SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 1996
HIGHWOODS PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland
(State of Incorporation)
1-13100 56-1871668
(Commission File Number) (IRS Employer Identification No.)
3100 Smoketree Court, Suite 600 27604
Raleigh, North Carolina (Zip Code)
(Address of principal executive offices)
(919) 872-4924
(Registrant's telephone number, including area code)
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Item 2: Acquisition or Disposition of Assets
On April 29, 1996, Highwoods Properties, Inc. ("Highwoods") entered
into a Stock Purchase Agreement with the owners of approximately 83% of the
common stock of Crocker Realty Trust, Inc. ("Crocker"). In addition, Highwoods
has signed an Agreement and Plan of Merger with Crocker pursuant to which
Highwoods will acquire 100% of Crocker's common stock. The transaction, which
has been approved by each company's Board of Directors, is expected to close
in the third quarter of 1996.
The Crocker portfolio consists of 70 suburban office properties
encompassing 5.7 million square feet. Crocker's properties are located in 16
southeastern markets, of which five are existing Highwoods markets (including
Charlotte, NC; Raleigh, NC; and Nashville, TN) and 11 represent new markets for
Highwoods (including Greenville, SC; Tampa, FL; Memphis, TN; and Atlanta, GA).
The properties are 95% leased and are primarily located in business park
settings. Highwoods will not acquire undeveloped land in the transaction.
Crocker is expected to distribute 243 acres of undeveloped land and certain
other assets, net of certain liabilities, to its shareholders prior to the
merger.
After the completion of the transaction, the Highwoods portfolio will
be comprised 72% of suburban office, 17% of industrial and 11% of service
properties based upon square footage and will include 165 suburban office
properties, 35 industrial properties and 69 service properties. The portfolio
occupancy rate is expected to be approximately 94%.
Under the terms of the Stock Purchase Agreement, Highwoods will acquire
for $11.02 per share in cash, subject to adjustment, the common stock of
Crocker owned by (i) AP CRTI Holdings, L.P., an affiliate of Apollo Real
Estate Advisors, (ii) AEW Partners, L.P. (an investment partnership advised by
Aldrich Eastman Waltch) and (iii) Crocker management (Thomas J. Crocker and
his wife, Barbara F. Crocker, Richard S. Ackerman and Robert E. Onisko). The
shares to be purchased under this agreement total 22.4 million of the
approximately 27.0 million Crocker common shares outstanding. The remaining
shares will be purchased for the same cash price per share pursuant to the
Agreement and Plan of Merger. The aggregate value of the transaction is
approximately $540 million, including the assumption of certain Crocker
indebtedness. The Stock Purchase Agreement and Agreement and Plan of Merger
are irrevocable, subject to certain limited conditions of closing.
Highwoods expects to finance the cash purchase of Crocker's shares
initially by utilizing the proceeds from a $250 million unsecured credit
facility and a $100 million unsecured interim facility led by NationsBank. The
credit facility commitment is an increase from the current amount of $140
million. Both the credit facility and the interim facility bear interest
at a rate of LIBOR + 150 basis points. The $250 million facility has a 36-month
term with certain conversion rights after nine months. Highwoods' objective
is to maintain a conservative and flexible balance sheet, and, therefore, the
company intends to finance the merger on a permanent basis through the
issuance of a combination of private and public equity.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
It is impracticable to provide the required financial statements at
the time of the filing of this report. The required financial
statements will be filed as soon as practicable, but not later than
July 12, 1996.
(b) Pro forma financial statements
See text at Item 7(a).
(c) Exhibits
2.1 Stock Purchase Agreement among AP CRTI Holdings, L.P., AEW
Partners, L.P., Thomas J. Crocker, Barbara F. Crocker,
Richard S. Ackerman and Robert E. Onisko and Highwoods
Properties, Inc. and Cedar Acquisition Corporation, dated as
of April 29, 1996. (Incorporated by reference to Exhibit A
of Schedule 13D of Highwoods Properties, Inc., dated April
29, 1996.)
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2.2 Agreement and Plan of Merger by and among Highwoods
Properties, Inc., Crocker Realty Trust, Inc. and Cedar
Acquisition Corporation, dated as of April 29, 1996.
(Incorporated by reference to Exhibit B of Schedule 13D of
Highwoods Properties, Inc., dated April 29, 1996.)
10.1 Amended and restated Commitment Letter between NationsBank,
N.A. and Highwoods/Forsyth Limited Partnership, dated as of
May 7, 1996. (Incorporated by reference to Exhibit C of
Schedule 13D of Highwoods Properties, Inc., dated April 29,
1996.)
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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 thereunto duly authorized.
HIGHWOODS PROPERTIES, INC.
/s/ Carman J. Liuzzo
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Carman J. Liuzzo
Vice President and Chief Financial Officer
Date: May 14, 1996
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