Business Context and Reporting Period
This Form 8-K was filed by Apple REIT Nine, Inc. on August 3, 2011. The filing reports the entry into a material definitive agreement regarding the potential sale of real estate assets located in the Fort Worth, Texas area.
Key Financial Metrics
The filing does not provide standard financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The only specific financial figure disclosed is the proposed purchase price for the asset sale.
- Proposed Purchase Price: $198.4 million
- Asset Description: 110 parcels of land with associated improvements and rights
- Required Deposit: $100,000
Material Changes and Transaction Details
On August 3, 2011, a subsidiary, Apple Nine Ventures Ownership, Inc., entered into a contract to sell the aforementioned land to 111 Realty Investors, LP. The transaction is subject to a "review period" ending on October 1, 2011, during which the purchaser may terminate the contract without penalty to retrieve the deposit. The filing explicitly states there is no assurance the sale will close.
Related Party Disclosure: While the Company and its subsidiaries have no material relationship with the Purchaser, a partner of the Purchaser serves on the board of directors of Apple REIT Ten, Inc., a related party of the Company.
Outlook, Risks, and Contingencies
The closing of the sale is contingent upon several conditions, including the Purchaser's compliance with covenants and the obtaining of all necessary third-party consents. If these conditions are not met, the subsidiary may terminate the contract. The anticipated closing date is before the end of the review period (October 1, 2011), but the transaction remains speculative until finalized.
Key Facts for Investor Verification
- Verify if the sale of the 110 land parcels in Fort Worth, Texas, has closed or been terminated.
- Confirm whether the $100,000 deposit was retained or refunded following the review period.
- Assess the impact of the potential $198.4 million proceeds on the Company's liquidity and balance sheet if the deal closes.
- Review the relationship between the Purchaser and Apple REIT Ten, Inc. for potential conflicts of interest.