<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 3, 1998
---------------------------
BURNHAM PACIFIC PROPERTIES, INC.
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(Exact name of Registrant as specified in its Charter)
Maryland
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(State or other jurisdiction of incorporation)
1-9524 33-0204162
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(Commission File Number) (IRS Employer Identification No.)
610 West Ash Street, San Diego, California 92101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 652-4700
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(former name or former address, if changed since last report.)
<PAGE>
ITEM 5 - OTHER EVENTS
Although none of the following events individually represents a
"significant acquisition or event" pursuant to the rules governing the
reporting of transactions under this Current Report on Form 8-K, in the
aggregate the acquisitions and events exceed ten percent of the assets of
the Company as of December 31, 1997. Consequently, this report has been
filed for the purpose of providing certain historical and pro forma
financial information for the Shopping Center Acquisitions, Leasehold
Interest Acquisitions, Sales of Real Estate and the signing of the Joint
Venture Agreement described below.
Shopping Center Acquisitions
During the period January 1 through September 30, 1998, certain
subsidiaries of Burnham Pacific Properties, Inc. (the "Company") acquired
12 retail shopping centers (the "Shopping Center Acquisitions") comprising
approximately 1,373,000 square feet of gross leasable area ("GLA") in 4
states, of which the Company purchased approximately 871,000 square feet.
These centers, acquired in separate transactions, for an aggregate purchase
price of approximately $95,125,000, were financed with a combination of
assumed mortgage debt, the issuance of Operating Partnership units and
borrowings under the Company's Credit Facility. All of the Centers were
acquired from unrelated sellers. The Shopping Center Acquisitions include:
- Village East Shopping Center, Salem, Oregon*
- Lake Arrowhead Village, Lake Arrowhead, California*
- Cruces Norte, Las Cruces, New Mexico
- Keizer Creekside, Salem, Oregon
- Park Manor, Bellingham, Washington
- Mission Plaza, Cathedral City, California
- Plaza de Monterey, Palm Desert, California
- Palms to Pines, Palm Desert, California
- Farmington Village, Aloha, Oregon*
- Greenway Town Center, Tigard, Oregon*
- Young's Bay, Warrenton, Oregon*
- Greentree Plaza, Everett, Washington
Certain historical financial information with respect to those properties
noted with an asterisk ("*") is attached in Item 7 herein. More specific
information with respect to each of the Shopping Center Acquisitions
follows.
In February 1998, the Company purchased Village East Shopping Center, a
community shopping center in Salem, Oregon. This center is anchored by a
45,000 square-foot Albertson's, a 32,000 square-foot Ross Dress for Less, a
30,000 square-foot Bi-Mart, a 25,000 square-foot Border's Books, and a
12,000 square-foot Big 5 Sporting Goods. The Albertson's and Bi-Mart
are not included in the purchase. Total square footage of the center is
210,926, of which the Company acquired
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135,926 square feet. The Company's acquisition cost was approximately
$14,825,000 and was financed with a new $7,000,000 7-year mortgage loan
bearing interest at 7.54% secured by the shopping center, with the balance
coming from borrowings under the Company's Credit Facility.
In May 1998, the Company purchased Lake Arrowhead Village, a market/drug
anchored center in Lake Arrowhead, California. This center is anchored by a
33,580 square-foot Stater Brothers and a 9,000 square-foot Rite Aid
(formerly known as Thrifty, Jr.). Total square footage of the center is
221,659, of which the Company purchased 173,507 square feet. The Company's
acquisition cost was approximately $31,500,000. The acquisition was
financed by the assumption of an approximately $19,615,000 mortgage loan
bearing interest at 9.20%, maturing in 2011, the issuance of Operating
Partnership units with a value of approximately $10,715,000, with the
balance coming from borrowings under the Company's Credit Facility. The
issuer of the $19,615,000 mortgage note is a bankruptcy remote, special
purpose partnership in which the Company has substantially all economic
benefits.
In June 1998, the Company acquired six properties, in two separate
transactions, consisting of (i) Cruces Norte, (ii) Keizer Creekside and
(iii) Park Manor (the "Powell Portfolio II") and (i) Mission Plaza, (ii)
Plaza de Monterey, (iii) Palms to Pines (the "Carver Portfolio").
Cruces Norte Shopping Center, located in Las Cruces, New Mexico, is
anchored by an Albertson's Supermarket (not owned) and contains 73,385
square feet of GLA, of which the Company purchased 24,730 square feet.
Keizer Creekside, located in Salem, Oregon, is anchored by an Albertson's
Supermarket (not owned) and contains 104,212 square feet of GLA, of which
the Company purchased 61,943 square feet. Park Manor, located in
Bellingham, Washington, is anchored by an Albertson's Supermarket (not
owned) and contains 96,266 square feet of GLA, of which the Company
purchased 28,454 square feet. These three properties were acquired for an
aggregate purchase price of approximately $10,600,000, including the
issuance of Operating Partnership units with a value of approximately
$4,100,000 and with the balance coming from borrowings under the Company's
Credit Facility.
Mission Plaza, located in Cathedral City, California, is anchored by a
Lucky Supermarket and contains 72,955 square feet of GLA, all purchased by
the Company. Plaza de Monterey, located in Palm Desert, California is
anchored by a Lucky Supermarket (not owned) and contains 84,480 square feet
of GLA, of which the Company purchased 37,482 square feet. Palms to Pines,
located in Palm Desert, California, is anchored by a Metropolitan Theater
and contains 39,011 square feet of GLA, all purchased by the Company. These
three properties were acquired for an aggregate purchase price of
approximately $13,100,000, including the issuance of Operating
Partnership units with a value of approximately $3,300,000, the assumption
of a mortgage loan in the amount of approximately $4,000,000 bearing
interest at 10.13%, due in September 2000, secured by Plaza de Monterey and
with the balance coming from borrowings under the Company's Credit
Facility.
In July 1998, the Company acquired four properties in two separate
transactions, consisting of (i) Farmington Village, (ii) Greenway Town
Center and (iii) Young's Bay (the "Zimel Portfolio") and Greentree
Plaza.
2
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Farmington Village, located in Aloha, Oregon, is anchored by an Albertson's
Supermarket and Bi-Mart (both not owned) and contains 105,247 square feet
of GLA, of which the Company purchased 32,740 square feet. Greenway Town
Center, located in Warrenton, Oregon, is anchored by Howard's Thriftway
Supermarket and a Rite Aid drug store and contains 93,100 square feet of
GLA, all purchased by the Company. Young's Bay, located in Warrenton,
Oregon, is anchored by a Rite Aid drug store and a Lamont's Apparel and
contains 92,443 square feet of GLA, all purchased by the Company. These
three properties were acquired for an aggregate price of approximately
$15,500,000 and were purchased with borrowings under the Company's Credit
Facility.
Greentree Plaza, located in Everett, Washington, is anchored by a Target
and contains 178,932 square feet of GLA, of which the Company purchased
78,676 square feet. The purchase price of approximately $9,600,000 was
financed with borrowings under the Company's Credit Facility.
Leasehold Interest Acquisitions
In September and October 1998, the Company purchased leasehold interests in
a portion of two retail shopping centers for approximately $3,232,000 from
an unrelated seller. These acquisitions were financed with borrowings under
the Company's Credit Facility. The leasehold interests, located in Salt
Lake City, Utah and Lynnwood, Oregon, are for a total of 90,233 square feet
of GLA and contain leases with Music Wherehouse and GI Joes, respectively.
Sales of Real Estate
In August 1998, the Company sold the parking lot structure of its 1000 Van
Ness Project for approximately $13,125,000. Net Proceeds of $7,875,000 were
used to reduce borrowings under a construction loan secured by this
project, with the remaining proceeds used to reduce borrowings under the
Company's Credit Facility. No gain or loss resulted from such sale.
On December 1, 1998, the Company's Board of Directors approved for sale
three non-strategic properties of the Company. Based on the aggregate
current net book value at September 30, 1998, of approximately $13,300,000
and an estimated aggregate net sales price of $13,109,000, the Company
expects to report an aggregate net loss upon the sale of these three
properties of approximately $390,000.
Joint Venture
The Operating Partnership of the Company ("Burnham OP") and the state of
California
3
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Public Employees' Retirement System ("CalPERS") are the sole members of a
limited liability company, BPP Retail, LLC, whose operating agreement
constitutes a joint venture agreement between Burnham OP and CalPERS
("JV"). The LLC agreement, dated August 31, 1998, contemplates that
generally CalPERS will have an 80% interest and Burnham OP a 20% interest
in the JV, whose purpose is to serve as the vehicle through which the
parties invest in neighborhood, community, promotional and specialty retail
centers in the Western United States. Burnham OP is the manager of the JV.
As of October 1, 1998, CalPERS made an initial contribution to the JV of
five retail properties in Colorado, Texas and Oregon, valued at
approximately $80,000,000, of which it had previously been the sole owner
under arrangements with previous advisors. On October 2, 1998, the JV
purchased a retail shopping center for approximately $13,310,000. During
the first quarter of 1999, Burnham OP intends to contribute properties
owned directly by Burnham OP for purposes of its contribution. The LLC
agreement contemplates an aggregate $400 million investment by CalPERS
and $100 million investment by Burnham OP through the period ending
December 31, 1999, and provides for up to $165 million of leverage
through mortgage or line of credit borrowings by the JV. Subject to
certain qualifications, in making future acquisitions, Burnham OP is
committed to offer qualifying retail property investment opportunities
to the JV until the parties' respective investment obligations are
satisfied, before making such acquisitions solely for its own direct
account. There can be no assurance that the investment goals of the JV
will be satisfied or that the parties may not agree to expand such goals
or to vary their respective 80/20% participation in the JV.
CalPERS is entitled to a priority return on its investment in the JV before
any return is paid to Burnham OP. The priority return is equal to a 5.00%
"real" (i.e., inflation adjusted) annual rate of return plus (i) a premium,
depending upon the type of property, from 50 basis points on existing
shopping center projects to 200 basis points on speculative development
projects and 300 basis points on undeveloped land, and (ii) a further
premium of up to 60 basis points depending upon the currently anticipated
leverage on the properties owned by the JV. Management believes that the
actual leverage premium will not exceed 30 basis points.
Burnham OP will receive specified annual asset management fees, property
management fees, leasing, acquisition, disposition and development fees. In
addition, after the priority return to CalPERS, Burnham OP will be
entitled to receive an incentive distribution equal to 25% of the excess of
the real internal rate of return over the real return benchmark.
The LLC agreement specifies a term of 30 years, contemplates a real estate
cycle of nine years, and provides for the cumulative measurement of
performance and total return. Accordingly, it is possible that in some
years Burnham OP may not receive any distribution (other than the specified
fees) with respect to its investment in the JV, because of its return being
subordinated to CalPERS' priority return, although shortfalls in any year
may be made up by performance in subsequent years. Also under certain
circumstances, the return of Burnham OP's capital may be subordinated to
the return of CalPERS' capital. While the payment of distributions to
Burnham OP are subordinated to the payment of distributions to CalPERS,
4
<PAGE>
Burnham OP is not responsible to repay distributions that have been paid
with respect to any prior period.
Notwithstanding the specific duration and expected real estate cycle of the
JV, either CalPERS or Burnham OP may terminate early the JV upon giving
specified advance notice. Subject to certain limitations, either party may
also cause the JV to sell any particular property. Also subject to certain
limitations, CalPERS may elect to convert its JV interest in one or more
designated properties into up to an aggregate of 9.8% of the number of
shares of common stock of the Company then outstanding, with the number of
shares to be issued to be determined pursuant to a formula based upon a
number of factors including the net operating income of the properties
involved, debt to market capitalization, weighted cost of debt and the
Company's recent stock price at the time of the conversion.
Under the LLC agreement, Burnham OP is obligated to observe a number of
policies established by CalPERS with respect to its investments generally,
to consult regularly with CalPERS relative to its policies for real estate
investments particularly, to establish an annual business plan for the JV
that is subject to CalPERS' approval, to advise CalPERS concerning major
developments, and to obtain CalPERS' approval before taking specified major
activities with respect to the properties. The fair market value of each
property will be determined annually by an independent appraiser selected
by CalPERS. CalPERS has the right to terminate Burnham OP as the manager of
the JV and as property manager of the JV properties at any time, in which
event both parties have the unilateral right to terminate the JV.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Attachment (I) - Village East Shopping Center Historical Statement of
Revenues and Direct Operating Expenses for the year ended December 31,
1997, and related notes and Independent Auditors' Report, filed in
accordance with Rule 3.14(a)(1) of Regulation S-X.
Attachment (II) - Statement of Estimated Taxable Operating Results of
Village East Shopping Center and Estimated Cash to be Made Available by
Operations of Village East Shopping Center for a Twelve-Month Period
(unaudited), filed in accordance with Rule 3.14(a)(2) of Regulation S-X.
Attachment (III) - Arrowhead Village ("Lake Arrowhead Village") Historical
Summary of Certain Revenues and Certain Expenses for the year ended
December 31, 1997, and related notes and Independent Auditors' Report,
filed in accordance with Rule 3.14(a)(1) of Regulation S-X.
Attachment (IV) - Statement of Estimated Taxable Operating Results of Lake
Arrowhead Village and Estimated Cash to be Made Available by Operations
of Lake
5
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Arrowhead Village for a Twelve-Month Period (unaudited), filed in
accordance with Rule 3.14(a)(2) of Regulation S-X.
Attachment (V) - the Zimel Portfolio Historical Statement of Certain
Revenues and Certain Expenses for the year ended December 31, 1997, and
related notes and Independent Auditors' Report, filed in accordance with
Rule 3.14(a)(1) of Regulation S-X.
Attachment (VI) - Statement of Estimated Taxable Operating Results of the
Zimel Portfolio and Estimated Cash to be Made Available by Operations of
the Zimel Portfolio for a Twelve-Month Period (unaudited), filed in
accordance with Rule 3.14(a)(2) of Regulation S-X.
(b) Pro Forma Financial Information
Attachment (VII) - Burnham Pacific Properties, Inc. Pro Forma Condensed
Consolidated Balance Sheet as of September 30, 1998, Pro Forma Condensed
Consolidated Statements of Income for the year ended December 31, 1997
and the nine months ended September 30, 1998, and notes thereto, filed
in accordance with Article 11 of Regulation S-X.
(c) Exhibits
23.1 Consent of Deloitte & Touche LLP
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BURNHAM PACIFIC PROPERTIES, INC.
Date: December 23, 1998 By: /s/ Daniel B. Platt
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Daniel B. Platt, Chief Financial Officer
7
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Attachment (I)
VILLAGE EAST CENTER
HISTORICAL STATEMENT OF REVENUES AND
DIRECT OPERATING EXPENSES FOR THE
YEAR ENDED DECEMBER 31, 1997 AND
INDEPENDENT AUDITORS' REPORT
F-1
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Burnham Pacific Properties, Inc.:
We have audited the accompanying historical statement of revenues and direct
operating expenses of Village East Center (the "Center") for the year ended
December 31, 1997. This historical statement is the responsibility of the
Center's management. Our responsibility is to express an opinion on this
historical statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the historical statement is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the historical statement.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the historical statement. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying historical statement is prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission. It excludes certain material revenues and expenses, described in
Note 1, and is not intended to be a complete presentation of the Center's
revenues and expenses.
In our opinion, such historical statement presents fairly, in all material
respects, the revenues and direct operating expenses, as described in Note 1,
of the Center for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
San Diego, California
February 27, 1998
F-2
<PAGE>
VILLAGE EAST SHOPPING CENTER
HISTORICAL STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
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<TABLE>
<S> <C>
REVENUES:
Rental revenues $ 1,073,537
Common area maintenance revenues 153,510
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Total revenues 1,227,047
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DIRECT OPERATING EXPENSES:
Utilities 35,192
Repairs and maintenance 40,029
Gardening and landscaping 11,067
Security 29,012
Insurance 22,134
Management fees 41,097
Property taxes and assessments 119,132
General and administrative 3,649
------------
Total direct operating expenses 301,312
------------
EXCESS OF REVENUES OVER DIRECT OPERATING EXPENSES $ 925,735
------------
------------
</TABLE>
See accompanying note to historical statement of revenues and direct operating
expenses.
F-3
<PAGE>
VILLAGE EAST SHOPPING CENTER
NOTE TO HISTORICAL STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - Revenues and direct operating expenses are presented
on the accrual basis of accounting. The accompanying historical statement
of revenues and direct operating expenses relates to the operations of
Village East Shopping Center (the "Center") and has been prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission.
Certain revenues, costs and expenses that are dependent on the ownership,
management and carrying value of the Center have been excluded from the
accompanying historical statement. The excluded revenues consist of
nonoperating revenue related to the Center. The excluded expenses consist
primarily of interest and depreciation and amortization of the Center.
Consequently, the excess of revenues over direct operating expenses as
presented is neither intended to be a complete presentation of the Center's
historical revenues and expenses nor intended to be comparable to the
proposed future operations of the property.
REVENUE RECOGNITION - Shopping center space is generally leased to retail
tenants under various arrangements which are accounted for as operating
leases. Minimum rents are recognized on an accrual basis as earned, the
result of which does not differ materially from the straight-line basis.
Certain leases contain provisions for percentage rents, which are recorded
when earned. Reimbursable expenses such as common area maintenance, real
estate taxes and insurance are recognized as revenue in the period the
applicable costs are accrued.
* * * * * *
F-4
<PAGE>
Attachment (II)
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS OF
VILLAGE EAST SHOPPING CENTER AND ESTIMATED CASH TO BE MADE
AVAILABLE BY OPERATIONS OF VILLAGE EAST SHOPPING CENTER FOR
A TWELVE-MONTH PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
REVENUES
Rents $ 1,074
Reimbursed Expenses 154
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Total 1,228
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COSTS AND EXPENSES
Rental Operating Expense 301
Depreciation 329
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Total 630
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Estimated Taxable Operating Income 598
Add Back Depreciation 329
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Estimated Cash to be Made Available by Operations $ 927
---------
---------
</TABLE>
Note
This statement of estimated taxable operating results and estimated cash to be
made available from operations is an estimate of operating results of Village
East Shopping Center for a period of twelve months based on information provided
by the seller of the property and by management's independent review of the
leases and other documents and does not purport to reflect actual results for
any period.
F-5
<PAGE>
Attachment (III)
ARROWHEAD VILLAGE
HISTORICAL SUMMARY OF CERTAIN REVENUES
AND CERTAIN EXPENSES FOR THE
YEAR ENDED DECEMBER 31, 1997 AND
INDEPENDENT AUDITORS' REPORT
F-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Burnham Pacific Properties, Inc.:
We have audited the accompanying historical summary of certain revenues and
certain expenses (defined as operating revenues less direct operating
expenses) of Arrowhead Village (the "Center") for the year ended December 31,
1997. This historical summary is the responsibility of the Center's
management. Our responsibility is to express an opinion on this historical
summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the historical summary of certain
revenues and certain expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the historical summary of certain revenues and certain
expenses. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall presentation of the historical summary of certain revenues and
certain expenses. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying historical summary of certain revenues and certain expenses
was prepared for the purpose of complying with the rules and regulations of
the Securities and Exchange Commission. Material amounts, described in Note
1 to the historical summary of certain revenues and certain expenses, that
would not be comparable to those resulting from the proposed future operation
of the Center are excluded, and the summary is not intended to be a complete
presentation of the Center s revenues and expenses.
In our opinion, such historical summary of certain revenues and certain
expenses presents fairly, in all material respects, the summary of certain
revenues and certain expenses as defined in Note 1, of the Center for the
year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
San Diego, California
February 27, 1998
F-7
<PAGE>
ARROWHEAD VILLAGE
HISTORICAL SUMMARY OF CERTAIN REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
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<TABLE>
<S> <C>
REVENUES:
Rental revenues (Note 2) $ 2,982,076
Common area maintenance revenues 1,391,534
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Total revenues 4,373,610
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CERTAIN OPERATING EXPENSES:
Repairs and maintenance 493,831
Property taxes 347,200
General and administrative 293,208
Utilities 220,016
Insurance 103,379
Security 89,442
Management fees 79,348
Landscaping 76,192
------------
Total direct operating expenses 1,702,616
------------
CERTAIN REVENUES IN EXCESS OF CERTAIN EXPENSES $ 2,670,994
------------
------------
</TABLE>
See accompanying notes to historical statement of certain revenues and certain
expenses.
F-8
<PAGE>
ARROWHEAD VILLAGE
NOTES TO HISTORICAL SUMMARY OF CERTAIN REVENUES
AND CERTAIN EXPENSES
YEAR ENDED DECEMBER 31, 1997
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The historical summary of certain revenues and
certain expenses relates to the operations of Arrowhead Village (the
"Center") which was acquired by Burnham Pacific Properties, Inc. (the
"Company") from an unaffiliated third party. The property is located in
Lake Arrowhead, California.
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying historical summary of certain
revenues and certain expenses is not representative of the actual operations
for the period presented, as certain revenues and certain expenses that may
not be comparable to the revenues and expenses expected to be incurred by
the Company in the proposed future operation of the Center have been
excluded. Revenues excluded consist of late charges, interest income,
advertising income and miscellaneous income. Expenses excluded consists
primarily of environmental clean-up, depreciation and amortization costs,
and interest expense.
2. OPERATING LEASES
Future minimum rents under the Center's leases, excluding tenant
reimbursements as of December 31, 1997, with the remaining lease terms of
one to ten years (excluding month-to-month or percentage sales leases), are
as follows:
<TABLE>
<CAPTION>
Year Ending December 31,
<S> <C>
1998 $ 2,792,110
1999 2,699,961
2000 2,351,490
2001 1,609,639
2002 1,252,475
Thereafter 3,002,236
-----------
Total $13,707,911
-----------
-----------
</TABLE>
* * * * * *
F-9
<PAGE>
Attachment (IV)
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS OF LAKE
ARROWHEAD VILLAGE AND ESTIMATED CASH TO BE MADE AVAILABLE BY
OPERATIONS OF LAKE ARROWHEAD VILLAGE FOR A TWELVE-MONTH PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
REVENUES
Rents $ 2,982
Reimbursed Expenses 1,392
---------
Total 4,374
---------
COSTS AND EXPENSES
Rental Operating Expense 1,703
Depreciation 700
---------
Total 2,403
---------
Estimated Taxable Operating Income 1,971
Add Back Depreciation 700
---------
Estimated Cash to be Made Available by Operations $ 2,671
---------
---------
</TABLE>
Note
This statement of estimated taxable operating results and estimated cash to be
made available from operations is an estimate of operating results of Lake
Arrowhead Village for a period of twelve months based on information provided
by the seller of the property and by management's independent review of the
leases and other documents and does not purport to reflect actual results for
any period.
F-10
<PAGE>
Attachment (V)
ZIMEL PORTFOLIO
HISTORICAL STATEMENT OF CERTAIN REVENUES
AND CERTAIN EXPENSES FOR THE YEAR
ENDED DECEMBER 31, 1997 AND
INDEPENDENT AUDITORS' REPORT
F-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Burnham Pacific Properties, Inc.:
We have audited the accompanying historical statement of certain revenues and
certain expenses (defined as operating revenues less direct operating
expenses) of Zimel Portfolio (the "Centers") for the year ended December 31,
1997. This historical statement is the responsibility of the Centers'
management. Our responsibility is to express an opinion on this historical
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the historical statement of certain
revenues and certain expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the historical statement of certain revenues and certain
expenses. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall presentation of the historical statement of certain revenues and
certain expenses. We believe that our audit provides a reasonable basis for
our opinion.
The accompanying historical statement of certain revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in a
report on Form 8-K of Burnham Pacific Properties, Inc.). Material amounts,
described in Note 1 to the historical statement of certain revenues and
certain expenses, that would not be comparable to those resulting from the
proposed future operation of the Centers are excluded, and the statement is
not intended to be a complete presentation of the Centers' revenues and
expenses.
In our opinion, such historical statement of certain revenues and certain
expenses presents fairly, in all material respects, the summary of certain
revenues and certain expenses as described in Note 1, of the Centers for the
year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
San Diego, California
July 9, 1998
F-12
<PAGE>
ZIMEL PORTFOLIO
HISTORICAL STATEMENT OF CERTAIN REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
- ----------------------------------------------------------------------------
<TABLE>
<S> <C>
REVENUES:
Rental revenues (Note 2) $ 1,626,191
Common area maintenance revenue 362,213
------------
Total revenues 1,988,404
------------
CERTAIN OPERATING EXPENSES:
Repairs and maintenance 217,709
Property taxes 146,742
Utilities 54,773
Landscaping 39,227
Insurance 32,493
General and administrative 1,033
------------
Total direct operating expenses 491,977
------------
CERTAIN REVENUES IN EXCESS OF CERTAIN EXPENSES $ 1,496,427
------------
------------
</TABLE>
See accompanying notes to historical statement of certain revenues and certain
expenses.
F-13
<PAGE>
ZIMEL PORTFOLIO
NOTES TO HISTORICAL STATEMENT OF CERTAIN REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
- ------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The historical statement of certain revenues and
certain expenses relates to the operations of Zimel Portfolio (the
"Centers") which was acquired by Burnham Pacific Properties, Inc. (the
"Company") from an unaffiliated third party.
Zimel Portfolio consists of the following centers:
Farmington Village Aloha, Oregon
Greenway Town Center Tigard, Oregon
Youngs Bay Shopping Center Warrenton, Oregon
Operating revenues and direct operating expenses are presented on the
accrual basis of accounting. The accompanying historical statement of
certain revenues and certain expenses is not representative of the actual
operations for the period presented, as certain revenues and certain
expenses that may not be comparable to the revenues and expenses expected to
be incurred by the Company in the proposed future operation of the Centers
have been excluded. Revenues excluded consist of late charges and
miscellaneous income. Expenses excluded consist primarily of depreciation,
amortization, interest, and consulting expenses.
2. OPERATING LEASES
Future minimum rents under the Centers' leases, excluding tenant
reimbursements as of December 31, 1997, are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1998 $1,523,128
1999 1,255,604
2000 1,094,952
2001 985,136
2002 792,434
Thereafter 3,378,964
----------
Total $9,030,218
----------
----------
</TABLE>
* * * * * *
F-14
<PAGE>
Attachment (VI)
BURNHAM PACIFIC PROPERTIES, INC.
STATEMENT OF ESTIMATED TAXABLE OPERATING RESULTS OF THE
ZIMEL PORTFOLIO AND ESTIMATED CASH TO BE MADE AVAILABLE BY
OPERATIONS OF THE ZIMEL PORTFOLIO FOR A TWELVE-MONTH
PERIOD
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
REVENUES
Rents $ 1,626
Reimbursed Expenses 362
---------
Total 1,988
---------
COSTS AND EXPENSES
Rental Operating Expense 492
Depreciation 378
---------
Total 870
---------
Estimated Taxable Operating Income 1,118
Add Back Depreciation 378
---------
Estimated Cash to be Made Available by Operations $ 1,496
---------
---------
</TABLE>
Note
This statement of estimated taxable operating results and estimated cash to be
made available from operations is an estimate of operating results of the Zimel
Portfolio for a period of twelve months based on information provided by the
seller of the property and by management's independent review of the leases and
other documents and does not purport to reflect actual results for any period.
F-15
<PAGE>
Attachment (VII)
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Capitalized terms used herein and not otherwise defined have the respective
meanings ascribed to such terms under "Definitions" at F-22).
The accompanying unaudited pro forma condensed consolidated balance sheet gives
effect to the following transactions as if they occurred on September 30, 1998:
(i) the acquisition of the leasehold interest in Ernst-Lynnwood which was
completed after September 30, 1998; (ii) the Joint Venture Transactions which
were completed or expected to be completed after September 30, 1998; (iii) the
pending Sales of Real Estate and the application of the estimated proceeds
therefrom to repay indebtedness.
The accompanying unaudited pro forma condensed consolidated statements of income
give effect to the following transactions as if they had occurred on the first
day of the period presented: (i) the consummation of the 1997 Acquisitions; (ii)
the consummation of the 1998 Acquisitions; (iii) the Completed Common Stock
Offerings; (iv) the Joint Venture Transactions which were completed or expected
to be completed after September 30, 1998; (v) the Pending Sales of Real Estate
and (vi) the sale of a 75% joint venture interest in each of Margarita and
Ladera (in February 1997 and August 1997, respectively).
The pro forma condensed consolidated financial statements are unaudited and are
subject to a number of estimates, assumptions and other uncertainties, and do
not purport to be indicative of the actual financial position or results of
operations that would have occurred had the transactions and events reflected
therein in fact occurred on the dates specified, nor do such financial
statements purport to be indicative of the results of operations or financial
condition that may be achieved in the future.
F-16
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
JOINT VENTURE COMPLETED
HISTORICAL(1) TRANSACTIONS(2) ACQUISITIONS(3)
----------------- ----------------- -----------------
<S> <C> <C> <C>
ASSETS
Real Estate $ 1,132,408 $ (59,310) $ 2,132
Less Accumulated Depreciation (74,564) 2,639
----------------- ----------------- -----------------
Real Estate-Net 1,057,844 (56,671) 2,132
----------------- ----------------- -----------------
Investment in Unconsolidated Subsidiaries 3,683 30,398
Cash and Cash Equivalents 4,563
Restricted Cash 8,908
Receivables-Net 5,554
Other Assets 13,714 (812)
----------------- ----------------- -----------------
Total $ 1,094,266 $ (27,085) $ 2,132
----------------- ----------------- -----------------
----------------- ----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts Payable and Other $ 21,902 $ -- $ --
Tenant Security Deposits 2,937
Notes Payable 402,909
Line of Credit Advances 173,899 (27,085) 2,132
----------------- ----------------- -----------------
Total Liabilities 601,647 (27,085) 2,132
----------------- ----------------- -----------------
MINORITY INTEREST 70,554 -- --
----------------- ----------------- -----------------
STOCKHOLDERS' EQUITY
Preferred Stock 28 -- --
Common Stock 319
Paid in Capital in Excess of Par 524,872
Dividends Paid in Excess of Net Income (103,154)
----------------- ----------------- -----------------
Total Stockholders' Equity 422,065 -- --
----------------- ----------------- -----------------
Total $ 1,094,266 $ (27,085) $ 2,132
----------------- ----------------- -----------------
----------------- ----------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE
SALES(4) PRO FORMA
----------------- -----------------
<S> <C> <C>
ASSETS
Real Estate $ (19,266) $ 1,055,964
Less Accumulated Depreciation 5,970 (65,955)
----------------- -----------------
Real Estate-Net (13,296) 990,009
----------------- -----------------
Investment in Unconsolidated Subsidiaries 34,081
Cash and Cash Equivalents 4,563
Restricted Cash 8,908
Receivables-Net (224) 5,330
Other Assets (165) 12,737
----------------- -----------------
Total $ (13,685) $ 1,055,628
----------------- -----------------
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts Payable and Other $ (89) $ 21,813
Tenant Security Deposits (101) 2,836
Notes Payable 402,909
Line of Credit Advances (13,109) 135,837
----------------- -----------------
Total Liabilities (13,299) 563,395
----------------- -----------------
MINORITY INTEREST - 70,554
----------------- -----------------
STOCKHOLDERS' EQUITY
Preferred Stock - 28
Common Stock 319
Paid in Capital in Excess of Par 524,872
Dividends Paid in Excess of Net Income (386) (103,540)
----------------- -----------------
Total Stockholders' Equity (386) 421,679
----------------- -----------------
Total $ (13,685) $ 1,055,628
----------------- -----------------
----------------- -----------------
</TABLE>
- --------------------------
1 Reflects the historical condensed consolidated balance sheet of the Company
as of September 30, 1998.
2 Reflects the Joint Venture Transactions completed or expected to be
completed after September 30, 1998, for an aggregate investment of
approximately $30,398,000. The Company's investment was funded with the
contribution of real estate assets of the Company with a net book value of
approximately $57,000,000. Excess funds contributed by the Company, which
are expected to be returned of approximately $27,085,000 were used to repay
borrowings under the Company's Credit Facility.
3 Reflects the acquisition of the leasehold interest in Ernst-Lynnwood, which
was acquired by the Company after September 30, 1998, for approximately
$2,132,000. The acquisition was funded with funds provided under the
Company's Credit Facility.
4 Reflects the application of the estimated net proceeds from the pending
Sales of Real Estate of approximately $13,109,000 to repay borrowings under
the Company's Credit Facility.
F-17
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COMPLETED
COMPLETED COMMON STOCK JOINT VENTURE
HISTORICAL(1) ACQUISITIONS(2) OFFERING(3) TRANSACTIONS(4)
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES
Rents $ 95,898 $ 5,446 $ -- $ (4,715)
Management Fees 1,025
Interest 633
--------------- --------------- --------------- ---------------
Total Revenues 96,531 5,446 -- (3,690)
--------------- --------------- --------------- ---------------
COSTS AND EXPENSES
Interest 26,195 2,519 (1,882) (1,349)
Rental Operating 26,222 1,570 (898)
General and Administrative 3,958
Depreciation and Amortization 20,922 910 (1,221)
--------------- --------------- --------------- ---------------
Total Costs and Expenses 77,297 4,999 (1,882) (3,468)
--------------- --------------- --------------- ---------------
INCOME FROM OPERATIONS BEFORE
INCOME FROM UNCONSOLIDATED
SUBSIDARIES AND
MINORITY INTEREST 19,234 447 1,882 (222)
Income from
Unconsolidated Subsidiaries 160 1,298
Minority Interest (3,652) (22) (94) (54)
--------------- --------------- --------------- ---------------
Net Income 15,742 425 1,788 1,022
Dividends Paid to Preferred
Stockholders (4,200)
--------------- --------------- --------------- ---------------
INCOME AVAILABLE TO
COMMON STOCKHOLDERS $ 11,542 $ 425 $ 1,788 $ 1,022
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Income Before Extraordinary Item
Per Share-Basic $ 0.40
---------------
---------------
Weighted Average Number of
Shares-Basic 29,161
---------------
---------------
Income Before Extraordinary Item
Per Share-Diluted $ 0.39
---------------
---------------
Weighted Average Number of
Shares-Diluted 29,349
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE
SALES(5) PRO FORMA
--------------- ---------------
<S> <C> <C>
REVENUES
Rents $ (1,561) $ 95,068
Management Fees 1,025
Interest 633
--------------- ---------------
Total Revenues (1,561) 96,726
--------------- ---------------
COSTS AND EXPENSES
Interest (653) 24,830
Rental Operating (500) 26,394
General and Administrative 3,958
Depreciation and Amortization (476) 20,135
--------------- ---------------
Total Costs and Expenses (1,629) 75,317
--------------- ---------------
INCOME FROM OPERATIONS BEFORE
INCOME FROM UNCONSOLIDATED
SUBSIDARIES AND
MINORITY INTEREST 68 21,409
Income from
Unconsolidated Subsidiaries 1,458
Minority Interest (3) (3,825)
--------------- ---------------
Net Income 65 19,042
Dividends Paid to Preferred
Stockholders (4,200)
--------------- ---------------
INCOME AVAILABLE TO
COMMON STOCKHOLDERS $ 65 $ 14,842
--------------- ---------------
--------------- ---------------
Income Before Extraordinary Item
Per Share-Basic $ 0.47
---------------
---------------
Weighted Average Number of
Shares-Basic 31,913
---------------
---------------
Income Before Extraordinary Item
Per Share-Diluted $ 0.46
---------------
---------------
Weighted Average Number of
Shares-Diluted 32,104
---------------
---------------
</TABLE>
F-18
<PAGE>
(1) Reflects the historical condensed statement of income of the Company for
the nine months ended September 30, 1998.
(2) Reflects the 1998 Acquisitions as if such transactions had occurred on
January 1, 1998. Assumes that the acquisitions were funded with the
assumption of approximately $23,615,000 of mortgage indebtedness, bearing a
weighted-average interest rate of 9.36%, the incurrence of $7,000,000 of new
mortgage indebtedness, bearing a weighted-average interest rate of 7.54%, the
issuance of Common Operating Partnership units with an aggregate value of
approximately $18,115,000, with the remaining funds provided by borrowings
under the Company's Credit Facility at an assumed interest rate of 6.64% (the
weighted average interest rate on the Company's Credit Facility at November
1, 1998). Estimated depreciation and amortization expense is based upon the
Company's investments in such properties using asset lives of 30 years.
(3) Reflects the application of the proceeds from the 1998 Completed Common
Stock Offering to repay borrowings under the Credit Facility bearing an
assumed interest rate of 6.64%.
(4) Reflects the Joint Venture Transactions as if such transactions had
occurred on January 1, 1998. Anticipated excess funds returned to the Company
of approximately $27,085,000 were used to repay indebtedness under the
Company's Credit Facility bearing an assumed interest rate of 6.64%.
(5) Reflects the application of the estimated net proceeds from the pending
Sales of Real Estate of approximately $13,109,000 to repay indebtedness under
the Company's Credit Facility bearing an assumed interest rate of 6.64%.
F-19
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
COMPLETED
COMPLETED COMMON STOCK JOINT VENTURE
HISTORICAL(1) ACQUISITIONS(2) OFFERINGS(3) TRANSACTIONS(4)
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
REVENUES
Rents $ 67,413 $ 63,631 $ -- $ (6,025)
Management Fees 1,281
Interest 761 7
---------------- ---------------- ---------------- ----------------
Total Revenues 68,174 63,638 -- (4,744)
---------------- ---------------- ---------------- ----------------
COSTS AND EXPENSES
Interest 18,472 27,419 (9,156) (1,799)
Rental Operating 18,716 17,885 (1,353)
General and Administrative 3,035
Depreciation and Amortization 15,275 12,101 (1,162)
---------------- ---------------- ---------------- ----------------
Total Costs and Expenses 55,498 57,405 (9,156) (4,314)
---------------- ---------------- ---------------- ----------------
INCOME FROM OPERATIONS BEFORE
INCOME FROM UNCONSOLIDATED
SUBSIDARIES, MINORITY INTEREST,
GAIN ON SALES OF REAL ESTATE
AND EXTRAORDINARY ITEM 12,676 6,233 9,156 (430)
Gain on Sales of Real Estate 5,896
Income from
Unconsolidated Subsidiaries 223 1,646
Minority Interest (45) (4,312) (458) (61)
Extraordinary Item (52)
---------------- ---------------- ---------------- ----------------
Net Income 18,698 1,921 8,698 1,155
Dividends Paid to Preferred
Stockholders -- (5,600) -- --
---------------- ---------------- ---------------- ----------------
INCOME AVAILABLE TO
COMMON STOCKHOLDERS 18,698 (3,679) 8,698 1,155
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
Income Before Extraordinary Item
Per Share-Basic $ 0.88
----------------
----------------
Weighted Average Number of
Shares-Basic 21,335
----------------
----------------
Income Before Extraordinary Item
Per Share-Diluted $ 0.87
----------------
----------------
Weighted Average Number of
Shares-Diluted 21,521
----------------
----------------
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE FINANCING
SALES(5) TRANSACTIONS(6) PRO FORMA
---------------- ---------------- ----------------
<S> <C> <C> <C>
REVENUES
Rents $ (7,200) $ (2,035) $ 115,784
Management Fees 1,281
Interest (12) (26) 730
---------------- ---------------- ----------------
Total Revenues (7,212) (2,061) 117,795
---------------- ---------------- ----------------
COSTS AND EXPENSES
Interest (3,402) (891) 30,643
Rental Operating (2,203) (593) 32,452
General and Administrative 3,035
Depreciation and Amortization (1,548) (299) 24,367
---------------- ---------------- ----------------
Total Costs and Expenses (7,153) (1,783) 90,497
---------------- ---------------- ----------------
INCOME FROM OPERATIONS BEFORE
INCOME FROM UNCONSOLIDATED
SUBSIDARIES, MINORITY INTEREST,
GAIN ON SALES OF REAL ESTATE
AND EXTRAORDINARY ITEM (59) (278) 27,298
Gain on Sales of Real Estate 5,896
Income from
Unconsolidated Subsidiaries 292 2,161
Minority Interest 3 (1) (4,874)
Extraordinary Item (52)
---------------- ---------------- ----------------
Net Income (56) 13 30,429
Dividends Paid to Preferred
Stockholders -- -- (5,600)
---------------- ---------------- ----------------
INCOME AVAILABLE TO
COMMON STOCKHOLDERS (56) 13 24,829
---------------- ---------------- ----------------
---------------- ---------------- ----------------
Income Before Extraordinary Item
Per Share-Basic $ 0.78
----------------
----------------
Weighted Average Number of
Shares-Basic 31,872
----------------
----------------
Income Before Extraordinary Item
Per Share-Diluted $ 0.78
----------------
----------------
Weighted Average Number of
Shares-Diluted 31,991
----------------
----------------
</TABLE>
F-20
<PAGE>
(1) Reflects the historical condensed consolidated statement of income of the
Company for the year ended December 31, 1997.
(2) Reflects the 1997 and 1998 Acquisitions as if such transactions had
occurred on January 1, 1997. Assumes that the acquisitions were funded with
the assumption of approximately $83,167,000 of mortgage indebtedness, bearing
a weighted-average interest rate of 8.74%, the incurrence of $199,226,000 of
new mortgage indebtedness, bearing a weighted-average interest rate of 6.95%,
$50,000,000 of Preferred Units and $70,000,000 of Series A Preferred Stock,
each yielding 8%, the issuance of Common Operating Partnership units with an
aggregate value of approximately $26,396,000, with the remaining funds
provided by borrowings under the Company's Credit Facility at an assumed
interest rate of 6.64%. Estimated depreciation and amortization expense is
based upon the Company's investment in such properties using asset lives of
30 years.
(3) Reflects the application of the net proceeds from the completed Common
Stock Offerings to repay borrowings under the Credit Facility bearing an
assumed interest rate of 6.64%.
(4) Reflects the Joint Venture Transactions as if such transactions had
occurred on January 1, 1997. Anticipated excess funds returned to the Company
of approximately $27,085,000 were used to repay indebtedness under the
Company's Credit Facility bearing an assumed interest rate of 6.64%.
(5) Reflects the application of the proceeds from the sale of the Pacific
West Outlet Center in December 1997 for approximately $38,115,000 and the
pending Sales of Real Estate of approximately $13,109,000 to repay
indebtedness aggregating approximately $51,224,000 under the Company's Credit
Facility, bearing an assumed interest rate of 6.64%.
(6) Reflects the Company's sale of a 75% joint venture interest in each of
Ladera Shopping Center and Margarita Shopping Center, and the application of
the proceeds therefrom to repay indebtedness under the Credit Facility
bearing an assumed interest rate of 6.64%, as if such transactions had
occurred on January 1, 1997. The joint venture interest in Margarita Shopping
Center and Ladera Shopping Center were sold during the first and third
quarters of 1997, respectively.
F-21
<PAGE>
DEFINITIONS
"1997 Acquisitions" means the acquisitions by the Company of:
i) The "Downey Portfolio" during January 1997
ii) Foothill Plaza during February 1997
iii) Crenshaw-Imperial Plaza and the "BRE Portfolio" during April 1997
iv) The "Sacramento Portfolio" during May 1997
v) Olympiad Plaza during June 1997
vi) Mountaingate Plaza and the "Powell Portfolio(I)" during October 1997
vii) The "Golden State Properties", Meridian Village Shopping Center, Simi
Valley Plaza and the leasehold interest in Ernst-Redding during
December 1997
"1998 Acquisitions" means the acquisitions by the Company of:
i) Village East Shopping Center during February 1998
ii) Lake Arrowhead Village during May 1998
iii) The "Powell Portfolio(II)" and the "Carver Portfolio" during June 1998
iv) The "Zimel Portfolio" and Greentree Plaza during July 1998
v) The leasehold interest in Ernst-Brickyard during September 1998
vi) The leasehold interest in Ernst-Lynnwood during October 1998
"BRE Portfolio" means the three retail properties which the Company acquired
from BRE Properties, Inc., a real estate investment trust, during April 1997.
These properties are Fremont Hub, Central Shopping Center and Santa Fe Springs
Plaza.
"Carver Portfolio" means the three retail properties which the Company acquired
from an unrelated seller during July 1998. These properties are Mission Plaza,
Plaza de Monterey and Palms to Pines.
"Completed Common Stock Offerings" reflects offerings of Common Stock the
Company completed in May 1997 and March 1998. In connection with the 1997
offering, the Company repaid borrowings of approximately $73,576,000 with the
net proceeds from the sale of 6,325,000 shares of its Common Stock at a price
per share of $12.375. In connection with the 1998 offering, the Company repaid
borrowings of approximately $113,353,000 with the net proceeds from the sale of
7,475,000 shares of its Common Stock at a price per share of $14.125 and from
the issuance of 965,518 shares of its Common Stock to a Unit Investment Trust at
a price per share of $14.50.
"Credit Facility" means the Company's $205 million Credit Facility with Nomura
Asset Capital Corporation. The Credit Facility is scheduled to mature in
November 1999. Of the total facility, $135 million is secured or to be secured
by various mortgages and carries an interest rate equal to the London Inter Bank
Offer Rate ("LIBOR") plus 1.40%, and $70 million is unsecured and carries an
interest rate equal to LIBOR plus 1.50%.
"Downey Portfolio" means the four retail properties in which the Company
acquired interests from an affiliate of Downey Savings & Loan, an institutional
lender, during January 1997. These properties are Valley Central Shopping
Center, Cameron Park Shopping Center, Ontario Village Shopping Center and West
Lancaster Plaza.
F-22
<PAGE>
"Golden State Properties" means the twenty retail properties which the Company
acquired from an unrelated seller during December 1997. The properties are
Menifee Town Center, San Marcos Lucky Plaza Center, Westminster Center, Bell
Gardens Marketplace, Buena Vista Marketplace, Ralph's Center, Centerwood Plaza,
Prospector's Plaza, Santa Rosa Value Center, Fremont Gateway Plaza, Southampton
Center, Silver Creek Plaza, Summer Hills Shopping Center, Shasta Crossroads,
Creekside Shopping Center, 580 Marketplace, Discovery Plaza, Sunset Center,
Hallmark Town Center and Arcade Center.
"Joint Venture Transactions" refers to the Joint Venture ("JV") established
between the Operating Partnership of the Company and the State of California
Public Employees' Retirement System ("CalPERS") and the following transactions:
i) The contribution by CalPERS to the JV of five retail properties and
the purchase by the JV of one retail property during October 1998.
ii) The contribution by the Company to the JV of retail properties
expected to be completed during the first quarter of 1999.
"Powell Portfolio(I)" means the five retail properties which the Company
acquired from an unrelated seller during October 1997. These properties are
Chambers Creek, Design Market, Fairwoods Square, Puget Park and Silver Plaza.
"Powell Portfolio(II)" means the three retail properties which the Company
acquired from an unrelated seller during June 1998. These properties are Cruces
Norte Shopping Center, Keizer Creekside and Park Manor.
"Sacramento Portfolio" means the two retail properties which the Company
acquired from an unrelated seller during May 1997. The properties are Stanford
Ranch and Auburn Village.
"Zimel Portfolio" means the three retail properties which the Company acquired
from an unrelated seller during July 1998. These properties are Farmington
Village, Greenway Town Center and Young's Bay.
F-23
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
333-10559 on Form S-8 and 33-56555 and 333-31591 on Form S-3 of Burnham
Pacific Properties, Inc. of our report dated February 27, 1998 on the Village
East Shopping Center Historical Statement of Revenues and Direct Operating
Expenses for the year ended December 31, 1997; our report dated February 27,
1998 on the Arrowhead Village Historical Summary of Certain Revenues and
Certain Expenses for the year ended December 31, 1997; and our report dated
July 9, 1998 on the Zimel Portfolio Historical Statement of Certain Revenues
and Certain Expenses for the year ended December 31, 1997, included in this
Form 8-K of Burnham Pacific Properties, Inc.
Deloitte & Touche LLP
San Diego, California
December 21, 1998
