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
September 14, 1998 (June 30, 1998) Date of Report
(Date of earliest event reported)
Baron Capital Trust
Exact name of registrant as specified in its charter
Delaware 333-35063 31-1574856
State or other jurisdiction Commission File Number IRS Employer
of incorporation Identification No.
Baron Capital Trust
7826 Cooper Road
Cincinnati, Ohio 45242
Address of principal executive offices, zip code
513-984-5001
Registrant's telephone number,
including area code
<PAGE>
Item 7. Financial Statements and Exhibits.
Set forth below are the financial statements required by this item for (i)
the acquisition by Baron Capital Properties, L.P. ("Baron Properties"), of which
the Registrant is the sole general partner and a limited partner, of beneficial
ownership of a residential apartment property referred to as Crystal Court
Apartments - Phase II located in Lakewood, Florida (previously reported on the
Registrant's Form 10-QSB filed with the Commission on August 14, 1998) and (ii)
the acquisition by Baron Properties of beneficial ownership of a residential
apartment property referred to as Heatherwood Apartments-Phase I located in
Kissimmee, Florida (previously reported on the Registrant's Form 8-K filed with
the Commission on July 15, 1998).
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Crystal Court Apartments, Phase II, for the years ended December 31, 1996 and
1997. This financial statement is the responsibility of the Company's
management. My responsibility is to express an opinion on this financial
statement based upon my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain 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 certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form S-4 of
Baron Capital Properties, L.P., a Delaware limited partnership) and excludes
material expenses described in Note 1 to the statement of revenues and certain
expenses, that would not be comparable to those resulting from the proposed
future operations of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Crystal Court Apartments, Phase II, for the years ended December 31, 1996
and 1997 in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
March 28, 1998
<PAGE>
CRYSTAL COURT APARTMENTS, PHASE II
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
December 31, December 31,
1997 1996
------------ ------------
REVENUES
Rental income $307,069 $295,906
Other income 9,081 2,484
-------- --------
Total revenues 316,150 298,390
-------- --------
CERTAIN EXPENSES
Personnel 26,477 32,567
Advertising and promotion 1,755 3,136
Utilities 19,228 23,165
Repairs and maintenance 23,590 35,231
Real estate taxes and insurance 34,471 34,691
Mortgage interest expense 120,919 127,738
Management fees 20,777 21,537
Other operating expenses 4,341 3,897
-------- --------
Total certain expenses 251,558 281,962
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 64,592 $ 16,428
======== ========
See Note to Statement of Revenues and Certain Expenses
<PAGE>
CRYSTAL COURT APARTMENTS, PHASE II
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Crystal Court Apartments, Phase II, consist of 80 units located in
Lakeland, Florida. The property was acquired by purchase in 1982 by Crystal
Court Apartments II, Ltd. The following percentage of units were occupied
at the various period ending dates:
December 31, 1996 95%
December 31, 1997 95%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Crystal Court Apartments, Phase II.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
Crystal Court Apartments, Phase II
Statement of Revenues and Certain Expenses
For the Five Month Period Ended May 31, 1998
(unaudited)
Revenue May 31, 1998
------------
Rent Base $139,468.00
Other Income 5,240.00
-----------
Total Revenue 144,708.00
-----------
Certain Expenses
Personnel 11,957.00
Advertising and Promotion 2,086.00
Utilities Expense 8,181.00
Repairs and Maintenance 9,905.00
Real Estate Taxes and Insurance 9,340.00
Mortgage Interest Expense 63,345.00
Management Fees 6,460.00
Other Operating Expense 0.00
-----------
Total Operating Expense 111,274.00
-----------
Revenues in Excess of Certain Expenses $ 33,434.00
===========
<PAGE>
CRYSTAL COURT APARTMENTS, PHASE II
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE FIVE MONTH PERIOD ENDED MAY 31, 1998
1. Descriptions and Summary of Significant Accounting Policies
Description
Crystal Court Apartments, Phase II, consist of 80 units located in
Lakeland, Florida. The property was acquired by purchase in 1982 by Crystal
Court Apartments II, Ltd. The following percentage of units were occupied
at the period ending date:
May 31, 1998 93%
Basis of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of Crystal Court Apartments - Phase II.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Baron Capital Trust:
I have audited the accompanying statement of revenues and certain expenses
(defined as being operating revenues less direct operating expenses) of the
Heatherwood Apartments, Phase I, for the years ended December 31, 1996 and 1997.
This financial statement is the responsibility of the Company's management. My
responsibility is to express an opinion on this financial statement based upon
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits to obtain reasonable
assurance about whether the statement of revenues and certain 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 certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
presentation of the statement of revenues and certain expenses. I believe that
my audit provides a reasonable basis for my opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the Registration Statement on Form S-4 of
Baron Capital Properties, L.P., a Delaware limited partnership) and excludes
material expenses described in Note 1 to the statement of revenues and certain
expenses, that would not be comparable to those resulting from the proposed
future operations of the property.
In my opinion, the statement of revenues and certain expenses presents fairly,
in all material respects, the revenues and certain expenses, as defined above,
of the Heatherwood Apartments, Phase I, for the years ended December 31, 1996
and 1997 in conformity with generally accepted accounting principles.
Elroy D. Miedema
Certified Public Accountant
Ft. Lauderdale, Florida
June 11, 1998
<PAGE>
HEATHERWOOD APARTMENTS, PHASE I
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(unaudited)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
----------- ------------
<S> <C> <C>
REVENUES
Rental income $294,513 $284,886
Other income 12,847 16,566
-------- --------
Total revenues 303,893 301,452
-------- --------
CERTAIN EXPENSES
Personnel 42,317 31,851
Advertising and promotion 4,243 4,942
Utilities 29,999 27,255
Repairs and maintenance 36,667 48,649
Real estate taxes and insurance 38,221 36,052
Mortgage interest expense 60,327 63,986
Management fees 14,489 14,400
Other operating expenses 7,678 5,052
-------- --------
Total certain expenses 233,941 232,187
-------- --------
REVENUES IN EXCESS
OF CERTAIN EXPENSES $ 69,952 $ 69,265
======== ========
</TABLE>
See Note to Statement of Revenues and Certain Expenses
<PAGE>
HEATHERWOOD APARTMENTS, PHASE I
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. Descriptions and Summary of Significant Accounting Policies
Description
Heatherwood Apartments, Phase I, consist of 68 units located in Kissimmee,
Florida. The property was acquired June 30, 1998, by Heatherwood Kissimmee,
Ltd. The following percentage of units were occupied at the various period
ending dates:
December 31, 1997 97%
Basis Of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of the Heatherwood Apartments, Phase I.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
Heatherwood Apartments, Phase I
Statement of Revenues and Certain Expenses
For the Five Month Period Ended May 31, 1998
(unaudited)
Revenue May 31, 1998
------------
Rent Base $134,989.00
Other Income 6,846.00
-----------
Total Revenue 141,835.00
-----------
Certain Expenses
Personnel 24,809.00
Advertising and Promotion 2,675.00
Utilities Expense 11,076.00
Repairs and Maintenance 7,248.00
Real Estate Taxes and Insurance 8,820.00
Mortgage Interest Expense 58,502.00
Management Fees 8,960.00
Other Operating Expense 0.00
-----------
Total Operating Expense 122,090.00
-----------
Revenues in Excess of Certain Expenses $ 19,745.00
===========
<PAGE>
HEATHERWOOD APARTMENTS, PHASE I
NOTE TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE FIVE MONTH PERIOD ENDED MAY 31, 1998
1. Descriptions and Summary of Significant Accounting Policies
Description
Heatherwood Apartments - Phase I consist of 68 units located in Kissimmee,
Florida. The property was acquired by purchase November 10, 1997 by
Heatherwood Kissimee, Ltd. The following percentage of units were occupied
at the period ending date:
May 31, 1998 96%
Basis of Presentation
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying financial statement is not
representative of the actual operations for the period presented as certain
expenses, which may not be comparable to the expenses expected to be
incurred by Baron Capital Properties, L.P., a Delaware limited partnership
which will conduct the future real property operations of Baron Capital
Trust, have been excluded. Expenses excluded consist of depreciation due to
basis and method changes, professional fees, and other costs not directly
related to the future operations of Heatherwood Apartments - Phase I.
Income Recognition
Rental income attributable to residential leases is recorded when due from
tenants.
Leases
Apartment units are rented under lease agreements with terms of one year or
less.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BARON CAPITAL TRUST
Date: September 14, 1998 By: /s/ Gregory K. McGrath
---------------------------
Gregory K. McGrath,
Chief Executive Officer
