<PAGE> 1
UNITED STATES
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): October 23 1997
Commission file number 1-12428
OASIS RESIDENTIAL, INC.
(Exact name of Registrant as specified in its Charter)
NEVADA 88-0297457
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
4041 East Sunset Road, Henderson, Nevada 89014
(Address of Principal Executive Offices)
(702) 435-9800
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
PROPERTY ACQUISITION
On October 23, 1997, the Company completed the acquisition of a managing member
interest in a limited liability company ("LLC") that owns the 714 unit Villa
Martinique Apartments in Costa Mesa, California. Neither the Company, any
subsidiary of the Company nor any director or officer of the Company was
affiliated with or had a material relationship with the seller of Villa
Martinique Apartments.
In connection with the acquisition, the LLC issued operating LLC units,
convertible on a 1 for 1 basis into 886,022 shares of the Company's common
stock. The Company also assumed existing tax exempt bond debt of $51.4 million
issued by Orange County, California. The "low floater" bonds mature in 2009
and have an interest rate subject to weekly repricing based upon a spread of
125 basis points over the seven day tax exempt bond floating rate index. The
Company also contributed approximately $1.5 million in cash drawn from the
Company's bank credit facility for transaction and LLC formation costs, thus
resulting in a total initial investment to the Company of approximately $73.5
million.
The Company plans to increase its investment in the community, which has been
renamed Oasis Martinique, by approximately $2.5 million in order to fund a
capital refurbishment program designed to increase net operating income at the
community. The ten year old community was designed by the Newport Beach
architectural firm, McLarand Vasquez, and offers one and two bedroom units in
four story, elevator-served buildings constructed over a two level subterranean
parking garage. The community was 97% occupied at closing. The acquisition fits
with management's strategic diversification plan which calls for increased
investment in Southern California and Denver, matched with selective
dispositions in Las Vegas.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statement under Rule 3-14 of Regulation S-X
(b) Pro Forma Financial Statements
(c) Exhibits
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Accountants.
<PAGE> 4
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.
OASIS RESIDENTIAL, INC.
/s/ SCOTT S. INGRAHAM 11/06/97
----------------------------------- --------
Scott S. Ingraham
President and Chief Operating Officer
/s/ JOHN M. CLAYTON 11/06/97
----------------------------------- --------
John M. Clayton
Senior Vice President and Chief Financial Officer
/s/ MARIANNE K. AGUIAR 11/06/97
----------------------------------- --------
Marianne K. Aguiar
Vice President and Controller
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Oasis Residential, Inc.
We have audited the accompanying Historical Summary of Revenues and Direct
Operating Expenses (the Historical Summary) of Villa Martinique Apartments,
Costa Mesa, California, (the Property) for the year ended December 31, 1996. The
Historical Summary is the responsibility of the Property's owner. Our
responsibility is to express an opinion on the Historical Summary 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 Historical Summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with rules and regulations of the Securities and Exchange Commission, as
described in Note A, and is not intended to be a complete presentation of the
Property's revenues and expenses and may not be comparable to results from
proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the revenues and direct operating expenses, described in Note
A, of Villa Martinique Apartments, Costa Mesa, California, for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
San Francisco, California
June 29, 1997
<PAGE> 6
VILLA MARTINIQUE APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
<TABLE>
<CAPTION>
Year ended
December 31,
1996
----------
<S> <C>
Revenue:
Rental income $6,764,513
Other income 124,020
----------
6,888,533
----------
Direct operating expenses:
On-site management 1,006,342
Real property tax 481,872
Utilities 371,861
Repairs and maintenance 389,149
Other 126,696
----------
2,375,920
----------
Revenue in excess of direct
operating expenses 4,512,613
----------
Mortgage interest 1,839,494
----------
Revenue in excess of direct
operating expenses and mortgage
interest 2,673,119
==========
</TABLE>
The accompanying note is an integral part of this
Historical Summary.
<PAGE> 7
VILLA MARTINIQUE APARTMENTS
HISTORICAL SUMMARY OF REVENUES AND
OPERATING DIRECT EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
A. PROPERTY AND BASIS OF ACCOUNTING:
The accompanying Historical Summary of Revenues and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission and relates to the
operations of Villa Martinique Apartments, located in Costa Mesa,
California with 714 apartment units.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due
from tenants.
The Company is not aware of any material factors relating to the
Property that would cause the reported financial information not to be
indicative of future operating results.
<PAGE> 8
OASIS RESIDENTIAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Villa
Martinique
Historical Apartments Pro forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Real estate assets:
Land $ 93,484 $ 26,240 A $ 119,724
Buildings and improvements 552,500 45,475 A 597,975
Furniture and fixtures 39,515 1,785 A 41,300
--------- --------- ---------
685,499 73,500 758,999
Less accumulated depreciation 53,049 -- 53,049
--------- --------- ---------
632,450 73,500 705,950
Land held for development 3,766 -- 3,766
Construction in progress 109,202 -- 109,202
--------- --------- ---------
Net real estate assets 745,418 73,500 818,918
Cash and cash equivalents 3,397 -- 3,397
Restricted cash 2,976 -- 2,976
Investment in and advances to joint venture 9,574 -- 9,574
Deposits on real estate assets 2,000 -- 2,000
Notes receivable (related party) -- 8,216 B 8,216
Deferred costs and other assets, net 11,408 21 C 11,429
--------- --------- ---------
Total assets $ 774,773 $ 81,737 $ 856,510
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Debt $ 394,274 $ 60,120 D $ 454,394
Resident deposits and prepaid rent 2,066 486 E 2,552
Accounts payable and accrued expenses 6,221 531 F 6,752
--------- --------- ---------
Total liabilities 402,561 61,137 463,698
--------- --------- ---------
Minority Interest -- 20,600 G 20,600
Stockholders' equity:
Preferred stock 42 -- 42
Common stock 162 -- 162
Paid-in capital 386,910 -- 386,910
Distributions in excess of net income (14,902) -- (14,902)
--------- --------- ---------
Total stockholders' equity 372,212 -- 372,212
--------- --------- ---------
Total liabilities and stockholders' equity $ 774,773 $ 81,737 $ 856,510
========= ========= =========
</TABLE>
See notes to the pro forma consolidated financial statements
<PAGE> 9
OASIS RESIDENTIAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
Villa
Martinique
Historical Apartments Pro Forma
---------- ---------- ---------
<S> <C> <C> <C>
Revenue:
Rental income $ 92,843 $ 6,765 H $ 99,608
Other income 3,156 1,356 I 4,512
--------- --------- ---------
Total revenue 95,999 8,121 104,120
--------- --------- ---------
Expenses:
Property operating and maintenance 27,226 1,894 J 29,120
General and administrative 3,230 -- 3,230
Real estate taxes 5,230 482 J 5,712
Interest 15,216 2,464 K 17,680
Interest, non-cash (loan fees and costs) 1,118 -- 1,118
Depreciation and amortization 15,637 1,497 L 17,134
--------- --------- ---------
Total expenses
67,657 6,337 73,994
--------- --------- ---------
Income before gain on sale of real estate assets,
extraordinary item and minority interest 28,342 1,784 30,126
Gain on sale of real estate assets 2,444 -- 2,444
--------- --------- ---------
Income before extraordinary item and minority
interest 30,786 1,784 32,570
Extraordinary item (1,403) -- (1,403)
--------- --------- ---------
Income before minority interest 29,383 1,784 31,167
Minority Interest -- 1,604 M 1,604
--------- --------- ---------
Net income 29,383 180 29,563
--------- --------- ---------
Less preferred dividend requirement 9,372 -- 9,372
--------- --------- ---------
Earnings available for common stockholders $ 20,011 $ 180 $ 20,191
========= ========= =========
Per share amounts:
Income before extraodinary item (net of preferred
dividend requirement) $ 1.32
Less extraordinary item 0.09
--------
Earnings available for common stockholders $1.23
========
Weighted average number of common
shares outstanding 16,237,646
==========
</TABLE>
See notes to the pro forma consolidated financial statements
<PAGE> 10
1. BASIS OF PRESENTATION
The pro forma consolidated financial statements of Oasis Residential,
Inc. (the "Company"), which are unaudited, have been prepared based on
the historical financial statements of the Company, and include the
accounts of the Company and all subsidiaries. The minority interest
represents the separate private ownership of interest in the limited
liability company ("LLC") which own the 714 unit Villa Martinique
Apartments. The pro forma consolidated balance sheet has been prepared
as if the acquisition of a managing member interest in the LLC had
occurred on December 31, 1996. The pro forma consolidated statements of
operations for the twelve months ended December 31, 1996, has been
prepared as if the above mentioned events had occurred on January 1,
1996. In management's opinion, all adjustments necessary to reflect the
effects of these transactions have been made. The pro forma financial
statements should be read in conjunction with the historical financial
statements of the Company.
The unaudited pro forma combined financial statements are not
necessarily indicative of what the actual financial position would have
been at December 31, 1996 or the actual results of operations for the
year ended December 31, 1996 had the acquisition occurred on the assumed
dates discussed above, nor does it purport to present the future
financial position or results of operations of the Company.
2. PRO FORMA ADJUSTMENTS
A) Additional real estate assets is attributable to the acquisition
of the Villa Martinique Apartments for $72,000,000 plus
acquisition costs incurred by the Company of approximately
$1,500,000.
B) The notes receivable (related party) results from loans made by
the Company to the holders of units in the LLC.
C) Increase in other assets is attributable to prepaid expenses and
refundable deposits from the acquisition of the Villa Martinique
Apartments.
D) Increase in debt is attributable to the assumption of
$51,400,000 of tax exempt bond debt in connection with the
acquisition of the Villa Martinique Apartments, as well as cash
used to fund the notes receivable (related party) as described
in item B) above.
E) Increase in resident deposits and prepaid rent is attributable
to resident deposits and prepaid rent from the acquisition of
the Villa Martinique Apartments.
F) Increase in accounts payable and accrued expenses is
attributable to accrued real estate taxes, bond interest,
utilities and other accrued expenses from the acquisition of the
Villa Martinique Apartments.
G) Minority interest represents the member interest in the LLC held
by outside parties. In connection with the acquisition, the LLC
issued to the outside parties, LLC units in the amount of
886,022 units, each of which is exchangeable for 1 share of the
Company's common stock.
H) Additional rental revenue is attributable to the acquisition of
the Villa Martinique Apartments.
I) Additional other revenue is attributable to the acquisition of
the Villa Martinique Apartments, as well as to interest income
earned by the Company on the notes receivable (related party).
Interest on the notes receivable (related party) accrues at an
interest rate of 15% per annum, which may be adjusted downward
under certain circumstances.
J) Additional property operating expense and real estate tax
expense is attributable to the acquisition of the Villa
Martinique Apartments.
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K) Additional interest expense is attributable to the interest
incurred on the tax-exempt bonds assumed in connection with
the acquisition ($51,400,000 at an average interest rate of
5%), and to the interest incurred on funds obtained from the
Company's bank credit facility which were used to fund the
notes receivable (related party).
L) Depreciation expense attributable to the acquisition of the
Villa Martinique Apartments has been computed using the
straight-line method.
M) Minority interest represents a deduction in the consolidated
income statement for the net income of the LLC that does not
accrue to the Company.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Oasis Residential, Inc. on Form S-3 (File No. 333-22901) and Form S-8 (File
No. 333-07317) of our report dated June 29, 1997, on our audit of the Historical
Summary of Revenues and Direct Operating Expenses of Villa Martinique Apartments
for the year ended December 31, 1996, which report is included in this Current
Report on Form 8-K.
/s/ COOPERS & LYBRAND L.L.P.
-------------------------------
Coopers & Lybrand L.L.P.
San Francisco, California
November 5, 1997
