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 6, 1998
(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
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITIONS
As previously reported in a Current Report on Form 8-K filed December 23, 1997
on December 10, 1997, Great Lakes REIT, Inc. through Great Lakes REIT L.P.
(collectively the "Company") acquired the Tri Atria office building, a
two-story, Class-A office building located at 32255 Northwestern Highway,
Farmington Hills, Michigan.
As previously reported in a Current Report on Form 8-K filed December 30, 1997,
on December 30, 1997, Great Lakes REIT, Inc. through Great Lakes REIT L.P.
(collectively the "Company") acquired 777 Eisenhower Parkway, Ann Arbor,
Michigan, a ten-story office building located within the Briarwood Mall Corridor
of Ann Arbor, Washtenaw County, Michigan.
TERMS OF PURCHASE
The Tri Atria office building was purchased from an unaffiliated third party
for approximately $24,300,000. Funds for the purchase came from the Company's
bank line of credit.
777 Eisenhower Parkway was purchased from an unaffiliated third party for
approximately $16,600,000. Funds for the purchase came from the Company's bank
line of credit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The required financial statements for the Tri Atria office building is attached
as Exhibit A.
The required financial statements for 777 Eisenhower Parkway is attached as
Exhibit B.
The required proforma financial statements for both Tri Atria and 777 Eisenhower
are attached as Exhibit C.
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
<PAGE>
Exhibit A
Statements of Revenue and Certain Expenses
Tri-Atria Office Building
Year Ended December 31, 1996
with Report of Independent Auditors
<PAGE>
Report of Independent Auditors
The Board of Directors
Great Lakes REIT, Inc.
We have audited the accompanying Statement of Revenue and Certain Expenses of
Tri-Atria Office Building (the Property) for the year ended December 31, 1996.
The Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free
from material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and the significant estimates made by management, as well as evaluating the
overall presentation of the Statement of Revenue and Certain Expenses. We
believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission, for inclusion in the Current Report on Form 8-K of Great
Lakes REIT, Inc. as described in Note 2, and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 2 of the Property for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 17, 1997
<PAGE>
<TABLE>
Tri-Atria Office Building
Statements of Revenue And Certain Expenses
<CAPTION>
January 1,
1997 through
Year Ended December 10,
December 31, 1997
1996 (Unaudited)
---------------------- ----------------------
<S> <C> <C>
Revenue
Base rents $3,889,024 $3,595,055
Tenant reimbursements 306,591 272,650
Other income 49,803 72,820
---------------------- ----------------------
Total revenue 4,245,418 3,940,525
---------------------- ----------------------
Expenses
Real estate taxes 518,086 425,228
General operating 143,939 148,635
Utilities 438,921 362,520
Cleaning and landscaping 235,388 238,982
Repairs and maintenance 253,225 256,426
Management fee 121,242 109,101
---------------------- ----------------------
Total expenses 1,710,801 1,540,892
---------------------- ----------------------
Revenue in excess of certain expenses $2,534,617 $2,399,633
====================== ======================
</TABLE>
See accompanying notes.
<PAGE>
Tri-Atria Office Building
Notes to Statements of Revenue and Certain Expenses
1. Business
The accompanying Statements of Revenue and Certain Expenses relate to the
operations of Tri-Atria Office Building (the Property), a 2-story office
building property located in Farmington Hills, Michigan. The Property was
acquired on December 10, 1997 by a partnership controlled by Great Lakes REIT,
Inc. (Great Lakes).
As of December 10, 1997 and December 31, 1996, the Property was 98% leased with
twenty-five and twenty-four tenants, respectively. Two tenants accounted for
approximately 72% and 66% of base rents at December 10, 1997 and December 31,
1996, respectively.
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, for inclusion in the Current Report on Form 8-K of Great
Lakes. 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 on a straight-line basis over the terms of the related
leases. 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 periods. Actual results could differ from those
estimates.
Unaudited Interim Statement
In the opinion of management, the interim financial statement reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All adjustments are of a normal, recurring nature.
<PAGE>
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
basis, as defined.
4. Management Agreement
During the period from January 1, 1997 to December 10, 1997 and for the year
ended December 31, 1996, the Property was managed by a third-party management
company. The management agreement provided for the greater of 3% of gross
monthly receipts or $5,000.
<PAGE>
Exhibit B
Statements of Revenue and Certain Expenses
777 Eisenhower Plaza
Year Ended December 31, 1996
with Report of Independent Auditors
<PAGE>
Report of Independent Auditors
The Board of Directors
Great Lakes REIT, Inc.
We have audited the accompanying Statement of Revenue and Certain Expenses of
777 Eisenhower Plaza (the Property) for the year ended December 31, 1996. The
Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free
from material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and the significant estimates made by management, as well as evaluating the
overall presentation of the Statement of Revenue and Certain Expenses. We
believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission, for inclusion in the Current Report on Form 8-K of Great
Lakes REIT, Inc. as described in Note 2, and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 2 of the Property for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
<PAGE>
<TABLE>
777 Eisenhower Plaza
Statements of Revenue And Certain Expenses
<CAPTION>
January 1,
1997 through
Year Ended December 17,
December 31, 1997
1996 (Unaudited)
---------------------- ----------------------
<S> <C> <C>
Revenue
Base rents $4,341,296 $3,989,970
Tenant reimbursements 499,469 594,970
Other income 42,968 25,611
---------------------- ----------------------
Total revenue 4,883,733 4,610,551
---------------------- ----------------------
Expenses
Real estate taxes 523,302 478,030
General operating 300,337 314,470
Utilities 812,255 727,820
Cleaning and landscaping 335,215 292,515
Repairs and maintenance 272,928 307,297
Management fee 137,316 136,193
---------------------- ----------------------
Total expenses 2,381,353 2,256,325
---------------------- ----------------------
Revenue in excess of certain expenses $2,502,380 $2,354,226
====================== ======================
</TABLE>
See accompanying notes.
<PAGE>
777 Eisenhower Plaza
Notes to Statements of Revenue and Certain Expenses
1. Business
The accompanying Statements of Revenue and Certain Expenses relate to the
operations of 777 Eisenhower Plaza (the Property), a 10-story office building
property located in Ann Arbor, Michigan. The Property was acquired on December
17, 1997 by a partnership controlled by Great Lakes REIT, Inc. (Great Lakes).
As of December 17, 1997 and December 31, 1996, the Property was 93% and 96%
leased with twenty-four and thirty-four tenants, respectively. Two tenants
accounted for approximately 66% and 55% of base rents at December 17, 1997 and
December 31, 1996, respectively.
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, for inclusion in the Current Report on Form 8-K of Great
Lakes. 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 on a straight-line basis over the terms of the related
leases. 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 periods. Actual results could differ from those
estimates.
Unaudited Interim Statement
<PAGE>
In the opinion of management, the interim financial statement reflects all
adjustments necessary for a fair presentation of the results of the interim
period. All adjustments are of a normal, recurring nature.
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
basis, as defined.
4. Management Agreement
During the period from January 1, 1997 to December 17, 1997 and for the year
ended December 31, 1996, the Property was managed by a third-party management
company. The management agreement provided for the greater of 3% of gross
monthly receipts or $5,000.
<PAGE>
Exhibit C
<TABLE>
Great Lakes REIT, Inc.
Consolidated Pro Forma Statement of Income
For the Year Ended December 31, 1997
(Unaudited)
<CAPTION>
Previous Pro Forma Tri-Atria and
12/31/97 1997 Pro Forma Prior to these 777 Eisenhower Company
As reported (1) Acquisitions Adjustments Acquisitions Acquisitions (2) Pro Forma
Revenues
<S> <C> <C> <C> <C> <C> <C>
Rental $36,231,301 5,232,374 41,463,675 7,585,025 $49,048,700
Reimbursements 10,688,046 1,702,428 12,390,474 867,620 13,258,094
Interest and other 744,514 44,793 789,307 98,431 887,738
------------------------------------------------------------------------------------------------
Total revenues 47,663,861 6,979,595 54,643,456 8,551,076 63,194,532
------------------------------------------------------------------------------------------------
Expenses
Real estate taxes 7,702,203 1,322,244 9,024,447 903,258 9,927,705
Other property operating 11,969,092 1,963,218 13,932,310 2,893,959 16,826,269
General and administrative 3,379,121 3,379,121 3,379,121
Interest 4,308,173 3,174,853 (3,622,836)(5) 3,860,190 2,651,680 (4) 6,511,870
Depreciation and amortization 8,199,846 885,135 9,084,981 790,496 (3) 9,875,477
------------------------------------------------------------------------------------------------
Total expenses 35,558,435 7,345,451 (3,622,836) 39,281,050 7,239,393 46,520,443
------------------------------------------------------------------------------------------------
Net income $12,105,426 (365,856) 3,622,836 15,362,406 1,311,683 $16,674,089
================================================================================================
Earnings per common share $0.92 $1.05
=================== ==================
Weighted average common
shares outstanding 13,140,124 15,841,027
=================== ==================
Diluted earnings per common
share $0.91 $1.04
=================== ==================
Weighted average common
shares and common share
equivalents outstanding 13,304,540 16,005,443
=================== ==================
See accompanying notes to pro forma consolidated statement of income
<PAGE>
<FN>
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
1. Represents the historical results of the Company.
2. Represents the unaudited historical results of operations of Tri-Atria and 777 Eisenhower for the period
January 1, 1997 to December 10, 1997 and December 17, 1997 respectively.
3. Depreciation is computed on a straight-line basis over 40 years for the period January 1, 1997 to
December 10, 1997 for Tri-Atria, and January 1, 1997 to December 17, 1997 for 777 Eisenhower.
4. Interest expense ($2,651,680) is computed on the amount borrowed ($25,000,000) on the Companys line of
credit to acquire Tri-Atria and 777 Eisenhower for the period January 1, 1997 to December 31, 1997 at
7.25% per annum, the average interest rate during the period. Also included in interest expense is the
amount calculated on the mortgage loan ($12,125,000) for Tri-Atria for the period January 1, 1997 to
December 31, 1997 at 7.08% per annum, the fixed interest rate for the note.
5. Interest expense has been reduced by $3,622,836 which represents interest paid on debt retired with the
proceeds of the Offering.
</FN>
</TABLE>
