Completion of Purchase of 100% Membership Interest in Limited Liability Company
On May 13, 2014, Tower Properties Company and subsidiaries completed the purchase of 100% of the membership interests of a Limited Liability Company (LLC) pursuant to the Contract for Purchase entered into on March 5, 2014, as reported on a news release to OTC Markets on March 10, 2014 (The news release reported the purchase price at $23,800,000 but it was subsequently reduced). The LLC?s exclusive business is the ownership of a 208 unit apartment complex in Lenexa, Kansas. The total purchase price for the LLC was $23,400,000. This purchase was the final step of a Sec. 1031 like-kind exchange. The first step of the 1031 like-kind exchange was the November 15, 2013 sale of the 9909 Lakeview Avenue Warehouse for $4,700,000, where, after payment of the associated loan and expenses, $3,475,747.25 was paid in cash to an intermediary. That cash with the intermediary was utilized in the purchase of this apartment complex LLC.
Debt Financing
The LLC had a loan with an outstanding balance of $17,680,000 that was assumed with the purchase of the LLC. The loan was originally a fully amortizing 35 year loan at 3.31% that matures on July 1, 2048.