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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
December 6, 2000
Date of Report
T REIT, INC.
(Exact name of registrant as specified in its charter)
Virginia 333-77229 52-2140299
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
1551 N. Tustin Avenue
Suite 650
Santa Ana, California 92705
(Address of principal executive offices)
(877) 888-7348
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
PROPERTY ACQUISITIONS
Thousand Oaks Center - San Antonio, Texas
On December 6, 2000, T REIT L.P., a Virginia limited partnership, whose
general partner is T REIT, Inc. purchased Thousand Oaks Center. The property was
purchased from CMF Capital Company, L.L.C., a Delaware limited liability
company, and a subsidiary of GE Capital Real Estate, under an Agreement for
Purchase and Sale Agreement dated October 26, 2000. The seller was not an
affiliate of our company or our advisor. We paid a total of $13,000,000 for this
property. In addition, we paid approximately $9,732 for acquisition expenses
such as attorneys' fees, recording fees and other closing costs, which
represents $.06 per square foot of leasable space.
In connection with the purchase of Thousand Oaks Center, Fair Oak, LLC, a
Delaware limited liability company provided a short-term acquisition loan in the
amount of $10,837,500. The promissory note evidencing the loan provides that the
Company shall pay to the lender interest only accrued at the Contract Rate Index
(as hereinafter defined) for the period from the date hereof through and
including December 31, 2000. Beginning February 1, 2001 and continuing through
June 1, 2001, the Company shall pay to lender interest only accrued at the
Contract Index Rate for the preceding calendar month on the first day of each
month. A final payment of the principal amount of the Note, together with all
accrued but unpaid interest thereon, late charges, if any, shall be paid on June
4, 2001.
The promissory note evidencing the loan provides for monthly interest only
payments commencing January 1, 2001, at a rate of 3.5% over the GECC Composite
Commercial Paper Rate, currently 6.47%. The note is due and payable in June,
2001 and is prepayable without penalty in whole or in part upon 10 days prior
written notice. The note is secured by a first mortgage on the property. There
are no loan fees or similar costs attached with the loan. The loan may not be
assumed by any future purchaser.
Under the terms of the note, the GECC Composite Commercial Paper Rate is
the average interest expense on the principal amount of the GECC Composite
Commercial Paper outstanding for General Electric Capital Corporation's full
fiscal month preceding the interest billing month. Fair Oaks will determine the
GECC Composite Commercial Paper Rate and evidence the rate by a certificate
issued by an authorized employee of Fair Oak.
GECC Composite Commercial Paper is General Electric Capital Corporation's
outstanding commercial paper for terms of 12 months or less from sources within
the United States but excluding the current portion of General Electric Capital
Corporation's long term debt and its borrowings and interest expense. Average
interest expense is the percentage obtained by dividing the interest expense on
the GECC Composite Commercial Paper for the current fiscal month by the average
daily principal amount of GECC Composite Commercial Paper outstanding during
that fiscal month divided by the actual number of days in the fiscal month and
multiplied by the actual number of days in the calendar year.
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The purchase of the property was unanimously approved by our board of
directors, including our independent directors.
Thousand Oaks Center is a Class "A' neighborhood center, located in San
Antonio, Texas, containing 162,864 net rentable square feet. As of December 6,
2000, Thousand Oaks Center was anchored by H.E.B. Food Store and approximately
89% occupied with numerous other national tenants, including Bealls Department
Store, Blockbuster Video, Taco Cabana, Papa John's Pizza, GNC, Fantastic Sam's,
and Factory 2U, as well as various local tenants. Approximately 75% of the
leases will expire during the next five years. The center is anchored by H.E.B.
Food Store
Thousand Oaks Center is located at 2915 Thousand Oaks Drive at the
northeast corner of Thousand Oaks and Jones Matltsberger Road in San Antonio,
Texas. The property was built in 1986 and consists of an "L" shaped
configuration of one story interconnected retail buildings on approximately
16.956 acres. In addition, there is a pad site that is ground leased by Taco
Cabana. The site is rectangulared shaped with four access drives, two each on
Thousand Oaks Drive and Jones Maltsberger Road. The site does not include the
immediate corner which is occupied by a bank and two restaurants. Thousand Oaks
Center has approximately 1,100 parking stalls, including 14 that are designated
for handicap use, which is within the ADA guidelines.
The property is anchored by H.E.B. Food Store, which occupies more than 40%
of the total rentable square footage. As of December 6, 2000, the shopping
center was approximately 89% occupied with 6 vacant spaces.
A total of 145,402 square feet was leased to 16 tenants at this property as
of December 6, 2000.
We have retained Triple Net Properties Realty, Inc. to provide supervisory
management services at the property. We will pay Triple Net Properties Realty,
Inc. a property management fee equal to 5% of gross income from the property
(currently $7,046 per month based on current gross income at the property).
Under the terms of a sub-management agreement, Triple Net Properties Realty,
Inc. has retained Trammell Crow Company to provide local management services,
including leasing and managing the property. Triple Net Properties Realty, Inc.
will pay Trammell Crow a property management fee equal to 3.5% of gross income
from the property. Trammell Crow is not affiliated with our company or our
advisor.
Potential Property Acquisitions
We currently are considering several potential property acquisitions. Our
decision to acquire one or more of these properties will generally depend upon:
. our receipt of a satisfactory environmental survey and property appraisal
for each property;
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. no material adverse change occurring in the properties, the tenants or in
the local economic conditions; and
. our receipt of sufficient financing, either through the net proceeds from
this offering or satisfactory debt financing.
There can be no assurance that any or all of the conditions will be
satisfied or, if satisfied, that we will acquire any additional properties.
ITEM 5. OTHER EVENTS.
STATUS OF OUR OFFERING
General
On May 17, 2000, we commenced our offering of a maximum of 10 million
shares and a minimum of 100,000 shares of our common stock at an offering price
of $10.00 per share to the residents of the states listed in the prospectus and
supplements thereto. We commenced operations on June 29, 2000, upon the
acceptance of subscriptions for the minimum offering amount of $1,000,000 and
the escrow of subscriptions (other than funds received from Pennsylvania
investors) terminated. Our offering will terminate on the earlier of February
22, 2002, or the date on which we have sold the maximum offering.
As of December 6, 2000, we had sold 615,508 shares, including 22,090 shares
issued to our advisor, Triple Net Properties, LLC, and 3,489.4652 shares issued
to current shareholders under our dividend reinvestment program, resulting in
gross proceeds of $6,127,918 (excluding funds from Pennsylvania investors).
After the acquisition of Thousand Oaks Center and payment of selling commissions
and marketing support and due diligence reimbursement fees, we had approximately
$6,159,497.42 to invest in properties as of December 6, 2000.
Subsequent State Registrations
After the date of the prospectus, we registered the offering in Louisiana,
Mississippi, and Oklahoma. As a result, we now offer and sell shares of our
common stock to residents of these states in addition to those listed in the
prospectus. We expect to register the offering in Idaho and New Mexico in the
near future.
Fees and Expenses Paid in Connection with Our Offering
Selling Commissions
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NNN Capital Corp., the dealer manager, will receive 8% of the gross
proceeds of this offering, or $0.80 for each share sold, and may reallow a
portion of the selling commissions to broker-dealers participating in this
offering. The dealer manager will not receive any selling commissions for shares
sold under our dividend reinvestment program. As of December 6, 2000,
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we had incurred $469,532 in selling commissions due to the dealer manager, a
portion of which has been paid to participating broker-dealers as commissions.
The prospectus also provides that the dealer manager will receive one
warrant for every 40 shares of common stock sold in this offering in states
other than Arizona, Missouri, Ohio or Tennessee, and may reallow a portion of
the warrants to broker-dealers participating in this offering. The dealer
manager will not receive any warrants for shares sold under our dividend
reinvestment plan. Each warrant entitles the holder to purchase one share of
our common stock at a price of $12.00. As of December 6, 2000, there were
4,931.1425 warrants outstanding.
Marketing Support and Due Diligence Reimbursement Fee
We will pay the dealer manager an amount up to 1.5% of the gross proceeds
of this offering, or up to $0.15 for each share sold, to pay expenses associated
with marketing fees, wholesaling fees, expense reimbursements, bonuses and
incentive compensation and volume discounts and generally to reimburse the
dealer manager for due diligence expenses. We will not require the dealer
manager to account for spending of amounts comprising this fee. The dealer
manager may reallow a portion of this fee to broker-dealers participating in
this offering. As of December 6, 2000, we had incurred $88,037.19 in marketing
support and due diligence reimbursement fees to the dealer manager, a portion of
which has been reallowed to participating broker-dealers.
Other Organizational and Offering Expenses
Our advisor may advance, and we will reimburse it for, organization and
offering expenses incurred on our behalf in connection with this offering,
including legal and accounting fees, filing fees, printing costs and selling
expenses. As of December 6, 2000, we had incurred $153,198 in other
organizational and offering expenses.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements.
It is not practical to provide the required financial statements at this
time. Such financial statements will be filed as an amendment to this report on
Form 8-K no later than 60 days after the deadline for filing this Form 8-K.
(c) Exhibits.
10.1 Purchase and Sale Agreement, dated October 26, 2000, by and between
CMF Capital Company, L.L.C. and T REIT, L.P.
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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.
T REIT, INC.
Date: December 19, 2000 By: /s/ Anthony W. Thompson
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Anthony W. Thompson
President and Chief Executive Officer
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