SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) October 15, 1999
BRT REALTY TRUST
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(Exact name of registrant as specified in charter)
Massachusetts 1-7172 13-2755856
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State or other (Commission file no.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
BRT REALTY TRUST AND SUBSIDIARIES
CURRENT REPORT
on
FORM 8-K
Item 2. Acquisition or Disposition of Assets
On October 15, 1999, a subsidiary of BRT Realty Trust ("BRT") entered into
a joint venture effective September 1, 1999 with Kimco Realty Corporation
("Kimco"), whereby the subsidiary of BRT and a subsidiary of Kimco became
members in Blue Hen Venture, L.L.C. ("BHV"), a newly organized limited liability
company. The BRT subsidiary and the Kimco subsidiary will each have a 50%
interest in BHV and the Kimco entity will be the managing member. BHV will
primarily own, operate, and develop a corporate mall and retail center located
in Dover, Delaware.
Pursuant to the operating agreement, the subsidiary of BRT contributed to
BHV a 460,000 square foot enclosed facility (formerly a shopping mall) and five
free standing buildings containing 55,000 square feet of space. The entire
complex is contained on approximately 90 acres. The complex was transferred
subject to a net outstanding mortgage of approximately $6.8 million. Kimco
through its subsidiary contributed $4.6 million to BHV and caused an option to
acquire an approximately 40 acre parcel of land adjacent to the complex to be
assigned to BHV. The BRT subsidiary received a distribution from BHV of $4.6
million.
For purposes of this Current Report on Form 8-K, BRT is deemed to have
disposed of this property and it will no longer be consolidated into the results
of operations of BRT. BRT will account for its investment in BHV using the
equity method of accounting.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The pro forma financial information filed herewith is as follows:
Pro forma consolidated balance sheet
As of June 30, 1999................................. 3
Pro forma consolidated statement of operations for
the year ended September 30, 1998................... 4
Pro forma consolidated statement of operations for
the nine months ended June 30, 1999 ............... 5
1. Basis of Presentation
The accompanying pro forma consolidated balance sheet as of June 30, 1999
gives effect to the contribution of the property to BHV as if the transaction
had occurred as of October 1, 1998.
The accompanying pro forma consolidated statement of operations for the
year ended September 30, 1998 and the nine months ended June 30, 1999, reflects
the historical results of the Company adjusted to give effect to the
contribution of the property to BHV as if the transaction had occurred on
October 1, 1997 and October 1, 1998, respectively.
The pro forma consolidated financial statements have been prepared by
management. These pro forma financial statements may not be indicative of the
results that would have occurred had the transaction actually been consummated
on the date indicated. Also these results may not be indicative of the results
that will be achieved in the future. The pro forma consolidated balance sheet
and statement of operations should be read in conjunction with BRT's audited
financial statements for the year ended September 30, 1998 which are included in
the Company's Annual Report on Form 10-K.
BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA BALANCE SHEET
(Unaudited)
(amounts in thousands)
June 30, 1999
Historical Pro Forma BRT
BRT Adjustments Pro Forma
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ASSETS
Real estate loans:
Earning interest $ 47,798 $ - $ 47,798
Less allowance for possible losses 2,041 - 2,041
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45,757 - 45,757
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Real estate assets:
Foreclosed properties held for sale 15,005 (11,886) 3,119
Investment in real estate venture 613 3,153 3,766
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15,618 (8,733) 6,885
Less valuation allowance 349 - 349
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15,269 (8,733) 6,536
Cash and cash equivalents 25,055 4,039 29,094
Other assets 2,075 (470) 1,605
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Total Assets $ 88,156 $ (5,164) $ 82,992
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Note payable - Credit facility $ 2,365 $ - $ 2,365
Loans and mortgages payable 7,829 (6,757) 1,072
Accounts payable and accrued liabilities 2,102 2,102
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Total Liabilities 12,296 (6,757) 5,539
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Shareholders' Equity Preferred shares, $1 par value:
Authorized 10,000 shares, none issued - - -
Shares of beneficial interest, $3 par value:
Authorized number of shares - unlimited,
issued - 8,888 shares 26,665 - 26,665
Additional paid-in capital, net of
distributions of $5,171 81,521 - 81,521
Accumulated deficit (17,446) 1,593 (15,853)
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90,740 1,593 92,333
Cost of 1,723 treasury shares of
beneficial interest (14,880) - (14,880)
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Total Shareholders' Equity 75,860 1,593 77,453
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Total Liabilities and Shareholders' Equity $ 88,156 $ (5,164) $ 82,992
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BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
(Unaudited)
(amounts in thousands except for per share data)
For the year ended September 30, 1998
Historical Pro Forma BRT
BRT Adjustments Pro Forma
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Revenues:
Interest and fees on real estate loans $ 5,267 $ - $ 5,267
Operating income on real estate owned 4,104 (2,697) 1,407
Income from real estate venture 0 348 348
Other, primarily investment income 826 197 1,023
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Total Revenues 10,197 (2,152) 8,045
Expenses:
Interest-notes payable and loans payable 177 - 177
Advisor's fee 519 - 519
General and administrative 2,529 - 2,529
Operating expenses relating to real estate 2,374 (1,724) 650
Amortization and depreciation 357 - 357
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Total Expenses 5,956 (1,724) 4,232
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Income before gain on sale of foreclosed
properties held for sale and
available-for-sale securities 4,241 (428) 3,813
Net gain on sale of real estate loans and
foreclosed properties held for sale 8,090 1,934 10,024
Net realized gain on available-for-sale securities 1,257 - 1,257
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Net Income $13,588 $ 1,506 $15,094
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Income per share of Beneficial Interest:
Basic earnings per share $ 1.72 $ 0.19 $ 1.91
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Diluted earnings per share $ 1.71 $ 0.19 $ 1.90
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BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA STATEMENT OF OPERATIONS
(Unaudited)
(amounts in thousands except for per share data)
For the nine months ended June 30, 1999
Historical Pro Forma BRT
BRT Adjustments Pro Forma
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Revenues:
Interest and fees on real estate loans $ 5,770 $ - $ 5,770
Operating income on real estate owned 2,795 (2,151) 644
Income from real estate venture - 281 281
Other, primarily investment income 554 148 702
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9,119 (1,722) 7,397
Expenses:
Interest-notes payable and loans payable 391 - 391
Advisor's fee 450 - 450
General and administrative 2,395 - 2,395
Operating expenses relating to real estate 1,707 (1,381) 326
Amortization and depreciation 266 - 266
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Total Expenses 5,209 ( 1,381) 3,828
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Income before gain on sale of foreclosed
properties held for sale and
available-for-sale securities 3,910 (341) 3,569
Net gain on sale of real estate loans and
foreclosed properties held for sale 2,103 1,934 4,037
Net realized gain on available-for-sale securities 869 - 869
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Net Income $ 6,882 $ 1,593 $ 8,475
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Income per share of Beneficial Interest:
Basic earnings per share $ 0.96 $ 0.22 $ 1.18
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Diluted earnings per share $ 0.95 $ 0.22 $ 1.17
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2. Pro Forma Adjustments
Balance Sheet
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The adjustments to "Foreclosed properties held for sale", "Other assets", and
"Loans and mortgage payable", reflect the contribution of the property to BHV,
and the sale of 50% of the property.
The adjustment to "Cash and cash equivalents" reflects the net cash distributed
to the BRT subsidiary from BHV and net earnings for the period.
The adjustment to "Investment in real estate venture" reflects the initial
contribution by the BRT subsidiary to BHV.
The adjustment to "Accumulated deficit" reflects the gain recognized on the
contribution of the property to BHV, the distribution of cash from BHV and the
period earnings.
Statement of Operations
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The adjustments to "Operating income on real estate owned" and "Operating
expenses related to real estate" reflect the elimination of the operating
results of the property that was contributed to BHV.
The adjustment to "Income from real estate venture" reflects the equity earnings
of the interest in BHV and the earnings on the net proceeds received from its
contribution of the property to BHV.
The adjustment to "Other revenues, primarily investment income" reflects the
earnings on the net cash received from its contribution to the property.
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 thereunto duly authorized.
BRT REALTY TRUST
By: (s)Simeon Brinberg
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Simeon Brinberg, Secretary
Date: November 1, 1999