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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): May 23, 1997
Commission File No. 1-10547
MERIDIAN POINT REALTY TRUST VIII CO.
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(Exact name of registrant as specified in its charter)
Missouri 94-3058019
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
655 Montgomery Street
Suite 800
San Francisco, California 94111
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(Address of principal executive offices) (Zip Code)
(415) 274-1808
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(Registrant's telephone number, including area code)
Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
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MERIDIAN POINT REALTY TRUST VIII COMPANY
ITEM 5. OTHER EVENTS
Meridian Point Realty Trust VIII Company today issued its 1996 Annual Report.
The attached Exhibit contains the Message to Shareholders from S. Michael
Lucash, Chairman of the Board of Directors.
Certain statements contained in this report may be deemed to be forward-looking
statements within the meaning of the federal securities laws. Although the
Company believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no assurance that
its expectations will be achieved. Factors that could cause actual results to
differ materially from the Company's present expectations include general
economic conditions, local real estate conditions, the performance of properties
the Company owns or may acquire and other risks, detailed from time to time in
the Company's SEC reports.
SIGNATURE
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.
MERIDIAN POINT REALTY TRUST VIII COMPANY
Dated: May 23, 1997 by /s/ John E. Castello
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JOHN E. CASTELLO, Senior Vice President
and Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT NO. ITEM PAGE NO.
<S> <C> <C>
99.1 Message to Shareholders from 4.
1996 Annual Report
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Exhibit 99.1
MESSAGE TO SHAREHOLDERS
Dear Shareholder:
During 1996, Meridian Point Realty Trust VIII experienced an
improvement in Company operations which was achieved through management's focus
on cost cutting and tighter management of the REIT and its real estate.
OPERATING RESULTS AND DIVIDENDS
In 1996, net income amounted to $1,352,171 compared to a net loss of
$(274,345) in 1995. After adjusting the 1995 results for a non-recurring special
loss provision and a debt prepayment penalty, net income in 1996 was up
$315,058, or 30.4%, over the prior year. This represents a significant
improvement in Company operations. While total revenues declined to $10,220,757
in 1996 versus $11,194,575 in the prior year reflecting the sale of two
properties during 1995, this reduction was more than offset by lower expenses in
1996. Management has achieved these excellent results through its concerted
efforts at reducing costs and a greatly improved property management strategy.
In 1996, funds from operations amounted to $3,736,167 or $0.543 per
share. This compares to $3,754,768 or $0.545 per share for 1995. In addition to
maintaining a 1996 dividend of $0.28 per share, the Company was able to make a
large scheduled principal reduction to its long term debt facility which, at the
end of 1996, showed a principal balance of $20,042,421, down 17.4% from 1995.
PORTFOLIO REPOSITIONING
During the year, your Board of Directors working very closely with
management examined many strategic alternatives which would reposition the REIT,
allowing it to grow and increase shareholder value. As you are aware, at our
1996 annual meeting, changes to the Company's by-laws were approved by the
shareholders which allowed the Company to use proceeds from the sale of
properties to purchase new properties. As we move forward into 1997, the Board
of Directors has authorized the expansion of our Walden Books facility in
Memphis. This expansion alone, will add $600,000 to our net operating income for
1998. In addition, the Company has entered into contracts to sell our South
Sayre, Illinois and Jackson, Mississippi properties which will result in a gain
on sale to the Company. The Company has also entered into a contract to acquire
several properties in West Palm Beach, Florida.
DEBT REFINANCING
In addition to the above, our management team worked very closely with
our long term debt facility lender, re-establishing a solid working
relationship. This has not only resulted in the lender lifting the technical
default issued under prior management but also in a successful refinancing for
our debt, at a very attractive rate of interest. This refinancing will close in
June of this year.
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IMPROVED VALUATION
Last year, we reported to you that a liquidation of the portfolio at
that time would be inadequate to meet the $10 per share preference of the
preferred shareholders, and that the common shareholders would not receive any
proceeds. As a result of the Company's improved operations, the pending
adjustments in the Company's portfolio and in response to our shareholders'
interest expressed at the 1996 annual meeting, the Board of Directors recently
engaged Duff & Phelps LLC to evaluate the likely amount of cash available for
distribution on both the preferred and common shares based on the actions noted
above and a sale of the Company's assets during 1998. In Duff and Phelps'
opinion, after completing the debt restructuring and the real estate
transactions described herein, a reasonable estimate of the Company's
liquidation value is in excess of $65 million which would be sufficient to pay
the $10 preference amount to the preferred shareholders and provide a
substantial return to the common shareholders at the end of 1998. This estimate,
which is based upon information provided to Duff & Phelps by management and
other outside parties, is a tremendous improvement from previous years when the
Company reported a much bleaker picture. Of course, Duff & Phelps' liquidation
analysis is based upon a number of assumptions, and cannot be translated into
any opinion as to what the actual or likely share price should be or will be.
STRATEGIC OUTLOOK
The Board of Directors has worked very diligently during this past year
to reposition the Company and to develop a strategic plan which will greatly
increase shareholder value. We are very encouraged as we look forward to 1997
and 1998. The Company has a strong and improved asset base that is well
positioned in growth markets. The portfolio is providing a healthy cash flow and
has a low debt level. We believe that the Company has turned a very important
corner, that management will continue its excellent record at reducing costs and
increasing revenues, and that our Company will embark on a growth strategy which
will benefit all of our shareholders.
Finally, I'd like to point out that this letter represents my sincere
and honest views regarding the past year at the Company and its future
prospects. However, many of my statements are forward-looking in nature and,
therefore, inherently subject to the vagaries of future events which I cannot
predict. Please look at the enclosed Annual Report for a better understanding of
the Company, especially the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
Sincerely,
S. Michael Lucash
Chairman of the Board
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