The sellers are Dallas-based Transcontinental Realty Investors, American Realty Investors Inc. and Income Opportunity Realty Investors Inc., all directed by Gene Phillips, former president of the bankrupt Southmark Corp.

At publication deadline, Globest.com was attempting to reach Innovo's investor relations representative Donna Drewrey to learn the number of properties involved in the deal; location, size, age and occupancy of the individual properties; and why the transaction was done at this time.

In a prepared statement, Drewrey says Innovo Group Inc., Innovo Realty's parent, funded the deal by issuing 195,295 non-recourse, non-convertible preferred shares, valued at $100 per share, to Innovo Realty. The shares' value was 20% of the $98 million purchase price ($19.6 million). The balance was funded through undisclosed third-party investors and third-party financing.

Innovo Realty is a limited partner in the deal. Other partners were not immediately identified.

The deal is structured so that Innovo receives fees equal to 1% of the gross annual revenue from the properties. Innovo also gets an additional 1% of gross annual revenue, less administrative and filing fees, so long as the properties are owned by the partnership.

The deal also gives Innovo 30% of the excess cash flow generated by the operation and sale of the properties at the back end of the transaction. That would come after complete redemption of the preferred shares and the payment of lien holders and preferred distributions and returns to investors and others, Drewrey says in the statement.

Innovo Group Inc., through its subsidiaries Innovo Inc., Innovo Apparel Inc. and Joe's Jeans, is a sales and marketing company that designs and sells craft, accessory and apparel products to the retail and premium markets.