-----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, VxVAdXGZ8U1O5VffKe3LlPmq6Km+zQ7AyN9lIMRnmHDZtpEqixZAWA/xqhZwsHWx S0xYobULXGWeqZvdWrBJXA== 0000845613-98-000006.txt : 19981203 0000845613-98-000006.hdr.sgml : 19981203 ACCESSION NUMBER: 0000845613-98-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980701 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN SELECT REALTY TRUST CENTRAL INDEX KEY: 0000845613 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 943095938 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12708 FILM NUMBER: 98762996 BUSINESS ADDRESS: STREET 1: 1800 GATEWAY DR - STE 200 CITY: SAN MATEO STATE: CA ZIP: 94404 BUSINESS PHONE: 4153122000 MAIL ADDRESS: STREET 1: P O BOX 7777 CITY: SAN MATEO STATE: CA ZIP: 94403-7777 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN SELECT REAL ESTATE INCOME FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN CALIFORNIA REAL ESTATE FUND DATE OF NAME CHANGE: 19890307 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported) JULY 1, 1998 FRANKLIN SELECT REALTY TRUST (Exact Name of Registrant as Specified in its Charter) CALIFORNIA 1-12708 94-0395938 State or other jurisdiction Commission File IRS Employer of incorporation Number Identification Number 2000 ALAMEDA DE LAS PULGAS, SAN MATEO, CA 94404 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (650) 312-3000 ITEM 2: DISPOSITION OF ASSETS. MIRA LOMA SHOPPING CENTER - RENO, NEVADA GLEN COVE SHOPPING CENTER - VALLEJO, CALIFORNIA On November 17, 1998 Franklin Select Realty Trust (the "Company") sold the Mira Loma Shopping Center, located in Reno, Nevada, and the Glen Cove Shopping Center located in Vallejo, California (the "Properties"). The Properties were sold for a gross price of $15.4 million under an installment sale contract in which $7.7 million was paid to the Company at closing. The balance of the sale price will be paid to the Company on January 6, 1999 under the terms of a note receivable. The note bears interest at 8% annually and requires interest-only payments of $51,333 per month. Approximately $800,000 of the net proceeds will be used to repay the outstanding balance of the Company's line of credit, and the remainder will be held by the Company for general corporate purposes. The unaffiliated buyer was Pan Pacific Retail Properties, Inc ("Pan Pacific"). Gain from sale of the Properties was approximately $0.9 million. There was no material relationship between Pan Pacific and the Company or any of the affiliates, directors or officers of the Company or Franklin Properties, Inc. (the "Advisor") or any associate of any director or officer of the Company or the Advisor. CARMEL MOUNTAIN GATEWAY PLAZA - SAN DIEGO, CALIFORNIA On July 1, 1998, the Company sold the Carmel Mountain Gateway Plaza, located in San Diego, California. The property was sold for cash at a gross price of $8.9 million. Approximately $8.6 million of the net proceeds were used to repay debt, and remainder was held by the Company for general corporate purposes. The unaffiliated buyer was the Ben Tipp Testamentary Trust ("Tipp"). Gain from sale of the property was approximately $382,000. There was no material relationship between Tipp and the Company or any of the affiliates, directors or officers of the Company or the Advisor or any associate of any director or officer of the Company or the Advisor. Page 1 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS PRO FORMA FINANCIAL INFORMATION Index Page 3 Unaudited Pro Forma Balance Sheet as of September 30, 1998 4 Unaudited Pro Forma Statement of Income for the 9 months ended September 30, 1998 5 Unaudited Pro Forma Statement of Income for the year ended December 31, 1998 6 Notes to the Pro Forma Financial Statements Page 2 Unaudited Pro Forma Balance Sheet as of September 30, 1998 Franklin Select Realty Trust (IN THOUSANDS) Historical Adjustments Pro Forma Real estate, net $127,278 $(14,013) A $113,265 Cash and cash equivalents 2,893 - 2,893 Mortgage-backed securities, 412 6,912 B 7,324 available for sale Note receivable - 7,500 B 7,500 Deferred rent receivable 1,790 (240) C 1,550 Deferred costs and other 2,504 (168) C 2,336 - ------------------------------------------------------------------------ Total assets 134,877 (9) 134,868 - ------------------------------------------------------------------------ Notes and bonds payable 27,694 (800) D 26,894 Tenant deposits, accounts payable and 2,003 (73) E 1,930 accrued expenses Distributions payable 1,642 - 1,642 - ------------------------------------------------------------------------ Total liabilities 31,339 (873) 30,466 - ------------------------------------------------------------------------ Minority interest 9,200 - 9,200 Stockholders' equity Common stock A 103,161 - 103,161 Common stock B 6,294 - 6,294 Unrealized loss (30) - (30) Accumulated distribution over net (15,087) 864 (14,223) income - ------------------------------------------------------------------------ Total stockholders' equity 94,338 864 95,202 - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ Total liabilities and $134,877 $(9) $134,868 stockholders' equity - ------------------------------------------------------------------------ The accompanying notes are an integral part of these pro forma financial statements. Page 3 Unaudited Pro Forma Statement of Income for the 9 months ended September 30, 1998 Franklin Select Realty Trust (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Historical Adjustments Pro Forma Revenue Rent $13,619 $(2,003) F $11,616 Interest, dividends and other 145 693 G 838 - ------------------------------------------------------------------------ Total revenue 13,764 (1,310) 12,454 - ------------------------------------------------------------------------ Expenses Property operating 3,074 (333) H 2,741 Interest 2,308 (472) I 1,836 Related party 1,125 (168) H 957 General and administrative 844 - 844 Depreciation and amortization 3,016 (380) J 2,636 - ------------------------------------------------------------------------ Total expenses 10,367 (1,353) 9,014 - ------------------------------------------------------------------------ Operating income before gain on sale and minority interest 3,397 43 3,440 Gain on sale 552 (382) K 170 Operating income before minority 3,949 (339) 3,610 interest Minority interest 515 - 515 ======================================================================== Net income $ 3,434 $(339) $3,095 ======================================================================== Net income per share $0.28 $(0.03) $0.25 Weighted average shares 12,250 12,250 outstanding The accompanying notes are an integral part of these pro forma financial statements. Page 4 Unaudited Pro Forma Statement of Income for the year ended December 31, 1997 Franklin Select Realty Trust (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) Historical Adjustments Pro Forma Revenue Rent $17,522 $(3,049) F $14,473 Interest, dividends and other 204 1,046 G 1,250 - ------------------------------------------------------------------------ Total revenue 17,726 (2,003) 15,723 - ------------------------------------------------------------------------ Expenses Property operating 4,036 (563) H 3,473 Interest 2,773 (716) I 2,057 Related party 1,454 (243) H 1,211 General and administrative 648 - 648 Depreciation and amortization 4,003 (556) J 3,447 - ------------------------------------------------------------------------ Total expenses 12,914 (2,078) 10,836 - ------------------------------------------------------------------------ Operating income before minority 4,812 76 4,888 interest Minority interest 644 - 644 ======================================================================== Net income $4,168 $76 $4,244 ======================================================================== Net income per share $0.34 $0.01 $0.35 Weighted average shares 12,250 12,250 outstanding The accompanying notes are an integral part of these pro forma financial statements. Page 5 FRANKLIN SELECT REALTY TRUST NOTES TO PRO FORMA FINANCIAL STATEMENTS (Unaudited) 1 Basis of Presentation The pro forma financial statements of Franklin Select Realty Trust (the "Company"), which are unaudited, have been prepared based on the historical financial statements of the Company. In 1998, the Company sold its three retail properties - Carmel Mountain Gateway Plaza ("Carmel"), Mira Loma Shopping Center ("Mira Loma") and Glen Cove Center ("Glen Cove")(collectively, "the Properties"). The sale of Carmel was completed in July 1998 and the sale of Mira Loma and Glen Cove was completed in November 1998. The accompanying pro forma balance sheet as of September 30, 1998, has been prepared as if the sale of Mira Loma and Glen Cove had occurred on September 30,1998. The accompanying pro forma statements of operations for the nine months ended September 30, 1998 and the year ended December 31, 1997 have been prepared as if the sale of the Properties had occurred on January 1, 1997. In management's opinion, all adjustments necessary to reflect the effects of these transactions have been made. The pro forma financial statements should be read in conjunction with the historical financial statements of the Company. The pro forma financial statements are not necessarily indicative of what the financial condition or the actual results of operations of the Company would have been as of and for the nine months ended September 30, 1998, or for the year ended December 31, 1997, had the sales occurred on January 1, 1997, nor do they purport to represent the financial condition or results of operations for future periods. 2 Pro Forma Balance Sheet Adjustments Adjustments have been made to reflect the sale of the Properties, giving effect to the following items: A The carrying value of Mira Loma and Glen Cove. B The net proceeds from the sale of Mira Loma and Glen Cove, less the amount used to pay down the Company's line of credit. The terms of the sale provided for a note receivable of $7.5 million and cash of $7.7 million. It is management's current intention to invest the cash proceeds in mortgage-backed securities. C Note receivable relating to Mira Loma and Glen Cove, bearing interest at 8% per annum with full settlement due on January 6, 1999. D Proceeds from the sale of Mira Loma and Glen Cove used to pay down the Company's debt. E Payables relating to Mira Loma and Glen Cove. Page 6 3. Pro Forma Income Statement Adjustments Adjustments have been made to reflect the sale of the Properties, giving effect to the following items: F Rental revenue from the Properties. G Interest income from the investment of the net proceeds at 6% per annum for cash invested in mortgage-backed securities and 8% per annum for interest on the note receivable for a period of 50 days. H Operating expenses relating to the management and operation of the Properties. I Interest expense on notes and bonds payable secured on the Properties that were repaid from the net proceeds, using the weighted average interest rates paid on debt during the periods under review. J Depreciation and amortization on the Properties. K Gain on sale related to the sale of Carmel that was recorded in July 1998. Page 7 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 heretofore duly authorized. Dated: December 2, 1998 Franklin Select Realty Trust BY: /s/ David P. Goss David P. Goss President -----END PRIVACY-ENHANCED MESSAGE-----