8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington,
D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarter ended March
31, 1994.
Commission file Number 1-8822
BEDFORD PROPERTY INVESTORS, INC.
(Exact name of Registrant as specified in its
charter)
MARYLAND
68-0306514
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
3658 Mt. Diablo Blvd., Suite 210, Lafayette, CA
94549
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code
(510) 283-8910
Indicate by check mark whether Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that Registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes x No__
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date.
Class
Outstanding as of May 13, 1994
Common Stock, $0.01 par value
5,976,900
BEDFORD PROPERTY INVESTORS, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Statement 2
Consolidated Balance Sheets as of March 31, 1994
and December 31, 1993 3
Consolidated Statements of Operations for the three
months ended March 31, 1994 and 1993 4
Consolidated Statements of Stockholders' Equity
for the three months ended March 31, 1994
and the year ended December 31, 1993 5
Consolidated Statements of Cash Flows
for the
three months ended March 31, 1994 and 1993 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis
9-10
Management's Discussion and Analysisof Results of
Operations
and Financial Condition
PART II. OTHER INFORMATION
Items 1-6 10-11
SIGNATURES
12
BEDFORD PROPERTY INVESTORS, INC.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
STATEMENT
The financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.
The information furnished reflects all adjustments which are,
in the opinion of management, necessary for a fair
presentation of results of operations for the interim
periods. Such adjustments are of a normal recurring
nature. These financial statements should be read in
conjunction with the notes to financial statements
appearing in the annual report to shareholders for the year
ended December 31, 1993.
Note 1. The Company and Basis of Presentation
The Company
On July 1, 1993, the Company (formerly known as ICM
Property Investors Incorporated) reincorporated from the State
of Delaware to the State of Maryland under a new name,
Bedford Property Investors, Inc. As of
July 1, 1993, the Company's Common Stock
traded under the symbol "BED" on both the New York and
Pacific Stock Exchanges.
Concurrent with the reincorporation, the number
of authorized shares of Preferred Stock was increased
from 1,000,000 shares to 10,000,000 shares and the
number of
authorized shares of Common Stock was increased from
10,000,000 to 30,000,000 shares. Also, the par value of both
the Preferred and Common Stock was reduced from $1.00 to $0.01
per share and Treasury Stock was eliminated.
Basis of Presentation
The accompanying unaudited financial statements have
been prepared in accordance with the instructions to Form 10-
Q and, therefore, do not include all information and footnotes
necessary for a fair presentation of financial condition,
results of operations, and cash flows in conformity with
generally accepted accounting principles. When necessary,
reclassifications have been made to prior period balances to
conform to current period presentation.
Per Share Data
Per share data are based on the weighted average number of
common and common equivalent shares outstanding during the
period. Stock options issued under the Company's stock option
plans are considered common stock equivalents and are
included in the calculation of per share data if, upon
exercise, they would have a dilutive effect.
Note 2. Real Estate Investments
The following table sets forth the Company's real
estate investments as of March 31, 1994 (in thousands):
Less
Land Buildi Accum. Total
ng Dep
Office 2,590 $6,298 $1,666 $7,222
Buildings: $2,590 $6,303 $1,716 $7,177
IBM Building1,
Jackson, MS $6,298 $1,666 $7,222
Mariner Court, 3,221 4,433 25 7,629
Torrance, CA
Woodlands Tower 945 5,939 79 6,805
II,Salt Lake
City, UT
1000 Town Center 1,785 3,412 19 5,178
Drive Oxnard,CA
Industrial
Buildings:
Building #3
Contra Costa
Diablo 495 1,167 86 1,576
Industrial Park
Concord, CA
Building #8
Contra Costa
Diablo
Industrial Park
Concord, CA 877 1,551 115 2,313
Building #18
Mason Ind Park 610 1,274 96 1,788
Concord, CA
Cody Street
Park 380 1,251 1,511
Building #6 KS
Overland Park,
Lenexa, KS 360 2,167 2,36
Building #3
Lenexa, KS 160 $11,26 $27,49 $2,416 $36,344
3 7
1Offered for
sale
IBM Building
The Company continues to offer the IBM Building for sale.
Texas Bank North Building
In December, 1993, the Company entered into a contract to
sell the Texas Bank North Building, San Antonio, Texas, for
a cash sale price of $8,500,000, or $56 per square foot. The
sale was completed on January 14, 1994 and resulted in
a gain of $1,193,000.
Industrial Buildings
On December 5, 1990, the Company purchased five
industrial properties from Peter B. Bedford. The aggregate
purchase price of the properties to the Company was
$9,050,000, plus closing and acquisition costs.
Acquisitions
As fully discussed below, costs incurred by Mr. Bedford
in support of property acquisition are capitalized.
Woodlands II
The property, a suburban six-story office building located
in Salt Lake City, Utah, was purchased for $6,750,000, or $59
per square foot, on August 25, 1993. The Company also
recorded acquisition costs of $101,000 paid to Peter B.
Bedford, Chairman of the Board and Chief Executive Officer of
the Company (see Note 3).
1000 Town Center Drive
The property, a suburban six-story office building located
in Oxnard, California, was purchased for $5,100,000, or $47
per square foot, on December 30, 1993. The purchase price
consisted of $3,600,000 in cash and $1,500,000 to be paid
in December, 1994. The Company also recorded acquisition costs
of $77,000 paid to Peter B. Bedford, Chairman of the Board
and Chief Executive Officer of the Company (see Note 3).
Mariner Court
The property, a suburban three-story office building located in
Torrance, California, was purchased for $7,500,000, or $71 per
square foot, on January 5, 1994. The Company also recorded
acquisition costs of $113,000 paid to Peter B. Bedford,
Chairman of the Board and Chief Executive Officer of the
Company (see Note 3).
On-site maintenance of the suburban office buildings is
managed by independent property managers. With the exception
of Texas Bank North, the Company centralized financial
recordkeeping of all its properties effective July 1, 1993.
There has been no significant development in
environmental matters or proceedings since the filing of the
Coimpany's 1993 Annual Report Form 10-K.
Note 3. Related Party Transactions
In 1993, BPI Acquisitions was formed as a separate division
of the Company to engage in the solicitation of financings
and
equity capital and the acquisition of properties. The
salaries and costs associated with the division are funded by
Mr. Bedford. To the extent financings are obtained, capital
is raised, or properties are acquired, the Company pays a fee
to Mr. Bedford at a rate of one and one half (1-1/2) percent of
such transaction up to the amount advanced. Such fees, which
are capitalized, do not exceed costs incurred by Mr. Bedford
for financings, capital raising, or property acquisitions.
As of March 31, 1994, Mr. Bedford had funded $109,000 of
costs related to BPI Acquisitions net of fees.
Note 4. Bank Loan Payable
In December, 1993, the Company concluded an agreement with
Bank of America for a $20 million revolving line of credit
for real estate acquisitions. This facility, which matures on
January 1, 1997, carries an interest rate option of either
prime plus 0.75%
or an offshore interest rate, similar to LIBOR, plus 3.00%
and
is secured by deeds of trust on the Woodlands II and
IBM buildings. The outstanding amount on the facility was
$2,000,000 at March 31, 1994.
The daily weighted average amount owing to the bank
was $1,300,000 and $4,960,000 in the first three months of
1994 and 1993, respectively. The weighted average interest
rate in these periods was 6.85% and 6.40%, respectively.
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
Three Months Ended March 31, 1994 Compared with Three
Months Ended March 31, 1993
Income
Rental income for the three months ended March 31, 1994
decreased $282,000 from the same period of 1993. This
is primarily attributable to the fact that the newly
acquired buildings (Woodlands II, 1000 Town Center Drive, and
Mariner Court) have less rentable square footage and,
therefore, produce less rental income than the buildings
which were sold (University Tower, Point West Place, and
Texas Bank North). Correspondingly, rental expenses decreased
by $369,000. As a result, income from property
operations for the three months ended March 31, 1994
increased $87,000 over the same period in 1993.
Equity in joint venture partnership operations produced a loss
of $153,000 for the first three months in 1993. The
Company's ownership interests in these joint venture
partnerships were sold in May, 1993.
Expenses
Interest expense for the three months ended March 31,
1994 decreased $176,000 from the same period in 1993. The
decrease is attributable to the Company's paying off
mortgage loans in November, 1993 and lower levels of
borrowings on its bank credit facilities in 1994. General
and administrative expenses for the three months ended March
31, 1994 decreased $54,000 from the same period in 1993. The
small decrease is primarily attributable to cost savings due
to the centralization of recordkeeping at the Company's
headquarters.
Gain on Sale
On January 14, 1994, the Company sold its investment in the
Texas
Bank North Building for $8,500,000, which resulted in a gain
of $1,193,000.
Liquidity and Capital Resources
During the three months ended March 31, 1994, the
Company's operating activities, the sale of Texas Bank North
Building, and bank borrowing provided cash flow in the amount
of $18,157,000. The Company funded $7,666,000 of real estate
investments, paid down the Bank of America credit facility
of $11,059,000, and distributed dividends of $418,000. In
December, 1993, the Company secured a $20 million revolving
credit facility with Bank of America, which was used, in
part, to finance the acquisition of Mariner Court. At
March 31, 1994, the Company was in compliance with
covenants and requirements of its revolving credit facility
with Bank of America.
The Company anticipates that the cash flow generated by its
real estate investments and funds available under the above
credit facility will be sufficient to meet its short-term
liquidity requirements.
The capital resources for long-term liquidity
requirements, including the repayment of the revolving credit
facility, may be provided by some or all of the following:
(a) the cash flow generated by the Company's real estate
investments, (b) other bank borrowings, (c) the financing
of real estate investments, (d) the sale of real estate
investments, and (e) sale of new equity.
The ability to obtain mortgage loans on income producing
property is dependent upon the ability to attract and retain
tenants and the economics of the various markets in which the
properties are located, as well as the willingness of
mortgage lending institutions to make loans secured by real
property. The ability to sell real estate investments is
partially dependent upon the ability of purchasers to obtain
financing.
Dividends
Dividends declared for the first quarter 1994 and payable in
the second quarter were $0.08 per share.
Funds from Operations
Funds from Operations (FFO) during the three months ended
March 31, 1994 amounted to $839,000 compared to $535,000 for
the same period in 1993. Funds from Operations, as
adopted by the National Association of Real Estate Investment
Trusts, is defined as net income, excluding gains or losses
from debt restructuring and sales of property, plus
depreciation and amortization, after adjustments for
unconsolidated ventures.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior
Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit No. Exhibit
2.1 Agreement and Plan of Merger dated July 1,
1993
between ICM Property Investors Incorporated, a
Delaware Corporation, and Bedford Property
Investors, Inc., a Maryland Corporation, is
incorporated herein by reference to the Company's
registration statement on Form 8-B/A filed March 6,
1994.
3.1 Articles of Incorporation of Bedford
Property
Investors, Inc. are incorporated herein by reference
to the Company's registration statement on Form 8-B/A
filed
March 6, 1994.
3.2 Bylaws of Bedford Property Investors, Inc.
are
incorporated herein by reference to the
Company's
registration statement on Form 8-B/A filed March 6, 1994.
4.3 Registration Rights Agreement dated as of
December
5, 1990, between ICM Property Investors Incorporated
and Peter B. Bedford is incorporated herein by
reference to Exhibit D filed with the Company's
Form 8-K dated
December 13, 1990.
10.2 The Company's Automatic Dividend Reinvestment and
Share Purchase Plan, as adopted by the Company, is
incorporated herein by reference to Exhibit 4.1 filed
with Amendment No. 2 to the Registration Statement
No. 2-94354 of ICM Property Investors Incorporated
dated January 25, 1985.
10.3 Contract of Sale dated July 31, 1992 by and among
ICMPI (Irvine) Inc. as Seller and In-N-Out Burger,
Inc. and Rich Snyder, Revocable InterVivos Trust
U.D.T 10/11/89, jointly and severally as Purchaser for
University Tower, is incorporated herein by reference
to the Company's Form 10-Q for the quarter ended
September 30, 1993 and amended on Form 8-K/A(2) on March
21, 1994.
10.4 Real Estate Purchase and Sale Agreement dated June
4, 1993 by and between Bay Street Number Two,
Ltd., as Seller, and ICM Property Investors
Incorporated, as
Purchaser, for Woodlands Tower II and
Woodlands
Commercial Center, Plan II and Related Properties,
filed with the Company's Form 8-K filed on August 31,
1993 and amended certain items reported on Form 8-
K/A(2) on March 21, 1994.
10.5 1989 ICM Property Investors Incorporated Share
Equivalent Plan (as Amended and Restated as of January
1, 1991), as adopted by the Company, incorporated
herein by reference to Exhibit 10.6 to the Company's
quarterly report on Form 10-Q filed for the quarter
ended September 30, 1993.
10.6 Bedford Property Investors, Inc. Employee Stock
Option
Plan, effective September 16, 1985, amended as of June
9, 1993, as adopted by the Company on September 27,
1993, and amended and restated as of February 7,
1994
incorporated herein by reference to the
Company's
registration statement on Form 8-B/A filed March 6,
1994.
10.7 Bedford Property Investors, Inc. Directors' Stock
Option
Plan effective May 20, 1992, as adopted by the Company
on September 27, 1993 and amended and restated as
of
February 7, 1994 incorporated herein by reference to
the Company's registration statement on Form 8-B/A
filed March 6, 1994.
10.9 Purchase and Sale Agreement dated December 14, 1993,
by
and between NCEC Realty, Inc., as Seller, and
Bedford Property Investors, Inc., as Purchaser, for
1000 Town Center Drive is incorporated herein by
reference to the Company's Form 8-K filed January 13,
1994 and amended on Form 8-K/A on March 17, 1994.
10.10 Purchase and Sale Agreement dated January 5, 1994, by
and between Mariner Court Associates, as Seller, and
Bedford Property Investors, Inc., as Purchaser, for
Mariner Court is incorporated herein by reference to
the Company's Form 8-K filed January 13, 1994 and
amended on Form 8-K/A filed March 17, 1994.
10.11 Agreement to Purchase Real Property dated June 11,
1993, by and between Country Hollow Associates, as
Seller, and A.S., Inc., as Purchaser, for Texas Bank
North Building is incorporated herein by reference to
the Company's Form 8-K filed January 27, 1994.
B. Reports on Form 8-K
For the quarter ended March 31, 1994, the Company filed
a report on Form 8-K dated December 30, 1993,
announcing the acquisitions of 1000 Town Center Drive
and Mariner Court.
During the quarter ended March 31, 1994, the
Company filed a report on Form 8-K dated January
14, 1994 relating to the sale of Texas Bank North.
During the quarter ended March 31, 1994, the
Company filed a report on Form 8-K on March 17,
1994 which amended items reported on Form 8-K dated
December 30, 1993 regarding the acquisition of 1000
Town Center Drive and Mariner Court.
During the quarter ended March 31, 1994, the
Company filed a report on Form 8-K/A(2) on March 21,
1994 to amend items reported on Form 8-K dated August
18, 1993 and filed August 31, 1993 regarding the
sale of
University Tower and the acquisition of Woodlands II.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, Sections 13 or 15(a), Registrant has duly caused
this report to be signed on its behalf by the undersigned
thereunto
duly authorized.
Dated: May 11, 1994
BEDFORD PROPERTY INVESTORS, INC.
(Registrant)
By:______________________________
__ Peter B. Bedford
Chief Executive Officer and
Chairman of the Board
By: _____________________________
__ Jay Spangenberg
Chief Financial Officer
(Principal Financial
Officer)
By: _____________________________
__ Hanh Kihara
Controller
(Principal Accounting
Officer)
