SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM 8-KA
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: SEPTEMBER 30, 1996
------------------
MERIDIAN INDUSTRIAL TRUST, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-14166 94-3224765
- --------------------------------------------------------------------------------
(STATE OF ORGANIZATION) (COMMISSION NUMBER) (IRS EMPLOYER I.D. #)
455 MARKET STREET, 17TH FLOOR, SAN FRANCISCO, CALIFORNIA 94105
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (415) 281-3900
--------------
NOT APPLICABLE
- --------------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
THIS DOCUMENT CONTAINS 27 SEQUENTIALLY NUMBERED PAGES.
--
THERE ARE NO EXHIBITS.
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Sears Logistics Facility, Columbus, Ohio
----------------------------------------
On September 30, 1996 Meridian Industrial Trust, Inc. (the "Company")
purchased a fee interest in a distribution/warehouse facility located at 5330
Crosswind Drive, Columbus, Ohio (the "Property"), for a total acquisition cost
of $30,919,277, paid entirely in cash. The Company funded the acquisition from
its property acquisition facility with The First National Bank of Boston, Texas
Commerce Bank National Association, and NationsBank of Texas, N.A. (the
"Unsecured Credit Facility"). The Property is located on approximately 57.413
acres of land in Franklin County, Ohio. The building encompasses approximately
1,014,592 square feet of rentable space and features 150 cross-docked loading
docks with levelers and four drive-in doors.
The Company purchased the Property from OakRe Life Insurance Company, a
Missouri corporation (the "Seller"). No material relationship exists between the
Seller and the Company, any Company affiliate, any Company director or officer,
or any associate of any such director or officer.
The acquisition cost of $30,919,277 consisted of: (i) a contract purchase
price to the Seller of $30,864,555; and (ii) estimated title insurance, legal,
audit and miscellaneous costs totalling $54,722. The total acquisition cost is
subject to adjustment based upon an increase or decrease in the contract
purchase price resulting from a final calculation of costs incurred before
closing to improve the Property.
The sole tenant occupying the Property is Sears Logistics Services, Inc.,
a Delaware corporation ("Sears Logistics"), a warehousing and distribution firm.
The triple net lease (the "Lease") with Sears Logistics has an expiration date
of September 20, 2006, and the Lease provides for two five-year renewal options
at market rates. The lease had been assigned to Sears Logistics from Sears,
Roebuck and Co., a New York corporation ("Sears Roebuck"), an affiliate of Sears
Logistics. Sears Roebuck remains liable for performance of all the tenant's
obligations under the Lease. At closing, the annual rental rate under the Lease
was $2.75 per square foot.
Before the Company's purchase, the Seller held the Property for the
production of income as rental property. The Company considers the Property
suitable for and intends to continue that use.
In determining the amount of consideration paid for the Property, the
Company considered (i) the Property's location, age, operating expenses, fixed
charges, physical condition, projected future cash flow and gross rentals, (ii)
the duration and other terms of the Lease, (iii) the financial and business
standing of Sears Logistics and Sears Roebuck, and (iv) land values.
Additionally, the Company analyzed three comparable properties in the area,
taking into account the terms of the leases on those properties and those
properties' occupancy rates, locations, ages, and visibility. The Company also
considered sales of comparable properties in the area and the anticipated future
level of repair costs, maintenance costs, utility costs, and property taxes
associated with the Property.
<PAGE>
ITEM 5. OTHER EVENTS.
PUBLIC OFFERING.
On November 25, 1996, the Company closed on a public offering of 3,400,000
shares of common stock priced at $18.25 per share (the "Offering"). The proceeds
from the Offering were used to fund certain property transactions and to repay
temporary borrowings incurred under the Company's Unsecured Credit Facility.
RECENT INVESTMENTS AND DISPOSITIONS.
Since February 23, 1996, the Company has purchased or substantially
completed development of seven modern warehouse/distribution properties at an
aggregate estimated cost of $83.5 million representing a total of 2.5 million
square feet located in four target markets. Additionally, the Company has
committed to acquire three industrial properties representing 865,116 square
feet in two target markets at an anticipated aggregate cost of $31.6 million.
The acquisition of each of the Rustin Avenue Property, Wanamaker Avenue
Property, Gold River Lane Property, Mission Oaks Boulevard Property and Meyer
Circle Property and the completion of the construction of each of the Water's
Ridge Drive and Sarah Jane Parkway build-to-suit development projects are herein
referred to as "Property Transactions".
COMPLETED ACQUISITIONS
Since February 23, 1996, the Company has acquired five
warehouse/distribution properties that comprise 1.8 million square feet for
aggregate consideration of approximately $57.8 million. These properties, with
the exception of the Rustin Avenue property and Wanamaker Avenue property, are
not included in the Property Transactions. The following table summarizes these
completed acquisitions.
<TABLE>
<CAPTION>
Approximate Estimated
Properties Market Square Feet Consideration(1)
---------- ------ ----------- -------------
<S> <C> <C> <C>
Arenth Avenue Los Angeles Basin 332,790 $ 9,700,000
Wanaker Avenue Los Angeles Basin 136,249 4,500,000
Rustin Avenue Los Angeles Basin 113,721 4,115,000
Crosswind Drive Columbus 1,014,592 30,919,000
Overlake Place San Francisco Bay Area 160,000 8,508,000
---------- -------------
Total 1,757,352 $ 57,742,000
========= ============
<FN>
- ----------
(1) Including transaction costs.
</FN>
</TABLE>
ARENTH AVENUE PROPERTY. On March 29, 1996, the Company purchased a 332,790
square foot warehouse/distribution facility located in City of Industry,
California (Los Angeles Basin) for a purchase price of approximately $9.7
million. The Property is leased on a triple-net basis to General Tire Corp.
through March 2001. The building, constructed in 1973, has a 24-foot clear
ceiling height, 21 dock-high doors and an internal rail spur and is situated on
a 16-acre site.
WANAMAKER AVENUE PROPERTY. On November 22, 1996, the Company purchased a
136,249 square foot warehouse/distribution facility located in Ontario,
California (Los Angeles Basin) for a purchase price of $4.5 million. The
property is leased to several tenants, including the Cutter Biological Division
of Miles Laboratory, Inc. and Professional Expediting Methods, Inc. The
building, constructed in 1985, has a 24-foot clear ceiling height and 17
dock-high doors and is situated on a six-acre site.
RUSTIN AVENUE PROPERTY. On November 15, 1996, the Company purchased two
warehouse/distribution buildings in Riverside, California (Los Angeles Basin)
that contain a total of 113,721 square feet for a purchase price of
approximately $4.1 million. The Property is leased to several tenants, including
APS, Inc., Processors Unlimited and STO Corporation. The buildings, constructed
in 1989, have clear ceiling heights of 22 and 24 feet, feature a total of 21
dock-high doors and are situated on a six-acre site.
CROSSWIND DRIVE PROPERTY. On September 30, 1996, the Company purchased a
1,014,592 square foot warehouse/distribution facility located in Columbus, Ohio
for a purchase price of approximately $30.9 million. The Property is leased to
Sears Logistics Services, Inc. (and guaranteed by Sears Roebuck & Co.) on a
triple-net basis for ten years with rental escalation during the term. The
building, constructed in 1989 and expanded in 1996, has a 32-foot clear ceiling
height, 150 dock-high doors and parking for 503 trailers and is situated on a
57-acre site. (See "Item 2. Acquisition or Disposition of Assets".)
OVERLAKE PLACE PROPERTY. On June 10, 1996, the Company purchased a 160,000
square foot warehouse/ distribution facility located in Newark, California (San
Francisco Bay Area) for a purchase price of approximately $8.5 million. The
Property is leased on a triple-net basis to BT Office Products International,
Inc. for ten years with rental escalation during the term. The building,
constructed in 1996, has a 24-foot clear ceiling height, eight dock-high doors
and an Early Suppression-Fast Response ("ESFR") sprinkler system and is situated
on a 12-acre site.
PENDING ACQUISITIONS
The Company has entered into definitive agreements to acquire three
additional warehouse/distribution properties that comprise 865,116 square feet
for aggregate consideration of approximately $31.6 million. These properties are
included in the Property Transactions for pro forma purposes. The following
table summarizes these pending acquisitions.
<TABLE>
<CAPTION>
Approximate Estimated
Properties Market Square Feet Consideration(1)
---------- ------ ----------- -------------
<S> <C> <C> <C>
Mission Oaks Boulevard Los Angeles Basin 310,736 9,885,000
Meyer Circle Los Angeles Basin 201,380 8,050,000
Gold River Lane San Francisco Bay Area 353,000 13,616,000
-------- ------------
Total 865,116 $31,551,000
======== ============
<FN>
- ----------
(1) Including transaction costs.
</FN>
</TABLE>
MISSION OAKS BOULEVARD PROPERTY. On October 29, 1996, the Company entered
into a contract to purchase a 310,736 square foot warehouse/distribution
facility located in Camarillo, California (Los Angeles Basin) for a purchase
price of approximately $9.9 million. The acquisition is expected to close in
December 1996. The property is leased to Technicolor Videocassette, Inc. on a
triple-net basis through November 1, 1999 with rental escalation during the
term. The building, constructed in 1969 and completely renovated in 1987, has a
28-foot clear ceiling height and 25 dock-high doors and is situated on an
18-acre site.
MEYER CIRCLE PROPERTY. On October 1, 1996, the Company signed a letter of
intent to purchase a 201,380 square foot warehouse/distribution facility located
in Corona, California (Los Angeles Basin) for a purchase price of $8.1 million.
In addition, the Company will assume approximately $5.8 million in indebtedness
that bears interest at 10% per annum and is currently expected to be repaid in
1997. The acquisition is expected to close in December 1996. The property is
leased to Core Mark International through March 2003 with rental escalation
during the term. The building, constructed in 1983, has a 24-foot clear ceiling
height and 12 dock-high doors and is situated on a nine-acre site.
GOLD RIVER LANE PROPERTY. The Company entered into a contract to purchase
a 353,000 square foot warehouse/distribution facility that is under construction
in Stockton, California (San Francisco Bay Area). The $13.6 million acquisition
is expected to close upon completion of construction of the facility in December
1996. The property is leased on a triple-net basis to Kraft Foods, Inc., for an
initial term of ten years with rental escalation during the term. The building
has a 30-foot clear ceiling height and 55 dock-high doors. The site contains 29
acres and includes additional land for a 90,000 square foot expansion to the
existing structure.
DEVELOPMENT PROJECTS
The following table summarizes the Company's development projects that
have either been completed or will be substantially completed by December 1996.
The properties are 100% pre-leased.
<TABLE>
<CAPTION>
Estimated
Approximate Construction
Properties Market Square Feet Cost(1)
---------- ------ ----------- -----------
<S> <C> <C> <C>
Sarah Jane Parkway(2)(3) Dallas 361,690 $15,650,000
Water's Ridge Drive(2)(4) Dallas 367,744 10,090,000
------- -----------
Total 729,434 $25,740,000
======= ===========
<FN>
- ----------
(1) Including transaction costs.
(2) These development projects are included in the Property Transactions for
pro forma purposes.
(3) The Sarah Jane Parkway project was completed on November 19, 1996.
(4) The Water's Ridge Drive project is estimated to be completed in December
1996.
</FN>
</TABLE>
<PAGE>
SARAH JANE PARKWAY PROJECT. On November 19, 1996, the Company completed
construction and leased to Allegiance Corporation a 361,690 square foot
warehouse/distribution facility located in Grand Prairie, Texas (Dallas). The
Company's total investment was approximately $15.7 million. The property is
leased on a triple-net basis to Allegiance Corporation for a 15-year term with
rental escalation during the term. The building has a 33-foot clear ceiling
height, 36 dock-high doors and an ESFR sprinkler system. The site contains 20
acres and includes additional land for a 90,000 square foot expansion to the
existing structure.
WATER'S RIDGE DRIVE PROJECT. On April 19, 1996, the Company entered into a
contract to develop and lease a 367,744 square foot warehouse/distribution
facility located in Lewisville, Texas (Dallas). The Company anticipates that its
total investment will be approximately $10.1 million and that the construction
will be completed in December 1996. The property is leased on a triple-net basis
to LD Brinkman & Co. for a 15-year term with rental escalation during the term.
The building has a 30-foot clear ceiling height, 80 cross-docked dock-high doors
and an ESFR sprinkler system and is situated on a 20-acre site.
COMPLETED AND PENDING DISPOSITIONS
On April 15, 1996, the Company sold the Moorpark R&D Building, a 109,256
square foot warehouse/ distribution property located in Moorpark, California,
for $3.9 million. On August 23, 1996, the Company sold three properties located
in Alabama, Progress Center I & II (light industrial properties aggregating
92,427 square feet) and the 8215 Highway Building (a 15,986 square foot light
industrial property), for an aggregate of $3.9 million. The Company also is
actively marketing two warehouse/distribution properties, Birmingham I and II,
located in Birmingham, Alabama.
The Company has entered into binding contracts to sell two of its retail
properties: Meridian Village and Seatac Village. These properties comprise
298,677 square feet in the aggregate and represent approximately 33.1% of the
Company's retail portfolio. The Company also is actively marketing its Park Ten
Center and Golden Cove Center retail properties.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of the Three Acquired Properties.
-----------------------------------------------------------
The following financial statement is filed as part of this
report:
Report of Independent Public Accountants
Combined Statements of Revenues and Certain Expenses for the
Three Acquired Properties for the Period From January 1, 1996 to
the Earlier of Date of Acquisition or September 30, 1996
(unaudited) and for the Year Ended December 31, 1995 with
accompanying notes
(b) Pro forma financial information. The following pro forma
----------------------------------
financial information are filed as part of this report:
Pro Forma Condensed Consolidated Balance Sheet as of September
30, 1996 (unaudited) with accompanying notes and adjustments
Pro Forma Condensed Consolidated Statement of Operations for the
Nine Months Ended September 30, 1996 (unaudited) with
accompanying notes and adjustments
Pro Forma Condensed Consolidated Statement of Operations for the
Year Ended December 31, 1995 (unaudited) with accompanying notes
and adjustments
Historical As Adjusted Condensed Consolidated Statement of
Operations for the Nine Months Ended September 30, 1996
(unaudited) with accompanying notes and adjustments
Historical As Adjusted Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1995 (unaudited) with
accompanying notes and adjustments
(c) Exhibits. The following exhibits are attached to this
---------
report:
None.
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed by the undersigned
hereunto duly authorized.
By: MERIDIAN INDUSTRIAL TRUST, INC.
Date: December 12, 1996 By: Robert A. Dobbin
---------------------
Robert A. Dobbin
Secretary
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of Meridian Industrial Trust, Inc.:
We have audited the accompanying combined statement of revenues and certain
expenses for the Three Acquired Properties, as defined in Note 1, for the year
ended December 31, 1995. This statement is the responsibility of the management
of Meridian Industrial Trust, Inc. (the "Company"). Our responsibility is to
express an opinion on this combined statement 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with Rule 3-14 of the Securities and
Exchange Commission's rules and regulations, and is not intended to be a
complete presentation of the revenues and expenses of the Three Acquired
Properties.
In our opinion, the combined statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of the Three Acquired
Properties for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
San Francisco, California
October 25, 1996
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE THREE ACQUIRED PROPERTIES
FOR THE PERIOD FROM JANUARY 1, 1996 TO THE EARLIER OF
DATE OF ACQUISITION OR SEPTEMBER 30, 1996 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
Earlier of Date
of Acquisition or
Nine Months Year
Ended Ended
September 30, December 31,
1996 1995
(unaudited)
---------- ------
<S> <C> <C>
Rental Revenues $ 3,301 $5,614
Certain Expenses:
Real Estate Taxes 372 603
Property Operating and Maintenance 365 668
------- ------
737 1,271
------- ------
Rental Revenue in Excess of Certain $ 2,564 $4,343
======= ======
Expenses
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE THREE ACQUIRED PROPERTIES
FOR THE PERIOD FROM JANUARY 1, 1996 TO THE EARLIER OF
DATE OF ACQUISITION OR SEPTEMBER 30, 1996 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS)
1. PROPERTIES ACQUIRED.
The combined statements of revenues and certain expenses (see "Basis of
Presentation" below) include the combined operations of two operating properties
acquired by Meridian Industrial Trust (the "Company") on March 29, 1996 and
September 30, 1996, and a third property which the Company expects to acquire
prior to December 31, 1996 (collectively referred to as "the Three Acquired
Properties").
<TABLE>
<CAPTION>
RENTABLE
ACQUISITION SQUARE
PROPERTY NAME LOCATION DATE FEET BUILDING TYPE
------------- -------------------- -------------- --------- ----------------------
<S> <C> <C> <C> <C>
Arenth Facility City of Industry, CA March 29, 1996 332,750 Warehouse/Distribution
Crosswind Dr. Facility Columbus, OH September 30, 1,014,592 Warehouse/Distribution
Mission Oaks Blvd. Facility Camarillo, CA Pending 310,736 Warehouse/Distribution
</TABLE>
At the time of the Crosswind Drive Facility acquisition, expansion of the
existing facility by 301,950 square feet was substantially completed. The tenant
occupying the facility moved into the expansion space on or about September 30,
1996.
2. BASIS OF PRESENTATION.
The accompanying statements of revenues and certain expenses are not
representative of the actual operations of the Three Acquired Properties for the
periods presented. Certain expenses may not be comparable to the expenses
expected to be incurred by the Company in the proposed operations of the Three
Acquired Properties; however, the Company is not aware of any material factors
relating to these Three Acquired Properties that would cause the reported
financial information not to be indicative of future operating results. Excluded
expenses consist primarily of interests expense, depreciation and amortization
and other costs not directly related to the future operations of the Three
Acquired Properties.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
(a) 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.
(b) USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
<PAGE>
4. LEASING ACTIVITY.
The minimum future rental revenue due under non-cancelable operating
leases in effect as of October 1, 1996, for the remainder of 1996 and annually
thereafter are as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
---- ------
<S> <C>
1996 (three months) $1,299
1997 5,197
1998 5,197
1999 5,017
2000 4,116
Thereafter 18,961
</TABLE>
In addition to minimum rental payments, tenants pay their share of
specified operating expenses, which amounted to $737 for the period from January
1, 1996 to the earlier of the date of acquisition or September 30, 1996
(unaudited), and $1,271 for the year ended December 31, 1995. Certain leases
contain options to renew.
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
BACKGROUND
The accompanying unaudited pro forma condensed consolidated balance sheet as
of September 30, 1996 has been prepared to reflect (i) the Property
Transactions, (ii) the completion of the Offering, and (iii) the paydown of the
Unsecured Credit Facility using the net proceeds from the Offering and cash on
hand, as if such transactions and adjustments had occurred on September 30,
1996. The accompanying unaudited pro forma condensed consolidated statements of
operations have been prepared to reflect (i) the incremental effect of the
Property Transactions and completed acquisitions, (ii) the incremental effect of
four property dispositions occurring prior to September 30, 1996, (iii) the
incremental effects of the paydown of the Unsecured Credit Facility using the
net proceeds from the Company's March 1996 offering of 1,500,000 shares of
Common Stock, and (iv) the paydown of the Unsecured Credit Facility Paydown
using the net proceeds from the Offering and cash on hand, as if such
transactions and adjustments had occurred on January 1, 1995.
These unaudited pro forma condensed consolidated statements should be read in
connection with the historical as adjusted financial information and notes
thereto included elsewhere in this report. In the opinion of management, the pro
forma condensed consolidated financial information provides for all adjustments
necessary to reflect the effects of the Property Transactions and completed
acquisitions, property dispositions, March 1996 offering of 1,500,000 shares of
Common Stock, the Offering, and the paydown of the Unsecured Credit Facility.
The pro forma condensed consolidated information is unaudited and is not
necessarily indicative of the consolidated results that would have occurred if
the transactions and adjustments reflected therein had been consummated in the
period or on the date presented, or on any particular date in the future, nor
does it purport to represent the financial position, results of operations or
changes in cash flows for future periods.
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
UNSECURED
CREDIT
PROPERTY FACILITY
HISTORICAL TRANSACTIONS OFFERING PAYDOWN PRO FORMA
(1) (2) (3) (4)
-------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in real estate,net $283,655 $53,428 $ -- $ -- $ 337,083
Cash & Cash equivalents 1,622 -- 57,718 (57,840) 1,500
Restricted Cash 1,944 -- -- -- 1,944
Other assets 5,479 -- -- -- 5,479
-------- ------- ------- -------- --------
Total Assets $292,700 $53,428 $57,718 $(57,840) $346,006
======== ======= ======= ======== ========
LIABILITIES
Mortgage loans $66,094 $5,758 $ -- $ -- $ 71,852
Unsecured credit facility 41,900 47,670 (57,840) 31,730
Other liabilities 9,980 -- -- -- 9,980
------- ------ ------ -------- -------
Total Liabilities 117,974 53,428 -- (57,840) 113,562
------- ------ ------ -------- --------
STOCKHOLDERS'
EQUITY
Common stock and
preferred stock 12 -- 3 -- 15
Addditional paid-in capital 176,771 -- 57,715 -- 234,486
Distributions in excess
of income (2,057) -- -- -- (2,057)
------- ------ ------ ------- --------
Total Stockholders'
Equity 174,726 -- 57,718 -- 232,444
------- ------ ------ ------ -------
Total Liabilities and
Stockholders Equity $292,700 $53,428 $57,718 $(57,840) $346,006
======== ======= ======= ========= ========
<FN>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES AND ADJUSTMENTS TO
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(UNAUDITED, IN THOUSANDS)
(1)Reflects the historical condensed consolidated balance sheet of the Company
as of September 30, 1996.
(2)Reflects the purchase of five properties in connection with the Property
Transactions which the Company either is currently in the process of
acquiring and that the Company's management deems probable of closing or have
recently closed. Such property acquisitions aggregate to a cost of
approximately $40,166. The Company expects that these acquisitions will
initially be funded with draws on its Unsecured Credit Facility, together
with assumption of a mortgage in the amount of $5,758.
Also, reflects the completion of two build-to-suit properties currently in
process (the Water's Ridge Drive and Sarah Jane Parkway properties), at an
aggregate estimated cost to complete of approximately $13,262. The Company
expects to fund the remaining development costs with borrowings under its
Unsecured Credit Facility and expects to complete the projects prior to year
end.
(3)Reflects completion of the Offering comprising the issuance of 3,400,000
shares of the Company's Common Stock at an Offering price of $18.25 per share
resulting in gross proceeds of $62,050. In connection with the Offering, the
Company will incur costs of approximately $4,332.
(4)Reflects the paydown of borrowings on the Unsecured Credit Facility with the
net proceeds from the Offering and cash on hand of approximately $122.
</FN>
</TABLE>
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PROPERTY UNSECURED
TRANSACTIONS CREDIT
HISTORICAL AND PROPERTY PRIOR FACILITY
AS COMPLETED DISPOSITIONS OFFERING PAYDOWN PRO FORMA
ADJUSTED ACQUISITIONS
(1) (2) (3) (4) (5)
--------- --------- -------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Rental revenues $29,246 $9,125 $(578) $ -- $ -- $ 37,793
Interest and other income 631 -- (131) -- -- 500
------ ----- ----- ---- ----- --------
Total Revenues 29,877 9,125 (709) -- -- 38,293
------ ----- ----- ---- ----- --------
EXPENSES
Property operating costs 3,304 505 (146) -- -- 3,663
Real estate taxes 4,160 606 (45) -- -- 4,721
Interest expense 5,299 5,686 (280) (495) (3,095) 7,115
General and
administrative 3,710 -- -- -- -- 3,710
Depreciation and
amortization 3,918 1,583 (70) -- -- 5,431
----- ----- ----- ----- ----- -------
Total Operating
Expenses 20,391 8,380 (541) (495) (3,095) 24,640
------ ----- ---- ----- ------- -------
Net income 9,486 745 (168) 495 3,095 13,653
Series B preferred
dividends (2,123) -- -- -- -- (2,123)
------ ---- ----- ---- ------ -------
Net income allocable
to common $7,363 $745 $(168) $495 $3,095 $ 11,530
====== ==== ===== ==== ====== ========
Net income per common
share $ 0.87
========
Weighted average
common shares
outstanding 13,296,806
==========
</TABLE>
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
Property
Historical Transactions Repayment
As and completed Property Prior of
Adjusted Acquisitions DispositionsOffering Facility Pro Forma
(1) (2) (3) (4) Borrowings(5)
------- -------- -------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Rental revenues $38,103 $13,669 $(1,328) $ -- $ -- $ 50,444
Interest and other income 713 -- (113) -- -- 600
------ ------ ------ ----- ----- --------
Total Revenues 38,816 13,669 (1,441) -- -- 51,044
------ ------ ------ ----- ----- --------
EXPENSES
Property operating costs 4,847 853 (274) -- -- 5,426
Real estate taxes 5,439 868 (88) -- -- 6,219
Interest expense 7,645 8,334 (552) (1,882) (4,057) 9,488
General and adminitrative 4,800 -- -- -- -- 4,800
Depreciation and
amortization 5,050 2,629 (534) -- -- 7,145
------ ------ ------ ----- ----- --------
Total Operating
expenses 27,781 12,684 (1,448) (1,882) (4,057) 33,078
------ ------ ------ ------ ------ --------
Net income 11,035 985 7 1,882 4,057 17,966
Series B preferred dividends (2,818) -- -- -- -- (2,818)
------ ------ ----- ----- ----- --------
Net income allocable
to common $8,217 $ 985 $ 7 $ 1,882 $ 4,057 $ 15,148
====== ====== ======= ======= ======= =========
Net income per common
share $ 1.14
=========
Weighted average common
shares outstanding 13,296,806
==========
<FN>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES AND ADJUSTMENT TO
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1996
and the Year Ended December 31, 1995
(unaudited, in thousands)
1.Reflects the historical as adjusted operations of the Company, excluding
gains and losses on sales of properties and extraordinary items. See the
historical as adjusted condensed consolidated statements of operations included
elsewhere in this report.
2.Reflects the incremental effect (i.e., as if such activities had occurred
or been completed on January 1, 1995) of the completed acquisitions comprising
three properties acquired prior to September 30, 1996 and the Property
Transactions comprising, (i) five properties that the Company either is
currently in the process of acquiring and that the Company's management deems
probable of closing or have closed and (ii) completion of two build-to-suit
properties currently in process. Thus, the incremental effect reflects the
operations prior to acquisition by the Company of the five acquired properties
and the estimated revenues and expenses of the two build-to-suit properties. The
estimated revenues of the two build-to-suit properties are based upon signed
lease agreements. The incremental depreciation and amortization is based upon
estimated asset lives of 35 years. The estimated incremental interest expense is
based on pro forma borrowings on the Company's Unsecured Credit Facility
consisting of (i) approximately $49,127 used to acquire three properties prior
to September 30, 1996, (ii) approximately $34,408 that will be used to fund the
five properties that the Company currently is in the process of acquiring or has
acquired, and (iii) approximately $5,758 relating to the assumption of a
mortgage loan bearing a fixed interest rate of 10% in connection with an
acquisition, and (iv) approximately $25,740 relating to development of the two
build-to-suit properties (including approximately $13,262 of costs that will be
funded subsequent to September 30, 1996). Each of the Unsecured Credit Facility
interest adjustments reflects an assumed interest rate of 7.1%.
The following table sets forth the revenues and certain expenses of the above
mentioned properties for the period from January 1, 1996 to the earlier of the
date of acquisition or September 30, 1996 and for the year ended December 31,
1995.
September 30, 1996
------------------------------------------------
Rental Revenues
Real in Excess
Rental Operating Estate of Certain
Revenues Costs Taxes Expenses
-------- ------ ------- ------
Acquisitions:
Arenth Avenue $ 303 $ -- $ (41) $ 262
Overlake Place 403 (1) (35) 367
Crosswind Drive 1,882 (13) (250) 1,619
Crosswind Drive Expansion 686 -- -- 686
Rustin Avenue 384 (35) (34) 315
Wanamaker Avenue 395 (20) (35) 340
Gold River Lane 1,031 (5) -- 1,026
Mission Oaks Blvd 1,116 (352) (81) 683
Meyer Circle 857 (59) (130) 668
Developments:
Water's Ridge Drive 866 (5) -- 861
Sarah Jane Parkway 1,202 (15) -- 1,187
------ ------ ------ ------
Totals $9,125 $ (505) $ (606) $8,014
====== ====== ====== ======
December 31, 1995
----------------------------------------------
Rental
Revenues
Real in Excess
Rental Operating Estate of Certain
Revenues Costs Taxes Expenses
-------- ------- ------- -------
Acquisitions:
Arenth Avenue $ 1,320 $ -- $ (162) $ 1,158
Overlake Place 828 -- -- 828
Crosswind Drive 2,477 (11) (333) 2,133
Crosswind Drive Expansion 915 -- -- 915
Rustin Avenue 512 (47) (45) 420
Wanamaker Avenue 526 (27) (46) 453
Gold River Lane 1,375 (6) -- 1,369
Mission Oaks Blvd 1,817 (657) (108) 1,052
Meyer Circle 1,142 (79) (174) 889
Developments:
Water's Ridge Drive 1,155 (6) -- 1,149
Sarah Jane Parkway 1,602 (20) -- 1,582
------ ------- ------ ------
Totals $13,669 $ (853) $ (868) $11,948
======= ======= ======= =======
3.Reflects the disposition of four properties during 1996 (one in May and
three in August). The net proceeds from the sales aggregated to approximately
$7,769 and were used to repay borrowings under the Company's Unsecured Credit
Facility. The net gain on the sales amounted to approximately $177.
4.Reflects the incremental effect of the Company's March 1996 offering of
1,500,000 shares of Common Stock. The net proceeds of approximately $23,200 and
cash on hand were used to repay pro forma borrowings on the Company's Unsecured
Credit Facility of approximately $26,505. The estimated interest reduction is
based upon an assumed interest rate of 7.1%.
5.Reflects the repayment of approximately $57,840 of pro forma borrowings
under the Company's Unsecured Credit Facility with the net proceeds from the
Offering and cash on hand. The estimated interest reduction is based upon an
assumed interest rate of 7.1%. Also, reflects a reduction of the unused facility
fees on the Company's Unsecured Credit Facility based upon a pro forma unused
facility of approximately $43,270 at 0.25%. The Company's Unsecured Credit
Facility bears a variable rate of interest at LIBOR plus 1.70%. An increase or
decrease of 0.125% (1/8%) in LIBOR will result in an annual increase or decrease
in pro forma interest expense of $43.
6.Pro forma taxable income for the twelve months ended September 30, 1996 is
approximately $15,001.
</FN>
</TABLE>
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
HISTORICAL AS ADJUSTED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(unaudited, in thousands, except share data)
Background
The accompanying unaudited historical as adjusted condensed consolidated
statements of operations for the nine months ended September 30, 1996 and for
the year ended December 31, 1995 has been prepared to reflect (i) the respective
historical results of Meridian Point Realty Trust IV Co. ("Trust IV"), Meridian
Point Realty Trust VI Co. ("Trust VI"), and Meridian Point Realty Trust VII Co.
("Trust VII") (collectively referred to as the "Merged Trusts") and the
properties acquired from Meridian Point Realty Trust '83 (the "Asset Purchase")
for the respective periods; (ii) the incremental effects of the merger of Trust
IV, Trust VI and Trust VII into the Company (the "Merger"), the retirement of
certain indebtedness using the net proceeds from a private placement of
preferred stock and the availability of funds under the Unsecured Credit
Facility (the "Refinancing"), and the closing of the transactions under the
stock purchase agreements the Company had with Hunt Realty Acquisitions, L.P.
and USAA Real Estate Company (the "Recapitalization") on the historical results
of the Merged Trusts and the Asset Purchase; and (iii) the historical results of
the Company; to reflect the post-Merger operations of the Company as if such
transactions and adjustments had occurred on January 1, 1995. The Merger, Asset
Purchase and Refinancing each closed concurrently on February 23, 1996. In the
opinion of management, the historical as adjusted condensed consolidated
financial information provides for all adjustments necessary to reflect the
effects of the Merger, the Asset Purchase, the Recapitalization, the
Refinancing, and the disposition and acquisition of certain properties during
1995.
The historical as adjusted condensed consolidated financial information is
unaudited and is not necessarily indicative of the consolidated results that
would have occurred if the transactions reflected therein had been consummated
in the period presented, or on any particular date in the future, nor does it
purport to represent the financial position, results of operations or changes in
cash flows for future periods.
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
HISTORICAL AS ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
January 1, 1996 to February 23, 1996
-----------------------------------------------------------------------------------
Merged Historical
Trusts As Historical
Historical Asset Adjusted As
Combined Purchase Merger Refinancing Merged Historical Adjusted
(1) (2) (3) (4) Trusts (5)
------ ------ ----- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Rental revenues $4,997 $785 $ -- $ -- $5,782 $23,464 $29,246
Interest and
other income 161 1 -- -- 162 469 631
----- ---- ----- ---- ------ ------- -------
Total 5,158 786 -- -- 5,944 23,933 29,877
----- ---- ----- ---- ------ ------ ------
EXPENSES
Property
operating costs 912 216 (308) -- 820 2,484 3,304
Real estate taxes 812 79 -- -- 891 3,269 4,160
Interest expense 1,506 234 -- (609) 1,131 4,168 5,299
General and
aminitstrative 1,162 -- (452) -- 710 3,000 3,710
Depreciation and
amortization 1,308 208 (832) -- 684 3,234 3,918
----- ---- ----- ---- ---- ----- ------
Total operating
expenses 5,700 737 (1,592) (609) 4,236 16,155 20,391
----- ---- ------- ----- ----- ------ ------
Net income (542) 49 1,592 609 1,708 7,778 9,486
Series B
preferred
dividends -- -- -- (417) (417) (1,706) (2,123)
---- ---- ----- ---- ----- ------- -------
Net income
allocable
to common $(542) $ 49 $1,592 $192 $1,291 6,072 $7,363
====== ==== ====== ==== ====== ====== ======
<FN>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES AND ADJUSTMENTS TO HISTORICAL AS ADJUSTED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED, IN THOUSANDS)
1.Reflects the historical operations of the Merged Trusts on a combined basis
for the period from January 1, 1996 to the Merger date of February 23, 1996,
excluding gains and losses on sales of properties and extraordinary items.
2.Reflects the historical operations of the properties in connection with the
Asset Purchase for the period from January 1, 1996 to the Merger date of
February 23, 1996, excluding gains and losses on sales of properties and
extraordinary items.
3.Reflects the incremental effects of purchase accounting as a result of the
Merger, together with certain cost adjustments, which result in a decrease in
historical as adjusted expenses for the nine months ended September 30, 1996 as
follows: (i) a reduction of depreciation expense of $832 resulting from the
purchase accounting to record the Merger (historical as adjusted depreciation
expense has been calculated on a straight line basis using average useful lives
of 35 years) and (ii) a decrease in general and administrative expenses of $760
comprising a decrease in general and administrative expenses allocated to
property operating costs of $308 and a decrease in corporate office costs of
$452. The reduction reflects a decrease in personnel costs, including salaries
and benefits and a reduction in other administrative expenses, including
accounting, legal and occupancy costs.
4.Reflects the pay down and retirement of $59,983 of the Company's debt using
certain proceeds from (i) the $35,000 private placement of 2,272,277 shares of
Series B Preferred Stock completed concurrent with the Asset Purchase and (ii)
$26,505 in borrowings on the Company's Unsecured Credit Facility. The net
reduction in interest expense resulting from the debt retirements is comprised
of the following:
PERIOD FROM
JANUARY 1, 1996 TO
FEBRUARY 23, 1996
------------------
Decrease resulting from repayment of $59,983 in
debt bearing $ (924)
interest rates ranging from 8.19% to 10.65%
Decrease in loan fee amortization resulting from (13)
debt repayment
Increase in interest expense on the Unsecured
Credit Facility 274
borrowings of $26,505 at 7%
Unsecured Credit Facility fees and amortization 54
-------
Net reduction $ (609)
=======
5.Reflects the historical operations of the Company for the period from
January 1, 1996 to September 30, 1996, excluding gains and losses on sales and
extraordinary items.
6.Historical as adjusted taxable income for the nine months ended September
30, 1996 is approximately $10,643.
</FN>
</TABLE>
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
HISTORICAL AS ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
Refinancing
Merged ------------------
Trusts Property Recapital- Asset Private Unsecured
Historical Historical Transactions ization Purchase Placement Credit Historical
(1) Combined(2) (3) (4) Merger(5) Sub-Total (6) (7) Facility(8) As Adjusted
---------- ----------- ----------- -------- -------- --------- -------- ----- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Rentals from real
estate investments $ -- $33,583 $ (45) $ -- $ -- $33,538 $4,565 $ -- $ -- $38,103
Interest and other 33 1,014 -- -- (350) 697 16 -- -- 713
----- ----- ---- ---- ----- ---- ---- ---- ---- ----
Total Revenues 33 34,597 (45) -- (350) 34,235 4,581 -- -- 38,816
----- ------ ---- ---- ---- ------ ----- ---- ---- ------
EXPENSES
Interest expense -- 10,005 236 (1,024) -- 9,217 1,642 (3,219) 5 7,645
Property taxes -- 4,971 (46) -- -- 4,925 514 -- -- 5,439
Property operating costs -- 5,761 (252) -- (1,530) 3,979 868 -- -- 4,847
General and administrative 1,326 3,012 -- -- 462 4,800 -- -- -- 4,800
Provision for decrease
in net realizable value -- 1,275 (1,275) -- -- -- -- -- -- --
Depreciation and
amortization -- 8,721 (98) -- (4,141) 4,482 568 -- -- 5,050
----- ----- ---- ---- ------ ----- ---- ---- ---- -----
Total Expenses 1,326 33,745 (1,435) (1,024) (5,209) 27,403 3,592 (3,219) 5 27,781
----- ------ ------- ------ ------ ------ ----- ------ --- ------
Net Income (Loss) (1,293) 852 1,390 1,024 4,859 6,832 989 3,219 (5) 11,035
Preferred Dividends(9) (29) -- -- -- 29 -- -- (2,818) -- (2,818)
to common $(1,322) $ 852 $1,390 $1,024 $4,888 $6,832 $989 $401 $ (5) $8,217
======= ===== ====== ====== ====== ====== ==== ==== ==== ======
<FN>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES AND ADJUSTMENTS TO HISTORICAL AS ADJUSTED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED, IN THOUSANDS)
1.Reflects the historical operations of the Company for the period from
inception (May 18, 1995) to December 31, 1995.
2.Reflects the Merged Trusts historical combined statement of operations for
the year ended December 31, 1995.
3.Reflects the incremental effect on operations from the July 1995
disposition of the Paradise Marketplace resulting in a net increase in income
from operations of $1,280 (such increase in net income is primarily attributable
to the historical as adjusted elimination of the provision for decrease in net
realizable value recorded in 1995 prior to the sale of the Paradise
Marketplace). Proceeds from the sale of the Paradise Marketplace were used to
pay down the long-term debt facilities, resulting in a decrease in interest
expense of $207. Also reflects the incremental effect of the November 8, 1995
acquisition of the Olive Branch Distribution Center which results in a net
increase in income from operations of $110 representing the estimated results of
operations prior to acquisition. The Company owns the adjacent property, Olive
Branch, which is occupied by the same tenant. The estimated revenues are based
upon the executed lease agreement that provides for monthly base rent of $70 and
reimbursement of operating expenses, estimated to be approximately $5 per month.
Estimated annual operating expenses of $58, including repairs and maintenance
and management fees, are based on the actual operating costs at the adjacent
Olive Branch Property. The adjustments relating to the Olive Branch Distribution
Center also reflect estimated interest expense of $414 relating to interest on
the $6,700 bridge loan used to purchase the property, at LIBOR plus 2.00% (7.72%
at December 31, 1995), and amortization of loan fees of $29 over the one year
term of the bridge loan. The estimated depreciation and amortization expense
relating to the Olive Branch Distribution Center has been calculated on a
straight line basis using an average useful life of 35 years.
4.Reflects the Recapitalization of the Merged Trusts on May 31, 1995,
involving respective equity investments by Hunt and USAA in the Merged Trusts.
The net proceeds from these equity investments of $24,684 and available cash of
$2,233 were used to pay down principal and restructure the Merged Trusts'
variable rate and fixed rate long-term debt facilities by $10,588 and $16,329,
respectively. Accordingly, the historical as adjusted consolidated statement of
operations reflects a net reduction of interest for the period prior to the May
31, 1995 Recapitalization date comprised of the following:
Year Ended
December 31,
1995
------------
Reduction resulting from pay downs of variable rate facility
of $10,588 at 7.56% for 1995 $ (333)
Reduction resulting from pay downs of fixed rate facility of
$16,329at 8.33% for 1995 (567)
Reduction resulting from other pay downs of $1,405 at 13.00%
for 1995 (76)
Reduction resulting from write-off of old loan fees (336)
Increase resulting from interest rate increase on variable
rate facility based upon balance of $26,505 at an incremental
increase of 0.60% for 1995 67
Increase resulting from interest rate increase on fixed rate
facility based upon $66,094 at an incremental increase
of 0.41% for 1995 113
New loan fee amortization 108
Net reduction $(1,024)
As a result of the above adjustments, the historical as adjusted condensed
consolidated statement of operations reflects interest expense on the variable
rate long-term debt facility and the fixed rate facility, based upon the
remaining balance after the paydowns, at the interest rates in effect at the
date of Recapitalization of 8.19% and 8.63%, respectively. Trust IV had an
interest rate cap agreement which caps the one month LIBOR at 4.50%. The rate
cap is based upon $18,620 for the period July 1, 1995 to December 31, 1995 and
upon $11,170 for the period from January 1, 1996 through its expiration on June
28, 1996. The agreement provides for payments to Trust IV to the extent that the
one month LIBOR exceeds 4.5%. The agreement was transferred to the Company upon
completion of the Merger. For the year ended December 31, 1995 Trust IV received
$377 under the interest rate cap agreement.
5.Reflects the effects of purchase accounting as a result of the Merger,
together with certain cost adjustments, which result in a decrease in historical
as adjusted interest income due to lower cash balances to be maintained by the
Company than historically maintained by the Merged Trusts, and a decrease in
historical as adjusted expenses for the year ended December 31, 1995 as follows:
(i) a reduction of depreciation expense of $4,141 resulting from the purchase
accounting to record the Merger (historical as adjusted depreciation expense has
been calculated on a straight line basis using average useful lives of 35 years)
and (ii) a net decrease in general and administrative expenses of $1,068,
comprising a decrease in general and administrative expenses allocated to
property operating costs of $1,530, partially offset by an increase in corporate
office costs of $462. The net change is primarily the result of decreases to
reflect the nonrecurring bonuses and nonqualified stock options compensation
recorded by the Merged Trusts and the Company during 1995, respectively,
partially offset by an increase in personnel costs, including salaries and
benefits, net of a reduction in other administrative expenses, including
accounting, legal and occupancy costs.
6.Represents the revenues and certain expenses of the properties purchased by
the Company in the Asset Purchase. The historical as adjusted adjustments for
the year ended December 31, 1995 also reflect historical as adjusted
depreciation of such properties on a straight line basis using average estimated
useful lives of 35 years of $568 and historical as adjusted interest expense of
$1,642 on the mortgage debt of $16,349 assumed by the Company in connection with
the Asset Purchase. The debt assumed includes four mortgages with fixed interest
rates ranging from 8.50% to 10.63%, one mortgage with a variable rate of
Treasury Bills plus 3.00% (8.56% at December 31, 1995), and one mortgage with a
variable rate of Prime plus 1.00% (9.50% at December 31, 1995). The six
mortgages have maturity dates ranging from March 1996 to September 2009. The
historical as adjusted interest expense on the mortgages assumed has been based
upon actual amounts incurred by Meridian Point Realty Trust '83 during 1995.
7.Reflects the pay down and retirement of $33,478 of the Company's debt using
proceeds from the $35,000 Private Placement completed concurrent with the Asset
Purchase. The net reduction in interest expense resulting from the debt
retirements is comprised of the following:
Year Ended
December
31, 1995
-----------
Decrease resulting from repayment of mortgage notes
payable of $26,778 bearing interest at various rates
ranging from 8.22% to 10.65% during 1995 $(2,660)
Decrease resulting from repayment of bridge
loan of $6,700 bearing interest at 7.81% for 1995 (523)
Decrease in loan fee amortization (36)
------------
Net reduction $(3,219)
============
The debt retirements resulted in an extraordinary loss of $29.
8.Reflects a net increase in interest expense associated with the retirement
of the Company's variable rate long-term debt facility using $26,505 in proceeds
from borrowings on the Unsecured Credit Facility. Prior to the April 3, 1996
offering, the Unsecured Credit Facility provided for a maximum borrowing amount
of $50,000, bore interest at LIBOR plus 1.70% (7.00% at February 23, 1996),
matured in February 1998, and provided for fees on the unused facility of 25
basis points to the extent that less than 65% of the facility is used and 15
basis points to the extent that more the 65% of the facility is used. The net
increase in interest expense is comprised of the following:
Year Ended
December
31, 1995
-----------
Decrease resulting from repayment of variable rate
long-term debt
facility of $26,505 bearing interest at 8.19% for $(2,178)
1995
Decrease in loan fee amortization due to retirements (54)
Interest expense on Unsecured Credit Facility
borrowings of 1,855
$26,505 bearing interest at 7.00%
Amortization of loan fees on Unsecured Credit Facility 308
Agency fees 15
Estimated unused facility fees based upon a historical
as adjusted 59
unused facility balance of $23,495
Increase in interest expense ----------
$ 5
==========
The historical as adjusted increase in loan fee amortization reflects (i)
amortization of $615 of loan fees and costs associated with the Unsecured Credit
Facility over the two year term of the Unsecured Credit Facility and (ii)
amortization of $130 of fees and costs associated with changes in the collateral
pool securing the fixed rate long-term debt facility over the 10 year term of
the fixed rate long-term debt facility. The historical as adjusted agency fees
represent fees paid to the lead lender on the Unsecured Credit Facility and have
been based upon the terms of the Unsecured Credit Facility. The debt retirements
result in an extraordinary loss of $89.
The Unsecured Credit Facility will be subject to changes in LIBOR. An
increase or decrease of 0.125% ( 1/8%) in LIBOR will result in an annual
increase or decrease in interest expense of $33.
9. Reflects the accrual of preferred stock dividends on the Series B
Preferred Stock issued in connection with the private placement of 2,272,277
shares of Series B Preferred Stock. The Series B Preferred Stock has an initial
dividend rate of $1.24 per share.
10.Pro forma taxable income for the year ended December 31, 1995 is $15,169.
</FN>
</TABLE>
