CHICAGO, March 25 /PRNewswire-FirstCall/ -- Banyan Strategic Realty Trust
(Nasdaq: BSRTS) announced today that for the quarter ended December 31, 2001
its Net Assets in Liquidation decreased by approximately $1.9 million, from
approximately $14.3 million at September 30, 2001 to approximately
$12.4 million at December 31, 2001. The decrease was due primarily to a
$2.7 million provision for asset impairment, which was offset by the receipt
of $1.0 million of forfeited earnest money. The provision for asset impairment
represents the write down in net carrying value of the Trust's Riverport
property in Louisville, Kentucky to reflect the February 20, 2002 contract
price. The $1.0 million of earnest money was forfeited by Denholtz Management
Corp. after its December 3, 2001 decision not to purchase Banyan's University
Square Business Center property in Huntsville, Alabama. Also contributing to
the decrease in Net Assets in Liquidation was an operating loss of
$0.2 million, depreciation expense of $0.3 million and minority interest of
$0.1 million. This decrease was offset by $0.1 million of interest income on
cash and cash equivalents and recovery of losses on loans, notes and interest
receivable of approximately $0.1 million.
For the three months ended December 31, 2000, the Trust reported Net
Income Available to Common Shares of approximately $0.7 million. Because of
the differences between the liquidation basis of accounting and the going
concern basis of accounting described below, this amount is not comparable to
the changes in net assets in liquidation as reported for the three months
ended December 31, 2001.
For the year ended December 31, 2001, the Trust's Net Assets in
Liquidation decreased by approximately $51.8 million from approximately
$64.2 million at December 31, 2000 to approximately $12.4 million at December
31, 2001. The decrease was primarily the result of distributions paid to
shareholders of $77.3 million, including the Trust's liquidating distributions
totaling $4.95 per share, amounting to $76.7 million. Offsetting this
decrease were: gains on the Trust's sale of 24 of its 27 properties on May 17,
2001 (net of minority interests of $6.4 million) of approximately
$25.8 million, operating income in the amount of approximately $3.0 million,
the receipt of $1.0 million of forfeited earnest money, recovery of losses on
loans, notes and interest receivable of approximately $1.0 million and
$0.8 million of interest on cash and cash equivalents. This amount was
reduced by depreciation expense of approximately $3.2 million and the
aforesaid provision for asset impairment of $2.7 million.
The recovery of losses on loans, notes and interest receivable of
approximately $1.0 million represents cash received in respect of the Trust's
interest in a liquidating trust that was established for the benefit of the
unsecured creditors VMS Realty Partners and its affiliates. The interest in
this liquidating trust had previously been accorded no carrying value in the
Trust's financial statements.
For the year ended December 31, 2000, the Trust reported Net Income
Available to Common Shares of approximately $2.0 million. Because of the
differences between the liquidation basis of accounting and the going concern
basis of accounting described below, this amount is not comparable to the
changes in net assets in liquidation as reported for the year ended December
31, 2001.
Status of Real Estate Asset Sales
As of December 31, 2001, Banyan owned interests in three properties;
Northlake Tower Festival Mall in Atlanta, Georgia; University Square Business
Center in Huntsville, Alabama and 6901 Riverport Drive in Louisville,
Kentucky.
On February 21, 2002, the Trust announced that it had signed a contract to
sell 6901 Riverport Drive, for a gross purchase price of $6.05 million. The
purchase contract contains a 60-day inspection period, during which the
purchaser can conduct various tests and investigations of the property and the
surrounding market. During this inspection period the purchaser may terminate
the contract without penalty. If the sale is consummated, the Trust expects
to utilize the proceeds to retire (or, in the event of an assumption, credit
to the purchaser) the existing Riverport debt ($3.4 million), as well as to
pay real estate commissions, closing costs and prorations (approximately
$0.5 million), thus realizing net proceeds of approximately $2.15 million.
On March 4, 2002, the Trust announced that it had signed a contract to
sell its Huntsville, Alabama property, known as University Square Business
Center, for a gross purchase price of $8.45 million. The purchase contract
contains no inspection period and the buyer has waived all other
contingencies. Closing is scheduled to occur no later than May 15, 2002. If
the transaction closes, the Trust expects to utilize the proceeds to retire
the existing University Square debt ($4.65 million) and to pay related closing
costs and prorations (approximately $0.15 million), thus realizing net
proceeds of approximately $3.65 million.
On March 15, 2002, the Trust announced that it acquired the interests of
its partner, M & J Wilkow, Ltd., in the Northlake Tower Festival Mall in
Atlanta, Georgia. The shopping center was previously owned by Banyan and
affiliates of Wilkow in a joint venture. The purchase price paid to Wilkow by
Banyan was $1.3 million, adjusted by certain prorations and credits. Wilkow
had an approximate 20% interest in the property's cash flow and an approximate
30% interest in its capital proceeds.
L.G. Schafran, Interim President, CEO and Chairman of the Board of
Trustees of the Trust, commented: "If the two anticipated property sale
transactions are consummated, the Trust will have realized net sales proceeds
of approximately $5.8 million. After deducting the $1.3 million utilized to
purchase the Northlake interest, the Trust's cash reserves will have increased
by approximately $4.5 million or almost $0.30 per share. We intend to
continue our policy of making liquidating distributions, when and as often, as
circumstances permit. The Board of Trustees will evaluate the Trust's cash
reserves and consider making the appropriate liquidating distribution, as soon
and efficiently as practical, particularly after the University Square and the
Riverport transactions are completed."
Nasdaq Delisting
The Trust previously announced that on February 14, 2002, it was notified
by Nasdaq that because the minimum bid price for the Trust's shares of
beneficial interest closed below $1.00 per share for the preceding thirty
consecutive trading days, the Trust faced delisting. The bid price must close
at $1.00 or more per share for ten or more consecutive trading days between
the notification date and May 15, 2002 for delisting to not occur. If this
criterion is not met, the shares would be delisted, subject to the Trust's
right of appeal. The Trust is currently looking into alternatives in order to
provide a market for the exchange of its shares.
Liquidation Basis of Accounting
As a result of the adoption of a Plan of Termination and Liquidation on
January 5, 2001, the Trust began reporting on the liquidation basis of
accounting, effective for the quarter ending March 31, 2001. Therefore,
operations for the year and three months ended December 31, 2001 are reported
on the Consolidated Statement of Changes in Net Assets in Liquidation, while
the December 31, 2000 results were reported on a going concern basis on the
Consolidated Statement of Operations. The financial statement presentations
differ materially in that under the liquidation basis of accounting, the Trust
no longer amortizes deferred financing fees and leasing commissions and no
longer records straight line rental income. Leasing commissions, however, are
deducted in the computation of Operating Income and are no longer capitalized
and amortized.
Banyan Strategic Realty Trust is an equity Real Estate Investment Trust
(REIT) that, on January 5, 2001, adopted a Plan of Termination and
Liquidation. On May 17, 2001, the Trust sold approximately 85% of its
portfolio in a single transaction and now owns interests in three (3) real
estate properties located in Atlanta, Georgia; Huntsville, Alabama (which is
the subject matter of the Trust's press release of March 4, 2002); and
Louisville, Kentucky (which is the subject matter of the Trust's press release
of February 21 2002). As of this date, the Trust has 15,496,806 shares of
beneficial interest outstanding.
Except for the historical information contained herein, certain matters
discussed in this release are forward-looking statements, the achievement of
which involve risks and uncertainties such as the sale of the Trust's
remaining properties, the amount of the remaining liquidating distributions,
the outcome of pending litigation and other risks and uncertainties that are
detailed from time to time in the Trust's reports filed with the Securities
and Exchange Commission, including the report on Form 10-K for the year ended
December 31, 2001 which was filed with the Securities and Exchange Commission
on March 21, 2002. Without limitation, the foregoing words such as
"anticipates", "expects", "intends", "plans", and similar expressions are
intended to identify forward-looking statements.
See Banyan's Website at http://www.banyanreit.com .
SOURCE Banyan Strategic Realty Trust
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Related links:
http://www.banyanreit.com
CONTACT:
Joel L. Teglia, Executive Vice President and
Chief Financial Officer, jteglia@banyanreit.com , Investor
Relations, L.G. Schafran, Chairman and Interim CEO-President,
ir@banyanreit.com , both of Banyan Strategic Realty Trust,
+1-630-218-7250
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