UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number 0-15465
Banyan Strategic Realty Trust
(Exact name of Registrant as specified in its charter)
Massachusetts 36-3375345
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 South Wacker Drive, Chicago, IL 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (312) 553-9800
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 .
Shares of beneficial interest outstanding as of August 14, 1995: 10,471,102
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
Consolidated Consolidated
ASSETS 1995 1994
Cash and Cash Equivalents $ 16,338,942 $ 14,769,170
Interest Receivable on
Investments 311,441 82,180
Interest Receivable on Mortgage
Loans 55,073 55,106
Accounts Receivable 161,586 107,672
Due from Affiliates --- 730,229
Investment Securities --- 1,017,236
------------ ------------
16,867,042 16,761,593
------------ ------------
Mortgage Loans Receivable (Net
of unamortized discount of
$1,631,204 and $1,808,716,
respectively) 5,275,977 5,136,229
Investment in Real Estate, at
cost:
Land 7,144,994 6,182,494
Building 36,108,019 33,152,589
Building Improvements 2,070,993 1,863,219
------------ ------------
45,324,006 41,198,302
Less: Accumulated Depreciation (1,529,115) (1,036,890)
------------ ------------
43,794,891 40,161,412
------------ ------------
Investment in Real Estate
Ventures 9,204,834 10,697,791
Deferred Financing Costs (Net of
Accumulated Amortization of
$118,484 and $21,411,
respectively) 794,847 793,649
Other Assets 759,464 533,677
------------ ------------
Total Assets $ 76,697,055 $ 74,084,351
============ ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Accounts Payable and Accrued
Expenses $ 563,315 $ 802,335
Accrued Real Estate Taxes 695,607 666,567
Mortgage Loans Payable 10,475,040 7,900,695
Bond Payable 5,500,000 5,500,000
Accrued Interest Payable --- 26,005
Unearned Revenue 19,049 39,198
Security Deposit Liability 276,108 203,659
Other Liability 686,169 290,331
------------ ------------
Total Liabilities 18,215,288 15,428,790
------------ ------------
Minority Interest in
Consolidated Partnerships 579,151 214,849
Shareholders' Equity
Shares of Beneficial Interest,
No Par Value, Unlimited
Authorization; 11,993,751
Shares Issued 106,662,313 106,662,313
Accumulated Deficit (41,393,748) (40,855,652)
Treasury Shares at Cost,
1,522,649 Shares (7,365,949) (7,365,949)
------------ ------------
Total Shareholders' Equity 57,902,616 58,440,712
------------ ------------
Total Liabilities and Share-
holders' Equity $ 76,697,055 $ 74,084,351
============ ============
Book Value Per Share of Bene-
ficial Interest (10,471,102
Shares Outstanding) $ 5.53 $ 5.58
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED BALANCE SHEETS (SUPPLEMENTAL INFORMATION)
JUNE 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
Supplemental Information
Investment Investment
Activities Activities
ASSETS 1995 1994
Cash and Cash Equivalents $ 13,893,541 $ 13,077,182
Interest Receivable on
Investments 242,216 58,422
Interest Receivable on Mortgage
Loans 55,073 55,106
Accounts Receivable 161,586 107,672
Due from Affiliates --- ---
Investment Securities --- 1,017,236
------------ ------------
14,352,416 14,315,618
------------ ------------
Mortgage Loans Receivable (Net
of unamortized discount of
$1,631,204 and $1,808,716,
respectively) 5,275,977 5,136,229
Investment in Real Estate, at
cost:
Land 7,144,994 6,182,494
Building 36,108,019 33,152,589
Building Improvements 2,070,993 1,863,219
------------ ------------
45,324,006 41,198,302
Less: Accumulated Depreciation (1,529,115) (1,036,890)
------------ ------------
43,794,891 40,161,412
------------ ------------
Investment in Real Estate
Ventures --- ---
Deferred Financing Costs (Net of
Accumulated Amortization of
$118,484 and $21,411,
respectively) 794,847 793,649
Other Assets 628,632 408,353
------------ ------------
Total Assets $ 64,846,763 $ 60,815,261
============ ============
LIABILITIES
Liabilities
Accounts Payable and Accrued
Expenses $ 337,481 $ 621,966
Accrued Real Estate Taxes 695,607 666,567
Mortgage Loans Payable 10,475,040 7,900,695
Bond Payable 5,500,000 5,500,000
Accrued Interest Payable --- 26,005
Unearned Revenue 19,049 39,198
Security Deposit Liability 276,108 203,659
Other Liability --- ---
------------ ------------
Total Liabilities 17,303,285 14,958,090
------------ ------------
Minority Interest in
Consolidated Partnerships 579,151 214,849
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED BALANCE SHEETS (SUPPLEMENTAL INFORMATION)
JUNE 30, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
Supplemental Information
Foreclosed Foreclosed
Activities Activities
ASSETS 1995 1994
Cash and Cash Equivalents $ 2,445,401 $ 1,691,988
Interest Receivable on
Investments 69,225 23,758
Interest Receivable on Mortgage
Loans --- ---
Accounts Receivable --- ---
Due from Affiliates --- 730,229
Investment Securities --- ---
------------ ------------
2,514,626 2,445,975
------------ ------------
Mortgage Loans Receivable --- ---
Investment in Real Estate, at
cost:
Land --- ---
Building --- ---
Building Improvements --- ---
------------ ------------
--- ---
Less: Accumulated Depreciation --- ---
------------ ------------
--- ---
------------ ------------
Investment in Real Estate
Ventures 9,204,834 10,697,791
Deferred Financing Costs --- ---
Other Assets 130,832 125,324
------------ ------------
Total Assets $ 11,850,292 $ 13,269,090
============ ============
LIABILITIES
Liabilities
Accounts Payable and Accrued
Expenses $ 225,834 $ 180,369
Accrued Real Estate Taxes --- ---
Mortgage Loans Payable --- ---
Bond Payable --- ---
Accrued Interest Payable --- ---
Unearned Revenue --- ---
Security Deposit Liability --- ---
Other Liability 686,169 290,331
------------ ------------
Total Liabilities 912,003 470,700
------------ ------------
Minority Interest in
Consolidated Partnerships --- ---
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Consolidated Consolidated
INCOME 1995 1994
Income From Property Operating
Activities:
Industrial $ 1,195,056 $ 1,021,901
Residential 1,639,134 1,555,386
Commercial 1,416,068 776,350
----------- -----------
Total Income From Property
Operating Activities 4,250,258 3,353,637
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans 501,077 471,234
Income on Investments 416,237 187,321
----------- -----------
Total Income From Lending
and Investing Activities 917,314 658,555
----------- -----------
Total Income 5,167,572 4,012,192
----------- -----------
EXPENSES
Expenses from Property Operating
Activities:
Operating Property Expenses 227,727 151,048
Repairs and Maintenance 489,478 358,595
Real Estate Taxes 456,427 384,008
Interest Expense 437,138 158,481
Property Management Fees 174,837 128,876
Payroll Expense 200,280 231,976
Utilities Expense 319,677 246,371
Depreciation and
Amortization 507,484 383,230
----------- -----------
Total Expenses From Property
Operating Activities 2,813,048 2,042,585
----------- -----------
Other Expenses:
Shareholder Expenses 115,904 124,027
Trustees' Fees, Expenses
and Insurance 217,945 204,868
Other Professional Fees 101,472 109,117
General and Administrative 773,650 612,573
Amortization of Deferred Loan
Fees and Financing Costs 112,796 24,548
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses (155,834) (134,986)
----------- -----------
Total Other Expenses 1,165,933 940,147
----------- -----------
Total Expenses 3,978,981 2,982,732
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures 1,188,591 1,029,460
Minority Interest in
Consolidated Partnerships (24,463) (18,646)
Income (Loss) from Operations of
Real Estate Ventures 392,600 (25,151)
----------- -----------
Net Income (Loss) $ 1,556,728 $ 985,663
=========== ===========
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares Outstanding) $ 0.15 $ 0.09
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
(SUPPLEMENTAL INFORMATION)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Supplemental Information
Investment Investment
Activities Activities
1995 1994
INCOME
Income From Property Operating
Activities:
Industrial $1,195,056 $1,021,901
Residential 1,639,134 1,555,386
Commercial 1,416,068 776,350
----------- ----------
Total Income From Property
Operating Activities 4,250,258 3,353,637
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans 501,077 471,234
Income on Investments 317,250 121,284
----------- -----------
Total Income From Lending
and Investing Activities 818,327 592,518
----------- -----------
Total Income 5,068,585 3,946,155
----------- -----------
EXPENSES
Expenses From Property
Operating Activities:
Operating Property Expenses 227,727 151,048
Repairs and Maintenance 489,478 358,595
Real Estate Taxes 456,427 384,008
Interest Expense 437,138 158,481
Property Management Fees 174,837 128,876
Payroll Expense 200,280 231,976
Utilities Expense 319,677 246,371
Depreciation and
Amortization 507,484 383,230
----------- -----------
Total Expenses From Property
Operating Activities 2,813,048 2,042,585
----------- -----------
Other Expenses:
Shareholder Expenses 25,271 18,125
Trustees' Fees, Expenses
and Insurance 13,000 12,312
Other Professional Fees 62,236 72,931
General and Administrative 540,981 447,273
Amortization of Deferred
Loan Fees and Financing
Costs 112,796 24,548
Recovery of Losses on Loans,
Notes and Interest
Receivable and Class Action
Settlement Costs and
Expenses --- ---
----------- -----------
Total Other Expenses 754,284 575,189
----------- -----------
Total Expenses 3,567,332 2,617,774
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures 1,501,253 1,328,381
Minority Interest in
Consolidated Partnerships (24,463) (18,646)
Income (Loss) from Operations
of Real Estate Ventures --- ---
----------- -----------
Net Income (Loss) $ 1,476,790 $ 1,309,735
=========== ===========
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares
Outstanding) $ 0.14 $ 0.12
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
(SUPPLEMENTAL INFORMATION)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Supplemental Information
Foreclosed Foreclosed
Activities Activities
1995 1994
INCOME
Income From Property Operating
Activities:
Industrial $ --- $ ---
Residential --- ---
Commercial --- ---
----------- -----------
Total Income From Property
Operating Activities --- ---
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans --- ---
Income on Investments 98,987 66,037
----------- -----------
Total Income From Lending
and Investing Activities 98,987 66,037
----------- -----------
Total Income 98,987 66,037
----------- -----------
EXPENSES
Expenses From Property
Operating Activities:
Operating Property Expenses --- ---
Repairs and Maintenance --- ---
Real Estate Taxes --- ---
Interest Expense --- ---
Property Management Fees --- ---
Payroll Expenses --- ---
Utilities Expense --- ---
Depreciation and Amortization --- ---
----------- -----------
Total Expenses From Property
Operating Activities --- ---
----------- -----------
Other Expenses:
Shareholder Expenses 90,633 105,902
Trustees' Fees, Expenses
and Insurance 204,945 192,556
Other Professional Fees 39,236 36,186
General and Administrative 232,669 165,300
Amortization of Deferred Loan
Fees and Financing Costs --- ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses (155,834) (134,986)
----------- -----------
Total Other Expenses 411,649 364,958
----------- -----------
Total Expenses 411,649 364,958
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures (312,662) (298,921)
Minority Interest in
Consolidated Partnerships --- ---
Income (Loss) from Operations
of Real Estate Ventures 392,600 (25,151)
----------- -----------
Net Income (Loss) $ 79,938 $ (324,072)
=========== ============
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares
Outstanding) $ 0.01 $ (0.03)
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Consolidated Consolidated
INCOME 1995 1994
Income From Property Operating
Activities:
Industrial $ 608,659 $ 524,937
Residential 848,911 810,592
Commercial 729,940 701,677
----------- -----------
Total Income From Property
Operating Activities 2,187,510 2,037,206
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans 254,257 237,284
Income on Investments 216,330 64,768
----------- -----------
Total Income From Lending
and Investing Activities 470,587 302,052
----------- -----------
Total Income 2,658,097 2,339,258
----------- -----------
EXPENSES
Expenses from Property Operating
Activities:
Operating Property Expenses 129,281 76,691
Repairs and Maintenance 318,819 209,101
Real Estate Taxes 244,444 200,410
Interest Expense 215,911 79,030
Property Management Fees 82,468 72,410
Payroll Expense 92,679 111,181
Utilities Expense 153,469 145,219
Depreciation and
Amortization 256,125 236,365
----------- -----------
Total Expenses From Property
Operating Activities 1,493,196 1,130,407
----------- -----------
Other Expenses:
Shareholder Expenses 72,356 66,082
Trustees' Fees, Expenses
and Insurance 108,376 102,874
Other Professional Fees 42,949 34,477
General and Administrative 370,348 287,167
Amortization of Deferred Loan
Fees and Financing Costs 56,995 12,324
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses --- ---
----------- -----------
Total Other Expenses 651,024 502,924
----------- -----------
Total Expenses 2,144,220 1,633,331
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures 513,877 705,927
Minority Interest in
Consolidated Partnerships (7,521) (13,722)
Income (Loss) from Operations of
Real Estate Ventures 365,977 (25,923)
----------- -----------
Net Income (Loss) $ 872,333 $ 666,282
=========== ===========
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares
Outstanding) $ 0.08 $ 0.06
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
(SUPPLEMENTAL INFORMATION)
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Supplemental Information
Investment Investment
Activities Activities
1995 1994
INCOME
Income From Property Operating
Activities:
Industrial $ 608,659 $ 524,937
Residential 848,911 810,592
Commercial 729,940 701,677
----------- ----------
Total Income From Property
Operating Activities 2,187,510 2,037,206
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans 254,257 237,284
Income on Investments 199,536 40,216
----------- -----------
Total Income From Lending
and Investing Activities 453,793 277,500
----------- -----------
Total Income 2,641,303 2,314,706
----------- -----------
EXPENSES
Expenses From Property
Operating Activities:
Operating Property Expenses 129,281 76,691
Repairs and Maintenance 318,819 209,101
Real Estate Taxes 244,444 200,410
Interest Expense 215,911 79,030
Property Management Fees 82,468 72,410
Payroll Expense 92,679 111,181
Utilities Expense 153,469 145,219
Depreciation and
Amortization 256,125 236,365
----------- -----------
Total Expenses From Property
Operating Activities 1,493,196 1,130,407
----------- -----------
Other Expenses:
Shareholder Expenses 17,686 9,205
Trustees' Fees, Expenses
and Insurance 7,000 5,687
Other Professional Fees 31,754 20,977
General and Administrative 267,816 221,941
Amortization of Deferred
Loan Fees and Financing
Costs 56,995 12,324
Recovery of Losses on Loans,
Notes and Interest
Receivable and Class Action
Settlement Costs and
Expenses --- ---
----------- -----------
Total Other Expenses 381,251 270,134
----------- -----------
Total Expenses 1,874,447 1,400,541
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures 766,856 914,165
Minority Interest in
Consolidated Partnerships (7,521) (13,722)
Income (Loss) from Operations
of Real Estate Ventures --- ---
----------- -----------
Net Income (Loss) $ 759,335 $ 900,443
=========== ===========
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares
Outstanding) $ 0.07 $ 0.08
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSES
(SUPPLEMENTAL INFORMATION)
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Supplemental Information
Foreclosed Foreclosed
Activities Activities
1995 1994
INCOME
Income From Property Operating
Activities:
Industrial $ --- $ ---
Residential --- ---
Commercial --- ---
----------- -----------
Total Income From Property
Operating Activities --- ---
----------- -----------
Income From Lending and
Investing Activities:
Interest and Amortized
Discount on Mortgage Loans --- ---
Income on Investments 16,794 24,552
----------- -----------
Total Income From Lending
and Investing Activities 16,794 24,552
----------- -----------
Total Income 16,794 24,552
----------- -----------
EXPENSES
Expenses From Property
Operating Activities:
Operating Property Expenses --- ---
Repairs and Maintenance --- ---
Real Estate Taxes --- ---
Interest Expense --- ---
Property Management Fees --- ---
Payroll Expenses --- ---
Utilities Expense --- ---
Depreciation and Amortization --- ---
----------- -----------
Total Expenses From Property
Operating Activities --- ---
----------- -----------
Other Expenses:
Shareholder Expenses 54,670 56,877
Trustees' Fees, Expenses
and Insurance 101,376 97,187
Other Professional Fees 11,195 13,500
General and Administrative 102,532 65,226
Amortization of Deferred Loan
Fees and Financing Costs --- ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses --- ---
----------- -----------
Total Other Expenses 269,773 232,790
----------- -----------
Total Expenses 269,773 232,790
----------- -----------
Income (Loss) Before Minority
Interest and Income (Loss)
from Operations of Real
Estate Ventures (252,979) (208,238)
Minority Interest in
Consolidated Partnerships --- ---
Income (Loss) from Operations
of Real Estate Ventures 365,977 (25,923)
----------- -----------
Net Income (Loss) $ 112,998 $ (234,161)
=========== ============
Earnings (Loss) Per Share of
Beneficial Interest
(10,471,102 Shares
Outstanding) $ 0.01 $ (0.02)
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
<TABLE>
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
<CAPTION>
Shares of
Beneficial Interest Accumulated Treasury
Shares Amount Deficit Shares Total
<S> <C> <C> <C> <C> <C>
Shareholders'
Equity,
December 31,
1994 11,993,751 $106,662,313 $(40,855,652) $(7,365,949) $58,440,712
Net Income --- --- 1,556,728 --- 1,556,728
Dividends
Paid --- --- (2,094,824) --- (2,094,824)
----------- ------------ ------------ ----------- -----------
Shareholders'
Equity, June
30, 1995 11,993,751 $106,662,313 $(41,393,748) $(7,365,949) $57,902,616
=========== ============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Consolidated Consolidated
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET INCOME (LOSS) $ 1,556,728 $ 985,663
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used In) Operating
Activities:
Amortization of Premium on
Investment Securities 10,596 66,474
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses (155,834) ---
Depreciation and Amortization 620,280 407,778
Amortization of Discount on
Mortgage Loans Receivable (177,512) (147,364)
Net (Income) Loss From
Operation of Real Estate
Ventures (392,600) 25,151
Minority Interest Participation
in Consolidated Partnerships 24,463 18,646
Net Change In:
Interest Receivable on Mortgage
Loans and Investments (229,228) 67,136
Accounts Receivable (53,914) 125,517
Due from Affiliates --- ---
Other Assets (220,062) (70,295)
Accounts Payable and Accrued
Expenses (239,020) (188,604)
Accrued Interest Payable (26,005) (280)
Accrued Real Estate Tax Payable (25,509) 366,214
Unearned Revenue (20,149) 15,705
Security Deposit Liability 11,050 16,533
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 683,284 1,688,274
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Real Estate
Asset (3,917,930) (18,710,083)
Proceeds From Sale of
Investment in Real
Estate Venture 1,940,039 ---
Additions to Investment in
Real Estate (207,774) (284,472)
Payment of Liabilities Assumed
at Acquisition of Real Estate
Asset 94,964 (367,375)
Other Liability 395,838 ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses 155,834 ---
Purchase of Investment
Securities (1,493,360) ---
Proceeds From Sale and
Maturities of Investment
Securities 2,500,000 14,363,649
Principal Collections on
Mortgage Loans Receivable 22,041 15,806
Investment in Mortgage Loans
Receivable --- (4,770)
Due from Affiliates 730,229 (258,026)
Distribution From (Investment
In) Real Estate Ventures (54,482) (25,436)
Transfer of Equity From
Sale of Investment in
Real Estate Venture --- ---
Minority Interest Share of
Real Estate Investments 339,839 (37,178)
----------- -----------
Net Cash Provided By (Used In)
Investing Activities 505,238 (5,307,885)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds From Mortgage Loan
Payable 2,650,000
Deferred Financing Costs (98,271) ---
Reductions to Deferred
Financing Costs --- 5,864
Principal Payments on Mortgage
Loans Payable (75,655) (41,985)
Dividends Paid to Shareholders (2,094,824) (2,094,220)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities 381,250 (2,130,341)
----------- -----------
Net Increase (Decrease) In Cash
and Cash Equivalents 1,569,772 (5,749,952)
Cash and Cash Equivalents at
Beginning of Period 14,769,170 13,621,820
----------- -----------
Cash and Cash Equivalents at End
of Period $16,338,942 $ 7,871,868
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(SUPPLEMENTAL INFORMATION)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Investment Investment
Activities Activities
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET INCOME (LOSS) $ 1,476,790 $ 1,309,735
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used In) Operating
Activities:
Amortization of Premium on
Investment Securities 10,596 66,474
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses --- ---
Depreciation and Amortization 620,280 407,778
Amortization of Discount on
Mortgage Loans Receivable (177,512) (147,364)
Net (Income) Loss From
Operation of Real Estate
Ventures --- ---
Minority Interest Participation
in Consolidated Partnerships 24,463 18,646
Net Change In:
Interest Receivable on Mortgage
Loans and Investments (183,761) 67,094
Accounts Receivable (53,914) 125,517
Due From Affiliates --- ---
Other Assets (214,554) (72,273)
Accounts Payable and Accrued
Expenses (284,485) (186,155)
Accrued Interest Payable (26,005) (280)
Accrued Real Estate Tax Payable (25,509) 366,214
Unearned Revenue (20,149) 15,705
Security Deposit Liability 11,050 16,533
------------ -----------
Net Cash Provided By (Used In)
Operating Activities 1,157,290 1,987,624
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Real Estate
Asset (3,917,930) (18,710,083)
Proceeds from Sale of Invest-
ment in Real Estate Venture --- ---
Additions to Investment in
Real Estate (207,774) (284,472)
Payment of Liabilities Assumed
at Acquisition of Real Estate
Asset 94,964 (367,375)
Other Liability --- ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses --- ---
Purchase of Investment
Securities (1,493,360) ---
Proceeds From Sale and
Maturities of Investment
Securities 2,500,000 14,363,649
Principal Collections on
Mortgage Loans Receivable 22,041 15,806
Investment in Mortgage Loans
Receivable --- (4,770)
Due from Affiliates --- ---
Distribution From (Investment
In) Real Estate Ventures --- ---
Transfer of Equity From
Sale of Investment in Real
Estate Venture 1,940,039 ---
Minority Interest Share of
Real Estate Investments 339,839 (37,178)
----------- -----------
Net Cash Provided By (Used In)
Investing Activities (722,181) (5,024,423)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds From Mortgage Loan
Payable 2,650,000 ---
Deferred Financing Costs (98,271) ---
Reductions to Deferred
Financing Costs --- 5,864
Principal Payments on Mortgage
Loans Payable (75,655) (41,985)
Dividends Paid to Shareholders (2,094,824) (2,094,220)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities 381,250 (2,130,341)
----------- -----------
Net Increase (Decrease) In Cash
and Cash Equivalents 816,359 (5,167,140)
Cash and Cash Equivalents at
Beginning of Period 13,077,182 10,332,184
----------- -----------
Cash and Cash Equivalents at End
of Period $13,893,541 $ 5,165,044
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(SUPPLEMENTAL INFORMATION)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(UNAUDITED)
Foreclosed Foreclosed
Activities Activities
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET INCOME (LOSS) $ 79,938 $ (324,072)
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by (Used In) Operating
Activities:
Amortization of Premium on
Investment Securities --- ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses (155,834) ---
Depreciation and Amortization --- ---
Amortization of Discount on
Mortgage Loans Receivable --- ---
Net (Income) Loss From
Operation of Real Estate
Ventures (392,600) 25,151
Minority Interest Participation
in Consolidated Partnerships --- ---
Net Change In:
Interest Receivable on Mortgage
Loans and Investments (45,467) 42
Accounts Receivable --- ---
Due from Affiliates --- ---
Other Assets (5,508) 1,978
Accounts Payable and Accrued
Expenses 45,465 (2,449)
Accrued Interest Payable --- ---
Accrued Real Estate Tax Payable --- ---
Unearned Revenue --- ---
Security Deposit Liability --- ---
----------- -----------
Net Cash Provided By (Used In)
Operating Activities (474,006) (299,350)
----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisition of Real Estate
Asset --- ---
Proceeds From Sale of
Investment in Real Estate
Venture 1,940,039 ---
Additions to Investment in
Real Estate --- ---
Payment of Liabilities Assumed
at Acquisition of Real Estate
Asset --- ---
Other Liability 395,838 ---
Recovery of Losses on Loans,
Notes and Interest Receivable
and Class Action Settlement
Costs and Expenses 155,834 ---
Purchase of Investment
Securities --- ---
Proceeds From Sale and
Maturities of Investment
Securities --- ---
Principal Collections on
Mortgage Loans Receivable --- ---
Investment in Mortgage Loans
Receivable --- ---
Due from Affiliates 730,229 (258,026)
Distribution From (Investment
In) Real Estate Ventures (54,482) (25,436)
Transfer of Equity From
Sale of Investment in
Real Estate Venture (1,940,039) ---
Minority Interest Share of
Real Estate Investments --- ---
----------- -----------
Net Cash Provided By (Used In)
Investing Activities 1,227,419 (283,462)
----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from Mortgage Loan
Payable --- ---
Deferred Financing Costs --- ---
Reductions to Deferred
Financing Costs --- ---
Principal Payments on Mortgage
Loans Payable --- ---
Dividends Paid to Shareholders --- ---
----------- -----------
Net Cash Provided By (Used In)
Financing Activities --- ---
----------- -----------
Net Increase (Decrease) In Cash
and Cash Equivalents 753,413 (582,812)
Cash and Cash Equivalents at
Beginning of Period 1,691,988 3,289,636
----------- -----------
Cash and Cash Equivalents at End
of Period $2,445,401 $ 2,706,824
=========== ===========
The accompanying notes are an integral part of the
consolidated financial statements.
BANYAN STRATEGIC REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
(UNAUDITED)
Readers of this quarterly report should refer to Banyan Strategic Realty
Trust's (the "Trust's") audited consolidated financial statements for the year
ended December 31, 1994 which are included in the Trust's 1994 Annual Report
and Form 10-K, as certain footnote disclosures which would substantially
duplicate those contained in such audited statements have been omitted from
this report.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts
of the Trust, its wholly-owned subsidiaries and its controlled partnerships.
All intercompany balances and transactions have been eliminated in
consolidation. Investment in Real Estate Ventures are accounted for on the
equity method.
FINANCIAL STATEMENT PRESENTATION
Effective January 1, 1993, the Trust elected to provide supplemental
financial information in a format that segregates financial condition, results
of operations and cash flows between the Trust's new investments in real
estate assets (the "Investment Activities") and the management of the real
estate assets acquired in prior years through foreclosure (the "Foreclosed
Activities").
Certain reclassifications have been made to the previously reported 1994
financial statements in order to provide comparability with the 1995
consolidated financial statements. These reclassifications have not changed
the 1994 operating results. In the opinion of management, all adjustments
necessary for a fair presentation have been made to the accompanying
consolidated financial statements as of June 30, 1995 and for the three and
six months ended June 30, 1995 and 1994. These adjustments made to the
financial statements, as presented, are all of a normal recurring nature to
the Trust.
2. INVESTMENT IN REAL ESTATE
WILLOWBROOK INDUSTRIAL COURT PROPERTY
On June 16, 1995, Banyan/Morgan Milwaukee Limited Partnership ("BMMLP"),
a joint venture between a subsidiary of the Trust, which is the general
partner, and Morgan Realty Partners ("Morgan"), acquired the Willowbrook
Industrial Court property (the "Willowbrook Property") which consists of a
three-building office/warehouse complex with a total of approximately 85,000
square feet of leasable space located in the metropolitan Chicago area for a
purchase price of $4,050,000, including liabilities assumed at acquisition of
approximately $132,000. The Trust and Morgan contributed additional capital
of approximately $1,030,000 and $370,000 to BMMLP for their 85% and 15%
ownership interest in BMMLP, respectively, including $75,000 in reserves for
property improvements and lease-up. The acquisition was made subject to a
nonrecourse first mortgage loan collateralized by the property in the amount
of $2,650,000 which bears interest at a fixed rate of 8.5%, matures on July 1,
2002, and requires monthly payments of principal and interest based upon a
twenty-two and a half year amortization schedule. The loan requires a balloon
payment for the remaining unpaid principal balance upon its maturity. Upon
acquisition, the Willowbrook Property was 93% leased.
The terms of the BMMLP Partnership Agreement as originally established
pursuant to the acquisitions of the Milwaukee Industrial and the Elmhurst
Metro Court properties were modified effective July 1, 1995 as a result of the
Willowbrook Property acquisition by BMMLP. Pursuant to the revised terms of
the modified BMMLP Partnership Agreement, any excess cash flow from
operations, after the Trust and Morgan each receives their 12% and 11%
preferred return, respectively, on contributed equity, will then be split 85%
to the Trust and 15% to Morgan. The modification to the Trust's excess cash
flow percentage is the result of the increase in additional equity due to
Morgan's contribution of approximately $370,000 pursuant to the Willowbrook
Property acquisition. The results of operations for the Willowbrook Property
are included in the Trust's investment activities for financial reporting
purposes. The BMMLP ownership percentage changes which occurred upon
acquisition of the Willowbrook Property, as mentioned above, will become
effective July 1, 1995 for financial reporting purposes.
NORTHLAKE TOWER SHOPPING CENTER
On July 28, 1995, BSRT/M&J Northlake Limited Partnership ("BMJNLP"), a
joint venture between a subsidiary of the Trust and M&J Wilkow Retail Ltd.
("Wilkow"), acquired a shopping center known as the Northlake Tower Shopping
Center ("Northlake Property") located in northeast suburban Atlanta, Georgia
for a purchase price of approximately $17,250,000. The Northlake Property
consists of six structures containing approximately 322,000 rentable square
feet which was built in 1984. The Trust contributed $6,000,000 to BMJNLP for
an approximate 80% interest, while Wilkow contributed approximately $1,500,000
for the remaining 20% interest, including approximately $600,000 in reserves
held by BMJNLP for property improvements, lease-up and other closing
prorations. The Northlake Property was acquired pursuant to a ground lease
with a remaining term of sixty-two years. The ground lease requires annual
lease payments of $600,000 through October 4, 2007 plus 7% of annual gross
rental income in excess of $2,000,000 from the operations of the Northlake
Property. The ground lease also requires the payment of expenses incurred on
the Northlake site, including real estate taxes. The Northlake Property was
acquired by BMJNLP pursuant to a non-recourse first mortgage loan provided for
by the seller in the amount of $10,350,000. The mortgage loan requires
monthly payments of interest only at a fixed rate of 8.5% per annum. The
mortgage loan matures on July 1, 2005 and may be repaid at any time during its
term without any prepayment penalty.
Pursuant to the terms of the BMJNLP partnership agreement, cash flow
from operations will be distributed first to the Trust until it has received a
12% cumulative return on its equity contribution and then Wilkow will receive
a 12% cumulative return on its contributed equity. Any excess cash flow will
then be split pro-rata to the Trust and Wilkow based on their respective
capital contributions. Proceeds from the sale or refinancing of the Northlake
Property, after the payment of any debt or expense associated with the sale or
refinancing, will be first distributed to the Trust to the extent that the 12%
annual preferred return has not been received. Next, to the Trust and Wilkow
on a pro-rata basis in an amount equal to their respective equity
contributions. Thereafter, to Wilkow to the extent that its 12% annual
preferred return has not been received. In the event there are any remaining
proceeds and the average annual return to the Trust during the period that the
BMJNLP owned the Northlake Property is equal to or greater than 15%, Wilkow
will then receive an additional 10% increase on their capital percentage
regarding the distribution of the remaining proceeds. The results of
operations for the Northlake Property will be included in the Trust's
Investment Activities for financial reporting purposes.
3. INVESTMENT IN JOINT VENTURES
The summary income statement information for the H Street Assemblage and
Plaza at Westminster unconsolidated ventures for the six months ended June 30,
1995 and 1994 is as follows:
1995 1994
Total Revenues $ 578,253 $ 745,934
========== ===========
Net Income $1,371,455 $ 84,495
========== ===========
The increase in the net income for the six months ended June 30, 1995 as
compared to the same period in 1994 is primarily due to the sale of the
Trust's interest in the Plaza at Westminster ("Westminster") property on June
22, 1995 which resulted in an estimated gain on disposition of approximately
$1,363,000. (See below for further details).
PLAZA AT WESTMINSTER
The Trust owned a 30.7% participation interest in the Westminster
property. On June 22, 1995, the Westminster property was sold to an
unaffiliated third party for a sales price of $7,525,000 which resulted in an
estimated net gain of approximately $1,363,000 after prorations for closing
costs of approximately $1,206,000. The Trust's share of the cash proceeds was
approximately $1,940,000 which resulted in the Trust's share of the estimated
net gain of approximately $419,000.
4. DUE FROM AFFILIATES
The Trust has entered into a partnership agreement with Banyan Strategic
Land Fund II ("BSLFII") regarding the ownership and operation of the H Street
Assemblage (the "H Street Venture"). Under the terms of this Agreement, the
Trust has the right, but is not obligated, to advance expenditures on behalf
of BSLFII. During 1994 and 1993, the Trust advanced to the H Street Venture
all funds expended on the H Street Assemblage, including BSLFII's portion. As
provided in the H Street partnership agreement, all advances made by the Trust
for BSLFII's share of the H Street Venture's expenses bore interest at a rate
of prime plus 2% per annum until repaid. As of December 31, 1994, the Trust's
total receivable from BSLFII was approximately $730,000. On March 24, 1995,
BSLFII repaid the December 31, 1994 outstanding balance of approximately
$730,000 to the Trust. As of June 30, 1995, the H Street advances, and all
interest thereon, made by the Trust have been repaid in full by BSLFII.
5. TRANSACTIONS WITH AFFILIATES
Administrative costs, primarily salaries and general and administrative
expenses, are reimbursed by the Trust to Banyan Management Corp. ("BMC").
These costs are allocated to the Fund and other entities to which BMC provides
administrative services based upon the actual number of hours spent by BMC
personnel on matters related to that Fund. The Trust's costs for the six
months ended June 30, 1995 and 1994 aggregated $601,114 and $523,980
respectively. As one of its administrative services, BMC serves as the paying
agent for general and administrative costs of the Trust. As part of providing
this payment service, BMC maintains a bank account on behalf of the Trust. As
of June 30, 1995, the Trust had a net payable due to BMC of $35,817.
The Trust's allocated charges related to Investment Activities and
Foreclosed Activities for the six months ended June 30, 1995 were $427,429 and
$173,685, respectively. The Trust's allocated charges related to Investment
Activities and Foreclosed Activities for the six months ended June 30, 1994
were $389,905 and $134,075, respectively.
6. RECOVERY OF LOSSES ON LOANS, NOTES AND INTEREST RECEIVABLE AND CLASS
ACTION SETTLEMENT COSTS AND EXPENSES
On February 9, 1995, the Trust received a cash distribution of $551,672
related to its interest in a liquidating trust established for the benefit of
the unsecured creditors of VMS Realty Partners and its affiliates ("VMS").
For the six months ended June 30, 1995, the Trust recorded a $155,834 recovery
of losses on mortgage loans, notes and interest receivable on its consolidated
statement of income and expenses related to the distribution received from the
liquidating trust. The $155,834 net recovery recorded in 1995 represents the
$551,672 distribution received net of an estimated $395,838 due to the Class
Action Settlement Fund representing the Trust's share of amounts due per the
terms of the previously settled VMS securities litigation. As of June 30,
1995, the Trust has recorded $686,169 as an Other Liability as the total
estimated amount due to the Class Action Settlement Fund per the terms of the
settlement.
On January 25, 1994, the Trust received net proceeds of $134,986
relating to a recovery of payments previously made into an escrow established
as part of the 1992 Class Action Settlement of the VMS securities litigation.
The escrow was established to provide trustees of the Trust with monies to
fund the cost of any litigation in which they were named as defendants
following settlement of the class action. Subsequently, the trustees have
released the proceeds from the escrow and the Trust has purchased an insurance
policy to cover the officers and trustees.
7. DIVIDEND AND DISTRIBUTIONS PAID
On July 7, 1995, the Trust declared a cash dividend for the quarter
ended June 30, 1995 of $0.10 per share payable August 18, 1995 to shareholders
of record on July 20, 1995.
On July 5, 1995, the Trust issued 6,036 shares of its beneficial
interest ("Award Shares") to Leonard G. Levine, its president, pursuant to Mr.
Levine's amended employment agreement representing 20% of Mr. Levine's 1994
incentive compensation. All incentive amounts are due Mr. Levine on or before
March 15, of the year following the period for which the incentive is earned.
The Award Shares are held for Mr. Levine by the Trust subject to certain
vesting requirements as stipulated under his amended employment agreement.
With respect to the Award Shares, Mr. Levine is entitled to receive any cash
distributions of the Trust with respect to his share of beneficial interest
between the date earned of March 15, and the date that any Award Shares are
sold or forfeited by Mr. Levine. Therefore, the distribution paid by the
Trust on May 20, 1995 represents $0.10 per share based on 10,477,138 shares
for a total cash distribution by the Fund of $1,047,714. The Award Shares
will be included in the total shares outstanding of the Trust effective July
5, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Banyan Strategic Realty Trust (the "Trust") was originally established
to make mortgage loans principally to entities affiliated with VMS Realty
Partners which planned to acquire and develop strategically located properties
not then at their highest and best use. The Trust has ceased funding such
mortgage loans. The current business plan of the Trust is to invest its cash
and cash equivalents into additional real estate assets and to manage these
real estate assets in a manner which will increase the Trust's cash flow over
time. From May 1993 through August 1, 1995, the Trust obtained a line of
credit, completed mortgage financing on the Elmhurst, Milwaukee, Willowbrook
and Northlake properties (see Results of Operations below for details
regarding the acquisition and financing of Willowbrook and Northlake
properties) and secured enhancement of a bond financing on the Colonial Courts
property. The cash proceeds generated pursuant to these transactions provide
the Trust with additional capital for the continued acquisition of income
producing properties, the potential acquisition of mortgage loans and for
general corporate needs. On June 22, 1995, the Trust sold its interest in the
Plaza at Westminster property (see Results of Operations for details). The
Trust will reinvest the net sales proceeds of approximately $1,940,000 into
new real estate investments. The Trust further intends to liquidate its
interest in the H Street Assemblage which was acquired through foreclosure and
to reinvest the proceeds from its liquidation into additional real estate
investments as well.
Effective January 1, 1993, the Trust elected to provide supplemental
financial information in a format that presents the financial condition,
results of operations and cash flows from the investment of the Trust's cash
and investment securities into new real estate opportunities (the "Investment
Activities") and the management of the real estate assets acquired through
foreclosure (the "Foreclosed Activities"). Returns on Investment Activities
include the interest earned on investment securities and cash and cash
equivalents and the new real estate assets acquired from May 1993 through June
30, 1995 which are offset by the incremental costs associated with the
investment efforts. Returns on Foreclosed Activities include the results of
managing the foreclosed real estate assets plus the costs associated with
maintaining the Trust.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents consist of cash and short-term investments.
The Trust's cash and cash equivalents balance at June 30, 1995 and December
31, 1994 was $16,338,942 and $14,769,170, respectively. In addition, the
Trust, at December 31, 1994 held $1,017,236 in investment securities which
were immediately convertible to cash. The increase in total cash, cash
equivalents and investment securities of approximately $553,000 is primarily
due to the Trust's receipt of cash proceeds from the sale of the Trust's
interest in the Plaza at Westminster property on June 22, 1995 of
approximately $1,940,000, a $551,672 cash distribution received relating to
the Trust's interest in the liquidating trust (see below), a $730,229
repayment from Banyan Strategic Land Fund II ("BSLFII") for advances made on
behalf of BSLFII for H Street Assemblage expenditures (see below), the Trust's
receipt of interest income from lending and investing activities of
approximately $917,000 as well as cash receipts from property operations
totalling approximately $4,250,000. Partially offsetting these cash receipts
was the Trust's acquisition of its Willowbrook property interest on June 16,
1995 for approximately $1,268,000, payment of distributions to shareholders of
$2,094,824, additions to investment in real estate of $207,774, principal
payments on mortgage loans payable of $75,655, deferred financing costs of
$98,271 and the payment of the Trust's operating expenses totalling
approximately $4,135,000. See Results of Operations for further details
regarding the sale of the Plaza at Westminster property and the acquisition of
the Willowbrook property.
The Trust has entered into a partnership agreement with Banyan Strategic
Land Fund II ("BSLFII") regarding the ownership and operation of the H Street
Assemblage (the "H Street Venture"). Under the terms of this Agreement, the
Trust has the right, but is not obligated, to advance expenditures on behalf
of BSLFII. During 1994 and 1993, the Trust advanced to the H Street Venture
all funds expended on the H Street Assemblage, including BSLFII's portion. As
provided in the H Street partnership agreement, all advances made by the Trust
for BSLFII's share of the H Street Venture's expenses bore interest at a rate
of prime plus 2% per annum until repaid. As of December 31, 1994, the Trust's
total receivable from BSLFII was approximately $730,000. On March 24, 1995,
BSLFII repaid the December 31, 1994 outstanding balance of approximately
$730,000 to the Trust. As of June 30, 1995, the H Street advances, and all
interest thereon, made by the Trust have been repaid in full by BSLFII.
On February 9, 1995, the Trust received a cash distribution of $551,672
related to its interest in a liquidating trust established for the benefit of
the unsecured creditors of VMS Realty Partners and its affiliates ("VMS").
For the six months ended June 30, 1995, the Trust recorded a $155,834 recovery
of losses on mortgage loans, notes and interest receivable on its consolidated
statement of income and expenses related to the distribution received from the
liquidating trust. The $155,834 net recovery recorded in 1995 represents the
$551,672 distribution received net of an estimated $395,838 due to the Class
Action Settlement Fund representing the Trust's share of amounts due per the
terms of the previously settled VMS securities litigation. As of June 30,
1995, the Trust has recorded $686,169 as an Other Liability as the total
estimated amount due to the Class Action Settlement Fund per the terms of the
settlement.
The Trust's future liquidity is expected to be generated by the
operating cash flow from Investment Activities, the sale or refinancing of the
remaining asset acquired through foreclosure, interest earned on the Trust's
short-term investments and to a lesser extent the potential receipt of
distributions from the liquidating trust. Cash may be expended to maintain,
operate and dispose of the remaining "Foreclosed Activity" property. The
Trust's cash and cash equivalents, as well as cash flow from "Investment
Activity" properties, are expected to be sufficient to meet its reasonably
anticipated needs for liquidity and capital resources in the near future.
During 1995, the Trust anticipates to continue making additional investments
in operating properties which could have an effect on future liquidity of the
Trust. In addition, the Trust anticipates continuing the $0.10 per share
quarterly distribution for the remainder of 1995.
As of June 30, 1995 and December 31, 1994, the Trust's mortgage loan
portfolio consisted of five mortgage loans receivable with aggregate carrying
values totaling $5,275,977 and $5,136,229, respectively, net of $1,631,204 and
$1,808,716 of unamortized discounts, respectively. During the six months
ended June 30, 1995, the Trust received principal and interest totalling
$22,041 and $323,598, respectively. During the six months ended June 30,
1994, the Trust received principal and interest totalling $15,806 and
$325,605, respectively.
Management reviews the properties held by the Trust on a quarterly basis
and, when it has been determined that a permanent impairment in the value of a
given property has occurred, the property's carrying value is then written
down to its fair value. On a quarterly basis, management also reviews each
mortgage loan in the Trust's portfolio and provides allowances as deemed
necessary. The estimate of the aggregate allowances is based upon a number of
factors, including analysis of the value of the collateral and, in certain
cases, evaluation of the disposition strategy which includes ongoing
negotiations regarding the disposition of this collateral as well as
consideration of the general business conditions affecting the Trust's
portfolio. Management has determined not to take any write downs for the
quarter ended June 30, 1995.
The Trust's ability to make distributions to its shareholders is
dependent upon, among other things: (i) the operating performance of the
existing and new real estate investments; (ii) the ability to redeploy cash
proceeds in new investments derived from the sale of the remaining Foreclosed
Activities asset; (iii) increases in the eventual sales price of the Trust's
properties; (iv) the potential receipt of cash distributions from the
liquidating trust; (v) the Trust's ability to control its operating expenses;
and (vi) the general improvement of conditions in the real estate markets
where the Trust's properties are located.
RESULTS OF OPERATIONS
Total income for the six months ended June 30, 1995 increased to
$5,167,572 from $4,012,192 for the six months ended June 30, 1994. The
increase for the six months ended June 30, 1995 as compared to the same period
in 1994 is due primarily to increases in property operating revenue of
approximately $897,000 (see below) and interest income on investments of
approximately $229,000. Interest income on investments at June 30, 1995
increased when compared to the prior year's period due to the increase in cash
available for investment relating to the December 1994 financing proceeds from
the Elmhurst and Colonial Courts properties.
Industrial property operating revenue increased by approximately
$173,000, which is primarily the result of an increase in rental income at the
Trust's Elmhurst Metro Court property ("Elmhurst"). Rental income at Elmhurst
increased by approximately $127,000 due to an increase in occupancy to 95% at
June 30, 1995 as compared to 87% for the same period in 1994. This increase
in occupancy is the result of the execution of approximately 10,000 square
feet of new leases pursuant to its business plan to re-market the available
space at Elmhurst. The rental income and occupancy level for the Milwaukee
Industrial properties remained unchanged with occupancy at 98% for June 30,
1995, when compared to the same period in 1994. In addition, the acquisition
of the Willowbrook property on June 16, 1995 resulted in an increase in rental
income of approximately $29,000. The occupancy level for the Willowbrook
property was 93% at June 30, 1995.
Residential property operating revenue increased by approximately
$84,000 resulting primarily from increases in income at the Hallmark Village
Apartments property ("Hallmark") of approximately $58,000 and at the Colonial
Courts of Westland Apartments ("Colonial Courts") property of approximately
$26,000. These increases were due primarily to increases in rental income at
the Hallmark and Colonial Courts properties was achieved as a result of the
Trust's aggressive collection efforts in 1995 which reduced delinquent rental
payments. The occupancy level as of June 30, 1995 and 1994 for the Hallmark
property was 92% and 93%, respectively. The Colonial Courts occupancy level
at June 30, 1995 and 1994 was 87% and 88%, respectively.
Commercial property operating revenue increased by approximately
$640,000 which is primarily attributable to the acquisition of the Colonial
Penn and Florida Power and Light office buildings in late March of 1994.
Occupancy levels at the Colonial Penn and Florida Power and Light office
buildings remained unchanged at June 30, 1995 of 100% and 90%, respectively,
when compared to the same period in 1994.
Total expenses for the six months ended June 30, 1995 increased to
$3,978,981 from $2,982,732 for the six months ended June 30, 1994. This
increase is due to increases in expenses from property operating activities of
approximately $770,000 and an increase in total other expenses of
approximately $226,000. The increase in total expenses from property
operating activities for 1995 is primarily attributable to the acquisition of
the Trust's properties during 1994 as discussed above and the June 1995
acquisition of the Willowbrook property (as discussed below) which contributed
to approximately $305,000 of this increase. In addition, total expenses from
property operating activities increased in 1995 due to an increase in interest
expense of approximately $279,000 relating primarily to the Trust's financing
of the Elmhurst and Colonial Courts properties in December 1994. Excluding
the Trust's acquisitions during 1994 and 1995, total expenses from property
operating activities increased further as a result of an increase of
approximately $56,000 in operating property expenses and an increase of
approximately $67,000 in repairs and maintenance expense. Property operating
expenses and repair and maintenance costs increased due to an increase in
general and administrative costs and higher unit turnover costs at the
Hallmark and Colonial Courts properties. Total other expenses increased due
primarily to an increase in general and administrative expenses and an
increase in amortization of deferred loan fees and financing costs. The
increase in general and administrative expenses is attributable to an increase
in hours allocated to the Trust by Banyan Management Corp. personnel related
to the Trust's Investment Activities and supervision of its newly-acquired
assets. Amortization of deferred loan fees and financing costs increased as a
result of the financing of the Elmhurst and Colonial Courts properties during
the fourth quarter of 1994.
The factors discussed above resulted in consolidated net income of
$1,556,728 ($0.15 per share) for the six months ended June 30, 1995 as
compared to a consolidated net income of $985,663 ($0.09 per share) for the
six months ended June 30, 1994.
Total income for the three months ended June 30, 1995 increased to
$2,658,097 from $2,339,258 for the three months ended June 30, 1994. The
increase for the three months ended June 30, 1995 as compared to the same
period in 1994 is due primarily to increases in property operating revenue of
approximately $150,000 and interest income on investments of approximately
$152,000. Interest income on investments at June 30, 1995 increased when
compared to the prior year's period due to the increase in cash available for
investment relating to the December 1994 financing of the Elmhurst and
Colonial Courts properties.
Industrial property operating revenue increased by approximately $84,000
which is the result of an increase in rental income at the Trust's Elmhurst
property as well as the acquisition of the Willowbrook property in June 1995.
Rental income at Elmhurst increased by approximately $55,000 due to an
increase in occupancy as mentioned above. The acquisition of the Willowbrook
property contributed to the increase in rental income in the amount of
approximately $29,000.
Residential property operating revenue increased by approximately
$38,000 resulting primarily from an increase in rental income at the Hallmark
property. An increase in rental income at the Hallmark property was achieved
as a result of the Trust's aggressive collection efforts in 1995 which reduced
delinquent rental payments.
Commercial property operating revenue increased by approximately $28,000
which is attributable to an increase in rental income at the Colonial Penn and
Florida Power and Light Office buildings. The increase in rental income at
both properties was due to annual rent adjustments in 1995 made pursuant to
the tenants lease agreements.
Total expenses for the three months ended June 30, 1995 increased to
$2,144,220 from $1,633,331 for the three months ended June 30, 1994. This
increase is due to increases in expenses from property operating activities of
approximately $363,000 and an increase in total other expenses of
approximately $148,000. The increase in property operating expenses for the
quarter ended June 30, 1995 is primarily attributable to an increase in
interest expense of approximately $137,000 relating primarily to the Trust's
financing of the Elmhurst and Colonial Courts properties in December 1994. In
addition, total expenses from property operating activities increased due to
increases of approximately $53,000 in operating property expenses and
approximately $110,000 in repairs and maintenance. Operating property
expenses increased due to higher general and administrative costs related to
turnover of management personnel at the Hallmark and Colonial Courts
properties. Repairs and maintenance costs increased due primarily to higher
unit turnover costs at the Colonial Courts and Hallmark properties. Total
other expenses increased due primarily to increases in general and
administrative expenses and amortization of deferred loan fees and financing
costs. The increase in general and administrative expenses is attributable to
an increase in hours allocated to the Trust by Banyan Management Corp.
personnel related to the Trust's Investment Activities and supervision of its
newly-acquired assets. Amortization of deferred loan fees and financing costs
increased as a result of the financing of the Elmhurst and Colonial Courts
properties in December 1994.
For the six months ended June 30, 1995, the Trust recognized net income
from operations of real estate ventures of $392,600 as compared to a net loss
of $(25,151) for the same period in 1994. For the three months ended June 30,
1995, the Trust recognized net income of $365,977 as compared to a net loss of
$(25,923) for the same period in 1994. The operations of real estate ventures
for the six months ended June 30, 1995 resulted in income from operations on
the Plaza at Westminster property of $460,184 which was offset by a loss from
operations of $(67,584) on the H Street Assemblage. The increase in the net
income from the operations of real estate ventures for the six months ended
June 30, 1995 as compared to the same period in 1994 is primarily due to the
June 22, 1995 sale of the Plaza at Westminster property which resulted in the
Trust's share of the total estimated net gain of approximately $419,000 as
discussed below. The Trust's share of the net loss for the six months ended
June 30, 1995 as compared to the same period in 1994 relating to the H Street
property decreased by approximately $54,000. This decrease in net loss for
the H Street property is due primarily to a reduction in legal costs paid in
1994. These legal costs related to the successful real estate tax appeal
which reduced the property's assessed taxable value in 1994. In addition,
legal and entitlement costs for 1995 were further reduced when compared to
1994 due to the nonrecurring payment of professional services associated with
obtaining the historic preservation rights in 1994. The Trust has completed
and obtained the zoning, entitlement and historic preservation rights for the
H Street Assemblage. The H Street Venture has not made any significant
capital expenditures on this asset and is allowing occupancy to decline by
selectively retenanting the Victor building at the H Street Assemblage with
short term leases so that the building will be more marketable to a potential
buyer which would need to vacate the Victor building before its redevelopment.
The H Street Venture is currently marketing the H Street Assemblage for sale.
The current market for the sale of undeveloped land where the H Street
Assemblage is located is very limited. Further contributing to the decline in
demand for commercial development sites in the Washington, D.C. market was the
recent government decision to downsize various departments and agencies and
place a freeze on leasing of any additional office space. Therefore, the H
Street Venture currently anticipates its marketing efforts could proceed
slower than originally anticipated. Operations of real estate ventures
resulted in income from operations on the Plaza at Westminster property of
$96,276 which was offset by a loss from operations of $121,427 on the H Street
property for the six months ended June 30, 1994.
The factors discussed above resulted in consolidated net income of
$872,333 ($0.08 per share) for the quarter ended June 30, 1995 as compared to
a consolidated net income of $666,282 ($0.06 per share) for the quarter ended
June 30, 1994.
The Trust owned a 30.7% participation interest in the Plaza at
Westminster ("Westminster") property. On June 22, 1995 the Westminster
property was sold to an unaffiliated third party for a sales price of
$7,525,000 which resulted in an estimated net gain of approximately $1,363,000
after prorations for closing costs of approximately $1,206,000. The Trust's
share of the cash proceeds was approximately $1,940,000 which resulted in the
Trust's share of the estimated net gain of approximately $419,000.
On June 16, 1995, Banyan/Morgan Milwaukee Limited Partnership ("BMMLP"),
a joint venture between a subsidiary of the Trust, which is the general
partner, and Morgan Realty Partners ("Morgan"), acquired the Willowbrook
Industrial Court property (the "Willowbrook Property") which consists of a
three-building office/warehouse complex with a total of approximately 85,000
square feet of leasable space located in the metropolitan Chicago area for a
purchase price of $4,050,000, including liabilities assumed at acquisition of
approximately $132,000. The Trust and Morgan contributed additional capital
of approximately $1,030,000 and $370,000 to BMMLP for their 85% and 15%
ownership interest in BMMLP, respectively, including $75,000 in reserves for
property improvements and lease-up. The acquisition was made subject to a
nonrecourse first mortgage loan collateralized by the property in the amount
of $2,650,000 which bears interest at a fixed rate of 8.5%, matures on July 1,
2002, and requires monthly payments of principal and interest based upon a
twenty-two and a half year amortization schedule. The loan requires a balloon
payment for the remaining unpaid principal balance upon its maturity. Upon
acquisition, the Willowbrook Property was 93% leased. The overall market
vacancy rate for comparable properties ranges from 3% to 8%.
The terms of the BMMLP Partnership Agreement as originally established
pursuant to the acquisitions of the Milwaukee Industrial and the Elmhurst
Metro Court properties were modified effective July 1, 1995 as a result of the
Willowbrook Property acquisition by BMMLP. Pursuant to the revised terms of
the modified BMMLP Partnership Agreement, any excess cash flow from
operations, after the Trust and Morgan each receives their 12% and 11%
preferred return, respectively, on contributed equity, will then be split 85%
to the Trust and 15% to Morgan. The modification to the Trust's excess cash
flow percentage is the result of the increase in additional equity due to
Morgan's contribution of approximately $370,000 pursuant to the Willowbrook
Property acquisition. The results of operations for the Willowbrook Property
are included in the Trust's reinvestment activities for financial reporting
purposes. The BMMLP ownership percentage changes which occurred upon
acquisition of the Willowbrook Property, as mentioned above, will become
effective July 1, 1995 for financial reporting purposes.
On July 28, 1995, BSRT/M&J Northlake Limited Partnership ("BMJNLP"), a
joint venture between a subsidiary of the Trust and M&J Wilkow Retail Ltd.
("Wilkow"), acquired a shopping center known as the Northlake Tower Shopping
Center ("Northlake Property") located in northeast suburban Atlanta, Georgia
for a purchase price of approximately $17,250,000. The Northlake Property
consists of six structures containing approximately 322,000 rentable square
feet which was built in 1984. The Trust contributed $6,000,000 to BMJNLP for
an approximate 80% interest, while Wilkow contributed approximately $1,500,000
for the remaining 20% interest including approximately $600,000 in reserves
held by BMJNLP for property improvements, lease-up and other closing
prorations. The Northlake Property was acquired pursuant to a ground lease
with a remaining term of sixty-two years. The ground lease requires annual
lease payments of $600,000 through October 4, 2007 plus 7% of annual gross
rental income in excess of $2,000,000 from the operations of the Northlake
Property. The ground lease also requires the payment of expenses incurred on
the Northlake site, including real estate taxes. The Northlake Property was
acquired by BMJNLP pursuant to a non-recourse first mortgage loan provided for
by the seller in the amount of $10,350,000. The mortgage loan requires
monthly payments of interest only at a fixed rate of 8.5% per annum. The
mortgage loan matures on July 1, 2005 and may be repaid at any time during its
term without any prepayment penalty. Upon acquisition, the property was 97%
leased with sixteen national and regional credit tenants leasing 84% of the
leased space.
Pursuant to the terms of the BMJNLP partnership agreement, cash flow
from operations will be distributed first to the Trust until it has received a
12% cumulative return on its equity contribution and then Wilkow will receive
a 12% cumulative return on its contributed equity. Any excess cash flow will
then be split pro-rata to the Trust and Wilkow based on their respective
capital contributions. Proceeds from the sale or refinancing of the Northlake
Property, after the payment of any debt or expense associated with the sale or
refinancing, will be first distributed to the Trust to the extent that the 12%
annual preferred return has not been received. Next, to the Trust and Wilkow
on a pro-rata basis in an amount equal to their respective equity
contributions. Thereafter, to Wilkow to the extent that its 12% annual
preferred return has not been received. In the event there are any remaining
proceeds and the average annual return to the Trust during the period that the
BMJNLP owned the Northlake Property is equal to or greater than 15%, Wilkow
will then receive an additional 10% increase on their capital percentage
regarding the distribution of the remaining proceeds. The results of
operations for the Northlake Property will be included in the Trust's
Investment Activities for financial reporting purposes.
An objective of the Trust is to provide cash distributions to the
shareholders from cash generated from the Trust's operations as discussed
above. Cash generated from operations is generally not equivalent to the
Trust's net operating income as determined under generally accepted accounting
principles. Due to certain unique operating characteristics of real estate
companies, the real estate investment trust ("REIT") industry has adopted a
standard for comparing operating performance within the industry. Funds from
operations ("FFO") is defined as net operating income excluding extraordinary
items plus depreciation and amortization from real property and after
adjustments for consolidated entities in which the REIT holds an interest.
FFO is not intended to be a measure of the cash generated by a REIT nor its
dividend paying capacity. However, a REIT's dividend can be analyzed in
comparison to FFO in a similar manner as a company that is not a REIT would
compare its dividend to net operating income.
The Trust provides supplemental information on the results from the
Investment Activities as well as on the consolidated results. For the six
months ended June 30, 1995 and 1994, the Trust's Investment Activities,
including interest received on the Karfad Loan Portfolio, generated FFO of
$1,953,139 ($0.19 per share) and $1,671,654 ($0.16 per share), respectively.
For the six months ended June 30, 1995 and 1994, the Trust's consolidated
activities generated FFO of $1,493,816 ($0.14 per share) and $1,247,467 ($0.12
per share), respectively. For the quarter ended June 30, 1995 and 1994, the
Trust's Investment Activities, including interest received on the Karfad Loan
Portfolio, generated FFO of $999,771 ($0.10 per share) and $1,126,824 ($0.11
per share), respectively. For the quarter ended June 30, 1995 and 1994 the
Trust's consolidated activities generated FFO of $711,906 ($0.07 per share)
and $910,511 ($0.09 per share), respectively. Excluding the effect of the
1994 and 1995 property acquisitions, FFO related to Investment Activities
decreased by approximately $177,000 for the six months ended June 30, 1995 as
compared to the same period in 1994. This decrease in FFO is primarily due to
the increase in interest expense and amortization of deferred loan fees and
financing costs for the six months ended June 30, 1995 of approximately
$367,000 as a result of the December 1994 financing of the Elmhurst and
Colonial Courts properties and obtaining the Trust's line of credit. The
decrease in FFO related to reinvestment activities was partially offset by
increased operating performance of the Trust's properties. Excluding the
effect of interest expense, amortization of deferred loan fees and financing
costs and the 1994 and 1995 acquisitions, FFO relating to reinvestment
activities increased by approximately $190,000 for the six months ended June
30, 1995 as compared to the same period in 1994.
FFO for the six months ended June 30, 1995 is calculated as follows:
Investment Consolidated
Net Income $1,476,790 $1,556,728
Plus:
Depreciation expense 492,225 492,225
Depreciation inclu-
ded in Operations
of Real Estate
Ventures --- 35,145
Lease Commission
Amortization 15,259 15,259
Less:
Minority Interest
Share of Depre-
ciation Expense (29,609) (29,609)
Minority Interest
Share of Lease
Commission
Amortization (1,526) (1,526)
Recovery of Losses on
Mortgage Loans,
Notes and Interest
Receivable --- (155,834)
Gain on Disposition of
Investment in Real
Estate Venture --- (418,572)
--------- ---------
Funds From Operations $1,953,139 $1,493,816
========= =========
The Trust paid dividends equal to $0.10 per share on May 20, 1995 and
May 20, 1994 for the first quarter of 1995 and 1994, respectively. On July 7,
1995, the Trust declared a cash dividend for the second quarter of 1995 of
$0.10 per share payable August 18, 1995 to shareholders of record on July 20,
1995.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Trust held its 1994 Annual Meeting of Shareholders on June 27, 1995.
There were three proposals considered at the Meeting.
Proposal #1 was to elect three Class A Trustees to hold office for one
year or otherwise as provided in the Trust's amended and restated Declaration
of Trust.
Proposal #2 was to concur in the selection of Ernst & Young L.L.P. as
the Trust's independent public accountants for the fiscal year ended December
31, 1995.
Proposal #3 was to authorize and ratify the issuance of Award Shares to
Mr. Leonard G. Levine pursuant to the terms of his Employment Agreement and to
authorize the future issuance of Award Shares to Mr. Levine subject to
satisfaction of conditions relevant to the issuance contained in the
Employment Agreement.
The following votes were cast or abstained from voting in connection
with the proposals in the manner as set forth:
PROPOSAL #1
SLATE OF TRUSTEES
ELECTED FOR AGAINST ABSTAIN
Walter E. Auch, Sr. 5,939,552 1,047,610 0
Norman M. Gold 5,941,016 1,046,146 0
Marvin A. Sotoloff 5,946,324 1,040,838 0
PROPOSAL #2
FOR AGAINST ABSTAIN
6,770,752 49,791 166,619
PROPOSAL #3
FOR AGAINST ABSTAIN
5,166,812 1,381,041 439,309
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are included with this Report.
(b) No current reports on Form 8-K were filed during the quarter ended
June 30, 1995.
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.
BANYAN STRATEGIC REALTY TRUST
By: /s/ Leonard G. Levine Date: August __, 1995
Leonard G. Levine, President
By: /s/ Joel L. Teglia Date: August __, 1995
Joel L. Teglia, Vice President
Finance and Administration, Chief
Financial and Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
"This schedule contains summary financial information extracted from
Banyan Strategic Realty Trust's Form 10Q for the six months ended
June 30, 1995 and is qualified in its entirety by reference to such
Form 10Q."
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 16,338,942
<SECURITIES> 0
<RECEIVABLES> 528,100
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,867,042
<PP&E> 45,324,006
<DEPRECIATION> (1,529,115)
<TOTAL-ASSETS> 76,697,055
<CURRENT-LIABILITIES> 1,964,140
<BONDS> 5,500,000
<COMMON> 57,902,616
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 76,697,055
<SALES> 0
<TOTAL-REVENUES> 5,167,572
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,697,677
<LOSS-PROVISION> (155,834)
<INTEREST-EXPENSE> 437,138
<INCOME-PRETAX> 1,556,728
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,556,728
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,556,728
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
