<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A No. 1
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 3, 1996
TRINET CORPORATE REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-11918 94-3175659
(Commission File Number) (IRS Employer Id. Number)
Four Embarcadero Center, Suite 3150
San Francisco, CA 94111
(Address of principal executive offices) (Zip Code)
(415) 391-4300
(Registrant's telephone number, including area code)
<PAGE> 2
Item 5. Other Events
PROPERTY ACQUISITIONS: From April 1, 1996 through July 3, 1996 TriNet Corporate
Realty Trust, Inc. (the "Company") acquired nine additional properties (the
"Acquired Properties") for an aggregate purchase price of approximately $75.3
million, plus aggregate acquisition costs of approximately $1.3 million. As of
July 3, 1996 the Company's portfolio consisted of 107 properties. The properties
acquired from April 1, 1996 through July 3, 1996 are described below. Unless
otherwise indicated, substantially all of the purchase price for each property
was funded by drawing on the Company's $200 million unsecured revolving credit
facility (the "1995 Acquisition Facility") with a group of 11 banks for which
Morgan Guaranty Trust Company of New York is the lead agent and The First
National Bank of Boston is the managing co-agent and any remainder was funded
from working capital. Neither the Company, any subsidiary of the Company nor any
director or officer of the Company was affiliated with or had a material
relationship with the seller of any property described below.
TERADYNE, INC. AND FRESENIUS USA, INC. (SHADELANDS DRIVE HEADQUARTERS
PROPERTY): On April 9, 1996, TriNet Essential Facilities X, Inc. ("TriNet
X"), a wholly owned subsidiary of the Company, purchased two headquarters
properties comprised of 145,000 square feet located in Walnut Creek,
California for approximately $11.5 million. The property was purchased
from Copley Realty Income Partners I. TriNet X acquired a fee title
interest in these properties. Teradyne, Inc. will continue to use one of
the properties under a triple net lease that expires on December 31, 2000
subject to extension for two additional five year terms at the tenant's
option. As of July 1, 1996, current annual rent for the Teradyne, Inc.
property is $540,000. Fresenius USA, Inc. has occupied the second building
under a sublease with Teradyne since July of 1992, and entered into a
direct triple net lease on June 27, 1996 that expires on June 30, 2002
subject to extension for a five year term at the tenant's option. As of
July 1, 1996, current annual rent on the Fresenius USA, Inc. property is
$739,500 with contractual escalations of 7.5% in 1998 and 7.78% in 1999.
LOCKHEED MARTIN: On May 31, 1996, TriNet X purchased the 118,800 square
foot office/R&D property occupied by a wholly owned subsidiary of Lockheed
Martin (d.b.a.: Lockheed Martin) located in suburban Philadelphia,
Pennsylvania for approximately $4.6 million. The property was purchased
from Olds Properties Corporation. TriNet X acquired a fee title interest
in this property. Lockheed Martin will continue to use the property under
a triple net lease that expires on August 31, 2000, subject to extension
for an additional 13.5 year term at the tenant's option. As of July 1,
1996, current annual rent for this building is $469,260.
SUNNYVALE RESEARCH CENTER: On June 26, 1996, TriNet Sunnyvale Partners, L.
P. a limited partnership in which the Company is the sole general partner
("Sunnyvale Partners") purchased a four-building R&D campus comprised of
215,481 square feet located in Sunnyvale, California, for approximately
$30.6 million. Sunnyvale Partners purchased the fee title interest in this
property from O'Donnell, Brigham & Partners-Northern Developments
("O'Donnell"), whose partners are the limited partners in Sunnyvale
Partners. The property was purchased with $6.1 million in cash contributed
by the Company (which was funded with working capital and a $4.7 million
draw on the
<PAGE> 3
1995 Acquisition Facility), equity interests in the property contributed
to Sunnyvale Partners by O'Donnell with an approximate value of $7.6
million and the assumption of a $17.0 million first mortgage with Chase
Manhattan Bank. Under the terms of the Sunnyvale Partners Limited
Partnership Agreement, beginning in June 1998 O'Donnell has the right
under certain circumstances to request the redemption of its interest in
Sunnyvale Partners, and the Company may satisfy the redemption request
with shares of the Company's Common Stock or cash. Mitsubishi Electronics
America, Inc. will continue to occupy three of the buildings, under a
triple net lease that expires on July 31, 2003, subject to extension for a
five year term at the tenant's option. Current annual rent for these three
buildings is $2,878,366. The fourth building is tenanted by Futuretel,
Inc. (subleasing from National Semiconductor Corporation ("National
Semiconductor")) and Kanematsu USA, Inc. ("Kanematsu"). Kanematsu will
continue to use a portion of the building under a triple net lease that
expires on August 14, 2000, subject to extension for a five year term at
the tenant's option. National Semiconductor, currently subleasing their
space to Futuretel, Inc., is the primary tenant under a triple net lease
that expires on January 31, 1998. As of July 1, 1996, current annual
rent under the separate leases with Kanematsu and National Semiconductor,
Inc. is $211,741, and $269,100, respectively.
LAM RESEARCH CORPORATION: On June 27, 1996, TriNet X purchased a 120,576
square foot office/R&D facility occupied by Lam Research Corporation,
located in Milpitas, California from Aetna Life Insurance Company for a
purchase price of $12.6 million. TriNet X acquired a fee title interest in
this property. Lam Research Corporation will continue to use the property
under a triple net lease that expires on January 31, 2006, subject to
extension for a five year term at the tenant's option. As of July 1, 1996,
current annual rent is $1,157,530 with contractual escalations of 4.0%
annually through 2005.
BLUE CROSS & BLUE SHIELD UNITED OF WISCONSIN: On June 28, 1996, TriNet
Essential Facilities XX, Inc. ("TriNet XX"), a wholly owned subsidiary of
the Company, purchased a 216,541 square foot headquarters property
occupied by Blue Cross & Blue Shield United of Wisconsin ("BC & BS")
located in Milwaukee, Wisconsin for a purchase price of $16.0 million.
TriNet XX simultaneously net leased the property back to BC & BS. TriNet
XX acquired a fee title interest in this property. BC & BS will continue
to use the building under a triple net lease that expires on June 30,
2006, subject to extension for three additional five year terms at the
tenant's option. As of July 1, 1996, current annual rent is $1,609,600
with contractual escalations of 3.0% annually through 2005.
PROPERTY DISPOSITIONS: From April 1, 1996 through July 3, 1996 the Company sold
two properties (the "Sold Properties") for an aggregate sales price of $12.3
million. The properties sold from April 1, 1996 through July 3, 1996 are
described below. Unless otherwise noted, neither the Company, any subsidiary of
the Company nor any director or officer of the Company was affiliated with or
had a material relationship with the buyer of any property described below.
SCHWEGMANN GIANT SUPER MARKETS-DENHAM SPRINGS: On April 24, 1996, TriNet
Corporate Partners I, L. P. ("TCPI"), a wholly owned subsidiary of the
Company, sold a retail store located in Denham Springs, Louisiana to
Schwegmann Giant Super Markets for a sale price of $1.3 million. Prior to
the sale of this property, TCPI leased the
<PAGE> 4
property to Schwegmann Giant Super Markets. TCPI recognized an
insignificant gain on this transaction.
LINVATEC CORPORATION: On July 3, 1996, TriNet X sold a 124,950 square foot
office building occupied by Linvatec Corporation and located in Largo,
Florida to Largo Lakes-1 Limited Partnership for a sale price of
approximately $11.0 million. TriNet X recognized a gain of approximately
$0.65 million on this transaction.
Item 7. Financial Statements and Exhibits
(a) Pro Forma Financial Statements
The pro forma financial statements of the Company reflecting the
above transactions are included on pages F-2 to F-6.
(b) Historical Financial Statements
The Historical Summary of Gross Income for the Shadelands Drive
Headquarters Property is included on pages F-7 to F-9. The Historical
Summary of Gross Income for the Lockheed Martin Office/R&D Property
is included on pages F-10 to F-12. The Historical Summary of Gross
Income for the Sunnyvale Research Center is included on pages F-13 to
F-15. The Historical Summary of Gross Income for the Lam Research
Office/R&D Property is not included because this property was not
occupied by Lam Research until February of 1996 and prior to that the
property was unoccupied for certain periods during 1995. Accordingly,
1995 historical results do not reflect any on-going operations of the
property. The Blue Cross & Blue Shield United of Wisconsin
acquisition was a sale lease-back and therefore no historical
financial information is available for this property.
(c) Exhibits
*10.1 Amended and Restated Agreement of Limited Partnership
between TriNet Corporate Realty Trust, Inc. and the
O'Donnell Revocable Trust, the Donald S. Grant Revocable
Trust and John W. Hopkins, dated June 26, 1996.
23.1 Consent of Independent Accountants
*Previously filed
<PAGE> 5
TRINET CORPORATE REALTY TRUST, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Pro forma financial statements:
Unaudited pro forma consolidated balance sheet as of June 30, 1996 F-2
Unaudited pro forma consolidated statement of operations
for the six months ended June 30, 1996 F-3
Unaudited pro forma consolidated statement of operations
for the year ended December 31, 1995 F-4
Notes to the pro forma financial statements F-5
Historical Summary of Gross Income for the Shadelands Drive
Headquarters Property:
Report of independent accountants F-7
Historical summary of gross income for the year
ended December 31, 1995 F-8
Notes to historical summary of gross income F-9
Historical Summary of Gross Income for the Lockheed Martin
Office/R&D Property:
Report of independent accountants F-10
Historical summary of gross income for the year
ended December 31, 1995 F-11
Note to historical summary of gross income F-12
Historical Summary of Gross Income for the Sunnyvale Research Center:
Report of independent accountants F-13
Historical summary of gross income for the year
ended December 31, 1995 F-14
Notes to historical summary of gross income F-15
<PAGE> 6
TRINET CORPORATE REALTY TRUST, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
June 30, 1996
----------------------------------
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Real estate, at cost:
Land $110,306 $ (2,726)A $107,580
Depreciable property 510,449 (7,773)A 502,676
Other real estate 22,239 -- 22,239
-------- -------- --------
642,994 (10,499) 632,495
Less accumulated depreciation (34,749) 299 A (34,450)
-------- -------- --------
608,245 (10,200) 598,045
Investment in joint venture 6,565 -- 6,565
-------- -------- --------
Total real estate 614,810 (10,200) 604,610
Cash and cash equivalents 4,843 -- 4,843
Restricted cash and investments 3,963 -- 3,963
Deferred rent receivable 13,755 (95)A 13,660
Interest rate protection agreements and loan costs, net 16,780 -- 16,780
Other assets, net 1,858 -- 1,858
-------- -------- --------
$656,009 $(10,295) $645,714
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Debt $292,891 $(10,895)A $281,996
Dividends payable 8,586 -- 8,586
Other liabilities 20,681 (61)A 20,620
-------- -------- --------
Total liabilities 322,158 (10,956) 311,202
-------- -------- --------
Stockholders' equity:
Preferred stock, $.01 par value, 10,000,000 shares
authorized, issued and outstanding:
2,000,000 shares at June 30, 1996
(aggregate liquidation preference $50,000) 20 -- 20
Common stock, $.01 par value, 40,000,000 shares
authorized, 13,847,667 shares issued and
outstanding at June 30, 1996 138 -- 138
Paid-in-capital 360,724 -- 360,724
Distributions in excess of net income (27,031) 661 A (26,370)
-------- -------- --------
Total stockholders' equity 333,851 661 334,512
-------- -------- --------
$656,009 $(10,295) $645,714
======== ======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-2
<PAGE> 7
TRINET CORPORATE REALTY TRUST, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
----------------------------------------
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue
Rent $ 35,356 $1,737B $ 37,093
Joint venture income 15 442C 457
Other 356 -- 356
----------- ------ -----------
Total revenue 35,727 2,179 37,906
Expenses
Property operating costs 1,218 -- 1,218
General and administrative 2,256 -- 2,256
Interest 10,513 1,116D 11,629
Depreciation and amortization 7,901 272E 8,173
----------- ------ -----------
Net Income $ 13,839 $ 791 $ 14,630
=========== ====== ===========
Earnings available to common stockholders $ 13,683 $ 14,474
=========== ===========
Earnings per weighted average common share $ 0.99 $ 1.05
=========== ===========
Weighted average number of shares outstanding 13,841,766 13,841,766
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-3
<PAGE> 8
TRINET CORPORATE REALTY TRUST, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-----------------------------------------
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue
Rent $ 56,199 $3,917F $ 60,116
Joint venture income -- 912G 912
Other 693 -- 693
----------- ------ -----------
Total revenue 56,892 4,829 61,721
Expenses
Property operating costs 1,275 -- 1,275
General and administrative 3,892 -- 3,892
Interest 17,329 2,875H 20,204
Depreciation and amortization 14,162 718I 14,880
----------- ------ -----------
Income before extraordinary charge 20,234 1,236 21,470
Extraordinary charge from early
extinguishment of debt 9,561 -- 9,561
----------- ------ -----------
Net Income $ 10,673 $1,236 $ 11,909
=========== ====== ===========
Earnings available to common stockholders $ 10,673 $ 11,909
=========== ===========
Earnings per weighted average common share $ 0.95 $ 1.06
=========== ===========
Weighted average number of shares outstanding 11,219,201 11,219,201
</TABLE>
The accompanying notes are an integral
part of these financial statements
F-4
<PAGE> 9
TRINET CORPORATE REALTY TRUST, INC.
NOTES TO THE PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. Basis of Presentation
The pro forma financial statements of TriNet Corporate Realty Trust, Inc. (the
"Company"), which are unaudited, have been prepared based on the historical
financial statements of the Company. The pro forma statements of operations for
the six months ended June 30, 1996 and the year ended December 31, 1995 have
been prepared as if the acquisitions of the Acquired Properties between April 1,
1996 and July 3, 1996 and the sales of the Sold Properties between April 1, 1996
and July 3, 1996 had occurred on January 1, 1995. The pro forma balance sheet
as of June 30, 1996 has been prepared as if the acquisitions of the Acquired
Properties and the sales of the Sold Properties had occurred on June 30, 1996.
In management's opinion, all adjustments necessary to reflect the effects of
these transactions have been made. The pro forma financial statements should
be read in conjunction with the historical financial statements of the Company.
The pro forma financial statements are not necessarily indicative of what the
actual results of operations of the Company would have been for the six months
ended June 30, 1996 or for the year ended December 31, 1995 had the transactions
involving the Acquired Properties and the Sold Properties occurred on January 1,
1995, nor do they purport to represent the results of operations for future
periods.
2. Pro Forma Adjustments:
A. Reflects the sale of the Linvatec property and the subsequent payment of
$10,895 on the 1995 Acquisition Facility.
B. Additional rental revenue in 1996 is attributable to the Acquired Properties,
excluding the properties held by Sunnyvale Partners, offset by the decrease
attributable to the Sold Properties.
C. Joint venture income in 1996 is attributable to the Company's interest in the
Sunnyvale Partners. Net income from the partnership is distributed first to
the limited partners to satisfy a 9% preferred return on their investment,
with the remaining income allocated 99% to the Company and 1% to the limited
partners.
D. Additional interest expense in 1996 is calculated to reflect: (1) the net
draw amount of $37,316 on the Company's 1995 Acquisition Facility in
connection with the acquisition of the Acquired Properties offset by the sale
proceeds of the Linvatec property, computed at the weighted average interest
rate in effect under the 1995 Acquisition Facility during the six months
ended June 30, 1996, and (2) the payment of $950 on a mortgage loan upon the
sale of the Schwegmann Giant Super Markets property.
E. Additional depreciation expense in 1996 is calculated to reflect: (1)
additional depreciation on the Acquired Properties, excluding the properties
held by Sunnyvale Partners, and (2) elimination of depreciation attributable
to the Sold Properties. Depreciation is computed using the straight-line
method of cost recovery over 40 years for building and improvements.
F. Additional rental revenue in 1995 is attributable to the Acquired Properties,
excluding the properties held by Sunnyvale Partners, offset by the decrease
attributable to the Sold Properties.
F-5
<PAGE> 10
TRINET CORPORATE REALTY TRUST, INC.
NOTES TO THE PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
G. Joint venture income in 1995 is attributable to the Company's interest in
Sunnyvale Partners. Net income from the partnership is distributed first to
the limited partners to satisfy a 9% preferred return on their investment,
with the remaining income allocated 99% to the Company and 1% to the limited
partners.
H. Additional interest expense in 1995 is calculated to reflect: (1) the net
draw amount of $37,316 on the Company's 1995 Acquisition Facility in
connection with the acquisition of the Acquired Properties offset by the sale
proceeds of the Linvatec property, computed at the average London Interbank
Offered Rate for the year ended December 31, 1995, plus a margin of 2.00% and
(2) the payment of $950 on a mortgage loan upon the sale of the Schwegmann
Giant Super Markets property.
I. Additional depreciation expense in 1995 is calculated to reflect: (1)
additional depreciation on the Acquired Properties, excluding the properties
held by Sunnyvale Partners, and (2) elimination of depreciation attributable
to the Sold Properties. Depreciation is computed using the straight-line
method of cost recovery over 40 years for building and improvements.
F-6
<PAGE> 11
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
TriNet Corporate Realty Trust, Inc.
We have audited the accompanying Historical Summary of Gross Income (the
"Historical Summary") of the Shadelands Drive Headquarters Property, Walnut
Creek, California (the "Property") for the year ended December 31, 1995. The
Historical Summary is the responsibility of the Property's owner. 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
basis of the accounting 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 as
described in Note A. The Historical Summary is not intended to be a complete
presentation of the Property's gross income and expenses and may not be
comparable to results from proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income as described in Note A, of the Shadelands
Drive Headquarters Property, Walnut Creek, California, for the year ended
December 31, 1995, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
San Francisco, California
August 5, 1996
F-7
<PAGE> 12
SHADELANDS DRIVE HEADQUARTERS PROPERTY
HISTORICAL SUMMARY OF GROSS INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
Gross Income $1,209,884
===========
The accompanying notes are an integral
part of this historical summary
F-8
<PAGE> 13
SHADELANDS DRIVE HEADQUARTERS PROPERTY
NOTES TO HISTORICAL SUMMARY OF GROSS INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
A. Property and Basis of Accounting
The accompanying Historical Summary of Gross Income has been prepared in
accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and relates to the operations of the Shadelands Drive property
(the "Property"). The Property consists of two office buildings comprising
145,000 square feet in Walnut Creek, California.
During 1995, the Property was leased to Teradyne, Inc. under a triple net
lease expiring on December 31, 2000. One building, comprising 85,000
square feet was subleased to Fresenius USA, Inc. ("Fresenius") under a
sublease expiring in June of 1996. These leases provided for the tenants
to pay all operating expenses and, accordingly, no operating expenses are
included in the Historical Summary of Gross Income. Rental income has been
reduced by $459,601 as a result of the straight-line adjustment for the
difference between straight-line rents and contractual rent payments.
B. Subsequent Event
In connection with the acquisition of the Property by TriNet Corporate
Realty Trust, Inc. (the "Company"), Fresenius entered into a direct triple
net lease with the Company expiring June 30, 2002.
F-9
<PAGE> 14
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
TriNet Corporate Realty Trust, Inc.
We have audited the accompanying Historical Summary of Gross Income (the
"Historical Summary") of Lockheed Martin Office/R&D Property, Philadelphia,
Pennsylvania (the "Property") for the year ended December 31, 1995. The
Historical Summary is the responsibility of the Property's owner. 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
basis of the accounting 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 as
described in Note A. The Historical Summary is not intended to be a complete
presentation of the Property's gross income and expenses and may not be
comparable to results from proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income as described in Note A, of Lockheed Martin
Office/R&D Property, Philadelphia, Pennsylvania, for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
San Francisco, California
August 5, 1996
F-10
<PAGE> 15
LOCKHEED MARTIN OFFICE/R&D PROPERTY
HISTORICAL SUMMARY OF GROSS INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
Gross Income $ 245,128
==========
The accompanying note is an integral
part of this historical summary
F-11
<PAGE> 16
LOCKHEED MARTIN OFFICE/R&D PROPERTY
NOTE TO HISTORICAL SUMMARY OF GROSS INCOME
A. Property and Basis of Accounting
The accompanying Historical Summary of Gross Income has been prepared in
accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange
Commission and relates to the operations of the Lockheed Martin Office/R&D
Property (the "Property"). The Property consists of a 118,800 square foot
office/R&D property in suburban Philadelphia, Pennsylvania.
The Property is subject to a net lease that expires in August, 2000 and
provides for the tenant to pay all expenses. Therefore, no operating
expenses have been presented in the Historical Summary. Rental income has
been reduced by $184,532 as a result of the straight-line adjustment for
differences between straight-line rents and contractual rent payments.
F-12
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
TriNet Corporate Realty Trust, Inc.
We have audited the accompanying Historical Summary of Gross Income (the
"Historical Summary") of the Sunnyvale Research Center, Sunnyvale, California
(the "Property") for the year ended December 31, 1995. The Historical Summary is
the responsibility of the Property's owner. 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
basis of the accounting 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 as
described in Note A. The Historical Summary is not intended to be a complete
presentation of the Property's gross income and expenses and may not be
comparable to results from proposed future operations of the Property.
In our opinion, the Historical Summary referred to above presents fairly, in all
material respects, the gross income as described in Note A, of the Sunnyvale
Research Center, Sunnyvale, California, for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
San Francisco, California
August 5, 1996
F-13
<PAGE> 18
SUNNYVALE RESEARCH CENTER
HISTORICAL SUMMARY OF GROSS INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
Gross Income $3,449,481
==========
The accompanying notes are an integral
part of this historical summary
F-14
<PAGE> 19
SUNNYVALE RESEARCH CENTER
NOTES TO HISTORICAL SUMMARY OF GROSS INCOME
A. Property and Basis of Accounting
The accompanying Historical Summary of Gross Income (the "Historical
Summary") has been prepared in accordance with Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission and relates to the operations of
the Sunnyvale Research Center (the "Property"). The Property consists of a
four-building R&D campus comprised of 215,481 square feet in Sunnyvale,
California.
During 1995, the Property was owned by O'Donnell, Brigham &
Partners-Northern Developments ("O'Donnell"). The accompanying Historical
Summary includes only recurring operating revenue attributable to the
leases described below and excludes debt service (Note B) and other
non-operating expenses of O'Donnell.
The Property is subject to three net leases that expire in July 2002,
August 2000, and January 1998 respectively, and each provides for the
tenant to pay substantially all expenses. Therefore, no operating expenses
have been presented in the Historical Summary. Rental income includes
$187,865 resulting from the straight-line adjustment for scheduled rent
increases.
B. Note payable
The Property is encumbered by a non-recourse first mortgage with Chase
Manhattan Bank maturing in April 1998. At December 31, 1995, this mortgage
had a principal balance of $23,560,593. Interest on the mortgage is due
monthly at the London Interbank Offered Rate plus a margin of 2.00%. In
connection with the acquisition of this property by TriNet Sunnyvale
Partners, L.P., a principal payment of $6,047,345 was made resulting in a
principal balance of $17,000,000 being assumed by TriNet Sunnyvale
Partners L.P.
F-15
<PAGE> 20
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.
TRINET CORPORATE REALTY TRUST, INC.
By: /s/A. William Stein
-----------------------------------------------
A. William Stein
Executive Vice President and
Chief Financial Officer
(Authorized Officer of the Registrant
and Principal Financial Officer)
Dated: August 7, 1996
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of TriNet Corporate Realty Trust, Inc. on Form S-3 (File No. 33-79746), Form
S-3 (File No. 33-87256), Form S-3 (File No. 33-80709), Form S-8 (File No.
33-79748) and Form S-8 (File No. 33-02222) of our reports dated August 5,
1996, on our audits of the Historical Summary of Gross Income of Shadelands
Drive Headquarters Property for the year ended December 31, 1995, the
Historical Summary of Gross Income of Lockheed Martin Office/R&D Property
for the year ended December 31, 1995 and the Historical Summary of Gross
Income of Sunnyvale Research Center for the year ended December 31, 1995,
which reports are included in this Current Report on Form 8-K/A.
COOPERS & LYBRAND L.L.P.
San Francisco, California
August 6, 1996
