Business Context and Reporting Period
This Form 8-K is filed by Apple REIT Nine, Inc. (a subsidiary of Apple Hospitality REIT, Inc.) for the reporting period ending January 31, 2012. The filing addresses the extension of a material definitive agreement regarding the potential sale of real estate assets.
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 financial figure disclosed relates to the specific transaction:
- Potential Sale Price: $198.4 million for 110 parcels of land in the Ft. Worth, Texas area.
- Deposit: $100,000 (to be credited toward the purchase price if the transaction closes).
Material Changes
The primary material change is the extension of the closing date for the sale of the Land to 111 Realty Investors, LP. Originally entered into on August 3, 2011, the closing is now expected to occur, if at all, on or before April 30, 2012. The Purchaser continues to evaluate legal, title, survey, environmental, and economic information. Certain closing conditions remain unsatisfied, and the Purchaser retains the right to terminate the contract at any time prior to closing.
Outlook, Risks, and Contingencies
Transaction Uncertainty: There is no assurance that the sale will close. The Purchaser may terminate the agreement if closing conditions are not met or if the Land is deemed unsuitable for their intended use. Similarly, the Company's subsidiary may terminate the contract if the Purchaser fails to satisfy conditions.
Related Party Disclosure: While the Company states it has 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.
Management Commentary: Management notes that the filing is made pursuant to Item 1.01 regarding the entry into a material definitive agreement (the extension).
Investor Verification Checklist
- Verify the status of the unsatisfied closing conditions (legal, title, survey, environmental, and third-party consents).
- Confirm whether the Purchaser has exercised any termination rights prior to the April 30, 2012 deadline.
- Review the original Form 8-K dated August 3, 2011, for full details of the initial sale contract terms.
- Assess the potential impact of the related party connection between the Purchaser and Apple REIT Ten, Inc.