SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A - NUMBER 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 1996
BANYAN STRATEGIC REALTY TRUST
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(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 0-15465 36-3375345
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
150 South Wacker Drive, Suite 2900, Chicago, IL 60606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 553-9800
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This document consists of 10 pages.
Exhibit index is located on page 2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
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EXHIBITS.
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Financial Statements and Pro Forma Financial Information:
(i) 6901 Riverport Drive
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 31, 1997 BANYAN STRATEGIC REALTY TRUST
(Registrant)
By:
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Joel L. Teglia
Vice President, Chief Financial and
Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 31, 1997 BANYAN STRATEGIC REALTY TRUST
(Registrant)
By: /s/ JOEL L. TEGLIA
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Joel L. Teglia
Vice President, Chief Financial and
Accounting Officer
STATEMENT OF REVENUE AND CERTAIN EXPENSES
6901 RIVERPOINT DRIVE
For the Year Ended December 31, 1995
with Report of Independent Auditors
REPORT OF INDEPENDENT AUDITORS
Mr. Joel L. Teglia, Chief Financial Officer
Banyan Strategic Realty Trust
We have audited the Statement of Revenue and Certain Expenses of 6901
Riverport Drive, Louisville, Kentucky (the Property) for the year ended
December 31, 1995. The Statement of Revenue and Certain Expenses is the
responsibility of the Property's management. Our responsibility is to express
an opinion on the Statement of Revenue and Certain Expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenue and Certain
Expenses is free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures made in the
Statement of Revenue and Certain Expenses. An audit also includes assessing
the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the Statement of Revenue and
Certain Expenses. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission as described in Note 2 and is not intended to be a
complete presentation to the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to
above presents fairly, in all material respects, the revenue and certain
expenses described in Note 2 for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
November 19, 1996
Chicago, Illinois
6901 RIVERPORT DRIVE
STATEMENT OF REVENUE AND CERTAIN EXPENSES
Year Ended
December 31,
1995
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REVENUE
Base rents . . . . . . . . . . . . . . . . . . . . . $1,022,151
Tenant reimbursements. . . . . . . . . . . . . . . . 71,585
Other. . . . . . . . . . . . . . . . . . . . . . . . 3,864
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Total revenue. . . . . . . . . . . . . . . . 1,097,600
EXPENSES
Utilities. . . . . . . . . . . . . . . . . . . . . . 10,071
Landscaping, repairs and general maintenance . . . . 7,528
Management fees. . . . . . . . . . . . . . . . . . . 41,576
Insurance. . . . . . . . . . . . . . . . . . . . . . 11,545
Interest expense . . . . . . . . . . . . . . . . . . 234,765
Bond related costs . . . . . . . . . . . . . . . . . 27,522
Administrative . . . . . . . . . . . . . . . . . . . 4,872
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Total Expenses . . . . . . . . . . . . . . . 337,879
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Revenue in excess of certain expenses. . . . . . . . $ 759,721
==========
See accompanying notes.
6901 RIVERPORT DRIVE
LOUISVILLE, KENTUCKY
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
1. BUSINESS
The accompanying Statement of Revenue and Certain Expenses related to the
operations of 6901 Riverport Drive, Louisville, Kentucky, an industrial
property (the "Property"). The property is owned by the county in Jefferson
County, Kentucky, and was leased to GFP Partners-VI, Ltd. (GFP-VI) during the
year ended December 31, 1995 and for the period from January 1, 1996 through
November 19, 1996. The lease on the property was acquired on November 19,
1996 by Banyan Strategic Realty Trust ("Banyan").
As of December 31, 1995, the Property was 100% subleased with two tenants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Statement of Revenue and Certain Expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. The Statement of Revenue and Certain Expenses is not
representative of the actual operations of the Property for the period
presented nor indicative of future operations as certain expenses, primarily
depreciation and amortization, which may not be comparable to the expenses
expected to be incurred by Banyan in future operations of the Property, have
been excluded.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized in the period in which it is earned. Expenses are
recognized in the period in which they are incurred.
USE OF ESTIMATES
The preparation of the Statement of Revenue and Certain Expenses in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
3. RENTALS
The Property has entered into tenant subleases that provide for tenants to
share in the operating expenses in relation to their pro rata share as
defined.
4. MANAGEMENT AGREEMENT/RELATED PARTIES
During the year ended December 31, 1995, the Property was managed by a related
party management company of GFP Partners-VI, Ltd. The management agreement
provided for an annual fee of 4% of base rental operating receipts.
5. BONDS PAYABLE
The lease on the property was purchased subject to a $5.7 million Industrial
Revenue Bond (the Bonds) issued by Jefferson County, Kentucky, which mature
along with $528,000 of deferred interest in December 2014. The Bonds were
collateralized by GFP-VI's capital lease on the property. Interest on the
Bonds is paid monthly at a variable rate, which was 4% as of December 31,
1995. The Bonds require the lessee to secure a line of credit equal to the
Bonds outstanding. All fees associated with the line of credit as well as
trustee fees and bond rating fees have been expensed as incurred.
6901 RIVERPORT DRIVE
ESTIMATED PRO FORMA STATEMENT OF NET OPERATING INCOME
(UNAUDITED)
The Estimated Pro Forma Statement of Net Operating Income represents the
amount of estimated income which would be realized by the Registrant during
twelve months of ownership of the Property, based upon the assumptions set
forth in the accompanying notes (See Note 1).
REVENUE
Base rents . . . . . . . . . . . . . . . . . . . . . $1,022,151
Tenant reimbursements. . . . . . . . . . . . . . . . 71,585
Other. . . . . . . . . . . . . . . . . . . . . . . . 3,864
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Total revenue. . . . . . . . . . . . . . . . 1,097,600
EXPENSES
Utilities. . . . . . . . . . . . . . . . . . . . . . 10,071
Depreciation (See Note 2). . . . . . . . . . . . . . 206,044
Landscaping, repairs and general maintenance . . . . 7,528
Management fees. . . . . . . . . . . . . . . . . . . 52,904
Insurance. . . . . . . . . . . . . . . . . . . . . . 14,000
Interest expense . . . . . . . . . . . . . . . . . . 216,000
Bond related costs . . . . . . . . . . . . . . . . . 126,543
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Total expenses . . . . . . . . . . . . . . . 633,090
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Pro Forma revenue in excess of expenses. . . . . . . . $ 464,510
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Pro Forma funds from operations (see Note 4) . . . . . $ 670,554
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The accompanying notes are an integral part
of the estimated pro forma statement.
6901 RIVERPORT DRIVE
NOTES TO ESTIMATED PRO FORMA STATEMENT
1) This statement does not propose to forecast actual operating results for
any period in the future and thus, the following assumptions may not be valid
for future years and actual results may differ. These statements should be
read in conjunction with the Statement of Revenue and Certain Expenses for the
year ended December 31, 1995 which were modified by Management for known
changes in revenues and expenses associated with the Registrant's ownership of
the Property in order to estimate the pro forma statement.
2) Depreciation expense which represents a non-cash expenditure has been
included for informational purposes only. Depreciation is calculated on a
depreciable basis of approximately $8,242,000 using the straight-line method
based on a useful life of 40 years.
3) The Property will be managed by Banyan for an initial management fee of
4.0% of gross revenues.
4) Funds From Operations (or "FFO") has been provided in the Pro Forma
Statement as supplemental information to the property's projected operating
results. FFO is used by the real estate investment trust industry as a
measure of a property's performance and is defined as net operating income
from a property's operations, plus certain non-cash items including
depreciation and amortization and excluding any extraordinary capital items.
