SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-8965 PRUDENTIAL REALTY TRUST (Exact name of Registrant as specified in its charter) Massachusetts 22-6400284 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) Prudential Plaza, Newark, New Jersey 07102-3777 (Address of principal executive offices) (Zip code) 201-802-4302 (Registrant's Telephone Number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO The number of shares outstanding as of November 14, 1995 was 11,135,000 Income Shares of Beneficial Interest ($.Ol par value, $8.00 stated value) and 11,135,000 Capital Shares of Beneficial Interest ($.Ol par value). <page 2> PRUDENTIAL REALTY TRUST (Registrant) INDEX Part I - Financial Information Page Item 1. Financial Statements (Unaudited) Statement of Net Assets - September 30, 1995 and July 1, 1995 3 Balance Sheet - December 31, 1994 and June 30, 1995 4 Statements of Operations - Six months ended June 30, 1995; nine months ended September 30, 1995; three months ended September 30, 1995 5 Statements of Cash Flows - Six months ended June 30, 1995; nine months ended September 30, 1994 6 Statement of Changes in Net Assets 7 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14 Part II - Other Information Item 1. Legal Proceedings 17 Item 2. Changes in Securities 17 Item 3. Defaults Upon Senior securities 17 Item 4. Submission of Matters to a Vote of Security Holders 17 Item 5. Other Information 18 Item 6. Exhibits and Reports on Form 8-K 18 Signature 19 <page 3> PRUDENTIAL REALTY TRUST STATEMENT OF NET ASSETS (in process of liquidation) (Unaudited) September 30, July 1, 1995 1995 ASSETS Cash and cash equivalents (Note 1) $30,559,531 $ 2,509,589 Real estate owned 29,470,718 77,109,942 Accounts receivable 1,896,624 1,945,469 Total assets 61,926,873 81,565,000 LIABILITIES Accounts payable and accrued expenses 3,137,280 4,517,295 Loans payable (Note 3) 0 18,062,123 Due to advisor 483,290 250,312 Security deposits 143,687 405,046 Other liabilities 0 97,651 Total liabilities 3,764,257 23,332,427 Commitments (Note 1) Net assets $58,162,616 $58,232,573 Income Shares issued and outstanding 11,135,000 11,135,000 Capital Shares issued and outstanding 11,135,000 11,135,000 See Notes to Financial Statements. <page 4> PRUDENTIAL REALTY TRUST BALANCE SHEET (going concern basis) June 30, December 31, 1995 1994 ASSETS (Unaudited) (Audited) Real Estate owned (net of accumulated depreciation and amortization and impairment of $55,011,433 in 1995 and $52,954,244 in 1994) $69,523,975 $71,514,788 Cash and cash equivalents 2,509,589 2,253,075 Accounts receivable (net of allowance for doubtful accounts of $11,552 in 1995 and 1994) 620,469 486,148 Prepaid expenses 239,455 83,333 Deferred rent receivables 2,523,701 2,366,718 Deferred financing costs (net of accumulated amortization of $95,750 in 1995 and $75,000 in 1994) 56,250 75,000 TOTAL ASSETS $75,473,439 $76,779,062 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable and accrued expenses $ 2,506,295 $ 2,376,430 Loans payable (Notes 3) 18,062,123 16,975,000 Due to advisor (Note 2) 250,312 276,108 Security deposits 405,046 403,443 Other liabilities 97,651 96,321 TOTAL LIABILITIES 21,321,427 20,127,302 Income Shares ($.01 par value,$8.00 stated value) 11,135,000 shares authorized, issued and outstanding 89,080,000 89,080,000 Capital Shares ($.01 par value) 11,135,000 shares authorized, issued and outstanding 111,350 111,350 Paid-in-capital 12,879,052 12,879,052 Distributions in excess of accumulated net income (47,918,390) (45,418,642) Total Shareholders' Equity 54,152,012 56,651,760 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $75,473,439 $76,779,062 See Notes to Financial Statements. <page 5> PRUDENTIAL REALTY TRUST STATEMENTS OF OPERATIONS (going concern basis) (Unaudited) Six Months Nine Months Three Months Ended Ended Ended June 30, September 30, September 30, 1995 1994 1994 REVENUES Property revenue $6,451,325 $ 8,467,791 $ 2,982,898 EXPENSES Operating expenses 2,407,996 3,817,853 1,304,484 Depreciation and amortization 2,115,784 2,771,524 984,983 Total expenses from operations 4,523,780 6,589,377 2,289,467 Income from operations 1,927,545 1,878,414 693,431 Interest income 57,954 22,814 12,072 Interest expense 635,774 558,938 204,296 Portfolio management fee and other expenses 1,879,673 1,107,368 360,698 Gain on sale of property 34,500 0 0 NET (LOSS) INCOME $ (495,448) $ 234,922 $ 140,509 NET (LOSS) PER INCOME SHARE $ (0.04) $ 0.02 $ 0.01 Number of shares of each class outstanding 11,135,000 11,135,000 11,135,000 See Notes to Financial Statements. <page 6> PRUDENTIAL REALTY TRUST STATEMENTS OF CASH FLOWS Increase (Decrease) in Cash and Cash Equivalents (going concern basis) (Unaudited) Six Months Nine Months Ended Ended June 30, September 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ (495,448) $ 234,922 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 2,115,784 2,771,524 Net rental concessions earned (156,983) (182,161) Changes in assets and liabilities: (Increase) in accounts receivable, prepaid expenses, and deferred financing costs (271,693) (264,145) (Decrease) increase in accounts payable and accrued expenses, due to advisor, security deposits and other liabilities 107,003 194,226 Gain on sale of property (34,500) 0 Net cash provided by operating activities 1,264,163 2,754,366 CASH FLOWS FROM INVESTING ACTIVITIES Additions to real estate owned (356,378) (2,786,120) Proceeds on sale of property 265,906 0 Net cash used in investing activities (90,472) (2,786,120) CASH FLOWS FROM FINANCING ACTIVITIES Repayment on credit agreement (16,001,877) (8,522,000) Drawdown on credit agreement 17,089,000 11,297,000 Distributions to Income Shareholders (2,004,300) (1,670,250) Net cash (used in) provided by financing activities (917,177) 1,104,750 Net increase in cash and cash equivalents 256,514 1,072,996 Cash and Cash equivalents-Beginning of period 2,253,075 516,908 Cash and Cash equivalents-End of period $2,509,589 $1,589,904 Supplemental information: Interest paid $ 583,348 $ 482,719 Taxes paid, state and local $ 75,000 $ 52,079 See Notes to Financial Statements <page 7> PRUDENTIAL REALTY TRUST STATEMENT OF CHANGES IN NET ASSETS (in process of liquidation) Net assets - going concern basis - June 30, 1995 $54,152,012 Estimated gain on sale of Park 100 5,352,689 Estimated loss on sale of Huntington Business Campus (2,612,924) Estimated gain on sale of Maple Plaza 4,846,202 Adoption of liquidation basis of accounting (2,819,406) Expected Trust net loss to expected date of liquidation (686,000) Net Assets - Liquidation basis - July 1, 1995 $58,232,573 Decrease in estimated gain on sale of Park 100 (98,173) Decrease in estimated loss on sale of Huntington Business Campus 586,838 Increase in estimated gain on sale of Maple Plaza 462,718 Provision for estimated Huntington Business Campus fire costs (905,000) Changes in expected Trust net loss to expected date of liquidation (116,340) Net assets in liquidation - September 30, 1995 $58,162,616 See Notes to Financial Statements. <page 8> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 NOTE 1 - SUMMARY TRUST DESCRIPTION AND BASIS OF FINANCIAL STATEMENT PREPARATION Prudential Realty Trust, a Massachusetts business trust (the "Trust"), was formed pursuant to a Declaration of Trust dated June 19, 1985 and amended August 20, 1985. Since its inception, the Trust has qualified as a real estate investment trust in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and anticipates that it will qualify as a real estate investment trust under the Code for the period ended September 30, 1995. On June 2, 1995, in furtherance of the Board of Trustee's (the "Board") desire to comply with the longstanding policy and intent of the Trust and in accordance with the Declaration of Trust (the "Declaration"), the Board adopted a series of resolutions to effect the liquidation and termination of the Trust, effective immediately prior to completion of the sale of the Trusts' Park 100 property located in Indianapolis, Indiana. The resolutions, among other things, authorize certain officers of the Trust to sell or otherwise liquidate the remaining properties of the Trust upon such terms as may be approved by a majority of the Unaffiliated Trustees (as defined in the Declaration), and require that, after paying or adequately providing for the payment of all liabilities of the Trust, the Trustees shall distribute the remaining Trust Estate (as defined in the Declaration), in cash or in kind or partly each, among the shareholders of the Trust according to their respective rights under the Declaration. The Trust entered into a Purchase and Sale Agreement dated June 7, 1995, with Security Capital Industrial Trust, a Maryland real estate investment trust, for the sale of the Trust's Park 100 property. On August 23, 1995, the Trust completed the sale for a sales price of $38.8 million, with net proceeds to the Trust of $37.3 million. <page 9> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 Since the liquidation plan became effective July 1, 1995, the accounting principles of the Trust changed to a liquidation basis with the principal effect being that all assets are being carried at net realizable value and liabilities have been stated at their estimated settlement amounts. Net realizable value is generally calculated as the sales price of the Trust assets less costs associated with the closing, including selling commissions, expenses and additional taxes related to the sale. On July 7, 1995, the Trust entered into a Purchase and Sale Agreement with Reckson FS Limited Partnership, a Delaware limited partnership, for the sale of its Huntington Business Campus property located in Melville, New York. On September 27, 1995, the Trust completed the sale for a sales price of $11.4 million, with net proceeds to the Trust of $11.1 million. On August 11, 1995, the Trust entered into a Purchase and Sale Agreement with Equitable Real Estate Investment Management, Inc., a Delaware corporation, for the sale of its Maple Plaza property located in Parsippany, New Jersey. On November 6, 1995, the Trust completed the sale for a sales price of $30 million, with net proceeds to the Trust of $29.5 million. The Trust had become aware that in years prior to 1993 it did not follow a procedural requirement of the Code and regulations thereunder regarding requesting and retaining certain information from large shareholders. As a result, the status of the Trust as a real estate investment trust in years prior to 1993 was uncertain even though the Trust believed that the substantive requirements of the Code were satisfied. The Prudential Realty Advisors, Inc., (the "Advisor") had agreed to indemnity the Trust against any resulting taxes and related costs Trust may have incurred. As the statute of limitations expired on September 15, 1995, the Trust does not believe that there will be any adverse effect on its results of operations or financial condition. Since the Trust intends to distribute all of its net taxable income to its shareholders, no provision has been made for federal income taxes. The Trust pays applicable state and local taxes. <page 10> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Because the Trust has adopted the liquidation basis of accounting on July 1, 1995, a balance sheet, statement of operations, and statement of cash flows are not provided for the period subsequent to June 30, 1995. For further information, refer to the financial statements and notes thereto included in the Trust's December 31, 1994, Annual Report on Form 10-K. NOTE 2 - RELATED PARTY TRANSACTIONS Transactions between the Trust and its affiliates for the six months ended June 30, 1995 and the nine months ended September 30, 1994 are summarized below. Six Months Nine Months Ended Ended June 30, September 30, 1995 1994 Fees incurred for asset management and other advisory services, provided by the advisor $ 498,100 $ 674,975 Fees incurred for property management, construction management and leasing services, provided by PREMISYS Real Estate Services, Inc. $ 280,957 $ 377,277 Rental revenue earned from space leased to various affiliates of the Advisor, excluding expense recoveries $ 703,164 $1,016,643 <page 11> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 Refer to Note 4, Litigation and Tender Offer, regarding a reimbursement of settlement costs the Advisor has agreed to make to the Trust. NOTE 3 - REVOLVING CREDIT AGREEMENT The Trust had a revolving Credit Agreement (the "Agreement") with First Fidelity Bank, N.A. New Jersey. The loan was paid off on August 24, 1995 with proceeds from the sale of Park 100. NOTE 4 - LITIGATION AND TENDER OFFER On April 5, 1995, Richard M. Osborne, a stockholder of the Trust, commenced a lawsuit in the Massachusetts Probate Court against the Trust and all Trustees, seeking to have the Trustees removed for allegedly engaging in "a pattern of conduct" to waste the Trust's assets by liquidating the Trust and paying high advisory fees. On April 14, 1995, Mr. Osborne and another stockholder filed another suit, in the Massachusetts Superior Court, making virtually the same allegations of breach of fiduciary duty by the Trustees and asking for treble damages. On May 30, 1995, The Trust responded to both actions by answering the complaint and filing counterclaims. On May 17, 1995, Black Bear Realty, Ltd., a newly-formed Ohio limited liability company, of which Richard M. Osborne is the sole managing member, commenced a tender offer to purchase all of the outstanding Capital Shares of the Trust upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 17, 1995, and the related letter of Transmittal. The tender offer was originally scheduled to expire on June 14, 1995, but was ultimately extended to July 17, 1995. <page 12> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 On July 17, 1995, the Trust, the Advisor, and the Trustees entered into a Settlement and Standstill Agreement with Mr. Osborne, Black Bear Realty, Ltd., and Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company of which Osborne is the sole managing member (the "Fund"). Pursuant to the Settlement Agreement, the parties agreed, among other things, to execute a stipulation of dismissal with prejudice of all claims, counterclaims and/or third party claims that were asserted by the parties and a joint motion for dismissal in the Probate Action and the Superior Court Action. Each of Mr. Osborne and the Fund agreed to withdraw their request for a special meeting of the shareholders of the Trust to be called to consider certain matters relating to the liquidation of the Trust and Black Bear Realty, Ltd. agreed not to extend the expiration date of the Offer beyond the then current expiration date of July 17, 1995. In consideration of the foregoing, the Trust agreed to pay Mr. Osborne an aggregate amount of $550,000. The Trust paid $550,000 to Mr. Osborne on July 19, 1995. The Advisor agreed to partially reimburse the Trust for settlement costs that were paid to Mr. Osborne or his affiliates pursuant to the Settlement Agreement. The amount of the reimbursement from the Advisor will not exceed $150,000 and will be paid only to the extent that the settlement costs pursuant to the Settlement Agreement exceed $400,000 net of any reimbursement received from the Trust's Directors and Officers liability insurance carrier. Also, in connection with the dismissal of the Osborne litigation, the Trust has agreed to pay the legal fees and expenses of the intervenor's counsel in the amount of $80,000. Other significant costs are $611,622 in legal costs related to the litigation and tender offer, and the liquidation of the Trust; $102,540 in investment banking fees related to the J.P. Morgan engagement, and $75,000 in information agent and mailing costs. <page 13> PRUDENTIAL REALTY TRUST NOTES TO FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 1995 NOTE 5 - EVENTS SUBSEQUENT TO SEPTEMBER 30, 1995 On November 6, 1995, the Trust completed the sale of its Maple Plaza properties for a sales price of $30 million, with net proceeds to the Trust of $29.5 million. As the Trust completed the sale of all its real estate assets, and in accordance with its plan of liquidation, the Trust will be terminated on December 1, 1995. The share transfer books of the Trust will be closed on November 16, 1995 and there will be no further trading in Income Shares after that date. Trading in the Capital Shares was suspended by the New York Stock Exchange on November 7, 1995. Upon the termination of the Trust, the Trust will file a Form 15 with the Securities and Exchange Commission to terminate its reporting obligations under the Securities Exchange Act of 1934. The Trust also announced that a distribution in the amount of $5.30 per Income Share will be made on December 1, 1995 to Income Shareholders of record on November 16, 1995. No distribution will be made to Capital Shareholders. The remaining assets and liabilities of the Trust will be transferred on December 1, 1995 to a liquidating trust. The Income Shareholders as of November 16, 1995 will be holders of beneficial interests in the liquidating trust in proportion to their former interests as Income Shareholders. Beneficial Interests in the liquidating trust will not be transferable, except upon death by will or intestate succession or by operation of law. <page 14> Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (a) Liquidity and Capital Resources On June 2, 1995, in furtherance of the Board's desire to comply with the longstanding policy and intent of the Trust and in accordance with the Declaration, the Board adopted a series of resolutions to effect the liquidation and termination of the Trust, effective immediately prior to completion of the sale of the Trust's Park 100 property located in Indianapolis, Indiana. (On August 3, 1995, this resolution was amended so that the liquidation plan becomes effective immediately prior to the sale of the Trust's Park 100, Huntington Business Campus, or Maple Plaza properties, whichever occurs first. The resolutions, among other things, authorize certain officers of the Trust to sell or otherwise liquidate the remaining properties of the Trust upon such terms as may be approved by a majority of the Unaffiliated Trustees (as defined in the Declaration), and require that, after paying or adequately providing for the payment of all liabilities of the Trust, the Trustees shall distribute the remaining Trust Estate (as defined in the Declaration), in cash or in kind or partly each, among the shareholders of the Trust according to their respective rights under the Declaration. The Trust entered into a Purchase and Sale Agreement dated June 7, 1995, with Security Capital Industrial Trust, a Maryland real estate investment trust, for the sale of the Trust's Park 100 property. On August 23, 1995, the Trust completed the sale for a sales price of $38.8 million, with net proceeds to the Trust of $37.3 million. On July 7, 1995, the Trust entered into a Purchase and Sale Agreement with Reckson FS Limited Partnership, a Delaware limited partnership, for the sale of its Huntington Business Campus property located in Melville, New York. On September 27, 1995, the Trust completed the sale for a sales price of $11.4 million, with net proceeds to the Trust of $11.1 million. <page 15> On July 25, 1995, there was a fire at the Trust's Huntington Business Campus property, which was contained almost immediately. The total cost of the fire damage as of November 14, 1995 was approximately $960,000. A claim has been submitted to the Trust's insurance carrier and management believes that a significant portion of the cost will be reimbursed. However, no reimbursement has been included in net assets in process of liquidation at September 30, 1995. On August 11, 1995, the Trust entered into a Purchase and Sale Agreement with Equitable Real Estate Investment Management, Inc., a Delaware corporation, for the sale of its Maple Plaza property located in Parsippany, New Jersey. On November 6, 1995, the Trust completed the sale for a sales price of $30 million, with net proceeds to the Trust of $29.5 million. The Trust's cash and cash equivalents totalled $30,559,531 at September 30, 1995, an increase of $28,306,456 over the December 31, 1994 balance of $2,253,075. The increase in cash is primarily due to $48.4 million in proceeds from the sale of two of the Trust's properties, offset by the retirement on August 24, 1995 of the Trust's line of credit of $18.2 million. Capital expenditures for the nine months ended September 30, 1995, totalled $463,184. For the nine months ended September 30, 1995, the Trust paid cash dividends totalling $3,006,450 ($0.27 per income share). This amount represents distributable cash generated from fourth quarter 1994 and first and second quarter 1995 operations. This is an 80% increase compared to dividends of $1,670,250 ($0.15 per income share) paid during the first nine months of 1994. This was primarily due to higher occupancy at the Trust's properties for the nine months ended September 30, 1995 versus 1994. On November 6, 1995, the Trust completed the sale of its Maple Plaza properties for a sales price of $30 million, with net proceeds to the Trust of $29.5 million. <page 16> As the Trust completed the sale of all its real estate assets, and in accordance with its plan of liquidation, the Trust will be terminated on December 1, 1995. The share transfer books of the Trust will be closed on November 16, 1995 and there will be no further trading in Income Shares after that date. Trading in the Capital Shares was suspended by the New York Stock Exchange on November 7, 1995. Upon the termination of the Trust, the Trust will file a Form 15 with the Securities and Exchange Commission to terminate its reporting obligations under the Securities Exchange Act of 1934. The trust also announced that a distribution in the amount of $5.30 per Income Share will be made on December 1, 1995 to Income Shareholders of record on November 16, 1995. No distribution will be made to Capital Shareholders. The remaining assets and liabilities of the Trust will be transferred on December 1, 1995 to a liquidating trust. The Income Shareholders as of November 16, 1995 will be holders of beneficial interests in the liquidating trust in proportion to their former interests as Income Shareholders. Beneficial Interests in the liquidating trust will not be transferable, except upon death by will or intestate succession or by operation of law. (b) Results of Operations As a result of the Trust adopting liquidation accounting in accordance with generally accepted accounting principles as of July 1, 1995 and thus not reporting results of operations thereafter, there is no management discussion comparing the corresponding 1995 and 1994 periods. <page 17> PART II Item 1. Legal Proceedings On April 5, 1995, Richard M. Osborne, a stockholder of the Trust, commenced a lawsuit in the Massachusetts Probate Court against the Trust and all Trustees, seeking to have the Trustees removed for allegedly engaging in "a pattern of conduct" to waste the Trust's assets by liquidating the Trust and paying high advisory fees. On April 14, 1995, Mr. Osborne and another stockholder filed another suit, in the Massachusetts Superior Court, making virtually the same allegations of breach of fiduciary duty by the Trustees and asking for treble damages. On May 30, 1995, the Trust responded to both actions by answering the complaint and filing counterclaims. On July 17, 1995, the Trust, the Advisor, and the Trustees entered into a Settlement and Standstill Agreement with Mr. Osborne, Black Bear Realty, Ltd., and Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company of which Osborne is the sole managing member (the "Fund"). Pursuant to the Settlement Agreement, the parties agreed, among other things, to execute a stipulation of dismissal with prejudice of all claims, counterclaims, and/or third party claims that were asserted by the parties and a joint motion for dismissal in the Probate Action and the Superior Court Action. Each of Mr. Osborne and the Fund agreed to withdraw their request for a special meeting of the shareholders of the Trust to be called to consider certain matters relating to the liquidation of the Trust and Black Bear Realty, Ltd. agreed not to extend the expiration date of the Offer beyond the then current expiration date of July 17, 1995. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None <page 18> Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K Reporting Date: August 4, 1995. Item Reported: Item 5, Other Events. The Trust reported that on July 17, 1995, the Trust, The Prudential Realty Advisors, Inc. and the trustees of the Trust, entered into a Settlement and Standstill Agreement with Richard M. Osborne, Turkey Vulture Fund XIII, Ltd., and Black Bear Realty, Ltd. In addition, the Trust reported second quarter 1995 dividend and earnings. Reporting Date: September 7, 1995. Items Reported: Item 2, Acquisition or Dispostion of Assets and Item 5, Other Events. The Trust reported that on August 23, 1995, the Trust completed the sale of its Park 100 properties for a sales price of $38.8 million, with net proceeds of $37.3 million. The Trust also reported that it entered into an Amended and Restated Purchase and Sale Agreement, dated August 23, 1995, with Reckson Operating Partnership, L.P. for the sale of the Trust's Huntington Business Campus properties located in Melville, Long Island, New York. Reporting Date: October 27, 1995. Items Reported: Item 2, Acquisition or Disposition of Assets and Item 5, Other Events. The Trust reported that on September 27, 1995, the Trust completed the sale of its Huntington Business Camous I & II properties for a sales price of $11.4 million, with net proceeds of $11.1 million. The Trust also reported that Thomas F. Murray, an unaffiliated Trustee of the Trust, passed away on October 10, 1995. Reporting Date: November 8, 1995. Item Reported: Item 5, Other Events. The Trust announced that it completed the sale of its Maple Plaza properties for a sales price of $30 million, with net proceeds to the Trust of $29.5 million. <page 19> As the Trust completed the sale of all its real estate assets, and in accordance with its plan of liquidation, the Trust will be terminated on December 1, 1995. The share transfer books of the Trust will be closed on November 16, 1995 and there will be no further trading in Income Shares after that date. Trading in the Capital Shares was suspended by the New York Stock Exchange on November 7, 1995. The Trust also announced that a distribution in the amount of $5.30 per Income Share will be made on December 1, 1995 to Income Shareholders of record on November 16, 1995. No distribution will be made to Capital Shareholders. The remaining assets and liabilities of the Trust will be transferred on December 1, 1995 to a liquidating Trust. The Income Shareholders as of November 16, 1995 will be holders of beneficial interests in the liquidating trust in proportion to their former interests as Income Shareholders. Beneficial Interests in the liquidating trust will not be transeferable, except upon death by will or intestate succession or by operation of law. <page 20> S I G N A T U R E 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. Prudential Realty Trust Registrant Date: November 14, 1995 By: /s/ James W. McCarthy James W. McCarthy Vice President, Comptroller and Principal Accounting Officer