ITEM 1
BUSINESS
Mid-Atlantic Realty Trust was incorporated June 29, 1993 and commenced operations effective with the completion of its initial public share offering on September 11, 1993. Mid-Atlantic Realty Trust is the successor to the operations of BTR Realty, Inc. (the predecessor to Mid-Atlantic Realty Trust), and qualifies as a real estate investment trust, "REIT", for Federal income tax purposes. As used herein, the term "MART" refers to Mid-Atlantic Realty Trust, the term "Company" refers to MART and its subsidiaries, and "BTR" refers to BTR Realty, Inc. and its subsidiaries.
The Company is a fully integrated, self managed real estate investment trust which owns, leases, develops, redevelops and manages its retail shopping center facilities and commercial properties. The Company's primary objective is to manage the properties for long-term cash flow growth. The Company's principal strategies are to grow the portfolio through the selective acquisition of additional properties in the Mid-Atlantic region, redeveloping or developing retail properties on a selective basis, and, when appropriate, divesting through sale or exchange of non-strategic properties.
The Company's financial strategy is to continue to refocus the portfolio through the selective acquisition of retail properties utilizing (1) proceeds from divestitures, (2) issuance of equity or debt securities, when appropriate, and (3) arranging bank or other borrowings for short term needs. The Company intends to maintain the conservative ratio of secured debt to total estimated property value below 50%.
The Company has an equity interest in twenty operating shopping centers, fifteen which are wholly-owned by the Company, and five in which the Company has interests ranging from 50% to 93%, as well as other commercial properties. The operating properties have a gross leasable area of approximately 3,126,000 square feet, of which approximately 96% was leased at December 31, 1996. Of these properties, approximately 94% of the gross leasable area is in the states of Maryland, Virginia, New York and Delaware, 5% in Arizona and 1% in Illinois. The Company also owns 8 undeveloped parcels of land totaling approximately 149 acres and varying in size from 3 to 43 acres.
The business of the Company is not materially affected by seasonal factors. Although construction may be affected to some extent by inclement weather conditions, usually during winter months, property sales and revenue from income producing properties held for investment are usually not so affected.
The commercial real estate development and investment industry is subject to widespread competition for desirable sites, tenants and financing. The industry is extremely fragmented and there are no principal methods of competition. However, the ability to compete is dependent in part upon the ability to find and complete appropriate real estate investments in a timely manner. While many competitors have fewer assets and financial resources than the Company, there are many competitors with greater financial resources competing for similar business opportunities. Accordingly, it is not possible to estimate the Company's position in the industry. In addition, certain of the Company's real estate projects are near unimproved sites that could be developed commercially and would provide further competition to the Company. The management of the Company believes, however, that the Company competes favorably in the industry due to the quality of its developments, its ability to take advantage of opportunities as they arise, its access to capital, and its reputation.
The Company has 52 full time employees and believes that its relationship with its employees is good.
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ITEM 2
ITEM 2
PROPERTIES
The following schedule describes the Company's commercial and other properties as of December 31, 1996:
I. SHOPPING CENTERS A. In Operation (1)
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ITEM 2. Properties (continued)
I. SHOPPING CENTERS (continued) A. In Operation (continued)
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ITEM 2. Properties (Continued)
III. OTHER DEVELOPED PROPERTIES A. In Operation
(1) Shopping centers in operation are subject to mortgage financing aggregating $68,306,762 at December 31, 1996. (2) Subject to the following long-term ground leases: (i) 150,000 square feet on 10 acres for Montgomery Ward's department store, (ii) 10,200 square feet on one acre for Montgomery Ward's auto accessory store. The Harford Mall property is subject to a mortgage principal balance at December 31, 1996 of $19,537,860. The Harford Mall mortgage has an interest rate of 9.78%, a 30 year amortization, with a 10 year balloon payment of $18,148,848 due at the maturity date of July, 2003. The mortgage's prepayment provision prohibits prepayment until June, 1997, after which the penalty is the greater of 1% of the outstanding principal balance or yield maintenance. (3) Includes 302,000 square feet occupied by department stores. (4) Remaining term of 11 years plus two 10 year options. (5) Remaining term of 20 years plus six 10 year options. (6) Remaining term of 56 years plus two 10 year options. (7) Remaining term of 35 years plus three 15 year renewal options. (8) Union Hills was sold on March 14, 1997 $1,000,000, which should generate a gain on the sale of approximately $236,000. (9) A purchase option agreement has been signed to sell this property for $5,350,000, which should generate no significant gain or loss on the sale in 1997. In 1996, the Company recorded a $713,900 valuation allowance for loss related to the pending sale of this property. (10) Office buildings in operation are subject to mortgage financing aggregating $1,903,733 as of December 31, 1996. (11) Remaining term of 11 years plus two 10 year options. (12) Remaining term of 30 years plus a 45 year renewal option.
IV. UNDEVELOPED PROPERTIES
Management believes the Company's properties are adequately covered by insurance.
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ITEM 3
ITEM 3 LEGAL PROCEEDINGS
In the ordinary course of business, the Company is involved in legal proceedings. However, there are no material legal proceedings presently pending against the Company.
ITEM 4
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
PART II
ITEM 5
ITEM 5 Market for the Registrant's Common Stock And Related Stockholder Matters
MART's common shares of beneficial interest, par value $.01 per share, ("shares"), are listed on the American Stock Exchange (symbol: MRR), which reports high, low and last sales prices. The table below lists high and low sales prices for MART for the periods indicated.
Cash dividends paid to holders of MART's shares during the periods indicated are as follows:
For record shareholders of MART during the entire year, for each respective year, it was determined that the per share dividends for each year indicated are taxable as follows:
On February 18, 1997, MART declared a quarterly cash dividend of $.24 per share payable March 14, 1997 to shareholders of record February 28, 1997.
The number of holders of record of the MART shares as of February 17, 1997 was 1,301.
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ITEM 6
ITEM 6
SELECTED FINANCIAL DATA
The following table sets forth the consolidated financial data for the Company and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report. The table consists of Selected Financial Data of Mid-Atlantic Realty Trust as of December 31, 1996, December 31, 1995, December 31, 1994, and December 31, 1993, and for the years ended December 31, 1996, December 31, 1995, December 31, 1994 and for the period September 11, 1993 (commencement of operations) through December 31, 1993, and also includes Selected Financial Data of BTR Realty, Inc. as of December 31, 1992 and for the period January 1, 1993 through September 10, 1993, and for the year ended December 31, 1992. Mid-Atlantic Realty Trust, a Real Estate Investment Trust, was merged with BTR Realty, Inc. on September 11, 1993. The consolidated financial data of BTR, the predecessor company, are presented for comparative purposes. Certain amounts for prior periods have been reclassified to conform to the 1996 presentation.
(1) In September, 1993, MART issued 3,450,000 shares in its initial public offering, and as part of the merger, exchanged for every 3 shares of BTR, 1 share of MART totaling approximately 8,526,000 shares of BTR for approximately 2,842,000 shares of MART.
Continued
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ITEM 6 - SELECTED FINANCIAL DATA - CONTINUED
Summary Financial Data The following sets forth summary financial data on an actual and pro forma basis. Management believes the following data should be used as a supplement to the historical statements of operations. The data should be read in conjunction with the historical financial statements and the notes thereto for MART included in Item 8. The pro forma financial data for 1993 are unaudited and are not necessarily indicative of the results which actually would have occurred if the transactions had been consummated at January 1, 1992. The pro forma data assumes the MART public offering took place on January 1, 1992.
Summary Financial Data In thousands, except per share data
(1) Funds from operations as defined by the National Association of Real Estate Investment Trusts, Inc. (NAREIT) - Funds from operations means net income (computed in accordance with generally accepted accounting principles), excluding cumulative effects of change in accounting principles, extraordinary or unusual items, and gains or losses from debt restructuring and sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO does not represent cash flows from operations as defined by generally accepted accounting principles (GAAP). FFO is not indicative that cash flows are adequate to fund all cash needs and is not to be considered as an alternative to net income as defined by GAAP. The presentation of FFO is not normally included in financial statements prepared in accordance with GAAP. (2) Net Cash Flows cannot be reasonably estimated on a pro forma basis for 1993. (3) Effective January 1, 1996 the Company adopted changes to the NAREIT definition of funds from operations. Certain amounts for prior years have been reclassified to conform to the 1996 presentation.
Quarterly Results of Operations (Unaudited)
The unaudited quarterly results of operations for MART for 1996 and 1995 are summarized as follows:
Quarterly results are influenced by a number of factors including timing of settlements of property sales, completion of operating projects, and write-offs of unrecoverable development costs, and valuation allowances for loss pending sales of properties.
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ITEM 7
ITEM 7
MID-ATLANTIC REALTY TRUST & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion compares the Company's results of operations for the year ended December 31, 1996, with those for the year ended December 31, 1995. The discussion also compares the Company's results of operations for the year ended December 31, 1995 with those for the year ended December 31, 1994.
Comparison of 1996 to 1995
Rental revenues increased by $2,648,000 or 11% to $26,562,000 for the year ended December 31, 1996 from $23,914,000 for the year ended December 31, 1995. The purchase of the Brandywine Commons shopping center in November, 1995 and the opening of the Owings Mills New Town shopping center in November, 1995 contributed $3,113,000 in additional revenues for the period. Redevelopment, occupancy and rental rate increases contributed to revenue increases of appoximately $1,178,000. These increases were partly offset by $1,399,000 in rental revenue decreases attributable to the sale in February, 1995 of the Regal Row warehouse project, the sales in January, 1996 of the Dolton bowling center and the Park Sedona shopping center, the sale in May, 1996 of the Dobson-Guadalupe shopping center, and the sale in December, 1995 of the McRay shopping center. In addition, $244,000 in revenue decreases were related primarily to vacancies and lower percentage rents.
Other income decreased by $319,000 to $709,000 from $1,028,000 primarily due to the receipts of rental insurance proceeds in 1995 and lower interest income in 1996.
As a result of the above changes total revenues increased by $2,329,000 to $27,271,000 from $24,942,000.
Interest expense increased by $426,000 to $12,354,000 from $11,928,000 primarily due to the increased debt for the development of the Owings Mills New Town and the redevelopment of York Road Plaza.
Depreciation and amortization increased by $430,000 to $5,414,000 from $4,984,000 primarily due to depreciation increases related to the purchase of Brandywine Commons and the development of Owings Mills New Town, York Road Plaza and the Harford Mall Annex, offset partly by decreases related to the sales referred to above.
Operating expenses increased by $595,000 to $3,683,000 from $3,088,000, primarily due to the purchase of Brandywine Commons, $274,000, as well as other net operating expense increases of $160,000, primarily related to increased landlord expenses due to higher bad debts and higher average vacancies. In addition, operating expenses increased due to the opening of Owings Mills New Town and due to higher occupancy in the Gateway Offices. Although snow removal expenses were higher than expected, the additional landlord portion of the expenses did not increase operating expenses significantly in 1996.
General and administrative expenses increased by $318,000 to $2,098,000 from $1,780,000 due primarily to salary increases, $168,000, development costs of an acquisition project no longer being pursued, $56,000, and other net general and administrative expense increases of $94,000.
Minority interest expense decreased by $204,000 to $514,000 from $718,000 due primarily to the acquisition of minority partnership interests.
For 1996, earnings from operations increased by $764,000 to $3,208,000 from $2,444,000. MART also recognized a gain on properties of $301,000, (net of minority interest of $117,000). The gain on properties, when combined with earnings from operations, resulted in net earnings of $3,509,000 for the period. For 1995, MART had a loss on properties of $281,000, a cumulative effect of a change in accounting for percentage rents of $612,000 and a gain on life insurance proceeds of $1,002,000, which when combined with earnings from operations, resulted in net earnings of $3,777,000 for the period.
MID-ATLANTIC REALTY TRUST & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Comparison of 1995 to 1994
Rental revenues increased by $2,023,000, or 9%, to $23,914,000 for the year ended December 31, 1995 from $21,891,000 for the year ended December 31, 1994. Two acquisitions, Easton Shoppes in September, 1994 and Brandywine Commons in November, 1995, contributed revenue increases of $943,000 and $222,000, respectively. Also, new redevelopment and development projects contributed $527,000 to revenue increases and net increases in occupancy and rental rates resulted in revenue increases of $763,000. The rental increases were partly offset by a $357,000 decrease in rental revenues attributable to the sale in February, 1995 of the Regal Row warehouse project and the sale in December, 1994 of the Oakton bowling center. In addition, $75,000 in revenue decreases were primarily related to vacancies.
Other income increased by $151,000 to $1,028,000 from $877,000 primarily due to receipts of insurance proceeds for lost rent at Rolling Road (which was damaged by a fire in December, 1992), interest increases and other income at Patriots Plaza and Wilkens Office II.
As a result of the above changes, total revenues increased by $2,174,000 to $24,942,000 from $22,768,000.
Interest expense increased by $1,052,000 to $11,928,000 from $10,876,000 primarily due to the two new acquisitions, Easton Shoppes and Brandywine Commons, which contributed increases of $692,000, and $97,000, respectively. Also, new redevelopment and development projects contributed $268,000 to interest expense increases. The interest expense increases were partly offset by $84,000 in interest expense decreases related to interest rate and principal reductions.
Depreciation and amortization increased by $434,000 to $4,984,000 from $4,550,000 primarily due to the redevelopment at Harford Mall Annex and York Road Plaza, the Easton Shoppes acquisition, and to tenant improvements at the Gateway Offices. The increases were partly offset by depreciation decreases primarily from the sale of the Regal Row warehouse property.
Operating expenses decreased by $249,000 to $3,088,000 from $3,337,000 primarily due to $156,000 in lower legal fees related to a tenant suit, settled in 1995, at the Smoketown Plaza project. Operating expenses also decreased by $144,000 due to the sales of the Regal Row warehouse project and the Oakton bowling center. Other net operating expense decreases of $70,000 were primarily related to higher tenant occupancy resulting in lower landlord operating expenses. The operating expense decreases were offset partly by $70,000 in operating expense increases related to McRay shopping center, sold in December, 1995 and Park Sedona shopping center, sold in January, 1996 and $51,000 in operating expense increases related to the new acquisition, Brandywine Commons.
General and administrative expenses increased by $29,000 to $1,780,000 from ,$1,751,000 due primarily to a $92,000 increase in net payroll expense and $52,000 in other net expense increases partly offset by an $82,000 decrease in insurance expense and a $33,000 decrease in legal fees.
Minority interest expense increased by $177,000 to $718,000 from $541,000 generally due to higher earnings in ventures with minority partners in 1995.
Earnings from operations increased by $731,000 to $2,444,000 from $1,713,000. Certain non-operating items occurred for both periods. In 1995, MART had a loss on properties of $281,000, a cumulative effect of a change in accounting for percentage rents of $612,000 and a gain on life insurance proceeds of $1,002,000, which, when combined with earnings from operations, resulted in net earnings of $3,777,000 for the period. For 1994, MART recorded a gain on properties of $1,203,000, which when combined with the earnings from operations, resulted in net earnings of $2,916,000 for the period.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Cash Flow comparison
The following discussion compares the statement of cash flows information for 1996 with the information for 1995 and with the information for 1994.
Net cash flow provided by operating activities was $9,342,000, $10,612,000, and $7,232,000 in 1996, 1995, and 1994, respectively. The changes in cash provided by operating activities were due primarily to the factors discussed above in the comparisons of operating results. The level of net cash provided by operating activities is also affected by the timing of receipt of revenues and the payment of operating and interest expenses. In particular, net cash provided by operating activities for 1996 was reduced due to the payment of certain operating liabilities and lower deferred rent receipts.
Net cash flow from investing activities increased by $27,816,000, to a net cash flow provided by investing activities of $4,232,000 in 1996 from a net cash flow used in investing activities of $23,584,000 in 1995. The increase was primarily a result of reduced levels of acquisitions and additions to properties in 1996 (primarily due to the acquisition of Brandywine Commons and the Owings Mills New Town development project in 1995) and an increase in proceeds from sales of properties.
Net cash flow used in investing activities increased by $3,954,000, to $23,584,000 in 1995 from $19,630,000 in 1994. The increase was primarily a result of acquisitions and additions to properties which resulted in an increase in cash used of $7,325,000 (primarily due to the acquisition of Brandywine Commons, the Owings Mills New Town development project and the redevelopment projects in 1995 exceeding the Easton Shoppes acquisition in 1994). These increases were partly offset by increases in proceeds from sales of properties of $1,652,000 and in receipts from minority partners of $1,719,000.
Net cash flow from financing activities decreased by $26,216,000, to net cash flow used in financing activities of $13,074,000 in 1996 from net cash flow provided by financing activities of $13,142,000 in 1995. The decrease was primarily a result of the following: a decrease in net borrowings of $28,081,000 due to the lower levels of development and acquisition costs; a $2,153,000 decrease in purchases of common shares and an increase in dividends paid of $413,000.
Net cash flow from financing activities increased by $1,087,000, to $13,142,000 in 1995 from $12,055,000 in 1994. The increase was primarily from two major net cash sources: a $10,100,000 addition to construction loan for the Owings Mills New Town shopping center under development and a $9,603,000 addition to mortgages payable primarily related to the closing of mortgages in 1995 for the Easton Shoppes and York Road Plaza redevelopment. The increases were partly offset by decreases in cash flows from financing activities primarily form the following: a net increase of $15,949,000 in payments on notes payable; purchases of common shares of $2,235,000 and and increase in dividends paid of $132,000.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Liquidity and Capital Resources
In order to qualify as a REIT for Federal income tax purposes, MART is required to pay dividends to its shareholders of at least 95% of its REIT taxable income. MART intends to pay these dividends from operating cash flows. While MART intends to distribute to its shareholders a substantial portion of its cash flows from operating activities, MART also intends to retain or reserve such amounts as it considers necessary from time to time for the acquisition or development of new properties as suitable opportunities arise and for the expansion and renovation of its shopping centers. Also, MART currently has and expects to continue to maintain a line of credit of at least $40,000,000 from a commercial bank (See Note I of notes to the consolidated financial statements).
The Company anticipates material commitments for capital expenditures to include, in the next two years, the redevelopment or development of two Maryland projects with an additional four redevelopment projects in the planning stage at an estimated cost of $15 to $25 million. The Company expects to fund the development projects and other capital expenditures with available net cash flows from operating activities and if necessary with construction loan financing, long term mortgage financing on unencumbered operating properties or the use of its $40,000,000 line of credit from a commercial bank.
It is management's intention that MART continually have access to the capital resources necessary to expand and develop its business. Management cannot practically quantify MART's 1997 cash requirements, but expects to meet its short-term liquidity requirements generally through available net cash flow provided by operations and short-term borrowings. To meet its long-term liquidity requirements, MART intends to obtain funds through additional equity offerings or long-term debt financing in a manner consistent with its intention to operate with a conservative debt capitalization policy. The Company filed a shelf registration with the Securities and Exchange Commission for the issuance of common shares or debt securities for up to $150 million in the aggregate. MART anticipates that the cash flow available from operations, together with cash from borrowings and equity offerings, will be sufficient to meet the capital and liquidity needs in both the short and long term.
Deferred Financing Costs
Effective January 1, 1996 the Company changed its reporting of the amortization of deferred financing costs. During the year ended December 31, 1995 and previously, the annual amortization of deferred financing costs was reported in the depreciation and amortization of property and improvements expense line in the consolidated statements of operations. Effective January 1, 1996, the Company began reporting the amortization of deferred financing costs in the interest expense line in the consolidated statement of operations. The comparative prior year interest and depreciation and amortization expense line items have been reclassified to reflect this change.
Gain (Loss) on properties
Effective January 1, 1996, the Company changed its reporting of gains or losses on sales of properties held for sale. During the year ended December 31, 1995 and previously, gains or losses on sales of properties held for sale had been included in revenues in the consolidated statement of operations and in the calculation of earnings from operations. The Company is not in the business of buying land for resale. Therefore, management believes gains or losses on sales of properties held for sale should not be included in the calculation of earnings from operations, and should be an adjustment to earnings from operations to arrive at net earnings. The comparative prior year total revenues, earnings from operations and gains or losses on properties have been reclassified to reflect this change.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Inflation
The majority of all of the leases at the shopping center properties contain provisions which may entitle MART to receive percentage rents based on the tenants' gross sales. Such percentage rents ameliorate the risk to MART of the adverse effects of inflation. Percentage rent received by MART remained stable in the year ended December 31, 1996 compared to the year ended December 31, 1995. If a recession were to begin and continue for a prolonged time, funds from operations could decline as some tenants may have trouble meeting their lease obligations. Most of the leases at the properties require the tenants to pay a substantial share of operating expenses, such as real estate taxes, insurance and common area maintenance costs, and thereby reduce MART's exposure to increased costs. In addition, many of the leases at the properties are for terms of less than 10 years, which may enable MART to seek increased rents upon renewal of existing leases if rents are below the then-existing market value.
Stock Repurchase Plan
On February 14, 1995, the Board of Trustees approved a stock repurchase plan which authorizes the repurchase of up to approximately 310,000 shares. The Company purchased 277,200 shares during the year ended December 31, 1995 for $2,234,616, at an average cost of $8.06 per share. On February 12, 1996 the Board of Trustees increased by 100,000 the authorized number of shares that may be repurchased up to 410,000. During the year ended December 31, 1996 the Company purchased an additional 8,618 shares at an average cost of $9.45 per share.
ITEM 8
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
MID-ATLANTIC REALTY TRUST & SUBSIDIARIES Financial Statements: Independent Auditors' Report ......................23
Consolidated Balance Sheets - as of December 31, 1996 and 1995 ................24
Consolidated Statements of Operations - Years ended December 31, 1996, 1995 and 1994 ...................................25
Consolidated Statements of Shareholders' Equity - Years ended December 31, 1996, 1995, and 1994 ..................................26
Consolidated Statements of Cash Flows - Years ended December 31, 1996, 1995 and 1994 ...................................27
Notes to Consolidated Financial Statements ........28
Exhibits, Financial Statement Schedule, and Reports on Form 8-K are included in Part IV - Item 14.
Schedule:
Schedule III - Real Estate and Accumulated Depreciation ..................................38
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INDEPENDENT AUDITORS' REPORT
Board of Trustees and Shareholders Mid-Atlantic Realty Trust:
We have audited the accompanying consolidated balance sheets of Mid-Atlantic Realty Trust and subsidiaries as of December 31, 1996 and 1995 and the related consolidated statements of operations, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1996. In connection with our audits of the consolidated financial statements, we have also audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Mid-Atlantic Realty Trust and subsidiaries as of December 31, 1996 and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1996, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in note A to the consolidated financial statements, the Company changed its method of accounting for percentage rents on January 1, 1995.
KPMG PEAT MARWICK LLP
Baltimore, Maryland February 17, 1997
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES Consolidated Balance Sheets
See accompanying notes to consolidated financial statements.
MID-ATLANTIC REALTY TRUST & SUBSIDIARIES Consolidated Statements of Operations
See accompanying notes to consolidated financial statements.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES Consolidated Statements of Shareholders' Equity Years Ended December 31, 1996, 1995 and 1994
See accompanying notes to consolidated financial statements.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES Consolidated Statements of Cash Flows
Supplemental information of noncash investing and financing activities:
During 1996, 1995, and 1994, respectively, $4,405,900, $19,838,543 and $2,832,641 in assets were transferred from Development Operations to Operating Properties. Effective July 1, 1996, the Company acquired a portion of the minority interest in a consolidated partnership which owns certain properties in satifaction of notes receivable from the minority partners. The ownership interest acquired was recorded at fair value at the date of acquisition, resulting in an increase in Properties of $2,923,000. In 1996, $12,785,000 in convertible debentures were converted to 1,217,610 common shares of beneficial interest decreasing convertible subordinated debentures by $12,785,000, decreasing net deferred financing costs by $445,544 and increasing shareholders' equity by $12,339,456. In 1995, $20,000 in convertible debentures were converted to 1,904 common shares of beneficial interest decreasing convertible subordinated debentures by $20,000, decreasing net deferred financing costs by $859 and increasing shareholders' equity by $19,141.
See accompanying notes to consolidated financial statements.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 1996, 1995, 1994
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Mid-Atlantic Realty Trust, "the Company", was incorporated on June 29, 1993 and commenced operations effective with the completion of its initial public share offering on September 11, 1993. The Company is the successor to the operations of BTR Realty, Inc., "BTR".
Description of Business
The Company is a fully integrated, self managed real estate investment trust which owns, leases, develops, redevelops and manages its retail shopping center facilities and commercial properties. The Company's primary objective is to manage the properties for long-term cash flow growth. The Company's principal strategies are to grow the portfolio through the selective acquisition of additional properties in the mid-Atlantic region, redeveloping or developing retail properties on a selective basis, and, when appropriate, divesting through sale or exchange of non-strategic properties.
The commercial real estate development and investment industry is subject to widespread competition for desirable sites, tenants and financing. The industry is extremely fragmented and there are no principal methods of competition. However, the ability to compete is dependent in part upon the ability to find and complete appropriate real estate investments in a timely manner. While many competitors have fewer assets and financial resources than the Company, there are many competitors with greater financial resources competing for similar business opportunities. Accordingly, it is not possible to estimate the Company's position in the industry. In addition, certain of the Company's real estate projects are near unimproved sites that could be developed commercially and would provide further competition to the Company. The management of the Company believes, however, that the Company competes favorably in the industry due to the quality of its developments, its ability to take advantage of opportunities as they arise, its access to capital, and its reputation.
Basis of Presentation
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and judgements that affect the reported amounts of assets and liabilities and disclosures of contigencies at the date of the financial statements and revenues and expenses recognized during the reporting period. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include all wholly-owned subsidiaries and majority-owned partnerships. Investments in unconsolidated joint ventures are carried on the equity method. All significant intercompany balances and transactions have been eliminated.
The Company owns 100% majority interests in corporate subsidiaries which are general managing partners as well as limited partners of several partnerships which have outside partners with 50% interests. Based upon the structure of the respective partnership management agreements the Company has control (as defined by the Statement of Financial Accounting Standards No. 94, "Consolidation of All Majority-Owned Subsidiaries", which describes the full consolidation method as preferable to the equity method where there is a 50% or less financial interest but control) over the 50% owned partnerships. The Company uses the full consolidation method to record the 50% owned partnerships.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Recognition of Revenue from Rentals
The Company earns rental income under operating leases with tenants. Minimum rental payments are recognized as rental revenues in the period when they are earned according to the applicable lease term. Effective January 1, 1995, the Company changed its accounting policy for percentage rent. Percentage rent revenues are based on store sales for certain periods and are charged according to a percentage over a stipulated amount of sales for the period according to the lease agreement. During the year ended December 31, 1994, and previously, percentage rent was recognized as rental revenues in the period when the actual percentage rent was billed and received. The new method recognizes percentage rent as rental revenues in the period when the actual percentage rent is earned. Effective January 1, 1995, the Company began estimating the percentage rent earned from major tenants and records the amounts monthly as receivable. The cumulative effect of this change on January 1, 1995 was to increase net earnings by $612,383. The Company believes that this revised policy is preferable since it provides a better matching of revenues and expenses.
Recognition of Revenue From Property Sales
Properties held for development or sale are primarily outparcels of operating properties or undeveloped commercial land.
Effective January 1, 1996 the Company changed its reporting of gains or losses on sales of properties held for sale. During the year ended December 31, 1995, and previously, gains or losses on sales of properties held for sale were included as revenues on the consolidated statement of operations and included in the calculation of earnings from operations. The Company is not in the business of buying land for resale. Therefore, management believes gains or losses on sales of properties held for sale should not be included in the calculation of earnings from operations, and should be an adjustment to earnings from operations to arrive at net earnings. This treatment was adopted in 1996 and the comparative prior year total revenues, earnings from operations and gains or losses on properties have been reclassified to reflect this change.
Net Earnings Per Share
Earnings per share are computed by dividing net earnings by the weighted average number of common shares and common share equivalent shares outstanding during each year. The effect on earnings per share assuming conversion of the convertible subordinated debentures would be anti-dilutive.
Capitalization Policy
Acquisition costs, interest and other carrying costs, as well as construction and start-up costs of commercial property are capitalized and charged to undeveloped land, construction in progress or deferred costs as appropriate. In addition, costs incurred in the financing and leasing of shopping centers and other commercial properties are deferred until the project is completed and are then amortized over the term of the related mortgage or lease.
Properties
In March 1995, the Financial Accounting Standards Board, ("FASB"), issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS No. 121"). SFAS No. 121 establishes new standards for measurement and recognition of impairment of long-lived assets. Initial adoption of the Statement by the Company in 1996 did not have a material effect on the financial position or results of operations reported by the Company.
Properties to be developed or held and used in operations are carried at cost reduced for impairment losses, where appropriate. Properties held for sale are carried at the lower or their carrying value (i.e. cost less accumulated depreciation and any impairment loss recognized, where applicable) or estimated fair value less cost to sell.
If events or circumstances indicate that the carrying value of an operating property to be held and used may be impaired, a recoverability analysis is performed based on estimated undiscounted future cash flows to be generated from the property. If the analysis indicates that the carrying value is not recoverable from future cash flows, the property is written down to estimated fair value and impairment loss is recognized.
Properties held for sale are carried at the lower of their carrying value (i.e. cost less accumulated depreciation and any impairment loss recognized, where applicable) or estimated fair value less cost to sell.
Depreciation of buildings and leaseholds is provided using the straight-line method over the estimated useful lives or lease terms of the properties. Improvements for tenants are amortized on a straight-line basis over the terms of the related tenant leases. Expenditures for normal maintenance and repairs are charged against income as incurred.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Stock-based Compensation
The Company uses the intrinsic value method to account for stock-based employee compensation plans. Under this method, compensation cost is recognized for awards of shares of common stock to employees only if the quoted market price of the stock at the grant date (or other measurement date, if later) is greater than the amount the employee must pay to acquire the stock.
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"). SFAS No. 123 permits companies to adopt a new fair value-based method to account for stock-based employee compensation plans or to continue using the intrinsic value method. Information required by SFAS No. 123 concerning the Company's stock-based compensation plan is provided in note L.
Income Taxes
The Company has elected to qualify, and intends to continue to qualify as a real estate investment trust, "REIT", pursuant to the Internal Revenue Code Sections 856 through 860, as amended. In general, under such Code provisions a trust which, in any taxable year, meets certain requirements and distributes to its shareholders at least 95% of its REIT taxable income will not be subject to Federal income tax to the extent of the income which it distributes.
Cash and Cash Equivalents
All highly liquid unrestricted investments with original maturities of three months or less are considered cash equivalents for purposes of the statements of cash flows.
Deferred Financing Costs
Costs associated with the issuance of debt are capitalized as deferred financing costs and amortized on a straight-line basis, which is not materially different from the interest method, over the term of the related debt.
Effective January 1, 1996 the Company changed its reporting of amortization of deferred financing costs. During the year ended December 31, 1995 and previously, the annual amortization of deferred financing costs was reported in the depreciation and amortization of property and improvements expense line on the consolidated statements of operations. In 1996, the Company began reporting the amortization of deferred financing costs in the interest expense line on the consolidated statements of operations. The comparative prior year interest and depreciation and amortization expense line items have been reclassified to reflect this change.
B. SUBSEQUENT EVENT
In February 1997, the Company registered to sell up to an aggregate of $150,000,000 (based on the public offering price) of common shares of beneficial interest and debt securities. The shares and debt may be issued from time to time at prices, in amounts and on terms to be determined at the time of offering. The net proceeds will be used for general corporate purposes and could be used for development, redevelopment and acquisition opportunities or on an interim basis, to reduce or retire credit line borrowings and property debt.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
C. OPERATING PROPERTIES
Operating properties consist of the following:
D. PROPERTIES AND RELATED ACCUMULATED DEPRECIATION AND AMORTIZATION AND MORTGAGES PAYABLE
A summary of all of the Company's properties and related mortgages payable at December 31, 1996 follows:
Mortgages payable aggregating $70,210,495 at December 31, 1996 bear interest rates ranging from 7.55% to 10.375% and mature in installments through 2011. Aggregate annual principal payments applicable to mortgages payable for the five years subsequent to December 31, 1996 are:
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
E. DEVELOPMENT OPERATIONS
Development operations consist of the following:
Development operations are transferred to operating property costs when a project is completed, at which time depreciation and amortization commences. Consruction period interest cost capitalized during 1996 and 1995 was approximately $104,000 and $570,000, respectively.
F. NOTES AND ACCOUNTS RECEIVABLE
The Company performs credit evaluations of prospective new tenants and requires security deposits where appropriate. Tenants compliance with the terms of the leases is monitored closely and the allowance for doubtful accounts is established based on an analysis of the risk of loss on specific tenants, historical trends, and other relevant information. Management believes adequate provision has been made for the Company's credit risk for all receivables.
G. DEFERRED FINANCING COSTS Deferred financing costs consist of the following:
H. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
I. NOTES PAYABLE Notes payable consist of the following:
The Company has an agreement with its primary bank that provides for a $40,000,000 secured line of credit. The agreement provides that as long as the Company is in compliance with all loan covenants, the loan maturity date, which at December 31, 1996 was December 31, 1999, will be extended one year automatically each year. Under the agreement, the Bank must give the Company two years notice should it decide to termiate the loan. Availability under the agreement is determined by the amount of collateral provided. At December 31, 1996, $40,000,000 was fully collateralized. The line bears interest at the prime rate. However, the Company has the option to fix the rate at LIBOR plus 1.125% for fixed periods from three to nine months. A stand-by fee is required by the bank for any unused portion of the line. The agreement contains covenants which provide for the maintenance of specified debt service ratios and minimum levels of net worth, and other requirements, among which is the requirement that the Company maintain its status as a REIT, and other normal conditions consistent with bank lines of credit.
Continued
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
I. NOTES PAYABLE - Continued
At December 31, 1996, the unused line of credit available to the Company, subject to compliance with all terms and conditions of the agreement and net of outstanding letters of credit of $494,021, was $23,106,000. The maximum level of borrowings under the line of credit was $21,500,000, $32,000,000 and $20,100,000 in 1996, 1995 and 1994, respectively. The average amounts of borrowings were approximately $11,710,000, $17,534,000, and $6,131,000, with weighted average interest rates approximating 7.1%, 7.8%, and 6.5%, in 1996, 1995 and 1994, respectively. The weighted average interest rate at December 31 was 6.9%, 7.8%, and 8.1% in 1996, 1995, and 1994, respectively.
J. CONVERTIBLE SUBORDINATED DEBENTURES
Effective September 11, 1993 the Company issued $60,000,000 of convertible subordinated debentures at 7.625% scheduled to mature in September, 2003. Interest on the debentures is paid semi-annually on March 15 and September 15. The debentures are convertible, unless previously redeemed, at any time prior to maturity into common shares of beneficial interest of the Company at $10.50 per share, subject to certain adjustments. In 1996, $12,785,000 in debentures were converted to 1,217,610 common shares of beneficial interest. In 1995, $20,000 in debentures were converted to 1,904 common shares of beneficial interest. The balance of the debentures, at December 31, 1996, of $47,195,000, convertible at $10.50 per share, if fully converted, would produce an additional 4,494,762 shares. Costs associated with the issuance of the debentures were approximately $2,410,000 at December 31, 1996 and are being amortized through 2003. The debentures are redeemable by the Company at any time on or after September 15, 1996, or at any time for certain reasons intended to protect the Company's REIT status, at 100% of the principal amount thereof, together with accrued interest. The debentures are subordinate to all mortgages payable. In January, 1997, $1,098,000 in debentures were converted to 104,560 common shares of beneficial interest reducing the balance of debentures to $46,097,000.
K. INCOME TAXES
As discussed in Note A, the Company plans to maintain its status as a REIT, and be taxed under Sections 856-860 of the Internal Revenue Code of 1986, as amended. In general terms, under such Code provisions a trust or corporation which, in any taxable year, meets certain requirements and distributes to its shareholders at least 95% of its taxable income will not be subject to Federal income tax to the extent of the income which it distributes.
A REIT will generally not be subject to federal income taxation for the portion of its income that qualifies as REIT taxable income to the extent that it distributes at least 95% of its taxable income to its shareholders and complies with certain other requirements. Accordingly, no provision has been made for federal income taxes for the Company and certain of its subsidiaries in the accompanying consolidated financial statements. At December 31, 1996, the income tax bases of the Company's assets and liabilities were approximately $153,000,000 and $ 141,000,000, respectively.
L. SHAREHOLDERS' EQUITY AND STOCK COMPENSATION PLAN
Preferred Shares At its inception on September 11, 1993, MART authorized 2,000,000 preferred shares of beneficial interest at a par value of $.01 per share. At December 31, 1996, none of these shares were issued and outstanding.
MART Incentive Stock Option Plans MART has an Omnibus Share Plan, (Plan), under which Trustees, officers and employees may be granted awards of stock options, stock appreciation rights, performance shares and restricted stock. The purpose of the Plan is to provide equity-based incentive compensation based on long-term appreciation in value of MART's shares and to promote the interests of MART and its shareholders by encouraging greater management ownership of MART's shares. Pursuant to the Plan, the Company authorized on February 1, 1994, the availability of 300,000 shares for the Plan. Upon inception at February 1, 1994, trustees, officers and key employees were granted 256,000 stock options. During 1995 additional grants and cancellations of stock options totaled 1,332 and 3,000, respectively. The outstanding stock options at December 31, 1996, totaling 254,332, allow holders to purchase one share of MART stock for $10.50 per share. All outstanding stock options were vested and exercisable at December 31, 1996. The closing price of MART shares at December 31, 1996 was $11.25 per share. No options were exercised during the period ended December 31, 1996 and, based on the market value of MART shares, the options, if exercised, would be dilutive producing 15,962 in additional weighted average shares for the year ended December 31, 1996.
Continued
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
L. SHAREHOLDERS' EQUITY AND STOCK COMPENSATION PLAN - Continued MART Incentive Stock Option Plans - Continued
On September 14, 1995, the Company authorized the availability of 180,000 shares for a new plan, the 1995 Stock Option Plan (New Plan). The New Plan granted options to purchase a number of shares equal to approximately 56% of the number awarded under the Plan, or 141,300. As options vest, they are priced at the market price on the close of business at that date. One third of the stock options, or 47,100, vested on September 30, 1995, exercisable at $8.9375 per share. An additional third of the options, or 47,100, vested on September 30, 1996, exercisable at $9.75 per share. The balance of the options will vest on September 30, 1997, to be priced at the market price on the close of business at that date. No options have been exercised and, based on the market value of MART shares, the options, if exercised, would be dilutive producing 16,955 in additional weighted average shares for the year ended December 31, 1996.
The Company applies the intrinsic value method in accounting for stock options and no compensation cost has been recognized for the issuance of options in the financial statements. Had the Company determined compensation cost based on the fair value at the grant date for stock options under SFAS No. 123, it would not have a material impact on the Company's net earnings or net earnings per share for 1996 and 1995.
Supplemental Pro Forma Earnings Per Share If the debenture conversions during 1996 and 1995 had taken place at January 1, 1994, primary net earnings per share would have been $.60, $.64 and $.52 for 1996, 1995 and 1994, respectively.
Acquisition of Outstanding Shares On February 14, 1995, the Board of Trustees approved a stock repurchase plan which authorizes the repurchase of up to approximately 310,000 shares. The Company purchased 277,200 shares during the year ended December 31, 1995 for $2,234,616, at an average cost of $8.06 per share. On February 12, 1996 the Board of Trustees increased by 100,000 the authorized number of shares that may be repurchased up to 410,000. During the year ended December 31, 1996 the Company purchased an additional 8,618 shares at an average cost of $9.45 per share.
M. COMMITMENTS
Lease Commitments Minimum rental commitments for operating land leases as of December 31, 1996 are as follows:
Certain of the leases contain renewal or purchase options. All of the leases require the Company to pay real estate taxes. Total annual minimum lease payments amounted to $601,000 in 1996, $262,000 in 1995 and $219,000 in 1994.
N. LEASES
The Company owns shopping centers and other commercial property which are leased, generally on a long-term basis. All leases are classified as operating leases. Future minimum lease payments receivable under noncancelable operating leases are as follows:
The minimum future lease payments do not include contingent rentals which may be paid under certain leases on the basis of a percentage of sales in excess of stipulated amounts. Contingent rentals amounted to $1,012,000 in 1996, $1,246,000, in 1995 and $1,206,000 in 1994. On a prospective basis, no more than 3% of rental revenue is derived from any one tenant, except Giant Food of Maryland, which is approximately 11% of rental revenue. Giant Food minimum lease payments represent approximately 14% for the years 1997 through 2001 and 41% thereafter of the total minimum lease payments above. The 41% percentage of total minimum lease payments is high due to the fact that Giant Food leases contain long lease terms compared with other major tenants who use renewal option terms. Renewal option minimum lease payments are not included in the totals above.
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MID-ATLANTIC REALTY TRUST & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
O. OTHER INCOME
Other income consists of the following:
P. GAIN ON LIFE INSURANCE PROCEEDS
In January, 1995, the Company received $1,002,000 in life insurance proceeds as a result of the death of a former BTR general partner and officer.
Q. GAIN (LOSS) ON PROPERTIES
Gain (loss) on properties consists of the following:
The net gains on properties held for sale and operating properties include minority interest expense of $96,049 and $21,194, respectively, for the year ended December 31, 1996.
R. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" (Statement 107) requires the Company to disclose estimated fair values for certain on- and off-balance sheet financial instruments. Fair value estimates, methods, and assumptions are set forth below for the Company's financial instruments as of December 31, 1996 and 1995.
Cash and Cash Equivalents The carrying amount for cash and cash equivalents approximates fair value due to the short maturity of these instruments.
Notes and Accounts Receivable The carrying amount for notes and accounts receivable approximates fair value due to the short maturity of these instruments.
Notes Payable The carrying amount for the line of credit approximates fair value due to its adjustable interest rate.
Mortgages Payable The fair value of mortgages payable was based on the discounted value of contractual cash flows. The discount rate for mortgages payable was estimated using the rate currently offered for borrowings of similar remaining maturities. The carrying amount and estimated fair value of mortgages payable at December 31, 1996 was $70,210,495 and $73,719,000 respectively, and at December 31, 1995 was $62,411,104 and $67,179,000, respectively.
Convertible Subordinated Debentures The fair value of convertible subordinated debentures was based on the discounted value of contractual cash flows. The discount rate for convertible subordinated debentures was estimated using the rate currently offered for borrowings of similar remaining maturities. The carrying amount and estimated fair value of convertible subordinated debentures at December 31, 1996 were $47,195,000 and at December 31, 1995 were $59,980,000 and $60,982,000, respectively.
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ITEM 9
ITEM 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None
PART III
ITEM 10
ITEM 10 Trustees and Executive Officers of the Registrant
The information with respect to the identity and business experience of the trustees of MART and their remuneration, in the definitive proxy statement (to be filed pursuant to Regulation 14A) with respect to the election of trustees at the 1997 annual meeting of shareholders, is incorporated herein by reference.
The Executive Officers of MART are as follows:
Each executive officer is elected for a term expiring at the next regular annual meeting of the Board of Trustees of the Company or until his successor is duly elected and qualified.
ITEM 11
ITEM 11 Executive Compensation
The information required by this item is incorporated by reference from the Registrant's Proxy Statement filed with respect to the 1997 annual meeting of shareholders.
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ITEM 12
ITEM 12 Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference from the Registrant's Proxy Statement filed with respect to the 1997 annual meeting of shareholders.
ITEM 13
ITEM 13 Certain Relationships and Related Transactions
The information required by this item is incorporated by reference from the Registrant's Proxy Statement filed with respect to the 1997 annual meeting of shareholders.
PART IV
ITEM 14
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements The following financial statements of Mid-Atlantic Realty Trust and Subsidiaries are included in Part II Item 8: Independent auditors' report Consolidated balance sheets at December 31, 1996 and 1995 Consolidated statements of operations for the years ended December 31, 1996, 1995, and 1994 Consolidated statements of shareholders' equity for years ended December 31, 1996, 1995 and 1994 Consolidated statements of cash flows for the years ended December 31, 1996, 1995 and 1994 Notes to consolidated financial statements (a) 2. Financial Statement Schedule Schedule III - Real estate and accumulated depreciation and amortization All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto. (a) 3. Exhibits Exhibit No. 3. Articles of Incorporation and by-laws. None. 4. Instrument Defining the Right of Shareholders. None. 9. Voting Trust Agreement. None. 11. Computations of net earnings per common share. Filed thru EDGAR. 12. Statement re: computation of ratios. Filed thru EDGAR. 13. Annual Report to Shareholders. Not applicable. 18. Letter regarding change in accounting principles. Not applicable. 19. Previously unfiled documents. Not applicable. 21. List of subsidiaries of registrant. Filed herewith 22. Published report regarding matters submitted to vote of security holders. Not applicable. 23. Consents of experts and counsel. Filed thru EDGAR. 24. Power of Attorney. Not applicable. 27. Financial Data Schedule Filed thru EDGAR. 28. Additional exhibits. Not applicable.
(b) Reports on Form 8-K. None.
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MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
(Continued)
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
(Continued)
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
(Continued)
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
(Continued)
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES Schedule III - Real Estate and Accumulated Depreciation
MID-ATLANTIC REALTY TRUST & SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Continued
(1) The changes in total cost of properties for the three years ended December 31, 1996 are as follows:
(2) The changes in accumulated depreciation for the three years ended December 31, 1996 are as follows:
(3) The aggregate basis of properties for Federal income tax purposes is approximately $147,000,000 at December 31, 1996. (4) See Item 2 for geographic location of properties. (5) Freestate includes 1 bowling center in Illinois.
EXHIBIT 21. PARENT AND SUBSIDIARIES OF REGISTRANT
The subsidiaries of MART are listed below. All are engaged in the ownership and/or development of commercial or residential real estate in the United States. All are included in the consolidated financial statements filed as part of this Annual Report.
(Continued)
EXHIBIT 21. PARENT AND SUBSIDIARIES OF REGISTRANT - Continued
The following are partnerships in which Mid-Atlantic Realty Trust, BTR Realty, Inc. or Financial Associates of Maryland have partnership interests:
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SIGNATURES
Pursuant to the requirements of Section 13 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.
MID-ATLANTIC REALTY TRUST
Date 3/24/97 /s/s F. Patrick Hughes F. Patrick Hughes, President
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated:
Date: 3/26/97 /s/s LeRoy E. Hoffberger LeRoy E. Hoffberger, Chairman
Date: 3/24/97 /s/s F. Patrick Hughes F. Patrick Hughes, Trustee, Principal Executive Officer
Date: 3/24/97 /s/s Paul G. Bollinger Paul G. Bollinger, Controller, Principal Financial Officer
Date: 3/24/97 /s/s Eugene T. Grady Eugene T. Grady, Treasurer
Date: 3/26/97 /s/s Robert A. Frank Robert A. Frank, Trustee
Date: 3/26/97 /s/s Marc P. Blum Marc P. Blum, Trustee
Date: 3/26/97 /s/s M. Ronald Lipman M. Ronald Lipman, Trustee
Date: 3/25/97 /s/s Stanley J. Moss, Esquire Stanley J. Moss, Esquire, Trustee
Date: 3/26/97 /s/s Daniel S. Stone Daniel S. Stone, Trustee
Date: 3/26/97 /s/s David F. Benson David F. Benson, Trustee