Consolidated-Tomoka Land Co. (NYSE MKT: CTO) (the “Company”) today
announced the sale of 37.3 acres of land located east of Interstate 95
and south of LPGA Boulevard in the Tomoka Town Center (the “Town
Center”). The land was sold to an affiliate of North American
Development Group (“NADG”), for a sales price of approximately $5.2
million, or approximately $139,000 per acre (the “Initial NADG Sale”).
The 37.3 acre parcel is located on the southern interior portion of the
Town Center. The Company believes the transaction will result in a total
estimated gain of approximately $4.5 million, or approximately $0.48 per
share after tax, with approximately $0.9 million of the estimated gain
recognized at closing and approximately $3.6 million of the estimated
gain to be recognized as the Company completes certain infrastructure
improvements (the “Infrastructure Work”) at the 235-acre Town Center.
The Infrastructure Work is expected to be completed by the end of the
third quarter in 2016.
The Company intends to utilize the proceeds from the sale to NADG in a
tax-deferred exchange, pursuant to Section 1031. In addition to the sale
price, NADG is obligated to pay the Company approximately $1.8 million
as reimbursement of the costs incurred for the Infrastructure Work on a
pro-rata basis related to the 37.3 acres, which payment is due upon the
later of i) the completion of the Infrastructure Work or, ii) August 31,
2016 and will be recognized into income as the Infrastructure Work is
completed.
The Initial NADG Sale represents the first of multiple transactions
contemplated under a single purchase and sale agreement with NADG (the
“NADG Agreement”). The NADG Agreement provides NADG with the ability to
acquire portions of the remaining acreage under contract (the “Option
Parcels”) in multiple, separate, transactions through 2018 (the “Option
Period”). The Option Parcels represent a total of approximately 86 acres
and total potential proceeds to the Company of approximately $22.2
million. Pursuant to the NADG Agreement, NADG can close on any and all
of the Option Parcels at any time during the Option Period with the
first of the Option Parcels contemplated to close in the first half of
2016, should certain conditions be met. The NADG Agreement also
establishes a price escalation that would be applied to any of the
Option Parcels that are acquired after January 2017, and an additional
higher price escalation that would be applied to any Option Parcels
acquired in 2018.
John P. Albright, President and Chief Executive Officer of the Company
stated, “We are pleased to complete this transaction with the North
American Development Group which we hope to be the first purchase in
their acquisition of the remaining developable acreage of the Tomoka
Town Center.” Mr. Albright added, “We look forward to NADG’s initial
development joining Tanger Outlet’s 350,000 square foot outlet mall and
the 140,000 square foot Sam’s Club retail warehouse club at the Tomoka
Town Center, a retail destination we believe will be a thriving
commercial hub in the Daytona Beach market and a significant enhancement
to our remaining land holdings in Volusia County.”
Mark E. Patten, Senior Vice President and Chief Financial Officer
stated, “Year-to-date we have sold approximately 113 acres for
approximately $22.5 million in proceeds, or an average price per acre of
approximately $200,000, exceeding the top end of our updated guidance
for 2015 of $17.5 million.” Mr. Patten added, “The utilization of the
proceeds of this transaction in a 1031 like-kind exchange transaction
reflects the continuation of our business plan and strategy, which have
consistently included monetizing our land and converting it into
income-producing properties.” Mr. Patten also noted, “For the year we
have completed $96.2 million in acquisitions including income
properties, loan investments, and a venture interest and $23.5 million
in dispositions of non-core income properties, exceeding our updated
guidance of $90 million and $15 million, respectively.”
About Consolidated-Tomoka Land Co.
Consolidated-Tomoka Land Co. is a Florida-based publicly traded real
estate company, which owns a portfolio of income investments in
diversified markets in the United States including approximately 1.7
million square feet of income properties, as well as over 10,500 acres
of land in the Daytona Beach area. Visit our website at www.ctlc.com.
"SAFE HARBOR"
Certain statements contained in this press release (other than
statements of historical fact) are forward-looking statements. Words
such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,”
“could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,”
“project,” and similar expressions and variations thereof identify
certain of such forward-looking statements, which speak only as of the
dates on which they were made. Although forward-looking statements are
made based upon management’s expectations and beliefs concerning future
developments and their potential effect upon the Company, a number of
factors could cause the Company’s actual results to differ materially
from those set forth in the forward-looking statements. Such factors may
include uncertainties associated with closing land transactions,
including the likelihood, timing, and final transaction terms thereof,
the estimate of the cost and timing of completing infrastructure work
affiliated with certain land transactions and the impact on the total
estimated gain as well as the timing of the recognition of that gain,
our ability to obtain necessary governmental approvals for our land
transactions or to satisfy other closing conditions, as well as the
uncertainties and risk factors discussed in our Annual Report on Form
10-K for the fiscal year ended December 31, 2014 and in our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2015, each filed with
the Securities and Exchange Commission. There can be no assurance that
future developments will be in accordance with management’s expectations
or that the effect of future developments on the Company will be those
anticipated by management.
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