<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
[X] Current Report Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
February 26, 1997
(Date of Report)
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)
823 Commerce Drive, Suite 300, Oak Brook, IL 60521
(Address of principal executive offices) (Zip Code)
(630) 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
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITIONS
As previously reported in a Current Report on Form 8-K filed December 20, 1996,
on December 13, 1996, Great Lakes REIT, Inc. (the "Company") acquired a fee
simple interest in a portion of a 320,000 rentable square foot four-story, class
A office building located at 2550 University Avenue West, St. Paul, Minnesota
(the "Building"). Originally constructed in 1916, the Building was fully
redeveloped and renovated in 1985. The portion of the Building acquired by the
Company ("Court International II") consists of approximately 200,000 rentable
square feet and was approximately 92% occupied at acquisition. The Building
includes two four-story atriums along with a Gothic
tower which rises 140 feet and serves as the centerpiece of the Building.
Amenities at Court International II include an underground garage with 226
covered parking spaces, a casual sit-down restaurant, a deli, a
sundries/newsstand shop and a building conference room. The balance of the
Building not acquired by the Company (approximately 120,000 square feet) is
owned by an unaffiliated third party.
TERMS OF PURCHASE
Court International II was purchased from an unaffiliated third party for
approximately $14.3 million. Funds for the purchase came from a borrowing under
the Company's existing secured line of credit with the First National Bank of
Boston (as agent).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The required financial statement for Court International II is attached as
Exhibit A. The required pro forma financial statement as attached as Exhibit B.
No information is required under Items 1,3,4, and 6, and these items have
therefore been omitted.
By: /s/ Richard L. Rasley
---------------------------------
Richard L. Rasley, Secretary
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Exhibit A
Statements of Revenue and
Certain Expenses
Court International II
PERIOD FROM JANUARY 1, 1996 TO
DECEMBER 13, 1996 AND YEAR ENDED DECEMBER 31, 1995
WITH REPORT OF INDEPENDENT AUDITORS
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REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Great Lakes REIT, Inc.
We have audited the Statements of Revenue and Certain Expenses of Court
International II (the Property) for the period from January 1, 1996 to December
13, 1996 and for the year ended December 31, 1995. The Statements of Revenue
and Certain Expenses are the responsibility of the Property's management. Our
responsibility is to express an opinion on the Statements of Revenue and Certain
Expenses based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the Statements of Revenue and Certain
Expenses are free from material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures made in the
Statements of Revenue and Certain Expenses. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the Statements of Revenue and
Certain Expenses. We believe that our audits provide a reasonable basis for our
opinion.
The accompanying Statements of Revenue and Certain Expenses were prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission as described in Note 2 and are not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statements of Revenue and Certain Expenses referred to above
present fairly, in all material respects, the revenue and certain expenses of
the Property described in Note 2 for the period from January 1, 1996 to December
13, 1996 and for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 18, 1996
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COURT INTERNATIONAL II
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
JANUARY 1, 1996 YEAR ENDED
TO DECEMBER 13, DECEMBER 31,
1996 1995
---------------- ------------
REVENUE
Base rents $ 1,582,702 $ 1,468,430
Tenant reimbursements 1,145,017 1,052,313
Other income 242,972 282,029
---------------- ------------
Total revenue 2,970,691 2,802,772
EXPENSES
Real estate taxes 417,735 433,500
General operating 214,401 241,413
Utilities 245,101 259,420
Cleaning and landscaping 292,394 272,751
Repairs and maintenance 120,834 158,786
Management fee 72,257 65,290
Insurance 33,349 44,016
---------------- ------------
Total expenses 1,396,071 1,475,176
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Revenue in excess of certain expenses $ 1,574,620 $ 1,327,596
---------------- ------------
---------------- ------------
See accompanying notes.
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COURT INTERNATIONAL II
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
NOTE 1 BUSINESS
The accompanying Statements of Revenue and Certain Expenses relate to the
operations of Court International II (the Property), a portion of a four-story
office building property located in St. Paul, Minnesota. The Property was
acquired on December 13, 1996, by Great Lakes REIT, Inc. (Great Lakes).
As of December 13, 1996 and December 31, 1995, the Property had thirty-three and
twenty-eight tenants, respectively. One tenant (U.A.F.P.) accounted for
approximately 15% and 16% of total revenue at December 13, 1996 and December 31,
1995, respectively.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying Statements of Revenue and Certain Expenses were prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. The statements are not representative of the actual
operations of the Property for the periods presented nor indicative of future
operations as certain expenses, primarily depreciation and amortization, which
may not be comparable to the expenses expected to be incurred by Great Lakes in
future operations of the Property, have been excluded.
REVENUE AND EXPENSE RECOGNITION
Revenue is recognized in the period in which it is earned. Expenses are
recognized in the period in which they are incurred.
USE OF ESTIMATES
The preparation of the Statements of Revenue and Certain Expenses in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from these
estimates.
NOTE 3 RENTALS
The Property has entered into tenant leases that provide for tenants to share in
the operating expenses and real estate taxes in relation to their pro rata share
as defined.
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COURT INTERNATIONAL II
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(CONTINUED)
NOTE 4 MANAGEMENT AGREEMENT
During the period from January 1, 1996 to December 13, 1996 and for the year
ended December 31, 1995, the Property was managed by a third-party management
company. The management agreement provided for the greater of 2.5% of gross
monthly rent or $2,850 monthly.
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Exhibit B
<TABLE>
<CAPTION>
Great Lakes REIT, Inc.
Pro Forma Balance Sheet (unaudited) Historical Acquisition of Acquisition of Proforma
09/30/96 Long Lake Court 09/30/96
Assets (unaudited) (1) Crossing (2) International II(3) (4)
<S> <C> <C> <C> <C>
Properties:
Land $21,491,500 $2,500,000 2,145,000 $26,136,500
Buildings, improvements, and equipment 94,623,932 13,600,416 12,164,626 120,388,974
Less accumulated depreciation 4,673,912 4,673,912
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111,441,520 16,100,416 14,309,626 141,851,562
Cash and cash equivalents 816,207 816,207
Real estate tax escrows 753,197 753,197
Rents receivable 1,434,547 1,434,547
Deferred costs 2,825,225 2,825,225
Other assets 451,702 14,032 (68,409) 397,325
------------------------------------------------------------
Total assets $117,722,398 $16,114,448 $14,241,217 $148,078,063
------------------------------------------------------------
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Liabilities and stockholders' equity
Bank loan payable $27,602,368 $16,042,587 13,965,358 $57,610,313
Mortgage loans payable 18,158,065 18,158,065
Bonds payable 5,235,000 5,235,000
Accounts payable and accrued liabilities 911,960 199,773 1,111,733
Accrued real estate taxes 2,905,317 2,905,317
Prepaid rent 690,081 690,081
Security deposits 424,661 71,861 76,086 572,608
Distributions/dividends payable 1,638,881 1,638,881
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Total liabilities 57,566,333 16,114,448 14,241,217 87,921,998
------------------------------------------------------------
Preferred Stock 735 735
Common Stock 63,167 63,167
0
Paid-in-capital 65,435,578 65,435,578
Distributions in excess of accumulated earnings (3,607,528) (3,607,528)
Employee stock loans (1,247,351) (1,247,351)
Deferred compensation (333,125) (333,125)
Treasury stock (155,411) (155,411)
------------------------------------------------------------
Total stockholders' equity 60,156,065 0 0 60,156,065
------------------------------------------------------------
Total liabilities and stockholders' equity $117,722,398 $16,114,448 $14,241,217 $148,078,063
------------------------------------------------------------
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</TABLE>
See accompanying notes to pro forma balance sheet.
Notes to pro forma balance sheet
(1) Represents the historical financial position of the Company at September
30, 1996.
(2) Represents the purchase price paid for Long Lakes Crossing, net of any
other assets acquired or liabilities assumed. The purchase price was assumed
to be funded by borrowings on the Company's line of credit.
(3) Represents the purchase price paid for Court International II, net of
any other assets acquired or liabilities assumed. The purchase price was
assumed to be funded by borrowings on the Company's line of credit.
(4) The unaudited pro forma balance sheet as of September 30, 1996 gives
effect to the acquisition of Long Lake Crossing and Court International II as
of September 30, 1996 and is not indicative of the financial position of the
Company had these acquisitions taken place on that date nor does it purport
to project the Company's financial position at any future date.
<PAGE>
<TABLE>
<CAPTION>
Great Lakes REIT, Inc.
Pro Forma Statements of Income (unaudited)
Historical Acquisition of Acquisition of
Nine months Long Lake Court Pro forma Pro forma
ended 9/30/96 Crossing (2) International II Adjustments Nine months
(unaudited) (1) (3) (4) ended 9/30/96 (7)
<S> <C> <C> <C> <C> <C>
Revenues
Rental $17,534,220 2,095,821 2,122,433 $21,752,474
Interest and other 78,366 189,056 267,422
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Total revenues 17,612,586 2,095,821 2,311,489 0 22,019,896
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Expenses
Real estate taxes 2,907,224 254,043 325,039 3,486,306
Other property operating 4,691,157 688,081 761,241 6,140,479
General and administrative 1,387,097 1,387,097
Interest 2,865,533 1,687,947 4,553,480
Depreciation and amortization 2,727,414 483,095 3,210,509
Contract termination 1,273,307 1,273,307
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Total expenses 15,851,732 942,124 1,086,280 2,171,041 20,051,177
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Net income $1,760,854 $1,153,697 $1,225,209 ($2,171,041) $1,968,718
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Earnings per common share and common share $0.35 $0.39
equivalent
----------- ----------
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Weighted average number of common shares and
common share equivalents outstanding 5,081,833 5,081,833
----------- ----------
----------- ----------
See accompanying notes to pro forma balance statements of income.
Historical Acquisition of Acquisition of
Year Long Lake Court Pro forma Pro forma
ended 12/31/95 Crossing (5) International II Adjustments Year
(1) (6) (4) ended 12/31/95 (7)
Revenues
Rental $14,765,108 2,714,950 2,520,653 $20,000,711
Interest and other 200,818 282,029 482,847
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Total revenues 14,965,926 2,714,950 2,802,682 0 20,483,558
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Expenses
Real estate taxes 2,624,588 340,696 433,500 3,398,784
Other property operating 3,967,543 661,746 1,041,676 5,670,965
General and administrative 922,652 922,652
Interest 2,296,457 2,250,596 4,547,053
Depreciation and amortization 1,954,885 644,126 2,599,011
Contract termination
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Total expenses 11,766,125 1,002,442 1,475,176 2,894,722 17,138,465
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Net income $3,199,801 $1,712,508 $1,327,506 ($2,894,722) $3,345,093
-------------------------------------------------------------------------
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Earnings per common share and common share $0.88 $0.66
equivalent
----------- ----------
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Weighted average number of common shares and
common share equivalents outstanding 3,650,133 5,081,833
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to pro forma statements of income.
Notes to pro forma statements of income.
(1) Represents the historical operations of the Company for the periods
described.
(2) Represents the estimated, unaudited historical operations of Long Lake
Crossing from January 1, 1996 to September 30, 1996 based upon the audited
results of operations for the period January 1, 1996 to November 22, 1996.
(3) Represents the estimated, unaudited historical operations of Court
International II from January 1, 1996 to September 30, 1996 based upon the
audited results of operations for the period January 1, 1996 to December 13,
1996.
(4) Depreciation on buildings is computed on a straight-line basis over 40
years for the periods described. Interest expense is computed on the amount
assumed to be borrowed to acquire this property at an interest rate of 7.5%
per annum for the periods described.
(5) Represents the historical operations of Long Lake Crossing for the year
ended December 31, 1995.
(6) Represents the historical operations of Court International II for the
year ended December 31, 1995.
(7) The unaudited pro forma statements of income for the periods described
give effect to the acquisition of Court International II and Long Lake
Crossing as of January 1, 1995 and are not indicative of the results of
operations of the Company had this acquisition taken place on that date nor
do they purport to project the Company's results of operations at any future
date.
