SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
Washington, DC 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) January 12, 1998
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Florida 1-12298 59-3191743
(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (904)-356-7000
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. PENDING ACQUISITION OF ASSETS
Regency Realty Corporation (the "Company") announced on January 12, 1998 that it
had entered into an agreement to acquire the real estate assets of entities
comprising the Midland Group ("Midland") consisting of 21 shopping centers (the
"Midland Properties") plus a development pipeline of 12 shopping centers. Of the
21 centers to be acquired, 20 are anchored by Kroger and King Soopers, a Kroger
subsidiary. Eight of the shopping centers included in the development pipeline
will be owned through a joint venture in which the Company will own less than a
50% interest upon completion of construction.
At closing and during 1998, the Company will pay approximately $230.4 million to
acquire 21 properties and pay transaction costs through the issuance of units of
limited partnership interest valued at $26.58 per unit or cash of $47 million,
the assumption of $92.5 million of debt, and $90.9 million to pay off existing
secured real estate loans. The Company will incur additional costs to establish
reserves, pay severance, and prepay existing assumed loans. Subsequent to 1998,
the Company expects to pay approximately $12.7 million to acquire equity
interests in the development pipeline as the properties reach stabilization. The
Company may also be required to make payments aggregating $10.5 million through
the year 2000 contingent upon increases in net income from existing properties,
the development pipeline, and new properties developed or acquired in accordance
with the contribution agreement.
The factors considered by the Company in determining the price to be paid for
the shopping centers included historical and expected cash flow, nature of the
tenancies and terms of the leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs, physical condition and
location, and the anticipated impact on the Company's financial results. The
Company took into consideration capitalization rates at which it believes other
shopping centers have recently sold, but determined the purchase price on the
factors discussed above. No separate independent appraisals were obtained for
the properties acquired.
Consummation of the acquisition is subject, among other things, to Midland
partner and other third party consents. Amounts shown above for units issued and
cash payments to Midland partners are estimated amounts that are subject to
Midland partner approval.
OTHER EVENTS
The Company, through its wholly-owned subsidiaries (together the "Company")
acquired seven shopping centers (the "Acquisition Properties") during the months
of June through December, 1997. The individual purchase price of these
acquisitions, as provided below, did not individually exceed 10% of the
Company's total assets. The acquisitions were made pursuant to separate purchase
agreements, the sellers of which are unrelated to the Company. All of the
properties currently operate as neighborhood retail shopping centers, and will
continue as such. The purchase price of each shopping center was funded from the
Company's revolving line of credit with Wells Fargo Realty Advisors Funding,
Inc.
OTHER EVENTS (CONTINUED)
The factors considered by the Company in determining the price to be paid for
the shopping centers included historical and expected cash flow, nature of the
tenancies and terms of the leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs, physical condition and
location, and the anticipated impact on the Company's financial results. The
Company took into consideration capitalization rates at which it believes other
shopping centers have recently sold, but determined the purchase price on the
factors discussed above. No separate independent appraisals were obtained for
the Acquisition Properties.
The following summarizes the Acquisition Properties:
Property Purchase Acquisition Occupancy at
Name Price Date GLA City/State Acquisition
Rivermont Station $ 13,448,000 6-30-97 90,323 Atlanta, GA 98.0%
Lovejoy Station $ 7,099,500 6-30-97 77,336 Atlanta, GA 95.0%
Tamiami Trails $ 9,560,300 7-10-97 110,867 Miami, FL 93.0%
Gardens Square $ 9,723,700 9-19-97 90,258 Miami, FL 95.0%
Kingsdale $ 17,575,000 10-10-97 267,177 Columbus, OH 95.6%
Boynton Lks Plaza $ 12,893,500 12-01-97 130,724 Boynton Bch, FL 90.0%
Pinetree Plaza $ 2,534,927 12-23-97 53,866 Jacksonville, FL 95.0%
============= ========
Total $ 72,834,927 820,551
============= ========
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statements
(a) MIDLAND PROPERTIES
Audited Statement of Revenues and Certain Expenses for the year
ended December 31, 1996.
(b) GARDENS SQUARE
Audited Statement of Revenues and Certain Expenses for the year
ended December 31, 1996.
(c) PINETREE PLAZA
Audited Statement of Revenues and Certain Expenses for the year
ended December 31, 1996.
B. Pro Forma Financial Information
(a) REGENCY REALTY CORPORATION
Pro Forma Consolidated Balance Sheet, September 30, 1997
(unaudited)
Pro Forma Consolidated Statements of Operations for the Nine
Month Period ended September 30, 1997 and the Year ended
December 31, 1996 (unaudited)
C. Exhibits:
10. Material Contracts
* (a) Purchase and Sale Agreement dated May 22, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Cousins Real Estate Corporation as seller relating
to the acquisition of Rivermont Station Shopping Center.
* (b) Purchase and Sale Agreement dated May 22, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Cousins Real Estate Corporation as seller relating
to the acquisition of Lovejoy Station Shopping Center.
** (c) Purchase and Sale Agreement dated May 12, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Quantum Realty Partners, L.P. as seller relating to
the acquisition of Tamiami Trails Shopping Center.
** (d) Purchase and Sale Agreement dated July 9, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Miami Gardens Associates as seller relating to the
acquisition of Gardens Square Shopping Center.
** (e) Purchase and Sale Agreement dated September 19, 1997, between
RRC Acquisitions, Inc., a wholly-owned subsidiary of the Company
as purchaser and TBC Kingsdale, Inc. as seller relating to the
acquisition of Kingsdale Shopping Center.
(f) Purchase and Sale Agreement dated October 1, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Boynton Lakes Plaza Partnership as seller relating
to the acquisition of Boynton Lakes Plaza Shopping Center.
(g) Purchase and Sale Agreement dated October 7, 1997, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company as
purchaser and Meteor Industriebeteiligungsgesellschaft mbH as
seller relating to the acquisition of Pinetree Plaza Shopping
Center.
23. Consent of KPMG Peat Marwick LLP
- -------------------------
* Incorporated by reference to Form 10-Q filed August 11, 1997.
** Incorporated by reference to Form 10-Q filed November 13, 1997.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENCY REALTY CORPORATION
(registrant)
February 4, 1998 By:/s/ J. Christian Leavitt
----------------------------------
J. Christian Leavitt
Vice President and Treasurer
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
the Midland Properties for the year ended December 31, 1996. This financial
statement is the responsibility of management. Our responsibility is to express
an opinion on this statement of revenues and certain expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of the Midland
Properties was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the properties. The presentation is not intended to be a
complete presentation of the Midland Properties revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of the Midland Properties for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
November 21, 1997
MIDLAND PROPERTIES
Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
Revenues:
Minimum rent $ 11,997,123
Percentage rent 36,037
Recoveries from tenants 1,884,462
-------------
Total revenues 13,917,622
Operating expenses:
Operating and maintenance 1,174,141
Management fees 408,614
Real estate taxes 1,144,284
General and administrative 92,343
-------------
Total expenses 2,819,382
Revenues in excess of certain expenses $ 11,098,240
=============
See accompanying notes to statement of revenues and certain expenses.
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
1. Basis of Presentation
The statement of revenues and certain expenses combines the operations of
the following 20 shopping centers (Midland Properties), in which Midland
Development Group, Inc., or one of its affiliated entities, is the general
partner:
Square
Property Name Location Feet
Beckett Commons West Chester, OH 80,434
Bent Tree Plaza Raleigh, NC 79,503
Brookville Plaza Lynchburg, VA 63,664
Cherry Grove Plaza Cincinnati, OH 186,020
Creekside Arlington, TX 85,652
East Point Crossing Columbus, OH 81,320
Evans Crossing Evans, GA 76,580
Franklin Shopping Centers Franklin, KY 205,060
Hamilton Meadows Hamilton, OH 126,251
Lake Pine Plaza Raleigh, NC 76,490
Lake Shores Plaza Detroit, MI 85,478
North Gate Plaza Columbus, OH 85,100
Maynard Crossing Raleigh, NC 121,063
Shoppes at Mason Cincinnati, OH 80,880
St. Ann Square St. Ann, MO 82,498
Statler Square Staunton, VA 132,994
Village Center Southlake, TX 118,172
West Chester Plaza Westchester, OH 88,181
Windmiller Farms Columbus, OH 119,192
Worthington Park Centre Worthington, OH 91,192
This financial statement is prepared on the accrual basis of accounting in
conformity with generally accepted accounting principles.
Subsequent to December 31, 1996, the Midland Properties were acquired by
Regency Realty Corporation (RRC) in a transaction accounted for as a
purchase. All operations of the Midland Properties will be included in the
consolidated financial statements of RRC beginning at the acquisition
date.
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
1. Basis of Presentation, continued
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Midland Properties, have been excluded. RRC is not
aware of any material factors relating to the Midland Properties that
would cause the reported financial information not to be necessarily
indicative of future operating results. Costs not directly related to the
operation of the Midland Properties have been excluded, and consist of
interest, depreciation, professional fees, certain other non operating
expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. Operating Leases
For the year ended December 31, 1996, Kroger Supermarkets, an anchor
tenant in 18 of the 20 shopping centers, paid minimum rent of $6,315,460,
which exceeded 10% of the total minimum rent earned by all the Midland
Properties.
The Midland Properties are leased to tenants under operating leases with
expiration dates extending to the year 2022. Future minimum rent under
noncancelable operating leases as of December 31, 1996, excluding tenant
reimbursements of operating expenses and excluding additional contingent
rentals based on tenants' sales volume, are as follows:
Year ending December 31, Amount
1997 $ 17,564,921
1998 18,422,107
1999 17,620,074
2000 16,369,355
2001 15,652,802
=============
MIDLAND PROPERTIES
Notes to Statement of Revenues and Certain Expenses
4. Related Party Transactions
Midland Development Group, Inc., serves as managing agent for the Midland
Properties and receives a management fee of approximately 4% of minimum
and percentage rent, as adjusted and defined, which amounted to $408,614
for the year ended December 31, 1996.
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Gardens Square Shopping Center for the year ended December 31, 1996. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this statement of revenues and certain expenses based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Gardens Square
Shopping Center was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the property. The presentation is not intended to be a
complete presentation of Gardens Square Shopping Center revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Gardens Square Shopping Center for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
January 27, 1998
GARDENS SQUARE SHOPPING CENTER
Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
Revenues:
Minimum rent $ 934,590
Recoveries from tenants 323,245
-------------
Total revenues 1,257,835
Operating expenses:
Operating and maintenance 201,078
Management fees 50,340
Real estate taxes 137,533
General and administrative 18,589
-------------
Total expenses 407,540
Revenues in excess of certain expenses $ 850,295
=============
See accompanying notes to statement of revenues and certain expenses.
GARDENS SQUARE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation of
a 90,258 square foot shopping center (the "Property") located in Miami,
Florida.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1996, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase. All
operations of the Property will be included in the consolidated financial
statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and various other non operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
GARDENS SQUARE SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1996, the following tenants paid minimum
rent which exceeded 10% of the total minimum rent earned by the Property:
Minimum
Tenant Rent Paid
Publix Supermarkets $ 263,200
Eckerd Drugs 104,544
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2011. Future minimum rent under noncancelable
operating leases as of December 31, 1996, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based on
tenants' sales volume, are as follows:
Year ending December 31, Amount
1997 $ 984,141
1998 926,382
1999 825,996
2000 794,885
2001 594,413
=========
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Pinetree Plaza for the year ended December 31, 1996. This financial statement is
the responsibility of management. Our responsibility is to express an opinion on
this statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Pinetree Plaza
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and for inclusion in a Form 8-K of Regency
Realty Corporation and excludes material amounts, described in note 1, that
would not be comparable to those resulting from the proposed future operation of
the property. The presentation is not intended to be a complete presentation of
Pinetree Plaza revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Pinetree Plaza for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
January 27, 1998
PINETREE PLAZA
Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
Revenues:
Minimum rent $ 284,892
Recoveries from tenants 51,775
-------------
Total revenues 336,667
Operating expenses:
Operating and maintenance 51,834
Management fees 16,532
Real estate taxes 37,625
General and administrative 4,817
-------------
Total expenses 110,808
Revenues in excess of certain expenses $ 225,859
=============
See accompanying notes to statement of revenues and certain expenses.
PINETREE PLAZA
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1996
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation of
a 56,566 square foot shopping center (the "Property") located in Orange
Park, Florida.
The financial statement is prepared on the accrual basis of accounting in
conformity with generally accepted accounting principles.
Subsequent to December 31, 1996, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase. All
operations of the Property will be included in the consolidated financial
statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
PINETREE PLAZA
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1996, the following tenants paid minimum
rent which exceeded 10% of the total minimum rent earned by the Property:
Minimum
Tenant Rent Paid
Winn Dixie Stores, Inc. $ 120,405
Revco/Piece Goods Shops, Co. 42,330
Windsurfing Orange Park, Inc. 47,253
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2006 and including a new anchor tenant lease
signed during 1997 with Publix Supermarkets which begins in 1999. Future
minimum rent under noncancelable operating leases as of December 31, 1996,
excluding tenant reimbursements of operating expenses and excluding
additional contingent rentals based on tenants' sales volume, are as
follows:
Year ending December 31, Amount
1997 $ 295,760
1998 157,812
1999 420,936
2000 393,064
2001 396,954
=========
Regency Realty Corporation
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
(In thousands)
The following unaudited pro forma condensed consolidated balance sheet is based
upon the historical consolidated balance sheet of the Company as of September
30, 1997 as if the Company had acquired Midland and the Acquisition Properties
as of that date. The following pro forma condensed consolidated balance sheet
should be read in conjunction with the Company's annual report filed on Form
10-K for the year ended December 31, 1996, Form 10-Q for the period ended
September 30, 1997, and the pro forma consolidated statement of operations of
the Company and notes thereto included elsewhere herein.
The unaudited pro forma condensed consolidated balance sheet is not necessarily
indicative of what the actual financial position of the Company would have been
at September 30, 1997, nor does it purport to represent the future financial
position of the Company.
Regency Regency
Realty Realty
Corporation Midland Acquisition Corporation
Historical Properties Properties Pro Forma
Assets (a)
Real estate rental property, at cost $ 772,496 $ 230,400 33,004 (b) 1,035,900
Less: accumulated depreciation 37,130 - - 37,130
---------- ---------- ---------- ------------
Real estate rental property, net 735,366 230,400 33,004 998,770
---------- ---------- ---------- ------------
Construction in progress 16,211 - - 16,211
Investments in unconsolidated real estate partnerships 1,005 - - 1,005
---------- ---------- ---------- ------------
Total investments in real estate, net 752,582 230,400 33,004 1,015,986
---------- ---------- ---------- ------------
Cash and cash equivalents 14,031 - - 14,031
Accounts receivable and other assets 12,036 - - 12,036
---------- ---------- ---------- ------------
$ 778,649 $ 230,400 33,004 1,042,053
========== ========== ========== ============
Liabilities and Stockholders' Equity
Mortgage and other loans $ 236,277 $ 92,500 - 328,777
Acquisition and development line of credit 3,831 137,900 33,004 (b) 174,735
---------- ---------- ---------- ------------
Total Notes Payable 240,108 230,400 33,004 503,512
Tenant security and escrow deposits 2,226 - - 2,226
Accounts payable & other liabilities 16,002 - - 16,002
---------- ---------- ---------- ------------
Total Liabilities 258,336 230,400 33,004 521,740
---------- ---------- ---------- ------------
Minority interests in consolidated partnerships 8,504 - - 8,504
Redeemable partnership units 13,753 - - 13,753
---------- ---------- ---------- ------------
22,257 - - 22,257
---------- ---------- ---------- ------------
Stockholders' Equity
Common stock and additional paid in capital 519,540 - - 519,540
Distributions in excess of net income (21,484) - - (21,484)
---------- ---------- ---------- ------------
Total Stockholders' Equity 498,056 - - 498,056
---------- ---------- ---------- ------------
$ 778,649 $ 230,400 33,004 1,042,053
========== ========== ========== ============
See accompanying notes to pro forma condensed consolidated balance sheet.
Regency Realty Corporation
Notes to Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
(In thousands)
(a) At closing and during 1998, the Company will pay approximately
$230.4 million to acquire 21 properties and pay transaction costs
through the issuance of units of limited partnership interest valued
at $26.58 per unit or cash of $47 million, the assumption of $92.5
million of debt, and $90.9 million to pay off existing secured real
estate loans. Subsequent to 1998, the Company expects to pay
approximately $12.7 million to acquire equity interests in the
development pipeline as the properties reach stabilization. The
Company may also be required to make payments aggregating $10.5
million through the year 2000 contingent upon increases in net
income from existing properties, the development pipeline, and new
properties developed or acquired in accordance with the contribution
agreement.
(b) Represents the aggregate purchase price for Kingsdale Shopping
Center, Boynton Lakes Plaza and Pinetree Plaza. The other Acquisition
Properties (Rivermont Station, Lovejoy Station, Tamiami Trails, and
Gardens Square) were acquired prior to September 30, 1997 and are
therefore included in the Company's September 30, 1997 balance sheet.
Purchase
Price
--------------
Kingsdale Shopping Ctr 17,575
Boynton Lakes Plaza 12,894
Pinetree Plaza 2,535
--------------
$ 33,004
==============
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Nine Month Period ended
September 30, 1997 and the Year
ended December 31, 1996
(Unaudited)
(In thousands, except share and per share data)
The following unaudited pro forma consolidated statements of operations are
based upon the historical consolidated statements of operations for the nine
month period ended September 30, 1997 and the year ended December 31, 1996 and
are presented as if the Company had acquired Midland and the Acquisition
Properties as of January 1, 1996. Previously Reported Acquisitions represent
operating properties which the Company has acquired and reported on in two Form
8-K/A's dated June 6, 1997 and March 7, 1997. These pro forma consolidated
statements of operations should be read in conjunction with the Company's 1996
Form 10-K, and the Statement of Revenues and Certain Expenses of Midland
Properties, Garden Square and Pinetree Plaza and notes thereto included
elsewhere herein.
The unaudited pro forma consolidated statements of operations are not
necessarily indicative of what the actual results of the Company would have
been assuming the transactions had been completed as set forth above, nor does
it purport to represent the Company's results of operations in future periods.
For the Nine Month Period Ended September 30, 1997:
Regency Regency
Realty Previously Realty
Corporation Reported Midland Acquisition Pro Forma Corporation
Historical Acquisitions Properties Properties Adjustments Pro Forma
Real estate operating revenues: (a) (b) (c)
Minimum rent $ 49,925 6,659 13,093 4,898 - 74,575
Percentage rent 1,612 302 27 - - 1,941
Recoveries from tenants 11,303 1,344 1,875 1,324 - 15,846
Other recoveries and income - - 100 - - 100
Equity income of unconsolidated
partnerships 20 - - - - 20
----------- ----------- ---------- ---------- ---------- ------------
62,860 8,305 15,095 6,222 - 92,482
----------- ----------- ---------- ---------- ---------- ------------
Real estate operating expenses:
Operating and maintenance 9,967 1,142 969 1,310 - 13,388
Real estate taxes 6,049 844 1,517 758 - 9,168
----------- ----------- ---------- ---------- ---------- ------------
16,016 1,986 2,486 2,068 - 22,556
----------- ----------- ---------- ---------- ---------- ------------
Net Property Revenues 46,844 6,319 12,609 4,154 - 69,926
Third party revenues:
Leasing, brokerage and
development fees 4,804 735 - - - 5,539
Property management fees 1,484 325 - - - 1,809
----------- ----------- ---------- ---------- ---------- ------------
6,288 1,060 - - - 7,348
----------- ----------- ---------- ---------- ---------- ------------
Other expense (income):
General and administrative 7,761 683 622 - - 9,066
Depreciation & amortization 11,502 2,029 - - 3,300 (d) 16,831
Interest expense 14,749 5,035 - - 14,371 (e) 34,155
Interest income (729) (33) - - - (762)
----------- ----------- ---------- ---------- ---------- ------------
33,283 7,714 622 - 17,670 59,290
----------- ----------- ---------- ---------- ---------- ------------
Net income 19,849 (335) 11,987 4,154 (17,670) 17,984
Minority interest in consolidated
property partnerships (2,342) 1,010 - - - (1,332)
----------- ----------- ---------- ---------- ---------- ------------
Net income for common stockholders $ 17,507 675 11,987 4,154 (17,670) 16,652
=========== =========== ========== ========== ========== ============
Earnings per share (note (f)):
Primary $ 0.97 $ 0.90
=========== ============
Fully Diluted $ 0.97 $ 0.84
=========== ============
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Nine Month Period ended
September 30, 1997 and the Year
ended December 31, 1996
(Unaudited)
(In thousands, except share and per share data)
For the Year Ended December 31, 1996:
Regency Regency
Realty Previously Realty
Corporation Reported Midland Acquisition Pro Forma Corporation
Historical Acquisitions Properties Properties Adjustments Pro Forma
Real estate operating revenues: (a) (b) (c)
Minimum rent $ 34,706 25,564 11,997 7,088 - 79,355
Percentage rent 998 496 36 - - 1,530
Recoveries from tenants 7,729 4,994 1,884 1,879 - 16,486
Other recoveries and income - 321 - - - 321
Equity income of unconsolidated
partnerships 70 - - - - 70
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43,503 31,375 13,917 8,967 - 97,762
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Real estate operating expenses:
Operating and maintenance 7,656 9,329 1,174 1,822 - 19,981
Real estate taxes 4,409 2,875 1,144 1,032 - 9,460
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12,065 12,204 2,318 2,854 - 29,441
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Net Property Revenues 31,438 19,171 11,599 6,113 - 68,321
Third party revenues:
Leasing, brokerage and
development fees 2,852 3,576 - - - 6,428
Property management fees 592 879 - - - 1,471
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3,444 4,455 - - - 7,899
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Other expense (income):
General and administrative 6,048 2,547 501 - - 9,096
Depreciation & amortization 8,758 7,255 - - 3,891 (d) 19,904
Branch formation expenses - 108 - - - 108
Interest expense 10,777 12,259 - - 13,176 (e) 36,212
Interest income (666) - - - - (666)
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24,917 22,169 501 - 17,067 64,654
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Net income 9,965 1,457 11,098 6,113 (17,067) 11,566
Minority interest in consolidated
property partnerships - (696) - - - (696)
Preferred stock dividends (58) - - - - (58)
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Net income for common stockholders $ 9,907 761 11,098 6,113 (17,067) $ 10,812
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Earnings per share (note (f)):
Primary $ 0.96 $ 0.75
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Fully Diluted $ 0.96 $ 0.73
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See accompanying notes to pro forma consolidated statements of operations.
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Nine Month Period ended
September 30, 1997 and the Year
ended December 31, 1996
(Unaudited)
(In thousands, except share and per share data)
(a) Reflects revenues and certain expenses for the Previously Reported
Acquisitions for the period from January 1, 1997 to the respective
acquisition date of the property, and for the year ended December 31,1996,
as reported in Form 8-K/A dated June 6, 1997.
(b) Reflects revenues and certain expenses for the Midland Properties for the
nine month period ended September 30, 1997 and the year ended December
31, 1996.
(c) Reflects revenues and certain expenses of the Acquisition Properties for
the period from January 1, 1997 to the respective acquisition date of the
property and for the year ended December 31, 1996.
For the period from January 1, 1997 to the Acquisition Date
Property Acquisition Minimum Percentage Recoveries Operating & Real
Name Date Rent Rent from Tenants Maintenance Estate Taxes
---- ----------- ------------- ------------- ------------- -------------- -------------
Rivermont Station 6/30/97 $ 642 - 124 98 56
Lovejoy Station 6/30/97 306 - 64 45 29
Tamiami Trails 7/10/97 508 - 163 154 66
Gardens Square 9/19/97 671 - 232 194 99
Kingsdale Shopping Ctr 10/10/97 1,334 - 300 400 221
Boynton Lakes Plaza 12/1/97 1,159 - 391 347 250
Pinetree Plaza 12/23/97 279 - 51 72 37
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$ 4,898 - 1,324 1,310 758
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For the year ended December 31, 1996
Property Minimum Percentage Recoveries Operating & Real
Name Rent Rent from Tenants Maintenance Estate Taxes
---- ------------- ------------- ------------- -------------- -------------
Rivermont Station $ 1,294 - 251 199 112
Lovejoy Station 617 - 128 91 59
Tamiami Trails 970 - 311 294 127
Gardens Square 935 - 323 270 138
Kingsdale Shopping Ctr 1,720 - 387 516 285
Boynton Lakes Plaza 1,267 - 427 379 273
Pinetree Plaza 285 - 52 73 38
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$ 7,088 - 1,879 1,822 1,032
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(d) Depreciation expense is based upon the costs allocated to the buildings
acquired estimating the useful life. For properties under construction,
depreciation expense is calculated from the date the property is placed in
service through the end of the period. In addition, the nine month period
ended September 30, 1997 calculation reflects depreciation expense on the
Acquisition Properties from January 1, 1997 to the respective acquisition
date of the property.
For the year ended December 31, 1996
Property Building and Year Building Annual
Name Improvements Built/Renovated Useful Life Depreciation
---- ------------- --------------- ----------- -------------
Rivermont Station 9,548 1996 39 $ 245
Lovejoy Station 5,560 1995 38 146
Tamiami Trails 7,598 1987 30 253
Garden Square 7,151 1991 34 210
Kingsdale Shopping Center 10,023 1959 27 371
Boynton Lakes Plaza 9,618 1993 36 267
Pinetree Plaza 3,057 1982 25 122
Midland Properties 180,435 Ranging from Ranging from 2,275
1986 to 1996 29 to 40
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Pro forma depreciation expense for the year ended December 31, 1996 $ 3,891
=========
Pro forma depreciation expense for the nine month period
ended September 30, 1997 $ 3,300
=========
(e) To reflect interest expense on the acquisition and development line of
credit required to make the property acquisitions at the average interest
rate afforded the Company (7.4%) and the assumption of $92,500 of debt at
existing rates averaging 8.2%. For properties under construction, interest
expense is calculated from the date the property is placed in service
through the end of the period.
Pro forma interest expense for the year
ended December 31, 1996 $ 13,176
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Pro forma interest expense for the nine month period
ended September 30, 1997 $ 14,371
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(f) Earnings per share
December 31, September 30,
1996 1997
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Primary Common Shares and Per Share Calculation:
Total Primary Shares 15,380 19,956
Income from continuing operations for common stockholders 10,812 16,652
Minority Interest in RRLP 696 1,332
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Income for Primary Shareholders 11,508 17,984
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Primary earnings per share 0.75 0.90
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Fully Diluted Common Shares and Per Share Calculation:
Contingent Units as reported on in Form 8-K/A dated June 6, 1997. 1,020 1,020
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Total Fully Diluted Shares 16,400 20,976
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Required increase in income from real estate operations necessary
to earn contingent shares, less applicable depreciation on
increased purchase price. 439 (262)
Income from continuing operations before extraordinary item for
common stockholders for computation of fully diluted
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earnings per share 11,947 17,722
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Fully diluted earnings per share 0.73 0.84
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