SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended JUNE 30, 1995 COMMISSION FILE NUMBER 1-8927
COPLEY PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-2866555
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
399 BOYLSTON STREET, 13TH FL.
BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(617) 578-1200
(Former Name, former address and former fiscal year if changed since last
report.)
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 twelve 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______
PAGE 1 OF 21 PAGES. SEE EXHIBIT INDEX ON PAGE 19
As of August 10, 1995, there were issued and outstanding 3,584,350 shares
of Common Stock, $1.00 par value, and one share of Class A Common Stock, $1.00
par value.
<PAGE>
COPLEY PROPERTIES, INC.
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART I
FINANCIAL INFORMATION
Page(s)
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 12
<PAGE>
COPLEY PROPERTIES, INC.
________________________________________________________________________
Consolidated Balance Sheets (Unaudited)
________________________________________________________________________
June 30, December 31,
1995 1994
------------ ------------
ASSETS
Real estate investments (Notes 4 and 5):
Property, net $ 78,381,110 $ 88,795,709
Joint ventures 927,625 1,037,178
Loans to joint ventures 4,270,644 5,036,792
Ground lease (Note 4) - 1,187,000
Notes receivable 767,676 824,077
Investment income receivable 263,265 681,356
---------- ----------
Total real estate investments 84,610,320 97,562,112
Cash and cash equivalents 5,648,379 1,491,554
Other Assets (Note 8) 106,750 -
Deferred financing costs (Note 7) - 486,366
---------- ----------
Total assets $ 90,365,449 $ 99,540,032
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Losses of joint ventures
in excess of investment $ 3,110,003 $ 3,261,463
Accounts payable and other liabilities 718,048 436,478
Deposit on sale of property (Note 4) 1,290,000 -
Accrued management advisory fees 2,557,398 2,491,445
Line of credit borrowings - 3,500,000
Mortgage notes payable (Notes 4 and 5) 42,713,668 49,374,668
Dividend payable 967,754 -
---------- ----------
Total liabilities 51,356,871 59,064,054
---------- ----------
SHAREHOLDERS' EQUITY:
Common stock, $1.00 par value;
authorized 20,000,000 shares;
issued 4,007,500 shares 4,007,500 4,007,500
Additional paid-in capital 69,625,444 69,625,444
Treasury stock; 423,150 shares
of common stock, at cost (4,895,726) (4,895,726)
Cumulative deficit (29,728,641) (28,261,241)
Class A common stock 1 1
---------- ----------
Total shareholders' equity 39,008,578 40,475,978
---------- ----------
Total liabilities and
shareholders' equity $ 90,365,449 $ 99,540,032
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
COPLEY PROPERTIES, INC.
Consolidated Statements of Operations and Cumulative Deficit (Unaudited)
<CAPTION>
Quarter Ended Quarter Ended Six Months ended Six Months ended
June 30, 1995 June 30, 1994 June 30, 1995 June 30, 1994
------------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY (Note 6):
Property operations, net $ 389,183 $ 468,160 $ 782,965 $ 668,587
Share of joint venture earnings 215,801 3,354 352,451 282,424
--------- -------- --------- --------
Total real estate operations 604,984 471,514 1,135,416 951,011
Gain on sale of property 757,776 - 757,776 -
--------- ------- --------- -------
Total real estate activity 1,362,760 471,514 1,893,192 951,011
Interest on short-term investments
and cash equivalents 2,612 28,561 4,604 53,152
--------- ------- --------- ---------
Total investment activity 1,365,372 500,075 1,897,796 1,004,163
--------- ------- --------- ---------
PORTFOLIO EXPENSES:
Management advisory fee (131,108) (162,626) (280,345) (382,656)
General and administrative (457,109) (134,374) (555,893) (221,662)
Interest expense (69,130) (44,654) (163,907) (58,738)
Write-off of deferred
financing costs (Note 7) - - (501,227) -
--------- --------- ----------- ---------
(657,347) (341,654) (1,501,372) (663,056)
--------- --------- ----------- ---------
NET INCOME 708,025 158,421 396,424 341,107
Common stock dividends (967,754) (788,544) (1,863,824) (1,577,088)
CUMULATIVE DEFICIT:
Beginning of period (29,468,912) (24,960,925) (28,261,241) (24,355,067)
------------ ------------ ------------ ------------
End of period $ (29,728,641) $ (25,591,048) $ (29,728,641) $ (25,591,048)
============ ============ ============ ============
PER SHARE DATA:
Net Income $ .20 $ .04 $ .11 $ .10
============ ============ ============ ============
Dividends $ .27 $ .22 $ .52 $ .44
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
COPLEY PROPERTIES, INC.
Consolidated Statements of Cash Flows (Unaudited)
Six Months ended June 30,
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 396,424 $ 341,107
Adjustments to reconcile net income to net
cash provided by operating activities:
Equity in joint venture earnings (287,029) (228,133)
Cash distributions from joint ventures 391,520 983,263
Property depreciation and amortization 2,032,303 1,984,144
Write-off of deferred financing costs 501,227 -
Gain on sale of property (757,776) -
Increase in investment income receivable (74,665) -
Increase in deferred leasing commissions (278,511 (278,453)
Increase in property working capital (207,694) (14,254)
Increase in accounts payable and
accrued management advisory fees 423,151 84,897
Other, net (6,750) (18,705)
--------- ---------
Net cash provided by operating
activities 2,132,200 2,853,866
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in loans to joint ventures (6,436) (28,225)
Investment in Property (1,051,967) (2,931,327)
Decrease in short-term investments, net - 1,967,451
Investment in joint ventures (18,809) -
Proceeds from sale of property 12,982,793 -
Decrease in notes receivable 56,401 2,389,748
Increase in other assets (100,000) (93,985)
Deposit received on sale of property 1,290,000 -
---------- ---------
Net cash provided by investing activities 13,151,982 1,303,662
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in line of credit borrowings, net (3,500,000) 4,773,679
Proceeds from third-party mortgage note 3,250,000 -
Principal payments on mortgage notes (9,755,780) (6,687,427)
Dividends paid (896,070) (788,544)
Financing costs paid (225,507) -
------------ -----------
Net cash used in financing activities (11,127,357) (2,702,292)
------------ -----------
Net increase in cash and cash
equivalents 4,156,825 1,455,236
CASH AND CASH EQUIVALENTS:
Beginning of period 1,491,554 1,901,790
----------- -----------
End of period $ 5,648,379 $ 3,357,026
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
COPLEY PROPERTIES, INC.
Notes to Consolidated Financial Statements (Unaudited)
1 GENERAL
These financial statements have been prepared by Copley Properties, Inc. (the
"Company") without audit and reflect all normal and required adjustments which
are, in the opinion of management, necessary to fairly present the interim
results. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto included
in the Company's audited financial statements for the year ended December 31,
1994.
2 ORGANIZATION AND BUSINESS
Copley Properties, Inc., a Delaware corporation, was incorporated in May 1985
and operates as a qualified real estate investment trust under applicable
provisions of the Internal Revenue Code of 1986, as amended. The Company
acquires, develops, operates and owns industrial real estate. The Company
currently owns and operates, either directly or through joint ventures, 16
properties totaling over 2.8 million square feet of net rentable area (including
the property purchased in July 1995 as described below). Copley Real Estate
Advisors, Inc. (the "Advisor") provides investment management and administrative
services to the Company. The Advisor is an indirect wholly-owned subsidiary of
New England Investment Companies, L.P. ("NEIC"), a publicly traded limited
partnership. New England Mutual Life Insurance Company is the principal
unitholder of NEIC.
3 LINE OF CREDIT
The Company has an unsecured line of credit agreement with a bank which expires
on September 1, 1995. Under its terms, the Company can borrow up to $5,000,000
at the prime rate of interest or LIBOR plus 1.5%. As of June 30, 1995, the
Company had no borrowings under the line of credit. The Company is currently
negotiating an extension of the line of credit.
4 RESTRUCTURINGS, FINANCINGS AND SALES
Restructurings
On March 30, 1995, the restructuring of the ownership of three partnerships
that were formed to own certain of the Park North Business Center properties was
completed and transfer of 100% ownership of the properties to the Company
occurred. This restructuring does not impact the accompanying consolidated
financial statements as the Company obtained 100% economic control of the
entities at the beginning of 1994. As discussed further under "Sales," the
property was sold on June 30, 1995.
<PAGE>
Financings
A mortgage note payable to CIGNA, secured by the University Business Center
property, with a $13,000,000 outstanding principal balance at December 31, 1994,
matured and was refinanced in February 1995. A principal paydown of $3,500,000
was made, the interest rate was reduced to 9.06% and the maturity date was
extended to April 1, 2000. The modified note requires principal amortization
payments based on a 20-year amortization schedule with the remaining balance due
at maturity. The Company obtained funds for the principal paydown from a short-
term mortgage loan secured by the Peachtree Corners Distribution Center.
In May 1995, the Company entered into an agreement to extend the maturity of
the mortgage notes payable to Wells Fargo Realty Advisors which were secured by
certain properties included in the Park North Business Center investment. The
maturity date of the notes was extended from May 31, 1995 to June 30,1995 and
the notes were paid in full with proceeds from the sale of the Park North
Business Center discussed below.
In June 1995, the Company entered into an agreement to extend the maturity of a
mortgage note payable to Wells Fargo Bank which is secured by the Huntwood
Associates property from June 15, 1995 to January 15, 1997 on the same terms and
conditions as the original financing.
Sales
On March 28, 1995, the Company signed a purchase and sale agreement to sell all
of its interests and rights, including its ground lease position, related to the
Park North Business Center investment for approximately $18,500,000. The
closing occurred on June 30, 1995. Proceeds from the sale were used to pay off
the mortgage notes payable to Wells Fargo Realty Advisors discussed above and
the revenue bonds which were owed by the ground lessee and guaranteed by the
Company. After settlement of the debt and payment of selling expenses, the
Company received net cash proceeds of approximately $6,825,000, including a
deposit of $125,000 received in March 1995. The proceeds from this sale were
used to purchase the Kingsview Industrial Center property (see Note 8) and to
pay off the Company's line of credit. The Company recognized a gain of
approximately $758,000 on the sale of this investment.
<PAGE>
Also on March 28, 1995, the Company signed a purchase and sale agreement, with
the same buyer, to sell its interest in the Peachtree Corners Distribution
Center investment for a purchase price of approximately $10,000,000. It is
anticipated that the closing will occur by November 30, 1995. In addition, the
buyer loaned the Company $3,250,000 in February 1995. The loan is secured by a
first mortgage on the Peachtree Corners Distribution Center, bears interest at
the rate of 10% per annum payable monthly in arrears, may be prepaid at any time
without penalty, and matures November 30, 1995. In July 1995, the Company made
a payment to reduce the outstanding principal by $1,000,000. In June 1995,
coincident with the closing of the Park North Business Center sale, the buyer
made an additional deposit of $1,165,000. Upon consummation of the Peachtree
Corners Distribution Center sale, the Company expects to have received net cash
proceeds of approximately $7,750,000, which includes an initial deposit of
$125,000 received in March 1995 and the additional deposit received in June
1995. The Company also expects to recognize a gain on the sale of this
investment.
<PAGE>
5 REAL ESTATE ASSETS AND LIABILITIES
The following is a summary of the assets and liabilities underlying the
Company's real estate investments:
June 30, December 31,
1995 1994
----------- -----------
PROPERTY
Land $ 21,617,254 $ 24,018,575
Buildings and improvements 58,445,145 66,402,879
Accumulated depreciation (5,741,558) (5,079,353)
Deferred leasing costs and other assets, net 1,462,666 1,487,678
Minority interest 1,492,236 1,471,483
---------- ----------
Total real estate assets 77,275,743 88,301,262
Accounts receivable 1,965,420 2,254,603
Accounts payable and other liabilities (860,053) (1,760,156)
---------- ----------
$ 78,381,110 $ 88,795,709
========== ==========
Mortgage notes payable to third-parties $ 42,713,668 $ 49,374,668
========== ==========
JOINT VENTURES
Land $ 8,246,048 $ 8,246,048
Buildings and improvements 35,602,410 35,542,264
Accumulated depreciation (13,203,424) (12,370,021)
Cash 300,833 346,176
Other, net 3,459,049 3,521,924
---------- ----------
Total assets 34,404,916 35,286,391
---------- ----------
Mortgage notes payable to third-parties 31,851,967 32,127,307
Other 1,166,802 1,913,431
---------- ----------
Total liabilities 33,018,769 34,040,738
---------- ----------
Net assets $ 1,386,147 $ 1,245,653
========== ==========
Company's share:
Loans to joint ventures $ 4,270,644 $ 5,036,792
Capital (2,182,378) (2,224,285)
---------- ----------
$ 2,088,266 $ 2,812,507
========== ==========
<PAGE>
6 RESULTS OF REAL ESTATE INVESTMENTS
Operations
The following is a summary of the operating results of the properties
underlying the Company's real estate investments:
Six Months Ended June 30,
1995 1994
----------- ---------
PROPERTY
Rentals $ 6,697,930 $ 6,606,758
Operating expenses (1,499,512) (1,528,595)
Interest expense (2,323,903) (2,372,846)
Depreciation and amortization (2,032,303) (1,981,707)
Minority interest (59,247) (55,023)
----------- -----------
$ 782,965 $ 668,587
=========== ===========
JOINT VENTURES
Rentals $ 3,385,973 $ 3,274,921
Operating expenses (682,751) (507,237)
Interest expense (1,472,038) (1,468,759)
Depreciation and amortization (933,954) (937,155)
----------- -----------
$ 297,230 $ 361,770
=========== ===========
Company share:
Interest on loans to joint ventures $ 65,422 $ 54,291
Equity in net income 287,029 228,133
----------- -----------
$ 352,451 $ 282,424
=========== ===========
7 COSTS ASSOCIATED WITH PROPOSED EQUITY OFFERING AND AN INCREASED LINE OF
CREDIT
In late 1994, the Company commenced the marketing of additional equity on a
private placement basis and incurred $501,227 in Deferred Financing Costs in
connection with pursuing the private placement and arranging for an increased
line of credit, which was contingent on additional equity. To date, discussions
with potential investors have not produced agreement on the terms of an equity
investment. Because of the increased uncertainty of a successful equity
offering, the Company wrote off the Deferred Financing Costs in the quarter
ended March 31, 1995.
<PAGE>
8 SUBSEQUENT EVENTS
On July 14, 1995, the Company purchased an industrial building having
approximately 83,000 square feet of rentable space. The property is located in
Carson, California and is referred to as Kingsview Industrial Center. The total
purchase price was approximately $3,000,000. Included in other assets at June
30, 1995 is $100,000 representing a deposit on the purchase.
In July 1995, the Company entered into an agreement to extend the maturity of
the mortgage notes payable to Massachusetts Mutual Life Insurance Company which
are secured by the Huntwood Associates and Wiegman Associates properties from
January 1, 1996 to June 1, 1996 on the same terms and conditions as the original
financings.
<PAGE>
COPLEY PROPERTIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's assets consist primarily of investments in real estate. Several
properties are owned directly by the Company; others are owned by joint ventures
in which the Company is a general partner. The Company's investments also
include secured loans to certain joint ventures. As a general partner in its
joint venture investments, the Company is obligated to fund its proportionate
share of operating deficits.
At June 30, 1995, the Company had cash and cash equivalents totaling
$5,648,379, of which approximately $4,000,000 was used during July 1995 to
purchase an industrial building in Carson, California and to reduce the
principal balance on the mortgage note encumbering the Peachtree Corners
Distribution Center. The remaining cash will be used to fund working capital
needs and reduce other borrowings. During the second quarter of 1995, the
Company entered into an agreement to extend its $5,000,000 bank line of credit
for three months to September 1, 1995. The Company is currently negotiating
another short term extension of the line of credit.
As more fully discussed under "Results of Operations" below, cash flow from
operations was $1,016,330 for the second quarter of 1995 compared to $1,131,464
for the second quarter of 1994. For the six months ended June 30, 1995 and
1994, cash flow from operations was $2,132,200 and $2,853,866, respectively.
The Company intends to distribute to its shareholders at least 95% of taxable
income so as to maintain its qualification as a real estate investment trust
under the Internal Revenue Code of 1986, as amended. Dividends will continue to
be paid from cash generated by operations, which usually exceeds taxable income.
A mortgage note payable, secured by the University Business Center property,
matured and was refinanced in February 1995. A principal paydown of $3,500,000
was made in conjunction with the refinancing. The funds for the paydown were
primarily obtained from a short-term mortgage loan of $3,250,000 secured by the
Peachtree Corners Distribution Center.
In May 1995, the Company entered into an agreement to extend the maturity of
the mortgage notes payable to Wells Fargo Realty Advisors which were secured by
certain properties included in the Park North Business Center investment. The
maturity date of the notes was extended from May 31, 1995 to June 30,1995 and
the notes were paid in full with proceeds from the sale of the Park North
Business Center discussed below.
In June 1995, the Company entered into an agreement to extend the maturity of a
mortgage note payable to Wells Fargo Bank which is secured by the Huntwood
Associates property from June 15, 1995 to January 15, 1997 on the same terms and
conditions as the original financing.
In July 1995, the Company entered into an agreement to extend the maturity of
the mortgage notes payable to Massachusetts Mutual Life Insurance Company which
are secured by the Huntwood Associates and Wiegman Associates properties from
January 1, 1996 to June 1, 1996 on the same terms and conditions as the original
financings.
<PAGE>
In late 1994, the Company commenced the marketing of additional equity on a
private placement basis and incurred $501,227 in Deferred Financing Costs in
connection with pursuing the private placement and arranging for an increased
line of credit, which was contingent on additional equity. To date, discussions
with potential investors have not produced agreement on the terms of an equity
investment. Because of the increased uncertainty of a successful equity
offering, the Company wrote-off the Deferred Financing Costs in the quarter
ended March 31, 1995.
During the second quarter of 1995, the Board of Directors determined that
further consideration of various strategic alternatives aimed at maximizing
shareholder value was appropriate and retained Morgan Stanley & Co. Incorporated
("Morgan Stanley") to identify and evaluate various alternatives which may be
available to the Company. Included in general and administrative expenses
through June 30, 1995 is approximately $133,000 of fees and expenses payable to
Morgan Stanley in connection with this evaluation.
The carrying value of real estate investments in the consolidated financial
statements is reduced to net realizable value, if lower, which is measured by
the expected undiscounted future cash flows of the investment. Carrying value,
however, may be greater or less than current appraised value. At June 30, 1995,
the net excess appraised value over carrying value for all of the Company's real
estate assets and joint venture investments was $14,500,000. Investments with
excess appraised value aggregated approximately $19,000,000 more than their
carrying values, and investments with excess carrying value aggregated
approximately $4,500,000 more than their appraised values. The current
appraised value of real estate investments has been estimated by management
based on a combination of traditional appraisal approaches. Because of the
subjectivity inherent in the valuation process, the estimated current appraised
value of real estate may differ significantly from that which could be realized
if the real estate were offered for sale in the marketplace.
<PAGE>
RESULTS OF OPERATIONS
Sales and Acquisitions
During the first quarter of 1995, the Company signed purchase and sale
agreements to sell its rights and interests in the Park North Business Center
and Peachtree Corners Distribution Center investments for $18,500,000 and
$10,000,000, respectively The buyer of the properties paid a deposit of
$250,000 and loaned the Company $3,250,000 in exchange for a mortgage note
payable secured by the Peachtree Corners Distribution Center. On June 30, 1995,
the buyer deposited an additional $1,165,000 on the Peachtree Corners
Distribution Center. In July 1995, the Company made a payment of $1,000,000,
reducing the mortgage loan on the Peachtree Corners Distribution Center to
$2,250,000.
On June 30, 1995, the sale of the Park North Business Center closed. After
settlement of the debt obligations encumbering the Park North Business Center
properties and payment of selling expenses and other deductions, the Company
received cash of approximately $6,825,000, including $125,000 of the initial
deposit discussed above, and recognized a gain of approximately $758,000. Net
proceeds from the sale were used to pay off the outstanding balance on the line
of credit and to purchase Kingsview Industrial Center, an industrial building in
Carson, California during July 1995.
The Peachtree Corners Distribution Center sale is expected to close by November
30, 1995. Upon closing, the remaining principal on the mortgage note
encumbering the property will be paid and the Company expects to receive net
cash proceeds of approximately $7,750,000, which includes $125,000 of the
initial deposit and the $1,165,000 additional deposit discussed above. The
Company also expects to recognize a gain on the sale of this investment.
Restructurings
On March 30, 1995, the restructuring of the ownership of three partnerships
that were formed to own a portion of the Park North Business Center investment
was completed and transfer of 100% ownership of the property to the Company
occurred. This restructuring transaction did not affect net income (loss) or
shareholders' equity. As discussed above, the Company sold its interest in this
investment in June 1995.
The Company continues to seek opportunities to restructure its remaining joint
venture investments to align its legal ownership with the economic realities of
each venture and to obtain operational control over the venture assets.
<PAGE>
Investment Performance
For the quarter ended June 30, income from real estate operations was $604,984
and $471,514 in 1995 and 1994, respectively. The improvement from prior year is
primarily the result of increased rental income at Columbia Place from a lease
transaction completed in the second half of 1994, lower interest expense due to
debt reductions at certain properties, and increased rental revenue at certain
properties due to higher occupancy rates. The overall leased percentage for the
portfolio was 97% at June 30, 1995, up from 93% a year earlier. These
improvements were partially offset by the expiration in the first quarter of
1995 of a lease representing approximately one-half the rentable space at the
Los Angeles Corporate Center.
For the six months ended June 30, income from real estate operations increased
by $184,405 from 1994 to 1995. This increase is also due to the Columbia Place
lease transaction, lower interest expense, and increased occupancy as discussed
above. In addition to the vacancy at the Los Angeles Corporate Center, 1995
results through June 30 have been negatively impacted by a provision for bad
debts related to a tenant in arrears at the Dominguez Properties which was
recorded in the first quarter.
Cash flow from operations was $2,132,200 for the six months ended June 30, 1995
compared to $2,853,866 for the same period in 1994. The decrease is due
primarily to the following three factors: 1) under the terms of the new lease
at Columbia Place, cash flow from rent in 1995 is less than in previous years,
2) the lease expiration at the Los Angeles Corporate Center resulted in a loss
of cash flow from rental revenue, and 3) cash from operations in the first
quarter of 1994 benefited from the realization of cash upon conversion of the
Park North Business Center property from a joint venture accounted for under the
equity method to a wholly-owned property accounted for on a consolidated basis.
<PAGE>
Portfolio Expenses
General and administrative expenses for the quarter ended June 30, 1995
increased by $322,735 from the same period in 1994. This increase is primarily
the result of certain costs incurred by the Company related to its consideration
of various strategic alternatives aimed at maximizing shareholder value.
Included in general and administrative expenses for the second quarter of 1995
is approximately $134,000 in legal fees, $133,000 of investment advisory fees,
and $56,000 of fees paid to the Board of Directors due to increased frequency of
meetings and an increase in the per meeting fee payable to each director which
became effective during the second quarter of 1995.
Interest expense for the second quarter was $69,130 and $44,654 in 1995 and
1994, respectively. The increase in interest expense over the prior year is the
result of increased borrowing under the Company's line of credit.
Portfolio expenses increased in the first six months of 1995 compared to 1994,
primarily due to the legal fees, investment advisory fees, and directors'
compensation expense discussed above and the $501,227 write-off of deferred
financing costs during the first quarter. Management advisory fees for the
period decreased by $102,311 in comparison to the comparable period in 1994
which is consistent with the decrease in cash flow from operations upon which
the fee is based. Interest expense through June 30, 1995 increased over the
same period in 1994 as a result of increased borrowings on the Company's line of
credit.
<PAGE>
COPLEY PROPERTIES, INC.
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART II
OTHER INFORMATION
Item 4. The annual meeting of the stockholders of Registrant was held on
June 13, 1995.
There was one item voted on by the stockholders at the meeting. The
results of the voting on this item was as follows:
Election of Directors of the Company
Number of Shares
For Withheld Authority
Stephen H. Anthony 2,336,878 470,614
M. Colyer Crum 2,329,225 478,267
R. John Griefen 2,328,976 478,516
William F. McCall, Jr. 2,330,226 477,266
Joseph W. O'Connor 2,336,878 470,614
Joseph F. Turley 2,334,775 472,717
Steven E. Wheeler 2,329,226 478,266
<PAGE>
COPLEY PROPERTIES, INC.
FORM 10-Q
FOR QUARTER ENDED JUNE 30, 1995
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits: See Exhibit Index on page 19.
b. Reports on Form 8-K: No reports on Form 8-K were filed during
the quarter ended June 30, 1995.
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT PAGE NUMBER
27 Financial Data Schedule 20
3 (i) Articles of Incorporation. Restated
Certificate of Incorporation of Copley
Properties, Inc. dated June 24, 1985;
Certificate of Amendment to the Certificate
of Incorporation of Copley Properties, Inc.
dated May 9, 1990; Certificate of Amendment
to the Restated Certificate of Incorporation of
Copley Properties, Inc. dated June 16, 1994.
3 (ii) By-Laws. By-Laws of Copley Properties, Inc.
as amended to date.
<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.
COPLEY PROPERTIES, INC.
(Registrant)
August 15, 1995 /s/ Peter P. Twining
----------------------
Peter P. Twining
Vice President and Secretary
August 15, 1995 /s/ Daniel C. Mackowiak
-------------------------
Daniel C. Mackowiak
Treasurer and Principal Financial
and Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Copley Properties, Inc., for the
period ended September 30, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 5648379
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 80062399
<DEPRECIATION> 5741558
<TOTAL-ASSETS> 90365449
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 42713668
<COMMON> 4007500
0
0
<OTHER-SE> 35001078
<TOTAL-LIABILITY-AND-EQUITY> 90365449
<SALES> 0
<TOTAL-REVENUES> 10088507
<CGS> 0
<TOTAL-COSTS> 5152546
<OTHER-EXPENSES> 836238
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3959848
<INCOME-PRETAX> 396424
<INCOME-TAX> 0
<INCOME-CONTINUING> 396424
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 396424
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
<FN>
<F1>Not applicable as the company presents an unclassified balance sheet
due to the nature of its industry.
</FN>
</TABLE>
