UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) June 21, 2005
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W. P. CAREY & CO. LLC
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
001-13779 13-3912578
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(Commission File Number) (IRS Employer Identification No.)
50 Rockefeller Plaza, New York, NY 10020
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(Address of Principal Executive Offices) (Zip Code)
212-492-1100
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(Registrant's Telephone Number, Including Area Code)
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(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 (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.06. Material Impairments
On March 30, 2005, the registrant filed a Current Report on Form 8-K to report
the receipt of notification from a tenant that the tenant exercised its option
to purchase two buildings in Kentucky and Ohio at fair value pursuant to the
terms of a lease agreement between the registrant and the tenant. Under the
terms of the lease agreement, the process for determining fair value of the
buildings includes each party obtaining property appraisals. If the fair value
of the buildings cannot be mutually agreed upon by both parties, a third
appraiser will be selected and the third appraiser's valuation will be binding
on both parties. In connection with this transaction, the registrant
reclassified these buildings as held for sale and recorded a non-cash impairment
charge of $8,872,000 in its quarter ended March 31, 2005, as the registrant's
estimated fair value of the buildings at that time was lower than their
aggregate carrying value.
On June 21, 2005, the registrant obtained a third party appraisal. Based on the
appraisal obtained, the registrant has determined that the current estimated
fair value of the buildings approximates $18,700,000, which is lower than their
current aggregate carrying value of $24,469,000. Disposition costs to be paid by
the registrant are expected to approximate $50,000. As the registrant's current
evaluation of the buildings' fair value is lower than their current aggregate
carrying value, the registrant will record an additional non-cash impairment
charge of approximately $5,819,000 in its quarter ending June 30, 2005 for a
total impairment charge during the first six months of the year of $14,691,000.
The buildings' estimated fair value may change again in the future based on the
results of negotiations between the parties.
On March 30, 2005, the registrant filed a Current Report on Form 8-K to report
the proposed sale of a property in Michigan for $8,500,000. In connection with
this transaction, the registrant reclassified this property as held for sale and
recorded a non-cash impairment charge of $800,000 in its quarter ended March 31,
2005, as the property's estimated fair value was lower than its carrying value.
The registrant had previously recognized a non-cash impairment charge of
$7,500,000 in a prior year related to this property.
The proposed sale for $8,500,000 was terminated and on June 22, 2005 a letter of
intent was signed with a new third party to purchase this property for
$8,000,000. The letter of intent provides for a 75 day due diligence period for
the buyer. As such, there is no assurance that the proposed sale will be
completed. The property has a carrying value of $8,080,000. The net proceeds
from the sale after expected brokerage commissions and closing costs of
approximately $250,000 are expected to be approximately $7,750,000. Because the
proposed sale proceeds net of closing costs are below the carrying value, the
registrant will record an additional non-cash impairment charge of approximately
$330,000 in its quarter ending June 30, 2005 for a total impairment charge
during the first six months of the year of $1,130,000.
SIGNATURES
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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.
W. P. CAREY & CO. LLC
By: /s/ Claude Fernandez
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Claude Fernandez,
Managing Director and
acting Chief Financial Officer
(acting Principal Financial Officer)
Date: June 24, 2005