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): February 8, 2018

KBS LEGACY PARTNERS APARTMENT REIT, INC.
(Exact Name of Registrant as Specified in Its Charter)
______________________________________________________

Maryland
 
000-54673
 
27-0668930
(State or Other Jurisdiction of
Incorporation or Organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 

800 Newport Center Drive, Suite 700
Newport Beach, California 92660
(Address of principal executive offices)

Registrant’s telephone number, including area code: (949) 417-6500

Not Applicable
(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:
¨    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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 
 
 
 
 




ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Disposition of Legacy at Valley Ranch
On October 26, 2010, KBS Legacy Partners Apartment REIT, Inc. (the “Company”), through an indirect wholly owned subsidiary (the “Legacy at Valley Ranch Owner”), purchased a 504-unit apartment complex (“Legacy at Valley Ranch”) on approximately 20.3 acres of land located in the Valley Ranch community of Irving, Texas.
On February 8, 2018, the Company completed the sale of Legacy at Valley Ranch to Elite Street Capital Valley Ranch Equity DE, LLC, a buyer unaffiliated with the Company or its advisor, for $66.5 million, net of closing credits, closing costs and fees. In connection with the disposition of Legacy at Valley Ranch, the Company, through the Legacy at Valley Ranch Owner, entered into a defeasance with the lender under the mortgage loan secured by Legacy at Valley Ranch (the “Legacy at Valley Ranch Mortgage Loan”) to defease the entire outstanding principal balance of $30.2 million and release Legacy at Valley Ranch as security for the Legacy at Valley Ranch Mortgage Loan.
Disposition of Crystal Park at Waterford
On May 8, 2013, the Company, through an indirect wholly owned subsidiary (the “Crystal Park at Waterford Owner”), purchased a 314-unit apartment complex (“Crystal Park at Waterford”) on approximately 16.3 acres of land located in Frederick, Maryland.
On February 8, 2018, the Company completed the sale of Crystal Park at Waterford to Elite Street Capital Crystal Park Equity DE, LLC, a buyer unaffiliated with the Company or its advisor, for $44.4 million, net of closing credits, closing costs and fees. In connection with the disposition of Crystal Park at Waterford, the Company, through the Crystal Park at Waterford Owner, entered into a defeasance with the lender under the mortgage loan secured by Crystal Park at Waterford (the “Crystal Park at Waterford Mortgage Loan”) to defease the entire outstanding principal balance of $26.2 million and release Crystal Park at Waterford as security for the Crystal Park at Waterford Mortgage Loan.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

1




SIGNATURES
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.
 
 
KBS LEGACY PARTNERS APARTMENT REIT, INC.
 
 
 
 
Date: 
February 12, 2018
By:  
/s/ JEFFREY K. WALDVOGEL
 
 
Jeffrey K. Waldvogel
 
 
Chief Financial Officer, Treasurer and Secretary
 
 
 
(principal financial officer)




KBS LEGACY PARTNERS APARTMENT REIT, INC.
SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
The following unaudited pro forma information should be read in conjunction with the consolidated balance sheets of KBS Legacy Partners Apartment REIT (“KBS Legacy Partners REIT”) as of September 30, 2017, the related consolidated statements of operations, stockholders’ equity, and cash flows for the nine months ended September 30, 2017, and the notes thereto. The consolidated financial statements of KBS Legacy Partners REIT as of and for the nine months ended September 30, 2017 have been included in KBS Legacy Partners REIT’s prior filings with the SEC.
The following unaudited pro forma consolidated balance sheets as of September 30, 2017 has been prepared to give effect to the dispositions of Legacy at Valley Ranch and Crystal Park at Waterford as if the dispositions occurred on September 30, 2017. The unaudited pro forma consolidated balance sheets does not purport to reflect the actual transaction or financial position of KBS Legacy Partners REIT as the dispositions occurred on February 8, 2018 and certain amounts and balances have changed.
The following unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2017 have been prepared to give effect to the February 8, 2018 dispositions of Legacy at Valley Ranch and Crystal Park at Waterford as if the dispositions occurred on January 1, 2017.
The following unaudited pro forma consolidated statements of operations for the year ended December 31, 2016 have been prepared to give effect to the February 8, 2018 dispositions of Legacy at Valley Ranch and Crystal Park at Waterford as if these dispositions occurred on January 1, 2016.
These unaudited pro forma financial statements have been prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the dispositions of Legacy at Valley Ranch and Crystal Park at Waterford been consummated as of the dates indicated.


F-1



KBS LEGACY PARTNERS APARTMENT REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
As of September 30, 2017
(in thousands, except share and per share amounts)

 
KBS Legacy Partners REIT Historical (a)
 
Pro Forma Adjustments
 
Pro Forma Total
 
 
Legacy at
Valley Ranch (b)
 
Crystal Park at Waterford (c)
 
Assets
 
 
 
 
 
 
 
Real estate held for investment:
 
 
 
 
 
 
 
Land
$
21,205

 
$
(4,838
)
 
$
(5,666
)
 
$
10,701

Buildings and improvements
162,858

 
(31,798
)
 
(40,558
)
 
90,502

Total real estate held for investment, cost
184,063

 
(36,636
)
 
(46,224
)
 
101,203

Less accumulated depreciation and amortization
(24,182
)
 
5,813

 
6,253

 
(12,116
)
Total real estate held for investment, net
159,881

 
(30,823
)
 
(39,971
)
 
89,087

Real estate held for sale, net
109,448

 

 

 
109,448

Total real estate, net
269,329

 
(30,823
)
 
(39,971
)
 
198,535

Cash and cash equivalents
47,547

 
35,490

(d)
18,129

(e)
101,166

Restricted cash
4,151

 

 

 
4,151

Assets related to real estate held for sale
17

 

 

 
17

Prepaid expenses and other assets
4,278

 

 

 
4,278

Total assets
$
325,322

 
$
4,667

 
$
(21,842
)
 
$
308,147

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Notes payable:
 
 
 
 
 
 
 
Notes payable, net
$
129,526

 
$
(30,402
)
(f)
$
(26,440
)
(g)
$
72,684

Notes payable related to real estate held for sale, net
82,397

 

 

 
82,397

Total notes payable, net
211,923

 
(30,402
)
 
(26,440
)
 
155,081

Accounts payable and accrued liabilities
4,729

 

 

 
4,729

Due to affiliates
260

 

 

 
260

Distributions payable
938

 

 

 
938

Other liabilities
2,465

 

 

 
2,465

Total liabilities
220,315

 
(30,402
)
 
(26,440
)
 
163,473

Commitments and contingencies
 
 
 
 
 
 
 
Redeemable common stock
482

 

 

 
482

Stockholders’ equity:
 
 
 
 
 
 
 
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding

 

 

 

Common stock, $.01 par value; 1,000,000,000 shares authorized, 21,026,756 shares issued and outstanding as of September 30, 2017
210

 

 

 
210

Additional paid-in capital
181,138

 

 

 
181,138

Cumulative distributions and net losses
(76,823
)
 
35,069

 
4,598

 
(37,156
)
Total stockholders’ equity
104,525

 
35,069

 
4,598

 
144,192

Total liabilities and stockholders’ equity
$
325,322

 
$
4,667

 
$
(21,842
)
 
$
308,147



F-2



KBS LEGACY PARTNERS APARTMENT REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
As of September 30, 2017
(a)
Historical consolidated balance sheets derived from KBS Legacy Partners REIT’s Quarterly Report on Form 10-Q as of September 30, 2017.
(b)
Represents adjustments to reflect the disposition of Legacy at Valley Ranch. The sale price, net of closing credits, closing costs and fees, of Legacy at Valley Ranch was $66.5 million.
(c)
Represents adjustments to reflect the disposition of Crystal Park at Waterford. The sale price, net of closing credits, closing costs and fees, of Crystal Park at Waterford was $44.4 million.
(d)
Represents the amount of proceeds from the disposition of Legacy at Valley Ranch, which amount was reduced by the aggregate outstanding balance of Legacy at Valley Ranch Mortgage Loan as of September 30, 2017 and estimated costs to defease the Legacy at Valley Ranch Mortgage Loan.
(e)
Represents the amount of proceeds from the disposition of Crystal Park at Waterford, which amount was reduced by the aggregate outstanding balance of Crystal Park at Waterford Mortgage Loan as of September 30, 2017 and estimated costs to defease the Crystal Park at Waterford Mortgage Loan.
(f)
Represents the aggregate outstanding principal balance of $30.5 million and $91,000 of unamortized deferred financing cost on the Legacy at Valley Ranch Mortgage Loan as of September 30, 2017.
(g)
Represents the aggregate outstanding principal balance of $26.5 million and $37,000 of unamortized deferred financing cost on the Crystal Park at Waterford Mortgage Loan as of September 30, 2017.



F-3



KBS LEGACY PARTNERS APARTMENT REIT, INC.
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2017
(in thousands, except share and per share amounts)

 
KBS Legacy Partners REIT
Historical (a)
 
Pro Forma Adjustments
 
Pro Forma Total
 
 
Legacy at
Valley Ranch (b)
 
Crystal Park at Waterford (c)
 
Revenues:
 
 
 
 
 
 
 
Rental income
$
31,458

 
$
(5,327
)
 
$
(3,433
)
 
$
22,698

Total revenues
31,458

 
(5,327
)
 
(3,433
)
 
22,698

Expenses:
 
 
 
 
 
 
 
Operating, maintenance, and management
4,435

 
(709
)
 
(425
)
 
3,301

Real estate taxes and insurance
5,347

 
(1,102
)
 
(523
)
 
3,722

Asset management fees to affiliate
234

 
(12
)
 
(32
)
 
190

Property management fees and expenses to affiliate
4,422

 
(866
)
 
(442
)
 
3,114

General and administrative expenses
2,190

 
(32
)
 
(13
)
 
2,145

Depreciation and amortization
8,384

 
(732
)
 
(1,123
)
 
6,529

Interest expense
7,180

 
(960
)
 
(551
)
 
5,669

Total expenses
32,192

 
(4,413
)
 
(3,109
)
 
24,670

Other income:
 
 
 
 
 
 
 
Interest and other income
106

 

 

 
106

Gains on sales of real estate
31,123

 

 

 
31,123

Loss from extinguishment of debt
(671
)
 

 

 
(671
)
Total other income
30,558

 

 

 
30,558

Net income
$
29,824

 
$
(914
)
 
$
(324
)
 
$
28,586

Net income per common share, basic and diluted
$
1.42

 
 
 
 
 
$
1.37

Weighted-average number of common shares outstanding, basic and diluted
20,935,670

 
 
 
 
 
20,935,670



F-4



KBS LEGACY PARTNERS APARTMENT REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2017
(a)
Historical financial information derived from KBS Legacy Partners REIT’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2017.
(b)
Amount represents the adjustment to remove the historical operations of Legacy at Valley Ranch, which was sold on February 8, 2018, as reflected in the historical statement of operations of KBS Legacy Partners REIT for the nine months ended September 30, 2017.
(c)
Amount represents the adjustment to remove the historical operations of Crystal Park at Waterford, which was sold on February 8, 2018, as reflected in the historical statement of operations of KBS Legacy Partners REIT for the nine months ended September 30, 2017.


F-5



KBS LEGACY PARTNERS APARTMENT REIT, INC.
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2016
(in thousands, except share and per share amounts)

 
KBS Legacy Partners REIT
Historical (a)
 
Pro Forma Adjustments
 
Pro Forma Total
 
 
Legacy at
Valley Ranch (b)
 
Crystal Park at Waterford (c)
 
Revenues:
 
 
 
 
 
 
 
Rental income
$
45,301

 
$
(6,881
)
 
$
(4,546
)
 
$
33,874

Total revenues
45,301

 
(6,881
)
 
(4,546
)
 
33,874

Expenses:
 
 
 
 
 
 
 
Operating, maintenance, and management
6,389

 
(856
)
 
(632
)
 
4,901

Real estate taxes and insurance
7,088

 
(1,450
)
 
(654
)
 
4,984

Asset management fees to affiliate
399

 
(19
)
 
(55
)
 
325

Property management fees and expenses to affiliate
5,811

 
(1,111
)
 
(552
)
 
4,148

General and administrative expenses
2,663

 
(2
)
 
(2
)
 
2,659

Depreciation and amortization
12,302

 
(958
)
 
(1,480
)
 
9,864

Interest expense
10,332

 
(1,308
)
 
(754
)
 
8,270

Total expenses
44,984

 
(5,704
)
 
(4,129
)
 
35,151

Other income:
 
 
 
 
 
 
 
Interest income
52

 

 

 
52

Other income
4,752

 

 

 
4,752

Total other income
4,804

 

 

 
4,804

Net income
$
5,121

 
$
(1,177
)
 
$
(417
)
 
$
3,527

Net income per common share, basic and diluted
$
0.25

 
 
 
 
 
$
0.17

Weighted-average number of common shares outstanding, basic and diluted
20,663,506

 
 
 
 
 
20,663,506



F-6



KBS LEGACY PARTNERS APARTMENT REIT, INC.
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2016
(a)
Historical financial information derived from KBS Legacy Partners REIT’s Annual Report on Form 10-K for the year ended December 31, 2016.
(b)
Amount represents the adjustment to remove the historical operations of Legacy at Valley Ranch, which was sold on February 8, 2018, as reflected in the historical statement of operations of KBS Legacy Partners REIT for the year ended December 31, 2016.
(c)
Amount represents the adjustment to remove the historical operations of Crystal Park at Waterford, which was sold on February 8, 2018, as reflected in the historical statement of operations of KBS Legacy Partners REIT for the year ended December 31, 2016.


F-7