-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, J6DoX/8sXGxaeZtFlc+FPLEpDTxL4Z4C7mHhG6sIDrdnCxq6S32knpfNICcAlePd CNVRCaK6iMnkeJyeaXprhw== 0000801124-94-000067.txt : 19941026 0000801124-94-000067.hdr.sgml : 19941026 ACCESSION NUMBER: 0000801124-94-000067 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941003 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19941018 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VANGUARD REAL ESTATE FUND I /MA/ CENTRAL INDEX KEY: 0000801124 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 236861048 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10820 FILM NUMBER: 94553886 BUSINESS ADDRESS: STREET 1: P O BOX 2600 VM V34 CITY: VALLEY FORGE STATE: PA ZIP: 19482 BUSINESS PHONE: 6106696289 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 3, 1994 Vanguard Real Estate Fund I, A Sales-Commission-Free Income Properties Fund (Exact name of the registrant as specified in its charter) Massachusetts 0-16785 23-6861048 (State of other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) Vanguard Financial Center, Malvern, 19355 (Address of principal executive offices) (Zip Code) Registrant s telephone number, including area code (610) 669-1000 INDEX Cover Page . . . . . . . . . . . . . . . . . . . . . . - Index. . . . . . . . . . . . . . . . . . . . . . . . . 1 Item No. Item 1. Change in Control of Registrant . . . . . . . 2 Item 2. Acquisition or Disposition of Assets . . . . . 2 Item 3. Bankruptcy or Receivership . . . . . . . . . . 2 Item 4. Changes in Registrant's Certifying Accountant. 2 Item 5. Other Events . . . . . . . . . . . . . . . . . 2 Item 6. Resignation of Registrant's Directors. . . . . 2 Item 7. Financial Statements and Exhibits Pro Forma Statement of Operations, year ended December 31, 1993 . . . . . . . . . . . . . . .3 Notes to Pro Forma Statement of Operations, year ended December 31, 1993 . . . . . . . . . . . .4 Pro Forma Statement of Operations, six-months ended June 30, 1994 . . . . . . . . . . . . . . . . .5 Notes to Pro Forma Statement of Operations, six-months ended June 30, 1994 . . . . . . . . . . . . . .6 Pro Forma Balance Sheet at June 30, 1994 . . . .7 Notes to pro forma Balance Sheet at June 30, 1994. . . . . . . . . . . . . . . . . . . . . .8 Item 8. Change in Fiscal Year . . . . . . . . . . . . .2 Signatures . . . . . . . . . . . . . . . . . . . . . . 9 Item 1. Change in Control of Registrant None Item 2. Acquisition or Disposition of Assets On October 3, 1994, Vanguard Real Estate Fund I (the Fund ) sold the Seattle Industrial Portfolio ("Seattle") for $31,850,000 to Spieker Properties, Inc. Seattle was purchased in January 1988 for $21,800,000. In accordance with the terms of the advisory agreement between the Fund and Aldrich, Eastman and Waltch ("AEW"), in 1988 the Fund paid an acquisition fee of $436,000, representing 2% of the purchase price, and in the fourth quarter of 1994 will pay a disposition fee of approximately $614,000, representing 2% of the net proceeds, in connection with the sale of the Seattle Portfolio. The Fund also, at closing, paid a sales incentive fee of $520,000 to Seattle's property manager. The Seattle property manager is a wholly-owned subsidiary of the purchaser. The Fund expects to recognize a gain of approximately $9,250,000 in the fourth quarter of 1994 on the sale of Seattle. Item 3. Bankruptcy or Receivership None Item 4. Changes in Registrant's Certifying Accountant None Item 5. Other Events None Item 6. Resignation of Registrant's Directors None Item 7. Financial Statements and Exhibits Unaudited pro forma statements of operations for the year ended December 31, 1993 and for the six-months ended June 30, 1994, respectively, and an unaudited pro forma balance sheet at June 30, 1994, are filed as part of this report. Item 8. Change in Fiscal Year None 2 The following unaudited pro forma statement of operations presents the results of operations of Vanguard Real Estate Fund I ("VREF I") for the year ended December 31, 1993, as if the October 3, 1994 disposition of the Seattle Industrials Portfolio ("Seattle"), the August 17, 1994 disposition of the Arden Hills building ("Arden Hills") and the 1993 dispositions of Carmel Office Park ("Carmel") and VREF I's Citadel II investment ("Citadel II") each occurred on January 1, 1993. Such pro forma information is based upon (i) the pro forma results of operations of VREF I for the year ended December 31, 1993, giving effect to the dispositions of Arden Hills, Carmel and Citadel II as if such dispositions had occurred on January 1, 1993, as previously reported in VREF I's current report on Form 8-K dated August 17, 1994 and (ii) the historical results of operations for Seattle for the year ended December 31, 1993, giving effect to the pro forma adjustments relating only to those items which will have a continuing impact on the Fund's Statement of Operations described below. This statement does not purport to be indicative of results of operations that actually would have resulted if VREF I had disposed of Seattle, Arden Hills, Carmel, and Citadel II on January 1, 1993. This statement should be read in conjunction with the financial statements of VREF I included in its 1993 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and the pro forma financial statements included in VREF I's Current Report on Form 8-K dated August 17, 1994. VANGUARD REAL ESTATE FUND I, A SALES-COMMISSION-FREE INCOME PROPERTIES FUND PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993 (5) (Unaudited) Pro Forma Results as Previously Reported Pro Forma in Form 8-K dated Adjustments Pro Forma August 17, 1994 Seattle Results (000) (000) (000) REAL ESTATE INCOME Rental Income $5,336 $(3,722)(1) 1,614 Mortgage Interest Income 1,279 - 1,279 Net Income from In-Substance Foreclosed Assets 1,584 - 1,584 ------ ------- ----- 8,199 (3,722) 4,477 REAL ESTATE EXPENSES Mortgage Interest Expense 252 - 252 Real Estate Taxes 419 (240)(1) 179 Property Operating Expenses 568 (310)(1) 258 Depreciation and Amortization 911 (472)(1) 439 Provision for Possible Losses 2,500 - 2,500 ------ ------- ----- 4,650 (1,022) 3,628 INCOME FROM REAL ESTATE 3,549 (2,700) 849 INVESTMENT INCOME FROM SHORT-TERM INVESTMENTS 198 - (2) 198 ----- ------- ----- 3,747 (2,700) 1,047 ADMINISTRATIVE EXPENSES Investment Advisory Fee 326 (135)(3) 191 Administrative Fee 278 (122)(4) 156 Other Administrative Expenses 357 - 357 ----- -------- ----- 961 (257) 704 NET INCOME $2,786 $(2,443) $343 Weighted Average Shares Outstanding 11,039,590 11,039,590 Net Income per Share $0.25 $0.03 The accompanying notes are an integral part of this statement. 3 NOTES TO PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1993 (1) To record decreases in rental income, real estate taxes, property operating expenses, and depreciation and amortization based on the historical operating results of Seattle included in VREF I's historical results of operations for the year ended December 31, 1993. (2) The Fund currently anticipates that the net proceeds of the Seattle transaction will be paid out with its year-end 1994 distribution to shareholders. For purposes of pro forma presentation of the Fund s operating results for the year ended December 31, 1993, Fund management has assumed that the net proceeds made available from the Seattle transaction was immediately distributed to shareholders on January 1, 1993, and, accordingly, no investment earnings have been imputed on the Seattle net proceeds. (3) To record a decrease in the investment advisory fee based upon the decrease in real estate assets held by the Fund. (4) To record a decrease in the administrative fee based upon the decrease in assets held by the Fund. (5) The estimated $9,250,000 gain on the sale of Seattle has not been included in the pro forma statement of operations for the year ended December 31, 1993 since such gain is a nonrecurring gain after income from continuing operations. Pursuant to the Fund's prospectus, the Fund may not reinvest the net proceeds received from sales in additional real estate investments after December 31, 1993. If cash available for investment , giving effect to Seattle, Arden Hills and Carmel as if they had been disposed of on January 1, 1993, was assumed to have been invested in short-term money market instruments (it is, in the opinion of the Fund's management, impracticable to assume that a suitable real estate investment consistent with the Fund's investment objectives would have been identified for the investment of such available cash) and not assumed to have been distributed on January 1, 1993, the Fund would have earned approximately $1,471,000 in short-term investment income, using an average interest rate of 3.0%, on a pro forma basis for the year ended December 31, 1993, resulting in investment income from short-term investments of $1,669,000. 4 The following unaudited pro forma statement of operations presents the results of operations of Vanguard Real Estate Fund I ("VREF I") for the six months ended June 30, 1994, as if the October 3, 1994 disposition of the Seattle Industrials Portfolio ("Seattle"), the August 17, 1994 disposition of the Arden Hills building ("Arden Hills") and the 1993 dispositions of Carmel Office Park ("Carmel") and VREF I's Citadel II investment ("Citadel") each occurred on January 1, 1993. Such pro forma information is based upon (i) the pro forma results of operations of VREF I for the six months ended June 30, 1994, giving effect to the dispositions of Arden Hills, Carmel and Citadel II as if such dispositions had occurred on January 1, 1993, as previously reported in VREF I's current report on Form 8-K dated August 17, 1994 and (ii) the historical results of operations for Seattle for the year ended December 31, 1993, giving effect to the pro forma adjustments relating only to those items which will have a continuing impact on the Fund's Statement of Operations described below. This statement does not purport to be indicative of results of operations that actually would have resulted if VREF I had disposed of Seattle, Arden Hills, Carmel, and Citadel II on January 1, 1993. This statement should be read in conjunction with the financial statements of VREF I included in its 1993 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, and the pro forma financial statements included in VREF I's Current Report on Form 8-K dated August 17, 1994. VANGUARD REAL ESTATE FUND I, A SALES-COMMISSION-FREE INCOME PROPERTIES FUND PRO FORMA STATEMENT OF OPERATIONS FOR THE SIX-MONTHS ENDED JUNE 30, 1994 (5) (Unaudited) Pro Forma Results as Previously Reported Pro Forma in Form 8-K dated Adjustments Pro Forma August 17, 1994 Seattle Results (000) (000) (000) REAL ESTATE INCOME Rental Income $3,165 $(1,874)(1) $1,291 Mortgage Interest Income 521 - 521 Net Income from In-Substance Foreclosed Assets 341 - 341 ------ -------- ----- 4,027 (1,874) 2,153 REAL ESTATE EXPENSES Mortgage Interest Expense 123 - 123 Real Estate Taxes 261 (125)(1) 136 Property Operating Expenses 470 (149)(1) 321 Depreciation and Amortization 517 (239)(1) 278 Provision for Possible Losses/(Charge Offs) (290) - (290) ------ -------- ----- 1,081 (513) 568 INCOME FROM REAL ESTATE 2,946 (1,361) 1,585 INVESTMENT INCOME FROM SHORT-TERM INVESTMENTS 157 - (2) 157 ------ -------- ------ 3,103 (1,361) 1,742 ADMINISTRATIVE EXPENSES Investment Advisory Fee 159 (68)(3) 91 Administrative Fee 137 (61)(4) 76 Other Administrative Expenses 163 - 163 ------ -------- ----- 459 (129) 330 NET INCOME $2,644 $(1,232) $1,412 ====== ======== ====== Weighted Average Shares Outstanding 11,019,978 11,019,978 ========= ========== Net Income per Share $0.24 $0.13 The accompanying notes are an integral part of this statement. 5 NOTES TO PRO FORMA STATEMENT OF OPERATIONS FOR THE SIX-MONTHS ENDED JUNE 30, 1994 (1) To record decreases in rental income, real estate taxes, property operating expenses, and depreciation and amortization based on the historical operating results of Seattle included in VREF I's historical results of operations for the six-months ended June 30, 1994. (2) The Fund currently anticipates that the net proceeds of the Seattle transaction will be paid out with its year-end 1994 distribution to shareholders. For purposes of pro forma presentation of the Fund's operating results for the six-months ended June 30, 1994, Fund management has assumed that the net proceeds made available from this transaction were immediately distributed to shareholders on January 1, 1993, and, accordingly, no investment earnings have been imputed on the Seattle net proceeds. (3) To record a decrease in the investment advisory fee based upon the decrease in real estate assets held by the Fund. (4) To record a decrease in the administrative fee based upon a decrease in assets, resulting from the assumed January 1, 1993 distribution to shareholders of the net proceeds of the Seattle transaction, held by the Fund. (5) Pursuant to the Fund s prospectus, the Fund may not reinvest the net proceeds received from sales in additional real estate investments after December 31, 1993. If cash available for investment, giving effect to Seattle and Arden Hills as if they had been disposed of on January 1, 1993, were assumed to have been invested in short-term money market instruments for the first six months of 1994, and not assumed to have been distributed on January 1, 1993, the Fund would have earned approximately $534,000 in short-term investment income, using an average interest rate of 3.0%, on a pro forma basis for the six-months ended June 30, 1994, resulting in investment income from short-term investments of $691,000. 6 The following unaudited pro forma balance sheet presents the financial position of Vanguard Real Estate Fund I ("VREF I") as of June 30, 1994 as if the disposition of the Seattle Industrial Portfolio ("Seattle") and the August 17, 1994 disposition of VREF I's Arden Hills building had occurred as of June 30, 1994. Such pro forma information is based upon (i) the pro forma balance sheet of VREF I as of June 30, 1994, giving effect to the sale of Arden Hills as if such sale had occurred on June 30, 1994, as previously reported in VREF I's current report on Form 8-K dated August 17, 1994 and (ii) the historical balance sheet data of Seattle as of that date, giving effect to the pro forma adjustments described below. This pro forma financial information should be read in conjunction with the financial statements of VREF I included in its 1993 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and the pro forma financial information included in VREF I's Current Report on Form 8-K dated August 17, 1994. VANGUARD REAL ESTATE FUND I, A SALES-COMMISSION-FREE INCOME PROPERTIES FUND PRO FORMA BALANCE SHEET JUNE 30, 1994 (Unaudited) Pro Forma Balance Sheet as Previously Reported in Form Pro Forma 8-K dated Adjustments Pro Forma August 17, 1994 Seattle Results (000) (000) (000) ASSETS Investments in Real Estate: Direct Ownership Investments: Land $14,896 $ (8,250)(1) $6,646 Building and Improvements 36,201 (14,844)(1) 21,357 ------- --------- ------ 51,097 (23,094) 28,003 Less - Accumulated Depre- ciation 4,197 (2,439)(1) 1,758 ------- -------- ------ 46,900 (20,655) 26,245 Mortgage Loans Receivable 10,646 - 10,646 ------- -------- ------ Net Investment Portfolio 57,546 (20,655) 36,891 Short - Term Investments: Marketable Securities - REMICs 2,202 - 2,202 Vanguard Money Market Reserves - Prime Portfolio 7,416 30,664 (2) 38,080 Temporary Cash Investments 7,496 - 7,496 Other Assets 1,181 (284)(1) 897 ------- ------- ------ TOTAL ASSETS $75,841 $ 9,725 $85,566 ======= ======== ======= LIABILITIES AND SHAREHOLDERS' EQUITY Mortgage Loan $ 2,431 - $2,431 Due to Affiliates 272 614 (3) 886 Dividends Payable 1,653 - 1,653 Other Liabilities 423 (135)(1) 288 ------- ------- ------ TOTAL LIABILITIES 4,779 479 5,258 Shares of Beneficial Interest, without par value, unlimited shares authorized 80,608 - 80,608 Accumulated Distributions in Excess of Net Income (9,546) 9,246(4) (300) ------- ------- ------ TOTAL SHAREHOLDERS' EQUITY 71,062 9,246 80,308 ------- ------- ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $75,841 $ 9,725 $85,566 ======= ======== ======= The accompanying notes are an integral part of this statement. 7 NOTES TO JUNE 30, 1994 PRO FORMA BALANCE SHEET (1)To record the reduction in land, building and improvements, accumulated depreciation, other assets and other liabilities based on the historical financial position of Seattle included in VREF I's historical balance sheet at June 30, 1994. (2)To record the increase in short-term investments resulting from the investment of the estimated net proceeds, prior to the 2% disposition fee due the Fund's Adviser, of the Seattle disposition. The Fund currently anticipates that the net proceeds of the Seattle transaction will be paid out with its year-end 1994 distribution to shareholders. (3) To record the 2% disposition fee due the Fund's Adviser. (4) To record the estimated gain on the disposition of Seattle. 8 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 thereunto duly authorized. VANGUARD REAL ESTATE FUND I A SALES-COMMISSION-FREE INCOME PROPERTIES FUND DATE: ______________ BY: _______________________________ Ralph K. Packard Vice President & Controller 9 -----END PRIVACY-ENHANCED MESSAGE-----