SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 1, 1998
GABLES RESIDENTIAL TRUST
(Exact name of Registrant as specified in its charter)
Maryland 1-12590 58-2077868
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2859 Paces Ferry Road, Suite 1450
Atlanta, Georgia 30339
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
770-436-4600
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Gables Residential Trust (the "Company") is a self-administered and self-
managed real estate investment trust. Substantially all of the Company's
business is conducted through, and all of the Company's interests in property
are held by or through, Gables Realty Limited Partnership (the "Operating
Partnership"), of which the Company is currently a 77.5% economic owner
(excluding the Company's direct or indirect ownership of 100% of the Operating
Partnership's Series A Preferred Units) and which the Company controls through
Gables GP, Inc., a wholly-owned subsidiary of the Company and the sole general
partner of the Operating Partnership. The term "Company" as used herein means
Gables Residential Trust and its subsidiaries on a consolidated basis (including
the Operating Partnership and its subsidiaries).
On April 1, 1998, the Company consummated the acquisition of the properties and
operations of Trammell Crow Residential South Florida ("TCR/SF"), consisting of
15 multifamily apartment communities (the "South Florida Communities")
containing a total of 4,197 apartment homes (assuming completion of two South
Florida Communities currently under construction), and all of TCR/SF's
residential construction and development and third-party management activities
in South Florida. Such acquisition was made pursuant to a Contribution Agreement
dated March 16, 1998 (the "Contribution Agreement") between the Company and the
Operating Partnership and certain entities affiliated with TCR/SF (the
"Sellers"). The South Florida Communities are located in Palm Beach County,
Broward County and Dade County and encompass the metropolitan areas of Palm
Beach, Fort Lauderdale and Miami, respectively.
The Company acquired the South Florida Communities, the third-party management
business and other properties and assets of TCR/SF in exchange for (i) $155.0
million in cash, (ii) the assumption of approximately $135.9 million of
tax-exempt debt and (iii) the initial issuance of 2,348,416 limited partnership
units of the Operating Partnership ("Units"). In addition, approximately $12.5
million of the purchase price will be retained by the Company until January 1,
2000, at which time the Company will issue to certain of the Sellers a number of
Units (the "Deferred Units") equal in value to such retained amount (subject to
possible decrease pursuant to the terms of the Contribution Agreement). The
Deferred Units will be valued based on the average of the closing prices of the
Company's common shares of beneficial interest, par value $.01 per share, on the
New York Stock Exchange during a 15 trading day period preceding the date of
issuance. The cash portion of the purchase price was financed through borrowings
under (i) the Company's $175 million unsecured revolving credit facility with
Wachovia Bank of Georgia, N.A. ("Wachovia"), as agent bank, and four other
participant banks and (ii) the Company's $20 million unsecured revolving credit
facility with Wachovia.
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The Contribution Agreement was negotiated at arms length between the Company and
representatives of the Sellers. Neither the Company, any subsidiary of the
Company nor any director or officer of the Company was affiliated with or had a
material relationship with the Sellers. In determining the price to purchase the
assets and organization of TCR/SF, the Company evaluated various components of
the transaction, including, among others, the South Florida Communities, ongoing
expertise and development pipeline, the third-party management and brokerage
business and the tax-exempt bond financing to be assumed. The majority of the
purchase price pertained to the South Florida Communities. In assessing the
South Florida Communities acquired, the Company's management considered the
existing leases, which are the primary source of revenue, the occupancy rates,
the competitive nature of the markets and comparative rental rates. Furthermore,
current and anticipated operating expenses, maintenance and repair costs, real
estate taxes and capital improvement requirements were evaluated. In assessing
the third-party management business acquired, the Company's management
considered the existing contracts, which are the primary source of revenue, and
the related costs necessary to manage that business.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired:
Financial statements for TCR/SF will be filed by amendment as soon as
practicable, but not later than June 15, 1998.
(b) Pro Forma Financial Information:
Pro forma financial information will be filed by amendment as soon as
practicable, but not later than June 15, 1998.
(c) Exhibits:
Exhibit No.
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10.1 Contribution Agreement dated March 16, 1998 (incorporated herein by
reference to the Company's Current Report on Form 8-K dated March 16, 1998
(File No. 1-12590)).
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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 hereunto duly authorized.
Date: April 16, 1998 GABLES RESIDENTIAL TRUST
/s/ Marvin R. Banks, Jr.
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By: Marvin R. Banks, Jr.
Chief Financial Officer
