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SECURITIES AND EXCHANGE COMMISSION
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES
Suite 101
Richmond, Virginia 23230
(804) 237-1335
including area code, of registrant’s principal executive offices)
Chief Executive Officer, President and Chairman
Grubb & Ellis Apartment REIT Holdings, LP
4901 Dickens Road
Suite 101
(804) 237-1335
(804) 237-1345 (Facsimile)
including area code, of agent for service)
Hunton & Williams LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
(804) 788-8200
(804) 343-4833 (fax)
Large accelerated filero | Accelerated filero | Non-accelerated filerx | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
Proposed Maximum | ||||||||
Amount Being | Aggregate Offering | Amount of | ||||||
Title of Securities to be Registered | Registered | Price Per Unit | Price | Registration Fee | ||||
Units of limited partnership interest | 3,690,667 Units | $9.00 | $33,216,000 | $2,368.30 |
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The information in this prospectus is not complete and may be changed or supplemented. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
a Virginia limited partnership
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EX-23.4 |
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• | stable cash flows available for distribution to our securityholders; | ||
• | preservation, protection and return of capital; and | ||
• | growth of income and principal without taking undue risk. |
• | invest in income-producing real estate and real estate-related investments in a manner that permits the Apartment REIT to maintain its qualification as a REIT for federal income tax purposes; and | ||
• | realize capital appreciation upon the ultimate sale of our properties. |
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• | There is no public market for the shares of the Apartment REIT’s common stock or the OP Units. Shares of the Apartment REIT’s common stock and the OP Units cannot be readily sold and there are significant restrictions on the ownership, transferability and repurchase of shares of the Apartment REIT’s common stock and the OP Units. If a holder of the Apartment REIT’s common stock or the OP Units is able to sell his shares of common stock or the OP Units, the sale will likely be at a substantial discount. | ||
• | We have received notices of the termination of our advisory agreement with our advisor, the Apartment REIT’s dealer manager agreement with Grubb & Ellis Securities, Inc. and our transfer agent services agreement with GEEA Transfer Agent, LLC. We may not be successful in hiring third party service providers to perform advisory services, dealer manager services and/or transfer agent services for us, which could impact our ability to achieve our investment objectives. | ||
• | The Operating Partnership has been named a defendant in a complaint seeking an injunction to prevent the acquisition of the eight DST properties that we have contracted to acquire, which could prevent us from acquiring the eight DST properties. | ||
• | Any distributions that we pay in the future to holders of the OP Units may be less than the distributions they would have received from a DST had it not sold the property to us in the proposed acquisitions. | ||
• | Holders of the OP Units will be subject to federal income tax on their share of the Operating Partnership’s taxable income, regardless of whether or when they receive any cash distributions from the Operating Partnership, and may recognize income in excess of the Operating Partnership’s cash distributions. | ||
• | As of the date of this prospectus, we have acquired only a limited number of properties. If we are unable to acquire suitable properties, or suffer a delay in making acquisitions, we may not have any cash flows available for distribution to our equityholders. |
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• | We have paid and may continue to pay distributions from sources other than our cash flows from operations, including from the net proceeds from the Apartment REIT’s follow-on offering or from borrowed funds. We have not established any limit on the amount of offering proceeds that may be used to fund distributions other than those limits imposed by the Apartment REIT’s organizational documents and Maryland law. Therefore, all or any portion of a distribution to equityholders may be paid from the Apartment REIT’s offering proceeds. We also may be required to sell assets or issue new securities for cash in order to pay distributions. Any such actions could reduce the amount of capital we ultimately invest in assets and negatively impact the amount of income available for future distributions. | ||
• | We may incur substantial debt, which could hinder our ability to pay distributions to you or could decrease the value of your investment if the income from, or the value of, the property securing our debt falls. | ||
• | If the Apartment REIT raises substantially less than the maximum amount contemplated in its follow-on offering of $105,000,000, we may not be able to invest in a diverse portfolio of real estate and real estate-related investments and the value of your investment may fluctuate more widely with the performance of specific investments. | ||
• | We rely on our advisor and its affiliates to manage our business and assets. We pay substantial fees to our advisor and its affiliates for these services, and the agreements governing these fees were not negotiated at arm’s-length. In addition, fees payable to the Apartment REIT’s dealer manager and our advisor in our organizational stage are based upon the gross offering proceeds and not on our or our properties’ performance. Such agreements may require us to pay more than we would if we were using unaffiliated third parties and may not solely reflect your interests as a stockholder of our company. | ||
• | Many of our officers and non-independent directors have substantial conflicts of interest because they also serve as officers and directors of our sponsor, our advisor, the Apartment REIT’s dealer manager, or their affiliates, including significant conflicts in allocating time and investment opportunities among us and similar programs sponsored by our sponsor. | ||
• | If the Apartment REIT does not remain qualified as a REIT, it will be subject to federal income tax at regular corporate tax rates, which would adversely affect our operations and our ability to pay distributions to you. | ||
• | The amount of distributions we may pay to you in the future, if any, is uncertain. Due to the risks involved in the ownership of real estate and real estate-related investments, there is no guarantee of any return on your investment in us and you may lose the amount you invest. | ||
• | The Board may change our investment objectives without seeking your approval. |
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Approximate | Average | Average | 2009 | |||||||||||||||||||||||||||||
Year | Number | Rentable | Unit Size | Physical | Rent Per | Property | ||||||||||||||||||||||||||
Property Name | Location | Built | of Units | Area (Sq. Ft.) | (Sq. Ft.) | Occupancy | Unit | Taxes | ||||||||||||||||||||||||
Mission Brentwood | Brentwood, TN | 1989 | 380 | 299,008 | 843 | 95.6 | % | $ | 694 | $ | 347,726 | |||||||||||||||||||||
Mission Briley Parkway(1) | Nashville, TN | 1985 | 360 | 318,524 | 955 | 95.5 | % | $ | 611 | $ | 270,382 | |||||||||||||||||||||
Mission Barton Creek | Austin, TX | 1980 | 298 | 225,336 | 756 | 99.0 | % | $ | 852 | $ | 556,780 | |||||||||||||||||||||
Mission Battleground Park | Greensboro, NC | 1990 | 240 | 229,108 | 955 | 96.0 | % | $ | 627 | $ | 163,432 | |||||||||||||||||||||
Mission Capital Crossing | Raleigh, NC | 1983 | 356 | 360,996 | 1,014 | 93.6 | % | $ | 638 | $ | 177,382 | |||||||||||||||||||||
Mission Tanglewood | Austin, TX | 1986 | 364 | 253,404 | 696 | 96.8 | % | $ | 618 | $ | 465,035 | |||||||||||||||||||||
Mission Mayfield Downs | Grand Prairie, TX | 2002 | 258 | 216,006 | 901 | 97.0 | % | $ | 711 | $ | 375,448 | |||||||||||||||||||||
Mission Preston Wood | Richardson, TX | 1979, | (2) | 194 | 192,191 | 991 | 95.6 | % | $ | 672 | $ | 179,996 | ||||||||||||||||||||
1999, | ||||||||||||||||||||||||||||||||
2000 |
(1) | This property is subject to a ground lease. | |
(2) | This property was developed and constructed in three stages. |
• | we believe all of the properties are adequately covered by insurance and are suitable for their intended purposes; | ||
• | we have no plans for any material renovations, improvements or development with respect to any of the properties, except in accordance with planned budgets; and | ||
• | each of the properties are located in markets where we are subject to competition for attracting new tenants and retaining current tenants. |
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Equity Value | Assumed | |||||||||||||||||||||||
Purchase | of the OP | Mortgage | Interest | Maturity | ||||||||||||||||||||
Property Name | Location | Price(2) | Units(3) | Indebtedness(1) | Rate(1) | Date | ||||||||||||||||||
Mission Brentwood | Brentwood, TN | $ | 27,857,000 | $ | 7,857,000 | $ | 20,000,000 | 5.8875 | % | 11/2/2016 | ||||||||||||||
Mission Briley Parkway | Nashville, TN | $ | 22,123,000 | $ | 7,573,000 | $ | 14,550,000 | 6.326 | % | 9/1/2016 | ||||||||||||||
Mission Barton Creek | Austin, TX | $ | 25,929,000 | (5) | $ | 4,729,000 | (4) | $ | 21,200,000 | 3.06 | %(5) | 11/1/2015 | ||||||||||||
Mission Battleground Park | Greensboro, NC | $ | 12,821,000 | $ | 1,621,000 | $ | 11,200,000 | 6.322 | % | 8/1/2016 | ||||||||||||||
Mission Capital Crossing | Raleigh, NC | $ | 20,667,000 | $ | 2,967,000 | $ | 17,700,000 | 5.93 | % | 2/1/2018 | ||||||||||||||
Mission Tanglewood | Austin, TX | $ | 19,862,000 | $ | 4,587,000 | $ | 15,275,000 | 6.45 | %(6) | 2/1/2019 | ||||||||||||||
Mission Mayfield Downs | Grand Prairie, TX | $ | 18,027,000 | $ | 1,792,000 | $ | 16,235,000 | 5.51 | %(7) | 6/1/2017 | ||||||||||||||
12.75 | %(8) | 6/1/2016 | ||||||||||||||||||||||
Mission Preston Wood | Richardson, TX | $ | 9,733,000 | $ | 1,333,000 | $ | 8,400,000 | 5.243 | % | 10/1/2015 |
(1) | As of September 30, 2010. | |
(2) | Subject to certain purchase price adjustments as provided in the applicable definitive purchase agreements. | |
(3) | Based upon an assumed value of $9.00 per OP Unit. | |
(4) | In addition, we will be paying an amount not to exceed $757,000 in the OP Units for a capital improvement escrow reserve account. | |
(5) | Represents the variable interest rate per annum in effect as of September 30, 2010. Adjustable at the money market yield for Freddie Mac Reference Bill Securities with 30-day maturities from the most recent auction of Reference Bills conducted by Freddie Mac unless Freddie Mac has not conducted an auction of such bills within 60-days prior to the applicable interest | |
(6) | Fixed interest rate per annum through November 2010. Adjustable after November 2010 at the money market yield for Freddie Mac Reference Bill Securities with 30-day maturities from the most recent auction of Reference Bills conducted by Freddie Mac unless Freddie Mac has not conducted an auction of such bills within 60-days prior to the applicable interest adjustment period (i.e., each month), then a LIBOR Index Rate plus 3.0%. | |
(7) | Note A, which had an original principal balance of $15,250,000. | |
(8) | Note B, which had an original principal balance of $985,000. |
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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September 30, | December 31, | January 10, 2006 | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | (Date of Inception) | |||||||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||
Total assets | $ | 371,559,000 | $ | 338,303,000 | $ | 344,685,000 | $ | 228,814,000 | $ | 67,214,000 | $ | 201,000 | ||||||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 217,434,000 | $ | 217,713,000 | $ | 139,318,000 | $ | 19,218,000 | $ | — | ||||||||||||
Unsecured note payables to affiliate | $ | 7,750,000 | $ | 9,100,000 | $ | 9,100,000 | $ | 7,600,000 | $ | 10,000,000 | $ | — | ||||||||||||
Total Capital | $ | 108,951,000 | $ | 104,769,000 | $ | 106,705,000 | $ | 66,057,000 | $ | 14,248,000 | $ | 201,000 |
Period from January | ||||||||||||||||||||||||
10, 2006 (Date of | ||||||||||||||||||||||||
Inception) through | ||||||||||||||||||||||||
Nine Months Ended September 30, | Years Ended December 31, | December 31, | ||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||
Total revenues | $ | 29,070,000 | $ | 28,042,000 | $ | 37,465,000 | $ | 31,878,000 | $ | 12,705,000 | $ | 659,000 | ||||||||||||
Loss from continuing operations | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||||
Net loss per partnership unit — basic and diluted (1) | $ | (0.41 | ) | $ | (0.29 | ) | $ | (0.35 | ) | $ | (1.04 | ) | $ | (1.10 | ) | $ | (1.99 | ) | ||||||
Statement of Cash Flows Data: | ||||||||||||||||||||||||
Cash flows provided by operating activities | $ | 2,832,000 | $ | 4,653,000 | $ | 5,718,000 | $ | 1,567,000 | $ | 2,195,000 | $ | 301,000 | ||||||||||||
Cash flows used in investing activities | $ | (39,377,000 | ) | $ | (2,174,000 | ) | $ | (1,824,000 | ) | $ | (126,638,000 | ) | $ | (126,965,000 | ) | $ | (63,991,000 | ) | ||||||
Cash flows provided by financing activities | $ | 36,984,000 | $ | 123,000 | $ | 337,000 | $ | 126,041,000 | $ | 125,010,000 | $ | 65,144,000 | ||||||||||||
Other Data: | ||||||||||||||||||||||||
Distributions declared | $ | 8,089,000 | $ | 7,481,000 | $ | 9,999,000 | $ | 8,633,000 | $ | 3,519,000 | $ | 145,000 | ||||||||||||
Distributions declared per partnership unit | $ | 0.45 | $ | 0.47 | $ | 0.62 | $ | 0.70 | $ | 0.68 | $ | 0.14 | ||||||||||||
Funds from operations (2) | $ | 1,977,000 | $ | 4,295,000 | $ | 6,135,000 | $ | (1,107,000 | ) | $ | (194,000 | ) | $ | (234,000 | ) | |||||||||
Net operating income (3) | $ | 15,393,000 | $ | 14,305,000 | $ | 19,343,000 | $ | 15,832,000 | $ | 6,482,000 | $ | 393,000 |
(1) | Net loss per partnership unit is based upon the weighted average number of OP Units outstanding. | |
(2) | For additional information on FFO, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds from Operations, which includes a reconciliation of the Operating Partnership’s GAAP net loss to FFO for the nine months ended September 30, 2010 and 2009 and for the years ended December 31, 2009, 2008 and 2007. | |
(3) | For additional information on net operating income, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Operating Income, which includes a reconciliation of the Operating Partnership’s GAAP net loss to net operating income for the nine months ended September 30, 2010 and 2009 and for the years ended December 31, 2009, 2008 and 2007. |
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• | We seek to preserve capital through selective acquisitions and professional management, whereby we intend to increase rental rates, maintain high economic occupancy rates, reduce tenant turnover, make value-enhancing and income-producing capital improvements where appropriate, and control operating costs and capital expenditures. | ||
• | We seek to purchase apartment communities in growth markets, at attractive prices relative to replacement cost, and obtain immediate income from tenant rents with the potential for appreciation in value over time. |
Ownership | Type of | Number | Purchase | Contract Purchase | Mortgage | Interest | Maturity | Property | ||||||||||||||||||||||||||||
Property Name | Interest | Property | of Units | Occupancy | Date | Price | Debt(1) | Rate(1) | Date | Taxes(3) | Location | |||||||||||||||||||||||||
Walker Ranch Apartment Homes | 100% | apartment | 325 | 96.0% | 10/31/2006 | $ | 30,750,000 | $ | 20,000,000 | 5.36 | % | 5/11/2017 | $ | 814,000 | San Antonio, TX | |||||||||||||||||||||
Hidden Lake Apartment Homes | 100% | apartment | 380 | 96.8% | 12/28/2006 | $ | 32,030,000 | $ | 19,218,000 | 5.34 | % | 1/11/2017 | $ | 742,000 | San Antonio, TX | |||||||||||||||||||||
Park at Northgate | 100% | apartment | 248 | 97.2% | 6/12/2007 | $ | 16,600,000 | $ | 10,295,000 | 5.94 | % | 8/1/2017 | $ | 529,000 | Spring, TX | |||||||||||||||||||||
Residences at Braemar | 100% | apartment | 160 | 90.6% | 6/29/2007 | $ | 15,000,000 | $ | 9,231,000 | 5.72 | % | 6/1/2015 | $ | 132,000 | Charlotte, NC | |||||||||||||||||||||
Baypoint Resort | 100% | apartment | 350 | 93.1% | 8/2/2007 | $ | 33,250,000 | $ | 21,612,000 | 5.94 | % | 8/1/2017 | $ | 538,000 | Corpus Christi, TX | |||||||||||||||||||||
Towne Crossing Apartments | 100% | apartment | 268 | 98.9% | 8/29/2007 | $ | 21,600,000 | $ | 14,588,000 | 5.04 | % | 11/1/2014 | $ | 459,000 | Mansfield, TX | |||||||||||||||||||||
Villas of El Dorado | 100% | apartment | 248 | 95.6% | 11/2/2007 | $ | 18,000,000 | $ | 13,600,000 | 5.68 | % | 12/1/2016 | $ | 342,000 | McKinney, TX | |||||||||||||||||||||
The Heights at Olde Towne | 100% | apartment | 148 | 91.2% | 12/21/2007 | $ | 17,000,000 | $ | 10,475,000 | 5.79 | % | 1/1/2018 | $ | 204,000 | Portsmouth, VA | |||||||||||||||||||||
The Myrtles at Olde Towne | 100% | apartment | 246 | 91.9% | 12/21/2007 | $ | 36,000,000 | $ | 20,100,000 | 5.79 | % | 1/1/2018 | $ | 375,000 | Portsmouth, VA | |||||||||||||||||||||
Arboleda Apartments | 100% | apartment | 312 | 94.9% | 3/31/2008 | $ | 29,250,000 | $ | 17,559,000 | 5.36 | % | 4/1/2015 | $ | 553,000 | Cedar Park, TX | |||||||||||||||||||||
Creekside Crossing | 100% | apartment | 280 | 93.9% | 6/26/2008 | $ | 25,400,000 | $ | 17,000,000 | 2.51 | % (2) | 7/1/2015 | $ | 357,000 | Lithonia, GA | |||||||||||||||||||||
Kedron Village | 100% | apartment | 216 | 98.6% | 6/27/2008 | $ | 29,600,000 | $ | 20,000,000 | 2.53 | % (2) | 7/1/2015 | $ | 187,000 | Peachtree City, GA | |||||||||||||||||||||
Canyon Ridge Apartments | 100% | apartment | 350 | 95.4% | 9/15/2008 | $ | 36,050,000 | $ | 24,000,000 | 2.56 | % (2) | 10/1/2015 | $ | 422,000 | Hermitage, TN | |||||||||||||||||||||
Bella Ruscello Luxury Apartment Homes | 100% | apartment | 216 | 93.5% | 3/24/2010 | $ | 17,400,000 | $ | 13,233,000 | 5.53 | % | 4/1/2020 | $ | 353,000 | Duncanville, TX | |||||||||||||||||||||
Mission Rock Ridge | 100% | apartment | 226 | 97.8% | 09/30/2010 | $ | 19,857,000 | $ | 13,900,000 | 4.20 | % | 10/1/2020 | $ | 375,000 | Arlington, TX |
(1) | As of September 30, 2010, we had 12 fixed rate and three variable rate mortgage loans with effective rates ranging from 2.51% to 5.94% per annum and a weighted average effective interest rate of 4.74% per annum. Most of the mortgage loan |
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payables may be prepaid in whole but not in part, subject to prepayment premiums. In the event of prepayment, the amount of the prepayment premium will be paid according to the terms of the applicable loan documents. | ||
(2) | Represents the per annum variable interest rate in effect as of September 30, 2010. In addition, pursuant to the terms of the related loan documents, the maximum variable interest rate allowable is capped at a rate ranging from 6.50% to 6.75% per annum. | |
(3) | Represents the real estate taxes on the property for 2009. |
• | we believe all of our properties are adequately covered by insurance and are suitable for their intended purposes; | ||
• | we have no plans for any material renovations, improvements or development with respect to any of our properties, except in accordance with planned budgets; and | ||
• | our properties are located in markets where we are subject to competition for attracting new tenants and retaining current tenants. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Offering Stage • Selling Commissions (the dealer manager of the Apartment REIT) | Generally, up to 7.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering (all or a portion of which may be reallowed by a dealer manager to participating broker-dealers). No selling commissions are payable on shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No selling commissions are payable on the OP Units issuable in connection with the proposed acquisitions. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• Dealer Manager Fee (the dealer manager of the Apartment REIT) | Generally, up to 3.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering (all or a portion of which may be reallowed by a dealer manager to participating broker-dealers). No dealer manager fee is payable on shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No dealer manager fee is payable on the OP Units issuable in connection with the proposed acquisitions. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold in its public offering of common stock and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• Other Organizational and Offering Expenses (our advisor or its affiliates) | Up to 1.0% of gross offering proceeds for shares of the Apartment REIT’s common stock sold pursuant to a primary offering. No other organizational and offering expenses will be reimbursed with respect to shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No other organizational and offering expenses will be reimbursed with respect to the OP Units issuable in connection with the proposed acquisitions. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold in its public offering of common stock and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Acquisition Stage | ||||
• Acquisition Fees (our advisor or its affiliates) | Up to 3.0% of the contract purchase price of each property the Apartment REIT acquires, up to 4.0% of the total development cost of any development property, or up to 2.0% of the origination or purchase price of any real estate-related investment, as applicable. | Actual amount depends upon the actual contract purchase price of each property acquired and the actual development cost of any development property, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• Reimbursement of Acquisition Expenses (our advisor or its affiliates) | All expenses actually incurred related to selecting, evaluating and acquiring assets, which will be paid regardless of whether an asset is acquired. | Actual amount depends upon the actual expenses incurred, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Operational Stage | ||||
• Asset Management Fee (our advisor or its affiliates) | Subject to our equityholders receiving distributions in an amount equal to 5.0% per year of our invested capital, an amount equal to 0.5% per year, cumulative, non-compounded, of average invested assets. The asset management fee is calculated and payable monthly in cash or shares of the Apartment REIT’s common stock, at the option of our advisor or one of its affiliates, not to exceed one-twelfth of 0.5% of our average invested assets as of the last day of the immediately preceding quarter; provided that effective January 1, 2009, our advisor has agreed to waive the right to receive an asset management fee until the quarter following the quarter in which the Apartment REIT generates FFO sufficient to cover 100% of the distributions declared to its stockholders for such quarter. For purposes of calculating FFO, non-recurring charges including, but not limited to, acquisition-related expenses, amortization of deferred financing fees on the Apartment REIT’s line of credit or other equivalent mezzanine financing, interest expense associated with the Apartment REIT’s line of credit, the Apartment REIT’s loan from NNN | Actual amount depends upon the average invested assets, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Realty Advisors Inc., or NNN Realty Advisors, an affiliate of our advisor, or other mezzanine loans, and gains or losses on future interest rate swaps, will be excluded. Average invested assets include any property-related debt; therefore, fully leveraging the Apartment REIT’s portfolio could increase the asset management fee payable to our advisor or one of its affiliates. | ||||
• Property Management Fees (Residential Management) | Up to 4.0% of the gross monthly cash receipts from each property managed by the respective property manager, some of which may be reallowed to a third-party property manager. | Actual amount depends upon the gross monthly cash receipts of the properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• Compensation for Additional Services (our advisor or its affiliates) | If the Apartment REIT requests our advisor or one of its affiliates to render services to the Apartment REIT other than those required to be rendered by our advisor under the advisory agreement, the additional services, if our advisor elects to perform them, will be compensated separately on terms to be agreed upon between our advisor or its affiliate and the Apartment REIT. The rate of compensation for these services must be approved by a majority of the Board, including a majority of the independent directors, and cannot exceed the amount that would be paid to unaffiliated third parties for similar services. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• Operating Expenses (our advisor or its affiliates) | We reimburse our advisor or its affiliates for operating expenses incurred in rendering services to us, subject to certain limitations. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Liquidity Stage | ||||
• Disposition Fees (our advisor or its affiliates) | Up to the lesser of 1.75% of the contract sales price of each property or 50.0% of a competitive real estate commission that would have been paid to a third party. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated parties, will not exceed | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. | ||||
• Subordinated Participation Interest (our advisor) | Our advisor has a subordinated participation interest in the Operating Partnership pursuant to which our advisor will receive cash distributions from the Operating Partnership under the following circumstances: | |||
• Incentive Distribution upon Sales | Equal to 15.0% of the net proceeds of the sale of the property after we have received, and paid to our equityholders, the sum of: | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
• the gross proceeds from the sale of shares of the Apartment REIT’s common stock; and | ||||
• any shortfall in our annual 8.0% cumulative, non-compounded return on its adjusted invested capital. The gross proceeds from the sale of shares of the Apartment REIT’s common stock, as adjusted for distributions of net sale proceeds. | ||||
Until such time as our equityholders receive such 8.0% return, our advisor will not receive any incentive distributions. There is no assurance we will be able to pay an annual 8.0% return to its equityholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. | ||||
• Incentive Distribution upon Listing | In the event of termination of the advisory agreement due to listing of the shares of the Apartment REIT’s common stock on a national securities exchange, our advisor will be entitled to an incentive distribution equal to 15.0% of the amount, if any, by which (1) the market value of the Apartment REIT’s outstanding common stock plus distributions paid by it prior to listing, exceeds (2) the sum of the | Actual amount depends upon the market value of the Apartment REIT’s common stock at the time of listing, among other factors, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
gross proceeds from the sale of shares of the Apartment REIT’s common stock plus an annual 8.0% cumulative, non-compounded return on the gross proceeds from the sale of shares of the Apartment REIT’s common stock. This distribution may be in the form of cash, the OP Units or shares of the Apartment REIT’s common stock. | ||||
There is no assurance the Apartment REIT will be able to pay an annual 8.0% return to its stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. Upon our advisor’s receipt of the incentive distribution upon listing, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of the Apartment REIT’s properties. See “Description of the OP Units and the Partnership Agreement.” | ||||
• Fees Payable upon Termination of our advisory Agreement | In connection with the termination of the advisory agreement other than due to a listing of the shares of our common stock on a national securities exchange, we may cause the Operating Partnership to redeem our advisor’s special limited partnership units for cash, units of limited partnership interest in the Operating Partnership or shares of our common stock, in an amount equal to what our advisor would have received pursuant to the incentive distribution upon sales if the Operating Partnership immediately sold all of its assets at fair market value. | Actual amount depends upon the fair market value of our assets at the time of termination and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Amounts incurred | ||||
from Inception | ||||
through | ||||
Type of Compensation | September, 2010 | |||
Offering Stage: | ||||
Initial Offering | ||||
Selling Commissions | $ | 10,874,000 | ||
Marketing Allowance and Accountable Due Diligence Expense Reimbursements | $ | 4,073,000 | ||
Other Organizational and Offering Expenses | $ | 2,361,000 | ||
Follow-on Offering | ||||
Selling Commissions | $ | 1,818,000 | ||
Dealer Manager Fees | $ | 792,000 | ||
Other Organizational and Offering Expenses | $ | 264,000 | ||
Acquisition and Development Stage: | ||||
Acquisition Fee | $ | 11,334,000 | ||
Reimbursement of Acquisition Expenses | $ | 15,000 | ||
Operational Stage: | ||||
Asset Management Fee | $ | 3,513,000 | ||
Property Management Fees | $ | 3,581,000 | ||
Compensation for Additional Services | $ | 238,000 | ||
Reimbursable Expenses | ||||
Operating Expenses | $ | 665,000 | ||
On-site Personnel | $ | 9,216,000 | ||
Interest Expense | $ | 1,262,000 | ||
Disposition/Liquidation Stage: | ||||
Disposition Fee | $ | — | ||
Incentive Distribution Upon Sales | $ | — | ||
Incentive Distribution Upon Listing | $ | — | ||
Fees Payable Upon Termination of Advisory Agreement | $ | — |
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• | identify and acquire investments that further our investment strategy; |
• | build, expand and maintain our network of licensed securities brokers and other agents; |
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• | attract, integrate, motivate and retain qualified personnel to manage our day-to-day operations; |
• | respond to competition both for investment opportunities and potential investors’ investment in us; and |
• | build and expand our operational structure to support our business. |
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• | Debt and Equity Markets —Our results of operations are sensitive to the volatility of the credit markets. The real estate debt markets have been experiencing volatility as a result of certain factors, including the tightening of underwriting standards by lenders and credit rating agencies and the significant inventory of unsold commercial mortgage-backed securities in the market. Credit spreads for major sources of capital have widened significantly as investors have demanded a higher risk premium. This climate has resulted in lenders increasing the cost for debt financing. Should the overall cost of borrowings increase, either by increases in the index rates or by increases in lender spreads, we will need to factor such increases into the economics of our acquisitions, developments and property contributions. This increased cost of borrowing may result in our property operations generating lower overall economic returns and a reduced level of cash flows, which could potentially impact our ability to pay distributions to you. In addition, the ongoing dislocations in the debt markets have reduced the amount of capital that is available to finance real estate, which, in turn: (1) limits the ability of real estate investors to benefit from reduced real estate values or to realize enhanced returns on real estate investments; (2) has slowed real estate transaction activity; and (3) may result in an inability to refinance debt as it becomes due, all of which may reasonably be expected to have a material impact, favorable or unfavorable, on revenues, income and/or cash flows from the acquisition and operations of real estate and mortgage loans. In addition, the state of the debt markets could have an impact on the overall amount of capital being invested in real estate, which may result in price or value decreases of real estate assets and impact our ability to raise equity capital. |
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• | Valuations —The ongoing market volatility will likely make the valuation of our properties more difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our properties that could result in a substantial decrease in the value of our properties. As a result, we may not be able to recover the carrying amount of our properties, which may require us to recognize an impairment charge in earnings. |
• | Government Intervention —The pervasive and fundamental disruptions that the global financial markets have been undergoing have led to extensive and unprecedented governmental intervention. Although the government intervention is intended to stimulate the flow of capital and to undergird the U.S. economy in the short term, it is impossible to predict the actual effect of the government intervention and what effect, if any, additional interim or permanent governmental intervention may have on the financial markets and/or the effect of such intervention on us and our results of operations. In addition, there is a high likelihood that regulation of the financial markets will be significantly increased in the future, which could have a material impact on our operating results and financial condition. |
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• | any person directly or indirectly owning, controlling or holding, with the power to vote, 10.0% or more of the outstanding voting securities of such other person; |
• | any person 10.0% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with the power to vote, by such other person; |
• | any person directly or indirectly controlling, controlled by or under common control with such other person; |
• | any executive officer, director, manager, trustee or general partner of such other person; and |
• | any legal entity for which such person acts as an executive officer, director, manager, trustee or general partner. |
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• | a venture partner may at any time have economic or other business interests or goals which become inconsistent with our business interests or goals, including inconsistent goals relating to the sale of properties held in a joint venture or the timing of the termination and liquidation of the venture; |
• | a venture partner might become bankrupt and such proceedings could have an adverse impact on the operation of the partnership or joint venture; |
• | actions taken by a venture partner might have the result of subjecting the property to liabilities in excess of those contemplated; |
• | a venture partner may be in a position to take action contrary to our instructions or requests or contrary to our strategies or objectives, including our strategy to maintain the Apartment REIT’s qualification as a REIT; and |
• | the joint venture may provide for the distribution of income to us otherwise than in direct proportion to our ownership interest in the joint venture. |
• | the existing follow-on offering of the shares of the Apartment REIT’s common stock; |
• | future offerings of the Apartment REIT’s common stock pursuant to the DRIP and up to 50,000,000 shares of any preferred stock of the Apartment REIT that the Board may authorize; |
• | private issuances of the Apartment REIT’s securities to other investors, including institutional investors; or |
• | issuances of the Apartment REIT’s securities pursuant to our 2006 Incentive Award Plan. |
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• | a merger, tender offer or proxy contest; |
• | assumption of control by a holder of a large block of our securities; or |
• | removal of incumbent management. |
• | the election or removal of directors; |
• | any amendment of our charter, except that the Board may amend our charter without stockholder approval to change our name or the name of other designation or the par value of any class or series of our stock and the aggregate par value of our stock, increase or decrease the aggregate number of our |
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shares of stock, increase or decrease the number of our shares of any class or series that we have the authority to issue, or effect certain reverse stock splits; |
• | our dissolution; and |
• | certain mergers, consolidations and sales or other dispositions of all or substantially all of our assets. |
• | may consider the transfer to be null and void; |
• | will not reflect the transaction on our books; |
• | may institute legal action to enjoin the transaction; |
• | will not pay dividends or other distributions to him or her with respect to those excess shares of stock; |
• | will not recognize his or her voting rights for those excess shares of stock; and |
• | may consider the excess shares of stock held in trust for the benefit of a charitable beneficiary. |
• | he or she may lose his or her power to dispose of the stock; |
• | he or she may not recognize profit from the sale of such stock if the “market price” of the stock increases; and |
• | he or she may incur a loss from the sale of such stock if the “market price” decreases. |
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• | limitations on capital structure; |
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• | restrictions on specified investments; |
• | prohibitions on transactions with affiliates; and |
• | compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations. |
• | poor economic times may result in defaults by tenants of our properties and borrowers. We may also be required to provide rent concessions or reduced rental rates to maintain or increase occupancy levels; |
• | job transfers and layoffs may cause vacancies to increase and a lack of future population and job growth may make it difficult to maintain or increase occupancy levels; |
• | increases in supply of competing properties or decreases in demand for our properties may impact our ability to maintain or increase occupancy levels; |
• | changes in interest rates and availability of debt financing could render the sale of properties difficult or unattractive; |
• | periods of high interest rates may reduce cash flows from leveraged properties; and |
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• | increased insurance premiums, real estate taxes or energy or other expenses may reduce funds available for distribution. Also, any such increased expenses may make it difficult to increase rents to tenants on turnover, which may limit our ability to increase our returns. |
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• | make it more difficult for us to find tenants to lease units in our apartment communities; |
• | force us to lower our rental prices in order to lease units in our apartment communities; and |
• | substantially reduce our revenues and cash available for distribution to you. |
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• | part of the income and gain recognized by certain qualified employee pension trusts with respect to the Apartment REIT common stock may be treated as unrelated business taxable income if the shares of the Apartment REIT common stock are predominately held by qualified employee pension trusts, and the |
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Apartment REIT is required to rely on a special look-through rule for purposes of meeting one of the Apartment REIT share ownership tests, and the Apartment REIT is not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income; |
• | part of the income and gain recognized by a tax-exempt stockholder with respect to the shares of Apartment REIT common stock would constitute unrelated business taxable income if the stockholder incurs debt in order to acquire shares of Apartment REIT common stock; and |
• | part or all of the income or gain recognized with respect to the shares of Apartment REIT common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Internal Revenue Code may be treated as unrelated business taxable income. |
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• | whether holding the OP Units or the Apartment REIT’s common stock is consistent with the applicable provisions of ERISA and the Internal Revenue Code, or any other applicable governing authority in the case of a government plan; |
• | whether holding the OP Units or the Apartment REIT’s common stock is made in accordance with the documents and instruments governing your Plan or IRA, including your Benefit Plan or IRA’s investment policy; |
• | whether holding the OP Units or the Apartment REIT’s common stock satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA; |
• | whether holding the OP Units or the Apartment REIT’s common stock will impair the liquidity of the Benefit Plan or IRA; |
• | whether holding the OP Units or the Apartment REIT’s common stock will constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code; |
• | whether holding the OP Units or the Apartment REIT’s common stock will produce unrelated business taxable income, referred to as UBTI and as defined in Sections 511 through 514 of the Internal Revenue Code, to the Plan or IRA; and |
• | your need to value the assets of the Plan or IRA annually in accordance with ERISA and the Internal Revenue Code. |
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• | our business and financing strategy; | ||
• | our ability to effectively and timely deploy the net proceeds of the Apartment REIT’s offering of its common stock; | ||
• | our ability to obtain future financing arrangements; | ||
• | our understanding of our competition and our ability to compete effectively; | ||
• | our projected operating results; | ||
• | market and industry trends; | ||
• | projected capital expenditures; | ||
• | interest and insurance rates; | ||
• | our ability to consummate the proposed acquisitions; | ||
• | the impact of our strategic partnerships on our operations and business; and | ||
• | our ability to implement our business plan. |
• | the factors referenced in this prospectus, including those set forth under the section captioned “Risk Factors;” | ||
• | our ability to make distributions on our securities; | ||
• | the lack of a public market for the OP Units and the Apartment REIT’s common stock; | ||
• | changes in our business or strategy; | ||
• | the availability, terms and deployment of debt and equity capital; | ||
• | our dependence upon key personnel whose continued service is not guaranteed; | ||
• | our ability to identify, hire and retain highly qualified personnel in the future; | ||
• | the availability of a qualified advisor to manage our business and assets; | ||
• | the degree and nature of our competition; | ||
• | changes in governmental regulations, tax rates and similar matters; | ||
• | defaults on or non-renewal of leases by tenants; | ||
• | decreased rental rates or increased vacancy rates; |
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• | difficulties in identifying suitable apartment buildings to acquire and completing acquisitions; | ||
• | competition for acquisitions; | ||
• | our failure to successfully develop, integrate and operate acquired properties and operations; | ||
• | the impact of our investment in joint ventures; | ||
• | the financial condition and liquidity of, or disputes with, joint venture and development partners; | ||
• | changes in GAAP; | ||
• | legislative and regulatory changes (including changes to laws governing the taxation of REITs); | ||
• | environmental uncertainties and risks related to natural disasters; | ||
• | the Apartment REIT’s ability to maintain its qualification as a REIT for federal income tax purposes and limitations imposed upon our business by the Apartment REIT’s status as a REIT; | ||
• | the Operating Partnership’s ability to maintain its qualification as a partnership, and not an association on publicly traded partnership taxable as a corporation, for federal income tax purposes; | ||
• | general volatility in capital markets; | ||
• | the adequacy of our cash reserves and working capital; | ||
• | changes in real estate and zoning laws and increases in real property tax rates; | ||
• | the timing of cash flows, if any, from our properties; and | ||
• | other risks associated with investing in real estate, including changes in our industry, interest rates, the debt securities markets, the general economy or the finance and real estate markets specifically. |
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September 30, | December 31, | January 10, 2006 | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | (Date of Inception) | |||||||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||
Total assets | $ | 371,559,000 | $ | 338,303,000 | $ | 344,685,000 | $ | 228,814,000 | $ | 67,214,000 | $ | 201,000 | ||||||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 217,434,000 | $ | 217,713,000 | $ | 139,318,000 | $ | 19,218,000 | $ | — | ||||||||||||
Unsecured note payables to affiliate | $ | 7,750,000 | $ | 9,100,000 | $ | 9,100,000 | $ | 7,600,000 | $ | 10,000,000 | $ | — | ||||||||||||
Total Capital | $ | 108,951,000 | $ | 104,769,000 | $ | 106,705,000 | $ | 66,057,000 | $ | 14,248,000 | $ | 201,000 |
Period from January | ||||||||||||||||||||||||
10, 2006 (Date of | ||||||||||||||||||||||||
Inception) through | ||||||||||||||||||||||||
Nine Months Ended September 30, | Years Ended December 31, | December 31, | ||||||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||
Total revenues | $ | 29,070,000 | $ | 28,042,000 | $ | 37,465,000 | $ | 31,878,000 | $ | 12,705,000 | $ | 659,000 | ||||||||||||
Loss from continuing operations | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | $ | (523,000 | ) | ||||||
Net loss per partnership unit — basic and diluted (1) | $ | (0.41 | ) | $ | (0.29 | ) | $ | (0.35 | ) | $ | (1.04 | ) | $ | (1.10 | ) | $ | (1.99 | ) | ||||||
Statement of Cash Flows Data: | ||||||||||||||||||||||||
Cash flows provided by operating activities | $ | 2,832,000 | $ | 4,653,000 | $ | 5,718,000 | $ | 1,567,000 | $ | 2,195,000 | $ | 301,000 | ||||||||||||
Cash flows used in investing activities | $ | (39,377,000 | ) | $ | (2,174,000 | ) | $ | (1,824,000 | ) | $ | (126,638,000 | ) | $ | (126,965,000 | ) | $ | (63,991,000 | ) | ||||||
Cash flows provided by financing activities | $ | 36,984,000 | $ | 123,000 | $ | 337,000 | $ | 126,041,000 | $ | 125,010,000 | $ | 65,144,000 | ||||||||||||
Other Data: | ||||||||||||||||||||||||
Distributions declared | $ | 8,089,000 | $ | 7,481,000 | $ | 9,999,000 | $ | 8,633,000 | $ | 3,519,000 | $ | 145,000 | ||||||||||||
Distributions declared per partnership unit | $ | 0.45 | $ | 0.47 | $ | 0.62 | $ | 0.70 | $ | 0.68 | $ | 0.14 | ||||||||||||
Funds from operations (2) | $ | 1,977,000 | $ | 4,295,000 | $ | 6,135,000 | $ | (1,107,000 | ) | $ | (194,000 | ) | $ | (234,000 | ) | |||||||||
Net operating income (3) | $ | 15,393,000 | $ | 14,305,000 | $ | 19,343,000 | $ | 15,832,000 | $ | 6,482,000 | $ | 393,000 |
(1) | Net loss per partnership unit is based upon the weighted average number of OP Units outstanding. | |
(2) | For additional information on FFO, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Funds from Operations, which includes a reconciliation of the Operating Partnership’s GAAP net loss to FFO for the nine months ended September 30, 2010 and 2009 and for the years ended December 31, 2009, 2008 and 2007. | |
(3) | For additional information on net operating income, see Management’s Discussion and Analysis of Financial Condition and Results of Operations — Net Operating Income, which includes a reconciliation of the Operating Partnership’s GAAP net loss to net operating income for the nine months ended September 30, 2010 and 2009 and for the years ended December 31, 2009, 2008 and 2007. |
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OPERATIONS
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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• | significant negative industry or economic trends; | ||
• | a significant underperformance relative to historical or projected future operating results; and | ||
• | a significant change in the extent or manner in which the asset is used or a significant physical change in the asset. |
• | management, having the authority to approve the action, commits to a plan to sell the asset; | ||
• | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; |
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• | an active program to locate a buyer and other actions required to complete the plan to sell the asset has been initiated; | ||
• | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; | ||
• | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and | ||
• | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn. |
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Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
Administration | $ | 4,599,000 | $ | 4,363,000 | ||||
Real estate taxes | 3,851,000 | 4,423,000 | ||||||
Utilities | 2,089,000 | 2,078,000 | ||||||
Repairs and maintenance | 1,840,000 | 1,630,000 | ||||||
Property management fees | 852,000 | 813,000 | ||||||
Insurance | 446,000 | 430,000 | ||||||
Total rental expenses | $ | 13,677,000 | $ | 13,737,000 | ||||
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
Professional and legal fees | $ | 345,000 | $ | 338,000 | ||||
Directors’ and officers’ insurance premiums | 170,000 | 173,000 | ||||||
Bad debt expense | 160,000 | 388,000 | ||||||
Postage and delivery | 80,000 | 67,000 | ||||||
Directors’ fees | 81,000 | 80,000 | ||||||
Franchise taxes | 72,000 | 78,000 | ||||||
Bank charges | 72,000 | 87,000 | ||||||
Investor-related services | 57,000 | 55,000 | ||||||
Stock compensation expense | 20,000 | 19,000 | ||||||
Other | 25,000 | 26,000 | ||||||
Total general and administrative | $ | 1,082,000 | $ | 1,311,000 | ||||
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Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
Interest expense on mortgage loan payables (a) | $ | 8,172,000 | $ | 7,811,000 | ||||
Amortization of deferred financing fees - mortgage loan payables (a) | 181,000 | 173,000 | ||||||
Amortization of debt discount | 101,000 | 102,000 | ||||||
Interest expense on line of credit from our general partner (b) | — | 123,000 | ||||||
Amortization of deferred financing fees - line of credit from our general partner (b) | — | 78,000 | ||||||
Interest expense on unsecured note payables (c) to affiliate | 286,000 | 401,000 | ||||||
Total interest expense | $ | 8,740,000 | $ | 8,688,000 | ||||
(a) | The increase in interest expense on mortgage loan payables and the associated amortization of deferred financing fees of $369,000 for the nine months ended September 30, 2010, as compared to the nine months ended September 30, 2009, was primarily due to an additional $396,000 in interest expense and amortization of deferred financing costs incurred on the mortgage loan payable for the Bella Ruscello property, partially offset by lower interest expense on the mortgage loan payables with amortizing principal balances. | ||
(b) | For the nine months ended September 30, 2009, we recorded $123,000 in interest expense and $78,000 in amortization of deferred financing costs on the line of credit from our general partner. In October 2009, we repaid the remaining outstanding principal balance on the line of credit from our general partner, which had a maturity date of November 1, 2009. As such, we did not incur such interest expense and amortization of deferred financing costs on the line of credit from our general partner for the nine months ended September 30, 2010. | ||
(c) | The decrease in interest expense on unsecured note payables to affiliate of $115,000 for the nine months ended September 30, 2010, as compared to the nine months ended September 30, 2009, was a result of the decrease in the outstanding principal amount as of the periods then ended and the decrease in interest rates on the unsecured note payables during the periods then ended. As of September 30, 2010 and 2009, the outstanding principal amount under the unsecured note payables to affiliate was $7,750,000 and $9,100,000, respectively. The interest rate on the unsecured note was 4.50% per annum during the nine |
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months ended September 30, 2010, and the interest rates on the unsecured notes ranged from 4.99% to 8.43% per annum during the nine months ended September 30, 2009. |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Administration | $ | 6,101,000 | $ | 4,665,000 | $ | 1,606,000 | ||||||
Real estate taxes | 5,679,000 | 5,368,000 | 2,488,000 | |||||||||
Utilities | 2,505,000 | 2,399,000 | 599,000 | |||||||||
Repairs and maintenance | 2,175,000 | 2,024,000 | 852,000 | |||||||||
Property management fees | 1,087,000 | 1,129,000 | 489,000 | |||||||||
Insurance | 575,000 | 461,000 | 189,000 | |||||||||
Total rental expenses | $ | 18,122,000 | $ | 16,046,000 | $ | 6,223,000 | ||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Professional and legal fees (a) | $ | 456,000 | $ | 672,000 | $ | 601,000 | ||||||
Bad debt expense | 446,000 | 544,000 | 264,000 | |||||||||
Directors’ and officers’ insurance premiums | 230,000 | 220,000 | 202,000 | |||||||||
Bank charges | 113,000 | 61,000 | 6,000 | |||||||||
Franchise taxes | 103,000 | 57,000 | 2,000 | |||||||||
Directors’ fees | 98,000 | 101,000 | 100,000 | |||||||||
Postage and delivery | 72,000 | 60,000 | 20,000 | |||||||||
Investor-related services | 67,000 | 68,000 | 11,000 | |||||||||
Asset management fee(b) | — | 2,563,000 | 950,000 | |||||||||
Other | 62,000 | 99,000 | 40,000 | |||||||||
Total general and administrative | $ | 1,647,000 | $ | 4,445,000 | $ | 2,196,000 | ||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Interest expense on mortgage loan payables (a) | $ | 10,429,000 | $ | 9,783,000 | $ | 3,358,000 | ||||||
Amortization of deferred financing fees - mortgage loan payables (a) | 231,000 | 173,000 | 36,000 | |||||||||
Amortization of debt discount | 136,000 | 136,000 | 47,000 | |||||||||
Interest expense on the line of credit (b) | — | — | 377,000 | |||||||||
Amortization of deferred financing fees - line of credit (c) | — | 82,000 | 178,000 | |||||||||
Write-off of deferred financing fees - line of credit (c) | — | 243,000 | — | |||||||||
Unused and annual fees on line of credit | — | — | 128,000 | |||||||||
Interest expense on the line of credit from our general partner (b) | 124,000 | 714,000 | 39,000 | |||||||||
Amortization of deferred financing fees - line of credit from our general partner (c) | 88,000 | 256,000 | 19,000 | |||||||||
Interest expense on unsecured note payables to affiliate (d) | 544,000 | 220,000 | 204,000 | |||||||||
Total interest expense | $ | 11,552,000 | $ | 11,607,000 | $ | 4,386,000 | ||||||
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Years Ended December 31, | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Ordinary income | $ | — | — | % | $ | — | — | % | $ | — | — | % | ||||||||||||
Capital gain | — | — | — | — | — | — | ||||||||||||||||||
Return of capital | 0.63 | 100 | 0.70 | 100 | 0.68 | 100 | ||||||||||||||||||
$ | 0.63 | 100 | % | $ | 0.70 | 100 | % | $ | 0.68 | 100 | % | |||||||||||||
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Interest | Maturity | ||||||||||||||||
Property | Rate | Date | September 30, 2010 | December 31, 2009 | |||||||||||||
Fixed Rate Debt: | |||||||||||||||||
Hidden Lake Apartment Homes | 5.34 | % | 01/11/17 | $ | 19,218,000 | $ | 19,218,000 | ||||||||||
Walker Ranch Apartment Homes | 5.36 | % | 05/11/17 | 20,000,000 | 20,000,000 | ||||||||||||
Residences at Braemar | 5.72 | % | 06/01/15 | 9,231,000 | 9,355,000 | ||||||||||||
Park at Northgate | 5.94 | % | 08/01/17 | 10,295,000 | 10,295,000 | ||||||||||||
Baypoint Resort | 5.94 | % | 08/01/17 | 21,612,000 | 21,612,000 | ||||||||||||
Towne Crossing Apartments | 5.04 | % | 11/01/14 | 14,588,000 | 14,789,000 | ||||||||||||
Villas of El Dorado | 5.68 | % | 12/01/16 | 13,600,000 | 13,600,000 | ||||||||||||
The Heights at Olde Towne | 5.79 | % | 01/01/18 | 10,475,000 | 10,475,000 | ||||||||||||
The Myrtles at Olde Towne | 5.79 | % | 01/01/18 | 20,100,000 | 20,100,000 | ||||||||||||
Arboleda Apartments | 5.36 | % | 04/01/15 | 17,559,000 | 17,651,000 | ||||||||||||
Bella Ruscello Luxury Apartment Homes | 5.53 | % | 04/01/20 | 13,233,000 | — | ||||||||||||
Mission Rock Ridge Apartmenets | 4.20 | % | 10/01/20 | 13,900,000 | — | ||||||||||||
183,811,000 | 157,095,000 | ||||||||||||||||
Variable Rate Debt: | |||||||||||||||||
Creekside Crossing | 2.51 | % | * | 07/01/15 | 17,000,000 | 17,000,000 | |||||||||||
Kedron Village | 2.53 | % | * | 07/01/15 | 20,000,000 | 20,000,000 | |||||||||||
Canyon Ridge Apartments | 2.56 | % | * | 10/01/15 | 24,000,000 | 24,000,000 | |||||||||||
61,000,000 | 61,000,000 | ||||||||||||||||
Total fixed and variable rate debt | 244,811,000 | 218,095,000 | |||||||||||||||
Less: discount | (560,000 | ) | (661,000 | ) | |||||||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 217,434,000 | |||||||||||||
* | Represents the per annum interest rate in effect as of September 30, 2010. In addition, pursuant to the terms of the related loan documents, the maximum variable interest rate allowable is capped at a rate ranging from 6.50% to 6.75% per annum. |
Year | Amount | |||
2010 | $ | 213,000 | ||
2011 | $ | 875,000 | ||
2012 | $ | 953,000 | ||
2013 | $ | 1,571,000 | ||
2014 | $ | 15,380,000 | ||
Thereafter | $ | 225,819,000 |
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Payments Due by Period | ||||||||||||||||||||
Less than 1 Year | 1-3 Years | 4-5 Years | More than 5 Years | |||||||||||||||||
(2010) | (2011-2012) | (2013-2014) | (After 2014) | Total | ||||||||||||||||
Principal payments — fixed rate debt | $ | 213,000 | $ | 9,578,000 | $ | 16,741,000 | $ | 165,029,000 | $ | 191,561,000 | ||||||||||
Interest payments — fixed rate debt | 2,481,000 | 20,736,000 | 19,563,000 | 22,459,000 | 65,239,000 | |||||||||||||||
Principal payments — variable rate debt | — | — | 210,000 | 60,790,000 | 61,000,000 | |||||||||||||||
Interest payments — variable rate debt (based on rates in effect as of September 30, 2010) | 1,181,000 | 3,140,000 | 3,133,000 | 1,062,000 | 8,516,000 | |||||||||||||||
Total | $ | 3,875,000 | $ | 33,454,000 | $ | 39,647,000 | $ | 249,340,000 | $ | 326,316,000 | ||||||||||
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Nine Months Ended September 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | |||||
Add: | ||||||||||||||||||||
Depreciation and amortization — consolidated properties | 9,367,000 | 8,924,000 | 11,854,000 | 11,720,000 | 5,385,000 | |||||||||||||||
FFO | $ | 1,977,000 | $ | 4,295,000 | $ | 6,135,000 | $ | (1,107,000 | ) | $ | (194,000 | ) | ||||||||
Add: | ||||||||||||||||||||
Mezzanine interest expense | 286,000 | 524,000 | 668,000 | 934,000 | 620,000 | |||||||||||||||
Acquisition related expenses | 3,606,000 | 12,000 | 12,000 | 909,000 | 187,000 | |||||||||||||||
Amortization of debt discount | 101,000 | 102,000 | 136,000 | 136,000 | 47,000 | |||||||||||||||
MFFO | $ | 5,970,000 | $ | 4,933,000 | $ | 6,951,000 | $ | 872,000 | $ | 660,000 | ||||||||||
Weighted average partnership unit outstanding — basic and diluted | 18,022,970 | 16,040,651 | 16,227,024 | 12,322,132 | 5,064,042 | |||||||||||||||
FFO per partnerhship unit — basic and diluted | $ | 0.11 | $ | 0.27 | $ | 0.38 | $ | (0.09 | ) | $ | (0.04 | ) | ||||||||
MFFO per partnership unit — basic and diluted | $ | 0.33 | $ | 0.31 | $ | 0.43 | $ | 0.07 | $ | 0.13 | ||||||||||
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Nine Months Ended September 30, | Year Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | |||||
Add: | ||||||||||||||||||||
General and administrative | 1,082,000 | 1,311,000 | 1,647,000 | 4,445,000 | 2,196,000 | |||||||||||||||
Acquisition related expenses | 3,606,000 | 12,000 | 12,000 | 909,000 | 187,000 | |||||||||||||||
Depreciation and amortization | 9,367,000 | 8,924,000 | 11,854,000 | 11,720,000 | 5,385,000 | |||||||||||||||
Interest expense | 8,740,000 | 8,688,000 | 11,552,000 | 11,607,000 | 4,386,000 | |||||||||||||||
Less: | ||||||||||||||||||||
Interest and dividend income | (12,000 | ) | (1,000 | ) | (3,000 | ) | (22,000 | ) | (91,000 | ) | ||||||||||
Other income, net | — | — | — | — | (2,000 | ) | ||||||||||||||
Net operating income | $ | 15,393,000 | $ | 14,305,000 | $ | 19,343,000 | $ | 15,832,000 | $ | 6,482,000 | ||||||||||
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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Expected Maturity Date | ||||||||||||||||||||||||||||||||
2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | Total | Fair Value | |||||||||||||||||||||||||
Fixed rate debt - principal payments | $ | 213,000 | $ | 875,000 | $ | 8,703,000 | $ | 1,541,000 | $ | 15,200,000 | $ | 165,029,000 | $ | 191,561,000 | $ | * | ||||||||||||||||
Weighted average interest rate on maturing debt | 5.36 | % | 5.36 | % | 4.59 | % | 5.28 | % | 5.07 | % | 5.51 | % | 5.43 | % | — | |||||||||||||||||
Variable rate debt - principal payments | $ | — | $ | — | $ | — | $ | 30,000 | $ | 180,000 | $ | 60,790,000 | $ | 61,000,000 | $ | 56,724,000 | ||||||||||||||||
Weighted average interest rate on maturing debt (based on rates in effect as of September 30, 2010) | — | % | — | % | — | % | 2.56 | % | 2.56 | % | 2.54 | % | 2.54 | % | — |
* | The estimated fair value of our fixed rate mortgage loan payables was $200,935,000 as of September 30, 2010. The estimated fair value of the $7,750,000 principal amount outstanding under the unsecured note payable to affiliate as of September 30, 2010 is not determinable due to the related party nature of the note. |
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Approximate | Average | |||||||||||||||||||||||||
Rentable | Unit | Average | 2009 | |||||||||||||||||||||||
Year | Number | Area (Sq. | Size (Sq. | Physical | Rent Per | Property | ||||||||||||||||||||
Property Name | Location | Built | of Units | Ft.)(1) | Ft.) | Occupancy | Unit(1) | Taxes | ||||||||||||||||||
Mission Brentwood | Brentwood, TN | 1989 | 380 | 299,008 | 843 | 95.6 | % | $ | 694 | $ | 347,726 | |||||||||||||||
Mission Briley Parkway | Nashville, TN | 1985 | 360 | 318,524 | 955 | 95.5 | % | $ | 611 | $ | 270,382 | |||||||||||||||
Mission Barton Creek | Austin, TX | 1980 | 298 | 225,336 | 756 | 99.0 | % | $ | 852 | $ | 556,780 | |||||||||||||||
Mission Battleground Park | Greensboro, NC | 1990 | 240 | 229,108 | 955 | 96.0 | % | $ | 627 | $ | 163,432 | |||||||||||||||
Mission Capital Crossing | Raleigh, NC | 1983 | 356 | 360,996 | 1,014 | 93.6 | % | $ | 638 | $ | 177,382 | |||||||||||||||
Mission Tanglewood | Austin, TX | 1986 | 364 | 253,404 | 696 | 96.8 | % | $ | 618 | $ | 465,035 | |||||||||||||||
Mission Mayfield Downs | Grand Prairie, TX | 2002 | 258 | 216,006 | 901 | 97.0 | % | $ | 711 | $ | 375,448 | |||||||||||||||
Mission Preston Wood | Richardson, TX | 1979 | 194 | 192,191 | 991 | 95.6 | % | $ | 672 | $ | 179,996 | |||||||||||||||
1999 2000 |
(1) | As of September 30, 2010. | |
(2) | This property was developed and constructed in three stages. |
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||
Property | Avg | Eff. | Eff. | Eff. | Eff. | Eff. | ||||||||||||||||||||||||||||||||||||||||||
Name | Units | SF | Occ | Rent | Occ | Rent | Occ | Rent | Occ | Rent | Occ | Rent | ||||||||||||||||||||||||||||||||||||
Mission Barton Creek | 298 | 756 | 99.0 | % | $ | 852 | 97.0 | % | $ | 924 | 91.3 | % | $ | 1,055 | — | — | — | — | ||||||||||||||||||||||||||||||
Mission Battleground Park | 240 | 955 | 96.0 | % | $ | 627 | 95.4 | % | $ | 635 | 92.5 | % | $ | 685 | 93.3 | % | $ | 724 | 95.7 | % | $ | 747 |
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2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||
Property | Avg | Eff. | Eff. | Eff. | Eff. | Eff. | ||||||||||||||||||||||||||||||||||||||||||
Name | Units | SF | Occ | Rent | Occ | Rent | Occ | Rent | Occ | Rent | Occ | Rent | ||||||||||||||||||||||||||||||||||||
Mission Brentwood | 380 | 843 | 95.6% | $ | 694 | 94.7% | $ | 699 | 95.5% | $ | 765 | 96.6% | $ | 762 | 93.2% | $ | 726 | |||||||||||||||||||||||||||||||
Mission Briley Parkway(1) | 360 | 955 | 95.5% | $ | 611 | 94.7% | $ | 626 | 96.1% | $ | 663 | 93.1% | $ | 669 | 93.2% | $ | 633 | |||||||||||||||||||||||||||||||
Mission Capital Crossing | 356 | 1,014 | 93.6% | $ | 638 | 94.9% | $ | 636 | 93.8% | $ | 696 | — | — | — | — | |||||||||||||||||||||||||||||||||
Mission Mayfield Downs | 258 | 837 | 97.0% | $ | 711 | 95.0% | $ | 731 | 95.0% | $ | 751 | 96.5% | $ | 818 | — | — | ||||||||||||||||||||||||||||||||
Mission Preston Wood | 194 | 991 | 95.6% | $ | 672 | 94.6% | $ | 688 | 95.9% | $ | 730 | 93.8% | $ | 796 | 96.4% | $ | 808 | |||||||||||||||||||||||||||||||
Mission Tanglewood | 364 | 696 | 96.8% | $ | 618 | 91.8% | $ | 655 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Total | 2,450 | 874 | 96.1% | $ | 675 | 94.7% | $ | 696 | 94.3% | $ | 763 | 94.8% | $ | 747 | 94.2% | $ | 715 |
(1) | This property is subject to a ground lease. |
• | we believe all of the properties are adequately covered by insurance and are suitable for their intended purposes; | ||
• | we have no plans for any material renovations, improvements or development with respect to any of the properties, except in accordance with planned budgets; and | ||
• | each of the properties are located in markets where we are subject to competition for attracting new tenants and retaining current tenants. |
Percent of Total | ||||||||||||||||||||||||
By | ||||||||||||||||||||||||
Number of | Number of | Purchase | By | Purchase | ||||||||||||||||||||
State | Properties | Units | Price | State | By Units | Price | ||||||||||||||||||
North Carolina | 2 | 596 | $ | 33,488,000 | 25% | 28.80% | 21.32% | |||||||||||||||||
Tennessee | 2 | 360 | 49,980,000 | 25 | 17.39 | 31.83 | ||||||||||||||||||
Texas | 4 | 1,114 | 73,551,000 | 50 | 53.81 | 46.85 | ||||||||||||||||||
Total | 8 | 2,070 | $ | 157,019,000 | 100% | 100% | 100% |
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Assumed | ||||||||||||||||||||||
Purchase | Equity Value | Mortgage | Interest | Maturity | ||||||||||||||||||
Property Name | Location | Price(2) | of the OP Units(3) | Indebtedness(1) | Rate(1) | Date | ||||||||||||||||
Mission Brentwood | Brentwood, TN | $ | 27,857,000 | $ | 7,857,000 | $ | 20,000,000 | 5.8875 | % | 11/1/2016 | ||||||||||||
Mission Briley Parkway | Nashville, TN | $ | 22,123,000 | $ | 7,573,000 | $ | 14,550,000 | 6.326 | % | 9/1/2016 | ||||||||||||
Mission Barton Creek | Austin, TX | $ | 25,929,000 | (5) | $ | 4,729,000 | (4) | $ | 21,200,000 | 3.06 | %(6) | 11/1/2015 | ||||||||||
Mission Battleground Park | Greensboro, NC | $ | 12,821,000 | $ | 1,621,000 | $ | 11,200,000 | 6.322 | % | 8/1/2016 | ||||||||||||
Mission Capital Crossing | Raleigh, NC | $ | 20,667,000 | $ | 2,967,000 | $ | 17,700,000 | 5.93 | % | 2/1/2018 | ||||||||||||
Mission Tanglewood | Austin, TX | $ | 19,862,000 | $ | 4,587,000 | $ | 15,275,000 | 6.45 | %(6) | 2/1/2019 | ||||||||||||
Mission Mayfield Downs | Grand Prairie, TX | $ | 18,027,000 | $ | 1,792,000 | $ | 16,235,000 | 5.51 | %(7) | 6/1/2017 | ||||||||||||
12.75 | %(8) | 6/1/2017 | ||||||||||||||||||||
Mission Preston Wood | Richardson, TX | $ | 9,733,000 | $ | 1,333,000 | $ | 8,400,000 | 5.243 | % | 10/1/2015 |
(1) | As of September 30, 2010. | |
(2) | Subject to certain purchase price adjustments as provided in the applicable definitive purchase agreements. | |
(3) | Based upon an assumed value of $9.00 per OP Unit. | |
(4) | In addition, we will be paying an amount not to exceed $757,000 in the OP Units for a capital improvement escrow reserve account. | |
(5) | Represents the variable interest rate per annum in effect as of September 30, 2010. Adjustable at the money market yield for Freddie Mac Reference Bill Securities with 30-day maturities from the most recent auction of Reference Bills conducted by Freddie Mac unless Freddie Mac has not conducted an auction of such bills within 60-days prior to the applicable interest | |
(6) | Fixed interest rate per annum through November 2010. Adjustable after November 2010 at the money market yield for Freddie Mac Reference Bill Securities with 30-day maturities from the most recent auction of Reference Bills conducted by Freddie Mac unless Freddie Mac has not conducted an auction of such bills within 60-days prior to the applicable interest adjustment period (i.e., each month), then a LIBOR Index Rate plus 3.0%. | |
(7) | Note A, which had an original principal balance of $15,250,000. | |
(8) | Note B, which had an original principal balance of $985,000. |
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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• | stable cash flows available for distribution to our stockholders; | ||
• | preservation, protection and return of capital; and | ||
• | growth of income and principal without taking undue risk. |
• | invest in income-producing real estate and real estate-related investments in a manner which permits the Apartment REIT to continue to qualify as a REIT for federal income tax purposes; and | ||
• | realize capital appreciation upon the ultimate sale of our properties. |
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• | We intend to purchase apartment communities at favorable prices and obtain immediate income from tenant rents, with the potential for appreciation in value over time. | ||
• | We intend to preserve capital through selective acquisitions and professional management, whereby we intend to increase rental rates, maintain high economic occupancy rates, reduce tenant turnover, make value-enhancing and income-producing capital improvements, where appropriate, and control operating costs and capital expenditures. | ||
• | We seek to acquire apartment communities in growth markets, at attractive prices relative to replacement cost, that provide the opportunity to improve operating performance through professional management, marketing and selective leasing and renovation programs. |
• | geographic location and type; | ||
• | construction quality and condition; | ||
• | potential for capital appreciation; |
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• | the general credit quality of current and potential tenants; | ||
• | the potential for rent increases; | ||
• | the interest rate environment; | ||
• | potential for economic growth in the tax and regulatory environment of the community in which the property is located; | ||
• | potential for expanding the physical layout of the property; | ||
• | occupancy and demand by tenants for properties of a similar type in the same geographic vicinity; | ||
• | prospects for liquidity through sale, financing or refinancing of the property; | ||
• | competition from existing properties and the potential for the construction of new properties in the area; and | ||
• | treatment under applicable federal, state and local tax and other laws and regulations. |
• | changes in general economic or local conditions; | ||
• | changes in supply of or demand for similar competing properties in an area; | ||
• | changes in interest rates and availability of permanent mortgage funds, which may render the sale of a property difficult or unattractive; | ||
• | changes in tax, real estate, environmental and zoning laws; | ||
• | periods of high interest rates and tight money supply which may make the sale of properties more difficult; | ||
• | tenant turnover; and | ||
• | general overbuilding or excess supply in the market area. |
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• | Seniors—The 65+ age group who are the elders of the baby boomers. | ||
• | Boomers—Born between 1946 and 1964, the American Hospital Association and First Consulting Group state that this group controls approximately 75.0% of the United States’ assets. | ||
• | Echo boomers—Born between 1982 and 1994, this group represents the children of the boomers. |
• | Seniors—Older retirees may prefer the ease of living associated with renting such as senior housing and small apartments, instead of dealing with the expenses and burden of home ownership. | ||
• | Boomers— This aging population, currently the largest, controls the largest percent of U.S. financial assets according to the American Hospital Association and First Consulting Group. As their children reach adulthood and move out or go off to college, they may be more likely to consider renting smaller, luxury apartments or condominiums. | ||
• | Echo Boomers— This group, most likely to rent apartments, is entering their household formation years which is helping to fuel new demand for apartments, according to the Joint Center for Housing Studies of Harvard University, or JCHS. With approximately 4,000,000 echo boomers turning 21 every |
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year, in fast growing areas, the existing housing stock will be unable to accommodate the rising number of young households according to a study by the JCHS. |
• | there are no duplicate property management or other fees; | ||
• | the investment of each entity is on substantially the same terms and conditions as those received by other joint venturers; and | ||
• | we have a right of first refusal to acquire the property if the other joint venturers wish to sell their interests in the property. |
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• | we believe the value of a property might decline substantially; | ||
• | an opportunity has arisen to improve other properties; | ||
• | we can increase cash flows through the disposition of the property; or | ||
• | we believe the sale of the property is in our best interest. |
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• | make investments in unimproved property in excess of 10.0% of its total assets (as used herein, “unimproved property” means any investment with the following characteristics: (a) an equity interest in real property which was not acquired for the purpose of producing rental or other operating income; (b) has no development or construction in process on such land; and (c) no development or construction on such land is planned to commence within one year); | ||
• | invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with its ordinary business of investing in real estate assets; | ||
• | invest in real estate contracts of sale, otherwise known as land sale contracts, unless such contracts of sale are in recordable form and appropriately recorded in the chain of title; | ||
• | make or invest in mortgage loans unless an appraisal is obtained concerning the underlying property except for those mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of the Apartment REIT’s independent directors determines, and in all cases in |
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which the transaction is with any of the Apartment REIT’s directors, our advisor or any of their respective affiliates, such appraisal shall be obtained from an independent appraiser. The Apartment REIT will maintain such appraisal in its records for at least five years and it will be available for inspection and duplication. The Apartment REIT will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage; | |||
• | make or invest in mortgage loans on any one property if the aggregate amount of all mortgage loans on such property, including its loan, would exceed an amount equal to 85.0% of the appraised value of such property as determined by appraisal unless substantial justification exists for exceeding such limit because of the presence of other underwriting criteria; | ||
• | make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of its directors, our advisor, the Apartment REIT’s sponsor or any of the Apartment REIT’s affiliates; | ||
• | issue equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of the Apartment REIT’s share repurchase plan); | ||
• | issue debt securities unless the historical debt service coverage (in the most recently completed fiscal year) as adjusted for known changes is anticipated to be sufficient to properly service that higher level of debt; | ||
• | issue equity securities on a deferred payment basis or other similar arrangement; | ||
• | issue options or warrants to purchase shares of its stock to our advisor, any of its directors, its sponsor or any of their respective affiliates except on the same terms, if any, as the options or warrants are sold to the general public; options or warrants may be issued to persons other than the Apartment REIT’s directors, our advisor, the Apartment REIT’s sponsor or any of their respective affiliates, but not at exercise prices less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of the Apartment REIT’s independent directors has a market value less than the value of such options or warrants on the date of grant; | ||
• | engage in investment activities that would cause it to be classified as an investment company under the Investment Company Act; | ||
• | engage in underwriting or the agency distribution of securities issued by others; or | ||
• | make any investment that is inconsistent with its objectives of remaining qualified as a REIT unless and until the Board determines, in its sole discretion, that REIT qualification is not in the Apartment REIT’s best interest. |
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• | except for differences attributable to adjustable rate loans, equal periodic payments on a schedule that would be sufficient to fully amortize the loan over a 20- to 40-year period; | ||
• | payments of interest only for a period of not greater than ten years with the remaining balance payable in equal periodic payments on a schedule that would fully amortize the loan over a 20- to 30-year period; or | ||
• | payment of a portion of the current stated interest and deferral of the remaining interest for a period not greater than five years, with the remaining principal and interest payable in equal periodic payments on a schedule that would fully amortize the loan over a 20- to 35-year period. |
• | positioning the overall portfolio to achieve an optimal mix of real estate and securities investments; | ||
• | diversification benefits relative to the rest of the securities assets within our portfolio; | ||
• | fundamental securities analysis; | ||
• | quality and sustainability of underlying property cash flows; | ||
• | broad assessment of macroeconomic data and regional property level supply and demand dynamics; | ||
• | potential for delivering high current income and attractive risk-adjusted total returns; and | ||
• | additional factors considered important to meeting our investment objectives. |
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• | distributions of beneficial interests in a liquidating trust established for the dissolution of the Apartment REIT and the liquidation of our assets in accordance with the terms of the MGCL; or | ||
• | distributions of property which meet all of the following conditions: |
• | the Board offers each stockholder the election of receiving in-kind property distributions; and | ||
• | the Board advises each stockholder of the risks associated with direct ownership of the property; | ||
• | the Board distributes in-kind property only to those stockholders who accept the directors’ offer. |
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Cash Distributions | ||||
Declared Per Share of | ||||
Common Stock | ||||
2010 | ||||
Third quarter | $ | 0.15 | ||
Second quarter | $ | 0.15 | ||
First quarter | $ | 0.15 |
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Cash Distributions | ||||
Declared Per Share of | ||||
Common Stock | ||||
2009 | ||||
Fourth quarter | $ | 0.15 | ||
Third quarter | $ | 0.15 | ||
Second quarter | $ | 0.15 | ||
First quarter | $ | 0.17 | ||
2008 | ||||
Fourth quarter | $ | 0.18 | ||
Third quarter | $ | 0.18 | ||
Second quarter | $ | 0.18 | ||
First quarter | $ | 0.18 | ||
2007 | ||||
Fourth quarter | $ | 0.18 | ||
Third quarter | $ | 0.18 | ||
Second quarter | $ | 0.18 | ||
First quarter | $ | 0.16 | ||
2006 | ||||
Fourth quarter | $ | 0.14 | ||
Third quarter(1) | $ | 0.00 |
(1) | July 27, 2006 (commencement of operations through September 30, 2006). |
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Contract | ||||||||||||||||||||||||||||||||
Ownership | Type of | Number | Purchase | Purchase | Mortgage | Interest | Maturity | Property | ||||||||||||||||||||||||
Property Name | Interest | Property | of Units | Occupancy | Date | Price | Debt(1) | Rate(1) | Date | Taxes(3) | Location | |||||||||||||||||||||
Walker Ranch Apartment Homes | 100% | apartment | 325 | 96.0% | 10/31/2006 | $ | 30,750,000 | $ | 20,000,000 | 5.36% | 5/11/2017 | $ | 814,000 | San Antonio, TX | ||||||||||||||||||
Hidden Lake Apartment Homes | 100% | apartment | 380 | 96.8% | 12/28/2006 | $ | 32,030,000 | $ | 19,218,000 | 5.34% | 1/11/2017 | $ | 742,000 | San Antonio, TX | ||||||||||||||||||
Park at Northgate | 100% | apartment | 248 | 97.2% | 6/12/2007 | $ | 16,600,000 | $ | 10,295,000 | 5.94% | 8/1/2017 | $ | 529,000 | Spring, TX | ||||||||||||||||||
Residences at Braemar | 100% | apartment | 160 | 90.6% | 6/29/2007 | $ | 15,000,000 | $ | 9,231,000 | 5.72% | 6/1/2015 | $ | 132,000 | Charlotte, NC | ||||||||||||||||||
Baypoint Resort | 100% | apartment | 350 | 93.1% | 8/2/2007 | $ | 33,250,000 | $ | 21,612,000 | 5.94% | 8/1/2017 | $ | 538,000 | Corpus Christi, TX | ||||||||||||||||||
Towne Crossing Apartments | 100% | apartment | 268 | 98.9% | 8/29/2007 | $ | 21,600,000 | $ | 14,588,000 | 5.04% | 11/1/2014 | $ | 459,000 | Mansfield, TX | ||||||||||||||||||
Villas of El Dorado | 100% | apartment | 248 | 95.6% | 11/2/2007 | $ | 18,000,000 | $ | 13,600,000 | 5.68% | 12/1/2016 | $ | 342,000 | McKinney, TX | ||||||||||||||||||
The Heights at Olde Towne | 100% | apartment | 148 | 91.2% | 12/21/2007 | $ | 17,000,000 | $ | 10,475,000 | 5.79% | 1/1/2018 | $ | 204,000 | Portsmouth, VA | ||||||||||||||||||
The Myrtles at Olde Towne | 100% | apartment | 246 | 91.9% | 12/21/2007 | $ | 36,000,000 | $ | 20,100,000 | 5.79% | 1/1/2018 | $ | 375,000 | Portsmouth, VA | ||||||||||||||||||
Arboleda Apartments | 100% | apartment | 312 | 94.9% | 3/31/2008 | $ | 29,250,000 | $ | 17,559,000 | 5.36% | 4/1/2015 | $ | 553,000 | Cedar Park, TX | ||||||||||||||||||
Creekside Crossing | 100% | apartment | 280 | 93.9% | 6/26/2008 | $ | 25,400,000 | $ | 17,000,000 | 2.51% (2) | 7/1/2015 | $ | 357,000 | Lithonia, GA | ||||||||||||||||||
Kedron Village | 100% | apartment | 216 | 98.6% | 6/27/2008 | $ | 29,600,000 | $ | 20,000,000 | 2.53% (2) | 7/1/2015 | $ | 187,000 | Peachtree City, GA | ||||||||||||||||||
Canyon Ridge Apartments | 100% | apartment | 350 | 95.4% | 9/15/2008 | $ | 36,050,000 | $ | 24,000,000 | 2.56% (2) | 10/1/2015 | $ | 422,000 | Hermitage, TN | ||||||||||||||||||
Bella Ruscello Luxury Apartment Homes | 100% | apartment | 216 | 93.5% | 3/24/2010 | $ | 17,400,000 | $ | 13,233,000 | 5.53% | 4/1/2020 | $ | 353,000 | Duncanville, TX | ||||||||||||||||||
Mission Rock Ridge | 100% | apartment | 226 | 97.8% | 9/30/2010 | $ | 19,857,000 | $ | 13,900,000 | 4.20% | 10/1/2020 | $ | 375,000 | Arlington, TX |
(1) | As of September 30, 2010, we had 12 fixed rate and three variable rate mortgage loans with effective rates ranging from 2.51% to 5.94% per annum and a weighted average effective interest rate of 4.74% per annum. Most of the mortgage loan payables may be prepaid in whole but not in part, subject to prepayment premiums. In the event of prepayment, the amount of the prepayment premium will be paid according to the terms of the applicable loan documents. | |
(2) | Represents the per annum variable interest rate in effect as of September 30, 2010. In addition, pursuant to the terms of the related loan documents, the maximum variable interest rate allowable is capped at a rate ranging from 6.50% to 6.75% per annum. | |
(3) | Represents the real estate taxes on the property for 2009. |
Percent of Total | ||||||||||||||||||||||||
Aggregate | By Aggregate | |||||||||||||||||||||||
Number of | Number of | Purchase | Purchase | |||||||||||||||||||||
State | Properties | Units | Price | By State | By Units | Price | ||||||||||||||||||
Texas | 9 | 2,573 | $ | 218,737,000 | 60.0 | % | 64.8 | % | 57.9% | |||||||||||||||
Georgia | 2 | 496 | 55,000,000 | 13.3 | 12.5 | 14.6 | ||||||||||||||||||
Virginia | 2 | 394 | 53,000,000 | 13.3 | 9.9 | 14.0 | ||||||||||||||||||
Tennessee | 1 | 350 | 36,050,000 | 6.7 | 8.8 | 9.5 | ||||||||||||||||||
North Carolina | 1 | 160 | 15,000,000 | 6.7 | 4.0 | 4.0 | ||||||||||||||||||
Total | 15 | 3,973 | $ | 377,787,000 | 100 | % | 100 | % | 100% | |||||||||||||||
2006(1) | 2007(1) | 2008(1) | 2009(1) | 2010(1) | ||||||||||||||||
Average Effective Monthly Rent per Unit | $ | 889.38 | $ | 891.01 | $ | 934.06 | $ | 882.29 | $ | 840.78 | ||||||||||
Occupancy Rate | 97.7% | 91.5% | 90.3% | 93.9% | 95.2% |
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(1) | Based on leases in effect as of December 31, 2006, 2007, 2008, and 2009, and September 30, 2010. |
• | we believe all of our properties are adequately covered by insurance and are suitable for their intended purposes; | ||
• | we have no plans for any material renovations, improvements or development with respect to any of our properties, except in accordance with planned budgets; and | ||
• | our properties are located in markets where we are subject to competition for attracting new tenants and retaining current tenants. |
Default | ||||||||||||||||
Date of Note | Amount | Maturity Date | Rate | Interest Rate | ||||||||||||
06/27/08 | $ | 3,700,000 | 05/10/09 | 5.26% | 7.26% | |||||||||||
09/15/08 | 5,400,000 | 03/15/09 | 4.99% | 6.99% |
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Property Name | Depreciable Tax Basis | |||
Walker Ranch Apartment Homes | $ | 31,855,000 | ||
Hidden Lake Apartment Homes | 33,333,000 | |||
Park at Northgate | 17,317,000 | |||
Residences at Braemar | 15,625,000 | |||
Baypoint Resort | 35,025,000 | |||
Towne Crossing Apartments | 21,630,000 | |||
Villas of El Dorado | 19,063,000 | |||
The Heights at Olde Towne | 17,880,000 | |||
The Myrtles at Olde Towne | 37,460,000 | |||
Arboleda Apartments | 30,313,000 | |||
Creekside Crossing | 26,349,000 | |||
Kedron Village | 30,704,000 | |||
Canyon Ridge Apartments | 37,478,000 |
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TRANSFER AGENT SERVICES AGREEMENT
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• | approving and overseeing our overall investment strategy, which will consist of elements such as: (1) allocation of percentages of capital to be invested in real estate and real estate-related investments, (2) allocation of percentages of capital to be invested in apartment communities and other income-producing commercial properties, (3) diversification strategies, (4) investment selection criteria and (5) investment disposition strategies; | ||
• | approving all real estate acquisitions, developments and dispositions, including the financing of such acquisitions and developments; | ||
• | approving specific discretionary limits and authority to be granted to our advisor in connection with the purchase and disposition of real estate-related investments that fit within the asset allocation framework; |
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• | approving and overseeing our debt financing strategy; | ||
• | approving and monitoring the performance of our advisor; | ||
• | approving joint ventures, limited partnerships and other such relationships with third parties; | ||
• | determining our distribution strategy and authorizing distributions from time to time; | ||
• | approving amounts available for repurchases of shares of the Apartment REIT’s common stock; and | ||
• | approving a liquidity event, such as the listing of the shares of the Apartment REIT’s common stock on a national securities exchange, the liquidation of our portfolio, the Apartment REIT’s merger with another company or similar transaction providing liquidity to the Apartment REIT’s stockholders. |
• | the amount of the advisory fee in relation to the size, composition and performance of our portfolio; | ||
• | the success of our advisor in generating opportunities that meet our investment objectives; | ||
• | the fees charged to similar REITs and to investors other than REITs by advisors performing similar services; | ||
• | additional revenues realized by our advisor and any affiliate through their relationship with us, including acquisition fees, servicing and other fees, whether paid by us or by others with whom we do business; | ||
• | the quality and extent of the service and advice furnished by our advisor; | ||
• | the performance of our portfolio, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and | ||
• | the quality of our portfolio relative to the investments generated by our advisor for its own account or for other clients. |
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Name | Age* | Position | ||||
Stanley J. (“Jay”) Olander, Jr. | 56 | Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors | ||||
Gustav G. Remppies | 50 | President and Secretary | ||||
David L. Carneal | 46 | Executive Vice President and Chief Operating Officer | ||||
Andrea R. Biller | 61 | Director | ||||
Glenn W. Bunting, Jr. | 66 | Independent Director | ||||
Robert A. Gary, IV | 57 | Independent Director | ||||
Richard S. Johnson | 60 | Independent Director |
* | As of November 15, 2010. |
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• | makes recommendations to the Board concerning the engagement of independent public accountants; | ||
• | reviews the plans and results of the audit engagement with the independent public accountants; | ||
• | approves professional services provided by, and the independence of, the independent public accountants; | ||
• | considers the range of audit and non-audit fees; and | ||
• | consults with the independent public accountants regarding the adequacy of the Apartment REIT’s internal controls. |
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• | Annual Retainer.The independent directors receive an annual retainer of $15,000. | ||
• | Meeting Fees.The independent directors receive $1,000 for each Board meeting and executive committee meeting attended in person or by telephone, and $500 for each committee meeting, other than an executive committee meeting, attended in person or by telephone, and an additional $2,000 to the audit committee chairman for each audit committee meeting attended in person or by telephone. If a Board meeting is held on the same day as a committee meeting, an additional fee will not be paid for attending the committee meeting, except to the audit committee chairman. | ||
• | Equity Compensation.Upon initial election to the Board, each independent director receives 1,000 shares of restricted the Apartment REIT’s common stock, and an additional 1,000 shares of restricted the Apartment REIT’s common stock upon his or her subsequent election each year. The shares of restricted common stock vest as to 20.0% of the shares on the date of grant and on each anniversary thereafter over four years from the date of grant. | ||
• | Other Compensation.The Apartment REIT reimburses directors for reasonable out-of-pocket expenses incurred in connection with attendance at meetings, including committee meetings, of the Board. The independent directors do not receive other benefits from the Apartment REIT. |
Change in | ||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||
Fees Earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
or Paid | Stock | Option | Incentive Plan | Compensations | All Other | |||||||||||||||||||||||
in Cash | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||
Name | ($)(1) | ($)(2) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
Stanley J. Olander, Jr.(3) | — | — | — | — | — | — | — | |||||||||||||||||||||
Andrea R. Biller(3) | — | — | — | — | — | — | — | |||||||||||||||||||||
Glenn W. Bunting | 27,500 | 10,000 | — | — | — | — | 37,500 | |||||||||||||||||||||
Robert A. Gary, IV | 35,000 | 10,000 | — | — | — | — | 45,000 | |||||||||||||||||||||
Richard S. Johnson(4) | 6,500 | 10,000 | — | — | — | — | 16,500 | |||||||||||||||||||||
W. Brand Inlow(4) | 29,500 | 10,000 | — | — | — | — | 39,500 |
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(1) | Consists of the amounts earned described below. |
Basic Annual | ||||||||||
Retainer | Meeting Fees | |||||||||
Director | Role | ($) | ($) | |||||||
Olander | Chairman of the Board | — | — | |||||||
Biller | Director | — | ��� | |||||||
Bunting | Member, Audit Committee | 15,000 | 12,500 | |||||||
Gary | Member, Audit Committee | 15,000 | 20,000 | |||||||
Johnson | Member, Audit Committee | 4,000 | 2,500 | |||||||
Inlow | Member, Audit Committee | 23,000 | 6,500 |
(2) | The amounts in this column represent the aggregate grant date fair value of the awards granted for the year ended December 31, 2009, as determined in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718,Compensation — Stock Compensation,or ASC Topic 718. 800 shares, or $8,000, of Mr. Inlow’s restricted common stock award was forfeited in 2009. In addition, 1,200 shares of restricted common stock awards from prior years were forfeited. |
Number of | Full Grant | |||||||||||
Shares of | Date Fair | |||||||||||
Restricted | Value of | |||||||||||
Director | Grant Date | Common Stock | Award ($) | |||||||||
Olander | — | — | — | |||||||||
Biller | — | — | — | |||||||||
Bunting | 06/26/09 | 1,000 | 10,000 | |||||||||
Gary | 06/26/09 | 1,000 | 10,000 | |||||||||
Johnson | 09/24/09 | 1,000 | 10,000 | |||||||||
Inlow | 06/26/09 | 1,000 | 10,000 |
Number of | ||||
Nonvested | ||||
Shares of | ||||
Restricted | ||||
Director | Common Stock | |||
Olander | — | |||
Biller | — | |||
Bunting | 2,000 | |||
Gary | 2,000 | |||
Johnson | 800 | |||
Inlow | — |
(3) | Mr. Olander and Ms. Biller are not independent directors. | |
(4) | Mr. Inlow resigned as a member of our Board of Directors on September 24, 2009. Mr. Johnson was elected by our Board of Directors to serve as a member of our Board of Directors on September 24, 2009. |
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• | net income; | ||
• | pre-tax income; | ||
• | operating income; | ||
• | cash flows; | ||
• | earnings per share; | ||
• | earnings before interest, taxes, depreciation and/or amortization; | ||
• | return on equity; | ||
• | return on invested capital or assets; | ||
• | FFO; | ||
• | cost reductions or savings; or | ||
• | appreciation in the fair market value of a share of the Apartment REIT’s common stock. |
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Number of | ||||||||
Shares of | ||||||||
Restricted | Weighted Average Grant | |||||||
Common | Date Fair | |||||||
Stock | Value | |||||||
Balance — December 31, 2006 | 2,400 | $ | 10.00 | |||||
Granted | 3,000 | 10.00 | ||||||
Vested | (1,200 | ) | 10.00 | |||||
Forfeited | — | — |
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Balance — December 31, 2007 | 4,200 | 10.00 | ||||||
Granted | 3,000 | 10.00 | ||||||
Vested | (1,800 | ) | 10.00 | |||||
Forfeited | — | — | ||||||
Balance — December 31, 2008 | 5,400 | 10.00 | ||||||
Granted | 4,000 | 10.00 | ||||||
Vested | (2,600 | ) | 10.00 | |||||
Forfeited | (2,000 | ) | 10.00 | |||||
Balance — December 31, 2009 | 4,800 | $ | 10.00 | |||||
Expected to vest — December 31, 2009 | 4,800 | $ | 10.00 | |||||
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Number of Securities | Number of | |||||||||||
to be Issued upon | Weighted Average | Securities | ||||||||||
Exercise of | Exercise Price of | Remaining | ||||||||||
Outstanding Options, | Outstanding Options, | Available for | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Future Issuance | |||||||||
Equity compensation plans approved by security holders(1) | — | — | 1,988,800 | |||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | — | 1,988,800 | ||||||||||
(1) | On July 19, 2006, the Apartment REIT granted an aggregate of 4,000 shares of restricted common stock, as defined in the 2006 Plan, to the Apartment REIT’s independent directors under the 2006 Plan, of which 20.0% vested on the grant date and 20.0% will vest on each of the first four anniversaries of the date of the grant. On each of June 12, 2007, June 25, 2008 and June 23, 2009, in connection with their re-election, we granted an aggregate of 3,000 shares of restricted common stock to our independent directors under the 2006 Plan, which will vest over the same period described above. On September 24, 2009, upon the appointment of a new independent director, Richard S. Johnson, we granted 1,000 shares of restricted common stock to Mr. Johnson under the 2006 Plan, which will vest over the same period described above. In addition, 800 shares and 2,000 shares of restricted common stock were forfeited in November 2006 and September 2009, respectively. Such outstanding shares of restricted common stock are not shown in the chart above as they are deemed outstanding shares of the Apartment REIT’s common stock; however, such grants reduce the number of securities remaining available for future issuance. |
• | an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty; | ||
• | the director or officer actually received an improper personal benefit in money, property or services; or | ||
• | with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful. |
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• | the indemnitee determined, in good faith, that the course of conduct which caused the loss or liability was in the Apartment REIT’s best interest; |
• | the indemnitee was acting on the Apartment REIT’s behalf or performing services for the Apartment REIT; |
• | in the case of affiliated directors, our advisor or its affiliates, the liability or loss was not the result of negligence or misconduct by the party seeking indemnification; and |
• | in the case of the independent directors, the liability or loss was not the result of gross negligence or willful misconduct by the party seeking indemnification. |
• | the proceeding relates to acts or omissions with respect to the performance of duties or services on the Apartment REIT’s behalf; |
• | the indemnitee provides the Apartment REIT with written affirmation of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification; |
• | the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and |
• | the indemnitee provides the Apartment REIT with a written agreement to repay the amount paid or reimbursed, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not comply with the requisite standard of conduct and is not entitled to indemnification. |
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• | there has been a successful adjudication on the merits of each count involving alleged securities law violations; |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or |
• | a court of competent jurisdiction approves a settlement of the claims against the indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in the state in which our securities were offered as to indemnification for violations of securities laws. |
Name | Age* | Position | ||||
Thomas D’Arcy | 50 | Chief Executive Officer, President and Director of Grubb & Ellis; Chairman of Grubb & Ellis Equity Advisors | ||||
Michael J. Rispoli | 38 | Chief Financial Officer and Executive Vice President of Grubb & Ellis; Chief Financial Officer of Grubb & Ellis Equity Advisors | ||||
Matthew A. Engel | 43 | Executive Vice Present of Finance of Grubb & Ellis |
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Name | Age* | Position | ||||
Jacob Van Berkel | 50 | Executive Vice President, Chief Operating Officer and President, Real Estate Services, of Grubb & Ellis | ||||
Mathieu B. Streiff | 36 | General Counsel, Executive Vice President and Secretary of Grubb & Ellis | ||||
Jeffrey T. Hanson | 39 | Executive Vice President, Investment Programs, of Grubb & Ellis; President of Grubb & Ellis Equity Advisors; President and Chief Executive Officer of Triple Net Properties Realty, Inc. | ||||
Richard Arnitz | 46 | Chief Executive Officer and President of Grubb & Ellis Securities |
* | As of November 22, 2010 |
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Name | Age* | Position | ||||
Jeffrey T. Hanson | 39 | Chief Executive Officer | ||||
David L. Carneal | 46 | Executive Vice President and Chief Operating Officer | ||||
Gustav G. Remppies | 50 | President and Chief Investment Officer |
* | As of November 22, 2010. |
• | is responsible for the Apartment REIT’s day-to-day operations; |
• | administers the Apartment REIT’s bookkeeping and accounting functions; |
• | serves as the Apartment REIT’s consultant in connection with strategic decisions to be made by the Board; |
• | manages or causes to be managed the Apartment REIT’s properties and other assets; and |
• | renders other property-level services if the Board requests. |
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• | perform the advisory function for the Apartment REIT; and |
• | justify the compensation provided for in the contract with the Apartment REIT. |
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• | the indemnified person determined, in good faith, that the course of conduct that caused a loss or liability was in the Apartment REIT’s best interest; |
• | the indemnified person was acting on behalf of, or performing services for, the Apartment REIT; |
• | such liability or loss was not the result of negligence or misconduct; and |
• | such indemnification or agreement to hold harmless is recoverable only out of the Apartment REIT’s net assets and not from its stockholders. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Offering Stage Selling Commissions (the dealer manager of the Apartment REIT)(1) | Generally, up to 7.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering (all or a portion of which may be reallowed by a dealer manager to participating broker-dealers). No selling commissions are payable on shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No selling concessions are payable on the OP Units issuable in connection with the proposed acquisition. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Dealer Manager Fee (the dealer manager of the Apartment REIT)(1) | Generally, up to 3.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering (all or a portion of which may be reallowed by a dealer manager to participating broker-dealers). No dealer manager fee is payable on shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No dealer manager fee is payable on the OP Units issuable in connection with the proposed acquisitions. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Other Organizational and Offering Expenses (our advisor or its affiliates)(2) | Up to 1.0% of gross offering proceeds for shares of the Apartment REIT’s common stock sold pursuant to a primary offering. No other organizational and offering expenses will be reimbursed with respect to shares of the Apartment REIT’s common stock sold pursuant to the DRIP. No other organizational and offering expenses will be reimbursed with respect to the OP Units issuable in connection with the proposed acquisitions. | Actual amount depends upon the number of shares of the Apartment REIT’s common stock sold and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
Acquisition Stage | ||||
Acquisition Fees (our advisor or its affiliates)(3)(4) | Up to 3.0% of the contract purchase price of each property the Apartment REIT acquires, up to 4.0% of the total development cost of any development property, or up to 2.0% of the origination or purchase price of any real estate-related investment, as applicable. | Actual amount depends upon the actual contract purchase price of each property acquired and the actual development cost of any development property, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Reimbursement of Acquisition Expenses (our advisor or its affiliates)(4) | All expenses actually incurred related to selecting, evaluating and acquiring assets, which will be paid regardless of whether an asset is acquired. | Actual amount depends upon the actual expenses incurred, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Operational Stage | ||||
Asset Management Fee (our advisor or its affiliates)(5) | Subject to the Apartment REIT’s stockholders receiving distributions in an amount equal to 5.0% per year of our invested capital, an amount equal to 0.5% per year, cumulative, non-compounded, of average invested assets. The asset management fee is calculated and payable monthly in cash or shares of the Apartment REIT’s common stock, at the option of our advisor or one of its affiliates, not to exceed one-twelfth of 0.5% of our average invested assets as of the last day of the immediately preceding quarter; provided that effective January 1, 2009, our advisor has agreed to waive the right to receive an asset management fee until the quarter following the quarter in which the Apartment REIT generates FFO sufficient to cover 100% of the distributions declared to its stockholders for such quarter. For purposes of calculating FFO, non-recurring charges including, but not limited to, acquisition-related expenses, amortization of deferred financing fees on the Apartment REIT’s line of credit or other equivalent mezzanine financing, interest expense associated with the Apartment REIT’s line of credit, the Apartment REIT’s loans from NNN Realty Advisors, an affiliate of our | Actual amount depends upon the average invested assets, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
advisor, or other mezzanine loans, and gains or losses on future interest rate swaps, will be excluded. Average invested assets include any property-related debt; therefore, fully leveraging the Apartment REIT’s portfolio could increase the asset management fee payable to our advisor or one of its affiliates. | ||||
Property Management Fees (Residential Management)(6) | Up to 4.0% of the gross monthly cash receipts from each property managed by the respective property manager, some of which may be reallowed to a third-party property manager. | Actual amount depends upon the gross monthly cash receipts of the properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Compensation for Additional Services (our advisor or its affiliates) | If the Apartment REIT requests our advisor or one of its affiliates to render services to the Apartment REIT other than those required to be rendered by our advisor under the advisory agreement, the additional services, if our advisor elects to perform them, will be compensated separately on terms to be agreed upon between our advisor or its affiliate and the Apartment REIT. The rate of compensation for these services must be approved by a majority of the Board, including a majority of the independent directors, and cannot exceed the amount that would be paid to unaffiliated third parties for similar services. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Operating Expenses (our advisor or its affiliates)(5) | The Apartment REIT reimburses our advisor or its affiliates for operating expenses incurred in rendering services to it, subject to certain limitations. | Actual amount depends upon the services provided, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Liquidity Stage | ||||
Disposition Fees (our advisor or its affiliates)(7) | Up to the lesser of 1.75% of the contract sales price of each property or 50.0% of a competitive real estate commission that would have been paid to a third party. The amount of disposition fees paid, when added to the real estate commissions paid to unaffiliated parties, will not exceed the lesser of the customary competitive real estate commission | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
or an amount equal to 6.0% of the contract sales price. | ||||
Subordinated Participation Interest (our advisor) | Our advisor has a subordinated participation interest in the Operating Partnership pursuant to which our advisor will receive cash distributions from the Operating Partnership under the following circumstances: | |||
• Incentive Distribution upon Sales(8) | Equal to 15.0% of the net proceeds of the sale of the property after we have received, and paid to our equityholders, the sum of: • the gross proceeds from the sale of shares of the Apartment REIT’s common stock; and • any shortfall in our annual 8.0% cumulative, non-compounded return on its adjusted invested capital. The gross proceeds from the sale of shares of the Apartment REIT’s common stock, as adjusted for distributions of net sale proceeds. | Actual amount depends upon the sale price of properties, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. | ||
Until such time as our equityholders receive such 8.0% return, our advisor will not receive any incentive distributions. There is no assurance we will be able to pay an annual 8.0% return to our equityholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. | ||||
• Incentive Distribution upon Listing(9) | In the event of termination of the advisory agreement due to listing of the shares of the Apartment REIT’s common stock on a national securities exchange, our advisor will be entitled to an incentive distribution equal to 15.0% of the amount, if any, by which (1) the market value of the Apartment REIT’s outstanding common stock plus distributions paid by it prior to listing, exceeds (2) the sum of the gross proceeds from the sale of shares of the Apartment REIT’s common stock plus an annual 8.0% | Actual amount depends upon the market value of the Apartment REIT’s common stock at the time of listing, among other factors, and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
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Type of Compensation | Description and | |||
(Recipient) | Method of Computation | Estimated Amount | ||
cumulative, non-compounded return on the gross proceeds from the sale of shares of the Apartment REIT’s common stock. This distribution may be in the form of cash, the OP Units or shares of the Apartment REIT’s common stock. | ||||
There is no assurance the Apartment REIT will be able to pay an annual 8.0% return to its stockholders. Thus, the 8.0% return is disclosed solely as a measure for our advisor’s incentive compensation. Upon our advisor’s receipt of the incentive distribution upon listing, our advisor’s special limited partnership units will be redeemed and our advisor will not be entitled to receive any further incentive distributions upon sales of the Apartment REIT’s properties. See “Description of the OP Units and the Partnership Agreement.” | ||||
• Fees Payable upon Termination of our advisory Agreement | In connection with the termination of the advisory agreement other than due to a listing of the shares of our common stock on a national securities exchange, we may cause the Operating Partnership to redeem our advisor’s special limited partnership units for cash, units of limited partnership interest in the Operating Partnership or shares of our common stock, in an amount equal to what our advisor would have received pursuant to the incentive distribution upon sales if the Operating Partnership immediately sold all of its assets at fair market value. | Actual amount depends upon the fair market value of our assets at the time of termination and, therefore, cannot be determined at this time. The table below provides actual amounts paid through September 30, 2010. |
(1) | Assumes selling commissions equal to 7.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering, which commissions may be reduced under certain circumstances, and a dealer manager fee equal to 3.0% of gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering. However, the Apartment REIT’s dealer manager may, from time to time, enter into selected dealer agreements that provide for reduced selling commissions and an increased dealer manager fee, provided that in no event will the aggregate of the selling commissions and the dealer manager fee be greater than 10.0% of the gross offering proceeds for shares of the Apartment REIT’s common stock sold pursuant to a primary offering. In addition, the amount of selling commissions the Apartment REIT pay may be reduced in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors or banks acting as trustees or fiduciaries and sales to its affiliates. |
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(2) | Other organizational and offering expense reimbursement consists of compensation for incurrence on the Apartment REIT’s behalf of legal, accounting, printing and other accountable offering expenses, including for direct expenses of our advisor’s employees and employees of its affiliates (other than the Apartment REIT’s dealer manager and its employees and dual-employees) while engaged in registering and marketing the shares of the Apartment REIT’s common stock. Activities of our advisor that may be reimbursed include, but are not limited to, development of sales literature and presentations, planning and participating in due diligence meetings and generally coordinating the marketing process for the Apartment REIT. Our advisor will be responsible for the payment of the Apartment REIT’s cumulative other organizational and offering expenses to the extent they exceed 1.0% of the aggregate gross offering proceeds from the sale of shares of the Apartment REIT’s common stock pursuant to a primary offering without recourse against or reimbursement by the Apartment REIT. All organizational and offering expenses, including selling commissions and dealer manager fees, will be capped at 15.0% of the gross proceeds of any such primary offering of the Apartment REIT. | |
(3) | This estimate assumes the contract purchase price for the Apartment REIT’s assets will be an amount equal to the estimated amount invested in assets in a maximum offering and that all of the assets purchased are real properties. We have assumed that no financing will be used to acquire assets. However, as disclosed throughout this prospectus, we have used, and expect to continue to use, leverage, which results in higher fees paid to our advisor and its affiliates. Assuming a maximum leverage of 65.0% of our assets, the maximum acquisition fees would be approximately $74,064,000. We pay our advisor or its affiliates the acquisition fee upon the closing of a real estate acquisition or upon the funding or acquisition of a real estate-related investment. | |
(4) | Acquisition expenses include any and all expenses actually incurred in connection with the selection, evaluation and acquisition of, and investment in real estate and real estate-related investments, including, but not limited to, legal fees and expenses, travel and communications expenses, cost of appraisals and surveys, nonrefundable option payments on property not acquired, accounting fees and expenses, computer use related expenses, architectural, engineering and other property reports, environmental and asbestos audits, title insurance and escrow fees, loan fees or points or any fee of a similar nature paid to a third party, however designated, transfer taxes, and personnel and miscellaneous expenses related to the selection, evaluation and acquisition of properties. The Apartment REIT estimates acquisition expenses to be 0.5% of the contract purchase price. The Apartment REIT reimburses our advisor for acquisition expenses, whether or not the evaluated property is acquired. The total of all acquisition fees and expenses paid to our advisor or affiliates of our advisor, and real estate commissions and other fees paid to third parties, excluding development fees and construction fees paid to persons not affiliated with our sponsor in connection with the actual development and construction of a project, cannot exceed 6.0% of the contract purchase price of the property, or in the case of a loan, 6.0% of the funds advanced, unless fees in excess of such amount are determined to be commercially competitive, fair and reasonable to us by a majority of the Apartment REIT’s directors not interested in the transaction and a majority of the independent directors not interested in the transaction. | |
(5) | The Apartment REIT reimburses our advisor or one of its affiliates for: |
• | the Apartment REIT’s organizational and offering expenses; provided, however, that within 60 days after the end of the month in which the offering terminates, our advisor will reimburse the Apartment REIT for any organizational and offering expenses reimbursement received by our advisor, to the extent that such reimbursement exceeds the maximum amount permitted or, at the option of the Apartment REIT, such excess shall be subtracted from the next reimbursement of expenses to be made by it; |
• | acquisition expenses incurred in connection with the selection, evaluation and acquisition of the Apartment REIT’s properties; |
• | the actual cost of goods and services used by the Apartment REIT and obtained from entities not affiliated with our advisor, other than acquisition expenses; |
• | interest and other costs for borrowed money, including discounts, points and other similar fees; |
• | taxes and assessments on income of the Apartment REIT or its real estate-related investments; |
• | costs associated with insurance required in connection with the Apartment REIT’s business or by its directors; |
• | expenses of managing and operating properties owned by the Apartment REIT, payable to the property manager, whether or not the property manager is an affiliate of the Apartment REIT; |
• | all compensation and expenses payable to the Apartment REIT’s independent directors and all expenses payable to the Apartment REIT’s non-independent directors in connection with their services to the Apartment REIT and its stockholders and their attendance at meetings of the directors and stockholders; |
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• | expenses associated with a listing, if applicable, or with the issuance and distribution of the Apartment REIT’s common stock, such as selling commissions and fees, marketing and advertising expenses, taxes, legal and accounting fees, listing and registration fees, and other organizational and offering expenses; |
• | expenses connected with payments of distributions in cash or otherwise made or caused to be made by the Apartment REIT to its stockholders; |
• | expenses of amending, converting, liquidating or terminating the Apartment REIT or its charter; |
• | expenses of maintaining communications with stockholders, including the cost of preparation, printing, and mailing annual and other stockholder reports, proxy statements and other reports required by governmental entities; |
• | administrative services expenses (including personnel costs; provided, however, that no reimbursement shall be made for costs of personnel to the extent that such personnel perform services in transactions for which our advisor receives a separate fee); |
• | transfer agent and registrar’s fees and charges paid to third parties; and |
• | audit, accounting, legal and other professional fees. |
(6) | This fee is paid monthly. Residential Management may subcontract certain property management services to third parties and would be responsible for paying all fees due such third party contractors. Property management fees paid to third parties by Residential Management may be less than the fee the Apartment REIT pays to Residential Management. | |
(7) | The amount paid, when added to the sums paid to unaffiliated parties, will not exceed the lesser of (a) the real estate or brokerage commission paid for the purchase or sale of the property which is competitive in light of the size, type and location of such property or (b) an amount equal to 6.0% of the contract sales price. The Apartment REIT will pay the disposition fee on all dispositions of properties, whether made in the ordinary course of business, upon liquidation or otherwise. | |
(8) | “Invested capital” means the gross proceeds from the sale of the shares of the Apartment REIT’s common stock in offerings. When a property is sold, invested capital will be reduced by the lesser of (a) the net sale proceeds available for distribution from such sale or (b) the sum of (1) the portion of invested capital that initially was allocated to that property and (2) any remaining shortfall in the recovery of the Apartment REIT’s invested capital with respect to prior sales of properties. If the Apartment REIT and, in turn, its stockholders have not received a return of their invested capital or if there is a shortfall in the 8.0% return after the sale of the last property and our advisor previously has received incentive distributions, other than those that have previously been repaid, our advisor will be required to repay to the Operating Partnership an amount of those distributions sufficient to cause the Apartment REIT and, in turn, its stockholders to receive a full return of the invested |
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capital and a full distribution of the 8.0% return. In no event will the cumulative amount repaid by our advisor to the Operating Partnership exceed the cumulative amount of incentive distributions that our advisor previously has received. |
(9) | A listing for these purposes means the listing of the Apartment REIT’s common stock on (a) the NYSE, the NYSE Amex Equities, or the Nasdaq Global Market (or any successor to such entities), or (b) a national securities exchange (or tier or segment thereof) that has listing standards that the SEC has determined by rule are substantially similar to the listing standards applicable to securities described in Section 18(b)(1)(A) of the Securities Act. |
Amounts incurred | ||||
from Inception | ||||
through | ||||
Type of Compensation | September, 2010 | |||
Offering Stage: | ||||
Initial Offering | ||||
Selling Commissions | $ | 10,874,000 | ||
Marketing Allowance and Accountable Due Diligence Expense Reimbursements | $ | 4,073,000 | ||
Other Organizational and Offering Expenses | $ | 2,361,000 | ||
Follow-on Offering | ||||
Selling Commissions | $ | 1,818,000 | ||
Dealer Manager Fees | $ | 792,000 | ||
Other Organizational and Offering Expenses | $ | 264,000 | ||
Acquisition and Development Stage: | ||||
Acquisition Fee | $ | 11,334,000 | ||
Reimbursement of Acquisition Expenses | $ | 15,000 | ||
Operational Stage: | ||||
Asset Management Fee | $ | 3,513,000 | ||
Property Management Fee | $ | 3,581,000 | ||
Compensation for Additional Services | $ | 238,000 | ||
Reimbursable Expenses | ||||
Operating Expenses | $ | 665,000 | ||
On-site Personnel | $ | 9,216,000 | ||
Interest Expense | $ | 1,262,000 | ||
Disposition/Liquidation Stage: | ||||
Disposition Fee | $ | — | ||
Incentive Distribution Upon Sales | $ | — | ||
Incentive Distribution Upon Listing | $ | — | ||
Fees Payable Upon Termination of Advisory Agreement | $ | — |
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• | the goods or services must be necessary to the Apartment REIT’s prudent operation; and |
• | the compensation, price or fee must be equal to the lesser of the compensation, price or fee the Apartment REIT would be required to pay to independent parties rendering comparable services or selling or leasing comparable goods on competitive terms in the same geographic location, or the compensation, price or fee charged by our advisor or its affiliates for rendering comparable services or selling or leasing comparable goods on competitive terms. |
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• | the general partner of the Operating Partnership; |
• | each of the directors and officers of the Operating Partnership’s general partner; |
• | all directors and officers of the Operating Partnership’s general partner as a group; |
• | each of the director nominees of the Operating Partnership’s general partner; |
• | each of the named executive officers of the Operating Partnership’s general partner; and |
• | all directors, director nominees and executive officers of the Operating Partnership’s general partner as a group. |
Number of | Percent of | |||||||||||||||
Shares of REIT | Shares of | |||||||||||||||
Common Stock | REIT | Number of OP | ||||||||||||||
Beneficially | Common | Units Beneficially | Percent of | |||||||||||||
Name of Beneficial Owner(1) | Owned | Stock | Owned | the OP Units | ||||||||||||
General Partner of the Operating Partnership: | ||||||||||||||||
Grubb & Ellis Apartment, REIT, Inc. | N/A | N/A | 19,537,770.50 | (2) | % | |||||||||||
Directors, Director Nominees and Executive Officers of the Apartment REIT: | ||||||||||||||||
Stanley J. (“Jay”) Olander, Jr. | — | * | — | * | ||||||||||||
Gustav G. Remppies | — | * | — | * | ||||||||||||
David L. Carneal | — | * | — | * | ||||||||||||
Andrea R. Biller | — | * | — | * | ||||||||||||
Glenn W. Bunting, Jr.(3) | 5,293 | * | 5,293 | * | ||||||||||||
Robert A. Gary, IV(3) | 5,000 | * | 5,000 | * | ||||||||||||
Richard S. Johnson(3) | 2,000 | * | 2,000 | * | ||||||||||||
All directors, director nominees and executive officers as a group (7 persons) | 12,293 | * | 12,293 | * | ||||||||||||
*Denotes less than 1%. | ||
(1) | The address of each beneficial owner listed is c/o Grubb & Ellis Apartment REIT, Inc., 4901 Dickens Road, Suite 101, Richmond, Virginia 23230. | |
(2) | Includes 19,537,670.50 OP Units held by the Apartment REIT and 100 OP Units held by our advisor, an affiliate of the Apartment REIT. | |
(3) | Includes restricted and unrestricted shares of common stock. |
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• | Except as otherwise described in this prospectus, the Apartment REIT does not accept goods or services from our advisor or its affiliates unless a majority of the Apartment REIT’s directors, including a majority of the independent directors, not otherwise interested in the transactions, approve such transactions as fair and reasonable to the Apartment REIT and on terms and conditions not less favorable to the Apartment REIT than those available from unaffiliated third parties. |
• | The Apartment REIT does not purchase or lease any asset (including any property) in which our advisor, any of the Apartment REIT’s directors or any of their respective affiliates has an interest without a determination by a majority of the Apartment REIT’s directors, including a majority of the independent directors, not otherwise interested in such transaction, that such transaction is fair and reasonable to the Apartment REIT and at a price to the Apartment REIT no greater than the cost of the property to our advisor, such director or directors or any such affiliate, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable. In no event will the Apartment REIT acquire any such asset at an amount in excess of its appraised value. The Apartment REIT will not sell or lease assets to our advisor, any of the Apartment REIT’s directors or any of their respective affiliates unless a majority of the Apartment REIT’s directors, including a majority of the independent directors, not otherwise interested in the transaction, determine the transaction is fair and reasonable to the Apartment REIT, which determination will be supported by an appraisal obtained from a qualified, independent appraiser selected by a majority of the independent directors. |
• | The Apartment REIT does not make any loans to our advisor, any of the Apartment REIT’s directors or any of their respective affiliates except loans, if any, to the Apartment REIT’s wholly-owned subsidiaries. In addition, any loans made to the Apartment REIT by our advisor, the Apartment REIT’s directors or any of their respective affiliates must be approved by a majority of the Apartment REIT’s directors, including a majority of the independent directors, not otherwise interested in the transaction, as fair, competitive and commercially reasonable, and no less favorable to the Apartment REIT than comparable loans between unaffiliated parties. |
• | Our advisor and its affiliates are entitled to reimbursement, at cost, for actual expenses incurred by them on the Apartment REIT’s behalf or on behalf of joint ventures in which the Apartment REIT is a joint venture partner, subject to the limitation that our advisor and its affiliates are not entitled to reimbursement of operating expenses, generally, to the extent that they exceed the greater of 2.0% of the Apartment REIT’s average invested assets or 25.0% of the Apartment REIT’s net income, as described in the “Compensation Table” section of this prospectus. |
• | The advisory agreement between the Apartment REIT and our advisor provides that if our advisor identifies an opportunity to make an investment in one or more Class A income-producing multi-family properties that satisfy the Apartment REIT’s investment objectives and are placed under contract by our advisor or its affiliates, then our advisor will provide the Apartment REIT with the first opportunity to purchase such investment. If the Board does not affirmatively authorize the Apartment REIT to make |
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such purchase within seven days of being offered such property, then our advisor may offer the investment opportunity to any other person or entity. |
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• | result in any person owning, directly or indirectly, stock in excess of the ownership limit; |
• | result in the Apartment REIT’s shares of capital stock being owned by fewer than 100 persons, determined without reference to any rules of attribution; |
• | result in the Apartment REIT being “closely held” under the federal income tax laws; |
• | cause the Apartment REIT to own, actually or constructively, 10.0% or more of the ownership interests in a tenant of its real property; |
• | cause the acquisition of shares of the Apartment REIT’s common stock by such redeeming limited partner to be “integrated” with any other distribution of common stock for purposes of complying with the Securities Act; or |
• | before the Apartment REIT’s common stock qualifies as a class of “publicly-offered securities,” cause or result in Benefit Plan Investors owning 25.0% or more of the outstanding shares of common stock (disregarding any shares owned by any person who has discretionary authority or control with respect to the assets of the Apartment REIT). |
• | the Apartment REIT’s Invested Capital, as defined below; and |
• | any remaining shortfall in an annual 8.0% cumulative, non-compounded return on adjusted Invested Capital as determined in the paragraph below, or 8.0% return. |
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• | are entitled to receive distributions authorized by the Board after payment of, or provision for, full cumulative distributions on and any required repurchases of shares of preferred stock then outstanding; |
• | are entitled to share ratably in the distributable assets of the Apartment REIT remaining after satisfaction of the prior preferential rights of the preferred stock and the satisfaction of all of the Apartment REIT’s debts and liabilities in the event of any voluntary or involuntary liquidation or dissolution of the Apartment REIT; |
• | do not have preference, conversion, exchange, sinking fund or repurchase rights or preemptive rights to subscribe for any of the Apartment REIT’s securities; and |
• | do not have appraisal rights unless the Board determines that appraisal rights apply, with respect to all or any classes or series of stock, to a particular transaction or all transactions occurring after the date of such determination in connection with which such holders would otherwise be entitled to exercise appraisal rights. |
• | amend the Apartment REIT’s charter, including, by way of illustration, amendments to provisions relating to director qualifications, fiduciary duty, liability and indemnification, conflicts of interest, investment policies or investment restrictions, except for amendments with respect to increases or decreases in the aggregate number of shares of the Apartment REIT’s stock or the number of shares of stock of any class or series, changes in the Apartment REIT’s name, changes in the name or other designation or the par value of any class or series of stock and the aggregate par value of the Apartment REIT’s stock or certain reverse stock splits; |
• | sell all or substantially all of the Apartment REIT’s assets other than in the ordinary course of business or as otherwise permitted by law; |
• | cause a merger or reorganization of the Apartment REIT except that where the merger is effected through a wholly-owned subsidiary and the consideration to be paid by the Apartment REIT in the |
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merger consists solely of cash, the merger may be approved solely by the Board unless a party to the merger is an affiliate of our sponsor; or |
• | dissolve or liquidate the Apartment REIT. |
• | the value of outstanding shares of the Apartment REIT’s capital stock; or |
• | the value or number (whichever is more restrictive) of outstanding shares of the Apartment REIT’s common stock. |
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• | result in any person owning, directly or indirectly, shares of the Apartment REIT’s capital stock in excess of the foregoing ownership limitations; |
• | result in the Apartment REIT’s capital stock being owned by fewer than 100 persons, determined without reference to any rules of attribution; |
• | result in the Apartment REIT being “closely held” under the federal income tax laws; |
• | cause the Apartment REIT to own, actually or constructively, 9.9% or more of the ownership interests in a tenant of our real property, under the federal income tax laws; or |
• | before the Apartment REIT’s shares of stock constitute a class of “publicly-offered securities,” result in 25.0% or more of its shares of stock being owned by ERISA investors. |
• | the price per share such prohibited owner paid for the shares of capital stock that were designated as shares-in-trust or, in the case of a gift or devise, the market price per share on the date of such transfer; or |
• | the price per share received by the trust from the sale of such shares-in-trust. |
• | the price per share in the transaction that created such shares-in-trust or, in the case of a gift or devise, the market price per share on the date of such transfer; or |
• | the market price per share on the date that the Apartment REIT, or its designee, accepts such offer. |
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REIT’S CHARTER AND BYLAWS
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• | the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty; |
• | the director or officer actually received an improper personal benefit in money, property or services; or |
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
• | the party was acting on behalf of or performing services on the part of the Apartment REIT; |
• | the Apartment REIT’s directors, our advisor or our advisor’s affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in the best interest of the Apartment REIT; |
• | such indemnification or agreement to be held harmless is recoverable only out of the Apartment REIT’s net assets and not from its stockholders; and |
• | such liability or loss was not the result of: |
• | negligence or misconduct by the Apartment REIT’s directors (other than the independent directors) or our advisor or their respective affiliates; or |
• | gross negligence or willful misconduct by the Apartment REIT’s independent directors. |
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• | there has been a successful determination on the merits of each count involving alleged securities law violations as to the party seeking indemnification; |
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the party seeking indemnification; or |
• | a court of competent jurisdiction approves a settlement of the claims against the party seeking indemnification and finds that indemnification of the settlement and related costs should be made and the court considering the request has been advised of the position of the SEC and of the published opinions of any state securities regulatory authority in which shares of the Apartment REIT’s stock were offered and sold as to indemnification for securities law violations. |
• | the proceeding legal action relates to acts or omissions with respect to the performance of duties or services by the indemnified party for or on behalf of the Apartment REIT; |
• | the legal proceeding is initiated by a third party who is not a stockholder of the Apartment REIT or the legal proceeding is initiated by a stockholder of the Apartment REIT acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; |
• | the party receiving such advances furnishes the Apartment REIT with a written statement of his or her good faith belief that he or she has met the standard of conduct described above; and |
• | the indemnified party receiving such advances furnishes to the Apartment REIT a written undertaking, personally executed on his or her behalf, to repay the advanced funds to the Apartment REIT, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not meet the standard of conduct described above and is not entitled to indemnification. |
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• | accepting the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction offered in the proposed roll-up transaction; or |
• | one of the following: |
• | remaining common stockholders of the Apartment REIT and preserving their interests in the Apartment REIT on the same terms and conditions as existed previously; or |
• | receiving cash in an amount equal to the stockholder’spro ratashare of the appraised value of the Apartment REIT’s net assets. |
• | which would result in the common stockholders having voting rights in the entity that would be created or would survive after the successful completion of the roll-up transaction that are less than those provided in its charter, including rights with respect to the election and removal of directors, annual reports, annual and special meetings, amendment of the charter and dissolution of the Apartment REIT; |
• | which includes provisions that would operate as a material impediment to, or frustration of, the accumulation of shares by any purchaser of the securities of the entity that would be created or would survive after the successful completion of the roll-up transaction, except to the minimum extent necessary to preserve the tax status of such entity, or which would limit the ability of an investor to exercise the voting rights of its securities of the entity that would be created or would survive after the successful completion of the roll-up transaction on the basis of the number of shares held by that investor; |
• | in which the Apartment REIT’s stockholders’ rights to access of records of the entity that would be created or would survive after the successful completion of the roll-up transaction will be less than those provided in the Apartment REIT’s charter and described in “—Inspection of Books and Records,” above; or |
• | in which the Apartment REIT would bear any of the costs of the roll-up transaction if its stockholders do not approve the roll-up transaction. |
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(1) | a person who makes or proposes to make a control share acquisition, |
(2) | an officer of the corporation, or |
(3) | an employee of the corporation who is also a director of the corporation. |
(1) | one-tenth or more but less than one-third, | ||
(2) | one-third or more but less than a majority, or | ||
(3) | a majority or more of all voting power. |
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• | a classified board; |
• | a two-thirds vote requirements for removing a director; |
• | a requirement that the number of directors be fixed only by vote of the directors; |
• | a requirement that a vacancy on the board be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and |
• | a majority requirement for the calling of a special meeting of stockholders. |
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• | the fact of the common directorship or interest is disclosed to or known by the directors and the transaction is authorized, approved or ratified by the disinterested directors; |
• | the fact of the common directorship or interest is disclosed to or known by the Apartment REIT’s stockholders and the transaction is authorized approved or ratified by the disinterested stockholders; or |
• | the transaction is fair and reasonable to the Apartment REIT. |
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• | whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code; |
• | whether the investment will be in accordance with the documents and instruments governing such Benefit Plan Investor; |
• | whether the assets of the entity in which the investment is made will be treated as “plan assets” of the Benefit Plan Investor; |
• | whether the investment will result in UBTI to the Plan or IRA; |
• | whether there is sufficient liquidity for the Plan or IRA considering the minimum and other distribution requirements under the Internal Revenue Code and the liquidity needs of such Plan or IRA, after taking this investment into account; |
• | the need to value the assets of the Plan or IRA annually or more frequently; |
• | whether the investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code, if applicable; and |
• | whether the investment satisfies the prudence and diversification and other fiduciary requirements of ERISA, if applicable. |
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• | the estimated value per unit would actually be realized by our holders upon liquidation, because these estimates do not necessarily indicate the price at which properties can be sold; |
• | the OP Unit holders would be able to realize estimated net asset values if they were to attempt to sell their OP Units, because no public market for the OP Units exists or is likely to develop; or |
• | that the value, or method used to establish value, would comply with ERISA or Internal Revenue Code requirements described above. |
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• | in securities issued by an investment company registered under the Investment Company Act; |
• | in “publicly-offered securities,” defined generally as interests that are “freely-transferable,” “widely held,” and registered with the SEC; |
• | in which equity participation by Benefit Plan Investors is not significant; or |
• | in an “operating company” which includes “venture capital operating companies” and “real estate operating companies.” |
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• | a broker-dealer or a dealer in securities or currencies; |
• | an S corporation; |
• | a partnership or other pass-through entity; |
• | a bank, thrift or other financial institution; |
• | a regulated investment company or a REIT; |
• | an insurance company; |
• | a tax-exempt organization; |
• | subject to the alternative minimum tax provisions of the Internal Revenue Code; |
• | holding DST Interests or the OP Units through a partnership or other pass-through entity; |
• | a non-U.S. person (e.g., a foreign corporation, partnership, or person who is not a resident or citizen of the United States); |
• | a U.S. person whose “functional currency” is not the U.S. dollar; or |
• | a U.S. expatriate. |
• | each DST is treated as grantor trust, |
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• | each holder of a DST Interest will be treated as owning its proportionate share of the assets of the applicable DST and being liable for its share of the applicable DST’s liabilities, and |
• | each DST Investor is treated as contributing its DST Interest, and thus its proportion share of the assets of the DST, to the Operating Partnership in exchange for the OP Units in the proposed acquisition. |
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• | You receive a deemed cash distribution from the Operating Partnership as a result of a decrease in your share of the applicable DST’s liabilities that is not offset by your share of the OP liabilities attributable to the OP Units acquired in the proposed acquisition. Because the Operating Partnership does not anticipate repaying any liability of any DST in connection with the proposed acquisition, the Operating Partnership does not anticipate that any DST Investor will recognize gain as a result of a decrease in its share of liabilities. However, gain could be recognized if a DST Investor’s share of the OP liabilities is decreased after the proposed acquisitions by an amount that exceeds its basis in the OP Units received at the time of the proposed acquisition, whether the decrease is due to the repayment by the Operating Partnership of all or part of its liabilities or some other event. |
• | Your deemed contribution of a DST Interest to the Operating Partnership in the proposed acquisitions is treated in whole or in part as a “disguised sale” under section 707 of the Internal Revenue Code. |
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• | a partner contributes property to a partnership; and |
• | the partnership transfers money or other consideration to the partner. |
• | the facts and circumstances clearly establish that the contribution and transfer do not constitute a disguised sale; or |
• | an exception to disguised sale treatment applies. |
• | any liability incurred more than two years prior to the earlier of the transfer of the property or the date the partner agrees in writing to the transfer, as long as the liability has encumbered the transferred property throughout the two-year period; |
• | a liability that was not incurred in anticipation of the transfer of the property to a partnership, but that was incurred by the partner within the two-year period prior to the earlier of the date the partner agrees in writing to transfer the property or the date the partner transfers the property to a partnership and that has encumbered the transferred property since it was incurred; |
• | a liability that is traceable under applicable Treasury regulations to capital expenditures with respect to the property; and |
• | a liability that was incurred in the ordinary course of the trade or business in which property transferred to the partnership was used or held, but only if all the assets related to that trade or business are transferred, other than assets that are not material to a continuation of the trade or business. |
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• | the sale of the applicable DST properties by the Operating Partnership, particularly to the extent you had deferred gain with respect to the property even before the proposed acquisition; |
• | a distribution by the Operating Partnership to one or more holders of the OP Units of a DST property with respect to which gain was deferred at the time of the proposed acquisition; |
• | the repayment, retirement, refinancing or other reduction in the amount of existing debt secured by a DST property, particularly to the extent you had deferred gain with respect to the property even before the proposed acquisition; |
• | the issuance of additional OP Units, which could reduce your share of the OP liabilities; |
• | an increase in the basis of a DST property due to capital expenditures or otherwise, with respect to which you had deferred gain even before the proposed acquisition; and |
• | the elimination of the disparity between the current tax basis of a DST property and the “book bases” of the property, which are based on the fair market value of the property at the time of the proposed acquisition, which has the effect of reducing the amount of indebtedness allocable to you for basis purposes and, therefore, can result in deemed cash distributions. See “—Tax Consequences of Ownership of the OP Units After the Proposed Acquisition—Tax Allocations with Respect to Book-Tax Difference on a DST Property.” |
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• | the Operating Partnership’s taxable income; |
• | any increases in nonrecourse liabilities incurred by the Operating Partnership; and |
• | recourse liabilities to the extent the DST Investor elects to incur the risk of loss with respect to those liabilities through a guarantee. |
• | the Operating Partnership’s distributions; |
• | decreases in liabilities of the Operating Partnership, including any decrease in its share of the nonrecourse liabilities of the Operating Partnership and any recourse liabilities for which it is considered to bear the economic risk of loss; |
• | losses of the Operating Partnership; and |
• | nondeductible expenditures of the Operating Partnership that are not chargeable to capital. |
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• | the adjusted tax basis of its OP Units at the end of the Operating Partnership’s taxable year in which the loss occurs; and |
• | the amount for which such holder is considered “at-risk” at the end of that year. |
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• | an individual holder; |
• | an individual stockholder or partner of a holder that is an S corporation or partnership; and |
• | a holder that is a corporation if 50% or more of the value of that corporation’s stock is owned, directly or indirectly, by five or fewer individuals at any time during the last half of the taxable year. |
• | any cash received; |
• | the fair market value of any other property received; and |
• | the amount of Operating Partnership liabilities allocated to the unit. |
• | any cash received; |
• | the fair market value of any shares of the Apartment REIT’s common stock received; and |
• | the amount of Operating Partnership liabilities allocated to the unit exchanged. |
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• | the cash received; and |
• | the amount of the Operating Partnership liabilities allocated to the unit redeemed. |
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• | The Apartment REIT will be taxed at regular corporate rates on the Apartment REIT’s undistributed REIT taxable income, including undistributed net capital gains. |
• | Under some circumstances, the Apartment REIT may be subject to “alternative minimum tax.” |
• | If the Apartment REIT has net income from the sale or other disposition of “foreclosure property” (as described below) that is held primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, the Apartment REIT will be subject to tax at the highest corporate rate on that income. |
• | If the Apartment REIT has net income from prohibited transactions (as described below), the income will be subject to a 100% tax. |
• | If the Apartment REIT fails to satisfy either of the 75% or 95% Gross Income Tests (as described below) but nonetheless maintained its qualification as a REIT because certain conditions have been met, it will be subject to a 100% tax on an amount equal to the greater of the amount by which it fails the 75.0% or 95.0% Gross Income Tests multiplied by a fraction calculated to distinguish qualifying net income from non-qualifying income. |
• | If the Apartment REIT fails to satisfy the REIT Asset Tests (as described below) and the Apartment REIT continues to qualify as a REIT because it meets other requirements, the Apartment REIT will have to pay a tax equal to the greater of $50,000 or the highest corporate income tax rate multiplied by the net income generated by the non-qualifying assets during the time the Apartment REIT failed to |
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satisfy the Asset Tests. If the Apartment REIT fails to satisfy other REIT requirements (other than the Gross Income and Asset Tests), the Apartment REIT can continue to qualify as a REIT if its failure was due to reasonable cause and not willful neglect, but the Apartment REIT must pay $50,000 for each failure. |
• | If the Apartment REIT fails to distribute during each year at least the sum of (i) 85% of its REIT ordinary income for the year, (ii) 95% of its REIT capital gain net income for such year and (iii) any undistributed taxable income from prior periods, the Apartment REIT will be subject to a 4% excise tax on the excess of the required distribution over the amounts actually distributed. |
• | The Apartment REIT may elect to retain and pay tax on its net long-term capital gain. In that case, a U.S. stockholder would be taxed on its proportionate share of the Apartment REIT’s undistributed long-term capital gain and would receive a credit or refund for its proportionate share of the tax the Apartment REIT paid. |
• | If the Apartment REIT acquires any asset from a C corporation (i.e., a corporation generally subject to corporate-level tax) in a transaction in which its basis in the asset is determined by reference to the basis of the asset (or any other property) in the hands of the C corporation and the Apartment REIT subsequently recognizes gain on the disposition of the asset during the ten-year period beginning on the date on which it acquired the asset, then a portion of the gain may be subject to tax at the highest regular corporate rate, unless the C corporation made an election to treat the asset as if it were sold for its fair market value at the time of the Apartment REIT’s acquisition. We refer to this tax as the “Built-in Gains Tax.” |
• | The Apartment REIT will be subject to federal and state income tax on its taxable incomes. Several provisions regarding the arrangements between a REIT and its TRSs ensure that a TRS will be subject to an appropriate level of federal income taxation. For example, the Internal Revenue Code limits the ability of a TRS to deduct interest payments made to the Apartment REIT in excess of a certain amount. In addition, the Apartment REIT must pay a 100% tax on some payments that it receives from, or on certain expenses deducted by, the TRS if the economic arrangements between it, its tenants and the TRS are not comparable to similar arrangements among unrelated parties. Any TRS the Apartment REIT may utilize in the future may make interest and other payments to the Apartment REIT and to third parties in connection with activities related to the Apartment REIT’s properties. We cannot assure you that the Apartment REIT’s TRSs will not be limited in their ability to deduct interest payments made to us. In addition, we cannot assure you that the IRS might not seek to impose the 100% tax on services performed by any such TRS for tenants of the Apartment REIT’s, or on a portion of the payments received by us from, or expenses deducted by, any such TRS. |
• | “Foreclosure property” is real property and any personal property incident to such real property (1) that is acquired by a REIT as the result of the Apartment REIT having bid in the property at foreclosure, or having otherwise acquired ownership or possession of the property by agreement or process of law, after there was a default (or default was imminent) on a lease of the property or on a mortgage loan held by the Apartment REIT and secured by the property, (2) the related loan or lease of which was acquired by the Apartment REIT at a time when default was not imminent or anticipated and (3) for which such REIT makes a proper election to treat the property as foreclosure property. REITs generally are subject to tax at the maximum corporate rate on any net income from foreclosure property, including any gain from the disposition of the foreclosure property, other than income that would otherwise be qualifying income for purposes of the 75.0% gross income test, which is described below. |
• | Any gain from the sale of property for which a foreclosure property election has been made will not be subject to the 100% tax on gains from prohibited transactions described below, even if the property would otherwise constitute property held primarily for sale to customers in the ordinary course of a REIT’s trade or business. The Apartment REIT does not expect to receive income from foreclosure property that is not qualifying income for purposes of the 75% gross income test. However, if the Apartment REIT does acquire any foreclosure property that it believes will give rise to such income, the Apartment REIT intends to make an election to treat the related property as foreclosure property. |
• | The term “prohibited transaction” generally includes a sale or other disposition of property (other than foreclosure property) that is held primarily for sale to customers in the ordinary course of a REIT’s |
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trade or business. Whether property is held “primarily for sale to customers in the ordinary course of a trade or business” depends on the particular facts and circumstances surrounding each property. The Apartment REIT intends to continue to conduct its operations in such a manner: |
• | so that no asset it owns, directly or through any subsidiary entities (other than TRSs), will be held for sale to customers in the ordinary course of its trade or business; or, |
• | in order to comply with certain safe-harbor provisions of the Internal Revenue Code that would prevent such treatment. |
• | which is managed by one or more trustees or directors; |
• | the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest; |
• | which would be taxable as a domestic corporation but for Sections 856 through 859 of the Internal Revenue Code; |
• | which is neither a financial institution nor an insurance company subject to certain provisions of the Internal Revenue Code; |
• | the beneficial ownership of which is held by 100 or more persons; |
• | not more than 50.0% in value of the outstanding stock of which is owned, directly or indirectly, by or for five or fewer individuals (as defined in the Internal Revenue Code to include certain entities); |
• | which makes an election to be a REIT (or has made such election for a previous taxable year which has not been revoked or terminated) and satisfies all relevant filing and other administrative requirements established by the IRS that must be met to elect and maintain REIT status; |
• | which uses the calendar year as its taxable year; and |
• | which meets certain other tests, described below, regarding the nature of its income and assets and the amount of its distributions. |
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• | At least 75% of the Apartment REIT’s gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property (including “rents from real property” and interest income derived from mortgage loans secured by real property) and from other specified sources, including qualified temporary investment income, as described below. This is the “75% Gross Income Test.” |
• | At least 95% of the Apartment REIT’s gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from the real property investments described above in the 75% Gross Income Test and generally from dividends and interest and gains from the sale or disposition of stock or securities or from any combination of the foregoing. This is the “95% Gross Income Test.” |
• | In general, neither the Apartment REIT nor an owner of 10.0% or more of the Apartment REIT’s shares of stock may directly or constructively own 10.0% or more of a tenant or a subtenant of the tenant (in which case only rent attributable to the subtenant is disqualified). |
• | Rent attributable to personal property leased in connection with a lease of real property cannot be greater than 15% of the total rent received under the lease, as determined based on the average of the fair market values as of the beginning and end of the taxable year. |
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• | The Apartment REIT may, however, provide services with respect to its properties, and the income derived from the properties will qualify as “rents from real property,” if the services are “usually or customarily rendered” in connection with the rental of space only and are not otherwise considered “rendered to the occupant.” Even if the services provided by the Apartment REIT with respect to a property are impermissible tenant services, the income so derived will qualify as “rents from real property” if such income does not exceed 1% of all amounts received or accrued with respect to that property. For this purpose, such services may not be valued at less than 150% of the Apartment REIT’s direct cost of providing the services, and any gross income deemed to have been derived by the Apartment REIT from the performance of noncustomary services pursuant to the 1% de minimis exception will constitute nonqualifying gross income under the 75% and 95% Gross Income Tests. |
• | In addition, the Apartment REIT’s TRSs may perform some impermissible tenant services without causing the Apartment REIT to receive impermissible tenant services income under the 75% and 95% Gross Income Tests. However, several provisions regarding the arrangements between a REIT and its TRSs ensure that a TRS will be subject to an appropriate level of federal income taxation. For example, the Internal Revenue Code limits the ability of the Apartment REIT’s TRSs to deduct interest payments in excess of a certain amount made to the Apartment REIT. In addition, the Apartment REIT must pay a 100% tax on some payments that it receives from, or on certain expenses deducted by, the TRS if the economic arrangements between the Apartment REIT, its tenants and the TRS are not comparable to similar arrangements among unrelated parties. We cannot assure you that the Apartment REIT’s TRSs will not be limited in their ability to deduct interest payments made to the Apartment REIT. In addition, we cannot assure you that the IRS might not seek to impose the 100% tax on services performed by TRSs for tenants of the Apartment REIT’s (or on a portion of the payments received by us from, or expenses deducted by, the Apartment REIT’s TRSs). |
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• | the Apartment REIT’s failure to meet these tests was due to reasonable cause and not due to willful neglect; and |
• | following its identification of the failure, the Apartment REIT properly discloses such failure to the IRS. |
• | First, at least 75% of the value of the Apartment REIT’s total assets must be represented by real estate assets, cash, cash items (including receivables) and government securities. The term “real estate assets” includes real property, mortgages on real property, shares of stock in other qualified REITs, property attributable to the temporary investment of new capital as described above and a proportionate share of any real estate assets owned by a partnership in which the Apartment REIT is a partner or of any qualified REIT subsidiary of the Apartment REITs. |
• | Second, no more than 25% of the value of the Apartment REIT’s total assets may be represented by securities other than those described above in the 75% asset class. |
• | Third, of the investments included in the 25% asset class, the value of any one issuer’s securities that the Apartment REIT owns may not exceed 5% of the value of its total assets. Additionally, the Apartment REIT may not own more than 10% of the voting power of any one issuer’s outstanding securities. Furthermore, the Apartment REIT may not own more than 10% of the total value of any one issuer’s outstanding debt and equity securities. The 10% value limitation will not apply, however, to: |
• | “straight debt” securities (i.e., generally, debt payable on demand or at a date certain where the interest rate and the interest payment dates are not contingent on profits, the borrower’s discretion or similar factors and there is no convertibility, directly or indirectly, into stock of the debtor, although a security will not fail to be “straight debt” if it is subject to certain customary or de minimis contingencies; a security issued by a corporation or partnership will qualify as “straight debt” only if the Apartment |
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REIT or any of its TRSs hold no more than 1% of the outstanding non-qualifying securities of such issuer); |
• | loans to an individual or an estate; |
• | certain rental agreements calling for deferred rents or increasing rents that are subject to Section 467 of the Internal Revenue Code, other than with a “related person”; |
• | obligations to pay qualifying rents from real property; |
• | securities issued by a state or any political subdivision of a state, the District of Columbia, a foreign government, any political subdivision of the foreign government, or the Commonwealth of Puerto Rico, but only if the determinations of any payment received or accrued under the security does not depend in whole or in part on the profits of any entity; |
• | securities issued by another qualifying REIT; and |
• | other arrangements identified in Treasury Regulations (which have not yet been issued or proposed). |
• | Fourth, no more than 25% of the value of the Apartment REIT’s total assets may consist of the securities of one or more TRSs. Subject to certain exceptions, a TRS is any corporation, other than a REIT, in which the Apartment REIT directly or indirectly own stock and with respect to which a joint election has been made by the Apartment REIT and the corporation to treat the corporation as a TRS of the Apartment REIT’s. It also includes any corporation, other than a REIT or a qualified REIT subsidiary, in which a TRS of the Apartment REIT’s owns, directly or indirectly, more than 35% of the voting power or value. |
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• | the Apartment REIT declares the distributions in October, November or December, the distributions are payable to stockholders of record on a specified date in such a month, and the Apartment REIT actually pays the distributions during January of the subsequent year; or |
• | the Apartment REIT declares the distributions before it timely files its federal income tax return for such year, it pays the distributions in the 12-month period following the close of the prior year and not later than the first regular distribution payment after the declaration, and it elects on its federal income tax return for the prior year to have a specified amount of the subsequent distribution treated as if paid in the prior year. |
• | the Apartment REIT would be required to pay the federal income tax on these gains; |
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• | taxable U.S. stockholders, while required to include their proportionate share of the undistributed long-term capital gains in income, would receive a credit or refund for their share of the tax paid by the Apartment REIT; and |
• | the basis of the stockholder’s shares of the Apartment REIT’s stock would be increased by the amount of its undistributed long-term capital gains (minus its proportionate share of the amount of capital gains tax it pays) included in the stockholder’s long-term capital gains. |
• | a citizen or resident of the United States; |
• | a corporation or other entity treated as a corporation for federal income tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof; |
• | an estate, the income of which is subject to federal income taxation regardless of its source; or |
• | a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. |
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• | distributions received from the Apartment REIT may be treated as “qualified dividend income” to the extent that the Apartment REIT itself has received qualified dividend income from other corporations (such as TRSs) in which the Apartment REIT has invested; and |
• | distributions paid by the Apartment REIT in a taxable year may be treated as “qualified dividend income” in an amount equal to the sum of (i) the excess of the Apartment REIT’s “REIT taxable income” for the preceding taxable year over the corporate-level federal income tax payable by the Apartment REIT for such preceding taxable year and (ii) the excess of the Apartment REIT’s income that was subject to the Built-in Gains Tax in the preceding taxable year over the tax payable by the Apartment REIT on such income for such preceding taxable year. |
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• | results in a “complete termination” of the stockholder’s interest in the Apartment REIT under Section 302(b)(3) of the Internal Revenue Code; |
• | is “substantially disproportionate” with respect to the stockholder under Section 302(b)(2) of the Internal Revenue Code (i.e., if the percentage of the voting stock of the corporation owned by a stockholder immediately after the repurchase is less than eighty percent of the percentage of that owned by such stockholder immediately before the repurchase (taking into account constructive ownership rules in Section 318 of the Internal Revenue Code)); or |
• | is “not essentially equivalent to a dividend” with respect to the stockholder under Section 302(b)(1) of the Internal Revenue Code (i.e., if it results in a “meaningful reduction” in the stockholder’s interest in the Apartment REIT; the IRS has published a ruling indicating that a repurchase which results in a reduction in the proportionate interest in a corporation (taking into account the constructive ownership rules in Section 318 of the Internal Revenue Code) of a stockholder whose relative stock interest is minimal (an interest of less than 1% should satisfy this requirement) and who exercises no control over the corporation’s affairs should be treated as being “not essentially equivalent to a dividend”). |
• | fails to furnish its taxpayer identification number (for an individual, this would be his or her social security number); |
• | furnishes an incorrect taxpayer identification number; |
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• | is notified by the IRS that the stockholder has failed properly to report payments of interest or dividends; or |
• | under some circumstances, fails to certify, under penalties of perjury, that it has furnished a correct taxpayer identification number and has not been notified by the IRS that the stockholder is subject to backup withholding for failure to report interest and dividend payments or has been notified by the IRS that the stockholder is no longer subject to backup withholding for failure to report those payments. |
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• | 35% of designated capital gain distributions or, if greater, 35% of the amount of any distributions that could be designated as capital gain distributions; and |
• | 30% of ordinary income distributions (i.e., distributions paid out of its earnings and profits). |
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GRUBB & ELLIS APARTMENT REIT HOLDINGS, LP CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||
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GRUBB & ELLIS APARTMENT REIT HOLDINGS, LP CONSOLIDATED FINANCIAL STATEMENTS | ||||
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GRUBB & ELLIS APARTMENT REIT HOLDINGS, L P MISSION PROPERTIES COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES | ||||
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GRUBB & ELLIS APARTMENT REIT HOLDINGS, LP PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | ||||
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As of September 30, 2010 and December 31, 2009
(Unaudited)
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Real estate investments: | ||||||||
Operating properties, net | $ | 353,738,000 | $ | 324,938,000 | ||||
Cash and cash equivalents | 7,334,000 | 6,895,000 | ||||||
Accounts and other receivables | 716,000 | 662,000 | ||||||
Restricted cash | 4,827,000 | 4,007,000 | ||||||
Real estate and escrow deposits | 2,370,000 | — | ||||||
Identified intangible assets, net | 342,000 | — | ||||||
Other assets, net | 2,232,000 | 1,801,000 | ||||||
Total assets | $ | 371,559,000 | $ | 338,303,000 | ||||
LIABILITIES AND CAPITAL | ||||||||
Liabilities: | ||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 217,434,000 | ||||
Unsecured note payables to affiliate | 7,750,000 | 9,100,000 | ||||||
Short term notes | 1,570,000 | — | ||||||
Accounts payable and accrued liabilities | 7,532,000 | 5,698,000 | ||||||
Accounts payable due to affiliates, net | 155,000 | 140,000 | ||||||
Security deposits, prepaid rent and other liabilities | 1,350,000 | 1,162,000 | ||||||
Total liabilities | 262,608,000 | 233,534,000 | ||||||
Commitments and contingencies (Note 7) | ||||||||
Redeemable special limited partnerhsip interest (Note 9) | — | — | ||||||
Capital: | ||||||||
Partners’ capital: | ||||||||
Partnership units, 19,236,268 and 17,028,454 units, respectively, held by the general partner and 100 units held by the limited partner as of September 30, 2010 and December 31, 2009 | 108,951,000 | 104,769,000 | ||||||
Total capital | 108,951,000 | 104,769,000 | ||||||
Total liabilities and capital | $ | 371,559,000 | $ | 338,303,000 | ||||
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For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
Revenues: | ||||||||
Rental income | $ | 26,130,000 | $ | 25,169,000 | ||||
Other property revenues | 2,940,000 | 2,873,000 | ||||||
Total revenues | 29,070,000 | 28,042,000 | ||||||
Expenses: | ||||||||
Rental expenses | 13,677,000 | 13,737,000 | ||||||
General and administrative | 1,082,000 | 1,311,000 | ||||||
Acquisition related expenses | 3,606,000 | 12,000 | ||||||
Depreciation and amortization | 9,367,000 | 8,924,000 | ||||||
Total expenses | 27,732,000 | 23,984,000 | ||||||
Income from operations | 1,338,000 | 4,058,000 | ||||||
Other income (expense): | ||||||||
Interest expense (including amortization of deferred financing costs and debt discount): | ||||||||
Interest expense related to unsecured note payables to affiliate | (286,000 | ) | (401,000 | ) | ||||
Interest expense related to mortgage loan payables, net | (8,454,000 | ) | (8,086,000 | ) | ||||
Interest expense related to lines of credit from our general partner | — | (201,000 | ) | |||||
Interest and dividend income | 12,000 | 1,000 | ||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | ||
Net loss per partnership unit — basic and diluted | $ | (0.41 | ) | $ | (0.29 | ) | ||
Weighted average partnership units outstanding — basic and diluted | 18,022,970 | 16,040,651 | ||||||
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For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
Number of | ||||||||
Units | Amount | |||||||
BALANCE - December 31, 2009 | 17,028,554 | $ | 104,769,000 | |||||
Issuance of partnership units | 2,051,147 | 20,488,000 | ||||||
Offering costs | — | (2,229,000 | ) | |||||
Issuance of share based compensation awards | 3,000 | 6,000 | ||||||
Issuance of partnership units under the DRIP | 342,633 | 3,254,000 | ||||||
Amortization of share based compensation | — | 14,000 | ||||||
Repurchase of partnership units | (188,966 | ) | (1,872,000 | ) | ||||
Distributions declared | — | (8,089,000 | ) | |||||
Net loss | — | (7,390,000 | ) | |||||
BALANCE - September 30, 2010 | 19,236,368 | $ | 108,951,000 | |||||
Number of | ||||||||
Units | Amount | |||||||
BALANCE - December 31, 2008 | 15,488,910 | $ | 106,705,000 | |||||
Issuance of partnership units | 919,862 | 9,196,000 | ||||||
Offering costs | — | (1,010,000 | ) | |||||
Issuance of share based compensation awards | 4,000 | 8,000 | ||||||
Issuance of partnership units under the DRIP | 350,131 | 3,327,000 | ||||||
Amortization of share based compensation | — | 13,000 | ||||||
Forfeiture of nonvested share based compensation awards | (2,000 | ) | (2,000 | ) | ||||
Repurchase of partnership units | (192,676 | ) | (1,860,000 | ) | ||||
Distributions declared | — | (7,481,000 | ) | |||||
Net loss | — | (4,629,000 | ) | |||||
BALANCE - September 30, 2009 | 16,568,227 | $ | 104,267,000 | |||||
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For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (7,390,000 | ) | $ | (4,629,000 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization (including deferred financing costs and debt discount) | 9,649,000 | 9,277,000 | ||||||
Gain on property insurance settlements | — | (101,000 | ) | |||||
Stock based compensation, net of forfeitures | 20,000 | 19,000 | ||||||
Bad debt expense | 160,000 | 388,000 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts and other receivables | (315,000 | ) | (427,000 | ) | ||||
Other assets, net | (270,000 | ) | 90,000 | |||||
Accounts payable and accrued liabilities | 1,319,000 | 941,000 | ||||||
Accounts payable due to affiliates, net | 6,000 | (565,000 | ) | |||||
Security deposits, prepaid rent and other liabilities | (347,000 | ) | (340,000 | ) | ||||
Net cash provided by operating activities | 2,832,000 | 4,653,000 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Acquisition of real estate operating properties | (36,713,000 | ) | (469,000 | ) | ||||
Capital expenditures | (1,197,000 | ) | (975,000 | ) | ||||
Proceeds from property insurance settlements | 153,000 | 194,000 | ||||||
Restricted cash | (820,000 | ) | (924,000 | ) | ||||
Real estate and escrow deposits | (800,000 | ) | — | |||||
Net cash used in investing activities | (39,377,000 | ) | (2,174,000 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Borrowings on mortgage loan payables | 27,200,000 | — | ||||||
Payments on mortgage loan payables | (484,000 | ) | (309,000 | ) | ||||
Payments on unsecured note payables to affiliate | (1,350,000 | ) | — | |||||
Payments on the line of credit from our general partner | — | (1,800,000 | ) | |||||
Deferred financing costs | (293,000 | ) | (4,000 | ) | ||||
Security deposits | 255,000 | 296,000 | ||||||
Proceeds from issuance of partnership units | 20,488,000 | 9,193,000 | ||||||
Repurchase of partnership units | (1,872,000 | ) | (1,860,000 | ) | ||||
Payment of offering costs | (2,220,000 | ) | (1,167,000 | ) | ||||
Distributions paid | (4,740,000 | ) | (4,226,000 | ) | ||||
Net cash provided by financing activities | 36,984,000 | 123,000 | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 439,000 | 2,602,000 | ||||||
CASH AND CASH EQUIVALENTS - Beginning of period | 6,895,000 | 2,664,000 | ||||||
CASH AND CASH EQUIVALENTS - End of period | $ | 7,334,000 | $ | 5,266,000 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for: | ||||||||
Interest | $ | 8,420,000 | $ | 8,373,000 | ||||
Income taxes | $ | 148,000 | $ | 97,000 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: | ||||||||
Investing Activities: | ||||||||
Accrued capital expenditures | $ | 83,000 | $ | 35,000 | ||||
The following represents the increase in certain assets and liabilities in connection with our acquisitions of operating properties: | ||||||||
Other assets, net | $ | 49,000 | $ | — | ||||
Accounts payable and accrued liabilities | $ | 364,000 | $ | — | ||||
Security deposits, prepaid rent and other liabilities | $ | 230,000 | $ | — | ||||
Financing Activities: | ||||||||
Issuance of partnership units under the DRIP | $ | 3,254,000 | $ | 3,327,000 | ||||
Distributions declared but not paid | $ | 942,000 | $ | 826,000 | ||||
Accrued offering costs | $ | 53,000 | $ | 30,000 | ||||
Receivable for issuance of partnership units | $ | — | $ | 87,000 | ||||
Investing and Financing Activities: | ||||||||
Issuance of short term notes for real estate deposits | $ | 1,570,000 | $ | — |
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For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)
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September 30, 2010 | December 31, 2009 | |||||||
Land | $ | 45,747,000 | $ | 41,926,000 | ||||
Land improvements | 24,266,000 | 22,066,000 | ||||||
Building and improvements | 304,550,000 | 274,199,000 | ||||||
Furniture, fixtures and equipment | 12,239,000 | 10,799,000 | ||||||
386,802,000 | 348,990,000 | |||||||
Less: accumulated depreciation | (33,064,000 | ) | (24,052,000 | ) | ||||
$ | 353,738,000 | $ | 324,938,000 | |||||
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September 30, 2010 | December 31, 2009 | |||||||
In place leases, net of accumulated amortization of $0 as of September 30, 2010 and December 31, 2009 (with a weighted average remaining life of 5 months and 0 months as of September 30, 2010 and December 31, 2009, respectively) | $ | 211,000 | $ | — | ||||
Tenant relationships, net of accumulated amortization of $25,000 and $0 as of September 30, 2010 and December 31, 2009, respectively, (with a weighted average remaining life of 15 months and 0 months as of September 30, 2010 and December 31, 2009, respectively) | 131,000 | — | ||||||
$ | 342,000 | $ | — | |||||
Year | Amount | |||
2010 | $ | 153,000 | ||
2011 | $ | 179,000 | ||
2012 | $ | 10,000 | ||
2013 | $ | — | ||
2014 | $ | — | ||
Thereafter | $ | — |
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September 30, 2010 | December 31, 2009 | |||||||
Deferred financing costs, net of accumulated amortization of $621,000 and $440,000 as of September 30, 2010 and December 31, 2009, respectively | $ | 1,547,000 | $ | 1,435,000 | ||||
Prepaid expenses and deposits | 685,000 | 366,000 | ||||||
$ | 2,232,000 | $ | 1,801,000 | |||||
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Interest | Maturity | |||||||||||||||||||||||
Property | Rate | Date | September 30, 2010 | December 31, 2009 | ||||||||||||||||||||
Fixed Rate Debt: | ||||||||||||||||||||||||
Hidden Lake Apartment Homes | 5.34 | % | 01/11/17 | $ | 19,218,000 | $ | 19,218,000 | |||||||||||||||||
Walker Ranch Apartment Homes | 5.36 | % | 05/11/17 | 20,000,000 | 20,000,000 | |||||||||||||||||||
Residences at Braemar | 5.72 | % | 06/01/15 | 9,231,000 | 9,355,000 | |||||||||||||||||||
Park at Northgate | 5.94 | % | 08/01/17 | 10,295,000 | 10,295,000 | |||||||||||||||||||
Baypoint Resort | 5.94 | % | 08/01/17 | 21,612,000 | 21,612,000 | |||||||||||||||||||
Towne Crossing Apartments | 5.04 | % | 11/01/14 | 14,588,000 | 14,789,000 | |||||||||||||||||||
Villas of El Dorado | 5.68 | % | 12/01/16 | 13,600,000 | 13,600,000 | |||||||||||||||||||
The Heights at Olde Towne | 5.79 | % | 01/01/18 | 10,475,000 | 10,475,000 | |||||||||||||||||||
The Myrtles at Olde Towne | 5.79 | % | 01/01/18 | 20,100,000 | 20,100,000 | |||||||||||||||||||
Arboleda Apartments | 5.36 | % | 04/01/15 | 17,559,000 | 17,651,000 | |||||||||||||||||||
Bella Ruscello Luxury Apartment Homes | 5.53 | % | 04/01/20 | 13,233,000 | — | |||||||||||||||||||
Mission Rock Ridge Apartmenets | 4.20 | % | 10/01/20 | 13,900,000 | — | |||||||||||||||||||
183,811,000 | 157,095,000 | |||||||||||||||||||||||
Variable Rate Debt: | ||||||||||||||||||||||||
Creekside Crossing | 2.51 | % | * | 07/01/15 | 17,000,000 | 17,000,000 | ||||||||||||||||||
Kedron Village | 2.53 | % | * | 07/01/15 | 20,000,000 | 20,000,000 | ||||||||||||||||||
Canyon Ridge Apartments | 2.56 | % | * | 10/01/15 | 24,000,000 | 24,000,000 | ||||||||||||||||||
61,000,000 | 61,000,000 | |||||||||||||||||||||||
�� | ||||||||||||||||||||||||
Total fixed and variable rate debt | 244,811,000 | 218,095,000 | ||||||||||||||||||||||
Less: discount | (560,000 | ) | (661,000 | ) | ||||||||||||||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 217,434,000 | ||||||||||||||||||||
* | Represents the per annum interest rate in effect as of September 30, 2010. In addition, pursuant to the terms of the related loan documents, the maximum variable interest rate allowable is capped at a rate ranging from 6.50% to 6.75% per annum. |
Year | Amount | |||
2010 | $ | 213,000 | ||
2011 | $ | 875,000 | ||
2012 | $ | 953,000 | ||
2013 | $ | 1,571,000 | ||
2014 | $ | 15,380,000 | ||
Thereafter | $ | 225,819,000 |
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Entity | Fee | September 30, 2010 | December 31, 2009 | |||||||||
Grubb & Ellis Equity Advisors/ Grubb & Ellis Realty Investors | Operating Expenses | $ | 6,000 | $ | 6,000 | |||||||
Grubb & Ellis Equity Advisors/ Grubb & Ellis Realty Investors | Offering Costs | 12,000 | 14,000 | |||||||||
Grubb & Ellis Securities | Selling Commissions and Dealer Manager Fees | 41,000 | 30,000 | |||||||||
Residential Management | Property Management Fees | 96,000 | 90,000 | |||||||||
$ | 155,000 | $ | 140,000 | |||||||||
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Nonvested | Weighted | |||||||
Partnership | Average Grant | |||||||
Units | Date Fair Value | |||||||
Balance — December 31, 2009 | 4,800 | $ | 10.00 | |||||
Granted | 3,000 | 10.00 | ||||||
Vested | (2,400 | ) | 10.00 | |||||
Forfeited | — | — | ||||||
Balance — September 30, 2010 | 5,400 | $ | 10.00 | |||||
Expected to vest — September 30, 2010 | 5,400 | $ | 10.00 | |||||
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Bella Ruscello Property | Mission Rock Ridge Property | |||||||
Land | $ | 1,619,000 | $ | 2,201,000 | ||||
Land improvements | 1,226,000 | 974,000 | ||||||
Building and improvements | 13,599,000 | 15,669,000 | ||||||
Furniture, fixtures and equipment | 686,000 | 721,000 | ||||||
In place leases | 194,000 | 211,000 | ||||||
Tenant relationships | 76,000 | 81,000 | ||||||
Total assets acquired | $ | 17,400,000 | $ | 19,857,000 | ||||
Nine Months Ended | ||||
September 30, 2010 | ||||
Revenues | $ | 31,528,000 | ||
Net loss | $ | (7,738,000 | ) | |
Net loss per partnership unit — basic and diluted | $ | (0.43 | ) |
Nine Months Ended | ||||
September 30, 2009 | ||||
Revenues | $ | 31,743,000 | ||
Net loss | $ | (7,570,000 | ) | |
Net loss per partnership unit — basic and diluted | $ | (0.46 | ) |
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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Grubb & Ellis Apartment REIT Holdings, LP
Santa Ana, CA
November 24, 2010
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As of December 31, 2009 and 2008
December 31, | ||||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
Real estate investments: | ||||||||
Operating properties, net | $ | 324,938,000 | $ | 335,267,000 | ||||
Cash and cash equivalents | 6,895,000 | 2,664,000 | ||||||
Accounts and other receivables | 662,000 | 395,000 | ||||||
Restricted cash | 4,007,000 | 3,762,000 | ||||||
Identified intangible assets, net | — | 249,000 | ||||||
Other assets, net | 1,801,000 | 2,348,000 | ||||||
Total assets | $ | 338,303,000 | $ | 344,685,000 | ||||
LIABILITIES AND CAPITAL | ||||||||
Liabilities: | ||||||||
Mortgage loan payables, net | $ | 217,434,000 | $ | 217,713,000 | ||||
Unsecured note payables to affiliate | 9,100,000 | 9,100,000 | ||||||
Line of credit from our general partner | — | 3,200,000 | ||||||
Accounts payable and accrued liabilities | 5,698,000 | 5,857,000 | ||||||
Accounts payable due to affiliates, net | 140,000 | 866,000 | ||||||
Security deposits, prepaid rent and other liabilities | 1,162,000 | 1,244,000 | ||||||
Total liabilities | 233,534,000 | 237,980,000 | ||||||
Commitments and contingencies (Note 8) | ||||||||
Redeemable special limited partnership interest (Note 10) | — | — | ||||||
Capital: | ||||||||
Partners’ capital: | ||||||||
Partnership units, 17,028,454 and 15,488,810 units, respectively, held by the general partner and 100 units held by the limited partner as of December 31, 2009 and 2008 | 104,769,000 | 106,705,000 | ||||||
Total capital | 104,769,000 | 106,705,000 | ||||||
Total liabilities and capital | $ | 338,303,000 | $ | 344,685,000 | ||||
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For the Years Ended December 31, 2009, 2008 and 2007
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Revenues: | ||||||||||||
Rental income | $ | 33,674,000 | $ | 28,692,000 | $ | 11,610,000 | ||||||
Other property revenues | 3,791,000 | 3,186,000 | 1,095,000 | |||||||||
Total revenues | 37,465,000 | 31,878,000 | 12,705,000 | |||||||||
Expenses: | ||||||||||||
Rental expenses | 18,122,000 | 16,046,000 | 6,223,000 | |||||||||
General and administrative | 1,647,000 | 4,445,000 | 2,196,000 | |||||||||
Acquisition related expenses | 12,000 | 909,000 | 187,000 | |||||||||
Depreciation and amortization | 11,854,000 | 11,720,000 | 5,385,000 | |||||||||
Total expenses | 31,635,000 | 33,120,000 | 13,991,000 | |||||||||
Income (loss) from operations | 5,830,000 | (1,242,000 | ) | (1,286,000 | ) | |||||||
Other income (expense): | ||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount): | ||||||||||||
Interest expense related to unsecured note payables to affiliate | (544,000 | ) | (220,000 | ) | (204,000 | ) | ||||||
Interest expense related to mortgage loan payables, net | (10,796,000 | ) | (10,092,000 | ) | (3,441,000 | ) | ||||||
Interest expense related to the line of credit from our general partner | (212,000 | ) | (970,000 | ) | (58,000 | ) | ||||||
Interest expense related to the line of credit | — | (325,000 | ) | (683,000 | ) | |||||||
Interest and dividend income | 3,000 | 22,000 | 91,000 | |||||||||
Other income, net | — | — | 2,000 | |||||||||
Net loss | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | |||
Net loss per partnership unit — basic and diluted | $ | (0.35 | ) | $ | (1.04 | ) | $ | (1.10 | ) | |||
Weighted average partnership units outstanding — basic and diluted | 16,227,024 | 12,322,132 | 5,064,042 | |||||||||
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Number of | ||||||||
Units | Amount | |||||||
BALANCE - December 31, 2006 | 1,686,168 | $ | 14,248,000 | |||||
Issuance of partnership units | 6,707,393 | 67,001,000 | ||||||
Issuance of share based compensation awards | 3,000 | 6,000 | ||||||
Offering costs | — | (7,367,000 | ) | |||||
Amortization of share based compensation | — | 9,000 | ||||||
Issuance of partnership units under the DRIP | 132,383 | 1,258,000 | ||||||
Distributions declared | — | (3,519,000 | ) | |||||
Net loss | — | (5,579,000 | ) | |||||
BALANCE - December 31, 2007 | 8,528,944 | 66,057,000 | ||||||
Issuance of partnership units | 6,641,058 | 66,336,000 | ||||||
Issuance of share based compensation awards | 3,000 | 6,000 | ||||||
Offering costs | — | (7,254,000 | ) | |||||
Amortization of share based compensation | — | 15,000 | ||||||
Issuance of partnership units under the DRIP | 400,216 | 3,802,000 | ||||||
Repurchase of partnership units | (84,308 | ) | (797,000 | ) | ||||
Distributions declared | — | (8,633,000 | ) | |||||
Net loss | — | (12,827,000 | ) | |||||
BALANCE - December 31, 2008 | 15,488,910 | 106,705,000 | ||||||
Issuance of partnership units | 1,322,313 | 13,215,000 | ||||||
Issuance of share based compensation awards | 4,000 | 8,000 | ||||||
Forfeiture of nonvested share based compensation awards | (2,000 | ) | (2,000 | ) | ||||
Offering costs | — | (1,447,000 | ) | |||||
Amortization of share based compensation | — | 18,000 | ||||||
Issuance of partnership units under the DRIP | 460,285 | 4,373,000 | ||||||
Repurchase of partnership units | (244,954 | ) | (2,383,000 | ) | ||||
Distributions declared | — | (9,999,000 | ) | |||||
Net loss | — | (5,719,000 | ) | |||||
BALANCE - December 31, 2009 | 17,028,554 | $ | 104,769,000 | |||||
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For the Years Ended December 31, 2009, 2008 and 2007
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net loss | $ | (5,719,000 | ) | $ | (12,827,000 | ) | $ | (5,579,000 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization (including deferred financing costs and debt discount) | 12,309,000 | 12,610,000 | 5,665,000 | |||||||||
(Gain) loss on property insurance settlements | (101,000 | ) | 16,000 | — | ||||||||
Stock based compensation, net of forfeitures | 24,000 | 21,000 | 15,000 | |||||||||
Bad debt expense | 446,000 | 544,000 | 264,000 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts and other receivables | (726,000 | ) | (712,000 | ) | (307,000 | ) | ||||||
Other assets, net | 233,000 | (79,000 | ) | 218,000 | ||||||||
Accounts payable and accrued liabilities | 288,000 | 1,848,000 | 2,095,000 | |||||||||
Accounts payable due to affiliates, net | (582,000 | ) | 295,000 | 58,000 | ||||||||
Security deposits, prepaid rent and other liabilities | (454,000 | ) | (149,000 | ) | (234,000 | ) | ||||||
Net cash provided by operating activities | 5,718,000 | 1,567,000 | 2,195,000 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Acquisition of real estate operating properties | (469,000 | ) | (124,874,000 | ) | (123,657,000 | ) | ||||||
Capital expenditures | (1,304,000 | ) | (1,648,000 | ) | (215,000 | ) | ||||||
Proceeds from property insurance settlements | 194,000 | 360,000 | — | |||||||||
Restricted cash | (245,000 | ) | (476,000 | ) | (3,093,000 | ) | ||||||
Net cash used in investing activities | (1,824,000 | ) | (126,638,000 | ) | (126,965,000 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Borrowings on mortgage loan payables | — | 78,651,000 | 82,482,000 | |||||||||
Payments on mortgage loan payables | (415,000 | ) | (391,000 | ) | (137,000 | ) | ||||||
Borrowings on unsecured note payables to affiliate | — | 9,100,000 | 31,900,000 | |||||||||
Payments on unsecured note payables to affiliate | — | (7,600,000 | ) | (34,300,000 | ) | |||||||
Borrowings on the line of credit from our general partner | — | 34,850,000 | 13,195,000 | |||||||||
Payments on the line of credit from our general partner | (3,200,000 | ) | (41,650,000 | ) | (3,195,000 | ) | ||||||
Payments on the line of credit | — | — | (21,585,000 | ) | ||||||||
Deferred financing costs | (4,000 | ) | (1,050,000 | ) | (1,174,000 | ) | ||||||
Security deposits | 367,000 | 196,000 | (7,000 | ) | ||||||||
Proceeds from issuance of partnership units | 13,238,000 | 66,636,000 | 66,796,000 | |||||||||
Repurchase of partnership units | (2,383,000 | ) | (797,000 | ) | — | |||||||
Payment of offering costs | (1,590,000 | ) | (7,490,000 | ) | (7,108,000 | ) | ||||||
Distributions | (5,676,000 | ) | (4,414,000 | ) | (1,857,000 | ) | ||||||
Net cash provided by financing activities | 337,000 | 126,041,000 | 125,010,000 | |||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 4,231,000 | 970,000 | 240,000 | |||||||||
CASH AND CASH EQUIVALENTS - Beginning of period | 2,664,000 | 1,694,000 | 1,454,000 | |||||||||
CASH AND CASH EQUIVALENTS - End of period | $ | 6,895,000 | $ | 2,664,000 | $ | 1,694,000 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
Cash paid for: | ||||||||||||
Interest | $ | 11,109,000 | $ | 10,376,000 | $ | 3,483,000 | ||||||
Income taxes | $ | 120,000 | $ | 11,000 | $ | 2,000 | ||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: | ||||||||||||
Investing Activities: | ||||||||||||
Accrued capital expenditures | $ | 26,000 | $ | 20,000 | $ | 17,000 | ||||||
The following represents the increase in certain assets and liabilities in connection with our acquisitions of operating properties: | ||||||||||||
Accounts and other receivables | $ | — | $ | 2,000 | $ | 20,000 | ||||||
Other assets, net | $ | — | $ | 141,000 | $ | 314,000 | ||||||
Accounts payable and accrued liabilities | $ | — | $ | 399,000 | $ | 1,385,000 | ||||||
Mortgage loan payables, net | $ | — | $ | — | $ | 37,709,000 | ||||||
Security deposits and prepaid rent | $ | — | $ | 521,000 | $ | 732,000 | ||||||
Financing Activities: | ||||||||||||
Issuance of partnership units under the DRIP | $ | 4,373,000 | $ | 3,802,000 | $ | 1,258,000 | ||||||
Distributions declared but not paid | $ | 848,000 | $ | 898,000 | $ | 481,000 | ||||||
Accrued offering costs | $ | 44,000 | $ | 187,000 | $ | 423,000 | ||||||
Accrued deferred financing costs | $ | — | $ | — | $ | 4,000 | ||||||
Receivable for issuance of partnership units | $ | — | $ | 23,000 | $ | 323,000 |
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For the Years Ended December 31, 2009, 2008 and 2007
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• | management, having the authority to approve the action, commits to a plan to sell the asset; | ||
• | the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; | ||
• | an active program to locate a buyer and other actions required to complete the plan to sell the asset has been initiated; | ||
• | the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year; | ||
• | the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and | ||
• | given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn. |
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F-35
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December 31, | ||||||||
2009 | 2008 | |||||||
Land | $ | 41,926,000 | $ | 41,926,000 | ||||
Land improvements | 22,066,000 | 22,066,000 | ||||||
Building and improvements | 274,199,000 | 273,171,000 | ||||||
Furniture, fixtures and equipment | 10,799,000 | 10,734,000 | ||||||
348,990,000 | 347,897,000 | |||||||
Less: accumulated depreciation | (24,052,000 | ) | (12,630,000 | ) | ||||
$ | 324,938,000 | $ | 335,267,000 | |||||
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F-37
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December 31, | ||||||||
2009 | 2008 | |||||||
In place leases, net of accumulated amortization of $0 and $185,000 as of December 31, 2009 and 2008, respectively (with a weighted average remaining life of 0 months and 4 months as of December 31, 2009 and 2008, respectively). | $ | — | $ | 181,000 | ||||
Tenant relationships, net of accumulated amortization of $0 and $69,000 as of December 31, 2009 and 2008, respectively (with a weighted average remaining life of 0 months and 4 months as of December 31, 2009 and 2008, respectively). | — | 68,000 | ||||||
$ | — | $ | 249,000 | |||||
December 31, | ||||||||
2009 | 2008 | |||||||
Deferred financing costs, net of accumulated amortization of $440,000 and $225,000 as of December 31, 2009 and 2008, respectively | $ | 1,435,000 | $ | 1,750,000 | ||||
Prepaid expenses and deposits | 366,000 | 598,000 | ||||||
$ | 1,801,000 | $ | 2,348,000 | |||||
Year | Amount | |||
2010 | $ | 232,000 | ||
2011 | $ | 232,000 | ||
2012 | $ | 232,000 | ||
2013 | $ | 232,000 | ||
2014 | $ | 228,000 | ||
Thereafter | $ | 279,000 |
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December 31, | ||||||||||||||||
Property | Interest Rate | Maturity Date | 2009 | 2008 | ||||||||||||
Fixed Rate Debt: | ||||||||||||||||
Hidden Lake Apartment Homes | 5.34 | % | 01/11/17 | $ | 19,218,000 | $ | 19,218,000 | |||||||||
Walker Ranch Apartment Homes | 5.36 | % | 05/11/17 | 20,000,000 | 20,000,000 | |||||||||||
Residences at Braemar | 5.72 | % | 06/01/15 | 9,355,000 | 9,513,000 | |||||||||||
Park at Northgate | 5.94 | % | 08/01/17 | 10,295,000 | 10,295,000 | |||||||||||
Baypoint Resort | 5.94 | % | 08/01/17 | 21,612,000 | 21,612,000 | |||||||||||
Towne Crossing Apartments | 5.04 | % | 11/01/14 | 14,789,000 | 15,046,000 | |||||||||||
Villas of El Dorado | 5.68 | % | 12/01/16 | 13,600,000 | 13,600,000 | |||||||||||
The Heights at Olde Towne | 5.79 | % | 01/01/18 | 10,475,000 | 10,475,000 | |||||||||||
The Myrtles at Olde Towne | 5.79 | % | 01/01/18 | 20,100,000 | 20,100,000 | |||||||||||
Arboleda Apartments | 5.36 | % | 04/01/15 | 17,651,000 | 17,651,000 | |||||||||||
157,095,000 | 157,510,000 | |||||||||||||||
Variable Rate Debt: | ||||||||||||||||
Creekside Crossing | 2.42 | % | * | 07/01/15 | 17,000,000 | 17,000,000 | ||||||||||
Kedron Village | 2.44 | % | * | 07/01/15 | 20,000,000 | 20,000,000 | ||||||||||
Canyon Ridge Apartments | 2.47 | % | * | 10/01/15 | 24,000,000 | 24,000,000 | ||||||||||
61,000,000 | 61,000,000 | |||||||||||||||
Total fixed and variable rate debt | 218,095,000 | 218,510,000 | ||||||||||||||
Less: discount | (661,000 | ) | (797,000 | ) | ||||||||||||
Mortgage loan payables, net | $ | 217,434,000 | $ | 217,713,000 | ||||||||||||
* | Represents the interest rate in effect as of December 31, 2009. In addition, pursuant to the terms of the related loan documents, the maximum variable interest rate allowable is capped at a rate ranging from 6.50% to 6.75% per annum. |
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Year | Amount | |||
2010 | $ | 588,000 | ||
2011 | $ | 701,000 | ||
2012 | $ | 734,000 | ||
2013 | $ | 1,194,000 | ||
2014 | $ | 15,012,000 | ||
Thereafter | $ | 199,866,000 |
Date of Note | Amount | Maturity Date | Interest Rate | Default Rate | ||||||||||||
06/27/08 | $ | 3,700,000 | 05/10/09 | 5.26 | % | 7.26 | % | |||||||||
09/15/08 | 5,400,000 | 03/15/09 | 4.99 | % | 6.99 | % | ||||||||||
$ | 9,100,000 | |||||||||||||||
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F-41
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F-44
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F-45
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December 31, | ||||||||||
Entity | Fee | 2009 | 2008 | |||||||
Grubb & Ellis Realty Investors | Operating Expenses | $ | 6,000 | $ | 10,000 | |||||
Grubb & Ellis Realty Investors | Offering Costs | 14,000 | 157,000 | |||||||
Residential Management | On-site Personnel Payroll | — | — | |||||||
Grubb & Ellis Realty Investors | Acquisition Related Expenses | — | 1,000 | |||||||
Grubb & Ellis Securities | Selling Commissions, Marketing Support Fees and Dealer Manager Fees | 30,000 | 30,000 | |||||||
Residential Management | Property Management Fees | 90,000 | 85,000 | |||||||
Triple Net Properties Realty, Inc. | Asset and Property Management Fees | — | 581,000 | |||||||
Our General Partner | Interest Expense | — | 2,000 | |||||||
$ | 140,000 | $ | 866,000 | |||||||
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F-47
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F-48
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Nonvested | Weighted | |||||||
Partnership | Average Grant | |||||||
Units | Date Fair Value | |||||||
Balance — December 31, 2006 | 2,400 | $ | 10.00 | |||||
Granted | 3,000 | 10.00 | ||||||
Vested | (1,200 | ) | 10.00 | |||||
Forfeited | — | — | ||||||
Balance — December 31, 2007 | 4,200 | 10.00 | ||||||
Granted | 3,000 | 10.00 | ||||||
Vested | (1,800 | ) | 10.00 | |||||
Forfeited | — | — | ||||||
Balance — December 31, 2008 | 5,400 | 10.00 | ||||||
Granted | 4,000 | 10.00 | ||||||
Vested | (2,600 | ) | 10.00 | |||||
Forfeited | (2,000 | ) | 10.00 | |||||
Balance — December 31, 2009 | 4,800 | $ | 10.00 | |||||
Expected to vest — December 31, 2009 | 4,800 | $ | 10.00 | |||||
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
(Level 1 ) | (Level 2) | (Level 3) | Total | |||||||||||||
Assets | ||||||||||||||||
Money market funds | $ | 3,000 | $ | — | $ | — | $ | 3,000 | ||||||||
Total assets at fair value | $ | 3,000 | $ | — | $ | — | $ | 3,000 | ||||||||
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Years Ended December 31, | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Ordinary income | $ | — | — | % | $ | — | — | % | $ | — | — | % | ||||||||||||
Capital gain | — | — | — | — | — | — | ||||||||||||||||||
Return of capital | 0.63 | 100 | 0.70 | 100 | 0.68 | 100 | ||||||||||||||||||
$ | 0.63 | 100 | % | $ | 0.70 | 100 | % | $ | 0.68 | 100 | % | |||||||||||||
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Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
2009 | 2009 | 2009 | 2009 | |||||||||||||
Revenues | $ | 9,423,000 | $ | 9,405,000 | $ | 9,259,000 | $ | 9,378,000 | ||||||||
Expenses | (7,651,000 | ) | (8,037,000 | ) | (7,951,000 | ) | (7,996,000 | ) | ||||||||
Income from operations | 1,772,000 | 1,368,000 | 1,308,000 | 1,382,000 | ||||||||||||
Other expense, net | (2,862,000 | ) | (2,933,000 | ) | (2,894,000 | ) | (2,860,000 | ) | ||||||||
Net loss | $ | (1,090,000 | ) | $ | (1,565,000 | ) | $ | (1,586,000 | ) | $ | (1,478,000 | ) | ||||
Net loss per partnership unit — basic and diluted | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.10 | ) | $ | (0.09 | ) | ||||
Weighted average number of partnership units outstanding — basic and diluted | 16,780,869 | 16,384,298 | 16,042,394 | 15,688,933 | ||||||||||||
Quarters Ended | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||
2008 | 2008 | 2008 | 2008 | |||||||||||||
Revenues | $ | 9,421,000 | $ | 8,885,000 | $ | 7,267,000 | $ | 6,305,000 | ||||||||
Expenses | (9,900,000 | ) | (8,883,000 | ) | (7,470,000 | ) | (6,867,000 | ) | ||||||||
(Loss) income from operations | (479,000 | ) | 2,000 | (203,000 | ) | (562,000 | ) | |||||||||
Other expense, net | (3,198,000 | ) | (3,171,000 | ) | (2,857,000 | ) | (2,359,000 | ) | ||||||||
Net loss | $ | (3,677,000 | ) | $ | (3,169,000 | ) | $ | (3,060,000 | ) | $ | (2,921,000 | ) | ||||
Net loss per partnership unit— basic and diluted | $ | (0.25 | ) | $ | (0.23 | ) | $ | (0.27 | ) | $ | (0.31 | ) | ||||
Weighted average number of partnership units outstanding — basic and diluted | 14,998,294 | 13,500,042 | 11,368,548 | 9,368,250 | ||||||||||||
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F-52
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• | an asset management agreement pursuant to which we assumed the asset management and investor relations responsibilities for all of the aforementioned properties; and | ||
• | a termination fee agreement pursuant to which the lessees of the managed properties under the master lease structures and certain other affiliates of Mission Residential Management agreed to pay us termination fees if any of the property management agreements we assumed or sub-management agreements we entered into is terminated by the lessee of the property under its master lease structure other than for cause, is not extended by the lessee or is terminated by the manager without good reason. The termination fee provisions will survive for five years after the closing. The termination fee will not be payable if a property management agreement is terminated as a result of our acquisition of the managed property. The obligations of the lessees of the properties to pay these termination fees are guaranteed by MR Holdings and by Mission Residential Holdings, LLC. |
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F-54
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ACCUMULATED DEPRECIATION
December 31, 2009
Initial Cost to Company | Gross Amount at Which Carried at Close of Period | |||||||||||||||||||||||||||||||||||||
Building, | Cost Capitalized | Building, | ||||||||||||||||||||||||||||||||||||
Improvements and | Subsequent to | Improvements and | Accumulated | Date of | Date | |||||||||||||||||||||||||||||||||
Encumbrances | Land | Fixtures | Acquisition(a) | Land | Fixtures | Total(b) | Depreciation(d)(e) | Construction | Acquired | |||||||||||||||||||||||||||||
Walker Ranch Apartment Homes (Residential) | San Antonio, TX | $ | 20,000,000 | $ | 3,025,000 | $ | 28,273,000 | $ | 79,000 | $ | 3,025,000 | $ | 28,352,000 | $ | 31,377,000 | $ | (3,308,000 | ) | 2004 | 10/31/06 | ||||||||||||||||||
Hidden Lake Apartment Homes (Residential) | San Antonio, TX | 19,218,000 | 3,031,000 | 29,540,000 | 231,000 | 3,031,000 | 29,771,000 | 32,802,000 | (2,701,000 | ) | 2004 | 12/28/06 | ||||||||||||||||||||||||||
Park at Northgate (Residential) | Spring, TX | 10,295,000 | 1,870,000 | 14,958,000 | 169,000 | 1,870,000 | 15,127,000 | 16,997,000 | (1,644,000 | ) | 2002 | 06/12/07 | ||||||||||||||||||||||||||
Residences at Braemar (Residential) | Charlotte, NC | 9,355,000 | 1,564,000 | 13,718,000 | 75,000 | 1,564,000 | 13,793,000 | 15,357,000 | (1,307,000 | ) | 2005 | 06/29/07 | ||||||||||||||||||||||||||
Baypoint Resort (Residential) | Corpus Christi, TX | 21,612,000 | 5,306,000 | 28,522,000 | 624,000 | 5,306,000 | 29,146,000 | 34,452,000 | (2,161,000 | ) | 1998 | 08/02/07 | ||||||||||||||||||||||||||
Towne Crossing Apartments (Residential) | Mansfield, TX | 14,789,000 | 2,041,000 | 19,079,000 | 182,000 | 2,041,000 | 19,261,000 | 21,302,000 | (1,836,000 | ) | 2004 | 08/29/07 | ||||||||||||||||||||||||||
Villas of El Dorado (Residential) | McKinney, TX | 13,600,000 | 1,622,000 | 16,741,000 | 345,000 | 1,622,000 | 17,086,000 | 18,708,000 | (1,832,000 | ) | 2002 | 11/02/07 | ||||||||||||||||||||||||||
The Heights at Olde Towne (Residential) | Portsmouth, VA | 10,475,000 | 2,513,000 | 14,957,000 | 42,000 | 2,513,000 | 14,999,000 | 17,512,000 | (986,000 | ) | 1972 | 12/21/07 | ||||||||||||||||||||||||||
The Myrtles at Olde Towne (Residential) | Portsmouth, VA | 20,100,000 | 3,698,000 | 33,319,000 | 88,000 | 3,698,000 | 33,407,000 | 37,105,000 | (2,104,000 | ) | 2004 | 12/21/07 | ||||||||||||||||||||||||||
Arboleda Apartments (Residential) | Cedar Park, TX | 17,651,000 | 4,051,000 | 25,928,000 | 74,000 | 4,051,000 | 26,002,000 | 30,053,000 | (1,515,000 | ) | 2007 | 03/31/08 | ||||||||||||||||||||||||||
Creekside Crossing (Residential) | Lithonia, GA | 17,000,000 | 5,233,000 | 20,699,000 | 79,000 | 5,233,000 | 20,778,000 | 26,011,000 | (1,242,000 | ) | 2003 | 06/26/08 | ||||||||||||||||||||||||||
Kedron Village (Residential) | Peachtree City, GA | 20,000,000 | 4,057,000 | 26,144,000 | 138,000 | 4,057,000 | 26,282,000 | 30,339,000 | (1,606,000 | ) | 2001 | 06/27/08 | ||||||||||||||||||||||||||
Canyon Ridge Apartments (Residential) | Hermitage, TN | 24,000,000 | 3,915,000 | 32,987,000 | 73,000 | 3,915,000 | 33,060,000 | 36,975,000 | (1,810,000 | ) | 2005 | 09/15/08 | ||||||||||||||||||||||||||
Total | $ | 218,095,000 | $ | 41,926,000 | $ | 304,865,000 | $ | 2,199,000 | $ | 41,926,000 | $ | 307,064,000 | $ | 348,990,000(c) | $ | (24,052,000 | ) | |||||||||||||||||||||
(a) | The cost capitalized subsequent to acquisition is net of dispositions. |
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ACCUMULATED DEPRECIATION — (Continued)
(b) | The changes in total real estate for the years ended December 31, 2009, 2008 and 2007 are as follows: |
Amount | ||||
Balance as of December 31, 2006 | $ | 63,869,000 | ||
Acquisitions | 159,909,000 | |||
Additions | 232,000 | |||
Dispositions | (72,000 | ) | ||
Balance as of December 31, 2007 | 223,938,000 | |||
Acquisitions | 122,942,000 | |||
Additions | 1,698,000 | |||
Dispositions | (681,000 | ) | ||
Balance as of December 31, 2008 | 347,897,000 | |||
Acquisitions | — | |||
Additions | 1,382,000 | |||
Dispositions | (289,000 | ) | ||
Balance as of December 31, 2009 | $ | 348,990,000 | ||
(c) | The aggregate cost of our real estate for federal income tax purposes is $354,032,000. | |
(d) | The changes in accumulated depreciation for the years ended December 31, 2009, 2008 and 2007 are as follows: |
Amount | ||||
Balance as of December 31, 2006 | $ | 188,000 | ||
Additions | 3,434,000 | |||
Dispositions | (70,000 | ) | ||
Balance as of December 31, 2007 | $ | 3,552,000 | ||
Additions | 9,260,000 | |||
Dispositions | (182,000 | ) | ||
Balance as of December 31, 2008 | $ | 12,630,000 | ||
Additions | 11,605,000 | |||
Dispositions | (183,000 | ) | ||
Balance as of December 31, 2009 | $ | 24,052,000 | ||
(e) | The cost of building and improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and improvements, ranging primarily from 10 to 40 years. Land improvements are depreciated over the estimated useful lives ranging primarily from five to 15 years. Furniture, fixtures and equipment is depreciated over the estimated useful lives ranging primarily from five to 15 years. |
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Table of Contents
ACCUMULATED DEPRECIATION — (Continued)
(b) | The changes in total real estate for the years ended December 31, 2009, 2008 and 2007 are as follows: |
Amount | ||||
Balance as of December 31, 2006 | $ | 63,869,000 | ||
Acquisitions | 159,909,000 | |||
Additions | 232,000 | |||
Dispositions | (72,000 | ) | ||
Balance as of December 31, 2007 | 223,938,000 | |||
Acquisitions | 122,942,000 | |||
Additions | 1,698,000 | |||
Dispositions | (681,000 | ) | ||
Balance as of December 31, 2008 | 347,897,000 | |||
Acquisitions | — | |||
Additions | 1,382,000 | |||
Dispositions | (289,000 | ) | ||
Balance as of December 31, 2009 | $ | 348,990,000 | ||
(c) | The aggregate cost of our real estate for federal income tax purposes is $354,032,000. | |
(d) | The changes in accumulated depreciation for the years ended December 31, 2009, 2008 and 2007 are as follows: |
Amount | ||||
Balance as of December 31, 2006 | $ | 188,000 | ||
Additions | 3,434,000 | |||
Dispositions | (70,000 | ) | ||
Balance as of December 31, 2007 | $ | 3,552,000 | ||
Additions | 9,260,000 | |||
Dispositions | (182,000 | ) | ||
Balance as of December 31, 2008 | $ | 12,630,000 | ||
Additions | 11,605,000 | |||
Dispositions | (183,000 | ) | ||
Balance as of December 31, 2009 | $ | 24,052,000 | ||
(e) | The cost of building and improvements is depreciated on a straight-line basis over the estimated useful lives of the buildings and improvements, ranging primarily from 10 to 40 years. Land improvements are depreciated over the estimated useful lives ranging primarily from five to 15 years. Furniture, fixtures and equipment is depreciated over the estimated useful lives ranging primarily from five to 15 years. |
F-57
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Grubb & Ellis Apartment REIT, Inc., General Partner of
Grubb & Ellis Apartment REIT Holdings, LP
November 24, 2010
F-58
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Nine Months Ended | ||||||||
September 30, 2010 | Year Ended | |||||||
(Unaudited) | December 31, 2009 | |||||||
Revenue | ||||||||
Rental income | $ | 15,987,394 | $ | 21,946,532 | ||||
Other | 1,594,395 | 2,119,117 | ||||||
Total Revenue | 17,581,789 | 24,065,649 | ||||||
Certain Expenses | ||||||||
Operating and maintenance | 2,049,524 | 2,715,211 | ||||||
Utilities | 1,233,732 | 1,549,339 | ||||||
Taxes and insurance | 2,893,433 | 3,703,546 | ||||||
General and administrative | 2,509,684 | 3,669,370 | ||||||
Mortgage Interest | 5,952,955 | 7,907,652 | ||||||
Total Certain Expenses | 14,639,328 | 19,545,118 | ||||||
Revenue in Excess of Certain Expenses | $ | 2,942,461 | $ | 4,520,531 | ||||
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For the Nine Months Ended September 30, 2010 (Unaudited)
and the Year Ended December 31, 2009
Apartment | ||||
Property | Units | Location | ||
Mission Barton Creek | 298 | Austin, TX | ||
Mission Battleground Park | 240 | Greensboro, NC | ||
Mission Brentwood | 380 | Brentwood, TN | ||
Mission Briley Parkway | 360 | Nashville, TN | ||
Mission Capital Crossing | 356 | Raleigh, NC | ||
Mission Mayfield Downs | 258 | Grand Prairie, TX | ||
Mission Preston Wood | 194 | Richardson, TX | ||
Mission Rock Ridge | 226 | Arlington, TX | ||
Mission Tanglewood | 364 | Austin, TX |
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Property | Balance | Rate | Maturity | Payment Terms | ||||||||
Mission Barton Creek | $ | 21,200,000 | Freddie Mac Reference Bill rate + 300 bps (3.06% at December 31, 2009) | November, 2015 | Interest only is payable monthly through November, 2010, thereafter principal and interest is payable monthly through the loan’s maturity. | |||||||
Mission Battleground Park | $ | 11,200,000 | 6.322% | August, 2016 | Interest only is payable monthly through August, 2011, thereafter principal and interest is payable monthly through the loan’s maturity date. | |||||||
Mission Brentwood | $ | 20,000,000 | 5.8875% | November, 2016 | Interest only is payable monthly through October, 2011, thereafter principal and interest is payable monthly through the loan’s maturity date. |
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Property | Balance | Rate | Maturity | Payment Terms | ||||||||
Mission Briley Parkway | $ | 14,550,000 | 6.326 | % | September, 2016 | Interest only is payable monthly through August, 2011, thereafter principal and interest is payable monthly through the loan’s maturity date. | ||||||
Mission Capital Crossing | $ | 17,700,000 | 5.93 | % | February, 2018 | Interest only is payable monthly through February, 2013, thereafter principal and interest is payable monthly through the loan’s maturity date. | ||||||
Mission Mayfield Downs | $ | 15,250,000 | 5.516 | % | June, 2017 | Interest only is payable monthly through June, 2012, thereafter principal and interest is payable monthly through the loan’s maturity date. | ||||||
Mission Mayfield Downs | $ | 985,000 | 12.75 | % | June, 2017 | Interest only is payable monthly through June, 2012, thereafter principal and interest is payable monthly through the loan’s maturity date. | ||||||
Mission Preston Wood | $ | 8,400,000 | 5.243 | % | October, 2015 | Interest only is payable monthly through October, 2010, thereafter principal and interest is payable monthly through the loan’s maturity date. | ||||||
Mission Tanglewood | $ | 15,275,000 | 6.45 | % | February, 2019 | Interest only is payable monthly through February, 2012, thereafter principal and interest is payable monthly through the loan’s maturity date. |
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As of September 30, 2010 and for the Nine Months Ended September 30, 2010 and
for the Year Ended December 31, 2009
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As of September 30, 2010
Company Historical (A) | Acquisition of the DST Properties (B) | Company Pro Forma | ||||||||||
ASSETS | ||||||||||||
Real estate investments: | ||||||||||||
Operating properties, net | $ | 353,738,000 | $ | 158,061,000 | $ | 511,799,000 | ||||||
Cash and cash equivalents | 7,334,000 | (7,334,000 | ) | — | ||||||||
Accounts and other receivables | 716,000 | — | 716,000 | |||||||||
Restricted cash | 4,827,000 | 757,000 | 5,584,000 | |||||||||
Real estate and escrow deposits | 2,370,000 | — | 2,370,000 | |||||||||
Identified intangible assets, net | 342,000 | 5,505,000 | 5,847,000 | |||||||||
Other assets, net | 2,232,000 | — | 2,232,000 | |||||||||
Total assets | $ | 371,559,000 | $ | 156,989,000 | $ | 528,548,000 | ||||||
LIABILITIES AND CAPITAL | ||||||||||||
Liabilities: | ||||||||||||
Mortgage loan payables, net | $ | 244,251,000 | $ | 131,107,000 | $ | 375,358,000 | ||||||
Unsecured note payables to affiliate | 7,750,000 | — | 7,750,000 | |||||||||
Short term notes | 1,570,000 | — | 1,570,000 | |||||||||
Accounts payable and accrued liabilities | 7,532,000 | — | 7,532,000 | |||||||||
Accounts payable due to affiliates, net | 155,000 | — | 155,000 | |||||||||
Security deposits, prepaid rent and other liabilities | 1,350,000 | — | 1,350,000 | |||||||||
Total liabilities | 262,608,000 | 131,107,000 | 393,715,000 | |||||||||
Commitments and contingencies | ||||||||||||
Redeemable special limited partnership interest | — | — | — | |||||||||
Redeemable partnership interests | — | 33,216,000 | (C) | 33,216,000 | ||||||||
Capital: | ||||||||||||
Partners’ capital: | ||||||||||||
Partnership units - 19,236,268 units (historical) and 23,056,934 units (pro forma) held by general partner and 100 units (historical & pro forma) held by the limited partner | 108,951,000 | (7,334,000 | ) | (D) | 101,617,000 | |||||||
Total capital | 108,951,000 | (7,334,000 | ) | 101,617,000 | ||||||||
Total liabilities and capital | $ | 371,559,000 | $ | 156,989,000 | $ | 528,548,000 | ||||||
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For the Nine Months Ended September 30, 2010
Acquisition of the Mission | Acquisition of the | |||||||||||||||
Company Historical (E) | Ridge Property (F) | DST Properties (K) | Company Pro Forma | |||||||||||||
Revenues: | ||||||||||||||||
Rental income and other property revenues | $ | 29,070,000 | $ | 1,886,000 | $ | 15,696,000 | $ | 46,652,000 | ||||||||
Expenses: | ||||||||||||||||
Rental expenses | 13,677,000 | 975,000 | (G) | 7,577,000 | (G) | 22,229,000 | ||||||||||
General and administrative | 1,082,000 | — | — | 1,082,000 | ||||||||||||
Acquisition related expenses | 3,606,000 | (1,504,000 | ) | (H) | (962,000 | ) | (L) | 1,140,000 | ||||||||
Depreciation and amortization | 9,367,000 | 564,000 | (I) | 5,089,000 | (M) | 15,020,000 | ||||||||||
Total expenses | 27,732,000 | 35,000 | 11,704,000 | 39,471,000 | ||||||||||||
Income from operations | 1,338,000 | 1,851,000 | 3,992,000 | 7,181,000 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount): | ||||||||||||||||
Interest expense related to unsecured note payables to affiliate | (286,000 | ) | — | — | (286,000 | ) | ||||||||||
Interest expense related to mortgage loan payables, net | (8,454,000 | ) | (454,000 | ) | (J) | (4,479,000 | ) | (N) | (13,387,000 | ) | ||||||
Interest and dividend income | 12,000 | — | — | 12,000 | ||||||||||||
Net loss | $ | (7,390,000 | ) | $ | 1,397,000 | $ | (487,000 | ) | $ | (6,480,000 | ) | |||||
Net loss per partnership unit — basic and diluted | $ | (0.41 | ) | $ | (0.29 | ) | ||||||||||
Weighted average partnership units outstanding — basic and diluted | 18,022,970 | 22,667,581 | (O) | |||||||||||||
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For the Year Ended December 31, 2009
Acquisition of the Mission | Acquisition of the | |||||||||||||||
Company Historical (P) | Ridge Property (Q) | DST Properties (V) | Company Pro Forma | |||||||||||||
Revenues: | ||||||||||||||||
Rental income and other property revenues | $ | 37,465,000 | $ | 2,550,000 | $ | 21,516,000 | $ | 61,531,000 | ||||||||
Expenses: | ||||||||||||||||
Rental expenses | 18,122,000 | 1,253,000 | (R) | 10,022,000 | (R) | 29,397,000 | ||||||||||
General and administrative | 1,647,000 | — | — | 1,647,000 | ||||||||||||
Acquisition related expenses | 12,000 | — | (S) | — | (W) | 12,000 | ||||||||||
Depreciation and amortization | 11,854,000 | 1,004,000 | (T) | 9,093,000 | (X) | 21,951,000 | ||||||||||
Total expenses | 31,635,000 | 2,257,000 | 19,115,000 | 53,007,000 | ||||||||||||
Income from operations | 5,830,000 | 293,000 | 2,401,000 | 8,524,000 | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense (including amortization of deferred financing costs and debt discount): | ||||||||||||||||
Interest expense related to unsecured note payables to affiliate | (544,000 | ) | — | — | (544,000 | ) | ||||||||||
Interest expense related to mortgage loan payables, net | (10,796,000 | ) | (607,000 | ) | (U) | (5,936,000 | ) | (Y) | (17,339,000 | ) | ||||||
Interest expense related to line of credit from our general partner | (212,000 | ) | — | — | (212,000 | ) | ||||||||||
Interest and dividend income | 3,000 | — | — | 3,000 | ||||||||||||
Net loss | $ | (5,719,000 | ) | $ | (314,000 | ) | $ | (3,535,000 | ) | $ | (9,568,000 | ) | ||||
Net loss per partnership unit — basic and diluted | $ | (0.35 | ) | $ | (0.45 | ) | ||||||||||
Weighted average partnership units outstanding — basic and diluted | 16,227,024 | 21,419,222 | (Z) | |||||||||||||
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Securities and Exchange Commission registration fee | $ | 2,368.30 | ||
Printing and engraving fees* | 100,000 | |||
Legal fees and expenses* | ||||
Accounting fees and expenses* | * | |||
Blue sky fees and expenses* | * | |||
Transfer agent and registrar fees* | * | |||
Miscellaneous expenses* | * | |||
Total* | $ | * | ||
* | To be filed by amendment. |
• | the act or omission of the director or officer was material to the matter giving rise to the proceeding and (1) was committed in bad faith or (2) was the result of active and deliberate dishonesty; | ||
• | the director or officer actually received an improper personal benefit in money, property or services; or | ||
• | in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. |
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• | the party was acting on behalf of or performing services on the part of the Apartment REIT; | ||
• | the Apartment REIT’s directors, our advisor or our advisor’s affiliates have determined, in good faith, that the course of conduct which caused the loss or liability was in the best interest of the Apartment REIT; | ||
• | such indemnification or agreement to be held harmless is recoverable only out of the Apartment REIT’s net assets and not from its stockholders; and | ||
• | such liability or loss was not the result of: | ||
• | negligence or misconduct by the Apartment REIT’s directors (other than the independent directors) or our advisor or their respective affiliates; or | ||
• | gross negligence or willful misconduct by the Apartment REIT’s independent directors. |
• | there has been a successful determination on the merits of each count involving alleged securities law violations as to the party seeking indemnification; | ||
• | such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the party seeking indemnification; or | ||
• | a court of competent jurisdiction approves a settlement of the claims against the party seeking indemnification and finds that indemnification of the settlement and related costs should be made and the court considering the request has been advised of the position of the SEC and of the published opinions of any state securities regulatory authority in which shares of the Apartment REIT’s stock were offered and sold as to indemnification for securities law violations. |
• | the proceeding legal action relates to acts or omissions with respect to the performance of duties or services by the indemnified party for or on behalf of the Apartment REIT; | ||
• | the legal proceeding is initiated by a third party who is not a stockholder of the Apartment REIT or the legal proceeding is initiated by a stockholder of the Apartment REIT acting in his or her capacity as such and a court of competent jurisdiction specifically approves such advancement; | ||
• | the party receiving such advances furnishes the Apartment REIT with a written statement of his or her good faith belief that he or she has met the standard of conduct described above; and | ||
• | the indemnified party receiving such advances furnishes to the Apartment REIT a written undertaking, personally executed on his or her behalf, to repay the advanced funds to the Apartment REIT, together with the applicable legal rate of interest thereon, if it is ultimately determined that he or she did not meet the standard of conduct described above and is not entitled to indemnification. |
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Exhibit Number | Description | |
2.1 | Asset Purchase Agreement, dated August 27, 2010, by and among MR Property Management, LLC, Mission Residential Management, LLC, MR Holdings, LLC and Christopher C. Finlay (included as Exhibit 10.01 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.2 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Tanglewood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.3 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Capital Crossing, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.4 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Barton Creek, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.5 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Briley Parkway, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.6 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Preston Wood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.7 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Battleground Park, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.8 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Mayfield Downs, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.9 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Brentwood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) |
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Exhibit Number | Description | |
2.10 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Rock Ridge, L.P. and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
3.1** | Amended and Restated Agreement of Limited Partnership of Grubb & Ellis Apartment REIT Holdings, LP | |
3.3 | Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated by reference herein) | |
3.4 | Articles of Amendment to the Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on December 10, 2007 and incorporated by reference herein) | |
3.5 | Second Articles of Amendment to the Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT’s Inc.’s Form 8-K filed on June 23, 2010 and incorporated by reference herein) | |
3.6 | Amended and Restated Bylaws of the Apartment REIT (included as Exhibit 3.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated by reference herein) | |
3.7 | Amendment to Amended and Restated Bylaws of the Apartment REIT (included as Exhibit 3.6 to Post-Effective Amendment No. 1 to Grubb & Ellis Apartment REIT, Inc.’s Registration Statement on Form S-11 (File No. 333-130945) filed January 31, 2007 and incorporated by reference) | |
5.1** | Opinion of Hunton & Williams LLP, as to the legality of the securities being registered | |
8.1** | Opinion of Hunton & Williams LLP, as to tax matters | |
8.2* | Opinion of Morris, Manning & Martin, LLP, as to tax matters | |
10.1** | Amended and Restated Distribution Reinvestment Plan | |
10.2 ** | Share Repurchase Plan | |
10.3 | 2006 Incentive Award Plan (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Registration Statement on Form S-11, Amendment No. 3 filed on April 21, 2006 (File No. 333-130945) and incorporated herein by reference) | |
10.4 | First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on July 21, 2008 and incorporated herein by reference) | |
10.4.1 | First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on July 21, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.4.2 | Form of Amendment No. 2 to the First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed on December 2, 2008 and incorporated herein by reference) | |
10.5 | Escrow Agreement (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | |
10.6 | Amendment to 2006 Incentive Award Plan (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | |
10.7 | Assignment of Contract dated October 30, 2006 by Triple Net Properties, LLC to Apartment REIT Walker Ranch, L.P. (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.8 | Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.9 | Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.10 | Revolving Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.11 | Swingline Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.12 | Guaranty dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.13 | Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.14 | Mezzanine Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.15 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.15 | Second Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.16 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.16 | Note (Mezzanine Loan) for the Walker Ranch Property dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.17 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.17 | Guaranty (Mezzanine Loan) dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.18 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.18 | Second Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.19 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.19 | Senior Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.20 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.20 | Mezzanine Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.21 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.21 | Assignment and Acceptance Agreement dated November 22, 2006 by and among Wachovia Bank, National Association, LaSalle Bank National Association and Wachovia Bank, National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.22 | First Amendment to Credit Agreement dated November 22, 2006 among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, Wachovia Bank, National Association and the Lenders (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.23 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.24 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and LaSalle Bank National Association (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.25 | Amendment to the Contract of Sale dated November 27, 2006 by and between TR Hidden Lake Partners, Ltd. and Triple Net Properties, LLC (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.26 | Deed of Trust, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents by El Dorado Apartments, LLC for the benefit of Royal Bank of Canada, dated November 29, 2006 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.27 | Assignment of Contract dated December 28, 2006 by Triple Net Properties, LLC to Apartment REIT Hidden Lakes, L.P. (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.28 | Promissory Note dated December 28, 2006 issued by Apartment REIT Hidden Lakes, LP to Wachovia Bank, National Association (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.35 | Unsecured Promissory Note dated December 28, 2006 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.16 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.36 | Purchase and Sale Agreement by and between Northspring Park, LLC and Triple Net Properties, LLC entered into as of February 21, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.37 | Purchase and Sale Agreement dated February 21, 2007 by and between FS Towne Crossing, LTD and Triple Net Properties, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.38 | Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated February 21, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.39 | Deed of Trust, Security Agreement and Fixture Filing made and given by Braemar Housing Limited Partnership to J. Lindsay Stradley, Jr. as Trustee for Transamerica Occidental Life Insurance Company as of March 25, 2005 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.40 | Promissory Note dated April 12, 2007 issued by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.41 | Deed of Trust, Security Agreement and Fixture Filing dated April 12, 2007 by Apartment REIT Walker Ranch, LP for the benefit of Wachovia Bank, National Association (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.42 | Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.43 | Assignment of Leases and Rents dated April 12, 2007 by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.44 | Assignment of Warranties and Other Contract Rights dated April 12, 2007 by Apartment REIT Walker Ranch, LP in favor of Wachovia Bank, National Association (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.45 | Environmental Indemnity Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.46 | SEC Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.47 | Purchase and Sale Agreement by and between Braemar Housing Limited Partnership and Triple Net Properties, LLC entered into as of April 26, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.48 | Secured Promissory Note issued by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.49 | Absolute Assignment of Leases and Rents by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.50 | Sale Agreement dated June 8, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.51 | Reinstatement of and First Amendment to and Joinder and Ratification of Purchase and Sale Agreement dated June 8, 2007 by and between FS Towne Crossing, LP, Fountain Green, LLC, and Triple Net Properties, LLC (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.52 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between North Spring Park, LLC and Triple Net Properties, LLC made as of June 12, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.53 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Park at North Gate, LP made as of June 12, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.54 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated June 12, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.55 | Amendment to Sale Agreement dated June 14, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.56 | Assignment and Assumption of Real Estate Purchase Agreement by and between Triple Net Properties, LLC and Apartment REIT Residences at Braemar, LLC as of June 29, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.57 | Loan Assumption and Modification Agreement by and between Apartment REIT Residences at Braemar, LLC, and Transamerica Occidental Life Insurance Company and is joined by Braemar Housing Limited Partnership, et al. made and entered into and effective as of June 29, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.58 | Supplemental Carveout Guarantee and Indemnity Agreement by NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.59 | Supplemental Environmental Indemnity Agreement by Apartment REIT Residences at Braemar, LLC and NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.60 | Assignment and Subordination of Management Agreement by Apartment REIT Residences at Braemar, LLC, Triple Net Properties Realty, Inc. and Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.61 | Unsecured Promissory Note dated June 29, 2007 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.62 | Amendment Letter regarding Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Wachovia Bank, National Association and LaSalle Bank National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 13, 2007 and incorporated herein by reference) | |
10.63 | Amendment Letter regarding Mezzanine Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc. and Wachovia Bank, National Association (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 13, 2007 and incorporated herein by reference) | |
10.64 | Sale Agreement Assignment dated August 1, 2007 by and between Triple Net Properties, LLC and Apartment REIT Bay Point Resort, LLC (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.65 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC in favor of PNC ARCS LLC (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.66 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC to Lawyers Title Insurance Corporation for the benefit of PNC ARCS LLC (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.67 | Unsecured Promissory Note dated August 1, 2007 by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.68 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Park at North Gate, LP in favor of PNC ARCS LLC (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.69 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Park at North Gate, LP to Lawyers Title Insurance Company for the benefit of PNC ARCS LLC (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.70 | Assumption Agreement dated August 24, 2007 by and among FS Towne Crossing, LP, Bowler Holdings, LLC, Fountain Green, LLC, Apartment REIT Towne Crossing, LP, and the Federal Home Loan Mortgage Corporation acknowledged and consented to by Wendell A. Jacobson (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.71 | Guaranty dated August 28, 2007 by NNN Apartment REIT, Inc. for the benefit of Federal Home Loan Mortgage Corporation (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.72 | Assignment of Contract dated August 29, 2007 by Triple Net Properties, LLC to Apartment REIT Towne Crossing, LP (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.73 | Unsecured Promissory Note dated August 29, 2007 by NNN Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc. (included Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.74 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Villas of El Dorado, LLC, dated November 1, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.75 | Agreement of Assumption and Modification of Security Instrument and Other Loan Documents by and among El Dorado Apartments, LLC; Wendell A. Jacobson; Apartment REIT Villas of El Dorado, LLC; NNN Apartment REIT, Inc.; and The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated as of November 1, 2007 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.76 | Limited Guaranty by NNN Apartment REIT, Inc. in favor of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.77 | Environmental Indemnity Agreement by Apartment REIT Villas of El Dorado, LLC and NNN Apartment REIT, Inc. for the benefit of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.78 | Loan Agreement by and between NNN Apartment REIT, Inc. and Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.79 | Promissory Note by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.80 | Pledge Agreement (Partnership Interests) by and between Wachovia Bank, National Association and NNN Apartment REIT Holdings, L.P., dated November 1, 2007 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.81 | Promissory Note by El Dorado Apartments, LLC in favor of Royal Bank of Canada, dated November 29, 2007 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.82 | Purchase and Sale Agreement by and between Fort Nelson Apartments, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.83 | Purchase and Sale Agreement by and between The Myrtles at Old Towne, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.84 | Amendment Letter by and between Triple Net Properties, LLC, Fort Nelson Apartments, L.L.C. and The Myrtles at Old Towne, L.L.C., dated December 19, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.85 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.86 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.87 | Multifamily Note by G&E Apartment REIT The Heights at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.88 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.89 | Guaranty by G&E Apartment REIT The Heights at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.90 | Multifamily Note by G&E Apartment REIT The Myrtles at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.91 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.92 | Guaranty by G&E Apartment REIT The Myrtles at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.93 | First Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated December 21, 2007 (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.94 | First Amended and Restated Pledge Agreement by and between Wachovia Bank, N.A. and Grubb and Ellis Apartment REIT Holdings, L.P., dated December 21, 2007 (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.95 | Unsecured Promissory Note issued by Grubb and Ellis Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc., dated December 21, 2007 (included as Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.96 | Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated January 8, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.97 | Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated February 26, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.98 | Second Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 7, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.99 | Third Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 27, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.100 | Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Arboleda, LLC, dated March 27, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.101 | Fixed+1 Multifamily Note by G&E Apartment REIT Arboleda, LLC in favor of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.102 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing by G&E Apartment REIT Arboleda, LLC for the benefit of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.103 | Second Amendment to and Waiver of Loan Agreement by and between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.104 | Amended and Restated Promissory Note by Grubb & Ellis Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.105 | Second Amended and Restated Pledge Agreement (Membership and Partnership Interests) by and between Wachovia Bank, National Association and Grubb & Ellis Apartment REIT Holdings, LP, dated March 31, 2008 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.106 | Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 12, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.107 | First Amendment to Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 18, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.108 | Purchase and Sale Agreement by and between AMLI at Peachtree City-Phase I, LLC, AMLI at Peachtree City-Phase II, LLC and Grubb and Ellis Realty Investors, LLC, dated June 23, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.109 | Purchase and Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Creekside Crossing, LLC, dated June 26, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.110 | Multifamily Note by G&E Apartment REIT Creekside Crossing, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.111 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Creekside Crossing, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.112 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.113 | Multifamily Note by G&E Apartment REIT Kedron Village, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.9 to its Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.114 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Kedron Village, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.115 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.116 | Third Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated June 26, 2008 (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.117 | Third Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated June 26, 2008 (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.118 | Assignment and Assumption of Real Estate Purchase Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Kedron Village, LLC, dated June 27, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.119 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated June 27, 2008 (included Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.120 | Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated July 10, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.121 | First Amendment to Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated August 15, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.122 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.123 | Multifamily Note by G&E Apartment REIT Canyon Ridge, LLC to the order of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.124 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Canyon Ridge, LLC for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.125 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.126 | Fourth Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated September 15, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.127 | Fourth Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated September 15, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.128 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated September 15, 2008 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.129 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K/A filed September 25, 2008 and incorporated herein by reference) | |
21.1** | Subsidiaries of Grubb & Ellis Apartment REIT Holdings, LP | |
23.1** | Consent of Hunton & Williams LLP (included in Exhibit 5.1) | |
23.2** | Consent of Hunton & Williams LLP (included in Exhibit 8.1) | |
23.3* | Consent of Deloitte & Touche LLP | |
23.4* | Consent of Grant Thornton LLP | |
24.1** | Power of Attorney (included on Signature Page) |
* | Filed herewith. | |
** | To be filed by amendment. |
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GRUBB & ELLIS APARTMENT REIT HOLDINGS, LP | ||||
By: | Grubb & Ellis Apartment REIT, Inc., as general partner | |||
By: | /s/ Stanley J. Olander, Jr. | |||
Name: Stanley J. Olander, Jr. | ||||
Title: Chief Executive Officer, President, Chief Financial Officer and Chairman of the Board | ||||
Signature | Title | Date | ||
/s/ Stanley J. Olander, Jr. | Chief Executive Officer, President, Chief Financial | November 24, 2010 | ||
Officer and Chairman of the Board | ||||
(Principal Executive Officer, Principal Financial | ||||
Officer and Principal Accounting Officer) | ||||
/s/ Andrea R. Biller | Director | November 24, 2010 | ||
/s/ Glenn W. Bunting | Director | November 24, 2010 | ||
/s/ Richard S. Johnson | Director | November 24, 2010 | ||
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Exhibit Number | Description | |
2.1 | Asset Purchase Agreement, dated August 27, 2010, by and among MR Property Management, LLC, Mission Residential Management, LLC, MR Holdings, LLC and Christopher C. Finlay (included as Exhibit 10.01 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.2 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Tanglewood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.3 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Capital Crossing, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.4 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Barton Creek, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.5 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Briley Parkway, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.6 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Preston Wood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.7 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Battleground Park, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.8 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Mayfield Downs, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.9 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Brentwood, DST and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) | |
2.10 | Purchase and Sale Agreement, dated August 27, 2010, by and between Mission Rock Ridge, L.P. and Grubb & Ellis Apartment REIT Holdings, LP (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2010 and incorporated herein by reference) |
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Exhibit Number | Description | |
3.1** | Amended and Restated Agreement of Limited Partnership of Grubb & Ellis Apartment REIT Holdings, LP (including as Exhibit 3.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated by reference herein) | |
3.3 | Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated by reference herein) | |
3.4 | Articles of Amendment to the Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on December 10, 2007 and incorporated by reference herein) | |
3.5 | Second Articles of Amendment to the Articles of Amendment and Restatement of the Apartment REIT (included as Exhibit 3.1 to Grubb & Ellis Apartment REIT’s Inc.’s Form 8-K filed on June 23, 2010 and incorporated by reference herein) | |
3.6 | Amended and Restated Bylaws of the Apartment REIT (included as Exhibit 3.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated by reference herein) | |
3.7 | Amendment to Amended and Restated Bylaws of the Apartment REIT (included as Exhibit 3.6 to Post-Effective Amendment No. 1 to Grubb & Ellis Apartment REIT, Inc.’s Registration Statement on Form S-11 (File No. 333-130945) filed January 31, 2007 and incorporated by reference) | |
5.1** | Opinion of Hunton & Williams LLP, as to the legality of the securities being registered | |
8.1** | Opinion of Hunton & Williams LLP, as to tax matters | |
8.2** | Opinion of Morris, Manning & Martin, LLP, as to tax matters | |
10.1** | Amended and Restated Distribution Reinvestment Plan | |
10.2** | Share Repurchase Plan | |
10.3 | 2006 Incentive Award Plan (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Registration Statement on Form S-11, Amendment No. 3 filed on April 21, 2006 (File No. 333-130945) and incorporated herein by reference) | |
10.4 | First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on July 21, 2008 and incorporated herein by reference) | |
10.4.1 | First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on July 21, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.4.2 | Form of Amendment No. 2 to the First Amended and Restated Advisory Agreement between Grubb & Ellis Apartment REIT, Inc. and Grubb & Ellis Apartment REIT Advisor, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed on December 2, 2008 and incorporated herein by reference) | |
10.5 | Escrow Agreement (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | |
10.6 | Amendment to 2006 Incentive Award Plan (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 10-Q filed on November 9, 2006 and incorporated herein by reference) | |
10.7 | Assignment of Contract dated October 30, 2006 by Triple Net Properties, LLC to Apartment REIT Walker Ranch, L.P. (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.8 | Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.9 | Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.10 | Revolving Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.11 | Swingline Note dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.12 | Guaranty dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.13 | Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.14 | Mezzanine Credit Agreement dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.15 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.15 | Second Deed of Trust, Security Agreement and Fixture Filing dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.16 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.16 | Note (Mezzanine Loan) for the Walker Ranch Property dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.17 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.17 | Guaranty (Mezzanine Loan) dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.18 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.18 | Second Assignment of Leases and Rents dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.19 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.19 | Senior Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.20 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.20 | Mezzanine Credit Agreement Waiver dated October 31, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.21 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 3, 2006 and incorporated herein by reference) | |
10.21 | Assignment and Acceptance Agreement dated November 22, 2006 by and among Wachovia Bank, National Association, LaSalle Bank National Association and Wachovia Bank, National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.22 | First Amendment to Credit Agreement dated November 22, 2006 among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Apartment REIT Walker Ranch, LP and Apartment REIT Walker Ranch GP, LLC, Wachovia Bank, National Association and the Lenders (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.23 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and Wachovia Bank, National Association (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) | |
10.24 | Revolving Note dated November 22, 2006 by and among NNN Apartment REIT Holdings, L.P. and LaSalle Bank National Association (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 28, 2006 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.25 | Amendment to the Contract of Sale dated November 27, 2006 by and between TR Hidden Lake Partners, Ltd. and Triple Net Properties, LLC (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.26 | Deed of Trust, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents by El Dorado Apartments, LLC for the benefit of Royal Bank of Canada, dated November 29, 2006 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.27 | Assignment of Contract dated December 28, 2006 by Triple Net Properties, LLC to Apartment REIT Hidden Lakes, L.P. (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.28 | Promissory Note dated December 28, 2006 issued by Apartment REIT Hidden Lakes, LP to Wachovia Bank, National Association (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.35 | Unsecured Promissory Note dated December 28, 2006 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.16 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on January 4, 2007 and incorporated herein by reference) | |
10.36 | Purchase and Sale Agreement by and between Northspring Park, LLC and Triple Net Properties, LLC entered into as of February 21, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.37 | Purchase and Sale Agreement dated February 21, 2007 by and between FS Towne Crossing, LTD and Triple Net Properties, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.38 | Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated February 21, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.39 | Deed of Trust, Security Agreement and Fixture Filing made and given by Braemar Housing Limited Partnership to J. Lindsay Stradley, Jr. as Trustee for Transamerica Occidental Life Insurance Company as of March 25, 2005 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.40 | Promissory Note dated April 12, 2007 issued by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.41 | Deed of Trust, Security Agreement and Fixture Filing dated April 12, 2007 by Apartment REIT Walker Ranch, LP for the benefit of Wachovia Bank, National Association (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.42 | Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.43 | Assignment of Leases and Rents dated April 12, 2007 by Apartment REIT Walker Ranch, LP to Wachovia Bank, National Association (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.44 | Assignment of Warranties and Other Contract Rights dated April 12, 2007 by Apartment REIT Walker Ranch, LP in favor of Wachovia Bank, National Association (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.45 | Environmental Indemnity Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.46 | SEC Indemnity and Guaranty Agreement dated April 12, 2007 by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on April 17, 2007 and incorporated herein by reference) | |
10.47 | Purchase and Sale Agreement by and between Braemar Housing Limited Partnership and Triple Net Properties, LLC entered into as of April 26, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.48 | Secured Promissory Note issued by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.49 | Absolute Assignment of Leases and Rents by Braemar Housing Limited Partnership in favor of Transamerica Occidental Life Insurance Company dated May 25, 2005 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.50 | Sale Agreement dated June 8, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.51 | Reinstatement of and First Amendment to and Joinder and Ratification of Purchase and Sale Agreement dated June 8, 2007 by and between FS Towne Crossing, LP, Fountain Green, LLC, and Triple Net Properties, LLC (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.52 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between North Spring Park, LLC and Triple Net Properties, LLC made as of June 12, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.53 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Park at North Gate, LP made as of June 12, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on June 18, 2007 and incorporated herein by reference) | |
10.54 | Reinstatement of and First Amendment to Purchase and Sale Agreement by and between El Dorado Apartments, LLC and Triple Net Properties, LLC, dated June 12, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.55 | Amendment to Sale Agreement dated June 14, 2007 by and between Bay Point Resort Corpus Christi, L.P. and Triple Net Properties, LLC (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.56 | Assignment and Assumption of Real Estate Purchase Agreement by and between Triple Net Properties, LLC and Apartment REIT Residences at Braemar, LLC as of June 29, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.57 | Loan Assumption and Modification Agreement by and between Apartment REIT Residences at Braemar, LLC, and Transamerica Occidental Life Insurance Company and is joined by Braemar Housing Limited Partnership, et al. made and entered into and effective as of June 29, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.58 | Supplemental Carveout Guarantee and Indemnity Agreement by NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.59 | Supplemental Environmental Indemnity Agreement by Apartment REIT Residences at Braemar, LLC and NNN Apartment REIT, Inc. in favor of Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.60 | Assignment and Subordination of Management Agreement by Apartment REIT Residences at Braemar, LLC, Triple Net Properties Realty, Inc. and Transamerica Occidental Life Insurance Company dated June 29, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) | |
10.61 | Unsecured Promissory Note dated June 29, 2007 issued by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 6, 2007 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.62 | Amendment Letter regarding Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc., Wachovia Bank, National Association and LaSalle Bank National Association (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 13, 2007 and incorporated herein by reference) | |
10.63 | Amendment Letter regarding Mezzanine Credit Agreement dated July 10, 2007 by and among NNN Apartment REIT Holdings, L.P., NNN Apartment REIT, Inc. and Wachovia Bank, National Association (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed July 13, 2007 and incorporated herein by reference) | |
10.64 | Sale Agreement Assignment dated August 1, 2007 by and between Triple Net Properties, LLC and Apartment REIT Bay Point Resort, LLC (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.65 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC in favor of PNC ARCS LLC (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.66 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Bay Point Resort, LLC to Lawyers Title Insurance Corporation for the benefit of PNC ARCS LLC (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.67 | Unsecured Promissory Note dated August 1, 2007 by NNN Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc. (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.68 | Fixed+1 Multifamily Note dated August 1, 2007 by Apartment REIT Park at North Gate, LP in favor of PNC ARCS LLC (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.69 | Multifamily Deed of Trust, Assignment of Rents, and Security Agreement and Fixture Filing dated August 1, 2007 by Apartment REIT Park at North Gate, LP to Lawyers Title Insurance Company for the benefit of PNC ARCS LLC (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 7, 2007 and incorporated herein by reference) | |
10.70 | Assumption Agreement dated August 24, 2007 by and among FS Towne Crossing, LP, Bowler Holdings, LLC, Fountain Green, LLC, Apartment REIT Towne Crossing, LP, and the Federal Home Loan Mortgage Corporation acknowledged and consented to by Wendell A. Jacobson (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.71 | Guaranty dated August 28, 2007 by NNN Apartment REIT, Inc. for the benefit of Federal Home Loan Mortgage Corporation (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.72 | Assignment of Contract dated August 29, 2007 by Triple Net Properties, LLC to Apartment REIT Towne Crossing, LP (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.73 | Unsecured Promissory Note dated August 29, 2007 by NNN Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc. (included Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on August 31, 2007 and incorporated herein by reference) | |
10.74 | Assignment of Contract by Triple Net Properties, LLC to Apartment REIT Villas of El Dorado, LLC, dated November 1, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.75 | Agreement of Assumption and Modification of Security Instrument and Other Loan Documents by and among El Dorado Apartments, LLC; Wendell A. Jacobson; Apartment REIT Villas of El Dorado, LLC; NNN Apartment REIT, Inc.; and The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated as of November 1, 2007 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.76 | Limited Guaranty by NNN Apartment REIT, Inc. in favor of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.77 | Environmental Indemnity Agreement by Apartment REIT Villas of El Dorado, LLC and NNN Apartment REIT, Inc. for the benefit of The Bank of New York Trust Company, National Association, as Trustee for the Registered Holders of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-IQ14, dated November 1, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.78 | Loan Agreement by and between NNN Apartment REIT, Inc. and Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.79 | Promissory Note by NNN Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated November 1, 2007 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.80 | Pledge Agreement (Partnership Interests) by and between Wachovia Bank, National Association and NNN Apartment REIT Holdings, L.P., dated November 1, 2007 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.81 | Promissory Note by El Dorado Apartments, LLC in favor of Royal Bank of Canada, dated November 29, 2007 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Form 8-K filed on November 7, 2007 and incorporated herein by reference) | |
10.82 | Purchase and Sale Agreement by and between Fort Nelson Apartments, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.83 | Purchase and Sale Agreement by and between The Myrtles at Old Towne, L.L.C. and Triple Net Properties, LLC, dated December 10, 2007 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.84 | Amendment Letter by and between Triple Net Properties, LLC, Fort Nelson Apartments, L.L.C. and The Myrtles at Old Towne, L.L.C., dated December 19, 2007 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.85 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.86 | Sale Agreement Assignment by and between Triple Net, Properties, LLC and G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.87 | Multifamily Note by G&E Apartment REIT The Heights at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.88 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Heights at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.89 | Guaranty by G&E Apartment REIT The Heights at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.90 | Multifamily Note by G&E Apartment REIT The Myrtles at Old Towne, LLC issued to Capmark Bank for Freddie Mac, dated December 21, 2007 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.91 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement, by G&E Apartment REIT The Myrtles at Old Towne, LLC, dated December 21, 2007 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.92 | Guaranty by G&E Apartment REIT The Myrtles at Old Towne, LLC for the benefit of Capmark Bank, dated December 21, 2007 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.93 | First Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated December 21, 2007 (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.94 | First Amended and Restated Pledge Agreement by and between Wachovia Bank, N.A. and Grubb and Ellis Apartment REIT Holdings, L.P., dated December 21, 2007 (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.95 | Unsecured Promissory Note issued by Grubb and Ellis Apartment REIT Holdings, L.P. in favor of NNN Realty Advisors, Inc., dated December 21, 2007 (included as Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed December 31, 2007 and incorporated herein by reference) | |
10.96 | Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated January 8, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.97 | Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Triple Net Properties, LLC, dated February 26, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.98 | Second Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 7, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.99 | Third Amendment to Contract of Sale by and between Cedar Park Multifamily, Ltd. and Grubb & Ellis Realty Investors, LLC, dated March 27, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.100 | Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Arboleda, LLC, dated March 27, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.101 | Fixed+1 Multifamily Note by G&E Apartment REIT Arboleda, LLC in favor of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.102 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing by G&E Apartment REIT Arboleda, LLC for the benefit of PNC ARCS, LLC, dated March 31, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.103 | Second Amendment to and Waiver of Loan Agreement by and between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.104 | Amended and Restated Promissory Note by Grubb & Ellis Apartment REIT, Inc. in favor of Wachovia Bank, National Association, dated March 31, 2008 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.105 | Second Amended and Restated Pledge Agreement (Membership and Partnership Interests) by and between Wachovia Bank, National Association and Grubb & Ellis Apartment REIT Holdings, LP, dated March 31, 2008 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed April 4, 2008 and incorporated herein by reference) | |
10.106 | Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 12, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.107 | First Amendment to Purchase and Sale Agreement by and between Atlanta Creekside Gardens Associates, LLC and Grubb & Ellis Realty Investors, LLC, dated June 18, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.108 | Purchase and Sale Agreement by and between AMLI at Peachtree City-Phase I, LLC, AMLI at Peachtree City-Phase II, LLC and Grubb and Ellis Realty Investors, LLC, dated June 23, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.109 | Purchase and Sale Agreement Assignment by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Creekside Crossing, LLC, dated June 26, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.110 | Multifamily Note by G&E Apartment REIT Creekside Crossing, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.111 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Creekside Crossing, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.112 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.113 | Multifamily Note by G&E Apartment REIT Kedron Village, LLC to the order of Capmark Bank for Freddie Mac, dated June 26, 2008 (included as Exhibit 10.9 to its Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) |
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Exhibit Number | Description | |
10.114 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Kedron Village, LLC and Capmark Bank, dated June 26, 2008 (included as Exhibit 10.10 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.115 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated June 26, 2008 (included as Exhibit 10.11 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.116 | Third Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated June 26, 2008 (included as Exhibit 10.12 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.117 | Third Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated June 26, 2008 (included as Exhibit 10.13 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.118 | Assignment and Assumption of Real Estate Purchase Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Kedron Village, LLC, dated June 27, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.119 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated June 27, 2008 (included Exhibit 10.14 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed July 2, 2008 and incorporated herein by reference) | |
10.120 | Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated July 10, 2008 (included as Exhibit 10.1 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.121 | First Amendment to Real Estate Purchase and Sale Agreement by and between Apartments at Canyon Ridge, LLC and Grubb & Ellis Realty Investors, LLC, dated August 15, 2008 (included as Exhibit 10.2 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.122 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.123 | Multifamily Note by G&E Apartment REIT Canyon Ridge, LLC to the order of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.4 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) |
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Table of Contents
Exhibit Number | Description | |
10.124 | Multifamily Deed of Trust, Assignment of Rents and Security Agreement by G&E Apartment REIT Canyon Ridge, LLC for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.5 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.125 | Guaranty by Grubb & Ellis Apartment REIT, Inc. for the benefit of Capmark Bank, dated September 15, 2008 (included as Exhibit 10.6 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.126 | Fourth Amendment to and Waiver of Loan Agreement between Grubb & Ellis Apartment REIT, Inc. and Wachovia Bank, National Association, dated September 15, 2008 (included as Exhibit 10.7 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.127 | Fourth Amended and Restated Pledge Agreement by and between Wachovia Bank, National Association and Grubb and Ellis Apartment REIT Holdings, L.P., dated September 15, 2008 (included as Exhibit 10.8 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.128 | Unsecured Promissory Note by Grubb & Ellis Apartment REIT Holdings, LP in favor of NNN Realty Advisors, Inc., dated September 15, 2008 (included as Exhibit 10.9 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K filed September 19, 2008 and incorporated herein by reference) | |
10.129 | Assignment and Assumption of Real Estate Purchase and Sale Agreement by and between Grubb & Ellis Realty Investors, LLC and G&E Apartment REIT Canyon Ridge, LLC, dated September 15, 2008 (included as Exhibit 10.3 to Grubb & Ellis Apartment REIT, Inc.’s Current Report on Form 8-K/A filed September 25, 2008 and incorporated herein by reference) | |
21.1** | Subsidiaries of Grubb & Ellis Apartment REIT Holdings, LP | |
23.1** | Consent of Hunton & Williams LLP (included in Exhibit 5.1) | |
23.2** | Consent of Hunton & Williams LLP (included in Exhibit 8.1) | |
23.3* | Consent of Deloitte & Touche LLP | |
23.4* | Consent of Grant Thornton LLP | |
24.1** | Power of Attorney (included on Signature Page) |
* | Filed herewith. | |
** | To be filed by amendment. |
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