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| EQR > SEC Filings for EQR > Form 8-K on 28-Feb-2013 | All Recent SEC Filings |
28-Feb-2013
Entry into a Material Definitive Agreement, Completion of Acquisition or Dispo
Background-Consummation of Archstone Transaction
On February 27, 2013, ERP Operating Limited Partnership ("ERP"), AvalonBay Communities, Inc. ("AVB"), and certain of their respective subsidiaries completed their previously-announced acquisition (the "Archstone Acquisition") from Archstone Enterprise LP ("Enterprise") and its affiliates, of all of the assets of Enterprise (including interests in various entities affiliated with Enterprise), constituting a portfolio of apartment properties and other assets (the "Archstone Portfolio"), pursuant to an Asset Purchase Agreement (the "Purchase Agreement"), dated as of November 26, 2012, by and among Equity Residential ("EQR" and together with ERP, the "Company"), ERP, AVB, Lehman Brothers Holdings Inc. ("LBHI") and Enterprise. A copy of the Purchase Agreement was filed previously as Exhibit 2.1 to the Current Report on Form 8-K filed by EQR and ERP on November 26, 2012. As a result of the Archstone Acquisition, the Company owns assets representing approximately 60% of the Archstone Portfolio and AVB owns assets representing approximately 40% of the Archstone Portfolio.
Pursuant to the Archstone Transaction, the Company has acquired directly or indirectly, 71 wholly-owned, stabilized properties consisting of 20,160 apartment units, two additional partially owned and unconsolidated stabilized properties consisting of 768 apartment units, three master-leased properties containing 853 apartment units, four projects in various stages of construction for 964 apartment units and fourteen land sites for the potential development of approximately 4,318 apartment units.
The table below provides details by region for the stabilized, wholly-owned, unconsolidated and master-leased properties the Company has acquired:
Year
Apartment Average (1) of
Property Location Units Rental Rate Construction(2)
Washington D.C. Metro
Alban Towers Washington, DC 229 $ 3,037 1934
Cleveland House Washington, DC 214 $ 2,607 1953
Archstone Connecticut Heights Washington, DC 518 $ 1,900 1974
Park Connecticut Washington, DC 142 $ 2,986 2000
The Flats at Dupont Circle Washington, DC 306 $ 2,780 1967
Archstone Van Ness Washington, DC 625 $ 2,318 1970
Archstone 2501 Porter Washington, DC 202 $ 2,602 1988
Calvert Woodley Washington, DC 136 $ 2,854 1962
Archstone Dupont Circle Washington, DC 120 $ 2,105 1961
Archstone Wisconsin Place(3) Chevy Chase, MD 432 $ 3,430 2009
Westchester at the Pavilions Waldorf, MD 491 $ 1,791 2009
Westchester Rockville Station Rockville, MD 192 $ 2,052 2009
Old Town Gaithersburg Station Gaithersburg, MD 389 $ 1,433 2013
Archstone 2201 Wilson Arlington, VA 219 $ 2,725 2000
Archstone Columbia Crossing Arlington, VA 247 $ 2,182 1991
Archstone Courthouse Plaza Arlington, VA 396 $ 2,595 1990
Crystal Place Arlington, VA 181 $ 2,519 1986
Archstone Crystal Towers Arlington, VA 912 $ 2,496 1967
Archstone Lofts 590 Arlington, VA 212 $ 2,508 2005
Archstone Fairchase Fairfax, VA 392 $ 1,914 2007
Oakwood Crystal City(4) Arlington, VA 162 N/A 1987
Archstone Pentagon City Arlington, VA 298 $ 2,394 1990
Archstone Rosslyn Arlington, VA 314 $ 2,677 2003
Archstone Virginia Square Arlington, VA 231 $ 2,901 2002
Water Park Towers Arlington, VA 362 $ 2,655 1989
Subtotal-Washington D.C. Metro 7,922 $ 2,423
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Year
Apartment Average (1) of
Property Location Units Rental Rate Construction(2)
San Francisco Bay Area
Archstone Cupertino Cupertino, CA 311 $ 2,625 1998
. . .
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The information under Item 1.01 above under the heading "Background-Consummation of Archstone Transaction" is incorporated into this Item 2.01 by reference.
As part of the Archstone Acquisition, on February 27, 2013, the Company assumed the following consolidated Enterprise debt:
Estimated Estimated
Mark-to- Total
Estimated Market Including
Outstanding Premium/ Mark-to- Collateral #
Balance (Discount) Market Contractual of
Property Pool (in millions) (in millions) (in millions) Interest Rate Maturity Date Properties
Fannie Mae Pool 3 $ 1,266 $ 157 $ 1,423 6.256% 11/1/2017 14
Fannie Mae Pool 4 963 42 1,005 5.883% 11/1/2014 15
Subtotal Fannie Mae Loan Pools 2,229 199 2,428 29
101 West End 126 (21 ) 105 SIFMA + 0.874% 5/1/2031 1
Chelsea 96 (13 ) 83 SIFMA + 1.342% 11/1/2036 1
East 39th 70 (10 ) 60 SIFMA + 1.169% 11/1/2031 1
West 54th 55 (5 ) 50 SIFMA + 1.495% 8/1/2032 1
Subtotal Tax Exempt Bonds 347 (49 ) 298 4
Avenir 103 (7 ) 96 (1 ) (1 ) 1
Breakwater at Marina Del Rey 27 - 27 LIBOR + 1.75% 9/1/2014 1
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Estimated Estimated
Mark-to- Total
Estimated Market Including
Outstanding Premium/ Mark-to- Collateral #
Balance (Discount) Market Contractual of
Property Pool (in millions) (in millions) (in millions) Interest Rate Maturity Date Properties
Old Town Gaithersburg Station 84 17 101 5.20% 4/1/2053 1
Subtotal Other 214 10 224 3
Total Consolidated Enterprise Debt
Assumed $ 2,790 $ 160 $ 2,950 36
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(1) Avenir consists of a first mortgage totaling $102.3 million with an interest rate of 3.12% maturing on 9/1/2022 and a second mortgage totaling $0.9 million with an interest rate of 0.10% maturing on 5/1/2061.
The Company also acquired unconsolidated joint venture interests in certain assets of Enterprise that are subject to the following debt, which will not be consolidated by the Company:
At 100% At Share
Estimated Estimated Estimated
Mark-to- Total Total
Estimated Market Including Including
Outstanding Premium/ Mark-to- Mark-to-
Balance (Discounts) Market Market Contractual Maturity %
Property Pool (in millions) (in millions) (in millions) (in millions) Interest Rate Date Ownership
Wisconsin Place $ 152 $ 8 $ 160 $ 120 3.16% 8/1/2022 75%
Tenside 31 - 31 6 3.66% 12/1/2018 20%
San Norterra 15 - 15 13 LIBOR + 2.25% 1/1/2015 85%
Total Unconsolidated Debt $ 198 $ 8 $ 206 $ 139
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As part of the financing for the Archstone Acquisition, on February 27, 2013, the Company borrowed $1.6 billion under its $2.5 billion unsecured revolving credit agreement and borrowed $750 million under its delayed draw term loan facility. The terms of the unsecured revolving credit agreement and delayed draw term loan facility are described more fully in the Current Report on Form 8-K filed by the Company on January 15, 2013, which Current Report is incorporated herein by reference (other than information furnished pursuant to Item 7.01 thereof).
The information under Item 1.01 above under the heading "Joint Venture Agreements" is incorporated into this Item 2.03 by reference.
On February 27, 2013, the Company issued a press release announcing the closing of the Archstone Acquisition. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Statements in this Current Report on Form 8-K, and other statements that the
Company may make, including statements about the benefits of the acquisition of
the Archstone Portfolio, may contain forward-looking statements that involve
numerous risks and uncertainties. The statements contained in this Current
Report on Form 8-K that are not purely historical are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended, including, without
limitation, statements regarding the management of the Company's expectations,
beliefs and intentions. All forward-looking statements included in this
communication are based on information available to the Company on the date
hereof. In some cases, you can identify forward-looking statements by
terminology such as "may," "can," "will," "should," "could," "expects," "plans,"
"anticipates," "intends," "believes," "estimates," "predicts," "potential,"
"targets," "goals," "projects," "outlook," "continue," "preliminary,"
"guidance," or variations of such words, similar expressions, or the negative of
these terms or other comparable terminology. No assurance can be given that any
of the events anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what impact they will have on the Company's
results of operations or financial condition. Accordingly, actual results may
differ materially and adversely from those expressed in any forward-looking
statements. Neither the Company nor any other person can assume responsibility
for the accuracy and completeness of forward-looking statements. There are
various important factors that could cause actual results to differ materially
from those in any such forward-looking statements, many of which are beyond the
Company's control. These factors include, at a minimum: changes in laws or
regulations; failure of the investment in the Archstone Portfolio to perform as
expected; inability to influence the operations and control of any portions of
the Archstone Portfolio held in a joint venture; and changes in general economic
conditions. The Company does not undertake any obligation (and the Company
expressly disclaims any such obligation) to publicly update or revise any
forward-looking statement, whether as a result of new information, future events
or otherwise. For additional information, please refer to the Company's most
recent Form 10-K, 10-Q and 8-K reports filed with the SEC.
(a) Financial Statements of Businesses Acquired.
The financial information required by this Item 9.01 is not being filed herewith. It will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by this Item 9.01 is not being filed herewith. It will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
Exhibit
Number Description
10.1 Registration Rights Agreement, dated February 27, 2013, by and between
Equity Residential, Archstone Enterprise LP and Lehman Brothers
Holdings Inc.
10.2 Shareholders Agreement, dated February 27, 2013, by and among Equity
Residential, Archstone Enterprise LP and Lehman Brothers Holdings Inc.
10.3 Archstone Residual JV, LLC Limited Liability Company Agreement
10.4 Archstone Parallel Residual JV, LLC Limited Liability Company
Agreement
10.5 Archstone Parallel Residual JV 2, LLC Limited Liability Company
Agreement
10.6 Legacy Holdings JV, LLC Limited Liability Company Agreement
10.7 Master Credit Facility Agreement, dated February 27, 2013, by and
among Federal National Mortgage Association and ASN Santa Monica LLC,
et al.
10.8 Amended and Restated Fixed Loan Note (Collateral Pool 3), dated
February 27, 2013, executed by ASN Santa Monica LLC, et al. in favor
of Federal National Mortgage Association
10.9 Amended and Restated Fixed Loan Note (Collateral Pool 4), dated
February 27, 2013, executed by Archstone Playa Del Rey LLC, et al. in
favor of Federal National Mortgage Association
99.1 Press Release dated February 27, 2013
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