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): June 5, 2014 (May 30, 2014)
Behringer Harvard Opportunity REIT II, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland | | 000-53650 | | 20-8198863 |
(State or other jurisdiction of incorporation
or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
15601 Dallas Parkway, Suite 600, Addison, Texas
75001 |
(Address of principal executive offices) |
(Zip Code) |
|
(866) 655-3600 |
(Registrant’s telephone number, including area code) |
|
None |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
On May 30, 2014, Behringer Harvard 1875 Lawrence, LLC, a wholly-owned subsidiary of Behringer Harvard Opportunity REIT II, Inc. (which may be referred to as the “Registrant”, “we”, “our”, or “us”) sold a 15-story office building totaling 192,000 square feet located in Denver, Colorado (“1875 Lawrence”), to an unaffiliated third party. The contract sales price was $46.7 million. A portion of the proceeds from the sale of the asset were used to pay off in full the existing indebtedness of approximately $15.6 million secured by the property. We acquired 1875 Lawrence on October 28, 2008.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
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(a) | Pro Forma Financial Information | |
| | |
| Unaudited Pro Forma Consolidated Financial Information | 3 |
| | |
| Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2014 | 4 |
| | |
| Unaudited Pro Forma Consolidated Statement of Operations for the three months ended March 31, 2014 | 5 |
| | |
| Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2013 | 6 |
| | |
| Unaudited Notes to Pro Forma Financial Statements | 7 |
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Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Financial Information
On May 30, 2014, we sold the property to an unaffiliated entity for a contract sales price of $46.7 million. A portion of the proceeds from the sale of the asset were used to pay off in full the existing indebtedness of approximately $15.6 million secured by the property.
The following unaudited pro forma consolidated financial information gives effect to the disposition of 1875 Lawrence. In our opinion, all material adjustments necessary to reflect the effects of the above transaction have been made.
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Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2014
(in thousands, except shares)
The following unaudited Pro Forma Consolidated Balance Sheet is presented as if we had disposed of 1875 Lawrence as of March 31, 2014. This Pro Forma Consolidated Balance Sheet should be read in conjunction with our Pro Forma Consolidated Statement of Operations and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the three months ended March 31, 2014. The Pro Forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had we completed the above transaction on March 31, 2014, nor does it purport to represent our future financial position.
| | March 31, 2014 | | Pro Forma | | | |
| | As Reported | | Adjustments | | Pro Forma | |
| | (a) | | (b) | | March 31, 2014 | |
Assets | | | | | | | |
Real estate | | | | | | | |
Land and improvements, net | | $ | 65,377 | | $ | (9,000 | ) | $ | 56,377 | |
Buildings and improvements, net | | 218,620 | | (25,069 | ) | 193,551 | |
Real estate under development | | 316 | | — | | 316 | |
Total real estate | | 284,313 | | (34,069 | ) | 250,244 | |
| | | | | | | |
Cash and cash equivalents | | 93,204 | | 30,074 | | 123,278 | |
Restricted cash | | 4,956 | | (240 | ) | 4,716 | |
Accounts receivable, net | | 2,187 | | (557 | ) | 1,630 | |
Prepaid expenses and other assets | | 1,277 | | — | | 1,277 | |
Investment in unconsolidated joint venture | | 12,112 | | — | | 12,112 | |
Furniture, fixtures and equipment, net | | 7,757 | | — | | 7,757 | |
Deferred financing fees, net | | 2,964 | | (392 | ) | 2,572 | |
Lease intangibles, net | | 1,493 | | (419 | ) | 1,074 | |
Total assets | | $ | 410,263 | | $ | (5,603 | ) | $ | 404,660 | |
| | | | | | | |
Liabilities and Equity | | | | | | | |
Notes payable | | $ | 211,446 | | $ | (15,621 | ) | $ | 195,825 | |
Accounts payable | | 695 | | — | | 695 | |
Payables to related parties | | 1,263 | | (5 | ) | 1,258 | |
Acquired below-market leases, net | | 294 | | — | | 294 | |
Distributions payable to noncontrolling interest | | 56 | | — | | 56 | |
Accrued and other liabilities | | 6,901 | | (747 | ) | 6,154 | |
Total liabilities | | 220,655 | | (16,373 | ) | 204,282 | |
| | | | | | | |
Commitments and contingencies | | | | | | | |
| | | | | | | |
Equity | | | | | | | |
Preferred stock, $.0001 par value per share; 50,000,000 shares authorized, none outstanding | | — | | — | | | |
Convertible stock, $.0001 par value per share; 1,000 shares authorized, 1,000 outstanding | | — | | — | | | |
Common stock, $.0001 par value per share; 350,000,000 shares authorized, 26,002,347 and 25,015,980 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | | 3 | | — | | 3 | |
Additional paid-in capital | | 232,786 | | — | | 232,786 | |
Accumulated distributions and net income (loss) | | (52,404 | ) | 10,770 | | (41,634 | ) |
Accumulated other comprehensive income | | 539 | | — | | 539 | |
Total Behringer Harvard Opportunity REIT II, Inc. equity | | 180,924 | | 10,770 | | 191,694 | |
Noncontrolling interest | | 8,684 | | — | | 8,684 | |
Total equity | | 189,608 | | 10,770 | | 200,378 | |
Total liabilities and equity | | $ | 410,263 | | $ | (5,603 | ) | $ | 404,660 | |
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
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Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2014
(in thousands, except per share amounts)
The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of 1875 Lawrence as of January 1, 2013. This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the three months ended March 31, 2014. The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on January 1, 2013 nor does it purport to represent our future operations.
| | Three Months Ended | | | | | |
| | March 31, 2014 | | Pro Forma | | Pro Forma | |
| | as Reported | | Adjustments | | Three Months Ended | |
| | (a) | | (b) | | March 31, 2014 | |
Revenues | | | | | | | |
Rental revenue | | $ | 7,881 | | $ | (582 | ) | $ | 7,299 | |
Hotel revenue | | 4,364 | | — | | 4,364 | |
Total revenues | | 12,245 | | (582 | ) | 11,663 | |
| | | | | | | |
Expenses: | | | | | | | |
Property operating expenses | | 2,724 | | (339 | ) | 2,385 | |
Hotel operating expenses | | 3,022 | | — | | 3,022 | |
Interest expense, net | | 2,063 | | (278 | ) | 1,785 | |
Real estate taxes | | 1,413 | | (175 | ) | 1,238 | |
Property management fees | | 427 | | (23 | ) | 404 | |
Asset management fees | | 970 | | — | | 970 | |
General and administrative | | 859 | | — | | 859 | |
Depreciation and amortization | | 3,662 | | (392 | ) | 3,270 | |
Total expenses | | 15,140 | | (1,207 | ) | 13,933 | |
| | | | | | | |
Interest income, net | | 46 | | 3 | | 49 | |
| | | | | | | |
Loss from continuing operations | | (2,849 | ) | 628 | | (2,221 | ) |
| | | | | | | |
Noncontrolling interest in continuing operations | | (35 | ) | — | | (35 | ) |
Net loss attributable to the Company | | $ | (2,884 | ) | $ | 628 | | $ | (2,256 | ) |
| | | | | | | |
Loss per share from continuing operations | | $ | (0.11 | ) | | | $ | (0.09 | ) |
Weighted average shares outstanding | | 26,011 | | | | 26,011 | |
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
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Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2013
(in thousands, except per share amounts)
The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of 1875 Lawrence as of January 1, 2013. This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2013. The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on January 1, 2013 nor does it purport to represent our future operations.
| | Year Ended | | | | | |
| | December 31, 2013 | | Pro Forma | | Pro Forma | |
| | as Reported | | Adjustments | | Year Ended | |
| | (a) | | (b) | | December 31, 2013 | |
| | | | | | | |
Revenues | | | | | | | |
Rental revenue | | $ | 28,517 | | $ | (2,851 | ) | $ | 25,666 | |
Hotel revenue | | 14,872 | | — | | 14,872 | |
| | | | | | | |
Total revenues | | 43,389 | | (2,851 | ) | 40,538 | |
| | | | | | | |
Expenses: | | | | | | | |
Property operating expenses | | 9,792 | | (1,360 | ) | 8,432 | |
Hotel operating expenses | | 11,363 | | — | | 11,363 | |
Interest expense, net | | 7,844 | | (1,113 | ) | 6,731 | |
Real estate taxes | | 4,716 | | (705 | ) | 4,011 | |
Property management fees | | 1,521 | | (112 | ) | 1,409 | |
Asset management fees | | 3,478 | | — | | 3,478 | |
General and administrative | | 4,243 | | — | | 4,243 | |
Acquisition expense | | 3,998 | | — | | 3,998 | |
Depreciation and amortization | | 13,978 | | (1,629 | ) | 12,349 | |
Total expenses | | 60,933 | | (4,919 | ) | 56,014 | |
| | | | | | | |
Interest income, net | | 128 | | 7 | | 135 | |
Other income | | 46 | | — | | 46 | |
| | | | | | | |
Loss from continuing operations before income taxes | | (17,370 | ) | 2,075 | | (15,295 | ) |
Provision for income taxes | | (183 | ) | — | | (183 | ) |
| | | | | | | |
Loss from continuing operations | | (17,553 | ) | 2,075 | | (15,478 | ) |
| | | | | | | |
Noncontrolling interest in continuing operations | | 577 | | — | | 577 | |
| | | | | | | |
Net loss attributable to the Company | | $ | (16,976 | ) | $ | 2,075 | | $ | (14,901 | ) |
| | | | | | | |
Loss per share from continuing operations | | $ | (0.65 | ) | | | $ | (0.57 | ) |
Weighted average shares outstanding | | 26,035 | | | | 26,035 | |
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
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Behringer Harvard Opportunity REIT II, Inc.
Unaudited Notes to Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Balance Sheet
a. Reflects our historical balance sheet as of March 31, 2014.
b. Reflects our disposition of 1875 Lawrence on May 30, 2014. Amounts represent the necessary adjustments to remove the assets and liabilities sold to the buyer as a result of the disposition.
Unaudited Pro Forma Consolidated Statement of Operations for Three Months Ended March 31, 2014
a. Reflects our historical operations for the three months ended March 31, 2014.
b. Reflects the historical revenues and expenses of 1875 Lawrence, including property management fees, and depreciation and amortization associated with the property.
Unaudited Pro Forma Consolidated Statement of Operations for Year Ended December 31, 2013
a. Reflects our historical operations for the year ended December 31, 2013.
b. Reflects the historical revenues and expenses of 1875 Lawrence, including property management fees, depreciation and amortization associated with the property.
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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.
| BEHRINGER HARVARD OPPORTUNITY REIT II, INC. |
| |
| |
Dated: June 5, 2014 | By: | /s/ Andrew J. Bruce |
| | Andrew J. Bruce |
| | Chief Financial Officer |
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