UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of Report (Date of earliest event reported): August 16, 2016
Behringer Harvard Opportunity REIT II, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
Maryland |
|
000-53650 |
|
20-8198863 |
|
(State or other jurisdiction of incorporation |
|
(Commission File Number) |
|
(I.R.S. Employer |
15601 Dallas Parkway, Suite 600, Addison, Texas
75001
(Address of principal executive offices)
(Zip Code)
(866) 655-3650
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.01 Completion of Acquisition or Disposition of Assets.
On August 16, 2016, 7425 La Vista, LLC, an indirect wholly-owned subsidiary of Behringer Harvard Opportunity REIT II, Inc. (the “Registrant” or “we”) sold a 435-unit multifamily community in Dallas, Texas, (“Lakewood Flats”), to an unaffiliated third party. The contract sales price was $68.8 million. A portion of the proceeds from the sale of the asset were used to pay off in full the existing indebtedness of approximately $33.5 million secured by the property.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Financial Information
On August 16, 2016, we sold Lakewood Flats to an unsolicited unaffiliated entity for a contract sales price of $68.8 million. A portion of the proceeds from the sale of the asset were used to pay off in full the existing indebtedness of approximately $33.5 million secured by the property.
The following unaudited pro forma consolidated financial information gives effect to the disposition of Lakewood Flats as if we had sold it on January 1, 2015. In our opinion, all material adjustments necessary to reflect the effects of the above transactions have been made.
Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of June 30, 2016
(in thousands, except shares)
The following unaudited Pro Forma Consolidated Balance Sheet is presented as if we had disposed of Lakewood Flats as of June 30, 2016. This Pro Forma Consolidated Balance Sheet should be read in conjunction with our Pro Forma Consolidated Statement of Operations and our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the six months ended June 30, 2016. The Pro Forma Consolidated Balance Sheet is unaudited and is not necessarily indicative of what the actual financial position would have been had we completed the above transaction on June 30, 2016, nor does it purport to represent our future financial position.
|
|
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June 30, 2016 |
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Lakewood Flats |
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Pro Forma |
| |||
|
|
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As Reported |
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Proforma Adjsutments |
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June 30, 2016 |
| |||
|
|
|
(a) |
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(b) |
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|
| |||
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Assets |
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|
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|
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|
| |||
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Real estate |
|
|
|
|
|
|
| |||
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Land and improvements, net |
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$ |
43,014 |
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— |
|
43,014 |
| ||
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Buildings and improvements, net |
|
134,977 |
|
— |
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134,977 |
| |||
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Total real estate |
|
177,991 |
|
— |
|
177,991 |
| |||
|
|
|
|
|
|
|
|
| |||
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Assets associated with real estate held for sale |
|
55,797 |
|
(55,797 |
) |
— |
| |||
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Cash and cash equivalents |
|
38,896 |
|
32,328 |
|
71,224 |
| |||
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Restricted cash |
|
5,230 |
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— |
|
5,230 |
| |||
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Accounts receivable, net |
|
1,642 |
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— |
|
1,642 |
| |||
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Prepaid expenses and other assets |
|
573 |
|
(35 |
) |
538 |
| |||
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Investment in unconsolidated joint venture |
|
14,658 |
|
— |
|
14,658 |
| |||
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Furniture, fixtures and equipment, net |
|
4,041 |
|
— |
|
4,041 |
| |||
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Lease intangibles, net |
|
336 |
|
— |
|
336 |
| |||
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Total assets |
|
$ |
299,164 |
|
$ |
(23,504 |
) |
$ |
275,661 |
|
|
|
|
|
|
|
|
|
| |||
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Liabilities and Equity |
|
|
|
|
|
|
| |||
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Notes payable, net |
|
$ |
143,229 |
|
$ |
— |
|
143,229 |
| |
|
Accounts payable |
|
686 |
|
— |
|
686 |
| |||
|
Payables to related parties |
|
309 |
|
— |
|
309 |
| |||
|
Acquired below-market leases, net |
|
72 |
|
|
|
72 |
| |||
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Distributions payable to noncontrolling interest |
|
18 |
|
|
|
18 |
| |||
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Income taxes payable |
|
967 |
|
|
|
967 |
| |||
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Accrued and other liabilities |
|
7,371 |
|
(966 |
) |
6,405 |
| |||
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Obligations associated with real estate held for sale |
|
33,335 |
|
(33,335 |
) |
— |
| |||
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Total liabilities |
|
185,987 |
|
(34,301 |
) |
151,686 |
| |||
|
|
|
|
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|
|
|
| |||
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Commitments and contingencies |
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|
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|
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| |||
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Equity |
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|
| |||
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Preferred stock, $.0001 par value per share; 50,000,000 shares authorized, none outstanding |
|
— |
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— |
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— |
| |||
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Convertible stock, $.0001 par value per share; 1,000 shares authorized, 1,000 outstanding |
|
— |
|
— |
|
— |
| |||
|
Common stock, $.0001 par value per share; 350,000,000 shares authorized, 25,453,730 shares issued and outstanding at June 30, 2016 |
|
3 |
|
— |
|
3 |
| |||
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Additional paid-in capital |
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229,116 |
|
— |
|
229,116 |
| |||
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Accumulated distributions and net loss |
|
(121,847 |
) |
10,797 |
|
(111,050 |
) | |||
|
Accumulated other comprehensive loss |
|
(303 |
) |
— |
|
(303 |
) | |||
|
Total Behringer Harvard Opportunity REIT II, Inc. equity |
|
106,969 |
|
10,797 |
|
117,767 |
| |||
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Noncontrolling interest |
|
6,208 |
|
— |
|
6,208 |
| |||
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Total equity |
|
113,177 |
|
10,797 |
|
123,974 |
| |||
|
Total liabilities and equity |
|
$ |
299,164 |
|
$ |
(23,504 |
) |
$ |
275,660 |
|
See Notes to Pro Forma Consolidated Financial Statements.
Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Six Months Ended June 30, 2016
(in thousands, except per share amounts)
The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of Lakewood Flats as of January 1, 2015. This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our quarterly report on Form 10-Q for the six months ended June 30, 2016. The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on January 1, 2015 nor does it purport to represent our future operations.
|
|
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Six Months Ended |
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Lakewood Flats |
|
Pro Forma |
| |||
|
|
|
June 30, 2016 |
|
Pro Forma |
|
Six Months Ended |
| |||
|
|
|
As Reported |
|
Adjustments |
|
June 30, 2016 |
| |||
|
|
|
(a) |
|
(b) |
|
|
| |||
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Revenues |
|
|
|
|
|
|
| |||
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Rental revenue |
|
$ |
14,850 |
|
$ |
(3,241 |
) |
$ |
11,609 |
|
|
Hotel revenue |
|
9,293 |
|
— |
|
9,293 |
| |||
|
|
|
|
|
|
|
|
| |||
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Total revenues |
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24,143 |
|
(3,241 |
) |
20,902 |
| |||
|
|
|
|
|
|
|
|
| |||
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Expenses: |
|
|
|
|
|
|
| |||
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Property operating expenses |
|
4,493 |
|
(665 |
) |
3,828 |
| |||
|
Hotel operating expenses |
|
6,710 |
|
— |
|
6,710 |
| |||
|
Interest expense, net |
|
3,131 |
|
(384 |
) |
2,747 |
| |||
|
Real estate taxes |
|
2,916 |
|
(792 |
) |
2,124 |
| |||
|
Property management fees |
|
790 |
|
(96 |
) |
694 |
| |||
|
Asset management fees |
|
1,219 |
|
(222 |
) |
997 |
| |||
|
General and administrative |
|
1,541 |
|
— |
|
1,541 |
| |||
|
Depreciation and amortization |
|
5,780 |
|
(577 |
) |
5,203 |
| |||
|
Total expenses |
|
26,580 |
|
(2,736 |
) |
23,844 |
| |||
|
|
|
|
|
|
|
|
| |||
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Interest income, net |
|
33 |
|
(1 |
) |
32 |
| |||
|
Other income (expense) |
|
211 |
|
— |
|
211 |
| |||
|
|
|
|
|
|
|
|
| |||
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Net loss |
|
(2,193 |
) |
(506 |
) |
(2,699 |
) | |||
|
|
|
|
|
|
|
|
| |||
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Net (income) attributable to the noncontrolling interest |
|
(45 |
) |
— |
|
(45 |
) | |||
|
|
|
|
|
|
|
|
| |||
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Net loss attributable to the Company |
|
$ |
(2,238 |
) |
$ |
(506 |
) |
$ |
(2,744 |
) |
|
|
|
|
|
|
|
|
| |||
|
Loss per share |
|
$ |
(0.09 |
) |
|
|
$ |
(0.11 |
) | |
|
Weighted average shares outstanding |
|
25,510 |
|
|
|
25,510 |
| |||
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
Behringer Harvard Opportunity REIT II, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2015
(in thousands, except per share amounts)
The following unaudited Pro Forma Consolidated Statement of Operations is presented as if we had disposed of Lakewood Flats as of January 1, 2015. This Pro Forma Consolidated Statement of Operations should be read in conjunction with our historical financial statements and notes thereto as filed in our annual report on Form 10-K for the year ended December 31, 2015. The Pro Forma Consolidated Statement of Operations does not include nonrecurring items, is unaudited and is not necessarily indicative of what the actual results of operations would have been had we completed the above transaction on January 1, 2015 nor does it purport to represent our future operations.
|
|
|
Year Ended |
|
Lakewood Flats |
|
Prior Pro Forma |
|
Pro Forma |
| ||||
|
|
|
December 31, 2015 |
|
Pro Forma |
|
Disposition |
|
Twelve Months Ended |
| ||||
|
|
|
As Reported |
|
Adjustments |
|
Adjustments |
|
December 31, 2015 |
| ||||
|
|
|
(a) |
|
(b) |
|
(c) |
|
|
| ||||
|
Revenues |
|
|
|
|
|
|
|
|
| ||||
|
Rental revenue |
|
$ |
32,556 |
|
$ |
(6,342 |
) |
$ |
(4,053 |
) |
$ |
22,161 |
|
|
Hotel revenue |
|
17,694 |
|
— |
|
— |
|
17,694 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
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Total revenues |
|
50,250 |
|
(6,342 |
) |
(4,053 |
) |
39,855 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
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Expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Property operating expenses |
|
11,503 |
|
(1,408 |
) |
(1,664 |
) |
8,431 |
| ||||
|
Hotel operating expenses |
|
12,498 |
|
— |
|
— |
|
12,498 |
| ||||
|
Interest expense, net |
|
6,791 |
|
(686 |
) |
(706 |
) |
5,398 |
| ||||
|
Real estate taxes |
|
6,127 |
|
(1,447 |
) |
(490 |
) |
4,189 |
| ||||
|
Impairment charge |
|
1,417 |
|
— |
|
— |
|
1,417 |
| ||||
|
Property management fees |
|
1,650 |
|
(189 |
) |
(169 |
) |
1,293 |
| ||||
|
Asset management fees |
|
2,702 |
|
(426 |
) |
(309 |
) |
1,967 |
| ||||
|
General and administrative |
|
3,620 |
|
— |
|
— |
|
3,620 |
| ||||
|
Depreciation and amortization |
|
14,950 |
|
(3,358 |
) |
(1,599 |
) |
9,993 |
| ||||
|
Total expenses |
|
61,258 |
|
(7,514 |
) |
(4,937 |
) |
48,806 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Interest income, net |
|
149 |
|
1 |
|
6 |
|
156 |
| ||||
|
Loss on early extinguishment of debt |
|
(732 |
) |
(1,415 |
) |
(54 |
) |
(2,201 |
) | ||||
|
Other income (expense) |
|
(777 |
) |
— |
|
— |
|
(777 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from continuing operations before gain on sale of real estate and income tax expense |
|
(12,368 |
) |
(242 |
) |
836 |
|
(11,773 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Gain on sale of real estate |
|
22,771 |
|
7,660 |
|
(474 |
) |
29,958 |
| ||||
|
Income tax expense |
|
(2,726 |
) |
— |
|
(781 |
) |
(3,507 |
) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net Income (loss) |
|
7,677 |
|
7,419 |
|
(419 |
) |
14,677 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (income) loss attributable to the noncontrolling interest |
|
(699 |
) |
— |
|
1,190 |
|
491 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income attributable to the Company |
|
$ |
6,978 |
|
$ |
7,419 |
|
$ |
771 |
|
$ |
15,168 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income per share |
|
$ |
0.27 |
|
|
|
|
|
$ |
0.59 |
| ||
|
Weighted average shares outstanding: |
|
25,688 |
|
|
|
|
|
25,688 |
| ||||
See Notes to Unaudited Pro Forma Consolidated Financial Statements.
Behringer Harvard Opportunity REIT II, Inc.
Notes to Unaudited Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Balance Sheet
a. Reflects our historical balance sheet as of June 30, 2016.
b. Reflects our disposition of Lakewood Flats on August 16, 2016. Amounts represent the necessary adjustments to remove the assets sold and liabilities assumed by the buyer, and the repayment of outstanding debt of $33.5 million as a result of the disposition.
Unaudited Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2016
a. Reflects our historical operations for the six months ended June 30, 2016.
b. Reflects the historical revenues and expenses of Lakewood Flats, including property management fees and depreciation and amortization associated with the property. The estimated gain recognized on the sale of Lakewood Flats is reflected in the unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2015 as if we had disposed of the property as of January 1, 2015.
Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2015
a. Reflects our historical operations for the year ended December 31, 2015.
b. Reflects the historical revenues and expenses of Lakewood Flats, including property management fees and depreciation and amortization associated with the property. The gain recognized on the sale of Lakewood Flats is reflected in the unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2015 as if we had disposed of the property as of January 1, 2015.
c. Reflects the historical revenues and expenses of Wimberly at Deerwood (“Wimberly”), Holstenplatz, Alte Jakobstraße (“AJS”), and Babcock Self Storage (“Babcock”), including property management fees and depreciation and amortization associated with the properties. The gains recognized on the sales of the four properties are reflected in the unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2015 as if we had disposed of the properties as of January 1, 2015. We sold the four properties as follows: Wimberly on September 9, 2015 for a contract sales price of $43.5 million, Holstenplatz, an office building located in Hamburg, Germany, on September 1, 2015 for a contract sales price of $18.4 million, AJS, an office building located in Berlin, Germany, on February 21, 2015 for a contract sales price of approximately $14.1 million and Babcock, a self-storage facility located in San Antonio, Texas on January 8, 2015 for a contract sales price of approximately $5.4 million.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BEHRINGER HARVARD OPPORTUNITY REIT II, INC. | |
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Dated: August 22, 2016 |
By: |
/s/ S. Jason Hall |
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S. Jason Hall |
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Chief Financial Officer |