<PAGE>
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: August 14, 1998
(Date of earliest event reported: June 1, 1998)
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>
EXPLANATORY NOTE:
This amendment to the Form 8-K dated June 15, 1998 is being made
to provide the required financial information under Item 7 and to
report the acquisition of an additional self-storage store
(AllHStar Storage).
ITEM 5: ACQUISITION OF STORES
During the period from March 30, 1998 to June 30, 1998, Storage
Trust Realty (the "Company") completed the acquisition of 16
self-storage stores through Storage Trust Properties L.P. (the
"Operating Partnership"), a limited partnership controlled by the
Company as its sole general partner and in which the Company
holds a 93.24% ownership interest as of June 30, 1998. These
stores, totaling approximately 772,000 net rentable square feet,
are located in two states, and were purchased for approximately
$45,026,000.
All of the stores were acquired in arms-length transactions and,
except as described below, 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.
The Company had a loan agreement with the owner of the acquired
Texan Storage store. The balance funded under a note receivable
at the time of acquisition was $1,575,000. The Company exercised
an option given by Texan Storage to acquire the store during the
term of the loan. The Company had also managed the store,
through Storage Realty Management Corp., from March 1997 through
the date of acquisition.
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
stores, the projected amounts of maintenance costs and capital
improvements, the current revenues of the stores, comparable
stores competing in the applicable markets, rental rates and
occupancy levels for the stores and competing stores, and the
estimated amount of taxes, utility costs, personnel costs, and
other anticipated expenses.
<PAGE>
Each of the stores has been used by the sellers as a self-storage
store prior to their acquisition by the Company, and the Company
intends to continue the use of all of those stores for that
purpose.
These stores were acquired for the combination of cash, the
assumption of mortgages totaling $24,585,000 (which were paid off
immediately after closing), the conversion of a note receivable
(upon exercising an option to purchase) with a balance at the
date of acquisition of $1,575,000 and the issuance of 126,990
units in the Operating Partnership valued at $3,118,000.
The cash for the acquisitions was provided from funds
available under the Company's $150 million revolving line of
credit with BankBoston, N.A., Bank of America, N.A. and
other lenders.
<PAGE>
The following tables provide certain information concerning
the stores acquired:
<TABLE>
<CAPTION>
TABLE I
Date of
Store and Location Seller(s) Acquision
<S> <C> <C>
U-Stor-It U-Stor-It #13
West 47th Street (Brighton Park)
Chicago, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #7
South Main Place (Carol Stream)
Carol Stream, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #19
North Western Street (Carpentersville)
Carpentersville, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #9
East Chicago Avenue (Elgin East)
Elgin, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #10
South Pulaski Road (Ford City)
Chicago, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #1
Gary Avenue (Geneva)
Geneva, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #5
LaSalle Avenue (Naperville)
Naperville, IL L.L.C. March 30, 1998
<PAGE>
<CAPTION>
TABLE I (continued)
Date of
Store and Location Seller(s) Acquisition
<S> <C> <C>
U-Stor-It U-Stor-It #2
Business 30 (Oswego)
Aurora, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #11
North 5th Avenue (River Grove)
River Grove, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #3
East Main Street (St. Charles)
St. Charles, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #4
Old Church Road (Streamwood)
Streamwood, IL L.L.C. March 30, 1998
U-Stor-It U-Stor-It #12
Central Road (Mount Prospect)
Mount Prospect, IL L.L.C. March 30, 1998
A AAA Key Self Storage A AAA Key Self
North Central Expressway Service Storage
Richardson, TX Corp. April 29, 1998
U-Stor-It U-Stor-It #6
Big Timber Road (Elgin)
Elgin, IL L.L.C. May 15, 1998
Texan Storage
FM 528 Russell and
Webster, TX Shannon Walla June 1, 1998
AllHStar Storage
Highway 6 AllHStar
Houston, TX Storage, Inc. June 26, 1998
<PAGE>
<CAPTION>
TABLE II
Net Percentage
Rentable Occupancy[4]
Purchase Square # of at Date of
Store and Location Price Footage Units Acquisition
<S> <C> <C> <C> <C>
U-Stor-It
West 47th Street
Chicago, IL $ 1,755,000 [1] 37,345 282 92%
U-Stor-It
South Main Place
Carol Stream, IL $ 3,877,000 [1] 59,815 627 71%
U-Stor-It
North Western Street
Carpentersville, IL $ 3,122,000 [1] 46,550 461 91%
U-Stor-It
East Chicago Avenue
Elgin, IL $ 2,000,000 [1] 38,585 346 46%
U-Stor-It
South Pulaski Road
Chicago, IL $ 1,359,000 [1] 22,200 323 86%
U-Stor-It
Gary Avenue
Geneva, IL $ 3,414,000 [1] 53,175 502 79%
U-Stor-It
LaSalle Avenue
Naperville, IL $ 5,918,000 [1] 75,678 744 68%
U-Stor-It
Business 30
Aurora, IL $ 2,700,000 [1] 57,565 564 63%
<PAGE>
<CAPTION>
TABLE II (continued)
Net Percentage
Rentable Occupancy[4]
Purchase Square # of at Date of
Store and Location Price Footage Units Acquisition
<S> <C> <C> <C> <C>
U-Stor-It
North 5th Avenue
River Grove, IL $ 3,390,000 [1] 52,675 518 82%
U-Stor-It
East Main Street
St. Charles, IL $ 2,712,000 [1] 45,150 460 86%
U-Stor-It
Old Church Road
Streamwood, IL $ 2,500,000 [1] 41,460 415 92%
U-Stor-It
Central Road
Mount Prospect, IL $ 2,512,000 [1] 42,575 444 0%
A AAA Key Self Storage
North Central Expressway
Richardson, TX $ 1,320,000 [2] 28,600 269 95%
U-Stor-It
Big Timber Road
Elgin, IL $ 3,729,000 [2] 69,761 568 87%
Texan Storage
FM 528
Webster, TX $ 2,173,000 [3] 59,368 521 74%
AllHStar Storage
Highway 6
Houston, TX $ 2,545,000 [2] 41,975 413 80%
Totals or Average $45,026,000 772,477 7,457 74%<PAGE>
</TABLE>
<PAGE>
Notes to TABLE II:
[1] Acquired for cash of $7,556,000, the assumption of $24,585,000
of mortgages (which were paid off immediately after closing)
and the issuance of 126,990 units of the Operating Partnership
valued at $3,118,000.
[2] Acquired for cash.
[3] Acquired for cash and the conversion of a note receivable
(upon exercising an option to purchase) with a balance at the
date of acquisition of $1,575,000.
[4] 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 REPORTED FACILITIES
U-Stor-It:
Report of Independent Auditors
Reported Facilities' Historical Summary of Combined
Gross Revenues and Direct Operating Expenses for the
Year Ended December 31, 1997.
Notes to Historical Summary of Combined Gross Revenues
and Direct Operating Expenses.
A AAA Key Self Storage:
Report of Independent Auditors
Reported Facility's Historical Summaries of Gross
Revenues and Direct Operating Expenses for the Year
Ended December 31, 1997 and the Three Months Ended
March 31, 1998 (Unaudited).
Notes to Historical Summaries of Gross Revenues and
Direct Operating Expenses.
AllHStar Storage:
Report of Independent Auditors
Reported Facility's Historical Summaries of Gross
Revenues and Direct Operating Expenses for the Year
Ended December 31, 1997 and the Three Months Ended
March 31, 1998 (Unaudited).
Notes to Historical Summaries of Gross Revenues and
Direct Operating Expenses.
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS (continued)
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro Forma Combined Statements of Operations for the Year
Ended December 31, 1997 (Unaudited) and the Six Months
Ended June 30, 1998 (Unaudited).
Notes to Pro Forma Combined Financial Statements
(Unaudited).
(c) EXHIBITS
See Index to Exhibits, which is hereby incorporated by
reference herein.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Storage Trust Realty
We have audited the accompanying Historical Summary of Combined
Gross Revenues and Direct Operating Expenses (the "Historical
Summary") for certain self-storage facilities as described in
Note 1 to the Historical Summary (the "Reported Facilities") for
the year ended December 31, 1997. This Historical Summary is the
responsibility of management of the Reported Facilities. Our
responsibility is to express an opinion on this Historical
Summary 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 Summary is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary. An audit
also includes assessing the accounting principles used and the
significant estimates made by management, as well as evaluating
the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the Rules and Regulations of the Securities and
Exchange Commission (for inclusion on Form 8-K of Storage Trust
Realty) as described in Note 2 to the Historical Summary, and is
not intended to be a complete presentation of the Reported
Facilities' revenues and expenses.
In our opinion, such Historical Summary referred to above
presents fairly, in all material respects, the combined gross
revenues and direct operating expenses of the Reported Facilities
for the year ended December 31, 1997, as described in Note 1 to
the Historical Summary, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 23, 1998<PAGE>
STORAGE TRUST REALTY
<PAGE>
REPORTED FACILITIES -- U-STOR-IT
HISTORICAL SUMMARY OF COMBINED GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
Year Ended
December 31,
1997
<S> <C>
Gross revenues:
Rental income $ 3,777
Product sales and other income 16
Total gross revenues 3,793
Direct operating expenses:
Property operations and product sales 682
Real estate taxes 422
Total direct operating expenses 1,104
Gross revenues in excess of
direct operating expenses $ 2,689
The accompanying notes are an integral part of this Historical
Summary.
</TABLE>
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITIES -- U-STOR-IT
NOTES TO HISTORICAL SUMMARY OF COMBINED
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 1. BUSINESS
The Historical Summary of Combined Gross Revenues and Direct
Operating Expenses (the "Historical Summary") includes the
operations of the self-storage facilities (the "Reported
Facilities") which were acquired by Storage Trust Properties,
L.P. (the "Operating Partnership") from unaffiliated parties
during the period from March 30, 1998 to June 30, 1998. The
general partner of the Operating Partnership is Storage Trust
Realty (the "Company"). The Reported Facilities consist of the
following thirteen self-storage facilities:
<TABLE>
<CAPTION>
Facility Location Acquisition Date
<S> <C> <C>
U-Stor-It (Brighton Park) Chicago, IL March 30, 1998
U-Stor-It (Carol Stream) Carol Stream, IL March 30, 1998
U-Stor-It (Carpentersville) Carpentersville, IL March 30, 1998
U-Stor-It (Elgin East) Elgin, IL March 30, 1998
U-Stor-It (Ford City) Chicago, IL March 30, 1998
U-Stor-It (Geneva) Geneva, IL March 30, 1998
U-Stor-It (Naperville) Naperville, IL March 30, 1998
U-Stor-It (Oswego) Aurora, IL March 30, 1998
U-Stor-It (River Grove) River Grove, IL March 30, 1998
U-Stor-It (St. Charles) St. Charles, IL March 30, 1998
U-Stor-It (Streamwood) Streamwood, IL March 30, 1998
U-Stor-It (Mount Prospect) Mount Prospect, IL March 30, 1998
U-Stor-It (Big Timber) Elgin, IL May 15, 1998
</TABLE>
The U-Stor-It facility in Mount Prospect, IL commenced operations
during March 1998. Although the Company closed on the U-Stor-It
(Big Timber) facility in Elgin, IL on May 15, 1998, under the
terms of the purchase contract the Company received the gross
revenues in excess of direct operating expenses for the period
from March 30, 1998 to May 15, 1998.
These Reported Facilities were under common ownership and
management prior to the acquisition by the Operating Partnership.
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITIES -- U-STOR-IT
NOTES TO HISTORICAL SUMMARY OF COMBINED
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Historical Summary has been prepared pursuant to the Rules
and Regulations of the Securities and Exchange Commission for
real estate operations to be acquired. The Historical Summary is
not representative of the actual operations for the period
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 Reported Facilities have been excluded.
Expenses excluded consist of management fees, interest,
depreciation and amortization, professional fees and other
indirect costs not directly related to the future operations of
the Reported Facilities.
Rental income is recognized when due from occupants. Expenses
are recognized on the accrual basis.
Use of Estimates
The preparation of the Historical Summary in conformity with
generally accepted accounting principles requires management to
make certain estimates and assumptions that affect the reported
amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Storage Trust Realty
We have audited the accompanying Historical Summary of Gross
Revenues and Direct Operating Expenses (the "Historical Summary")
for the self-storage facility as described in Note 1 to the
Historical Summary (the "Reported Facility") for the year ended
December 31, 1997. The Historical Summary is the responsibility
of management of the Reported Facility. Our responsibility is to
express an opinion on the Historical Summary 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 Summary is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary. An audit
also includes assessing the basis of accounting used and
significant estimates made by management, as well as evaluating
the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the Rules and Regulations of the Securities and
Exchange Commission (for inclusion on Form 8-K of Storage Trust
Realty) as described in Note 2 to the Historical Summary, and is
not intended to be a complete presentation of the Reported
Facility's revenues and expenses.
In our opinion, such Historical Summary presents fairly, in all
material respects, the gross revenues and direct operating
expenses of the Reported Facility for the year ended December 31,
1997, as described in Note 1 to the Historical Summary, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 24, 1998
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- A AAA KEY SELF STORAGE
HISTORICAL SUMMARY OF GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months
Year Ended Ended
December 31, March 31,
1997 1998
(unaudited)
<S> <C> <C>
Gross revenues:
Rental income $ 253 $ 68
Product sales and other income 32 8
Total gross revenues 285 76
Direct operating expenses:
Property operations and product sales 136 29
Real estate taxes 26 8
Total direct operating expenses 162 37
Gross revenues in excess of direct
operating expenses $ 123 $ 39
</TABLE>
The accompanying notes are an integral part of this Historical
Summary.
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- A AAA KEY SELF STORAGE
NOTES TO HISTORICAL SUMMARY OF
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 1. BUSINESS
The Historical Summary of Gross Revenues and Direct Operating
Expenses (the "Historical Summary") includes the operations of
the self-storage facility (the "Reported Facility") which was
acquired by Storage Trust Properties, L.P. (the "Operating
Partnership") from an unaffiliated party during the period from
March 30, 1998 to June 30, 1998. The general partner of the
Operating Partnership is Storage Trust Realty (the "Company").
The Reported Facility consists of the following:
Facility Location Acquisition Date
A AAA Key Self Storage Richardson, TX April 29, 1998
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Historical Summary has been prepared pursuant to the Rules
and Regulations of the Securities and Exchange Commission for
real estate operations to be acquired. The Historical Summary is
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 Reported Facilities have been excluded.
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- A AAA KEY SELF STORAGE
NOTES TO HISTORICAL SUMMARY OF
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
Expenses excluded consist of management fees, interest,
depreciation and amortization, professional fees and other
indirect costs not directly related to the future operations of
the Reported Facilities.
Rental income is recognized when due from occupants. Expenses
are recognized on the accrual basis.
Use of Estimates
The preparation of the Historical Summary in conformity with
generally accepted accounting principles require management to
make certain estimates and assumptions that affect the reported
amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
NOTE 3. INTERIM PERIOD
The unaudited Historical Summary for the three months ended March
31, 1998 has been prepared in accordance with generally accepted
accounting principles for interim financial information. In the
opinion of management, all adjustments of a normal recurring
nature considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31,
1998 are not necessarily indicative of future operating results.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees of
Storage Trust Realty
We have audited the accompanying Historical Summary of Gross
Revenues and Direct Operating Expenses (the "Historical Summary")
for the self-storage facility as described in Note 1 to the
Historical Summary (the "Reported Facility") for the year ended
December 31, 1997. The Historical Summary is the responsibility
of management of the Reported Facility. Our responsibility is to
express an opinion on the Historical Summary 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 Summary is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the Historical Summary. An audit
also includes assessing the basis of accounting used and
significant estimates made by management, as well as evaluating
the overall presentation of the Historical Summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose
of complying with the Rules and Regulations of the Securities and
Exchange Commission (for inclusion on Form 8-K of Storage Trust
Realty) as described in Note 2 to the Historical Summary, and is
not intended to be a complete presentation of the Reported
Facility's revenues and expenses.
In our opinion, such Historical Summary presents fairly, in all
material respects, the gross revenues and direct operating
expenses of the Reported Facility for the year ended December 31,
1997, as described in Note 1 to the Historical Summary, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 1, 1998
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- ALLHSTAR STORAGE
HISTORICAL SUMMARY OF GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
Three Months
Year Ended Ended
December 31, March 31,
1997 1998
(unaudited)
<S> <C> <C>
Gross revenues:
Rental income $ 266 $ 78
Product sales and other income 12 -
Total gross revenues 278 78
Direct operating expenses:
Property operations and product sales 131 29
Real estate taxes 45 12
Total direct operating expenses 176 41
Gross revenues in excess of direct
operating expenses $ 102 $ 37
</TABLE>
The accompanying notes are an integral part of this Historical
Summary.
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- ALLHSTAR STORAGE
NOTES TO HISTORICAL SUMMARY OF
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 1. BUSINESS
The Historical Summary of Gross Revenues and Direct Operating
Expenses (the "Historical Summary") includes the operations of
the self-storage facility (the "Reported Facility") which was
acquired by Storage Trust Properties, L.P. (the "Operating
Partnership") from an unaffiliated party during the period from
March 30, 1998 to June 30, 1998. The general partner of the
Operating Partnership is Storage Trust Realty (the "Company").
The Reported Facility consists of the following:
Facility Location Acquisition Date
AllHStar Storage Houston, TX June 26, 1998
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Historical Summary has been prepared pursuant to the Rules
and Regulations of the Securities and Exchange Commission for
real estate operations to be acquired. The Historical Summary is
not representative of the actual operations for the period
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 Reported Facilities have been excluded.
<PAGE>
STORAGE TRUST REALTY
REPORTED FACILITY -- ALLHSTAR STORAGE
NOTES TO HISTORICAL SUMMARY OF
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
Expenses excluded consist of management fees, interest,
depreciation and amortization, professional fees and other
indirect costs not directly related to the future operations of
the Reported Facilities.
Rental income is recognized when due from occupants. Expenses
are recognized on the accrual basis.
Use of Estimates
The preparation of the Historical Summary in conformity with
generally accepted accounting principles requires management to
make certain estimates and assumptions that affect the reported
amounts of revenue and expenses during the reporting period.
Actual results could differ from these estimates.
NOTE 3. INTERIM PERIOD
The unaudited Historical Summary for the three months ended March
31, 1998 has been prepared in accordance with generally accepted
accounting principles for interim financial information. In the
opinion of management, all adjustments of a normal recurring
nature considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31,
1998 are not necessarily indicative of future operating results.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited Pro Forma Combined Statements of
Operations for the year ended December 31, 1997 and the six
months ended June 30, 1998 have been prepared to reflect the
acquisition of 16 self-storage facilities during the period from
March 30, 1998 to June 30, 1998 (the "Acquired Facilities") and
the adjustments described in the accompanying notes. The pro
forma combined financial information is based on the historical
financial statements and other financial information in the
Company's Form 10-K for the year ended December 31, 1997, the
1997 Annual Report to Shareholders, and the Form 10-Q for the
three months and six months ended June 30, 1998 and should be
read in conjunction with those financial statements and the notes
thereto.
A Pro Forma Combined Balance Sheet as of June 30, 1998 is not
presented as all of the Acquired Facilities were purchased by
June 30, 1998.
The Pro Forma Combined Statements of Operations were prepared as
if the following events occurred as of January 1, 1997: (a) the
Acquired Facilities were purchased (or the date operations
commenced, whichever was later), (b) the facilities acquired
during 1997 and 1998 (see Notes 2 and 3 in the Notes to Pro Forma
Combined Financial Statements) were purchased, (c) the Company
completed the offering of 2,530,000 Common Shares, which occurred
in October and November 1997, (the "1997 Share Offering"), (d)
the Company completed the offering of 613,811 Common Shares,
which occurred in April, 1998 (the "1998 Share Offering") and (e)
the Company completed the funding of $100 million of unsecured
Senior Notes.
The pro forma combined financial information is not necessarily
indicative of the 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 year ended
December 31, 1997 as compared to the actual results for these
time periods due primarily to the fact that (a) the operations of
six facilities acquired during 1997 were in their initial lease-up period and
(b) the operations of two facilities acquired during 1998 commenced operations
in February 1997 and were in their initial lease-up period.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(amounts in thousands, except per share data) (unaudited)
<TABLE>
<CAPTION>
Storage Storage
Trust Other Trust
Realty 1997 1998 Reported Pro Forma Realty
Historical Acquisitions Acquisitions Facilities Adjustments Pro Forma
(Note 1) (Note 2) (Note 3) (Note 4) (Note 5)
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Rental income $57,859 $ 4,650 $ 6,626 $ 4,296 $ 172 (a) $73,603
Product sales and other 1,144 246 213 60 7 (a) 1,670
Interest income 374 - - - (98)(b)(c) 276
Management income 236 - - - (11)(d) 225
Equity in earnings-JV's 93 - - - - 93
Total revenues 59,706 4,896 6,839 4,356 70 75,867
Expenses:
Property operations 11,932 1,505 2,193 949 164 (a)(e) 16,743
Real estate taxes 5,304 586 407 493 30 (a) 6,820
General and admin. 3,152 - - - - 3,152
Interest 7,646 2,825 3,219 - 2,945 (f) 12,060
31 (g)
(4,606)(h)
Depreciation 9,377 1,002 1,361 - 1,095 (i) 12,835
Amortization 625 - - - 8 (j) 633
Total expenses 38,036 5,918 7,180 1,442 (333) 52,243
Net income before
minority interests 21,670 (1,022) (341) 2,914 403 23,624
Minority interests (1,293) - - - (354)(k) (1,647)
Net income $20,377 $(1,022) $ (341) $ 2,914 $ 49 $21,977
Net income per share:
Basic $ 1.52 $ 1.37
Diluted $ 1.51 $ 1.36
Weighted-average number
of shares outstanding 13,377,641 16,048,603
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(amounts in thousands, except per share data) (unaudited)
<TABLE>
<CAPTION>
Storage Storage
Trust Other Trust
Realty 1998 Reported Pro Forma Realty
Historical Acquisitions Facilities Adjustments Pro Forma
(Note 1) (Note 3) (Note 4) (Note 5)
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $36,007 $ 597 $ 146 $ 1,339 (l)(m)$38,089
Product sales and other 891 39 8 12 (1)(m) 950
Interest income 200 - - (59)(n) 141
Management income 106 - - (8)(o) 98
Equity in earnings-JV's 37 - - - 37
Total revenues 37,241 636 154 1,284 39,315
Expenses: (l)
Property operations 7,714 119 58 291 (m)(p) 8,182
Real estate taxes 3,677 41 20 127 (l)(m) 3,865
General and admin. 1,928 - - - 1,928
Interest 5,346 325 - 698 (q) 6,060
(309)(r)
Depreciation 6,231 131 - 292 (s) 6,654
Amortization 174 - - - 174
Total expenses 25,070 616 78 1,099 26,863
Net income before
minority interests 12,171 20 76 185 12,452
Minority interests (795) - - (65)(t) (860)
Net income $11,376 $ 20 $ 76 $ 120 $11,592
Net income per share:
Basic $ 0.73 $ 0.72
Diluted $ 0.72 $ 0.72
Weighted-average number
of shares outstanding 15,684,130 16,067,338
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. STORAGE TRUST REALTY - HISTORICAL
The statements of operations for year ended December 31, 1997 and
the six months ended June 30, 1998 include the accounts of
Storage Trust Realty (the "Company"), Storage Trust Properties,
L.P. (the "Operating Partnership") and Storage Realty Management
Co.
NOTE 2. 1997 ACQUISITIONS
These amounts reflect the net operations of 38 facilities
acquired and 16 facilities exchanged during the year ended
December 31, 1997 as if they were acquired or exchanged on
January 1, 1997.
NOTE 3. OTHER 1998 ACQUISITIONS
These amounts reflect the net operations of 14 facilities
acquired during the period from January 1, 1998 through February
12, 1998 as if they were acquired on January 1, 1997.
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 4. REPORTED FACILITIES
These amounts include the combined gross revenue and direct
operating expenses for 15 of the 16 Acquired Facilities (the
"Reported Facilities") for the year ended December 31, 1997. The
Historical Summary of Combined Gross Revenue and Direct Operating
Expenses (the "Historical Summary") for the Reported Facilities
are included elsewhere herein.
NOTE 5. PRO FORMA ADJUSTMENTS - COMBINED STATEMENTS OF
OPERATIONS
The pro forma adjustments are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
<S> <C>
Record operations of the other Acquired Facility
not included in the Historical Summary:
Rental income $ 172
Product sales and other income $ 7
Property operations $ 64
Real estate taxes $ 30
(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)
Remove interest income from the note receivable
to the owner of Texan Storage $ (58)
Remove management fee income related to the
Texan Storage facility $ (11)
(e) Record additional property management costs
due to the Acquired Facilities and the
Other 1998 Acquisitions $ 100
</TABLE>
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - COMBINED STATEMENTS OF
OPERATIONS (continued)
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
<S> <C>
(f) Record interest expense on the net funds
disbursed for the acquisition of the Acquired
Facilities ($42,071,000 at 7.0000%) $ 2,945
(g) Record net interest adjustment due to funding
of Senior Notes $ 31
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 $(3,579)
$7,784,000 at 7.25% for 323 days) and the 1998
Share Offering ($14,167,000 at 7.25%). $(1,027)
$(4,606)
Record additional depreciation expense related to
the Acquired Facilities [based on (i) a 40-year
depreciable life and $32,806,000 allocated to
buildings and (ii) a ten-year depreciable life and
$3,394,000 allocated to furniture and equipment] $1,095
(j) Record amortization of deferred costs related
to the issuance of the Senior Notes over the
weighted-average term of the Senior Notes. $ 8
(k) Adjust minority interests based on adjustments
to net income of the Operating Partnership and the
issuance of Common Shares in the 1997 Share
Offering and 1998 Share Offering $ (354)
</TABLE>
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - COMBINED STATEMENTS OF
OPERATIONS (continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998
<S> <C>
(l) Record operations of the other Acquired Facility
not included in the Historical Summary:
Rental income $ 139
Product sales and other income $ 3
Property operations $ 31
Real estate taxes $ 13
(m) Record operations of the Acquired Facilities
prior to their inclusion in the Historical Summary
and prior to their acquisition:
Rental income $ 1,200
Product sales and other income $ 9
Property operations $ 210
Real estate taxes $ 114
Remove interest income from the note receivable
to the owner of Texan Storage $ (59)
Remove management fee income related to the
Texan Storage facility $ (8)
(p) Record costs related to additional property
management costs due to the Acquired Facilities
and Other 1998 Acquisitions $ 50
(q) Record interest expense on the net funds
disbursed for the acquisition of the Acquired
Facilities ($42,071,000 at 7.0000%) $ 698
Record reduction to interest expense from use
of the net proceeds of the 1998 Share
Offering ($14,167,000 at 6.8875% for 114 days) $ (309)
</TABLE>
<PAGE>
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - COMBINED STATEMENTS
OF OPERATIONS (continued)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1998
<S> <C>
(s) Record additional depreciation expense related to
the Acquired Facilities [based on (i) a 40-year
depreciable life and $32,806,000 allocated to
buildings and (ii) a ten-year depreciable life and
$3,394,000 allocated to furniture and equipment] $ 292
(t) Adjust minority interests based on adjustments
to net income of the Operating Partnership and the
issuance of Common Shares in the 1998 Share
Offering $ (65)
</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
August 14, 1998 /s/ Michael G. Burnam
(Date) Michael G. Burnam
Chief Executive Officer
August 14, 1998 /s/ Stephen M. Dulle
(Date) Stephen M. Dulle
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Document Description
23.1 Consent of Ernst & Young LLP
99.1 Press release concerning the acquisition of the twelve
stores, dated April 2, 1998.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Form S-3 No. 333-16219, 333-15765, 333-42043 and Form
S-8 No. 33-92764 and 333-15763) of Storage Trust Realty of our
reports indicated below with respect to the financial statements
indicated below included in this Current Report on Form 8-K/A of
Storage Trust Realty.
Financial Statement Date of Auditors
Report
Historical Summary of Combined Gross Revenues
and Direct Operating Expenses for the year ended
December 31, 1997 of the Reported Facilities
which include U-Stor-It (Brighton Park, Chicago,
IL), U-Stor-It (Carol Stream, IL), U-Stor-It
(Carpentersville, IL), U-Stor-It (Elgin East,
Elgin, IL), U-Stor-It (Ford City, Chicago, IL),
U-Stor-It (Geneva, IL), U-Stor-It (Naperville, IL),
U-Stor-It (Aurora, IL), U-Stor-It (River Grove, IL),
U-Stor-It (St. Charles), U-Stor-It (Streamwood, IL)
and U-Stor-It (Big Timber, Elgin, IL) March 23, 1998
Historical Summary of Gross Revenues and
Direct Operating Expenses for the year
ended December 31,1997 of the Reported
Facility - A AAA Key Self Storage April 24, 1998
Historical Summary of Gross Revenues and Direct
Operating Expenses for the year ended
December 31, 1997 of the Reported Facility -
AllHStar Storage July 1, 1998
ERNST & YOUNG LLP
Chicago, Illinois
August 14, 1998
<PAGE>
Storage Trust Realty For additional information contact
2407 Rangeline Street Steve Dulle, Chief Financial Officer
Columbia, MO 65202 573.499.4799
Press Release
STORAGE TRUST REALTY ANNOUNCES ACQUISITION OF CHICAGO PACKAGE
TOTAL OF 12 STORES FOR $35,259,000
COLUMBIA, Missouri (April 2, 1998) Storage Trust Realty (NYSE:SEA) announces
that on March 31, 1998, the Company completed the acquisition of twelve
self-storage stores in the Chicago, IL area for a combined purchase price of
$35,259,000. The acquired stores currently contain 573,000 net rentable square
feet with approximately eight acres of additional land to expand six of the
stores by 138,000 net rentable square feet. The stores were purchased for a
combination of cash, the assumption of $24,585,000 of mortgages (which were paid
off immediately after closing) and the issuance of 126,990 operating
partnership units. Funds for these acquisitions were obtained from borrowings
on the Company's new $150 million revolving line of credit. With these
acquisitions, the Company has 22 stores in the Chicago area and the Company has
acquired 26 stores during the first three months of 1998 containing 1,425,000
netrentable square feet for a combined purchase price of $88,136,000.
In addition to the twelve stores mentioned above, the Company has signed a
contract to acquire one additional store in the Chicago market from the same
owner containing 70,000 net rentable square feet for a purchase price of
$3,729,000. The Company expects to complete the acquisition by May 15, 1998.
The Company also has an option to acquire an additional six stores (which are
currently under development or construction) in the Chicago market from the
same owner.
Mike Burnam, Chief Executive Officer, commented on the acquisitions: "We are
maintaining our focus and in keeping with our business plan of becoming a "super
regional" operator, we are aggressively acquiring stores in our core markets.
We are now a major player in Chicago and we will be increasing our market
share as we expect to exercise these options over the next 12 to 18 months as
the stores come on-line and start their lease-up period. We will also pursue ot
her acquisition and development opportunities in the Chicago market."
Storage Trust Realty is a fully integrated, self managed and self administered
real estate investment trust headquartered in Columbia, Missouri, engaged in the
management and ownership of 227 self-storage stores located in 16 states
totaling 12.0 million net rentable square feet and 106,000 units.
Additional information on the Company can be obtained at our website at
www.storagetrust.com.
The statements made in this press release that are not
historical facts are forward-looking statements within the
meaning of Sections 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are based on current
expectations, estimates and projections about the industry
and markets that Storage Trust operates, management's
beliefs, and assumptions made by management. Therefore,
actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking
statements.
END OF PRESS RELEASE
