<PAGE> 1
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 30, 1998
(Date of earliest event reported: February 12, 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> 2
ITEM 5: CHANGE IN CHAIRMAN OF BOARD OF TRUSTEES
On February 23, 1998, Gordon Burnam announced that he has stepped down as
Chairman of the Board of Trustees of Storage Trust Realty (the "Company").
Mr. Burnam will stay on the Board of Trustees and will continue to be an
employee of the Company.
The Board of Trustees has appointed Daniel C. Staton as the new Chairman of
the Board of Trustees.
For additional information, refer to the press release shown as Exhibit 99.1.
ITEM 5: ACQUISITION OF FACILITIES
During the period from January 1, 1998 to February 12, 1998, the Company
completed the acquisition of 14 self-storage facilities from four different
sellers or groups of sellers 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 94.74% ownership
interest as of December 31, 1997. These facilities, totaling approximately
852,000 net rentable square feet, are located in four states, and were
purchased for approximately $52,877,000.
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.
<PAGE> 3
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 properties were acquired as follows:
- eleven for cash, and
- three for the combination of cash, the assumption of mortgages
totaling $10,052,000 (which were paid off immediately after
closing) and the issuance of 191,350 units in the Operating
Partnership valued at $4,994,000
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.
2
<PAGE> 4
The following tables provide certain information concerning the facilities
acquired:
<TABLE>
TABLE I
<CAPTION>
Date of
Facility and Location Seller(s) Acquisition
- --------------------- --------- -----------
<S> <C> <C>
A & B Self Storage
Sudley Road A & B
Manassas, VA Developers Jan. 12, 1998
Personal Mini Storage
S.W. 84th Street Sentry Beach
Miami, FL Associates Jan. 30, 1998
Sentry Mini Self Storage
69th Street Sentry Beach
Miami Beach, FL Associates Jan. 30, 1998
Beach Self Storage
Dade Boulevard South Beach
Miami Beach, FL Associates Jan. 30, 1998
A Storage Depot Personal Storage
I-85 Access Road, N.E. Mini Warehouse,
Norcross, GA L.L.C. Febr. 9, 1998
A Storage Depot Space Mart
Old Dixie Highway Mini Warehouse,
Forest Park, GA L.L.C. Febr. 9, 1998
A Storage Depot
Covington Highway Partnership #11,
Decatur, GA L.L.C. Febr. 9, 1998
3
<PAGE> 5
<CAPTION>
TABLE I (continued)
Date of
Facility and Location Seller(s) Acquisition
- --------------------- --------- -----------
<S> <C> <C>
A Storage Depot Maxwell Road
Maxwell Road Mini Warehouse,
Alpharetta, GA L.L.C. Febr. 9, 1998
A Storage Depot
North Main Street Joint Venture #12,
Alpharetta, GA L.L.C. Febr. 9, 1998
A Storage Depot Bolton Road
Bolton Road Mini Warehouse,
Atlanta, GA L.L.C. Febr. 9, 1998
A Storage Depot Riverdale
Georgia Highway 85 Mini Warehouse,
Riverdale, GA L.L.C. Febr. 9, 1998
A Storage Depot North Cobb Parkway
Rutledge Road Mini Warehouse,
Kennesaw, GA L.L.C. Febr. 9, 1998
A Storage Depot GA. 20/Lawrenceville
Buford Drive Mini-Warehouse,
Lawrenceville, GA L.L.C. Febr. 9, 1998
Daniels Self Storage
Simms Street
Golden, CO Yoshie Feaster Febr. 12, 1998
</TABLE>
4
<PAGE> 6
<TABLE>
TABLE II
<CAPTION>
Net Percentage
Rentable Occupancy<F3>
Purchase Square # of at Date of
Facility and Location Price Footage Units Acquisition
--------------------- -------- -------- ----- -------------
<S> <C> <C> <C> <C>
A & B Self Storage
Sudley Road
Manassas, VA $ 2,110,000<F1> 38,981 440 84%
Personal Self Storage
S.W. 84th Street
Miami, FL $ 3,400,000<F2> 52,080 913 69%
Sentry Mini Self Storage
69th Street
Miami Beach, FL $ 6,087,000<F2> 40,339 1,198 89%
Beach Self Storage
Dade Boulevard
Miami Beach, FL $ 5,700,000<F2> 40,332 1,249 83%
A Storage Depot
I-85 Access Road, N.E.
Norcross, GA $ 4,441,000<F1> 76,130 782 93%
A Storage Depot
Old Dixie Highway
Forest Park, GA $ 3,300,000<F1> 79,322 695 88%
A Storage Depot
Covington Highway
Decatur, GA $ 5,200,000<F1> 102,336 932 92%
5
<PAGE> 7
<CAPTION>
TABLE II (continued)
Net Percentage
Rentable Occupancy<F3>
Purchase Square # of at Date of
Facility and Location Price Footage Units Acquisition
--------------------- -------- -------- ----- -------------
<S> <C> <C> <C> <C>
A Storage Depot
Maxwell Road
Alpharetta, GA $ 5,000,000<F1> 77,570 587 90%
A Storage Depot
North Main Street
Alpharetta, GA $ 3,739,000<F1> 64,890 576 91%
A Storage Depot
Bolton Road
Atlanta, GA $ 3,200,000<F1> 50,195 482 93%
A Storage Depot
Georgia Highway 85
Riverdale, GA $ 3,300,000<F1> 64,814 547 86%
A Storage Depot
Rutledge Road
Kennesaw, GA $ 2,200,000<F1> 56,215 429 82%
A Storage Depot
Buford Drive
Lawrenceville, GA $ 2,400,000<F1> 43,550 256 49%
Daniels Self Storage
Simms Street
Golden, CO $ 2,800,000<F1> 65,356 383 92%
----------- ------- ----- --
Totals or Average $52,877,000 852,110 9,469 86%
=========== ======= ===== ==
<FN>
Notes to TABLE II:
<F1> Acquired for cash.
<F2> Acquired for cash of $141,000, the assumption of $10,052,000 of
mortgages (which were paid off immediately after closing) and the
issuance of 191,350 units of the Operating Partnership valued at
$4,994,000.
<F3> Determined by dividing net rentable square footage occupied by total
net rentable square footage.
</TABLE>
6
<PAGE> 8
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS APPLICABLE TO REPORTED FACILITIES
(1) Personal Mini Storage, Sentry Mini Storage and
Beach Self Storage:
* 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.
(2) A Storage Depot:
* 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.
(3) Daniels Self Storage:
* Report of Independent Auditors
* Reported Facility's Historical Summary of Gross Revenues and
Direct Operating Expenses for the Year Ended December 31,
1997.
* Notes to Historical Summary of Gross Revenues and Direct
Operating Expenses.
7
<PAGE> 9
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS (continued)
(b) PRO FORMA COMBINED FINANCIAL INFORMATION
* Pro Forma Combined Balance Sheet as of December 31, 1997
(Unaudited).
* Pro Forma Combined Statement of Operations for the Year
Ended December 31, 1997 (Unaudited).
* Notes to Pro Forma Combined Financial Statements (Unaudited).
(c) EXHIBITS
* See Index to Exhibits, which is hereby incorporated by reference
herein.
8
<PAGE> 10
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 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 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
January 15, 1998
9
<PAGE> 11
STORAGE TRUST REALTY
REPORTED FACILITIES
<TABLE>
HISTORICAL SUMMARY OF COMBINED GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
Gross revenues:
Rental income $1,650
Other income 185
------
Total gross revenues 1,835
------
Direct operating expenses:
Property operations 836
Real estate taxes 115
------
Total direct operating expenses 951
------
Gross revenues in excess of direct
operating expenses $ 884
======
The accompanying notes are an integral part of this Historical Summary.
</TABLE>
10
<PAGE> 12
STORAGE TRUST REALTY
REPORTED FACILITIES
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 January 1, 1998 to February 12, 1998. The
general partner of the Operating Partnership is Storage Trust Realty (the
"Company"). The Reported Facilities consist of the following three
self-storage facilities:
<TABLE>
<CAPTION>
Facility Location Acquisition Date
-------- -------- ----------------
<S> <C> <C>
Personal Mini Storage Miami, FL January 30, 1998
Sentry Mini Self Storage Miami Beach, FL January 30, 1998
Beach Self Storage Miami Beach, FL January 30, 1998
</TABLE>
The Beach Self Storage facility commenced operations during February 1997.
These Reported Facilities were under common management prior to the
acquisition by the Operating Partnership.
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.
11
<PAGE> 13
STORAGE TRUST REALTY
REPORTED FACILITIES
NOTES TO HISTORICAL SUMMARY OF COMBINED
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.
12
<PAGE> 14
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 these
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 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
January 20, 1998
13
<PAGE> 15
STORAGE TRUST REALTY
REPORTED FACILITIES
<TABLE>
HISTORICAL SUMMARY OF COMBINED GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
Gross revenues:
Rental income $4,226
Other income 7
------
Total gross revenues 4,233
------
Direct operating expenses:
Property operations 1,196
Real estate taxes 221
------
Total direct operating expenses 1,417
------
Gross revenues in excess of direct
operating expenses $2,816
======
The accompanying notes are an integral part of this Historical Summary.
</TABLE>
14
<PAGE> 16
STORAGE TRUST REALTY
REPORTED FACILITIES
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 January 1, 1998 to February 12, 1998. The
general partner of the Operating Partnership is Storage Trust Realty (the
"Company"). The Reported Facilities consist of the following nine
self-storage facilities:
<TABLE>
<CAPTION>
Facility Location Acquisition Date
-------- -------- ----------------
<S> <C> <C>
A Storage Depot Norcross, GA February 9, 1998
A Storage Depot Forest Park, GA February 9, 1998
A Storage Depot Decatur, GA February 9, 1998
A Storage Depot Alpharetta, GA February 9, 1998
(Maxwell Road)
A Storage Depot Alpharetta, GA February 9, 1998
(Main Street)
A Storage Depot Atlanta, GA February 9, 1998
A Storage Depot Riverdale, GA February 9, 1998
A Storage Depot Kennesaw, GA February 9, 1998
A Storage Depot Lawrenceville, GA February 9, 1998
</TABLE>
The A Storage Depot facility in Lawrenceville, GA commenced operations during
February 1997. These Reported Facilities were under common management prior
to the acquisition by the Operating Partnership.
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.
15
<PAGE> 17
STORAGE TRUST REALTY
REPORTED FACILITIES
NOTES TO HISTORICAL SUMMARY OF COMBINED
GROSS REVENUES AND DIRECT OPERATING EXPENSES
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basis of Presentation (continued)
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.
16
<PAGE> 18
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 referred to above 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
February 6, 1998
17
<PAGE> 19
STORAGE TRUST REALTY
REPORTED FACILITY
<TABLE>
HISTORICAL SUMMARY OF GROSS
REVENUES AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<CAPTION>
Year Ended
December 31,
1997
------------
<S> <C>
Gross revenues:
Rental income $431
Other income 11
----
Total gross revenues 442
----
Direct operating expenses:
Property operations 119
Real estate taxes 39
----
Total direct operating expenses 158
----
Gross revenues in excess of direct
operating expenses $284
====
The accompanying notes are an integral part of this Historical Summary.
</TABLE>
18
<PAGE> 20
STORAGE TRUST REALTY
REPORTED FACILITY
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
January 1, 1998 to February 12, 1998. The general partner of the Operating
Partnership is Storage Trust Realty (the "Company"). The Reported Facility
consists of the following:
<TABLE>
<CAPTION>
Facility Location Acquisition Date
-------- -------- ----------------
<S> <C> <C>
Daniels Self Storage Golden, CO February 12, 1998
</TABLE>
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.
19
<PAGE> 21
STORAGE TRUST REALTY
REPORTED FACILITY
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.
20
<PAGE> 22
STORAGE TRUST REALTY
PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited Pro Forma Combined Balance Sheet as of December
31, 1997, and unaudited Pro Forma Combined Statement of Operations for
the year ended December 31, 1997 have been prepared to reflect the acquisition
of 14 self-storage facilities during the period from January 1, 1998 to
February 12, 1998 (the "Acquired Facilities") and the adjustments described in
the accompanying notes. The pro forma combined financial information is based
on the historical combined 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 Combined Balance Sheet was prepared as if the Acquired
Facilities were purchased on December 31, 1997.
The Pro Forma Combined Statement of Operations was prepared as if (a) the
Acquired Facilities were purchased on January 1, 1997 or the date operations
commenced, whichever was later, (b) the facilities acquired during 1997 (see
Note 3 in the Notes to Pro Forma Combined Financial Statements) were
purchased on January 1, 1997, (c) the Company completed the offering of
2,530,000 Common Shares, which occurred in October and November 1997, (the
"1997 Share Offering") and (d) the Company completed the funding of $100
million of unsecured Senior Notes on January 1, 1997.
The pro forma combined 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 year ended December 31,
1997 as compared to the actual results for this time period due primarily
to the fact that (a) the operations of six facilities acquired during 1997
were in their initial lease-up period and (b) two of the Acquired Facilities
commenced operations in February 1997 and were in their initial lease-up
period.
21
<PAGE> 23
<TABLE>
STORAGE TRUST REALTY
PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1997
(amounts in thousands)
(unaudited)
<CAPTION>
Storage Storage
Trust Trust
Realty Pro Forma Realty
Historical Adjustments Pro Forma
---------- ----------- ---------
(Note 1) (Note 2)
<S> <C> <C> <C>
ASSETS
Investment in storage
facilities, net $386,574 $53,094 <Fa> $439,668
Cash and cash equivalents 4,909 - 4,909
Accounts receivable, escrow
deposits and other assets 5,201 (2,110)<Fa> 3,091
Notes receivable 2,376 - 2,376
Deferred financing costs, net 951 - 951
Investment in joint ventures 284 - 284
-------- ------- --------
Total assets $400,295 $50,984 $451,279
======== ======= ========
LIABILITIES AND EQUITY
Liabilities:
Mortgage and notes payable:
Revolving line of credit $ - $45,990 <Fa> $ 45,990
Senior Notes 100,000 - 100,000
-------- ------- --------
Total 100,000 45,990 145,990
Accounts payable and
accrued expenses 5,087 - 5,087
Accrued interest payable 3,457 - 3,457
Tenant prepayments 3,242 - 3,242
Dividends and
distributions payable - - -
-------- ------- --------
Total liabilities 111,786 45,990 157,776
Minority interest 15,905 4,994 <Fa> 20,899
Shareholders' equity:
Common shares 155 - 155
Additional paid-in capital 280,324 - 280,324
Distributions in excess of
net income (7,875) - (7,875)
-------- ------- --------
Total shareholder's equity 272,604 - 272,604
-------- ------- --------
Total liabilities and
shareholders' equity $400,295 $50,984 $451,279
======== ======= ========
The accompanying notes are an integral part of these statements.
</TABLE>
22
<PAGE> 24
<TABLE>
STORAGE TRUST REALTY
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(amounts in thousands, except per share data)
(unaudited)
<CAPTION>
Storage Storage
Trust Trust
Realty 1997 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 $ 57,859 $ 4,650 $6,307 $ 319 <Fa> $ 69,135
Management income 236 - - - 236
Equity in earnings of
joint ventures 93 - - - 93
Other income 1,518 246 203 (30)<Fa><Fb> 1,937
----------- ------- ------ ------- -----------
Total revenues 59,706 4,896 6,510 289 71,401
Expenses:
Property operations 11,932 1,505 2,151 92 <Fa><Fc> 15,680
Real estate taxes 5,304 586 375 32 <Fa> 6,297
General and admin. 3,152 - - - 3,152
Interest 7,646 2,825 - 3,219 <Fd> 10,142
31 <Fe>
(3,579)<Ff>
Depreciation 9,377 1,002 - 1,361 <Fg> 11,740
Amortization 625 - - 8 <Fh> 633
----------- ------- ------ ------- -----------
Total expenses 38,036 5,918 2,526 1,164 47,644
----------- ------- ------ ------- -----------
Net income before
minority interest 21,670 (1,022) 3,984 (875) 23,757
Minority interest (1,293) 64 - (49)<Fi> (1,278)
----------- ------- ------ ------- -----------
Net income $ 20,377 $ (958) $3,984 $ (924) $ 22,479
=========== ======= ====== ======= ===========
Net income per share:
Basic $ 1.52 $ 1.46
=========== ===========
Diluted $ 1.51 $ 1.45
=========== ===========
Weighted-average number
of shares outstanding 13,377,641 15,434,792
=========== ===========
The accompanying notes are an integral part of these statements.
</TABLE>
23
<PAGE> 25
STORAGE TRUST REALTY
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(unaudited)
NOTE 1. STORAGE TRUST REALTY - HISTORICAL
The balance sheet as of December 31, 1997 and the statement of operations for
year ended December 31, 1997 include the accounts of Storage Trust Realty (the
"Company"), Storage Trust Properties, L.P. (the "Operating Partnership") and
Storage Realty Management Co.
NOTE 2. PRO FORMA ADJUSTMENTS - COMBINED BALANCE SHEET
Pro forma adjustments are as follows:
(a) Record the acquisition of the Acquired Properties from unrelated
parties for an aggregate purchase price of $52,877,000 and estimated
closing costs of $217,000. The acquisitions were financed through (i)
draws on the Company's revolving line of credit, (ii) the use of an escrow
deposit of $2,110,000, and (iii) the issuance of 191,350 units of the
Operating Partnership valued at $4,994,000.
NOTE 3. 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 on January 1, 1997.
24
<PAGE> 26
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 4. REPORTED FACILITIES
These amounts include the combined gross revenue and direct operating
expenses for 13 of the 14 Acquired Facilities (the "Reported Facilities") for
the year ended December 31, 1997. The Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses (the "Historical Summaries") for the
Reported Facilities are included elsewhere herein.
NOTE 5. PRO FORMA ADJUSTMENTS - CONSOLIDATED STATEMENT OF OPERATIONS
The pro forma adjustments are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
-----------------
<S> <C>
(a) Record operations of the other Acquired Facility
not included in the Historical Summaries:
Rental income $ 319
Other income $ 10
Property operations $ 42
Real estate taxes $ 32
(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 costs related to additional property
management costs due to the Acquired Facilities $ 50
(d) Record interest expense on the net funds
disbursed for the acquisition of the Acquired
Facilities ($45,990,000 at 7.0000%) $3,219
(e) Record net interest adjustment due to funding
of Senior Notes $ 31
</TABLE>
25
<PAGE> 27
STORAGE TRUST REALTY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 5. PRO FORMA ADJUSTMENTS - CONSOLIDATED STATEMENT OF OPERATIONS
(continued)
<TABLE>
<CAPTION>
Year Ended
December 31, 1997
-----------------
<S> <C>
(f) 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)
(g) Record additional depreciation expense related to
the Acquired Facilities [based on (i) a 40-year
depreciable life and $38,493,000 allocated to
buildings and (ii) a ten-year depreciable life and
$3,982,000 allocated to furniture and equipment] $ 1,361
(h) Record amortization of deferred costs related
to the issuance of the Senior Notes over the
weighted-average term of the Senior Notes. $ 8
(i) Adjust minority interest based on adjustments
to net income of the Operating Partnership and the
issuance of Common Shares in the 1997 Share
Offering $ (49)
</TABLE>
26
<PAGE> 28
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 30, 1998 /s/ Michael G. Burnam
- -------------- --------------------------
(Date) Michael G. Burnam
Chief Executive Officer
April 30, 1998 /s/ Stephen M. Dulle
- -------------- --------------------------
(Date) Stephen M. Dulle
Chief Financial Officer
27
<PAGE> 29
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit
Number Document Description
- ------- --------------------
<C> <S>
23.1 Consent of Ernst & Young LLP
99.1 Press Release concerning the change in Chairman of the Board of
Directors, dated February 23, 1998
99.2 Press Release concerning acquisitions to date during 1998, dated
March 2, 1998
</TABLE>
28
<PAGE> 1
Exhibit 23.1
- ------------
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 of Storage Trust Realty on Form 8-K.
<TABLE>
<CAPTION>
Financial Statements Date of Auditors' Report
-------------------- ------------------------
<S> <C>
Historical Summary of Combined Gross Revenues and Direct
Operating Expenses for the year ended December 31, January 15, 1998
1997 of the Report Facilities which include Personal
Mini Storage, Sentry Mini Self Storage and Beach
Self Storage
Historical Summary of Combined Gross Revenues and
Direct Operating Expenses for the year ended January 20, 1998
December 31, 1997 of the Reported Facilities
which include A Storage Depot (Norcross, GA), A
Storage Depot (Forest Park, GA), A Storage Depot
(Decatur, GA), A Storage Depot (Maxwell Road,
Alpharetta, GA), A Storage Depot (Atlanta, GA),
A Storage Depot (Riverdale, GA), A Storage Depot
(Kennesaw, GA), A Storage Depot (Main Street,
Alpharetta, GA), and A Storage Depot
(Lawrenceville, GA)
Historical Summary of Gross Revenues and Direct
Operating Expenses for the year ended December February 6, 1998
31, 1997 of the Reported Facility - Daniels Self
Storage
</TABLE>
Chicago, Illinois
April 29, 1998
<PAGE> 1
Exhibit 99.1
- ------------
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 APPOINTS DANIEL C. STATON
----------------------------------------------
AS NEW CHAIRMAN OF THE BOARD OF TRUSTEES
----------------------------------------
COLUMBIA, Missouri (February 23, 1998) Effective today, Gordon Burnam,
founder and Chairman of the Board of Trustees of Storage Trust Realty
(NYSE:SEA), announced that he has stepped down as Chairman. Mr. Burnam was
one of the pioneers in the self-storage industry, building one of the first
self-storage properties in the Midwest in 1974. He founded the predecessor
company, Burnam Holding Companies, in 1987 as a vehicle for the development
and ownership of self-storage properties throughout the Midwest and Southeast
United States. He continued as Chairman of Storage Trust through its IPO and
growth from 78 properties and $108 million market capitalization in 1994 to
its present capitalization of over one half billion dollars and 215
properties. Mr. Burnam will stay on the Board of Trustees and will continue
to be an integral part of the future of the Company.
The Board of Trustees of Storage Trust has appointed Daniel C. Staton as
Chairman of the Board of Trustees. Mr. Staton was one of the forces behind
the growth of Duke Realty Investments, Inc. and served as its Chief Operating
Officer until 1997. Mr. Staton is currently President of Walnut Capital
Partners, a venture capital fund headquartered in Cincinnati, OH. Mr. Staton
is a major shareholder and continues as a member of the board of Duke Realty.
Mike Burnam, Chief Executive Officer of Storage Trust commented, "I cannot
thank my father enough for giving us the opportunity to grow this Company.
He will continue to work for the Company in his current capacity, advising us
on store operations and, especially, in the areas of new developments and
construction projects. Make no mistake, we could not have accomplished as
much or come so far without his constant attention, direction and caring."
Mike Burnam further commented on the new Chairman, "We are also very
fortunate to have had Dan's expertise on the board since IPO and welcome his
additional guidance to assist us in moving our Company to the next level.
His Duke Realty background has been a roadmap for our business plan of
becoming a "super regional" operator in the self-storage industry. His
direction and vision will simply make us a better company."
Dan Staton remarked, "The Company is ready to move into the elite ranks of
profitability and growth. By building upon the solid foundation that exists
and implementing an aggressive marketing development program, we will
generate the total return our shareholders deserve. I am looking forward to
working more closely with the management and Board of Trustees of Storage
Trust Realty."
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 215 self-storage
facilities located in 16 states totaling 11.4 million net rentable square
feet and 100,000 units.
Additional information on the Company can be obtained at our website at
http://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
<PAGE> 1
Exhibit 99.2
- ------------
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 ACQUISITIONS TO DATE FOR Q1 1998
---------------------------------------------------------------
TOTAL OF 14 STORES FOR $52,877,000
----------------------------------
COLUMBIA, Missouri (March 2, 1998) Storage Trust Realty (NYSE:SEA) announces
the acquisition of 14 self-storage stores to date during the first quarter of
1998 for a combined purchase price of $52,877,000. These acquisitions
comprised approximately 852,000 net rentable square feet and 9,500 units.
The stores were purchased for a combination of cash, the assumption of
$10,052,000 of mortgages (which were paid off immediately after closing) and
the issuance of 191,350 operating partnership units. Funds for these
acquisitions were obtained from borrowings on the Company's new $150 million
revolving line of credit.
These acquisitions are located in the following areas:
<TABLE>
<CAPTION>
Number of Company
Number of Net Rentable Stores in Area
Areas Stores Square Footage After Acquisition
----- --------- -------------- -----------------
<S> <C> <C> <C>
Atlanta, Georgia 9 615,022 23
South Florida 3 132,751 10
Suburban Washington, DC 1 38,981 3
Front Range Colorado 1 65,356 10
-- -------
14 852,110
== =======
</TABLE>
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. These new stores add to our critical mass in these core markets.
We see favorable long-term prospects in these markets with each of them
ranking in the top 25% of all MSA's for job and population growth. We are
now a major player in Atlanta with 23 stores and we will be increasing our
market share in the other core markets in the future. We will strive to
continue to be the "buyer of preference" in our core markets."
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 215 self-storage stores
located in 16 states totaling 11.4 million net rentable square feet and
100,000 units.
Additional information on the Company can be obtained at our website at
http://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.
<PAGE> 2
The following table provides information on the number of Company stores as
of February 26, 1998:
<TABLE>
<CAPTION>
Owned at 1996 1996 1997 1997 1998 Owned at
12/31/95 Acquisitions Exchanges Acquisitions Exchanges Acquisitions 2/26/98
-------- ------------ --------- ------------ --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Core Markets:
Atlanta, GA 10 3 - 1 - 9 23
Dallas/Ft. Worth, TX 8 3 - 5 2 - 18
Houston, TX 8 2 - 4 1 - 15
Kansas City, KS/MO 3 7 - 1 - - 11
Chicago, IL 4 1 - 2 3 - 10
South Florida 3 - - 4 - 3 10
Front Range Colorado 5 3 - 1 - 1 10
St. Louis, MO 6 3 - 1 - - 10
Columbia, SC 7 1 - - 1 - 9
Nashville, TN 4 2 - 2 - - 8
Greenville, SC 6 1 - - - - 7
Jacksonville, FL 3 1 1 1 - - 6
Charleston, SC 5 - - - 1 - 6
Mobile, AL 3 1 - 1 - - 5
Orlando, FL 2 2 - 1 - - 5
Charlotte, NC 5 - - - - - 5
Raleigh/Durham, NC 2 1 - - 1 - 4
Washington, DC - - - 2 - 1 3
Tampa Bay, FL 1 2 - - - - 3
Milwaukee, WI - 2 - - - - 2
New Orleans, LA - - - - 1 - 1
--- -- -- -- --- -- ---
Total Core Markets 85 35 1 26 10 14 171
Non Core Markets:
Columbia, MO 4 - - - - - 4
Chattanooga, TN 3 - - - - - 3
Louisville, KY - 3 - - - - 3
Lexington, KY 1 1 - - - - 2
Hilton Head, SC 2 - - - - - 2
Augusta, GA 2 - - - - - 2
Pensacola, FL 2 - - - - - 2
Columbus, OH - 1 - 1 - - 2
Memphis, TN 5 2 - - (7) - -
Gulfport, MS 3 - - - (3) - -
Knoxville, TN 2 - - - (2) - -
Oklahoma 2 1 (2) - (1) - -
Other Stores 10 2 - 1 (3) - 10
Total Non Core 36 10 (2) 2 (16) - 30
--- -- -- -- --- -- ---
Company Total 121 45 (1) 28 (6) 14 201
=== == == == === == ===
END OF PRESS RELEASE
</TABLE>
