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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 6, 1997
(October 16, 1996)
NEW PLAN REALTY TRUST
(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-7532 13-1995781
(State or Other Jurisdiction (Commission (IRS
Employer of Incorporation) File Number) IdentificationNo.)
1120 Avenue of the Americas, New York, New York 10036
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 869-3000
(Former Name or Former Address, if Changed Since Last Report)
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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.
Date: January 6, 1997
NEW PLAN REALTY TRUST
By:/s/ Michael I. Brown
Michael I. Brown
Chief Financial Officer and
Controller
<PAGE>
Item 2. Acquisition or disposition of assets
New Plan Realty Trust (the "Trust) purchased five properties for
an aggregate purchase price of approximately $39.2 million, which was paid
in cash and was the estimated fair market value of such properties.
Additional information regarding the five properties is set forth below.
<TABLE>
<CAPTION>
Gross
Property Date of Acquisition Acres Leasable Area Seller Occupancy
<S> <C> <C> <C> <C> <C>
DILLSBURG SHOPPING CENTER
Dillsburg, PA 10/16/96 22 66,048 Frank A. Nardo 100%
Principal tenants are: Giant Foods, Thrift Drug, Radio Shack, Little Caesars
RENAISSANCE CENTER EAST
Las Vegas, NV 10/17/96 15 145,578 Renaissance Associates, LP 94%
Principal tenant is: Lucky's
RUTLAND PLAZA
St. Petersburg, FL 11/1/96 13 149,857 Rutland Plaza Co., a 98%
California LP
Principal tenants are: Winn Dixie, Echerd Drugs, Big Lots
DELCO PLAZA
Sterling Heights, MI 11/14/96 15 154,853 Sterling Heights 100%
Development, Inc.
Principal tenants are: Baby Superstore, Bed Bath & Beyond, Durham's, Perry Drug
SOUTHFIELD PLAZA SHOPPING
CENTER
Bridgeview, IL 12/3/96 18 206,844 General American Life 88%
Insurance Co.
Principal tenants are: Dominick's Foods, Value City, Walgreens
<TABLE/>
Audited statements of revenue and certain operating expenses and pro
forma financial information reflecting the acquisition of the five
properties are included in this Current Report on Form 8-K.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) and (b) Financial Statements of Businesses Acquired and Pro
Forma Financial Information.
1. Report of Eichler, Bergsman & Co., LLP, Independent Certified
Public Accountants, dated December 6, 1996.
2. Certain properties acquired - Historical Summary of Combined
Revenues and Certain Operating Expenses for the year ended
July 31, 1996.
3. In addition, the following pro forma financial information is
provided to reflect all five properties acquired:
(i) New Plan Realty Trust and Subsidiaries - Information
pursuant to Rule 3-14 of Regulation S-X.
(ii) New Plan Realty Trust and Subsidiaries - Pro forma
condensed consolidated financial statements (unaudited):
(a) Pro forma condensed consolidated statement of
income for the year ended July 31, 1996.
(b) Pro forma condensed consolidated statement of
income for the three months ended October 31, 1996.
(c) Pro forma condensed consolidated balance sheet as
of October 31, 1996.
(d) Notes to pro forma condensed consolidated financial
statements.
(c) Exhibits
Included herewith is Exhibit No. 23, the Consent of the
Independent Accountants.<PAGE>
New Plan Realty Trust
1120 Avenue of the Americas
New York, New York 10036
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying Historical Summary of Combined Revenues and
Certain Operating Expenses of Southfield Plaza Shopping Center, Delco Plaza,
Renaissance Center East, Rutland Plaza, and Dillsburg Shopping Center (the
"Properties") for the year ended July 31, 1996. This Historical Summary is
the responsibility of New Plan Realty Trust's management. Our
responsibility is to express an opinion on this Historical Summary 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 Summary is free of
material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the Historical Summary.
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 Summary. We believe that our audit provides
a reasonable basis for our opinion.
The Historical Summary has been prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission, and its
use for any other purpose may be inappropriate. Accordingly, as described
in the Note to the Historical Summary, the statement excludes interest,
depreciation and general and administrative expenses for the period and is
not intended to be a complete presentation of the Properties' revenues and
expenses.
In our opinion, the Historical Summary referred to above presents fairly, in
all material respects, the revenues and certain operating expenses
(exclusive of interest, depreciation and general and administrative
expenses) in conformity with generally accepted accounting principles.
EICHLER, BERGSMAN & CO., LLP
New York, New York
December 6, 1996
<PAGE>
CERTAIN PROPERTIES ACQUIRED
HISTORICAL SUMMARY OF COMBINED REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE YEAR ENDED JULY 31, 1996
(IN THOUSANDS)
Rental income $5,108
Repairs and maintenance $ 360
Real estate taxes 664
Other operating expenses 422 1,446
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Excess of revenues over certain operating expenses $3,662
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NOTE:
The Historical Summary of Combined Revenues and Certain Operating Expenses
relates to the operation of Southfield Plaza Shopping Center, Delco Plaza,
Renaissance Center East, Rutland Plaza, and Dillsburg Shopping Center (the
"Properties") while under ownership previous to New Plan Realty Trust. The
Summary includes the revenues and expenses of one property for the twelve
months ended August 31, 1996. The Properties are shopping centers.
The Summary has been prepared on the accrual method of accounting.
Operating expenses include maintenance and repair expenses, utilities, real
estate taxes, insurance and certain other expenses. In accordance with the
regulations of the Securities and Exchange Commission, mortgage interest
expense, depreciation, and general and administrative costs have been
excluded from operating expenses, as they are dependent upon a particular
owner, purchase price or financial arrangement.
Minimum future rentals for the years ended July 31 under existing commercial
operating leases at shopping centers being reported on are approximately as
follows (in thousands);
1997 $4,371 2000 $ 3,345
1998 4,080 2001 3,004
1999 3,778 Thereafter 16,157
The above assumes that all leases which expire are not renewed, therefore,
neither renewal rentals nor rentals from replacement tenants are included.
Minimum future rentals do not include contingent rentals which may be
received under certain leases on the basis of percentage of reported
tenants' sales volumes, increases in Consumer Price Indices, common area
maintenance charges and real estate tax reimbursement.
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
INFORMATION PURSUANT TO RULE 3-14 OF REGULATION S-X
Part I MANAGEMENT ASSESSMENT
Management's assessment of the five properties prior to
acquisition includes, but is not limited to, the quality of the tenant base,
regional demographics, the competitive environment, operating expenses and
local property taxes. In addition, the physical aspect of the five
properties, location, condition and quality of design and construction are
evaluated. Management also always conducts Phase I environmental tests.
All factors, when viewed in their entirety, have met management's
acquisition criteria. Management is not aware of any material factors
relating to the acquisition other than those discussed above.
Part II ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED FROM
CERTAIN PROPERTIES ACQUIRED (UNAUDITED)
a. The following presents an estimate of taxable operating income and
funds generated from the operation of the acquired five properties
for the year ended July 31, 1996 based on the Historical Summary
of Combined Revenues and Certain Operating Expenses. These
estimated results do not purport to present expected results of
operations for the five properties in the future and were prepared
on the basis described in the accompanying notes which should be
read in conjunction herewith.
Estimates of taxable operating income (In Thousands)
Operating income before depreciation expense $3,662(*)
Less:
Estimated depreciation 785
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Estimated taxable operating income $2,877(*)
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Estimates of funds generated:
Estimates taxable operating income $2,877
Add: Estimated depreciation 785
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Estimate of funds generated $3,662(*)
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(*) Estimates of operating income, net taxable income and funds generated
do not include approximately $565,000 of revenue from leases that
commenced during or subsequent to the year ended July 31, 1996.
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b. Estimated taxable income for New Plan Realty Trust (including the
five properties) for the year ended July 31, 1996 and the three
months ended October 31, 1996 is approximately the same as Pro
Forma net income reported on the Pro Forma Condensed Statements of
Income (Unaudited).
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
NOTES TO ESTIMATES OF TAXABLE OPERATING INCOME AND FUNDS GENERATED
FROM CERTAIN PROPERTIES ACQUIRED
(UNAUDITED)
Basis of Presentation
1. Estimated depreciation was based upon an allocation of the
purchase price to land (20%) and building (80%) with the
depreciation being taken over a 40 year life using the straight
line method.
2. No income taxes have been provided because New Plan Realty Trust
is taxed as a real estate investment trust under the provisions of
the Internal Revenue Code. Accordingly, the Trust does not pay
Federal income tax whenever income distributed to shareholders is
equal to at least 95% of real estate investment trust taxable
income and certain other conditions are met.
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NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The pro forma condensed consolidated statements of income for the year
ended July 31, 1996 and the three months ended October 31, 1996 reflect the
acquisition of the five properties as if the transactions had occurred on
August 1, 1995. This pro forma information is based on the historical
statement of the Trust after giving effect to the acquisition of the five
properties.
The following unaudited condensed consolidated balance sheet as of
October 31, 1996 reflects the acquisition of the five properties.
The unaudited pro forma condensed consolidated financial statements
have been prepared by New Plan Realty Trust management. The unaudited pro
forma condensed consolidated statements of income may not be indicative of
the results that would have actually occurred had the acquisitions been made
on the date indicated or that may be achieved in the future. The unaudited
pro forma condensed consolidated financial statements should be read in
conjunction with New Plan Realty Trust's audited consolidated financial
statements as of July 31, 1996 and for the year then ended and the
accompanying notes (which are contained in the Trust's Form 10-K for the
year ended July 31, 1996).
<PAGE>
</TABLE>
<TABLE>
<CAPTION> NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED JULY 31, 1996
(In thousands except for per share amounts)
PREVIOUSLY REPORTED (4)
AS HISTORICAL PRO FORMA HISTORICAL PRO FORMA REVISED
REPORTED ACQUISITON ADJUSTMENTS PRO FORMA ACQUISITION ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C> <C> <C> <C>
RENTAL REVENUES $162,821 $5,108 $ 565 (2) $168,494 $13,526 $182,020
INTEREST AND DIVIDENDS 4,785 (947) (2) 3,838 ($1,120) 2,718
------- ------ ---------- ------- ------- -------- --------
TOTAL REVENUE 167,606 5,108 (382) 172,332 13,526 (1,120) 184,738
OPERATING COSTS 57,302 1,446 58,748 5,104 63,852
DEPRECIATION EXPENSE 20,004 785 (2,3) 20,789 1,508 22,297
INTEREST EXPENSE 17,561 1,149 (2) 18,710 3,490 22,200
------ ------ --------- ------- ------ ------- --------
TOTAL OPERATING
EXPENSE 94,867 1,446 1,934 98,247 5,104 4,998 108,349
------- ------ ------ -------- ------- ------ ---------
72,739 3,662 (2,316) 74,085 8,422 (6,118) 76,389
OTHER DEDUCTIONS 2,616 2,616 2,616
OTHER INCOME 398 398 398
------- ------- ------- -------- ------- -------- --------
NET INCOME $ 70,521 $3,662 ($2,316) $ 71,867 $ 8,422 ($6,118) $ 74,171
======== ======= ======== ======== ======= ======== ========
NET INCOME PER SHARE $ 1.25 $ 1.27 $ 1.31
AVERAGE SHARES OUTSTANDING 56,484 56,484 56,484
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
TABLE/
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED OCTOBER 31, 1996
(In thousands except for per share amounts)
HISTORICAL PRO FORMA
AS REPORTED ACQUISITION ADJUSTMENTS PRO FORMA
----------- ----------- ----------- ---------
REVENUES:
RENTAL REVENUES $46,618 $ 1,277 $ 25 (2) $47,920
INTEREST AND DIVIDENDS 1,165 (207) (2) 958
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TOTAL REVENUE 47,783 1,277 (182) 48,878
OPERATING EXPENSES:
OPERATING COST 16,666 362 (29) (2) 16,999
DEPRECIATION EXPENSE 5,686 180 (2,3) 5,866
INTEREST EXPENSE 5,861 5,861
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TOTAL OPERATING EXPENSES 28,213 362 151 28,726
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19,570 915 (333) 20,152
OTHER DEDUCTIONS 494 494
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NET INCOME $19,076 $ 915 $ (333) $19,658
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NET INCOME PER SHARE $ .33 $ .34
AVERAGE SHARES OUTSTANDING 58,132 58,132
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED) <PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF OCTOBER 31, 1996
(In Thousands)
ASSETS:
REAL ESTATE $ 991,479 $20,667 $1,012,146
CASH, CASH EQUIVALENTS,
MARKETABLE SECURITIES AND
OTHER INVESTMENTS 25,672 (20,667) 5,005
OTHER 47,224 47,224
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TOTAL ASSETS $1,064,375 $1,064,375
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LIABILITIES:
MORTGAGES PAYABLE $ 48,842 $ 48,842
NOTES PAYABLE 322,525 322,525
OTHER LIABILITIES 31,085 31,085
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402,452 402,452
SHAREHOLDERS' EQUITY 661,923 661,923
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,064,375 $1,064,375
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SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
<PAGE>
NEW PLAN REALTY TRUST AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
1. Pro Forma Adjustments reflect the acquisition of the five properties using cash
on hand and increased borrowings.
2. Pro Forma Adjustments to the unaudited Pro Forma Condensed Consolidated
Statement of Income for the year ended July 31, 1996 and for the three
months ended October 31, 1996 include adjustments to reflect the
acquisition of the five properties as if they had been acquired on
August 1, 1995 (See Note 3.) These adjustments include a reduction in
interest income due to the use of cash and cash equivalents to purchase
the aforementioned properties and an increase in interest expense due to
an increase in debt to partially finance such acquisitions. The interest
rate used for calculating the reduction in interest income was 4%,
representing the average rate of interest earned on the Trust's cash
balances. The interest rate used for calculating the interest expense
was approximately 7.4%, the weighted average interest rate on notes
payable. In addition, the adjustment to Rental Revenue reflects
transactions that occurred during or subsequent to the year ended July
31, 1996 and are not fully reflected in the historical acquisition
amounts.
3. Estimated depreciation was based upon an allocation of the purchase price
to land (20%) and building (80%) with the depreciation being taken over a
40 year life using the straight line method.
4. Refer to Form 8-K dated November 4, 1996 for previously reported amounts.
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
23 Consent of Independent Accountants
</TABLE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
New Plan Realty Trust on Forms S-3 (File Nos. 33-58596, 333-15635 and 33-60315)
and on Forms S-8 (33-57946 and 33-59077) of our report dated December 6, 1996
on our audit of the Historical Summary of Combined Revenues and Certain
Operating Expenses of certain properties acquired by New Plan Realty Trust for
the year ended July 31, 1996, which is included in this Current Report on Form
8-K dated January 6, 1997.
EICHLER, BERGSMAN & CO., LLP
New York, New York
January 6, 1997
