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 9, 1998
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)
<PAGE>
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 southern United States. Since December 31, 1997, CRLP has acquired two
office properties in Alabama, one multifamily apartment community in South
Carolina, and a retail property in Florida (the Acquired Properties). 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 the retail property in Florida are being filed to keep CRLP's
shelf registration statements current.
Terms of Acquisition
The four Acquired Properties during 1998 contain a total of 200 apartment units,
1.1 million square feet of retail space, and 339,000 square feet of office space
and were purchased at a combined purchase price of $144.7 million. The
acquisitions increase CRLP's multifamily portfolio to 14,003 apartment units,
increase CRLP's retail portfolio to 11.6 million square feet, and increase
CRLP's office portfolio to 2.2 million square feet. In connection with the
acquisition of one of the Acquired Properties, CRLP assumed an existing mortgage
totaling $5.7 million. The remainder of the purchase price of the Acquired
Properties was financed through advances on CRLP's unsecured line of credit.
Description of
Acquired Properties
Perimeter Corporate Park--Huntsville, Alabama
On January 9, 1998, CRLP acquired Perimeter Corporate Park, an office park
comprised of two multi-tenant buildings in Huntsville, Alabama totaling 233,000
square feet of leasable area. Major tenants include Mevatec, Schafer
Corporation, Computer Systems Technology, EER Systems Corporation, and Silicon
Graphics. The purchase price of $19.5 million was funded through the assumption
of $5.7 million of debt and an advance on CRLP's unsecured line of credit.
Page 2
<PAGE>
Independence Plaza--Birmingham, Alabama
On January 15, 1998, CRLP acquired Independence Plaza, a 106,000 square foot
office building in Birmingham, Alabama, for a purchase price of $7.5 million.
Major tenants include AmSouth Bank, Cooney, Rikard & Curtain (an insurance firm)
and Wall Street Deli (executive offices). The entire purchase price was funded
through an advance on CRLP's unsecured line of credit.
Ashley Plantation--Bluffton, South Carolina
On May 1, 1998, CRLP acquired Ashley Plantation, a 200-unit apartment complex
developed in 1997 on approximately 21 acres of land in Bluffton, South Carolina.
The average unit size is 1,026 square feet, and the average unit market rent is
$768 per month. The purchase price of $13.7 million was financed through an
advance on CRLP's unsecured line of credit.
Orlando Fashion Square--Orlando, Florida
On May 29, 1998, CRLP acquired Orlando Fashion Square, a 1.1 million square
foot regional mall (including 361,000 square feet of tenant-owned space) in
Orlando, Florida, for a total purchase price of $104 million. The mall anchors
include Burdine's, Sears, Gayfers, JC Penney and General Cinemas. The entire
purchase price was funded through an advance on CRLP's unsecured line of
credit.
Page 3
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Page
Historical Summary of Revenues and Direct
Operating Expenses of Orlando Fashion Square...................5
(b) Pro Forma Financial Information................................9
(c) Exhibits
23.1 Letter re: Consent of Independent Accountants...........18
Page 4
<PAGE>
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 Orlando Fashion Square (the Property) as defined in Note 1 for the year
ended December 31, 1997. This Historical Summary is the responsibility of the
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 Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses of the Orlando
Fashion Square for the year ended December 31, 1997 in conformity with generally
accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
May 14, 1998
Page 5
<PAGE>
<TABLE>
THE ORLANDO FASHION SQUARE
HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
_____________________
<CAPTION>
For the
Year Ended
December 31, 1997
-----------
Revenues:
<S> <C>
Base and percentage rents ............................. $10,066,974
CAM reimbursements .................................... 4,154,930
Other ................................................. 159,643
-----------
14,381,547
-----------
Direct operating expenses:
General operating expenses ............................ 1,844,340
Salaries and benefits ................................. 1,052,769
Repairs and maintenance ............................... 534,102
Taxes, licenses, and insurance ........................ 1,851,015
-----------
5,282,226
-----------
Excess of revenues over direct operating expenses .......... $ 9,099,321
===========
<FN>
See Notes to Historical Summary of Revenues and Direct Operating Expenses.
</FN>
</TABLE>
Page 6
<PAGE>
THE ORLANDO FASHION SQUARE
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 Orlando Fashion Square, a retail mall
(the Property) located in Orlando, Florida. Colonial Realty Limited
Partnership purchased the Property for a total of approximately $104
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.
Income Recognition--Rental income attributable to leases 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 report period. Actual results could differ from those
estimates.
2. Leasing Operations
Minimum base rentals to be received in future periods under noncancelable
operating leases extending beyond one year at December 31, 1997, are as
follows:
<TABLE>
<S> <C>
1998 $ 9,436,458
1999 9,170,007
2000 8,748,680
2001 8,173,462
2002 6,320,872
Thereafter 23,344,602
------------
$ 65,194,081
============
</TABLE>
Page 7
<PAGE>
THE ORLANDO FASHION SQUARE
NOTES TO HISTORICAL SUMMARY OF
REVENUES AND DIRECT OPERATING EXPENSES
3. Ground Lease Commitment
The Property leases the land on which it is located. The lease expires in
November 2092. The annual ground rent expense consists of fixed minimum
annual rent (MAR) plus additional rent, as defined in the lease and
related amendments. The additional rent consists of 5% of MAR, 10% of the
excess of renewal rents over initial MAR, 10% of the percentage rents paid
by tenants who also pay MAR and 7.5% of the percentage rents paid by
tenants who do not pay MAR. The minimum annual rent payments are equal to
the average minimum base rents due over the immediately preceding 3 years
provided that such payments not decline more than $10,000 from one year to
the next nor decline for three consecutive years. In 1997, ground rent
expense of $539,414 was recorded as a component of general operating
expenses.
Page 8
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED
CONDENSED BALANCE SHEET
March 31, 1998
(Unaudited)
The following unaudited pro forma consolidated condensed balance sheet reflects
significant transactions effected by CRLP after March 31, 1998, including the
purchase of two of the four Acquired Properties, and an offering of common
securities to the public by Colonial Properties Trust.
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, 1998, 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 1997 Financial Statements as filed with the
Securities and Exchange Commission on Form 10-K and the notes thereto and with
CRLP's March 31, 1998 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 9
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Balance Sheet
March 31, 1998
(In Thousands)
(Unaudited)
<CAPTION>
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
----------- ----------- -----------
(A) (B)
ASSETS
<S> <C> <C> <C>
Land, buildings, & equipment, net ...................... $ 1,337,028 $ 117,700 $ 1,454,728
Undeveloped land and construction in progress .......... 64,117 64,117
Cash and equivalents ................................... 3,143 3,143
Restricted cash ........................................ 2,678 2,678
Accounts receivable, net ............................... 7,012 7,012
Prepaid expenses ....................................... 2,886 2,886
Notes receivable ....................................... 542 542
Deferred debt and lease costs .......................... 6,942 6,942
Investments ............................................ (32) (32)
Other assets ........................................... 5,052 5,052
----------- ----------- -----------
$ 1,429,368 $ 117,700 $ 1,547,068
=========== =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable ............................ $ 695,034 $ 30,839 $ 725,873
Accounts payable ....................................... 3,825 3,825
Accrued interest ....................................... 7,949 7,949
Accrued expenses ....................................... 6,001 6,001
Tenant deposits ........................................ 3,877 3,877
Unearned rent .......................................... 2,822 2,822
----------- ----------- -----------
Total liabilities ................................. 719,508 30,839 750,347
----------- ----------- -----------
Redeemable units, at redemption value .................. 319,456 86,861 406,317
----------- ----------- -----------
Partners' capital, excluding redeemable units .......... 390,404 390,404
----------- ----------- -----------
$ 1,429,368 $ 117,700 $ 1,547,068
=========== =========== ===========
</TABLE>
Page 10
<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, 1998 as
presented in CRLP's Form 10-Q as filed with the Securities and Exchange
Commission.
(B) Includes the acquisition of two of the four Acquired Properties; Ashley
Plantation for a purchase price of $13.7 million, and the Orlando Fashion
Square for a purchase price of $104.0 million. These property acquisitions
were financed through advances on CRLP's unsecured line of credit. The
remaining two Acquired Properties were purchased prior to March 31, 1998,
and therefore are already included in the March 31, 1998 historical
results. Also includes the cash contributions received from Colonial
Properties Trust's equity issuance of 3,046,400 common shares of beneficial
interest issued in April and May 1998. The net proceeds of the equity
offerings were used to repay outstanding indebtedness.
Page 11
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1997 and
the Three Months Ended March 31, 1998
(Unaudited)
The following unaudited pro forma consolidated condensed statements of
operations reflect significant transactions effected by CRLP during 1997 and
1998 which includes the purchase of the four Acquired Properties 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 February, March, April
and May 1998, and January, July, November and December 1997 (ii) CRLP's debt
offerings completed in January, July, August and September 1997 and (iii) CRLP's
1997 acquisition and disposition activity, which included the acquisition of 25
properties, the disposition of seven properties, and the purchase of additional
interests in two properties (the 1997 Properties) which are discussed in CRLP's
filings on Forms 8-K filed on July 21, 1997, September 17, 1997, and December
10, 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, 1997 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, 1997, 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, 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 1997 Financial Statements as filed with the Securities and Exchange
Commission on Form 10-K and the notes thereto and with CRLP's March 31, 1998
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 12
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Statements of Operations
For the year ended December 31, 1997
(In Thousands, Except Per Unit Data)
(Unaudited)
<CAPTION>
For the year ended December 31, 1997
------------------------------------
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
--------- --------- ---------
(A) (B)
Revenues:
<S> <C> <C> <C>
Rent ................................... $ 178,158 $ 49,409 $ 227,567
Other .................................. 5,968 354 6,322
--------- --------- ---------
Total revenue ...................... 184,126 49,763 233,889
--------- --------- ---------
Property operating expenses:
General operating expenses ............. 12,603 3,238 15,841
Salaries and benefits .................. 10,283 1,673 11,956
Repairs and maintenance ................ 18,669 4,992 23,661
Taxes, licenses and insurance .......... 15,578 4,008 19,586
General and administrative .................. 6,448 44 6,492
Depreciation ................................ 31,956 9,672 41,628
Amortization ................................ 1,322 91 1,413
--------- --------- ---------
Total operating expenses ........... 96,859 23,718 120,577
--------- --------- ---------
Income from operations ............. 87,267 26,045 113,312
--------- --------- ---------
Other income (expense):
Interest expense ....................... (40,496) (685) (41,181)
Income from equity investments ......... 502 (358) 144
Gains from sales of property ........... 2,567 -0- 2,567
--------- --------- ---------
Total other expense ................ (37,427) (1,043) (38,470)
--------- --------- ---------
Income before extraordinary items ...... 49,840 25,002 74,842
Extraordinary loss from debt extinguishment . (3,650) 3,650 -0-
--------- --------- ---------
Net income ............................. $ 46,190 $ 28,652 $ 74,842
Preferred distributions ..................... 1,671 9,267 10,938
--------- --------- ---------
Net income available to unitholders .... $ 44,519 $ 19,385 $ 63,904
========= ========= =========
Net income per unit - basic and diluted ..... $ 1.55 $ 1.78
========= =========
Units outstanding ........................... 28,719 35,890
========= =========
</TABLE>
Page 13
<PAGE>
<TABLE>
Colonial Realty Limited Partnership
Pro Forma Consolidated Condensed Statements of Operations
For the three months ended March 31, 1998
(In Thousands, Except Per Unit Data)
(Unaudited)
<CAPTION>
For the three months ended March 31, 1998
-----------------------------------------
Colonial Realty Colonial Realty
Limited Pro Limited
Partnership Forma Partnership
Historical Adjustments Pro Forma
-------- -------- --------
(A) (B)
Revenues:
<S> <C> <C> <C>
Rent .................................... $ 56,124 $ 3,774 $ 59,898
Other ................................... 2,186 36 2,222
-------- -------- --------
Total revenue ....................... 58,310 3,810 62,120
-------- -------- --------
Property operating expenses:
General operating expenses .............. 4,310 225 4,535
Salaries and benefits ................... 2,869 157 3,026
Repairs and maintenance ................. 5,746 422 6,168
Taxes, licenses and insurance ........... 4,854 323 5,177
General and administrative ................... 2,554 -0- 2,554
Depreciation ................................. 10,161 952 11,113
Amortization ................................. 337 4 341
-------- -------- --------
Total operating expenses ............ 30,831 2,083 32,914
-------- -------- --------
Income from operations .............. 27,479 1,727 29,206
-------- -------- --------
Other income (expense):
Interest expense ........................ (12,579) 97 (12,482)
Income from equity investments .......... 9 -0- 9
Gains (losses) from sales of property ... (32) -0- (32)
-------- -------- --------
Total other expense ................. (12,602) 97 (12,505)
-------- -------- --------
Income before extraordinary items ....... 14,877 1,824 16,701
Extraordinary loss from debt extinguishment .. (395) 395 -0-
-------- -------- --------
Net income .............................. $ 14,482 $ 2,219 $ 16,701
Preferred distributions ...................... 2,734 -0- 2,734
-------- -------- --------
Net income available to unitholders ..... $ 11,748 $ 2,219 $ 13,967
======== ======== ========
Net income per unit - basic and diluted ...... $ 0.37 $ 0.39
======== ========
Units outstanding ............................ 31,440 35,890
======== ========
</TABLE>
Page 14
<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, 1997, as presented in CRLP's 1997 Financial Statements 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, 1998
as presented in CRLP's March 31, 1998 Quarterly Report as filed with the
Securities and Exchange Commission on Form 10-Q.
(B) Reflects the operating results of the four properties acquired during 1998
as mentioned elsewhere herein, and the 1997 Properties, as discussed in
CRLP's Forms 8-K filed on July 21, 1997, September 17, 1997, and December
10, 1997. 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 equity and
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 is the Historical Summary of Revenues and Direct
Operating Expenses for one of the Acquired Properties. The pro forma
statements of operations include certain adjustments made to this
historical summary as presented in the following table.
<TABLE>
For the
Year Ended
December 31,
1997
(in
thousands)
--------------
<S> <C>
Excess of revenues over direct
operating expenses (1)
Orlando Fashion Square $ 9,099
Other properties 26,709
-------------
35,808
Less (plus):
Depreciation and 9,763
amortization of property (2)
Interest on acquisition
financing, net of 685
savings from debt
and equity offerings (3)
Other adjustments (3,292)
-------------
Pro forma income $ 28,652
=============
</TABLE>
Page 15
<PAGE>
(1) The excess of revenues over direct operating expenses is based upon
historical operations for the properties acquired during 1997 and 1998
for the year ended December 31, 1997, as contained in the Historical
Summary of Revenues and Direct Operating Expenses included elsewhere
herein for the property whose December 31, 1997 financial results have
been audited.
(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 including advances
on CRLP's unsecured line of credit, net of the effect of the
application of the equity and 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 16
<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: June 11, 1998 /s/ Howard B. Nelson, Jr.
-------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
(Duly Authorized Officer
and Principal Financial Officer)
Page 17
<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 Form S-3 related to the Shelf
Registration dated October 25, 1996 (File No. 333-14401); and Form S-3 related
to the Shelf Registration dated December 11, 1997 (File No. 333-42049)of our
report dated May 14, 1998 on our audit of the Historical Summary of Revenues and
Direct Operating Expenses of the Orlando Fashion Square, which report is
included in this Form 8-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
June 11, 1998
Page 18
