SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
---------- ----------
Commission file number 0-13754
NOONEY REALTY TRUST, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Missouri
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
43-1339136
- --------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)
7701 Forsyth Boulevard, St. Louis, Missouri 63105
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 863-7700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------------------------- -----------------------------------------
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - $1.00 Par Value
- --------------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ].
<PAGE>
[ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
PICO Holdings, Inc. ("PICO"), PICO's subsidiary, Physicians Insurance
Company of Ohio ("Physicians"), Physicians' subsidiary, Sequoia Insurance
Company ("Sequoia"), Physicians' indirect subsidiary, American Physicians Life
Insurance Company ("APL"), Physicians' subsidiary, Summit Global Management Inc.
("Summit") and Physicians' subsidiary, Physicians Investment Company, which is
the parent of APL, filed a joint Schedule 13G with the Securities and Exchange
Commission on March 18, 1997. A director of the Company, John R. Hart, on such
date was the President and Chief Executive Officer of PICO. Said Schedule 13G
disclosed that said entities, collectively, beneficially owned (as defined for
13G purposes) 202,061 shares of the voting stock of the Registrant. Summit
stated it had no voting power with respect to the 117,095 shares of the
Registrant beneficially owned by Summit. Assuming, based on the foregoing that
all of said 202,061 shares of the Registrant are held by an affiliate of the
Registrant, then as of March 18, 1997, the aggregate market value of the
Registrant's voting stock held by non-affiliates of the Registrant was
$6,366,472.
As of February 1, 1997, there were 866,624 shares of the Registrant's
common stock, par value $1 per share, issued and outstanding.
Documents incorporated by reference:
(1) Portions of the Registrant's 1996 Annual Report to Shareholders are
incorporated by reference in Parts I & II of this Annual Report on Form 10-K.
(2) Portions of the Registrant's 1997 Notice of Annual Meeting of Shareholders
and Proxy Statement to be filed with the Commission within 120 days of the
Registrant's fiscal year-end are incorporated by reference in Part III of this
Annual Report on Form 10-K.
-2-
<PAGE>
PART I
ITEM 1: BUSINESS
It should be noted that this 10-K contains forward-looking information (as
defined in the Private Securities Litigation Reform Act of 1995) that involves
risk and uncertainty, including trends in the real estate investment market,
projected leasing and sales, and the future prospects for the Registrant. Actual
results could differ materially from those contemplated by such statements.
Nooney Realty Trust, Inc. (the "Registrant") is a corporation formed under The
General and Business Corporation Law of Missouri on June 14, 1984, to make
equity investments in income-producing real properties, primarily commercial and
light industrial properties. The Registrant has invested in three real property
investments as set forth in Item 2 below. The Registrant's primary investment
objectives are to preserve and protect Shareholders' capital, provide the
maximum possible cash distributions to Shareholders and provide for capital
growth through appreciation in property values. Since 1985 the Registrant has
qualified as a real estate investment trust ("REIT") under the Internal Revenue
Code. It was management's original objective to sell or refinance the
Registrant's properties approximately eight to twelve years after their
acquisition. The depression of real estate values experienced nationwide from
1988 to 1993 lengthened this time frame in order to achieve the goal of capital
appreciation.
The real estate investment market began to improve in 1994, continued this
improvement in 1995, and is expected to further continue its improvement over
the next several years. Management believes this trend should increase the value
of the Trust's properties in the future. As a result, the Board of Directors has
again determined that it is premature to consider selling the properties and
liquidating the Trust at this time. This policy is carefully reviewed by
management and the Board of Directors on a quarterly basis along with any
proposals or opportunities that are presented to expand or merge the Trust.
The Registrant will continue to discuss possibilities for expansion with any
interested parties in 1997, however, until a proposal is received which
management and the Board of Directors considers beneficial to the shareholders,
management will continue to manage the properties aggressively to produce the
maximum cash flow possible.
The Registrant is intended to be self-liquidating and the proceeds from the sale
or refinancing of the Registrant's real property investments will not be
invested in new properties but will be distributed to the Shareholders or, at
the discretion of management, applied to capital improvements to, or the payment
of indebtedness with respect to, existing properties, other expenses or the
establishment of reserves.
-3-
<PAGE>
The business in which the Registrant is engaged is highly competitive. The
Registrant's investment properties are located in or near major urban areas and
are subject to competition from other similar types of properties in such areas.
The Registrant competes for tenants for its properties with numerous other real
estate investment trusts, as well as with individuals, corporations, real estate
limited partnerships and other entities engaged in real estate investment
activities. Such competition is based on such factors as location, rent
schedules and services and amenities provided.
The Registrant has retained Nooney Advisors Ltd., L.P. (the "Advisor"), a
Missouri limited partnership, to serve as the Registrant's investment and
financial counselor and to supervise the day-to-day operations of the
Registrant. Property management services for the Registrant's investment
properties are provided by "independent contractors" (as defined in the Internal
Revenue Code and regulations promulgated thereunder), which independent
contractors include Nooney Krombach Company, an affiliate of the Advisor. The
Registrant has no employees. The Registrant's executive officers are listed
under a separate Item below.
ITEM 2: PROPERTIES
On March 28, 1985, the Registrant purchased The Atrium at Alpha Business Center
("The Atrium"), an office building located at 2626 East 82nd Street in
Bloomington, Minnesota, a suburb of Minneapolis. The Atrium contains
approximately 89,000 net rentable square feet and is located, along with a
parking lot that will accommodate 336 cars, on a 4.2 acre site. The purchase
price of The Atrium was $8,393,716. The Atrium was 95% leased by 25 tenants at
year-end.
On January 22, 1986, the Registrant purchased the Applied Communications, Inc.
Building (the "ACI Building"), an office building located at 330 South 108th
Avenue in Omaha, Nebraska. The ACI Building contains approximately 70,000 net
rentable square feet and is located on a 7.59 acre site which provides paved
parking for 400 cars. The building is 100% leased by a single tenant, Applied
Communications, Inc. The purchase price of the ACI Building was $6,401,008.
On December 16, 1986, the Registrant purchased the Franklin Park Distribution
Center ("Franklin Park"), a warehouse and distribution facility located at 3431
N. Powell Avenue in Franklin Park, Illinois, a suburb west of Chicago. Franklin
Park contains approximately 162,000 net rentable square feet and is located on a
5 acre site which provides parking for 100 cars. The purchase price of Franklin
Park was $4,301,494. Franklin Park was 100% leased by 2 tenants at year-end.
Reference is made to Note 3 of Notes to Financial Statements incorporated by
reference to the Registrant's 1996 Annual Report to Shareholders under the
heading "Financial Statements and Notes" for a description of the mortgage
indebtedness secured by the Registrant's real property investments. Reference is
also made to Note 6 of Notes to Financial Statements for a discussion of
revenues derived from major tenants.
-4-
<PAGE>
The following table sets forth certain information as of December 31, 1996,
relating to the properties owned by the Registrant.
<TABLE>
<CAPTION>
AVERAGE
ANNUALIZED
EFFECTIVE
TOTAL BASE RENT PRINCIPAL TENANTS
SQUARE ANNUALIZED PER SQUARE PERCENT OVER 10% OF PROPERTY LEASE
PROPERTY FEET BASE RENT FOOT LEASED SQUARE FOOTAGE EXPIRATION
- ------------------- ------- ---------- ---------- ------- ----------------------------------- ----------
<C> <C> <C> <C> <C> <C> <C>
Atrium At Alpha Case Corp. (23%) 1999
Business Center 89,000 $1,125,150 $13.16 95% Travel Realty Corp. (20%) 2001
Applied
Communications Inc.
Building 70,000 $ 909,996 $13.00 100% Applied Communications, Inc. (100%) 1999
Franklin Park Household Finance (57%) 1999
Distribution Center 162,000 $ 493,305 $ 3.04 100% Golden Dipt Co. (43%) 1998
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
The Registrant is not a party to any material pending legal proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of Shareholders during the fourth
quarter of fiscal 1996.
-5-
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the executive
officers of the Registrant. These officers have been elected to terms which
expire on May 12, 1997:
Has served as
Name Position Age officer since
- ------------------------- --------------------------------- --- -------------
Gregory J. Nooney, Jr.(1) Chairman of the Board 66 1984
and Chief Executive Officer
Patricia A. Nooney (1) President, Secretary and 40 1990
Treasurer
- ---------------
(1) Patricia A. Nooney is the daughter of Gregory J. Nooney, Jr.
Gregory J. Nooney, Jr. has served as Chairman of the Board and Chief Executive
Officer of Nooney Company since May 1983. Mr. Nooney joined Nooney Company in
1954 and served as President from 1969 to May 1983. Nooney Company, which was
founded in 1945, is a diversified real estate investment management company.
During 1993 Lindbergh Boulevard Partners, L.P. filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code. Gregory J. Nooney is the
general partner of Nooney Ltd. II, L.P, which in turn is the general partner of
Nooney Development Partners, L.P., which in turn is the general partner of
Nooney-Hazelwood Associates, L.P. which is the general partner of Lindbergh
Boulevard Partners, L.P. Lindbergh Boulevard Partners, L.P. emerged from
bankruptcy on May 17, 1994, when its Plan of Reorganization was confirmed.
Patricia A. Nooney is Senior Vice President and Chief Financial Officer of
Nooney Krombach Company, a wholly-owned subsidiary of Nooney Company. Ms. Nooney
joined Nooney Company in 1981 and has served as an officer since 1985.
PART II
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information required by Item 201 of Regulation S-K is incorporated by
reference to the Registrant's 1996 Annual Report to Shareholders under the
headings "Market Information" and "Dividends".
ITEM 6: SELECTED FINANCIAL DATA
The information required by Item 301 of Regulation S-K is incorporated by
reference to the Registrant's 1996 Annual Report to Shareholders under the
heading "Financial Highlights".
-6-
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by Item 303 of Regulation S-K is incorporated by
reference to the Registrant's 1996 Annual Report to Shareholders under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations".
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Registrant are incorporated by reference to the
Registrant's 1996 Annual Report to Shareholders. Financial Statement Schedules
are filed herewith as Exhibit 99.1 and are incorporated herein by reference. The
supplementary financial information specified by Item 302 of Regulation S-K is
not applicable.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 401 and Item 405 of Regulation S-K regarding
nominees and directors is incorporated by reference to the Registrant's 1997
Notice of Annual Meeting of Shareholders and Proxy Statement (the "1997 Proxy
Statement") under the heading "Election of Directors". Information regarding
executive officers is set forth in Part I of this report.
ITEM 11: EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K is incorporated by
reference to the Registrant's 1997 Proxy Statement under the heading "Executive
Compensation".
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 403 of Regulation S-K is incorporated by
reference to the Registrant's 1997 Proxy Statement under the heading "Security
Ownership of Certain Beneficial Owners and Management".
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 404 of Regulation S-K is incorporated by
reference to the Registrant's 1997 Proxy Statement under the heading "Certain
Business Relationships".
-7-
<PAGE>
PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements:
The financial statements of the Registrant are incorporated by reference
to the Registrant's 1996 Annual Report to Shareholders.
2. Financial Statement Schedules (filed herewith as Exhibit 99.1):
Schedule III - Real Estate and Accumulated Depreciation
All other schedules are omitted because they are inapplicable or not
required under the instructions.
3. Exhibits:
See Exhibit Index on Page 11.
(b) Reports on Form 8-K:
During the last quarter of the period covered by this report, the Registrant
filed no reports on Form 8-K.
(c) Exhibits:
See Exhibit Index on Page 11.
(d) Not Applicable.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
NOONEY REALTY TRUST, INC.
Date: March 24, 1997 By: Gregory J. Nooney, Jr.
-----------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on March 24, 1997, by the following persons on behalf of
the Registrant and in the capacities indicated.
Gregory J. Nooney, Jr.
---------------------------------------
Gregory J. Nooney, Jr.
Chief Executive Officer and Director
Patricia A. Nooney
---------------------------------------
Patricia A. Nooney
President, Secretary, Treasurer and
Director
-9-
<PAGE>
Gene K. Beare
---------------------------------------
Gene K. Beare
Director
Bruce P. Hayden
---------------------------------------
Bruce P. Hayden
Director
James P. Ingram
---------------------------------------
James P. Ingram
Director
Robert E. Kresko
---------------------------------------
Robert E. Kresko
Director
John R. Hart
---------------------------------------
John R. Hart
Director
-10-
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
- -------------- ----------------------------------------------------------------
3.1 Articles of Incorporation dated June 12, 1984, are incorporated
by reference to Exhibit 3(a) to the Registration Statement on
Form S-11 under the Securities Act of 1933 (File No. 2-91851).
3.2 Bylaws of the Registrant, as amended, are incorporated by
reference to Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987, as filed
pursuant to Rule 13a-1 under The Securities Exchange Act of 1934
(File no. 0-13754).
10.1 Advisory Agreement between Nooney Advisors Ltd., L.P. and the
Registrant is incorporated by reference to Exhibit 10(a) to
Amendment No. 2 to the Registration Statement on Form S-11 under
the Securities Act of 1933 (File No. 2-91851).
10.2 Dividend Reinvestment Agreement between Boatmen's Trust Company
and the Registrant is incorporated by reference to Exhibit 10(d)
to Amendment No. 1 to the Registration Statement on Form S-11
under the Securities Act of 1933 (File No. 2-91851).
10.3 Dividend Reinvestment Plan is incorporated by reference to pages
A-1 - A-3 of the Prospectus of the Registrant dated September
25, 1984, as supplemented and filed pursuant to Rule 424(c)
under the Securites Act of 1933 (File No. 2-91851).
10.4 Management Contract between the Registrant and Nooney Management
Company (now Nooney Krombach Company) dated March 28, 1985, is
incorporated by reference to the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1985, as filed
pursuant to Rule 13a-1 under the Securities Exchange Act of 1934
(File No. 0-13754).
13 1996 Annual Report to Shareholders. Except for those portions
expressly incorporated by reference in this Form 10-K, the 1996
Annual Report to Shareholders is furnished for the information
of the Commission and is not to be deemed "filed" as part of
this Form 10-K.
27 Financial Data Schedule (provided for the information of the
Securities and Exchange Commission only)
99.1 Financial Statement Schedules.
-11-
<TABLE>
NOONEY REALTY TRUST, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- ------------------------- ------------ -------------------------------------- ------------- -------------------------------------
COSTS
CAPITALIZED
SUBSEQUENT TO GROSS AMOUNT AT WHICH
INITIAL COST TO TRUST ACQUISITION CARRIED AT CLOSE OF PERIOD
------------------------------------- ------------- -------------------------------------
BUILDINGS AND COSTS OF BUILDINGS AND
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS TOTAL IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- ------------------------- ------------ ---------- ------------ ----------- ------------- ---------- ------------ -----------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Atrim at
Alpha Business Center
Bloomington, Minnesota $ -- $ 822,526 $ 7,571,190 $ 8,393,716 $ 305,874 $ 822,526 $ 7,877,064 $ 8,699,590
Applied Communications,
Inc. Office Building
Omaha, Nebraska 1,257,655 5,143,353 6,401,008 150,000 1,257,655 5,293,353 6,551,008
Franklin Park
Distribution Center
Franklin Park, Illinois 488,774 3,812,720 4,301,494 610,694 488,774 4,423,414 4,912,188
All properties 4,830,236
------------ ---------- ------------ ----------- ------------- ---------- ------------ -----------
Total $ 4,830,236 $2,568,955 $ 16,527,263 $19,096,218 $ 1,066,568 $2,568,955 $ 17,593,831 $20,162,786
============ ========== ============ =========== ============= ========== ============ ===========
<CAPTION>
COLUMN F COLUMN G COLUMN H COLUMN I
------------ ------------ ----------------- ----------------
LIFE ON WHICH
DEPRECIATION
IN LATEST INCOME
ACCUMULATED DATE OF DATE STATEMENT
DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
------------ ------------ ----------------- ----------------
<C> <C> <C> <C> <C>
Atrium at
Alpha Business Center
Bloomington, Minnesota $ 2,872,651 1981 March 28, 1985 35 years
Applied Communications,
Inc. Office Building
Omaha, Nebraska 1,706,482 1984 January 22, 1986 35 years
Franklin Park
Distribution Center
Franklin Park, Illinois 1,369,033 1972 December 16, 1986 35 years
------------
Total $ 5,948,166
============ (Continued)
</TABLE>
-12-
<PAGE>
<TABLE>
NOONEY REALTY TRUST, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
- -----------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1995 1994
<C> <C> <C> <C>
(A) Reconciliation of amounts in Column E:
Balance at beginning of period $20,156,116 $19,950,156 $19,766,766
Add - Cost of improvements 29,569 205,960 205,641
Less - Cost of disposals (22,899) (22,251)
----------- ----------- -----------
Balance at end of period $20,162,786 $20,156,116 $19,950,156
=========== =========== ===========
(B) Reconciliation of amounts in Column F:
Balance at beginning of period $ 5,344,765 $ 4,730,872 $ 4,161,066
Add - Provision during the period 626,300 613,893 592,057
Less - Depreciation on disposals (22,899) (22,251)
----------- ----------- -----------
Balance at end of period $ 5,948,166 $ 5,344,765 $ 4,730,872
=========== =========== ===========
(C) The aggregate cost of real estate owned for
federal income tax purposes $20,162,786 $20,156,116 $19,950,156
=========== =========== ===========
(Concluded)
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REALTY TRUST, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000748580
<NAME> NOONEY REALTY TRUST, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 641,127
<SECURITIES> 0
<RECEIVABLES> 353,619
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,024,012
<PP&E> 20,162,786
<DEPRECIATION> 5,948,166
<TOTAL-ASSETS> 15,481,638
<CURRENT-LIABILITIES> 406,947
<BONDS> 4,830,236
0
0
<COMMON> 866,624
<OTHER-SE> 10,244,455
<TOTAL-LIABILITY-AND-EQUITY> 15,481,638
<SALES> 3,017,982
<TOTAL-REVENUES> 3,033,511
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,405,753
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 411,220
<INCOME-PRETAX> 216,538
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 216,538
<EPS-PRIMARY> .25
<EPS-DILUTED> 0
</TABLE>
