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 (July 22, 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 July 22, 1994, American Asset Advisers Trust, Inc. (the
"Company"), acquired fee simple title to real estate and
improvements located at 5120 South Cobb Drive, Smyrna, Georgia,
on which there is a Church's Chicken restaurant (the "Property").
The Property was acquired by the Company from America's Favorite
Chicken Company for $789,532.00. The purchase price was paid in
cash entirely from funds of the Company. The Property is
operated as a Church's Chicken restaurant. The Property consists
of a free standing building located on a tract of land containing
approximately 0.782 acres. The improvements consist of a one
story building containing approximately 2,200 square feet.
The Property was acquired subject to a lease (the "Lease")
with America's Favorite Chicken Company, a Minnesota corporation.
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 maintenance and repairs.
Other significant provisions of the Lease are as follows:
1. The original term of the Lease is 20 years. The
original term of the Lease began on July 22, 1994 and
will expire 20 years later. The tenant has the option
to renew the lease for 4 additional terms of 5 years
each.
2. Base annual minimum rent during the first five years of
the original term of the Lease will be $90,796.00. The
base annual minimum rent will be $99,875.00 during the
second five years of the original term, $109,862.00
during the third five years of the original term, and
$120,847.00 during the final five years of the original
term.
3. In addition to the base rent, the tenant pays
percentage rent equal to 5% times certain specified
"breakpoints" specified in the Lease.
4. In addition to the base rent, the tenant pays all real
estate taxes on the Property. The tenant also pays for
all utilities charges.
5. The landlord is not required to maintain and repair the
Property. The tenant is required to maintain and
repair all of the Property.
6. The tenant has the right to use the Property as for all
lawful purposes not in contravention of applicable
zoning laws or private covenants and restrictions.
7. 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.
8. The tenant is required to carry liability insurance in
the amount of $1,000,000.00 per occurrence and
$2,000,000.00 in the aggregate. The tenant is required
to carry hazard insurance coverage on the Property in
an amount equal to replacement costs of the
improvements on the Property.
9. If at any time during the term of the Lease there is
casualty damage to the extent of 50% or more of the
Property's insurable value or if during the semi-annual
period immediately preceding the expiration of the
Lease there is casualty damage to the extent of 10% or
more of the Property's insurable value, either the
landlord of the tenant may terminate the Lease.
10. In the event that substantially all of the Property is
taken by condemnation, the Lease shall terminate. In
the event that more than 10% of the Property is taken
by condemnation, or the parking area on the Property is
reduced by more than 20% by condemnation, or access to
the Property from any abutting public street should be
interrupted for 3 months or more, or if pedestrian
access from the parking area of the Property to the
building should cease, or any part of the Property
should be taken by condemnation during the last year of
the term of the Lease, the tenant may terminate the
Lease.
Fast-food and family-style restaurants located in close
proximity to the Property include a Subway, a Blimpie, a Taco
Bell, a Checkers and an Arby's, in addition to several local
restaurants.
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 EXHIBITS.
The tenant of the Property is America's Favorite
Chicken Company ("AFCC"), a privately held corporation. AFCC has
provided its financial statements to the Company, and the Company
has determined that AFCC meets all Company established criteria
with respect to the credit worthiness of prospective tenants.
AFCC has required that these financial statements and related
financial information provided to the Company be treated as
confidential information since otherwise AFCC believes it would
be adversely affected if this information was obtained by its
competition.
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:
PRO-FORMA BALANCE SHEET
JUNE 30, 1994
(unaudited)
Historical Pro-Forma
Costs Adjustments (1) Total
Cash $1,190,007 ($795,995) $ 394,012
Property 1,104,361 834,995 1,939,356
Other
Assets 202,783 (39,000) 163,783
Total
Assets $2,497,151 $ - $2,497,151
Liabilities $ 10,713 $ - $ 10,713
Shareholder's
Equity 2,486,438 - 2,486,438
Total
Liabilities &
Shareholder's
Equity $2,497,151 $ - $2,497,151
(1) Adjustments include total acquisition costs of $834,995 for the
Property which consists of $39,000 of acquisition costs paid by the
Company to an affiliate, $6,463 of acquisition fees paid to third
parties and $789,532 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 a property acquired in June 1994 which
is on lease to Tandy Corporation as if the property was
owned and leased for the entire period.
(2) Pro-forma results of operations are not reflected for
the Property in 1993 because the Property has not been
completed.
(3) Computed on weighted average shares outstanding of 151,554.
PRO-FORMA RESULTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1994
(unaudited) (2)
Historical Pro-Forma
Costs Adjustments (1)(2) Total
Income $14,725 $49,610 $64,335
Expenses $14,140 $ 9,231 $23,371
Net
Income $ 585 $40,379 $40,964
Net Income
Per Share (3) $ .43
(1) Includes pro-forma adjustments for rental income and
depreciation for a property acquired in June 1994 which is on
lease to Tandy Corporation as if the property was owned and
leased for the entire six months ended June 30, 1994 because
the Property had not been completed.
(2) Pro-forma results of operations are not reflected for the
Property for the six months.
(3) Computed on weighted average shares outstanding of 94,967.
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