LEPERCQ CORPORATE INCOME FUND L P - FORM 8-K - August 6, 2014



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): July 31, 2014

LEPERCQ CORPORATE INCOME FUND L.P.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
33-04215
13-3779859
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
One Penn Plaza, Suite 4015, New York, New York
10119-4015
(Address of principal executive offices)
(Zip Code)
 
 
 
 
(212) 692-7200
 
(Registrant's telephone number, including area code)
        
Not Applicable
(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 (see General Instruction A.2.):

___    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

___    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

___    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

___    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.01    Completion of Acquisition or Disposition of Assets.

On July 31, 2014, Lepercq Corporate Income Fund L.P. (the "Partnership") sold a 559,000 square foot industrial property located in San Antonio, Texas to an unaffiliated third party. Gross proceeds from the sale of the industrial property were approximately $41.0 million.
    
Item 9.01    Financial Statements and Exhibits.

(b)    Pro forma financial information. The following financial information is submitted at the end of this Current Report on Form 8-K and is filed herewith and incorporated herein by reference:

Summary of Unaudited Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2014
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and the Years Ended December 31, 2013, 2012 and 2011
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements





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, thereunto duly authorized.

 
Lepercq Corporate Income Fund L.P.
 
By:
Lex GP-1 Trust, its general partner
 
 
 
 
 
 
Date: August 6, 2014
By:
/s/ Patrick Carroll
 
 
Patrick Carroll
 
 
Vice President and Treasurer




LEPERCQ CORPORATE INCOME FUND L.P.
SUMMARY OF UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On July 31, 2014, Lepercq Corporate Income Fund L.P. (the "Partnership") sold a 559,000 square foot industrial property located in San Antonio, Texas to an unaffiliated third party. Gross proceeds from the sale of the industrial property were approximately $41.0 million.

The following unaudited pro forma condensed consolidated balance sheet of the Partnership at March 31, 2014 is presented as if the sale of the industrial property had occurred on March 31, 2014. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2014 and for the years ended December 31, 2013, 2012 and 2011, are presented as if the sale of the industrial property had occurred on January 1, 2011. The unaudited pro forma condensed consolidated financial statements include all necessary adjustments to reflect the effects of the above transaction.

This pro forma condensed consolidated financial information is presented for information purposes only and is not necessarily indicative of what the Partnership's financial results would have been for the periods presented, nor do they purport to represent the future financial results of the Partnership. This pro forma condensed consolidated financial information should be read in conjunction with the Partnership's financial statements as filed with the Securities and Exchange Commission on Form 10-Q for the three months ended March 31, 2014 and on Form 10-K for the year ended December 31, 2013.




LEPERCQ CORPORATE INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2014
 
Historical (A)
 
Pro Forma
Adjustments
 
Pro Forma
 
 
 
(In thousands)
 
 
Assets:
 
 
 
 
 
Real estate, at cost
$
893,080

 
$
(41,016
)
(B)
$
852,064

Real estate - intangible assets
154,768

 
(866
)
(B)
153,902

 
1,047,848

 
(41,882
)
 
1,005,966

Less: accumulated depreciation and amortization
224,878

 
(18,737
)
(B)
206,141

Real estate, net
822,970

 
(23,145
)
 
799,825

Cash and cash equivalents
7,241

 
—

 
7,241

Restricted cash
2,544

 
40,837

(C)
43,381

Investment in and advances to non-consolidated entity
5,010

 
—

 
5,010

Deferred expenses, net
11,132

 
—

 
11,132

Loans receivable, net
18,924

 
—

 
18,924

Rent receivable - current
3,175

 
(34
)
 
3,141

Rent receivable - deferred
27,255

 
(468
)
 
26,787

Other assets
12,629

 
—

 
12,629

Total assets
$
910,880

 
$
17,190

 
$
928,070

 
 
 
 
 
 
Liabilities and Partners' Capital:
 
 
 
 
 
Liabilities:
 
 
 
 
 
Mortgages and notes payable
$
338,837

 
$
—

 
$
338,837

Co-borrower debt
146,220

 
—

 
146,220

Related party advances, net
4,792

 
—

 
4,792

Accounts payable and other liabilities
7,129

 
(32
)
(B)
7,097

Accrued interest payable
1,765

 
—

 
1,765

Deferred revenue - including below market leases, net
534

 
—

 
534

Distributions payable
13,574

 
—

 
13,574

Prepaid rent
8,661

 
(305
)
(B)
8,356

Total liabilities
521,512

 
(337
)
 
521,175

 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
Partners' capital
389,368

 
17,527

(D)
406,895

Total liabilities and partners' capital
$
910,880

 
$
17,190

 
$
928,070


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.




LEPERCQ CORPORATE INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014

 
Historical (A)
 
Pro Forma
Adjustments (B)
 
Pro Forma
 
(In thousands except per unit data)
 
 
 
 
 
 
Gross revenues:
 
 
 
 
 
Rental
$
27,847

 
$
(857
)
 
$
26,990

Tenant reimbursements
2,141

 
(8
)
 
2,132

Total gross revenues
29,988

 
(865
)
 
29,123

Expense applicable to revenues:
 
 
 
 
 
Depreciation and amortization
(7,241
)
 
483

 
(6,758
)
Property operating
(3,162
)
 
1

 
(3,161
)
General and administrative
(2,465
)
 
—

 
(2,465
)
Non-operating income
801

 
—

 
801

Interest and amortization expense
(6,426
)
 
—

 
(6,426
)
Income before provision for income taxes and equity in income of non-consolidated entity
11,495

 
(381
)
 
11,114

Provision for income taxes
(52
)
 
6

 
(46
)
Equity in income of non-consolidated entity
32

 
—

 
32

Income from continuing operations
$
11,475

 
$
(375
)
 
$
11,100

Income from continuing operations per unit
$
0.17

 
 
 
$
0.16

Weighted-average units outstanding
68,110,509

 
 
 
68,110,509


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.





LEPERCQ CORPORATE INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013

 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per unit data)
 
 
 
 
 
 
Gross revenues:
 
 
 
 
 
Rental
$
72,846

 
$
(3,429
)
 
$
69,417

Tenant reimbursements
5,477

 
(23
)
 
5,454

Total gross revenues
78,323

 
(3,452
)
 
74,871

Expense applicable to revenues:
 
 
 
 
 
Depreciation and amortization
(26,217
)
 
1,931

 
(24,286
)
Property operating
(11,308
)
 
5

 
(11,303
)
General and administrative
(4,783
)
 
1

 
(4,782
)
Non-operating income
3,431

 
—

 
3,431

Interest and amortization expense
(13,111
)
 
—

 
(13,111
)
Debt satisfaction charges, net
(1,560
)
 
—

 
(1,560
)
Loan loss
(13,939
)
 
—

 
(13,939
)
Income before provision for income taxes and equity in losses of non-consolidated entity
10,836

 
(1,515
)
 
9,321

Provision for income taxes
(81
)
 
25

 
(56
)
Equity in losses of non-consolidated entity
(88
)
 
—

 
(88
)
Income from continuing operations
$
10,667

 
$
(1,490
)
 
$
9,177

Income from continuing operations per unit
$
0.20

 
 
 
$
0.17

Weighted-average units outstanding
52,728,387

 
 
 
52,728,387


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.





LEPERCQ CORPORATE INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012

 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per unit data)
 
 
 
 
 
 
Gross revenues:
 
 
 
 
 
Rental
$
58,700

 
$
(3,429
)
 
$
55,271

Tenant reimbursements
5,312

 
(30
)
 
5,282

Total gross revenues
64,012

 
(3,459
)
 
60,553

Expense applicable to revenues:
 
 
 
 
 
Depreciation and amortization
(24,323
)
 
1,931

 
(22,392
)
Property operating
(10,697
)
 
13

 
(10,684
)
General and administrative
(4,878
)
 
5

 
(4,873
)
Non-operating income
4,613

 
(2
)
 
4,611

Interest and amortization expense
(14,883
)
 
829

 
(14,054
)
Debt satisfaction gains (charges), net
1

 
15

 
16

Litigation reserve
(912
)
 
—

 
(912
)
Income before provision for income taxes and equity in losses of non-consolidated entity
12,933

 
(668
)
 
12,265

Provision for income taxes
(94
)
 
25

 
(69
)
Equity in losses of non-consolidated entity
(33
)
 
—

 
(33
)
Income from continuing operations
$
12,806

 
$
(643
)
 
$
12,163

Income from continuing operations per unit
$
0.33

 
 
 
$
0.32

Weighted-average units outstanding
38,137,615

 
 
 
38,137,615


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.




LEPERCQ CORPORATE INCOME FUND L.P.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011

 
Historical (A)
 
Pro Forma Adjustments (B)
 
Pro Forma
 
(In thousands except per unit data)
 
 
 
 
 
 
Gross revenues:
 
 
 
 
 
Rental
$
56,111

 
$
(3,429
)
 
$
52,682

Tenant reimbursements
5,097

 
(25
)
 
5,072

Total gross revenues
61,208

 
(3,454
)
 
57,754

Expense applicable to revenues:
 
 
 
 
 
Depreciation and amortization
(24,638
)
 
1,931

 
(22,707
)
Property operating
(10,153
)
 
5

 
(10,148
)
General and administrative
(4,907
)
 
2

 
(4,905
)
Non-operating income
9,064

 
—

 
9,064

Interest and amortization expense
(16,113
)
 
1,692

 
(14,421
)
Debt satisfaction charges, net
(8
)
 
—

 
(8
)
Income before provision for income taxes
14,453

 
176

 
14,629

Provision for income taxes
(150
)
 
25

 
(125
)
Income from continuing operations
$
14,303

 
$
201

 
$
14,504

Income from continuing operations per unit
$
0.39

 
 
 
$
0.40

Weighted-average units outstanding
36,089,008

 
 
 
36,089,008


The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements.




LEPERCQ CORPORATE INCOME FUND L.P.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Adjustments to Pro Forma Condensed Consolidated Balance Sheet

(A)
Represents the Partnership's historical condensed consolidated balance sheet as of March 31, 2014, which was derived from the Partnership's quarterly report on Form 10-Q for the three months ended March 31, 2014.

(B)
Represents the Partnership's sale of the industrial property and the necessary adjustments to eliminate the impact of the assets and liabilities associated with the sold industrial property.

(C)
Represents the net sale proceeds deposited with a qualified exchange intermediary pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended.

(D)
Represents the Partnership's sale of the industrial property and the related gain on sale of real estate.

2.    Adjustments to Pro Forma Condensed Consolidated Statements of Operations

(A)    
Represents the Partnership's historical condensed consolidated statements of operations for the three months ended March 31, 2014 and the years ended December 31, 2013, 2012 and 2011, which were derived from the Partnership's quarterly report on Form 10-Q for the three months ended March 31, 2014 and the annual report on Form 10-K for the year ended December 31, 2013, respectively.

(B)    
Represents the Partnership's sale of the industrial property and the necessary adjustments to eliminate the impact of historical rental income, tenant reimbursements, non-operating income, property operating expenses, interest and amortization expense, taxes and depreciation and amortization associated with the sold industrial property. The adjustments exclude the effect of the gain on sale of real estate that would have been recognized on the sale of the industrial property, as this represents a non-recurring transaction and is excluded for pro forma income statement purposes.



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