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) February 11, 1997
(February 26, 1997)
AMERICAN ASSET ADVISERS TRUST, INC.
(Name of registrant as specified in its charter)
Maryland 0-28378 76-0410050
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
8 Greenway Plaza, Suite 824, Houston, Texas 77046
(Address of principal executive office and zip code)
Registrant's telephone number, including area code: (713) 850-1400
ITEM 1. CHANGES OF CONTROL OF REGISTRANT
Not Applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 11, 1997, American Asset Advisers Trust, Inc. (the
"Registrant") entered into a joint venture (the "Joint Venture") with
AAA Net Realty Fund XI, Ltd. ("AAA XI"). The purpose of the Joint
Venture is to purchase fee simple title to real estate and improvements
located at the intersection of Promenade Avenue and Cortana Place, Baton
Rouge, Louisiana, on which there is being constructed a Just For Feet
Shoe Store (the "Property"). The Registrant owns 51% of the Joint
Venture. AAA XI owns 49% of the Joint Venture.
The cost to acquire the Property will be approximately
$2,670,000.00. The exact cost of acquisition will be calculated when
the improvements are completed. The purchase price will be paid in cash
entirely from funds of the members of the Joint Venture, based upon each
member's percentage of ownership in the Joint Venture. The Property
will be operated as a Just For Feet Shoe Store. The Property, when
construction is completed, will consist of a free standing, masonry
building containing approximately 15,675 square feet on the first floor
and approximately 4,900 square feet on the mezzanine level, located on
a tract of land containing approximately 1.735 acres.
The Registrant's cost for its 51% share of the Property will be
$1,361,700. In addition, management estimates that $13,617 will be paid
in acquisition fees to third parties and $68,085 will be paid in
acquisition fees to an affiliate.
The Property will be acquired subject to a lease (the "Lease") with
Just for Feet, Inc., an Alabama corporation. Under the terms of the
Lease, the tenant pays a base rent, plus real estate taxes, hazard and
liability insurance premiums, all utility costs, and the costs of most
of the maintenance and repairs to the improvements.
Other significant provisions of the Lease are as follows:
1. The original term of the Lease is fifteen (15) years. The
original term of the Lease will begin on approximately May 15,
1997, and will expire on approximately May 31, 2012. The
tenant has the option to renew the lease for two (2)
additional terms of five (5) years each.
2. Base annual minimum rent during the first five (5) years of
the original term of the Lease will be approximately
$285,963.00. The actual rent cannot be established until the
improvements are completed and the square footage on the first
floor of the building is calculated. The base annual minimum
rent will be increased at the beginning of the sixth (6th) and
eleventh (11th) lease years by three (3) times the percentage
increase in the Consumer Price Index for all Urban Consumers,
U.S. City Average, during the previous five (5) years, limited
to ten percent (10%) each time. During the two (2) renewal
terms the rent will be increased using the same formula used
in the sixth (6th) and eleventh (11th) years of the Lease.
3. In addition to the base rent, the tenant pays all real estate
taxes on the Property. The tenant also pays for all utilities
charges.
4. The landlord is required to maintain and repair the
foundation, structural systems (including roof structure, roof
covering, load bearing walls and floor slabs), building
exterior and masonry walls. The landlord is also required to
repair any latent defects which are discovered during a one
year period following the time the improvements are turned
over to the tenant. The tenant is required to maintain and
repair everything that the landlord is not.
5. The tenant has the right to use the Property for retail sale
of athletic footwear and athletic apparel and related athletic
accessories.
6. The tenant may not assign the Lease or sublet the Property
without the prior written consent of the landlord. However,
in the event of an assignment or sublet, the tenant will
remain as the principal obligor under the Lease.
7. The tenant is required to reimburse the landlord for the
premiums paid for liability insurance and extended coverage
hazard insurance.
8. In the event there is casualty damage that cannot be repaired
in one hundred eighty (180) days, either the landlord or the
tenant may terminate the Lease. If the Lease is terminated,
the landlord will retain all insurance proceeds.
9. In the event that all or substantially all of the Property is
taken by condemnation, then the Lease shall terminate. In the
event that the Property is still reasonably tenantable and
suitable for the purposes set forth in the Lease after a
condemnation, then the rent shall be proportionately reduced
during the unexpired portion of the Lease.
There are no retail athletic shoe stores in the immediate vicinity
of the Property.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable
ITEM 5. OTHER EVENTS
Not Applicable
ITEM 6. RESIGNATION OF REGISTRANT'S GENERAL PARTNER
Not Applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The tenant of the Property is Just for Feet, Inc. ("Just for
Feet"), an Alabama corporation. With respect to Just for Feet, as
reported by its management, consolidated sales revenues totaled
$119,819,000 for the year ended January 31, 1996. Just for Feet
recorded consolidated net earnings of $9,722,000 for the same period.
Current assets at January 31, 1996, exceeded current liabilities by
$108,303,500 and total assets exceeded total liabilities by
$149,269,800. It is the opinion of the management of The Registrant,
following review of the financial statements of Just for Feet, that Just
for Feet's financial condition is sufficient to meet the investment
criteria of The Registrant. Persons interested in receiving copies of
Just for Feet's publicly issued financial statements for the year ended
January 31, 1996 should contact American Asset Advisers Trust, Inc.
PRO-FORMA FINANCIAL INFORMATION
The following table presents unaudited pro-forma financial
information for American Asset Advisers Trust, Inc., giving effect to
the acquisition of the Property. The acquisition is reflected on a
consolidated basis. Pro-forma consolidated results of operations are
not included to reflect the effect of the Just For Feet property as the
building has not been completed.
PRO-FORMA CONSOLIDATED BALANCE SHEET
December 31, 1996
(unaudited)
Historical Pro-Forma
Costs Adjustments (1) Total
Cash $ 1,616,311 $<1,375,317> (2) $ 240,994
Property $12,102,195 $ 2,830,200 (2) $14,932,395
Other
Assets $ 408,328 $ <68,085> (2) $ 340,243
Total
Assets $14,126,834 $ 1,386,798 $15,513,632
Liabilities $ 201,285 - $ 201,285
Minority
Interest $ 3,631,847 $ 1,386,798 (2) $ 5,018,645
Shareholders'
Equity $10,293,702 $ _ $10,293,702
Total
Liabilities
and
Shareholders'
Equity $14,126,834 $ 1,386,798 $15,513,632
(1) Adjustments are reflected as if the property acquisition
discussed in (2) below was completed on December 31, 1996.
(2) Includes total acquisition costs of $2,830,200 for the
Property, the minority partner's share of $1,386,798,
acquisition costs of $68,085 to be paid by The Registrant to
an affiliate and $1,375,317 funds to be paid by The Registrant
for its portion of the acquisition.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
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.
American Asset Advisers Trust, Inc.
Date: February 26, 1997 /s/ H. Kerr Taylor
H. Kerr Taylor, President
Date: February 26, 1997 /s/ H. Kerr Taylor
H. Kerr Taylor, Chief Financial
Officer
