SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report September 9, 1997
(date of earliest event reported) (July 25, 1997)
FIRST WASHINGTON REALTY TRUST, INC.
(Exact name of registrant as specified in its Charter)
State of Maryland 0-25230 52-1879972
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporated) File No.) Identification No.)
4350 East-West Highway, Suite 400
Bethesda, Maryland 20814
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301) 907-7800
No change
(Former name or address, if changed since last report)
<PAGE>
Explanatory Note:
Pursuant to Item 7(a)(4) of Form 8-K, this Form 8-K/A amends the Company's Form
8-K filed on July 30, 1997 to include the historical financial statements and
pro forma financial information required by Item 7(a) and (b) with respect to
the six (6) properties (the Chicago properties) referred to insuch Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements Applicable to Real Estate Properties to
be Acquired.
Chicago Properties
Report of Independent Accountants
Combined Statements of Revenues and Certain Expenses for the
year ended December 31, 1996 and the six months ended
June 30, 1997 (unaudited).
Notes to Combined Statements of Revenues and Certain Expenses
(b) Pro Forma Financial Information.
Pro Forma (unaudited):
Pro Forma Consolidated Balance Sheet as of June 30, 1997.
Pro Forma Consolidated Statements of Operations for the year
ended December 31, 1996 and the six months ended
June 30, 1997.
Notes and Management's Assumptions to the Pro Forma
Consolidated Financial Statements
(c) Exhibits
23.1 Consent of independent accountants
1
<PAGE>
SIGNATURE
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.
FIRST WASHINGTON REALTY TRUST, INC.
(Registrant)
By: /s/ Jeffrey S. Distenfeld
Jeffrey S. Distenfeld
Senior Vice President, General Counsel
Date: September 9, 1997
2
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Chicago Properties: Page
Report of Independent Accountants F-2
Combine Statements of Revenues and Certain Expenses for the year ended
December 31, 1996 and the six months ended June 30, 1997 (unaudited) F-3
Notes to Combined Statements of Revenues and Certain Expenses F-4
First Washington Realty Trust, Inc. and Subsidiaries
Pro Forma (unaudited):
Pro Forma Consolidated Balance Sheet as of June 30, 1997 F-6
Pro Forma Consolidated Statements of Operations for the year ended
December 31, 1996 and the six months ended June 30, 1997 F-7
Notes and Management's Assumptions to the Pro Forma
Consolidated Financial Statements F-9
Consent of Independent Accountant F-11
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of First Washington Realty Trust, Inc.
We have audited the combined statement of revenues and certain expenses of the
Chicago Properties (as defined in footnote 1 of this statement) for the year
ended December 31, 1996. This financial statement is the responsibility of the
Chicago Properties' management. Our responsibility is to express an
opinion on this financial statement 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 financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management as well as evaluating the overall financial statement
presentation. 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 the Form 8-K/A of First
Washington Realty Trust, Inc., and is not intended to be a complete presentation
of the Chicago Properties' revenues and expenses and may not be comparable
to results from future operations of the Chicago Properties. In our opinion, the
financial statement referred to above presents fairly, in all material respects,
the combined revenues and certain expenses as described in Note 1 of the Chicago
Properties for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Baltimore, Maryland
August 29, 1997
F-2
<PAGE>
The Chicago Properties
Combined Statements of Revenues and Certain Expenses
(dollars in thousands)
<TABLE>
Six Months
Year Ended Ended
December 31, 1996 June 30, 1997
(unaudited)
<S> <C> <C>
Minimum Base Rents $6,847 $3,424
Tenant Reimbursement Income 3,091 1,546
Percentage Rents 247 124
Other Income 92 46
Total Revenues 10,277 5,140
Real Estate Tax Expense 2,451 1,226
Recoverable Operating Expenses 985 493
Other Expense 251 126
Total Certain Expenses 3,687 1,845
Revenues in Excess of Certain Expenses $ 6,590 $3,295
</TABLE>
The accompanying notes are an integral part
of the statements of revenues and certain expenses.
F-3
<PAGE>
NOTES TO COMBINED STATEMENTS OF
REVENUES AND CERTAIN EXPENSES
(dollars in thousands)
1. Basis of Presentation
The combined statements of revenues and certain expenses (the "Statement")
relate to the operations of the six shopping center properties ( the "Chicago
properties") which are expected to be acquired by First Washington Realty Trust
Partnership (the "Company"), whose general partner is First Washington Realty
Trust, Inc. The accompanying combined statement include certain accounts of the
following properties:
<TABLE>
<S> <C> <C> <C> <C>
Percent
Location of GLA Leased Significant Tenants
Name Property Area (sf) 6/30/97 Lease Expiration Date
McHenry Commons McHenry IL 100,526 97.2% Omni Superstore (2018)
Mallard Creek Round Lake Beach,
IL 143,759 98.9% Omni Superstore (2008)
The Oaks Des Plaines, IL 138,274 91.0% Dominick's Finer Foods(2017)
Riverside Sq/
River's Edge Chicago, IL 169,434 86.4% Dominick's Finer Foods(2017)
Pheasant Hill
Plaza Bolingbrook, IL 111,190 100.0% Dominick's Finer Foods(2005)
Stonebrook
Plaza Merrionette, IL 95,825 95.3% Dominick's Finer Foods(2005)
Total/Average 759,008 94.2%
</TABLE>
Revenues and expenses are recorded using the accrual basis of accounting.
The accompanying combined statement is not representative of the actual
operations for the year presented as certain expenses which may not be
comparable to the expenses expected to be incurred by the Company in the
proposed future operations of the Chicago Properties have been excluded. The
Company is not aware of any material factors relating to the Chicago Properties
that would cause the reported financial information not to be necessarily
indicative of future operating results. Expenses excluded consist of interest,
depreciation and amortization and management fees of $358 which in the opinion
of management, are not directly related to the future operations of the
properties.
The unaudited interim combined statements of revenues and certain expenses
of the Chicago Properties are prepared pursuant to the Securities and Exchange
Commission's rules and regulations and generally accepted accounting principles
applicable to interim financial statements. In the opinion of management, all
adjustments, consisting solely of normal recurring adjustments, necessary for
fair presentation of the combined statements of revenues and certain expenses
for the interim period have been included. The current period's results of
operations are not necessarily indicative of results which ultimately may be
achieved for the year.
F-4
<PAGE>
Operating Leases
In addition to the minimum rent, certain tenant leases provide for the
reimbursement of certain operating expenses and/or percentage rent in the amount
of a percentage of annual gross sales in excess of a specified base sales
amount.
Minimum rents presented for the six months ended June 30, 1997 and the year
ended December 31, 1996 contain straight-line adjustments for rental revenue
increases or abatements in accordance with generally accepted accounting
principles. The aggregate rental revenue increases resulting from the
straight-line adjustments for the six months ended June 30, 1997 and the year
ended December 31, 1996 were $100 and $202, respectively.
The following tenants accounted for 10% or more of the total rents for 1996:
Dominick's Finer Foods . . . . . . . . . . . . . . . $ 1,875
Omni Superstore . . . . . . . . . . . . . . . . . . .$ 1,200
The properties are leased to tenants under operating leases with expiration date
extending to the year 2010. Minimum future base rentals under noncancelable
operating leases as of December 31, 1996 are approximately as follows:
1997 . . . . . . . . . . . . . . . . . . . . . . . $ 6,612
1998 . . . . . . . . . . . . . . . . . . . . . . . . .6,221
1999 . . . . . . . . . . . . . . . . . . . . . . . . .5,843
2000 . . . . . . . . . . . . . . . . . . . . . . . . .5,235
2001 . . . . . . . . . . . . . . . . . . . . . . . . .4,694
2002 and thereafter . . . . . . . . . . . . . . . 20,264
$48,869
F-5
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(dollars in thousands)
(unaudited)
<TABLE>
As of June 30, 1997
Chicago Mitchellville
Historical Properties Plaza Pro Forma
(A) (B) (unaudited)
ASSETS
<S> <C> <C> <C> <C>
Rental Properties:
Land $70,930 $13,488 $3,857 $88,275
Building and improvements 287,549 53,950 15,427 356,926
358,479 67,438 19,284 445,201
Accumulated depreciation (35,056) (35,056)
Rental properties, net 323,423 67,438 19,284 410,145
Cash and equivalents 2,650 2,650
Tenant receivables, net 5,783 5,783
Deferred financing costs, net 3,964 3,964
Other assets 8,253 8,253
Total assets $344,073 $67,438 $19,284 $430,795
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage and other notes payable $192,377 $47,792 $14,912 $255,081
Exchangeable Debentures 25,000 25,000
Accounts payable and accrued
expenses 10,179 10,179
Total Liabilities 227,556 47,792 14,912 290,260
Minority Interest 18,418 18,418
Shareholder's equity:
Common Stock $.01 par value,
90,000,000 shares authorized;
5,038,999 shares issued
and outstanding 50 50
Convertible Preferred stock
$.01 par value, 3,500,000
shares designated; 2,314,189
shares issued and outstanding 23 23
Additional paid-in capital 121,247 19,646 4,372 145,265
Accumulated distributions in
excess in of earnings (23,221) (23,221)
Total stockholders' equity 98,099 19,646 4,372 122,117
Total liabilities and
stockholders' equity $344,073 $67,438 $19,284 $430,795
</TABLE>
The accompanying notes and management assumptions are
an integral part of these consolidated pro forma financial statements.
F-6
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
<TABLE>
Period ending June 30, 1997
Chicago Mitchellville Other
Historical Properties Plaza Adjustments Pro Forma
(B) (C) (unaudited)
<S> <C> <C> <C> <C> <C>
Revenue:
Minimum rents $20,666 $3,424 $1,058 $ - $25,148
Tenant reimbursements 4,231 1,546 302 - 6,079
Percentage rents 573 124 0 - 697
Other income 447 46 0 - 493
Total revenues 25,917 5,140 1,360 0 32,417
Expenses:
Property operating and
maintenance 6,726 1,845 325 160(D) 9,056
General and administrative 2,140 2,140
Interest 8,928 2,448(E) 11,376
Depreciation and
amortization 5,117 1,101(F) 6,218
22,911 1,845 325 3,709 28,790
Income (loss) before income
from Management
Company and minority interest 3,006 3,295 1,035 (3,709) 3,627
Income from Management Company 299 0 0 299
Income (loss) before minority
interest and distribution to
Preferred Stockholders 3,305 3,295 1,035 (3,079) 3,926
Income allocated to minority
interest (499) 0 0 (182) (681)(G)
Income before distributions
to preferred stockholders 2,806 3,295 1,035 (3,891) 3,245
Distributions to preferred
stockholders (2,820) (2,820)
Income (loss) allocated
to common stockholders ($14) $3,295 $1,035 ($3,891) $425
Income (loss) allocated
to common stockholders ($0.00) $0.09
Average number of
outstanding shares 4,968 4,968
</TABLE>
The accompanying notes and management assumptions are
an integral part of these consolidated pro forma financial statements.
F-7
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
<TABLE>
Year ending December 31, 1996
1996 Chicago Mitchellville Other
Historical Properties Properties Plaza Adjustments Pro Forma
(A) (B) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Minimum rents $31,925 $6,747 $6,847 $2,116 $ - $47,635
Tenant reimbursements 6,704 1,599 3,091 604 - 11,998
Percentage rents 664 349 247 0 - 1,260
Other income 1,672 19 92 0 - 1,783
Total revenues 40,965 8,714 10,277 2,720 0 62,676
Expenses:
Property operating
and maintenance 10,270 2,073 3,687 651 539(D) 17,220
General and
administrative 3,137 3,137
Interest 14,986 8,061(E) 23,047
Depreciation and
amortization 8,019 3,887(F) 11,906
36,412 2,073 3,687 651 12,487 55,310
Income (loss) before
income from Management
Company and minority
interest 4,553 6,641 6,590 2,069(12,487) 7,366
Income from Management
Company 221 0 0 0 221
Income (loss) before
minority interest and
distribution to
Preferred Stockholders 4,774 6,641 6,590 2,069(12,487) 7,587
Income allocated to
minority interest (694) 0 0 0 (597) (1,291)(G)
Income before
distributions to
preferred stockholders 4,080 6,641 6,590 2,069(13,084) 6,296
Distributions to
preferred stockholders (5,641) (5,641)
Income (loss) allocated
to common stockholders($1,561) $6,641 $6,590 $2,069($13,084) $655
Income (loss) allocated
to common stockholders ($0.46) $0.19
Average number of
outstanding shares 3,367 3,367
</TABLE>
The accompanying notes and management assumptions are
an integral part of these consolidated pro forma financial statements.
F-8
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
NOTES AND MANAGEMENT'S ASSUMPTIONS TO
THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
1. Basis of Presentation:
The accompanying unaudited Pro Forma Consolidated Balance Sheet is
presented as if the Chicago Properties acquisition had occurred on June 30,
1997. The Pro Forma Consolidated Balance Sheet also reflects the acquisition of
Mitchellville Plaza as of June 30, 1997. Mitchellville Plaza is a 155,000 square
foot shopping center located in Mitchellville, Maryland, a suburb of Washington
D.C. The property is anchored by Food Lion. The potential acquisition became
probable on September 8, 1997. Closing is expected to take place in October
1997.
The accompanying unaudited Pro Forma Consolidated Statements of Operations
are presented as if:
(i) the properties acquired in 1996, i.e., Cloppers Mill Village, Takoma Park,
Southside Marketplace, Kings Park, Newtown Square, Northway Shopping Center,
City Line Avenue, Shoppes of Graylyn and Four Mile Fork (together the "1996
Properties") had been consummated as of January 1, 1996;
(ii) the Chicago Properties acquisition had been consummated as of January 1,
1996, and
(iii) the Mitchellville Plaza acquisition had occurred as of January 1, 1996.
These pro forma consolidated financial statements should be read in
conjunction with the historical financial statements and notes thereto. In
management's opinion, all adjustments necessary to reflect the effects of the
acquisition of the 1996 Properties, the Chicago Properties and Mitchellville
Plaza have been made.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the actual financial position at June 30, 1997 or what
the actual results of operations of the Company would have been assuming the
acquisition of the 1996 Properties, the Chicago Properties and Mitchellville
Plaza, had been completed as of January 1, 1996, nor are they indicative of the
results of operations for future periods.
2. Adjustments to Pro Forma Consolidated Balance Sheet:
(A) Reflects the assumed purchase of the Chicago Properties for $67,438
including the payment of transaction expenses of $600. The acquisitions were
financed with assumed mortgage debt of $43,610, borrowings under on the
Company's line of credit of $4,182, and the issuance of 836,000 Common
Units with a value of $19,646.
(B) Reflects the assumed purchase of Mitchellville Plaza for $19,284 including
the payment of transaction expenses of $284. The acquisition is financed with
assumed mortgage debt of $13,934, borrowings under the Company's line of
credit of $978 and the issuance of 186,000 Common Units with a value of $4,372.
F-9
<PAGE>
3. Adjustments to Pro Forma Consolidated Statement of Operations:
(A) Reflects the historical 1996 operations of the 1996 Properties for the
period prior to their acquisition by the Company.
(B) Reflects the operations of the Chicago Properties for the twelve months
ended December 31, 1996 and the six months ended June 30, 1997.
(C) Reflects the operations of Mitchellville Plaza for the twelve months ended
December 31, 1996 and the six months ended June 30, 1997.
<TABLE>
Six Months Year
Ended Ended
June 30, 1997 Dec 31, 1996
<S> <C> <C>
(D) Reflects the net increase in property
operating maintenance costs relating to:
1996 Properties management fees to be incurred $ - $252
Chicago Properties management fees to be incurred 126 219
Mitchellville Plaza management fees to be incurred 34 68
$160 $539
(E) Reflects the net increase in interest
expense relating to:
1996 Properties Mortgage Notes $ - $2,505
Chicago Properties Mortgage Notes 1,705 3,410
Mitchellville Plaza Mortgage Note 557 1,115
Borrowings on the Company's line of credit 186 1,031
$2,448 $8,061
(F) Reflects the net increase in depreciation and
amortization relating to:
Chicago Properties $ 856 $1,713
1996 Properties - 1,684
Mitchellville Plaza 245 490
$1,101 $3,887
Depreciation is calculated using the straight-line
method over 31.5 years.
It is assumed that 80% of the acquisition cost
basis is allocated to the building.
(G) Reflects limited partner's interest in the
Operating Partnership as follows:
Pro Forma income before distributions
and minority interest $3,926 $7,587
Distributions to Preferred Stockholders (84.4%) $2,821 $5,641
Distributions to Preferred Unit holders
minority interest (15.6%) 523 1,045
Total Distributions to Preferred $3,344 $6,686
Income Available for Common Shareholders $ 582 $ 901
Income allocated to common minority interest (27.3%) $ 159 $ 246
Total Income allocated to minority interest $ 681 $1,291
</TABLE>
F-10
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
First Washington Realty Trust, Inc. and Subsidiaries on Form S-3 (File No.
333-24017) of our report dated August 29, 1997, on our audit of the combined
Statement of Revenues and Certain Expenses for the Chicago Properties (as
defined in footnote No. 1 of that statement) for the year ended December 31,
1996, which report is included in this Form 8-K.
COOPERS & LYBRAND L.L.P.
Baltimore Maryland
September 9, 1997
F-11
