CALGARY, June 15, 2012 /CNW/ - Leben Real Estate Investment Trust ("Leben REIT") announces the sale, closed in escrow on May 28, 2012 and now concluded, of Franklin Crossing, the last remaining building in its real estate portfolio, to 1656944 Alberta Ltd. (the "Purchaser"), for a purchase price of $5.65 Million, payable in cash and a promissory note from the purchaser for $1,152,381 to Leben REIT. The promissory note has a term of 6 months and an interest rate of 18% per annum over the first 5 months, and is secured by a second mortgage and transfer back on Franklin Crossing. Prior to closing the sale to the Purchaser, Franklin Crossing was subject to foreclosure proceedings by the previous lender on the property for several months, and a conditional vesting order by the Court for an offer by another potential purchaser at $4.2 Million, being less that the amount of the outstanding loan balance. This would have resulted in a deficiency judgment against Leben REIT by the previous lender. In order to avoid this result and enable the Purchaser to close on the sale of Franklin Crossing, non-management trustees of Leben REIT and Leben Commercial Trust agreed to loan their personal funds to the Purchaser subject to a third mortgage on Franklin Crossing and other security. The management trustee of Leben REIT also agreed to loan funds to the Purchaser in order to close the sale. The trustees will provide further information to the unit holders of Leben REIT regarding the sale of Franklin Crossing and the status of the Trust as soon as possible.
For further information:
Shariff Chandran, Chief Executive Officer