American Spectrum Realty, a real estate investment and management company, announced Tuesday that it has acquired 74 property management and asset management contracts (representing 80 separate assets) from Evergreen Realty Group. The interests in real estate that were acquired by American Spectrum represent Evergreen's interest in properties connected with the contracts that were acquired. The contracts include a number of self-storage facilities, with a total of 12,098 self-storage units making up 1,793,881 square feet of storage space. American Spectrum has been negotiating the acquisition with Evergreen for more than a month (its original Purchase Agreement was dated Dec. 17, and the deal closed on Jan. 19).
In order to complete the acquisition, American Spectrum assumed $500,000 of Evergreen payables and issued 1,600,000 operating partnership units ("OP units") in its majority-owned subsidiary, American Spectrum Realty Operating Partnership. American Spectrum also assumed a $9,500,000 10-year nonrecourse promissory note issued by American Spectrum Management Company (another American Spectrum subsidiary). After the end of the year, the purchase price for the deal may be adjusted based on the revenues that are generated by the contracts. Ninety days after the end of the year, Evergreen can choose to exchange the OP units for common stock in American Spectrum Realty Operating Partnership, at the rate of one share of common stock for each four OP units. Alternatively the company can choose to pay cash in lieu of issuing common stock. At the time of issue, the OP units were worth $20 per share. That price will also be adjusted after the end of the year, based on the number that is higher -- the then-existing common stock price for the company's shares, or the Company's net asset value per share.
In addition to the self-storage units that were included in the deal, the new properties to be managed by American Spectrum include 5,051,240 square feet of office and industrial properties, 2,934 family units, and 3,206 student housing units (including 9,107 beds) and nine assisted living facilities (including 776 beds). The properties in question are located in 21 states: Alabama, Arizona, California, Florida, Georgia, Iowa, Idaho, Indiana, Kansas, Minnesota, Missouri, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Virginia, and Washington.
American Spectrum's president and CEO, William Carden, commented, "The Company is extremely excited about this acquisition. I believe we are well-suited to successfully manage and lease these projects. The Company owns and manages 30 properties in addition to third party property management and leasing contracts for nine properties comprised of office, industrial, retail, and public storage. The Company's real estate expertise encompasses the Midwest, East, and West Coast regions where the majority of Evergreen properties are located. This acquisition gives the Company the ability to continue its expansion of its third-party management and leasing capabilities throughout the United States."