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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) June 18, 1997
(December 12, 1996)
_________________________________
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)
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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: June 18, 1997
NEW PLAN REALTY TRUST
By:/s/ Michael I. Brown
_____________________________________
Michael I. Brown
Chief Financial Officer and
Controller
Item 2. Acquisition or Disposition of Assets
See "Item 5 -- Other Events"
Item 5. Other Events
New Plan Realty Trust (the "Trust) purchased three properties for an
aggregate purchase price of approximately $45.5 million of which $29.3 million
was paid in cash. This was the estimated fair market value of such properties.
Additional information regarding the three properties is set forth below.
Date of
Property Acquisition Acres Units Seller Occupancy
COURTS @ WATERFORD 12/12/96 27 318 Chattanooga 95%
PLACE APARTMENTS Properties
Chattanooga, TN II L.P.
KNOLLWOOD 5/7/97 42 704 Knollwood I, 98%
APARTMENTS II, III, IV
Mobile, AL L.P.
SPRING CREEK 6/2/97 19 288 5811 Spring 89%
APARTMENTS Run L.P.
Columbus, OH
Audited statements of revenue and certain operating expenses and pro
forma financial information reflecting the acquisition of the three properties
are included in this Current Report on Form 8-K.
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 June 10, 1997.
2. Certain properties acquired - Historical Summary of Combined
Revenues and Certain Operating Expenses for the year ended
October 31, 1996.
3. In addition, the following pro forma financial information is
provided to reflect all three 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, 1996.
(b) Pro forma condensed consolidated statement of income
for the nine months ended April 30, 1997.
(c) Pro forma condensed consolidated balance sheet as of
April 30, 1997.
(d) Notes to pro forma condensed consolidated financial
statements.
(c) Exhibits
Included herewith is Exhibit No. 23, the Consent of the Independent
Accountants.
New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
INDEPENDENT AUDITOR'S REPORT
____________________________
We have audited the accompanying Historical Summary of Combined Revenues and
Certain Operating Expenses of Courts @ Waterford Place, Knollwood Apartments,
and Spring Creek Apartments (the "Properties") for the year ended October 31,
1996. 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. Those 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 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
June 10, 1997
CERTAIN PROPERTIES ACQUIRED
HISTORICAL SUMMARY OF COMBINED REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED OCTOBER 31, 1996
(IN THOUSANDS)
Rental income $7,190
Repairs and maintenance $ 715
Real estate taxes 480
Other operating expenses 1,273 2,468
______ ______
Excess of revenues over certain
operating expenses $4,722
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NOTE:
The Historical Summary of Combined Revenues and Certain Operating Expenses
relates to the operation of Courts @ Waterford Place, Knollwood Apartments, and
Spring Creek Apartments (the "Properties") while under ownership previous to
New Plan Realty Trust. The properties are residential apartment complexes.
The summary includes the results of operations of Knollwood Apartments for the
twelve months ended December 31, 1996.
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.
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 three 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 three 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 operating income and
funds generated from the operation of the acquired three properties
for the year ended July 31, 1996 based on the Historical Summary of
Combined Revenues and Certain Operating Expenses. These estimated
results do not purport to present expected results of operations for
the three 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 $4,722
Less:
Estimated depreciation 908
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Estimated taxable operating income $3,814
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Estimated funds generated:
Estimated taxable operating income $3,814
Add: Estimated depreciation 908
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Estimate of funds generated $4,722
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b. Estimated taxable income for New Plan Realty Trust (including the
three properties) for the year ended July 31, 1996 and the nine
months ended April 30, 1997 is approximately the same as Pro Forma
net income reported on the Pro Forma Condensed Statements of Income
(Unaudited).
NEW PLAN REALTY TRUST AND SUBSIDIARIES
NOTES TO ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED
FROM CERTAIN PROPERTIES ACQUIRED
(UNAUDITED)
Basis of Presentation
1. Depreciation expense was based upon an estimated useful life of 40
years 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 unaudited pro forma condensed consolidated statements of income for
the year ended July 31, 1996 and the nine months ended April 30, 1997 reflect
the acquisition of the three properties as if the transactions and other
acquisitions made during the year had occurred on August 1, 1995. This pro
forma information is based on the historical statements of the Trust after
giving effect to the acquisition of the three properties.
The following unaudited pro forma condensed consolidated balance sheet as
of April 30, 1997 reflects the acquisition of the Knollwood and Spring Creek
Apartments as if the acquisition had occurred on that date. The acquisition of
the Courts @ Waterford Place property is reflected in the historical
consolidated balance sheet.
The unaudited pro forma condensed consolidated financial statements have
been prepared by New Plan Realty Trust management. The unaudited pro forma
condensed consolidated statements of income may not be indicative of the
results that would have actually occurred had the acquisitions been made on the
date indicated or 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, 1996 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, 1996).
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED JULY 31, 1996
(In thousands except for per share amounts)
PREVISOULY REPORTED (4)
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PRO FORMA
AS HISTORICAL PRO FORMA CURRENT HISTORICAL PRO FORMA REVISED
REPORTED ACQUISITION ADJUSTMENTS ACQUISITIONS ACQUISITION ADJUSTMENTS PRO FORMA
-------- ----------- ----------- ------------ ----------- ----------- ---------
RENTAL REVENUES $162,821 $7,190 $170,011 $18,634 $ 565 $189,210
INTEREST AND
DIVIDENDS 4,785 4,785 (2,067) 2,718
________ ______ ________ _______ ______ ________
TOTAL REVENUE 167,606 7,190 174,796 18,634 (1,502) 191,928
OPERATING COSTS 57,302 2,468 59,770 6,550 66,320
DEPRECIATION EXPENSE 20,004 $ 908 (2,3) 20,912 2,293 23,205
INTEREST EXPENSE 17,561 2,597 (2) 20,158 4,639 24,797
________ ______ _______ ________ _______ ______ ________
TOTAL OPERATING
EXPENSE 94,867 2,468 3,505 100,840 6,550 6,932 114,322
________ ______ _______ ________ _______ ______ ________
OTHER DEDUCTIONS 2,616 2,616 2,616
OTHER INCOME 398 398 398
________ ______ _______ ________ _______ ______ ________
NET INCOME $ 70,521 $4,722 $(3,505) $ 71,738 $12,084 ($8,434) $ 75,388
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NET INCOME PER SHARE $ 1.25 $ 1.27 $ 1.33
AVERAGE SHARES
OUTSTANDING 56,484 56,484 56,484
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
/TABLE
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
NINE MONTHS ENDED APRIL 30, 1997
(In thousands except for per share amounts)
PREVIOUSLY REPORTED (4)
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HISTORICAL PRO FORMA HISTORICAL PRO FORMA
AS REPORTED ACQUISITION ADJUSTMENTS PRO FORMA ACQUISITION ADJUSTMENTS PRO FORMA
----------- ----------- ----------- --------- ----------- ----------- ---------
REVENUES:
RENTAL REVENUES $147,719 $ 4,571 $152,290 $ 3,700 $ 153 $156,143
INTEREST AND DIVIDENDS 3,277 3,277 3,277
-------- ------- -------- ------- ------- --------
TOTAL REVENUE 150,996 4,571 155,567 3,700 153 159,420
OPERATING EXPENSES:
OPERATING COST 54,138 1,545 55,683 1,209 56,892
DEPRECIATION EXPENSE 18,252 $ 578 (2,3) 18,830 401 19,231
INTEREST EXPENSE 19,758 1,571 (2) 21,329 1,423 22,752
-------- ------- -------- ------- ------- --------
TOTAL OPERATING
EXPENSES 92,148 1,545 2,149 95,842 1,209 1,824 98,875
-------- ------- --------
OTHER DEDUCTIONS 1,525 1,525 1,525
OTHER INCOME (LOSS) (68) (68) (68)
-------- ------- -------- ------- ------- --------
NET INCOME $ 57,255 $ 3,026 ($ 2,149) $ 58,132 $ 2,491 ($1,671) $ 58,952
======== ======= ======= ======== ======= ====== ========
NET INCOME PER SHARE $ .98 $ 1.00 $ 1.01
AVERAGE SHARES
OUTSTANDING 58,353 58,353 58,353
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
/TABLE
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF APRIL 30, 1997
(In Thousands)
PRO FORMA
AS REPORTED ADJUSTMENTS (1) PRO FORMA
___________ _______________ _________
ASSETS:
REAL ESTATE $1,031,275 $31,727 $1,063,002
CASH, CASH EQUIVALENTS,
MARKETABLE SECURITIES AND
OTHER INVESTMENTS 23,523 23,523
OTHER 45,833 45,833
__________ _______ __________
TOTAL ASSETS $1,100,631 $31,727 $1,132,358
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LIABILITIES:
MORTGAGES PAYABLE $ 58,748 $ 6,027 $ 64,775
NOTES PAYABLE 342,597 25,700 368,297
OTHER LIABILITIES 30,218 30,218
TOTAL LIABILITIES 431,563 31,727 463,290
__________ _______ __________
SHAREHOLDERS' EQUITY 669,068 669,068
__________ ___________
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,100,631 $31,727 $1,132,358
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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. Pro Forma Adjustments to Pro Forma Consolidated Balance Sheet as of April
30, 1997 reflect the acquisition of two properties after April 30, 1997
using increased borrowings and the assumption of a mortgage.
2. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated
Statements of Income for the year ended July 31, 1996 and for the nine
months ended April 30, 1997 include adjustments to reflect the acquisition
of the three current acquisitions and the previously reported acquired
properties as if they had been acquired on August 1, 1995 (See Note 3.)
For the year ended July 31, 1996 and the nine months ended April 30, 1997,
these adjustments include an increase in interest expense due to the
increase in mortgages and notes payable to finance these acquisitions. The
interest rate used was approximately 5.4% on the assumed mortgages and 5.9%
on the notes payable.
3. Depreciation expense was based upon an estimated useful life of 40 years
using the straight line method.
4. Refer to Form 8-K dated November 4, 1996 and Form 8-K dated January 6, 1997
for previously reported acquisitions.
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Independent Accountants