UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) January 30, 1998
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Berkshire Realty Company, Inc.
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Delaware 1-10660 04-3086485
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(State or other jurisdiction of (Commission (IRS employer
incorporation or organization) file number) identification no.)
470 Atlantic Avenue, Boston, Massachusetts 02210
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(Address of principal executive offices) (Zip Code)
(617) 423-2233
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(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
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Disposition of Property
On December 2, 1997, Berkshire Realty Enterprises Limited Partnership
(the "Agent") acting as agent for Berkshire Realty Company, Inc. (the
"Company") entered into an Agreement of Sale to sell two of the
Company's properties, College Plaza, a shopping center containing
83,962 leasable square feet located in Fort Myers, Florida, and Spring
Valley Marketplace, a shopping center containing 320,684 leasable
square feet located in Spring Valley, New York, to Kejack, Inc. and
its permitted assigns, which are unaffiliated third parties. Spring
Valley Marketplace was owned in joint venture with Krupp Cash Plus V
Limited Partnership. The properties were sold as part of a package
which included twelve other properties owned by affiliates of the
Agent and the General Partner of Krupp Cash Plus V Limited
Partnership. The total selling price of the fourteen properties was
$138,000,000, of which the Company received $20,828,322, less its
share of the closing costs. The terms of the sale were determined by
arms length negotiations between the agent and the buyer. The
transaction was consummated on January 30, 1998.
2
Item 7. Financial Statements and Exhibits
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(a) Financial Statements of Business Acquired Response:
Not Applicable
(b) Pro Forma Financial Information
On January 30, 1998, Berkshire Realty Enterprises Limited
Partnership, acting as agent for Berkshire Realty Company, Inc.,
consummated the sale of two of the Company's properties, College
Plaza and Spring Valley Marketplace.
The Company has presented in this Form 8-K/A, a Pro Forma Balance
Sheet at September 30, 1997 and Pro Forma Statements of Operations
for the nine months ended September 30, 1997 and for the year ended
December 31, 1996. See Note 1 to the Pro Forma Financial Statements
for further description of this matter.
(c) Exhibits
1. Agreement of Sale dated December 2, 1997 between Berkshire
Realty Enterprise Limited Partnership, agent for Berkshire
Realty Company, Inc., and Kejack, Inc. and its permitted
assigns.*
2. First Amendment to Agreement of Sale dated December 12, 1997
between Berkshire Realty Enterprise Limited Partnership, agent
for Berkshire Realty Company, Inc., and Kejack, Inc. and its
permitted assigns.*
3. Second Amendment to Agreement of Sale dated December 14, 1997
between Berkshire Realty Enterprise Limited Partnership, agent
for Berkshire Realty Company, Inc., and Kejack, Inc. and its
permitted assigns.*
4. Side letter dated December 17, 1997 from William S. Gee on
behalf of Kejack, Inc. and its permitted assigns to Eli
Rubenstein, Esq. on behalf of Berkshire Realty Enterprise
Limited Partnership, agent for Berkshire Realty Company, Inc.*
5. Side letter dated January 6, 1998 from William S. Gee on behalf
of Kejack, Inc. and its permitted assigns to Eli Rubenstein,
Esq. on behalf of Berkshire Realty Enterprise Limited
Partnership, agent for Berkshire Realty Company, Inc.*
* Incorporated by reference.
3
BERKSHIRE REALTY COMPANY. INC.
PRO FORMA BALANCE SHEET
September 30, 1997
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(unaudited)
ASSETS
Actual at September Pro Forma Pro Forma
30, 1997 Adjustments September 30, 1997
(Note 1) (Note 1) (Note 1)
---------------------- --------------------- -----------------------
Real Estate Assets
Multifamily Apartments Complexes, net of $538,936,747 $538,936,747
depreciation
Retail Centers, net of depreciation 0 0
Investment in Unconsolidated Joint 20,512,712 (20,122,206) 390,506
Ventures
Mortgage Loans and Other Loans Receivable 2,309,683 2,309,683
Land and Construction in Process 5,732,119 5,732,119
Land Held for Future Development 6,154,965 6,154,965
Property Held for Sale, Net of Valuation
Reserve 16,027,837 (5,345,851) 10,681,986
---------------------- --------------------- -----------------------
Total Real Estate Assets 589,674,063 (25,468,057) 564,206,006
Cash and Cash Equivalents 9,059,234 (42,543) 9,016,691
Mortgages Backed Securities, Net 7,995,983 7,995,983
Escrows 11,910,915 11,910,915
Deferred Charges and Other Assets 11,596,264 (83,598) 11,512,666
Intangible Assets, Net of Amortization
25,739,272 25,739,272
---------------------- --------------------- -----------------------
Total Assets $655,975,731 $(25,594,198) $630,381,533
============ ============= ============
LIABILITIES
Credit Agreements $118,410,000 $118,410,000
Mortgage Notes Payable 179,627,929 179,627,929
Repurchase Agreement 8,000,000 8,000,000
Tenant Security Deposits and Prepaid 3,577,189 (35,077) 3,542,112
Rents
Accrued Real Estate Tax, Other
Liabilities and Accounts Payable 14,081,953 (71,417) 14,010,536
---------------------- --------------------- -----------------------
Total Liabilities 323,697,071 (106,494) 323,590,577
=========== ========= ===========
Minority Interest in Operating 57,898,385 (170,459) 57,727,926
Partnership
SHAREHOLDERS' EQUITY
Series 1997 A Convertible Preferred 27,370 27,370
Stock ("Preferred Shares") $.01 Par
Value 60,000,000 Shares Authorized
2,737,000 Issued
Common Stock ("Shares"), $.01 Par Value; 263,203 263,203
140,000 Shares Authorized and
26,320,336 and 25,899,866 Shares Issued
Add Paid In Capital 292,977,204 (25,317,245) 267,659,959
Accumulated Deficit (16,179,428) (16,179,428)
Loan Receivable - Officer (964,999) (964,999)
Less Common Stock Held in Treasury at (1,743,075) (1,743,075)
Cost (506,497 Shares)
---------------------- --------------------- -----------------------
Total Shareholders' Equity 274,380,275 (25,317,245) 249,063,030
---------------------- --------------------- -----------------------
Total Shareholders'Equity and Liabilities $655,975,731 $(25,594,198) $630,381,533
============ ============= ============
4
BERKSHIRE REALTY COMPANY, INC.
PRO FORMA STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
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(unaudited)
As Reported for the Pro Forma for the Nine
Nine Months Ended Pro Forma Months Ended
September 30, 1997 Adjustments September 30, 1997
(Note 1) (Note 1) (Note 1)
------------------------ ------------------- -------------------------
REVENUE:
Rental $76,493,968 $(780,366) $75,713,602
Management Fee and Reimbursements 2,208,725 2,208,725
Interest Income from Mortgage Loans 252,579 252,579
Interest Income from MBS 592,910 592,910
Other Interest Income 955,918 955,918
------------------------ ------------------- -------------------------
Total Revenue 80,504,100 (780,366) 79,723,734
EXPENSES:
Property Operating 22,164,512 (56,833) 22,107,679
Repairs and Maintenance 5,531,085 (34,218) 5,496,867
General & Administrative 3,727,783 (18,459) 3,709,324
Real Estate Taxes 7,163,713 (123,655) 7,040,058
Property Management Fees Paid to An 866,771 (44,819) 821,952
Affiliate
Provisions for Losses on Real Estate 1,850,000 1,850,000
Investments
Cost Associates with the Advisor 1,200,000 1,200,000
Transaction
Interest 17,461,212 17,461,212
Depreciation & Amortization 28,864,019 28,864,019
------------------------ ------------------- -------------------------
Total Expenses 88,829,095 (277,984) 88,551,111
Loss from Operations (8,324,995) (502,382) (8,827,377)
Minority Interest in Operating Partnership 1,488,214 90,780 1,578,994
Joint Venture Net Income (Loss), Net of (308,886) (394,085) (702,971)
Minority Interest
------------------------ ------------------- -------------------------
Loss Before Gains on Sales and (7,145,667) (805,687) (7,951,354)
Extraordinary Item
Gain on Sale of properties Net of 5,364,707 5,364,707
Minority Interest
------------------------ ------------------- -------------------------
Loss Before Extraordinary Item (1,780,960) (805,687) (2,586,647)
Extraordinary Item, Net of Minority (90,191) (90,191)
Interest
------------------------ ------------------- -------------------------
Net Loss (1,871,151) (805,687) (2,676,838)
Income Allocated to Preferred Shareholders (85,531) (85,531)
------------------------ ------------------- -------------------------
Net Loss $(1,956,682) $(805,687) $(2,762,369)
============ ========== ============
5
BERKSHIRE REALTY COMPANY, INC.
PRO FORMA STATEMENT OF OPERATIONS
For the Twelve Months Ended December 31, 1996
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(unaudited)
As Reported for the Pro Forma for the Year
Year Ended Pro Forma Ended
December 31, 1996 Adjustments December 31, 1996
(Note 1) (Note 1) (Note 1)
------------------------- --------------------- --------------------------
REVENUE:
Rental $89,450,647 $(1,019,808) $88,430,839
Interest from Mortgage Loans 1,647,356 1,647,356
Interest from income MBS 942,191 942,191
Other Interest Income 961,472 961,472
------------------------- --------------------- --------------------------
Total Revenue 93,001,666 (1,019,808) 91,981,858
EXPENSES:
Property Operating 22,727,069 (73,541) 22,653,528
Repairs and Maintenance 6,647,344 (47,544) 6,599,800
General And Administrative 4,253,641 (22,991) 4,230,650
Real Estate Taxes 8,653,898 (149,517) 8,504,381
Property Management Fees Paid to an 4,324,843 (60,462) 4,264,381
Affiliate
Provisions for Loss on Real Estate 7,500,000 7,500,000
Investments
Interest 20,500,533 20,500,533
Depreciation & Amortization 30,171,600 (1,660,394) 28,511,206
Non-recurring Charges 441,783 441,783
Asset management fees to an affiliate
392,636 392,636
------------------------- --------------------- --------------------------
Total Expenses 105,613,347 (2,014,449) 103,598,898
Net Income (loss) from Operations (12,611,681) 994,641 (11,617,040)
Minority Interest 1,136,586 (89,816) 1,046,770
Joint Venture Net Income (Loss), Net (2,736,912) (831,906) (3,568,818)
of Minority Interest
------------------------- --------------------- --------------------------
Income (Loss) before Gains on Sales (14,212,007) 72,919 (14,139,088)
and Extraordinary Items
Gain on Sale of Properties Net of 53,002 53,002
Minority Interest
------------------------- --------------------- --------------------------
Income (Loss) before Gains on Sales (14,159,005) 72,919 (14,086,086)
and Extraordinary Items
Extraordinary Items, Net of Minority (149,272) (149,272)
Interest
------------------------- --------------------- --------------------------
Net Loss $(14,308,277) $72,919 $(14,235,358)
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6
BERKSHIRE REALTY COMPANY, INC.
NOTE TO PRO FORMA FINANCIAL STATEMENTS
(1) Basis of Presentation
The Pro Forma Balance Sheet at September 30, 1997 is based on the
historical Balance Sheet of the Company as reported on Form 10-Q for the
quarter ended September 30, 1997. The Pro Forma adjustment represents an
adjustment to the Company's investment in Spring Valley Joint Venture (the
"Joint Venture") and College Plaza to show the effect of the sale. The Pro
Forma Balance Sheet at September 30, 1997 reflects the balance sheet as if
the sale had occurred prior to September 30, 1997.
The Pro Forma Statement of Operations for the nine months ended September
30, 1997 is based on the historical Statement of Operations of the Company
as reported on Form 10-Q for the nine months ended September 30, 1997. The
Pro Forma Statement of Operations for the year ended December 31, 1996 is
based on the historical Statement of Operations for the Company as
presented in the annual report on Form 10-K for the year ended December 31,
1996. The Pro Forma adjustments represent the Company's share of Spring
Valley's and College Plaza's net income (loss) for the respective periods
presented. The Pro Forma Statements of Operations for the nine months ended
September 30, 1997 and for the year ended December 31, 1996 reflect the
results of operations of the Company as if College Plaza and Spring Valley
Marketplace had been sold prior to January 1, 1996. The Pro Forma
Statements of Operations do not reflect any gain or loss which may be
recognized by the Company as a result of the sale.
(c) Exhibits
(1) Agreement of Sale dated December 2, 1997 between Berkshire Realty
Enterprise Limited Partnership, agent for Berkshire Realty
Company, Inc., and Kejack, Inc. and its permitted assigns.*
(2) First Amendment to Agreement of Sale dated December 12, 1997
between Berkshire Realty Enterprise Limited Partnership, agent
for Berkshire Realty Company, Inc., and Kejack, Inc. and its
permitted assigns.*
(3) Second Amendment to Agreement of Sale dated December 14, 1997
between Berkshire Realty Enterprise Limited Partnership, agent
for Berkshire Realty Company, Inc., and Kejack, Inc. and its
permitted assigns.*
(4) Side letter dated December 17, 1997 from William S. Gee on behalf
of Kejack, Inc. and its permitted assigns to Eli Rubenstein, Esq.
on behalf of Berkshire Realty Enterprise Limited Partnership,
agent for Berkshire Realty Company, Inc.*
(5) Side letter dated January 6, 1998 from William S. Gee on behalf
of Kejack, Inc. and its permitted assigns to Eli Rubenstein, Esq.
on behalf of Berkshire Realty Enterprise Limited Partnership,
agent for Berkshire Realty Company, Inc.*
* Incorporated by reference.
7
SIGNATURE
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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.
Berkshire Realty Company, Inc.
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Registrant
BY: /s/ Marianne Pritchard
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Executive Vice President and
Chief Financial Officer of
Berkshire Realty Company, Inc.
DATE: March 30, 1998