-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CF8yW8Av1NNizuIirYGmb+uYD6j20LhGZg2H5VMr/MwihBc6lvRqpE7ZlXJFJTFx YW4ztMzj3frFpofPKn7cTQ== 0000889905-97-000006.txt : 19970225 0000889905-97-000006.hdr.sgml : 19970225 ACCESSION NUMBER: 0000889905-97-000006 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970205 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19970206 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT LAKES REIT INC CENTRAL INDEX KEY: 0000889905 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363844714 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-28354 FILM NUMBER: 97518774 BUSINESS ADDRESS: STREET 1: 2311 W 22ND STREET SUITE 109 CITY: OAK BROOK STATE: IL ZIP: 60521-1226 BUSINESS PHONE: 7063682900 MAIL ADDRESS: STREET 1: SUITE 109 STREET 2: 2311 W 22ND STREET CITY: OAKBROOK STATE: IL ZIP: 60521-1226 8-K/A 1 FORM 8-K/A FOR FEBRUARY 5, 1997 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K [X] Current Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 February 5, 1997 (Date of Report) Commission file number: 0-28354 Great Lakes REIT, Inc. (Exact name of Registrant as specified in its Charter) Maryland 36-3844714 (State or other jurisdiction (I.R.S. Employer identification no.) of incorporation organization) 823 Commerce Drive, Suite 300, Oak Brook, IL 60521 (Address of principal executive offices) (Zip Code) (630) 368 - 2900 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ACQUISITIONS As previously reported in a Current Report on Form 8-K filed December 6, 1996, on November 22, 1996 Great Lakes REIT, Inc. through Great Lakes REIT L.P. (collectively the "Company") acquired a three-story, class A office building located at 1301 Long Lake Road, Troy, Michigan ("Long Lake Crossing"). Constructed in 1988, the property consists of 169,959 rentable square feet and was approximately 93% occupied at acquisition. The property includes a two-story main lobby, an underground garage with 47 parking spaces, exterior parking with 1,067 spaces and a deli. TERMS OF PURCHASE Long Lake Crossing was purchased from an unaffiliated third party for approximately $16.1 million. Funds for the purchase came from Company cash reserves. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The required financial statement for Long Lake Crossing is attached as Exhibit A. The required proforma financial statement is attached as Exhibit B. No information is required under Items 1,3,4, and 6, and these items have therefore been omitted. By: /s/ Richard L. Rasley Richard L. Rasley, Secretary EXHBIT A Statements of Revenue and Certain Expenses Long Lake Crossing The period from January 1, 1996 to November 22, 1996 and the year ended December 31, 1995 with Report of Independent Auditors REPORT OF INDEPENDENT AUDITORS Board of Directors Great Lakes REIT, Inc. We have audited the accompanying Statements of Revenue and Certain Expenses of Long Lake Crossing (the Property) for the period from January 1, 1996 to November 22, 1996 and the year ended December 31, 1995. The Statements of Revenue and Certain Expenses are the responsibility of the Property's management. Our responsibility is to express an opinion on the Statements of Revenue and Certain Expenses based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statements of Revenue and Certain Expenses are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures made in the Statements of Revenue and Certain Expenses. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Statements of Revenue and Certain Expenses. We believe that our audits provide a reasonable basis for our opinion. The accompanying Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2 and are not intended to be a complete presentation of the Property's revenue and expenses. In our opinion, the Statements of Revenue and Certain Expenses referred to above present fairly, in all material respects, the revenue and certain expenses of the Property described in Note 2 for the period from January 1, 1996 to November 22, 1996 and the year ended December 31, 1995, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP ERNST & YOUNG LLP Chicago, Illinois December 27, 1996 LONG LAKE CROSSING STATEMENTS OF REVENUE AND CERTAIN EXPENSES
January 1, 1996 to Year Ended November 22, 1996 December 31, 1995 ----------------- ----------------- Revenue Base rents $2,269,745 $2,519,925 Tenant reimbursements 167,721 152,633 Other income 65,876 42,392 ------ ------ Total revenue 2,503,342 2,714,950 --------- --------- Expenses Real estate taxes 303,440 340,696 Contract Services 178,172 164,876 Utilities 277,635 300,855 Repairs and maintenance 92,496 106,083 Management fee 48,684 51,582 Insurance 23,689 25,788 Other 18,008 12,562 ------ ------ Total expenses 942,124 1,002,442 ------- --------- Revenue in excess of certain expenses $1,561,218 $1,712,508 ========== ==========
See accompanying notes. LONG LAKE CROSSING NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES Note 1 Business The accompanying Statements of Revenue and Certain Expenses relate to the operations of Long Lake Crossing (the Property). The Property was acquired on November 22, 1996, by Great Lakes REIT, L.P. (Great Lakes). As of November 22, 1996 and December 31, 1995, the Property had twenty-eight tenants and was 92% and 93% leased, respectively. Two tenants (Walsh College of Business and St. Paul Fire & Marine Insurance) accounted for approximately 33% of base rents at November 22, 1996 and December 31, 1995. Note 2 Summary of Significant Accounting Policies Basis of Presentation The accompanying Statements of Revenue and Certain Expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission. The statement is not representative of the actual operations of the Property for the periods presented nor indicative of future operations as certain expenses, primarily depreciation and amortization, which may not be comparable to the expenses expected to be incurred by Great Lakes in future operations of the Property, have been excluded. Revenue and Expense Recognition Revenue is recognized in the period in which it is earned. Expenses are recognized in the period in which they are incurred. Use of Estimates The preparation of the Statements of Revenue and Certain Expenses in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Note 3 Rentals The Property has entered into tenant leases that provide for tenants to share in the operating expenses and real estate taxes in relation to their pro rata share as defined. Note 4 Management Agreement During the year ended December 31, 1995 and the period ended November 22, 1996, the Property was managed by a third-party management company. The management agreement provided for 2% of gross monthly rent. EXHIBIT B Pro Forma Financial Statements The unaudited Pro forma statements of income for the nine months ended September 30, 1996, and the year ended December 31, 1995, present the results of operations as if the property acquisition had occurred at the beginning of 1995. The unaudited Pro forma balance sheet as of September 30, 1996, gives effect to the property acquisition subsequent to that date. The unaudited Pro forma financial staements are not necessarily indicative of what the Company's financial position or results of operations would have been assuming the above event would have been consummated as of the dates indicated nor do they purport to project the Company's financial position or results of operations at any future date or for any future period. Great Lakes REIT, Inc. Pro Forma Balance Sheet (unaudited)
Historical Pro forma 09/30/96 Property 09/30/96 (unaudited) Acquisition (unaudited) (1) (2) (3) Assets Properties: Land $21,491,500 $2,500,000 $23,991,500 Buildings, improvements, and equipment 94,623,932 13,600,416 108,224,348 Less accumulated depreciation 4,673,912 4,673,912 ---------------------------------------------------------- 111,441,520 16,100,416 127,541,936 Cash and cash equivalents 816,207 816,207 Real estate tax escrows 753,197 753,197 Rents receivable 1,434,547 1,434,547 Deferred costs 2,825,225 2,825,225 Other assets 451,702 14,032 465,734 ---------------------------------------------------------- Total assets $117,722,398 $16,114,448 $133,836,846 ========================================================== Liabilities and stockholders' equity Bank loan payable $27,602,368 $16,042,587 $43,644,955 Mortgage loans payable 18,158,065 18,158,065 Bonds payable 5,235,000 5,235,000 Accounts payable and accrued liabilities 911,960 911,960 Accrued real estate taxes 2,905,317 2,905,317 Prepaid rent 690,081 690,081 Security deposits 424,661 71,861 496,522 Distributions/dividends payable 1,638,881 ---------------------------------------------------------- Total liabilities 57,566,333 16,114,448 73,680,781 ---------------------------------------------------------- Preferred stock ($0.01 par value, 10,000,000 authorized, 73, 548 issued) 735 735 Common stock ($0.01 par value, 20,000,000 authorized; 6,316,683, issued in 1996) 63,167 63,167 Paid-in-capital 65,435,578 65,435,578 Distributions in excess of accumulated earnings (3,607,528) (3,607,528) Employee stock loans (1,247,351) (1,247,351) Deferred compensation (333,125) (333,125) Treasury stock (155,411) (155,411) ---------------------------------------------------------- Total stockholders' equity 60,156,065 0 60,156,065 ---------------------------------------------------------- Total Liabilities and Stockholders' Equity $117,722,398 $16,114,448 $133,836,846 ==========================================================
See accompanying notes to pro forma balance sheet. Notes to pro forma balance sheet. (1) Represents the historical financial position of the Company at September 30, 1996. (2) Represents the purchase price paid for Long Lake Crossing, net of any other assets acquired or liabilities assumed. It is assumed the purchase price was funded by borrowings on the Company's line of credit. (3) The unaudited pro forma balance sheet as of September 30, 1996 gives effect to the acquisition of Long Lake Crossing as of September 30, 1996 and is not indicative of the financial position of the Company had this acquisition taken place on that date nor does it purport to project the Company's financial position at any future date. Great Lakes REIT, Inc. Pro Forma Statements of Income (unaudited)
Historical Pro forma Nine months Acquisition of Pro Forma Nine months ended 9/30/96 Property Adjustments ended 9/30/96 (unaudited) (unaudited) (1) (2) (3) (5) Revenues Rental $17,534,220 2,095,821 19,630,041 Interest 78,366 78,366 ----------------------------------------------------------------------------- Total revenues 17,612,586 2,095,821 0 19,708,407 ----------------------------------------------------------------------------- Expenses Real estate taxes 2,907,224 254,043 3,161,267 Other property operating 4,691,157 688,081 5,379,238 General and administrative 1,387,097 1,387,097 Interest 2,865,533 902,396 3,767,929 Depreciation and amortization 2,727,414 255,008 2,982,422 Contract termination 1,273,307 1,273,307 ----------------------------------------------------------------------------- Total expenses 15,851,732 942,124 1,157,403 17,951,259 ----------------------------------------------------------------------------- Net income $1,760,854 $1,153,697 ($1,157,403) $1,757,148 ============================================================================= Earnings per common share and common share equivalent $0.35 $0.35 =================== =================== Weighted average number of common shares and common share equivalents outstanding 5,081,833 5,081,833 =================== ===================
See accompanying notes to pro forma balance statements of income.
Historical Pro forma Year Acquisition of Pro forma Year ended 12/31/95 Property Adjustments ended 12/31/95 (audited) (unaudited) (1) (4) (3) (5) Revenues Rental $14,765,108 $2,714,950 $17,480,058 Interest 200,818 200,818 ----------------------------------------------------------------------------- Total revenues 14,965,926 2,714,950 0 17,680,876 ----------------------------------------------------------------------------- Expenses Real estate taxes 2,624,588 340,696 2,965,284 Other property operating 3,967,543 661,746 4,629,289 General and administrative 922,652 922,652 Interest 2,296,457 1,203,194 3,499,651 Depreciation and amortization 1,954,885 340,010 2,294,895 Contract termination 0 ----------------------------------------------------------------------------- Total expenses 11,766,125 1,002,442 1,543,204 14,311,771 ----------------------------------------------------------------------------- Net income $3,199,801 $1,712,508 ($1,543,204) $3,369,105 ============================================================================= Earnings per common share and common share equivalent $0.88 $0.66 =================== =================== Weighted average number of common shares and common share equivalents outstanding 3,650,133 5,081,833 =================== ===================
See accompanying notes to pro forma statements of income. Notes to pro forma statements of income. (1) Represents the historical operations of the Company for the periods described. (2) Represents the unaudited, estimated historical operations of Long Lake Crossing from January 1, 1996 to September 30, 1996 based upon the audited results of operations for the period January 1, 1996 to November 22, 1996. (3) Depreciation is computed on a straight-line basis over 40 years for the periods described. Interest expense is computed on the amount assumed to be borrowed to acquire this property at an interest rate of 7.5% per annum for the periods described. (4) Represents the historical operations of Long Lake Crossing for the year ended December 31, 1995. (5) The unaudited pro forma statements of income for the periods described give effect to the acquisition of Long Lake Crossing as of January 1, 1995 and are not indicative of the results of operations of the Company had this acquisition taken place on that date nor do they purport to project the Company's results of operations at any future date. -----END PRIVACY-ENHANCED MESSAGE-----