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): April 30, 1998
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 25 pages.
Exhibit index is located on page 5.
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ORLANDO OFFICE BUILDING PORTFOLIO
On April 30, 1998, the Trust acquired interest in four multi-tenant
office properties in Orlando and Winter Park, Florida from an unaffiliated
third party.
The Orlando Office Building Portfolio consists of four multi-tenant
office properties in Orlando and Winter Park, Florida. The portfolio
includes sixteen buildings containing a total of approximately 291,100 net
rentable square feet which were acquired for approximately $23.5 million
including closing costs and other related expenses. The properties were
purchased utilizing proceeds from the revolving line of credit obtained
from Nomura Asset Capital Corporation (the "Nomura Line"), which will be
repaid upon obtaining permanent financing for the properties.
The aggregate occupancy of the portfolio is 91 percent. A breakdown
of the individual properties in the Orlando Office Building Portfolio are:
University Corp. Center Winter Park, FL 7 bldgs.; 127,800 sq.ft.; 94% occup.
Metric Plaza Winter Park, FL2 bldgs.; 32,000 sq. ft.; 69% occup.
Park Center Orlando, FL 2 bldgs.; 47,200 sq. ft.; 85% occup.
Sand Lake Tech. Center Orlando, FL 5 bldgs.; 84,100 sq. ft.; 97% occup.
The day-to-day operations of the properties are managed by Welsh
Companies, Inc., which will receive a management fee each month equal to 3.5%
of gross collections, as defined in the management agreement, for these
management services. The term of the management agreement is for one year,
cancelable upon 30 days written notice. If not terminated, the agreement will
automatically renew for additional periods of one year each.
The audited Combined Statements of Revenue and Certain Expenses of the
Orlando Office Building Portfolio are included in ITEM 7.
AVALON RIDGE
On April 24, 1998, the Trust acquired from an unaffiliated third party a
100% fee simple ownership interest in two single-story office buildings
commonly known as Avalon Ridge located in Norcross, Georgia, a northeast
suburb of Atlanta, for a purchase price of approximately $3.9 million
including closing costs and related expenses. The property contains
approximately 57,400 net rentable square feet and was 61% leased with two
tenants upon acquisition. As of May 1, 1998, the property was 100% leased to
three tenants and it will be 100% occupied on January 1, 1999. The Trust
funded the acquisition from its cash reserves and by utilizing a draw of $3.8
million upon its revolving line.
Avalon Ridge was constructed in 1997 and 1998 and began operations in
March 1998. The Trust is not presenting audited financial statements of this
property because the operating history would not constitute a fiscal year.
TOWER LANE BUSINESS PARK
In April 1998, the Trust formed a new joint venture Butterfield O'Hare
L.P. (the "Venture") in which the Trust has an 89.1% Limited Partnership
interest and .9% General Partnership interest. The Trust contributed to the
Venture its 100% ownership of Butterfield Office Plaza and the Venture
acquired Tower Lane Business Park ("Tower Lane") in exchange for a 10% limited
partner interest plus cash of $755,000. The Venture is consolidated in the
Trust's financial statements and the acquisition of Tower Lane is reflected at
its total purchase price of $5.1 million including closing costs and related
expenses. Upon acquisition, the venture assumed an existing mortgage loan in
the amount of approximately $3.7 million. The loan matures December, 2002,
bears an interest rate of 8.35% and is payable in monthly installments of
principal and interest based on 360-month amortization schedule.
<PAGE>
Tower Lane consists of two single-story office buildings located in
Bensenville, Illinois, a western suburb of Chicago. The property contains
approximately 95,900 net rentable square feet and was 90% occupied at the time
of the acquisition.
The audited Statements of Revenue and Certain Expenses of Tower Lane are
included in ITEM 7.
AVALON CENTER OFFICE PARK
On March 20, 1998, the Trust acquired from an unaffiliated third party a
100% fee simple ownership interest in two one-story office buildings known as
Avalon Center Office Park located in Norcross, Georgia, for a purchase price
of approximately $4.4 million including closing costs and related expenses.
The property contains approximately 53,300 net rentable square feet and was
65% occupied with three tenants at the time of the acquisition. As of May
1998, the property is 96% leased to four tenants with occupancies starting in
the second half of the current year. The Trust funded the acquisition price
from its cash reserves and by utilizing a draw of $4.3 million upon its
revolving line.
The Avalon Center Office Park was constructed in 1997 and began
operations in late August 1997. The Trust is not presenting audited financial
statements of this property because the operating history would not constitute
a fiscal year.
PEACHTREE POINTE OFFICE PARK
On January 20, 1998, the Trust acquired from an unaffiliated third party
a 100% fee simple ownership interest in five one-story office buildings
commonly known as Peachtree Pointe Office Park located in Norcross, Georgia, a
northeast suburb of Atlanta, for a purchase price of approximately $4.5
million. The property contains approximately 71,700 net rentable square feet,
was constructed in 1982 and was 92% occupied with 23 tenants at the time of
acquisition. The Trust funded the acquisition from its cash reserves as well
as by utilizing a draw upon its revolving line of $3.4 million.
The Trust's independent auditors will perform an audit of Peachtree
Pointe Office Park and the Trust will file audited financial statements for
this property within sixty days of the date of this report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
a) Financial Statements.
(i) Orlando Office Building Portfolio (See attached).
(ii) Tower Lane Business Park (See attached).
b) Pro Forma Financial Information
<PAGE>
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: May 29, 1998 BANYAN STRATEGIC REALTY TRUST
(Registrant)
By: /s/ Joel L. Teglia
Vice President,
Chief Financial and
Accounting Officer
<PAGE>
EXHIBIT INDEX
-------------
a) Financial Statements
(i) Orlando Office Building Portfolio
(ii) Tower Lane Business Park
b) Pro Forma Financial Information
<PAGE>
a) FINANCIAL STATEMENTS
(i) ORLANDO OFFICE BUILDING PORTFOLIO
---------------------------------
Combined Statements of Revenue and
Certain Expenses
ORLANDO OFFICE BUILDING PORTFOLIO
For the year ended December 31, 1997 and
For the period from January 1, 1998
to April 30, 1998
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Banyan Strategic Realty Trust
We have audited the accompanying Combined Statements of Revenue and Certain
Expenses of the Orlando Office Building Portfolio (the Properties) for the
year ended December 31, 1997 and for the period from January 1, 1998 to
April 30, 1998. The Combined Statements of Revenue and Certain Expenses
are the responsibility of the Properties' management. Our responsibility
is to express an opinion on the Combined Statements of Revenue and Certain
Expenses based on our audits.
We conducted our audits 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 Statements of
Revenue and Certain Expenses are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures made in the Combined Statements 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 Combined Statements of Revenue and Certain
Expenses. We believe that our audits provide a reasonable basis for our
opinion.
The accompanying Combined Statements of Revenue and Certain Expenses were
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/A of Banyan Strategic Realty Trust as described in Note 2 and are
not intended to be a complete presentation of the Properties' combined
revenue and expenses.
In our opinion, the Combined Statements of Revenue and Certain Expenses
referred to above present fairly, in all material respects, the combined
revenue and certain expenses of the Properties described in Note 2 for the
year ended December 31, 1997 and for the period from January 1, 1998 to
April 30, 1998, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 27, 1998
<PAGE>
ORLANDO OFFICE BUILDING PORTFOLIO
Combined Statements of Revenue and Certain Expenses
(Amounts in thousands)
Period from
January 1,
Year Ended 1998
December 31, to April 30,
1997 1998
------------ ------------
REVENUE:
Base rents . . . . . . . . . . . . $ 2,399 $ 889
Tenant reimbursements. . . . . . . 339 111
Other. . . . . . . . . . . . . . . 34 1
-------- --------
Total revenue. . . . . . . . . . 2,772 1,001
-------- --------
EXPENSES:
Operating and maintenance. . . . . 306 93
Real estate taxes. . . . . . . . . 254 85
Sales tax. . . . . . . . . . . . . 143 53
Management fees. . . . . . . . . . 104 37
Insurance. . . . . . . . . . . . . 25 8
-------- --------
Total expenses . . . . . . . . . 832 276
-------- --------
Revenue in excess of certain expenses $ 1,940 $ 725
======== ========
See accompanying notes.
<PAGE>
ORLANDO OFFICE BUILDING PORTFOLIO
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
1. BUSINESS
The accompanying Combined Statements of Revenue and Certain Expenses
relate to the combined operations of the Orlando Office Building Portfolio
(the "Properties") which are as follows:
Approximate
Rentable
Property Name Location Square Footage
- ------------- -------- --------------
University Corporate
Center Winter Park, FL 127,800
Metric Plaza Winter Park, FL 32,000
Park Center Orlando, FL 47,200
Sand Lake Tech. Center Orlando, FL 84,100
-------
291,100
=======
The Properties were acquired by a subsidiary of Banyan Strategic
Realty Trust ("Banyan") on April 30, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Combined Statements of Revenue and Certain Expenses
were 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/A of Banyan. The accompanying financial statements are
not representative of the actual operations of the Properties for the
periods presented nor indicative of future operations as certain expenses,
primarily depreciation, amortization and interest expense, which may not be
comparable to the expenses expected to be incurred by Banyan in future
operations of the Properties, have been excluded. The operations of the
Properties have been presented on a combined basis because all of the
Properties are under common ownership and management.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized on a straight-line basis over the terms of the
related leases. Expenses are recognized in the period in which they are
incurred.
USE OF ESTIMATES
The preparation of the Combined Statements 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 the combined revenue and expenses during the reporting
periods. Actual results could differ from these estimates.
3. RENTALS
The Properties have entered into tenant leases that provide for
tenants to share in the operating expenses and real estate taxes on a pro
rata basis, as defined.
<PAGE>
4. LEASES AND SIGNIFICANT TENANTS
The Properties had one tenant which accounted for approximately 17% of
the total rental income earned for the year ended December 31, 1997 and for
the period from January 1, 1998 to April 30, 1998.
5. RELATED PARTY TRANSACTIONS
Insurance expense of $25,000 and $8,000 for the year ended
December 31, 1997 and the period from January 1, 1998 to April 30, 1998,
respectively, represents an allocation by the seller of the Properties.
<PAGE>
(ii) TOWER LANE BUSINESS PARK
------------------------
Statements of Revenue and
Certain Expenses
TOWER LANE BUSINESS PARK
For the year ended December 31, 1997 and
For the period from January 1, 1998
to March 31, 1998
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Banyan Strategic Realty Trust
We have audited the Statements of Revenue and Certain Expenses of Tower
Lane Business Park (the Property) for the year ended December 31, 1997 and for
the period from January 1, 1998 to March 31, 1998. The Statements of Revenue
and Certain Expenses are the responsibility of the Property's management. Our
responsibility is to express an opinion on the Statements of Revenue and
Certain Expenses based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statements of Revenue and
Certain Expenses are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
made in the Statements 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
Statements of Revenue and Certain Expenses. We believe that our audits
provide a reasonable basis for our opinion.
The accompanying Statements of Revenue and Certain Expenses were 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/A of Banyan Strategic Realty Trust as described in Note 2 and are
not intended to be a complete presentation of the Property's revenue and
expenses.
In our opinion, the Statements of Revenue and Certain Expenses referred to
above present fairly, in all material respects, the revenue and certain
expenses of the Property described in Note 2 for the year ended
December 31, 1997 and for the period from January 1, 1998 to March 31,
1998, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 21, 1998
<PAGE>
TOWER LANE BUSINESS PARK
Statements of Revenue and Certain Expenses
(Amounts in thousands)
Period from
January 1,
Year Ended 1998
December 31, to March 31,
1997 1998
------------ ------------
REVENUE:
Rental . . . . . . . . . . . . . . $ 792 $ 201
Other. . . . . . . . . . . . . . . 3 7
----- -----
Total revenue. . . . . . . . . . 795 208
----- -----
EXPENSES:
Real estate taxes. . . . . . . . . 96 24
Other operating. . . . . . . . . . 97 22
Utilities. . . . . . . . . . . . . 22 4
Management fees. . . . . . . . . . 34 9
Insurance. . . . . . . . . . . . . 6 2
----- -----
Total expenses . . . . . . . . . 255 61
----- -----
Revenue in excess of certain expenses $ 540 $ 147
===== =====
See accompanying notes.
<PAGE>
TOWER LANE BUSINESS PARK
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
1. BUSINESS
The accompanying Statements of Revenue and Certain Expenses relate to
the operations of Tower Lane Business Park (the Property), which consists
of two one-story multi-tenant office buildings located in Bensenville,
Illinois. The Property was acquired by a subsidiary of Banyan Strategic
Realty Trust ("Banyan") on April 27, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Statements of Revenue and Certain Expenses were
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/A of Banyan. The Statements of Revenue and Certain Expenses are
not representative of the actual operations of the Property for the periods
presented nor indicative of future operations as certain expenses,
primarily depreciation, amortization and interest, 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 Statements 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 periods. Actual
results could differ from these estimates.
3. RELATED PARTY TRANSACTIONS
During the year ended December 31, 1997 and for the period from
January 1, 1998 to March 31, 1998, the Property paid an asset management
fee to the previous owner of the Property totaling $33,854 and $8,690,
respectively. The fee was paid monthly and was based on 4% of gross rental
operating receipts.
4. LEASES AND SIGNIFICANT TENANTS
The Property had three tenants which accounted for approximately 34%
of the total rental income earned for the year ended December 31, 1997 and
for the period from January 1, 1998 to March 31, 1998.
<PAGE>
b) PRO FORMA FINANCIAL INFORMATION
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited)
This unaudited Pro Forma Condensed Consolidated Balance Sheet is
presented assuming that as of March 31, 1998, the Trust acquired Avalon
Ridge Business Park ("Avalon Ridge"), Tower Lane Business Park ("Tower
Lane") and the four properties in the Orlando Portfolio all as described in
Item 2.
This unaudited Pro Forma condensed Consolidated Balance Sheet is not
necessarily indicative of what the actual financial position would have
been at March 31, 1998, nor does it purport to represent the future
financial position of the Trust.
<PAGE>
<TABLE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1998
(Unaudited)
(Dollars in thousands)
<CAPTION>
Avalon Tower Orlando Pro
Historical Ridge Lane Portfolio Forma
---------- ------ -------- --------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and Cash Equivalents. . . . $ 4,006 $ (21) $ (755) $ 344 $ 3,574
Restricted Cash. . . . . . . . . 1,916 -- -- -- 1,916
Interest and Accounts Receivable 793 -- -- -- 793
-------- ------ ------- ------- --------
6,715 (21) (755) 344 6,283
-------- ------ ------- ------- --------
Investment in Real Estate, at cost:
Land . . . . . . . . . . . . . 27,440 640 1,530 6,817 36,427
Building . . . . . . . . . . . 133,119 3,217 3,570 16,440 156,346
Building Improvements. . . . . 5,102 -- -- -- 5,102
-------- ------ ------- ------- --------
165,661 3,857 5,100 23,257 197,875
Less: Accumulated Depreciation (7,616) -- -- -- (7,616)
-------- ------ ------- ------- --------
158,045 3,857 5,100 23,257 190,259
-------- ------ ------- ------- --------
Deferred Financing Costs, net. . 1,197 -- -- 130 1,327
Other Assets . . . . . . . . . . 2,590 (4) (10) (285) 2,291
-------- ------ ------- ------- --------
Total Assets . . . . . . . . $168,547 $3,832 $ 4,335 $23,446 $200,160
======== ====== ======= ======= ========
<PAGE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
Avalon Tower Orlando Pro
Historical Ridge Lane Portfolio Forma
---------- ------ -------- --------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses$ 1,901 $ -- $ -- $ 44 $ 1,945
Accrued real estate taxes payable 1,249 2 -- -- 1,251
Mortgage loans payable . . . . . 78,049 3,800 3,675 23,250 108,774
Bonds payable. . . . . . . . . . 21,584 -- -- -- 21,584
Accrued interest payable . . . . 555 -- -- -- 555
Unearned revenue . . . . . . . . 318 2 -- 6 326
Security deposits. . . . . . . . 1,046 28 -- 146 1,220
Distributions payable. . . . . . 1,592 -- -- -- 1,592
-------- ------ ------ ------- --------
Total liabilities. . . . . . . . 106,294 3,832 3,675 23,446 137,247
-------- ------ ------ ------- --------
Minority interest in consolidated
partnerships . . . . . . . . . 1,325 -- 660 -- 1,985
SHAREHOLDERS' EQUITY
Shares of beneficial interest. . 119,185 -- -- -- 119,185
Accumulated deficit. . . . . . . (50,891) -- -- -- (50,891)
Treasury shares at cost. . . . . (7,366) -- -- -- (7,366)
-------- ------ ------ ------- --------
Total shareholders' equity . . . 60,928 -- -- -- 60,928
-------- ------ ------ ------- --------
Total liabilities and shareholders'
equity . . . . . . . . . . . . $168,547 $3,832 $4,335 $23,446 $200,160
======== ====== ====== ======= ========
</TABLE>
<PAGE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
The unaudited Pro Forma Condensed Consolidated Statements of
Operations for the three months ended March 31, 1998 is presented as if
each of the 1998 acquisition properties ("1998 Acquisition Properties")
described in Item 2 had been acquired as of January 1, 1998.
The unaudited Pro Forma Condensed Consolidated Statement of Operations
for the year ended December 31, 1997 is presented as if the following had
occurred as of January 1, 1997; (a) the acquisition of the 1998
Acquisition Properties; (b) the acquisition and disposition of various
properties during 1997; (c) the October, 1997 issuance of 2,192,501 shares
of beneficial interest the proceeds of which were used to repay borrowings
under a line of credit of $9 million.
These unaudited Pro Forma Condensed Consolidated Statements of
Operations have been prepared by management of the Trust and do not purport
to be indicative of the results which would actually have been obtained had
the transactions described above been completed on the dates indicated or
which may be obtained in the future.
<PAGE>
<TABLE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(Unaudited)
(Dollars in thousands, except per share data)
<CAPTION>
1998 Acquisitions (A)
-----------------------------------------------------
Pro
Peach- Orlando Forma
Histor- tree Avalon Avalon Tower Port- Adjust- Pro
ical Pointe Center Ridge Lane folio ments Forma
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income. . . . $ 7,554 $ 44 $ 57 $ 11 $ 201 $ 672 $ -- $ 8,539
Operating cost
reimbursement. . . 756 -- 3 -- -- 84 -- 843
Miscellaneous tenant
income . . . . . . 222 -- -- -- 7 1 -- 230
Income on investments 32 -- -- -- -- -- -- 32
------- ------- ------- ------- ------- ------- ---- -------
Total revenue. . . . . 8,564 44 60 11 208 757 -- 9,644
------- ------- ------- ------- ------- ------- ---- -------
Expenses:
Property operating . 3,064 7 15 7 61 208 -- (B) 3,362
Interest . . . . . . 1,860 -- -- -- -- -- 647 (C) 2,507
Depreciation and
amortization . . . 1,061 -- -- -- -- -- 152 (D) 1,213
General and adminis-
trative. . . . . . 1,034 -- -- -- -- -- -- 1,034
Amortization of
deferred loan fees
and financing
costs. . . . . . . 72 -- -- -- -- -- 16 (D) 88
------- ------- ------- ------- ------- ------- ---- -------
Total Expenses . . . . 7,091 7 15 7 61 208 815 8,204
------- ------- ------- ------- ------- ------- ---- -------
<PAGE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
1998 Acquisitions (A)
-----------------------------------------------------
Pro
Peach- Orlando Forma
Histor- tree Avalon Avalon Tower Port- Adjust- Pro
ical Pointe Center Ridge Lane folio ments Forma
-------- -------- -------- -------- -------- -------- -------- --------
Income before minority
interest. . . . . . . $ 1,473 $ 37 $ 45 $ 4 $ 147 $ 549 $ (815) $1,440
Minority interest in
consolidated partner-
ships . . . . . . . . (116) -- -- -- -- -- (39) (155)
------- ------- ------- ------- ------- ------- ------- -------
Net income . . . . . . $ 1,357 $ 37 $ 45 $ 4 $ 147 $ 549 $ (854) $ 1,285
======= ======= ======= ======= ======= ======= ======= =======
Weighted number
of shares outstanding13,251,417 13,251,417
Per Share - Basic and
Diluted. . . . . . .$ 0.10 $ 0.10
========== ==========
- ----------------
<FN>
(A) These adjustments relate to certain properties acquired subsequent to December 31, 1997 and include each
property's operations for the period of time from January 1, 1998 through its respective date of acquisition or March
31, 1998 if acquired subsequent to that date.
(B) The pro forma adjustment to reflect management fees and insurance expense assuming the Trust's operating cost
structure is immaterial.
(C) The pro forma adjustment reflects the increase in interest expense relating to acquired properties. These
properties, except Tower Lane, were acquired using variable interest rate debt. Avalon Ridge was under construction and
did not start operations until March of 1998. Interest for Avalon Ridge was capitalized during its construction period.
If the variable interest rate was higher by 0.125% for all variable rate debt, the pro forma interest expense would be
$2,521.
(D) The pro forma adjustment reflects depreciation for the acquisition properties (calculated using the straight-
line method with a 40 year useful life), and amortization of additional loan costs relating to debt for
acquisition properties.
</TABLE>
<PAGE>
<TABLE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
(Dollars in thousands, except per share data)
<CAPTION>
1997 1997
Acquisitions Dispositions
Historical (A) (B)
---------- ------------ ------------
<S> <C> <C> <C>
Revenue:
Rental income. . . . $ 25,370 $ 4,795 $(1,242)
Operating cost reimburse-
ment . . . . . . . 2,441 112 --
Miscellaneous tenant
income . . . . . . 707 161 (170)
Income on investments 267 -- --
------- ------- -------
Total revenue. . . . . 28,785 5,068 (1,412)
------- ------- -------
Expenses:
Property operating . 10,689 2,104 (1,162)
Interest expense . . 6,447 404 (297)
Depreciation and
amortization . . . 3,490 -- (222)
General and administra-
tive . . . . . . . 4,315 -- --
Amortization of deferred
loan fees and financing
costs. . . . . . . 723 -- (54)
Recovery of losses on
loans, notes and
interest receivable (161) -- --
------- ------- -------
Total expenses . . . . 25,503 2,508 (1,735)
------- ------- -------
<PAGE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
1997
1997 Dispositions
Historical Acquisitions (B)
---------- ------------ ------------
Income before minority
interest and income
from operations of
real estate venture. $ 3,282 $ 2,560 $ 323
Minority interest in
consolidated partner-
ships. . . . . . . . (590) -- 20
Income (loss) from
operations of real
estate venture . . . 37 -- (37)
Gain on disposition and
extraordinary item . 817 -- (881)
------- ------- -------
Net income . . . . . . $ 3,546 $ 2,560 $ (575)
======= ======= =======
Weighted number of shares
outstanding - Basic . 11,149,982
Per share - Basic. . . $0.32
==========
Weighted number of shares
outstanding - Diluted 11,245,242
Per share - Diluted. . $0.32
==========
</TABLE>
<PAGE>
<TABLE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
<CAPTION>
1998 Acquisitions (C)
-------------------------------------------------------
Peachtree Avalon Avalon Tower Orlando Pro Forma
Pointe Center Ridge Lane Portfolio Adjustments Pro Forma
--------- ------- ------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income. . . . . $ 843 $ 107 $ -- $ 792 $ 2,399 $ -- $ 33,064
Operating cost reimburse-
ment . . . . . . . . 43 7 -- -- 339 -- 2,942
Miscellaneous tenant
income . . . . . . . 8 -- -- 3 34 -- 743
Income on investments. -- -- -- -- -- -- 267
------- ------- ------- ------- ------- ------ -------
Total revenue. . . . . . 894 114 -- 795 2,772 -- 37,016
------- ------- ------- ------- ------- ------ -------
Expenses:
Property operating . . 446 27 1 255 832 -- (D) 13,192
Interest expense . . . -- -- -- -- -- 3,407 (E) 9,961
Depreciation and
amortization . . . . -- -- -- -- -- 1,147 (F) 4,415
General and administra-
tive . . . . . . . . -- -- -- -- -- -- 4,315
Amortization of deferred
loan fees and financing
costs. . . . . . . . -- -- -- -- -- 143 (F) 812
Recovery of losses on
loans, notes and
interest receivable. -- -- -- -- -- -- (161)
------- ------- ------- ------- ------- ------ -------
Total expenses . . . . . 446 27 1 255 832 4,697 32,534
------- ------- ------- ------- ------- ------ -------
<PAGE>
BANYAN STRATEGIC REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - CONTINUED
1998 Acquisitions
-------------------------------------------------------
Peachtree Avalon Avalon Tower Orlando Pro Forma
Pointe Center Ridge Lane Portfolio Adjustments Pro Forma
--------- ------- ------- ------- ---------- ----------- ---------
Income before minority
interest and income
from operations of
real estate venture. . $ 448 $ 87 $ (1) $ 540 $ 1,940 $(4,697) $ 4,482
Minority interest in
consolidated partner-
ships. . . . . . . . . -- -- -- -- -- (135) (705)
Income (loss) from
operations of real
estate venture . . . . -- -- -- -- -- -- --
Gain on disposition and
extraordinary item . . -- -- -- -- -- 64(G) --
------- ------- ------- ------- ------- ------- -------
Net income . . . . . . . $ 448 $ 87 $ (1) $ 540 $ 1,940 $(4,768) $ 3,777
======= ======= ======= ======= ======= ======= =======
Weighted number of shares
outstanding - Basic . . 13,125,324
Per share - Basic. . . . $ 0.29
==========
Weighted number of shares
outstanding - Diluted . 13,584,994
Per share - Diluted. . . $ 0.28
==========
<PAGE>
<FN>
- ---------------
(A) These adjustments relate to certain properties acquired subsequent to December 31, 1996 and include each
property's operations for the period of time from January 1, 1997 through its respective date of acquisition.
(B) The Dispositions column eliminates the historical revenues and expenses of certain properties that were sold
prior to December 31, 1997.
(C) The 1998 Acquisitions columns reflect the historical revenues and operating expenses of properties acquired
after December 31, 1997.
(D) The pro forma adjustment to reflect management fees and insurance expense assuming the Trusts operating cost
structure is immaterial.
(E) The pro forma adjustment reflects the increase in interest expense relating to acquired properties, net of
the decrease in interest expense resulting from the repayment of debt utilizing proceeds received from the sale of
properties and the issuance of shares. Avalon Ridge was under construction for the whole year of 1997, and the Avalon
Center was under construction until August of 1997. Interest for Avalon Center and Avalon Ridge was capitalized during
the periods the properties were under construction. The Trust used variable interest rate debt to purchase various of
its properties. If the variable rate was higher by 0.125% for all variable rate debt, the pro forma interest expense
would be $10,009.
(F) The pro forma adjustment reflects the depreciation expense for 1997 and 1998 acquisition properties
(calculated using the straight-line method with a 40 year useful life), and amortization of additional loan costs
relating to debt for acquisition properties and costs relating to the unsecured corporate financing completed on October
14, 1997.
(G) To eliminate extraordinary item on debt refinancing.
</TABLE>
