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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) September 29, 1998
-----------------------
(October 13, 1998)
KRANZCO REALTY TRUST
- -----------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Maryland 1-11478 23-2691327
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
128 Fayette Street, Conshohocken, Pennsylvania 19428
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (610) 941-9292
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- -----------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
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<PAGE>
Item 2. Acquisition or Disposition of Assets.
On September 29, 1998 Kranzco Realty Trust ("Kranzco" or the "Company")
completed the acquisition of nine community shopping centers in five midwest
and southern states for approximately $88 million (the "Southeast
Acquisition"). The purchase price was financed through a first mortgage
financing in the amount of $65.9 million from Salomon Brothers Realty Corp.
and the balance from borrowings under the Facility (as defined below). The
first mortgage financing, which bears interest at 7.0%, requires monthly
payments of interest and principal. Principal amortization is based on a 30-
year term with a balloon payment due October 2008. Five of the centers are
in Georgia and the others are in Ohio, Tennessee, Florida and Virginia. The
centers have a total of approximately 1.4 million square feet of gross
leaseable area and an overall leased rate of approximately 99%. Wal-Mart is
a tenant in nine of the centers and has vacated its space at two of the
centers but continues to pay rent in accordance with its leases. Wal-Mart
has subleased space at one of these two centers to a third party. Besides
Wal-Mart, other well-known anchor retailers are Eckerd Drug, Food Lion, Radio
Shack and CVS. After the purchase, Kranzco owns 68 properties in 19 states
with a total of approximately 9 million square feet of GLA. The Southeast
Acquisition increased Kranzco's GLA by approximately 15 percent.
Kranzco acquired the properties in the Southeast Acquisition from Europco
Property Investors II, Ltd., a Georgia limited partnership; Europco Property
Investors III, Ltd., a Georgia limited partnership; Europco Property
Investors IV, Ltd., a Georgia limited partnership; Secured Properties
Investors V, L.P., a Georgia limited partnership; Secured Properties
Investors VIII, L.P., a Georgia limited partnership; Secured Properties
Investors IX, L.P. a Georgia limited partnership; and Tifton Partners, L.P.,
a Georgia limited partnership.
Item 5. Other Events.
On September 29, 1998 Kranzco entered into an amendment to its existing
secured, first mortgage loan facility (the "Facility") with Salomon Brothers
Realty Corp. The amendment increased the Facility to $100 million and
extended the maturity date to July 2000 with an extension option to July
2001. In addition, in order to secure the Facility, the Company granted
mortgages on its shopping centers in Bainbridge, Georgia; Carrollton,
Georgia; Livonia Michigan; and Trdyffrin, Pennsylvania. As of September 29,
1998 there was $42,000,000 outstanding under the Facility.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
<PAGE>
(b) Pro Forma Financial Information.
Kranzco Realty Trust Pro Forma Combined Condensed Financial Information
(Unaudited)
The accompanying financial statements present the unaudited pro forma
combined condensed Balance Sheet of Kranzco Realty Trust after giving effect
to the consummation of the Southeast Acquisition, as of June 30, 1998 and the
unaudited pro forma combined condensed Statements of Operations of Kranzco
Realty Trust for the six months ended June 30, 1998 and for the year ended
December 31, 1997.
The unaudited pro forma combined condensed Balance Sheet as of June 30,
1998 is presented as if the consummation of the Southeast Acquisition had
occurred on June 30, 1998. The unaudited pro forma combined condensed
Statements of Operations for the six months ended June 30, 1998 and for the
year ended December 31, 1997 are presented as if the consummation of the UPI
Acquisition, the Georgia Acquisition and the Southeast Acquisition had
occurred as of January 1, 1997.
Preparation of the pro forma financial information was based on
assumptions deemed appropriate by the management of Kranzco Realty Trust.
The assumptions give effect to the consummation of the UPI Acquisition, the
Georgia Acquisition and the Southeast Acquisition in accordance with
generally accepted accounting principles, the entity qualifying as a REIT,
distributing all of its taxable income and, therefore, incurring no federal
income tax expense during the periods presented. The pro forma financial
information is unaudited and is not necessarily indicative of the results
which actually would have occurred if the transactions had been consummated
at the beginning of the periods presented, nor does it purport to represent
the future financial position and results of operations for future periods.
The pro forma information should be read in conjunction with the historical
financial statements of Kranzco Realty Trust incorporated by reference into
this Form 8-K.
<PAGE>
Kranzco Realty Trust
Pro Forma Combined Condensed Balance Sheet
As of June 30, 1998
(Unaudited)
The Company Southeast The Company
Historical Acquisition (Pro Forma)
---------- -------------- ----------
(Dollar amounts
in thousands)
Assets:
Shopping centers, at cost, net $439,250 $88,600 (A) $527,850
Cash and marketable securities 6,255 -- 6,255
Restricted cash 1,505 -- 1,505
Rents and other receivables, net 9,536 -- 9,536
Prepaid expenses 1,637 -- 1,637
Deferred financing costs, net 1,717 500 2,217
Other deferred costs, net 2,552 -- 2,522
Other assets 780 -- 780
-------- ------- --------
Total assets $463,202 $89,100 $552,302
======== ======= ========
Liabilities:
Mortgages and notes payable $258,920 $89,100 (A) $348,020
Tenant security deposits 1,403 -- 1,403
Accounts payable and accrued
expenses 2,510 -- 2,510
Other liabilities 149 -- 149
Distributions payable 6,636 -- 6,636
-------- ------- --------
Total liabilities 269,618 89,100 358,718
-------- ------- --------
Kranzco Series C Preferred Shares 1,337 -- 1,337
Beneficiaries Equity:
Common shares and Preferred shares 135 -- 135
Capital in excess of par value 261,742 -- 261,742
Cumulative net income available for
common shares 37,260 -- 37,260
Cumulative distributions on common
shares (106,799) -- (106,799)
--------- ------- ---------
192,338 -- 192,338
Unearned compensation on restricted
common shares (91) -- (91)
-------- ------- --------
Total beneficiaries' equity 192,247 -- 192,247
-------- ------- --------
Total liabilities, Kranzco Series C
Preferred Shares and beneficiaries'
equity $463,202 $89,100 $552,302
======== ======= ========
The accompanying notes and management's assumptions are an integral part of
this statement.<PAGE>
Notes and Management's Assumptions to Pro Forma Combined Condensed
Balance Sheet for Kranzco Realty Trust as of June 30, 1998.
(Dollar amounts in thousands)
(A) Adjustment to reflect acquisition of
Southeast Acquisition Properties:
Total Purchase Price and Acquisition Costs $88,600
Deferred financing costs 500
-------
$89,100
=======
Acquisition paid for by:
First Mortgage $65,900
Credit lines 23,200
-------
Total Debt $89,100
=======
<PAGE>
Kranzco Realty Trust
Pro Forma Combined Condensed
Statement of Operations for
the Six Months Ended June 30, 1998
(Unaudited)
Southeast
The Company Acquisition The Company
(Historical) (Pro Forma) (Pro Forma)
----------- ----------- -----------
(a)
(Dollar amounts in thousands
except share and per share data)
REVENUE:
Minimum rent $27,112 $4,154 $31,266
Percentage rent 559 40 599
Expense reimbursements 5,767 356 6,123
Other income 44 -- 44
Interest income 207 -- 207
Total revenue 33,689 4,550 38,239
EXPENSES:
Interest 9,904 3,351(b) 13,255
Depreciation and amortization 6,923 1,094(c) 8,017
Real estate taxes 3,360 246 3,606
Operations and maintenance 4,259 302 4,561
General and administrative 1,760 -- 1,760
Total expenses 26,206 4,993 31,199
Net income (loss) 7,483 (443) 7,040
DISTRIBUTIONS ON PREFERRED SHARES 4,029 -- 4,029
Net income (loss) attributable to
common shareholders $ 3,454 $ (443) $ 3,011
Basic and Diluted Earnings
per Common Share $ 0.33 $ 0.29
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OF BENEFICIAL
INTEREST 10,435,000 10,435,000
The accompanying notes and management's assumptions are an integral part of
this statement.<PAGE>
<TABLE>
<CAPTION> Kranzco Realty Trust
Pro Forma Combined Condensed
Statement of Operations for
the Year Ended December 31, 1997
(Unaudited)
Georgia Acquisition
UPI /Issuance of Payoff
The Company Acquisition Preferred Shares of Existing Southeast The Company
(Historical) (Pro Forma) (Pro Forma) Debt Total Acquisition Pro Forma
----------- ---------- ------------------- ----------- --------- ------------ -----------
(d) (e) (a)
(Dollar amounts in thousands, except share and per share data)
<S> <C> <C> <C> <C> <C> <C>
REVENUE:
Minimum rent $47,579 $1,194 $4,668 $-- $53,441 $8,238 $61,679
Percentage rent 1,163 4 -- -- 1,167 215 1,382
Expense reimbursements 11,165 152 692 -- 12,009 803 12,812
Other income 127 -- -- -- 127 -- 127
Interest income 278 -- -- -- 278 -- 278
------- ----- ------ --- ------ ------ ------
Total revenue 60,312 1,350 5,360 -- 67,022 9,256 76,278
EXPENSES:
Interest 18,887 498 1,765(f) (1,862)(g) 19,288 6,701(b) 25,989
Depreciation and amortization12,534 228(h) 1,023(i) -- 13,785 2,187(c) 15,972
Real estate taxes 6,584 83 394 -- 7,061 420 7,481
Operations and maintenance 8,346 96 482 -- 8,924 644 9,568
General and administrative 2,877 0 -- -- 2,877 -- 2,877
------- ----- ------ --- ------ ------ ------
Total expenses 49,228 905 3,664 (1,862) 51,935 9,952 61,887
Net income 11,084 445 1,696 1,862 15,087 (696) 14,391
DISTRIBUTIONS ON PREFERRED
SHARES 3,565 528 4,275(j) -- 8,368 -- 8,368
------- ----- ------ --- ------ ------ ------
Net income (loss)
attributable to
common shareholders $7,519 $(83) $(2,579) $1,862 $6,719 $(696) $6,023
======= ===== ======== ====== ====== ====== ======
NET INCOME PER
COMMON SHARE $0.73 $ 0.64 $0.58
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OF BENEFICIAL
INTEREST 10,342,000 10,426,000 10,426,000
The accompanying notes and management's assumptions are an integral part of this statement.
</TABLE>
<PAGE>
Footnotes to Pro Forma Combined Condensed Statements of Operations
(unaudited)
(a) To record the operations of the 1998 Acquisition Properties.
(b) To record interest on the debt incurred to acquire the 1998 Acquisition
Properties:
Rate Debt June 30, 1998December 31, 1997
First Mortgage 7.00% $65,900 $1,153 $4,613
Credit Lines 9.00% 23,200 522 2,088
Total $89,100 $1,675 $6,701
======= ====== ======
(c) To record depreciation and amortization on the Southeast Acquisition
Properties:
Purchase Price and
Acquisition Costs $88,600 $1,034 $2,067
Amortization of deferred
financing costs 500 60 120
------- ------ ------
$89,100 $1,094 $2,187
======= ====== ======
(d) In February 1997, Kranzco acquired from Union Property Investors, Inc.
("UPI") 16 properties located in 11 states for approximately $65
million, aggregating approximately 1.3 million square feet of GLA (the
"UPI Acquisition"). This adjustment reflects the operations of UPI.
(e) In December 1997, Kranzco acquired five shopping centers in the Atlanta
metropolitan area (the "Georgia Properties") aggregating approximately
650,000 square feet of GLA, for approximately $44 million (the "Georgia
Acquisition"). This adjustment reflects the operations of the Georgia
Properties.
(f) To reflect interest expense of debt assumed and the additional
borrowings as a result of the Georgia Acquisition:
December 31,
1997
Debt assumed $20,435
Interest expense
at various rates $1,765
(g) To record the repayment of debt outstanding and the related reduction of
interest expenses as follows:
Principal amount of debt repayment $19,894
Interest expense reduction on debt repayment $1,862
(h) The depreciation and amortization include pro forma adjustments as a
result of the UPI Acquisition.
(i) To reflect depreciation expense over a 30-year life as a result of the
Georgia Acquisition as follows:
December 31,
1997
------------
Depreciable basis
of the Georgia Properties $30,702
Depreciation expense $1,023
(j) To record the distributions on the issuance of
Series D Preferred Shares: December 31,
1997
-------------
Shares issued 1,800
Face amount per share $ 25.00
Gross Proceeds $45,000
Distribution rate 9.50%
Distributions $ 4,275
<PAGE>
(c) Exhibits
10.1 Amendment to Loan Agreement and Guaranty, dated as of September 29,
1998, made by and among Kranzco Realty Trust, the Borrowers named
therein, Salomon Brothers Realty Corp. and LaSalle National Bank.
10.2 Amended and Restated Global Promissory Note, dated September 29, 1998,
made by the Borrowers named therein in favor of Salomon Brothers Realty
Corp.
23.1 Consent of Independent Public Accountants - Arthur Andersen LLP.
<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 hereunto duly authorized.
Date: October 13, 1998
KRANZCO REALTY TRUST
By:/s/ Robert H. Dennis
------------------------------
Name: Robert H. Dennis
Title: Chief Financial Officer
<PAGE>
EXHIBIT INDEX
10.1 Amendment to Loan Agreement and Guaranty, dated as of September 29,
1998, made by and among Kranzco Realty Trust, the Borrowers named
therein, Salomon Brothers Realty Corp. and LaSalle National Bank.
10.2 Amended and Restated Global Promissory Note, dated September 29, 1998,
made by the Borrowers named therein in favor of Salomon Brothers Realty
Corp.
23.1 Consent of Independent Public Accountants - Arthur Andersen LLP
AMENDED AND RESTATED GLOBAL PROMISSORY NOTE
$100,000,000 September 29, 1998
New York, New York
FOR VALUE RECEIVED, EACH BORROWER identified on Annex A attached hereto
(collectively, "Borrowers"), hereby promises to pay to SALOMON BROTHERS
REALTY CORP. ("Salomon"), at its principal office at 7 World Trade Center,
29th Floor, New York, New York 10048, the sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) (or such portion thereof as may be outstanding from time to
time) in lawful money of the United States of America and in immediately
available funds, on the date provided in the Loan Agreement (hereinafter
defined), and to pay interest on the unpaid Principal Indebtedness (as such
term is defined in the Loan Agreement), at such office, in like money and
funds, for the period commencing on the initial Advance Closing Date (as such
term is defined in the Loan Agreement) until such Principal Indebtedness
shall be paid in full, at the rates per annum and on the dates provided in
the Loan Agreement.
The date and amount of each Advance (as such term is defined in the Loan
Agreement) on each Advance Closing Date and the date and amount of each
payment of interest, principal and other amounts due under the Loan Documents
(as such term is defined in the Loan Agreement), shall be recorded by Agent
(as such term is hereinafter defined) on the schedule attached hereto
provided that the failure of Agent to make any such recordation shall not
affect the obligations of the Issuer to make a payment when due of any amount
owing under the Loan Agreement or hereunder.
This Amended and Restated Global Promissory Note amends and restates the
Global Promissory Note referred to in the Loan Agreement, dated as of
February 26, 1997, as amended as of the date hereof (as the same may be
further modified and supplemented and in effect from time to time, the "Loan
Agreement") between Borrowers, Salomon (as initial lender and as agent for
administration of the Loan ("Agent")), Kranzco Realty Trust, as guarantor,
and LaSalle National Bank, as collateral agent for Lender, and evidences the
Principal Indebtedness loaned thereunder.
The obligations under this Amended and Restated Global Promissory Note
are recourse only to the extent and as limited by the Loan Agreement, and the
provisions of Section 8.24 of the Loan Agreement are hereby incorporated
herein by reference as if set forth herein in their entirety.
The Loan Agreement provides for the acceleration of the maturity of this
Amended and Restated Global Promissory Note upon the occurrence of certain
events and for prepayment of the Amended and Restated Global Promissory Note
upon the terms and conditions specified therein.
<PAGE>
This Amended and Restated Global Promissory Note shall be governed by,
and construed in accordance with, the law of the State of New York.
KR BRADFORD MALL, L.P.,
a Pennsylvania limited partnership
By: KR BRADFORD MALL, INC.,
a Pennsylvania corporation, peneral partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
KR BARN, L.P.,
a Pennsylvania limited partnership
By: KR BARN, INC.,
a Pennsylvania corporation, general partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
KR VALLEY FORGE, L.P.,
a Pennsylvania limited partnership
By: KR VALLEY FORGE, INC.,
a Pennsylvania corporation, general partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
<PAGE>
KR DEVELOPMENT, L.P.,
a Pennsylvania limited partnership
By: KR DEVELOPMENT, INC.,
a Pennsylvania corporation, general partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
LILAC NEW YORK CORP., a New York corporation
KR PARKWAY PLAZA I, CORP., a Connecticut
corporation
KR WAMPANOAG, INC., a Rhode Island corporation
KR BROOKHAVEN, INC., a Mississippi corporation
KR MORGANTON, INC., a North Carolina corporation
KR HARRODSBURG, INC., a Kentucky corporation
KRT UNION CORP., a Delaware corporation
KRANZCO RAYNHAM, INC., a Massachusetts corporation
KR MINNETONKA, INC., a Minnesota corporation
KR ROSEVILLE, INC., a Minnesota corporation
KR TUCSON, INC., an Arizona corporation
KR BAINBRIDGE, INC., a Georgia corporation
KR TOWER PLAZA, INC., a Georgia corporation
KR LIVONIA, INC., a Michigan corporation
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President of each of the
aforementioned corporations
<PAGE>
SCHEDULE OF NOTES
This Amended and Restated Global Promissory Note, together with any
Registered Note delivered in exchange for any portion of this Amended and
Restated Global Promissory Note, evidences the aggregate principal amount of
Loan outstanding or which may be outstanding from time to time under the Loan
Agreement, subject to the payments and prepayments of principal set forth
below:
Date of Amount of Amount Paid Aggregate Unpaid Notation
Loan Advance Loan Advance or Prepaid Principal Amount Made By
- ------------ ------------ ---------- ---------------- -------
<PAGE>
ANNEX A
KR BRADFORD MALL, L.P., a Pennsylvania limited
partnership
KR BARN, L.P., a Pennsylvania limited partnership
KR DEVELOPMENT, L.P., a Pennsylvania limited
partnership
LILAC NEW YORK CORP., a New York corporation
KR PARKWAY PLAZA I, CORP., a Connecticut
corporation
KR VALLEY FORGE, LP., a Pennsylvania limited
partnership
KR WAMPANOAG, INC., a Rhode Island corporation
KR BROOKHAVEN, INC., a Mississippi corporation
KR MORGANTON, INC., a North Carolina corporation
KR HARRODSBURG, INC., a Kentucky corporation
KRT UNION CORP., a Delaware corporation
KRANZCO RAYNHAM, INC., a Massachusetts corporation
KR MINNETONKA, INC., a Minnesota corporation
KR ROSEVILLE, INC., a Minnesota corporation
KR TUCSON, INC., an Arizona corporation
KR BAINBRIDGE, INC., a Georgia corporation
KR TOWER PLAZA, INC., a Georgia corporation
KR LIVONIA, INC., a Michigan corporation
AMENDMENT TO LOAN AGREEMENT AND GUARANTY
This Amendment to Loan Agreement and Guaranty (this "Amendment"), dated
as of September 29, 1998, is made by and among KRANZCO REALTY TRUST, a
Maryland real estate investment trust (the "Guarantor"); each of the entities
named on Schedule I hereto, collectively, as borrowers (the "Borrowers");
SALOMON BROTHERS REALTY CORP., a New York corporation, as agent and lender
(the "Agent"); and LASALLE NATIONAL BANK, a New York corporation, as
collateral agent for the Agent (the "Collateral Agent").
R E C I T A L S:
The Borrowers, the Agent and the Collateral Agent are party to a Loan
Agreement, dated as of February 26, 1997 (as it may hereafter be amended,
supplemented or otherwise modified, the "Loan Agreement"), pursuant to which
the Agent agreed, subject to the terms and conditions set forth in the Loan
Agreement, to make a loan to the Borrowers as provided in the Loan Agreement.
Terms used but not defined herein shall have the respective meanings ascribed
to such terms in the Loan Agreement, as amended hereby.
The parties wish to, among other things, modify the Loan Agreement and
the Guaranty to increase the maximum Loan Amount to $100,000.000.
As a condition to the Agent entering into the Loan Agreement, the
Guarantor delivered the Unlimited Guaranty of Payment, dated as of February
26, 1997 (as it may hereafter be amended, supplemented or otherwise modified,
the "Guaranty") unconditionally and irrevocably guaranteeing payment of the
Loan.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows, effective as of the date
hereof:
Section 1. Maximum Loan Amount. The definition of "Loan Amount" in
the first recital to the Loan Agreement is hereby amended by the deletion of
"$50,000,000" in the third line of such Recital and the insertion in its
place of $100,000,000. It is understood and agreed that a "commitment fee"
is not due and payable in connection with the increase in the maximum Loan
Amount.
Section 2. Origination Fee. The definition of "Origination Fee" is
hereby amended by the deletion of "1.50%" in the first line of such
definition and the insertion in its place of "1.00%."
Section 3. Maturity Date. The definitions of "Original Maturity
Date" and "Extended Maturity Date" set forth in Section 2.17 of the Loan
Agreement are hereby amended by the deletion of "March, 1999" and "March,
2000" in the second and third lines of such Section and the insertion in
their place of "July, 2000" and "July, 2001," respectively.
Section 4. Debt Service Coverage Test. The definition of "Debt
Service Coverage Test" is hereby amended by the deletion of "1.50" in the
second line of such definition and the insertion in its place of "1.30."
Section 5. Market Constant. The definition of "Market Constant" is
hereby amended by the deletion of "10%" in the second line of such definition
and the insertion in its place of "9.5%" and the deletion of "220" in the
third line of such definition and the insertion in its place of "200."
Section 6. Guaranty. Section 10(a) of the Guaranty is hereby
deleted in its entirety and the following sentence is substituted in its
place: "The equity of the Guarantor as reflected in the most recent annual
report or quarterly report filed with the Securities and Exchange Commission
("SEC") (any such report, a "Financial Report") shall not be less than
$175,000,000."
Section 7. Covenants, Representations and Warranties of the
Borrowers.
7.1. Each of the Borrowers and the Guarantor hereby reaffirms all
terms and covenants made in the Loan Documents executed by it as amended
hereby.
7.2. Each of the Borrowers and the Guarantor hereby represents and
warrants to the Agent that (a) this Amendment constitutes the legal, valid
and binding obligation of the Borrowers and the Guarantor, enforceable
against the Borrowers and the Guarantor in accordance with its terms, and (b)
the execution and delivery by the Borrowers and the Guarantor of this
Amendment has been duly authorized by all requisite limited partnership or
corporate, as applicable, action on the part of each of the Borrowers and the
Guarantor and will not violate any provision of the organizational documents
of any of the Borrowers.
7.3. Each of the Borrowers and the Guarantor hereby represents and
warrants to the Agent that, as of the date hereof, to the best of such
Person's knowledge, no Event of Default has occurred and is continuing, and
that no Event of Default will occur as a result of the execution, delivery
and performance by the Borrowers and the Guarantor of this Amendment.
7.4. Each of the Borrowers and the Guarantor hereby agree that a
breach of any of the representations and warranties made herein shall
constitute an Event of Default under Section 7.1 of the Loan Agreement,
subject to the notice and cure provisions provided therein.
Section 8. Effect Upon Loan Documents.
8.1. Except as specifically set forth herein, the Loan Documents
shall remain in full force and effect and are hereby ratified and confirmed.
The provisions of this Amendment shall be subject to the provisions of
Section 8.24 of the Loan Agreement, which provisions are incorporated by
reference as if herein set forth in full. All references to the "Loan
Agreement" in the Loan Documents shall mean and refer to the Loan Agreement
as modified and amended hereby.
8.2. The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the Agent
under the Loan Documents, or any other document, instrument or agreement
executed and/or delivered in connection therewith.
Section 9. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED,
INTERPRETED AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PRINCIPLES.
Section 10. Counterparts. This Amendment may be executed in any
number of counterparts, and all such counterparts shall together constitute
the same agreement.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
AGENT:
SALOMON BROTHERS REALTY CORP.,
a New York corporation
By:/s/ Mary Anne Merola
________________________
Name: Mary Anne Merola
Title: Authorized Agent
BORROWERS:
KR BRADFORD MALL, L.P.,
a Pennsylvania limited partnership
By: KR BRADFORD MALL, INC.,
a Pennsylvania corporation, general
partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
KR BARN, L.P.,
a Pennsylvania limited partnership
By: KR BARN, INC.,
a Pennsylvania corporation, general
partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
KR VALLEY FORGE, L.P.,
a Pennsylvania limited partnership
By: KR VALLEY FORGE, INC.,
a Pennsylvania corporation, general
partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
KR DEVELOPMENT, L.P.,
a Pennsylvania limited partnership
By: KR DEVELOPMENT, INC.,
a Pennsylvania corporation, general
partner
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
<PAGE>
LILAC NEW YORK CORP.,
a New York corporation
KR PARKWAY PLAZA 1, CORP.,
a Connecticut corporation
KR WAMPANOAG, INC.,
a Rhode Island corporation
KR BROOKHAVEN, INC.,
a Mississippi corporation
KR MORGANTON, INC.,
a North Carolina corporation
KR HARRODSBURG, INC.,
a Kentucky corporation
KRT UNION CORP.,
a Delaware corporation
KRANZCO RAYNHAM, INC.,
a Massachusetts corporation
KR MINNETONKA, INC.,
a Minnesota corporation
KR ROSEVILLE INC.,
a Minnesota corporation
KR TUCSON, INC.,
an Arizona corporation
KR BAINBRIDGE, INC.,
a Georgia corporation
KR TOWER PLAZA, INC.
a Georgia corporation
KR LIVONIA, INC.,
a Georgia corporation
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President of each of the
aforementioned corporations
<PAGE>
GUARANTOR:
KRANZCO REALTY TRUST, a Maryland real estate
investment trust
By:/s/ Robert H. Dennis
-----------------------------
Name: Robert H. Dennis
Title: Vice President
COLLATERAL AGENT:
LASALLE NATIONAL BANK, a New York
corporation
By:___________________________________
Name:
Title:
<PAGE>
Schedule 1
BORROWERS
KR BRADFORD MALL, L.P., a Pennsylvania limited partnership
KR BARN, L.P., a Pennsylvania limited partnership
KR VALLEY FORGE, L.P., a Pennsylvania limited partnership
KR DEVELOPMENT, L.P., a Pennsylvania limited partnership
LILAC NEW YORK CORP., a New York corporation
KR PARKWAY PLAZA I, CORP., a Connecticut corporation
KR WAMPANOAG, INC., a Rhode Island corporation
KR BROOKHAVEN, INC., a Mississippi corporation
KR MORGANTON, INC., a North Carolina corporation
KR HARRODSBURG, INC., a Kentucky corporation
KRT UNION CORP., a Delaware corporation
KRANZCO RAYNHAM, INC., a Massachusetts corporation
KR MINNETONKA, INC., a Minnesota corporation
KR ROSEVILLE INC., a Minnesota corporation
KR TUCSON, INC., an Arizona corporation
KR BAINBRIDGE, INC., a Georgia corporation
KR TOWER PLAZA, INC., a Georgia corporation
KR LIVONIA, INC., a Pennsylvania corporation
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form 8-K of our report dated February 28,
1997 on the financial statements of Kranzco Realty Trust and our report dated
July 2, 1998 on the financial statements of the Southeast Acquisition
Properties into the Company's previously filed Registration Statements on
Form S-3 (File Nos. 33-75554 and 33-72076), on Form S-8 (File Nos. 33-56990
and 33-94294) and on Form S-4 (File No. 333-52743).
/S/ ARTHUR ANDERSEN LLP
Philadelphia, Pa.
October 9, 1998
