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 Original Report: April 9, 1999
CORNERSTONE REALTY INCOME TRUST, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 1-12875 54-1589139
(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
306 East Main Street
Richmond, Virginia 23219
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(804) 643-1761
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CORNERSTONE REALTY INCOME TRUST, INC.
FORM 8-K
Index
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
b. Pro Forma Statement of Operations for the twelve months ended
December 31, 1998 (unaudited)
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Item 7 Financial Statements, Pro forma Financial Information and
Exhibits
The Company hereby files the pro forma financial information under Item 7.b.
as follows:
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ITEM 7.b.
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Pro Forma Consolidated Statement of Operations for the year ended December 31,
1998 (unaudited)
The Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1998 is presented as if 6 of the 7 Property
acquisitions made by the Company during 1998 had occurred on January 1, 1998.
The Unaudited Pro Forma Statement of Operations assumes the Company qualifying
as a REIT, distributing at least 95% of its taxable income, and, therefore,
incurred no federal income tax liability for the period presented. In the
opinion of management, all adjustments necessary to reflect the effects of these
transactions have been made.
The Unaudited Pro Forma Consolidated Statement of Operations is presented for
comparative purposes only and is not necessarily indicative of what the actual
results of the Company would have been for the year ended December 31, 1998 if
the acquisitions had occurred at the beginning of the period presented, nor does
it purport to be indicative of the results of operations in future periods. The
Unaudited Pro Forma Consolidated Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the Company's respective
historical financial statements and notes thereto.
<TABLE>
<CAPTION>
Stone Pinnacle Hampton
Historical Point Ridge Pointe The Timbers The Gables
Statement of Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
Operations Adjustments Adjustments Adjustments Adjustments Adjustments
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Date of Acquisitions - 1/15/98 3/31/98 3/31/98 6/4/98 7/2/98
Rental and other income $93,637,948 $ 56,094 $214,941 $495,061 $ 494,369 $ 752,765
Rental expenses:
Propety and maintenance 24,641,642 15,821 73,178 157,479 169,870 221,388
Taxes and insurance 6,986,245 4,154 15,411 54,874 31,692 49,381
Property management 2,169,552 - - - - -
General and administrative 1,681,810 - - - - -
Amortization and other depreciation 47,703 - - - - -
Depreciation of rental property 20,741,130 - - - - -
Other 1,968,591 - - - - -
------------------------------------------------------------------------------------
58,236,673 19,975 88,589 212,353 201,562 270,769
Income before interest income (expense) 35,401,275 36,119 126,352 282,708 292,807 481,996
and minority interest
Interest income 411,957 - - - - -
Interest expense (12,587,897) - - - - -
------------------------------------------------------------------------------------
Net income before minority interest 23,225,335 36,119 126,352 282,708 292,807 481,996
Minority interest (14,693)
------------------------------------------------------------------------------------
Net income $23,210,642 $36,119 $126,352 $282,708 $292,807 $481,996
==============
Net income per common share - Basic and diluted $0.62
==============
Wgt. avg. number of shares outstanding-basic 37,630,546
==============
</TABLE>
<TABLE>
<CAPTION>
Cape
Landing 1998
Pro Forma Pro Forma Total
Adjustments Adjustments Pro Forma
--------------------------- ---------------
<S> <C> <C> <C>
Date of Acquisitions 10/16/98 -
Rental and other income $ 1,027,716 - $96,678,894
Rental expenses:
Propety and maintenance 370,393 - 25,649,771
Taxes and insurance 128,864 - 7,270,621
Property management - - 2,169,552
General and administrative - - 1,681,810
Amortization and other depreciation - - 47,703
Depreciation of rental property - 873,029 (A) 21,614,159
Other - - 1,968,591
--------------------------- ---------------
499,257 873,029 60,402,207
Income before interest income (expense) 528,458 (873,029) 36,276,686
and minority interest
Interest income - (160,313)(D) 251,645
Interest expense - (1,390,404)(B) (13,978,301)
--------------------------- ---------------
Net income before minority interest 528,458 (2,423,745) 22,550,030
Minority interest (91,059)(E) (105,752)
--------------------------- ---------------
Net income $528,458 ($2,514,805) $22,444,278
===============
Net income per common share - Basic and diluted $0.59
===============
Wgt. avg. number of shares outstanding-basic 309,917 (C) 37,940,463
============= ===============
</TABLE>
(A) Represents the depreciation expense of the properties acquired based on the
purchase price,excluding amounts allocated to land, for the period of time
not owned by the Company. The weighted average life of the property
depreciated was 27.5 years.
(B) Represents the interest expense for 5 of the 7 properties purchased using
the line of credit for the period in which the properties were not owned,
interest was computed based on interest rates under the Company's line of
credit in effect at the time of the respective acquisition (range from 6.8%
to 8.5%).
(C) Repesents additional common shares used to purchase Timbers based upon the
purchase price of $8,100,000; common shares issued in May 1997 with net
proceeds per share of $10.89 to the Company.
(D) Represents reduction of interest income associated with $4.050 million of
cash used to purchase Cape Landing at an interest rate of 5%. Cape Landing
was purchased using cash, the Company's line of credit, and operating
partnership units (see Note E).
(E) Represents minority interest of 185,874 operating partnership units in the
Company's operating partnership.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form to be signed on its behalf by the
undersigned hereunto duly authorized.
CORNERSTONE REALTY INCOME TRUST, INC.
Date: April 9, 1999 By:/s/ Stanley J. Olander, Jr.
---------------------------
Stanley J. Olander, Jr.
Chief Financial Officer
of Cornerstone Realty Income Trust, Inc.
