<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_________________
FORM 8-K
_________________
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
October 26, 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)
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
PROPERTY ACQUISITION
Northstar Crossing Shopping Center, Garland, Texas
On October 26, 2000, we purchased the Northstar Crossing Shopping Center, a
shopping center in Garland, Texas containing 67,560 rentable square feet, from
GE Capital Real Estate under an agreement of sale and purchase. The seller is
not affiliated with our company or our advisor, Triple Net Properties, LLC. We
paid a total of $3,930,000 for the shopping center, and approximately $8,570 in
additional acquisition expenses such as attorneys' fees, recording fees and
other closing costs. Our acquisition cost represents approximately $58.00 per
square foot of leasable space.
In connection with the purchase of this shopping center, Fair Oak, LLC, an
entity affiliated with GE Capital Realty Group, Inc., provided a short-term
acquisition loan in the amount of $2,695,000. The promissory note evidencing the
loan provides for monthly interest-only payments commencing December 1, 2000 at
a rate of 3.5% over the GECC Composite Commercial Paper Rate, currently 6.47%.
The loan is due and payable in July, 2001 and is prepayable in whole or in part
upon 10 days' prior written notice. The loan is secured by a first mortgage on
the property. There are no loan fees or similar costs attached with the loan.
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 Oak 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.
The purchase of the property was unanimously approved by our board of
directors, including our independent directors.
The Northstar Crossing Shopping Center was built in 1986 and consists of
three one-story brick and glass buildings containing a total of 67,560 rentable
square feet. Two of the buildings adjoin either side of a United Artists Cinema.
The third building is a 32,383 square foot free standing facility currently
occupied by Gold's Gym. GE Capital Real Estate does not own or
2
<PAGE>
operate the building in which the United Artists Cinema is located, and we did
not acquire it as part of our purchase of the shopping center.
The shopping center is situated on 6.8 acres inclusive of the site which
the United Artists Cinema building occupies. It has surface parking for
approximately 855 cars and is located on the southeast corner of Belt Line Road
and North Garland Road just south of the George W. Bush Tollway, also known as
State Highway 190, which is the outer loop tollway system connecting all of the
major suburbs in the northern areas of the Dallas/Ft. Worth metroplex.
Garland, Texas is a rapidly growing community located approximately 15
miles northeast of downtown Dallas. Garland is the ninth largest city in Texas
with a population of over 200,000.
The property has 18 tenant spaces and is anchored by Gold's Gym, which is
the only tenant occupying more than 10% of the total rentable square footage.
With the exception of Nationwide Insurance, the remaining tenants of the
shopping center are local tenants. As of October 26, 2000, the shopping center
was 82.5% occupied.
We have retained Triple Net Properties Realty, Inc., an affiliate of our
advisor, to provide supervisory management services at the property. We will pay
Triple Net Properties Realty, Inc. a property management fee equal to 5% of the
gross income from the property (currently $2,575 per month based on current
gross income at the property) in addition to compensation for property-level
services, including leasing fees, loan origination and servicing fees and
property tax reduction fees. Under the terms of a submanagement 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% of gross income from the property plus an amount not to exceed
$1,000 per month for accounting and reporting charges. 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;
. 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.
3
<PAGE>
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.
Fees Paid in Connection with the Acquisition of Northstar Crossing Shopping
Center
Acquisition Expenses
We will reimburse our advisor for costs and expenses of selecting,
evaluating and acquiring properties, whether or not actually acquired, including
surveys, appraisals, title insurance and escrow fees, legal and accounting fees
and expenses, architectural and engineering reports, environmental and asbestos
audits, travel and communication expenses, nonrefundable option payments on
properties not acquired and other related expenses payable to our advisor and
its affiliates. As of October 26, 2000, we had incurred $1,048 in acquisition
expenses payable to our advisor.
Property Management Fee
We will pay Triple Net Properties Realty, Inc. a property management fee
equal to 5% of the gross income from our properties. This fee will be paid
monthly. As of October 26, 2000, we had incurred $496 in property management
fees payable to Triple Net Properties Realty, Inc.
Real Estate Commission
The seller of the Northstar Crossing Shopping Center paid a real estate
commission of $80,000 to Triple Net Properties Realty, Inc.
Compensation for Services
We will pay our advisor for other property-level services including leasing
fees, construction management fees, loan origination and servicing fees,
property tax reduction fees and risk management fees. Such compensation will not
exceed the amount which would be paid to unaffiliated third parties providing
such services. As of October 26, 2000 we had not incurred any fees for such
services payable to our advisor.
Reimbursable Expenses
We will reimburse our advisor for:
. the cost to our advisor or its affiliates of goods and services used for
and by us and obtained from unaffiliated parties, and
. administrative services related to such goods and services limited to
ministerial services such as typing, record keeping, preparing and
disseminating company reports, preparing and maintaining records regarding
shareholders, record keeping and administration of our
4
<PAGE>
dividend reinvestment program, preparing and disseminating responses to
shareholder inquiries and other communications with shareholders and any
other record keeping required.
As of October 26, 2000, we had not incurred any reimbursable expenses
payable to our advisor.
ITEM 5. OTHER EVENTS.
STATUS OF OUR OFFERING
General
On February 22, 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. Our
offering will terminate on the earlier of February 22, 2002, or the date on
which we have sold the maximum offering.
As of October 25, 2000, we had sold 526,506 shares, including 22,090
shares issued to our advisor, Triple Net Properties, LLC, and 1,229 shares
issued to current shareholders under our dividend reinvestment program,
resulting in gross proceeds of $5,240,842 (excluding funds from Pennsylvania
investors) which exceeded the minimum offering amount of $1,000,000 and the
escrow of subscriptions (other than funds received from Pennsylvania investors)
has terminated. After the acquisition of the Christie Street Office Building
described below and payment of selling commissions, marketing support, and due
diligence reimbursement fees, we had approximately $3,443,466 to invest in
properties as of October 25, 2000.
Subsequent State Registrations
After the date of the prospectus, we registered the offering in Louisiana
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 Mississippi and New Mexico in the near
future.
Fees and Expenses Paid in Connection with Our Offering
Selling Commissions
NNN Capital Corp., the dealer manager, will receive 8% of the gross
proceeds of our offering, or $0.80 for each share sold, and may reallow a
portion of the selling commissions to broker-dealers participating in our
offering. As of October 25, 2000, we had incurred $395,479 in selling
commissions due to the dealer manager, a portion of which has been paid to
participating broker-dealers as commissions.
5
<PAGE>
The dealer manager will receive one warrant for every 40 shares of common
stock sold in our offering in states other than Arizona, Missouri, Ohio, or
Tennessee and may reallow a portion of the warrants to broker-dealers
participating in our 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
October 25, 2000, we had issued 7,897 warrants to the dealer manager. In
addition, we are obligated to issue an additional 2,920 warrants to the dealer
manager in connection with shares sold after September 30, 2000. We expect to
issue these warrants prior to the end of the fourth quarter of 2000.
Marketing Support and Due Diligence Reimbursement Fee
We will pay the dealer manager an amount up to 1.5% of the gross proceeds
of our 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 to generally 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 our
offering. As of October 25, 2000, we had incurred $75,151 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 our offering,
including legal and accounting fees, filing fees, printing costs and selling
expenses. As of October 25, 2000, we had incurred $131,021 in other
organizational and offering expenses.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements: The financial statements required by Form 8-K and
Regulation S-X will be filed within 60 days of the date this Form 8-K is
required to be filed.
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 25, 2000, by and between
CMF Capital Company, L.L.C. and T REIT, L.P.
6
<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.
T REIT, INC.
Date: November 10, 2000 By: /s/ Anthony W. Thompson
-----------------------
Anthony W. Thompson
President and Chief Executive Officer
7
