<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 29, 2000
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BURNHAM PACIFIC PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
MARYLAND 1-9524 33-0204126
------------------------- ------------------------ -----------------
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
110 WEST A STREET, SUITE 900, SAN DIEGO, CALIFORNIA 92101-3711
--------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(619) 652-4700
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
---
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE
LAST REPORT)
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ITEM 2. DISPOSITION OF ASSETS.
This Current Report on Form 8-K of Burnham Pacific Properties, Inc.
(the "Company") contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements
contained herein are statements that involve risks and uncertainties,
including, but not limited to, the satisfaction of conditions to the
consummation of the proposed assets sales, the timing of the consummation of
the proposed assets sales, the exact amounts of cash to be paid and
indebtedness to be assumed with respect to the assets subject to sale and
other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission.
As previously announced, on September 5, 2000 the Company entered
into a purchase and sale agreement (the "Prudential Agreement") with The
Prudential Insurance Company of America ("Prudential"), which agreement
provides for the sale of 13 of the Company's properties to Prudential for
gross consideration of approximately $317 million, consisting of cash and the
assumption of indebtedness. The terms of the Prudential Agreement permit
Prudential to assign the agreement to a joint venture formed by Developers
Diversified Realty Corporation ("DDRC"), Coventry Real Estate Partners
("Coventry"), and/or Prudential or their respective affiliates. The
Prudential Agreement was approved at the Company's 2000 Annual Meeting of
Stockholders held on December 15, 2000 as part of the Company's Plan of
Complete Liquidation and Dissolution.
COMPLETED TRANSACTIONS
The following sales are the first completed sales of the 13 properties
targeted for sale under the Prudential Agreement.
On December 5, 2000, the Company closed on the sale of the San Diego
Factory Outlet Center located in San Diego, California, and Meridian Village,
located in Bellingham, Washington, to Retail Value Investment Program for an
aggregate of $48.7 million, consisting of approximately $46.6 million in cash
and the assumption of $2.1 million of indebtedness. Retail Value Investment
Program is a joint venture formed by DDRC, Coventry and Prudential Real Estate
Investors. The Company's third-party liquidator, DDR Real Estate Services, Inc.,
is an indirect, wholly-owned subsidiary of DDRC. The Company realized an
aggregate gain on sale of approximately $3.9 million. Proceeds from the sales
were used to reduce the Company's outstanding indebtedness.
On December 29, 2000, the Company closed on the sale of three shopping
centers located in the Los Angeles, California metro region. The three shopping
centers are Valley Central Shopping Center located in Lancaster, California, the
Plaza at Puente Hills located in the City of Industry, California, and the La
Mancha Shopping Center located in Fullerton, California. The Company sold its
approximate 1.1 million square feet of acquired interest in the three centers to
Retail Value Investment Program for an aggregate of approximately $109.9
million, consisting of approximately $54.3 million in cash and the assumption of
$55.6 million of indebtedness. The Company realized an aggregate gain on sale of
approximately $13.5 million. Proceeds from the sales were used to reduce the
Company's outstanding indebtedness.
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PROBABLE TRANSACTIONS
The following eight properties remain to be sold pursuant to the
Prudential Agreement for an aggregate purchase price of approximately $158
million:
<TABLE>
<CAPTION>
Allocated
Property City/State Purchase Price
-------- ---------- ----------------
<S> <C> <C>
Downtown Pleasant Hill Pleasant Hill, CA $ 62,309,420
Lake Arrowhead Lake Arrowhead Village, CA 26,306,541
Mountaingate Simi Valley, CA 22,500,000
Cameron Park Cameron Park, CA 15,067,287
Olympiad Plaza Mission Viejo, CA 11,763,031
Richmond City Center Richmond, CA 10,381,253
Keizer Creekside Keizer, OR 5,797,892
Puget Park Everett, WA 3,885,504
----------------
$ 158,010,928
================
</TABLE>
The parties who originally contributed the Lake Arrowhead center to
the Company in exchange for units of limited partnership interest in Burnham
Pacific Operating Partnership, L.P. have exercised their right of first
refusal to acquire the asset on substantially the same terms as Prudential.
The Company is currently negotiating a definitive purchase agreement with
these parties, and upon execution of a purchase and sale agreement with these
potential buyers, the Lake Arrowhead center will no longer be subject to the
Prudential Agreement. If such a definitive purchase and sale agreement is not
executed, however, Prudential will continue to be obligated to purchase Lake
Arrowhead on the current terms set forth in the Prudential Agreement.
The closing of each of these eight properties is subject to a number
of conditions set forth in the Prudential Agreement, a copy of which has been
incorporated by reference herein as Exhibit 99.1, including, among others,
receipt of lender approval and obtaining lease-ups of certain space. As a
result, the closing date and, accordingly, the exact amounts of cash to be
paid and indebtedness to be assumed with respect to each of these remaining
assets are uncertain. Because the sales of these remaining assets are still
depending, there can be no assurance that the Company will consummate the
sales or, if sold, that they will be sold on the terms currently contemplated.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information statements are included herein
pursuant to Article 11 of Regulation S-X.
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(c) EXHIBITS.
99.1 Purchase and Sale Agreement, by and between the
Company and Prudential, dated as of September 5, 2000
(incorporated by reference to Exhibit 10.2 to the
Company's Form 10-Q for the fiscal quarter ended
September 30, 2000).
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the Company has duly caused this report to be filed on
its behalf by the undersigned, thereunto duly authorized.
BURNHAM PACIFIC PROPERTIES, INC.
Dated: January 16, 2001 By: /s/ Daniel B. Platt
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Name: Daniel B. Platt
Title: Chief Financial Officer
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BURNHAM PACIFIC PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed consolidated balance
sheet as of September 30, 2000 gives effect to the following transactions as if
they had occurred on September 30, 2000: (i) the sale of the San Diego Factory
Outlet Center and Meridian Village on December 5, 2000 and the sale of Valley
Central Shopping Center, Plaza at Puente Hills, and La Mancha on December 29,
2000 (collectively the "Completed Transactions"), and (ii) the proposed sale of
Downtown Pleasant Hill, Lake Arrowhead, Mountaingate, Cameron Park, Olympiad
Plaza, Richmond City Center, Keizer Creekside, and Puget Park (collectively the
"Probable Transactions").
The accompanying unaudited pro forma condensed consolidated statements
of income give effect to the Completed Transactions and Probable Transactions as
if they had occurred on January 1, 2000 and January 1, 1999.
The unaudited pro forma condensed consolidated financial statements 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. These unaudited pro forma
consolidated financial statements should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and all of the financial statements and notes thereto contained in
the Company's Quarterly Report on Form 10-Q/A for the quarter ended September
30, 2000, and the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
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BURNHAM PACIFIC PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMPLETED PROBABLE
HISTORICAL TRANSACTIONS TRANSACTIONS PRO-FORMA
--------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Real Estate $ 982,193 $ (160,528)(1) $ (182,677)(6) $ 638,988
Less Accumulated Depreciation (74,940) 25,321 (1) 7,975 (6) (41,644)
--------------- --------------- ---------------- --------------
Real Estate-Net 907,253 (135,207) (174,702) 597,344
Real Estate Held for Sale 29,661 - - 29,661
Cash and Cash Equivalents 4,236 7,226 (2) 36,977 (7) 48,439
Restricted Cash 11,126 - - 11,126
Receivables-Net 10,450 - - 10,450
Investments in Unconsolidated Subsidiaries 3,599 - - 3,599
Other Assets 23,979 (3,211)(3) (6,035)(8) 14,733
--------------- --------------- ---------------- --------------
Total $ 990,304 $ (131,192) $ (143,760) $ 715,352
=============== =============== ================ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts Payable and Other Liabilities $ 24,968 $ - $ - $ 24,968
Tenant Security Deposits 2,569 (345)(3) (451)(8) 1,773
Note Payable 406,530 (57,655)(4) (123,193)(9) 225,682
Line of Credit Advances 157,392 (90,581)(4) (5,218)(9) 61,593
--------------- --------------- ---------------- --------------
Total Liabilities $ 591,459 $ (148,581) $ (128,862) $ 314,016
--------------- --------------- ---------------- --------------
Commitments and Contingencies:
Minority Interest 24,518 - $ (9,549)(10) 14,969
Stockholders' Equity:
Preferred Stock 44 - - 44
Common Stock 323 - - 323
Paid in Capital in Excess of Par 568,250 - 5,665 (11) 573,915
Dividends Paid in Excess of Net Income (194,290) 17,389 (5) $ (11,014)(12) (187,915)
--------------- --------------- ---------------- --------------
Total Stockholders' Equity 374,327 17,389 (5,349) 386,367
--------------- --------------- ---------------- --------------
Total $ 990,304 $ (131,192) $ (143,760) $ 715,352
=============== =============== ================ ==============
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements
7
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMPLETED PROBABLE
HISTORICAL TRANSACTIONS TRANSACTIONS PRO-FORMA
--------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
REVENUES
Rents 89,277 (16,374) (13) (12,567) (16) 60,336
Fee Income 803 - - 803
Interest 1,230 - - 1,230
--------------- --------------- ---------------- --------------
Total Revenues 91,310 (16,374) (12,567) 62,369
COSTS AND EXPENSES
Interest 32,019 (9,804) (14) (5,382) (17) 16,833
Rental Operating 26,216 (4,221) (13) (3,845) (16) 18,150
General and Administrative 8,009 - - 8,009
Provision for Bad Debt 785 (159) (13) (321) (16) 305
Litigation 3,613 - - 3,613
Costs Associated with Un-
solicited Proposal and Pursuit
of Strategic Alternatives 4,642 - - 4,642
Restructuring Charge 2,144 - - 2,144
Impairment Write-Off 32,330 (476) (15) (20,037) (18) 11,817
Depreciation and Amortization 19,960 (3,313) (13) (2,960) (16) 13,687
--------------- --------------- ---------------- --------------
Total Costs and Expenses 129,718 (17,973) (32,545) 79,200
--------------- --------------- ---------------- --------------
Income from Operations Before
Income from Unconsolidated Subsidiaries,
Minority Interest, Gain on Sales of Real
Estate, and Dividends Paid to Preferred
Stockholders (38,408) 1,599 19,978 (16,831)
Income from Unconsolidated Subsidiaries 99 - - 99
Minority Interest (1,386) - - (1,386)
Gain on Sales of Real Estate 1,226 - - 1,226
Dividends Paid to Preferred Stockholders (4,467) - - (4,467)
--------------- --------------- ---------------- --------------
Income Available to Common Stockholders (42,936) 1,599 19,978 (21,359)
=============== =============== ================ ==============
Net Income Before Extraordinary Item
Per Share - Basic and Diluted (1.33) 0.05 0.62 (0.66)
=============== =============== ================ ==============
Weighted Ave. No. of Shares -
Basic and Diluted 32,308 32,308 32,308 32,308
=============== =============== ================ ==============
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements
8
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMPLETED PROBABLE
HISTORICAL TRANSACTIONS TRANSACTIONS PRO-FORMA
--------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
REVENUES
Rents 126,091 (21,354) (19) (13,978) (21) 90,759
Fee Income 5,078 - - 5,078
Interest 1,641 - - 1,641
--------------- --------------- ---------------- --------------
Total Revenues 132,810 (21,354) (13,978) 97,478
COSTS AND EXPENSES
Interest 36,391 (13,078) (20) (5,448) (22) 17,865
Rental Operating 36,607 (5,526) (19) (4,255) (21) 26,826
Provision for Bad Debt 1,231 (424) (19) (351) (21) 456
General and Administrative 8,021 (5) (19) - 8,016
Restructuring Charge 1,353 - - 1,353
Abandoned Acquisition Costs 748 - - 748
Costs Associated with Un-
solicited Proposal and Pursuit
of Strategic Alternatives 4,548 - - 4,548
Impairment Write-Off 2,200 - - 2,200
Depreciation and Amortization 28,182 (4,395) (19) (2,372) (21) 21,415
--------------- --------------- ---------------- --------------
Total Costs and Expenses 119,281 (23,428) (12,426) 83,427
--------------- --------------- ---------------- --------------
Income from Operations Before
Income from Unconsolidated Subsidiaries,
Minority Interest, Gain on Sales of Real
Estate, and Dividends Paid to Preferred
Stockholders 13,529 2,074 (1,552) 14,051
Income from Unconsolidated Subsidiaries 1,077 - - 1,077
Minority Interest (5,024) - - (5,024)
Gain on Sales of Real Estate 10,371 - - 10,371
Dividends Paid to Preferred Stockholders (5,600) - - (5,600)
--------------- --------------- ---------------- --------------
Income Available to Common Stockholders 14,353 2,074 (1,552) 14,875
=============== =============== ================ ==============
Net Income Before Extraordinary Item
Per Share - Basic and Diluted 0.45 0.06 (0.05) 0.46
=============== =============== ================ ==============
Weighted Ave. No. of Shares -
Basic and Diluted 32,062 32,062 32,062 32,062
=============== =============== ================ ==============
</TABLE>
See accompanying notes to the unaudited pro forma condensed consolidated
financial statements
9
<PAGE>
BURNHAM PACIFIC PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30,
2000
The unaudited pro forma condensed consolidated balance sheet as of September
30, 2000 assumes the Completed Transactions and the Probable Transactions
occurred on September 30, 2000. The pro forma information is based upon the
Company's historical statements included in the Company's quarterly report on
Form 10-Q/A after giving effect to the following adjustments:
COMPLETED TRANSACTIONS
(1) Reflects the carrying value of the real estate and accumulated
depreciation of the Completed Transactions as of September 30,
2000.
(2) Reflects the net cash proceeds after repayment of mortgage debt
and the partial pay down of line of credit for the Completed
Transactions.
(3) Reflects the carrying amount of certain assets and liabilities
related to the Completed Transactions.
(4) Reflects the repayment of the mortgage debt and the partial
pay down of line of credit in connection with the Completed
Transactions.
(5) Reflects the aggregate gain on sales of $17.4 million on the
Completed Transactions.
PROBABLE TRANSACTIONS
(6) Reflects the carrying value of the real estate and accumulated
depreciation of the Probable Transactions as of September 30,
2000.
(7) Reflects the net cash proceeds after the repayment of mortgage
debt, the partial pay down of line of credit and the redemption
of minority interest in connection with the Probable
Transactions.
(8) Reflects the carrying amount of certain assets and liabilities
related to the Probable Transactions.
(9) Reflects the repayment of the mortgage debt and the partial
pay down of line of credit in connection with the sale of the
Probable Transactions.
(10) Reflects the carrying value of the units of limited
partnership interest in Burnham Pacific Operating Partnership
L.P. repurchased in connection with the sale of the Probable
Transactions.
(11) Reflects the aggregate difference in original minority interest
issue price over redemption price of the minority interest paid
in connection with the Probable Transactions.
(12) Reflects the estimated aggregate loss on sales of $11.0 million
on the Probable Transactions.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2000
The Company's unaudited pro forma condensed consolidated statement of income for
the nine months ended September 30, 2000 assumes the Completed Transactions
and the Probable Transactions occured on January 01, 2000,
10
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but does not reflect the aggregate net gain on sale of properties. The pro
forma financial information is based on the unaudited historical financial
statements included in the Company's quarterly report on Form 10-Q/A for the
fiscal quarter ended September 30, 2000 after giving effect to the following
adjustments:
COMPLETED TRANSACTIONS
(13) Reflects the actual operating results for revenues and expenses
for the nine months ended September 30, 2000 for the Completed
Transactions.
(14) Reflects the decrease in interest expense resulting from the
repayment of the mortgage debt and the partial pay down of line
of credit in connection with the Completed Transactions.
(15) Reflects the decrease in impairment write-off related to the
Completed Transactions.
PROBABLE TRANSACTIONS
(16) Reflects the actual operating results for revenues and expenses
for the nine months ended September 30, 2000 for the Probable
Transactions.
(17) Reflects the decrease in interest expense resulting from the
repayment of the mortgage debt and the partial pay down of line
of credit in connection with the Probable Transactions.
(18) Reflects the decrease in impairment write-off related to the
Probable Transactions.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR
ENDED DECEMBER 31, 1999
The Company's unaudited pro forma condensed consolidated statement of income
for the year ended December 31, 1999 assumes the Completed Transactions and
the Probable Transactions occurred January 01, 1999, but does not reflect the
aggregate net gain on sale of properties. The pro forma financial information
is based on the unaudited historical financial statements included in the
Company's annual report on Form 10-K for the fiscal year ended December 31,
1999 after giving effect to the following adjustments:
COMPLETED TRANSACTIONS
(19) Reflects the actual operating results for revenues and expenses
for the year ended December 31, 1999 for the Completed
Transactions.
(20) Reflects the decrease in interest expense resulting from the
repayment of the mortgage debt and the partial pay down of line
of credit in connection with the Completed Transactions.
PROBABLE TRANSACTIONS
(21) Reflects the actual operating results for revenues and expenses
for the year ended December 31, 1999 for the Probable
Transactions.
(22) Reflects the decrease in interest expense resulting from the
repayment of the mortgage debt and the partial pay down of line
of credit in connection with the Probable Transactions.
11
