BROAD STREET REALTY SECURES PREFERRED EQUITY INVESTMENT FROM FORTRESS INVESTMENT GROUP

Rhea-AI Summary

Broad Street Realty, Inc. (OTCQX: BRST) announced a strategic partnership with Fortress Investment Group, securing an $80 million preferred equity investment and a $15 million mezzanine loan. This collaboration will aid in the completion of the Lamar Station Plaza acquisition and strengthen their financial position. Fortress will also join Broad Street's Board, facilitating further growth opportunities. The funding will enhance working capital and help retire existing loans, positioning Broad Street for future investments in key markets.

Positive

• Secured $80 million preferred equity investment and $15 million mezzanine loan.
• Strengthened financial position with support from Fortress Investment Group.
• Completion of the acquisition of Lamar Station Plaza.
• New joint venture expected to capitalize on growth opportunities.

Negative

• Increased leverage due to new debt and preferred equity, affecting cash dividend ability.

BETHESDA, Md., Dec. 1, 2022 /PRNewswire/ -- Broad Street Realty, Inc. (OTCQX: BRST), a fully integrated and self-managed publicly owned real estate company focused on Essential grocery anchored and mixed-use assets, announces that through a newly formed subsidiary it has secured an $80 million preferred equity Investment and a property specific $15 million mezzanine loan from an affiliate of Fortress Investment Group LLC ("Fortress").

Broad Street Realty secures preferred equity investment from Fortress Investment Group.

Michael Z. Jacoby, Chairman of the Board of Directors and Chief Executive Officer of the Company, said, "We are proud to announce the expansion of our successful relationship with Fortress by entering into a new joint venture. Just as important as their capital, they bring to the table a world class institutional real estate team that we believe will help accelerate us towards the next step in the growth and profitability of our organization and liquidity for our shareholders".

Noah Shore, Fortress Managing Director, said: "We have deep respect for the Broad Street team and their proven, highly focused and disciplined investment approach. We are excited to announce this new joint venture, which we believe is exceptionally well-positioned to capitalize on additional opportunities in Broad Street's targeted markets."

In connection with the investment, Fortress joins Broad Street's Board with a director and observer seat. Noah Shore will serve as the Board member on Broad Street's Board of Directors. The Fortress investment provided Broad Street with the capital to complete its previously announced merger of the 98% leased 187,000 square foot Lamar Station Plaza shopping center and its acquisition of 6575 W. Colfax Avenue, an adjoining property in Lakewood, Colorado. In addition, Broad Street acquired the mixed-use portion of Midtown Row in Williamsburg, Virginia which includes 240 student housing units and 64,000 square feet of retail space. The balance of the investment is being used to retire several other loans and a previous preferred investment and to provide working capital to the Company.

About Broad Street Realty, Inc.

Broad Street Realty, Inc. is focused on Essential grocery anchored and mixed-use assets located in densely populated technology employment hubs and higher education centers within the Mid-Atlantic, Southeast and Colorado Markets. Our goals are to find assets with both sustainable cash flow and the opportunity to drive same store NOI. Our highly experienced leadership team, their historic success and industry relationships, a disciplined investment approach, analytic expertise, and an obsession over customer service allow for us to provide attractive AFFO grow.

About Fortress Investment Group LLC

Fortress Investment Group LLC is a leading, highly diversified global investment manager. Founded in 1998, Fortress manages $45.7 billion of assets under management as of September 30, 2022, on behalf of over 1,900 institutional clients and private investors worldwide across a range of credit and real estate, private equity and permanent capital investment strategies.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the U.S. federal securities laws.  These statements are based on current expectations of the Company's management with respect to the transactions and other matters described in this press release (the "Transactions"). While the Company's management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond the control of the Company's management. These risks include, but are not limited to: the ability to recognize the benefits of the Transactions; the amount of the costs, fees, expenses and charges related to the Transactions; the Company's substantial leverage as a result of indebtedness incurred and preferred equity issued in connection with the Transactions, which could adversely affect the Company's ability to pay cash dividends and meet other cash needs; the Company's ability to repay, refinance, restructure and/or extend its indebtedness as it comes due; the occurrence of a trigger event under the joint venture agreement with Fortress, including as a result of the failure to contribute the certain excluded properties to the  joint venture by the applicable outside date; the availability of financing and capital to the Company; the Company's ability to identify, finance, consummate and integrate additional acquisitions or investments; adverse economic or real estate developments, either nationally or in the markets in which the Company's properties are located; adverse changes in financial markets or interest rates; the nature and extent of competition for tenants and acquisitions; other factors affecting the retail industry or the real estate industry generally; and other risks that are set forth under "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and other documents filed by the Company with the SEC from time to time. All forward-looking statements speak only as of the date of this press release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section. Except as otherwise may be required by law, the Company undertakes no obligation to update or publicly release any revisions to forward-looking statements to reflect events, circumstances or changes in expectations after the date of this press release.

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SOURCE Broad Street Realty, Inc.

FAQ

What investment did Broad Street Realty secure from Fortress Investment Group?

Broad Street Realty secured an $80 million preferred equity investment and a $15 million mezzanine loan.

How will the Fortress investment impact Broad Street Realty's operations?

The investment will help complete the acquisition of Lamar Station Plaza, enhance working capital, and retire existing loans.

Who will join Broad Street Realty's Board as part of the Fortress investment?

Noah Shore from Fortress Investment Group will join Broad Street Realty's Board.

What are the main objectives of Broad Street Realty after securing Fortress investment?

The main objectives include growth and profitability, utilizing the partnership to explore new investment opportunities.

What risks are associated with Broad Street Realty's new debt and equity financing?

The new financing increases leverage, potentially impacting the company's ability to pay cash dividends and meet other cash needs.