SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
to
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 31, 1997
GROVE PROPERTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-13080 06-1391084
(State or other jurisdiction (Commission (IRS Employer
of incorporation File No. Identification Number)
598 Asylum Avenue, Hartford, Connecticut 06105
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (860) 246-1126
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Ribbon Mill, Hilltop and Briar Knoll
Statement of Revenue and Certain Expenses for the nine months ended September
30, 1997 and the year ended December 31, 1996.
Village Arms
Statement of Revenue and Certain Expenses for the period April 22, 1997 to
December 31, 1997.
(b) Pro Forma Financial Statements.
Pro Forma Condensed Balance Sheet of Grove Property Trust (the "Company") as of
September 30, 1997. Pro Forma Condensed Consolidated Statements of Income of the
Company for the nine months ended September 30, 1997 and the year ended December
31, 1996.
(c) Exhibits.
Exhibit No. Description
2.1 Purchase and Sale Agreement dated December 1, 1997
between Properties II,Inc. as Seller, and Grove Corporation, as Purchaser.
Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form
8-K dated December 31, 1997 (Commission File No. 1-13080).
2.2 Purchase and Sale Agreement dated November 12, 1997
between Sovereign Group 1984-II as Seller, and Grove Corporation, as
Purchaser. Incorporated by reference to Exhibit 2.2 to the Company's
Current Report on Form 8-K datedDecember 31, 1997 (Commission File No. 1-13080).
2.3 Purchase and Sale Agreement dated November 12, 1997 between Briar Knoll
Associates and High Ridge Associates as Seller, and Grove Corporation, as
Purchaser. Incorporated by reference to Exhibit 2.3 to the Company's Current
Report on Form 8-K dated December 31, 1997 (Commission File No. 1-13080).
<PAGE>
Grove Property Trust
Financial Statements of Properties Acquired and ProForma
Financial Information
Table of Contents
Item 7 Page #'s
Pro Forma Condensed Consolidated Financial Statements (Unaudited):
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997.....4
Notes to Pro Forma Condensed Consolidated Balance Sheet.................... 6
Pro Forma Condensed Consolidated Statements of Income for the Nine Months
Ended September 30, 1997 and the Year Ended December 31, 1996............ 9
Notes to Pro Forma Condensed Consolidated Statements of Income.............11
Ribbon Mill, Hilltop and Briar Knoll
Financial Statements:
Report of Independent Auditors.............................................16
Statements of Revenues and Certain Expenses for the Nine Months
Ended September 30, 1997 (Unaudited) and for the Year Ended
December 31, 1996........................................................17
Notes to the Statements of Revenues and Certain Expenses...................18
Village Arms
Financial Statements:
Report of Independent Auditors.............................................20
Statement of Revenues and Certain Expenses for the period
April 22, 1997 to December 31, 1997......................................21
Notes to the Statement of Revenues and Certain Expenses....................22
<PAGE>
Grove Property Trust
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
This unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as
if: (i) acquisitions completed after September 30, 1997, had occurred on
September 30, 1997, (ii) the Operating Partnership used working capital and/or
drew down on the Credit Facility to purchase such properties and (iii) the
Company completed the sale of 4,500,000 common shares (the "November 1997
Offerings") on September 30, 1997, and used the net proceeds (approximately
$45.2 million) therefrom to repay indebtedness outstanding under the Credit
Facility and certain mortgage notes payable and for working capital. The
unaudited Pro Forma Condensed Consolidated Balance Sheet should be read in
conjunction with the financial statements and notes thereto of the Company, as
filed on Form 10-KSB, as amended, for the year ended December 31, 1996, on Form
10-QSB for the nine-months ended September 30, 1997, Form S-2 and various Form
8-K's filed during 1997. In management's opinion, all adjustments necessary to
present fairly the effects of the above mentioned transactions have been made.
The pro forma information is not necessarily indicative of the results that
would have been reported had such events actually occurred on the date
specified, nor is it indicative of the Company's future results.
<PAGE>
Grove Property Trust
Pro Forma Condensed Consolidated Balance Sheet (continued)
September 30, 1997
(Unaudited)
October As Adj- Dec. Pro
Historical 1997 The usted 1997 Forma
Company Acquis- Offer- Consol- Acquisi Conso-
(A) itons(B) ings idated tions(c) lidated
-------------------------------------------------------
(In thousands)
Assets
Real estate, net $112,014 $8,725 $ - $120,739 $20,690 $141,429
Cash and cash equivalents,
including resident 1,158 - 6,768(D) 7,926 (5,090) 2,836
security deposits
Deferred costs, net 1,351 - - 1,351 - 1,351
Due from affiliates 602 - - 602 - 602
Other assets 1,315 - - 1,315 - 1,315
=======================================================
Total assets $116,440 $8,725 $6,768 $131,933 $15,600 $147,533
=======================================================
Liabilities and Shareholders' Equity
Mortgage notes payable $53,862 $ - $(20,250)(D)$33,612 $ - $33,612
Revolving Credit Facility 11,125 7,164 (18,289)(D) - 15,600 15,600
Accounts payable and 1,763 - - 1,763 - 1,763
other liabilities
Due to affiliates 843 - - 843 - 843
Resident security deposits 1,429 - - 1,429 - 1,429
Dividends payable 1,166 - - 1,166 - 1,166
-------------------------------------------------------
Total liabilities 70,188 7,164 (38,539) 38,813 15,600 54,413
-------------------------------------------------------
Minority interests in 1,560 - - 1,560 - 1,560
consolidated partnerships
Minority interest in 20,831 1,561 1,643(E) 24,035 - 24,035
Operating Partnership
Shareholders' equity:
Common shares 40 - 45(D) 85 - 85
Additional paid-in 24,590 - 45,262(D)
capital
(1,643)(E) 68,209 - 68,209
Distributions in excess (769) - - (769) - (769)
of earnings
-------------------------------------------------------
Total shareholders' 23,861 - 43,664 67,525 - 67,525
equity
-------------------------------------------------------
Total liabilities and $116,440 $8,725 $6,768 $131,933 $15,600 $147,533
shareholders' equity
=======================================================
See accompanying notes.
<PAGE>
Grove Property Trust
Notes to Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
(In thousands, except share data)
(A) Balance sheet data was derived from the Company consolidated financial
statements as of September 30, 1997 (Unaudited), as filed on its Form
10-QSB.
(B) Balance sheet data reflects the following property acquisitions which were
consummated by the Company in October 1997, as follows:
Number of Revolving Value
Units or Date Purchase Credit of OP
Properties Location Square FT Acquired Price Facility Units(1)
- -------------------------------------------------------------------------------
1.Corner Block
and Wharf Building Edgartown, MA 16,427 October $4,421 $2,860 $1,561
(2 properties)(2) 31, 1997
2. High Meadow Ellington, CT 100 October
Apartments 31, 1997 4,050 4,050
----------------------
8,471 6,910 1,561
Acquisition costs 254 254
======================
$8,725 $7,164 $1,561
======================
(1)Operating Partnership ("OP") Unit Holders are represented on the
accompanying pro forma condensed consolidated balance sheet as "minority
interest in Operating Partnership." The value ascribed to the OP Units
for 1. above was $10.50 per OP Unit, representing actual amounts.
(2) These Properties are retail centers.
(C) Balance sheet data reflects the following property acquisitions which were
consummated by the Company during December 1997, as follows:
Number Revolving
Properties Location of Purchase Credit
Units Date Acquired Price Facility Cash
- --------------------------------------------------------------------------------
1.Village Arms Acton, MA 123 December 31, 1997 $5,200 $600 $4,600
2.Ribbon Mill Manchester,CT 104 December 31, 1997 3,813 3,813 -
3.Briar Knoll Vernon,CT 150 December 31, 1997 6,173 6,173 -
4.Hilltop Norwich,CT 120 December 31, 1997 5,014 5,014 -
----------------------
20,200 15,600 4,600
Acquisition costs 490 - 490
----------------------
$20,690 $15,600 $5,090
=========================
<PAGE>
(1) Grove Property Trust
Notes to Pro Forma Condensed Consolidated Balance Sheet
(continued)
(D) Balance sheet data reflects the November 1997 Offerings and the application
of the net proceeds therefrom, as follows:
Mortgage Revolving
Notes Credit Common Paid in
Cash Payable Facility Stock Capital
----------------------------------------------------
1. Gross proceeds from the $48,937 $ - $ - $ 45 $48,892
Offerings(1)
2.Costs of the Offerings (2) (3,630) - - - (3,630)
3. Paydown of debt (38,539) (20,250) (18,289) - -
====================================================
$ 6,768 $(20,250) $(18,289) $ 45 $45,262
====================================================
(1) 4,500,000 shares at $10.875 per share.
(2)Includes underwriters' discount and approximately $1,400 of other costs
and expenses.
(E) Represents a reallocation between shareholders' equity and minority interest
in the Operating Partnership upon consummation of the November 1997
Offerings based upon pro forma: (i) shares of common stock (8,453,829) and
(ii) OP Units not owned by the Company (3,009,126). See Note (K) in the
Notes to Pro Forma Condensed Consolidated Statements of Income included
herein.
<PAGE>
Grove Property Trust
Pro Forma Condensed Consolidated Statements of Income
(Unaudited)
These unaudited Pro Forma Condensed Consolidated Statements of Income are
presented as if (i) the Company had acquired GPS and Property Partnerships,
Ribbon Mill, Hilltop and Briar Knoll, Village Arms and various other property
acquisitions consummated in 1997, (ii) the Consolidation Transactions, (see
Notes to Proforma Condensed Consolidated Statements of Income)including the New
Equity Investment and Refinancings and (iii) the November 1997 Offerings and the
application of the net proceeds therefrom as if all had occurred as of January
1, 1996. The unaudited Pro Forma Condensed Consolidated Statements of Income
should be read in conjunction with the financial statements of the Company, GPS
and Property Partnerships, Ribbon Mill, Hilltop and Briar Knoll, Village Arms
and various other properties acquired during 1997, which financial statements
are included herein or have been filed with the Securities and Exchange
Commission on Form 10-KSB, as amended, for the year ended December 31, 1996,
Form 10-QSB for the nine months ended September 30, 1997, Form S-2 and various
Form 8-K's filed during 1997. In management's opinion, all adjustments necessary
to present fairly the effects of the above mentioned transactions have been
made.
The pro forma information is not necessarily indicative of the results that
would have been reported had such events actually occurred on the date
specified, nor is it indicative of the Company's future results.
<PAGE>
Grove Property Trust
Notes to Pro Forma Condensed Consolidated Statements of Income
(continued)
Grove Property Trust
Pro Forma Condensed Consolidated Statements of Income (Continued)
(Unaudited)
Nine Months Ended September 30, 1997
---------------------------------------------------------
ProForma
Consol
Pre Manage -idated Decem
December -ment Without -ber
Hist 1997 Pro Com- December 1997 Pro
-orical Acquis Forma pany 1997 Acquis Forma
Company -tions Adjust Adjust Acquis -tions Conso-
(A) (B) -ments -ments -tions (C) lidated
---------------------------------------------------------
Revenues: (In thousands)
Rental income $10,944 $7,643 $ - $ (9)(H)$18,578 $2,312 $20,890
Property management 380 321 - (355)(I) 346 - 346
Interest and other 212 241 - (4)(H) 449 21 470
---------------------------------------------------------
Total revenues 11,536 8,205 - (368) 19,373 2,333 21,706
---------------------------------------------------------
Expenses:
Related party 22 333 - (355)(I) - - -
management fees
Real estate taxes 1,143 781 - - 1,924 279 2,203
Other property 3,741 3,199 (20)(H) 135(H)
operating
(71)(H) 6,984 761 7,745
General and 610 36 30(G)
administrative
(35)(H) 71(H) 712 - 712
---------------------------------------------------------
Total operating 5,516 4,349 (25) (220) 9,620 1,040 10,660
expenses
---------------------------------------------------------
Net operating income 6,020 3,856 25 (148) 9,753 1,293 11,046
Interest expense 1,732 853 (761)(D) - 1,824 883 2,707
Depreciation and 2,380 617 (19)(E)
amortization
1,019(F) - 3,997 393 4,390
---------------------------------------------------------
Income before 1,908 2,386 (214) (148) 3,932 17 3,949
minority interests
Minority interests in
earnings of 114 - (23)(K) - 91 - 91
consolidated
partnerships
Minority interest in
earnings of Operating 658 - 350(L) - 1,008 5 1,013
Partnership
=========================================================
Net income $1,136 $2,386 $(541) $(148) $2,833 $ 12 $2,845
=========================================================
See accompanying notes.
<PAGE>
Grove Property Trust
Pro Forma Condensed Consolidated Statements of Income (Continued)
(Unaudited)
Year Ended December 31, 1996
----------------------------------------------------------
ProForma
Consol
Pre Manage -idated Decem
December -ment Without -ber
Hist 1997 Pro Com- December 1997 Pro
-orical Acquis Forma pany 1997 Acquis Forma
Company -tions Adjust Adjust Acquis -tions Conso-
(A) (B) -ments -ments -tions (C) lidated
Pro
----------------------------------------------------------
(In thousands)
Revenues:
Rental income $2,046 $21,515 $ - $ (30)(H) $23,531 $2,395 $25,926
Property managent - 777 - (396)(I) 381 - 381
Interest and other 36 1,266 (138(H) (307)(H)
(204)(H)
(100)(J) 553 43 596
----------------------------------------------------------
Total revenues 2,082 23,558 (138) (1,037) 24,465 2,438 26,903
----------------------------------------------------------
Expenses:
Related party 109 287 - (396)(I) - - -
management fees
Real estate taxes 208 2382 - - 2,590 251 2,841
Other property 656 8,914 (149)(H) (492)(H) 8,929 1,286 10,197
operating
General and 67 344 120(G) -
administrative
(74)(H) 492(H) 949 - 949
----------------------------------------------------------
Total operating 1,040 11,927 (103) (396) 12,468 1,519 13,987
expenses
----------------------------------------------------------
Net operating income 1,042 11,631 (35) (641) 11,997 919 12,916
Interest expense 394 3,814 (1,654)(D) - 2,554 1,151 3,705
Depreciation and 387 3,011 (5)(E)
amortization 1,912(F) - 5,305 435 5,740
----------------------------------------------------------
Income before 261 4,806 (288) (641) 4,138 (667) 3,471
minority interest
Minority interest in
earnings of Operating - - 1,086(L) - 1,086 (175) 911
Partnership
==========================================================
Net income $ 261 $4,806 $(1,374)$(641) $3,052 $(492) $2,560
==========================================================
See accompanying notes.
<PAGE>
Grove Property Trust
Notes to Pro Forma Condensed Consolidated Statements of Income (Continued)
(Unaudited)
(In thousands, except share data)
On March 14, 1997, the Company entered into a series of Consolidation
Transactions. The Consolidation Transactions were a business combination of the
Company and GPS (the "Management Company") and Property Partnerships in
connection with the formation of an umbrella REIT. In addition, the Company
simultaneously issued 3,333,333 common shares at $9 per share ("New Equity
Investment") and retired or refinanced certain mortgage and credit facility debt
("Refinancing"). The effect of these transactions on the accompanying pro forma
Condensed Consolidated Statements of Income is reflected as outlined in the
Notes below.
(A) Historical results of operations data were derived from the financial
statements of the Company as filed with the Securities and Exchange
Commission on the Company's Form 10-KSB, as amended, for the year ended
December 31, 1996 and on Form 10-QSB, for the nine months ended September
30, 1997.
(B) The historical financial statements of the Company contain results of
operations data for the properties and management company identified below
from the date of acquisition to the end of the respective period. The
results of operations from the beginning of the respective period to the
acquisition date (or September 30, 1997 with respect to 9. and 10. below) is
included in this column.
Property/Entity - Pre December Acquisitions Date Acquired
- -------------------------------------------------------------------------------
1. Cambridge January 12, 1996
- ------------------------------------------------------------
2. Grove Property Services Limited Partnership and Property
Partnerships (20 properties and management company)(1) March 14, 1997
- ----------------------------------------------------
3. Four Winds June 1, 1997
- ----------------------------------------------------
4. Brooksyde June 1, 1997
- ----------------------------------------------------
5. River's Bend June 1, 1997
- ----------------------------------------------------
6. Greenfield Village July 1, 1997
- ----------------------------------------------------
7. Glastonbury Center September 1, 1997
- ----------------------------------------------------
8. Summit & Birch Hill September 1, 1997
- ----------------------------------------------------
9. Corner Block and Wharf Building (2 properties) October 31, 1997
- ----------------------------------------------------
10. High Meadow Apartments October 31, 1997
(1) The historical financial
statements of Grove Property Services Limited Partnership and Property
Partnerships for the year ended December 31, 1996, include a property (Talcott
Forest) which was not included in the Consolidation Transactions and has been
omitted herein.
<PAGE>
Grove Property Trust
Notes to Pro Forma Condensed Consolidated Statements of Income (Continued)
(C) The results of operations from the beginning of the respective period to the
acquisition date is included in this column. This column also includes
proforma depreciation, interest expense and minority interest in Operating
Partnership.
Property - December 1997 Acquisitions Date Acquired
1. Village Arms (1) December 31, 1997
2. Ribbon Mill December 31, 1997
3. Briar Knoll December 31, 1997
4. Hill Top December 31, 1997
(1) Operating data for this property was only available for the period April 22,
1997 through December 31, 1997. The accompanying pro forma condensed
consolidated statements of income only include operating data for this
period.
(D) Represents the following:
Nine Month Year
Ended Ended
September 30, December 31,
1997(1) 1996
Pro forma interest expense on
new or refinanced mortgage $ 685 $ 1,810
debt and the Revolving
Credit Facility
Historical interest expense on
refinanced or retired mortgage debt (1,446) (3,464)
-----------------------------
$ (761) $ (1,654)
-----------------------------
(1) The New Equity Investment was effective on March 14, 1997. The historical
financial information for the period March 15, 1997 to September 30, 1997
already takes effect for this transaction.
Pro forma interest expense is based on rates ranging from 6.5% to 8.3% per annum
and assumes proceeds of $30 million ($27.5 million after costs) from the New
Equity Investment and $48.9 million ($45.3 million after costs) from the
November 1997 Offerings were received by the Company on January 1, 1996.
<PAGE>
Grove Property Trust
Notes to Pro Forma Condensed Consolidated Statements of Income (Continued)
(E) Represents the following:
Nine Months Year Ended
Ended December
September30, 31,
1997(1) 1996
Pro forma deferred financing
amortization expense on new or
refinanced mortgage debt and the $ 30 $ 138
Revolving Credit Facility
- ---------------------------
Historical deferred
financing amortization
expense on refinanced (49) (143)
or retired mortgage debt
=======================
$ (19) $ (5)
=======================
(1) The New Equity Investment was effective on March 14, 1997. The
historical financial information for the period March 15, 1997 to September
30, 1997 already reflects this transaction.
(F) Represents adjustment to record depreciation on the excess of the purchase
price relating to the purchase of certain partnership interests from
partners, over the net book amount and for properties acquired during or
after the nine months ended September 30, 1997, to the extent depreciation
was not reflected in the historical financial statements during the nine
months ended September 30, 1997.
(G) Represents adjustment to record non-cash compensation expense in 1996 and
the first quarter of 1997 associated with the Deferred Stock Grants
granted to Executive Officers in connection with the consummation of the
Consolidation Transactions, pursuant to the 1996 Plan. Such compensation
expense was recorded by the Company commencing March 15, 1997 in its
historical financial statements.
(H) Represents adjustments to: (i) provide for elimination
adjustments as a result of combining the operating
properties with the management company, which historically
charged properties a management fee, (ii) exclude certain
non-recurring revenues and expenses including those of Grove
Property Services Limited Partnership attributable to
brokerage and other services and sales of apartment units,
(iii) reclassify certain expenses historically classified by
Grove Property Services Limited Partnership as property
operating expenses to general and administrative expenses,
(iv) decrease general and administrative expenses to reflect
the cost savings (predominately professional fees)
associated with operating all Properties on a combined,
self-managed basis offset by an increase in compensation
expense to the Company's officers which took effect after
the November 1997 Offerings, and (v) increase property
operating costs subsequent to the Consolidation Transactions
to reflect the recombining of certain property leasing costs
that GPS
<PAGE>
provided prior to the Consolidation Transactions and that the Company
commenced providing subsequent to the November 1997 Offerings as follows:
Nine Year
Months Ended
Ended December
September 30, 31,
1997(1) 1996
(i) Non-recurring
property operating $ 20 $ 149
expenses
---------------------------
(ii) Non-recurring 9 30
rental revenues
---------------------------
(iii) Non-recurring - 204
other revenues
---------------------------
(iv) Gain on sales of - 138
apartments
---------------------------
(v) Brokerage
services-other 4 307
revenues.
---------------------------
(vi) Reclassification
of other property
operating to general 71 492
and administrative
---------------------------
(vii) Decrease in
general and 35 74
administrative
---------------------------
(viii) Increase in
property operating 135 -
expenses
(1)The New Equity Investment was effective on March 14, 1997. The
historical financial information for the period March 15, 1997 to
September 30, 1997 already takes effect for this transaction.
(I) Elimination of intercompany management fees.
(J) Elimination of non-recurring commission received in 1996 from an affiliate.
(K) Elimination of minority interest in a consolidated partnership (acquired in
June 1997) where the Company acquired the remaining interest in such
property partnership on September 30, 1997.
<PAGE>
(L) Based upon Operating Partnership ("OP") Units (OP Units are exchangeable on
a one-for-one basis into Common Shares) assumed to be owned by Limited
Partners and Common Shares assumed to be outstanding as follows:
Operating
Common Partnership
Shares Units
----------------------
Grove Property Trust at 620,102 -
December 31, 1996
New Equity in March 1997 3,333,333 -
Consolidation Transactions in
March 1997:
affiliates - 909,115
non-affiliates - 1,205,324
June 1997 acquisitions - 420,183
Exercise of stock options in 394 -
May 1997
September 1997 acquisitions - 325,836
October 1997 acquisitions - 148,668
The November 1997 Offerings 4,500,000 -
======================
8,453,829 3,009,126
======================
73.75% 26.25%
======================
See accompanying notes.
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Trust Managers
Grove Property Trust
We have audited the combined statement of revenues and certain expenses of
Ribbon Mill, Hilltop and Briar Knoll (the "Properties") for the year ended
December 31, 1996. The combined statement of revenues and certain expenses is
the responsibility of the Properties' management. Our responsibility is to
express an opinion on the combined statement of revenues and certain expenses
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 revenues and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the combined statement of
revenues and certain expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the combined statement of revenues and
certain expenses. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in Form 8-K, as described in
Note 2, and is not intended to be a complete presentation of the Properties'
revenues and expenses.
In our opinion, the combined statement of revenues and certain expenses referred
to above presents fairly, in all material respects, the revenues and certain
expenses as described in Note 2 of Ribbon Mill, Hilltop and Briar Knoll for the
year ended December 31, 1996, in conformity with generally accepted accounting
principles.
January 8, 1998
New York, New York
<PAGE>
Ribbon Mill, Hilltop and Briar Knoll
Combined Statements of Revenues and Certain Expenses
Nine
Months
Ended Year
September Ended
30, 1997 December
(Unaudited) 31, 1996
-----------------------
(in thousands)
Revenues:
Rental income $ 1,905 $ 2,395
Other 14 43
-----------------------
1,919 2,438
-----------------------
Certain expenses:
Property operating and maintenance 611 1,268
Real estate taxes 240 251
-----------------------
851 1,519
-----------------------
Revenues in excess of certain expenses $ 1,068 $ 919
=======================
See accompanying notes.
<PAGE>
Ribbon Mill, Hilltop and Briar Knoll
Notes to the Combined Statements of Revenues and Certain Expenses
Year Ended December 31, 1996
1. Business
The accompanying Combined Statements of Revenues and Certain Expenses relate to
the operations of certain properties known as Ribbon Mill, Hilltop and Briar
Knoll, residential apartment buildings located in Connecticut (the
"Properties"). Grove Property Trust (the "Company") acquired the Properties from
an unrelated party on December 31, 1997.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying Combined Statements of Revenues and Certain Expenses were
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Company's Form 8-K.
Accordingly, the financial statements exclude certain expenses that may not be
comparable to those expected to be incurred by the Company in the proposed
future operations of the Properties. Items excluded consist of depreciation,
amortization, interest and certain non-operating expenses.
Use of Estimates
The preparation of the Combined Statements of Revenues and Certain Expenses in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the Combined
Statements of Revenues and Certain Expenses and accompanying notes. Actual
results could differ from those estimates.
Revenue Recognition
Rental income attributable to leases is recognized on a straight-line basis over
the term of the leases, which are generally one year.
<PAGE>
Ribbon Mill, Hilltop and Briar Knoll
Notes to the Combined Statements of Revenues and Certain Expenses
(continued)
2. Summary of Significant Accounting Policies (continued)
Interim Unaudited Information
The accompanying Combined Statement of Revenues and Certain Expenses for the
nine months ended September 30, 1997 is unaudited however, in the opinion of
management, all adjustments (consisting solely of normal recurring adjustments)
necessary for a fair presentation of the Combined Statement of Revenues and
Certain Expenses for this interim period have been included. The results of this
interim period are not necessarily indicative of the results to be obtained for
a full fiscal year.
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Trust Managers
Grove Property Trust
We have audited the statement of revenues and certain expenses of Village Arms
(the "Property") for the period April 22, 1997 to December 31, 1997. The
statement of revenues and certain expenses is the responsibility of the
Properties' management. Our responsibility is to express an opinion on the
statement of revenues and certain expenses 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 statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Form 8-K, as described in Note 2, and is
not intended to be a complete presentation of the Property's revenues and
expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses as
described in Note 2 of Village Arms for the period April 22, 1997 to December
31, 1997, in conformity with generally accepted accounting principles.
January 14, 1998
New York, New York
<PAGE>
Village Arms
Statement of Revenues and Certain Expenses
For the Period from April 22, 1997 to December 31, 1997
(Note 1)
(in thousands)
Revenues:
Rental income $ 665
Other 13
------------
678
------------
Certain Expenses:
Property operating and maintenance 274
Real estate taxes 61
------------
335
============
Revenues in excess of certain expenses $ 343
============
See accompanying notes.
<PAGE>
Village Arms
Notes to the Statement of Revenues and Certain Expenses
For the Period from April 22, 1997 to December 31, 1997
1. Business
The accompanying Statement of Revenues and Certain Expenses relates to the
operations of a property known as Village Arms, a residential apartment building
located in Massachusetts (the "Property"). Grove Property Trust (the "Company")
acquired the Property from an unrelated party ("Seller") on December 31, 1997.
The Seller acquired the Property in a foreclosure proceeding on April 22, 1997.
Operating data prior to April 22, 1997 is not available.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying Statement of Revenues and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the Company's Form 8-K. Accordingly, the
financial statement excludes certain expenses that may not be comparable to
those expected to be incurred by the Company in the proposed future operations
of the Property. Items excluded consist of depreciation, amortization, interest
and certain non-operating expenses.
Use of Estimates
The preparation of the Statement of Revenues and Certain Expenses in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the Statement of
Revenues and Certain Expenses and accompanying notes. Actual results could
differ from those estimates.
Revenue Recognition
Rental income attributable to leases is recognized on a straight-line basis over
the term of the leases, which are generally one year.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this amendment to its report to be signed on its behalf
by the undersigned hereunto duly authorized.
GROVE PROPERTY TRUST
Date: March 2 , 1998 By:_________________________
Joseph R. LaBrosse
Chief Financial Officer
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this amendment to its report to be signed on its behalf
by the undersigned hereunto duly authorized.
GROVE PROPERTY TRUST
Date: March 2, 1998 By: /s/ Joseph R. LaBrosse
-----------------------
Joseph R. LaBrosse
Chief Financial Officer
<PAGE>
Exhibit Index
Exhibit No. Description
2.1 Purchase and Sale Agreement dated December 1, 1997
between Properties II,Inc. as Seller, and Grove Corporation, as Purchaser.
Incorporated by referenceto Exhibit 2.1 to the Company's Current Report on Form
8-K dated December31, 1997 (Commission File No. 1-13080).
2.2 Purchase and Sale Agreement dated November 12, 1997
between SovereignGroup 1984-II as Seller, and Grove Corporation, as
Purchaser. Incorporated by reference to Exhibit 2.2 to the Company's
Current Reporton Form 8-K datedDecember 31, 1997 (Commission File No. 1-13080).
2.3 Purchase and Sale Agreement dated November 12, 1997 between Briar Knoll
Associates and High Ridge Associates as Seller, and Grove Corporation, as
Purchaser. Incorporated by reference to Exhibit 2.3 to the Company's Current
Report on Form 8-K dated December 31, 1997 (Commission File No. 1-13080).
