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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) December 8, 1995
EQK REALTY INVESTORS I
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Massachusetts 1-8815 23-2320360
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(State or other juris- (Commission File Number) (IRS Employer Identification No.)
diction of incorporation)
5775 Peachtree Dunwoody Road, Suite 200D, Atlanta, GA 30342
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 303-6100
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N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets
On December 8, 1995, EQK Realty Investors I (the "Trust") completed the sale of
Castleton Park, its 1.1 million square foot office complex located in
Indianapolis, Indiana. The complex was purchased by K/B Fund III, a Delaware
General Partnership, which is an affiliate of a major national real estate
advisory firm. The Trust's net proceeds from this transaction, approximately
$35,990,000, were used to partially repay the Trust's mortgage note payable
and term loan payable to bank.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(b) Pro Forma Financial Information:
- Introduction to Pro Forma Financial Information
- Pro Forma Balance Sheet as of September 30, 1995
- Pro Forma Statement of Operations for the nine months ended
September 30, 1995
- Pro Forma Statement of Operations for the year ended
December 31, 1994
- Notes to Pro Forma Financial Information
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SIGNATURE
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.
EQK REALTY INVESTORS I
DATE: DECEMBER 21, 1995 BY: /s/ WILLIAM G. BROWN, JR.
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NAME: WILLIAM G. BROWN, JR.
TITLE: VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
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EQK REALTY INVESTORS I
INTRODUCTION TO PRO FORMA FINANCIAL INFORMATION
(Unaudited)
The Pro Forma Balance Sheet as of September 30, 1995 presents the remaining
assets, liabilities and deficit in shareholders' equity of EQK Realty Investors
I (the "Trust") after restatement to reflect the sale of Castleton Park, its
1.1 million square foot office complex located in Indianapolis, Indiana. The
sale of the complex was completed on December 8, 1995.
The Pro Forma Balance Sheet presents the financial position of the Trust
assuming the sale had been consummated on September 30, 1995. Sales proceeds
were used to retire portions of the Trust's mortgage note payable and term loan
payable to bank. The remaining debt continues to be secured by the Trust's sole
remaining real estate investment, Harrisburg East Mall, a regional shopping
mall located in Harrisburg, Pennsylvania.
The Pro Forma Statements of Operations for the nine months ended September 30,
1995 and the year ended December 31, 1994 present the results of the remaining
operations of the Trust assuming this sales transaction had been consummated as
of January 1, 1994.
The pro forma financial information does not purport to be indicative of the
results of operations or financial position which would have actually resulted
if the sales transaction had been consummated on the date indicated. In
additon, the pro forma financial information does not purport to be indicative
of the results of operations or financial position which may be obtained in the
future.
The pro forma financial information has been prepared by the Trust, without
audit, and all calculations have been made by the Trust based on the
assumptions deemed appropriate by the Trust. Certain of these assumptions are
set forth under the notes to Pro Forma Financial Information.
The pro forma financial information should be read in conjunction with the
Trust's historical Financial Statements and Notes thereto contained in the
December 31, 1994 Annual Report on Form 10-K and the Quarterly Report on Form
10-Q for the quarter ended September 30, 1995.
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EQK REALTY INVESTORS I
PRO FORMA BALANCE SHEET
as of September 30, 1995
(Unaudited)
In thousands, except for share amounts
HISTORICAL
9/30/95 PRO FORMA PRO FORMA
PER FORM 10-Q ADJUSTMENTS 9/30/95
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ASSETS
Investments in real estate held for sale, at lower
of cost or net realizable value
Castleton Park, net of valuation allowance
of $22,765 $ 59,563 ($59,563)(a) --
Harrisburg East Mall 51,840 $ 51,840
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111,403 51,840
Less accumulated depreciation (34,867) 21,856 (b) (13,011)
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76,536 38,829
Cash and cash equivalents:
Cash Management Agreement 1,547 2,413 (c) 3,960
Other 870 870
Accounts receivable and other assets 7,933 (757)(d) 7,176
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TOTAL ASSETS $ 86,886 $ 50,835
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LIABILITIES AND DEFICIT IN
SHAREHOLDERS' EQUITY
Liabilities:
Mortgage note payable, net of
debt discount of $47 $ 78,582 ($34,738)(e) $ 43,844
Term loan payable to bank 2,841 (1,252)(e) 1,589
Accounts payable and other
liabilities (including amounts
due affiliates of $2,872) 6,470 6,470
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87,893 51,903
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Deficit in shareholders' equity:
Shares of beneficial interest, without
par value: 10,055,555 shares authorized,
9,264,344 shares issued and outstanding 135,875 135,875
Accumulated deficit (136,882) (61)(f) (136,943)
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(1,007) (1,068)
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TOTAL LIABILITIES AND
DEFICIT IN SHAREHOLDERS' EQUITY $ 86,886 $ 50,835
========= ========
See accompanying Notes to Pro Forma Financial Information
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EQK REALTY INVESTORS I
PRO FORMA STATEMENT OF OPERATIONS
for the nine months ended September 30, 1995
(Unaudited)
In thousands, except share amounts
HISTORICAL NINE
MONTHS ENDED PRO FORMA NINE
9/30/95 PRO FORMA MONTHS ENDED
PER FORM 10-Q ADJUSTMENTS 9/30/95
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Revenues from rental operations $12,069 ($7,625)(g) $ 4,444
Operating expenses, net of tenant
reimbursements (4,119) 3,602 (g) (517)
Depreciation and amortization (3,765) 1,737 (g) (2,028)
Real estate tax refund 400 (400)(h) --
Write-down of investment in
real estate (3,200) 3,200 (i) --
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Income from rental operations 1,385 1,899
Interest Expense 6,469 (2,694)(j) 3,775
Other expenses, net of interest
income 736 736
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Net loss ($5,820) ($2,612)
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Net loss per share ($0.63) ($0.28)
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See accompanying Notes to Pro Forma Financial Information
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EQK REALTY INVESTORS I
PRO FORMA STATEMENT OF OPERATIONS
for the year ended December 31, 1994
(Unaudited)
In thousands, except share amounts
HISTORICAL YEAR PRO FORMA
ENDED 12/31/94 PRO FORMA YEAR ENDED
PER FORM 10-K ADJUSTMENTS 12/31/94
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Revenues from rental operations $16,512 ($9,540)(g) $ 6,972
Operating expenses, net of tenant
reimbursements (5,836) 4,837 (g) (999)
Depreciation and amortization (4,612) 2,247 (g) (2,365)
Write-off of capitalized redevelopment
costs (429) (429)
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Income from rental operations 5,635 3,179
Interest expense 8,132 (3,505)(j) 4,627
Other expenses, net of interest
income 962 962
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Net loss ($3,459) ($2,410)
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Net loss per share ($0.37) ($0.26)
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See accompanying Notes to Pro Forma Financial Information
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EQK REALTY INVESTORS I
NOTES TO PRO FORMA FINANCIAL INFORMATION
(Unaudited)
The Pro Forma Statement of Operations for the year ended December 31, 1994 is
derived from the historical Statement of Operations included in the December
31, 1994 Annual Report on Form 10-K. The Pro Forma Balance Sheet as of
September 30, 1995 and the Pro Forma Statement of Operations for the nine
months ended September 30, 1995 are derived from the historical statements
included in the Quarterly Report on Form 10-Q for the quarter ended September
30, 1995.
The pro forma financial information should be read in conjunction with the
Trust's historical Financial Statements and Notes thereto contained in the
December 31, 1994 Annual Report on Form 10-K and the Quarterly Report on Form
10-Q for the quarter ended September 30, 1995. The pro forma financial
information does not purport to be indicative of the results of operations or
the financial position which would have actually resulted if the sale
transaction had been consummated on the date indicated. In addition, the pro
forma financial information does not purport to be indicative of the results of
operations or financial position which may be obtained in the future.
The Pro Forma Adjustments include the following:
(a) Reduction of the historical carrying value of investments in real
estate to reflect the sale of Castleton Park, the Company's 1.1
million square foot office complex located in Indianapolis, Indiana.
(b) Elimination of accumulated depreciation related to Castleton Park.
(c) Inclusion of cash from net sale proceeds in excess of actual amounts
of subsequent reductions to mortgage note payable and term loan
payable to bank.
(d) Elimination of intangible assets specifically related to Castleton
Park, consisting primarily of deferred base rent and capitalized
leasing commissions.
(e) Partial repayment of the Trust's debt using net proceeds from the sale
of Castleton Park.
(f) Represents loss on sale of Castleton Park. See Note (i) below.
(g) Elimination of revenues and expenses specifically related to Castleton
Park.
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(h) Elimination of real estate taxes refunded to the Trust in 1995 on
account of tax years 1989 to 1993, arising from the successful appeal
for a reduction in the assessed value of the real estate underlying
Castleton Park. Although this refund, and any additional refund that
may result from further appeals related to tax assessments made on or
before December 8, 1995, accrues to the Trust, the related benefit
recognized during the nine months ended September 30, 1995 is
eliminated in accordance with the Securities and Exchange Commission's
rules and regulations governing the preparation of pro forma financial
information.
(i) Elimination of write-down of investment in Castleton Park that was
recorded in the third quarter of 1995 in contemplation of the sale of
Castleton Park.
(j) Reduction of interest expense related to the paydown of Trust-level
debt with the net proceeds from the sale of Castleton. The interest
rates applicable to the mortgage note payable were 10.04% and 9.79%
during the nine months ended September 30, 1995 and the year ended
December 31, 1994, respectively, while the interest rate applicable to
the term loan payable to bank was 8.33% for both periods presented.
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