Business Context and Reporting Period
Consolidated-Tomoka Land Co. (CTO Realty Growth, Inc.) filed this Form 8-K on September 19, 2016, to report the completion of a significant asset disposition. The transaction involved the sale of a portfolio of 14 single-tenant income properties to SBMC Retail Portfolio, LLC.
Key Financial Metrics
- Total Sales Price: Approximately $51.6 million.
- Debt Assumed by Buyer: $23.1 million (existing mortgage loan secured by the properties).
- Estimated Gain: Approximately $11.1 million (after tax).
- Gain Per Share: Approximately $1.20.
Material Changes
The primary material change is the removal of 14 properties from the Company's portfolio. The assets sold included:
- Nine properties leased to a Bank of America subsidiary (primarily Orange County and Los Angeles County, CA).
- Two properties leased to Walgreens (Boulder, CO and Palm Bay, FL).
- One property leased to a CVS subsidiary (Tallahassee, FL).
- One ground lease for a Chase Bank property (Chicago, IL).
- One ground lease for a Buffalo Wild Wings property (Phoenix, AZ).
Outlook and Management Commentary
Management indicated that proceeds from the transaction are expected to be utilized for the recently reported Bloomin' Brands, Inc. sale-leaseback and for future acquisitions. These future acquisitions are intended to be structured as one or more Section 1031 like-kind exchange transactions. The filing does not provide specific forward-looking revenue guidance or updated liquidity metrics beyond the transaction details.
Investor Verification Checklist
- Verify the exact net cash proceeds received after the $23.1 million debt assumption.
- Confirm the timing and terms of the Bloomin' Brands, Inc. sale-leaseback transaction.
- Review the specific criteria for the planned Section 1031 like-kind exchange transactions.
- Assess the impact of the $11.1 million gain on the Company's current quarter earnings.