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UBA > SEC Filings for UBA > Form 8-K/A on 12-Jul-2013All Recent SEC Filings

Show all filings for URSTADT BIDDLE PROPERTIES INC

Form 8-K/A for URSTADT BIDDLE PROPERTIES INC


12-Jul-2013

Other Events, Financial Statements and Exhibits


ITEM 8.01 - OTHER ITEMS

During the period November 1, 2012 through May 28, 2013, the Company acquired in separate transactions eleven properties consisting of approximately 178,000 square feet of gross leasable area ("GLA") and equity investments in two more properties totaling 101,000 in GLA, together (the "Acquisitions") for an aggregate investment of approximately $85.3 million.
On May 2, 2013, the Company, through a wholly owned subsidiary, purchased The Village Shopping Center, a 109,000 square foot grocery anchored shopping center in New Providence, New Jersey, located in Union County (the "New Providence Property"), for $34.9 million from N. Providence, LLC ("Village Shopping Center Seller"). There is no relationship between any Director or Officer of the Company and the Village Shopping Center Seller. At the closing of the transaction the Company assumed an existing mortgage on the property serviced by Wells Fargo Bank, N.A. valued at approximately $21.3 million. The mortgage matures in January 2022 with a fair market value interest rate of 4.0%. The Company's cash investment of approximately $16.1 million was funded with available cash remaining from its common and preferred stock offerings in October 2012.
In addition, on May 28, 2013, the Company, through a wholly-owned subsidiary, purchased two retail properties in Greenwich, CT, located in Fairfield County (the "Greenwich Properties") for $18.0 million from Chimblo Real Estate Enterprises, LLC ("Greenwich Property Sellers"). There is no relationship between any Director or Officer of the Company and the Greenwich Property Sellers. The two properties combined contain 25,000 in GLA. At the closing of the transaction the Company assumed an existing first and second mortgage encumbering both properties held by Peoples United Bank, N.A. The two mortgages were valued at approximately $8.3 million. The mortgages mature in August 2016 with a fair market value interest rate of 4.0%. The Company's cash investment of approximately $10.0 million was funded with available cash remaining from its common and preferred stock offerings in October 2012.
Set forth in Item 9.01 are audited financial statements prepared pursuant to Rule 3-14 of Regulation S-X relating to a majority of the Acquisitions, none of which individually are considered significant within the meaning of Rule 3-14. Material Factors Considered by the Company:

New Providence Property:

Market and Competition:

Prior to acquiring the New Providence Property, the Company considered general regional and local economic market conditions and the property's competitive posture within that market.

The New Providence Property acquired is a shopping center located in the Town of New Providence, Union County, New Jersey. The Property contains 109,000 square feet of GLA and is situated on 7.78 acres of land. At July 1, 2013 the property was 80% leased to fourteen tenants whose primary businesses are the sale of retail products, goods and services.

The New Providence Property was built in 1965 (recently renovated to accommodate the new A&P), is located on Springfield Avenue, a major thoroughfare in New Providence, New Jersey that connects the affluent suburb of Summit, New Jersey with Berkeley Heights, New Jersey, and is well situated in the center of the community. Within 3 miles, the average household income is nearly $197,000.
There are approximately 62,000 people within 3 miles of the property. The potential development of new large shopping centers in the surrounding area is limited due to lack of remaining developable land and a different and complex entitlement process for new development.

Tenants:


The property's largest tenants are A&P, a national grocery retail chain occupying 46,000 square feet (42.2% of the property's GLA) and CVS Pharmacy, a national retail chain occupying 9,600 square feet (8.8% of the Property's GLA). No other tenant leases more than 4.4% of the property's GLA.

Substantially all the leases are with tenants for terms longer than one year and generally provide for additional rental amounts based on each tenant's share of the cost of maintaining common areas and certain operating expenses including real estate taxes and insurance of the property, and percentage of gross sales rent.

The following is a schedule of lease expirations of the property by year:

                                             Number of
                                               Tenants       Total Square
                                           Whose Lease            Footage           Minimum       % of Annual
                                           Expire Each      Expiring Each       Annual Base      Base Rentals
                                                  Year               Year           Rentals               (1)

Year:
2013                                                 -                  -     $           -                 - %
2014                                                 3             10,700           354,000              15.6 %
2015                                                 2              3,600           102,000               4.5 %
2016                                                 1              4,800           162,000               7.1 %
2017                                                 2              3,800           129,000               5.7 %
Thereafter                                           6             64,300         1,518,000              67.1 %
                                                    14             87,200     $   2,265,000             100.0 %

(1) Based on 2013 annualized base rents.

Building and Capital Improvements:

The estimated federal tax basis of the property (including land) is approximately $34,850,000. For federal income tax purposes, the property will be depreciated over its estimated useful life (39 years) on a straight line basis.

Property Taxes:

The annual real estate taxes of the property are anticipated to be approximately $660,000 for the 2013 tax year.

Property Management:

The Company manages the property directly.

After reasonable inquiry, the Company is not aware of any other material factors relating to the New Providence Property that would cause the reported financial information not to be necessarily indicative of future operating results.

The Company and its operations are, however, subject to a number of risks and uncertainties. For a discussion of such risks, see the risks identified in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2012 under Item 1A Risk Factors and in the other reports filed by the Company with the Securities and Exchange Commission.


Greenwich Properties:

Market and Competition:

Prior to acquiring the Greenwich Properties, the Company considered general regional and local economic market conditions and the Greenwich Properties' competitive posture within that market.

One of the properties, Greenwich Commons, contains 10,000 square feet of GLA and is a retail strip center located on West Putnam Avenue in Greenwich, Connecticut. At July 1, 2013, the property was 100% leased to five tenants whose primary businesses are the sale of retail products, goods and services; the shopping center is also shadow anchored by a Stop and Shop Grocery store. The other property, Cos Cob Plaza, located on East Putnam Avenue in Greenwich, Connecticut, contains 15,000 square feet of GLA. At July 1, 2013, the property was 67% leased to six tenants whose primary businesses are the sale of retail products, goods and services.

The Greenwich Properties are located on Putnam Avenue (US Route 1) in Greenwich, Fairfield County, Connecticut. The Greenwich Properties were purchased from a Greenwich based family that had built the properties and held them for over 40 years. There are approximately 70,000 people within 3 miles earning an average household income of $168,000. Daily traffic counts for both retail sites are almost identical at 21,000 vehicles/day. The potential development of new retail centers along Route 1 in Greenwich is limited due to a lack of developable land and a difficult and complex entitlement process for new development.

Tenants:

The Greenwich Commons property is shadow anchored by a Stop and Shop Supermarket. Its largest tenants are Cosi, a national restaurant chain, JP Morgan Chase Bank, and Go Figure, a woman's fitness studio, each occupying 2,400 square feet (25% of the property's GLA). No other tenant leases more than 14% of the property's GLA.

Cos Cob Plaza's largest tenant is national men's clothier Jos A. Bank, occupying 4,000 square feet (27% of the property's GLA). No other tenant accounts for more than 15% of the GLA. There is currently 4,900 square feet of GLA that is vacant. The Company believes it will be able to lease this vacant space in due course.

Substantially all the leases are with tenants for terms longer than one year and generally provide for additional rental amounts based on each tenant's share of the cost of maintaining common areas and certain operating expenses including real estate taxes and insurance of the property and percentage of gross sales rent.

The following is a schedule of lease expirations of the property by year:

                                             Number of
                                               Tenants       Total Square
                                           Whose Lease            Footage           Minimum        % of Annual
                                           Expire Each      Expiring Each       Annual Base       Base Rentals
                                                  Year               Year           Rentals                (1)
2013                                                 1              2,400     $     151,000               12.6 %
2014                                                 1                800            21,000                1.8 %
2015                                                 3              5,600           376,000               31.3 %
2016                                                 1              1,200            52,000                4.4 %
2017                                                 1              2,300           134,000               11.2 %
Thereafter                                           4              7,700           466,000               38.7 %
                                                    11             20,000     $   1,200,000                100 %

(1) Based on 2013 annualized base rents.


Building and Capital Improvements:

The estimated federal tax basis of the Greenwich Properties (including land) is approximately $18.0 million. For federal income tax purposes, the Greenwich Properties will be depreciated over their estimated useful life (39 years) on a straight line basis.

Property Taxes:

The annual real estate taxes of the Property are approximately $140,000 for the 2013 tax year.

Property Management:

The Company manages the Greenwich Properties directly.

After reasonable inquiry, the Company is not aware of any other material factors relating to the Greenwich Properties that would cause the reported financial information not to be necessarily indicative of future operating results.

The Company and its operations are, however, subject to a number of risks and uncertainties. For a discussion of such risks, see the risks identified in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2012 under Item 1A Risk Factors and in the other reports filed by the Company with the Securities and Exchange Commission.



ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

(b) Pro Forma Financial Information

(c) Exhibits

23.1 Consent of Independent Auditor


URSTADT BIDDLE PROPERTIES INC.
TABLE OF CONTENTS

Item 9.01

Financial Statements and Exhibits

(a) Financial Statements Page

Village Shopping Center (New Providence Property):

Independent Auditors' Report 7

Statement of Revenues and Certain Expenses of The Village Shopping Center For the Year Ended December 31, 2012 (Audited) and For the Six Months Ended June 30, 2013 (Unaudited) 8

Notes to Statement of Revenues and Certain Expenses of Village Shopping Center 9

Greenwich Properties:

Independent Auditors' Report 11

Combined Statement of Revenues and Certain Expenses of the Greenwich Properties For the Year Ended December 31, 2012 (Audited) and For the Six Months Ended June 30, 2013 (Unaudited) 12

Notes to Combined Statement of Revenues and Certain Expenses of the Greenwich Properties 13

(b) Pro Forma Financial Information (Unaudited) 15

Pro Forma Consolidated Balance Sheet as of April 30, 2013 16

Pro Forma Consolidated Statement of Income For the year ended October 31, 2012 17

Notes to Unaudited Pro Forma Financial Information 18

Pro Forma Consolidated Statement of Income For the six months ended April 30, 2013 20

Notes to Unaudited Pro Forma Financial Information 21

Signatures 22

Exhibit Index 23


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders Urstadt Biddle Properties Inc.
Greenwich, Connecticut

We have audited the accompanying financial statement of the property known as Village Shopping Center, ("Village Shopping Center") which is comprised of the statement of revenues and certain expenses for the year ended December 31, 2012, and the related notes to the financial statement.

Management's Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of this financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of the financial statement that is free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on this financial statement 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error.
In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Village Shopping Center's internal controls. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of Village Shopping Center for the year ended December 31, 2012 in accordance with accounting principles generally accepted in the United States of America.

Emphasis-of-Matter

We draw attention to Note 2 to the financial statement, which describes that the accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of Village Shopping Center's revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ PKF O'Connor Davies
A Division of O'Connor Davies, LLP

New York, New York
July 12, 2013


VILLAGE SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
 (in thousands)




                                          For the Six     For the Year
                                         Month Period        Ended
                                             Ended        December 31,
                                         June 30, 2013        2012
                                          (Unaudited)

REVENUES:
Base rents                                      $1,090           $2,271
Escalations                                        445              819
Miscellaneous                                        1                7
                                                 1,536            3,097

CERTAIN EXPENSES:
Real estate taxes                                  330              660
Maintenance and repairs                             88              137
Insurance                                           20               66
Utilities                                           11               17
General and administrative                          15               25
                                                   464              905

EXCESS OF REVENUES OVER CERTAIN EXPENSES        $1,072   $       $2,192

The accompanying notes are an integral part of this financial statement.


VILLAGE SHOPPING CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES

1. BUSINESS AND ORGANIZATION

The Village Shopping Center (the "Property") is a grocery anchored retail property located in New Providence, Union County, New Jersey. The Property was owned by N. Providence LLC, a Delaware Limited Liability Company. The Property has an aggregate gross leasable area ("GLA") of approximately 109,000 square feet.

On May 2, 2013, the Property was acquired by Urstadt Biddle Properties Inc., a real estate investment trust, an unaffiliated party (the "Company").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Statement of Revenues and Certain Expenses ("Historical Summary") has been prepared for the purpose of complying with the provisions of Rule 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission ("SEC"), which requires certain information with respect to real estate operations to be included with certain filings with the SEC. The Historical Summary includes the historical revenues and certain expenses of the Property, exclusive of interest income, interest expense, depreciation and amortization, rental income relating to the allocation of purchase price of the property to above/below market leases and management and advisory fees, which may not be comparable to the corresponding amounts reflected in the future operations of the Property.

The statement of revenues and certain expenses for the six month period ended June 30, 2013 is unaudited. In the opinion of management, such statement reflects all adjustments necessary for a fair presentation of revenues and certain expenses in accordance with the SEC Rule 3-14. All such adjustments are of a normal recurring nature.

Real Estate

Significant improvements to real estate which enhance the value are capitalized as additions to the Property cost basis in the period in which the expenditures are incurred. Repairs and maintenance costs are expensed as incurred. Tenant allowances and improvements are capitalized as additions to the Property's cost basis.

Rental Operations

The Property earns rental income from tenants under leasing arrangements which generally provide for minimum rents and charges to tenants for their pro rata shares of real estate taxes and operating expenses. All leases have been accounted for as operating leases. Base rental income is recorded on a straight-line basis over the terms of the related agreements. Escalation rents based on payments for real estate taxes and operating expenses are estimated and accrued.

Use of Estimates

The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires the Property's management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


Accounts Receivable

Bad debts are recorded under the specific identification method, whereby uncollectible receivables are reserved for when identified.

Subsequent Events

The Company has evaluated subsequent events through July 12, 2013, the date on which the Historical Summary was available to be issued.

3. LEASES

Minimum future rentals on non-cancelable leases which extend for more than one year at December 31, 2012 are as follows (in thousands):

     Year Ending
     December 31,

2013            $2,167
2014             2,057
2015             2,027
2016             1,886
2017             1,775
Thereafter      12,864
               $22,776

Minimum rentals above do not include recoveries of operating expenses and real estate taxes, or percentage rents. Such amounts are reflected in the statement of revenues and certain expenses as escalations and percentage rent revenues.

For the year ended December 31, 2012, base rent includes approximately $994,000 (44% of total base rent in 2012) received from a tenant who currently occupies 46,000 square feet of space and $217,000 (9.6% of total base rent in 2012) received from a tenant who currently occupies 9,600 square feet of space.

Rental income includes the effect of amortizing the aggregate minimum lease payments on a straight-line basis over the entire term of each lease, which resulted in a decrease in rental income of approximately $27,000 and $20,000 for the year ended December 31, 2012 and six months ended June 30, 2013, respectively.


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders Urstadt Biddle Properties Inc.
Greenwich, Connecticut

We have audited the accompanying combined financial statement of the Greenwich Properties, which is comprised of the combined statement of revenues and certain expenses for the year ended December 31, 2012, and the related notes to the combined financial statement.

Management's Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of this combined financial statement in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of the combined financial statement that is free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on this combined financial statement 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 combined financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statement. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the combined financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the combined financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Greenwich Properties' internal controls.
Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the combined financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Greenwich Properties for the year ended December 31, 2012 in accordance with accounting principles generally accepted in the United States of America.

Emphasis-of-Matter

We draw attention to Note 2 to the combined financial statement, which describes that the accompanying combined financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Greenwich Properties revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ PKF O'Connor Davies
A Division of O'Connor Davies, LLP

New York, New York
July 12, 2013


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