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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
May 29, 1998
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Date of Report (Date of Earliest Event Reported)
TRANSCONTINENTAL REALTY INVESTORS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Nevada 0-13291 94-6565852
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(State of Incorporation) (Commission (IRS Employer
File No.) Identification No.)
10670 North Central Expressway, Suite 300, Dallas, TX 75231
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 692-4700
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 14, 1998, Transcontinental Realty Investors, Inc. (the "Company")
purchased Mountain Plaza, a 188 unit apartment complex in El Paso, Texas, for
$4.0 million, approximately 1.2% of the Company's assets at December 31, 1997.
The seller of the property was State Street Bank and Trust Company, an
unrelated party. The property was constructed in 1972 and was 92% occupied on
the date of purchase. The Company paid $1.0 million in cash and obtained new
mortgage financing of $3.0 million. The mortgage bears interest at 8.2% per
annum, requires monthly payments of interest only and matures in January 2000.
On January 16, 1998, the Company purchased the Hunters Glen, a 212 unit
apartment complex in Midland, Texas, for $2.5 million, approximately .8% of the
Company's assets at December 31, 1997. The seller of the property was Junction
Apartments of Midland, L.C., an unrelated party. The property was constructed
in 1982 and was 80% occupied on the date of purchase. The Company paid
$600,000 in cash with the seller providing purchase money financing of the
remaining $1.9 million of the purchase price. The mortgage bears interest at a
variable rate, currently 8.0% per annum, requires monthly payments of interest
only for the first twenty-four months and requires monthly payments of
principal and interest of $14,302, thereafter, and matures in January 2003.
On January 28, 1998, the Company purchased Bent Tree Garden, a 204 unit
apartment complex in Addison, Texas, for $8.1 million, approximately 2.5% of
the Company's assets at December 31, 1997. The seller of the property was Bent
Tree Gardens, L.P., an unrelated party. The property was constructed in 1980
and was 87% occupied on the date of purchase. The Company paid $1.7 million in
cash and obtained new mortgage financing of $6.4 million. The mortgage bears
interest at 7.2% per annum, requires monthly payments of principal and interest
of $46,054 and matures in February 2008.
On February 18, 1998, the Company purchased Parkway North, a 71,041 square foot
office/retail building in Dallas, Texas, for $5.4 million, approximately 1.7%
of the Company's assets at December 31, 1997. The seller of the property was
16800 Dallas Parkway, L.P., an unrelated party. The property was constructed
in 1980 and was 89% occupied on the date of purchase. The Company paid $1.5
million in cash and obtained new mortgage financing of $3.9 million. The
mortgage bears interest at a variable rate, currently 8.75% per annum, requires
monthly payments of interest only and matures in March 2000.
On March 31, 1998, the Company purchased the Plaza on Bachman Creek, a 80,278
square foot office/retail center in Dallas, Texas, for $3.5 million,
approximately 1.1% of the Company's assets at December 31, 1997. The seller of
the property was TCIP Bachman Creek, LLC, an unrelated party. The property was
constructed in 1985 and was 57% occupied on the date of purchase. The Company
paid $1.1 million in cash and obtained new mortgage financing of $2.4 million.
The mortgage bears interest at a variable rate, currently 9.0% per annum,
requires monthly payments of principal and interest of $21,593 and matures in
March 2008.
On April 30, 1998, the Company purchased in a single transaction, Ashton Way, a
178 unit apartment complex in Midland, Texas and the 4400
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (Continued)
Apartments, a 92 unit apartment complex also in Midland, Texas, and on May 1,
1998, the Company purchased Woodview, a 232 unit apartment complex in Odessa,
Texas, for a total of $6.8 million, approximately 2.2% of the Company's assets
at December 31, 1997. The seller of the properties was Mutual Life Insurance
Company of New York and Rocky Woodview, Inc., unrelated parties. The
properties were constructed in 1978, 1981 and 1981, respectively, and were
occupied 86%, 92% and 82%, respectively, on the date of purchase. The Company
paid a total of $1.5 million in cash and obtained new mortgage financing
totaling $5.3 million. One mortgage bears interest at 7.2% per annum and the
other at a variable rate, currently 8.2% per annum, require monthly payments of
principal and interest totaling $38,003 and mature in October 1999 and May
2008, respectively.
On May 21, 1998, the Company purchased Emerald Terrace, a 172 unit apartment
complex in Midland, Texas, for $1.5 million, approximately .5% of the Company's
assets at December 31, 1997. The seller of the property was Emerald Terrace,
Inc., an unrelated party. The property was constructed in 1977 and was 65%
occupied on the date of purchase. The Company paid $425,000 in cash, assumed
the existing mortgage of $584,000 with the seller providing purchase money
financing of an additional $491,000. The mortgages bear interest at fixed and
variable rates, currently 7.5% and 9.5% per annum, require monthly payments of
principal and interest totaling $10,643 and mature in November 1999 and May
2013.
On May 29, 1998, the Company purchased, in a single transaction, the Daley
Building, a 62,425 square foot office building in San Diego, California and the
Viewridge Building, a 25,062 square foot office building, also in San Diego,
California, for a total of $6.5 million, approximately 2.0% of the Company's
assets at December 31, 1997. The seller of the properties was Ratheon
Development, Inc., an unrelated party. The properties were constructed in 1981
and 1979, respectively, and were occupied 93% and 87%, respectively, on the
date of purchase. The Company paid $1.7 million in cash and obtained new
mortgage financing totaling $4.8 million. The mortgages bears interest at a
variable rate, currently 9.5% per annum, require monthly payments of principal
and interest totaling $42,416 and mature in May 2005.
Although each of the above purchases is not a significant acquisition in
itself, when aggregated such purchases constitute a significant acquisition.
The Company's purchase of the Daley and Viewridge Office Buildings on May 29,
1998, caused the Company to exceed the significant acquisition threshold.
In addition to the purchases of income producing properties discussed above,
the Company has also purchased in 1998 three parcels of land, two in Dallas,
Texas, one in January 1998 and the other in February 1998 and one in Midland,
Texas in May 1998. The three parcels were purchased for a total of $7.8
million in cash.
In March 1998, the Company sold a retail Center receiving net cash of $1.2
million.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (Continued)
In assessing each purchase of income producing property described above, the
following were among the factors considered by the Company's management,
geographic location of the property, performance of the property, new or
renovated properties in the vicinity of the property and the maintenance and
appearance of the property. Additional factors considered with respect to
commercial properties were the ease of access to the property, the adequacy of
related facilities, such as parking, and the property's sensitivity to market
conditions in establishing rental rates. With respect to apartment complexes
the design and mix of units and the ability to provide a community atmosphere
for the tenants was also considered.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The sellers have informed the Company that audited financial statements and
supporting data relating to their respective property's operations are not
available. It is, therefore, impracticable to provide the required audited
statement of operations for the properties acquired or pro forma financial
information. The required information will be filed by amendment of this Form
8-K as soon as practicable, but is expected to be not later than July 29, 1998.
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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 hereto duly authorized.
TRANSCONTINENTAL REALTY
INVESTORS, INC.
Date: July 2, 1998 By: /s/ Thomas A. Holland
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Thomas A. Holland
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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