<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): July 21, 1997
SECURITY CAPITAL PACIFIC TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-10272 74-6056896
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
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)
===============================================================================
<PAGE>
ITEM 5. OTHER EVENTS
Acquisitions and Probable Acquisitions:
The following acquisitions of multifamily communities, including one
community 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 investment in certain western United States markets
present excellent long term opportunities for consistent rental increases, high
occupancies and value appreciation.
PTR acquired Sierra Hills apartments on April 17, 1997 from a corporation.
Sierra Hills is a 300 unit, middle income complex located in San Bernadino,
California. PTR acquired this community through a tax-deferred exchange, using
disposition proceeds of approximately $18.7 million. At the date of purchase,
the community's occupancy rate was 98.0%.
PTR acquired Los Padres apartments on April 23, 1997 from a general
partnership. Los Padres is a 245 unit, middle income complex located in Santa
Clara, California. PTR acquired this community through a tax-deferred exchange,
using disposition proceeds of approximately $30.5 million. At date of purchase,
the community's occupancy rate was 96.3%.
PTR acquired La Jolla Point apartments on April 24, 1997 from a
partnership. La Jolla Point is a 328 unit, middle income complex located in La
Jolla (San Diego County), California. PTR acquired this community for
approximately $30.6 million through a tax-deferred exchange, using disposition
proceeds of approximately $9.0 million and assumed a mortgage note payable in
the amount of $21.6 million. At date of purchase, the community's occupancy rate
was 95.7%.
PTR acquired Cambrian apartments on June 3, 1997 from an agency of the
State of California. Cambrian is a 422 unit, middle income complex located in
Seattle, Washington. PTR acquired this community through a tax-deferred
exchange, using disposition proceeds of approximately $41.1 million. At date of
purchase, the community's occupancy rate was 97.2%.
PTR acquired Pelican Point apartments on June 26, 1997 from a limited
partnership. Pelican Point is a 400 unit moderate income complex located in
Ventura, California. PTR acquired this community for approximately $29.0 million
through a tax-deferred exchange, using disposition proceeds of approximately
$13.0 million and assumed a mortgage note payable in the amount of $16.0
million. At the date of purchase, the community's occupancy rate was 97.8%.
PTR acquired Le Club apartments on June 30, 1997 from a limited
partnership. Le Club is a 370 unit moderate income complex located in
Sacramento, California. PTR acquired this community for approximately $33.0
million through a tax-deferred exchange, using disposition proceeds of
approximately $11.3 million and assumed a mortgage note payable in the amount of
$21.7 million. At the date of purchase, the community's occupancy rate was
94.5%.
PTR has entered into a contract with a limited partnership to purchase
Carrington Place apartments, scheduled to close in July 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.
Carrington Place is a 142 unit moderate income complex located in Salt Lake
City, Utah and on May 19, 1997 was 98.3% occupied. PTR anticipates acquiring
this community for approximately $7.2 million through a tax-deferred exchange,
using disposition proceeds of approximately $3.6 million and assuming a mortgage
note payable in the amount of approximately $3.6 million.
<PAGE>
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 March 31, 1997 (unaudited)
Pro Forma Statement of Earnings for the year ended December 31, 1996
(unaudited)
Pro Forma Statement of Earnings for the three months ended March 31, 1997
(unaudited)
Notes to Pro Forma Financial Statements
(c) Exhibit:
Exhibit 23.1 - Independent Auditors' Consent
<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
Date: July 21, 1997
By: /s/ Bryan Flanagan
----------------------
Bryan Flanagan
Senior Vice President and
Principal Financial Officer
By: /s/ Ash Atwood
-----------------------
Ash Atwood
Vice President and
Principal Accounting Officer
<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, 1996. 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
described in note 2 for certain Multifamily Communities for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Chicago, Illinois
July 3, 1997
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
Combined Statement of Revenues and Certain Expenses
for Certain Multifamily Communities (note 1)
Year ended December 31, 1996 and the Period
from January 1, 1997 through the earlier of March 31, 1997
or Date of Acquisition
(in thousands)
<TABLE>
<CAPTION> Period from
January 1, 1997
through the
earlier of
March 31,
1997 or Date of
Acquisition
1996 (unaudited)
---- ---------------
<S> <C> <C>
Revenues:
Rental revenues $22,968 5,600
Other real estate income 798 183
------- -----
23,766 5,783
------- -----
Certain expenses:
Salaries and benefits 1,540 384
Utilities 1,343 330
Repairs and maintenance 1,609 422
Management fees (note 4) 755 209
Real estate taxes 1,821 371
Advertising and promotion 295 72
Insurance (note 4) 340 84
Interest expense on debt assumed (note 5) 5,368 1,207
Other 762 163
------- -----
13,833 3,242
------- -----
Revenues in excess of certain expenses $ 9,933 2,541
======= =====
</TABLE>
The accompanying notes are an integral part of the combined statement of
revenues and certain expenses for certain multifamily communities.
1
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
Notes to Combined Statement of Revenues and Certain Expenses
for Certain Multifamily Communities
Year ended December 31, 1996 and the Period from
January 1, 1997 through the earlier of March 31, 1997
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, 1996 and the period from January 1, 1997 through the earlier
of March 31, 1997 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>
Multifamily Acquisition
Community Location Date Purchase Price
--------- -------------------- ----------- --------------
<S> <C> <C> <C>
Marina Lakes West Oakland, CA 2-19-97 $ 20,900
River Meadows Huntington Beach, CA 3-20-97 13,925
Folsom Ranch Sacramento, CA 3-31-97 23,150
Sierra Hills San Bernadino, CA 4-17-97 18,700
Los Padres Santa Clara, CA 4-23-97 30,500
La Jolla Point La Jolla, CA 4-24-97 30,600
Pelican Point Ventura, CA 6-26-97 29,000
Le Club Sacramento, CA 6-30-97 33,000
Carrington Place Salt Lake City, UT under contract 7,200
--------
$206,975
========
</TABLE>
(2) Basis of Presentation
The accompanying Combined Statement has been prepared on the accrual
basis of accounting. The Combined Statement 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 is not intended to be a complete presentation of
combined revenues and expenses of the communities above for the year
ended December 31, 1996 and the period from January 1, 1997 through the
earlier of March 31, 1997 or date of acquisition.
(Continued)
2
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
Notes to Combined Statement of Revenues and Certain Expenses
for Certain Multifamily Communities
(2) Basis of Presentation, Continued
The Combined Statement 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.
(3) Summary of Significant Accounting Policies
Revenue Recognition
Rental income from leasing activities consist of lease payments earned
from tenants under lease agreements.
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 in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the Combined Statement
and accompanying notes. Actual results could differ from those
estimates.
Unaudited Interim Combined Statement
The Combined Statement for the period from January 1, 1997 through the
earlier of March 31, 1997 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
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.
(Continued)
3
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
Notes to Combined Statement of Revenues and Certain Expenses
for Certain Multifamily Communities
(4) Related Party Transactions
Approximately $99 and $18 (unaudited) was accrued and paid in management
fees to affiliates of prior owners in 1996 and 1997, respectively.
Approximately $44 and $11 (unaudited) was paid in insurance expense to
prior owners in 1996 and 1997, respectively.
(5) Debt Assumption
PTR assumed outstanding debt of approximately $21.6 million in connection
with the acquisition of La Jolla Point. The debt consists of a
tax-exempt variable rate mortgage note (4.35% nominal rate at April 24,
1997) which requires quarterly principal and interest payments of $484
through August 1, 2014 when all remaining principal and interest will be
due and payable.
PTR assumed outstanding debt of approximately $21.7 million in connection
with the acquisition of Le Club. The debt consists of a tax-exempt
variable rate bond (4.05% nominal rate at June 30, 1997) which requires
quarterly principal and interest payments through November 1, 2015 when
all remaining principal and interest will be due and payable.
PTR assumed outstanding debt of approximately $16.0 million in connection
with the acquisition of Pelican Point. The debt consists of a 7.0%
nominal fixed rate tax-exempt mortgage note which requires monthly
principal and interest payments of $114 until December 1, 1997 when all
remaining principal and interest will be due and payable.
PTR anticipates assuming outstanding debt of approximately $3.6 million
in connection with the acquisition of Carrington Place. The debt consists
of a 7.83% fixed rate tax-exempt mortgage note which requires monthly
principal and interest payments of $28 until April 1, 2019 when all
remaining principal and interest will be due and payable.
4
<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 or expected 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, October 14, 1996, and February 20, 1997 (the
"Previously Reported Acquisitions"). The pro forma 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 March 31, 1997 has
been prepared as if the operating communities acquired, or under contract to be
acquired, subsequent to March 31, 1997 had been acquired as of the balance sheet
date.
The accompanying unaudited pro forma statements of earnings for the year
ended December 31, 1996 and for the three months ended March 31, 1997 have been
prepared as if (i) the operating community acquisitions, including one
operating community under contract, reported in this Form 8-K, Item 5 and (ii)
the Previously Reported Acquisitions had occurred as of January 1, 1996.
The acquisitions, including one community under contract, reported in this
Form 8-K, Item 5 were structured as tax-deferred exchanges and therefore the
effects of the community dispositions which funded (or are expected to fund)
these acquisitions have also been reflected in the accompanying unaudited pro
forma balance sheet as of March 31, 1997 and the unaudited pro forma statements
of earnings as if the dispositions had occurred as of January 1, 1996.
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.
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA BALANCE SHEET
March 31, 1997
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
ASSETS
------
<S> <C> <C> <C>
Real estate $ 2,233,866 $ 190,125 (a) $ 2,335,325
(88,666)(b)
Less accumulated depreciation 100,041 (7,111)(b) 92,930
------------ ------------ -----------
2,133,825 108,570 2,242,395
Homestead Notes 191,829 191,829
Other mortgage notes receivable 13,537 - 13,537
------------ ------------ -----------
Net investments 2,339,191 108,570 2,447,761
Cash and cash equivalents 7,941 - 7,941
Accounts receivable and accrued interest 8,487 - 8,487
Restricted cash in tax-deferred exchange escrow 59,000 (127,275)(a) 21,793
90,068 (b)
Other assets 27,358 - 27,358
------------- ------------ -----------
Total assets $ 2,441,977 $ 71,363 $ 2,513,340
============ ============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Credit facilities $ 193,865 $ - $ 193,865
Long-term debt 630,000 - 630,000
Mortgages payable 230,578 62,850 (a) 287,964
(5,464)(b)
Accounts payable 25,368 - 25,368
Accrued expenses and other liabilities 55,207 - 55,207
------------ ------------ -----------
Total liabilities 1,135,018 57,386 1,192,404
------------ ------------ -----------
Shareholders' Equity:
Series A Preferred Shares (6,080,019 convertible shares;
stated liquidation preference of $25 per share) 152,000 - 152,000
Series B Preferred Shares (4,200,000 shares issued;
stated liquidation preference of $25 per share) 105,000 105,000
Common shares (76,075,971 shares issued) 76,076 - 76,076
Additional paid-in capital 928,330 - 928,330
Unrealized holding gain on Homestead Notes 73,886 73,886
Distributions in excess of net earnings (28,333) 13,977 (b) (14,356)
------------ ------------ -----------
Total shareholders' equity 1,306,959 13,977 1,320,936
------------ ------------ -----------
Total liabilities and shareholders' equity $ 2,441,977 $ 71,363 $ 2,513,340
============ ============ ===========
</TABLE>
See accompanying notes to pro forma financial statements.
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
PRO FORMA STATEMENT OF EARNINGS
(In thousands, except per share data)
(Unaudited)
[CAPTION]
<TABLE>
Year ended December 31, 1996
--------------------------------------------------------------------------------------
Historical
-------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Acquisitions
------------------------
Previously Current Pro Forma PTR
Revenues: PTR Reported (c) Report (d) Dispositions (e) Adjustments Pro Forma
---------- ---------- ----------- --------------- ----------- ------------
Rental revenues $ 322,046 $ 49,495 $ 21,252 $ (27,328) - $ 365,465
Interest income on Homestead Notes 2,035 - - - - 2,035
Other interest income 2,165 - - - - 2,165
---------- ---------- ----------- -------------- -------------- ------------
326,246 49,495 21,252 (27,328) - 369,665
---------- ---------- ----------- -------------- -------------- ------------
Expenses:
Rental expenses 116,512 17,642 6,663 (10,610) - 130,207
Property management fees paid
to affiliates 11,610 2,020 689 (997) (510)(f) 12,812
Depreciation 44,887 - - (3,419) 11,551 (g) 53,019
Interest expense 35,288 8,650 3,524 (1,653) 17,529 (h) 63,338
REIT management fee paid to affiliate 22,191 - - - 76 (i) 22,267
General and administrative 1,077 - - - - 1,077
Other 592 - - - - 592
---------- ---------- ----------- -------------- -------------- ------------
Total expenses 232,157 28,312 10,876 (16,679) 28,646 283,312
---------- ---------- ----------- -------------- -------------- ------------
Earnings from operations 94,089 $ 21,183 10,376 (10,649) (28,646) 86,353
Less Preferred Share dividends 24,167 - - - - 24,167
---------- ---------- ----------- -------------- -------------- ------------
Earnings from operations attributable to
Common Shares $ 69,922 $ 21,183 $ 10,376 $ (10,649) $ (28,646) $ 62,186
========== ========== =========== ============== ============== ============
Weighted-average Common Shares outstanding 73,057 73,057
---------- ------------
Per Common Shares amounts:
Earnings from operations attributable to
Common Shares per Common Share $ 0.96 $ 0.85
---------- ------------
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>
PRO FORMA STATEMENT OF EARNINGS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31, 1997
-------------------------------------------------------------------------------
Historical
----------------------------------------------------
Acquisitions
----------------------
Previously Current Pro Forma PTR
Revenues: PTR Reported (c) Report(d) Dispositions(e) Adjustments Pro Forma
------- ------------ --------- --------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Rental revenues $79,950 $ 2,150 $ 5,480 $ (6,850) $- $80,730
Interest income on Homestead Notes 3,174 - - - - 3,174
Other interest income 370 - - - - 370
------- ------- ------- ---------- -------- -------
83,494 2,150 5,480 (6,850) - 84,274
------- ------- ------- ---------- -------- -------
Expenses:
Rental expenses 27,625 739 1,668 (2,626) - 27,406
Property management fees:
Paid to affiliate 2,690 75 205 (252) (43)(f) 2,675
Paid to third parties 260 260
Depreciation 12,049 - - (715) 1,304 (g) 12,638
Interest expense 13,961 471 911 (213) (252)(h) 14,878
REIT management fee paid to affiliate 4,617 - - - 15 (i) 4,632
General and administrative 272 - - - - 272
Other 1,744 - - - - 1,744
------- ------- ------- ---------- --------- -------
63,218 1,285 2,784 (3,806) 1,024 64,505
------- ------- ------- ---------- --------- -------
Earnings from operations 20,276 865 2,696 (3,044) (1,024) 19,769
Less Preferred Share dividends 5,035 - - - - 5,035
------- ------- ------- ---------- --------- -------
Earnings from operations attributable to Common
Shares $15,241 $ 865 $ 2,696 $ (3,044) $ (1,024) $14,734
------- ======= ======= ========== ========= -------
Weighted average Common Shares outstanding 75,872 75,872
======= =======
Per Common Shares amounts:
Earnings from operations attributable to Common
Shares per Common Share $ 0.20 $ 0.19
======= =======
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>
(a) Represents PTR's multifamily community acquisitions and one multifamily
community under contract to be acquired subsequent to March 31, 1997, as
follows:
<TABLE>
<CAPTION>
Acquisition Acquisition
Community Date Cost
--------- ----------- -----------
<S> <C> <C>
Sierra Hills 04/17/97 $ 18,700
Los Padres 04/23/97 30,500
La Jolla Point 04/24/97 30,600
Cambrian 06/03/97 41,125
Pelican Point 06/26/97 29,000
Le Club 06/30/97 33,000
Carrington Place under contract 7,200
--------
Total $190,125
========
</TABLE>
PTR assumed, or anticipates assuming approximately $62,850 in mortgage
notes payable upon the purchase of La Jolla Point, Le Club, Pelican Point
and Carrington Place apartments. The $127,275 balance was or is expected to
be financed using proceeds from community dispositions held in a tax-
deferred exchange escrow account.
(b) The following table summarizes the pro forma balance sheet adjustments
relating to the post March 31, 1997 dispositions. The disposition proceeds
were or are expected to be used in part to fund community acquisitions
described in (a) above:
<TABLE>
<CAPTION>
<S> <C>
Net sales proceeds............................................... $95,532
Net book value ($88,666 Cost - $7,111 Accumulated Depreciation).. 81,555
-------
Gain............................................................. $13,977
=======
Mortgage note prepaid upon disposition of one community.......... $5,464
Restricted cash in tax-deferred exchange escrow.................. $90,068
($95,532 Net sales proceeds - $5,464 prepayment of mortgage note)
</TABLE>
(c) Reflects historical revenues and certain expenses, including mortgage
interest if applicable, on the Previously Reported Acquisitions from the
beginning of the period to the earlier of the respective dates of
acquisition or the end of the respective period indicated. 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 Period January 1, 1996 To The Earlier Of The
Date Of Acquisition Or December 31, 1996
----------------------------------------------------
Property
Rental Rental Management Interest
Income Expense Fees Expense
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Group A Communities (i)............... $40,567 $14,256 $1,699 $6,806
Group B Communities (ii).............. 7,007 2,430 246 1,844
Group C Communities (iii)............. 1,921 956 75 -
------- ------- ------ ------
Total............................... $49,495 $17,642 $2,020 $8,650
======= ======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
For The Period January 1, 1997 To The Earlier Of
The Date Of Acquisition Or March 31, 1997
------------------------------------------------
Property
Rental Rental Management Interest
Income Expense Fees Expense
-------- -------- ---------- --------
<S> <C> <C> <C> <C>
Group A Communities (i)................. $ 742 $ 246 $ 27 $ 175
Group B Communities (ii)................ 1,408 493 48 296
Group C Communities (iii)............... - - - -
------- ------ ------ ------
Total................................. $ 2,150 $ 739 $ 75 $ 471
======= ====== ====== ======
</TABLE>
<PAGE>
(i) Group A Communities consist of the following communities which were
previously reported and for which an audited combined statement of revenues
and certain expenses was previously provided:
<TABLE>
<CAPTION>
Community Location Date Acquired
------------------------------- --------------------------------- -------------
<S> <C> <C>
Ocean Crest San Diego, California 03/29/96
Timberline Portland, Oregon 04/17/96
Club Pacifica San Diego, California 04/23/96
The Crossing Corona, California 05/21/96
Mission Springs Ontario, California 05/31/96
Newpointe Orange County, California 07/10/96
Brighton Portland, Oregon 08/16/96
Woodsong Village San Bernardino County, California 08/28/96
El Dorado San Diego, California 08/30/96
Ashton Place (formerly Oakwood) San Jose, California 09/16/96
Redwood San Francisco, California 09/20/96
Telegraph Hill Albuquerque, New Mexico 10/10/96
Summertree Salt Lake City, Utah 10/29/96
Villa Marseilles Aliso Viejo, California 11/12/96
Palisades La Jolla, California 11/27/96
Fox Creek Layton, Utah 12/17/96
Clubhouse Seattle, Washington 12/19/96
Harborside San Francisco, California 12/31/96
Newport Crossing Seattle, Washington 01/10/97
Reflections San Francisco, California 01/27/97
Marina Lakes East Oakland, California 02/19/97
</TABLE>
(ii) Group B Communities consist of the following communities (three
communities were previously reported but unaudited) for which an audited
combined statements of revenues and certain expenses for the year ended
December 31, 1996 is presented in this Form 8-K:
<TABLE>
<CAPTION>
Community Location Date Acquired
------------------------ --------------------------------------- --------------
<S> <C> <C>
Previously Reported:
Marina Lakes West Oakland, California 02/19/97
River Meadows Huntington Beach, California 03/20/97
Folsom Ranch Sacramento, California 03/31/97
Not Previously Reported:
Sierra Hills San Bernadino, California 04/17/97
Los Padres Santa Clara, California 04/23/97
La Jolla Point La Jolla (San Diego County), California 04/24/97
Pelican Point Ventura, California 06/26/97
Le Club Sacramento, California 06/30/97
Carrington Place Salt Lake City, Utah under contract
</TABLE>
(iii) Group C Communities consist of the following unaudited communities
that were previously reported by PTR:
<TABLE>
<CAPTION>
Community Location Date Acquired
----------------- -------------------------- -------------
<S> <C> <C>
Westcourt Village San Bernardino, California 03/27/96
Quail Ridge San Francisco, California 06/13/96
</TABLE>
<PAGE>
(d) 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, 1996 or for the period from January 1, 1997
to the earlier of the respective dates of acquisition or March 31, 1997.
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 Communities to the pro forma statements of earnings:
<TABLE>
<CAPTION>
For The Period January 1, 1996 To The Earlier Of The
----------------------------------------------------
Date Of Acquisition Or December 31, 1996
----------------------------------------
Property
Rental Rental Management Interest
Income Expense Fees Expense
------ ------- ---------- --------
<S> <C> <C> <C> <C>
Total Group B Communities..................................... $23,766 $ 7,710 $ 755 $ 5,368
Less:
Group B Communities, previously reported.................. (7,007) (2,430) (246) (1,844)
------ ------ ----- ------
Group B Communities, not previously reported.................. 16,759 5,280 509 3,524
Group D Community (iv)........................................ 4,493 1,383 180 -
------ ------ ----- -------
Total communities, not previously reported.................... $21,252 $ 6,663 $ 689 $ 3,524
====== ====== ===== =======
For The Period January 1, 1997 To The Earlier Of The
Date Of Acquisition Or March 31, 1997 Property
----------------------------------------------
Property
Rental Rental Management Interest
Income Expense Fees Expense
------ ------- ---------- --------
Total Group B Communities..................................... $ 5,783 $ 1,826 $ 209 $ 1,207
Less:
Group B Communities, previously reported.................. (1,408) (493) (48) (296)
------ ------ ----- ------
Group B Communities, not previously reported.................. 4,375 1,333 161 911
Group D Community (iv)........................................ 1,105 335 44 -
------ ------ ----- ------
Total communities, not previously reported.................... $ 5,480 $ 1,668 $ 205 $ 911
====== ====== ===== =======
</TABLE>
(iv) Group D Community consists of the following unaudited community, which
has not been previously reported:
Community Location Date Acquired
------------ ----------------------- ----------------
Cambrian Seattle, Washington 6/03/97
(e) The acquisitions reflected in (a) above were structured as tax-deferred
exchanges relating to the disposition of multifamily communities. This
column reflects the elimination of the historical revenues and expenses for
the period indicated related to the multifamily community dispositions
which funded (or are expected to fund) these acquisitions.
(f) Reflects the difference between historical property management fee
expense and the fee that would have been charged by PTR's property manager,
SCG Realty Services Incorporated.
<PAGE>
(g) Reflects pro forma depreciation expense adjustment from the beginning of
the period to the earlier of the respective dates of acquisition or the end
of the respective period indicated, 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 Three
Community Acquisition Months Months
--------- ------------------- Ended Ended
Date Costs 12/31/96 3/31/97
---- ----- -------- -------
<S> <C> <C> <C> <C>
Previously Reported:
Westcourt Village....................... 03/27/96 12,762 61 -
Ocean Crest............................. 03/29/96 15,600 77 -
Timberline.............................. 04/17/96 7,043 40 -
Club Pacifica........................... 04/23/96 14,300 88 -
The Crossing............................ 05/21/96 14,850 116 -
Mission Springs......................... 05/31/96 38,500 321 -
Quail Ridge............................. 06/13/96 17,550 159 -
Newpointe............................... 07/10/96 9,400 99 -
Brighton................................ 08/16/96 11,150 140 -
Woodsong Village........................ 08/28/96 12,300 162 -
El Dorado............................... 08/30/96 29,350 391 -
Ashton Place (formerly Oakwood)......... 09/16/96 64,800 923 -
Redwood ................................ 09/20/96 37,000 535 -
Telegraph Hill.......................... 10/10/96 8,100 126 -
Summertree.............................. 10/29/96 10,000 166 -
Villa Marseilles........................ 11/12/96 13,125 239 -
Palisades............................... 11/27/96 31,600 575 -
Fox Creek............................... 12/17/96 7,900 153 -
Clubhouse............................... 12/19/96 8,030 156 -
Harborside.............................. 12/31/96 21,385 427 -
Newport Crossing........................ 01/10/97 11,290 226 6
Reflections............................. 01/27/97 52,100 1,042 77
Marina Lakes East....................... 02/19/97 18,600 371 51
Marina Lakes West....................... 02/19/97 20,900 419 57
River Meadows........................... 03/20/97 13,925 278 60
Folsom Ranch............................ 03/31/97 23,150 462 114
------- ------
Total Previously Reported............. 7,752 365
------- ------
Not Previously Reported:
Sierra Hills............................ 04/17/97 18,700 $ 373 $ 92
Los Padres.............................. 04/23/97 30,500 609 150
La Jolla Point.......................... 04/24/97 30,600 611 151
Cambrian................................ 06/03/97 41,125 822 203
Pelican Point........................... 06/26/97 29,000 583 144
Le Club................................. 06/30/97 33,000 659 163
Carrington Place........................ under contract 7,200 142 36
------- ------
Total Not Previously Reported......... 3,799 939
------- ------
Grand Total....................... $11,551 $1,304
======= ======
</TABLE>
<PAGE>
(h) Represents the pro forma interest expense adjustments related to
utilization of line of credit borrowings that would have been required if
the community acquisitions had occurred at January 1, 1996, net of the
proforma reduction in line of credit borrowings associated with excess
proceeds from dispositions:
<TABLE>
<CAPTION>
Twelve Three
Months Months
Ended Ended
12/31/96 3/31/97
-------- -------
<S> <C> <C>
Pro forma line of credit borrowings required for
operating communities acquired or under
contract to be acquired, subsequent to the
end of the respective period.....................$ 116,365 $ -
Weighted average line of credit borrowings
required for acquisitions made prior to
the end of the respective period (net of
mortgages assumed................................ 170,046 14,231
Less: Pro forma reduction in line of credit
borrowings associated with weighted average
excess disposition proceeds...................... (29,110) (29,110)
--------- --------
Net pro forma line of credit borrowings............. 257,301 (14,879)
Current interest rate............................... 6.8125% 6.7826%
Proration factor.................................... 1.0 .25
--------- --------
Pro forma interest expense adjustment...............$ 17,529 $ (252)
========= ========
</TABLE>
(i) Reflects adjustments to PTR's REIT management fee expense related to (i)
the pro forma increase in cash flow resulting from acquisitions and
dispositions of multifamily communities discussed in (c), (d) and (e) and
(ii) adjustments discussed in (f) and (h):
<TABLE>
<CAPTION>
Twelve Three
Months Months
Ended Ended
12/31/96 3/31/97
-------- -------
<S> <C> <C>
Historical earnings from operations from acquisitions
and dispositions:
Previously reported........................................$ 21,183 $ 865
Not Previously reported................................... 10,376 2,696
Dispositions, excluding depreciation expense.............. (14,068) (3,759)
Pro Forma adjustments:
Property management fees paid to affiliates............... 510 43
Interest expense.......................................... (17,529) 252
-------- -------
472 97
REIT management fee percentage............................ 16% 16%
-------- -------
Pro Forma REIT management fee expense adjustment..........$ 76 $ 15
======== =======
</TABLE>
<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), No. 333-12885 (Form S-3), and No. 333-24035
(Form S-3) of Security Capital Pacific Trust of our report dated July 3, 1997
relating to the Combined Statement of Revenues and Certain Expenses for Certain
Multifamily Communities for the year ended December 31, 1996, which report
appears in the current report on Form 8-K of Security Capital Pacific Trust
dated July 21, 1997.
KPMG PEAT MARWICK LLP
Chicago, Illinois
July 21, 1997
