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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES AND EXCHANGE ACT of 1934
Date of Report (Date of Earliest Event Reported) November 7, 1996
INNKEEPERS USA TRUST
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Maryland 0-24568 65-0503831
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) (Identification No.)
</TABLE>
306 Royal Poinciana Way
Palm Beach, Florida 33480
(Address of principal executive offices)
(407) 835-1800
(Registrant's telephone number, including area code)
N/A
(former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Subsidiaries of Innkeepers USA Limited Partnership, a Virginia limited
partnership (collectively with Innkeepers USA Limited Partnership, the
"Partnership"), of which wholly owned subsidiaries of Innkeepers USA Trust (the
"Registrant") serve as general partners, consummated the acquisition of seven
existing Residence Inn by Marriott Hotels (the "DeBoer Hotels") on November 7,
1996. The DeBoer Hotels were purchased from partnerships affiliated with Jack
P. DeBoer for a total purchase price of $108,500,000. The Partnership's
purchase price for the DeBoer Hotels consisted of approximately $38,207,000 in
cash, which was funded from the net proceeds of an 11,500,000 Common Share
follow-on offering by the Registrant ("Offering") completed October 25, 1996,
the assumption of approximately $25,096,000 in indebtedness and the issuance of
approximately $44,697,000 of preferred units of limited partnership interest in
the Partnership ("Preferred Units", each with a deemed value of $11 per
Preferred Unit for a total 4,063,329 Preferred Units) and $500,000 in common
units of limited partnership interest ("Common Units", each with a deemed value
of $11.375 per Common Unit for a total of 43,956 Common Units). Preferred
Units and Common Units are sometimes referred to herein collectively as
"Units".
The 4,107,285 Units issued in connection with the acquisition of the DeBoer
Hotels have redemption rights which enable the holders to redeem their Units in
exchange for Common Shares of the Registrant on a one-for-one basis or, at the
election of the Registrant, for cash. Generally, the redemption rights for
Preferred Units and Common Units issued in connection with the DeBoer Hotels
may not be exercised until November 1998, and October 1997, respectively.
Annual preferred distributions of $1.10 are payable on each Preferred Unit,
which may increase to $1.155 based on increases in distributions payable on the
Registrant's Common Shares. Annual distributions are payable on the Common
Units generally equal to the distributions on Common Shares.
The DeBoer Hotels will be managed by Residence Inn by Marriott, Inc.
("Marriott"), a subsidiary of Marriott International, Inc., pursuant to
separate management agreements between Marriott and an affiliate of JF Hotel,
Inc., which, together with certain of its affiliates (collectively, the
"Lessee"), lease all of the Partnership's hotels. The Lessee is majority owned
by Jeffrey H. Fisher, Chairman of the Board and President of the Registrant.
Marriott received the Common Units issued in connection with the acquisition of
the DeBoer Hotels as a termination fee for the then- existing management
contracts relating to such hotels.
The DeBoer Hotels include a 159-suite Residence Inn hotel in San Mateo,
California; a 231-suite Residence Inn hotel in Oakmead, California; a 247-suite
Residence Inn hotel in Sunnyvale, California; a 156-suite Residence Inn hotel
in Denver (Downtown), Colorado; a 64-suite Residence Inn hotel in Wichita East,
Kansas; a 60-suite Residence Inn hotel in East Lansing, Michigan; and a
96-suite Residence Inn hotel in Grand Rapids, Michigan.
The Lessee leases all of the Partnership's hotels pursuant to percentage leases
which provide for rent equal to the greater of (i) fixed base rent or (ii)
percentage rent based on room revenues of the hotels. The percentage leases
for the DeBoer Hotels have terms of thirteen years.
The annual percentage rent formula for each DeBoer Hotel is as follows:
<TABLE>
<CAPTION>
REVENUE FIRST SECOND
BASE RENT BREAK POINT TIER TIER
--------- ----------- ---- ----
<S> <C> <C> <C> <C>
Residence Inn - $1,427,000 $2,450,000 30% 68%
San Mateo, CA
Residence Inn - 2,154,000 2,450,000 30% 68%
Oakmead, CA
</TABLE>
2
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<TABLE>
<S> <C> <C> <C> <C>
Residence Inn - 2,244,000 2,700,000 30% 68%
Sunnyvale, CA
Residence Inn - 684,000 2,750,000 30% 68%
Denver (Downtown), CO
Residence Inn - 287,000 1,175,000 30% 68%
Wichita East, KS
Residence Inn - 290,000 950,000 30% 68%
East Lansing, MI
Residence Inn - 509,000 1,350,000 30% 68%
Grand Rapids, MI
</TABLE>
The DeBoer Hotels will continue to operate as hotel properties.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(a) Financial Statements of the DeBoer Hotels
The combined balance sheet and statements of operations, partners'
deficit and cash flows of the DeBoer Hotels as of December 31, 1994
and December 30, 1995 and for each of the three fiscal years in the
period ended December 31, 1995 are incorporated by reference as
previously filed in the Registrant's Form S-3 Registration Statement
dated September 27, 1996, Registration No. 333-12809.
(b) Pro Forma Financial Information
Pro Forma financial information (unaudited) as of September 30, 1996
and for the nine months ended September 30, 1996 reflecting all of the
acquisitions made by the Registrant since its inception, including the
acquisitions of the DeBoer hotels, is included as Exhibit 99.1 to this
Form 8-K/A.
(c) Exhibits -
2.1 Contribution Agreement dated September 16, 1996 among Denver
Downtown Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - Denver
(Downtown), Colorado hotel (incorporated by reference from Exhibit 2.1
of the Registrant's Registration Statement on Form S-3, Registration
No. 333-12809).
2.2 Contribution Agreement dated September 16, 1996 among
Sunnyvale Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Oakmead, California hotel [Silicon Valley I] (incorporated by
reference from Exhibit 2.2 of the Registrant's Registration Statement
on Form S-3, Registration No. 333-12809).
2.3 Contribution Agreement dated September 16, 1996 among Kentwood
Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - Grand
Rapids, Michigan hotel (incorporated by reference from Exhibit 2.3 of
the
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Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
2.4 Contribution Agreement dated September 16, 1996 among San
Mateo Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - San
Mateo, California hotel (incorporated by reference from Exhibit 2.4 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
2.5 Contribution Agreement dated September 16, 1996 among Oakmead
Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Sunnyvale, California hotel [Silicon Valley II] (incorporated by
reference from Exhibit 2.5 of the Registrant's Registration Statement
on Form S-3, Registration No. 333-12809).
2.6 Contribution Agreement dated September 16, 1996 among East
Lansing Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - East
Lansing, Michigan hotel (incorporated by reference from Exhibit 2.6 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
2.7 Contribution Agreement dated September 16, 1996 among Wichita
East Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Witchita East, Kansas (incorporated by reference from Exhibit 2.7 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Coopers & Lybrand L.L.P.
99.1 Pro forma Financial Information (unaudited)
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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.
INNKEEPERS USA TRUST
January 21, 1997 /s/ David Bulger
- ---------------- ----------------------------
Date David Bulger
Chief Financial Officer
5
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EXHIBIT INDEX
* 2.1 Contribution Agreement dated September 16, 1996 among Denver
Downtown Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - Denver
(Downtown), Colorado hotel (incorporated by reference from Exhibit 2.1
of the Registrant's Registration Statement on Form S-3, Registration
No. 333-12809).
* 2.2 Contribution Agreement dated September 16, 1996 among
Sunnyvale Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Oakmead, California hotel [Silicon Valley I] (incorporated by
reference from Exhibit 2.2 of the Registrant's Registration Statement
on Form S-3, Registration No. 333-12809).
* 2.3 Contribution Agreement dated September 16, 1996 among Kentwood
Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - Grand
Rapids, Michigan hotel (incorporated by reference from Exhibit 2.3 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
* 2.4 Contribution Agreement dated September 16, 1996 among San
Mateo Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - San
Mateo, California hotel (incorporated by reference from Exhibit 2.4 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
* 2.5 Contribution Agreement dated September 16, 1996 among Oakmead
Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Sunnyvale, California hotel [Silicon Valley II] (incorporated by
reference from Exhibit 2.5 of the Registrant's Registration Statement
on Form S-3, Registration No. 333-12809).
* 2.6 Contribution Agreement dated September 16, 1996 among East
Lansing Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn - East
Lansing, Michigan hotel (incorporated by reference from Exhibit 2.6 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
* 2.7 Contribution Agreement dated September 16, 1996 among Wichita
East Residence Associates, L.P., a Kansas limited partnership, as
Contributor, Innkeepers USA Limited Partnership, a Virginia limited
partnership, as Acquiror, and Innkeepers USA Trust, a Maryland real
estate investment trust, in connection with the Residence Inn -
Witchita East, Kansas (incorporated by reference from Exhibit 2.7 of
the Registrant's Registration Statement on Form S-3, Registration No.
333-12809).
* 23.1 Consent of Coopers & Lybrand L.L.P.
* 23.2 Consent of Coopers & Lybrand L.L.P.
99.1 Pro forma Financial Information (unaudited)
________________
* Previously filed
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EXHIBIT 99.1
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited pro forma condensed consolidated balance sheet is
presented as if the DeBoer Hotels and Atlanta Residence Inn and
Norcross Hotel (the DeBoer Hotels and together with the Atlanta
Residence Inn and Norcross Hotel the "Acquisition Hotels") and the
consummation of the 11,500,000 Common Share Follow-On Offering (the
"Follow On Offering") and the application of the net proceeds of the
Follow-On Offering had occurred on September 30, 1996. Such pro forma
information is based in part upon the consolidated balance sheets of
the Company.
The unaudited pro forma consolidated statement of income of the
Company is presented as if the acquisition of the twenty-two existing
Hotels (the "Current Hotels") and the Acquisition Hotels
(collectively, the "Thirty-Two Hotels") had occurred on January 1,
1996 and the Thirty-Two Hotels had been leased to the Lessee pursuant
to Percentage Leases throughout the periods presented.
The unaudited pro forma condensed consolidated balance sheet and
statement of income of the Company for the periods presented are not
necessarily indicative of what the financial position and results of
operations of the Company would have been assuming such transactions
had been completed as of such dates presented, nor does it purport to
represent the results of operations for future periods.
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PRO FORMA FINANCIAL INFORMATION (UNAUDITED), CONTINUED
Exhibit 99.1 Continued
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(UNAUDITED, AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Investments in hotels properties, at cost . . . . $183,931 $143,951(A) $327,882
Accumulated depreciation . . . . . . . . . . . . . (14,886) (14,886)
-------- -------- ---------
169,045 143,951 312,996
Cash and cash equivalents . . . . . . . . . . . . 5,715 34,251(B) 39,966
Due from Lessee . . . . . . . . . . . . . . . . . 3,523 3,523
Deferred expenses, net . . . . . . . . . . . . . . 2,680 440(C) 3,120
Other assets . . . . . . . . . . . . . . . . . . . 508 508
-------- -------- --------
Total assets . . . . . . . . . . . . . . . . . $181,471 $178,642 $360,113
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Long-term debt . . . . . . . . . . . . . . . . . . $ 84,703 $ 16,002(D) $100,705
Accounts payable and accrued expenses . . . . . . 774 774
Distributions payable . . . . . . . . . . . . . . 2,603 2,603
Minority interest in partnership . . . . . . . . . 6,070 40,220(E) 46,290
-------- -------- --------
Total liabilities . . . . . . . . . . . . . . . 94,150 56,222 150,372
Shareholders' equity:
Common shares . . . . . . . . . . . . . . . . . . 108 115(F) 223
Additional paid in capital . . . . . . . . . . . 90,628 122,305(G) 212,933
Unearned trustees' compensation . . . . . . . . . (149) (149)
Distributions in excess of net earnings . . . . . (3,266) (3,266)
--------- -------- ---------
Total shareholders' equity . . . . . . . . . . 87,321 122,420 209,741
--------- -------- --------
Total liabilities and shareholders' equity . . $ 181,471 $178,642 $360,113
========= ======== ========
</TABLE>
See accompanying notes to pro forma condensed consolidated balance sheet.
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PRO FORMA FINANCIAL INFORMATION (UNAUDITED), CONTINUED
Exhibit 99.1 continued
<TABLE>
<CAPTION>
For the Nine
Months Ended
September 30, 1996
------------------
(A) (B) (C) TOTAL
CURRENT OPERATING OTHER THIRTY-TWO
HOTELS HOTELS HOTELS HOTELS
------ ------ ------ ------
<S> <C> <C> <C> <C>
Operating Data:
Percentage Lease Revenue . . . . . . . . . . . . . $20,000 $10,700 $ 1,800(D) $32,500
Other revenue . . . . . . . . . . . . . . . . . . 450 -- -- 450
------ ------- ------ ------
Total Revenue . . . . . . . . . . . . . . . . . 20,450 10,700 1,800 32,950
------ ------ ------ ------
Depreciation and amortization . . . . . . . . . . 5,400 3,500 1,100 10,000
Ground rent . . . . . . . . . . . . . . . . . . . 300 300
Interest expense . . . . . . . . . . . . . . . . . 4,400 1,600 6,000
Amortization of loan origination fees . . . . . . 600 600
Real estate and personal property taxes
and property insurance . . . . . . . . . . . . . 1,900 900 250 3,050
General and administrative . . . . . . . . . . . . 900 60 20 980
Amortization of unearned Trustees'
compensation . . . . . . . . . . . . . . . . . . 40 -- -- 40
------ ------- ------ ------
Total expenses . . . . . . . . . . . . . . . . . 13,540 6,060 1,370 20,970
------ ------- ------ ------
Income before minority interest . . . . . . . . . $ 6,910 $ 4,640 $ 430 11,980
====== ======= =======
Minority interest in income . . . . . . . . . . . (2,168)
------
Net income . . . . . . . . . . . . . . . . . . . $ 9,812
======
Preferred Unit Distributions . . . . . . . . . 3,352
Net income per common share . . . . . . . . . . . $ .37
======
Weighted average number of common
shares and common share equivalents
(units) outstanding . . . . . . . . . . . . . . 23,200
======
</TABLE>
(A) Twenty-two hotels owned by the Company at September 30, 1996
(B) Seven existing Acquisition Hotels acquired in November 1996 - the DeBoer
Hotels
(C) Three newly-constructed Acquisition Hotels acquired October and November
1996 including the Atlanta Residence Inn and Norcross Hotel.
(D) Includes only Base Rent payable under the Percentage Leases for these
Hotels, which had no significant operating histories. Percentage Rent is,
however, payable under the Percentage Leases for these Hotels in the
future based on actual room revenues.
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PRO FORMA FINANCIAL INFORMATION (UNAUDITED), CONTINUED
Exhibit 99.1 continued
Notes to Pro Forma Condensed Consolidated Balance Sheet
(A) Increase represents the purchase price of the Acquisition
Hotels ($142,300,000) less deposits made on the Acquisition
Hotels ($5,760,000), plus closing costs ($2,411,000) of the
Acquisition Hotels, and renovations of the Acquisition Hotels
($5,000,000).
(B) Represents net proceeds from the Follow-On Offering
($117,100,000) less cash paid for the Acquisition Hotels
($73,315,000), less cash paid for Franchise Fees ($440,000)
and reduction of the Line of Credit ($9,094,000).
(C) Represents the capitalization of Franchise Fees on the
Acquisition Hotels.
(D) Represents assumption of Long-Term Debt ($25,096,000) less
reduction on the line of credit ($9,094,000).
(E) Represents the value assigned to the issuance of units and
preferred units to the sellers of certain Acquisition Hotels
($45,541,549) less the dilution to the minority interest as a
result of the Follow-On Offering ($5,322,000).
(F) Reflects the par value of the Common Shares sold in the
Follow-On Offering.
(G) Net increase reflects the gross proceeds from the Follow-On
Offering ($125,063,000), less estimated underwriting and other
expenses of the Offering ($7,965,000), less the par value of
the common shares issued ($115,000) plus the allocation of
equity from minority interest ($5,322,000).
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