UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(b)
of The Securities Exchange Act of 1934
Date of Report: April 27, 1998
(Date of earliest event reported: December 12, 1997)
STORAGE TRUST REALTY
(Exact name of registrant as specified in its charter)
Maryland 1-13462 43-1689825
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2407 Rangeline Street
Columbia, Missouri 65202
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code:(573)499-4799
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5: ACQUISITION OF FACILITIES
During the period from October 1, 1997 to December 31, 1997, Storage Trust
Realty (the Company) completed the acquisition of six self-storage facilities
through Storage Trust Properties L.P. (the "Operating Partnership"), a
imited partnership controlled by the Company as its sole general partner and
in which the Company holds a 94.74% ownership interest as of December 31,1997.
These facilities, totaling approximately 344,000 net rentable square
feet, are located in two states, and were purchased for approximately
$21,117,000.
All of the facilities were acquired in arms-length transactions and there
are no material relationships between any of the sellers and the Company,
the Operating Partnership, any other affiliate of the Company, any trustee
or officer of the Company or any associate of any trustee or officer of the
Company.
Management of the Company determined the purchase price through arms-length
negotiations, after taking into consideration such factors as the geographic
location of the properties, demographics of the market areas, age and
condition of the facilities, the projected amounts of maintenance costs and
capital improvements, the current revenues of the facilities, comparable
facilities competing in the applicable markets, rental rates and occupancy
levels for the facilities and competing facilities, and the estimated amount
of taxes, utility costs, personnel costs, and other anticipated expenses.
Each of the facilities has been used by the sellers as a self-storage
facility prior to their acquisition by the Company, and the Company intends
to continue the use of all of those facilities for that purpose.
These facilities were acquired for cash.
The cash for these acquisitions was provided from the net proceeds from the
sale of 2,530,000 shares of the Company's Common Stock that occurred in
October and November 1997.
<PAGE>
The following tables provide certain information concerning the facilities
acquired:
TABLE I
<TABLE>
<CAPTION>
Date of
Facility and Location Seller(s) Acquisition
<S> <C> <S>
Storage Solver
Lee Highway Storage Solver II
Centreville, VA Limited Partnership Oct. 23, 1997
Storage Solver
South Sterling Blvd.
Sterling, VA Kafem, Inc. Oct. 23, 1997
Carrollton Self Storage Marsh/Forest Lockers,
Marsh Lane Ltd. and Carrollton
Carrollton, TX Self Storage, L.L.C. Oct. 31, 1997
Forest Central Self Storage
Forest Central Drive Marsh/Forest
Dallas, TX Lockers, Ltd. Oct. 31, 1997
Space Saver
South Cooper Street Space Saver Central
Arlington, TX Joint Venture Nov. 6, 1997
Clear Lake Depot Texas Townhouse &
Highway 3 Condominium Owners
Webster, TX Association, Inc. Dec. 12, 1997
</TABLE>
<PAGE>
TABLE II
<TABLE>
<CAPTION>
Net Percentage
Rentable Occupancy[2]
Purchase Square # of at Date of
Facility and Location Price Footage Units Acquisition
<S> <C> <C> <C> <C>
Storage Solver
Lee Highway
Centreville, VA $ 5,000,000 [1] 52,425 519 78%
Storage Solver
South Sterling Blvd.
Sterling, VA $ 4,100,000 [1] 33,075 364 93%
Carrollton Self Storage
Marsh Lane
Carrollton, TX $ 4,985,000 [1] 81,225 715 76%
Forest Central Self Storage
Forest Central Drive
Dallas, TX $ 3,052,000 [1] 72,125 780 19%
Space Saver
South Cooper Street
Arlington, TX $ 2,213,000 [1] 57,525 467 97%
Clear Lake Depot
Highway 3
Webster, TX $ 1,767,000 [1] 47,655 490 95%
Totals or Average $21,117,000 344,030 3,335 74%
</TABLE>
Notes to TABLE II:
[1] Acquired for cash.
[2] Determined by dividing net rentable square footage occupied by total
net rentable square footage.
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS APPLICABLE TO ACQUIRED FACILITIES
Financial statements applicable to the Acquired Facilities are
included, as these acquisitions do not meet the requirements of
Item 7 (a)(3).
(b) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro Forma Consolidated Statement of Operations for the Year Ended
December 31, 1997 (Unaudited).
Pro Forma Consolidated Statement of Operations for the Year Ended
December 31, 1996 (Unaudited).
Notes to Pro Forma Consolidated Financial Statements (Unaudited).
(c) EXHIBITS
See Index to Exhibits, which is hereby incorporated by reference
herein.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited Pro Forma Consolidated Statements of Operations for
the years ended December 31, 1997 and 1996 have been prepared to reflect the
acquisition of six self-storage facilities during the period from October 1,
1997 to December 31, 1997 (the "Acquired Facilities") and the other adjustments
described in the accompanying notes. The pro forma consolidated financial
information is based on the historical consolidated financial statements and
other financial information in the Company's Form 10-K for the year ended
December 31, 1997 and the 1997 Annual Report to Shareholders, and should be
read in conjunction with those financial statements and the notes thereto.
The Pro Forma Consolidated Statements of Operations were prepared as if
(a) the Acquired Facilities were purchased on January 1, 1996 or the date
operations commenced, whichever was later, (b) other facilities acquired
during 1996 and 1997 (see Notes 3 and 4 in the Notes to Pro Forma Consolidated
Financial Statements) were purchased on January 1, 1996, (c) the Company
completed the offering of 4,140,000 Common Shares, which occurred in July
1996, (the "1996 Share Offering") on January 1, 1996, (d) the Company completed
the offering of 2,530,000 Common Shares which occurred in October and
November 1997,(the"1997 Share Offering") and (e) the Company completed the
funding of $100 million of unsecured Senior Notes on January 1, 1996.
The pro forma consolidated financial information is not necessarily indicative
of the financial position or results of operations which actually would have
occurred if such transactions had been consummated on the dates described,
nor does it purport to represent the Company's future financial position or
results of operations.
Net income per share decreased for the pro forma years ended December 31,
1997 and 1996 as compared to the actual results for these time periods due
primarily to the fact that (a) the operations of five other facilities
acquired during 1997 were in their initial lease-up period, (b) one of the
Acquired Facilities commenced operations in July 1997 and was in its initial
lease-up period and (c) one facility acquired during 1997 was undergoing a
significant expansion that opened in June 1996.
<PAGE>
<TABLE>
STORAGE TRUST REALTY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(amounts in thousands, except per share data)
(unaudited)
<CAPTION>
Storage Storage
Trust Other Trust
Realty 1997 Acquired Pro Forma Realty
Historical Acquisitions Facilities Adjustments Pro Forma
(Note 1) (Note 2) (Note 4) (Note 5)
<C> <C> <C> <C> <C>
Revenues:
Rental income $57,859 $ 2,558 $ 1,980 $ 112 (a) $ 62,509
Management income 236 - - - 236
Equity in earnings of
joint ventures 93 - - - 93
Other income 1,518 75 171 (40)(b) 1,724
Total revenues 59,706 2,633 2,151 72 64,562
Expenses:
Property operations 11,932 754 751 - 13,437
Real estate taxes 5,304 406 180 - 5,890
General and admin. 3,152 - - - 3,152
Interest 7,646 1,636 - 1,189 (c) 6,923
31 (d)
(3,579)(e)
Depreciation 9,377 585 - 417 (f) 10,379
Amortization 625 - - 8 (g) 633
Total expenses 38,036 3,381 931 (1,934) 40,414
Net income before
minority interest 21,670 (748) 1,220 2,006 24,148
Minority interest (1,293) 45 - (51)(i) (1,299)
Net income $20,377 $ (703) $ 1,220 $ 1,955 $22,849
Net income per share:
Basic $ 1.52 $ 1.48
Diluted $ 1.51 $ 1.47
Weighted-average number
of shares outstanding 13,377,64 15,434,792
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
<TABLE>
STORAGE TRUST REALTY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(amounts in thousands, except per share data)
(unaudited)
<CAPTION>
Storage Storage
Trust Trust
Realty 1996 Other 1997 Acquired Pro Forma Realty
Historical Acquisitions Acquisitions Facilities Adjustments Pro Forma
(Note 1) (Note 3) (Note 2) (Note 4) (Note 5)
<C> <C> <C> <C> <C> <C>
Revenues:
Rental
income $42,499 $ 7,623 $ 7,228 $ 2,132 $ - $59,482
Management
income 168 (23) - - - 145
Equity in
earnings of
joint
ventures 100 (30) - - - 70
Other
income 675 35 112 205 - 1,027
Total
revenues 43,442 7,605 7,340 2,337 - 60,724
Expenses:
Property
operations 9,541 1,654 2,170 886 - 14,251
Real estate
taxes 3,710 696 1,102 132 - 5,640
General
and admin 2,549 45 - - - 2,594
Interest 4,190 3,494 4,105 - 1,331 (i) 6,346
535 (j)
(7,309)(k)(l)
Deprec-
iation 6,102 1,109 1,159 - 468 (m) 8,838
Amortiz-
ation 463 - - - 177 (n) 640
Total
expenses 26,555 6,998 8,536 1,018 (4,798) 38,309
Net income before
minority
interest 16,887 607 (1,196) 1,319 4,798 22,415
Minority
interest (1,091) (261) 279 - (165)(o) (1,238)
Net income $15,796 $ 346 $ (917) $ 1,319 $ 4,633 $21,177
Net income per share:
Basic $ 1.46 $ 1.37
Diluted $ 1.46 $ 1.37
Weighted-average
number of shares
outstanding 10,803,871 15,404,932
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. STORAGE TRUST REALTY - HISTORICAL
The consolidated statements of operations for years ended December 31, 1997
and 1996 include the accounts of Storage Trust Realty (the "Company"), Storage
Trust Properties, L.P. (the "Operating Partnership") and Storage Realty
Management Co.
NOTE 2. OTHER 1997 ACQUISITIONS
These amounts reflect the net operations of 32 other facilities acquired and
16 facilities exchanged during the period from January 1, 1997 to September 30,
1997 (date of last Form 8-K filed) as if they were acquired on January 1, 1996.
NOTE 3. 1996 ACQUISITIONS
These amounts reflect the net operations of 46 other facilities acquired and
two facilities exchanged in 1996 as if they were acquired or exchanged on
January 1, 1996.
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 4. ACQUIRTED FACILITIES
These amounts include the combined gross revenue and direct operating expenses
for the six Acquired Facilities for the fiscal period from January 1, 1997 to
the date of acquisition and for the year ended December 31, 1996.
NOTE 5. PRO FORMA ADJUSTMENTS - CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
The pro forma adjustments are as follows:
<CAPTION>
Year Ended
December 31, 1997
<S> <C>
(a) Record amounts that would have been due under a
net operating income guarantee as part of the
acquisition of one of the Acquired Facilities $ 112
(b) Remove interest income from the temporary
investment of excess funds from the
$75,000,000 funded under the Senior Notes
on January 22, 1997. $ (40)
(c) Record interest expense on the net funds
disbursed for the acquisition of the Acquired
Facilities ($18,270,000 at 7.2500% from January 1,
1997 to June 30, 1997 and $21,333,000 at 7.1250%
from July 1, 1997 to the dates of acquisition) $ 1,189
(d) Record net interest adjustment due to funding
of Senior Notes $ 31
</TABLE>
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - CONSOLIDATED STATEMENTS OF OPERATIONS
(continued)
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
<C> <C>
(a) Record reduction to interest expense from use
of the net proceeds of the 1997 Share Offering
($51,896,000 at 7.25% for 294 days and
$7,784,000 at 7.25% for 323 days) $(3,579)
(b) Record additional depreciation expense related to
the Acquired Facilities [based on (i) a 40-year
depreciable life and $15,468,000 allocated to
buildings and (ii) a ten-year depreciable life and
$1,599,000 allocated to furniture and equipment] $ 417
(g) Record amortization of deferred costs related
to the issuance of the Senior Notes over the
weighted-average term of the Senior Notes. $ 8
(h) Adjust minority interest based on adjustments
to net income of the Operating Partnership and the
issuance of Common Shares in the 1997 Share
Offering $ (165)
</TABLE>
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - CONSOLIDATED STATEMENTS OF OPERATIONS
(continued)
<TABLE>
<CAPTION>
Year Ended
December 31, 1996
<S> <C>
(i) Record interest expense on the net funds
disbursed for the acquisition of the Acquired
Facilities ($18,270,000 at 7.2839%), adjusted
for the Acquired Facility that commenced
operations in July 1997 $ 1,331
(j) Record net interest adjustment due to funding
of Senior Notes $ 535
(k) Record reduction in interest expense from use
of net proceeds of the 1996 Share Offering
($78,894,000 at 7.3375% for 183 days and
$10,230,000 at 7.25% for 9 days) $(2,962)
(l) Record reduction in interest expense from use
of net proceeds of the 1997 Share Offering
($59,680,000 at 7.2897% for year) $(4,347)
(m) Record additional depreciation expense related
to the Acquired Facilities [based on (i) a
40-year depreciable life and $13,246,000
allocated to buildings and (ii) a ten-year
depreciable life and $1,370,000 allocated to
furniture, fixtures and equipment], adjusted
for the Acquired Facilities that commenced
operations in July 1997 $ 468
(n) Record amortization of deferred costs related
to the issuance of the Senior Notes over the
weighted-average term of the Senior Notes. $ 177
(o) Adjust minority interest based on adjustments
to net income of the Operating Partnership and
the issuance of Common Shares from the 1997 and
1996 Share Offerings $ (165)
</TABLE>
<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.
STORAGE TRUST REALTY
April 27, 1998 /s/ Michael G. Burnam (Date)
Michael G. Burnam
Chief Executive Officer
April 27, 1998 /s/ Stephen M. Dulle (Date)
Stephen M. Dulle
Chief Financial Officer
