<PAGE>
As filed with the Securities and Exchange Commission on August 20, 1997
------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
AUGUST 15, 1997
(Date of Report)
EQUITY RESIDENTIAL PROPERTIES TRUST
(Exact Name of Registrant as Specified in its Charter)
1-12252
(Commission File No.)
Maryland 13-3675988
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation No.)
Two North Riverside Plaza, Chicago, Illinois 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
- ----------------------------------------------------------------------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ACQUISITIONS
As used herein, the term "Company" includes Equity Residential Properties Trust
and its subsidiaries as the survivor of the merger between Wellsford Residential
Property Trust ("Wellsford") and Equity Residential Properties Trust ("EQR")
(the "Merger", which closed on May 30, 1997). The Company has acquired, in
addition to the Properties acquired in connection with the Merger and in
addition to the Properties reported in the Current Report on Form 8-K, dated May
20, 1997, 16 multifamily properties during the period from May 21, 1997 through
August 15, 1997. The cash portion of these transactions was financed primarily
through the Series D Preferred Share Offering and the June 1997 Common Share
Offerings. Descriptions of the acquired properties are as follows.
Capitalized terms not defined herein are used as defined in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, as amended by Form
10-K/A, and the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997.
CASCADE AT LANDMARK APARTMENTS, ALEXANDRIA, VIRGINIA
On May 21, 1997, the Company acquired a multifamily property located in
Alexandria, Virginia ("Cascade at Landmark"). Cascade at Landmark was
approximately 94% occupied as of August 1, 1997. The property consists of 277
units in a 16 story high-rise building and one story clubroom/leasing office on
approximately five acres. Amenities include a clubroom, swimming pool with
jacuzzi and deck area, tennis court, 24-hour front desk service with secured
access, garage parking with secured access, laundry rooms, storage area, walk-in
closets and mini-blinds. The property was constructed in 1990. Property
management services are being provided by the Company since the date of
acquisition.
Terms of Purchase
Cascade at Landmark was purchased from an unaffiliated third party for
approximately $23.3 million.
TAMARLANE APARTMENTS, PORTLAND, MAINE
On May 21, 1997, the Company acquired a multifamily property located in
Portland, Maine ("Tamarlane"). Tamarlane was approximately 99% occupied as of
August 1, 1997. The property consists of 115 units in 23 two-story residential
buildings and a single-story clubhouse/leasing office on approximately 19 acres.
Amenities include a clubhouse, swimming pool, and washer/dryer hook-ups in each
unit. The property was constructed in 1986. Property management services are
being provided by the Company since the date of acquisition.
Terms of Purchase
Tamarlane was purchased from an unaffiliated third party for approximately $5.8
million.
2
<PAGE>
SABAL PALM CLUB APARTMENTS, POMPANO BEACH, FLORIDA
On May 21, 1997, the Company acquired a multifamily property located in Pompano
Beach, Florida ("Sabal Palm Club", formerly known as Post Crossing). Sabal Palm
Club was approximately 88% occupied as of August 1, 1997. The property consists
of 416 units in 18 two story residential buildings and a single-story clubhouse
on approximately 23 acres. Amenities include two swimming pools, two lighted
tennis courts, car wash facility, detached garages, laundry facilities and
controlled access gates. The property was constructed in 1989. Property
management services are being provided by the Company since the date of
acquisition.
Terms of Purchase
Sabal Palm was purchased from an unaffiliated third party for approximately
$23.6 million.
BANYAN LAKE APARTMENTS, BOYNTON BEACH, FLORIDA
On May 29, 1997, the Company acquired a multifamily property located in Boynton
Beach, Florida ("Banyan Lake"). Banyan Lake was approximately 86% occupied as
of August 1, 1997. The property consists of 288 units in 36 two story
residential buildings and a single-story leasing office on approximately 30
acres. Amenities include swimming pool with wading pool, one basketball court,
three racquetball courts, two tennis courts, a children's playground,
picnic/barbecue area, washer/dryer hook-ups in every unit, free basic cable, and
screened-in patios. The property was constructed in 1986. Property management
services are being provided by the Company since the date of acquisition.
Terms of Purchase
Banyan Lake was purchased from an unaffiliated third party for approximately
$13.9 million.
CLUB AT TANASBOURNE APARTMENTS, HILLSBORO, OREGON
On June 19, 1997, the Company acquired a multifamily property located in
Hillsboro, Oregon ("Club at Tanasbourne"). Club at Tanasbourne was
approximately 97% occupied as of August 1, 1997. The property consists of 352
units in 34 two-story residential buildings and a single-story clubhouse/leasing
office on approximately 19 acres. Amenities include a clubhouse,
pool/spa/sauna, laundry center, mini-theater, computer/home office area,
washer/dryer hook-ups in every unit, fireplaces and dual vanities in some units,
walk-in closets, mirrored closet doors and vaulted ceilings and fans in the
upstairs units. The property was constructed in 1990. Property management
services are being provided by the Company since the date of acquisition.
Terms of Purchase
Club at Tanasbourne was purchased from an unaffiliated third party for
approximately $19.8 million.
3
<PAGE>
WOOD CREEK APARTMENTS, PLEASANT HILL, CALIFORNIA
On June 26, 1997, the Company acquired a multifamily property located in
Pleasant Hill, California ("Wood Creek"). Wood Creek was approximately 95%
occupied as of August 1, 1997. The property consists of 256 units in 49 two
story residential buildings, a single story clubhouse and one bathhouse on
approximately 16 acres. Amenities include a clubhouse with lounge, two swimming
pools, wood burning fireplaces, dishwashers, washer/dryers, and vertical and
mini blinds. The property was constructed in 1987. Property management services
are being provided by the Company since the date of acquisition.
Terms of Purchase
Wood Creek was purchased from an unaffiliated third party for approximately
$32.3 million.
LA MIRAGE APARTMENTS, SAN DIEGO, CALIFORNIA
On July 18, 1997, the Company acquired a multifamily property, including
adjacent undeveloped land, located in San Diego, California ("La Mirage"). La
Mirage was approximately 95% occupied as of August 1, 1997. The property
consists of 1,070 units in 58 three and four story residential buildings and a
two story office/clubhouse on approximately 75 acres. Amenities include a two
story clubhouse, a 5,000 square foot swimming pool, six spas and three private
pools, a health club/social center including a weight room, cardiovascular
facilities, and a jogging track. Other amenities include vaulted ceilings,
vertical and mini blinds, wood burning fireplaces, walk-in closets, mirrored
walls, central heating and air conditioning, washer/dryers, eight tennis courts,
three sand volleyball courts, and three pool cabanas. The property was
constructed in phases from 1988-1992. Property management services are being
provided by the Company since the date of acquisition.
Terms of Purchase
La Mirage was purchased from an unaffiliated third party for approximately
$128.8 million.
HUNTERS RIDGE APARTMENTS AND SOUTH POINTE APARTMENTS
ST. LOUIS, MISSOURI
On June 17, 1997, the Company acquired two multifamily properties located in St.
Louis, Missouri ("Hunters Ridge" and "South Pointe"). Hunters Ridge was
approximately 91% occupied as of August 1, 1997. This property consists of 198
units in 7 three story residential buildings and one office/clubhouse on
approximately 13 acres. Amenities include a clubhouse, swimming pool, walk-in
closets, patio/balconies, microwaves, vaulted ceilings in some units,
fireplaces, and washer/dryer hookups. This property was constructed in 1987.
Property management services are being provided by the Company since the date of
acquisition.
South Pointe was approximately 97% occupied as of August 1, 1997. This property
consists of 192 units in 10 three story residential buildings on approximately
eight acres. Amenities include a clubhouse, swimming pool, walk-in closets,
patio/balconies, microwaves, dishwashers, fireplaces, washer/dryer hookups, and
storage space. This property was constructed in 1986. Property management
services are being provided by the Company since the date of acquisition.
4
<PAGE>
Terms of Purchase
Hunters Ridge and South Pointe were purchased from an unaffiliated third party
for approximately $19.5 million, which included the assumption of mortgage
indebtedness of $11.8 million.
FOXCHASE APARTMENTS, GRAND PRAIRIE, TEXAS
On July 11, 1997, the Company acquired a multifamily property located in Grand
Prairie, Texas ("Foxchase"). Foxchase was approximately 93% occupied as of
August 1, 1997. The property consists of 260 units in 9 two and three story
residential buildings and one office/clubhouse on approximately 15 acres.
Amenities include two swimming pools, a hot tub, lighted tennis courts,
playground, fitness center, full size washer/dryer in all units, free basic
cable, cathedral ceilings in some units, fireplaces, and video rental service.
The property was constructed in 1983. Property management services are being
provided by the Company since the date of acquisition.
Terms of Purchase
Foxchase was purchased from an unaffiliated third party for approximately $8.3
million.
BAY RIDGE APARTMENTS, SAN PEDRO, CALIFORNIA
On July 31, 1997, the Company acquired a multifamily property located in San
Pedro, California ("Bay Ridge"). Bay Ridge was approximately 98% occupied as of
August 1, 1997. The property consists of 60 units in a three story residential
building over a two story subterranean on approximately two acres. Amenities
include elevator service to all floors, a swimming pool, laundry facilities,
recreation room/lounge, covered parking, patio/balconies, and a fitness center.
The property was constructed in 1987. Property management services are being
provided by the Company since the date of acquisition.
Terms of Purchase
Bay Ridge was purchased from an unaffiliated third party for $4.5 million.
BOYNTON PLACE APARTMENTS, BOYNTON BEACH, FLORIDA
On August 7, 1997 the Company acquired a multifamily property located in Boynton
Beach, Florida ("Boynton Place"). Boynton Place was approximately 89% occupied
as of August 8, 1997. The property consists of 192 units in eight three story
residential buildings and one clubhouse on approximately 12 acres. Amenities
include a leasing office/fitness center, swimming pool, lighted tennis court,
full size washer/dryer rental/connections, barbecue/picnic area, playground,
half-court basketball, carwash area, dishwashers, disposals and laundry
facilities. The property was constructed in 1989. Property management services
are being provided by the Company since the date of acquisition.
5
<PAGE>
Terms of Purchase
Boynton Place was purchased from an unaffiliated third party for $9.2 million.
THE GATES OF REDMOND APARTMENTS, REDMOND, WASHINGTON
On August 7, 1997, the Company acquired a multifamily property located in
Redmond, Washington ("Gates of Redmond"). Gates of Redmond was approximately 98%
occupied as of August 1, 1997. The property consists of 180 units in 18 two and
three story residential buildings and one office/clubhouse on approximately nine
acres. Amenities include a clubhouse, swimming pool, woodburning fireplaces in
select units, washer/dryers in all units, dishwashers, disposals, trash
compactors, and microwaves. The property was constructed in phases from 1982-
1989. Property management services are being provided by the Company since the
date of acquisition.
Terms of Purchase
Gates of Redmond was purchased from an unaffiliated third party for $14.4
million, which included the assumption of mortgage indebtedness of $6.5 million
and the issuance of OP units with a value of $2.8 million.
THE CAMBRIDGE VILLAGE APARTMENTS, LEWISVILLE, TEXAS
On August 12, 1997, the Company acquired a multifamily property located in
Lewisville, Texas ("Cambridge Village"). Cambridge Village was approximately 99%
occupied as of August 1, 1997. The property consists of 200 units in 23 two
story residential buildings and one office/clubhouse on approximately ten acres.
Amenities include a clubhouse, swimming pool, sun deck, picnic area,
washer/dryers in all units, microwaves, large walk-in closets, wood burning
fireplaces, and Euro-style kitchens. The property was constructed in 1987.
Property management services are being provided by the Company since the date of
acquisition.
Terms of Purchase
Cambridge Village was purchased from an unaffiliated third party for $9.5
million.
THE CROSSWINDS APARTMENTS, ST. PETERSBURG, FLORIDA
On August 12, 1997, the Company acquired a multifamily property located in St.
Petersburg, Florida ("Crosswinds"). Crosswinds was approximately 95% occupied as
of August 18, 1997. The property consists of 208 units in 13 two story
residential buildings and one office/clubhouse on approximately 17 acres.
Amenities include a clubhouse with party area, swimming pool, heated jacuzzi,
lighted tennis courts, raquetball court, three acres of lake,
dishwashers/disposals, walk-in closets, and mini and vertical blinds in all
units. The property was constructed in 1986. Property management services are
being provided by the Company since the date of acquisition.
Terms of Purchase
Crosswinds was purchased from an unaffiliated third party for $7.3 million.
6
<PAGE>
THE GATES OF REDMOND II APARTMENTS, REDMOND, WASHINGTON
On August 15, 1997, the Company acquired a multifamily property located in
Redmond, Washington ("Gates of Redmond II"). Gates of Redmond II was
approximately 98% occupied as of August 1, 1997. The property consists of 100
units in 17 two story residential buildings and one office/clubhouse on
approximately seven acres. Amenities include a clubhouse, heated swimming pool,
playground, and fireplaces in selected units. The property was constructed in
1979. Property management services are being provided by the Company since the
date of acquisition.
Terms of Purchase
Gates of Redmond II was purchased from an unaffiliated third party for $8
million, which included the assumption of mortgage indebtedness of $3.5 million
and the issuance of OP units with a value of $2.3 million.
7
<PAGE>
ITEM 7.FINANCIAL STATEMENTS AND EXHIBITS
C. EXHIBITS
24.1 Consent of Ernst & Young LLP
No information is required under Items 1, 3, 4, and 6, and these items have
therefore been omitted.
8
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
Required under Item 7(b) of Form 8-K
9
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Capitalized terms not defined herein are used as defined in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, as amended by Form
10-K/A, and the Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997.
The following unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1997 and Statements of Operations for the six months ended June 30,
1997 and for the year ended December 31, 1996 have been presented as if the
Series D Preferred Share Offering, the June 1997 Common Share Offerings and the
acquisition of 16 multifamily properties had occurred on June 30, 1997 with
respect to the June 30, 1997 balance sheet, January 1, 1997 with respect to the
statement of operations for the six months ended June 30, 1997 and January 1,
1996 with respect to the statement of operations for the year ended December 31,
1996. Eight of the acquired properties are included in the Company's Historical
Balance Sheet as of June 30, 1997 and eight of the properties, which were
acquired subsequent to June 30, 1997, are included on a Pro Forma basis as
described in Note A of the Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1997.
The unaudited Pro Forma Condensed Consolidated Financial Statements are not
necessarily indicative of the results of future operations, nor the results of
historical operations, had all the transactions occurred as described above on
either January 1, 1996 or January 1, 1997.
The Pro Forma Condensed Consolidated Financial Statements should be read in
conjunction with the accompanying Notes to the Pro Forma Condensed Consolidated
Financial Statements, the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, as amended by Form 10-K/A, the Company's Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1997 and the
Statements of Revenue and Certain Expenses for certain of the acquired
properties (included elsewhere herein).
10
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(UNAUDITED)
(Amounts in thousands)
<TABLE>
<CAPTION>
1997
Most Recent
Acquired Pro
Historical Properties(A) Forma
---------- ------------ ----------
<S> <C> <C> <C>
ASSETS
Rental property, net $4,124,835 191,715 $4,316,550
Real estate held for disposition 3,947 -- 3,947
Investment in mortgage notes, net 174,764 -- 174,764
Cash and cash equivalents 311,358 (176,556) 134,802
Rents receivable 2,078 -- 2,078
Deposits--restricted 6,112 -- 6,112
Escrows deposits--mortgage 28,698 -- 28,698
Deferred financing costs, net 14,306 -- 14,306
Other assets 72,636 -- 72,636
---------- ------- ----------
Total assets $4,738,734 15,159 4,753,893
========== ======= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 960,879 10,025 970,904
Line of credit -- -- --
Notes, net 745,508 -- 754,508
Accounts payable and accrued expenses 43,001 -- 43,001
Accrued interest payable 22,210 -- 22,210
Due to affiliates 649 -- 649
Rents received in advance and other liabilities 31,844 -- 31,844
Security deposits 19,231 -- 19,231
Distributions payable 64,506 -- 64,506
---------- ------- ----------
Total liabilities 1,896,828 10,025 1,906,853
---------- ------- ----------
Commitments and contingencies
Minority Interests 179,222 5,134 184,356
---------- ------- ----------
Shareholders' equity:
Common shares 736 -- 736
Preferred shares 725,495 -- 725,495
Employee notes (5,202) -- (5,202)
Paid in capital 2,050,152 -- 2,050,152
Distributions in excess of accumulated earnings (108,497) -- (108,497)
---------- ------- ----------
Total shareholders' equity 2,662,684 -- 2,662,684
---------- ------- ----------
Total liabilities and shareholders' equity $4,738,734 15,159 4,753,893
========== ======= ==========
</TABLE>
(A) Reflects the most recent multifamily property acquisitions, which include
Foxchase, La Mirage, Bay Ridge, Boynton Place, Gates of Redmond, Cambridge
Village, Crosswinds and Gates of Redmond II (acquired in July and August
1997) (collectively the "1997 Most Recent Acquired Properties"). In
connection with such acquisitions the amounts presented include the initial
purchase price as well as subsequent closing costs incurred and capital
improvements required as identified in the acquisition process.
11
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
(UNAUDITED)
(Amounts in thousands except for share data)
<TABLE>
<CAPTION>
1997 1997
Previously Most Recent
Acquired Acquired Pro
Historical Properties (A) Properties (B) Adjustments (C) Forma
---------- -------------- -------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 290,799 $ 8,187 $ 11,475 $ -- $ 310,461
Fee and asset management 3,110 -- -- -- 3,110
Interest income - investment in mortgage notes 8,011 -- -- -- 8,011
Interest and other income 4,404 -- -- (2,411) 1,993
--------- ------- -------- -------- ---------
Total revenues 306,324 8,187 11,475 (2,411) 323,575
--------- ------- -------- -------- ---------
EXPENSES
Property and maintenance 70,760 2,460 3,449 (751) 75,918
Real estate taxes and insurance 29,667 763 1,124 -- 31,554
Property management 11,819 -- -- 492 12,311
Fee and asset management 1,569 -- -- -- 1,569
Depreciation 62,775 -- -- 4,706 67,481
Interest:
Expense incurred 50,924 -- -- 801 51,725
Amortization of deferred financing costs 1,220 -- -- 1,220
General and administrative 6,206 -- -- -- 6,206
--------- ------- -------- -------- ---------
Total expenses 234,940 3,223 4,573 5,248 247,984
--------- ------- -------- -------- ---------
Income before gain on disposition of properties
and allocation to Minority Interests 71,384 $ 4,964 $ 6,902 $ (7,659) 75,591
======= ======== ========
Gain on disposition of properties 3,632 --
--------- ---------
Income before allocation to Minority Interests 75,016 75,591
(Income) allocated to Minority Interests (D) (6,345) (5,153)
--------- ---------
Net income 68,671 70,438
Preferred distributions 20,939 26,750
--------- ---------
Net income available to Common Shares $ 47,732 (E) $ 43,688
========= =========
Net income per weighted average Common
Share outstanding $ 0.86 $ 0.69
========= =========
Weighted average Common Shares outstanding 55,385 (F) 63,691
========= =========
</TABLE>
(A) Reflects the results of operations for Cascade at Landmark, Sabal Palm Club,
Tamarlane, Banyan Lake, Hunters Ridge, South Pointe, Club at Tanasbourne,
and Wood Creek (acquired May and June 1997) (collectively the "1997
Previously Acquired Properties"). The amounts presented represent the
historical amounts for certain revenues and expenses for the periods from
January 1, 1997 through the respective acquisition dates for each property.
(B) Reflects the results of operations for the 1997 Most Recent Acquired
Properties. The amounts presented for rental revenues, property and
maintenance and real estate taxes and insurance are based on the revenues
and certain expenses of the 1997 Most Recent Acquired Properties for the six
months ended June 30, 1997.
12
<PAGE>
(C) Reflects the following adjustments to the 1997 Previously Acquired
Properties and the 1997 Most Recent Acquired Properties results of
operations as follows:
Interest and other income:
Reduction of interest income due to the use of working capital
for property acquisitions $(2,411)
=======
Property and maintenance:
The elimination of third-party management fees where the Company
is providing onsite property management services $ (751)
=======
Property management:
Incremental cost associated with self management of the 1997
Most Recent Acquired Properties for the six months ended
June 30, 1997 and the 1997 Previously Acquired Properties for
the period from January 1, 1997 through the respective
acquisition dates for each property. $ 492
=======
Depreciation:
Reflects depreciation based on the expected total investment of
$191.7 million for the 1997 Most Recent Acquired Properties and
the expected total investment of $139.7 million for the 1997
Previously Acquired Properties less 10% allocated to land and
depreciated over a 30-year life for real property. Depreciation
for the 1997 Previously Acquired Properties reflect amounts from
January 1, 1997 through the respective acquisition dates for
each property. $ 4,706
=======
Interest:
Expense incurred:
Interest on mortgage indebtedness for certain of the 1997
Previously Acquired Properties and the 1997 Most Recent Acquired
Properties. (G) $ 801
=======
(D) A portion of income was allocated to Minority Interests representing
interests in the Operating Partnership not owned by the Company. The pro
forma allocation to Minority Interests (represented by OP Units) is based
upon the percentage owned by such Minority Interests after giving effect to
the pro forma transactions.
(E) Preferred distributions represent amounts payable to Series A Preferred
Shares, Series B Preferred Shares, Series C Preferred Shares and Series D
Preferred Shares at the rates of 9.375%, 9.125%, 9.125% and 8.60%,
respectively, of the liquidation preference thereof per annum.
(F) Pro Forma weighted average Common Shares outstanding for the six months
ended June 30, 1997 was 63.7 million, which assumes the Common Shares issued
in connection with the June 1997 Common Share Offerings were outstanding as
of January 1, 1997. The Common Shares outstanding does not include any
shares issued in a private or public offering that have not been used or are
not intended to be used for acquisitions or repayment of debt directly
incurred in an acquisition.
(G) Detail of interest expense on mortgage indebtedness for certain of the 1997
Previously Acquired Properties and the 1997 Most Recent Acquired Properties:
<TABLE>
<CAPTION>
Mortgage Interest Interest
Property Indebtedness Rate Expense
------------------------------ ------------ -------- --------
<S> <C> <C> <C>
Hunters Ridge/South Pointe (1) $11,840 7.88% $417
Gates of Redmond 6,507 7.35% 239
Gates of Redmond II 3,518 8.25% 145
------- ----
Totals $21,865 $801
======= ====
</TABLE>
(1) The amount presented for these properties represent the historical
amounts for the period from January 1, 1997 through the acquisition
date.
13
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(UNAUDITED)
(Amounts in thousands except for share data)
<TABLE>
<CAPTION>
1997
Acquired Pro
Historical Properties (A) Adjustments (B) Forma
---------- -------------- --------------- ----------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 454,412 $ 40,694 $ -- $ 495,106
Fee and asset management 6,749 -- -- 6,749
Interest income - investment in mortgage notes 12,819 -- -- 12,819
Interest and other income 4,405 -- (2,942) 1,463
---------- -------------- --------------- ----------
Total revenues 478,385 40,694 (2,942) 516,137
---------- -------------- --------------- ----------
EXPENSES
Property and maintenance 127,172 12,312 (1,498) 137,986
Real estate taxes and insurance 44,128 4,111 -- 48,239
Property management 17,512 -- 1,017 18,529
Fee and asset management 3,837 -- -- 3,837
Depreciation 93,253 -- 9,942 103,195
Interest:
Expense incurred 81,351 -- 1,701 83,052
Amortization of deferred financing costs 4,242 -- -- 4,242
General and administrative 9,857 -- -- 9,857
---------- -------------- --------------- ----------
Total expenses 381,352 16,423 11,162 408,937
---------- -------------- --------------- ----------
Income before gain on disposition of properties 97,033 $ 24,271 $ (14,104) 107,200
============== ===============
Gain on disposition of properties 22,402 --
---------- ----------
Income before extraordinary item 119,435 107,200
Extraordinary item:
Write-off of unamortized costs on refinanced
debt (3,512 --
---------- ----------
Income before allocation to Minority Interests 115,923 107,200
(Income) allocated to Minority Interests (C) (14,299) (9,054)
---------- ----------
Net income 101,624 98,146
Preferred distributions 29,015 (D) 44,065
---------- ----------
Net income available to Common Shares $ 72,609 $ 54,081
========== ==========
Net income per weighted average Common
Share outstanding $ 1.70 $ 1.05
========== ==========
Weighted average Common Shares outstanding 42,586 (E) 51,578
========== ==========
</TABLE>
(A) Reflects the results of operations of the 1997 Previously Acquired
Properties and the 1997 Most Recent Acquired Properties (collectively the
"1997 Acquired Properties"). The amounts presented for rental revenues,
property and maintenance and real estate taxes and insurance are based on
the revenues and certain expenses of the 1997 Acquired Properties for the
year ended December 31, 1996.
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(B) Reflects the following adjustments:
Interest and other income:
Reduction of interest income due to the use of working capital for
property acquisitions $ (2,942)
===========
Property and maintenance:
The elimination of third-party management fees where the Company is
providing onsite property management services $ (1,498)
===========
Property management:
Incremental cost associated with self management of the 1997 Acquired
Properties for the year ended December 31, 1996 $ 1,017
===========
Depreciation:
Reflects depreciation based on the expected total investment of $331.4
million for the 1997 Acquired Properties less amounts allocated to
land, generally 10%, and depreciated over a 30-year life for real
property. $ 9,942
===========
Interest:
Expense incurred:
Interest on mortgage indebtedness for certain of the 1997 Acquired
Properties (F) $ 1,701
===========
(C) A portion of income/loss was allocated to Minority Interests representing
interests in the Operating Partnership not owned by the Company. The pro
forma allocation to Minority Interests (represented by OP Units) is based
upon the percentage owned by such Minority Interests as a result of the pro
forma transactions.
(D) Preferred distributions represent amounts payable to Series A Preferred
Shares, Series B Preferred Shares, Series C Preferred Shares and Series D
Preferred Shares at the rates of 9.375%, 9.125%, 9.125% and 8.60%,
respectively, of the liquidation preference thereof per annum.
(E) Pro Forma weighted average Common Shares outstanding for the year ended
December 31, 1996 was 51.6 million, which includes 42.6 million weighted
average Common Shares outstanding as of December 31, 1996 plus the issuance
of 9 million Common Shares in connection with the June 1997 Common Share
Offerings. The Common Shares outstanding does not include any shares issued
in a private or public offering that have not been used or are not intended
to be used for acquisitions or repayment of debt directly incurred in an
acquisition.
(F) Detail of interest expense on mortgage indebtedness for certain of the 1997
Acquired Properties.
Mortgage Interest Interest
Property Indebtedness Rate Expense
-------------------------- ------------ -------- --------
Hunters Ridge/South Pointe $ 11,840 7.88% $ 932
Gates of Redmond 6,507 7.35% 479
Gates of Redmond II 3,518 8.25% 290
---------- -------
Totals $ 21,865 $ 1,701
========== =======
</TABLE>
15
<PAGE>
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
Required under Item 7(a) of Form 8-K
16
<PAGE>
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Cascade at Landmark (the Property) for the year ended December 31, 1996. The
Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the Statement of Revenue and Certain
Expenses. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 17, 1997
17
<PAGE>
CASCADE AT LANDMARK
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the Period
January 1, 1997 - For the
May 21, 1997 Year Ended
(Unaudited) December 31, 1996
----------------- -----------------
<S> <C> <C>
REVENUE
Rental Income $ 1,212 $ 3,001
---------------- -----------------
CERTAIN EXPENSES
Property operating and maintenance 384 981
Real estate taxes and insurance 96 256
Management fees 61 160
---------------- -----------------
541 1,397
---------------- -----------------
REVENUE IN EXCESS OF CERTAIN
EXPENSES $ 671 $ 1,604
================ =================
</TABLE>
See accompanying notes.
18
<PAGE>
CASCADE AT LANDMARK
NOTES TO STATEMENTS OF
REVENUE AND CERTAIN EXPENSES
Note 1 - Summary of Significant Accounting Policies
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1996 and the period from January 1, 1997 through May 21,
1997 (unaudited) were prepared for purposes of complying with the rules and
regulations of the Securities and Exchange Commission. The accompanying
financial statements are not representative of the actual operations of
Cascade at Landmark for the periods presented as certain expenses, which
may not be comparable to the expenses to be incurred by Equity Residential
Properties Trust and its subsidiaries (the "Company") in the proposed
future operations of Cascade at Landmark, have been excluded. Expenses
excluded consist of interest, depreciation and amortization, professional
fees and other costs not directly related to the future operations of
Cascade at Landmark.
In preparation of the Property's Statements of Revenue and Certain Expenses
in conformity with generally accepted accounting principles, management
makes estimates and assumptions that effect the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
these estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
Cascade at Landmark had a management agreement with a management company
unaffiliated with the Company through the acquisition date to maintain and
manage the operations of the apartment complex. Management fees were based
on 5% of total income. Of the management fees paid in 1996, $160,288 were
paid to an affiliate of the property owner. Upon acquisition of Cascade at
Landmark by the Company, such management contract was cancelled at which
time the Company began to manage Cascade at Landmark.
Note 2 - Description of Property
The following property is included in the statements of revenue and
certain expenses:
Date Number Total
Property Name Location Acquired of Units Investment(A)
------------------- -------------- -------- -------- -------------
Cascade at Landmark Alexandria, VA 5/21/97 277 $23,334,250
Notes:
(A) Includes initial purchase price, closing costs and amounts specified
at date of purchase for future capital improvements.
19
<PAGE>
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Sabal Palm Club (formerly known as Post Crossing (Pompano)) (the Property) for
the year ended December 31, 1996. The Statement of Revenue and Certain Expenses
is the responsibility of the Property's management. Our responsibility is to
express an opinion on the Statement of Revenue and Certain Expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 2, 1997
20
<PAGE>
SABAL PALM CLUB
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the Period
January 1, 1997 - For the
May 21, 1997 Year Ended
(Unaudited) December 31, 1996
----------------- -----------------
<S> <C> <C>
REVENUE
Rental Income $ 1,596 $ 3,844
----------------- -----------------
CERTAIN EXPENSES
Property operating and maintenance 431 1,075
Real estate taxes and insurance 229 548
Management fees 79 188
----------------- -----------------
739 1,811
----------------- -----------------
REVENUE IN EXCESS OF CERTAIN
EXPENSES $ 857 $ 2,033
================= =================
</TABLE>
See accompanying notes.
21
<PAGE>
SABAL PALM CLUB
NOTES TO STATEMENTS OF
REVENUE AND CERTAIN EXPENSES
Note 1 - Summary of Significant Accounting Policies
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1996 and the period from January 1, 1997 through May 21,
1997 (unaudited) were prepared for purposes of complying with the rules and
regulations of the Securities and Exchange Commission. The accompanying
financial statements are not representative of the actual operations of
Sabal Palm Club for the periods presented as certain expenses, which may
not be comparable to the expenses to be incurred by Equity Residential
Properties Trust and its subsidiaries (the "Company") in the proposed
future operations of Sabal Palm Club, have been excluded. Expenses excluded
consist of interest, depreciation and amortization, professional fees and
other costs not directly related to the future operations of Sabal Palm
Club.
In preparation of the Property's Statements of Revenue and Certain Expenses
in conformity with generally accepted accounting principles, management
makes estimates and assumptions that effect the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
these estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
Sabal Palm Club had a management agreement with a management company
unaffiliated with the Company through the acquisition date to maintain and
manage the operations of the apartment complex. Management fees were based
on 5% of total income. Of the management fees paid in 1996, $188,092 were
paid to an affiliate of the property owner. Upon acquisition of Sabal Palm
Club by the Company, such management contract was cancelled at which time
the Company began to manage Sabal Palm Club.
Note 2 - Description of Property
The following property is included in the statements of revenue and
certain expenses:
Date Number Total
Property Name Location Acquired of Units Investment(A)
------------------- -------------- -------- -------- -------------
Sabal Palm Club Pompano Beach, 5/21/97 416 $23,840,350
FL
Notes:
(A) Includes initial purchase price, closing costs and amounts specified
at date of purchase for future capital improvements.
22
<PAGE>
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
Wood Creek (Pleasant Hill) (the Property) for the year ended December 31, 1996.
The Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures made in the Statement of Revenue and
Certain Expenses. An audit also includes assessing the basis of accounting used
and significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 23, 1997
<PAGE>
WOOD CREEK
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the Period
January 1, 1997- For the
June 26, 1997 Year Ended
(Unaudited) December 31, 1996
---------------- -----------------
<S> <C> <C>
REVENUE
Rental Income $1,718 $3,385
------ ------
CERTAIN EXPENSES
Property operating and maintenance 378 655
Real estate taxes and insurance 157 318
Management fees 62 119
597 1,092
------ ------
REVENUE IN EXCESS OF CERTAIN EXPENSES $1,121 $2,293
====== ======
</TABLE>
See accompanying notes.
24
<PAGE>
WOOD CREEK
NOTES TO STATEMENTS OF
REVENUE AND CERTAIN EXPENSES
Note 1 - Summary of Significant Accounting Policies
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1996 and for the period from January 1, 1997 through
June 26, 1997 (unaudited) were prepared for purposes of complying with the
rules and regulations of the Securities and Exchange Commission. The
accompanying financial statements are not representative of the actual
operations of Wood Creek for the periods presented as certain expenses,
which may not be comparable to the expenses to be incurred by Equity
Residential Properties Trust and its subsidiaries (the "Company") in the
proposed future operations of Wood Creek, have been excluded. Expenses
excluded consist of interest, depreciation and amortization, professional
fees and other costs not directly related to the future operations of Wood
Creek.
In preparation of the Property's Statements of Revenue and Certain Expenses
in conformity with generally accepted accounting principles, management
makes estimates and assumptions that effect the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
these estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
Wood Creek had a management agreement with a management company
unaffiliated with the Company through the acquisition date to maintain and
manage the operations of the apartment complex. Management fees were based
on 5% of total income. Of the management fees paid in 1996, $119,000 were
paid to an affiliate of the property owner. Upon acquisition of Wood Creek
by the Company, such management contract was cancelled at which time the
Company began to manage Wood Creek.
Note 2 - Description of Property
The following property is included in the statements of revenue and
certain expenses:
Date Number Total
Property Name Location Acquired of Units Investment(A)
------------------- -------------- -------- -------- -------------
Wood Creek Pleasant Hill, 6/26/97 256 $32,393,000
CA
Notes:
(A) Includes initial purchase price, closing costs and amounts specified
at date of purchase for future capital improvements.
25
<PAGE>
Report of Independent Auditors
The Board of Trustees of
Equity Residential Properties Trust
We have audited the accompanying Statement of Revenue and Certain Expenses of
LaMirage (the Property) for the year ended December 31, 1996. The Statement of
Revenue and Certain Expenses is the responsibility of the Property's management.
Our responsibility is to express an opinion on the Statement of Revenue and
Certain Expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Statement of Revenue and Certain Expenses is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Statement of Revenue and Certain
Expenses. An audit also includes assessing the basis of accounting used and
significant estimates made by management, as well as evaluating the overall
presentation of the Statement of Revenue and Certain Expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Equity Residential Properties Trust's
Current Report on Form 8-K as described in Note 1, and is not intended to be a
complete presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 1 for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
July 25, 1997
<PAGE>
LA MIRAGE
STATEMENTS OF REVENUE
AND CERTAIN EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the
Six Months Ended For the
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
---------------- -----------------
<S> <C> <C>
REVENUE
Rental Income $6,604 $12,760
------ -------
CERTAIN EXPENSES
Property operating and maintenance 1,690 3,461
Real estate taxes and insurance 581 1,012
Management fees 189 371
------ -------
2,460 4,844
------ -------
REVENUE IN EXCESS OF CERTAIN EXPENSES $4,144 $ 7,916
====== =======
</TABLE>
See accompanying notes
27
<PAGE>
LA MIRAGE
NOTES TO STATEMENTS OF
REVENUE AND CERTAIN EXPENSES
Note 1 - Summary of Significant Accounting Policies
The accompanying statements of revenue and certain expenses for the year
ended December 31, 1996 and the six months ended June 30, 1997 (unaudited)
were prepared for purposes of complying with the rules and regulations of
the Securities and Exchange Commission. The accompanying financial
statements are not representative of the actual operations of La Mirage for
the periods presented as certain expenses, which may not be comparable to
the expenses to be incurred by Equity Residential Properties Trust and its
subsidiaries (the "Company") in the proposed future operations of La
Mirage, have been excluded. Expenses excluded consist of interest,
depreciation and amortization, professional fees and other costs not
directly related to the future operations of La Mirage.
In preparation of the Property's Statements of Revenue and Certain Expenses
in conformity with generally accepted accounting principles, management
makes estimates and assumptions that effect the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
these estimates.
Rental income attributable to residential leases is recorded when due from
tenants, generally on a straight line basis.
La Mirage had a management agreement with a management company unaffiliated
with the Company through the acquisition date to maintain and manage the
operations of the apartment complex. Management fees were based on 3% of
total income. Of the management fees paid in 1996, $353,393 were paid to an
affiliate of the property owner. Upon acquisition of La Mirage by the
Company, such management contract was cancelled at which time the Company
began to manage La Mirage.
Note 2 - Description of Property
The following property is included in the statements of revenue and
certain expenses:
Date Number Total
Property Name Location Acquired of Units Investment(A)
------------------- -------------- -------- -------- -------------
La Mirage San Diego, CA 7/18/97 1,070 $129,300,000
Notes:
(A) Includes initial purchase price, closing costs and amounts specified
at date of purchase for future capital improvements.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EQUITY RESIDENTIAL PROPERTIES TRUST
August 19, 1997 By: /s/ Michael J. McHugh
- --------------- ------------------------------------
(Date) Michael J. McHugh
Senior Vice President, Chief
Accounting Officer and Treasurer
29
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-3 No. 333-32183) of Equity Residential Properties Trust and in the related
Prospectus of our reports indicated below with respect to the financial
statements indicated below included in this Current Report of Equity Residential
Properties Trust on Form 8-K.
<TABLE>
<CAPTION>
Financial Statements Date of Auditors Report
-------------------- -----------------------
<S> <C>
Statement of Revenue and Certain Expenses of Cascade at
Landmark for the year ended December 31, 1996 July 17, 1997
Statement of Revenue and Certain Expenses of Sabal Palm
Club (formerly known as Post Crossing (Pompano)) for the July 2, 1997
year ended December 31, 1996
Statement of Revenue and Certain Expenses of Wood Creek
(Pleasant Hill) for the year ended December 31, 1996 July 23, 1997
Statement of Revenue and Certain Expenses of LaMirage for
the year ended December 31, 1996 July 25, 1997
</TABLE>
Ernst & Young LLP
Chicago, Illinois
August 15, 1997
