United Realty Trust, a publicly registered non-traded real estate investment trust founded by controversial New York real estate developer Jacob Frydman, entered into an agreement with Suneet Singal, the founding principal of First Capital Real Estate Investments LLC that will result in a change of control.
First Capital Real Estate Investments contributed real estate assets, interests, and contract rights with an overall net equity value of $41.8 million in exchange for the issuance of 3,344,868 units in United Realty Capital Operating Partnership L.P. at a price of $12.49 per unit, and the assumption of $106.4 million in debt related to the assets.
First Capital also purchased the advisor and property manager interests, together with 500,000 issued and outstanding shares of preferred stock and 18,182 shares of common stock for $25 million in cash and other considerations.
Frydman resigned as chief executive officer and secretary of the company and the advisor, United Realty Advisors, and as chairman of the board. He will be replaced by Singal.
Frydman was subsequently appointed as chief investment officer and entered into a consulting agreement with the advisor and First Capital in exchange for $500,000 in cash; the assignment of certain litigation claims; 20 percent of the advisor and property manager interests; the continued provision of certain office, telephone and email services; and reimbursement of reasonable expenses.
David Newman and Dr. Daniel Aronzon also resigned as independent members of the board, and J. Tim Pruban and Javier G. Van de Steeg were appointed as their replacements.
Last month, the DI Wire reported that Frydman fired Steven Kahn, the chief financial officer and treasurer of the company and its advisor.
United Realty Trust is a real estate investment trust based in New York that was formed in November 2011 for the purpose of investing primarily in a diversified portfolio of income-producing real estate properties and other real estate-related assets. As of June 30, 2015, the company had sold 2,570,059 common shares for gross offering proceeds of approximately $27.7 million and net offering proceeds of approximately $24.7 million.