SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) October 28, 2005
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
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(Exact Name of Registrant as Specified in Its Charter)
Ohio
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(State or Other Jurisdiction of Incorporation)
001-06249 34-6513657
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(Commission File Number) (I.R.S. Employer Identification No.)
7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114
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(Address of Principal Executive Offices) (Zip Code)
(617) 570-4600
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(Registrant's Telephone Number, Including Area Code)
n/a
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFT|R 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. Entry into a Material Definitive Agreement
On October 28, 2005, First Union Real Estate Equity and Mortgage
Investment (the "Registrant"), through its wholly-owned operating partnership
First Union REIT, L.P. (the "Operating Partnership") entered into a joint
venture agreement with Marc Ontario LLC pursuant to which they formed FT-Ontario
Holdings LLC ("FT-Ontario"), a Delaware limited liability company. FT-Ontario
was formed for the purpose of making the acquisition described in Item 2.01
below.
Pursuant to the terms of the joint venture agreement, the Operating
Partnership and Marc Ontario LLC contributed approximately $5.7 million and $1.4
million, respectively, to the capital of FT-Ontario. The Operating Partnership
is the managing member of FT-Ontario and holds an 80% interest in FT-Ontario. At
such time as each of the members of FT-Ontario receive aggregate distributions
equal to their invested capital plus a 9% cumulative return thereon, the
Operating Partnership's interest in FT-Ontario decreases to 75%.
ITEM 2.01. Completion of Acquisition or Disposition of Assets.
On October 28, 2005, FT-Ontario acquired through two wholly owned
subsidiaries 128,000 square feet of retail and office space consisting of the
first six floors in a mixed-use building together with 208 parking spaces
located at One East Erie, Chicago, Illinois (the "Property"). The Property was
acquired from American Invesco, an unaffiliated third party, for an aggregate
purchase price of approximately $26.5 million. FT-Ontario incurred approximately
$518,000 in closing costs. The purchase price was funded through the capital
contribution made to FT-Ontario by the Operating Partnership and Marc Ontario
LLC, with the balance being provided from a loan from the Operating Partnership
to FT-Ontario which is described in Item 2.03 below.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
In connection with the acquisition of the Property, the Operating
Partnership made a loan to FT-Ontario in the original principal amount of
$19,902,771. The loan bears interest at the prime rate, requires monthly
payments of interest only and matures on October 28, 2006. It is presently
anticipated that this loan will be satisfied from a permanent first mortgage
loan obtained with respect to the Property. The loan is secured by FT-Ontario's
ownership interest in the two subsidiaries that hold the retail and office space
and the parking spaces, respectively.
ITEM 7.01 Regulation FD Disclosure
On October 31, 2005, the Registrant announced the transaction described in
Items 1.01, 2.01 and 2.03 above. A copy of the press release is attached hereto
as exhibit 99.
ITEM 9.01 Financial Statements and Exhibits.
(c) Exhibits
99. Press Release dated October 31, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on this 2nd day of November, 2005.
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By: /s/ Carolyn Tiffany
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Carolyn Tiffany
Chief Operating Officer