FORM 8-K-A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported) July 30, 1996
(November 14, 1994)
AMERICAN ASSET ADVISERS TRUST, INC.
(Name of registrant as specified in its charter)
Maryland 33-70654 76-0410050
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
8 Greenway Plaza, Suite 824, Houston, Texas 77046
(Address of principal executive office and zip code)
Registrant's telephone number, including area code: (713) 850-1400
ITEM 1. CHANGES OF CONTROL OF REGISTRANT
Not Applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 14, 1994, a joint venture (the "Joint Venture")
composed of affiliates AAA Net Realty Fund X, Ltd. (the
"Partnership"), and American Asset Advisers Trust, Inc. (the
"Company"), acquired fee simple title to real estate and
improvements located at 13907 East Highway 40 (the intersection
of Highway 40 and Nolan Road), Independence, Missouri, on which
there is a BlockBuster Music Store (the "Property"). The
Property was acquired by the Joint Venture from KCBB, Inc., for
$1,550,000.00. The purchase price was paid in cash entirely from
funds of the Partnership and the Company. The Partnership owns a
45.16% interest in the Joint Venture. The Company owns a 54.84%
interest in the Joint Venture. The Property is operated as a
BlockBuster Music store. The Property consists of a free
standing building located on a tract of land containing
approximately 1.374 acres. The improvements consist of a free
standing, one story, masonry building containing approximately
15,158 square feet.
The Property was acquired subject to a lease (the "Lease")
with Blockbuster Music Retail, Inc., a Texas corporation.
BlockBuster is a subsidiary of Viacom, Inc., the successor-in-
interest by merger to BlockBuster Entertainment Corporation which
guaranteed the primary term of the Lease. Under the terms of the
Lease, the tenant pays a base rent, plus real estate taxes,
hazard and liability insurance premiums, all utility costs, and
the costs of most maintenance and repairs.
Other significant provisions of the Lease are as follows:
1. The original term of the Lease is 10 years. The
original term of the Lease began on April 18, 1994 and
will expire April 30, 2004. The tenant has the option
to renew the lease for 3 additional terms of 5 years
each.
2. Base annual minimum rent during the first five years of
the original term of the Lease is $170,527.44. (Based
upon the current base annual rent, the initial
capitalization rate is 11.0%). The base annual minimum
rent will be $187,656.04 during the second five years
of the original term. During the 3 renewal terms the
base annual rent will be $206,300.38, $226,915.26 and
$249,652.26, respectively.
3. In addition to the base rent, the tenant pays all real
estate taxes on the Property. The tenant also pays for
all utilities charges.
4. The landlord is required to maintain and repair, if
necessary, the foundation, exterior paint, exterior
plumbing system, exterior electrical system, the
exterior utility lines and connections to the Property,
the sprinkler mains, if any, structural systems,
including the roof, roof membrane, roof covering and
load bearing walls, floor slabs and masonry walls. The
tenant is required to maintain and repair all of the
portions of the Property not maintained by the
landlord.
5. The tenant has the right to use the Property for retail
sales and for any lawful use.
6. The tenant has the right to assign the Lease or sublet
the Property. However, in the event of an assignment
or sublet, the tenant will remain as the principal
obligor under the Lease.
7. The tenant is required to carry liability insurance in
the amount of not less than $1,000,000.00 per
occurrence. The tenant is required to reimburse the
landlord for hazard insurance coverage on the Property
in an amount equal to replacement costs of the
improvements on the Property.
8. In the event that 50% or more of the building on the
Property is destroyed by casualty during the last year
of the primary term of the lease or any renewal term,
then landlord or tenant may terminate the Lease.
9. In the event that any portion of the building on the
Property is taken by condemnation, then either the
landlord or the tenant my terminate the Lease. In the
event that 10% of the land on the Property is taken by
condemnation, then the tenant may terminate the Lease.
There are no retail music stores in the immediate vicinity
of the Property. In the vicinity of the Property are merchants
such as K-Mart, Builder's Square, Black-Eyed Pea Restaurant, Toys
"R" Us and Best Buy. Approximately 57,000 vehicles per day pass
through the intersection of Highway 40 and Nolan Road.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable
ITEM 5. OTHER EVENTS
Not Applicable
ITEM 6. RESIGNATION OF REGISTRANT'S GENERAL PARTNER
Not Applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBIT
The tenant of the Property is BlockBuster Music Retail, Inc.
("BlockBuster"), a Texas corporation. BlockBuster is a
subsidiary of Viacom, Inc., the successor-in-interest by merger
to BlockBuster Entertainment Corporation which guaranteed the
primary term of the Lease. The decision to acquire the Property
was based on several factors, including the financial condition
of Viacom, Inc. ("Viacom"). With respect to Viacom, as reported
by its management, revenues totalled $2 billion and $1.86 billion
for the years ended December 31, 1993 and 1992. Viacom recorded
consolidated net income of $120.6 million and $120.2 million for
the same periods. Current assets at December 31, 1993, exceeded
current liabilities by $1.7 billion and total assets exceeded
total liabilities by $2.7 billion. It is the opinion of the
management of the Company, following review of the consolidated
financial statements of Viacom and subsidiaries, that Viacom's
financial condition is sufficient to meet the investment criteria
of the Company.
PRO-FORMA FINANCIAL INFORMATION
The following tables present unaudited pro-forma financial
information for American Asset Advisers Trust, Inc., giving
effect to the acquisition of the Property. The acquisition is
reflected on a consolidated basis.
PRO-FORMA BALANCE SHEET
SEPTEMBER 30, 1994
(unaudited)
Historical Pro-Forma
Costs Adjustments (1) Total
Cash $1,314,003 $ (853,401) $ 460,602
Property 1,924,209 1,627,537 3,551,746
Other Assets 232,507 (39,000) 193,507
Total Assets $3,470,719 $ 735,136 $4,205,855
Liabilities 654 - 654
Minority Interest - 735,136 735,136
Shareholders'
Equity 3,470,065 - 3,470,065
Total Liabilities &
Shareholders'
Equity $3,470,719 $ 735,136 $4,205,855
(1) Adjustments are reflected as if the Property acquisition was
completed on September 30, 1994. Adjustments include total
acquisition costs of $1,627,537 of which $735,136 is the minority
partner s share, $39,000 was paid by the Company to an affiliate for
acquisition fees, $3,381 was paid by the Company to third parties for
acquisition fees and $850,020 was paid by the Company for the
Property.
PRO-FORMA RESULTS OF OPERATIONS
FOR THE PERIOD FROM AUGUST 16, 1993 THROUGH DECEMBER 31, 1993
(unaudited) (2)
Historical Pro-Forma
Costs Adjustments (1)(2) Total
Income $1,606 $40,837 $42,443
Expenses 2,931 7,544 10,475
Net
Income (Loss) ($1,325) $33,293 $31,968
Net Income Per Share (3) $ .21
(1) Includes pro-forma adjustments for rental income and
depreciation for the period from August 16, 1993 (inception)
through December 31, 1993, for a property acquired in June
1994 as if the property was owned and leased by the Company
for the entire period.
(2) Pro-forma results of operations are not reflected for the
Property in 1993 because the Property had not been
completed.
(3) Computed on weighted average shares of 151,554.
PRO-FORMA RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
(unaudited)
Historical Pro-Forma
Costs Adjustments(1)(2) Adjustments(1)(3) Total
Income $69,793 $53,013 $82,346 $205,152
Expenses $39,632 $ 6,513 $13,388 $ 59,533
Minority
Interest - - 31,141 31,141
Net
Income $30,161 $46,500 $37,817 $114,478
Net Income
Per Share (4) $ .64
(1) Adjustments are reflected as if the "Tandy" property discussed in (2)
below was owned and leased by the Company for the nine-month period,
the America's Favorite Chicken property discussed in (2) below and the
Property were owned and leased by the Company from the date of lease
inception through September 30, 1994.
(2) Includes pro-forma adjustments as follows from the acquisition of
properties on lease to Tandy Corporation in June 1994 and to America's
Favorite Chicken Company ("AFCC") in August 1994:
Tandy Rental income and depreciation as if the property was owned
and leased by the Company for the entire nine-month period.
AFCC Earned income from the direct financing lease from the date
of lease inception through September 30, 1994.
(3) Includes pro-forma adjustments as follows from the acquisition of the
Property:
Consolidated rental income and depreciation from the date of lease
inception through September 30, 1994.
Minority partner's interest of $31,141.
(4) Computed weighted average shares of 178,577.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
SIGNATURES
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 Asset Advisers Trust, Inc.
Date: July 30, 1996 H. Kerr Taylor
H. Kerr Taylor, President
Date: July 30, 1996 H. Kerr Taylor
H Kerr Taylor, Chief Financial Officer