BTR Realty OKs conversion to REIT

August 21, 1993|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

BTR Realty Inc. shareholders yesterday overwhelmingly approved converting the company to a real estate investment trust, as part of a plan that will slash the Linthicum development firm's debt, reinstitute

its dividend, and accompany changes in senior management.

BTR will be absorbed by Mid-Atlantic Realty Trust, a newly formed REIT that will issue both stock and bonds next month.

Most of that money will be used to pay down $73 million of BTR's debt before formally taking over the Linthicum-based company. The offerings are expected to raise between $60 million and $100 million, according to documents BTR has filed with the U.S. Securities and Exchange Commission. The conversion is expected to be complete by mid-September, company Chairman Archibald E. MacKay said.

The move will mean that Mr. MacKay, 75, will step down as chairman and chief executive officer, to be replaced as CEO by BTR President F. Patrick Hughes. BTR directors Jerold C. Hoffberger, Alvin H. Blum, David P. Gordon, Philip E. Klein, and Calman J. Zamoiski Jr. also will leave when the merger is completed.

New trustees of Mid-Atlantic will be Baltimore developer Daniel S. Stone, attorney and retailing entrepreneur Marc P. Blum (Alvin Blum's son), David Benson, the chief executive of Meditrust, a health care related REIT based in Waltham, Mass., BTR general counsel Paul Robinson and former Drexel Burnham Lambert Inc. corporate counsel Stanley Moss.

"It's something the company has been working on, believe it or not, since 1986," Mr. MacKay said.

As an REIT, Mid-Atlantic will be exempt from federal income tax as long as it pays out 95 percent or more of its net income to shareholders as a dividend. The shareholders will still pay personal income taxes on the dividend.

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