SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 26, 1997
BANYAN STRATEGIC REALTY TRUST
(Exact name of Registrant as specified in its charter)
Massachusetts 0-15465 36-3375345
(State of or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
150 South Wacker Drive, Suite 2900, Chicago, IL 60606
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 553-9800
This document consists of 4 pages.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 30, 1997, Banyan Strategic Realty Trust (The "Trust")
acquired a 100% ownership interest in a multi-tenant office building known
as Southlake Corporate Center. On August 26, 1997, the Trust acquired 100%
ownership interests in two separate multi-tenant office projects known as
University Square Business Center and Technology Center.
SOUTHLAKE CORPORATE CENTER
The Southlake Corporate Center property is a three-story office
building located in Morrow, Georgia (approximately 20 miles south of
Atlanta). The property contains approximately 56,200 square feet of gross
leasable area, was constructed in 1989 and is situated on approximately
three acres of land. The Southlake Corporate Center property was acquired
for a purchase price of $4,450,000 and the Trust assumed liabilities at
acquisition of approximately $35,000. The acquisition price was funded by
a draw on the Trust's line of credit with American National Bank and Trust
Company of Chicago ("ANB").
The Southlake Corporate Center property was 100% occupied with
sixteen tenants upon acquisition and remains fully occupied as of August
31, 1997. Two tenants occupy over 5,000 square feet of office space each,
representing approximately 36% of the total gross leasable area of the
building. The Georgia Department of Revenue, which operates a State of
Georgia tax processing center, occupies approximately 10,700 square feet of
gross leasable area pursuant to a lease which expires on June 30, 2001.
Lassiter Properties, a property management and real estate investment firm,
occupies approximately 9,500 square feet of gross leasable area pursuant to
a lease which expires on August 31, 2002.
The Southlake Corporate Center's day-to-day operations are managed by
Brannen Goddard Company which receives a management fee each month equal to
3.25% of rent collected at the property for these management services. The
term of the management agreement is for one year, cancelable upon 30 days
written notice and is renewable for additional terms of one year at the
Trust's option.
UNIVERSITY SQUARE BUSINESS CENTER
The University Square Business Center property (the "University
Square property") is located in Huntsville, Alabama and consists of six
one-story buildings totaling approximately 184,700 square feet of gross
leasable area, was constructed from 1984 through 1987 and is situated on
approximately nineteen acres of land. The University Square property was
acquired by the Trust for a purchase price of $7.3 million and the Trust
assumed approximately $131,000 of trade liabilities at acquisition. In
addition, at acquisition, the Trust assumed an existing mortgage loan with
an outstanding principal balance of approximately $4,963,000. The mortgage
loan matures in January 2007, bears interest at a fixed rate of 8.89% per
annum and requires monthly payments of principal based upon a twenty-five
year amortization schedule with a balloon payment of approximately
$3,989,000 due upon maturity. There is no prepayment penalty for any
unscheduled principal payments on the mortgage loan prior to December 18,
2001. For the period from December 18, 2001 to June 30, 2006 there is a
prepayment penalty equal to the greater of 1% or the current treasury yield
calculated on the outstanding principal balance. There is no prepayment
penalty for the period July 1, 2006 to January 1, 2007. The balance of the
acquisition funding was provided by a draw upon the Trust's line of credit
with ANB.
The University Square property was 91% occupied with 57 tenants upon
acquisition. There are nine tenants which occupy over 5,000 square feet of
gross leasable area each, representing approximately 43% of the total space
of the building.
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The University Square Property's day-to-day operations are managed by
InterSouth Properties which will receive a management fee each month equal
to 4% of rent collected at the property for these management services. The
term of the management agreement is for one year, cancelable upon 30 days
written notice and is renewable for additional terms of one year at the
Trust's option.
TECHNOLOGY CENTER
The Technology Center property is located in Huntsville, Alabama and is a
three-story office building consisting of approximately 48,500 square feet
of gross leasable area. The Technology Center property was constructed in
1990 and is situated on approximately three acres of land. The Technology
Center property was acquired for a purchase price of $2.5 million. The
acquisition price was funded as a draw on the Trust's line of credit with
ANB.
The Technology Center property was 100% occupied at acquisition and is
leased to two tenants. Nichols Research Corporation, which specializes in
defense technology, occupies approximately 31,500 square feet of gross
leasable area pursuant to a lease which expires in January 1999. MCBA
Systems, a computer systems firm, occupies the remaining 17,000 square feet
of gross leasable area pursuant to a lease which expires in February 2000.
The Technology Center property is subject to a ground lease from the
Industrial Development Board of the City of Huntsville. There are no
rental payments due under the lease agreement through 2002. The lease
provides for a purchase option on January 1, 2003 for approximately
$50,000. Real estate taxes are abated during the term of the lease.
The Technology Center's day-to-day operations are managed by Harbert Realty
Services of Alabama, Inc. which will receive a management fee each month
equal to 5% of rent collected at the property for these management
services. The term of the management agreement is for one year, cancelable
upon 30 days written notice and is renewable for additional terms of one
year at the Trust's option.
ITEM 7. STATEMENTS AND EXHIBITS.
The Trust is currently unable to provide the financial statements and
pro forma financial information as part of this report as required under
Item 7 Financial Statements, Pro Forma Financial Information and Exhibits
(a)(b) of Form 8-K as of the date hereof. As of the date of this filing,
the Trust's independent accountants had not completed the audits of the
1996 and 1997 operating results of the properties on which the Trust bases
its pro forma operating estimates. The Trust currently anticipates
completion of the audit and filing of all required financial statements and
pro forma financial information for the properties within sixty days of the
date of this report.
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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: September 10, 1997 BANYAN STRATEGIC REALTY TRUST
(Registrant)
By: /s/ Joel L. Teglia
Vice President,
Chief Financial and
Accounting Officer
