-----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, MXB0qyWmUc7wsFeHTPVjwXp6hVd+uOgGsSj0pnc5dKlXo1Hy3J6OmuGdfgGGkxqq Wb7bItaqKW/uDZRSjs9Jug== /in/edgar/work/20000814/0000892626-00-000310/0000892626-00-000310.txt : 20000921 0000892626-00-000310.hdr.sgml : 20000921 ACCESSION NUMBER: 0000892626-00-000310 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANYAN STRATEGIC REALTY TRUST CENTRAL INDEX KEY: 0000790817 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 363375345 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15465 FILM NUMBER: 699114 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 10-Q 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-15465 BANYAN STRATEGIC REALTY TRUST ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Massachusetts 36-3375345 - ----------------------------- ------------------- (State or other jurisdiction (I.R.S. Employer incorporation or organization) Identification No.) 150 South Wacker Drive, Chicago, IL 60606 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (312) 553-9800 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ X ]. NO [ ]. Shares of beneficial interest outstanding as of August 11, 2000: 14,202,414 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BANYAN STRATEGIC REALTY TRUST Consolidated Balance Sheets (Unaudited) (Dollars in thousands) JUNE 30, DECEMBER 31, 2000 1999 ---------- ----------- ASSETS - ------ Investment in Real Estate, at cost: Land . . . . . . . . . . . . . . . $ 36,445 $ 36,445 Building . . . . . . . . . . . . . 148,608 148,608 Building Improvements. . . . . . . 16,764 14,211 ---------- ---------- 201,817 199,264 Less: Accumulated Depreciation . . (18,352) (15,420) ---------- ---------- 183,465 183,844 ---------- ---------- Cash and Cash Equivalents. . . . . . 4,534 13,097 Restricted Cash - Capital Improvements . . . . . . . 945 1,497 Restricted Cash - Other. . . . . . . 1,727 1,171 Interest and Accounts Receivable . . 1,362 1,186 Deferred Financing Costs (Net of Accumulated Amortization of $1,487 and $1,512, respectively). . . . . . . . . . . 1,352 1,568 Other Assets . . . . . . . . . . . . 4,624 4,284 ---------- ---------- Total Assets . . . . . . . . . . . . $ 198,009 $ 206,647 ========== ========== BANYAN STRATEGIC REALTY TRUST Consolidated Balance Sheets - CONTINUED JUNE 30, DECEMBER 31, 2000 1999 ---------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Liabilities Mortgage Loans Payable . . . . . . . $ 114,214 $ 120,781 Bonds Payable. . . . . . . . . . . . 4,500 4,500 Unsecured Loan Payable . . . . . . . -- 7,400 Accounts Payable and Accrued Expenses . . . . . . . . . 1,983 2,767 Accrued Real Estate Taxes Payable. . 1,821 908 Accrued Interest Payable . . . . . . 657 615 Unearned Revenue . . . . . . . . . . 749 922 Security Deposits. . . . . . . . . . 1,342 1,203 ---------- ---------- Total Liabilities. . . . . . . . . . 125,266 139,096 ---------- ---------- Minority Interest in Consolidated Partnerships. . . . . 2,375 2,256 Shareholders' Equity Series A Convertible Preferred Shares, No Par Value, 200,000 Shares Authorized, 61,572 Shares Issued and Outstanding. . . . . . . . . . . . 6,157 -- Shares of Beneficial Interest, No Par Value, Unlimited Authorization; 15,724,338 and 15,073,917 Shares Issued, respectively . . . . . . . . . . . 124,132 120,707 Accumulated Deficit. . . . . . . . . (49,379) (48,046) Employees' Notes . . . . . . . . . . (3,176) -- Treasury Shares at Cost, 1,522,649 Shares . . . . . . . . . (7,366) (7,366) ---------- ---------- Total Shareholders' Equity . . . . . 70,368 65,295 ---------- ---------- Total Liabilities and Shareholders' Equity . . . . . . . $ 198,009 $ 206,647 ========== ========== The accompanying notes are an integral part of the consolidated financial statements. BANYAN STRATEGIC REALTY TRUST Consolidated Statements of Operations For the Six Months Ended June 30, 2000 and 1999 (Unaudited) (Dollars in thousands, except per share data) 2000 1999 -------- -------- REVENUE Rental Income. . . . . . . . . . . . . . . . . . $ 16,279 $ 18,334 Operating Cost Reimbursement . . . . . . . . . . 1,949 1,921 Miscellaneous Tenant Income. . . . . . . . . . . 164 570 Income on Investments and Other Income . . . . . 418 86 -------- -------- Total Revenue. . . . . . . . . . . . . . . . . . . 18,810 20,911 -------- -------- EXPENSES Property Operating . . . . . . . . . . . . . . . 2,189 2,643 Repairs and Maintenance. . . . . . . . . . . . . 1,834 2,272 Real Estate Taxes. . . . . . . . . . . . . . . . 1,423 1,473 Interest . . . . . . . . . . . . . . . . . . . . 4,615 5,779 Ground Lease . . . . . . . . . . . . . . . . . . 462 465 Depreciation and Amortization. . . . . . . . . . 3,332 3,234 General and Administrative . . . . . . . . . . . 2,144 2,194 Amortization of Deferred Financing Costs . . . . 159 131 -------- -------- Total Expenses . . . . . . . . . . . . . . . . . . 16,158 18,191 Income Before Minority Interest and Extraordinary Item . . . . . . . . . . . . . . . 2,652 2,720 Minority Interest in Consolidated Partnerships . . . . . . . . . . . . . . . . . . (273) (255) -------- -------- Income Before Extraordinary Item . . . . . . . . . 2,379 2,465 Extraordinary Item . . . . . . . . . . . . . . . . (42) -- -------- ------- Net Income . . . . . . . . . . . . . . . . . . . . 2,337 2,465 Less Income Attributable to Preferred Shares . . . (276) -- -------- -------- Net Income Available to Common Shares. . . . . . . $ 2,061 $ 2,465 ======== ======== Basic and Diluted Earnings Available to Common Shares per weighted-average Common Share: Income Before Extraordinary Item . . . . . . . . $ 0.14 $ 0.18 ======== ======== Net Income . . . . . . . . . . . . . . . . . . . $ 0.14 $ 0.18 ======== ======== The accompanying notes are an integral part of the consolidated financial statements. BANYAN STRATEGIC REALTY TRUST Consolidated Statements of Operations For the Three Months Ended June 30, 2000 and 1999 (Unaudited) (Dollars in thousands, except per share data) 2000 1999 -------- -------- REVENUE Rental Income. . . . . . . . . . . . . . . . . . $ 8,144 $ 9,138 Operating Cost Reimbursement . . . . . . . . . . 1,080 923 Miscellaneous Tenant Income. . . . . . . . . . . 93 382 Income on Investments and Other Income . . . . . 143 40 -------- -------- Total Revenue. . . . . . . . . . . . . . . . . . . 9,460 10,483 -------- -------- EXPENSES Property Operating . . . . . . . . . . . . . . . 1,079 1,317 Repairs and Maintenance. . . . . . . . . . . . . 940 1,126 Real Estate Taxes. . . . . . . . . . . . . . . . 689 698 Interest . . . . . . . . . . . . . . . . . . . . 2,248 2,889 Ground Lease . . . . . . . . . . . . . . . . . . 233 230 Depreciation and Amortization. . . . . . . . . . 1,702 1,650 General and Administrative . . . . . . . . . . . 1,132 1,139 Amortization of Deferred Financing Costs . . . . 95 66 -------- -------- Total Expenses . . . . . . . . . . . . . . . . . . 8,118 9,115 Income Before Minority Interest. . . . . . . . . . 1,342 1,368 Minority Interest in Consolidated Partnerships . . . . . . . . . . . . . . . . . . (147) (141) -------- -------- Net Income . . . . . . . . . . . . . . . . . . . . 1,195 1,227 Less Income Attributable to Preferred Shares . . . (153) -- -------- -------- Net Income Available to Common Shares. . . . . . . $ 1,042 $ 1,227 ======== ======== Basic and Diluted Earnings Available to Common Shares per weighted-average Common Share: Net Income . . . . . . . . . . . . . . . . . . . $ 0.07 $ 0.09 ======== ======== The accompanying notes are an integral part of the consolidated financial statements. BANYAN STRATEGIC REALTY TRUST Consolidated Statement of Shareholders' Equity For the Six Months Ended June 30, 2000 (Unaudited) (Dollars in thousands)
Series A Convertible Shares of Preferred Shares Beneficial Interest Accumu- --------------------- --------------------- lated Employees' Treasury Shares Amount Shares Amount Deficit Notes Shares Total ---------- -------- ---------- --------- --------- ---------- -------- -------- Shareholders' Equity, January 1, 2000. . . . . . . . -- $ -- 15,073,917 $120,707 $(48,046) $ -- $ (7,366) $ 65,295 Issuance of Shares, net of issuance costs . . . . . . . 61,572 6,157 650,421 3,425 -- -- -- 9,582 Employees' Notes, net of repay- ments . . . . . . . -- -- -- -- -- (3,176) -- (3,176) Net Income . . . . . -- -- -- -- 2,337 -- -- 2,337 Common Distri- butions Paid. . . . -- -- -- -- (3,394) -- -- (3,394) Preferred Distri- bution Paid . . . . -- -- -- -- (276) -- -- (276) ------ -------- ---------- -------- -------- -------- -------- -------- Shareholders' Equity, June 30, 2000 . . . 61,572 $ 6,157 15,724,338 $124,132 $(49,379) $ (3,176) $ (7,366) $ 70,368 ====== ======== ========== ======== ======== ======== ======== ======== The accompanying notes are an integral part of the consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2000 and 1999 (Unaudited) (Dollars in thousands) 2000 1999 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income . . . . . . . . . . . . . . . . . . . . $ 2,337 $ 2,465 Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities: Extraordinary Item . . . . . . . . . . . . . . . 42 -- Depreciation and Amortization. . . . . . . . . . 3,491 3,365 Minority Interest in Consolidated Partnerships. . . . . . . . . . . . . . . . . . 273 255 Net Change In: Restricted Cash - Other. . . . . . . . . . . . (556) (726) Interest and Accounts Receivable . . . . . . . (176) 264 Other Assets . . . . . . . . . . . . . . . . . (740) (786) Accounts Payable and Accrued Expenses. . . . . (784) (409) Accrued Interest Payable . . . . . . . . . . . 42 61 Accrued Real Estate Taxes Payable. . . . . . . 913 963 Unearned Revenue . . . . . . . . . . . . . . . (173) 207 Security Deposits. . . . . . . . . . . . . . . 139 3 -------- -------- Net Cash Provided By Operating Activities. . . . . 4,808 5,662 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Investment in Real Estate . . . . (2,553) (2,592) Restricted Cash - Capital Improvements . . . . 552 (325) -------- -------- Net Cash Used In Investing Activities . . . . . . (2,001) (2,917) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Loans Payable. . . . . . . . . . . 8,500 -- Distributions to Minority Partners . . . . . . . (154) (188) Deferred Financing Costs . . . . . . . . . . . . (159) (5) Payment of Preferred Shares Issuance Costs . . . (30) -- Repayment of Employees' Notes. . . . . . . . . . 62 -- Principal Payments on Mortgage Loans, Bonds Payable and Unsecured Loan Payable . . . (16,310) (826) Distributions Paid to Shareholders . . . . . . . (3,394) (3,221) Payment of Preferred Distributions . . . . . . . (276) -- Prepayment Penalties on Early Extinguishment of Debt. . . . . . . . . . . . . . . . . . . . (6) -- Shares Issued, Net of Issuance Costs . . . . . . 397 418 -------- -------- Net Cash Used In Financing Activities. . . . . . . (11,370) (3,822) -------- -------- Net Decrease In Cash and Cash Equivalents. . . . . (8,563) (1,077) Cash and Cash Equivalents at Beginning of Period. . . . . . . . . . . . . . . 13,097 3,731 -------- -------- Cash and Cash Equivalents at End of Period . . . . $ 4,534 $ 2,654 ======== ======== Supplemental Information: Interest Paid During the Period. . . . . . . . . $ 4,573 $ 5,718 ======== ======== Non-Cash Financing Activities: Preferred Share Debt Conversion. . . . . . . . . $ 6,157 $ -- ======== ======== Employees' Notes . . . . . . . . . . . . . . . . $ 3,238 $ -- ======== ======== The accompanying notes are an integral part of the consolidated financial statements. BANYAN STRATEGIC REALTY TRUST Notes to Consolidated Financial Statements June 30, 2000 (Unaudited) (Dollars in thousands, except per share data) 1. FINANCIAL STATEMENT PRESENTATION Readers of this quarterly report should refer to Banyan Strategic Realty Trust's (the "Trust") audited consolidated financial statements for the year ended December 31, 1999 which are included in the Trust's 1999 Form 10-K, as certain footnote disclosures which would substantially duplicate those contained in such audited statements have been omitted from this report. In the opinion of management, all adjustments necessary for a fair presentation have been made to the accompanying consolidated financial statements as of June 30, 2000. All adjustments made to the financial statements, as presented, are of a normal recurring nature to the Trust. RECLASSIFICATIONS Certain reclassifications have been made to the previously reported 1999 consolidated financial statements in order to provide comparability with the 2000 consolidated financial statements. These reclassifications have not changed the 1999 results. 2. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the six months ended June 30, 2000 and 1999: Six Months Ended ------------------------ 6/30/00 6/30/99 ---------- ---------- Numerator: Income Available to Common Shares Before Extraordinary Item . . . . . . . . . . . . . . . . . . $ 2,103 $ 2,465 Extraordinary Item . . . . . . . . . . . . (42) -- ---------- ---------- Net Income Available to Common Shares . . . . . . . . . . . $ 2,061 $ 2,465 ========== ========== Denominator: Denominator for basic earnings per weighted-average shares. . . . . . . . . 14,127,443 13,428,444 Effect of dilutive securities - Employee stock options . . . . . . . . . 8,042 5,968 ---------- ---------- Dilutive potential common shares . . . . . 8,042 5,968 Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions . . . . 14,135,485 13,434,412 ========== ========== Basic and Diluted Earnings Available to Common Shares Per weighted- average Common Share: Income Before Extraordinary Item . . . . . $ 0.14 $ 0.18 Extraordinary Item . . . . . . . . . . . . -- -- ---------- ---------- Net Income . . . . . . . . . . . . . . $ 0.14 $ 0.18 ========== ========== The following table sets forth the computation of basic and diluted earnings per share for the three months ended June 30, 2000 and 1999: Three Months Ended ------------------------ 6/30/00 6/30/99 ---------- ---------- Numerator: Net Income Available to Common Shares . . . . . . . . . . . $ 1,042 $ 1,227 ========== ========== Denominator: Denominator for basic earnings per weighted-average shares. . . . . . . . . 14,181,101 13,449,337 Effect of dilutive securities - Employee stock options . . . . . . . . . 10,636 6,380 ---------- ---------- Dilutive potential common shares . . . . . 10,636 6,380 Denominator for diluted earnings per share-adjusted weighted-average shares and assumed conversions . . . . 14,191,737 13,455,717 ========== ========== Basic and Diluted Earnings Available to Common Shares Per weighted- average Common Share: Net Income . . . . . . . . . . . . . . $ 0.07 $ 0.09 ========== ========== 3. LONG-TERM DEBT FINANCING On May 1, 2000, the Trust entered into a loan agreement with LaSalle Bank National Association which provided for a loan in the amount of $12,100, which can be drawn in four installments. The amount of $8,500 was drawn on May 1, 2000. The loan, which is collateralized by the Trust's Johns Creek Office and Industrial Park and Technology Park properties, bears interest at a variable rate equal to LIBOR plus 2.2% and is payable monthly. The loan principal is pre-payable without penalty and matures in one year. The proceeds from the first draw were utilized primarily to repay the amounts outstanding on a line of credit which came due on May 1, 2000 and which was previously collateralized by Johns Creek Office and Industrial Park and Technology Park, and secondarily for transaction costs. On October 8, 1999, the Trust entered into a loan agreement in the amount of $7,800. The loan, which is collateralized by the Trust's Lexington Business Center property, bears interest at a variable rate equal to LIBOR plus 2% and is payable monthly. The loan principal is pre-payable without penalty and had an initial maturity date of May 31, 2000. The Trust had two options to extend the term of the loan for one year each at the same interest rate by paying a fee of $19.5 for each extension. The Trust exercised its first option to extend the term of the loan until May 31, 2001. CONVERSION OF UNSECURED LOAN During 1998, the Trust borrowed $7.4 million pursuant to its $20 million 1997 Convertible Term Loan Agreement for an unsecured convertible term loan (the "Unsecured Loan"). The amounts outstanding on the Unsecured Loan were convertible into Series A convertible preferred shares at a conversion price of $100 per share or into common shares at a conversion price of $5.15 per share. On January 20, 2000, the Trust repaid $1,243 of the Unsecured Loan and the remaining balance of $6,157 was converted into 61,572 Series A convertible preferred shares. 4. BUSINESS SEGMENTS The Trust owns and operates real estate properties located principally in the Midwest and Southeast United States. The Trust has three operating segments corresponding to the three property types comprising its real estate assets: flex/industrial, office and retail. As of June 30, 2000, the flex/industrial segment was comprised of twelve complexes with long- term leases to approximately 170 tenants; the office segment was comprised of fourteen office sites with long-term leases to approximately 270 tenants; and the retail segment was comprised of one retail center with long-term leases to approximately 50 tenants. As of June 30, 1999, the flex/industrial segment was comprised of thirteen complexes, the office segment was comprised of fourteen office sites and the retail segment was comprised of one retail center. Prior to the sale of the Oklahoma Apartment Portfolio in December 1999, a fourth segment - the residential segment - was comprised of four apartment complexes with 864 units. The Trust's long-term tenants are in a variety of businesses and no individual tenant is significant to the Trust's business when considered as a whole. Information by business segments is set forth below: Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Revenue Flex/Industrial. . . . . . $ 2,887 $ 2,852 $ 5,692 $ 5,588 Office . . . . . . . . . . 5,310 5,352 10,459 10,696 Residential. . . . . . . . -- 1,103 -- 2,158 Retail . . . . . . . . . . 1,147 1,152 2,271 2,423 Corporate/Other. . . . . . 116 24 388 46 -------- -------- -------- -------- $ 9,460 $ 10,483 $ 18,810 $ 20,911 ======== ======== ======== ======== Income (Loss) Before Extraordinary Item Flex/Industrial. . . . . . $ 863 $ 640 $ 1,559 $ 1,168 Office . . . . . . . . . . 1,242 1,375 2,344 2,696 Residential. . . . . . . . -- 219 -- 421 Retail . . . . . . . . . . 140 137 270 387 Corporate/Other. . . . . . (1,050) (1,144) (1,794) (2,207) -------- -------- -------- -------- $ 1,195 $ 1,227 $ 2,379 $ 2,465 ======== ======== ======== ======== As of As of Decem- June 30, ber 31, 2000 1999 -------- -------- Total Assets Flex/Industrial. . . . . . $ 68,640 $ 69,279 Office . . . . . . . . . . 107,790 105,756 Retail . . . . . . . . . . 17,900 18,125 Corporate/Other. . . . . . 3,679 13,487 -------- -------- $198,009 $206,647 ======== ======== Three Months Ended Six Months Ended June 30, June 30, -------------------- ------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Depreciation and Amortization Flex/Industrial. . . . . . $ 596 $ 549 $ 1,168 $ 1,093 Office . . . . . . . . . . 965 823 1,879 1,589 Residential. . . . . . . . -- 143 -- 284 Retail . . . . . . . . . . 141 135 285 268 -------- -------- -------- -------- $ 1,702 $ 1,650 $ 3,332 $ 3,234 ======== ======== ======== ======== Interest Expense Flex/Industrial. . . . . . $ 720 $ 889 $ 1,474 $ 1,774 Office . . . . . . . . . . 1,199 1,372 2,483 2,746 Residential. . . . . . . . -- 296 -- 594 Retail . . . . . . . . . . 329 332 658 665 -------- -------- -------- -------- $ 2,248 $ 2,889 $ 4,615 $ 5,779 ======== ======== ======== ======== Additions to Investment in Real Estate Flex/Industrial. . . . . . $ 346 $ 520 $ 654 $ 926 Office . . . . . . . . . . 1,076 402 1,868 1,460 Residential. . . . . . . . -- 89 -- 167 Retail . . . . . . . . . . 30 34 31 39 -------- -------- -------- -------- $ 1,452 $ 1,045 $ 2,553 $ 2,592 ======== ======== ======== ======== 5. EMPLOYEE NOTES On May 14, 1997, the Board of Trustees adopted and on July 8, 1997, the shareholders of the Trust approved, the 1997 Omnibus Stock and Incentive Plan (the "Plan") which allows the Trust to make stock-based awards as part of its employee and trustee compensation program. Under the Plan, the Trust is authorized to issue options to purchase up to one million shares of beneficial interest in the form of incentive stock options, non-statutory stock options, stock appreciation rights, performance shares and units. On December 31, 1999, the outstanding options issued under the Plan totaled 463,676. Due to the election of three new trustees, on December 13, 1999, the members of the board as of October 1, 1997 no longer constituted a majority of the members of the board. By definition, this reconstitution of the board was a "Change of Control" within the meaning of the Employee Stock Option Agreements. As a result, all outstanding employee options became immediately exercisable in accordance with the terms of the option agreements. In addition, the Board of Trustees offered all of the Trust's current employees and advisors who held options, the opportunity to exercise all the vested but unexercised options with the proceeds of a loan from the Trust. Each loan is non- recourse and bears interest at an annual rate of 6.5%. Each person was required to pledge all shares purchased with the proceeds of the loan to secure the payment of principal and interest on the loan. The loan program was available until January 12, 2000. On that date, employees borrowed approximately $3.2 million to purchase 575,337 shares. All loans will mature on the earlier of January 11, 2005 or one month after the date that an individual's employment is terminated. At that time, the employee will be required to repay the loan and all accrued interest, or forfeit the shares held as security for the loan. 6. SUBSEQUENT EVENTS DISTRIBUTIONS On July 14, 2000, the Trust declared a cash distribution for the quarter ended June 30, 2000 of $0.12 per share payable August 21, 2000 to shareholders of record on July 21, 2000. OTHER During the first quarter of 2000, the Trust's Board of Trustees formed a Financial Advisory Committee, comprised entirely of its independent trustees, to evaluate strategic alternatives. On July 28, 2000, the Financial Advisory Committee announced that as part of its review of the strategic alternatives, it has initiated a marketing effort designed to solicit bids for the Trust's properties in whole, bulk sales or individually. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Certain statements in this quarterly report that are not historical in fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations, estimates and projections. These statements are not a guaranty of future performance. Without limiting the foregoing, words such as "believes," "intends," "anticipates," "expects," and similar expressions are intended to identify forward-looking statements which are subject to a number of risks and uncertainties, including, among other things: . general real estate investment risks; . potential inability to raise capital by either equity or debt; . potential inability to repay or refinance indebtedness at maturity; . increases in interest rates; . adverse consequences of failure to qualify as a REIT; and . possible environmental liabilities. Actual results could differ materially from those projected in these forward-looking statements. See "Managements's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" in the annual report on Form 10-K for the year ended December 31, 1999 for a more complete discussion. We are a self-administered infinite life real estate investment trust ("REIT"), organized as a Massachusetts business trust, which owns and operates primarily office and flex/industrial properties. We operate principally through BSRT UPREIT Limited Partnership, referred to as the Operating Partnership, and its subsidiaries. BSRT UPREIT Corp., a wholly- owned subsidiary, is the General Partner of the Operating Partnership. As of June 30, 2000, we were the sole limited partner of BSRT UPREIT Limited Partnership. RESULTS OF OPERATIONS As of June 30, 2000, we owned individually, or, in some cases through joint ventures, twenty-seven properties consisting of: . fourteen office properties totaling 1.5 million rentable square feet; . twelve flex/industrial properties totaling 1.7 million rentable square feet; . one retail property which contains 321,600 rentable square feet. COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 TO SIX MONTHS ENDED JUNE 30, 1999 During the six months ended June 30, 2000 and 1999 our income before minority interest and extraordinary item remained the same at approximately $2.7 million. Our total revenue decreased by approximately $2.1 million or 10.0 % to approximately $18.8 million from approximately $20.9 million, due to a decrease in the number of properties that we own. This decrease in total revenues was offset by a decrease in total expenses. On a "same- store" basis (comparing the results of operations of the properties owned during the entire six months ended June 30, 2000 with the results of the same properties owned during the entire six months ended June 30, 1999), total revenue increased by approximately $0.1 million due to an increase in rental rates. During the final six months of 2000, leases for approximately ten percent (10%) of our leasable square footage will expire. Although vacancy may increase temporarily, at most of our properties this lease "roll-over" is routine and the underlying space will be released at market rental rates to either the existing or a new tenant. Our most significant lease expiration will occur at 6901 Riverport Drive where a tenant occupying approximately 145,000 square feet will vacate. We are in the process of marketing this space but have not located a new tenant. Our total revenues may be adversely affected if the space remains vacant for an extended period of time. Our total operating expenses, which include property operating, repairs and maintenance, real estate taxes, and ground lease decreased by approximately $1.0 million to approximately $5.9 million from approximately $6.9 million in 1999. The "same-store" properties accounted for approximately $0.1 million or 10% of this decrease. Interest expense decreased by approximately $1.2 million to approximately $4.6 million from approximately $5.8 million primarily due to a reduction in the amounts borrowed as a result of the 1999 property dispositions and the conversion of our unsecured loan to Series A convertible preferred shares in January 2000. COMPARISON OF THREE MONTHS ENDED JUNE 30, 2000 TO THREE MONTHS ENDED JUNE 30, 1999 During the three months ended June 30, 2000 and 1999 our income before minority interest and extraordinary item totaled approximately $1.3 million and approximately $1.4 million, respectively. The approximate $0.1 million decrease resulted from a reduction in total revenue of approximately $1.1 million offset by a decrease in total expenses of approximately $1.0 million. In particular, our total revenue decreased by approximately $1.1 million or 10.5% to approximately $9.4 million from approximately $10.5 million, due to a decrease in the number of properties that we own. On a "same-store" basis (comparing the results of operations of the properties owned during the entire three months ended June 30, 2000 with the results of the same properties owned during the entire three months ended June 30, 1999), total revenue increased by approximately $0.2 million or 2.2% due to an increase in rental rates. Our total operating expenses, which include property operating, repairs and maintenance, real estate taxes, and ground lease decreased by approximately $0.5 million to approximately $2.9 million from approximately $3.4 million in 1999. The "same-store" properties accounted for approximately $0.1 million or 20% of this decrease. Interest expense decreased by approximately $0.7 million to approximately $2.2 million from approximately $2.9 million primarily due to a reduction in the amounts borrowed as a result of the 1999 property dispositions and the conversion of our unsecured loan to Series A convertible preferred shares in January 2000. LIQUIDITY AND CAPITAL RESOURCES We expect to fund our short-term liquidity needs, including recurring capital expenditures, from our working capital (including the restricted cash which is available for capital expenditures, real estate taxes and insurance), and from income derived primarily from our property operations. We anticipate using these monies to fund periodic tenant-related capital expenditures and other capital improvements. Assuming that our Board of Trustees continues to authorize the payment of distributions consistent with historical per share amounts, we believe that our Funds Available for Distribution (as defined below) will be sufficient for the twelve months after the date of this report to pay quarterly distributions. We expect to fund our long-term liquidity needs, including funds necessary for non-recurring capital improvements from long-term and short- term secured debt. If we require additional liquidity to fund a portion of the cost of improving properties in the future, we expect to borrow under our credit facility which is secured by our Johns Creek Office and Industrial Park and Technology Park or to mortgage our Avalon Ridge Business Park which is our only unencumbered property. At June 30, 2000, our assets totaled approximately $198.0 million, a decrease of approximately $8.6 million from total assets at December 31, 1999 of approximately $206.6 million. Our liabilities totaled approximately $125.3 million at June 30, 2000, a decrease of approximately $13.8 million from a total of approximately $139.1 million at December 31, 1999. Our shareholders equity increased by approximately $5.1 million to approximately $70.4 million at June 30, 2000 from approximately $65.3 million at December 31, 1999. Cash and cash equivalents consist of cash and short-term investments. Our cash and cash equivalents balance was approximately $4.5 million at June 30, 2000 and approximately $13.1 million at December 31, 1999. The decrease in total cash and cash equivalents resulted from using approximately $2.0 million in investing activities and approximately $11.4 million in financing activities, while receiving approximately $4.8 million from operating activities. Cash Flows From Operating Activities: Net cash provided by operating activities decreased by approximately $0.9 million for the six months ended June 30, 2000 to approximately $4.8 million from approximately $5.7 million in 1999. This decrease is primarily due to period-to-period changes in certain assets and liabilities including restricted cash, other assets, accounts payable and other assets and liabilities affecting operating activities. Net income adjusted for depreciation and amortization and minority interest remained the same at approximately $6.1 million for the six months ended June 30, 2000 and 1999. See Results of Operations above for further discussion of the operations of our real estate assets. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a standard known as "Funds from Operations", or "FFO" for short, which it believes more accurately reflects the operating property performance of a REIT such as our company. As defined by NAREIT, FFO means net income computed in accordance with generally accepted accounting principles ("GAAP"), less extraordinary items, excluding gains (or losses) from debt restructuring and sales of property plus depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. We have adopted the NAREIT definition for computing FFO because we believe that, subject to the following limitations, FFO provides a basis for comparing the performance and operations of a REIT such as our company. The calculation of FFO may vary from entity to entity in that capitalization and expense policies may vary from entity to entity. Items which are capitalized do not decrease FFO whereas items that are expensed decrease FFO. As such, our presentation of FFO may not be comparable to other similarly titled measures presented by other REIT's. We do not intend for FFO to be an alternative to Net Income as an indication of our performance nor an alternative to Cash Flows from Operating Activities (as calculated in accordance with GAAP) as a measure of our capacity to pay distributions. For the six months ended June 30, 2000 and 1999, our properties generated FFO of approximately $5.3 million and $5.6 million, respectively. FFO decreased on a year to year basis due primarily to a decrease in the number of properties owned from period-to-period. FFO for the six months ended June 30, 2000 and 1999 is calculated as follows: 2000 1999 ------- ------- (Dollars in thousands) Net Income Available to Common Shares. . . . $ 2,061 $ 2,465 Plus: Depreciation and Amortization Expense . . . 3,332 3,234 Less: Minority Interest Share of Depreciation and Amortization Expense . . . . . . . . . . . . . . . . . (172) (148) Extraordinary Item . . . . . . . . . . . . 42 -- -------- ------- Funds From Operations. . . . . . . . . . . . $ 5,263 $ 5,551 ======== ======= Cash Flows Provided By (Used For): Operating Activities . . . . . . . . . . . $ 4,808 $ 5,662 Investing Activities . . . . . . . . . . . $ (2,001) $(2,917) Financing Activities . . . . . . . . . . . $(11,370) $(3,822) Our ability to pay any distribution is influenced by the amount of money that we have available to distribute known as Funds Available for Distribution or "FAD" for short. FAD is calculated by increasing or decreasing FFO to give effect to items such as the impact of straight- lining rents, lease commissions paid and normalized reserves for capital improvements. We reserve approximately $0.075 per square foot for flex/industrial properties, $0.10 per square foot for office properties, $0.15 per square foot for retail property and $200 per residential unit. The ability to make future distributions to our shareholders is dependent upon, among other things: . the course determined by our Board of Trustees as a result of their review of strategic alternatives; . sustaining the operating performance of our existing real estate investments through scheduled increases in base rents under existing leases and through general improvement in the real estate markets where our properties are located; and . our level of operating expenses. FAD for the six months ended June 30, 2000 and 1999 is calculated as follows: 2000 1999 ------- ------- (Dollars in thousands) Funds From Operations. . . . . . . . . . . . $ 5,263 $ 5,551 Straight-line Rents. . . . . . . . . . . . . (49) (81) Lease Commissions. . . . . . . . . . . . . . (716) (567) Capital Reserve. . . . . . . . . . . . . . . (163) (256) ------- ------- Funds Available for Distribution . . . . . . $ 4,335 $ 4,647 ======= ======= Cash Flows From Investing Activities: During the six months ended June 30, 2000, we used approximately $2.0 million in investing activities compared to approximately $2.9 million in the same period in 1999. Cash flow was primarily used to make capital improvements at our various properties in the amount of approximately $2.6 million during both periods. Cash Flows From Financing Activities: During the six months ended June 30, 2000 financing activities used approximately $11.4 million compared to approximately $3.8 million in the same period in 1999. During the six months ended June 30, 2000, we used cash primarily to make net payments on mortgage loans, and on an unsecured loan payable of approximately $7.8 million and to pay distributions to shareholders of approximately $3.7 million. The cash flows used by financing activities for the six months ended June 30, 1999 resulted primarily from distributions paid to shareholders of approximately $3.2 million and principal payments on mortgage loans and bonds payable of approximately $0.8 million. FINANCINGS: On May 1, 2000, we entered into a loan agreement with LaSalle Bank National Association which provided for a loan in the amount of $12.1 million, which we can draw in four installments. The amount of $8.5 million was drawn on May 1, 2000. The loan which is collateralized by the Trust's Johns Creek Office and Industrial Park and Technology Park properties, bears interest at a variable rate equal to LIBOR plus 2.2% and is payable monthly. The loan principal is pre-payable without penalty and matures in one year. We utilized the proceeds from the first draw primarily to repay the amounts outstanding on a line of credit which was due on May 1, 2000 and which was previously collateralized by Johns Creek Office and Industrial Park and Technology Park, and secondarily for transaction costs. OTHER INFORMATION As of June 30, 2000, we owned interests, directly or indirectly through our wholly owned subsidiaries, in the properties set forth in the table below: BANYAN STRATEGIC REALTY TRUST Portfolio Summary June 30, 2000
Scheduled Lease Expirations Occu- ------------------------------- Date Square pancy After Acquired Footage % 2000 2001 2002 2002 -------- ------- -------- ---- ---- ---- ----- FLEX/INDUSTRIAL - --------------- Milwaukee Industrial Properties Milwaukee, WI. . . . . . . . . 4/30/93 235,800 92% 9% 16% 32% 35% Elmhurst Metro Court Elmhurst, IL . . . . . . . . . 11/30/93 140,800 66% 3% 37% 12% 14% Willowbrook Industrial Court Willowbrook, IL. . . . . . . . 6/16/95 84,300 97% 17% 22% 31% 27% Lexington Business Center Lexington, KY. . . . . . . . . 12/05/95 308,800 69% 0% 9% 5% 55% Newtown Business Center Lexington, KY. . . . . . . . . 12/05/95 87,100 99% 4% 37% 16% 42% 6901 Riverport Drive Louisville, KY . . . . . . . . 11/19/96 322,100 100% 45% 0% 0% 55% Avalon Ridge Business Park Norcross, GA . . . . . . . . . 4/24/98 57,400 100% 0% 0% 0% 100% Tower Lane Business Park Bensenville, IL. . . . . . . . 4/27/98 95,900 84% 15% 21% 30% 18% Metric Plaza Winter Park, FL. . . . . . . . 4/30/98 32,000 100% 0% 0% 69% 31% Park Center Orlando, FL. . . . . . . . . . 4/30/98 47,400 90% 9% 25% 31% 25% Scheduled Lease Expirations Occu- ------------------------------- Date Square pancy After Acquired Footage % 2000 2001 2002 2002 -------- ------- -------- ---- ---- ---- ----- University Corporate Center Winter Park, FL. . . . . . . . 4/30/98 127,800 77% 7% 33% 23% 14% Johns Creek Office and Industrial Park Duluth and Suwanee, GA . . . . 8/14/98 119,300 100% 0% 0% 50% 50% ---------- ----- ----- ----- ----- ----- Sub-total. . . . . . . . . . 1,658,700 87% 13% 15% 18% 41% ---------- ----- ----- ----- ----- ----- OFFICE - ------ Colonial Penn Building Tampa, FL. . . . . . . . . . . 3/22/94 79,200 72% 0% 0% 0% 72% Commerce Center Sarasota, FL . . . . . . . . . 3/22/94 81,100 100% 0% 11% 5% 84% Woodcrest Office Park Tallahassee, FL. . . . . . . . 12/19/95 264,900 93% 12% 17% 20% 44% Midwest Office Center Oakbrook Terrace, IL . . . . . 4/18/96 77,000 97% 18% 19% 32% 28% Phoenix Business Park Atlanta, GA. . . . . . . . . . 1/15/97 110,600 100% 0% 4% 18% 78% Butterfield Office Plaza Oak Brook, IL. . . . . . . . . 4/30/97 200,800 91% 10% 21% 39% 21% Southlake Corporate Center Morrow, GA . . . . . . . . . . 7/30/97 56,200 89% 3% 32% 38% 16% University Square Business Center Huntsville, AL . . . . . . . . 8/26/97 184,700 91% 17% 25% 24% 25% Technology Center Huntsville, AL . . . . . . . . 8/26/97 48,500 65% 0% 0% 0% 65% Airways Plaza Office Center Memphis, TN. . . . . . . . . . 12/10/97 87,800 17% 0% 4% 3% 10% Scheduled Lease Expirations Occu- ------------------------------- Date Square pancy After Acquired Footage % 2000 2001 2001 -------- ------- -------- ---- ---- ---- ----- Peachtree Pointe Office Park Norcross, GA . . . . . . . . . 1/20/98 71,700 84% 24% 13% 9% 38% Avalon Center Office Park Norcross, GA . . . . . . . . . 3/20/98 53,300 87% 0% 0% 0% 87% Sand Lake Tech Center Orlando, FL. . . . . . . . . . 4/30/98 84,100 100% 0% 0% 3% 97% Technology Park Norcross, GA . . . . . . . . . 8/14/98 145,700 100% 13% 28% 4% 55% ---------- ----- ----- ----- ----- ----- Sub-total. . . . . . . . . 1,545,600 88% 9% 15% 17% 47% ---------- ----- ----- ----- ----- ----- RETAIL - ------ Northlake Tower Shopping Center Atlanta, GA. . . . . . . . . . 7/28/95 321,600 97% 1% 2% 7% 87% ---------- ----- ----- ----- ----- ----- Total. . . . . . . . . . . . . 3,525,900 88% 10% 14% 17% 47% ---------- ----- ----- ----- ----- -----
BANYAN STRATEGIC REALTY TRUST Comparison of Average Rents Average Average "In Place" Market Square Net Rents Net Rents Property Type Footage (1) (2) - ------------- --------- ---------- --------- Flex/Industrial. . . . . . 1,658,700 $5.55 $5.59 Office . . . . . . . . . . 1,545,600 9.18 10.27 Retail . . . . . . . . . . 321,600 11.81 12.00 ---------- ------ ------ Total. . . . . . . . . 3,525,900 $ 7.71 $ 8.23 ========== ====== ====== - -------------------- (1) Average "In Place" Net Rents represent net operating income per square foot. (2) Average Market Net Rents represent our good faith estimate of current market rents, assuming standard tenant improvements. SUBSEQUENT EVENT During the first quarter of 2000, our board of trustees formed a financial advisory committee comprised entirely of our independent trustees to evaluate strategic alternatives and engaged CFC Advisory Services, an affiliate of Cohen Financial, to serve as its advisor. In the process of exploring and evaluating strategic alternatives designed to maximize shareholder value, the committee and its advisor held preliminary discussions with our president Leonard Levine in response to inquiries made by Mr. Levine regarding a potential acquisition of our assets by an entity controlled by Mr. Levine. These discussions were subsequently terminated when the financial advisory committee concluded that, in its view, Mr. Levine engaged in conduct which constitutes a breach of his duty of loyalty and a breach of his employment contract. On July 28, 2000, the committee announced that as part of its continuing review, it authorized Cohen Financial, to initiate a marketing effort designed to solicit bids for our properties in whole, bulk sales or individually. There is no assurance that any transaction will materialize. On August 14, 2000, we exercised our rights under the employment agreement with Mr. Levine, by suspending him and placing him on leave from his position as president. We also initiated an arbitration proceeding in which we contend that certain actions taken by Mr. Levine constitute "just cause" for terminating his employment agreement. We are also evaluating whether to file a lawsuit against Mr. Levine. Pending a final ruling by an arbitrator or a court, we will comply with the employment agreement including the compensation provisions. To replace Mr. Levine, our board of trustees has appointed one of our trustees, Larry Schafran, to the position of interim chief executive officer. Mr. Schafran is an experienced real estate investor and executive. Mr. Schafran has had extensive experience with the sale and liquidation of large scale real estate portfolios. Mr. Schafran was largely responsible for the sale of Penn Central's real estate assets in metropolitan New York while associated with The Palmieri Company, Inc. from 1974-1984. Mr. Schafran also serves on the board of directors of three other public companies. The board has formed a committee to discuss and negotiate a compensation package for Mr. Schafran. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK We do not engage in any hedge transactions nor in the ownership of any derivative financial instruments. To mitigate the impact of fluctuations in interest rates, we generally have maintained over 70% of our debt as fixed rate in nature by borrowing on a long-term basis. As of June 30, 2000, we had approximately $118.7 million of outstanding long-term debt, of which $20.8 million bears interest at variable rates that are adjusted on a monthly basis. As of June 30, 2000, the weighted-average interest rate on this variable rate debt was 8.14%. If interest rates on this variable rate debt increased by one percentage point (1%), interest expense would increase by $208,000 on an annual basis. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (see Exhibit Index included elsewhere herein). (b) None SIGNATURES PURSUANT to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on our behalf and in the capacities and on the dates indicated. BANYAN STRATEGIC REALTY TRUST By: /s/ L.G. Schafran Date: August 14, 2000 L.G. Schafran, Interim President By: /s/ Joel L. Teglia Date: August 14, 2000 Joel L. Teglia, Vice President and Chief Financial Officer EXHIBIT INDEX - ------- 3.1 Third Amended and Restated Declaration of Trust dated as of August 8, 1986, as amended on March 8, 1991, May 1, 1993, August 12, 1998 and December 13, 1999, including Certificate of designations, preferences and rights of Series A convertible preferred shares. (1) 3.2 First Amendment of Third Amended and Restated Declaration of Trust effective December 13, 1999. (2) 3.3 By-Laws dated March 13, 1996. (3) 3.4 BSRT UPREIT Limited Partnership Limited Partnership Agreement (4) 4.1 Convertible Term Loan Agreement dated as of October 10, 1997 among Banyan Strategic Realty Trust, as Borrower, and the Entities listed therein, as Lenders. (5) 4.2 First Amendment to Convertible Term Loan Agreement dated as of March 30, 1998 made by and among Banyan Strategic Realty Trust and the Entities listed therein, as Lenders. (6) 4.3 Second Amendment to Convertible Term Loan Agreement dated as of June 26, 1998 made by and among Banyan Strategic Realty Trust and the Entities listed therein, as Lenders. (7) 4.4 Revolving Credit Agreement dated April 30, 1998 among Banyan Strategic Realty Trust, as Borrower and the Capital Company of America, as Lender. (8) 4.5 Loan Agreement dated May 22, 1998 among BSRT Fountain Square L.L.C., BSRT Phoenix Business Park L.L.C., BSRT Newtown Trust, BSRT Southlake L.L.C., BSRT Technology Center L.L.C., BSRT Airways Plaza L.L.C., BSRT Peachtree Pointe L.L.C., BSRT Avalon Center L.L.C., BSRT Sand Lake Tech Center L.L.C., BSRT Park Center L.L.C., BSRT Metric Plaza L.L.C., and BSRT University Corporate Center L.L.C., as Borrower, and the Capital Company of America, as Lender. (7) 4.6 First Amendment to Loan Agreement dated September 11, 1998 among BSRT Fountain Square L.L.C., BSRT Phoenix Business Park L.L.C., BSRT Newton Trust, BSRT Southlake L.L.C., BSRT Technology Center L.L.C., BSRT Airways Plaza L.L.C., BSRT Peachtree Pointe L.L.C., BSRT Avalon Center L.L.C., BSRT Sand Lake Tech Center L.L.C., BSRT Park Center L.L.C., BSRT Metric Plaza L.L.C., and BSRT University Corporate Center L.L.C., as Borrower, and the Capital Company of America LLC, as Lender. (9) 4.7 Loan Agreement dated June 22, 1998 between Banyan/Morgan Wisconsin L.L.C., and Banyan/Morgan Elmhurst L.L.C., as Borrower and the Capital Company of America, as Lender. (7) 4.8 First Amendment to Loan Agreement dated September 11, 1998 between Banyan/Morgan Wisconsin L.L.C., and Banyan/Morgan Elmhurst L.L.C., as Borrower and the Capital Company of America LLC, as Lender. (9) 10.1 Employment Agreement of Leonard G. Levine as of December 14, 1999. (1) 10.2 Employment Agreement of Leonard G. Levine as of October 1, 1997. (10) 10.3 Employment Agreement of Joel L. Teglia dated December 31, 1998. (4) EXHIBIT INDEX - ------- 10.4 Employment Agreement of Neil Hansen dated December 31, 1998. (4) 10.5 Employment Agreement of Jay Schmidt dated December 31, 1998. (4) 10.6 1997 Omnibus Stock and Incentive Plan dated July 9, 1997. (11) 10.7 Share Purchase Agreement by and among Banyan Strategic Realty Trust and the Purchasers listed on the signature page attached thereto dated as of October 10, 1997. (5) 10.8 Registration Rights Agreement dated as of October 10, 1997 between Banyan Strategic Realty Trust and the Purchasers listed on the Signature Pages attached thereto. (5) 10.9 Registration Rights Agreement dated as of October 1, 1997 between Banyan Strategic Realty Trust and Leonard G. Levine. (4) 10.10 Consulting Agreement dated as of February 18, 2000 between CFC Advisory Services Limited Partnership and Banyan Strategic Realty Trust. (*) 10.11 Modification to Consulting Agreement dated as of May 31, 2000 between CFC Advisory Services Limited Partnership and Banyan Strategic Realty Trust. (*) 21 Subsidiaries of Banyan Strategic Realty Trust (1) 27 Financial Data Schedule (*) 99.17 Press Release dated July 14, 2000 (*) 99.18 Press Release dated July 28, 2000 (*) 99.19 Press Release dated August 14, 2000 (*) - -------------------- (*) Filed herewith. (1) Incorporated by reference from the Trust's Form 10-K for the year ended December 31, 1999. (2) Incorporated by reference from the Trust's Form 10-Q dated March 31, 2000. (3) Incorporated by reference from the Trust's Registration Statement on Form S-11 (file number 33-4169). (4) Incorporated by reference from the Trust's Form 10-K for the year ended December 31, 1998. (5) Incorporated by reference from the Trust's Form 8-K dated October 14, 1997. (6) Incorporated by reference from the Trust's Form 10-K/A for the year ended December 31, 1997. (7) Incorporated by reference from the Trust's Form 8-K dated May 22, 1998. (8) Incorporated by reference from the Trust's Form 10-Q dated March 31, 1998. (9) Incorporated by reference from the Trust's Form 8-K/A-1 dated August 14, 1998. (10) Incorporated by reference from the Trust's Form 10-K dated December 31, 1997. (11) Incorporated by reference from the Trust's Form 10-Q for the quarter ended June 30, 1997. EX-10.10 2 0002.txt EXHIBIT 10.10 - ------------- CONSULTING AGREEMENT -------------------- THIS AGREEMENT is entered into as of February 18, 2000 between CFC ADVISORY SERVICES LIMITED PARTNERSHIP (the "Consultant") and BANYAN STRATEGIC REALTY TRUST (the "Owner"). R E C I T A L S --------------- A. Owner owns or is a member or partner in an entity that owns title to the real estate listed on Exhibit A attached hereto and made a part hereof (individually, or collectively, as the context may require, the "Property"). B. Owner desires to retain Consultant to perform the consulting services set forth in Part I hereof. THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Owner and the Consultant agrees as follows: PART I CONSULTING AGREEMENT 1. The Consultant shall review and analyze information regarding each Property. Such review and analysis shall include the following: (a) Review and analyze the information to be furnished by Owner as requested by Consultant; (b) Meet with Owner in order to gain further insight into the Owner's plans, budgets and forecasts; (c) Conduct site inspections of each Property and its local market and test Owner's assumptions and conclusions regarding the estimated future cash flow of each Property; (d) Test the sensitivity of the estimated cash flow of each Property by utilizing alternative economic, market and property assumptions and assess the anticipated volatility of the estimated future cash flow of each Property; and (e) Stratify and analyze the portfolio of Properties into groupings of properties by: (i) Property type; (ii) Geographic location; (iii) Leasing status; (iv) Volatility of cash flow; and (v) Holding period. 2. Upon completion of such review and analysis, the Consultant shall prepare and deliver to Owner a memorandum setting forth the results of such review and analysis (the "Analysis Memorandum"), which shall contain the following: (a) The estimated fair market value of Owner and its publicly traded common shares; (b) The estimated fair market value of each Property; (c) The estimated fair market value of the Property in certain groupings as set forth above; and (d) An assessment of alternative strategies and estimates of the resulting value to shareholders of each strategy. 3. Consultant expects to complete the review and analysis referred to in Paragraph 1 of this Part I within forty-five (45) days following the receipt of an executed counterpart of this Agreement (together with Consultant's retainer) and the material to be initially requested by Consultant. This time estimate is based upon the scope of the work described above and assumes the full and prompt cooperation of Owner in providing the requested information and meeting to answer questions. Following completion of such review and analysis, Consultant will present the Analysis Memorandum. 4. This project will be co-managed by Bruce Cohen, Chief Investment Officer, and Richard Tannenbaum, Managing Director of the Consultant. 5. (a) The Owner shall pay the Consultant the sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) to perform the services set forth in this Part I. $100,000 of said payment shall be paid to Consultant by Owner concurrently with the execution of this Agreement by the parties hereto, and the balance of $150,000 shall be paid to the Consultant by the Owner upon the furnishing of the Analysis Memorandum by Consultant to Owner. (b) The Consultant shall bear all costs and expenses incurred by it in performing its duties under this Agreement relating to general and administrative overhead expenses. Owner will reimburse the Consultant for any out-of-pocket expenses, including the cost of airfare, rental cars, lodging and meals. The Owner will also reimburse the Consultant for any out-of-pocket expenses incurred by Consultant for any data or materials required to be purchased by Consultant in connection with the performance of its duties hereunder. The Owner shall pay to the Consultant all amounts due the Consultant in connection with this Section 5(b) within ten (10) days after receipt by the Owner of each invoice therefore from the Consultant. The aggregate costs which Owner shall be obligated to pay under this Section 5(b) shall not exceed $25,000. 6. It is understood that the judgments of the Consultant as set forth in the Analysis Memorandum and its determination of said estimated fair market values shall constitute opinions of the Consultant, and, except as provided herein, the Consultant shall incur no liability with respect thereto. Further, the following assumptions and limiting conditions shall apply to the Analysis Memorandum. (a) No responsibility shall be assumed for matters of a legal nature, nor shall Consultant render any opinion as to title, which shall be assumed to be marketable. The Property shall be valued as though owned free and clear, unless otherwise stated in the Analysis Memorandum. (b) There are no hidden or unapparent conditions of the Property, sub-soil or structures which would render any Property more or less valuable. (c) The existence of potentially hazardous materials used in the construction or maintenance of any building, such as the presence of asbestos, urea formaldehyde foam insulation, PCB's, and/or the existence of any form of toxic waste, which may or may not be present on the Property, shall not be considered. (d) No survey of the Property shall be made by the Consultant and no responsibility shall be assumed in connection with such matters. It shall be assumed that the utilization of land and improvements is within the boundaries or property lines of each Property, and that there are no encroachments unless noted within the Analysis Memorandum. (e) Except to the actual factual knowledge of any employee of Consultant who shall work on this assignment of any material falsification or inaccuracy, all information, including financial operating statements, along with estimates and opinions obtained from parties not employed by Consultant, including the Owner, shall be assumed to be true and correct. No liability resulting from misinformation shall be assumed by the Consultant. (f) Unless noted in the Analysis Memorandum, it shall be assumed that there are no zoning or building violations or restrictions existing in the Property. (g) It shall be assumed that the Property is in full compliance with all applicable federal, state, local and private codes, laws, consents, licenses and regulations (including a liquor license where appropriate), and all licenses, permits, certificates, franchises and the like can be freely renewed and/or transferred to a purchaser. (h) Except for prohibitions on the prepayment of indebtedness or the payment of premiums with respect thereto, all mortgages, liens, encumbrances, leases and servitudes shall be disregarded unless specified within the Analysis Memorandum. (i) The Analysis Memorandum, or any parts thereof, may not be reproduced in any form without permission of the Consultant, nor shall it be disseminated to any third parties, including governmental agencies, or the public through advertising, public relations, news, sales, or other media, or otherwise, without the prior written consent and approval of the Consultant. Notwithstanding the above, Consultant hereby consents to the inclusion of, and the accompanying references to, its Analysis Memorandum in any filing made by the Owner or any "affiliates" (as affiliate is defined in Rule 12b-2 of the Securities Exchange Act of 1934) in compliance with the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder. Owner agrees that, for purposes of the above sentence, Consultant shall be provided an opportunity to review the filing and approve any summary description of the Analysis Memorandum. (j) The Consultant shall not be required to give testimony or attendance in court by reason of the Analysis Memorandum, unless it is required to do so by operation of law and then at the reasonable cost of Owner. (k) The Consultant shall take no responsibility for any events, conditions or circumstances affecting market value of any Property that take place subsequent to either the date of the Analysis Memorandum, or the date of our site inspection, whichever occurs first. (l) Estimated values contained in the Analysis Memorandum shall assume both responsible ownership and competent management; however, should Consultant determine in its review and analysis of each Property that such Property is not being competently managed, Consultant shall advise Owner of that determination. (m) The estimated values to be contained in the Analysis Memorandum shall be based upon an evaluation of the present general level of the economy of the area, and shall not take into account or make provision for the effect of any rise or decline in local or general economic conditions. To the extent that expenses increase over the economic life of a Property, it shall be assumed that the revenues will be adjusted, to at least offset such increases. Consultant does not warrant that the estimates will be attained, but such estimates will be prepared on the base of information obtained during the course of our analysis. (n) The Analysis Memorandum shall assume continuation of all Internal Revenue Service tax code provisions as stated or interpreted on either the date of the Analysis Memorandum or the date of our field inspection, whichever occurs first. 7. The Owner hereby agrees to indemnify and hold harmless the Consultant, its employees, partners, attorneys and agents, and the officers and directors of its General Partner (the Consultant and all of said persons and entities are hereafter collectively referred to as the "Indemnified Parties"), from and against any and all liabilities, claims, causes of action, damages, costs and expenses which may at any time be asserted, brought or incurred, arising from or relating to this Agreement. The Owner waives all claims that they may now have or hereafter have against the Indemnified Parties arising from or relating to this Agreement. The indemnifications set forth above shall include, without limitation, any and all fees, costs and expenses, including reasonable attorneys' fees, incurred in defending against, responding to or otherwise dealing with such liabilities, claims, or causes of action. The indemnifications set forth above shall not apply to any activity that constitutes gross negligence or willful misconduct. The waivers set forth above shall not apply to any claims that constitute gross negligence, willful misconduct or any claims for direct damages (and not consequential damages) arising out of any material breach by Consultant of its express obligations under this Agreement. It is agreed that liability of the Consultant to the Owner is limited to the amount of the fee paid as liquidated damages. This Agreement has been and is made solely for the benefit of Consultant, Owner, its board and any committees thereof and their respective successors and assigns, and no other person shall acquire or have any rights under, or by virtue of, this Agreement. 8. In the event any claim, suit, action or proceeding shall allege or involve any such alleged willful misconduct or gross negligence as set forth in Paragraph 7 above and without limiting the generality of any such provisions contained herein, the Owner shall defend such claim, suit action or proceeding; but upon any final and non-appeal adjudication of willful misconduct or gross negligence on the part of Indemnified Parties, all amounts paid by the Owner pursuant to Paragraph 7 above shall be repaid by the Consultant to the Owner. PART II ------- GENERAL: - ------- 1. None of the rights or interests of the Consultant or Owner hereunder may be assigned, transferred or delegated in whole or in part; and any such purported assignment, transfer or delegation shall be void. The terms and conditions of this Agreement shall be governed by the laws of the State of Illinois. 2. All notices given hereunder shall be: (i) personally delivered; or (ii) given by certified mail, return receipt requested, postage prepaid, properly addressed; or (iii) given by a nationally recognized overnight courier service to the address for notices; or (iv) sent by facsimile/telecopy message to the phone number listed below and confirmed forthwith by certified mail as provided in (ii). Notice shall be deemed given: (a) when actually received under (i) above; (b) two (2) days after deposit in the mail, under (ii) above; (c) one (1) day after delivery to the courier, under (iii) above; and (d) when sent, under (iv) above, provided a property confirming copy is sent by certified mail. Notices hereunder shall be addressed or telecopied as follows: To Owner: BANYAN STRATEGIC REALTY TRUST 150 S. Wacker Drive, Suite 2900 Chicago, IL 60606 Phone: (312) 553-9800 Telecopier: (312) 553-0450 To Consultant: CFC ADVISORY SERVICES LIMITED PARTNERSHIP 2 North LaSalle Street, Suite 800 Chicago, IL 60602 Phone: (312) 346-5680 Telecopier: (312) 346-6669 3. This Agreement constitutes the entire agreement between Owner and Consultant regarding the subject matter hereof and supersedes all prior discussions, negotiations and agreements, whether oral or written. No amendment, alteration or withdrawal of this Agreement shall be valid or binding unless made in writing and signed by both Owner and Consultant. Any purported amendment, modification or withdrawal which is oral shall be void and of no effect whatsoever. This Agreement shall be binding upon the heirs, successors and assignees of the parties. 4. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under all applicable laws. However, if any provision of this Agreement shall be held to be prohibited by or invalid under any applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Agreement. 5. Any number of counterparts of this Agreement may be executed and delivered, and each shall be considered an original and together they shall constitute one (1) Agreement. 6. Should either party employ any attorney or attorneys to enforce any of the provisions hereof, to protect its interest in any manner arising under this Agreement or to recover damages for the breach of this Agreement, the non-prevailing party in any action pursued in courts of competent jurisdiction (the finality of which is not legally contested) agrees to pay to the prevailing party, all reasonable costs, damages and expense, including attorneys' fees and expenses of litigation, expended or incurred in connection therewith. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. CFC ADVISORY SERVICES LIMITED PARTNERSHIP By: COHEN REALTY SERVICES, INC., its General Partner By: ------------------------------ Name: ------------------------------ Title: President BANYAN STRATEGIC REALTY TRUST By: ------------------------------ Name: ------------------------------ Its: ------------------------------ EX-10.11 3 0003.txt EXHIBIT 10.11 - ------------- MODIFICATION TO CONSULTING AGREEMENT ------------------------------------ THIS MODIFICATION TO CONSULTING AGREEMENT (this "Modification") is entered into as of May 31, 2000 between CFC ADVISORY SERVICES LIMITED PARTNERSHIP (the "Consultant") and BANYAN STRATEGIC REALTY TRUST (the "Owner"). R E C I T A L S --------------- A. Owner and Consultant have previously entered into that certain Consulting Agreement dated as of February 18, 2000 (the "Agreement"). B. Owner has established a Special Committee known as the Financial Advisory Committee (the "Committee") consisting of all of the Independent Trustees of Owner to which the Owner has delegated the authority to handle all aspects of the Owner's business as it pertains to the subject matter of this Modification. C. Owner and Consultant have agreed to amend the Agreement as set forth herein. THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Owner and the Consultant agree as follows: 1. The defined terms used herein, unless otherwise defined herein, shall have the meanings ascribed to those terms in the Agreement. 2. The Consultant shall assist the Committee as its financial advisor, and, at the Committee's direction, pursue one, all or some combination of the following strategies: (a) NEGOTIATE A SALE TO THE OAK REALTY GROUP, INC. ("OAK") Consultant will assist the Committee in responding to, evaluating, and, at the Committee's direction, negotiating with representatives of Oak with respect to its offer to purchase all of the Property or all of the shares ("Shares") of Owner. Consultant will, among other things, assist and advise the Committee in evaluating the terms and conditions of Oak's proposal, including any and all financing conditions. Consultant will also review, read and assist the Committee in negotiating all the relevant documents and oversee the closing of a Sale. (b) MARKET ALL OF THE PROPERTY IN BULK OR ALL OF THE SHARES TO A SMALL GROUP OF POTENTIAL BUYERS. At the Committee's direction, Consultant will obtain bids from a selected group of potential purchasers identified by Consultant and approved by the Committee. In connection therewith, Consultant will prepare brief marketing materials and, under a more limited time frame at the Committee's direction, manage the bid process, qualify the bids and oversee the final negotiation and closing of a Sale. (c) MARKET ALL OF THE PROPERTY IN BULK OR ALL OF THE SHARES TO A LARGE GROUP OF POTENTIAL BUYERS. At the Committee's direction, Consultant will market all of the Property in bulk or all of the Shares to a large group of potential buyers identified by Consultant and approved by the Committee. In connection therewith, Consultant will prepare in-depth marketing materials (including extensive due diligence information on each Property, manage a rigorous auction process, qualify the bids and oversee the final negotiation and closing of the Sale. (D) MARKET ALL OF THE PROPERTY INDIVIDUALLY OR IN SMALLER GROUPS. At the Committee's direction, Consultant will market all of the Property to selected local or regional persons or entities identified by Consultant and approved by the Committee. In connection therewith, Consultant will prepare full marketing materials (including the preparation of due diligence information for review), manage the auction process, qualify the bids and oversee the final negotiation and closing of a Sale. In consideration of the service rendered hereby, the Owner agrees to pay a fixed fee and an incentive fee to Consultant based on the strategies implemented by Consultant. The fixed fees for Sales shall be as follows: Strategy A - $ 500,000 Strategy B - $1,000,000 Strategy C - $1,500,000 Strategy D - $2,500,000 If the Committee directs the Consultant to implement multiple strategies, the Owner agrees to pay Consultant the highest fixed fee for the strategies that the Consultant implemented provided that a Sale or Sales shall occur. The fixed fee shall be the highest fee regardless of whether the Sale or Sales occurred as a result of a strategy for which a lower fixed fee is specified. Accordingly, in the event that a Third Party completes a Sale, which resulted from a strategy, subsequent to the time that Consultant may have implemented a different strategy, the fixed fee will be the greater fee applicable to one of the strategies so implemented. For purposes of determining whether a strategy has been implemented, a strategy will be deemed to have been implemented if it results in a Sale or if fifteen (15) days have elapsed since the Committee directed the Consultant to commence the implementation of a strategy. Upon completing a Sale or Sales, Consultant shall also be entitled to receive an incentive fee equal to five (5%) percent of the excess of the aggregate Sale Value in connection with such sale or Sales over $6.00 per share on a fully diluted basis. 3. The Consultant shall have the exclusive right to arrange for Sales for a period commencing on the date hereof and ending on the one hundred and eightieth (180) day following the date hereof (the "Term"). If, during the Term, a Sale is completed by Owner, regardless of whether the Sale is arranged by Consultant, Owner or anyone else, Consultant shall be paid the fee (both fixed and incentive) with respect thereto upon completion of the Sale. If during the Term, any agreement for a Sale is entered into regardless of whether the transaction is completed during the Term or thereafter, Consultant shall be paid the fee (both fixed and incentive) with respect thereto upon completion of the Sale. If all or any portion of the purchase price with respect to a Sale is deferred, then the same proportion of the Consultant's Fee (both fixed and incentive) shall also be deferred, and such fee shall be paid as and in the same proportion that the deferred portion of the purchase price is paid. To the extent that a Sale constitutes a sale of all of Property or of the Shares, Consultant shall receive the fixed fee and incentive fee with respect thereto as set forth in paragraph 2 above. To the extent that a sale of Property consists of less than all of the Property, the fixed fee with respect to each Property shall be the product of the applicable fixed fee referred to in paragraph 2 above multiplied by a percentage which is the percentage set forth in Exhibit A regarding each Property included in such Sale. To the extent that a Sale consists of less than all of the Property, the incentive fee with respect to each Property shall be calculated as follows: (a) First, to the extent that the Sale Value of each Property included within a Sale exceeds the Market Value thereof, subtract the Market Value from the Sale Value; and (b) Second, multiply the remainder arrived at in (a) above by 5% and the product resulting from such calculation shall constitute the incentive fee for each Property included in such Sale. 4. THE TERM SHALL AUTOMATICALLY EXTEND FOR A PERIOD OF 180 DAYS UNLESS EITHER OWNER OR CONSULTANT SHALL GIVE NOTICE TO THE OTHER PARTY NOT LATER THAN FIVE (5) BUSINESS DAYS PRIOR TO THE EXPIRATION DATE OF THE TERM SPECIFYING THAT THE TERM SHALL NOT BE EXTENDED. 5. Owner further agrees that Owner shall pay Consultant the aforementioned fee if, within twelve (12) months after the expiration of the Term as the same may have been extended as aforesaid, a Sale is completed, or Owner or the applicable Entity enters into a contract for a Sale with, or negotiations continue, resume or commence and thereafter continue leading to a Sale to, any Person with whom Consultant had negotiated (either directly or through a broker or agent) or to whom any transaction had been submitted prior to the expiration of the Term as the same may have been extended as aforesaid, in an effort to effect a Sale. Consultant agrees to submit a list of such Persons to Owner not later than five (5) Business Days following the expiration of the Term as the same may have been extended as aforesaid, provided, however, if a written offer had been submitted then it will not be necessary to include the offeror's name on the list. 6. As used in this Modification, the following terms shall have the following definitions: "Business Day" means any weekday other than any holiday in the State of Illinois which banks are required or authorized to be closed. "Market Value" shall mean the value of each Property as calculated by multiplying the percentages listed on Exhibit A attached hereto by $6.00 per share and by the number of fully diluted Shares of Owners. "Person" shall mean an individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Sale" shall mean a transfer of ownership interest in Property or Shares to a single transferee. The Sale Value of Property or Shares shall be used in calculating the fee, whether fixed or incentive, with respect thereto. Contributions of cash, assets or services in exchange for an ownership interest therein by a Third Party shall be included in the amount of the Sale. To the extent that the contribution takes the form of assets or services, Consultant shall reasonably determine the fair market value thereof unless fair market value has been determined by the Owner and the Third Party transferee. The term "Sale" shall also mean the sale of all of the Shares. "Sale Value" shall mean, with respect to Shares, the cash and other consideration received from Third Parties in exchange for the ownership interest of Shares. "Sale Value" shall mean, with respect to Property, the cash and other consideration received from Third Parties in exchange for the ownership interest in Property. However, should any portion of the cash received from Third Parties in exchange for the ownership interest in Property be used to pay Secured Debt, the amount of Secured Debt that is repaid shall constitute a deduction from Sale Value regarding the Property encumbered by such Secured Debt. "Secured Debt" shall mean the amount of any loan which is secured by a first mortgage (or instruments in the nature thereof such as trust deeds or deeds of trust) wherein the Property encumbered by such first mortgage is the primary security for such loan. "Third Parties" shall mean Oak and any other Person, except for Owner. 7. The Consultant shall bear all costs and expenses incurred by it in performing its duties under this Modification provided that Owner agrees to reimburse the Consultant for any out-of-pocket expenses, including the cost of airfare, rental cars, lodging and meals incurred in connection with performing the services hereunder. Owner agrees to reimburse Consultant for all such expenses within ten (10) Business Days of receipt by Owner of a request for reimbursement by Consultant, provided that any such request for reimbursement shall be accompanied by receipts, and documentation of the time, place and amount of such expenses. 8. The Owner hereby agrees to indemnify and hold harmless the Consultant, its employees partners, attorneys and agents and the officers and directors of its General Partner (the Consultant and all of said Persons are hereinafter collectively referred to as the "Indemnified Parties"), from and against any and all liabilities, claims, causes of action, damages, costs and expenses ("Losses") which may at any time be asserted, brought or incurred, arising from or relating to the performance by Consultant of its duties pursuant to this Modification (except for any Losses caused by, or arising from, the gross negligence or willful misconduct of an Indemnified Party or Parties, provided, however, that this indemnity shall not apply to Losses arising from the gross negligence or willful misconduct) of an Indemnified Party or Parties. The Owner hereby further agrees to indemnify and hold harmless the Indemnified Parties, from and against any and all losses (except losses arising from the gross negligence or wilful misconduct of an Indemnified Party or Parties) which may at any time be asserted, brought or incurred arising out of, caused by or resulting from: (a) Presence on or about any Property of: (i) toxic or hazardous substances in amounts or concentrations beyond those permitted by law; or (ii) any underground storage tanks; or (b) The failure of any Property to comply with any requirement of laws, regulations or ordinances applicable to such Property and the use, operation, sale or offering for sale thereof. The obligation to indemnify for Losses due to the gross negligence of Indemnified Parties, shall include, any and all fees, costs and expenses, including reasonable attorneys' fees, incurred in defending against, responding to or otherwise dealing with such Losses. Consultant hereby agrees to indemnify and hold harmless the Owner, the Committee and all employees, trustees, shareholders, officers, attorneys and agents of the Owner and the Committee from and against any and all liabilities, claims, causes of action, damages, costs and expenses ("Losses") which may at any time be asserted, brought or incurred, arising from or relating to the performance by Consultant of its duties pursuant to this Modification, provided that such performance by Consultant amounts to gross negligence or willful misconduct. Except as provided below, it is agreed that liability of the Consultant to the Owner under this Modification shall be limited to the amount of any fixed and incentive fees paid or due Consultant, provided that this limitation of liability shall not bind any provider of a fairness opinion to Owner or the Committee who relies upon the work performed by Consultant pursuant to the Agreement or this Modification. 9. In the event any claim, suit, action or proceeding shall allege or involve any such alleged willful misconduct or gross negligence as set forth in Paragraph 8 above and without limiting the generality of any such provisions contained herein, Owner shall defend such claim, suit, action or proceeding: but upon any final and non-appeal adjudication of willful misconduct or gross negligence on the part of Indemnified Parties, all amounts paid by Owner pursuant to Paragraph 8 above shall be repaid by the Consultant to Owner. 10. Except as hereinafter set forth, none of the rights or interests of the Consultant or Owner under this Amendment may be assigned, transferred or delegated in whole or in part; and any such purported assignment, transfer or delegation shall be void. The Consultant may delegate certain of its rights, obligations and interests hereunder to CFC Capital Management Associates Limited Partnership and/or CFC Transactions Limited Partnership in which event CFC Capital Management Associates Limited Partnership and CFC Transactions Limited Partnership and their employees, partners, attorneys and agents and the officers and directors of their general partners shall constitute Indemnified Parties under Section 8 above. The terms and conditions of this Modification shall be governed by the laws of the State of Illinois. 11. Consultant hereby agrees to provide access to, and copies of its analysis and work product including its valuation conclusions on an asset by asset basis to any third party advisor retained by Owner or the Committee for purposes of rendering a fairness opinion regarding a Sale. 12. Except as expressly modified hereby, the Agreement shall remain unmodified and in full force and effect. Paragraphs 2, 3, 4, 5 and 6 of part II of the Agreement shall apply to the provisions of this Modification. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have caused this Modification to be duly executed as of the day and year first above written. CFC ADVISORY SERVICES LIMITED PARTNERSHIP By: COHEN REALTY SERVICES, INC., its General Partner By: ------------------------------ Name: Richard Tannenbaum Title: Vice President BANYAN STRATEGIC REALTY TRUST By: ------------------------------ Name: ------------------------------ Its: ------------------------------ EX-99.17 4 0004.txt EXHIBIT 99.17 - ------------- AT THE TRUST AT THE FINANCIAL RELATIONS BOARD Karen Dickelman Georganne Palffy Investor Relations Analyst Inquiries 312/683-3671 312/640-6768 ir@banyanreit.com - ----------------- FOR IMMEDIATE RELEASE FRIDAY, JULY 14, 2000 BANYAN STRATEGIC REALTY TRUST DECLARES SECOND QUARTER 2000 CASH DISTRIBUTION CHICAGO, JULY 14, 2000 - Banyan Strategic Realty Trust (Nasdaq:BSRTS) today declared a quarterly cash distribution of 12 cents per share for the second quarter ended June 30, 2000. The distribution is payable August 21, 2000 to shareholders of record as of July 21, 2000. Banyan Strategic Realty Trust is an equity Real Estate Investment Trust (REIT) that owns primarily office and flex/industrial properties. These properties are located in certain major metropolitan areas of the Midwest and Southeastern United States, including Atlanta, Georgia and Chicago, Illinois and smaller markets such as Huntsville, Alabama, Louisville, Kentucky, Memphis, Tennessee, and Orlando, Florida. The Trust's current portfolio consists of 27 properties totaling 3.5 million rentable square feet. As of this date, the Trust has 14,201,689 shares of beneficial interest outstanding. SEE BANYAN'S WEBSITE AT http:www.banyanreit.com. FOR FURTHER INFORMATION REGARDING BANYAN FREE OF CHARGE VIA FAX, DIAL 1-800-PRO-INFO AND ENTER "BSRTS". - END - EX-99.18 5 0005.txt EXHIBIT 99.18 - ------------- AT THE TRUST Robert G. Higgins 312/683-5539 bhiggins@banyanreit.com FOR IMMEDIATE RELEASE FRIDAY, JULY 28, 2000 FINANCIAL ADVISORY COMMITTEE OF BANYAN STRATEGIC REALTY TRUST ANNOUNCES AUTHORIZATION OF EXPANDED MARKETING EFFORTS CHICAGO, JULY 28, 2000 - The Financial Advisory Committee of the Board of Trustees of Banyan Strategic Realty Trust (Nasdaq:BSRTS) today announced that as part of its previously announced review of strategic alternatives for the Trust, it has authorized its financial advisor, CFC Advisory Services, an affiliate of Cohen Financial, a Chicago-based real estate investment banking firm, to initiate a marketing effort designed to solicit bids for the Trust's properties in whole, bulk sales or individually. Larry Schafran, chairman of the Committee, commented that, "This is the next step in our process of evaluating our portfolio and determining disposition strategies designed to enhance shareholder value and liquidity." Banyan Strategic Realty Trust is an equity Realty Estate Investment Trust (REIT) that owns primarily office and flex/industrial properties. These properties are located in certain major metropolitan areas of the Midwest and Southeastern United States, including Atlanta, Georgia and Chicago, Illinois and smaller markets such as Huntsville, Alabama, Louisville, Kentucky, Memphis, Tennessee, and Orlando, Florida. The Trust's current portfolio consists of 27 properties totaling 3.5 million rentable square feet. As of this date, the Trust has 14,202,414 shares of beneficial interest outstanding. SEE BANYAN'S WEBSITE AT http:www.banyanreit.com. FOR FURTHER INFORMATION REGARDING BANYAN FREE OF CHARGE VIA FAX, DIAL 1-800-PRO-INFO AND ENTER "BSRTS". - END - EX-99.19 6 0006.txt EXHIBIT 99.19 - ------------- AT THE TRUST Robert G. Higgins Karen Dickelman Vice President, General Counsel Director, Investor Relations 312/683-5539 312/683-3671 bhiggins@banyanreit.com ir@banyanreit.com FOR IMMEDIATE RELEASE MONDAY, AUGUST 14, 2000 BANYAN STRATEGIC REALTY TRUST APPOINTS LARRY SCHAFRAN AS INTERIM PRESIDENT/CEO CHICAGO, AUGUST 14, 2000 - Banyan Strategic Realty Trust (Nasdaq:BSRTS) today announced that its Financial Advisory Committee of the Board of Trustees has appointed independent trustee Larry Schafran as interim president and chief executive officer. Mr. Schafran replaces Leonard G. Levine. During the first quarter 2000 Banyan's Board of Trustees formed the Financial Advisory Committee comprised entirely of the independent trustees to evaluate strategic alternatives and engaged CFC Advisory Services, an affiliate of Cohen Financial, a Chicago-based real estate investment banking firm, to serve as its advisor. In the process of exploring and evaluating strategic alternatives designed to maximize shareholder value, the committee and its advisor held preliminary discussion with Banyan's President, Leonard G. Levine regarding a potential acquisition of the Trust's assets by a group headed by Mr. Levine. These discussions were subsequently terminated when the Financial Advisory Committee concluded that, in its, view, Mr. Levine engaged in conduct which constitutes a breach of his duty of loyalty and a breach of his employment contract. On July 28, 2000, the committee announced that as part of its continuing review, it authorized Cohen Financial to initiate a marketing effort designed to solicit bids for the Trust's properties in whole, bulk sales or individually. There is no assurance that any transaction will materialize. On August 14, 2000 Banyan exercised its rights under the employment agreement with Mr. Levine, by suspending him and placing him on leave from his position as president. Banyan also initiated an arbitration proceeding in which it contends that certain actions taken by Mr. Levine constitute "just cause" for terminating his employment agreement. Banyan is also evaluating whether to file a lawsuit against Mr. Levine. Pending a final ruling by an arbitrator or a court, Banyan will comply with the employment agreement including the compensation provisions. To replace Mr. Levine, the Board of Trustees has appointed Larry Schafran, an independent trustee, to the position of interim chief executive officer. Mr. Schafran is an experienced real estate investor and executive. Mr. Schafran has had extensive experience with the sale and liquidation of large sale real estate portfolios. Mr. Schafran was largely responsible for the sale of Penn Central's real estate assets in metropolitan New York while associated with The Palmieri Company, Inc. Mr. Schafran also serves on the board of directors of three other public companies. The board has formed a committee to discuss and negotiate a compensation package for Mr. Schafran. Banyan Strategic Realty Trust is an equity Real Estate Investment Trust (REIT) that owns primarily office and flex/industrial properties. These properties are located in certain major metropolitan areas of the Midwest and Southeastern United States, including Atlanta, Georgia and Chicago, Illinois and smaller markets such as Huntsville, Alabama, Louisville, Kentucky, Memphis, Tennessee, and Orlando, Florida. The Trust's current portfolio consists of 27 properties totaling 3.5 million rentable square feet. As of this date, the Trust has 14,202,414 shares of beneficial interest outstanding. SEE BANYAN'S WEBSITE AT http:www.banyanreit.com. For further information regarding Banyan free of charge of via fax, dial 1-800-PRO-INFO and enter "BSRTS". - END - EX-27 7 0007.txt
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BANYAN STRATEGIC REALTY TRUST'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q. 6-MOS DEC-31-2000 JUN-30-2000 4,534 0 1,362 0 0 5,896 201,817 (18,352) 198,009 5,210 118,714 67,387 0 6,157 (3,176) 198,009 0 18,810 0 0 11,543 0 4,615 2,379 0 2,379 0 (42) 0 2,337 0.14 0.14
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