<PAGE> 1
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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): October 3, 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 Number) (I.R.S. Employer
of Incorporation) 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)
<PAGE> 2
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.
The Company anticipates the acquisition of five shopping centers in exchange for
cash and two single tenant properties owned by the Company. Excel Realty
Partners, L.P. ("ERP"), a Delaware limited partnership of which the Company is
the sole general partner, anticipates the acquisition of an additional shopping
center. These transactions are expected to be consummated in October 1997.
The properties to be acquired by the Company are Bardin Place Shopping Center,
Miami Gardens, Island Plaza, Freedom Square, and Market Street Square. The
total purchase price of these properties is expected to be approximately
$81.1 million.
Bardin Place is currently owned by Kmart Corporation and Arlington Texas Joint
Venture. Bardin Place is located in Arlington, Texas and has 399,909 square feet
of gross leasable area ("GLA"). The shopping center is anchored by the tenants
Kmart, Ross Dress for Less, Venture Stores, and Oshman's Sporting Goods. Miami
Gardens is owned by Red Road Joint Venture, is located in Miami, Florida and has
244,719 square feet of GLA. Its major tenants are Kmart, Ross Dress for Less,
Party City, and Winn-Dixie. Island Plaza is owned by Red Road Joint Venture and
James Island Joint Venture. It is located in Charleston, South Carolina, has
167,101 square feet of GLA, and is anchored by Kmart, Food Lion, and Revco.
Freedom Square's current owners are Red Road Joint Venture and Naples Joint
Venture. It is located in Naples, Florida and has 211,839 square feet of GLA,
with Kmart and Publix as its major tenants. Market Street Square, owned by
Kmart, is located in Elizabethtown, Pennsylvania, has 169,481 square feet of
GLA and is anchored by Kmart and Weis Market.
In conjunction with the above acquisitions, the Company anticipates the exchange
of two single tenant properties leased by Kmart. The properties are located in
Springfield, Missouri and Waverly, Ohio. The anticipated sales proceeds for the
Springfield property, which has 106,747 square feet of GLA and annualized base
rents of approximately $400,000, total $3.8 million. The anticipated sales
proceeds for the Waverly store, which has 40,318 square feet of GLA and
annualized base rents of $141,000, total $1.4 million. The remainder of the
purchase price for the above acquisitions will be obtained from either the
Company's line of credit or the public offering of debt securities of the
Company.
ERP anticipates that a shopping center located in San Dimas, California will be
contributed to ERP in consideration for the issuance of ERP limited partnership
units ("Units") and ERP's assumption of existing indebtedness. The property has
a consideration value of approximately $18.4 million and is encumbered by $8.1
million in publicly traded certificates of participation carrying a variable
interest rate which is determined weekly based upon the rates of similar
instruments. The balance of the value will be paid by the issuance of Units
valued at $31.00 per Unit. The property has 119,157 square feet of GLA.
In connection with the above acquisitions, the Company and ERP also will incur
certain transaction costs that will be capitalized into the values of the
shopping centers. These costs are not reflected in the above acquisition prices.
2
<PAGE> 3
In assessing the acquisition of each of the shopping centers, the Company and
ERP 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, and the competition in each shopping center's
respective area. The Company and ERP 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. While the Company anticipates the acquisition of the
above shopping centers, it provides no assurance that the transactions will
actually occur, or that the acquisitions will occur upon the terms described
above.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Excel Realty Trust, Inc., and James Island Joint Venture, Red
Road Joint Venture, Naples Joint Venture, Kmart Corporation,
and Arlington Texas Joint Venture Properties to be Acquired by
Excel Realty Trust, Inc.
(1) Report of Squire and Company, PC.
(2) Financial Statements of Property Acquired
(b) Excel Realty Partners, L.P., and St. Francis Associates
Property to be Acquired by Excel Realty Partners, L.P.
(1) Report of Squire and Company, PC.
(2) Financial Statements of Property Acquired
(c) Pro Forma Financial Information
(d) Exhibits
23.01 Consent of Squire and Company, PC.
99.01 Historical Summaries of Operating Revenues and Direct
Operating Expenses for the properties acquired by
Excel Realty Trust, Inc. and Excel Realty Partners,
L.P. 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 June 30, 1997 and for year ended December
31, 1996.
3
<PAGE> 4
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: October 2, 1997 EXCEL REALTY TRUST, INC.
By: /s/ David A. Lund
--------------------------------
David A. Lund
Principal Financial Officer
4
<PAGE> 5
EXHIBIT INDEX
Exhibit No.
- -----------
23.01 Consent of Squire and Company, PC.
99.01 Historical Summaries of Operating Revenues and Direct
Operating Expenses for the properties acquired by
Excel Realty Trust, Inc. and Excel Realty Partners,
L.P. 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 June 30, 1997 and for year ended December
31, 1996.
5
<PAGE> 1
EXHIBIT 23.01
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 September 24, 1997 on the Historical Summaries of Operating
Revenues and Direct Operating Expenses of the properties acquired by Excel
Realty Trust, Inc. and Excel Realty Partners, L.P. for the year ended December
31, 1996.
/s/ SQUIRE & CO.
Squire & Company, PC
Poway, California
October 2, 1997
<PAGE> 1
EXHIBIT 99.01
Excel Realty Trust, Inc., and
Red Road Joint Venture, James Island Joint Venture,
Naples Joint Venture, K-Mart Corporation,
and Arlington Texas Joint Venture
Properties To Be 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
<PAGE> 2
[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 Red Road Joint Venture, James Island Joint Venture,
Naples Joint Venture, K-Mart Corporation, and Arlington Texas Joint Venture. 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 to be 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
September 24, 1997
<PAGE> 3
EXCEL REALTY TRUST, INC., RED ROAD JOINT VENTURE,
JAMES ISLAND JOINT VENTURE AND NAPLES JOINT VENTURE, K-MART CORPORATION,
AND ARLINGTON TEXAS JOINT VENTURE
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED
BY EXCEL REALTY TRUST, INC. AND EXCEL REALTY PARTNERS L.P.
Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
06/30/97 Year Ended
(Unaudited) 12/31/96
----------- ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $ 4,124,877 $7,416,967
Expense reimbursements 927,581 1,621,304
Percentage rents 1,002 --
Other income 731 2,145
----------- ----------
Total operating revenues 5,054,191 9,040,416
DIRECT OPERATING EXPENSES:
Administrative and office expense 165,285 227,835
Management fees 163,864 255,393
Repairs and maintenance 221,187 491,340
Utilities 85,765 155,674
Insurance 97,986 91,256
Property taxes 763,241 1,295,036
Advertising and promotion 603 407
Bad debt expense -- 249,234
----------- ----------
Total direct operating expenses 1,497,931 2,766,175
----------- ----------
Net operating income $ 3,556,260 $6,274,241
=========== ==========
</TABLE>
The accompanying notes are an integral part of this summary.
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EXCEL REALTY TRUST, INC., AND RED ROAD JOINT VENTURE, JAMES ISLAND
JOINT VENTURE, NAPLES JOINT VENTURE, K-MART CORPORATION, AND
ARLINGTON TEXAS JOINT VENTURE
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
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 to be acquired are operated as shopping centers in the
locations below with the anchor stores listed.
<TABLE>
<CAPTION>
Property Location Anchor Stores
-------- -------- -------------
<S> <C> <C>
Island Plaza1 Charleston, SC K-Mart, Food Lion, Revco Discount Drug
Miami Gardens2 Miami, FL K-Mart, Ross Stores, Winn-Dixie Store
Freedom Square3 Naples, FL K-Mart, Publix Supermarket
Market Street Square4 Elizabethtown, PA K-Mart, Weis Market
Bardin Place Shopping Arlington, TX K-Mart, Ross Dress For Less, Venture
Center5 Stores, Oshman's Sporting Goods
</TABLE>
The above numbered properties were owned and managed by the following
entities numbered below:
1. Red Road Joint Venture and James Island Joint Venture
2. Red Road Joint Venture
3. Red Road Joint Venture and Naples Joint Venture
4. K-Mart Corp.
5. K-Mart Corp. and Arlington Texas Joint Venture
Retail space is rented to tenants under noncancelable leases ranging
from three to twenty years, with renewal options available.
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<PAGE> 5
EXCEL REALTY TRUST, INC., AND RED ROAD JOINT VENTURE, JAMES ISLAND
JOINT VENTURE, NAPLES JOINT VENTURE, K-MART CORPORATION, AND
ARLINGTON TEXAS JOINT VENTURE
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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:
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EXCEL REALTY TRUST, INC., AND JAMES ISLAND JOINT VENTURE,
RED ROAD JOINT VENTURE, NAPLES JOINT VENTURE, K-MART
CORPORATION, AND ARLINGTON TEXAS JOINT VENTURE
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
ISLAND PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
One Price Clothing Stores, Inc. $ 28,500 $ 28,500 $ 28,500 $ 16,625 $ --
K-Mart 568,986 568,986 568,986 568,986 568,986
Dollar Tree Stores, Inc. 38,000 38,000 12,667 -- --
Food Lion, Inc. 210,250 210,250 210,250 210,250 210,250
Revco Discount Drug 71,825 71,825 71,825 71,825 71,825
Forsberg Package Shop, Inc. 16,800 16,800 -- -- --
National Home Video 32,000 -- -- -- --
Creative Hair Dressers, Inc. 14,600 15,600 13,000 -- --
Great Wall Chinese Restaurant 15,600 16,800 16,800 -- --
Postnet 13,200 13,356 13,828 14,312 9,760
Aloha Paradise 14,400 13,200 -- -- --
General Nutrition Corp. 17,400 17,960 18,240 6,080 --
Dairy Queen Treats 15,860 16,572 17,080 7,117 --
---------- ---------- ---------- ---------- ----------
$1,057,421 $1,027,849 $ 971,176 $ 895,195 $ 860,821
========== ========== ========== ========== ==========
</TABLE>
MIAMI GARDENS
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
K-Mart $ 977,246 $ 977,246 $ 977,246 $ 977,246 $ 977,246
Ross Stores, Inc. 243,144 243,144 243,144 243,144 243,144
Party City Corp. 135,000 135,000 135,000 135,000 142,350
Dollar Tree Stores, Inc. 42,000 42,000 42,000 21,000 --
Unicorn Cleaners 37,000 37,000 37,500 39,000 39,500
Winn-Dixie Stores, Inc. 569,277 569,277 569,277 569,277 569,277
Dots, Inc. 32,063 42,750 42,750 42,750 42,750
Action Rent To Own 17,417 56,230 57,900 59,640 61,430
Sally Beauty Company 17,063 29,250 29,250 29,250 29,250
Family Dental Group of Miami 11,813 23,625 23,625 24,300 24,975
Associates Financial 23,063 40,500 40,500 41,625 42,750
---------- ---------- ---------- ---------- ----------
$2,105,086 $2,196,022 $2,198,192 $2,182,232 $2,172,672
========== ========== ========== ========== ==========
</TABLE>
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<PAGE> 7
EXCEL REALTY TRUST, INC., AND JAMES ISLAND JOINT VENTURE,
RED ROAD JOINT VENTURE, NAPLES JOINT VENTURE, K-MART
CORPORATION, AND ARLINGTON TEXAS JOINT VENTURE
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
FREEDOM SQUARE
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
K-Mart $ 805,216 $ 805,216 $ 805,216 $ 805,216 $ 805,216
Publix Supermarkets, Inc. 448,616 448,616 448,616 448,616 448,616
General Nutrition Corp. 21,000 21,000 21,000 14,000 --
Travel Creations 16,000 16,000 16,000 10,667 --
Supercuts, Inc. 19,200 19,200 19,200 3,200 --
Dollar Tree 39,000 13,000 -- -- --
Pak Mail 19,200 19,200 19,200 9,600 --
---------- ---------- ---------- ---------- ----------
$1,368,232 $1,342,232 $1,329,232 $1,291,299 $1,253,832
========== ========== ========== ========== ==========
</TABLE>
MARKET STREET SQUARE
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
A-Z Video $ 62,654 $ 63,882 $ 15,971 $ -- $ --
Holiday Hair Fashions, Inc. 17,805 18,360 4,620 -- --
Weis Market 371,250 371,250 371,250 371,250 371,250
Matthews Incorporated 33,606 34,122 34,122 36,707 37,224
Thrift Drugs 85,800 85,800 88,725 89,700 89,700
Fulton Financial Realty 45,000 45,000 45,000 45,000 45,000
Tandy Corporation 23,040 23,040 23,040 26,880 26,880
-------- -------- -------- -------- --------
$639,155 $641,454 $582,728 $569,537 $570,054
======== ======== ======== ======== ========
</TABLE>
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<PAGE> 8
EXCEL REALTY TRUST, INC., AND JAMES ISLAND JOINT VENTURE,
RED ROAD JOINT VENTURE, NAPLES JOINT VENTURE, K-MART
CORPORATION, AND ARLINGTON TEXAS JOINT VENTURE
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
BARDIN PLACE SHOPPING CENTER
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
The Oak Mill $ 175,113 $ 175,113 $ 178,954 $ 184,330 $ 107,526
Applebee's 79,560 87,360 87,360 87,360 87,360
Bridal Warehouse 71,376 29,740 -- -- --
Burger Street 36,000 36,000 36,000 36,000 36,000
Arlington Dental Association 69,458 69,458 69,458 -- --
Leslie's Pool 50,475 8,413 -- -- --
Main Street Travel 19,800 18,150 -- -- --
Mattress Giant 72,756 -- -- -- --
Old Country Buffet 75,000 75,000 75,000 75,000 75,000
K-Mart 873,638 873,638 873,638 873,638 873,638
Petrie Stores 84,000 84,000 84,000 7,000 --
Ross Dress for Less 210,000 210,000 210,000 210,000 210,000
Simply Better Computers 60,000 -- -- -- --
Subway 15,300 15,300 15,300 15,300 15,300
Edco Cleaners 20,265 21,600 21,600 -- --
Venture Stores 316,000 316,000 316,000 316,000 316,000
Quickset Jewelers 22,350 22,350 22,350 13,038 --
Oshman's Sporting Goods 425,880 425,880 425,880 425,880 425,880
ULTA-3 99,480 91,190 -- -- --
Payless Shoe Source 37,708 37,708 37,708 37,708 37,708
Shoe Fair 37,076 33,986 -- -- --
Fast Signs 23,760 23,760 7,920 -- --
---------- ---------- ---------- ---------- ----------
$2,874,995 $2,654,646 $2,461,168 $2,281,254 $2,184,412
========== ========== ========== ========== ==========
</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.
-7-
<PAGE> 9
Excel Realty Partners, LP and St. Francis Associates, LP
Properties To Be Acquired by
Excel Realty Partners, LP
Historical Summaries of Operating Revenues
and Direct Operating Expenses
in Accordance with Rule 3-14 of
the Securities and Exchange Commission
Year Ended December 31, 1996
<PAGE> 10
[SQUIRE & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Excel Realty Partners, LP
We have audited the accompanying Historical Summaries of Operating Revenues and
Direct Operating Expenses of selected properties acquired by Excel Realty
Partners, LP for the year ended December 31, 1996. These summaries are the
responsibility of Excel Realty Partners, LP, and St. Francis Associates, LP. Our
responsibility is to express an opinion on these summaries 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 summaries are free of material misstatements. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the summaries. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the summaries. We believe that our audit
of the summaries provide a reasonable basis for our opinion.
As described in Note 1, the accompanying summaries were 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 summaries referred to above present fairly, in all material
respects, the operating revenues and direct operating expenses of selected
properties acquired by Excel Realty Partners, LP 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 Partners, LP and for filing with the
Securities and Exchange Commission and should not be used for any other purpose.
Squire & Company, PC
Poway, California
September 24, 1997
<PAGE> 11
EXCEL REALTY PARTNERS, LP, ST. FRANCIS ASSOCIATES, LP
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED
BY EXCEL REALTY PARTNERS, LP
Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
SAN DIMAS PLAZA 06/30/97 Year Ended
(Unaudited) 12/31/96
----------- ----------
<S> <C> <C>
Operating Revenues:
Base rents $ 776,887 $1,582,224
Percentage rents 36,068 2,298
Expense reimbursements 231,205 472,181
Other income 27 59,576
----------- ----------
Total operating revenues 1,044,187 2,116,279
Direct Operating Expenses:
Administrative and office expense 50,103 100,321
Repairs and maintenance 29,889 57,693
Utilities 41,877 83,041
Contracted services 38,812 75,468
Insurance 19,232 42,204
Property taxes 98,369 201,192
----------- ----------
Total direct operating expenses 278,282 559,919
----------- ----------
Net operating income $ 765,905 $1,556,360
=========== ==========
</TABLE>
The accompanying notes are an integral part of this summary.
-2-
<PAGE> 12
EXCEL REALTY PARTNERS, LP, AND ST. FRANCIS ASSOCIATES, LP
NOTES TO HISTORICAL SUMMARIES OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY PARTNERS, LP
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed
in the preparation of these Historical Summaries. The Historical
Summaries and notes are representations of Excel Realty Partners, LP
and St. Francis Associates, LP, whose management are responsible for
the integrity and objectivity of these Historical Summaries.
Business Activity - Excel Realty Partners, LP 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 San Dimas,
California with the following anchor stores: T.J. Maxx, IHOP, Party
Plaza, and Blockbuster Video.
St. Francis Associates, LP has owned and managed the properties. Retail
space is rented to tenants under noncancelable leases ranging from
three to twenty years, with renewal options available.
Form of Presentation - The Historical Summaries are 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.
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 Summaries 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
Summaries as expense reimbursements.
Accounting Estimates - The preparation of the Historical Summaries
includes estimates and assumptions that affect the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
-3-
<PAGE> 13
EXCEL REALTY PARTNERS, LP, AND ST. FRANCIS ASSOCIATES, LP
NOTES TO HISTORICAL SUMMARIES OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY PARTNERS, LP
- --------------------------------------------------------------------------------
Note 2. Minimum Future Rentals
St. Francis Associates, LP leases retail space 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:
San Dimas Plaza
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31, 1997 1998 1999 2000 2001
- ------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
T.J. Maxx $ 201,600 $ 84,000 $ -- $ -- $ --
Royal Panda Express 44,878 34,905 -- -- --
IHOP 118,800 118,800 118,800 118,800 138,600
Subway Sandwich 29,106 30,238 31,473 32,708 33,942
TSR Paging, Inc. 12,185 12,672 6,439 -- --
Cabo Taco 32,468 33,704 34,989 -- --
Pizza Hut 31,712 27,360 -- -- --
Fast Frame 22,250 23,500 24,250 16,500 --
3 Day Blinds 21,000 21,000 -- -- --
Donut Club 17,040 17,760 18,480 19,200 13,120
Koala-T-Water 12,810 13,322 13,855 14,410 8,598
David S. En & Tracy En 12,600 17,304 17,996 4,543 --
Children's Orchard 22,500 23,025 23,946 24,904 10,546
Party Plaza 122,798 133,938 133,938 66,969 --
Lingerie For Less 39,720 39,720 39,720 39,720 6,620
Jenny Craig 47,293 23,646 -- -- --
Crown Books 3,500 -- -- -- --
AIM Mail Center 25,920 25,920 25,920 8,640 --
GNC 33,580 16,790 -- -- --
Sally Beauty 27,788 27,788 1,158 -- --
Fashion Bug 64,000 64,000 64,000 64,000 5,333
Tandy Corporation 32,760 32,760 32,760 32,865 34,020
WellPet 17,370 -- -- -- --
Styles For Less 48,600 48,600 16,200 -- --
Fantastic Sam's 27,082 27,082 27,082 22,568 --
Vision One Optometric 27,000 27,000 27,000 27,000 11,250
D & S Bugelli 41,832 21,420 -- -- --
TCBY Treats 27,520 28,652 29,775 30,966 5,194
Village Handmaiden 15,552 -- -- -- --
Payless Shoe Source 49,672 48,720 49,980 51,744 51,744
Blockbuster Video 100,036 100,036 106,210 114,856 77,000
U.S. Photo 22,320 22,320 22,320 22,320 22,320
Top Cleaner 34,992 36,720 28,512 -- --
Nicolas Perez 15,618 16,243 16,893 -- --
T&T Nail Care 21,687 13,012 -- -- --
Household Finance Co. 40,560 42,588 10,920 -- --
O'Malley Flowers 18,949 16,899 17,575 2,948 --
Hit Or Miss 60,000 60,000 60,000 20,000 --
---------- ---------- ---------- ---------- ----------
$1,545,098 $1,331,444 $1,000,191 $ 735,659 $ 408,287
========== ========== ========== ========== ==========
</TABLE>
-4-
<PAGE> 14
EXCEL REALTY PARTNERS, LP, AND ST. FRANCIS ASSOCIATES, LP
NOTES TO HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES TO BE ACQUIRED BY
EXCEL REALTY PARTNERS, LP
- --------------------------------------------------------------------------------
Note 2. Minimum Future Rentals (Continued)
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.
-5-
<PAGE> 1
EXHIBIT 99.02
EXCEL REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1996 AND THE SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income has been presented as if the acquisition and disposition of pending
properties 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 June 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 this
transaction 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 Company for future periods.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, 1996 JUNE 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 10,616 73,751 43,665 5,827 49,492
Direct Operating Expenses (10,625) (3,326) (13,951) (7,864) (1,776) (8,640)
and General and Administrative
Expenses
Depreciation and amortization; (7,487) (1,532) (9,019) (4,758) (766) (5,524)
Interest Expense(A): (19,450) (5,678) (25,128) (9,835) (2,839) (12,674)
Real Estate Sales and Impairment (1,777) - (1,777) 293 0 293
------------------------------------------------------------------------------
Net Operating Income: 23,796 80 24,325 21,501 446 21,947
==============================================================================
Net Income per share 1.62 1.59 0.93 0.93
========== ========== ========== ==========
Weighted Average Shares 14,538,999 14,872,805 18,823,936 19,157,742
Outstanding(B)
</TABLE>
(A) Pro Forma reflects additional mortgage debt of $8,100 and borrowings of
$75,900 from the Company's line of credit at an average interest rate
of 7.0%
(B) Represents additional limited partnership units issued in Excel Realty
Partners, L.P.
<PAGE> 2
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the Acquisition and Disposition of Pending Properties had
occurred on June 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 June 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 June 30, 1997, does not
include other transactions occurring after June 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...................................... $664,540 $94,300 $758,840
Other assets.......................................... 94,747 -- 94,747
-------- ------- --------
Total assets........................................ $759,287 $94,300 $853,587
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable......................... $286,388 $84,000 $370,388
Other liabilities................................... 9,642 -- 9,642
-------- ------- --------
Total liabilities................................. 296,030 84,000 380,030
Minority interest..................................... 32,884 10,300 43,184
Stockholders' equity.................................. 430,373 -- 430,373
-------- ------- --------
Total liabilities and stockholders' equity........ $759,287 $94,300 $853,587
======== ======= ========
</TABLE>
