SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1
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) December 23, 2002
URSTADT BIDDLE PROPERTIES INC.
(Exact name registrant as specified in charter)
Maryland 1-12803 04-2458042
(State or jurisdiction (Commission file (IRS Employer
or 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 December 23, 2002, Urstadt Biddle Properties Inc. (the "Company") acquired
the Westchester Pavilion Shopping Center (the "Property") located in White
Plains, New York. The Property was purchased from the State of Wisconsin
Investment Board ("Seller"). The purchase price was $39,900,000 excluding
closing costs, fees and other expenses of approximately $130,000. The purchase
price was funded with cash.
The Property was acquired pursuant to a Purchase and Sale Agreement by and
between the State of Wisconsin Investment Board 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 Westchester County, New
York. The Property was built in the 1950's and expanded and converted to a
3-story vertical shopping center in the mid-1990's. The Property has an
aggregate net rentable area of approximately 173,569 square feet, and is 99%
leased as of December 23, 2002. The Property is located in downtown White
Plains, New York in one of the most desirable retail locations in Westchester
County, New York. Westchester County, New York is one of the most affluent,
densely populated areas in the United States.
The Property is adjacent to The Westchester, an 828,000 square foot regional
mall anchored by Neiman Marcus and Nordstrom Department Stores. The Westchester
is not considered direct competition to the Westchester Pavilion because the
Westchester Pavilion has relatively lower rents and caters to more value
oriented tenants.
The Property is leased to national credit tenants and has a predictable cash
flow generated by leading national retailers. 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.
Tenants:
The Property's largest tenants are: Toys R' Us, a national toy store chain,
occupying 46,850 square feet of leasable area of the Property (27% of the
Property's gross leasable area (GLA)), The Sports Authority who occupies 43,000
square feet of leaseable area (25% of the Property's GLA), Borders Books who
occupies 35,000 square feet of leasable area (20% of the Property's GLA) and
Office Max who occupies 25,750 square feet of leasable area (15% of the
Property's GLA). No other tenant leases more than 10% of the Property's GLA.
2
The following is a schedule of lease expirations of the Property by year:
Number of Total Sqaure
Tenants Footage Minimum % of
Whose Leases Expiring Each Annual Base Annual Base
Expire Year Rentals(1) Rentals
Year
2002 - - $ - 0.00%
2003 - - - 0.00%
2004 1 5,553 152,708 4.16%
2005 2 68,750 1,254,506 34.18%
2006 1 7,720 110,000 3.00%
2007 - - - 0.00%
2008 - - - 0.00%
2009 2 39,713 930,378 25.35%
2010 0 - - 0.00%
2011 0 - - 0.00%
Thereafter 2 50,345 1,222,260 33.31%
8 172,081 $3,669,852 100.00%
(1) Based on 2002 annualized cash rents.
Building and Capital Improvements:
The estimated federal tax basis of the Property (including land) is
approximately $39,900,000. The property will be depreciated on a federal tax
basis over its estimated useful life (39 years) on a straight line basis. The
Company anticipates that it will incur capital expenditures of approximately
$300,000 over the next 12 to 18 months in connection with improvements to the
Property.
Property Taxes:
The annual real estate taxes of the Property are $ 1,183,000 for the 2002 tax
year.
Property Management:
The Company will manage the Property directly.
After reasonable inquiry, the Company is not aware of any other material factors
relating to the Property that would cause the reported financial information not
to be necessarily indicative of future operating results.
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: January 28 , 2003 /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 Accountants Report 6
Statements of Revenues and Certain Operating Expenses of Westchester Pavilion
for the Year Ended December 31, 2001 (Audited) and Nine Months
Ended September 30, 2002 (Unaudited) 7
Notes to Statements of Revenues and Certain Operating Expenses of Westchester Pavilion
for the Year Ended December 31, 2001 (Audited) and Nine Months
Ended September 30, 2002 (Unaudited) 8
(b) Pro Forma Financial Information (Unaudited)
Pro Forma Consolidated Balance Sheet as of July 31, 2002 11
Pro Forma Consolidated Statement of Income
for the Nine Months Ended July 31, 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
10.1 Purchase and Sale Agrement between the Registrant and the State of
Wisconsin Investment Board (previously filed on Form 8-K dated
December 24, 2002)
23.1 Consent of Independent Accountants
5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Management of Urstadt Biddle Properties Inc.:
We have audited the accompanying Statement of Revenues and Certain Operating
Expenses of Westchester Pavilion, as described in Note 1, for the year ended
December 31, 2001. This statement is the responsibility of the management of
Urstadt Biddle Properties Inc. Our responsibility is to express an opinion on
this 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 statement is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the statement.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenues and Certain Operating Expenses of
Westchester Pavilion was prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission as described in Note 1
and is not intended to be a complete presentation of the revenues and expenses
of the property acquired.
In our opinion, the statement referred to above presents fairly, in all material
respects, the Revenues and Certain Operating Expenses of Westchester Pavilion,
as described in Note 1, for the year ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.
PricewaterhouseCoopers LLP
New York, New York
January 27, 2003
6
WESTCHESTER PAVILION
STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2001
AND NINE MONTHS ENDED SEPTEMBER 30, 2002 (UNAUDITED)
(in thousands)
Nine Months
Year Ended Ended
December 31, September 30,
2001 2002
------------ --------------
(Unaudited)
REVENUES:
Base rents $ 3,715 $ 2,786
Escalations 2,791 2,166
Percentage rent 78 40
Miscellaneous 126 81
----- -----
6,710 5,073
CERTAIN OPERATING EXPENSES:
Operating 1,507 1,119
Real estate taxes 1,121 878
Maintenance 425 238
General and administrative 235 241
----- -----
3,288 2,476
----- -----
EXCESS OF REVENUES OVER CERTAIN OPERATING EXPENSES $ 3,422 $ 2,597
===== =====
The accompanying notes are an integral part of this financial statement.
7
WESTCHESTER PAVILION
NOTES TO STATEMENTS OF REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2001 (AUDITED) AND
NINE MONTHS ENDED SEPTEMBER 30, 2002 (UNAUDITED)
1. BUSINESS AND ORGANIZATION:
The property known as Westchester Pavilion ("the Property") was owned by the
State of Wisconsin Investment Fixed Retirement Trust Fund ("SWIB"). Clarion
Partners ("Clarion") managed the Property under an investment advisory
agreement. The Property comprises a shopping center and associated land located
in White Plains, New York and has an aggregate gross leasable area of
approximately 173,569 square feet. On December 23, 2002, the property was
acquired by Urstadt Biddle Properties Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
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 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 operating expenses for the nine months
ended September 30, 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 operating
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.
Real Estate
Significant improvements to real estate which enhance the value are capitalized
as additions to the Property's cost basis in the period in which the
expenditures are incurred. Repairs and maintenance costs are expensed as
incurred. Tenant allowances and improvements are capitalized as additions to the
Property's cost basis.
Rental Operations
The Property earns rental income from tenants under leasing arrangements which
generally provide for minimum rents, escalations and charges to tenants for
their pro rata shares of real estate taxes and operating expenses. All leases
have been accounted for as operating leases. Base rental income is recorded on a
straight-line basis over the terms of the related agreements. 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.
Income Taxes
The Property is not subject to income taxes; therefore no income taxes have been
provided for in the accompanying financial statements.
Estimates
The preparation of 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 and disclosures
during the reporting period. Actual results could differ from those estimates.
8
3. MANAGEMENT AGREEMENT :
Effective April 13, 1995, SWIB entered into an agreement with Clarion Realty
Services, LLC ("Realty Services"), an affiliate of Clarion, to provide
management services to the Property on a year-to-year basis until December 31,
1997 and on a month-to-month basis thereafter. For its services, Realty Services
receives a fixed annual management fee subject to annual increases as defined in
the management agreement. The management agreement also provides for a fee
calculated at varying fixed percentages of base rent collections and/or gross
construction expenditures, as defined, for new leases and/or supervision of
construction projects. SWIB has the right to terminate the agreement with
written notice, under certain conditions, as defined in the management
agreement. For the year ended December 31, 2001 and for the nine months ended
September 30, 2002, fees incurred under this agreement which are included in
Operating expenses in the accompanying statements of revenue and certain
operating expenses were approximately $165,000 and $124,000, respectively.
4. LEASES:
SWIB, as lessor, leases the Property under various noncancelable operating
leases with unexpired terms ranging from 3 to 14 years. Minimum future rentals
on noncancelable leases which extend for more than one year at December 31, 2001
are as follows:
Year Ending
December 31,
2002 $3,696,000
2003 3,702,000
2004 3,732,000
2005 2,698,000
2006 2,586,000
Thereafter 14,363,000
$30,777,000
Included in base rents for the year ended December 31, 2001 are approximately
$3,254,000 from four major tenants. These tenants accounted for approximately
88% of the total base rental income.
Minimum rentals above do not include recoveries of operating expenses, real
estate taxes, or percentage rents. Such amounts are reflected in the statement
of revenues and certain operating expenses as escalations and percentage rent
revenues.
9
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION
The following pro forma information reflects the acquisition of the Ridgeway
Shopping Center, on June 7, 2002, the acquisition of Westchester Pavilion on
December 23, 2002 and the issuance of 8,050,000 shares of Class A Common stock
by Urstadt Biddle Properties Inc. (the "Company").
The Pro Forma Consolidated Balance Sheet as of July 31, 2002 and the Pro Forma
Consolidated Statements of Income for the nine months ended July 31, 2002 and
for the year ended October 31, 2001 have been prepared to reflect the
acquisition transactions, the Class A Common Stock offering and the adjustments
described in the accompanying notes. The historical financial statements of
Ridgeway Shopping Center are for the year ended December 31, 2001 and the period
November 1, 2001 to June 6, 2002 and the historical financial statements of the
Westchester Pavilion are for the year ended December 31, 2001 and for the nine
months ended September 30, 2002. The pro forma financial information is based on
the historical financial statements of the Company 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 of the Westchester
Pavilion transaction and the exercise of the underwriters over-allotment of
1,050,000 shares of Class A Common Stock occurred on July 31, 2002. The pro
forma consolidated statements of income for the nine months ended July 31, 2002
and for the year ended October 31, 2001 were prepared assuming the transactions
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 July 31, 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 JULY 31, 2002
(UNAUDITED)
(in thousands)
Company Pro Forma Company
Historical (a) Adjustments Pro Forma
Real Estate Investments:
Core properties - at cost, net of accumulated depreciation $253,818 $40,030 (b) $293,848
Non-core properties- at cost, net of accumulated depreciation 12,031 12,031
Mortgage notes receivable 3,465 3,465
------- ------ -------
269,314 40,030 309,344
Cash and cash equivalents 44,593 (29,292) (c) 15,301
Short-term investments 15,014 15,014
Interest and rent receivable 5,105 5,105
Deferred charges, net of accumulated amortization 3,373 3,373
Prepaid expenses and other assets 4,574 4,574
------- ------ -------
Total Assets $341,973 $10,738 $352,711
======= ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $106,868 $106,868
Accounts payable and accrued expenses 2,243 2,243
Deferred officers' compensation 284 284
Other liabilities 4,035 4,035
------- ------- -------
Total Liabilities 113,430 - 113,430
======= ======= =======
Minority Interests 7,320 7,320
----- ------
Preferred Stock 14,341 14,341
------ ------
Stockholders' Equity:
Common Stock 66 66
Class A Common Stock 174 $ 10 (d) 184
Additional paid in capital 243,396 10,728 (d) 254,124
Cumulative distributions in excess of net income (29,487) (29,487)
Unamortized restricted stock compensation and
notes from officers (7,267) (7,267)
------- ------ -------
Total Stockholders' Equity 206,882 10,738 217,620
------- ------ -------
Total Liabilities & Stockholders' Equity $341,973 $10,738 $352,711
------- ------ -------
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
FOR THE NINE MONTHS ENDED JULY 31 2002
(UNAUDITED)
(in thousands, except per share data)
Ridgeway
Company Shopping Westchester Pro Forma Company
Historical (a) Center(b) Pavilion (c) Adjustments Pro Forma
Revenues:
Operating leases $29,592 $5,668 $4,992 $361 (h) $40,613
Lease termination income 765 - - 765
Interest and other 851 - 81 - 932
------ ----- ----- --- ------
31,208 5,668 5,073 361 42,310
------ ----- ----- --- ------
Operating Expenses:
Property expenses 9,150 1,729 2,235 (245) (g) 12,869
Interest 3,530 - - 2,523 (e) 6,053
Depreciation and amortization 5,784 - - 2,014 (f) 7,798
General and administrative expenses 2,136 - 241 - 2,377
Directors' fees and expenses 133 - - - 133
------ ----- ----- ----- ------
20,733 1,729 2,476 4,292 29,230
------ ----- ----- ----- ------
Operating Income 10,475 3,939 2,597 (3,931) 13,080
Minority Interests in Results of
Consolidated Joint Ventures (304) - - - (i) (304)
---- ----- ----- ------ ------
Net Income 10,171 3,939 2,597 (3,931) 12,776
Preferred Stock Dividends (1,161) - - - (1,161)
Excess of Carrying Value over Cost to
Repurchase Preferred Shares 3,071 - - - 3,071
------- ------ ----- ------- ------
Net Income Applicable to Common
and Class A Common Stockholders $12,081 $3,939 $2,597 $(3,931) $14,686
======= ===== ===== ====== ======
Basic Earnings Per Share:
Common $0.67 $0.56
===== =====
Class A Common $0.75 $0.62
===== =====
Weighted Average Number of Shares
Outstanding:
Common 6,039 6,039
===== =====
Class A Common 10,765 7,306 (d) 18,071
====== ===== ======
Diluted Earnings Per Share:
Common $0.65 $0.55
===== =====
Class A Common $0.72 $0.61
===== =====
Weighted Average Number of Shares
Outstanding:
Common and Common Equivalent 6,397 6,397
Class A Common and ===== =====
Class A Common Equivalent 11,281 7,306 (d) 18,587
====== ===== ======
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated statement
12
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 Westchester Pro Forma Company
Historical(a) Center(b) Pavilion(c) Adjustments Pro Forma
Revenues:
Operating leases $34,209 $9,695 $6,584 $437 (h) $50,925
Lease termination income 1,137 650 - - 1,787
Interest and other 747 42 126 - 915
------ ------ ----- --- ------
36,093 10,387 6,710 437 $53,627
------ ------ ----- --- ------
Operating Expenses:
Property expenses 11,502 2,834 3,053 (455) (g) 16,934
Interest 4,456 - - 4,325 (e) 8,781
Depreciation and amortization 7,568 - - 3,218 (f) 10,786
General and administrative expenses 2,484 - 235 - 2,719
Directors' fees and expenses 144 - - - 144
------ ----- ----- ----- ------
26,154 2,834 3,288 7,088 39,364
------ ----- ----- ----- ------
Operating Income 9,939 7,553 3,422 (6,651) 14,263
Equity in Earnings of Unconsolidated
Joint Venture 3,864 - - - 3,864
Minority Interests in Results of
Consolidated Joint Ventures (432) - - - (i) (432)
Gains on Sales of Real Estate Investments 316 - - - 316
------ ----- ----- ------- ------
Net Income 13,687 7,553 3,422 (6,651) 18,011
Preferred Stock Dividends (3,147) - - - (3,147)
----- ----- ----- ------ ------
Net Income Applicable to Common and Class A
Common Stockholders $10,540 $7,553 $3,422 $(6,651) $14,864
======= ====== ===== ====== ======
Basic Earnings per Share:
Common $0.91 $0.72
==== ====
Class A Common $1.01 $0.80
Weighted Average Number of ==== ====
Shares Outstanding
Common 5,881 5,881
===== =====
Class A Common 5,182 8,050 (d) 13,232
Diluted Earnings Per Share: ===== ===== ======
Common $0.88 $0.71
===== ====
Class A Common $0.97 $0.79
Weighted Average Number of ===== ====
Shares Outstanding:
Common and Common
Equivalent 6,038 6,038
Class A Common and Class A ===== =====
Common Equivalent 5,606 8,050 (d) 13,656
===== ===== ======
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated
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 July 31, 2002
(b) Reflects the pro forma acquisition of the Westchester Pavilion for
$40,030,000 including estimated transaction costs of approximately $130,000.
(c) Reflects pro forma use of cash and cash equivalents of the $40,030,000 cash
investment in the Property and receipt of net proceeds of $10,738,000 from sale
of Class A Common Shares of the Company.
(d) Reflects pro forma adjustment to reflect the issuance of 1,050,000 shares of
Class A Common Stock of the Company for net proceeds of $10,738,000 to cover
underwriters over-allotments as if the stock offering had been completed on July
31, 2002.
ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME:
(a) Derived from the Company's unaudited financial statements for the nine
months ended July 31, 2002 and the audited financial statements for the year
ended October 31, 2001.
(b) Reflects revenues and operating expenses as reported by the Ridgeway
Shopping Center for the period November 1, 2001 to June 6, 2002 and the year
ended December 31, 2001.
(c) Reflects revenue and operating expenses as reported by the Westchester
Pavilion for the nine months ended September 30, 2002 and for the year ended
December 31, 2001.
(d) Reflects pro forma adjustment to reflect the issuance of a total of
8,050,000 shares of Class A Common Stock of the Company in June 2002 (7,000,000
shares) and August 2002 (1,050,000 shares) as if the stock offering had been
completed on November 1, 2000.
Ridgeway Shopping Center
(e) Reflects pro forma interest expense of $4,325,000 and $2,523,000 on a
$57,369,000 mortgage loan for the the year ended October 31, 2001 and the period
November 1, 2001 to June 6, 2002, respectively. Interest at a rate of 7.54% per
annum.
(f) Reflects depreciation expense of $2,400,000 and $1,400,000 for the year
ended October 31, 2001 and for the period November 1, 2001 to June 6, 2002,
respectively, for the Ridgeway Shopping Center 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.
(g) Reflects pro forma adjustment to property expenses to record the payment of
consulting fees of $125,000 and $73,000 for the year ended October 31, 2001 and
the nine month period ended July 31, 2002, respectively, to an affiliate of the
partnership and to reflect a reduction in management fees of $415,000 and
$194,000 for the year ended December 31, 2001 and for the period November 1,
2001 through June 6, 2002, respectively, from the change in the property
manager.
(h) Reflects pro forma adjustment of $237,000 and $205,000 for the year ended
October 31, 2001 and the nine month period ended July 31, 2002 to record
operating rents on a straight-line basis
14
(i) The limited partner is entitled to a preference return of 9% per annum, 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 nine months ended
July 31, 2002, pro forma earnings were less than the preference due the Company.
Accordingly, no amounts have been reflected as due to the minority interest in
either period.
Westchester Pavilion
(f) Reflects depreciation expense of $818,000 and $614,000 for the year ended
October 31, 2001 and the nine month period ended July 31, 2002, respectively,
for the Westchester Pavilion based on a 39-year estimated useful life for the
property's building and improvements using a cost basis of $31,920,000 (the
remaining purchase price is assumed to be allocated to land) as if the property
had been owned for the entire period.
(g) Reflects a reduction in management fees of $165,000 and $124,000 for the
year ended December 31, 2001 and the nine month period ended September 30, 2002
from the change in the property manager.
(h) Reflects pro forma adjustments of $200,000 and $156,000 for the year ended
October 31, 2001 and the nine month period ended July 31, 2002 to record
operating rents on a straight-line basis.
15