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 March 10, 1999
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 includes historical financial
statements and pro forma financial information required by Item 7(a) and (b)
with respect to the two (2) properties (the "Acquired" properties) referred to
in such Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements Applicable to Real Estate Properties Acquired.
Acquired Properties
* Report of Independent Accountants
* Combined Statements of Revenues and Certain Expenses
for the year ended December 31, 1997 and the nine
months ended September 30, 1998
* Notes to Combined Statements of Revenues and Certain Expenses
(b) Pro Forma Financial Information.
Pro Forma (unaudited):
* Pro Forma Consolidated Balance Sheet as of September 30, 1998
* Pro Forma Consolidated Statements of Operations for the year ended
the year ended December 31, 1997 and the nine months
ended September 30, 1998
* 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/ James G. Blumenthal
James G. Blumenthal
Executive Vice President,
Chief Financial Officer
Date: March 10, 1999
2
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Acquired Properties: Page
* Report of Independent Accountants......................................F-2
* Combined Statements of Revenues and Certain Expenses for the year ended
December 31, 1997 and the nine months ended September 30, 1998
(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 September 30, 1998..........F-6
* Pro Forma Consolidated Statements of Operations for the year ended
December 31, 1997 and the nine months ended September 30, 1998.........F-7
* Notes and Management's Assumptions to the Pro Forma
Consolidated Financial Statements......................................F-9
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of First Washington Realty Trust, Inc.
We have audited the accompanying combined statement of revenues and certain
expenses of the Acquired Properties (as defined in footnote No. 1 to this
statement) for the year ended December 31, 1997. This historical statement is
the responsibility of the Acquired Properties' management. Our responsibility is
to express an opinion on this historical 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 historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying historical statement 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 of First Washington Realty Trust, Inc.) as described
in footnote No. 1 and is not intended to be a complete presentation of the
Acquired Properties' revenues and expenses.
In our opinion, the historical statement referred to above presents fairly, in
all material respects, the combined revenues and certain expenses as described
in footnote No. 1 of the Acquired Properties for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
Washington, D.C.
February 12, 1999
F-2
<PAGE>
The Acquired Properties
Combined Statements of Revenues and Certain Expenses
(dollars in thousands)
Year Ended Nine Months Ended
December 31, 1997 September 30, 1998
----------------- -------------------
Minimum Base Rents $3,222 $1,895
Tenant Reimbursement Income 527 260
Percentage Rents 30 0
Other Income 3 17
---------- --------
Total Revenues 3,782 2,172
------- -----
Real Estate Tax Expense 324 152
Recoverable Operating Expenses 277 103
Other Expense 40 20
--------- ---------
Total Certain Expenses 641 275
-------- ------
Revenues in Excess of Certain Expenses $3,141 $1,897
======== ========
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
"Statements") relate to the operations of two shopping center
properties (the "Acquired Properties") which were acquired by First
Washington Realty Trust Partnership (the "Company"), whose general
partner is First Washington Realty Trust, Inc. The accompanying
Statements include certain accounts of the following properties:
Percent
Location of GLA Leased
Name Property Area (sf) 9/30/98
- ------ ------------ --------- -------
Parkville Shopping Center Baltimore, MD 140,925 99.1%
Town Center at Sterling Sterling, VA 179,002 85.2%
Significant Tenants
Lease Expiration Date
- ----------------------
A&P Superfresh (2003)
Rite Aid (2001)
Giant Food (2003)
TOTAL/AVERAGE 319,927 91.3%
======= =====
Revenues and expenses are recorded using the accrual basis of
accounting.
The accompanying Statements are not representative of the actual
operations for the periods 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 Acquired Properties have been
excluded. The Company is not aware of any material factors relating to
the Acquired Properties that would cause the reported financial
information not to be necessarily indicative of future operating
results. Items excluded consist of termination fees, interest expense
and income, depreciation and amortization and management fees which in
the opinion of management, are not directly related to the future
operations of the properties.
The unaudited interim combined statement of revenues and certain
expenses of the Acquired Properties are prepared pursuant to the
Securities and Exchange Commission's rules and regulations and
generally accepted accounting principles applicable to interim
financial statements. The interim period reflects operations for the
nine months ended September 30, 1998 for Town Center at Sterling and
two months ended February 28, 1998, for Parkville Shopping Center (the
date of acquisition by the Company). In the opinion of management, all
adjustments, consisting solely of normal recurring adjustments,
necessary for fair presentation of the combined statement 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>
2. 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 year ended December 31, 1997 and the
nine months ended September 30, 1998 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 year ended
December 31, 1997 and the nine months ended September 30, 1998 were $1
and $3, respectively.
The following tenants accounted for 10% or more of the total rents for
1997:
Giant Food . . . . . . . . . . . . . . . . . . . . . . . $ 475
The properties are leased to tenants under operating leases with
expiration dates extending to the year 2008. Minimum future base
rentals under noncancelable operating leases as of December 31, 1997
are approximately as follows:
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,091
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,601
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,054
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,772
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,113
2004 and thereafter . . . . . . . . . . . . . . . . . . . 1,345
-------
$11,976
=======
F-5
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
(dollars in thousands)
(unaudited)
As of September 30, 1998
---------------------------------------------
<TABLE>
<S> <C>
Historical Willston I
---------- ----------
(A)
ASSETS
Rental properties:
Land.........................................$99,557 $2,076
Building and improvements....................408,567 8,305
------- -------
508,124 10,381
Accumulated depreciation ....................(48,045)
------- -------
Rental properties, net ....................460,079 10,381
Cash and equivalents ............................. 2,868 (168)
Tenant receivables, net........................... 7,680
Deferred financing costs, net .................... 2,260 0
Other assets ............................. 14,931
------- -----
Total assets.................................487,818 10,213
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage and other notes ....................$218,296 $0
Exchangeable Debentures .................... 25,000
Accounts payable and accrued expenses........ 9,920 668
-------- -------
Total Liabilities 253,216 668
======== -------
Minority Interest ............................. 52,500 7,211
Shareholder's equity:
Convertible Preferred stock $.01 par value,
3,800,000 shares designated; 2,314,189
shares issued and outstanding................ 23
Common Stock $.01 par value, 90,000,000
shares authorized; 8,566,985 shares issued
and outstanding ............................. 86
Additional paid-in capital....................... 212,935 2,334
Accumulated distributions in excess of
earning...................................... (30,942)
--------- -------
Total stockholders' equity................... 182,102 2,334
--------- -------
Total liabilities and stockholder's equity...$487,818 $10,213
========= =======
<C> <C> <C>
Town Pro
Willston II Center Forma
----------- ------ ------
(A) (B) (un-
audited)
ASSETS
Rental properties:
Land.........................................$ 2,668 $4,414 $108,715
Building and improvements.................... 10,671 17,657 445,200
------- ------ -------
13,339 22,071 553,915
Accumulated depreciation .................... (48,045)
------- ------- --------
Rental properties, net .................... 13,339 22,071 505,870
Cash and equivalents ............................. (317) 2,383
Tenant receivables, net........................... 7,680
Deferred financing costs, net .................... 100 88 2,448
Other assets ............................. 14,931
------- ------ -------
Total assets.................................$ 13,122 $22,159 $533,312
======= ====== =======
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage and other notes ....................$ 10,660 14,654 243,610
Exchangeable Debentures .................... 25,000
Accounts payable and accrued expenses........ 160 20 10,768
------ ------ -------
Total Liabilities 10,820 14,674 279,378
------ ------ -------
Minority Interest ............................. 1,354 5,640 66,705(C)
Shareholder's equity:
Convertible Preferred stock $.01 par value,
3,800,000 shares designated; 2,314,189
shares issued and outstanding................ 23
Common Stock $.01 par value, 90,000,000
shares authorized; 8,566,985 shares issued
and outstanding ............................. 86
Additional paid-in capital....................... 948 1,845 218,062(C)
Accumulated distributions in excess of (30,942)
earning......................................-------- ------ -------
Total stockholders' equity................... 948 1,845 187,229
--------- -------- -------
Total liabilities and stockholder's equity...$ 13,122 $22,159 $533,312
========= ====== =======
</TABLE>
The accompanying notes are an integral part of the statements of revenues and
certain expenses.
F-6
<PAGE>
FIRST WASHINGTON REALTY TRUST INC.,
PRO FORMA CONDOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
For the Year Ended December 31, 1997
<TABLE>
<S> <C> <C>
Other
1997 1998
Historical Properties Properties
----------- ---------- ----------
(A) (B)
Revenue:
Minimum rents $43,857 $6,672 $6,922
Percentage rents 1,060 571 363
Tenant reimbursements 9,506 2,643 1,712
Other income 1,211 48 24
----------- --------- ----------
Total revenues 55,634 9,934 9,021
----------- --------- ----------
Expenses:
Property operating and maintenance 13,522 2,900 2,008
General and administrative 3,363
Interest 18,416
Depreciation and amortization 11,172
----------- --------- ----------
46,473 2,900 2,008
----------- --------- ----------
Income before income from Management Company
and minority interest 9,161 7,034 7,013
Gain on sale of property 549
Income from Management Company 433
----------- --------- ----------
Income before extraordinary item, minority interest
and distribution to
Preferred Stockholders 10,143 7,034 7,013
Extraordinary item - Loss on early
extinguishment of debt (954)
------------ --------- ----------
Income before minority interest and 9,189 7,034 7,013
distributions to Preferred Stockholders
(Income) allocated to minority interest (1,579)
------------ --------- ----------
Income before distributions to Preferred 7,610 7,034 7,013
Stockholders
Distributions to Preferred Stockholders (5,641)
------------ --------- ----------
Income allocated to Common Stockholders $1,969 $7,034 $7,013
======= ====== ======
Proforma Net Income before gain on sale
of properties and extraordinary item $2,374
Gain on sale of properties 549
Extraordinary Item (954)
------
Proforma Net Income $1,969
======
Earnings per Common Share - Basic
Income before extraordinary item $0.42
Gain on sale of properties 0.10
Extraordinary Item (0.17)
------
Net Income per Common Share - Basic $0.35
======
<PAGE>
Earnings per Common Share - Diluted
Income before extraordinary item $0.41
Gain on sale of properties 0.10
Extraordinary Item (0.17)
------
Net Income per Common Share - Diluted $0.34
======
Shares of Common Stock, in thousands - Basic 5,663
======
Shares of Common Stock, in thousands - Diluted 5,730
======
<PAGE>
<C> <C>
1998 Acquired
Sales Properties
----- ----------
(C)
Revenue:
Minimum rents $(2,161) $3,222
Percentage rents -0- 30
Tenant reimbursements (27) 527
Other income (100) 3
--------- ------
Total revenues (2,288) 3,782
--------- ------
Expenses:
Property operating and maintenance (1,155) 641
General and administrative
Interest
Depreciation and amortization --------- ------
(1,155) 641
-------- ------
Income before income from Management Company
and minority interest (1,133) 3,141
Gain on sale of property
Income from Management Company ------- --------
Income before extraordinary item, minority interest
and distribution to Preferred Stockholders (1,133) 3,141
Extraordinary item - Loss on early
extinguishment of debt
Income before minority interest and ------- --------
distribution to Preferred Stockholders (1,133) 3,141
(Income) allocated to minority interest ------- --------
Income before distributions to Preferred
Stockholders (1,133) 3,141
Distributions to Preferred Stockholders ------- ---------
Income allocated to Common Stockholders $(1,133) $ 3,141
======= =========
Revenue: Adjustments Proforma
----------- --------
Minimum rents $58,512
Percentage rents 2,024
Tenant reimbursements 14,361
Other income 1,186
------------ ----------
Total revenues 76,083
------------ ----------
Expenses:
Property operating and maintenance 505(D) 18,421
General and administrative 3,363
Interest 2,109(E) 20,525
Depreciation and amortization 3,634(F) 14,806
---------- ----------
6,248 57,115
---------- ----------
Income before income from Management Company
and minority interest (6,248) 18,968
Gain on sale of property 549
Income from Management Company 433
-------- ----------
<PAGE>
Income before extraordinary item, minority interest
and distribution to Preferred Stockholders 6,248 19,950
Extraordinary item-Loss on early extinguishment
of debt (954)
-------- --------
Income before minority interest and distributions (6,248) 18,996
to Preferred Stockholders
(Income) allocated to minority interest (2,786)(G) (4,365)
---------- ----------
Income before distributions to Preferred
Stockholders (9,034) 14,631
Distributions to Preferred Stockholders (5,641)
--------- ---------
Income allocated to Common Stockholders $(9,034) $8,990
========= =========
Proforma Net Income before gain on sale
of properties and extraordinaty item $9,395
Gain on sale of properties 549
Extraordinary Item (954)
------
Proforma Net Income $8,990
======
Earnings per Common Share - Basic
Income before extraordinary item $1.07
Gain on sale of properties 0.06
Extraordinary Item (0.11)
------
Net Income per Common Share - Basic $1.02
======
Earnings per Common Share - Diluted
Income before extraordinary item $1.06
Gain on sale of properties 0.06
Extraordinary Item (0.11)
-------
Net Income per Common Share - Diluted $1.01
======
Shares of Common Stock, in thousands - Basic 8,819
======
Shares of Common Stock, in thousands - Diluted 8,884
======
</TABLE>
The accompanying notes are an integral part of the statements of revenues and
certain expenses.
F-7
<PAGE>
FIRST WASHINGTON REALTY TRUST INC.,
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
Nine Months Ended September 30, 1998
<TABLE>
<S> <C> <C>
Other
1998 1998
Historical Properties Sales
----------- ---------- -----
(B) (C)
Revenue:
Minimum rents $41,689 $2,826 ($544)
Percentage rents 925 96 0
Tenant reimbursements 9,847 724 (16)
Other income 854 12 (36)
----------- ---------- ------
Total revenues 53,315 3,658 (596)
----------- ---------- ------
Expenses:
Property operating and maintenance 12,838 924 (379)
General and administrative 2,709
Interest 14,782
Depreciation and amortization 10,687
----------- ---------- ------
41,016 924 (379)
----------- ---------- -------
Income before income from Management
Company and minority interest 12,299 2,734 (217)
Gain on sale of property 2,018 (2,018)
Income from Management Company 281
----------- ---------- ------
Income before extraordinary item,
minority interest and distribution
to Preferred Stockholders 14,598 2,734 (2,235)
Extraordinary item- Loss on early
extinguishment of debt (358) 121
----------- ---------- --------
Income before minority interest
and distributions
to Preferred Stockholders 14,240 2,734 (2,114)
<PAGE>
Income allocated to minority interest (3,069)
------------ ---------- -------
Income before distributions to Preferred 11,171 2,734 (2,114)
Stockholders
Distributions to Preferred Stockholders (4,231)
------------ ---------- -------
Income(loss) allocated to Common
Stockholders $6,940 $2,734 ($2,114)
============ ========== ========
Profroma Net income before gain on sale
of properties and extraordinary item $5,280
Gain on sale of properties 2,018
Extraordinary item (358)
-----------
Proforma Net Income $6,940
===========
Earnings per Common Share - Basic
Income before extraordinary item $0.68
Gain on sale of properties $0.26
Extraordinary Item (0.05)
-----------
Net Income per Common Share - Basic $0.89
===========
Earnings per Common Share- Diluted
Income before extraordinary item $0.67
Gain on sale of properties $0.26
Extraordinary Item (0.05)
-----------
Net Income per Common Share - Diluted $0.88
===========
Shares of Common Stock, in thousands -
Basic 7,769
===========
Shares of Common Stock, in thousands -
Diluted 7,848
===========
</TABLE>
<TABLE>
<S> <C> <C>
Acquired Adjustments
Properties (2) Proforma
----------- ---------- -----
Revenue:
Minimum rents $1,863 $45,834
Percentage rents 0 1,021
Tenant reimbursements 260 10,815
Other income 17 847
----------- ---------- ------
Total revenues 2,140 0 58,517
----------- ---------- ------
Expenses:
Property operating and maintenance 275 128(D) 13,786
General and administrative 2,709
Interest 801(E) 15,583
Depreciation and amortization 901(F) 11,588
----------- ---------- ------
275 1,830 43,666
----------- ---------- -------
Income before income from Management
Company and minority interest 1,865 (1,830) 14,851
Gain on sale of property (0)
Income from Management Company 281
----------- ---------- ------
Income before extraordinary item,
minority interest and distribution
to Preferred Stockholders 1,865 (1,830) 15,132
Extraordinary item - Loss on early
extinguishment of debt (237)
---------- ---------- -------
Income before minority interest
and distributions
to Preferred Stockholders 1,865 (1,830) 14,895
<PAGE>
Income allocated to minority interest (379)(G) (3,448)
------------ ---------- -------
Income before distributions to Preferred
Stockholders 1,865 (2,209) 11,447
Distributions to Preferred Stockholders (4,231)
------------ ---------- -------
Income(loss) allocated to common
stockholders $1,865 (2,209) $7,216
============ ========== ========
Profroma Net income before gain on sale
of properties and extraordinary item $7,453
Gain on sale of properties (0)
Extraordinary item (237)
-----------
Proforma Net Income $7,216
===========
Earnings per Common Share - Basic
Income before extraordinary item $0.87
Gain on sale of properties $0.00
Extraordinary Item (0.03)
-----------
Net Income per Common Share - Basic $0.84
===========
Earnings per Common Share- Diluted
Income before extraordinary item $0.87
Gain on sale of properties $0.00
Extraordinary Item (0.03)
-----------
Net Income per Common Share - Diluted $0.84
===========
Shares of Common Stock, in thousands -
Basic 8,548
===========
Shares of Common Stock, in thousands -
Diluted 8,627
===========
</TABLE>
The accompanying notes are an integral part of the statements of revenues and
certain expenses.
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 Parkville Shopping Center and Town Center at Sterling
("Acquired Properties") acquisition had occurred on September 30, 1998. The Pro
Forma Consolidated Balance Sheet also reflects the acquisition of Willston
Centre I & II as of September 30, 1998. Willston Centre I is an 86,000 square
foot center anchored by CVS/Pharmacy and Willston Centre II is a 127,000 square
foot center anchored by Safeway. Both centers are located in Falls Church,
Virginia. The properties were acquired on November 3, 1998.
The accompanying unaudited Pro Forma Consolidated Statements of Operations
are presented as if:
(i) the properties acquired in 1997, i.e., Ashburn, Mallard Creek, McHenry
Commons, Pheasant Hill, Riverside, Stonebrook, The Oaks, Mitchellville and
Spring Valley (together the "1997 Properties") had been consummated as of
January 1, 1997;
(ii) the properties acquired in 1998, i.e., Bowie Plaza, Watkins Park, Elkridge,
Village, Willston Centre I & II (together the "Other 1998 Properties") had
been consummated as of January 1, 1997;
(iii)the properties sold in 1998 i.e., Branchwood and Park Place Apartments,
3269 M Street, 3033 M Street and 1328 Wisconsin Avenue (together the "1998
Sales") had occurred on January 1, 1997, and
(iv) The Common Stock offerings completed in 1997 and 1998 occurred as of
January 1, 1997.
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 Acquired Properties, the 1997 Properties, the Other 1998
Properties and 1998 Sales have been made.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the actual financial position at September 30, 1998 or
what the actual results of operations of the Company would have been assuming
the acquisition of the Acquired Properties, the 1997 Properties, the Other 1998
Properties and 1998 Sales, had been completed as of January 1, 1997, nor are
they indicative of the results of operations for future periods.
2. Adjustments to Pro Forma Consolidated Balance Sheet:
(A) Reflects the purchase of Willston Centre I & II for $23,720 plus the
payment of financing expenses of $100. The acquisitions were financed with
assumed mortgage debt of $10,660, payables of $828, the issuance of 515,084
Common Units with a value of $11,847 and cash of $485.
(B) Reflects the purchase of Town Center at Sterling for $22,071 plus the
payment of financing expenses of $88. The acquisition was financed with the
assumed mortgage debt of $9,342, borrowings under the Company's line of
credit of $5,312, payables of $20, and the issuance of 325,453 Common Units
with a value of $7,485.
(C) Reflects the adjustment to Minority Interest and additional paid-in-capital
due to the issuance of Common Units.
F-9
<PAGE>
3. Adjustments to Pro Forma Consolidated Statement of Operations:
(A) Reflects the operations of the 1997 Properties for the period prior to
their acquisition by the Company for the year ended December 31, 1997.
(B) Reflects the operations of the Other 1998 Properties for the twelve months
ended December 31, 1997 and the nine months ended September 30, 1998 for
the period prior to their acquisition by the Company.
(C) Reflects the operations of properties sold during 1998 for the twelve
months ended December 31, 1997 and the nine months ended September 30, 1998
for the period prior to their sale by the Company.
Nine Months Year Year
Ended Ended
Sept. 30, 1998 Dec. 31, 1997
================= ===============
(D) Reflects the net increase
(decrease) in property
operating and maintenance
costs that would (would not)
have been incurred relating to:
1997 Properties management fees $-- $246
Other 1998 Properties
management fees 89 221
Properties sold during 1998
management fees (15) (57)
Acquired Properties management fees 54 95
------------------ ---------------
$ 128 $ 505
================== ===============
(E) Reflects the net increase (decrease)
in interest expense relating to:
1997 Properties with mortgage debt
assumed $-- $ 3,027
Other 1998 Properties mortgage debt
assumed 749 1,556
Retired debt related to properties
sold during 1998 (92) (445)
Acquired Properties mortgage debt
assumed 531 899
Borrowings on the Company's line of
credit to finance acquisition 469 1,622
Loan Payoffs from proceeds of 1997
and 1998 Common Stock Offerings (856) (4,450)
--------------------- ---------------
$ 801 $ 2,109
===================== ===============
(F) Reflects the net increase (decrease)
in depreciation and amortization
relating to:
1997 Properties Acquisitions $-- $ 1,714
Other 1998 Properties Acquisitions 653 1,729
Properties sold during 1998 (119) (463)
Acquired Properties Acquisitions 367 654
--------------------- ---------------
$ 901 $ 3,634
===================== ===============
Depreciation is calculated using the straight-line method over 31.5 and 40
years. It is assumed that 80% of the acquisition cost basis is allocated to the
building and 20% to the land.
(G) Reflects limited partner's interest in the Operating Partnership as
follows:
Pro Forma income before
distributions and minority
interest $14,895 $18,996
==================== ===============
Distributions to Preferred
Stockholders (84.4%) 4,231 5,641
Distributions to Preferred
Unitholders minority interest
(15.6%) 784 1,045
-------------------- ---------------
Total Distributions to
Preferred Stockholders $ 5,015 $ 6,686
==================== ===============
<PAGE>
Income Available for Common
Shareholders $ 9,880 $12,310
==================== ===============
Income allocated to common
minority interest (27.0%) $ 2,664 $ 3,320
==================== ===============
Total Income allocated to
minority interest $ 3,448 $4,365
==================== ===============
F-10
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in (1) the Prospectus
consitiuting part of the Registration Statement of First Washington Realty
Trust, Inc. and Subsidiaries on Form S-3 (File No. 333-24017) and (2) the
Registration Statements of First Washington Realty Trust, Inc. and Subsidiaries
on Forms S-3 (File No. 333-24543, 333-44681, 333-66355 and 333-70837) and Forms
S-8 (File No. 333-57237 and 333-57241) of our report dated February 12, 1999, on
our audit of the combined Statement of Revenues and Certain Expenses for the
Acquired Properties (as defined in footnote No. 1 to this statement) for the
year ended December 31, 1997, which appears on page F-2 of this Form 8-K.
PricewaterhouseCoopers LLP
Washington, DC
March 10, 1999
