SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported): November 20, 1998
WELLINGTON PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 33-82888C 39-6594066
(State or jurisdiction (Commission File Number) (IRS Employer
of Incorporation or (Classification Code Number) Identification Number)
Organization)
18650 W. Corporate Drive, Suite 300, PO Box 0919, Brookfield, Wisconsin
53008-0919
(Address of principal executive offices)
Registrant's telephone number, including area code: (414) 792-8900
<PAGE>
ITEM 2. Acquisition or Disposition of Assets.
On November 20, 1998 Wellington Properties Trust, a Maryland real estate
investment trust (the "Company"), through Wellington Properties Investments,
L.P., a Delaware limited partnerhsip (the "Operating Partnership") of which
the Company is the sole general partner, acquired two office properties and
one industrial property in the Minneapolis/St. Paul metropolitan area, as
described below. The combined purchase price of such properties totaled
approximately $30.8 million, excluding closing costs. Such purchase price
was funded through the issuance of an aggregate of 1,615,394 limited
partnership units ("Units") in the Operating Partnership (valued at $8.50
per Unit, or an aggregate value of approxiamtely $13.7 million) and the
assumption of certain third-party indebtedness of approximately $17.1 million
secured by such properties. The Units are exchangeable, under certain
circumstances, on a one-for-one basis for common shares of beneficial
interest, $.01 par value per share from and after the one-year anniversary of
the date of issuance, in the Company ("Common Shares"). The Operating
Partnership will operate these properties as rental property. The properties
acquired are as follows:
<TABLE>
<CAPTION>
Property Location Rentable Square Feet Tenants Leasing 10%
(office)/Gross or More of Rentable
Leaseable Area (industrial) Square Footage as
of November 30, 1998
and Lease Expiration
Date
<S> <C> <C>
Cold Springs Office Center 77,533 Cold Spring Granite
St. Cloud, MN (55%)-4/02; Central
MN ECSU (14%) -
9/02; First American
Bank (17%) - 4/05
Thresher Square East/West 119,272 BRW, Inc. (48%)-7/01;
Minneapolis, MN Search Institute (16%)
8/02
Nicollet Business VI 50,291 Wakata Design Systems
Burnsville, MN (19%)-3/02; Quickdraw
Design, Inc. (30%)-
8/02; Xata Corporation
(41%) - 6/04
</TABLE>
<PAGE>
The Cold Springs Office Center is owned by CSC of Minnesota, LLC, a Delaware
limited liability company ("CSC"). All of the outstanding membership
interests in CSC were owned by American Real Estate Equities, LLC ("AREE"),
a Delaware limited liability company. AREE is owned in equal thirds by WLPT
Funding, LLC, a Delaware limited liability company ("WLPT Funding"), Lambert
Equities II, LLC, also a Delaware limited liability company ("Lambert
Equities"), and Steven B. Hoyt, a Trustee of the Company. Duane H. Lund, the
Chief Executive Officer of the Company, owns 90% of WLPT Funding and is its
sole manager, while the remaining 10% of WLPT Funding is owned by an
unrelated third party. Paul T. Lambert, a Trustee of the Company, owns
approximately 92% of Lambert Equities.
The beneficial ownership of Cold Springs Office Center was transferred to the
Operating Partnership through the assignment by AREE of 100% of the
membership interests in CSC. The other two properties were acquired from
entities primarily owned and controlled by Mr. Hoyt. As a result of the three
acquisitions described in this Form 8-K, 129,413 Units were issued to AREE,
305,313 Units were issued to WLPT Funding, 305,313 Units were issued to Lambert
Equities and 782,683 Units were issued to Mr. Hoyt and his wife. Each of AREE,
WLPT Funding, Lambert Equities and Mr. Hoyt have agreed not to transfer any of
these Units for the two-year period after the date of issuance.
ITEM 5. Other Events
On August 31, 1998, the Company entered into a certain Amended and Restated
Master Contribution Agreement by and among the Company, the Operating
Partnership, AREE and certain other Unit recipients reflected on the signature
page thereto (as amended, the "Master Contribution Agreement"). In connection
therewith, the Company held a special meeting of Shareholders on November 16,
1998, at which the Shareholders approved, among other things, the transactions
contemplated by the Master Contribution Agreement. Also, effective
November 16, 1998, the Company expanded its Board of Trustees from five to
seven members. The shareholders of the Company elected Paul T. Lambert and
Steven B. Hoyt to fill these two newly created positions, with terms expiring
in 2001 and 2000, respectively. Also in connection with the Master
Contribution Agreement, Duane H. Lund was elected Chief Executive Officer
of the Company and Robert F. Rice was elected President. Arnold K. Leas,
formerly the President of the Company, remains as the Chairman of the Board of
Trustees of the Company.
As contemplated by the Master Contribution Agreement, the Company issued to
AREE 105,263 Common Shares in exchange for $1,000,000. Furthermore, the
Company issued warrants to acquire up to 500,000 Common Shares to each of AREE
and Wellington Management Corporation, a Wisconsin corporation ("WMC"). The
Warrants will become exercisable one year after the date of issuance (November
16, 1999) and will be exercisable for a nine-year period thereafter, at an
exercise price of $8.50 per Common Share with respect to 250,000,000 Warrants
held by each of AREE and WMC, $10.25 per Common Share with respect to 125,000
Warrants held by each of AREE and WMC, $12.25 per Common Share with respect
to 75,000 Warrants held by each of AREE and WMC and $14.75 per Common Share
with respect to 50,000 Warrants held by each of AREE and WMC. Arnold K. Leas,
the Chairman of the Board of Trustees of the Company, is the President and
Chief Executive Officer of WMC and owns, together with members of his immediate
family and trusts for the benefit of such persons, approximately 41.8% of the
outstanding capital stock of WMC.
Also as contemplated by the Master Contribution Agreement and a certain
Contribution Agreement dated August 31, 1998 by and between the Operating
Partnership and WMC (the "WMC Contribution Agreement") (which WMC Contribution
Agreement was also approved by the shareholders of the Company at the November
16, 1998 Special Meeting of Shareholders), the Company and WMC mutually
terminated certain existing advisory fee arrangements between the Company
and WMC and the Company paid to WMC $320,000 as partial consideration therefor.
<PAGE>
ITEM 7. Financial Statements and Exhibits
(a) and (b) Financial Statements:
The required financial statements and pro forma financial information will
be filed in an amendment to this report on Form 8-K as soon as possible, but
no later than (60) days from the date on which this report on Form 8-K is
required to be filed.
(c) Exhibits:
Exhibit 2.1. Amended and Restated Contribution Agreement between Wellington
Properties Trust, Wellington Properties Investments, L.P., American Real
Estate Equities, LLC and the other LP Unit Recipients reflected on the
signature page hereto dated as of August 31, 1998 (incorporated by reference
to Exhibit A of Wellington Properties Trust Schedule 14A filed November 6,
1998).
Exhibit 10.1. Agreement of Limited Partnership of Wellington Properties
Investments, L.P. dated as of August 31, 1998 (incorporated by reference to
Exhibit C of Wellington Properties Trust Schedule 14A filed November 6, 1998).
Exhibit 10.2. Contribution Agreement between Wellington Properties Investments,
L.P. and Wellington Management Corporation dated as of August 31, 1998
(incorporated by reference to Exhibit B of Wellington Properties Trust Schedule
14A filed November 6, 1998).
Exhibit 10.3. Master Registration Rights Agreement dated as of August 31, 1998
(incorporated by reference to Exhibit E of Exhibit C of Wellington Properties
Trust Schedule 14A filed November 6, 1998).
Exhibit 10.4. Form of Warrant (incorporated by reference to Exhibit D of
Wellington Properties Trust Schedule 14A filed November 6, 1998).
<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 hereunto duly authorized.
WELLINGTON PROPERTIES TRUST,
a Maryland Real Estate Investment Trust
(Registrant)
Dated: December 4, 1998 By: /s/Robert F. Rice
Name: Robert F. Rice
Title: President
