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 January 23, 1998 Commission file number 1-8459
New Plan Realty Trust
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(Exact name of registrant as specified in charter)
Massachusetts 13-1995781
- ----------------------- ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
1120 Avenue of the Americas, New York, New York 10036
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(Address of principal executive offices)
(212) 869-3000
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Registrant's telephone number
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEW PLAN REALTY TRUST
(Registrant)
By:/s/ Michael I. Brown
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Michael I. Brown
Chief Financial Officer and
Controller
Dated: January 23, 1998
Item 5. Other Events
New Plan Realty Trust (the "Trust) has purchased five properties
for an aggregate purchase price of approximately $37.6 million, all of which
was paid in cash. This was the estimated fair market value of such
properties. Additional information regarding the five properties is set
forth below.
Gross
Leasable
Date of Area or
Property Acquisition Acres Units Seller
Occupancy
Monroe Shoprite
Plaza 8/1/97 12 122,000 S.F. MIF Realty LP 97%
Monroe, NY
Principal tenants are: Shoprite, Genovese Drugs
Southgate
Shopping Center 8/27/97 24 263,000 S.F. New Port
New Port Richie, FL Richey
Development
Co. 95%
Principal tenants are: Publix, Eckerd Drugs
Riverwood
Shopping Center 9/5/97 15 94,000 S.F. Resurgence
Port Orange, FL Properties,
Inc. 100%
Principal tenants are: Winn Dixie, Walgreens, Scotty's Hardware
Forest Hills
Apartments 10/28/97 22 184 units Forest Hills
Indianapolis, IN LLC 98%
Cardinal Woods
Apartments 8/15/97 17 420 units Cardinal
Cary, NC Woods
Apartments,
Ltd. 96%
Audited statements of revenue and certain operating expenses and
pro forma financial information reflecting the acquisition of the five
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. Reports of Eichler, Bergsman & Co., LLP, Independent Certified
Public Accountants, dated July 21, 1997 and November 26, 1997.
2. Certain properties acquired - Historical Summary of Combined
Revenues and Certain Operating Expenses for the years ended
April 30, 1997 and May 31, 1997.
3. In addition, the following pro forma financial information is
provided to reflect all five 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, 1997.
(b) Pro forma condensed consolidated statement of income
for the three months ended October 31, 1997.
(c) Notes to pro forma condensed consolidated financial
statements.
(c) Exhibits
Included herewith is Exhibit No. 23, the Consent of the Independent
Accountants.
Eichler Bergsman & Co., LLP
Certified Public Accountants
404 Park Avenue South, New York, New York 10016
Tel 212-447-9001 Fax 212-447-9006
INDEPENDENT AUDITORS' REPORT
New Plan Realty Trust
1120 Avenue of the Americas
New York, NY 10036
We have audited the accompanying Historical Summary of Revenues and Certain
Operating Expenses of Cardinal Woods Apartments (the "Property") for the year
ended May 31, 1997. 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 examined
and is not intended to be a complete presentation of the Property's 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 principles.
New York, New York
July 21, 1997
NEW PLAN REALTY TRUST
CERTAIN PROPERTIES ACQUIRED
HISTORICAL SUMMARY OF REVENUES
AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED MAY 31, 1997
(In Thousands)
Rental income $1,242
Repairs and maintenance $ 109
Real estate taxes 62
Other operating expenses 268 439
--- ---
Excess of revenues over certain operating expenses $ 803
===
NOTE:
The Historical Summary of Revenues and Certain Operating Expenses relates to
the operation of Cardinal Woods Apartments (the "Property") while under
ownership previous to New Plan Realty Trust. The Property is a residential
apartment complex.
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.
Eichler Bergsman & Co., LLP
Certified Public Accountants
404 Park Avenue South, New York, New York 10016
Tel 212-447-9001 Fax 212-447-9006
INDEPENDENT AUDITORS' REPORT
New Plan Realty Trust
1120 Avenue of the Americas
New York, NY 10036
We have audited the accompanying Historical Summary of Combined Revenues and
Certain Operating Expenses of Monroe Shoprite Plaza, Southgate Shopping
Center, Riverwood Shopping Center, and Forest Hills Apartments
(the "Properties") for the year ended April 30, 1997. 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 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 principles.
New York, New York
November 26, 1997
HISTORICAL SUMMARY OF COMBINED REVENUES AND
CERTAIN OPERATING EXPENSES OF
CERTAIN PROPERTIES ACQUIRED
FOR THE YEAR ENDED APRIL 30, 1997
(In Thousands)
Rental income $5,021
Repairs and maintenance $ 953
Real estate taxes 750
Other operating expenses 727 2,430
--- -----
Excess of revenues over certain operating expenses $2,591
======
NOTE:
The Historical Summary of Combined Revenues and Certain Operating Expenses
relates to the operation of Monroe Shoprite Plaza, Southgate Shopping Center,
Riverwood Shopping Center, and Forest Hills Apartments (the "Properties")
while under ownership previous to New Plan Realty Trust. All of the
properties are shopping centers, except Forest Hills Apartments. The summary
includes the revenues and expenses of two properties for the twelve months
ended June 30, 1997 and August 31, 1997.
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 shopping centers being reported on are approximately as
follows (in thousands):
1998 $ 2,734 2001 $ 2,167
1999 2,601 2002 1,966
2000 2,387 Thereafter 20,293
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 a 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 five 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 aspects of the five properties,
location, condition and quality of design and construction are evaluated.
Management also conducted 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 five properties
for the year ended July 31, 1997 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 five 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 $3,394*
Less:
Estimated depreciation 713
------
Estimated taxable operating income $2,681
======
Estimated funds generated:
Estimated taxable operating income $2,681
Add: Estimated depreciation 713
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Estimate of funds generated $3,394*
======
* Estimates of operating income, net taxable income and funds generated do
not include approximately $350,000 of revenue from leases that commenced
after the period audited in the Historical Summary of Revenues and Certain
Operating Expenses included in this 8-K.
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 39
years for commercial properties and 27.5 years for residential
properties 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, 1997 and the three months ended October 31, 1997
reflect the acquisition of the five properties as if the transactions had
occurred on August 1, 1996. This pro forma information is based on the
historical statements of the Trust after giving effect to the acquisition of
these properties.
The unaudited pro forma condensed consolidated financial statements have
been prepared by New Plan Realty Trust's 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, 1997 and for the year then ended and the Trust's
unaudited consolidated financial statements as of October 31, 1997 and for
the three months then ended and the accompanying notes (which are contained
in the Trust's Form 10-K for the year ended July 31, 1997 and the Trust's
Form 10-Q for the three months ended October 31, 1997).
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED JULY 31, 1997
(In thousands except for per share amounts)
PRO FORMA
CURRENT PRO FORMA OTHER CURRENT
AS REPORTED ACQUISITIONS ADJUSTMENTS ADJUSTMENTS ACQUISITIONS
----------- ------------ ----------- ----------- ------------
RENTAL REVENUES $ 202,093 $ 6,263 $ 350 (4) $ 208,706
INTEREST AND DIVIDENDS 4,728 4,728
--------- ------- ----- ---------
TOTAL REVENUE 206,821 6,263 350 213,434
OPERATING COSTS 74,316 2,869 77,185
DEPRECIATION EXPENSE 25,006 $ 699 (2,3) 25,705
INTEREST EXPENSE 28,256 2,220 (2) 30,476
--------- ------- ------- ----- ---------
TOTAL OPERATING EXPENSES 127,578 2,869 2,919 133,366
--------- ------- ------- ----- ---------
OTHER DEDUCTIONS 2,203 2,203
OTHER LOSS 3 3
--------- ------- ------- ----- ---------
NET INCOME 77,037 3,394 (2,919) 350 77,862
PREFERRED STOCK DIVIDENDS (461) (461)
--------- ------- ------- ----- ---------
NET INCOME APPLIED TO
SHARES OF BENEFICIAL
INTEREST $ 76,576 $ 3,394 ($2,919) $ 350 $ 77,401
========= ======= ======= ===== =========
BASIC EARNINGS PER SHARE $ 1.31 $ 1.32
FULLY DILUTED EARNINGS
PER SHARE $ 1.30 $ 1.32
AVERAGE SHARES OUTSTANDING
FOR BASIC EARNINGS
PER SHARE 58,461 58,461
AVERAGE SHARES OUTSTANDING
FOR FULLY DILUTED
EARNINGS PER SHARE 58,751 58,751
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED OCTOBER 31, 1997
(In thousands except for per share amounts)
PRO FORMA
CURRENT PRO FORMA OTHER CURRENT
AS REPORTED ACQUISITIONS ADJUSTMENTS ADJUSTMENTS ACQUISITIONS
----------- ------------ ----------- ----------- ------------
REVENUES:
RENTAL REVENUES $ 58,565 $ 662 $ 89 (4) $ 59,316
INTEREST AND DIVIDENDS 942 942
--------- ------- ----- ---------
TOTAL REVENUE 59,507 662 89 60,258
OPERATING EXPENSES:
OPERATING COST 21,271 354 21,625
DEPRECIATION EXPENSE 7,450 $ 175 (2,3) 7,625
INTEREST EXPENSE 8,553 199 (2) 8,752
--------- ------- ------- ---------
TOTAL OPERATING EXPENSES 37,274 354 374 38,002
--------- ------- ------- ---------
OTHER DEDUCTIONS 629 629
OTHER LOSS 67 67
--------- ------- ------- ----- ---------
NET INCOME $ 21,537 308 (374) 89 $ 21,560
PREFERRED STOCK DIVIDEND (1,463) (1,463)
--------- ------- ------- ----- ---------
NET INCOME APPLIED TO
SHARES OF BENEFICIAL
INTEREST $ 20,074 $ 308 ($374) $ 89 $ 20,097
========= ======= ======= ===== =========
BASIC EARNINGS PER SHARE $ .34 $ .34
FULLY DILUTED EARNINGS
PER SHARE $ .34 $ .34
AVERAGE SHARES OUTSTANDING
FOR BASIC EARNINGS
PER SHARE 59,003 59,003
AVERAGE SHARES OUTSTANDING
FOR FULLY DILUTED
EARNINGS PER SHARE 59,343 59,343
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. No Pro Forma Consolidated Balance Sheet as of October 31, 1997 is
provided because all acquisitions included in this report were purchased
prior to November 1, 1997.
2. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated
Statements of Income for the year ended July 31, 1997 and for the three
months ended October 31, 1997 include adjustments to reflect the
acquisition of the five current acquisitions as if they had been
acquired on August 1, 1996 (See Note 3.).
For the year ended July 31, 1997 and the three months ended October 31,
1997, these adjustments include an increase in interest expense due to
the increase in notes payable to finance these acquisitions. The
interest rate used was 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. Other adjustments reflects revenue from leases that commenced after the
audit period.
EXHIBIT INDEX
Exhibit Number Description
23 Consent of Independent Accountants