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) December 7, 2005
WINTHROP REALTY TRUST
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Ohio
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
001-06249 34-6513657
------------------------ ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(617) 570-4600
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
n/a
-------------------------------------------------------------
(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 2.01. Completion of Acquisition or Disposition of Assets.
On December 8, 2005, FT-Toy LLC ("FT-Toy"), a Delaware limited liability
company in which WRT Realty L.P., the Registrant's operating partnership, holds
a one-third interest and is the managing member, acquired a 99% participation
interest in a $60,000,000 fourth priority mezzanine loan (the "Mezzanine Loan")
secured by the equity interests in the indirect owner of a property located in
New York, New York commonly referred to as the Toy Building for a purchase price
of $59,400,000. The purchase price was funded from $9,800,000 of capital
contributions from WRT Realty and each of the joint venture partners and a
$30,000,000 loan from Arbor Realty Funding LLC (the "Lender") which is described
in Item 2.03 below. Pursuant to the terms of the FT-Toy operating agreement and
consistent with the provisions of the Investors' Rights Agreement between the
Registrant and the holders of the Series B-1 Preferred shares, WRT Realty will
be entitled to an additional 20% interest in FT-Toy at such time as the joint
venture partners, two Series B-1 Preferred Shareholders, receive a return of
their investment amount plus a cumulative 7% per annum thereon.
The participation interest was acquired from the Lender, an unaffiliated
third party, pursuant to the terms of a Participation and Servicing Agreement
(the "Participation Agreement"). Pursuant to the terms of the Participation
Agreement, FT-Toy is entitled to receive a payment on account of its $59,400,000
participation interest at rate of LIBOR plus 5.6%, which interest is paid
monthly. Further, FT-Toy has substantial control rights with respect to
decisions to be made by the lender under the terms of the agreements governing
the Mezzanine Loan and has an option to acquire the remaining 1% interest upon
the occurrence of certain events. Alternatively, the Lender has the right to
acquire from FT-Toy its participation upon the occurrence of certain events
together with a 1% premium if such acquisition occurs prior to December 7, 2006
and a .5% premium if the acquisition occurs between December 7, 2006 and June 7,
2007 and certain other conditions are satisfied.
After giving effect to the financing described in Item 2.03 below but
prior to the promoted interest, the current yield to the Registrant is expected
to be approximately 12.6%
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On December 7, 2005, FT-Toy obtained a loan from the Lender in the
original principal amount of $30,000,000. The loan bears interest at LIBOR plus
300 basis points (subject to increase based on the Lender's borrowing rates),
matures on April 9, 2008, subject to a one-year extension (which is co-terminus
with the Mezzanine Loan), and requires monthly payments of interest only. The
loan is secured by FT-Toy's participation interest in the Mezzanine Loan.
The loan is prepayable at any time without premium or penalty.
In connection with the loan, the Registrant was required to provide
standard non-recourse carve-out guarantees to the lenders.
ITEM 9.01 Financial Statements and Exhibits.
(c) Exhibits
10.1 Participation and Servicing Agreement, dated December 8, 2005,
between Arbor Realty Funding LLC (the "Lender") and FT-Toy LLC.
10.2 Loan Agreement, dated December 7, 2005, between the Lender and
FT-Toy LLC
10.3 Promissory Note, dated December 7, 2005, between the Lender and
FT-Toy LLC
10.4 Pledge Agreement, dated December 7, 2005, from FT-Toy LLC to the
Lender.
10.5 Guaranty from Winthrop Realty Trust in favor of the Lender.
99.1 Press Release dated December 8, 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 12th day of December, 2005.
WINTHROP REALTY TRUST
By: /s/ Peter Braverman
------------------------
Peter Braverman
President