-----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, BPm0Cw1Ud6ruNpcS8fMAl9ReLUOqVRFHxonAQVL6T35WJO0dG+WTAw+Ipf2otrok 8cKssXhjAYio0M+F0FP75A== 0000926861-99-000006.txt : 19990311 0000926861-99-000006.hdr.sgml : 19990311 ACCESSION NUMBER: 0000926861-99-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990310 ITEM INFORMATION: FILED AS OF DATE: 19990310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST WASHINGTON REALTY TRUST INC CENTRAL INDEX KEY: 0000926861 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 521879972 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14571 FILM NUMBER: 99561346 BUSINESS ADDRESS: STREET 1: 4350 EAST WEST HWY - STE 400 CITY: BETHESDA STATE: MD ZIP: 20814 BUSINESS PHONE: 3019077800 MAIL ADDRESS: STREET 1: 4350 EAST WEST HIGHWAY SUITE 400 STREET 2: 4350 EAST WEST HIGHWAY SUITE 400 CITY: BETHESDA STATE: MD ZIP: 20814 8-K 1 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 March 10, 1999 FIRST WASHINGTON REALTY TRUST, INC. (Exact name of registrant as specified in its Charter) State of Maryland 0-25230 52-1879972 (State or other jurisdiction (Commission (I.R.S. Employer of incorporated) File No.) Identification No.) 4350 East-West Highway, Suite 400 Bethesda, Maryland 20814 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (301) 907-7800 No change (Former name or address, if changed since last report) Explanatory Note: Pursuant to Item 7(a)(4) of Form 8-K, this form includes historical financial statements and pro forma financial information required by Item 7(a) and (b) with respect to the two (2) properties (the "Acquired" properties) referred to in such Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements Applicable to Real Estate Properties Acquired. Acquired Properties * Report of Independent Accountants * Combined Statements of Revenues and Certain Expenses for the year ended December 31, 1997 and the nine months ended September 30, 1998 * Notes to Combined Statements of Revenues and Certain Expenses (b) Pro Forma Financial Information. Pro Forma (unaudited): * Pro Forma Consolidated Balance Sheet as of September 30, 1998 * Pro Forma Consolidated Statements of Operations for the year ended the year ended December 31, 1997 and the nine months ended September 30, 1998 * Notes and Management's Assumptions to the Pro Forma Consolidated Financial Statements (c) Exhibits 23.1 Consent of Independent Accountants 1 SIGNATURE 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. FIRST WASHINGTON REALTY TRUST, INC. (Registrant) By: /s/ James G. Blumenthal James G. Blumenthal Executive Vice President, Chief Financial Officer Date: March 10, 1999 2 INDEX TO FINANCIAL STATEMENTS Acquired Properties: Page * Report of Independent Accountants......................................F-2 * Combined Statements of Revenues and Certain Expenses for the year ended December 31, 1997 and the nine months ended September 30, 1998 (unaudited) ...........................................................F-3 * Notes to Combined Statements of Revenues and Certain Expenses..........F-4 First Washington Realty Trust, Inc. and Subsidiaries Pro Forma (unaudited): * Pro Forma Consolidated Balance Sheet as of September 30, 1998..........F-6 * Pro Forma Consolidated Statements of Operations for the year ended December 31, 1997 and the nine months ended September 30, 1998.........F-7 * Notes and Management's Assumptions to the Pro Forma Consolidated Financial Statements......................................F-9 F-1 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of First Washington Realty Trust, Inc. We have audited the accompanying combined statement of revenues and certain expenses of the Acquired Properties (as defined in footnote No. 1 to this statement) for the year ended December 31, 1997. This historical statement is the responsibility of the Acquired Properties' management. Our responsibility is to express an opinion on this historical statement 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 historical statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the historical statement. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the historical statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying historical statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the Form 8-K of First Washington Realty Trust, Inc.) as described in footnote No. 1 and is not intended to be a complete presentation of the Acquired Properties' revenues and expenses. In our opinion, the historical statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses as described in footnote No. 1 of the Acquired Properties for the year ended December 31, 1997, in conformity with generally accepted accounting principles. Washington, D.C. February 12, 1999 F-2 The Acquired Properties Combined Statements of Revenues and Certain Expenses (dollars in thousands) Year Ended Nine Months Ended December 31, 1997 September 30, 1998 ----------------- ------------------- Minimum Base Rents $3,222 $1,895 Tenant Reimbursement Income 527 260 Percentage Rents 30 0 Other Income 3 17 ---------- -------- Total Revenues 3,782 2,172 ------- ----- Real Estate Tax Expense 324 152 Recoverable Operating Expenses 277 103 Other Expense 40 20 --------- --------- Total Certain Expenses 641 275 -------- ------ Revenues in Excess of Certain Expenses $3,141 $1,897 ======== ======== The accompanying notes are an integral part of the statements of revenues and certain expenses. F-3 NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES (dollars in thousands) 1. Basis of Presentation The combined statements of revenues and certain expenses (the "Statements") relate to the operations of two shopping center properties (the "Acquired Properties") which were acquired by First Washington Realty Trust Partnership (the "Company"), whose general partner is First Washington Realty Trust, Inc. The accompanying Statements include certain accounts of the following properties: Percent Location of GLA Leased Name Property Area (sf) 9/30/98 - ------ ------------ --------- ------- Parkville Shopping Center Baltimore, MD 140,925 99.1% Town Center at Sterling Sterling, VA 179,002 85.2% Significant Tenants Lease Expiration Date - ---------------------- A&P Superfresh (2003) Rite Aid (2001) Giant Food (2003) TOTAL/AVERAGE 319,927 91.3% ======= ===== Revenues and expenses are recorded using the accrual basis of accounting. The accompanying Statements are not representative of the actual operations for the periods presented as certain expenses which may not be comparable to the expenses expected to be incurred by the Company in the proposed future operations of the Acquired Properties have been excluded. The Company is not aware of any material factors relating to the Acquired Properties that would cause the reported financial information not to be necessarily indicative of future operating results. Items excluded consist of termination fees, interest expense and income, depreciation and amortization and management fees which in the opinion of management, are not directly related to the future operations of the properties. The unaudited interim combined statement of revenues and certain expenses of the Acquired Properties are prepared pursuant to the Securities and Exchange Commission's rules and regulations and generally accepted accounting principles applicable to interim financial statements. The interim period reflects operations for the nine months ended September 30, 1998 for Town Center at Sterling and two months ended February 28, 1998, for Parkville Shopping Center (the date of acquisition by the Company). In the opinion of management, all adjustments, consisting solely of normal recurring adjustments, necessary for fair presentation of the combined statement of revenues and certain expenses for the interim period have been included. The current period's results of operations are not necessarily indicative of results which ultimately may be achieved for the year. F-4 2. Operating Leases In addition to the minimum rent, certain tenant leases provide for the reimbursement of certain operating expenses and/or percentage rent in the amount of a percentage of annual gross sales in excess of a specified base sales amount. Minimum rents presented for the year ended December 31, 1997 and the nine months ended September 30, 1998 contain straight-line adjustments for rental revenue increases or abatements in accordance with generally accepted accounting principles. The aggregate rental revenue increases resulting from the straight-line adjustments for the year ended December 31, 1997 and the nine months ended September 30, 1998 were $1 and $3, respectively. The following tenants accounted for 10% or more of the total rents for 1997: Giant Food . . . . . . . . . . . . . . . . . . . . . . . $ 475 The properties are leased to tenants under operating leases with expiration dates extending to the year 2008. Minimum future base rentals under noncancelable operating leases as of December 31, 1997 are approximately as follows: 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,091 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,601 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,054 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,772 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,113 2004 and thereafter . . . . . . . . . . . . . . . . . . . 1,345 ------- $11,976 ======= F-5 FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES PRO FORMA CONSOLIDATED BALANCE SHEET (dollars in thousands) (unaudited) As of September 30, 1998 --------------------------------------------- Historical Willston I ---------- ---------- (A) ASSETS Rental properties: Land.........................................$99,557 $2,076 Building and improvements....................408,567 8,305 ------- ------- 508,124 10,381 Accumulated depreciation ....................(48,045) ------- ------- Rental properties, net ....................460,079 10,381 Cash and equivalents ............................. 2,868 (168) Tenant receivables, net........................... 7,680 Deferred financing costs, net .................... 2,260 0 Other assets ............................. 14,931 ------- ----- Total assets.................................487,818 10,213 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage and other notes ....................$218,296 $0 Exchangeable Debentures .................... 25,000 Accounts payable and accrued expenses........ 9,920 668 -------- ------- Total Liabilities 253,216 668 ======== ------- Minority Interest ............................. 52,500 7,211 Shareholder's equity: Convertible Preferred stock $.01 par value, 3,800,000 shares designated; 2,314,189 shares issued and outstanding................ 23 Common Stock $.01 par value, 90,000,000 shares authorized; 8,566,985 shares issued and outstanding ............................. 86 Additional paid-in capital....................... 212,935 2,334 Accumulated distributions in excess of earning...................................... (30,942) --------- ------- Total stockholders' equity................... 182,102 2,334 --------- ------- Total liabilities and stockholder's equity...$487,818 $10,213 ========= ======= Town Pro Willston II Center Forma ----------- ------ ------ (A) (B) (un- audited) ASSETS Rental properties: Land.........................................$ 2,668 $4,414 $108,715 Building and improvements.................... 10,671 17,657 445,200 ------- ------ ------- 13,339 22,071 553,915 Accumulated depreciation .................... (48,045) ------- ------- -------- Rental properties, net .................... 13,339 22,071 505,870 Cash and equivalents ............................. (317) 2,383 Tenant receivables, net........................... 7,680 Deferred financing costs, net .................... 100 88 2,448 Other assets ............................. 14,931 ------- ------ ------- Total assets.................................$ 13,122 $22,159 $533,312 ======= ====== ======= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Mortgage and other notes ....................$ 10,660 14,654 243,610 Exchangeable Debentures .................... 25,000 Accounts payable and accrued expenses........ 160 20 10,768 ------ ------ ------- Total Liabilities 10,820 14,674 279,378 ------ ------ ------- Minority Interest ............................. 1,354 5,640 66,705(C) Shareholder's equity: Convertible Preferred stock $.01 par value, 3,800,000 shares designated; 2,314,189 shares issued and outstanding................ 23 Common Stock $.01 par value, 90,000,000 shares authorized; 8,566,985 shares issued and outstanding ............................. 86 Additional paid-in capital....................... 948 1,845 218,062(C) Accumulated distributions in excess of (30,942) earning......................................-------- ------ ------- Total stockholders' equity................... 948 1,845 187,229 --------- -------- ------- Total liabilities and stockholder's equity...$ 13,122 $22,159 $533,312 ========= ====== =======
The accompanying notes are an integral part of the statements of revenues and certain expenses. F-6 FIRST WASHINGTON REALTY TRUST INC., PRO FORMA CONDOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts) For the Year Ended December 31, 1997 Other 1997 1998 Historical Properties Properties ----------- ---------- ---------- (A) (B) Revenue: Minimum rents $43,857 $6,672 $6,922 Percentage rents 1,060 571 363 Tenant reimbursements 9,506 2,643 1,712 Other income 1,211 48 24 ----------- --------- ---------- Total revenues 55,634 9,934 9,021 ----------- --------- ---------- Expenses: Property operating and maintenance 13,522 2,900 2,008 General and administrative 3,363 Interest 18,416 Depreciation and amortization 11,172 ----------- --------- ---------- 46,473 2,900 2,008 ----------- --------- ---------- Income before income from Management Company and minority interest 9,161 7,034 7,013 Gain on sale of property 549 Income from Management Company 433 ----------- --------- ---------- Income before extraordinary item, minority interest and distribution to Preferred Stockholders 10,143 7,034 7,013 Extraordinary item - Loss on early extinguishment of debt (954) ------------ --------- ---------- Income before minority interest and 9,189 7,034 7,013 distributions to Preferred Stockholders (Income) allocated to minority interest (1,579) ------------ --------- ---------- Income before distributions to Preferred 7,610 7,034 7,013 Stockholders Distributions to Preferred Stockholders (5,641) ------------ --------- ---------- Income allocated to Common Stockholders $1,969 $7,034 $7,013 ======= ====== ====== Proforma Net Income before gain on sale of properties and extraordinary item $2,374 Gain on sale of properties 549 Extraordinary Item (954) ------ Proforma Net Income $1,969 ====== Earnings per Common Share - Basic Income before extraordinary item $0.42 Gain on sale of properties 0.10 Extraordinary Item (0.17) ------ Net Income per Common Share - Basic $0.35 ====== Earnings per Common Share - Diluted Income before extraordinary item $0.41 Gain on sale of properties 0.10 Extraordinary Item (0.17) ------ Net Income per Common Share - Diluted $0.34 ====== Shares of Common Stock, in thousands - Basic 5,663 ====== Shares of Common Stock, in thousands - Diluted 5,730 ====== 1998 Acquired Sales Properties ----- ---------- (C) Revenue: Minimum rents $(2,161) $3,222 Percentage rents -0- 30 Tenant reimbursements (27) 527 Other income (100) 3 --------- ------ Total revenues (2,288) 3,782 --------- ------ Expenses: Property operating and maintenance (1,155) 641 General and administrative Interest Depreciation and amortization --------- ------ (1,155) 641 -------- ------ Income before income from Management Company and minority interest (1,133) 3,141 Gain on sale of property Income from Management Company ------- -------- Income before extraordinary item, minority interest and distribution to Preferred Stockholders (1,133) 3,141 Extraordinary item - Loss on early extinguishment of debt Income before minority interest and ------- -------- distribution to Preferred Stockholders (1,133) 3,141 (Income) allocated to minority interest ------- -------- Income before distributions to Preferred Stockholders (1,133) 3,141 Distributions to Preferred Stockholders ------- --------- Income allocated to Common Stockholders $(1,133) $ 3,141 ======= ========= Revenue: Adjustments Proforma ----------- -------- Minimum rents $58,512 Percentage rents 2,024 Tenant reimbursements 14,361 Other income 1,186 ------------ ---------- Total revenues 76,083 ------------ ---------- Expenses: Property operating and maintenance 505(D) 18,421 General and administrative 3,363 Interest 2,109(E) 20,525 Depreciation and amortization 3,634(F) 14,806 ---------- ---------- 6,248 57,115 ---------- ---------- Income before income from Management Company and minority interest (6,248) 18,968 Gain on sale of property 549 Income from Management Company 433 -------- ---------- Income before extraordinary item, minority interest and distribution to Preferred Stockholders 6,248 19,950 Extraordinary item-Loss on early extinguishment of debt (954) -------- -------- Income before minority interest and distributions (6,248) 18,996 to Preferred Stockholders (Income) allocated to minority interest (2,786)(G) (4,365) ---------- ---------- Income before distributions to Preferred Stockholders (9,034) 14,631 Distributions to Preferred Stockholders (5,641) --------- --------- Income allocated to Common Stockholders $(9,034) $8,990 ========= ========= Proforma Net Income before gain on sale of properties and extraordinaty item $9,395 Gain on sale of properties 549 Extraordinary Item (954) ------ Proforma Net Income $8,990 ====== Earnings per Common Share - Basic Income before extraordinary item $1.07 Gain on sale of properties 0.06 Extraordinary Item (0.11) ------ Net Income per Common Share - Basic $1.02 ====== Earnings per Common Share - Diluted Income before extraordinary item $1.06 Gain on sale of properties 0.06 Extraordinary Item (0.11) ------- Net Income per Common Share - Diluted $1.01 ====== Shares of Common Stock, in thousands - Basic 8,819 ====== Shares of Common Stock, in thousands - Diluted 8,884 ======
The accompanying notes are an integral part of the statements of revenues and certain expenses. F-7 FIRST WASHINGTON REALTY TRUST INC., PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts) Nine Months Ended September 30, 1998 Other 1998 1998 Historical Properties Sales ----------- ---------- ----- (B) (C) Revenue: Minimum rents $41,689 $2,826 ($544) Percentage rents 925 96 0 Tenant reimbursements 9,847 724 (16) Other income 854 12 (36) ----------- ---------- ------ Total revenues 53,315 3,658 (596) ----------- ---------- ------ Expenses: Property operating and maintenance 12,838 924 (379) General and administrative 2,709 Interest 14,782 Depreciation and amortization 10,687 ----------- ---------- ------ 41,016 924 (379) ----------- ---------- ------- Income before income from Management Company and minority interest 12,299 2,734 (217) Gain on sale of property 2,018 (2,018) Income from Management Company 281 ----------- ---------- ------ Income before extraordinary item, minority interest and distribution to Preferred Stockholders 14,598 2,734 (2,235) Extraordinary item- Loss on early extinguishment of debt (358) 121 ----------- ---------- -------- Income before minority interest and distributions to Preferred Stockholders 14,240 2,734 (2,114) Income allocated to minority interest (3,069) ------------ ---------- ------- Income before distributions to Preferred 11,171 2,734 (2,114) Stockholders Distributions to Preferred Stockholders (4,231) ------------ ---------- ------- Income(loss) allocated to Common Stockholders $6,940 $2,734 ($2,114) ============ ========== ======== Profroma Net income before gain on sale of properties and extraordinary item $5,280 Gain on sale of properties 2,018 Extraordinary item (358) ----------- Proforma Net Income $6,940 =========== Earnings per Common Share - Basic Income before extraordinary item $0.68 Gain on sale of properties $0.26 Extraordinary Item (0.05) ----------- Net Income per Common Share - Basic $0.89 =========== Earnings per Common Share- Diluted Income before extraordinary item $0.67 Gain on sale of properties $0.26 Extraordinary Item (0.05) ----------- Net Income per Common Share - Diluted $0.88 =========== Shares of Common Stock, in thousands - Basic 7,769 =========== Shares of Common Stock, in thousands - Diluted 7,848 ===========
Acquired Adjustments Properties (2) Proforma ----------- ---------- ----- Revenue: Minimum rents $1,863 $45,834 Percentage rents 0 1,021 Tenant reimbursements 260 10,815 Other income 17 847 ----------- ---------- ------ Total revenues 2,140 0 58,517 ----------- ---------- ------ Expenses: Property operating and maintenance 275 128(D) 13,786 General and administrative 2,709 Interest 801(E) 15,583 Depreciation and amortization 901(F) 11,588 ----------- ---------- ------ 275 1,830 43,666 ----------- ---------- ------- Income before income from Management Company and minority interest 1,865 (1,830) 14,851 Gain on sale of property (0) Income from Management Company 281 ----------- ---------- ------ Income before extraordinary item, minority interest and distribution to Preferred Stockholders 1,865 (1,830) 15,132 Extraordinary item - Loss on early extinguishment of debt (237) ---------- ---------- ------- Income before minority interest and distributions to Preferred Stockholders 1,865 (1,830) 14,895 Income allocated to minority interest (379)(G) (3,448) ------------ ---------- ------- Income before distributions to Preferred Stockholders 1,865 (2,209) 11,447 Distributions to Preferred Stockholders (4,231) ------------ ---------- ------- Income(loss) allocated to common stockholders $1,865 (2,209) $7,216 ============ ========== ======== Profroma Net income before gain on sale of properties and extraordinary item $7,453 Gain on sale of properties (0) Extraordinary item (237) ----------- Proforma Net Income $7,216 =========== Earnings per Common Share - Basic Income before extraordinary item $0.87 Gain on sale of properties $0.00 Extraordinary Item (0.03) ----------- Net Income per Common Share - Basic $0.84 =========== Earnings per Common Share- Diluted Income before extraordinary item $0.87 Gain on sale of properties $0.00 Extraordinary Item (0.03) ----------- Net Income per Common Share - Diluted $0.84 =========== Shares of Common Stock, in thousands - Basic 8,548 =========== Shares of Common Stock, in thousands - Diluted 8,627 ===========
The accompanying notes are an integral part of the statements of revenues and certain expenses. F-8 FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES NOTES AND MANAGEMENT'S ASSUMPTIONS TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands) (unaudited) 1. Basis of Presentation: The accompanying unaudited Pro Forma Consolidated Balance Sheet is presented as if the Parkville Shopping Center and Town Center at Sterling ("Acquired Properties") acquisition had occurred on September 30, 1998. The Pro Forma Consolidated Balance Sheet also reflects the acquisition of Willston Centre I & II as of September 30, 1998. Willston Centre I is an 86,000 square foot center anchored by CVS/Pharmacy and Willston Centre II is a 127,000 square foot center anchored by Safeway. Both centers are located in Falls Church, Virginia. The properties were acquired on November 3, 1998. The accompanying unaudited Pro Forma Consolidated Statements of Operations are presented as if: (i) the properties acquired in 1997, i.e., Ashburn, Mallard Creek, McHenry Commons, Pheasant Hill, Riverside, Stonebrook, The Oaks, Mitchellville and Spring Valley (together the "1997 Properties") had been consummated as of January 1, 1997; (ii) the properties acquired in 1998, i.e., Bowie Plaza, Watkins Park, Elkridge, Village, Willston Centre I & II (together the "Other 1998 Properties") had been consummated as of January 1, 1997; (iii)the properties sold in 1998 i.e., Branchwood and Park Place Apartments, 3269 M Street, 3033 M Street and 1328 Wisconsin Avenue (together the "1998 Sales") had occurred on January 1, 1997, and (iv) The Common Stock offerings completed in 1997 and 1998 occurred as of January 1, 1997. These pro forma consolidated financial statements should be read in conjunction with the historical financial statements and notes thereto. In management's opinion, all adjustments necessary to reflect the effects of the acquisition of the Acquired Properties, the 1997 Properties, the Other 1998 Properties and 1998 Sales have been made. The unaudited pro forma consolidated financial statements are not necessarily indicative of the actual financial position at September 30, 1998 or what the actual results of operations of the Company would have been assuming the acquisition of the Acquired Properties, the 1997 Properties, the Other 1998 Properties and 1998 Sales, had been completed as of January 1, 1997, nor are they indicative of the results of operations for future periods. 2. Adjustments to Pro Forma Consolidated Balance Sheet: (A) Reflects the purchase of Willston Centre I & II for $23,720 plus the payment of financing expenses of $100. The acquisitions were financed with assumed mortgage debt of $10,660, payables of $828, the issuance of 515,084 Common Units with a value of $11,847 and cash of $485. (B) Reflects the purchase of Town Center at Sterling for $22,071 plus the payment of financing expenses of $88. The acquisition was financed with the assumed mortgage debt of $9,342, borrowings under the Company's line of credit of $5,312, payables of $20, and the issuance of 325,453 Common Units with a value of $7,485. (C) Reflects the adjustment to Minority Interest and additional paid-in-capital due to the issuance of Common Units. F-9 3. Adjustments to Pro Forma Consolidated Statement of Operations: (A) Reflects the operations of the 1997 Properties for the period prior to their acquisition by the Company for the year ended December 31, 1997. (B) Reflects the operations of the Other 1998 Properties for the twelve months ended December 31, 1997 and the nine months ended September 30, 1998 for the period prior to their acquisition by the Company. (C) Reflects the operations of properties sold during 1998 for the twelve months ended December 31, 1997 and the nine months ended September 30, 1998 for the period prior to their sale by the Company. Nine Months Year Year Ended Ended Sept. 30, 1998 Dec. 31, 1997 ================= =============== (D) Reflects the net increase (decrease) in property operating and maintenance costs that would (would not) have been incurred relating to: 1997 Properties management fees $-- $246 Other 1998 Properties management fees 89 221 Properties sold during 1998 management fees (15) (57) Acquired Properties management fees 54 95 ------------------ --------------- $ 128 $ 505 ================== =============== (E) Reflects the net increase (decrease) in interest expense relating to: 1997 Properties with mortgage debt assumed $-- $ 3,027 Other 1998 Properties mortgage debt assumed 749 1,556 Retired debt related to properties sold during 1998 (92) (445) Acquired Properties mortgage debt assumed 531 899 Borrowings on the Company's line of credit to finance acquisition 469 1,622 Loan Payoffs from proceeds of 1997 and 1998 Common Stock Offerings (856) (4,450) --------------------- --------------- $ 801 $ 2,109 ===================== =============== (F) Reflects the net increase (decrease) in depreciation and amortization relating to: 1997 Properties Acquisitions $-- $ 1,714 Other 1998 Properties Acquisitions 653 1,729 Properties sold during 1998 (119) (463) Acquired Properties Acquisitions 367 654 --------------------- --------------- $ 901 $ 3,634 ===================== =============== Depreciation is calculated using the straight-line method over 31.5 and 40 years. It is assumed that 80% of the acquisition cost basis is allocated to the building and 20% to the land. (G) Reflects limited partner's interest in the Operating Partnership as follows: Pro Forma income before distributions and minority interest $14,895 $18,996 ==================== =============== Distributions to Preferred Stockholders (84.4%) 4,231 5,641 Distributions to Preferred Unitholders minority interest (15.6%) 784 1,045 -------------------- --------------- Total Distributions to Preferred Stockholders $ 5,015 $ 6,686 ==================== =============== Income Available for Common Shareholders $ 9,880 $12,310 ==================== =============== Income allocated to common minority interest (27.0%) $ 2,664 $ 3,320 ==================== =============== Total Income allocated to minority interest $ 3,448 $4,365 ==================== =============== F-10 EX-23 2 CONSENT LETTER CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in (1) the Prospectus consitiuting part of the Registration Statement of First Washington Realty Trust, Inc. and Subsidiaries on Form S-3 (File No. 333-24017) and (2) the Registration Statements of First Washington Realty Trust, Inc. and Subsidiaries on Forms S-3 (File No. 333-24543, 333-44681, 333-66355 and 333-70837) and Forms S-8 (File No. 333-57237 and 333-57241) of our report dated February 12, 1999, on our audit of the combined Statement of Revenues and Certain Expenses for the Acquired Properties (as defined in footnote No. 1 to this statement) for the year ended December 31, 1997, which appears on page F-2 of this Form 8-K. PricewaterhouseCoopers LLP Washington, DC March 10, 1999 -----END PRIVACY-ENHANCED MESSAGE-----