Owens Realty Mortgage (ORM) to Sell The Chateau at the Village
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Owens Realty Mortgage, Inc. (NYSE MKT: ORM) (the "Company") today announced that, on September 22, 2016, Tahoe Stateline Venture, LLC, a California limited liability company that is wholly-owned by the Company ("TSV"), entered into a Land and Entitlement Purchase Agreement (the "Purchase Agreement") with Jianping Pan, Kawana Holdings LLC and/or its nominee (the "Buyer"). Pursuant to the Purchase Agreement, TSV has agreed to sell to Buyer the approximately 8.0 acres of land and entitlements, including related parking and garage structures, owned by TSV in South Lake Tahoe, California, commonly known as The Chateau at the Village (as further described in the Purchase Agreement, the "Property") for a total of $42.5 million, net of seller's credit which includes sales commissions (the "Purchase Price"). The Property to be sold does not include the existing retail buildings and improvements.
The Closing is subject to a number of conditions described in the Purchase Agreement, including among others completion of satisfactory due diligence by the Buyer and the approval by the City of South Lake Tahoe of a tentative map (the "Map"). The Closing of the transaction is expected to occur on the earlier of March 31, 2017 or within seven business days following approval of the Map, but there can be no assurance if or when the sale of the TSV Property will be consummated.
Buyer has paid an initial deposit into escrow of $500,000 ("Initial Deposit"). An additional $12.5 million is to be deposited into escrow by Buyer on or before November 18, 2016 and paid to TSV along with the Initial Deposit at the Closing, provided that from this cash amount TSV will credit the Buyer $3,000,000 for expenses. The additional $32.5 million of Purchase Price to be paid at Closing will be seller financing in the form of a note (the "Note") to TSV from Buyer secured by a Deed of Trust on the Property and bearing interest at 0.75% per annum. All principal and interest on the Note will be due on the earlier of March 31, 2017 or six months from the date of the Closing.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the agreement, a copy of which has been filed by the Company with the SEC as an exhibit to a Current Report on Form 8-K.
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