Item 2.01 Completion of Acquisition or Disposition of Assets.
Acquisition of Andros Property
As previously reported in a Current Report on Form 8-K filed with the Securities
and Exchange Commission (the "SEC") on August 8, 2012 (the "August 8, 2012 Form
8-K"), Landmark Apartment Trust of America, Inc. (the "Company") and Landmark
Apartment Trust of America Holdings, LP, the Company's operating partnership
(the "Operating Partnership"), entered into a series of definitive agreements on
August 3, 2012 (the agreements and the transactions thereunder collectively
referred to as the "Recapitalization Transaction") to acquire a total of 22
properties, which included 21 multifamily apartment communities and one parcel
of submerged land (the "Contributed Properties"), containing an aggregate of
6,079 units. The aggregate consideration for the Contributed Properties
consisted generally of common units of limited partnership interests in the
Operating Partnership ("OP Units") valued at $8.15 per unit, cash and assumed
mortgage indebtedness. Also, in connection with the Recapitalization
Transaction, the Operating Partnership entered into a definitive agreement for
the acquisition of a 360-unit multifamily apartment community known as the
Andros Isle property (the "Andros Property") in exchange for aggregate
consideration valued at approximately $45.0 million (subject to customary
prorations), including approximately $9.5 million (subject to adjustment based
on prorations and principal amortization) in OP Units and approximately $6.0
million in cash, as well as the assumption of approximately $29.5 million of
in-place mortgage indebtedness encumbering the Andros Property (based on the
principal amount outstanding as of June 4, 2014). In addition, the agreement
provided for the payment of up to $4.0 million of additional consideration
subject to an earn-out contingency based on net operating income hurdles over a
On June 4, 2014, the Company completed the acquisition of the Andros Property.
The contributors of the entity owning the Andros Property were Fortis Kobel, LLC
and DeBartolo Real Estate Investments, LLC, both of which are affiliated with
Edward Kobel, a director of the Company.
The foregoing summary description of the material terms of the contribution
agreements related to the Recapitalization Transaction is qualified in its
entirety by the actual terms of such contribution agreements, copies of which
are filed as Exhibits 10.2 through Exhibits 10.22, inclusive, to the August 8,
2012 Form 8-K.
While the acquisition of the Andros Property is individually insignificant for
purposes of the reporting requirements of Form 8-K, it is related to the
acquisition of the Contributed Properties described in the August 8, 2012 Form
8-K, and such properties are significant in the aggregate.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 2.01 of this Current Report on Form 8-K is
hereby incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
As previously disclosed in a Current Report on Form 8-K filed with the SEC on
January 10, 2014 (the "January 10, 2014 Form 8-K"), on January 7, 2014, the
Company entered into a Securities Purchase Agreement (the "Securities Purchase
Agreement"), pursuant to which the Company agreed to issue and sell, for cash,
to iStar Apartment Holdings LLC ("iStar"), a Delaware limited liability company
and an affiliate of iStar Financial Inc., and BREDS II Q Landmark LLC, a
Delaware limited liability company ("BREDS," and together with iStar, the
"Investors"), an aggregate of up to $74.0 million in shares of the Company's
9.25% Series E Cumulative Non-Convertible Preferred Stock, par value $0.01 per
share (the "Series E Preferred Stock"). As further disclosed in the January 10,
2014 Form 8-K, the Company made the initial issuance of shares of the Series E
Preferred Stock to the Investors for an aggregate of $68.0 million on January 7,
2014. Pursuant to the terms of the Securities Purchase Agreement, during a
period of up to six months from the date thereof, the Company can require the
Investors to purchase, on the same pro rata basis as their initial purchase of
shares of the Series E Preferred Stock, up to an aggregate of 600,000 additional
shares of the Series E Preferred Stock for cash at a price of $10.00 per share,
for an aggregate of $6.0 million.
On June 4, 2014, and in accordance with the terms of the Securities Purchase
Agreement, the Company issued and sold, for cash, to (i) iStar 82,362 additional
shares of the Series E Preferred Stock, at $10.00 per share, and (ii) BREDS
517,638 additional shares of the Series E Preferred Stock, at $10.00 per share,
for an aggregate of $6.0 million. The proceeds from the sale of the Series E
Preferred Stock will be contributed to the Operating Partnership and used by the
Operating Partnership to acquire the Andros Property.
The shares of the Series E Preferred Stock were issued and sold by the Company
to the Investors in a private placement pursuant to Section 4(2) under the
Securities Exchange Act of 1933, as amended.