SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDMENT NO. 1
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 7, 2005
URSTADT BIDDLE PROPERTIES INC.
(Exact name registrant as specified in charter)
Maryland 1-12803 04-2458042
(State or jurisdiction (Commission file (IRS Employer
or incorporation) number) Identification No.)
321 Railroad Avenue Greenwich, Connecticut 06830
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (203) 863-8200
1
ITEM 2.01 - COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On January 7, 2005, two wholly-owned subsidiaries of Urstadt Biddle Properties
Inc., (the "Company") purchased The Dock Shopping Center (the "Property")
located in Stratford, Connecticut from The Dock Incorporated (the "Seller"). The
purchase price was approximately $50,250,000 (excluding closing costs, fees and
other expenses of approximately $ 750,000).
The Property was acquired pursuant to Purchase and Sale Agreements dated
January 6, 2005, between the Seller and the Company. There is no relationship
between any Director or Officer of the Company and Seller.
Registrant funded the purchase with cash of $32,750,000 and borrowings under the
Company's secured revolving bank credit line of $17,500,000. Such borrowings
accrue interest at a variable rate of 4.125% per annum.
Material Factors Considered by the Company:
Market and Competition:
Prior to acquiring the Property, the Company considered general regional and
local economic market conditions and the Property's competitive posture within
that market.
The Property acquired is a shopping center located in the Town of Stratford,
Fairfield County, Connecticut. The Property contains 268,300 square feet of
gross leasable area ("GLA") and is situated on 29 acres of land. At January 7,
2005, the Property was 97% leased to sixteen tenants whose primary businesses
are the sale of retail products, goods and services. The Property also includes
a 192 slip marina which will be leased to the former owner under a triple net
lease for 1 year.
The Property is located within the highest area of retail concentration in
Stratford near Route 1 a major interstate highway. The retail market of
Stratford, Connecticut consists primarily of the Property and two shopping
centers in the area. One shopping center is anchored by Walmart, Home Depot and
Shaws; the second shopping center is anchored by a national retailer and a movie
theater. The surrounding area has a dense residential population.
The Property was built in 1970 and expanded in 1986. The Property is located in
a predominantly residential area in the town of Stratford, Fairfield County,
Connecticut. Stratford and within five miles has a population of approximately
188,000 with a median household income of approximately $72,050.
Tenants:
The Property's largest tenant is Stop & Shop, a subsidiary of Ahold Corporation,
a national retail grocery chain occupying 60,461 square feet (22.5% of the
Property's GLA). Stop & Shop also guarantees the rental income on 99,905 square
feet of GLA (37.2% of the Property's GLA) which was previously occupied by a
Bradlees department store. The guarantee expires in 2016. The space is currently
vacant. No other tenant leases more than 10% 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.
2
The following is a schedule of lease expirations of the property by year:
Number of
Tenants Whose Total Square
Leases Expire Footage Minimum Annual
Each Year Expiring Base Rentals % of Annual Base
Each Year Rentals (1)
----------------- -------------- ----------------- ------------------
Year:
2005 1 2,435 $ 48,700 1.3%
2006 4 25,199 611,243 16.2%
2007 2 25,743 445,089 11.8%
2008 4 86,377 1,464,682 38.9%
2009 1 2,000 36,000 1.0%
2010 2 15,890 321,128 8.5%
2011 1 1,600 36,800 1.0%
2012 - - - -
2013 - - - -
2014 - - - -
Thereafter 1 99,905 802,918 21.3%
- ------ ------- -----
16 259,149 $3,766,560 100.0%
== ======= ========== ======
(1) Based on 2005 annualized base rents.
Building and Capital Improvements:
The estimated federal tax basis of the Property (including land) is
approximately $51,000,000. 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 approximately $840,000 for the
2005 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 Property that would cause the reported financial information not
to be necessarily indicative of future operating results.
3
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(b) Pro Forma Financial Information
(c) Exhibits
10.1 Purchase and Sale Agreement between UB Railside, LLC and The
Dock, Incorporated.
10.2 Purchase and Sale Agreement between UB Dockside, LLC and The
Dock, Incorporated.
23.1 Consent of Independent Registered Public Accounting Firm
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 hereunto duly authorized.
URSTADT BIDDLE PROPERTIES INC.
(Registrant)
Date: March 10, 2005 By: /s/ James R. Moore
---------------------
James R. Moore
Executive Vice President and
Chief Financial Officer
4
URSTADT BIDDLE PROPERTIES INC.
TABLE OF CONTENTS
Item 9.01
Financial Statements, and Exhibits Page
(a) Financial Statements
Report of Independent Registered Public Accounting Firm 6
Statement of Revenues and Certain Expenses of The Dock
Shopping Center For the Year Ended December 31, 2004. 7
Notes to Statement of Revenues and Certain Expenses of
The Dock Shopping Center For the Year Ended December 31, 2004 8
(b) Pro Forma Financial Information (Unaudited)
Pro Forma Consolidated Balance Sheet as of October 31, 2004 11
Pro Forma Consolidated Statement of Income
For the year Ended October 31, 2004 12
Notes and Managements Assumptions to Pro Forma Consolidated
Financial Statements 13
(c) Exhibits
10.1 Purchase and Sale Agreement between UB Railside, LLC and The Dock,
Incorporated.
10.2 Purchase and Sale Agreement between UB Dockside, LLC and The Dock,
Incorporated.
23.1 Consent of Independent Registered Public Accounting Firm
5
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Management of Urstadt Biddle Properties Inc.:
We have audited the accompanying Statement of Revenues and Certain Expenses of
The Dock Shopping Center, as described in Note 1, for the year ended December
31, 2004. The financial statement is the responsibility of the management of
Urstadt Biddle Properties Inc. Our responsibility is to express an opinion on
this financial statement based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 Revenues and Certain Expenses of The Dock Shopping
Center was prepared for the purpose of complying with Rule 3-14 of Regulation
S-X of the Securities and Exchange Commission for inclusion in Form 8-K and is
not intended to be a complete presentation of the revenues and expenses of the
property acquired.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the Revenues and Certain Expenses of The Dock Shopping
Center, as described in Note 1, for the year ended December 31, 2004 in
conformity with U.S. generally accepted accounting principles.
New York, New York Ernst & Young LLP
March 10, 2005
6
THE DOCK SHOPPING CENTER
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2004
(in thousands)
REVENUES:
Base rents, including revenue from related party of $106 $ 3,256
Percentage rent 205
Escalations, including revenue from related party of $55 1,729
Other 95
--
5,285
-----
CERTAIN OPERATING EXPENSES:
Real estate taxes 849
Maintenance and repairs, including expenses to related party of $449 682
Insurance 175
Utilities 179
General and administrative 6
-
1,891
-----
EXCESS OF REVENUES OVER CERTAIN OPERATING EXPENSES $3,394
======
The accompanying notes are an integral part of this financial statement.
7
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2004
1. BUSINESS AND ORGANIZATION
The Dock Shopping Center (the "Property") is a retail property located in the
Town of Stratford, Fairfield County, Connecticut. The Property is owned by The
Dock, Incorporated, a Subchapter S Corporation. The Property, which consists of
two shopping centers has an aggregate gross rentable area of approximately
268,000 square feet. The Property also includes a 192 slip marina.
On January 7, 2005, 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 accompanying financial statement includes the accounts of The Dock Shopping
Center ("the Property"). The accompanying financial statement was prepared in
conformity with Rule 3-14 of Securities and Exchange Commission Regulation S-X.
Accordingly, the financial statement is not representative of the actual
operations for the periods presented, as certain expenses, which may not be
comparable to the expenses expected to be incurred in the future operations of
the acquired property, have been excluded. Expenses excluded consist of
depreciation and amortization, leasing expenses, interest expense, and certain
other expenses not directly related to the future operations of the Property.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to those rules and regulations, although the Company
believes that the disclosures made are adequate to make the information not
misleading.
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts and disclosures during the
reporting period. Actual results could differ from those estimates.
Real Estate
Significant improvements to real estate which enhance the value are capitalized
as additions to the property's 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, escalations 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. Percentage rent is recognized when a specific tenant's sales breakpoint
is achieved.
8
3. LEASES
Minimum future rentals on noncancelable leases which extend for more than one
year at December 31, 2004 are as follows:
Year Ending
December 31,
2005 $3,315,000
2006 3,204,000
2007 3,151,000
2008 1,618,000
2009 1,253,000
Thereafter 6,444,000
---------
$18,985,000
Minimum rentals above do not include recoveries of operating expenses, real
estate taxes, or percentage rents. Such amounts are reflected in the statement
of revenues and certain operating expenses as escalations and percentage rent
revenues. For the year ended December 31, 2004, percentage rent income of
$205,000 represents percentage rent received from Stop & Shop, a tenant who
leases more than 10% of the Property's GLA.
For the year ended December 31, 2004, base rent includes approximately
$1,700,000 (52% of total base rent in 2004) received from Stop & Shop, a tenant
who currently occupies 60,461 square feet of space and guarantees the rent on
another 99,905 square feet of space at the Property which is currently vacant.
4. RELATED PARTY TRANSACTIONS
During the year ended December 31, 2004, The Property paid maintenance costs to
Connecticut Coal, Inc. a related entity. The Property also reimbursed
Connecticut Coal, Inc. for operating expenses paid on its behalf. Such expenses
amounted to $449,000 in the year ended December 31, 2004.
For the year ended December 31, 2004, the Property received revenues of $161,000
from the Marina at the Dock Inc., a related entity, for the rental of the 192
slip marina.
9
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following pro forma information reflects the acquisition of The Dock
Shopping Center (The "Property") on January 7, 2005, and the sale of Bi-County
Shopping Center on November 15, 2004 by Urstadt Biddle Properties Inc. (the
"Company").
The Pro Forma Consolidated Balance Sheet as of October 31, 2004 and the Pro
Forma Consolidated Statement of Income for the year ended October 31, 2004 have
been prepared to reflect the acquisition transaction, the sale transaction and
the adjustments described in the accompanying notes. The historical financial
statements of The Property are for the year ended December 31, 2004. The pro
forma financial information is based on the historical financial statements of
the Company and should be read in conjunction with the notes and management's
assumptions thereto. The pro forma consolidated balance sheet was prepared as if
the acquisition of The Property and the sale of Bi-County Shopping Center
occurred on October 31, 2004. The pro forma consolidated statements of income
for the year ended October 31, 2004 were prepared assuming the purchase and sale
occurred on November 1, 2003. The pro forma financial information is unaudited
and not necessarily indicative of the actual financial position of the Company
as of October 31, 2004 or what the actual results would have been assuming the
acquisition and sale transactions had been consummated at the beginning of the
periods presented, nor does it purport to represent the future financial
position and results of operations for future periods.
10
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 31, 2004
(UNAUDITED)
(in thousands)
Company Pro Forma Company
ASSETS Historical (a) Adjustments Pro Forma
Real Estate Investments:
Core properties - at cost $381,937 $51,000 (b) $432,937
Non-core properties - at cost 20,621 20,621
Less: accumulated depreciation (61,389) - (61,389)
-------- ---------- ------------
341,169 51,000 392,169
Mortgage Notes Receivable 2,109 ______ 2,109
----- ----- ------------
343,278 51,000 394,278
Property held for sale 4,002 (4,002) (c) -
Cash and cash equivalents 25,940 (23,750) (b) 2,190
Restricted cash 1,184 1,184
Marketable securities 2,681 2,681
Tenant receivables 11,249 11,249
Deferred charges, net of accumulated amortization 3,280 3,280
Prepaid expenses and other assets 3,303 3,303
------ ----- -----
Total Assets $394,917 $23,248 $418,165
======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Bank loans $ - $17,500 (b) $ 17,500
Mortgage notes payable 107,443 107,443
Accounts payable and accrued expenses 1,515 1,515
Deferred officers' compensation 501 501
Other liabilities 3,617 3,617
----- ---- -----
Total Liabilities 113,076 17,500 130,576
------- ------ -------
Minority Interests 7,320 7,320
----- -----
Preferred Stock 52,747 52,747
------ ------
Commitments and Contingencies
Stockholders' Equity:
Common Stock 72 72
Class A Common Stock 186 186
Additional paid in capital 264,680 264,680
Cumulative distributions in excess of net income (36,581) 5,748 (c) (30,833)
Accumulated other Comprehensive income 472 472
Unamortized restricted stock compensation and officer
notes receivable (7,055) (7,055)
------- _____ -------
Total Stockholders' Equity 221,774 5,748 227,522
------- ----- -------
Total Liabilities and Stockholders' Equity $394,917 $23,248 $418,165
======== ======= ========
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated balance sheet.
11
URSTADT BIDDLE PROPERTIES INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED OCTOBER 31, 2004
(UNAUDITED)
(in thousands, except per share data)
Company The Dock Pro Forma Company
Historical (a) Center (b) Adjustments Pro Forma
Revenues:
Operating leases $63,514 $5,285 $ 532 (c)(d) $69,331
Lease termination income 577 - 577
Interest and other 825 - ` - 825
--- ------- ---------- ---
64,916 5,285 532 70,733
------ ----- ----- ------
Operating Expenses:
Property expenses 18,765 1,891 (20) (e) 20,636
Interest 8,113 - 722 (f) 8,835
Depreciation and amortization 11,094 - 1,046 (g) 12,140
General and administrative expenses 3,416 - 3,416
Directors' fees and expenses 207 - - 207
--- ----- ------ ------
41,595 1,891 1,748 45,234
------ ----- ----- ------
Operating Income 23,321 3,394 (1,216) 25,499
Minority Interests (367) - - (367)
----- ------ ------ -----
Income from Continuing Operations 22,954 3,394 (1,216) 25,132
Preferred Stock Dividends (4,749) - (4,749)
------- --------- ------ -------
Net Income from Continuing Operations Applicable
to Common and
Class A Common Stockholders $18,205 $3,394 $(1,216) $20,383
======= ====== ======== =======
Basic Earnings per Share:
Net Income fron Continuing Operations
Applicable to Common Stockholders $0.70 $0.77
===== =====
Net Income from Continuing Operations
Applicable to Class A Common
Stockholders $0.77 $0.85
===== =====
Diluted Earnings Per Share:
Net Income from Continuing Operations
Applicable to Common Stockholders $0.69 $0.75
===== =====
Net Income from Continuing Operations
Applicable to Class A Common Stockholders $0.76 $0.83
===== =====
The accompanying notes and management's assumptions are an integral part of this
pro forma consolidated statement of income.
12
URSTADT BIDDLE PROPERTIES INC.
NOTES AND MANAGEMENT ASSUMPTIONS
TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED OCTOBER 31, 2004
(UNAUDITED)
ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET:
(a) Derived from the Company's audited financial statements at October
31, 2004.
(b) Reflects the pro forma acquisition of The Property for $51,000,000
(including estimated transaction costs of approximately $750,000). It is
assumed that the Company utilized cash and cash equivalents of
$23,750,000, proceeds from the sale of its Bi-County property of
$9,750,000 and borrowings on the Company's revolving credit line of
$17,500,000 as if the acquisition had been made on October 31, 2004. The
Company intends to account for the acquisition of the property in
accordance with SFAS 141 and 142. The Company is currently
in the process of analyzing the fair value of in-place leases and,
consequently, no value has yet been assigned to the leases. Accordingly,
the purchase price allocation is preliminary and may be subject to
change.
(c) Reflects the pro forma sale of The Bi-County Shopping Center for a
sale price of $9,750,000 resulting in an estimated gain on sale of
$5,748,000 as if the transaction occurred on October 31, 2004.
ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENTS OF INCOME:
(a) Derived from the Company's audited financial statements for the year
ended October 31, 2004.
(b) Reflects revenues and operating expenses as reported by The Property
for the year ended December 31, 2004.
(c) Reflects the pro forma adjustment of $443,000 to record operating
rents on a straight line basis.
(d) Reflects the pro forma adjustment of $250,000 to record net lease
rents related to the marina operations and reductions of rents of
$161,000 to reflect the gross rental of the marina parcel.
(e) Reflects a reduction in property expenses relating to the marina.
(f) Reflects pro forma interest on credit line borrowings of $17,500,000
as if the borrowings were made on November 1, 2003. Interest on the
credit line borrowings is at variable rate using a weighted average
rate of 4.125% outstanding during the period.
(g) Reflects depreciation expense of $1,046,000 for the year ended
October 31, 2004 for The Property based on a 39 year estimated
useful life for the property's building and improvements using a
cost basis of $40,800,000 (the remaining purchase price is assumed
to be allocated to land) as if the property had been owned for the
entire period.
13