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Exhibit 99.1
FIRST UNION REAL ESTATE INVESTMENTS
AT THE COMPANY
Neil H. Koenig
Interim Chief Financial Officer
(212) 905-1104
FOR IMMEDIATE RELEASE
FIRST UNION ANNOUNCES SALE CONTRACT FOR SIGNIFICANT
ASSET SALE TO RADIANT INVESTORS AND SHAREHOLDER MEETING
NEW YORK, NEW YORK, SEPTEMBER 14, 2000 --- FIRST UNION REAL ESTATE INVESTMENTS
(NYSE: FUR) announced that it has executed a definitive agreement (the "Sale
Contract") with Radiant Investors, LLC ("Radiant"), a Delaware limited liability
company, with respect to the purchase by Radiant of certain properties of the
Company and its subsidiaries for an aggregate purchase price of approximately
$200 million. A separate sale agreement is also under negotiation with respect
to the sale for $5 million of a parking facility and is expected to be executed
imminently.
The signing of a letter of intent with Radiant with respect to the purchase had
been previously announced in June. Radiant is affiliated with Radiant Partners
LLC, which currently manages the operations of the Company and is owned and
controlled by Daniel P. Friedman, David Schonberger and Anne N. Zahner, each an
executive officer of the Company. Mr. Friedman is also a Trustee of the Company.
The sale of the properties under the Sale Contract is subject to several
conditions, including the consent of shareholders of the Company. It is
contemplated that a special meeting in lieu of the 2000 annual meeting of the
shareholders of the Company will be held in the fourth quarter of 2000. Proxy
materials will be prepared and mailed to shareholders in connection with the
meeting outlining the terms and conditions of the Sale Contract and the consent
requested.
Under the transactions contemplated by the Sale Contract and the related parking
facility agreement, the Company and its subsidiaries will receive aggregate
consideration of $205 million, subject to certain adjustments, including its
share of certain transaction costs up to a maximum of $2 million. As part of the
consideration, Radiant will assume certain mortgages on the properties to be
sold. It is anticipated that the aggregate of these mortgages is approximately
$125 million in principal amount. Under certain circumstances, the Company may
elect to provide Radiant with financing with respect to certain of the
properties to be sold under the Sale Contract. Radiant will have deposited $1
million with respect to execution of the Sale Contract and the related parking
facility agreement and will forfeit $125,000 of such deposits (and the Sale
Contract will terminate) if an additional deposit of $6 million is not posted by
September 29, 2000.
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The properties to be purchased by Radiant include:
- 55 Public Square and CEI Office Buildings - Cleveland, Ohio
- 55 Public Square Garage - Cleveland, Ohio
- West 3rd Street Parking Lot - Cleveland, Ohio
- North Valley Tech Center - Thornton, Colorado
- Two Rivers Business Center - Clarksville, Tennessee
- Westgate Shopping Center - Abilene, Texas
- Pecanland Mall - Monroe, Louisiana
- Huntington Garage - Cleveland, Ohio
- Long Street Garage - Columbus, Ohio
- Madison and Wells Garage - Chicago, Illinois
- Printers Alley Garage - Nashville, Tennessee
- 5th and Marshall Garage - Richmond, Virginia
- Club Associates' note receivable, face amount of approximately
$1.5 million.
- Ancillary assets including FF&E, and reserve and escrow accounts
related to the Properties.
In addition, Radiant would receive net operating income from all of the
Properties from June 1, 2000 less capital expenditures committed subsequent to
May 9, 2000 further reduced by 66.6% of asset management fees paid to Radiant
Partners, LLC from June 1, 2000 until the closing of the transaction.
Upon the closing of the sale, Radiant Partners would continue to manage the
Company's remaining assets for an annual fee of $250,000 for two years.
Certain statements contained in this news release that are forward-looking are
based on current expectations that are subject to a number of uncertainties and
risks, and actual results may differ materially. The uncertainties and risks
include, but are not limited to, changes in market activity, changes in local
real estate conditions and markets, actions by competitors, interest rate
movements and general economic conditions. Further information about these
matters can be found in the information included in the Annual Report filed by
the Company with the SEC on Form 10-K.
First Union Real Estate Equity and Mortgage Investments is a NYSE-listed
stapled-stock real estate investment trust (REIT) headquartered in New York,
New York.
