<PAGE>
As filed with the Securities and Exchange Commission on June 23, 1998
REGISTRATION STATEMENT NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_________________________
TRINET CORPORATE REALTY TRUST, INC.
(Exact name of Registrant as specified in its charter)
Maryland 94-3175659
(State of incorporation) (I.R.S. Employer Identification Number)
ONE EMBARCADERO CENTER, 33RD FLOOR
SAN FRANCISCO, CALIFORNIA 94111
(415) 391-4300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
_______________________________
MARK S. WHITING
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRINET CORPORATE REALTY TRUST, INC.
One Embarcadero Center, 33rd Floor, San Francisco, California 94111
(415) 391-4300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
____________________________
With copies to:
DAVID W. WATSON, P.C.
GOODWIN, PROCTER & HOAR LLP
Exchange Place, Boston, Massachusetts 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended check the following box. [X]
If this form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
_____________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Proposed Maximum
Title of Securities Being Amount to be Offering Proposed Maximum Amount of
Registered Registered (1) Price Per Share (2) Aggregate Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (3) 258,894 shares $34.1875 $8,850,939 $2,612
====================================================================================================================
</TABLE>
(1) This Registration Statement also relates to such additional shares as may be
issuable as a result of certain adjustments including, without limitation,
stock dividends, stock splits and distributions of options, warrants,
convertible securities, evidences of indebtedness or assets.
(2) This estimate is based on the average of the high and low sales prices on
the New York Stock Exchange of the Common Stock of TriNet Corporate Realty
Trust, Inc. on June 17, 1998, pursuant to Rule 457(c) under the Securities
Act of 1933, as amended, and is made solely for the purposes of determining
the registration fee.
(3) This Registration Statement also relates to the Rights to purchase shares of
Series D Junior Participating Preferred Stock of the Registrant which are
attached to all shares of Common Stock outstanding as of, and issued
subsequent to, April 13, 1998, pursuant to the terms of the Registrant's
Rights Agreement dated February 25, 1998 between the Registrant and Harris
Trust & Savings Bank, as Rights Agent. Until the occurrence of certain
prescribed events, the Rights are not exercisable, are evidenced by the
certificates for the Common Stock and will be transferred with and only with
such stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
258,894 SHARES
TRINET CORPORATE REALTY TRUST, INC.
COMMON STOCK
TriNet Corporate Realty Trust, Inc. (collectively with its subsidiaries,
the "Company") is a self-administered and self-managed real estate investment
trust ("REIT") that acquires, owns and manages predominantly office and
industrial properties to major corporations nationwide, including corporate
headquarters and strategically important distribution facilities. The Company is
a Maryland corporation and its common stock, par value $.01 per share (the
"Common Stock"), is listed on the New York Stock Exchange (the "NYSE") under the
symbol "TRI."
This Prospectus relates to the possible issuance by the Company of up to
258,894 shares (the "Redemption Shares") of Common Stock, if and to the extent
that John D. O'Donnell, Trustee of the J. and P. O'Donnell Revocable Trust dated
Oct. 20, 1982 (the "O'Donnell Trust"), holder of 110,030 units of limited
partnership interest ("Units") in TriNet Sunnyvale Partners, L.P. (the
"Operating Partnership"), Donald S. Grant, Trustee of the Donald S. Grant
Revocable Trust dated May 5, 1987 (the "Grant Trust"), holder of 38,834 Units,
and Mr. John W. Hopkins, holder of 110,030 Units, or certain transferees of the
O'Donnell Trust, Grant Trust or Mr. Hopkins (each a "Unitholder" and together
with the O'Donnell Trust, Grant Trust and Mr. Hopkins, the "Unitholders"),
exchange such Units for Redemption Shares.
The Units were issued to the Unitholders on June 26, 1996 in connection
with the Amendment and Restatement of the Agreement of Limited Partnership of
the Operating Partnership and the replacement of O'Donnell Brigham &
Partners/Northern Developments with the Company as general partner of the
Operating Partnership. The Unitholders may request redemption of the Units after
June 26, 1998. Pursuant to the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership (the "Partnership Agreement"), a
Unitholder may tender all or a portion of his or its Units to the Operating
Partnership for redemption for cash in an amount equal to the market value of an
equivalent number of shares of Common Stock of the Company; provided, however,
that the Company may, in its sole and absolute discretion, acquire any Units so
tendered for such cash payment or an equivalent number of shares of Common
Stock.
The Company anticipates that it generally will elect to acquire Units
tendered for redemption and to issue shares of Common Stock pursuant to this
Prospectus in exchange therefor rather than paying cash. As a result, the
Company may from time to time issue up to 258,894 Redemption Shares upon the
acquisition of Units tendered to the Operating Partnership for redemption.
The Company will not receive any proceeds from the issuance of any
Redemption Shares, but will acquire Units tendered to the Operating Partnership
for redemption for which it elects to issue Redemption Shares. With each such
acquisition, the Company's interest in the Operating Partnership will increase.
To ensure that the Company maintains its qualification as a REIT, ownership
by any single person is limited to 9.3%, or 12.5% for certain stockholders, of
the value of the outstanding capital stock of the Company.
The Unitholders and any agents, dealers or underwriters that participate
with the Unitholders in the distribution of the shares of Common Stock may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), in which case any commissions received by such
agents, dealers or underwriters and any profit on the resale of the shares of
Common Stock purchased by them may be deemed underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution" for
indemnification arrangements between the Company and the Unitholders.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR CERTAIN FACTORS RELEVANT TO AN
INVESTMENT IN THE COMMON STOCK.
______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
__________
The date of this Prospectus is June 23, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or "Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Redemption Shares. This Prospectus, which constitutes part
of the Registration Statement, omits certain of the information contained in the
Registration Statement and the exhibits thereto on file with the Commission
pursuant to the Securities Act and the rules and regulations of the Commission
thereunder. The Registration Statement, including exhibits thereto, may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048, and Northwestern Atrium Center, 500 W. Madison Street, Suite
1400, Chicago, Illinois 60661-2511, and copies may be obtained at the prescribed
rates from the Public Reference Section of the Commission at its principal
office in Washington, D.C. Statements contained in this Prospectus as to the
contents of any contract or other document referred to are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
The Company files information electronically with the Commission, and the
Commission maintains a Web Site that contains reports, proxy and information
statements and other information regarding registrants (including the Company)
that file electronically with the Commission. The address of the Commission's
Web Site is (http://www.sec.gov).
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
In addition, the Common Stock is listed on the NYSE, and such materials can be
inspected and copied at the NYSE, 20 Broad Street, New York, New York 10005.
In accordance with Section 2-210 of the Maryland General Corporation Law,
as amended, the Board of Directors of the Company has authorized the issuance of
some or all of the shares of any or all of its classes or series of capital
stock without certificates. In addition, the Company has the authority to
designate and issue more than one class or series of capital stock having
various preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption. See "Description of Common Stock." The Company's Articles of
Incorporation impose limitations on the ownership and transfer of the Company's
capital stock. See "Restrictions on Transfers of Common Stock." The Company will
furnish a full statement of the relative rights and preferences of each class or
series of capital stock of the Company which has been so designated and any
restrictions on the ownership or transfer of capital stock of the Company to any
stockholder upon request and without charge. Written requests for such copies
should be directed to: TriNet Corporate Realty Trust, Inc., One Embarcadero
Center, 33rd Floor, San Francisco, California 94111, Attention: Vice President
and General Counsel.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
(i) Annual Report on Form 10-K for the fiscal year ended December 31, 1997, (ii)
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998, (iii)
the Company's Current Reports on Form 8-K filed with the Commission on January
16, 1998, January 21, 1998, February 20, 1998, February 24, 1998, March 4, 1998,
March 13, 1998, April 22, 1998, and June 5, 1998, (iv) the description of the
Company's Common Stock contained in the Company's Registration Statement on Form
8-A dated April 1, 1993, (v) the Company's Registration Statement on Form 8-A,
dated June 12, 1996, as amended by the Company's Registration Statement on Form
8-A/A dated June 28, 1996, (vi) the Company's Registration Statement on Form 8-
A, dated August 6, 1996, as amended by the Company's Registration Statement on
Form 8-A/A dated August 9, 1996, (vii) the Company's Registration Statement on
Form 8-A dated October 3, 1997 and (viii) the description of the Company's
Rights to purchase shares of the Company's Series D Junior Participating
Preferred Stock contained in the Registration Statement on Form 8-A filed with
the Commission on March 13, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of all Securities
2
<PAGE>
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing of such documents. The Company will provide,
without charge, to each person, including any beneficial owner, to whom a copy
of this Prospectus is delivered, at the request of such person, a copy of any or
all of the documents incorporated herein by reference (other than exhibits
thereto, unless such exhibits are specifically incorporated by reference into
such documents). Written requests for such copies should be directed to Geoffrey
M. Dugan, Vice President and General Counsel, TriNet Corporate Realty Trust,
Inc., One Embarcadero Center, 33rd Floor, San Francisco, California 94111,
telephone (415) 391-4300.
Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in an applicable Prospectus Supplement) or in any subsequently filed
document that is incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus or any Prospectus Supplement, except as so
modified or superseded.
3
<PAGE>
Unless the context requires otherwise, all references in this Prospectus to
"TriNet" or the "Company" refer to TriNet Corporate Realty Trust, Inc. and its
subsidiaries on a consolidated basis. Except as otherwise indicated, references
to the Company's properties (the "Properties"), tenants and rental income (i)
include the four (4) Properties owned by TriNet Sunnyvale Partners, L.P., a
joint venture partnership of which the Company is the sole general partner, the
twelve (12) Properties owned by TriNet Property Partners, L.P., a partnership of
which a wholly-owned subsidiary of the Company is the sole general partner, and
the three (3) Properties (2 office buildings and 1 parking garage) owned by
W9/TriNet Poydras, LLC, a joint venture limited liability company in which a
wholly-owned subsidiary of the Company is a 50% member, and the tenants and
rental income of such Properties and (ii) do not include the land parcel owned
by Corporate Technology Centre Associates LLC, a joint venture limited liability
company in which a wholly-owned subsidiary of the Company is a 50% member.
Information contained herein is given as of June 23, 1998, except as elsewhere
indicated.
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Company intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Reform Act of 1995, and is
including this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies is
inherently uncertain. Factors which could have a material adverse effect on the
operations and future prospects of the Company include, but are not limited to,
changes in: economic conditions generally and the real estate market
specifically, legislative/regulatory changes (including changes to laws
governing the taxation of REITs), availability of capital, interest rates,
competition, supply and demand for industrial properties in the Company's
current and proposed market areas and general accounting principles, policies
and guidelines applicable to REITs. These risks and uncertainties, together with
those stated under the caption "Risk Factors" below, should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.
RISK FACTORS
An investment in the Common Stock involves various risks. Unitholders
should carefully consider the following information in conjunction with the
other information contained in this Prospectus before making an investment
decision regarding the Redemption Shares.
TAX CONSEQUENCES TO UNITHOLDERS OF EXCHANGE OF UNITS
Tax Consequences of Exchange of Units. In the event that the Company
exercises its right to acquire Units tendered for redemption in exchange for
cash or Redemption Shares, the Company's acquisition of such Units will be
treated for tax purposes as a sale of the Units. Such a sale will be fully
taxable to the Unitholder and the Unitholder will be treated as realizing for
tax purposes an amount equal to the sum of the cash received or the value of the
Redemption Shares received in the exchange plus the amount of any Operating
Partnership liabilities allocable to the exchanged Units at the time of the
redemption or exchange. It is possible that the amount of gain recognized or
even the tax liability resulting from such gain could exceed the amount of cash
and the value of other property (i.e., Redemption Shares) received upon such
disposition. See "Description of Units and Redemption of Units --Tax
Consequences of Redemption." In addition, the ability of the Unitholder to sell
a substantial number of Redemption Shares in order to raise cash to pay tax
liabilities associated with the redemption of Units may be limited as a result
of fluctuations in the market price of the Common Stock, and the price the
Unitholder receives for such shares may not equal the value of its Units at the
time of redemption or exchange.
In the event that the Company does not exercise its right to acquire Units
tendered for redemption in exchange for cash or Redemption Shares, and such
Units are redeemed by the Operating Partnership for cash, the tax consequences
may differ. See "Description of Units and Redemption of Units."
Potential Change in Investment Upon Redemption of Units. If a Unitholder
exercises its right to require the redemption of all or a portion of its Units,
the Unitholder may receive cash or, at the option of the Company, Redemption
Shares in exchange for its Units. If the Unitholder receives cash from either
the Operating Partnership or the Company, the Unitholder will not have any
interest in the Company or the Operating Partnership (except to the extent that
it retains Units) and will not benefit from any subsequent increases in the
value of Common Stock and will not receive any future distributions from the
Company or the Operating Partnership (unless the Unitholder retains or acquires
in the future additional Common Stock or Units). If the Unitholder receives
Common Stock, the Unitholder will become a stockholder of the Company rather
than a holder of Units in the Operating Partnership. See "Description of Units
and Redemption of Units--Comparison of Ownership of Units and Common Stock."
4
<PAGE>
RISKS ASSOCIATED WITH BORROWING
The Company currently uses and intends to continue using leverage to
increase the Company's rate of return on its investments and allow the Company
to make more investments than it otherwise could. Such use of leverage presents
an additional element of risk in the event that the cash flow from lease
payments on its properties is insufficient to meet both debt payment obligations
and the distribution requirements of the REIT provisions of the Internal Revenue
Code of 1986, as amended (the "Code").
The Company has financed the acquisition of the Properties in part, and may
finance future investments, with debt obligations that provide for the repayment
of principal in a lump-sum or "balloon" payment at maturity. Borrowings under
the 7.30% Notes due May 15, 2001 (the "2001 Notes"), the 7.95% Notes due May 15,
2006 (the "2006 Notes"), the 7.70% Notes due July 15, 2017 (the "2017 Notes"),
the $350 million unsecured revolving credit facility (the "Acquisition
Facility") and the $55.0 million term loan entered into in 1994 (the "1994
Mortgage Loan") require payments of interest only until maturity on May 15,
2001, May 15, 2006, July 15, 2017, October 8, 1999 and December 1, 2004,
respectively. Borrowings under the 6.75% Notes due March 1, 2013 require
semiannual payments of interest only until maturity but are subject to mandatory
repurchase by the Company under certain circumstances on March 1, 2003. The
Company has also assumed four mortgage loans maturing between 2000 and 2009, in
connection with the acquisition of certain Properties. As of June 15, 1998,
such loans represent an aggregate outstanding principal amount of approximately
$16.5 million and bear interest at a weighted average interest rate of 8.5%.
The ability to repay such indebtedness at maturity or otherwise may depend on
the ability of the Company or its subsidiaries either to refinance such
indebtedness or to sell properties. The Company has no commitments with respect
to refinancing any such balloon payments, and there can be no assurance that
such refinancing will be available, that such a sale will occur or that such
refinancing or sale will be available on reasonable terms and conditions.
The 1994 Mortgage Loan and the Acquisition Facility bear interest at a
floating rate tied to the London Interbank Offered Rate ("LIBOR"). Increases in
the interest rates under the 1994 Mortgage Loan and the Acquisition Facility, to
the extent not mitigated by interest rate protection agreements, could adversely
affect the amount of cash available for distribution to the Company's
stockholders.
REAL ESTATE INVESTMENT RISKS
Real property investments are subject to a number of risks. For example,
under certain leases the Company is responsible for certain capital improvements
such as roof replacement and major structural improvements. In addition, to the
extent that the Company's lease for a property is not a triple net lease, the
Company will have greater expenses associated with that property and will bear
some or all of the risk of any increase in such expenses, unless the lease
provides for a rent adjustment based on escalations in operating expenses.
Similarly, adverse economic conditions could affect the ability of a tenant to
make its lease payments, resulting in a reduction in the cash flow of the
Company and a decrease in the value of the property leased to such tenant in the
event the lease is terminated and the Company is unable to lease the property to
another tenant on similar or better terms, or at all. In addition, demand for
rental space in a particular market may be weak at the end of a lease term,
which could prevent the Company from leasing the property to another tenant on
favorable terms, or at all. In any such case, the Company could not only lose
the cash flow from such property, but in order to prevent a foreclosure, also
might divert cash flow generated by other properties to meet mortgage payments,
if any, and pay other expenses associated with owning the property with respect
to which the default or expiration occurred. Furthermore, the Company may enter
into or acquire net leases with corporate tenants for properties that are
specially suited to the needs of a particular tenant, and this may be the case
with certain of the Properties. Such a property may require renovations or
lease payment concessions in order to lease it to another tenant if the initial
lease is terminated or not renewed.
Although the Company seeks to acquire properties which it believes are
strategically important to the ongoing operations of the tenants, the changing
operational circumstances of the Company's tenants may alter the importance of
the leased properties to their businesses. The level of ongoing strategic
importance of any given property to a tenant may affect the probability of lease
renewal by such tenant and, therefore, could have an adverse impact on the
Company's financial performance.
The financial failure of a tenant could cause the tenant to become the
subject of bankruptcy proceedings. Under bankruptcy law, a tenant has the option
of assuming (continuing) or rejecting (terminating) an unexpired lease. If the
tenant assumes its lease with the Company, the tenant must cure all defaults
under the lease and provide the Company with adequate assurance of its future
performance under the lease. If the tenant rejects the lease, the Company's
claim for breach of the lease would (absent collateral securing the claim) be
treated as a general unsecured claim. The amount of the claim would be
5
<PAGE>
capped at the amount owed for unpaid pre-petition lease payments unrelated to
the rejection, plus the greater of one year's lease payments or 15% of the
remaining lease payments payable under the lease (but not to exceed the amount
of three years' lease payments). In a purchase/leaseback transaction it is also
possible, depending on the terms of the transaction, that a bankruptcy court
could recharacterize a purchase/leaseback transaction as a secured lending
transaction. If a transaction were recharacterized as a secured lending
transaction, the Company would not be treated as the owner of the property, but
might have certain rights as a secured creditor.
TENANT CONCENTRATION
To the extent TriNet has a significant concentration of rental revenues
from any single tenant, the inability of that tenant to make its lease payments
could have an adverse effect on the Company. At June 15, 1998, TriNet had leases
with a total of approximately 140 tenants. At such date, the Company's five
largest tenants collectively accounted for approximately 19.6% of the Company's
annualized rental income.
REIT QUALIFICATION REQUIREMENTS
The Company currently intends to qualify as a REIT under the relevant
provisions of the Code, but no assurance can be given that the Company will be
able to continue to operate in a manner so as to qualify or remain so qualified.
Qualification as a REIT involves the application of highly technical and complex
Code provisions for which there are only limited judicial and administrative
interpretations. The determination of various factual matters and circumstances
not entirely within the Company's control may affect the Company's ability to
qualify as a REIT.
To obtain the favorable tax treatment associated with the REIT provisions
of the Code, and to avoid certain excise taxes, the Company generally is
required each year to distribute to its stockholders at least 95% of its taxable
income (excluding any net capital gains). To comply with the 95% distribution
requirement, the Company intends to make distributions to stockholders of
substantially all of its taxable income at least annually. The Company
anticipates that the cash flow available from operations will be sufficient to
enable it to pay its expenses and meet this distribution requirement, but no
assurance can be given in this regard. In addition, differences in timing
between the actual receipt of income and payment of expenses in calculating
taxable income could require the Company to borrow funds to meet the stockholder
distribution requirements that are necessary to achieve the tax benefits
associated with a qualifying REIT.
Failure of the Company in any taxable year to qualify as a REIT will render
the Company subject to tax on its taxable income at regular corporate rates, and
distributions to stockholders in any nonqualifying years will not be deductible
by the Company. In addition, unless entitled to relief under certain statutory
provisions, the Company will be disqualified from treatment as a REIT for the
four taxable years following the year during which qualification is lost. The
additional tax liability of the Company for the year or years involved would
reduce the net earnings of the Company and could adversely affect its ability to
pay distributions to its stockholders. The Company might be required to borrow
funds or to liquidate certain of its investments to pay the applicable taxes.
POTENTIAL ENVIRONMENTAL LIABILITIES
Under various federal, state and local environmental laws, regulations and
ordinances, current or former owners of real estate, as well as certain other
categories of parties, may be required to investigate and clean up hazardous or
toxic chemicals, substances or waste or petroleum product or waste
(collectively, "Hazardous Materials") releases on, under, in or from such
property, and may be held liable to governmental entities or to third parties
for certain damage and for investigation and cleanup costs incurred by such
parties in connection with the release or threatened release of Hazardous
Materials. Such laws typically impose responsibility and liability without
regard to whether the owner knew of or was responsible for the presence of
Hazardous Materials, and the liability under such laws has been interpreted to
be joint and several under certain circumstances. The Company's leases generally
provide that the tenant is responsible for all environmental liabilities and for
compliance with environmental regulations relating to the tenant's operations.
Such a contractual arrangement does not eliminate the Company's statutory
liability or preclude claims against the Company by governmental authorities or
persons who are not parties to such an arrangement. Contractual arrangements in
the Company's leases may provide a basis for the Company to recover from the
tenant damages or costs for which the Company has been found liable.
The costs of investigation and cleanup of Hazardous Materials on, under, in
or from property can be substantial, and the fact that the property has had a
release of Hazardous Materials, even if remediated, may adversely affect the
value of the property and the owner's ability to sell or lease the property or
to borrow using the property as collateral. In addition, some environmental laws
create a lien on a property in favor of the government for damages and costs it
incurs in connection with the release or threatened release of Hazardous
Materials, and
6
<PAGE>
certain state environmental laws provide that such a lien has priority over all
other encumbrances on the property or that a lien can be imposed on other
property owned by the responsible party. Finally, the presence of Hazardous
Materials on a property could result in a claim by a private party for personal
injury or a claim by a neighboring property owner for property damage.
Other federal, state and local laws and regulations govern the removal or
encapsulation of asbestos-containing material when such material is in poor
condition or in the event of building remodeling, renovation or demolition.
Still other federal, state and local statutes, regulations and ordinances may
require the removal or upgrading of underground storage tanks that are out of
service or out of compliance. In addition, federal, state and local laws,
regulations and ordinances may impose prohibitions, limitations and operational
standards on, or require permits, approvals and notifications in connection
with, the discharge of wastewater and other water pollutants, the emission of
air pollutants and operation of air polluting equipment, the generation and
management of Hazardous Materials, and workplace health and safety. Non-
compliance with environmental or health and safety requirements may also result
in the need to cease or alter operations at a property, which could affect the
financial health of a tenant and its ability to make lease payments.
Furthermore, if there is a violation of such a requirement in connection with a
tenant's operations, it is possible that the Company, as the owner of the
property, could be held accountable by governmental authorities for such
violation and could be required to correct the violation.
The Company typically undertakes an investigation of potential
environmental risks when evaluating an acquisition. Where warranted, Phase I
and/or Phase II assessments are performed by independent environmental
consulting and engineering firms. Phase I assessments do not involve subsurface
testing, whereas Phase II assessments involve some degree of soil and/or
groundwater testing. The Company may acquire a property which is known to have
had a release of Hazardous Materials in the past, subject to a determination of
the level of risk and potential cost of remediation. The Company normally
requires property sellers to fully indemnify it against any environmental
problem existing as of the date of purchase. Additionally, the Company normally
structures its leases to require the tenant to assume all responsibility for
environmental compliance or environmental remediation relating to the tenant's
operations and to provide that non-compliance with environmental laws is deemed
a lease default. In certain instances, the Company may also require a cash
reserve, a letter of credit or a guarantee from the tenant, the tenant's parent
company or a third party to assure lease compliance and funding of remediation.
The value of any of these protections depends on the amount of the collateral
and/or financial strength of the company providing the protection.
Some of the Properties are located in urban and industrial areas where fill
or current or historic industrial uses of the areas may have caused site
contamination at the Properties. In addition, the Company is aware of
environmental conditions at certain of the Properties that require some degree
of remediation. All such environmental conditions are primarily the
responsibility of the respective tenants under their leases. The Company and its
consultants estimate that the aggregate cost of addressing environmental
conditions known to require remediation at the Properties will not exceed $2.0
million, the majority of which is covered by existing letters of credit and
corporate guarantees. The Company believes that its tenants are taking or will
soon be taking all required remedial action with respect to any material
environmental conditions at the Properties. However, the Company could be
responsible for some or all of these costs if one or more of the tenants fails
to perform its obligations or to indemnify the Company. Furthermore, no
assurance can be given that the environmental assessments that have been
conducted at the Properties have disclosed all environmental liabilities, that
any prior owner did not create a material environmental condition not known to
the Company, or that a material condition does not otherwise exist as to any of
the Properties.
THE COMPANY
GENERAL
The Company is a self-administered and self-managed REIT that acquires,
owns and manages predominantly office and industrial properties leased to major
corporations nationwide, including corporate headquarters and strategically
important distribution facilities. The Company believes that operating a
national portfolio of real estate reduces the risk of exposure to economic
downturns in any one market. Within its current national operating strategy,
TriNet's acquisition efforts are focused on markets with growing employment,
increasing real estate occupancy rates and rising rents. As of June 15, 1998,
TriNet owned 127 properties totaling nearly 18 million square feet in 25 states.
TriNet generally seeks to include provisions in its leases that place on
its tenants, to the greatest extent possible, the economic costs of ownership of
its properties (such as real property taxes and assessments, insurance,
operating expenses, responsibility for structural repairs and maintenance, and
the duty to restore or relinquish to TriNet any insurance proceeds or
condemnation awards, in case of casualty or condemnation). In some cases,
TriNet has agreed to retain responsibility for some of these obligations.
7
<PAGE>
The Company also seeks to include in its leases, (i) clauses providing for
periodic rent increases, either fixed or based on an index, such as the All
Urban Consumer Price Index, (ii) change of control and restrictive operating and
financial covenants, (iii) covenants providing that the tenant must indemnify
the Company against environmental and other contingent liabilities (although
such lease provisions may not entirely protect the Company as an owner in the
event of a tenant's inability to satisfy an adverse judgment), (iv) guarantees
from parent companies or other parties, (v) additional security through recourse
to other assets or letters of credit and (vi) cross-default provisions in leases
in multiple property transactions.
The Company was incorporated under the laws of the State of Maryland on
March 4, 1993. The Company's principal executive offices are located at One
Embarcadero Center, 33rd Floor, San Francisco, California 94111, and its
telephone number is (415) 391-4300. The Company also maintains regional offices
in Florida, Pennsylvania and Georgia.
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of any
Redemption Shares, but will acquire Units tendered to the Operating Partnership
for redemption for which it elects to issue Redemption Shares. With each such
acquisition, the Company's interest in the Operating Partnership will increase.
8
<PAGE>
DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation (the "Articles of Incorporation") and Bylaws
(the "Bylaws"), each as amended, as in effect.
GENERAL
Under its Amended and Restated Articles of Incorporation, as amended
("Articles of Incorporation"), the Company has authority to issue 40 million
shares of Common Stock, par value $.01 per share. Under Maryland law,
stockholders generally are not responsible for the corporation's debts or
obligations. At June 15, 1998, there were 24,863,258 shares of Common Stock
issued and outstanding.
TERMS
All shares of Common Stock offered hereby have been duly authorized, and,
upon issuance in exchange for Units, will be fully paid and non-assessable.
Subject to the preferential rights of any other shares or series of stock and to
the provisions of the Company's Articles of Incorporation regarding excess
stock, $.01 par value per share ("Excess Stock"), holders of shares of Common
Stock will be entitled to receive dividends on shares of Common Stock if, as and
when authorized and declared by the Board of Directors of the Company out of
assets legally available therefor and to share ratably in the assets of the
Company legally available for distribution to its stockholders in the event of
its liquidation, dissolution or winding-up after payment of, or adequate
provision for, all known debts and liabilities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, each outstanding share of Common Stock entitles the
holder to one vote on all matters submitted to a vote of stockholders, including
the election of Directors and, except as otherwise required by law or except as
provided with respect to any other class or series of stock, the holders of
Common Stock will possess the exclusive voting power. There is no cumulative
voting in the election of Directors, which means that the holders of a majority
of the outstanding shares of Common Stock can elect all of the Directors then
standing for election, and the holders of the remaining shares of Common Stock
will not be able to elect any Directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for the
first three quarters of each fiscal year containing unaudited financial
information.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, all shares of Common Stock will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.
Pursuant to the Maryland General Corporation Law (the "MGCL"), a
corporation generally cannot dissolve, amend its Articles of Incorporation,
merge, sell all or substantially all of its assets, engage in a share exchange
or engage in similar transactions outside the ordinary course of business unless
approved by the affirmative vote of stockholders holding at least two-thirds of
the shares entitled to vote on the matter unless a lesser percentage (but not
less than a majority of all of the votes to be cast on the matter) is set forth
in the corporation's Articles of Incorporation. The Company's Articles of
Incorporation do not provide for a lesser percentage in such situations.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is Harris Trust &
Savings Bank.
STOCKHOLDER RIGHTS PLAN
On February 25, 1998, the Company and Harris Trust & Savings Bank, as
Rights Agent, entered into a Rights Agreement (the "Stockholder Rights Plan"),
the purpose of which is, among other things, to enable stockholders to receive
fair and equal treatment in the event of any proposed acquisition of the
Company. The Stockholder Rights Plan could make it more difficult for a third
party to acquire, or could discourage a third party from acquiring, the Company
or a large block of the Company's Common Stock.
9
<PAGE>
The following summary description of the Stockholder Rights Plan does not
purport to be complete and is qualified in its entirety by reference to the
Company's Stockholder Rights Plan, which has been previously filed with the
Securities and Exchange Commission as an exhibit to a Registration Statement on
Form 8-A.
In connection with the adoption of the Stockholder Rights Plan, the Board
of Directors of the Company declared a dividend distribution of one preferred
stock purchase right (a "Right") for each outstanding share of Common Stock to
stockholders of record as of the close of business on April 13, 1998. The Rights
currently are not exercisable and are attached to and trade with the outstanding
shares of Common Stock. Under the Stockholder Rights Plan, the Rights become
exercisable for shares of Common Stock if a person becomes an "acquiring person"
by acquiring 15% or more of the issued and outstanding shares of Common Stock.
In the event that a person becomes an "acquiring person," each holder of a Right
(other than the acquiring person, whose Rights become null and void) would be
entitled to acquire such number of shares of the Company's Common Stock having a
value equal to two times the "purchase price" of the Right. If the Company is
(i) acquired in a merger or other business combination transaction or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (other than holders whose Rights have become null and void)
would then be entitled to purchase shares of the acquiring company's common
stock having a value equal to twice the "purchase price" of the Right.
RESTRICTIONS ON TRANSFERS OF COMMON STOCK
RESTRICTIONS ON TRANSFERS
For the Company to qualify as a REIT under the Code, among other things,
not more than 50% in value of its outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year, and such
capital stock must be beneficially owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year (in each case, other than the first such year). To ensure
that the Company remains a qualified REIT, the Articles of Incorporation,
subject to certain exceptions, provide that no holder may own, or be deemed to
own by virtue of the attribution provisions of the Code, more than 9.3% (the
"Ownership Limit") of the Company's capital stock. The Board of Directors may
waive the Ownership Limit if evidence satisfactory to the Board of Directors and
the Company's tax counsel is presented that the changes in ownership will not
then or in the future jeopardize the Company's status as a REIT. Any transfer
of capital stock or any security convertible into capital stock that would
create a direct or indirect ownership of capital stock in excess of the
Ownership Limit or that would result in the disqualification of the Company as a
REIT, including any transfer that results in the capital stock being owned by
fewer than 100 persons or results in the Company being "closely held" within the
meaning of Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights to the capital stock. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors determines that it is no longer in the best interests of the Company
to attempt to qualify, or to continue to qualify, as a REIT.
Capital stock owned, or deemed to be owned, or transferred to a stockholder
in excess of the Ownership Limit will automatically be exchanged for shares of
Excess Stock that will be transferred, by operation of law, to the Company as
trustee of a trust for the exclusive benefit of the transferees to whom such
capital stock may be ultimately transferred without violating the Ownership
Limit. While the Excess Stock is held in trust, it will not be entitled to
vote, it will not be considered for purposes of any stockholder vote or the
determination of a quorum for such vote and, except upon liquidation, it will
not be entitled to participate in dividends or other distributions. Any
dividend or distribution paid to a proposed transferee of Excess Stock prior to
the discovery by the Company that capital stock has been transferred in
violation of the provisions of the Company's Articles of Incorporation shall be
repaid to the Company upon demand. The Excess Stock is not treasury stock, but
rather constitutes a separate class of issued and outstanding stock of the
Company. The original transferee-stockholder may, at any time the Excess Stock
is held by the Company in trust, transfer the interest in the trust representing
the Excess Stock to any individual whose ownership of the capital stock
exchanged into such Excess Stock would be permitted under the Ownership Limit,
at a price not in excess of the price paid by the original transferee-
stockholder for the capital stock that was exchanged in Excess Stock.
Immediately upon the transfer to the permitted transferee, the Excess Stock will
automatically be exchanged for capital stock of the class from which it was
converted. If the foregoing transfer restrictions are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Stock may be deemed, at the option of the
Company, to have acted as an agent on behalf of the Company in acquiring the
Excess Stock and to hold the Excess Stock on behalf of the Company.
10
<PAGE>
In addition to the foregoing transfer restrictions, the Company will have
the right, for a period of 90 days during the time any Excess Stock is held by
the Company in trust, to purchase all or any portion of the Excess Stock from
the original transferee-stockholder for the lesser of the price paid for the
capital stock by the original transferee-stockholder or the market price (as
determined in the manner set forth in the Articles of Incorporation) of the
capital stock on the date the Company exercises its option to purchase. The 90-
day period begins on the date on which the Company receives written notice of
the transfer or other event resulting in the exchange of capital stock for
Excess Stock.
Each stockholder shall upon demand be required to disclose to the Company
in writing any information with respect to the direct, indirect and constructive
ownership of beneficial interests as the Board of Directors deems necessary to
comply with the provisions of the Code applicable to REITs, to comply with the
requirements of any taxing authority or governmental agency or to determine any
such compliance.
This ownership limitation may have the effect of precluding acquisition of
control of the Company unless the Board of Directors determines that maintenance
of REIT status is no longer in the best interests of the Company.
DESCRIPTION OF UNITS AND REDEMPTION OF UNITS
The description of units set forth herein does not purport to be complete
and is subject to and qualified in its entirety by reference to the Partnership
Agreement which is incorporated herein by reference as an exhibit to the
Registration Statement of which this Prospectus is a part.
GENERAL
Unitholders may, subject to certain limitations, require the Operating
Partnership to redeem all or a portion of their Units (the "Redemption Right").
This Redemption Right shall be exercised pursuant to a notice of redemption
delivered to the Company. Upon redemption, a Unitholder will receive for each
Unit redeemed cash in an amount equal to the market value (as defined below) of
a share of Common Stock (subject to certain adjustments described in the
Partnership Agreement including, without limitation, in the event of stock
dividends, stock splits and distributions of options, warrants, convertible
securities, evidences of indebtedness or assets) which cash shall be due and
payable on June 30 if the notice of redemption is received after December 1 of
the prior calendar year and prior to June 1 of the current year or on December
31 if the notice of redemption is received after June 1 of the current year and
prior to December 1 of the current year (June 30 and December 31 are each
referred to herein as a "Cutoff Date"); provided, however, that the Company may,
in its sole discretion, by notice to the Unitholder on or before the close of
business on the Cutoff Date, elect to acquire any Unit presented to the
Operating Partnership for redemption for cash or for one share of Common Stock
(subject to the same adjustments). The market value of the Common Stock for
purposes of redeeming Units will be equal to the average of the closing trading
price, regular way, of the Common Stock for the five trading days prior to the
day on which the redemption notice was received by the Company.
The Company anticipates that it generally will elect to acquire any Units
presented to the Operating Partnership for redemption by the issuance of the
Redemption Shares. Such an acquisition by the Company will be treated as a sale
of the Units to the Company for Federal income tax purposes. See "--Tax
Consequences of Redemption." Upon a redemption for cash, a Unitholder's right
to receive distributions for record dates declared thereafter with respect to
the Units redeemed will cease. Upon the receipt of Redemption Shares, a
Unitholder will have rights as a holder of Common Stock from the time of its
acquisition of the Redemption Shares.
A Unitholder must notify the Company of its desire to require the Company
to redeem Units. A Unitholder must request the redemption of at least 15,000
Units or, if such Unitholder holds less than 15,000 Units, all of the Units held
by such Unitholder. No redemption can occur if the delivery of Redemption
Shares would be prohibited under the provisions of the Company's Articles of
Incorporation to protect the Company's qualification as a REIT.
TAX CONSEQUENCES OF REDEMPTION
The following discussion summarizes certain Federal income tax
considerations that may be relevant to a Unitholder should it exercise its right
to redeem its Units.
11
<PAGE>
Tax Treatment of Exchange or Redemption of Units. If the Company elects to
purchase Units tendered for redemption and such purchase is treated as a sale of
the Units to the Company, it will be fully taxable to the Unitholder and the
Unitholder will be treated as realizing for tax purposes an amount equal to the
sum of the cash value or the value of the Common Stock received in the exchange
plus the amount of any Operating Partnership liabilities allocable to the
redeemed Units at the time of the redemption. The determination of the amount
of gain or loss is discussed more fully below. If the Company does not elect to
purchase a Unitholder's Units tendered for redemption, and the Operating
Partnership redeems such Units for cash that the Company contributes to the
Operating Partnership to effect such redemption, the redemption likely also
would be treated for tax purposes as a sale of such Units to the Company in a
fully taxable transaction, although the matter is not free from doubt. In that
event, the Unitholder would be treated as realizing an amount equal to the sum
of the cash received in the exchange plus the amount of any Operating
Partnership liabilities allocable to the redeemed Units at the time of the
redemption. The determination of the amount and character of gain or loss in
the event of such a sale is discussed more fully below. See "--Tax Treatment of
Disposition of Units by a Limited Partner Generally."
If the Company does not elect to purchase Units tendered for redemption,
and the Operating Partnership redeems a Unitholder's Units for cash that is not
contributed by the Company to effect the redemption, the tax consequences would
be the same as described in the previous paragraph, except that, if the
Operating Partnership redeems less than all of a Unitholder's Units, the
Unitholder would not be permitted to recognize any loss occurring on the
transaction and would recognize taxable gain only to the extent that the cash,
plus the amount of any Operating Partnership liabilities allocable to the
redeemed Units, exceeded the Unitholder's adjusted basis in all of its Units
immediately before the redemption. The same tax consequences would result if
the Company contributed cash to the Operating Partnership to effect a
redemption, and the redemption transaction were treated as the redemption of a
Unitholder's Units by the Operating Partnership rather than a sale of Units to
the Company.
Tax Treatment of Disposition of Units by a Limited Partner Generally. If a
Unit is disposed of in a manner that is treated as a sale of the Unit, or a
limited partner otherwise disposes of a Unit other than in a transaction that is
treated as a redemption of the Unit, the determination of gain or loss from the
sale or other disposition will be based on the difference between the amount
considered realized for tax purposes and the adjusted tax basis in such Unit.
See "--Basis of Units." Upon the sale of a Unit, the "amount realized" will be
measured by the sum of the cash and fair market value of other property (e.g.,
Redemption Shares) received plus the amount of any Operating Partnership
liabilities allocable to the Units sold. To the extent that the amount of cash
or property received plus the allocable share of any Operating Partnership
liabilities exceeds the limited partner's adjusted tax basis in the Units
disposed of, such limited partner will recognize gain. It is possible that the
amount of gain recognized or even the tax liability resulting from such gain
could exceed the amount of cash and/or the value of any other property (i.e.,
Redemption Shares) received upon such disposition.
Except as described below, any gain recognized upon a sale or other
disposition of Units will be treated as gain attributable to the sale or
disposition of a capital asset. To the extent, however, that the amount
realized upon the sale of a Unit attributable to a limited partner's share of
"unrealized receivables" of the Operating Partnership (as defined in Section 751
of the Code) exceeds the basis attributed to those assets, such excess will be
treated as ordinary income. Unrealized receivables include, to the extent not
previously included in Operating Partnership income, any rights to payment for
services rendered or to be rendered. Unrealized receivables also include
amounts that would be subject to recapture as ordinary income if the Operating
Partnership had sold its assets at their fair market value at the time of the
transfer of a Unit.
Basis of Units. In general, a limited partner who acquired his Units by
contribution of property and/or money to the Operating Partnership had an
initial tax basis in his Units ("Initial Basis") equal to the sum of (i) the
amount of money contributed (including the limited partner's allocable share of
liabilities of the Operating Partnership) and (ii) the limited partner's
adjusted tax basis in any other property contributed in exchange for such Units,
and less the amount of any money distributed (and liabilities of the limited
partner assumed by the Operating Partnership) in connection with the acquisition
of the Units. The Initial Basis of Units acquired by other means would have
been determined under the general rules of the Code, including the partnership
provisions, governing the determination of tax basis. Other rules, including
the "disguised sale" rules discussed below, also may affect Initial Basis, and
Unitholders are urged to consult their own tax advisors regarding their Initial
Basis. Generally, a limited partner's Initial Tax Basis in his Units is
increased by (i) such limited partner's share of Operating Partnership taxable
and tax-exempt income and (ii) increases in such limited partner's allocable
share of liabilities of the Operating Partnership. Conversely, a limited
partner's basis in his Units is decreased (but not below zero) by (A) such
limited partner's share of Operating Partnership distributions, (B) decreases in
such limited partner's allocable share of liabilities of the Operating
Partnership, (C) such limited partner's share of losses of the Operating
12
<PAGE>
Partnership and (D) such limited partner's share of nondeductible expenditures
of the Operating Partnership that are not chargeable to his capital account.
Potential Application of the Disguised Sale Regulations to a Redemption of
Units. There is a risk that a redemption by the Operating Partnership of Units
issued in exchange for a contribution of property to the Operating Partnership
may cause the original transfer of property to the Operating Partnership in
exchange for Units to be treated as a "disguised sale" of property. Section 707
of the Code and the Treasury Regulations thereunder (the "Disguised Sale
Regulations") generally provide that, unless one of the prescribed exceptions is
applicable, a partner's contribution of property to a partnership and a
simultaneous or subsequent transfer of money or other consideration (which may
include the assumption of or taking subject to a liability) from the partnership
to the partner will be presumed to be a sale, in whole or in part, of such
property by the partner to the partnership. Further, the Disguised Sale
Regulations provide generally that, in the absence of an applicable exception,
if money or other consideration is transferred by a partnership to a partner
within two years of the partner's contribution of property, the transactions are
presumed to be a sale of the contributed property unless the facts and
circumstances clearly establish that the transfers do not constitute a sale. In
addition, the Disguised Sale Regulations require that any such transfer of money
or other consideration within the two year period be reported to the IRS. The
Disguised Sale Regulations also provide that if two years have passed between
the transfer of money or other consideration and the contribution of property,
the transactions will be presumed not to be a sale unless the facts and
circumstances clearly establish that the transfers constitute a sale.
Accordingly, if a Unit is redeemed by the Operating Partnership for a
Unitholder who holds Units that were issued in exchange for a contribution of
property to the Operating Partnership, the Internal Revenue Service (the "IRS")
could contend that the Disguised Sale Regulations apply because the Unitholder
will thus receive cash subsequent to a previous contribution of property to the
Operating Partnership. In that event, the IRS could contend that the
contribution was taxable as a disguised sale under the Disguised Sale
Regulations. Any gain recognized thereby may be eligible for installment
reporting under Section 453 of the Code, subject to certain limitations. In
addition, in such event, the Disguised Sale Regulations might apply to cause a
portion of the proceeds received by a redeeming Unitholder to be characterized
as original issue discount on a deferred obligation which would be taxable as
interest income in accordance with the provisions of Section 1272 of the Code.
Each Unitholder is advised to consult its own tax advisors to determine whether
redemption of its Units could be subject to the Disguised Sale Regulations.
COMPARISON OF OWNERSHIP OF UNITS AND COMMON STOCK
The nature of an investment in Common Stock of the Company is generally
economically equivalent to an investment in Units in the Operating Partnership.
There are, however, some differences between ownership of Units and ownership of
Common Stock, some of which may be material to investors. The information below
highlights a number of significant differences between the Operating Partnership
and the Company relating to, among other things, form of organization, permitted
investments, policies and restrictions, management structure, compensation and
fees, investor rights and Federal income taxation and compares certain legal
rights associated with the ownership of Units and Common Stock, respectively.
These comparisons are intended to assist Unitholders in understanding how their
investment will be changed if their Units are acquired for Common Stock. This
discussion is summary in nature and does not constitute a complete discussion of
these matters, and investors should carefully review the balance of this
Prospectus and the registration statement of which this Prospectus is a part for
additional important information about the Company.
Form of Organization and Assets Owned. The Operating Partnership is
organized as a Delaware limited partnership. Some of the Company's operations
are conducted through the Operating Partnership.
The Company is organized as a corporation under the laws of the State of
Maryland. The Company maintains a general partner interest in the Operating
Partnership, which gives the Company an indirect investment in the Properties
and other assets owned by the Operating Partnership. Subject to the Original
Partners' 9% preferred return, as defined in the Partnership Agreement, the
Company currently has a 99% economic interest in the Operating Partnership, and
such interest will increase as Units are redeemed for cash or acquired by the
Company.
Length of Investment. The Operating Partnership has a stated termination
date of December 31, 2050, although it may be terminated earlier under certain
circumstances. The Company has a perpetual term and intends to continue its
operations for an indefinite time period.
13
<PAGE>
Purchase and Permitted Investments. The purpose of the Operating
Partnership includes the conduct of any business that may be lawfully conducted
by a limited partnership formed under Delaware law, except that the Partnership
Agreement requires the business of the Operating Partnership to be conducted in
such a manner that will permit the Company to be classified as a REIT for
Federal income tax purposes. The Operating Partnership may, subject to the
foregoing limitation, invest or enter into partnerships, joint ventures or
similar arrangements and may own interests in any other entity.
Under its Articles of Incorporation, the Company may engage in any lawful
activity permitted under the MGCL. However, under the Partnership Agreement,
the Company, as the general partner of the Operating Partnership, may not,
directly or indirectly, enter into or conduct any business other than in
connection with the ownership, acquisition and disposition of interests in the
Operating Partnership or the management of the business thereof.
Additional Equity. The Operating Partnership is authorized to issue Units
and other partnership interests to its partners or to other persons for such
consideration and on such terms and conditions as the Company, as general
partner, in its sole discretion, may deem appropriate after giving notice to the
Limited Partners of the need for such additional funds and the anticipated
source(s) thereof.
The Board of Directors of the Company may authorize the issuance of shares
of capital stock of any class, whether now or hereafter authorized, or
securities or rights, convertible into shares of capital stock, for such
consideration as the Board of Directors may deem advisable, subject to such
restrictions or limitations as may be set forth in the Company's Bylaws.
Borrowing Policies. The Company, as general partner, has full power and
authority to borrow money on behalf of the Operating Partnership subject to
certain restrictions contained in the Partnership Agreement. First, the Company
may not allow the Operating Partnership to incur any obligation under which a
transfer of a Limited Partner's interest would constitute default, breach or
violation. Second, the Company may not allow the Operating Partnership to incur
any debt secured by certain properties contributed to the Operating Partnership
by the Limited Partners unless such debt meets certain limitations set forth in
the Partnership Agreement.
The Company is not restricted under its governing instruments from
incurring borrowings.
Other Investment Restrictions. Other than restrictions precluding
investments by the Operating Partnership that would adversely affect the
qualification of the Company as a REIT, there are no restrictions upon the
Operating Partnership's authority to enter into certain transactions, including,
among others, making investments, or reinvesting the Operating Partnership's
cash flow and net sale or refinancing proceeds.
Neither the Company's Articles of Incorporation nor its Bylaws impose any
restrictions upon the types of investments that may be made by the Company.
Management Control. All management powers over the business and affairs of
the Operating Partnership are vested in the Company, as general partner, and no
limited partner of the Operating Partnership has any right to participate in or
exercise control or management power over the business and affairs of the
Operating Partnership. The Company may not be removed as general partner by the
limited partners with or without cause.
The Board of Directors has exclusive control over the Company's business
and affairs subject only to the restrictions in the Articles of Incorporation
and the Bylaws. The Board of Directors is classified into three classes. At
each annual meeting of the stockholders, the successors of the class of
directors whose terms expire at that meeting will be elected. The policies
adopted by the Board of Directors may be altered or eliminated without advice of
the stockholders. Accordingly, except for their vote in the elections of
directors, stockholders have no control over the ordinary business policies of
the Company.
Management Liability and Indemnification. The Partnership Agreement
generally provides that the Company, as general partner, will incur no liability
to the Operating Partnership or any limited partner for losses sustained or
liabilities incurred as a result of errors in judgment or of any act or omission
if the Company acted in good faith. In addition, the Company is not responsible
for any misconduct or negligence on the part of its agents provided the Company
appointed such agents in good faith. The Company may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers and
other consultants and advisors, and any action it takes or omits to take in
reliance upon the opinion of such persons, as to matters which the Company
reasonably believes to be within their professional or expert competence, shall
be conclusively presumed to have been done or omitted in good
14
<PAGE>
faith and in accordance with such opinion. The Partnership Agreement also
provides for indemnification of the Company, its Directors and its officers, and
such other persons as the Company may from time to time designate, against any
and all losses, claims, damages, liabilities, expenses, judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings that relate to the operations of the Operating Partnership
in which such person may be involved.
The Company's Articles of Incorporation and Bylaws provide certain
limitations on the liability of the Company's Directors and officers for
monetary damages to the Company. The Articles of Incorporation and the Bylaws
obligate the Company to indemnify its Directors and officers, and permit the
Company to indemnify its employees and other agents, against certain liabilities
incurred in connection with their service in such capacities. These provisions
could reduce the legal remedies available to the Company and the stockholders
against these individuals.
The Company's Bylaws require it to indemnify its officers, Directors and
certain other parties to the fullest extent permitted from time to time by
Maryland law. The MGCL permits a corporation to indemnify (a) any present or
former Director or officer who has been successful, on the merits or otherwise,
in the defense of a proceeding to which he was made a party by reason of his
service in that capacity, against reasonable expenses incurred by him in
connection with the proceeding and (b) any present or former Director or officer
against any claim or liability unless it is established that (i) his act or
omission was committed in bad faith or was the result of active or deliberate
dishonesty, (ii) he actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding, he had
reasonable cause to believe that his act or omission was unlawful. The MGCL
also permits the Company to provide indemnification and advance expenses to a
present or former Director or officer who served a predecessor of the Company in
such capacity, and to any employer or agent of the Company or a predecessor of
the Company.
The Company has entered into an indemnification agreement with each of
Directors who are not officers of the Company (the "Independent Directors").
The indemnification agreements require, among other things, that the Company
indemnify its Independent Directors to the fullest extent permitted by law and
advance to the Independent Directors all related expenses, subject to
reimbursement if it is subsequently determined that indemnification is not
permitted. Under these agreements, the Company must also indemnify and advance
all expenses incurred by the Independent Directors seeking to enforce their
rights under the indemnification agreements and may cover officers and Directors
under the Company's Directors' and officers' liability insurance. Although the
form of indemnification agreement offers substantially the same scope of
coverage afforded by law, it provides additional assurance to the Independent
Directors and officers that indemnification will be available because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or the stockholders to eliminate the rights it provides. It is the
position of the SEC that indemnification of directors and officers for
liabilities under the Securities Act is against public policy and unenforceable
pursuant to Section 14 of the Securities Act.
Anti-takeover Provisions. Except in limited circumstances, the Company, as
general partner, has exclusive management power over the business and affairs of
the Operating Partnership. The Company may not be removed as general partner by
the limited partners with or without cause.
The Articles of Incorporation and Bylaws of the Company and Maryland law
contain a number of provisions that may have the effect of delaying or
discouraging an unsolicited proposal for the acquisition of the Company or the
removal of incumbent management.
The Company has a Stockholder Rights Plan which is described above. See
"Description of Common Stock - Stockholder Rights Plan."
Voting Rights. Under the Partnership Agreement, the limited partners do
not have voting rights relating to the operation and management of the Operating
Partnership except in connection with matters, as described more fully below,
involving certain amendments to the Partnership Agreement, any employment
agreement, certain related party transactions, a general assignment for the
benefits of creditors or appointment of a custodian, receiver or trustee,
entering any proceedings for bankruptcy, admittance of any successor general
partner, or dissolution of the Operating Partnership and the sale or exchange of
all or substantially all of the Operating Partnership's assets, including
mergers or other combinations.
Stockholders of the Company have the right to vote, among other things, on
a merger or sale of substantially all of the assets of the Company, certain
amendments to the Articles of Incorporation and dissolution of the Company. The
Company is managed and controlled by a Board of Directors consisting of three
classes having staggered terms of office. Each class is to be elected by the
stockholders of the Company at their annual meetings. Each share of Common
Stock has one vote, and the Articles of
15
<PAGE>
Incorporation permit the Board of Directors to classify and issue Preferred
Stock in one or more series having voting power which may differ from that of
the Common Stock.
Amendment of the Partnership Agreement or the Company's Articles of
Incorporation. Amendments to the Partnership Agreement may be proposed by the
Company, as general partner, or a majority in interest of the limited partners
and generally require approval of partners (including the Company) holding a
majority of the outstanding partnership interests. Certain amendments that
would, among other things, convert a limited partner's interest into a general
partner's interest, modify the limited liability of any limited partner, alter
the interest of any limited partner in profits, losses or distributions, alter
or modify the redemption right described herein, or cause the termination of the
Operating Partnership at a time inconsistent with the terms of the Partnership
Agreement must be approved by each limited partner that would be adversely
affected by any such amendment.
Amendments to the Company's Articles of Incorporation must be approved by
affirmative vote of the holders of not less than two-thirds of all votes
entitled to be cast on the matter.
Vote Required to Dissolve the Operating Partnership or the Company. Under
Delaware law, the Operating Partnership may be dissolved, other than in
accordance with the terms of the Partnership Agreement, only upon the unanimous
vote of the limited partners. Under Maryland law, the Board of Directors must
obtain the approval of holders of not less than two-thirds of all outstanding
shares of capital stock of the Company in order to dissolve the Company.
Vote Required to Sell Assets or Merge. Under the Partnership Agreement,
except in certain circumstances, the Operating Partnership may not sell,
exchange, transfer or otherwise dispose of all or substantially all of its
assets, including by way of merger or consolidation or other combination of the
Operating Partnership, prior to June 26, 1998 without the consent of certain
limited partners.
Under Maryland law and the Company's Articles of Incorporation, the sale of
all or substantially all of the assets of the Company or any merger or
consolidation of the Company requires the approval of the Board of Directors and
the affirmative vote of two-thirds of all the votes entitled to be cast on the
matter. No approval of the stockholders is required for the sale of less than
all or substantially all of the Company's assets.
Compensation, Fees and Distributions. The Company receives a management
fee equal to 2% of all receipts of the Operating Partnership attributable to the
Contributed Property for its services as general partner of the Operating
Partnership and is reimbursed for all expenses incurred relating to the
ownership and operation of, or for the benefit of, the Operating Partnership.
As a holder of Preferred Partnership Units in the Operating Partnership,
however, the Company is also a Unitholder and has the same right to allocations
and distributions as other Unitholders of the Operating Partnership. In
addition, after distribution to the Unitholders (including the Company), the
Company and has the right to receive 99% of the balance. The remaining 1% is
distributed to the Unitholders (including the Company) in proportion to their
respective Units.
The Directors and officers of the Company receive compensation for their
services.
Liability of Investors. Under the Partnership Agreement and applicable
Delaware law, the liability of the limited partners for the Operating
Partnership's debts and obligations is generally limited to the amount of their
investment in the Operating Partnership.
Under the MGCL, stockholders generally are not personally liable for the
debts or obligations of the Company. See "Description of Capital Stock--
General."
Nature of Investment. The Units constitute equity interests entitling
holders thereof to their pro rata share of cash distributions made to the
limited partners of the Operating Partnership. The Company is entitled to
receive its pro rata share of distributions made by the Operating Partnership
with respect to its Units in the Operating Partnership.
Shares of Common Stock constitute equity interests in the Company. Each
stockholder will be entitled to his pro rata share of any dividends or
distributions paid with respect to Common Stock. The dividends payable to the
stockholders are not fixed in amount and are paid only if, when and as declared
by the Board of Directors. In order to qualify as a REIT, the Company must
distribute at least 95% of its taxable income (excluding capital gains), and any
taxable income (including capital gains) not distributed will be subject to
corporate income tax.
16
<PAGE>
Potential Dilution of Rights. The Company, as general partner, is
authorized, in its sole discretion and without limited partner approval, to
cause the Operating Partnership to issue additional limited partnership
interests and other equity securities for any partnership purpose at any time to
the limited partners or to other persons on terms established by the Company.
The Board of Directors of the Company may issue, in its discretion,
additional shares of Common Stock and has the authority to issue from the
authorized capital stock a variety of other equity securities of the Company
with such powers, preferences and rights as the Board of Directors may designate
at the time. The issuance of additional shares of Common Stock or other similar
equity securities may result in the dilution of interests of the stockholders.
Liquidity. Subject to certain exceptions, no Limited Partner may transfer
any portion of its Units to any transferee without the consent of the Company,
as general partner of the Operating Partnership, in its sole and absolute
discretion. If the Company does not consent to the admission of a transferee as
a substituted limited partner, the transferee shall be considered an assignee of
an economic interest in the Operating Partnership but will not be a holder of
Units for any other purpose; accordingly, the assignee will not be permitted to
vote on any affairs or issues on which a limited partner may vote.
The Common Stock is listed on the NYSE. The breadth and strength of this
market will depend, among other things, upon the number of shares outstanding,
the Company's financial results and prospects, the general interest in the
Company's real estate investments and the Company's dividend yield compared to
that of other debt and equity securities.
FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to continue
to operate, in such manner as to qualify as a REIT under the Code, but no
assurance can be given that it will at all times so qualify.
The provisions of the Code pertaining to REITs are highly technical and
complex. The following is a brief and general summary of certain provisions
that currently govern the federal income tax treatment of the Company and its
stockholders. For the particular provisions that govern the federal income tax
treatment of the Company and its stockholders, reference is made to Sections 856
through 860 of the Code and the regulations thereunder. The following summary
is qualified in its entirety by such reference.
Under the Code, if certain requirements are met in a taxable year, a REIT
generally will not be subject to federal income tax with respect to income that
it distributes to its stockholders. If the Company fails to qualify during any
taxable year as a REIT, unless certain relief provisions are available, it will
be subject to tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates, which could have a material adverse
effect upon its stockholders.
To qualify as a REIT, the Company must comply with a number of annual
requirements regarding its income, assets and distributions. These requirements
impose a number of restrictions on the Company's operations. For example, the
Company may not lease property if the lease has the effect of giving the Company
a share of the net income of the lessee. The amount of personal property that
may be included under a lease may not exceed a defined level, and the Company
may not provide services to its tenants, other than customary services and de
minimis non-customary services. The Company's ability to acquire non-real
estate assets is restricted, and a 100% tax is imposed on any gain that the
Company realizes from sales of property (including real estate) to customers in
the ordinary course of business (other than property acquired by reason of
certain foreclosures), effectively preventing the Company from participating
directly in projects involving the development or acquisition of property for
resale. Minimum distribution requirements also generally require the Company to
distribute at least 95% of its taxable income each year (excluding any net
capital gain).
In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its stockholders out of current or accumulated earnings
and profits will be taxed to stockholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain, mid-term capital gain or
unrecaptured Section 1250 gain to the stockholders. To the extent that
distributions exceed current or accumulated earnings and profits, they will
constitute a return of capital, rather than dividend or capital gain income, and
will reduce the basis for the stockholder's Common Stock with respect to which
the distribution is paid or, to the extent that they exceed such basis, will be
taxed in the same manner as gain from the sale of such Common Stock.
17
<PAGE>
Unitholders are urged to consult their own tax advisors with respect to the
appropriateness of an investment in the Redemption Shares offered hereby and
with respect to the tax consequences arising under federal law and the laws of
any state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax consequences
of an investment in the Company, including the possibility of United States
income tax withholding on Company distributions.
PLAN OF DISTRIBUTION
The Company will not receive any proceeds from the issuance of any
Redemption Shares, but will acquire Units tendered to the Operating Partnership
for redemption for which it elects to issue Redemption Shares from time to time.
The shares of Common Stock offered hereby may be sold from time to time on the
NYSE on terms to be determined at the time of such sales.
The Company will pay substantially all of the expenses incident to the
Offering.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Goodwin,
Procter & Hoar LLP, Boston, Massachusetts.
EXPERTS
The financial statements and schedule thereto incorporated by reference in
this Prospectus or elsewhere in the Registration Statement, to the extent and
for the periods indicated in their reports, have been incorporated herein in
reliance on the reports of Coopers & Lybrand L.L.P., independent accountants,
given on authority of that firm as experts in accounting and auditing.
18
<PAGE>
======================================= =====================================
No person has been authorized in
connection with the offering made
hereby to give any information or to
make any representation not contained 258,894 SHARES
in this Prospectus and, if given or
made, such information or
representation must not be relied upon
as having been authorized by the TRINET CORPORATE REALTY
Company or any other person. This TRUST, INC.
Prospectus does not constitute an offer
to sell or a solicitation of an offer
to buy any of the Securities offered
hereby to any person or by anyone in
any jurisdiction in which it is
unlawful to make such offer or
solicitation. Neither the delivery of
this Prospectus nor any sale made
hereunder shall, under any
circumstances, create any implication
that the information contained herein
is correct as of any date subsequent to
the date hereof.
---------------------
TABLE OF CONTENTS
PAGE
----
Available Information............ 2 COMMON STOCK
Incorporation of Certain ---------------------
Documents by Reference......... 2
PROSPECTUS
Risk Factors..................... 4
---------------------
The Company...................... 7
Use of Proceeds.................. 8
Description of Common Stock...... 9
Restrictions on Transfers of
Common Stock.................... 10
Description of Units and
Redemption Of Units............. 11
Federal Income Tax
Considerations.................. 17
Plan of Distribution............. 18
Legal Matters.................... 18 JUNE 23, 1998
Experts.......................... 18
======================================= ======================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered will be borne by the Company and are set forth in
the following table (all amounts except the registration fee are estimated):
Registration fee $ 2,612
Legal fees and expenses 25,000
Printing fees and expenses 500
Miscellaneous 5,000
-------
TOTAL $33,112
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation and Bylaws, each as amended, provide
certain limitations on the liability of the Company's Directors and officers for
monetary damages to the Company. The Articles of Incorporation and Bylaws
obligate the Company to indemnify its Directors and officers, and permit the
Company to indemnify its employees and other agents, against certain liabilities
incurred in connection with their service in such capacities. The Company has
also entered into an indemnification agreement with each of the members of the
Board of Directors who are not officers of the Company (the "Independent
Directors"), pursuant to which the Company has agreed to indemnify the
Independent Directors against certain liabilities incurred in connection with
their service as Directors. These provisions and contracts could reduce the
legal remedies available to the Company and its stockholders against these
individuals.
The Maryland General Corporation Law generally permits the liability of
Directors and officers to a corporation or its stockholders for money damages to
be limited, unless it is proved that (i)(a) the Director or officer actually
received an improper personal benefit in money, property or services, (b) the
Director of officer acted in bad faith, or (c) the Director's or officer's act
or omission was the result of active and deliberate dishonesty, and (ii) the
Director's or officer's act or omission was material to the matter giving rise
to the proceeding. However, if the proceeding was one by or in the right of the
Company, indemnification may not be made in respect of any proceeding in which
the Director or officer shall have been adjudged to be liable to the Company.
These provisions do not limit the ability of the Company or its stockholders to
obtain other relief, such as an injunction or rescission.
ITEM 16. EXHIBITS.
- ---------------
EXHIBIT NO. DESCRIPTION
4.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1(i) of the Registration Statement on Form
S-11 of TriNet Corporate Realty Trust, Inc., Registration No. 33-
59836), as amended by (i) Articles Supplementary Establishing and
Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock (Series A Preferred Stock) (incorporated by
reference to Exhibit 1 of Form 8-A/A of TriNet Corporate Realty
Trust, Inc., dated June 26, 1996, filed with the Securities and
Exchange Commission on June 28, 1996), (ii) Articles
Supplementary Establishing and Fixing the Rights and Preferences
of a Series of Shares of Preferred Stock (Series B Preferred
Stock) (incorporated by reference to Exhibit 1 of Form 8-A/A of
TriNet Corporate Realty Trust, Inc., dated August 9, 1996, filed
with the Securities and Exchange Commission on August 12, 1996);
(iii) Articles Supplementary Establishing and Fixing the Rights
and Preferences of a Series of Shares of Preferred Stock (Series
C Preferred Stock) (incorporated by reference to Exhibit 1 of
Form 8-A of TriNet Corporate Realty Trust, Inc., dated October 3,
1997, filed with the Securities and Exchange Commission on
October 14, 1997); and (iv) Articles Supplementary Establishing
and Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock (Series
II-1
<PAGE>
D Junior Participating Preferred Stock) (incorporated by
reference to Exhibit 1 of Form 8-A of TriNet Corporate Realty
Trust, Inc., dated as of February 25, 1998, filed with the
Securities and Exchange Commission on March 13, 1998).
4.2 Amended and Restated Bylaws. (Incorporated by reference to
Exhibit 3.1(ii) of the Registration Statement on Form S-11 of
TriNet Corporate Realty Trust, Inc., Registration No. 33-59836).
4.3 Definitive Indenture, dated as of May 22, 1996. (Incorporated by
reference to Exhibit 4.2 to the Current Report on Form 8-K, dated
June 14, 1996 of TriNet Corporate Realty Trust, Inc.)
4.4 Definitive Supplemental Indenture No. 1, dated as of May 22,
1996, relating to the 7.30% Notes due 2001 and the 7.95% Notes
due 2006. (Incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K, dated June 14, 1996 of TriNet
Corporate Realty Trust, Inc.)
4.5 Definitive Supplemental Indenture No. 2, dated as of July 14,
1997, relating to the 7.70% Notes due 2017 and including the form
of the 7.70% Notes due 2006. (Incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8-K, dated July 9, 1997
of TriNet Corporate Realty Trust, Inc.)
4.6 TriNet Corporate Realty Trust, Inc. Amended and Restated 1993
Stock Incentive Plan. (Incorporated by reference to Exhibit 10.24
to the Registration Statement on Form S-11, of TriNet Corporate
Realty Trust, Inc., Registration No. 33-59836.)
4.7 TriNet Corporate Realty Trust, Inc. 1995 Stock Incentive Plan.
(Incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-8, of TriNet Corporate Realty Trust Inc.,
Registration No. 33-02222.)
4.8 TriNet Corporate Realty Trust, Inc. 1997 Stock Incentive Plan,
including the description of Management Stock Purchase Program of
TriNet Corporate Realty Trust, Inc. and the description of
Dividend Equivalent Rights Program of TriNet Corporate Realty
Trust, Inc.
4.9 TriNet Corporate Realty Trust, Inc. 1993 - 1994 Performance Based
Management Incentive Plan. (Incorporated by reference to Exhibit
10.49 to the Registration Statement on Form S-11, of TriNet
Corporate Realty Trust, Inc., Registration No. 33-74284.)
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Common Stock being registered.
*8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
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. (Incorporated by reference to Exhibit 10.1
of Form 8-K of TriNet Corporate Realty Trust, Inc. and dated July
3, 1996, filed with the Securities and Exchange Commission on
July 17, 1996 and as amended by Form 8-K/A of TriNet Corporate
Realty Trust, Inc., dated July 3, 1996, filed with the Securities
and Exchange Commission on August 7, 1996.)
*23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibits 5.1
and 8.1 hereto).
24.1 Powers of Attorney (included in Part II of this Registration
Statement).
______________________
*filed herewith
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement, to
include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934, as amended, that is incorporated
by reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under
Item 15 above, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
TriNet Corporate Realty Trust, Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco,
California, on the 23rd day of June, 1998.
TriNet Corporate Realty Trust, Inc.
By: /s/ A. William Stein
---------------------------------
A. William Stein
Executive Vice President and
Chief Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of TriNet Corporate Realty Trust, Inc. hereby severally constitute
Robert W. Holman, Jr., Mark S. Whiting and A. William Stein, and each of them
singly, our true and lawful attorneys with full power to them, and each of them
singly, to sign for us and in our names in the capacities indicated below, the
Registration Statement filed herewith, a registration statement on Form S-3 that
may subsequently be filed pursuant to Rule 462(b) of the Securities Act of 1933,
as amended, and that would incorporate by reference this Registration Statement,
and any and all amendments to either of said registration statements, and
generally to do all such things in our names and in our capacities as officers
and directors to enable TriNet Corporate Realty Trust, Inc. to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Robert W. Holman, Jr. Chairman of the Board June 23, 1998
- ----------------------------- of Directors
Robert W. Holman, Jr.
/s/ George R. Puskar Director June 23, 1998
- -----------------------------
George R. Puskar
/s/ Willis Anderson, Jr. Director June 23, 1998
- -----------------------------
Willis Andersen, Jr.
/s/ John G. McDonald Director June 23, 1998
- -----------------------------
John G. McDonald
/s/ Robert S. Morris Director June 23, 1998
- -----------------------------
Robert S. Morris
/s/ Stephen B. Oresman Director June 23, 1998
- -----------------------------
Stephen B. Oresman
/s/ Mark S. Whiting President, Chief Executive June 23, 1998
- ----------------------------- Officer and Director
Mark S. Whiting (Principal Executive
Officer)
/s/ A. William Stein Executive Vice President June 23, 1998
- ----------------------------- (Principal Financial and
A. William Stein Accounting Officer)
II-4
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
4.1 Amended and Restated Articles of Incorporation (incorporated by
reference to Exhibit 3.1(i) of the Registration Statement on Form
S-11 of TriNet Corporate Realty Trust, Inc., Registration No. 33-
59836), as amended by (i) Articles Supplementary Establishing and
Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock (Series A Preferred Stock) (incorporated by
reference to Exhibit 1 of Form 8-A/A of TriNet Corporate Realty
Trust, Inc., dated June 26, 1996, filed with the Securities and
Exchange Commission on June 28, 1996), (ii) Articles
Supplementary Establishing and Fixing the Rights and Preferences
of a Series of Shares of Preferred Stock (Series B Preferred
Stock) (incorporated by reference to Exhibit 1 of Form 8-A/A of
TriNet Corporate Realty Trust, Inc., dated August 9, 1996, filed
with the Securities and Exchange Commission on August 12, 1996);
(iii) Articles Supplementary Establishing and Fixing the Rights
and Preferences of a Series of Shares of Preferred Stock (Series
C Preferred Stock) (incorporated by reference to Exhibit 1 of
Form 8-A of TriNet Corporate Realty Trust, Inc., dated October 3,
1997, filed with the Securities and Exchange Commission on
October 14, 1997); and (iv) Articles Supplementary Establishing
and Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock (Series D Junior Participating Preferred Stock)
(incorporated by reference to Exhibit 1 of Form 8-A of TriNet
Corporate Realty Trust, Inc., dated February 25, 1998, filed with
the Securities and Exchange Commission on March 13, 1998).
4.2 Amended and Restated Bylaws (incorporated by reference to Exhibit
3.1(ii) of the Registration Statement on Form S-11 of TriNet
Corporate Realty Trust, Inc., Registration No. 33-59836).
4.3 Definitive Indenture, dated as of May 22, 1996. (Incorporated by
reference to Exhibit 4.2 to the Current Report on Form 8-K, dated
June 14, 1996 of TriNet Corporate Realty Trust, Inc.)
4.4 Definitive Supplemental Indenture No. 1, dated as of May 22,
1996, relating to the 7.30% Notes due 2001 and the 7.95% Notes
due 2006. (Incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K, dated June 14, 1996 of TriNet
Corporate Realty Trust, Inc.)
4.5 Definitive Supplemental Indenture No. 2, dated as of July 14,
1997, relating to the 7.70% Notes due 2017 and including the form
of the 7.70% Notes due 2006. (Incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8-K, dated July 9, 1997
of TriNet Corporate Realty Trust, Inc.)
4.6 TriNet Corporate Realty Trust, Inc. Amended and Restated 1993
Stock Incentive Plan. (Incorporated by reference to Exhibit 10.24
to the Registration Statement on Form S-11, of TriNet Corporate
Realty Trust, Inc., Registration No. 33-59836.)
4.7 TriNet Corporate Realty Trust, Inc. 1995 Stock Incentive Plan.
(Incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-8, of TriNet Corporate Realty Trust Inc.,
Registration No. 33-02222.)
4.8 TriNet Corporate Realty Trust, Inc. 1997 Stock Incentive Plan,
including the description of Management Stock Purchase Program of
TriNet Corporate Realty Trust, Inc. and the description of
Dividend Equivalent Rights Program of TriNet Corporate Realty
Trust, Inc.
4.9 TriNet Corporate Realty Trust, Inc. 1993 - 1994 Performance Based
Management Incentive Plan. (Incorporated by reference to Exhibit
10.49 to the Registration Statement on Form S-11, of TriNet
Corporate Realty Trust, Inc., Registration No. 33-74284.)
*5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Common Stock being registered.
*8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax matters.
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. (Incorporated by reference to Exhibit 10.1
of Form 8-K of TriNet Corporate Realty Trust, Inc. and dated July
3, 1996, filed with the Securities and Exchange Commission on
July 17, 1996 and as amended by Form 8-K/A of TriNet Corporate
Realty Trust, Inc., dated July 3, 1996, filed with the Securities
and Exchange Commission on August 7, 1996.)
<PAGE>
*23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibits 5.1
and 8.1 hereto).
24.1 Powers of Attorney (included in Part II of this Registration
Statement).
- -----------------
*filed herewith
<PAGE>
Exhibit 5.1
[Goodwin, Procter & Hoar LLP Letterhead]
June 23, 1997
TriNet Corporate Realty Trust, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, CA 94111
Ladies and Gentlemen:
Re: Legality of Securities to be Registered under
Registration Statement on Form S-3
----------------------------------
This opinion is delivered in our capacity as counsel to TriNet Corporate
Realty Trust, Inc. (the "Company") in connection with the Company's registration
statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, relating
to 258,894 shares of Common Stock, authorized for issuance under the Company's
Articles of Incorporation, and an equal number of Rights to purchase Series D
Junior Participating Preferred Stock attached thereto (such securities being
referred to collectively as the "Securities"). The Registration Statement
provides that the Securities may be offered upon the tendering for redemption of
Units of TriNet Sunnyvale Partners, L.P., of which the Company is the sole
general partner, by the limited partners holding such Units.
We have examined the Articles of Incorporation of the Company, as amended
and restated to the date hereof and on file with the Maryland State Department
of Assessments and Taxation; the Bylaws of the Company; such records of
corporate proceedings of the Company as we deem appropriate for the purposes of
this opinion; the Registration Statement and the exhibits thereto.
Based upon the foregoing, we are of the opinion that, when issued as
described in the Registration Statement, the Securities will be legally issued,
fully paid and nonassessable.
We hereby consent to being named as counsel to the Company in the
Registration Statement, to the references therein to our firm under the caption
"Legal Matters" and to the inclusion of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE>
Exhibit 8.1
-----------
[Goodwin, Procter & Hoar LLP Letterhead]
June 22, 1998
TriNet Corporate Realty Trust, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, CA 94111
Re: REIT Qualification
------------------
Ladies and Gentlemen:
This opinion is delivered to you in our capacity as counsel to TriNet
Corporate Realty Trust, Inc. (the "Company") in connection with the Company's
Registration Statement filed with the Securities and Exchange Commission on Form
S-3 relating to 258,894 shares of its common stock, $.01 par value per share,
that may be issued by the Company from time to time in redemption of units of
limited partnership in TriNet Sunnyvale Partners, L.P. This opinion relates to
the Company's qualification for federal income tax purposes as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code").
In rendering the following opinion, we have reviewed and relied upon a copy
of the Company's federal income tax return on Form 1120 - REIT, for each of its
taxable years ended December 1993, December 1994, December 1995 and December
1996. We assume that each of the foregoing returns were timely filed following
timely filing of application for automatic extension of time to file such
returns. We have examined the Articles of Incorporation and Bylaws of the
Company, each as amended, and such other records, certificates and documents as
we have deemed necessary or appropriate for purposes of rendering the opinions
set forth herein.
We have reviewed and relied upon the Registration Statement and the
descriptions set forth therein, or incorporated by reference, of the Company and
its investments and activities. We have relied upon the representations of
officers of the Company dated on or about this date (the "Certificate"),
regarding the manner in which the Company has been and will continue to be owned
and operated. We have not made an independent investigation of any of the facts
set forth in any of the above-referenced documents including the Certificate.
Except as regards the federal income tax requirements relating to the taxation
of the Company as a REIT, which is the subject of this opinion and with regard
to which officers of the Company have certified to the factual matters relating
to the Company's compliance, we assume that the Company has
<PAGE>
been and will be operated in accordance with applicable laws and the terms and
conditions of applicable documents, and that the descriptions of the Company and
its investments, and the proposed investments, activities, operations and
governance of the Company set forth in the Registration Statement are true.
In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the conformity
to the original documents of all documents submitted to us as copies, (iv) the
conformity of final documents to all documents submitted to us as drafts, (v)
the authority and capacity of the individual or individuals who executed any
such documents on behalf of any person, (vi) the accuracy and completeness of
all records made available to us, and (vii) the factual accuracy of all
representations, warranties and other statements made by all parties. We have
also assumed, without investigation, that all documents, certificates,
warranties and covenants on which we have relied in rendering the opinion set
forth below including the representations contained in the Certificate, but
excluding representations made to us in prior certificates which may no longer
accurately reflect the Company's assets or operations solely on account of the
Company's having subsequently (i) acquired properties not referred to therein or
(ii) disposed of properties specifically referred to therein, as the case may
be, and that were given or dated earlier than the date of this letter continue
to remain accurate, insofar as relevant to the opinion set forth herein, from
such earlier date through and including the date of this letter.
The conclusions set forth below are based upon the Code, the Income Tax
Regulations and Procedure and Administration Regulations promulgated thereunder
and existing administrative and judicial interpretations thereof, all of which
are subject to change. No assurance can therefore be given that the federal
income tax consequences described below will not be altered in the future.
Based upon and subject to the foregoing, we are of the opinion that
1. Commencing with the Company's taxable year ended December 31, 1993, the
Company has been organized in conformity with the requirements for
qualification as a "real estate investment trust," and its method of
operation, as described in the Registration Statement and set forth in
the Certificate, has enabled the Company to meet and, provided that the
Company continues to meet the applicable asset composition, source of
income, shareholder diversification, distribution, record keeping and
other requirements of the Code necessary for a corporation to qualify as
a REIT, will enable it to continue to meet the
<PAGE>
requirements for qualification and taxation as a "real estate investment
trust" under the Code.
2. The statements in the Registration Statement set forth under the
captions "Description of Units and Redemption of Units -- Tax
Consequences of Redemption" and "Federal Income Tax Considerations," to
the extent such information constitutes matters of law, summaries of
legal matters, or legal conclusions, have been reviewed by us and are
accurate in all material respects.
We express no opinion with respect to the transactions described in the
Registration Statement other than those expressly set forth herein. Moreover,
as indicated above, the Company's qualification and taxation as a REIT depends
upon the Company's ability to meet, through actual annual operating results,
distribution levels, diversity of stock ownership and the various qualification
tests imposed under the Code, the results of which will not be reviewed by us.
Accordingly, no assurance can be given that the actual results of the Company's
operations for any one taxable year will satisfy such requirements. You should
recognize that our opinion is not binding on the IRS and that the IRS may
disagree with the opinion contained herein. Although we believe that our
opinion will be sustained if challenged, there can be no assurance that this
will be the case. Except as specifically discussed above, the opinion expressed
herein is based upon the law as it currently exists. Consequently, future
changes in the law may cause the federal income tax treatment of the
transactions described herein to be materially and adversely different from that
described above.
We consent to being named as counsel to the Company in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of a copy of this opinion letter as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
TriNet Corporate Realty Trust, Inc. on Form S-3 (File No. 333- ) of our
report dated January 23, 1998 on our audits of the consolidated financial
statements and financial statement schedule of TriNet Corporate Realty Trust,
Inc. as of December 31, 1997 and 1996, and for the years ended December 31,
1997, 1996, and 1995, which report is included in the Company's Annual Report on
Form 10-K and of our reports dated April 20, 1998 on our audits of the
Historical Summary of Rental Income and Direct Operating Expenses of the Concord
Farms Office Park for the year ended December 31, 1997, and the Historical
Summary of Income and Direct Operating Expenses of Poydras Plaza for the year
ended December 31, 1997, which reports are included in the Company's Current
Report on Form 8-K filed April 22, 1998. We also consent to the reference to our
firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
San Francisco, California
June 22, 1998
