FARMINGTON HILLS, Mich., Sept. 8, 2011 /PRNewswire/ -- Agree Realty Corporation (NYSE: ADC) (the "Company") today announced further information regarding the status of its properties currently or formerly leased to affiliates of Borders Group, Inc., which together with certain of its subsidiaries, including Borders, Inc., filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code.
The lease for the Borders property in Columbia, Maryland, has been assigned by Borders to Books-A-Million, Inc. (NASDAQ: BAMM) pursuant to an agreement approved by the bankruptcy court on August 29, 2011. A Books-A-Million store is expected to be opened at the property after the completion of the Borders store closing sale. The property is subject to non-recourse debt of the Company, which is currently in default as disclosed in the Company's quarterly report on Form 10-Q for the quarter ended June 30, 2011.
The Company has two former Borders properties under contracts to sell for an aggregate sales price of $4.6 million. Closing of these transactions is subject to satisfactory completion of the purchasers' due diligence investigations and other customary closing conditions, and there is no assurance that the conditions will be satisfied or that the sales will occur as contemplated.
The former Borders property in Lawrence, Kansas, is subject to a loan secured by a leasehold interest in the property. The Company owns fee simple title to the property and leases the property to a subsidiary, which defaulted in payments under the loan to the third-party lender and payments to the Company under the lease. The Company anticipates execution of a release agreement, in lieu of the Company foreclosing on the leasehold lender. The Company expects that pursuant to such release agreement, the non-recourse debt will be discharged by the lender and the Company will then have fee simple title to the property without encumbrance. The Company anticipates finalizing the agreement by the end of the third quarter and will then commence marketing the property for reuse.
As previously disclosed in the Company's Securities and Exchange Commission filings:
- The Company continues to negotiate with its other non-recourse lenders regarding defaults. Such negotiations are anticipated to continue into the fourth quarter of 2011.
- The former Borders store in Wichita, Kansas, has been leased to Natural Grocers by Vitamin Cottage. The tenant has waived lease contingencies, and rental is anticipated to commence on or before January 1, 2012.
- The Company has taken assignment from Borders of certain subleases previously entered into by Borders at the Boynton Beach, Florida and Indianapolis, Indiana locations. The aggregate increased annual cash rental income being received by the Company pursuant to assignment of these two subleases is approximately $392,000.
- The Company continues to market its remaining former Borders assets for both sale and lease.
About the Company
Agree Realty Corporation is engaged in the ownership, management and development of properties which are primarily single tenant properties leased to major retail tenants and neighborhood community shopping centers. The Company currently owns and operates a portfolio of 84 properties, located in 19 states and containing 3.8 million square feet of leasable space.
The Company considers portions of the information contained in this release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. These forward-looking statements represent the Company's expectations, plans and beliefs concerning future events. Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, certain factors could cause actual results to differ materially from such forward–looking statements. Such factors are detailed from time to time in reports filed or furnished by the Company with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 2010. Except as required by law, the Company assumes no obligation to update these forward–looking statements, even if new information becomes available in the future.
For additional information, visit the Company's home page on the Internet at http://www.agreerealty.com .
SOURCE Agree Realty Corporation