<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2000 or
___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _____to_____
Commission file number 0-23065
BRADLEY OPERATING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 04-3306041
(State of Organization) (I.R.S. Identification No.)
40 Skokie Blvd., Northbrook, Illinois 60062
(Address of Registrant's Principal Executive Offices)
Registrant's telephone number, including area code; (847) 272-9800
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
---
1
<PAGE>
BRADLEY OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except unit data)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------------------
<S> <C> <C>
ASSETS:
Real estate investments -- at cost $1,046,042 $1,014,158
Accumulated depreciation and amortization (91,767) (81,302)
------------------------------
Net real estate investments 954,275 932,856
Real estate investments held for sale - 29,890
Other assets:
Cash and cash equivalents - 4,434
Rents and other receivables, net of allowance for doubtful accounts
of $4,156 for 2000 and $4,545 for 1999 14,233 12,273
Deferred charges, net and other assets 18,063 16,714
------------------------------
Total assets $ 986,571 $ 996,167
==============================
LIABILITIES AND PARTNERS' CAPITAL:
Mortgage loans $ 93,436 $ 100,718
Unsecured notes payable 274,616 199,604
Line of credit 86,000 144,500
Accounts payable, accrued expenses and other liabilities 33,462 33,476
------------------------------
Total liabilities 487,514 478,298
------------------------------
Minority interest 359 381
------------------------------
Partners' capital:
General partner, common; issued and outstanding 22,136,119 and 23,079,357
units at June 30, 2000 and December 31, 1999, respectively 320,352 337,994
General partner, Series A preferred (liquidation preference $25.00 per unit);
issued and outstanding 3,478,219 units at June 30, 2000 and December 31, 1999 86,802 86,802
Limited partners, common; issued and outstanding 1,250,682 and 1,314,347
units at June 30, 2000 and December 31, 1999, respectively 18,100 19,248
Limited partners, Series B preferred (liquidation preference $25.00 per unit);
issued and outstanding 2,000,000 units at June 30, 2000 and December 31, 1999 49,100 49,100
Limited partners, Series C preferred (liquidation preference $25.00 per unit);
issued and outstanding 1,000,000 units at June 30, 2000 and December 31, 1999 24,344 24,344
------------------------------
Total partners' capital 498,698 517,488
------------------------------
Total liabilities and partners' capital $ 986,571 $ 996,167
==============================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
BRADLEY OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per unit data)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------ -----------------------
<S> <C> <C> <C> <C>
2000 1999 2000 1999
------------ ---------- ----------- ----------
REVENUE:
Rental income and recoveries from tenants $39,370 $36,872 $80,148 $75,582
Other income 489 686 1,542 1,329
------------ ---------- ----------- ----------
39,859 37,558 81,690 76,911
------------ ---------- ----------- ----------
EXPENSES:
Operations, maintenance and management 4,741 5,405 10,834 12,083
Real estate taxes 5,831 5,556 11,902 11,671
Mortgage and other interest 8,254 7,182 16,489 14,869
General and administrative 1,628 1,686 3,318 3,664
Provision for merger related expenses 1,606 - 1,806 -
Depreciation and amortization 7,021 6,484 13,885 12,941
------------ ---------- ----------- ----------
29,081 26,313 58,234 55,228
------------ ---------- ----------- ----------
Income before equity in earnings of partnership and net gain on sale of
properties 10,778 11,245 23,456 21,683
Equity in earnings of partnership - 153 - 500
Net gain on sale of properties - - 205 -
------------ ---------- ----------- ----------
Income before allocation to minority interest 10,778 11,398 23,661 22,183
Income allocated to minority interest (17) (27) (39) (48)
------------ ---------- ----------- ----------
Net income 10,761 11,371 23,622 22,135
Preferred unit distributions (3,490) (2,935) (6,980) (5,217)
------------ ---------- ----------- ----------
Net income attributable to common unit holders $ 7,271 $ 8,436 $16,642 $16,918
============ ========== =========== ==========
Earnings per common unit:
Basic $ 0.31 $ 0.33 $ 0.70 $ 0.66
============ ========== =========== ==========
Diluted $ 0.31 $ 0.33 $ 0.70 $ 0.66
============ ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
BRADLEY OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
General Limited Limited
General Partner, Limited Partners, Partners,
Partner, Series A Partners, Series B Series C
common preferred common preferred preferred Total
------------ ----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $337,994 $86,802 $19,248 $49,100 $24,344 $517,488
Net income 15,752 3,652 890 2,218 1,110 23,622
Distributions on common units (17,251) - (951) - - (18,202)
Distributions on preferred units - (3,652) - (2,218) (1,110) (6,980)
Capital contributions (1) - - - - (1)
Redemption of LP Units - - (1,077) - - (1,077)
Repurchase of GP common units (16,152) - - - - (16,152)
GP common units issued upon
redemption of LP Units 17 - (17) - - -
Reallocation of partners' capital (7) - 7 - - -
------------ ----------- ------------ ------------- ------------ -----------
Balance at June 30, 2000 $320,352 $86,802 $18,100 $49,100 $24,344 $498,698
============ =========== ============ ============= ============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
BRADLEY OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 23,622 $ 22,135
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 13,885 12,941
Equity in earnings of partnership - (500)
Amortization of debt premiums, net of discounts (422) (479)
Net gain on sale of properties (205) -
Income allocated to minority interest 39 48
Change in operating assets and liabilities:
Increase in rents and other receivables (2,069) (1,969)
Increase (decrease) in accounts payable,
accrued expenses and other liabilities 1,171 (181)
Increase in deferred charges (2,067) (1,064)
--------- --------
Net cash provided by operating activities 33,954 30,931
--------- --------
Cash flows from investing activities:
Expenditures for real estate acquisitions (18,895) (21,636)
Expenditures for developments and redevelopments (10,709) (2,249)
Expenditures for other capital improvements (6,601) (4,685)
Net proceeds from sale of properties 30,622 16,899
Cash distributions from partnership - 3,943
--------- --------
Net cash used in investing activities (5,583) (7,728)
--------- --------
Cash flows from financing activities:
Borrowings from line of credit 67,500 46,900
Payments under line of credit (126,000) (95,500)
Proceeds from issuance of unsecured notes payable 74,981 -
Expenditures for financing costs (1,022) (59)
Repayment of mortgage loans (5,994) -
Principal payments on mortgage loans (835) (823)
Distributions paid to common unit holders (18,202) (19,249)
Distributions paid to preferred unit holders (6,980) (5,217)
Capital contributions (1) 1,605
Net proceeds from issuance of Series B preferred units - 49,100
Repurchase of GP common units (16,152) -
Payments to redeem limited partnership units (1,077) (1,114)
Cash disbursed but not presented to bank 977 -
--------- --------
Net cash used in financing activities (32,805) (24,357)
--------- --------
Net decrease in cash and cash equivalents (4,434) (1,154)
Cash and cash equivalents:
Beginning of period 4,434 1,262
--------- --------
End of period $ - $ 108
========= ========
Supplemental cash flow information:
Interest paid, net of amount capitalized $ 14,777 $ 15,499
========= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
BRADLEY OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2000
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
Bradley Operating Limited Partnership (the "Operating Partnership") is the
entity through which Bradley Real Estate, Inc. (the "Company" or "Bradley"), the
General Partner and owner of an approximate 84% economic interest in the
Operating Partnership, conducts substantially all of its business and owns
(either directly or through subsidiaries) substantially all of its assets.
The accompanying interim financial statements have been prepared by the
Operating Partnership, without audit, and in the opinion of management reflect
all normal recurring adjustments necessary for a fair presentation of results
for the unaudited interim periods presented. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and the notes thereto for the fiscal year ended
December 31, 1999.
Interests in the Operating Partnership are evidenced by five classes of unit
holders, general partner "common" units owned by the Company as "GP Units," 8.4%
Series A Convertible Preferred units of limited partnership interest owned by
the general partner as "Series A Preferred Units," limited partner "common"
units evidenced by "LP Units," 8.875% Series B Cumulative Redeemable Perpetual
Preferred Units of limited partnership interest evidenced by "Series B Preferred
Units," and 8.875% Series C Cumulative Redeemable Perpetual Preferred Units of
limited partnership interest evidenced by "Series C Preferred Units." The
Partnership Agreement governing the Operating Partnership contemplates that the
number of outstanding GP Units will always equal the number of outstanding
shares of common stock of the Company outstanding and that the Company will
contribute to the Operating Partnership the proceeds from all issuances of
common stock and preferred stock by the Company in exchange for additional
units. The Partnership Agreement also contemplates that the number of Series A
Preferred Units will always equal the number of outstanding shares of Series A
Preferred Stock of the Company. In addition, the holders of LP Units have the
right, under certain circumstances, to exchange their units for shares of common
stock of the Company on a one-for-one basis. Holders of GP Units and LP Units
are referred to as "common unit holders." Holders of Series A Preferred Units,
Series B Preferred Units, and Series C Preferred Units are referred to as
"preferred unit holders."
NOTE 2 - MERGER AGREEMENT
On May 15, 2000, the Company entered into an agreement and plan of merger with
Heritage Property Investment Trust, Inc., a privately-owned real estate
investment trust headquartered in Boston, Massachusetts, pursuant to which
Bradley will be merged with and into a wholly-owned subsidiary of Heritage.
Following the merger, the Operating Partnership will continue to exist and
operate the existing portfolio of properties. However, Heritage's subsidiary
will succeed the Company as the Operating Partnership's sole general partner and
Heritage will become responsible for the management of the portfolio and the
Operating Partnership. Under terms of the merger agreement, each outstanding
share of Bradley's common stock will be converted into the right to receive
$22.00 per share cash, and each outstanding share of Bradley's 8.4% Series A
Convertible Preferred Stock will be converted into the right to receive
approximately $22.458 per share in cash in accordance with their terms, based on
the conversion ratio into common stock of approximately 1.0208. Under terms of
the merger agreement, the Operating Partnership's $275 million in outstanding
Unsecured Notes, the Series B Preferred Units, and the Series C Preferred Units
will remain outstanding.
As part of the merger, the Company will adopt certain amendments to the Second
Restated Agreement of Limited Partnership. In connection with the merger, LP
Unit holders will be offered the opportunity to either sell their units to
Heritage for $22.00 per unit or to choose to remain an LP Unit holder. Heritage
will not complete the offer unless the merger is also completed. As a result,
the conditions to closing the merger are effectively the conditions to closing
the offer. If the merger does not close for any reason, Heritage will not make
any cash payments to the holders of LP Units tendered, and the limited
partnership agreement will not be amended. The Series A Preferred Units will
convert into GP Units at the effective time of the merger in accordance with
their terms.
The Company retained Deutsche Bank as its financial advisor in connection with
the merger pursuant to a letter agreement dated May 1, 2000. As compensation for
Deutsche Bank's services in connection with the merger, the Company has paid
Deutsche Bank a cash fee of $350,000, which has been reflected in the
accompanying financial statements. The Company has agreed to pay an additional
cash fee of $2,150,000 if the merger is consummated.
6
<PAGE>
Prudential Real Estate Investors ("PREI") and Prudential Mortgage Capital
Company ("PMCC") have provided equity and debt financing commitments to Heritage
for the transaction. PMCC is the commercial mortgage arm of The Prudential
Insurance Company of America, while PREI acts as Prudential's global real estate
money management and advisory firm.
The merger agreement has been unanimously approved by the boards of directors of
both Bradley and Heritage. The merger is subject to customary closing
conditions, including approval by the stockholders of Bradley. It is anticipated
that the transaction will close in the third quarter of 2000.
Heritage will use the purchase method of accounting for the merger. Under the
purchase method of accounting, the purchase price is allocated to the assets
purchased and the liabilities assumed based upon the fair values at the date of
acquisition.
NOTE 3 - EARNINGS PER COMMON UNIT
Basic earnings per common unit ("EPU") is computed by dividing net income
attributable to common unit holders by the weighted average number of common
units outstanding for the period. Diluted EPU is computed by reflecting the
potential dilution that could occur if securities or other contracts to issue
common units were exercised or converted into common units or resulted in the
issuance of common units that then shared in the earnings of the Operating
Partnership. A reconciliation between basic and diluted weighted average common
units outstanding for each period, is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
-------------------------- -------------------------
2000 1999 2000 1999
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Basic
Weighted average common units 23,387,774 25,444,494 23,637,815 25,441,252
============ =========== =========== ===========
Diluted
Weighted average common units 23,387,774 25,444,494 23,637,815 25,441,252
Effect of dilutive securities:
Stock options 100,706 40,101 51,628 34,823
------------ ----------- ----------- -----------
Weighted average common units and assumed conversions 23,488,480 25,484,595 23,689,443 25,476,075
============ ============ ============ ============
</TABLE>
For the six months ended June 30, 2000 and 1999, options to purchase 646,050
shares of the Company's common stock at prices ranging from $19.35 to $21.35 and
609,250 shares of the Company's common stock at prices ranging from $19.90 to
$21.35 were outstanding during each of the respective periods but were not
included in the computation of diluted EPU because the options' exercise prices
were greater than the average market prices of the Company's common shares
during those periods, thereby having an anti-dilutive impact on basic EPU.
Series A Preferred unit distributions of $3,652,000 during each of the six month
periods ended June 30, 2000 and 1999, and the effect on the denominator of the
conversion of the convertible preferred units outstanding during the period into
3,550,652 common units for the period ended June 30, 2000, and 3,550,912 common
units for the period ended June 30, 1999, were not included in the computation
of diluted EPU because the impact on basic EPU was anti-dilutive.
For the quarters ended June 30, 2000 and 1999, options to purchase 583,750
shares of the Company's common stock at prices ranging from $19.90 to $21.35 and
158,750 shares of the Company's common stock at prices ranging from $20.25 to
$21.35 were outstanding during each of the respective periods but were not
included in the computation of diluted EPU because the options' exercise prices
were greater than the average market prices of the Company's common shares
during those periods, thereby having an anti-dilutive impact on basic EPU.
Series A Preferred unit distributions of $1,826,000 during each of the quarters
ended June 30, 2000 and 1999, and the effect on the denominator of the
conversion of the convertible preferred units outstanding during the period into
3,550,652 common units for the quarter ended June 30, 2000, and 3,550,910 common
units for the quarter ended June 30, 1999, were not included in the computation
of diluted EPU because the impact on basic EPU was anti-dilutive.
NOTE 4 - SUPPLEMENTAL CASH FLOW DISCLOSURE
During the first six months of 2000, 1,229 shares of the Company's common stock
were issued in exchange for an equivalent number of LP Units.
7
<PAGE>
NOTE 5 - STOCK REPURCHASE PROGRAM
In November 1999, the Company's Board of Directors authorized the repurchase of
up to two million shares of outstanding common stock from time to time through
periodic open market transactions or through privately negotiated transactions.
The share repurchase program was in effect until December 31, 2000, or until the
authorized limit had been reached. The Operating Partnership effectively
repurchases one common GP Unit from the Company for each common share
repurchased by the Company. Through June 30, 2000, the Operating Partnership
repurchased 1,925,500 common GP Units at an average price of $16.97 per unit,
representing the equivalent number and price of common shares purchased by the
Company. The share repurchase program was suspended in connection with entering
into the merger agreement.
NOTE 6 - SEGMENT REPORTING
As of June 30, 2000, the Operating Partnership owned 96 shopping centers located
primarily in the Midwest region of the United States. Such shopping centers are
typically anchored by grocery and drug stores complemented with stores providing
a wide range of other goods and services to shoppers. The Operating Partnership
assesses and measures operating results on an individual property basis for each
of its 96 shopping centers without differentiation, based on net operating
income, and then converts such amounts in the aggregate to a performance measure
referred to as Funds from Operations ("FFO"). Since all of the Operating
Partnership's shopping centers exhibit similar economic characteristics, cater
to the day-to-day living needs of their respective surrounding communities, and
offer similar degrees of risk and opportunities for growth, the shopping centers
have been aggregated and reported as one operating segment.
The revenue and net operating income for the reportable segment and for the
Operating Partnership, the computation of FFO for the Operating Partnership, and
a reconciliation to net income attributable to common unit holders, are as
follows for the three and six month periods ended June 30, 2000 and 1999
(dollars in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------------- ----------------------
2000 1999 2000 1999
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Total property revenue $ 39,781 $ 37,345 $ 81,519 $ 76,410
Total property expenses (10,572) (10,961) (22,736) (23,754)
-------- -------- -------- --------
Net operating income 29,209 26,384 58,783 52,656
-------- -------- -------- --------
NON-PROPERTY (INCOME) EXPENSES:
Other non-property income (78) (213) (171) (501)
Equity in earnings of partnership, excluding
depreciation and amortization - (210) - (600)
Mortgage and other interest 8,254 7,182 16,489 14,869
General and administrative 1,628 1,686 3,318 3,664
Provision for merger related expenses 1,606 - 1,806 -
Amortization of deferred finance and non-real
estate related costs 319 280 602 559
Preferred unit distributions 3,490 2,935 6,980 5,217
Income allocated to minority interest 17 27 39 48
-------- -------- -------- --------
15,236 11,687 29,063 23,256
-------- -------- -------- --------
Funds from Operations $ 13,973 $ 14,697 $ 29,720 $ 29,400
======== ======== ======== ========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
-------------------- ----------------------
2000 1999 2000 1999
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
RECONCILIATION TO NET INCOME
ATTRIBUTABLE TO COMMON UNIT HOLDERS:
Funds from Operations $13,973 $14,697 $ 29,720 $ 29,400
Depreciation of real estate assets and amortization
of tenant improvements (6,244) (5,553) (12,372) (11,002)
Amortization of deferred leasing commissions (458) (353) (911) (784)
Other amortization - (298) - (596)
Depreciation and amortization included in equity in
earnings of partnership - (57) - (100)
Net gain on sale of properties - - 205 -
------- ------- -------- --------
Net income attributable to common unit holders $ 7,271 $ 8,436 $ 16,642 $ 16,918
======= ======= ======== ========
</TABLE>
NOTE 7 - ACQUISITION AND DISPOSITION ACTIVITY
During the first quarter of 2000, the Operating Partnership completed the
acquisitions of two shopping centers, Hub Shopping Center located in
Independence, Missouri and West Loop Shopping Center, located in Manhattan,
Kansas, aggregating approximately 360,000 square feet for a total purchase price
of approximately $19,103,000. The Operating Partnership acquired these shopping
centers with cash provided by the line of credit.
On March 31, 2000, the Operating Partnership completed the sales of three
enclosed malls that were held for sale as of December 31, 1999, for a net sales
price of approximately $30,622,000. The three centers, Delta Plaza located in
Escanaba, Michigan, Lakewood Mall, located in Aberdeen, South Dakota and
Thunderbird Mall located in Virginia, Minnesota, were all enclosed malls located
in smaller markets which were non-core to the Operating Partnership's grocery-
anchor community shopping center focus. The sale resulted in a gain of $205,000
for financial reporting purposes. Net proceeds from the sale were used to reduce
the outstanding balance under the line of credit.
NOTE 8 - ISSUANCE OF UNSECURED NOTES
On March 10, 2000, the Operating Partnership issued $75 million of unsecured
Notes due March 15, 2006 at an interest rate of 8.875%. The securities are rated
"Baa3" by Moody's Investors Service and "BBB-" by Standard & Poor's Investment
Services. Net proceeds from the offering of approximately $74.5 million were
used to reduce the outstanding balance under the line of credit.
9
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income attributable to common unit holders decreased $276,000 from
$16,918,000 in the first half of 1999 to $16,642,000 in the first half of 2000.
Net income attributable to common unit holders decreased $1,165,000 from
$8,436,000 in the second quarter of 1999 to $7,271,000 in the second quarter of
2000. Basic and diluted earnings per common unit increased $0.04 per common unit
from $0.66 per common unit in the first half of 1999 to $0.70 per common unit in
the first half of 2000. Earnings per common unit reflect weighted average common
units outstanding of 23,637,815 during the first half of 2000, compared with
25,441,252 during the first half of 1999. Basic and diluted earnings per common
unit decreased $0.02 per common unit from $0.33 per common unit in the second
quarter of 1999 to $0.31 per common unit in the second quarter of 2000. Earnings
per common unit reflect weighted average common units outstanding of 23,387,774
during the second quarter of 2000, compared with 25,444,494 during the second
quarter of 1999. The reduction in weighted average common units outstanding
during 2000 compared with 1999 is attributable to the repurchase of 1,925,500
common units under our repurchase program authorized by the Company's Board of
Directors in November 1999.
The results for both the six and three-month periods were negatively impacted by
a provision for merger related expenses of $1,806,000 and $1,606,000,
respectively, in connection with a definitive merger agreement entered into on
May 15, 2000 pursuant to which we will merge into a wholly-owned subsidiary of
Heritage Property Investment Trust, Inc., a private real estate investment trust
headquartered in Boston, Massachusetts. Excluding the provision for merger
related expenses, for the first half of 2000 basic and diluted earnings per
common unit were $0.78 per common unit, an increase of $0.12 per common unit, or
18.2% from the first half of 1999. Excluding the provision for merger related
expenses, basic and diluted earnings per common unit were $0.38 per common unit
in the second quarter of 2000, an increase of $0.05 per common unit, or 15.2%
from the second quarter of 1999.
During the first quarter of 2000, we completed the acquisitions of two shopping
centers for an aggregate purchase price of approximately $19.1 million. On March
31, 2000, we sold three enclosed malls for an aggregate gross sales price of
approximately $31 million, resulting in a gain on sale of $205,000 for financial
reporting purposes. During the second quarter of 1999, we completed the
acquisitions of two shopping centers for an aggregate purchase price of $13.9
million, and sold three properties for an aggregate gross sales price of $17.3
million. During the second quarter of 1999, we also acquired the 50% non-owned
portion of the two shopping centers held by the joint venture acquired in
connection with the merger acquisition of Mid-America. As a result, these two
shopping centers are consolidated for financial reporting purposes. During the
fourth quarter of 1999, we also acquired two additional shopping centers for an
aggregate purchase price of $23.0 million. Differences in results of operations
for the six and three-month periods ended June 30, 2000 compared with the same
periods in 1999 were driven largely by the acquisition and disposition activity.
Property net operating income increased $6,127,000, or 11.6% from $52,656,000
for the six months ended June 30, 1999 to $58,783,000 for the six months ended
June 30, 2000. Property net operating income increased $2,825,000, or 10.7%,
from $26,384,000 during the second quarter of 1999 to $29,209,000 during the
second quarter of 2000. Our results of operations for properties consolidated
for financial reporting purposes for the first half and second quarter of 1999
and 2000 reflect 88 properties that were held for both the six and three-month
periods and 14 properties that we purchased or sold between the two periods. As
of June 30, 2000, we owned 96 shopping centers.
Property Specific Revenue and Expenses (in thousands of dollars):
<TABLE>
<CAPTION>
Six months ended
June 30, Properties
--------------------- Acquisitions/ Held Both
2000 1999 Difference Dispositions Periods
------- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Rental income and recoveries from tenants $80,148 $75,582 $ 4,566 $1,652 $ 2,914
Other property operating income 1,371 828 543 6 537
Operations, maintenance and management 10,834 12,083 (1,249) (56) (1,193)
Real estate taxes 11,902 11,671 231 123 108
Depreciation and amortization 13,885 12,941 944 682 262
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Three months ended
June 30, Properties
-------------------- Acquisitions/ Held Both
2000 1999 Difference Dispositions Periods
------- ------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Rental income and recoveries from tenants $39,370 $36,872 $2,498 $ 302 $2,196
Other property operating income 411 473 (62) 3 (65)
Operations, maintenance and management 4,741 5,405 (664) (211) (453)
Real estate taxes 5,831 5,556 275 (15) 290
Depreciation and amortization 7,021 6,484 537 356 181
</TABLE>
Results attributable to acquisition and disposition activities:
Rental income and recoveries from tenants increased from $75,582,000 in the
first half of 1999 to $80,148,000 in the first half of 2000 and from $36,872,000
in the second quarter of 1999 to $39,370,000 in the second quarter of 2000.
Approximately $4,146,000 of the increase during the six-month period was
attributable to acquisition activities, partially offset by $2,494,000
attributable to disposition activities. Approximately $2,053,000 of the increase
during the three-month period ended June 30, 2000 was attributable to
acquisition activities, partially offset by $1,751,000 attributable to
disposition activities.
Other property operating income increased from $828,000 in the first half of
2000 to $1,371,000 in the first half of 2000, but decreased from $473,000 during
the second quarter of 1999 to $411,000 during the second quarter of 2000.
Substantially all of the changes for both the six and three-month periods were
attributable to properties held both periods.
Operations, maintenance and management expense decreased from $12,083,000 in the
first half of 1999 to $10,834,000 in the first half of 2000 and from $5,405,000
in the second quarter of 1999 to $4,741,000 in the second quarter of 2000.
Approximately $1,193,000 of the decrease during the six-month period resulted
from decreases from properties held both periods, while $56,000 was attributable
to acquisition and disposition activities. For the three-month period ended June
30, 2000, $453,000 resulted from properties held both periods while $211,000 was
attributable to acquisition and disposition activities.
Real estate taxes increased from $11,671,000 in the first half of 1999 to
$11,902,000 in the first half of 2000 and from $5,556,000 in the second quarter
of 1999 to $5,831,000 in the second quarter of 2000. Real estate taxes increased
$108,000 for properties held during both six-month periods ended June 30, 2000
and 1999. Real estate taxes increased $123,000 for properties acquired, net of
real estate taxes eliminated for properties sold, during 1999 and 2000. For the
three-month period, real estate taxes increased $290,000 for properties held
both quarters, and decreased $15,000 for properties acquired, net of real estate
taxes eliminated for properties sold between the two quarters.
Depreciation and amortization increased from $12,941,000 in the first half of
1999 to $13,885,000 in the first half of 2000 and from $6,484,000 in the second
quarter of 1999 to $7,021,000 in the second quarter of 2000. Approximately
$682,000 of the increase during the six-month period was attributable to
acquisition and disposition activities. For the three-month period, $356,000 of
the increase was attributable to acquisition and disposition activities.
Results for properties fully operating throughout both periods:
Rental income and recoveries from tenants increased $2,914,000 for properties
held throughout both six-month periods and $2,196,000 for properties held
throughout both second quarters of 1999 and 2000. Rental income increased
$728,000 at Har Mar Mall during the first half of 2000 compared with the first
half of 1999, and $814,000 during the second quarter of 2000 compared with the
second quarter of 1999, due to the receipt of $734,000 in proceeds from a
bankruptcy settlement for the termination of a former lease with HomePlace,
which vacated in 1998. Rental income increased $668,000 at Heritage Square
during the first half of 2000 compared with the first half of 1999 due to the
commencement of a 62,000 square-foot lease with Carson Pirie Scott in the third
quarter of 1999, a lease termination receipt from Strouds in the first quarter
of 2000, and the replacement of Strouds with a 27,000 square-foot lease with DSW
Designer Shoe Warehouse during the second quarter of 2000 at a slightly higher
rent, and the commencement of a 47,000 square-foot lease with HomeLife in the
second quarter of 2000. The leases with Carson Pirie Scott and HomeLife also
contributed to an increase of $235,000 in rental income at this property during
the second quarter of 2000 compared with the second quarter of 1999. Rental
income increased approximately $240,000 at Prospect Plaza during the six and
three-month periods ended June 30, 2000 compared with the same periods in 1999,
due to the commencement of several new leases, primarily a new 62,000 square-
foot Hen House grocery store, resulting from the substantial completion of this
redevelopment project during the first quarter of 2000.
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An increase in rental income at Germantown Shopping Center during the six and
three-month periods ended June 30, 2000 compared with the same periods in 1999
resulting from the receipt of a lease termination fee from a 110,000 square-foot
Wal-Mart store in the second quarter of 2000 was largely offset by a reduction
in rental income at Speedway SuperCenter during the same periods due to the
receipt of a lease termination fee from PetsMart in the second quarter of 1999.
Two new leases for a 55,000 square-foot Elder-Beerman store and a 40,000 square-
foot Quality Farm and Fleet store have been signed to replace the Wal-Mart
vacancy at Germantown Shopping Center. The lease with Elder-Beerman is expected
to commence in the third quarter of 2000, while the lease with Quality Farm and
Fleet is expected to commence in the fourth quarter of 2000.
During September 1999, we were notified that Hechinger Co., the operator of an
85,000 square-foot Home Quarters store at Grandview Plaza, would liquidate its
assets in order to pay off creditors. As a result of the liquidation, the store
closed and ceased paying rent in January 2000, resulting in a $445,000 decrease
in rental income at this property for the first half of 2000 compared with the
first half of 1999, and $180,000 for the second quarter of 2000 compared with
the second quarter of 1999. Although we are in preliminary discussions with
several retailers to replace this lease, a reduction in rental revenue is
expected to continue at this property, since we do not expect a new lease to
commence prior to the end of 2000.
The increase in other property income during the first half of 2000 compared
with the same period in 1999 was due to the receipt in the first quarter of
2000, of $487,000 as a settlement over a dispute with a former tenant and
guarantor of a portion of a 54,000 square-foot space previously leased to
HomePlace at Har Mar Mall. HomePlace declared bankruptcy in January 1998 and
vacated the center in August 1998. A lease with a new grocery tenant at Har Mar
Mall to replace the vacant HomePlace space is currently under negotiation,
although there can be no assurance that this lease will be completed.
A decrease in operations, maintenance, and management expense in the first half
of 2000 from the first half of 1999 resulted from winter storms in the Midwest
occurring during the first quarter of 1999. Snow removal expenses were
approximately $518,000 lower in the first half of 2000 compared with the first
half of 1999. Operations, maintenance and management expense also decreased
during both the six and three-month periods of 2000 compared with the same
periods in 1999 due to a reduction in bad debt expense, due to the bankruptcies
of Discovery Zone, previously located at four of our centers, and Home Quarters,
located at Grandview Plaza, during the second quarter of 1999.
Non-Property Specific Revenue and Expenses:
Other non-property income decreased from $501,000 during the first half of 1999
to $171,000 during the first half of 2000 and from $213,000 during the second
quarter of 1999 to $78,000 during the second quarter of 2000. The reduction in
other non-property income for both the six and three-month periods primarily
resulted from maintaining lower cash balances generating less interest income,
along with a reduction in third party management and leasing fees generated in
1999.
Mortgage and other interest expense increased from $14,869,000 during the first
half of 1999 to $16,489,000 during the first half of 2000 and from $7,182,000
for the second quarter of 1999 to $8,254,000 for the second quarter of 2000. On
March 10, 2000, we issued $75 million, 8.875% six-year unsecured Notes maturing
March 15, 2006. Proceeds from the offering were used to reduce outstanding
borrowings under the line of credit. Interest incurred on these unsecured Notes
amounted to $2,072,000 during the first half of 2000, and $1,665,000 during the
second quarter of 2000. A lower weighted average balance outstanding on the line
of credit during the first half of 2000 compared with the first half of 1999,
and during the second quarter of 2000 compared with the second quarter of 1999,
resulted in a decrease in interest expense on the line of credit of $288,000
from the first half of 1999, and a decrease of $457,000 from the second quarter
of 1999. The positive impact on interest expense as a result of the decrease in
the weighted average balance outstanding on the line of credit was partially
offset by higher interest rates in 2000 compared with 1999. The decrease in
interest expense on the line of credit is also net of an increase in the amount
of interest capitalized during the six and three-month periods of 2000 compared
with the same periods of 1999, which results from our increased focus on
development and redevelopment initiatives which have been funded with the line
of credit. The reduction in the weighted average balances outstanding on the
line of credit for the six and three-month periods of 2000 compared with the
same periods in 1999 primarily resulted from the pay-down of the line of credit
with proceeds of approximately $75 million from the unsecured Notes offering on
March 10, 2000, as well as from the pay-down with approximately $31 million in
proceeds generated from the sale of three enclosed malls on March 31, 2000.
Interest expense on mortgage notes decreased $164,000 during the first half of
2000 compared with the first half of 1999, and by $136,000 during the second
quarter of 2000 compared with the second quarter of 1999, primarily due to the
repayment of the mortgage note secured by Watts Mill Plaza upon its maturity in
the first quarter of 2000. Our total weighted average interest rate increased to
7.67% for the second quarter of 2000 from 7.05% for the second quarter of 1999.
General and administrative expense decreased from $3,664,000 during the first
half of 1999 to $3,318,000 during the first half of 2000, and from $1,686,000
during the second quarter of 1999 to $1,628,000 during the second quarter of
2000. These reductions primarily
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resulted from expense control savings in numerous categories, including office
supplies and services, travel and entertainment, and franchise taxes and related
fees.
During February 1999, we took advantage of an opportunity to replace $50 million
of short-term floating rate debt under the line of credit with the issuance of
8.875% Series B Cumulative Redeemable Perpetual Preferred Units (the "Series B
Preferred Units"). We took advantage of a similar opportunity during September
1999, replacing $25 million of short-term floating rate debt under the line of
credit with the issuance of 8.875% Series C Cumulative Redeemable Perpetual
Preferred Units (the "Series C Preferred Units"). Although the spreads between
the interest rate then and currently available under the line of credit facility
and the rates associated with the Series B and C Preferred Units are dilutive in
the short-term, the infusion of such permanent capital reduced the amount of
outstanding indebtedness and increased the capacity under the line of credit,
providing us with additional flexibility to take advantage of the favorable
acquisition, development, and redevelopment opportunities we continue to
identify from both prospective acquisitions in our target markets and from
shopping centers in our core portfolio. Distributions on the Series B and C
Preferred Units were $1,565,000 during the first half of 1999 and $3,328,000,
during the first half of 2000. Distributions on the Series B and C Preferred
Units were $1,109,000 during the second quarter of 1999 and $1,664,000 during
the second quarter of 2000.
LIQUIDITY AND CAPITAL RESOURCES
General
We fund operating expenses and distributions primarily from operating cash flows
although, if needed, we may also use our bank line of credit for these purposes.
We fund acquisitions, developments and other capital expenditures primarily from
the line of credit and, to a lesser extent, operating cash flows, as well as
through the issuance of LP Units to contributors of properties acquired. We may
also acquire properties through capital contributions of proceeds from the
Company's issuance of additional equity securities. Additionally, we may dispose
of non-core properties, reinvesting the proceeds from such dispositions into
properties with better growth potential and that are more consistent with our
strategic focus. In addition, we may acquire partial interests in real estate
assets through participation in joint venture transactions.
We focus our investment activities on community and neighborhood shopping
centers, primarily located in the midwestern United States, anchored by regional
and national grocery store chains. We expect to continue to develop and
redevelop community and neighborhood shopping centers in selected Midwest
markets where we anticipate that value can be created from new developments more
effectively than from acquisitions of existing shopping center properties.
We consider our liquidity and ability to generate cash from operating and from
financing activities to be sufficient to meet our operating expenses,
development costs, debt service and distribution requirements for at least a
year. As of June 30, 2000, our financial liquidity was provided by the unused
balance on our bank line of credit of $164 million. In addition, the Company has
an effective "shelf" registration statement under which it may issue up to
$201.4 million in equity securities, and the Operating Partnership has an
additional "shelf" registration statement under which we may issue up to $325
million in unsecured, non-convertible investment grade debt securities. The
"shelf" registration statements provide the Company and the Operating
Partnership with the flexibility to issue additional equity or debt securities
from time to time when we determine that market conditions and the opportunity
to utilize the proceeds from the issuance of such securities are favorable.
On May 15, 2000, the Company entered into a definitive merger agreement pursuant
to which it will merge into a wholly-owned subsidiary of Heritage Property
Investment Trust, Inc., a privately-owned real estate investment trust
headquartered in Boston, Massachusetts. Under terms of the agreement, each
outstanding share of the Company's common stock will be converted into the right
to receive $22.00 per share cash, and each outstanding share of the Company's
8.4% Series A Convertible Preferred Stock will be converted into the right to
receive approximately $22.458 per share in cash in accordance with their terms,
based on the conversion ratio into common stock of approximately 1.0208. In
connection with the merger, LP Unit holders will be offered the opportunity to
either sell their units to Heritage for $22.00 per unit or to choose to remain
an LP Unit holder. The merger is subject to customary closing conditions,
including approval by the stockholders of Bradley. We currently anticipate,
assuming all other conditions to close are satisfied, that the transaction will
close by the end of the third quarter. Following the merger, the Operating
Partnership will continue to exist and operate the existing portfolio of
properties. In addition, Heritage's subsidiary will succeed the Company as the
Operating Partnership's sole general partner and Heritage will become
responsible for the management of the portfolio and the Operating Partnership.
Mortgage debt outstanding at June 30, 2000 consisted of fixed-rate notes
totaling $93,436,000 with a weighted average interest rate of 7.7% maturing at
various dates through 2016. During the first quarter of 2000, we paid-off the
mortgage note secured by Watts Mill Plaza upon its maturity for $5,994,000 with
cash provided by the line of credit. Short-term liquidity requirements include
debt service payments due within one year. Scheduled principal payments of
mortgage debt totaled $835,000 during the six-month period ended June 30, 2000,
with another $872,000 of scheduled principal payments due for the remainder of
the year. We expect to fund short-term
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liquidity requirements with operating cash flows and the line of credit. Prior
to entering into the definitive merger agreement, we had commenced negotiations
to extend and modify the line of credit, which expires in December 2000. While
we currently expect the merger to close in the third quarter, we expect that we
would continue negotiations and be able to extend and modify the line of credit
on commercially reasonable terms if the merger does not close. However, we
believe the terms would be slightly more expensive than the terms under the
existing line of credit due to competitive market pressures. During the second
quarter of 2000, the weighted average interest rate on the line of credit was
7.4%. We currently expect the line of credit will be replaced with a new line of
credit facility upon closing of the merger. However, at this time we cannot
definitely state what terms will be obtained, including capacity or interest
rates. Additionally, we currently expect that long-term liquidity requirements
would be funded through a combination of privately placed equity investments,
secured indebtedness, and with borrowings under the new bank line of credit or
similarly structured unsecured indebtedness. If the merger does not close, we
would expect to fund long-term liquidity requirements primarily through a
combination of issuing additional investment grade unsecured debt securities and
equity securities and with borrowings under the bank line of credit. We have
historically been able to refinance debt when it has become due on terms which
we believe to be commercially reasonable. However, there can be no assurance
that we would be able to repay or refinance our indebtedness on commercially
reasonable or any other terms, whether or not the merger closes.
Operating Activities
Net cash flows provided by operating activities increased to $33,954,000 during
the first half of 2000, from $30,931,000 during the same period in 1999. This
increase is primarily due to consistent cash flow growth from our existing core
portfolio, as well as cash generated from the acquisitions of six shopping
centers during 1999 and two additional shopping centers in 2000. The increase in
cash flow from these acquisitions was partially offset by the elimination of
cash flow resulting from the sales of six non-core properties during 1999 and
2000.
For the six months ended June 30, 2000, funds from operations ("FFO") increased
$320,000, or 1.1%, from $29,400,000 to $29,720,000. For the three months ended
June 30, 2000, FFO decreased $724,000, or 4.9%, from $14,697,000 to $13,973,000.
FFO for both the six and three-month periods was negatively impacted by a
provision for merger related expenses of $1,806,000 and $1,606,000,
respectively. Excluding the provision for merger related expenses, FFO for the
six and three-month periods increased $2,126,000, or 7.2%, and $882,000, or
6.0%, respectively. We generally consider FFO to be a relevant and meaningful
supplemental measure of performance because it is predicated on a cash flow
analysis, contrasted with net income, a measure predicated on generally accepted
accounting principles ("GAAP") which gives effect to non-cash items such as
depreciation. We compute FFO in accordance with the March 1995 "White Paper" and
November 1999 "National Policy Bulletin" on FFO published by the National
Association of Real Estate Investment Trusts ("NAREIT"), as net income (computed
in accordance with GAAP), excluding gains or losses from debt restructuring and
sales of property, plus depreciation and amortization, and after preferred unit
distributions and adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures are
computed to reflect FFO on the same basis. In computing FFO, we do not add back
to net income the amortization of costs incurred in connection with our
financing activities or depreciation of non-real estate assets. FFO does not
represent cash generated from operating activities in accordance with GAAP and
should not be considered as an alternative to cash flow as a measure of
liquidity. Since the NAREIT White Paper and National Policy Bulletin only
provide guidelines for computing FFO, the computation of FFO may vary from one
REIT or its operating partnership to another. FFO is not necessarily indicative
of cash available to fund cash needs.
Investing Activities
Net cash flows used in investing activities decreased to $5,583,000 during the
first half of 2000, from $7,728,000 during the same period in 1999. During the
first half of 2000, we completed the acquisitions of two shopping centers
located in Missouri and Kansas aggregating approximately 360,000 square feet for
a total purchase price of approximately $19,103,000. We also invested
approximately $10,709,000 in four redevelopment initiatives, and sold three
properties aggregating 683,000 square feet for an aggregate net sales price of
$30,622,000. The net proceeds from the sales were used to reduce outstanding
borrowings under the line of credit, decreasing our overall debt while reducing
our exposure to increases in interest rates on our variable rate debt. During
the first half of 1999, we completed the acquisitions of two shopping centers
located in Michigan and Ohio aggregating 264,000 square feet for an aggregate
purchase price of approximately $13,853,000, invested approximately $2,249,000
in a redevelopment project, and sold three properties aggregating 434,000 square
feet for an aggregate net sales price of $16,899,000. During this period, we
also acquired the 50% non-owned portion of two shopping centers held by our
joint venture acquired in connection with the merger acquisition of Mid-America,
for a purchase price of approximately $7,750,000. The acquisition of the 50%
non-owned portion of the joint venture was completed after the joint venture
sold an enclosed mall to a third party for $12,100,000, including the assumption
of a $3,100,000 note receivable. Cash distributions received from the joint
venture during the first half of 1999 amounted to $3,943,000.
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Financing Activities
Net cash flows used in financing activities increased to $32,805,000 during the
first half of 2000, from $24,357,000 during the same period in 1999.
Distributions to common and preferred unit holders, were $25,182,000 in the
first half of 2000, and $24,466,000 in the first half of 1999.
In November 1999, our Board of Directors authorized the repurchase of up to two
million shares of outstanding common stock from time to time through periodic
open market transactions or through privately negotiated transactions. The
Operating Partnership effectively repurchases one common GP Unit from the
Company for each common share repurchased by the Company. During the first half
of 2000, we paid approximately $16,152,000 to repurchase 944,800 common GP
Units, representing the equivalent amount and number of shares repurchased by
the Company.
The two shopping centers acquired during the first half of 2000 were acquired
with cash provided by our line of credit. On March 10, 2000, we issued $75
million of unsecured Notes due March 15, 2006 at an interest rate of 8.875%. The
securities are rated "Baa3" by Moody's Investors Service and "BBB-" by Standard
& Poor's Investment Services. Net proceeds from the offering of approximately
$74,981,000 were used to reduce the outstanding balance under the line of
credit. Although issuance of the unsecured Notes will be dilutive to earnings in
the short-term, the issuance of such fixed rate debt extended our weighted
average debt maturity, further spreading our scheduled debt maturities, while
reducing our exposure to increases in interest rates on our variable rate debt.
During the first quarter of 1999, we issued two million 8.875% Series B
Cumulative Redeemable Perpetual Preferred Units to two institutional investors
at a price of $25.00 per unit. Net proceeds from the issuance of approximately
$49,100,000 were used to reduce outstanding borrowings under the line of credit.
The two shopping centers acquired during the first half of 1999 were acquired
with cash provided by our line of credit.
FORWARD LOOKING STATEMENTS
Statements made or incorporated in this Form 10-Q include "forward-looking"
statements. Forward-looking statements include, without limitation, statements
containing the words "anticipates," "believes," "expects," "intends," "future,"
and words of similar import which express our belief, expectations or intentions
regarding our future performance or future events or trends. We caution you
that, while forward-looking statements reflect our good faith beliefs, they are
not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors, which may cause actual results, performance or
achievements to differ materially from anticipated future results, performance
or achievements expressed or implied by such forward-looking statements as a
result of factors outside of our control. Certain factors that might cause such
a difference include, but are not limited to, the following: Real estate
investment considerations, such as the effect of economic and other conditions
in general and in the midwestern United States in particular; the financial
viability of our tenants; the continuing availability of retail center
acquisitions, development and redevelopment opportunities in the Midwest on
favorable terms; the availability of equity and debt capital in the public
markets; the fact that returns from development, redevelopment and acquisition
activity may not be at expected levels; inherent risks in ongoing redevelopment
and development projects including, but not limited to, cost overruns resulting
from weather delays, changes in the nature and scope of redevelopment and
development efforts, and market factors involved in the pricing of material and
labor; the need to renew leases or relet space upon the expiration of current
leases; and the financial flexibility to refinance debt obligations when due.
Additionally, market or other factors could adversely affect Heritage's ability
to obtain the financing necessary to complete the merger or otherwise delay
closing of the merger. The statements made under the caption "Risk Factors"
included in the Operating Partnership's Form 10-K for 1999 are incorporated
herein by reference. You should also refer to Bradley's proxy statement dated
July 14, 2000 providing a summary of the terms of the merger including the
conditions to the closing of the merger. We undertake no obligation to update
any forward looking statements contained herein.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable
Item 2. CHANGES IN SECURITIES
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
Item 5. OTHER INFORMATION
Not applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
The following Form 8-K was filed during the period April 1, 2000
through June 30, 2000:
1) Form 8-K filed May 16, 2000 (earliest event May 15, 2000),
reporting in Item 5., an Agreement and Plan of Merger whereby
Bradley Real Estate, Inc. will merge with and into a wholly-owned
subsidiary of Heritage Property Investment Trust, Inc.
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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 thereto duly authorized.
Date: August 11, 2000
Bradley Operating Limited Partnership
Registrant
By: \s\Thomas P. D'Arcy
----------------------------------
Thomas P. D'Arcy
President and CEO
By: \s\Irving E. Lingo, Jr.
----------------------------------
Irving E. Lingo, Jr.
Chief Financial Officer
17
