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UNITED STATES
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)—July 9, 2003
American Spectrum Realty, Inc.
(Exact Name of Registrant as Specified in its Charter)
Maryland (State or other jurisdiction of incorporation) | 001-16785 (Commission File Number) | 522258674 (I.R.S. Employer Identification No.) |
7700 Irvine Center Drive, Suite 555, Irvine, CA 92618
(Address of Principal Executive Offices) (Zip Code)
(949) 753-7111
(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, If Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
During the current year through July 18, 2003, American Spectrum Realty, Inc. (the "Company"), as part of its future business plan to exit non-core markets, sold six of its properties for a total sales price of $34,646,000, which represents approximately 13.7% of the Company's consolidated assets reported as of December 31, 2002. The Company received net proceeds of approximately $7.7 million, of which $560,000 is being held in escrow as a source to assist the funding of a future acquisition in a tax-deferred exchange. The sales prices were negotiated amounts between the purchasers, which were unrelated parties, and the Company. The following table provides certain details on each property sold:
Sale Date | Property Name | Location | Property Type | Purchaser | ||||
---|---|---|---|---|---|---|---|---|
4/10/2003 | Sierra Valencia | Tucson, AZ | Industrial | Tuscon Property Investors, LLC | ||||
5/15/2003 | Villa Redondo | Long Beach, CA | Apartment | F&F Villa Redondo Associates, LP | ||||
7/9/2003 | Jackson Industrial A | Indianapolis, IN | Industrial | First Industrial, L.P. | ||||
7/9/2003 | Business Center | Earth City, MO | Industrial | First Industrial, L.P. | ||||
7/9/2003 | Northcreek Office Park | Cincinnati, OH | Office | First Industrial Development Services | ||||
7/18/2003 | Northeast Commerce Center | Loveland, OH | Industrial | First Industrial Acquisitions, Inc. |
Item 7. Financial Statements and Exhibits.
- (a)
- Financial statements of the business acquired. NOT APPLICABLE.
- (b)
- Pro forma financial statements.
The following unaudited pro forma consolidated financial statements are filed with this report:
Pro Forma Consolidated Balance Sheet as of March 31, 2003
Pro Forma Consolidated Statements of Operations:
Three Months Ended March 31, 2003
Year Ended December 31, 2002
The pro forma consolidated balance sheet presented as of March 31, 2003 reflects the financial position of the Company after giving effect to the sale of the properties assuming the sales occurred on March 31, 2003, and includes adjustments which give effect to events that are directly attributable to the transaction, are factually supportable and have a continuing impact.
The pro forma statements of operations are presented for the year ended December 31, 2002, and the three months ended March 31, 2003. The pro forma statements of operations present the Company's operations as if the transactions described in Item 2 had occurred on January 1, 2002.
American Spectrum Realty, Inc.
Pro Forma Consolidated Balance Sheet
As of March 31, 2003
(In 000's) | Historical | Pro Forma Adjustments | Pro Forma | ||||
---|---|---|---|---|---|---|---|
ASSETS | |||||||
Real estate held for investment | 237,740 | (22,424 | )(a) | 215,316 | |||
Accumulation depreciation | 16,191 | (1,716 | )(a) | 14,475 | |||
Real estate held for investment, net | 221,549 | (20,708 | ) | 200,841 | |||
Real estate held for sale | 13,926 | (13,926 | )(b) | — | |||
Cash and cash equivalents | 755 | 7,114(c | ) | 7,869 | |||
Tenant and other receivables, net of allowance for doubtful accounts | 806 | (13 | )(a) | 793 | |||
Deferred rents receivable | 643 | (67 | )(a) | 576 | |||
Deposits held in escrow | 279 | — | 279 | ||||
Investment in management company | 4,000 | — | 4,000 | ||||
Prepaid and other assets, net | 9,621 | 127(a | ) | 9,748 | |||
Total Assets | 251,579 | (27,473 | ) | 224,106 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Notes payable, net of premiums | 172,327 | (13,829 | )(a) | 158,498 | |||
Liabilities related to real estate held for sale | 11,543 | (11,543 | )(b) | — | |||
Notes payable to former limited partners | 237 | — | 237 | ||||
Accounts payable | 4,801 | (146 | )(a) | 4,655 | |||
Deferred tax liability | 6,082 | — | 6,082 | ||||
Accrued and other liabilities | 18,604 | (711 | )(a) | 17,893 | |||
Total Liabilities | 213,594 | (26,229 | ) | 187,365 | |||
Minority Interest | 8,895 | (150 | )(d) | 8,745 | |||
Commitments and Contingencies: | |||||||
Redeemable Common Stock | 300 | — | 300 | ||||
Stockholders' Equity: | |||||||
Preferred stock | — | — | — | ||||
Common stock | 55 | — | 55 | ||||
Additional paid in capital | 41,939 | — | 41,939 | ||||
Accumulated deficit | (11,444 | ) | (1,094 | )(d) | (12,538 | ) | |
Receivable from principal stockholders | (1,188 | ) | — | (1,188 | ) | ||
Deferred compensation | (572 | ) | — | (572 | ) | ||
Total stockholders equity | 28,790 | (1,094 | ) | 27,696 | |||
Total Liabilities and Stockholders' Equity | 251,579 | (27,473 | ) | 224,106 | |||
- (a)
- To eliminate the assets sold and the liabilities assumed or paid at closing for those assets classified as held for investment. Based on amounts included in the consolidated balance sheet on March 31, 2003.
- (b)
- To eliminate the assets sold and liabilities assumed or paid for those assets classified as held for sale.
- (c)
- Net proceeds after certain payments at closing. Funds were used to pay payables and certain accruals.
- (d)
- Assumes sale of properties occurred on March 31, 2003.
American Spectrum Realty, Inc.
Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2003
(In 000's) | Historical | Pro Forma Adj's (a) | Pro Forma | ||||
---|---|---|---|---|---|---|---|
REVENUES: | |||||||
Rental revenue | 8,848 | (907 | ) | 7,941 | |||
Interest and other income | 10 | — | 10 | ||||
Total revenues | 8,858 | (907 | ) | 7,951 | |||
EXPENSES: | |||||||
Property operating | 3,639 | (393 | ) | 3,246 | |||
General and administrative | 1,593 | — | 1,593 | ||||
Depreciation and amortization | 3,003 | (320 | ) | 2,683 | |||
Interest expense | 3,297 | (264 | ) | 3,033 | |||
Total expenses | 11,532 | (977 | ) | 10,555 | |||
Net loss before minority interest | (2,674 | ) | 70 | (2,604 | ) | ||
Minority interest | 294 | (8 | ) | 286 | |||
Net loss from continuing operations | (2,380 | ) | 62 | (2,318 | ) | ||
Basic per share data: | |||||||
Net loss from continuing operations | (0.43 | ) | 0.01 | (0.42 | ) | ||
Number of shares used | 5,545,075 | 5,545,075 | 5,545,075 | ||||
- (a)
- To eliminate the results of operations for the properties sold for the entire period.
American Spectrum Realty, Inc.
Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2002
(In 000's) | Historical | Pro Forma Adj's (a) | Pro Forma | ||||
---|---|---|---|---|---|---|---|
REVENUES: | |||||||
Rental revenue | 38,043 | (5,266 | ) | 32,777 | |||
Interest and other income | 209 | — | 209 | ||||
Total revenues | 38,252 | (5,266 | ) | 32,986 | |||
EXPENSES: | |||||||
Property operating | 14,763 | (1,729 | ) | 13,034 | |||
General and administrative | 8,586 | — | 8,586 | ||||
Depreciation and amortization | 11,691 | (1,614 | ) | 10,077 | |||
Interest expense | 13,779 | (1,774 | ) | 12,005 | |||
Litigation settlement | 1,200 | — | 1,200 | ||||
Impairment of real estate assets | 4,746 | (1,359 | ) | 3,387 | |||
Total expenses | 54,765 | (6,476 | ) | 48,289 | |||
OTHER INCOME (LOSS): | |||||||
Net loss on sale of real estate assets | (47 | ) | — | (47 | ) | ||
Net loss on extinguishment of debt | (53 | ) | — | (53 | ) | ||
Total other income (loss) | (100 | ) | — | (100 | ) | ||
Net loss before income tax benefit, | |||||||
minority interest and discontinued operations | (16,613 | ) | 1,210 | (15,403 | ) | ||
Income tax benefit | 7,083 | — | 7,083 | ||||
Net loss before minority interest and discontinued operations | (9,530 | ) | 1,210 | (8,320 | ) | ||
Minority interest | 935 | (133 | ) | 802 | |||
Net loss from continuing operations | (8,595 | ) | 1,077 | (7,518 | ) | ||
Loss on sale of properties (b) | — | (3,028 | ) | (3,028 | ) | ||
Net loss from continuing operations and loss on sale of properties | (8,595 | ) | (1,951 | ) | (10,546 | ) | |
Basic per share data: | |||||||
Net loss from continuing operations | (1.55 | ) | 0.19 | (1.36 | ) | ||
Loss on sale of properties | — | (.55 | ) | (.55 | ) | ||
Net loss from continuing operations and loss on sale of properties | (1.55 | ) | (.36 | ) | (1.91 | ) | |
Number of shares used | 5,534,348 | 5,534,348 | 5,534,348 | ||||
- (a)
- To eliminate the results of operations for the properties sold for the entire period.
- (b)
- Assumes the sales of the properties occurred on January 1, 2002. Loss significantly higher than expected to be reported due to the higher basis in the properties, ie depreciation taken from January 1, 2002 through the date of the sales reflected in the pro forma loss.
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.
AMERICAN SPECTRUM REALTY, INC. | |||
By: | /s/ WILLIAM J. CARDEN Name: William J. Carden Title: Chairman of the Board, President, Acting Chief Financial Officer and Chief Executive Officer |
Date: July 24, 2003
American Spectrum Realty, Inc. Pro Forma Consolidated Balance Sheet As of March 31, 2003
American Spectrum Realty, Inc. Pro Forma Consolidated Statement of Operations For the Three Months Ended March 31, 2003
American Spectrum Realty, Inc. Pro Forma Consolidated Statement of Operations For the Year Ended December 31, 2002
SIGNATURES