<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTION OF 1934
For the Quarter ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-2809
WESTERN INVESTMENT REAL ESTATE TRUST
-------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-6100058
- ------------------------------ -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3450 CALIFORNIA STREET, SAN FRANCISCO, CA 94118
- ----------------------------------------- -------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 929-0211
------------------------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
---- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the end of the period covered by this report.
Shares of Beneficial Interest, No Par Value - 17,134,099 shares as of
June 30, 1996
1
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
INDEX TO 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (unaudited)
Balance Sheets - June 30, 1996 and December 31, 1995 3
Statements of Income - Three and six months ended
June 30, 1996 and 1995
4
Statements of Shareholders' Equity - Six months ended
June 30, 1996 and year ended December 31, 1995 5
Statements of Cash Flows - Six months ended June 30, 1996 6
and 1995
Notes to Financial Statements 7 - 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 14
PART II. OTHER INFORMATION 15 - 16
SIGNATURE 17
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WESTERN INVESTMENT REAL ESTATE TRUST
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
1996 1995
---------------------------
(In thousands)
<S> <C> <C>
Real estate investments:
Real estate owned .............................. $399,053 $395,800
Less accumulated depreciation and amortization.. (66,427) (61,249)
--------- --------
Net real estate investments.................... 332,626 334,551
Cash and cash equivalents.......................... 691 657
Accounts receivable and other assets............... 6,641 6,868
Deferred long-term debt issuance costs, net........ 2,321 2,495
-------- --------
$342,279 $344,571
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank line of credit................................ $ 30,025 $ 29,250
Convertible debentures............................. 61,364 63,433
Senior notes, net.................................. 49,889 49,882
Real estate loan payable........................... 1,257 1,294
-------- --------
142,535 143,859
Interest payable................................... 1,489 1,641
Prepaid rents and security deposits................ 1,170 1,320
Other liabilities.................................. 1,138 952
-------- --------
Total liabilities................................ 146,332 147,772
-------- --------
Shareholders' equity:
Shares of beneficial interest, no par value,
unlimited share authorization.
Issued and outstanding:
June 30, 1996 - 17,134,099 shares;
December 31, 1995 - 16,972,496 shares........... 242,002 240,034
Accumulated dividends in excess of net income.... (46,055) (43,235)
--------- ---------
Commitments and contingencies (Note E)
Total shareholders' equity....................... 195,947 196,799
-------- --------
$342,279 $344,571
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
3
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
REVENUES:
Minimum rents................................... $9,597 $9,396 $19,136 $18,376
Percentage rents................................ 186 128 340 266
Recoveries from tenants......................... 2,029 1,973 3,312 3,156
Other income.................................... 214 92 409 281
------ ------ ------ ------
Total revenues.................................... 12,026 11,589 23,197 22,079
------ ------ ------ ------
------ ------ ------ ------
EXPENSES:
Interest..................................... 2,817 2,924 5,660 5,823
Property operating costs..................... 2,445 2,336 4,039 3,947
Depreciation and amortization................ 2,820 2,715 5,567 5,396
Other operating expenses..................... 646 711 1,339 1,417
General and administrative................... 461 473 939 905
------ ------ ------ ------
Total expenses................................. 9,189 9,159 17,544 17,488
------ ------ ------ ------
Income from operations....................... 2,837 2,430 5,653 4,591
------ ------ ------ ------
Gains on sales of real estate investments...... 1,032 -- 1,032 --
------ ------ ------ ------
Net income................................... $3,869 $2,430 $6,685 $4,591
------ ------ ------ ------
Per share data:
Income from operations....................... $0.167 $0.145 $0.333 $0.274
------ ------ ------ ------
Gains on sales of real estate investments.... $0.061 $ -- $0.061 $ --
------ ------ ------ ------
Net income................................... $0.228 $0.145 $0.394 $0.274
------ ------ ------ ------
Cash dividends paid.......................... $ 0.28 $ 0.28 $ 0.56 $ 0.56
------ ------ ------ ------
Weighted average number of shares
outstanding.................................. 16,972,496 16,771,742 16,972,496 16,757,419
---------- ---------- ---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Shareholders' Equity
(Unaudited)
Six Months Ended June 30, 1996 and
Year Ended December 31, 1995
(In thousands, except share data)
<TABLE>
<CAPTION>
Accumulated
Shares of Dividends Total
Beneficial Interest in Excess Share-
------------------- of Net Holders'
Number Amount Income Equity
------ ----- ------ -------
<S> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1995.............. 16,734,532 $237,341 $(34,657) $202,684
Net proceeds from issuance of shares.. 43,575 514 -- 514
Debenture redemptions................. 194,389 2,179 -- 2,179
Net income............................ -- -- 10,304 10,304
Cash dividends paid................... -- -- (18,882) (18,882)
---------- --------- -------- -------
BALANCE, DECEMBER 31, 1995............ 16,972,496 240,034 (43,235) 196,799
Debenture redemptions................. 161,603 1,968 -- 1,968
Net income............................ -- -- 6,685 6,685
Cash dividends paid................... -- -- (9,505) (9,505)
---------- --------- --------- ---------
BALANCE, JUNE 30, 1996................ 17,134,099 $242,002 $(46,055) $195,947
---------- --------- --------- ---------
---------- --------- --------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------
1996 1995
--------- ---------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 6,685 $ 4,591
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization........................... 5,567 5,396
Amortization of deferred debt issuance costs............ 190 198
Gains on sales of real estate investments............... (1,032) --
Decrease in accounts receivable and other assets........ 527 570
Increase in deferred rent receivable.................... (320) (493)
Decrease in interest payable............................ (152) (20)
Increase in prepaid rents and security deposits
and other liabilities.................................. 15 123
--------- ---------
Net cash provided by operating activities............... 11,480 10,365
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of real estate investments............ 1,262 --
Acquisitions of real estate investments................... -- (3,357)
Improvements of real estate investments:
Build-to-suit developments.............................. (3,222) (281)
New leases.............................................. (739) (1,063)
General................................................. (71) (139)
Recovery of investment in direct financing leases......... 131 114
--------- ---------
Net cash used in investing activities................... (2,639) (4,726)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances on bank line of credit........................... 21,368 20,200
Principal payments on bank line of credit................. (20,593) (16,845)
Principal payments on real estate loan payable............ (37) (33)
Redemption of convertible debentures...................... (40) --
Net proceeds from issuance of shares...................... -- 335
--------- ---------
Cash dividends paid....................................... (9,505) (9,382)
--------- ---------
Net cash used in financing activities................... (8,807) (5,725)
--------- ---------
Net increase (decrease) in cash and cash equivalents.... 34 (86)
Cash and cash equivalents, at the beginning of the period... $ 657 $ 648
--------- ---------
--------- ---------
Cash and cash equivalents, at the end of the period......... $ 691 $ 562
--------- ---------
--------- ---------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest.................. $ 5,712 $ 5,646
--------- ---------
--------- ---------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
WESTERN INVESTMENT REAL ESTATE TRUST
Notes to Financial Statements
June 30, 1996
(Unaudited)
Note A: BASIS OF PRESENTATION
The financial statements included in this report have been prepared pursuant to
the rules of the Securities and Exchange Commission. Certain information and
footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules. Interim results are not necessarily indicative
of results for a full year.
It is suggested that these financial statements be read in conjunction with the
audited financial statements and notes thereto included in the Trust's latest
annual report on Form 10-K. When necessary, reclassifications have been made to
prior period balances to conform to current period presentation.
Note B: REAL ESTATE INVESTMENTS
At June 30, 1996, the Trust owned 60 income producing properties, totaling 4.8
million leasable square feet. Included in this total are four properties which
are being held for sale and total 83,000 leasable square feet with a combined
net book value of $1.7 million.
In April, 1996 the Trust sold its Redwood City, California property (a
restaurant) for $733,000. The Trust recognized a gain on sale of approximately
$560,000.
In June, 1996 the Trust sold its Santa Rosa, California, property (a convenience
store) for $725,000. The Trust recognized a gain on sale of approximately
$470,000.
The proceeds from the above two sales were used to partially pay down the bank
line of credit.
7
<PAGE>
Occupancy percentages for the Trust's portfolio as of June 30, 1996, December
31, 1995 and June 30, 1995 are as follows:
<TABLE>
June 30, 1996 December 31, 1995 June 30, 1995
------------- ----------------- -------------
<S> <C> <C> <C>
Retail 93.3% 93.8% 92.9%
Commercial 98.2% 93.1% 93.1%
Industrial 100.0% 100.0% 100.0%
Overall Occupancy 93.6% 93.9% 93.1%
</TABLE>
Note C: CAPITAL EXPENDITURES
It is the Trust's practice to capitalize certain costs which exceed $4,000 and
are associated with improvement and rental of real estate investments.
Capitalized costs include third party leasing commissions, tenant improvements
and common area improvements. Capital expenditures for the three and six months
ended June 30, 1996 and 1995 are as follows:
<TABLE>
Quarter Ended Six Months Ended
June 30, June 30,
--------------- ----------------
1996 1995 1996 1995
--------------- ----------------
(In thousands)
<S> <C> <C> <C> <C>
"Build to Suit" capital improvements................. $1,728 $ 72 $3,222 $ 281
Capitalized costs incurred in
connection with leasing previously UNLEASED space.. 9 15 53 32
Capitalized costs incurred in connection
with leasing previously LEASED space............... 350 368 686 1,031
Capitalized costs which relate to
improvements to common areas ...................... 69 46 71 139
------ ------ ------ ------
Total Capitalized expenditures....................... $2,156 $ 501 $4,032 $1,483
------ ------ ------ ------
------ ------ ------ ------
Improvements......................................... $2,101 327 3,914 $1,235
Leasing commissions.................................. 55 174 118 248
------ ------ ------ ------
Total Capitalized expenditures....................... $2,156 $ 501 $4,032 $1,483
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
The Trust's in-house leasing department costs, including related legal and
accounting costs, are expensed as incurred.
8
<PAGE>
Leasing commissions and tenant improvement costs incurred during the three
months ended June 30, 1996, relate entirely to new leases in the shopping center
and retail portion of the Trust's portfolio, and consist of the following:
<TABLE>
CAPITALIZED EXPENDITURES ASSOCIATED WITH NEW LEASES
PER PER
AGGREGATE SQUARE AGGREGATE SQUARE
AMOUNT FOOT AMOUNT FOOT
--------- ------ --------- -----
<S> <C> <C> <C> <C> <C> <C>
SHOPPING
CENTERS Tenant Leasing
& RETAIL Improvements $344,865 $9.74 Commissions $ 27,244 $2.31
PROPERTIES
</TABLE>
Note D: DEFERRED RENTAL RECEIVABLE
The Trust recognizes income from deferred rental receivable in accordance with
FAS 13. Deferred rental receivable recognized as income was $165,000 and
$319,000 for the quarter ended June 30, 1996 and 1995, respectively.
Deferred rental receivable recognized as income for the six-month period ended
June 30, 1996 and 1995 was $320,000 and $493,000, respectively.
Note E: CONVERTIBLE DEBENTURES
On June 30, 1996, $2,029,000 of the Trust's convertible debentures were redeemed
in accordance with the limited mandatory redemption provisions of the
convertible debentures. The Trust elected to exchange these debentures for
161,603 shares of beneficial interest. Net of the convertible debentures
deferred issuance costs of $61,000, shareholders' equity increased by $1,968,000
as a result of the redemptions.
During the quarter ended June 30, 1995, $1,985,000 of the Trust's convertible
debentures were redeemed in accordance with the limited mandatory redemption
provisions of the convertible debentures. The Trust elected to exchange these
debentures for 172,077 shares of beneficial interest. Net of the convertible
debentures deferred issuance costs of $66,000, shareholders' equity increased by
$1,919,000 as a result of the redemptions.
9
<PAGE>
Note F: DIVIDEND REINVESTMENT PLAN
During the quarter ended June 30, 1996, in accordance with the Trust's Dividend
Reinvestment Plan, $188,000 in dividends and shareholders' additional cash
payments were used to purchase shares in the open market for the participating
shareholders.
During the quarter ended June 30, 1995, in accordance with the Trust's Dividend
Reinvestment Plan, the Trust received $169,000 in dividends and shareholders'
additional cash payments and issued 14,471 shares of beneficial interest.
Note G: FUNDS FROM OPERATIONS
The Trust considers Funds From Operations to be an alternate measure of the
performance of an equity REIT since such measure does not recognize depreciation
and amortization of real estate assets as operating expenses. Historical cost
accounting for real estate assets implicitly assumes that the value of real
estate assets diminishes predictably over time. Yet, since real estate values
have historically risen or fallen with market conditions, the Trust, along with
most industry investors, have considered presentations of operating results for
real estate companies that use historical cost accounting to be less than fully
informative.
The National Association of Real Estate Investment Trusts (NAREIT) defines
Funds From Operations as net income plus depreciation and amortization of
real estate assets, less gains and losses on sales of property. Funds From
Operations does not represent cash flows from operations as defined by
generally accepted accounting principles and should not be considered a
substitute for net income as an indicator of the Trust's operating
performance or for cash flows as a measure of liquidity.
Funds From Operations, calculated in accordance with NAREIT's 1995 guidelines,
for the three months and six months ended June 30, 1996 and 1995, respectively,
is as follows:
<TABLE>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
------- -------
1996 1995 1996 1995
----------------- ------------------
<S> <C> <C> <C> <C>
Net Income $ 3,869 $ 2,430 $ 6,685 $ 4,591
Less: Gains on sales of
real estate investments (1,032) -- (1,032) --
Plus: Real property depreciation 2,463 2,444 4,932 4,872
Amortization of tenant
improvement costs 249 140 421 282
Amortization of leasing
commissions costs 83 96 162 165
------- ------- ------- -------
Funds From Operations $ 5,632 $ 5,110 $11,168 $ 9,910
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
10
<PAGE>
Note H: RECENT DEVELOPMENTS
On August 1, 1996, the Trust paid the remaining balance outstanding on the
Trust's only borrowing secured by real estate. The real estate loan carried
a 9.63% fixed interest rate, was secured by the shopping center located in
Coalinga, California and had an outstanding balance of $1.3 million. The
Trust incurred a prepayment fee of $25,000 and the payoff was funded by an
advance on the bank line of credit. The weighted average interest rate on
the variable rate bank line of credit as of June 30, 1996 was 7.24%.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Certain statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations constitute "forward-looking" statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such "forward-looking" statements are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance, or achievements of the Trust to be materially different from any
future results, performance, or achievements expressed or implied by such
"forward-looking" statements.
LIQUIDITY AND CAPITAL RESOURCES
The Trust anticipates that cash flows provided by operations and other
sources available to the Trust will continue to provide adequate funds for
all current principal and interest payments as well as dividend payments in
accordance with REIT qualification requirements. Cash on hand, borrowings
under the existing bank line of credit, as well as other debt and equity
alternatives, will provide the necessary funds to achieve future growth. As
of June 30, 1996, the Trust had only one loan secured by one of its
properties. This loan was paid off on August 1, 1996 (see Note H: RECENT
DEVELOPMENTS). Additionally, the Trust has an interest in two properties
where the co-owner is obligated under a note that is secured by the property.
The Trust's indenture executed in connection with the Trust's senior notes and
bank line of credit contain certain covenants (including minimum shareholders'
equity, maximum ratio of debt to net worth and income coverage requirements)
which impose certain limitations on the incurrence of debt and other
restrictions.
On April 26, 1996, the Trust obtained a two-year unsecured $45 million bank line
of credit which replaces its previous $60 million facility. The Trust elected
to lower the commitment amount on the bank line of credit from $60 million to
$45 million in order to avoid paying a commitment fee on the portion of the line
of credit the Trust does not intend to use. The $45 million facility can be
used to fund acquisitions and other cash requirements. The interest rate under
the facility is either LIBOR plus 1.6% or the participating banks' reference
rate, at the Trust's election. The bank line of credit expires May 31, 1998, at
which time the Trust intends to replace or renew it. The weighted average
interest rate on June 30, 1996 and 1995 was 7.24% and 7.89%, respectively.
As of June 30, 1996, the Trust had commitments under several new leases which
call for approximately $1.7 million in future real estate improvements and
leasing commissions. These expenditures will be paid from operating cash flows
and borrowings under the line of credit.
12
<PAGE>
FUNDS FROM OPERATIONS
The Trust considers Funds From Operations to be an alternate measure of the
performance of an equity REIT since such measure does not recognize depreciation
and amortization of real estate assets as operating expenses. Historical cost
accounting for real estate assets implicitly assumes that the value of real
estate assets diminishes predictably over time. Yet, since real estate values
have historically risen or fallen with market conditions, the Trust, along with
most industry investors, have considered presentations of operating results for
real estate companies that use historical cost accounting to be less than fully
informative.
The National Association of Real Estate Investment Trusts (NAREIT) defines Funds
From Operations as net income plus depreciation and amortization of real estate
assets, less gains and losses on sales of property. Funds From Operations does
not represent cash flows from operations as defined by generally accepted
accounting principles and should not be considered a substitute for net income
as an indicator of the Trust's operating performance or for cash flows as a
measure of liquidity.
Funds From Operations (1995 NAREIT definition) increased $522,000, or 10%, to
$5,632,000 for the three months ended June 30, 1996, from $5,110,000 for the
comparable period in 1995. The major components of this increase are increased
minimum rents and other income and decreased interest expense.
For the six-month period ended June 30, 1996, Funds From Operations increased
$1,258,000, or 13%, to $11,168,000, from $9,910,000 for the comparable period in
1995. Increased minimum rents and other income as well as decreased interest
expense comprise the major factors for this FFO growth.
RESULTS OF OPERATIONS
COMPARISON OF QUARTER ENDED JUNE 30, 1996 AND 1995
Net income increased $1,439,000, or 59%, to $3,869,000 or $0.23 per share, from
$2,430,000 or $0.15 per share for the comparable period in 1995. The major
component of this increase is the gain on the sale of two properties during the
second quarter. Other significant components are increased minimum rents and
other income and decreased interest expense, partially offset by increased
depreciation and amortization.
Minimum rents increased $201,000 or 2%, to $9,597,000 for the three months ended
June 30, 1996, from $9,396,000 for the comparable period in 1995. This increase
results from increased revenue under existing leases and increased occupancy
both in the commercial and retail/shopping center portfolios.
13
<PAGE>
Other income increased $122,000 to $214,000 for the quarter ended June 30, 1996,
from $92,000 a year earlier. This increase primarily reflects termination fees
received from tenants in four retail spaces. To date, the Trust has entered
into new leases for three of the four spaces.
Interest expense decreased 4% to $2,817,000 for the quarter ended June 30, 1996
from $2,924,000 for the three-month period ended June 30, 1995. This $107,000
decrease results from lower interest rates charged on the Trust's variable rate
bank line of credit and lower balances on the Trust's convertible debentures,
offset by higher outstanding balances under the bank line of credit.
Depreciation and amortization increased $105,000 during the quarter ended June
30, 1996 to $2,820,000, a 4% increase over the 1995 figure of $2,715,000. This
increase results primarily from increased capitalized expenditures for tenant
improvements due, in large part, from new leases.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Net income increased $2,094,000, or 46%, to $6,685,000, or $0.39 per share, from
$4,591,000, or $0.27 per share, for the comparable period in 1995. The gains
recorded on the sale of two properties comprises approximately one-half, or
$0.06 per share, of this increased net income. Other factors include increased
minimum rents, other income and decreased interest expense, partially offset by
increased depreciation and amortization.
Minimum rents increased 4%, or $760,000, to $19,136,000 for the six months ended
June 30, 1996, as compared with $18,376,000 recorded a year earlier. Similar to
the second quarter's results, increased minimum rents reflect increased revenue
under existing leases and increased occupancy in both the commercial and
retail/shopping center portfolios.
Other income increased $128,000 from $281,000 for the six-month period ending
June 30, 1995 to $409,000 for the same period in 1996. This increase primarily
reflects termination fees received from tenants in seven retail spaces. To
date, the Trust has entered into new leases for three of the seven spaces.
Interest expense decreased $163,000 from the six-month period ending June 30,
1995 of $5,823,000 to $5,660,000 in the comparable 1996 period. The main
factors in this 3% decrease are lower interest rates charged on the Trust's
variable rate bank line of credit and lower outstanding balances on the Trust's
convertible debentures, partially offset by higher outstanding balances under
the bank line of credit for the six-month period ending June 30, 1996 as
compared with the six-month period ending June 30, 1995.
Depreciation and amortization for the six months ending June 30, 1996 was
$5,567,000, a 3% or $171,000 increase over 1995's comparable period figure of
$5,396,000. This increase results primarily from increased capitalized
expenditures for tenant improvements due, in large part, from new leases.
14
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 3. None
Item 4. Submission of Matters to a Vote of Security Holders
At the regular Annual Meeting of Shareholders of Western Investment
Real Estate Trust, held on May 9, 1996, the following were submitted
to a vote of security holders:
(a) The election of the following trustees to serve for a term of
three years expiring at the conclusion of the 1999 annual
meeting of shareholders: James L. Stell, O. A. Talmage and
William A. Talmage.
James L. Stell: Approved - 15,344,205 shares were voted in
favor and 271,651 shares withheld authority to vote.
O. A. Talmage: Approved - 15,256,039 shares were voted in favor
and 359,817 shares withheld authority to vote.
William A. Talmage: Approved - 15,262,555 shares were voted in
favor and 353,301 shares withheld authority to vote.
(b) Ratification of the appointment of KPMG Peat Marwick LLP,
independent certified public accountants, as the Trust's
auditors for the year ending December 31, 1996.
Approved - 15,468,745 shares were voted in favor. 52,595 shares
were voted against, and 94,516 shares abstained from voting.
Item 5. None
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits
(numbered in accordance with Item 601 of Regulation S-K)
(3) Declaration of Trust, as amended (filed as Exhibit 3.1
to Registration Statement on Form S-3 No. 33-22893 and
incorporated herein by reference).
(4.1) Form of Indenture relating to the 8% Convertible
Debentures (filed as Exhibit 4.1 to Registration
Statement on Form S-3 No. 33-22893 and incorporated
herein by reference).
15
<PAGE>
(4.2) Form of Indenture relating to the Senior Notes (filed
as Exhibit 4.1 to Registration Statement on Form S-3
No. 33-71270 and incorporated herein by reference).
(4.3) Form of Senior Notes (filed as Exhibit 4.2 to
Registration Statement on Form S-3 No. 33-71270 and
incorporated herein by reference).
(10.1)* Trust's Nonqualified Stock Option Plan (filed as
Exhibit 4.2 to Registration Statement on Form S-8
No. 33-27016 and incorporated herein by reference).
(10.2)* Trust's Trustee Emeritus Plan (filed as an Exhibit to
Proxy dated Statement dated March 25, 1986 and
incorporated herein by reference).
(b) Reports on Form 8-K.
None.
* Management contract or compensatory plan or arrangement.
16
<PAGE>
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 thereunto duly authorized.
WESTERN INVESTMENT REAL ESTATE TRUST
------------------------------------
(Registrant)
By: /s/ Dennis D. Ryan
---------------------------------
Dennis D. Ryan
Executive Vice President,
Chief Financial Officer
and Trustee
Dated: August 7, 1996
--------------------------
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
BALANCE SHEET AT JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 691
<SECURITIES> 0
<RECEIVABLES> 0<F1>
<ALLOWANCES> 0<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 399053
<DEPRECIATION> 66427
<TOTAL-ASSETS> 342279
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 142535
0
0
<COMMON> 242002
<OTHER-SE> (46055)<F3>
<TOTAL-LIABILITY-AND-EQUITY> 342279
<SALES> 0
<TOTAL-REVENUES> 23197
<CGS> 0
<TOTAL-COSTS> 5378<F4>
<OTHER-EXPENSES> 6506<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5660
<INCOME-PRETAX> 6685
<INCOME-TAX> 0
<INCOME-CONTINUING> 6685
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6685
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.39<F6>
<FN>
<F1>AMOUNT INSIGNIFICANT
<F2>BALANCE SHEET IS NOT CLASSIFIED
<F3>AMOUNT REPRESENTS ACCUMULATED DIVIDENDS IN EXCESS OF NET INCOME
<F4>AMOUNT COMPRISED OF PROPERTY OPERATING COST ($4,039) AND OTHER OPERATING
EXPENSES ($1,339)
<F5>AMOUNT COMPRISED OF DEPRECIATION EXPENSE ($5,567) AND GENERAL AND
ADMINISTRATIVE EXPENSE ($939)
<F6>EXERCISE OF THE OUTSTANDING STOCK OPTIONS WOULD NOT HAVE MATERIAL EFFECT ON
EARNINGS PER SHARE
</FN>
</TABLE>
