EQUITY COMMONWEALTH (NYSE:EQC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry Into a Material Definitive Agreement
On January22, 2018, EQC Operating Trust (the “Operating Trust”), a Maryland real estate investment trust through which Equity Commonwealth (the “Company”) conducts its business, and a wholly-owned subsidiary of the Operating Trust (collectively, the “Sellers”) entered into a real estate sale agreement (the “Sale Agreement”) with Chicago Kingsbury, LLC (the “Purchaser”) to sell to the Purchaser the buildings and land known as 600 West Chicago Avenue (“600 West Chicago Avenue”) for a gross sales price of $510 million. Proceeds after credits for capital costs, contractual lease costs and rent abatements are expected to be approximately $487 million.
600 West Chicago Avenue is an approximately 1.6 million square foot, ClassA, office property located in the River North submarket of downtown Chicago. As of September30, 2017, the property was 98.4% leased.
In connection with entering into the Sale Agreement, the parties agreed to customary representations, warranties and covenants. The Purchaser made an earnest money deposit of $12 million that will be credited to the sale price at closing, or, if the closing does not occur due to a default by the Purchaser, then the deposit will serve as liquidated damages for the Company. to the Sale Agreement, including Purchaser extension rights, the closing is scheduled to occur on or before March23, 2018, unless another date is mutually agreed by the parties and subject to certain extension rights to allow for satisfaction of enumerated closing conditions. After closing, the aggregate liability of Sellers arising under the Sale Agreement is subject to a cap of $10 million for a period of 180 days after closing and certain other limitations.
The foregoing summary of the Sale Agreement does not purport to be complete and is subject to, and qualified in its entirety by, reference to the full text of the Sale Agreement, which is included as Exhibit10.1 to this Current Report on Form8-K and is incorporated herein by reference. The representations and warranties in the Sale Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to shareholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Sale Agreement are not necessarily characterizations of the actual state of facts about Sellers or the Purchaser at the time they were made or otherwise and should only be read in conjunction with the other information that the Company makes publicly available in reports, statements and other documents filed with the Securities and Exchange Commission.
Regulation FD Disclosures
We intend to use any of the following to comply with our disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. We routinely post important information on our website at www.eqcre.com, including information that may be deemed to be material. We encourage investors and others interested in the company to monitor these distribution channels for material disclosures.
Forward-Looking Statements
Some of the statements contained in this Current Report on Form8-K constitute forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding consummating asset sales and the timing thereof. Any forward-looking statements contained in this Current Report on Form8-K are intended to be made to the safe harbor provisions of Section21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
The forward-looking statements contained in this Current Report on Form8-K reflect the Company’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause the Company’s actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).
While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other