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BLUEROCK RESIDENTIAL GROWTH REIT, INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Regulation FD Disclosure, Financial Statements and Exhibits

July 8, 2014

ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT

The information in this Report set forth under Items 2.01 and 2.03 is incorporated herein by reference.

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS



The disclosure below describes our investment in Alexan CityCentre. All figures provided below are approximate.

On July 1, 2014, through a wholly-owned subsidiary of our operating partnership, we made a convertible preferred equity investment in a multi-tiered joint venture along with Bluerock Growth Fund, LLC ("BGF"), Bluerock Special Opportunity + Income Fund II, LLC ("SOIF II") and Bluerock Special Opportunity + Income Fund III, LLC ("SOIF III" and collectively with BGF and SOIF II, the "BRG Co-Investors"), which are affiliates of our Manager, and an affiliate of Trammell Crow Residential ("TCR"), to develop a 340-unit class A, apartment community located in Houston, Texas, to be known as Alexan CityCentre (the "Alexan property"). The material features of the investment in the joint venture and the development project are described below. The related construction financing is described under Item 2.03.

BR Alexan Member



For development of the Alexan property and funding of any required reserves, the Company has made a capital commitment of $6,564,557, to acquire 100% of the preferred membership interests in BR T&C BLVD Member, LLC ("BR Alexan Member") through a wholly-owned subsidiary of the Company's operating partnership, BRG T&C BLVD Houston, LLC ("BRG Alexan"). The BRG Co-Investor's budgeted development-related capital commitments are as follows: BGF, $6.500 million; SOIF II, $6.274 million; and SOIF III, $4.360 million, to acquire 37.93%, 36.62% and 25.45% of the common membership interests in the BR Alexan Member, respectively.

Under the operating agreement for BR Alexan Member, our preferred membership interest earns and shall be paid on a current basis a preferred return at the annual rate of 15.0% times the outstanding amount of our capital contributions made pursuant to our capital commitment. To date (i) we have funded $4,382,974 of our capital commitment leaving $2,181,583 remaining to be funded and (ii) the BRG Co-Investors have funded $14,480,886. BR Alexan Member may call for capital contributions in accordance with the requirements of the development budget for the Alexan property and we are obligated to fund our share of them (limited by the amount of our capital commitment) within ten (10) days of our receipt of written notice of any such capital call, or the preferred return on our outstanding capital contributions shall be reduced to 7.0% annually.

We are not required to make any additional capital contributions beyond our capital commitment. However, if BR Alexan Member makes an additional capital call and any of the BRG Co-Investors do not fully fund their pro rata (in accordance with their common membership interests) portion of the same, then we may elect to fund such shortfall as an additional capital contribution, in which case those contributions will accrue a preferred return at the annual rate of 20.0% times the outstanding amount of such capital contributions.

BR Alexan Member is required to redeem our preferred membership interests on the earlier of the date which is six (6) months following the maturity of the construction loan (including any extensions thereof but excluding refinancing), or any acceleration of the construction loan. On the redemption date, BR Alexan Member is required to pay us an amount equal to our outstanding net capital contributions to BR Alexan Member plus any accrued but unpaid preferred return. If BR Alexan Member does not redeem our preferred membership interest in full on the required redemption date, then any of our net capital contributions remaining outstanding shall accrue preferred return at the rate of 20.0% per annum.

Distributions of operating cash flow of BR Alexan Member will be made monthly (as cash flow permits) (ii) first to pay us all of our accrued but unpaid preferred return on our budgeted development-related capital contributions, (ii) to pay us all of our accrued but unpaid preferred return on our additional capital contributions, and (iii) to the common members pro rata in accordance with their membership interests; provided, however, after the redemption date, all operating cash flow shall be paid to us until our preferred membership interest is fully redeemed.

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Upon a sale, refinancing or other capital transaction regarding the Alexan property, the net proceeds shall be distributed by the BR Alexan Member: (i) to repay any debts or obligations; (ii) to fund any reserves determined in good faith by BR Alexan Member's managers and approved by us; (iii) to us to repay our outstanding additional capital contributions and any preferred returns accrued thereon; (iv) to us to repay our budgeted development-related capital contributions and any preferred returns accrued thereon; (v) to the common members in accordance with their positive capital accounts and (vi) to the common members, pro rata in accordance with their common membership percentages.

We have the right, in our sole discretion, to convert our preferred membership interest in BR Alexan Member into a common membership interest for a period of six months from and after the date upon which 70% of the units in the Alexan property have been leased (the "Conversion Trigger Date"). Assuming that we and the BRG Co-Investors have made all of our budgeted development-related capital contributions as required, and all accrued preferred returns have been paid to us, upon conversion we will receive a common membership interest of 18.5% of the aggregate common membership interest in BR Alexan Member (the "Expected Interest"), and the membership percentages of the BRG Co-Investors shall be adjusted accordingly. If the facts as of the Conversion Trigger Date are substantially different from the capital investment assumptions resulting in our receipt of the Expected Interest, then we and the BRG Co-Investors are required to confer and determine in good faith a new common membership interest percentage relative to our conversion.

If we convert to a common membership interest, (i) we will no longer have any rights to any preferred returns on, or of, capital contributions to BR Alexan Member, (ii) BR Alexan Member will no longer be obligated to redeem us, and (iii) we will become the sole manager of BR Alexan Member.

Prior to the exercise of the conversion right, BGF, SOIF II and SOIF III shall be the managers of BR Alexan Member, and shall have the power and authority to govern the business of BR Alexan Member, subject to the approval of certain "major decisions" by members holding a majority of the membership interests and subject to the further requirement that our economic interests and other rights in and to the Alexan property may not be diluted or altered without our prior written consent. These major decisions include: (i) confessing a judgment against BR Alexan Member; (ii) admitting a new member; and (iii) making any loans or become a guarantor of any loans. Additionally, the following actions are subject to our approval (so long as we own a preferred membership interest): (i) causing BR Alexan Member to approve any major decision of BR Alexan JV; (ii) approving any amendment of BR Alexan JV's operating agreement; (iii) filing or . . .

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN

OFF BALANCE SHEET ARRANGEMENT OF REGISTRANT

Construction Financing



The development of the Alexan property will be funded with $24.80 million of gross equity from the BR Alexan JV, and a $57,000,000 construction loan made by Compass Bank, an Alabama banking corporation, and such other lenders as may participate alongside Compass Bank (the "Construction Loan") to the Project Owner, which Construction Loan is secured by the Alexan property and improvements. The Construction Loan is expected to be funded in draws as provided under the project budget. The Construction Loan has a 42-month term, maturing on January 1, 2018, and is subject to 2 one-year extensions, provided that certain conditions are met.

Prior to completion of the development of the Alexan property, the interest rate on the Construction Loan is a variable per annum rate equal to the prime rate plus 0.5% (the "Base Rate"); provided, that, at the request of the Project Owner the interest rate for a portion of the outstanding principal amount (not less than $500,000) may alternatively be determined in accordance with the following formula: the LIBOR rate divided by (one minus the average maximum rate at which reserves against Eurocurrency liabilities are required to be maintained by member banks of the Federal Reserve System in New York City) plus 2.5% (the "LIBOR Based Rate"). Following completion of the development of the Alexan property and its achieving a debt service coverage ratio of 1.1:1.0 for at least three months, each of the Base Rate and LIBOR Based Rate (if applicable) are reduced by 0.25%. Payments are interest-only during the initial three-year term. In the event that the extension option is exercised, monthly payments will consist of principal plus interest. Principal payments shall be made monthly in the amount of $60,000. The Construction Loan can be prepaid without penalty; provided that if any portion of the principal is accruing interest pursuant to the LIBOR Based Rate, any payments made on a day other than the last day of an interest period shall be subject to breakage fees.

In conjunction with the closing of the Construction Loan, affiliates of TCR provided a completion guaranty, a repayment guaranty of 50% of the outstanding principal amount of the loan, reducing to 25% of the outstanding principal upon achievement of a 1.0:1.0 debt service coverage ratio for three consecutive months, further reducing to 0% of the outstanding principal amount upon achievement of a 1.45:1.00 debt service coverage ratio for three consecutive months (the "0% step-down"), a repayment guaranty of 100% of accrued interest until the 0% step-down and guaranties of certain non-recourse carveout events.

ITEM 7.01 REGULATION FD DISCLOSURE.

On July 8, 2014, the Company issued the press release attached hereto as Exhibit 99.1 announcing that the Company made a convertible preferred equity investment in the Alexan property, as disclosed in Item 2.01 above. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press release is deemed to be "furnished" and shall not be deemed to be "filed" for purposes of the Exchange Act. The information set forth in this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits. Exhibit No. Description

99.1 Press Release, dated July 8, 2014 6


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