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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K/A
_________________
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
December 11, 2000
Date of Report
T REIT, INC.
(Exact name of registrant as specified in its charter)
Virginia 333-77229 52-2140299
---------------------------- ---------------------- ----------------
(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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We filed a Form 8-K dated September 26, 2000 on October 11, 2000 with regard to
the acquisition of Christie Street Office Building without the requisite
financial information. Accordingly, we are filing this Form 8-K/A to include
that financial information.
ITEM 2. We purchased the Christie Street Office Building in Lufkin, Texas on
September 26, 2000. At the time of the purchase, this property was 100% occupied
by a single tenant, the Texas Department of Human Services, and had been leased
by this same tenant since 1984. The current lease terminates on August 31, 2002,
and provides for a current monthly rent of $20,000. We obtained seller-financing
for a portion of the property. The tenant pays for utilities and janitorial
services associated with the property. After reasonable inquiry, we are not
aware of any material factors relating to the Christie Street property, other
than those discussed herein, that would cause the reported financial information
in this filing not to be necessarily indicative of future operating results.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Index to Financial Statements
Christie Street Property:
<TABLE>
<S> <C>
Independent Auditors' Report..................................... 3
Historical Statements of Revenues and Direct Operating Expenses
For the Year Ended December 31, 1999
And for the Unaudited Nine-Month Periods
Ended September 30, 2000 and 1999.............................. 4
Note to Historical Statements of Revenues
And Direct Operating Expenses
For the Year Ended December 31, 1999
And for the Unaudited Nine-Month Periods
Ended September 30, 2000 and 1999.............................. 5
T REIT, Inc.:
Unaudited Pro Forma Condensed Combined Statements of Income
For the Nine Months Ended September 30, 2000 and for the
Year Ended December 31, 1999................................... 6
Notes to Unaudited Pro Forma Condensed Combined Statements of
Income For the Nine Months Ended September 30, 2000 and For
the Year Ended December 31, 1999............................... 9
</TABLE>
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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 11, 2000 By: /s/ Anthony W. Thompson
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Anthony W. Thompson
President and Chief Executive Officer
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
T REIT, Inc.:
We have audited the accompanying historical statement of revenues and direct
operating expenses (the "historical statement") of the Christie Street Property
(the "Property") for the year ended December 31, 1999. This historical
statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this historical statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying historical statements are prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commissions, and
are not intended to be a complete presentation of the Property's revenues and
expenses.
In our opinion, the December 31, 1999 historical statement presents fairly, in
all material respects, the revenues and direct operating expenses, as described
in Note 1, of the Property for the year ended December 31, 1999, in conformity
with generally accepted accounting principles.
The accompanying historical statements of revenues and direct operating expenses
for the unaudited nine-month periods ended September 30, 2000 and 1999 were not
audited by us and, accordingly, we express no opinion or other form of assurance
on them.
Squar, Milner, Reehl & Williamson, LLP
October 6, 2000
Newport Beach, California
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THE CHRISTIE STREET PROPERTY
HISTORICAL STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
For the Year Ended December 31, 1999
And for the Unaudited Nine-Month Periods Ended September 30, 2000 and 1999
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30 (unaudited) For the
---------------------------------- Year Ended
December 31,
2000 1999 1999
----------------- ---------------- ----------------
<S> <C> <C> <C>
RENTAL REVENUES $ 180,000 $ 180,000 $ 240,000
DIRECT OPERATING EXPENSES
Gardening and landscaping 900 1,080 1,320
Insurance 1,180 1,094 1,458
Property taxes and assessments 13,728 13,841 18,455
General maintenance 5,435 2,586 2,683
----------------- ---------------- ------------------
Total direct operating expenses 21,243 18,601 23,916
----------------- ---------------- ------------------
EXCESS OF REVENUES OVER DIRECT
OPERATING EXPENSES $ 158,757 $ 161,399 $ 216,084
================= ================ ================
</TABLE>
See accompanying note to historical statements of revenues and direct operating
expenses.
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THE CHRISTIE STREET PROPERTY
NOTE TO THE HISTORICAL STATEMENTS OF REVENUES
AND DIRECT OPERATING EXPENSES
For the Year Ended December 31, 1999
And for the Unaudited Nine-Month Periods Ended September 30, 2000 and 1999
NOTE 1 - Basis of Presentation
The historical statement of revenues and direct operating expenses relates to
the Christie Street Property (the "Property") which was acquired by T REIT, Inc.
on September 26, 2000 from an unaffiliated third party. The Property is located
in Lufkin, Texas.
Revenues and direct operating expenses are presented on the accrual basis of
accounting. The accompanying historical statement of revenues and direct
operating expenses relates to the operations of the Property and has been
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission.
Certain revenues, costs and expenses that are dependent on the ownership,
management and carrying value of the Property have been excluded from the
accompanying historical statement. The excluded revenues consist primarily of
nonoperating revenue related to the Property. The excluded expenses consist
primarily of interest, depreciation and amortization of the Property.
Consequently, the excess of revenues over direct operating expenses as presented
is not intended to be either a complete presentation of the Property's
historical revenues and expenses or comparable to the proposed future operations
of the Property.
The Property is leased to the state of Texas (the "State") under an operating
lease which currently expires on August 31, 2002, unless extended or terminated
earlier in accordance with its terms. The State generally pays for all
utilities and janitorial expenses associated with the Property. Future minimum
rents are $240,000, $240,000 and $160,000 for the years ending December 31, 2000
and 2001, and the eight months ending August 31, 2002, respectively.
In the opinion of management, all adjustments considered necessary for a fair
presentation of the historical statements of revenues and direct operating
expenses for the unaudited nine-month periods ended September 30, 2000 and 1999
have been included, and all such adjustments are of a normal recurring nature.
The excess of revenues over direct operating expenses for the unaudited nine-
month period ended September 30, 2000 is not necessarily indicative of the
excess revenues over direct operating expenses that can be expected for the year
ending December 31, 2000.
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T REIT, Inc.
Unaudited Pro Forma Condensed Combined Statements of Income
For the nine months ended September 30, 2000
and for the year ended December 31, 1999
On September 26, 2000, T REIT, Inc. (the "Company") acquired the Christie Street
Property (the "Property") for a purchase price of $1,250,000.
The following unaudited pro forma condensed combined statements of income
(hereinafter collectively referred to as "the pro forma financial statements")
are presented for illustrative purposes only, and are not necessarily indicative
of the results of operations of future periods or the results that would have
been realized had the Property been acquired by the Company during the specified
period. The pro forma financial statements (including notes thereto) are
qualified in their entirety by reference to and should be read in conjunction
with the historical financial statements of the Company and the Property,
including the notes thereto, incorporated herein by reference or included
herein. The Company's historical financial statements incorporated herein by
reference are (a) the audited balance sheet as of December 31, 1999 included in
the related Form S-11/A Registration Statement filed on February 16, 2000, and
(b) the unaudited September 30, 2000 financial statements included in the
related Form 10-Q. The financial statements referred to in the preceding
sentence have been previously filed with the Securities and Exchange Commission
("SEC").
The consolidated balance sheet of the Company as of September 30, 2000
previously filed with the SEC includes the acquisition of the Property which
occurred on September 26, 2000, and includes the effects of owning and operating
the Property for five days. A pro forma condensed combined balance sheet giving
effect to the acquisition of the Property as if the purchase occurred on
September 30, 2000 would differ from the Company's historical consolidated
balance as of September 30, 2000 only by the five days of post acquisition
activity. These five days of post acquisition activity are not significant and
considering a consolidated balance sheet of the Company has been filed with the
SEC subsequent to the acquisition date, the pro forma condensed combined balance
sheet as of September 30, 2000 has been omitted.
The accompanying unaudited pro forma condensed combined statement of income for
the nine-months ended September 30, 2000 gives effect to the acquisition of the
Property as if the purchase occurred on January 1, 2000.
The accompanying unaudited pro forma condensed combined statement of income for
the year ended December 31, 1999 gives effect to the acquisition of the Property
as if the purchase occurred on January 1, 1999.
The pro forma financial statements are unaudited and are subject to a number of
estimates, assumptions, and other uncertainties, and do not purport to be
indicative of the actual results of operations that would have occurred had the
acquisition reflected therein in fact occurred on the dates specified, nor do
such financial statements purport to be indicative of the results of operations
that may be achieved in the future.
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T REIT, Inc.
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 2000
Historical
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Christie
Street Pro Forma Pro Forma
T REIT, Inc. Property Adjustments Combined
------------ -------- ----------- --------
Revenues
Rental Revenues $ 3,333 $180,000 $ (3,333) (A) $180,000
Interest Income 16,914 - (7,500) (B) 9,414
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20,247 180,000 (10,833) 189,414
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Expenses
Organizational 29,888 - - 29,888
General & Administrative 8,000 - - 8,000
Interest 22,874 - 50,625 (C) 73,499
Property Taxes & Assessments - 13,728 8,772 (D) 22,500
Other Expenses - 7,515 - 7,515
Management Fees - - 8,100 (E) 8,100
Depreciation - - 21,094 (F) 21,094
-------- -------- -------- --------
60,762 21,243 88,591 170,596
-------- -------- -------- --------
Net (loss) income $(40,515) $158,757 $(99,424) $ 18,818
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T REIT, Inc.
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1999
Historical
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Christie Street Pro Forma Pro Forma
T REIT, Inc. Property Adjustments Combined
------------ --------------- ----------- ---------
Rental Revenues $ - $ 240,000 $ - $ 240,000
------------ --------------- ----------- ---------
Expenses
Interest - - 67,500 (C) 67,500
Property Taxes &
Assessments - 18,455 11,545 (D) 30,000
Other Expenses - 5,461 - 5,461
Management Fees - - 10,800 (E) 10,800
Depreciation - - 28,125 (F) 28,125
------------ --------------- ----------- ---------
- 23,916 117,970 141,886
------------ --------------- ----------- ---------
Net income $ - $ 216,084 $ (117,970) $ 98,114
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T REIT, Inc.
Notes to Unaudited Pro Forma Condensed Combined Statements of Income
For the nine months ended September 30, 2000
and for the year ended December 31, 1999
Basis of Presentation
The unaudited pro forma condensed combined statements of income for the nine
months ended September 30, 2000 and for the year ended December 31, 1999, give
effect to the acquisition of the Property as if the purchase had occurred on
January 1, 2000 and January 1, 1999, respectively. The unaudited pro forma
condensed combined statements of income have been adjusted as discussed in the
notes below:
(A) - The acquisition of the Property by the Company occurred on September 26,
2000. Accordingly, the historical income statement of T REIT, Inc. for the nine
months ended September 30, 2000 includes five days of rental revenues from the
Property. The adjustment is to remove five days of rental revenue included in
the historical operations of both the Company and the Property.
(B) - The Company purchased the Property for $1,250,000, consisting of $750,000
and $500,000 of debt and cash, respectively. The adjustment reflects the
decrease in interest income resulting from the use of cash.
(C) - Reflects the interest expense on the $750,000 of debt incurred by the
Company to purchase the Property.
(D) - Reflects the increase in property taxes resulting from a reassessment of
property value on the acquisition date.
(E) - Reflects the management fees to be paid by the Company to an affiliate of
the Company at a rate of 4.5% of rental revenue.
(F) - Depreciation on the building on a straight line basis over the estimated
useful life of 40 years.
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