-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, li2WR6WxNtMKmk5vONlHVxNJ2sAViic/x7SiFtQ21sBCUw+XAKQqKJWuq94/h50K 8YeEGze1xIhN+F9BqWb7XQ== 0000950146-94-000097.txt : 19940418 0000950146-94-000097.hdr.sgml : 19940418 ACCESSION NUMBER: 0000950146-94-000097 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931121 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19940415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MGI PROPERTIES CENTRAL INDEX KEY: 0000068330 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 046268740 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06833 FILM NUMBER: 94522985 BUSINESS ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173305335 MAIL ADDRESS: STREET 1: 30 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: MORTGAGE GROWTH INVESTORS DATE OF NAME CHANGE: 19880225 FORMER COMPANY: FORMER CONFORMED NAME: EASTERN SHOPPING CENTERS INC DATE OF NAME CHANGE: 19711121 8-K/A 1 MGI PROPERTIES FORM 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report: November 21, 1993 (Date of earliest event reported) MGI PROPERTIES (Exact name of Registrant as specified in its charter) Massachusetts 1-6833 04-6268740 (State or other jurisdiction (Commission (I.R.S. Employer Identification No.) of incorporation) File Number) 30 Rowes Wharf, Boston, Massachusetts 02110 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (617) 330-5335 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits MGI Properties acquired office and industrial properties during 1993. 1. Pro forma consolidated statement of earnings (unaudited) of the Registrant for the year ended November 30, 1993. 2. Historical summaries of gross income and direct operating expenses (audited) of five properties acquired for the year ended December 31, 1993. MGI Properties Pro Forma Consolidated Statement of Earnings Year Ended November 30, 1993 (Unaudited)
Acquired Properties Pro Forma As Reported Historical Adjustments Pro Forma Income Rental and other income $36,094,000 $9,002,000 ($3,638,000) 1 $41,458,000 Interest 713,000 (684,000) 2 $29,000 Other 91,000 16,000 $107,000 Total Income 36,898,000 9,018,000 (4,322,000) 41,594,000 Expenses Property operating expenses 10,457,000 $2,617,000 ($813,000) $12,261,000 Real estate taxes 4,247,000 $1,452,000 ($543,000) $5,156,000 Depreciation and amortization 6,987,000 $929,000 ($349,000) 3 $7,567,000 Interest 5,059,000 638,000 4 $5,697,000 General and administrative 2,191,000 $2,191,000 Total expenses 28,941,000 4,998,000 (1,067,000) 32,872,000 Net income $7,957,000 $4,020,000 ($3,255,000) $8,722,000 Per Share Data Net Income $.75 $.82 Weighted average shares outstanding 10,574,104 10,574,104 The accompanying pro forma consolidated statement of earnings for the year ended November 30, 1993 assumes the acquisition of the properties as if they had occurred on December 1, 1992. This pro forma information is based upon the historical statements of the Trust after giving effect to the acquisition of these properties. Rental income and operating expenses for the peroid of the Trust's ownership are deducted as pro forma adjustments. The pro forma statement has been prepared by MGI Properties management. The pro forma consolidated statement of earnings may not be indicative of the results that would have actually occurred if the acquisitions had been in effect on the dates indicated. Also, they may not be indicative of results that may be achieved in the future. The pro forma consolidated statement of earnings should be read in conjunction with MGI Properties audited financial statements as of November 30, 1993. 1. Rental and other income includes income of 1.0 million received in connection with non-recurring amendment and lease assignment. Rents and levels of occupancy in place for the twelve month period are not indicative of the experience of the Trust for its period of ownership during 1993. 2. The reduction in interest income is due to the anticipated use of cash which would have been required to purchase the properties if they had been acquired on December 1, 1992. 3. The adjustment for depreciation was based upon an allocation of the purchase price to land and building with depreciation being taken over a forty year life using the straight line method. 4. The increase in interest expense is due to the assumption of debt used to acquire the properties which would have been outstanding for the period from December 1, 1992 to May 6, 1993, the date which the Trust received the proceeds from its common stock offering. The acquisition of the properties on December 1, assumes the Trust borrowed $24,732,000 at a floating rate of 6%.
326 BALLARDVALE STREET Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (With Independent Auditors' Report Thereon) Independent Auditors' Report The Board of Trustees MGI Properties We have audited the accompanying historical summary of gross income and direct operating expenses of 326 Ballardvale Street (Historical Summary) for the year ended December 31, 1993. This Historical Summary is the responsibility of management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2, and is not intended to be a complete presentation of 326 Ballardvale Street's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses (prepared on the basis described in note 2) for the year ended December 31, 1993, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK March 18, 1994 326 BALLARDVALE STREET Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income: Base rental income $864,555 Recovery income 253,328 Total income 1,117,883 Direct operating expenses: Real estate taxes 184,934 Repairs and maintenance 45,857 Utilities 88,741 General and administrative 10,729 Insurance expense 11,873 Total expenses 342,134 Excess of gross income over direct operating expenses $775,749
See accompanying notes to historical summary. 326 BALLARDVALE STREET Notes to Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (1) Business 326 Ballardvale Street (the property) is located in Wilmington, Massachusetts and is owned by MGI Properties. (2) Basis of Presentation The Historical Summary has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not a complete presentation of the property's revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting. Gross Income The property leases space under various operating lease agreements with its tenants. These leases include provisions under which the property is reimbursed for certain common area, real estate tax and insurance costs. Certain leases contain renewal options for various periods at various rental rates. Base rentals are reported as income over the lease term as they become receivable under the provisions of the leases. However, when rentals vary from a straight-line basis due to short-term rent abatements or escalating rents during the lease term, the income is recognized based on effective rental rates. Minimum rents to be received from tenants under executed operating leases in effect at December 31, 1993 are as follows:
Year ending December 31: 1994 $1,000,707 1995 1,015,101 1996 1,078,642 1997 965,899 1998 896,607 Thereafter $2,365,781 $7,322,737
Only income from the operating leases (lease rents and expense reimbursements) are included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the property. Direct Operating Expenses Direct operating expenses include only those costs comparable to the proposed future operation of the property. Costs such as mortgage interest, depreciation, amortization, management fees and leasing commissions are excluded from the Historical Summary. ONE WINTHROP SQUARE Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (With Independent Auditors' Report Thereon) Independent Auditors' Report The Board of Trustees MGI Properties We have audited the accompanying historical summary of gross income and direct operating expenses of One Winthrop Square (Historical Summary) for the year ended December 31, 1993. This Historical Summary is the responsibility of management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2, and is not intended to be a complete presentation of One Winthrop Square's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses (prepared on the basis described in note 2) for the year ended December 31, 1993, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK March 18, 1994 ONE WINTHROP SQUARE Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income: Rental income $1,871,599 Total income 1,871,599 Direct operating expenses: Real estate taxes 352,464 Repairs and maintenance 445,534 Utilities 281,947 General and administrative 137,719 Insurance expense 18,125 Miscellaneous expenses 7,751 Total expenses 1,243,540 Excess of gross income over direct operating expenses $628,059
See accompanying notes to historical summary. ONE WINTHROP SQUARE Notes to Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (1) Business One Winthrop Square (the property) is located in Boston, Massachusetts and is owned by MGI Properties. (2) Basis of Presentation The Historical Summary has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not a complete presentation of the property's revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting. Gross Income The property leases space under various operating lease agreements with its tenants. Certain leases contain renewal options for various periods at various rental rates. Base rentals are reported as income over the lease term as they become receivable under the provisions of the leases. However, when rentals vary from a straight-line basis due to short-term rent abatements or escalating rents during the lease term, the income is recognized based on effective rental rates. Minimum rents to be received from tenants under executed operating leases in effect at December 31, 1993 are as follows:
Year ending December 31: 1994 $2,032,887 1995 1,969,888 1996 2,011,472 1997 1,851,354 1998 1,762,077 Thereafter 2,758,122 $12,385,800
Only income from the operating leases is included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the property. Direct Operating Expenses Direct operating expenses include only those costs comparable to the proposed future operation of the property. Costs such as mortgage interest, depreciation, amortization, management fees and leasing commissions are excluded from the Historical Summary. TWO ANDOVER TECH CENTER Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (With Independent Auditors' Report Thereon) Independent Auditors' Report The Board of Trustees MGI Properties: We have audited the accompanying historical summary of gross income and direct operating expenses of Two Andover Tech Center (Historical Summary) for the year ended December 31, 1993. This Historical Summary is the responsibility of management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2, and is not intended to be a complete presentation of Two Andover Tech Center's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses (prepared on the basis described in note 2) for the year ended December 31, 1993, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK April 8, 1994 TWO ANDOVER TECH CENTER Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income: Base rental income $1,118,478 Common area maintenance reimbursements 230,826 Real estate tax reimbursements 121,922 Total income 1,471,226 Direct operating expenses: Real estate taxes 121,922 General and administrative 43,173 Repairs and maintenance 162,731 Utilities 2,826 Insurance expense 6,054 Total expenses 336,706 Excess of gross income over direct operating expenses $1,134,520
See accompanying notes to historical summary. TWO ANDOVER TECH CENTER Notes to Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (1) Business Two Andover Tech Center (the "Center") is an industrial building located in Andover, Massachusetts and is owned by MGI Properties. (2) Basis of Presentation The Historical Summary has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not a complete presentation of the Center's revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting. Gross Income The Center leases space under various operating lease agreements with its tenants. These leases include provisions under which the Center is reimbursed for certain common area, real estate tax and insurance costs. Certain leases contain renewal options for various periods at various rental rates. Base rentals are reported as income over the lease term as they become receivable under the provisions of the leases. However, when rentals vary from a straight-line basis due to short-term rent abatements or escalating rents during the lease term, the income is recognized based on effective rental rates. Minimum rents to be received from tenants under executed operating leases in effect at December 31, 1993 are as follows:
Year ending December 31: 1994 $1,176,202 1995 1,224,229 1996 1,224,229 1997 1,224,229 1998 1,224,229 Thereafter 401,089 $6,474,207
Only income from the operating leases (lease rents and expense reimbursements) is included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the property. Direct Operating Expenses Direct operating expenses include only those costs comparable to the proposed future operation of the Center. Costs such as mortgage interest, depreciation, amortization, management fees and leasing commissions are excluded from the Historical Summary. 400 RESEARCH DRIVE Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (With Independent Auditors' Report Thereon) Independent Auditors' Report The Board of Trustees MGI Properties: We have audited the accompanying historical summary of gross income and direct operating expenses of 400 Research Drive (Historical Summary) for the year ended December 31, 1993. This Historical Summary is the responsibility of management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2, and is not intended to be a complete presentation of 400 Research Drive's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses (prepared on the basis described in note 2) for the year ended December 31, 1993, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK March 18, 1994 400 RESEARCH DRIVE Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income: Base rental income $639,940 Common area maintenance reimbursements 90,873 Real estate tax reimbursements 147,405 Total income 878,218 Direct operating expenses: Real estate taxes 147,405 Repairs and maintenance 69,596 Utilities 30,143 General and administrative 3,694 Insurance expense 8,140 Miscellaneous expenses 1,842 Total expenses 260,820 Excess of gross income over direct operating expenses $617,398
See accompanying notes to historical summary. 400 RESEARCH DRIVE Notes to Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (1) Business 400 Research Drive (the property) is located in Wilmington, Massachusetts and is owned by MGI Properties. (2) Basis of Presentation The Historical Summary has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not a complete presentation of the Mall's revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting. Gross Income The property leases space under various operating lease agreements with its tenants. These leases include provisions under which the property is reimbursed for certain common area, real estate tax and insurance costs. Certain leases contain renewal options for various periods at various rental rates. Base rentals are reported as income over the lease term as they become receivable under the provisions of the leases. However, when rentals vary from a straight-line basis due to short-term rent abatements or escalating rents during the lease term, the income is recognized based on effective rental rates. Minimum rents to be received from tenants under executed operating leases in effect at December 31, 1993 are as follows:
Year ending December 31: 1994 $628,271 1995 500,371 1996 410,124 1997 427,528 Thereafter 1,141,721 $3,108,015
Only income from the operating leases (lease rents and expense reimbursements) is included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the property. Direct Operating Expenses Direct operating expenses include only those costs comparable to the proposed future operation of the property. Costs such as mortgage interest, depreciation, amortization, leasing commissions and management fees are excluded from the Historical Summary. WESTPORT PARK Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (With Independent Auditors' Report Thereon) Independent Auditors' Report The Board of Trustees MGI Properties: We have audited the accompanying historical summary of gross income and direct operating expenses of Westport Park (Historical Summary) for the year ended December 31, 1993. This Historical Summary is the responsibility of management. Our responsibility is to express an opinion on the Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2, and is not intended to be a complete presentation of Westport Park's revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses (prepared on the basis described in note 2) for the year ended December 31, 1993, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK March 18, 1994 WESTPORT PARK Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 Gross income: Base rental income $887,183 Common area maintenance reimbursements 37,006 Real estate tax reimbursements 49,303 Total income 973,492 Direct operating expenses: Real estate taxes 145,850 Repairs and maintenance 56,985 General and administrative 2,737 Utilities 338 Insurance 6,184 Total expenses 212,094 Excess of gross income over direct operating expenses $761,398
See accompanying notes to historical summary. WESTPORT PARK Notes to Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1993 (1) Business Westport Park (the property) is located in St. Louis, Missouri and is owned by MGI Properties. (2) Basis of Presentation The Historical Summary has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and is not a complete presentation of the property's revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting. Gross Income The property leases space under various operating lease agreements with its tenants. These leases include provisions under which the property is reimbursed for certain common area, real estate tax and insurance costs. Certain leases contain renewal options for various periods at various rental rates. Base rentals are reported as income over the lease term as they become receivable under the provisions of the leases. However, when rentals vary from a straight-line basis due to short-term rent abatements or escalating rents during the lease term, the income is recognized based on effective rental rates. Minimum rents to be received from tenants under executed operating leases in effect at December 31, 1993 are as follows:
Year ending December 31: 1994 $785,527 1995 449,528 1996 272,912 1997 251,818 1998 18,297 Thereafter - $1,778,082
Only income from the operating leases (lease rents and expense reimbursements) is included in gross income. All other forms of revenue are excluded from this Historical Summary, as they are not comparable to the proposed future operations of the property. Direct Operating Expenses Direct operating expenses include only those costs comparable to the proposed future operation of the property. Costs such as mortgage interest, depreciation, amortization, management fees and leasing commissions are excluded from the Historical Summary. MGI PROPERTIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized. MGI PROPERTIES (Registrant) Date: April 15, 1994 Phillip C. Vitali Executive Vice President and Treasurer (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----