-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DMZSq56Dce7Gi81UVOhCbPmdKdJqvBSB2UZQGRDyeVy3IALGsLGzgabO1Qmur4o7 xUaquJ1e6mKN74uy+UqoGA== 0000790817-97-000005.txt : 19970627 0000790817-97-000005.hdr.sgml : 19970627 ACCESSION NUMBER: 0000790817-97-000005 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 19970626 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANYAN STRATEGIC REALTY TRUST CENTRAL INDEX KEY: 0000790817 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363375345 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15465 FILM NUMBER: 97630147 BUSINESS ADDRESS: STREET 1: 150 S WACKER DR STE 2900 STREET 2: SUITE 2900 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3125539800 FORMER COMPANY: FORMER CONFORMED NAME: BANYAN STRATEGIC LAND TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VMS STRATEGIC LAND TRUST DATE OF NAME CHANGE: 19910325 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A-NUMBER 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 30, 1997 BANYAN STRATEGIC REALTY TRUST (Exact name of Registrant as specified in its charter) Massachusetts 0-15465 36-3375345 (State of or other (Commission File (I.R.S. Employer jurisdiction of Number) Identification incorporation) Number) 150 South Wacker Drive, Suite 2900, Chicago, IL 60606 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (312) 553-9800 This document consists of 16 pages. Exhibit index is located on page 2. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS Financial Statements and Pro Forma Financial Information: (i) Butterfield Office Plaza (See attached). (ii) Phoenix Business Park (See attached). SIGNATURES 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: June 26, 1997 BANYAN STRATEGIC REALTY TRUST (Registrant) By: /s/ Joel L. Teglia Vice President, Chief Financial and Accounting Officer EX-99 2 RREEF MA-I BUTTERFIELD OFFICE PLAZA, INC. STATEMENT OF REVENUES AND CERTAIN EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1996 AND INDEPENDENT AUDITORS' REPORT INDEPENDENT AUDITORS' REPORT To the Stockholders of RREEF MA-I Butterfield Office Plaza, Inc.: We have audited the statement of revenues and certain expenses of RREEF MA-I Butterfield Office Plaza, Inc. for the year ended December 31, 1996. This financial statement is the responsibility of RREEF MA-I Butterfield Office Plaza, Inc.'s management. Our responsibility is to express an opinion on the financial statement 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 financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of Form 8-K of Banyan Strategic Realty Trust as a result of the acquisition of this property). Material amounts, described in Note 1 to the statement of revenues and certain expenses, that would not be comparable to those resulting from future operations of the acquired property are excluded and the statement is not intended to be a complete presentation of the acquired property's revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of RREEF MA-1 Butterfield Office Plaza, Inc. for the year ended December 31, 1996 in conformity with generally accepted accounting principles. Deloitte & Touche LLP June 11, 1997 RREEF MA-I BUTTERFIELD OFFICE PLAZA, INC. STATEMENT OF REVENUES AND CERTAIN EXPENSES YEAR ENDED DECEMBER 31, 1996
REVENUES: Rental income $2,642,400 Recoverable expenses 173,458 Other income 33,864 ---------- Total revenues 2,849,722 CERTAIN EXPENSES: Property operating 1,057,172 Real estate taxes 260,174 Management fees 152,064 ---------- Total certain expenses 1,469,410 ---------- REVENUES IN EXCESS OF CERTAIN EXPENSES $1,380,312 ==========
[FN] See notes to statement of revenues and certain expenses. RREEF MA-I BUTTERFIELD OFFICE PLAZA, INC. NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES YEAR ENDED DECEMBER 31, 1996 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Butterfield Office Plaza, a suburban office building located in Oak Brook, Illinois ("Butterfield") was acquired by BSRT Butterfield Office Plaza, Corp., a subsidiary of Banyan Strategic Realty Trust, effective April 30, 1997. The statement of revenues and certain expenses includes information related to the operations of Butterfield for the period from January 1, 1996 through December 31, 1996 as recorded by the office building's previous owner, RREEF MA-I Butterfield Office Plaza, Inc. The accompanying historical financial statement information is presented in conformity with Rule 3-14 of the Securities and Exchange Commission. Accordingly, the financial statement is not representative of the actual operations for the year ended December 31, 1996 as certain expenses, which may not be comparable to the expenses expected to be incurred in the future operations of the acquired property, have been excluded. Expenses excluded consist of interest, income taxes, depreciation and amortization, and other costs not directly related to the future operations of the acquired property. Management's Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Rental Income - Rental income is recognized on a straight-line basis over the terms of the related leases. Property Operating Expenses - Property expenses consist primarily of utilities, insurance, repairs and maintenance, security and safety, cleaning, and other administrative expenses. Management Fees - The property was managed by RREEF Management Company for a property management fee paid monthly based on an annual rate of 5% of cash receipts less tenant services income. 2. OPERATING LEASES Operating revenue is principally obtained from tenant rentals under noncancelable operating leases. Future minimum rentals under noncancelable operating leases as of December 31, 1996 are approximately as follows: 1997 $2,525,430 1998 2,081,050 1999 1,467,263 2000 759,754 2001 438,274 Thereafter 1,173,152 ---------- Total $8,444,923 ==========
BUTTERFIELD OFFICE PLAZA ESTIMATED PRO FORMA STATEMENT OF NET OPERATING INCOME YEAR ENDED DECEMBER 31, 1996 (UNAUDITED) The estimated Pro Forma Statement of Net Operating Income represents the amount of estimated income which would be realized by the Registrant during twelve months of ownership of the Property, based upon the assumptions set forth in the accompanying notes (See Note 1). REVENUES: Rental income $2,642,400 Recoverable expenses 173,458 Other income 33,864 ---------- Total revenues 2,849,722 CERTAIN EXPENSES: Property operating 1,052,372 Depreciation (See Note 2) 256,100 Real estate taxes 260,174 Management fees 142,486 ---------- Total certain expenses 1,711,132 ---------- Pro Forma revenues in excess of certain expenses $1,138,590 ========== Pro Forma funds from operations (see Note 4) $1,394,690 ==========
[FN] The accompanying notes are an integral part of the estimated pro forma statement. BUTTERFIELD OFFICE PLAZA NOTES TO ESTIMATED PRO FORMA STATEMENT 1. This statement does not propose to forecast actual operating results for any period in the future and thus, the following assumptions may not be valid for future years and actual results may differ. These statements should be read in conjunction with the Statement of Revenue and Certain Expenses for the year ended December 31, 1996 which were modified by Management for known changes in the revenues and expenses associated with the Registrant's ownership of the Property in order to estimate the pro forma statement. 2. Depreciation expense which represents a non-cash expenditure has been included for informational purposes only. Depreciation is calculated on a depreciable basis of approximately $10,244,000 using the straight-line method based on a useful life of 40 years. 3. The Property will be managed by an unaffiliated third party for an initial management fee of 5.0% of gross revenues. 4. Funds From Operations (or ""FFO") has been provided in the Pro Forma Statement as supplemental information to the property's projected operating results. FFO is used by the real estate investment trust industry as a measure of a property's performance and is defined as net operating income from a property's operations, plus certain non-cash items including depreciation and amortization and excluding any extraordinary capital items. STATEMENT OF REVENUE AND CERTAIN EXPENSES PHOENIX BUSINESS PARK DECEMBER 31, 1996 WITH REPORT OF INDEPENDENT AUDITORS REPORT OF INDEPENDENT AUDITORS Chief Financial Officer Banyan Strategic Realty Trust We have audited the Statement of Revenue and Certain Expenses of Phoenix Business Park (the Property) for the year ended December 31, 1996. The Statement of Revenue and Certain Expenses is the responsibility of the Property's management. Our responsibility is to express an opinion on the Statement of Revenue and Certain Expenses 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 Statement of Revenue and Certain Expenses is free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Statement of Revenue and Certain Expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statement of Revenue and Certain Expenses. We believe that our audit provides a reasonable basis for our opinion. The accompanying Statement of Revenue and Certain Expenses 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 the Property's revenue and expenses. In our opinion, the Statement of Revenue and Certain Expenses referred to above presents fairly, in all material respects, the revenue and certain expenses described in Note 2, for the year ended December 31, 1996, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP May 30, 1997 Chicago, Illinois PHOENIX BUSINESS PARK STATEMENT OF REVENUE AND CERTAIN EXPENSES
Year Ended December 31, 1996 Revenue Base rents $ 995,585 Tenant reimbursements 21,277 ---------- Total revenue 1,016,862 ---------- Expenses Real estate taxes 66,230 General operating 34,842 Utilities 19,003 Contract services 69,092 Repairs and maintenance 39,179 Management fee 49,388 Insurance 15,294 ---------- Total expenses 293,028 ---------- Revenue in excess of certain expenses $ 723,834 ==========
[FN] See accompanying notes. PHOENIX BUSINESS PARK NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES Note 1. Business The accompanying Statement of Revenue and Certain Expenses relates to the operations of Phoenix Business Park (the Property). The Property was acquired on January 15, 1997, by Banyan Strategic Realty Trust (Banyan). The Property was previously owned by Insignia Financial Corporation. As of December 31, 1996, the Property was 100% leased with thirteen tenants. Three tenants (Channel 69/Viacom, Bethco, Inc., and the General Services Administration department of the U.S. Government) account for approximately 70% of base rents. Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Statement of Revenue and Certain Expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. The statement is not representative of the actual operations of the Property for the period presented nor indicative of future operations as certain expenses, primarily depreciation, amortization, and net interest expense, which may not be comparable to the expenses expected to be incurred by Banyan in future operations of the Property, have been excluded. Revenue and Expenses Recognition Revenue is recognized in the period earned. Expenses are recognized in the period incurred. Use of Estimates The preparation of the Statement of Revenue and Certain Expenses in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Note 3 Rentals The Property has entered into tenant leases that provide for tenants to share in the operating expenses and real estate taxes in relation to their pro rata share as defined. Note 4 Management During the year ended December 31, 1996, the Property was managed by a third- party management company. The management agreement provided for a fee of 5% of gross property revenues. PHOENIX BUSINESS PARK ESTIMATED PRO FORMA STATEMENT OF NET OPERATING INCOME YEAR ENDED DECEMBER 31, 1996 (UNAUDITED) The estimated Pro Forma Statement of Net Operating Income represents the amount of estimated income which would be realized by the Registrant during twelve months of ownership of the Property, based upon the assumptions set forth in the accompanying notes (See Note 1). Year Ended December 31, 1996 REVENUE: Base rents $ 995,585 Tenant reimbursements 21,277 ---------- Total revenue 1,016,862 ---------- EXPENSES: Real estate taxes 66,230 General operating 34,842 Utilities 19,003 Contract services 69,092 Repairs and maintenance 39,179 Management fee 40,674 Depreciation (see Note 2) 94,100 Insurance 8,698 ---------- Total expenses 371,818 ---------- Pro Forma revenue in excess of total expenses $ 645,044 ========== Pro Forma funds from operations (See Note 4) $ 739,144 ==========
[FN] The accompanying notes are an integral part of the estimated pro forma statement. PHOENIX BUSINESS PARK NOTES TO ESTIMATED PRO FORMA STATEMENT 1. This statement does not propose to forecast actual operating results for any period in the future and thus, the following assumptions may not be valid for future years and actual results may differ. These statements should be read in conjunction with the Statement of Revenue and Certain Expenses for the year ended December 31, 1996 which were modified by Management for known changes in the revenues and expenses associated with the Registrant's ownership of the Property in order to estimate the pro forma statement. 2. Depreciation expense which represents a non-cash expenditure has been included for informational purposes only. Depreciation is calculated on a depreciable basis of approximately $3,764,000 using the straight-line method based on a useful life of 40 years. 3. The Property will be managed by an unaffiliated third party for an initial management fee of 4.0% of gross revenues. 4. Funds From Operations (or ""FFO") has been provided in the Pro Forma Statement as supplemental information to the property's projected operating results. FFO is used by the real estate investment trust industry as a measure of a property's performance and is defined as net operating income from a property's operations, plus certain non-cash items including depreciation and amortization and excluding any extraordinary capital items. -----END PRIVACY-ENHANCED MESSAGE-----