Item 1.01. Entry into a Material Definitive Agreement.
On October 16, 2019, CTO Realty Growth, Inc. (“CTO” or the “Company”) sold to a third party a controlling interest in Crisp39 SPV LLC (the “Land Venture”), the Company’s wholly-owned entity that, at that time, held the Company’s approximately 5,300 acres of undeveloped land in Daytona Beach, Florida. On June 23, 2021, certain subsidiaries of the Land Venture entered into a Purchase and Sale Agreement (the “PSA”) with Timberline Acquisition Partners, LLC an affiliate of Timberline Real Estate Partners (“Timberline”), for the sale of substantially all of the Land Venture’s remaining 1,600 acres of land, including any land that was previously under contract, for $67.0 million (the “Land Venture Sale”). Proceeds to CTO after distributions to the other member of the Land Venture and before taxes are estimated to be approximately $25.6 million. Closing is anticipated to occur prior to year-end and is subject to completion of customary due diligence and closing conditions. CTO does not have any material relationship with Timberline or its subsidiaries, other than through the PSA.
Certain closing conditions must be met before or at the closing and are not currently satisfied. Accordingly, as of the date of this Current Report on Form 8-K and until the closing of the Land Venture Sale, there can be no assurance that the Land Venture Sale will be completed.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On June 23, 2021, the Company completed the acquisition of a mixed-use center in the Dallas-Fort Worth, Texas Metropolitan Area (the “Property” or “The Shops at Legacy”) from an affiliate of an investment management company (the “Seller”) for a purchase price of $72.5 million. There is no material relationship between the Company or any director or officer of the Company, or any associate of any director or officer of the Company, and the Seller, other than with respect of the Company’s acquisition of the Property. The acquisition was funded using (a) available cash, (b) 1031 like-kind exchange proceeds generated from certain of the Company’s previously completed property dispositions, (c) proceeds from the Company’s partial exercise of its accordion option on its existing term loan, and (d) the Company’s revolving credit facility, and was structured as a reverse like-kind exchange in order to account for possible future dispositions of income properties by the Company.
This Current Report on Form 8-K includes the historical audited financial statements of The Shops at Legacy and the pro forma consolidated financial information required by Items 9.01(a) and 9.01(b) of Form 8-K.
The pro forma financial information included in this Current Report on Form 8-K has been presented for informational purposes only, as required by Form 8-K. It does not purport to represent the actual results of operations that the Company and The Shops at Legacy would have achieved had the Company held the assets of The Shops at Legacy during the periods presented in the pro forma financial information and is not intended to project the future results of operations that the Company may achieve after the acquisition.
Item 7.01. Regulation FD Disclosure.
On June 24, 2021, the Company issued a press release announcing the completion of the acquisition of The Shops at Legacy. A copy of the press release is attached hereto as Exhibit 99.3. The information contained in Item 7.01 of this Current Report, including Exhibit 99.3, is being furnished and shall not be deemed “filed” for any purposes, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, unless it is specifically incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The financial statements that are required to be filed pursuant to this item are being filed as Exhibits 99.1 and 99.2 to this Form 8-K.
(b) Pro Forma Financial Information
The pro forma financial information that is required to be filed pursuant to this item is being filed as Exhibit 99.1.
