SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) June 7, 2002
URSTADT BIDDLE PROPERTIES INC.
(Exact name of registrant as specified in charter)
Maryland 1-12803 04-2458042
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification No.)
321 Railroad Avenue Greenwich, Connecticut 06830
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code(203) 863-8200
1
ITEM 2-ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Real Property
On March 26, 2002, UB Stamford LP, a newly formed limited partnership in which
Urstadt Biddle Properties Inc. (the "Company") has a 90% general partner
interest, entered into a contract to purchase the Ridgeway Shopping Center (the
"Property") located in Stamford, Connecticut from Stamford Ridgeway Associates
Limited Partnership (the "Seller"). The purchase closed on June 7, 2002. The
purchase price was $89,950,000 including closing costs, fees and other expenses
of approximately $ 670,000 and the assumption of an existing mortgage note
payable of $57,369,000. The balance of the purchase price was funded with cash
and borrowings under the Company's existing secured revolving credit line of
$16,000,000 (interest at the LIBOR plus 150 points (currently 3.375% per annum))
and issuance of a 10% limited partner interest in the partnership to certain of
the partners of the Seller.
The Property was acquired pursuant to a Contribution Agreement by and between
the Seller and Company. There is no relationship between any Director or
Officer of the Company and Seller.
Material Factors Considered by the Company:
Market and Competition:
- ----------------------
In deciding to acquire the Property, the Company considered general regional and
local economic conditions and the Property's competitive posture within that
market. Factors considered by the Company in determining the price to be paid
included among other things, the Property's historical and expected cash flow,
the nature of the tenants and terms of leases in place, current operating costs,
real estate taxes, physical condition of the property and historical occupancy
rates.
The Property is a regional shopping center located in Fairfield County,
Connecticut. The Property has an aggregate net rentable area of approximately
331,000 square feet, approximately 96% of which is leased as of June 7, 2002.
The Property also contains approximately 29,000 square feet of office space,
which is currently being redeveloped and is not available for leasing.
The Property was developed in the 1950's and redeveloped in the mid-1990's. The
Property is the dominant grocery anchored center and the largest non-mall
shopping center located in the City of Stamford, Fairfield County, Connecticut.
Stamford is the fourth largest city in the state of Connecticut with a resident
population of more than 100,000.
2
Tenants:
The Property's largest tenants are: The Stop & Shop Company, a national retail
food store, occupying 60,000 square feet of sales floor area of the Property
(approximately 17% of the Property's gross leasable area (GLA)) and Bed, Bath
and Beyond, a retailer who leases 47,000 square feet of sales floor area
(approximately 13% of GLA). Other than The Stop & Shop Company (22%), Bed, Bath
& Beyond (16%) and Marshall's Inc., a national discounter (11%), no tenant
accounts for more than 10% of the Property's annual base rents.
Substantially all of the leases with tenants are for terms longer than one year
and generally provide for additional rental amounts based on each tenant's share
of the cost of maintaining common areas and certain operating expenses including
insurance of the property and real estate taxes.
The following is a schedule of lease expirations of the Property by year:
Number of
Tenants Total Minimum
whose leases Square Annual Base
Expire Footage Rentals Percentage
------ ------- ------- ----------
Year
----
2002 1 240 $5,760 0.08%
2003 6 21,510 554,988 7.67%
2004 - - - 0.00%
2005 1 2,375 120,246 1.66%
2006 1 1,400 49,000 0.68%
2007 5 11,900 395,400 5.46%
2008 8 49,571 1,151,640 15.91%
2009 2 2,209 100,558 1.39%
2010 4 42,240 638,112 8.82%
2011 2 3,740 146,472 2.03%
Thereafter 5 182,137 4,074,259 56.30%
- ------- --------- ------
35 317,322 $7,236,435 100.00%
== ======= ========== =======
Building and Capital Improvements:
The estimated federal tax basis of the Property (including land) is
approximately $89,000,000. The property will be depreciated on a federal tax
basis over its estimated useful life (39 years) on a straight line basis.
Property Taxes:
The annual real estate taxes of the Property are $ 978,000 for the 2002 tax
year.
Property Management:
The Company manages the Property directly. The Company has also retained an
affiliate of one of the limited partners to assist in the management and leasing
of the Property. The Company will pay the affiliate a fee of $125,000 per year
for a period of five years.
3
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements
(b) Pro Forma Financial Information
(c) Exhibits
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 hereunto duly authorized.
URSTADT BIDDLE PROPERTIES INC.
(Registrant)
Date: June 7, 2002 /s/ Charles J. Urstadt
By:
Charles J. Urstadt
Chairman and Chief Executive Officer
4
URSTADT BIDDLE PROPERTIES INC.
TABLE OF CONTENTS
Item 7 Financial Statements, Pro Forma Financial Information Page
(a) Financial Statements
Independent Auditors' Report 6
Statement of Revenues and Certain Expenses of Ridgeway
Shopping Center for the Year Ended December 31, 2001 (Audited) and Six Months
Ended March 31, 2002 (Unaudited) 7
Notes to Statement of Revenues and Certain Expenses of Ridgeway
Shopping Center For the Year Ended December 31, 2001 (Audited) and Six Months
Ended March 31, 2002 (Unaudited) 8
(b) Pro Forma Financial Information (Unaudited)
--------------------------------
Pro Forma Consolidated Balance Sheet as of April 30, 2002 11
Pro Forma Consolidated Statement of Income
For the Six Months Ended April 30, 2002 12
Pro Forma Consolidated Statement of Income
For the Year Ended October 31, 2001 13
Notes and Management's Assumptions to Pro Forma Consolidated
Financial Statements 14
(c) Exhibits
2.1 Contribution Agreement dated March 25 2002, between the Company and
Stamford Ridgeway Associates LP and UB Stamford, LP.
23.1 Consent of Friedman Alpren & Green LLP, Independent Accountants.
5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Management of Urstadt Biddle Properties Inc.
We have audited the accompanying statement of revenues and certain expenses of
the property known as Ridgeway Shopping Center, Stamford, Connecticut (the
"Property"), as described in Note 1, for the year ended December 31, 2001. This
financial statement is the responsibility of the property owner's management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with Rule 3-14 of Securities and Exchange Commission
Regulation S-X, for inclusion in the Current Report on Form 8-K dated June 7,
2002 of Urstadt Biddle Properties Inc. and, as described in Note 1, is not
intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of the Property for the
year ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.
FRIEDMAN ALPREN & GREEN LLP
New York, New York
April 26, 2002
6
RIDGEWAY SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2001 (AUDITED)
AND SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED)
(in thousands)
Six Months
Year Ended Ended
December 31, March 31,
2001 2002
-----------------------------
(Audited) (Unaudited)
REVENUES:
Base rents $ 7,785 $ 3,871
Real estate tax escalations 816 434
Common area maintenance 1,094 538
Lease cancellation fee 650 -
Miscellaneous 42 15
------ -----
10,387 4,858
------ -----
CERTAIN EXPENSES:
Administrative 515 242
Operating 1,097 622
Maintenance 258 129
Real estate taxes 964 489
--- ---
2,834 1,482
----- -----
EXCESS OF REVENUES OVER CERTAIN EXPENSES $7,553 $3,376
====== ======
The accompanying notes are an integral part of this financial statement.
7
RIDGEWAY SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND
SIX MONTHS ENDED MARCH 31, 2002 (UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION:
The Property, known as Ridgeway Shopping Center (the "Property") is a retail
shopping center bordered by Summer Street, Bedford Street and Sixth Street in
Stamford, Connecticut and is owned by Stamford Ridgeway Associates Limited
Partnership (a Connecticut limited partnership). The Property has an aggregate
net rentable area of approximately 331,000 square feet, approximately 96% of
which is leased as of April 26, 2002. The Property also contains approximately
29,000 square feet of office space, which is currently being redeveloped and is
not available for renting.
The accompanying financial statement is presented in conformity with Rule 3-14
of Securities and Exchange Commission Regulation S-X. Accordingly, the financial
statement is not representative of the actual operations for the periods
presented, as certain expenses, which may not be comparable to the expenses
expected to be incurred in the future operations of the acquired property, have
been excluded. Expenses excluded consist of interest, depreciation and
amortization, asset management fees, leasing expenses, and certain other
expenses not directly related to the future operations of the Property.
The statement of revenues and certain expenses for the six months ended March
31, 2002 is unaudited. However, in the opinion of management, all adjustments
(consisting solely of normal recurring adjustments) necessary for the fair
presentation of this statement of revenues and certain expenses for the interim
period on the basis described above have been included. The results for such an
interim period are not necessarily indicative of the results for an entire year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.
Revenue Recognition
Rental income is recognized from leases with scheduled rent increases on a
straight-line basis over the lease term. Escalation rents based on payments for
real estate taxes and operating expenses are estimated and accrued. Percentage
rent is recognized when a specific tenant's sales breakpoint is achieved.
8
3. RELATED PARTY TRANSACTIONS:
Management services are provided to the Property by an affiliate of one of the
general partners of the Partnership. For the year ended December 31, 2001 and
the six months ended March 31, 2002, management fees of approximately $415,000
and $194,000 respectively, are included in administrative expenses in the
accompanying statement of revenues and certain expenses.
4. OPERATING LEASES:
Office and retail space in the Property is rented to tenants under various
operating leases. Approximate minimum future rentals required under these leases
at December 31, 2001 (including leases entered into from January 1, 2002 through
April 26, 2002) are as follows (in thousands):
Year Ending
December 31,
2002 $7,180
2003 7,194
2004 7,226
2005 7,220
2006 7,114
Thereafter 48,405
------
$84,339
======
9
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION
The following Pro Forma Consolidated Balance Sheet as of April 30, 2002 and the
Pro Forma Consolidated Statements of Income for the six months ended April 30,
2002 and for the year ended October 31, 2001 have been prepared to reflect the
acquisition transaction and the adjustments described in the accompanying notes.
The historical financial statements of the Ridgeway Shopping Center are for the
year ended December 31, 2001 and for the six months ended March 31, 2002. The
pro forma financial information is based on the historical financial statements
of Urstadt Biddle Properties Inc. and should be read in conjunction with the
notes and management's assumptions thereto. The Pro Forma Consolidated Balance
Sheet was prepared as if the acquisition transaction occurred on April 30, 2002.
The pro forma consolidated statements of income for the six months ended April
30, 2002 and for the year ended October 31, 2001 were prepared assuming the
transaction occurred on the first day of each period presented. The pro forma
financial information is unaudited and not necessarily indicative of the actual
financial position of the Company as of April 30, 2002 or what the actual
results would have been assuming the acquisition transaction had been
consummated at the beginning of the periods presented, nor does it purport to
represent the future financial position and results of operations for future
periods.
10
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF APRIL 30, 2002
(UNAUDITED)
(in thousands)
Company Pro Forma Company
Historical (a) Adjustments Pro Forma
Real Estate Investments:
Core properties - at cost, net of accumulated
depreciation $165,079 $89,950 (b) $255,029
Non-core properties - at cost, net of
accumulated depreciation 12,302 12,302
Mortgage notes receivable 3,479 3,479
------- ------ -------
180,860 89,950 270,810
Cash and cash equivalents 17,321 (12,466) (c) 4,855
Interest and rent receivable 4,464 4,464
Deferred charges, net of accumulated amortization 3,588 3,588
Prepaid expenses and other assets 5,070 (922) (e) 4,148
-------- ------- --------
$211,303 $76,562 $287,865
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Secured revolving credit line $ - $16,000 (b) $16,000
Mortgage notes payable 49,869 57,369 (b) 107,238
Accounts payable and accrued expenses 3,365 3,365
Deferred officers' compensation 236 236
Other liabilities 3,604 3,604
------ ------ -------
57,074 73,369 130,443
------ ------ -------
Minority Interests 4,127 3,193 (d) 7,320
Preferred Stock 14,341 14,341
Stockholders' Equity:
Common Stock 64 64
Class A Common Stock 104 104
Additional paid in capital 170,919 170,919
Cumulative distributions in excess of net income (29,137) (29,137)
Unamortized restricted stock compensation and
notes from officers (6,189) (6,189)
------- -------- -------
135,761 - 135,761
------- -------- -------
$211,303 $76,562 $287,865
======== ======= ========
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated balance sheet.
11
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands, except per share data)
For The Six Months Ended,
-------------------------------------------------------------
April 30, March 31, April 30,
2002 2002 2002
-------- -------- ---------
Ridgeway
Company Shopping Pro Forma Company
Historical (a) Center(b) Adjustments Pro Forma
Revenues:
Operating leases $19,434 $4,843 $127 (g) $24,404
Interest and other 551 15 (125) (e) 441
------ ----- ---- ------
19,985 4,858 2 24,845
------ ----- ---- ------
Operating Expenses:
Property expenses 5,796 1,482 (132) (f) 7,146
Interest 1,880 - 2,450 (c) 4,330
Depreciation and amortization 3,623 - 1,200 (d) 4,823
General and administrative expenses 1,510 - 1,510
Directors' fees and expenses 86 - 86
------ ----- ----- ------
12,895 1,482 3,518 17,895
------ ----- ----- ------
Operating Income 7,090 3,376 (3,516) 6,950
Minority Interest in Results of
Consolidated Joint Ventures (214) - (h) (214)
----- ----- ------ ------
Net Income 6,876 3,376 (3,516) 6,736
Preferred Stock Dividends (824) - - (824)
Excess on Repurchase of Preferred Stock 3,071 - - 3,071
----- ------ -------- ------
Net Income Applicable to Common and Class A
Common Stockholders $9,123 $3,376 ($3,516) $8,983
====== ====== ======== ======
Basic Earnings Per Share:
Common $0.53 $0.53
===== =====
Class A Common $0.59 $0.58
===== =====
Weighted Average Number of Shares Outstanding:
Common 6,013 6,013
===== =====
Class A Common 9,980 9,980
===== =====
Diluted Earnings Per Share:
Common $0.52 $0.51
===== =====
Class A Common $0.57 $0.56
===== =====
Weighted Average Number of Shares Outstanding:
Common and Common Equivalent 6,371 6,371
===== =====
Class A Common and Class A Common Equivalent 10,524 10,524
====== ======
The accompanying notes and management's assumptions are an integral part of
this pro forma consolidated statement
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URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED OCTOBER 31, 2001
(UNAUDITED)
(in thousands, except per share data)
Ridgeway
Company Shopping Pro Forma Company
Historical(a) Center(b) Adjustments Pro Forma
------------- --------- ----------- ---------
Revenues:
Operating leases $34,209 $9,695 $237 (g) $44,141
Lease termination income 1,137 650 1,787
Interest and other 747 42 789
------ ------ --- ------
36,093 10,387 237 46,717
------ ------ --- ------
Operating Expenses:
Property expenses 11,502 2,834 (290) (f) 14,046
Interest 4,456 - 6,377 (c) 10,833
Depreciation and amortization 7,568 - 2,400 (d) 9,968
General and administrative expenses 2,484 - 2,484
Directors' fees and expenses 144 - 144
------ ----- ----- ------
26,154 2,834 8,487 37,475
------ ----- ----- ------
Operating Income 9,939 7,553 (8,250) 9,242
Equity in Earning of Unconsolidated Joint Venture 3,864 - - 3,864
Minority Interests in Results of Consolidated Joint Ventures (432) - - (h) (432)
Gains on Sales of Real Estate Investments 316 - - 316
------ ----- ------ ------
Net Income 13,687 7,553 (8,250) 12,990
Preferred Stock Dividends (3,147) - - (3,147)
------- ------- -------- ------
Net Income Applicable to Common
and Class A Common Stockholders $10,540 $7,553 $(8,250) $9,843
======= ====== ======== ======
Basic Earnings per Share:
Common $0.91 $0.85
===== =====
Class A Common $1.01 $0.94
===== =====
Weighted Average Number of Shares Outstanding
Common 5,881 5,881
===== =====
Class A Common 5,182 5,182
===== =====
Diluted Earnings Per Share:
Common $0.88 $0.82
===== =====
Class A Common $0.97 $0.91
===== =====
Weighted Average Number of Shares Outstanding:
Common and Common Equivalent 6,038 6,038
===== =====
Class A Common and Class A Common Equivalent 5,606 5,606
===== =====
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated statement.
13
URSTADT BIDDLE PROPERTIES INC.
NOTES AND MANAGEMENT ASSUMPTIONS
TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET:
(a) Derived from the Company's unaudited financial statements at April
30, 2002.
(b) Reflects the pro forma acquisition of the Property for $89,950,000
including $670,000 of transaction costs, secured revolving credit line
borrowings of $16,000,000 and the pro forma assumption of a $57,369,000
mortgage note payable upon the acquisition of the Property.
(c) Reflects pro forma use of cash and cash equivalents of the
$12,466,000 net cash investment in the Property.
(d) Reflects the pro forma minority interest of the limited partner
in the Property.
(e) Reflects pro forma application of cash deposits of $1,504,000 held in
escrow by Seller of Property net of a cash hold back of $582,000 for
tenant work by mortgage lender.
ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME:
(a) Derived from the Company's unaudited financial statements for the six
months ended April 30, 2002 and the audited financial statements the year
ended October 31, 2001.
(b) Reflects revenues and operating expenses as reported by the Property
for the six months ended March 31, 2002 and for the year ended
December 31, 2001.
(c) Reflects pro forma interest on credit line borrowings of $16,000,000
and $28,466,000 as if the borrowings were made on November 1, 2001 and
2000, respectively. Also reflects pro forma interest on the mortgage loan
of $57,369,000 as if it was outstanding during the periods. Pro forma
adjustments reflect that during the year ended October 31, 2001, the
Company would have had to borrow the additional $12,466,000 since it did
not have sufficient cash and cash equivalents on hand. Interest on the
credit line borrowing is based on the average LIBOR rates for the
respective periods.
Pro forma interest was computed approximately as follows:
Six months ended Year ended
April 30, 2002 October 31, 2001
-------------- ----------------
$57,369,000 mortgage loan at 7.54% $2,162,000 $4,325,000
$28,466,000 credit line borrowings at a weighted average rate of 7.21% - 2,052,000
$16,000,000 credit line borrowings at 3.58% 288,000 -
---------- ----------
$2,450,000 $6,377,000
========== ==========
The effect of a 1/8% variance in the credit line borrowing rates would
increase(decrease) net income by $10,000 based on borrowings of
$16,000,000 at a variable rate of interest for the six months ended
April 30, 2002 and $35,000 based on borrowings of $28,466,000 for the
year ended October 31, 2001.
14
(d) Reflects depreciation expense of the Property based on a 30-year
estimated useful life for the Property's building and improvements using
a cost basis of $72,000,000 (the remaining purchase price is assumed to
be allocated to land) as if the Property had been owned for the entire
period.
(e) Reflects pro forma adjustments to interest income as if the cash
investment of $12,466,000 had been made at the beginning of the period,
using an interest rate of 2.03% which approximated the Company's actual
yield for the six month period ended April 30, 2002.
(f) Reflects pro forma adjustment to property expenses to record the
payment of consulting fees of $125,000 and $62,000 for the year ended
October 31, 2001 and the six months ended April 30, 2002, respectively,
to an affiliate of the partnership and to reflect a reduction in
management fees of $415,000 and $194,000 for the same periods from
a change in the property manager.
(g) Reflects pro forma adjustment to record operating rents on a
straight-line basis as if the Property was acquired at the beginning
of the period.
(h) The limited partner is entitled to a preference return of 9% per
annum, if any, from available cash remaining after the payment of a
preferred return of 9% per annum to the Company. For the year ended
October 31, 2001 and six months ended April 30, 2002, pro forma earnings
were less than the preference due to the Company. Accordingly, no
amounts have been reflected as due the minority interest in either
period.
15