Broad Street Realty, LLC And MedAmerica Properties Inc. Complete The First Phase Of The Previously Announced Merger Transactions

MedAmerica Properties Inc. changes its name to Broad Street Realty, Inc.

BETHESDA, MD and BOCA RATON, FL (STL.News) Broad Street Realty, LLC (“Broad Street”) and MedAmerica Properties Inc. (OTC: MAMP) Friday announced that they have completed the first phase of the previously announced mergers.  As a result, MedAmerica, now known as Broad Street Realty, Inc., has become a fully integrated and self-managed publicly owned real estate company. With the closing of the initial mergers, the resulting company now owns nine primarily grocery-anchored neighborhood shopping center properties with over 865,000 square feet of gross leasable space in Maryland, Pennsylvania, Virginia and Washington, DC and succeeds to Broad Street’s operating platform, including its commercial brokerage, property management and development businesses.  The combined company has approximately 50 employees and is headquartered in Bethesda, Maryland with additional offices in Denver, Colorado, Washington, D.C. and Manassas, Virginia.

As consideration for the initial mergers, prior investors in the Broad Street entities received an aggregate of 16,006,149 shares of MedAmerica’s common stock and an aggregate of 2,827,904 units of limited partnership interest (“OP units”) in its newly formed operating partnership, as well as an aggregate of $0.9 million in cash.  As of the completion of the initial mergers, prior investors in the Broad Street entities collectively own approximately 87.0% of the shares of common stock and OP units of the combined company and previously existing MedAmerica shareholders own approximately 13.0%.

The new ticker symbol for the combined company’s common stock on the OTCQB market will be “BRST” effective December 30, 2019.

The combined company expects to close the remainder of the previously announced mergers with Broad Street entities over the next several months, subject to customary closing conditions, including obtaining consent of the requisite lenders.  The additional mergers would result in the acquisition of an additional eight neighborhood shopping center properties with over 1.2 million square feet of gross leasable space in Maryland, Virginia and Colorado.  Broad Street will continue to manage these properties prior to the completion of the additional mergers.

Commenting on the closing of the initial mergers, Gary O. Marino, MedAmerica’s Chairman, said, “Over the past several years, MedAmerica has reviewed and pursued numerous acquisition/merger opportunities.  Broad Street represents a unique and exciting partner for MedAmerica.  Not only does the Broad Street portfolio of shopping centers represent a collection of well-located, diversified neighborhood shopping center properties, the company also possesses strong continuing cash flow and equity value.  Broad Street is managed by a seasoned team of professionals led by Michael Z. Jacoby, Broad Street’s CEO who has more than 30 years of experience in the commercial real estate industry.”

Michael Z. Jacoby, who will serve as Chairman of the Board of Directors and as Chief Executive Officer of the combined company, said, “We are very pleased to announce the merger of our organization with MedAmerica. This is the next step in the pursuit of accomplishing our long-terms goals on behalf of our partners, employees and shareholders.  We believe the public platform gives us a lot more tools and flexibility to pursue future growth opportunities and acquisitions.”

In connection with the closing of the initial mergers, certain subsidiaries of the combined company entered into a loan agreement with a subsidiary of a real estate fund managed by Basis Management Group, LLC, which provides for a loan of up to $66.9 million, of which $63.8 million was drawn at closing.  The loan is secured by mortgages on six of the properties acquired in the initial mergers.  In addition, another subsidiary of a real estate fund managed by Basis Management Group, LLC committed to invest up to $10.7 million in a newly formed subsidiary of the combined company, of which $6.9 million was funded in connection with the closing of the initial mergers.  The equity interest is entitled to a cumulative preferred annual return of 14.0%.  The combined company also entered into a loan agreement with MVB Bank, Inc. with respect to a $6.5 million loan consisting of a $4.5 million term loan and a $2.0 million revolving credit facility.

The proceeds from the new financings were used to repay indebtedness securing properties acquired in the initial mergers and for general corporate purposes, including the payment of certain transaction costs.

Baird is serving as exclusive financial advisor to Broad Street, and Morrison & Foerster and Shulman Rogers are serving as legal advisors to Broad Street.

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