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): May 30, 2003
Berkshire Income Realty, Inc.
(Exact Name of Registrant as Specified in its Charter)
Maryland 001-31659 32-0024337
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporations or organization) File Number) Identification No.)
One Beacon Street, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 523-7722
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OF ASSETS.
On May 30, 2003, Berkshire Income Realty - OP, L.P. (the "OP"), the operating
partnership subsidiary of Berkshire Income Realty, Inc. (the "Company"),
acquired the partnership interests of McNab KC3 Limited Partnership (the
"Partnership"), the fee simple owner of Windward Lakes Apartments a 276-unit
multi-family apartment community located in Pompano, Florida. Prior to the
transaction the lender on the property, an affiliate of the Company, engaged a
third party appraisal firm to determine the value of the property for purposes
of determining the total amount payable to the lender under the terms of its
participating mortgage. The third party appraisal firm valued the property at
$19 million. Total consideration for the partnership interests included the
assumption of approximately $19.5 million of first mortgage debt and other
obligations (payable to affiliates of the Company's advisory company). The
partnership interests include the real estate as well as other assets of the
Partnership, including cash balances. The appraised value equates to a purchase
price of approximately $68,800 per apartment unit.
The Partnership interests were contributed to the OP by George Krupp, Chairman
of the Board of Directors and his brother, Douglas Krupp, subject to certain
obligations of the Partnership and its partners including the assumption of
$13.4 million of first mortgage debt, including accrued interest, $4.8 million
of principal, accrued interest, participation interest and interest rebates
secured by the Partnership interests (the "Additional Loan") and the assumption
of approximately $1.3 million of liabilities payable to other affiliates of the
Company's advisory company. Upon completion of the acquisition the Operating
Partnership immediately paid off the first mortgage and Additional Loan debt
totaling $18.2 million using available cash.
Windward Lakes Apartments was constructed in 1992 and was 93.1% occupied at the
time of acquisition.
ITEM 5. OTHER EVENTS.
On April 24, 2003, Berkshire Income Realty - OP, L.P., acquired all of the
equity interests in Gables of Texas Limited Partnership ("Gables") and Gables of
Texas, L.L.C., the general partner of Gables, from KRF Company, L.L.C., the
Company's sole common shareholder. Gables is the fee simple owner of The Gables
Apartments a 140-unit multi-family apartment community located in Houston,
Texas. The purchase price of $6.25 million was funded with available cash.
Gables had acquired the property from an unrelated third party on March 20, 2003
for an equal purchase price. The Gables was constructed in 1983 and was 91.4%
occupied at the time of acquisition. The Gables acquisition is not deemed to be
"significant" by the Company.
ITEM 7. Financial Statements, Pro forma Financial Information and Exhibits
(a) Financial Statements of Assts Acquired:
Financial statements for McNab KC3 Limited Partnership will be
filed by amendments as soon as practicable, but not later than
August 13, 2003.
(b) Pro Forma Financial Information:
Pro forma financial information will be filed by amendment as soon
as practicable, but not later than August 13, 2003.
(c) Exhibits
EXHIBIT NO.
10.1 Contribution and Sale Agreement, dated May 29, 2003, among George Krupp,
Douglas Krupp, Krupp GP, Inc, Berkshire Income Realty-OP, L.P. and McNab
Sub, L.L.C.
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.
Berkshire Income Realty, Inc.
Date: June 16, 2003 By: /s/ David C. Quade
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Name: David C. Quade
Title: President and Chief Financial
Officer