UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): September 27, 2011
INLAND DIVERSIFIED REAL ESTATE TRUST, INC.
(Exact Name of Registrant as Specified in its Charter)
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Maryland |
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000-53945 |
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26-2875286 |
2901 Butterfield Road
Oak Brook, Illinois 60523
(Address of Principal Executive Offices)
(630) 218-8000
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Inland Diversified Real Estate Trust, Inc. (which may be referred to as the “Registrant,” the “Company,” “we,” “our,” and “us”) hereby amends its Current Report on Form 8-K filed on August 24, 2011 to provide the required financial information relating to our acquisition of a 264,976 square foot retail shopping center and a 32,192 square foot retail outparcel shopping center located in Evans, Georgia, together known as “Mullins Crossing,” as described in that Current Report.
Item 9.01. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
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Page |
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Mullins Crossing |
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F-1 | |
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F-2 | |
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F-3 |
(b) Pro forma financial information
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Page |
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Pro Forma Consolidated Balance Sheet as of June 30, 2011 (unaudited) |
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F-6 |
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Notes to Pro Forma Consolidated Balance Sheet as of June 30, 2011 (unaudited) |
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F-8 |
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F-9 | |
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F-11 | |
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F-12 | |
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F-14 |
SIGNATURE
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.
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INLAND DIVERSIFIED REAL ESTATE TRUST, INC. | |
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Date: |
September 27, 2011 |
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By: |
/s/ Steven T. Hippel |
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Name: |
Steven T. Hippel |
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Title |
Chief Accounting Officer |
Index to Financial Statements
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Page |
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Mullins Crossing |
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F-1 | |
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F-2 | |
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F-3 | |
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Pro Forma Financial Information |
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Pro Forma Consolidated Balance Sheet as of June 30, 2011 (unaudited) |
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F-6 |
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Notes to Pro Forma Consolidated Balance Sheet as of June 30, 2011 (unaudited) |
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F-8 |
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F-9 | |
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F-11 | |
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F-12 | |
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F-14 |
The Board of Directors
Inland Diversified Real Estate Trust, Inc.:
We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses (Historical Summary) of Mullins Crossing (the Property) for the year ended December 31, 2010. This Historical Summary is the responsibility of management of Inland Diversified Real Estate Trust, Inc. 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 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 the Property’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 Historical Summary, 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 and for the inclusion in a Form 8-K/A of Inland Diversified Real Estate Trust, Inc., to be filed with the Securities and Exchange Commission, as described in note 2. It is not intended to be a complete presentation of the Property’s revenues 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 Mullins Crossing for the year ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.
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/s/ KPMG LLP |
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September 19, 2011 |
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MULLINS CROSSING
Historical Summary of Gross Income and
Direct Operating Expenses
Six Month Period ended June 30, 2011 (unaudited)
and Year ended December 31, 2010
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Six months |
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ended |
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Year ended |
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June 30, 2011 |
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December 31, |
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(unaudited) |
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2010 |
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Gross income: |
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Base rental income |
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$ |
1,609,916 |
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$ |
3,258,032 |
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Operating expense, insurance, and real estate tax recoveries |
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225,057 |
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494,172 |
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Total gross income |
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1,834,973 |
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3,752,204 |
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Direct operating expenses: |
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Operating expenses |
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199,710 |
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396,810 |
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Insurance |
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17,678 |
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34,573 |
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Interest expense |
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622,732 |
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1,263,239 |
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Real estate taxes |
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140,935 |
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281,869 |
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Rental expense |
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45,284 |
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89,909 |
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Total direct operating expenses |
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1,026,339 |
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2,066,400 |
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Excess of gross income over direct operating expenses |
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$ |
808,634 |
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$ |
1,685,804 |
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See accompanying notes to historical summary of gross income and direct operating expenses.
MULLINS CROSSING
Historical Summary of Gross Income and
Direct Operating Expenses
Six Month Period ended June 30, 2011 (unaudited)
and Year ended December 31, 2010
(1) Business
Mullins Crossing (the Property) is located in Evans, Georgia. The Property has approximately 282,000 square feet (unaudited) of gross leasable area excluding square footage associated with ground leases and was approximately 98% leased at December 31, 2010. The Property is leased to a total of 27 tenants. Inland Diversified Real Estate Trust, Inc. (IDRETI), through its wholly owned subsidiaries, Inland Diversified Evans Mullins Crossing, L.L.C. and Inland Diversified Evans Mullins Outlots, L.L.C., acquired the Property on August 18, 2011 from Mullins Crossing, LLC, and Mullins Crossing Out Parcel, LLC, unaffiliated third parties.
(2) Basis of Presentation
The Historical Summary of Gross Income and Direct Operating Expenses (Historical Summary) has been prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission (SEC) Regulation S-X and for inclusion in the Form 8-K/A of IDRETI to be filed with the SEC and is not intended to be a complete presentation of the Property’s revenues and expenses. The Historical Summary has been prepared on the accrual basis of accounting and requires management of the Property to make estimates and assumptions that affect the reported amounts of the revenues and expenses during the reporting period. Actual results may differ from those estimates.
The unaudited Historical Summary for the six months ended June 30, 2011 has been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. Accordingly, it does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management of IDRETI, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The Historical Summary for the six months ended June 30, 2011 is not necessarily indicative of the expected results for the year ended December 31, 2011.
(3) Gross Income
The Property leases retail space under various lease agreements with its tenants. All leases are accounted for as operating leases. The leases include provisions under which the Property is reimbursed for common area, real estate tax, and insurance expenses. Revenue related to these reimbursed expenses is recognized in the period the applicable expenses are incurred and billed to tenants pursuant to the lease agreements. Certain leases contain renewal options at various periods at various rental rates.
Although certain leases may provide for tenant occupancy during periods for which no rent is due and/or increases exist in minimum lease payments over the term of the lease, rental income accrues for the full period of occupancy on a straight-line basis. Related adjustments decreased base rental income by $39,992 (unaudited) for the six months ended June 30, 2011 and increased base rental income by $1,820 for the year ended December 31, 2010.
(Continued)
MULLINS CROSSING
Historical Summary of Gross Income and
Direct Operating Expenses
Six Month Period ended June 30, 2011 (unaudited)
and Year ended December 31, 2010
Minimum rents to be received from tenants under operating leases, with remaining lease terms ranging from 3 to 15 years, as of December 31, 2010 are as follows:
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Year: |
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2011 |
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$ |
3,268,039 |
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2012 |
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3,077,700 |
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2013 |
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3,077,076 |
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2014 |
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3,051,820 |
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2015 |
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3,017,216 |
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Thereafter |
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10,736,242 |
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$ |
26,228,093 |
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(4) Interest Expense
Inland Diversified Evans Mullins Crossing, L.L.C. assumed the mortgage loan secured by the Property in connection with the acquisition. The mortgage loan had an original principal balance of $23,500,000. As of June 30, 2011 and December 31, 2010, the aggregate balance was approximately $22,300,000 (unaudited) and $22,500,000, respectively. The mortgage loan bears a fixed interest rate of 5.5%, payable in monthly installments of principal and interest, and matures on September 6, 2016.
(5) Direct Operating Expenses
Direct operating expenses include only those expenses expected to be comparable to the proposed future operations of the Property. Repairs and maintenance expenses are charged to operations as incurred. Expenses such as depreciation, amortization and interest expense related to mortgage debt not assumed, and professional fees are excluded from the Historical Summary.
A portion of the Property is subject to a ground lease with an unrelated third party. Minimum rents to be paid pursuant to the ground lease, which has a remaining lease term of 5 years, as of December 31, 2010 are as follows:
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Year: |
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2011 |
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$ |
94,818 |
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2012 |
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94,818 |
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2013 |
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94,818 |
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2014 |
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94,818 |
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2015 |
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47,409 |
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$ |
426,681 |
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(Continued)
MULLINS CROSSING
Historical Summary of Gross Income and
Direct Operating Expenses
Six Month Period ended June 30, 2011 (unaudited)
and Year ended December 31, 2010
(6) Related-Party Transactions
Collett & Associates (Collett), an affiliate of Mullins Crossing Development, L.L.C., provided property management services to the Property. Collett established an agreement with the Property in which the Property would pay a management fee of 5% of collected revenue earned by the Property. The Property incurred management fees of $92,789 (unaudited) and $196,268, which are included in operating expenses for the six month period ended June 30, 2011 and the year ended December 31, 2010, respectively. These management fees may not be comparable to the management fees charged to the Property by IDRETI.
(7) Subsequent Events
Subsequent to December 31, 2010 and through September 19, 2011, the date through which management evaluated subsequent events and on which date the Historical Summary was issued, management did not identify any subsequent events requiring additional disclosure, except as noted below.
In connection with the acquisition on August 18, 2011, Inland Diversified Evans Mullins Outlots, L.L.C. extended the ground lease payable from June, 30, 2015 to June 30, 2065.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
June 30, 2011
(unaudited)
The following unaudited pro forma Consolidated Balance Sheet is presented as if the acquisition and financing had occurred on June 30, 2011.
This unaudited pro forma Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been at June 30, 2011, nor does it purport to represent our future financial position. Pro forma adjustments have been made for the significant property that was purchased and financed subsequent to June 30, 2011. The pro forma adjustments were made for Mullins Crossing.
The Company does not consider any potential property acquisitions to be probable under Rule 3-14 of Regulation S-X.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Balance Sheet
June 30, 2011
(unaudited)
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Pro Forma |
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Historical |
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Adjustments |
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(A) |
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(B) |
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Pro Forma |
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Assets |
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Net investment properties (C) |
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$ |
695,116,137 |
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$ |
35,946,000 |
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$ |
731,062,137 |
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Cash and cash equivalents (E) |
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40,708,137 |
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22,154,119 |
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62,862,256 |
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Restricted cash and escrows |
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1,939,134 |
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— |
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1,939,134 |
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Investment in marketable securities |
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7,637,788 |
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— |
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7,637,788 |
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Investment in unconsolidated entities |
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154,551 |
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— |
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154,551 |
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Accounts and rents receivable, net |
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4,089,967 |
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— |
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4,089,967 |
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Acquired lease intangibles, net (C) (D) |
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122,808,033 |
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5,509,259 |
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128,317,292 |
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Deferred costs, net |
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4,668,599 |
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— |
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4,668,599 |
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Other assets |
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2,250,726 |
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— |
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2,250,726 |
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Total assets |
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$ |
879,373,072 |
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$ |
63,609,378 |
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$ |
942,982,450 |
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Liabilities and Equity |
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Mortgages, credit facility and securities margin payable (C) |
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$ |
460,228,399 |
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$ |
22,002,716 |
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$ |
482,231,115 |
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Accrued offering expenses |
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179,512 |
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— |
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179,512 |
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Accounts payable and accrued expenses (F) |
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2,669,021 |
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5,812 |
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2,674,833 |
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Distributions payable |
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2,011,928 |
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— |
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2,011,928 |
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Accrued real estate taxes payable |
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4,285,235 |
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— |
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4,285,235 |
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Deferred investment property acquisition obligations (C) (G) |
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30,238,880 |
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1,676,118 |
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31,914,998 |
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Other liabilities |
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3,938,324 |
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— |
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3,938,324 |
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Acquired below market lease intangibles, net (C) (D) |
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15,900,204 |
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1,758,678 |
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17,658,882 |
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Due to related parties |
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2,258,657 |
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— |
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2,258,657 |
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Total liabilities |
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521,710,160 |
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25,443,324 |
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547,153,484 |
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Equity: |
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Preferred stock |
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— |
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— |
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— |
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Common stock (H) |
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42,076 |
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3,813 |
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45,889 |
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Additional paid in capital, net of offering costs (H) |
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375,523,100 |
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38,162,241 |
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413,685,341 |
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Accumulated distributions and net loss (I) |
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(22,343,117 |
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— |
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(22,343,117 |
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Accumulated other comprehensive income |
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(9,342 |
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— |
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(9,342 |
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Total company stockholders’ equity |
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353,212,717 |
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38,166,054 |
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391,378,771 |
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Noncontrolling interests |
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4,450,195 |
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— |
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4,450,195 |
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Total equity |
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357,662,912 |
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38,166,054 |
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395,828,966 |
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Total liabilities and equity |
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$ |
879,373,072 |
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$ |
63,609,378 |
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$ |
942,982,450 |
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See accompanying notes to pro forma consolidated balance sheet.
Inland Diversified Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Balance Sheet
June 30, 2011
(unaudited)
(A) The historical column represents the Company’s Consolidated Balance Sheet as of June 30, 2011 as filed with the Securities and Exchange Commission on Form 10-Q.
(B) The pro forma adjustments column includes adjustments related to our significant acquisition or mortgage financing which occurred after June 30, 2011 and are detailed below as follows:
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Mullins |
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Net investment properties |
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$ |
35,946,000 |
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Intangible assets, net |
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$ |
5,509,259 |
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Intangible liabilities, net |
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$ |
1,758,678 |
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Deferred investment property acquisition obligations |
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$ |
1,676,118 |
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Mortgages, credit facility and securities margin payable |
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$ |
22,002,716 |
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(C) The pro forma adjustments reflect the acquisition and mortgage financing of the following property by the Company. No pro forma adjustments have been made for prorations as the amounts are not significant.
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Net assets |
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Mortgages, credit facility, |
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Property |
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acquired |
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and securities margin payable |
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Mullins Crossing |
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$ |
38,020,463 |
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$ |
22,002,716 |
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Allocation of net investments in properties: |
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Land |
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$ |
5,677,000 |
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Building and improvements |
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30,269,000 |
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Acquired lease intangible assets, net |
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5,509,259 |
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Acquired lease intangible liabilities, net |
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(1,758,678 |
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Deferred investment property acquisition obligations |
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(1,676,118 |
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Total |
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$ |
38,020,463 |
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Allocations are preliminary and subject to change.
(D) Acquired intangibles represent above and below market leases and the difference between the property valued with existing in-place leases and the property valued as if vacant. The value of the acquired intangibles will be amortized over the lease term. Allocations are preliminary and subject to change.
(E) Pro forma cash proceeds of $22,154,119 represents the cash received from the issuance of equity and mortgage financings through August 18, 2011 less the pro forma net acquisition price of investments in real estate.
(F) Estimated accrued acquisition related costs for the property acquisition included in (B).
(G) The acquisition described in (B) includes an earnout component to the purchase price, meaning the Company did not pay a portion of the purchase price of the property at closing, although the Company owns the entire property. The earnout component is recorded at the estimated fair value at the date of the property acquisition. The Company is not obligated to pay the contingent purchase price amount unless spaces which were vacant at the time of acquisition are later rented within the time limits and other agreed terms set forth in the acquisition agreement. The earnout payment is based on a predetermined formula applied to rental income received. The earnout agreement has a limited obligation period up to three years from the date of acquisition.
(H) Additional offering proceeds of $38,166,054, net of additional offering costs of $3,402,397, are reflected as received as of June 30, 2011 based on offering proceeds actually received as of August 18, 2011. Offering costs consist principally of registration costs, printing and selling costs, including commissions.
(I) No pro forma adjustments have been made for the additional payment of distributions resulting from the additional proceeds raised by the Company.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the six months ended June 30, 2011
(unaudited)
The following unaudited pro forma Consolidated Statement of Operations and Other Comprehensive Income is presented to give effect to the acquisitions or financings of the properties indicated in Note (B) of the Notes to the pro forma Consolidated Statement of Operations and Other Comprehensive Income as though they occurred on January 1, 2010. Pro forma adjustments have been made for significant properties that were purchased or financed subsequent to December 31, 2010. The pro forma adjustments were made for Northcrest Shopping Center, Prattville Town Center, Landstown Commons, University Town Center, Perimeter Woods, Draper Peaks and Mullins Crossing.
The Company does not consider any potential property acquisitions to be probable under Rule 3-14 of Regulation S-X.
This unaudited pro forma Consolidated Statement of Operations and Other Comprehensive Income is not necessarily indicative of what the actual results of operations would have been for the six months ended June 30, 2011, nor does it purport to represent our future results of operations.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the six months ended June 30, 2011
(unaudited)
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Pro Forma |
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Historical |
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Adjustments |
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(A) |
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(B) |
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Pro Forma |
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Rental income (C) |
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$ |
22,479,435 |
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$ |
8,162,220 |
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$ |
30,641,655 |
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Tenant recovery income |
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5,704,887 |
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1,261,545 |
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6,966,432 |
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Other property income |
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568,841 |
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4,429 |
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573,270 |
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Total income |
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28,753,163 |
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9,428,194 |
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38,181,357 |
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General and administrative expenses |
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1,376,807 |
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— |
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1,376,807 |
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Acquisition related costs |
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1,369,482 |
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— |
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1,369,482 |
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Property operating expenses (D) |
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4,903,609 |
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2,434,464 |
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7,338,073 |
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Real estate taxes |
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3,553,924 |
|
703,347 |
|
4,257,271 |
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Depreciation and amortization (C) |
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11,509,186 |
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4,466,789 |
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15,975,975 |
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Business management fee - related party |
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500,000 |
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— |
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500,000 |
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Total expenses |
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23,213,008 |
|
7,604,600 |
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30,817,608 |
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Operating income |
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5,540,155 |
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1,823,594 |
|
7,363,749 |
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| |||
|
Interest and dividend income |
|
285,505 |
|
— |
|
285,505 |
| |||
|
Realized loss on sale of marketable securities |
|
(13,308 |
) |
— |
|
(13,308 |
) | |||
|
Interest expense (E) |
|
(7,392,230 |
) |
(4,083,657 |
) |
(11,475,887 |
) | |||
|
Equity in loss of unconsolidated entities |
|
27,190 |
|
— |
|
27,190 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
(1,552,688 |
) |
(2,260,063 |
) |
(3,812,751 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Less: net income attributable to noncontrolling interests |
|
(88,730 |
) |
— |
|
(88,730 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net loss attributable to common stockholders |
|
$ |
(1,641,418 |
) |
$ |
(2,260,063 |
) |
$ |
(3,901,481 |
) |
|
|
|
|
|
|
|
|
| |||
|
Net loss income attributable to common stockholders per common share, basic and diluted (F) |
|
$ |
(0.05 |
) |
|
|
$ |
(0.09 |
) | |
|
Weighted average number of common shares outstanding, basic and diluted (F) |
|
34,202,401 |
|
|
|
45,888,672 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Comprehensive income (loss): |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(1,552,688 |
) |
$ |
(2,260,063 |
) |
$ |
(3,812,751 |
) |
|
|
|
|
|
|
|
|
| |||
|
Other comprehensive income: |
|
|
|
|
|
|
| |||
|
Unrealized gain on marketable securities |
|
70,907 |
|
— |
|
70,907 |
| |||
|
Unrealized loss on derivatives |
|
(257,698 |
) |
— |
|
(257,698 |
) | |||
|
Loss reclassified into earnings from other comprehensive income |
|
13,308 |
|
— |
|
13,308 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Comprehensive income (loss) |
|
(1,726,171 |
) |
(2,260,063 |
) |
(3,986,234 |
) | |||
|
Less: comprehensive income attributable to noncontrolling interests |
|
(88,730 |
) |
— |
|
(88,730 |
) | |||
|
Comprehensive loss attributable to common stockholders |
|
$ |
(1,814,901 |
) |
$ |
(2,260,063 |
) |
$ |
(4,074,964 |
) |
See accompanying notes to pro forma consolidated statement of operations and other comprehensive income.
Inland Diversified Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the six months ended June 30, 2011
(unaudited)
(A) The historical column represents the Company’s Consolidated Statement of Operations and Other Comprehensive Income for the six months ended June 30, 2011 as filed with the Securities and Exchange Commission on Form 10-Q.
(B) Total pro forma adjustments for significant acquisitions consummated through the date of this filing are as though the properties were acquired January 1, 2010.
Total income, property operating expenses and real estate taxes for the six months June 30, 2011 is based on information provided by the sellers for Northcrest Shopping Center, Prattville Town Center, Landstown Commons, University Town Center, Perimeter Woods, Draper Peaks and Mullins Crossing.
The pro forma adjustments for the six months ended June 30, 2011 are composed of the following adjustments:
|
|
|
Northcrest |
|
Prattville Town |
|
Landstown |
|
University |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Rental income |
|
$ |
402,274 |
|
$ |
401,517 |
|
$ |
1,535,418 |
|
$ |
849,554 |
|
|
Tenant recovery income |
|
49,339 |
|
57,067 |
|
255,915 |
|
132,416 |
| ||||
|
Other property income |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Total income |
|
451,613 |
|
458,584 |
|
1,791,333 |
|
981,970 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Property operating expenses |
|
68,731 |
|
64,521 |
|
286,725 |
|
144,768 |
| ||||
|
Real estate taxes |
|
15,407 |
|
23,365 |
|
118,486 |
|
82,003 |
| ||||
|
Depreciation and amortization |
|
290,231 |
|
237,506 |
|
845,928 |
|
460,722 |
| ||||
|
Total expenses |
|
374,369 |
|
325,392 |
|
1,251,139 |
|
687,493 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
77,244 |
|
133,192 |
|
540,194 |
|
294,477 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
341,893 |
|
346,239 |
|
729,905 |
|
475,983 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss |
|
$ |
(264,649 |
) |
$ |
(213,047 |
) |
$ |
(189,711 |
) |
$ |
(181,506 |
) |
|
|
|
Perimeter |
|
Draper Peaks |
|
Mullins |
|
Total Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Rental income |
|
$ |
1,877,184 |
|
$ |
1,567,032 |
|
$ |
1,529,241 |
|
$ |
8,162,220 |
|
|
Tenant recovery income |
|
183,876 |
|
357,875 |
|
225,057 |
|
1,261,545 |
| ||||
|
Other property income |
|
— |
|
4,429 |
|
— |
|
4,429 |
| ||||
|
Total income |
|
2,061,060 |
|
1,929,336 |
|
1,754,298 |
|
9,428,194 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Property operating expenses |
|
1,358,746 |
|
257,476 |
|
253,497 |
|
2,434,464 |
| ||||
|
Real estate taxes |
|
74,284 |
|
248,867 |
|
140,935 |
|
703,347 |
| ||||
|
Depreciation and amortization |
|
818,212 |
|
1,096,486 |
|
717,704 |
|
4,466,789 |
| ||||
|
Total expenses |
|
2,251,242 |
|
1,602,829 |
|
1,112,136 |
|
7,604,600 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income (loss) |
|
(190,182 |
) |
326,507 |
|
642,162 |
|
1,823,594 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
907,568 |
|
642,875 |
|
639,194 |
|
4,083,657 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
(1,097,750 |
) |
$ |
(316,368 |
) |
$ |
2,968 |
|
$ |
(2,260,063 |
) |
(C) Investment properties will be depreciated on a straight-line basis based upon estimated useful lives of 30 years for buildings and improvements and 15 years for site improvements. The portion of the purchase price allocated to above or below market lease intangibles will be amortized on a straight-line basis over the life of the related leases as an adjustment to rental income. In-place lease intangibles will be amortized on a straight-line basis over the life of the related leases as a component of amortization expense. The purchase price allocation for pro forma financial statement purposes are preliminary and may be subject to change.
(D) Management fees are calculated as 4.5% of gross revenues pursuant to the new management agreements and are also included in property operating expenses.
(E) The pro forma adjustments relating to incremental interest expense were based on the following debt terms:
|
|
|
Principal Balance |
|
Interest Rate |
|
Maturity Date |
| |
|
Northcrest Shopping Center |
|
$ |
18,720,000 |
|
5.48 |
% |
May 1, 2021 |
|
|
Prattville Town Center |
|
18,890,000 |
|
5.48 |
% |
May 1, 2021 |
| |
|
Landstown Commons - mortgage |
|
68,375,000 |
|
3.24 |
% |
March 24, 2012 |
| |
|
Landstown Commons - credit facility |
|
21,000,000 |
|
4.50 |
% |
October 31, 2012 |
| |
|
University Town Center |
|
22,180,000 |
|
5.48 |
% |
June 1, 2021 |
| |
|
Perimeter Woods |
|
39,390,000 |
|
6.02 |
% |
September 1, 2018 |
| |
|
Draper Peaks |
|
23,905,106 |
|
5.74 |
% |
October 1, 2015 |
| |
|
Mullins Crossing |
|
22,232,585 |
|
5.50 |
% |
September 6, 2016 |
| |
|
|
|
$ |
234,692,691 |
|
|
|
|
|
(F) The pro forma weighted average shares of common stock outstanding for the six months ended June 30, 2011 was calculated assuming all shares sold through August 18, 2011 were issued on January 1, 2010.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the year ended December 31, 2010
(unaudited)
The following unaudited pro forma Consolidated Statement of Operations and Other Comprehensive Income is presented to give effect to the acquisitions or financings of the properties indicated in Note (B) of the Notes to the pro forma Consolidated Statement of Operations and Other Comprehensive Income as though they occurred on January 1, 2010. Pro forma adjustments have been made for the significant properties that were purchased or financed subsequent to December 31, 2010. The pro forma adjustments were made for Northcrest Shopping Center, Prattville Town Center, Landstown Commons, University Town Center, Perimeter Woods, Draper Peaks and Mullins Crossing.
The Company does not consider any potential property acquisitions to be probable under Rule 3-14 of Regulation S-X.
This unaudited pro forma Consolidated Statement of Operations and Other Comprehensive Income is not necessarily indicative of what the actual results of operations would have been for the year ended December 31, 2010, nor does it purport to represent our future results of operations.
Inland Diversified Real Estate Trust, Inc.
Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the year ended December 31, 2010
(unaudited)
|
|
|
|
|
Pro Forma |
|
|
| |||
|
|
|
Historical |
|
Adjustments |
|
|
| |||
|
|
|
(A) |
|
(B) |
|
Pro Forma |
| |||
|
|
|
|
|
|
|
|
| |||
|
Rental income (C) |
|
$ |
14,323,524 |
|
$ |
24,339,618 |
|
$ |
38,663,142 |
|
|
Tenant recovery income |
|
3,282,089 |
|
3,987,566 |
|
7,269,655 |
| |||
|
Other property income |
|
592,839 |
|
9,547 |
|
602,386 |
| |||
|
Total income |
|
18,198,452 |
|
28,336,731 |
|
46,535,183 |
| |||
|
|
|
|
|
|
|
|
| |||
|
General and administrative expenses |
|
1,872,417 |
|
— |
|
1,872,417 |
| |||
|
Acquisition related costs |
|
1,953,181 |
|
— |
|
1,953,181 |
| |||
|
Property operating expenses (D) |
|
3,321,058 |
|
6,749,070 |
|
10,070,128 |
| |||
|
Real estate taxes |
|
2,261,995 |
|
1,951,776 |
|
4,213,771 |
| |||
|
Depreciation and amortization (C) |
|
5,669,357 |
|
13,524,387 |
|
19,193,744 |
| |||
|
Business management fee - related party |
|
602,802 |
|
— |
|
602,802 |
| |||
|
Total expenses |
|
15,680,810 |
|
22,225,233 |
|
37,906,043 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Operating income |
|
2,517,642 |
|
6,111,498 |
|
8,629,140 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Interest and dividend income |
|
358,243 |
|
— |
|
358,243 |
| |||
|
Realized loss on sale of marketable securities |
|
(2,532 |
) |
— |
|
(2,532 |
) | |||
|
Interest expense (E) |
|
(4,522,070 |
) |
(11,853,149 |
) |
(16,375,219 |
) | |||
|
Equity in income of unconsolidated entities |
|
1,361 |
|
— |
|
1,361 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
(1,647,356 |
) |
(5,741,651 |
) |
(7,389,007 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Less: net income attributable to noncontrolling interests |
|
(95,633 |
) |
— |
|
(95,633 |
) | |||
|
|
|
|
|
|
|
|
| |||
|
Net loss attributable to common stockholders |
|
$ |
(1,742,989 |
) |
$ |
(5,741,651 |
) |
$ |
(7,484,640 |
) |
|
|
|
|
|
|
|
|
| |||
|
Net loss attributable to common stockholders per common share, basic and diluted (F) |
|
$ |
(0.13 |
) |
|
|
$ |
(0.16 |
) | |
|
Weighted average number of common shares outstanding, basic and diluted (F) |
|
13,671,936 |
|
|
|
45,888,672 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Comprehensive income (loss): |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(1,647,356 |
) |
$ |
(5,741,651 |
) |
$ |
(7,389,007 |
) |
|
|
|
|
|
|
|
|
| |||
|
Other comprehensive income: |
|
|
|
|
|
|
| |||
|
Unrealized gain on marketable securities |
|
161,609 |
|
— |
|
161,609 |
| |||
|
Loss reclassified into earnings from other comprehensive income |
|
2,532 |
|
— |
|
2,532 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Comprehensive loss |
|
(1,483,215 |
) |
(5,741,651 |
) |
(7,224,866 |
) | |||
|
Less: comprehensive income attributable to noncontrolling interests |
|
(95,633 |
) |
— |
|
(95,633 |
) | |||
|
Comprehensive loss attributable to common stockholders |
|
$ |
(1,578,848 |
) |
$ |
(5,741,651 |
) |
$ |
(7,320,499 |
) |
See accompanying notes to pro forma consolidated statement of operations and other comprehensive income.
Inland Diversified Real Estate Trust, Inc.
Notes to Pro Forma Consolidated Statement of Operations and Other Comprehensive Income
For the year ended December 31, 2010
(unaudited)
(A) The historical column represents the Company’s Consolidated Statement of Operations and Other Comprehensive Income for the year ended December 31, 2010 as filed with the Securities and Exchange Commission on Form 10-K.
(B) Total pro forma adjustments for significant acquisitions consummated through the date of this filing are as though the properties were acquired January 1, 2010.
Total income, property operating expenses and real estate taxes for the year ended December 31, 2010 is based on information provided by the sellers for Northcrest Shopping Center, Prattville Town Center, Landstown Commons, University Town Center, Perimeter Woods, Draper Peaks and Mullins Crossing.
The pro forma adjustments for the year ended December 31, 2010 are composed of the following adjustments:
|
|
|
Northcrest |
|
Prattville Town |
|
Landstown |
|
University |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Rental income |
|
$ |
2,121,791 |
|
$ |
2,111,671 |
|
$ |
6,810,741 |
|
$ |
2,277,860 |
|
|
Tenant recovery income |
|
260,995 |
|
301,878 |
|
1,125,411 |
|
436,959 |
| ||||
|
Other property income |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Total income |
|
2,382,786 |
|
2,413,549 |
|
7,936,152 |
|
2,714,819 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Property operating expenses |
|
363,573 |
|
341,309 |
|
1,260,898 |
|
422,381 |
| ||||
|
Real estate taxes |
|
81,502 |
|
123,597 |
|
521,055 |
|
250,179 |
| ||||
|
Depreciation and amortization |
|
1,741,385 |
|
1,425,036 |
|
3,383,712 |
|
1,382,168 |
| ||||
|
Total expenses |
|
2,186,460 |
|
1,889,942 |
|
5,165,665 |
|
2,054,728 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income |
|
196,326 |
|
523,607 |
|
2,770,487 |
|
660,091 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
1,056,996 |
|
1,070,267 |
|
3,582,940 |
|
1,256,367 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net loss |
|
$ |
(860,670 |
) |
$ |
(546,660 |
) |
$ |
(812,453 |
) |
$ |
(596,276 |
) |
|
|
|
Perimeter |
|
Draper Peaks |
|
Mullins |
|
Total Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Rental income |
|
$ |
4,402,503 |
|
$ |
3,518,367 |
|
$ |
3,096,685 |
|
$ |
24,339,618 |
|
|
Tenant recovery income |
|
469,001 |
|
899,150 |
|
494,172 |
|
3,987,566 |
| ||||
|
Other property income |
|
— |
|
9,547 |
|
— |
|
9,547 |
| ||||
|
Total income |
|
4,871,504 |
|
4,427,064 |
|
3,590,857 |
|
28,336,731 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Property operating expenses |
|
3,225,975 |
|
632,403 |
|
502,531 |
|
6,749,070 |
| ||||
|
Real estate taxes |
|
156,744 |
|
536,830 |
|
281,869 |
|
1,951,776 |
| ||||
|
Depreciation and amortization |
|
1,963,708 |
|
2,192,972 |
|
1,435,406 |
|
13,524,387 |
| ||||
|
Total expenses |
|
5,346,427 |
|
3,362,205 |
|
2,219,806 |
|
22,225,233 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Operating income (loss) |
|
(474,923 |
) |
1,064,859 |
|
1,371,051 |
|
6,111,498 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest expense |
|
2,193,730 |
|
1,403,892 |
|
1,288,957 |
|
11,853,149 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
(2,668,653 |
) |
$ |
(339,033 |
) |
$ |
82,094 |
|
$ |
(5,741,651 |
) |
(C) Investment properties will be depreciated on a straight-line basis based upon estimated useful lives of 30 years for buildings and improvements and 15 years for site improvements. The portion of the purchase price allocated to above or below market lease intangibles will be amortized on a straight-line basis over the life of the related leases as an adjustment to rental income. In-place lease intangibles will be amortized on a straight-line basis over the life of the related leases as a component of amortization expense. The purchase price allocation for pro forma financial statement purposes are preliminary and may be subject to change.
(D) Management fees are calculated as 4.5% of gross revenues pursuant to the new management agreements and are also included in property operating expenses.
(E) The pro forma adjustments relating to incremental interest expense were based on the following debt terms:
|
|
|
Principal Balance |
|
Interest Rate |
|
Maturity Date |
| |
|
Northcrest Shopping Center |
|
$ |
18,720,000 |
|
5.48 |
% |
May 1, 2021 |
|
|
Prattville Town Center |
|
18,890,000 |
|
5.48 |
% |
May 1, 2021 |
| |
|
Landstown Commons - mortgage |
|
68,375,000 |
|
3.24 |
% |
March 24, 2012 |
| |
|
Landstown Commons - credit facility |
|
21,000,000 |
|
4.50 |
% |
October 31, 2012 |
| |
|
University Town Center |
|
22,180,000 |
|
5.48 |
% |
June 1, 2021 |
| |
|
Perimeter Woods |
|
39,390,000 |
|
6.02 |
% |
September 1, 2018 |
| |
|
Draper Peaks |
|
23,905,106 |
|
5.74 |
% |
October 1, 2015 |
| |
|
Mullins Crossing |
|
22,232,585 |
|
5.50 |
% |
September 6, 2016 |
| |
|
|
|
$ |
234,692,691 |
|
|
|
|
|
(F) The pro forma weighted average shares of common stock outstanding for the year ended December 31, 2010 was calculated assuming all shares sold through August 18, 2011 were issued on January 1, 2010.