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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
APRIL 20, 1998
Date of report (Date of
earliest event reported)
WILSHIRE REAL ESTATE INVESTMENT TRUST INC.
(Exact name of registrant as specified in its charter)
MARYLAND 0-23911 52-2081138
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(State or other Commission File Number (I.R.S. Employer
jurisdiction of Identification Number)
incorporation)
1776 SW MADISON STREET, PORTLAND, OR97205
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(Address of principal executive offices)(Zip Code)
(503) 223-5600
Registrant's telephone number, including area code
NOT APPLICABLE
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(Former name or former address, if changed since
last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
This Current Report on Form 8-K/A amends the Current Report on Form 8-K
filed by Wilshire Real Estate Investment Trust Inc. (the "Company") on September
29, 1998. It provides the pro forma financial information for acquisition of
properties from G.I. Joe's, Inc., an unaffiliated third party.
As previously reported, on April 20, 1998, the Company acquired five
(5) retail buildings and an office complex/warehouse/distribution center,
totaling 444,864 square feet, from G.I. Joe's, Inc. The purchase price was
approximately $28.5 million. A portion of the purchase was financed through a
mortgage loan in the amount of approximately $21.0 million from Credit Suisse
First Boston Mortgage Capital LLC.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) The lessee (G.I. Joe's, Inc.) will not provide certain financial
statements to the Company for its use in this Form 8-K/A. If and when
the applicable financial statements become available to us, we will
file them on Form 8-K/A.
The annual financial statements and certain interim financial
statements of G.I. Joe's, Inc. are on file with the Securities and
Exchange Commission as part of a Form S-1/A filing on November 12,
1998.
(b) Pro forma financial information related to the acquisition of the
properties listed under Item 2 is attached hereto and
incorporated herein by reference, as Exhibit 99.1.
(c) Exhibits.
99.1 Pro forma financial information.
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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.
WILSHIRE REAL ESTATE
INVESTMENT TRUST INC.
Date: January 11, 1999 By: /s/ Lawrence A. Mendelsohn
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Lawrence A. Mendelsohn
President
By: /s/ Chris Tassos
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Chris Tassos
Executive Vice President and
Chief Financial Officer
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EXHIBIT 99.1
WILSHIRE REAL ESTATE INVESTMENT TRUST INC.
PRO FORMA FINANCIAL INFORMATION - NARRATIVE FORMAT
The following unaudited pro forma financial information of Wilshire Real
Estate Investment Trust Inc. ("WREIT" or the "Company") gives effect to the
acquisition and subsequent lease-back of properties from/to G.I. Joe's, Inc., as
if the transaction occurred as of January 1, 1997 with respect to the unaudited
pro forma operating information and as of September 30, 1998 with respect to the
unaudited pro forma financial condition information.
The unaudited pro forma financial information is not necessarily indicative
of the results that might have been achieved by WREIT if the acquisition had
been consummated as of the indicated dates. The unaudited pro forma financial
information should be read in conjunction with the historical consolidated
financial statements of WREIT, together with the related notes thereto, which
were filed November 23, 1998 on Form 10-Q for the period ended September 30,
1998.
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On April 20, 1998, Wilshire Real Estate Investment Trust Inc. (the
"Company") acquired five (5) retail buildings and an office
complex/warehouse/distribution center, totaling 444,864 square feet, from G.I.
Joe's, Inc., an unaffiliated third party. The purchase price was approximately
$28.5 million. Approximately $7.5 million of the purchase price was provided in
cash from the Company's initial public offering of common stock. The source of
the balance of the purchase price was a mortgage loan in the amount of
approximately $21.0 million from Credit Suisse First Boston Mortgage Capital
LLC. The purchase price was determined through arms length negotiations between
the Company and G.I. Joe's, Inc. The retail buildings are located in Salem, Oak
Grove, Lake Oswego and Gresham, all in the State of Oregon. The
office/warehouse/ distribution center is located in Wilsonville, Oregon. All of
the buildings are leased to G.I. Joe's, Inc. on competitive market rents under
fifteen year leases ending in April 2013. G.I. Joe's subleases 29,952 square
feet in Salem to Office Depot, Inc. The land at the Gresham location is under a
50- year ground lease (expiration in year 2037) with five (5) 10-year options
between G.I. Joe's and Gresham RPR Associates, an unaffiliated entity. A 10.90
acre tract available for future development by the Company is adjacent to the
office complex/warehouse/distribution center.
As this transaction was completed as of September 30, 1998 and the
properties and related financing have been included in the statement of
financial condition at September 30, 1998, the pro forma effect of this
transaction would not be material. As such, the pro forma effect of this
transaction on the September 30, 1998 consolidated statement of financial
condition would only have resulted in an increase in total assets of $0.3
million due
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to income provided by operations of the properties, offset in part, by
depreciation of the properties. Liabilities and stockholders' equity would have
increased by $0.3 million due to the pro forma effect of adjusting retained
earnings for the net lease income, offset in part, by repayments of principal on
the mortgage loan.
Additionally, the pro forma effect of this acquisition to the consolidated
operations of the Company for the year ended December 31, 1997 and nine months
ended September 30, 1998 would be as follows:
o Increase in real estate operations income by $0.8 million and $0.6
million for the year ended December 31, 1997 and the nine months ended
September 30, 1998, respectively.
o Increase in management fee expenses by $0.3 million and $0.2 million
for the year ended December 31, 1997 and the nine months ended
September 30, 1998, respectively.
o Increase in net income for the year ended December 31, 1997 by $0.5
million. Basic and diluted earnings per share would have increased by
$0.04.
o Increase in net income for the nine months ended September 30, 1998 by
$0.4 million. Basic and diluted earnings per share would have increased
by $0.03.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. All of the statements
contained in this report which are not identified as historical should be
considered forward-looking. In connection with certain forward-looking
statements contained in this report and those that may be made in the future by
or on behalf of the Company which are identified as forward-looking, the Company
notes that there are various factors that could cause actual results to differ
materially from those set forth in any such forward-looking statements. Such
factors include but are not limited to, the real estate market, the availability
of real estate assets at acceptable prices, the availability of financing,
interest rates, and European expansion. Accordingly, there can be no assurance
that the forward-looking statements contained in this report will be realized or
that actual results
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will not be significantly higher or lower. The forward-looking statements have
not been audited by, examined by, or subjected to agreed-upon procedures by
independent accountants, and no thirdparty has independently verified or
reviewed such statements. Readers of this report should consider these facts in
evaluating the information contained herein. The inclusion of the forward-
looking statements contained in this report should not be regarded as a
representation by the Company or any other person that the forward-looking
statements contained in this report will be achieved. In light of the foregoing,
readers of this report are cautioned not to place undue reliance on the
forward-looking statements contained herein.
