Exhibit 99
PRESIDENTIAL FOR IMMEDIATE RELEASE
REALTY NEWS White Plains, New York
February 26, 1999
CORPORATION
180 South Broadway, White Plains, N.Y. 10605 - (914) 948-1300
Jeffrey Joseph, President of Presidential Realty Corporation, a real
estate investment trust whose shares are listed on the American Stock Exchange
(PDLA and PDLB), announced today that Presidential had completed the sale of
substantially all of its first and second mortgage notes receivable secured by
990 Sponsor owned condominium units at the Fairfield Towers apartment property
in Brooklyn, New York. The First Mortgage Note, which had an outstanding
principal balance of $17,002,695, was acquired by Presidential in October, 1996
at a discount of $3,500,000. The Second Mortgage Note, which had an outstanding
principal balance of $14,206,895, was obtained by Presidential when it sold the
Fairfield Towers apartment property in 1984. Presidential retained a $4,000,000
interest in the Second Mortgage Note.
The aggregate purchase price for the First Mortgage Note and the Second
Mortgage Note (excluding the $4,000,000 interest retained by Presidential) was
$21,350,000.
The Second Mortgage Note, which was in default, had approximately
$11,000,000 of interest and other charges which were deferred and payable out of
the proceeds of sales of condominium units, but only after the First Mortgage
was repaid in full. In addition, at the time of the sale, there were
approximately $3,000,000 of past due real estate taxes payable with respect to
the condominium units, which were paid by the purchaser.
In connection with this transaction, the $4,000,000 portion of the
Second Mortgage Note retained by Presidential was modified to provide for a
ten-year maturity date and interest at the rate of 9.625% for the first three
years and at 10.5% for the remaining seven years. To secure this obligation,
Presidential obtained subordinate security interests in three apartment
properties located in New Jersey (having an estimated equity value of
approximately $7,000,000) as collateral for the Note.
In connection with the sale, Presidential repaid the $10,195,442
outstanding principal balance of its note payable to Fleet Bank, which had been
secured by Presidential's interest in the First Mortgage Note.
As a result of the transaction, Presidential will, for financial
reporting purposes, recognize a gain on sale (before taxes) of approximately
$7,800,000.
Page 5 of 6 pages
Exhibit 99
After payment of the Fleet loan and expenses related to the
transaction, but before payment of any income tax on the capital gain,
Presidential will retain approximately $10,275,000 from the sale. Presidential
expects to pay approximately $1,700,000 of taxes on the retained capital gain
and invest the balance in rental apartment properties. In addition, Presidential
will receive interest on its $4,000,000 retained Note in the amount of $385,000
per annum for the first three years and $420,000 per annum for the remaining
seven years of the term.
***************
For further information contact:
Jeffrey F. Joseph, President
Presidential Realty Corporation
at the above address and telephone number
Page 6 of 6 pages