Denholtz Backs out of Alabama Deal; Loses $1 Mil Deposit to Banyan

HUNTSVILLE, AL-Banyan Strategic Realty Trust of Chicago has received a $1 million earnest money deposit from Rahway, NJ-based Denholtz Management Corp. on Denholtz’s aborted attempted purchase of Huntsville’s University Square Business Center property.

The closing of the property originally was scheduled for May, but was postponed to Dec. 19 because of a prepayment prohibition relating to the mortgage on the property, according to Banyan’s prepared statement.

The contracted price and size of the property weren’t disclosed. GlobeSt.com couldn’t reach Banyan or Denholtz officials at publication deadline.

On Dec. 3, Denholtz notified Banyan in writing that Denholtz no longer intended to acquire University Square. The parties then mutually directed the earnest money to be paid to Banyan.

The REIT will use the money to make a principal payment of $500,000 onthe industrial revenue bonds used to finance its Riverport project in Louisville, KY. The remainder will be used for general corporate purposes, according to the statement.

“We are, of course, disappointed that Denholtz failed to complete the purchase of University Square,” L.G. Schafran, chairman, interim president and chief executive officer of Banyan, says in the statement. “We will immediately commence a marketing program in aneffort to sell this asset at a favorable price.” The new asking price wasn’t disclosed.

Banyan has been liquidating its assets since Jan. 5 of this year. The trust sold 85% or 2.7 million sf of its portfolio in May to Denholtz for $186 million, one of the largest portfolio deals of the year.

Banyan is trying to sell three remaining properties in Atlanta, Huntsville and Louisville. In Atlanta, Banyan owns interests in Northlake Tower Festival Mall, adjacent to Northlake Mall.