<PAGE>
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 reported): March 22, 1999
CABOT INDUSTRIAL TRUST
(Exact Name of Registrant as Specified in Charter)
Maryland 1-13829 04-3397866
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (617) 723-0900
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events.
Cabot Industrial Trust (the "Company") acquired 122 industrial properties
in conjunction with its formation and commencement of operations on February 4,
1998. The Company acquired an additional 84 industrial properties during the
remainder of 1998.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
See attachments
(b) Pro Forma Financial Information.
See attachments
(c) Exhibits.
<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.
CABOT INDUSTRIAL TRUST
Date: March 22, 1999 By: /s/ Neil E. Waisnor
Neil E. Waisnor
Senior Vice President--Finance,
Treasurer and Secretary
<PAGE>
Cabot Industrial Trust
Pro Forma Condensed Combined Statement of Operations
(Unaudited)
The pro forma condensed combined statement of operations for the year ended
December 31, 1998 has been prepared to reflect (i) the contribution to Cabot
Industrial Trust ("Cabot Trust") of (A) the properties that were managed by
Cabot Partners Limited Partnership ("Cabot Partners", Cabot Trust's sponsor and
organizer) as of February 3, 1998 that were contributed to Cabot Trust in the
transactions that resulted in the formation of Cabot Trust (the "Formation
Transactions"), which commenced operations on February 4, 1998 (referred to
herein as the "Existing Investors Property Group"), (B) the properties that were
not managed by Cabot Partners as of February 3, 1998 that were contributed to
Cabot Trust in the Formation Transactions (referred to herein as the "New
Investors Property Group") and (C) a property sold by Cabot Trust during the
year ended December 31, 1998, (ii) the Other Formation Transactions described in
the Notes herein, (iii) the other properties acquired by Cabot Trust during the
year ended December 31, 1998 for which audited financial statements have been
prepared in accordance with Rule 3-14 of the SEC's Regulation S-X, and (iv)
certain other adjustments, as if each of such contributions, transactions and
adjustments had occurred on January 1, 1998.
In the opinion of management, the pro forma condensed combined statement of
operations includes all adjustments necessary to reflect the effects of the
foregoing contributions, transactions and adjustments. The pro forma statement
is unaudited and is not necessarily indicative of what the combined results of
Cabot Trust's operations would have been if the transactions and adjustments
reflected therein had been consummated on the dates indicated, or on any
particular date in the future, nor does it purport to represent the results of
operations of Cabot Trust as of any future date or for any future period.
The accompanying Pro Forma Condensed Combined Statement of Operations should be
read in conjunction with Cabot Trust's 1998 annual report on Form 10-K.
<PAGE>
Cabot Industrial Trust
Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 1998
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Existing New
Cabot Investors Investors Other
Industrial Cabot Property Property Property Formation
Trust Partners (B) Group (B) Group(A)(B) Sale (C) Transactions
-------------- ------------ --------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Rental $ 89,044 $ -- $3,849 $2,460 $ (785) $ 23 (J)
Tenant
reimbursements 13,381 -- 832 216 (167) --
Other -- -- 2 2 -- --
Advisory fee
income 231 2,542 -- -- -- (2,542)(E)
Advisory fee (241)(D)
income
associated
with the
Existing
Investors
Property
Group -- 241 -- -- --
Interest 889 -- 6 7 -- --
-------------- ------------ --------- ------------ ----------- ----------------
Total
Revenues 103,545 2,783 4,689 2,685 (952) (2,760)
-------------- ------------ --------- ------------ ----------- ----------------
Expenses
Real estate
taxes 11,843 -- 823 183 (174) --
Property
operating 6,579 -- 557 213 (18) (28) (D)
Advisory fees -- -- 173 91 -- (264) (D)
General and
administrative 6,815 603 -- -- -- (307) (D),(E)
Interest 7,009 -- 344 -- -- (193) (F)
Depreciation
and
amortization 20,913 853 1,040 622 (129) (29) (G),(H),(I)
-------------- ------------ --------- ------------ ----------- ----------------
Total
Expenses 53,159 1,456 2,937 1,109 (321) (821)
-------------- ------------ --------- ------------ ----------- ----------------
Net income
before sale
of
real estate
and Minority
Interest 50,386 1,327 1,752 1,576 (631) (1,939)
Gain on sale
of real
estate 572 -- -- -- (572) --
-------------- ------------ --------- ------------ ----------- ----------------
Net income
before
Minority
Interest 50,958 1,327 1,752 1,576 (1,203) (1,939)
Minority
Interest (29,192) -- -- -- 689 (10,079)
-------------- ------------ --------- ------------ ----------- ----------------
Net income $ 21,766 $1,327 $1,752 $1,576 $ (514) $(12,018)
============== ============ ========= ============ =========== ================
Net income
per
common share
Weighted
average
common shares
outstanding
<CAPTION>
Pre-
IPO
Cabot
Industrial IPO Cabot
Trust and Industrial
Pro Company Concurrent Trust
Forma Acquisitions(K) Placement Pro Forma
------------ --------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues
Rental $ 94,591 $5,434 $ -- $ 100,025
Tenant
reimbursements 14,262 989 -- 15,251
Other 4 7 -- 11
Advisory fee
income 231 -- -- 231
Advisory fee
income
associated
with the
Existing
Investors
Property
Group -- -- -- --
Interest 902 -- -- 902
------------ --------------- ------------- --------------
Total
Revenues 109,990 6,430 -- 116,420
------------ --------------- ------------- --------------
Expenses
Real estate
taxes 12,675 680 -- 13,355
Property
operating 7,303 596 -- 7,899
Advisory fees -- -- -- --
General and
administrative 7,111 -- 93 (L) 7,204
Interest 7,160 3,247 (M) (106) (F) 10,301
Depreciation
and
amortization 23,270 1,422 -- 24,692
------------ --------------- ------------- --------------
Total
Expenses 57,519 5,945 (13) 63,451
------------ --------------- ------------- --------------
Net income
before sale
of
real estate
and Minority
Interest 52,471 485 13 52,969
Gain on sale
of real
estate -- -- -- --
------------ --------------- ------------- --------------
Net income
before
Minority
Interest 52,471 485 13 52,969
Minority
Interest (38,582)(N) (278) 8,528 (30,332)
------------ --------------- ------------- --------------
Net income $ 13,889 $ 207 $8,541 $ 22,637
============ =============== ============= ==============
Net income
per
common share $ 1.22
============
Weighted
average
common shares
outstanding 18,586,764
============
</TABLE>
2
<PAGE>
Cabot Industrial Trust
Notes to Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 1998
(Unaudited)
(Dollars in thousands)
New Investors Property Group
(A) The New Investors Property Group is the combination of the financial
information for the following investors who contributed assets to Cabot Trust:
Orlando Central Park and 500 Memorial Drive
Knickerbocker Properties, Inc. II
Pennsylvania Public School Employes' Retirement System Industrial
Properties Portfolio
Prudential Properties Group
West Coast Industrial, LLC
The 4 B's
(B) Reflects actual operations for the period from January 1, 1998 through
February 3, 1998.
(C) Reflects the incremental effects of the sale of one property sold during
the year ended December 31, 1998.
Other Formation Transactions
(D) To eliminate advisory fee revenues of Cabot Partners and the related
advisory fee expense of the Existing Investors Property Group arising from
advisory contracts which were terminated as a part of the Formation Transactions
and to restate advisory fees paid by the New Investors Property Group to third
parties as general and administrative expenses of Cabot Trust using an estimate
of the cost to manage the real estate assets.
(E) To reflect the effects of establishing Cabot Trust's investment in Cabot
Advisors, Inc. ("Cabot Advisors") by reclassifying the associated revenues,
operating expenses and amortization expense for the period from January 1, 1998
through February 3, 1998. The pro forma operations of Cabot Advisors and Cabot
Trust's share Cabot Advisor's net income, based upon its 95% economic interest,
are as follows:
<TABLE>
<CAPTION>
-----------
January 1,
1998
through
February 3,
1998
-----------
<S> <C>
Advisory fee revenues $ 432
General and administrative expenses (343)
Amortization expense (89)
-----------
Income before income taxes --
Income tax (assumed effective tax rate of 40%) --
-----------
Net income --
-----------
Company's share of net income $ --
===========
</TABLE>
Advisory fee revenues consist of actual fees earned by Cabot Partners during the
period from January 1, 1998 through February 3, 1998 from the assets not owned
by the Existing Investors Property Group except that revenues related to
acquisitions and dispositions are excluded because such fees will no longer be
earned by Cabot Advisors.
3
<PAGE>
Cabot Industrial Trust
Notes to Pro Forma Condensed Combined Statement of Operations(Continued)
For the Year Ended December 31, 1998
(Unaudited)
(Dollars in thousands)
General and administrative expenses consist of direct and indirect costs
allocated by Cabot Trust to Cabot Advisors. Such indirect costs have been
allocated based upon the percentage of total assets expected to be managed by
Cabot Advisors. Costs related to acquisitions have been reclassed to general
and administrative costs of Cabot Trust, since acquisition activities will be
performed by Cabot Trust.
(F) To reflect the reduction of interest expense associated with the repayment
of mortgage debt with a portion of the net proceeds of Cabot Trust's initial
public offering (the "IPO") and the simultaneous private placement (the"
Concurrent Placement") and the conversion to equity of related party
indebtedness.
(G) To eliminate deferred loan cost amortization of $6 for the period from
January 1, 1998 through February 3, 1998 historically recognized by Existing
Investors Property Group.
(H) To eliminate the historical amortization for Cabot Partners' advisory
contracts which have been terminated as a result of a sale of the underlying
properties or as part of the Formation Transactions ($9 for the period from
January 1, 1998 through February 3, 1998).
(I) The depreciation adjustment for the period from January 1, 1998 through
February 3, 1998 includes the following:
<TABLE>
<S> <C>
---------
Issuance of 32,030,413 Common Shares and Units at $20.00 per Common Share/Unit to the $ 640,608
Contributing Investors for equity interests in real estate assets
Plus: Mortgage debt assumed 18,433
Other acquisition costs and liabilities assumed 8,713
Less: Historical net book value of Properties and other acquired assets (632,029)
---------
Cost of assets acquired in excess of historical book value 35,725
Less: Portion allocated to land estimated at 10% (3,573)
---------
$ 32,152
=========
Depreciation expense based on a weighted average estimated useful life of 40 years--
For the period from January 1, 1998 through February 3, 1998 $ 75
=========
</TABLE>
(J) To reflect the adjustment for the straight-line effect of scheduled rent
increases, assuming the transactions closed on January 1, 1998.
4
<PAGE>
Cabot Industrial Trust
Notes to Pro Forma Condensed Combined Statement of Operations(Continued)
For the Year Ended December 31, 1998
(Unaudited)
(Dollars in thousands)
Acquisitions during the year ended December 31, 1998 for which audited financial
statements have been prepared in accordance with Rule 3-14 of the SEC's
Regulation S-X.
(K) To reflect the operations and the depreciation expense for the period from
January 1, 1998 through the date of acquisition for the significant properties
acquired by Cabot Trust during the year ended December 31, 1998, as follows:
<TABLE>
<CAPTION>
Number of Square Acquisition
Property Location Buildings Building Type Feet Cost
- ----------------------- --------- ------------- ------ ------------
<S> <C> <C> <C> <C>
Grapevine, TX 2/1 Bulk Distribution/Workspace 1,182,361 $ 51,169
Mira Loma, CA,
Dacula, GA
Mechanicsburg, PA 3 Bulk Distribution 916,603 34,535
Mechanicsburg, PA 2 Bulk Distribution 494,400 17,948
San Diego, CA 1 Bulk Distribution 220,000 10,900
Orlando, FL 4 Workspace 213,430 11,054
Tucker, GA 3 Workspace 134,163 5,551
Atlanta, GA 2 Workspace 128,000 5,355
Florence, KY 2 Workspace 61,555 4,051
Tempe, AZ 1 Workspace 81,817 3,366
Mounds View, MN 1/3 Multitenant Distribution/Workspace 320,328 20,290
Ontario, CA 2 Multitenant Distribution 161,180 6,420
Huntington Beach, CA 1 Workspace 125,000 7,993
Phoenix, AZ 2/7 Bulk Distribution/Multitenant Distribution 1,040,373 36,200
Phoenix, AZ 1 Multitenant Distribution 201,600 6,811
------------ -------------- ---------------
38 5,280,810 $221,643
============ ============== ===============
</TABLE>
No operating income and depreciation expense for the period from January 1, 1998
through the date of acquisition have been reflected for property acquisitions
totaling $204,579 for which audited financial statements are not required.
Other Adjustments
(L) To reflect additional general and administrative expenses expected to be
incurred on an annual basis, as a result of reporting as a public company, as
follows:
<TABLE>
<S> <C>
--------
Legal, audit and tax services $ 350
Printing and mailing 350
Directors and officers insurance 100
Investor relations 50
Other 150
--------
Totals $1,000
========
For the period from January 1, 1998 through
February 3, 1998 $ 93
========
</TABLE>
(M) To recognize interest expense associated with the assumption of $34,517 of
debt and the assumed borrowings under the Acquisition Facility necessary for the
property acquisitions discussed in Note K.
(N) Adjusted to reflect the minority interest in Cabot Trust prior to the sale
of common shares in the FPO and Concurrent Placement.
5
<PAGE>
Cabot Industrial Trust
Notes to Pro Forma Condensed Combined Statement of Operations--(Continued)
For the Year Ended December 31, 1998
(Unaudited)
(Dollars in thousands)
Pro Forma Condensed Combined Statement of Operations Adjustment Summary:
<TABLE>
<CAPTION>
Note D Note D Note E Note G
------------------- ------------------ ---------------- ----------------
Eliminate Related Restate Establish
Advisory Fee Advisory Cabot Trust's Eliminate
Revenue Fees Paid by the Investment in Deferred Loan
and Expenses New Investors Cabot Advisors Cost Amortization
------------------- ------------------ ---------------- -----------------
<S> <C> <C> <C> <C>
Advisory fee income $ $ $ $(2,542)
Advisory fee income associated with
the Existing Investors Property
Group (241)
Operating expenses 28
Advisory fees 173 91
General and Administrative 40 (76) 343
Depreciation and amortization 89 6
<CAPTION>
Note H Note I
----------------------- ------------------
Eliminate
Historical
Amortization of
Cabot Partners Depreciation
Advisory Contracts Adjustment Total
----------------------- ------------------ -----------
<S> <C> <C> <C>
Advisory fee income $ $ $(2,542)
Advisory fee income associated with
the Existing Investors Property
Group (241)
Operating expenses 28
Advisory fees 264
General and Administrative 307
Depreciation and amortization 9 (75) 29
</TABLE>
6
