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: February 16, 1995
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Federal Realty Investment Trust
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(Exact name of registrant as specified in its charter)
District of Columbia 1-7533 52-0782497
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4800 Hampden Lane, Suite 500, Bethesda, Maryland 20814
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 301/652-3360
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Exhibit Index appears on page 5
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Item 5. OTHER EVENTS
During the period January 1, 1995 through September 12, 1995 Federal Realty
Investment Trust ("the Trust") purchased one shopping center and twelve
commercial buildings ("Main Street Retail Properties"). The Trust also purchased
a building that was abutting Flourtown Shopping Center, one of its existing
centers, for $3.1 million on September 1, 1995. The 302,000 square foot Finley
Square Shopping Center was purchased on April 27, 1995 for approximately $18.8
million. The Main Street Retail Properties were purchased for a combined price
of approximately $29.8 million, as follows: (1) a 6,800 square foot building in
Greenwich, Connecticut for $2.0 million on February 16, 1995; (2) a 125,000
square foot group of seven buildings in West Hartford, Connecticut for $15.3
million on April 5, 1995; (3) a 10,000 square foot retail building in Westport,
Connecticut for $5.7 million on June 15, 1995; (4) an 11,000 square foot
building in Westfield, New Jersey for $2.1 million on August 16, 1995; (5) a
12,000 square foot building in Brookline, Massachusetts for $3.7 million on
September 7, 1995 and (6) a 7,000 square foot building in Evanston, Illinois for
$1.0 million on September 12, 1995.
In addition to the above acquisitions, the Trust purchased two properties
that had not been operating properties; on April 12, 1995 the Trust purchased
for $12.9 million a 35,500 square foot building in Greenwich, Connecticut, which
had been used by its prior owners in its operations and on June 12, 1995 a newly
constructed building in an infill space at Bethesda Row, one of its existing
properties, for $2.0 million.
All these purchases were for cash except for the building abutting
Flourtown, which was purchased for cash of $1.3 million and the assumption of a
$1.8 million mortgage which the Trust intends to prepay in October 1995. The
cash for these acquisitions was obtained from the proceeds of the 1995 senior
debt offerings and from borrowings on bank credit facilities.
The Trust acquired the 250,000 square foot Bristol Shopping Center in
Bristol, Connecticut on September 22, 1995 for a price of approximately $19.0
million, which was paid by assuming a mortgage of approximately $11.3 million
and the issuance of approximately $7.7 million worth of shares of beneficial
interest of the Trust. Financial statements for this shopping center are not yet
available.
Financial statements for the acquisition of Finley Square are included in
this Form 8-K. The Main Street Retail Properties and Bristol Shopping Center are
not individually significant and, in the aggregate, are under 10% of the total
assets of the Trust as of December 31, 1994 and their income from continuing
operations before income taxes, extraordinary items and cumulative effect of a
change in accounting principle, in the aggregate, for 1995 are expected to be
under 10% of the Trust's income from continuing operations. Therefore, audited
financial statements for these acquisitions are not included with this Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements, pro forma financial information and
exhibits are filed as part of this report:
(a) Financial statements of the real estate acquired, prepared pursuant to Rule
3.14 of Regulation S-X:
Page
(1) Audited financial statement of Sidcor Finley Associates
Independent Auditor's Report 6
Statement of Revenue and Certain Expenses, for the year
ended December 31, 1994 7
Notes to Statement of Revenue and Certain Expenses 8
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X:
(1) Pro Forma Condensed Balance Sheet - June 30, 1995 *
Pro Forma Condensed Statement of Operations - Year
ended December 31, 1994 9
Pro Forma Condensed Statement of Operations - Six
months ended June 30, 1995 10
* No pro forma condensed balance sheet as of June 30, 1995 is filed since
the acquisition of Finley Square is reflected in the actual balance sheet as of
June 30, 1995.
The pro forma condensed statement of operation for the year ended December
31, 1994 is based on audited historical financial statements of Finley Square
and the Trust after giving effect to the acquisition of Finley Square and the
adjustments as described in the accompanying notes to the pro forma financial
statement.
The pro forma condensed statement of operation for the six months ended
June 30, 1995 is based on unaudited historical financial statements of Finley
Square and the Trust after giving effect to the acquisition of Finley Square and
the adjustments as described in the accompanying notes to the pro forma
financial statement.
The pro forma financial statements of operation have been prepared by the
Trust based upon the financial statements of Sidcor Finley Associates (filed
with this report under Item 7(a)). These pro forma financial statements may not
be indicative of the results that actually would have occurred if the
acquisition had been in effect on the dates indicated or which may be obtained
in the future. The pro forma financial statements should be read in conjunction
with the audited financial statements and notes of Sidcor Finley Associates, the
audited consolidated financial statements of the Trust in its Annual Report on
Form 10-K for the year ended December 31, 1994 and the unaudited financial
statements of the Trust on Form 10-Q for the six months ended June 30, 1995.
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(c) Exhibits in accordance with the provisions of Item 601 of Regulation
S-K:
Exhibit 23. Independent Auditor's Consent
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 hereto duly authorized.
Federal Realty Investment Trust
(registrant)
Date: September 22, 1995 /s/Cecily A. Ward
Cecily A. Ward
Controller (Principal Accounting
Officer)
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EXHIBIT INDEX
ITEM NO. PAGE NO.
(23) Independent Auditor's Consent 11
5
(Letterhead of Warady & Davis LLP Appears Here)
INDEPENDENT AUDITORS' REPORT
Partners
Sidcor Finley Associates
Skokie, Illinois
We have audited the statement of revenue and certain expenses of SIDCOR FINLEY
ASSOCIATES (An Illinois Limited Partnership) for the year ended December 31,
1994. This financial statement is the responsibility of management. Our
responsibility is to express an opinion on this financial 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 financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
The accompanying statement of revenue and certain expenses was prepared for the
purpose of complying with the purchase agreement between SIDCOR FINLEY
ASSOCIATES and Federal Realty Investment Trust and is not intended to be a
complete presentation of SIDCOR FINLEY ASSOCIATES' revenue and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses of SIDCOR FINLEY
ASSOCIATES for the year ended December 31, 1994, in conformity with generally
accepted accounting principles.
June 13, 1995 Warady & Davis LLP
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SIDCOR FINLEY ASSOCIATES
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STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1994
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REVENUE
Rental $ 1,467,775
Tenant Reimbursement 611,179
Other 13,584
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$ 2,092,538
Operating Expenses
Salaries 15,256
Payroll Taxes and Benefits 4,107
Advertising 1,128
Decorating 6,029
Grounds and Landscaping 7,119
Mall Music 895
Management Fees 73,359
Professional Services 21,811
Property Taxes and Insurance 370,435
Repairs and Maintenance 48,212
Security 3,972
Sign Maintenance 5,015
Snow Removal 52,839
Telephone and Paging 262
Travel and Entertainment 1,223
Utilities 35,053
Other 3,793
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650,508
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REVENUE IN EXCESS OF CERTAIN EXPENSES $ 1,442,030
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SIDCOR FINLEY ASSOCIATES
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NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
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NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The accompanying financial statement includes the operations (see Basis of
Presentation below) of a retail shopping center referred to as SIDCOR FINLEY
ASSOCIATES (the "Center").
Federal Realty Investment Trust (the "Company") intends to acquire the real
estate and assume the outstanding lease obligations of each of the tenants.
BASIS OF PRESENTATION
The accompanying statement of revenue and certain expenses is not representation
of the actual operations of SIDCOR FINLEY ASSOCIATES for the period presented as
certain expenses, principally depreciation, amortization and interest expense,
which may not be comparable to the revenue and expenses expected to be incurred
by the Company in the proposed future operations of the Center, have been
excluded.
REVENUE RECOGNITION
Rental income is recognized on an accrual basis over the terms of the related
leases which approximates a straight-line basis.
NOTE 2 - RELATED PARTY TRANSACTIONS
A company owned by a general partner manages the property for a fee equal to 3-
1/2% of gross revenues. The company was compensated $73,359 for 1994.
NOTE 3 - SUBSEQUENT EVENT
The shopping center was sold in April 1995.
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Federal Realty Investment Trust
Pro Forma Condensed Statement of Operations
(unaudited)
Year ended December 31, 1994
(in thousands, except per share data)
Pro Forma Adjustments
Debit Credit
Trust Finley Pro Forma
Actual Square Combined
Actual
Revenue
Rental and other income $133,831 $2,092 $135,923
Interest 3,933 3,933
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137,764 2,092 139,856
Expenses
Interest 31,462 0 (1) 1,051 32,513
Depreciation and amortization 29,801 0 (2) 272 30,073
Administrative & other charges 6,661 0 6,661
Other charges 1,055 0 1,055
Other operating expenses 47,927 650 48,577
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116,906 650 118,879
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Income before investors' share of operations, 20,858 1,442 20,977
Investors' share of operations (392) 0 (392)
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Net income $ 20,466 $1,442 $ 20,585
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Weighted average number of common shares 30,679 30,679
Earnings per share $0.67 $0.67
The pro forma condensed statement of operations of the Trust gives effect to
the acquisition of Finley Square as though it was acquired at the beginning of
the period presented.
(1) Reflects interest expense on revolving credit facilities to purchase Finley
Square.
(2) Reflects depreciation based on the book value of depreciable real estate
purchased.
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Federal Realty Investment Trust
Pro Forma Condensed Statement of Operations
(unaudited)
Six months ended June 30, 1995
(in thousands, except per share data)
Pro Forma Adjustments
Debit Credit
Trust Finley Pro Forma
Actual Square Combined
Revenue
Rental and other income $72,023 $687 $72,710
Interest 1,893 0 1,893
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73,916 687 74,603
Expenses
Interest 18,716 0 (1) 438 19,154
Depreciation and amortization 16,988 0 (2) 91 17,079
Administrative & other charges 2,817 0 2,817
Other operating expenses 23,204 231 23,435
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61,725 231 62,485
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Income before investors' share of operations, and 12,118
loss on real estate to be sold 12,191 456
Investors' share of operations 170 0 170
Loss on real estate to be sold (535) 0 (535)
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Net income $11,826 $456 $11,753
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Weighted average number of common shares 31,691 31,691
Earnings per share $0.37 $0.37
The pro forma condensed statement of operations of the Trust gives effect to
the acquisition of Finley Square as though it was acquired at the beginning of
the period presented. The operations of Finley Square are partially reflected in
the Trust actual numbers at June 30, 1995, since Finley Square was purchased on
April 27, 1995. Operations for the period prior to acquisition is reflected in
the actual numbers for Finley Square.
(1) Reflects additional interest expense on revolving credit facilities as if
Finley Square were purchased at the beginning of the period.
(2) Reflects additional depreciation based on the book value of depreciable
real estate purchased, as if Finley Square were purchased at the beginning
of the period.
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Exhibit 23
(Letterhead of Warady & Davis LLP Appears Here)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
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We have issued our report dated June 13, 1995 accompanying the Statement of
Revenue and Certain Expenses of SIDCOR FINLEY ASSOCIATES for the year ended
December 31, 1994 included in the Trust's Current Form 8-K. We hereby consent to
the incorporation by reference of said report in the Registration Statements of
Federal Realty Investment Trust, Form S-3 (File No. 33- as filed on
September 6, 1995), Form S-3 (File No. 33-51029, effective December 31, 1993),
Form S-3 (File No. 33-5956, effective March 10, 1993), Form S-8 (File No. 33-
55111, effective August 17, 1994), and Form S-8 (File No. 33-60252, effective
March 30, 1993).
Warady & Davis LLP
September 21, 1995
/s/ Warady & Davis LLP
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