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| BRT > SEC Filings for BRT > Form 8-K/A on 10-Jan-2013 | All Recent SEC Filings |
10-Jan-2013
Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired-Grove at Trinity Pointe Page
(i) Independent Auditors' Report 1
(ii) Statements of Revenues and Certain Expenses for the year ended 2
December 31, 2011 and the nine months ended September 30, 2012
(iii) Notes to Statements of Revenues and Certain Expenses 3
(b) Financial Statements of Businesses Acquired-Avondale Station Apartments
(i) Independent Auditors' Report 4
(ii) Statements of Revenues and Certain Expenses for the year ended 5
December 31, 2011 and the nine months ended September 30, 2012
(iii) Notes to Statements of Revenues and Certain Expenses 6
(c) Unaudited Pro Forma Consolidated Financial Statements.
(i) Pro Forma Consolidated Balance Sheet as of September 30, 2012 8
(ii) Pro Forma consolidated Statements of Income:
For the year ended September 30, 2012 9
(iii) Notes to Pro Forma Consolidated Financial Statements 10
(d) Exhibits
Exhibit No. Title of Exhibit
23.1 Consent of BDO USA, LLP dated January 10, 2013
To the Board of Trustees and Shareholders of BRT Realty Trust and Subsidiaries
We have audited the accompanying statement of revenues and certain expenses of the property located at 555 Wood Arbor Parkway, Cordova, TN, ("Grove at Trinity Pointe") for the year ended December 31, 2011. The statement of revenues and certain expenses is the responsibility of the BRT Realty Trust's management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Grove at Trinity Pointe's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, 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 revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K/A of BRT Realty Trust. As described in Note 2, material amounts that would not be comparable to those resulting from the proposed future operations of Grove at Trinity Pointe are excluded from the statement of revenues and certain expenses and the statement of revenues and certain expenses is not intended to be a complete presentation of Grove at Trinity Pointe's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Grove at Trinity Pointe for the year ended December 31, 2011, on the basis of accounting described in Note 2.
New York, New York
January 10, 2013
Grove at Trinity Pointe
Statements of Revenues and Certain Expenses
Nine Months Ended Year Ended
September 30, 2012 December 31, 2011
(unaudited)
Revenues:
Rental and other income $ 2,881,000 $ 3,749,000
Certain Expenses:
Real estate taxes 410,000 547,000
Management fees 100,000 131,000
Utilities 51,000 70,000
Payroll 436,000 584,000
Repairs and maintenance 306,000 383,000
Other real estate operating expenses 198,000 268,000
Total certain expenses 1,501,000 1,983,000
Revenues in excess of certain expenses $ 1,380,000 $ 1,766,000
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See Independent Auditors' report and accompanying notes.
Grove at Trinity Pointe Notes to Statements of Revenues and Certain Expenses
1. Organization
The property located at 555 Wood Arbor Parkway, Cordova, Tennessee ("Grove at Trinity Pointe") is a 464- unit multi-family garden apartment complex.
BRT Realty Trust and subsidiaries (collectively, the "Trust") is a real estate investment trust. The Trust originates and holds for investment senior mortgage loans secured by commercial and multi-family properties and participates as an equity investor in joint ventures which acquire multi-family or other real estate assets.
On November 15, 2012, a consolidated joint venture comprised of TRB Grove at Trinity LLC, the Trust's wholly owned subsidiary and an unaffiliated joint venture partner, acquired Grove at Trinity Pointe for a net purchase price of $25.5 million, including $19.25 million of mortgage debt.
2. Basis of Presentation and Significant Accounting Policies
The accompanying statements of revenues and certain expenses of Grove at Trinity Pointe have been prepared in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Trust's Current Report on Form 8-K/A. Accordingly, the statements of revenues and certain expenses exclude certain expenses that may not be comparable to those expected to be incurred in the future operations of the aforementioned property. Items excluded consist of interest expense, depreciation, amortization, corporate expenses, and other costs not directly related to future operations.
Use of Estimates
The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
Revenue Recognition
Rental revenue is recognized on an accrual basis when due from tenants. Leases are generally for a one-year term and have no renewal options.
Income Taxes
Grove at Trinity Pointe was organized as a limited liability company and is not directly subject to federal. The limited liability company is subject to state taxes.
To the Board of Trustees and Shareholders of BRT Realty Trust and Subsidiaries
We have audited the accompanying statement of revenues and certain expenses of the property located at 703 Twin Oaks Drive, Decatur, GA ("Avondale Station Apartments") for the year ended December 31, 2011. The statement of revenues and certain expenses is the responsibility of the BRT Realty Trust's management. Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Avondale Station Apartments' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement, 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 revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Form 8-K/A of BRT Realty Trust. As described in Note 2, material amounts that would not be comparable to those resulting from the proposed future operations of Avondale Station Apartments are excluded from the statement of revenues and certain expenses and the statement of revenues and certain expenses is not intended to be a complete presentation of Avondale Station Apartments' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Avondale Station Apartments for the year ended December 31, 2011, on the basis of accounting described in Note 2.
New York, New York
January 10, 2013
Avondale Station Apartments
Statements of Revenues and Certain Expenses
Nine Months Ended Year Ended
September 30, 2012 December 31, 2011
(unaudited)
Revenues:
Rental and other income $ 1,281,000 $ 1,696,000
Certain Expenses:
Real estate taxes 124,000 166,000
Management fees 81,000 109,000
Utilities 25,000 55,000
Payroll 192,000 268,000
Repairs and maintenance 125,000 137,000
Other real estate operating expenses 89,000 147,000
Total certain expenses 636,000 882,000
Revenues in excess of certain expenses $ 645,000 $ 814,000
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See Independent Auditors' report and accompanying notes.
Avondale Station Apartments Notes to Statements of Revenues and Certain Expenses
1. Organization
The property located at 703 Twin Oaks Drive, Decatur, Georgia ("Avondale Station Apartments") is a 212-unit multi-family garden apartment complex.
BRT Realty Trust and subsidiaries (collectively, the "Trust") is a real estate investment trust. The Trust originates and holds for investment senior mortgage loans secured by commercial and multi-family properties and participates as an equity investor in joint ventures which acquire multi-family or other real estate assets.
On November 19, 2012, a consolidated joint venture comprised of TRB Avondale LLC, the Trust's wholly owned subsidiary and an unaffiliated joint venture partner, acquired Avondale Station Apartments for a net purchase price of $10.5 million, including $8.0 million of mortgage debt.
2. Basis of Presentation and Significant Accounting Policies
The accompanying statements of revenues and certain expenses of Avondale Station Apartments have been prepared in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for inclusion in the Trust's Current Report on Form 8-K/A. Accordingly, the statements of revenues and certain expenses exclude certain expenses that may not be comparable to those expected to be incurred in the future operations of the aforementioned property. Items excluded consist of interest expense, depreciation, amortization, corporate expenses, and other costs not directly related to future operations.
Use of Estimates
The preparation of the statements of revenues and certain expenses in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses and accompanying notes. Actual results could differ from those estimates.
Revenue Recognition
Rental revenue is recognized on an accrual basis when due from tenants. Leases are generally for a one year term and have no renewal options.
Income Taxes
Avondale Station Apartments was organized as a limited liability company and is not directly subject to federal and state income taxes.
On November 15, 2012, a consolidated joint venture composed of TRB Grove at Trinity LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Grove at Trinity Pointe, a 464 unit, multi-family garden apartment complex located in Cordova, Tennessee. The net purchase price was $25.5 million and included $19.25 million of mortgage debt.
On November 19, 2012, a consolidated joint venture composed of TRB Avondale LLC, a wholly owned subsidiary of the Trust, and an unaffiliated joint venture partner, acquired Avondale Station Apartments, a 212 unit, multi-family garden apartment complex located in Decatur, Georgia. The net purchase price was $10.5 million and included $8.0 million of mortgage debt.
The following unaudited pro forma consolidated balance sheet of the Trust as of September 30, 2012, has been prepared as if the acquisitions had been completed on September 30, 2012. The unaudited pro forma consolidated statements of income for the year ended September 30, 2012 are presented as if the acquisitions had been completed on October 1, 2011.
These pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with the Trust's 2012 Annual Report on Form 10-K for the year ended September 30, 2012.
The unaudited pro forma consolidated financial statements are based on assumptions and estimates considered appropriate by the Trust's management; however, such statements do not purport to represent what the Trust's financial position and results of operations would have been assuming the completion of the acquisition on October 1, 2011, nor do they purport to project the Trust's financial position and results of operations at any future date or for any future period.
In the opinion of the Trust's management, all adjustments necessary to reflect the effects of the transactions described above have been included in the pro forma consolidated financial statements.
BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA - CONSOLIDATED BALANCE SHEET
As of September 30, 2012
(Amounts in thousands, except per share data)
Purchase of
Grove Purchase of The Trust
The Trust at Trinity Avondale Station Pro Forma
Historical Pointe Apartments as Adjusted
ASSETS
Real estate loans, all earning
interest $ 37,096 - - $ 37,096
Deferred fee income (512 ) - - (512 )
36,584 - 36,584
Real estate properties, net of
accumulated depreciation
of $4,787 190,317 $ 25,450 $ 10,450 226,217
Investment in unconsolidated
ventures 291 - - 291
Cash and cash equivalents 78,245 (5,557 ) (3,002 ) 69,686
Restricted cash - construction
holdbacks 55,252 - - 55,252
Available-for-sale securities at
market 1,249 - - 1,249
Deferred costs 12,337 198 122 12,657
Prepaid Expenses 5,978 - 5,978
Other assets 5,703 890 1,381 7,974
Total Assets $ 385,956 $ 20,981 $ 8,951 $ 415,888
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable $ 169,284 $ 19,248 $ 8,046 $ 196,578
Junior subordinated notes 37,400 - - 37,400
Accounts payable and accrued
liabilities 4,298 90 42 4,430
Deposits payable 2,108 - - 2,108
Deferred income 25,848 165 60 26,073
Total Liabilities 238,938 19,503 8,148 266,589
Commitments and contingencies - - - -
Equity:
BRT Realty Trust shareholders'
equity:
Preferred shares, $1 par
value:
Authorized 10,000 shares,
none issued - - - -
Shares of beneficial
interest, $3 par value:
Authorized number of shares,
unlimited, 13,473 issued 40,420 - - 40,420
Additional paid-in capital 165,258 - - 165,258
Accumulated other
comprehensive income-net
unrealized gain on
available-for-sale securities 356 - - 356
Accumulated deficit (72,585 ) - - (72,585 )
Total BRT Realty Trust
shareholders' equity 133,449 - - 133,449
Non-controlling interests 13,569 1,478 803 15,850
Total Equity 147,018 1,478 803 149,299
Total Liabilities and
Equity $ 385,956 $ 20,981 $ 8,951 $ 415,888
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See accompanying notes to the unaudited pro forma consolidated financial statements
BRT REALTY TRUST AND SUBSIDIARIES
PRO FORMA - CONSOLIDATED STATEMENT OF INCOME
For The Year Ended September 30, 2012
(Dollars in thousands, except share data)
Purchase of Purchase of
Grove Avondale The Trust
The Trust at Trinity Station Pro Forma
Historical Pointe Apartments as Adjusted
Revenues:
Interest on real estate loans an
purchase money mortgage $ 7,257 - - $ 7,257
Loan fee income 2,273 - - 2,273
Rental revenue from real estate
properties 8,675 $ 4,077 $ 1,830 14,582
Recovery of previously provided
allowances 156 - - 156
Other, primarily investment
income 1,218 - - 1,218
Total revenues 19,579 4,077 1,830 25,486
Expenses:
Interest on borrowed funds 4,729 734 (a) 313 (e) 5,776
Advisor's fees, related party 1,104 92 (b) 38 (b) 1,234
Property acquisition costs 2,407 - - 2,407
General and
administrative-including $705 to
related party 7,161 - - 7,161
Operating expenses relating to
real estate properties 6,042 2,240 1,010 9,292
Amortization and depreciation 2,004 758 (c) 292 (c) 3,054
Total expenses 23,447 3,824 1,653 28,924
Total revenues less total
expenses (3,868 ) 253 177 (3,438 )
Equity in earnings of
unconsolidated ventures 829 - - 829
Gain on sale of
available-for-sale securities 605 - - 605
Gain on sale of loan 3,192 - - 3,192
Income from continuing
operations 758 253 177 1,188
Discontinued operations:
Gain on sale of real estate
assets 792 - - 792
Net income 1,550 253 177 1,980
Plus: net loss (income)
attributable to non controlling
interests 2,880 (69 )(d) (43 )(d) 2,768
Net income attributable to
common shareholders $ 4,430 $ 184 $ 134 $ 4,748
Basic and diluted per share
amounts attributable to common
shareholders:
Income from continuing
operations $ .26 $ . 01 $ .01 $ . 28
Discontinued operations .06 - - .06
Basic and diluted income per
share $ .32 $ .01 $ .01 $ .34
Amounts attributable to BRT
Realty Trust:
Income (loss) from continuing
operations $ 3,638 $ 184 $ 134 $ 3,956
Discontinued operations 792 - - 792
Net income $ 4,430 $ 184 $ 134 $ 4,748
Weighted average number of
common shares outstanding:
Basic and diluted 14,035,792 14,035,792 $ 14,035,792 14,035,792
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