-----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, MmUVYgNYG0WvYjvtCbymS4feuh/YyA22jaeKOkvkgybQKcmmS2doQFDfPfmUVpk9 6ZwQkFfKUSJQ45uU1TOl0A== 0000892626-98-000293.txt : 19980601 0000892626-98-000293.hdr.sgml : 19980601 ACCESSION NUMBER: 0000892626-98-000293 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980430 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980529 SROS: NONE 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: SEC FILE NUMBER: 000-15465 FILM NUMBER: 98634347 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, 1998 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 25 pages. Exhibit index is located on page 5. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. ORLANDO OFFICE BUILDING PORTFOLIO On April 30, 1998, the Trust acquired interest in four multi-tenant office properties in Orlando and Winter Park, Florida from an unaffiliated third party. The Orlando Office Building Portfolio consists of four multi-tenant office properties in Orlando and Winter Park, Florida. The portfolio includes sixteen buildings containing a total of approximately 291,100 net rentable square feet which were acquired for approximately $23.5 million including closing costs and other related expenses. The properties were purchased utilizing proceeds from the revolving line of credit obtained from Nomura Asset Capital Corporation (the "Nomura Line"), which will be repaid upon obtaining permanent financing for the properties. The aggregate occupancy of the portfolio is 91 percent. A breakdown of the individual properties in the Orlando Office Building Portfolio are: University Corp. Center Winter Park, FL 7 bldgs.; 127,800 sq.ft.; 94% occup. Metric Plaza Winter Park, FL2 bldgs.; 32,000 sq. ft.; 69% occup. Park Center Orlando, FL 2 bldgs.; 47,200 sq. ft.; 85% occup. Sand Lake Tech. Center Orlando, FL 5 bldgs.; 84,100 sq. ft.; 97% occup. The day-to-day operations of the properties are managed by Welsh Companies, Inc., which will receive a management fee each month equal to 3.5% of gross collections, as defined in the management agreement, for these management services. The term of the management agreement is for one year, cancelable upon 30 days written notice. If not terminated, the agreement will automatically renew for additional periods of one year each. The audited Combined Statements of Revenue and Certain Expenses of the Orlando Office Building Portfolio are included in ITEM 7. AVALON RIDGE On April 24, 1998, the Trust acquired from an unaffiliated third party a 100% fee simple ownership interest in two single-story office buildings commonly known as Avalon Ridge located in Norcross, Georgia, a northeast suburb of Atlanta, for a purchase price of approximately $3.9 million including closing costs and related expenses. The property contains approximately 57,400 net rentable square feet and was 61% leased with two tenants upon acquisition. As of May 1, 1998, the property was 100% leased to three tenants and it will be 100% occupied on January 1, 1999. The Trust funded the acquisition from its cash reserves and by utilizing a draw of $3.8 million upon its revolving line. Avalon Ridge was constructed in 1997 and 1998 and began operations in March 1998. The Trust is not presenting audited financial statements of this property because the operating history would not constitute a fiscal year. TOWER LANE BUSINESS PARK In April 1998, the Trust formed a new joint venture Butterfield O'Hare L.P. (the "Venture") in which the Trust has an 89.1% Limited Partnership interest and .9% General Partnership interest. The Trust contributed to the Venture its 100% ownership of Butterfield Office Plaza and the Venture acquired Tower Lane Business Park ("Tower Lane") in exchange for a 10% limited partner interest plus cash of $755,000. The Venture is consolidated in the Trust's financial statements and the acquisition of Tower Lane is reflected at its total purchase price of $5.1 million including closing costs and related expenses. Upon acquisition, the venture assumed an existing mortgage loan in the amount of approximately $3.7 million. The loan matures December, 2002, bears an interest rate of 8.35% and is payable in monthly installments of principal and interest based on 360-month amortization schedule. Tower Lane consists of two single-story office buildings located in Bensenville, Illinois, a western suburb of Chicago. The property contains approximately 95,900 net rentable square feet and was 90% occupied at the time of the acquisition. The audited Statements of Revenue and Certain Expenses of Tower Lane are included in ITEM 7. AVALON CENTER OFFICE PARK On March 20, 1998, the Trust acquired from an unaffiliated third party a 100% fee simple ownership interest in two one-story office buildings known as Avalon Center Office Park located in Norcross, Georgia, for a purchase price of approximately $4.4 million including closing costs and related expenses. The property contains approximately 53,300 net rentable square feet and was 65% occupied with three tenants at the time of the acquisition. As of May 1998, the property is 96% leased to four tenants with occupancies starting in the second half of the current year. The Trust funded the acquisition price from its cash reserves and by utilizing a draw of $4.3 million upon its revolving line. The Avalon Center Office Park was constructed in 1997 and began operations in late August 1997. The Trust is not presenting audited financial statements of this property because the operating history would not constitute a fiscal year. PEACHTREE POINTE OFFICE PARK On January 20, 1998, the Trust acquired from an unaffiliated third party a 100% fee simple ownership interest in five one-story office buildings commonly known as Peachtree Pointe Office Park located in Norcross, Georgia, a northeast suburb of Atlanta, for a purchase price of approximately $4.5 million. The property contains approximately 71,700 net rentable square feet, was constructed in 1982 and was 92% occupied with 23 tenants at the time of acquisition. The Trust funded the acquisition from its cash reserves as well as by utilizing a draw upon its revolving line of $3.4 million. The Trust's independent auditors will perform an audit of Peachtree Pointe Office Park and the Trust will file audited financial statements for this property within sixty days of the date of this report. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS a) Financial Statements. (i) Orlando Office Building Portfolio (See attached). (ii) Tower Lane Business Park (See attached). b) Pro Forma Financial Information 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: May 29, 1998 BANYAN STRATEGIC REALTY TRUST (Registrant) By: /s/ Joel L. Teglia Vice President, Chief Financial and Accounting Officer EXHIBIT INDEX ------------- a) Financial Statements (i) Orlando Office Building Portfolio (ii) Tower Lane Business Park b) Pro Forma Financial Information a) FINANCIAL STATEMENTS (i) ORLANDO OFFICE BUILDING PORTFOLIO --------------------------------- Combined Statements of Revenue and Certain Expenses ORLANDO OFFICE BUILDING PORTFOLIO For the year ended December 31, 1997 and For the period from January 1, 1998 to April 30, 1998 REPORT OF INDEPENDENT AUDITORS The Board of Directors Banyan Strategic Realty Trust We have audited the accompanying Combined Statements of Revenue and Certain Expenses of the Orlando Office Building Portfolio (the Properties) for the year ended December 31, 1997 and for the period from January 1, 1998 to April 30, 1998. The Combined Statements of Revenue and Certain Expenses are the responsibility of the Properties' management. Our responsibility is to express an opinion on the Combined Statements of Revenue and Certain Expenses based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Statements of Revenue and Certain Expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures made in the Combined Statements 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 Combined Statements of Revenue and Certain Expenses. We believe that our audits provide a reasonable basis for our opinion. The accompanying Combined Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K/A of Banyan Strategic Realty Trust as described in Note 2 and are not intended to be a complete presentation of the Properties' combined revenue and expenses. In our opinion, the Combined Statements of Revenue and Certain Expenses referred to above present fairly, in all material respects, the combined revenue and certain expenses of the Properties described in Note 2 for the year ended December 31, 1997 and for the period from January 1, 1998 to April 30, 1998, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Chicago, Illinois May 27, 1998 ORLANDO OFFICE BUILDING PORTFOLIO Combined Statements of Revenue and Certain Expenses (Amounts in thousands) Period from January 1, Year Ended 1998 December 31, to April 30, 1997 1998 ------------ ------------ REVENUE: Base rents . . . . . . . . . . . . $ 2,399 $ 889 Tenant reimbursements. . . . . . . 339 111 Other. . . . . . . . . . . . . . . 34 1 -------- -------- Total revenue. . . . . . . . . . 2,772 1,001 -------- -------- EXPENSES: Operating and maintenance. . . . . 306 93 Real estate taxes. . . . . . . . . 254 85 Sales tax. . . . . . . . . . . . . 143 53 Management fees. . . . . . . . . . 104 37 Insurance. . . . . . . . . . . . . 25 8 -------- -------- Total expenses . . . . . . . . . 832 276 -------- -------- Revenue in excess of certain expenses $ 1,940 $ 725 ======== ======== See accompanying notes. ORLANDO OFFICE BUILDING PORTFOLIO NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES 1. BUSINESS The accompanying Combined Statements of Revenue and Certain Expenses relate to the combined operations of the Orlando Office Building Portfolio (the "Properties") which are as follows: Approximate Rentable Property Name Location Square Footage - ------------- -------- -------------- University Corporate Center Winter Park, FL 127,800 Metric Plaza Winter Park, FL 32,000 Park Center Orlando, FL 47,200 Sand Lake Tech. Center Orlando, FL 84,100 ------- 291,100 ======= The Properties were acquired by a subsidiary of Banyan Strategic Realty Trust ("Banyan") on April 30, 1998. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Combined Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K/A of Banyan. The accompanying financial statements are not representative of the actual operations of the Properties for the periods presented nor indicative of future operations as certain expenses, primarily depreciation, amortization and interest expense, which may not be comparable to the expenses expected to be incurred by Banyan in future operations of the Properties, have been excluded. The operations of the Properties have been presented on a combined basis because all of the Properties are under common ownership and management. REVENUE AND EXPENSE RECOGNITION Revenue is recognized on a straight-line basis over the terms of the related leases. Expenses are recognized in the period in which they are incurred. USE OF ESTIMATES The preparation of the Combined Statements 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 the combined revenue and expenses during the reporting periods. Actual results could differ from these estimates. 3. RENTALS The Properties have entered into tenant leases that provide for tenants to share in the operating expenses and real estate taxes on a pro rata basis, as defined. 4. LEASES AND SIGNIFICANT TENANTS The Properties had one tenant which accounted for approximately 17% of the total rental income earned for the year ended December 31, 1997 and for the period from January 1, 1998 to April 30, 1998. 5. RELATED PARTY TRANSACTIONS Insurance expense of $25,000 and $8,000 for the year ended December 31, 1997 and the period from January 1, 1998 to April 30, 1998, respectively, represents an allocation by the seller of the Properties. (ii) TOWER LANE BUSINESS PARK ------------------------ Statements of Revenue and Certain Expenses TOWER LANE BUSINESS PARK For the year ended December 31, 1997 and For the period from January 1, 1998 to March 31, 1998 REPORT OF INDEPENDENT AUDITORS The Board of Directors Banyan Strategic Realty Trust We have audited the Statements of Revenue and Certain Expenses of Tower Lane Business Park (the Property) for the year ended December 31, 1997 and for the period from January 1, 1998 to March 31, 1998. The Statements of Revenue and Certain Expenses are the responsibility of the Property's management. Our responsibility is to express an opinion on the Statements of Revenue and Certain Expenses based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statements of Revenue and Certain Expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures made in the Statements 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 Statements of Revenue and Certain Expenses. We believe that our audits provide a reasonable basis for our opinion. The accompanying Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K/A of Banyan Strategic Realty Trust as described in Note 2 and are not intended to be a complete presentation of the Property's revenue and expenses. In our opinion, the Statements of Revenue and Certain Expenses referred to above present fairly, in all material respects, the revenue and certain expenses of the Property described in Note 2 for the year ended December 31, 1997 and for the period from January 1, 1998 to March 31, 1998, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Chicago, Illinois May 21, 1998 TOWER LANE BUSINESS PARK Statements of Revenue and Certain Expenses (Amounts in thousands) Period from January 1, Year Ended 1998 December 31, to March 31, 1997 1998 ------------ ------------ REVENUE: Rental . . . . . . . . . . . . . . $ 792 $ 201 Other. . . . . . . . . . . . . . . 3 7 ----- ----- Total revenue. . . . . . . . . . 795 208 ----- ----- EXPENSES: Real estate taxes. . . . . . . . . 96 24 Other operating. . . . . . . . . . 97 22 Utilities. . . . . . . . . . . . . 22 4 Management fees. . . . . . . . . . 34 9 Insurance. . . . . . . . . . . . . 6 2 ----- ----- Total expenses . . . . . . . . . 255 61 ----- ----- Revenue in excess of certain expenses $ 540 $ 147 ===== ===== See accompanying notes. TOWER LANE BUSINESS PARK NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES 1. BUSINESS The accompanying Statements of Revenue and Certain Expenses relate to the operations of Tower Lane Business Park (the Property), which consists of two one-story multi-tenant office buildings located in Bensenville, Illinois. The Property was acquired by a subsidiary of Banyan Strategic Realty Trust ("Banyan") on April 27, 1998. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Current Report on Form 8-K/A of Banyan. The Statements of Revenue and Certain Expenses are not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily depreciation, amortization and interest, 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 EXPENSE RECOGNITION Revenue is recognized in the period in which it is earned. Expenses are recognized in the period in which they are incurred. USE OF ESTIMATES The preparation of the Statements 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 periods. Actual results could differ from these estimates. 3. RELATED PARTY TRANSACTIONS During the year ended December 31, 1997 and for the period from January 1, 1998 to March 31, 1998, the Property paid an asset management fee to the previous owner of the Property totaling $33,854 and $8,690, respectively. The fee was paid monthly and was based on 4% of gross rental operating receipts. 4. LEASES AND SIGNIFICANT TENANTS The Property had three tenants which accounted for approximately 34% of the total rental income earned for the year ended December 31, 1997 and for the period from January 1, 1998 to March 31, 1998. b) PRO FORMA FINANCIAL INFORMATION BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1998 (Unaudited) This unaudited Pro Forma Condensed Consolidated Balance Sheet is presented assuming that as of March 31, 1998, the Trust acquired Avalon Ridge Business Park ("Avalon Ridge"), Tower Lane Business Park ("Tower Lane") and the four properties in the Orlando Portfolio all as described in Item 2. This unaudited Pro Forma condensed Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been at March 31, 1998, nor does it purport to represent the future financial position of the Trust. BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET March 31, 1998 (Unaudited) (Dollars in thousands)
Avalon Tower Orlando Pro Historical Ridge Lane Portfolio Forma ---------- ------ -------- --------- -------- ASSETS Cash and Cash Equivalents. . . . $ 4,006 $ (21) $ (755) $ 344 $ 3,574 Restricted Cash. . . . . . . . . 1,916 -- -- -- 1,916 Interest and Accounts Receivable 793 -- -- -- 793 -------- ------ ------- ------- -------- 6,715 (21) (755) 344 6,283 -------- ------ ------- ------- -------- Investment in Real Estate, at cost: Land . . . . . . . . . . . . . 27,440 640 1,530 6,817 36,427 Building . . . . . . . . . . . 133,119 3,217 3,570 16,440 156,346 Building Improvements. . . . . 5,102 -- -- -- 5,102 -------- ------ ------- ------- -------- 165,661 3,857 5,100 23,257 197,875 Less: Accumulated Depreciation (7,616) -- -- -- (7,616) -------- ------ ------- ------- -------- 158,045 3,857 5,100 23,257 190,259 -------- ------ ------- ------- -------- Deferred Financing Costs, net. . 1,197 -- -- 130 1,327 Other Assets . . . . . . . . . . 2,590 (4) (10) (285) 2,291 -------- ------ ------- ------- -------- Total Assets . . . . . . . . $168,547 $3,832 $ 4,335 $23,446 $200,160 ======== ====== ======= ======= ======== BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED) Avalon Tower Orlando Pro Historical Ridge Lane Portfolio Forma ---------- ------ -------- --------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Accounts payable and accrued expenses$ 1,901 $ -- $ -- $ 44 $ 1,945 Accrued real estate taxes payable 1,249 2 -- -- 1,251 Mortgage loans payable . . . . . 78,049 3,800 3,675 23,250 108,774 Bonds payable. . . . . . . . . . 21,584 -- -- -- 21,584 Accrued interest payable . . . . 555 -- -- -- 555 Unearned revenue . . . . . . . . 318 2 -- 6 326 Security deposits. . . . . . . . 1,046 28 -- 146 1,220 Distributions payable. . . . . . 1,592 -- -- -- 1,592 -------- ------ ------ ------- -------- Total liabilities. . . . . . . . 106,294 3,832 3,675 23,446 137,247 -------- ------ ------ ------- -------- Minority interest in consolidated partnerships . . . . . . . . . 1,325 -- 660 -- 1,985 SHAREHOLDERS' EQUITY Shares of beneficial interest. . 119,185 -- -- -- 119,185 Accumulated deficit. . . . . . . (50,891) -- -- -- (50,891) Treasury shares at cost. . . . . (7,366) -- -- -- (7,366) -------- ------ ------ ------- -------- Total shareholders' equity . . . 60,928 -- -- -- 60,928 -------- ------ ------ ------- -------- Total liabilities and shareholders' equity . . . . . . . . . . . . $168,547 $3,832 $4,335 $23,446 $200,160 ======== ====== ====== ======= ========
BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND FOR THE YEAR ENDED DECEMBER 31, 1997 (Unaudited) The unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 1998 is presented as if each of the 1998 acquisition properties ("1998 Acquisition Properties") described in Item 2 had been acquired as of January 1, 1998. The unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1997 is presented as if the following had occurred as of January 1, 1997; (a) the acquisition of the 1998 Acquisition Properties; (b) the acquisition and disposition of various properties during 1997; (c) the October, 1997 issuance of 2,192,501 shares of beneficial interest the proceeds of which were used to repay borrowings under a line of credit of $9 million. These unaudited Pro Forma Condensed Consolidated Statements of Operations have been prepared by management of the Trust and do not purport to be indicative of the results which would actually have been obtained had the transactions described above been completed on the dates indicated or which may be obtained in the future. BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 (Unaudited) (Dollars in thousands, except per share data)
1998 Acquisitions (A) ----------------------------------------------------- Pro Peach- Orlando Forma Histor- tree Avalon Avalon Tower Port- Adjust- Pro ical Pointe Center Ridge Lane folio ments Forma -------- -------- -------- -------- -------- -------- -------- -------- Revenue: Rental income. . . . $ 7,554 $ 44 $ 57 $ 11 $ 201 $ 672 $ -- $ 8,539 Operating cost reimbursement. . . 756 -- 3 -- -- 84 -- 843 Miscellaneous tenant income . . . . . . 222 -- -- -- 7 1 -- 230 Income on investments 32 -- -- -- -- -- -- 32 ------- ------- ------- ------- ------- ------- ---- ------- Total revenue. . . . . 8,564 44 60 11 208 757 -- 9,644 ------- ------- ------- ------- ------- ------- ---- ------- Expenses: Property operating . 3,064 7 15 7 61 208 -- (B) 3,362 Interest . . . . . . 1,860 -- -- -- -- -- 647 (C) 2,507 Depreciation and amortization . . . 1,061 -- -- -- -- -- 152 (D) 1,213 General and adminis- trative. . . . . . 1,034 -- -- -- -- -- -- 1,034 Amortization of deferred loan fees and financing costs. . . . . . . 72 -- -- -- -- -- 16 (D) 88 ------- ------- ------- ------- ------- ------- ---- ------- Total Expenses . . . . 7,091 7 15 7 61 208 815 8,204 ------- ------- ------- ------- ------- ------- ---- ------- BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED 1998 Acquisitions (A) ----------------------------------------------------- Pro Peach- Orlando Forma Histor- tree Avalon Avalon Tower Port- Adjust- Pro ical Pointe Center Ridge Lane folio ments Forma -------- -------- -------- -------- -------- -------- -------- -------- Income before minority interest. . . . . . . $ 1,473 $ 37 $ 45 $ 4 $ 147 $ 549 $ (815) $1,440 Minority interest in consolidated partner- ships . . . . . . . . (116) -- -- -- -- -- (39) (155) ------- ------- ------- ------- ------- ------- ------- ------- Net income . . . . . . $ 1,357 $ 37 $ 45 $ 4 $ 147 $ 549 $ (854) $ 1,285 ======= ======= ======= ======= ======= ======= ======= ======= Weighted number of shares outstanding13,251,417 13,251,417 Per Share - Basic and Diluted. . . . . . .$ 0.10 $ 0.10 ========== ========== - ---------------- (A) These adjustments relate to certain properties acquired subsequent to December 31, 1997 and include each property's operations for the period of time from January 1, 1998 through its respective date of acquisition or March 31, 1998 if acquired subsequent to that date. (B) The pro forma adjustment to reflect management fees and insurance expense assuming the Trust's operating cost structure is immaterial. (C) The pro forma adjustment reflects the increase in interest expense relating to acquired properties. These properties, except Tower Lane, were acquired using variable interest rate debt. Avalon Ridge was under construction and did not start operations until March of 1998. Interest for Avalon Ridge was capitalized during its construction period. If the variable interest rate was higher by 0.125% for all variable rate debt, the pro forma interest expense would be $2,521. (D) The pro forma adjustment reflects depreciation for the acquisition properties (calculated using the straight- line method with a 40 year useful life), and amortization of additional loan costs relating to debt for acquisition properties.
BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (Unaudited) (Dollars in thousands, except per share data)
1997 1997 Acquisitions Dispositions Historical (A) (B) ---------- ------------ ------------ Revenue: Rental income. . . . $ 25,370 $ 4,795 $(1,242) Operating cost reimburse- ment . . . . . . . 2,441 112 -- Miscellaneous tenant income . . . . . . 707 161 (170) Income on investments 267 -- -- ------- ------- ------- Total revenue. . . . . 28,785 5,068 (1,412) ------- ------- ------- Expenses: Property operating . 10,689 2,104 (1,162) Interest expense . . 6,447 404 (297) Depreciation and amortization . . . 3,490 -- (222) General and administra- tive . . . . . . . 4,315 -- -- Amortization of deferred loan fees and financing costs. . . . . . . 723 -- (54) Recovery of losses on loans, notes and interest receivable (161) -- -- ------- ------- ------- Total expenses . . . . 25,503 2,508 (1,735) ------- ------- ------- BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED 1997 1997 Dispositions Historical Acquisitions (B) ---------- ------------ ------------ Income before minority interest and income from operations of real estate venture. $ 3,282 $ 2,560 $ 323 Minority interest in consolidated partner- ships. . . . . . . . (590) -- 20 Income (loss) from operations of real estate venture . . . 37 -- (37) Gain on disposition and extraordinary item . 817 -- (881) ------- ------- ------- Net income . . . . . . $ 3,546 $ 2,560 $ (575) ======= ======= ======= Weighted number of shares outstanding - Basic . 11,149,982 Per share - Basic. . . $0.32 ========== Weighted number of shares outstanding - Diluted 11,245,242 Per share - Diluted. . $0.32 ==========
BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
1998 Acquisitions (C) ------------------------------------------------------- Peachtree Avalon Avalon Tower Orlando Pro Forma Pointe Center Ridge Lane Portfolio Adjustments Pro Forma --------- ------- ------- ------- ---------- ----------- --------- Revenue: Rental income. . . . . $ 843 $ 107 $ -- $ 792 $ 2,399 $ -- $ 33,064 Operating cost reimburse- ment . . . . . . . . 43 7 -- -- 339 -- 2,942 Miscellaneous tenant income . . . . . . . 8 -- -- 3 34 -- 743 Income on investments. -- -- -- -- -- -- 267 ------- ------- ------- ------- ------- ------ ------- Total revenue. . . . . . 894 114 -- 795 2,772 -- 37,016 ------- ------- ------- ------- ------- ------ ------- Expenses: Property operating . . 446 27 1 255 832 -- (D) 13,192 Interest expense . . . -- -- -- -- -- 3,407 (E) 9,961 Depreciation and amortization . . . . -- -- -- -- -- 1,147 (F) 4,415 General and administra- tive . . . . . . . . -- -- -- -- -- -- 4,315 Amortization of deferred loan fees and financing costs. . . . . . . . -- -- -- -- -- 143 (F) 812 Recovery of losses on loans, notes and interest receivable. -- -- -- -- -- -- (161) ------- ------- ------- ------- ------- ------ ------- Total expenses . . . . . 446 27 1 255 832 4,697 32,534 ------- ------- ------- ------- ------- ------ ------- BANYAN STRATEGIC REALTY TRUST PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED 1998 Acquisitions ------------------------------------------------------- Peachtree Avalon Avalon Tower Orlando Pro Forma Pointe Center Ridge Lane Portfolio Adjustments Pro Forma --------- ------- ------- ------- ---------- ----------- --------- Income before minority interest and income from operations of real estate venture. . $ 448 $ 87 $ (1) $ 540 $ 1,940 $(4,697) $ 4,482 Minority interest in consolidated partner- ships. . . . . . . . . -- -- -- -- -- (135) (705) Income (loss) from operations of real estate venture . . . . -- -- -- -- -- -- -- Gain on disposition and extraordinary item . . -- -- -- -- -- 64(G) -- ------- ------- ------- ------- ------- ------- ------- Net income . . . . . . . $ 448 $ 87 $ (1) $ 540 $ 1,940 $(4,768) $ 3,777 ======= ======= ======= ======= ======= ======= ======= Weighted number of shares outstanding - Basic . . 13,125,324 Per share - Basic. . . . $ 0.29 ========== Weighted number of shares outstanding - Diluted . 13,584,994 Per share - Diluted. . . $ 0.28 ========== - --------------- (A) These adjustments relate to certain properties acquired subsequent to December 31, 1996 and include each property's operations for the period of time from January 1, 1997 through its respective date of acquisition. (B) The Dispositions column eliminates the historical revenues and expenses of certain properties that were sold prior to December 31, 1997. (C) The 1998 Acquisitions columns reflect the historical revenues and operating expenses of properties acquired after December 31, 1997. (D) The pro forma adjustment to reflect management fees and insurance expense assuming the Trusts operating cost structure is immaterial. (E) The pro forma adjustment reflects the increase in interest expense relating to acquired properties, net of the decrease in interest expense resulting from the repayment of debt utilizing proceeds received from the sale of properties and the issuance of shares. Avalon Ridge was under construction for the whole year of 1997, and the Avalon Center was under construction until August of 1997. Interest for Avalon Center and Avalon Ridge was capitalized during the periods the properties were under construction. The Trust used variable interest rate debt to purchase various of its properties. If the variable rate was higher by 0.125% for all variable rate debt, the pro forma interest expense would be $10,009. (F) The pro forma adjustment reflects the depreciation expense for 1997 and 1998 acquisition properties (calculated using the straight-line method with a 40 year useful life), and amortization of additional loan costs relating to debt for acquisition properties and costs relating to the unsecured corporate financing completed on October 14, 1997. (G) To eliminate extraordinary item on debt refinancing.
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