SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
OR
[]Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission file number: 0-28354
Great Lakes REIT, Inc.
(Exact name of Registrant as specified in its Charter)
Maryland 36-3844714
(State or other jurisdiction (I.R.S.employer identification no.)
of incorporation organization)
2311 W. 22nd Street, Suite 109, Oak Brook, IL 60521
(Address of principal executive offices) (Zip Code)
(708) 368 - 2900
(Registrant s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Number of common shares outstanding at June 1, 1996 4,808,692
Great Lakes REIT, Inc.
Index to Form 10-Q
March 31, 1996
Page Number
Part I
Item 1. Financial Information:
Condensed Balance Sheets as of March 31, 1996 and
December 31, 1995 1
Condensed Statements of Income for the three months ended
March 31, 1996 and 1995 2
Condensed Statement of Changes in Stockholders' Equity
for the three months ended March 31, 1996 3
Condensed Statements of Cash flows for the three months
ended March 31, 1996 and 1995 4
Notes to Condensed Financial Statements
Item 2. Management Discussion and Analysis of Results of
Operations and Financial Condition
Part II
Item 4. Submission of Matters to a Vote of Security Holders
<PAGE>
<TABLE>
<CAPTION>
Great
Lakes REIT, Inc.
Condensed Balance Sheets
(unaudited)
March 31, 1996 December 31, 1995
-------------- -----------------
<S> <C> <C>
Assets
Properties:
Land ................................ $ 19,046,500 $ 18,673,750
Buildings, improvements and equipment 77,160,263 75,667,086
Less accumulated depreciation .... 3,145,259 2,482,844
--------- ---------
93,061,504 91,857,992
Cash and cash equivalents ............. 821,498 1,302,728
Other assets .......................... 4,948,886 5,817,716
--------- ---------
Total assets ..................... $ 98,831,888 $ 98,978,436
============ ============
Liabilities and Stockholders Equity
Bank loan payable ..................... $ 23,000,000 $ 24,253,148
Bonds payable ......................... 5,420,000 5,420,000
Mortgage notes payable ................ 18,478,904 18,634,022
Accounts
payable, accrued expenses and
other liabilities ................... 7,063,733 5,706,069
--------- ---------
Total liabilities .............. ...... 53,962,637 54,013,239
---------- ----------
Preferred stock (none issued)
Common stock (4,537,180 shares issued) 45,501 45,209
Paid-in capital ....................... 46,149,857 45,861,352
Distributions in excess of
accumulated earnings ................ (1,170,696)
Treasury stock, at cost(12,951 shares) (155,411) (155,411)
------- -------- --------
Total
stockholders equity ................. 44,869,251 44,965,197
---------- ----------
Total liabilities and
stockholders equity .. $ 98,831,888 $ 98,978,436
============ ============
</TABLE>
The
accompany notes are an integral part of these condensed financial statements.
<TABLE>
<CAPTION>
1
Great Lakes REIT, Inc.
Condensed Statements of Income
For the three months ended March 31, 1996 and 1995
(unaudited)
1996 1995
<S> <C> <C>
Revenues
Rental ...................... $5,521,494 $2,597,827
Interest .................... 22,289 22,163
Total revenues ........ 5,543,783 2,619,990
Expenses
Property operating .......... 2,569,091 1,150,870
General and administrative .. 338,052 164,182
Interest .................... 940,786 354,936
Depreciation and amortization 724,442
325,170
Total expenses ........ 4,572,371 1,995,158
Net income ....................... $ 971,412 $ 624,832
Earnings per common share and
common share equivalent ..... $ 0.21 $ 0.23
Weighted average number of common
shares and common share
equivalents outstanding ..... 4,574,504 2,764,243
</TABLE>
The accompany notes are an integral part of these condensed financial
statements.
2
<TABLE>
<CAPTION>
Great Lakes REIT, INc.
Condensensed Statement of Changes in Stock Equity
For the three months ended March 31, 1996
(Unaudited)
Common Stock
Distribution Total
in Excess of Stock-
Shares Paid-in Accumulated Treasur holders
Outstanding Amount Captial Earnings Stock Equity
<S> <C> <C> <C> <C> <C> <C>
Balance, 1/1/96 .. 4,507,945 $ 45,209 45,861,352 (785,953) (155,411) $ 44,965,197
Exercise of
stock options ... 29,235 292 288,505 -- -- 288,797
Net income ....... -- -- -- 971,412 -- 971,412
Distributions/
dividends payable
($0.30 per share) -- -- -- (1,356,155) -- (1,356,155)
Balance at 3/31/96 4,537,180 $ 45,501 46,149,857 (1,170,696) (155,411) $ 44,869,251
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements. 3
<PAGE>
<TABLE>
<CAPTION>
Great Lakes REIT, Inc.
Condensed Statements of Cash Flows
For the three months ended March 31, 1996 and 1995
(unaudited)
Cash flows from operating activities 1996 1995
<S> <C> <C>
Net income .................................. $ 971,412 624,832
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization .............. 724,442 325,170
Net changes in assets and liabilities:
Other assets ............................. 411,783 52,353
Accounts payable and accrued liabilities . 1,358,452 407,759
Payment of deferred leasing costs ........... (157,903) (58,722)
-------- -------
Net cash provided by operating activities . 3,308,186 1,351,392
--------- ---------
Cash flows from investing activities
Purchase of properties ...................... (1,085,639)
Payment of tenant & building
improvement costs ......................... (780,288) (634,210)
Decrease in earnest money deposits .......... 850,000 --
-------
Net cash used by investing activities ..... (1,015,927) (5,395,973)
---------- ----------
Cash flows from financing activities
Proceeds from sale of common stock .......... -- 3,631,521
Payment of stock issuance costs ............. -- (264,250)
Proceeds from exercise of stock
options ..................................... 288,797 --
Proceeds from bank loans payable ............ -- 1,200,000
Distributions/dividends payable ............. (1,356,155) (709,890)
Repayment of bank loans payable ............. (1,253,148)
Repayment of mortgage notes and bonds payable (155,118) (128,619)
Payment of deferred financing costs ......... (297,865) --
--------
Net cash (used) provided by
financing activities .................... (2,773,489) 2,528,762
---------- ---------
Net (decrease) increase in cash and
cash equivalents .......................... (481,230) (1,515,819)
Cash and cash equivalents,
beginning of quarter ................... 1,302,728 2,676,594
--------- ---------
Cash and cash equivalents,
end of quarter ......................... $ 821,498 $ 1,160,775
=========== ===========
</TABLE>
The
accompanying notes are an integral part of these condensed financial
statements.
4
Great
Lakes REIT, Inc.
Notes to Condensed Financial Statements
March 31, 1996
(Unaudited)
1. Basis of Presentation
The accompanying condensed unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles since the user of these statements is assumed to
read them in conjunction with the most recent year-end audited financial
statements. In the opinion of management, the financial statements contain all
adjustments (which are normal and recurring) necessary for a fair statement of
financial results for the interim periods. For further information, refer to the
financial statements and notes thereto included in the Great Lakes REIT, Inc.
financial statements on Form 10/A for the year ended December 31, 1995.
2.
Properties Acquired in 1996
On January 1, 1996, the Company acquired a 43,300 square foot single-story
office building in Schaumburg, Illinois for an acquisition price of
approximately $1,086,000. .
3.
Related Party Transactions
The following fees will be or have been paid to Equity Partners Ltd., (the
Advisor ) or affiliates. Two directors of the Company were owners of the
Advisor.
<TABLE>
<CAPTION>
Paid Paid Payable
1996 1995 at
March 31. 1996
<S> <C> <C> <C>
Property acquisition fees ............. $ 87,731 $ 70,125 --
Stock offering fees ................... -- 17,922 $ 6,481
Advisory fees ......................... 268,015 129,809 9,991
Property management fees .............. 282,094 97,603 --
Construction management fees .......... 109,661 15,208 10,475
Other fees, primarily legal fees 21,484 10,081 --
</TABLE>
On February 27, 1996, the shareholders of the Company approved the
acquisition of all the outstanding shares of the Advisor in exchange for 100,000
of its shares. This transaction closed on April 1, 1996. In addition, certain
employees of the Advisor received 30,000 restricted shares of the Company. As of
April 1, 1996, the Company absorbed the employees of the Advisor and is now
self-managed and self-advised. All contracts between the Advisor and the Company
were transferred to the Company.
4. Subsequent Events
On April 15, 1996, the Company refinanced its bank line of credit. The new
line of credit allows for maximum borrowings of $35,000,000 subject to certain
loan covenants. Interest on the new line of credit accrues at LIBOR + 1.875% per
annum. Amounts outstanding under the line of credit are due on April 12, 1998.
On April 17, 1996, the Company acquired a 96,000 square foot office
building in Springdale, Ohio, for a contract price of $6,075,000. A portion of
the purchase price was financed using the Company's new bank line of credit.
5. Proforma Financial Statements
On April 1, 1996, the Company acquired Equity Partners Ltd., its Advisor. A
proforma balance sheet as of March 31, 1996 is presented along with proforma
income statements for the quarter ended March 31, 1996 and the year ended
December 31, 1995.
This unaudited Proforma Condensed Balance Sheet is presented as if the
acquisition of Equity Partners Ltd. (the Advisor) by Great Lakes REIT, Inc. (the
Company) had occurred on March 31, 1996. The acquisition has been accounted for
under purchase accounting. In the opinion of the Company, all adjustments
necessary to reflect the acquisition have been made.
This unaudited Proforma Condensed Balance Sheet is presented for
comparative purposes only and is not necessarily indicative of what the actual
financial position of the Company would have been at March 31, 1996, nor does it
purport to represent the future financial position of the Company.
<PAGE>
<TABLE>
<CAPTION>
Proforma Condensed Balance Sheet, March 31, 1996, (unaudited)
Assets Great Lakes Equity Proforma Proforma Proforma at
REIT, Inc. Partners Adjustments Adjustments 3/31/96
(1) Ltd. (2)
<S> <C> <C> <C> <C> <C>
Land .................... 19,046,500 19,046,500
Buildings & improvements 77,160,263 81,860 77,242,123
Less: accumulated
depreciation ...... (3,145,259) ____________ (3,145,259)
93,061,504 81,860 0 0 93,143,364
Cash and cash equiv ..... 821,498 821,498
Other assets ............ 4,948,886 3,661 (462,591)(3) 4,489,956
$ 98,831,888 $ 85,521 0 ($ 462,591) $ 98,454,818
Liabilities &
Stockholders Equity
Accounts payable, accrued
expenses and other
liabilities ............. 7,063,733 8,827 7,072,560
Mortgages payable ....... 46,898,904 __________ 46,898,904
53,962,637 8,827 53,971,464
Stockholders equity:
Preferred stock
Common stock ............ 45,501 1,000 (1,000)(2) 1,000(3) 46,501
Paid-in capital ......... 46,149,857 1,199,000(3) 47,348,857
Treasury stock .......... (155,411) (155,411)
Distributions in excess
of accumulated earnings . (1,170,696) 75,694 (75,694)(2) (1,585,897)(3) (2,756,593)
Total Stockholders Equity 44,869,251 76,694 (76,694) (385,897) 44,483,354
$ 98,831,888 $ 85,521 ($ 76,694) ($ 385,897) $ 98,454,818
</TABLE>
See accompanying notes to proforma condensed balance sheet.
<PAGE>
Notes to Proforma Condensed Balance Sheet, March 31, 1996, (unaudited)
(1) Represents the historical financial position of the Company as of March
31, 1996.
(2) The historical balance sheet of Equity Partners consists of certain
operating equipment, indebtedness associated with the equipment, and
shareholders' equity. The common stock ($1,000) and retained earnings ($75,684)
are eliminated from the Pro Forma Condensed Balance Sheet.
(3) The Company issued 100,000 shares of its common stock on April 1, 1996
to the shareholders of Equity Partners to accomplish the acquisition which in
legal form is a merger of the Company and Equity Partners. The total acquisition
price is as follows:
Common shares issued $1,200,000 (a)
Acquisition costs 462,591 (b)
Total acquisition price $1,662,591
(a) The fair value of The Company's shares is $12 per share. The issuance
of 100,000 shares results in a value assigned to the shares issued of $1.2
million.
(b) Acquisition costs represent investment banking, legal and accounting
services, all incurred prior to March 31, 1996, in connection with the merger.
Acquisition costs include $218,000 paid to EVEREN Securities, Inc. A director of
The Company is employed by EVEREN Securities, Inc. and directed its work
relative to the acquisition.
In addition to the 100,000 common shares of the Company issued to
shareholders of Equity Partners, 30,000 shares of restricted common stock
(valued at $360,000) were issued to certain employees of Equity Partners. Such
amount will be accounted for by the Company as both compensation expense and an
increase in shareholders' equity when the restrictions on the shares are
removed.
(4) The principal assets of Equity Partners are its property management and
advisory contracts with The Company. These contracts are reflected at no value
in the historical balance sheet of Equity Partners. Since these contracts were
terminated upon completion of the acquisition, the total estimated acquisition
costs assigned to these contracts ($1,585,897) are being expensed as contract
termination costs.
<PAGE>
These unaudited Proforma Condensed Statements of Operations are presented
as if the acquisition of the Advisor by the Company had occurred on January 1,
1995. In the opinion of the Company, all necessary adjustments have been made to
reflect the effects of the transaction.
These unaudited Proforma Condensed Statements of Operations are presented
for comparative purposed only and are not necessarily indicative of what the
actual results of operations would have been for the periods presented nor does
it purport to represent results for future periods.
<TABLE>
<CAPTION>
Proforma Condensed Statement of Operations
For the three months ended March 31, 1996
(Unaudited)
Great Lakes Equity Proforma Proforma
REIT, Inc. Partners Ltd. Adjustments
(1) (1) (2)
Revenue
<S> <C> <C> <C> <C>
Rental income $ 5,521,494 $ 5,521,494
Interest and
other income . 22,289 567,620 (555,619)(3) 34,290
5,543,783 567,620 (555,619) 5,555,784
Expenses
Property
Operating .... 2,569,091 144,436 (286,031)(4) 2,427,496
General &
Administrative 338,052 245,930 (193,706)(4) 390,276
Interest ..... 940,786 5,568 946,354
Depreciation &
Amortization . 724,442 6,357 (8,441)(5) 722,358
4,572,371 402,291 (488,178) 4,486,484
Net income ... $ 971,412 165,329 (67,441) $ 1,069,300
Net income per
share $0.21 $0.23
Weighted Average
shares outstanding 4,574,504 4,674,504
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Proforma Condensed Statement of Operations
For the year ended December 31, 1995
(Unaudited)
Great Lakes Equity Proforma Proforma
REIT, Inc. Partners Ltd. Adjustments
(1) (1) (2)
Revenue
<S> <C> <C> <C> <C>
Rental income .... $14,765,108 14,765,108
Interest and other
income ........... 200,818 2,519,443 (2,414,749)(3) 305,512
14,965,926 2,519,443 (2,414,749) 15,070,620
Expenses
Property Operating 6,592,131 378,389 (701,637)(4) 6,268,883
General &
Administrative ... 922,652 1,107,470 (626,818)(4) 1,403,304
Interest ......... 2,296,457 1,637 2,298,094
Depreciation &
Amortization ..... 1,954,885 25,430 (33,372)(5) 1,946,943
11,766,125 1,512,926 (1,361,827) 11,917,224
Net income ....... $ 3,199,801 1,006,517 (1,052,922) $ 3,153,396
Net income per
share $0.88 $0.84
Weighted Average
shares outstanding 3,650,133 3,750,133
</TABLE>
<PAGE>
Great Lakes REIT, Inc.
Notes to Proforma Income Statements
For the year ended December 31, 1995 and the
Three Months ended March 31, 1996
(Unaudited)
(1) These condensed income statements present the historical operations of
Great Lakes REIT, Inc. and Equity Partners for the periods described.
(2) The pro forma condensed income statements do not include the one-time
charge to expense for contract termination costs of $1,585,897. See note (4) to
Notes to Pro Forma Condensed Balance Sheet.
(3) Income earned by Equity Partners from The Company is eliminated from
the pro forma condensed income statements:
<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Acquisition fees ........... $ 787,256 $ 15,750
Advisory fees .............. 626,818 253,494
Property management fees ... 564,369 214,823
Construction management fees 136,907 --
Offering service fees ...... 131,748 --
Other ...................... 167,651 71,552
$2,414,749 $ 555,619
</TABLE>
(4) Expenses incurred by the Company which are paid to Equity Partners and
equipment rentals incurred by Equity Partners which are paid to the Company are
eliminated from the pro forma condensed income statements.
<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Property management fees $564,369 $214,823
Maintenance costs ............... 137,268 71,208
$701,637 $286,031
General and administrative costs:
Advisory fees ................ $626,818 $193,706
</TABLE>
(5) Acquisition, construction management and certain other fees paid by the
Company to Equity Partners are capitalized by the Company into buildings and
improvements. If the acquisition had occurred on January 1, 1995 these fees
would not have been incurred and depreciation and amortization expenses would
decrease by $33,372 and $8,441 in 1995 and 1996 respectively.
ITEM
2.Management s
Discussion and Analysis of Results of Operations and Financial
Condition
Overview
Great Lakes REIT, Inc. (the Company ) a Maryland corporation, was formed on
June 22, 1992 to invest in income-producing real property. The principal
business of the Company is the ownership, management, leasing, renovation, and
acquisition of suburban office and industrial properties located in the Midwest.
At March 31, 1996, the Company owns and operates seventeen properties located in
suburban areas of Chicago, Detroit, Milwaukee, and Minneapolis. The Company
leases office and industrial space to over 200 tenants in a variety of
businesses.
Over the past three years, the Company has expanded its real estate
portfolio through the acquisition of suburban office and office/service center
properties in the Midwest. The Company has financed its growth by the issuance
of additional shares of its common stock and by issuing short and long-term
mortgage notes payable secured by its property assets. Growth in net income and
funds from operations (FFO) for the quarter ended March 31, 1996 as compared to
March 31, 1995 has been due to a combination of improved operations of the
Company s properties and the inclusion of the operating results of properties
acquired in 1995 from the dates of their respective acquisitions.
The Company believes that to facilitate a clear understanding of its
operating results, FFO should be examined in conjunction with the net income as
presented in the Condensed Financial Statements included elsewhere in this Form
10-Q. However, FFO should not be considered as a substitute for net income (as
an indicator of the Company s performance) or as a substitute for cash flows (as
a measure of liquidity).
Results of Operations
In analyzing the operating results for the quarter ended March 31, 1996 of
the Company, the changes in rental income and property operating expenses, from
1995 are due principally to three factors: (1) the addition of operating results
from properties acquired during 1996; (2) the addition of full quarter of
operating results in 1996 of properties acquired in 1995 as compared to the
partial quarter of operating results from the dates of their respective
acquisitions in 1995 and (3) improved operations of properties during 1996 as
compared to 1995.
During the quarter ended March 31, 1996, the Company acquired one new
investment property. The operating results of this property have been included
in the Company s financial statements from the date of its acquisition. In 1995,
the Company acquired 7 properties, and in 1996 a full quarter of operations of
these properties has been included in the Company s financial statements.
A summary of these changes as they impact rental income, and property
operating expenses follows:
<TABLE>
<CAPTION>
Rental income Property
operating
expenses
<S> <C> <C>
Increase due to inclusion
of results of properties acquired
after January 1, 1995 ........... $2,696,000 1,290,000
Increase due to 1996 acquisitions 62,000 56,000
Improved operations in 1996
compared to 1995 ................ 166,000 72,000
Total increase in 1996 ........... $2,924,000 1,418,000
</TABLE>
Interest expense during 1996 increased by $586,000 as the Company had
greater amounts of long and short-term debt outstanding in 1996. This debt was
used to finance the acquisistion of properties acquired in 1995.
General and administrative expenses increased by $174,000 primarily due to
an increase in the advisory fee paid to the Advisor.
Depreciation and amortization increased in 1996 by $359,000 as the Company
incurred these expenses on seventeen properties in 1996 versus ten properties in
1995.
Liquidity and Capital Resources
Cash and cash equivalents as of March 31, 1996 were $821,000, a decrease of
$482,000 as compared to December 31, 1995. The decline is primarily due to the
Company continuing to invest in tenant and other capital improvements at its
properties and the repayment of $1.25 million on its line of credit.
The Company expects to meet its short-term liquidity requirements generally
through its working capital and net cash provided by operating activities. The
Company consideres its cash provided by operating activities to be adequate to
meet operating requirements and to fund the payment of dividends in accordance
with the REIT requirements under the Internal Revenue Code.
The Company expects to meet its long-term liquidity requirements (such as
scheduled mortgage debt maturities, property acquisistions, and significant
capital improvements) by long-term collateralized and uncollateralized
borrowings and the issuance of debt or additional equity securities in the
Company. As of March 31, 1996, the Company had available a $25 million line of
credit from American National Bank and Trust Company of Chicago ( the ANB Line
of Credit ). The amount available from time to time under the line of credit is
subject ot certain requirements and customary financial covenants. The Company
uses the line of credit for property acquisisitons and improvments, working
capital needs and as a source of funds for share redemptions as required. As of
March 31, 1996, the outstanding borrowings under the ANB Line of Credit were
$23,000,000 with $2,000,000 available to borrow.
In April 1996, the Company established a $35 million revolving credit
facility with the First National Bank of Boston (as agent) and repaid
substantially all of the balance outstanding on the ANB Line of Credit. However,
the Company continues to maintain the ANB Line of Credit, but the Company s
borrowing capacity under the ANB Line of Credit has been reduced to
approximately $5 million all of which is currently available.
At March 31, 1996, the Company had committed to a $1.3 million renovation
program at its Oak Brook, Illinois property. The Company expects to fund this
renovation program, in part, through its new Bank of Boston line of credit.
Funds from Operations (FFO)
FFO, as defined by the National Association of Real Estate Investment
Trusts (NAREIT), is a measure of operating performance for real estate
investment trusts and is defined as net income computed in accordance with
generally accepted accounting principles (GAAP), excluding gains and losses from
debt restructuring and sales of property, plus real estate depreciation and
amortization. In addition to the mandated adjustments to net income, the Company
excludes rental income recorded due to the GAAP required 'straight-lining'
adjustment for contractual rent increases included in certain leases. FFO for
the three months ended March 31, 1996 and 1995 is computed as follows:
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Net income ......................... $ 971,412 $ 624,832
Depreciation and amortization ...... 724,442 354,936
FFO-NAREIT definition .............. 1,695,854 979,768
Less: Adjustment for straight-lining
of rents ........................... 86,935 134,436
FFO as reported by the Company ..... $1,608,919 $ 845,332
</TABLE>
ITEM
4. Submission of Matters to Vote of Security Holders
On February 27, 1996, the Company held a special stockholders meeting to
vote upon the following matters:
1. To consider and vote upon a proposal to approve the merger of Equity
Partners Ltd., with and into the Company (the Merger ) pursuant to an Agreement
and Plan of Merger dated as of January 26, 1996 (the Merger Agreement ), among
the Company, Equity Partners Ltd., and the shareholders of Equity Partners, Ltd.
Pursuant to the Merger Agreement, all of the outstanding shares of common stock
of Equity Partners Ltd., without par value, will be converted into an aggregate
of 100,000 shares of common stock, par value of $.01 er share, of the Company.
As an inducement to certain key employees of Equity Partners Ltd., to accept
employment with the Company after the Merger, 30,000 shares of the Company s
common stock will be issued to certain employees of Equity Partners Ltd. on the
date the Merger becomes effective, subject to certain transfer restrictions and
forfeiture provisions.
This matter was approved by shareholders with 3,860,637 shares voting in
favor of the proposal, 62,442 against the proposal, and 584,787 shares withheld
their votes.
2. To consider and vote upon a proposal to approve the transfer of all the
Compnay s real estate to a yet-to-be-created limited partnership, limited
liability company, or other form of entity with similar tax consequences to the
holders of passive equity interest (the Operating Entity ) in exchange for the
initial sole general partnership interest, or other similar interest having all
the management rights and, initially, having substantially all the economic
interest, in the Operating Enitiy (the Reorganization Proposal ). The Company s
Board of Directors anticipates that the Operting Entity will facilitate the
tax-efficient acquisisiton of properties held by their current owners in limited
partnership form. This matter was approved by shareholders with 3,858,125 shares
voting in favor of the proposal, 64,953 against the proposal, and 584,786 shares
withheld their votes.
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.
Great Lakes REIT, Inc.
(Registrant)
August 9, 1996
Date
James Hicks
Senior Vice President & Chief Financial Officer
(Principal Financial Officer)
August 9, 1996
Date Brett A. Brown
Vice President & Controller
(Principal Accounting Officer)
