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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 2, 1997
EXCEL REALTY TRUST, INC.
(Exact Name Of Registrant As Specified In Its Charter)
MARYLAND 1-12244 33-0160389
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
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.
On December 2, 1997, the Company acquired a shopping mall located in Clearwater,
Florida in exchange for cash. The total purchase price of this property was
approximately $20 million. The property has approximately 685,000 square feet of
gross leasable area and is anchored by Dillards, Gayfers, and Montgomery Wards.
In connection with the above acquisition, the Company also incurred certain
transaction costs that will be capitalized into the value of the shopping center
and are not reflected in the above acquisition price.
In assessing the acquisition of the shopping center, the Company considered,
among other factors, the location and occupancy rate of the shopping center,
the quality of tenants (including the tenants' credit quality), comparative
rents, the competition in the shopping center's area, and redevelopment
potential of the property. The Company also assessed potential expenses
associated with owning or leasing, and operating the shopping center, 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 Holland Westshore, Inc.
(1) Report of Squire and Company, PC.
(2) Financial Statements of the Property 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 Property 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 17, 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.
- -----------
23.01 Consent of Squire & Company, PC.
99.01 Historical Summary of Operating Revenues and Direct Operating
Expenses for the Property 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 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion in the Report of Form 8-K under the Securities
Exchange Act of 1934 of Excel Realty Trust, Inc. of the report of Squire &
Company, PC dated December 11, 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 & CO.
Squire & Company, PC
Poway, California
December 16, 1997
<PAGE> 1
EXHIBIT 99.01
Excel Realty Trust, Inc., and Holland Westshore, Inc.
Property 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]
A Professional Corporation
Certified Public Accountants
JOE D. SQUIRE, CPA 1329 SOUTH 800 EAST
CRAIG D. WILKINS, CPA OREM, UTAH 84058-7737
RON K. KING, CPA
K. TIM LARSEN, CPA
TIMOTHY A. CHRISTENSEN, CPA
RAY B. BARTHOLOMEW, CPA
KENT B. DARRINGTON, CPA 14458 CRESTWOOD AVE
SHANE D. WOOD, CPA POWAY, CALIFORNIA 92064
CHARLOTTE CLARK, CPA
D. DREW BIGLER, CPA
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 property acquired by Excel Realty Trust, Inc. for
the year ended December 31, 1996. This summary is the responsibility of Excel
Realty Trust, Inc. and Holland Westshore, Inc. 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 property's
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 the property
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.
Squire & Company, PC
Poway, California
December 11, 1997
[LOGO] Member Division for CPA Firms
<PAGE> 3
EXCEL REALTY TRUST, INC., AND HOLLAND WESTSHORE, INC.
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE PROPERTY ACQUIRED
BY EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
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<TABLE>
<CAPTION>
Nine Months
Ended
CLEARWATER MALL 9/30/97 Year Ended
(Unaudited) 12/31/96
---------- ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $3,080,412 $4,360,509
Expense reimbursements and other income 2,465,518 3,787,790
Percentage rents 39,134 110,291
---------- ----------
Total operating revenues 5,585,064 8,258,590
DIRECT OPERATING EXPENSES:
Administrative and office expense 421,715 658,850
Management fees 152,522 195,093
Repairs and maintenance 667,706 835,672
Utilities 200,673 206,261
Insurance 141,297 200,181
Property taxes 929,498 1,220,386
Advertising and promotion 18,747 27,493
Bad debt expense 103,772 21,935
---------- ----------
Total direct operating expenses 2,635,930 3,365,871
---------- ----------
Net operating income $2,949,134 $4,892,719
========== ==========
</TABLE>
The accompanying notes are an integral part of this summary.
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EXCEL REALTY TRUST, INC., AND HOLLAND WESTSHORE, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE PROPERTY 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. and Holland
Westshore, 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 acquired property is operated as a shopping center in the location
below with the anchor stores listed.
<TABLE>
<CAPTION>
Property Location Anchor Stores
--------------- -------------- --------------------------------------------
<S> <C> <C>
Clearwater Mall Clearwater, FL Gayfers, Montgomery Ward, Dillards, Burdinas
</TABLE>
Holland Westshore, Inc. has owned and managed the property. Retail
space is rented to tenants under noncancelable leases ranging from
three to twenty years, with renewal options available.
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 property are not included in the
summary, i.e., depreciation and interest.
Management has determined that after reasonable inquiry, it is not
aware of any material factors relating to the property reported on in
the accompanying Historical Summary which would cause the reported
financial information not to be indicative of future operating
results.
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.
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EXCEL REALTY TRUST, INC., AND HOLLAND WESTSHORE, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE PROPERTY ACQUIRED
BY EXCEL REALTY TRUST, INC.
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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:
CLEARWATER MALL
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Pretzel Twister $ 18,116 $ 18,116 $ 18,116 $ 18,116 $ 18,116
Gayfers 212,347 212,347 17,696 - -
Mole Hole 25,938 25,938 25,938 23,580 -
Mail Boxes, Etc 9,600 9,600 9,600 7,200 -
Trade Secret 22,000 22,000 22,000 22,000 22,000
CPI Photo Finish 30,080 15,040 - - -
Gesner Fine Art& Estate Jewelry 64,000 16,000 - - -
Smoke & Snuff 27,800 27,800 27,800 25,483 -
Write Occasions 41,160 41,160 41,160 - -
Mannequins 30,000 30,000 30,000 30,000 30,000
Claire's Boutique 25,000 25,000 16,667 - -
Sunglass Hut 29,600 30,000 30,000 30,000 30,000
Jarman Shoes 42,000 42,000 10,500 - -
Mom's Cinnamon Rolls 31,500 31,500 31,650 32,400 32,400
Ritz Camera 30,648 30,648 30,648 30,648 15,324
Paul Harris 70,000 73,333 80,000 80,000 80,000
Hair Plus 31,500 36,500 37,500 37,500 6,250
Freshens Yogurt 27,225 9,075 - - -
Great American Cookie Company 31,313 35,000 35,000 35,000 35,000
One Dollar Depot 31,878 31,878 15,939 - -
Regis Hairstylists 18,170 35,550 35,550 35,550 35,550
San Francisco Music Box 38,000 38,000 3,167 - -
Mango Bay 54,000 54,000 54,400 57,600 57,600
Card America 44,000 47,667 48,000 48,000 12,000
Kay-Bee Toys & Hobby Shop 39,559 39,559 39,559 39,559 39,559
Athletic Attic 50,436 50,866 50,866 50,866 50,866
Lerner Shops 193,500 193,500 193,500 193,500 16,125
Walden Books 82,688 84,000 84,000 84,000 84,000
Blockbuster Music 70,383 71,600 71,600 11,933 -
Montgomery Ward 310,540 207,027 - - -
Pocket Change 42,000 42,000 42,000 42,000 42,000
Radio Shack 36,000 36,000 18,000 - -
Eldridge Fine Jewelry 80,000 80,000 26,667 - -
Bresler's Ice Cream & Yogurt 26,850 26,850 26,850 13,425 -
</TABLE>
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EXCEL REALTY TRUST, INC., AND HOLLAND WESTSHORE, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE PROPERTY ACQUIRED
BY EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
CLEARWATER MALL
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Rye Field Deli $ 32,000 $ 32,000 $ 32,000 $ 21,333 $ -
Sbarro Italian Eatery 40,000 40,000 40,000 40,000 40,000
Chuck-Fil-A 33,000 33,000 33,000 24,750 -
Big Easy Cajun 50,000 50,000 50,000 50,000 12,500
Manchu Wok 47,941 47,941 47,941 31,961 -
Sakkio Japan 32,667 34,000 34,000 34,000 34,667
Great Steak & Fry Company 40,000 41,973 42,960 42,960 42,960
Gloria Jean's Coffee Bean 39,474 39,474 43,299 44,064 44,064
Kinney Shoes 24,000 24,000 - - -
Gap 106,241 110,418 110,418 110,418 110,418
Dillards 301,927 301,927 25,161 - -
Thomas Douglas Jewelers 27,864 28,492 28,702 29,330 29,330
Worldwide Gold & Diamonds 13,500 32,400 18,900 - -
Footlocker 29,952 - - - -
Bond Jewelers 102,083 105,000 105,000 61,250 -
Candy Shoppe 33,750 35,000 26,250 - -
Victoria's Secret 84,000 85,500 85,500 14,250 -
Limited 52,533 13,133 - - -
World of Science 71,010 71,010 71,010 77,914 82,845
Bentley's Luggage 37,490 37,490 38,441 39,120 39,120
Body Shop 56,280 56,280 56,280 37,520 -
Bombay Company 52,500 52,500 43,750 - -
Things Engraved 39,380 39,380 39,380 39,380 22,972
Instant Replay 42,511 43,214 43,214 44,620 45,322
Naturalizer Shoes 36,750 36,750 36,750 21,438 -
General Nutrition Center 30,800 30,800 - - -
GTE Phone Mart 35,340 - - - -
Sacino's Formalwear 25,200 23,100 - - -
Candleman 37,120 39,053 39,440 32,867 -
Mastercuts Family Haircutters 4,759 28,556 28,556 28,556 28,556
Lee Nails 4,200 25,200 25,200 25,200 25,200
Afterthoughts Boutique 24,072 24,072 24,072 24,072 24,072
Cobbie Shop 28,336 30,053 30,912 30,912 10,304
Rave 37,600 37,600 3,133 - -
Champs Sports 82,500 82,500 82,500 41,250 -
Casual Corner 56,000 56,000 9,333 - -
Musicland 45,000 45,000 49,167 50,000 50,000
Express 116,100 117,450 117,450 117,450 124,200
</TABLE>
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EXCEL REALTY TRUST, INC., AND HOLLAND WESTSHORE, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE PROPERTY ACQUIRED
BY EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
CLEARWATER MALL
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Poston's Arts & Crafts $ 61,613 $ 61,613 $ 61,613 $ 61,613 $ 61,613
Pizza Planet 9,150 34,313 35,865 23,790 -
Drotos Kehoe & Williams, Inc. 9,000 7,500 - - -
Vanco Hearing 10,300 10,800 10,800 6,300 -
Clearwater 4 Theaters 59,108 - - - -
Don Olsen Firestone 25,200 25,200 25,200 25,200 25,200
Lens Crafters 75,167 - - - -
Bombay Bicycle Club 68,353 68,353 68,353 68,353 68,353
---------- ---------- ---------- ---------- ----------
$4,189,602 $3,907,599 $2,837,923 $2,248,231 $1,528,486
========== ========== ========== ========== ==========
</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 CONDENCED 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 occured 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 transation 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 this transation actually occurred as of January 1,
1996, does not include other transactions occuring 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
--------------------------------------------------------------------------------
Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue: 63,135 8,259 71,394 71,025 5,585 76,610
Direct Operating Expenses
and General and Administrative Expenses (10,625) (3,366) (13,991) (12,389) (2,636) (15,025)
Depreciation and amortization: (7,487) (325) (7,812) (7,921) (244) (8,165)
Interest Expense (A): (19,450) (1,400) (20,850) (15,712) (1,050) (16,762)
Real Estate Sales and Other Expenses (1777) 0 (1,777) (856) 0 (856)
--------------------------------------------------------------------------------
Net Operating Income: 23,796 3,168 26,964 34,147 1,655 35,802
================================================================================
Net income per share 1.62 1.83 1.41 1.50
================================================================================
Weighted Average Shares Outstanding 14,538,999 14,538,999 19,959,620 19,959,620
</TABLE>
(A) Pro Forma reflects borrowings of $20,000 from the Company's line of credit
at an average interest rate of 7.0%
1
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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 acquisition 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 this transaction. 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.
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA COMPANY
ASSETS COMPANY ADJUSTMENTS PROFORMA
---------- ----------- --------
<S> <C> <C> <C>
Real estate, net $722,177 $ 20,000 $742,177
Other assets 123,498 - 123,498
-------- -------- --------
Total assets $845,675 $ 20,000 $865,675
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable $303,419 $ 20,000 $323,419
Other liabilities 10,503 - 10,503
-------- -------- --------
Total liabilities 313,922 20,000 333,922
Minority interest 33,047 - 33,047
Stockholders' equity 498,706 - 498,706
-------- -------- --------
Total liabilities and stockholders' equity $845,675 $ 20,000 $865,675
======== ======== ========
</TABLE>
2
