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8-K Alert: Fredericksburg Single Tenant Commercial Property Owned by Cole Real Estate Receives Mortgage Loan
Cole Credit Property Trust III, Inc.
Item 1.01
Entry into a Material Definitive Agreement
On June 22, 2009, Cole WG Fredericksburg VA, LLC ("Cole WG Fredericksburg"), Cole WG South Yale Avenue (Tulsa) OK, LLC ("Cole WG South Yale"), Cole WM Albuquerque NM, LLC ("Cole WM Albuquerque"), and Cole MT Las Vegas NV, LLC ("Cole MT Las Vegas") (each, a "Borrower" and collectively, the "Borrowers") received mortgage loans from Aviva Life and Annuity Company ("Aviva") in the aggregate amount of approximately $29.9 million (the "Aviva Loans"). Each Borrower is a single-member Delaware limited liability company wholly-owned by Cole REIT III Operating Partnership, LP ("CCPT III OP"), the operating partnership of Cole Credit Property Trust III, Inc. (the "Company").
The Aviva Loans are collateralized by two single-tenant commercial properties leased to Walgreen Co. located in Fredericksburg, Virginia and Tulsa, Oklahoma and three parcels of land, one of which is ground leased to Wal-Mart Stores East, LP in Albuquerque, New Mexico, one of which is ground leased to Wal-Mart Real Estate Business Trust in Las Vegas, Nevada, and one of which is ground leased to Lowe's HIW, Inc. in Las Vegas, Nevada (collectively, the "Aviva Loans Collateral"). The aggregate purchase price of the Aviva Loans Collateral was approximately $54.8 million.
The Aviva Loans, which are cross-defaulted and cross-collateralized with one another, bear interest at a fixed rate of 6.45% per annum and are interest-only for the first 24 months of the loan term. Thereafter, principal and interest payments are based on a 25-year amortization schedule, with any remaining principle amounts due upon the maturity date. All of the Aviva Loans mature on March 31, 2013, except for the Las Vegas Loan which matures on January 1, 2013.
The Aviva Loans may be prepaid in whole, but not in part, on any scheduled payment date upon 30-days prior written notice and the payment of a prepayment premium equal to the greater of (i)1% of the outstanding loan balance and (ii) yield maintenance. Because the Aviva Loans are cross-defaulted and cross-collateralized with one another, the prepayment of any Aviva Loan is conditioned on the other Aviva Loans also being prepaid and there are no provisions for partial releases of Aviva's mortgage lien. The Aviva Loans are generally non-recourse to the Borrowers and CCPT III OP, but all are liable for customary non-recourse carve-outs.
In connection with the Aviva Loans, the Company paid its advisor, Cole REIT Advisors III, LLC, a finance coordination fee equal to approximately $299,000.
Upon the occurrence of an event of default, interest on the Aviva Loans will accrue at an annual default interest rate equal to the lesser of 12% per annum or the highest rate permitted by the state law governing the loan.