LINCOLN N.C. REALTY ANNOUNCES THE RESTRUCTURING OF THE
PROPOSED DISPOSITION OF ITS RANCHO BERNARDO PROPERTY
PALO ALTO, Calif., Nov. 19 /PRNewswire/ -- Lincoln N.C. Realty Fund Inc. (AMEX: LRF) announced today that it has restructured the proposed disposition of its Rancho Bernardo property, consisting of an apartment complex of 248 units commonly known as the Bernardo Hills Apartments located at 15265 Maturin St., Rancho Bernardo (San Diego County), Calif.
Lincoln had previously announced that it had entered into a Partnership Contribution Agreement, known as the "Joint Venture Agreement", dated July 1, 1991, involving the property with RREEF America Partners, L.P., a California limited partnership, as investment advisor on behalf of Bailard, Biehl & Kieser Properties I Inc., a real estate investment trust. The Joint Venture Agreement contemplated that Lincoln and BB&K would form a California limited partnership named Bernardo Hills Venture I, of which Lincoln would have been the sole limited partner and BB&K would have been the sole general partner. Under the Joint Venture Agreement, the Rancho Bernardo property was to have been contributed to the partnership by Lincoln, and Lincoln was to have received at closing a priority distribution of $16,250,000 payable in cash. Lincoln was also to have been granted a limited partnership interest in the partnership in the form of an unfunded $1,000,000 capital account at closing. The Joint Venture Agreement was subject to a number of conditions and contingencies which were not satisfied, and the parties ultimately determined that they were not prepared to go forward with the partnership as contemplated in the Joint Venture Agreement.
Lincoln announced today that it is currently engaged in negotiating an Agreement of Purchase and Sale involving the Rancho Bernardo property with BB&K/Bernardo Hills Inc., a California corporation affiliated with BB&K. Under the purchase agreement, Lincoln would sell the Rancho Bernardo property to the purchaser of an aggregate purchase price of $16,250,000. It is contemplated that the purchaser would assume the existing first mortgage loan on the property in favor of Sumitomo Bank of California having an approximate principal balance of $9,375,000. The remainder of the purchase price would be paid to the company in cash at closing.
In addition to the purchase price payable for the Rancho Bernardo property, the purchase agreement contemplates that the purchaser would assume certain multifamily housing revenue bonds issued by the Housing Authority of the City of San Diego which are secured by the Rancho Bernardo property. As consideration for the purchaser's assumption of the bonds, it is proposed that the company would assign to the purchaser at closing the company's right, title and interest in and to a guaranteed investment contract with The Prudential Insurance Co. of America securing the bonds and any and all proceeds thereunder.
Because the parties have not yet concluded negotiations with respect to the ultimate terms and conditions under which the Rancho Bernardo property would be sold under the purchase agreement, there can be no assurance that the company will, in fact, reach an agreement to sell or dispose of the Rancho Bernardo property, either on the terms described above or otherwise. Moreover, because of the many conditions which will have to be satisfied before closing a proposed sales or disposition of the Rancho Bernardo property to the purchaser, there can be no assurance that the company will be able to consummate a sale or disposition of the property even if an agreement to sell or dispose of the property is in fact reached.
The company also announced that its board of directors has called for a special meeting of stockholders on Jan. 20, 1992, to consider he following matters: (A) a proposed plan of liquidation and dissolution of the company; (B) the proposed sale of the Rancho Bernardo property; (C) the sale of the company's other assets, including its Lincoln Wrigley Creek property; and (D) the ratification of certain amendments to the Employment Agreement and Stock Option Agreement of William F. Garlock which were approved at the company's annual meeting. The board of directors has set Dec. 20, 1991, as the record date for this special meeting of stockholders.
The company is a real estate investment trust. Its securities are listed on the American and Pacific Stock Exchanges. The company's principal executive offices are located at 698 Emerson St., Palo Alto, 94301, and its telephone number is 415-323-4426.
/CONTACT: William F. Garlock of Lincoln N.C. Realty Fund, 415-329-8867/
(LRF) DB -- SJ005 -- 4776 11/19/91 08:04 EST