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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): February 18, 1998
CarrAmerica Realty, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 000-22741 52-1976308
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 624-7500
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<PAGE>
FORM 8-K
ITEM 1. Changes in Control of Registrant.
Not applicable.
ITEM 2. Acquisition or Disposition of Assets.
Not applicable.
ITEM 3. Bankruptcy or Receivership.
Not applicable.
ITEM 4. Changes in Registrant's Certifying Accountant.
Not applicable.
ITEM 5. Other Events.
Attached hereto as Exhibit 99.1 are Historical Summaries of Operating
Revenue and Expenses for the nine months ended September 30, 1997 (unaudited)
and the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report for San Mateo II and III. In accordance with Rule 3-14 of
Regulation S-X, financial statements with respect to the listed properties are
being filed because the Company has either (a) already acquired the property and
the book value of the property is significant, or (b) deemed the acquisition to
be probable and the book value of the property is significant.
In addition, attached hereto as Exhibit 99.2 are a pro forma condensed
consolidated balance sheet (unaudited) at September 30, 1997 and pro forma
condensed consolidated statements of operations for the nine months ended
September 30, 1997 (unaudited) and for the year ended December 31, 1996,
relating to CarrAmerica Realty, L.P.
ITEM 6. Resignations of Registrant's Directors.
Not applicable.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements.
Attached hereto as Exhibit 99.1 are Historical Summaries of Operating
Revenue and Expenses for the nine months ended September 30, 1997 (unaudited)
and the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report for San Mateo II and III.
(b) Pro Forma Financial Information.
Attached hereto as Exhibit 99.2 are a pro forma condensed consolidated
balance sheet (unaudited) at September 30, 1997 and pro forma condensed
consolidated statements of operations for the nine months ended September 30,
1997 (unaudited) and for the year ended December 31, 1996, relating to
CarrAmerica Realty, L.P.
<PAGE>
(c) Exhibits.
Exhibit
Number
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99.1 Financial Statements.
Historical Summaries of Operating Revenue
and Expenses for the nine months ended
September 30, 1997 (unaudited) and the year
ended December 31, 1996 with accompanying
notes and Independent Auditors' Report for
San Mateo II and III.
99.2 Pro Forma Financial Information.
Pro forma condensed consolidated balance
sheet (unaudited) at September 30, 1997 and
pro forma condensed consolidated statements
of operations for the nine months ended
September 30, 1997 (unaudited) and for the
year ended December 31, 1996, relating to
CarrAmerica Realty, L.P.
ITEM 8. Change in Fiscal Year.
Not applicable.
<PAGE>
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 hereto duly authorized.
Date: February 18, 1998
CARRAMERICA REALTY, L.P.
By: CarrAmerica Realty GP Holdings, Inc.,
its general partner
By: /s/ Brian K. Fields
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Brian K. Fields
CFO, Treasurer and Vice President
<PAGE>
EXHIBIT INDEX
Exhibit
Number
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99.1 Financial Statements.
Historical Summaries of Operating Revenue and Expenses for the nine
months ended September 30, 1997 (unaudited) and the year ended December 31, 1996
with accompanying notes and Independent Auditors' Report for San Mateo II and
III.
Pro Forma Financial Information.
Pro forma condensed consolidated balance sheet (unaudited) at
September 30, 1997 and pro forma condensed consolidated statements of operations
for the nine months ended September 30, 1997 (unaudited) and for the year ended
December 31, 1996, relating to CarrAmerica Realty, L.P.
EXHIBIT 99.1
SAN MATEO II&III
Historical Summaries
of Operating Revenue and Expenses
Nine Months Ended September 30, 1997 (Unaudited)
and the Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Limited Partnership:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of San Mateo II&III for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of San Mateo II&III. Our responsibility is to express an opinion on
the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of San
Mateo II&III.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
San Mateo II&III for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
February 4, 1998
<PAGE>
SAN MATEO II&III
Historical Summaries of Operating Revenue and Expenses
For the nine months ended September 30, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Nine months Year
ended ended
September 30, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $2,226 $2,624
Recovery of operating expenses 47 35
Lease termination fee 17 33
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Total operating revenue 2,290 2,692
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Operating expenses:
Repairs & maintenance 56 62
Utilities 209 301
Real estate taxes 144 180
Insurance 49 61
Management fees 81 100
Operating services 161 223
Administrative 79 102
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Total operating expenses 779 1,029
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Operating revenue in excess
of operating expenses $1,511 $1,663
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See accompanying notes to historical summaries
of operating revenue and expenses.
<PAGE>
SAN MATEO II&III
Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
For the nine months ended September 30, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
San Mateo II&III (the Buildings) consists of two buildings located in San
Mateo, California, a submarket of San Francisco. The Buildings contain
approximately 143,000 square feet of leasable office space. As of
September 30, 1997, the Buildings were 98% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented, as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Limited Partnership in the proposed future operations of the
Buildings, has been excluded. Interest income has been excluded
from revenue, and interest, depreciation and amortization, and
other costs not directly related to the future operations of the
Buildings have been excluded from expenses.
In accordance with California tax law, management expects that real
estate taxes will be reassessed upon transfer of ownership based on
the purchase price of the Buildings. Therefore, historical real
estate tax expenses may not be comparable to those expected to be
incurred by CarrAmerica Realty Limited Partnership. Management is
not aware of any other material factors that would cause the
historical summaries of operating revenue and expenses to not be
indicative of the future operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over the
terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the nine
months ended September 30, 1997 has been prepared consistent with
the rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the nine months ended September 30, 1997,
have been included. The results of operations for the nine-month
period ended September 30, 1997 are not necessarily indicative
of the results for the full year.
<PAGE>
(3) Rental Revenue
Minimum future rentals (excluding modifications and renewal options) on
noncancelable leases are as follows for the years ending December 31 (in
thousands):
1997 $3,107
1998 3,397
1999 3,433
2000 1,992
2001 425
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$12,354
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(4) Pro Forma Taxable Operating Results and Cash Available
from Operations (Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of the Buildings for the 12 months ended
September 30, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $1,886
Less estimated depreciation and amortization expense 402
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Pro forma taxable operating income $1,484
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Pro forma cash available from operations $1,886
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EXHIBIT 99.2
CARRAMERICA REALTY, L.P.
PRO FORMA FINANCIAL INFORMATION
September 30, 1997
(Unaudited)
This unaudited pro forma Condensed Balance Sheet is presented as if the
acquisition of San Mateo II&III had been consummated on September 30, 1997. The
unaudited pro forma Condensed Statements of Operations for the nine months ended
September 30, 1997 and for the year ended December 31, 1996 are presented as if
the acquisition of San Mateo II&III had been consummated as of the beginning of
the respective periods.
In management's opinion, all material adjustments necessary to reflect the
transaction described above are presented in the pro forma adjustments columns,
which are further described in the notes to the unaudited pro forma financial
information.
The unaudited Pro Forma Condensed Balance Sheet and the unaudited Pro Forma
Condensed Statements of Operations should be read in conjunction with the
Consolidated Financial Statements of the Partnership and Notes thereto, and the
Historical Summaries of Operating Revenues and Expenses of San Mateo II&III and
Notes thereto. The unaudited Pro Forma Condensed Balance Sheet is not
necessarily indicative of what the actual financial position of the Partnership
would have been at September 30, 1997 assuming the aforementioned transaction
had been consummated on such date, nor does it purport to represent the future
financial position of the Partnership. The unaudited Pro Forma Condensed
Statements of Operations are not necessarily indicative of what the actual
results of operations of the Partnership would have been assuming the
aforementioned transaction had been consummated as of the beginning of the
respective periods, nor does it purport to represent the results of operations
for future periods.
<PAGE>
CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
Pro Forma
Historical (A) Adjustments (B) Pro Forma
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ASSETS
Rental property, net $401,194 $25,140 $426,334
Development property 50,968 0 50,968
Restricted and unrestricted cash 3,023 0 3,023
Other assets 11,321 332 11,653
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Total assets $466,506 $25,472 $491,978
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LIABILITIES
Mortgages and notes payable $131,799 $0 $131,799
Other liabilities 14,788 76 14,864
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Total liabilities 146,587 76 146,663
PARTNERS' CAPITAL 319,919 25,396 345,315
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Total liabilities and
partners' capital $466,506 $25,472 $491,978
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<PAGE>
CARRAMERICA REALTY, L.P.
NOTES TO PRO FORMA CONDENSED BALANCE SHEET
September 30, 1997
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Partnership's unaudited historical condensed balance sheet as
of September 30, 1997.
(B) Reflects the net contributed value of San Mateo II&III consisting of
rental property ($25,140) and certain other assets ($332), the assumption
of certain liabilities ($76) and capital contributions from partners
($25,396).
<PAGE>
CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(In thousands)
<TABLE>
<CAPTION>
For the nine months ended September 30, 1997 (Unaudited)
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Pro Forma
Historical (A) Adjustments (B) Pro Forma
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<S> <C> <C> <C>
Real estate operating revenue - rental $ 40,157 $ 2,290 (1) $ 42,447
Real estate operating expenses:
Property operating expenses 17,411 698 (3) 18,109
Interest expense 3,989 - 3,989
General and administrative 1,625 - 1,625
Depreciation and amortization 8,784 391 (2) 9,175
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Total operating expenses 31,809 1,089 32,898
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Real estate operating income 8,348 1,201 9,549
Other operating income (expense), net 71 - 71
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Net income $ 8,419 $ 1,201 $ 9,620
========= ======= ========
</TABLE>
<PAGE>
CARRAMERICA REALTY, L.P.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
(In thousands)
<TABLE>
<CAPTION>
For the year ended December 31, 1996 (Unaudited)
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Pro Forma
Historical (A) Adjustments (B) Pro Forma
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<S> <C> <C> <C>
Real estate operating revenue - rental $ 13,376 $ 2,692 (1) $ 16,068
Real estate operating expenses:
Property operating expenses 6,546 929 (3) 7,475
Interest expense 1,475 - 1,475
General and administrative 680 - 680
Depreciation and amortization 3,148 521 (2) 3,669
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Total operating expenses 11,849 1,450 13,299
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Real estate operating income 1,527 1,242 2,769
Other operating income (expense), net 29 - 29
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Net income $ 1,556 $ 1,242 $ 2,798
========= ======= ========
</TABLE>
<PAGE>
CARRAMERICA REALTY, L.P.
NOTES TO PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1997 and the
Year Ended December 31, 1996
(Unaudited)
Adjustments (dollars in thousands):
(A) Reflects the Partnership's historical condensed statements of operations
for the nine months ended September 30, 1997 and the year ended December
31, 1996.
(B) Pro forma adjustments for the purchase of San Mateo II&III reflect:
(1) the historical operating activity of the property acquired;
(2) the depreciation expense for the acquisition based on the new
accounting basis for the rental property acquired based on a 30
year useful life; and
(3) the historical operating activity of the rental property acquired
reduced by the elimination of management fee expenses that are no
longer incurred by the Partnership upon purchase of the properties.
