<PAGE> 1
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): DECEMBER 16, 1998
SUMMIT PROPERTIES INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in charter)
MARYLAND 1-12792 56-1857807
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission File Number) (IRS employer
of incorporation) identification no.)
212 SOUTH TRYON STREET, SUITE 500, CHARLOTTE, NC 28281
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(704) 334-9905
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Summit Properties Partnership, L.P., a Delaware limited partnership (the
"Partnership"), is the entity through which Summit Properties Inc., a
Maryland corporation (together with the Partnership, "Summit
Properties") conducts substantially all of its business and owns (either
directly or through subsidiaries) substantially all of its assets. On
December 16, 1998, Summit Properties (i) sold five communities (the "
Sold Communities") to Hollow Creek, L.L.C., a newly-formed North
Carolina limited liability company, and (ii) contributed two communities
(together with the Sold Communities, the "Communities") to Station Hill,
L.L.C., a newly-formed North Carolina limited liability company (the
"LLC"), for a total sales price of approximately $90 million. On the
same date, Hollow Creek, L.L.C. contributed the Sold Communities to the
LLC. The LLC is a joint venture limited liability company, the
membership of which is comprised of Summit Properties and a wholly owned
subsidiary of a major financial services company (the "Joint Venture
Member"). The disposition was effected pursuant to a Real Estate Sale
Agreement dated November 20, 1998 between the Partnership and the Joint
Venture Member and pursuant to the Operating Agreement of the LLC, also
dated November 20, 1998. Proceeds from the sale will be used to pay down
Summit Properties' unsecured line of credit and fund its ongoing
development efforts.
Summit Properties' net cash contribution to the LLC (approximately $5
million) represents a 25 percent equity interest in the LLC. In
addition, Summit Properties is the managing member of the LLC and will
also retain management of the Communities through a management agreement
with the LLC. The cash flow of the LLC will be distributed pro rata to
each member based on its equity contribution until certain economic
benchmarks are achieved, at which point Summit Properties will receive
an escalated portion of the cash flow and residual interest. The LLC has
obtained five separate mortgages totaling $70,150,000 from Fannie Mae.
These mortgages have a ten-year maturity and a 6.70% interest rate.
The Communities involved in the transaction were Summit Green in
Charlotte, North Carolina, Summit Hollow I and II in Charlotte, North
Carolina, Summit Creek in Charlotte, North Carolina, Summit Hill I and
II in Raleigh, North Carolina and Summit Station in Tampa, Florida. In
total, these Communities include 1,433 apartment homes, translating into
an average sales price of approximately $63,000 per home.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements under Rule 3-14 of Regulation S-X
Not Applicable
(b) Pro Forma Financial Information
Summit Properties Inc.
Pro Forma Condensed Combined Balance Sheet as of
September 30, 1998 (Unaudited)
Pro Forma Condensed Combined Statement of Earnings for the
Nine Months Ended September 30, 1998 (Unaudited)
Pro Forma Condensed Combined Statement of Earnings for the
Year Ended December 31, 1997 (Unaudited)
<PAGE> 3
(c) Exhibits:
2.1 Real Estate Sale Agreement dated November 20, 1998
Between Summit Properties Partnership, L.P. and Hollow
Creek, L.L.C. Exhibits to this Agreement which have been
omitted shall be supplementally furnished to the
Commission upon request. (Incorporated by reference to
Exhibit 2.1 of Summit Properties Partnership, L.P.'s
Current Report on Form 8-K filed on December 18, 1998,
File No. 0-22411)
10.1 Operating Agreement dated November 20, 1998 Between
Summit Properties Partnership, L.P., Hollow Creek,
L.L.C. and Station Hill L.L.C. Exhibits to this
Agreement which have been omitted shall be
supplementally furnished to the Commission upon request.
(Incorporated by reference to Exhibit 10.1 of Summit
Properties Partnership, L.P.'s Current Report on Form
8-K filed on December 18, 1998, File No. 0-22411)
<PAGE> 4
SUMMIT PROPERTIES INC.
BASIS OF PRESENTATION TO PROFORMA CONDENSED
COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
The Pro Forma Condensed Combined Balance Sheet gives effect to (i) the sale of
five communities to Hollow Creek LLC (which were concurrently contributed by
Hollow Creek LLC to Station Hill LLC) and the concurrent contribution of two
communities to Station Hill LLC, in which the Company maintains a 25% ownership
interest (the "Joint Venture Disposition"), (ii) the acquisition of a portfolio
of multifamily properties in Texas (the "Ewing Acquisition") through a merger
with Ewing Industries Inc. and affiliates thereof ("Ewing Industries") on
November 4, 1998 and (iii) the sale of communities formerly known as Summit
Springs and Summit Old Town. The Ewing Acquisition was funded through (i) the
issuance to Ewing Industries of 489,622 shares of common stock ("Shares") of
Summit Properties Inc. (the "Company") and 141,921 units of limited partnership
interest ("Units") of Summit Properties Partnership, L.P.(the "Operating
Partnership") with the Shares and Units valued at the Company's approximate
market value of $18.00 on the consummation date, (ii) the assumption of $79.9
million of debt, and (iii) the payment of $50.6 million in cash. In addition,
the Company has committed to issue 519,365 Shares as a deposit for a property
currently in lease-up, with respect to which payment of the final consideration
is contingent upon the property reaching stabilization (the "Contingent
Property"). The current estimate of additional consideration to be paid at such
time is (i) 1,030,009 Shares of common stock and 36,629 Units (each Share and
Unit valued at $18.00) and (ii) cash in the amount of $1,314,144. The Joint
Venture Disposition, the Ewing Acquisition, excluding the Contingent Property
and the sale of Summit Springs and Summit Old Town have been presented as if the
transactions had occurred on September 30, 1998. The Pro Forma Condensed
Combined Balance Sheet gives effect to the Ewing Acquisition under the purchase
method of accounting in accordance with Accounting Principles Board Opinion No.
16. In the opinion of management, all significant adjustments necessary to
reflect the effects of the Joint Venture Disposition and the Ewing Acquisition
have been made.
The Pro Forma Condensed Combined Balance Sheet is presented for comparative
purposes only and is not necessarily indicative of what the actual combined
financial position resulting from the Joint Venture Disposition, the Ewing
Acquisition and the Company at September 30, 1998 would be, nor does it purport
to represent the future combined financial position of Ewing Industries and the
Company. This Pro Forma Condensed Combined Balance Sheet should be read in
conjunction with, and is qualified in its entirety by, the historical financial
statements and notes thereto of the Company as included in the Form 10-K for the
year ended December 31, 1997 and the Company's Form 10-Q for the nine months
ended September 30, 1998.
<PAGE> 5
SUMMIT PROPERTIES INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCE
BEFORE
OTHER EWING JOINT VENTURE JOINT VENTURE PRO FORMA
HISTORICAL DISPOSITIONS ACQUISITION DISPOSITION DISPOSITION COMBINED
---------- ------------ ----------- ----------- ----------- --------
(A) (B) (C) (D)
<S> <C> <C> <C> <C> <C> <C>
Assets:
Real estate assets, net $ 964,476 ($ 15,904) $147,692 $ 1,096,264 ($63,078) $1,033,186
Cash 4,823 -- -- 4,823 12,736 17,559
Restricted cash 7,702 24,046 -- 31,748 67,718 99,466
Other assets 12,580 (15) 1,713 14,278 (71) 14,207
--------- --------- -------- ----------- -------- ----------
Total assets $ 989,581 $ 8,127 $149,405 $ 1,147,113 $17,305 $1,164,418
========= ========= ======== =========== ======== ==========
Liabilities:
Notes payable $ 601,872 $133,303 $ 735,175 ($2,549) $ 732,626
Other liabilities 41,005 ($ 282) 4,734 45,457 (1,143) 44,314
--------- --------- -------- ----------- -------- ----------
Total liabilities 642,877 (282) 138,037 780,632 (3,692) 776,940
Minority interest of unitholders
in Operating Partnership (E) 49,746 1,221 2,600 53,567 3,048 56,615
Shareholders' equity:
Common stock (E) 254 -- 5 259 -- 259
Additional paid-in capital (E) 399,781 -- 8,763 408,544 -- 408,544
Dividends in excess of accumulated earnings (99,721) 7,188 -- (92,533) 17,949 (74,584)
Unamortized restricted stock compensation (836) -- -- (836) -- (836)
--------- --------- -------- ----------- -------- ----------
299,478 7,188 8,768 315,434 17,949 333,383
Less employee receivable (2,520) -- -- (2,520) -- (2,520)
--------- --------- -------- ----------- -------- ----------
Total stockholders equity 296,958 7,188 8,768 312,914 17,949 330,863
--------- --------- -------- ----------- -------- ----------
Total liabilities and stockholders' equity $ 989,581 $ 8,127 $149,405 $ 1,147,113 $17,305 $1,164,418
========= ========= ======== =========== ======== ==========
</TABLE>
<PAGE> 6
SUMMIT PROPERTIES INC.
NOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C> <C> <C>
ADJUSTMENTS:
A. Reflects the Summit Properties Inc. Consolidated Balance Sheet as of
September 30, 1998.
B. Reflects the sale of Summit Springs and Summit Old Town on October 23,
1998 and November 12, 1998 respectively. The sales are summarized as
follows:
Net sales proceeds after disposition costs $ 24,046
Net book value of assets sold (15,904)
Cost of other assets sold (15)
Liabilities assumed by buyer 282
--------
Gain on sale $ 8,409
========
Proceeds were put in escrow in accordance with Internal Revenue Service
like-kind exchange rules. Accordingly, proceeds are classified as
restricted cash.
C. Reflects the Ewing Acquisition which occurred on November 4, 1998. The
acquisition is summarized as follows:
Loan escrow acquired $ 1,713
Mortgage notes payable assumed ($79,852)
Borrowings on the Company's unsecured credit facility (50,575)
Adjustment to mortgage notes assumed to reflect estimated fair value (2,876) (133,303)
--------
Other net liabilities assumed (4,734)
Issuance of Shares to seller (489,622) (8,768)
Issuance of Units to seller (141,921) (2,600)
=========
Purchase price including acquisition costs ($147,692)
=========
D. Reflects the Joint Venture Disposition. The sale of five communities
and the concurrent contribution of an additional two communities into
a new entity, in which the Company has a 25% ownership interest, is
summarized below:
Sale of Assets
--------------
Net sales proceeds after disposition costs $88,625
Net book value of assets sold (63,078)
Cost of other assets sold (356)
Liabilities assumed by buyer 1,143
-------
Gross gain on sale 26,334
Company's retained interest (25%) (6,584)
Cash received in excess of remaining basis 1,247
-------
Gain on sale $20,997
=======
Formation of Joint Venture
--------------------------
Investment Restricted
in JV Cash Cash
---------- ------- ----------
Investment in joint venture $ 5,337 ($5,337)
Company's retained interest (25%) (6,584) -
Cash received in excess of remaining basis 1,247 -
Proceeds - 20,622 $68,003
Restricted cash transferred to joint venture (285)
Payoff of mortgage in conjunction with sale - (2,549) -
======= ======= =======
$ - $12,736 $67,718
======= ======= =======
E. Units of the Operating Partnership can be exchanged for cash or, at the
option of the Company, for shares of Common Stock on a one-for-one
basis. The 14.52% minority interest (4,400,113 Units of 30,310,581
shares of Common Stock and Units) is based upon pro forma shares and
Units outstanding as of September 30, 1998.
</TABLE>
<PAGE> 7
SUMMIT PROPERTIES INC.
BASIS OF PRESENTATION TO PRO FORMA CONDENSED
COMBINED STATEMENTS OF EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND
THE YEAR ENDED DECEMBER 31, 1997
The Pro Forma Condensed Combined Statements of Earnings for the nine months
ended September 30, 1998 and the year ended December 31, 1997 are presented as
if the following transactions had occurred on January 1, 1997:
(i) The sale of five communities to Hollow Creek LLC (which were
concurrently contributed by Hollow Creek LLC to Station Hill
LLC) and the concurrent contribution of two communities to
Station Hill LLC, in which the Company maintains a 25% ownership
interest (the "Joint Venture Disposition").
(ii) The acquisition of Ewing Industries, as further described in the
Basis of Presentation to the Pro Forma Combined Condensed
Balance Sheet. Adjustments related to the Contingent Property
are not included in the pro forma statements as it was in
construction in 1997 and a portion of 1998 and its operations
are not material to the Pro Forma Condensed Combined Statements
of Earnings. In addition, the Company has a cash flow management
contract with a surviving affiliate of Ewing Industries to
manage such property until the property reaches stabilization.
In consideration for managing the property, such affiliates
retain all net cash flows for the property. Certain of the
properties acquired in the Ewing Acquisition were in lease up in
1998 and/or 1997. The operations of such lease-up properties are
not reflective of fully stabilized properties.
(iii) The sale of Summit Old Town, Summit Springs, Summit Providence
and Summit Charleston on November 12, 1998, October 23, 1998,
May 18, 1998 and May 14, 1997, respectively.
(iv) The purchase of Summit Lenox on July 8, 1998. The purchase of
Summit Club at Dunwoody and Summit St. Clair on May 22, 1998 and
March 1, 1998, respectively, are shown as if they were acquired
on January 1, 1998. These two properties were under construction
during 1997 and would not have had a material effect on 1997
operations.
(v) The purchase of Summit Fair Oaks, Summit Windsor II, Summit Sand
Lake and Summit Portofino ("1997 Acquisitions") on December 31,
1997, July 18, 1997, February 20, 1997 and January 6, 1997,
respectively.
The Pro Forma Condensed Combined Statements of Earnings give effect to the Ewing
Acquisitions under the purchase method of accounting in accordance with
Accounting Principles Board Opinion No. 16. In the opinion of management, all
significant adjustments necessary to reflect the effects of these transactions
have been made.
The Pro Forma Condensed Combined Statements of Earnings are presented for
comparative purposes only and are not necessarily indicative of what the actual
combined results of the above transactions and the Company for the nine months
ended September 30, 1998, and the year ended December 31, 1997 would be, nor do
they purport to be indicative of the results of operations in future periods.
The Pro Forma Condensed Combined Statements of Earnings should be read in
conjunction with, and are qualified in their entirety by, the historical
financial statements and notes thereto of the Company as included in the Form
10-K for the year ended December 31, 1997 and the Company's Form 10-Q for the
nine months ended September 30, 1998.
<PAGE> 8
SUMMIT PROPERTIES INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCE
BEFORE
OTHER OTHER EWING JOINT VENTURE JOINT VENTURE PRO FORMA
HISTORICAL ACQUISITIONS DISPOSITIONS ACQUISITION DISPOSITION DISPOSITION COMBINED
---------- ------------ ------------ ----------- ----------- ----------- --------
(A) (B) (C) (D) (E)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Rental $ 99,047 $ 4,006 ($3,974) $ 12,399 $ 111,478 ($8,475) $ 103,003
Other property income 5,733 162 (221) 590 6,264 (399) 5,865
Interest and other 1,286 -- -- -- 1,286 -- 1,286
--------- ------- ------- -------- --------- ------- ---------
Total revenues 106,066 4,168 (4,195) 12,989 119,028 (8,874) 110,154
--------- ------- ------- -------- --------- ------- ---------
Expenses:
Property operating and maintenance 26,948 1,485 (1,283) 3,345 30,495 (2,434) 28,061
Real estate taxes and insurance 10,251 316 (392) 2,227 12,402 (798) 11,604
Depreciation 20,774 885 (696) 3,068 24,031 (1,869) 22,162
Interest 23,351 2,178 (1,878) 7,166 30,817 (4,289)(F) 26,528
General and administrative expenses 2,726 -- -- -- 2,726 -- 2,726
Loss on equity investments 95 -- -- -- 95 27 (G) 122
--------- ------- ------- -------- --------- ------- ---------
Total expenses 84,145 4,864 (4,249) 15,806 100,566 (9,363) 91,203
--------- ------- ------- -------- --------- ------- ---------
Income before gain on sale of
real estate assets, minority
interest of unitholders
in Operating Partnership
and extraordinary item 21,921 (696) 54 (2,817) 18,462 489 18,951
Gain on sale of real estate assets 8,731 -- (8,731) -- -- -- --
Minority interest of unitholders in
Operating Partnership (4,439) 101 1,257 321 (2,760) (73)(H) (2,833)
--------- ------- ------- -------- --------- ------- ---------
Income before extraordinary item $ 26,213 ($ 595) ($7,420) ($ 2,496) $ 15,702 $ 416 $ 16,118
========= ======= ======= ======== ========= ======= =========
Per share data:
Income before extraordinary
items -basic and diluted (I) $1.06 $0.64
========== ==========
Weighted average shares - basic 24,635,658 25,125,280
========== ==========
Weighted average shares - diluted 24,652,423 25,142,045
========== ==========
</TABLE>
<PAGE> 9
SUMMIT PROPERTIES INC.
NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
ADJUSTMENTS:
A. Reflects the Summit Properties Inc. Consolidated Statement of Earnings
for the nine months ended September 30, 1998.
B. Reflects the operations of Summit St. Clair acquired effective March
1,1998, Summit Club at Dunwoody acquired May 22, 1998 and Summit Lenox
acquired July 8, 1998, from January 1, 1998 to date of acquisition.
C. Reflects the operations of Summit Providence sold on May 18, 1998 from
January 1, 1998 to date of sale. Reflects Summit Springs and Summit Old
Town sold on October 23, 1998 and on November 12, 1998, respectively,
from January 1, 1998 to September 30, 1998. In addition, the gain on
sale of real estate assets has been eliminated for pro forma
presentation.
D. Reflects the operations of the communities acquired in the Ewing
Acquisition for the nine months ended September 30, 1998. Pro forma
effects of the Contingent Property have not been included in the Pro
Forma Condensed Combined Statement of Earnings as such property was
substantially under construction for the period presented and,
therefore, its effect on pro forma earnings is not significant.
E. Reflects the operations for the nine months ended September 30, 1998 of
the Joint Venture Disposition properties. Does not include the gain on
sale of real estate assets related to the Joint Venture Disposition.
F. Reflects the saving in interest costs of $4.1 million from using the net
proceeds of the sale to reduce the Company's credit facility outstanding
balance at the weighted average interest rate for the nine months ended
September 30, 1998 of 6.73%. In addition, reflects savings in interest
expense of mortgage notes that did not transfer to the joint venture of
$195,000.
G. Reflects the Company's equity loss in the joint venture for the nine
months ended September 30, 1998. The joint venture operations include
depreciation calculated based upon the joint ventures basis in the
assets. In addition, the mortgage note issued by the joint venture is
assumed to be outstanding for the nine months ended September 30, 1998.
H. Based upon 14.95% minority interest (4,417,770 Units weighted average
of the 29,543,050 Shares and Units weighted average) for the nine months
ended September 30, 1998 at an interest rate of 6.70%.
I. Based upon 25,125,280 and 25,142,045 basic and diluted weighted average
Shares issued and outstanding, respectively.
<PAGE> 10
SUMMIT PROPERTIES INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCE
BEFORE
OTHER OTHER EWING JOINT VENTURE JOINT VENTURE PRO FORMA
HISTORICAL ACQUISITIONS DISPOSITIONS ACQUISITION DISPOSITION DISPOSITION COMBINED
---------- ------------ ------------ ----------- ----------- ----------- --------
(A) (B) (C) (D) (E)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Rental $ 109,827 $ 8,517 ($7,084) $ 14,322 $ 125,582 ($11,122) $ 114,460
Other property income 6,179 364 (409) 690 6,824 (438) 6,386
Interest and other 671 -- -- -- 671 -- 671
--------- -------- ------- -------- --------- -------- ---------
Total revenues 116,677 8,881 (7,493) 15,012 133,077 (11,560) 121,517
--------- -------- ------- -------- --------- -------- ---------
Expenses:
Property operating and maintenance 31,311 3,160 (2,282) 4,058 36,247 (3,133) 33,114
Real estate taxes and insurance 10,721 755 (758) 2,590 13,308 (874) 12,434
Depreciation 22,652 1,934 (1,404) 3,504 26,686 (2,437) 24,249
Interest 21,959 4,560 (3,725) 8,234 31,028 (5,820)(F) 25,208
General and administrative expenses 2,740 -- -- -- 2,740 -- 2,740
(Income) loss on equity investments (274) -- -- -- (274) 26 (G) (248)
--------- -------- ------- -------- --------- -------- ---------
Total expenses 89,109 10,409 (8,169) 18,386 109,735 (12,238) 97,497
--------- -------- ------- -------- --------- -------- ---------
Income before gain on sale of
real estate assets, minority
interest of unitholders in
Operating Partnership 27,568 (1,528) 676 (3,374) 23,342 678 24,020
Gain on sale of real estate assets 4,366 -- (4,366) -- -- -- --
Minority interest of unitholders in --
Operating Partnership (4,818) 231 557 456 (3,574) (103)(H) (3,677)
--------- -------- ------- -------- --------- -------- ---------
Net income $ 27,116 ($ 1,297) ($3,133) ($ 2,918) $ 19,768 $ 575 $ 20,343
========= ======== ======= ======== ========= ======== =========
Per share data:
Net income - basic and diluted (I) $1.17 $0.86
========== ==========
Weighted average shares - basic 23,145,881 23,675,463
========== ==========
Weighted average shares - diluted 23,182,302 23,711,884
========== ==========
</TABLE>
<PAGE> 11
SUMMIT PROPERTIES INC.
NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
ADJUSTMENTS:
A. Reflects the Summit Properties Inc. Consolidated Statement of Earnings
for the year ended December 31, 1997.
B. Reflects the operations of the 1997 Acquisitions from January 1, 1997 to
date of acquisition. In addition, reflects the operations of Summit
Lenox, acquired July 8, 1998 for the year ended December 31, 1997. Does
not reflect the operations of Summit St. Clair and Summit Club at
Dunwoody acquired in 1998 as the properties were in construction in 1997
and their operations for the year ended December 31, 1997 were not
significant.
C. Reflects the operations for the year ended December 31, 1997 of Summit
Providence sold on May 18, 1998, Summit Springs sold on October 23, 1998
and Summit Old Town sold on November 12, 1998. Also reflects the
operations of Summit Charleston from January 1, 1997 to date of sale on
May 14, 1997. In addition, the gain on sale of real estate assets has
been eliminated for pro forma presentation.
D. Reflects the operations of the communities acquired in the Ewing
Acquisition for the year ended December 31,1997. Pro forma effects of
the Contingent Property have not been included in the Pro Forma
Condensed Combined Statement of Earnings as such property was
substantially under construction for the period presented and,
therefore, its effect on pro forma earnings is not significant.
E. Reflects the operations for the nine months ended September 30, 1998 of
the Joint Venture Disposition properties. Does not include the gain on
sale of real estate assets related to the Joint Venture Disposition.
F. Reflects the saving in interest costs of $5.4 million from using the net
proceeds of the sale to reduce the Company's credit facility outstanding
balance at the weighted average interest rate for the year ended
December 31, 1997 of 6.73%. In addition, reflects savings in interest
expense on mortgage notes that did not transfer to the joint venture of
$386,000.
G. Reflects the Company's equity loss in the joint venture for the year
ended December 31, 1997. The joint venture operations include
depreciation calculated based upon the joint ventures basis in the
assets. In addition, the mortgage note issued by the joint venture is
assumed to be outstanding for the year ended December 31, 1997 at an
interest rate of 6.70%.
H. Based upon 15.31% minority interest (4,280,690 Units weighted average of
the 27,956,153 Shares and Units weighted average) for the year ended
December 31, 1997.
I. Based upon 23,675,463 and 23,711,884 basic and diluted weighted average
Shares issued and outstanding, respectively.
<PAGE> 12
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.
SUMMIT PROPERTIES INC.
Date: December 18, 1998 By: /s/ William F. Paulsen
---------------------------
William F. Paulsen
Chief Executive Officer
<PAGE> 13
EXHIBIT INDEX
2.1 Real Estate Sale Agreement dated November 20, 1998 Between Summit
Properties Partnership, L.P. and Hollow Creek, L.L.C. (Incorporated by
reference to Exhibit 2.1 of Summit Properties Partnership, L.P.'s
Current Report on Form 8-K filed on December 18, 1998, File No.
0-22411)
10.1 Operating Agreement dated November 20, 1998 Between Summit Properties
Partnership, L.P., Hollow Creek, L.L.C. and Station Hill L.L.C.
(Incorporated by reference to Exhibit 10.1 of Summit Properties
Partnership, L.P.'s Current Report on Form 8-K filed on December 18,
1998, File No. 0-22411)
