SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K / A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 23, 1996
(Date of Earliest Event Reported)
Commission File No. 1-12590
GABLES RESIDENTIAL TRUST
A MARYLAND CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO. 58-2077868
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
TELEPHONE: (770) 436-4600
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
- ---- -- ------------------------------------
On April 23, 1996, Gables Residential Trust (collectively with its subsidiaries,
the "Company") through Gables GP, Inc., (a wholly-owned subsidiary of the
Company and the general partner of Gables Realty Limited Partnership) and Gables
Realty Limited Partnership (the "Operating Partnership", of which the Company
owns the sole general partner and holds an approximate 82.9% economic interest),
acquired all of the partnership interests in two Texas general partnerships, Pin
Oak Green and Pin Oak Park Apartments for $65.3 million. Each acquired
partnership owns a multifamily apartment community located in Houston, Texas,
collectively comprising 1,059 apartment homes in total. The occupancy rate of
the 1,059 apartment homes was approximately 89% as of April 23, 1996.
The acquisition was financed primarily through borrowings under the Company's
$175 million unsecured revolving credit facility with Wachovia Bank of Georgia,
N.A., as agent bank, and four other participant banks.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
- ------- ---------------------------------
(a) FINANCIAL STATEMENTS OF PARTNERSHIPS ACQUIRED
The financial statements required by Item 7(a) relating to the acquisition
of Pin Oak Green and Pin Oak Park Apartments described in Item 2 of this filing
are attached hereto as Exhibit 99.1 and incorporated herein by this reference.
(b) PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information required by Item 7(b)
relating to the acquisition of Pin Oak Green and Pin Oak Park Apartments
described in Item 2 of this filing is attached hereto as Exhibit 99.2 and
incorporated herein by this reference.
(c) EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ----------------------------------------------------
99.1 Financial statements required by Item 7(a)
99.2 Pro forma financial information required by Item 7(b)
23.1 Consent of Independent Public Accountants
<PAGE>
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 hereunto duly authorized.
GABLES RESIDENTIAL TRUST
Date: July 2, 1996 By:/s/ Marvin R. Banks, Jr.
-------------------------
Marvin R. Banks, Jr.
Vice President and Chief
Financial Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
99.1 Financial statements required by Item 7(a) 6
99.2 Pro forma financial information required by Item 7(b) 10
23.1 Consent of Independent Public Accountants 17
EXHIBIT 99.1
COMBINED STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR PIN OAK GREEN AND PIN OAK PARK APARTMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1995
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees and Shareholders of Gables Residential Trust:
We have audited the accompanying combined statement of excess of revenues over
specific operating expenses of Pin Oak Green and Pin Oak Park Apartments (the
"Partnerships") for the year ended December 31, 1995. This financial statement
is the responsibility of the Partnerships' management. Our responsibility is to
express an opinion on this financial statement 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 combined statement of excess of revenues over
specific operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the
Partnerships after acquisition by the Company. The accompanying financial
statement was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and is not intended to be
a complete presentation of the Partnerships' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of expenses described in Note 2) of Pin Oak Green and Pin Oak Park
Apartments for the year ended December 31, 1995 in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP
Atlanta, Georgia
June 22, 1996
<PAGE>
<TABLE>
PIN OAK GREEN AND PIN OAK PARK APARTMENTS
COMBINED STATEMENTS OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31,1995
(AMOUNTS IN THOUSANDS)
<CAPTION>
Three Months
Ended
March 31, Year Ended
1996 December 31,
(UNAUDITED) 1995
------------ -----------
<S> <C> <C>
REVENUES:
Rental revenues (Note 1) $2,372 $9,200
Other property revenues 37 140
------ -------
Total property revenues 2,409 9,340
SPECIFIC OPERATING EXPENSES (NOTE 2):
Property operating and maintenance 843 3,414
------ -------
EXCESS OF REVENUES OVER SPECIFIC OPERATING
EXPENSES $1,566 $5,926
======= =======
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>
PIN OAK GREEN AND PIN OAK PARK APARTMENTS
NOTES TO COMBINED STATEMENTS OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 1996 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 1995
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
- -- ------------------------------------------------
DESCRIPTION OF PARTNERSHIPS ACQUIRED
On April 23, 1996, Gables Residential Trust (collectively with its
subsidiaries, the "Company") through Gables GP, Inc., (a wholly-owned
subsidiary of the Company and the general partner of Gables Realty Limited
Partnership) and Gables Realty Limited Partnership (the "Operating
Partnership", of which the Company owns the sole general partner and holds an
approximate 82.9% economic interest), acquired all of the partnership
interests in two Texas general partnerships, Pin Oak Green and Pin Oak Park
Apartments for $65.3 million. Each acquired partnership owns a multifamily
apartment community located in Houston, Texas, collectively comprising 1,059
apartment homes in total. The occupancy rate of the 1,059 apartment homes was
approximately 89% as of April 23, 1996.
The acquisition was financed primarily through borrowings under the Company's
$175 million unsecured revolving credit facility with Wachovia Bank of
Georgia, N.A., as agent bank, and four other participant banks.
RENTAL REVENUE RECOGNITION
The apartment communities are leased under operating leases with terms
generally equal to one year or less. Rental revenue is recognized when earned
which materially approximates revenue recognition on a straight-line basis.
2. BASIS OF ACCOUNTING
- -- -------------------
The accompanying combined statements of excess of revenues over specific
operating expenses are presented on the accrual basis. These statements have
been prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired.
Accordingly, the statements exclude certain historical expenses not
comparable to the operations of the partnerships after acquisition, such as
depreciation, interest, management fees, and certain legal fees.
EXHIBIT 99.2
GABLES RESIDENTIAL TRUST
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The unaudited consolidated statements of operations are presented as if the
Company acquired Pin Oak Green and Pin Oak Park Apartments as of the beginning
of each period presented. In management's opinion, all adjustments necessary to
present fairly the effects of the partnership acquisitions have been made.
The unaudited pro forma consolidated statements of operations are not
necessarily indicative of what the actual results of operations of the Company
would have been assuming the Company had acquired the partnerships as of the
beginning of each period presented, nor do they purport to represent the results
of operations for future periods.
<PAGE>
<TABLE>
GABLES RESIDENTIAL TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
<CAPTION>
PIN OAK
GREEN & ADDITIONAL
COMPANY PIN OAK PARK PRO FORMA COMPANY
HISTORICAL APARTMENTS ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Rental revenues ....................................... $ 22,139 $ 2,372 (A) $ $ 24,511
Other property revenues ............................... 1,061 37 (A) 1,098
------ ------ ------- --------
Total property revenues .............................. 23,200 2,409 25,609
Property management - third party ..................... 980 980
Other ................................................. 262 262
------ ------ ------- --------
Total revenues ....................................... 24,442 2,409 26,851
------ ------ ------- --------
Property operating and maintenance
(exclusive of items shown separately below)........... 8,070 843 (A) 8,913
Depreciation and amortization ......................... 3,732 445 (B) 4,177
Amortization of deferred financing costs .............. 350 350
Property management - owned ........................... 657 657
Property management - third party ..................... 769 769
General and administrative ............................ 713 713
Abandoned real estate pursuit costs ................... 1 1
Interest .............................................. 3,808 1,161 (C) 4,969
Credit enhancement fees ............................... 164 164
------ ------ ------- --------
Total expenses ....................................... 18,264 843 1,606 20,713
------ ------ ------- --------
Income before equity in income
of joint ventures and interest income ................ 6,178 1,566 (1,606) 6,138
Equity in income of joint ventures .................... 49 49
Interest income ....................................... 99 99
-------- ------ ------- --------
Income before minority interest
and extraordinary loss, net .......................... 6,326 1,566 (1,606) 6,286
Minority interest of unitholders
in Operating Partnership ............................. (1,126) 7 (D) (1,119)
-------- ------ ------- -------
Income before extraordinary loss, net ................. 5,200 1,566 (1,599) 5,167
Extraordinary loss, net of minority interest .......... (520) (520)
-------- ------ ------- -------
Net income ............................................ $ 4,680 $1,566 ($1,599) $ 4,647
======== ====== ======== =======
Weighted average number of shares outstanding ......... 15,293 15,293
======== =======
PER SHARE INFORMATION:
Income before extraordinary loss, net ................. $ 0.34 $ 0.34
======== ========
Net income ............................................ $ 0.31 $ 0.30
======== ========
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<PAGE>
<TABLE>
GABLES RESIDENTIAL TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1995
(UNAUDITED AND AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
<CAPTION>
PIN OAK
GREEN & ADDITIONAL
COMPANY PIN OAK PARK PRO FORMA COMPANY
HISTORICAL APARTMENTS ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Rental revenues ........................... $ 72,703 $9,200 (A) $ $ 81,903
Other property revenues ................... 3,268 140 (A) 3,408
-------- ------ ------ --------
Total property revenues .................. 75,971 9,340 85,311
Property management - third party ......... 4,289 4,289
Other ..................................... 1,500 1,500
-------- ------ ------ --------
Total revenues ........................... 81,760 9,340 91,100
-------- ------ ------ --------
Property operating and maintenance
(exclusive of items shown separately below) 28,228 3,414 (A) 31,642
Depreciation and amortization ............. 12,669 1,778 (B) 14,447
Amortization of deferred financing costs .. 932 932
Property management - owned ............... 2,170 2,170
Property management - third party ......... 3,178 3,178
General and administrative ................ 2,736 2,736
Abandoned real estate pursuit costs ....... 133 133
Interest .................................. 13,088 4,642 (C) 17,730
Credit enhancement fees ................... 710 710
-------- ------ ------- --------
Total expenses ........................... 63,844 3,414 6,420 73,678
-------- ------ ------- --------
Income before equity in income
of joint ventures and interest income .... 17,916 5,926 (6,420) 17,422
Equity in income of joint ventures ........ 64 64
Interest income ........................... 389 389
-------- ------ ------- --------
Income before minority interest
and extraordinary loss, net .............. 18,369 5,926 (6,420) 17,875
Minority interest of unitholders in
Operating Partnership .................... (4,029) 108 (D) (3,921)
-------- ------ ------- --------
Income before extraordinary loss, net ..... 14,340 5,926 (6,312) 13,954
Extraordinary loss,
net of minority interest ................ (784) (784)
-------- ------ ------- --------
Net income ................................ $ 13,556 $5,926 ($6,312) $ 13,170
======== ====== ======== ========
Weighted average number of shares
outstanding ............................... 11,436 11,436
======== ========
PER SHARE INFORMATION:
Income before extraordinary loss, net ..... $ 1.25 $ 1.22
======== ========
Net income ................................ $ 1.19 $ 1.15
======== ========
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<PAGE>
Gables Residential Trust
Notes and Assumptions to Unaudited Pro Forma
Consolidated Statements of Operations
(Dollars in Thousands)
(A)Reflects rental revenues, other property revenues and property operating and
maintenance expenses (exclusive of depreciation expense) for Pin Oak Green
and Pin Oak Park Apartments (the "Partnerships") acquired on April 23, 1996.
(B)Reflects depreciation expense for the Partnerships acquired on April 23,
1996.
(C)Reflects interest expense associated with borrowings under the Company's
unsecured revolving credit facility which were utilized to acquire the
Partnerships. The Company's borrowings bear interest at LIBOR plus 1.65%. If
interest rates under the unsecured revolving credit facility fluctuated
0.125%, interest costs on the pro forma credit facility indebtedness would
increase or decrease by approximately $82 on an annualized basis.
(D)Reflects the portion of all of the preceding pro forma adjustments
attributable to the minority interest unitholders in the Operating
Partnership.
<PAGE>
Gables Residential Trust
Pro Forma Consolidated Balance Sheet
As of March 31, 1996
(Unaudited and amounts in thousands, except per share amounts)
The unaudited pro forma consolidated balance sheet is presented as if the April
23, 1996 acquisition of Pin Oak Green and Pin Oak Park Apartments had occurred
as of March 31, 1996.
The unaudited pro forma consolidated balance sheet is not necessarily indicative
of what the actual financial position would have been at March 31, 1996 nor does
it purport to represent the future financial position of the Company.
<TABLE>
<PAGE>
GABLES RESIDENTIAL TRUST
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED AND DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
PRO FORMA
COMPANY ACQUISITION COMPANY
HISTORICAL ADJUSTMENTS (A) PRO FORMA
---------- --------------- ---------
<S> <C> <C> <C>
ASSETS:
Real estate assets:
Land $75,975 $13,745 $89,720
Building 417,449 48,786 466,235
Furniture, fixtures and equipment 35,981 2,791 38,772
Construction in progress 74,903 74,903
Land held for future development 2,148 2,148
------- ------ -------
Real estate assets before accumulated
depreciation 606,456 65,322 671,778
Less: accumulated depreciation (60,974) (60,974)
------- ------ -------
Net real estate assets 545,482 65,322 610,804
Cash and cash equivalents 8,509 8,509
Restricted cash 4,597 4,597
Deferred charges, net 5,858 5,858
Other assets, net 9,358 (250) 9,108
------ ------ -----
Total assets $573,804 $65,072 $638,876
======= ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
- -------------------------------------
Notes payable $286,050 $64,327 $350,377
Accrued interest payable 1,604 1,604
Dividend payable 7,724 7,724
Real estate taxes payable 2,774 335 3,109
Accounts payable and accrued expenses -
construction 5,756 5,756
Accounts payable and accrued expenses -
operating 2,869 2,869
Security deposits 1,370 410 1,780
------- ------ ------
Total liabilities 308,147 65,072 373,219
------- ------ ------
Minority interest of unitholders in
Operating Partnership 46,639 46,639
------- ------ -------
Shareholders' equity:
Common shares, $0.01 par value, 100,000,000
shares authorized, 16,091,923 shares
issued and outstanding at March 31, 1996 161 161
Additional paid-in capital 268,760 268,760
Accumulated earnings (deficit) (49,903) (49,903)
-------- -------- --------
Total shareholders' equity 219,018 219,018
-------- ------- --------
Total liabilities and shareholders' equity $573,804 $65,072 $638,876
======== ======= ========
<FN>
The accompanying notes are an integral part of this balance sheet.
</FN>
</TABLE>
<PAGE>
GABLES RESIDENTIAL TRUST
Notes and Assumptions to Unaudited Pro Forma Consolidated Balance Sheet
(A)Reflects the April 23, 1996 acquisition of Pin Oak Green and Pin Oak Park
Apartments, the related application of the earnest money deposit to the
purchase price and the assumption of the security deposit and real estate tax
liabilities.
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 8-K/A, into the Company's previously filed
Registration Statements on Form S-8 (File Nos. 333-00618 and 33-83054) and Form
S-3 (File Nos. 33-90032,33-89000, 33-93672 and 333-40).
/s/ Arthur Andersen LLP
Atlanta, Georgia
July 2, 1996
