SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-NUMBER 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 22, 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 8 pages.
Exhibit index is located on page 2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements and Pro Forma Financial Information:
(i) Oklahoma Properties (See attached).
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: July 15, 1997 BANYAN STRATEGIC REALTY TRUST
(Registrant)
By: /s/ Joel L. Teglia
Vice President, Chief Financial and
Accounting Officer
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Banyan Strategic Realty Trust
We have audited the accompanying combined statement of revenue and certain
expenses of the Oklahoma Properties (Properties) for the year ended December 31,
1996. The combined statement of revenue and certain expenses is the
responsibility of the Properties' management. Our responsibility is to express
an opinion on the combined 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 combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the combined
statement of revenue and certain expenses. An audit also includes assessing
the accounting principles used and the significant estimates made by management,
as well as evaluating the overall presentation of the combined statement of
revenue and certain expenses. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Current Report on Form
8-K of Banyan Strategic Realty Trust as described in Note 2 and is not intended
to be a complete presentation of the Properties' revenue and expenses.
In our opinion, the combined statement of revenue and certain expenses
referred to above presents fairly, in all material respects, the combined
revenue and certain expenses described in Note 2 of the Properties for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 1, 1997
OKLAHOMA PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
<TABLE>
<C> <S>
Year Ended
December 31, 1996
Revenue:
Rental $3,477,408
Other 463,702
----------
Total Revenue 3,941,110
Certain Expenses:
Salaries 588,208
Utilities 382,856
Repair & Maintenance 176,628
Advertising 52,653
Property Operating 174,239
Management Fees 196,008
Insurance 129,311
Real estate taxes 142,423
Interest 1,235,130
----------
Total Expenses 3,077,456
----------
Revenue in excess of
certain expenses $ 863,654
==========
</TABLE>
[FN] See accompanying notes.
OKLAHOMA PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
1. Business
The accompanying combined statement of revenue and certain expenses
represents the operations (see Basis of Presentation below) of Willowpark
Apartments, a 160-unit apartment project in Lawton, Oklahoma; Winchester Run
Apartments, a 200-unit apartment project in Oklahoma City, Oklahoma; Woodrun
Apartments, a 190-unit apartment project in Yukon, Oklahoma; and Country Creek
Apartments, a 320-unit apartment project in Oklahoma City, Oklahoma
(collectively "the Oklahoma Properties or Properties"). The Properties were all
acquired from the same seller by Banyan Strategic Realty Trust ("the Trust") on
May 22, 1997.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Current Report on Form
8-K of the Trust. The combined statement is not representative of the actual
operations of the Properties for the periods presented nor indicative of future
operations, as certain expenses, consisting of depreciation and amortization,
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 combined statement of revenue and certain expenses
in accordance with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of revenue
and expense during the reporting period. Actual results could differ from these
estimates.
3. Related Party
During the year ended December 31, 1996, the Properties were managed by a
related party, Precor Realty Advisors, Inc. The management agreement provided
for a monthly fee of 5% of gross receipts. The management fees for December 31,
1996 were approximately $196,000.
4. Bonds Payable
The Trust purchased the Properties subject to Oklahoma Housing Financing
Agency Revenue Bonds which mature in October 2025. The principal and interest
on the bonds is payable monthly at a fixed interest rate of 7.30% until the
bonds are remarketed in 2005. The bonds outstanding as of December 31, 1996,
were approximately $16,700,000.
OKLAHOMA PROPERTIES
ESTIMATED PRO FORMA STATEMENT OF NET OPERATING INCOME
YEAR ENDED DECEMBER 31, 1996
(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).
<TABLE>
<C> <S>
Year Ended
December 31, 1996
Revenue:
Rental $3,477,408
Other 463,702
----------
Total Revenue 3,941,110
Certain Expenses:
Salaries 588,208
Utilities 382,856
Repair & Maintenance 176,628
Advertising 52,653
Property Operating 174,239
Management Fees 137,939
Insurance 48,582
Real estate taxes 142,423
Interest 1,235,130
Depreciation (See Note 2) 493,823
----------
Total Expenses 3,432,481
----------
Pro Forma revenue in $ 508,629
excess of certain ==========
expenses
Pro Forma funds from
operations (see Note 4) $1,002,452
==========
</TABLE>
[FN] The accompanying notes are an integral part of the estimated pro forma
statement.
OKLAHOMA PROPERTIES
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, 1996 which were modified by Management for known
changes in the 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 $19,753,000 using the straight-line method
based on a useful life of 40 years.
3. The Property will be managed by an unaffiliated third party for an
initial management fee of 3.5% 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.
