Edgar Filing: Cole Credit Property Trust II Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

AMENDMENT NO. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 11, 2006

Cole Credit Property Trust II, Inc.
(Exact Name of Registrant as Specified in Its Charter)

Maryland	333-121094 (1933 Act)	20-1676382
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)


2555 East Camelback Road, Suite 400, Phoenix, Arizona 85016
(Address of principal executive offices)
(Zip Code)

(602) 778-8700
(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))

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Cole Credit Property Trust II, Inc. (which may be referred to as the “Registrant,” the “Company,” “we,” “our,” and “us”) hereby amends the following Current Report on Form 8-K to provide the required financial information:

(i)

Current Report on Form 8-K filed on January 17, 2006 to provide the required financial information relating to our acquisition of a single-tenant retail building located in Lenexa, Kansas (the “DB Lenexa Property”), as described in such Current Report.

After reasonable inquiry, we are not aware of any material factors relating to the property discussed above that would cause the reported financial information relating to it not to be necessarily indicative of future operating results.

Item 9.01. Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

None.

(b)

Pro Forma Financial Information.

Pro Forma Consolidated Balance Sheet as of December 31, 2005 (Unaudited).

	Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2005
	(Unaudited).

Notes to Pro Forma Consolidated Financial Statements (Unaudited).

(c)

Shell Company Transactions.

None.

(d)

Exhibits.

None.

Summary Financial Data

DB Lenexa Property

On January 11, 2006, we acquired an approximately 12,083 square foot single-tenant freestanding retail building on an approximately 1.6 acre site located in Lenexa, Kansas, (the “DB Lenexa Property”). The purchase price of the DB Lenexa Property was approximately $3.3 million, exclusive of closing costs. The acquisition was funded by net proceeds from the Company’s ongoing public offering and an approximately $2.6 million loan secured by the DB Lenexa Property.

In our Current Report on Form 8-K that we filed on January 17, 2006, regarding the acquisition of the DB Lenexa Property we indicated that we would file financial statements related to the acquisition by an amendment to the Form 8-K. We have since determined that as the DB Lenexa Property had no operating history prior to January 11, 2006, we are not required to file such statements.

Cole Credit Property Trust II, Inc.

Pro Forma Consolidated Balance Sheet

As of December 31, 2005

(Unaudited)

The following unaudited Pro Forma Consolidated Balance Sheet is presented as if the Company had acquired the DB Lenexa Property and the prior acquisitions on December 31, 2005. Pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933, as amended, the Company is offering for sale to the public on a “best efforts” basis a minimum of 250,000 and a maximum of 45,000,000 shares of its common stock at a price of $10 per share, subject to volume and other discounts (the “Offering”). On September 23, 2005, the Company issued the initial shares under the Offering and commenced its principal operations. Prior to such date, the Company was considered a development stage company and did not have any operations.

This Pro Forma Consolidated Balance Sheet should be read in conjunction with the historical financial statements and notes thereto as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. The Pro Forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual results of operations would have been had the Company completed the above transaction on December 31, 2005, nor does it purport to represent its future operations.

	December 31, 2005 As Reported		Total Prior Acquisitions Pro Forma Adjustments		Current Acquisition Pro Forma Adjustments		Pro Forma December 31, 2005
ASSETS		(a)		(b)		(c)
Real estate assets, at cost:
Land	$	23,854,308	$	1,194,309	$	746,280	$	25,794,897
Buildings and improvements, less accumulated depreciation of $151,472 at December 31, 2005		57,338,359		3,990,360		2,225,968		63,554,687
Intangible lease assets, less accumulated amortization of $71,881 at December 31, 2005		10,425,618		624,956		382,057		11,432,631
Total real estate assets		91,618,285		5,809,625		3,354,305		100,782,215
Cash		4,575,144		(1,592,935)		(781,655)		2,200,554
Restricted Cash		1,813,804		—		—		1,813,804
Rents and tenant receivables		36,001		—		—		36,001
Prepaid expenses and other assets		11,928		—		—		11,928
Deferred financing costs, less accumulated amortization of $17,964 at December 31, 2005		754,676		63,310		43,350		861,336
Total assets	$	98,809,838	$	4,280,000	$	2,616,000	$	105,705,838

LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable	$	66,804,041	$	4,280,000	$	2,616,000	$	73,700,041
Notes payable to affiliates		4,453,000		—		—		4,453,000
Accounts payable and accrued expenses		282,797		—		—		282,797
Due to affiliates		41,384		—		—		41,384
Acquired below market leases, less accumulated amortization of $52		14,637		—		—		14,637
Distributions payable		195,209		—		—		195,209
Escrowed investor proceeds liability		1,813,804		—		—		1,813,804
Total liabilities		73,604,872		4,280,000		2,616,000		80,500,872
Stockholders’ equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued and outstanding at December 31, 2005		—		—		—		—
Common stock, $.01 par value, 90,000,000 share authorized, 2,832,387 issued and outstanding at December 31, 2005		28,324		—		—		28,324
Capital in excess of par value		25,291,233		—		—		25,291,233
Accumulated deficit		(114,591)		—		—		(114,591)
Total stockholders’ equity		25,204,966		—		—		25,204,966

Total liabilities and stockholders’ equity	$	98,809,838	$	4,280,000	$	2,616,000	$	105,705,838

Cole Credit Property Trust II, Inc.

Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2005

(Unaudited)

The following unaudited Pro Forma Consolidated Statement of Operations is presented as if the Company had acquired the DB Lenexa Property and the prior acquisitions on January 1, 2005. The Company was considered a development stage company and did not have any operations prior to September 23, 2005, and as a result, a Pro Forma Consolidated Statement of Operations for the year ended December 31, 2004 has not been presented.

This Pro Forma Consolidated Statement of Operations should be read in conjunction with the historical financial statements and notes thereto as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. The Pro Forma Consolidated Statement of Operations is unaudited and is not necessarily indicative of what the actual results of operation would have been had the Company completed the above transaction on January 1, 2005, nor does it purport to represent its future operations.

		For the Year Ended December 31, 2005 As Reported		Total Prior Acquisitions Pro Forma Adjustments		Current Acquisition Pro Forma Adjustments				Pro Forma, For the Year Ended December 31, 2005
Revenues:		(a)		(d)		(e)
Rental income	$	741,669	$	6,515,837	$	247,072		(f)	$	7,504,578

Expenses:
General and administrative		156,252		2,000		2,000				160,252
Property and asset management fees		38,768		365,173		13,116		(g) (h)		417,057
Depreciation		151,472		1,536,112		74,916		(i)		1,762,500
Amortization		69,939		703,697		38,321		(i)		811,957
Total operating expenses		416,431		2,606,982		128,353				3,151,766
Real estate operating income		325,238		3,908,855		118,719				4,352,812
Other Income (Expense):
Interest income		27,557		—		—				27,557
Interest expense		(467,386)		(3,454,011)		(127,204)		(j)		(4,048,601)
Total other income (expense)		(439,829)		(3,454,011)		(127,204)				(4,021,044)
Net Income (Loss)	$	(114,591)	$	454,844	$	(8,485)			$	331,768

Weighted average number of Common shares outstanding
Basic and Diluted		411,909		2,420,478	(k)		—				2,832,387

Net income (loss) per common share
Basic and Diluted	$	(0.28)							$	0.12

Cole Credit Property Trust II, Inc.

Notes to Pro Forma Consolidated Financial Statements

December 31, 2005

(Unaudited)

Reflects the Company’s historical balance sheet as of December 31, 2005, and the historical results of operations of the Company for the year ended December 31, 2005. On September 23, 2005, the Company issued the initial shares under the Offering and commenced its principal operations. Prior to such date, the Company was considered a development stage company and did not have any operations.

Reflects preliminary purchase price allocations related to the acquisition of a single-tenant retail building 100% leased to Academy Corp., located in Macon, Georgia (the “AS Macon Property”), which was previously reported in a Current Report, as amended, on Form 8-K/A filed on March 22, 2006.

Reflects the preliminary purchase price allocations related to the acquisition of the DB Lenexa Property as if it had been acquired on December 31, 2005.

Reflects the proforma results of operations for the following acquisitions: a single-tenant retail building 100% leased to Tractor Supply Company, located in Parkersburg, West Virginia (the “TS Parkersburg Property”), which was previously reported in a Current Report, as amended, on Form 8-K/A filed on December 9, 2005; a single-tenant retail building 100% leased to Walgreens, located in Brainerd, Minnesota (the “WG Brainerd Property”), which was previously reported in a Current Report, as amended, on Form 8-K/A filed on December 16, 2005; a single-tenant research and development building 100% leased to LDM Technologies, Inc., located in Auburn Hills, Michigan (the “PT Auburn Hills Property”), which was previously reported in a Current Report filed on December 20, 2005; a single-tenant retail building 100% leased to Rite Aid, located in Alliance, Ohio (the “RA Alliance Property”), three single-tenant retail buildings 100% leased to Walgreens, located in St. Louis, Missouri, collectively (the “WG SL Properties”), a single-tenant retail building 100% leased to Walgreens, located in Olivette, MO (the “WG Olivette Property”), a single-tenant retail building 100% leased to Walgreens located in Columbia, Missouri (the “WG Columbia Property”), a single-tenant retail building 100% leased to CVS Corporation located in Alpharetta, Georgia (the “CV Alpharetta Property), a single-tenant retail building 100% leased to CVS Corporation located in Richland Hills, Texas (the “CV RH Property”), a single-tenant retail building 100% leased to Lowes Enterprises located in Enterprise, Missouri (the “LO Enterprise Property”), a single-tenant retail distribution facility 100% leased to FedEx Ground Packaging System, Inc. located in Rockford, Illinois (the “FE Rockford Property”), a single-tenant retail building 100% leased to La-Z-Boy located in Glendale, Arizona (the “LZ Glendale Property”), which were previously reported in a Current Report, as amended, on Form 8-K/A filed on December 23, 2005; and the AS Macon Property.

Reflects the Pro Forma results of operations of the DB Lenexa Property for the year ended December 31, 2005.

Represents the straight line rental revenues for the DB Lenexa Property in accordance with its lease agreement.

Reflects the annualized asset management fee of 0.25% (a monthly rate of 0.02083%) of the DB Lenexa Property asset value payable to our Advisor.

Reflects the property management fee equal to 2% of gross revenues of the DB Lenexa Property payable to an affiliate of our Advisor.

Represents depreciation and amortization expense for the DB Lenexa Property. Depreciation and amortization expense are based on the Company’s preliminary purchase price allocation. All assets are depreciated on a straight line basis. The estimated useful lives of our assets by class are generally as follows:

	Building	40 years
	Tenant improvements	Lesser of useful life or lease ter
	Intangible lease assets	Lesser of useful life or lease term

Represents interest expense associated with the debt incurred to finance the acquisitions of the DB Lenexa Property. The loan terms are as follows:


Loan Description	Loan Amount	Interest Rate	Maturity
Fixed Rate Tranche	$1,799,000	5.86%	January 11, 2011
Variable Rate Tranche	$817,000	One Month LIBOR plus 2%	April 11, 2006

The variable rate tranche has a 90 day repayment term. As such, the interest expense for year ended December 31, 2005 includes only 90 days of interest expense relating to the variable rate tranche as it is scheduled to be paid down 90 days after the acquisition of the DB Lenexa Property.

Represents a pro forma adjustment to the weighted average common shares outstanding to reflect all shares outstanding on December 31, 2005 as though they were issued on January 1, 2005. As the Company had insufficient capital at January 1, 2005 to acquire the respective properties which are included in the pro forma results of operations, it is necessary to assume all of the shares outstanding as of December 31, 2005 were outstanding on January 1, 2005. Each of the respective properties was acquired prior to December 31, 2005 and is included in the Company’s consolidated balance sheet as of December 31, 2005.

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.

Dated: March 23, 2006	COLE CREDIT PROPERTY TRUST II, INC
	By:	/s/ Blair D. Koblenz
	Name:	Blair D. Koblenz
	Title:	Executive Vice President and Chief Financial Officer