Colonial Properties Trust (NYSE: CLP), today announced the sale of Metropolitan Midtown, its mixed-use project located in Charlotte, North Carolina, for $94.4 million in cash. Colonial Properties Trust (the Company) also announced it has adjusted its previously announced results for the fourth quarter and year ended December 31, 2012, due to a jury verdict in the previously disclosed Colonial Grand at Traditions litigation in the Circuit Court of Baldwin County, Alabama.
Metropolitan Midtown Disposition
Opened in 2008, Metropolitan Midtown comprises 170,000 square feet of office space and 172,000 square feet of retail space, and was 93.5 percent occupied at December 31, 2012. The sales proceeds will be used to fund the multifamily development pipeline and improve the Company’s balance sheet. With the closing of Metropolitan Midtown, the Company’s goal of having at least 90 percent of its total net operating income generated from its multifamily properties has been achieved.
Colonial Grand at Traditions Litigation
As previously reported, in December 2010, SM Traditions Associates, LLC, a member in TA Colonial Traditions, LLC, the joint venture entity, filed claims against Colonial Realty Limited Partnership, Colonial Properties Trust, Colonial Properties Services, Inc. and Colonial Construction Services, LLC (collectively, the Company) relating to the Company’s oversight and involvement in the development and construction of the Colonial Grand at Traditions, a multifamily apartment community, including breach of management and development agreements, material misrepresentations, fraudulent concealment and breach of fiduciary duties. Also, as previously reported, the Company purchased the note, evidencing the construction loan made to TA Traditions, LLC.
On February 1, 2013, a Baldwin County, Alabama jury awarded SM Traditions Associates, LLC $6.7 million in compensatory damages and $6.0 million in punitive damages for a total of $12.7 million. The jury also returned verdicts in favor of SM Traditions Associates, LLC and TA Colonial Traditions, LLC with respect to the Company’s counter-claims.