UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 7, 2012
Resource Real Estate Opportunity REIT, Inc.
(Exact name of registrant as specified in its charter)
Commission file number 000-54369
| Maryland | 27-0331816 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
One Crescent Drive, Suite 203, Navy Yard Corporate Center, Philadelphia, PA 19112
(Address of principal executive offices) (Zip code)
(215) 231-7050
(Registrant’s telephone number, including area code)
(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 following obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the securities Act (17CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 7, 2012, Resource Real Estate Opportunity REIT, Inc. (the “Company”), through a wholly owned subsidiary, entered into an agreement to purchase, at a discount, a non-performing promissory note (the “Note”), secured by a first priority mortgage on a multifamily townhome community, from an unaffiliated seller, U.S. Bank National Association. The contract purchase price for the Note is $10.3 million, excluding closing costs. After completing our due diligence, we provided a non-refundable deposit of $1.1 million under the loan purchase and sale agreement. If the purchase is consummated, we expect to fund the purchase price with proceeds from our public offering.
The Note was originated in March 2007 in the original principal amount of $19.75 million. The Note bears interest at a rate per annum equal to 5.995%. The Note is secured by a mortgage (the “Mortgage”) encumbering the Deerfield Luxury Townhomes (“Deerfield”), a 166 unit multifamily townhome community located in Hermantown, Minnesota. Deerfield was constructed in 1993. Deerfield has an effective occupancy of 76.5% and offers tenants amenities including an outdoor pool, fitness center, clubhouse, basketball court, and sauna.
The borrower under the Note is Deerfield Luxury Townhomes, LLC (the “Borrower”), which is not affiliated with the Company or its advisor. The Borrower is in default on the Note for failure to make monthly debt service payments. As of March 7, 2012, the outstanding loan balance on the Note was approximately $19.75 million, plus unpaid interest and late fees. The consummation of the purchase of the Note is subject to substantial conditions and generally will depend upon the satisfaction of the conditions to the acquisition contained in the relevant contracts.
Other assets may be identified in the future that we may acquire before or instead of the investment described above.
SIGNATURE
Pursuant 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 thereunto duly authorized.
| RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. | ||||||
| Dated: March 13, 2012 |
By: | /s/ Alan F. Feldman | ||||
| Alan F. Feldman | ||||||