ATLANTA (Sept. 23, 2014) It took way longer than a New York Minute, but Atlanta's Post Properties finally has left Manhattan with the sale of Post Luminaria and Post Toscana for a combined sales price of $270 million.
The buyer, according to scooptress Lois Weiss of the New York Post, is condo developer Ben Shaoul, who will convert the rental towers to condos.
Post's entry into New York City was big news when it occurred more than a decade again. Making Manhattan a new market marked on of founder John Williams' final major moves at the helm of the high-flying (based on shareprice) multifamily REIT.
But by August 2008, Post's new CEO Dave Stockert determined it was too diffucult to operate only two apartment communities in the hyper-competitive New York rental market -especially with the Great Recession about to start. Post began marketing the Luminaria and Toscana for sale.
"We are taking the steps necessary to adjust our business plan to the realities of difficult current economic and financial market conditions," Stockert said. "We have reduced the size and risk of our development pipeline and assessed the carrying value of our assets in order to maintain the strength of our balance sheet."
Here's the full press release:
ATLANTA–(BUSINESS WIRE)– Post Properties, Inc. (NYSE: PPS) announced today that it has closed the sale of its Post Luminaria" and Post Toscana" apartment communities, located in New York, NY, for a total gross sales price of $270 million.
Post Luminaria" was completed in 2002, and contains 138 apartment units and approximately 9,400 square feet of retail space. Post Luminaria" was owned in a consolidated joint venture in which the Company held a 68% interest. Post Toscana" was completed in 2003 and contains 199 apartment units and approximately 11,700 square feet of retail space. The buyer was not disclosed.Eastdil Secured acted as broker on the transaction.
A portion of the net proceeds from the sales were used to prepay approximately $82.6 million of secured mortgage indebtedness encumbering the assets and related prepayment premiums totaling approximately $13.0 million. After closing costs and expenses, debt prepayments and distributions of the Companys share of the net proceeds received from the sale of Post Luminaria", Post expects to retain approximately $141 million of net cash proceeds from the sales of the two communities.
In the third quarter of 2014, the Company expects to report a net gain on the sale of these assets of approximately $127 million, or approximately $2.33 per diluted share, and a loss on the early extinguishment of debt of approximately $12.3 million, or approximately $0.23 per diluted share, relating to debt prepayment premiums paid and the write off of unamortized deferred financing costs, each net of non-controlling interests in the Post Luminaria" joint venture.