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Previous: BEACON PROPERTIES L P, 10-Q, 1997-11-14 |
Next: BROOKDALE LIVING COMMUNITIES INC, 10-Q, 1997-11-14 |
<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): November 14, 1997
BEACON PROPERTIES, L.P.
(Exact name of Registrant as specified in its Charter)
Delaware
(State of Incorporation)
0-22139 04-3224259
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive officers) (Zip Code)
(617) 330-1400
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
In November 1997, Beacon Properties, L.P. (the "Operating Partnership")
entered into a Sale and Purchase Agreement with Dai-Ichi Life Property Holdings,
Inc. and Dai-Ichi Life Capital Properties, Inc. ("Dai-Ichi") to purchase Dai-
Ichi's 50% interest in a 23-story Office Building located at 101 North Wacker
Drive in Chicago, Illinois for approximately $29.5 million. The Operating
Partnership previously entered into a Sale and Purchase Agreement with
Metropolitian Life Insurance Company ("MetLife") for their 50% interest in the
property for approximately $29.5 Million. In connection therewith, Dai-Ichi
agreed to waive it's first refusal option to purchase MetLife's 50% interest in
the Property. The Sale and Purchase Agreement with Dai-Ichi is subject to the
exercise of a first refusal option to purchase Dai-Ichi's 50% interest by
MetLife.
Item. 7 Financial Statements and Exhibits
(a) Financial Statements Under Rule 3-14 of Regulation S-X - None
(b) Pro Forma Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of September 30, 1997
(Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 1996 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Nine
Months Ended September 30, 1997 (Unaudited)
(c) Exhibits
2
<PAGE>
BEACON PROPERTIES, L.P.
SIGNATURE
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.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation
Its General Partner
/s/ Robert J. Perriello
-----------------------------------------
Robert J. Perriello
Senior Vice President
and Chief Financial Officer
Date: November 14, 1997
3
<PAGE>
BEACON PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Beacon Properties, L.P. (the "Operating Partnership") as of September 30, 1997,
is presented as if the Civic Opera Building, 200 West Adams, 101 North Wacker
and Lakeside properties were acquired on September 30, 1997.
The pro forma Condensed Consolidated Statements of Operations for the year
ended December 31, 1996 and nine months ended September 30, 1997 are presented
as if the acquisition of the Properties acquired from January 1, 1996 to October
20, 1997 (as more fully described below) and 101 North Wacker, the closing of
the MetLife Mortgage loan, the Beacon Properties Corporation common stock
offerings from January 1996 to April 1997 (as more fully described below) and
the Beacon Properties Corporation 8.98% Series A Cumulative Redeemable Preferred
Stock Offering at $25.00 per share had occurred as of January 1, 1996.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Condensed
Consolidated Balance Sheet and Statement of Operations are not necessarily
indicative of what actual results of operations of the Operating Partnership
would have been for the period, nor does it purport to represent the Operating
Partnership's results of operations for future periods.
7
<PAGE>
Acquisitions included in pro forma:
<TABLE>
<CAPTION>
Rentable Year Built/ Date of
Property Name Sq Ft Renovated Acquisition
- ------------- ----- --------- -----------
1996 Acquisitions
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Perimeter Center, Atlanta, GA 3,302,000 1970-1989 02/15/96
- ---------------------------------------------------------------------------------------------
New York Life Portfolio,
Chicago, IL and Washington, D.C. 1,012,000 1984-1986 08/16/96
- ---------------------------------------------------------------------------------------------
Fairfax County Portfolio,
McLean, VA and Herndon, VA 550,000 1981-1988 09/05/96
- ---------------------------------------------------------------------------------------------
Rosslyn Virginia Portfolio, Rosslyn, VA 666,000 1974-1980 10/18/96
- ---------------------------------------------------------------------------------------------
New England Executive Park, Burlington, MA 817,000 1970-1985 11/15/96
- ---------------------------------------------------------------------------------------------
245 First Street, Cambridge, MA 263,000 1985-1986 11/21/96
- ---------------------------------------------------------------------------------------------
10960 Wilshire Boulevard, Westwood, CA 544,000 1971-1992 11/21/96
- ---------------------------------------------------------------------------------------------
Shoreline Technology Park, Mountain View, CA 727,000 1985-1991 12/20/96
- ---------------------------------------------------------------------------------------------
Lake Marriott Business Park, Santa Clara, CA 400,000 1981 12/20/96
- ---------------------------------------------------------------------------------------------
Presidents Plaza, Chicago, IL 791,000 1980-1982 12/27/96
- ---------------------------------------------------------------------------------------------
<CAPTION>
Purchase Price (in thousands)
-------------------------------------
Seller Cash Debt O.P.Units Total
- ------ ---- ---- --------- -----
1996 Acquisitions
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Metropolitan Life Insurance Company $322,200 $13,800 $336,000
- ---------------------------------------------------------------------------------------------
New York Life Insurance Company $150,000 $150,000
- ---------------------------------------------------------------------------------------------
Greensboro Associates, John Marshall Associates
Limited Partnership and Woodland-Northridge I
Limited Partnership $55,400 $21,600 $77,000
- ---------------------------------------------------------------------------------------------
LaSalle Fund II $99,050 $99,050
- ---------------------------------------------------------------------------------------------
New England Executive Park Limited Partnership, et al $75,000 $75,000
- ---------------------------------------------------------------------------------------------
Riverview Building Combined Limited Partnership $45,000 $45,000
- ---------------------------------------------------------------------------------------------
10960 Property Corporation $133,000 $133,000
- ---------------------------------------------------------------------------------------------
Teachers Insurance and Annuity Association (TIAA) $139,080 $139,080
- ---------------------------------------------------------------------------------------------
Teachers Insurance and Annuity Association (TIAA) $43,920 $43,920
- ---------------------------------------------------------------------------------------------
Metropolitan Life Insurance Company $38,000 $39,000 $77,000
- ---------------------------------------------------------------------------------------------
<CAPTION>
Rentable Year Built/ Date of
Property Name Sq Ft Renovated Acquisition
- ------------- ----- --------- -----------
1997 Acquisitions
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
10880 Wilshire Boulevard, Westwood, CA 531,000 1970 4/23/97
- ---------------------------------------------------------------------------------------------
Centerpointe I and II, Fairfax, VA 409,000 1988-1990 4/30/97
- ---------------------------------------------------------------------------------------------
Westbrook Corporate Center, Westchester, IL 1,106,000 1985-1996 5/23/97
- ---------------------------------------------------------------------------------------------
175 Wyman Street, Waltham, MA (1) (1) 5/13/97
- ---------------------------------------------------------------------------------------------
225 Franklin Street, Boston, MA 929,545 1966 6/4/97
- ---------------------------------------------------------------------------------------------
Sunnyvale Business Center, Sunnyvale, CA 175,000 1990 7/1/97
- ---------------------------------------------------------------------------------------------
Riverside, Newton, MA (2) (2) 8/21/97
- ---------------------------------------------------------------------------------------------
150 California, San Francisco, CA (3) (3) 9/25/97
- ---------------------------------------------------------------------------------------------
Media Center , Los Angeles, CA (4) (4) 9/29/97
- ---------------------------------------------------------------------------------------------
Civic Opera Building, Chicago, IL 824,000 1994 10/1/97
- ---------------------------------------------------------------------------------------------
200 West Adams, Chicago, IL 677,000 1985 10/8/97
- ---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Lakeside, Atlanta, GA 391,000 1972-1978 10/20/97
- ---------------------------------------------------------------------------------------------
101 North Wacker, Chicago, IL 575,000 1980 Pending
Purchase Price (in thousands)
-------------------------------------
Seller Cash Debt O.P.Units Total
- ------ ---- ---- --------- -----
<S> <C> <C> <C> <C>
1997 Acquisitions
- ---------------------------------------------------------------------------------------------
10880 Property Corporation $99,800 $99,800
- ---------------------------------------------------------------------------------------------
Joshua Realty Corporation $25,000 $30,000 $55,000
- ---------------------------------------------------------------------------------------------
Westbrook Corporate Center Associates,
Westbrook Corporate Center IV Associates Limited
Partnership and Westbrook Corporate
Center V Associates Limited Partnership $42,700 $106,000 $33,400 $182,100
- ---------------------------------------------------------------------------------------------
Hewlett-Packard Company $24,000 $24,000
- ---------------------------------------------------------------------------------------------
Hexalon Real Estate, Inc. $280,000 $280,000
- ---------------------------------------------------------------------------------------------
O.M. Sunnyvale Associates, L.P. $33,800 $33,800
- ---------------------------------------------------------------------------------------------
Cabot, Cabot & Forbes of New England, Inc. $32,500 $32,500
- ---------------------------------------------------------------------------------------------
CalProp, Inc. $10,600 $10,600
- ---------------------------------------------------------------------------------------------
City of Burbank, Ishverbhai Patel, Patel Charitable
Remainder Unitrust and Burbank Holdings, Inc. $18,850 $18,850
- ---------------------------------------------------------------------------------------------
Windy Point LLC and Range Line LLC $21,136 $31,773 $6,701 $59,610
- ---------------------------------------------------------------------------------------------
Adams Family LLC $72,175 $72,175
- ---------------------------------------------------------------------------------------------
Mutual Life Insurance Company of New York $38,000 $38,000
- ---------------------------------------------------------------------------------------------
Dai-Ichi and Metropolitan Life Insurance Co. $58,965 $58,965
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) 175 Wyman Street consists of a vacant 335,000 square foot office/research
and development complex and 26.7 acres of land suitable for development. The
Operating Partnership plans to redevelop the property into 400,000 square feet
of class A office space.
(2) The Riverside investment consists of a mortgage loan receivable from
Riverside Project LLC in the amount of $26,000 which bears interest at 9% and is
due upon sale along with 50% of any excess sale proceeds. In addition, loans
bearing interest at 7% in the amount of $3,250 each are due from Beacon Property
Management Corporation and Beacon Design Corporation, the proceeds of which were
used by these entities to capitalize Riverside Project LLC.
(3) 150 California land consists of a parcel of land on which the Operating
Partnership plans to develop a 207,000 square foot class A office property.
(4) Media Center consists of a parcel of land on which the Operating Partnership
plans to develop a 585,000 square feet of class A office space.
Common and Preferred Stock Offerings included in pro forma:
<TABLE>
<CAPTION>
Price Per Gross Net
Year Month Shares Type Share Proceeds Proceeds
---- ----- ------ ---- ----- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
1996 March 7,036,000 Common $26.25 $184,695 $173,800
1996 August 5,750,000 Common 25.75 148,063 139,400
1996 November 13,723,000 Common 30.75 421,982 398,900
1996 December 1,132,400 Common 33.465 37,896 37,800
1997 April 7,000,000 Common 32.125 224,875 212,722
1997 June 8,000,000 Preferred 25.00 200,000 193,350
</TABLE>
<PAGE>
BEACON PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------------------------------------------
Beacon
Properties,
L.P. Civic Opera 200 West 101 North
Historical Building Adams Lakeside Wacker
---------- -------- ----- -------- ------
(dollars in thousands)
ASSETS
<S> <C> <C> <C> <C> <C>
Real estate, net $2,230,715 $59,610 $72,175 $38,000 $58,965
Deferred financing and leasing costs, net 19,179
Cash and cash equivalents 36,609 (20,136) (6,675)
Mortgages and notes receivable 85,196
Other assets 48,783 (1,000) (500) (1,000) (2,948)
Investments in and advance
to joint ventures and corporations 50,472
----------- ----------- ---------- ----------- ---------
Total assets $2,470,954 $38,474 $65,000 $37,000 $56,017
=========== =========== ========== =========== =========
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $586,925 $31,773 (A)
Note payable, Credit Facility 249,000 $65,000 $37,000 $56,017
Other liabilities 50,743
Investment in joint venture 24,052
----------- ----------- ---------- ----------- ---------
Total liabilities 910,720 31,773 65,000 37,000 $56,017
Limited partners' capital interest at redemption value 336,422 6,701 (B)
Partners' capital 1,223,812
----------- ----------- ---------- ----------- ---------
Total liabilities and partners' capital $2,470,954 $38,474 $65,000 $37,000 $56,017
=========== =========== ========== =========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pro Forma Adjustments
-----------------------------------
Pro Forma
Pro Forma Consolidated
--------- ------------
(dollars in thousands)
ASSETS
<S> <C> <C>
Real estate, net $2,459,465
Deferred financing and leasing costs, net 19,179
Cash and cash equivalents 9,798
Mortgages and notes receivable 85,196
Other assets 43,335
Investments in and advance
to joint ventures and corporations 50,472
------------- ---------------
Total assets $2,667,445
============= ===============
LIABILITIES AND PARTNERS' CAPITAL
Mortgage notes payable $618,698
Note payable, Credit Facility 407,017
Other liabilities 50,743
Investment in joint venture 24,052
------------- ----------------
Total liabilities 1,100,510
Limited partners' capital interest at redemption value $480(C) 343,603
Partners' capital (480) 1,223,332
------------- ----------------
Total liabilities and partners' capital $2,667,445
============= ================
</TABLE>
(A) The mortgage debt has an interest rate of 7.37% and requires monthly
principal and interest payments based on a 25 year amortization schedule.
The mortgage matures March 15, 2000 but maybe extended until March 15, 2003
based on compliance with certain covenant requirements.
(B) The seller of Civic Opera Building was issued $6,701 of Operating
Partnership Units consisting of 156,756 units valued at $42.745 each.
(C) Pro forma adjustment required to adjust the issuance of 156,756 units (See
(B)) to September 30, 1997 redemption value of $45.8125 per Unit. The
$45.8125 value per Unit is based on the closing price of Beacon Properties
Corporation's common stock on September 30, 1997.
9
<PAGE>
BEACON PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon October &
Properties, New York Life November
L.P. Perimeter and Fairfax Va. 1996
Historical Center (A) Portfolios (B) Acquisitions (G)
----------- ---------- -------------- ----------------
(dollars in thousands except per unit amounts and units outstanding)
<S> <C> <C> <C> <C>
Revenue:
Rental income $147,825 $6,420 19,098 38,886
Management fees 3,005
Recoveries from tenants 16,719 304 3,788 3,674
Mortgage interest income 4,970
Other income 11,272 208 845 3,012
------------ ----------- --------------- ---------------
Total revenue 183,791 6,932 23,731 45,572
------------ ----------- --------------- ---------------
Expenses:
Property expenses 37,211 1,562 4,875 11,716
Real estate taxes 18,124 591 1,708 3,991
General and administrative 19,331 378 812 1,700
Mortgage interest expense 30,300 1,895 (C) 2,954 (F)
Interest - amortization of financing costs 2,084 15 (D)
Depreciation and amortization 33,184 1,196 (E) 4,374 (E) 9,105 (E)
------------ ----------- --------------- ---------------
Total expenses 140,234 5,637 14,723 26,512
------------ ----------- --------------- ---------------
Income from operations 43,557 1,295 9,008 19,060
Equity in net income of joint ventures and corporation 4,989
------------ ----------- --------------- ---------------
Income from continuing operations 48,546 1,295 9,008 19,060
Discontinued operations:
Loss from operations - Construction Company (2,609)
Loss on sale - Construction Company (249)
Gain on sale - Westlakes Office Park
------------ ----------- --------------- ---------------
Income before extraordinary items 45,688 1,295 9,008 19,060
Series A Preferred distributions
------------ ----------- --------------- ---------------
Net income available for units
before extraordinary items $45,688 $1,295 $9,008 $19,060
============ =========== =============== ===============
Units Outstanding (Excluding Preferred Units)
Net income per unit
(1) Includes Depreciation and amortization of $4,033
<CAPTION>
Properties
December Acquired Westlakes
1996 as of Office Park
Acquisitions (H) September 30, 1997 (I) Sale (K)
---------------- ---------------------- --------
(dollars in thousands except per unit amounts and units outstanding)
<S> <C> <C> <C>
Revenue:
Rental income 26,858 69,302 ($8,422)
Management fees
Recoveries from tenants 6,099 8,203 (1,020)
Mortgage interest income
Other income 470 2,783 (1,293)
------------------ ---------------- -------------
Total revenue 33,427 80,288 (10,735)
------------------ ---------------- -------------
Expenses:
Property expenses 4,509 14,299 (2,588)
Real estate taxes 5,036 8,700 (626)
General and administrative 1,250 2,011 (471)
Mortgage interest expense 10,380 (J)
Interest - amortization of financing costs
Depreciation and amortization 6,555 (E) 19,927 (E) (2,458)
------------------ ---------------- -------------
Total expenses 17,350 55,317 (6,143)
------------------ ---------------- -------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Income from operations 16,077 24,971 (4,592)
Equity in net income of joint ventures and corporation
------------------ ---------------- -------------
Income from continuing operations 16,077 24,971 (4,592)
Discontinued operations:
Loss from operations - Construction Company
Loss on sale - Construction Company
Gain on sale - Westlakes Office Park 16,505
------------------ ---------------- -------------
Income before extraordinary items 16,077 24,971 11,913
Series A Preferred distributions
------------------ ---------------- -------------
Net income available for units
before extraordinary items $16,077 $24,971 $11,913
================== ================ =============
Units Outstanding (Excluding Preferred Units)
Net income per unit
(1) Includes Depreciation and amortization of $4,033
<CAPTION>
Properties
Acquired or to
be Aquired After Pro Forma Pro Forma
September 30, 1997 (L) Adjustments Consolidated
---------------------- ----------- ------------
(dollars in thousands except per unit amounts and units outstanding)
<S> <C> <C> <C>
Revenue:
Rental income $32,342 $332,309
Management fees 3,005
Recoveries from tenants 9,118 46,885
Mortgage interest income 3,406 (M) 8,376
Other income 729 18,026
------------------- --------------- ---------------
Total revenue 42,189 3,406 408,601
------------------- --------------- ---------------
Expenses:
Property expenses 12,792 84,375
Real estate taxes 10,330 47,854
General and administrative 2,087 27,099
Mortgage interest expense 26,261 (N) 71,789
Interest - amortization of financing costs 2,099
Depreciation and amortization 6,863 (E) 78,745
------------------- --------------- ---------------
Total expenses 32,072 26,261 311,962
------------------- --------------- ---------------
Income from operations 10,118 (22,854) 96,640
Equity in net income of joint ventures and corporation (450) (O) 4,539 (1)
------------------- --------------- ---------------
Income from continuing operations 10,118 (23,365) 101,178
Discontinued operations:
Loss from operations - Construction Company (2,609)
Loss on sale - Construction Company (249)
Gain on sale - Westlakes Office Park 16,505
------------------- --------------- ---------------
Income before extraordinary items 10,118 (23,305) 114,825
Series A Preferred distributions (17,960) (P) (17,960)
------------------- --------------- ---------------
Net income available for units
before extraordinary items $10,118 ($41,265) $96,865
=================== =============== ===============
Units Outstanding (Excluding Preferred Units) 63,156,724
Net income per unit $1.53
(1) Includes Depreciation and amortization of $4,033
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
10
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(A) Results of operations of Perimeter Center for the period ended
February 14, 1996.
<TABLE>
<S> <C>
Rental income- historical $6,128
Pro forma straight-line rent adjustment 292
---------
Pro forma rental income $6,420
=========
</TABLE>
(B) Results of operations of the Fairfax County Portfolio and the New York
Life Portfolio for the periods ended September 4, 1996 and August 15,
1996, respectively.
<TABLE>
<CAPTION>
Fairfax New York
County Life
Portfolio Portfolio Total
--------------------------------------------
<S> <C> <C> <C>
Revenue:
Rental income-historical $7,284 $11,048 $18,332
Pro forma straight-line rent adjustment 377 389 766
--------------------------------------------
Pro forma rental income 7,661 11,437 19,098
Management fees
Recoveries from tenants 542 3,247 3,788
Mortgage interest income
Other income 72 773 845
--------------------------------------------
Total revenue 8,274 15,457 23,731
--------------------------------------------
Expenses:
Property expenses 1,581 3,294 4,875
Real estate taxes 364 1,345 1,708
General and administrative 80 732 812
Mortgage interest expense (F) 2,954 2,954
Interest - amortization of financing costs
Depreciation and amortization (E) 1,568 2,806 4,374
--------------------------------------------
Total expenses 6,546 8,177 14,723
--------------------------------------------
Income from operations $1,728 $7,280 $9,008
============================================
</TABLE>
(C) Net interest expense associated with the MetLife Mortgage Loan in the amount
of $218 million based on a 7.08% interest rate for the period ended prior to
March 15, 1996.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
11
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(E) Detail of depreciation expense by property is presented as follows:
<TABLE>
<CAPTION>
Basis Life Depreciation
----- ---- ------------
<S> <C> <C> <C>
Perimeter Center $287,130 30 yrs $1,196
=============
Fairfax County Portfolio 69,300 30 yrs $1,568
The New York Life Portfolio 135,000 30 yrs 2,806
-------------
$4,374
=============
October & November 1996 Acquisitions:
------------------------------------
Rosslyn, Virginia Portfolio 89,145 30 yrs $2,352
New England Executive Park 67,500 30 yrs 1,969
245 First Street 40,500 30 yrs 1,209
10960 Wilshire Boulevard 119,700 30 yrs 3,574
-------------
$9,105
=============
December 1996 Acquisitions:
--------------------------
Lake Marriott Business Park 31,110 30 yrs $1,008
Shoreline Technology Park 100,650 30 yrs 3,263
Presidents Plaza 69,250 30 yrs 2,284
-------------
$6,555
=============
1997 acquisitions as of September 30, 1997
------------------------------------------
10880 Wilshire Boulevard 102,000 30 yrs $3,400
Centerpointe 49,500 30 yrs 1,650
Westbrook Corporate Center 163,890 30 yrs 5,463
225 Franklin Street 252,000 30 yrs 8,400
Sunnyvale Business Center 30,420 30 yrs $1,014
-------------
$19,927
=============
Properties acquired or to be acquired
-------------------------------------
after September 30, 1997:
------------------------
Civic Opera Building 53,649 30 yrs 1,788
200 West Adams 64,958 30 yrs 2,165
Lakeside 34,200 30 yrs 1,140
101 North Wacker 53,069 30 yrs 1,769
-------------
$6,863
=============
</TABLE>
(F) Fairfax County Portfolio interest expense on debt assumed for period prior
to acquisition:
<TABLE>
<CAPTION>
Principal Rate Expense
--------- ---- -------
<S> <C> <C> <C>
John Marshall $21,068 8.38% $1,197
EJ Randolph (1) 18,016 7.78% 951
Northridge 16,306 7.28% 806
----------- -----------
$55,390 $2,954
=========== ===========
</TABLE>
(1) Paid off by Credit Facility proceeds at closing.
12
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(G) Results of operations of the Rosslyn, Virginia Portfolio, New England
Executive Park, 245 First Street and 10960 Wilshire Boulevard for the period
prior acquisition.
<TABLE>
<CAPTION>
Rosslyn New England 10960
Virginia Executive Wilshire
Portfolio Park 245 First St. Blvd. Total
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income- historical $11,640 $11,766 $4,552 $9,650 $37,607
Pro forma straight-line rent adjustment 361 283 510 124 1,278
---------------------------------------------------------------------
Pro forma rental income 12,001 12,049 5,062 9,774 38,885
Management fees
Recoveries from tenants 528 1,113 1,776 257 3,674
Mortgage interest income
Other income $1,066 533 1,413 3,012
---------------------------------------------------------------------
Total revenue 13,595 13,162 7,371 11,444 45,571
---------------------------------------------------------------------
Expenses:
Property expenses 2,611 4,958 1,020 3,126 11,716
Real estate taxes 747 1,421 913 910 3,991
General and administrative 575 471 81 572 1,700
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (E) 2,352 1,969 1,209 3,574 9,105
---------------------------------------------------------------------
Total expenses 6,286 8,819 3,223 8,183 26,512
---------------------------------------------------------------------
Income from operations 7,308 4,342 4,148 3,261 19,059
=====================================================================
</TABLE>
(H) Results of operations of Lake Marriott Business Park, Shoreline Technology
Park and Presidents Plaza for the period prior to acquisition.
<TABLE>
<CAPTION>
Shoreline Lake Marriott
Technology Business Presidents
Park Park Plaza Total
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Rental income-historical $12,942 $3,824 $9,244 26,009
Pro forma straight-line rent adjustment 237 611 848
-------------------------------------------------------------
Pro forma rental income 12,942 4,061 9,855 26,857
Management fees
Recoveries from tenants 1,068 996 4,035 6,099
Mortgage interest income
Other income 470 470
-------------------------------------------------------------
Total revenue 14,010 5,057 14,359 33,426
-------------------------------------------------------------
Expenses:
Property expenses 105 718 3,685 4,509
Real estate taxes 1,068 395 3,572 5,036
General and administrative 71 8 1,171 1,250
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (E) 3,263 1,008 2,284 6,555
-------------------------------------------------------------
Total expenses 4,508 2,130 10,712 17,350
-------------------------------------------------------------
Income from operations 9,503 2,927 3,647 16,077
=============================================================
</TABLE>
13
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(I) Results of operations of 10880 Wilshire Boulevard, Centerpointe,
Westbrook Corporate Center, 225 Franklin Street and Sunnyvale Business
Center for the year 1996.
<TABLE>
<CAPTION>
10880 Westbrook 225 Sunnyvale
Wilshire Corporate Franklin Business
Boulevard Centerpointe Center Street Center Total
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $8,687 $7,293 $21,029 $24,172 $3,209 $64,390
Pro forma straight-line rent adjustment 399 300 2,778 1,435 4,912
---------------------------------------------------------------------------
Pro forma rental income 9,086 7,593 23,807 25,607 3,209 69,302
Management fees
Recoveries from tenants 80 578 1,806 5,527 212 8,203
Mortgage interest income
Other income 1,306 99 136 1,230 12 2,783
---------------------------------------------------------------------------
Total revenue 10,472 8,270 25,749 32,364 3,433 80,288
---------------------------------------------------------------------------
Expenses:
Property expenses 3,066 1,740 4,400 5,093 14,299
Real estate taxes 1,043 497 3,113 3,846 201 8,700
General and administrative 720 180 208 844 59 2,011
Mortgage interest expense (J) 1,914 8,466 10,380
Interest - amortization of financing costs
Depreciation and amortization (E) 3,400 1,650 5,463 8,400 1,014 19,927
---------------------------------------------------------------------------
Total expenses 8,229 5,981 21,650 18,183 1,274 55,317
---------------------------------------------------------------------------
Income from operations $2,243 $2,289 $4,099 $14,181 $2,159 $24,971
===========================================================================
</TABLE>
(J) Interest expense in mortgage debt assumed:
Centerpointe - historical 1996 expense.
Westbrook Corporate Center - based on a principal balance of $106,000 with
interest at 8%.
(K) Historical results of operations of Westlakes Office Park
(L) Results of operations of Civic Opera Building, 200 West Adams, Lakeside and
101 North Wacker for the year 1996.
<TABLE>
<CAPTION>
Civic 200 101
Opera West North
Building Adams Lakeside Wacker Total
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $10,358 $10,467 $4,408 $6,426 $31,659
Pro forma straight-line rent adjustment 69 (68) 105 577 683
----------------------------------------------------------
Pro forma rental income 10,427 10,399 4,513 7,003 32,342
Management fees
Recoveries from tenants 1,545 2,647 241 4,685 9,118
Mortgage interest income
Other income 551 67 36 75 729
----------------------------------------------------------
Total revenue 12,523 13,113 4,790 11,763 42,189
----------------------------------------------------------
Expenses:
Property expenses 6,070 2,393 1,795 2,534 12,792
Real estate taxes 1,990 3,539 358 4,443 10,330
General and administrative 937 339 462 349 2,087
Mortgage interest expense (J)
Interest - amortization of financing costs
Depreciation and amortization (E) 1,788 2,165 1,140 1,769 6,863
----------------------------------------------------------
Total expenses 10,785 8,436 3,755 9,095 32,072
----------------------------------------------------------
Income from operations $1,738 $4,677 $1,035 $2,668 $10,118
==========================================================
</TABLE>
F-14
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
<TABLE>
<S> <C>
(M) Interest income related to the acquisition of the Rowes Wharf mortgage $ 611
-----------
Interest income on Riverside notes receivable:
Interest income - note receivable from Riverside Project LLC ($26,000 * 9%) 2,340
Interest income - note receivable from Beacon Design Corp. ($3,250 * 7%) 228
Interest income - note receivable from Beacon Property Management Corp.
($3,250 * 7%) 228
-----------
Total 2,795
-----------
Grand total $3,406
==========
(N) Credit facility interest expense:
Credit Facility balance per pro forma balance sheet $407,017
Less Credit Facility balances relating to development projects
in which the associated interest expense would be capitalized:
Development projects owned or underdevelopment as of September 30, 1997:
Crosby Phase II (6,350)
175 Wyman Street (24,840)
150 California (10,640)
Media Center (19,030)
-----------
Adjusted pro forma Credit Facility balance 346,157
Average Credit Facility rate through December 31, 1996 7.78%
-----------
Pro Forma Credit Facility interest expense full year 26,931
Less historical 1996 Credit Facility interest expense 3,294
-----------
Pro Forma Credit Facility adjustment 23,637
-----------
Mortgage Interest:
Pro forma mortgage interest on Centerpointe full year based on principal
balance of $30,000 with interest at 7.32% 2,196
Less: Historical 1996 interest expense 1,914
-----------
282
-----------
Mortgage Interest:
Pro forma mortgage interest on Civic Opera Building full year based on
principal balance of $31,773 with interest at 7.37% 2,342
-----------
Grand total $26,261
===========
(0) Adjustment to equity in net income of corporations as a result of Riverside
notes:
Beacon Design Corp. note payable ($3,250 * 7%) ($228)
Beacon Property Management Corp. note payable ($3,250 * 7%) (228)
-----------
Total interest expense adjustment (455)
Operating Partnership ownership % of entities 98.99%
-----------
Adjustment to equity in net income of corporations ($450)
===========
(P) Series A preferred units based on 8,000,000 units with a $25.00 per unit
redemption price at 8.98%.
</TABLE>
15
<PAGE>
BEACON PROPERTIES, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine months ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Beacon Properties
Properties, Acquired Westlakes
L.P. as of Office Park
Historical September 30, 1997(A) Sale (B)
----------- --------------------- --------
(dollars in thousands except per unit amounts and units outstanding)
<S> <C> <C> <C>
Revenue:
Rental income $218,544 $30,761 (3,087)
Management fees 2,445
Recoveries from tenants 29,376 3,066 (408)
Mortgage interest income 5,320
Other income 10,350 276 (405)
-------------- ------------------ -------------
Total revenue 266,035 34,102 (3,900)
-------------- ------------------ -------------
Expenses:
Property expenses 51,169 5,943 (878)
Real estate taxes 27,960 3,821 (237)
General and administrative 27,920 548 (283)
Mortgage interest expense 36,313 4,065
Interest - amortization of financing costs 1,131
Depreciation and amortization 50,756 7,858 (D) (2,071)
-------------- ------------------ -------------
Total expenses 195,249 22,236 (3,469)
-------------- ------------------ -------------
Income from operations 70,786 11,867 (431)
Equity in net income of joint ventures and corporations 4,940
-------------- ------------------ -------------
Income from continuing operations 75,726 11,867 (431)
Discontinued operations:
Loss from operations - Construction Company (2,263)
-------------- ------------------ -------------
Income before extraordinary items 73,463 11,867 (431)
Series A Preferred distributions (5,388)
-------------- ------------------ -------------
Net income available for units
before extraordinary items $68,075 $11,867 (431)
============== ================== =============
Units Outstanding ( Excluding Preferred Units )
Net income per unit
(1) Includes Depreciation and amortization of $3,086
<CAPTION>
Properties
Acquired or to be
Acquired After Pro Forma Pro Forma
September 30, 1997(C) Adjustments Consolidated
--------------------- ----------- ------------
(dollars in thousands except per unit amounts and units outstanding)
<S> <C> <C> <C>
Revenue:
Rental income $25,055 $271,273
Management fees 2,445
Recoveries from tenants 6,131 38,164
Mortgage interest income 1,833 (E) 7,153
Other income 818 11,039
-------------- -------------- ---------------
Total revenue 32,003 1,833 330,074
-------------- -------------- ---------------
Expenses:
Property expenses 8,369 64,602
Real estate taxes 8,139 39,683
General and administrative 1,532 29,717
Mortgage interest expense 12,322 (F) 52,700
Interest - amortization of financing costs 1,131
Depreciation and amortization 5,147 (D) 61,690
-------------- -------------- ---------------
Total expenses 23,186 12,322 249,523
-------------- -------------- ---------------
Income from operations 8,817 (10,488) 80,551
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Equity in net income of joint ventures and corporations (338) (G) 4,602 (1)
-------------- -------------- ---------------
Income from continuing operations 8,817 (10,826) 85,153
Discontinued operations:
Loss from operations - Construction Company (2,263)
-------------- -------------- ---------------
Income before extraordinary items 8,817 (10,826) 82,890
Series A Preferred distributions (8,082)(H) (13,470)
-------------- -------------- ---------------
Net income available for units
before extraordinary items $8,817 ($18,908) $69,420
============== ============== ===============
Units Outstanding ( Excluding Preferred Units ) 63,156,724
Net income per unit $1.10
(1) Includes Depreciation and amortization of $3,086
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
16
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
(Unaudited)
(A) Results of operations of 10880 Wilshire Boulevard, Centerpointe, Westbrook
Corporate Center, 225 Franklin Street and Sunnyvale Business Center for the
period prior to the date of acquisition.
<TABLE>
<CAPTION>
10880 Westbrook 225 Sunnyvale
Wilshire Corporate Franklin Business
Boulevard Centerpointe Center Street Center Total
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income - historical $4,078 $2,411 $9,961 $11,512 $1,610 $29,572
Pro forma straight - line rent adjustment 660 99 464 (34) 1,189
----------------------------------------------------------------------------
Pro forma rental income 4,738 2,510 10,425 11,478 1,610 30,761
Management fees
Recoveries from tenants 37 191 475 2,260 102 3,066
Mortgage interest income
Other income 81 33 2 154 7 276
----------------------------------------------------------------------------
Total revenue 4,856 2,734 10,901 13,893 1,719 34,102
----------------------------------------------------------------------------
Expenses:
Property expenses 1,274 575 1,941 2,153 5,943
Real estate taxes 360 164 1,617 1,578 102 3,821
General and administrative 31 60 27 344 87 548
Mortgage interest expense 726 3,339 4,065
Interest - amortization of financing costs
Depreciation and amortization (E) 1,058 545 2,155 3,593 507 7,858
----------------------------------------------------------------------------
Total expenses 2,723 2,070 9,079 7,667 696 22,236
----------------------------------------------------------------------------
Income from operations $2,133 $663 $1,822 $6,225 $1,023 $11,867
============================================================================
</TABLE>
(B) The results of operations for Westlakes Office Park for the period
January 1, 1997 to May 7, 1997.
(C) Results of operations of Civic Opera Building, 200 West Adams, Lakeside and
101 North Wacker for the nine months ended September 30, 1997.
<TABLE>
<CAPTION>
Civic 200 101
Opera West North
Building Adams Lakeside Wacker Total
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $7,406 $8,315 $3,522 $5,333 $24,575
Pro forma straight-line rent adjustment 89 (51) 29 415 481
---------------------------------------------------------
Pro forma rental income 7,494 8,264 3,551 5,747 25,055
Management fees
Recoveries from tenants 857 1,746 218 3,311 6,131
Mortgage interest income
Other income 219 57 32 510 818
---------------------------------------------------------
Total revenue 8,570 10,067 3,800 9,568 32,003
---------------------------------------------------------
Expenses:
Property expenses 3,309 1,733 1,440 1,887 8,369
Real estate taxes 1,575 2,957 278 3,330 8,139
General and administrative 671 222 378 261 1,532
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (E) 1,341 1,624 855 1,327 5,147
---------------------------------------------------------
Total expenses 6,896 6,535 2,951 6,805 23,186
---------------------------------------------------------
Income from operations $1,674 $3,532 $849 $2,763 $8,817
=========================================================
</TABLE>
17
<PAGE>
BEACON PROPERTIES, L.P.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
(Unaudited)
(D) Detail of depreciation expense by property is presented as follows:
<TABLE>
<CAPTION>
Basis Life Depreciation
----- ---- ------------
<S> <C> <C> <C>
1997 acquisitions as of September 30, 1997
------------------------------------------
10880 Wilshire Boulevard $102,000 30 yrs $1,058
Centerpointe 49,500 30 yrs 545
Westbrook Corporate Center 163,890 30 yrs 2,155
225 Franklin Street 252,000 30 yrs 3,593
Sunnyvale Business Center 30,420 30 yrs 507
-------------
$7,858
=============
<CAPTION>
<S> <C> <C> <C>
Properties acquired or to be acquired
-------------------------------------
after September 30, 1997:
------------------------
Civic Opera Building $53,649 30 yrs $1,341
200 West Adams 64,958 30 yrs 1,624
Lakeside 34,200 30 yrs 855
101 North Wacker 53,069 30 yrs 1,327
-------------
$5,147
=============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
(E) Interest income on Riverside notes receivable:
Interest income - note receivable from Riverside Project LLC ($26,000*9%) $1,755
Interest income - note receivable from Beacon Design Corp. ($3,250*7%) 171
Interest income - note receivable from Beacon Property Management Corp.
($3,250*7) 171
-------------
Total $2,096
Less: Historical 1997 Interest Income (263)
-------------
$1,833
=============
</TABLE>
<TABLE>
<CAPTION>
(F) Credit facility interest expense:
<S> <C> <C>
Credit Facility balance per pro forma balance sheet $407,017
Less Credit Facility balances relating to development projects
in which the associated interest expense would be capitalized:
Development projects owned or underdevelopment as of September 30, 1997:
Crosby Phase II (6,350)
175 Wyman Street (24,840)
150 California (10,640)
Media Center (19,030)
------------
Adjusted pro forma Credit Facility balance 346,157
Average Credit Facility rate through September 30, 1997 7.21%
------------
Pro Forma Credit Facility interest expense full year 24,958
75%
------------
Pro Forma Credit Facility interest expense 3/4 year 18,718
Less historical 1997 Credit Facility interest expense (8,153)
------------
Pro Forma Credit Facility adjustment 10,565
------------
Mortgage Interest:
Pro forma mortgage interest on Civic Opera Building 3/4 year based on
principal balance of $31,773 with interest at 7.37% 1,756
------------
Grand total $12,322
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(G) Adjustment to equity in net income of corporations as a result of Riverside notes:
Beacon Design Corp. note payable ($3,250*7%) ($171)
Beacon Property Management Corp. note payable ($3,250*7%) (171)
-------
Total interest expense adjustment (341)
Operating Partnership ownership % of entities 98.99%
-------
Adjustment to equity in net income of corporations ($338)
=======
</TABLE>
(H) Series A preferred units based on 8,000,000 units with a $25.00 per
unit redemption price at 8.98%.
18
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