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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) September 12, 1996
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SECURITY CAPITAL PACIFIC TRUST
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-10272 74-6056896
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(Commission File Number) (I.R.S. Employer Identification No.)
7777 Market Center Avenue, El Paso, Texas 79912
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(Address of Principal Executive Offices) (Zip Code)
(915) 877-3900
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS
On September 12, 1996, the Registrant announced that its shareholders had
approved the Homestead Village spin-off and separately announced a future
conversion price adjustment for its Cumulative Convertible Series A Preferred
Shares. On September 17, 1996, the Registrant announced $492.5 million of
acquisition and development investments in California and the expected
completion of $250 - 300 million of 1996 asset optimization transactions. These
announcements are filed as exhibits hereto and are hereby incorporated by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press Release dated September 12, 1996.
99.2 Press Release dated September 12, 1996.
99.3 Press Release dated September 17, 1996.
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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 hereunto duly authorized.
SECURITY CAPITAL PACIFIC TRUST
Dated: September 23, 1996 By: /s/ James W. Kluber
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James W. Kluber
Vice President and Controller
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Exhibit 99.1
Press Release
For Immediate Release
SECURITY CAPITAL PACIFIC TRUST
ANNOUNCES
SHAREHOLDER APPROVAL OF HOMESTEAD VILLAGE(R) SPIN-OFF
September 12, 1996 - Security Capital Pacific Trust (New York Stock
Exchange Symbol: PTR) today announced that holders of approximately 83.49% of
its common shares voted to approve the merger and distribution agreement under
which its Homestead Village(R) properties will be spun off to a newly formed
company, Homestead Village Incorporated (Homestead). Less than 1% of PTR
shareholders voted against the merger and distribution agreement. The
transaction is expected to close in October 1996, subject to the conditions
contained in the merger and distribution agreement.
Following the closing, PTR will distribute an aggregate of 9,485,727 shares
of Homestead common stock plus warrants to purchase an additional 6,363,789
shares of Homestead common stock to holders of PTR common shares as of the
distribution record date. The distribution record date will be based on the
actual closing date of the merger transaction. Both Homestead common stock and
warrants have been approved for listing on the American Stock Exchange.
Under the terms of the merger and distribution agreement between PTR,
Security Capital Atlantic Incorporated (ATLANTIC) and Security Capital Group
Incorporated (SCG), Homestead will receive a total of 80 Homestead Village
properties as well as the Homestead Village trademark and operating systems. In
return, PTR and its shareholders will own 63.21% of Homestead, ATLANTIC and its
shareholders will own 28% of Homestead and SCG will own 8.79% of the new
company.
David C. Dressler Jr., Chairman of Homestead, said, "Demand for purpose-
built, extended-stay properties will rise as the result of increased consumer
awareness of the product, employee mobility and cost-conscious business travel.
We believe Homestead Village has the potential for significant growth. We have
been operating Homestead properties since 1992. As a result, we have people and
operating systems in place to provide exceptional value and superior customer
service."
Homestead will be an internally managed corporation focused on maximizing
shareholder value by becoming the preeminent developer, owner and operator of
moderate-priced extended-stay facilities across the United States. Homestead is
currently conducting a national roll-out of its product. "Homestead has made
excellent progress in expanding its portfolio beyond the 80 properties
contributed by PTR and ATLANTIC. We are currently processing entitlements on 39
additional sites we have under contract, bringing our pipeline to 119 properties
completed or under development. In addition, our development staff of 55
professionals is currently reviewing additional development opportunities in 29
cities," Mr. Dressler said. Homestead's target market is national, focusing on
major metropolitan areas, such as San Francisco, with seven Homestead Village
sites under development, and Washington, D.C., which currently has nine
development sites.
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Designed primarily for professionals on temporary work assignment,
relocating to another city or in job-related training, Homestead Village
provides the extended-stay guest with 260 to 325 square feet of fully furnished
living space, kitchen facilities with full-sized refrigerator, microwave, sink
and cooktop, weekly housekeeping service, individual voice mail and dataport,
and coin-operated laundry facilities. Rates at Homestead range from $189 to
$289 a week, compared to $550 a week for traditional extended-stay hotels.
PTR is the preeminent real estate operating company focusing on the
development, acquisition, operation and long-term ownership of multifamily
properties in the growing markets of the western United States. PTR's primary
objective is generating long-term, sustainable growth in per share cash flow.
As of July 31, 1996, PTR's portfolio included 44,582 operating multifamily
units, 7,237 units under construction and an estimated 8,988 units in planning.
In addition, PTR owns land for future development of an expected 4,093 units.
FOR MORE INFORMATION, CONTACT: K. Scott Canon
(800) 982-9293
or
Gerard de Gunzburg
(212) 838-9292
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Exhibit 99.2
Press Release
For Immediate Release
SECURITY CAPITAL PACIFIC TRUST
ANNOUNCES
FUTURE CONVERSION PRICE ADJUSTMENT OF
CUMULATIVE CONVERTIBLE SERIES A PREFERRED SHARES
September 12, 1996 - Security Capital Pacific Trust (New York Stock
Exchange Symbol: PTR) today announced that an adjustment will be made to the
conversion price of its Cumulative Convertible Series A preferred shares (NYSE
symbol: PTR PrA) as a result of the approval of the merger and distribution
agreement under which its Homestead Village(R) properties will be spun off to a
newly formed company, Homestead Village Incorporated (Homestead), and the
subsequent distribution of Homestead common stock and warrants to PTR's common
shareholders.
PTR's management said that holders of PTR's Series A preferred shares
should note the following:
. The distribution record date for the Homestead spin-off will be
determined by the PTR Board of Trustees on or after the closing of the
transaction creating Homestead. The transaction is expected to close
in October 1996, subject to the conditions contained in the merger and
distribution agreement.
. The Homestead securities will be listed on the American Stock
Exchange. Trading in Homestead securities will not occur until two
trading days after the distribution record date.
. At least 10 days before the distribution record date, written notice
of the distribution of the Homestead securities and the method for
determining the conversion price adjustment for the Series A preferred
shares will be sent to all holders of Series A preferred shares. The
conversion price adjustment will be determined by multiplying the
current conversion price of $20.56 per Series A share by a fraction,
the numerator of which will be the fair market value of a PTR common
share less the fair market value of the Homestead securities to be
distributed per PTR common share as of the distribution record date,
and the denominator of which will be the fair market value of a PTR
common share. The fair market value of PTR common shares will be
based on the average of the last reported sale prices of PTR common
shares on the New York Stock Exchange for five consecutive trading
days selected by PTR beginning no earlier than 20 trading days before
the distribution record date. The fair market value of the Homestead
securities will be determined by PTR's Chairman or the Board of
Trustees.
. The adjustment to the conversion price will be determined after the
close of business on the distribution record date and will be
effective at the opening of business on the next business day.
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. The actual number of Homestead securities which each PTR common
shareholder as of the distribution record date will receive will
depend on how many Series A preferred shares are converted prior to
the close of business on the distribution record date. PTR will
distribute an aggregate of 9,485,727 shares of Homestead common stock
and 6,363,789 Homestead warrants to holders of PTR common shares as of
the distribution record date. There are currently 8,736,200 Series A
preferred shares outstanding which are currently convertible into
10,624,966 PTR common shares. If a Series A preferred shareholder
elects to participate in the Homestead distribution, the conversion
must take place before the close of business on the distribution
record date.
. The Homestead securities will be distributed approximately 14 days
after the distribution record date.
FOR MORE INFORMATION, CONTACT: K. Scott Canon
(800) 982-9293
or
Gerard de Gunzburg
(212) 838-9292
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Exhibit 99.3
Press Release
For Immediate Release
SECURITY CAPITAL PACIFIC TRUST
ANNOUNCES $495.2 MILLION OF ACQUISITION AND DEVELOPMENT INVESTMENTS IN
CALIFORNIA AND EXPECTED COMPLETION OF $250 - 300 MILLION OF
1996 ASSET OPTIMIZATION TRANSACTIONS
September 17, 1996 - Security Capital Pacific Trust (New York Stock
Exchange Symbol: PTR) today announced acquisition transactions totaling $286.6
million of existing multifamily assets in strategically targeted California
submarkets, representing 4,086 units. As of today, $211.7 million of these
transactions have closed with the remaining $74.9 million expected to close
during the fourth quarter. These properties have been purchased at
approximately 65% of replacement cost. With the completion of these
acquisitions, PTR will have a total investment of $416.8 million in California,
representing 6,465 units.
The California acquisitions have been funded primarily by PTR's asset
optimization program and the issuance of long-term debt. PTR expects to
complete the disposition of $250 to $300 million of properties through tax-
deferred exchanges during 1996. As of today, PTR has completed the disposition
of $172.6 million of properties, realizing an average unleveraged total return
of 14.8% during PTR's holding period. By utilizing PTR's proprietary market
research, management is able to redeploy capital into markets with the strongest
prospects for growth. The asset optimization program positions PTR to fund its
investment program without a return to the common equity markets. PTR expects
to complete the disposition of an additional $200 to $250 million of assets in
1997. In addition to asset optimization, PTR's long-term debt program is an
important component of its funding strategy. During the third quarter of 1996,
PTR has issued an additional $100 million of long-term debt at an all-in cost of
7.95% and an average life of 15.6 years. PTR now has a total of $450 million of
fully amortizing debt with an average life of 14.97 years and a weighted average
fixed rate of 7.66%.
R. Scott Sellers, Managing Director for Investments, said, "We have been
researching California markets since 1993 and as a result have developed a very
specific investment plan. These transactions in California are an important
component of PTR's future growth and represent the benefit of our proprietary
research capability."
In addition to the strategic acquisition of well-located existing
properties, PTR is focused on acquiring control of land for the development of
new communities. As of today, PTR controls land for the development of seven
communities in Northern and Southern California. Currently in various stages of
the development process, these transactions represent a total expected
investment upon completion of $208.6 million in new developments. Construction
on PTR's first development site in California, a 241-unit property in the
master-planned community of Aliso Viejo in Orange County, is expected to
commence during the first quarter of 1997.
Mr. Sellers said that PTR's investment program in California is expected to
produce very strong cash flow growth because of California's resurgent
employment market, high barriers to entry and an
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expensive single-family home market. "We are continuing to pursue a number of
exciting opportunities and expect our overall investment in California to
represent a significant part of PTR's portfolio by the end of 1997," Mr. Sellers
said.
PTR has opened offices in the Bay Area (Hayward) and in Southern California
(Irvine) and has 20 professionals focused on acquiring, developing and operating
California assets. The 10 senior members of PTR's California team have an
average of more than 14 years' experience in the California real estate market.
"The exceptional team of professionals in our California offices has allowed us
to move quickly to acquire a strategic position there. We have the local
representation and hands-on expertise that we need to generate strong operating
results and identify additional opportunistic acquisitions," Mr. Sellers said.
Recent acquisitions in California include the following properties:
. The Crossing is a 296-unit moderate income community located in the
city of Corona close to important Orange County employment centers.
The property is surrounded by over 600,000 square feet of retail
services and offers excellent access to major transportation
corridors. PTR acquired The Crossing in May 1996 at a total expected
investment of $15.5 million, including planned capital improvements.
. El Dorado Hills is a 448-unit moderate income property in the
Tierrasanta submarket in San Diego which has only three multifamily
communities and extremely high barriers to entry. PTR also owns
Tierrasanta Ridge and now controls the majority of units in the
submarket. El Dorado Hills' proximity to Mission Trails Park, a 5,600-
acre regional park with 29 miles of trails, is a significant
competitive advantage. PTR acquired El Dorado Hills in July 1996 at a
total expected investment of $31.2 million, including planned capital
improvements.
. Mission Springs/Mission Villas is a 736-unit middle income property in
Ontario. This property is located within minutes of the rapidly
expanding Ontario commercial corridor where seven major industrial and
retail development projects are expected to add more than 20,000 new
jobs. PTR acquired Mission Springs/Mission Villas in May 1996 at a
total expected investment of $39.3 million, including planned capital
improvements.
. Newpointe is a 160-unit moderate income community in the desirable
Orange County community of Tustin. Its proximity to Highway 55 and I-5
provides easy access to employment concentrations in the Irvine
business district and the Orange County airport area. Newpointe is
only minutes from the Irvine Company's upscale Tustin Ranch master-
planned community. PTR acquired Newpointe in July 1996 at a total
expected investment of $9.6 million, including planned capital
improvements.
. Oakwood is a 948-unit moderate income community in the heart of
Silicon Valley where job growth, primarily in computer services and
software development, is among the highest in the nation. Located next
to I-280, Oakwood is within five to 10 minutes of Silicon Valley's
major employers. PTR acquired Oakwood in September 1996 at a total
expected investment of $84.2 million, including planned capital
improvements.
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. Quail Ridge is a 396-unit moderate income property in the north San
Francisco Bay Area. Located near I-780, Quail Ridge is within minutes
of extensive retail services. Previously undermanaged, Quail Ridge is
expected to achieve significant revenue growth under PTR management.
PTR acquired Quail Ridge in June 1996 at a total expected investment
of $19.3 million, including planned capital improvements.
. Woodsong Village is a 262-unit moderate income property in Rancho
Cucamonga, one of the most desirable submarkets in the Inland Empire
area. Woodsong Village is in proximity to new office and retail
developments, major freeways and the Ontario Airport. PTR acquired
Woodsong Village in August 1996 at a total expected investment of
$12.6 million, including planned capital improvements.
This release contains forward-looking statements which are based on
management's current expectations but which involve risks and uncertainties.
PTR's actual results with respect to the assets described in this release could
differ materially from those anticipated in this release as a result of certain
factors, including risks associated with changes in national and local economic
conditions, competitive market conditions, obtaining governmental approvals and
meeting development schedules.
PTR is the preeminent real estate operating company focusing on the
development, acquisition, operation and long-term ownership of multifamily
properties in the growing markets of the western United States. PTR's primary
objective is generating long-term, sustainable growth in per share cash flow. As
of July 31, 1996, PTR's portfolio included 44,582 operating multifamily units,
7,237 units under construction and an estimated 8,988 units in planning. In
addition, PTR owns land for future development of an expected 4,093 units.
FOR MORE INFORMATION, CONTACT: K. Scott Canon
(800) 982-9293
or
Gerard de Gunzburg
(212) 838-9292
