SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) July 15, 1996
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GLENBOROUGH REALTY TRUST INCORPORATED
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(Exact name of registrant as specified in its charter)
Maryland 0-14162 94-3211970
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(State or other (Commission (IRS Employer
jurisdiction of File Number) I.D. Number)
incorporation)
400 South El Camino Real, Ste. 1100, San Mateo, California 94402
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(Address of principal executive offices)
Registrant's Telephone number, including area code:(415) 343-9300
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N/A
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(Former name or former address, if changes since last report)
This form 8-K contains a total of 8 pages.
Page 1 of 8
Item 2. Acquisition or Disposition of Asset
On July 15, 1996, the Company's Operating Partnership acquired a
23-story, 272,443 square foot office building known as University
Club Tower (the "UCT Property"), for total consideration valued
at $18,600,000, which comprised (i) assumption of debt in the
amount of $18,250,000, which was paid off with proceeds of the
Company's new line of credit from Wells Fargo Bank, N.A.
(discussed below), and (ii) 23,333 new limited partnership units
("Units") issued by the Operating Partnership having an initial
redemption value of $350,000 (based on a $15 per Unit value).
The transaction was structured as a contribution of partnership
interests in University Club Tower Associates to the Operating
Partnership, by Robert Batinovich (Chairman, President and Chief
Executive Officer of the Company) and by GPA, Ltd., a partnership
in which certain executive officers of the Company hold a
substantial indirect interest, in exchange for the Units.
Item 5. Other Events
The Company has entered into two new financing agreements with
Wells Fargo Bank, N.A. ("Wells Fargo"). The first financing
agreement (the "Facility") is a $50,000,000 secured revolving
line of credit to replace an existing $10,000,000 line of credit.
The Facility is secured by first mortgages on selected properties
with full recourse to the Company and availability is limited to
the borrowing base provided by these properties. The Facility
has a term of two years, subject to annual extensions. At the
Company's option, the Facility will bear interest at LIBOR plus
2.375% or at a base rate. The base rate is based upon the higher
of Wells Fargo's prime rate plus 0.5% or the Federal Funds Rate
plus 1.0%. The second financing arrangement (the "Term Loan") is
a two-year term loan in the amount of $6,100,000 that bears
interest at the same rate as the Facility and will be secured by
first mortgage liens on 10 "QuikTrip" facilities owned by the
Company. The combined proceeds of the fundings under the
Facility and the Term Loan loans were $28,400,000, of which the
Company applied $18,300,000 million to the acquisition of the UCT
Property, $9,200,000 to the repayment of the outstanding amount
under the existing line of credit, and the balance to loan fees
and closing costs. Initial funding under the Facility and full
disbursement of the Term Loan occurred on July 15, 1996.
Page 2 of 8
GLENBOROUGH REALTY TRUST INCORPORATED
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) FINANCIAL STATEMENTS
At this time it is impracticable for the Company to
provide the Pro Forma Financial Statements required by
this item. The required Pro Forma Financial
Statements will be filed with the Securities and
Exchange Commission by an amendment to this Form 8-K
not later than 45 days after the date on which this
Current Report on Form 8-K is filed herewith.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANT 4
Statement of Revenues and certain expenses
of University Club Tower for the three months
ended March 31, 1996 and for the years ended
December 31, 1995, 1994 and 1993, and notes
thereto 5
(c) EXHIBITS
Purchase agreement and escrow statements
related to the purchase of University
Club Tower (*)
Financing agreements with Wells Fargo Bank
related to the $50,000,000 secured
revolving line of credit and the
$6,120,000 2-year secured term loan (*)
(*) To be filed with amendment to this Form 8-K not later than
45 days after the date on which this Current Report on Form
8-K is filed herewith.
Page 3 of 8
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Glenborough Realty Trust Incorporated:
We have audited the accompanying statements of revenues and
certain expenses of University Club Tower, as defined in Note 1,
for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the management of
the company. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
The accompanying statements of revenues and certain expenses were
prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and are not
intended to be a complete presentation of the revenues and
expenses of University Club Tower.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the revenues and
certain expenses of University Club Tower for the years ended
December 31, 1995, 1994 and 1993, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
July 9, 1996
Page 4 of 8
GLENBOROUGH REALTY TRUST INCORPORATED
STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
UNIVERSITY CLUB TOWER
For The Three Months Ended March 31, 1996 (Unaudited)
And The Years Ended December 31, 1995, 1994 and 1993
(in thousands)
Year Ended
Three Months December 31,
Ended March 31, ----------------------
1996 1995 1994 1993
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(Unaudited)
REVENUES $ 1,092 $ 4,239 $ 4,073 $ 4,024
CERTAIN EXPENSES:
Operating 358 1,579 1,474 1,435
Real estate
taxes 130 463 475 453
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488 2,042 1,949 1,888
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RENTAL REVENUES IN
EXCESS OF CERTAIN
EXPENSES $ 604 $ 2,197 $ 2,124 $ 2,136
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The accompanying notes are an integral part of these statements.
Page 5 of 8
GLENBOROUGH REALTY TRUST INCORPORATED
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
UNIVERSITY CLUB TOWER
For The Three Months Ended March 31, 1996 (Unaudited)
And The Years Ended December 31, 1995, 1994 and 1993
(in thousands)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Property Acquired - The accompanying statements of revenues
and certain expenses include the operations (see "Basis of
Presentation" below) of University Club Tower (the "Property")
a property acquired by Glenborough Realty Trust Incorporated
(the "Company"), from University Club Tower Associates, an
affiliate of the Company.
Basis of Presentation - The accompanying statements of
revenues and certain expenses are not representative of the
actual operations of the Property for the periods presented.
Certain expenses may not be comparable to the expenses
expected to be incurred by the Company in the proposed future
operations of the Property; however, the Company is not aware
of any material factors relating to the acquired Property that
would cause the reported financial information not to be
indicative of future operating results. Excluded expenses
consist of property management fees, interest expense,
depreciation and amortization and other costs not directly
related to the future operations of the Property.
These financial statements have been prepared for the purpose
of complying with certain rules and regulations of the
Securities and Exchange Commission.
The financial information presented for the three months ended
March 31, 1996 is not audited. In the opinion of management,
the unaudited financial information contains all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation of the statements of revenues and certain
expenses for the Property.
Revenue Recognition - All leases are classified as operating
leases, and rental revenue is recognized on a straight-line
basis over the terms of the leases.
Page 6 of 8
2. LEASING ACTIVITY
The minimum future rental revenues from leases in effect as of
April 1, 1996, for the remainder of 1996 and annually
thereafter are as follows (in thousands)
Year Amount
1996 (nine months) $ 2,040
1997 2,350
1998 1,856
1999 1,589
2000 1,075
2001 956
Thereafter 6,450
Total $ 16,316
In addition to minimum rental payments, tenants pay
reimbursements for their pro rata share of specified operating
expenses, which amounted to $32 (unaudited), $169, $50 and $64
for the three months ended March 31, 1996, and the years ended
December 31, 1995, 1994 and 1993 respectively. Certain leases
contain options to renew.
Page 7 of 8
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.
GLENBOROUGH REALTY TRUST INCORPORATED
By: Glenborough Realty Trust Incorporated,
Date: July 29, 1996 /s/ Andrew Batinovich
Andrew Batinovich
Director, Executive Vice President,
Chief Operating Officer
and Chief Financial Officer
(Principal Financial Officer)
Date: July 29, 1996 /s/ Terri Garnick
Terri Garnick
Senior Vice President,
Chief Accounting Officer,
Treasurer
(Principal Accounting Officer)
Page 8 of 8
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