UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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 Commission File Number: 0-20707
reported): January 1, 1997
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 63-1098468
(State of organization) (IRS Employer
Identification Number)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal executive offices)
(205) 250-8700
(Registrant's telephone number, including area code)
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COLONIAL REALTY LIMITED PARTNERSHIP
Item 5. Other Events
Colonial Realty Limited Partnership (CRLP), a Delaware limited partnership,
is the Operating Partnership of Colonial Properties Trust, an Alabama real
estate investment trust whose common shares are listed on the New York Stock
Exchange under the symbol CLP. CRLP owns and operates commercial real estate in
the southeastern United States. CRLP has acquired three multifamily apartment
communities in Alabama, Florida, and Georgia, three retail centers in Alabama
and Georgia and four office properties in Alabama (the Acquired Properties)
since December 31, 1996. CRLP also currently has two probable acquisitions which
include one office and one retail property in Georgia and one multifamily
property in Mississippi (the Probable Acquisitions). The terms of the
acquisitions of the Acquired Properties, which were determined as a result of
arms length negotiations between the sellers of the properties and CRLP, are set
forth in real estate sales contracts. The following is a summary of the material
terms of the transactions.
In accordance with Rule 3-14 of Regulation S-X, financial statements with
respect to four of the Acquired Properties and one of the Probable Acquisitions
are being filed because CRLP has either (a) already acquired the properties and
the book value of the properties in the aggregate are significant, or (b) deemed
the acquisition to be probable and the book value of the properties in the
aggregate are significant.
Terms of Acquisition
The 10 Acquired Properties total 764 apartment units, 1.1 million square feet of
retail space, and 745,000 square feet of office space and were purchased at a
combined purchase price of $148.1 million. The two Probable Acquisitions total
328 apartment units, and 515,000 square feet of office space, and 46,000 square
feet of retail space, and would be purchased at a combined purchase price of
$94.3 million. The combined completed and probable acquisitions would increase
CRLP's multifamily portfolio to 14,957 apartment units, increase CRLP's retail
portfolio to 7.1 million square feet, and increase CRLP's office portfolio to
2.0 million square feet. In association with three of the Acquired Properties,
CRLP assumed existing mortgages totaling $22.6 million. The remainder of the
purchase price of the Acquired Properties was financed through the issuance of
limited partnership units and advances on CRLP's unsecured line of credit. In
association with one of the Probable Acquisitions, CRLP will assume existing
mortgages. The remainder of the purchase prices of the Probable Acquisitions
would be financed through the issuance of limited partnership units and advances
on CRLP's unsecured line of credit.
Description of Property
Acquired Properties
Riverchase Center--Birmingham, Alabama
In two transactions on January 1 and January 8, 1997, CRLP acquired a 100.00%
interest in Riverchase Center 2100, and a 73.05% interest in Riverchase Center
2200/2300 totaling 306,000 square feet of leasable area. Riverchase Center is an
office park comprised of eight one-level buildings in Birmingham, Alabama. The
purchase price of $20.8 million was funded by the assumption of $8.7 million in
mortgage debt which bears interest at 7.88%, the issuance of 25,163 limited
partnership units valued at $0.7 million,
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and an advance on CRLP's unsecured line of credit. The buildings were built
between 1984 and 1988 and were 93% leased at the date of acquisition.
Beechwood Shopping Center--Athens, Georgia
On March 24, 1997, CRLP acquired Beechwood Shopping Center, a 336,000 square
foot community shopping center in Athens, Georgia. The $22.2 million purchase
price of the center was financed through the assumption of debt totaling $11.9
million which bears interest at an effective rate of 7.0% (stated rate of
10.375%), and an advance on CRLP's unsecured line of credit. Anchor tenants
include Harris-Teeter, Rhodes Furniture, Revco Drugs, and the U.S. Post Office.
The center, which was built in 1963 and renovated in 1992, was 97% leased at the
date of acquisition.
Heatherbrooke Center--Birmingham, Alabama
Also on March 24, 1997, CRLP acquired Heatherbrooke Center, a 28,000 square foot
community shopping center in Birmingham, Alabama. The $3.0 million purchase
price of the center was financed through the issuance of 16,303 limited
partnership units valued at $0.5 million and an advance on CRLP's unsecured line
of credit. AMI-Brookwood Medical Center occupies 18,000 square feet in the
center. The center, which was built in 1984, was 92% leased at the date of
acquisition.
The Meadows at Trussville--Birmingham, Alabama
On April 1, 1997, CRLP acquired The Meadows at Trussville, a 376-unit complex
comprising 20 two- and three-story buildings on approximately 28 acres of land
in a suburb of Birmingham, Alabama. The property was developed during 1996 and
1997 and is currently in lease-up. The Meadows at Trussville was acquired for a
purchase price of $20.5 million which was financed through the issuance of
57,072 limited partnership units valued at $1.6 million and an advance on CRLP's
unsecured line of credit. Amenities include a clubhouse, two swimming pools and
a wading pool, a car care center, a fitness center, tennis courts, a playground,
and leasable garages. The average unit size is 1,091 square feet with average
unit market rent of $645 per month.
International Park 1900 and 2100--Birmingham, Alabama
On May 1, 1997, CRLP acquired the remaining 62.5% outside interests in
International Park Buildings 1900 and 2100, two multistory office buildings in
Birmingham, Alabama. The purchase of these outside interests increased CRLP's
ownership from a 37.5% interest to full ownership in the two buildings which
total 93,000 square feet. At the same time, CRLP sold its 25.0% interest in a
129,000 square foot building in the same office complex to an unaffiliated
party. As a part of the acquisition of these outside interests, CRLP assumed a
mortgage with a balance of $2.0 million which bears interest at 8.65%. CRLP
received $57,000 net cash as a result of the transactions. The buildings, which
were built between 1987 and 1989, were 100% leased at the date of acquisition.
Brookwood Mall--Birmingham, Alabama
On May 13, 1997, CRLP acquired Brookwood Mall, a 693,000 square foot enclosed
mall (including 232,000 square feet of tenant-owned space) in Birmingham,
Alabama, for a purchase price of $32.5 million. The mall includes a 232,000
square foot Rich's department store, a 106,000 square foot McRae's department
store, and 375,000 square feet specialty shop space. CRLP funded the acquisition
through the exchange of two multifamily properties in Florida with a carrying
value of $14.0
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million and an advance on CRLP's unsecured line of credit. The mall, which was
built in 1973 and renovated in 1991, was 92% leased at the date of acquisition.
Lakeside Office Park--Huntsville, Alabama
On May 22, 1997, CRLP acquired Lakeside Office Park, an office park comprised of
two three-story brick and glass multi-tenant buildings in Huntsville, Alabama,
totaling 121,000 square feet of leasable area. The purchase price of $8.8
million was funded by an advance on CRLP's unsecured line of credit. Lakeside
Office Park was built during 1989 and 1990 and was 93% leased at the date of
acquisition.
Progress Center--Huntsville, Alabama
On June 26, 1997, CRLP acquired Progress Center, an office park comprised of
five multi-tenant buildings in Huntsville, Alabama, totaling 225,000 square feet
of leasable area. The purchase price of $15.0 million would was funded through
the exchange of an existing office property in Alabama valued at $1.8 million
and an advance on CRLP's unsecured line of credit. Progress Center was built
between 1983 and 1991 and was 87% leased at the date of acquisition.
Timothy Woods--Athens, Georgia
On July 11, 1997, CRLP acquired Timothy Woods, a 212-unit complex comprising 88
one-bedroom, 76 two-bedroom, and 48 three-bedroom units in Athens, Georgia. The
property was developed during 1996 and was 99% leased at the date of
acquisition. Timothy Woods was acquired for a purchase price of $12.8 million
which was financed through the issuance of 27,275 limited partnership units
valued at $.8 million and an advance on CRLP's unsecured line of credit.
Amenities include a clubhouse, a swimming pool, a car wash, a fitness center,
two tennis courts, limited access entry, and leasable garages. The average unit
size is 1,008 square feet with average unit market rent of $746 per month.
Oakleigh Apartments--Pensacola, Florida
On July 14, 1997, CRLP acquired Oakleigh Apartments, a 176-unit complex
comprising 48 one-bedroom, 104 two-bedroom/two-bath, and 24
three-bedroom/two-bath units on approximately 11 acres of land in Pensacola,
Florida. The property was developed during 1997 and was 100% leased as of the
date of acquisition. Oakleigh Apartments was acquired for a purchase price of
$10.5 million which was financed through the issuance of 35,522 limited
partnership units valued at $1.0 million and an advance on CRLP's unsecured line
of credit. Amenities include a swimming pool, a car wash, and exercise room, a
small business center, screened porches, security gates, garages and covered
parking, and alarm systems. Units range from 815 square feet to 1,223 square
feet with average unit market rents ranging from $590 to $805 per month.
Probable Acquisitions
As described further below, CRLP has entered into an agreement to acquire one of
the Probable Acquisitions, and has entered into a letter of intent to merge the
second. The completion of each of the Probable Acquisitions is subject to due
diligence, definitive documentation of various agreements, and other material
conditions. If these conditions are satisfied, CRLP expects to complete these
acquisitions during the third quarter of 1997. There can be no assurance that
the conditions will be satisfied, that CRLP will in fact complete any or
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all of the Probable Acquisitions, or that any Probable Acquisition that is
completed will occur on schedule.
Proposed Office and Retail Merger--Atlanta, Georgia
CRLP has entered into a letter of intent to merge the real estate assets of an
Atlanta-area developer into CRLP. The transaction includes a Class-A,
multi-tenant office park comprising 515,000 square feet and 46,000 square feet
of retail shopping space. One of the office buildings in the park is currently
under construction and is due to be completed during the third quarter of 1997.
The transaction is estimated to be valued at approximately $76.3 million and is
expected to be funded through the issuance of limited partnership units, the
assumption of debt, and an advance on CRLP's unsecured line of credit. An
additional amount could be earned by the developer if the building under
construction exceeds certain lease-up parameters. As a part of the transaction,
the developer is expected to be elected to Colonial Properties Trust's Board of
Trustees. The merger is subject to customary closing conditions, including the
satisfactory completion of due diligence procedures, the execution of definitive
merger agreements, and compliance with applicable laws. Assuming satisfaction of
these conditions, the merger is expected to close in phases during the second
half of 1997 and the first half of 1998.
Mark Trace--Jackson, Mississippi
CRLP has entered into an agreement to acquire Mark Trace, a 328-unit complex on
approximately 26 acres of land in Jackson, Mississippi. The community was
developed between 1995 and 1997, and is currently 95% leased. Mark Trace would
be acquired for a purchase price of $18.0 million which would be financed
through the issuance of limited partnership units valued at $6.7 million and an
advance on CRLP's unsecured line of credit. The average unit size is 988 square
feet with average unit market rent of $616 per month.
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COLONIAL REALTY LIMITED PARTNERSHIP
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired or to be Acquired
Page
Historical Summary of Revenues and Direct
Operating Expenses of Riverchase Center Building 2100..........7
Historical Summary of Revenues and Direct
Operating Expenses of Beechwood Shopping Center................10
Historical Summary of Revenues and Direct
Operating Expenses of The Meadows at Trussville................13
Historical Summary of Revenues and Direct
Operating Expenses of Brookwood Mall...........................16
Historical Summary of Revenues and Direct
Operating Expenses of Proposed Office and Retail Merger
in Atlanta, Georgia........................................19
(b) Pro Forma Financial Information................................22
(c) Exhibits
23.1 Letter re: Consent of Independent Accountants...........31
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Colonial Properties Holding Company, Inc.
We have audited the Historical Summary of Revenues and Direct Operating Expenses
of the Acquired Property--Riverchase Center Building 2100 as defined in Note 1
for the year ended December 31, 1996. This Historical Summary is the
responsibility of the Acquired Property's management. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe our
audit provides a reasonable basis for our opinion.
The accompanying Historical Summary of Revenues and Direct Operating Expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of Colonial
Realty Limited Partnership, and is not intended to be a complete presentation of
the revenues and expenses of the Acquired Property--Riverchase Center Building
2100.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Acquired
Property--Riverchase Center Building 2100 for the year ended December 31, 1996
in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
February 7, 1997
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ACQUIRED PROPERTY--RIVERCHASE CENTER BUILDING 2100
HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
---------------------
For the
Year Ended
December 31, 1996
----------------
Revenues $ 1,341,234
------------
Direct operating expenses:
General operating expenses 29,801
Salaries and benefits 12,844
Repairs and maintenance 72,639
Taxes, licenses, and insurance 84,348
------------
199,632
------------
Excess of revenues over direct
operating expenses $ 1,141,602
============
See Note to Historical Summary of Revenues and Direct Operating Expenses.
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ACQUIRED PROPERTY--RIVERCHASE CENTER BUILDING 2100
NOTE TO HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
1. Accounting Policies
Description--The accompanying Historical Summary consists of the revenues
and direct operating expenses of Riverchase Center Building 2100, an
office property (the Acquired Property) located in Birmingham, Alabama.
Colonial Realty Limited Partnership purchased the Acquired Property for a
total of approximately $11.6 million.
Basis of Presentation--The Historical Summary of Revenues and Direct
Operating Expenses includes gross operating revenues, exclusive of
interest income, and direct operating expenses, exclusive of mortgage and
other interest expense, depreciation, amortization, management fees,
non-recurring administrative expenses, and federal, state, and local
income taxes, if any.
Income Recognition--Revenue from rental property is recognized on a
straight-line basis over the terms of the leases.
Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Colonial Properties Holding Company, Inc.
We have audited the Historical Summary of Revenues and Direct Operating Expenses
of the Acquired Property--Beechwood Shopping Center as defined in Note 1 for the
year ended December 31, 1996. This Historical Summary is the responsibility of
the Acquired Property's management. Our responsibility is to express an opinion
on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe our
audit provides a reasonable basis for our opinion.
The accompanying Historical Summary of Revenues and Direct Operating Expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of Colonial
Realty Limited Partnership, and is not intended to be a complete presentation of
the revenues and expenses of the Acquired Property--Beechwood Shopping Center.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Acquired
Property--Beechwood Shopping Center for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
April 24, 1997
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ACQUIRED PROPERTY--BEECHWOOD SHOPPING CENTER
HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
---------------------
For the
Year Ended
December 31, 1996
------------------
Revenues $ 2,299,197
-------------------
Direct operating expenses:
General operating expenses 67,241
Salaries and benefits 46,388
Repairs and maintenance 176,629
Taxes, licenses, and insurance 212,551
-------------------
502,809
-------------------
Excess of revenues over direct
operating expenses $ 1,796,388
===================
See Note to Historical Summary of Revenues and Direct Operating Expenses.
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ACQUIRED PROPERTY--BEECHWOOD SHOPPING CENTER
NOTE TO HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
1. Accounting Policies
Description--The accompanying Historical Summary consists of the revenues
and direct operating expenses of Beechwood Shopping Center, a retail
property (the Acquired Property) located in Athens, Georgia. Colonial
Realty Limited Partnership, purchased the Acquired Property for a total of
approximately $22.2 million.
Basis of Presentation--The Historical Summary of Revenues and Direct
Operating Expenses includes gross operating revenues, exclusive of
interest income, and direct operating expenses, exclusive of mortgage and
other interest expense, depreciation, amortization, management fees,
non-recurring administrative expenses, and federal, state, and local
income taxes, if any.
Income Recognition--Revenue from rental property is recognized on a
straight-line basis over the terms of the leases.
Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Colonial Properties Holding Company, Inc.
We have audited the Historical Summary of Revenues and Direct Operating Expenses
of the Acquired Property--The Meadows at Trussville as defined in Note 1 for the
period from inception (January 23, 1996) through December 31, 1996. This
Historical Summary is the responsibility of the Acquired Property's management.
Our responsibility is to express an opinion on the Historical Summary based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe our
audit provides a reasonable basis for our opinion.
The accompanying Historical Summary of Revenues and Direct Operating Expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of Colonial
Realty Limited Partnership, and is not intended to be a complete presentation of
the revenues and expenses of the Acquired Property--The Meadows at Trussville.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Acquired
Property--The Meadows at Trussville for the period from inception (January 23,
1996) through December 31, 1996 in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
June 16, 1997
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ACQUIRED PROPERTY--THE MEADOWS AT TRUSSVILLE
HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
---------------------
For the Period
from Inception
(January 23, 1996)
through
December 31, 1996
-----------------------
Revenues $ 390,215
----------------------
Direct operating expenses:
General operating expenses 75,476
Salaries and benefits 80,117
Repairs and maintenance 61,090
Taxes, licenses, and insurance 13,005
----------------------
229,688
----------------------
Excess of revenues over direct
operating expenses $ 160,527
======================
See Note to Historical Summary of Revenues and Direct Operating Expenses.
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ACQUIRED PROPERTY--THE MEADOWS AT TRUSSVILLE
NOTE TO HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
1. Accounting Policies
Description--The accompanying Historical Summary consists of the revenues
and direct operating expenses of The Meadows at Trussville, a multifamily
property (the Acquired Property) located in Birmingham, Alabama. The
Acquired Property was under construction during 1996. The first units were
completed in January 1996 and lease-up began in February 1996.
Construction was completed in December 1996. Colonial Realty Limited
Partnership, purchased the Acquired Property for a total of approximately
$20.5 million.
Basis of Presentation--The Historical Summary of Revenues and Direct
Operating Expenses includes gross operating revenues, exclusive of
interest income, and direct operating expenses, exclusive of mortgage and
other interest expense, depreciation, amortization, management fees,
non-recurring administrative expenses, and federal, state, and local
income taxes, if any.
Income Recognition--Revenue from rental property is recognized when due
from tenants.
Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Colonial Properties Holding Company, Inc.
We have audited the Historical Summary of Revenues and Direct Operating Expenses
of the Acquired Property--Brookwood Mall as defined in Note 1 for the year ended
December 31, 1996. This Historical Summary is the responsibility of the Acquired
Property's management. Our responsibility is to express an opinion on the
Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe our
audit provides a reasonable basis for our opinion.
The accompanying Historical Summary of Revenues and Direct Operating Expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of Colonial
Realty Limited Partnership, and is not intended to be a complete presentation of
the revenues and expenses of the Acquired Property--Brookwood Mall.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Acquired
Property--Brookwood Mall for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
June 18, 1997
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ACQUIRED PROPERTY--BROOKWOOD MALL
STATEMENT OF HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
---------------------
For the
Year Ended
December 31, 1996
-------------------
Revenues $ 6,118,192
-------------------
Direct operating expenses (Note 2):
General operating expenses 1,091,296
Salaries and benefits 326,868
Repairs and maintenance 559,078
Taxes, licenses, and insurance 449,084
-------------------
2,426,326
-------------------
Excess of revenues over direct
operating expenses $ 3,691,866
===================
The accompanying notes are an integral part of the financial statement.
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ACQUIRED PROPERTY--BROOKWOOD MALL
NOTES TO STATEMENT OF HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
1. Organization and Significant Accounting Policies
Description of Property--Brookwood (the "Property") is a retail
development located in Birmingham, Alabama consisting of a covered mall, a
covered garage, and a detached strip shopping center and encompassing
approximately 461,000 square feet.
Rental Revenues--Commercial leases require the payment of base rent
monthly in advance. Rental revenues are recorded on the accrual basis.
Commercial leases generally contain provisions for additional rent based
on a percentage of tenant sales and other provisions which are recorded as
income when received. Minimum rental revenue from long-term commercial
leases is recognized on a straight-line basis over the life of the related
lease.
Risks and Uncertainties--The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. Basis of Accounting
The Historical Summary of Revenues and Direct Operating Expenses includes
gross operating revenues, exclusive of interest income, and direct
operating expenses, exclusive of mortgage and other interest expense,
depreciation, amortization, management fees, non-recurring administrative
expenses, and federal, state, and local income taxes, if any.
3. Description of Leasing Arrangements
The commercial space is leased to tenants under leases with terms that
vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years
for noncancelable operating leases in effect at December 31, 1996 are
approximately as follows:
Year Ending December 31,
1997 $3,978,000
1998 3,604,100
1999 3,230,800
2000 2,603,400
2001 2,193,600
Thereafter 11,002,800
Contingent rental revenue, based on a percentage of tenant sales and other
provisions contained in tenant leases totaled $421,665 for the year ended
December 31, 1996.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Colonial Properties Holding Company, Inc.
We have audited the Historical Summary of Revenues and Direct Operating Expenses
of the Proposed Office and Retail Merger in Atlanta, Georgia (the Properties) as
defined in Note 1 for the year ended December 31, 1996. This Historical Summary
is the responsibility of the Properties' management. Our responsibility is to
express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe our
audit provides a reasonable basis for our opinion.
The accompanying Historical Summary of Revenues and Direct Operating Expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Form 8-K of Colonial
Realty Limited Partnership, and is not intended to be a complete presentation of
the revenues and expenses of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Properties
for the year ended December 31, 1996 in conformity with generally accepted
accounting principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
June 23, 1997
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PROPOSED OFFICE AND RETAIL MERGER IN ATLANTA, GEORGIA
HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
---------------------
For the
Year Ended
December 31, 1996
----------------------
Revenues $ 3,814,772
-------------------
Direct operating expenses:
General operating expenses 239,141
Salaries and benefits 1,567
Repairs and maintenance 318,463
Taxes, licenses, and insurance 228,951
-------------------
788,122
-------------------
Excess of revenues over direct
operating expenses $ 3,026,650
===================
See Notes to Historical Summary of Revenues and Direct Operating Expenses.
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PROPOSED OFFICE AND RETAIL MERGER IN ATLANTA, GEORGIA
NOTES TO HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
1. Accounting Policies
Description--The accompanying Historical Summary consists of the revenues
and direct operating expenses of the Proposed Office and Retail
Merger in Atlanta, Georgia, (the Properties). Colonial Realty Limited
Partnership has signed a letter of intent to merge the Properties into
CRLP's holdings. The names of the Properties, which are presently owned
by various partnerships, have not been disclosed due to the confidential
nature of this ongoing transaction. CRLP's estimated investment in the
Properties is approximately $52.0 million.
Basis of Presentation--The Historical Summary of Revenues and Direct
Operating Expenses includes gross operating revenues, exclusive of
interest income, and direct operating expenses, exclusive of mortgage and
other interest expense, depreciation, amortization, management fees,
non-recurring administrative expenses, and federal, state, and local
income taxes, if any.
Income Recognition--Revenue from rental property is recognized on a
straight-line basis over the terms of the leases.
Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
2. Description of the Property
The Properties are comprised of six existing office buildings and a
retail center. At December 31, 1996, the Properties have approximately
378,000 square feet of leasable office and retail space. One of the office
buildings contains approximately 163,000 square feet and was completed in
July 1996. This building was in lease-up during the second half of 1996
and, therefore, only a partial year of revenues and direct operating
expenses is included in the Historical Summary.
Page - 21
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
March 31, 1997
(Unaudited)
The following unaudited pro forma consolidated condensed balance sheet reflects
significant transactions effected by CRLP after March 31, 1997 including the
purchase of seven of the 10 Acquired Properties, and the two Probable
Acquisitions mentioned elsewhere herein (three of the 10 Acquired Properties
were purchased prior to March 31, 1997 and are already reflected in CRLP's
historical balance sheet at March 31, 1997.)
This unaudited pro forma consolidated condensed balance sheet is not necessarily
indicative of the actual financial position of CRLP had the transactions been
completed as of March 31, 1997, nor does it purport to represent the future
financial position of CRLP. The unaudited pro forma consolidated condensed
balance sheet and related notes should be read in conjunction with the
information appearing in CRLP's 1996 Annual Report as filed with the Securities
and Exchange Commission on Form 10-K and with the financial statements included
therein and the notes thereto and with CRLP's March 31, 1997 Quarterly Report as
filed with the Securities and Exchange Commission on Form 10-Q and with the
financial statements included therein and the notes thereto. In management's
opinion, all adjustments necessary to reflect the effects of these transactions
have been made.
Page - 22
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Balance Sheet
March 31, 1997
(In Thousands)
(Unaudited)
<CAPTION>
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
---------------- --------------- -----------------
(A) (B)
<S> <C> <C> <C>
ASSETS
Land, buildings, & equipment, net $ 866,066 $ 155,302 $ 1,021,368
Undeveloped land and construction in progress 125,263 125,263
Cash and equivalents 2,282 2,282
Restricted cash 2,568 2,568
Accounts receivable, net 4,815 4,815
Prepaid expenses 2,782 2,782
Notes receivable 570 570
Deferred debt and lease costs 6,803 6,803
Investment in subsidiaries 5,086 5,086
Other assets 5,402 5,402
================ =============== =================
$ 1,021,637 $ 155,302 $ 1,176,939
================ =============== =================
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable $ 534,927 $ 139,993 $ 674,920
Accounts payable 16,151 16,151
Accrued expenses 9,214 9,214
Tenant deposits 3,156 3,156
Unearned rent 929 929
---------------- --------------- -----------------
Total liabilities 564,377 139,993 704,370
---------------- --------------- -----------------
Minority interest in consolidated operating property 3,255 3,255
---------------- --------------- -----------------
Redeemable units, at redemption value 245,707 15,309 261,016
---------------- --------------- -----------------
Partners' capital, excluding redeemable units 208,298 208,298
---------------- --------------- -----------------
$ 1,021,637 $ 155,302 $ 1,176,939
================ =============== =================
</TABLE>
Page - 23
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
(Unaudited)
(A) Reflects the historical financial position of CRLP as of March 31, 1997 as
presented in CRLP's Form 10-Q as filed with the Securities and Exchange
Commission on May 9, 1997.
(B) Includes the acquisition of seven of the 10 Acquired Properties; The
Meadows at Trussville for a purchase price of $20.5 million,
International Park 1900 and 2100 (exchange of partnership interests),
Brookwood Mall for a purchase price of $32.5 million, Lakeside Office
Park for $8.8 million, Progress Center for a purchase price of $15.0
million, Timothy Woods for a purchase price of $12.8 million, and Oakleigh
Apartments for a purchase price of $10.5 million. These property
acquisitions were financed through the issuance of limited partnership
units, the exchange of two multifamily properties and one office
property, advances on CRLP's unsecured line of credit and the
assumption of indebtedness on one of the properties. Also includes the
acquisition of the two Probable Acquisitions; the Proposed Office and
Retail Merger in Atlanta, Georgia for a purchase price of $52.0 million
and Mark Trace for a purchase price of $18.0 million. These property
acquisitions would be financed through the issuance of limited
partnership units, advances on CRLP's unsecured line of credit and the
assumption of indebtedness.
Page - 24
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1996 and
the Three Months Ended March 31, 1997
(Unaudited)
The following unaudited pro forma consolidated condensed statements of
operations reflect significant transactions effected by CRLP during 1997 which
includes the purchase of the 10 Acquired Properties and the two Probable
Acquisitions mentioned elsewhere herein. In addition to the Acquired Properties,
the following significant transactions are reflected in the unaudited pro forma
consolidated condensed statements of operations: (i) CRLP's cash contributions
received from Colonial Properties Trust's equity offerings completed in January
1996 and January 1997, and (ii) CRLP's debt offerings completed in July 1996,
December 1996, and January 1997. The pro forma effects of all such transactions
are included in the unaudited pro forma consolidated condensed statements of
operations assuming the transactions had occurred as of January 1, 1996 and
assuming CRLP used the proceeds of the equity and debt offerings to repay
outstanding indebtedness (see notes to unaudited pro forma consolidated
condensed statements of operations).
These unaudited pro forma consolidated condensed statements of operations are
not necessarily indicative of the actual results of operations had the
transactions been completed as of January 1, 1996, nor do they purport to
represent the future results of the operations of CRLP. CRLP is not aware of any
material factors relating to the Acquired Properties and Probable Acquisitions,
other than as disclosed in the footnotes to the unaudited pro forma consolidated
condensed statements of operations, which would cause the combined historical
summaries of revenues and direct operating expenses not to be necessarily
indicative of future operating results.
The unaudited pro forma consolidated condensed statements of operations and
related notes should be read in conjunction with the information appearing in
CRLP's 1996 Annual Report as filed with the Securities and Exchange Commission
on Form 10-K and with the financial statements included therein and the notes
thereto and with CRLP's March 31, 1997 Quarterly Report as filed with the
Securities and Exchange Commission on Form 10-Q and with the financial
statements included therein and the notes thereto. In management's opinion, all
adjustments necessary to reflect the effects of these transactions have been
made.
Page - 25
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Statements of Operations
For the year ended December 31, 1996
(In Thousands, Except Per Unit Data)
(Unaudited)
<CAPTION>
For the year ended December 31, 1996
--------------------------------------------------------------
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
------------------ --------------- -----------------
(A) (B)
<S> <C> <C> <C>
Revenues:
Rent $ 130,370 $ 20,946 $ 151,316
Other 4,511 45 4,556
------------------ --------------- -----------------
Total revenue 134,881 19,434 155,872
------------------ --------------- -----------------
Property operating expenses:
General operating expenses 9,530 2,761 12,291
Salaries and benefits 8,606 484 9,090
Repairs and maintenance 13,073 1,182 14,255
Taxes, licenses and insurance 11,538 1,410 12,948
General and administrative 4,071 358 4,429
Depreciation 22,025 3,960 25,985
Amortization 1,509 58 1,567
------------------ --------------- -----------------
Total operating expenses 70,352 10,213 80,565
------------------ --------------- -----------------
Income from operations 64,529 10,778 75,307
------------------ --------------- -----------------
Other income (expense):
Interest expense (24,584) (6,264) (30,848)
Income from partnerships 635 (36) 599
Gains from sale of property 469 -0- 469
Minority interest in consolidated
operating property -0- 15 15
------------------ --------------- -----------------
Total other expense (23,480) (6,285) (29,765)
------------------ --------------- -----------------
Income before extraordinary items 41,049 4,493 45,542
Extraordinary loss from debt extinguishment (511) -0- (511)
------------------ --------------- -----------------
Net income (loss) $ 40,538 $ 4,493 $ 45,031
================== =============== =================
Net income per unit $ 1.58 $ 1.59
================== =================
Units outstanding 25,703 28,365
================== =================
</TABLE>
Page - 26
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Statements of Operations
For the three months ended March 31, 1997
(In Thousands, Except Per Unit Data)
(Unaudited)
<CAPTION>
For the three months ended March 31, 1997
-------------------------------------------------------------
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
----------------- ----------------- -----------------
(A) (B)
<S> <C> <C> <C>
Revenues:
Rent $ 37,402 $ 5,711 $ 43,113
Other 1,768 47 1,815
----------------- ---------------- ---------------
Total revenue 39,170 5,758 44,928
----------------- ---------------- ---------------
Property operating expenses:
General operating expenses 2,668 844 3,512
Salaries and benefits 2,274 179 2,453
Repairs and maintenance 3,580 382 3,962
Taxes, licenses and insurance 3,618 394 4,012
General and administrative 1,213 102 1,315
Depreciation 6,669 1,174 7,843
Amortization 354 13 367
----------------- ---------------- ---------------
Total operating expenses 20,376 3,088 23,464
----------------- ---------------- ---------------
Income from operations 18,794 2,670 21,464
----------------- ---------------- ---------------
Other income (expense):
Interest expense (8,488) (2,211) (10,699)
Income from partnerships 190 (10) 180
Gains (losses) from sale of property (1) -0- (1)
Minority interest in consolidated
operating property (56) -0- (56)
----------------- ---------------- ---------------
Total other expense (8,355) (2,221) (10,756)
----------------- ---------------- ---------------
Income before extraordinary items 10,439 449 10,888
Extraordinary loss from debt extinguishment (384) -0- (384)
----------------- ---------------- ---------------
Net income (loss) $ 10,055 $ 449 $ 10,504
================= ================ ===============
Net income per unit $ 0.37 $ 0.37
================= ================
Units outstanding 27,112 28,365
================= ================
</TABLE>
Page - 27
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(A) Reflects CRLP's historical results of operations for the year ended
December 31, 1996, as presented in CRLP's 1996 Annual Report as filed with
the Securities and Exchange Commission on Form 10-K and CRLP's historical
results of operations for the three months ended March 31, 1997 as
presented in CRLP's March 31, 1997 Quarterly Report as filed with the
Securities and Exchange Commission on Form 10-Q.
(B) Reflects the operating results of the 10 properties acquired during 1997
and the two Probable Acquisition expected to be acquired during the
third quarter of 1997, less the operations of the three properties
exchanged in connection with two of the acquisitions, as mentioned
elsewhere herein. The results included as pro forma adjustments for
these properties include those operating results of the properties for
the respective periods during which CRLP did not own the properties.
This column also reflects the net effect of the application of the cash
contributions received from Colonial Properties Trust's equity
offerings, and CRLP's debt offering proceeds to repay the revolving debt
incurred in the acquisition of properties and mortgage debt. The
interest saved from this repayment of debt is shown net of interest expense
arising from debt incurred from the debt offerings.
Included elsewhere herein are Historical Summaries of Revenues and Direct
Operating Expenses for four of the Acquired Properties and one of the
Probable Acquisitions. The pro forma statements of operations include
certain adjustments made to these historical summaries as presented in the
following table.
For the
Year Ended
December 31, 1996
(in thousands)
--------------
Excess of revenues over direct
operating expenses (1)
Riverchase Center Building $ 1,142
2100
Beechwood Shopping Center 1,796
The Meadows at Trussville 161
Brookwood Mall 3,692
Proposed Office and Retail Merger
in Atlanta, Georgia 3,027
Other properties 4,977
--------------
14,795
Less:
Depreciation and
amortization of property (2) 4,017
Interest on acquisition
financing, net of
savings from debt
and equity offerings (3) 5,871
Other adjustments 33
--------------
Pro forma income before
minority interest $ 4,874
==============
(1) The excess of revenues over direct operating expenses is based upon
historical operations for the properties acquired or to be acquired
during 1997 for the year ended December 31, 1996, as contained in the
Historical Summaries of Revenues and Direct Operating Expenses included
elsewhere herein for the properties whose December 31, 1996 financial
results have been audited.
Page - 28
<PAGE>
(2) The asset basis used in the computation of depreciation includes a
preliminary allocation of the purchase price to land, land
improvements, building, and personal property, plus acquisition costs
to date. Such allocation may be adjusted pending receipt of additional
information. Depreciation has been computed using the straight line
method with cost recovery periods of 7 to 40 years.
(3) Includes interest expense incurred from sources of funds used to
finance the acquisition of the Acquired Properties and Probable
Acquisitions including advances on CRLP's unsecured line of credit, net
of the effect of the application of the cash contributions received
from Colonial Properties Trust's equity offerings, and CRLP's debt
offering proceeds to repay the revolving debt incurred in the
acquisition of properties and mortgage debt. The interest saved from
this repayment of debt is shown net of interest expense arising from
debt incurred from the debt offerings.
Page - 29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
COLONIAL REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership
By:Colonial Properties Holding Company, Inc.
its general partner
Date: July 21, 1997 /s/ Howard B. Nelson, Jr.
-------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
Date: July 21, 1997 /s/ Howard B. Nelson, Jr.
-------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
(Duly Authorized Officer
and Principal Financial Officer)
Page - 30
<PAGE>
Exhibit 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statements of
Colonial Realty Limited Partnership on Forms S-3 related to the Shelf
Registrations dated July 5, 1996 (File No. 333-04301) and October 25, 1996 (File
No. 333-14401) of our report dated February 7, 1997 on our audit of the
Historical Summary of Revenues and Direct Operating Expenses of Acquired
Property--Riverchase Center Building 2100; our report dated April 24, 1997 on
our audit of the Historical Summary of Revenues and Direct Operating Expenses of
Acquired Property--Beechwood Shopping Center; our report dated June 16, 1997 on
our audit of the Historical Summary of Revenues and Direct Operating Expenses of
Acquired Property--The Meadows at Trussville; our report dated June 18, 1997 on
our audit of the Historical Summary of Revenues and Direct Operating Expenses of
Acquired Property--Brookwood Village; and our report dated June 23, 1997 on our
audit of the Historical Summary of Revenues and Direct Operating Expenses of the
Proposed Office and Retail Merger in Atlanta, Georgia, which reports are
included in this Form 8-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
July 17, 1997
Page - 31
