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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

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 11, 2012 (January 5, 2012)

 

Behringer Harvard Opportunity REIT II, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

 

000-53650

 

20-8198863

(State or other jurisdiction of incorporation

 

(Commission File Number)

 

(I.R.S. Employer

or organization)

 

 

 

Identification No.)

 

15601 Dallas Parkway, Suite 600, Addison, Texas

75001

(Address of principal executive offices)

(Zip Code)

 

(866) 655-3600

(Registrant’s telephone number, including area code)

 

None

(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))

 

 

 



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Item 2.01               Completion of Acquisition or Disposition of Assets.

 

On January 5, 2012, 15250 Sonoma Drive Fee Owner, LLC, a 90% owned subsidiary of Behringer Harvard Opportunity REIT II, Inc. (which may be referred to as the “Registrant,” the “Company,” “we,” “our” or “us”), sold a 408-unit multifamily complex situated on a 28-acre site located in Fort Myers, Florida (the “Palms of Monterrey”), to an unaffiliated third party.

 

We originally acquired our 90% fee simple interest in the Palms of Monterrey on May 10, 2010.  Prior to May 10, 2010, we were the holder of a 90% interest in a promissory note that we acquired at a discount on October 2, 2009. The promissory note was secured by a first lien mortgage on the Palms of Monterrey. The aggregate purchase price for the promissory note was $25.4 million plus closing costs and proceeds from our initial public offering were used to acquire the 90% interest in the note. On January 20, 2010, we reached an agreement with the borrower that the borrower would not contest the foreclosure proceedings in exchange for $0.3 million. A final judgment of foreclosure was entered on March 22, 2010 and the foreclosure sale for the Palms of Monterrey was held on April 27, 2010. We were the only bidder in the sale and acquired the fee simple interest in the property on May 10, 2010.

 

The contract sale price for the Palms of Monterrey was $39.3 million, excluding transaction costs.  Proceeds from the sale of the asset were used to fully satisfy the existing indebtedness of $19.7 million associated with the property, after closing costs.

 

Item 9.01               Financial Statements and Exhibits.

 

 

 

Page

 

 

 

(a)

Pro Forma Financial Information.

 

 

 

 

 

Unaudited Pro Forma Consolidated Financial Information

3

 

 

 

 

Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2011

4

 

 

 

 

Unaudited Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2011

5

 

 

 

 

Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2010

6

 

 

 

 

Unaudited Notes to Pro Forma Financial Statements

7

 

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Behringer Harvard Opportunity REIT II, Inc.

Unaudited Pro Forma Consolidated Financial Information

 

On January 5, 2012, 15250 Sonoma Drive Fee Owner, LLC, our 90% owned subsidiary, sold the Palms of Monterrey for a contract sale price of $39.3 million, excluding transaction costs.  Proceeds from the sale were used to fully satisfy the existing indebtedness of $19.7 million associated with the property.

 

The following unaudited pro forma consolidated financial information gives effect to the disposition of the Palms of Monterrey.  In our opinion, all material adjustments necessary to reflect the effects of the above transaction have been made.

 

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Behringer Harvard Opportunity REIT II, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of September 30, 2011

(in thousands, except shares)

 

The following unaudited Pro Forma Consolidated Balance Sheet is presented as if we had disposed of the Palms of Monterrey as of September 30, 2011.  This Pro Forma Consolidated Balance Sheet should be read in conjunction with our Pro Forma Consolidated Statement of Operations and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the nine months ended September 30, 2011.  The Pro Forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had we completed the above transaction on September 30, 2011, nor does it purport to represent our future financial position.

 

 

 

September 30, 2011

 

Prior Disposition
Pro Forma

 

Pro Forma

 

 

 

 

 

as Reported

 

Adjustments

 

Adjustments

 

Pro Forma

 

 

 

(a)

 

(b)

 

(c)

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

Land and land improvements, net

 

$

82,432

 

$

(3,892

)

$

(6,323

)

$

72,217

 

Buildings and building improvements, net

 

205,930

 

(4,968

)

(22,491

)

178,471

 

Real estate under development

 

86

 

 

 

86

 

Total real estate

 

288,448

 

(8,860

)

(28,814

)

250,774

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

81,320

 

7,079

 

17,783

 

106,182

 

Restricted cash

 

7,522

 

 

 

7,522

 

Accounts receivable, net

 

8,610

 

 

 

8,610

 

Receivable from related party

 

1,864

 

 

 

1,864

 

Prepaid expenses and other assets

 

1,680

 

 

 

1,680

 

Furniture, fixtures and equipment, net

 

7,266

 

 

(867

)

6,399

 

Acquisition deposits

 

477

 

 

 

477

 

Deferred financing fees, net

 

4,199

 

(302

)

(469

)

3,428

 

Lease intangibles, net

 

7,812

 

(102

)

 

7,710

 

Total assets

 

$

409,198

 

$

(2,185

)

$

(12,367

)

$

394,646

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

Notes payable

 

$

205,148

 

$

(6,264

)

$

(19,700

)

$

179,184

 

Accounts payable

 

2,495

 

 

 

2,495

 

Acquired below-market leases, net

 

1,417

 

(20

)

 

1,397

 

Distributions payable

 

1,009

 

 

 

1,009

 

Accrued and other liabilities

 

6,937

 

(78

)

(14

)

6,845

 

Total liabilities

 

217,006

 

(6,362

)

(19,714

)

190,930

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

Preferred stock, $.0001 par value per share; 50,000,000 shares authorized, none outstanding

 

 

 

 

 

Convertible stock, $.0001 par value per share; 1,000 shares authorized, 1,000 outstanding

 

 

 

 

 

Common stock, $.0001 par value per share; 350,000,000 shares authorized, 24,576,034 shares issued and outstanding

 

2

 

 

 

2

 

Additional paid-in capital

 

218,012

 

 

 

218,012

 

Accumulated distributions and net income (loss)

 

(38,306

)

4,857

 

8,353

 

(25,096

)

Accumulated other comprehensive income

 

220

 

 

 

220

 

Total Behringer Harvard Opportunity REIT II, Inc. equity

 

179,928

 

4,857

 

8,353

 

193,138

 

Noncontrolling interest

 

12,264

 

(680

)

(1,006

)

10,578

 

Total equity

 

192,192

 

4,177

 

7,347

 

203,716

 

Total liabilities and equity

 

$

409,198

 

$

(2,185

)

$

(12,367

)

$

394,646

 

 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements.

 

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Behringer Harvard Opportunity REIT II, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Nine Months Ended September, 30, 2011

(in thousands, except per share amounts)

 

The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of the Palms of Monterrey as of May 10, 2010 (foreclosure date).  This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the nine months ended September 30, 2011.  The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on May 10, 2010 nor does it purport to represent our future operations.

 

 

 

Nine Months
Ended
September 30,
2011
 as Reported

 

Prior
Disposition
Pro Forma
Adjustments

 

Pro Forma
Adjustments

 

Pro Forma
Nine Months
Ended
September 30,

 

 

 

(a)

 

(b)

 

(c)

 

2011

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

26,089

 

$

(786

)

$

(3,465

)

$

21,838

 

Hotel revenue

 

4,856

 

 

 

4,856

 

Interest income from real estate loan receivable

 

2,926

 

 

 

2,926

 

Total revenues

 

33,871

 

(786

)

(3,465

)

29,620

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Property operating expenses

 

14,967

 

(77

)

(1,187

)

13,703

 

Interest expense

 

7,217

 

(613

)

(596

)

6,008

 

Real estate taxes

 

3,683

 

(88

)

(195

)

3,400

 

Property management fees

 

1,049

 

(14

)

(87

)

948

 

Asset management fees

 

2,205

 

(14

)

 

2,191

 

General and administrative

 

1,667

 

 

 

1,667

 

Acquisition expense

 

1,786

 

 

 

1,786

 

Depreciation and amortization

 

11,803

 

(462

)

(913

)

10,428

 

Total expenses

 

44,377

 

(1,268

)

(2,978

)

40,131

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

111

 

 

 

111

 

Other expense, net

 

821

 

 

 

821

 

Income (loss) before equity in earnings of unconsolidated joint venture and noncontrolling interest

 

(9,574

)

482

 

(487

)

(9,579

)

Equity in earnings of unconsolidated joint venture

 

2,681

 

 

 

2,681

 

Net income (loss)

 

(6,893

)

482

 

(487

)

(6,898

)

Add: net (income) loss attributable to the noncontrolling interest

 

1,351

 

(96

)

49

 

1,304

 

Net income (loss) attributable to common shareholders

 

$

(5,542

)

$

386

 

$

(438

)

$

(5,594

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

23,739

 

 

 

 

 

23,739

 

 

 

 

 

 

 

 

 

 

 

Loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.23

)

 

 

 

 

$

(0.24

)

 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements.

 

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Behringer Harvard Opportunity REIT II, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Year Ended December, 31, 2010

(in thousands, except per share amounts)

 

The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of the Palms of Monterrey as of May 10, 2010 (foreclosure date).  This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2010.  The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on May 10, 2010 nor does it purport to represent our future operations.

 

 

 

Year Ended
December 31,
2010
as Reported
(a)

 

Prior
Disposition
Pro Forma
Adjustments
(b)

 

Pro Forma
Adjustments
(c)

 

Pro Forma
Year Ended
December 31,
2010

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

13,341

 

$

(357

)

$

(2,710

)

$

10,274

 

Hotel revenue

 

954

 

 

 

954

 

Interest income from real estate loans receivable

 

4,953

 

 

 

4,953

 

Total revenues

 

19,248

 

(357

)

(2,710

)

16,181

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

Property operating expenses

 

6,541

 

(52

)

(1,442

)

5,047

 

Interest expense

 

2,843

 

(104

)

(452

)

2,287

 

Real estate taxes

 

1,723

 

(65

)

(152

)

1,506

 

Property management fees

 

487

 

(6

)

(68

)

413

 

Asset management fees

 

1,349

 

(20

)

 

1,329

 

General and administrative

 

2,032

 

 

 

2,032

 

Acquisition expense

 

11,277

 

 

 

11,277

 

Depreciation and amortization

 

6,877

 

(201

)

(1,828

)

4,848

 

Total expenses

 

33,129

 

(448

)

(3,942

)

28,739

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

483

 

 

 

483

 

Gain on sale of investment

 

204

 

 

 

204

 

Bargain purchase gain

 

5,492

 

 

(5,492

)

 

Other expense

 

(133

)

 

 

(133

)

Income (loss) before equity in losses of unconsolidated joint ventures and noncontrolling interest

 

(7,835

)

91

 

(4,260

)

(12,004

)

Equity in losses of unconsolidated joint ventures

 

(347

)

 

 

(347

)

Net income (loss)

 

(8,182

)

91

 

(4,260

)

(12,351

)

Add: net (income) loss atttributable to the noncontrolling interest

 

755

 

(69

)

426

 

1,112

 

Net income (loss) attributable to common shareholders

 

$

(7,427

)

$

22

 

$

(3,834

)

$

(11,239

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

19,216

 

 

 

 

 

19,216

 

 

 

 

 

 

 

 

 

 

 

Loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.39

)

 

 

 

 

$

(0.58

)

 

See accompanying Notes to Unaudited Pro Forma Consolidated Financial Statements.

 

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Behringer Harvard Opportunity REIT II, Inc.

Unaudited Notes to Pro Forma Consolidated Financial Statements

 

Unaudited Pro Forma Consolidated Balance Sheet

 

a.               Reflects our historical balance sheet as of September 30, 2011.

 

b.              Reflects our disposition of Archibald Business Center on December 22, 2011.  Amounts represent the necessary adjustments to remove the assets and liabilities sold to the buyer as a result of the disposition.

 

c.               Reflects our disposition of the Palms of Monterrey on January 5, 2012.  Amounts represent the necessary adjustments to remove the assets and liabilities sold to the buyer as a result of the disposition.

 

Unaudited Pro Forma Consolidated Statement of Operations for Nine Months Ended September 30, 2011

 

a.               Reflects our historical operations for the nine months ended September 30, 2011.

 

b.              Reflects the historical revenues and expenses of Archibald Business Center, including property management fees, asset management fees, depreciation and amortization associated with the property.

 

c.               Reflects the historical revenues and expenses of the Palms of Monterrey, including property management fees, asset management fees, depreciation and amortization associated with the property.

 

Unaudited Pro Forma Consolidated Statement of Operations for Year Ended December 31, 2010

 

a.               Reflects our historical operations for the year ended December 31, 2010.

 

b.              Reflects the historical revenues and expenses of Archibald Business Center, including property management fees, asset management fees, depreciation and amortization associated with the property.

 

c.               Reflects the historical revenues and expenses of the Palms of Monterrey, including property management fees, asset management fees, depreciation and amortization associated with the property.

 

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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.

 

 

 

BEHRINGER HARVARD OPPORTUNITY REIT II, INC.

 

 

 

 

Dated: January 11, 2012

By:

/s/ Samuel A. Gillespie

 

 

Samuel A. Gillespie

 

 

Chief Operating Officer

 

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