Regency Affiliates Security West Lease Termination Notice Received

Rhea-AI Summary

Regency Affiliates, Inc. (OTC Pink: RAFI) announced the termination notice from GSA for the Security West building lease, effective November 1, 2023. Management remains optimistic, citing two years to explore alternative uses for the facility, which will be nearly debt-free upon GSA's departure. They anticipate potential demand for the space from other government departments or private tenants, and the possibility of securing new financing with a long-term tenant. Regency currently holds a 50% interest in Security West and a majority interest in several self-storage facilities in Pennsylvania.

Positive

• Management estimates Security West will be almost debt-free upon GSA's departure, providing financial flexibility.
• Potential demand for the facility's space is expected from government or private sector tenants.

Negative

• The termination notice creates uncertainty regarding Regency's investment in Security West.

NEW YORK, Oct. 5, 2021 /PRNewswire/ -- Regency Affiliates, Inc. (OTC Pink: RAFI) ("Regency") announced that Security Land and Development Company Limited Partnership received a notice under GSA's lease for the Security West building to terminate the lease and vacate the building effective November 1, 2023.

Management Comments

"While the termination notice from GSA creates uncertainty about Regency's investment in Security West, we have several reasons to be optimistic about this investment. We have about two years to evaluate alternative uses for the facility before GSA vacates the building. At that time, management estimates that the facility will be almost debt free which provides significant financial flexibility. Security West's manager has expressed confidence that, based on current markets conditions and other factors, there should be demand for Security West's space either from other government departments represented by GSA or from private sector tenants or investors. Moreover, a new long-term tenant could facilitate obtaining new financing on the facility. We will keep our shareholders updated about future developments at Security West," commented Laurence Levy, Chairman, CEO and CFO of Regency.

About Regency Affiliates

Regency Affiliates, Inc. invests in businesses that generate attractive, predictable and sustainable returns on capital. We are currently invested in two assets:

1. A 50% limited partnership interest in the Security West Complex located on 34.3 acres in Woodlawn, Maryland. The facility is occupied under a lease with the United States General Services Administration which will terminate effective November 1, 2023; and
2. A majority joint-venture interest in a portfolio of five stand-alone self-storage facilities in the Harrisburg, Pennsylvania vicinity comprising approximately 337,000 square feet of net rentable space in excess of 2,500 climate and non-climate controlled storage units.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements are statements that are predictive in nature or depend on or refer to future events and can be identified by the words "may," "might," "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope," or similar expressions. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.  Future events and actual results affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements.  Important factors that contribute to such risks include, but are not limited to, a default or catastrophe involving the properties in which we invest, the extent to which we are able to raise additional capital, and competition for additional investment opportunities. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.  For a more detailed description of these uncertainties and other factors, please see our website at www.regencyaffiliates.com.

View original content:https://www.prnewswire.com/news-releases/regency-affiliates-security-west-lease-termination-notice-received-301393345.html

SOURCE Regency Affiliates, Inc.

FAQ

What announcement did Regency Affiliates make on October 5, 2021?

Regency Affiliates announced the receipt of a termination notice from GSA regarding the Security West building lease, effective November 1, 2023.

How will the termination of the Security West lease affect Regency Affiliates?

The lease termination creates uncertainty for Regency's investment but also provides an opportunity to explore alternative uses for the property.

What is the current investment status of Regency Affiliates in Security West?

Regency holds a 50% limited partnership interest in the Security West Complex.

What future options does Regency Affiliates have for Security West after GSA vacates?

Regency has about two years to evaluate alternative uses for the facility, potentially attracting new tenants.

What was the date of the lease termination notice for Security West?

The lease termination notice for Security West is effective November 1, 2023.