SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 22, 2001
CEDAR INCOME FUND, LTD.
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(Exact name of registrant as specified in charter)
Maryland 0-14510 42-1241468
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(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
44 South Bayles Avenue, Port Washington, New York 11050
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 767-6492
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(Former name or former address, if changed since last report)
Cedar Income Fund, Ltd.
Item 2. Acquisition or Disposition of Assets
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1) Sale of the Fund's Interest in Broadbent Business Center (Salt
Lake City, Utah):
On May 22, 2001, Cedar Income Fund Partnership, L.P. (the "Operating
Partnership"), pursuant to a Contract of Sale dated May 7, 2001, sold
its interest in the Broadbent Business Center, Salt Lake City, Utah,
to Business Property Trust, LLC for $5.3 million. The Operating
Partnership incurred closing expenses of approximately $450,000,
including a broker's commission of $250,000, a "Rent Guarantee
Deposit" of $100,000, and legal and other closing adjustments of
approximately $100,000.
The net sales amount received by the Operating Partnership after the
aforementioned closing costs and repayment of outstanding
indebtedness in the amount of approximately $1.5 million under a
secured credit line was $3,324,297. The credit line has been
terminated, and deferred financing costs of approximately $260,000
will be written off as an extraordinary item during the second
quarter of 2001.
The net cost basis of Broadbent on the books of the Operating
Partnership as of the closing date was $3,210,723, resulting in a
gain of approximately $1.6 million. Management intends to reinvest
the proceeds of sale in certain qualifying properties structured to
defer income tax on such gain pursuant to the "like-kind exchange"
provisions of Section 1031 of the Internal Revenue Code. In this
connection, Cedar Income Fund, Ltd. (the "Company"), announced that
it had entered into an agreement, subject to due diligence and
certain closing conditions, to purchase three supermarket-anchored
shopping centers, containing in the aggregate approximately 470,000
rentable square feet, located in eastern Pennsylvania and southern
New Jersey.
Cedar Bay Realty Advisors, Inc. ("CBRA") is entitled to receive a
disposition fee from the Company in accordance with the terms of the
investment advisory agreement between CBRA and the Company in an
amount not to exceed 3%. CBRA has agreed with management of the
Company to defer this fee.
Cedar Income Fund, Ltd.
Item 7. Financial Statements and Exhibits
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Pro Forma Combined Balance Sheet as of March 31, 2001.
Pro Forma Combined Statement of Operations for the three months ended
March 31, 2001.
Pro Forma Combined Statement of Operations for the twelve months
ended December 31, 2000.
Notes to Pro Forma Financial Statements.
Exhibits.
Contract of Sale dated March 7, 2001
Press release dated May 22, 2001 regarding sale of Broadbent
Cedar Income Fund, Ltd.
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.
CEDAR INCOME FUND, LTD.
By:
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Leo S. Ullman
Chairman
Dated: June 5, 2001
Cedar Income Fund, Ltd.
Pro Forma Condensed Combined Balance Sheet
As of March 31, 2001
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The following unaudited pro forma condensed Combined Balance Sheet is presented
as if the Company had sold Broadbent on March 31, 2001. This pro forma condensed
Combined Balance Sheet should be read in conjunction with the pro forma
condensed Combined Statement of Operations of the Company and the historical
financial statements and notes thereto of the Company as filed on Form 10-Q for
the three months ended March 31, 2001. The pro forma condensed Combined Balance
Sheet is unaudited and is not necessarily indicative of what the actual
financial position would have been had the Company sold Broadbent on March 31,
2001, nor does it purport to represent the future financial position of the
Company.
Cedar Income Repayment
Fund, Ltd. Broadbent of Pro Forma
Historical (a) Disposition (b) Credit Facility (c) March 31, 2001
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Description
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Assets:
Real estate, net $21,894,541 $ - $ - $21,894,541
Real estate held for sale 5,060,723 (3,210,723) - 1,850,000
Escrow - 4,839,941 (1,515,644) 3,324,297
Cash and cash equivalents 1,072,881 (30,305) - 1,042,576
Restricted cash 5,944,365 - - 5,944,365
Tenant receivables 195,303 (17,454) - 177,849
Deferred rent receivable 25,474 - - 25,474
Prepaid expenses and other 236,094 (4,891) - 231,203
Deferred leasing and financing costs 837,278 (17,287) (203,429) 616,562
Deferred legal 61,733 - - 61,733
----------- ----------- ----------- -----------
Total Assets $35,328,392 $ 1,559,281 $(1,719,073) $35,168,600
=========== =========== =========== ===========
Liabilities and Stockholders' Equity
Mortgage notes payable $17,900,000 $ - $ - $17,900,000
Credit facility 1,515,644 - (1,515,644) -
Accrued expenses and other 549,846 (495,266) - 54,580
----------- ----------- ----------- -----------
Total Liabilities 19,965,490 (495,266) (1,515,644) 17,954,580
----------- ----------- ----------- -----------
Minority interest 2,316,906 - - 2,316,906
Limited partner's interest in
Operating Partnership 9,239,726 1,460,988 (144,658) 10,556,056
Stockholders' Equity
Common stock 6,921 - - 6,921
Additional paid-in capital 3,799,349 593,559 ( 58,771) 4,334,137
----------- ----------- ----------- -----------
Total Stockholders' Equity 3,806,270 593,559 ( 58,771) 4,341,058
----------- ----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $35,328,392 $ 1,559,281 $(1,719,073) $35,168,600
=========== =========== =========== ===========
See accompanying Notes to Pro Forma Financial Statements
Cedar Income Fund, Ltd.
Pro Forma Combined Statement of Operations
For the three months ended March 31, 2001
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The following unaudited pro forma condensed Combined Statement of Operations is
presented as if the Company had disposed of Broadbent as of January 1, 2001 and
the Company qualified as a REIT, distributed 90% of its taxable income and,
therefore, incurred no income tax expense during the period. This pro forma
condensed Combined Statement of Operations should be read in conjunction with
the pro forma condensed Combined Balance Sheet of the Company and the historical
financial statements and notes thereto of the Company as filed on Form 10-Q for
the three months ended March 31, 2001. The pro forma condensed Combined
Statement of Operations is unaudited and is not necessarily indicative of what
the actual financial position would have been had the Company sold Broadbent as
of January 2001, nor does it purport to represent the operations of the Company
for future periods.
Cedar Income Pro Forma
Fund, Ltd. Broadbent Pro Forma Three months ended
Historical (d) Disposition (e) Adjustments (f) March 31, 2001
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Description
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Revenues:
Base rent $ 712,208 $(118,150) $ - $ 594,058
Tenant escalations 163,427 (36,400) - 127,027
Interest 107,644 - 29,292 136,936
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Total Revenues 983,279 (154,550) 29,292 858,021
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Expenses:
Operating Expenses
Property expenses 258,442 (43,587) - 214,855
Real estate taxes 91,988 (15,273) - 76,715
Administrative 95,379 - - 95,379
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Total Operating Expenses 445,809 (58,860) - 386,949
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Interest 377,479 - (35,049) 342,430
Depreciation and amortization 172,556 (10,249) (30,669) 131,638
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Total Expenses 995,844 (69,109) (65,718) 861,017
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Net income before minority interest (12,565) (85,441) 95,010 (2,996)
Minority interest share of loss 22,888 - - 22,888
Net income (loss) before limited partner's
interest in Operating Partnership 10,323 (85,441) 95,010 19,892
Limited partner's interest (12,940) 60,757 (67,562) (19,745)
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Net (loss) income before cumulative
effect adjustment (2,617) (24,684) 27,448 147
Extraordinary item
Write-off of deferred mortgage and
administrative costs, net of limited
partner's interest of ($197,044) - - (80,054) (80,054)
Cumulative effect of change in accounting
principle, net of limited partnership
interest of ($14,723) (6,014) - - (6,014)
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Net (loss) $ (8,631) $ (24,684) $ (52,606) $ (85,921)
========= ========= ========= =========
Basic and Diluted Net Income per Share $ (0.01) $ (0.04) $ (0.08) $ (0.13)
========= ========= ========= =========
See accompanying notes to Pro Forma Financial Statements
Cedar Income Fund, Ltd.
Pro Forma Combined Statement of Operations
For the twelve months ended December 31, 2000
---------------------------------------------
The following unaudited pro forma condensed Combined Statement of Operations is
presented as if the Company had disposed of Broadbent as of January 1, 2000 and
the Company qualified as a REIT, distributed 95% of its taxable income and,
therefore, incurred no income tax expense during the period. This pro forma
condensed Combined Statement of Operations should be read in conjunction with
the pro forma condensed Combined Balance Sheet of the Company and the historical
financial statements and notes thereto of the Company as filed on Form 10-K for
the year ended December 31, 2000. The pro forma condensed Combined Statement of
Operations is unaudited and is not necessarily indicative of what the actual
financial position would have been had the Company disposed of Broadbent as of
January 1, 2000, nor does it purport to represent the operations of the Company
for future periods.
Cedar Income
Fund, Ltd. Broadbent Pro Forma Pro Forma
Historical (g) Disposition (h) Adjustments (i) 2000
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Description
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Revenues:
Base rent $ 2,586,473 $ (568,151) $ - $ 2,018,322
Tenant escalations 450,470 (146,988) - 303,482
Interest 178,838 - 134,284 313,122
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Total Revenues 3,215,781 (715,139) 134,284 2,634,926
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Expenses:
Operating Expenses
Property expenses 854,203 (185,083) - 669,120
Real estate taxes 308,386 (59,080) - 249,306
Administrative 525,169 - - 525,169
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Total Operating Expenses 1,687,758 (244,163) - 1,443,595
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Interest 604,182 (52,414) (93,033) 458,735
Depreciation and amortization 621,509 (116,189) (96,842) 408,478
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Total Expenses 2,913,449 (412,766) (189,875) 2,310,808
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Net income before minority interest 302,332 (301,373) 324,159 324,118
Minority interest 7,669 - - 7,669
Loss on impairment (203,979) - - (203,979)
Gain on disposal 91,012 - - 91,012
Net income before limited partner's
interest in Operating Partnership 197,034 (302,373) 324,159 218,820
Limited partner's interest (191,615) 215,017 (230,509) (171,366)
----------- ----------- ----------- -----------
Net income (loss) before extraordinary item 5,419 (87,356) 93,650 47,454
Extraordinary item
Early extinguishment of debt (17,502) 17,502 - -
Write-off of deferred mortgage and
administrative costs, net of limited
partner's interest of ($231,088) - - (93,885) (93,885)
----------- ----------- ----------- -----------
Net (loss) $ (12,083) $ (69,854) $ (235) $ (46,431)
=========== =========== =========== ===========
Basic and Diluted Net Income per Share $ (0.01) $ (0.08) $ 0.00 $ (0.09)
=========== =========== =========== ===========
See accompanying notes to Pro Forma Financial Statements
Cedar Income Fund, Ltd.
Notes to Pro Forma Financial Statements
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Pro Forma Condensed Combined Balance Sheet
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a. Reflects the Company's historical balance sheet as of March 31, 2001.
b. Reflects the disposition of Broadbent for $5.3 million cash.
c. Reflects repayment of $1.5 million credit facility.
Pro Forma Condensed Combined Statements of Operations for the three months
ended March 31, 2001
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d. Reflects the historical operations of the Company for the three months
ended March 31, 2001.
e. Reflects the operations of Broadbent for the three months ended March
31, 2001.
f. Reflects the interest income associated with the net cash received
from the sale of Broadbent and write-off of deferred mortgage and
amortization expense.
Pro forma Condensed Combined Statements of Operations for the Year Ended
December 31, 2000
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g. Reflects the historical operations of the Company for the year ended
December 31, 2000.
h. Reflects the operations of Broadbent for the year ended December 31,
2000.
i. Reflects the interest income associated with the net cash received
from the sale of Broadbent and write-off of deferred mortgage and
amortization expense.