<PAGE> 1
As filed with the Securities and Exchange Commission on January 17, 1997.
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 31, 1996
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 110
SAN DIEGO, CALIFORNIA 92127
(Address of Principal Executive Offices) (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 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 31, 1996, the Company acquired the Valley Fair Mall from
Valley Fair Mall, Inc., a subsidiary of Safeco Insurance Company, an
unaffiliated party. Valley Fair Mall is a shopping center with approximately
608,000 square feet of gross leasable area located in West Valley City, a suburb
of Salt Lake City, Utah. As part of the same transaction, the Company acquired
four acres of undeveloped land. The acquisition price was approximately $37.3
million, which was comprised of approximately $19.4 million cash and the
assumption of a 7.6% fixed rate mortgage of approximately $17.9 million. The
funds used to acquire Valley Fair Mall were obtained from the Company's line of
credit, which was previously paid down from the Company's public offering of
common stock which was consummated in December, 1996. In assessing the
acquisition of Valley Fair Mall, the Company considered, among other factors,
its location, occupancy rate, the quality of the tenants (including the tenants'
credit quality), comparative rents, and the competition in the Salt Lake City
rental market. The Company also assessed the sources of potential expenses
associated with owning and operating Valley Fair Mall, including, among other
factors, estimated maintenance expenses, capital improvements, expenses
associated with the possible redevelopment of the Valley Fair Mall and the
development of the four undeveloped acres referenced above and property
management and other operating expenses.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Consent of Squire and Company, PC.
(a) Financial Statements of Property Acquired.
Historical Summary of Operating Revenues and Direct Operating
Expenses for the selected property owned or to be acquired by Excel Realty
Trust, Inc. for the year ended December 31, 1995.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Condensed Consolidated Financial Statements of
Excel Realty Trust, Inc. as of September 30, 1996 and for year ended
December 31, 1995.
(c) Exhibits.
23.1 Consent of Squire and Company, PC
99.1 Historical Summary of Operating Revenues and Direct Operating
Expenses for the selected property owned or to be acquired by Excel Realty
Trust, Inc. for the year ended December 31, 1995.
99.2 Unaudited Pro Forma Condensed Consolidated Financial Statements of
Excel Realty Trust, Inc. as of September 30, 1996 and for year ended
December 31, 1995.
2
<PAGE> 3
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: January 17, 1997 EXCEL REALTY TRUST, INC.
By: /s/ GARY B. SABIN
---------------------------------
Gary B. Sabin
Chairman, President and
Chief Executive Officer
3
<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO. PAGE
- ----------- ----
23.1 Consent of Squire and Company PC........................ 5
99.1 Historical Summary of Operating Revenues and Direct
Operating Expenses for the selected property owned or
to be acquired by Excel Realty Trust, Inc. for the
year ended December 31, 1995............................ 6
99.2 Unaudited Pro Forma Condensed Consolidated Financial
Statements of Excel Realty Trust, Inc. as of
September 30, 1996 and for the year ended
December 31, 1995....................................... 12
4
<PAGE> 1
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 January 16, 1997 on the Historical Summary of Operating
Revenues and Direct Operating Expenses for the selected property owned or to be
acquired by Excel Realty Trust, Inc. for the year ended December 31, 1995.
Squire & Company, PC
Poway, California
January 16, 1997
<PAGE> 1
EXHIBIT 99.1
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 the selected property owned or to be acquired by
Excel Realty Trust, Inc. for the year ended December 31, 1995. This summary is
the responsibility of Excel Realty Trust, Inc., and Valley Fair Mall, 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 of 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 property
owned or to be acquired by Excel Realty Trust, Inc. for the year ended December
31, 1995, on the basis of the accounting principles 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
January 16, 1997
<PAGE> 2
EXCEL REALTY TRUST, INC., AND VALLEY FAIR MALL, INC.
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE SELECTED PROPERTY OWNED OR TO
BE ACQUIRED BY EXCEL REALTY TRUST, INC.
Year Ended December 31, 1995
- --------------------------------------------------------------------------------
Nine Months
Ended
9/30/96 Year Ended
(Unaudited) 12/31/95
----------- ----------
Operating Revenues:
Base rents $2,458,476 $3,488,650
Percentage rents 1,863 15,767
Storage rent 1,929 3,416
Overage rent 319,342 485,777
Expense reimbursements 1,428,337 2,007,215
Other income 20,615 36,572
---------- ----------
Total revenues 4,230,564 6,037,397
Direct Operating Expenses:
Bad debts 133,378 8,631
Property taxes 280,268 602,785
Repairs and maintenance 661,387 432,365
Utilities 76,294 101,902
Payroll and payroll burden 128,220 51,545
Security 225,287 324,521
Insurance 73,705 111,032
Dining services 65,116 93,811
Advertising 56,119 209,752
---------- ----------
Total direct operating
expenses 1,700,774 1,936,344
---------- ----------
Net operating
income $2,529,790 $4,101,053
<PAGE> 3
EXCEL REALTY TRUST, INC., AND VALLEY FAIR MALL, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE SELECTED PROPERTY OWNED OR 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. and Valley
Fair Mall, 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 property is located in Salt Lake City, Utah operated as an indoor
shopping mall with major department stores as anchors: JC Penney, ZCMI,
and Mervyns.
Valley Fair Mall, Inc. has owned and managed the property. Retail space
within the mall is rented to tenants under noncancelable leases ranging
from three to thirty years, with renewal options available and
month-to-month leases.
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 financial
statements, 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.
<PAGE> 4
EXCEL REALTY TRUST, INC., AND VALLEY FAIR MALL, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE SELECTED PROPERTY OWNED OR TO BE
ACQUIRED BY EXCEL REALTY TRUST, INC.
- -----------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS
Valley Fair Mall, Inc. 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 1995:
<TABLE>
<CAPTION>
Years Ending December 31, 1996 1997 1998 1999 2000
- ------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
JC Penney $211,437 $211,437 $211,437 $211,437 $123,338
Mervyn's 40,000 40,000 40,000 40,000 40,000
ZCMI 74,880 74,880 74,880 74,880 74,880
Christmas Cottage 27,880 -- -- -- --
J Riggins 44,004 44,004 44,004 44,004 44,004
Coach House 27,792 27,792 27,792 27,792 --
Pacesetter 12 40,477 42,858 45,239 47,620
Kiddie Kandids 33,525 33,525 33,525 33,525 33,525
Valley West Office* 40,500 40,500 40,500 40,500 40,500
Software Etc. 36,900 36,900 36,900 36,900 36,900
Footaction 19,200 11,200 -- -- --
B. Dalton Bookseller 60,000 60,000 69,153 69,996 69,996
5-7-9/Baker's Shoes 36,000 36,000 36,000 36,000 21,000
County Seat 68,040 68,040 68,040 68,040 68,040
Afterthoughts 32,640 32,640 32,640 32,640 32,640
Mrs. Field's Cookies 23,790 -- -- -- --
Massey's Jewelers 38,070 -- -- -- --
Sun Stop Optical 15,810 16,336 16,864 16,864 --
Great Expectations 21,463 23,735 23,735 -- --
Glamour Shots 24,464 -- -- -- --
Popcorn Cottage 15,108 15,108 -- -- --
Red Robin 72,000 72,000 80,000 80,000 80,000
Pearl Vision 43,654 52,844 52,844 52,844 --
His-n-Her Beauty Supply* 21,375 21,375 -- -- --
Game Peddler 20,884 25,424 25,424 -- --
Pretzel Time 22,700 22,700 22,700 27,240 27,240
Mrs. Cavanaugh's Candy* 10,800 10,800 10,800 -- --
Jammin Florscheim Shoes 23,460 23,460 23,460 25,500 25,500
Precision Time Jewelers 27,740 29,200 29,200 32,120 32,120
Regis Hairstylists 27,456 27,456 -- -- --
Blimpie 23,000 23,000 25,156 25,156 28,049
The Keyhole 18,563 -- -- -- --
Wilson's Leather Goods 39,222 42,556 43,580 43,580 43,580
Foot Locker 69,642 69,642 69,642 72,118 73,511
Northern Reflections 29,502 29,502 29,502 29,502 29,502
Pro Image 49,860 51,840 -- -- --
The Closet 62,184 62,184 62,184 66,976 66,976
Kinney Shoes 29,640 29,640 29,640 29,640 29,640
</TABLE>
<PAGE> 5
EXCEL REALTY TRUST, INC., AND VALLEY FAIR MALL, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE SELECTED PROPERTY OWNED OR TO
BE ACQUIRED BY EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
Note 2. Minimum Future Rentals (Continued)
<TABLE>
<S> <C> <C> <C> <C> <C>
Years Ending December 31, 1996 1997 1998 1999 2000
- ------------------------- ------ ------ ------ ------ ------
C. Michaels Jewelers 39,870 39,870 39,870 39,870 39,870
North Shore 21,546 -- -- -- --
Ground Zero 17,442 17,442 17,442 17,442 17,442
Games People Play 18,175 -- -- -- --
Cyber Station 63,406 88,704 88,704 88,704 88,704
Merle Norman Cosmetics 24,256 24,256 24,256 24,256 24,256
Dance N Toes 14,806 -- -- -- --
Adorn Me 18,088 18,088 18,620 -- --
Shuback Jewelers 60,000 60,000 60,000 60,000 60,000
Lady Foot Locker 24,816 26,905 31,020 31,020 31,020
Vanity 34,410 34,410 -- -- --
Zales Jewelers 61,980 61,980 61,980 61,980 61,980
General Nutrition 38,400 38,400 38,400 41,600 41,600
Jeans West 30,816 30,816 30,816 30,816 30,816
Valley Hallmark Shop 50,000 50,000 50,000 4,167 --
Radio Shack 34,454 36,915 36,915 36,915 36,915
Athletic X-Press 37,126 37,126 40,058 40,058 40,058
Kids Mart 31,053 31,053 31,053 33,876 36,699
Kay Bee Toys 50,400 50,400 -- -- --
Musicland 67,536 67,536 67,536 67,536 67,536
Class & Brass 17,100 8,550 -- -- --
B.C. Surf & Sport 27,915 27,915 30,707 30,707 --
Deseret Book 38,785 38,785 38,785 38,785 22,624
Copper Rivet 66,528 66,528 66,528 66,528 66,528
Payless Shoe Source 73,422 73,422 73,422 -- --
Lane Bryant 46,200 46,200 3,850 -- --
Zumiez 42,000 42,000 42,000 46,000 46,000
Braun's 32,810 32,810 32,810 32,810 32,810
Prints Plus 31,637 35,359 35,359 35,359 35,359
Miller Stockman 41,715 41,277 47,277 47,277 47,277
Payless Kids 27,918 27,918 -- -- --
Morgan Jewelry 54,635 54,635 -- -- --
First Security Bank 49,280 51,149 53,760 55,552 58,240
AVCO Financial Services 13,200 -- -- -- --
Century Dental Center 12,617 -- -- -- --
Suncoast Motion Picture Co. 33,000 33,000 37,400 37,400 37,400
Sierra West Jewelers 40,000 40,000 40,000 50,004 50,004
Copper Kettle Sweet
Specialties 19,825 19,825 19,825 -- --
Valley Fair Cinemas 137,340 137,340 160,222 160,222 160,222
Franklin Quest 59,228 62,580 62,580 10,415 --
Beki Sue's Buns* 23,040 23,040 23,040 23,040 23,040
Chick-Fil-A 24,000 -- -- -- --
The Golden Spoon 18,360 -- -- -- --
</TABLE>
<PAGE> 6
EXCEL REALTY TRUST, INC., AND VALLEY FAIR MALL, INC.
NOTES TO HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR THE SELECTED PROPERTY OWNED OR TO BE
ACQUIRED BY EXCEL REALTY TRUST, INC.
- --------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
<TABLE>
<CAPTION>
Years Ending December 31, 1996 1997 1998 1999 2000
- ------------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Edo Japan 24,320 24,320 24,320 24,320 --
Claire's Boutiques 39,830 40,780 45,520 45,520 45,520
Stick 'Em Up 18,360 18,360 20,655 20,655 20,655
Greek Kabob 19,508 19,508 20,655 20,655 26,393
Sbarro, Inc. 20,580 20,580 20,580 -- --
Orange Julius 14,623 -- -- -- --
Chang Chum 21,550 21,550 21,550 21,550 21,550
The Taco Maker 22,138 -- -- -- --
</TABLE>
* Tenant intends to renew lease beginning January 1, 1997 pending change in
ownership.
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. Also, some month-to-month leases exist in addition to the
noncancelable leases scheduled above.
<PAGE> 1
EXHIBIT 99.2
EXCEL REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 1995 and the
Nine Months Ended September 30, 1996
(Dollars in thousands, except per share information)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income has been presented as if the Valley Fair Mall acquisition had occurred on
January 1, 1995. 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, as amended and Form 10-Q for the year ended
December 31, 1995 and the period ended September 30, 1996 respectively, and the
Historical Summary of Operating Revenues and Direct Operating Expenses for the
Selected Property owned or 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, 1995 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, 1995 September 30, 1996
---------------------------------------------------------------------------------
Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue: $ 55,229 $ 6,037 $ 61,266 $ 39,566 $ 4,231 $ 43,797
Direct Operating Expenses: (15,470) (1,936) (17,406) (7,964) (1,701) (9,665)
Depreciation and amortization: (6,933) (602) (7,535) (5,552) (452) (6,004)
Interest Expense (A): (22,458) (2,786) (25,244) (14,911) (2,008) (16,919)
Interest and other income 4,141 -- 4,141 6,537 -- 6,537
Gain (Loss) on sale of Real Estate 3,683 -- 3,683 (825) -- (825)
-------------------------------------------------------------------------------
Net Operating Income: $ 18,192 $ 713 $ 18,905 $ 16,851 $ 70 $ 16,921
===============================================================================
Net income per share $ 1.51 $ 1.56 $ 1.21 $ 1.22
=========== =========== =========== ===========
Weighted Average Shares Outstanding 12,084,305 12,084,305 13,923,783 13,923,783
</TABLE>
(A) Pro Forma reflects additional mortgage debt of $17,915 at 7.6% and
borrowings of $19,109 from the Company's line of credit at an average
interest rate of 7.5%. Pro Forma does not reflect a Common Stock offering
that was consumated in December, 1996.
<PAGE> 2
EXCEL REALTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 1996
(Dollars in Thousands)
(Unaudited)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the Valley Fair Mall acquisition had occurred on September 30,
1996. 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, 1996. In management's opinion, all adjustments necessary to
reflect this transaction have been made. The unaudited Pro Forma Condensed
Consolidated Balance Sheet is not necessarily indicative of what the actual
financial position would have been at September 30, 1996, nor does it purport to
present the future financial position of the Company.
<TABLE>
<CAPTION>
PRO FORMA COMPANY
ASSETS HISTORICAL ADJUSTMENTS PROFORMA
- ------ ---------- ----------- --------
<S> <C> <C> <C>
Real estate, net.............. $409,362 $37,064 $446,426
Other Assets.................. 64,269 240 64,509
------- ------ -------
Total assets............. $473,631 $37,304 $510,935
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Mortgages and notes payable... $221,928 $37,024 $258,952
Other liabilities............. 8,857 280 9,137
-------- ------- --------
Total liabilities..... 230,785 37,304 268,089
-------- ------- --------
Stockholders' equity.......... 242,846 -- 242,846
-------- ------- --------
Total liabilities and
stockholders' equity..... $473,631 $37,304 $510,935
======== ======= ========
</TABLE>
