-----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, K6hTD5/lqNPxQE056sqDsXrLARLNz3De9rQTF2iYVzsQuolfgEJDqk9ZDQy/zRLB D8A182YNM0pI4CHfZMkn8Q== 0000931763-97-001631.txt : 19970930 0000931763-97-001631.hdr.sgml : 19970930 ACCESSION NUMBER: 0000931763-97-001631 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970926 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970929 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JDN REALTY CORP CENTRAL INDEX KEY: 0000916836 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 581468053 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12844 FILM NUMBER: 97687745 BUSINESS ADDRESS: STREET 1: 3340 PEACHTREE RD NE STREET 2: STE 1530 CITY: ATLANTA STATE: GA ZIP: 30326 BUSINESS PHONE: 4042623252 MAIL ADDRESS: STREET 1: 3340 PEACHTREE RD NE STREET 2: STE 1530 CITY: ATLANTA STATE: GA ZIP: 30326 8-K 1 FORM 8-K ============================================== 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): September 26, 1997 __________________________ JDN REALTY CORPORATION (Exact Name of Registrant as Specified in Its Charter) MARYLAND 1-12844 58-1468053 (State or Other (Commission File (I.R.S. Employer) Jurisdiction of Number) Identification Incorporation) Number) 3340 PEACHTREE ROAD, NE SUITE 1530 ATLANTA, GEORGIA 30326 (Address of Principal Executive Offices) (Zip Code) (404) 262-3252 (Registrant's Telephone Number, including Area Code) ============================================== ITEM 5. OTHER EVENTS - ---------------------- On February 14, 1997, JDN Realty Corporation (the "Company") acquired The Junction Shopping Center, a 108,043 square foot shopping center in Jackson, Mississippi for $9,100,000 from an unrelated third party. The Company financed this acquisition with $1,900,000 in cash and the assumption of $7,200,000 in indebtedness from the seller. On May 28,1997, the Company purchased the 50% ownership interest of its joint venture partner in River Hills LLC (the "Asheville Partnership") for $283,000. The Asheville Partnership owned and operated River Hills Shopping Center, a 161,970 square foot shopping center in Asheville, North Carolina. The Company assumed $11,926,000 of indebtedness in conjunction with the transaction. On June 26, 1997, the Company purchased the 50% ownership interest of its joint venture partner in JEBCO/JDN Loganville Center LLC (the "Loganville Partnership") for $440,000. The Loganville Partnership owned and operated Midway Plaza Shopping Center, a 90,496 square foot shopping center in Loganville, Georgia. The Company assumed $5,836,000 of indebtedness in conjunction with the transaction. On September 16, 1997, the Company acquired Bermuda Square Shopping Center, a 116,310 square foot shopping center in Richmond, Virginia for $8,683,000 from an unrelated third party. The Company financed this acquisition with borrowings under its $150 million unsecured line of credit. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS - ---------------------------------------------------------------------------- The following financial statements, pro forma financial information and exhibits are filed as part of this report: A. Financial Statements of real estate acquired, pursuant to Rule 3-14 of Regulation S-X: The Junction Shopping Center ---------------------------- Report of Independent Auditors Statements of Revenue and Certain Expenses - Period from March 25, 1996 (date of commencement of operations) to December 31, 1996 - Period from January 1, 1997 to February 14, 1997 (date of sale) Notes to statements of revenue and certain expenses River Hills Shopping Center --------------------------- Report of Independent Auditors Statements of Revenue and Certain Expenses - Period from September 13, 1996 (date of commencement of operations) to December 31, 1996 - Period from January 1, 1997 to May 28, 1997 (date of sale) Notes to statements of revenue and certain expenses Midway Plaza Shopping Center --------------------------- Report of Independent Auditors Statements of Revenue and Certain Expenses - Period from November 2, 1995 (date of commencement of operations) to December 31, 1995 - Year ended December 31, 1996 - Period from January 1, 1997 to June 26, 1997 (date of sale) Notes to statements of revenue and certain expenses Bermuda Square Shopping Center ------------------------------ Report of Independent Auditors Statements of Revenue and Certain Expenses - Year ended December 31, 1996 - Six months ended June 30, 1997 Notes to statements of revenue and certain expenses B. Pro forma financial information required pursuant to Article 11 of Regulation S-X: Pro Forma Consolidated Balance Sheet of the Company - June 30, 1997 Pro forma consolidated statements of operations of the Company - Year ended December 31, 1996 - Six months ended June 30, 1997 The unaudited pro forma balance sheet is based on the historical consolidated balance sheet of the Company as of June 30, 1997 as if the Company had acquired Bermuda Square Shopping Center on June 30, 1997. The unaudited pro forma consolidated statements of operations are based upon the historical consolidated statements of operations of the Company and The Junction Shopping Center, River Hills Shopping Center, Midway Plaza Shopping Center, and Bermuda Square Shopping Center (collectively, the "Acquisition Properties") for the year ended December 31, 1996 and the six months ended June 30, 1997 and are presented as if the Company had acquired the Acquisition Properties on January 1, 1996 and 1997, respectively. These unaudited pro forma financial statements should be read in conjunction with the audited statements of revenue and certain expenses and notes thereto of the Acquisition Properties included in this report, the financial statements of the Company included in its annual report on Form 10-K for the year ended December 31, 1996 and the unaudited interim financial statements of the Company on Form 10-Q for the six months ended June 30, 1997. These unaudited pro forma financial statements are not necessarily indicative of what the actual results of the Company would have been assuming the transactions had been completed as set forth above nor are they indicative of the future results of the Company. C. Exhibits Exhibit 23. Consent of Independent Auditors 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. JDN REALTY CORPORATION By: /s/ William J. Kerley -------------------------- William J. Kerley Chief Financial Officer Date: September 26, 1997 Report of Independent Auditors Shareholders and Board of Directors JDN Realty Corporation We have audited the statement of revenue and certain expenses of The Junction Shopping Center as described in Note 1 for the period from March 25, 1996 (date of commencement of operations) to December 31, 1996. This statement of revenue and certain expenses is the responsibility of The Junction Shopping Center's management. Our responsibility is to express an opinion on this statement of revenue and certain expenses based on our audit. We conducted our audit 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 is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement 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 statement of revenue and certain expenses. We believe that our audit of the statement of revenue and certain expenses provides a reasonable basis for our opinion. The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K of JDN Realty Corporation as described in Note 1 and is not intended to be a complete presentation of The Junction Shopping Center's revenue and expenses. In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses of The Junction Shopping Center for the period from March 25, 1996 (date of commencement of operations) to December 31, 1996 in conformity with generally accepted accounting principles. Ernst & Young LLP Atlanta, Georgia September 24, 1997 The Junction Shopping Center Statements of Revenue and Certain Expenses
PERIOD FROM MARCH 25, 25 1996 (DATE OF COMMENCEMENT OF PERIOD FROM OPERATIONS) TO JANUARY 1, 1997 TO DECEMBER 31, FEBRUARY 14, 1997 1996 (DATE OF SALE) ----------------------------------------------- (UNAUDITED) Revenue: Minimum rents $490,808 $114,934 Recoveries from tenants 127,536 21,222 ----------------------------------------------- Total revenue 618,344 136,156 Certain Expenses: Operating and maintenance 115,601 24,232 Real estate taxes, net of amounts capitalized 38,521 8,964 ----------------------------------------------- Total expenses 154,122 33,196 ----------------------------------------------- Revenue in excess of certain expenses $464,222 $102,960 ===============================================
See accompanying notes. The Junction Shopping Center Notes to Statements of Revenue and Certain Expenses Period from March 25, 1996 (date of commencement of operations) to December 31, 1996 and the period from January 1, 1997 to February 14, 1997 (date of sale) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying statements of revenue and certain expenses relate to the operations of the The Junction Shopping Center (the "Property") located in Jackson, Mississippi. The Property has a total of 108,043 gross leasable square feet. On February 14, 1997, JDN Realty Corporation (the "Company") acquired the Property for $9,100,000 from an unrelated third party. 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 a Form 8-K of JDN Realty Corporation. The statements are not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily consisting of mortgage interest expense, depreciation, amortization, management fees, and corporate expenses have been excluded. REVENUE RECOGNITION Minimum base rentals are recognized as revenue on a straight-line basis over the terms of the operating leases. Tenants are required to pay contingent rentals based on common area maintenance expenses, and such contingent rentals are recognized as revenue when earned. Additionally, certain tenants pay incremental rental amounts based on sales volumes and these percentage rentals are recognized when billed. CAPITALIZATION OF CONSTRUCTION COSTS Costs of construction, property taxes, insurance, interest and other miscellaneous expenses incurred during the development period were capitalized until such time as the Property or portions thereof became operational. The Junction Shopping Center Notes to Statements of Revenue and Certain Expenses (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 period. Actual results could differ from these estimates. 2. LEASES AND SIGNIFICANT TENANTS The tenant base includes primarily national or regional retail chains and local retailers, and consequently the Property's credit risk is concentrated in the retail industry. Three national retailers are the anchor tenants of the Property. Minimum rents from these tenants, as a percentage of total minimum rents for the periods indicated, was as follows:
PERIOD FROM MARCH 25,1996 (DATE OF PERIOD FROM COMMENCEMENT OF JANUARY 1, 1997 OPERATIONS) TO THROUGH DECEMBER 31, 1996 FEBRUARY 14, 1997 (DATE OF SALE) ANCHOR TENANT - ----------------------------------------------------------------------------------------- (UNAUDITED) Office Depot 46% 32% Petsmart 23% 22% Big B Drugs 14% 15%
Report of Independent Auditors Shareholders and Board of Directors JDN Realty Corporation We have audited the statement of revenue and certain expenses of River Hills Shopping Center as described in Note 1 for the period from September 13, 1996 (date of commencement of operations) to December 31, 1996. This statement of revenue and certain expenses is the responsibility of River Hills Shopping Center's management. Our responsibility is to express an opinion on this statement of revenue and certain expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement 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 statement of revenue and certain expenses. We believe that our audit of the statement of revenue and certain expenses provides a reasonable basis for our opinion. The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K of JDN Realty Corporation as described in Note 1 and is not intended to be a complete presentation of River Hills Shopping Center's revenue and expenses. In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses of River Hills Shopping Center for the period from September 13, 1996 (date of commencement of operations) to December 31, 1996 in conformity with generally accepted accounting principles. Ernst & Young LLP Atlanta, Georgia September 16, 1997 River Hills Shopping Center Statements of Revenue and Certain Expenses
PERIOD FROM SEPTEMBER 13, 1996 (DATE OF COMMENCEMENT OF PERIOD FROM JANUARY 1, OPERATIONS) TO 1997 TO DECEMBER 31, MAY 28, 1997 1996 (DATE OF SALE) -------------------------------------------------- (UNAUDITED) Revenue: Minimum rents $228,728 $623,573 Recoveries from tenants 10,135 86,781 Interest income 2,892 5,096 Other revenue 850,000 -------------------------------------------------- Total revenue 1,091,755 715,450 Certain Expenses: Operating and maintenance 9,352 29,975 Real estate taxes 2,738 57,547 -------------------------------------------------- Total expenses 12,090 87,522 -------------------------------------------------- Revenue in excess of certain expenses $1,079,665 $627,928 ==================================================
See accompanying notes. River Hills Shopping Center Notes to Statements of Revenue and Certain Expenses Period from September 13, 1996 (date of commencement of operations) to December 31, 1996 and the period from January 1, 1997 to May 28, 1997 (date of sale) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying statements of revenue and certain expenses relate to the operations of the River Hills Shopping Center (the "Property") located in Asheville, North Carolina. The Property has a total of 186,970 gross leasable square feet. From commencement of operations to May 28, 1997, the Property was held in a limited liability company, which was 50% owned by JDN Realty Corporation ("JDN Realty") and 50% owned by an unrelated third party. On May 28, 1997, JDN Realty acquired the 50% interest held by the unrelated party and thereby became the sole owner of the Property. 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 a Form 8-K of JDN Realty Corporation. The statements are not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily consisting of mortgage interest expense, depreciation, amortization, management fees, and corporate expenses have been excluded. REVENUE RECOGNITION Minimum base rentals are recognized as revenue on a straight-line basis over the terms of the operating leases. Tenants are required to pay contingent rentals based on common area maintenance expenses, and such contingent rentals are recognized as revenue when earned. Additionally, certain tenants pay incremental rental amounts based on sales volumes and these percentage rentals are recognized when billed. CAPITALIZATION OF CONSTRUCTION COSTS Costs of construction, property taxes, insurance, interest and other miscellaneous expenses incurred during the development period were capitalized until such time as the Property or portions thereof became operational. River Hills Shopping Center Notes to Statements of Revenue and Certain Expenses (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 period. Actual results could differ from these estimates. 2. LEASES AND SIGNIFICANT TENANTS The tenant base includes primarily national or regional retail chains and local retailers, and consequently the Property's credit risk is concentrated in the retail industry. Three national retailers are the anchor tenants of the Property. Minimum rents from these tenants, as a percentage of total minimum rents for the periods indicated, were as follows:
PERIOD FROM SEPTEMBER 13, 1996 (DATE OF PERIOD FROM COMMENCEMENT OF JANUARY 1, 1997 OPERATIONS) TO THROUGH DECEMBER 31, 1996 MAY 28, 1997 ANCHOR TENANT (DATE OF SALE) - -------------------------------------------------------------------------------- (UNAUDITED) Carmike Cinemas 16% 22% Circuit City 42% 22% Food Lion 5% 25%
Report of Independent Auditors Shareholders and Board of Directors JDN Realty Corporation We have audited the statements of revenue and certain expenses of Midway Plaza Shopping Center as described in Note 1 for the period from November 2, 1995 (date of commencement of operations) to December 31, 1995 and the year ended December 31, 1996. These statements of revenue and certain expenses are the responsibility of Midway Plaza Shopping Center's management. Our responsibility is to express an opinion on these 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 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 of these statements of revenue and certain expenses 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 a Form 8-K of JDN Realty Corporation as described in Note 1 and are not intended to be a complete presentation of Midway Plaza Shopping Center'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 Midway Plaza Shopping Center for the period from November 2, 1995 (date of commencement of operations) to December 31, 1995 and year ended December 31, 1996 in conformity with generally accepted accounting principles. Ernst & Young LLP Atlanta, Georgia September 16, 1997 Midway Plaza Shopping Center Statements of Revenue and Certain Expenses
PERIOD FROM NOVEMBER 2, 1995 PERIOD FROM (DATE OF JANUARY 1, 1997 COMMENCEMENT OF TO OPERATIONS) TO YEAR ENDED JUNE 26, 1997 DECEMBER 31, DECEMBER 31, (DATE OF 1995 1996 SALE) ------------------------------------------------------ Revenue: Minimum rents $87,582 $739,664 $425,043 Recoveries from tenants - 86,396 49,775 Interest income - - - Other income/(expense) - 7,158 15,870 ------------------------------------------------------ Total revenue 87,582 833,218 490,688 Certain Expenses: Operating and 934 45,255 21,019 maintenance Real estate taxes 2,203 60,885 37,966 ------------------------------------------------------ Total expenses 3,137 106,140 58,985 Revenue in excess of certain expenses ------------------------------------------------------ $84,445 $727,078 $431,703 ======================================================
See accompanying notes. Midway Plaza Shopping Center Notes to Statements of Revenue and Certain Expenses Period from November 2, 1995 (date of commencement of operations) to December 31, 1995, Year ended December 31, 1996 and the Period from January 1, 1997 to June 26, 1997 (date of sale) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying statements of revenue and certain expenses relate to the operations of Midway Plaza Shopping Center (the "Property") located in Loganville, Georgia. The Property has a total of 90,496 gross leasable square feet. From commencement of operations to June 26, 1997, the Property was held in a limited liability company, which was 50% owned by JDN Realty Corporation ("JDN Realty") and 50% owned by an unrelated third party. On June 26, 1997, JDN Realty acquired the 50% interest held by the unrelated third party and thereby became the sole owner of the Property. 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 a Form 8-K of JDN Realty Corporation. The statements are not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily consisting of mortgage interest expense, depreciation, amortization, management fees, and corporate expenses have been excluded. REVENUE RECOGNITION Minimum base rentals are recognized as revenue on a straight-line basis over the terms of the operating leases. Tenants are required to pay contingent rentals based on common area maintenance expenses, and such contingent rentals are recognized as revenue when earned. Additionally, certain tenants pay incremental rental amounts based on sales volumes and these percentage rentals are recognized when billed. CAPITALIZATION OF CONSTRUCTION COSTS Costs of construction, property taxes, insurance, interest and other miscellaneous expenses incurred during the development period were capitalized until such time as the Property or portions thereof became operational. Midway Plaza Shopping Center Notes to Statements of Revenue and Certain Expenses (continued) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 period. Actual results could differ from these estimates. 2. LEASES AND SIGNIFICANT TENANTS The tenant base includes primarily national or regional retail chains and local retailers, and consequently the Property's credit risk is concentrated in the retail industry. Kroger, a national grocery chain, is the anchor tenant of the Property. Minimum rents from Kroger, as a percentage of total minimum rents for the period from November 2, 1995 (date of commencement of operations) to December 31, 1995, the year ended December 31, 1996 and the period from January 1, 1997 to June 26, 1997 (date of sale) were 100%, 73% and 64% (unaudited), respectively. Report of Independent Auditors Shareholders and Board of Directors JDN Realty Corporation We have audited the statement of revenue and certain expenses of Bermuda Square Shopping Center as described in Note 1 for the year ended December 31, 1996. This statement of revenue and certain expenses is the responsibility of Bermuda Square Shopping Center's management. Our responsibility is to express an opinion on this statement of revenue and certain expenses based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement 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 statement of revenue and certain expenses. We believe that our audit of the statement of revenue and certain expenses provides a reasonable basis for our opinion. The accompanying statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K of JDN Realty Corporation as described in Note 1 and is not intended to be a complete presentation of Bermuda Square Shopping Center's revenue and expenses. In our opinion, the statement of revenue and certain expenses referred to above presents fairly, in all material respects, the revenue and certain expenses of Bermuda Square Shopping Center for the year ended December 31, 1996 in conformity with generally accepted accounting principles. Ernst & Young LLP Atlanta, Georgia September 24, 1997 Bermuda Square Shopping Center Statements of Revenue and Certain Expenses
YEAR ENDED PERIOD FROM DECEMBER 31, JANUARY 1, 1997 TO 1996 JUNE 30, 1997 ---------------------------------------------- (UNAUDITED) Revenue: Minimum and percentage rents $1,034,151 $485,445 Recoveries from tenants 147,894 69,862 Interest income 4,987 1,391 Other income 19,478 9,504 ---------------------------------------------- Total revenue 1,206,510 566,202 Certain Expenses: Operating and maintenance 127,253 56,533 Real estate taxes 81,406 43,270 ---------------------------------------------- Total expenses 208,659 99,803 ---------------------------------------------- Revenue in excess of certain expenses $ 997,851 $466,399 ==============================================
See accompanying notes. Bermuda Square Shopping Center Notes to Statements of Revenue and Certain Expenses For the year ended December 31, 1996 and the period from January 1, 1997 to June 30, 1997 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying statements of revenue and certain expenses relate to the operations of the Bermuda Square Shopping Center (the "Property") located in Richmond, Virginia. The Property has a total of 116,310 gross leasable square feet. On September 16, 1997, JDN Realty Corporation (the "Company") acquired the Property for $8,683,000 from an unrelated third party. 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 a Form 8-K of the Company. The statements are not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily consisting of mortgage interest expense, depreciation, amortization, management fees, and corporate expenses have been excluded. REVENUE RECOGNITION Minimum base rentals are recognized as revenue on a straight-line basis over the terms of the operating leases. Tenants are required to pay contingent rentals based on common area maintenance expenses, and such contingent rentals are recognized as revenue when earned. Additionally, certain tenants pay incremental rental amounts based on sales volumes and these percentage rentals are recognized when billed. 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 period. Actual results could differ from these estimates. Bermuda Square Shopping Center Notes to Statements of Revenue and Certain Expenses (continued) 2. LEASES AND SIGNIFICANT TENANTS The tenant base includes primarily national or regional retail chains and local retailers, and consequently the Property's credit risk is concentrated in the retail industry. The significant tenants of the Property and the minimum rents from these tenants, as a percentage of total minimum rents for the periods indicated, were as follows:
PERIOD FROM JANUARY 1, 1997 YEAR ENDED THROUGH ANCHOR TENANT DECEMBER 31, 1996 JUNE 30, 1997 ------------------------------------------------------------------------- (UNAUDITED) Ukrop's 16% 16% Rite Aid 5% 5% A & N Sports 6% 6%
JDN REALTY CORPORATION PRO FORMA CONSOLIDATED BALANCE SHEET JUNE 30, 1997 (Dollars in thousands, except per share data)
JDN Realty JDN Realty Corporation Pro Forma Corporation Historical (A) Adjustments Pro Forma ---------------- ------------- -------------- (Unaudited) ASSETS Shopping center properties, at cost: Land $ 57,843 $ 1,302 (B) $ 59,145 Buildings and improvements 298,769 7,381 (B) 306,150 Property under development 64,085 - 64,085 ------------ ---------- ----------- 420,697 8,683 429,380 Less: accumulated depreciation and amortization (32,835) - (32,835) ------------ ---------- ----------- Shopping center properties, net 387,862 8,683 396,545 Cash and cash equivalents 15,934 - 15,934 Restricted cash - escrow 2,535 - 2,535 Rents receivable 1,272 - 1,272 Investments in and advances to unconsolidated entities 52,931 - 52,931 Deferred costs, net of amortization 5,753 - 5,753 Other assets 11,457 - 11,457 ------------ ---------- ----------- $477,744 $ 8,683 $486,427 ============ ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Unsecured line of credit $100,000 $ 8,683 (C) $108,683 Mortgage notes payable 85,032 - 85,032 Accounts payable and accrued expenses 2,092 - 2,092 Other liabilities 1,563 - 1,563 ----------- ---------- ----------- Total Liabilities 188,687 8,683 197,370 Shareholders' Equity Preferred stock, par value $.01 per share- authorized 20,000,000 shares, none outstanding - - - Common stock, par value $.01 per share- authorized 150,000,000 shares, issued and outstanding 15,461,612 shares in 1997 155 - 155 Paid-in capital 295,991 - 295,991 Accumulated deficit (7,089) - (7,089) ------------ ---------- ----------- Total Shareholders' Equity 289,057 - 289,057 ------------ ---------- ----------- $477,744 $ 8,683 $486,427 ============ ========== ===========
SEE NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET JDN REALTY CORPORATION NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET JUNE 30, 1997 (UNAUDITED) (A) Represents the historical consolidated balance sheet of JDN Realty Corporation (the "Company") as of June 30, 1997. Included in this balance sheet are the effects of acquisitions made prior to June 30, 1997, including The Junction Shopping Center, River Hills Shopping Center and Midway Plaza Shopping Center. No pro forma adjustments are included for acquisitions made prior to June 30, 1997. (B) Represents the allocated purchase price for Bermuda Square Shopping Center. (C) Represents the financing of the purchase price of Bermuda Square Shopping Center with an advance on the Company's unsecured line of credit. JDN Realty Corporation Pro Forma Consolidated Statement of Income Year Ended December 31, 1996 (In thousands, except per share data)
JDN Realty The Junction River Hills Midway Plaza Bermuda Square Corporation Shopping Shopping Shopping Shopping Historical (A) Center (B) Center (C) Center (D) Center (E) -------------- ------------ ----------- ------------ -------------- Revenues: Minimum and percentage rents $32,933 $ 491 $ 229 $ 739 $ 1,034 Recoveries from tenants 3,475 128 10 87 148 Other revenue 215 - 850 - - -------------- ------------ ----------- ------------ -------------- Total revenues 36,623 619 1,089 826 1,182 Operating expenses: Operating and maintenance 2,586 117 9 45 127 Real estate taxes 1,817 38 3 61 82 General and administrative 3,367 - - - - Depreciation and amortization 7,786 - - - - -------------- ------------ ----------- ------------ -------------- Total operating expenses 15,556 155 12 106 209 -------------- ------------ ----------- ------------ -------------- Income from operations 21,067 464 1,077 720 973 Other income (expense): Interest expense, net (5,868) - - - - Other income (expense), net 83 - 3 7 25 Equity in net income of unconsolidated entities 1,415 - - - - -------------- ------------ ----------- ------------ -------------- Income before net loss on real estate sales and extraordinary items 16,697 464 1,080 727 998 Net loss on real estate sales (15) - - - - -------------- ------------ ----------- ------------ -------------- Income before extraordinary items 16,682 464 1,080 727 998 Extraordinary items - - - - - -------------- ------------ ----------- ------------ -------------- Net income $16,682 $ 464 $ 1,080 $ 727 $ 998 ============== ============ =========== ============ ============== Net income per share $1.50 ============== Weighted average shares outstanding 11,086 ============== JDN Realty Pro Forma Corporation Adjustments Pro Forma ----------- ----------- Revenues: Minimum and percentage rents $ - $35,426 Recoveries from tenants - 3,848 Other revenue - 1,065 ----------- ----------- Total revenues - 40,339 Operating expenses: Operating and maintenance - 2,884 Real estate taxes - 2,001 General and administrative - 3,367 Depreciation and amortization 546 (G) 8,332 ----------- ----------- Total operating expenses 546 16,584 ----------- ----------- Income from operations (546) 23,755 Other income (expense): Interest expense, net (1,535) (H) (7,403) Other income (expense), net - 118 Equity in net income of unconsolidated entities (558) (F) 857 ----------- ----------- Income before net loss on real estate sales and extraordinary items (2,639) 17,327 Net loss on real estate sales - (15) ----------- ----------- Income before extraordinary items (2,639) 17,312 Extraordinary items - - ----------- ----------- Net income $(2,639) $17,312 =========== =========== Net income per share $1.56 =========== Weighted average shares outstanding 11,086 ===========
SEE NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME JDN REALTY CORPORATION NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME YEAR ENDED DECEMBER 31, 1996 (UNAUDITED) (A) Represents the historical consolidated statement of income of JDN Realty Corporation (the "Company") for the year ended December 31, 1996. (B) Represents the revenue and certain expenses of The Junction Shopping Center for the period from March 25, 1996 (date of commencement of operations) to December 31, 1996. (C) Represents the revenue and certain expenses of River Hills Shopping Center for the period from September 13, 1996 (date of commencement of operations) to December 31,1996. (D) Represents the revenue and certain expenses of Midway Plaza Shopping Center for the year ended December 31, 1996. (E) Represents the revenue and certain expenses of Bermuda Square Shopping Center for the year ended December 31, 1996. (F) Represents elimination of the Company's income from its 50% interests in the limited liability companies which owned River Hills Shopping Center and Midway Plaza Shopping Center. (G) Represents depreciation expense related to the portion of the purchase price of the Acquisition Properties allocated to building using a 31.5 year life. (H) Represents interest expense related to the Acquisition Properties assuming the Company incurred or assumed indebtedness at the beginning of the period to finance these acquisitions. JDN Realty Corporation Pro Forma Consolidated Statement of Income Six Months Ended June 30, 1997 (Unaudited) (In thousands, except per share data)
JDN Realty The Junction River Hill Midway Plaza Bermuda Square Corporation Shopping Shopping Shopping Shopping Pro Forma Historical (A) Center (B) Center (C) Center (D) Center (E) Adjustments -------------- ------------ ---------- ----------- ------------- ----------- Revenues: Minimum and percentage rents $ 19,234 $ 115 $ 624 $ 425 486 $ - Recoveries from tenants 1,873 21 87 50 70 - Other revenue 87 - - - - - -------------- ------------ ---------- ----------- ---------- ------- Total revenues 21,194 136 711 475 556 - Operating expenses: Operating and maintenance 1,412 24 30 21 57 - Real estate taxes 974 9 58 38 43 - General and administrative 1,967 - - - - - Depreciation and amortization 4,552 - - - - 358 (G) -------------- ------------ ---------- ----------- ---------- ------- Total operating expenses 8,905 33 88 59 100 358 -------------- ------------ ---------- ----------- ---------- ------- Income from operations 12,289 103 623 416 456 (358) Other income (expense): Interest expense, net (2,137) - - - - (900) (H) Other income (expense), net 556 - 5 16 10 - Equity in net income of unconsolidated entities 1,521 - - - - (178) (F) -------------- ------------ ---------- ----------- ---------- ------- Income before net loss on real estate sales and extraordinary items 12,229 103 628 432 466 (1,436) Net loss on real estate sales - - - - - - -------------- ------------ ---------- ----------- ---------- ------- Income before extraordinary items 12,229 103 628 432 466 (1,436) Extraordinary items (401) - - - - - -------------- ------------ ---------- ----------- ---------- ------- Net income $ 11,828 $ 103 $ 628 $ 432$ 466 (1,436) ============== ============ ========== =========== ========== ======= Net income per share $ 0.81 ============== Weighted average shares outstanding 14,543 ============== JDN Realty Corporation Pro Forma ------------ Revenues: Minimum and percentage rents $ 20,884 Recoveries from tenants 2,101 Other revenue 87 ------------ Total revenues 23,072 Operating expenses: Operating and maintenance 1,544 Real estate taxes 1,122 General and administrative 1,967 Depreciation and amortization 4,910 ------------ Total operating expenses 9,543 ------------ Income from operations 13,529 Other income (expense): Interest expense, net (3,037) Other income (expense), net 587 Equity in net income of unconsolidated entities 1,343 ------------ Income before net loss on real estate sales and extraordinary items 12,422 Net loss on real estate sales - ------------ Income before extraordinary items 12,422 Extraordinary items (401) ------------ Net income $ 12,021 =========== Net income per share $ 0.83 =========== Weighted average shares outstanding 14,543 ===========
SEE NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME JDN REALTY CORPORATION NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) (A) Represents the historical consolidated statement of income of JDN Realty Corporation (the "Company") for the six months ended June 30, 1997. (B) Represents the revenue and certain expenses of The Junction Shopping Center for period from January 1, 1997 to February 14, 1997 (date of sale). (C) Represents the revenue and certain expenses of River Hills Shopping Center for period from January 1, 1997 to May 28, 1997 (date of sale). (D) Represents the revenue and certain expenses of Midway Plaza Shopping Center for period from January 1, 1997 to June 26, 1997 (date of sale). (E) Represents the revenue and certain expenses of Bermuda Square Shopping Center for the six months ended June 30, 1997. (F) Represents elimination of the Company's income from its 50% interests in the limited liability companies which owned River Hills Shopping Center and Midway Plaza Shopping Center. (G) Represents depreciation expense related to the portion of the purchase price of the Acquisition Properties allocated to building using a 31.5 year life. (H) Represents interest expense, net of amounts capitalized, related to the Acquisition Properties assuming the Company incurred or assumed indebtedness at the beginning of the period to finance these acquisitions. INDEX TO EXHIBITS Exhibit 23 Consent of Independent Auditors EX-23 2 CONSENT OF ERNST & YOUNG LLP Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-22339) of JDN Realty Corporation and in the related Prospectus of our reports dated September 24, 1997, September 16, 1997, September 16, 1997 and September 24, 1997, with respect to the statements of revenue and certain expenses of The Junction Shopping Center for the period from March 25, 1996 (date of commencement of operations) to December 31, 1996, the River Hills Shopping Center for the period from September 13, 1996 (date of commencement of operations) to December 31, 1996, the Midway Plaza Shopping Center for the period from November 2, 1995 (date of commencement of operations) to December 31, 1995 and the year ended December 31, 1996, and the Bermuda Square Shopping Center for the year ended December 31, 1996, respectively, included in the Current Report on Form 8-K of JDN Realty Corporation dated September 26, 1997. Ernst & Young LLP Atlanta, Georgia September 26, 1997 -----END PRIVACY-ENHANCED MESSAGE-----