UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002.
OR
[ ]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 0-15465
BANYAN STRATEGIC REALTY TRUST
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Massachusetts 36-3375345
- ----------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
2625 Butterfield Road, Suite 101 N
Oak Brook, Illinois 60523
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (630) 218-7250
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 [ ].
Shares of beneficial interest outstanding
as of May 6, 2002: 15,496,806
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BANYAN STRATEGIC REALTY TRUST
Consolidated Statements of Net Assets in Liquidation
(Liquidation Basis)
March 31, 2002 and December 31, 2001
(Unaudited)
(Dollars in thousands)
March 31, December 31,
2002 2001
---------- -----------
ASSETS
- ------
Investment in Real Estate Held for Sale:
Land. . . . . . . . . . . . . . . . . . $ 3,137 3,137
Building. . . . . . . . . . . . . . . . 29,349 28,066
Building Improvements . . . . . . . . . 3,047 2,984
---------- ----------
35,533 34,187
Less: Accumulated Depreciation. . . . . (5,764) (5,764)
---------- ----------
29,769 28,423
---------- ----------
Cash and Cash Equivalents . . . . . . . . 5,798 7,493
Restricted Cash - Capital Improvements. . 244 212
Restricted Cash - Other . . . . . . . . . 1,732 2,095
Interest and Accounts Receivable. . . . . 152 212
Employees' Notes. . . . . . . . . . . . . 412 412
Notes Receivable. . . . . . . . . . . . . 2,264 2,264
Other Assets. . . . . . . . . . . . . . . 194 282
---------- ----------
Total Assets. . . . . . . . . . . . . . . $ 40,565 41,393
========== ==========
LIABILITIES
- -----------
Mortgage Loans Payable. . . . . . . . . . $ 21,482 21,555
Bonds Payable . . . . . . . . . . . . . . 3,400 3,900
Accrued Severance and Termination Costs . 2,037 2,018
Accounts Payable and Accrued Expenses . . 1,005 1,218
Accrued Real Estate Taxes . . . . . . . . 142 23
Accrued Interest Payable. . . . . . . . . 146 148
Unearned Revenue. . . . . . . . . . . . . 121 85
Security Deposits . . . . . . . . . . . . 95 87
---------- ----------
Total Liabilities . . . . . . . . . . . . 28,428 29,034
---------- ----------
Net Assets in Liquidation . . . . . . . . $ 12,137 12,359
========== ==========
The accompanying notes are an integral part
of the consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
Consolidated Statement of Changes in Net Assets in Liquidation
(Liquidation Basis)
For the Three Months Ended March 31, 2002
(Unaudited)
(Dollars in thousands)
Net Assets in Liquidation at December 31, 2001. . . . . $ 12,359
Interest Income on Cash and Cash Equivalents. . . . . . 118
Operating Loss. . . . . . . . . . . . . . . . . . . . . (310)
Recovery of Losses on Loans, Notes and
Interest Receivable . . . . . . . . . . . . . . . . . 46
Minority Interest in Consolidated Partnership . . . . . (76)
--------
Net Assets in Liquidation at March 31, 2002 . . . . . . $ 12,137
========
The accompanying notes are an integral part
of the consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
Consolidated Statement of Changes in Net Assets in Liquidation
(Liquidation Basis)
March 31, 2001
(Unaudited)
(Dollars in thousands)
Shareholders' Equity at December 31, 2000
(Going concern basis) . . . . . . . . . . . . . . . . $ 67,350
Adjustments to Liquidation Basis:
Liquidation and Termination Costs . . . . . . . . . . (810)
Elimination of Intangible Assets. . . . . . . . . . . (5,470)
Reclassification of Employees' Notes. . . . . . . . . 3,144
--------
Net Assets in Liquidation at December 31, 2000. . . . . 64,214
Interest Income on Employees' Notes . . . . . . . . . . 18
Interest Income on Cash and Cash Equivalents. . . . . . 49
Operating Income. . . . . . . . . . . . . . . . . . . . 2,509
Recovery of Losses on Loans, Notes and
Interest Receivable . . . . . . . . . . . . . . . . . 870
Depreciation. . . . . . . . . . . . . . . . . . . . . . (1,616)
Minority Interest in Consolidated Partnerships. . . . . (153)
Issuance of Shares. . . . . . . . . . . . . . . . . . . 54
Distributions Paid to Shareholders. . . . . . . . . . . (580)
--------
Net Assets in Liquidation at March 31, 2001 . . . . . . $ 65,365
========
The accompanying notes are an integral part
of the consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
Notes to Consolidated Financial Statements
March 31, 2002
(Unaudited)
(Dollars in thousands, except per share data)
1. FINANCIAL STATEMENT PRESENTATION
Readers of this quarterly report should refer to Banyan Strategic
Realty Trust's (the "Trust") audited consolidated financial statements for
the year ended December 31, 2001 which are included in the Trust's 2001
Form 10-K, as certain footnote disclosures which would substantially
duplicate those contained in such audited statements have been omitted from
this report.
Certain reclassifications have been made to the previously reported
2001 consolidated financial statements in order to provide comparability
with the 2002 consolidated financial statements. These reclassifications
have not changed the 2001 results.
2. LIQUIDATION OF THE TRUST
On January 5, 2001, the Trustees adopted a Plan of Termination and
Liquidation under which, the Trust will be dissolved, the obligations of
the Trust will be paid, appropriate reserves will be taken and the net
proceeds will be distributed to the shareholders. The Trust adopted the
liquidation basis of accounting effective January 1, 2001.
On May 17, 2001, the Trust sold 24 of its 27 properties for a total
sales price of $185,250. On March 14, 2002, the Trust acquired the
interests of its partner, M&J Wilkow, Ltd., in the Northlake Tower Shopping
Center property for a gross purchase price of $1,300. M&J Wilkow had an
18.1% interest in the property's cash flow and a 28.1% interest in its
capital proceeds.
On April 1, 2002, the Trust sold its University Square Business Center
for a total sales price of $8,450. The purchaser is USBC, LLC, an Alabama
limited liability company, whose principals include Alan C. Jenkins and
Joel L. Teglia. Mr. Jenkins is a principal in InterSouth Properties, Inc.,
the Trust's contract manager of the property, and Mr. Teglia is the
Executive Vice President and Chief Financial Officer of the Trust. Mr.
Teglia recused himself from all of the Trust's deliberations concerning the
sale of University Square. The net sales proceeds, after repayment of the
first mortgage on the property, adjustment for unfinished tenant
improvements, sales commissions, prorations and closing costs, were $3,312.
In addition, USBC, LLC paid the prepayment penalty of $732 associated with
the payoff of the first mortgage.
On May 1, 2002, the Trust sold its 6901 Riverport Drive in Louisville,
Kentucky for a total sales price of $5,652 to Riverport LLC and Riverport
Group, LLC. The net sales proceeds, after repayment of the bond
indebtedness, sales commission, prorations and closing costs were $2,116.
On May 1, 2002, the Trust signed a contract to sell its Northlake
Tower Shopping Center for a gross purchase price of $20,500. The purchase
contract contains a 45-day inspection period during which the purchaser may
terminate the contract without penalty. Additionally, the contract is
subject to the ability of the purchaser to obtain the approval of the
holder of the first mortgage to assume the existing first mortgage
financing. If the purchaser is unable to obtain approval to assume the
existing loan and it does not elect to avail itself of alternative
financing, the contract can be terminated by the purchaser without penalty.
If the sale is consummated, the Trust expects to realize net sales proceeds
of approximately $3,400 during the third quarter of 2002.
In August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets" which is effective for fiscal
years beginning after December 15, 2001. Application of the provisions of
this Statement are not expected to affect the earnings or financial
position of the Trust.
3. DISTRIBUTIONS
On May 1, 2002, the Trust declared a liquidating distribution of $0.30
per share payable on May 31, 2002, to shareholders of record as of May 16,
2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Certain statements in this quarterly report that are not historical in
fact constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are
based on our current expectations, estimates and projections. These
statements are not a guaranty of future performance. Without limiting the
foregoing, words such as "believes," "intends," "anticipates," "expects,"
and similar expressions are intended to identify forward-looking statements
which are subject to a number of risks and uncertainties, including, among
other things:
. general real estate investment risks;
. resolution of existing litigation;
. inability to collect interest and principal on notes
receivable;
. potential delisting of our shares by Nasdaq;
. condition of the United States economy in general and its
impact on real estate operations and values in particular;
. failure to sell our remaining property on terms beneficial to
the Trust, if at all;
. potential inadequacy of our cash reserves;
. increases in interest rates;
. adverse consequences of failure to qualify as a REIT;
. possible environmental liabilities; and
. failure or inability to comply with or effectuate the Plan
of Termination and Liquidation.
Actual results could differ materially from those projected in these
forward-looking statements. See "Managements's Discussion and Analysis of
Financial Condition and Results of Operations -Risk Factors" in the annual
report on Form 10-K for the year ended December 31, 2001 for a more
complete discussion.
We are a self-administered infinite life real estate investment trust
("REIT"), organized as a Massachusetts business trust. On January 5, 2001,
we adopted a Plan of Termination and Liquidation (the "Plan")under which
our Trust will be dissolved, the obligations of the Trust will be paid,
appropriate reserves will be taken and the net proceeds will be distributed
to our shareholders.
On May 17, 2001, we sold 24 of our 27 properties to affiliates of
Denholtz Management Corporation ("Denholtz") for a total sales price of
$185.25 million, of which $3 million was in the form of unsecured
promissory notes and the remainder was in cash, pursuant to a Purchase and
Sale Agreement dated January 8, 2001 as amended on March 30, 2001, April 9,
2001 and May 11, 2001. On March 14, 2002, we acquired the interests of our
partner, M&J Wilkow, Ltd., in the Northlake Tower Shopping Center property
for a gross purchase price of $1.3 million.
On April 1, 2002, we sold our University Square Business Center for a
total sales price of $8.45 million. The purchaser is USBC, LLC, an Alabama
limited liability company, whose principals include Alan C. Jenkins and
Joel L. Teglia. Mr. Jenkins is a principal in InterSouth Properties, Inc.,
the contract manager of the University Square property, and Mr. Teglia is
our Executive Vice President and Chief Financial Officer. Mr. Teglia
recused himself from all of our deliberations regarding the sale of
University Square. The net sales proceeds, after repayment of the first
mortgage on the property, adjustment for unfinished tenant improvements,
sales commission, prorations and closing costs, were approximately $3.3
million. In addition, USBC, LLC paid the prepayment penalty of
approximately $0.7 million associated with the payoff of the first
mortgage.
On May 1, 2002, we sold our 6901 Riverport Drive in Louisville,
Kentucky for a total sales price of approximately $5.7 million to Riverport
LLC and Riverport Group, LLC. The principals of these entities include
Daniel Smith. Mr. Smith, or entities owned or controlled by him, was a
joint venture partner with us on our Woodcrest property and also managed
our Commerce Center and Fountain Square properties. The net sales
proceeds, after repayment of the bond indebtedness, sales commission,
prorations and closing costs were approximately $2.1 million.
On May 1, 2002, we signed a contract to sell our Northlake Tower
Shopping Center for a gross purchase price of $20.5 million. The purchase
contract contains a 45-day inspection period during which the purchaser may
terminate the contract without penalty. Additionally, the contract is
subject to the ability of the purchaser to obtain the approval of the first
mortgagee to assume the existing first mortgage financing. If the
purchaser is unable to obtain approval to assume the existing loan and it
does not elect to avail itself of alternative financing, the contract can
be terminated by the purchaser without penalty. If the sale is
consummated, we expect to realize net sales proceeds of approximately $3.4
million during the third quarter of 2002.
RESULTS OF OPERATIONS
On January 5, 2001, we adopted a Plan of Termination and Liquidation
under which the Trust will be dissolved. As a result of the adoption of
the Plan, we began reporting on the liquidation basis of accounting
effective for the quarter ending March 31, 2001. Therefore, operations for
the three months ending March 31, 2002 and 2001 are reported on the
Consolidated Statement of Changes in Net Assets in Liquidation. The
Statement of Changes in Net Assets in Liquidation differs from the
Statement of Operations in that we no longer amortize deferred financing
fees and leasing commissions and we no longer record straight line rental
income. We do, however, deduct leasing commissions in the computation of
Operating Income.
For the three months ending March 31, 2002, our Net Assets in
Liquidation decreased by approximately $0.3 million from approximately
$12.4 million to approximately $12.1 million. This decrease is primarily
the result of operating loss of approximately $0.3 million and minority
interest of approximately $0.1 million decreased by approximately $0.1
million of interest income on cash and cash equivalents.
Prior to reporting the operating activity for quarter ending March 31,
2001, we adjusted our Shareholders' Equity as of December 31, 2000 as
reported on a going concern basis to the liquidation basis of accounting.
As a result, we recorded an adjustment of approximately $5.4 million
related to the write off of certain intangible assets, specifically leasing
commissions, deferred financing fees and straight-line rents receivable,
that were included in our total assets at December 31, 2000. In addition,
we recorded a charge of approximately $0.8 million for costs related to the
liquidation and termination of the Trust and reclassed approximately $3.1
million of employees' notes from shareholders' equity to assets.
For the three months ending March 31, 2001, our Net Assets in
Liquidation increased by approximately $1.2 million from approximately
$64.2 million at December 31, 2000 to approximately $65.4 million at
March 31, 2001. This increase is primarily the result of operating income
in the amount of approximately $2.5 million and recovery of losses on
loans, notes and interest receivable of approximately $0.9 million reduced
by depreciation expense of approximately $1.6 million, distributions to
shareholders in the amount of approximately $0.6 million and minority
interest of approximately $0.1 million. The recovery of losses on loans,
notes and interest receivable of approximately $0.9 million represents cash
received in respect of our interest in a liquidating trust established for
the benefit of the unsecured creditors of VMS Realty Partners and its
affiliates. Our interest in this liquidating trust had previously been
accorded no value in our financial statements.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002, our total assets were approximately $40.6 million,
a decrease of approximately $0.8 million from total assets at December 31,
2001 of approximately $41.4 million. Our liabilities totaled approximately
$28.4 million at March 31, 2002, a decrease of approximately $0.6 million
from approximately $29.0 million at December 31, 2001. At March 31, 2002,
our net assets in liquidation were approximately $12.1 million, a decrease
of approximately $0.3 million from approximately $12.4 million at
December 31, 2001.
Cash and cash equivalents consist of cash and short-term investments.
Our cash and cash equivalents balance decreased by approximately $1.7
million to approximately $5.8 million at March 31, 2002 from approximately
$7.5 million at December 31, 2001. The decrease in total cash and cash
equivalents was due primarily to our purchase of the interests of our
venture partner in the Northlake Tower Shopping Center property and
operating loss for the quarter.
Having made our two liquidating distributions, we have established
unrestricted cash reserves of $5.8 million and restricted cash held in
escrow for post closing adjustments of $1.5 million. We project that these
reserves will be sufficient to cover the net costs of operating the Trust
through its anticipated final liquidation, liquidation costs and contingent
liabilities related to pending litigation. In determining the adequacy of
these reserves, we have considered the impact that the sale of University
Square Business Center and 6901 Riverport Drive will have on our future net
operations. Together, the operations for these two properties generated
approximately $0.5 million of cash flow on an annual basis.
On May 1, 2002, our Board of Trustees declared our third liquidating
distribution in the amount of $0.30 per share. After making this
distribution, we will have distributed $5.25 per share pursuant to the
Plan. If we complete the sale of the Northlake Tower Shopping Center as
discussed above, we will receive net proceeds of approximately $3.4 million
or $0.215 per share. Also, unsecured notes receivable in the amount of
$2.3 million or $0.15 per share become due and payable on June 30, 2002.
The total amount of our remaining liquidating distributions will be
dependent on our success in realizing the projected net proceeds related to
the two pending transactions, as well as the costs to terminate and
liquidate the Trust and the ultimate resolution of the pending litigation
against Mr. Leonard G. Levine (See--Other-Litigation below). We intend to
continue our policy of making liquidating distributions when, and as often
as, circumstances permit.
PROPERTIES:
As of March 31, 2002, we owned interests, directly or indirectly
through our wholly owned subsidiaries, in the three properties set forth in
the table below. As described above, the University Square Business Center
was sold on April 1, 2002, and the Riverport property was sold on May 1,
2002. Also, as described above, we have executed a contract to sell our
Northlake property for a sale price of $20.5 million.
BANYAN STRATEGIC REALTY TRUST
PORTFOLIO SUMMARY
March 31, 2002
(Dollars in thousands)
Occu-
Debt Square pancy
Property Balance Footage % Description
- -------- ------- ------- ----- -----------
FLEX/INDUSTRIAL
- ---------------
6901 Riverport Leasehold interest
Drive (a)(b) subject to bond financing
Louisville, KY $ 3,400 322,100 55% and ownership of
(Sold May 1, improvements
2002)
OFFICE
- ------
University Square
Business Center (c) Fee ownership of land
Huntsville, AL 4,644 184,700 90% and improvements
(Sold April 1,
2002)
RETAIL
- ------
Northlake Tower
Shopping Leasehold interest pursuant
Center (d) to ground lease and
Atlanta, GA 16,838 321,600 98% ownership of improvements
------- ------- ---
Total $24,882 828,400 79%
======= ======= ---
(a) Riverport is 55% leased to The Apparel Group, Ltd. under a lease,
which expires in July of 2004. The remaining 146,352 square feet of
space are vacant and are presently being marketed for lease.
(b) The Riverport property is financed by an industrial revenue (low
floater) bond, which fully amortizes at a rate of $300,000 per year
over its term and which expires in December of 2014. At that time,
the ground lessee can acquire the fee interest at a cost of
approximately $0.5 million.
(c) The University Square Business Center is leased to approximately 50
tenants with lease terms averaging between three and five years.
(d) We have been advised by our tenant, AMC Theatres, that it has made a
determination to cease operations at the shopping center and was
seeking to terminate its lease in August of 2001. The AMC Theatres
did not cease operations and we have received no further
communication from the tenant with respect to cessation of operations
or the timing of any termination of its lease. The AMC Theatres
space comprises approximately 8.4% of the total leaseable space. The
loss of the revenue from the AMC lease may have a material adverse
impact on the net proceeds we could recover from the sale of this
property if a suitable replacement tenant is not located. The
remainder of the shopping center space is leased to approximately 50
tenants, primarily with long term leases.
OTHER - LITIGATION
On August 14, 2000, we exercised our rights under the Trust's
employment agreement with Mr. Leonard G. Levine by suspending him and
placing him on leave from his position as president. Simultaneously, we
initiated an arbitration proceeding as required under the employment
agreement. On October 5, 2000, Mr. Levine filed an action in the Circuit
Court of Cook County, Illinois asking the court to terminate the
arbitration proceedings by reason of improper forum. On October 18, 2000,
we filed a lawsuit against Mr. Levine in the Circuit Court of Cook County,
Illinois. Our complaint alleged violations of Mr. Levine's duty of loyalty
owed to the Trust.
On December 6, 2000, we and Mr. Levine, through our respective
attorneys, agreed to dismiss the arbitration action and Mr. Levine's
lawsuit challenging the arbitration and further agreed to resolve all
issues under Mr. Levine's employment contract within the lawsuit we have
filed against Mr. Levine in the Circuit Court of Cook County (the
"Employment Litigation").
On January 19, 2001, Mr. Levine filed an answer, affirmative defenses
and counterclaim in the Employment Litigation. The pleading generally
denies that Mr. Levine breached his fiduciary duties, raises various
defenses and seeks a judgment in favor of Mr. Levine and against us on the
counterclaim for money damages and also seeks a reinstatement to active
employment status. Discovery in this case has commenced and is continuing.
On May 2, 2001, Mr. Levine presented a motion for partial judgment on
the pleadings, which was denied at a hearing on July 19, 2001. We filed a
Third Amended Complaint on September 6, 2001, seeking, among other things,
$300,000 in compensatory damages and $3 million in punitive damages against
Mr. Levine in connection with various alleged breaches of fiduciary duty.
The factual bases underlying the Third Amended Complaint include
allegations that (i) Mr. Levine caused the Trust to pay on his account or
reimburse him for expenses that were not reasonable, ordinary and necessary
business expenses; (ii) during negotiations between the Trust and The Oak
Realty Group, Inc. (an entity solely owned by Mr. Levine) Mr. Levine
attempted to pressure the Trust into accepting Oak's offer to acquire the
Trust by revealing to one of the trustees that Oak had entered into certain
confidentiality and exclusivity agreements which had the effect of
excluding potential purchasers and/or capital providers from purchasing or
providing financing to a potential purchaser of the Trust, except through
Oak; (iii) Mr. Levine's failure to disclose to our Board of Trustees a
prior pattern and practice of obtaining unauthorized expense reimbursements
allows the Board to rescind Mr. Levine's 1999 Employment Contract and
legally estops Mr. Levine from obtaining any benefits under that contract
and (iv) Mr. Levine's prosecution of a shareholder derivative action from
January to April of 2001, which action was resolved by summary judgment in
favor of the Trust, amounts to a separate breach of fiduciary duty by
Mr. Levine. Mr. Levine has answered all counts.
On May 7, 2001, we amended our answer to Mr. Levine's counterclaim in
the Employment Litigation to add several affirmative defenses based upon
Mr. Levine's breaches of his fiduciary duty of loyalty. The maximum
potential liability in connection with Mr. Levine's contract (inclusive of
incentives but exclusive of base salary) is estimated to be approximately
$1.8 million. During the pendency of the litigation, we continue to pay a
base salary to Mr. Levine. We are seeking recovery of these payments,
among other recoveries, in the litigation.
A case management conference in the Employment Litigation was held on
October 18, 2001. Judge Richard A. Siebel of the Circuit Court of Cook
County ordered: (i) all written fact discovery must be concluded by
January 31, 2002; (ii) all non-expert depositions must be concluded by
April 30, 2002; and (iii) a further status hearing for the purpose of
setting a date for the close of discovery will be held on May 17, 2002.
Judge Siebel's October 18, 2001 scheduling order was modified as a result
of a motion brought by Mr. Levine on January 31, 2002. The revised
schedule calls for: (i) the conclusion of all written fact discovery by
March 31, 2002; (ii) the conclusion of all non-expert depositions by
June 30, 2002; and (iii) a further status hearing on May 17, 2002.
On December 17, 2001, we filed a motion for partial summary judgment
in the Employment Litigation. This motion sought a ruling by the court
that the Trust had "just cause" to terminate Mr. Levine's employment
contract at the time we placed Mr. Levine on suspension on August 14, 2000.
The motion was heard and denied on April 4, 2002. On the same date, the
court extended the deadline for the completion of written fact discovery
from March 31, 2002 to May 31, 2002.
On March 18, 2002, Mr. Levine filed a motion for judgment on the
pleadings which sought a judgment in favor of Mr. Levine on Counts I, IV
and VI of our Third Amended Complaint. On May 1, 2002, Judge Siebel
granted the motion (without prejudice) in regard to Count I and denied the
motion in regard to Counts IV and VI. We will be seeking leave of the
Court to file a Fourth Amended Complaint in the near future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We do not engage in any hedging transactions nor in the ownership of
any derivative financial instruments. To mitigate the impact of
fluctuations in interest rates, we generally have maintained over 70% of
our debt as fixed rate in nature by borrowing on a long-term basis.
As of March 31, 2002, we had approximately $24.9 million of
outstanding long-term debt, of which $3.4 million bears interest at
variable rates that are adjusted on a monthly basis. As of March 31, 2002,
the weighted-average interest rate on this variable rate debt was 3.07%.
If interest rates on this variable rate debt increased by one percentage
point (1%), interest expense would increase by $34,000 on an annual basis.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (see Exhibit Index included elsewhere herein).
(b) Reports on Form 8-K:
. dated February 13, 2002, filed February 15, 2002
including Item 7;
. dated February 21, 2002, filed February 22, 2002
including Item 7;
. dated March 4, 2002, filed March 5, 2002 including
Item 7;
. dated March 15, 2002, filed March 18, 2002 including
Item 7; and
. dated March 25, 2002, filed March 26, 2002 including
Item 7.
SIGNATURES
PURSUANT to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on our behalf
and in the capacities and on the dates indicated.
BANYAN STRATEGIC REALTY TRUST
By: /s/ L.G. Schafran Date: May 6, 2002
------------------------------
L.G. Schafran,
Interim President
By: /s/ Joel L. Teglia Date: May 6, 2002
------------------------------
Joel L. Teglia,
Executive Vice President and
Chief Financial Officer
EXHIBIT
INDEX
- -------
2.1 Plan of Termination and Liquidation (1)
3.1 Third Amended and Restated Declaration of Trust dated as of
August 8, 1986, as amended on March 8, 1991, May 1, 1993,
August 12, 1998 and December 13, 1999, including Certificate of
designations, preferences and rights of Series A convertible
preferred shares. (2)
3.2 First Amendment of Third Amended and Restated Declaration of
Trust effective December 13, 1999. (3)
3.3 By-Laws dated March 13, 1996. (4)
3.4 BSRT UPREIT Limited Partnership Limited Partnership Agreement (5)
4.1 Convertible Term Loan Agreement dated as of October 10, 1997
among Banyan Strategic Realty Trust, as Borrower, and the
Entities listed therein, as Lenders. (6)
4.2 First Amendment to Convertible Term Loan Agreement dated as of
March 30, 1998 made by and among Banyan Strategic Realty Trust
and the Entities listed therein, as Lenders. (7)
4.3 Second Amendment to Convertible Term Loan Agreement dated as of
June 26, 1998 made by and among Banyan Strategic Realty Trust and
the Entities listed therein, as Lenders. (8)
4.4 Revolving Credit Agreement dated April 30, 1998 among Banyan
Strategic Realty Trust, as Borrower and the Capital Company of
America, as Lender. (9)
4.5 Loan Agreement dated May 22, 1998 among BSRT Fountain Square
L.L.C., BSRT Phoenix Business Park L.L.C., BSRT Newtown Trust,
BSRT Southlake L.L.C., BSRT Technology Center L.L.C., BSRT
Airways Plaza L.L.C., BSRT Peachtree Pointe L.L.C., BSRT Avalon
Center L.L.C., BSRT Sand Lake Tech Center L.L.C., BSRT Park
Center L.L.C., BSRT Metric Plaza L.L.C., and BSRT University
Corporate Center L.L.C., as Borrower, and the Capital Company of
America, as Lender. (8)
4.6 First Amendment to Loan Agreement dated September 11, 1998 among
BSRT Fountain Square L.L.C., BSRT Phoenix Business Park L.L.C.,
BSRT Newton Trust, BSRT Southlake L.L.C., BSRT Technology Center
L.L.C., BSRT Airways Plaza L.L.C., BSRT Peachtree Pointe L.L.C.,
BSRT Avalon Center L.L.C., BSRT Sand Lake Tech Center L.L.C.,
BSRT Park Center L.L.C., BSRT Metric Plaza L.L.C., and BSRT
University Corporate Center L.L.C., as Borrower, and the Capital
Company of America LLC, as Lender. (10)
4.7 Loan Agreement dated June 22, 1998 between Banyan/Morgan
Wisconsin L.L.C., and Banyan/Morgan Elmhurst L.L.C., as Borrower
and the Capital Company of America, as Lender. (8)
4.8 First Amendment to Loan Agreement dated September 11, 1998
between Banyan/Morgan Wisconsin L.L.C., and Banyan/Morgan
Elmhurst L.L.C., as Borrower and the Capital Company of America
LLC, as Lender. (10)
10.1 Employment Agreement of L.G. Schafran dated October 26, 2000.
(14)
10.2 First Amendment to Employment Agreement of L.G. Schafran dated
February 13, 2002. (15)
EXHIBIT
INDEX
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10.3 Employment Agreement of Leonard G. Levine as of December 14,
1999. (2)
10.4 Employment Agreement of Leonard G. Levine as of October 1, 1997.
(11)
10.5 Employment Agreement of Joel L. Teglia dated November 1, 2000.
(14)
10.6 Employment Agreement of Joel L. Teglia dated December 31, 1998.
(5)
10.7 Employment Agreement of Robert G. Higgins dated September 1,
2000. (14)
10.8 Separation Agreement of Neil Hansen dated October 1, 2000. (14)
10.9 Separation Agreement of Jay Schmidt dated October 1, 2000. (14)
10.10 1997 Omnibus Stock and Incentive Plan dated July 9, 1997. (12)
10.11 Share Purchase Agreement by and among Banyan Strategic Realty
Trust and the Purchasers listed on the signature page attached
thereto dated as of October 10, 1997. (6)
10.12 Registration Rights Agreement dated as of October 10, 1997
between Banyan Strategic Realty Trust and the Purchasers listed
on the Signature Pages attached thereto. (6)
10.13 Registration Rights Agreement dated as of October 1, 1997 between
Banyan Strategic Realty Trust and Leonard G. Levine. (5)
10.14 Consulting Agreement dated as of February 18, 2000 between CFC
Advisory Services Limited Partnership and Banyan Strategic Realty
Trust. (13)
10.15 Modification to Consulting Agreement dated as of May 31, 2000
between CFC Advisory Services Limited Partnership and Banyan
Strategic Realty Trust. (13)
10.16 Purchase and Sale Agreement dated January 8, 2001. (1)
10.17 First Amendment to Purchase and Sale Agreement dated March 28,
2001 (16)
10.18 Second Amendment to Purchase and Sale Agreement dated April 9,
2001 (17)
10.19 Third Amendment to Purchase and Sale Agreement dated May 11, 2001
(18)
21. Subsidiaries of Banyan Strategic Realty Trust (19)
99.7 Press release dated May 1, 2002. (*)
99.8 Press release dated May 2, 2002. (*)
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* Filed herewith.
(1) Incorporated by reference from the Trust's Form 8-K dated
January 8, 2001.
(2) Incorporated by reference from the Trust's Form 10-K for
the year ended December 31, 1999.
(3) Incorporated by reference from the Trust's Form 10-Q
dated March 31, 2000.
(4) Incorporated by reference from the Trust's Registration
Statement on Form S-11 (file number 33-4169).
(5) Incorporated by reference from the Trust's Form 10-K for
the year ended December 31, 1998.
(6) Incorporated by reference from the Trust's Form 8-K dated
October 14, 1997.
(7) Incorporated by reference from the Trust's Form 10-K/A
for the year ended December 31, 1997.
(8) Incorporated by reference from the Trust's Form 8-K dated
May 22, 1998.
(9) Incorporated by reference from the Trust's Form 10-Q
dated March 31, 1998.
(10) Incorporated by reference from the Trust's Form 8-K/A-1
dated August 14, 1998.
(11) Incorporated by reference from the Trust's Form 10-K
dated December 31, 1997.
(12) Incorporated by reference from the Trust's Form 10-Q for
the quarter ended June 30, 1997.
(13) Incorporated by reference from the Trust's Form 10-Q for
the quarter ended June 30, 2000.
(14) Incorporated by reference from the Trust's Form 10-Q for
the quarter ended September 30, 2000.
(15) Incorporated by reference from the Trust's Form 8-K dated
February 13, 2002.
(16) Incorporated by reference from the Trust's Form 8-K dated
March 28, 2001.
(17) Incorporated by reference from the Trust's Form 8-K dated
April 9, 2001.
(18) Incorporated by reference from the Trust's Form 10-Q for
the quarter ended March 31, 2001.
(19) Incorporated by reference from the Trust's Form 10-K for
the year ended December 31, 2001.