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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
August 15, 1997
Date of Report (Date of earliest event reported)................................
TARRAGON REALTY INVESTORS, INC.
................................................................................
(Exact name of registrant as specified in its charter)
Nevada 0-8003 94-2432628
................................................................................
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File No.) Identification No.)
3100 Monticello, Suite 200, Dallas, Texas 75205
................................................................................
(Address of principal executive offices) (Zip Code)
(214) 599-2200
Registrant's telephone number, including area code..............................
Not Applicable
................................................................................
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
This Form 8-K/A amends a Form 8-K Current Report dated August 15, 1997, and
filed September 2, 1997, by Tarragon Realty Investors, Inc., (the "Company")
only to provide required financial statements that were not available at the
date of the original filing.
On August 15, 1997, the Company purchased Park 20 West Office Park (the
"Property") for $3.5 million. The purchase price was based on an estimated
capitalization rate of approximately 16% and exceeds 10% of the Company's
consolidated assets at November 30, 1996. The Property consists of ten office
buildings, eight of which are single story, comprising 69,066 square feet and is
located in Tallahassee, Florida. Two of the buildings were constructed in the
early 1950s, and the remaining buildings were constructed in 1972. The Property
is currently 94% occupied, with 91% of the total square footage occupied by
three tenants: General Dynamics, Tallahassee Community College, and the State of
Florida - Department of Corrections. The Property was purchased from Adar Realty
Company, a New York general partnership which has no other relationship to the
Company.
A portion of the purchase price was financed through a $648,000 loan to the
Company from Tarragon Realty Advisors, Inc. ("Tarragon"), the Company's advisor.
The loan from Tarragon bore interest at prime plus 1% per annum and was repaid
in October 1997 with funds from the Company's working capital. A portion of the
purchase price was financed through the assumption of an existing first mortgage
loan in the amount of $1.9 million held by Mellon Mortgage Company. The mortgage
loan bears interest at 8.68% per annum, is payable in monthly installments of
principal and interest of $17,585, and matures in March 2006. The cash portion
of the purchase price totaling $996,000, including earnest money deposits paid
prior to closing, was funded by the Company's cash on hand. In connection with
the acquisition, the Company paid an acquisition fee of $34,550 to Tarragon.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of property acquired:
The audited statement of revenues and direct operating expenses for the Property
for the year ended December 31, 1996, is provided.
(b) Pro forma financial information:
Pro forma statements of operations are presented for the fiscal year ended
November 30, 1996, and the six months ended May 31, 1997. A pro forma balance
sheet as of May 31, 1997, is also presented. The pro forma statements of
operations present the Company's operations as if the transaction described in
Item 2. had occurred at the beginning of each of the periods presented.
(c) Exhibits:
Exhibit
Number Description
99.0 Audited Statement of Revenues and Direct Operating Expenses of
Park 20 West Office Park for the year ended December 31, 1996
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TARRAGON REALTY INVESTORS, INC.
PRO FORMA
CONSOLIDATED BALANCE SHEET
MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Actual Acquisition (1) Pro forma
---------- --------------- ----------
(dollars in thousands)
Assets
<S> <C> <C> <C>
Notes and interest receivable ............. $ 128 $ -- $ 128
Real estate held for sale, net of
accumulated depreciation ............. 4,308 -- 4,308
---------- ---------- ----------
4,436 -- 4,436
Less - allowance for estimated
losses ............................... (241) -- (241)
---------- ---------- ----------
4,195 -- 4,195
Real estate held for investment, net
of accumulated depreciation .......... 24,336 3,504 27,840
Investments in and advances to
partnerships ......................... 870 -- 870
Cash and cash equivalents ................. 1,876 (1,031) 845
Restricted cash ........................... 367 157 524
Other assets, net ......................... 1,341 -- 1,341
---------- ---------- ----------
$ 32,985 $ 2,630 $ 35,615
========== ========== ==========
Liabilities and Stockholders' Equity
Liabilities
Notes, debentures, and interest
payable .............................. $ 21,609 $ 1,951 $ 23,560
Other liabilities ......................... 950 679 1,629
---------- ---------- ----------
22,559 2,630 25,189
Commitments and contingencies..............
Minority interest ......................... 415 -- 415
Stockholders' equity
Common stock, $.01 par value;
authorized shares, 20,000,000;
shares issued and outstanding,
1,334,750 (after deducting 13,237
held in treasury) .................... 2,223 -- 2,223
Paid-in capital ........................... 43,644 -- 43,644
Accumulated distributions in excess
of accumulated earnings .............. (35,856) -- (35,856)
---------- ---------- ----------
10,011 -- 10,011
---------- ---------- ----------
$ 32,985 $ 2,630 $ 35,615
========== ========== ==========
</TABLE>
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(1) Assumes acquisition of Park 20 West Office Park by the Company on May 31,
1997.
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TARRAGON REALTY INVESTORS, INC.
PRO FORMA
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Park 20
Actual West (1) Pro forma
---------- ---------- ----------
(dollars in thousands, except per share)
<S> <C> <C> <C>
Income
Rentals ........................... $ 4,511 $ 442 $ 4,953
Interest .......................... 124 -- 124
Equity in (loss) of partnerships... (55) -- (55)
---------- ---------- ----------
4,580 442 5,022
Expenses
Property operations ............... 2,552 247 2,799
Interest .......................... 982 84 1,066
Depreciation ...................... 427 35 462
Advisory fees to affiliate ........ 142 -- 142
General and administrative ........ 241 -- 241
---------- ---------- ----------
4,344 366 4,710
---------- ---------- ----------
Income before minority interest ...... 236 76 312
Minority interest in (income)
of consolidated partnership ....... (7) -- (7)
---------- ---------- ----------
Net income ........................... $ 229 $ 76 $ 305
========== ========== ==========
Earnings per share
Net income ........................... $ .17 $ .23
========== ==========
Weighted average shares of
common stock used in
computing earnings per share ...... 1,342,670 1,342,670
========== ==========
</TABLE>
- ---------------
(1) Assumes acquisition of Park 20 West Office Park by the Company on
December 1, 1996, and accordingly represents operations for the six
months ended May 31, 1997.
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TARRAGON REALTY INVESTORS, INC.
PRO FORMA
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Park 20
Actual West (1) Pro forma
---------- ---------- ----------
(dollars in thousands, except per share)
<S> <C> <C> <C>
Income
Rentals .............................. $ 9,357 $ 813 $ 10,170
Interest ............................. 127 -- 127
Equity in (loss) of partnerships ..... (20) -- (20)
---------- ---------- ----------
9,464 813 10,277
Expenses
Property operations .................. 6,047 492 6,539
Interest ............................. 1,929 168 2,097
Depreciation ......................... 914 70 984
Advisory fees to affiliate ........... 181 -- 181
General and administrative ........... 466 -- 466
---------- ---------- ----------
9,537 730 10,267
---------- ---------- ----------
Income (loss) before net gain
on sale of real estate and
extraordinary gain ................... (73) 83 10
Net gain on sale of real estate ......... 673 -- 673
---------- ---------- ----------
Income from continuing operations........ $ 600 $ 83 $ 683
========== ========== ==========
Earnings per share
Income from continuing operations........ $ .44 $ .50
========== ==========
Weighted average shares of
common stock used in
computing earnings per share ......... 1,354,415 1,354,415
========== ==========
</TABLE>
- --------------
(1) Assumes acquisition of Park 20 West Office Park by the Company on
December 1, 1995, and accordingly represents operations for the year
ended November 30, 1996.
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SIGNATURE
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.
TARRAGON REALTY INVESTORS, INC.
By: /s/ Robert C. Irvine
-------------------------------
Robert C. Irvine
Executive Vice President and
Chief Financial Officer
DATED: November 3, 1997
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TARRAGON REALTY INVESTORS, INC.
INDEX TO EXHIBITS
CURRENT REPORT ON FORM 8-K/A
Dated August 15, 1997
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------- ----------- ------
<S> <C> <C>
99.0 Audited Statement of Revenues and Direct Operating
Expenses of Park 20 West Office Park for the year ended 8
December 31, 1996
</TABLE>
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EXHIBIT 99.0
PARK 20 WEST OFFICE PARK
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1996
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[FARMER, FUQUA, HUNT & MUNSELLE, P.C. LETTERHEAD]
Independent Auditors' Report
To the Board of Directors
Tarragon Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of Park 20 West Office Park for the year ended December 31, 1996.
This statement of revenues and direct operating expenses is the responsibility
of the Property's management. Our responsibility is to express an opinion on
this statement of revenues and direct operating expenses 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 statement of revenues and direct
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of revenues and direct operating expenses. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall statement of revenues and
direct operating expenses presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Tarragon Realty Investors, Inc.) and, as described in
Note 1, is not intended to be a complete presentation of the results of
operations.
In our opinion, the statement of revenues and direct operating expenses
referred to above presents fairly, in all material respects, the revenues and
direct operating expenses of Park 20 West Office Park for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
October 14, 1997
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PARK 20 WEST OFFICE PARK
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1996
<TABLE>
<S> <C>
REVENUES
Net rental revenues $ 817,685
Other revenues 1,832
--------------
Total revenues 819,517
DIRECT OPERATING EXPENSES
Repairs and maintenance 148,627
Utilities 133,593
Property taxes 75,138
Salaries and benefits 41,139
Insurance 7,848
--------------
Total direct operating expenses 406,345
--------------
REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $ 413,172
==============
</TABLE>
The accompanying notes are an integral part of this statement.
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PARK 20 WEST OFFICE PARK
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1996
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
Park 20 West Office Park is a 69,066 square foot office
complex located in Tallahassee, Florida. During 1996, the
property was owned by Adar Realty Company.
The accompanying financial statement does not include a
provision for depreciation and amortization, bad debt expense,
interest expense or income taxes. Accordingly, this statement
is not intended to be a complete presentation of the results
of operations.
NOTE 2: ACCOUNTING 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.
NOTE 3: SUBSEQUENT EVENT
The property was sold to Tarragon Realty Investors, Inc., a
Nevada corporation, on August 15, 1997.
