BFC Financial Corporation's Subsidiary, BBX Capital Corporation,
Files Its Corporate Overview
FORT LAUDERDALE,
FL--(Marketwired - April 16, 2014) - BFC
Financial Corporation (OTCQB: BFCF)
announced today that its subsidiary, BBX Capital Corporation ("BBX
Capital") (NYSE: BBX), has filed a
Form 8-K containing a Corporate Overview of BBX Capital with the
Securities and Exchange Commission.
This Corporate Overview provides a general overview to investors
on BBX Capital and its current business strategies.
The BBX Capital Corporate Overview is available to view on the
SEC's website, www.sec.gov, on BFC Financial's website,
www.BFCFinancial.com, and is also set forth below.
BBX CAPITAL
CORPORATION
CORPORATE
OVERVIEW
BBX Capital, a New York Stock Exchange listed company
(NYSE: BBX), is involved in the
acquisition, ownership and management of, and joint ventures and
investments in real estate and real estate development projects as
well as investments and management of middle market operating
businesses. In addition, BBX Capital owns a 46% indirect interest
in Bluegreen Corporation, a vacation ownership company with more
than 60 owned or managed resorts, 225,000 owners of vacation
ownership interests and 4,700 employees. BFC Financial
Corporation, BBX Capital's majority shareholder, owns the remaining
54% interest in Bluegreen Corporation.
But that only tells you what we do rather than who we
are.
First, our
culture is entrepreneurial. Our objective is to make portfolio
investments based on the fundamentals: quality real estate,
the right operating companies and partnering with good people.
Second, our goal
is to increase value over time as opposed to focusing on quarterly
or yearly earnings. Since we expect our investments to be longer
term, we anticipate and are willing to accept that our earnings are
likely to be uneven. While capital markets generally encourage
short term goals, our objective is long term growth as measured by
increases in book value per share over time.
We believe our growth will come from our real estate investments
and developments, and our operating companies. Our investment
decisions will be based on opportunities for long term value
creation as opposed to short term earnings.
While BBX Capital is a new name, our family of companies date
back more than forty years and our management team has a long
history of entrepreneurship.
OUR
BEGINNINGS
1972 - 1984 BFC
Financial Corporation (BBX Capital's Parent, which owns 52% of BBX
Capital)
In 1972, we began a series of public and private limited
partnerships which raised in excess of $200 million and purchased
real estate throughout the Southeast. In all, more than 25
partnerships were created to purchase and own
apartments, shopping centers, office buildings and warehouses.
In 1978, a number of these entities consolidated to become BFC
Financial Corporation (OTCQB:
BFCF).
In 1984, BFC Financial purchased its initial stake in
BankAtlantic and in 1987 received regulatory approval to hold a
controlling interest in BankAtlantic. At the time of the
formation of BankAtlantic Bancorp in 1994 as the holding company
for BankAtlantic, BFC Financial was BankAtlantic Bancorp's largest
and controlling shareholder. BankAtlantic Bancorp changed its name
to BBX Capital in 2012 following the sale of
BankAtlantic. Today, BFC Financial owns 52% of BBX Capital and
is deemed to be its parent company.
1984 - 2007
BankAtlantic
Prior to its sale, BankAtlantic operated as a wholly owned
subsidiary of BankAtlantic Bancorp. BankAtlantic was considered by
many as one of the best and largest banking franchises
headquartered in Florida. Among many strategies launched was
our "Florida's Most Convenient Bank" branding, redefining
"Bankers Hours" by bringing Seven-Day-Banking to Florida and
pioneering Totally Free Checking. As evidence of its
acceptance by its customers and the market, in August 2010
BankAtlantic was ranked highest in customer satisfaction in Florida
by J.D. Power and Associates. BankAtlantic, which was formed
as a savings and loan in 1952, grew from a small local Fort
Lauderdale institution into, at its peak, one of the largest
Florida based banks with more than $6.5 billion in assets, 100
branches, 2,800 employees and more than a half million
customers.
BankAtlantic Bancorp, in addition to its ownership of
BankAtlantic, also acquired ownership of Ryan Beck & Co., a
brokerage and investment banking firm with 1,000 investment
professionals, Levitt & Sons, previously known as the builder
of Levittown and America's oldest homebuilder, and Core
Communities, the developer of the planned communities of St. Lucie
West and Tradition, Florida consisting of more than10,000 plus
acre.
2007 - 2012 The Great
Recession
Like all financial institutions in the U.S., BankAtlantic was
adversely impacted by the recession and the banking and real estate
crisis. Throughout the economic collapse, our goal was to
remain focused on "credit, capital and our core operating income"
even while we were taking write downs and losses based on declining
values in our lending portfolios. By cutting expenses, raising
capital, improving core operating earnings and managing the size of
our balance sheet, BankAtlantic's capital at all times remained
above regulatory capital requirements. In the end, we believe it
was this sharply focused strategy that allowed us to not only
survive, but to provide significant value for our shareholders upon
the sale of BankAtlantic.
2012 Sale of
BankAtlantic to BB&T Corporation
In 2012, it became evident that the value of BankAtlantic's
written down and nonperforming assets were ultimately potentially
greater than the BankAtlantic franchise as a whole and that it was
becoming increasingly difficult to continue to hold these
assets. Regulators during this period were pressuring banks to
quickly liquidate nonperforming asset portfolios, even at
substantial losses. Further, while we recognized the
opportunities in the nonperforming asset portfolio, potential bank
acquirers viewed these assets as toxic assets attached to an
otherwise wonderful banking franchise. With this in mind, we
structured a unique and novel transaction by creating a "good bank"
(the traditional banking franchise of low cost deposits and
performing loans) and a "bad bank" (the nonperforming assets). We
determined that a bank acquirer would be interested in purchasing
one of the best banking franchises in the State of Florida if they
did not have to acquire nonperforming assets in the
transaction. We believed that this structure could maximize
the sale price of the bank and let us retain the nonperforming
assets, which we believed would have substantial upside value in a
recovering economic environment. In connection with our sale
of BankAtlantic to BB&T, BankAtlantic Bancorp received
one of the highest premiums that any bank had received during
the five-year recession by retaining the "bad bank" and BB&T
received a premier banking franchise by purchasing the "good
bank".
August 1, 2012 -
December 31, 2013 BBX Capital
The sale to BB&T closed on July 31, 2012, and BankAtlantic
Bancorp changed its name to BBX Capital. "BBX" had been
BankAtlantic Bancorp's New York Stock Exchange ticker
symbol. The day after the sale of BankAtlantic to BB&T,
BBX Capital, a decade's old company, was now in many ways a new
"start-up" company with approximately $600 million in assets
(including $327 million of nonperforming assets and $132 million of
cash), a net worth of approximately $255 million and $285 million
of seven year debt owed to BB&T. With the sale, we went
from approximately 1,000 employees to 33 employees.
The majority of the BankAtlantic legacy assets retained by BBX
Capital consisted of non-earning assets that do not generate income
on a regular or predictable basis. Given the nature of these
assets, revenues and earnings are largely only generated as the
assets are monetized through loan repayments or transactions
involving the sale, joint venture or development of real
estate. Such transactions could also result in losses from
time to time.
From the outset on August 1, 2012, BBX Capital's operating
objectives have been to:
- Generate a cash source to cover our ongoing overhead costs
- Manage, service and monetize the legacy loan and
foreclosed real estate portfolios
- Actively encourage our borrowers to continue to repay
their obligations
- Repay our debt obligation to BB&T
- Analyze the foreclosed real estate portfolio and
categorize these assets into one of three categories:
- Available for sale
- Hold for capital appreciation
- Hold for development and /or joint venture development
opportunities
- Seek out and identify investment opportunities in real
estate and in middle market operating companies
December 31, 2013 BBX
Capital Moving Forward
Since the sale of BankAtlantic in July 2012, we have been
repositioning our business and monetizing our legacy
portfolios. We have pursued our goal of transitioning our legacy
business into a growth business by repatriating funds and
investing in new business opportunities.
While we have been actively monetizing BBX Capital's assets, we
have simultaneously been actively exploring and identifying
investment opportunities in real estate as well as in middle market
operating companies that we believe can benefit from our expertise
and resources. In that regard, we have set up an operating
subsidiary for real estate related investments, "BBX Capital Real
Estate," and an operating subsidiary for investments in operating
companies, "BBX Capital Partners."
Ultimately, all of our real estate activities, including the
BankAtlantic legacy loan and foreclosed real estate portfolios,
will fall under the umbrella of BBX Capital Real Estate. As
previously indicated, we are liquidating some legacy real estate
while holding and managing others for capital appreciation and
development. We are also pursuing new real estate development
opportunities, unrelated to the legacy portfolios.
Our goal is to diversify our platform so that a meaningful
percentage of our assets and income will be derived from operating
businesses. It is our objective that the investments and
acquisitions by BBX Capital Partners will diversify our overall
company risk profile and contribute more consistent cash flows and
earnings over time.
Since the sale of BankAtlantic, we:
- Generated approximately $270 million in cash by the sale
of or loan repayments from the retained legacy
portfolio;
- Reduced the outstanding BB&T obligation from its
original $285 million to $68.5 million, more than five years
ahead of schedule;
- Purchased an indirect 46% interest in Bluegreen
Corporation, in connection with taking this previously NYSE
listed company private (BFC continues to retain a 54% indirect
interest in Bluegreen). Bluegreen's revenue during 2013
was approximately $519 million;
- Ended 2013 with $43 million in cash;
- Acquired three middle market operating companies;
- Worked on joint venture real estate developments in single
family housing, apartments, commercial retail and office;
and
- Filed applications to rezone and obtain entitlements on a
number of land parcels for future development or sale.
To date, our investments have been made with BBX Capital's
funds; however, in the future we may raise funds from third party
investors.
We are very pleased and excited about our progress to
date. While it will take some time for our investments to
mature and produce tangible results, we believe that the steps
we have taken and the investments we have made will produce the
long term values we are hoping to achieve. While earnings may
be sporadic with losses occurring from time to time, our goal is to
produce meaningful increases in our earnings and book value per
share over time.
Forward Looking
Statement
This document contains forward-looking statements based on
current expectations that involve a number of risks and
uncertainties. All opinions, forecasts, projections, future plans
or other statements, other than statements of historical fact, are
forward-looking statements and include (but are not limited to)
words or phrases such as "plans," "believes," "will," "expects,"
"anticipates," "intends," "estimates," "our view," "we see,"
"would" and words and phrases of similar import. The forward
looking statements in this document are also forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and involve substantial risks and uncertainties. We can give
no assurance that our expectations will prove to be correct or that
we will be successful in achieving long-term growth and
profitability. Future results could differ materially as a result
of a variety of risks and uncertainties, many of which are outside
of the control of management. These risks and uncertainties
include, but are not limited to the impact of economic, competitive
and other factors affecting the Company and its subsidiaries and
assets, including the impact of decreases in real estate values or
sustained high unemployment rates on our business generally, the
ability of our borrowers to service their obligations and the value
of collateral securing our loans; credit risks and loan losses, and
the related sufficiency of the allowance for loan losses, including
the impact of the economy and real estate market values on our
assets and the credit quality of our loans; the risk that loan
losses will continue and the risks of additional charge-offs,
impairments and required increases in our allowance for loan
losses; the impact of and expenses associated with litigation
including but not limited to litigation brought by the SEC; adverse
conditions in the stock market, the public debt market and other
financial and credit markets and the impact of such conditions on
our activities; risk that the legacy BankAtlantic assets retained
by the Company in connection with the sale of BankAtlantic may not
be monetized at the values currently ascribed to them and the risks
associated with the impact of periodic valuation of our assets for
impairment. Past performance and perceived trends may not be
indicative of future results and not all of our past activities
have been described, some of which were not successful and resulted
in losses. In addition, this document contains forward looking
statements relating to the Company's ability to successfully
implement its currently anticipated business plans, which may not
be realized as anticipated, if at all, and that the Company's
anticipated investments in real estate developments, real estate
joint ventures and operating businesses may not achieve the returns
anticipated or may not be profitable, including the Company's
investment in Woodbridge (through which the Company owns its
interest in Bluegreen) and its acquisition of the Hoffman's and
Williams & Bennett chocolate businesses and the acquisition of
Renin Corp. The Company's investments in real estate developments,
either directly or through joint ventures, will
increase exposure to downturns in the real estate and housing
markets and expose us to risks associated with real estate
development activities, including that we may not be successful in
expanding the entitlements associated with some of our properties,
and the risk that our joint venture partners may not fulfill their
obligations The Company's investment in Woodbridge, which owns
Bluegreen Corporation, exposes the Company to risks inherent in the
time-share industry, which risks are identified in BFC's Annual
Report on Form 10-K filed on March 17, 2014 with the SEC and
available on the SEC's website www.sec.gov. The Company's
acquisition of Hoffman's and Williams & Bennett and Renin Corp.
exposes us to the risks of these businesses, which in the case of
Renin includes foreign currency exchange risk of the U.S. dollar
compared to the Canadian dollar and Great Britain Pound, as well as
the risk that the integration of any or all of these operating
businesses may not be completed effectively or on a timely basis,
and that the Company may not realize any anticipated benefits or
profits from the transactions. In addition to the risks and factors
identified above, reference is also made to other risks and factors
detailed in this Annual Report on Form 10-K, including Item 1A.
Risk Factors. The Company cautions that the foregoing factors
are not exclusive. The information in this document is as of
December 31, 2013 and we undertake no responsibility to update this
information as of any later date.
This Exhibit provides financial and other information regarding
our assets, including our BankAtlantic legacy portfolio of loans
and foreclosed real estate, our investment in Bluegreen, and our
joint ventures and acquired operating businesses. Please see
our Annual Report on Form 10-K filed with the SEC on March 17, 2014
for more detailed information, financial information and risks
relating to BBX Capital and its activities.
I. Legacy Assets - Loans and Real Estate
Assets transferred to BBX Capital in connection with the
consummation of the sale of BankAtlantic to BB&T Corporation
(referred to as the "BB&T Transaction") were primarily loans
receivable, real estate held-for-sale and real estate
held-for-investment ("Legacy Assets"). These Legacy Assets are
held by BBX Capital in entities referred to as CAM (Capital Asset
Management), BBX Partners, and FAR (Florida Asset Resolution
Group).
FAR was formed in connection with the BB&T Transaction when
BankAtlantic contributed to FAR certain performing and
non-performing loans, tax certificates and foreclosed real estate.
BB&T Corporation will hold a 95% preferred interest in the net
cash flows of FAR until such time as it has recovered $285 million
in preference amount plus a priority return of LIBOR + 200 basis
points per annum on any unpaid preference amount. At that time,
BB&T Corporation's interest in FAR will terminate, and the
Company will thereafter be entitled to any and all residual
proceeds from FAR. At December 31, 2013, BB&T Corporation's
preference amount had been reduced to $68.5 million.
A. CAM and BBX Partners
Loans
The composition of CAM and BBX Partners legacy loans was (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
Loans held-for-investment: |
|
Number |
|
UnpaidPrincipalBalance |
|
CarryingAmount |
|
Number |
|
UnpaidPrincipalBalance |
|
CarryingAmount |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial non-real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
$ |
- |
|
$ |
- |
|
1 |
|
$ |
27 |
|
$ |
27 |
|
|
Non-accruing (1) |
|
3 |
|
|
5,107 |
|
|
3,331 |
|
3 |
|
|
3,922 |
|
|
3,362 |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
|
|
Non-accruing |
|
2 |
|
|
14,163 |
|
|
4,770 |
|
6 |
|
|
56,695 |
|
|
30,325 |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
1 |
|
|
2,152 |
|
|
2,152 |
|
1 |
|
|
2,193 |
|
|
2,191 |
|
|
Non-accruing |
|
2 |
|
|
12,914 |
|
|
6,756 |
|
5 |
|
|
23,475 |
|
|
15,459 |
Total loans held-for-investment |
|
8 |
|
$ |
34,336 |
|
$ |
17,009 |
|
16 |
|
$ |
86,312 |
|
$ |
51,364 |
Loans held-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
$ |
- |
|
$ |
- |
|
- |
|
$ |
- |
|
$ |
- |
|
|
Non-accruing |
|
- |
|
|
- |
|
|
- |
|
4 |
|
|
25,876 |
|
|
4,696 |
Total loans held-for-sale |
|
- |
|
$ |
- |
|
$ |
- |
|
4 |
|
$ |
25,876 |
|
$ |
4,696 |
|
(1) A loan was
modified during 2013 to include two previously charged-off loans to
the same borrower in the unpaid principal balance. |
|
|
B. CAM and BBX
Partners Real Estate
CAM and BBX Partners
obtained its real estate primarily through foreclosures,
settlements or deeds in lieu of foreclosure.
The composition of CAM and BBX Partners real estate was (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
|
|
|
|
Carrying |
|
|
|
Carrying |
|
|
Number |
|
Amount |
|
Number |
|
Amount |
Real
estate held-for-investment: |
|
|
|
|
|
|
|
|
|
|
Land |
|
13 |
|
$ |
74,759 |
|
9 |
|
$ |
36,141 |
Rental
properties |
|
2 |
|
|
15,705 |
|
- |
|
|
- |
Other |
|
1 |
|
|
789 |
|
1 |
|
|
845 |
Total
real estate held-for-investment |
|
16 |
|
$ |
91,253 |
|
10 |
|
$ |
36,986 |
|
|
|
|
|
|
|
|
|
|
|
Real
estate held-for-sale: |
|
|
|
|
|
|
|
|
|
|
Land |
|
10 |
|
$ |
10,307 |
|
11 |
|
$ |
16,268 |
Rental
properties |
|
- |
|
|
- |
|
3 |
|
|
6,298 |
Residential single-family |
|
- |
|
|
- |
|
1 |
|
|
252 |
Other |
|
- |
|
|
- |
|
2 |
|
|
1,249 |
Total
real estate held-for-sale |
|
10 |
|
$ |
10,307 |
|
17 |
|
$ |
24,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C. FAR LoansThe composition of FAR's legacy loans was (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
Loans held-for-investment: |
|
Number |
|
UnpaidPrincipalBalance |
|
CarryingAmount |
|
Number |
|
UnpaidPrincipalBalance |
|
CarryingAmount |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial non-real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
$ |
- |
|
$ |
- |
|
2 |
|
$ |
8,617 |
|
$ |
8,617 |
|
|
Non-accruing |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
1 |
|
|
997 |
|
|
997 |
|
2 |
|
|
1,587 |
|
|
1,587 |
|
|
Non-accruing |
|
2 |
|
|
6,365 |
|
|
6,365 |
|
10 |
|
|
62,644 |
|
|
30,612 |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
6 |
|
|
14,248 |
|
|
14,248 |
|
16 |
|
|
70,318 |
|
|
70,318 |
|
|
Non-accruing |
|
8 |
|
|
45,743 |
|
|
27,649 |
|
14 |
|
|
99,614 |
|
|
63,555 |
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
62 |
|
|
5,646 |
|
|
5,646 |
|
94 |
|
|
9,048 |
|
|
9,048 |
|
|
Non-accruing |
|
43 |
|
|
5,846 |
|
|
2,972 |
|
89 |
|
|
12,310 |
|
|
7,859 |
Residential: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
|
- |
|
|
- |
|
59 |
|
|
12,578 |
|
|
10,175 |
|
|
Non-accruing |
|
2 |
|
|
189 |
|
|
53 |
|
302 |
|
|
72,839 |
|
|
44,622 |
Total loans held-for-investment |
|
124 |
|
$ |
79,034 |
|
$ |
57,930 |
|
588 |
|
$ |
349,555 |
|
$ |
246,393 |
Loans held-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
- |
|
$ |
- |
|
$ |
- |
|
- |
|
$ |
- |
|
$ |
- |
|
|
Non-accruing |
|
- |
|
|
- |
|
|
- |
|
2 |
|
|
1,937 |
|
|
1,269 |
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
15 |
|
|
2,044 |
|
|
1,494 |
|
- |
|
|
- |
|
|
- |
|
|
Non-accruing |
|
31 |
|
|
4,135 |
|
|
2,682 |
|
- |
|
|
- |
|
|
- |
|
Residential |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
34 |
|
|
4,912 |
|
|
3,945 |
|
- |
|
|
- |
|
|
- |
|
|
Non-accruing |
|
255 |
|
|
58,603 |
|
|
34,278 |
|
- |
|
|
- |
|
|
- |
|
Small business |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruing |
|
52 |
|
|
10,320 |
|
|
8,170 |
|
79 |
|
|
16,512 |
|
|
15,370 |
|
|
Non-accruing |
|
17 |
|
|
4,204 |
|
|
3,277 |
|
18 |
|
|
4,389 |
|
|
3,413 |
Total loans held-for-sale |
|
404 |
|
$ |
84,218 |
|
$ |
53,846 |
|
99 |
|
$ |
22,838 |
|
$ |
20,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. FAR Real EstateThe composition of FAR's foreclosed real
estate was (in thousands):
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2013 |
|
As of December 31, 2012 |
|
|
|
|
Carrying |
|
|
|
Carrying |
|
|
Number |
|
Amount |
|
Number |
|
Amount |
Real
estate held-for-investment: |
|
|
|
|
|
|
|
|
|
|
Land |
|
3 |
|
$ |
4,323 |
|
1 |
|
$ |
427 |
Rental
properties |
|
1 |
|
|
11,186 |
|
- |
|
|
- |
Total
real estate held-for-investment |
|
4 |
|
$ |
15,509 |
|
1 |
|
$ |
427 |
|
|
|
|
|
|
|
|
|
|
|
Real
estate held-for-sale: |
|
|
|
|
|
|
|
|
|
|
Land |
|
8 |
|
$ |
7,961 |
|
3 |
|
$ |
1,593 |
Rental
properties |
|
3 |
|
|
6,168 |
|
7 |
|
|
12,778 |
Residential single-family |
|
50 |
|
|
6,828 |
|
89 |
|
|
7,199 |
Other |
|
2 |
|
|
2,707 |
|
- |
|
|
- |
Total
real estate held-for-sale |
|
63 |
|
$ |
23,664 |
|
99 |
|
$ |
21,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
II. BBX Capital Real Estate Activities
Ultimately, all of our real estate activities, including the
BankAtlantic legacy loan and foreclosed real estate portfolios,
will fall under the umbrella of BBX Capital Real Estate. As
previously indicated, we are liquidating some legacy real estate
while holding and managing others for capital appreciation and
development. We are also pursuing new real estate development
opportunities, unrelated to the legacy portfolios.
BBX Capital, through its wholly-owned subsidiary, BBX Capital
Real Estate, is actively engaged in real estate development
activities involving real estate obtained through foreclosure and
real estate purchased from third parties, including land
entitlement activities, property renovations, negotiating sales of
a portion of the real estate, and pursuing joint venture
opportunities involving the contribution of these properties to
joint ventures or potential cash investments in joint ventures.
The following joint venture project has commenced
development:
Kendall
Commons
In March 2013, BBX Capital sold land acquired through a deed in
lieu of foreclosure to Altman Development ("Altman"), a third party
real estate developer, for net proceeds of $8.0
million. Altman contributed the land to a joint venture to
develop the property as a multifamily rental development of
12 3-story apartment buildings, one mixed-use building and 1
clubhouse totaling 321 apartment units, and BBX Capital
then invested $1.3 million of cash in the joint venture project as
one of a number of investors. The development is currently under
construction and scheduled to begin leasing during the third
quarter of 2014. BBX Capital is entitled to receive 13% of the
joint venture distributions until a 15% internal rate of return has
been attained and then BBX Capital will be entitled to receive
9.75% of any joint venture distributions thereafter.
The following are development projects currently in the
planning stages for real estate held-for-investment included in the
CAM and BBX Partners Real Estate table in Section I.B of this
exhibit.
(1) Gardens at
Millenia
Gardens at Millenia consists of 37 acres of land located in the
commercial center of Orlando Florida with a carrying value of $11.2
million as of December 31, 2013. This site is currently in the
planning process and the final size and density of the project is
subject to governmental approvals and other conditions.
The proposed plans for 26 acres of this site include a 300,000
square foot retail shopping center with multiple big-box and
in-line tenants as well as 4 outparcel retail pads. BBX
Capital is currently in discussions with a potential joint venture
partner to develop a portion of the 26 acre parcel. Current
plans for the remaining 11 acres of this site include 9 buildings
of rental apartments totaling approximately 280 units, a clubhouse,
lakeside pavilion, lakeside running trail, and a dog park. BBX
Capital is in discussions with a potential joint venture partner to
develop the 11 acre parcel.
(2) Hialeah Communities
Hialeah Communities consists of 114 acres of land located in
Hialeah, Florida with a carrying value of $30.7 million as of
December 31, 2013. This site is currently in the final stages
of master planning to divide the property into three parcels and
remains subject to receipt of governmental approvals. The
anticipated plans for the three parcels include the following:
A 50 acre parcel is currently planned to include approximately
340 single-family homes, a clubhouse, park, and lake. We anticipate
partnering with a third party developer to develop this parcel.
We currently plan to seek entitlements on another 50 acre parcel
to include approximately 400 single-family homes. We currently
plan to sell this parcel to a third party developer.
Current plans for the remaining 14 acre parcel include 14
multifamily buildings totaling approximately 310 rental apartment
units, a clubhouse, pool, and park. We currently plan
to partner with a third party developer to develop this
parcel.
(3) North
Flagler
BBX Capital entered into a joint venture with JRG USA pursuant
to which JRG USA has assigned a contract to purchase for $10.8
million a 4.5 acre parcel overlooking the Intracoastal Waterway in
West Palm Beach Florida and BBX Capital invested $0.5 million of
cash. The joint venture is seeking to expand land entitlements
and is currently working to amend the current zoning designation
and increase the parcel's unit density and height restrictions with
a view to increasing the value of the parcel. BBX is
entitled to receive 80% of any joint venture distributions until it
recovers its capital investment and then will be entitled to
receive 70% of any joint venture distributions thereafter. The
entitlement process is estimated to be concluded in 2015.
BBX Capital also owns a 2.7 acre parcel located adjacent to the
4.5 acre parcel which is the subject of the contract held by the
JRG USA joint venture. The 2.7 acre parcel was acquired by BBX
Capital through foreclosure and had a carrying value of $3.6
million as of December 31, 2013. We believe that the value of
this parcel will increase if the land entitlement changes on the
4.5 acre parcel proposed by the joint venture are approved by the
municipality.
(4) PGA
PGA is a mixed use property located in the city of Palm Beach
Gardens, Florida consisting of rental properties and land with
carrying values of $15.7 million and $3.6 million, respectively, as
of December 31, 2013. We believe this property presents a
variety of development opportunities, including the following
development opportunities, some of which are currently in the
planning stages and subject to receipt of government approvals.
Retail/Office - A commercial property with three
existing buildings consisting of 145,000 square feet of mainly
furniture retail space which was purchased by BBX Capital in
December 2013 for $6.1 million. The property was substantially
vacant at the date of acquisition. Subsequent to the
acquisition of the property, BBX entered into a joint venture with
Stiles Development who acquired a 60% interest in the joint venture
for $2.9 million in cash. BBX Capital contributed the
property, excluding certain residential development entitlements
with an estimated value of $1.2 million, to the joint venture in
exchange for $2.9 million in cash and the remaining 40% interest in
the joint venture. BBX Capital transferred the retained
residential development entitlements to adjacent parcels owned by
it in this PGA mixed use property. The joint venture intends
to seek governmental approvals to change the use of a portion of
the property from retail to office and subsequently sell or lease
the property.
Office- This mixed use property includes a 33,000
square foot commercial leased office building that is currently 56%
occupied with an attached 428 space parking garage. BBX
Capital is currently seeking governmental approvals for a 140 room
limited-service suite hotel, 5,000 square foot freestanding
restaurant and a 50,000 square foot office building on a vacant
tract of land adjacent to this office building. We anticipate
partnering with a third party developer for all or a portion of
these components of the project.
Multi-family - Current plans for this 7-acre
multifamily parcel include approximately 300 apartment units, a
clubhouse and spa, and lakeside pavilion. We anticipate partnering
with a third party developer to develop this parcel.
(5) Village at Victoria
Park
Village at Victoria Park consists of 2 acres of vacant land
located near downtown Fort Lauderdale, Florida with a carrying
value of $0.9 million as of December 31, 2013. BBX Capital has
entered into a joint venture agreement with New Urban Communities
to develop the project as 30 single-family homes. The project
is a 50% joint venture, with New Urban Communities serving as the
developer and manager. New Urban Communities and BBX Capital
intend to each contribute $750,000 to the joint venture as an
initial capital contribution. The joint venture is currently
in negotiations with financial institutions to obtain financing to
purchase the 2 acres of land from BBX Capital for $3.6
million. The sales proceeds to be received by BBX Capital from
the joint venture are anticipated to consist of $2.0 million in
cash and a $1.6 million promissory note secured by a junior lien on
the parcel. The project is currently scheduled to commence
construction and sales in the 2nd quarter of 2014. Closings
are projected to begin by the third quarter of 2015.
III. BBX Capital Partners - Investment and Acquisitions
Our goal is to diversify our platform so that a meaningful
percentage of our assets and income will be derived from operating
businesses. It is our objective that the investments and
acquisitions by BBX Capital Partners will diversify our overall
company risk profile and contribute more consistent cash flows and
earnings over time.
Investment in
Bluegreen
On April 2, 2013, BBX Capital acquired a 46% interest in
Woodbridge Holdings, LLC ("Woodbridge"). BFC Financial
Corporation owns the remaining 54% of Woodbridge. Woodbridge's
principal asset is its 100% ownership of Bluegreen Corporation
("Bluegreen"). Bluegreen is a sales, marketing and management
company focused on the vacation ownership industry. Bluegreen
markets, sells and manages vacation ownership interests ("VOIs") in
resorts, which are generally located in popular, high-volume,
"drive-to" vacation destinations, and were either developed or
acquired by Bluegreen or developed and owned by others, in which
case Bluegreen earns fees for providing these services.
Bluegreen operates today with more than 60 owned or managed
resorts, 225,000 owners of VOIs and 4,700 employees. In 2013,
Bluegreen paid cash dividends of $47.0 million to Woodbridge and
Woodbridge in turn, after expenses, paid $44.3 million of cash
dividends in 2013 to BBX Capital (46%) and BFC Financial (54%).
The condensed Statement of Financial Condition of Woodbridge,
including Bluegreen, as of December 31, 2013 is as follows (in
thousands):
|
|
|
|
|
|
|
|
December 31, |
|
|
2013 |
Assets |
|
|
Cash and restricted cash |
|
$ |
224,104 |
Notes receivable, net |
|
|
467,319 |
Inventory of real estate |
|
|
204,256 |
Intangible assets |
|
|
64,142 |
Other assets |
|
|
126,494 |
|
Total assets |
|
$ |
1,086,315 |
Liabilities and Equity |
|
|
|
Accounts payable, accrued liabilities and other |
|
$ |
193,682 |
Notes payable |
|
|
537,500 |
Junior subordinated debentures |
|
|
147,431 |
|
Total liabilities |
|
|
878,613 |
|
Total Woodbridge members' equity |
|
|
169,981 |
Noncontrolling interest |
|
|
37,721 |
|
Total equity |
|
|
207,702 |
|
Total liabilities and equity |
|
$ |
1,086,315 |
|
|
|
|
|
|
|
|
|
|
The condensed Statement of operations of Woodbridge, including
Bluegreen, from the date of BBX Capital's investment (April 2,
2013) through December 31, 2013 is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
From |
|
|
|
Inception (April 2, 2013) through |
|
|
|
December 31, 2013 |
|
Total
revenues |
|
$ |
399,708 |
|
Total
costs and expenses |
|
|
341,938 |
|
Other
income |
|
|
209 |
|
Income
from continuing operations before taxes |
|
|
57,979 |
|
Provision for income taxes |
|
|
(18,409 |
) |
Income
from continuing operations |
|
|
39,570 |
|
Discontinued operations: |
|
|
|
|
(Loss)
income from discontinued operations, net of tax |
|
|
(332 |
) |
Net
income |
|
|
39,238 |
|
Net
income attributable to noncontrolling interest |
|
|
(9,974 |
) |
Net
income attributable to Woodbridge |
|
$ |
29,264 |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions of
operating businesses
Renin Corp.
Acquisition
In October 2013, Renin Holdings, LLC ("Renin"), a newly formed
joint venture entity owned 81% by BBX Capital and 19% be BFC
Financial Corporation, acquired substantially all of the assets and
certain liabilities of Renin Corp. Renin is a manufacturer of
interior and closet doors, wall décor, associated systems and
hardware and fabricated glass products through a portfolio of brand
name and private label offerings including Erias, DSH, Acme,
KingStar, TRUporte, Ramtrack and JJ Home Products. With facilities
in Canada, the U.S. and the U.K., Renin services its broad
distribution channels including big box building and home
improvement supply retailers, home centers, distributors, other
building supply manufacturers, volume builders and specialty
retailers throughout North America and other markets, including the
U.K. Renin Corp. invented the mirror closet door 50 years ago and
has been supplying innovative and quality products around the world
ever since. Renin's business had revenues of approximately
$65.6 million during the year ended December 31, 2013.
Chocolate and
Confections Business Acquisitions
In December 2013, BBX Sweet Holdings, a wholly-owned subsidiary
of BBX Capital, acquired the Hoffman's Chocolates business and in
January 2014 it acquired Williams & Bennett. A description
of these businesses follows:
A. Hoffman's Chocolates
Headquartered in Lake Worth, Florida, Hoffman's Chocolates is a
manufacturer of gourmet chocolates, with several retail locations
throughout South Florida. Each of Hoffman's confections is hand
made. Its product line includes over 70 varieties of confections,
which are available via its retail and online distribution
channels, direct shipping throughout the U.S., and at retail
locations nationwide. In addition to Kosher O-U chocolates, Boca
Bons and Good Fortune cookies, notable Hoffman's confections
include the "Snoodle," Pecan Carmel "Jitterbugs," the Hoffman's
Holiday Wonderland, and products such as gift baskets and chocolate
covered pretzels. Established in 1975, Hoffman's had revenues
of approximately $4.3 million for the year ended December 31,
2013.
B. Williams & Bennett
Headquartered in Boynton Beach, Florida, Williams & Bennett
sells chocolate products and confections through distribution
channels serving boutique retailers, big box chains, department
stores, national resort properties, corporate customers, and
private label brands. Since 1992, Williams & Bennett has
developed a reputation of branded chocolate drenched products
including Belgian chocolate drenched Oreo Cookies, Bavarian
pretzels, Nutter Butter Cookies, Marshmallows, Graham Crackers and
other confectionary products. Williams & Bennett offers these
chocolate creations in distinctive collectable packaging for all
occasions. Williams & Bennett had revenues of
approximately $4.8 million for the year ended December 31,
2013.
About BFC Financial
Corporation : BFC (OTCQB:
BFCF) is a holding company whose principal holdings include
controlling interests in BBX Capital Corporation (NYSE: BBX) and Bluegreen Corporation. As of
December 31, 2013, BFC had total consolidated assets of
approximately $1.4 billion, shareholders' equity attributable to
BFC of approximately $239.4 million, and total consolidated equity
of approximately $422.4 million. For more information, visit
www.BFCFinancial.com.
About BBX Capital
Corporation: BBX Capital, a New York Stock Exchange
listed company (NYSE: BBX), is
involved in the acquisition, ownership and management of, and joint
ventures and investments in real estate and real estate development
projects as well as investments and management of middle market
operating businesses. In addition, BBX Capital and its holding
company, BFC Financial Corporation, have a 46% and 54% respective
interest in Bluegreen Corporation; a vacation ownership company
with more than 60 owned or managed resorts, 225,000 owners and
5,000 employees. As of December 31, 2013, BBX Capital had
consolidated total assets of $431.1 million, shareholders' equity
of $302.4 million, and its book value per share was
$19.00. For more information, visit www.BBXCapital.com
For further information,
please visit our family of companies: BFC Financial:
www.BFCFinancial.com Bluegreen Corp.: www.BluegreenVacations.com
BBX Capital: www.BBXCapital.com Renin Corp.: www.ReninCorp.com
Hoffman's Chocolates: www.Hoffmans.com, www.BocaBons.com, and
www.GoodFortunes.com Williams & Bennett:
www.WilliamsandBennett.comBFC Contact Info: Investor
Relations: Leo HinkleyManaging Director, Investor Relations
Officer954- 940-4994 Email: InvestorRelations@BFCFinancial.com
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