<PAGE>
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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): FEBRUARY 20, 1997
SECURITY CAPITAL PACIFIC TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-10272 74-6056896
(STATE OR OTHER (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION)
7777 MARKET CENTER AVENUE, 79912
EL PASO, TEXAS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (915) 877-3900
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
- --------------------------------------------------------------------------------
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<PAGE>
ITEM 5. OTHER EVENTS
ACQUISITIONS AND PROBABLE ACQUISITIONS:
The following acquisitions of multifamily communities, including three
communities under contract, were or will be made by Security Capital Pacific
Trust (PTR) from unrelated parties. PTR acquired, or will acquire, these
communities because PTR and its REIT manager, Security Capital Pacific
Incorporated, believe that multifamily community investments in the western
United States present excellent long term opportunities for consistent rental
increases, high occupancies and value appreciation.
PTR acquired Telegraph Hill apartments on October 15 1996 from a limited
partnership. Telegraph Hill is a 200 unit, moderate income complex located in
Albuquerque, New Mexico. PTR acquired this community for approximately $8.1
million. At date of purchase, the community's occupancy rate was 91.0%.
PTR acquired Villa Marseille apartments on November 13, 1996 from a general
partnership. Villa Marseille is a 192 unit, middle income complex located in
Aliso Viejo (Orange County), California. PTR acquired this community for
approximately $13.1 million. At date of purchase, the community's occupancy
rate was 98.4%.
PTR acquired The Palisades apartments on November 27, 1996 from a
corporation. The Palisades is a 296 unit, upper middle income complex located
in La Jolla (San Diego County), California. PTR acquired this community for
approximately $31.6 million. At date of purchase, the community's occupancy
rate was 96.6%.
PTR acquired Clubhouse apartments on December 19, 1996 from a limited
partnership. Clubhouse is a 194 unit, moderate income complex located in
Seattle, Washington. PTR acquired this community for approximately $8.0
million and assumed a mortgage note payable in the amount of $5.8 million. At
date of purchase, the community's occupancy rate was 96.4%.
PTR acquired Harborside apartments on December 31, 1996 from a limited
partnership. Harborside is a 148 unit, upper middle income complex located in
San Francisco, California. PTR acquired this community for approximately $21.4
million. At date of purchase, the community's occupancy rate was 97.3%.
PTR acquired Newport Crossing apartments on January 10, 1997 from a
corporation. Newport Crossing is a 192 unit, middle income complex located in
Seattle, Washington. PTR acquired this community for approximately $11.3
million. At date of purchase, the community's occupancy rate was 94.3%.
PTR acquired Reflections apartments on January 27, 1997 from a general
partnership. Reflections is a 496 unit, middle income complex located in San
Francisco, California. PTR acquired this community for approximately $52.1
million. At date of purchase, the community's occupancy rate was 92.7%.
PTR has entered into a contract with a general partnership to purchase
Marina Lakes apartments, scheduled to close in February, 1997. PTR's earnest
money has become non-refundable and acquisition of this community is likely.
However, there can be no assurance that the community will be acquired. Marina
Lakes consists of two moderate income complexes, Marina Lakes East which
consists of 220 units and Marina Lakes West which consists of 248 units. Both
are located in Oakland, California and on January 9, 1997 were 98% occupied on
a combined basis. The anticipated aggregate cost of the property is
approximately $39.5 million which, for purposes of this report, has been
prorated between the two communities based on the number of units ($18.6
million for Marina Lakes East and $20.9 million for Marina Lakes West). PTR
anticipates assuming a mortgage note payable in the amount of $13.6 million in
connection with Marina Lakes East.
PTR has entered into a contract with a corporation to purchase Folsom Ranch
apartments, scheduled to close in March, 1997. PTR's earnest money has become
non-refundable and acquisition of this community is likely. However, there can
be no assurance that the community will be acquired. Folsom Ranch is a 344
unit middle income complex located in Sacramento, California and on December
12, 1996 was 98.0% occupied. The anticipated cost of the community is
approximately $23.2 million.
2
<PAGE>
PTR has entered into a contract with a corporation to purchase River Meadows
apartments, scheduled to close in March, 1997. PTR's earnest money has become
non-refundable and acquisition of this community is likely. However, there can
be no assurance that the community will be acquired. River Meadows is a 152
unit middle income complex located in Huntington Beach (Orange County),
California and on January 16, 1997 was 96.0% occupied. The anticipated cost of
the community is approximately $13.9 million. PTR anticipates assuming a
mortgage note payable in the amount of $10 million in connection with the
acquisition.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBIT
(a) Financial Statements:
Combined Statements of Revenues and Certain Expenses for Certain
Multifamily Communities with Independent Auditors' Report thereon.
(b) Pro Forma Financial Information:
Pro Forma Balance Sheet as of September 30, 1996 (unaudited)
Pro Forma Statement of Earnings for the year ended December 31, 1995
(unaudited)
Pro Forma Statement of Earnings for the nine months ended September
30, 1996 (unaudited)
(c) Exhibit:
Exhibit 23.1--Independent Auditors' Consent
3
<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.
Security Capital Pacific Trust
/s/ Bryan Flanagan
_____________________________________
Bryan Flanagan
Senior Vice President and
Principal Financial Officer
/s/ Ash Atwood
_____________________________________
Ash Atwood
Vice President of Financial
Reporting and Duly Authorized
Officer
Date: February 20, 1997
4
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Security Capital Pacific Trust:
We have audited the accompanying Combined Statement of Revenues and Certain
Expenses for Certain Multifamily Communities (the Combined Statement)
described in note 1 for the year ended December 31, 1995. This Combined
Statement is the responsibility of management. Our responsibility is to
express an opinion on the Combined 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 Combined Statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Combined 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 Combined Statement. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying Combined Statement was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission and for inclusion in Form 8-K to be filed by Security Capital
Pacific Trust as described in note 2. The presentation is not intended to be a
complete presentation of the Communities' revenues and expenses.
In our opinion, the Combined Statement referred to above presents fairly, in
all material respects, the combined revenues and certain expenses as described
in note 2 for certain multifamily Communities for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
February 7, 1997
5
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR CERTAIN MULTIFAMILY COMMUNITIES (NOTE 1)
YEAR ENDED DECEMBER 31, 1995 AND THE PERIOD
FROM JANUARY 1, 1996 THROUGH THE EARLIER OF SEPTEMBER 30, 1996
OR DATE OF ACQUISITION
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, 1996
THROUGH THE
EARLIER OF
SEPTEMBER 30,
1996 OR DATE OF
ACQUISITION
1995 (UNAUDITED)
------- ---------------
<S> <C> <C>
Revenues:
Rental income......................................... $23,758 17,172
Other real estate income.............................. 536 416
------- ------
24,294 17,588
------- ------
Certain expenses:
Salaries and benefits................................. 1,944 1,312
Utilities............................................. 1,600 1,056
Repairs and maintenance............................... 1,572 1,162
Management fees (note 4).............................. 919 664
Real estate taxes..................................... 2,228 1,573
Advertising and promotion............................. 323 248
Insurance (note 4).................................... 571 412
Interest expense on debt assumed (note 5)............. 3,107 2,153
Other................................................. 521 275
------- ------
12,785 8,855
------- ------
Revenues in excess of certain expenses.............. $11,509 8,733
======= ======
</TABLE>
The accompanying notes are an integral part of the combined statement of
revenues and certain expenses for certain multifamily communities.
6
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR CERTAIN MULTIFAMILY COMMUNITIES
YEAR ENDED DECEMBER 31, 1995 AND THE PERIOD FROM
JANUARY 1, 1996 THROUGH THE EARLIER OF SEPTEMBER 30, 1996
OR DATE OF ACQUISITION
(IN THOUSANDS)
(1) OPERATING PROPERTIES
The Combined Statement of Revenues and Certain Expenses for Certain
Multifamily Communities (the Combined Statement) for the year ended December
31, 1995 and the period from January 1, 1996 through the earlier of September
30, 1996 or date of acquisition, relates to the operations of the following
communities which have been or are expected to be acquired by Security Capital
Pacific Trust (PTR) from unaffiliated parties:
<TABLE>
<CAPTION>
ACQUISITION
MULTIFAMILY COMMUNITY LOCATION DATE PURCHASE PRICE
--------------------- -------- ----------- --------------
<S> <C> <C> <C>
Woodsong................ San Bernardino, California 08-28-96 $ 12,300
El Dorado............... San Diego, California 08-30-96 29,350
Telegraph Hill.......... Albuquerque, New Mexico 10-15-96 8,100
Villa Marseille......... Aliso Viejo, California 11-13-96 13,125
Palisades............... La Jolla, California 11-27-96 31,600
Clubhouse............... Seattle, Washington 12-19-96 8,030
Harborside.............. San Francisco, California 12-31-96 21,385
Newport Crossing........ Seattle, Washington 01-10-97 11,290
Reflections............. San Francisco, California 01-27-97 52,100
Marina Lakes East....... Oakland, California under contract 18,600
--------
$205,880
========
</TABLE>
(2) BASIS OF PRESENTATION
The accompanying Combined Statement for Certain Multifamily Communities has
been prepared on the accrual basis of accounting. The Combined Statement for
Certain Multifamily Communities has been prepared for the purpose of complying
with the rules and regulation of the Securities and Exchange Commission and
for inclusion in Form 8-K to be filed by PTR. The Combined Statement for
Certain Multifamily Communities is not intended to be a complete presentation
of combined revenues and expenses of the communities above for the year ended
December 31, 1995 and the period from January 1, 1996 through the earlier of
September 30, 1996 or date of acquisition.
The Combined Statement for Certain Multifamily Communities excludes certain
amounts which would not be comparable to the proposed future operations of the
communities as follows:
(a) depreciation of the building and improvements;
(b) interest expense related to debt not assumed;
(c) interest income;
(d) income taxes; and
(e) other income and expense items unique to the prior owners.
7
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR CERTAIN MULTIFAMILY COMMUNITIES--(CONTINUED)
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
Rental income from leasing activities consist of lease payments earned from
tenants under lease agreements with terms of one year or less.
Capitalization Policy
Ordinary repairs and maintenance are expensed as incurred; major
replacements and betterments are capitalized.
Advertising and Promotion
The cost of advertising and promotion is expensed as incurred.
Use of Estimates
The preparation of the Combined Statement for Certain Multifamily
Communities in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the Combined Statement for Certain Multifamily Communities and
accompanying notes. Actual results could differ from those estimates.
Unaudited Interim Combined Statement
The Combined Statement for Certain Multifamily Communities for the period
from January 1, 1996 through the earlier of September 30, 1996 or date of
acquisition is unaudited. In the opinion of management, all adjustments,
consisting of normal recurring accruals, necessary for a fair presentation of
the Combined Statement for Certain Multifamily Communities for the interim
period have been included. The results of operations for the interim period
are not necessarily indicative of the results to be expected for the full year
for the communities.
(4) RELATED PARTY TRANSACTIONS
Approximately $640 and $382 (unaudited) was accrued and paid in management
fees to affiliates of prior owners in 1995 and 1996, respectively.
Approximately $236 and $191 (unaudited) was paid in insurance expense to
prior owners in 1995 and 1996, respectively.
(5) DEBT ASSUMPTION
PTR assumed outstanding debt of approximately $5,831 in connection with the
acquisition of Clubhouse. The debt consists of an 8.75% fixed rate mortgage
note which requires monthly principal and interest payments of $51 through
December 31, 1999 when all remaining principal and interest will be due and
payable.
PTR assumed outstanding debt of approximately $16,758 in connection with the
acquisition of El Dorado. The debt consists of a 7.53% fixed rate mortgage
note which requires monthly principal and interest payments of $119 through
October 1, 2002 when all remaining principal and interest will be due and
payable.
8
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR CERTAIN MULTIFAMILY COMMUNITIES--(CONCLUDED)
PTR anticipates assuming outstanding debt of approximately $13,600 in
connection with the acquisition of Marina Lakes East. The debt consists of a
9.125% fixed rate mortgage note which requires monthly interest-only payments
through December 31, 1995. Beginning January 1, 1996, monthly principal and
interest payments of .847% of the unpaid principal balance are required until
August 1, 2000 when all remaining principal and interest will be due and
payable.
9
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma financial statements for Security Capital
Pacific Trust (PTR) reflect the acquisition by PTR of the communities
disclosed in this Form 8-K, Item 5 and those reported in Forms 8-K, Item 5
dated August 1, 1996 and October 14, 1996 (the "1996 Forms 8-K"). The proforma
financial statements have been prepared based upon certain pro forma
adjustments to the historical financial statements of PTR.
The accompanying unaudited pro forma balance sheet as of September 30, 1996
has been prepared as if the operating communities acquired, or under contract
to be acquired, subsequent to September 30, 1996 had been acquired as of the
balance sheet date.
The accompanying unaudited proforma statements of earnings for the year
ended December 31, 1995 and for the nine months ended September 30, 1996 have
been prepared as if (i) the operating community acquisitions, including three
operating communities under contract, reported in this Form 8-K, Item 5 and
(ii) the operating community acquisitions reported in Forms 8-K mentioned
above had occurred as of January 1, 1995.
The unaudited pro forma financial statements do not purport to be indicative
of the results which would actually have been obtained had the transactions
described above been completed on the dates indicated or which may be obtained
in the future. The unaudited pro forma financial statements should be read in
conjunction with the combined statement of revenues and certain expenses for
certain multifamily communities included herein and the financial statements
of PTR.
10
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
ASSETS HISTORICAL ADJUSTMENTS PRO FORMA
------ ---------- ----------- ----------
<S> <C> <C> <C>
Real Estate............................... $2,257,560 $240,105(a) $2,497,665
Less accumulated depreciation............. 102,496 -- 102,496
---------- -------- ----------
2,155,064 240,105 2,395,169
Mortgage notes receivable................. 14,394 -- 14,394
---------- -------- ----------
Total investments..................... 2,169,458 240,105 2,409,563
Cash and cash equivalents--unrestricted... 7,172 -- 7,172
Restricted tax deferred exchange proceeds. 13,503 -- 13,503
Accounts receivable....................... 4,083 -- 4,083
Other assets.............................. 28,783 -- 28,783
---------- -------- ----------
Total assets.......................... $2,222,999 $240,105 $2,463,104
========== ======== ==========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C>
Liabilities:
Line of credit.......................... $ 171,350 $201,985(b) $ 373,335
Long term debt.......................... 450,000 -- 450,000
Mortgages payable....................... 219,460 38,120(c) 257,580
Accounts payable........................ 30,212 -- 30,212
Accrued expenses and other liabilities.. 35,585 -- 35,585
---------- -------- ----------
Total liabilities..................... 906,607 240,105 1,146,712
---------- -------- ----------
Shareholders' Equity:
Series A Preferred shares (8,703,000
convertible shares issued; stated
liquidation preference of $25 per
share)................................. 217,575 -- 217,575
Series B Preferred shares (4,200,000
shares issued; stated liquidation
preference of $25 per share)........... 105,000 105,000
Common shares (72,980,268 shares
issued)................................ 72,980 -- 72,980
Additional paid-in capital.............. 964,500 -- 964,500
Distributions in excess of net earnings. (41,725) -- (41,725)
Treasury shares (164,956 shares)........ (1,938) -- (1,938)
---------- -------- ----------
Total shareholders' equity............ 1,316,392 -- 1,316,392
---------- -------- ----------
Total liabilities and shareholders'
equity............................... $2,222,999 $240,105 $2,463,104
========== ======== ==========
</TABLE>
See accompanying notes to pro forma financial statements.
11
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA STATEMENT OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------
HISTORICAL
-------------------------------
ACQUISITIONS
----------------------
PRIOR CURRENT PRO FORMA PTR
PTR REPORTS (D) REPORT (E) ADJUSTMENTS PRO FORMA
-------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income......... $262,473 $43,434 $25,165 $ -- $331,072
Interest.............. 2,400 -- -- -- 2,400
-------- ------- ------- -------- --------
264,873 43,434 25,165 -- 333,472
-------- ------- ------- -------- --------
Expenses:
Rental expenses....... 73,808 13,818 7,110 -- 94,736
Real estate taxes..... 21,326 2,948 2,303 -- 26,577
Property management
fees paid to
affiliates........... 8,912 1,763 902 (549)(f) 11,028
Depreciation.......... 36,685 -- -- 10,493 (g) 47,178
Interest.............. 19,584 7,688 3,867 26,046 (h) 57,185
REIT management fee
paid to affiliate.... 20,354 -- -- 432 (i) 20,786
General and
administrative....... 952 -- -- -- 952
Provision for possible
loss on investments.. 420 -- -- -- 420
Other................. 1,136 -- -- -- 1,136
-------- ------- ------- -------- --------
183,177 26,217 14,182 36,422 259,998
-------- ------- ------- -------- --------
Earnings from
operations............. 81,696 17,217 10,983 (36,422) 73,474
Gain on sale of
investments............ 2,623 -- -- -- 2,623
-------- ------- ------- -------- --------
Net earnings............ 84,319 17,217 10,983 (36,422) 76,097
Less Preferred share
dividends.............. 21,823 -- -- -- 21,823
-------- ------- ------- -------- --------
Net earnings
attributable to
common shares...... $ 62,496 $17,217 $10,983 $(36,422) $ 54,274
======== ======= ======= ======== ========
Weighted average common
shares outstanding (j). 67,052 67,052
======== ========
Per common shares
amounts:
Net earnings
attributable to
common shares...... $ 0.93 $ 0.81
======== ========
</TABLE>
See accompanying notes to pro forma financial statements.
12
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA STATEMENT OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1996
--------------------------------------------------------
HISTORICAL
------------------------------- PRO FORMA PTR
ACQUISITIONS ADJUSTMENTS PRO FORMA
---------------------- ----------- ---------
PRIOR CURRENT
PTR REPORTS (D) REPORT (E)
-------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income......... $240,102 $23,882 $19,548 $ -- $283,532
Interest.............. 1,589 -- -- -- 1,589
-------- ------- ------- -------- --------
241,691 23,882 19,548 -- 285,121
-------- ------- ------- -------- --------
Expenses:
Rental expenses....... 67,804 7,484 4,858 -- 80,146
Real estate taxes..... 19,953 1,523 1,725 -- 23,201
Property management
fees paid to
affiliates........... 8,788 1,093 706 (457)(f) 10,130
Depreciation.......... 32,230 -- -- 6,718 (g) 38,948
Interest.............. 22,401 4,972 2,689 16,035 (h) 46,097
REIT management fee
paid to affiliate.... 17,145 -- -- 448 (i) 17,593
General and
administrative....... 770 -- -- -- 770
Other................. 501 -- -- -- 501
-------- ------- ------- -------- --------
169,592 15,072 9,978 22,744 217,386
-------- ------- ------- -------- --------
Earnings from
operations............. 72,099 8,810 9,570 (22,744) 67,735
Gain on sale of
investments............ 33,340 -- -- -- 33,340
-------- ------- ------- -------- --------
Net earnings before
extraordinary item..... 105,439 8,810 9,570 (22,744) 101,075
Less extraordinary item-
loss on early
extinguishment of debt. 870 -- -- -- 870
-------- ------- ------- -------- --------
Net earnings............ 104,569 8,810 9,570 (22,744) 100,205
Less Preferred share
dividends.............. 18,956 -- -- -- 18,956
-------- ------- ------- -------- --------
Net earnings
attributable to
common shares...... $ 85,613 $ 8,810 $ 9,570 $(22,744) $ 81,249
======== ======= ======= ======== ========
Weighted average common
shares outstanding (j). 72,355 72,355
======== ========
Per common shares
amounts:
Net earnings
attributable to
common shares...... $ 1.18 $ 1.12
======== ========
</TABLE>
See accompanying notes to pro forma financial statements.
13
<PAGE>
(a) Represents PTR's multifamily community acquisitions and three multifamily
communities under contract to be acquired subsequent to September 30,
1996, as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
COMMUNITY DATE COST
--------- -------------- -----------
<S> <C> <C>
Previously Reported:
Summer Tree..................................... 10/29/96 $ 10,000
Fox Creek....................................... 12/17/96 7,900
--------
Total Previously Reported..................... 17,900
--------
Not Previously Reported:
Telegraph Hill.................................. 10/15/96 8,100
Villa Marseilles................................ 11/13/96 13,125
The Palisades................................... 11/27/96 31,600
Clubhouse....................................... 12/19/96 8,030
Harborside...................................... 12/31/96 21,385
Newport Crossing................................ 01/10/97 11,290
Reflections..................................... 01/27/97 52,100
Marina Lakes East............................... under contract 18,600
Marina Lakes West............................... under contract 20,900
Folsom Ranch.................................... under contract 23,150
River Meadows................................... under contract 13,925
--------
Total Not Previously Reported................. 222,205
--------
$240,105
========
</TABLE>
(b) Reflects the use of line of credit borrowings of $201,985 to fund the pro
forma acquisition of communities subsequent to September 30, 1996.
(c) PTR assumed, or anticipates assuming approximately $38,120 in mortgage
notes payable upon the purchase of Summer Tree, Fox Creek, River Meadows,
Marina Lakes East and Club House apartments.
(d) Reflects historical revenues and certain expenses, including mortgage
interest if applicable, on communities previously reported by PTR on the
1996 Forms 8-K for the year ended December 31, 1995 or for the period from
January 1, 1996 to the earlier of the respective dates of acquisition or
September 30, 1996. Historical revenues and certain expenses exclude
amounts which would not be comparable to the proposed future operations of
the communities such as certain interest expense, interest income, income
taxes and depreciation. The following table reconciles the historical
financial information for the communities previously reported (as defined
below) to the pro forma statements of earnings:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------
PROPERTY
RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST
INCOME EXPENSE TAXES FEES EXPENSE
------- ------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Group A Communities (i)... $32,151 10,405 $2,065 $1,291 $6,415
Group B Communities (ii).. 5,820 1,228 462 250 1,273
Group C Communities (iii). 5,463 2,185 421 222 --
------- ------- ------ ------ ------
Total communities
previously reported.... $43,434 $13,818 $2,948 $1,763 $7,688
======= ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD JANUARY 1, 1996 TO THE EARLIER
OF
THE DATE OF ACQUISITION OR SEPTEMBER 30, 1996
-----------------------------------------------
PROPERTY
RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST
INCOME EXPENSE TAXES FEES EXPENSE
------- ------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Group A Communities (i)... $18,676 $5,664 $1,112 $ 875 $4,127
Group B Communities (ii).. 3,285 1,019 256 143 845
Group C Communities (iii). 1,921 801 155 75 --
------- ------ ------ ------ ------
Total communities
previously reported.... $23,882 $7,484 $1,523 $1,093 $4,972
======= ====== ====== ====== ======
</TABLE>
14
<PAGE>
(i) Group A Communities consist of the following communities which were
previously reported in the 1996 Forms 8-K, and for which audited combined
statements of revenues and certain expenses for the year ended December 31,
1995 were previously provided therein:
<TABLE>
<CAPTION>
COMMUNITY LOCATION DATE ACQUIRED
--------- -------- -------------
<S> <C> <C>
Ocean Crest........................ San Diego, California 3/29/96
Timberline......................... Portland, Oregon 4/17/96
Club Pacifica...................... San Diego, California 4/23/96
The Crossing....................... Corona, California 5/21/96
Mission Springs.................... Ontario, California 5/31/96
Newpointe.......................... Orange County, California 7/10/96
Brighton........................... Portland, Oregon 8/16/96
Oakwood............................ San Jose, California 9/16/96
Redwood............................ San Francisco, California 9/20/96
Summer Tree........................ Salt Lake City, Utah 10/29/96
Fox Creek.......................... Layton, Utah 12/17/96
</TABLE>
(ii) Group B Communities consist of the following communities (two
communities were previously reported but unaudited in the 1996 Forms 8-K)
for which an audited combined statement of revenues and certain expenses
for the year ended December 31, 1995 is presented in this Form 8-K:
<TABLE>
<CAPTION>
COMMUNITY LOCATION DATE ACQUIRED
--------- -------- --------------
<S> <C> <C>
Previously Reported:
El Dorado............... San Diego, California 8/30/96
Woodsong Village........ San Bernardino, California 8/28/96
Not Previously Reported:
Telegraph Hill.......... Albuquerque, New Mexico 10/15/96
Villa Marseilles........ Aliso Viejo (Orange County), California 11/13/96
Palisades............... La Jolla (San Diego County), California 11/27/96
Clubhouse............... Seattle, Washington 12/19/96
Harborside.............. San Francisco, California 12/31/96
Newport Crossing........ Seattle, Washington 1/10/97
Reflections............. San Francisco, California 1/27/97
Marina Lakes East....... Oakland, California under contract
</TABLE>
(iii) Group C Communities consist of the following unaudited communities
which have been previously reported in the 1996 Forms 8-K filed by PTR:
<TABLE>
<CAPTION>
COMMUNITY LOCATION DATE ACQUIRED
--------- -------- -------------
<S> <C> <C>
Quail Ridge....................... San Francisco, California 6/13/96
Westcourt Village................. San Bernardino, California 3/27/96
</TABLE>
15
<PAGE>
(e) Reflects historical revenues and certain expenses, including mortgage
interest if applicable, on communities reported in this Form 8-K Item 5,
for the year ended December 31, 1995 or for the period from January 1, 1996
to the earlier of the respective date of acquisition or September 30, 1996.
Historical revenues and certain expenses exclude amounts which would not be
comparable to the proposed future operations of the communities such as
certain interest expense, interest income, income taxes and depreciation.
The following table reconciles the historical financial information for the
Group B Properties to the pro forma statements of earnings:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------
PROPERTY
RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST
INCOME EXPENSE TAXES FEES EXPENSE
------- ------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Total Group B Communities. $24,294 $ 6,531 $2,228 $ 919 $ 3,107
Less:
Group B Communities,
previously reported.... (5,820) (1,228) (462) (250) (1,273)
------- ------- ------ ----- -------
Group B Communities, not
previously reported.... 18,474 5,303 1,766 669 1,834
Group D Communities (i). 6,691 1,807 537 233 2,033
------- ------- ------ ----- -------
Total communities, not
previously reported.. $25,165 $ 7,110 $2,303 $ 902 $ 3,867
======= ======= ====== ===== =======
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD JANUARY 1, 1996 TO THE EARLIER OF
THE DATE OF ACQUISITION OR SEPTEMBER 30, 1996
--------------------------------------------------
PROPERTY
RENTAL RENTAL REAL ESTATE MANAGEMENT INTEREST
INCOME EXPENSE TAXES FEES EXPENSE
-------- ------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Total Group B
Communities............ $ 17,588 $ 4,465 $ 1,573 $ 664 $2,153
Less:
Group B Communities,
previously reported.. (3,285) (1,019) (256) (143) (845)
-------- ------- ------- ----- ------
Group B Communities,
not previously
reported............. 14,303 3,446 1,317 521 1,308
Group D Communities
(i).................. 5,245 1,412 408 185 1,381
-------- ------- ------- ----- ------
Total communities,
not previously
reported........... $ 19,548 $ 4,858 $ 1,725 $ 706 $2,689
======== ======= ======= ===== ======
</TABLE>
(i) Group D consists of the following unaudited communities, which have
not been previously reported:
<TABLE>
<CAPTION>
COMMUNITY LOCATION DATE ACQUIRED
--------- -------- --------------
<S> <C> <C>
Marina Lakes West......... Oakland, California under contract
Folsom Ranch.............. Sacramento, California under contract
River Meadows............. Huntington Beach (Orange County),
California under contract
</TABLE>
(f) Reflects the difference between historical property management fee expense
and the fee which would have been charged by PTR's property manager, SCG
Realty Services Incorporated.
16
<PAGE>
(g) Reflects pro forma depreciation expense adjustment resulting from acquired
communities, or communities under contract to be acquired, based on the
depreciable basis of PTR's acquisition cost, assuming asset lives ranging
from 10 to 40 years. The pro forma depreciation expense adjustment amounts
by community are as follows:
<TABLE>
<CAPTION>
TWELVE NINE
COMMUNITY ACQUISITION MONTHS MONTHS
--------- ---------------------- ENDED ENDED
DATE COSTS 12/31/95 9/30/96
-------------- ------- -------- -------
<S> <C> <C> <C> <C>
Previously Reported:
Westcourt Village.................... 3/27/96 $12,762 $ 256 $ 61
Ocean Crest.......................... 3/29/96 15,600 316 77
Timberline .......................... 4/17/96 7,043 140 40
Club Pacifica........................ 4/23/96 14,300 286 88
The Crossing......................... 5/21/96 14,850 297 116
Missions Springs..................... 5/31/96 38,500 771 321
Quail Ridge.......................... 6/13/96 17,550 351 159
Newpointe............................ 7/10/96 9,400 188 99
Brighton............................. 8/16/96 11,150 223 140
El Dorado............................ 8/30/96 29,350 587 391
Woodsong Village..................... 8/28/96 12,300 246 162
Redwood.............................. 9/20/96 37,000 740 535
Oakwood.............................. 9/16/96 64,800 1,296 923
Summer Tree.......................... 10/29/96 10,000 200 150
Fox Creek ........................... 12/17/96 7,900 158 119
------- ------
Total Previously Reported.......... 6,055 3,381
------- ------
Not Previously Reported:
Telegraph Hill....................... 10/15/96 $ 8,100 $ 160 $ 122
Villa Marseilles..................... 11/13/96 13,125 262 197
Palisades............................ 11/27/96 31,600 631 474
Club House........................... 12/19/96 8,030 161 121
Harborside........................... 12/31/96 21,385 427 321
Newport Crossing..................... 1/10/97 11,290 225 171
Reflections.......................... 1/27/97 52,100 1,042 782
Marina Lakes East.................... under contract 18,600 371 279
Marina Lakes West.................... under contract 20,900 419 314
Folsom Ranch......................... under contract 23,150 462 347
River Meadows........................ under contract 13,925 278 209
------- ------
Total Not Previously Reported...... 4,438 3,337
------- ------
Grand Total...................... $10,493 $6,718
======= ======
</TABLE>
(h) Represents the pro forma interest expense adjustments related to
utilization of line of credit borrowings that would have been required if
the community acquisitions had occurred at January 1, 1995:
<TABLE>
<CAPTION>
TWELVE NINE
MONTHS MONTHS
ENDED ENDED
12/31/95 9/30/96
-------- --------
<S> <C> <C>
Pro forma line of credit borrowings for operating
communities acquired or under contract to be acquired,
subsequent to September 30, 1996....................... $201,985 $201,985
Line of credit borrowings required for 1996 acquisitions
made prior to September 30, 1996....................... 194,902 123,815
-------- --------
Total pro forma line of credit borrowings............... 396,887 325,800
Current interest rate................................... 6.5625% 6.5625%
Proration factor........................................ 1.0 .75
-------- --------
Pro forma interest expense adjustment................... $ 26,046 $ 16,035
======== ========
</TABLE>
17
<PAGE>
(i) Reflects adjustments to PTR's REIT management fee expense related to (i)
the increase in cash flow resulting from acquisition of multifamily
communities discussed in (d) and (e) and (ii) adjustments discussed in (f)
and (h):
<TABLE>
<CAPTION>
TWELVE NINE
MONTHS MONTHS
ENDED ENDED
12/31/95 9/30/96
-------- --------
<S> <C> <C>
Historical earnings from operations from acquisitions:
Previously reported.................................... $ 17,217 $ 8,810
Not Previously reported................................ 10,983 9,570
Pro Forma adjustments:
Property management fees paid to affiliates............ 549 457
Interest expense....................................... (26,046) (16,035)
-------- --------
2,703 2,802
REIT management fee percentage......................... 16% 16%
-------- --------
Pro Forma REIT management fee expense adjustment....... $ 432 $ 448
======== ========
</TABLE>
(j) Primary and fully diluted earnings per share were approximately the same
for both periods as there was no reportable dilution from conversions of
Series A Preferred Shares.
18
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees and Shareholders of
Security Capital Pacific Trust:
We consent to incorporation by reference in registration statements No. 33-
25317 (Form S-8), No. 333-4455 (Form S-4), and No. 333-12885 (Form S-3) of
Security Capital Pacific Trust of our report dated February 7, 1997 relating
to the Combined Statement of Revenues and Certain Expenses for Certain
Multifamily Communities for the year ended December 31, 1995, which report
appears in the current report on Form 8-K of Security Capital Pacific Trust
dated February 20, 1997.
KPMG Peat Marwick LLP
Chicago, Illinois
February 20, 1997
