ARTICLE 1.01 ENTRY INTO MATERIAL FINAL AGREEMENT.
Wells Fargo Credit Facility
On June 13, 2022wholly-owned subsidiaries of the general partnership of
Diversified REIT, Inc. Medalist (the “Company”), has entered into a credit agreement (the “credit agreement”) with Wells Fargo Bank, National Association (the “Lender”) for a term loan (the “Term Loan”) and a revolving line of credit (the “Line of Credit” and, together with the Term Loan, the “Credit Facility”). The credit facility is secured by the Salisbury Marketplace property, the Greenbrier Business Center property and the Lancer Center property. Previous mortgages and outstanding loan balances on the Greenbrier Business Center property and the Lancer Center property were refinanced under the credit facility. The term loan has a principal balance of $18,609,500 amortized over 25 years which matures June 1, 2027 and bears interest at an annual rate of 4.50%. The term loan is evidenced by a promissory note issued by the Company to the benefit of the lender (the “Term Loan Note”). The line of credit allows advances to the Company up to $1,500,000 in the aggregate. Amounts outstanding under the line of credit bear interest at an annual variable rate of 2.25% above SOFR and are due and payable on June 1, 2023. The Line of Credit is evidenced by a promissory note issued by the Company to the Lender (the “Line of Credit Note” and, together with the Term Loan Note, the “Notes”). The Credit Agreement and the Notes contain provisions, representations, warranties, covenants and indemnities that are customary and standard for debt secured on commercial property.
The foregoing descriptions of the Credit Agreement and the Notes are qualified in their entirety by reference to the Credit Agreement and the Notes, copies of which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8- K and are incorporated by reference into this Section 1.01.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSAL OF ASSETS.
The acquisition of Salisbury Market
On June 13, 2022the Company has completed the acquisition of the Salisbury Market property (the “Salisbury Marketplace Property”), a shopping center property aggregating approximately 79,732 square feet of gross leasable area located in Salisbury, North Carolinafor a purchase price of $10,025,000, excluding closing costs. The Salisbury Marketplace property was previously owned by FCC Salisbury MarketplaceLC, a Virginia limited liability company and independent seller.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR OBLIGATION UNDER A
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information relating to the credit facility in point 1.01 above is incorporated by reference in this point 2.03.
ARTICLE 9.01 FINANCIAL STATEMENTS AND RECORDS.
(a) Financial Statements of Assets Acquired
To the extent required by this section, historical financial statements for the Salisbury Marketplace property will be filed in an amendment to this current report on Form 8-K no later than August 29, 2022which date falls within the time limit for filing such an amendment.
(b) Unaudited pro forma financial information
To the extent required by this section, pro forma financial information relating to the acquisition of the Salisbury Marketplace property will be filed in an amendment to this report on Form 8-K no later than August 29, 2022which date falls within the time limit for filing such an amendment.
Exhibit No. Description
10.1 Credit Agreement, dated as of June 13, 2022.
10.2 Term Note, dated as of June 13, 2022
10.3 Revolving Line of Credit Note, dated as of June 13, 2022
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