SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO 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 5, 2005
DIVIDEND CAPITAL TRUST INC.
(Exact name of small business issuer as specified in its charter)
Maryland (State or other jurisdiction of incorporation or organization) |
000-50724 (Commission File No.) |
82-0538520 (I.R.S. Employer Identification No.) |
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518 17th Street, Suite 1700 Denver, CO 80202 (Address of principal executive offices) |
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(303) 228-2200 (Registrant's telephone number) |
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:
Item 2.01 Completion of Acquisition or Disposition of Assets
Purchase of Wickes Distribution Center
We previously filed a Form 8-K on January 7, 2005, with regard to the acquisition of Wickes Distribution Center ("Wickes") located in Central DuPage County, a submarket of Chicago, Illinois, without the requisite financial information. Subsequent to that date, we determined that in relation to our audited consolidated balance sheet for the year ended December 31, 2004 (see our Annual Report Form 10-K filed on March 16, 2005), the acquisition of Wickes did not constitute a "significant amount of assets" as such term is defined pursuant to Form 8-K. For that reason, on March 21, 2005, we filed a Form 8-K/A specifying that the aforementioned requisite financial information was not required until such time as the acquisition of additional facilities including Wickes constitutes a "significant amount of assets". However, such information has since been completed with respect to Wickes and as such we are making the financial information available. Accordingly, we are filing this Form 8-K/A to include this financial information. Due to the non-related party nature of this transaction, we are only providing an audited statement for the year ended December 31, 2004. We are not aware of any material factors relating to this acquisition other than as disclosed in the notes to the financial statements, which would cause the reported financial information not to be necessarily indicative of future operating results.
2
Item 9.01 Financial Statements and Exhibits.
Wickes Distribution Center:
Independent Auditor's Report | F-1 | |
Statement of Revenues and Certain Expenses for the Year Ended | ||
December 31, 2004 | F-2 | |
Notes to Statement of Revenues and Certain Expenses | F-3 |
Pro Forma Financial Information (Unaudited) | F-5 | |
Pro Forma Consolidated Balance Sheet as of December 31, 2004 (Unaudited) | F-6 | |
Notes to Pro Forma Consolidated Balance Sheet (Unaudited) | F-7 | |
Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2004 (Unaudited) | F-8 | |
Notes to Pro Forma Consolidated Statement of Operations (Unaudited) | F-9 |
Exhibit Number |
Exhibit Title |
|
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23.1 | Consent of Independent Public Accounting Firm |
3
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.
DIVIDEND CAPITAL TRUST INC. |
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April 8, 2005 |
By: |
/s/ EVAN H. ZUCKER Evan H. Zucker Chief Executive Officer |
4
Board
of Directors and Stockholders
Dividend Capital Trust Inc.
Denver, Colorado
We have audited the accompanying statement of revenues and certain expenses of 250 South Gary Limited Partnership (the "Partnership") d/b/a Wickes Distribution Center ("Wickes") for the year ended December 31, 2004. This financial statement is the responsibility of the Partnership's management. Our responsibility is to express an opinion on the financial statement based upon 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 financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Current Report on Form 8-K/A of Dividend Capital Trust Inc., as described in Note 1. The presentation is not intended to be a complete presentation of the Partnership's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of 250 South Gary Limited Partnership d/b/a Wickes Distribution Center for the year ended December 31, 2004, on the basis of accounting described in Note 1.
McGladrey & Pullen, LLP
March 31,
2005
Duluth, Minnesota
F-1
DIVIDEND CAPITAL TRUST INC.
250 South Gary Limited Partnership d/b/a Wickes Distribution Center
Statement of Revenues and Certain Expenses
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For the Year Ended December 31, 2004 |
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Revenues | |||||
Rental income | $ | 1,364,081 | |||
Other revenues | | ||||
Total revenues | 1,364,081 | ||||
Certain expenses | |||||
Operating expenses | 133,672 | ||||
Insurance | 14,169 | ||||
Total certain expenses | 147,841 | ||||
Excess of revenues over certain expenses | $ | 1,216,240 | |||
The accompanying notes are an integral part of this financial statement.
F-2
DIVIDEND CAPITAL TRUST INC.
Notes to Statement of Revenues and Certain Expenses
Note 1Description of Business and Summary of Significant Accounting Policies
The accompanying statement of revenues and certain expenses reflects the operations of 250 South Gary Limited Partnership (the "Partnership") d/b/a Wickes Distribution Center ("Wickes") for the year ended December 31, 2004. Wickes is located in Central DuPage County, a submarket of Chicago, Illinois and comprises approximately 440,000 aggregate rentable square feet. As of December 31, 2004, Wickes had an occupancy percentage of 100%.
Wickes was acquired by Dividend Capital Trust Inc. ("the Company") from an unrelated party on January 5, 2005, for a total cost of approximately $20.6 million (which includes an acquisition fee of $201,050 paid to Dividend Capital Advisors LLC, an affiliate), which was paid using net proceeds from the Company's public offering.
The accounting records of Wickes are maintained on the accrual basis. The accompanying statement of revenues and certain expenses was prepared pursuant to Rule 3-14 of Regulation S-X of the Securities and Exchange Commission, and excludes certain expenses such as mortgage interest, depreciation and amortization, professional fees and other costs not directly related to future operations of Wickes. In addition, the statement does not include amounts payable in the form of a property management fee associated with the management and operation of Wickes for the reason that such fees were not incurred prior to acquisition. Since the aforementioned date of acquisition, a property management fee has been and will continue to be incurred equal to the greater of (1) $1,200 per month; (2) 1% of gross receipts; or (3) the amount allowed for a management fee as specified in the tenant lease.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations can be significantly impacted by the rental market of the Chicago, Illinois region.
Note 2Operating Lease
Wickes' revenues are obtained from tenant rental payments as provided for under a non-cancelable net operating lease under which the tenant is directly responsible for the payment of operating costs including real estate taxes, insurance, utilities and repair and maintenance. Wickes records rental revenue for the full term of the lease on a straight-line basis. In the case where the minimum rental payments increase over the life of the lease, Wickes records a receivable due from the tenant for the difference between the amount of revenue recorded and the amount of cash received. This accounting treatment resulted in an increase in rental revenue of $416,796 for the year ended December 31, 2004.
F-3
Future minimum lease payments due under this lease for the next five years as of December 31, 2004, are as follows:
Year Ending December 31, |
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2005 | $ | 1,538,820 | |
2006 | 1,538,820 | ||
2007 | 1,538,820 | ||
2008 | 1,538,820 | ||
2009 | 641,175 | ||
Thereafter | | ||
$ | 6,796,455 | ||
As of December 31, 2004, Wickes was 100% leased to Wickes Furniture Company, Inc., which operates in the furniture retail industry. As such, all current and future revenues generated from this tenant will exceed 10% of Wickes total rental revenues.
F-4
DIVIDEND CAPITAL TRUST INC.
Pro Forma Financial Information
(Unaudited)
The following pro forma financial statements have been prepared to provide pro forma information with regards to Wickes Distribution Center ("Wickes") which Dividend Capital Trust Inc. (the "Company") acquired from an unrelated third party on January 5, 2005, and for which this Form 8-K/A is being filed.
The accompanying unaudited pro forma consolidated balance sheet presents the historical financial information of the Company as of December 31, 2004, as adjusted for the acquisition of Wickes and the issuance of the Company's common stock, as if these transactions had occurred on December 31, 2004.
The accompanying unaudited pro forma consolidated statement of operations for the year ended December 31, 2004, combines the historical operations of the Company with (i) the incremental effect of properties acquired in 2004, (ii) the historical operations of Wickes, (iii) the issuance of debt and (iv) the issuance of the Company's common stock, as if these transactions had occurred on January 1, 2004.
The unaudited pro forma consolidated financial statements have been prepared by the Company's management based upon the historical financial statements of the Company and the individually acquired properties. These pro forma statements may not be indicative of the results that actually would have occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. The pro forma financial statements should be read in conjunction with the historical financial statements included in the Company's previous filings with the Securities and Exchange Commission.
F-5
DIVIDEND CAPITAL TRUST INC.
Pro Forma Consolidated Balance Sheet
For the Year Ended December 31, 2004
(Unaudited)
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DCT Historical(1) |
Acquisitions |
Other Pro Forma Adjustments |
Pro Forma Consolidated |
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Assets | |||||||||||||
Net Investment in Real Estate | $ | 732,201,533 | $ | 21,726,430 | (2) | $ | | $ | 753,927,963 | ||||
Cash and cash equivalents | 23,520,267 | (20,584,560 | )(2) | 5,075,500 | (3) | 8,011,207 | |||||||
Other assets, net | 29,086,470 | | | 29,086,470 | |||||||||
Total Assets | $ | 784,808,270 | $ | 1,141,870 | $ | 5,075,500 | $ | 791,025,640 | |||||
Liabilities and Stockholders' Equity | |||||||||||||
Mortgage note | $ | 142,754,768 | $ | | $ | | $ | 142,754,768 | |||||
Line of credit | 4,000 | | | 4,000 | |||||||||
Financing obligation | 32,394,877 | | | 32,394,877 | |||||||||
Accounts payable and other liabilities | 28,439,822 | 1,141,870 | (2) | | 29,581,692 | ||||||||
Total Liabilities | 203,593,467 | 1,141,870 | | 204,735,337 | |||||||||
Minority Interest | 1,000 | | | 1,000 | |||||||||
Shareholders' Equity: | |||||||||||||
Common stock | 581,213,803 | | 5,075,500 | (3) | 586,289,303 | ||||||||
Total Shareholders' Equity | 581,213,803 | | 5,075,500 | 586,289,303 | |||||||||
Total Liabilities and Shareholders' Equity | $ | 784,808,270 | $ | 1,141,870 | $ | 5,075,500 | $ | 791,025,640 | |||||
The accompanying notes are an integral part of this pro forma consolidated financial statement.
F-6
Notes to Pro Forma Consolidated Balance Sheet
(Unaudited)
Shares Sold Subsequent to December 31, 2004 through January 5, 2005 | 537,090 | |||
Gross Proceeds | $ | 5,639,445 | ||
Less Selling Costs | (563,945 | ) | ||
Net Proceeds | $ | 5,075,500 | ||
F-7
DIVIDEND CAPITAL TRUST INC.
Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2004
(Unaudited)
|
DCT Historical (1) |
2004 Acquisitions |
2005 Acquisitions |
Other Pro Forma Adjustments |
Pro Forma Consolidated |
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REVENUE: | ||||||||||||||||||
Rental revenue | $ | 28,625,448 | $ | 34,981,573 | (2) | $ | 1,364,081 | (5) | $ | (492,467) | (8) | $ | 64,478,635 | |||||
Other income | 6,927,734 | | | | 6,927,734 | |||||||||||||
Total Income | 35,553,182 | 34,981,573 | 1,364,081 | (492,467 | ) | 71,406,369 | ||||||||||||
EXPENSES: | ||||||||||||||||||
Other Operating Expenses | 7,204,725 | 8,690,211 | (2) | 162,817 | (5) | | 16,057,753 | |||||||||||
Depreciation & amortization | 19,273,357 | 32,111,036 | (3) | 1,384,721 | (6) | | 52,769,114 | |||||||||||
Interest expense | 5,977,888 | 4,034,127 | (4) | | | 10,012,015 | ||||||||||||
General and administrative expenses | 2,371,591 | | | | 2,371,591 | |||||||||||||
Asset management fees, related party | 1,525,194 | 2,795,886 | (7) | 162,948 | (7) | | 4,484,028 | |||||||||||
Total Operating Expenses | 36,352,755 | 47,631,260 | 1,710,486 | | 85,694,501 | |||||||||||||
Other Income: | ||||||||||||||||||
Gain on Hedging Activities | 544,561 | | | | 544,561 | |||||||||||||
NET INCOME (LOSS) | $ | (255,012 | ) | $ | (12,649,687 | ) | $ | (346,405 | ) | $ | (492,467 | ) | $ | (13,743,571 | ) | |||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||||||||||||||||
Basic | 37,907,838 | | | 30,349,135 | 68,256,973 | (9) | ||||||||||||
Diluted | 37,927,838 | | | 30,349,135 | 68,276,973 | (9) | ||||||||||||
NET INCOME (LOSS) PER COMMON SHARE | $ | (0.01 | ) | $ | (0.20 | ) | ||||||||||||
Basic and diluted |
The accompanying notes are an integral part of this pro forma consolidated financial statement.
F-8
DIVIDEND CAPITAL TRUST
Notes to Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2004
(Unaudited)
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Acquisition Date |
Rental Revenues |
Operating Expenses |
Revenues in Excess of Expenses |
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Eastgate Distribution Center III | 3/19/2004 | $ | 447,437 | $ | 86,824 | $ | 360,613 | |||||
Newpoint Place I | 3/31/2004 | 333,875 | 66,511 | 267,364 | ||||||||
Northwest and Riverport Centers | 5/03/2004 | 534,002 | 85,462 | 448,540 | ||||||||
BBR Properties | 6/03/2004 | 2,447,412 | 766,857 | 1,680,555 | ||||||||
Parkwest / Mid-South | 6/08/2004 / 6/29/2004 |
2,511,255 | 355,173 | 2,156,082 | ||||||||
Eagles Landing / South Creek | 6/08/2004 | 1,552,298 | 292,941 | 1,259,357 | ||||||||
Memphis TradeCenter | 6/22/2004 | 1,025,489 | 119,448 | 906,041 | ||||||||
Trade Pointe III | 9/28/2004 | 607,866 | 86,315 | 521,551 | ||||||||
Interpark 70 | 9/30/2004 | 612,891 | 175,901 | 436,990 | ||||||||
RN Portfolio | 10/01/2004 | 17,253,271 | 5,040,835 | 12,212,436 | ||||||||
Cypress | 10/22/2004 | 1,379,465 | 360,777 | 1,018,688 | ||||||||
Bayside Distribution Center | 11/03/2004 | 1,745,670 | 362,145 | 1,383,525 | ||||||||
Norcross | 11/05/2004 | 723,808 | 198,836 | 524,972 | ||||||||
Sky Harbor Distribution Center | 11/24/2005 | 971,172 | 269,472 | 701,700 | ||||||||
C&L | 12/03/2004 | 594,029 | | 594,029 | ||||||||
Foothill Business Center | 12/09/2004 | 2,241,633 | 422,714 | 1,818,919 | ||||||||
Total | $ | 34,981,573 | $ | 8,690,211 | $ | 26,291,362 | ||||||
The properties above were acquired with the net proceeds raised from the Company's public offerings and the assumption of mortgage debt.
F-9
lease for tenant improvements and for other intangible assets based on the preliminary purchase price allocation in accordance with SFAS No. 141.
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Acquisition Date |
Land |
Building and Other Costs |
Total Cost |
Incremental Depreciation and Amortization |
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Eastgate Distribution Center III | 3/19/2004 | $ | 1,445,321 | $ | 13,351,343 | $ | 14,796,664 | $ | 165,792 | ||||||
Newpoint Place I | 3/31/2004 | 2,143,152 | 12,908,143 | 15,051,295 | 157,215 | ||||||||||
Northwest Business Center and Riverport Commerce Center | 5/03/2004 | 1,578,100 | 13,236,421 | 14,814,521 | 488,283 | ||||||||||
BBR Properties | 6/03/2004 | 2,117,679 | 48,668,372 | 50,786,051 | 1,618,080 | ||||||||||
Parkwest / Mid-South | 6/08/2004 / 6/29/2004 |
8,864,800 | 59,077,004 | 67,941,804 | 1,490,727 | ||||||||||
Eagles Landing / South Creek | 6/08/2004 | 5,253,300 | 31,245,223 | 36,498,523 | 1,059,878 | ||||||||||
Memphis TradeCenter | 6/22/2004 | 2,335,000 | 22,524,076 | 24,859,076 | 528,777 | ||||||||||
Trade Pointe III | 9/28/2004 | 1,020,000 | 7,239,775 | 8,259,775 | 298,852 | ||||||||||
Interpark 70 | 9/30/2004 | 1,383,117 | 7,566,005 | 8,949,122 | 586,898 | ||||||||||
RN Portfolio | 10/01/2004 | 39,512,385 | 198,963,568 | 238,475,953 | 20,108,313 | ||||||||||
Cypress | 10/22/2004 | 2,627,100 | 13,054,660 | 15,681,760 | 855,274 | ||||||||||
Bayside Distribution Center | 11/03/2004 | 6,874,740 | 15,253,898 | 22,128,638 | 761,347 | ||||||||||
Norcross | 11/05/2004 | 2,817,450 | 14,891,476 | 17,708,926 | 965,612 | ||||||||||
Sky Harbor Distribution Center | 11/24/2004 | 2,534,310 | 7,597,086 | 10,131,396 | 558,445 | ||||||||||
C&L | 12/03/2004 | 2,408,700 | 15,407,734 | 17,816,434 | 1,116,665 | ||||||||||
Foothill Business Center | 12/09/2004 | 13,314,550 | 9,111 995 | 22,426,545 | 1,350,878 | ||||||||||
Total | $ | 96,229,704 | $ | 490,096,779 | $ | 586,326,483 | $ | 32,111,036 | |||||||
Amount |
Note |
Interest Rate |
Incremental Interest Expense |
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$4,000 | Senior secured revolving credit facility | Annual interest rate at LIBOR plus 1.125% to 1.500% or prime, at the election of Dividend Capital (approximately 5.25% as of December 31, 2004). | $ | 158 | |||||
$96,758,380 | Assumed, secured, non-recourse debt | Annual interest rate varying from 5.3% to 7.2% | $ | 4,343,084 | |||||
$2,652,349 | Premium on assumed debt | $ | (309,115 | ) | |||||
Total | $ | 4,034,127 | |||||||
F-10
Wickes which was acquired during 2005, for the year ended December 31, 2004, based on the respective historical operations of Wickes for the period prior to acquisition.
|
Acquisition Date |
Rental Revenues |
Operating Expenses |
Revenues in Excess of Expenses |
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Wicke's Distribution Center | 1/05/2005 | $ | 1,364,081 | $ | 162,817 | (1) | $ | 1,201,264 |
|
Acquisition Date |
Land |
Building and Other Costs |
Total Cost |
Incremental Depreciation and Amortization |
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Wicke's Distribution Center | 12/09/2004 | 3,190,980 | 18,535,450 | 21,726,430 | 1,384,721 |
F-11