Elme Communities has reached an agreement to sell its last asset, Elme Bethesda.
The REIT will sell the 193-unit community to North Bethesda, Maryland-based CAPREIT for $59 million, according to a May 27 U.S. Securities and Exchange Commission filing.
The earnest money deposit for the property, Elme Bethesda, is $1 million. CAPREIT must pay the first installment of the deposit, $500,000, within two business days of signing the sales agreement. If it does not terminate the agreement on or before the inspection period expiring on June 3, the remaining $500,000 deposit installment will be due within two business days of the inspection period's expiration.
Closing on the property should occur no later than July 9 or 10 business days after certification of compliance with Montgomery County’s right-of-first-refusal requirements. The REIT’s target is to complete all property sales by mid-year 2026.
The filing comes less than three weeks after Elme announced it completed the sale of five of its remaining properties – four multifamily and one office property — for approximately $252.7 million, as the REIT’s liquidation enters its final stages, according to a press release.
The Bethesda, Maryland-based REIT also entered into purchase and sale agreements for four of its remaining properties for approximately $431.3 million.
The REIT did not provide an update on distributions to shareholders in the filing. Earlier this month, it projected its distribution to shareholders to be between $16.74 and $17.02 per common share, compared to the estimated range of $17.02 to $17.47 per common share it announced in January. It estimates that the distributions from the sale of its remaining assets will range from $2.07 to $2.35 per common share.
Elme attributes the lower-than-projected liquidating distributions to reductions in the estimated range of proceeds from the sale of Riverside Apartments and the two remaining Washington, D.C., properties.
“The estimates of gross proceeds have continued to be negatively impacted by current market conditions in the D.C. area, which have been subject to prolonged softening throughout our marketing and sale process generally,” Elme said in the press release.
Elme began its sell-off last year. The REIT, formerly known as WashREIT until 2022, had expanded its presence outside the Washington, D.C., metro area by acquiring properties in Atlanta. Still, its stock continued to trade at a discount to private-market values, forcing it to explore alternatives.
After initiating a “formal evaluation of strategic alternatives” last year, it took the first step to liquidate the company by selling 19 properties to an affiliate of Atlanta-based investor, developer and manager Cortland Partners for $1.6 billion in cash last November.
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