<PAGE> 1
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): June 30, 1999
AMB PROPERTY, L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 001-14245 94-3285362
- ------------------------------ ------------ -------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
505 MONTGOMERY STREET, SAN FRANCISCO, CA 94111
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
(415) 394-9000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
Forward Looking Statements
Some of the information included in this report contains forward-looking
statements, such as statements pertaining to our intended use of proceeds.
Forward-looking statements involve numerous risks and uncertainties and you
should not rely on them as predictions of future events. The events or
circumstances reflected in forward-looking statements might not occur. You can
identify forward-looking statements by the use of forward-looking terminology
such as "believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "pro forma," "estimates" or "anticipates"
or the negative of these words and phrases or similar words or phrases. You can
also identify forward-looking statements by discussions of strategy, plans or
intentions. Forward-looking statements are necessarily dependent on assumptions,
data or methods that may be incorrect or imprecise and we may not be able to
realize them. The failure of the remaining transactions with BPP Retail, LLC to
close with respect to some or all of the properties under contract or a
significant delay with respect to one or more of the closings could cause actual
results and future events to differ materially from those set forth or
contemplated in the forward-looking statements. We caution you not to place
undue reliance on forward-looking statements, which reflect our analysis only
and speak only as of the date of this report or the dates indicated in the
statements.
Item 5. Other Events
On April 15, 1999, we filed a current report on Form 8-K reporting that we
signed a series of definitive agreements for the sale of (1) up to 28 of our
retail properties to BPP Retail, LLC and (2) six additional retail properties to
Burnham Pacific Operating Partnership, L.P. The current report also provided
unaudited pro forma financial information. On June 11, 1999, we filed an
amendment no. 1 to the current report to reflect that one of our joint venture
partners who holds an interest in three of the properties indicated that it will
not consent to the sale of these properties at this time and to update the pro
forma financial information. On June 17, 1999, we filed a current report on Form
8-K reporting the first closing of the sale of properties to BPP Retail, LLC,
with respect to nine of our retail properties.
We are filing this current report on Form 8-K to (1) report that on June 30,
1999, the agreement with respect to the sale of six retail properties, totaling
approximately 1.5 million square feet, to Burnham Pacific Operating Partnership,
L.P. was terminated pursuant to its terms as a result of Burnham Pacific
Operating Partnership, L.P.'s decision not to waive the financing condition and
(2) to file updated pro forma financial information, which reflects the
termination of the agreement with respect to the six properties and the sale of
nine retail properties to BPP Retail, LLC with respect to the first closing, and
supersedes the pro forma financial information filed with the June 11, 1999 Form
8-K amendment.
If the disposition of the 16 retail properties, totaling approximately 2.9
million square feet, that remain subject to our agreements with BPP Retail, LLC
are fully consummated, we intend to use the proceeds to pay approximately
$4.8 million in transaction expenses, to repay secured debt related to the
properties divested of approximately $30.8 million (including prepayment
penalties of approximately $2.0 million), to make payments under our unsecured
credit facility in the amount of approximately $133.4 million, for potential
acquisitions and for general corporate purposes.
We currently intend to dispose of the six retail properties discussed above,
either on an individual basis or a portfolio basis, and, therefore, we
continue to reflect these properties in our financial statements as properties
held for disposition.
Item 7. Financial Statements and Exhibits
The following pro forma financial information supersedes the pro forma financial
information filed with the June 11, 1999 Form 8-K amendment:
(a) Pro Forma Financial Information for AMB Property, L.P. (Unaudited)
Pro Forma Condensed Consolidated Balance Sheet as of March 31, 1999
Notes and adjustments to Pro Forma Condensed Consolidated Balance Sheet
as of March 31, 1999
Pro Forma Condensed Consolidated Statement of Operations for the three
months ended March 31, 1999
Notes and adjustments to Pro Forma Condensed Consolidated Statement of
Operations for the three months ended March 31, 1999
Pro Forma Condensed Consolidated Statement of Operations for the year
ended December 31, 1998
Notes and adjustments to Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1998
2
<PAGE> 3
AMB PROPERTY, L.P.
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
BACKGROUND
The accompanying unaudited pro forma condensed consolidated balance sheet as
of March 31, 1999 has been prepared to reflect AMB Property, L.P. (the
"Operating Partnership") entering into a series of definitive agreements
whereby, if fully consummated, the Operating Partnership will divest up to 25
retail shopping centers with various estimated closing dates through December
1, 1999 for an aggregate price of $560.3 million (the "Divestiture") as if the
Divestiture had occurred on March 31, 1999. On June 15, 1999, the Operating
Partnership divested itself of nine of the properties under contract. The
accompanying unaudited pro forma condensed consolidated statement of operations
for the three months ended March 31, 1999 has been prepared to reflect the
Divestiture as if such transactions and adjustments had occurred on January 1,
1998 and were carried forward through March 31, 1999. The accompanying unaudited
pro forma condensed consolidated statement of operations for the year ended
December 31, 1998 has been prepared to reflect: (i) the incremental effect of
the acquisition of properties during 1998, (ii) pro forma debt and other
adjustments resulting from the sale of the Operating Partnership's senior debt
securities, the sale of 8.5% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred Stock") of AMB Property Corporation (the "Company"), the
sale of 8.625% Series B Cumulative Redeemable Preferred Units (the "Series B
Preferred Units") of the Operating Partnership and the sale of 8.75% Series C
Cumulative Redeemable Preferred Units (the "Series C Preferred Units") of AMB
Property II, L.P. and the application of the resulting net proceeds and (iii)
the Divestiture as if such transactions and adjustments had occurred on January
1, 1998 and were carried forward through December 31, 1998.
These unaudited pro forma condensed consolidated statements should be read
in connection with the historical consolidated financial statements and notes
thereto included in the Operating Partnership's December 31, 1998 Form 10-K. In
the opinion of management, the pro forma condensed consolidated financial
information provides for all adjustments necessary to reflect the effects of the
sale of the senior debt securities, the sale of the Series A Preferred Stock,
the sale of the Series B Preferred Units and the sale of the Series C Preferred
Units and the application of the resulting net proceeds therefrom, the 1998
property acquisitions and the Divestiture.
The pro forma information is unaudited and is not necessarily indicative of
the consolidated results that would have occurred if the transactions and
adjustments reflected therein had been consummated in the period or on the date
presented, or on any particular date in the future, nor does it purport to
represent the financial position, results of operations or changes in cash flows
for future periods.
3
<PAGE> 4
AMB PROPERTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
OPERATING
PARTNERSHIP(1) DIVESTITURE(2) PRO FORMA
-------------- -------------- ----------
ASSETS
<S> <C> <C> <C>
Investments in real estate, net ....... $2,735,601 $ -- $2,735,601
Properties held for divesture, net .... 871,665 (500,764) 370,901
Divestiture receivable ................ -- 322,965 322,965
Cash and cash equivalents ............. 29,165 101 29,266
Cash held in escrow............ -- 72,183 72,183
Other assets .......................... 60,187 -- 60,187
---------- ---------- ----------
Total assets ................. $3,696,618 $ (105,515) $3,591,103
========== ========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Secured debt .......................... $ 770,429 $ (57,812) $ 712,617
Unsecured credit facility.............. 316,000 (96,400) 219,600
Unsecured Senior debt securities ...... 400,000 -- 400,000
Other liabilities ..................... 123,796 -- 123,796
---------- ---------- ----------
Total liabilities ............ 1,610,225 (154,212) 1,456,013
---------- ---------- ----------
Minority interests .................... 176,121 -- 176,121
---------- ---------- ----------
Partners' Capital
General Partner ..................... 1,761,533 46,311 1,807,844
Limited Partners .................... 148,739 2,386 151,125
---------- ---------- ----------
Total partners' capital ...... 1,910,272 48,697 1,958,969
---------- ---------- ----------
Total liabilities and
partners' capital .......... $3,696,618 $ (105,515) $3,591,103
========== ========== ==========
</TABLE>
4
<PAGE> 5
AMB PROPERTY, L.P.
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS)
(1.) Reflects the historical consolidated balance sheet of AMB Property,
L.P. as of March 31, 1999. See the historical consolidated financial statements
and notes thereto included in AMB Property, L.P.'s March 31, 1999 Form 10-Q.
(2.) On March 9, 1999, AMB Property, L.P., a Delaware limited partnership
(the "Operating Partnership"), in which AMB Property Corporation (the "Company")
is the sole general partner, signed a series of definitive agreements with BPP
Retail, LLC ("BPP Retail"), a co-investment entity between Burnham Pacific
Properties ("BPP") and the California Public Employees' Retirement System
("CalPERS"), pursuant to which, if fully consummated, BPP Retail will acquire up
to 28 retail shopping centers from the Operating Partnership, totaling 5.1
million square feet, for an aggregate price of $663,400. The sale of three of
the properties is subject to the consent of the Operating Partnership's joint
venture partner. The Operating Partnership's joint venture partner who holds an
interest in three of the properties has indicated that it will not consent to
the sale of the properties at this time. As a result, the sale price with
respect to the 25 remaining properties, totaling approximately 4.3 million
square feet is approximately $560,300. The Operating Partnership intends to
dispose of these three properties or its interests in the joint ventures through
which it holds the three properties and has therefore continued to reflect the
properties as properties held for divestiture in the accompanying pro forma
balance sheet.
Pursuant to the agreements, BPP Retail will acquire the 25 centers in
separate transactions. The Operating Partnership originally expected the first
closing to occur on or about April 30, 1999. Under the agreements, the Operating
Partnership has the right to extend the closing dates for a period of up to
either 20 or 50 days. The Operating Partnership has exercised this right with
respect to the first closing, which occurred on June 15, 1999. The Operating
Partnership currently expects the second and third closings to occur on or about
July 31, 1999 and December 1, 1999. Although the Operating Partnership believes
that the transactions are probable, they may not close as scheduled or close at
all, and it is possible that the transactions may close with respect to just a
portion of the properties currently subject to the agreements.
The Operating Partnership had entered into a definitive agreement, subject
to a financing condition, with BPP, pursuant to which if fully consummated, BPP
would have acquired up to six additional retail centers, totaling 1.5 million
square feet, for $284,400. BPP terminated the agreement pursuant to its terms as
a result of BPP's decision not to waive the financing condition. The Operating
Partnership currently intends to dispose of these six properties, either on an
individual or a portfolio basis, and, therefore, it continues to reflect these
properties in its financial statements as properties held for disposition.
Expected details of the transactions are as follows:
<TABLE>
<CAPTION> TOTAL RENTABLE SALE
SQUARE FOOTAGE PRICE
CLOSING DATE CENTERS (000's) (MILLIONS)
- ------------------------ ------- -------------- ----------
<S> <C> <C> <C>
June 15, 1999 9 1,409 $207.4
July 31, 1999 12 2,036 245.8
December 1, 1999 4 868 107.1
TOTAL 25 4,313 $560.3
</TABLE>
In connection with these transactions, the Company has also granted CalPERS
an option to purchase up to 2,000,000 shares of the Company's Common Stock for
an exercise price of $25 per share that may be exercised on or before March 31,
2000. The above transactions are collectively referred to as the "Divestiture".
As of March 31, 1999, the net carrying value of the 25 properties being
divested in connection with the Divestiture was approximately $500,800. Certain
of the properties included in these transactions are subject to secured
indebtedness which totaled approximately $57,800 as of March 31, 1999. The
Operating Partnership intends to use the proceeds of approximately $560,300 from
the Divestiture to pay approximately $7,600 in transaction expenses, to repay
the secured debt related to the properties divested, to partially pay down the
unsecured credit facility, for potential acquisitions and for general corporate
purposes.
The adjustments reflect the elimination of the real estate assets being
divested in connection with the Divestiture. The adjustments also reflect the
use of the net proceeds from the first closing to repay secured indebtedness of
approximately $30,100, including prepayment penalties of $3,300, to pay down the
unsecured credit facility by approximately $96,400, to deposit $72,200 in escrow
for the purchase or the like-kind exchange of properties and $100 for general
corporate purposes. The adjustments also include a Divestiture receivable for
the difference between the net proceeds of approximately $352,900 from the
second and third closings and the repayment of approximately $30,800 of secured
indebtedness including $2,000 of prepayment penalties. The repayment of all of
the secured indebtedness will result in an extraordinary loss of approximately
$3,300. The extraordinary loss consists of prepayment penalties of approximately
$5,300 offset by the write-off of approximately $2,000 in debt premiums related
to the indebtedness extinguished. The Divestiture will result in an estimated
gain of approximately $48,700 which is net of the $3,300 extraordinary loss on
the extinguishment of the secured debt. The net gain has been allocated to the
Company and the limited partners based on their respective ownership of the
Operating Partnership as of March 31, 1999.
5
<PAGE> 6
AMB PROPERTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
OPERATING
PARTNERSHIP(1) DIVESTITURE(2) PRO FORMA
------------ ------------- ------------
<S> <C> <C> <C>
REVENUES
Rental revenues .......................... $ 107,657 $ (16,954) $ 90,703
Equity in earnings of unconsolidated
joint venture ........................... 1,151 -- 1,151
Investment management and other income ... 764 (42) 722
------------ --------- ------------
Total revenues ................ 109,572 (16,996) 92,576
------------ --------- ------------
OPERATING EXPENSES
Property operating expenses ............. 14,499 (2,210) 12,289
Real estate taxes ....................... 15,035 (2,483) 12,552
General, administrative and other . ..... 4,072 -- 4,072
Depreciation and amortization ........... 18,424 (3,571) 14,853
Interest expense ........................ 22,967 (2,493) 20,474
------------ --------- ------------
Total operating expenses ...... 74,997 (10,757) 64,240
------------ --------- ------------
Income from operations before
minority interests ..................... 34,575 (6,239) 28,336
Minority interests' share of net
income ................................ (3,821) -- (3,821)
------------ --------- ------------
Net income .................... 30,754 (6,239) 24,515
Series A preferred unit distributions ... (2,125) -- (2,125)
Series B preferred unit distributions ... (1,402) -- (1,402)
------------ --------- ------------
Net income available to general
and limited partners .................. $ 27,227 $ (6,239) $ 20,988
============ ========= ============
Net income available to common
unitholders attributable to:
General Partner ........................ 25,889 19,956
Limited Partners ....................... 1,338 1,032
------------ ------------
$ 27,227 $ 20,988
============ ============
Net income per common unit
Basic ................................. $ .30 $ .23
============ ============
Diluted ............................... $ .30 $ .23
============ ============
Weighted average common units
outstanding
Basic ................................. 90,449,529 90,449,529
============ ============
Diluted ............................... 90,469,105 90,469,105
============ ============
</TABLE>
6
<PAGE> 7
AMB PROPERTY, L.P.
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE AND UNIT DATA)
(1.) Reflects the historical consolidated operations of AMB Property, L.P.'s
for the three months ended March 31, 1999. See the historical consolidated
financial statements and notes thereto included in AMB Property, L.P. March 31,
1999 Form 10-Q.
(2.) Reflects the elimination of the historical revenues and expenses for
the three months ended March 31, 1999 related to the real estate assets to be
divested in connection with the Divestiture. The adjustments also reflect a
reduction of interest expense of approximately $1,500 related to the pay down
of the unsecured credit facility by $96,400 with proceeds from the first
closing.
7
<PAGE> 8
AMB PROPERTY, L.P.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DEBT AND
OPERATING 1998 PROPERTY PREFERRED
PARTNERSHIP(1) ACQUISITIONS(2) OFFERINGS(3) DIVESTITURE(4) PRO FORMA (5)
-------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental revenues .......................... $ 354,658 $ 52,457 $ -- $ (66,205) $ 340,910
Interest and other income ............... 4,229 2,988 -- (543) 6,674
------------ ------------ ------------ --------- ------------
Total revenues ................ 358,887 55,445 -- (66,748) 347,584
------------ ------------ ------------ --------- ------------
OPERATING EXPENSES
Real estate taxes and property
operating expenses ..................... 96,074 11,863 -- (18,379) 89,558
Interest expense ........................ 69,670 -- 19,189 (11,271) 77,588
Depreciation and amortization ........... 57,464 7,732 -- (12,759) 52,437
General, administrative and other . ..... 11,929 -- -- -- 11,929
------------ ------------ ------------ --------- ------------
Total operating expenses ...... 235,137 19,595 19,189 (42,409) 231,512
------------ ------------ ------------ --------- ------------
Income from operations before
minority interests ..................... 123,750 35,850 (19,189) (24,339) 116,072
Minority interests' share of net
income ................................ (5,494) (2,384) (8,609) -- (16,487)
------------ ------------ ------------ --------- ------------
Net income .................... 118,256 33,466 (27,798) (24,339) 99,585
Series A preferred unit distributions ... (3,639) -- (4,861) -- (8,500)
Series B preferred unit distributions ... (779) -- (4,827) -- (5,606)
------------ ------------ ------------ --------- ------------
Net income available to general and
limited partners ...................... $ 113,838 $ 33,466 $ (37,486) $ (24,339) $ 85,479
============ ============ ============ ========= ============
Net income available to common
unitholders attributable to:
General Partner ........................ 108,954 81,788
Limited Partners ....................... 4,884 3,691
------------ ------------
$ 113,838 $ 85,479
============ ============
Net income per common share
Basic ................................. $ 1.27 $ 0.95
============ ============
Diluted ............................... $ 1.26 $ 0.95
============ ============
Weighted average common shares
outstanding
Basic ................................. 89,493,394 89,493,394
============ ============
Diluted ............................... 89,852,187 89,852,187
============ ============
</TABLE>
8
<PAGE> 9
AMB PROPERTY, L.P.
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE AND UNIT DATA)
(1.) Reflects the historical consolidated operations of the Operating
Partnership for the year ended December 31, 1998. See the historical
consolidated financial statements and notes thereto included in the Operating
Partnership's December 31, 1998 Form 10-K.
(2.) The following reflects the incremental effects of properties acquired
during the year ended December 31, 1998 based on the historical operations of
such properties for the periods prior to acquisition by the Operating
Partnership:
<TABLE>
<CAPTION>
REAL ESTATE TAXES REVENUES IN
AND PROPERTY EXCESS OF
OPERATING CERTAIN
RENTAL REVENUES EXPENSES EXPENSES
--------------- ----------------- ---------
<S> <C> <C> <C>
Cascade .............................. $ 44 $ (11) $ 33
Wilsonville .......................... 167 (41) 126
Atlanta South Phase II ............... 116 (30) 86
Boston Industrial Portfolio .......... 2,853 (108) 2,745
Mansfield Industrial Portfolio ....... 71 (2) 69
Orlando Central Park ................. 804 (260) 544
Jamesburg Property ................... 1,466 (543) 923
Corporate Park Industrial ............ 757 (130) 627
Minneapolis Industrial Portfolio...... 592 (230) 362
Houston Service Center ............... 706 (249) 457
Meadowridge Business Park ............ 1,058 (238) 820
Northwest Business Center ............ 323 (75) 248
Forbes ............................... -- -- --
Southfield ........................... -- -- --
Crysen Corridor Warehouse ............ 247 (63) 184
Garland Industrial Portfolio ......... 1,966 (412) 1,554
Suffolk .............................. 165 (42) 123
Minnetonka Industrial Portfolio ...... 2,022 (768) 1,254
Alsip Industrial ..................... 374 (106) 268
Suffolk Industrial ................... 444 (112) 332
Chemway Industrial ................... 688 (140) 548
Amberjack Portfolio................... 5,924 (2,151) 3,773
Willow Lake Portfolio ................ 4,501 (1,026) 3,475
Willow Park Portfolio ................ 9,610 (1,977) 7,633
Porete Avenue Warehouse............... 1,352 (270) 1,082
Mawah Portfolio ...................... 3,379 (282) 3,097
National Distribution Portfolio ...... 8,180 (1,731) 6,449
South Point Business Park............. 2,087 (201) 1,886
Northridge ........................... 108 (43) 65
Totem Lake Malls ..................... 758 (277) 481
Around Lenox ......................... 1,695 (345) 1,350
-------- --------- --------
$ 52,457 $ (11,863) $ 40,594
======== ========= ========
</TABLE>
9
<PAGE> 10
Five of the property acquisitions, Jamesburg Property, Corporate Park
Industrial, Garland Industrial Portfolio, Minnetonka Industrial Portfolio and
South Point Business Park, represent a joint venture with a client of AMB
Investment Management in which the Company owns a controlling 50.0005% interest.
The joint venture acquisitions are accounted for on a consolidated basis and,
accordingly, minority interests of $2,384 has been reflected relative to these
acquisitions.
Two of the property acquisitions, Forbes and Southfield, represent the
purchase of vacant buildings which are in the process of being leased. As such,
no property operations have been reflected in the accompanying pro forma
statement of operations relative to these acquisitions.
Also reflects the acquisition of a non-controlling unconsolidated limited
partnership interest in an existing real estate joint venture which owns the
DuPage Elk Grove Property. As such, the Operating Partnership's incremental
share of equity in earnings of this joint venture of $2,988 is included in
interest and other income in the accompanying pro forma statement of operations.
Also reflects the estimated incremental depreciation and amortization of the
1998 property acquisitions based on estimated useful lives of 40 years.
(3.) Reflects an adjustment to derive pro forma interest expense as follows:
<TABLE>
<S> <C>
Secured debt .............................................. $ 9,868
Unsecured Senior Debt Securities .......................... 14,820
Credit Facility .......................................... (5,499)
-------
$19,189
=======
</TABLE>
The increase in pro forma interest expense is the result of borrowings on
the Credit Facility related to property acquisitions, the issuance of unsecured
senior debt securities, the assumption of secured debt in connection with
property acquisitions which is offset by the repayment of borrowings on the
Credit Facility of approximately $395,000 with the net proceeds from the sale of
the Unsecured Senior Debt Securities and approximately $264,000 from the sale of
Series A Preferred Shares by the Company, the sale of Series B Preferred Units
and the sale of Series C Preferred Units by a subsidiary of the Operating
Partnership. The proceeds of the Company's Series A Preferred stock offering
were contributed to the Operating Partnership.
In June 1998, the Operating Partnership issued $400,000 aggregate principal
amount of unsecured notes ("Unsecured Senior Debt Securities") in an
underwritten public offering, of which the net proceeds of approximately
$394,466 were contributed to the Operating Partnership and used to repay amounts
outstanding under the Credit Facility. The Unsecured Senior Debt Securities
mature in June 2008. June 2015 and June 2018 and bear interest at a weighted
average rate of 7.18%.
In July, 1998, the Company sold 4,000,000 shares of 8.5% Series A Cumulative
Redeemable Preferred Stock at $25.00 per share for $100,000 in an underwritten
public offering. These shares are redeemable solely at the option of the Company
on or after July 27, 2003. The net proceeds of $96,100 from the offering were
contributed to the Operating Partnership in exchange for 4,000,000 Series A
preferred units with terms identical to the Series A Preferred Stock. The
Operating Partnership used these proceeds to repay borrowings under the Credit
Facility.
In November 1998, the Operating Partnership issued and sold 1,300,000
8.625% Series B Cumulative Redeemable Preferred Units at a price of $50.00 per
unit in a private placement. Distributions are cumulative from the date of
original issuance and are payable quarterly in arrears at a rate per unit equal
to $4.3125 per annum. The Series B Preferred Units are redeemable by the
Operating Partnership on or after November 12, 2003, subject to certain
conditions, for cash at a redemption price equal to $50.00 per unit, plus
accumulated and unpaid distributions thereon, if any, to the redemption date.
The Series B Preferred Units are exchangeable, at specified times and subject
to certain conditions, on a one-for-one basis, for shares of the Company's
Series B Preferred Stock. The Operating Partnership used the net proceeds of
$62,259 to repay borrowings under the Credit Facility.
In November 1998, a subsidiary of the Operating Partnership issued and sold
2,200,000 units of 8.75% Series C Cumulative Redeemable Preferred Units at a
price of $50.00 per unit in a private placement. Distributions are cumulative
from the date of original issuance and are payable quarterly in arrears at a
rate per unit equal to $4.375 per annum. The Series C Preferred Units are
redeemable by the subsidiary of the Operating Partnership on or after November
24, 2003, subject to certain conditions, for cash at a redemption price equal to
$50.00 per unit, plus accumulated and unpaid distributions thereon, if any, to
the redemption date. The Series C Preferred Units are exchangeable, at specified
times and subject to certain conditions, on a one-for-one basis, for shares of
the Company's Series C Preferred Stock. The subsidiary of the Operating
Partnership used the net proceeds of $105,734 to make a loan to the Operating
Partnership, which used the funds to repay borrowings under the Credit Facility.
Also reflects the payment of pro forma Series A Preferred Stock dividends at
a dividend rate of 8.5%, Series B Preferred Unit distributions at a distribution
rate of 8.625% and Series C Preferred Unit distributions at a distribution rate
of 8.75%.
10
<PAGE> 11
(4.) Reflects the elimination of the historical revenues and expenses for
the year ended December 31, 1998 related to the real estate assets to be
divested in connection with the Divestiture. The adjustments also reflect a
reduction of interest expense of approximately $6,300 related to the pay down of
the unsecured credit facility by $96,400 with proceeds from the first closing.
(5.) The pro forma taxable income of the Operating Partnership for the year
ended December 31, 1998 is approximately $74,200, which is based upon pro forma
net income of approximately $85,500, plus book depreciation and amortization of
approximately $41,700 less other book/tax differences of approximately $8,000
and less tax depreciation and amortization of approximately $45,000.
11
<PAGE> 12
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 hereunto duly authorized.
AMB PROPERTY, L.P.
(Registrant)
By: AMB Property Corporation
Date: July 2, 1999 By: /s/ MICHAEL A. COKE
---------------- --------------------------------
Michael A. Coke
Chief Financial Officer and
Senior Vice President
(Principal Financial and
Accounting Officer)
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