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):
March 17, 1998
HOME PROPERTIES OF NEW YORK, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 1-13136 16-1455126
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization Identification
Number)
850 CLINTON SQUARE
ROCHESTER, NEW YORK 14604
(Address of principal executive offices)
Registrant's telephone number, including area code: (716) 546-4900
Not applicable
(Former name or former address, if changed since last report)
Consecutive No. Page 1 of 14
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
CURRENT REPORT
ON FORM 8-K
Item 5. Other Events.
On March 17, 1998, Home Properties of New York, L.P. (the "Operating
Partnership"), entered into an agreement to acquire the equity interests in
The Colonies Apartments, a 672 unit apartment community located in Steger,
Illinois. The agreement was subsequently amended to provide for a total
purchase price of $22,780,000 to be paid by assumption of existing
financing and cash. The existing mortgage financing has a principal
balance of approximately $13 million. The acquisition is subject to
certain customary closing conditions.
Item 7. Financial Statements and Exhibits.
a. Financial Statements of the business acquired:
Audited statement of revenues and certain expenses of the
Colonies Apartments for the year ended December 31, 1997.
b. Pro Forma Financial Information:
Pro forma condensed balance sheet of the Company as of March 31,
1998 and related notes (unaudited).
Pro forma condensed statement of operations of the Company for
the three months ended March 31, 1998 and for the year ended
December 31, 1997 (unaudited).
a. Exhibits:
Exhibit 23.0 - Consent of Coopers and Lybrand, L.L.P.
<PAGE>
The Colonies Apartments
_____
Statement of Revenues and Certain Expenses
December 31, 1997
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders of
Home Properties of New York, Inc.
We have audited the accompanying statement of revenues and certain
expenses, as defined in Note 1, of The Colonies Apartments for the year
ended December 31, 1997. The statement of revenues and certain expenses is
the responsibility of The Colonies Apartments' 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, as described in Note 1, and is not
intended to be a complete presentation of The Colonies Apartments' 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 defined in Note 1, of The Colonies Apartments for the year
ended December 31, 1997, in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Rochester, New York
May 28, 1998
<PAGE>
The Colonies Apartments
Statement of Revenues and Certain Expenses
(In Thousands)
<TABLE>
<CAPTION>
Period January 1
through
March 31, 1998 Year Ended
(unaudited) December 31, 1997
<S> <C> <C>
Revenues:
Rental income $ 963 $4,240
Other income 37 147
1,000 4,387
Certain expenses:
Property operating and maintenance 338 1,291
Real estate taxes 141 555
479 1,846
Revenues in excess of certain expenses $ 521 $2,541
</TABLE>
The accompanying note is an integral part of the financial statement.
<PAGE>
1. Basis of Presentation and Summary of Significant Accounting Policies
Business
The accompanying statement of revenues and certain expenses includes the
operations (see "Basis of Presentation" below) of The Colonies Apartments,
a residential property owned and managed by parties not related to Home
Properties of New York, Inc. (the "Company").
On March 17, 1998, the Company, through its subsidiary Home Properties of
New York, L.P., entered into an agreement to acquire 100% of the real
estate of The Colonies Apartments, 672 apartment units located in one
community. The property is located in a suburban market of Chicago,
Illinois.
Basis of Presentation
The accompanying financial statement is not representative of the actual
operations of the The Colonies Apartments for the period shown. As required
by the Securities and Exchange Commission Regulation S-X, Rule 3-14,
certain expenses have been excluded which may not be comparable to the
proposed future operations of The Colonies Apartments. Expenses excluded
relate to property management fees, interest expense, depreciation and
amortization expense and other expenses not directly related to the future
operations of The Colonies Apartments. The Company is not aware of any
material factors relating to The Colonies Apartments that would cause the
reported financial information not to be necessarily indicative of future
operating results.
Revenue Recognition
Rental income attributable to residential leases is recorded when due from
residents. Leases are generally for terms of one year.
Interim Unaudited Financial Statement
The accompanying interim unaudited statement of revenues and certain
expenses for the period from January 1 through March 31, 1998 has been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission described above. The results of operations of such
interim period are not necessarily indicative of the results for the full
year.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited, In Thousands)
This unaudited pro forma Condensed Consolidated Balance Sheet is presented as
if the Company had purchased the Colonies Apartments on March 31, 1998. This
unaudited pro forma Condensed Consolidated Balance Sheet should be read in
conjunction with the Statement of Revenues and Certain Expenses of the Colonies
Apartments and note thereto included elsewhere herein. In management's
opinion, all adjustments necessary to reflect the purchase of the Colonies
Apartments have been made.
<TABLE>
<CAPTION>
Home
Properties of
New York, Colonies Pro Forma Company
INC. (A) APARTMENTS(B) Adjustm. (C) PRO FORMA
<S> <C> <C> <C> <C>
ASSETS
Real estate, net $548,169 $ 6,552 $16,228(D) $570,949
Cash and cash equivalents 13,332 13,332
Other assets 56,589 56,589
Total assets $618,090 $ 6,552 $16,228 $640,870
LIABILITIES
Mortgage notes payable $217,376 $13,000 $ $230,376
Line of credit 22,250 9,780 32,030
Other liabilities 15,936 15,936
Total liabilities 255,562 13,000 9,780 278,342
Minority interest 187,841 187,841
STOCKHOLDERS' EQUITY
Common stock 104 104
Additional paid-in capital 200,759 200,759
Accumulated deficit (21,302) (6,448) 6,448 (E) (21,302)
Treasury stock, at cost (426) (426)
Officer and director notes for
stock purchases (4,448) (4,448)
Total stockholders' equity 174,687 (6,448) 6,448 174,687
Total liabilities and
stockholders' equity $618,090 $6,552 $16,228 $640,870
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited, In Thousands)
(A) Reflects the Company's historical consolidated balance sheet as of March
31, 1998 as reported on form 10-Q.
(B) Reflects the Colonies Apartments historical balance sheet as of March 31,
1998 for the assets proposed to be acquired by the Company.
(C) The pro forma adjustments reflect the proposed purchase of the Colonies
Apartments for $22,780. The purchase price will be allocated $3,827
to land, $672 to appliances and equipment and $18,281 to building.
The appliances and equipment have an estimated useful life of ten years
and the building has an estimated useful life of thirty-five years.
(D) Reflects the excess of the proposed cash purchase price of $22,780 over
the historical seller's cost basis of $6,552.
(E) Represents historical seller's capital account zeroed out.
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(Unaudited, In Thousands, Except Share and Per Share Data)
The unaudited pro forma Consolidated Statement of Operations for the three
months ended March 31, 1998 and for the year ended December 31, 1997 is
presented as if the proposed acquisition of the Colonies Apartments had
occurred on January 1, 1997. The unaudited pro forma Consolidated Statement of
Operations should be read in conjunction with the Statements of Revenues and
Certain Expenses of the Colonies Apartments and notes thereto included
elsewhere herein. In management's opinion, all adjustments necessary to
reflect the effects of the proposed purchase of the Colonies Apartments have
been made.
The unaudited pro forma Consolidated Statement of Operations is not necessarily
indicative of what the actual results of operations would have been assuming
the transactions had occurred as of the beginning of the period presented, nor
does it purport to represent the results of operations for future periods.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1998
Home Properties
of New York, Inc. Colonies Pro forma Company
HISTORICAL (A) APARTMENTS (B) ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
REVENUES
Rental inome $25,094 $ 963 $ $26,057
Property other income 502 37 539
Other income 1,177 1,177
Total revenues 26,773 1,000 27,773
Expenses:
Operating and maintenance 12,140 479 12,619
General and administrative 1,209 30(C) 1,239
Interest 4,398 453(D) 4,851
Depreciation & amortization 4,079 147(E) 4,226
Total expenses 21,826 479 630 22,935
Income before minority interest $4,947 $ 521 ($630) 4,838
Minority interest of Unit holders 2,124
Net income $2,714
Net income per share - Basic $0.28
- Diluted $0.27
Weighted average number of shares
outstanding:
- Basic 9,702,975
- Diluted 9,900,451
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited, In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
Home Properties of Colonies Pro Forma Company
New York, Inc. (A) APARTMENTS (B) ADJUSTMENTS PRO FORMA
<S> <C> <C> <C> <C>
Revenues:
Rental income $64,002 $4,240 $68,242
Property other income 2,222 147 2,369
Other income 3,473 3,473
Total revenues 69,697 4,387 74,084
Expenses:
Operating and maintenance 31,317 1,846 33,163
General and administrative 2,255 131 (C) 2,386
Interest 11,967 1,814 (D) 13,781
Depreciation & amortization 11,200 590 (E) 11,790
Total expenses 56,739 1,846 2,535 61,120
Income before loss on disposition of
property, minority interest and
extraordinary item 12,958 2,541 (2,535) 12,964
Loss on disposition of property 1,283 1,283
Net income before minority interest and
extraordinary item $11,675 $2,541 ($2,535) 11,681
Minority interest 4,250
Income before extraordinary item 7,431
Extraordinary item (1,037)
Net income $6,394
Basic earnings per share data:
Income before extraordinary item $1.00
Extraordinary item ($0.14)
Net income $0.86
Diluted earnings per share data:
Income before extraordinary item $0.98
Extraordinary item ($0.14)
Net income $0.84
Weighted average number of shares
outstanding:
- Basic 7,415,888
- Diluted 7,558,167
</TABLE>
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited, In Thousands)
(A) Reflects the historical consolidated statement of operations for the
Company for the three months ended March 31, 1998 and the historical
consolidated statement of operations for the Company for
the year ended December 31, 1997.
(B) Reflects the historical revenues and certain expenses of the Colonies
Apartments which was not owned by the Company for the three months
ended March 31, 1998 and for the year ended December 31, 1997.
(C) Reflects additional general and administrative expenses.
(D) Reflects the increase related to debt borrowed to finance the proposed
acquisition. The interest is calculated as follows:
<TABLE>
<CAPTION>
Interest
Principal
Amortizing Mortgage: Balance 3 MONTHS 12 MONTHS
<S> <C> <C> <C>
Assumed mortgage at 8.875% $13,000 $288 $1,154
Line of credit at 6.75% 9,780 165 660
$22,780 $453 $1,814
</TABLE>
The historical consolidated statement of operations for the Company for
the year ended December 31, 1997 needs twelve months worth of interest
on the loan associated with the proposed acquisition.
(E) Reflects depreciation and amortization related to the acquisition. See
Note C on page 8 for further information on useful lives of these
assets.
<PAGE>
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.
HOME PROPERTIES OF NEW YORK, INC.
(Registrant)
Date: June 2, 1998
By: /S/ DAVID P. GARDNER
David P. Gardner
Vice President
Chief Financial Officer and
Treasurer
Date: June 2, 1998
By: /S/ NORMAN LEENHOUTS
Norman Leenhouts
Chairman of the Board of Directors
Co-Chief Executive Officer and Director
<PAGE>
HOME PROPERTIES OF NEW YORK, INC.
EXHIBIT INDEX
EXHIBIT 23.0
Consent of Coopers & Lybrand, L.L.P.
<PAGE>
Exhibit 23.0
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements on
Forms S-3 (Nos. 333-37437, 333-37229, 333-30835, 333-13723, 333-43303, 333-
46243, 333-2672, 333-49781 and 333-52601) and on Forms S-8 (Nos. 333-05705 and
333-12551) filed by Home Properties of New York, Inc. of our report dated May
28, 1998, on our audit of the Colonies Apartments for the year ended December
31, 1997, which report is included in the accompanying Form 8-K. We also
consent to the reference to our firm under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Rochester, New York
June 2, 1998
