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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): December 16, 1997
EXCEL REALTY TRUST, INC.
(Exact Name Of Registrant As Specified In Its Charter)
<TABLE>
<CAPTION>
<S> <C> <C>
MARYLAND 1-12244 33-0160389
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
</TABLE>
16955 VIA DEL CAMPO, SUITE 100
SAN DIEGO, CALIFORNIA 92127
(Address of Principal Executive Office) (Zip Code)
(619) 485-9400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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This Current Report on Form 8-K is filed by Excel Realty Trust, Inc., a Maryland
corporation (the "Company") in connection with the matters described herein.
ITEM 5. OTHER EVENTS
In December 1997, the Company acquired two shopping centers: Merchants Central
Shopping Center located in Winchester, Tennessee and Westminster City Center
Marketplace located in Westminster, Colorado. Both properties were purchased
with cash.
Merchants Central Shopping Center was acquired on December 9, 1997 for
approximately $11.2 million. The property is anchored by a 146,401 square foot
Super Wal-Mart and has 208,123 total square feet of gross leasable area.
Westminster City Center Marketplace was acquired on December 16, 1997 for
approximately $43.8 million. This center consists of ten tenants each with over
10,000 square feet of gross leasable area including Circuit City, Homeplace,
Babies R Us, Barnes & Noble and CompUSA. In addition, the center has five out
parcels. In total, the center consists of 15 tenants with 339,600 square feet of
gross leasable area. In connection with the above acquisitions, the Company also
incurred certain transaction costs that will be capitalized into the value of
the shopping centers and are not reflected in the above acquisition prices.
In assessing the acquisitions of the shopping centers, the Company considered,
among other factors, the location and occupancy rate of each of the shopping
centers, the quality of tenants (including the tenants' credit quality),
comparative rents, the competition in the shopping center's respective area, and
redevelopment potential of the property. The Company also assessed potential
expenses associated with owning or leasing, and operating the shopping centers,
including among other factors, estimated maintenance expenses, capital
improvement costs and other operating expenses.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Excel Realty Trust, Inc. and Westminster City Center Marketplace,
R.L.L.L.P. and Bright-Meyers Winchester Associates, L.P.
Properties Acquired by Excel Realty Trust, Inc.
(1) Report of Squire and Company, PC.
(2) Financial Statements of the Properties Acquired
(b) Pro Forma Financial Information
(c) Exhibits
23.01 Consent of Squire and Company, PC.
99.01 Historical Summary of Operating Revenues and Direct
Operating Expenses for the Properties Acquired by Excel
Realty Trust, Inc. for the year ended December 31, 1996.
99.02 Unaudited Pro Forma Condensed Consolidated Statements of
Income and Balance Sheet of Excel Realty Trust, Inc. as of
and for the nine months ended September 30, 1997, and for
the year ended December 31, 1996.
2
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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: December 30, 1997 EXCEL REALTY TRUST, INC.
By: /s/ David A. Lund
--------------------------------
David A. Lund
Principal Financial Officer
3
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EXHIBIT INDEX
Exhibit No.
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23.01 Consent of Squire & Company, PC
99.01 Historical Summary of Operating Revenues and Direct Operating
Expenses for the Properties Acquired by Excel Realty Trust, Inc.
for the year ended December 31, 1996
99.02 Unaudited Pro Forma Condensed Consolidated Statements of Income
and Balance Sheet of Excel Realty Trust, Inc. as of and for the
nine months ended September 30, 1997, and for the year ended
December 31, 1996
4
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion in the Report on Form 8-K under the Securities
Exchange Act of 1934 of Excel Realty Trust, Inc. of the report of Squire &
Company, PC dated December 22, 1997 on the Historical Summary of Operating
Revenues and Direct Operating Expenses of the property acquired by Excel Realty
Trust, Inc. for the year ended December 31, 1996.
/s/ Squire & Company, PC
Squire & Company, PC
Poway, California
December 30, 1997
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EXHIBIT 99.01
Excel Realty Trust, Inc., and Westminster City Center
Marketplace, R.L.L.L.P. and Bright-Meyers Winchester Associates, L.P.
Properties Acquired by Excel Realty Trust, Inc.
Historical Summary of Operating Revenues
and Direct Operating Expenses
in Accordance with Rule 3-14 of
the Securities and Exchange Commission
Year Ended December 31, 1996
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[SQUIRE & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Excel Realty Trust, Inc.
We have audited the accompanying Historical Summary of Operating Revenues and
Direct Operating Expenses of selected properties acquired by Excel Realty Trust,
Inc. for the year ended December 31, 1996. This summary is the responsibility of
Excel Realty Trust, Inc. and Westminster City Center Marketplace, R.L.L.L.P. and
Bright-Meyers Winchester Associates, L.P. Our responsibility is to express an
opinion on this summary 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 summary is free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the summary. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the summary. We believe that our audit of
the summary provides a reasonable basis for our opinion.
As described in Note 1, the accompanying summary was prepared in conformity with
accounting principles prescribed by the Securities and Exchange Commission which
is a comprehensive basis of accounting other than generally accepted accounting
principles, and is not intended to be a complete presentation of the properties'
revenues and expenses.
In our opinion, the summary referred to above presents fairly, in all material
respects, the operating revenues and direct operating expenses of selected
properties acquired by Excel Realty Trust, Inc. for the year ended December 31,
1996, on the basis of accounting described in Note 1.
This report is intended solely for the information and use of the Board of
Directors and management of Excel Realty Trust, Inc. and for filing with the
Securities and Exchange Commission and should not be used for any other purpose.
/s/ Squire & Company, PC
Squire & Company, PC
Poway, California
December 22, 1997
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EXCEL REALTY TRUST, INC., AND WESTMINSTER CITY CENTER
MARKETPLACE, R.L.L.L.P. AND BRIGHT-MEYERS WINCHESTER
ASSOCIATES, L.P.
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED
BY EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
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Nine Months
Ended
09/30/97 Year Ended
(Unaudited) 12/31/96
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<S> <C> <C>
OPERATING REVENUES:
Base rents $ 3,733,118 $ 2,812,460
Expense reimbursements 513,986 358,835
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Total operating revenues 4,247,104 3,171,295
DIRECT OPERATING EXPENSES:
Administrative and office expense 146,363 111,662
Management fees 75,600 58,559
Repairs and maintenance 173,211 117,078
Utilities 63,598 67,226
Insurance 50,353 40,150
Property taxes 228,369 184,055
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Total direct operating expenses 737,494 578,730
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Net operating income $ 3,509,610 $ 2,592,565
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</TABLE>
The accompanying notes are an integral part of this summary.
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EXCEL REALTY TRUST, INC., AND WESTMINSTER CITY CENTER
MARKETPLACE, R.L.L.L.P. AND BRIGHT-MEYERS WINCHESTER
ASSOCIATES, L.P.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED
BY EXCEL REALTY TRUST, INC.
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
in the preparation of this Historical Summary. The Historical Summary
and notes are representations of Excel Realty Trust, Inc., whose
management are responsible for the integrity and objectivity of this
Historical Summary.
Business Activity - Excel Realty Trust, Inc. is headquartered in San
Diego, California. The Trust is a self-administered, self-managed
equity real estate investment trust which owns and manages
income-producing properties.
The properties acquired are operated as shopping centers in the
locations below with the anchor stores listed.
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Property Location Anchor Stores
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Westminster City
Marketplace1 Westminster, CO Circuit City, Babies "R" Us, Homeplace
Merchants Central2 Winchester, TN Wal-Mart, Peebles, Inc.
</TABLE>
The above numbered properties were owned and managed by the following
entities numbered below:
1. Westminster City Center Marketplace, R.L.L.L.P.
2. Bright-Meyers Winchester Associates, L.P.
Retail space is rented to tenants under noncancelable leases ranging
from three to twenty years, with renewal options available.
Period of Operation - Merchants Central lease contracts began in
February of 1996, with additional lease contracts becoming effective
monthly through June of 1996.
Westminster City Marketplace operated for the 7 months beginning June
1, 1996.
Form of Presentation - The Historical Summary is presented in
conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, certain expenses of the properties are not included in the
summary, i.e., depreciation and interest. Financial information
pertaining to the aforementioned properties have been combined on the
Historical Summary.
Management has determined that after reasonable inquiry, it is not
aware of any material factors relating to the properties reported on in
the accompanying Historical Summary which would cause the reported
financial information not to be indicative of future operating results.
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EXCEL REALTY TRUST, INC., AND WESTMINSTER CITY CENTER
MARKETPLACE, R.L.L.L.P. AND BRIGHT-MEYERS WINCHESTER
ASSOCIATES, L.P.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED
BY EXCEL REALTY TRUST, INC.
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue Recognition - Base rental income from leases is recorded when
due from tenants. Some of the leases include percentage rents and
overage rents based on the level of sales of the lessee. Leases
generally provide for tenant reimbursements of common area maintenance.
These reimbursements are included in the accompanying Historical
Summary as expense reimbursements.
Accounting Estimates - The preparation of the Historical Summary
includes estimates and assumptions that affect the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE 2. MINIMUM FUTURE RENTALS
Retail space is leased to tenants under noncancelable operating leases.
The following is a schedule of future minimum rentals for the next five
years under the noncancelable leases after 1996:
WESTMINSTER CITY CENTER MARKETPLACE
Minimum Lease Payments
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Years Ending December 31, 1997 1998 1999 2000 2001
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<S> <C> <C> <C> <C> <C>
Comp USA $ 338,658 $ 338,658 $ 338,658 $ 338,658 $ 346,994
Circuit City 731,048 731,048 731,048 731,048 731,048
David's Bridal 212,290 212,290 212,290 212,290 212,290
Michael's Arts and Crafts 206,004 206,004 206,004 206,004 216,300
Babies "R" Us 362,508 362,508 362,508 362,508 371,444
Homeplace 640,500 640,500 640,500 640,500 671,948
Barnes & Noble 392,619 392,619 392,619 392,619 415,967
Designer Shoe Warehouse 214,309 214,309 214,309 214,309 224,946
Party America 163,026 163,026 166,045 169,064 171,600
Golfsmith 306,060 306,060 306,060 306,060 326,464
Sterling Jewelers 240,000 240,000 240,000 240,000 240,000
Ruby Tuesday's 75,000 75,000 75,000 75,000 75,000
Pizzeria Uno 80,000 80,000 80,000 80,000 87,000
Hollywood Video 183,563 183,563 183,563 183,563 183,563
First Bank 65,000 65,000 65,000 65,000 70,146
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$ 4,210,585 $ 4,210,585 $ 4,213,604 $ 4,216,623 $ 4,344,711
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</TABLE>
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EXCEL REALTY TRUST, INC., AND WESTMINSTER CITY CENTER
MARKETPLACE, R.L.L.L.P. AND BRIGHT-MEYERS WINCHESTER
ASSOCIATES, L.P.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED
BY EXCEL REALTY TRUST, INC.
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NOTE 2. MINIMUM FUTURE RENTALS (Continued)
MERCHANTS CENTRAL SHOPPING CENTER
Minimum Lease Payments
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<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
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<S> <C> <C> <C> <C> <C>
Wal-Mart $ 695,405 $ 695,405 $ 695,405 $ 695,405 $ 695,405
Peebles, Inc. 107,520 107,520 107,520 107,520 107,520
On Cue, Inc. 36,000 36,000 36,000 36,000 3,000
Cato 44,400 44,400 44,400 44,400 3,700
Dollar Tree Stores, Inc. 32,000 32,000 32,000 5,334 --
The Shoe Show of Rocky
Mount, Inc. 28,000 28,000 28,000 28,000 2,333
Frances Diane Cruise 30,800 30,800 25,667 -- --
Thorn Americas, Inc. 8,012 24,035 24,035 24,035 24,035
Rafael's Italian Restaurant 22,000 22,000 22,000 22,000 22,000
Finance & Mortgage
Acceptance Corp. 7,333 17,600 17,600 17,600 --
Freidman's Jewelers 16,000 16,000 5,333 -- --
Sally Beauty Company, Inc. 17,600 17,600 17,600 17,600 7,333
Third Blimpie Tennessee Venture 1,222 14,667 14,667 14,667 14,667
Mega Video, Inc. 2,689 32,267 32,267 32,267 32,267
General Nutrition Corporation 15,400 15,400 15,400 15,400 6,417
Axon Computers 13,476 13,476 562 -- --
The Cake Shop 5,775 11,550 11,550 5,775 --
Tam Nguyen and V.T. Nguyen 11,550 11,550 11,550 11,550 963
Fabulous Fred's Inc. 11,550 11,550 3,850 -- --
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$ 1,106,732 $ 1,181,820 $ 1,145,405 $ 1,077,553 $ 919,639
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</TABLE>
The schedule of future minimum rentals is based on the actual
noncancelable lease terms in effect as of December 31, 1996. Many of
the tenant leases contain terms for renewal options, percentage rents
and overage rents, and adjustments based on changes in the consumer
price index. These renewal options, percentage rents and overage rents,
and adjustments based on changes in the consumer price index have not
been reflected in the above noncancelable lease schedule.
All percentage rents and overage rents are contingent based on the
tenant achieving certain levels of sales. Not all of the leases have a
provision for percentage rents.
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EXHIBIT 99.02
EXCEL REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 1996 and
the Nine Months Ended September 30, 1997
(Dollars in thousands, except share and per share information)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income has been presented as if the pending acquisitions had occurred on January
1, 1996. The unaudited Pro Forma Condensed Consolidated Statements of Income
should be read in conjunction with the consolidated financial statements of the
Company filed on Form 10-K and Form 10-Q for the year ended December 31, 1996
and the period ended September 30, 1997 respectively, and the Historical Summary
of Operating Revenues and Direct Operating Expenses for Selected Properties to
be Acquired by Excel Realty Trust, Inc. included elsewhere herein. In
management's opinion, all adjustments necessary to reflect this transaction have
been made. The unaudited Pro Forma Condensed Consolidated Statements of Income
are not necessarily indicative of what actual results of operations of the
Company would have been had these transactions actually occurred as of January
1, 1996, does not include other transactions occurring after the periods
presented, nor do they purport to represent the results of operations of the
Company for future periods.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
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(A)
Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
----------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue: 63,135 3,171 66,306 71,025 4,247 75,272
Direct Operating Expenses (10,625) (579) (11,204) (12,389) (737) (13,126)
and General and Administrative Expenses
Depreciation and amortization: (7,487) (582) (8,069) (7,921) (670) (8,591)
Interest Expense (B): (19,450) (2,507) (21,957) (15,712) (2,888) (18,600)
Real Estate Sales and Other Expenses (1,777) 0 (1,777) (856) 0 (856)
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Net Operating Income: 23,796 (497) 23,299 34,147 (48) 34,099
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Net income per share 1.62 1.58 1.41 1.41
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Weighted Average Shares Outstanding 14,538,999 14,538,999 19,959,620 19,959,620
</TABLE>
(A) Pro Forma reflects operations for partial year as construction was
completed and operations commenced during the year. See Exhibit 99.01 for
additional information.
(B) Pro Forma reflects borrowings of $55,000 from the Company's line of credit
at an average interest rate of 7.0%
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EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 1997
(Dollars in Thousands)
(Unaudited)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the property acquisitions by the Company had occurred on
September 30, 1997. The unaudited Pro Forma Condensed Consolidated Balance Sheet
should be read in conjunction with the consolidated financial statements of the
Company included in the Quarterly Reports on Form 10-Q for the fiscal quarter
ended September 30, 1997. In management's opinion, all pro forma adjustments
have been made that are necessary to reflect these transactions. The unaudited
Pro Forma Condensed Balance Sheet is not necessarily indicative of what the
actual financial position would have been at September 30, 1997, does not
include other transactions occurring after September 30, 1997, nor does it
purport to present the future financial position of the Company.
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<CAPTION>
HISTORICAL PRO FORMA COMPANY
ASSETS COMPANY ADJUSTMENTS PROFORMA
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<S> <C> <C> <C>
Real estate, net ................................ $ 722,177 $ 55,000 $ 777,177
Other assets .................................... 123,498 -- 123,498
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Total assets .............................. $ 845,675 $ 55,000 $ 900,675
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable ................ $ 303,419 $ 55,000 $ 358,419
Other liabilities .......................... 10,503 -- 10,503
----------- ----------- -----------
Total liabilities ...................... 313,922 55,000 368,922
Minority interest ............................... 33,047 -- 33,047
Stockholders' equity ............................ 498,706 -- 498,706
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Total liabilities and stockholders' equity . $ 845,675 $ 55,000 $ 900,675
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</TABLE>
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