First REIT of New Jersey, which launched a review of strategic alternatives in 2019, received board approval for a plan of voluntary liquidation and agreed to sell a seven-property apartment portfolio for $266.5 million.
An affiliate of Kushner Cos. LLC will buy the portfolio, which consists of the 176-unit Berdan Court in Wayne, N.J.; the 132-unit Regency Club in Middletown, N.Y.; the 100-unit Steuben Arms in River Edge, N.J .; the 210-unit Westwood Hills in New Jersey; the 266-unit Pierre Towers in Hackensack, N.J.; the 129-unit Boulders in Rockaway, N.J.; and the 45-unit Station Place in Red Bank, N.J.
The diversified real estate investment trust, which has 40% and 65% ownership in the Westwood Hills and Pierre Towers properties, respectively, will receive roughly $208.3 million in total cash consideration from the transaction.
Under the agreement, the REIT provided the Kushner affiliate with a specified period to assume the respective mortgage loans on the Pierre Towers and Berdan Court assets. If the buyer does not reach an agreement with the respective lender on or before Feb. 28, either or both of the properties could be removed from the portfolio. The Pierre Towers property will also be excluded from the sale if its ownership structure is not converted into a tenancy-in-common on or before Feb. 28.
The REIT noted that of the overall purchase price, $80.5 million is allocated to Pierre Towers, while $42.0 million is allocated to Berdan Court, adding that the board-approved deal is expected to close in the second calendar quarter of 2020.
In connection with its plan of voluntary liquidation, the REIT intends to return total net proceeds to its shareholders between $25.64 and $31.71 per share.
The company plans to convene a shareholder meeting to approve the portfolio sale and the plan of voluntary liquidation.
HFF Securities LP was financial adviser to the company's special committee and Paul Weiss Rifkind Wharton & Garrison LLP was its legal adviser.
The REIT's shares were up 50% around 12:05 p.m. ET on Jan. 15.