SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 23, 1997
Berkshire Realty Company, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-10660 04-3086485
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(State of incorporation (Commission (IRS Employer
or organization) File Number) Identification No.)
470 Atlantic Avenue, Boston, MA 02210
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 423-2233
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N/A
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
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Press Release dated October 23, 1997:
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Berkshire Realty Company, Inc. ( NYSE-BRI )
NEWS RELEASE
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<TABLE>
<S> <C>
FOR FURTHER INFORMATION CONTACT:
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
David Marshall, CEO (617) 556-1516 Laurie Berman, General Information (212) 661-8030
Marianne Pritchard, CFO (617) 556-1512 Stephanie Mishra, Analyst Information (415) 986-1591
Maryann Merigan, Investor Relations
(800) 662-5787, Ext. 8378
</TABLE>
BERKSHIRE REALTY COMPANY ANNOUNCES
THIRD QUARTER AND NINE MONTH 1997 RESULTS
Boston, MA -- October 23, 1997 -- Berkshire Realty Company, Inc. (the
"Company") (NYSE:BRI), a self-administered and self-managed, multifamily real
estate investment trust, announced an 8% increase per share in funds from
operations ("FFO") to $8,869,000, or $0.28 per share, for the three months ended
September 30, 1997 versus $7,453,000, or $0.26 per share, for the same period
last year. For the nine months ended September 30, 1997, Berkshire reported FFO
of $25,319,000, or $0.81 per share, versus $21,534,000, or $0.78 per share, for
the nine months ended September 30, 1996. FFO is calculated based on the revised
definition adopted by the National Association of Real Estate Investment Trusts
(NAREIT) and is considered the primary earnings measure for equity REITs.
Total revenues for the quarter ended September 30, 1997 were
$28,416,000 compared with $25,334,000 for the quarter ended September 30, 1996.
For the 1997 nine month period, total revenues were $80,504,000 compared with
$67,924,000 for the 1996 nine month period. The Company's same-store net
operating income (NOI) from apartment communities increased 5.9% for the three
months ended September 30, 1997 when compared to the same period in 1996. Year
to date, same store multifamily growth was 6.2% over the nine months ended
September 30, 1996. "Same-store" is defined as properties that were in
Berkshire's portfolio for both periods.
David Marshall, President and Chief Executive Officer of Berkshire
Realty, stated, "We are very pleased with our multifamily same-store growth of
over 6% year to date. NOI from our Texas and Florida assets continues to be
strong. In Greenville, South Carolina, where 19% of our same-store assets are
held, we posted growth of 5% despite stiff competition from multifamily and
single-family development. Our ability to improve our net operating income in
Greenville is a direct result of focused and intense property management
operations."
Mr. Marshall added, "Atlanta has been a challenge for us and year to
date we are behind in same-store NOI by $212,000. However, current occupancy
continues to improve and we expect to make up some ground by year end."
"Our retail portfolio continues to impact our overall FFO growth." Mr.
Marshall continued. "The lack of FFO growth from same-store retail has
diminished the impact of growth from our apartments. However, we have made great
progress in reducing this impact by divesting a portion of our retail portfolio
over the last nine months in an effort to redeploy our retail investment into
multifamily assets with greater growth prospects."
The Company has sold four of its seven retail investments since fourth
quarter 1996 and one additional asset, Tara Crossing, is under contract for
sale. The Company has previously stated that the disposition of these assets
will negatively impact FFO by approximately $.02 per share in 1997 because of
the differential between cap rates for the assets being sold versus the assets
being acquired.
Same-Store Properties - Results of Operations. NOI from the Company's
twenty-five "same-store" apartment communities increased by 5.9% to $10,162,000
from $9,593,000 for the third quarter of 1997 when compared to the same period
in 1996. NOI from the Company's three same-store retail properties was $831,000
in third quarter 1997 compared to $1,075,000 in third quarter 1996.
Same-Store Multifamily (8,467 units)
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended September 30, Nine Months Ended September 30,
----------------------------------- -------------------------------
1997 1996 % Change 1997 1996 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues $16,763 $16,232 3.3% $49,244 $47,826 3.0%
Expenses 6,601 6,639 (0.6)% 19,612 19,936 (1.6)%
----- ----- ------ ------
Net operating income $10,162 $9,593 5.9% $29,632 $27,890 6.2%
======= ====== ======= =======
Average occupancy 95.1% 94.9% 93.9% 94.1%
Average monthly rent per unit $689 $668 $683 $661
</TABLE>
Growth in same-store multifamily revenues was 3.3% for the 1997 third
quarter when compared to the 1996 third quarter. This growth was almost entirely
driven by increases in average rents of 3.0% as well as a modest increase in
occupancies. Year-to-date, revenues are up 3.0% which is a combination of 3.3%
rent growth offset by a slight decline in occupancies.
Expenses for the quarter ended September 30, 1997 and for the nine
months ended September 30, 1997 when compared to the comparable prior year
periods are down 0.6% and 1.6%, respectively.
Same-Store Retail (479,805 square feet)
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended September 30, Nine Months Ended September 30,
---------------------------------- -----------------------------------
1997 1996 % Change 1997 1996 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues $1,447 $1,602 (9.7)% $4,314 $4,632 (6.8)%
Expenses 616 527 17% 1,850 1,712 8.1%
--- --- ----- -----
Net operating income $831 $1,075 (22.7)% $2,464 $2,920 (15.6)%
==== ====== ====== ======
Average occupancy 91.2% 93.0% 92.2% 92.4%
</TABLE>
Same-store net operating income from the retail portfolio dropped
$456,000 to $2,464,000 year-to-date when compared to the 1996 nine month period.
The drop in NOI is primarily the result of retenanting at Tara Crossing Shopping
Center in Atlanta, Georgia which, as previously mentioned, is under contract for
sale.
Berkshire Realty Company, Inc. is a self-administered and self-managed,
multifamily real estate investment trust which acquires, renovates,
rehabilitates, develops and operates apartment communities. The Company
currently owns 46 apartment communities consisting of approximately 15,000 units
located primarily in Florida, Texas and the mid-Atlantic and Southeastern United
States.
[Financial Tables on Following Three Pages]
<PAGE>
BERKSHIRE REALTY COMPANY, INC.
Operating Highlights
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
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Ended September 30, Ended September 30,
------------------------------------ ---------------------------------------
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues:
Rental $26,785,357 $24,511,073 $76,493,968 $65,106,795
Management fees and reimbursements 940,321 -- 2,208,725 --
Other 690,530 822,590 1,801,407 2,816,721
------- ------- --------- ---------
28,416,208 25,333,663 80,504,100 67,923,516
Expenses:
Property operating expenses 11,096,806 10,466,534 31,240,466 26,731,150
Interest expense 5,975,959 5,796,867 17,461,212 14,714,314
Depreciation and amortization 8,500,562 7,964,529 24,079,513 20,950,314
Amortization of intangible assets 3,258,049 336,192 4,784,506 784,448
Costs associated with the Advisor
Transaction -- -- 1,200,000 --
Provision for losses on real
estate investments 1,850,000 7,500,000 1,850,000 7,500,000
Property management fees to an
affiliate 47,466 1,190,521 866,771 3,142,998
Property management operations 1,463,113 319,958 3,618,844 976,764
General and administrative 1,302,024 1,070,081 3,727,783 3,388,404
--------- --------- --------- ---------
33,493,979 34,644,682 88,829,095 78,188,392
---------- ---------- ---------- ----------
Loss before non-recurring charges,
minority interest, joint venture income
(loss), gains on sales of assets, and
extraordinary items (5,077,771) (9,311,019) (8,324,995) (10,264,876)
Non-recurring charges -- (287,059) -- (287,059)
Minority interest 917,013 795,967 1,488,214 857,540
Joint venture income (loss) (including
valuation reserve of $740,228 for the
nine month period ending September 30,
1997), net of minority interest 110,058 434,504 (308,886) 1,050,509
Gains on sales of assets,net of
minority interest -- 996,321 5,364,707 996,322
Extraordinary items, net of minority
interest (90,191) (150,781) (90,191) (150,781)
------- -------- ------- --------
Net loss (4,140,891) (7,522,067) (1,871,151) (7,798,345)
Income allocated to preferred
shareholders (85,531) -- (85,531) --
------- -------
Net loss allocated to common
shareholders $(4,226,422) $(7,522,067) $(1,956,682) $(7,798,345)
=========== =========== =========== ===========
Per share:
Net loss per common share $(.16) $(.30) $(.08) $(.31)
===== ===== ===== =====
Weighted average shares 25,738,248 25,393,299 25,547,631 25,393,072
</TABLE>
<PAGE>
BERKSHIRE REALTY COMPANY, INC.
Funds from Operations ("FFO")
(fully adjusted for operating partnership units)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
----------------------------------------- -------------------------------
Ended September 30, Ended September 30,
----------------------------------------- -------------------------------
1997 1996 1997 1996
-------------------- ------------------- ---------------- -------------
<S> <C> <C> <C> <C>
Loss before non-recurring charges,
minority interest, joint venture income
(loss), gains on sales of assets, and
extraordinary items $(5,077,771) $(9,311,019) $(8,324,995) $(10,264,876)
Joint venture net operating income 431,861 977,018 1,840,677 2,597,019
Amortization of intangible assets 3,258,049 336,192 4,784,506 784,448
Costs associated with advisor transaction -- -- 1,200,000 --
Depreciation 8,492,659 7,950,701 24,054,732 20,917,523
Provision for losses 1,850,000 7,500,000 1,850,000 7,500,000
Income allocated to preferred shareholders (85,531) -- (85,531) --
------- -------
Funds from Operations $ 8,869,267 $ 7,452,892 $25,319,389 $ 21,534,114
=========== =========== =========== ============
FFO per share $ .28 $ .26 $ .81 $ .78
==== ==== ==== ====
Weighted Average:
Shares 25,738,248 25,393,299 25,547,631 25,393,072
Units 6,080,590 3,280,517 5,630,483 2,241,607
--------- --------- --------- ---------
31,818,838 28,673,816 31,178,114 27,634,679
========== ========== ========== ==========
</TABLE>
<PAGE>
BERKSHIRE REALTY COMPANY, INC.
Balance Sheet Data
<TABLE>
<CAPTION>
September 30, December 31,
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1997 1996
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(Unaudited)
<S> <C> <C>
Assets:
Total real estate assets $589,674,063 $519,056,773
Cash and mortgage-backed securities 17,055,217 16,248,909
Escrows and other assets 23,507,179 22,037,092
Acquisition of workforce and intangible assets 25,739,272 12,327,039
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$655,975,731 $569,669,813
============ ============
Liabilities and Shareholders' Equity:
Credit agreements and mortgage notes $306,037,929 $295,165,607
Other liabilities 17,659,142 14,241,683
Minority interest 57,898,385 36,608,607
Shareholders' equity 274,380,275 223,653,916
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$655,975,731 $569,669,813
============ ============
</TABLE>
Other Information
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
------------------------------------ ----------------------------------
Ended September 30, Ended September 30,
------------------------------------ ----------------------------------
1997 1996 1997 1996
----------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
Other Data:
Number of apartment units, end of quarter 14,990 12,100 14,990 12,100
Apartment units added during period 2,094 348 2,903 2,889
Apartment units sold during period -- (223) (348) (223)
Units under development 296 96 296 96
Revenues:
Multi-family communities $26,024,539 $22,626,562 $73,328,559 $59,300,639
Retail assets (including pro-rata
revenues from joint venture
investments) $ 1,635,156 $ 3,578,408 $ 6,977,974 $10,696,768
Net Operating Income:
Multi-family communities $15,046,293 $12,845,026 $42,826,014 $34,047,137
Retail assets (including pro-rata NOI
from joint venture Investments)
$984,209 $2,400,780 $4,150,046 $6,931,611
</TABLE>
For more information on Berkshire Realty, via fax at no charge,
please dial 1-800-PRO-INFO and enter ticker symbol BRI,
or visit our web site at http://www.brireit.com.
This press release contains forward-looking statements relating to activities of
the Company within the meaning of federal securities laws. Although the Company
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, there are certain factors that might cause a
difference between actual results and those forward-looking statements,
including those factors discussed periodically in the Company's reports filed
with the Securities and Exchange Commission, including the report on Form 10-Q
for the quarter ended September 30, 1997.
<PAGE>
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, thereunto duly authorized.
BERKSHIRE REALTY COMPANY, INC.
/s/ Marianne Pritchard
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Marianne Pritchard
Senior Vice President and
Chief Financial Officer
October 23, 1997
