Item 1.01 | Entry into a Material Definitive Agreement. |
On April 2, 2021, Alpine Income Property OP, LP (the “Operating Partnership”), the operating partnership subsidiary of Alpine Income Property Trust, Inc. (the “Company”), entered into a Purchase and Sale Agreement (the “PSA”) with Bluebird Arrowhead Phoenix LLC (“Bluebird Phoenix”), Golden Arrow Clermont FL LLC (“Golden Arrow Clermont”), Bluebird Germantown MD LLC (“Bluebird Germantown”), Golden Arrow Charlotte NC LLC (“Golden Arrow Charlotte”), CTLC Golden Arrow Katy LLC (“Golden Arrow Katy”), and Bluebird Renton WA LLC (“Bluebird Renton” and, together with Bluebird Phoenix, Golden Arrow Clermont, Bluebird Germantown, Golden Arrow Charlotte and Golden Arrow Katy, the “Sellers”), all of which are subsidiaries of CTO Realty Growth, Inc. (“CTO”), for the purchase of six retail net lease properties (the “Properties”). The terms of the PSA provide that the total purchase price for the Properties will be $45.0 million. There can be no assurance at this time that the Operating Partnership will in fact complete the acquisition of any or all of the Properties.
CTO is the parent company of the Company’s external manager and owns approximately 23.5% of the Company’s outstanding equity, including units of limited partnership interest in the Operating Partnership. For more information regarding the relationship between the Company and CTO, see Part I, Item 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
On November 26, 2019, the Company entered into an exclusivity and right of first offer agreement (the “Exclusivity and ROFO Agreement”) with CTO. Pursuant to the Exclusivity and ROFO Agreement, among other things, CTO agreed that neither CTO nor any of its affiliates will enter into any agreement with any third party for the purchase and/or sale of any single-tenant, net leased property without first offering the Company the right to purchase such property. The entry into the PSA is a result of the Company exercising its right to purchase the Properties under the Exclusivity and ROFO Agreement.
The deposit under the PSA is $1.0 million (the “Deposit”). The Deposit is refundable to the Company pursuant to the terms of the PSA during an inspection period. If the PSA is not terminated by the end of the inspection period by the Company, the Deposit will become non-refundable.
Pursuant to the PSA, the Company and the Sellers agreed that, at closing, the Company will assume that certain Loan Agreement by and among CTO, the Sellers, and Wilmington Trust, National Association, as trustee, for the benefit of the registered holders of WFRBS Commercial Mortgage Trust 2014-C24, Commercial Mortgage Pass-Through Certificates, Series 2014-C24, dated September 30, 2014, as amended and assigned (the “Loan Agreement”). The outstanding balance of this loan is approximately $30.0 million, and the loan bears a fixed interest rate of 4.33%. The loan matures in October 2034 but is prepayable without penalty beginning in October 2024. During the inspection period, the Sellers and the Company will negotiate the terms of the Company’s assumption of the debt (as defined in the Loan Agreement). At closing, the Sellers and the Company will enter into an assignment and assumption of the Loan Agreement. In the event that the special servicer does not consent to the transfer of the Properties and the Company’s assumption of the debt, the Company will have the right to terminate the PSA and the Deposit will be returned to the Company.
Certain closing conditions must be met before or at the closing and are not currently satisfied. They include, but are not limited to, the satisfaction of the conditions that all representations and warranties of the parties contained in the PSA must be true and correct as of the closing and that the parties have performed all covenants, agreements and obligations required to be performed by them under the PSA. It is also a condition to the Company’s obligation to close under the PSA that: (a) the leases at the Properties be in full force and effect without the existence of any default by the Sellers or the tenants and without the existence of any event which with the giving of notice or the lapse of time, or both, is an event of default under the leases and (b) no tenant shall have filed for bankruptcy protection or initiated insolvency proceedings. Accordingly, as of the date of this Current Report on Form 8-K and until the closing of the purchase of the Properties, there can be no assurance that the Operating Partnership will acquire any or all of the Properties.
A copy of the PSA is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference, and the foregoing description of the PSA is qualified in its entirety by reference thereto.
