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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
October 26,1999
Date of report (Date of earliest event reported)
G & L REALTY CORP.
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(Exact name of registrant as specified in charter)
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<S> <C> <C>
Maryland 1-12566 95-4449388
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification
Incorporation) No.)
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439 N. Bedford Drive, Beverly Hills, California 90210
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(Address of principal executive of offices) (Zip code)
Registrant's telephone number including area code: (310) 273-9930
Not applicable.
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On October 26, 1999, G & L Realty Corp. announced results for its
third quarter ended September 30, 1999. The full text of the press release is
included as Exhibit 99 to this report and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No. Description
99 Press Release issued by G & L Realty Corp. on October 26,
1999 announcing results for the third quarter ended
September 30, 1999.
2
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
G & L REALTY CORP.
By: /s/ David E. Hamer
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David E. Hamer
Chief Accounting Officer
DATED: October 27, 1999
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EXHIBIT 99
[LETTERHEAD OF G&L REALTY CORP.]
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NEWS
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RELEASE: CONTACT:
Immediate Michael Gordon 310-273-9930
E-mail: [email protected]
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G&L REALTY CORP. REPORTS THIRD QUARTER RESULTS
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BEVERLY HILLS, CA, October 26, 1999 - G&L Realty Corp. (NYSE:GLR) today
reported financial results for its third quarter ended September 30, 1999,
including a non-cash write-down of $6.4 million, or $1.42 per share. The write-
down represents an impairment in the value of the six medical office buildings
located in New Jersey that had been leased to health-care provider Pinnacle
Health Enterprises, LLC, a subsidiary of PHP Healthcare Corporation. The write-
down reduced the company's third-quarter funds from operations (FFO) to a
negative $5.6 million, or $1.25 per share. In the third quarter of 1998, G&L
reported FFO of $1.8 million, or $0.40 per share. Excluding the write-down, the
company said its third-quarter FFO would have totaled $0.8 million, or $0.17 per
share. Per share amounts for all periods reported in this release are presented
on a diluted basis.
G&L has been in default on a mortgage secured by the six New Jersey medical
office buildings since May 1999. On September 10, 1999, the Superior Court of
New Jersey, Chancery Division for Bergen County appointed a receiver for the
buildings. A hearing is scheduled for November 15, 1999 in the Superior Court
for a summary judgment motion. G&L believes it is probable that the Superior
Court will transfer title to the buildings to the lender. In anticipation of
this event, the company has written down the value of these buildings.
"We regret the outcome of the foreclosure proceedings now moving forward in
New Jersey," said Daniel M. Gottlieb, G&L's chairman and co-CEO, "but it has
become apparent to us that this is the most prudent action we can take on behalf
of our stockholders." "The write-down we've recorded this quarter brings an end
to the issue," he added.
G&L is currently in the middle of a tender offer for 1.0 million shares and
the write down will not affect the price per share of the offer.
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The company also reported that Hoag Memorial Hospital Presbyterian, the
current tenant of a 33,000 square-foot medical office building constructed by
G&L this year, has exercised its option to acquire the building. Under terms of
the option, Hoag will pay $9.6 million for the building, located in the Aliso
Viejo suburb of Orange County. When the transaction is completed, G&L expects to
recognize a gain of $2.0 million to $2.5 million. The building is currently
secured by a $5.5 million loan, which will be repaid with proceeds from the
sale. G&L said a sales transaction will be completed during January 2000.
G&L also said that it has recently completed a $4.2 million, three-year
term loan, at an annual interest rate of LIBOR plus 3.4%, secured by a 23,000
square-foot medical office building the company is constructing in Aliso Viejo.
The building, which is approximately 75% pre-leased, is scheduled to be
completed in the first quarter of 2000. G&L plans to use part of the proceeds
from the loan to repay an outstanding $2.2 million loan from the Craig Corp.,
whose president is a director of G&L Realty Corp. The loan from the Craig Corp.
was made in May 1999, and reported in G&L's 2nd quarter, 1999 10-Q.
Founded in 1976, G&L Realty Corporation is a growth-oriented health care
real estate investment trust with two major areas of operation: the Medical
Office Building Division, which owns, develops and manages high-quality,
strategically located properties, primarily in Southern California; and the
Senior Care Division, which owns and finances health care facilities throughout
the United States.
This press release contains certain forward-looking statements within the
meaning of the federal securities laws. A number of factors could cause G&L
Realty's actual operating performance or financial results to differ materially
from those anticipated. These include changes in the general economy, the supply
of and demand for health care related real estate in G&L's markets, the
operating success of tenants and borrowers, increases in construction costs,
construction delays, the availability of financing, the receipt of any
governmental approvals required for development, potential environmental
liabilities, and other factors affecting the condition of properties being
acquired, and other risks described from time to time in G&L Realty's reports
filed with the Securities and Exchange Commission.
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G&L Realty Corp.
Corporate Headquarters:
439 North Bedford Drive, Beverly Hills, California 90210
Tel:310-273-9930 Fax:310-248-2222
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G&L REALTY CORP.
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
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For the three months For the nine months
Ended September 30, Ended September 30,
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Operating Results 1999 1998 1999 1998
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Funds from operations:
Net income $(4,250) $ 2,434 $(1,184) $ 7,397
Minority interest in Operating Partnership (986) 78 (1,072) 221
Real estate related depreciation and amortization
1,370 1,099 3,888 3,100
Depreciation from unconsolidated affiliates 47 39 147 52
Adjustment for minority interest in consolidated affiliates
(14) (19) (64) (42)
Dividends on preferred stock (1,803) (1,803) (5,409) (5,578)
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Operating Partnership
Funds from Operations $(5,636) $ 1,828 $(3,694) $ 5,150
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FFO per share and unit $ (1.25) $ 0.40 $ (0.81) $ 1.11
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Weighted averages shares outstanding (1) 4,523 4,623 4,571 4,660
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Revenues:
Rents, reimbursements and parking $ 7,885 $ 6,983 $23,009 $20,049
Interest, loan fees and related income 833 1,095 2,128 3,418
Other 65 33 355 204
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Total revenues 8,783 8,111 25,492 23,671
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Expenses:
Property operations 1,951 1,628 5,617 4,545
Depreciation and amortization 1,473 1,213 4,208 3,356
Interest 3,315 2,210 8,827 6,219
General and administrative 857 545 2,314 1,968
Impairment of long-lived assets 6,400 --- 6,400 ---
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Total expenses 13,996 5,596 27,366 16,088
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(Loss) income from operations (5,213) 2,515 (1,874) 7,583
Equity in earnings of unconsolidated affiliate 23 43 (247) 196
Minority interest in consolidated affiliates (46) (46) (135) (161)
Minority interest in Operating Partnership 986 (78) 1,072 (221)
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Net (loss) income $(4,250) $ 2,434 $(1,184) $ 7,397
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Per Share data:
Basic $ (1.56) $ 0.15 $ (1.68) $ 0.48
Fully diluted $ (1.56) $ 0.15 $ (1.68) $ 0.48
Weighted average outstanding shares:
Basic 3,889 4,090 3,934 4,112
Fully Diluted 3,898 4,125 3,946 4,162
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(1) Assumes all outstanding operating partnership units have been converted
to common stock.
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G&L Realty Corp.
Corporate Headquarters:
439 North Bedford Drive, Beverly Hills, California 90210
Tel:310-273-993- Fax:310-248-2222
