<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-12482
GLIMCHER REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 31-1390518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SOUTH THIRD STREET 43215
COLUMBUS, OHIO (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 621-9000
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
<S> <C>
COMMON SHARES OF BENEFICIAL INTEREST, PAR VALUE $.01 PER SHARE NEW YORK STOCK EXCHANGE
</TABLE>
-------------------------------------
Securities registered pursuant to Section 12(g) of the Act: NONE
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
--- ---
As of July 26,1996, there were 21,888,931 Common Shares of Beneficial Interest
outstanding, par value $ .01 per share.
1 of 23 pages
<PAGE> 2
GLIMCHER REALTY TRUST
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations for the three months ended June 30, 1996 and 1995 4
Consolidated Statements of Operations for the six months ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows for the six months ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 2. Changes in Securities 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matters to a Vote of Security Holders 21
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
</TABLE>
2
<PAGE> 3
GLIMCHER REALTY TRUST
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1996 AND DECEMBER 31, 1995
(DOLLARS IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
(UNAUDITED)
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
Investment in real estate:
Land ....................................................................... $ 83,703 $ 61,840
Buildings, improvements and equipment ...................................... 648,376 623,471
Developments in progress ................................................... 25,289 11,361
-------- --------
Investment in real estate ........................................... 757,368 696,672
Less accumulated depreciation .............................................. 75,845 66,699
-------- --------
Net investment in real estate ....................................... 681,523 629,973
Cash and cash equivalents .................................................... 3,706 5,832
Cash in escrow ............................................................... 33,602 4,722
Tenant accounts receivable, net .............................................. 17,580 15,507
Deferred expenses, net ....................................................... 10,089 11,542
Prepaid and other assets ..................................................... 1,358 1,427
-------- --------
$747,858 $669,003
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable ....................................................... $298,896 $291,579
Notes payable ................................................................ 102,300 33,200
Accounts payable and accrued expenses ........................................ 14,360 14,011
Distributions payable ........................................................ 11,776 11,773
-------- --------
427,332 350,563
-------- --------
Minority interest in partnerships ............................................ 43,554 33,749
Shareholders' equity:
Common shares of beneficial interest, $.01 par value, 100,000,000 shares
authorized, 21,888,931 and 21,881,921 shares issued and
outstanding at June 30, 1996 and December 31, 1995, respectively ........ 219 219
Additional paid-in capital ................................................. 316,673 316,558
Distributions in excess of accumulated earnings ............................ (39,920) (32,086)
-------- --------
$747,858 $669,003
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
3
<PAGE> 4
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Revenues:
Minimum rents .................................................... $ 20,784 $ 19,262
Percentage rents ................................................. 740 741
Tenant recoveries ................................................ 5,105 4,811
Other ............................................................ 466 404
----------- -----------
Total revenues ................................................. 27,095 25,218
----------- -----------
Operating Expenses:
Real estate taxes ................................................ 2,486 2,104
Recoverable operating expenses ................................... 3,181 2,807
----------- -----------
5,667 4,911
Provision for credit losses ....................................... 502 297
Other operating expenses .......................................... 167 96
General and administrative ........................................ 2,331 1,698
----------- -----------
Total operating expenses ....................................... 8,667 7,002
----------- -----------
Net operating income ........................................... 18,428 18,216
Depreciation and amortization ..................................... 5,427 5,451
Gain on sale of properties ........................................ 1,119
Interest income ................................................... 98 135
Interest expense .................................................. 6,590 7,323
Minority interest in partnerships ................................. 826 683
----------- -----------
Net income ..................................................... $ 6,802 $ 4,894
=========== ===========
Earnings per common share of beneficial interest ...................... $ .31 $ .26
=========== ===========
Cash distributions declared per common share of beneficial interest ... $ .4808 $ .4808
=========== ===========
Weighted average number of common shares of beneficial interest
outstanding ....................................................... 21,887,964 18,514,490
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
4
<PAGE> 5
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Revenues:
Minimum rents .................................................... $ 41,217 $ 38,757
Percentage rents ................................................. 1,607 1,547
Tenant recoveries ................................................ 10,674 9,522
Other ............................................................ 845 845
----------- -----------
Total revenues ................................................. 54,343 50,671
----------- -----------
Operating Expenses:
Real estate taxes ................................................ 4,917 4,285
Recoverable operating expenses ................................... 6,739 5,787
----------- -----------
11,656 10,072
Provision for credit losses ...................................... 1,008 760
Other operating expenses ......................................... 325 227
General and administrative ....................................... 4,229 3,443
----------- -----------
Total operating expenses ....................................... 17,218 14,502
----------- -----------
Net operating income ........................................... 37,125 36,169
Depreciation and amortization ..................................... 10,701 10,278
Gain on sale of properties ........................................ 1,119
Interest income ................................................... 211 282
Interest expense .................................................. 12,963 14,396
Minority interest in partnerships ................................. 1,577 1,460
----------- -----------
Net income ..................................................... $ 13,214 $ 10,317
=========== ===========
Earnings per common share of beneficial interest ...................... $ .60 $ .56
=========== ===========
Cash distributions declared per common share of beneficial interest ... $ .9616 $ .9483
=========== ===========
Weighted average number of common shares of beneficial interest
outstanding ....................................................... 21,887,196 18,436,975
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
5
<PAGE> 6
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .......................................................... $ 13,214 $ 10,317
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit losses ................................ 1,008 760
Depreciation and amortization .............................. 10,701 10,278
Gain on sale of properties ................................. (1,119)
Other non-cash expenses .................................... 428 388
Minority interest in partnerships .......................... 1,577 1,460
Net changes in operating assets and liabilities:
Tenant accounts receivable ................................. (3,028) (2,239)
Prepaid and other assets ................................... 559 (23)
Accounts payable and accrued expenses ...................... (2,507) (4,903)
-------- --------
Net cash provided by operating activities ....................... 20,833 16,038
-------- --------
Cash flows from investing activities:
Proceeds from sale of properties ........................... 3,826
Additions to investment in real estate ..................... (38,645) (14,470)
Acquisition of properties .................................. (5,167)
(Additions to) withdrawals from cash in escrow ............. (28,051) 3,836
Additions to deferred expenses ............................. (88) (184)
-------- --------
Net cash used in investing activities ........................... (68,125) (10,818)
-------- --------
</TABLE>
(continued)
The accompanying notes are an integral part of these consolidated
financial statements
6
<PAGE> 7
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of mortgage and notes payable ................. 433,980 31,890
Principal payments on mortgage and notes payable ..................... (365,342) (89,605)
Proceeds from the issuance of common shares of beneficial
interest, net of underwriting and other offering costs of $4,025 ... 69,110
Proceeds from the issuance of common shares of beneficial
interest under the Distribution Reinvestment and Share
Purchase Plan and other ............................................ 77 68
Cash distributions, shareholders ..................................... (21,048) (17,166)
Cash distributions, Operating Partnership unit holders ............... (2,501) (2,434)
--------- --------
Net cash provided by (used in) financing activities ....................... 45,166 (8,137)
--------- --------
Net change in cash and cash equivalents ............................................ (2,126) (2,917)
Cash and cash equivalents, at beginning of period .................................. 5,832 7,042
--------- --------
Cash and cash equivalents, at end of period ........................................ $ 3,706 $ 4,125
========= ========
</TABLE>
Non-cash financing and investing transactions:
1995:
Glimcher Realty Trust accrued accounts payable of $2,779 and $3,131 for real
estate improvements and other assets as of June 30, 1995 and December 31, 1994,
respectively.
1996:
Glimcher Realty Trust accrued accounts payable of $1,909 and $2,152 for real
estate improvements as of June 30, 1996 and December 31, 1995, respectively.
During the second quarter of 1996 and 1995, Glimcher Realty Trust accrued
distributions payable for $11,776 and $10,080, respectively.
Glimcher Realty Trust, through Glimcher Properties Limited Partnership, acquired
one community shopping center during the six months ended June 30, 1996. The
purchase price of $12,550 was paid for with $5,167 in cash and the balance by
the assumption of net liabilities and mortgage debt of $7,383.
The accompanying notes are an integral part of these consolidated
financial statements
7
<PAGE> 8
GLIMCHER REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include GRT,
Glimcher Properties Limited Partnership (the "Operating Partnership") (89.4%
owned by GRT at June 30, 1996 and 89.4% at December 31, 1995), four Delaware
limited partnerships (Glimcher Holdings Limited Partnership, Glimcher Centers
Limited Partnership, Grand Central Limited Partnership, and Glimcher York
Associates Limited Partnership), and one Ohio limited partnership (Morgantown
Mall Associates Limited Partnership) all of which are wholly-owned; and one
Colorado limited liability company (Olathe Mall, L.L.C.) . All significant
inter-company balances and transactions have been eliminated.
The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The information furnished in the accompanying consolidated
balance sheets, consolidated statements of operations, and consolidated
statements of cash flows reflect all adjustments which are, in the opinion of
management, necessary for a fair presentation of the aforementioned financial
statements for the interim periods. Operating results for the six months ended
June 30, 1996, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
The consolidated financial statements should be read in conjunction
with the notes to the consolidated financial statements, Management's Discussion
and Analysis of Financial Condition and Results of Operations included in
Glimcher Realty Trust's Form 10-K for year ended December 31, 1995.
2. INVESTMENT IN REAL ESTATE
Investment in Real Estate has increased $60,696 since December 31,
1995. The primary components of this increase are summarized below:
<TABLE>
<CAPTION>
NAME OF PROPERTY/DESCRIPTION COST PROJECT TYPE
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Community Center ................................ $12,500 Acquisition
The Great Mall of the Great Plains - Investment .......... 25,233 Development
The Great Mall of the Great Plains - Minority Interest ... 10,729 Development
Georgesville Square ...................................... 6,810 Development
Meadowview Square ........................................ 1,522 Development
Grand Central Mall ....................................... 1,080 Renovation/Expansion
Morgantown Commons ....................................... 855 Renovation/Expansion
Various properties ....................................... 1,967
-------
$60,696
=======
</TABLE>
3. CASH IN ESCROW
Cash in escrow consists primarily of cash held for real estate taxes,
payments by tenants for early termination of their leases, and property
maintenance and expansion or leasehold improvements as required by certain of
the loan agreements. Cash in escrow may be released as certain income
requirements have been met. At June 30, 1996, cash in escrow also includes
$28,128 that was drawn under the revolving line of credit (the "Credit
Facility") and deposited with two banks to secure letters of credit for $28,128.
The letters of credit were deposited at the escrow closing of the Retail
Property Investors Inc. (RPI) acquisition.
8
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. MORTGAGE NOTES PAYABLE
Mortgage notes payable at June 30, 1996 and December 31, 1995 consist
of the following:
<TABLE>
<CAPTION>
BALANCE JUNE 30, 1996
----------------------- -------------------------------------------------
JUNE 30, DEC. 31, INTEREST PAYMENT PAYMENT AT FINAL
DESCRIPTION 1996 1995 RATE TERMS MATURITY MATURITY DATE
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Grand Central Limited Partnership ................ $ 25,000 $ 25,000 6.935% (a) $25,000 Oct. 1, 2000
Glimcher Holdings Limited Partnership - Loan A ... 40,000 40,000 6.995% (a) 40,000 Feb. 1, 1999
Glimcher Holdings Limited Partnership - Loan B ... 40,000 40,000 7.505% (a) 40,000 Feb. 1, 2003
Glimcher Centers Limited Partnership ............. 76,000 76,000 7.625% (a) 76,000 Aug. 1, 2000
-------- --------
181,000 181,000
Morgantown Mall Associates Limited Partnership ... 50,200 50,200 7.500% (a) 50,200 Apr. 1, 1999
Glimcher Properties Limited Partnership -
Mortgage Notes Payable:
Glimcher Properties Limited Partnership .... 50,000 50,000 7.470% (a) 50,000 Oct. 26, 2000
Georgesville Square ........................ 1,646
Meadowview Square .......................... 866
Delaware Community Shopping Center ......... 8,471 7.875% (b) April 1, 2016
Construction Loan:
Morgantown Commons ($10,500 available) .... 9,225 7,867 (c) (a) Jun. 1, 1998
-------- --------
Total Mortgage Notes Payable ..................... $298,896 $291,579
======== ========
</TABLE>
(a) The loan requires monthly payments of interest only.
(b) The loan requires monthly payments of interest only until May 1, 1996;
thereafter, a $70 monthly payment of principal and interest.
(c) The loan bears interest at LIBOR plus 200 basis points (7.500% at June 30,
1996).
All mortgage notes payable are collateralized by certain properties
held within the respective partnerships. The loan agreement for $181,000 with
Grand Central Limited Partnership, Glimcher Holdings Limited Partnership and
Glimcher Centers Limited Partnership contains certain financial covenants
regarding minimum net operating income and coverage ratios.
5. NOTES PAYABLE
At June 30, 1996, the Company maintained a Credit Facility with two
banks, as agents, of $175,000 which is due in June 1998. All borrowings under
the Credit Facility are unsecured and bear interest at variable rates ranging
from LIBOR plus 150 basis points to LIBOR plus 250 basis points. The variable
rate is set quarterly based on the Company's leverage ratio (as defined in the
Credit Facility loan agreement) of total consolidated liabilities ($427,332 at
June 30, 1996) to consolidated tangible net worth ($320,526 at June 30, 1996).
Consolidated tangible net worth is defined as the Company's total assets less
total liabilities and intangible assets. At June 30, 1996 the Credit Facility
interest rate was LIBOR plus 150 basis points (7.000%). Effective July 1, 1996
the interest rate will be LIBOR plus 175 basis points.
The Credit Facility contains customary covenants, representations,
warranties and events of default, including maintenance of a specified minimum
net worth requirement, loan to value ratios, net operating income requirements
on the negative pledge pool, restrictions on the incurrence of additional
indebtedness and approval of anchor leases with respect to the properties which
are part of the negative pledge pool for the Credit Facility.
9
<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
At June 30, 1996 the balance outstanding on the Credit Facility was
$101,800. In addition, $19,171 represents a holdback on the available balance of
the Credit Facility for letters of credit issued under the Credit Facility;
$18,721 of the holdback relates to a letter of credit issued in connection with
the escrow closing of the RPI acquisition. As of June 30, 1996 the unused
balance of the Credit Facility available to the Company was $54,029.
In connection with the Credit Facility the Company entered into a rate
protection agreement on July 14, 1995 under which the obligor has agreed to
reimburse the Company to the extent interest expense increases as a result of an
increase in LIBOR above 8.500% per annum, and the Company has agreed to
reimburse the obligor to the extent of interest expense decreases as a result of
an decrease in LIBOR below 4.500% per annum. Thus, the majority of the Company's
variable-rate debt has contractual protection against future economic
uncertainties.
On February 23, 1996, GRT entered into a note payable for its three
year directors and officers liability insurance premium of $600 at a fixed rate
of 7.575%. The note requires quarterly payments of principal and interest in the
amount of $55 with the final payment due November 23, 1998. The balance
outstanding was $500 at June 30, 1996.
6. MINORITY INTEREST IN PARTNERSHIPS
The $9,805 increase is primarily due to the outside partners' interest
($10,729 as of June 30, 1996) in Olathe Mall L.L.C. ("Olathe"), (see footnote
7).
7. JOINT VENTURE
On January 11, 1996, the Operating Partnership purchased a 65.0%
controlling interest in Olathe which was formed to develop an enclosed value
oriented regional mall, The Great Mall of the Great Plains (the "Mall"), in
Olathe, Kansas. The Mall is currently under construction. The operations of the
Olathe joint venture are included in the accompanying balance sheet using the
consolidation method of accounting.
During construction all cost associated with the development are being
capitalized. Below is a summarized balance sheet of Olathe as of June 30, 1996:
<TABLE>
Assets:
<S> <C>
Construction in progress $35,962
-------
$35,962
=======
Liabilities and Partner's Equity:
Accounts payable $ 820
Advances from partner 13,328
Partners' equity 21,814
-------
$35,962
=======
</TABLE>
10
<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
8. SHAREHOLDERS' EQUITY
The following table summarizes the change in the shareholders' equity
since December 31, 1995:
<TABLE>
<CAPTION>
COMMON SHARES OF DISTRIBUTIONS
BENEFICIAL INTEREST IN EXCESS OF ADDITIONAL
------------------- ACCUMULATED PAID IN
SHARES AMOUNT EARNINGS CAPITAL TOTAL
------ ------ -------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1996 ....................... 21,881,921 $219 $(32,086) $316,558 $284,691
Distributions declared, $.4808 per Share ....... (21,048) (21,048)
Distribution Reinvestment and Share
Purchase Plan ............................... 3,540 60 60
Stock based compensation ....................... 3,470 57 57
Net income for the period January 1, 1996
to June 30, 1996 ............................ 13,214 13,214
Transfer to minority interest in partnership ... (2) (2)
---------- ---- -------- -------- --------
Balance, June 30, 1996 ......................... 21,888,931 $219 $(39,920) $316,673 $276,972
========== ==== ======== ======== ========
</TABLE>
9. EARNINGS PER SHARE
Primary earnings per share is computed based upon the weighted average
number of Shares outstanding during the periods represented. Since fully diluted
earnings per share is not materially dilutive or antidilutive, such amounts are
not presented.
10. COMMITMENT AND CONTINGENCIES
Litigation
In December 1994, the Estate of Amos Ginor ("Ginor") and Langhorne
Plaza Associates ("Langhorne") commenced a lawsuit, The Estate of Amos Ginor, et
al. v. Dennis Landsberg, et al., against various defendants, including Glimcher
Holdings Limited Partnership ("GHLP") and GRT (collectively, the "Glimcher
Entities"), that is pending in the United States District Court for the Southern
District of New York.
The complaint alleges that Langhorne's general partner, defendant
Washington General Corp. ("Washington"), and its corporate parent, Concord
Assets Group, Inc. ("Concord"), breached their fiduciary duty and defrauded
Langhorne and Ginor, Langhorne's limited partner, by selling two single tenant
retail properties to GHLP for a low price, without adequately taking into
account the tax consequences of the sale, at a time when Ginor was seeking to
oust Washington as Langhorne's general partner. Those claims are also asserted
against the Glimcher Entities alleging that they had knowledge of the facts and
failed to disclose or take other action. The complaint seeks compensatory and
punitive damages against all the defendants in an unspecified amount and
rescission of the sale of the two single tenant retail properties.
The Glimcher Entities are seeking indemnification and contributions
against all codefendants, and with respect to the rescission claims,
indemnification pursuant to the title policies obtained by the Glimcher Entities
in connection with the acquisition of the retail properties. At this stage of
the proceedings, the Glimcher Entities maintain that the claims against them are
not meritorious and intend to vigorously defend themselves in the lawsuit. In
the event that any recovery against them exceeds the $2.0 million limit on the
Concord indemnification, the Glimcher Entities will seek contributions from
other defendants.
11
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Environmental Matters
The Company has been advised that the United States Environmental
Protection Agency (the "EPA") is likely to include its Stewart Plaza in
Mansfield, Ohio as part of a much larger National Priority List site, designated
by the EPA for remedial activities under the Federal hazardous site cleanup
program. This action is the result of the discovery of perchloroethylene (a
solvent used predominantly in cleaning) in drinking water wells located near the
property. In accordance with Federal law, the Company may, to some extent, be
liable for costs associated with remedial activities which might be performed in
connection with the site. However, no contamination has been discovered on the
property itself and the company believes its liability may be limited by the
fact that the property does not appear to be a source of the contamination on
the site.
11. RECLASSIFICATIONS
Certain reclassifications of prior period amounts have been made in the
financial statements to conform to the 1996 presentation.
12
<PAGE> 13
PART I
FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following should be read in conjunction with the unaudited
consolidated financial statements of Glimcher Realty Trust (the "Company" or
"GRT") including the respective notes thereto, all of which are included in this
Form 10-Q.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THREE MONTHS ENDED JUNE 30, 1995
REVENUES
Total revenues increased 7.4% , or $1.9 million, for the three months
ended June 30, 1996. The total revenue increase is $2.1 million after adjusting
for the net effect of 1995/1996 one-time items totaling $250,000. The $2.1
million increase was the result of increased revenues of $800,000 at the malls
and $1.3 million at the community shopping centers.
Minimum rents
Minimum rents increased 7.9%, or $1.5 million, for the three months
ended June 30, 1996. The minimum rent increase was $1.4 million after the net
effect of 1995/1996 one-time items totaling $100. The summary below identifies
the 7.9% increase by its various components.
<TABLE>
<CAPTION>
Increase (dollars in millions) Percent
------------------------------ -------
Community Shopping Centers/
Malls Single Tenant Retail Properties Total Total
----- ------------------------------- ----- -----
<S> <C> <C> <C> <C>
Same Center $0.3 $0.2 $0.5 2.4%
Acquisitions/Developments .9 .9 5.1
One-time items 0.2 (0.1) 0.1 0.4
---- ---- ---- ----
After one-time items $0.5 $1.0 $1.5 7.9%
==== ==== ==== ====
</TABLE>
Tenant recoveries
Tenant recoveries increased 6.1%, or $290,000, for the three months
ended June 30, 1996. The tenant recoveries increase was $640,000 after adjusting
for a 1995 one-time items totaling $350,000. Same center properties accounted
for $480,000 of the $640,000 increase and related primarily to increased real
estate tax assessments and increased snow removal costs due to the harsh winter.
Acquisitions and openings of new developments during 1995 and 1996 accounted for
$170,000 of the $640,000 increase. The recovery ratio for the three months ended
June 30, 1996 was 90.1% compared to 90.8% for the corresponding period of 1995
(after adjusting for the effect of the $350,000 one-time item).
13
<PAGE> 14
OPERATING EXPENSES
Total operating expenses increased 23.8%, or $1.7 million, for the
three months ended June 30, 1996. Recoverable expenses accounted for $760,000 of
the increase with the balance primarily due to the provision for credit losses
which increased $205,000 and general and administrative expenses which increased
$630,000.
Recoverable expenses
The $760,000 increase in recoverable expenses was the result of a
$380,000 increase in real estate taxes resulting from reassessments and a
$380,000 increase in recoverable operating expenses. $140,000 of the $760,000
increase relates to acquisitions and developments opened in 1995 and 1996.
Provision for credit losses
The provision for credit losses increased $205,000 to 1.9% of total
revenues for the three months ended June 30, 1996, compared to 1.2% of total
revenues for the corresponding period of 1995. The Company has taken a more
conservative approach in assessing tenant credit risks in light of the current
retail environment. The Company's allowance for credit risk as a percent of
tenant accounts receivable was 11.3%, or $2.2 million, at June 30, 1996,
compared to 10.4%, or $1.7 million, at June 30, 1995.
General and administrative
General and administrative expenses increased $630,000 to 8.6% of total
revenue for the three months ended June 30, 1996. This increase includes a
$100,000 one-time net expense savings. The general and administrative expense
increase is due primarily to wage and benefit cost relating to staff expansions
since June 30, 1995 to support acquisitions, developments, enhanced systems
capabilities, and an expanded leasing function.
GAIN ON SALE OF PROPERTIES
During the three months ended June 30, 1996, the Company sold one
parcel of land in Lancaster, Ohio and one parcel of land in Allentown,
Pennsylvania, which combined resulted in a gain of $1.1 million. There were no
sales of land during the corresponding period of 1995.
INTEREST EXPENSE/CAPITALIZED INTEREST
For the three months ended June 30, 1996 interest expense decreased
10.0%, or $730,000, and capitalized interest relating to developments in
progress increased $380,000. The net interest decrease of $350,000 was due to a
lower effective interest rate, partially off-set by increased debt levels. The
effective interest rate and the weighted average debt balance for the three
months ended June 30, 1996 were 7.39% and $367.7 million, respectively, compared
to 8.07% and $352.8 million, respectively, for the corresponding period of 1995.
The net interest decrease is summarized below:
<TABLE>
<S> <C>
Rate ($367,700,000 x 0.68% x 90/360) $ 625,000
Borrowings ($14,885,000 x 7.39% x 90/360) (275,000)
---------
Net interest expense $ 350,000
=========
</TABLE>
14
<PAGE> 15
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1995
REVENUES
Total revenues increased 7.2% , or $3.7 million, for the six months
ended June 30, 1996. The total revenue increase is $4.2 million after adjusting
for the net effect of 1995/1996 one-time items totaling $520,000. The $4.2
million increase was the result of increased revenues of $1.2 million at the
malls and $3.0 million at the community shopping centers.
Minimum rents
Minimum rents increased 6.3% or $2.5 million for the six months ended
June 30, 1996. The minimum rent increase was $2.6 million after the net effect
of 1995/1996 one-time items totaling $170,000. The summary below identifies the
6.3% increase by its various components.
<TABLE>
<CAPTION>
Increase (dollars in millions) Percent
------------------------------------------------------
Community Shopping Centers/
Malls Single Tenant Retail Properties Total Total
----- ------------------------------- ----- -----
<S> <C> <C> <C> <C>
Same Center $0.1 $0.5 $0.6 1.5%
Acquisitions/Developments 2.1 2.1 5.2
One-time items 0.2 (0.4) (0.2) (0.4)
---- ---- ---- ----
$0.3 $2.2 $2.5 6.3%
==== ==== ==== ====
</TABLE>
Tenant recoveries
Tenant recoveries increased 12.1%, or $1.2 million, for the six months
ended June 30. The tenant recoveries increase was $1.5 million after adjusting
for a 1995 one-time item totaling $350,000. Same center properties accounted for
$1.2 million of the $1.5 million increase and related primarily to increases in
real estate tax assessments and increased snow removal costs due to the harsh
winter. Acquisitions and openings of new developments during 1995 and 1996
accounted for $330,000 of the $1.5 million increase. The recovery ratio for the
six months ended June 30, 1996 was 91.6%, compared to 91.1% for the
corresponding period of 1995 (after adjusting for the effect of the $350,000
one-time item).
OPERATING EXPENSES
Total operating expenses increased 18.7%, or $2.7 million, for the six
months ended June 30, 1996. Recoverable expenses accounted for $1.6 million of
the increase with the balance primarily due to the provision for credit losses
which increased $250,000 and general and administrative expenses which increased
$790,000.
Recoverable expenses
The $1.6 million increase in recoverable expenses was the result of a
$630,000 increase in real estate taxes resulting from increased assessments and
a $950,000 increase in recoverable operating expenses of which $560,000 was snow
removal cost. $320,000 of the $1.6 million increases relate to acquisitions and
developments opened in 1995 and 1996.
Provision for credit losses
The provision for credit losses increased $250,000 to 1.9% of total
revenues for the six months ended June 30, 1996, compared to 1.5% of total
revenues for the corresponding period of 1995. The Company has taken a more
conservative approach in assessing tenant credit risks in light of the current
retail environment. The Company's allowance for credit risk as a percent of
tenant accounts receivable was 11.3%, or $2.2 million, at June 30, 1996,
compared to 10.4%, or $1.7 million, at June 30, 1995.
15
<PAGE> 16
General and administrative
General and administrative expenses increased $790,000 to 7.8% of total
revenues for the six months ended June 30, 1996. This increase includes a
$310,000 one-time net expense savings. The general and administrative expense
increase is due primarily to wage and benefit cost for staff expansions since
June 30, 1995 to support acquisitions, developments, enhanced systems
capabilities, and an expanded leasing function.
GAIN ON SALE OF PROPERTIES
During the six months ended June 30, 1996, the Company sold one parcel
of land in Lancaster, Ohio and one parcel of land in Allentown, Pennsylvania,
which combined resulted in a gain of $1.1 million. There were no sales of land
during the corresponding period of 1995.
INTEREST EXPENSE/CAPITALIZED INTEREST
For the six months ended June 30, 1996 interest expense decreased $1.4
million, and capitalized interest relating to developments in progress increased
$630,000. The net interest decrease of $770,000 was due to a lower effective
interest rate, partially offset by increased debt levels. The effective interest
rate and the weighted average debt balance for the six months ended June 30,
1996 were 7.42% and $358.4 million, respectively, compared to 8.01% and $350.7
million, respectively, for the corresponding period of 1995. The net interest
decrease is summarized below:
<TABLE>
<S> <C>
Rate ($358,400,000 x 0.59% x 180/360) $ 1,057,000
Borrowings ($7,736,000 x 7.42% x 180/360) (287,000)
-----------
$ 770,000
===========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
The Company has several active development, renovation and expansion
projects and continues to review and evaluate acquisition and developments as
part of its business strategy. Management anticipates that the funds available
under its Credit Facility and the Company's plan to utilize construction
financing, long-term mortgage debt and the joint venture structure to raise
equity and financing for acquisitions and developments will provide sufficient
capital resources to administer the Company's business strategy.
At June 30, 1996 the Company's debt to total market capitalization was
49.3% which is consistent with the current policy of the Company to maintain
this ratio between 40.0% and 60.0%. The Company is reviewing this policy and
other measurements of leverage including its debt service coverage ratio and
debt to asset values.
Net cash provided by operating activities for the six months ended June
30, 1996 increased $4.8 million, or 29.9%. Net income accounted for $2.9 million
of this increase with the remaining $1.9 million increase resulting from
non-cash net operating income and operating asset and liability changes.
Net cash used in investment activities for the six months ended June
30, 1996 increased $57.3 million. The increase was primarily the result of real
estate development and acquisition activity (see footnote 2) and the cash escrow
for the RPI transaction (see footnote 3)
Net cash provided by financing activities for the six months ended June
30, 1996 increased $53.3 million primarily as a result of the increase in real
estate investments (see footnote 2).
16
<PAGE> 17
RPI Acquisition
On July 1, 1996 the Company announced the RPI transaction closed in
escrow on June 27, 1996. Final closing, which requires the approval of the
transaction by the shareholders of RPI is scheduled to occur early in the fourth
quarter of 1996. The acquisition consists of 22 Wal-Mart anchored community
shopping centers located in nine central and eastern states and containing
approximately 4.4 million square feet of retail space. Financing of the $197.0
million purchase price is in place. The Company will assume mortgage debt of
$116.2 million on 16 properties with annual debt service of approximately $10.7
million and a weighted average effective interest rate of 8.3%. The debt matures
6% in 1997, 0% in 1998, 30% in 1999 and 64% between 2000 and 2015. A commitment
for bridge financing for approximately $34.0 million on six properties is in
place with financing for one year from the closing date with an option to extend
for one year. Interest on the bridge financing will be LIBOR plus 175 basis
points. The balance of the purchase price ($46.8 million) will be financed from
the Credit Facility, of which $28.1 million is included in the Credit Facility
outstanding balance at June 30, 1996 (see footnote 3) and $18.7 million
represents a holdback on the available balance of the Credit Facility for
letters of credit issued (see footnote 5). The 22 properties are projected to
increase net operating income by approximately $20.0 million. The Company will
receive an incentive management fee from May 14, 1996, to final closing, to be
paid at final closing. The fee calculation will be based on various components
tied to revenues, expenses, principal debt payments, and capital/tenant
improvement payments.
Development, Expansion, and Renovation
The Great Mall of the Great Plains This development is a single level
enclosed super regional, value oriented mall totaling 1 million square feet of
gross buildable area located in Olathe, Kansas, approximately 19 miles from
downtown Kansas City, Missouri. The property will contain approximately 850,000
square feet of gross leasable area, consisting of 50.0% anchors, 48.0% retail
shop space and 2.0% food court/kiosks/cart space. The estimated cost of the
development is $107.0 million, of which $74.1 million will be financed from a
construction loan and the balance representing equity of the Company (65.0%) and
its joint venture partner (35.0%). The construction loan which was finalized
July 2, 1996 carries interest at LIBOR plus 225 basis points and matures July 1,
1999. Glimcher Properties Limited Partnership (GPLP) has provided the lender
with a completion guarantee and an unconditional guarantee of payment of the
greater of 25.0% of the outstanding obligation or the indebtedness minus capped
net operating income calculated in accordance with the agreement. The Olathe
Mall L.L.C. operating agreement requires GPLP to make initial capital and
additional capital contributions totaling $21.8 million of which $11.1 million
has been contributed as of June 30, 1996. Current projections have the opening
scheduled for mid 1997.
Meadowview Square This development is a 151,000 square foot community
shopping center located in Kent/Ravenna, Ohio. The center will be anchored by a
126,000 square foot Wal-Mart with the balance of the space in small shops. The
estimated cost of the development is $10.2 million. The Company is pursing a
$9.8 million, three year construction loan at LIBOR plus 200 basis points. At
June 30, 1996, the Company's invested capital in this project was $1.5 million.
Georgesville Square- Phase I This development is a 232,000 square foot
community shopping center located in Columbus, Ohio. The center will be anchored
by a 132,000 square foot Lowes and a 63,000 square foot Kroger, with the balance
of the space in small shops. The estimated cost of the development is $17.3
million. At June 30, 1996, the Company's invested capital in this project was
$6.8 million.
Grand Central Mall The renovation and expansion plan for this mall
located in Parkersburg, West Virginia will bring its gross leasable area to
887,000 square feet. The plan renovates a portion of the existing mall which
includes the addition of a food court and expands the mall with a 37,000 square
foot 12 screen cinema and a 83,000 square foot Proffitts. The estimated cost of
the renovation and expansion is $11.2 million. At June 30, 1996 the Company's
invested capital in the renovation and expansion plan was $6.2 million.
17
<PAGE> 18
PORTFOLIO DATA
Tenants reporting sales data for the twelve month period ended June 30,
1996 and June 30, 1995 represented 7.8 million square feet, or 79.6% of the
1995/1996 "same store" population. Below is a summary of the "same store" data:
<TABLE>
<CAPTION>
COMMUNITY SINGLE TENANT
ENCLOSED MALLS SHOPPING CENTERS RETAIL PROPERTIES
------------------------ ------------------------- --------------------------
PROPERTY TYPE SALES PSF % INCREASE SALES PSF % INCREASE SALES PST % DECREASED
------------- --------- ---------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Anchors $160.71 1.9% $210.01 2.0% $177.9 (1.8)%
Stores $232.39 1.9% $174.42 3.1%
</TABLE>
The total portfolio occupancy rates have remained relatively constant
at 94.1% at June 30, 1996 and 95.3% at June 30, 1995. The Company has focused
significant efforts on maintaining its occupancy levels during the difficult
retail environment experienced over the past several years. The occupancy levels
by property type are summarized below:
<TABLE>
<CAPTION>
PROPERTY TYPE OCCUPANCY
- - ------------------------------- ----------------------------------------------------------
6/30/96 3/31/96 12/31/95 9/30/95 6/30/95
------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Enclosed Malls:
Anchors 96.6% 96.6% 100.0% 100.0% 100.0%
Stores 83.9% 83.9% 84.7% 81.9% 80.6%
----- ----- ----- ----- -----
Total 91.5% 91.5% 93.9% 92.8% 92.3%
----- ----- ----- ----- -----
Community Shopping Centers:
Anchors 96.6% 96.8% 98.2% 98.6% 98.6%
Stores 88.0% 88.0% 88.4% 89.9% 89.0%
----- ----- ----- ----- -----
Total 94.4% 94.6% 95.8% 96.4% 96.2%
----- ----- ----- ----- -----
Single Tenant Retail Properties: 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Total Portfolio 94.1% 94.2% 95.6% 95.6% 95.3%
===== ===== ===== ===== =====
</TABLE>
The 3.4% mall anchor tenant vacancy represents one space at Morgantown
Mall which is being renovated for a Proffitts store with occupancy projected for
the end of 1996. The 3.4% community shopping center anchor tenant vacancy
represents five spaces totaling 198,000 square feet.
18
<PAGE> 19
In the first six months of 1996 new and rollover leases totaled 266,000
square feet. Rollover leases represent expiring leases where the tenant renewed.
All other leases are categorized as new. The average annualized base rents for
new and rollover leases show a positive trend when compared to the portfolio's
average annualized base rents. The following chart illustrates this trend for
the six months.
<TABLE>
<CAPTION>
SQUARE FEET ANALYSIS AVERAGE ANNUALIZED BASE RENT
--------------------------------- --------------------------------
NEW ROLLOVER NEW ROLLOVER PORTFOLIO
PROPERTY TYPE LEASES LEASES TOTAL LEASES LEASES TOTAL AVERAGE
------------- ------ ------ ----- ------ ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Enclosed Malls:
Anchors -- -- -- -- -- -- $ 4.17
Stores 53,685 20,352 74,037 $ 21.80 $ 25.52 $ 23.59 21.14
Outparcels 6,790 -- 6,790 13.69 -- 13.69 7.24
------- ------- ------- ------- ------- ------- -------
60,475 20,352 80,827 20.72 25.52 21.93 10.18
------- ------- ------- ------- ------- ------- -------
Community
Shopping Centers:
Anchors 134,667 -- 134,667 8.50 -- 8.50 4.33
Stores 70,831 17,453 88,284 6.56 $ 9.51 7.14 8.09
Outparcels -- -- -- -- -- -- 8.71
------- ------- ------- ------- ------- ------- -------
205,498 17,453 222,951 7.83 9.51 7.96 5.22
------- ------- ------- ------- ------- ------- -------
Single Tenant
Retail Properties: -- -- -- -- -- -- 4.27
------- ------- ------- ------- ------- ------- -------
Total 265,973 37,805 303,778 $ 10.76 $ 18.13 $ 11.68 $ 6.57
======= ======= ======= ======= ======= ======= =======
</TABLE>
FUNDS FROM OPERATIONS
Management considers funds from operations (the "FFO") to be a
supplemental measure of the Company's operating performance. FFO, as modified in
January 1996 by NAREIT is defined as net income (computed in accordance with
GAAP), excluding gains or losses from debt restructuring, plus real estate
depreciation and amortization and minority interest in partnerships. FFO does
not represent cash generated from operating activities in accordance with GAAP
and is not necessarily indicative of cash available to fund cash needs. FFO
should not be considered as an alternative to net income as the primary
indicator of the Company's operating performance or as an alternative to cash
flow as a measure of liquidity.
The following table illustrates the calculation of FFO for the three and six
months ended June 30, 1996 and 1995:
<TABLE>
<CAPTION>
1996 NAREIT FFO DEFINITION
-------------------------------------------------
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income ................................... $ 6,802 $ 4,894 $13,214 $10,317
Add back:
Real estate depreciation and amortization 4,859 4,460 9,583 8,801
Litigation settlement ................... 98 243
Minority interest in partnership ........ 826 683 1,577 1,460
------- ------- ------- -------
Funds from operations ........................ $12,487 $10,135 $24,374 $20,821
======= ======= ======= =======
Weighted average shares/units outstanding .... 24,492 21,118 24,491 21,041
======= ======= ======= =======
</TABLE>
19
<PAGE> 20
FFO increased 23.2%, or $2.4 million, for the three months ended June
30, 1996. The increase was the result of interest expense savings of $730,000,
the gain on the sales of two outparcels of $1.1 million, improved revenues net
of operating expense increases of $200,000, with the balance representing
primarily litigation cost and non-real estate depreciation items for 1995 which
were not incurred in 1996.
FFO increased 17.3%, or $3.6 million, for the six months ended June 30,
1996. The increase was the result of interest expense savings of $1.4 million,
the gain on the sales of two outparcels of $1.1 million, improved revenues net
of operating expense increases of $1.0 million, with the balance representing
primarily litigation cost and non-real estate depreciation items for 1995 which
were not incurred in 1996.
INFLATION
Inflation has remained relatively low during the past three years and
has had a minimal impact on the Company's properties. Nonetheless, substantially
all of the tenants' leases contain provisions designed to lessen the impact of
inflation. Such provisions include clauses enabling the Company to receive
percentage rentals based on tenants' gross sales, which generally increase as
prices rise, and/or escalation clauses, which generally increase rental rates
during the terms of the leases. In addition, many of the leases are for terms of
less than 10 years, which may enable the Company to replace existing leases with
new leases at higher base and/or percentage rentals if rents of the existing
leases are below the then-existing market rate. Substantially all of the leases,
other than those for anchors, require the tenants to pay a proportionate share
of operating expenses, including common area maintenance, real estate taxes and
insurance, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation.
However, inflation may have a negative impact on some of the Company's
other operating items. Interest expense and general and administrative expenses
may be adversely affected by inflation as these specified costs could increase
at a rate higher than rents. Also, for tenant leases with stated rent increases,
inflation may have a negative effect as the stated rent increases in these
leases could be lower than the increase in inflation at any given time.
OTHER
The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season, when tenant occupancy and retail sales
are typically at their highest levels. In addition, shopping malls achieve most
of their temporary tenant rents during the holiday season. As a result of the
above, earnings are generally highest in the fourth quarter of each year.
The retail industry has experienced some difficulty, which is reflected
in sales trends and in the bankruptcies and continued restructuring of several
prominent retail organizations. Continuation of these trends could impact future
earnings performance.
20
<PAGE> 21
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Litigation
In May 1996, ACPA Fund II, Ltd. and various individual
investors of certain limited partnerships (collectively, "Plaintiffs")
commenced a lawsuit, ACPA Fund II, Ltd., et al. v. Dennis Landsberg, et
al. ("Lawsuit"), against various defendants, including Glimcher
Entities, that is pending in the United States District Court for the
Southern District of Texas, Houston Division. Joint consent has been
obtained to transfer venue of the Lawsuit to the United States District
Court for the Southern District of New York.
The complaint alleges that the partnerships' general partner,
Washington General Corp., and its corporate parent, Concord Assets
Group, Inc., breached their fiduciary duty and defrauded the Plaintiffs
by selling retail properties to GHLP for low prices, without adequately
taking into account the tax consequences of the sales. Those claims are
also asserted against the Glimcher Entities alleging that they had
knowledge of the facts and failed to disclose or take other action. The
complaint seeks compensatory and punitive damages against all the
defendants in an unspecified amount and rescission of the sale of the
two single tenant retail properties.
At this stage of the proceedings, the Glimcher Entities
maintain that the claims against them are not meritorious and intend to
vigorously defend themselves in the Lawsuit. The Glimcher Entities will
seek indemnification and contributions against all co-defendants, and
with respect to the rescission claims, indemnification pursuant to the
title policies obtained by the Glimcher Entities in connection with the
acquisition of the retail properties.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An Annual meeting of shareholders was held on May 23,
1996. Proxies for the meeting were solicited by the registrant pursuant
to Regulation 14 under the Securities Exchange Act of 1934. In
connection with Proposal 1 regarding the election of trustees, there
was no solicitation in opposition to the management's nominees as
listed in the proxy statement and all of such nominees were elected.
There were no broker non-votes in connection with such proposal.
Votes of 11,874,983 shares were cast for the election of
William R. Husted as a Trustee; votes of 61,430 shares were withheld.
Votes of 11,871,443 shares were cast for the election of
Alan R., Weiler as a Trustee; votes of 64,970 shares were withheld.
21
<PAGE> 22
In connection with Proposal 2, there was no solicitation
in opposition of the ratification of the appointment of the Company's
independent public accountants as set forth in the proxy statement and
such appointment was ratified.
Votes of 11,882,001 shares were cast for the ratification
of the appointment of Coopers & Lybrand L.L.P. as the Company's
independent public accounts; votes of 19.324 shares were against; and
votes of 33,088 shares abstained. In addition, there were 33,088 broker
non-votes in connection with such proposal.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits - None
No reports on Form 8-K were filed during the quarter ended
June 30, 1996.
22
<PAGE> 23
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.
8/2/96 /s/DAVID J. GLIMCHER
- - ---------------- -----------------------------------------------------
(Date) David J. Glimcher
Chief Executive Officer
8/2/96 /s/TERRY A. SCHREINER
- - ---------------- -----------------------------------------------------
(Date) Terry A. Schreiner
Chief Financial Officer
23
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,706
<SECURITIES> 0
<RECEIVABLES> 17,580
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 757,368
<DEPRECIATION> 75,845
<TOTAL-ASSETS> 747,858
<CURRENT-LIABILITIES> 0
<BONDS> 298,896
0
0
<COMMON> 219
<OTHER-SE> 316,673
<TOTAL-LIABILITY-AND-EQUITY> 747,858
<SALES> 0
<TOTAL-REVENUES> 54,343
<CGS> 0
<TOTAL-COSTS> 17,218
<OTHER-EXPENSES> 10,701
<LOSS-PROVISION> 1,008
<INTEREST-EXPENSE> 12,963
<INCOME-PRETAX> 13,214
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,214
<EPS-PRIMARY> 0.60
<EPS-DILUTED> 0.60
</TABLE>
