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) October 31, 1996
-------------------------------
UNITED DOMINION REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-10524 54-0857512
State or other jurisdiction of (Commission (I.R.S. Employer
incorporation of organization) File Number) Identification No.)
10 South Sixth Street, Suite 203, Richmond, Virginia 23219-3802
(Address of principal executive offices)
Registrant's telephone number, including area code (804) 780-2691
-----------------------------
NO CHANGE
(Former name or former address, if change since last report)
<PAGE>
ITEM 2. OTHER EVENTS
On October, 31 1996, the registrant, United Dominion Realty Trust, Inc. ("the
Company"), acquired an apartment community from Property Asset Management,
Inc., an affiliate of Lehman Brothers Holding, Inc. Following this transaction,
the Company's acquisitions for 1996 were "significant" in the aggregate and
necessitating the filing of this Form 8-K.
A brief summary of each of the Company's 1996 acquisitions to date is set forth
below. Each property was acquired from an unrelated seller for consideration
agreed upon through arm's length bargaining. Unless stated otherwise, to the
extent cash was utilized to complete an acquisition, the source of that cash was
bank line borrowings.
On February 20, 1996, the Company acquired an apartment community from Brooksea
Associates, an Illinois limited partnership and an affiliate of Balcor Company
for $6.0 million, including closing costs, all cash. Seabrook Apartments,
located in Orlando, Florida, is a 200 home garden apartment community located on
15.52 acres constructed in 1984.
On February 23, 1996, the Company acquired an apartment community from John
Hancock Apartment Fund Limited Partnership, a Massachusetts limited partnership
for $10.8 million, including closing costs, all cash. Hampton Ridge Apartments,
located in Woodbridge, Virginia, is a 192 home garden apartment community
located on 11.30 acres constructed in 1987.
On March 7, 1996, the Company acquired an apartment community from RCPF Limited
Partnership, a North Carolina limited partnership for $13.5 million, including
closing costs, all cash. Steeplechase Apartments, located in Greensboro, North
Carolina, is a 244 home garden apartment community located on 20.75 acres
constructed in 1990.
On March 28, 1996, the Company acquired an apartment community from Berkman
Brookridge Tenn, L.L.C., a Georgia limited liability company for $6.2 million,
including closing costs, all cash. Brookridge Apartments, located in Nashville,
Tennessee, is a 176 home garden apartment community located on 10.36 acres
constructed in 1986.
On May 9, 1996, the Company acquired an apartment community from W.P.
Associates, Limited, a Florida limited partnership and affiliate of Vestcor
Equities, Inc. for $16.7 million, including closing costs, all cash. Westland
Park Apartments, located in Jacksonville, Florida, is a 405 home garden
apartment community located on 27.17 acres constructed in 1989 and 1990.
On May 28, 1996, the Company acquired an apartment community from Antler
Investors, an Illinois limited partnership and affiliate of The Balcor Company
for $15.1 million, including closing costs. The Company assumed a $10.1 million
mortgage note payable with John Hancock Mutual Life Insurance Company bearing
interest of 8.25% and paid cash for the remaining $5.0 million. The Antlers
Apartments, located in Jacksonville, Florida, is a 400 home garden apartment
community located on 46.04 acres constructed in 1985.
On June 25, 1996, the Company acquired an apartment community from Middle Ridge
Apartments, L.P., a Delaware limited partnership and affiliate of Paracor
Finance, Inc. for $16.6 million, including closing costs, all cash. Chase at
Middle Ridge Apartments, located in Woodbridge, Virginia, is a 280 home garden
apartment community located on 21.20 acres constructed in 1990.
On June 26, 1996, United Dominion Realty L.P., a Virginia limited partnership,
acquired an apartment community from Riverwood Investment Company, L.P., a
California limited partnership for $14.1 million, including closing costs. The
Company assumed a $5.7 million mortgage note payable with Metropolitan Life
Insurance Company bearing interest of 9.0% and issued 136,260 operating
partnership units at $14.725, valued at $2.0 million and paid cash for the
remaining $6.4 million. Riverwood Apartments, located in Roswell, Georgia, is a
340 home garden apartment community located on 38.6 acres constructed in 1980.
2
<PAGE>
On August 15, 1996, the Company acquired a portfolio of 18 apartment
communities, containing 4,508 apartment homes, for an aggregate purchase price
of $182.6 million, including closing costs (the "Southeast Portfolio"), from
entities and individuals that control the real property owners (the "Seller") as
previously reported on Form 8-K dated August 15, 1996. The acquisition of the
Southeast Portfolio was financed through several sources which include: (i) cash
of $25.1 million, (ii) the assumption of secured debt encumbering the properties
in the aggregate amount of $109.8 million, (iii) Seller financing (unsecured) of
$25.0 million and (iv) 1.7 million newly issued shares of the Company's common
stock valued at $22.7 million ($13.50 per share). The debt assumed includes
$71.2 million provided by First Union National Bank and Wachovia Bank under
secured credit facilities. A description of each of the properties, the real
property owners and related mortgage and construction debt (exclusive of the
First Union National Bank and Wachovia Bank secured debt described above) is
outlined below:
* South Hills Apartments was conveyed by Carolina Residential
Income Properties, L.L.C. South Hills Apartments, located in
Charlotte, North Carolina, is a 144 home garden apartment
community located on 12.85 acres constructed in 1984.
* Chateau Village Apartments was conveyed by Southeast Mortgage
& Investment Corporation. Chateau Village Apartments, located
in Gastonia, North Carolina, is a 250 home garden apartment
community located on 22.98 acres constructed in 1974.
* Woodberry Apartments was purchased from Carolina Residential
Income Properties, L.L.C. Woodberry Apartments, located in
Asheville, North Carolina, is a 168 home garden apartment
community located on 22.03 acres constructed in 1987.
* Lake Brandt Apartments was coveyed by Southeast Mortgage &
Investment Corporation. Lake Brandt Apartments, located in
Greensboro, North Carolina, is a 284 home garden apartment
community located on 32.25 acres constructed in 1995.
* Northwinds Apartments was conveyed by Carolina Residential
Income Properties, L.L.C. Northwinds Apartments, located in
Greensboro, North Carolina, is a 232 home garden apartment
community located on 28.68 acres constructed in 1988 and 1989.
* Westwinds Apartments was conveyed by Carolina Residential
Income Properties, L.L.C. Westwinds Apartments, located in
Greensboro, North Carolina, is a 276 home garden apartment
community located on 20.75 acres constructed in 1986.
* Deerwood Crossing Apartments was conveyed by Southeast
Mortgage & Investment Corporation. Deerwood Crossing
Apartments, located in Winston-Salem, North Carolina, is a 285
home garden and townhouse apartment community located on 26.91
acres constructed in 1973.
* Dutch Village Apartments was conveyed by Southeast Mortgage &
Investment Corporation. Dutch Village Apartments, located in
Winston-Salem, North Carolina, is a 203 home garden and
townhouse apartment community located on 13.98 acres
constructed in 1970.
* Ramsgate Apartments was conveyed by Carolina Residential
Income Properties, L.L.C. Ramsgate Apartments, located in
Chapel Hill , North Carolina, is a 188 home garden apartment
community located on 12.96 acres constructed in 1988.
* Cumberland Trace Apartments was conveyed by from Southeast
Mortgage & Investment Corporation. Cumberland Trace
Apartments, located in Fayetteville, North Carolina, is a 248
home garden apartment community located on 21.79 acres
constructed in 1973.
* Morganton Place Apartments was conveyed by Southeast Mortgage
& Investment Corporation. The property is encumbered by an
$8.7 million mortgage note payable with Wachovia Bank bearing
a variable rate of interest at LIBOR + 1.0%. Morganton Place
Apartments, located in Fayetteville, North Carolina, is a 280
home garden apartment community located on 13.63 acres
3
<PAGE>
constructed in 1994.
* The Village at Cliffdale Apartments was conveyed by The
Village at Cliffdale, L.L.C. The property is encumbered by a
$10.5 million mortgage note payable bearing interest at
7.875%. The Village at Cliffdale Apartments, located in
Fayetteville, North Carolina, is a 356 home garden apartment
community located on 24.78 acres constructed in 1991 and 1992.
* Cape Harbor Apartments was conveyed by Southeast Mortgage &
Investment Corporation. Cape Harbor is encumbered by a $9.5
million construction loan bearing interest at LIBOR + 1.0%.
Cape Harbor Apartments, located in Wilmington, North Carolina,
is a 360 home garden apartment community located on 24.78
acres constructed in 1995 and 1996.
* Rivergate Apartments was conveyed by Rivergate Apartments Inc.
The property is encumbered by a $9.8 million mortgage note
payable at 8.0%. Rivergate Apartments, located in Columbia,
South Carolina, is a 316 home garden apartment community
located on 19.20 acres constructed in 1989.
* Stonesthrow Apartments was conveyed by Carolina Residential
Income Properties, L.L.C. Stonesthrow Apartments, located in
Greenville, South Carolina, is a 388 home garden apartment
community located on 26.10 acres constructed in 1990 and 1995.
* Westgate Apartments was conveyed by Spartanburg Multi-Family
Associates. Westgate Apartments, located in Spartanburg,
South Carolina, is a 122 home garden apartment community
located on 7.95 acres constructed in 1976.
* Lake of the Woods Apartments was conveyed by from Southeast
Mortgage & Investment Corporation. Lake of the Woods
Apartments, located in Atlanta, Georgia, is a 216 home garden
apartment community located on 22.12 acres constructed in
1989.
* Kings Arms Apartments was conveyed by Southeast Mortgage &
Investment Corporation. Kings Arms Apartments, located in
Virginia Beach, Virginia , is a 192 home garden and townhouse
apartment community located on 15.88 acres constructed in
1966.
On September 26, 1996, the Company acquired an apartment community from Park
Forest Associates, L.P., a Pennsylvannia limited partnership, for $6.5 million,
including closing costs. The Company assumed a $4.3 million mortgage note
payable from American General Life Insurance Company bearing interest of 8.125%
and paid cash for the remaining $2.2 million. Park Forest Apartments, located in
Greensboro, North Carolina, is a 151 home garden apartment community located on
11.48 acres constructed in 1987.
On October 31, 1996, the Company acquired an apartment community from Property
Asset Management, Inc., a Delaware corporation and affiliate of Lehman Brothers
Holding, Inc. for $15.2 million, including closing costs. Los Altos Apartments,
located in Orlando, Florida, is a 328 home garden apartment community located on
17.50 acres constructed in 1990.
4
<PAGE>
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Description Location
(a) Financial Statements of Businesses Acquired 6 through 15
(b) Pro Forma Financial Information 16 through 27
(c) Exhibits
Consents of Independent Public Accountants 29 through 30
5
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
Independent Auditors' Report
To the Owners of
Steeplechase Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Steeplechase Apartments for the year ended December 31, 1995. This
financial statement is the responsibility of the management of Steeplechase
Apartments. Our responsibility is to express an opinion on this 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Steeplechase
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the income and operating expenses, as described in Note 2, of
Steeplechase Apartments for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
June 20, 1996
6
<PAGE>
STEEPLECHASE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1995
REVENUES FROM RENTAL PROPERTY $1,867,137
----------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 147,446
Repairs and Maintenance 176,289
Utilities 67,354
Property Management Fees 93,375
Other Operating Expenses 169,109
----------
TOTAL RENTAL PROPERTY EXPENSES 653,573
----------
INCOME FROM RENTAL OPERATIONS $1,213,564
==========
The accompanying notes are an integral part of this statement.
7
<PAGE>
STEEPLECHASE APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1995
NOTE 1 - BASIS OF PRESENTATION
Steeplechase Apartments (The Property) consists of a 244 unit garden style
residential apartment community located in Greensboro, North Carolina together
with the existing leases. The assets that comprise the Property have been held
as an investment of RCPF Limited Partnership, a North Carolina limited
partnership (the owner), throughout the year ended December 31, 1995. The
accompanying financial statement presents the results of rental operations of
the Property as a stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition
The accompanying statement of rental operations has been prepared using the
accrual method of accounting. Certain expenses such as depreciation,
amortization, income taxes, mortgage interest expense and asset management fees
are not reflected in the statement of rental operations, as required by Rule
3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant
improvements, renovations and replacements are capitalized.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Richardson Corporation, an
affiliate of the owner of the property. Fees for such services were 5% of
gross receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to, UDRT of North Carolina, L.L.C., a wholly owned
subsidiary of United Dominion Realty Trust, Inc. on March 7, 1996. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
8
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
Independent Auditors' Report
To the Owners of
Westland Park Apartments
We have audited the accompanying statement of rental operations (as defined in
Note 2) of Westland Park Apartments for the year ended December 31, 1995. This
financial statement is the responsibility of the management of Westland Park
Apartments. Our responsibility is to express an opinion on this 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
Current Report on Form 8-K of United Dominion Realty Trust, Inc.), as described
in Note 4, and is not intended to be a complete presentation of Westland Park
Apartments' revenues and expenses.
In our opinion, the statement referred to above presents fairly, in all material
respects, the income and operating expenses, as described in Note 2, of Westland
Park Apartments for the year ended December 31, 1995, in conformity with
generally accepted accounting principles.
/s/ L. P. Martin & Company, P.C.
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
June 18, 1996
9
<PAGE>
WESTLAND PARK APARTMENTS
STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1995
REVENUES FROM RENTAL PROPERTY $2,771,484
----------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 250,083
Repairs and Maintenance 304,307
Utilities 105,284
Property Management Fees 152,463
Other Operating Expenses 377,894
-------
TOTAL RENTAL PROPERTY EXPENSES 1,190,031
---------
INCOME FROM RENTAL OPERATIONS $1,581,453
==========
The accompanying notes are an integral part of this statement.
10
<PAGE>
WESTLAND PARK APARTMENTS
NOTES TO THE STATEMENT OF RENTAL OPERATIONS
YEAR ENDED DECEMBER 31, 1995
NOTE 1 - BASIS OF PRESENTATION
Westland Park Apartments (The Property) consists of a 405 unit garden style
residential apartment community located in Jacksonville, Florida together with
the existing leases. The assets that comprise the Property have been held as an
investment of W. P. Associates, Ltd., a Florida limited partnership (the
owner), throughout the year ended December 31, 1995. The accompanying financial
statement presents the results of rental operations of the Property as a
stand-alone entity.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue and Expense Recognition
The accompanying statement of rental operations has been prepared using the
accrual method of accounting. Certain expenses such as depreciation,
amortization, income taxes, mortgage interest expense and asset management fees
are not reflected in the statement of rental operations, as required by Rule
3-14 of Regulation S-X of the Securities and Exchange Commission.
Repairs and Maintenance
Repairs and maintenance costs are expensed as incurred, while significant
improvements, renovations and replacements are capitalized.
NOTE 3 - PROPERTY MANAGEMENT FEES
Property management services were provided through Vestcor Realty Management,
Inc., an affiliate of the owner of the property. Fees for such services were
5 1/2% of gross receipts from operations.
NOTE 4 - SALE OF PROPERTY
The property was sold to United Dominion Realty Trust, Inc. on May 9, 1996. This
statement of rental operations has been prepared to be included in a Current
Report on Form 8-K to be filed by United Dominion Realty Trust, Inc.
11
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
Independent Accountants' Compilation Report
To the Owners of
Steeplechase Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization, income taxes, and asset
management fees of Steeplechase Apartments for the two months ended February 29,
1996, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have
not audited or reviewed the accompanying financial statement and, accordingly,
do not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
June 20, 1996
12
<PAGE>
STEEPLECHASE APARTMENTS
STATEMENT OF RENTAL OPERATIONS
TWO MONTHS ENDED FEBRUARY 29, 1996
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $320,076
--------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 24,600
Repairs and Maintenance 30,473
Utilities 12,843
Property Management Fees 15,986
Other Operating Expenses 27,110
--------
TOTAL RENTAL PROPERTY EXPENSES 111,012
--------
INCOME FROM RENTAL OPERATIONS $209,064
========
13
<PAGE>
[L.P. MARTIN & COMPANY LETTERHEAD]
Independent Accountants' Compilation Report
To the Owners of
Westland Park Apartments
We have compiled the accompanying statement of rental operations exclusive of
mortgage interest expense, depreciation, amortization, income taxes, and asset
management fees of Westland Park Apartments for the four months ended April 30,
1996, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of the management and owners. We have
not audited or reviewed the accompanying financial statement and, accordingly,
do not express an opinion or any other form of assurance on it.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the results of operations. Accordingly, this financial statement is not
designed for those who are not informed about such matters.
/s/ L. P. Martin & Company, P.C.
L. P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
June 18, 1996
14
<PAGE>
WESTLAND PARK APARTMENTS
STATEMENT OF RENTAL OPERATIONS
FOUR MONTHS ENDED APRIL 30, 1996
(See Independent Accountants' Compilation Report)
REVENUES FROM RENTAL PROPERTY $958,123
--------
RENTAL PROPERTY EXPENSES:
Real Estate Taxes 89,401
Repairs and Maintenance 108,053
Utilities 36,889
Property Management Fees 52,665
Other Operating Expenses 125,652
-------
TOTAL RENTAL PROPERTY EXPENSES 412,660
-------
INCOME FROM RENTAL OPERATIONS $545,463
========
15
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
The consolidated pro forma balance sheet at September 30, 1996 is not
presented as the acquisitions of Steeplechase Apartments and Westland Park
Apartments were acquired on March 7, 1996, and May 9, 1996, respectively.
Consequently, these acquisitions are reflected in the Company's unaudited
consolidated balance sheet at September 30, 1996 included in the Company's
quarterly report on Form 10-Q for the quarter then ended.
The following consolidated pro forma statements of operations for the
year ended December 31, 1995 and for the nine months ended September 30, 1996,
assume the acquisitions occurred at the beginning of each period presented.
The consolidated pro forma statements of operations have been prepared
by the management of the Company. The consolidated pro forma statements of
operations are not necessarily indicative of the results that would have
occurred had the acquisitions been completed on the dates indicated, nor are
purported to be indicative of future results. The consolidated pro forma
statements of operations should be read in conjunction with the Company's
audited consolidated financial statements for the year ended December 31, 1995
(included in the Company's Form 10-K for the year ended December 31, 1995) and
its unaudited consolidated financial statements as of September 30, 1996 and for
the nine months then ended (included in the Company's Form 10-Q for the
quarterly period ended September 30, 1996) and the accompanying notes thereto.
16
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
For the Twelve Months Ended December 31, 1995
(Unaudited)
(In thousands of dollars, except per share data)
<TABLE>
<CAPTION>
ACQUISITIONS
PREVIOUSLY
REPORTED ON JUNE 30, 1995 AND
FORM 8-K DATED DECEMBER 28, 1995
JUNE 30, 1995 AND ACQUISITIONS PRO FORMA
FORM 8-K DATED PRO FORMA BEFORE 1996
HISTORICAL (1) DECEMBER 28, 1995 (2) ADJUSTMENTS (3) ACQUISITIONS
--------------- ---------------------- ---------------- -------------
<S> <C>
Income
Rental Income $195,240 $6,519 $1,045 $202,804
Interest and dividend income 1,692 (269)(4) 1,423
------- ------ ---------- --------
196,932 6,519 776 204,227
Expenses
Rental Expenses
Utilities 14,464 430 64 14,958
Repairs & maintenance 30,374 895 98 31,367
Real estate taxes 14,058 504 67 14,629
Property management 5,300 284 (25)(5) 5,559
Other operating expenses 17,446 844 106 18,396
Depreciation of real estate owned 38,939 1,088 (6) 40,027
Interest 40,646 532 (7) 41,178
General and administrative 4,865 4,865
Other depreciation and amortization 1,103 1,103
Other expenses:
Impairment loss on real estate held
for disposition 1,700 1,700
------- ------ ------ --------
168,895 2,957 1,930 173,782
------- ------ ------ --------
Income before gains on sales of
investments and extraordinary item 28,037 3,562 (1,154) 30,445
Gains on sales of investments 5,090 5,090
------ ----- ------ ------
Net income 33,127 3,562 (1,154) 35,535
Dividends to preferred shareholders 6,637 2,599 (8) 9,236
------ ----- ------ ------
Net income available to common shareholders $26,490 $3,562 ($3,753) $26,299
====== ===== ====== ======
Net income per common share $0.50 $0.50
===== =====
Distributions declared per common share $0.90 $0.90
===== =====
Weighted average number of common shares
outstanding 52,781 52,781
</TABLE>
<TABLE>
<CAPTION>
NON-DEVELOPMENT DEVELOPMENT
NON-DEVELOPMENT PROPERTIES DEVELOPMENT PROPERTIES
PROPERTIES SOUTHEAST PROPERTIES SOUTHEAST
SOUTHEAST SOUTH HILLS PORTFOLIO SOUTHEAST PORTFOLIO
PORTFOLIO PRO FORMA PRO FORMA PORTFOLIO PRO FORMA
ACQUISITION (9) ADJUSTMENTS (11) ADJUSTMENTS ACQUISITION (10) ADJUSTMENTS
--------------- ---------------- ----------- ---------------- -----------
<S> <C>
Income
Rental Income $17,539 $52 $5,011
Interest and dividend income
------ -- --------- ----- -----
17,539 52 0 5,011 0
Expenses
Rental Expenses
Utilities 1,311 4 319
Repairs & maintenance 2,632 13 447
Real estate taxes 1,303 5 325
Property management 866 3 ($436)(13) 231 ($108)(18)
Other operating expenses 1,353 9 96 (14) 542 26 (19)
Depreciation of real estate owned 3,780 (15) 1,421 (20)
Interest 7,362 (16) 2,447 (21)
General and administrative
Other depreciation and amortization
Other expenses:
Impairment loss on real estate held
for disposition
----- -- ------ ----- -----
7,465 34 10,802 1,864 3,786
----- -- ------ ----- -----
Income before gains on sales of
investments and extraordinary item 10,074 18 (10,802) 3,147 (3,786)
Gains on sales of investments
------ -- ------ ----- -----
Net income 10,074 18 (10,802) 3,147 (3,786)
Dividends to preferred shareholders
------- -- ------- ----- -----
Net income available to common shareholders $10,074 $18 ($10,802) $3,147 ($3,786)
======= == ======= ===== ======
Net income per common share
Distributions declared per common share
Weighted average number of common shares 934 (17) 441(22)
outstanding
</TABLE>
<TABLE>
<CAPTION>
WESTLAND PARK AND
STEEPLECHASE
APARTMENTS PRO FORMA PRO
ACQUISITIONS (23) ADJUSTMENTS FORMA
----------------- ----------- -----
<S> <C>
Income
Rental Income $4,639 $230,045
Interest and dividend income 1,423
----- ----- --------
4,639 0 231,468
Expenses
Rental Expenses
Utilities 173 16,765
Repairs & maintenance 481 34,940
Real estate taxes 398 16,660
Property management 245 (131)(25) 6,229
Other operating expenses 547 20,969
Depreciation of real estate owned 904 (26) 46,132
Interest 1,805 (27) 52,792
General and administrative 4,865
Other depreciation and amortization 1,103
Other expenses:
Impairment loss on real estate held
for disposition 1,700
----- ----- -------
1,844 2,578 202,155
----- ----- -------
Income before gains on sales of
investments and extraordinary item 2,795 (2,578) 29,313
Gains on sales of investments 5,090
----- ----- -----
Net income 2,795 (2,578) 34,403
Dividends to preferred shareholders 9,236
------ -------- -------
Net income available to common shareholders $2,795 ($2,578) $25,167
====== ======== =======
Net income per common share $0.46
=======
Distributions declared per common share $0.90
=======
Weighted average number of common shares
outstanding 54,156
</TABLE>
17
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UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
(UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
NON-DEVELOPMENT
NON-DEVELOPMENT PROPERTIES DEVELOPMENT
PROPERTIES SOUTHEAST PROPERTIES
SOUTHEAST PORTFOLIO SOUTHEAST
PORTFOLIO PRO FORMA PORTFOLIO
HISTORICAL (1) ACQUISITION (9) ADJUSTMENTS (12) ACQUISITION (10)
------------- -------------- ---------------- ----------------
<S> <C>
Income
Rental income $175,119 $9,160 $2,265 $3,757
Interest and dividend income 1,197
------- ----- ----- -----
176,316 9,160 2,265 3,757
Expenses
Rental expenses:
Utilities 12,810 662 164 219
Repairs & maintenance 29,847 1,146 283 316
Real estate taxes 12,698 651 161 321
Property management 4,192 452 (172)(13) 184
Other operating expenses 16,852 699 232 (14) 266
Depreciation of real estate owned 33,711 2,344 (15)
Interest 35,413 4,566 (16)
General and administrative 4,192
Other depreciation and amortization 917
Impairment loss on real estate held for
disposition 290
------- ----- ----- -----
150,922 3,610 7,578 1,306
Income before gains on sales of
investments and minority interest of
unitholders in operating partnership 25,394 5,550 (5,313) 2,451
Gains on sales of investments 2,176
Minority interest of unitholders in
operating partnership (26)
------ ----- ----- -----
Net income 27,544 5,550 (5,313) 2,451
Dividends to preferred shareholders 7,284
------ ----- ----- -----
Net income available to common shareholders $20,260 $5,550 (5,313) $2,451
====== ===== ===== =====
Net income per common share $.36
=====
Distributions declared per common share $.72
=====
Weighted average number of common shares
outstanding 56,978 774 (17)
</TABLE>
<TABLE>
<CAPTION>
DEVELOPMENT
PROPERTIES WESTLAND PARK
SOUTHEAST WESTLAND PARK AND STEEPLECHASE
PORTFOLIO AND STEEPLECHASE APARTMENTS
PRO FORMA APARTMENTS PRO FORMA PRO
ADJUSTMENTS (12) AQUISITIONS (23) ADJUSTMENTS (24) FORMA
---------------- --------------- ---------------- -----
<S> <C>
Income
Rental income $929 $1,278 $95 $192,603
Interest and dividend income 1,197
---- ------ ---- --------
929 1,278 95 193,800
Expenses
Rental expenses:
Utilities 54 50 4 13,963
Repairs & maintenance 78 139 10 31,819
Real estate taxes 79 114 8 14,032
Property management (70)(18) 69 (30)(25) 4,625
Other operating expenses 89 (19) 153 11 18,302
Depreciation of real estate owned 1,316 (20) 252 (26) 37,623
Interest 2,223 (21) 499 (27) 42,701
General and administrative 4,192
Other depreciation and amortization 917
Impairment loss on real estate held for
disposition 290
----- --- --- -----
3,769 525 754 168,464
Income before gains on sales of
investments and minority interest of
unitholders in operating partnership (2,840) 753 (659) 25,336
Gains on sales of investments 2,176
Minority interest of unitholders in
operating partnership (26)
----- --- ---- ------
Net income (2,840) 753 (659) 27,486
Dividends to preferred shareholders 7,284
----- --- --- ------
Net income available to common shareholders (2,840) 753 (659) $20,202
===== === === =======
Net income per common share $0.35
======
Distributions declared per common share $.72
======
Weighted average number of common shares
outstanding 578 (22) 58,330
</TABLE>
See accompanying notes.
18
<PAGE>
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND
THE TWELVE MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
Basis of Presentation
The consolidated pro forma statements of operations on this Form 8-K reflect the
historical results of the Company adjusted to reflect the operations of: (i)
Steeplechase Apartments and Westland Park Apartments aquired on March 7, 1996
and May 9, 1996, (ii) 18 apartment communities (the "Southeast Portfolio")
acquired in an August 15, 1996 portfolio acquisition as previously reported on
Form 8-K dated August 15, 1996 (subsequently updated to reflect the results of
operations for the nine months ended September 30, 1996 on Form 8-K dated
October 31, 1996), (iii) nine apartment communities acquired in a May 4, 1995
portfolio acquisition as previously reported on Form 8-K dated June 30, 1995
and (iv) four apartment communities acquired during the second half of 1995 as
previously reported on Form 8-K dated December 28, 1995.
For presentation purposes in the consolidated pro forma statements of operations
on this Form 8-K, the Southeast Portfolio has been segregated into two
components, the development properties and the non-development properties. There
are 14 properties containing 3,196 units which are considered non-development
properties and 4 properties containing 1,312 units which are considered
development properties. The 14 non-development properties were built prior to
1995 and the four development properties had completed units available for
occupancy at various times during 1995 and 1996. For each of the periods
presented, the pro forma adjustments for the four development properties are
determined based upon the weighted average balance of the purchase price
outstanding. The weighted average balance of the purchase price outstanding was
calculated by assuming the properties were financed and acquired by the Company
on the dates on which certificates of occupancy were obtained for each unit
during 1995 and 1996.
The accompanying consolidated pro forma statements of operations assume the
following events occurred on the first day of each reporting period presented:
(i) the acquisition of Westland Park and Steeplechase Apartments with bank line
borrowings aggregating $30.2 million and a weighted average interest rate of
5.98% (the Company's weighted average market interest rate on short-term bank
borrowings in effect at the time of each of the acquisitions), (ii) the
acquisition of four apartment communities previously reported on Form 8-K dated
December 28, 1995, and (iii) the acquisition of nine apartment communities
previously reported on Form 8-K dated June 30, 1995. For 1995, in connection
with the acquisitions previously described, the pro forma statements of
operations include the April 24, 1995 sale of 4.2 million shares of 9 1/4%
Cumulative Redeemable Preferred Stock with a $25 liquidation preference value
("preferred stock"). Net proceeds from the sale of the preferred stock were used
to fund the Acquisitions Previously Reported on Form 8-K dated June 30, 1995 and
to temporarily repay in full, then existing bank debt until such time additional
acquisitions were completed. Of the 4.2 million shares sold, 2.7 million shares
were assumed to be used to acquire the Acquisitions Previously Reported on Form
8-K dated June 30, 1995 and 878,589 shares were assumed to have been used to
acquire Hunters Ridge Apartments and Mallards of Wedgewood Apartments (two of
the properties included in the acquisitions previously reported on Form 8-K
dated December 28, 1995). Therefore, such consolidated pro forma statements of
operations assume the issuance of 3.6 million shares of preferred stock from the
period January 1, 1995 to April 24, 1995 for the twelve months ended December
31, 1995. In addition, the consolidated pro forma statements of operations
assume the acquisition of the 14 non-development apartment communities contained
in the Southeast Portfolio as if it had occurred on the first day of each
reporting period presented. The pro forma statements of operations include the
effect of debt and equity incurred in connection with the acquisition of the 14
non-development apartment communities contained in the Southeast Portfolio which
includes: (i) bank lines of credit of approximately $14.0 million with a
weighted average interest rate of 6.01% (the Company's market interest rate on
short-term bank borrowings in effect at the time of the acquisition), (ii) the
assumption of secured debt encumbering the properties in the aggregate amount of
approximately $75.2 million with a weighted average interest rate of 7.30%,
(iii) Seller financing of approximately $13.9 million bearing interest of 7.10%,
and (iv) the issuance of approximately 934,000 newly issued shares of the
Company's common stock valued at $13.50 (the closing sales price of the
Company's common stock on the date of
19
<PAGE>
acquisition) per share for total consideration of $12.6 million. The
consolidated pro forma statements of operations also assume the acquisition of
the four development apartment communities contained in the Southeast Portfolio.
The pro forma statements of operations include the effects of debt and equity
incurred in connection with the acquisition of the four development apartment
communities contained in the Southeast Portfolio which includes: (i) bank lines
of credit of approximately $11.2 million with a weighted average interest rate
of 6.01% (the Company's market interest rate on short-term bank borrowings in
effect at the time of the acquisition), (ii) the assumption of secured debt
encumbering the properties in the aggregate amount of approximately $34.6
million with a weighted average interest rate of 6.59%, (iii) Seller financing
of approximately $11.1 million bearing interest of 7.10% and (iv) the issuance
of approximately 746,000 newly issued shares of the Company's common stock
valued at $13.50 per share (the closing sales price of the Company's common
stock on the date of acquisition) for total consideration of $10.1 million.
The assumption of secured debt encumbering the Southeast Portfolio
properties consists of the following: (i) four mortgage notes payable
encumbering specific properties aggregating $38.6 million, (ii) a $40
million secured senior credit facility with Wachovia Bank and (iii) a
$31.2 million secured senior credit facility with First Union National
Bank, as follows:
Specific Mortgage or Construction Notes Payable:
Loan Interest
Property Name Amount Rate
Cape Harbor* $ 9,500,000 6.531% (Variable-LIBOR + 1%)
The Village at Cliffdale 10,509,232 7.875%
Rivergate 9,837,246 8.000%
Morganton Place 8,739,750 6.531% (Variable-LIBOR + 1%)
-------------
$38,586,228
===========
*Construction Note Payable
Cross-Collateralize Secured Notes Payable:
Loan Interest
Lender Amount Rate
Wachovia Bank** $ 10,000,000 7.14%
Wachovia Bank** 5,000,000 6.98%
Wachovia Bank** 25,000,000 6.53% (Variable-LIBOR +1%)
First Union National Bank*** 20,000,000 7.75%
First Union National Bank*** 5,000,000 7.38%
First Union National Bank*** 5,000,000 7.50%
First Union National Bank*** 1,232,805 6.61% (Variable-LIBOR +1.18%)
-----------
$ 71,232,805
===========
Total Mortgage Notes Payable $109,819,033
===========
** The $40 million Wachovia Bank senior credit facility is secured by six
properties contained in the Southeast Portfolio. For purposes of this
Form 8- K, LIBOR is assumed to be 5.53% which represents the 3 month
LIBOR on August 15, 1996, the date of the acquisition. There are two
related interest rate swap agreements with Wachovia Bank in the
aggregate notional amount of $15 million under which the Company pays a
fixed-rate of interest and receives a variable-rate on the notional
amounts. The interest rate swaps effectively change the Company's
interest rate exposure from a variable-rate to a fixed-rate of 7.09%
(weighted average) on $15 million of the $40 million senior credit
facility.
*** The $31.2 million First Union National Bank senior credit facility is
secured by seven properties contained in the Southeast Portfolio. For
purposes of this Form 8- K, LIBOR is assumed to be 5.43% which
represents the 1 month LIBOR on August 15, 1996, the date of the
acquisition. There are three interest rate swap agreements with First
Union National Bank in the aggregate notional amount of $30 million
under which the Company pays a fixed-rate of interest and receives a
variable-rate on the notional
20
<PAGE>
amounts. The interest rate swaps effectively change the Company's
interest rate exposure from a variable-rate to a fixed-rate of 7.65%
(weighted average) on $30 million of the $31.2 million senior credit
facility.
The unaudited pro forma statements of operations are not necessarily indicative
of what the Company's results would have been for the nine months ended
September 30, 1996 and for the year ended December 31, 1995 if the acquisitions
had been consummated at the beginning of each period presented, nor do they
purport to be indicative of the results of operations or financial position in
future periods.
(1) Represents the Company's Historical Statements of Operations contained
in its Quarterly Report on Form 10-Q for the nine months ended
September 30, 1996 and its Annual Report on Form 10-K for the year
ended December 31, 1995.
(2) Amounts appearing under the column entitled "Acquisitions Previously
Reported on Form 8-K dated June 30, 1995 and Form 8-K dated December
28, 1995" give effect to significant acquisitions that have been
previously reported to the Securities and Exchange Commission by the
Company on Form 8-K dated June 30, 1995 and Form 8-K dated December 28,
1995. A reconciliation of net income for the twelve months ended
December 31, 1995 is as follows:
Net Income
Filing to Update Twelve Months
8-K Filed 8-K (In thousands)
--------- ----------------------- ---------------
June 30, 1995 N/A $1,821
December 28, 1995 8-K/A 1,741
-----
$3,562
=====
(3) Represents operations of the Acquisitions Previously Reported on Form
8-K Dated June 30, 1995 for the 33 day period from April 1, 1995 to May
3, 1995, which represents the period not owned by the Company during
the second quarter of 1995 (based on the operating statements of the
properties for the stub period January 1, 1995 to March 31, 1995). The
unaudited combined statements of rental operations were for the stub
period January 1, 1995 to March 31, 1995.
(4) Reflects the reduction of interest income associated with the use of
short-term investments to acquire Hunters Ridge Apartments (66 of the
365 days during 1995) and Mallards of Wedgewood Apartments (93 of the
365 days during 1995) at market interest rates in effect at the time of
the acquisition. As discussed in the "Basis of Presentation", Hunters
Ridge Apartments and Mallards of Wedgewood Apartments were assumed to
have been acquired with 878,589 shares of the preferred stock. The net
proceeds from the sale of the preferred stock were received on April
24, 1995 and were temporarily invested in short-term investments until
such time as these acquisitions occurred.
Purchase Interest Interest Income
Property Price Rate Adjustment
-------- ------------- ------ ------------
Hunters Ridge $13,403,983 6.17% $ 149,544
Mallards of Wedgewood 7,823,950 6.00% 119,610
------------- ----------
$21,227,933 $ 269,154
=========== ==========
(5) Reflects the net reduction in property management fees for the
Acquisitions Previously Reported on Form 8-K dated June 30, 1995 and
Form 8-K dated December 28, 1995. The Company internally managed its
apartment portfolio at a then assumed cost of approximately 3.5% of
rental income (based on 1994 actual information). The Company uses 98%
of the amount reported as rental income in calculating the property
management fee, as 2% of the amount reported as rental income is
assumed to be other income which is not subject to management fee. As
documented in Notes 13 and 18, based upon 1995 actual information, the
Company internally managed its apartment properties at an assumed cost
of approximately 2.5% of rental income. The decrease in the management
fee from 3.5% in 1994 to 2.5% in 1995 was a result of the economies of
scale and efficiencies the Company achieved due to the significant
growth experienced by
21
<PAGE>
the Company during this same time.
(6) Reflects the net adjustments to depreciation expense to record the
Acquisitions Previously Reported on Form 8-K dated June 30, 1995 and
December 28, 1995 at the beginning of each period presented.
Depreciation is computed on a straight-line basis over the estimated
useful lives of the related assets. Buildings have been depreciated
over 35 years and other improvements over 15 years based upon the
initial cost of the Acquisitions Previously Reported on Form 8-K dated
June 30, 1995 of $65.7 million and Acquisitions Previously Reported on
Form 8-K dated December 31, 1995 of $32.9 million. The allocation and
estimated useful lives are as follows:
Acquisitions Previously Reported on Form 8-K dated June 30, 1995:
Estimated Twelve Month
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment**
-------------- ----------- ------------
Building $ 50,495,338 35 $ 492,931
Other Improvements 2,916,939 15 66,441
Land 12,292,524 N\A --
---------- -----------
$ 65,704,801 $ 559,372
============ ===========
** The Acquisitions Previously Reported on Form 8-K Dated June 30, 1995
were purchased by the Company on May 4, 1995, as such, the depreciation
adjustment for the twelve months ended December 31, 1995 is computed
for the 123 day period (out of 360 days) the properties were not owned
by the Company.
Acquisitions Previously Reported on Form 8-K dated December 28, 1995:
Estimated Twelve Month
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment**
-------------- ----------- ------------
Building $ 25,438,503 35 $ 442,549
Other Improvements 2,138,662 15 86,814
Land 5,290,780 N\A --
------------ -------------
$ 32,867,945 $ 529,363
============ =============
Total $ 98,572,746 $ 1,088,735
============ ============
** The Acquisitions Previously reported on Form 8-K Dated December 28,
1995 were purchased by the Company at various times during the second
and third quarters of 1995. The depreciation adjustment is computed for
each property based on the number of days the properties were not owned
by the Company. The weighted average number of days the properties were
not owned by the Company during 1995 was 219.20 days (out of 360 days).
(7) Reflects the additional interest expense associated with the
Acquisitions Previously Reported on Form 8-K dated December 28, 1995 as
follows: (i) variable-rate bank debt aggregating $2.7 million used to
fund the acquisitions at assumed interest rates equal to market rates
in effect at the time of each respective acquisition, (ii) the
assumption of a fixed-rate mortgage note in the amount of $3.3 million
bearing interest of 7.6% in connection with the acquisition of Marble
Hill Apartments and (iii) the assumption of a $5.6 million
variable-rate tax-exempt housing bond bearing interest of 5.14% in
connection with the acquisition of Andover Place Apartments.
22
<PAGE>
Twelve Month
Amount Interest Interest
Property Type of Debt Debt Rate Adjustment**
- -------- ------------ --------------- ------- -------------
Marble Hill Bank Debt $ 2,629,662 6.48% $126,517
Marble Hill Mortgage Debt 3,344,066 7.60% 188,697
Andover Place Bank Debt 46,284 6.48% 2,227
Andover Place Tax-Exempt Bonds 5,620,000 5.14% 214,475
----------- ----- -----------
$11,640,012 $531,916
============= ==========
** For the twelve months ended December 31, 1995, the interest expense
adjustment is for 271 days (based on a 365 day year) as the properties
were purchased on September 28, 1995.
(8) Reflects the adjustment to net income to record dividends paid to
preferred shareholders on 3,598,001 shares of preferred stock in
calculating net income available to common shareholders for the 114 day
period (out of 365 days) from the period January 1, 1995 to April 24,
1995 for the twelve months ended December 31, 1995.
(9) Represents the actual results of operations for the 14 properties
containing 3,196 units which are considered non-development properties.
A reconciliation of the combined rental operations of the development
and non-development properties to the audited combined results of
operations for the twelve months ended December 31, 1995 and the
unaudited combined results of operations for the six months ended June
30, 1996, as appearing in Form 8-K dated August 15, 1996, is as
follows:
Net Income Net Income
Twelve Months Six Months
Properties (In 000's) (In 000's)
---------- ----------------- --------------
Development Properties $ 3,147 $2,451
Non-Developmement Properties 10,074 5,550
------- -----
$13,221 $8,001
======= ======
(10) Represents the actual results of operations for the 4 properties
containing 1,312 units which are considered development properties for
the six month period ended June 30, 1996. See Note 9 above.
(11) Represents operations of South Hills Apartments for the 29 day period
from January 1, 1995 to January 29, 1995, which represents the period
not owned by the Sellers of the Southeast Portfolio during 1995 (based
on the unaudited operating statement of the property for the stub
period January 30, 1995 to December 31, 1995).
(12) Represents the pro forma results of operations for the 14
non-development properties and the four development properties for the
the 45 day period from July 1, 1996 to August 15, 1996, which was the
period that the properties were not owned by the Company during the
quarter ended September 30, 1996 (based on the unaudited combined
statement of rental operations for the 182 day stub period from January
1, 1996 to June 30, 1996). The unaudited combined statement of rental
operations was for the stub period January 1, 1996 to June 30, 1996, as
appearing in Form 8-K dated August 15, 1996 (See Notes 9 and 10 above).
(13) Reflects the net decrease in property management fees for the
non-development properties. The Company internally manages its
apartment properties at an assumed cost of approximately 2.5% of rental
income (based upon 1995 actual information). The Company uses 98% of
the amount reported as rental income in calculating the property
management fee, as 2% of the amount reported as rental income is
assumed to be other income which is not subject to management fee.
(14) Represents the net increase in insurance expense to reflect that the
Company insures its apartments for approximately $29.97 per unit more
than the historical insurance expense of the 3,196 apartment units for
the the non-development properties contained in Southeast Portfolio
(the nine months ended September
23
<PAGE>
30, 1996, includes a pro forma adjustment for 227 out of 366 days).
(15) Reflects the net adjustments to depreciation expense to record the
non-development properties in the Southeast Portfolio acquisition at
the beginning of each period presented. Depreciation is computed on a
straight-line basis over the useful lives of the related assets based
upon the actual purchase price allocation of the Southeast Portfolio.
Buildings have been depreciated over 35 years and other improvements
over a weighted average life of 7.1622 years based upon the initial
cost of the non-development properties in the Southeast Portfolio of
$115.7 million. The allocation and useful lives are as follows for the
non-development properties:
<TABLE>
<CAPTION>
Twelve Months Nine Months
Allocation of Useful Life Depreciation Depreciation
Purchase Price In Years Adjustment** Adjustment**
-------------- ----------- ------------ -----------
<S> <C>
Building $ 96,637,354 35 $2,761,067 $1,712,465
Other Improvements 7,296,003 7.1622 1,018,681 631,805
Land 11,739,024 N\A -- --
------------ ----------- -----------
$115,672,381 $3,779,748 $2,344,270
============ =========== ===========
</TABLE>
** The nine months ended September 30, 1996, includes a pro forma
adjustment for 227 out of 366 days. The twelve months ended December
31, 1995 includes a pro forma adjustment for the full year.
(16) Reflects the additional interest expense associated with the
acquisition of the non-development properties contained in the
Southeast Portfolio as follows: (i) variable-rate bank debt aggregating
$14.0 million used to fund the acquisition at assumed interest rates
equal to market rates in effect at the time of the acquisition of
6.01%, (ii) the assumption of secured debt in the amount of $75.2
million which includes two mortgage notes aggregating $20.3 million and
seven cross-collateralized notes aggregating $54.9 million with a
weighted average interest rate of 7.36%, and (iii) the issuance of a
fixed-rate $13.9 million note to the Seller of the Southeast Portfolio
bearing interest of 7.10%.
<TABLE>
<CAPTION>
Weighted
Average Twelve Month Nine Month
Interest Interest Expense Interest Expense
Type of Debt Amount Rate Adjustment** Adjustment**
- ------------ ------------- -------- ------------- ---------------
<S> <C>
Bank Lines $ 13,982,880 6.01% $ 840,371 $ 521,214
Secured Debt* 75,175,680 7.36% 5,534,563 3,432,639
Note to Seller 13,902,591 7.10% 987,084 612,208
------------- ----------- -----------
$103,061,151 $7,362,018 $4,566,061
============ =========== ===========
</TABLE>
** The nine months ended September 30, 1996, includes a pro forma
adjustment for 227 out of 366 days. The twelve months ended December
31, 1995 includes a pro forma adjustment for the full year.
(17) Represents the issuance of 934,165 shares of the Company's common stock
to the Seller of the Southeast Portfolio at $13.50 per share
attributable to the non-development properties in the Southeast
Portfolio based upon the aggregate allocated purchase price. The shares
are assumed to have been outstanding from the beginning of each period
presented. The nine months ended September 30, 1996, includes a pro
forma adjustment for 227 out of 274 days. The twelve months ended
December 31, 1995 includes a pro forma adjustment for the full year.
(18) Reflects the net decrease in property management fees for the
development properties. The Company internally manages its apartment
properties at an assumed cost of approximately 2.5% of rental income
(based upon 1995 actual information). The Company uses 98% of the
amount reported as rental income in calculating the property management
fee, as 2% of the amount reported as rental income is assumed to be
other income which is not subject to management fee.
24
<PAGE>
(19) Represents the net increase in insurance expense to reflect that the
Company insures its apartments for approximately $29.97 per unit more
than the historical insurance expense of the 1,312 apartment units for
the development properties contained in Southeast Portfolio. Since the
four development properties were under various stages of construction
during 1995 and 1996, the weighted average number of units outstanding
for both periods presented is used in the calculation of the insurance
expense pro forma adjustment. For the twelve months ended December 31,
1995, and the nine months ended September 30, 1996, the weighted
average number of development units outstanding was 861 and 1,241 (the
nine months ended September 30, 1996, includes a pro forma adjustment
for 227 out of 366 days), respectively.
(20) Reflects the net adjustments to depreciation expense to record the
development properties in the Southeast Portfolio acquisition at the
beginning of each period presented. Depreciation is computed on a
straight-line basis over the useful lives of the related assets based
upon the actual purchase price allocations of the Southeast Portfolio.
Buildings have been depreciated over 35 years and other improvements
over a weighted average life of 6.7 years based upon the initial cost
of the development properties in the Southeast Portfolio of $67.0
million. The allocation and useful lives are as follows for the
development properties:
For the twelve months ended December 31, 1995:
<TABLE>
<CAPTION>
Weighted Average Twelve Months
Allocation of Allocation of Useful Life Depreciation
Purchase Price Purchase Price** In Years Adjustment***
-------------- ---------------- ---------- -------------
<S> <C>
Building $57,967,420 $37,151,197 35 $ 1,061,463
Other Improvements 4,048,512 2,408,985 6.7 359,550
Land 4,952,938 2,938,969 N\A --
----------- ----------- -----------
$66,968,870 $42,499,151 $ 1,421,013
============= =========== ===========
</TABLE>
For the nine months ended September 30, 1996:
<TABLE>
<CAPTION>
Weighted Average Nine Months
Allocation of Allocation of Useful Life Depreciation
Purchase Price Purchase Price** In Years Adjustment***
-------------- ---------------- ----------- -------------
<S> <C>
Building $57,967,420 $54,604,690 35 $ 967,624
Other Improvements 4,048,512 3,768,179 6.7 348,820
Land 4,952,938 4,623,032 N\A --
------------- ----------- -----------
$66,968,870 $62,995,901 $1,316,444
============= =========== ===========
</TABLE>
** Since the four development properties were under various stages of
construction during 1995 and 1996, the weighted average balance of the
purchase price outstanding for both periods presented is used in the
calculation for the depreciation expense pro forma adjustment.
*** The nine months ended September 30, 1996, includes a pro forma
adjustment for 227 out of 366 days. The twelve months ended December
31, 1995 includes a pro forma adjustment for the full year.
(21) Reflects the additional interest expense associated with the
acquisition of the development properties contained in the Southeast
Portfolio as follows: (i) additional bank debt aggregating $11.2
million used to fund the acquisition at assumed interest rates equal to
market rates in effect at the time of the acquisition of 6.01%, (ii)
the assumption of various secured debt aggregating $34.6 million
bearing a weighted average interest rate of 6.76% which includes one
mortgage note, one construction note and seven cross- collateralized
notes (See Note 3 of the Notes to the Consolidated Balance Sheet) and
(iii) the issuance of a fixed-rate $11.1 million note to the Seller of
the Southeast Portfolio bearing interest of 7.10%.
25
<PAGE>
For the twelve months ended December 31, 1995:
<TABLE>
<CAPTION>
Twelve Months
Development Weighted Average Weighted Average Interest Expense
Property Total Debt Debt Outstanding Interest Rate Adjustment**
----------- ---------- ----------------- ---------------- -----------------
<S> <C>
Morganton Place $12,386,796 $11,264,470 6.537781% $ 736,446
Lake Brandt 12,000,041 7,495,453 7.016978% 525,954
Cape Harbor 16,733,447 2,868,373 6.540838% 187,616
Stonesthrow 15,781,975 14,919,438 6.684529% 997,294
---------- ---------- ----------
$56,902,259 $36,547,734 $2,447,310
============= ============== ===========
</TABLE>
For the nine months ended September 30, 1996:
<TABLE>
<CAPTION>
Development Weighted Average Weighted Average Interest Expense
Property Total Debt Debt Outstanding Interest Rate Adjustment**
- ----------- ---------- ---------------- ---------------- ---------------
<S> <C>
Morganton Place $ 12,386,796 $ 12,386,796 6.537781% $ 502,266
Lake Brandt 12,000,041 12,000,041 7.016978% 522,249
Cape Harbor 16,733,447 13,410,168 6.540838% 544,017
Stonesthrow 15,781,975 15,781,975 6.684529% 654,300
---------- ---------- ----------
$ 56,902,259 $ 53,578,980 $2,222,832
============= =============== ===========
</TABLE>
** Since the four development properties were under various stages of
construction during 1995 and 1996, the interest expense pro forma
adjustment is based on the weighted average amount of debt outstanding
as determined by the weighted average balance of the purchase price
outstanding during each of the periods presented. For the nine months
ended September 30, 1996, the interest expense adjustment is calculated
on 227 out of 366 days.
(22) Represents the issuance of 745,675 shares of the Company's
common stock to the Seller of the Southeast Portfolio at $13.50
per share attributable to the development properties in the
Southeast Portfolio based on the aggregate allocated purchase
price. The shares are assumed to have been issued and
outstanding from the earlier of the beginning of each period
presented or the date on which certificates of occupancy were
granted for each unit contained in the development properties.
For the twelve months ended December 31, 1995 and the nine
months ended September 30, 1996, based upon the weighted
average balance of the purchase price outstanding during 1995
and 1996, the weighted average days the stock is assumed to
have been outstanding is 215.79 (out of 365 days) and 175.92
(out of 227 days), respectively.
(23) Represents the actual results of operations for Steeplechase
Apartments and Westland Park Apartments as reported elsewhere
herein.
(24) Represents the pro forma adjustments for Westland Park and
Steeplechase Apartments. For Westland Park Apartments this
represents the 8 day period from May 1, 1996 to May 9, 1996,
which was the period that the property was not owned by the
Company during 1996 and the period not included in the actual
results of operations in Note 23 (based on the average per day
unaudited statement of rental operations for the 121 day stub
period from January 1, 1996 to April 30, 1996). For
Steeplechase Apartments this represents the 6 day period from
March 1, 1996 to March 6, 1996, which was the period that the
property was not owned by the Company during 1996 and the
period not included in the actual results of operations in Note
23 (based on the average per day unaudited statement of rental
operations for the 60 day stub period from January 1, 1996 to
February 29, 1996).
(25) Reflects the net decrease in property management fees for
Westland Park and Steeplechase Apartments. The Company
internally manages its apartment properties at an assumed cost
of approximately 2.5% of rental income (based upon 1995 actual
information). The Company uses 98% of the amount reported as
rental income in calculating the property management fee, as 2%
of the amount reported as rental income is assumed to be other
income which is not subject to management fee.
26
<PAGE>
(26) Reflects the net adjustments to depreciation expense to record
Westland Park and Steeplechase Apartments acquisitions at the
beginning of each period presented. Depreciation is computed on
a straight-line basis over the useful lives of the related
assets based upon the actual purchase price allocations of the
properties. Buildings have been depreciated over 35 years and
other assets over 5, 10 or 20 years depending on the useful
life of the related asset. The weighted average life of other
assets for Westland Park and Steeplechase Apartments is
approximately 7.41 years based upon the initial cost of the
properties of $30.2 million. The allocation and useful lives
are as follows:
For the twelve months ended December 31, 1995:
Twelve Months
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment
-------------- ----------- -------------
Building $25,133,903 35 $718,112
Other Improvements 1,375,227 7.405319 185,707
Land 3,689,016 -- --
---------- ---------
Total $30,198,146 $903,819
=========== ========
For the nine months ended September 30, 1996:
Nine Months
Allocation of Useful Life Depreciation
Purchase Price In Years Adjustment**
-------------- ----------- -------------
Building $25,133,903 35 $200,384
Other Improvements 1,375,227 7.405319 51,820
Land 3,689,016 -- --
-------------- -----------
$30,198,146 $252,204
============= ===========
** The nine months ended September 30, 1996, includes a pro forma
adjustment for 102.13 out of 366 days (66 days for Steeplechase
Apartments and 129 days for Westland Park Apartments). The
twelve months ended December 31, 1995 includes a pro forma
adjustment for the full year.
(27) Reflects the additional interest expense associated with the
acquisition of Westalnd Park and Steeplechase Apartments on
variable-rate bank debt aggregating $30.2 million used to fund the
acquisitions at assumed interest rates equal to market rates in effect
at the time of each respective acquisition.
For the twelve months ended December 31, 1995:
Twelve Months
Interest Expense
Property Total Debt Interest Rate Adjustment**
- ----------- ---------- ------------- ----------------
Westland Park $ 16,699,276 6.0296% $1,006,899
Steeplechase 13,498,870 5.9144% 798,376
---------- ---------
$ 30,198,146 $1,805,275
============= =============
For the nine months ended September 30, 1996:
Nine Months
Interest Expense
Property Total Debt Interest Rate Adjustment***
- -------- -------------- --------------- ---------------
Westland Park $16,699,276 6.0296% $354,891
Steeplechase 13,498,870 5.9144% 143,969
------------- --------------
$30,198,146 $498,860
============= =============
** For the twelve months ended December 31, 1995, the interest expense
adjustment is for the full year.
*** For the nine months ended September 30, 1996, the interest expense
adjustment for Westland Park and Steeplechase Apartments is for 129 and
66 days, respectively (based on a 366 day year).
27
<PAGE>
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED DOMINION REALTY TRUST, INC.
Date: November 15, 1996 /s/ James Dolphin
----------------------------- ------------------------------------
James Dolphin, Senior Vice President
Chief Financial Officer
Date: November 15, 1996 /s/ Jerry A. Davis
----------------------------- ------------------------------
Jerry A. Davis, Vice President
Corporate Controller
<PAGE>
Exhibit 23(a)
[L.P. Martin & Company Letterhead]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
United Dominion Realty Trust, Inc.
We consent to the incorporation by reference in the previously filed
Registration Statement Form S-3 No. 33-40433, Registration Statement Form S-3
No. 33-32930, Registration Statement Form S-3 No. 33-55159, Registration
Statement Form S-3 No. 33-64275, Registration Statement Form S-3 No. 333-11207,
Registration Statement Form S-3 No. 333-15133, Registration Statement Form S-8
No. 33-47926, Registration Statement Form S-8 No. 33-48000, and Registration
Statement Form S-8 No. 33-58201 of United Dominion Realty Trust, Inc. of our
report dated June 20, 1996, with respect to the statement of rental operations
of Steeplechase Apartments for the year ended December 31, 1995, included in
this Form 8-K dated October 31, 1996.
/s/ L.P. Martin & Company, P.C.
- -------------------------------
L.P. Martin & Company, P.C.
L.P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 13, 1996
<PAGE>
Exhibit 23(b)
[L.P. Martin & Company Letterhead]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
United Dominion Realty Trust, Inc.
We consent to the incorporation by reference in the previously filed
Registration Statement Form S-3 No. 33-40433, Registration Statement Form S-3
No. 33-32930, Registration Statement Form S-3 No. 33-55159, Registration
Statement Form S-3 No. 33-64275, Registration Statement Form S-3 No. 333-11207,
Registration Statement Form S-3 No. 333-15133, Registration Statement Form S-8
No. 33-47926, Registration Statement Form S-8 No. 33-48000, and Registration
Statement Form S-8 No. 33-58201 of United Dominion Realty Trust, Inc. of our
report dated June 18, 1996, with respect to the statement of rental operations
of Westland Park Apartments for the year ended December 31, 1995, included in
this Form 8-K dated October 31, 1996.
/s/ L.P. Martin & Company, P.C.
- -------------------------------
L.P. Martin & Company, P.C.
L.P. Martin & Company, P.C.
Certified Public Accountants
Richmond, Virginia
November 13, 1996
