Major
Tenant
Lease
Expiration1 | | | Approximate
Purchase
Price2 | | | Pro Rata
Share of
Approximate
Purchase
Price3 | | | Percentage
Leased | | | Acquisition
Fee4 | |
McAuley Place /
Cincinnati, Ohio | | 4600 McAuley Place, Blue Ash, Ohio | | | 2001 | | | Mercy Health Partners
of South West Ohio5 | | | 190,733 | | | | 08/2023 | | | $ | 35,000,000 | | | $ | 28,000,000 | | | | 99 | % | | | 420,000 | |
Easton III/
Columbus, Ohio | | 3344 Morse Crossing, Columbus, Ohio | | | 2005 | | | Lane Bryant6 | | | 135,485 | | | | 01/2019 | | | $ | 18,000,000 | | | $ | 14,400,000 | | | | 100 | % | | | 216,000 | |
Point West I /
Dallas, Texas | | 1525 S. Beltline Road, Coppell, Texas | | | 2008 | | | American Home
Mortgage Services, Inc.7 | | | 182,700 | | | | 11/2016 | | | $ | 29,500,000 | | | $ | 23,600,000 | | | | 100 | % | | | 354,000 | |
Sam Houston Crossing I/
Houston, Texas | | 10343 Sam Houston Park Drive, Houston, Texas | | | 2007 | | | AMEC Paragon, Inc.8 | | | 159,175 | | | | 05/2018 | | | $ | 25,500,000 | | | $ | 20,400,000 | | | | 100 | % | | | 306,000 | |
Regency Creek I/ Raleigh,
North Carolina | | 12040 Regency Parkway, Cary, North Carolina | | | 2008 | | | ABB, Inc.9 | | | 122,087 | | | | 08/2017 | | | $ | 22,500,000 | | | $ | 18,000,000 | | | | 100 | % | | | 270,000 | |
533 Maryville Centre/ St. Louis, Missouri | | 533 Maryville University Drive, St. Louis, Missouri | | | 2000 | | | Eveready Battery
Company, Inc.10 | | | 125,296 | | | | 04/2021 | | | $ | 23,877,520 | | | $ | 19,102,016 | | | | 100 | % | | | 286,530 | |
555 Maryville Centre / St. Louis, Missouri | | 555 Maryville University Drive, St. Louis, Missouri | | | 1999 | | | — | | | 127,082 | | | | 04/2021 | | | $ | 19,472,480 | | | $ | 15,577,984 | | | | 68 | % | | | 233,670 | |
| (1) | Major tenants represent tenants that currently occupy more than 50,000 net rentable square feet. Properties which do not list a tenant are multi-tenant properties that do not currently have a single tenant that occupies more than 50,000 net rentable square feet. |
| (2) | Approximate total purchase price, exclusive of customary closing costs, paid by the Duke Joint Venture for each Property. |
| (3) | Pro rata share of approximate purchase price is at the Company’s pro rata share of effective ownership for each of these Properties, which was funded using net proceeds of the Company’s current public offering. |
| (4) | Acquisition fees payable to the Investment Advisor are not included in the total acquisition cost for the Properties. |
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| (5) | Mercy Health Partners of South West Ohio is a healthcare system comprised of five hospitals and 38 physician practices serving the greater Cincinnati, Ohio area. |
| (6) | Lane Bryant, a division of Charming Shoppes, Inc. (NASDAQ:CHRS), is a chain of women’s retail clothing stores with over 850 stores in 48 states. |
| (7) | American Home Mortgage Services, Inc. is one of the country’s largest servicers of Alt-A and subprime loans on behalf of banks and other investors. |
| (8) | AMEC Paragon, Inc. is a provider of project management and engineering services to the oil and gas industry. |
| (9) | ABB, Inc. is a leader in power and automation technologies for utility and industrial customers. |
| (10) | Eveready Battery Company, Inc. is a division of Energizer Holdings, Inc. (NYSE:ENR), which manufactures batteries and lighting products. |
The following table summarizes the remaining Properties in the Office Portfolio expected to be acquired by the Duke Joint Venture. Closing of each Property is subject to certain contingencies and there is no assurance that any of the Properties listed below will be acquired by the Duke Joint Venture.
List of Remaining Expected Properties
| | | | | | | | | | | | |
Property and Market | | Year
Built | | | Major Tenant(s)1 | | Net Rentable
Square Feet | | Estimated
Closing
Date | |
Norman Pointe I/
Minneapolis, MN | | | 2000 | | | NCS Pearson, Inc. | | 212,722 | | | 3/31/11 | |
Norman Pointe II/
Minneapolis, MN | | | | | | | | | | | | |
| | | 2007 | | | General Services Administration;
Hartford Fire Insurance Company | | 324,296 | | | 3/31/11 | |
The Landings I/
Cincinnati, Ohio | | | 2006 | | | Citicorp North America, Inc. | | 175,695 | | | 3/31/11 | |
The Landings II/
Cincinnati, Ohio | | | 2007 | | | — | | 175,076 | | | 3/31/11 | |
One Eastern Oval /
Columbus, Ohio | | | 1997 | | | — | | 125,031 | | | 3/31/11 | |
Two Eastern Oval /
Columbus, Ohio | | | 1995 | | | — | | 128,674 | | | 3/31/11 | |
Weston Pointe I /
Ft. Lauderdale, Florida | | | 1999 | | | — | | 97,579 | | | 6/30/11 | |
Weston Pointe II /
Ft. Lauderdale, Florida | | | 2000 | | | — | | 97,180 | | | 6/30/11 | |
Weston Pointe III /
Ft. Lauderdale, Florida | | | 2003 | | | American Intercontinental University | | 97,178 | | | 6/30/11 | |
Weston Pointe IV /
Ft. Lauderdale, Florida | | | 2006 | | | General Services Administration | | 96,175 | | | 6/30/11 | |
One Conway Park /
Chicago, Illinois | | | 1989 | | | — | | 105,000 | | | 6/30/11 | |
West Lake at Conway /
Chicago, Illinois | | | 2008 | | | — | | 99,538 | | | 6/30/11 | |
5525 Parkcenter Circle /
Columbus, Ohio | | | 1996 | | | Nationwide Mutual Insurance Co. | | 315,102 | | | 6/30/11 | |
| (1) | Major tenants represent tenants that currently occupy more than 50,000 net rentable square feet. Properties which do not list a tenant are multi-tenant properties that do not currently have a single tenant that occupies more than 50,000 net rentable square feet. |
Upon the entry into the Purchase Agreement, CBRE OP and Duke entered into an amended and restated limited liability company agreement (the “Amended and Restated LLC Agreement”) for the Duke Joint Venture. The Amended and Restated LLC Agreement generally contains the same terms and conditions as the Limited Liability Company Agreement between CBRE OP and Duke dated June 12, 2008, except for the following material changes: (i) Duke has granted the Company a call option to acquire Duke’s entire interest in the Duke Joint Venture which such interest shall be valued based on the opinions of qualified appraisers and which the Company can elect to exercise anytime after June 30, 2012 upon the occurrence and adoption by resolution of certain triggering events and (ii) the Duke Joint Venture has certain rights to participate in the development of certain adjacent and nearby parcels of land currently owned by Duke.
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The foregoing descriptions of the Purchase Agreement and the Amended and Restated LLC Agreement are qualified in their entirety by reference to the text of the agreements both of which are attached hereto as Exhibits 10.2 and 10.3 and are incorporated herein by reference.
Acquisition of Rickenbacker III (National Industrial Portfolio)
The Company, through a subsidiary of CBRE OP, has acquired the seventh and remaining property in the portfolio of seven warehouse distribution centers (collectively, the “National Industrial Portfolio”), previously disclosed on its Current Report on Form 8-K filed November 2, 2010, using the net proceeds from its current public offering, as detailed below.
| | | | | | | | | | | | | | | | | | | | | | |
Property and Market | | Year
Built | | | Tenant | | Net Rentable
Square Feet | | | Percentage
Leased | | | Lease
Expiration | | | Approximate
Total
Acquisition Cost | |
Rickenbacker III /
Columbus, Ohio | | | 2001 | | | Genco I, Inc.1 | | | 679,155 | | | | 60.7 | % | | | 12/2013 | | | $ | 13,750,000 | |
| (1) | Genco I, Inc. is a subsidiary of GENCO Supply Chain Solutions a provider of contract logistics services and a leading wholesaler of surplus inventories. |
Upon closing, the Company paid the Investment Advisor a $206,250 acquisition fee.
First Quarter Distribution
The Company’s board of trustees has approved a quarterly distribution to shareholders of $0.15 per common share for the first quarter of 2011. The distribution will be calculated on a daily basis and paid on April 15, 2011 to shareholders of record during the period from January 1, 2011 through and including March 31, 2011.
Extension of the Company’s Current Public Offering
The Company’s board of trustees has approved an extension of its current public offering until January 30, 2012. Under the rules promulgated by the Securities and Exchange Commission, the Company could continue its current public offering in some circumstances until July 28, 2012. If the Company extends its current public offering beyond January 30, 2012, the Company will provide that information in a prospectus supplement. In many states, the Company will need to renew the registration statement or file a new registration statement to continue its current public offering for these periods. The Company may terminate its current public offering at any time.
| Item 9.01 | Financial Statements and Exhibits. |
To be filed by amendment. Pursuant to Item 9.01 of Form 8-K, the registrant hereby undertakes to file financial statements filed in response to this item on an amendment to this Current Report on Form 8-K not later than 71 calendar days after the date that this Form 8-K must be filed.
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| 10.1 | | Third Amended and Restated Advisory Agreement, by and among CB Richard Ellis Realty Trust, CBRE Operating Partnership, L.P., and CBRE Advisors LLC, dated December 21, 2010. |
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| 10.2 | | Purchase and Sale Agreement, by and among Duke Realty Limited Partnership, Duke Secured Financing 2009-1PAC, LLC, Duke Realty Ohio and Duke/Princeton, LLC, dated December 17, 2010. |
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| 10.3 | | Duke/Hulfish, LLC Amended and Restated Limited Liability Company Agreement, by and among CBRE Operating Partnership, L.P. and Duke Realty Limited Partnership, dated December 17, 2010. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | CB RICHARD ELLIS REALTY TRUST |
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| December 23, 2010 | | By: | | /S/ JACK A. CUNEO |
| | Name: | | Jack A. Cuneo |
| | Title: | | President and Chief Executive Officer |
