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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): January 27, 1999
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 1934 Act File Number: 1-13174
Maryland 54-1681655
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2345 Crystal Drive
Crystal City, VA 22202
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number including area code: (703) 920-8500
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Item 2. Property Acquisitions
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On January 27, 1999, Charles E. Smith Residential Realty L.P. ("the
Operating Partnership"), of which Charles E. Smith Residential Realty, Inc.
("the Company") is the sole general partner, closed the acquisition of two
apartment properties located in Chicago, Illinois ("Parkwest" and "Terrace").
The transaction was pro-rated for an effective date of January 13, 1999. The
capitalized cost for Parkwest was $13.6 million consisting of 196,504 limited
partnership units of the Operating Partnership ("Units") valued at $6.1 million,
assumed debt of $6.0 million, a fair value adjustment to debt of $0.4 million,
initial capital improvements costs of $0.8 million, and $0.3 million in
acquisition related costs. The capitalized cost for The Terrace was $25.0
million consisting of 319,595 Units valued at $10.0 million, assumed debt of
$13.7 million, a fair value adjustment to debt of $0.7 million, initial capital
improvements costs of $0.4 million, and $0.2 million in acquisition related
costs. At closing, 58,393 of the Units given for Parkwest and 28,044 of the
Units given for Terrace were immediately redeemed for cash at $31.20 per Unit.
Built in 1969, the Parkwest property is a 139-unit high-rise with an enclosed
parking garage. The Terrace, built in 1968, is a 3-story, 427-unit property with
open surface parking.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(A) Pro Forma and historical financial information for Parkwest and Terrace will
be filed within 60 days of this Report on Form 8-K.
(B) Exhibits
99.1 Press Release dated December 22, 1998 of the Company.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereunto duly authorized, on this 12th day of
February 1999.
CHARLES E. SMITH RESIDENTIAL REALTY, INC.
By: /s/ W. D. Minami
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W. D. Minami
Senior Vice President and Chief Financial
Officer of the Registrant
By: /s/ Steven E. Gulley
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Steven E. Gulley
Vice President and Chief Accounting Officer
of the Registrant
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EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
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99.1 Press Release dated December 22,1998 of the Company
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Exhibit 99.1
NEWS RELEASE
[LOGO APPEARS HERE]
FOR IMMEDIATE RELEASE CONTACT:
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December 22, 1998 Media: John Kurtz
(703) 769-1153
Investors: Greg Samay
(703) 769-1029
CHARLES E. SMITH RESIDENTIAL
TO ACQUIRE 2,444 UNIT CHICAGO PORTFOLIO
$137 Million Transaction to Increase Company's Chicago Presence to 4,634 Units
ARLINGTON, VA. -- Charles E. Smith Residential Realty, Inc.(NYSE:SRW),
one of the country's leading multifamily real estate investment trusts,
announced today that it has agreed to acquire a portfolio of four apartment
properties totaling 2,444 units. All of the properties are located in the
Chicago, Illinois area in well established submarkets with high barriers to
entry, exceptionally low vacancy rates, and virtually no new starts permitted.
The four properties will be exchanged for $137 million, which will include over
$30 million in operating partnership units (price range $31 to $35 per unit),
plus closing costs and debt assumption. Smith Residential also plans to make
substantial renovations to the properties over the next few years, to enable
rent increases consistent with the tight Chicago market. Closing on two of the
assets, totaling 566 units, is expected early in 1999, with the remaining
properties to settle by mid-year 1999. The addition of these properties will
increase Smith Residential's portfolio of properties owned and under
construction in the Chicago market to 4,634 units, making it the largest REIT
apartment owner in that market.
"This acquisition is an excellent strategic expansion of our portfolio,"
said Ernest Gerardi, Jr., President of Charles E. Smith Residential. "The
addition of these properties increases our critical mass in the strong Chicago
market, and will further improve our operating efficiencies. Chicago is an
excellent market for us with strong diversified economic growth and significant
constraints
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on new multifamily rental development, both downtown and in the nearby suburban
submarkets. By renovating these properties we expect to be able to capture
substantially higher value in this tight market."
Mr. Gerardi continued, "This transaction is also another example of a
local property owner/operator recognizing the strength of our company and
strategy by taking a substantial portion of the exchange in operating
partnership units. Considering that we only entered the Chicago market a little
over a year ago, we are extremely pleased that we have been able to establish
such a strong market position -- and reputation -- this quickly."
The properties to be acquired include: Parkwest, a 139-unit high-rise
property in the Lincoln Park section of Chicago; The Terrace, a 427-unit
property near O'Hare Airport in Elk Grove; Countryside, a 720-unit property in
Palatine; and Somerset, a 1,158 unit property in Glendale Heights. All were
constructed between 1968 and 1972 and all are in well-established, high-
occupancy submarkets with extremely limited opportunity for new competitive
development.
Charles E. Smith Residential Realty Inc. is a self-managed real estate
investment trust listed on the New York Stock Exchange (SRW). The Company and
its subsidiaries acquire, develop, and manage multi-family residential
properties; and in addition, provide a full range of real estate services to
other property owners. The Company owns a portfolio of approximately 20,000
apartments units, has over 3,400 units under construction or pre-purchase
agreement, and manages an additional 3,500+ units for other owners. The total
market capitalization of Charles E. Smith Residential Realty, including its
Operating Partnership, is approximately $1.9 billion. Investor information
including press releases about Charles E. Smith Residential Realty is available
on the Company's Web site at http://www.smithreit.com, and also through PR
Newswire "News on Call" by fax 800-758-5804, ext. 101271, or at:
http://www.prnewswire.com.
This news release contains forward-looking statements regarding the
Company's outlook, including statements of goals, intentions, and expectations
regarding or based on assumptions about general economic and market conditions,
competitive dynamics and other factors that, by their nature, are subject to
significant uncertainties, some of which are discussed in the Company's filings
with the Securities and Exchange Commission. Because of these uncertainties, and
the assumptions on which statements in this release are based, actual future
results may differ materially.
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