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): December 6, 2001
AmeriVest Properties Inc.
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(Exact name of registrant as specified in its charter)
Maryland 1-14462 84-1240264
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1780 South Bellaire Street, Suite 515, Denver, Colorado 80222
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 297-1800
Item 2. Acquisition or Disposition of Assets
Sale of Interest in Colorado Office Building. On December 6, 2001, we completed
the sale of an undivided 80% interest in the Panorama Falls building ("Panorama
Falls"). Panorama Falls consists of a three-story office building with 61,963
rentable square feet on approximately six acres located in Englewood, Colorado.
The aggregate sales price for the interest in Panorama Falls was $4,880,000
payable by the Buyer as follows:
o $2,180,000 to KeyBank National Association to pay down a portion of
the existing mortgage loan;
o the assumption of 80% of the remaining existing mortgage loan in the
amount of $2,395,732; and
o the remainder of $304,268, less closing costs, in cash to us.
The interest in Panorama Falls was purchased by Freemark Abbey Panorama, LLC
(the "Buyer"), a related party. A partner in the Buyer is an indirect beneficial
owner of approximately 9% of Sheridan Investments, LLC, which is the beneficial
owner of approximately 18% of our common stock. The sales price of the interest
in Panorama Falls was determined through negotiations between the Buyer and us.
Panorama Falls will continue to be managed by Sheridan Realty Advisors, LLC
under the terms of the Advisory Agreement between Sheridan Realty Advisors, LLC
and us dated December 22, 1999 and revised and restated as of March 12, 2001.
Effective January 1, 2002, however, AmeriVest will assume the management
functions pursuant to the press release referenced in Item. 5.
Item 5. Other Events
Press Release. The press release of Registrant dated December 14, 2001, which is
filed as Exhibit 99.1 to this Form 8-K, is incorporated into this Item 5 by this
reference.
Item 7. Financial Statements And Exhibits.
(b) Unaudited Pro Forma Financial Information:
Pro Forma Financial Information (Unaudited) F-1
Pro Forma Consolidated Balance Sheet as of September
30, 2001 (Unaudited) F-2
Pro Forma Consolidated Statements of Operations (Unaudited):
Nine Months ended September 30, 2001 F-3
Year ended December 31, 2000 F-4
Notes to Pro Forma Consolidated Financial Statements (Unaudited) F-5
(c) Exhibits
Exhibit Number Exhibit Title
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99.1 Press Release dated December 14, 2001
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
(Unaudited)
The accompanying unaudited pro forma consolidated balance sheet presents the
historical financial information of AmeriVest as of September 30, 2001 as
adjusted for the sale of the undivided 80% interest in Panorama Falls as if the
transaction had occurred on September 30, 2001.
The accompanying unaudited pro forma consolidated statements of operations for
the nine months ended September 30, 2001 and the year ended December 31, 2000
subtract the historical operations of Panorama Falls from the historical
operations of AmeriVest and add pro forma adjustments, as if the transaction had
occurred on January 1, 2000. After the sale, we will be accounting for our
remaining investment in Panorama Falls under the equity method.
The unaudited pro forma consolidated financial statements have been prepared by
AmeriVest management based upon the historical financial statements of AmeriVest
and Panorama Falls. These pro forma statements may not be indicative of the
results that actually would have occurred if the combination had been in effect
on the dates indicated or which may be obtained in the future. The pro forma
financial statements should be read in conjunction with the historical financial
statements included in AmeriVest's previous filings with the Securities and
Exchange Commission.
F-1
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001
(Unaudited)
Sale of
AmeriVest Panorama Pro Forma
(Historical) Falls Combined
------------ ------------ ------------
ASSETS
Investment in Real Estate
Land $ 9,960,376 $ (1,051,372)(a) $ 8,909,004
Building and improvements 50,417,352 (5,149,445)(a) 45,267,907
Furniture, fixtures and equipment 155,808 -- 155,808
Tenant improvements 1,431,132 -- 1,431,132
Tenant leasing commissions 271,632 -- 271,632
Less: accumulated depreciation and
amortization (2,717,634) 183,523 (a) (2,534,111)
------------ ------------ ------------
Net Investment in Real Estate 59,518,666 (6,017,294) 53,501,372
Cash and cash equivalents 9,216,887 325,183 (b) 9,542,070
Investment in unconsolidated affiliate -- 1,137,294 (c) 1,137,294
Receivable from affiliate -- 2,374,817 (b) 2,374,817
Accounts receivable 156,853 -- 156,853
Deferred rent receivable 324,330 -- 324,330
Deferred financing costs, net 463,351 -- 463,351
Prepaid expenses, escrows and other assets 1,346,069 -- 1,346,069
------------ ------------ ------------
Total Assets $ 71,026,156 $ (2,180,000) $ 68,846,156
============ ============ ============
LIABILITIES
Mortgage loans and notes payable $ 41,875,236 $ (2,180,000)(b) $ 39,695,236
Accounts payable and accrued expenses 1,662,097 -- 1,662,097
Accrued real estate taxes 810,955 -- 810,955
Prepaid rents and security deposits 990,573 -- 990,573
Dividends payable 826,605 -- 826,605
------------ ------------ ------------
Total Liabilities 46,165,466 (2,180,000) 43,985,466
------------ ------------ ------------
OWNERS' EQUITY
Common stock 6,613 -- 6,613
Capital in excess of par value 30,709,501 -- 30,709,501
Distributions in excess of accumulated
earnings (5,855,424) -- (5,855,424)
------------ ------------ ------------
Total Owners' Equity 24,860,690 -- 24,860,690
------------ ------------ ------------
Total Liabilities and Owners' Equity $ 71,026,156 $ (2,180,000) $ 68,846,156
============ ============ ============
See notes to the pro forma consolidated financial statements
F-2
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(Unaudited)
Historical
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Panorama Pro Forma Pro Forma
AmeriVest Falls Adjustments Combined
----------- ----------- ----------- -----------
REAL ESTATE OPERATING REVENUE
Rental revenue $ 7,496,114 $ 729,334 $ -- $ 6,766,780
----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property Operating Expenses
Operating expenses 1,955,488 2,299 -- 1,953,189
Real estate taxes 594,282 -- -- 594,282
Management fees 380,653 37,472 -- 343,181
General and administrative 521,266 102 -- 521,164
Impairment of deferred rents receivable 326,113 326,113 -- --
Interest 2,336,038 329,905 -- 2,006,133
Depreciation and amortization 1,667,362 468,673 -- 1,198,689
----------- ----------- ----------- -----------
7,781,202 1,164,564 -- 6,616,638
----------- ----------- ----------- -----------
OTHER INCOME
Interest income 92,366 314 -- 92,052
Equity in loss of unconsolidated affiliates (10,843) -- (86,983)(d) (97,826)
----------- ----------- ----------- -----------
81,523 314 (86,983) (5,774)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE GAIN ON SALE
OF REAL ESTATE (203,565) (434,916) (86,983) 144,368
GAIN ON SALE OF REAL ESTATE 1,143,698 -- -- 1,143,698
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 940,133 $ (434,916) $ (86,983) $ 1,288,066
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE
Basic $ 0.23 $ 0.32
=========== ===========
Diluted $ 0.23 $ 0.31
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic 4,020,898 4,020,898
=========== ===========
Diluted 4,143,767 4,143,767
=========== ===========
See notes to the pro forma consolidated financial statements.
F-3
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(Unaudited)
Historical
--------------------------
Panorama Pro Forma Pro Forma
AmeriVest Falls Adjustments Combined
----------- ----------- ----------- -----------
REAL ESTATE OPERATING REVENUE
Rental revenue $ 7,222,437 $ 600,030 $ -- $ 6,622,407
----------- ----------- ----------- -----------
REAL ESTATE OPERATING EXPENSES
Property Operating Expenses
Operating expenses 1,946,633 46,293 -- 1,900,340
Real estate taxes 668,224 28,952 -- 639,272
Management fees 344,636 12,692 -- 331,944
General and administrative 517,019 423 -- 516,596
Severance expense 255,442 -- -- 255,442
Interest 2,167,869 320,433 -- 1,847,436
Depreciation and amortization 1,205,795 105,217 -- 1,100,578
----------- ----------- ----------- -----------
7,105,618 514,010 -- 6,591,608
----------- ----------- ----------- -----------
OTHER INCOME
Interest income 55,874 11,744 -- 44,130
Equity in (loss) income of
unconsolidated affiliates (52,808) -- 19,553 (d) (33,255)
----------- ----------- ----------- -----------
3,066 11,744 19,553 10,875
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE GAIN ON SALE
OF REAL ESTATE 119,885 97,764 19,553 41,674
GAIN ON SALE OF REAL ESTATE 2,556,839 -- -- 2,556,839
----------- ----------- ----------- -----------
NET INCOME $ 2,676,724 $ 97,764 $ 19,553 $ 2,598,513
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE
Basic and diluted $ 1.07 $ 1.04
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic 2,492,584 2,492,584
=========== ===========
Diluted 2,495,919 2,495,919
=========== ===========
See notes to the pro forma consolidated financial statements.
F-4
AMERIVEST PROPERTIES INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated financial statements are
presented to reflect the sale of the 80% interest in Panorama Falls by
AmeriVest.
The accompanying unaudited pro forma consolidated balance sheet presents the
historical financial information of AmeriVest as of September 30, 2001 as
adjusted for the sale of the undivided 80% interest in Panorama Falls as if the
transaction had occurred on September 30, 2001.
The accompanying unaudited pro forma consolidated statements of operations for
the nine months ended September 30, 2001 and the year ended December 31, 2000
subtract the historical operations of Panorama Falls from the historical
operations of AmeriVest and add pro forma adjustments, as if the transaction had
occurred on January 1, 2000.
NOTE 2 - PRO FORMA ADJUSTMENTS
The unaudited pro forma consolidated financial statements reflect the following
pro forma adjustments:
(a) 100% of the book value (as of September 30, 2001) of the assets sold to the
Buyer.
(b) The sales price of the 80% interest in Panorama Falls is summarized as
follows:
Cash received $ 325,183
Cash to KeyBank for
partial loan repayment 2,180,000
Assumed mortgage loan 2,374,817
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Total Sales Price $4,880,000
==========
In accordance with accounting principles, the mortgage loan secured by Panorama
Falls remains on AmeriVest's balance sheet with an offset to a receivable from
the Buyer for 80% of the assumed loan with the remaining 20% to the investment
in unconsolidated affiliate account.
(c) AmeriVest's remaining 20% interest in the net assets of Panorama Falls as of
September 30, 2001.
(d) AmeriVest's equity in income (losses) of Panorama Falls for the respective
periods.
F-5
NOTE 3 - INCOME PER SHARE
Pro forma income per common share for the nine months ended September 30, 2001
and the year ended December 31, 2000 is computed based on the weighted average
number of common shares outstanding during the periods presented.
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 thereunto duly authorized.
AMERIVEST PROPERTIES INC.
December 21, 2001
By: /s/ D. Scott Ikenberry
------------------------------------
D. Scott Ikenberry
Chief Financial Officer
F-6
Exhibit 99.1
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AMERIVEST PROPERTIES ELECTS TO BECOME SELF-MANAGED
AND INTERNALLY ADVISED; COMPLETES SALE OF PANORAMA FALLS
DENVER, CO, Dec. 14 -- The board of directors of AmeriVest Properties Inc.
(AMEX: AMV), a real estate investment trust which owns 22 office properties
serving small to mid-sized tenants, has elected to acquire the property
management and administration operations from its outside advisor, Sheridan
Realty Advisors, LLC, effective January 1, 2002. Under the terms of its existing
agreement with Sheridan, AmeriVest will exercise its right to purchase the
management and advisory business from Sheridan for the sum of $100 plus the book
value of the furniture, fixtures and equipment at December 31, 2001
(approximately $50,000). Sheridan will continue as an outside advisor to the
company in connection with capital markets and real estate acquisitions.
Sheridan Realty Advisors, LLC has managed AmeriVest since January 1, 2000.
Effective January 1, 2002, most of Sheridan's 24 employees will become
employees of AmeriVest and will manage day-to-day operations of the company.
AmeriVest will no longer pay administrative, property management and accounting
fees to Sheridan as of December 31, 2001. Sheridan will continue to advise
AmeriVest with respect to capital market activities, real estate acquisitions
and dispositions and major capital projects and will continue to receive a
capital project fee and advisory fee based on the value of all real property
acquired or developed by AmeriVest during the term of the agreement.
"We are pleased that AmeriVest has grown to a size that enables it to bring
property management, accounting and administrative functions in house," said
William Atkins, Chief Executive Officer of AmeriVest. "We recognize that most
analysts and institutional investors prefer self-managed REITs. We are now large
enough to absorb operating overhead within the company and expect that this
change will be perceived positively by our shareholders and the investment
community," said Atkins.
AmeriVest also announced the closing of the previously announced sale of
80% of its Panorama Falls building in Denver to an outside investor, for
$4,880,000. AmeriVest will retain a 20% interest in the property, will continue
to operate and manage the property, and will receive management fees and an
incentive fee based on the total return of the investment.
About AmeriVest Properties Inc.
AmeriVest Properties Inc., with its principal office in Denver, Colorado,
is an REIT that owns 22 office properties, and is focused on office buildings
with average tenant size of approximately 2,500 - 3,000 square feet. To receive
AmeriVest's latest news and corporate developments, visit the company's web site
at http://www.AMVproperties.com.
Certain matters discussed in this release are forward-looking statements that
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected, including the risks and uncertainties of
acquiring, owning, operating and disposing of real estate. Such risks and
uncertainties are disclosed in the Company's past and current filings with the
U.S. Securities and Exchange Commission.