Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
July 28, 2011
Paladin Realty Income Properties, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland | 000-51860 | 20-0378980 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10880 Wilshire Blvd., Suite 1400, Los Angeles, California 90024
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (310) 996-8704
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 9.01 | Financial Statements and Exhibits. |
Paladin Realty Income Properties, Inc. (the Company) previously filed a Current Report on Form 8-K on August 3, 2011 reporting its acquisition of an indirect interest in Coursey Place Apartments, located in Baton Rouge, Louisiana. The Company is filing this Current Report on Form 8-K/A to provide the financial information required by Item 9.01 of Form 8-K. The Company is also filing this Current Report on Form 8-K/A to file certain documents related to the Companys acquisition of its indirect interest in Coursey Place Apartments.
After reasonable inquiry, the Company is not aware of any material factors relating to Coursey Place Apartments that would cause the reported revenues and certain operating expenses relating to it on this Form 8-K/A not to be necessarily indicative of future operating results.
(a) Financial Statements of Real Estate Property Acquired.
The following financial statements are submitted at the end of this Current Report on Form 8-K/A and are filed herewith and incorporated herein by reference.
Coursey Place Apartments
(b) Unaudited Pro Forma Financial Information.
The following financial information is submitted at the end of this Current Report on Form 8-K/A and is furnished herewith and incorporated herein by reference.
Paladin Realty Income Properties, Inc. and Subsidiaries
(d) Exhibits.
10.1 | Contribution Agreement, dated July 28, 2011, by PRIP Coursey LLC, Charles M. Thompson and Evergreen at Coursey Place, Sole Member LLC. | |
10.2 | Amended and Restated Operating Agreement of Evergreen at Coursey Place, Sole Member, LLC, dated July 28, 2011, by and between PRIP Coursey, LLC and ERES Coursey LLC. | |
10.3 | Multifamily Mortgage, Assignment of Rents and Security Agreement, effective as of July 28, 2011, by Evergreen at Coursey Place, LLC, in favor of Deutsche Bank Berkshire Mortgage, Inc. | |
10.4 | Multifamily Note dated July 28, 2011 made by Evergreen at Coursey Place, LLC in favor of Deutsche Bank Berkshire Mortgage, Inc. | |
10.5 | Guaranty, dated July 28, 2011, by Charles M. Thompson in favor of Deutsche Bank Berkshire Mortgage, Inc. | |
10.6 | Agreement to Amend or Comply, dated July 28, 2011 by Evergreen at Coursey Place, LLC in favor of Deutsche Bank Berkshire Mortgage, Inc. | |
10.7 | Replacement Reserve Agreement, dated July 28, 2010, by and between Evergreen at Coursey Place, LLC and Deutsche Bank Berkshire Mortgage, Inc. | |
10.8 | Assignment of Management Agreement and Subordination of Management Fees, dated July 28, 2011, by and among Evergreen at Coursey Place, LLC, Deutsche Bank Berkshire Mortgage, Inc. and Pegasus Residential, LLC. | |
10.9 | Assignment of Security Instrument, dated July 28, 2011, by Deutsche Bank Berkshire Mortgage, Inc. in favor of Federal Home Loan Mortgage Corporation. |
SIGNATURES
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 hereunto duly authorized.
PALADIN REALTY INCOME PROPERTIES, INC. | ||||
Date: October 11, 2011 | By: | /s/ John A. Gerson | ||
John A. Gerson | ||||
Chief Financial Officer |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of
Paladin Realty Income Properties, Inc.
We have audited the accompanying Statement of Revenues and Certain Operating Expenses of Evergreen at Coursey Place Apartments, a property located at 13675 Coursey Boulevard., Baton Rouge, Louisiana (the Property) for the year ended December 31, 2010 (the Historical Summary). This Historical Summary is the responsibility of the Propertys management. Our responsibility is to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. 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 Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Propertys revenues and operating expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the revenues and certain operating expenses of the Property for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.
/s/ Imowitz Koenig & Co., LLP |
New York, New York
October 10, 2011
F-1
Evergreen at Coursey Place Apartments
Statement of Revenues and Certain Operating Expenses
For the Year Ended December 31, 2010
100% Ownership |
PRIP Coursey, LLCs 51.7% Ownership Interest |
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Revenues |
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Rental income |
$ | 3,768,636 | $ | 1,948,385 | ||||
Other revenue |
141,272 | 73,038 | ||||||
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Total revenues |
3,909,908 | 2,021,423 | ||||||
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Certain operating expenses |
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Operating expenses |
1,313,549 | 679,105 | ||||||
Real estate taxes |
285,893 | 147,807 | ||||||
Management fees |
137,372 | 71,021 | ||||||
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Total of certain operating expenses |
1,736,814 | 897,933 | ||||||
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Excess of revenues over certain operating expenses |
$ | 2,173,094 | $ | 1,123,490 | ||||
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See accompanying notes to the statement of revenues
and certain operating expenses.
F-2
Evergreen at Coursey Place Apartments
Notes to the Statement of Revenues and Certain Operating Expenses
For the Year Ended December 31, 2010
(1) | Organization |
Evergreen at Coursey Place Apartments is an existing 352 unit multifamily community property (the Property) which was built in 2003 and is located at 13675 Coursey Boulevard., Baton Rouge, Louisiana. On July 28, 2011, an affiliate of Paladin Realty Income Properties, Inc. (Paladin), PRIP Coursey, LLC (PRIP Coursey), entered into a joint venture with Thompson LLC (Thompson). PRIP Coursey owns a 51.7% interest and Thompson owns the remaining 48.3%, respectively.
(2) | Basis of Presentation |
The Statement of Revenues and Certain Operating Expenses (the Historical Summary) has been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the SEC), which requires certain information with respect to real estate operations to be included with filings with the SEC. The Historical Summary includes revenues and certain operating expenses of the Property, exclusive of interest income, interest expense, depreciation and amortization, and non-recurring items which may not be comparable to the corresponding amounts reflected in the future operations of the Property. The Historical Summary also presents revenues and certain operating expenses of the Property allocable to PRIP Courseys 51.7% ownership interest.
(3) | Principles of Reporting and Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Propertys 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.
(4) | Significant Accounting Policies |
a) | Revenue Recognition |
The Propertys lease agreements are operating leases. Rental income is recognized in accordance with the terms of each lease. Other revenue consists of various tenant related charges and are recognized as revenue in the period in which the applicable charge is incurred.
b) | Accounts Receivable |
Bad debts are recorded under the specific identification method, whereby, uncollectible receivables are directly written off when identified.
c) | Repairs and Maintenance |
Expenditures for repairs and maintenance are expensed as incurred.
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of
Paladin Realty Income Properties, Inc.
We have reviewed the accompanying Statement of Revenues and Certain Operating Expenses of Evergreen at Coursey Place Apartments, a property located at 13675 Coursey Boulevard, Baton Rouge, Louisiana (the Property) for the six months ended June 30, 2011 (the Historical Summary). This Historical Summary is the responsibility of the Propertys management.
We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of the interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in note 2 and is not intended to be a complete presentation of the Propertys revenues and operating expenses.
Based on our review, we are not aware of any material modifications that should be made to the accompanying interim Historical Summary for it to be in conformity with accounting principles generally accepted in the United States of America.
/s/ Imowitz Koenig & Co., LLP |
New York, New York
October 10, 2011
F-4
Evergreen at Coursey Place Apartments
Statement of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2011
100% Ownership |
PRIP Coursey, LLCs 51.7% Ownership Interest |
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Revenues |
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Rental income |
$ | 1,865,467 | $ | 964,446 | ||||
Other revenue |
153,750 | 79,489 | ||||||
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Total revenues |
2,019,217 | 1,043,935 | ||||||
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Certain operating expenses |
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Operating expenses |
663,670 | 343,117 | ||||||
Real estate taxes |
150,094 | 77,599 | ||||||
Management fees |
69,760 | 36,066 | ||||||
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Total of certain operating expenses |
883,524 | 456,782 | ||||||
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Excess of revenues over certain operating expenses |
$ | 1,135,693 | $ | 587,153 | ||||
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See accompanying notes to the statement of revenues
and certain operating expenses.
F-5
Evergreen at Coursey Place Apartments
Notes to the Statement of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2011
(1) | Organization |
Evergreen at Coursey Place Apartments is an existing 352 unit multifamily community property (the Property) which was built in 2003 and is located at 13675 Coursey Boulevard, Baton Rouge, Louisiana. On July 28, 2011, an affiliate of Paladin Realty Income Properties, Inc. (Paladin), PRIP Coursey, LLC (PRIP Coursey), entered into a joint venture with Thompson LLC (Thompson). PRIP Coursey owns a 51.7% interest and Thompson owns the remaining 48.3%, respectively.
(2) | Basis of Presentation |
The Statement of Revenues and Certain Operating Expenses (the Historical Summary) has been prepared for the purpose of complying with the provisions of Article 3-14 of Regulation S-X promulgated by the Securities and Exchange Commission (the SEC), which requires certain information with respect to real estate operations to be included with filings with the SEC. The Historical Summary includes revenues and certain operating expenses of the Property, exclusive of interest income, interest expense, depreciation and amortization, and non-recurring items which may not be comparable to the corresponding amounts reflected in the future operations of the Property. The Historical Summary also presents revenues and certain operating expenses of the Property allocable to PRIP Courseys 51.7% ownership interest.
(3) | Principles of Reporting and Use of Estimates |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Propertys 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.
(4) | Significant Accounting Policies |
a) | Revenue Recognition |
The Propertys lease agreements are operating leases. Rental income is recognized in accordance with the terms of each lease. Other revenue consists of various tenant related charges and are recognized as revenue in the period in which the applicable charge is incurred.
b) | Accounts Receivable |
Bad debts are recorded under the specific identification method, whereby, uncollectible receivables are directly written off when identified.
c) | Repairs and Maintenance |
Expenditures for repairs and maintenance are expensed as incurred.
F-6
PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES
SUMMARY OF UNAUDITED PRO FORMA FINANCIAL STATEMENTS
This pro forma information should be read in conjunction with the consolidated financial statements and notes of Paladin Realty Income Properties, Inc. (Paladin REIT) included in Paladin REITs Form 10-K for the fiscal year ended December 31, 2010 and Paladin REITs Form 10-Q for the quarterly period ended June 30, 2011, as filed with the Securities and Exchange Commission.
The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2011 has been prepared to give effect to the acquisition by PRIP Coursey, LLC (Coursey) of a 51.7% interest in Evergreen at Coursey Place Sole Member, LLC (Evergreen at Coursey Place), which owns the Evergreen at Coursey Place Apartments, located at 13675 Coursey Boulevard, Baton Rouge, Louisiana, as if the Coursey Place acquisition occurred on June 30, 2011. The actual acquisition of Coursey Place occurred on July 28, 2011. Paladin Realty Income Properties, L.P. (Paladin OP) is a Delaware limited partnership that was organized to own and operate properties on behalf of Paladin REIT and is a consolidated subsidiary of Paladin REIT. The 51.7% membership interest in Evergreen at Coursey Place is held by Coursey, a Delaware limited liability company and wholly-owned subsidiary of Paladin OP.
The following unaudited pro forma condensed consolidated statements of operations for (i) the six months ended June 30, 2011 and (ii) for the year ended December 31, 2010 have been prepared to give effect to (1) the acquisition by DT Stone Ridge, LLC , a single-purpose limited liability company in which Paladin REIT holds a 68.5% membership interest, of Stone Ridge Apartments, located at 1000 Watermark Place, Columbia, South Carolina and (2) the Coursey Place acquisition, as if the Stone Ridge and Coursey Place acquisitions had occurred on January 1, 2010. The actual acquisition of Stone Ridge occurred on March 29, 2011 and the actual acquisition of Coursey Place occurred on July 28, 2011.
These unaudited pro forma financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition been consummated as of the dates indicated. In addition, the pro forma balance sheet includes pro forma allocations of the purchase price based upon preliminary estimates of the fair market value of the assets and liabilities acquired in connection with the acquisition. These allocations may be adjusted in the future upon finalization of these preliminary estimates.
F-7
PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 2011
(UNAUDITED)
Pro Forma Adjustments | ||||||||||||
Paladin Realty
Income Properties, Inc and Subsidiaries Historical (a) |
Acquisition | Pro Forma Total |
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Coursey Place Apartments |
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Assets | ||||||||||||
Real estate: |
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Buildings and improvements |
$ | 124,053,253 | $ | 33,194,505 | (b) | $ | 157,247,758 | |||||
Land |
34,770,148 | 3,876,495 | (b) | 38,646,643 | ||||||||
Furniture, fixtures and equipment |
5,623,081 | | 5,623,081 | |||||||||
In-place leases |
114,735 | 129,000 | (b) | 243,735 | ||||||||
Tenant improvements |
1,072,376 | | 1,072,376 | |||||||||
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165,633,593 | 37,200,000 | 202,833,593 | ||||||||||
Less: Accumulated depreciation and amortization |
(14,616,084 | ) | | (14,616,084 | ) | |||||||
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Total real estate, net |
151,017,509 | 37,200,000 | 188,217,509 | |||||||||
Investment in real estate joint venture |
17,798 | | 17,798 | |||||||||
Cash and cash equivalents |
10,055,788 | (5,067,524 | ) (d) | 4,988,264 | ||||||||
Restricted cash |
3,676,847 | 250,072 | (b) | 3,926,919 | ||||||||
Prepaid expenses and other assets, net |
3,641,729 | 238,234 | (b) | 3,879,963 | ||||||||
Due from affiliate |
141,146 | | 141,146 | |||||||||
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Total Assets |
$ | 168,550,817 | $ | 32,620,782 | $ | 201,171,599 | ||||||
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Liabilities and Shareholders Equity | ||||||||||||
Mortgages and notes payable |
$ | 124,770,117 | $ | 28,500,000 | (c) | $ | 153,270,117 | |||||
Unaccepted subscriptions for common shares |
1,715,019 | 1,715,019 | ||||||||||
Accrued expenses and other liabilities |
3,431,959 | 80,928 | 3,512,887 | |||||||||
Dividends payable |
591,903 | 591,903 | ||||||||||
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Total liabilities |
130,508,998 | 28,580,928 | 159,089,926 | |||||||||
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Equity: |
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Company Stockholders Equity: |
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Preferred shares, $0.01 par value, 10,000,000 shares authorized; none issued or outstanding |
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Common shares, $0.01 par value, 85,526,316 shares authorized; 5,979,943 shares issued and outstanding as of June 30, 2011 |
59,799 | | 59,799 | |||||||||
Additional paid-in-capital |
52,392,143 | | 52,392,143 | |||||||||
Accumulated deficit and dividends |
(23,295,689 | ) | (466,399 | ) (e) | (23,762,088 | ) | ||||||
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Total Company Stockholders Equity |
29,156,253 | (466,399 | ) | 28,689,854 | ||||||||
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Noncontrolling interests |
8,885,566 | 4,506,253 | 13,391,819 | |||||||||
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Total Equity |
38,041,819 | 4,039,854 | 42,081,673 | |||||||||
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TOTAL LIABILITIES AND EQUITY |
$ | 168,550,817 | $ | 32,620,782 | $ | 201,171,599 | ||||||
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(a) | Historical financial information is derived from the unaudited consolidated financial statements of Paladin REIT as of June 30, 2011 which are included in Paladin REITs previously filed quarterly report on Form 10-Q for the six months ended June 30, 2011. |
(b) | To record the pro forma effect of the acquisition of Coursey Place Apartments, assuming that the acquisition had occurred on June 30, 2011. |
(c) | Reflects the mortgage loan associated with the acquisition of Coursey Place Apartments, assuming the acquisition had occurred on June 30, 2011. |
(d) | Reflects the net change in cash and cash equivalents contributed to Paladin OP for the acquisition of Coursey Place Apartments, assuming that the acquisition had occurred on June 30, 2011. |
(e) | Reflects costs associated with the acquisition of Coursey Place Apartments that are to be expensed rather then capitalized upon acquisition. |
F-8
PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2011
(UNAUDITED)
Pro Forma Adjustments | ||||||||||||||||
Paladin Realty
Income Properties, Inc and Subsidiaries Historical (a) |
Acquisitions | |||||||||||||||
Stone Ridge Apartments |
Coursey Place Apartments |
Pro Forma Total |
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Revenues | ||||||||||||||||
Rental income |
$ | 9,743,897 | $ | 245,814 | (b) | $ | 1,865,467 | (e) | $ | 11,855,178 | ||||||
Other income |
997,862 | 25,298 | (b) | 153,750 | (e) | 1,176,910 | ||||||||||
Interest income |
8,512 | | | 8,512 | ||||||||||||
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Total Revenues |
10,750,271 | 271,112 | 2,019,217 | 13,040,600 | ||||||||||||
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Expenses | ||||||||||||||||
Property operating expenses |
4,138,948 | 190,012 | (b) | 733,430 | (e) | 5,062,390 | ||||||||||
Real property taxes |
881,765 | 46,251 | (b) | 150,094 | (e) | 1,078,110 | ||||||||||
General and administrative expenses |
701,543 | 3,186 | (b) | 29,615 | (e) | 734,344 | ||||||||||
Interest expense, including amortization of deferred financing costs |
3,868,498 | 68,841 | (c) | 737,595 | (f) | 4,674,934 | ||||||||||
Depreciation and amortization expense |
2,471,212 | 56,138 | (b) | 448,572 | (e) | 2,975,922 | ||||||||||
Acquisition costs |
364,877 | | | 364,877 | ||||||||||||
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Total Expenses |
12,426,843 | 364,428 | 2,099,306 | 14,890,577 | ||||||||||||
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Loss before equity in earnings and noncontrolling interests |
(1,676,572 | ) | (93,316 | ) | (80,089 | ) | (1,849,977 | ) | ||||||||
Equity in income from real estate joint venture |
174,787 | | | 174,787 | ||||||||||||
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Net loss |
(1,501,785 | ) | (93,316 | ) | (80,089 | ) | (1,675,190 | ) | ||||||||
Noncontrolling interests |
437,991 | 28,577 | (d) | 24,554 | (g) | 491,122 | ||||||||||
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Net loss attributable to Company |
$ | (1,063,794 | ) | $ | (64,739 | ) | $ | (55,535 | ) | $ | (1,184,068 | ) | ||||
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Net loss per common share |
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Basic |
$ | (0.19 | ) | $ | (0.22 | ) | ||||||||||
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Diluted |
$ | (0.19 | ) | $ | (0.22 | ) | ||||||||||
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Weighted average number of common shares outstanding |
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Basic |
5,482,619 | 5,482,619 | ||||||||||||||
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Diluted |
5,482,619 | 5,482,619 | ||||||||||||||
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(a) | Historical financial information is derived from the unaudited consolidated financial statements of Paladin REIT as of June 30, 2011 which are included in Paladin REITs previously filed quarterly report on Form 10-Q for the six months ended June 30, 2011. |
(b) | Pro forma results of Stone Ridge Apartments, assuming the acquisition of Stone Ridge Apartments had occurred on January 1, 2010. General and administrative expenses includes Paladin REITs asset management fees of $3,186. Stone Ridge Apartments was acquired on March 29, 2011. |
(c) | Interest expense on Stone Ridge Apartments mortgage payable of $2,500,000 at 6.5% per annum plus amortization of deferred financing costs of $12,573 assuming the acquisition had occurred on January 1, 2010 |
(d) | Noncontrolling interests is adjusted to reflect pro forma ownership of 0.3% of Paladin OP by Paladin Realty Advisors, LLC and the ownership of Stone Ridge Apartments by DT Columbia SC Management, LLC of 31.5%, unaffiliated third party. |
(e) | Pro forma results of Coursey Place Apartments, assuming the acquisition of Coursey Place Apartments had occurred on January 1, 2010. General and administrative expenses includes Paladin REITs asset management fees of $29,615. Coursey Place Apartments was acquired on July 28, 2011. |
(f) | Interest expense on Coursey Place Apartments mortgage payable of $28,500,000 at 5.07% per annum plus amortization of deferred financing costs of $11,106 assuming the acquisition had occurred on January 1, 2010 |
(g) | Noncontrolling interests is adjusted to reflect pro forma ownership of 0.3% of Paladin OP by Paladin Realty Advisors, LLC and the ownership of Coursey Place Apartments by ERES Coursey, LLC of 48.3%, unaffiliated third party. |
F-9
PALADIN REALTY INCOME PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
(UNAUDITED)
Pro Forma Adjustments | ||||||||||||||||
Paladin Realty
Income Properties, Inc and Subsidiaries Historical (a) |
Acquisitions | |||||||||||||||
Stone Ridge Apartments |
Coursey Place Apartments |
Pro Forma Total |
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Revenues | ||||||||||||||||
Rental income |
$ | 18,252,403 | $ | 983,256 | (b) | $ | 3,768,636 | (e) | $ | 23,004,295 | ||||||
Other income |
1,786,841 | 101,192 | (b) | 141,272 | (e) | 2,029,305 | ||||||||||
Interest income |
9,695 | | | 9,695 | ||||||||||||
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Total Revenues |
20,048,939 | 1,084,448 | 3,909,908 | 25,043,295 | ||||||||||||
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Expenses | ||||||||||||||||
Property operating expenses |
8,093,028 | 760,048 | (b) | 1,450,921 | (e) | 10,303,997 | ||||||||||
Real property taxes |
1,574,103 | 185,004 | (b) | 285,893 | (e) | 2,045,000 | ||||||||||
General and administrative expenses |
1,587,251 | 12,745 | (b) | 59,230 | (e) | 1,659,226 | ||||||||||
Interest expense, including amortization of deferred financing costs |
7,624,089 | 275,364 | (c) | 1,487,231 | (f) | 9,386,684 | ||||||||||
Depreciation and amortization expense |
5,258,133 | 224,552 | (b) | 1,026,144 | (e) | 6,508,829 | ||||||||||
Acquisition costs |
| | 625,449 | 625,449 | ||||||||||||
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|
|
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Total Expenses |
24,136,604 | 1,457,713 | 4,934,868 | 30,529,185 | ||||||||||||
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|
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Loss before equity in earnings and noncontrolling interests |
(4,087,665 | ) | (373,265 | ) | (1,024,960 | ) | (5,485,890 | ) | ||||||||
Equity in income from real estate joint venture |
83,519 | | | 83,519 | ||||||||||||
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Net (loss) income |
(4,004,146 | ) | (373,265 | ) | (1,024,960 | ) | (5,402,371 | ) | ||||||||
Noncontrolling interests |
1,178,012 | 114,307 | (d) | 325,607 | (g) | 1,617,926 | ||||||||||
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Net (loss) income attributable to Company |
$ | (2,826,134 | ) | $ | (258,958 | ) | $ | (699,353 | ) | $ | (3,784,445 | ) | ||||
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Net loss per common share |
||||||||||||||||
Basic |
$ | (0.59 | ) | $ | (0.79 | ) | ||||||||||
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Diluted |
$ | (0.59 | ) | $ | (0.79 | ) | ||||||||||
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Weighted average number of common shares outstanding |
||||||||||||||||
Basic |
4,787,071 | 4,787,071 | ||||||||||||||
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|
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Diluted |
4,787,071 | 4,787,071 | ||||||||||||||
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|
(a) | Historical financial information is derived from the audited consolidated financial statements of Paladin REIT for the year ended December 31, 2010 which are included in Paladin REITs previously filed annual report on Form 10-K for the year ended December 31, 2010. |
(b) | Pro forma results of Stone Ridge Apartments, assuming the acquisition of Stone Ridge Apartments had occurred on January 1, 2010. General and administrative expenses includes Paladin REITs asset management fees of $12,745. Stone Ridge Apartments was acquired on March 29, 2011. |
(c) | Interest expense on Stone Ridge Apartments mortgage payable of $2,500,000 at 6.5% per annum plus amortization of deferred financing costs of $50,292 assuming the acquisition had occurred on January 1, 2010 |
(d) | Noncontrolling interests is adjusted to reflect pro forma ownership of 0.3% of Paladin OP by Paladin Realty Advisors, LLC and the ownership of Stone Ridge Apartments by DT Columbia SC Management, LLC of 31.5%, unaffiliated third party. |
(e) | Pro forma results of Coursey Place Apartments, assuming the acquisition of Coursey Place Apartments had occurred on January 1, 2010. General and administrative expenses includes Paladin REITs asset management fees of $59,230. Coursey Place Apartments was acquired on July 28, 2011. |
(f) | Interest expense on Coursey Place Apartments mortgage payable of $28,500,000 at 5.07% per annum plus amortization of deferred financing costs of $22,212 assuming the acquisition had occurred on January 1, 2010 |
(g) | Noncontrolling interests is adjusted to reflect pro forma ownership of 0.3% of Paladin OP by Paladin Realty Advisors, LLC and the ownership of Coursey Place Apartments by ERES Coursey, LLC of 48.3%, unaffiliated third party. |
F-10