<PAGE>
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): September 13, 2000
BRE PROPERTIES, INC.
_________________________________________
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Maryland 0-5305 94-1722214
------------------------------- ------------------------ ---------------------------
<S> <C> <C>
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
</TABLE>
44 Montgomery Street, 36th Floor, San Francisco, CA 94104-4809
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(Address of principal executive offices) (Zip Code)
415-445-6530
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(Registrants' telephone number, including area code)
n/a
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(former name or former address, if changed since last report)
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ITEM 2 DISPOSITION OF ASSETS.
On September 13, 2000, pursuant to a purchase and sale agreement dated July
10, 2000, as amended September 6, 2000, we and BRE Properties Investors LLC sold
to G&I III Residential One LLC, an unrelated third party, 4,288 stabilized
apartment units in 19 apartment communities in Tucson, Albuquerque, Las Vegas
and Phoenix for an aggregate sale price of $261 million. The aggregate sale
price was determined through arms-length negotiations and was a function of
projected revenues and expenses and other factors. G&I III Residential One LLC
assigned its rights and obligations under the purchase and sale agreement to G&I
III Residential Portfolio LLC. The net proceeds from this transaction, the first
closing of the portfolio sale, were approximately $243 million in cash after the
pay down of $11 million in mortgage debt, and approximately $7 million in pro
rations and closing costs. We invested approximately $11 million of the net
proceeds from the sale in a joint venture in which G&I III Residential Portfolio
LLC has an approximate 85% equity interest and we have an approximate 15% equity
interest and we used $230 million to pay down our line of credit with the
balance used for other general corporate uses.
Although there can be no assurance, we anticipate a second closing with the
same party, with respect to three additional properties, totaling 621 units, in
the fourth quarter of 2000. The second closing is subject to customary closing
conditions and loan assumptions. All three apartment communities are located in
Tucson and represent approximately $19 million of the total $280 million sales
price. Upon closing, we expect to invest an additional $1 million in the above-
mentioned joint venture and to repay balances on our mortgage loans payable and
line of credit.
A copy of the purchase and sale agreement was filed as Exhibit 2.1 to our
current report on Form 8-K filed on September 8, 2000 and is incorporated by
reference in this report. A copy of amendment no. 1 to the purchase and sale
agreement is filed as Exhibit 2.1 to this report. The descriptions of the
purchase and sale agreement and amendment no. 1 set forth in the report we filed
on September 8, 2000 and in this report do not purport to be complete and are
qualified in their entirety by the provisions of the purchase and sale agreement
and amendment no. 1.
This report contains forward-looking statements, such as those pertaining to
the second closing of the sale of the properties, our anticipated proceeds and
the use of the proceeds from the first and second closings. These statements
are based on our current expectations and judgment. Forward-looking statements
are necessarily dependent on assumptions, data or methods that may be incorrect
or imprecise and we may not be able to realize them. Actual results and future
events could vary materially from those set forth in the forward-looking
statements as a result of various factors including the failure of the second
closing to occur and a delay in the second closing. We caution you not to place
undue reliance on forward-looking statements, which reflect our analysis only
and speak only as of the date of this report.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following unaudited, pro forma financial information and exhibits are
filed as part of this report:
(b) Unaudited pro forma financial information required pursuant to Article 11
of Regulation S-X:
(1) Pro Forma Condensed Consolidated Balance Sheet - June 30, 2000
Pro Forma Condensed Consolidated Statement of Operations - Year
ended December 31, 1999
Pro Forma Condensed Consolidated Statement of Operations - Six
months ended June 30, 2000
The unaudited pro forma condensed consolidated balance sheet as of June 30,
2000 is based on our and the properties' unaudited historical financial
statements after giving effect to the dispositions as described in Item 2 as if
both closings of the transaction had been consummated as of June 30, 2000.
The unaudited pro forma condensed consolidated statements of income for the
year ended December 31, 1999 and for the six months ended June 30, 2000 are
based on our and the properties' unaudited historical statements of operations
after giving effect to the dispositions as described in Item 2 as if both
closings of the transaction had been consummated on January 1, 1999.
These unaudited pro forma financial statements may not be indicative of the
results that actually would have occurred if the transaction had been in effect
on the dates indicated or which may be obtained in the future. The unaudited
pro forma financial statements should be read in conjunction with our financial
statements including our Annual Report on Form 10-K for the year ended December
31, 1999 and our unaudited financial statements on Form 10-Q for the six months
ended June 30, 2000.
(c) Exhibits:
Exhibit
Number Description
------- ------------------
2.1 Amendment No. 1 to Purchase and Sale Agreement, dated
September 6, 2000, by and among G & I III Residential One LLC,
BRE Properties, Inc. and BRE Properties Investors LLC
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BRE Properties, Inc.
Date: September 28, 2000 By: /s/ Edward F. Lange, Jr.
-----------------------------
Edward F. Lange, Jr.
Executive Vice President and
Chief Financial Officer
4
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BRE Properties, Inc.
Pro Forma Condensed Consolidated Financial Information
Overview
The following pro forma financial information has been prepared to give effect
to the sale of the 19 apartment communities on September 13, 2000 and the
probable sale of three properties in the fourth quarter of 2000 to G&I III
Residential One LLC.
The pro forma condensed consolidated balance sheet of BRE Properties, Inc. as of
June 30, 2000 gives effect to the two sales as if these sales had occurred on
June 30, 2000. It also gives effect to the indirect ownership of a 15% interest
in the real estate through its purchase of an interest in a joint venture with
the buyer which investment basis reflects a reduction for the impairment in
value. For the purposes of this presentation, it is assumed that the net
proceeds were applied to debt balances as of June 30, 2000 in amounts totaling
$268,000 rather than the actual balances on the closing dates.
The pro forma condensed consolidated statements of income for the twelve months
ended December 31, 1999 and the six months ended June 30, 2000 give effect to
the above transaction as if such transaction had occurred on January 1, 1999.
Excluded from these presentations is the non recurring loss from the transaction
of approximately $35 million.
5
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BRE Properties, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
(in thousands)
June 30, 2000
<TABLE>
<CAPTION>
Historical Pro Forma Pro Forma
June 30, 2000 Adjustments Consolidated
-------------------- -----------------------------------------
<S> <C> <C> <C> <C>
Real estate portfolio:
Real estate portfolio $1,875,505 1,2 $(320,695) $1,554,810
Accumulated depreciation (127,261) 1 21,530 (105,731)
-------------------- -----------------------------------------
Total real estate portfolio 1,748,244 (299,165) 1,449,079
Other assets 41,227 1 (4,000) 37,227
-------------------- -----------------------------------------
Total assets $1,789,471 $(303,165) $1,486,306
==================== =========================================
Liabilities and shareholders' equity:
Mortgage loans $ 195,964 1 $ (23,673) $ 172,291
Unsecured senior notes 243,000 - 243,000
Unsecured line of credit 417,500 1 (240,000) 177,500
Accounts payable and accrued expenses 19,004 1 (4,327) 14,677
-------------------- -----------------------------------------
Total liabilities 875,468 (268,000) 607,468
Minority interest 88,570 - 88,570
Shareholders' equity:
Preferred stock, $0.01 par value, liquidation
preference $25.00 per share, 10,000,000 shares
authorized. 2,150,000 shares of Series A
outstanding at June 30, 2000 53,750 - 53,750
Common stock, $0.01 par value, 100,000,000 shares
authorized. 44,931,381 shares issued and
outstanding at June 30, 2000 449 - 449
Additional paid-in capital 675,685 - 675,685
Accumulated net income in excess of cumulative
dividends 98,197 1 (35,165) 63,032
Stock purchase loans to executives (2,648) - (2,648)
-------------------- -----------------------------------------
Total shareholders' equity 825,433 (35,165) 790,268
Total liabilities and shareholders' equity $1,789,471 $(303,165) $1,486,306
==================== =========================================
</TABLE>
1. Reflects the adjustments associated with both closings, the reduction of
assets upon sale of the 22 communities and the use of proceeds to pay down
mortgage loans and the outstanding balance associated with our line of
credit.
2. Reflects aggregate $12 million, or 15%, equity investment in joint venture.
6
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BRE Properties, Inc.
Unaudited Pro Forma Condensed Statement of Income
(in thousands)
Twelve months ended December 31, 1999
<TABLE>
<CAPTION>
Historical Pro Forma
December 31, 1999 Pro Forma Adjustments Consolidated
---------------------- -----------------------------------------------
<S> <C> <C> <C> <C>
Rental income $218,057 $(37,059) $180,998
Other income 16,196 (332) 15,864
---------------------- -----------------------------------------------
Total revenue 234,253 (37,391) 196,862
Real estate expenses 70,469 (14,793) 55,676
Depreciation 35,524 (6,620) 28,904
Interest expense 41,695 (21,494) 20,201
General and administrative 6,706 - 6,706
Provision for non-recurring charge 1,250 - 1,250
---------------------- -----------------------------------------------
Total expenses 155,644 (42,907) 112,737
Income before gains (losses) on sale of real
estate investments and minority interest in
consolidated subsidiary 78,609 5,516 84,125
Gains (losses) on sales of real estate
investments 54 - 54
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Income before minority interest in
consolidated subsidiary 78,663 5,516 84,179
Minority interest 5,447 - 5,447
---------------------- -----------------------------------------------
Net income $ 73,216 $ 5,516 $ 78,732
====================== ===============================================
Dividends attributable to preferred stock 4,182 - 4,182
---------------------- -----------------------------------------------
Net income available to common shareholders $ 69,034 $ 5,516 $ 74,550
====================== ===============================================
Net income per share- Basic $1.55 $ 0.12 $1.67
====================== ===============================================
Net income per share-
assuming dilution $1.55 $ 0.10 $1.65
====================== ===============================================
Funds from operations $110,601 $(1,104) $109,497
====================== ===============================================
Per share funds from operations assuming
dilution $2.32 $(0.03) $2.29
====================== ===============================================
Weighted average shares outstanding - basic 44,540 44,540
Weighted average shares outstanding -
assuming dilution 47,760 47,760
</TABLE>
7
<PAGE>
BRE Properties, Inc.
Unaudited Pro Forma Condensed Statement of Income
(in thousands)
Six months ended June 30, 2000
<TABLE>
<CAPTION>
Historical June Pro Forma
30, 2000 Pro Forma Adjustments Consolidated
---------------------- -----------------------------------------------
<S> <C> <C> <C> <C>
Rental income $117,730 $(19,551) $ 98,179
Other income 9,310 (277) 9,033
---------------------- -----------------------------------------------
Total revenue 127,040 (19,828) 107,212
Real estate expenses 36,618 (7,756) 28,862
Depreciation 18,660 (3,454) 15,206
Interest expense 23,729 (10,447) 13,282
General and administrative 3,957 - 3,957
Internet business segment 1,818 - 1,818
---------------------- -----------------------------------------------
Total expenses 84,782 (21,657) 63,125
Income before minority interest in
consolidated subsidiary 42,258 1,829 44,087
Minority interest 2,782 - 2,782
---------------------- -----------------------------------------------
Net income $ 39,476 $ 1,829 $ 41,305
====================== ===============================================
Dividends attributable to preferred stock 2,284 - 2,284
---------------------- -----------------------------------------------
Net income available to common shareholders $ 37,192 $ 1,829 $ 39,021
====================== ===============================================
Net income per share- Basic $0.83 $ 0.04 $0.87
====================== ===============================================
Net income per share-
assuming dilution $0.82 $ 0.04 $0.86
====================== ===============================================
Funds from operations $ 60,452 $ (1,625) $ 58,827
====================== ===============================================
Per share funds from operations assuming
dilution $1.26 $(0.03) $1.23
====================== ===============================================
Weighted average shares outstanding - basic 44,750 44,750
Weighted average shares outstanding -
assuming dilution 48,000 48,000
</TABLE>
8
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EXHIBIT INDEX
Exhibit
No. Description
--------- -----------
2.1 Amendment No. 1 to Purchase and Sale Agreement, dated September 6,
2000, by and among G & I III Residential One LLC, BRE Properties,
Inc. and BRE Properties Investors LLC
9
