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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 10, 1997
REGISTRATION NO. 33-68712
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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BURNHAM PACIFIC PROPERTIES, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
CALIFORNIA 33-0204162
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
</TABLE>
610 WEST ASH STREET
SUITE 1600
SAN DIEGO, CALIFORNIA 92101
(619) 652-4700
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)
DANIEL B. PLATT
610 West Ash Street
Suite 1600
San Diego, California 92101
(619) 652-4700
(Name, address, including zip code, and
and telephone, including area code of
agent for service)
COPY TO:
WILLIAM B. KING, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
(617) 570-1000
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PROSPECTUS
BURNHAM PACIFIC PROPERTIES, INC.
SHARES OF COMMON STOCK
AND/OR
CONVERTIBLE DEBENTURES
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Any combination of shares of Common Stock, without par value (the "Shares"),
and/or Convertible Debentures, issuable in series (the "Debentures"), valued in
the aggregate at a maximum of $200,000,000, are being offered from time to time
(the "Offerings(s)") by Burnham Pacific Properties, Inc., (the "Corporation") a
California corporation. The Corporation is a real estate investment trust under
the Internal Revenue Code of 1986, as amended (the "Code"). The Shares and
Debentures are hereinafter collectively referred to as the "Securities." When a
particular Offering of the Securities is proposed, a supplement to this
Prospectus (the "Prospectus Supplement") will be delivered with this Prospectus
setting forth: the type and amount of Securities offered; the purchase price and
other terms of the offering; and any listing on a securities exchange; and, if
Debentures are offered, the rate and time of payment of interest; the maturity
or maturities; the initial price and date after which such Debentures may be
converted into Common Stock; the terms for a sinking, purchase or analogous
fund, if any; and the terms for redemption or early payment.
The Securities may be sold: (i) through underwriting syndicates represented
by one or more managing underwriters, or by one or more underwriters without a
syndicate; (ii) through agents designated from time to time; and (iii) directly
to institutional investors. The names of any underwriters or agents of the
Corporation involved in the sale of the Securities in which this Prospectus is
being delivered and any applicable commissions or discounts will be set forth in
the Prospectus Supplement. The net proceeds to the Corporation from such sale
also will be set forth in the Prospectus Supplement.
The Corporation's shares of Common Stock are traded on the New York Stock
Exchange under the symbol "BPP." On January 22, 1997, the closing sale price of
such shares on the New York Stock Exchange was $14 5/8 per share.
The Debentures will be unsecured general obligations of the Corporation
issuable in one or more series and will be subordinated to all existing and
future Senior Indebtedness (as defined herein) of the Corporation. The indenture
under which the Debentures will be issued does not restrict the amount of Senior
Indebtedness or other indebtedness that may be incurred by the Corporation. As
of December 31, 1996, the Corporation had approximately $179,000,000 of Senior
Indebtedness.
There is currently no market for the Debentures.
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No offers or sales will be made except through a Supplement Prospectus.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is February 10, 1997.
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AVAILABLE INFORMATION
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
any accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Corporation or any underwriter, dealer or agent. Neither the delivery of this
Prospectus or any accompanying Prospectus Supplement nor any sale made hereunder
or thereunder shall, under any circumstances, create an implication that the
information contained herein or in the accompanying Prospectus Supplement is
correct as of any date subsequent to the date hereof or thereof or that there
has been no change in the affairs of the Corporation since the date hereof or
thereof. Neither this Prospectus nor any accompanying Prospectus Supplement
constitutes an offer to sell or a solicitation of an offer to buy Securities in
any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such offer or solicitation.
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files periodic and current reports and other information with the
Securities and Exchange Commission (the "Commission"). Information concerning
the directors and officers, their remuneration and any material interest of such
persons in transactions with the Corporation, as of particular dates, is
disclosed in proxy statements distributed to shareholders of the Corporation and
filed with the Commission. Copies of such material can be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements and
other information can also be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at 500
West Madison Street (Suite 1400), Chicago, Illinois 60661 and at 7 World Trade
Center, 13th Floor, New York, New York 10048 and at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. The Commission
also maintains a Web site that contains reports, proxy statements and other
information about the Corporation filed electronically with the Commission:
http://www.sec.gov.
The Corporation furnishes to its securities holders annual reports
containing audited financial statements and interim reports containing unaudited
financial statements.
The Corporation has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, copies of
which may be obtained upon payment of a fee prescribed by the Commission, or may
be examined free of charge at the principal office of the Commission in
Washington, D.C.
Statements made in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference its Annual Report on Form
10-K for the year ended December 31, 1995 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 1996, June 30, 1996 and September 30,
1996.
All documents subsequently filed by the Corporation pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this Prospectus and
prior to the termination of the offering of the Shares or
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Debentures shall be deemed to be incorporated by reference in this Prospectus
and to be a part thereof from the date of the filing of such documents. Any
statement contained in a document incorporated by reference shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed incorporated
document or in an accompanying Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
UPON WRITTEN OR ORAL REQUEST OF ANY PERSON TO WHOM A PROSPECTUS IS
DELIVERED, THE CORPORATION WILL PROVIDE, WITHOUT CHARGE, A COPY OF THE DOCUMENTS
WHICH HAVE BEEN INCORPORATED BY REFERENCE IN THIS PROSPECTUS. REQUESTS FOR SUCH
DOCUMENTS SHOULD BE DIRECTED TO NINA GALLOWAY, VICE PRESIDENT AND SECRETARY,
BURNHAM PACIFIC PROPERTIES, INC., 610 WEST ASH STREET, SUITE 1600, SAN DIEGO,
CALIFORNIA 92101, (619) 652-4725.
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THE CORPORATION
Burnham Pacific Properties, Inc. (the "Corporation") is a real estate
investment trust ("REIT") that acquires, develops, and operates primarily retail
shopping centers in California. The Corporation's strategic focus is to invest
in shopping centers and other retail or entertainment centers in California and
the Pacific Northwest, taking advantage of the region's growth prospects
resulting from its Pacific Rim location, quality of life, diversified business
base, and well-educated employee base. The Corporation's operating philosophy is
to enhance the performance and value of its portfolio through renovation,
expansion, and leasing strategies designed to meet the needs of an evolving
retail marketplace. The Corporation also seeks to create value through the
acquisition of properties which can benefit from the Corporation's expertise in
shopping center management, renovation and expansion, as well as the development
of new properties.
At December 31, 1996, the Corporation owned interests in 21 retail centers,
all located in California, 16 of which were fully operating, one of which was
operating but undergoing renovation and expansion, and four of which were in
various stages of development by the Corporation or an affiliate. The
Corporation also owned four industrial and office properties in Southern
California, which are considered non-strategic. The Corporation intends to
dispose of the non-strategic properties in the future as market conditions
permit. The properties owned by the Corporation from time to time are sometimes
referred to herein as the "Properties."
The Corporation was formed in 1987 as the successor to a publicly-traded
real estate limited partnership which was organized in 1963.
Reference is made to the applicable Prospectus Supplement accompanying this
Prospectus for additional information concerning the Corporation as of the date
of such Prospectus Supplement.
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) 652-4700.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED
----------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996
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(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........................ 1.24 1.09 1.94 2.13 -- 1.78
Deficiency in the coverage of fixed charges by earnings
before fixed charges..................................... -- -- -- -- $ 15,048 --
</TABLE>
The ratio of earnings to fixed charges equals earnings before fixed charges
divided by fixed charges. For purposes of calculating the ratio of earnings to
fixed charges, earnings before fixed charges consist of income from operations
plus fixed charges. Fixed charges consist of interest expense and capitalized
interest.
Exclusive of the impairments/writedowns of assets, the ratio of earnings to
fixed charges for the year ended December 31, 1995, would have been 1.61.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Corporation intends to use the net proceeds from the sale of Securities
primarily to repay indebtedness, to acquire additional shopping centers or other
retail or entertainment facilities and to fund the development, expansion and/or
improvement of new or existing shopping centers or other retail or entertainment
centers already owned by the Corporation.
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The Corporation continually evaluates prospective acquisitions of additional
individual properties and portfolios of shopping centers or other retail or
entertainment centers, which the Corporation believes can be purchased at
attractive initial yields and/or which demonstrate the potential for revenue and
cash flow growth through implementation of renovation, expansion, re-tenanting
and re-leasing programs similar to those that the Corporation has undertaken
with respect to retail properties in its existing portfolio.
The Corporation has a revolving line of credit which it may draw on for
acquisitions as well as for other general corporate purposes including
renovations and expansions of existing properties and the development of new
properties. It is the Corporation's expectation that net proceeds from the sale
of the Securities will be used to make further acquisitions and also to repay
such bank borrowings and other outstanding debt from time to time.
Acquisitions or development of additional properties are approved only after
a detailed analysis by the Corporation's management of the effect of the
acquisition (and of any contemplated development, expansion or renovation and
related re-tenanting and re-leasing program with respect to the acquired
properties) on the Corporation as a whole, and with the objective that the
acquisition of the particular shopping centers ultimately be accretive, rather
than dilutive, to outstanding shares of Common Stock (i.e., that anticipated per
share funds from operations of the Corporation will increase following the
acquisition and development and redevelopment and related lease-up of the
properties and after giving effect to the cost to the Corporation of the
additional capital used to make such acquisition). No assurance can be made that
each acquisition or development will in fact be accretive, or may not become so
only after an initially dilutive period following the acquisition and completion
of any development or renovation activities.
Pending their use as described above, the net proceeds from the sale of any
Securities may be used for other general corporate purposes of the Corporation
or invested in short-term securities.
RISK FACTORS
Prospective investors should carefully consider the following information in
conjunction with the other information contained in this Prospectus and the
applicable Prospectus Supplement before purchasing any Securities.
GENERAL REAL ESTATE INVESTMENT RISKS
Real property investments are subject to a variety of risks. The yields
available from equity investments in real estate depend on the amount of income
generated and expenses incurred. If the Properties do not generate sufficient
income to meet operating expenses, including debt service and capital
expenditures, the Corporation's cash flow and ability to make distributions to
its shareholders will be adversely affected. The performance of the economy in
each of the areas in which the Corporation's properties are located affects
occupancy, market rental rates and expenses and, consequently, has an impact on
the income from the properties and their underlying values. The financial
results of major local employers may have an impact on the cash flow and value
of certain of the properties.
Income from the Corporation's Properties may be further adversely affected
by, among other things, the general economic climate, local economic conditions
in which the Properties are located, such as oversupply of space or a reduction
in demand for rental space, the attractiveness of the Properties to tenants,
competition from other available space, the ability of the Corporation to
provide for adequate maintenance and insurance and increased operating expenses.
There is also the risk that as leases on the Properties expire, tenants will
enter into new leases on terms that are less favorable to the Corporation.
Income and real estate values may also be adversely affected by such factors as
applicable laws (e.g., the Americans With Disabilities Act of 1990 and tax
laws), interest rate levels and the availability and terms of financing. In
addition, real estate investments are relatively illiquid and, therefore, will
tend to limit the ability of the Corporation to vary its portfolio promptly in
response to change in economic or other conditions.
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Most of the leases of the Corporation's retail Properties, as is common with
many multi-tenant shopping centers, provide for tenants to reimburse the
Corporation for a portion (frequently based upon the portion of total retail
space in the Property that is occupied by the tenant) of the common area
maintenance ("CAM") expenses of the Property. To the extent that a Property has
vacant rentable space, not only will the Corporation be deprived of the base
rent that it would receive if the vacant space were occupied, but the
Corporation itself will have to bear the unreimbursed CAM expense applicable to
such vacant space.
COMPETITION
Numerous retail properties compete with the Corporation's Properties in
attracting tenants to lease space. Some of these competing properties are newer
and better located or designed and may offer lower expenses or be better
capitalized than the Corporation's Properties. The number of competitive
commercial properties in a particular area could have a material effect on the
Corporation's ability to lease space in its Properties or at newly developed or
acquired properties and on the rents charged.
Additionally, the Corporation may be competing for investment opportunities
with entities that have substantially greater financial resources than the
Corporation. These entities may generally be able to accept more risk that the
Corporation can prudently manage, including risks with respect to the geographic
proximity of its investments. Competition may generally reduce the number of
suitable investment opportunities offered to the Corporation and increase the
bargaining power of property owners seeking to sell.
INVESTMENT IN SINGLE INDUSTRY
The Corporation's current strategy is to acquire interests only in retail
shopping centers and related properties. As a result, the Corporation will be
subject to risks inherent in investments in a single industry. The effects on
cash available for distribution to the Corporation's shareholders resulting from
a downturn in the retail industry might be more pronounced than if the
Corporation's portfolio were more diversified as to property types.
Among the risks that the Corporation as an owner of Properties leased
primarily to retail tenants may face are the volatile nature of the retail
business and changes in consumer preferences, which may result in tenant
failures or changes in the physical requirements of retailers that the owner may
be required to accommodate in order to retain or attract tenants. Retail chains
may overexpand in the same general market area, thereby creating competition
with their own stores that may be in one or more of the Corporation's
Properties. Because many anchor tenants frequently have negotiating power to
demand the exclusive or sole right to sell certain types of products in a
shopping center, the existence of such rights may adversely limit the owner's
ability to lease space in the center to retailers of potentially competing
products. The foregoing and similar factors may effect the profitability and
cash flow, and resulting value, of the Corporation's Properties.
GEOGRAPHIC CONCENTRATION
The Corporation's Properties are all located within the State of California,
and within such state primarily in the San Diego County, greater Los Angeles and
San Francisco Bay areas. The concentration of Properties subjects the
Corporation to the strengths or weaknesses of the California economy and these
local economies in a number of ways. The performance of the economy in each
locality affects occupancy, market rental rates and expenses and, consequently,
has an impact on the income from the Corporation's Properties and their
underlying values. The financial results of major local employers may have an
impact on the cash flow and value of certain of the Properties. A downturn in
the economy of California in general or of any of these local economies could
adversely affect the Corporation's income, cash flows and ability to pay
expected dividends.
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ACQUISITION AND DEVELOPMENT ACTIVITIES
The Corporation intends to acquire existing retail commercial properties to
the extent that they can be acquired on advantageous terms and meet the
Corporation's investment criteria. Acquisitions of retail commercial properties
entail general investment risks associated with any real estate investment,
including the risk that investments will fail to perform as expected or that
estimates of the cost of improvements to bring an acquired property up to
standards established for the intended market position may prove inaccurate.
The Corporation is pursuing certain commercial property development projects
and expects to develop other projects. Such projects generally require various
governmental and other approvals, the receipt of which cannot be assured.
Approvals frequently require undertakings for public infrastructure improvements
or other activities to mitigate the effects of the proposed development, whose
costs also cannot be assured. The Corporation's development activities will
entail a variety of other risks, including the risk that funds will be expended
and management time will be devoted to projects which may not come to fruition;
the risk that construction costs of a project may exceed original estimates,
possibly making the project uneconomic; the risk that occupancy rates and rents
at a completed project will be less than anticipated; and the risk that expenses
at a completed development will be higher than anticipated. These risks may
result in a reduction in the funds available for distribution.
DEBT FINANCING; RISK OF RISING INTEREST RATES
The Corporation will be subject to the risks normally associated with debt
financing, including the risk that the Corporation's cash flow will be
insufficient to meet required payments of principal and interest, the risk that
existing indebtedness on the Corporation's Properties cannot be refinanced or
that the terms of such refinancing will not be as favorable as the terms of
existing indebtedness.
ENVIRONMENTAL MATTERS
Under various federal, state and local laws, ordinances and regulations, an
owner or operator of real estate is liable for the costs of removal or
remediation of certain hazardous or toxic substances on or in such property.
Such laws often impose such liability without regard to whether the owner or
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect the owner's or operator's
ability to sell or rent such property or to borrow using such property as
collateral. Certain environmental laws impose liability for release of
asbestos-containing materials into the air, and third parties may seek recovery
from owners or operators of real properties for personal injuries associated
with asbestos-containing materials. The Corporation may be potentially liable
for removal or remediation costs, as well as certain other costs, including
governmental fines and costs related to injuries to persons and property,
resulting from the environmental condition of its Properties, regardless of
whether the Corporation itself actually contributed to such condition.
INSURANCE COVERAGE LIMITATIONS
The Corporation carries comprehensive general liability coverage and
umbrella liability coverage on all of its Properties with limits of liability
which the Corporation deems adequate to insure against liability claims and
provide for the cost of defense. Similarly, the Corporation is insured against
the risk of direct physical damage in amounts the Corporation estimates to be
adequate to reimburse the Corporation on a replacement cost basis for costs
incurred to repair or rebuild each property, including loss of rental income
during the reconstruction period. Currently, the Corporation also insures
certain of its Properties for loss caused by earthquake in the aggregate amount
of $23 million. Because of the high cost of this type of insurance coverage and
the wide fluctuations in price and availability, the Corporation has made the
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determination that the risk of loss due to earthquake and flood does not justify
the cost to increase coverage limits any further under current market
conditions.
CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
The Company has operated so as to qualify as a REIT under the Internal
Revenue Code of 1986, as amended (the "Code"). Although the Corporation believes
that it has operated in a manner which satisfies the REIT qualification
requirements since 1987, no assurance can be given that the Corporation's
qualification as a REIT may not be challenged by the Internal Revenue Service
for taxable years still subject to audit or that the Corporation will continue
to qualify as a REIT in future years. A REIT generally is not taxed on income so
long as it distributes to its shareholders at least 95% of its taxable income
currently. Qualification as a REIT involves the satisfaction of numerous
requirements (some on an annual or quarterly basis) established under highly
technical and complex Code provisions for which there are only limited judicial
or administrative interpretations and involves the determination of various
factual matters and circumstances not entirely within the Corporation's control.
In the event the Corporation loses its qualification as a REIT for a year,
unless entitled to relief under certain statutory provisions, the Corporation
would also be disqualified from treatment as a REIT for the four taxable years
following the year during which qualification is lost. This treatment would
reduce the net earnings of the Corporation available for investment or
distribution to shareholders because of the additional tax liability of the
Corporation for the years involved. In addition, distributions would no longer
be required to be made. See "Federal Income Tax Considerations."
AUTHORITY TO ISSUE PREFERRED STOCK
The Articles of Incorporation authorize the Board of Directors to issue up
to 5,000,000 shares of Preference Stock ("Preferred Stock") and to establish the
preferences and rights of any shares issued. See "Description of Common Stock."
The issuance of Preferred Stock would likely result in the holders of the
Preferred Stock being entitled to priority in distributions, thereby potentially
reducing cash available for distribution to holders of Common Stock, and upon
the liquidation of the Corporation. In addition, the issuance of Preferred Stock
could involve the creation of voting rights for the holders of Preferred Stock
that might result in their voting as a class with the holders of Common Stock or
as a separate class on certain matters, including the election of one or more
Directors of the Corporation. No Shares of Preferred Stock are currently issued
or outstanding.
EFFECT OF VARIOUS MARKET FACTORS ON PRICE OF COMMON STOCK
A variety of factors may influence the price of the Corporation's Common
Stock in public trading markets. The Corporation believes that investors
generally perceive REITs as yield-driven investments and compare the annual
yield from distributions by REITs with yields on various other types of
financial instruments. Thus an increase in market interest rates generally that
result in higher yields on various other financial instruments could adversely
affect the market price of the Corporation's Common Stock. Similarly, to the
extent that the investing public has a negative perception of companies in the
retail business or REITs that own and operate shopping centers and other
properties catering to retail tenants, the value of the Corporation's Common
Stock may be negatively impacted in comparison to shares of other REITs owning
other types of properties and catering to different types of tenants.
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DESCRIPTION OF COMMON STOCK
The Corporation is authorized to issue 40,000,000 shares of Common Stock
("Common Stock") and 5,000,000 shares of Preferred Stock, each without stated
par value. The shareholders are authorized to vote on all matters entitled to be
voted upon by shareholders as provided in the California Corporations Code. At
each election of Directors, each holder of Common Stock is entitled to vote the
number of shares of Common Stock held by the shareholder for as many persons as
there are Directors to be elected by vote of the holders of Common Stock, or to
cumulate the shareholder's votes by giving one candidate as many votes as equal
the number of shares of Common Stock held by the shareholder multiplied by the
number of Directors to be elected by such holders, or by distributing such votes
on the same principle among any number of such candidates. Holders of Common
Stock do not have the right to vote on the acquisition or sale of any of the
Corporation's investments (other than upon the dissolution of the Corporation or
other disposition of substantially all of the Corporation's assets) or on the
issuance of additional shares of authorized Common Stock or Preferred Stock.
Subject to any prior rights of any Preferred Stock, each outstanding share
of Common Stock has equal dividend and liquidation rights with every other
outstanding share of Common Stock. Shares of Common Stock are non-assessable and
have no preference, conversion, exchange or preemptive rights. Shareholders have
no liability for the acts or obligations of the Corporation. The shares of
Common Stock are transferable on the books or records of the Corporation in the
same manner as shares of Common Stock of any other California corporation. The
Corporation's shares of Common Stock are listed for trading on the New York
Stock Exchange. Any shares of Common Stock offered hereby will also be listed on
the New York Stock Exchange subject to official notice of issuance thereof.
REDEMPTION AND RESTRICTION ON TRANSFER OF SHARES. Under the provisions of
the Code, one of the requirements for qualification as a REIT is that at no time
during the second half of any taxable year may five or fewer individuals own,
directly or indirectly, more than 50% in value of the outstanding shares of
stock of the REIT.
In order that the Corporation may meet this requirement at all times, its
Bylaws provide that no person shall at any time directly or indirectly acquire
ownership of more than 9.8% of the outstanding shares of Common Stock of the
Corporation. Shares owned by persons in excess of that amount are deemed "Excess
Shares." For purposes of determining indirect ownership, the constructive
ownership provisions applicable under Section 544(a) of the Code attribute
ownership of stock owned by a corporation, partnership, estate or trust
proportionately to its shareholders, partners or beneficiaries, attribute
ownership of stock owned by family members to other members of the same family,
treat stock for which a person has an option as actually owned by that person,
and set forth rules as to when stock constructively owned by a person is
considered to be actually owned by such person. Accordingly, shares of Common
Stock owned by a person who actually owns less than 9.8% of those outstanding
may nevertheless be Excess Shares where one or more of the foregoing
relationships exists.
The Bylaws provide that the Corporation may redeem any shares that are
Excess Shares. From the date of notice of redemption, the shares called for
redemption shall cease to be outstanding. The holder shall not be entitled to
dividends, voting rights or other benefits except the right to payment by the
Corporation of the redemption price. The redemption price will be the average
closing sales price as reported by a national securities exchange during the
30-day period ending on the business day prior to the redemption date or, if
there have been no closing sales, the bid and asked prices, as determined by the
Directors. The Bylaws further provide that unless the Directors determine that
it is in the interest of the Corporation to make earlier payment, the redemption
price shall be payable only upon liquidation of the Corporation. The payment
shall not exceed the amount which is the sum of the per-share distributions
designated as (i) liquidating distributions, and (ii) return of capital
distributions declared with respect to unredeemed shares subsequent to the
redemption date (i.e., the amount per share that a shareholder whose shares are
not redeemed would receive upon liquidation of the Corporation). However, if the
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person from whom the Excess Shares were redeemed sells a like number of shares
within 30 days of the redemption date, the Corporation shall rescind the
redemption of the Excess Shares unless counsel to the Corporation is of the
opinion that such rescission would jeopardize the Corporation's tax status as a
REIT. In that event, in lieu of rescission, the Corporation shall make immediate
payment for the shares.
The Bylaws authorize the Corporation to refuse to effect the transfer of any
shares which would result in a person holding Excess Shares, and also provide
that any purported acquisition of shares that would result in the
disqualification of the Corporation as a REIT shall be null and void.
The Bylaws provide that the foregoing provision shall not apply to
acquisition of shares pursuant to a cash tender offer made for all outstanding
shares of the Corporation if two-thirds of the outstanding shares not owned by
the tender offeror and its associates are tendered pursuant to the offer. Such
provisions also do not apply to the acquisition of shares by an underwriter in a
public offering or to any transaction involving the issuance of shares by the
Corporation when its Board of Directors determines that its qualification as a
REIT would not be jeopardized.
The Bylaws also grant the Board of Directors the authority to cause the
Corporation, from time to time, to repurchase its shares.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the
shares of Common Stock is First Chicago Trust Company of New York.
PREFERRED STOCK. The Board of Directors of the Corporation has authority to
issue up to 5,000,000 shares of Preferred Stock, which may be issued in one or
more series with such rights, preferences, privileges and restrictions as are
designated and established by the Board. No shares of Preferred Stock are
outstanding and the Board of Directors has not established any series of
Preferred Stock. The terms of any series of Preferred Stock established
subsequent to the date of this Prospectus will be disclosed in an amendment
hereto or in a Prospectus Supplement appended hereto.
DESCRIPTION OF DEBENTURES
The Debentures will be issued in one or more series under an Indenture which
may be supplemented by supplemental indentures (the "Indenture") between the
Corporation and Fleet Bank of Massachusetts, N.A., as Trustee or other Trustee
named in an applicable Prospective Supplement (the "Trustee"). The terms of the
Debentures include those stated in the Indenture and those made part of the
Indenture (before any supplements) by reference to the Trust Indenture Act of
1939, as amended (the "Act"). A copy of the form of the Indenture is filed as an
exhibit to the Registration Statement and is incorporated herein by reference.
The following is a summary of the Indenture, does not purport to the complete,
and is qualified in its entirety by reference to the detailed provisions of the
Indenture, including the definitions of certain terms. Parentical references to
Sections are references to the corresponding section of the Indenture unless
otherwise indicated.
GENERAL. The Indenture does not limit the aggregate principal amount of
Debentures that may be issued thereunder and provides that Debentures may be
issued from time to time in one or more series. The Debentures will be unsecured
general obligations of the Corporation which may be convertible into shares of
Common Stock of the Corporation. Debentures of any series will bear interest
from the date of delivery at the rate shown on the cover page of the applicable
Prospectus Supplement. Principal (and premium, if any) and interest will be
payable, the Debentures will be convertible and exchangeable, and transfers will
be registrable, at the office or agency of the Corporation maintained for such
purposes, initially at the offices of the Trustee. The Corporation may pay
principal and interest by check and may mail an interest check to the address of
the person entitled thereto as it appears in the Debenture Register (Paragraph 2
of the Debenture).
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The Debentures will be issued only in fully registered form in denominations
of $1,000 principal amount or any integral multiple thereof (Section 2.03). The
Debentures are exchangeable and transfers thereof will be registrable without
charge therefor except that, the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith (Section 2.06).
CONVERSION RIGHTS. Any portion of the principal amount of any Debentures of
any series which is $1,000 or an integral multiple thereof will be convertible
into shares of Common Stock of the Corporation at any time prior to redemption
or maturity, following the date set forth in the applicable Prospectus
Supplement. The conversion price will be set forth on the cover of the
applicable Prospectus Supplement (subject to adjustments as described below),
except that the right to convert Debentures of a series called for redemption
will terminate at the close of business on the specific redemption date and will
be lost if not exercised prior to that time (Section 10.01).
To protect the Corporation's status as a REIT, a Holder may not convert any
Debenture, if as a result of such conversion any Person would then be deemed to
beneficially own 9.8% or more in value of the Corporation's shares (Paragraph 7
of the Debenture).
The conversion price will be subject to adjustment under certain conditions,
including (i) the payment of dividends (and other distributions) in shares of
Common Stock on any class of shares of capital stock of the Corporation; (ii)
subdivisions, combinations and reclassifications of shares of Common Stock;
(iii) the issuance to all or substantially all holders of shares of Common Stock
of rights or warrants entitling them to subscribe for or purchase shares of
Common Stock at a price per share (or having a conversion price per share) at
less than the current market price; as defined (but shares of Common Stock
issued under the Corporation's dividend reinvestment plan or stock option plan
will not be deemed to be issued pursuant to rights or warrants for this
purpose); and (iv) distributions to all or substantially all holders of shares
of Common Stock of any other class, or evidences of indebtedness or assets
(including securities, but excluding those rights, warrants, dividends and
distributions referred to above and dividends and distributions not prohibited
under the terms of the Indenture including purchase rights under the dividend
reinvestment plan) of the Corporation; subject to the limitation that all
adjustments by reason of any of the foregoing would not be made until they
result in a cumulative change in the conversion price of at least 1%. In the
event the Corporation shall effect any capital reorganization or
reclassification of its shares of Common Stock or shall consolidate or merge
with or into any trust or corporation (other than a consolidation or merger in
which the Corporation is the surviving entity) or shall sell or transfer
substantially all its assets, the Holders of any series of the Debentures shall,
if entitled to convert such Debentures at any time after such transaction,
receive upon conversion thereof, in lieu of each share of Common Stock into
which the Debentures would have been convertible prior to such transaction, the
same kind and amount of stock and other securities, cash or property as shall
have been issuable or distributable in connection with such transaction with
respect to each share of Common Stock (Sections 10.04 and 10.10).
A conversion price adjustment made according to the provisions of the
Debentures of any series (or the absence of provision for such an adjustment)
might result in a constructive distribution to the Holders of Debentures of such
series or shares of Common Stock that would be subject to taxation as a
dividend. The Corporation may, at its option, make such reductions in the
conversion price, in addition to those set forth above, as the Board of
Directors deems advisable to avoid or diminish any income tax to holders of
shares of Common Stock resulting from any dividend or distribution of shares of
Common Stock (or rights to acquire shares of Common Stock) or from any event
treated as such for income tax purposes or for any other reason. The Board will
have the power to resolve any ambiguity or correct any error in the provision
relating to the adjustment of the conversion price of the Debentures of such
series. Its actions shall be final and conclusive (Section 10.04).
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Fractional shares will not be issued upon conversion, but, in lieu thereof,
the Corporation will pay a cash adjustment based upon market price (Section
10.08).
The Holders of Debentures at the close of business on an interest payment
record date shall be entitled to receive the interest payable on such Debentures
on the corresponding interest payment date notwithstanding the conversion
thereof. However, Debentures surrendered for conversion during the period from
the close of business on any record date to the opening of business on the
corresponding interest payment date must be accompanied by payment of an amount
equal to the interest payable on such interest payment date. Holders of
Debentures who convert Debentures on an interest payment date will receive the
interest payable on such date and need not include payment of such interest upon
surrender of the Debentures for conversion. Except as aforesaid, no payment or
adjustment is to be made on conversion for interest accrued on the Debentures or
for dividends on shares of Common Stock (Section 10.03).
SUBORDINATION OF DEBENTURES. The indebtedness evidenced by the Debentures
of any series will be subordinated and junior in rights of payment to the extent
set forth in the Indenture to the prior payment in full of amounts then due on
all Senior Indebtedness (as defined). No payment shall be made by the
Corporation on account of principal of (or premium, if any) or interest on the
Debentures of any series or on account of the purchase or other acquisition of
Debentures of any series, if there shall have occurred and be continuing a
default with respect to any Senior Indebtedness permitting the holders to
accelerate the maturity thereof or with respect to the payment of any Senior
Indebtedness, and such default shall be the subject of a judicial proceeding or
the Corporation shall have received notice of such default from any holder of
Senior Indebtedness, unless and until such default or event of default shall
have been cured or waived or shall have ceased to exist. By reason of these
provisions, in the event of default on any Senior Indebtedness, whether now
outstanding or hereafter issued, payments of principal of (and premium if any)
and interest on the Debentures of any series may not be permitted to be made
until such Senior Indebtedness is paid in full, or the event of default on such
Senior Indebtedness is cured or waived (Section 11.02).
Upon any acceleration of the principal of the Debentures or any distribution
of assets of the Corporation upon any receivership, dissolution, winding-up,
liquidation, reorganization, or similar proceedings of the Corporation, whether
voluntary or involuntary, or in bankruptcy or insolvency, all amounts due or to
become due upon all Senior Indebtedness must be paid in full before the Holders
of the Debentures of any series or the Trustee are entitled to receive or retain
any assets so distributed in respect of the Debentures (Section 11.02). By
reason of this provision, in the event of insolvency, Holders of the Debentures
of any series may recover less, ratably, than holders of Senior Indebtedness.
"Senior Indebtedness" is defined to mean the principal, premium, if any,
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not a claim for post-filing interest is allowed in such proceeding), fees,
charges, expenses, reimbursement and indemnification, obligations, and all other
amounts payable under or in respect of Indebtedness (as defined) of the
Corporation, whether any such Indebtedness exists as of the date of the
Indenture or is created, incurred, assumed or guaranteed after such date. Senior
Indebtedness includes, without limitation, indebtedness under the Corporation's
secured and unsecured bank lines the amount of which at the time of any Offering
of Securities hereunder will be described in the applicable Prospectus
Supplement. There is no limit on the amount of Senior Indebtedness that the
Corporation may incur (Section 11.01).
"Indebtedness" with respect to any Person is defined to mean:
(i) all indebtedness for money borrowed whether or not evidenced by a
promissory note, draft, or similar instrument;
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(ii) that portion of obligations with respect to leases that is
properly classified as a liability on a balance sheet in accordance with
generally accepted accounting principles;
(iii) notes payable and drafts accepted representing extensions of
credit;
(iv) any balance owed for all or any part of the deferred purchase
price of property or services which purchase price is due more than six
months from the date of incurrence of the obligation in respect thereof
(except any such balance that constitutes (a) a trade payable or an accrued
liability arising in the ordinary course of business or (b) a trade draft or
note payable issued in the ordinary course of business in connection with
the purchase of goods or services), if and to the extent such debt would
appear as a liability upon a balance sheet of such person prepared in
accordance with generally accepted accounting principles; and
(v) any deferral, amendment, renewal, extension, supplement or
refunding of any liability of the kind described in any of the preceding
clauses (i) through (iv);
PROVIDED, HOWEVER, that, in computing the "Indebtedness" of any Person, there
shall be excluded any particular indebtedness if, upon or prior to the maturity
thereof, there shall have been deposited with a depository in trust money (or
evidences of indebtedness if permitted by the instrument creating such
indebtedness in the necessary amount to pay, redeem or satisfy such indebtedness
as it becomes due, and the amount so deposited shall not be included in any
computation of the assets of such Person (Section 1.01).
OPTIONAL REDEMPTION. The Debentures of any series will be subject to
redemption, in whole or in part, or on any date subsequent to the date set forth
in the Prospectus Supplement at the option of the Corporation on at least 30
days' prior notice by mail at a redemption price equal to 100% (or such greater
price as is set forth in the Prospectus Supplement relating to such series of
Debentures) of the principal amount, plus interest accrued to the date of
redemption (Section 3.01). The Corporation may exercise its redemption powers
over a Holder's securities at anytime to the extent deemed sufficient by the
Corporation to prevent the Holder of such securities or any other person having
an interest therein if such securities were converted into Common Stock from
being deemed to own Excess Shares (See "Description of Common Stock Redemption
and Restriction on Transfer of Shares"). The Indenture does not contain any
provision requiring the Corporation to repurchase Debentures at the option of
the Holders in the event of a leveraged buyout, recapitalization or similar
restructuring of the Corporation, even though the Corporation's creditworthiness
and the market value of the Debentures may decline significantly as a result of
such transaction. Nor does the Indenture protect Holders against any decline in
credit quality.
DIVIDENDS, DISTRIBUTIONS AND ACQUISITIONS OF SHARES. The Indenture provides
that the Corporation will not (i) declare or pay any dividend or make any
distribution to holders of its capital stock (other than dividends or
distributions payable in its shares or other than as the Corporation determines
is necessary to maintain its REIT status) or (ii) purchase, redeem or otherwise
acquire or retire for value any of its capital stock or permit any subsidiary to
do so, if at the time of such action an Event of Default (as defined in the
Indenture) has occurred and is continuing or would exist immediately after
giving effect to such action (Section 4.06).
MODIFICATION OF THE INDENTURE. With certain exceptions, the rights and
obligations of the Corporation and the rights of Holders of any series of
Debentures may only be modified by the Corporation and the Trustee with the
consent of the Holders of at least a majority in principal amount of each series
of affected Debentures. Without the consent of each affected Debenture Holder,
no amendment or waiver of supplement may (i) reduce the principal of, or rate of
interest on, any Debenture; (i) reduce the principal of, or rate of interest on
any Debenture, (ii) change the stated maturity date of the principal of, or any
installment of interest on, any Debenture; (iii) waive a default in the payment
of the principal amount of, or the interest on, or any premium payable on
redemption of, any Debenture; (iv) change the currency for
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payment of the principal of, or premium or interest on, any Debenture; (v)
impair the right to institute suit for the enforcement of any such payment when
due; (vi) adversely affect the right to convert any Debenture; (vii) reduce the
amount of outstanding Debentures necessary to consent to an amendment or waiver
provided for in the Indenture; or (viii) modify any provisions of the Indenture
relating to the modification, supplement and amendment of the Indenture or
waivers of past defaults, except as otherwise specified (Section 9.02).
EVENTS OF DEFAULT, NOTICE AND WAIVER. The following are Events of Default
under the Indenture; (i) default in the payment of interest on the Debentures of
such series when due and payable, which continues for 30 days; (ii) default in
the payment of principal of (and premium, if any) on the Debentures when due, at
maturity, upon redemption or otherwise, which continues for five Business Days;
(iii) failure to perform any other covenant of the Corporation contained in the
Indenture or any Debenture which continues for 60 days after written notice is
given as provided in the Indenture; (iv) default under any bond, debenture or
other Indebtedness of the Corporation, or any subsidiary if (a) either (x) such
event of default results from the failure to pay any such Indebtedness at
maturity or (y) as a result of such event of default, the maturity of such
Indebtedness has been accelerated prior to its expressed maturity and such
acceleration shall not be rescinded or annulled or the accelerated amount paid
within ten days after notice to the Corporation of such acceleration, or such
Indebtedness having been discharged, and (b) the principal amount of such
Indebtedness, together with the principal amount of any other Indebtedness in
default for failure to pay principal or interest thereon, or the maturity of
which has been so accelerated, aggregates $10,000,000 or more; and (v) certain
events of bankruptcy, insolvency or reorganization relating to the Corporation
(Section 6.01). If an Event of Default shall occur and be continuing, the
Trustee or the Holders of a majority in aggregate principal amount of any
Debentures may declare the Debentures due and payable (Section 6.02).
The Indenture provides that the Trustee shall, within 90 days after the
occurrence of any Default or Event of Default with respect to the Debentures of
any series, give to the Holders of Debentures notice of all uncured Defaults or
Events of Default known to it. The Trustee shall be protected if in good faith
it determines that the withholding of such notice is in the interest of the
Holders of Debentures of any series, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any of the
Debentures of such series in which event notice must be given (Section 7.05).
The Indenture provides that the Holders of a majority in aggregate principal
amount of the outstanding Debentures of any series may direct the time, method
and place of conducting any proceedings for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee with respect to the
Debentures of such series (Section 6.05). The right of a Holder to institute a
proceeding with respect to the Indenture is subject to certain conditions
including notice and indemnity to the Trustee, but the Holder has an absolute
right to receipt of principal of (and premium, if any) and interest on such
Holder's Debenture on or after the respective due dates expressed in the
Debentures and to institute suit for the enforcement of any such payments
(Section 6.06).
The Holders of a majority in principal amount of the outstanding Debentures
of any series may on behalf of the Holders of all Debentures of such series
waive certain past defaults, except a default in payment of the principal of
(and premium, if any) or interest on any Debentures of such series or in respect
of certain provisions of the Indenture which cannot be modified or amended
without the consent of the Holder of each Debenture affected thereby (Section
9.02).
The Corporation will be required to furnish the Trustee annually a statement
of certain officers of the Corporation stating whether or not they know of any
Default or Events of Default (as defined in the Indenture) and, if they have
such knowledge, a description of the efforts to remedy the same (Section 4.05).
CONSOLIDATION, MERGER, SALE OR CONVEYANCE. The Corporation may merge or
consolidate with, or sell or convey all or substantially all of its assets to,
any other corporation or entity, provided that (i) either the
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Corporation shall be the continuing entity, or the successor entity (if other
than the Corporation) shall be an entity organized and existing under the laws
of the United States or a state thereof or the District of Columbia (although it
may, in turn, be owned by a foreign entity) and such entity shall expressly
assume by supplemental indenture all of the obligations of the Corporation under
the Debentures and the Indenture; (ii) immediately after giving effect to such
transactions no Default or Event of Default shall have occurred and be
continuing, and (iii) the Corporation shall have delivered to the Trustee an
Officers' Certificate and opinion of counsel, stating that the transaction and
supplemental indenture comply with the Indenture (Section 5.01).
REORGANIZATION AND OTHER TRANSACTIONS. The Indenture does not afford the
Holders of the Debentures any protection from a decline of credit quality nor
does it give any protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction ("Leveraged
Transaction") involving the Corporation that may adversely affect Holders of the
Debentures, except to the limited extent described above. The Indenture does not
contain any provision requiring the Corporation to repurchase any of the
Debentures in the event of a Leveraged Transaction, even though the
Corporation's creditworthiness and the market value of the Debentures may
decline significantly as a result of any such transaction.
FEDERAL INCOME TAX CONSIDERATIONS
THE FOLLOWING SUMMARY OF MATERIAL FEDERAL INCOME TAX CONSIDERATIONS IS BASED
ON CURRENT LAW AND DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF TAXATION THAT
MAY BE RELEVANT TO PARTICULAR SHAREHOLDERS IN LIGHT OF THEIR PERSONAL INVESTMENT
OR TAX CIRCUMSTANCES, OR TO CERTAIN TYPES OF SHAREHOLDERS (INCLUDING INSURANCE
COMPANIES, FINANCIAL INSTITUTIONS AND BROKER-DEALERS) SUBJECT TO SPECIAL
TREATMENT UNDER THE FEDERAL INCOME TAX LAWS. CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS RELEVANT TO HOLDERS OF THE SECURITIES WILL BE PROVIDED IN THE
APPLICABLE PROSPECTUS SUPPLEMENT RELATING THERETO.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP AND
SALE OF THE SECURITIES.
GENERAL
The Corporation believes that since its formation it has operated in a
manner that permits it to satisfy the requirements for taxation as a REIT under
the applicable provisions of the Code. The Corporation intends to continue to
operate to satisfy such requirement. No assurance can be given, however, that
such requirements will be met.
The sections of the Code relating to qualification and operation as a REIT
are highly technical and complex. The following sets forth the material aspects
of the Code sections that govern the Federal income tax treatment of a REIT and
its shareholders. This summary is qualified in its entirety by the applicable
Code provisions, rules and regulations thereunder, and administrative and
judicial interpretations thereof. Goodwin, Procter & Hoar LLP has acted as tax
counsel to the Corporation in connection with the Corporation's election to be
taxed as a REIT.
In the opinion of Goodwin, Procter & Hoar LLP, commencing with the
Corporation's taxable year ended December 31, 1987, the Corporation has been
organized in conformity with the requirements for qualification as a REIT, and
its method of operation has and will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code. This
opinion is based on various assumptions and is conditioned upon certain
representations made by the Corporation as to factual matters. Moreover, such
qualification and taxation as a REIT depends upon the Corporation's ability to
meet, through actual annual operating results, distribution levels and diversity
of stock ownership, the various qualification tests imposed upon the Code
discussed below, the results of which will not be reviewed by Goodwin, Procter &
Hoar LLP. Accordingly, no assurance can be given that the actual results
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of the Corporation's operations for any particular taxable year will satisfy
such requirements. See "-- Failure to Qualify."
In brief, if certain detailed conditions imposed by the REIT provisions of
the Code are met, entities, such as the Corporation, that invest primarily in
real estate and that otherwise would be treated for Federal income tax purposes
as corporations, are generally not taxed at the corporate level on their "REIT
taxable income" that is currently distributed to shareholders. This treatment
substantially eliminates the "double taxation" (i.e., taxation at both the
corporate and shareholder levels) that generally results from the use of
corporate investment vehicles. If the Corporation fails to qualify as a REIT in
any year, however, it will be subject to Federal income tax as if it were a
domestic corporation, and its shareholders will be taxed in the same manner as
shareholders of ordinary corporations. In this event, the Corporation could be
subject to potentially significant tax liabilities and the amount of cash
available for distribution to its shareholders could be reduced.
TAXATION OF THE CORPORATION
In any year in which the Corporation qualifies as a REIT, in general it will
not be subject to Federal income tax on that portion of its net income that it
distributes to shareholders. This treatment substantially eliminates the "double
taxation" on income at the corporate and shareholder levels that generally
results form investment in a corporation. However, the REIT will be subject to
federal income tax as follows: First, the REIT will be taxed at regular
corporate rates on any undistributed real estate investment trust taxable
income, including undistributed net capital gains. Second, under certain
circumstances, the REIT may be subject to the "alterative minimum tax" on its
items of tax preference. Third, if the REIT has (i) net income from the sale or
other disposition of "foreclosure property" which it held primarily for sale to
customers in the ordinary course of business or (ii) other nonqualifying income
from foreclosure property, it will be subject to tax at the highest corporate
rate on such income. Fourth, if the REIT has net income from prohibited
transactions (which are, in general, certain sales or other dispositions of
property held primarily for sale to customers in the ordinary course of business
other than foreclosure property), such income will be subject to a 100% tax.
Fifth, if the REIT should fail to satisfy the 75% gross income test or the 95%
gross income test (discussed below), and has nonetheless maintained its
qualification as a real estate investment trust because certain other
requirements have been met, it will be subject to a 100% tax on the net income
attributable to the greater of the amount by which the REIT fails the 75% or 95%
test. Sixth, if the REIT should fail to distribute during each calendar year at
least the sum of (i) 85% of its real estate investment trust ordinary income for
such year, (ii) 95% of its real estate investment trust capital gain net income
for such year, and (iii) any undistributed taxable income from prior periods,
the REIT will be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, if the REIT
acquires any asset from a C corporation (i.e., generally a corporation subject
to full corporate-level tax) in a transaction in which the basis of the asset in
the REIT's hands is determined by reference to the basis of the asset (or any
other property) in the hands of the C Corporation, and the REIT recognizes on
the disposition of such asset during the 10 year period beginning on the date on
which such asset was acquired by the REIT, then, to the extent of any built-in
gain at the time of acquisition, such gain will be subject to tax at the highest
regular corporate rate, assuming the REIT will make an election pursuant to IRS
Notice 88-19.
REQUIREMENTS FOR QUALIFICATION
The Code defines a real estate investment trust as a corporation, trust or
association (1) which is managed by one or more trustees or directors; (2) the
beneficial ownership of which is evidenced by transferable shares, or by
transferable certificates of beneficial interest; (3) which would be taxable as
a domestic corporation but for Sections 856 through 860 of the Code; (4) which
is neither a financial institution nor an insurance company subject to certain
provisions of the Code; (5) the beneficial ownership of which is held by 100 or
more persons; (6) not more than 50% in value of the outstanding
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stock of which is owned, directly or indirectly, by five or fewer individuals
(as defined in the Code) at any time during the last half of each taxable year;
and (7) which meets certain other tests, described below, regarding the nature
of income and assets. Conditions (1) through (4) must be met during the entire
taxable year, and condition (5) must be met during at least 335 days of a
taxable year of 12 months, or during a proportionate part of a taxable year of
less than 12 months.
In order to ensure compliance with the ownership tests described above, the
Corporation's Bylaws contain certain restrictions on the transfer of stock to
prevent undue concentration of stock ownership. Moreover, to evidence compliance
with these requirements, the Corporation must maintain records which disclose
the actual ownership of its outstanding stock. In fulfilling its obligations to
maintain records, the Corporation must demand written statements each year from
the record holders of designated percentages of its stock disclosing the actual
owners of such stock. A list of those persons failing or refusing to comply with
such demand must be maintained as part of the Corporation's records. A
shareholder failing or refusing to comply with the Corporation's written demand
must submit with his tax returns a similar statement disclosing the actual
ownership of stock and certain other information. In addition, the Bylaws
contain provisions authorizing the redemption and restrictions on the transfer
of its shares that are intended to assist the Corporation in continuing to
satisfy the share ownership requirements. See "Description of Common Stock
Redemption -- Restriction on Transfer of Shares."
ASSET TESTS
At the close of each quarter of its taxable year, the Corporation must
satisfy two tests relating to the nature of its assets. First, at least 75% of
the value of the Corporation's total assets must be represented by interests in
real property, interests in mortgages on real property, shares in other REITs,
cash, cash items and government securities (as well as certain temporary
investments in stock or debt instruments purchased with the proceeds of new
capital raised by the Corporation). Second, although the remaining 25% of the
Corporation's assets generally may be invested without restrictions, securities
in this class may not exceed either (i) 5% of the value of the Corporation's
total assets as to any one nongovernment issuer, or (ii) 10% of the outstanding
voting securities of any one issuer (except a wholly-owned subsidiary of the
REIT that meets the definition of a "qualified REIT subsidiary").
GROSS INCOME TESTS
There are three separate percentage tests relating to the sources of a
REIT's gross income which must be satisfied for each taxable year.
THE 75% TEST. At least 75% of the qualifying REIT's gross income for the
taxable year must consist of (i) rents from real property (consistent with the
discussion below); (ii) interest on obligations collateralized by mortgages on,
or interest in, real property; (iii) gains from the sale or other disposition of
interests in real property and real estate mortgages, other than gain from
property held primarily for sale to customers in the ordinary course of the
REIT's trade or business ("dealer property"); (iv) dividends or other
distributions on shares in other REITs, as well as gain from the sale of such
shares; (v) abatements and refunds of real property taxes; (vi) income from the
operation, and gain from the sale, of property acquired at or in lieu of a
foreclosure of the mortgage collateralized by such property ("foreclosure
property"); and (vii) commitment fees received from agreeing to make loans
collateralized by mortgages on real property or to purchase or lease real
property.
Rents received from a tenant will not, however, qualify as rents from real
property in satisfying the 75% test (or the 95% gross income test described
below) if the REIT, or an owner of 10% or more of the REIT, directly or
constructively owns 10% or more of such tenant (a "related party tenant"). In
addition, if rent attributable to personal property, leased in connection with a
lease of real property, is greater than 15% of the total rent received under the
lease, then the portion of the rent attributable to such personal property will
not qualify as rents from real property. Moreover, an amount received or accrued
generally
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will not qualify as rents from real property (or as interest income) for
purposes of the 75% and 95% gross income tests if it is based in whole or in
part on the income or profits of any person. Rent or interest will not be
disqualified, however, solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Finally, for rents received to qualify as
rents from real property, the REIT generally must not operate or manage the
property or furnish or render services to tenants, other than through an
"independent contractor" from whom the REIT derives no revenue. The "independent
contractor" requirement, however, does not apply to the extent that the services
provided by the REIT are usually or customarily rendered in connection with the
rental of space for occupancy only, and are not otherwise rendered primarily for
the benefit of the tenant. The Corporation believes that the management services
provided by it with respect to the Properties that it owns are of the type that
are usually or customarily rendered in connection with the rental of space for
occupancy only, and therefore that the provision of such service will not cause
the rents received with respect to the Properties to fail to qualify as rents
from real property for purposes of the 75% and 95% gross income tests.
THE 95% TEST. In addition to deriving 75% of its gross income from the
sources listed above, at least 95% of the qualifying REIT's gross income for the
taxable year must be derived from the above-described qualifying income, or from
dividends, interest or gains from the sale or disposition of stock or other
securities that are not dealer property. Dividends and interest on any
obligation not collateralized by an interest on real property are included for
purposes of the 95% test, but not for purposes of the 75% test. For purposes of
determining whether the REIT complies with the 75% and 95% income tests, gross
income does not include income from prohibited transactions. A "prohibited
transaction" is a sale of dealer property, excluding certain property held by
the REIT for at least four years and foreclosure property.
The Corporation believes that it has held and managed its real estate
Properties in a manner that has given rise to rental income qualifying under the
75% and 95% gross income tests. Even if the Corporation fails to satisfy one or
both the 75% or 95% gross income tests for any taxable year, it may still
qualify as a REIT for such year if it is entitled to relief under certain
provision of the Code. These relief provisions will generally be available if:
(i) the Corporation's failure to comply was due to reasonable cause and not to
willful neglect; (ii) the Corporation reports the nature and amount of each item
of its income included in the 75% and 95% gross income tests on a schedule
attached to its tax return; and (iii) any incorrect information on this schedule
is not due to fraud with intent to evade tax. If these relief provisions apply,
the Corporation would, however, still be subject to a special tax upon the
greater of the amount by which it fails either the 75% or 95% gross income test
for that year.
THE 30% TEST. Finally, a qualifying REIT must derive less than 30% of its
gross income for each taxable year from the sale or other disposition of (i)
real property held for less than four years (other than foreclosure property and
involuntary conversions), (ii) stock or securities held for less than one year,
and (iii) property in a prohibited transaction. The Corporation believes that it
has satisfied this requirement in each year.
ANNUAL DISTRIBUTION REQUIREMENTS
The Corporation, in order to qualify as a REIT, is required to distribute
dividends (other than capital gain dividends) to its shareholders each year in
an amount at least equal to (a) the sum of (i) 95% of the Corporation's REIT
taxable income (computed without regard to the dividends paid deduction and the
REIT's net capital gain) and (ii) 95% of the net income (after tax), if any,
from foreclosure property, minus (b) the sum of certain items of non-cash
income. Such distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before the Corporation
timely files its tax return for such year and if paid on or before the first
regular dividend payment after such declaration. To the extent that the
Corporation does not distribute all of its net capital gain or distributes at
least 95%, but less than 100%, of its REIT taxable income, as adjusted, it will
be subject to tax on the undistributed amount at regular capital gains or
ordinary corporate tax rates, a the case may be. Furthermore, if the
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<PAGE>
REIT should fail to distribute during each calendar year at least the sum of (i)
85% of its REIT ordinary income for such year, (ii) 95% of its REIT capital gain
income for such year, and (iii) any undistributed taxable income from prior
periods, it would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. The Corporation believes
that it has made timely distributions sufficient to satisfy the annual
distribution requirements. Even if it fails to meet the 95% distribution
requirement in any year as a result of an adjustment to the Corporation's tax
return by the Service, the Corporation may retroactively cure the failure by
paying a "deficiency dividend" (plus applicable penalties and interest) within a
specified period.
FAILURE TO QUALIFY
If the Corporation fails to qualify for taxation as a REIT in any taxable
year and the relief provisions do not apply, it will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to shareholders in any year in which the
Corporation fails to qualify will not be deductible by the Corporation, nor will
they be required to be made. In such event, to the extent of the Corporation's
current and accumulated earnings and profits, all distributions to shareholders
will be taxable as ordinary income, and, subject to certain limitations in the
Code, corporate distributees may be eligible for the dividends received
deduction. Unless entitled to relief under specific statutory provisions, the
Corporation also would be disqualified from taxation as a REIT for the four
taxable years following the year during which qualification was lost.
TAXATION OF SHAREHOLDERS
As long as the Corporation qualifies as a REIT, distributions made to the
Corporation's taxable U.S. shareholders out of current or accumulated earnings
and profits (and not designated as capital gain dividends) will be taken into
account by such U.S. shareholders as ordinary income and will not be eligible
for the dividends received deduction generally available to corporations. As
used herein, the term "U.S. shareholder" means a holder of Common Stock that for
U.S. federal income tax purposes is (i) a citizen or resident of the United
States, (ii) a corporation, partnership, or other entity created or organized in
or under the laws of the United States or any political subdivision thereof, or
(iii) an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source and does not (iv) have special status under
the Code, such as a tax-exempt organization. Distributions that are designated
by the Corporation as capital gain dividends will be taxed as long-term capital
gains (to the extent they do not exceed the Corporation's actual net capital
gain for the taxable year) without regard to the period for which the
shareholder has held his Common Stock. However, corporate shareholders may be
required to treat up to 20% of certain capital gain dividends as ordinary
income. Distributions in excess of current and accumulated earnings and profits
will not be taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholders Common Stock, but rather will reduce the
adjusted basis of such stock. To the extent that distributions in excess of
current and accumulated earnings and profits exceed the adjusted basis of a
shareholder's Common Stock, the distributions will be included in income as
long-term capital gain (or short-term capital gain if the Common Stock has been
held for one year or less) assuming the Common Stock is a capital asset in the
hands of the shareholder. In addition, any dividend declared by the Corporation
in October, November or December of any year and payable to a shareholder of
record on a special date in any such month shall be treated as both paid by the
Corporation and received they the shareholder on December 31 of such year,
provided that the distribution is actually paid by the Corporation during
January of the following capital year.
Investors are urged to consult their own tax advisors with respect to the
tax consequences arising under federal law and the laws of any state,
municipality or other taxing jurisdiction. Foreign investors should consult
their own tax advisors concerning the tax consequences of an investment in the
Corporation including the possibility of United States income tax withholding on
Corporation distributions.
19
<PAGE>
PLAN OF DISTRIBUTION
The Corporation may sell the Securities in any of three ways: (i) through
underwriting syndicates represented by one or more managing underwriters, or by
one or more underwriters without a syndicate; (ii) through agents designated
from time to time; or (iii) directly to institutional investors. The names of
any underwriters or agents of the Corporation involved in the sale of the
Securities for which this Prospectus is being delivered, and any applicable
commission or discounts, will be set forth in the Prospectus Supplement. The net
proceeds to the Corporation from such sale shall be set forth in the Prospectus
Supplement.
Under agreements entered into with the Corporation, agents and underwriters
may be entitled to indemnification by the Corporation against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents or underwriters may be required to
make in respect thereof. Agents and underwriters may engage in transactions with
or perform services for the Corporation in the ordinary course of business.
LEGAL MATTERS
The validity of the Securities that are the subject of this Prospectus will
be passed upon for the Corporation by Goodwin, Procter & Hoar LLP, Boston,
Massachusetts. In the case of an underwritten public offering, certain legal
matters will be passed upon for the Underwriters by legal counsel named in the
applicable Prospectus Supplement. Each such legal counsel may rely, as to
matters of California law, upon the opinion of California counsel named in the
applicable Prospectus Supplement.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Corporation's Annual
Report on Form 10-K have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports, which are incorporated herein by
reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
20
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- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND
ANY APPLICABLE PROSPECTUS SUPPLEMENT AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
CORPORATION, ANY UNDERWRITERS OR ANY OTHER PERSON. THIS PROSPECTUS AND ANY
APPLICABLE PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES TO WHICH IT RELATES IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION. THE DELIVERY OF THIS PROSPECTUS OR ANY APPLICABLE PROSPECTUS
SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
The Corporation................................ 4
Ratios of Earnings to Fixed Charges............ 4
Use of Proceeds................................ 4
Risk Factors................................... 5
Description of Common Stock.................... 9
Description of Debentures...................... 10
Federal Income Tax Considerations.............. 15
Plan of Distribution........................... 20
Legal Matters.................................. 20
Experts........................................ 20
</TABLE>
BURNHAM PACIFIC
PROPERTIES, INC.
---------------------
PROSPECTUS
---------------------
FEBRUARY 10, 1997
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
*1.0 Form of Underwriting Agreement. (Common Stock)
*1.1 Form of Underwriting Agreement (Debentures)
*1.2 Form of Placement Agency Agreement.
*1.3 Form of Escrow Agreement
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, and to pages 9 and 10
of the Proxy Statement dated March 31, 1989, for amendments adopted at the
Corporation's Annual Meeting of Shareholders on May 2, 1989.
3.2 Bylaws of the Corporation as amended and restated May 3, 1994, incorporated by
reference to pages A-1 through A-20 of the Corporation's Proxy Statement for its
1994 Annual Meeting, filed March 30, 1994.
4.0 Share certificate for Common Stock of the Corporation, incorporated by reference to
Exhibit 4.0 to Registration Statement No. 33-20489.
*4.1 Form of Trust Indenture.
*5.0 Opinion of Goodwin, Procter & Hoar as to legality of Securities (including
consent).
10.2 Burnham Pacific Properties, Inc. Stock Option Plan as Amended and Restated as of
May 17, 1996, incorporated by reference to Exhibit 10.1 to Registration Statement
No. 333-10559 on Form S-8.
**10.3 Revolving Loan Agreement dated November 18, 1996 between the Corporation, as
Borrower, and Nomura Asset Capital Corporation, as Lender.
**12.1 Computation of Ratio of Earnings to Fixed Charges.
***23.0 Consent of Deloitte & Touche LLP.
**24.0 Power of Attorney (included as a part of the signature page to Post-effective
Amendment No. 1 to this Registration Statement).
*99.0 Form T-1.
</TABLE>
- ------------------------
* Previously filed
** Filed with Post-effective Amendment No. 1
*** Filed with this Post-effective Amendment No. 2
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to Directors, officers and controlling
persons of the Corporation, the Corporation has been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the act and is therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Corporation of expenses incurred or paid by a Director,
officer or controlling person of the Corporation in the successful defense of
any action,
II-1
<PAGE>
suit or proceeding) is asserted by such Director, officer or controlling person
in connection with the securities being registered, the Corporation will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registration pursuant to Rule 4254(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant also hereby undertakes:
(1) To file, during any period in which offers and sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by these paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for purposes of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this post-effective
amendment half by the undersigned, thereunto duly authorized, in the City of San
Diego, State of California on February 7, 1997
BURNHAM PACIFIC PROPERTIES, INC.
By: J. DAVID MARTIN*
-----------------------------------
Name: J. David Martin
Title: President
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
J. DAVID MARTIN* President, Chief Executive Officer
------------------------------------------- (Principal Executive Officer) and February 7, 1997
J. David Martin Director
/s/ DANIEL B. PLATT
------------------------------------------- Chief Financial Officer February 7, 1997
Daniel B. Platt
JEFFREY R. FISHER*
------------------------------------------- Director of Finance and Treasurer February 7, 1997
Jeffrey R. Fisher (Principal Accounting Officer)
MALIN BURNHAM*
------------------------------------------- Chairman of the Board of Directors February 7, 1997
Malin Burnham
PHILIP L. GILDRED, JR.*
------------------------------------------- Director February 7, 1997
Philip L. Gildred, Jr.
JAMES D. KLINGBEIL*
------------------------------------------- Director February 7, 1997
James D. Klingbeil
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
------------------------------------------- Director
Victor B. MacFarlane
DONNE P. MOEN*
------------------------------------------- Director February 7, 1997
Donne P. Moen
THOMAS A. PAGE*
------------------------------------------- Director February 7, 1997
Thomas A. Page
PHILIP S. SCHLEIN*
------------------------------------------- Director February 7, 1997
Philip S. Schlein
RICHARD R. TARTRE*
------------------------------------------- Director February 7, 1997
Richard R. Tartre
By: /s/ DANIEL B. PLATT
------------------------------------------
Daniel B. Platt
Attorney-in-fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. DESCRIPTION NUMBERED PAGE
- ----------- ------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
*1.0 Form of Underwriting Agreement. (Common Stock)
*1.1 Form of Underwriting Agreement (Debentures)
*1.2 Form of Placement Agency Agreement.
*1.3 Form of Escrow Agreement
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, and to pages 9 and 10 of the Proxy
Statement dated March 31, 1989, for amendments adopted at the Corporation's Annual
Meeting of Shareholders on May 2, 1989.
3.2 Bylaws of the Corporation as amended and restated May 3, 1994, incorporated by
reference to pages A-1 through A-20 of the Corporation's Proxy Statement for its 1994
Annual Meeting, filed March 30, 1994.
4.0 Share certificate for Common Stock of the Corporation, incorporated by reference to
Exhibit 4.0 to Registration Statement No. 33-20489.
*4.1 Form of Trust Indenture.
*5.0 Opinion of Goodwin, Procter & Hoar as to legality of Securities (including consent).
10.2 Burnham Pacific Properties, Inc. Stock Option Plan as Amended and Restated as of May
17, 1996, incorporated by reference to Exhibit 10.1 to Registration Statement No.
333-10559 on Form S-8.
**10.3 Revolving Loan Agreement dated November 18, 1996 between the Corporation, as
Borrower, and Nomura Asset Capital Corporation, as Lender.
**12.1 Computation of Ratio of Earnings to Fixed Charges.
***23.0 Consent of Deloitte & Touche LLP.
**24.0 Power of Attorney (included as a part of the signature page of Post-effective
Amendment No. 1 to this Registration Statement).
*99.0 Form T-1.
</TABLE>
- ------------------------
* Previously filed.
** Filed with Post-Effective Amendment No. 1
*** Filed with this Post-Effective Amendment No. 2
<PAGE>
EXHIBIT 23.0
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 2 to Registration Statement No. 33-68712 of Burnham Pacific
Properties, Inc. on Form S-3 of our report dated March 11, 1996 appearing in the
Annual Report on Form 10-K of Burnham Pacific Properties, Inc. for the year
ended December 31, 1995 and to the reference to us under the heading "Experts"
in the Prospectus which is part of this Registration Statement.
Deloitte & Touche LLP
San Diego, California
February 7, 1997
