-----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, K3QYEF5XowtMdpzlLw3JS7OBlTvB42p1O7ikA+wUZfU4AInOB8Y9GQXpYGiiVv3T orPeJCxVFUGZ9jOBxki4NQ== 0000950123-97-009688.txt : 19971118 0000950123-97-009688.hdr.sgml : 19971118 ACCESSION NUMBER: 0000950123-97-009688 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970501 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971117 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEXINGTON CORPORATE PROPERTIES INC CENTRAL INDEX KEY: 0000910108 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 133717318 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-12386 FILM NUMBER: 97722311 BUSINESS ADDRESS: STREET 1: 355 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126927260 MAIL ADDRESS: STREET 1: 355 LEXINGTON AVE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 8-K/A 1 LEXINGTON CORPORATE PROPERTIES, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K/A Amendment No. 1 to 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): May 1, 1997 LEXINGTON CORPORATE PROPERTIES, INC. (Exact Name of Registrant as specified in its charter) Maryland 1-12386 13-3717318 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 355 Lexington Avenue, New York, New York 10017 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 692-7260 Not Applicable (Former name or former address, if changed since last report) 2 Item 2. Acquisition or Disposition of Assets. On May 1, 1997, Lexington Corporate Properties, Inc., a real estate investment trust organized under the laws of the State of Maryland (the "Registrant"), acquired a property in Rancho Bernardo, California (the "Rancho Bernardo Property") for $7,725,000. The Rancho Bernardo Property contains 65,755 net rentable square feet and is leased to Cymer, Inc. under the terms of a net lease which expires on December 31, 2009. The lease provides for annual rental payments of $736,872, which will increase to $755,294 on June 1, 1997 and by approximately 5% every two years thereafter. The average annual net rent payable during the remaining lease term is $860,419, or approximately 11.1% of the purchase price. Additionally, the Registrant has entered into a definitive agreement to acquire, through a merger, Corporate Realty Income Trust I ("CRIT"). As a result of the merger, the Registrant will acquire three properties totaling approximately 560,000 square feet. The transaction will be structured as a tax-free stock merger, and the merger consideration will consist of approximately $17.15 million of the Registrant's common stock to be issued to CRIT shareholders, subject to certain adjustments, and a cash payment of up to $1.0 million. The transaction is expected to close in 1997, subject to approval by CRIT's shareholders and the satisfaction of other customary closing conditions. Upon completion of the merger, CRIT will cease to exist and the Registrant will be the surviving entity. CRIT was formed as a Massachusetts business trust on June 27, 1989. CRIT, which qualified as a real estate investment trust in 1990, owns three, triple-net-leased properties (the "Properties"). The first property is a 288,000 square foot Class A office building, leased to Circuit City Stores, Inc. as their corporate headquarters in Richmond, Virginia ("Circuit City Property"). The second property is a 148,000 square foot regional assembly facility, which is leased to Dana Corporation in Gordonsville, Tennessee ("Dana Property"). The third property is a 124,000 square foot regional distribution facility, which is leased to Allegiance Healthcare Corporation in Bessemer, Alabama ("Allegiance Property"). The Properties are currently encumbered by mortgage debt. If the merger were to occur on September 1, 1997, the Properties are expected to have the following debt terms and outstanding balances: the Circuit City Property mortgage, maturing March 1, 2000, is expected to have a mortgage balance of $13.1 million outstanding and an interest rate of 8.875%; the Dana Property mortgage, maturing October 1, 2002, is expected to have a mortgage balance of $1.3 million outstanding and an interest rate of 9.5%; and the Allegiance Property mortgage, maturing September 1, 2001, is expected to have a mortgage balance of $1.0 million outstanding and an interest rate of 9.5%. Item 7. Financial Statements, Pro Forma Information and Exhibits. (a) Financial statements of properties acquired. Corporate Realty Income Trust I Audited Financial Statements for the year ended December 31, 1996. 3 (b)Pro forma financial information. The following unaudited pro forma consolidated financial statements of the Registrant for the year ended December 31, 1996 and as of and for the three months ended March 31, 1997 have been prepared from the historical consolidated financial statements of the Registrant, for the year ended December 31, 1996 and as of and for the three months ended, as adjusted to give effect to the following pro forma adjustments: (i) acquisitions consummated since January 1, 1996; (ii) the pending acquisitions of Corporate Realty Income Trust I and a property located in Phoenix, Arizona leased to Bull HN Information Systems the ("Pending Acquisitions"); (iii) the refinancing on May 30, 1997 of the property in Salt Lake City leased to Northwest Pipeline Corporation (the "Salt Lake City Property") (the "Salt Lake City Refinancing"); (iv) the issuance and sale of a total of 1,325,000 shares of convertible preferred stock; (v) the possible sale of the Ross Stores Newark Property described in the Registrant's filing on Form 8-K dated February 4, 1997 and (vi) acquisitions consummated in 1996, as such pro forma financial statements relate to 1996. The accompanying pro forma statements of income for the year ended December 31, 1996 and the three months ended March 31, 1997 have been prepared as if the events had been consummated as of January 1, 1996 and were carried forward through March 31, 1997. The accompanying pro forma balance sheet has been prepared as if these events had been consummated on March 31, 1997. The Registrant has not completed all evaluations necessary to finalize the purchase price allocations for the Pending Acquisitions and, accordingly, actual adjustments that reflect other evaluations of the purchased assets and assumed liabilities may differ from the pro forma adjustments presented herein. There can be no assurance that the Pending Acquisitions or the sale of the Ross Stores Newark Property will be consummated, or, if consummated, as to the terms or timing thereof. The unaudited pro forma financial statements do not purport to be indicative of what the results of the Registrant would have been had the transactions been completed on the dates assumed, nor is such financial data necessarily indicative of the results of operations of the Registrant that may exist in the future. The unaudited pro forma financial statements must be read in conjunction with the notes thereto and with the historical consolidated financial statements of the Registrant. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 (ALL AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ADJUSTMENTS (1) PRO FORMA ---------- --------------- --------- (in thousands, except per share data) Revenue: Rental $31,244 $12,754 $43,998 Interest and other 431 39 470 ------- ------- ------- Total revenues 31,675 12,793 44,468 Expenses: Interest expense 12,818 4,526 17,344 Depreciation 7,627 3,267 10,894 Amortization of deferred expenses 619 98 717 Property operating expenses 686 79 765 General and administrative expenses 3,125 173 3,298 Transactional expenses 644 -- 644 ------- ------- ------- Total expenses 25,519 8,143 33,662 ------- ------- ------- Income before minority interests 6,156 4,650 10,806 Minority interests 690 908(2) 1,598 ------- ------- ------- Net income $ 5,466 $ 3,742 $ 9,208 ======= ======= ======= Per share data (3) Net income Primary $ 0.58 $ 0.68 Fully diluted 0.58 0.66 Weighted average common shares outstanding Primary 9,393 1,751 11,144 Fully diluted 9,393 4,377 13,770
4 NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA) (1) This column reflects (i) the addition of historical results of operations for the period from January 1 to the respective acquisition dates for the properties acquired by the Company during 1996 and for a 12-month period for properties acquired since January 1, 1997 and for the Pending Acquisitions; (ii) the elimination of the results of operations of the Ross Stores Newark Property as if the sale had taken place on January 1, 1996; and (iii) the Salt Lake City Refinancing. The results of operations for properties acquired during 1996, from their respective acquisition dates through December 31, 1996 are included in the Company's historical 1996 consolidated statement of income. The results of operations consist principally of rental revenue, interest expense and depreciation expense. Rental revenue in these pro forma financial statements (both historical and pro forma) is generated from leases that are "net leases", under which the tenant is responsible for substantially all costs of real estate taxes, insurance and ordinary maintenance. Pro forma rental income represents straight-line rent as provided by GAAP, calculated as the difference between the cash rent paid under the lease and the average rent due over the noncancellable term of the lease. The pro forma revenue adjustment consists of the effect of the following transactions as if they had occurred on January 1, 1996. The adjustment for depreciation expense relates to the depreciation from purchase price adjustments as if the acquisitions described above had occurred on January 1, 1996.
Rental Revenue Depreciation ------- ------------ CRIT Acquisition $ 3,557 $ 922 Acquisition of the Salt Lake City Property 3,264 824 Acquisition of Properties leased to Toys "R" Us, Inc. (the "Toys Properties") and Liberty House, Inc. 2,595 840 Exel Pennsylvania Properties Acquisition 2,949 601 Bull Information Systems Acquisition 1,023 243 Other acquisitions 2,608 563 Sale of Ross Stores Newark Property (3,242) (726) -------- ------- $ 12,754 $ 3,267 ======== =======
Applicable pro forma interest expense is calculated based on annual interest rates on the respective debt as of the acquisition dates. The pro forma interest expense adjustments includes (i) the impact of the Salt Lake City Refinancing; (ii) paydown of the Credit Facility with proceeds from the sale of the Ross Stores Newark Property; (iii) repayment of the Toys Properties debt with proceeds from the issuance of Convertible Preferred Stock; and (iv) the impact of interest on acquisitions described above as if they had occurred on January 1, 1996. (2) This amount represents the minority interest in the net income of LCIF due to the issuance of OP Units in the acquisition of the Salt Lake City Property, the acquisition of the Toys Properties, and the acquisition of the Exel Pennsylvania Properties. (3) Primary net income per share is computed by dividing net income (reduced by preferred dividends) by the weighted average number of common and diluted common equivalent shares outstanding during the period. Fully diluted net income per share amounts are similarly computed but include the effect when dilutive of the Company's other potentially dilutive securities. Fully dilutive net income excludes preferred dividends and is increased by minority interest resulting from the assumed conversion of the limited operating partnership units. The Convertible Preferred Stock and Exchangeable Notes are excluded from the pro forma computations due to their anti-dilutive effect during the period 5 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1997 (ALL AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ADJUSTMENTS PRO FORMA ---------- ----------- --------- (in thousands, except per share data) Revenue: Rental $ 9,699 $1,242(1) $10,941 Interest and other 125 7 132 ------- ------ ------- Total revenues 9,824 1,249 11,073 Expenses: Interest expense 4,240 116(1) 4,356 Depreciation 2,461 298(1) 2,759 Amortization of deferred expense 194 115 309 Property operating expenses 218 -- 218 General and administrative expenses 870 -- 870 Other expenses 69 -- 69 ------- ------ ------- Total expenses 8,052 529 8,581 ------- ------ ------- Income before minority interests 1,772 720 2,492 Minority interests 262 98(2) 360 ------- ------ ------- Net income $ 1,510 $ 622 $ 2,132 ======= ====== ======= Per share data: (3) Net income Primary $ 0.14 $ 0.15 Fully diluted $ 0.13 $ 0.15 Weighted average common shares outstanding Primary 9,932 1,319 11,251 Fully diluted 11,967 1,909 13,876
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1997 (ALL AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) Real estate at cost $369,740 $ 20,731(4) $390,471 Less accumulated depreciation 53,803 (6,884)(5) 46,919 -------- -------- -------- Real estate, net 315,937 27,615 343,552 Other assets 24,184 (4,473)(6) 19,711 -------- -------- -------- Total assets $340,121 $ 23,142 $363,263 ======== ======== Mortgage loans payable (including accrued interest) $203,694 $ (1,794)(7) $201,900 Other liabilities 8,046 1,455(8) 9,501 Minority interest 28,429 -- 28,429 Stockholders' equity 99,952 23,481(9) 123,433 -------- -------- -------- Total liabilities and stockholders' equity $340,121 $ 23,142 363,263 ======== ======== ========
6 NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED AND AS OF MARCH 31, 1997 (ALL AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA) (1) These amounts reflect (i) the addition of historical results of operations for the period from January 1 to the respective acquisition dates for the Properties acquired by the Company during 1997 and for a 3-month period for the Pending Acquisitions, (ii) the elimination of the results of operations of the Ross Stores Newark Property as if the sale had taken place on January 1, 1996 and (iii) the Salt Lake City Refinancing. The results of operations for Properties acquired during 1997, from their respective acquisition dates through March 31, 1997, are included in the Company's historical March 31, 1997 consolidated statement of income. Rental revenue in these pro forma financial statements (both historical and pro forma) is generated from leases that are "net leases," under which the tenant is responsible for substantially all costs of real estate taxes, insurance and ordinary maintenance. Pro forma rental income represents straight-line rent as provided by GAAP, calculated as the difference between the cash rent paid under the lease and the average rent due over the noncancellable term of the lease. The pro forma rental revenue adjustment consists of the following transactions as if they had occurred on January 1, 1996 and were carried forward through March 31, 1997:
RENTAL REVENUE -------------- CRIT Acquisition $ 895 Bull Information Systems Acquisition 257 Exel Pennsylvania Properties Acquisition 648 Other Acquisition 253 Sale of Ross Stores Newark Property (811) ------- $ 1,242 =======
Applicable pro forma interest expense is calculated based on annual interest rates on the respective debt as of the acquisition dates. The pro forma interest expense adjustment includes (i) the impact of the Salt Lake City Refinancing (ii) repayment of the Credit Facility with proceeds from the sale of the Ross Stores Newark Property, and (iii) the impact of interest on acquisitions described above as if they had occurred on January 1, 1997. The pro forma depreciation expense adjustment consists of the following transaction as if they had occurred on January 1, 1996 and were carried forward through March 31, 1997:
DEPRECIATION ------------ CRIT Acquisition $ 237 Bull Information Systems Acquisition 61 Exel Pennsylvania Properties Acquisition 130 Other Acquisition 52 Sale of Ross Stores Newark Property (182) ----- $ 298 =====
(2) This amount represents the minority interest in the net income of LCIF due to the issuance of OP Units in connection with the acquisition of the Company's Salt Lake City Property and the Exel Pennsylvania Properties Acquisition. (3) Primary net income per share is computed by dividing net income reduced by preferred dividends by the weighted average number of common and diluted common equivalent shares outstanding during the period. Fully diluted net income per share amounts are similarly computed but include the effect when dilutive of the Company's other potentially dilutive securities. Fully dilutive net income excluded preferred dividends and is increased by minority interest resulting from the assumed conversion of the limited operating partnership units. The company's Convertible Preferred Stock and Exchangeable Notes are excluded from the pro forma computations due to their anti-dilutive effect during the period. 7 (4) This amount consists of the real estate values of the following transactions as if they had occurred on March 31, 1997: CRIT Acquisition $ 32,945 Bull Information Systems Acquisition 10,905 Sale of Ross Stores Newark Property (30,844) Rancho Bernardo California Acquisition 7,725 -------- $ 20,731 ========
(5) This adjustment represents the effect of the sale of the Ross Stores Newark Property as if it occurred on March 31, 1997. (6) This adjustment includes the cash portion of the acquisitions of properties described in (4) above and the write off of deferred rent receivable related to the possible sale of the Ross Stores Newark Property. (7) This amount reflects the effects of (i) the Salt Lake City Refinancing, (ii) repayment of the Credit Facility with the proceeds of the sale of the Ross Stores Newark Property, and (iii) assumption of debt in connection with the CRIT Acquisition. (8) This amount primarily includes the effect of the CRIT Acquisition and the Bull Information Systems Acquisition. (9) The increase in stockholders' equity is attributable to (i) the issuance of 625 shares of Convertible Preferred Stock at a price of $12.50 per share and (ii) the issuance of approximately 1,319 shares, of Common Stock at $13.00 per share in connection with the CRIT Acquisition. 8 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. LEXINGTON CORPORATE PROPERTIES, INC. By: /s/ T. Wilson Eglin ---------------------------------------- T. Wilson Eglin President and Chief Operating Officer Date: June 17, 1997 -----END PRIVACY-ENHANCED MESSAGE-----