1
SECURITIES AND EXCHANGE COMMISSION ALL THE ITEMS
WASHINGTON, D.C. 20549 HEREIN WERE THE
SUBJECT OF A
FORM 12B-25.
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1994
Commission File Number 1-9948
AMERICAN REALTY TRUST, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Georgia 54-0697989
------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, Texas 75231
----------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(214) 692-4700
-------------------------------
(Registrant's Telephone Number,
Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, $.01 par value 3,124,164
- - ---------------------------- ------------------------------
(Class) (Outstanding at July 29, 1994)
1
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The accompanying Consolidated Financial Statements have not been examined by
independent certified public accountants but in the opinion of the management
of American Realty Trust, Inc. (the "Company"), all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of consolidated
results of operations, consolidated financial position and consolidated cash
flows at the dates and for the periods indicated, have been included.
AMERICAN REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1994 1993
--------------- --------------
(dollars in thousands)
Assets
------
Notes and interest receivable
Performing.......................................... $ 46,763 $ 28,547
Nonperforming, nonaccruing.......................... 1,660 23,222
--------------- --------------
48,423 51,769
Real estate held for sale, net of accumulated
depreciation ($6,172 in 1994 and $5,320 in 1993).. 29,778 21,426
Less - allowance for estimated losses............... (7,805) (9,913)
--------------- --------------
70,396 63,282
Real estate held for investment, net of accumulated
depreciation ($991 in 1994 and $1,424 in 1993).... 28,694 31,011
Marketable equity securities, at market value....... 3,153 -
Cash and cash equivalents........................... 298 843
Investments in real estate entities................. 39,836 40,005
Other assets (including $477 in 1993 due from
affiliates)....................................... 5,237 4,720
--------------- --------------
$ 147,614 $ 139,861
=============== ==============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
2
3
AMERICAN REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS - Continued
June 30, December 31,
1994 1993
--------------- --------------
(dollars in thousands)
Liabilities and Stockholders' Equity
------------------------------------
Liabilities
Notes and interest payable......................... $ 59,001 $ 53,693
Margin borrowings.................................. 22,120 16,147
Accounts payable and other liabilities (including
$1,303 in 1994 and $3,637 in 1993 due to
affiliate)....................................... 10,190 10,552
--------------- --------------
91,311 80,392
Minority interest.................................. 530 1,149
Redeemable Common Stock issued and outstanding
360,000 shares................................... 2,200 2,200
Commitments and contingencies
Stockholders' equity
Common stock, $.01 par value; authorized
16,667,000 shares, issued and outstanding
2,764,164 shares in 1994 and 2,524,164 shares
in 1993.......................................... 28 25
Paid-in capital.................................... 64,550 64,553
Accumulated (deficit).............................. (11,005) (8,458)
--------------- --------------
53,573 56,120
--------------- --------------
$ 147,614 $ 139,861
=============== ==============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
3
4
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
---------------------------------- ---------------------------------
1994 1993 1994 1993
-------------- -------------- --------------- -------------
(dollars in thousands, except per share)
Income
Rentals.......................... $ 4,813 $ 1,267 $ 7,194 $ 2,596
Interest......................... 1,064 1,567 1,805 3,307
Equity in (losses) of
investees....................... (545) (424) (1,072) (1,222)
Other............................ 353 74 718 120
-------------- -------------- --------------- -------------
5,685 2,484 8,645 4,801
-------------- -------------- --------------- -------------
Expenses
Property operations.............. 3,661 601 5,238 1,463
Interest......................... 2,050 1,592 3,684 3,137
Advisory and servicing fees
to affiliate.................... 305 312 625 640
General and administrative....... 406 666 1,014 879
Depreciation and
amortization.................... 421 267 756 504
Minority interest................ 103 (158) 158 (230)
-------------- -------------- --------------- -------------
6,946 3,280 11,475 6,393
-------------- -------------- --------------- -------------
(Loss) before gain on sale of
real estate and extraordinary
gain............................ (1,261) (796) (2,830) (1,592)
Gain on sale of real estate....... 57 119 233 262
Extraordinary gain................ 14 - 50 3,364
-------------- -------------- --------------- -------------
Net income (loss)................. (1,190) (677) (2,547) 2,034
Redeemable Common Stock,
accretion of discount............ - - - (129)
-------------- -------------- --------------- -------------
Income (loss) applicable to
Common Shares.................... $ (1,190) $ (677) $ (2,547) $ 1,905
============== ============== =============== =============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
4
5
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - Continued
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------------- --------------------------------
1994 1993 1994 1993
------------- ------------ ------------- ------------
(dollars in thousands, except per share)
Earnings per share
(Loss) before gain on sale
of real estate and extra-
ordinary gain................ $ (.40) $ (.26) $ (.94) $ (.54)
Gain on sale of real
estate....................... .02 .04 .08 .09
Extraordinary gain............ - - .01 1.13
------------- ------------ ------------- ------------
Net income (loss)............. (.38) (.22) (.85) .68
Redeemable Common Stock,
accretion of discount........ - - - (.04)
------------- ------------ ------------- ------------
Income (loss) applicable to
Common Shares................ $ (.38) $ (.22) $ (.85) $ .64
============= ============ ============= ============
Weighted average Common shares
used in computing earnings
per share..................... 3,092,515 3,006,363 2,988,915 2,970,400
============== ============== =============== =============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
5
6
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Six Months Ended June 30, 1994
Common Stock
--------------------------------- Paid-in Accumulated Stockholders'
Shares Amount Capital Earnings Equity
--------------- ------------- ------------- -------------- --------------
(dollars and shares in thousands)
Balance,
January 1, 1994........ 2,524,164 $ 25 $ 64,553 $ (8,458) $ 56,120
Common Stock issued.... 240,000 3 (3) - -
Net (loss)............. - - - (2,547) (2,547)
--------------- ------------- ------------- -------------- --------------
Balance,
June 30, 1994.......... 2,764,164 $ 28 $ 64,550 $ (11,005) $ 53,573
=============== ============= ============= ============== ==============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
6
7
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months
Ended June 30,
------------------------------------
1994 1993
--------------- --------------
(dollars in thousands)
Cash Flows From Operating Activities
Rentals collected..................................... $ 6,197 $ 2,929
Interest collected.................................... 1,696 2,507
Distributions received from real estate entities
operating cash flow................................ 986 196
Payments for property operations...................... (5,561) (1,489)
Interest paid......................................... (3,259) (1,797)
Advisory and servicing fees paid to affiliate......... (625) (646)
General and administrative expenses paid.............. (1,672) (880)
Litigation settlement................................. (200) (450)
Other................................................. 347 (108)
--------------- --------------
Net cash provided by (used in) operating
activities........................................ (2,091) 262
Cash Flows From Investing Activities
Collections on notes receivable....................... 1,832 562
Notes receivable funded............................... - (624)
Proceeds from sale of real estate..................... 847 984
Proceeds from sale of marketable equity
securities......................................... 3,955 1,477
Purchase of marketable equity securities.............. (7,029) -
Investment in real estate entities.................... (1,803) (2,551)
Purchase of and improvements to real estate........... (875) (381)
Deposits on acquisition of notes receivable........... - (300)
--------------- --------------
Net cash (used in) investing activities............ (3,073) (833)
Cash Flows From Financing Activities
Proceeds from notes payable........................... 526 1,789
Payments on notes payable............................. (2,039) (3,261)
Proceeds from issuance of Common Stock................ - 200
Net collections (advances) to/from affiliates......... 159 (1,038)
Margin borrowings, net................................ 5,973 2,621
--------------- --------------
Net cash provided by financing activities.......... 4,619 311
Net (decrease) in cash and cash equivalents........ (545) (260)
Cash and cash equivalents, beginning of period.......... 843 510
--------------- --------------
Cash and cash equivalents, end of period................ $ 298 $ 250
=============== ==============
The accompanying notes are an integral part of these Consolidated Financial
Statements.
7
8
AMERICAN REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
For the Six Months
Ended June 30,
------------------------------------
1994 1993
--------------- --------------
(dollars in thousands)
Reconciliation of net income (loss) to net cash
provided by (used in) operating activities
Net income (loss)...................................... $ (2,547) $ 2,034
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities
Extraordinary gain.................................. (50) (3,364)
Depreciation and amortization....................... 756 504
Gain on sale of real estate......................... (233) (262)
Distributions from real estate entities'
operating cash flow............................... 986 196
Equity in losses of investees....................... 1,072 1,222
(Increase) in accrued interest receivable........... (45) (729)
Decrease (increase) in other assets................. (1,614) 710
(Decrease) in accounts payable and
other liabilities................................. (763) (49)
Other............................................... 347 -
--------------- --------------
Net cash provided by (used in) operating
activities...................................... $ (2,091) $ 262
=============== ==============
Schedule of noncash investing activities
Carrying value of real estate acquired through
assumption of debt with a carrying value
of $6,080.............................................. $ 6,341 $ -
Carrying value of real estate acquired through
satisfaction of a receivable with a carrying
value of $125.......................................... 125 -
Carrying value of real estate acquired through
foreclosure in satisfaction of note receivable
with a net carrying value of $5,220.................... - 5,220
The accompanying notes are an integral part of these Consolidated Financial
Statements.
8
9
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The accompanying Consolidated Financial Statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Operating results for the six month period ended June 30, 1994 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1994. For further information, refer to the Consolidated
Financial Statements and Notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 (the "1993 Form 10-K").
NOTE 2. NOTES AND INTEREST RECEIVABLE
The borrower on a $1.7 million first mortgage note receivable secured by land
in Osceola, Florida failed to make required payments subsequent to August 10,
1993, including the payment of principal and interest due at the note's
November 1, 1993 maturity. The Company instituted judicial foreclosure
proceedings and was awarded a summary judgment in January 1994. To date, the
borrower has paid the Company a total of $150,000 in nonrefundable fees to
delay the sale of the property at foreclosure until September 1, 1994. The
Company has agreed to an additional 30 day extension to October 1, 1994 in
exchange for the payment of an additional $25,000 nonrefundable fee, if such
fee is received by the Company prior to the current September 1, 1994
foreclosure sale date. The note had a principal balance of $1.6 million at
June 30, 1994. The Company does not expect to incur any loss upon foreclosure
as the estimated fair value of the collateral property exceeds the carrying
value of the note.
In conjunction with the sale of a restaurant site in Los Angeles, California,
the Company provided $100,000 of purchase money financing. The note bears
interest at 8% per annum and requires monthly interest only payments until May
1, 1997, by which time the principal balance shall have been paid down to no
more than $50,000. Interest only payments are to continue until maturity on
April 1, 1999, at which time all unpaid principal and accrued interest shall be
due. See NOTE 3. "REAL ESTATE."
In August 1990, the Company foreclosed on its fourth lien note receivable
secured by the Continental Hotel and Casino in Las Vegas, Nevada. The Company
acquired the hotel and casino property at foreclosure subject to first and
second lien mortgages totaling $10.0 million and a disputed third lien
mortgage. In June 1992, the Company sold the hotel and casino to the third
lienholder for a $22 million wraparound mortgage note receivable, a $500,000
unsecured note receivable, and $100,000 in cash. The Company recorded a
deferred gain of $4.3 million in connection with the sale of the hotel and
casino resulting from the disputed third lien mortgage being subordinated to
the Company's wraparound mortgage note receivable. The $500,000 note
9
10
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 2. NOTES AND INTEREST RECEIVABLE (Continued)
was paid off in July 1993. Payments of interest and principal on the Company's
wraparound note receivable are made directly by the borrower to the holder of
the first and second lien mortgages and are applied against interest and
principal thereon. In October 1993, the borrower ceased making the monthly
payments required by the Company's wraparound mortgage note receivable to the
holder of the first and second lien mortgages. In April 1994, the Company, the
borrower and the underlying lienholder agreed to modify and extend both the
Company's wraparound mortgage note receivable and the underlying liens.
The modified wraparound mortgage note receivable continues to accrue interest
at 11% per annum with any unpaid interest being added monthly to the principal
balance and requires payments of $150,000 per month from May 1, 1994 through
January 1, 1995, at which time the monthly payments increase to $250,000 until
maturity on July 1, 1995, when the unpaid principal balance together with any
accrued but unpaid interest is due. The borrower is making payments in a
timely manner in accordance with the terms of the modified note. The Company's
wraparound mortgage note receivable had a principal balance of $22.7 million at
June 30, 1994, including compounded interest.
In conjunction with the modification of the Company's wraparound mortgage note
receivable, the underlying lienholder has agreed to forebear exercising its
rights under the first and second liens on the condition that the Company remit
to it the greater of either $150,000 or all sums received by the Company, after
May 1, 1994, on the Company's wraparound mortgage note receivable and a
principal payment of $225,000 upon execution of the forbearance agreement,
which was made on June 29, 1994. The Company is in compliance with the terms
of the forbearance agreement.
In April 1990, Syntek Asset Management, L.P. ("SAMLP") made a $1.4 million
unsecured loan to Equity Health and Finance Corporation ("Equity Health"), an
entity affiliated with Basic Capital Management, Inc. ("BCM"), the Company's
advisor. In June 1991, Equity Health merged into BCM, and BCM assumed the
note. The note matured on May 9, 1994 and its principal balance of $399,000
and accrued interest of $98,000 were paid in full.
In June 1994, the Company and the borrower on a $1.9 million first mortgage
note receivable which had matured on December 31, 1992 and was secured by a
vacant former hotel in Shaker Heights, Ohio entered into an agreement of
settlement and release. The Company accepted $1.0 million in cash and the
right to participate in the future appreciation of the property, if any, in
full settlement of its note. The Company incurred no loss in excess of the
amounts previously provided.
Also in June 1994, the Company sold its $900,000 first mortgage note receivable
secured by the 386 Ocean Parkway Co-op and 21 shares in the
10
11
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 2. NOTES AND INTEREST RECEIVABLE (Continued)
co-op equating to 21 unsold apartment units for $450,000 in cash. The Company
incurred no loss on the sale in excess of the amounts previously provided.
NOTE 3. REAL ESTATE
In March 1994, the Company sold a restaurant site in Los Angeles, California,
for $190,000, receiving net cash of $68,500 and providing purchase money
financing of $100,000. The Company paid a real estate sales commission of
$5,700 to Carmel Realty, Inc., an affiliate of the Company's advisor, based
upon the $190,000 sales price of the property. The Company recognized an
$18,000 gain on the sale. See NOTE 2. "NOTES AND INTEREST RECEIVABLE."
In May 1992, in conjunction with a litigation settlement, the Company acquired
title to land in Denver, Colorado subject to a ground lease to Merchandise Mart
Associates, Ltd. ("Mart, Ltd.") as lessee, for the operation of the Denver
Merchandise Mart (the "Mart") and a 2.9% limited partner interest in Mart, Ltd.
In March 1994, the Company acquired for $26,000 in cash, all of the capital
stock of the corporate general partner of Mart, Ltd. Also in March 1994, the
Company acquired all of the capital stock of Garden Capital Merchandise Mart,
Inc. ("GCMMI") for $1,000 and the assumption of $271,000 in debt including
$125,000 payable to the Company. The GCMMI stock was purchased from
individuals who also own the corporate general partner of a limited partnership
in which NRLP is a 99% limited partner. The assets of GCMMI included a
wraparound mortgage note receivable with a principal balance of $33.4 million
secured by the Mart, title to a hotel adjacent to the Mart and parcels of land
contiguous to the Mart.
Both the ground lease and the wraparound mortgage note receivable were in
default at their respective dates of acquisition and have remained so. The
Company has begun foreclosure proceedings, which will also extinguish the
ground lease. The Company is funding property operating deficits. Effective
April 1, 1994, the Company recorded the insubstance foreclosure of the Mart and
the assumption of underlying debt of $6.1 million. The Company acquired the
wraparound mortgage with the intent of acquiring the collateral property, hence
the Mart is classified as held for investment.
As of June 30, 1994, the Company reclassified its three apartment complexes in
Mississippi and its apartment complex in San Antonio, Texas from "Real estate
held for investment" to "Real estate held for sale". In the second quarter of
1994, the Company received an offer from a potential buyer to acquire the four
properties. As a result of such offer, the Company began actively marketing
the properties for sale and accordingly has reclassified them to held for sale.
The combined carrying value of the four properties is $8.8 million at June 30,
1994.
11
12
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 3. REAL ESTATE (Continued)
In April 1991, the Company acquired for cash all of the capital stock of a
corporation which owned 181 developed residential lots in Fort Worth, Texas.
Through December 31, 1993, a total of 143 of the residential lots had been
sold. In the first six months of 1994, nine additional lots were sold for an
aggregate gain of $33,000.
In September 1991, the Company purchased all of the capital stock of Denton
Road Investment Corporation ("Denton Road"), which owns a 60% interest in a
joint venture, which in turn owned 113 partially developed residential lots in
Denton, Texas. Through December 31, 1993, 84 of the residential lots had been
sold. In the first six months of 1994, 17 additional lots were sold for an
aggregate gain of $182,000.
NOTE 4. INVESTMENT IN REAL ESTATE ENTITIES
The Company's investment in real estate entities includes (i) equity securities
of three publicly traded real estate investment trusts (collectively the
"Trusts"), Continental Mortgage and Equity Trust ("CMET"), Income Opportunity
Realty Trust ("IORT") and Transcontinental Realty Investors, Inc. ("TCI"), (ii)
units of limited partner interest of National Realty, L.P. ("NRLP"), (iii) a
general partnership interest in NRLP and National Operating, L.P. ("NOLP"), the
operating partnership of NRLP, through the Company's 76.8% limited partner
interest in Syntek Asset Management, L.P. ("SAMLP") and (iv) interests in real
estate joint venture partnerships. BCM, the Company's advisor, serves as
advisor to the Trusts, and performs certain administrative and management
functions for NRLP and NOLP on behalf of SAMLP.
Because the Company may be considered to have the ability to exercise
significant influence over the operating and investing policies of these
entities, the Company accounts for its investment in the Trusts, NRLP, and the
joint venture partnerships under the equity method of accounting.
Substantially all of the Company's equity securities of the Trusts and NRLP are
pledged as collateral for borrowings.
(THIS SPACE INTENTIONALLY LEFT BLANK.)
12
13
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 4. INVESTMENT IN REAL ESTATE ENTITIES (Continued)
The Company's investment in real estate entities, accounted for under the
equity method, at June 30, 1994 was as follows:
Equivalent
Percentage Carrying Investee
of the Company's Value of Book Value Market Value
Ownership at Investment at at of Investment at
Investee June 30, 1994 June 30, 1994 June 30, 1994 June 30, 1994
- - -------- ----------------- ------------- ------------- ----------------
NRLP 44.9% $ 11,997 $ * $ 26,414
CMET 31.1% 11,277 24,828 12,681
IORT 18.2% 2,092 4,741 2,983
TCI 21.9% 6,231 20,554 8,344
------------- ------------
31,597 $ 50,422
============
General partner
interest in NRLP
and NOLP 7,102
Other 1,137
-------------
$ 39,836
=============
- - --------------------
* At June 30, 1994, NRLP reported a deficit partners' capital. The
Company's share of NRLP's revaluation equity at December 31, 1993,
was $113.0 million. Revaluation equity is defined as the difference
between the appraised value of the partnership's real estate,
adjusted to reflect the partnership's estimate of disposition costs,
and the amount of the mortgage notes payable and accrued interest
encumbering such property as reported in NRLP's Annual Report on Form
10-K for the year ended December 31, 1993.
The Company's management continues to believe that the market value of each of
the Trusts and NRLP undervalues their assets and the Company has, therefore,
continued to increase its ownership in these entities in 1994, as its liquidity
has permitted.
The following information summarizes the combined results of operations of the
real estate entities the Company accounts for using the equity method for the
six months ended June 30, 1994:
Revenues.................................................... $ 87,973
Property operating expenses................................. (59,057)
Depreciation................................................ (9,973)
Interest expense............................................ (26,476)
Provision for losses........................................ (200)
Gain on sale of real estate................................. 549
Gain on sale of partnership interest........................ 2,514
--------
Net (loss).................................................. $ (4,670)
========
13
14
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 4. INVESTMENT IN REAL ESTATE ENTITIES (Continued)
The Company's cash flow from the Trusts and NRLP is dependent on the ability of
each of the entities to make distributions. TCI's distribution policy provides
for an annual determination of distributions after year end, and then only to
the extent necessary to retain its status as a Real Estate Investment Trust
("REIT") for federal tax purposes. The Company expects to receive no
distributions from TCI in 1994. In March 1993, CMET and IORT resumed quarterly
distributions and in December 1993 NRLP also resumed quarterly distributions.
In the first six months of 1994, the Company has received aggregate
distributions of $610,000 from CMET, IORT and NRLP.
In the first six months of 1994, the Company purchased a total of $1.8 million
of equity securities of the Trusts and NRLP.
In January 1992, the Company entered into a partnership agreement with an
entity affiliated with the owner of in excess of 14% of the Company's
outstanding Common Stock, to acquire 287 developed residential lots adjacent to
the Company's other residential lots in Fort Worth, Texas. The partnership
agreement designates the Company as managing general partner. The partnership
agreement also provides the partners with a guaranteed 10% return on their
respective investments. Through December 31, 1993, 18 residential lots had
been sold. In the first six months of 1994 an additional 31 lots were sold.
At June 30, 1994, 238 lots remained to be sold.
NOTE 5. MARKETABLE EQUITY SECURITIES - TRADING PORTFOLIO
In the first quarter of 1994, the Company began purchasing equity securities of
entities other than those of the Trusts and NRLP. Through June 30, 1994, the
Company had made net purchases of $3.1 million of such equity securities to
diversify and increase the liquidity of its margin accounts. These equity
securities are considered a trading portfolio and are carried at market. At
March 31 and June 30, 1994, the Company recognized an unrealized decline of
$79,000 and $16,000, respectively, in the market value of the equity securities
in its trading portfolio at period end. In the second quarter of 1994, the
Company realized a net gain of $222,000 from the sale of trading portfolio
securities. The unrealized decline in market value and the realized net gain
on trading portfolio securities are included in other income in the
accompanying Consolidated Statements of Operations.
NOTE 6. NOTES AND INTEREST PAYABLE
In March 1992, the Company obtained a $1.3 million working capital loan from a
financial institution. The loan was secured by equity securities of the Trusts
and NRLP. The loan originally matured April 1, 1993 and was extended to April
1, 1994. The balance of the loan, $350,000 at March 31, 1994, plus accrued but
unpaid interest, was paid off at maturity.
14
15
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 6. NOTES AND INTEREST PAYABLE
At December 31, 1993, the Company had reached agreement, with a financial
institution lender, to extend its loan to the Company with a balance of $10.0
million at June 30, 1994 and collateralized by a note receivable with an
outstanding principal balance of $17.2 million, to December 18, 1997. The
Company was not able to satisfy all of the lender's technical requirements for
completing the extension. The loan is now scheduled to mature on December 18,
1994, its original maturity date. The loan continues to bear interest at the
lender's prime rate plus 3%. The loan agreement also provides for monthly
payments of interest and quarterly principal payments of $286,000, with the
unpaid principal balance due at maturity. The Company is in compliance with
the terms of the original loan.
At December 31,1993, the Company reached agreement with another lender to
extend its loan, with a principal balance of $600,000 at June 30, 1994, which
had matured in August 1993. The note extension was completed in April 1994,
and provides for a maturity date of July 1995, requires the Company to make
monthly principal payments of $50,000, and to pledge 240,000 newly issued
shares of the Company's Common Stock as additional collateral for the loan.
All other loan terms remained unchanged.
In May 1993, the Company obtained a $1.8 million first lien mortgage secured by
the Rosedale Towers, a 84,798 square foot office building in Minneapolis,
Minnesota, which was previously unencumbered. The Company pledged as
additional collateral for the loan 141,176 newly issued shares of the Company's
Common Stock. The loan matured April 30, 1994. The lender has extended the
loan's maturity date to May 1, 1997, increased the first mortgage principal
balance to $2.5 million and reduced the loan's interest rate to the three-month
LIBOR rate plus 3/4%, fixed at the beginning of each quarter. The loan
extension requires monthly interest only payments, with the principal balance
and accrued but unpaid interest due at maturity.
At the time of paying off the second lien construction loan on the Park Plaza
Shopping Center in December 1993, as discussed in detail in the Company's 1993
Form 10-K, the Company placed $105,000 into an escrow account to complete
remaining parking lot and exterior renovations at the center. The Company
receives credit against the first mortgage for one-half of these monies as
expended. As of June 30, 1994, the Company had expended $100,000 of such
escrowed funds, completing the parking lot and exterior renovations, and
received a credit of $50,000 against the first mortgage, reducing the balance
to $3.6 million at June 30, 1994.
The Company has margin arrangements with various brokerage firms which provide
for borrowings of up to 50% of the market value of the Company's marketable
equity securities. The borrowings under such margin arrangements are secured
by equity securities of the Trusts, NRLP and other marketable equity
securities, and bear interest rates ranging from 5.25% to 8.75%. Margin
borrowings totaled $22.1 million at June 30, 1994.
15
16
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 7. REDEEMABLE COMMON STOCK
In June 1992, the Company sold 397,359 newly issued shares of its Common Stock
to Donald C. Carter for $2.0 million in cash. Terms of the sale agreement
provide Mr. Carter with the option of requiring the Company to reacquire up to
360,000 of the purchased shares at a price of $6.11 per share, a total of $2.2
million. Such option is exercisable by the investor for a two year period
expiring in March 1995. The Company has accreted the difference between the
issuance price and the redemption price using the "interest method". To secure
its payment obligations under the option agreement, the Company assigned to the
investor its interest in the $22 million note receivable secured by the
Continental Hotel and Casino. In addition, BCM, the Company's advisor, and,
the trust that owns BCM, have guaranteed the Company's payment obligation to
repurchase such shares.
NOTE 8. INCOME TAXES
Financial statement income varies from taxable income principally due to the
accounting for income and losses of investees, gains and losses from asset
sales, depreciation on owned properties, amortization of discounts on notes
receivable and payable and the difference in the allowance for estimated
losses. The Company had no taxable income or provision for income taxes in the
six months ended June 30, 1993 or 1994.
NOTE 9. COMMITMENTS AND CONTINGENCIES
Litigation. The Company is involved in various lawsuits arising in the
ordinary course of business. Management of the Company is of the opinion that
the outcome of these lawsuits would have no material impact on the Company's
financial condition.
NOTE 10. LIQUIDITY
The Company's principal sources of cash flow have been and will continue to be
from property operations, collection of mortgage notes receivable, sales of
real estate and notes receivable and externally generated funds. Externally
generated funds include borrowings against marketable equity securities,
proceeds from borrowings secured by real estate and notes receivable,
borrowings from the Company's advisor, as well as a possible equity offering to
the Company's stockholders.
The Company continues to experience liquidity problems and expects that cash
flow from operations together with externally generated funds will be
sufficient to meet its various cash needs only if the Company is able to renew
and extend mortgage financings as they mature. If the Company is unsuccessful
in obtaining new financing or refinancings, the Company anticipates it could
obtain additional advances from its advisor in amounts sufficient to satisfy
its cash requirements. During the remainder of 1994, notes payable totaling
$13.2 million come due. It is the Company's intention to either pay such debt
when due or seek to
16
17
AMERICAN REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
NOTE 10. LIQUIDITY (Continued)
extend the maturity dates one or two years while attempting to obtain long-term
financing. Due to the limited long-term financing available to the Company,
there can be no assurance that the Company will be successful in extending such
"balloon" payments or that it will not ultimately lose certain of its assets to
foreclosure. However, the Company's management believes it will continue to be
successful in obtaining at least the minimum amount of extensions or other
proceeds or advances to enable it to maintain anticipated levels of property
operations, existing commitments and ownership of all properties in which it
has equity.
_____________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Introduction
American Realty Trust, Inc. (the "Company") was organized in 1961 to provide
investors with a professionally managed, diversified portfolio of equity real
estate and mortgage loan investments selected to provide opportunities for
capital appreciation as well as current income.
Liquidity and Capital Resources
General. Cash and cash equivalents at June 30, 1994 aggregated $298,000,
compared with $843,000 at December 31, 1993. Although the Company anticipates
that during the remainder of 1994 it will generate excess funds from
operations, as discussed below, such excess funds are not sufficient to
discharge all of the Company's debt obligations as they mature. The Company
will therefore continue to rely on externally generated funds, including
borrowings against its investments in various real estate entities and other
marketable securities, mortgage notes receivable, the sale or refinancing of
properties and to the extent available and necessary, borrowings from its
advisor to meet its debt service obligations, pay taxes, interest and other
non-property related expenses.
At December 31, 1993, notes payable totaling $10.7 million had scheduled
maturities during 1994 or were in default. As discussed below, the Company has
reached agreement with the lenders on $6.9 million of such debt to modify and
extend their debt. In addition, the Company paid off an additional $350,000
debt obligation on its April 1, 1994 maturity.
However, the Company's borrowing from a financial institution, with a balance
of $10.0 million at June 30, 1994 is now scheduled to mature on December 18,
1994. At December 31, 1993, the Company and the lender had
17
18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
reached agreement to extend the note's maturity date to December 18, 1997. The
Company was not able to satisfy all of the lender's technical requirements for
completing the extension and the note's maturity has reverted to the original
maturity date of December 8, 1994.
The Company intends to either payoff, extend the maturity dates or obtain
alternate financing for its debt obligations that mature in the remainder of
1994. There can be no assurance, however, that these efforts to obtain
alternative financing or debt extensions will be successful.
The Company expects an increase in cash flow from property operations during
the remainder of 1994. This increase in cash flow is expected to be derived
from operations of the hotel and apartment complex the Company acquired in 1993
and from the operations of the Denver Merchandise Mart and Hotel (the "Mart")
obtained in the second quarter of 1994. The Company also expects continued lot
sales at its two Texas residential subdivisions generating additional cash
flow. See NOTE 3. "REAL ESTATE."
The Company expects that funds from existing cash sources, collections on
mortgage notes receivable, sales or refinancing of real estate and/or mortgage
notes receivable, and borrowings against its investments in marketable equity
securities, notes receivables and, to the extent available and necessary,
borrowings from the Company's advisor, will be sufficient to meet the cash
requirements associated with its current and anticipated level of operations,
maturing debt obligations and existing commitments in the foreseeable future.
To the extent that the Company's liquidity permits, the Company may make equity
investments in real estate, additional investments in marketable equity
securities and fund or acquire mortgage notes.
Notes Receivable. The Company anticipates a continued improvement in the
operations of the properties securing its mortgage notes receivable in certain
regions of the continental United States. In spite of this perceived
improvement in the real estate market in general, the Company can give no
assurance that it will not experience renewed deterioration in cash flow from
notes receivable due to new problem loans.
In April 1994, the Company, the borrower and the underlying lienholder agreed
to modify and extend both the Company's $22.7 million wraparound mortgage note
receivable secured by the Continental Hotel and Casino and the underlying notes
payable. The modified note receivable accrues interest at 11% per annum with
any unpaid interest being added monthly to the principal balance and requires
interest payments of $150,000 per month from May 1, 1994 through January 1,
1995, at which time monthly payments will increase to $250,000 until maturity
on July 1, 1995. In conjunction with the modification of the Company's
wraparound mortgage note receivable, the underlying lienholder has agreed to
forebear
18
19
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
exercising its rights under its first and second liens on the condition that
the Company remit to it the greater of either $150,000 or all sums received by
the Company, after May 1, 1994, on the Company's wraparound mortgage note
receivable and a principal payment of $225,000, upon execution of the
forbearance agreement which was made on June 29, 1994. Both notes are
performing in accordance with their modified terms.
In April 1990, Syntek Asset Management, L.P. ("SAMLP") made a $1.4 million
unsecured loan to Equity Health and Finance Corporation ("Equity Health"), an
entity affiliated with Basic Capital Management, Inc. ("BCM"), the Company's
advisor. In June 1991, Equity Health merged into BCM, and BCM assumed the
note. The note matured on May 9, 1994, and its principal balance of $399,000
and accrued interest of $98,000 were paid in full.
In June 1994, the Company and the borrower on a $1.9 million first mortgage
note receivable which had matured on December 31, 1992 and was secured by a
vacant former hotel in Shaker Heights, Ohio entered into an agreement of
settlement and release. The Company accepted $1.0 million in cash and the
right to participate in the future appreciation of the property, if any, in
full satisfaction of its note receivable. The Company incurred no loss in
excess of the amounts previously provided.
Also in June 1994, the Company sold its $900,000 first mortgage note receivable
secured by the 386 Ocean Parkway Co-op and 21 shares in the co-op equating to
21 unsold apartment units for $450,000 in cash. The Company incurred no loss
on the sale in excess of the amounts previously provided. See NOTE 2. "NOTES
AND INTEREST RECEIVABLE."
Loans Payable. As discussed above, the Company has reached agreement with the
underlying lienholder on the Company's $22.7 million wraparound mortgage note
receivable secured by the Continental Hotel and Casino. The underlying liens
totaled $6.1 million at June 30, 1994. See NOTE 2. "NOTES AND INTEREST
RECEIVABLE."
The Company has modified and extended the $1.8 million first mortgage secured
by the Rosedale Towers Office Building and increased the loan balance to $2.5
million. The new loan bears interest at the three-month LIBOR rate plus 3/4%,
fixed at the beginning of each quarter and requires monthly interest only
payments, with the principal balance and accrued but unpaid interest due at
maturity on May 1, 1997. See NOTE 6. "NOTES AND INTEREST PAYABLE."
The Company has margin arrangements with various brokerage firms which provide
for borrowings up to 50% of the market value of marketable equity securities.
The borrowings under such margin arrangements are secured by such equity
securities and bear interest rates ranging from 5.25% to 8.75%. Margin
borrowings totaled $22.1 million at June 30, 1994, an increase of $6.0 million
from December 31, 1993.
19
20
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Liquidity and Capital Resources (Continued)
Equity Investments. The Company has investments in shares of three Real Estate
Investment Trusts ("REIT")having the same advisor as the Company (the
"Trusts"), and units of limited partner interest in National Realty, L.P.
("NRLP"). It is anticipated that additional equity securities of the Trusts,
Continental Mortgage and Equity Trust ("CMET"), Income Opportunity Realty Trust
("IORT") and Transcontinental Realty Investors, Inc. ("TCI"), and of NRLP will
be acquired in the future through open-market and negotiated transactions to
the extent the Company's liquidity permits.
Equity securities of CMET, IORT, TCI and NRLP held by the Company may be deemed
to be "restricted securities" under Rule 144 of the Securities Act of 1933
("Securities Act"). Accordingly, the Company may be unable to sell such equity
securities other than in a registered public offering or pursuant to an
exemption under the Securities Act for a period of two years after they are
acquired. Such restrictions may reduce the Company's ability to realize the
full fair market value of such investments if the Company attempted to dispose
of such securities in a short period of time.
The Company's cash flow from these investments is dependent on the ability of
each of the entities to make distributions. TCI's distribution policy provides
for an annual determination of distributions after year end, and then only to
the extent necessary to retain its status as a REIT for federal tax purposes.
The Company expects to receive no distributions from TCI in 1994. CMET, IORT
and NRLP returned to the payment of quarterly distributions in 1993. The
Company has received distributions totaling $610,000 in 1994 from CMET, IORT
and NRLP.
The Company's management, on a quarterly basis, reviews the carrying value of
the Company's mortgage loans, properties held for investment and properties
held for sale. Generally accepted accounting principles require that the
carrying value of an investment held for sale cannot exceed the lower of its
cost or its estimated net realizable value. In those instances in which
estimates of net realizable value of the Company's properties are less than the
carrying value thereof at the time of evaluation, a provision for loss is
recorded by a charge against operations. The estimate of net realizable value
of the mortgage loans is based on management's review and evaluation of the
collateral properties securing such loans. The review generally includes
selective property inspections, a review of the property's current rents
compared to market rents, a review of the property's expenses, a review of the
maintenance requirements, discussions with the manager of the property and a
review of the surrounding area.
20
21
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Commitments
In June 1992, the Company sold 397,359 newly issued shares of its Common Stock
to a private investor for $2.0 million in cash. Terms of the sale agreement
provide the purchaser with an option to require the Company to reacquire up to
360,000 of the shares at $6.11 per share, a total of $2.2 million. Such option
is exercisable for a two year period expiring in March 1995. To secure its
payment obligations under the option agreement, the Company assigned its
interest in the wraparound mortgage note receivable secured by the Continental
Hotel and Casino. In addition, BCM, the Company's advisor, and the trust that
owns BCM have agreed to guarantee the Company's payment obligation.
In October 1993, NRLP, Syntek Asset Management, L.P. ("SAMLP"), the NRLP
Oversight Committee and the Company reached an agreement evidenced by a
detailed Term Sheet to nominate a candidate to succeed SAMLP as general partner
of NRLP and National Operating, L.P. ("NOLP"), the operating partnership of
NRLP, and to consummate the 1990 settlement of a class action suit. The Term
Sheet also set forth an agreement in principle to effect a restructuring of
NRLP and the spinoff by NRLP to its unitholders of shares of a newly- formed
subsidiary which would qualify as a REIT for federal tax purposes. The Company
is NRLP's largest unitholder and a 76.8% limited partner of SAMLP. SAMLP
currently serves as the general partner of NRLP and NOLP and a newly formed
subsidiary of SAMLP was to be nominated as successor general partner. The Term
Sheet further provided that within nine months of the spinoff transaction, the
Company would make a cash tender offer to purchase up to 60% of NRLP's units of
limited partner interest held by unitholders unaffiliated with the Company or
SAMLP for $12.00 per unit (an estimated maximum purchase price of $8.0
million), unless the NRLP units had traded at an appreciably higher average
price for the prior thirty days. In July 1994, the parties determined that the
proposed spinoff was no longer in the best interests of NRLP's unitholders.
The parties are evaluating other alternatives to consummate the settlement.
Results of Operations
For the three months ended June 30, 1994, the Company had a net loss of $1.2
million, compared to a net loss of $677,000 for the three months ended June 30,
1993. For the six months ended June 30, 1994, the Company had a net loss of
$2.5 million, compared to a net income of $2.0 million for the six months ended
June 30, 1993. The primary factors contributing to the Company's net income
and loss in each of the periods are discussed in the following paragraphs.
Net rental income (rental income less property operating expenses) increased
from $666,000 and $1.1 million for the three and six months ended June 30, 1993
to $1.2 million and $2.0 million for the three and six months ended June 30,
1994. The year to date and three month increases are due to the Company's 1993
acquisitions of an apartment
21
22
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Results of Operations (Continued)
complex in Nevada and a hotel in Kansas City and the Company's obtaining the
Mart in April 1994. These increases were partially offset by the August 1993
sale of the Fox City Shopping Center.
Interest income decreased from $1.6 million and $3.3 million for the three and
six months ended June 30, 1993 to $1.1 million and $1.8 million for the three
and six months ended June 30, 1994. These decreases are primarily attributable
to the Continental Hotel and Casino wraparound mortgage note receivable which
was nonperforming in the first and a portion of the second quarters of 1994 and
the August 1993 Collecting Bank settlement, discussed in detail in the
Company's 1993 Form 10-K.
Equity in losses of investees decreased from a loss of $1.2 million for the six
months ended June 30, 1993 to a loss of $1.1 million for the six months ended
June 30, 1994 and increased from a loss of $424,000 for the three months ended
June 30, 1993 to a loss of $545,000 for the three months ended June 30, 1994.
The fluctuation in equity losses is attributable to the Company's continued
increase in equity ownership in each of CMET, IORT, TCI and NRLP, increasing
the Company's proportionate share of equity in the results of operations of
each such entity. Combined results of operations for the four entities
operating loss increased from $5.8 million for the six months ended June 30,
1993 to an operating loss of $7.7 million for the six months ended June 30,
1994.
Other income increased from $74,000 and $120,000 for the three and six months
ended June 30, 1993 to $353,000 and $718,000 for the three and six months ended
June 30, 1994. The three month increase is primarily attributable to a
$222,000 realized net gain on the sale of marketable equity securities and in
the six months, such gain and a $391,000 preferred return from a joint venture.
Interest expense increased from $1.6 million for the three months ended June
30, 1993 to $2.1 million for the three months ended June 30, 1994 and from $3.1
million for the six months ended June 30, 1993 to $3.7 million for the six
months ended June 30, 1994. The year to date and three month increases are
attributable to debt refinancings and new debt incurred or assumed on property
acquisitions subsequent to June 30, 1993 and a $6.0 million increase in margin
borrowings.
Depreciation and amortization increased from $267,000 and $504,000 for the
three and six months ended June 30, 1993 to $421,000 and $756,000 for the three
and six months ended June 30, 1994. These increases are due to the Company's
obtaining the Mart in April 1994 and the acquisition of a hotel in Kansas City
and an apartment complex in Nevada in 1993.
Advisory and mortgage servicing fees of $312,000 and $640,000 for the three and
six months ended June 30, 1993 approximated the $305,000 and $625,000 for the
three and six months ended June 30, 1994.
22
23
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Results of Operations (Continued)
General and administrative expenses were $666,000 and $879,000 for the three
and six months ended June 30, 1993 compared to $406,000 and $1.0 million for
the three and six months ended June 30, 1994. The three month decrease is
primarily attributable to legal and consulting fees relating to debt financings
incurred in the second quarter of 1993 but not 1994. The six month increase is
primarily attributable to legal fees incurred in the first quarter of 1994 in
connection with litigation relating to a loan guarantee and legal and
consulting fees incurred on debt and notes receivable extensions and
modifications.
Gains on sale of real estate sales were $119,000 and $262,000 for the three and
six months ended June 30, 1993 compared to $57,000 and $233,000 for the three
and six months ended June 30, 1994. The 1993 gains were the result of the sale
of 50 residential lots in Texas compared to the sale of the 26 lots in 1994.
See NOTE 3. "REAL ESTATE."
The Company reported a $3.4 million extraordinary gain for the six months ended
June 30, 1993 compared to a $50,000 extraordinary gain in the six months ended
June 30, 1994. The extraordinary gain in 1993 is the Company's share of an
equity investee's first quarter 1993 reported extraordinary gain of $9.0
million from its discounted payoff of mortgage debt. The 1994 extraordinary
gain is due to the forgiveness of a portion of a first mortgage from early
payoff of the second mortgage. See NOTE 6. "NOTES AND INTEREST PAYABLE."
Environmental Matters
Under various federal, state and local environmental laws, ordinances and
regulations, the Company may be potentially liable for removal or remediation
costs, as well as certain other potential costs relating to hazardous or toxic
substances (including governmental fines and injuries to persons and property)
where property-level managers have arranged for the removal, disposal or
treatment of hazardous or toxic substances. In addition, certain environmental
laws impose liability for release of asbestos- containing materials into the
air, and third parties may seek recovery from the Company for personal injury
associated with such materials.
The Company's management is not aware of any environmental liability relating
to the above matters that would have a material adverse effect on the Company's
business, assets or results of operations.
Recent Accounting Pronouncement
The Financial Accounting Standards Board ("FASB") has issued Statement of
Financial Accounting Standards ("SFAS") No. 114 - "Accounting by Creditors for
Impairment of a Loan" which amends SFAS No. 5 -
23
24
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Recent Accounting Pronouncement (Continued)
"Accounting for Contingencies" and SFAS No. 15 - "Accounting by Debtors and
Creditors for Troubled Debt Restructurings." The statement requires that
impaired loans be measured based on the present value of expected future cash
flows discounted at the loan's effective interest rate. SFAS No. 114 is
effective for fiscal years beginning after December 15, 1994. The Company's
management has not fully evaluated the effects of implementing this statement
but expects that they will not be material as the statement is applicable to
debt restructurings after the earlier of the effective date of the statement or
the Company's adoption of the statement.
At its January 26, 1994 meeting, the FASB directed its staff to prepare an
exposure draft, that if approved, would eliminate the provisions of SFAS No.
114 that describe how a creditor should recognize income on an impaired loan
and add disclosure requirements on income recognized on impaired loans. The
effective date of SFAS No. 114 is not anticipated to change.
________________________________________
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K as follows:
None.
24
25
SIGNATURE PAGE
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 thereunto duly authorized.
AMERICAN REALTY TRUST, INC.
Date: August 19, 1994 By: /s/ Karl L. Blaha
Karl L. Blaha
President
Date: August 19, 1994 By: /s/ Hamilton P. Schrauff
Hamilton P. Schrauff
Executive Vice President and
Chief Financial Officer
25