ELME released an update on liquidation activities on Friday after the market close.

This one came with better news, the most important of which is that they have Riverside Apartments back under contract - this time to FPA Multifamily, LLC for $250m.

FPA is an institutional value-add multifamily manager (their latest fund, 9th in their flagship US multifamily series, raised >$1.7bn in equity) and a much more credible buyer than Beitel Group. Furthermore they were an underbidder on the property and have separately acquired 4 other properties sold by ELME as part of their liquidation.

The earnest money deposit is $4m, $2m refundable now and $2m following the expiration of the inspection period (August 20th) at which point it goes hard. The contract includes a closing date of September 14th, 2026.

The Riverside contract price allowed ELME to provide an updated estimate of liquidation distributions of $1.74 - $1.94 per share, $1.84 per share at the midpoint.

Based on the $250m contract price for Riverside, price for other assets under contract and balance sheet items at Q1 2026, this implies net liquidation costs of $39m - $57m ($48m at the midpoint) versus the $37.7m estimate as of Q1 2026.

Contributing to the increase in liquidation costs is delays in closing the three other properties that are under contract. The closing date for ELME Bethesda has been delayed about a month to August 11th but they’ve now received the certificate of compliance with Montgomery County’s ROFR requirements.

3801 Connecticut and The Kenmore remain subject to the DC TOPA process.ELME currently anticipate this process will be completed by the end of 2026 compared to their initial estimate of “late second quarter and early third quarter of 2026”. They highlight that the buyer of each DC property has commenced discussions with the property’s tenant association, and this timeline assumes no purchase rights are exercised or assigned to a party other than the contract buyer. This is now probably the biggest risk to the liquidation as TOPA can be a prolonged, expensive process.

ELME traded up after hours from ~$1.50 to ~$1.65 per share. Assuming it opens here on Monday, that represents a 5% - 15% discount to the liquidation distributions range, 10% at the midpoint. I don’t think the spread should close immediately as some risk remains while Riverside is in its inspection period and until the TOPA process is resolved.