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):
January 22, 2013
TNP Strategic Retail Trust, Inc.
(Exact Name of Registrant as Specified in Charter)
| | | | |
| Maryland | | 000-54376 | | 90-0413866 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
1900 Main Street, Suite 700
Irvine, California 92614
(Address of Principal Executive Offices, including Zip Code)
Registrant’s telephone number, including area code: (949) 833-8252
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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 (see General Instruction A.2.):
| ¨ | 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 2.01 | Completion of Acquisition or Disposition of Assets. |
On October 10, 2012, TNP Strategic Retail Trust, Inc. (the “Company”), through TNP SRT Waianae Mall, LLC, a Delaware limited liability company, (“TNP SRT Waianae”), an indirect subsidiary of TNP Strategic Retail Operating Partnership, LP, the Company’s operating partnership (the “Operating Partnership”), entered into a Purchase and Sale Agreement, as amended (the “Purchase Agreement”) with A & B Properties, Inc., or its affiliated designee, a non-affiliate of the Company (the “Buyer”) for the sale of the Waianae Mall in Waianae, Hawaii (the “Waianae Property”), having an address of 86-120 Farrington Highway, Waianae, Hawaii 96792. Pursuant to the Purchase Agreement, effective on January 22, 2013 (the “Closing Date”), the Company, through TNP SRT Waianae, consummated the disposition of the Waianae Property for a sales price of $29,762,728. The final sales price of $29,762,728 represents a reduction of approximately $737,000 from the original sales price of $30,500,000 related to the buyer credits for tenant improvement and repair allowances and property conditions. The Company acquired the Waianae Property in June 2010 for $25,688,000.
The Purchase Agreement, and all amendments thereto, are attached as Exhibits 10.1 – 10.5 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.01.
| Item 2.04 | Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement |
A portion of the proceeds from the sale of the Waianae Property was used to cure the Events of Default specified in that certain Default Letter received by the Company from DOF IV REIT Holdings, LLC (“DOF”) on January 14, 2013, about which additional information and details were previously disclosed in Item 2.04 of the Company’s Current Report on Form 8-K filed on January 18, 2013, which information is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On January 22, 2013, the Company issued a press release announcing that the Company has consummated the disposition of the Waianae Property as discussed in Item 2.01 above. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 7.01.
The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in such filing.
| Item 9.01 | Financial Statements and Exhibits |
(b) Pro Forma Financial Information
An unaudited pro forma consolidated balance sheet for the Company as of September 30, 2012, has been prepared to give effect to the disposition of the Waianae Property as described in Item 2.01 of this Current Report on Form 8-K as if the disposition of the Waianae Property occurred on September 30, 2012 (the “Pro Forma Balance Sheet”). The Pro-Forma Balance Sheet, filed as an exhibit to this Form 8-K beginning at page F-1, should be reviewed in its entirety, and is subject to the assumptions, adjustments and qualifications described therein.
Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations or projections relating to items such as the long-term performance of the Company’s portfolio are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 and its other filings with the Securities and Exchange Commission.
(d) Exhibits
| | |
Exhibit | | Description |
| |
| 10.1 | | Purchase and Sale Agreement dated October 10, 2012, by and between TNP SRT Waianae Mall, LLC, a Delaware limited liability company, and A & B Properties, Inc., or its affiliated designee. |
| |
| 10.2 | | First Amendment to Purchase and Sale Agreement dated November 26, 2012, by and between TNP SRT Waianae Mall, LLC, a Delaware limited liability company, and A & B Properties, Inc., a Hawaiian corporation. |
| |
| 10.3 | | Second Amendment to Purchase and Sale Agreement dated November 28, 2012, by and between TNP SRT Waianae Mall, LLC, a Delaware limited liability company, and A & B Properties, Inc., a Hawaiian corporation. |
| | |
| |
| 10.4 | | Third Amendment and Reinstatement of Purchase and Sale Agreement dated November 30, 2012, by and between TNP SRT Waianae Mall, LLC, a Delaware limited liability company, and A & B Properties, Inc., a Hawaiian corporation |
| |
| 10.5 | | Fourth Amendment to Purchase and Sale Agreement dated January 18, 2012, by and between TNP SRT Waianae Mall, LLC, a Delaware limited liability company, and A & B Properties, Inc., a Hawaiian corporation. |
| |
| 99.1 | | Press Release, dated January 23, 2013. |
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.
| | | | | | |
| | | | TNP STRATEGIC RETAIL TRUST, INC. |
| | | |
| Date: January 28, 2013 | | | | By: | | /s/ Dee R. Balch |
| | | | | | Dee R. Balch |
| | | | | | Chief Financial Officer |
TNP STRATEGIC RETAIL TRUST, INC.
SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The accompanying unaudited pro forma financial information (including the notes thereto) are qualified in their entirety by reference to, and should be read in conjunction with, our Annual Report on Form 10-K for the year ended December 31, 2011 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
The accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2012 has been prepared to give effect to the January 22, 2013 sale of the Waianae Mall in Waianae, Hawaii (the Waianae Property”) and related repayment of debt by the Registrant, as if the disposition and repayment of debt had occurred on September 30, 2012.
The accompanying unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2011 and the nine months ended September 30, 2012 has been prepared to give effect to the January 22, 2013 sale of the Waianae Property as if the sale had occurred on January 1, 2011. In management’s opinion, all adjustments necessary to reflect the transactions have been made.
The accompanying unaudited pro forma financial information is prepared for informational purposes only. The accompanying unaudited pro forma condensed consolidated statements of operations are not necessarily indicative of the actual results of operations that would have occurred had the sale reflected therein in fact occurred on the date specified, nor do such pro forma financial information purport to be indicative of the results of operations that may be achieved in the future.
F-1
TNP STRATEGIC RETAIL TRUST, INC.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2012
| | | | | | | | | | | | | | | | |
| | | | Pro Forma Adjustments | | | | |
| | | Historical as
Reported
(A) | | | Waianae
Property
Disposition
(B) | | | Repayment of
Debt
(D) | | | Pro Forma Totals | |
ASSETS | | | | | | | | | | | | | |
Investment in Real Estate | | | | | | | | | | | | | | | | |
Land | | $ | 72,113,000 | | | $ | (10,586,000 | ) | | $ | — | | | $ | 61,527,000 | |
Building and Building Improvements | | | 150,628,000 | | | | (12,820,000 | ) | | | | | | | 137,808,000 | |
Tenant Improvements | | | 11,143,000 | | | | (663,000 | ) | | | | | | | 10,480,000 | |
| | | | | | | | | | | | | | | | |
| | | 233,884,000 | | | | (24,069,000 | ) | | | — | | | | 209,815,000 | |
Accumulated Depreciation | | | (8,220,000 | ) | | | 2,122,000 | | | | | | | | (6,098,000 | ) |
| | | | | | | | | | | | | | | | |
Invetsments in real estate, net | | | 225,664,000 | | | | (21,947,000 | ) | | | — | | | | 203,717,000 | |
| | | | | | | | | | | | | | | | |
Cash and Cash Equivalents | | | 2,881,000 | | | | 26,806,000 | (C) | | | (19,747,000 | ) | | | 9,940,000 | |
Restricted Cash | | | 4,545,000 | | | | (411,000 | ) | | | | | | | 4,134,000 | |
Prepaid expenses and other assets, net | | | 2,969,000 | | | | (137,000 | ) | | | | | | | 2,832,000 | |
Due from advisor, net | | | 775,000 | | | | | | | | | | | | 775,000 | |
Tenant receivables, net of allowance for doubtful accounts | | | 2,115,000 | | | | (213,000 | ) | | | | | | | 1,902,000 | |
Lease intangibles, net | | | 30,014,000 | | | | (1,846,000 | ) | | | | | | | 28,168,000 | |
Deferred Costs | | | | | | | | | | | | | | | | |
Organization and Offering | | | — | | | | — | | | | | | | | — | |
Financing Fees, net | | | 3,367,000 | | | | (108,000 | ) | | | | | | | 3,259,000 | |
| | | | | | | | | | | | | | | | |
Total deferred costs, net | | | 3,367,000 | | | | (108,000 | ) | | | — | | | | 3,259,000 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 272,330,000 | | | $ | 2,144,000 | | | $ | (19,747,000 | ) | | $ | 254,727,000 | |
| | | | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | | |
Notes Payable | | $ | 181,729,000 | | | $ | — | | | $ | (19,658,000 | ) | | $ | 162,071,000 | |
Accounts payable and accrued expenses | | | 4,711,000 | | | | (95,000 | ) | | | (89,000 | ) | | | 4,527,000 | |
Amounts due to related parties | | | 40,000 | | | | | | | | | | | | 40,000 | |
Other liabilities | | | 1,211,000 | | | | (159,000 | ) | | | | | | | 1,052,000 | |
Acquired below market lease intangible, net | | | 10,295,000 | | | | (1,301,000 | ) | | | | | | | 8,994,000 | |
| | | | | | | | | | | | | | | | |
Total liabilities | | | 197,986,000 | | | | (1,555,000 | ) | | | (19,747,000 | ) | | | 176,684,000 | |
| | | | | | | | | | | | | | | | |
Commitments and contingencies | | | | | | | | | | | | | | | | |
Equity: | | | | | | | | | | | | | | | | |
Stockholders’ equity | | | | | | | | | | | | | | | | |
Preferred stock, $0.01 par value per share; 50,00,000 shares authorized; none issued and outstanding | | | — | | | | | | | | | | | | — | |
Common stock, $0.01 par value per share; 400,000,000 shares authorized; 10,740,178 issued and outstanding at September 30, 2012 | | | 107,000 | | | | | | | | | | | | 107,000 | |
Additional paid-in capital | | | 94,259,000 | | | | | | | | | | | | 94,259,000 | |
Accumulated deficit | | | (22,902,000 | ) | | | 3,699,000 | | | | | | | | (19,203,000 | ) |
| | | | | | | | | | | | | | | | |
Total stockholders’ equity | | | 71,464,000 | | | | 3,699,000 | | | | — | | | | 75,163,000 | |
Non-controlling interests | | | 2,880,000 | | | | | | | | | | | | 2,880,000 | |
| | | | | | | | | | | | | | | | |
Total equity | | | 74,344,000 | | | | 3,699,000 | | | | — | | | | 78,043,000 | |
| | | | | | | | | | | | | | | | |
Total liabilities and equity | | $ | 272,330,000 | | | $ | 2,144,000 | | | $ | (19,747,000 | ) | | $ | 254,727,000 | |
| | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated balance sheet.
F-2
TNP STRATEGIC RETAIL TRUST, INC.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For The Year Ended December 31, 2011
| | | | | | | | | | | | |
| | | Historical
(A) | | | Pro Forma
Adjustments
Waianae Disposition
(E) | | | Pro Forma Total | |
Revenue: | | | | | | | | | | | | |
Rental and reimbursements | | $ | 10,776,000 | | | $ | (4,249,000 | ) | | $ | 6,527,000 | |
Interest income on mortgage notes | | | 598,000 | | | | — | | | | 598,000 | |
| | | | | | | | | | | | |
| | | 11,374,000 | | | | (4,249,000 | ) | | | 7,125,000 | |
Expense: | | | | | | | | | | | | |
Operating and maintenance | | | 3,671,000 | | | | (1,499,000 | ) | | | 2,172,000 | |
General and administrative | | | 2,167,000 | | | | — | | | | 2,167,000 | |
Depreciation and amortization | | | 4,384,000 | | | | (1,740,000 | ) | | | 2,644,000 | |
Transaction expenses | | | 4,147,000 | | | | — | | | | 4,147,000 | |
Interest expense | | | 5,400,000 | | | | (1,208,000 | ) | | | 4,192,000 | |
| | | | | | | | | | | | |
| | | 19,769,000 | | | | (4,447,000 | ) | | | 15,322,000 | |
| | | | | | | | | | | | |
Loss from continuing operations | | | (8,395,000 | ) | | | 198,000 | | | | (8,197,000 | ) |
Other income: | | | | | | | | | | | | |
Bargain purchase gain | | | 9,617,000 | | | | | | | | 9,617,000 | |
| | | | | | | | | | | | |
Net income before discontinued operations | | | 1,222,000 | | | | 198,000 | | | | 1,420,000 | |
| | | | | | | | | | | | |
Discontinued operations: | | | | | | | | | | | | |
Income from discontinued operations | | | 125,000 | | | | | | | | 125,000 | |
Gain on sale of real estate | | | 963,000 | | | | | | | | 963,000 | |
| | | | | | | | | | | | |
Net income from discontinued operations | | | 1,088,000 | | | | — | | | | 1,088,000 | |
| | | | | | | | | | | | |
Net income | | | 2,310,000 | | | | 198,000 | | | | 2,508,000 | |
Non-controlling interests’ share in net income | | | 188,000 | | | | 16,000 | | | | 204,000 | |
| | | | | | | | | | | | |
Net income attributable to common stockholders | | $ | 2,122,000 | | | $ | 182,000 | | | $ | 2,304,000 | |
| | | | | | | | | | | | |
Basic earnings per common share: | | | | | | | | | | | | |
Continued operations | | $ | 0.28 | | | | | | | $ | 0.33 | |
Discontinued operations | | | 0.29 | | | | | | | | 0.29 | |
| | | | | | | | | | | | |
Net income applicable to common shares | | $ | 0.57 | | | | | | | $ | 0.62 | |
| | | | | | | | | | | | |
Diluted earnings per common share: | | | | | | | | | | | | |
Continued operations | | $ | 0.28 | | | | | | | $ | 0.33 | |
Discontinued operations | | | 0.29 | | | | | | | | 0.29 | |
| | | | | | | | | | | | |
Net income applicable to common shares | | $ | 0.57 | | | | | | | $ | 0.62 | |
| | | | | | | | | | | | |
Weighted average shares outstanding used to calculate earnings per common share: | | | | | | | | | | | | |
Basic | | | 3,698,518 | | | | | | | | 3,698,518 | |
| | | | | | | | | | | | |
Diluted | | | 3,702,016 | | | | | | | | 3,702,016 | |
| | | | | | | | | | | | |
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated statement of operations.
F-3
TNP STRATEGIC RETAIL TRUST, INC.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For The Nine Months Ended September 30, 2012
| | | | | | | | | | | | |
| | | Historical
(A) | | | Pro Forma
Adjustments
Waianae Disposition
(E) | | | Pro Forma Total | |
Revenue: | | | | | | | | | | | | |
Rental and reimbursements | | $ | 18,932,000 | | | $ | (2,935,000 | ) | | $ | 15,997,000 | |
Interest income on mortgage notes | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
| | | 18,932,000 | | | | (2,935,000 | ) | | | 15,997,000 | |
Expense: | | | | | | | | | | | | |
Operating and maintenance | | | 6,600,000 | | | | (1,050,000 | ) | | | 5,550,000 | |
General and administrative | | | 2,599,000 | | | | — | | | | 2,599,000 | |
Depreciation and amortization | | | 7,787,000 | | | | (1,003,000 | ) | | | 6,784,000 | |
Transaction expenses | | | 4,180,000 | | | | — | | | | 4,180,000 | |
Interest expense | | | 9,573,000 | | | | (905,000 | ) | | | 8,668,000 | |
| | | | | | | | | | | | |
| | | 30,739,000 | | | | (2,958,000 | ) | | | 27,781,000 | |
| | | | | | | | | | | | |
Loss from continuing operations | | | (11,807,000 | ) | | | 23,000 | | | | (11,784,000 | ) |
Other income: | | | | | | | | | | | | |
Bargain purchase gain | | | — | | | | | | | | — | |
| | | | | | | | | | | | |
Net loss before discontinued operations | | | (11,807,000 | ) | | | 23,000 | | | | (11,784,000 | ) |
| | | | | | | | | | | | |
Discontinued operations: | | | | | | | | | | | | |
Income from discontinued operations | | | 54,000 | | | | | | | | 54,000 | |
Gain on sale of real estate | | | 118,000 | | | | | | | | 118,000 | |
| | | | | | | | | | | | |
Net income from discontinued operations | | | 172,000 | | | | — | | | | 172,000 | |
| | | | | | | | | | | | |
Net loss | | | (11,635,000 | ) | | | 23,000 | | | | (11,612,000 | ) |
Non-controlling interests’ share in losses | | | (517,000 | ) | | | 1,000 | | | | (516,000 | ) |
| | | | | | | | | | | | |
Net loss attributable to common stockholders | | $ | (11,118,000 | ) | | $ | 22,000 | | | $ | (11,096,000 | ) |
| | | | | | | | | | | | |
Basic earnings per common share: | | | | | | | | | | | | |
Continued operations | | $ | (1.26 | ) | | | | | | $ | (1.26 | ) |
Discontinued operations | | | 0.02 | | | | | | | | 0.02 | |
| | | | | | | | | | | | |
Net (loss) applicable to common shares | | $ | (1.24 | ) | | | | | | $ | (1.24 | ) |
| | | | | | | | | | | | |
Diluted earnings per common share: | | | | | | | | | | | | |
Continued operations | | $ | (1.26 | ) | | | | | | $ | (1.26 | ) |
Discontinued operations | | | 0.02 | | | | | | | | 0.02 | |
| | | | | | | | | | | | |
Net (loss) applicable to common shares | | $ | (1.24 | ) | | | | | | $ | (1.24 | ) |
| | | | | | | | | | | | |
Weighted average shares outstanding used to calculate earnings per common share: | | | | | | | | | | | | |
Basic | | | 8,956,275 | | | | | | | | 8,956,275 | |
| | | | | | | | | | | | |
Diluted | | | 9,398,129 | | | | | | | | 9,398,129 | |
| | | | | | | | | | | | |
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated statement of operations.
F-4
TNP STRATEGIC RETAIL TRUST, INC.
1. Notes to Unaudited Pro forma Condensed Consolidated Balance Sheet as of September 30, 2012, and Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Year Ended December 31, 2011 and the Nine Months Ended September 30, 2012
| (A) | Represents our historical financial information as reported in our Annual Report on Form 10-K for the year ended December 31, 2011 and our Quarterly Report on Form 10-Q for the nine months ended September 30, 2012, as applicable. |
| (B) | Represents material adjustments to reflect the sale of the Waianae Property completed subsequent to September 30, 2012. The sale price of the Waianae Property was $29,762,728. |
| (C) | Amount represents the net proceeds from the sale of the Waianae Property after selling costs but before repayment of debt and debt related liabilities. |
| (D) | Represents the required repayment of mortgage balance on the Waianae Property and related accrued interest as of September 30, 2012. |
| (E) | Amounts represent the adjustments to remove the historical operations of the Waianae Property represented in the statement of operations for the year ended December 31, 2011 and nine months ended September 30, 2012. |
F-5
