Bluerock Residential Growth REIT, Inc. (NYSEMKT:BRG) Files An 8-K Completion of Acquisition or Disposition of Assets

Bluerock Residential Growth REIT, Inc. (NYSEMKT:BRG) Files An 8-K Completion of Acquisition or Disposition of Assets
ITEM 2.01

On July 15, 2019, Bluerock Residential Growth REIT Inc., a Maryland corporation (the “Company”), through certain wholly-owned subsidiaries of its operating partnership, Bluerock Residential Holdings, LP (the “Operating Partnership”), closed on the previously announced sale of the Company’s interests in four of the five assets in a portfolio of properties (the “Topaz Portfolio”) to the terms and conditions of two separate purchase and sale agreements for an aggregate sale price of $273.7 million in cash. The sale of the fifth property in the Topaz Portfolio, the real property commonly known as ARIUM Palms at World Gateway Apartments, located at 9000 Avenue Pointe Circle, Orlando, Orange County, Florida 32821, is expected to close on or before August 29, 2019.

Sorrel Phillips Creek Ranch Apartments

On July 15, 2019, the Company, through a wholly-owned subsidiary of the Operating Partnership, closed on the Purchase and Sale Agreement, dated June 17, 2019, as amended (the “Sorrel Phillips Creek Ranch Purchase Agreement”), for the sale by BR Carroll Phillips Creek Ranch, LLC (“Sorrel Phillips Creek Ranch Owner”) to Sorrel/BO, L.L.C., a Delaware limited liability company, Sorrel SP-HP, L.L.C., a Delaware limited liability company, and Sorrel/Portad, L.L.C., a Delaware limited liability company, as tenants in common, all of which are unaffiliated third parties (collectively, the “Sorrel Phillips Creek Ranch Purchaser”), of Sorrel Phillips Creek Ranch Owner’s entire right, title and interest in the improved real property commonly known as Sorrel Phillips Creek Ranch Apartments, located at 5050 FM423, Frisco, Denton County, Texas 75036 (the “Sorrel Phillips Creek Ranch Property”) for a sale price of $57.9 million, subject to certain prorations and adjustments typical in a real estate transaction. The net proceeds to the Company, after payment of closing costs including mortgage payoff and fees, totaled $17.3 million.

 

The Sovereign Apartments, Leigh House Apartments and Preston View Apartments

 

On July 15, 2019, the Company, through certain wholly-owned subsidiaries of the Operating Partnership, closed on the Purchase and Sale Agreement, dated June 17, 2019, as amended (the “Three Property Purchase Agreement,” and together with the Sorrel Phillips Creek Ranch Purchase Agreement, the “Initial Closing Purchase Agreements”), for the sale (a) by BR Carroll Keller Crossing, LLC (“Sovereign Owner”) to KRE Topaz Sovereign Owner LLC, a Delaware limited liability company and unaffiliated third party, of Sovereign Owner’s entire right, title and interest in the improved real property commonly known as The Sovereign Apartments, located at 5301 North Tarrant Parkway, Fort Worth, Tarrant County, Texas 76244 (the “Sovereign Property”) for an allocated sale price of $53.0 million; (b) by BR-TBR Lake Boone NC Owner, LLC (“Leigh House Owner”) to KRE CH Leigh House Owner LLC, a Delaware limited liability company and unaffiliated third party, of Leigh House Owner’s entire right, title and interest in the improved real property commonly known as Leigh House Apartments, located at 2421 Landmark Drive, Raleigh, Wake County, North Carolina 27607 (the “Leigh House Property”) for an allocated sale price of $52.0 million; and (c) by BR Preston View, LLC (“Preston View Owner”) to KRE Topaz Preston View Owner LLC, a Delaware limited liability company and unaffiliated third party, of Preston View Owner’s entire right, title and interest in the improved real property commonly known as Preston View Apartments, located at 1000 Stony Court, Morrisville, Wake County, North Carolina 27560 (the “Preston View Property”) for an allocated sale price of $64.0 million. The aggregate sale price for the Sovereign Property, the Leigh House Property and the Preston View Property totaled $169.0 million, subject to certain prorations and adjustments typical in a real estate transaction. The aggregate net proceeds to the Company, after payment of closing costs including mortgage payoffs and fees, totaled $57.9 million.

The foregoing descriptions of the Initial Closing Purchase Agreements do not purport to be complete and are qualified in their entirety by reference to (i) the Sorrel Phillips Creek Ranch Purchase Agreement, which is filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2019 and is incorporated herein by reference, (ii) the First Amendment to the Sorrel Phillips Creek Ranch Purchase Agreement, which is filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2019 and is incorporated herein by reference, (iii) the Three Property Purchase Agreement, which is filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2019 and is incorporated herein by reference, (iv) the First Amendment to the Three Property Purchase Agreement, which is filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on June 21, 2019 and is incorporated herein by reference and (v) the Second Amendment to the Three Property Purchase Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

Notes to Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2019 (unaudited)

Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2019 (unaudited)

Notes to Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 2019 (unaudited)

Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2018 (unaudited)

Notes to Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2018 (unaudited)

Statements in this Current Report on Form 8-K, including intentions, beliefs, expectations or projections relating to items such as the long-term performance of the Company’s portfolio are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current expectations and assumptions with respect to, among other things, future economic, competitive and market conditions and future business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2019 and its other filings with the SEC.

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

Unaudited Pro Forma Condensed Consolidated Financial Statements Information

The following unaudited pro forma condensed consolidated financial statements of Bluerock Residential Growth REIT, Inc. (together with its consolidated subsidiaries, the “Company,” “we,” “our” or “us”) should be read in conjunction with our historical audited consolidated financial statements as of and for the year ended December 31, 2018, and as of and for the three months ended March 31, 2019 (unaudited), and the related notes thereto.

The unaudited pro forma condensed consolidated balance sheet, as of March 31, 2019, and statement of operations for the year ended December 31, 2018, and three months ended March 31, 2019, have been prepared to provide pro forma financial information with regard to the dispositions of ARIUM Palms, Leigh House, Preston View, Sorrel, and Sovereign (collectively, the “Topaz Portfolio”), which the Company consolidated and includes pro forma information for each of the transactions described below. The unaudited pro forma financial information gives effect to:

      

  

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

AS OF MARCH 31, 2019

(In thousands, except share and per share amounts)