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) November 6, 2002
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-4258 22-1897375
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
Number)
3499 Route 9N, Suite 3C, Freehold, NJ 07728
(Address of principal executive offices)
Registrant's telephone number, including area code (732)577-9996
(Former name or former address, if changed since last report.)
Page 1
Item 5. Other Events.
On November 6, 2002, Monmouth Real Estate Investment
Corporation (Registrant) purchased a 288,211 square foot
manufacturing and warehouse facility in Tolleson, Arizona
from Centex Industrial Buckeye I, LLC, an unrelated entity.
This warehouse facility is 100% net leased to Western
Container Corporation, which manufactures plastic bottles
for Coca-Cola soft drink products. The lease is guaranteed
by Coca-Cola Enterprises. The purchase price was
approximately $14,800,000. Monmouth Real Estate Investment
Corporation paid approximately $550,000 in cash, borrowed
approximately $2,200,000 against its security portfolio with
Prudential Securities, used approximately $1,100,000 of its
revolving line of credit with Fleet Bank and obtained a
mortgage of approximately $10,950,000. This mortgage payable
is at an interest rate of 5.8% and is due November 1, 2012.
The property acquired is commercial rental property and
will continue to be used as such.
The following are the material factors to be considered
in assessing the property:
* Description of Property - The property acquired is
a 288,211 square foot manufacturing and warehouse facility
located at 9860 West Buckeye Road, Tolleson, Maricopa County,
Arizona.
* Occupancy Rate and Number of Tenants - The
commercial rental property acquired was constructed in 2002.
Commencing March 26, 2002, the property was 100% occupied
under a 10-year net lease agreement with Western Container
Corporation. This net lease agreement provides that operating
expenses, including property taxes, insurance, landscaping,
utilities and repairs in the ordinary course of business,
be borne by the tenant.
* Principal Business of Tenant - Western Container
Corporation uses this property as a manufacturing and
warehouse facility of plastic bottles. Registrant believes
that Western Container Corporation will continue to use this
property as such.
* Principal Provisions of Lease - The following are
the principal provisions of the lease:
Term Monthly Rent
5/1/02-4/30/07 $101,030
5/1/07-4/30/12 106,081
At the end of the lease term, the tenant has two (5)
year options to renew at a rent based on the increase in the
consumer price index.
The Seller assigned the lease to Registrant.
Page 2
* Basis of Acquired Property for Depreciation - The
basis for depreciation is the purchase price of
the property. Approximately $13,400,000 of the purchase
price is attributable to building and improvements, which
will be depreciated over a 39 year life on a straight-line
basis (Modified Accelerated Recovery System). The residual
is attributable to land.
* Anticipated Capital Improvements - The Registrant
does not anticipate any significant capital improvements
during the term of the lease described above.
* Insurance Coverage - Insurance on the property is
paid for by the tenant. In the opinion of the Registrant,
this coverage is adequate.
Registrant knows of no other material factors relating
to the property acquired other that those discussed in this
Form 8-K.
The following is pro forma financial information. The
impact of the property acquired to the financial statements
of the Registrant is as follows:
ADJUSTMENTS TO STATEMENT OF INCOME
Rental and Occupancy Charges - Increase of $1,245,000
based upon amortization of the total rental payments
for scheduled rent over the remaining lease term.
Interest Expense - Increase of $753,000 based upon a
mortgage of $10,950,000 at 5.8% interest and total
monthly principal and interest payments of $89,379,
a margin line increase of $2,200,000 currently at
3.75% and a revolving line of credit balance increase
of $1,100,000 at prime (currently 4.25%).
Depreciation Expense - Increase of $344,000 based upon
$13,400,000 of the purchase price being attributed to
building and improvements, and straight-line
depreciation over a 39 year life.
Net Income - Increase of $148,000 (rental and occupancy
Charges less interest expense and depreciation expense).
The effect of cash made available by operations
will be an increase of $492,000 (net income plus
depreciation).
Page 3
ADJUSTMENTS TO THE BALANCE SHEET AT DATE OF PURCHASE
Cash and Cash Equivalents - Decrease of $550,000,
the amount of cash used for the purchase.
Land and Buildings, Improvements and Equipment -
Increase of $14,800,000, based on the purchase price.
Notes Payable - Increase of $3,300,000, the total
amount used on the margin line and the revolving line
of credit.
Mortgage Notes Payable - Increase of $10,950,000,
the amount of the mortgage on the acquired property.
Registrant knows of no other financial statement item
which would be materially affected by the acquired
property.
Page 4
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.
MONMOUTH REAL ESTATE INVESTMENT CORPORATION
By: /s/ ANNA T. CHEW
Controller
DATE: November 18,2002
Page 5