AND EXCHANGE COMMISSION
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 9,
2010 (September 3, 2010)
Harvard Multifamily REIT I, Inc.
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of
incorporation or organization)
15601 Dallas Parkway, Suite 600, Addison, Texas
(Address of principal executive offices)
(Registrants telephone number, including
(Former name or former address, if changed
since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
Item 1.01 Entry
into a Material Definitive Agreement.
September 3, 2010, Behringer Harvard Multifamily OP I LP (BHMF OP), the
operating partnership of Behringer Harvard Multifamily REIT I, Inc. (which
may be referred to as the Registrant, we, our or us), entered into an
agreement to acquire 75% of the membership interests (the Interests) in Aqua
Rental LLC (Aqua Rental) from unaffiliated sellers, Lakeshore Aqua Rental
LLC (Lakeshore) and Magellan Aqua LLC
(Magellan) (collectively, the Sellers).
Lakeshore currently owns 99.9% of the membership interests in Aqua
Rental, and Magellan currently owns the remaining 0.1%.
the closing of this transaction, Aqua Rental will own two of the five legally
divided parcels that make up Aqua at Lakeshore East, an 82-story, mixed-use
building located in Chicago, Illinois and completed in 2009 (the parcels
are currently owned by Aqua at Lakeshore East, LLC, an affiliate of the
Sellers). These two parcels consist of (i) 474
residential apartments located on levels 19 through 52 of the building and
related amenities and facilities located on levels 1 through 3 and P1 through
P5, including a public parking garage with approximately 967 parking spaces,
and (ii) approximately 60,700 square feet of space for commercial and
retail uses located on levels P1, 1 and 2 of the building.
the purchase of the Interests is consummated, we will, through our subsidiaries
or affiliates, become party to Aqua Rentals amended and restated limited
liability company agreement (the LLC Agreement). One subsidiary or affiliate of ours will
acquire the 0.1% interest in Aqua Rental owned by Magellan and serve as the
managing member. Another subsidiary or
affiliate of ours will acquire a 74.9% interest in Aqua Rental from
Lakeshore. Lakeshore will retain the
remaining 25.0% interest in Aqua Rental.
Our subsidiary or affiliate acting as the managing member will have
exclusive control of the management, control and direction of Aqua Rental and
its operations. Below, we refer to such
subsidiaries or affiliates collectively as we or us.
the LLC Agreement, distributions of the net cash flow of Aqua Rental will first
be paid to us until we receive distributions in an amount equal to a 9% annual
return, compounded annually, on our capital contributions, which are currently
contemplated to be $89 million.
Distributions will continue to be paid to us until we receive distributions
in an additional amount equal to our capital contributions. Thereafter, 100% of remaining distributions
will be paid to all of the members of Aqua Rental pro rata in accordance with
each members interest.
may, in anticipation of a capital transaction, exercise a call right under the
LLC agreement to acquire Lakeshores 25.0% membership interest in Aqua Rental
in exchange for a profits participation agreement providing Lakeshore with the
same economic rights it would have as a member pursuant to the distribution
provisions described above. In addition,
either we or Lakeshore may initiate buy/sell proceedings pursuant to which an
offer for the others interests may be made.
If the offeree does not accept the offer, it must purchase the offerors
interests based on the same valuation of Aqua Rental implied by the offerors
offer. No buy/sell offer may be made
until after the third anniversary of the date of the LLC Agreement. Finally, if we propose to transfer our
interests in Aqua Rental to one or more third parties, then Lakeshore will be
required to transfer all of its interests in the same transaction.
contract purchase price for the Interests is $189 million, excluding closing
costs and adjustments. We expect to
obtain financing in the amount of at least $100 million in connection with the
acquisition. If the purchase is
consummated, we expect that the purchase price not funded by the loan will be
funded from proceeds of our initial public offering.
consummation of the purchase of the Interests is subject to substantial
conditions. The consummation of this
acquisition generally will depend upon:
· our obtaining financing in the amount of at
least $100 million in connection with the acquisition;
· execution of an office lease agreement
pursuant to which Aqua Rental leases approximately 41,981 square feet of
commercial office space to Magellan or an affiliate thereof;
· execution of a parking master lease agreement
for the 967-space parking garage in Aqua at Lakeshore East pursuant to which
Aqua Rental leases such parking garage to either (a) an affiliate of
Lakeshore who will then either sublease or enter into a new management
agreement with a first-class commercial parking garage operator that is not an
affiliate of Lakeshore or us or (b) a joint venture between an affiliate
of Lakeshore and first class commercial parking garage operator that is not an
affiliate of Lakeshore;
· execution of a property management agreement
pursuant to which Aqua Rental engages an affiliate of Lakeshore;
· the completion of a sale by the Sellers of
the hotel contained in the Aqua at Lakeshore building;
· the satisfaction of the other conditions to
the acquisition contained in the relevant contracts;
· no material adverse change occurring relating
to the property; and
· our receipt of satisfactory due diligence
information, including but not limited to, environmental and property condition
reports, and lease information.
assets may be identified in the future that we may acquire before or instead of
the investment described above. At the
time of this filing, we cannot make any assurances that the closing of this
investment is probable.
Item 7.01 Regulation
September 9, 2010, the Registrant began distribution of its 2010 Second
Quarter Report Summary. A copy of the
2010 Second Quarter Report Summary, appearing as Exhibit 99.1, is
furnished and not filed pursuant to Regulation FD.
Item 9.01 Financial
Statements and Exhibits.
99.1 2010 Second Quarter Report Summary
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
Gerald J. Reihsen, III
J. Reihsen, III
Vice President Corporate
Development and Legal
Second Quarter Report Summary.