<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): November 4, 1996
CarrAmerica Realty Corporation
(formerly Carr Realty Corporation)
(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 624-7500
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FORM 8-K
ITEM 1. Changes in Control of Registrant
Not applicable
ITEM 2. Acquisition or Disposition of Assets.
Not applicable.
ITEM 3. Bankruptcy or Receivership.
Not applicable.
ITEM 4. Changes in Registrant's Certifying Accountant.
Not applicable.
ITEM 5. Other Events.
a. Historical Financial Statements
Attached hereto as Exhibit 99.1 are historical summaries of operating
revenue and expenses for the nine months ended September 30, 1996 (unaudited)
and for the year ended December 31, 1995, with accompanying notes and
Independent Auditors' Report for the following properties: Search Plaza and
Quorum North; Rio Robles Technology Center; and South Coast Executive Centre. In
accordance with Rule 3-14 of Regulation S-X, financial statements with respect
to the listed properties are being filed because the Company has either (a)
already acquired the properties and the book value of the properties,
individually by project or in the aggregate, are significant, or (b) deemed the
acquisition to be probable and the book value of the properties, individually by
project or in the aggregate, are significant.
ITEM 6. Resignations of Registrant's Directors.
Not applicable.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements.
Attached hereto as Exhibit 99.1 are the following financial statements:
(i) Historical summaries of Operating Revenue and Expenses for Search
Plaza and Quorum North for the nine months ended September 30, 1996
(unaudited) and for the year ended December 31, 1995, with accompanying
notes and Independent Auditors' Report;
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(ii) Historical summaries of Operating Revenue and Expenses for Rio
Robles Technology Center for the nine months ended September 30, 1996
(unaudited) and for the year ended December 31, 1995, with accompanying
notes and Independent Auditors' Report; and
(iii) Historical summaries of Operating Revenue and Expenses for South
Coast Executive Centre for the nine months ended September 30, 1996
(unaudited) and for the year ended December 31, 1995, with accompanying
notes and Independent Auditors' Report.
(b) Pro forma financial information.
None.
(c) Exhibits
Exhibit
Number
------
99.1 Financial Statements
(i) Historical summaries of Operating Revenue and Expenses for
Search Plaza and Quorum North for the nine months ended
September 30, 1996 (unaudited) and for the year ended December
31, 1995, with accompanying notes and Independent Auditors'
Report;
(ii) Historical summaries of Operating Revenue and Expenses
for Rio Robles Technology Center for the nine months ended
September 30, 1996 (unaudited) and for the year ended December
31, 1995, with accompanying notes and Independent Auditors'
Report; and
(iii) Historical summaries of Operating Revenue and Expenses
for South Coast Executive Centre for the nine months ended
September 30, 1996 (unaudited) and for the year ended December
31, 1995, with accompanying notes and Independent Auditors'
Report.
ITEM 8. Change in Fiscal Year.
Not applicable.
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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 hereto duly authorized.
Date: November 4, 1996
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
--------------------------
Brian K. Fields
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number
- ------
99.1 Financial Statements
(i) Historical summaries of Operating Revenue and Expenses for Search Plaza and
Quorum North for the nine months ended September 30, 1996 (unaudited) and for
the year ended December 31, 1995, with accompanying notes and Independent
Auditors' Report;
(ii) Historical summaries of Operating Revenue and Expenses for Rio Robles
Technology Center for the nine months ended September 30, 1996 (unaudited) and
for the year ended December 31, 1995, with accompanying notes and Independent
Auditors' Report; and
(iii) Historical summaries of Operating Revenue and Expenses for South Coast
Executive Centre for the nine months ended September 30, 1996 (unaudited) and
for the year ended December 31, 1995, with accompanying notes and Independent
Auditors' Report.
SEARCH PLAZA AND QUORUM NORTH
Historical Summaries
of Operating Revenue and Expenses
Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995
(With Independent Auditors' Report Thereon)
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Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Search Plaza and Quorum North for the year
ended December 31, 1995. This historical summary is the responsibility of the
management of Search Plaza and Quorum North. Our responsibility is to express an
opinion on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of Search
Plaza and Quorum North.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Search Plaza and Quorum North for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
October 25, 1996
<PAGE>
SEARCH PLAZA AND QUORUM NORTH
Historical Summaries of Operating Revenue and Expenses
For the nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995
(dollars in thousands)
Nine months Year
ended ended
September 30, December 31,
1996 1995
------------ ------------
Operating revenue:
Building rental $ 2,611 3,371
Recovery of operating expenses 258 237
-------- -------
Total operating revenue 2,869 3,608
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Operating expenses:
Maintenance 422 458
Utilities 339 449
Real estate taxes 253 351
Insurance 26 31
Management fees 137 173
General operating 123 159
Administrative 66 75
-------- -------
Total operating expenses 1,366 1,696
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Operating revenue in excess of
operating expenses $ 1,503 1,912
======== =======
See accompanying notes to historical summaries
of operating revenue and expenses.
<PAGE>
SEARCH PLAZA AND QUORUM NORTH
Notes to the Historical Summaries of Operating Revenue and Expenses
Nine months ended September 30, 1996 (unaudited)
and year ended December 31, 1995
(dollars in thousands)
(1) Description of the Property
Search Plaza is a seven-story Class A office building located in Dallas,
Texas, containing 151,985 square feet of office space available for
lease. The building was constructed in 1985. At September 30, 1996,
Search Plaza was 97% leased.
Quorum North is a five-story Class B+ office building located in Addison,
Texas, containing 116,318 square feet of office space available for
lease. The building was constructed in 1983. At September 30, 1996,
Quorum North was 75% leased.
During the nine months ended September 30, 1996 and the year ended
December 31, 1995, the buildings were under common ownership.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty
Corporation in the future operations of the property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of Search Plaza and
Quorum North have been excluded from expenses.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over the
terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the nine
months ended September 30, 1996 has been prepared consistent with
the rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1995. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of management,
all adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the nine months ended September 30, 1996
have been included. The results of operations for the nine-month
period ended September 30, 1996 are not necessarily indicative of
the results for the full year.
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SEARCH PLAZA AND QUORUM NORTH
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Search Plaza and Quorum North for the
12 months ended September 30, 1996, as adjusted for certain items which
can be factually supported. For purposes of presenting pro forma net
taxable operating income, revenue is recognized when it is either
collectible under the lease terms or collected. Tax depreciation for the
building is computed on the modified accelerated cost recovery system
method over a 39-year life. This statement does not purport to forecast
actual operating results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,824
Less estimated depreciation and amortization expense 594
---------
Pro forma taxable operating income $ 1,230
=======
Pro forma cash available from operations $ 1,678
=======
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RIO ROBLES TECHNOLOGY CENTER
Historical Summaries
of Operating Revenue and Expenses
Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Rio Robles Technology Center for the year
ended December 31, 1995. This historical summary is the responsibility of the
management of Rio Robles Technology Center. Our responsibility is to express an
opinion on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of Rio
Robles Technology Center.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Rio Robles Technology Center for the year ended December 31, 1995, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, D.C.
October 24, 1996
<PAGE>
RIO ROBLES TECHNOLOGY CENTER
Historical Summaries of Operating Revenue and Expenses
For the nine months ended September 30, 1996 (unaudited)
and the year ended December 31, 1995
(dollars in thousands)
Nine months ended Year ended
September 30, 1996 December 31, 1995
------------------ -----------------
Operating revenue:
Rental income $ 3,070 3,987
Recovery of operating expenses 656 828
--- ---
Total operating revenue 3,726 4,815
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Operating expenses:
Real estate taxes 264 452
Maintenance 126 156
Management fees 113 165
Insurance 141 142
Utilities 37 38
Administrative 20 18
-- --
Total operating expenses 701 971
--- ---
Operating revenue in excess of
operating expense $ 3,025 3,844
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See accompanying notes to historical summaries
of operating revenue and expenses.
<PAGE>
RIO ROBLES TECHNOLOGY CENTER
Notes to the Historical Summaries of Operating Revenue and Expenses
Nine months ended September 30, 1996 (unaudited)
and year ended December 31, 1995
(dollars in thousands)
(1) Description of the Property
Rio Robles Technology Center consists of 7 buildings located in the area
known as Silicon Valley, California, containing 368,178 square feet of
office space available for lease. The buildings were constructed in 1983.
At September 30, 1996, Rio Robles Technology Center was 100% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the future operations of the property, have
been excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of Rio Robles Technology
Center have been excluded from expenses.
In accordance with current California tax law, management expects
that real estate taxes will be reassessed upon transfer of
ownership based on the properties' purchase price. Management is
not aware of any other material factors relating to Rio Robles
Technology Center that would cause the historical summaries of
operating revenue and expenses to not be indicative of future
operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the nine
months ended September 30, 1996 has been prepared consistent with
the rules and regulations of the Securities and Exchange
Commission governing the preparation of the amounts for the year
ended December 31, 1995. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations,
although management believes that the disclosures are adequate to
make the information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the nine months ended September
30, 1996, have been included. The results of operations for the
nine-month period ended September 30, 1996 are not necessarily
indicative of the results for the full year.
(Continued)
<PAGE>
RIO ROBLES TECHNOLOGY CENTER
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Rio Robles Technology Center for the 12
months ended September 30, 1996, as adjusted for certain items which can
be factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the buildings
is computed on the modified accelerated cost recovery system method over
a 39-year life. This statement does not purport to forecast actual
operating results for any period in the future.
Proforma net operating income (exclusive of
depreciation and amortization expense) $ 3,642
Less estimated depreciation and amortization expense 677
------
Proforma taxable operating income $ 2,965
======
Proforma cash available from operations $ 3,467
======
<PAGE>
SOUTH COAST EXECUTIVE CENTRE
Historical Summaries
of Operating Revenue and Expenses
Nine Months Ended September 30, 1996 (Unaudited)
and Year Ended December 31, 1995
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of South Coast Executive Centre for the year
ended December 31, 1995. This historical summary is the responsibility of South
Coast Executive Centre's management. Our responsibility is to express an opinion
on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of South
Coast Executive Centre.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
South Coast Executive Centre for the year ended December 31, 1995, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, D.C.
October 31, 1996
<PAGE>
SOUTH COAST EXECUTIVE CENTRE
Historical Summaries of Operating Revenue and Expenses
For the nine months ended September 30, 1996 (unaudited) and
the year ended December 31, 1995
(dollars in thousands)
Nine months ended Year ended
September 30, 1996 December 31, 1995
------------------ -----------------
Operating revenue - Building rental $ 2,239 2,861
Operating expenses:
Cleaning 115 139
Utilities 212 300
Maintenance 168 234
General operating 155 197
Administrative 52 109
Property management fees 94 131
Insurance 30 34
Real estate taxes 109 144
--- ---
Total operating expenses 935 1,288
--- -----
Operating revenue in excess of
operating expenses $ 1,304 1,573
======== =====
See accompanying notes to historical summaries
of operating revenue and expenses.
<PAGE>
SOUTH COAST EXECUTIVE CENTRE
Notes to the Historical Summaries of Operating Revenue and Expenses
Nine months ended September 30, 1996 (unaudited)
and year ended December 31, 1995
(dollars in thousands)
(1) Description of the Property
South Coast Executive Centre consists of two office buildings located in
Costa Mesa, California, containing 161,778 square feet of office and
retail space available for lease. The buildings were constructed in 1987.
At September 30, 1996, South Coast Executive Centre was 96% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenues and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the proposed future operations of the
buildings, have been excluded. Interest income has been excluded
from revenue, and interest, depreciation and amortization, and
other costs not directly related to the future operations of South
Coast Executive Centre have been excluded from expenses.
In accordance with current California tax law, management expects
that real estate taxes will be reassessed upon transfer of
ownership based on the purchase price of the buildings. Management
is not aware of any material factors relating to South Coast
Executive Centre that would cause the historical summaries of
operating revenue and expenses to not be indicative of future
operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the nine
months ended September 30, 1996 has been prepared consistent with
the rules and regulations of the Securities and Exchange
Commission governing the preparation of the amounts for the year
ended December 31, 1995. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations,
although management believes that the disclosures are adequate to
make the information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the nine months ended September
30, 1996, have been included. The results of operations for the
nine-month period ended September 30, 1996 are not necessarily
indicative of the results for the full year.
(Continued)
<PAGE>
SOUTH COAST EXECUTIVE CENTRE
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of South Coast Executive Centre for the
twelve months ended September 30, 1996, as adjusted for certain items
which can be factually supported. For purposes of presenting pro forma
net taxable operating income, revenue is recognized when it is either
collectible under the lease terms or collected. Tax depreciation for the
buildings is computed on the modified accelerated cost recovery system
method over a 31.5-year life. This statement does not purport to forecast
actual operating results for any period in the future.
Proforma net operating income (exclusive of
depreciation and amortization expense) $ 1,697
Less - estimated depreciation and amortization expense 440
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Proforma taxable operating income $ 1,257
=======
Proforma cash available from operations $ 1,697
=======
