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
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Date of Report (Date of Earliest event reported)
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September
10, 2008
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Berkshire
Income Realty, Inc
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(Exact
name of Registrant as specified in its charter)
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Maryland
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001-31659
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32-0024337
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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One
Beacon Street, Suite 1500, Boston, Massachusetts
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02108
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(Address
of principal executive offices)
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(Zip
Code)
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Registrants
telephone number, including area code
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(617)
523-7722
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(Former
name or former address, if changes since last
report)
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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:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement
On
September 10, 2008, the operating partnership of the Registrant, Berkshire
Income Realty – OP, L.P., through its wholly owned subsidiary, BRI Westchester
Limited Partnership (“Seller”), entered into a purchase and sale agreement (the
“Agreement”) to sell 100% of the fee simple interest of the Westchester West
Apartments (“Westchester West”), a garden style apartment property located in
Silver Spring, Maryland, to an unaffiliated third party. The sale
price of the property is $53,350,000, subject to adjustment for normal operating
prorations, apportionments and adjustments as provided for in the
Agreement. Additionally, the Agreement contemplates the buyer’s
assumption of the outstanding mortgage debt of approximately $37,500,000 (the
“Existing Loans”), secured by the property, which will further reduce the gross
proceeds to the Seller. The assumption of the Existing Loans is
subject to the written approval of the lender (such approval, the “Lender
Consent”). In the event that the Lender Consent is not obtained on or
before September 30, 2008 (the “Assumption Deadline”), the Seller has the right
at any time thereafter, and prior to the receipt of the Lender Consent, to
terminate the Agreement by providing written notice to the buyer. If
the Lender Consent is not obtained on or before December 31, 2008, or the lender
has disapproved of the assumption of the Existing Loans in writing, then the
buyer has the right at any time thereafter to terminate the Agreement by
providing written notice to Seller.
The
closing of the purchase and sale of the property under the Agreement is subject
to certain conditions specified in the Agreement, including the respective
rights of first refusal of Montgomery County, Maryland and a certified tenant
organization, to purchase Westchester West pursuant to applicable Montgomery
County regulations.
The
Agreement provides for an inspection period (the “Inspection Period”),
commencing on the date of the Agreement and ending on September 30, 2008, during
which the buyer may, upon reasonable notice to the Seller, enter the property to
perform due diligence activities. The buyer has the right to
terminate the Agreement in its sole discretion in writing, delivered to the
Seller at any time prior to the expiration of the Inspection
Period. The buyer also has the right to terminate the Agreement
during the period between the expiration of the Inspection Period and October 7,
2008, in the event that the buyer fails to receive approval for the acquisition
from the board of directors if its general partner. The Agreement
requires the buyer to indemnify the Registrant from any and all liabilities,
claims, costs and expenses arising out of the buyer’s entry onto the property
during the Inspection Period.
The
Agreement calls for the closing of the purchase and sale to be held on the date
that is ten days after the later to occur of (1) receipt of the Lender Consent;
or (2) receipt of a certificate from Montgomery County that neither Montgomery
County, nor a certified tenant organization, will exercise a right of first
refusal to purchase Westchester West, and that all right of first refusal
provisions have been complied with, provided that if buyer elects to pay off the
Existing Loans at the closing, then the closing shall take place ten
days after the buyer delivers notice of such exercise to the
Seller. If Montgomery County fails to issue such certificate on or
before the seventy-fifth day following the date on which it receives notice from
the Seller of the proposed sale of Westchester West, each of Seller and buyer
will have the right to terminate the Agreement by providing written notice to
the other.
At the
closing, the Management Agreement, by and between Seller and Berkshire Property
Advisors, L.L.C., an affiliate of the Registrant, will be terminated by
agreement of the parties thereto. Berkshire Property Advisors, L.L.C.
will not provide management services to the buyer following the
closing.
The sale
of the property is intended to qualify as a relinquished property in a
transaction structured to comply with the requirements of a Section 1031 tax
deferred exchange (“1031 Exchange”) under the Internal Revenue Code of 1986, as
amended (the “Tax Code”). As required by the Tax Code, a qualified
1031 Exchange intermediary has been retained in connection with the
sale of Westchester West and the related 1031 Exchange.
The
forgoing description of the Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the Agreement, which
is filed with this report as Exhibit 99.1 and is incorporated herein by
reference.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit
99.1
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Purchase
and Sale Agreement between BRI Westchester Limited Partnership, a Maryland
limited partnership, and
Home
Properties, L.P., a New York limited partnership, dated September
10, 2008.
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SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
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Berkshire
Income Realty, Inc.
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Date: September 16,
2008
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/s/
Christopher M. Nichols
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Name: Christopher
M. Nichols
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Title: Chief
Accounting Officer
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