=============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) October 20, 1995 (October 19, 1995) NEW PLAN REALTY TRUST _______________________________________________________________________________ (Exact Name of Registrant as Specified in Charter) Massachusetts 0-7532 13-1995781 _______________________________________________________________________________ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 1120 Avenue of the Americas, New York, New York 10036 _______________________________________________________________________________ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (212) 869-3000 ____________________________ _______________________________________________________________________________ (Former Name or Former Address, if Changed Since Last Report) =============================================================================== Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 20, 1995 NEW PLAN REALTY TRUST By: /s/ Michael I. Brown _____________________ Michael I. Brown Chief Financial Officer and Controller Item 5. Other Events The Trust has recently entered into a contract to purchase nine shopping centers with approximately 1,679,000 gross rentable square feet for an aggregate purchase price of approximately $126 million, $88 million of which will be paid in cash and $38 million of which will be paid by assuming or taking subject to existing non-recourse mortgages. The acquisition, which is anticipated to close in November 1995, will increase the gross rentable square feet in the Trust's retail portfolio to approximately 17,800,000 gross rentable square feet. Although the Trust has completed a substantial portion of its due diligence review, there can be no assurance that these properties will be purchased. Set forth below is certain relevant information regarding the properties to be purchased in the acquisition. Occupancy Gross as of Rentable October Square 15, Property Feet Built Acres 1995 Major Tenants Delta Center Lansing, MI 173,619 1985 16 95% Service Merchandise Pet Food TJ Maxx Kids 'R Us Farmington Crossing 84,310 1985 8 93% Farmer Jack Farmington, MI Perry Drug Fashion Corners 188,933 1986 15 94% Kids 'R Us Saginaw, MI TJ Maxx Best Products Best Buy Genessee Crossing 119,006 1988 10 99% Burlington Coat Factory Flint, MI Hall Road Crossing 176,000 1985 27 93% Michaels Shelby, MI TJ Maxx Pet Food Gander Mountain Hampton Village 460,268 1990 91 96% Farmer Jack Centre TJ Maxx Rochester Hills, MI Dunham's Office Max Builders Square Star Theatre Michaels Barnes & Noble Westland Crossing 134,557 1985 20 90% Marshall's Westland, MI Franks Walkill Plaza 203,234 1986 24 86% Shop-Rite Middletown, NY Bradlee's(1) Rite Aid Midway Crossing 138,817 1986 15 100% Dunham's Elyria, OH TJ Maxx US Merchandise (1) Bradlee's recently filed a petition for bankruptcy under Chapter 11 of the United States Bankruptcy Code. The purchase contract for the acquisition provides that if the Bradlee's lease is rejected in bankruptcy, the aggregate purchase price for the acquisition will be reduced by $1.2 million. Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits. (a) and (b) Financial Statements of Businesses Acquired and Pro Forma Financial Information 1. Report of Eichler, Bergsman & Co., LLP, Independent Certified Public Accountants, dated October 18, 1995. 2. Certain properties acquired - Historical summary of revenues and certain operating expenses for the year ended July 31, 1995. 3. In addition, the following pro forma financial information is provided to reflect all Properties acquired: (i) New Plan Realty Trust and Subsidiaries - Information Pursuant to Rule 3-14 of Regulation S-X. (ii) New Plan Realty Trust and Subsidiaries - Pro forma condensed consolidated financial statements (unaudited): (a) Pro forma condensed consolidated statement of income for the year ended July 31, 1995. (b) Pro forma condensed consolidated balance sheet as of July 31, 1995. (c) Notes to pro forma condensed consolidated financial statements. c. Exhibits Included herewith is Exhibit No. 23, the Consent of the Independent Public Accountants. New Plan Realty Trust 1120 Avenue of the Americas New York, NY 10036 INDEPENDENT AUDITORS' REPORT We have audited the accompanying Historical Summary of Revenues and Certain Operating Expenses of Wallkill Plaza, Midway Crossing, Delta Center, Fashion Corners, Genesee Crossing, Westland Crossing, Farmington Crossroads, Hall Road Crossing, and Hampton Village Centre (the "Properties") for the year ended July 31, 1995. This Historical Summary is the responsibility of New Plan Realty Trust's management. Our responsibility is to express an opinion on this Historical Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion. The Historical Summary has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, and its use for any other purpose may be inappropriate. Accordingly, as described in the Note to the Historical Summary, the statement excludes interest, depreciation, and general and administrative expenses for the period examined, and is not intended to be a complete presentation of the Properties' revenues and expenses. In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain operating expenses (exclusive of interest, depreciation and general and administrative expenses) in conformity with generally accepted accounting principles. Eichler, Bergsman & Co., LLP New York, New York October 18, 1995 CERTAIN PROPERTIES ACQUIRED HISTORICAL SUMMARY OF REVENUES AND CERTAIN OPERATING EXPENSES FOR THE YEAR ENDED JULY 31, 1995 (In Thousands) Rental Income $19,218 Repairs and maintenance $2,357 Real estate taxes 2,664 Other operating expenses 780 ______ 5,801 _______ Excess of revenues over certain operating expenses $13,417 ======= NOTE: The Historical Summary of Revenues and Certain Operating Expenses relates to the operations of Wallkill Plaza, Midway Crossing, Delta Center, Fashion Corners, Genesee Crossing, Westland Crossing, Farmington Crossroads, Hall Road Crossing, and Hampton Village Centre (the "Properties") while under ownership previous to New Plan Realty Trust. All of the Properties are shopping centers. The summary has been prepared on the accrual method of accounting. Operating expenses include maintenance and repair expenses, utilities, real estate taxes, insurance and certain other expenses. In accordance with the regulations of the Securities and Exchange Commission, mortgage interest expense, depreciation, and general and administrative costs have been excluded from operating expenses, as they are dependent upon a particular owner, purchase price or financial arrangement. Minimum future rentals for the years ended July 31 under existing commercial operating leases at the shopping centers being reported on are approximately as follows (in thousands): 1996 - $12,878 1999 - $9,322 1997 - 11,182 2000 - 7,992 1998 - 10,075 thereafter - 47,887 The above assumes that all leases which expire are not renewed, therefore neither renewal rentals nor rentals from replacement tenants are included. Minimum future rentals do not include contingent rentals which may be received under certain leases on the basis of percentage of reported tenants' sales volumes, increases in Consumer Price Indices, common area maintenance charges and real estate tax reimbursement. NEW PLAN REALTY TRUST AND SUBSIDIARIES INFORMATION PURSUANT TO RULE 3-14 OF REGULATION S-X Part I MANAGEMENT ASSESSMENT Management's assessment of the Properties prior to acquisition includes, but is not limited to, the quality of the tenant base, regional demographics, the competitive environment, operating expenses and local property taxes. In addition, the physical aspect of the Properties, location, condition and quality of design and construction are evaluated. Management also always conducts Phase I environmental tests. All factors, when viewed in their entirety, have met management's acquisition criteria. Management is not aware of any material factors relating to the acquisition other than those discussed above. Part II ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED FROM CERTAIN PROPERTIES ACQUIRED (UNAUDITED) a. The following presents an estimate of taxable net income and funds generated from the operation of the acquired Properties for the year ended July 31, 1995 based on the Historical Summary of Revenues and Certain Operating Expenses. These estimated results do not purport to present expected results of operations for the Properties in the future and were prepared on the basis described in the accompanying notes which should be read in conjunction herewith. Estimates of taxable operating income (In Thousands) Operating income before depreciation expense $ 13,417 Less: Estimated depreciation 2,520 ________ Estimated taxable operating income $ 10,897 ======== Estimates of funds generated: Estimated taxable operating income $ 10,897 Add: Estimated depreciation 2,520 ________ Estimate of funds generated $ 13,417 ======== ____________________ b. Estimated taxable income for New Plan Realty Trust (including the Properties) for the year ended July 31, 1995 is approximately the same as Pro Forma net income and Revised Pro Forma net income reported on the Pro Forma Condensed Statement of Income (Unaudited). NEW PLAN REALTY TRUST AND SUBSIDIARIES NOTES TO ESTIMATES OF NET INCOME AND FUNDS GENERATED FROM CERTAIN PROPERTIES ACQUIRED (UNAUDITED) Basis of Presentation 1. Estimated depreciation was based upon an allocation of the purchase price to land (20%) and building (80%) with the depreciation being taken over a 40 year life using the straight line method. 2. No income taxes have been provided because New Plan Realty Trust is taxed as a real estate investment trust under the provisions of the Internal Revenue Code. Accordingly, the Trust does not pay Federal income tax whenever income distributed to shareholders is equal to at least 95% of real estate investment trust taxable income and certain other conditions are met. NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following unaudited pro forma condensed consolidated balance sheet at July 31, 1995 reflects the acquisition of the Properties as if the transaction had occurred on that date. The pro forma condensed consolidated statement of income for the year ended July 31, 1995 reflects the acquisition of the Properties as if the transaction had occurred on August 1, 1994. This pro forma information is based on the historical statements of the Trust after giving effect to the acquisition of the Properties. The acquisition cost will be financed by the assumption of mortgages aggregating approximately $38 million, the proceeds from the expected public offering of shares of beneficial interest registered under a shelf registration statement and for which a prospectus supplement is expected to be filed shortly, and cash on hand. The unaudited pro forma condensed consolidated financial statements have been prepared by New Plan Realty Trust management. The unaudited pro forma condensed consolidated statement of income may not be indicative of the results that would have actually occurred had the acquisition been made on the date indicated. Also, it may not be indicative of the results that may be achieved in the future. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with New Plan Realty Trust's audited consolidated financial statements as of July 31, 1995 and for the year then ended and the accompanying notes (which are contained in the Trust's Form 10-K for the year ended July 31, 1995). NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) YEAR ENDED JULY 31, 1995 (In thousands except for per share amounts) AS HISTORICAL PRO FORMA REPORTED ACQUISITION(2) ADJUSTMENTS PRO FORMA ________ ______________ ______________ _________ Rental Revenues $126,448 $19,218 $145,666 Interest And Dividends 4,128 (238) (3,4) 3,890 ____________________________________ ________ 130,576 19,218 (238) 149,556 Operating Expenses 43,343 5,801 49,144 Depreciation Expense 15,055 2,520 (3,5) 17,575 Interest Expense 7,174 3,524 (3,4) 10,698 ____________________________________ ________ 65,004 13,417 (6,282) 72,139 Other Deductions 2,516 2,516 Other Income 228 228 ____________________________________ ________ Net Income $62,716 13,417 (6,282) 69,851 ==================================== ======== Net Income Per Share $1.19 $1.23 Average Shares Outstanding 52,894 3,938 56,832 See Accompanying Notes To Pro Forma Condensed Consolidated Financial Statements (Unaudited) NEW PLAN REALTY TRUST AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) AS OF JULY 31, 1995 (In Thousands) PRO FORMA AS REPORTED ADJUSTMENTS(1) PRO FORMA ___________ ______________ _________ ASSETS: REAL ESTATE $701,074 $126,000 $827,074 CASH, CASH EQUIVALENTS, MKT SEC AND OTHER INVESTMENTS 80,813 (4,752) 76,061 OTHER 14,749 14,749 ________ ________ ________ TOTAL ASSETS $796,636 $121,248 $917,884 ======== ======== ======== LIABILITIES: MORTGAGES PAYABLE $ 27,295 $ 37,590 $ 64,885 NOTES PAYABLE 179,357 179,357 OTHER LIABILITIES 19,455 19,455 ________ ________ ________ 226,107 37,590 263,697 SHAREHOLDERS' EQUITY 570,529 83,658 654,187 ________ ________ ________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $796,636 $121,248 $917,884 ======== ======== ======== SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NEW PLAN REALTY TRUST AND SUBSIDIARIES NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Represents the acquisition of the Properties for cash to be obtained from the anticipated issuance (the "Offering") by the Trust of 4.5 million common shares of beneficial interest at an estimated price of $21.25 per share, net of offering costs (assuming an offering price of $22.50 per share (the closing price of the common shares of beneficial interest on the New York Stock Exchange on October 19, 1995)), pursuant to the Trust's Shelf Registration Statement on Form S-3, as amended (Registration No. 33-61383), the assumption of existing debt in connection with the purchase of two of the Properties, and cash on hand. The proceeds from the Offering are also intended to be used to purchase 562,500 shares of beneficial interest of the Trust at $21.25 per share as described in the Trust's prospectus supplement to be filed shortly. 2. Amounts as reported have been adjusted by historical results. 3. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended July 31, 1995 includes adjustments to interest income and interest and depreciation expense to reflect the acquisition of the Properties as if they had been acquired on August 1, 1994. (See Notes 4 and 5.) 4. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended July 31, 1995 include interest expense relating to the mortgages being used to finance a portion of the purchase price and a reduction in interest income due to the use of cash on hand. The interest rate used for calculating the interest expense was 9.375%, representing the interest rate on the mortgages. The interest rate used for calculating the reduction in interest income was 5%, representing the average rate of interest earned on the Trust's cash balances. 5. Estimated depreciation was based upon an allocation of the purchase price to land (20%) and building (80%) with the depreciation being taken over a 40 year life using the straight line method. EXHIBIT INDEX Exhibit Number Description Page 23 Consent of Independent Accountants EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of New Plan Realty Trust on Forms S-3 (File Nos. 33-58596, 33-61383 and 33-60315) and on Forms S-8 (33-57946 and 33-59077) of our report dated October 18, 1995, on our audit of the Historical Summary of Revenues and Certain Operating Expenses of certain properties acquired by New Plan Realty Trust (the "Trust") for the year ended July 31, 1995, which is included in this Form 8-K of the Trust dated October 20, 1995. EICHLER, BERGSMAN & CO., LLP New York, New York October 20, 1995