SAN MATEO, CA -- (Marketwired) -- 08/12/13 -- TNP Strategic Retail Trust ("Company or SRT") announced today that the Company has severed its relationship with its former advisor TNP Strategic Retail Advisor LLC, an affiliate of Thompson National Properties, LLC (collectively "Thompson"). The Company plans to change its name to Strategic Realty Trust, Inc. in the near future.
The Company has retained SRT Advisors, LLC, an affiliate of Glenborough LLC ("Glenborough") as its new advisor and has retained Glenborough as the Company's property manager. Glenborough is a privately held full-service real estate investment and management company focused on the acquisition, management, and leasing of high-quality commercial properties. Over its 30-year history Glenborough and its predecessors have owned and managed office, retail, industrial and multifamily property in over 35 markets.
New Advisor to the Company
The Special Committee of the Board of Directors ("Committee") determined it was in the best interest of the Company and its shareholders to find a new advisor. The Committee retained an independent consultant to aid the Committee in selecting and interviewing qualified entities to become the replacement advisor. The Committee reviewed a number of possible candidates and determined that Glenborough and its affiliates were the best fit for the Company. Glenborough has substantial experience as a replacement manager in this type of situation, in retail property ownership and management, and in management of a NYSE-listed real estate investment trust.
Effective August 10, 2013 the Company entered into an advisory agreement with SRT Advisors, LLC, an affiliate of Glenborough, LLC and also hired Glenborough, LLC as the property manager of all of the Company's properties. The advisory contract is cancellable on 60 days' notice by the Company. The property management contracts have an initial one year term, and thereafter are cancellable on 60 days' notice by the Company. Glenborough's prior consulting and services contract has been terminated, and Glenborough has agreed to rebate two months of its prior consulting fees. The total estimated fees under the new contracts are expected to be significantly less than those paid under the terminated and expired Thompson contracts.
The Committee has appointed Andrew Batinovich to serve as the Company's Chief Executive Officer, Chief Financial Officer and Director. Mr. Batinovich is the President and CEO of Glenborough, LLC and SRT Advisor, LLC, the Company's new advisor. Mr. Batinovich has over 30 years of real estate experience and served as CEO of Glenborough Realty Trust.
Glenborough's management team has substantial REIT experience, all of whom were part of the management of Glenborough Realty Trust, a NYSE-listed REIT that sold itself to an affiliate of Morgan Stanley in 2006 a transaction valued at $1.9 billion. (www.glenborough.com).
Under the Company's new agreements with Glenborough total fees are likely to be lower than the Thompson costs by a substantial margin.
•Applying the new fee structure to the 2012 actual costs would have saved the Company over $2,300,000 without considering equity selling costs. •Property management fees are reduced by 20% from 5% to 4% of gross property revenues. •The annual advisor fee is 60 basis points of total assets and replaces Thompson's overhead reimbursement and staff accounting costs. •The fixed asset management fee with no overhead reimbursements is a much better structure for the Company as the cost is quantifiable and will alleviate disputes over the amount and nature of reimbursements, which were not uncommon under the agreements with Thompson. •Acquisition fees reduced from 2.5% to 1%
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