Alexander’s Announces IKEA Exercises its Option to Purchase Paramus Property

Rhea-AI Summary

ALEXANDER’S, INC. (ALX) announced the exercise of a purchase option by IKEA Property for its Paramus, New Jersey property, with an anticipated closing in Q4 2021. The purchase price is set at $75 million, and after repaying a $68 million mortgage, the company expects around $6 million in net cash proceeds. The projected financial gain from this transaction is approximately $60 million, with a tax gain of about $63 million. Alexander’s does not plan to distribute a special dividend from this sale.

Positive

• Sale of Paramus property expected to generate approximately $60 million in financial gain.
• Projected tax gain of about $63 million from the sale.
• Net cash proceeds of approximately $6 million after mortgage repayment.

Negative

• The company does not expect to pay a special dividend related to the transaction.

PARAMUS, N.J., May 13, 2021 (GLOBE NEWSWIRE) -- ALEXANDER’S, INC. (New York Stock Exchange: ALX) announced today that it received notice from IKEA Property, Inc. of its election to exercise its purchase option of the Paramus, New Jersey property. The Company anticipates closing the sale in the fourth quarter of 2021. The purchase price is $75 million and after repayment of the $68 million mortgage, the Company expects to receive net cash proceeds of approximately $6 million after costs. The financial statement gain will be approximately $60 million and the tax gain will be approximately $63 million. The Company does not expect to pay a special dividend related to this transaction.

Alexander’s, Inc. is a real estate investment trust that has seven properties in the greater New York City metropolitan area.

CONTACT:
MATTHEW IOCCO
(201) 587-8541

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include information concerning the expected sale of the Paramus Property and the expected net proceeds, financial statement and tax gain and involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. For a discussion of factors that could materially affect the outcome of the Company’s forward-looking statements and our future results and financial condition, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Such factors include, among others, risks associated with the performance by IKEA of its obligations to purchase the Paramus property.

FAQ

What is the purchase price of the Paramus property by IKEA for ALX?

The purchase price is $75 million.

When does Alexander's, Inc. expect to close the sale of the Paramus property?

The company anticipates closing the sale in the fourth quarter of 2021.

What are the expected financial gains from the property sale for ALX?

The expected financial gain is approximately $60 million, and the tax gain is about $63 million.

How much net cash will Alexander's, Inc. receive from the sale?

The company expects to receive around $6 million in net cash proceeds after repaying the mortgage.

Will ALX pay a special dividend from the sale of the Paramus property?

No, the company does not expect to pay a special dividend related to this transaction.