FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 31, 2000
Commission File Number 0-25230
FIRST WASHINGTON REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1879972
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
4350 East-West Highway, Suite 400, Bethesda, MD 20814
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (301) 907-7800
--------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Common Stock, $.01 par value, outstanding as of May 12, 2000:
10,097,709 Shares of Common Stock
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC.
FORM 10-Q
INDEX
Part I: Financial Information Page
- ------------------------------ ----
Item 1. Consolidated Balance Sheets as of March 31, 2000
(unaudited) and December 31, 1999 1
Consolidated Statements of Operations (unaudited)
for the three months ended March 31, 2000 and 1999 2
Consolidated Statements of Cash Flows (unaudited)
for the three months ended March 31, 2000 and 1999 3
Notes to Unaudited Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Qualitative and Quantitative Disclosures about Market Risk 9
Part II: Other Information
- ---------------------------
Item 2. Recent Sales of Unregistered Equity Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands except share data)
-----------
March 31, December 31,
2000 1999
-------- -------------
(unaudited)
ASSETS
Rental properties:
Land $ 119,939 $ 119,965
Buildings and improvements 496,231 495,031
-------- --------
616,170 614,996
Accumulated depreciation (71,340) (67,029)
-------- --------
Rental properties, net 544,830 547,967
Cash and equivalents 7,326 4,332
Tenant receivables, net 13,162 11,750
Deferred financing costs, net 5,117 5,137
Other assets 14,045 14,107
-------- --------
Total assets $ 584,480 $ 583,293
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 305,071 $ 298,116
Accounts payable and accrued expenses 9,536 12,350
-------- --------
Total liabilities 314,607 310,466
Minority interest 65,060 66,267
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock $.01 par value,
10,000,000 shares authorized, 3,800,000
shares designated; 2,238,905 and 2,359,202
issued and outstanding, respectively
liquidation value of $25.00 per share 22 24
Common stock $.01 par value, 90,000,000 shares
authorized; 10,090,017 and 9,709,670 shares
issued and outstanding, respectively 100 97
Additional paid-in capital 245,033 245,054
Accumulated distributions in excess
of earnings (40,342) (38,615)
--------- --------
Total stockholders' equity 204,813 206,560
--------- --------
Total liabilities and
stockholders' equity $ 584,480 $ 583,293
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
-------
For three months ended
March 31,
======================
2000 1999
---- ----
Revenues:
Minimum rents $ 17,711 $ 15,976
Tenant reimbursements 5,406 4,298
Percentage rents 447 381
Other income 427 470
-------- --------
Total revenues 23,991 21,125
-------- --------
Expenses:
Property operating and maintenance 6,070 5,205
General and administrative 1,216 1,095
Interest 5,821 5,525
Depreciation and amortization 4,624 4,212
-------- --------
Total expenses 17,731 16,037
-------- --------
Income before income (loss) from
Management Company, minority
interest and distributions to
Preferred Stockholders 6,260 5,088
Income (loss) from Management Company (102) 85
-------- --------
Income before minority interest and
distributions to Preferred
Stockholders 6,158 5,173
Income allocated to minority interest (1,631) (1,306)
-------- -------
Net income 4,527 3,867
Distributions to Preferred Stockholders (1,367) (1,410)
-------- --------
Net income allocated to Common
Stockholders $ 3,160 $ 2,457
======== ========
Net income per Common Share - Basic $ 0.31 $ 0.29
======== ========
Net income per Common Share - Diluted $ 0.31 $ 0.28
======== ========
Weighted average Common Shares - Basic 10,043 8,575
======== ========
Weighted average Common Shares -
Diluted 10,043 8,649
======== ========
Distributions per share $0.4875 $0.4875
======== ========
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
--------
For three months ended
March 31,
======================
2000 1999
---- ----
Operating Activities:
Net Income $ 4,527 $ 3,867
Adjustments to reconcile net income to
net cash provided by operating activities:
Income allocated to minority interest 1,631 1,306
Depreciation and amortization 4,624 4,212
Deferred financing costs and loan premiums (114) (203)
Loss recognized on investment in
Management Company 222 35
Compensation paid or payable in Common shares 430 286
Provision for uncollectible accounts 250 540
Recognition of deferred rent (259) (319)
Net changes in:
Tenant receivables (1,404) (671)
Other assets (387) 394
Accounts payable and accrued expenses (1,431) (124)
-------- --------
Net cash provided by operating activities 8,089 9,323
-------- --------
Investing Activities:
Acquisition of rental properties - (10,344)
Additions to rental properties (1,260) (2,296)
-------- ---------
Net cash used in investing activities (1,260) (12,640)
-------- ---------
Financing Activities:
Proceeds from line of credit 8,500 16,800
Proceeds from mortgage notes refinancings 12,325 -
Proceeds from exercise of stock options - 50
Repayment of Line of Credit (12,000) -
Repayment of mortgage notes (1,555) (1,167)
Additions to deferred financing costs (181) (3,311)
Distributions paid to Preferred Stockholders (1,367) (1,410)
Distributions paid to Common Stockholders (4,887) (4,182)
Distributions paid to minority interest (2,148) (2,015)
Repurchase of Preferred and Common Shares (2,522) -
--------- ---------
Net cash provided by (used in)
financing activities (3,835) 4,765
--------- ---------
Net increase in cash and equivalents 2,994 1,448
Cash and equivalents, beginning of period 4,332 3,163
--------- ---------
Cash and equivalents, end of period $ 7,326 $ 4,611
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
---------
1. Business
General
First Washington Realty Trust, Inc. (the "Company") is a fully integrated
real estate organization with expertise in acquisitions, property management,
leasing, renovation and development of principally supermarket-anchored
neighborhood shopping centers that has elected to be taxed as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code") . The Company owns a portfolio of 62 retail properties (the "Retail
Properties") containing a total of approximately 6.7 million square feet of
gross leasable area ("GLA") located in the Mid-Atlantic region and the Chicago,
Illinois and Milwaukee, Wisconsin metropolitan areas.
The Company currently owns approximately 74.1% of the partnership interests
in First Washington Realty Limited Partnership (the "Operating Partnership").
All of the Company's operations are conducted through the Operating Partnership.
The Operating Partnership owns 43 Properties directly and 19 Properties are
owned by lower tier entities in which the Operating Partnership owns a 99%
partnership interest and the Company (or a wholly-owned subsidiary of the
Company) owns a 1% interest.
Due to the Company's ability, as the general partner, to exercise both
financial and operational control over the Operating Partnership, the Operating
Partnership is consolidated for financial reporting purposes. Allocation of net
income to the limited partners of the Operating Partnership is based on their
respective partnership interests and is reflected in the accompanying
Consolidated Financial Statements as minority interests. Losses allocable to the
limited partners in excess of their basis are allocated to the Common
Stockholders as the limited partners have no requirement to fund losses.
The Operating Partnership also owns 100% of the non-voting preferred stock
of First Washington Management, Inc. ("FWM" or "Management Company") and is
entitled to 99% of the cash flow from FWM. FWM provides management, leasing and
related services for the Retail Properties and to third-party clients, including
individual, institutional and corporate property owners.
2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited interim consolidated financial statements of the Company are
prepared pursuant to the Securities and Exchange Commission's rules and
regulations for reporting on Form 10-Q and should be read in conjunction with
the financial statements and the notes thereto of the Company's 1999 Annual
Report to Stockholders. Accordingly, certain disclosures accompanying annual
financial statements prepared in accordance with generally accepted accounting
principles are omitted. In the opinion of management, all adjustments,
consisting solely of normal recurring adjustments, necessary for fair
presentation of the consolidated financial statements for the interim periods
have been included. The current period's results of operations are not
necessarily indicative of results which ultimately may be achieved for the year.
The consolidated financial statements include the accounts of the Company
and its majority owned entities, including the Operating Partnership. All
significant intercompany balances and transactions have been eliminated.
4
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FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
---------
3. Acquisition of Rental Properties
There were no acquisitions during the first three months of 2000. During
the first three months of 1999, the Company acquired one shopping center for an
aggregate cost of approximately $15,184.
The following unaudited pro forma results of operations are presented as if
the acquisitions and sales of the rental properties that occurred during the
first three months of 1999 had occurred on January 1, 1999. The proforma
statements are provided for information purposes only. They are based on
historical information and do not necessarily reflect the actual results that
would have occurred nor are they necessarily indicative of future results of
operations of the Company.
For the three months ended
March 31,
------------------------
(unaudited)
1999
----
Pro forma total revenues $ 21,125
========
Pro forma net income $ 2,457
========
Pro forma earnings per Common Share - Basic $ 0.29
========
Pro forma earnings per Common Share - Diluted $ 0.28
========
4. Mortgage Debt
In January 2000 the Company obtained financing from Principal Life
Insurance Company ("Principal") for three separate loans totaling $12,325. The
loans are summarized as follows:
Collateral Properties Amount
--------------------- ------
Cudahy Center $ 2,215
Racine Centre 4,585
Whitnall Square 5,525
--------
$ 12,325
The loans bear interest at 7.8%, are amortized over 30 years and mature in
10 years. The loans are not cross-collateralized and allow for the assumption
of each individual loan to a qualified buyer upon sale of the property by the
Company. The all-in weighted average interest rate of the loans will be 7.91%
including the amortization of financing costs. $12,000 of the loan proceeds were
used to pay down the Company's Line of Credit.
5. Preferred Stock
Effective June 1, 1999, shares of Convertible Preferred Stock became
convertible into 1.282051 shares of Common Stock. For the three months ended
March 31, 2000, 19,897 shares of Convertible Preferred Stock were converted into
25,509 shares of Common Stock. The Company may redeem the Convertible Preferred
Stock commencing July 15, 1999 at a redemption price of $27.44 per share. The
redemption price reduces annually thereafter in stages to $25.00 on July 15,
2004.
5
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
---------
6. Share Buyback Authorization
In December 1999, the Company's Board of Directors authorized the
repurchase of the Company's Common and Preferred Shares up to 1,000,000 common
equivalent shares (after taking into account the Preferred Stock conversion
ratio). During the first three months of 2000, the Company repurchased 3,100
common shares and 100,400 preferred shares for an aggregate cost of $2,522. The
repurchases were funded primarily from operating cash flows and borrowings under
the Line of Credit.
7. Stock and Stock Option Plans
In January 2000, under the current Stock Option Plan the Company issued
250,000 options each to two executive officers at a strike price of $18.6875 per
share. The fair value of the options issued are estimated to be $555, as of the
date of the grant, using a binomial model with the following weighted-average
assumptions: risk-free interest rate of 6.4%, dividend rate of 9.3%, volatility
factors of the expected market price of the Company's shares of 17.5%, and a
weighted average expected life of the options of 2.8.
On January 1, 2000, two executive officers received restricted stock grants
of 150,000 each in accordance with their employment agreements
8. Summary of Noncash Investing and Financing Activities
Significant noncash transactions for the three months ended March 31, 2000
and 1999 were as follows:
2000 1999
---- ----
Liabilities assumed in acquisition of
rental properties $ - $ 3,045
Common units in the Operating Partnership
issued in connection with the payoff of
deferred acquisition liabilities $ 1,344 -
Increase (decrease) in minority
interest's ownership of the
Operating Partnership $ (690) $ 104
Accrued compensation paid through the
issuance of Common Stock $ 1,032 $ 1,116
9. Business Segments
The Company owns one property type only (i.e. neighborhood shopping
centers). Resource allocation, determination of compensation packages and
financial analysis are performed by the Company's management for each segment.
The Company measures performance of the segments based on total revenues less
property operating and maintenance expenses, as detailed in the following table:
6
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
---------
Retail
Properties FWM Other (1) Total
---------- --- --------- -----
Three months ended March 31, 2000:
Revenues $ 23,732 $ 1,881 ($ 1,622) $ 23,991
Operating and maintenance expenses 6,070 1,983 (1,983) 6,070
---------- ------- -------- ---------
Income (loss) from operations $ 17,662 ($ 102) $ 361 $ 17,921
========== ======== ======== =========
Commercial real estate property
expenditures $ 1,260 $ - $ - $ 1,260
========== ======= ======== =========
Segment assets at March 31, 2000 $ 584,480 $ - $ - $ 584,480
========== ======= ======== =========
Three months ended March 31, 1999:
Revenues $ 20,806 $ 1,810 ($ 1,491) $ 21,125
Operating and maintenance expenses 5,205 1,725 (1,725) 5,205
--------- ------- --------- ---------
Income from operations $ 15,601 $ 85 $ 234 $ 15,920
========= ======= ========= =========
Commercial real estate property
expenditures $ 17,404 $ - $ - $ 17,404
========= ======= ======== =========
Segment assets at March 31, 1999 $548,912 $ - $ - $ 548,912
========= ======= ======== =========
The following table reconciles income from operations for reportable
segments to net income as reported in the Consolidated Statements of Operations.
Three months ended
March 31,
==================
2000 1999
---- ----
Income from operations for reportable segments $ 17,921 $ 15,920
General and administrative expenses (1,216) (1,095)
Interest expense (5,821) (5,525)
Depreciation and amortization (4,624) (4,212)
Income allocated to minority interest (1,631) (1,306)
Distributions to Preferred Stockholders (1,367) (1,410)
Income (loss) from Management Company (102) 85
-------- --------
Net income allocated to Common Stockholders $ 3,160 $ 2,457
======== ========
(1) Represents the adjustment for straight-lining of rents and reflecting the
net income from FWM using the equity method of accounting.
10. Subsequent Events
On April 14, 2000, the Board of Directors declared a distribution of
$0.4875 and $0.6094 per share of Common Stock and Preferred Stock, respectively,
to shareholders of record as of May 1, 2000, payable on May 15, 2000.
7
<PAGE>
During May 2000, the Company executed loan commitment letters for the
refinancing of the two mortgage loans maturing in July 2000. The two loans have
an aggregate balance of approximately $16,900 and are collateralized by Festival
at Woodholme and Stonebrook Shopping Centers. The estimated loan proceeds are
approximately $20,200. The Company executed rate lock agreements with the
lenders which fix the rate at 8.6% over the terms of the respective loans. The
loans will probably close during June 2000. Simultaneously with executing the
rate lock agreements, the Company sold its $24,000 forward interest rate swap
contract for $1,640. The Company will recognize the proceeds as a reduction of
interest expense over the life of the new loans. After taking into account the
swap proceeds, the weighted average interest rate on the new loans is
approximately 7.6%.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Overview
The following discussion should be read in conjunction with the Financial
Statements and notes thereto of the Company appearing elsewhere in this Form
10-Q. Dollars are in thousands except per share data.
Comparison of the three months ended March 31, 2000 to the three months
ended March 31, 1999.
For the three months ended March 31, 2000, the net income allocated to
common stockholders increased by $703 or 28.6% from $2,457 to $3,160, when
compared to the three months ended March 31, 1999, primarily due to increases in
revenues offset by an increase in expenses, income in 1999 versus a loss in 2000
from the Management Company, and an increase in the amount of income allocated
to minority interests.
Total revenues increased by $2,866 or 13.6%, from $21,125 to $23,991, due
primarily to an increase in minimum rents of $1,735, and tenant reimbursements
of $1,108. The increases were primarily due to the purchase of Newark Shopping
Center in August 1999, Saratoga Shopping Center in October 1999, Woodmoor
Shopping Center in November 1999, and Westmont Shopping Center, Cudahy Center,
Racine Centre and Whitnall Square in December 1999 (collectively the "1999
Acquisitions"). Total revenues increased by $1,943 due to the 1999 Acquisitions.
This increase in total revenues was due primarily to an increase in minimum
rents of $1,404 and tenant reimbursements of $463. For properties owned for all
of 1999 and 2000, total revenues increased by $1,019 (4.8%). This increase was
primarily due to increases in minimum rents of $329 (2.1%) and tenant
reimbursements of $743 (17.7%). The increases in total revenues were offset by a
decrease of $397 due to the sale of properties during 1999.
Property operating and maintenance expense increased by $865, or 16.6%,
from $5,205 to $6,070. Operating and maintenance expenses increased by $573 due
to the purchase of the 1999 Acquisitions. For properties owned for all of 1999
and 2000 total operating and maintenance expense increased by $395 (7.8%)
primarily due to an increase in snow removal expenses. Operating and maintenance
expenses decreased $103 due to properties sold during 1999. General and
administrative expenses increased by $121 or 11.1%, from $1,095 to $1,216 due
primarily to increases in restricted share expense of $142.
Interest expense increased by $296, or 5.4%, from $5,525 to $5,821, due
primarily to the increase in borrowings under the Line of Credit ($14,500), an
increase in new and assumed mortgage indebtedness associated with the 1999
Acquisitions ($28,585) and net refinancing proceeds ($6,183), offset by a
decrease in indebtedness due to the curtailment of mortgage debt ($6,429), and
the conversion of the Debentures to Preferred Stock ($25,000). The weighted
average debt outstanding increased from $284.3 million in 1999 to $298.6 million
in 2000, and the weighted average interest rate remained the same at 7.8%.
Depreciation and amortization expenses increased by $412 or 9.8% from
$4,212 to $4,624 primarily due to the 1999 Acquisitions.
Income allocated to minority interests increased by $325, or 24.9%, from
$1,306 to $1,631 due to an increase in net income, and an increase in the
minority interests ownership of the Operating Partnership from 25.3% to 26.5%.
Liquidity and Capital Resources
Indebtedness
As of March 31, 2000, the Company had total mortgage indebtedness of
approximately $305,100. The mortgage indebtedness is collateralized by 46 of the
properties. Of the Company's indebtedness, $56,000 (18.4%) is variable rate
indebtedness, and $249,100 (81.6%) is at a fixed rate. The effective interest
rates of the indebtedness range from 5.4% to 9.7%, with a weighted average
8
<PAGE>
interest rate of 7.6%, and will mature between 2000 and 2014. Approximately
27.1% of the Company's indebtedness will become due by 2001, requiring balloon
payments of $16,900 in 2000, and $54,200 in 2001. From 2000 through 2014, the
Company will have to refinance an aggregate of $250,200. Since the Company
anticipates that only a small portion of the principal of such indebtedness will
be repaid prior to maturity and the Company will likely not have sufficient
funds on hand to repay such indebtedness, the Company will need to refinance
such indebtedness through modification or extension of existing indebtedness,
additional debt financing or through an additional offering of equity
securities.
The Company has a collateralized revolving Line of Credit of $51,000 with
the Union Bank of Switzerland (UBS AG). This line is collateralized by seven
properties (Kenhorst Plaza, Shoppes of Graylyn, Watkins Park Plaza, Four Mile
Fork, Takoma Park, Centre Ridge Marketplace and Newtown Square). The line
matures on January 31, 2001 and loans under this line will bear interest at the
30-day LIBOR rate plus one percent (1%). As of March 31, 2000, there was $40,500
outstanding under the Line of Credit. The Company currently has in place a cap
on 30-day LIBOR in the notional amount of $40,500, which limits the Company's
exposure to an increase in interest rates. The cap contract covers the period
from April 1, 2000 through July 1, 2000. The cap counter party is required to
pay to the Company any amount in excess of 6.25%, thereby limiting the Company's
exposure to 30-day LIBOR to a maximum of 6.25%.
Liquidity
The Company expects to meet its short-term liquidity requirements generally
through its working capital, net cash provided by operations and draws on the
Line of Credit and the leveraging of currently unencumbered Retail Properties.
The Company believes that the foregoing sources of liquidity will be sufficient
to fund liquidity needs through 2001.
The Company expects to meet certain long-term liquidity requirements such
as development, property acquisitions, scheduled debt maturities, renovations,
expansions and other non-recurring capital improvements through long-term
secured and unsecured indebtedness, including the Line of Credit and the
issuance of additional equity and debt securities. The Company also expects to
use funds available under the Line of Credit to fund acquisitions, development
activities and capital improvements on an interim basis.
The Company has elected to qualify as a REIT for federal income tax
purposes commencing with its tax year ended December 31, 1994. To qualify as a
REIT, the Company is required, among other items, to pay distributions to its
shareholders of at least 95% of its taxable income. The Company intends to make
quarterly distributions to its shareholders from operating cash flow.
Item 3. Qualitative and Quantitative Disclosure about Market Risk
The Company is exposed to certain financial market risks, the most
predominant being fluctuations in interest rates. Interest rate fluctuations are
monitored by management as an integral part of the Company's overall risk
management program, which recognizes the unpredictability of financial markets
and seeks to reduce the potentially adverse effect on the Company's results. Our
interest rate risk management objective is to limit the impact of interest rate
changes on earnings and cash flows and to lower our overall borrowing costs. To
achieve these objectives, from time to time we enter into interest rate hedge
contracts such as swap and cap agreements in order to mitigate our interest rate
risk with respect to various debt instruments. We do not hold or issue these
derivative contracts for trading or speculative purposes. The effect of interest
rate fluctuations historically has been small relative to other factors
affecting operating results, such as rental rates and occupancy.
The Company's operating results are affected by changes in interest rates
on variable rate borrowings including the Company's Line of Credit facilities as
well as other mortgages and notes with variable interest rates. If interest
rates increased by 100 basis points, the Company's interest expense for the
three months ended March 31, 2000 would have increased by $131 based on balances
during the three months ending March 31, 2000. The following is a summary of the
Company's long term debt as of March 31, 2000:
9
<PAGE>
Expected Maturity Date of Balloon Payments
------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
2000 2001 2002 2003 2004
---- ---- ---- ---- ----
FIXED RATE $16,933 $ 7,237 $11,843 $14,927 -
- -----------
<C> <C> <C>
Total Fair Value
Balloon of Debt as of
Thereafter Payments 3/31/00
- ----------- -------- --------------
$ 146,639 $ 197,579 $ 244,307
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Total
Balloon
2000 2001 2002 2003 2004 Thereafter Payments
---- ---- ---- ---- ---- ---------- --------
Average Interest Rate 9.3% 7.4% 7.0% 7.2% - 7.7% 7.6%
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
2000 2001 2002 2003 2004
---- ---- ---- ---- ----
VARIABLE RATE
- -------------
LIBOR-based(1):
Potomac Plaza (LIBOR
plus 2.25%) 2,418
Line of Credit (LIBOR
plus 1.0%) (2) 40,500
Ashburn Farms (LIBOR
plus 1.5%) 6,443
---- -------- ---- ---- --------
<C> <C>
Total Fair Value
Balloon of Debt as of
Payments 3/31/00
- -------- -------------
2,418 2,418
40,500 40,500
6,433 6,433
- ------ ------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Total
Balloon
2000 2001 2002 2003 2004 Thereafter Payments
---- ---- ---- ---- ---- ---------- --------
Total LIBOR-based - 46,943 - - 2,418 - 49,361
Tax-exempt:
Mayfair Shopping 3,235 3,235
Center (3)
Total variable - 46,943 - - 2,418 3,235 52,596
rate debt ---- ------ ---- ---- ----- ------- --------
Total Debt $16,933 $54,180 $11,843 $14,927 $2,418 $149,874 $250,175
<C>
Fair Value
of Debt as of
3/31/00
- --------------
49,361
3,235
52,596
--------
296,903
</TABLE>
(1) At March 31, 2000 the LIBOR rate was 6.13%.
(2) This schedule assumes that the Line of Credit is repaid at the maturity
date.
(3) The interest rate is determined weekly at the rate necessary to produce a
bid in the process of remarketing the obligation equal to par plus accrued
interest. The Company also pays a 1.5% letter of credit enhancement fee to
Mellon Bank.
Currently the Company has only one interest rate swap contract in effect.
The notional amount is $24,000, the contract period is May 1, 2000 through May
2, 2005. The Company pays a fixed rate of 5.85% and receives the 30-day LIBOR
rate. As of March 31, 2000, this swap contract has a fair market value of
approximately $1,159. If interest rates increase by 100 basis points, the fair
market value of this interest rate hedge contract as of March 31, 2000 would
increase by approximately $996. If interest rates decrease by 100 basis points,
the fair market value of this interest rate hedge contract as of March 31, 2000
would decrease by approximately $969. In addition, we are exposed to certain
losses in the event of non- performance by the counter party under the hedge
contract. We expect the counter party, which is a major financial institution,
to perform fully under this contract. However, if the counter party were to
default on their obligations under the interest rate hedge contract, we could be
required to pay the full rates on our debt, even if such rates were in excess of
the rates in the contract.
10
<PAGE>
Part II
OTHER INFORMATION
Item 2. Recent Sales of Unregistered Equity Securities
(a) Securities Sold
The following table sets forth the date of sale, title and amount
of unregistered securities sold by the Company since December 31,
1999:
Date of Sale Title Amount
1/1/00 Common Units 36,000
2/1/00 Common Units 26,409
(b) Underwriters and other purchasers
I. January 1, 2000 Sales. Underwriters were not retained in connection with
the sale of these securities. These units were issued to the prior owner of
Willston Centre, an "accredited investor", pursuant to a previously
existing contractual obligation.
II. February 1, 2000 Sales. Underwriters were not retained in connection with
the sale of these securities. These units were issued to the prior owner of
City Avenue Shopping Center, an "accredited investor", pursuant to a
previously existing contractual obligation.
(c) Consideration
I. January 1, 2000 Sales. These units were issued in satisfaction of a
previously existing contractual obligation having a value of approximately
$0.8 million. There were no underwriting discounts or commissions with
respect to such securities. At the closing of the purchase of Willston
Centre in November 1998, 515,084 units were issued in exchange for property
having a value of $13.7 million, net of assumed liabilities.
II. February 1, 2000 Sales. These units were issued in satisfaction of a
previously existing contractual obligation having a value of approximately
$0.5 million. There were no underwriting discounts or commissions with
respect to such securities. At the closing of the purchase of City Avenue
Shopping Center in January 1997, 211,322 units were issued in exchange for
property having a value of $5.4 million, net of assumed liabilities.
Item 4. Submission of matters to a vote of security holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
- -----------------------------------------------------------------------
(b) Reports on Form 8-K.
11
<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.
FIRST WASHINGTON REALTY TRUST, INC.
Date: May 12, 2000 /s/ James G. Blumenthal
---------------------------------
By: James G. Blumenthal
Executive Vice President and
Chief Financial Officer
12
<PAGE>
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<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 7,326
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<PP&E> 616,170
<DEPRECIATION> 71,340
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0
22
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