Cottonwood Communities to Purchase Utah Development Project
November 2, 2021 | James Sprow | Blue Vault
On October 26, 2021, Cottonwood Communities, Inc. (the “Company”), through a wholly owned subsidiary of its operating partnership, entered a real estate purchase contract with 33rd and 13th, LLC (the “Seller”) to purchase a multifamily development project located on 1.76 acres of land and referred to as 33rd and 13th – Millcreek in Millcreek, Utah (the “Project”) for $7.2 million. The Seller is directly or indirectly owned by the following individuals who are also executive officers of the Company: Daniel Shaeffer (11.3636%), Chad Christensen (22.7273%), Gregg Christensen (11.3636%), Glenn Rand (2.2727%), Stan Hanks (2.2727%), Susan Hallenberg (1.8182%) and Eric Marlin (1.3636%). In addition, an unaffiliated third party owns 36.3636% of the Seller and the balance is owned by non-executive employees of the Company or its affiliates. The purchase of the Project was approved by the conflicts committee of the board of directors, which is comprised entirely of independent directors who have no interest in the transaction. In addition, the purchase price for the Project was established based on an appraisal provided by an independent third-party appraisal firm. On October 29, 2021, the Company acquired the Project.
Upon completion, the Project is expected to comprise approximately 226 apartments and 4,000 square feet of retail space. The total development cost of the Project is expected to be approximately $71.8 million, of which approximately $28.7 million is expected to be funded by capital contributions. The Project is expected to break ground during the third quarter of 2022 and be completed in the summer of 2024. Although the Company expects the Project to be completed as described, the Company can provide no assurances that the development plans or timing will not change.
In addition, on November 1, 2021, the Company, through a wholly owned subsidiary of its operating partnership, entered a Membership Interest Purchase Agreement to sell all of the membership interests of Sugar House Commons, LLC (“Windsor Court”) directly or indirectly to the following individuals who are also executive officers of the Company: Daniel Shaeffer, Chad Christensen, Gregg Christensen and Eric Marlin for $510,000. The sole asset of Sugar House Commons, LLC is a 0.72-acre parcel of land located in Salt Lake City, Utah valued at $510,000 pursuant to a recent third-party appraisal report. The sale was approved by the conflicts committee of the board of directors, which is comprised entirely of independent directors who have no interest in the transaction. The Company expects the disposition of Windsor Court to close in the fourth quarter of 2021 upon satisfaction of agreed upon closing conditions although the Company can provide no assurances that events will not arise that could prevent the Company from disposing of the property.
Source: SEC
