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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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 29, 1997
-----------------------
Prime Retail, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 0-23616 52-1836258
- ------------------------------- ---------------- -----------------------
(State of other jurisdiction of (Commission File (IRS Employer
incorporation) File Number) Identification No.)
100 East Pratt Street
Nineteenth Floor, Baltimore, Maryland 21202
- ---------------------------------------- -----------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (410) 234-0782
----------------
No Change
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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<PAGE>
PRIME RETAIL, INC.
ITEM 2: Acquisition or Disposition of Assets
As reported on Form 8-K filed with the Securities and Exchange
Commission on October 29, 1997, Prime Retail, Inc. (the "Company") acquired
Tidewater Outlet Mall, Manufacturer's Outlet Mall, Kittery Outlet Village (the
"Kittery Properties") and Latham Factory Outlet Center (the "Latham Property"),
for an aggregate purchase price of $26.0 million. These centers were purchased
by the Company from an unrelated third party. The Company financed the purchase
with proceeds from a recently completed $161.0 million common stock offering.
As reported on Form 8-K filed with the Securities and Exchange
Commission on December 3, 1997, the Company acquired Niagara International
Factory Outlets (the "Niagara Property") and Shasta Factory Stores (the "Shasta
Property") for a combined purchase price of $101.0 million. The Company financed
the purchase by assuming existing mortgage financing on the Niagara Property of
approximately $31.5 million and with proceeds from recently completed equity
offerings and corporate financings.
Financial statements for the acquisition of the Kittery Properties and
the Latham Property (collectively, the "Kittery Acquired Properties"), and the
Niagara Property and Shasta Property (collectively, the "Niagara Acquired
Properties") are included in this Form 8-K/A.
ITEM 5: Other Events
None
<PAGE>
ITEM 7: Financial Statements and Exhibits
The following financial statements, unaudited pro forma financial
information and exhibits are filed as part of this report:
A. Financial statements of the real estate acquired, prepared pursuant to
Rule 3.14 of Regulation S-X:
PAGE
----
(1)(i) Statements of revenue and certain expenses of the
Kittery Acquired Properties
Report of Independent Auditors 7
Statements of Revenue and Certain Expenses
for the year ended December 31, 1996
(Audited)and for the nine months ended
September 30, 1997 (Unaudited) 8
Notes to the Statements of Revenue and
Certain Expenses 9
(ii) Statements of revenue and certain expenses of the
Niagara Acquired Properties
Report of Independent Auditors 11
Statements of Revenue and Certain Expenses
for the year ended December 31, 1996
(Audited)and for the nine months ended
September 30, 1997 (Unaudited) 12
Notes to the Statements of Revenue and
Certain Expenses 13
B. Unaudited pro forma financial information required pursuant to Article
11 of Regulation S-X:
PAGE
----
(1) Pro Forma Consolidated Balance Sheet--
September 30, 1997 15
Pro Forma Consolidated Statement of Operations--
Year ended December 31, 1996 16
Pro Forma Consolidated Statement of Operations--
Nine months ended September 30, 1997 17
Notes to Pro Forma Consolidated Financial Statements 18
The unaudited pro forma consolidated balance sheet as of
September 30, 1997 is based on the unaudited historical financial
statements of the Kittery Properties, the Latham Property, the Niagara
Property, the Shasta Property, and the Company after giving effect to
the acquisitions as described in Item 2 (the "Acquisitions") and
certain adjustments as described in the accompanying notes to the
unaudited pro forma financial statements.
The unaudited pro forma consolidated statement of operations for
the year ended December 31, 1996 is based, in part, on the audited
historical statements of revenue and certain expenses of the Kittery
Acquired Properties, the Niagara Acquired Properties and the audited
historical financial statements of the Company
<PAGE>
after giving effect to the Acquisitions and certain adjustments as
described in the accompanying notes to the unaudited pro forma
financial statements.
The unaudited pro forma consolidated statement of operations for
the nine months ended September 30, 1997 is based, in part, on the
unaudited historical statements of revenue and certain expenses of the
Kittery Acquired Properties, the Niagara Acquired Properties, and the
unaudited financial statements of the Company after giving effect to
the Acquisitions and certain adjustments as described in the
accompanying notes to the unaudited pro forma financial statements.
The unaudited pro forma financial statements have been prepared
by the Company based upon the statements of revenue and certain
expenses of the Kittery Acquired Properties, and the Niagara Acquired
Properties (filed with this report under Item 7(a)). These unaudited
pro forma financial statements may not be indicative of the results
that actually would have occurred if the Acquisitions had been in
effect on the dates indicated or which may be obtained in the future.
The unaudited pro forma financial statements should be read in
conjunction with the statements of revenue and certain expenses and
notes of the Kittery Acquired Properties, the Niagara Acquired
Properties, the financial statements of the Company included in its
Annual Report on Form 10-K for the year ended December 31, 1996 and the
unaudited financial statements of the Company on Form 10-Q for the nine
months ended September 30, 1997.
C. Exhibits in accordance with the provisions of Item 601 of Regulation
S-K:
Exhibit 23. Consent of Independent Auditors 19
<PAGE>
PRIME RETAIL, INC.
SIGNATURE
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.
PRIME RETAIL, INC.
------------------
(Registrant)
Dated: December 31, 1997
By: /s/ Robert P. Mulreaney
-----------------------
Name: Robert P. Mulreaney
Title: Executive Vice President, Chief
Financial Officer and Treasurer
<PAGE>
EXHIBIT INDEX
Exhibit
-------
Consent of Independent Auditors 23
<PAGE>
Report of Independent Auditors
To Board of Directors, Prime Retail Inc.
We have audited the statement of revenue and certain expenses of the Kittery
Acquired Properties (the "Properties") as described in Note 2 for the year ended
December 31, 1996. This statement of revenue and certain expenses is the
responsibility of the Properties' management. Our responsibility is to express
an opinion on this 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 of
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 of the statement of revenue and certain expenses 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 as described in Note 2 and is not intended to be a complete
presentation of the Properties' 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 Kittery Acquired Properties for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Baltimore, Maryland
December 3, 1997
<PAGE>
Kittery Acquired Properties
Statements of Revenue and Certain Expenses
Nine months ended
Year ended September 30,
December 31, 1996 1997
-------------------- --------------------
(Unaudited)
Revenue:
Base rents $3,012,490 $2,195,109
Tenant reimbursements 722,297 577,618
Percentage rents 285,435 151,060
-------------------- --------------------
Total revenue 4,020,222 2,923,787
Expenses:
Property operating 876,502 738,068
Real estate taxes 417,447 268,548
-------------------- --------------------
Total expenses 1,293,949 1,006,616
-------------------- --------------------
Revenue in excess of certain
expenses $2,726,273 $1,917,171
==================== ====================
See accompanying notes.
<PAGE>
Kittery Acquired Properties
Notes to the Statements of Revenue and Certain Expenses
Note 1 Business
The accompanying statements of revenue and certain expenses include the combined
operations of the following factory outlet center properties (the "Properties")
owned by a party unaffiliated with Prime Retail, Inc.
Approximate
Gross Leasable
Property Name Location Area (sq. ft.)
- ------------------------- ---------------- ---------------
Latham Outlet Village Latham, New York 43,400
Tidewater Mall Kittery, Maine 77,500
Manufacturers Outlet Mall Kittery, Maine 17,800
Kittery Outlet Village Kittery, Maine 25,400
---------------
164,100
===============
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 Properties for the periods presented nor indicative of future
operations as certain expenses, consisting of interest and financing expense,
depreciation, management fees, professional fees, lease buy-out fees and broker
fees have been excluded.
A summary of unaudited expenses is as follows:
Year ended Nine months ended
December 31, 1996 September 30, 1997
------------------- --------------------
Interest and financing expenses $835,135 $655,440
Depreciation and amortization 588,908 458,575
Management fees 80,184 171,799
Professional fees 28,895 -
Lease buy-out expense 20,918 -
Broker fees 8,451 -
------------------- --------------------
Total unaudited expenses $1,562,491 $1,285,814
=================== ====================
<PAGE>
Kittery Acquired Properties
Notes to the Statements of Revenue and Certain Expenses (concluded)
Note 2 Summary of Significant Accounting Policies (continued)
Revenue Recognition
Rental revenue is recognized as income in the period earned.
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 may differ from those
estimates.
Interim Unaudited Financial Information
The accompanying unaudited statement of revenue and certain expenses has been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, all adjustments, consisting only of
recurring accruals considered necessary for the fair presentation of the
accompanying financial statement for the interim period ended September 30, 1997
have been included. Operating results for the interim period are not necessarily
indicative of the results which may be expected for a full fiscal year.
Note 3 Rentals
The Properties have entered into tenant leases with terms from one to ten years.
The leases provide for tenants to share in increases in operating expenses and
real estate taxes in excess of base amounts, as defined.
<PAGE>
Report of Independent Auditors
To Board of Directors, Prime Retail Inc.
We have audited the statement of revenue and certain expenses of the Niagara
Acquired Properties (the "Properties") as described in Note 2 for the year ended
December 31, 1996. This statement of revenue and certain expenses is the
responsibility of the Properties' management. Our responsibility is to express
an opinion on this 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 of
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 of the statement of revenue and certain expenses 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 as described in Note 2 and is not intended to be a complete
presentation of the Properties' 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 Niagara Acquired Properties for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Baltimore, Maryland
December 13, 1997
<PAGE>
Niagara Acquired Properties
Statements of Revenue and Certain Expenses
Nine months ended
Year ended September 30,
December 31, 1996 1997
-------------------- --------------------
(Unaudited)
Revenue:
Base rents $7,840,670 $6,682,022
Tenant reimbursements 4,783,412 3,395,763
Percentage rents 529,079 465,876
-------------------- --------------------
Total revenue 13,153,161 10,543,661
Expenses:
Property operating 5,571,425 3,895,526
Real estate taxes 472,485 495,103
-------------------- --------------------
Total expenses 6,043,910 4,390,629
-------------------- --------------------
Revenue in excess of certain
expenses $7,109,251 $6,153,032
==================== ====================
See accompanying notes.
<PAGE>
Niagara Acquired Properties
Notes to the Statements of Revenue and Certain Expenses
Note 1 Business
The accompanying statements of revenue and certain expenses include the combined
operations of the following factory outlet center properties (the "Properties")
owned by a party unaffiliated with Prime Retail, Inc. Phase I of the Niagara
International Factory Outlets ("Niagara") consisting of approximately 316,900
square feet of gross leasable area ("GLA") was open during all of 1996, and as
such the 1996 statement of revenue and certain expenses includes a full year of
operations for such phase. Phase II of Niagara consisting of approximately
217,300 square feet of GLA opened during 1996. Therefore, the 1996 statement of
revenue and certain expenses does not include a full year of operations for
Phase II of Niagara.
Approximate
Gross Leasable
Property Name Location Area (sq. ft.)
- ------------------------- ---------------- ---------------
Niagara International
Factory Outlets Niagara, New York 534,200
Shasta Factory Outlets Shasta, California 165,000
---------------
699,200
===============
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 Properties for the periods presented nor indicative of future
operations as certain expenses, consisting of interest and financing expense,
depreciation, management fees, professional fees, and rent expense have been
excluded.
A summary of unaudited expenses is as follows:
Year ended Nine months ended
December 31, 1996 September 30, 1997
------------------- --------------------
Interest and financing expense $2,419,660 $1,567,280
Depreciation and amortization 1,587,353 1,083,485
Management fees 112,089 82,755
Professional fees 35,169 -
Rent expense 38,371 22,557
------------------- --------------------
Total unaudited expenses $4,192,642 $2,756,077
=================== ====================
<PAGE>
Niagara Acquired Properties
Notes to the Statements of Revenue and Certain Expenses (concluded)
Note 2 Summary of Significant Accounting Policies (continued)
Revenue Recognition
Rental revenue is recognized as income in the period earned.
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 may differ from those
estimates.
Interim Unaudited Financial Information
The accompanying unaudited statement of revenue and certain expenses has been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, all adjustments, consisting only of
recurring accruals considered necessary for the fair presentation of the
accompanying financial statement for the interim period ended September 30, 1997
have been included. Operating results for the interim period are not necessarily
indicative of the results which may be expected for a full fiscal year.
Note 3 Rentals
The Properties have entered into tenant leases with terms from one to ten years.
The leases provide for tenants to share in increases in operating expenses and
real estate taxes in excess of base amounts, as defined.
Note 4 Related Party Transactions
For the year ended December 31, 1996, the Properties paid approximately $263,500
in advertising fees to Celestial Mechanix, Inc. whose owner is affiliated with
the owner of the Properties. For the period ended September 30, 1997, the
Properties paid approximately $89,400 to Celestial Mechanix, Inc.
<PAGE>
<TABLE>
PRO FORMA CONSOLIDATED BALANCE SHEET
PRIME RETAIL, INC.
AS OF SEPTEMBER 30, 1997
(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
1997
PRIME ACQUIRED
RETAIL, INC. PROPERTIES [A] FINANCINGS PRO FORMA
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets
Investment in rental property, net $ 671,509 $ 126,975 $ 798,484
Cash and cash equivalents 23,777 (95,607) $ 73,000[B] 1,170
Restricted cash 41,019 41,019
Accounts receivable, net 8,547 8,547
Deferred charges, net 17,281 17,281
Due from affiliates, net 654 654
Investment in partnerships 3,139 3,139
Other assets 2,651 2,651
-------------- -------------- -------------- --------------
Total assets $ 768,577 $ 31,368 $ 73,000 $ 872,945
============== ============== ============== ==============
Liabilities and Shareholders' Equity
Mortgages and other debt $ 428,520 $ 31,368 $ 73,000[B] $ 532,888
Accrued interest 3,460 3,460
Real estate taxes payable 6,121 6,121
Construction costs payable 2,786 2,786
Accounts payable and other liabilities 15,864 15,864
-------------- -------------- -------------- --------------
Total liabilities 456,751 31,368 73,000 561,119
Minority interests 9,800 9,800
Shareholders' equity:
Series A preferred stock 23 23
Series B preferred stock 30 30
Common stock 273 273
Additional paid-in capital 349,179 349,179
Distributions in excess of net income (47,479) (47,479)
-------------- -------------- -------------- --------------
Total shareholders' equity 302,026 302,026
-------------- -------------- -------------- --------------
Total liabilities and shareholders' equity $ 768,577 $ 31,368 $ 73,000 $ 872,945
============== ============== ============== ==============
==================================================================================================================
See accompanying Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
PRIME RETAIL, INC.
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<CAPTION>
1996 1997
PRIME ACQUIRED ACQUIRED FINANCINGS
RETAIL, INC. PROPERTIES [C] PROPERTIES [C] AND OTHER PRO FORMA
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Revenues
Base rents $ 54,710 $ 11,457 $ 15,801 $ 81,968
Percentage rents 1,987 480 929 3,396
Tenant reimbursements 25,254 4,897 7,773 37,924
Income from investment
partnerships 1,239 (785) (1) 453
Interest and other 5,850 (87) 61 5,824
-------------- -------------- -------------- --------------
Total revenues 89,040 15,962 24,563 129,565
Expenses
Property operating 20,421 3,374 8,313 32,108
Real estate taxes 5,288 1,258 1,247 7,793
Depreciation and amortization 19,256 3,338 3,706 26,300
General and administrative 4,018 4,018
Interest 24,485 2,216 $ 15,125 [D] 41,826
Other charges 8,586 191 28 8,805
-------------- -------------- -------------- -------------- --------------
Total expenses 82,054 8,161 15,510 15,125 120,850
-------------- -------------- -------------- -------------- --------------
Income before minority interests
and extraordinary item 6,986 7,801 9,053 (15,125) 8,715
Loss allocated to minority
interests 2,092 2,092
-------------- -------------- -------------- -------------- --------------
Income before extraordinary item 9,078 7,801 9,053 (15,125) 10,807
Extraordinary item - loss on
early extinguishment of debt (1,017) (1,017)
-------------- -------------- -------------- -------------- --------------
Net income 8,061 7,801 9,053 (15,125) 9,790
Income allocated to preferred
shareholders 14,236 14,236
-------------- -------------- -------------- -------------- --------------
Net loss applicable to
common shares $ (6,175) $ 7,801 $ 9,053 $ (15,125) $ (4,446)
============== ============== ============== ============== ==============
Per Common Share:
Loss before extraordinary item $ (0.63) $ (0.42)
Extraordinary item (0.12) (0.12)
-------------- --------------
Net loss $ (0.75) $ (0.54)
============== ==============
Weighted average
common shares outstanding 8,221 8,221
============== ==============
======================================================================================================================
See accompanying Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
PRIME RETAIL, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<CAPTION>
1997
PRIME ACQUIRED
RETAIL, INC. PROPERTIES [A] FINANCINGS PRO FORMA
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues
Base rents $ 56,315 $ 11,257 $ 67,572
Percentage rents 2,398 622 3,020
Tenant reimbursements 26,649 5,032 31,681
Income from investment partnerships (112) 140 28
Interest and other 7,674 (62) 7,612
-------------- -------------- --------------
Total revenues 92,924 16,989 109,913
Expenses
Property operating 20,495 5,512 26,007
Real estate taxes 7,238 1,084 8,322
Depreciation and amortization 19,515 3,161 22,676
General and administrative 4,083 4,083
Interest 27,951 1,953 $ 5,439 [E] 35,343
Other charges 2,475 104 2,579
-------------- -------------- -------------- --------------
Total expenses 81,757 11,814 5,439 99,010
-------------- -------------- -------------- --------------
Income before minority interests
and extraordinary item 11,167 5,175 (5,439) 10,903
Income allocated to minority interests (7,803) (7,803)
-------------- -------------- -------------- --------------
Income before extraordinary item 3,364 5,175 (5,439) 3,100
Extraordinary item - loss on early
extinguishment of debt (2,061) (213) (2,274)
-------------- -------------- -------------- --------------
Net income 1,303 4,962 (5,439) 826
Income allocated to preferred
shareholders 9,280 9,280
-------------- -------------- -------------- --------------
Net loss applicable to
common shares $ (7,977) $ 4,962 $ (5,439) $ (8,454)
============== ============== ============== ==============
Per Common Share:
Loss before extraordinary item $ (0.36) $ (0.38)
Extraordinary item (0.12) (0.13)
-------------- -------------
Net loss $ (0.48) $ (0.51)
============== =============
Weighted average
common shares outstanding 16,458 16,458
============== =============
==================================================================================================================
See accompanying Notes to Pro Forma Consolidated Financial Statements.
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
PRIME RETAIL, INC.
(UNAUDITED)
(IN THOUSANDS)
[A] To reflect the following 1997 Acquired Properties as follows:
<TABLE>
<CAPTION>
Acquisition Date Purchase Price Cash Paid Debt Assumed
---------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Kittery/Latham Acquired Properties October 29, 1997 $ 26,000 $ 26,000 $ -
Niagara/Shasta Acquired Properties December 2, 1997 100,975 69,607 31,368
=============== =============== ===============
$ 126,975 $ 95,607 $ 31,368
=============== =============== ===============
</TABLE>
[B] To reflect issuance of debt to finance the purchase of the 1997 Acquired
Properties.
[C] To reflect the operations and the depreciation expense for (a) the pro
forma combined statement of operations for the year ended December 31,
1996; for the period from January 1, 1996 through the date of acquisition
for the 1996 Acquired Properties, or December 31, 1996 for the 1997
Acquired Properties, and (b) the pro forma combined statements of
operations for the nine months ended September 30, 1997; for the period
from January 1, 1997 through the date of acquisition for the 1997 Acquired
Properties.
Date Acquired
-------------
1996 Acquired Properties:
-------------------------
Rocky Mountain Factory Stores November 1, 1996
Kansas City Factory Outlets November 1, 1996
Grove City Factory Shops November 1, 1996
1997 Acquired Properties:
-------------------------
Oak Creek Factory Stores February 13, 1997
Bend Factory Outlets February 13, 1997
Factory Outlets at Post Falls February 13, 1997
Buckeye Factory Shops September 2, 1997
Tidewater Outlet Mall, Manufacturer's
Outlet Mall and Kittery Outlet Village
(the "Kittery Properties") October 29, 1997
Latham Factory Outlet Center October 29, 1997
Niagara International Factory Outlets December 3, 1997
Shasta Factory Stores December 3, 1997
Depreciation is computed based upon the estimated fair value of the real
estate assets acquired, less amounts allocated to land, over an estimated
useful life of 40 years. Depreciation expense is computed using the
straignt-line method.
[D] To reflect Interest Expense on debt issued to finance the purchase of the
1996 Acquired Properties and the 1997 Acquired Properties.
[E] To reflect Interest Expense on debt issued to finance the purchase of the
1997 Acquired Properties.
EXHIBIT 23
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Consent of Independent Auditors
We consent to the use of our reports dated December 3, 1997 and December
13, 1997, with respect to the statements of revenue and certain expenses of
the Kittery Acquired Properties and the Niagara Acquired Properties,
respectively, for the year ended December 31, 1996, included in this Form
8-K/A.
Ernst & Young LLP
Baltimore, Maryland
December 29, 1997
