Item 1.01 Entry Into a Material Definitive Agreement.
Purchase and Sale Agreement
On November 22, 2021, certain
affiliates (the “Sellers”) of First Real Estate Investment Trust of New Jersey, Inc. (“FREIT”) entered into a
Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with MCB Acquisition Company, LLC (the “Purchaser”)
pursuant to which the Sellers have agreed to sell three properties (the “Properties”) to the Purchaser for an aggregate purchase
price of $267,000,000, subject to customary prorations for taxes and operating expenses. The gross proceeds of the sale will be used to
satisfy related mortgage debt in the approximate amount of $156,000,000 and pay customary transaction expenses and transfer taxes. A portion
of the purchase price will be deposited in escrow in an amount to be determined by the Sellers and the Purchaser at the time of closing
with respect to leases where the rent commencement date has not occurred or economic obligations under certain leases remain unpaid. The
net proceeds of the sale will be allocated to FREIT based upon FREIT’s interest in the three entities that own the Properties as
described below.
The Properties consist
of:
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Damascus Center, a 144,000 square foot shopping center
in Damascus, Maryland owned by Damascus Centre, LLC, a joint venture in which FREIT owns a 70% interest;
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The Rotunda, a mixed use property comprised of 295,000
square feet of office and retail and a 379-unit residential apartment community in Baltimore, Maryland, owned by Grande Rotunda, LLC,
a joint venture in which FREIT owns a 60% interest; and
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Westridge Square, a 253,000 square foot shopping
center in Frederick, Maryland owned by FREIT’s 100% owned subsidiary, WestFREIT Corp.
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The Purchase and Sale Agreement
is subject to closing conditions and other terms and conditions customary for real estate transactions and provides that the Purchaser
has the right, in its sole discretion, for any reason or no reason, to terminate the Purchase and Sale Agreement during a due diligence
period which expires on December 22, 2021.
The Purchase and Sale Agreement
requires the Purchaser to make an initial deposit of $3,000,000 within three business days of the effective date of the agreement and
an additional $7,000,000 deposit upon the expiration of the due diligence period. The deposits become non-refundable after the expiration
of the due diligence period, except under certain limited circumstances.
The Purchase and Sale Agreement
contains various representations and warranties of the parties customary for a transaction of this nature.
The transaction is scheduled
to close by December 31, 2021. No assurance can be given as to the timing or whether this transaction will be consummated.
Forward-Looking
and Cautionary Statements
This current report on
Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal
securities laws. These forward-looking statements can be identified by the use of words such as “expect,” “plan,”
“will,” “estimate,” “project,” “intend,” “believe,” “guidance,”
“approximately,” “anticipate,” “may,” “should,” “seek” or the negative of
these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate
to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.
These forward-looking statements are subject to known and unknown risks and uncertainties that you should not rely on as predictions of
future events. Forward-looking statements depend on assumptions, data and/or methods which may be incorrect or imprecise and we may not
be able to realize them. The following risks and uncertainties, among others, could cause actual results to differ materially from those
currently anticipated due to a number of factors, which include, but are not limited to: industry and economic conditions; FREIT’s
ability to satisfy the conditions to closing and complete the proposed transaction; FREIT’s dependence upon its external manager
to conduct its business and achieve its investment objectives; unknown liabilities acquired in connection with acquired properties or
interests in real estate-related entities; general risks affecting the real estate industry and local real estate markets (including,
without limitation, the market value of FREIT’s properties, potential illiquidity of FREIT’s remaining real estate investments,
condemnations, and potential damage from natural disasters); the financial performance of FREIT’s tenants; the impact of any financial,
accounting, legal or regulatory issues or litigation that may affect the Trust and its major tenants; volatility and uncertainty in the
financial markets, including potential fluctuations in the consumer price index; risks associated with FREIT’s failure to maintain
status as a REIT under the Internal Revenue Code of 1986, as amended; and other additional risks discussed in FREIT’s annual report
on Form 10-K for the fiscal year ended October 31, 2020. FREIT expressly disclaims any responsibility to update or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.