SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 1996
BEDFORD PROPERTY INVESTORS, INC.
(Exact name of Registrant as specified in its charter)
Maryland 1-12222 68-0306514
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
270 Lafayette Circle, Lafayette, California 94549
(Address of principal executive offices)
Registrant telephone number, including area code: (510) 283-8910
<PAGE>
The undersigned Registrant hereby amends its Report on Form 8-K, filed
January 9, 1997, as follows:
Item 5. Other Events
The registrant hereby amends Item 5 with the additional
disclosure: On January 15, 1997, Bedford Property Investors,
Inc. (the Company) acquired 6500 Kaiser Drive, a 78,600 square
foot research and development building located in Fremont,
California from AB REO IV, L.L.C. for $7,845,000. The
acquisition was financed with borrowings from the credit
facility with Bank of America.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits. The registrant hereby amends Item 7 by deleting
sub parts (a) and (b) in their entirety and replacing such
sections with:
(a) Financial Statements
The combined Historical Summary of Gross Income and Direct
Operating Expenses of O'Toole Business Center, Signal
Systems Building and 6500 Kaiser Drive for the Year Ended
December 31, 1995 (see Attachment A).
(b) Pro Forma Financial Information
The pro forma consolidated balance sheet as of September
30, 1996 and pro forma consolidated income statements for
the nine months ended September 30, 1996 and the year ended
December 31, 1995, showing the effect resulting of the
acquisitions of Napa Lots 10A and 12K and J, Doherty
Avenue, O'Toole Business Center, Panorama Business Center,
Signal Systems Building and 6500 Kaiser Drive and the sale
of St. Paul Business Center East and West (see Attachment
B).
(c) Exhibit
23.1 Consent of KPMG, Peat Marwick LLP
SIGNATURE
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, hereunto duly authorized.
BEDFORD PROPERTY INVESTORS, INC.
By: /s/ Donald A. Lorenz
Donald A. Lorenz
Executive Vice President and
Chief Financial Officer
Date: February 4, 1997
<PAGE>
Attachment A
O'Toole Business Center, Signal System Building,
and 6500 Kaiser Drive
COMBINED HISTORICAL SUMMARY OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
Year Ended December 31, 1995
CONTENTS
Independent Auditors' Report 1
Combined Historical Summary of Gross
Income and Direct Operating Expenses 2
Notes to Combined Historical Summary of
Gross Income and Direct Operating Expenses 2-3
<PAGE>
Independent Auditors' Report
The Board of Directors
Bedford Property Investors, Inc:
We have audited the accompanying combined historical summary of gross
income and direct operating expenses (the Summary) of O'Toole Business
Center, Signal System Building and 6500 Kaiser Drive (the Properties)
for the year ended December 31, 1995. The Summary is the
responsibility of management. Our responsibility is to express an
opinion on the Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Summary is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Summary. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall Summary presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying Summary was prepared to comply with the rules and
regulations of the Securities and Exchange Commission and excludes
certain expenses, described in note A, that would not be comparable to
those resulting from the proposed future operations of the Properties.
In our opinion, the Summary referred to above presents fairly, in all
material respects, the gross income and direct operating expenses,
exclusive of expenses described in note A, of the Properties for the
year ended December 31, 1995, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
San Francisco, California
January 31, 1997
<PAGE>
Combined Historical Summary of Gross Income
and Direct Operating Expenses
O'Toole Business Center, Signal Systems Building,
and 6500 Kaiser Drive
Year Ended December 31, 1995
Gross income:
Rental income $1,550,508
Common area reimbursement 308,049
Other 248
1,858,805
Direct operating expenses:
Real property tax 340,294
Repairs and maintenance 96,489
Utilities 46,223
Insurance 56,068
Administrative 9,993
Miscellaneous 45,221
594,288
Operating income $1,264,517
Notes to Combined Historical Summary of Gross Income and Direct
Operating Expenses
A. Property and Basis of Accounting
The Combined Historical Summary of Gross Income and Direct
Operating Expenses has been prepared in accordance with Rule 3-14
of Regulation S-X of the Securities and Exchange Commission and
relates to the operations of O'Toole Business Center, Signal
Systems Building and 6500 Kaiser Drive (the Properties).
In accordance with Rule 3-14, direct operating expenses are
presented exclusive of depreciation, interest, management fees and
income taxes as these expenses would not be comparable to the
proposed future operations of the property.
The acquisition of the Properties may result in new valuations for
purposes of determining future property tax assessments.
Rental income of the Properties is recognized on a straight line
basis over the term of the related leases. For 1995, contractual
rentals exceeded aggregate rental income on a straight-line basis
by $72,533.
B. Leases
Minimum future rental receipts of the Properties as of December
31, 1995 are as follows (in thousands):
1996 $ 1,607
1997 1,480
1998 574
1999 248
2000 and thereafter 179
$ 4,088
The minimum future rental receipts shown above do not include
tenants obligations for reimbursement of operating expenses,
insurance and real estate taxes.
C. Estimated Taxable Operating Results and Cash to be Made Available
by Operations (unaudited)
Pro forma cash available from operations and pro forma taxable
income for 1996 are shown below. Pro forma taxable operating
results are derived by deducting depreciation over 39 years; however,
as a Real Estate Investment Trust (REIT), Bedford Property Investors,
Inc. is not subject to federal income tax if it qualifies under the
Internal Revenue Code (Code) REIT provisions. Bedford Property
Investors, Inc. intends to pay dividends in amounts that exceed 95%
of taxable income requirements. Dividends paid to the REIT
shareholders are classified as return of capital, dividend income
or capital gains.
Revenues (1) $1,931,338
Operating expenses 594,288
Pro forma cash available
from operations 1,337,050
Depreciation expense 498,029
Pro forma taxable income $ 839,021
(1) Includes $72,533 which represents the excess of aggregate
contractual rents over rental income on a straight-line basis.
<PAGE>
<TABLE>
Attachment B
BEDFORD PROPERTY INVESTORS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(Unaudited)
(in thousands, except share and per share amounts)
<S> <C> <C> <C> <C> <C>
Consolidated Properties Properties Proforma Consolidated
Historical Acquired (1) Sold (2) Adjustment (3) Pro Forma
ASSETS:
Real estate investments:
Industrial buildings - held for investment $122,001 $54,965 $ - $ - $176,966
Office buildings 52,677 - - - 52,677
Industrial buildings - held for sale 6,355 - (6,355) - -
Retail buildings 6,281 - - - 6,281
187,314 54,965 (6,355) - 235,924
Less accumulated depreciation 4,150 - (82) - 4,068
183,164 54,965 (6,273) - 231,856
Cash 1,127 - - (481) 646
Other assets 5,654 - (65) 625 6,214
$189,945 $54,965 $ (6,338) $ 144 $238,716
LIABILITIES AND STOCKHOLDERS' EQUITY:
Bank loan payable 30,754 50,821 (6,189) (24,856) 50,530
Mortgage loan payable 25,000 1,850 - 25,000 51,850
Accounts payable and accrued expenses 2,349 269 (88) - 2,530
Dividend payable 2,815 - - - 2,815
Acquisition payable 3,000 - - - 3,000
Other liabilities 2,480 316 (82) - 2,714
Total liabilities 66,398 53,256 (6,359) 144 113,439
Redeemable preferred stock:
Series A convertible preferred stock, par value
$0.01 per share; authorized 10,000,000 shares;
issued and outstanding 8,333,334 shares;
aggregate redemption amount $50,000; aggregate
liquidation preference $52,500. 50,000 - - - 50,000
Minority interest in consolidated partnership,
convertible into 108,495 shares of common stock - 1,709 - - 1,709
Common stock and other stockholders' equity:
Common stock, par value $0.02 per share;
authorized 15,000,000 shares, issued
and outstanding, 6,501,325 shares 130 - - - 130
Additional paid-in capital 147,744 - - - 147,744
Accumulated losses and distributions
in excess of net income (74,327) - 21 - (74,306)
Total common stock and
other stockholders' equity 73,547 - 21 - 73,568
$189,945 $54,965 $(6,338) $ 144 $238,716
See accompanying notes to pro forma financial statements.
</TABLE>
BEDFORD PROPERTY INVESTORS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
(in thousands, except share and per share amounts)
<TABLE>
<S> <C> <C> <C> <C> <C>
Consolidated Properties Properties Pro Forma Pro Forma
Historical Acquired (4) Sold (5) Adjustments Consolidated
Property operations:
Rental income $19,168 $7,890 $(1,083) $ - $25,975
Rental expenses:
Operating expenses 3,797 835 (191) - 4,441
Real estate taxes 1,823 766 (257) - 2,332
Depreciation and amortization 2,114 985 (85) - 3,014
Income from property operations 11,434 5,304 (550) - 16,188
General and administrative expenses (1,341) - - - (1,341)
Interest income 105 - - - 105
Interest expense (2,692) - - (3,791) (6) (6,483)
Income before gain on sale 7,506 5,304 (550) (3,791) 8,469
Gain (loss) on sale of real
estate investments 359 - (41) - 318
Net income $ 7,865 $5,304 $ (591) $(3,791) $ 8,787
Net income applicable to common
stockholders* $ 4,490 $5,304 $ (591) $(3,871) (6) $ 5,332
Primary earnings per common and
common equivalent share* $ 0.87 $ 0.81
Weighted average number of common
and common equivalent shares
outstanding** 5,161,087 6,554,423
Earnings per common share - assuming
full dilution $ 0.84 $ 0.81
Weighted average number of common
shares - assuming full dilution** 9,323,223 10,825,054
See accompanying notes to pro forma financial statements.
</TABLE>
* Reflects dividends of $3,375 on $50,000 preferred stock issued on
September 18, 1995, and $80 of distributions on partnership units.
** Reflects the one-for-two reverse stock split effective March 29, 1996.
<TABLE>
BEDFORD PROPERTY INVESTORS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1995
(Unaudited)
(in thousands, except share and per share amounts)
<S> <C> <C> <C> <C> <C>
Consolidated Properties Properties Pro Forma Pro Forma
Historical Acquired (7) Sold (8) Adjustments Consolidated
Property operations:
Rental income $11,695 $23,736 $(2,491) $ - $32,940
Rental expenses:
Operating expenses 2,744 3,134 (587) - 5,291
Real estate taxes 1,105 2,548 (469) - 3,184
Depreciation and amortization 1,484 2,556 (316) - 3,724
Income from property operations 6,362 15,498 (1,119) - 20,741
General and administrative expenses (1,457) - - - (1,457)
Interest income 226 - - - 226
Interest expense (1,594) - - (7,253) (9) (8,847)
Income before loss on sale 3,537 15,498 (1,119) (7,253) 10,663
Loss on sale of real estate
investments (642) - (250) - (892)
Net income $ 2,895 $15,498 $(1,369) $ (7,253) $ 9,771
Net income applicable to common
stockholders $ 1,607 $15,498 $(1,369) $(10,554) $ 5,182 (10)
Primary earnings per common and
common equivalent share $ 0.52 $ 0.80
Weighted average number of common
and common equivalent shares
outstanding 3,089,549 6,439,549 (11)
See accompanying notes to pro forma financial statements.
</TABLE>
<PAGE>
BEDFORD PROPERTY INVESTORS, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
PRO FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996
(1) The unaudited pro forma consolidated balance sheet reflects the
acquisition of (i) Carroll Tech Center located in San Diego,
California, (ii) 47633 Westinghouse Drive located in Fremont,
California, (iii) Vista Buildings 1 and 2 located in Vista,
California, (iv) Napa lots 10A and 12J and K located in Napa,
California, (v) Doherty Avenue located in Modesto, California,
(vi) O'Toole Business Center located in San Jose, California,
(vii) Panorama Business Center located in Kansas City, Missouri,
(viii) Signal Systems Building located in San Diego, California
and (ix) 6500 Kaiser Drive located in Fremont, California
as if such acquisitions had occurred on September 30, 1996.
The Company acquired Carroll Tech Center on October 7, 1996,
47633 Westinghouse Drive on October 15, 1996,
Vista Buildings 1 and 2 on October 17, 1996, Napa lots 10A and 12J
and K on December 10, 1996, Doherty Avenue on December 17, 1996,
O'Toole Business Center and Panorama Business Center on December
18, 1996, Signal Systems Building on December 31, 1996 and 6500
Kaiser Drive on January 15, 1997.
The combining balance sheet for these acquisitions as of September
30, 1996 is as follows (in thousands):
<TABLE>
<S> <C> <C> <C> <C>
47633 Vista Subtotal
Carroll Tech Westinghouse Buildings carried
Center Drive 1 and 2 forward
Assets:
Real estate investment:
Industrial buildings - held
for investment $7,151 $5,914 $5,179 $18,244
$7,151 $5,914 $5,179 $18,244
Liabilities and stockholders'
equity:
Bank loan payable 7,107 5,894 5,117 18,118
Accounts payable and
accrued expenses 19 20 18 57
Other liabilities 25 - 44 69
Total liabilities 7,151 5,914 5,179 18,244
Minority interest in consolidated
partnership - - - -
$7,151 $5,914 $5,179 $18,244
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Subtotal O'Toole Panorama Signal
brought Napa Lots Doherty Business Business Systems 6500 Kaiser
forward 10A and 12J & K Avenue Center Center Building Drive Total
Assets:
Real estate investment:
Industrial buildings - held
for investment $18,244 $2,112 $3,695 $9,682 $3,773 $9,492 $7,967 $54,965
$18,244 $2,112 $3,695 $9,682 $3,773 $9,492 $7,967 $54,965
Liabilities and stockholders'
equity:
Bank loan payable 18,118 2,082 - 9,576 3,718 9,395 7,932 50,821
Mortgage loan payable - - 1,850 - - - - 1,850
Accounts payable and accrued
expenses 57 30 68 24 29 26 35 269
Other liabilities 69 - 68 82 26 71 - 316
Total liabilities 18,244 2,112 1,986 9,682 3,773 9,492 7,967 53,256
Minority interest in
consolidated partnership - - 1,709 - - - - 1,709
$18,244 $2,112 $3,695 $9,682 $3,773 $9,492 $7,967 $54,965
</TABLE>
<PAGE>
Consolidated pro forma real estate investments as of
September 30, 1996 include capitalized fees of $811,600 paid
by the Company to Bedford Acquisitions, Inc. (BAI or
Bedford Acquisitions), a corporation wholly owned by Mr.
Bedford, in connection with the Company's acquisition of Carroll
Tech Center, 47633 Westinghouse Drive and Vista Buildings 1 and
2, Napa lots 10A and 12J and K, Doherty Avenue, O'Toole Business
Center, Panorama Business Center, Signal Systems Building and 6500
Kaiser Drive.
(2) The unaudited pro forma consolidated balance sheet reflects the
sale of St. Paul East and West as if such transaction had occurred
on September 30, 1996. The Company sold these properties on
December 31, 1996. The proceeds of the sale were used to pay down
the credit facility.
(3) The unaudited pro forma consolidated balance sheet reflects the
mortgage financing of $25,000,000 from Union Bank and the paydown
of the company's credit facility as if such transactions had
occurred on September 30, 1996. The Company incurred loan fees of
$625,000, of which $356,000 was paid to BAI, in securing the
mortgage financing from Union Bank on December 31, 1996.
PROFORMA CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996
(4) The unaudited pro forma consolidated statement of income reflects
the property acquisitions through December 31, 1996 and probable
acquisitions as of December 31, 1996 as if they had occurred on
January 1, 1996. The Company acquired (i) Laguna Hills Square on
March 27, 1996, (ii) Westech Business Center on April 25, 1996,
(iii) 100 View Street on May 3, 1996, (iv) Fourier Avenue on May
30, 1996, (v) Lenexa land on June 4, 1996, (vi) Lundy Avenue on
July 9, 1996, (vii) Phoenix land on July 30, 1996, (viii) Kenyon
Center, 115 Mason Circle and 47600 Westinghouse Drive on September
5, 1996, (ix) 860-870 Napa Valley Corporate Way on September 19,
1996, (x) Carroll Tech Center on October 7, 1996, (xi) 47633
Westinghouse Drive on October 15, 1996, (xii) Vista Buildings 1
and 2 on October 17, 1996, (xiii) Napa Lots 10A and 12J and K on
December 10, 1996, (xiv) Doherty Avenue on December 17, 1996, (xv)
O'Toole Business Center and Panorama Business Center on December
18, 1996, (xvi) Signal Systems Building on December 31, 1996 and
(xvii) 6500 Kaiser Drive on January 15, 1997.
The combining historical statement of income for the period from
January 1, 1996 through the date of acquisition for the properties
acquired from January 1 through September 30, 1996 is as follows
(in thousands):
<TABLE>
<S>
<C> <C> <C> <C> <C> <C> <C>
Laguna Hills Westech 100 View Fourier Lenexa Lundy Subtotal
Square Business Center Street Avenue Land Avenue carried forward
Rental income $294 $374 $306 $434 $ - $274 $1,682
Rental expenses:
Operating expenses 74 63 83 21 - 34 275
Real estate taxes 9 28 17 33 3 29 119
Depreciation and
amortization 20 33 23 65 - 24 165
$191 $250 $183 $315 $(3) $187$1,123
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Total
860-870 properties
Subtotal 47600 Napa Valley acquired from
brought Phoenix Kenyon 115 Mason Westinghouse Corporate Jan. 1 through
forward Land Center Circle Drive Way Sept. 30, 1996
Rental income $1,682 $ - $788 $142 $119 $399 $3,130
Rental expenses:
Operating expenses 275 - 26 21 14 61 397
Real estate taxes 119 6 - 14 10 74 223
Depreciation and
amortization 165 - 107 13 16 52 353
$1,123 $ (6) $655 $ 94 $ 79 $212 $2,157
</TABLE>
The combining historical statement of income for the first nine
months of 1996 for properties acquired after September 30, 1996
and the statement summarizing all the acquisitions are as follows
(in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Carroll 47633 Vista Napa Subtotal
Tech Westinghouse Westinghouse Buildings Lots 10A and Doherty carried
Center Drive Land 1 and 2 12J & K Avenue forward
Rental income $801 $472 $ - $391 $ - $ 406 $2,070
Rental expenses:
Operating expenses 77 14 - 10 - 26 127
Real estate taxes 58 40 11 - 91 43 243
Depreciation and
amortization 82 54 - 66 - 54 256
$584 $364 $ (11) $315 $ (91) $ 283 $1,444
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Total
properties properties
Subtotal O'Toole Panorama Signal 6500 acquired acquired from Total
brought Business Business Systems Kaiser after Sept. Jan. 1 through properties
forward Center Center Building Drive 30, 1996 Sept. 30, 1996 acquired
Rental income $2,070 $847 $543 $752 $548 $4,760 $3,130 $7,890
Rental expenses:
Operating expenses 127 119 114 43 35 438 397 835
Real estate taxes 243 71 88 74 67 543 223 766
Depreciation and
amortization $ 256 96 52 121 107 632 353 985
$1,444 $561 $289 $514 $339 $3,147 $2,157 $5,304
</TABLE>
The pro forma amounts are generally based on historical data.
Depreciation and amortization expense is calculated on a pro forma
basis, based on acquisition cost. Incremental costs of managing
the acquired properties are reflected in the property operating
expenses.
(5) The unaudited pro forma consolidated statement of income
reflects the elimination of the actual results of the operations
of St. Paul East and West from January 1 through September 30, 1996.
The statement also reflects the loss on the sale as if the sale had
occurred on January 1, 1996. The Company sold St. Paul East and
West on December 31, 1996.
(6) The unaudited pro forma consolidated statement of income reflects
the effects of the sale of 3,350,000 shares of common stock at
$13.00 per share and the mortgage loan financings of $51,850,000
as if they had occurred on January 1, 1996. Net proceeds of the
common stock sale, the mortgage loan financings, the sale of St. Paul
East and West and borrowings of $50,000,000 on the credit facility
were utilized to finance the Company's acquisition of real estate
investments during the first nine months of 1996. The sale
of 3,350,000 shares of common stock was completed on April 24, 1996.
The $25,000,000 mortgage financing from Prudential Insurance of America
was completed on May 31, 1996. The $25,000,000 mortgage financing
from Union Bank was completed on December 31, 1996. The acquisition
of Doherty Avenue was financed with a $1,850,000 mortgage
loan and the issuance of partnership units convertible to
108,495 shares of common stock.
The pro forma consolidated interest expense consists of the
amortization of loan fees incurred for the amendment and expansion
of the credit facility to $100,000,000, amortization of loan fees
incurred to secure the mortgage loans, and interest expense
incurred on the mortgage loans and borrowings on the credit
facility.
PRO FORMA CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER
31, 1995
(7) The unaudited pro forma consolidated statement of income reflects
the property acquisitions in 1995 as if they had occurred on
January 1, 1995. The Company acquired (i) 350 East Plumeria Drive and
Lackman Business Center on September 19, 1995, (ii) Ninety-Ninth
Street #1 and Ninety-Ninth Street #2 on September 20, 1995, (iii) 6600
College Boulevard on October 6, 1995, (iv) 3002 Dow Business Center
on December 5, 1995 and (v) the Landsing Pacific Portfolio on
December 14, 1995.
The combining historical statement of income for the period from
January 1, 1995 through the date of acquisition for these
properties is as follows (in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Ninety- Total
350 East Lackman Ninth 6600 3002 Dow Landsing properties
Plumeria Business Street College Business Pacific acquired
Drive Center #1 and #2 Boulevard Center Portfolio in 1995
Rental income $1,001 $269 $326 $831 $1,552 $7,056 $11,035
Rental expenses
Operating expenses 35 41 30 105 210 1,037 1,458
Real estate taxes 104 46 49 112 189 801 1,301
Depreciation and
amortization 79 27 35 66 152 616 975
Income from property
operations $ 783 $155 $212 $548 $1,001 $4,602 $ 7,301
</TABLE>
The unaudited pro forma consolidated statement of income reflects
the property acquisitions through December 31, 1996 and probable
acquisitions as of December 31, 1996 as if they had occurred on
January 1, 1995. The Company acquired (i) Laguna Hills Square on
March 27, 1996, (ii) Westech Business Center on April 25, 1996,
(iii) 100 View Street on May 3, 1996, (iv) Fourier Avenue on May
30, 1996, (v) Lenexa land on June 4, 1996, (vi) Lundy Avenue on
July 9, 1996, (vii) Phoenix land on July 30, 1996, (viii) Kenyon
Center, 115 Mason Circle and 47600 Westinghouse Drive on
September 5, 1996, (ix) 860-870 Napa Valley Corporate Way on
September 19, 1996, (x) Carroll Tech Center on October 7, 1996,
(xi) 47633 Westinghouse Drive on October 15, 1996, (xii) Vista
Buildings 1 and 2 on October 17, 1996, (xiii) Napa lots 10A and
12J and K on December 10, 1996 (xiv) Doherty Avenue on December 17,
1996 (xv) O'Toole Business Center and Panorama Business Center on
December 18, 1996 (xvi) Signal Systems Building on December 31, 1996
and (xvii) 6500 Kaiser Drive on January 15, 1997.
The combining historical statement of income for the twelve
months of 1995 for these properties is as follows (in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Westech Subtotal
Laguna Hills Business 100 View Fourier Lenexa Lundy Phoenix Kenyon carried
Square Center Street Avenue Land Avenue Land Center forward
Rental income $1,080 $1,115 $640 $1,041 $ - $494 $ - $1,141 $5,511
Rental expenses:
Operating expenses 345 194 240 51 - 60 - 40 930
Real estate taxes 60 90 67 80 6 57 11 - 371
Depreciation and
amortization 82 100 70 156 - 49 - 161 618
$ 593 $ 731 $263 $ 754 $ (6) $328 $ (11) $ 940 $3,592
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
47600 860-870 47633
Subtotal Westing- Napa Valley Westing- Westing- Vista Subtotal
brought 115 Mason house Corporate Carroll Tech house house Buildings carried
forward Circle Drive Way Center Drive Land 1 and 2 forward
Rental income $5,511 $201 $174 $399 $1,170 $629 $ - $491 $8,575
Rental expenses:
Operating expenses 930 30 26 103 105 20 - 13 1,227
Real estate taxes 371 20 18 91 102 53 15 - 670
Depreciation and
amortization 618 20 24 78 109 72 - 88 1,009
$3,592 $131 $106 $127 $ 854 $484 $ (15) $390 $5,669
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Subtotal Napa lots O'Toole Panorama Signal 6500 Total properties
brought 10A and Doherty Business Business Systems Kaiser acquired
forward 12J & K Avenue Center Center Building Drive in 1996
Rental income $8,575 $ - $541 $1,129 $724 $1,002 $730 $12,701
Rental expenses:
Operating expenses 1,227 - 35 159 152 57 46 1,676
Real estate taxes 670 121 57 95 117 98 89 1,247
Depreciation and
amortization 1,009 - 72 128 69 161 142 1,581
$5,669 $ (121) $377 $ 747 $386 $ 686 $453 $ 8,197
</TABLE>
The statement summarizing the operating results for the twelve
months of 1995 for all acquisitions made during 1995 and 1996 is
as follows (in thousands):
Total Total
Properties Properties Total
Acquired Acquired Properties
in 1995 in 1996 Acquired
Rental income $11,035 $12,701 $23,736
Rental expenses:
Operating expenses 1,458 1,676 3,134
Real estate taxes 1,301 1,247 2,548
Depreciation and
amortization 975 1,581 2,556
$ 7,301 $ 8,197 $15,498
The pro forma amounts are generally based on historical data.
Depreciation and amortization expense is calculated on a pro forma basis,
based on acquisition cost. Incremental costs of managing the acquired
properties are reflected in the property operating expenses.
(8) The unaudited pro forma consolidated statement of income reflects
the elimination of the actual results of operations of Cody
Street Park and the IBM Building from January 1, 1995 through the
date of sale. The statement reflects the elimination of the
actual results of operations of St. Paul East and West from
December 14, 1995 to December 31, 1995 and the pro forma results
of operations from January 1, 1995 to December 14, 1995. The
statement also reflects the loss on the sales of Cody Park, the
IBM Building and St. Paul East and West as if the sales had
occurred on January 1, 1995. St. Paul East and West were part of
the Landsing Pacific Portfolio which was purchased on December
14, 1995. The Company sold Cody Street Park on September 20,
1995, the IBM Building on October 2, 1995, and St. Paul East and
West on December 31, 1996.
The combining historical statement of income from January 1, 1995
through the date of sale for Cody Street Park and the IBM
Building and for 1995 for St. Paul East and West is as follows
(in thousands):
<TABLE>
<S> <C> <C> <C> <C>
IBM St. Paul
Cody Street Park Building East and West Total
Rental income . . . . . . . . . . . . $146 $939 $1,406 $2,491
Rental expenses:
Operating expenses . . . . . . . . 13 308 226 587
Real estate taxes. . . . . . . . . 25 118 326 469
Depreciation and amortization . . 45 178 93 316
Income from property operations . . . $ 63 $335 $ 721 $1,119
</TABLE>
(9) The unaudited pro forma consolidated statement of income reflects
the effects of the sale of 3,350,000 shares of common stock at
$13.00 per share, the mortgage loan financings of $51,850,000 and
the sale of the $50,000,000 Convertible Preferred Stock as if
they had occurred on January 1, 1995. Net proceeds of the sale
of common stock and convertible preferred stock, the mortgage
loan financings and borrowings of $50,000,000 on the credit
facility were utilized to finance the Company's acquisitions of
real estate investments during 1995 and 1996. The sale of the
$50,000,000 Convertible Preferred Stock was completed on
September 18, 1995, the sale of the 3,350,000
shares of common stock on April 24, 1996, the mortgage loan
financing from Prudential Insurance Company of America on May 31,
1996, and the mortgage loan financing from Union Bank on December
31, 1996. The acquisition of Doherty Avenue was financed with a
$1,850,000 mortgage loan and the issuance of partnership units
convertible to 108,495 shares of common stock.
The pro forma consolidated interest expense consists of the
amortization of loan fees incurred for the amendment and
expansion of the credit facility to $100,000,000, amortization of
loan fees incurred to secure the mortgage loans, and interest
expense incurred on the mortgage loans and borrowings on the
credit facility.
(10) Net income applicable to common stockholders shown on the pro
forma consolidated statement of income reflects the 9% dividends
($4,500,000) accrued to the holders of the convertible
preferred stock less accrued dividends reflected in the
historical column of $1,288,000, and $89 distributions to the
holders of the partnership units convertible to 108,495 shares of
common stock.
(11) The weighted average number of common and common equivalent
shares outstanding shown on the pro forma consolidated statement
of income reflects the Company's one-for-two reverse stock split
that took place on March 29, 1996. There was no dilutive effect
from the convertible preferred stock and the partnership units,
assuming conversion; therefore, no fully diluted data per share
was presented.
Exhibit 23.1
Consent of Independent Certified Public Accountants
The Board of Directors
Bedford Property Investors, Inc.:
We consent to incorporation by reference in the registration statement
(No. 333-15233) on Form S-3 and related prospectus of Bedford Property
Investors, Inc. of our report dated January 31, 1997, with respect to the
Combined Historical Summary of Gross Income and Direct Operating Expenses
of O'Toole Business Center, Signal Building and 6500 Kaiser Drive for the
year ended December 31, 1995, which report appears in the Form 8-K/A of
Bedford Property Investors, Inc. filed on February 4, 1997.
KPMG, Peat Marwick LLP
San Francisco, California
February 4, 1997
