SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment #1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 2, 1998
BODDIE-NOELL PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-9496 56-1574675
(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
3850 One First Union Center, Charlotte, NC 28202
(Address or principal executive offices, Zip Code)
Registrant's telephone number 704/944-0100
Total number of pages: 20
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Item 2. Acquisition or Disposition of Assets
ALLERTON PLACE APARTMENTS, GREENSBORO, NORTH CAROLINA, AND
SUMMERLYN PLACE APARTMENTS, BURLINGTON, NORTH CAROLINA
Effective September 9, 1998, Boddie-Noell Properties, Inc. acquired
Allerton Place Apartments for a contract price of $15.8 million, as follows:
- We issued 99,334 partnership units in Boddie-Noell Properties Limited
Partnership, which we refer to as the Operating Partnership. The
partnership units' imputed value was $1.3 million.
- We made cash payments to certain owners totaling $1.4 million.
- We made cash payments to retire existing mortgages and other
liabilities related to the community totaling $13.1 million
On September 17, 1998, we applied $10.3 million proceeds from a
fixed-rate loan by AMRESCO Capital, LP, to retire the existing loan obligations.
A deed of trust and assignment of rents of Allerton Place Apartments secure the
new loan. The note payable provides for interest at 6.345% payable in monthly
installments of interest only of approximately $54,000 and matures in 2008. The
balance of funds required for the acquisition came from operating cash and draws
on our revolving line of credit.
We incurred other direct costs of approximately $225,000 to acquire
Allerton Place.
Effective September 2, 1998, we acquired Summerlyn Place Apartments for a
contract price of $10.2 million, as follows:
- We issued 100,588 Operating Partnership units with an imputed value
of $1.3 million.
- We made cash payments to retire existing mortgages and other
liabilities related to the community totaling $8.9 million.
On September 10, 1998, we applied $6.6 million proceeds from a fixed-rate
loan from AMRESCO Capital, LP, to retire the existing loan obligations. A deed
of trust and assignment of rents of Summerlyn Place Apartments secure the new
loan. The note payable provides for interest at 6.64% payable in monthly
installments of interest only of approximately $37,000 and matures in 2008. The
balance of funds required for the Summerlyn Place acquisition came from
operating cash and draws on our revolving line of credit.
We incurred other direct costs of approximately $164,000 to acquire
Summerlyn Place.
Allerton Place is located in Greensboro, North Carolina and contains 228
one-, two- and three-bedroom apartments. Summerlyn Place is located in
Burlington, North Carolina and contains 140 one-, two- and three-bedroom
apartments.
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We acquired Allerton Place and Summerlyn Place under our September 1997
agreement with Paul and James Chrysson and certain of their affiliates. We refer
to this group as the "Chrysson Parties." We previously acquired four apartment
communities containing 880 apartment units in December 1997 under this
acquisition agreement with the Chrysson Parties. The Chrysson Parties are still
developing one other apartment community containing 108 apartment units that we
plan to acquire under this acquisition agreement.
MADISON HALL APARTMENTS, WINSTON-SALEM, NORTH CAROLINA
Effective August 22, 1998, we acquired Madison Hall Apartments from Hawk
Properties, LLC, for a contract price of $6.3 million, as follows:
- We issued 36,667 Operating Partnership units with an imputed value
of $550,000.
- We will issue an additional 36,666 Operating Partnership units with
an imputed value of $550,000 in August 1999.
- We made cash payments to retire existing mortgages and other
liabilities related to the community totaling $5.2 million
On August 28, 1998, we applied $4.2 million proceeds from a fixed-rate
loan from AMRESCO Capital, LP, to retire the existing loan obligations. A deed
of trust and assignment of rents of Madison Hall Apartments secure the new loan.
The note payable provides for interest at 6.65% payable in monthly installments
of interest only of approximately $24,000 and matures in 2008. The balance of
funds required for the Madison Hall acquisition came from operating cash and
draws on our revolving line of credit.
We incurred other direct costs of approximately $106,000 to acquire
Madison Hall.
Madison Hall is located in Winston-Salem, North Carolina and contains 128
one- and two-bedroom apartments.
In conjunction with these three acquisitions, we made draws on our
revolving line of credit totaling $7.2 million.
We are a self-administered and self-managed real estate investment trust
that owns and operates apartment communities in North Carolina and Virginia.
With the acquisitions of Madison Hall, Summerlyn Place and Allerton Place, we
currently own and operate 14 apartment communities containing 3,188 units, and
have the right to acquire one additional apartment community containing 108
units. We also own 47 restaurant properties, which we lease to a third party
under a master lease on a triple-net basis. In addition, we manage five other
apartment communities through an
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unconsolidated subsidiary. Our executive offices are located at 3850 One First
Union Center, Charlotte, North Carolina 28202-6032, telephone 704/944-0100.
We are structured as an UPREIT, or umbrella partnership real estate
investment trust. We are the sole general partner and own a controlling interest
in the Operating Partnership, through which we conduct all of our operations.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
Pages 6-9 Madison Hall Property Audited Statements of Revenue
and Certain Operating Expenses for the Year ended
December 31, 1997
Pages 10-13 Summerlyn Place Property Audited Statements of
Revenue and Certain Operating Expenses for the
period from October 1, 1997 (inception) to December
31, 1997
Pages 14-17 Allerton Place Property Audited Statements of Revenue
and Certain Operating Expenses for the period from
June 1, 1997 (inception) to December 31, 1997
(b) Pro Forma Financial Information.
Pages 18-20 Boddie-Noell Properties, Inc. Unaudited Pro Forma
Condensed Consolidated Balance Sheet as of June 30, 1998
We have presented the unaudited pro forma condensed consolidated balance
sheet as of June 30, 1998, as if we had acquired Allerton Place, Summerlyn
Place, and Madison Hall on June 30, 1998.
We do not engage in development activities. Consistent with our prior
practice, we do not include apartment communities in pro forma statements of
operations until they have reached "stabilized" status. We consider an apartment
community to be stabilized when construction or renovation of all buildings has
been completed and the property has attained 90% occupancy for a period of 90
days, or for a shorter period acceptable to our lender.
We have not prepared pro forma condensed consolidated statements of
operations for the year ended December 31, 1997, or for the six months ended
June 30, 1998, because none of the three communities had reached stabilized
status prior to June 30, 1998. The audited statements of revenue and certain
operating expenses for these properties included in this Current Report reflect
actual operations of these communities prior to reaching stabilzed status. We
believe that any attempt to provide meaningful pro
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forma statements of operations for the year ended December 31, 1997, or for the
six months ended June 30, 1998, would not be factually supportable.
You should read these unaudited statements in conjunction with our
Annual Report on Form 10-K for the year ended December 31, 1997, and our
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. We believe
the pro forma condensed consolidated financial information provides all
adjustments necessary to reflect the effects of these acquisitions.
No one has audited these pro forma condensed consolidated financial
statements. These pro forma statements may not represent what our financial
position would have been if we had really acquired Allerton Place, Summerlyn
Place, and Madison Hall Apartments on June 30, 1998. In addition, these pro
forma statements do not purport to project our financial position at any future
date or for any future period.
(c) Exhibits.
None.
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.
Boddie-Noell Properties, Inc.
(Registrant)
October 29, 1998 by: /s/ Pamela B. Novak
---------------------------------------
Pamela B. Novak
Vice President, Controller and
Chief Accounting Officer
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Report of Independent Auditors
To the Shareholders of
Boddie-Noell Properties, Inc.
We have audited the accompanying Statement of Revenue and Certain Operating
Expenses of Madison Hall Property as described in Note 1 for the year ended
December 31, 1997. This financial statement is the responsibility of Madison
Hall Property's management. Our responsibility is to express an opinion on this
financial statement 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the basis of accounting used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Operating Expenses was
prepared using the basis of accounting described in Note 1 for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Form 8-K of Boddie-Noell Properties, Inc. and is
not intended to be a complete presentation of Madison Hall Property's revenue
and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain operating expenses described in
Note 1 of Madison Hall Property for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Raleigh, North Carolina
August 21, 1998
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Madison Hall Property
Statements of Revenue and Certain Operating Expenses
<TABLE>
<CAPTION>
Year ended Six months ended
December 31 June 30
1997 1997 1998
--------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Rental income $ 342,465 $ 99,544 $ 367,456
Certain operating expenses:
Property operations expense 104,544 36,074 126,679
Insurance 11,221 1,950 5,711
Property taxes 18,628 4,146 21,279
--------------------------------------------------------------
Total certain operating expenses 134,393 42,170 153,669
--------------------------------------------------------------
Revenue in excess of certain operating expenses $ 208,072 $ 57,374 $ 213,787
==============================================================
</TABLE>
See accompanying notes.
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Madison Hall Property
Notes to Statements of Revenue and Certain Operating Expenses
December 31, 1997
1. Basis of Presentation
Presented herein are the Statements of Revenue and Certain Operating Expenses
related to the operations of an apartment property located in Clemmons, North
Carolina.
Madison Hall Property is not a legal entity but rather an apartment property
acquired by Boddie-Noell Properties, Inc. The accompanying Statements of Revenue
and Certain Operating Expenses includes the accounts of Madison Hall Property
which is wholly owned and managed by Hawk Properties, LLC, and not affiliated
with Boddie-Noell Properties, Inc. The 128 unit apartment complex contains 86
units that were built during 1996 and 1997 with construction of these units
substantially completed in September 1997. The remaining 42 units were
originally built in 1977 and renovated during 1997 and 1998 with renovation of
these units substantially completed in June 1998. The property was in the
start-up phase of operations during 1997.
In accordance with Rule 3-14 of Regulation S-X, the accompanying financial
statement is not representative of the actual operations for the year presented
as certain operating expenses that may not be comparable to the expenses
expected to be incurred by Boddie-Noell Properties, Inc. in the proposed future
operations of the aforementioned properties have been excluded. Expenses
excluded consist of interest, depreciation and general and administrative
expenses not directly related to future operations.
2. Significant Accounting Policies
Advertising Expense
Madison Hall Property expenses advertising costs as incurred. Advertising
expense included in property operations expense was $43,900 for the year ended
December 31, 1997.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those amounts.
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Madison Hall Property
Notes to Statements of Revenue and Certain Operating Expenses (continued)
2. Significant Accounting Policies (continued)
Interim Financial Data
The unaudited financial statements for the six months ended June 30, 1998 and
1997 include all adjustments (consisting of normal recurring adjustments) that
are, in the opinion of management, necessary for a fair presentation of the
revenues and certain operating expenses for such interim periods. Operating
results for the six months ended June 30, 1998 are not necessarily indicative of
the results to be expected for the entire year ending December 31, 1998.
3. Leases
Madison Hall Property leases its residential apartments under operating leases
with monthly payments due in advance. The majority of the apartment leases are
for terms of one year or less. Rental and other revenues are recorded as earned.
4. Environmental Matters
Madison Hall Property has been subjected to Phase I environmental reviews. Such
reviews have not revealed, nor is management aware of, any environmental
liability that management believes would have a material adverse effect on the
accompanying financial statement.
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Report of Independent Auditors
To the Shareholders of
Boddie-Noell Properties, Inc.
We have audited the accompanying Statement of Revenue and Certain Operating
Expenses of Summerlyn Place Property as described in Note 1 for the period from
October 1, 1997 (inception) to December 31, 1997. This financial statement is
the responsibility of Summerlyn Place Property's management. Our responsibility
is to express an opinion on this financial statement 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the basis of accounting used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Operating Expenses was
prepared using the basis of accounting described in Note 1 for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Form 8-K of Boddie-Noell Properties, Inc. and is
not intended to be a complete presentation of Summerlyn Place Property's revenue
and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain operating expenses described in
Note 1 of Summerlyn Place Property for the period from October 1, 1997
(inception) to December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
Raleigh, North Carolina
August 20, 1998
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Summerlyn Place Property
Statements of Revenue and Certain Operating Expenses
<TABLE>
<CAPTION>
Period from
October 1, 1997 Six months ended
(inception) to June 30,
December 31, 1997 1998
--------------------------------------------
(Unaudited)
<S> <C> <C>
Rental income $ 30,859 $ 380,875
Certain operating expenses:
Property operations expense 41,356 122,665
Insurance 329 3,785
Property taxes 8,440 25,323
--------------------------------------------
Total certain operating expenses 50,125 151,773
--------------------------------------------
Revenue in excess of certain operating expenses $ (19,266) $ 229,102
============================================
</TABLE>
See accompanying notes.
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Summerlyn Place Property
Notes to Statements of Revenue and Certain Operating Expenses
December 31, 1997
1. Basis of Presentation
Presented herein are the Statements of Revenue and Certain Operating Expenses
related to the operations of an apartment property located in Burlington, North
Carolina.
Summerlyn Place Property is not a legal entity but rather an apartment property
expected to be acquired by Boddie-Noell Properties, Inc. The accompanying
Statements of Revenue and Certain Operating Expenses includes the accounts of
Summerlyn Place Property which is wholly owned by Summerlyn Place Property
Associates, LLC and not affiliated with Boddie-Noell Properties, Inc. Summerlyn
Place Property was placed in service and certified for occupancy in October
1997. The construction of the 140 unit apartment complex was completed in 1998,
thus the property was in the start-up phase of operations during 1997.
In accordance with Rule 3-14 of Regulation S-X, the accompanying financial
statement is not representative of the actual operations for the year presented
as certain operating expenses that may not be comparable to the expenses
expected to be incurred by Boddie-Noell Properties, Inc. in the proposed future
operations of the aforementioned property have been excluded. Expenses excluded
consist of interest, depreciation and general and administrative expenses not
directly related to future operations.
2. Significant Accounting Policies
Advertising Expense
Summerlyn Place Property expenses advertising costs as incurred. Advertising
expense included in property operating expense was $3,400 for the period from
October 1, 1997 (inception) to December 31, 1997.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those amounts.
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Summerlyn Place Property
Notes to Statements of Revenue and Certain Operating Expenses (continued)
2. Significant Accounting Policies
Interim Financial Data
The unaudited financial statements for the six months ended June 30, 1998
include all adjustments (consisting of normal recurring adjustments) that are,
in the opinion of management, necessary for a fair presentation of the revenues
and certain operating expenses for such interim period. Operating results for
the six months ended June 30, 1998 are not necessarily indicative of the results
to be expected for the entire year ending December 31, 1998.
3. Leases
Summerlyn Place Property leases its residential apartments under operating
leases with monthly payments due in advance. The majority of the apartment
leases are for terms of one year or less. Rental and other revenues are recorded
as earned.
4. Environmental Matters
Summerlyn Place Property has been subjected to Phase I environmental reviews.
Such reviews have not revealed, nor is management aware of, any environmental
liability that management believes would have a material adverse effect on the
accompanying financial statement.
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Report of Independent Auditors
To the Shareholders of
Boddie-Noell Properties, Inc.
We have audited the accompanying Statement of Revenue and Certain Operating
Expenses of Allerton Place Property as described in Note 1 for the period from
June 1, 1997 (inception) to December 31, 1997. This financial statement is the
responsibility of Allerton Place Property's management. Our responsibility is to
express an opinion on this financial statement 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the basis of accounting used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Operating Expenses was
prepared using the basis of accounting described in Note 1 for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Form 8-K of Boddie-Noell Properties, Inc. and is
not intended to be a complete presentation of Allerton Place Property's revenue
and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain operating expenses described in
Note 1 of Allerton Place Property for the period from June 1, 1997 (inception)
to December 31, 1997, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Raleigh, North Carolina
August 24, 1998
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Allerton Place Property
Statements of Revenue and Certain Operating Expenses
<TABLE>
<CAPTION>
Period from June 1,
1997 (inception) to Six months ended
December 31, June 30,
1997 1998
-----------------------------------------------
(Unaudited)
<S> <C> <C>
Rental income $ 357,660 $ 761,707
Certain operating expenses:
Property operations expense 195,721 171,608
Insurance 2,408 3,393
Property taxes 3,036 42,759
-----------------------------------------------
Total certain operating expenses 201,165 217,760
-----------------------------------------------
Revenue in excess of certain operating expenses $ 156,495 $ 543,947
===============================================
</TABLE>
See accompanying notes.
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Allerton Place Property
Notes to Statements of Revenue and Certain Operating Expenses
December 31, 1997
1. Basis of Presentation
Presented herein are the Statements of Revenue and Certain Operating Expenses
related to the operations of an apartment property located in Greensboro, North
Carolina.
Allerton Place Property is not a legal entity but rather an apartment property
acquired by Boddie-Noell Properties, Inc. The accompanying Statement of Revenue
and Certain Operating Expenses includes the accounts of Allerton Place Property,
which is wholly owned by Pleasant Ridge Associates, LLC and not affiliated with
Boddie-Noell Properties, Inc. The first building on the property was placed in
service and certified for occupancy in June 1997. The property was in the
start-up phase of operations during 1997.
In accordance with Rule 3-14 of Regulation S-X, the accompanying financial
statement is not representative of the actual operations for the year presented
as certain operating expenses that may not be comparable to the expenses
expected to be incurred by Boddie-Noell Properties, Inc. in the proposed future
operations of the aforementioned property have been excluded. Expenses excluded
consist of interest, depreciation and general and administrative expenses not
directly related to future operations.
2. Significant Accounting Policies
Advertising Expense
Allerton Place Property expenses advertising costs as incurred. Advertising
expense included in property operations expense was $27,200 for the period from
June 1, 1997 (inception) to December 31, 1997.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those amounts.
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Allerton Place Property
Notes to Statements of Revenue and Certain Operating Expenses (continued)
2. Significant Accounting Policies (continued)
Interim Financial Data
The unaudited financial statements for the six months ended June 30, 1998
include all adjustments (consisting of normal recurring adjustments) that are,
in the opinion of management, necessary for a fair presentation of the revenues
and certain operating expenses for such interim periods. Operating results for
the six months ended June 30, 1998 are not necessarily indicative of the results
to be expected for the entire year ending December 31, 1998.
3. Leases
Allerton Place Property leases its residential apartments under operating leases
with monthly payments due in advance. The majority of the apartment leases are
for terms of one year or less. Rental and other revenues are recorded as earned.
4. Environmental Matters
Allerton Place Property has been subjected to Phase I environmental reviews.
Such review has not revealed, nor is management aware of, any environmental
liability that management believes would have a material adverse effect on the
accompanying financial statement.
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BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1998
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Adjustments
---------------------------------------------
Madison Hall Summerlyn Allerton
Acquisition Place Place
Historical Acquisition Acquisition Pro Forma
--------------- -------------- --------------- -------------- --------------
(A) (B) (C) (D)
<S> <C> <C> <C> <C> <C>
Assets
Real estate assets, net $169,692 $6,356 $10,389 $16,025 $202,462
Cash and cash equivalents 1,723 (494) 116 (191) 1,155
Other current assets 1,907 26 17 30 1,980
Investment in and advances
to Management Company 424 - - - 424
Notes receivable 2,271 - - - 2,271
Intangible related to
Management operations 2,537 - - - 2,537
Deferred financing costs, net 829 45 75 110 1,059
--------------- -------------- --------------- -------------- --------------
Total Assets $179,382 $5,933 $10,597 $15,975 $211,887
=============== ============== =============== ============== ==============
Liabilities and
Shareholders' Equity
Mortgage and other
notes payable $100,994 $4,745 $9,145 $14,470 $129,354
Accounts payable and other
accrued expenses 2,046 88 144 213 2,492
Consideration due for
acquisitions 2,600 550 - - 3,150
--------------- -------------- --------------- -------------- --------------
105,640 5,383 9,289 14,683 134,996
Minority interest in
Operating Partnership 15,090 550 1,308 1,291 18,239
Shareholders' equity 58,652 - - - 58,652
--------------- -------------- --------------- -------------- --------------
Total liabilities and
shareholders equity $179,382 $5,933 $10,597 $15,975 $211,887
=============== ============== =============== ============== ==============
</TABLE>
See accompanying notes.
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BODDIE-NOELL PROPERTIES, INC.
- -------------------------------------------------------------------------------
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
(A) Reflects our historical balance sheet contained in our Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998.
(B) Reflects the acquisition of Madison Hall Apartments. We estimate the cost of
the Madison Hall acquisition as follows:
We issued 36,667 Operating Partnership units at $15.00 per
unit to former members of Hawk Properties, LLC $ 550,000
We will issue an additional 36,666 Operating Partnership
units at $15.00 to former members of Hawk Properties,
LLC, in August 1999 550,000
We made cash payments to retire existing mortgages and other
liabilities related to Madison Hall 5,150,000
Other costs (estimated) 106,000
-----------------
$ 6,356,000
=================
We financed the Madison Hall acquisition with net proceeds from a $4,245,000
fixed-rate note secured by a deed of trust and assignment of rents of Madison
Hall Apartments. The note payable provides for interest at 6.65% payable in
monthly installments of interest only of approximately $24,000 and matures in
August 2008. The balance of funds required for the acquisition came from
operating cash and draws on our revolving line of credit.
The community contains 128 apartment units. 86 units were built in 1996 and
1997, with construction of these units substantially completed in September
1997. The remaining 42 units were originally built in 1977 and were
significantly renovated during late 1997 and 1998, with renovation of these
units substantially completed in June 1998. During the renovation these units
were removed from service. We allocated the estimated purchase cost as follows:
Land $ 303,000
Buildings and improvements 5,829,000
Fixtures, equipment and floor coverings 224,000
-----------------
$ 6,356,000
=================
(C) Reflects the acquisition of Summerlyn Place Apartments. We estimate the cost
of the Summerlyn Place acquisition as follows:
We issued 100,588 Operating Partnership units at $13.00
per unit to former members of Summerlyn Place
Associates, LLC $ 1,308,000
We made cash payments to retire existing mortgages and
other liabilities related to Summerlyn Place 8,917,000
Other costs (estimated) 164,000
-----------------
$10,389,000
=================
We financed the Summerlyn Place acquisition with net proceeds from a $6,645,000
fixed-rate note secured by a deed of trust and assignment of rents of Summerlyn
Place Apartments. The note payable provides for interest at 6.64% payable in
monthly installments of interest only of approximately $37,000 and matures in
September 2008. The balance of funds required for the acquisition came from
operating cash and draws on our revolving line of credit.
The community contains 140 apartment units built in 1997 and 1998. Construction
of the apartment buildings was substantially completed in June 1998. We
allocated the estimated purchase cost as follows:
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Land $ 837,000
Buildings and improvements 9,133,000
Fixtures, equipment and floor coverings 419,000
-----------------
$10,389,000
=================
(D) Reflects the acquisition of Allerton Place Apartments. We estimate the cost
of the Allerton Place acquisition as follows:
We issued 99,334 Operating Partnership units at $13.00
per unit to certain former members of Pleasant
Ridge Associates, LLC $ 1,291,000
We made cash payments to certain former members of
Pleasant Ridge Associates LLC 1,436,000
We made cash payments to retire existing mortgages
and other liabilities related to Allerton Place 13,073,000
Other costs (estimated) 225,000
-----------------
$16,025,000
=================
We financed the Allerton Place acquisition with net proceeds from a $10,270,000
fixed-rate note secured by a deed of trust and assignment of rents of Allerton
Place Apartments. The note payable provides for interest at 6.35% payable in
monthly installments of interest only of approximately $54,000 and matures in
September 2008. The balance of funds required for the acquisition came from
operating cash and draws on our revolving line of credit.
The community contains 228 apartment units built in 1997 and 1998. Construction
of the apartment buildings was substantially completed in July 1998. We
allocated the estimated purchase cost as follows:
Land $ 1,384,000
Buildings and improvements 13,422,000
Fixtures, equipment and floor coverings 1,219,000
-----------------
$16,025,000
=================
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