Tarragon Corporation Completes First Phase of Potential $90 Million Sale of Lincoln Pointe in Aventura, Florida for High Rise Development
Friday June 30, 8:01 am ET
NEW YORK, June 30 /PRNewswire-FirstCall/ -- Tarragon Corporation (Nasdaq: TARR - News), an urban homebuilder specializing in the development and marketing of high-density residential communities and its 40% partner, Shefaor Development, today announced the closing of the first phase of a transaction which may result in the sale of substantially all of their ownership in Lincoln Pointe in Aventura, Florida to a partnership controlled by Brian Stolar of Chatham, New Jersey (the "Buyer") in which they received $64 million in cash, reduced their ownership to 79.5% plus $14 million of preferred equity and granted the Buyer a three-month option to acquire an additional 61% ownership for $12 million. Tarragon/Shefaor used approximately $39 million of the cash to pay off the existing acquisition loan from Euro Hypo AG, New York Branch.
The Buyer intends to develop a 460-unit high-rise condominium for which Tarragon/Shefaor has prepared preliminary plans and obtained development approvals following their purchase of the site in August 2004 for $41 million. The Buyer has also agreed to pay $14 million to redeem the preferred equity within 18 months or full ownership will revert to Tarragon/Shefaor. If the Buyer exercises the three-month option to acquire an additional 61% interest, Tarragon will retain an 8% interest in the Buyer and Shefaor will retain about 10%. Shefaor has also been retained to coordinate and supervise the new development for a fee, based on ultimate sell out value of the condominium. First mortgage financing for the Buyer was provided by a New York lender.
Tarragon's Chairman and CEO, William S. Friedman, said, "This sale is another example of the power of our multi-exit acquisition strategy and one of the reasons why we see opportunity in our condominium conversion inventory. We purchased this property with Miami-based Shefaor Development intending to convert an older, 285-unit garden apartment project to condominiums. Although that strategy was sound, we realized that the site's highest value could be obtained through more intensive development. We worked closely with neighborhood groups and the town of Aventura to put together a development plan that met the town's stringent requirements for what will probably be the last waterfront high-rise to be developed in that highly sought-after community. With final project approvals, the development value of the land became a great deal more than the value of the existing improvements." |
