Business Context and Reporting Period
This filing is an 8-K dated June 19, 2015, disclosing a Purchase and Sale Agreement between Grove Park Property, LLC (Seller) and WHLR-Grove Park, LLC (Purchaser), an affiliate of Wheeler Real Estate Investment Trust, Inc. The agreement concerns the acquisition of the Grove Park Shopping Center located at 1370 Chestnut Street, Orangeburg, SC. The property consists of approximately 9.57 acres and 106,557 square feet of leasable area.
Key Financial Metrics
- Purchase Price: $6,600,000.00
- Deposit Amount: $150,000.00 (to be held in escrow)
- Payment Terms: Full payment via Federal funds wire transfer on the Closing Date.
- Property Size: 9.57 acres; 106,557 sq. ft. leasable area.
- Key Tenants: Bi-Lo and Grove Park Pharmacy.
- Brokerage Commission: Payable by Seller to Cushman and Wakefield (amount not specified in text).
Material Changes and Transaction Structure
The filing represents a material change in the company's asset portfolio through the proposed acquisition of a shopping center. The transaction is structured as an "As Is, Where Is" sale. The agreement includes a 30-day Review Period for the Purchaser to conduct due diligence, including inspections of physical condition, title, and environmental matters. The Closing Date is set for no later than 45 days after the end of the Review Period.
Conditions, Risks, and Contingencies
- Financing Contingency: The Purchaser's obligation is subject to obtaining a loan on terms satisfactory to the Purchaser, with a loan-to-value ratio not exceeding 60%.
- Due Diligence Termination: The Purchaser may terminate the contract for any reason during the 30-day Review Period, resulting in a full refund of the deposit.
- Environmental Conditions: The Purchaser may terminate if hazardous materials or unsatisfactory environmental conditions are discovered prior to closing.
- Estoppel Certificates: Closing is contingent on receiving estoppel certificates from Key Tenants and tenants representing at least 75% of the leased area.
- Liability Caps: Seller's liability for breaches of representations and warranties is capped at $500,000, with a $25,000 deductible. If the deal fails due to willful Seller default, liability is capped at $250,000.
- Risk of Loss: Risk of loss remains with the Seller until Closing. If the property is damaged by fire or other causes, the Purchaser may terminate.
Investor Verification Checklist
- Verify the final closing status of the transaction, as the agreement is subject to multiple contingencies including financing and due diligence.
- Confirm the actual loan-to-value ratio and financing terms secured by the Purchaser, as the agreement allows for a maximum of 60%.
- Review the rent roll and lease terms for Key Tenants (Bi-Lo and Grove Park Pharmacy) to assess occupancy stability.
- Confirm the results of the environmental and physical inspections conducted during the Review Period.
- Verify the specific amount of the brokerage commission payable to Cushman and Wakefield, as the exact figure is not disclosed in the agreement text.