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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 30, 1997
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BURNHAM PACIFIC PROPERTIES, INC.
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(Exact name of Registrant as specified in its Charter)
Maryland
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(State or other jurisdiction of incorporation)
1-9524 33-0204162
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(Commission File Number) (IRS Employer Identification No.)
610 West Ash Street, San Diego, California 92101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 652-4700
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(former name of former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
A. Sacramento Portfolio Acquisition
On May 30, 1997, the Company purchased two retail shopping centers (the
"Sacramento Portfolio") in the Sacramento metropolitan area from an unrelated
seller for a purchase price of approximately $25,300,000. The portfolio
consists of the following two centers:
Company Owned Total
Center Name Location Square Footage Square Footage
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Stanford Ranch Rocklin, California 88,818 104,000
Auburn Village Auburn, California 133,956 185,000
The acquisition of the portfolio was financed by the assumption of a $6,536,902
mortgage loan from an insurance company, bearing interest at 7.875%, due in
September 2005, with the remainder financed with borrowings under the Company's
Credit Facility.
B. Olympiad Plaza Acquisition
On June 26, 1997, the Company purchased Olympiad Plaza in Mission Viejo, Orange
County, California from an unrelated seller for a purchase price of
approximately $10,200,000. The center consists of an approximately 45,000
square foot Lucky's supermarket, which is owned by Lucky's and approximately
45,600 square feet of GLA acquired by the Company. The acquisition was effected
with borrowings under the Company's Credit Facility and the issuance of
partnership units by a newly-organized partnership of which the Company is the
general partner and the seller is the limited partner, which units are
exchangeable for approximately 151 shares of common stock of the Company.
ITEM 7. FINANCIAL STATEMENTS AND PRO FORMA INFORMATION
Neither the Sacramento Portfolio nor Olympiad Plaza, separately or in the
aggregate, constitutes the acquisition of properties that are "significant"
within the contemplation of Item 2 under Form 8-K or Rule 3-14 of Regulation
S-X, i.e., assets whose acquisition cost is in excess of 10% of the gross
carrying value of the Company's assets at December 31, 1996. However, the
purchase price of the Sacramento Portfolio does represent more than 5% of
such value of the Company's assets at December 31, 1996, and the Company is
accordingly filing the financial statements listed below:
(a) Financial Statements
Attachment (I) - The Sacramento Portfolio Historical Statement of Revenues and
Direct Operating Expenses for the year ended December 31, 1996 and related notes
and Independent Auditors' Report, filed in accordance with Rule 3.14(a)(1) of
Regulation S-X. (In assessing the properties contained in the Sacramento
Portfolio, the Company considered a number of factors for each property
including (i) historical and projected operating results; (ii) the property's
age and construction quality; (iii) the quality of tenants at the property and
the terms of existing leases; (iv) demographics and economic conditions in the
related property's primary trade area; (v) changes in revenues reasonable to
expect following tenanting of vacant spaces and re-tenanting of existing
occupied spaces; (vi) the terms of the assumed mortgage loan; (vii) current and
anticipated market conditions; and (viii) potential capital expenditures. After
reasonable inquiry, the Company is not aware of any material factors relating to
the Sacramento Portfolio other than those described in the preceding sentence
that would cause the reported financial information not to be necessarily
indicative of future operating results.)
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(b) Attachment (II) - Statement of Estimated Taxable Operating Results of the
Sacramento Portfolio and Estimated Cash to be Made Available by Operations of
the Sacramento Portfolio for a Twelve-Month Period (unaudited), filed in
accordance with Rule 3.14(a)(2) of Regulation S-X.
(c) Exhibits
23.1 Consent of Deloitte & Touche, LLP
In addition to Olympiad Plaza, the Company has made two other acquisitions
subsequent to December 31, 1996 (Foothill Plaza on February 28, 1997 and
Crenshaw Imperial on April 3 - see Item 5 of Form 8-KA filed April 15, 1997) for
which the Company has not filed financial statements consistent with Rule 3-14,
all of these three properties being in the aggregate not significant.
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.
BURNHAM PACIFIC PROPERTIES, INC.
Date: //8-6-97// By: //Daniel B. Platt//
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Daniel B. Platt, Chief Financial Officer
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ATTACHMENT I
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Burnham Pacific Properties, Inc.:
We have audited the accompanying historical statement of revenues and direct
operating expenses of the Sacramento Portfolio (the "Centers") for the year
ended December 31, 1996. This historical statement is the responsibility of the
Center's management. Our responsibility is to express an opinion on this
historical statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
statement. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying historical statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission. It
excludes certain material revenues and expenses, described in Note 1, and is not
intended to be a complete presentation of the Center's revenues and expenses.
In our opinion, such historical statement presents fairly, in all material
respects, the revenues and direct operating expenses, as described in Note 1, of
the Center for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
San Diego, California
March 12, 1997
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THE SACRAMENTO PORTFOLIO
HISTORICAL STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
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<TABLE>
<CAPTION>
<S> <C>
REVENUES:
Rental revenue $ 2,364,880
Common area maintenance revenues 454,866
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Total revenues 2,819,746
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DIRECT OPERATING EXPENSES:
Property taxes 249,719
General maintenance and repair 106,823
Management fees 95,846
Utilities 94,366
Bad debt expense 51,058
Insurance 25,166
Parking lot maintenance 21,933
General and administrative 17,933
Legal 17,406
Security 4,435
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Total direct operating expenses 684,685
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EXCESS OF REVENUES OVER DIRECT OPERATING EXPENSES $ 2,135,061
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See accompanying note to historical statement of revenues and direct operating
expenses.
</TABLE>
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THE SACRAMENTO PORTFOLIO
NOTE TO HISTORICAL STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - Revenues and direct operating expenses are
presented on the accrual basis of accounting. The accompanying historical
statement of revenue and direct operating expenses relates to the
operations of the Sacramento Portfolio (the "Centers") and has been
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. The Sacramento Portfolio consists of
Auburn Village Shopping Center, located in Auburn, California and Stanford
Ranch Shopping Center, located in Rocklin, California.
Certain revenues, costs and expenses that are dependent on the ownership,
management and carrying value of the Center have been excluded from the
accompanying historical statement. The excluded revenues consist of
nonoperating revenue related to the Centers. The excluded expenses consist
primarily of interest and depreciation and amortization of the Centers.
Consequently, the excess of revenues over direct operating expenses as
presented is neither intended to be a complete presentation of the Center's
historical revenues and expenses nor intended to be comparable to the
proposed future operations of the property.
REVENUE RECOGNITION - Shopping center space is generally leased to retail
tenants under various arrangements which are accounted for as operating
leases. Minimum rents are recognized on an accrual basis as earned, the
result of which does not differ materially from the straight-line basis.
Certain leases contain provisions for percentage rents, which are recorded
when earned. Reimbursable expenses such as common area maintenance, real
estate and insurance are recognized as revenue in the period the applicable
costs are accrued.
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ATTACHMENT II
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENT OF ESTIMATED TAXABLE OPERATING
RESULTS OF THE SACRAMENTO PORTFOLIO AND ESTIMATED CASH TO BE
MADE AVAILABLE BY OPERATIONS OF THE SACRAMENTO PORTFOLIO
FOR A TWELVE-MONTH PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
REVENUES: (IN THOUSANDS)
Rents $2,365
Reimbursed Expenses 455
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Total 2,820
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COSTS AND EXPENSES:
Rental Operating Expenses 685
Depreciation 562
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Total 1,247
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Estimated Taxable Operating Income 1,573
Add Back Depreciation 562
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Estimated Cash to be Made Available by Operations $2,135
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</TABLE>
Note
This statement of estimated taxable operating results and estimated cash to be
made available from operations is an estimate of operating results of The
Sacramento Portfolio for a period of twelve months based on information provided
by the seller of the property and by management's independent review of the
leases and other documents and does not purport to reflect actual results for
any period.
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Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-10559 on Form S-8 and 333-31591 on Form S-3 of Burnham Pacific
Properties, Inc. of our report dated March 12, 1997 on the Sacramento
Portfolio Historical Statement of Revenues and Direct Operating Expenses for
the year ended December 31, 1996, included in this Form 8-K of Burnham
Pacific Properties, Inc.
//Deloitte & Touche LLP//
San Diego, California
August 1, 1997
