Item 8.01. Other Events.
On November 5, 2019, Saul Centers, Inc. (the "Company") entered into an
agreement (the "Contribution Agreement") to acquire from the B. F. Saul Real
Estate Investment Trust (the "Trust") approximately 6.8 acres of land and its
leasehold interest in approximately 1.3 acres of contiguous land, together in
each case with the improvements located thereon, located at the Twinbrook Metro
Station in Rockville, Maryland (the "Contributed Property"). The Contributed
Property is immediately adjacent to approximately 10 acres owned by the Company.
In exchange for the Contributed Property, the Company will issue to the Trust
1,416,071 limited partnership units in the Operating Partnership ("OP Units") at
an agreed value of no less than $56.00 per OP Unit, representing an aggregate
value of $79.3 million for the Contributed Property. Title to the Contributed
Property and the OP Units were placed in escrow until certain conditions of the
Contribution Agreement were satisfied.
On March 5, 2021, the Company entered into an amendment to the Contribution
Agreement in which it and the Trust agreed to release to the Company from escrow
the deed and assignment of the leasehold interest of the Contributed Property,
as of that date, and reimburse the Trust for certain expenses pursuant to the
Contribution Agreement. The OP Units will remain in escrow until the conditions
of the original Contribution Agreement, as amended, are satisfied.
Since the date the Contribution Agreement was executed, a full Project Plan for
redevelopment of a major mixed-use project spanning both the Company's property
and the Contributed Property has been finalized and is unappealable. The
development rights under the Project Plan extend for a thirty-year term to 2049.
A Site Plan allowing for development of a planned Phase I within the Contributed
Property, which includes an 80,000 square foot Wegmans, adjacent small shop
space, 450 apartments and a 230,000 square foot office building, was approved by
the City of Rockville in 2020. The Site Plan is under appeal, but such appeal is
not a technical or actual prohibition on moving forward with development.
The Company has acquired title to the property in order to have complete control
over the final aspects of pre-development, project bidding, contractor selection
and construction lender discussions in Phase I. This control will also assure
the preservation of the Wegmans lease and its value to this site and, as
importantly, to the Company's adjacent holdings. The timing of construction will
depend on building permit approvals and market conditions.
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