Mass.-based real estate investment trust (REIT) -
Winthrop Realty Trust
) - recently disclosed a number of strategic measures aimed at
restructuring its portfolio and improving its fundamentals.
These include buying of its joint venture (JV) partner's 50%
interest in the mezzanine loan indirectly secured by an
Ill.-based property for $30 million, a deal to buy a property in
Oklahoma City, a sale agreement for a San Antonio property and
the disposition of a Seabrook asset.
Details of the Deals
In particular, following the acquisition of its JV partner's
interest in the loan, Winthrop now has 100% stake in the
mezzanine loan. The loan, which bears an annual interest of 15%,
has an outstanding principal balance and accrued interest of
around $56.2 million. Notably, Winthrop and its JV partner will
continue to hold about 35% each indirect equity interest in that
Illinois property - located at One South State Street, Chicago -
which secured the mezzanine loan indirectly.
In addition, Winthrop penned a deal to buy a 184-unit garden
apartment complex - Summit Pointe Apartments - in Oklahoma City,
Oklahoma, through a JV. Upon the acquisition's closure, Winthrop
projects estimated capital contribution to the JV to be around
$4.8 million. The transaction is expected to complete in Sep
2013, upon fulfillment of customary closing conditions.
On the other hand, Winthrop, through its CDH CDO venture,
entered into a sale agreement to divest a Texas-based asset - One
Riverwalk - located in San Antonio. From this deal, which is
slated to close by the end of this month, Winthrop is expected to
reap about $4.4 million as net proceeds upon payment of the
existing third-party debt.
The company also divested another Texas-based asset for gross
sale proceeds of $3.3 million. This resulted in net proceeds of
about $3.2 million that was higher than Winthrop's latest
estimated net asset value range of $2.6-$2.9 million for the
Winthrop is focused on riding the growth trajectory by
capitalizing on opportunistic investments. The above-mentioned
deals are part of such efforts. We expect these transactions to
enhance its portfolio quality and drive bottom-line growth.
Winthrop carries a short-term Zacks Rank #3 (Hold). Other
well-performing REITs include
EastGroup Properties Inc.
Highwoods Properties Inc.
Douglas Emmett Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
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