<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[_] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee Required)
For the fiscal year ended December 31, 1994 Commission file number 1-9524
BURNHAM PACIFIC PROPERTIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
California 33-0204162
- ---------------------------------------------- ---------------------------------
(State of other jurisdiction of incorporation) (IRS Employer Identification No.)
610 West Ash Street, San Diego, California 92101
- ---------------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
(619) 232-2001
--------------
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
- ------------------- -------------------
Common Stock, No Par Value New York Stock Exchange
8-1/2% Convertible Debenture Due 2002 New York Stock Exchange
- ------------------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the Act:
None
----
- --------------------------------------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO_____
-----
- --------------------------------------------------------------------------------
Indicated by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [X]
- --------------------------------------------------------------------------------
At March 20, 1995 the aggregate market value of the Registrant's shares of
common stock, no par value, held by non-affiliates of the Registrant was
$213,518,271.
- --------------------------------------------------------------------------------
There were 16,905,643 shares of common stock outstanding at March 20, 1995.
- --------------------------------------------------------------------------------
Part III incorporates certain provisions of the Registrant's Proxy
Statement for its 1995 Annual Meeting to be filed subsequently.
<PAGE>
ITEM 1. BUSINESS
- -----------------
Burnham Pacific Properties, Inc. (the "Corporation" or the "Registrant")
is an equity real estate investment trust which owns a portfolio of commercial
properties, primarily in Southern California. In 1987 the Corporation succeeded
a publicly-traded real estate limited partnership organized in 1963. The
Corporation operates so as to qualify as a REIT under Sections 856-860 of the
Internal Revenue Code. As a REIT, the Corporation distributes to its
shareholders substantially all of its cash flow from operations and, in any
event, at least 95% of its real estate investment trust taxable income.
The Corporation's investment objectives are to acquire, own and manage a
portfolio of income-producing commercial real estate that will provide cash for
distribution to shareholders and protect investor capital, while providing
potential for capital appreciation. The Corporation's investment focus is on
commercial properties, primarily in established locations, that are capable of
generating operating cash flow and appreciation in value through active
management, leasing, re-leasing or development of additional tenant space. The
Corporation's focus on California enables the Corporation to concentrate on the
market in which it has knowledge. However, investors should understand that
this concentration involves the risk that if the adverse economic conditions in
California, and Southern California particularly, become severe, it could have a
material adverse impact on the business and financial results of the
Corporation.
The Corporation's properties consist of 15 retail centers (which represent
approximately 64% of real estate assets at cost), 5 single tenant
office/industrial buildings (21% of cost), 2 multi-tenant office buildings (11%
of cost) and 2 other properties (4% of cost). Nineteen of these properties are
located in San Diego County, two in Orange County, two in Los Angeles County,
and one in Santa Clara County. The Corporation may diversify its geographical
focus with future property acquisitions.
Total occupancy of properties owned by the Corporation at December 31, 1993
decreased during calendar 1994 by 1% to 94%, and gross rents (on an annualized
basis) from such properties were approximately $337,000 higher. At December 31,
1994, the aggregate occupancy rate for all of the Corporation's properties was
94%.
The Corporation's investments consist of approximately 3.1 million square
feet of rentable building area, an 892 unit storage warehouse and an interest in
a 258 room hotel. The Corporation leases its properties to approximately 439
different tenants. No single tenant accounts for more than 10% of the
Corporation's current scheduled revenues. (See "Properties.")
Historically, the Corporation has incurred indebtedness and raised equity
capital to acquire properties. Based upon the Corporation's initial purchase
price for its properties of $388 million, the total outstanding debt of $141.5
million ($25.7 million of which is
2
<PAGE>
convertible into Common Stock at a price of $16 per share) represents less than
37% of the historical cost of property at December 31, 1994. At December 31,
1994, the average interest rate on the Corporation's debt was approximately
8.35%. If all convertible debt were converted, the remaining outstanding debt
would represent less than 30% of the historical cost of property and would have
an average interest rate of approximately 8.32%.
At the time of its reorganization in 1987 from partnership to corporation,
the Corporation engaged the former general partner, Burnham Investment Group,
Inc. (the "Advisor"), to serve as its advisor and to assist in the acquisition
and operation of its real estate investments. The Advisor was a wholly-owned
subsidiary of John Burnham & Company. Established in 1891, John Burnham &
Company is an independent real estate financial services company located in San
Diego, California. Its activities include real estate sales, leasing, property
management, mortgage banking, and general insurance brokerage.
On January 27, 1992, the shareholders of the Corporation voted to merge the
Advisor into the Corporation and to become self-administered. Implementation of
self-administration involved the issuance of 80,000 shares of the Corporation's
Common Stock and the termination of the advisory agreement. In connection with
the merger, the Corporation employed twelve former employees of John Burnham &
Company. The Corporation continues to engage John Burnham & Company, on a non-
exclusive basis, to provide various services, including property management and
leasing, with respect to certain of its individual properties.
Although the Corporation owns nineteen properties in San Diego County,
management estimates that it owns substantially less than 1% of the retail
shopping centers and office buildings in the county. In leasing space to
tenants, the Corporation must compete with many other property owners, some of
whom are larger and financially stronger than the Corporation.
During the first quarter of 1994, the Corporation obtained $5.0 million of
additional capacity on its secured credit facility, bringing the capacity to $30
million. During the third quarter of 1994 the Corporations $35 million non-
revolving line of credit, which was secured by the Plaza at Puente Hills, was
replaced by a seven-year mortgage note. The note, which is also secured by the
Plaza at Puente Hills, bears interest at 180 day LIBOR (London Inter Bank Offer
Rate) plus 2.10% (7.35% at December 31, 1994). The note has the one-time option
to convert the rate to a fixed rate of interest tied to seven-year treasuries
plus 2.10%. At December 31,1994, approximately $34.8 million was outstanding.
The Corporation is organized under the laws of the State of California.
Its principal executive office is located at 610 West Ash Street, Suite 1600,
San Diego, California, 92101, telephone, (619) 232-2001.
3
<PAGE>
ITEM 2. PROPERTIES
- -------------------
The following table sets forth the properties owned by the Corporation at
December 31, 1994.
<TABLE>
<CAPTION>
DECEMBER 31, 1994
-----------------------
ANNUAL
PERCENT NET SCHEDULED
OWNED BY YEAR RENTABLE RENTS* PERCENT
CORPORATION ACQUIRED SQUARE FEET (THOUSANDS) LEASED PRINCIPAL TENANTS OR USE
----------- -------- ----------- ---------- ------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
RETAIL PROPERTIES
The Plaza at Puente Hills 100% 1993 516,538 $6,557 95% IKEA, Circuit City, Theatres,
City of Industry Smart & Final, Office Depot
San Diego Factory 100% 1992 254,748 $2,803 97% Nike, Levi's, Mikas, Van-Heusen,
Outlet Center 1993 K-Mart
San Ysidro
Point Loma Plaza 100% 1989 213,289 $2,920 97% Vons, Sport Chalet,
San Diego Millers Outpost, Discovery Zone
(Point Loma)
Pacific West Outlet Ctr. 100% 1993 202,795 $3,975 100% Liz Claiborne, Nike, Levi's,
Gilroy Mikasa
Miramar Business Plaza 100% 1985 185,297 $1,597 82% Oak N Brass, Krause's
San Diego 1991 Sofa Factory
(Mira Mesa)
Mesa Shopping Center 100% 1984 142,709 $1,405 94% Lucky Stores, Thrifty Drugs,
San Diego McDonald's
(Mira Mesa)
Wiegand Plaza II 100% 1986 110,138 $1,629 100% AMC Theatres, Silo Stores,
Encinitas 1988 Union Oil, Burger King,
1990 TJ Maxx
La Mancha Shopping 98% 1988 103,904 $ 669 97% Ralphs Supermarket, Thrifty
Center Drugs, Marriott Corporation
Fullerton (Carrows)
Independence Square 100% 1983 92,300 $1,205 68% Ethan-Allen Interiors
San Diego
(Kearny Mesa)
Santee Village Square 100% 1985 79,995 $1,281 96% AMC Theatres, Po'Folks,
Santee Family Fitness
Poway Plaza 100% 1988 71,544 $ 805 91% Thrifty Drugs, Wherehouse Records
Poway Kentucky Fried Chicken
Navajo Shopping Ctr. 100% 1983 70,047 $ 834 83% Thrifty Drugs, Greentree Grocers,
San Diego 1993 Winston Tires
(Lake Murray)
Village Station 100% 1984 57,885 $ 662 90% Village Station Market,
La Mesa 1993 Round Table Pizza,
Century 21-Brandt
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
----------------------
ANNUAL
PERCENT NET SCHEDULED
OWNED BY YEAR RENTABLE RENTS* PERCENT
CORPORATION ACQUIRED SQUARE FEET (THOUSANDS) LEASED PRINCIPAL TENANTS OR USE
------------ -------- ----------- ----------- -------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ruffin Village 100% 1985 44,594 $ 592 87% Carl's Jr., Tam's Stationers
San Diego
(Kearny Mesa)
Plaza Rancho Carmel 100% 1988 36,958 $ 500 84% Graziano's Pizza,
San Diego ABC Daycare
(Carmel Mtn. Ranch)
OFFICE/INDUSTRIAL PROPERTIES
Anacomp Building 100% 1992 338,485 $2,554 100% Anacomp Regional Manufacturing/
Poway Engineering Facility
Bergen Brunswig Bldg. 100% 1992 175,000 $3,535 100% Bergen Brunswig Corporation
Orange
McDonnell Douglas Bldg. 100% 1987 159,854 $2,803 100% McDonnell Douglas (Alcoa)
San Diego
(Rancho Bernardo)
Fireman's Fund Bldg. 100% 1989 117,128 $2,379 96% Fireman's Fund,
San Diego CREDCO
(Kearny Mesa)
Highlands Plaza 100% 1988 101,920 $1,571 91% Laser Power Corp.,
San Diego Applied Retail Solutions
(Del Mar Highlands)
IMED Buildings 100% 1987 49,284 $ 857 100% IMED Corporation
San Diego 1988
(Scripps Ranch)
Marcoa Building 100% 1989 28,600 $ 561 100% Marcoa Publishing Company
San Diego
(Sorrento Mesa)
OTHER PROPERTIES
Beverly Garland's
Holiday Inn Hotel 70% 1973 258 Rooms $ 459 79% Business and tourist guests
North Hollywood 1993
Beverly Garland's
Holiday Inn Hotel 100% 1988 6.5 Acres $ 627 100% Rio Vista Development
Land
A-Storage Place 100% 1985 892 Units $ 482 86% Short-term storage
Chula Vista
</TABLE>
*Includes proforma rents for vacant space.
5
<PAGE>
Point Loma Plaza and the Plaza at Puente Hills are the only properties that
accounted for 10% or more of the Corporation's total assets at December 31,
1994. The Plaza at Puente Hills and the Pacific West Outlet Center are the only
properties that accounted for 10% or more of the Corporation's revenues during
1994.
POINT LOMA PLAZA represents 10.38% of the Corporation's total assets as of
December 31, 1994. This center has 52 tenant spaces, 46 of which are leased
resulting in 97% occupancy based on square footage. Real estate taxes for 1994
were at a rate of approximately 1.12% of assessed value or approximately
$344,000, substantially all of which is reimbursed under tenant leases.
Management believes that the property is adequately covered by insurance.
Annual rentals range from $4.68 to $114.96 per square foot with the higher
rentals attributable to the food court and/or smaller tenants. The average
square foot rental is $13.52 per year. During the period 1990-1994 this property
has experienced the following operating results:
<TABLE>
<CAPTION>
Average Rental
Year-End Per Square Foot Occupancy %
- ----------- --------------- -----------
<S> <C> <C>
1990 14.33 88
1991 14.78 93
1992 14.87 94
1993 14.17 88
1994 13.52 97
</TABLE>
Two tenants represent more than 10% of the total space. One is Von's
supermarket, which leases 50,000 square feet at a rental of $525,000 per annum,
for a term ending in 2008. Von's has six five-year renewal options. The other
tenant is Sport Chalet, a retail sporting goods store which leases 31,560 square
feet at a rental of $338,976 per annum for a term ending in 1997. This tenant
has four five-year renewal options. The following tabulation shows the
expiration schedule of leases in effect on December 31, 1994 both by square
footage and revenue.
<TABLE>
<CAPTION>
Annual
No. leases Net Rentable Scheduled Rents % of
Expiring Square Feet (in thousands) Total Rent
----------- ------------ --------------- ----------
<S> <C> <C> <C> <C>
1995 6 5,433 $ 95 3%
1996 5 6,976 127 5
1997 7 38,431 454 16
1998 9 12,898 227 8
1999 7 20,231 302 11
2000 3 5,062 93 3
2001 1 5,048 88 3
2002 1 1,207 21 1
2003 1 5,495 108 4
2004+ 6 105,499 1,273 46
</TABLE>
6
<PAGE>
The center is subject to a mortgage with a balance at December 31, 1994 of
$16.7 million. Annual payments of $1.8 million, which include principal and
interest at the rate of 8.125% are required until January 2000, at which time
the unpaid balance of $14.2 million will be due.
THE PLAZA AT PUENTE HILLS represents 16.3% of the Corporation's total
property at cost as of December 31, 1994. The center has 60 tenant spaces, 53
of which are leased resulting in a 95% occupancy. Annual rentals range from
$7.20 to $42.96 per square foot with an average per square foot of $12.79. Only
one tenant, IKEA Furniture, occupies more than 10% of the rentable square
footage (150,000 square feet) at a rental of $1.1 million per annum, for a term
ending in 2007. IKEA has four five-year renewal options. the 1994 property tax
rate was 1.97% resulting in a tax of approximately $1,245,000 (including special
assessments), substantially all of which is reimbursed by tenants under their
leases. Management believes that the property is adequately covered by
insurance.
The property was constructed in three phases from 1987 to 1992. During the
period 1992 to 1994 this property has experienced the following operating
results:
<TABLE>
<CAPTION>
Average Rental
Year-End Per Square Foot Occupancy %
-------- --------------- ------------------
<S> <C> <C>
1992 $11.91* 98%*
1993 12.48 96
1994 12.79 95
</TABLE>
*Based on information provided by the former owner.
The Corporation does not believe that operating data during the various
construction phases would be meaningful.
The following tabulation shows the expiration schedule of leases as of
December 31, 1994.
<TABLE>
Annual
No. leases Net Rentable Scheduled Rents % of
Expiring Square Feet (in thousands) Total Rent
---------- ------------ --------------- ----------
<S> <C> <C> <C> <C>
1995 4 10,980 $ 184 3%
1996 8 19,315 310 5
1997 7 35,460 564 9
1998 13 36,235 547 9
1999 0 0 0 0
2000 3 17,400 275 5
2001 1 4,677 88 1
2002 4 20,270 483 8
2003 3 22,493 294 5
2004+ 10 308,468 3,337 55
</TABLE>
7
<PAGE>
The property is subject to a term loan with a balance at December 31, 1994
of approximately $34,793,000. The term loan bears interest at 180 day LIBOR
plus 2.10% (7.35% at December 31, 1994). Annual payments of approximately
$3,063,000 (at December 31, 1994), which include principal and interest, are
required until July 2001, at which time the unpaid balance of approximately
$30,529,000 will be due.
THE PACIFIC WEST OUTLET CENTER has 58 tenant spaces, all of which are
leased resulting in a 100% occupancy at December 31, 1994. Annual rentals range
from $14 to $23 with an average annual rental of $19.01 per square foot at
December 31, 1994. No tenant leases more than 10% of the total space. Real
property taxes for 1994 were at the rate of 1.11% and the tax was $503,689
(including special assessments), substantially all of which is reimbursed by
tenants under their leases. Management believes that the property is adequately
covered by insurance. The center serves as part of the collateral pool of the
corporation's $30 million credit facility.
The property was constructed in 2 phases from 1990 to 1992. During the
period 1992 to 1994 this property has experienced the following operating
results:
<TABLE>
<CAPTION>
Average Rental
Year-End Per Square Foot Occupancy %
- ----------- ---------------- -----------
<S> <C> <C>
1992 $18.74* 99%*
1993 18.79 100
1994 19.01 100
</TABLE>
*Based on information provided by the former owner.
The Corporation does not believe that operating data during the various
construction phases would be meaningful.
The following tabulation shows the expiration schedule of leases in effect
on December 31, 1994, both by square footage and revenue.
<TABLE>
<CAPTION>
Annual
No. leases Net Rentable Scheduled Rents % of
Expiring Square Feet (in thousands) Total Rent
----------- ------------ ---------------- ----------
<S> <C> <C> <C> <C>
1995 16 46,080 $ 878 22%
1996 21 75,815 1,564 40
1997 5 9,100 185 7
1998 5 13,325 279 7
1999 3 6,350 139 3
2000 2 7,275 133 3
2001 3 19,100 314 8
2002 1 7,500 105 3
2003 0 0 0 0
2004+ 2 18,250 259 7
</TABLE>
8
<PAGE>
Insurance
- ---------
All properties are covered by insurance policies from companies with a
minimum Best Insurance Rating of "A". Those companies insure against risk of
direct physical damage in amounts structured to reimburse the Corporation on a
replacement cost basis for all costs incurred to repair each facility, including
loss of rental income during the period of reconstruction. In addition, the
Corporation carries general liability insurance in amounts of no less than $5.0
million to insure the Corporation against liability claims and provide for the
costs of defense. The Corporation does not insure the properties for loss
caused by earthquake, except for the Pacific West Outlet Center. This type of
insurance is only available at extremely high rates. The Corporation has made
the determination that the risk of loss does not justify the cost of coverage.
The Corporation believes that its properties are adequately insured.
Other Considerations
- --------------------
Southern California recently has been exposed to a variety of adverse
factors. Defense and aerospace spending has been reduced. Brush fires and
earthquakes have caused property damage. The Corporation's properties have not
been materially impacted by any of these events. The Corporation has been
affected by an increased awareness of crime and vandalism. This has resulted in
the need for increased security patrols, the costs of which are generally
recoverable under common area maintenance reimbursement provisions of tenant
leases. However, the California Supreme Court has issued a ruling reversing the
trend toward absolute liability being imposed upon property owners for damage to
invitees from criminal activity occurring on their property.
The foregoing and other factors, some of which may not be currently
anticipated, may have unpredictable impacts on the Corporation's financial
condition, operations, or both.
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
Not Applicable.
9
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
- -----------------------------------------------------------------------------
Common Stock of the Corporation is listed on the New York Stock Exchange
under the symbol "BPP". The following table sets forth the high and low sale
prices of the Common Stock, as reported by the New York Stock Exchange Composite
Tape, and the per share dividends paid by the Corporation for each calendar
quarter during 1993 and 1994.
<TABLE>
<CAPTION>
Dividends
Quarter Ended High Low Paid
- ------------------------ -------- --------- ----------
<S> <C> <C> <C>
March 31, 1993 $ 20.50 $ 15.75 $ .34
June 30, 1993 20.63 18.38 .35
September 30, 1993 19.75 18.50 .35
December 31, 1993 20.88 16.13 .35
March 31, 1994 19.125 17.00 .35
June 30, 1994 18.50 16.875 .35
September 30, 1994 17.625 15.75 .355
December 31, 1994 16.125 12.625 .36
</TABLE>
At December 31, 1994, there were approximately 4,200 holders of record of
the Corporation's Common Stock.
10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
The following selected financial data is supplied
to shareholders in order to present significant data covering the last
five fiscal years, and also as an analysis of trends in
Company size, earnings, dividends, and scope of operations.
(in thousands except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993 1992 1991 1990
-------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATING STATEMENT DATA
TOTAL REVENUES $ 51,387 $ 41,179 $ 28,025 $ 24,838 $ 23,638
======== ======== ======== ======== ========
Income From Operations $ 13,164 $ 9,846 $ 1,058 $ 2,469 $ 1,993
Offering and
Listing Costs (258)
-------- -------- -------- -------- --------
NET INCOME $ 13,164 $ 9,846 $ 1,058 $ 2,469 $ 1,735
======== ======== ======== ======== ========
NET INCOME PER
SHARE $ .84 $ .77 $ .13 $ .40 $ .29
======== ======== ======== ======== ========
DIVIDENDS PAID $ 22,723 $ 18,324 $ 11,880 $ 8,416 $ 8,255
======== ======== ======== ======== ========
DIVIDENDS PAID PER
SHARE $ 1.415 $ 1.39 $ 1.36 $ 1.36 $ 1.36
======== ======== ======== ======== ========
TAXABLE INCOME
PER SHARE $ .95 $ .88 $ .52 $ .49 $ .49
======== ======== ======== ======== ========
BALANCE SHEET DATA
Total Assets $358,022 $360,262 $259,790 $189,786 $183,071
Total Notes Payable $110,799 $115,253 $ 78,722 $ 73,361 $ 84,103
Convertible Subordinated
Debentures $ 25,700 $ 42,354 $ 80,530 $ 16,173 $ 16,218
Number of Shares
Outstanding at
Year End 16,905 14,987 8,838 6,295 6,116
Weighted Average Number of Shares 15,732 12,768 8,292 6,170 6,067
</TABLE>
11
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- -------------------------------------------------------------------------------
OF OPERATIONS:
- --------------
GENERAL
The Corporation's investment objectives are to acquire, own and manage a
portfolio of income-producing commercial real estate which provides cash for
distribution to shareholders and protects investor capital, while providing
potential for capital appreciation. As a part of implementing these objectives,
the Corporation has expanded its portfolio of real properties over the past
several years. Capital to acquire these properties has been obtained from
securities offerings, from additional mortgage debt on new and existing
properties and from short-term credit facilities. The Corporation's most recent
underwritten public offerings involved the sales of shares of common stock in
April 1993, and Common Stock and Convertible Debentures in March 1992. During
recent years, the Corporation also has utilized a combination of working
capital, short-term debt and proceeds from the optional share purchases under
the Corporation's dividend reinvestment plan, to improve its properties and to
construct additional tenant space.
RESULTS OF OPERATIONS
1994 Compared with 1993.
OPERATIONS - Net Income increased $3.3 million, or 33.7%, to $13.2 million
($.84 per share) in 1994 from $9.8 million ($0.77 per share) in 1993. Funds
from operations (net income excluding gains (losses) from debt restructurings
and sales of property plus depreciation and amortization) increased $5.9
million, or 30.4%, to $25.1 million in 1994. These increases were primarily the
result of property acquisitions and financing activities during 1993. Funds
from operations differs from cash flows from operating activities set forth in
the accompanying Statements of Cash Flows in the Corporation's financial
statements, primarily because funds from operations does not include changes in
operating assets and liabilities. Funds from operations does not represent cash
generated from operating activities, in accordance with generally accepted
accounting principles, and therefore should not be considered as a substitute
for net income as a measure of results of operations or for cash flow from
operations as a measure of liquidity.
Rental revenues were $51.0 million for 1994 as compared to $40.4 million
for 1993. The $10.6 million difference represents a 26.2% increase. The April
1993 Pacific West Outlet Center acquisition accounted for $2.1 million of the
increase, $690,000 was due to the July 1993 and October 1993 acquisitions of the
Plasma and K-Mart Buildings, respectively, $340,000 was due to the August 1993
acquisition of an additional 20% interest in the Beverly Garland Hotel, $360,000
was due to the September 1993 acquisitions of the remaining 50% interests in the
Navajo and Village Station Shopping Centers, $6.9 million was due to the October
1993 acquisition of the Plaza at Puente Hills, and the balance was primarily due
to minor changes in occupancy and rental rates at existing properties.
Interest revenue decreased $408,000 in 1994 as compared with 1993. This
was the combined result of temporarily investing the proceeds of the April 1993
public offering in interest bearing money market securities, until suitable
permanent investments were made, and the 1993 reduction of $1.9 million of notes
receivable related to the Navajo Shopping Center.
12
<PAGE>
Interest expense increased $1.1 million in 1994 to $11.6 million, as
compared to $10.5 million in 1993. This was primarily due to the $58 million of
credit advances for the purchase of the Plaza at Puente Hills in October 1993,
and rising interest rates, offset by the conversion of Convertible Debentures
during 1994 and the second half of 1993, and the paydown of notes payable and
credit line advances from the proceeds of the April 1993 public offering.
Rental Operating Costs were $12.2 million for 1994 and $9.2 million for
1993, and Depreciation and Amortization were $12 million for 1994 and $9.4
million for 1993. These increases were primarily the result of the property
additions made by the Corporation during 1993.
1993 Compared with 1992.
OPERATIONS - Net Income increased $8.8 million, or 831%, to $9.8 million
($0.77 per share) in 1993 from $1.0 million ($0.13 per share) in 1992. Funds
from operations increased $11.0 million, or 134%, to $19.3 million in 1993.
These increases were primarily due to increased rental revenues.
Rental revenues were $40.4 million for 1993 as compared to $26.7 million
for 1992. The $13.7 million difference represents a 51.3% increase. The June
1992 San Diego Factory Outlet Center acquisition accounted for $1.8 million of
the increase, $3.9 million of the increase was due to the October 1992 Bergen
Brunswig Building acquisition, $2.5 million was due to the December 1992 Anacomp
Building acquisition, $3.7 million was due to the April 1993 Pacific West Outlet
Center acquisition, $1.5 million was due to the October 1993 Plaza at Puente
Hills acquisition, and the balance was primarily due to minor changes in
occupancy and rental rates at existing properties.
Interest revenue decreased $518,000 in 1993 as compared with 1992. This
was a result of temporarily investing the proceeds of the March 1992 public
offering in interest bearing money market securities, until suitable permanent
investments were made.
Interest expense decreased $700,000 in 1993 to $10.5 million, as compared
to $11.2 million in 1992. This was primarily due to the conversion of $36.5
million of Convertible Debentures during 1993 and the paydown of $29.5 million
in notes payable and credit line advances from the proceeds of the April 1993
public offering, offset by $58.0 million of credit line advances for the
purchase of the Plaza at Puente Hills in October 1993.
Rental Operating Costs were $9.2 million for 1993 and $6.4 million for
1992, and Depreciation and Amortization were $9.4 million for 1993 and $7.2
million for 1992. These increases were primarily the result of the property
additions made by the Corporation during the past two years. The $354,000
decrease in the Provision for Bad Debts reflects greater problems affecting
certain tenants during 1992 than in 1993.
PUBLIC OFFERING OF SECURITIES - In April 1993, the Corporation completed a
public offering of 3.5 million shares of Common Stock at a public offering price
of $19.75 per share. Of the net proceeds to the Corporation of approximately
$64.0 million, $22.0 million was immediately applied to the retirement of notes
payable and to advances outstanding under the Corporation's $5.0 million
unsecured line of credit.
13
<PAGE>
ACQUISITION OF PACIFIC WEST OUTLET CENTER - In April 1993, the Corporation
purchased the 202,795 square foot Pacific West Outlet Center in Gilroy,
California for $35.0 million in cash. Funds were provided by proceeds of the
April 1993 issuance of Common Stock.
HIGHLANDS PLAZA LOAN PAYOFF - In May 1993, the Corporation retired the $7.5
million, 9.75% mortgage loan on Highlands Plaza, with remaining proceeds from
the April 1993 issuance of Common Stock.
ACQUISITION OF PLASMA BUILDING - In July 1993, the Corporation purchased a
6,556 square foot building known as the Plasma Building located adjacent to the
San Diego Factory Outlet Center for $590,000 in cash.
ACQUISITION OF 20% OF BEVERLY GARLAND'S HOLIDAY INN HOTEL - In August 1993,
the Corporation acquired an additional 20% interest in Beverly Garland's Holiday
Inn Hotel for $1.95 million ($1.0 million by cancellation of receivables and
$950,000 by assumption of the property's mortgage loan.) The Corporation's
total interest in the hotel property is 70%.
ACQUISITION OF 50% OF NAVAJO SHOPPING CENTER - In September 1993, the
Corporation purchased the remaining 50% interest in the Navajo Shopping Center
for $3.74 million. The purchase price consisted of 92,039 shares of the
Corporation's Common Stock and the cancellation of a note receivable of $1.92
million.
ACQUISITION OF 50% OF VILLAGE STATION SHOPPING CENTER - In September 1993,
the Corporation purchased the remaining 50% interest in the Village Station
Shopping Center for $3.47 million. The purchase price consisted of cash of
$400,000, 54,342 shares of the Corporation's Common Stock and the assumption of
$2.0 million of debt.
ACQUISITION OF K-MART BUILDING - In October 1993, the Corporation purchased
the 98,194 square foot building known as the K-Mart Building located adjacent to
the San Diego Factory Outlet Center for $5.8 million. Funds were provided by a
$500,000 draw on the Corporation's $30.0 million secured line of credit, the
assumption of a $3.5 million loan with an interest rate of 8.67% and the
remainder from available cash.
ACQUISITION OF PLAZA AT PUENTE HILLS - In October 1993, the Corporation
purchased the 516,538 square foot Plaza at Puente Hills power-center located in
the City of Industry, California for $58.0 million. Funds were provided by
drawing $35.0 million on the Corporation's $35.0 million non-revolving secured
line of credit and by drawing $23.0 million on the Corporation's $30.0 million
secured line of credit.
LIQUIDITY AND CAPITAL RESOURCES
During 1994, there was a net $3.1 million decrease in the Corporation's
borrowing under its secured and unsecured credit facilities and a net $1.4
million decrease in other notes payable. As of December 31, 1994, the
Corporation had $9.0 million capacity available under its credit facilities. As
of December 31, 1994, there was $110.8 million in Notes Payable. Included in
this figure was $21.0 million borrowed on the Corporations $30.0 million secured
14
<PAGE>
facility and approximately $89.8 million outstanding on various mortgage notes.
In addition, the Corporation had $5.0 million outstanding on its $5.0 million
unsecured facility. As of December 31, 1994, of the approximately $115.8
million of debt outstanding, $60.8 million was at variable rates tied to either
LIBOR (London Inter-Bank Offer Rate) or IBOR (the bank's international reference
rate) and $55.0 million was at fixed rates. The Corporation's average variable
and fixed rates at December 31, 1994 were 7.74% and 8.95% respectively. The
Corporation at December 31, 1994 had 12 properties, producing rents accounting
for approximately 34% of 1994 rental revenue, which were free of debt, thereby
providing a collateral base, if needed, for future borrowings.
Subsequent to December 31, 1994, the Corporation received a commitment for
a new secured and unsecured revolving line of credit. The secured facility will
have a $40 million capacity and be secured by the same properties which secure
the current line of credit and will bear interest at prime or IBOR plus 1.75%.
The unsecured facility will have a $10 million capacity and borrowings will bear
interest at prime or IBOR plus 2.00%. Both facilities mature in June 1997.
Effective January 1, 1995 and until the new lines of credit are finalized, the
above rates will accrue on the Corporation's secured and unsecured lines of
credit which were in place at December 31, 1994.
During 1994, $16.7 million of Convertible Debentures were converted into
1.04 million shares of the Corporation's Common Stock. Also during 1994,
reinvested dividends and optional purchases under the Dividend Reinvestment Plan
provided approximately $13.2 million of additional equity to the Corporation
(864,998 shares of Common Stock). Effective January 1, 1995, the Corporation
temporarily suspended the optional cash payment portion of the Dividend
Reinvestment Plan.
The Corporation has on file with the Securities and Exchange Commission a
$200 million shelf registration statement on Form S-3. This registration
statement was filed for the purpose of issuing either common stock or debentures
for the purpose of repaying outstanding debt, potential future acquisitions of
commercial properties and for general corporate purposes.
The Corporation expects to continue to seek additional commercial property
acquisitions through the use of additional equity and/or debt securities
offerings, mortgage borrowings, and the use of bank lines of credit. Such
acquisitions could be pursuant to transactions in which the Corporation or a
Partnership controlled by it, issues securities of the Corporation or of such
Partnership to property owners in exchange for their properties. The
Corporation anticipates that cash flow from operations, cash on hand, available
borrowings under credit facilities and the use of project financing, as well as
other debt and equity alternatives, will be adequate to fund debt service
obligations, dividend payments in accordance with REIT qualification
requirements and provide the necessary capital to achieve growth. The
Corporation satisfied its REIT qualification requirement of distributing at
least 95% of ordinary taxable income with dividend distributions of $22.7
million in 1994 of which 33% has been determined to be a return of capital to
shareholders for Federal tax purposes.
OTHER FACTORS AFFECTING FINANCIAL CONDITION AND OPERATIONS
IMPACT OF INFLATION - Management believes that inflation has a positive
effect on the Corporation's portfolio, but that this effect is not fully
realized until properties are sold or exchanged. Although the current rate of
inflation is less than that of prior years, the
15
<PAGE>
Corporation has continued to collect increased rents based on cost-of-living
adjustments, minimum fixed rent increases or percentage rent increases at many
of its properties, although to a lesser degree than in the past. Management's
policy of negotiating leases on a net basis, to the extent practicable, is
designed to help protect against increased operating costs as a result of
inflation.
IMPACT OF THE ECONOMY AND OTHER CONSIDERATIONS - The current economic
conditions in California appear to have affected businesses in the Corporation's
marketplace. While some tenants have experienced a slowdown in sales, others
have enjoyed increases. A continued slowdown or recession could adversely
affect the business of tenants of the Corporation and, consequently, the amount
of percentage rents received from retail tenants and, indeed, certain tenants'
ability to continue to meet their lease commitments. Continued economic
slowdown could adversely affect the Corporation's ability to maintain current
occupancy rates at its properties and could result in reduced rental rates and
reduced value of its properties. Since the majority of the Corporation's
significant tenants have leases which remain in effect for a number of years,
management does not expect reduced market rental rates to have a material impact
on earnings in 1995. However, the Corporation could experience a decline in
rental revenues as current leases expire.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Burnham Pacific Properties,
Inc. as of December 31, 1994 and 1993, and the related statements of income,
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1994. Our audits also included the financial statement
schedule listed in Item 14(a). These financial statements and financial
statement schedule are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on the financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Burnham Pacific Properties, Inc. as of
December 31, 1994 and 1993, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth herein.
[sig of Deloitte & Touche LLP]
February 17, 1995
San Diego, California
17
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(in thousands, except share amounts)
<TABLE>
<CAPTION>
ASSETS 1994 1993
- ------ -------- ---------
<S> <C> <C>
Property $387,959 $383,863
Less Accumulated Depreciation (49,506) (40,751)
-------- --------
Property - Net 338,453 343,112
Cash and Cash Equivalents 1,664 900
Receivables - Net 9,109 7,393
Other Assets 8,796 8,857
-------- --------
Total $358,022 $360,262
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Accounts Payable and Other $ 1,877 $ 1,976
Accrued Interest on Convertible
Debentures 943 1,650
Tenant Security Deposits 932 940
Notes Payable 110,799 115,253
Convertible Debentures 25,700 42,354
Line of Credit Advances 5,000 5,000
-------- --------
Total Liabilities 145,251 167,173
-------- --------
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock, 5,000,000 Shares
Authorized; No Shares Issued
or Outstanding
Common Stock, No Par Value,
40,000,000 Shares Authorized;
16,905,276 and 14,987,097 Shares
Outstanding at December 31, 1994 and
1993, Respectively 260,262 231,021
Dividends Paid in Excess of Net Income (47,491) (37,932)
-------- --------
Total Stockholders' Equity 212,771 193,089
-------- --------
Total $358,022 $360,262
======== ========
</TABLE>
See the Accompanying Notes
18
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
REVENUES 1994 1993 1992
- -------- ----------- ----------- ----------
<S> <C> <C> <C>
Rents $ 51,026 $ 40,410 $ 26,738
Interest 361 769 1,287
----------- ----------- ----------
Total Revenues 51,387 41,179 28,025
----------- ----------- ----------
COSTS AND EXPENSES
- ------------------
Interest 11,582 10,483 11,208
Rental Operating Costs 12,181 9,192 6,352
Provision for Bad Debts 302 373 727
General and Administrative 2,194 1,855 1,487
Depreciation and Amortization 11,964 9,430 7,193
----------- ----------- ----------
Total Costs and Expenses 38,223 31,333 26,967
----------- ----------- ----------
Net Income $ 13,164 $ 9,846 $ 1,058
=========== =========== ==========
Net Income Per Share $ 0.84 $ 0.77 $ 0.13
=========== =========== ==========
Weighted Average Number
of Shares 15,731,552 12,767,606 8,292,030
=========== =========== ==========
</TABLE>
See the Accompanying Notes
19
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Dividends
Paid in
Common Stock Excess of
Shares Amount Net Income Total
------------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Balance, January 1, 1992 6,295,472 $ 84,689 $(18,632) $ 66,057
Issuance of Common Stock:
Public Offering - net 1,725,000 26,223 26,223
Conversion of Debentures -
net of related costs 665,170 10,186 10,186
Dividend Reinvestment 122,305 1,809 1,809
Merger with Bigi 80,000 1,210 1,210
Repurchase of Stock (50,000) (784) (784)
Net Income 1,058 1,058
Dividends Paid (11,880) (11,880)
---------- -------- -------- --------
Balance, December 31, 1992 8,837,947 $123,333 $(29,454) $ 93,879
Issuance of Common Stock:
Public Offering - net 3,450,000 64,231 64,231
Conversion of Debentures-
net of related costs 2,206,069 34,671 34,671
Optional Cash Payments 178,113 3,141 3,141
Acquisitions of Property 146,381 2,891 2,891
Dividend Reinvestment 133,828 2,319 2,319
Exercised Options 34,759 435 435
Net Income 9,846 9,846
Dividends Paid (18,324) (18,324)
---------- -------- -------- --------
Balance, December 31, 1993 14,987,097 $231,021 $(37,932) $193,089
Issuance of Common Stock:
Conversion of Debentures -
net of related costs 1,040,873 15,987 15,987
Optional Cash Payments 703,635 10,731 10,731
Dividend Reinvestment 161,363 2,488 2,488
Acquisitions of Property 10,058
Exercised Options 2,250 35 35
Net Income 13,164 13,164
Dividends Paid (22,723) (22,723)
---------- -------- -------- --------
Balance, December 31, 1994 16,905,276 $260,262 $(47,491) $212,771
========== ======== ========= ========
</TABLE>
See the Accompanying Notes
20
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
(in thousands)
<TABLE>
<CAPTION>
1994 1993 1992
--------- ---------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 13,164 $ 9,846 $ 1,058
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation and Amortization 11,964 9,430 7,193
Provision for Bad Debts 302 373 727
Changes in Other Assets and Liabilities:
Receivables and Other Assets (4,791) (2,644) (2,712)
Accounts Payable and Other Liabilities (806) (2,277) 2,879
Tenant Security Deposits (8) 184 44
-------- --------- --------
Net Cash Provided by Operating Activities 19,825 14,912 9,189
-------- --------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for Acquisitions of Property (5,939) (99,838) (69,186)
Advances for Notes Receivable (1,626) (214)
Principal Payments on Notes Receivable 801 149 217
Other (220)
-------- --------- --------
Net Cash Used for Investing Activities (5,138) (101,315) (69,403)
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings Under Line of
Credit Agreements 26,660 16,200 1,433
Repayments Under Line of
Credit Agreements (29,760) (11,200) (31,892)
Proceeds From Issuance of Notes Payable 61,953 49,800
Principal Payments of Notes Payable (1,354) (31,881) (44,439)
Issuance of Stock, Net 10,766 67,807 26,223
Repurchase of Stock (784)
Issuance of Convertible Debentures - Net 71,652
Redemption of Convertible Debentures - Net
of Related Costs (1,631)
Dividends Paid (22,723) (18,324) (11,880)
Dividend Reinvestment 2,488 2,319 1,809
-------- --------- --------
Net Cash (Used) Provided by Financing Activities (13,923) 85,243 61,922
-------- --------- --------
Net Increase (Decrease) in Cash and Cash Equivalents 764 (1,160) 1,708
Cash and Cash Equivalents at Beginning of Year 900 2,060 352
-------- --------- --------
Cash and Cash Equivalents at End of Year $ 1,664 $ 900 $ 2,060
======== ========= ========
</TABLE>
21
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1994, 1993 and 1992
(in thousands)
(continued)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash Paid During the Year for Interest
(net of amounts capitalized) $12,450 $11,714 $ 9,508
======= ======= =======
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Reduction of Receivables in Connection
With Property Acquisitions $ 2,922
Notes Payable Assumed 6,459
Common Stock Issued in Connection
With Property Acquisitions 2,891
Other 400
-------
Fair Value of Properties Acquired $12,672
=======
Conversion of Debentures into
Common Stock $16,654 $36,545 $10,634
======= ======= =======
Common Stock Issued in Merger With Bigi $ 1,210
=======
</TABLE>
See the Accompanying Notes
22
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Burnham Pacific Properties, Inc. (the "Corporation") is an equity real
estate investment trust ("REIT") which owns a portfolio of retail and commercial
properties primarily in Southern California. The Corporation's properties
consist of 15 retail centers, 5 single tenant office/industrial buildings, 2
multi-tenant office buildings and 2 other properties. Nineteen of these
properties are located in San Diego County, two in Orange County, two in Los
Angeles County and one in Santa Clara County. On January 27, 1992, the
stockholders of the Corporation approved a merger of Burnham Investment Group,
Inc. ("Bigi"), the Corporation's former Advisor, into the Corporation to effect
the conversion of the Corporation to a self-administered REIT. The merger
terminated an advisory contract between the Corporation and Bigi effective
January 1, 1992, at which time the Corporation employed the former Bigi
employees. The Corporation issued 80,000 shares of Common Stock to the
stockholders of Bigi to complete the merger and conversion to self-
administration.
Property
Property is stated at cost. Additions, renovations and improvements are
capitalized. Maintenance and repairs which do not extend asset lives are
expensed as incurred. Depreciation is computed using the straight-line method
over estimated useful lives ranging from 14 to 30 years for buildings, 2 to 17
years for improvements, and 3 to 10 years for furniture, fixtures and equipment.
Amortization
Deferred loan fees, direct lease costs and certain other costs are
amortized using the straight-line method over the related estimated life.
Income Taxes
Income taxes have not been provided as the Corporation believes that it has
met all requirements in 1994, 1993, and 1992 to qualify as a REIT under Internal
Revenue Code Sections 856-860 including the distribution of at least 95% of
ordinary taxable income to stockholders. Taxable income differs from net income
for financial reporting purposes principally because of differences in the
timing of recognition of interest, depreciation, rental revenue, and deferred
gains on sales of properties. The reported amounts of the Corporation's net
assets at December 31, 1994 exceeded their tax basis for Federal purposes by
approximately $5,827,000.
Net Income Per Share
Net income per share is calculated using the weighted average number of
shares outstanding during each year.
23
<PAGE>
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
cash and certificates of deposit with original maturities of less than 90 days.
Financial Instruments
The carrying values reflected in the balance sheet at December 31, 1994 and
1993 reasonably approximate the fair values for cash and cash equivalents,
receivables, accounts payable, and line of credit advances. In making such
assessment, the Corporation has utilized discounted cash flow analyses,
estimates, and quoted market prices as appropriate. The Corporation estimates
that the fair value of the Convertible Debentures at December 31, 1994 is lower
than their carrying value by approximately $3.4 million and the fair value of
notes payable is higher than their carrying value by approximately $2.2 million.
At December 31, 1993, the Corporation estimated that the fair value of the
Convertible Debentures and notes payable were higher than their respective
carrying values by approximately $3 million and $2.8 million, respectively.
Reclassifications
Certain of the 1993 and 1992 amounts have been reclassified to conform to
1994 presentation.
2. PUBLIC OFFERINGS
On April 7, 1993, the Corporation issued 3,450,000 shares of Common Stock
at a public offering price of $19.75 per share. The net proceeds of this
offering were approximately $64,000,000. On March 6, 1992, the Corporation
issued 1,725,000 shares of Common Stock at a public offering price of $16.00 per
share and sold $75,000,000 of 8-1/2% Convertible Debentures due 2002. (See Note
6). The net proceeds of this offering were approximately $98,000,000. The
proceeds from these offerings were used to retire debt and for general corporate
purposes, primarily to purchase commercial real estate.
During September 1993, the Corporation filed with the Securities and
Exchange Commission a $200 million shelf registration statement on Form S-3.
This registration statement was filed for the purpose of issuing either Common
Stock or debentures for repaying outstanding debt, potential future acquisitions
of commercial properties and general corporate purposes. As of December 31,
1994, no issuances have occurred.
3. RELATED PARTY TRANSACTIONS
During 1993, the Corporation loaned to its then president $898,700, due
March 31, 1995. The note bears interest at the same variable rate the
Corporation pays on its unsecured line of credit plus .25%. The note is secured
by approximately 71,000 shares of the Corporation's Common Stock owned by such
former officer. In connection with the resignation of such officer in the fourth
quarter of 1994, the note was modified to be interest-free from January 1, 1994
through March 31, 1995. Additionally, effective April 1, 1995 the note will be
reduced by the amount of accrued incentive compensation plus interest thereon
(approximately $145,000), and be extended on an interest bearing basis, until
March 31, 1996.
24
<PAGE>
4. PROPERTY
Property is stated at cost and is summarized as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1994 1993
--------- ---------
<S> <C> <C>
Retail Centers $247,486 $245,281
Office/Industrial Buildings 123,987 123,539
Hotel 14,762 13,319
Other 1,724 1,724
-------- --------
Total Property 387,959 383,863
Accumulated Depreciation (49,506) (40,751)
-------- --------
Property - Net $338,453 $343,112
======== ========
</TABLE>
The properties are leased to tenants under leases expiring at various dates
through 2014. Certain of these leases contain provisions for rent increases
based on cost-of-living indices and certain leases contain renewal options of up
to 55 years. Future minimum rental income to be received by the Corporation
under the terms of these operating leases is as follows as of December 31, 1994
(in thousands):
<TABLE>
<CAPTION>
Year Ending December 31,
- -----------------------
<S> <C>
1995 $ 38,499
1996 35,072
1997 30,195
1998 26,247
1999 22,424
Later Years 93,104
--------
Total $245,541
========
</TABLE>
Certain properties, with a net book value of $226,147,000 at December 31,
1994, are pledged as collateral for notes payable described in Note 5. In
addition, the notes are secured by assignments of rents on such properties.
Certain properties are located on land which is subject to noncancelable ground
leases expiring at various dates through 2035 with minimum annual lease payments
of approximately $411,000.
25
<PAGE>
5. NOTES PAYABLE
Mortgage notes and secured line of credit advances are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1994 1993
-------- --------
<S> <C> <C>
Mortgage notes at fixed rates of 7.35% to 10.25%
payable in monthly installments to 2006:
Insurance Companies $ 33,896 $ 34,531
Banks and Savings and Loan Associations 36,697 2,020
Pension Funds 16,070 16,335
Other 3,136 3,267
-------- --------
Total Mortgage Notes 89,799 56,153
Secured Lines of Credit Advances 21,000 59,100
-------- --------
Total Notes Payable $110,799 $115,253
======== ========
</TABLE>
Principal maturities on the notes payable are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
Year Ending December 31,:
-------------------------
<S> <C>
1995 $ 22,836
1996 8,741
1997 1,945
1998 2,110
1999 11,562
Later Years 63,605
--------
Total $110,799
========
</TABLE>
Secured Line of Credit Agreements
The Corporation has a $30,000,000 revolving bank line of credit secured by
certain properties on which outstanding borrowings during 1994 accrued interest
at prime plus 0.5% or IBOR (the bank's international reference rate) plus 2.5%.
At December 31, 1994 and 1993, the Corporation had $21,000,000 and $24,100,000,
respectively, outstanding under this line at an average rate of approximately
8.24% and 5.94%, respectively. This line expires in May 1995. (See Note 15).
The Corporation also had a $35,000,000 non-revolving bank line of credit
secured by one of its properties. During 1994, the line was replaced by a
seven-year term mortgage note. At December 31, 1994, the term loan bears
interest at 180 day LIBOR (London Inter-Bank Offer Rate) plus 2.10% (7.35% at
December 31, 1994) and had approximately $34,793,000 outstanding.
All of the Corporation's lines of credit are subject to various borrowing
base and debt service coverage limitations including that the ratio of dividends
paid to "funds from operations" (net income plus depreciation and amortization)
must not exceed 110%.
26
<PAGE>
6. CONVERTIBLE DEBENTURES
On July 15, 1987, the Corporation issued $23,000,000 of 8-1/2% Convertible
Debentures due July 15, 2012 at $25.00 per Debenture. The Debentures were
convertible at any time prior to maturity into shares of the Corporation's
Common Stock at a conversion price of $17.50 per share, subject to adjustment
under certain conditions. The Corporation called for redemption the remaining
Debentures effective June 11, 1993. During the period January 1, 1993 to the
June 11, 1993 redemption date, 830,732 shares of Common Stock were issued as a
result of the conversion of $14,538,850 of these Debentures. The remaining
$1,631,150 of these Debentures were redeemed on June 11, 1993.
On March 6, 1992, the Corporation issued $75,000,000 of 8-1/2% Convertible
Debentures due 2002 at $1,000 per Debenture. The Debentures are convertible at
any time prior to maturity into shares of Common Stock at a conversion price of
$16 per share, subject to adjustment under certain conditions. On December 31,
1994, the last sale price of the Common Stock, as reported on the New York
Stock Exchange, was $12.75 per share. Through December 31, 1994, 3,081,238
shares were issued as a result of the conversion of $49,300,000 of these
Debentures.
7. LINE OF CREDIT ADVANCES
The Corporation has a $5,000,000 unsecured line of credit with a bank under
which outstanding borrowings during 1994 accrued interest at the bank's prime
rate plus 0.25% or IBOR plus 2.25%. At December 31, 1994 and 1993, $5,000,000
was outstanding at a rate of 8.44% and 5.50%, respectively. This line is
subject to various borrowing base and debt service coverage limitations and
expires in May 1995. (See Note 15).
8. RETIREMENT SAVINGS PLAN
In 1992, the Corporation implemented a contributory Retirement Savings
Plan. The maximum contribution is 15% of annual salaries of which up to 3% is
contributed by the Corporation at a rate of up to 75% of employee contributions.
The Corporation's contributions to this Plan for 1994, 1993 and 1992 were
approximately $25,000, $27,000 and $6,000, respectively.
27
<PAGE>
9. DIVIDEND DISTRIBUTIONS
Based on information provided by the Corporation's regular tax advisor, the
status of the dividends distributed for 1994, 1993 and 1992 for Federal income
tax purposes is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Taxable Portion 67.0% 63.2% 38.0%
Return of Capital 33.0% 36.8% 62.0%
-------- -------- --------
TOTAL 100.0% 100.0% 100.0%
======== ======== ========
</TABLE>
10. PRICE RANGE OF COMMON STOCK
<TABLE>
Market Quotations
-------------------
Dividends
Quarter Ended High Low Paid
- -------------------- -------- ------ ---------
<S> <C> <C> <C>
March 31, 1992 $18.00 $14.63 $ .34
June 30, 1992 16.38 15.63 .34
September 30, 1992 16.00 14.25 .34
December 31, 1992 16.00 14.88 .34
March 31, 1993 20.50 15.75 .34
June 30, 1993 20.63 18.38 .35
September 30, 1993 19.75 18.50 .35
December 31, 1993 20.88 16.13 .35
March 31, 1994 19.13 17.00 .35
June 30, 1994 18.50 16.88 .35
September 30, 1994 17.63 15.75 .355
December 31, 1994 16.13 12.63 .36
</TABLE>
Market quotations are from the New York Stock Exchange Composite Tape. As
of December 31, 1994, there were approximately 4,200 holders of record of the
Corporation's shares.
11. STOCK OPTIONS
The Corporation has a stock option plan which expires in November 1997 and
is administered by the Compensation Committee of the Board of Directors. The
plan provides options for a maximum of 1,000,000 shares of Common Stock at an
exercise price of at least 100% of the market value of such stock on the date
the options are granted. Options granted expire 10 years from the date of
grant. At December 31, 1994, options for 399,537 shares are exercisable and
options for 460,152 shares are available for granting.
28
<PAGE>
Activity under the stock option plan is summarized below:
<TABLE>
<CAPTION>
Number of Shares Exercise
------------------------------------ Price
Incentive Non-Qualified Total Per Share
--------- ------------- -------- --------------
<S> <C> <C> <C> <C>
Outstanding, January 1, 1992 142,666 193,631 336,297 $15.20-$18.63
Granted, March 9, 1992 55,000 25,000 80,000 $16.00
Granted, May 5, 1992 5,000 5,000 $16.20
Reclassified (48,550) 48,550
--------- --------- --------
Outstanding, December 31, 1992 149,116 272,181 421,297 $15.20-$18.63
Granted, May 25, 1993 6,000 6,000 $18.81
Granted, June 10, 1993 57,500 57,500 $18.88
Granted, July 26, 1993 24,000 24,000 $18.88
Exercised (54,158) (26,800) (80,958) $16.19-$18.88
Reclassified 4,036 (4,036)
--------- --------- --------
Outstanding, December 31, 1993 156,494 271,345 427,839 $15.20-$18.88
Granted, May 3, 1994 30,000 30,000 $17.59
Exercised (2,250) (2,250) $15.20-$16.00
Cancelled (56,052) (56,052) $16.00-$18.88
--------- --------- --------
Outstanding, December 31, 1994 100,442 299,095 399,537 $15.20-$18.88
========= ======= ========
</TABLE>
12. DIVIDEND REINVESTMENT PLAN
The Corporation has a Dividend Reinvestment Plan which provides
stockholders an opportunity to invest their dividends in newly issued shares at
a 5% discount from "fair market value" (as defined in the Plan) without
brokerage commissions or service charges. For 1994, 1993 and 1992, 161,363
shares, 133,828 shares, and 122,305 shares, respectively, were issued through
the Plan.
Effective January 1, 1993, the Plan was modified to allow participants
under the Plan to make optional cash payments to purchase stock at a 5% discount
with a $100 minimum and a $5,000 maximum investment per quarter. During 1994
and 1993, approximately $10,731,000 and $3,141,000, respectively, of such
optional payments were received and 703,635, and 178,113 shares, respectively,
were issued. (See Note 15).
13. REPURCHASE OF STOCK
The Board of Directors has approved the repurchase of shares of the
Corporation's Common Stock. In 1992, the Corporation purchased 50,000 shares of
stock at an average price of $15.67. No such repurchases occurred during 1993
or 1994.
29
<PAGE>
14. QUARTERLY FINANCIAL DATA (Unaudited)
Summarized quarterly financial data for 1994 and 1993 is as follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Total Net Income
Revenues Net Income Per Share
-------- ---------- ----------
<S> <C> <C> <C>
1993:
- ------------
First $ 8,492 $ 1,172 $0.128
Second 9,728 2,428 0.187
Third 10,553 3,160 0.226
Fourth 12,406 3,086 0.208
------- ------- ------
$41,179 $ 9,846 $ .77
======= ======= ======
1994:
- ------------
First $12,800 $ 3,336 $0.221
Second 12,854 3,592 0.230
Third 12,947 3,724 0.234
Fourth 12,786 2,512 0.151
------- ------- ------
Total $51,387 $13,164 $ .84
======= ======= ======
</TABLE>
15. SUBSEQUENT EVENTS
Subsequent to December 31, 1994, the Corporation received a commitment for
new secured and unsecured revolving lines of credit. The secured facility will
have a $40.0 million capacity and be secured by certain properties on which
outstanding borrowings will bear interest at prime or IBOR plus 1.75%. The
unsecured facility will have a $10.0 million capacity and borrowings will bear
interest at prime or IBOR plus 2.00%. Both facilities will mature in June 1997.
Effective January 1, 1995 and until the new lines of credit are finalized, the
above rates will accrue on the Corporation's secured and unsecured lines of
credit which were in place at December 31, 1994.
Effective January 1, 1995, the Corporation temporarily suspended the
optional cash payment portion of the Dividend Reinvestment Plan.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
- -------------------------------------------------------------
The Corporation has had no disagreements with its independent auditors on
accounting or financial disclosure.
PART III
ITEMS 10 THROUGH 13.
- ----------------------
Incorporated by reference to the Corporation's Proxy Statement for its 1995
Annual Meeting to be filed subsequently hereto.
30
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------
(a) The following financial statements and Independent Auditors' Report are
included under Item 8.
Independent Auditors Report.
Balance sheets as of December 31, 1994 and 1993.
Statements of Income for each of the three years in the period ended
December 31, 1994.
Statements of Stockholders' Equity for each of the three years in the
period ended December 31, 1994.
Statements of Cash Flows for each of the three years in the period ended
December 31, 1994.
Notes to Financial Statements, December 31, 1994, 1993, and 1992.
The following Supplemental Financial Schedules are included herein:
III - Real Estate and Accumulated Depreciation.
All other schedules are omitted because of the absence of the conditions under
which they are required or because the required information is included in the
financial statements and notes.
(b) Reports on Form 8-K
-----------------------
No reports on Form 8-K were filed during the quarter ended December 31,
1994.
(c) Exhibits
------------
3.1 Articles of Incorporation of the Corporation, incorporated by
reference to Registration Statement No. 33-14571. Reference is also
made to pages A-4 through A-6 of Registration Statement No. 33-20489
for amendments adopted at the Corporation's Annual Meeting of
Shareholders on June 3, 1988.
3.2.1 Bylaws of the Corporation incorporated by reference to Amendment No.
2 to Registration Statement No. 33-14571, and for amendment thereto
to pages 3, 5 and 10-11 of the Corporation's Proxy Statement dated
October 21, 1987. Reference is also made to pages A-6 through A-8 of
the Registration Statement No. 33-20489 for amendments adopted at
the Corporation's Annual Meeting of Shareholders on June 3, 1988.
31
<PAGE>
3.2.2 Restated and Amended Bylaws effective May 3, 1994, subject to
Shareholder approval at the 1994 Annual Meeting.
4.1 Share certificate for Common Stock of the Corporation,
incorporated by reference to Exhibit 4.0 to Registration Statement
No. 33-20489.
4.2 Indenture for 8-1/2% Convertible Debentures Due 2002 dated as of
January 1, 1992, between the Corporation and Trustee (including
text of Debenture), incorporated by reference to Exhibit 4.1 to
Registration Statement No. 33-45160.
10.1 Stock Option Plan of the Corporation, as amended July 26, 1993,
incorporated by reference to Exhibit 10.1 filed with the
Corporations 1993 report on Form 10-K.
10.2.1 Bank of America NT&SA Loan Agreement dated October 19, 1992 for
$25,000,000 secured revolving line of credit and $5,000,000
unsecured revolving line of credit, incorporated by reference to
Exhibit 10.3 to Registration Statement No. 33-58024.
10.2.2 Bank of America NT&SA Modification Loan Agreement dated October 6,
1993 for $25,000,000 secured revolving line of credit, incorporated
by reference to Exhibit 10.2.2 filed with the Corporation's 1993
report on Form 10-K.
10.2.3 Bank of America NT&SA Modification Loan Agreement dated October 6,
1993 for $5,000,000 unsecured revolving line of credit,
incorporated by reference to Exhibit 10.2.3 filed with the
Corporation's 1993 report on Form 10-K.
10.3 Bank of America NT&SA Loan Agreement dated October 6, 1993 for
$35,000,000 non-revolving secured line of credit, incorporated by
reference to Exhibit 10.3 filed with the Corporation's 1993 report
on Form 10-K.
10.4 Bank of America NT&SA Loan Agreement dated July 26, 1994 for
$35,000,000, incorporated by reference to Exhibit 10.1 filed with
the Corporation's September 30, 1994 report on Form 10-Q.
23.1* Consent of Independent Auditors.
- -----------------------
*Exhibit enclosed with this filing.
32
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
FORM 10-K SCHEDULE III
DECEMBER 31, 1994
<TABLE>
<CAPTION>
COSTS CAPITALIZED
INITIAL COST TO COMPANY: SUBSEQUENT TO ACQUISITION:
BUILDINGS & CARRYING
PROPERTY ENCUMBRANCES LAND BUILDS & IMP LAND IMPROVEMENTS COSTS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BEVERLY GARLAND HOTEL 3,136,446 1,037,583 1,769,150 648,006 10,375,171 0
North Hollywood, California
INDEPENDENCE SQUARE 0 0 4,213,782 0 3,070,758 0
San Diego, California
NAVAJO SHOPPING CENTER 0 571,588 1,065,824 961,731 2,768,184 0
San Diego, California
VILLAGE STATION 4,000,000 307,143 847,841 528,426 4,501,739 0
San Diego, California
MESA SHOPPING CENTER 8,282,530 2,962,405 5,924,810 0 2,076,833 0
San Diego, California
SANTEE VILLAGE 0 3,019,122 4,528,684 0 596,798 0
Santee, California
A-STORAGE PLACE 0 522,174 1,064,377 0 133,749 0
Chula Vista, California
MIRAMAR BUSINESS PLAZA 0 0 3,759,067 0 7,866,607 0
San Diego, California
RUFFIN VILLAGE 0 0 3,779,139 0 221,407 0
San Diego, California
WIEGAND PLAZA II 7,786,969 4,986,224 9,279,037 414,463 1,615,499 0
Encinitas, California
IMED BUILDINGS 0 2,085,891 2,081,981 0 2,580,279 2,256
San Diego, California
MCDONNELL DOUGLAS BUILDING 0 3,388,440 17,785,111 0 71,971 18,959
San Diego, California
PLAZA RANCHO CARMEL 0 1,837,304 4,288,043 0 394,451 0
San Diego, California
POWAY PLAZA 0 2,747,538 6,413,725 0 246,824 0
Poway, California
HIGHLANDS PLAZA OFFICE 0 3,911,301 11,733,866 8,567 312,125 0
BUILDING
San Diego, California
LA MANCHA SHOPPING CENTER 1,903,502 2,202,830 5,981,355 99,473 412,550 0
Fullerton, California
FIREMEN'S FUND BUILDING 0 6,018,798 14,057,412 17,508 850,738 0
San Diego, California
MARCOA BUILDING 0 1,432,434 3,342,347 247 576 0
San Diego, California
POINT LOMA PLAZA 16,740,480 11,942,554 23,885,108 23,408 1,281,338 0
San Diego, California
SAN DIEGO FACTORY OUTLET 3,332,619 6,466,909 12,934,577 2,156,883 5,741,036 0
CENTER
San Ysidro, California
BERGEN BRUNSWIG BUILDING 9,823,003 7,878,067 15,756,135 10,549 77,731 0
Orange, California
ANACOMP BUILDING 0 7,467,253 14,934,506 6,747 13,503 0
Poway, California
JOHN BURNHAM & CO. BUILDING 0 200,000 1,800,000 37,840 106,929 0
San Diego, California
PACIFIC WEST OUTLET CENTER 0 11,660,208 23,342,431 0 7,730 0
Gilroy, California
THE PLAZA AT PUENTE HILLS 34,793,148 19,333,333 38,666,667 48,571 344,564 0
City of Industry, California
-----------------------------------------------------------------------------------------
TOTAL : $89,798,698 $101,979,099 $233,234,975 $4,962,419 $45,669,088 $21,215
=========================================================================================
<CAPTION>
AMOUNTS AT WHICH CARRIED
AT CLOSE OF PERIOD:
ACCUMULATED DATE
PROPERTY LAND BUILDS & IMP TOTAL DEPRECIATION ACQUIRED LIFE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BEVERLY GARLAND HOTEL 1,685,589 12,144,321 13,829,910 3,489,158 JUN 1973 10-33
North Hollywood, California
INDEPENDENCE SQUARE 0 7,284,540 7,284,540 2,261,868 SEP 1983 3-25
San Diego, California
NAVAJO SHOPPING CENTER 1,533,319 3,845,576 5,367,327 897,992 SEP 1983 3-15
San Diego, California
VILLAGE STATION 835,569 5,360,551 6,185,149 1,538,601 APR 1984 15
San Diego, California
MESA SHOPPING CENTER 2,962,405 8,001,643 10,964,048 3,066,570 JUN 1984 25
San Diego, California
SANTEE VILLAGE 3,019,122 5,125,482 8,144,604 1,734,806 JAN 1985 30
Santee, California
A-STORAGE PLACE 522,174 1,198,126 1,720,300 480,282 JAN 1985 25
Chula Vista, California
MIRAMAR BUSINESS PLAZA 0 11,625,674 11,625,674 3,292,390 DEC 1985 25
San Diego, California
RUFFIN VILLAGE 0 4,013,746 4,000,546 1,485,794 DEC 1985 25
San Diego, California
WIEGAND PLAZA II 5,400,687 10,894,536 16,295,222 2,923,333 SEP 1986 30
Encinitas, California
IMED BUILDINGS 2,085,891 4,662,260 6,748,151 1,120,466 MAY 1987 30
San Diego, California
MCDONNELL DOUGLAS BUILDING 3,388,440 17,857,082 21,245,522 4,429,169 JUL 1987 30
San Diego, California
PLAZA RANCHO CARMEL 1,837,304 4,682,494 6,519,798 1,104,320 JUL 1988 30
San Diego, California
POWAY PLAZA 2,747,538 6,660,549 9,408,087 1,417,822 OCT 1988 30
Poway, California
HIGHLANDS PLAZA OFFICE 3,919,868 12,045,991 15,965,859 1,842,838 DEC 1988 30
BUILDING
San Diego, California
LA MANCHA SHOPPING CENTER 2,302,303 6,393,905 8,696,208 3,769,174 DEC 1988 30
Fullerton, California
FIREMEN'S FUND BUILDING 6,036,306 14,908,150 20,944,455 2,331,145 JAN 1989 30
San Diego, California
MARCOA BUILDING 1,432,681 3,342,923 4,775,604 582,813 SEP 1989 30
San Diego, California
POINT LOMA PLAZA 11,965,962 25,166,446 37,132,408 4,339,845 DEC 1989 30
San Diego, California
SAN DIEGO FACTORY OUTLET 8,623,791 18,675,613 27,299,404 1,333,152 JUN 1992 30
CENTER
San Ysidro, California
BERGEN BRUNSWIG BUILDING 7,888,616 15,833,866 23,722,482 1,151,702 OCT 1992 30
Orange, California
ANACOMP BUILDING 7,474,000 14,948,009 22,422,009 996,096 DEC 1992 30
Poway, California
JOHN BURNHAM & CO. BUILDING 237,840 1,906,929 2,144,769 127,128 DEC 1992 30
San Diego, California
PACIFIC WEST OUTLET CENTER 11,660,208 23,350,161 35,010,369 1,296,900 APR 1993 30
Gilroy, California
THE PLAZA AT PUENTE HILLS 19,381,904 39,011,231 58,393,135 1,549,007 OCT 1993 30
City of Industry, California
------------ ------------ ------------ -----------
TOTAL : $106,941,518 $278,939,802 $385,881,321 $48,562,370
============ ============ ============ ===========
</TABLE>
See Notes to Schedule III on next page
33
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
FORM 10-K SCHEDULE III NOTES
December 31, 1994
Note 1: Fireman's Fund Building, Poway Plaza, Santee Village and Pacific West
Outlet Center are jointly encumbered under a secured revolving line of credit
agreement, under which $21,000,000 was outstanding at December 31, 1994, which
was not included in the table above.
Note 2: The amounts above do not include $2,077,040 of furniture, fixtures and
equipment and $944,022 of related accumulated depreciation which are also
classified with property in the financial statements.
Note 3: The aggregate cost for federal income tax purposes for buildings and
improvements December 31, 1994 was approximately $267,174,000.
Note 4: Reconciliation of Additions to real estate.
<TABLE>
<CAPTION>
Land
Buildings & Accumulated
Improvements Depreciation
<S> <C> <C>
Balance at December 31, 1992 $270,436,872 $31,782,935
Additions during period due to cash expenditures 99,630,743 8,238,761
Additions during period due to assumption of debt 6,459,000
Additions during period due to cancellation of
receivables 2,922,000
Additions during period in exchange for 146,382 shares
of Burnham Pacific Properties, Inc. stock valued at
$19.75/share 2,891,045
------------ ------------
Balance at December 31, 1993 $382,339,660 $40,021,696
Additions during period due to cash expenditures 3,541,661 8,540,674
------------ -----------
Balance at December 31, 1994 $385,881,321 $48,562,370
============ ===========
</TABLE>
34
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Burnham Pacific Properties, Inc.
By: //Malin Burnham//
------------------------
Malin Burnham, President
Dated: 3-20-95
---------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------------- --------------------- -------
<S> <C> <C>
//Malin Burnham// Chairman of the Board 3-20-95
- ------------------------------ -------
Malin Burnham
//Malin Burnham// President, Director 3-20-95
- ------------------------------ -------
Malin Burnham
//Henry Rasmussen, Jr.// Director 3-20-95
- ------------------------------ -------
Henry Rasmussen, Jr.
//Richard R. Tartre// Director 3-20-95
- ------------------------------ -------
Richard R. Tartre
//Philip L. Gildred, Jr.// Director 3-20-95
- ------------------------------ -------
Philip L. Gildred, Jr.
//Thomas A. Page// Director 3-20-95
- ------------------------------ -------
Thomas A. Page
//Robert J. Lauer// Director 3-20-95
- ------------------------------ -------
Robert J. Lauer
//Jeffrey R. Fisher// Vice President, 3-20-95
- ------------------------------ and Principal Accounting Officer -------
Jeffrey R. Fisher
</TABLE>
35
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Burnham Pacific Properties, Inc.:
We consent to the incorporation by reference in Registration Statement Nos. 33-
70080, 33-56555 and 33-68712 of Burnham Pacific Properties, Inc. on Forms S-3 of
our report dated February 17, 1995 appearing in this Annual Report on Form 10-K
of Burnham Pacific Properties, Inc. for the year ended December 31, 1994.
[sig of Deloitte & Touche LLP]
May 20, 1995
San Diego, California
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,664
<SECURITIES> 0
<RECEIVABLES> 9,881
<ALLOWANCES> 772
<INVENTORY> 0
<CURRENT-ASSETS> 19,569
<PP&E> 387,959
<DEPRECIATION> 49,506
<TOTAL-ASSETS> 358,022
<CURRENT-LIABILITIES> 3,752
<BONDS> 141,499
<COMMON> 260,262
0
0
<OTHER-SE> (47,491)
<TOTAL-LIABILITY-AND-EQUITY> 358,022
<SALES> 51,026
<TOTAL-REVENUES> 51,387
<CGS> 12,181
<TOTAL-COSTS> 12,181
<OTHER-EXPENSES> 14,158
<LOSS-PROVISION> 302
<INTEREST-EXPENSE> 11,582
<INCOME-PRETAX> 13,164
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,164
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,164
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
</TABLE>
