UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________
FORM 8-K
_____________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): May 21, 2004
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SECURED DIVERSIFIED INVESTMENT, LTD.
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(Exact name of registrant as specified in its charter)
Nevada
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(State or other jurisdiction of incorporation or organization)
0-30653 80-0068489
(Commission File Number) (IRS Employer
Identification No.)
5030 Campus Drive
Newport Beach, California 92660
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 851-1069
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Item 2. Acquisition or Disposition of Assets.
On May 14, 2004, the Company and Denver Fund I, Ltd. entered into a
Lease Agreement (the "Lease Agreement")with Iomega Investments, Ltd. to
lease The Cannery retail shopping center located on Flamingo Road in Las
Vegas, Nevada. The Cannery is located on approximately 3.4 acres and has
approximately 37,000 square feet of rentable space. Construction was
completed between 1988 and 1992. The Cannery is currently 62% occupied
and the average annual rent per square foot of existing tenants is $17.40.
The property was appraised for $7,150,000 in December 2001 by Morgan, Beebe
& Harper, Las Vegas, Nevada.
Pursuant to the Lease Agreement, the Company and Denver Fund I are
entitled to receive all lease payments due from tenants and will pay Iomega
Investments a monthly lease payment of $36,066, which amount equals the
monthly payment due on the first mortgage. The Company and Denver Fund I
will also pay all taxes, insurance premiums and other expenses related to
the property, including management fees and costs of maintenance. The
Company has retained ARS Management (dba Shaw Associates Realty Services)
as the property manager.
The Lease Agreement also provides that the Company and Denver Fund
I will acquire the property for $5,950,000, including assumption of the
first mortgage in the principal amount of $4,100,000. The remainder of the
purchase price will be paid partially by the Company and partially by
Denver Fund I. The Company will deliver 250,000 shares of the Company's
Series C Preferred Stock (valued between the parties at $3.00 per share)
and a two-year promissory note in the principal amount of approximately
$155,000 bearing interest at an annual rate of 7%. The principal amount of
the note is payable $50,000 at the six month anniversary, $50,000 at the 12
month anniversary and the remainder at maturity. Denver Fund I paid
$675,000 in cash from a 1031 exchange and assigned a note receivable in the
principal amount of $225,000 secured by real property in Reno, Nevada.
The Company then entered into a Tenants in Common Agreement with
Denver Fund I pursuant to which the Company will have a 51% interest in the
property and Denver Fund I will have a 49% interest. Denver Fund I will be
entitled to a preferred return of 8% on its total investment of $900,000,
of which the Company has agreed to guarantee 6%. Thus, in the event that
cash flow from the property is less than $54,000 per year, the Company will
pay Denver Fund I the difference. The parties also agreed to grant mutual
rights of first refusal. If either party desires to sell its interest in
the property, then it must first offer the interest to the other party.
Item 7. Financial Statements and Exhibits.
2.1 Lease Agreement between Secured Diversified Investment, Denver Fund
I and Iomega Investments, LLC dated April 28, 2004.
2.2 Option Agreement between Secured Diversified Investment, Denver
Fund I and Iomega Investments, LLC dated April 28, 2004.
2.3 Escrow Instructions
2.4 Tenants in Common Agreement between Secured Diversified Investments
and Denver Fund I dated May 5, 2004.
99.1 Press Release
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 24, 2004
SECURED DIVERSIFIED INVESTMENT, LTD.
By: /s/CLIFFORD L. STRAND
___________________________________________
Clifford L. Strand, Chief Executive Officer
EXHIBIT INDEX
Exhibit Number Description
2.1 Lease Agreement between Secured Diversified Investment, Denver Fund I
and Iomega Investments, LLC dated April 28, 2004.
2.2 Option Agreement between Secured Diversified Investment,
Denver Fund I and Iomega Investments, LLC dated April 28, 2004.
2.3 Escrow Instructions
2.4 Tenants in Common Agreement between Secured Diversified Investments
and Denver Fund I dated May 5, 2004.
99.1 Press Release