SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K / A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 2000
AmeriVest Properties Inc.
(Exact name of registrant as specified in its charter)
Maryland 1-14462 84-1240264
-------- ------- ----------
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1800 Glenarm Place, Suite 500, Denver, Colorado 80202
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 297-1800
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Real Estate Properties Acquired:
Report of Independent Public Accountants F-1
Statements of Revenue and Certain Expenses - year ended
December 31, 1999 and six months ended June 30, 2000 (unaudited) F-2
Notes to Statements of Revenue and Certain Expenses F-3
(b) Unaudited Pro Forma Financial Information:
Pro Forma Financial Information F-4
Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2000 F-5
Unaudited Pro Forma Consolidated Statement of Operations:
Six Months ended June 30, 2000 F-6
Year ended December 31, 1999 F-7
Notes to Unaudited Pro Forma Consolidated Financial Statements F-8
(c) Statement of Estimated Taxable Operating Results and Cash to be Made
Available by Operations (unaudited) F-9
Note to Statement of Estimated Taxable Operating Results and
Cash to be Made Available by Operations (unaudited) F-10
<PAGE>
(a) Financial Statements of Real Estate Properties Acquired.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Management of
The Writer Buildings:
We have audited the statement of revenue and certain expenses of the Writer
Buildings (see Note 1) for the year ended December 31, 1999. This financial
statement is the responsibility of the Writer Buildings' management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement 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 statement of revenue and certain expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and is not intended to be a complete presentation of the Writer
Buildings' revenue and expenses and/or financial position.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses of the Writer Buildings
for the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.
/s/ Arthur Andersen LLP
-----------------------
Arthur Andersen LLP
Denver, Colorado,
August 31, 2000.
F-1
<PAGE>
THE WRITER BUILDINGS
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
For the Year For the Six
Ended Months Ended
December 31, June 30,
1999 2000
---- ----
(unaudited)
REVENUE:
Rental revenue (Note 2) $1,451,297 $ 748,796
Other revenue 60,420 31,659
---------- ----------
Total revenue 1,511,717 780,455
---------- ----------
CERTAIN EXPENSES:
Repairs and maintenance 38,367 32,288
Utilities 178,594 98,292
Property taxes 103,115 51,824
Property management fees 80,485 43,111
Operating services 289,997 186,524
---------- ----------
Total certain expenses 690,558 412,039
---------- ----------
EXCESS REVENUE OVER CERTAIN EXPENSES $ 821,159 $ 368,416
========== ==========
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
THE WRITER BUILDINGS
NOTES TO STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
DECEMBER 31, 1999
(1) BASIS OF PRESENTATION
The statements of revenue and certain expenses reflect the operations of the
Writer Buildings (the "Property"). The Property consists of three office
buildings located at 1777, 1780 and 1805 South Bellaire Street in Denver,
Colorado.
The Property was acquired by AmeriVest Properties Inc. and subsidiaries (the
"Company") from an unrelated third party on August 31, 2000. The Property has an
aggregate net rentable area of approximately 140,500 square feet (91% leased as
of December 31, 1999). These statements of revenue and certain expenses are
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission.
The accounting records of the Property are maintained on the accrual basis. The
accompanying financial statements exclude certain expenses such as interest,
depreciation and amortization, professional fees, and other costs not directly
related to the future operations of the Property.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenue and expenses during the reporting period.
The ultimate results could differ from those estimates.
In the opinion of management, the unaudited information as of June 30, 2000
included herein contains all the adjustments necessary, which are of a normal
recurring nature, to present fairly the revenue and certain expenses for the six
months ended June 30, 2000. Results of interim periods are not necessarily
indicative of results to be expected for the year. Management is not aware of
any material factors that would cause the information included herein to not be
indicative of future operating results.
(2) OPERATING LEASES
Rental revenue presented for the year ended December 31, 1999, is recorded in
accordance with generally accepted accounting principles.
The Property is leased to tenants under operating leases with expiration dates
extending to the year 2007. Future minimum rentals under noncancellable
operating leases, excluding tenant reimbursements of operating expenses as of
December 31, 1999, are as follows:
Year ending December 31, -
2000 $1,161,413
2001 780,635
2002 300,202
2003 73,175
2004 18,860
Thereafter 42,435
----------
$2,376,720
==========
F-3
<PAGE>
(b) Pro Forma Financial Information.
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
The accompanying unaudited pro forma consolidated balance sheet presents the
historical financial information of AmeriVest Properties Inc. and Subsidiaries
(AmeriVest) as of June 30, 2000, as adjusted for the sale of the self-storage
facilities and the acquisition of the Writer Buildings, both transactions being
consummated in August 2000.
The accompanying unaudited pro forma consolidated statements of operations for
the six months ended June 30, 2000 and the year ended December 31, 1999 combine
the historical financial information of AmeriVest with the historical real
estate operating revenues and expenses of the Writer Buildings and subtract the
historical real estate operating revenues and expenses of AmeriVest's
self-storage facilities, as if the acquisition and sale had occurred at the
beginning of the periods presented.
The unaudited pro forma consolidated financial statements have been prepared by
AmeriVest management based upon the historical financial statements of AmeriVest
and the Writer Buildings. These pro forma statements may not be indicative of
the results that actually would have occurred if the combination had been in
effect on the dates indicated or which may be obtained in the future. The pro
forma financial statements should be read in conjunction with the historical
financial statements of AmeriVest for the year ended December 31, 1999 included
in AmeriVest's Form 10-KSB filed for the year ended December 31, 1999, and for
the three and six months ended June 30, 2000 included in AmeriVest's Form 10-QSB
for the quarter ended June 30, 2000.
F-4
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
Sale of Acquisition
AmeriVest Self Storage of Writer Pro Forma
(Historical) Facilities Buildings Combined
------------ ---------- --------- --------
<S> <C> <C> <C> <C>
ASSETS
Investment in Real Estate
Land $ 7,098,379 $ (1,720,080) $ 3,464,362(b) $ 8,842,661
Building and improvements 32,575,927 (7,535,242) 6,211,256(b) 31,251,941
Furniture, fixtures and equipment 322,312 (251,837) -- 70,475
Tenant improvements 718,557 (375,447) 35,189(b) 378,299
Less accumulated depreciation
and amortization (7,165,288) 4,487,056 -- (2,678,232)
------------ ------------ ------------ ------------
Net Investment in Real Estate 33,549,887 (5,395,550) 9,710,807 37,865,144
Cash and cash equivalents 491,374 1,818,161 (2,533,389)(a) (223,854)
Tenant accounts receivable 40,153 (31,331) -- 8,822
Straight-line rents receivable 126,279 -- -- 126,279
Deferred financing costs, net 570,615 (220,086) 89,120(b) 439,649
Tenant leasing commissions 460,966 -- 14,211(b) 475,177
Prepaid expenses and other assets 628,530 (67,238) 2,662(b) 563,954
------------ ------------ ------------ ------------
Total Assets $ 35,867,804 $ (3,896,044) $ 7,283,411 $ 39,255,171
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage loans $ 27,790,393 $ (6,309,246) $ 7,120,441(a) $ 28,601,588
Accounts payable and accrued expenses 496,516 53,936 -- 550,452
Accrued interest 144,987 -- -- 144,987
Accrued real estate taxes 509,381 (104,757) 69,099(b) 473,723
Prepaid rents and security deposits 709,691 (92,816) 93,871(b) 710,746
Dividends payable 267,462 -- -- 267,462
------------ ------------ ------------ ------------
Total Liabilities 29,918,430 (6,452,883) 7,283,411 30,748,958
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Common stock 2,229 -- -- 2,229
Capital in excess of par value 8,179,723 -- -- 8,179,723
Distributions in excess of
Accumulated earnings (2,232,578) 2,556,839 -- 324,261
------------ ------------ ------------ ------------
Total Stockholders' Equity 5,949,374 2,556,839 -- 8,506,213
------------ ------------ ------------ ------------
$ 35,867,804 $ (3,896,044) $ 7,283,411 $ 39,255,171
============ ============ ============ ============
See notes to the pro forma consolidated financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
Historical
----------------------------------------
Self Storage Writer Pro Forma Pro Forma
AmeriVest Facilities Buildings Adjustments Combined
--------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
REAL ESTATE OPERATING REVENUE
Rental Revenue
Commercial properties $ 2,713,186 $ (24,887) $ 780,455 $ -- $ 3,468,754
Storage properties 644,327 (644,327) -- -- --
----------- ----------- ----------- ----------- -----------
3,357,513 (669,214) 780,455 -- 3,468,754
----------- ----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property Operating Expenses
Operating expenses 890,698 (137,365) 317,104 -- 1,070,437
Real estate taxes 330,251 (80,888) 51,824 -- 301,187
Management fees 159,967 (33,496) 43,111 (4,088)(e) 165,494
General and administrative 243,549 (15,755) -- -- 227,794
Interest 954,760 (251,647) -- 330,000(d) 1,033,113
Depreciation and amortization 569,657 (186,552) -- 124,220(c) 507,325
----------- ----------- ----------- ----------- -----------
3,148,882 (705,703) 412,039 450,132 3,305,350
----------- ----------- ----------- ----------- -----------
OTHER INCOME
Interest income 16,891 (206) -- -- 16,685
----------- ----------- ----------- ----------- -----------
NET INCOME $ 225,522 $ 36,283 $ 368,416 $ (450,132) $ 180,089
=========== =========== =========== =========== ===========
NET INCOME PER COMMON SHARE $ 0.10 $ 0.08
=========== ===========
NET INCOME PER COMMON SHARE -
ASSUMING DILUTION $ 0.10 $ 0.08
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 2,228,850 2,228,850
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES ASSUMING DILUTION 2,229,830 2,229,830
=========== ===========
See notes to the pro forma consolidated financial statements.
F-6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(Unaudited)
Historical
----------------------------------------
Self Storage Writer Pro Forma Pro Forma
AmeriVest Facilities Buildings Adjustments Combined
--------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
REAL ESTATE OPERATING REVENUE
Rental Revenue
Commercial properties $ 4,561,479 $ (63,217) $ 1,511,717 $ -- $ 6,009,979
Storage properties 1,415,278 (1,415,278) -- -- --
----------- ----------- ----------- ----------- -----------
5,976,757 (1,478,495) 1,511,717 -- 6,009,979
----------- ----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property Operating Expenses
Operating expenses 1,636,305 (282,805) 506,958 -- 1,860,458
Real estate taxes 596,790 (161,776) 103,115 -- 538,129
Management fees 124,111 (73,876) 80,485 (4,899)(e) 125,821
General and administrative 657,349 (34,469) -- -- 622,880
Interest 1,647,225 (505,657) -- 660,000(d) 1,801,568
Depreciation and amortization 1,082,447 (371,858) -- 248,440(c) 959,029
----------- ----------- ----------- ----------- -----------
5,744,227 (1,430,441) 690,558 903,541 5,907,885
----------- ----------- ----------- ----------- -----------
OTHER INCOME
Interest income 15,506 (416) -- -- 15,090
Gain on sale of real estate 720,712 -- -- -- 720,712
----------- ----------- ----------- ----------- -----------
736,218 (416) -- -- 735,802
----------- ----------- ----------- ----------- -----------
NET INCOME $ 968,748 $ (48,470) $ 821,159 $ (903,541) $ 837,896
=========== =========== =========== =========== ===========
NET INCOME PER COMMON SHARE $ 0.51 $ 0.45
=========== ===========
NET INCOME PER COMMON SHARE -
ASSUMING DILUTION $ 0.51 $ 0.45
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 1,881,075 1,881,075
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES ASSUMING DILUTION 1,882,232 1,882,232
=========== ===========
See notes to the pro forma consolidated financial statements.
F-7
</TABLE>
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated financial statements are
presented to reflect the sale of the self-storage facilities and the acquisition
of the Writer Buildings by AmeriVest.
The accompanying pro forma consolidated balance sheet as of June 30, 2000
has been prepared to give effect to the sale of the self-storage facilities and
the acquisition of the Writer Buildings as if each of the sale and acquisition
occurred on June 30, 2000. The accompanying pro forma consolidated statements of
operations combine the historical operations of AmeriVest for the six months
ended June 30, 2000 and the year ended December 31, 1999 with the historical
real estate operating revenues and expenses of the Writer Buildings for the six
months ended June 30, 2000 and the year ended December 31, 1999, respectfully,
minus the historical real estate operating revenues and expenses of the
self-storage facilities for the same periods, and are presented as if the
acquisition had occurred at the beginning of each of the periods presented.
NOTE 2 - PRO FORMA ADJUSTMENTS
The unaudited pro forma consolidated financial statements reflect the
following pro forma adjustments:
a) The purchase price of the Writer Buildings is summarized as follows:
Cash paid $2,533,389
New mortgage loans 7,120,441
----------
Total purchase price $9,653,830
==========
The new mortgage loans bear interest based on LIBOR (assumed 9% for
proforma purposes).
b) The purchase price of the Writer Buildings was allocated to the assets
and liabilities based on estimated fair value.
c) Depreciation expense on the Writer Buildings based on an estimated
useful life of 25 years.
d) Interest expense to be recognized related to mortgage debt procured upon
the acquisition of the Writer Buildings.
e) Adjustment to management fees pursuant to Sheridan Realty Advisors
agreement:
Six Months Ended Year Ended
June 30, 2000 December 31, 1999
------------- -----------------
Elimination of historical management fees $(43,111) $(80,485)
Management fees per Sheridan Realty Advisors
agreement 39,023 75,586
-------- --------
Pro forma adjustment $ (4,088) $ (4,899)
======== ========
NOTE 3 - INCOME PER SHARE
Pro forma income per common share for the months ended June 30, 2000 and
the year ended December 31, 1999 is computed based on the weighted average
number of common shares outstanding during the periods.
F-8
<PAGE>
(c) Statement of Estimated Taxable Operating Results and Cash to be Made
Available by Operations.
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
AND CASH TO BE MADE AVAILABLE BY OPERATIONS
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1999
(Unaudited)
The following represents an estimate of the taxable operating results and
cash to be made available by operations expected to be generated by the Company
(including the operations of the Writer Buildings) based upon the pro forma
consolidated statements of operations for the year ended December 31, 1999.
These estimated results do not purport to represent results of operations for
these properties in the future and were prepared on the basis described in the
accompanying notes which should be read in conjunction herewith.
Revenue $6,009,979
Expenses:
Operating expenses 1,860,458
Real estate taxes 538,129
Management fees 125,821
General and administrative 622,880
Interest 1,801,568
Depreciation and amortization 869,589
----------
Total expenses 5,818,445
----------
Estimated Taxable Operating Gain 191,534
Add back depreciation and amortization 869,589
----------
Estimated Cash to be Made Available by Operations $1,061,123
==========
F-9
<PAGE>
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
NOTE TO STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS
AND CASH TO BE MADE AVAILABLE BY OPERATIONS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
Depreciation has been estimated based upon an allocation of the purchase
price of the Writer Buildings to land (35.8%) and buildings (64.2%) and assuming
(for tax purposes) a 39-year useful life applied on a straight-line method.
No income taxes have been provided because the Company is organized and
operates in such a manner so as to qualify as a Real Estate Investment Trust
("REIT") under the provisions of the Internal Revenue Code (the "Code").
Accordingly, the Company generally will not pay Federal income taxes provided
that distributions to its stockholders equal at least the amount of its REIT
taxable income as defined under the Code.
F-10
<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.
Date: November 10, 2000 AMERIVEST PROPERTIES INC.
By: /s/ D. Scott Ikenberry
--------------------------
D. Scott Ikenberry
Chief Financial Officer
