SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) NOVEMBER 1, 2001
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WASHINGTON REAL ESTATE INVESTMENT TRUST
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(Exact name of registrant as specified in its charter)
Maryland 1-6622 53-0261100
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification Number)
6110 Executive Boulevard, Rockville, Maryland 20852
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (301) 984- 9400
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The undersigned registrant, in order to provide the financial
statements required to be included in the Current Report on Form 8-K dated
November 1, 2001 in connection with the acquisition of certain assets and the
issuance of additional shares via an equity offering to pay for the acquisition
of One Central Plaza, hereby amends the following items, as set forth in the
pages attached hereto.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
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1. One Central Plaza - Audited Historical Summary of Gross
Income and Direct Operating Expenses for the year ended
December 31, 2000.
In acquiring One Central Plaza, WRIT evaluated among other
things, sources of revenue (including but not limited to,
competition in the rental market, comparative rents and occupancy
rates) and expenses (including but not limited to, utility rates,
ad valorem tax rates, maintenance expenses and anticipated
capital expenditures). After reasonable inquiry, management is
not aware of any material factors affecting One Central Plaza
that would cause the reported financial information not to be
indicative of One Central Plaza's future operating results.
(b) Pro Forma Financial Information
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The following pro forma financial statements for a substantial
majority of the assets acquired by WRIT in 2001 (as defined in
Regulation S-X) are filed as an exhibit hereto:
1. WRIT Unaudited Pro Forma Condensed and Consolidated Balance
Sheet as of September 30, 2001.
2. WRIT Unaudited Pro Forma Condensed and Consolidated
Statements of Operations for the year ended December 31,
2000 and the nine months ended September 30, 2001.
(c) Exhibits
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23. Consent of Auditors
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 thereunto duly authorized.
WASHINGTON REAL ESTATE INVESTMENT TRUST
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(Registrant)
By: /s/ Laura M. Franklin
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(Signature)
Laura M. Franklin
Managing Director,
Accounting, Administration and
Corporate Secretary
January 15, 2002
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(Date)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Washington Real Estate Investment Trust
We have audited the accompanying Historical Summary of Gross Income and Direct
Operating Expenses of One Central Plaza ("Historical Summary") for the year
ended December 31, 2000. This Historical Summary is the responsibility of the
Building's management. Our responsibility is to express an opinion on the
Historical Summary 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 Historical
Summary is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the Historical
Summary. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission as
described in Note 2, and is not intended to be a complete presentation of the
Building's revenue and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income and direct operating expenses described in
Note 2 of One Central Plaza for the year ended December 31, 2000, in conformity
with accounting principles generally accepted in the United States of America.
ARGY, WILTSE & ROBINSON, P.C.
McLean, Virginia
November 27, 2001
ONE CENTRAL PLAZA
HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2000
Gross income:
Base rents $ 6,064,938
Expense recoveries 179,448
Other 36,046
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Total gross income $ 6,280,432
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Direct operating expenses:
Insurance $ 19,713
Real estate taxes 418,228
Repairs and maintenance 877,343
Utilities 658,408
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Total direct operating expenses $ 1,973,692
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The accompanying notes are an integral part of this historical summary.
ONE CENTRAL PLAZA
NOTES TO HISTORICAL SUMMARY OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
DECEMBER 31, 2000
NOTE 1 - NATURE OF BUSINESS
One Central Plaza is a twelve-story building located in Rockville, Maryland,
containing approximately 269,000 rentable square feet. The operations of One
Central Plaza consist of leasing office space to various tenants.
Expenses recoveries represent operating expenses, including real estate taxes,
billed to the tenants and are recognized in the period the expenses are
incurred.
All leases are classified as operating leases and expire at various dates prior
to 2010. The following is a schedule by years of future minimum rents receivable
on noncancelable operating leases in effect as of December 31, 2000:
2001 $ 5,953,350
2002 5,488,061
2003 5,141,796
2004 4,715,438
2005 3,186,949
Thereafter 7,412,513
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$ 31,898,107
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During the year ended December 31, 2000, one tenant accounted for approximately
23% of the total base rents.
NOTE 2 - BASIS OF PRESENTATION
Washington Real Estate Investment Trust purchased One Central Plaza in April
2001. The Historical Summary has been prepared for the purpose of complying with
Regulation S-X, Rule 3-14 of the Securities and Exchange Commission ("SEC"),
which requires certain information with respect to real estate operations
acquired to be included with certain filings with the SEC. This Historical
Summary includes the historical gross income and direct operating expenses of
One Central Plaza, exclusive of the following expenses which may not be
comparable to the proposed future operations:
(a) Interest expense on existing mortgages and borrowings
(b) Depreciation of property and equipment
(c) Management and leasing fees
(d) Certain corporate and administrative expenses
(e) Provisions for income taxes
WASHINGTON REAL ESTATE INVESTMENT TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The pro forma balance sheet as of September 30, 2001 presents consolidated
financial information as if the acquisition of the Properties had taken place on
December 31, 2000. The pro forma statements of operations for the year ended
December 31,2000 present combined financial information as if the acquisition of
the Properties had taken place as of January 1, 2000.
WRIT purchased One Central Plaza on April 19, 2001.
The pro forma statements of operations show earnings in the amount of
$45,107,000 and $36,817,000 for the year ended December 31, 2000 and the nine
months ended September 30, 2001, respectively, after giving effect to certain
pro forma adjustments required to reflect the operating results as if the
Properties had been acquired as of January 1, 2000.
WASHINGTON REAL ESTATE INVESTMENT TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001
(In thousands)
PRO
FORMA PRO
REGISTRANT ADJ'S FORMA
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Assets
Real estate at cost $ 746,858 $ - $ 746,858
Accumulated depreciation (116,463) - (116,463)
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Total Investment in Real Estate 630,395 - 630,395
Cash and cash equivalents, receivables,
net of Allowance for doubtful accounts 43,658 - 43,658
Prepaid Expenses and Other Assets 20,748 - 20,748
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Total Assets $ 694,801 $ - $ 694,801
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Liabilities
Senior notes payable $ 265,000 $ - $ 265,000
Mortgage notes payable 85,641 - 85,641
Accounts payable and other liabilities 11,776 - 11,776
Advance Rents 2,791 - 2,791
Tenant security deposits 6,071 - 6,071
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371,279 - 371,279
Minority Interest 1,594 - 1,594
Shareholders' Equity
Shares of beneficial interest, $0.01 par value 387 - 387
Additional paid in capital 321,541 - 321,541
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Total Shareholders' equity 321,928 - 321,928
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Total Liabilities & shareholders' equity $ 694,801 $ - $ 694,801
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(1) No adjustments are necessary for One Central Plaza because the property was
acquired prior to September 30, 2001. The property acquisition and operating
activities are already reflected in WRIT's Balance Sheet as of September 30,
2001. The contract purchase price for One Central Plaza was paid through an
equity offering.
WASHINGTON REAL ESTATE INVESTMENT TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(In thousands, except per share amounts)
PRO
FORMA PRO
REGISTRANT ONE CENTRAL PLAZA ADJ'S FORMA
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Real Estate Revenue $ 134,732 $ 6,280 $ 399 (3) # $ 141,411
Real Estate Expenses (38,316) (1,974) (195)(1) - (40,485)
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96,416 4,307 204 - 100,926
Depreciation (22,723) - (976)(2) - (23,699)
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Income From Real Estate 73,693 4,307 (771) - 77,227
Other Income (Expense)
Investment Income 943 - - - 943
Interest Expense (25,531) - - - (25,531)
General and Administrative (7,533) - - - (7,533)
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Net Income $ 41,572 $ 4,307 $ (771) # $ 45,106
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Net Income Per Share $ 1.16 $ 1.19
(1) Property Management Fees based on rate schedule paid by Registrant.
(2) Depreciation over 40 years, based upon the portion of the purchase price
allocated to building and improvements.
(3) Garage rent from monthly parking based on Registrants contract in place with
parking management company.
(4) On April 24, 2001 WRIT completed a public offering of 2,300,000 Shares of
Beneficial Interest priced at $22.15 per share. $43.0 million of the $48.2
million net proceeds form the sale of shares was used to repay the $43.0 million
of borrowing on April 19, 2001 for the acquisition of One Central Plaza.
WASHINGTON REAL ESTATE INVESTMENT TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
(In thousands, except per share amounts)
PRO
FORMA PRO
REGISTRANT ONE CENTRAL PLAZA ADJ'S FORMA
----------- ----------------- ---------- ------------
Real Estate Revenue $ 110,618 $ 2,181 $ 117 (3) $ 112,916
Real Estate Expenses (31,805) (675) (64)(1) (32,544)
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78,813 1,506 53 80,372
Depreciation (19,157) - (393)(2) (19,550)
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Income From Real Estate 59,656 1,506 (340) 60,822
Other Income (Expense)
Investment Income 714 - - 714
Interest Expense (20,178) - - (20,178)
General and Administrative (4,541) - - (4,541)
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Net Income $ 35,651 $ 1,506 $ (340) $ 36,817
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Net Income Per Share $ 0.96 $ 0.96
(1) Property Management Fees based on rate schedule paid by Registrant.
(2) Depreciation over 40 years, based upon the portion of the purchase price
allocated to building and improvements.
(3) Garage rent from monthly parking based on Registrants contract in place with
parking management company.
(4) On April 24, 2001 WRIT completed a public offering of 2,300,000 Shares of
Beneficial Interest priced at $22.15 per share. $43.0 million of the $48.2
million net proceeds form the sale of shares was used to repay the $43.0 million
of borrowing on April 19, 2001 for the acquisition of One Central Plaza.
(5) The pro forma amounts were derived by annualizing 164 days of actual results
in 2001 and prorating for nine months.