<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
NOVEMBER 17, 1999
BEACON CAPITAL PARTNERS, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
MARYLAND 000-24905 04-3403281
- ---------------------------- ----------------------- -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
ONE FEDERAL STREET, 26TH FLOOR, BOSTON, MASSACHUSETTS, 02110
------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (617) 457-0400
<PAGE>
ITEM 5 - OTHER EVENTS
The following financial statements, previously filed as exhibits to the
Registrants' Registration Statement on Form S-11, are filed as exhibits
hereto:
(i) the combined historical summaries of gross income and direct
operating expenses for Fort Point Place, The Athenaeum Portfolio, and
the Breunig Portfolio;
(ii) the historical summary of gross income and direct operating
expenses for Technology Square and the Draper Building; and
(iii) unaudited pro forma condensed consolidated financial information
for Beacon Capital Partners, Inc.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit 99.1 - Combined historical summary of gross income and direct
operating expenses for Fort Point Place.
Exhibit 99.2 - Combined historical summary of gross income and direct
operating expenses for The Athenaeum Portfolio.
Exhibit 99.3 - Combined historical summary of gross income and direct
operating expenses for the Breunig Portfolio.
Exhibit 99.4 - Historical summary of gross income and direct operating
expenses for Technology Square and the Draper Building.
Exhibit 99.5 - Unaudited pro forma condensed consolidated financial
information for Beacon Capital Partners, Inc.
2
<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 thereunto duly authorized.
BEACON CAPITAL PARTNERS, INC.
Date: November 17, 1999 By: /s/ Randy J. Parker
------------------------------------
Randy J. Parker
Senior Vice President and
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
Exhibit 99.1 - Combined historical summary of gross income
and direct operating expenses for Fort Point
Place.
Exhibit 99.2 - Combined historical summary of gross income and
direct operating expenses for The Athenaeum
Portfolio.
Exhibit 99.3 - Combined historical summary of gross income and
direct operating expenses for the Breunig
Portfolio.
Exhibit 99.4 - Historical summary of gross income and direct
operating expenses for Technology Square and the
Draper Building.
Exhibit 99.5 - Unaudited pro forma condensed consolidated financial
information for Beacon Capital Partners, Inc.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Beacon Capital Partners, Inc.
We have audited the accompanying Combined Historical Summary of Gross
Income and Direct Operating Expenses (the "Historical Summary") for Fort
Point Place for the year ended December 31, 1998. This Historical Summary is
the responsibility of Fort Point Place's management. 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 basis of accounting 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 for inclusion in Form S-11 of Beacon Capital Partners, Inc. as
described in Note 1, and is not intended to be a complete presentation of
Fort Point Place's revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly,
in all material respects, the gross income and direct operating expenses
described in Note 1 of Fort Point Place for the period ended December 31,
1998, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
March 26, 1999
<PAGE>
COMBINED HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
FOR FORT POINT PLACE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1999 TO YEAR ENDED
JULY 13, 1999 DECEMBER 31, 1998
------------------ -----------------
(UNAUDITED)
<S> <C>
Gross income
Rental income.............................................. $1,632 $3,049
Other income............................................... 47 87
------ ------
Total gross income...................................... 1,679 3,136
------ ------
Direct operating expenses
Property operating......................................... 231 431
Real estate taxes.......................................... 163 306
------ ------
Total direct operating expenses......................... 394 737
------ ------
Gross income in excess of direct operating expenses........ $1,285 $2,399
------ ------
------ ------
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
NOTES TO COMBINED HISTORICAL SUMMARY OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR FORT POINT PLACE
(DOLLARS IN THOUSANDS)
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presented herein is the combined historical summary of gross income and
direct operating expenses (the "Historical Summary") of Fort Point Place.
Fort Point Place, currently owned by Wormwood Realty Trust (the "Seller"), is
comprised of four office and warehouse buildings located in the Boston,
Massachusetts South Boston Waterfront District with gross rentable area of
approximately 335,000 square feet. The mixed-use properties are expected to
be acquired by Beacon Capital Partners, L.P. (the "Purchaser").
The accompanying Historical Summary has been prepared in accordance with
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for
inclusion in the Registration Statement on Form S-11 of Beacon Capital
Partners, Inc. Accordingly, certain historical expenses which may not be
comparable to the expenses expected to be incurred in the proposed future
operations of Fort Point Place have been excluded. Excluded expenses consist
of depreciation, amortization, corporate and interest expense not directly
related to the future operation of Fort Point Place.
Rental income is recognized on a straight line basis over the term of the
related leases.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. LEASES
Minimum future rentals under operating leases with Fort Point Place in
effect at December 31, 1998 are summarized as follows:
<TABLE>
<CAPTION>
Year
----
<S> <C>
1999......................... $2,168
2000......................... 1,828
2001......................... 830
2002......................... 782
2003......................... 636
Thereafter................... 1,744
------
Total........................ $7,988
======
</TABLE>
The leases at Fort Point Place are generally for a term greater than one
year and no more than five years. Certain leases provide for operating
expense reimbursement, real estate tax escalations and increases in minimum
rent.
Included in rental income is $660,000 of rent paid by Hub Folding Box,
Incorporated ("Hub"), an affiliate of the Seller. Hub occupies approximately
49% of the gross rentable area of Fort Point Place. The Hub lease will be
terminated as of the date of the closing. Hub will, however, be permitted to
continue to occupy the space for a period after the closing not to exceed
ninety days. As a result, future minimum rents attributable to Hub have been
excluded from the table.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Beacon Capital Partners, Inc.
We have audited the accompanying Combined Historical Summary of Gross
Income and Direct Operating Expenses (the "Historical Summary") for One
Kendall Square Buildings 100-500, One Kendall Square Buildings 600/650/700,
One Kendall Square Building 1400, One Kendall Square Building 1500, One
Kendall Square Building 1700, 215 First Street, the One Kendall Square
Cinema, the One Kendall Square Parking Garage, and 195 First Street Parking
Lot (collectively, known as "The Athenaeum Portfolio") for the year ended
December 31, 1997. This Historical Summary is the responsibility of The
Athenaeum Portfolio's management. 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 basis of accounting 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 for inclusion in the Registration Statement on Form S-11 of Beacon
Capital Partners, Inc. as described in Note 1, and is not intended to be a
complete presentation of the Athenaeum Portfolio's revenues and expenses.
In our opinion, the Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct operating
expenses described in Note 1 of the Athenaeum Portfolio for the year ended
December 31, 1997, in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
May 22, 1998
<PAGE>
COMBINED HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
FOR THE ATHENAEUM PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998 TO YEAR ENDED
APRIL 30, 1998 DECEMBER 31, 1997
------------------- ------------------
(UNAUDITED)
<S> <C> <C>
Gross income
Rental income......................................... $6,513 $19,593
Reimbursement of operating expenses and taxes........ 1,277 5,238
Other income.......................................... 106 213
------- -------
Total gross income................................ 7,896 25,044
------- -------
Direct operating expenses
Property operating.................................... 1,784 5,514
Real estate taxes..................................... 1,288 3,740
------- -------
Total direct operating expenses................... 3,072 9,254
------- -------
Gross income in excess of direct operating expenses... $4,824 $15,790
------- -------
------- -------
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO COMBINED HISTORICAL SUMMARY OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR THE ATHENAEUM PORTFOLIO
(DOLLARS IN THOUSANDS)
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presented herein is the combined historical summary ("Historical
Summary") of gross income and direct operating expenses of the following
properties, held under common control (collectively, "The Athenaeum
Portfolio"):
One Kendall Square Buildings 100-500 One Kendall Square Cinema
One Kendall Square Buildings 600/650/700 195 First Street Parking Lot
One Kendall Square Buildings 1400 215 First Street
One Kendall Square Buildings 1500 One Kendall Square Parking Garage
One Kendall Square Buildings 1700
The mixed-use properties were acquired by Beacon Capital Partners, Inc.
on May 1, 1998.
The accompanying Historical Summary has been prepared in accordance with
Rule 3-14 of Regulations S-X of the Securities and Exchange Commission for
inclusion in the Registration Statement on Form S-11 of Beacon Capital
Partners, Inc. Accordingly, certain historical expenses which may not be
comparable to the expenses expected to be incurred in the proposed future
operations of The Athenaeum Portfolio have been excluded. Excluded expenses
consist of depreciation and amortization, and interest not directly related
to the future operations of the Athenaeum Portfolio.
Rental income is recognized on a straight line basis over the term of the
related leases.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that effect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Minimum future rentals under operating leases with The Athenaeum Portfolio
in effect at December 31, 1997 are summarized as follows:
Year
----
1998..................................... $16,711
1999..................................... 16,195
2000..................................... 13,833
2001..................................... 12,090
2002..................................... 9,876
Thereafter............................... 20,633
-------
$89,338
-------
-------
Terms of the leases range from one to twenty years and provide for
operating expense reimbursement, real estate tax escalations and, in certain
cases, percentage rent and increases in minimum rent. Approximately 26% of
the Athenaeum Portfolio's revenue for the year ended December 31, 1997 was
derived from one tenant.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Beacon Capital Partners, Inc.
We have audited the accompanying Combined Historical Summary of Gross
Income and Direct Operating Expenses (the "Historical Summary") for Brandywine
Place, Crosspoint Atrium, Forest Abrams Place, 6500 Greenville Avenue,
Northcreek Place II, One Glen Lakes, Park North Business Center, Plaza at
Walnut Hill, Richardson Business Center, Richardson Commerce Centre, Sherman
Tech, T.I. Business Park, and Venture Drive Tech Center (collectively, known
as "The Breunig Portfolio") for the year ended December 31, 1997. This
Historical Summary is the responsibility of the Breunig Portfolio's
management. 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 basis of accounting 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 for inclusion in the Registration Statement on Form S-11 of Beacon
Capital Partners, Inc. as described in Note 1, and is not intended to be a
complete presentation of the Breunig Portfolio's revenues and expenses.
In our opinion, the Historical Summary referred to above presents
fairly, in all material aspects, the gross income and direct operating
expenses described in Note 1 of the Breunig Portfolio for the year ended
December 31, 1997, in conformity with generally accepted accounting
principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
July 1, 1998
<PAGE>
COMBINED HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
FOR THE BREUNIG PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
------------------- ------------------
(UNAUDITED)
<S> <C> <C>
Gross income
Rental income......................................... $5,695 $ 9,843
Reimbursement of operating expenses and taxes........ 366 658
Other income.......................................... 146 279
------- -------
Total gross income................................ 6,207 10,780
------- -------
Direct operating expenses
Property operating.................................... 2,521 4,584
Real estate taxes..................................... 809 1,470
------- -------
Total direct operating expenses................... 3,330 6,054
------- -------
Gross income in excess of direct operating expenses... $2,877 $ 4,726
------- -------
------- -------
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO COMBINED HISTORICAL SUMMARY OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR THE BREUNIG PORTFOLIO
(DOLLARS IN THOUSANDS)
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Presented herein is the combined historical summary ("Historical
Summary") of gross income and direct operating expenses of the following
properties, (collectively, "The Breunig Portfolio") all of which are located
in or near Dallas, Texas:
Brandywine Place Plaza at Walnut Hill
Crosspoint Atrium Richardson Business Center
Forest Abrams Place Richardson Commerce Centre
6500 Greenville Avenue Sherman Tech
Northcreek Place II T I Business Park
One Glen Lakes Venture Drive Tech Center
Park North Business Center
The mixed-use properties were acquired by Beacon Capital Partners, Inc.
on July 1, 1998.
The accompanying Historical Summary has been prepared in accordance with
Rule 3-14 of Regulations S-X of the Securities and Exchange Commission for
inclusion in the Registration Statement on Form S-11 of Beacon Capital
Partners, Inc. Accordingly, certain historical expenses which may not be
comparable to the expenses expected to be incurred in the proposed future
operations of The Breunig Portfolio have been excluded. Excluded expenses
consist of depreciation and amortization, and interest not directly related
to the future operations of the Breunig Portfolio.
During 1997, Breunig Commercial purchased Park North Business Center and
Forest Abrams Place. These properties were owned for three months and six
months of 1997, respectively. Partial year financial information is
presented with the Historical Summary for the two properties. In addition,
On July 1, 1998, Breunig acquired one additional property referred to as Bank
One LBJ. No financial information with respect to this property is presented
with the accompanying Historical Summary. Inclusion of these three
properties for the months prior to their acquisition in the accompanying
Historical Summary would not have resulted in a material change to the
amounts presented.
Rental income is recognized on a straight line basis over the term of the
related leases.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
<PAGE>
2. LEASES
Minimum future rentals under operating leases with The Breunig Portfolio
in effect at December 31, 1997 are summarized as follows:
Year
----
1998..................................... $10,848
1999..................................... 8,967
2000..................................... 6,634
2001..................................... 4,661
2002..................................... 3,255
Thereafter............................... 5,502
-------
$39,867
-------
-------
Terms of the leases range from one to fifteen years and provide for
operating expense reimbursement, real estate tax escalations and, in certain
cases, increases in minimum rent.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Beacon Capital Partners, Inc.
We have audited the accompanying Historical Summary of Gross
Income and Direct Operating Expenses (the "Historical Summary") for
Technology Square and The Draper Building owned by Asahi Seimei-Prudential
Associates, Number Three for the year ended December 31, 1997. This
Historical Summary is the responsibility of Technology Square and The Draper
Building's management. 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 basis of accounting 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 for inclusion in the Registration Statement on Form S-11 of Beacon
Capital Partners, Inc. as described in Note 1, and is not intended to be a
complete presentation of Technology Square and The Draper Building's revenues
and expenses.
In our opinion, the Historical Summary referred to above presents fairly,
in all material aspects, the gross income and direct operating expenses
described in Note 1 of Technology Square and the The Draper Building for the
year ended December 31, 1997, in conformity with generally accepted
accounting principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
May 22, 1998
<PAGE>
HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
FOR TECHNOLOGY SQUARE AND THE DRAPER BUILDING
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1998 TO
JUNE 23, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Gross income
Rental income......................................... $3,992 $ 8,164
Reimbursement of operating expenses and taxes......... 954 2,077
Other income.......................................... -- 58
------- -------
Total gross income........................................ 4,946 10,299
------- -------
Direct operating expenses
Property operating.................................... 943 1,962
Real estate taxes..................................... 955 1,929
------- -------
Total direct operating expenses........................... 1,898 3,891
------- -------
Gross income in excess of direct operating expenses... $3,048 $6,408
------- -------
------- -------
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO HISTORICAL SUMMARY OF GROSS INCOME
AND DIRECT OPERATING EXPENSES
FOR TECHNOLOGY SQUARE AND THE DRAPER BUILDING
(DOLLARS IN THOUSANDS)
1. GENERAL INFORMATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Asahi Seimei-Prudential Associates, Number Three (the "Joint Venture")
owns five office buildings, two garages leased to two tenants and land with a
surface parking lot located in Cambridge, Massachusetts (collectively,
"Technology Square and The Draper Building"). Asahi International Ltd. and
The Prudential Insurance Company of America (""Prudential") are the Joint
Venture partners and each have a 50% interest in the Joint Venture.
The accompanying Historical Summary has been prepared in accordance with
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission for
inclusion in the Registration Statement on Form S-11 of Beacon Capital
Partners, Inc. Accordingly, certain historical expenses which may not be
comparable to the expenses expected to be incurred in the proposed future
operations of Technology Square and The Draper Building have been excluded.
Excluded expenses consist of depreciation and amortization, interest and
asset management costs not directly related to the future operations of
Technology Square and The Draper Building.
Rental income is recognized on a straight line basis over the term of the
related leases.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
2. LEASES
The Joint Venture, as lessor, has entered into non-cancelable operating
leases at Tecnology Square and The Draper Building. Minimum future rentals
under the leases in effect at December 31, 1997 are summarized as follows:
Year
----
1998..................................... $ 8,309
1999..................................... 5,616
2000..................................... 2,923
2001..................................... 2,436
-------
$19,284
-------
The leases at Technology Square are generally for a term greater than one
year and no more than five years and provide for operating expense
reimbursement, real estate tax escalations and, in certain cases, increases
in minimum rent. The Draper Building is leased on a triple net basis to a
single tenant on a long-term lease through 2001, with extension of options
through October 2051. Approximately 99% of Technology Square and The Draper
Building's revenue at December 31, 1997 was derived from three tenants.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The accompanying unaudited pro forma condensed consolidated balance sheet
as of September 30, 1999 has been prepared to reflect the additional funding,
pending funding, and transfer of joint venture and other investments, and the
purchase of preferred stock subsequent to September 30, 1999, as if such
transactions had occurred on September 30, 1999. The accompanying unaudited
pro forma condensed consolidated statements of operations have been prepared
to reflect the acquisition of properties and the funding and pending funding
of joint venture and other investments as if such transactions had occurred
at the beginning of the periods presented.
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. The pro forma information should be read in
conjunction with the Company's historical financial statements and notes
thereto.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Forma Consolidated
Historical (A) Adjustments (B) Pro Forma
-------------- --------------- ------------
<S> <C> <C> <C>
ASSETS:
Total real estate, net................................ $250,211 $ -- $250,211
Deferred financing and leasing costs, net............. 2,716 -- 2,716
Cash and cash equivalents............................. 37,908 14,619 52,527
Accounts receivable, net.............................. 2,228 -- 2,228
Other assets.......................................... 4,333 -- 4,333
Investments in joint ventures and corporations(C)..... 144,801 20,086 164,887
Other investments..................................... 34,705 (34,705) --
-------- --------- --------
Total assets...................................... $476,902 $ -- $476,902
======== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable.............................. $ 18,790 $ -- $ 18,790
Note payable-interim financing...................... 100,000 100,000
Accounts payable and accrued expenses............... 10,498 -- 10,498
-------- -------- --------
Total liabilities................................. 129,288 -- 129,288
Minority interest in consolidated partnership(D)...... 43,832 -- 43,832
Stockholders' equity.................................. 303,782 -- 303,782
-------- -------- --------
Total liabilities and stockholders' equity........ $476,902 -- $476,902
======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
(UNAUDITED)
(DOLLARS IN THOUSANDS)
(A) Reflects the historical consolidated balance sheet of Beacon Capital
Partners, Inc. as of September 30, 1999. Beacon Capital Parnters, Inc.
and its majority-owned subsidiary, Beacon Capital Partners, L.P., are
collectively referred to as the "Company".
(B) Reflects (1) the pending additional funding of an investment in a joint
venture known as Mathilda Research Centre, (2) the pending additional
funding of an investment in a joint venture known as Millennium Tower,
(3) the transfer of 215 Fremont St. to Beacon Capital Strategic
Partners, L.P., (4) the additional funding of an investment in
Cypress Communications, Inc. ("Cypress"), and (5) the purchase of
approximately 30,480 units of the Voting Trust which holds Series B
Convertible Preferred Stock of Wyndham International, Inc. ("Series B
Preferred"), all subsequent to September 30, 1999. The followng is a
summary of the pro forma as if they occurred on September 30, 1999:
<TABLE>
<CAPTION>
MATHILDA
RESEARCH MILLENNIUM 215 FREMONT SERIES B
CENTRE TOWER ST. CYPRESS PREFERRED TOTAL
-------- ---------- ----------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Total real estate, net........... $ -- $ -- $ -- $ -- $ -- $ --
Cash and cash equivalents........ (1,500) (9,600) 34,705 (6,000) (2,986) 14,619
Investments in joint ventures
and corporations............... 1,500 9,600 -- 6,000 2,986 20,086
Other investments................ (34,705) -- -- (34,705)
-------- ---------- ---------- -------- -------- ---------
Total assets $ -- $ -- $ -- $ -- $ -- $ --
-------- ---------- ---------- -------- -------- ---------
-------- ---------- ---------- -------- -------- ---------
</TABLE>
(C) The consolidated pro forma balance includes the Company's investment in
Series B Preferred. As more fully described in Note 3 to the Company's
September 30, 1999 Consolidated Financial Statements, this investment
may be redeemed, transferred or distributed. No pro forma effect has
been given to this transaction pending further developments.
(D) Minority interest in consolidated partnership represents an 11.6%
minority interest in the Operating Partnership.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
PROPERTY OTHER CONSOLIDATED
HISTORICAL (A) ACQUISITION (B) ADJUSTMENTS (C) PRO FORMA
-------------- --------------- --------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income ..................................... $15,741 $1,632 $ -- $17,373
Reimbursement of operating expenses and
real estate taxes ............................... 1,844 -- -- 1,844
Equity in earnings of joint venture ............... 3,521 -- -- 3,521
Interest and dividend income ...................... 5,413 -- (1,405) 4,008
Other income ...................................... 1,258 47 -- 1,305
------- ------ ------- -------
Total revenues ................................. 27,777 1,679 (1,405) 28,051
------- ------ ------- -------
Expenses:
Property operating ................................ 4,298 231 -- 4,529
Real estate taxes ................................. 3,509 163 -- 3,672
General and administrative ........................ 7,204 -- -- 7,204
Interest expense .................................. 1,670 -- -- 1,670
Depreciation and amortization ..................... 4,116 276 -- 4,392
------- ------ ------- -------
Total expenses ................................. 20,797 670 -- 21,467
Income before minority interest ..................... 6,980 1,009 (1,405) 6,584
Minority interest in consolidated partnership (D) ... (810) (117) 163 (764)
------- ------ ------- -------
Net income .......................................... $ 6,170 $ 892 $(1,242) $ 5,820
------- ------ ------- -------
------- ------ ------- -------
Net income per share--basic and diluted ............. $ 0.29 $ 0.28
------- -------
------- -------
Weighted average number of common shares
outstanding (in thousands) ........................ 20,974 20,974
------- -------
------- -------
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
PROPERTY OTHER CONSOLIDATED
HISTORICAL(A) ACQUISITION(B) ADJUSTMENTS(C) PRO FORMA
------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income ..................................... $10,643 $12,736 $ -- $23,379
Reimbursement of operating expenses and
real estate taxes ............................... 1,721 1,320 -- 3,041
Equity in earnings of joint venture ............... 3,203 1,414 -- 4,617
Interest and dividend income ...................... 10,736 -- (6,370) 4,366
Other income ...................................... 233 233 -- 466
------- ------ ------- -------
Total revenues ................................. 26,536 15,703 (6,370) 35,869
------- ------ ------- -------
Expenses:
Property operating ................................ 3,366 3,895 -- 7,261
Real estate taxes ................................. 1,863 2,070 -- 3,933
General and administrative ........................ 8,419 -- -- 8,419
Interest expense .................................. 906 979 -- 1,885
Depreciation and amortization ..................... 2,210 2,537 -- 4,747
------- ------ ------- -------
Total expenses ................................. 16,764 9,481 -- 26,245
------- ------ ------- -------
Income before minority interest ..................... 9,772 6,222 (6,370) 9,624
Minority interest in consolidated partnership (D) ... (718) (722) 324 (1,116)
------- ------ ------- -------
Net income .......................................... $ 9,054 $5,500 $(6,046) $ 8,508
------- ------ ------- -------
------- ------ ------- -------
Net income per share--basic and diluted ............. $ 0.44 $ 0.41
------- -------
------- -------
Weighted average number of common shares
outstanding (in thousands) ........................ 20,766 20,974
------- -------
------- -------
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BEACON CAPITAL PARTNERS, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
AND
FOR THE YEAR ENDED DECEMBER 31, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
(A) Reflects the historical condensed consolidated statement of operations of
the Company for the nine months ended September 30, 1999 and the period
from January 21, 1998 (inception) through December 31, 1998. The Company
was not in existence prior to January 21, 1998.
(B) Reflects the acquisitions of The Athenaeum Portfolio, Technology Square
and The Draper Building, the Dallas Office and Industrial Portfolio and
the Fort Point Place based on the historical operations of such
properties for periods prior to acquisition by the Company. The
Athenaeum Portfolio acquisition reflects the formation by the Company of
a 50% joint venture with PW Acquisitions IX, LLC, an affiliate of
PaineWebber, subsequent to the closing of the acquisition of The Athenaeum
Portfolio as if the formation of the joint venture had occurred on January
1, 1998. The joint venture is being accounted for using the equity method
of accounting and, accordingly, 50% of the historical operations of The
Athenaeum Portfolio, adjusted for depreciation using an asset life of 40
years, and an allocation between land and buildings of $35,773 and
$159,756, respectively, has been reflected in equity in earnings of joint
venture. The other acquired properties are owned or planned to be owned
by the Company. The Technology Square and The Draper Building acquisition
also reflects estimated depreciation based upon an asset life of 40 years,
and an allocation between land and buildings of $36,162 and $87,150,
respectively. Dallas Office and Industrial Portfolio acquisition also
reflects estimated depreciation based upon an asset life of 40 years, and
an allocation between land and buildings of $14,932 and $77,250,
respectively. The Fort Point Place acquisition also reflects estimated
depreciation based upon an asset life of 40 years, and an allocation
between land and buildings of $3,645 and $20,665, respectively.
(C) Reflects interest income reduction attributed to cash used to fund the
acquisitions and investments in The Athenaeum Portfolio, Technology
Square and The Draper Building, Dallas Office and Industrial Portfolio,
Mathilda Research Centre, Millennium Tower, Fort Pint Place, and Cypress
and the interest earned from the loan receivable from the joint venture
which holds The Athenaeum Portfolio properties. No pro forma income
statement effect has been given to the Series B Preferred or to interest
on notes payable-interim financing since such amounts are not expected to
have a continuing impact on operating results.
(D) Minority interest in consolidated partnership represents an 11.6%
minority interest in the Operating Partnership.
