<PAGE> 1
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
DATE OF REPORT (Date of earliest event reported): December 4, 1996
(January 3, 1996)
SPIEKER PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 1-12528 94-3185802
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
2180 SAND HILL ROAD, MENLO PARK, CA 94025
(Address of principal executive offices) (Zip code)
(415) 854-5600
(Registrant's telephone number, including area code)
<PAGE> 2
SPIEKER PROPERTIES, INC.
CURRENT REPORT
ON
FORM 8-K
ITEM 5. OTHER EVENTS
The following operating properties were or are to be acquired by Spieker
Properties, L.P. from unrelated parties between July 12, 1996, and December
31, 1996. Spieker Properties, Inc. (the "Company") owns an approximate 84.9%
general partners' interest in Spieker Properties, L.P. (the "Operating
Partnership" and collectively referred to as the "Company"):
Three Property Acquisitions
Stadium Plaza, a 769,003 square foot thirty-nine-building industrial project
located in Anaheim, California, was acquired on August 28, 1996, for $38.4
million.
Central Park Plaza, a 305,918 square foot six-building office project located in
San Jose, California, is under contract to be acquired and this acquisition is
expected to be completed in late 1996 for $34.0 million.
Mission Land Company Office Portfolio, which consists of two projects -- One
Lakeshore Centre, a 175,840 square foot office building located in Ontario,
California, and Corona Corporate Center, a 46,227 square foot office building
located in Corona, California -- is under contract to be acquired and this
acquisition is expected to be completed in late 1996 for $22.8 million.
Five Acquired Properties
MacArthur Park, a 93,158 square foot four-building industrial project located
in Santa Ana, California, was acquired on August 19, 1996, for $6.2 million.
Fairchild Corporate Center, a 104,973 square foot office building located in
Irvine, California, was acquired on August 28, 1996, for $10.1 million.
Charcot Business Center, a 163,370 square foot four-building industrial project
located in San Jose, California, was acquired on October 22, 1996, for $11.9
million.
New York Life Portfolio, which consists of two projects -- Airport Service
Center, a 36,310 square foot industrial building located in Burlingame,
California, and Kifer Road Industrial Park, a 287,300 square foot four-building
industrial project located in Sunnyvale, California -- was acquired on
November 1, 1996, for $16.8 million.
One Pacific Plaza, a 94,540 square foot office building and two restaurants
totaling 17,100 square feet located in Huntington Beach, California, was
acquired on November 8, 1996, for $10.1 million.
The properties were or are to be acquired using funds provided by the Company's
unsecured revolving line of credit and the issuance of unsecured investment
grade rated debt.
The costs shown above for each acquisition represent the initial cost at the
time of acquisition.
The Company believes these acquisitions are consistent with the Company's
objective of becoming the preeminent real estate operating company focusing on
industrial and suburban office property in California and the Pacific Northwest.
In assessing the properties acquired, the Company considered current operations,
including occupancy levels, rental rates, expenses and ongoing capital
requirements. Further, the Company's management considered the rental market for
the type and location of the acquired property and, where applicable, the cost
of building improvements.
Although no single acquisition is considered a "significant acquisition"
pursuant to the rules governing the reporting of transactions on Form 8-K,
under Rule 3-14 of Regulation S-X, these acquisitions in the aggregate, may be
considered to be material in nature. Certain audited and unaudited historical
and pro
<PAGE> 3
forma financial information concerning these properties is provided in Item 7 of
this Current Report on Form 8-K.
In aggregate, the Company will have acquired eight properties during the period
from July 12, 1996, to December 31, 1996. The combined financial statement of
the properties listed under the section "Three Property Acquisitions" above for
the year ended December 31, 1995, has been audited, whereas the combined
financial statement for these properties for the period from January 1, 1996, to
the earlier of September 30, 1996, or date of acquisition has not been audited.
The properties listed under the section "Five Acquired Properties" above
represent the remainder of properties acquired by the Company during the period
from July 12, 1996, to November 8, 1996, and the combined financial statements
related to these properties have not been audited.
<PAGE> 4
The following operating properties and mortgages secured by operating properties
have been acquired by the Operating Partnership from January 1, 1996, through
July 11, 1996, and have been previously reported on current reports on Form 8-K
dated June 18, 1996, and July 15, 1996:
Six Acquired Properties and Two Investments in Mortgages
Bayside Corporate Center, an 84,925 square foot two-building office project
located in Foster City, California, was acquired on January 3, 1996, for $10.0
million.
San Jose Airport Office Center and 1735 North First Street, two mortgages
secured by four office buildings located in San Jose, California, were acquired
on January 31, 1996, for $14.3 million.
Everett Industrial, a 150,154 square foot industrial building located in
Everett, Washington, was acquired on March 20, 1996, for $7.4 million.
Carmel Valley Centre I & II, a 106,921 square foot two-building office project
located in San Diego, California, was acquired on April 1, 1996, for $14.0
million.
2290 North First Street, a 75,680 square foot office building located in San
Jose, California, was acquired on May 1, 1996, for $6.0 million.
Everett 526, a 97,523 square foot two-building light industrial project located
in Everett, Washington, was acquired on May 21, 1996, for $4.3 million.
10700 Northup Building, a 55,854 square foot office building located in
Bellevue, Washington, was acquired on May 28, 1996, for $4.6 million.
Three Acquired Properties
Benicia Industrial I & II, a 1,827,269 square foot seventeen-building
industrial project located in Benicia, California, was acquired on January 31,
1996, for $41.1 million.
Port of Oakland, a 199,733 square foot light industrial building located in
Oakland, California, was acquired on May 22, 1996, for $6.8 million.
Doolittle Drive, a 113,196 square foot industrial building located in San
Leandro, California, was acquired on May 23, 1996, for $3.5 million.
Two Acquired Properties
Dove Street, a 78,052 square foot office building located in Newport Beach,
California, was acquired on June 27, 1996, for $7.9 million.
Fidelity Plaza, a 77,453 square foot two-building office project located in
Sacramento, California, was acquired on July 1, 1996, for $5.0 million.
City Portfolio
The City, a 595,056 square foot four-building office project located in Orange,
California, was acquired on July 11, 1996, for $34.4 million. One of the four
buildings representing 165,300 square feet was vacant during 1995 and at the
time of acquisition. This vacant building will be repositioned and treated as a
development project.
<PAGE> 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) (i) Combined Statements of Revenues and Certain Expenses for the
Three Property Acquisitions
Report of Independent Public Accountants
Combined Statements of Revenues and Certain
Expenses for the period from January 1, 1996, to the earlier of
September 30, 1996, or date of acquisition (unaudited) and for
the year ended December 31, 1995
Notes to Combined Statements of Revenues and Certain Expenses
for the period from January 1, 1996, to the earlier of September
30, 1996, or date of acquisition (unaudited) and for the year
ended December 31, 1995
(ii) Combined Statements of Revenues and Certain Expenses for the Five
Acquired Properties
Unaudited Combined Statements of Revenues and Certain Expenses
for the period from January 1, 1996, to the earlier of September
30, 1996, or date of acquisition and for the year ended December
31, 1995
Notes to Unaudited Combined Statements of Revenues and Certain
Expenses for the period from January 1, 1996, to the earlier of
September 30, 1996, or date of acquisition and for the year ended
December 31, 1995
(b) Pro Forma Financial Information
Pro Forma Condensed Consolidated Balance Sheet as of September
30, 1996
Pro Forma Condensed Consolidated Statements of Operations for the
nine months ended September 30, 1996, and for the year ended
December 31, 1995
Notes and adjustments to Pro Forma Condensed Consolidated
Financial Statements
As Adjusted Condensed Consolidated Statement of Operations for
the year ended December 31, 1995
Notes and adjustments to As Adjusted Condensed Consolidated
Statement of Operations
(c) Exhibits
None
<PAGE> 6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of Spieker Properties, Inc.:
We have audited the accompanying combined statement of revenues and
certain expenses of the Three Property Acquisitions, as defined in Note 1, for
the year ended December 31, 1995. This financial statement is the responsibility
of management of the Company. Our responsibility is to express an opinion on
this financial statement 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
The accompanying combined statement of revenues and certain expenses
was prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the Company's Current Report
on Form 8-K dated December 4, 1996, and is not intended to be a complete
presentation of the combined revenues and expenses of the Three Property
Acquisitions.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the combined revenues and certain expenses of
the Three Property Acquisitions for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
San Francisco, California ARTHUR ANDERSEN LLP
October 29, 1996
<PAGE> 7
SPIEKER PROPERTIES, INC.
COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE THREE PROPERTY ACQUISITIONS
FOR THE PERIOD FROM JANUARY 1, 1996, TO THE EARLIER OF
SEPTEMBER 30, 1996, OR DATE OF ACQUISITION (Unaudited)
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(dollars in thousands)
<TABLE>
<CAPTION>
January 1, 1996,
to the earlier of
September 30, 1996, Year Ended
or Date of Acquisition December 31, 1995
---------------------- -----------------
(unaudited)
<S> <C> <C>
RENTAL REVENUES $8,902 $12,314
CERTAIN EXPENSES
Rental Expenses 2,524 3,074
Real estate taxes 682 937
------ -------
3,206 4,011
------ -------
REVENUES IN EXCESS OF CERTAIN EXPENSES $5,696 $ 8,303
====== =======
</TABLE>
The accompanying notes are an integral part of these combined statements.
<PAGE> 8
SPIEKER PROPERTIES, INC.
NOTES TO COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES FOR
THE THREE PROPERTY ACQUISITIONS
FOR THE PERIOD FROM JANUARY 1, 1996, TO THE EARLIER OF
SEPTEMBER 30, 1996, OR DATE OF ACQUISITION (Unaudited)
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(dollars in thousands)
1. Basis of Presentation and Summary of Significant Accounting Policies:
Properties Acquired
The combined statements of revenues and certain expenses (see "Basis of
Presentation" below) include the operations of the Three Property
Acquisitions (the "Properties") acquired or to be acquired by Spieker
Properties, L.P. from July 12, 1996, through December 31, 1996. Spieker
Properties, Inc. (the "Company") owns an approximate 84.9% general
partners' interest in Spieker Properties, L.P. (the "Operating Partnership"
collectively referred to as the "Company").
<TABLE>
<CAPTION>
Property Name Location Description
------------- -------- -----------
<S> <C> <C>
Stadium Plaza Anaheim, California Nine multi-tenant industrial buildings totaling
202,171 square feet, Thirty free-standing single-
tenant industrial buildings totaling 566,832 square
feet
Central Park Plaza San Jose, California Six multi-tenant office buildings totaling 305,918
square feet
Mission Land Company
Office Portfolio:
One Lakeshore Ctr. Ontario, California One multi-tenant office building totaling 175,840
square feet
Corona Corporate Ctr. Corona, California One multi-tenant office building totaling 46,227
square feet
</TABLE>
Basis of Presentation
The accompanying combined statements of revenues and certain
expenses are not representative of the actual operations of the Properties
for the periods presented. Certain expenses may not be comparable to the
expenses expected to be incurred by the Company in the proposed future
operations of the Properties; however, the Company is not aware of any
material factors relating to the Properties that would cause the reported
financial information not to be indicative of future operating results.
Excluded expenses consist primarily of property management fees, interest
expense, depreciation and amortization and other costs not directly
related to the future operations of the Properties.
The financial information presented for the period from January 1, 1996, to
the earlier of September 30, 1996, or date of acquisition is unaudited. In
the opinion of management, the unaudited financial information contains all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the combined statements of revenues and certain expenses
for the Properties.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
<PAGE> 9
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
2. Leasing Activity:
The minimum future rental revenues due under noncancelable operating leases
in effect as of October 1, 1996, for the remainder of 1996 and annually
thereafter are as follows:
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1996 (three months) $ 2,985
1997 9,754
1998 7,789
1999 5,564
2000 4,474
2001 2,961
Thereafter 6,048
---------
$ 39,575
=========
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to
$701 for the period from January 1, 1996, to the earlier of September 30,
1996, or date of acquisition (unaudited) and $940 for the year ended
December 31, 1995. Certain leases contain options to renew.
<PAGE> 10
SPIEKER PROPERTIES, INC.
UNAUDITED COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE FIVE ACQUIRED PROPERTIES
FOR THE PERIOD FROM JANUARY 1, 1996, TO THE EARLIER OF
SEPTEMBER 30, 1996, OR DATE OF ACQUISITION
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(dollars in thousands)
<TABLE>
<CAPTION>
January 1, 1996,
to the earlier of
September 30, 1996, Year Ended
or Date of Acquisition December 31, 1995
---------------------- -----------------
<S> <C> <C>
RENTAL REVENUES $5,603 $6,826
CERTAIN EXPENSES
Rental expenses 1,176 1,845
Real estate taxes 373 576
------ ------
1,549 2,421
------ ------
RENTAL REVENUE IN EXCESS OF CERTAIN EXPENSES $4,054 $4,405
====== ======
</TABLE>
The accompanying notes are an integral part of these unaudited,
combined statements.
<PAGE> 11
SPIEKER PROPERTIES, INC.
NOTES TO UNAUDITED COMBINED STATEMENTS OF REVENUES AND CERTAIN EXPENSES
FOR THE FIVE ACQUIRED PROPERTIES
FOR THE PERIOD FROM JANUARY 1, 1996, TO THE EARLIER OF
SEPTEMBER 30, 1996, OR DATE OF ACQUISITION
AND FOR THE YEAR ENDED DECEMBER 31, 1995
(dollars in thousands)
1. Basis of Presentation and Summary of Significant Accounting Policies:
Properties Acquired
The combined statements of revenues and certain expenses (see "Basis of
Presentation" below) include the combined operations of five properties
(the "Properties") acquired by Spieker Properties, L.P. during the period
from July 12, 1996, to November 8, 1996. Spieker Properties, Inc. (the
"Company") owns an approximate 84.9% general partners' interest in Spieker
Properties, L.P. (the "Operating Partnership" collectively referred to as
the "Company").
<TABLE>
<CAPTION>
Property Name Location Description
------------- -------- -----------
<S> <C> <C>
MacArthur Park Santa Ana, California Four multi-tenant industrial buildings totaling 93,158
square feet
Fairchild Corporate Ctr Irvine, California One multi-tenant office building totaling 104,973
square feet
New York Life Portfolio:
Airport Service Center Burlingame, California One single-tenant industrial building totaling 36,310
square feet
Kifer Rd Industrial Park Sunnyvale, California Four single-tenant industrial buildings totaling
287,300 square feet
Charcot Business Center San Jose, California Four multi-tenant industrial buildings totaling
163,370 square feet
One Pacific Plaza Huntington Beach, One multi-tenant office building totaling 94,540
California square feet and two restaurants totaling 17,100
square feet
</TABLE>
Basis of Presentation
The accompanying combined statements of revenue and certain expenses are
not representative of the actual operations of the Properties for the
periods presented. Certain expenses may not be comparable to the expenses
expected to be incurred by the Company in the proposed future operations of
the Properties; however, the Company is not aware of any material factors
relating to the Properties that would cause the reported financial
information not to be indicative of future operating results. Excluded
expenses consist primarily of property management fees, interest expense,
depreciation and amortization and other costs not directly related to the
future operations of the Properties.
In the opinion of management, the unaudited financial information contains
all adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the combined statements of revenues and certain
expenses for the Properties.
<PAGE> 12
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
2. Leasing Activity:
The minimum future rental revenues, due under noncancelable operating
leases in effect as of October 1, 1996, for the remainder of 1996 and
annually thereafter are as follows:
<TABLE>
<CAPTION>
Year Amounts
---- -------
<S> <C>
1996 (three months) $ 1,143
1997 4,382
1998 2,599
1999 1,479
2000 689
2001 102
Thereafter --
-------
Total $10,394
=======
</TABLE>
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to
$676 for the period from January 1, 1996, to the earlier of September 30,
1996, or date of acquisition and $692 for the year ended December 31, 1995.
Certain leases contain options to renew.
<PAGE> 13
SPIEKER PROPERTIES, INC.
PRO FORMA FINANCIAL INFORMATION
The unaudited, pro forma condensed consolidated balance sheet as of
September 30, 1996, reflects the incremental effect of the acquired properties
and mortgages (collectively, the "Acquired Properties and Mortgages") described
in Item 5 as if the acquisitions occurring after September 30, 1996, had
occurred on September 30, 1996. The accompanying unaudited, pro forma condensed
consolidated statements of operations for the nine months ended September 30,
1996, and the year ended December 31, 1995, reflect the incremental effect of
(i) the January and July, 1996, unsecured investment grade rated debt issuance
(the "Notes Offering") during 1996, (ii) the February 28, 1996, Common Stock
offering and concurrent offering (collectively, the "Offerings"), and the
application of the net proceeds therefrom and (iii) the Acquired Properties and
Mortgages described in Item 5 as if such transactions and acquisitions had
occurred on January 1, 1995. These statements should be read in conjunction
with respective consolidated financial statements and notes thereto included in
the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, and its Annual Report on Form 10-K/A for the year ended December 31,
1995. In the opinion of management, the unaudited, pro forma condensed
consolidated financial information provides for all adjustments necessary to
reflect the effects of the Acquired Properties and Mortgages, Offerings and
Notes Offering.
The accompanying unaudited, as adjusted condensed consolidated statement of
operations for the year ended December 31, 1995, has been prepared to reflect
(i) the Offerings and the application of the net proceeds therefrom, (ii) the
incremental effect of the acquisition of 17 properties during 1995 and three
properties and two mortgages in January 1996, (iii) the conversion of the
secured line of credit to an unsecured facility in November 1995, (iv) the Notes
Offerings during 1995 and January of 1996 and (v) the issuance of Series B
Preferred Stock during 1995, as if such transactions had all occurred on January
1, 1995. This unaudited statement should be read in conjunction with the
respective consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1995. In
the opinion of management, the unaudited as adjusted condensed consolidated
financial information provides for all adjustments necessary to reflect the
effects of the Offerings, the property acquisitions, the Notes Offerings and the
preferred stock offering.
These pro forma and as adjusted statements may not necessarily be indicative of
the results that would have actually occurred if the acquisitions had been in
effect on the date indicated, nor does it purport to represent the financial
position, results of operations or cash flows for future periods.
<PAGE> 14
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1996
(unaudited, dollars in thousands)
<TABLE>
<CAPTION>
Acquired
Historical (a) Properties Pro Forma
-------------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Investment in real estate, net $ 1,214,936 $ 95,600 (b) $ 1,310,536
Cash and cash equivalents 24,541 -- 24,541
Deferred financing and leasing
costs, net 16,686 -- 16,686
Other assets 13,727 -- 13,727
----------- ----------- -----------
Total assets $ 1,269,890 $ 95,600 $ 1,365,490
=========== =========== ===========
LIABILITIES
Mortgage loans $ 47,301 $ -- $ 47,301
Unsecured line of credit 39,000 95,600 (c) 134,600
Unsecured notes 510,000 -- 510,000
Other liabilities 70,454 -- 70,454
----------- ----------- -----------
Total liabilities 666,755 95,600 762,355
----------- ----------- -----------
MINORITY INTEREST 44,768 -- 44,768
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Series A Preferred Stock 23,949 -- 23,949
Series B Preferred Stock 102,064 -- 102,064
Common Stock 3 -- 3
Class B Common Stock -- -- --
Additional paid-in capital 432,912 -- 432,912
Deferred compensation (561) -- (561)
Retained earnings -- -- --
----------- ----------- -----------
Total stockholders' equity 558,367 -- 558,367
----------- ----------- -----------
$ 1,269,890 $ 95,600 $ 1,365,490
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited, pro
forma condensed consolidated financial statements.
<PAGE> 15
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(unaudited, dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Acquired
Properties Other
Historical(a) Notes Offering and Mortgages Adjustments Pro Forma
------------- -------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income $ 142,131 $ -- $ 21,661 (e) $ -- $ 163,792
Interest and other income 3,026 -- 90 (e) -- 3,116
----------- ----------- ----------- ----------- -----------
Total revenue 145,157 -- 21,751 -- 166,908
----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES
Rental expenses 24,351 -- 5,944 (e) -- 30,295
Real estate taxes 11,292 -- 1,724 (e) -- 13,016
Interest expense, including amortization
of finance costs 26,443 6,924 (d) -- 4,452 (f) 37,819
Depreciation and amortization 27,373 -- 2,948 (g) -- 30,321
General and administrative and other
expenses 7,491 -- -- -- 7,491
----------- ----------- ----------- ---------- -----------
Total operating expenses 96,950 6,924 10,616 4,452 118,942
----------- ----------- ----------- ---------- ------------
Income from operations before disposal of
real estate and minority interests 48,207 (6,924) 11,135 (4,452) 47,966
----------- ----------- ----------- ---------- ------------
DISPOSAL OF REAL ESTATE PROPERTIES
Loss on sale (1,483) -- -- -- (1,483)
----------- ----------- ----------- ---------- ------------
Income from operations before minority
interests 46,724 (6,924) 11,135 (4,452) 46,483
----------- ----------- ----------- ----------- ------------
Minority interests share in net income (6,121) -- -- (873) (h) (6,994)
----------- ----------- ----------- ----------- ------------
Net income 40,603 (6,924) 11,135 (5,325) 39,489
----------- ----------- ----------- ----------- -----------
Series A Preferred Stock dividends (1,573) -- -- -- (1,573)
Series B Preferred Stock dividends (7,530) -- -- -- (7,530)
----------- ----------- ----------- ----------- ------------
Net income available to common stockholders $ 31,500 $ (6,924) $ 11,135 $ (5,325) $ 30,386
=========== =========== =========== =========== ===========
Net income per common share $ .92 $ .85
=========== ===========
Weighted average common shares outstanding 34,280,115 35,728,317
=========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited,
pro forma condensed consolidated financial statements.
<PAGE> 16
SPIEKER PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(unaudited, dollars in thousands, except share data)
<TABLE>
<CAPTION>
Acquired Other
As Adjusted (i) Properties Adjustments Pro Forma
--------------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 168,088 $ 33,208 (e) $ -- $ 201,296
Interest and other income 5,860 33 (e) -- 5,893
----------- ----------- ----------- -----------
Total Revenues 173,948 33,241 -- 207,189
----------- ----------- ----------- -----------
OPERATING EXPENSES
Rental expenses 28,769 9,812 (e) -- 38,581
Real estate taxes 13,506 2,681 (e) -- 16,187
Interest expense 32,438 11,580 (d) 7,352 (f) 51,370
Depreciation and amortization 34,516 5,740 (g) -- 40,256
General and administrative and other expenses 8,533 -- -- 8,533
----------- ----------- ----------- -----------
Total operating expenses 117,762 29,813 7,352 154,927
----------- ----------- ----------- -----------
Income from operations before minority
interests 56,186 3,428 (7,352) 52,262
----------- ----------- ----------- -----------
Minority interests share of net income (8,641) -- 791 (h) (7,850)
----------- ----------- ----------- -----------
Net income 47,545 3,428 (6,561) 44,412
----------- ----------- ----------- -----------
Series A Preferred Stock dividends (2,048) -- -- (2,048)
Series B Preferred Stock dividends (10,041) -- -- (10,041)
----------- ----------- ----------- -----------
Net income allocable to common stockholders $ 35,456 $ 3,428 $ (6,561) $ 32,323
=========== =========== =========== ===========
Net income per common share $ 1.02 $ 0.90
=========== ===========
Weighted average common shares outstanding 34,876,387 35,728,317
=========== ===========
</TABLE>
The accompanying notes are an integral part of these unaudited,
pro forma condensed consolidated financial statements.
<PAGE> 17
SPIEKER PROPERTIES, INC.
NOTES AND ADJUSTMENTS TO PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited, dollars in thousands)
(a) Reflects historical financial information of the Company as of September
30, 1996, and for the nine months ended September 30, 1996, excluding
extraordinary items.
(b) Reflects the cost basis of the properties acquired subsequent to September
30, 1996.
<TABLE>
<CAPTION>
Property Acquisition Date Cost
-------- ---------------- ----
<S> <C> <C>
Charcot Business Center October 22, 1996 $ 11,900
New York Life Portfolio November 1, 1996 16,800
One Pacific Plaza November 8, 1996 10,100
Central Park Plaza December 13, 1996* 34,000
Mission Land Company
Office Portfolio December 13, 1996* 22,800
---------
$ 95,600
=========
* Estimated Closing Date
</TABLE>
(c) Represents borrowings on the Company's unsecured line of credit to fund
the acquisitions subsequent to September 30, 1996.
(d) Represents the incremental interest expense resulting from the $250,000
of Notes Offerings in January and July 1996. The net proceeds were used
to repay borrowings on the Company's unsecured line of credit. The
notes bear interest at various rates from 6.90% to 8.00%. The impact of
the Notes offerings for 1995 is included in the "As Adjusted" column.
See the as adjusted condensed consolidated statement of operations for
the year ended December 31, 1995.
(e) Reflects incremental effect of the Acquired Properties and Mortgages.
<TABLE>
<CAPTION>
January 1, 1996, to the Earlier of September 30, 1996, or Date of Acquisition
-----------------------------------------------------------------------------
Six Acquired
Properties and Three Two Five Three
Two Investments City Acquired Acquired Acquired Property
in Mortgages Portfolio Properties Properties Properties Acquisitions Adjustment
------------ -------------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues
Rental revenues $ 1,688 $ 2,844 $ 1,632 $ 992 $ 5,603 $ 8,902 $21,661
Interest and other income 82 -- -- 8 -- -- 90
-------- ------- ------- ------- ------- ------- -------
1,770 2,844 1,632 1,000 5,603 8,902 21,751
-------- ------- ------- ------- ------- ------- -------
Certain Expenses
Rental expenses 421 1,166 165 492 1,176 2,524 5,944
Real estate taxes 245 215 156 53 373 682 1,724
-------- ------- ------- ------- ------- ------- -------
666 1,381 321 545 1,549 3,206 7,668
-------- ------- ------- ------- ------- ------- -------
Revenues in excess of certain
expenses $ 1,104 $ 1,463 $ 1,311 $ 455 $ 4,054 $ 5,696 $14,083
======== ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Year Ended December 31, 1995
------------------------------------------------------------------------------------------------
Six Acquired Less
Properties and Previously Three Two Five Three
Two Investments Reported City Acquired Acquired Acquired Property
in Mortgages Acquisitions Portfolio Properties Properties Properties Acquisitions Adjustment
------------ ------------ --------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues
Rental revenues $ 6,787 $(5,072) $5,298 $5,335 $1,720 $ 6,826 $12,314 $33,208
Interest and other income 1,777 (1,777) -- -- 33 -- -- 33
------- ------- ------ ------ ------ ------- ------- -------
8,564 (6,849) 5,298 5,335 1,753 6,826 12,314 33,241
------- ------- ------ ------ ------ ------- ------- -------
Certain Expenses
Rental expenses 1,534 (867) 2,592 601 1,033 1,845 3,074 9,812
Real estate taxes 558 (610) 509 568 143 576 937 2,681
------- ------- ------ ------ ------ ------- ------- -------
2,092 (1,477) 3,101 1,169 1,176 2,421 4,011 12,493
------- ------- ------ ------ ------ ------- ------- -------
Revenues in excess of certain
expenses $ 6,472 $(5,372) $2,197 $4,166 $ 577 $ 4,405 $ 8,303 $20,748
======= ======= ====== ====== ====== ======= ======= =======
</TABLE>
The previously reported acquisitions consist of two properties
and two investments in mortgages acquired prior to the Offerings. The
1995 revenues and certain expenses of the two properties and two
mortgages are included in the "As Adjusted" column. See the as adjusted
condensed consolidated statement of operations for the year ended
December 31, 1995.
(f) Reflects a net increase in interest expense consisting of (i)
an increase due to the incremental effects of borrowings on the
unsecured line of credit used to fund property acquisitions and
(ii) a reduction in interest expense resulting from repayment of
borrowings on the unsecured line of credit with proceeds from the
Offerings. The interest effect has been calculated based on an assumed
rate of 6.95%.
(g) Reflects the incremental depreciation of the Acquired Properties based
upon asset lives of 40 years.
(h) Reflects the allocation of the pro forma adjustment to minority
interests based upon pro forma minority ownership in the Operating
Partnership of approximately 15.1%.
(i) See the unaudited, as adjusted condensed consolidated statement of
operations of the Company for the year Ended December 31, 1995,
contained herein. This statement corresponds to the unaudited, pro
forma condensed consolidated statement of operations to the year ended
December 31, 1995, presented in the Prospectus Supplement dated
February 28, 1996.
(j) The Company's pro forma taxable income for the 12 month period ended
September 30, 1996, is approximately $77,000, which has been calculated
as pro forma income from operations before minority interests for the
same period of approximately $60,000 plus GAAP depreciation and
amortization of approximately $40,000 less tax basis depreciation and
amortization and other tax differences of approximately $23,000.
<PAGE> 19
SPIEKER PROPERTIES, INC.
AS ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
Series B
Notes Preferred Stock
Historical (1) Acquisitions (2) Offerings (3) Issuance (4)
-------------- ---------------- ------------- ------------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 149,308 $18,780 $ -- $ --
Interest and other income 4,083 1,777 -- --
------------ ------- -------- -------
Total Revenues 153,391 20,557 -- --
------------ ------- -------- -------
OPERATING EXPENSES
Rental expenses 24,601 4,168 -- --
Real estate taxes 11,934 1,572 -- --
Interest expense 46,386 -- 24,139 --
Depreciation and amortization 31,602 2,872 -- --
General and administrative and other 8,533 -- -- --
------------ ------- -------- -------
Total operating expenses 123,056 8,654 24,139 --
------------ ------- -------- -------
Income from operations before minority
interests 30,335 11,903 (24,139) --
Minority interests (5,669) -- -- --
------------ ------- -------- -------
Net income 24,666 11,903 (24,139) --
------------ ------- -------- -------
Series A Preferred Stock dividends (2,048) -- -- --
Series B Preferred Stock dividends (586) -- -- (9,455)
------------ ------- -------- -------
Net income allocable to common stockholders $ 22,032 $11,903 $(24,139) $(9,455)
============ ======= ======== =======
Net income per common share $ 0.84
============
Weighted average common shares outstanding 26,140,488
============
</TABLE>
<TABLE>
<CAPTION>
Repayment Repayment of
of Secured Unsecured Line Other
Debt (5) of Credit (6) Adjustments (7) As Adjusted
-------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ -- $ -- $ -- $ 168,088
Interest and other income -- -- -- 5,860
----------- ----------- ----------- ------------
Total Revenues -- -- -- 173,948
----------- ----------- ----------- -----------
OPERATING EXPENSES
Rental expenses -- -- -- 28,769
Real estate taxes -- -- -- 13,506
Interest expense (29,761) (5,472) (2,854) 32,438
Depreciation and amortization -- -- -- 34,516
General and administrative and other -- -- -- 8,533
----------- ----------- ----------- -----------
Total operating expenses (29,761) (5,472) (2,854) 117,762
----------- ----------- ----------- -----------
Income from operations before minority
interests 29,761 5,472 2,854 56,186
----------- ----------- ----------- -----------
Minority interests -- -- (2,972) (8,641)
----------- ----------- ----------- -----------
Net income 29,761 5,472 (118) 47,545
----------- ----------- ----------- -----------
Series A Preferred Stock dividends -- -- -- (2,048)
Series B Preferred Stock dividends -- -- -- (10,041)
----------- ----------- ----------- -----------
Net income allocable to common stockholders $ 29,761 $ 5,472 $ (118) $ 35,456 (8)
=========== =========== =========== ===========
Net income per common share $ 1.02
===========
Weighted average common shares outstanding 34,876,387 (9)
===========
</TABLE>
<PAGE> 20
SPIEKER PROPERTIES, INC.
NOTES AND ADJUSTMENTS TO AS ADJUSTED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(unaudited, dollars in thousands)
(1) Reflects the historical consolidated statement of operations of the Company
for the year ended December 31, 1995, excluding extraordinary items.
(2) Reflects the incremental effect of the acquisition of 17 properties during
1995 and three of the acquired properties and the two mortgages acquired by
the Company prior to the Offerings, which represents the operations of the
acquired properties and interest earned on the mortgages prior to
acquisition by the Company. Also reflects depreciation and amortization for
periods prior to acquisition. Estimated depreciation and amortization has
been based upon asset lives of 3 to 40 years.
(3) Reflects the incremental effect of the $260,000 Notes Offering in December
1995 and the $100,000 Notes Offering in January 1996 which includes cash
interest expense of approximately $23,625 at a weighted average interest
rate of 6.943% and amortization of deferred financing fees of approximately
$514. The estimated amortization is based upon capitalized fees of
approximately $3,481 over the term of the notes.
(4) Reflects the incremental effect of Series B Preferred Stock dividends at a
rate of 9.45%.
(5) Reflects the reduction of interest expense resulting from the repayment of
approximately $347,272 of secured debt in December 1995. The reduction,
based upon actual amounts incurred, is comprised of the following:
<TABLE>
<CAPTION>
Year Ended
December 31, 1995
-----------------
<S> <C>
Cash interest payments $ (22,920)
Amortization of debt discount and deferred financing costs (6,841)
----------
$ (29,761)
==========
</TABLE>
(6) Reflects the repayment of the Company's unsecured line of credit using the
net proceeds of approximately $98,900 from the Notes Offering in January
1996 and a portion of the net proceeds from the Offerings which results in
a reduction of cash interest of approximately $4,296. Also, reflects the
conversion of the Company's secured line of credit to an unsecured
facility. The unsecured line of credit bears interest at LIBOR plus 1.5%
(LIBOR plus 1.25% effective August 1, 1996), requires interest only
payments and has a two year term. The conversion resulted in a net
reduction of interest expense due to a net decrease in amortization of
deferred financing fees of approximately $1,176.
The Company's unsecured line of credit is subject to changes in LIBOR.
(7) Reflects the repayment of certain mortgage loans using a portion of the net
proceeds from the Offerings resulting in a reduction of interest expense of
approximately $2,854 based upon actual amounts incurred. Also reflects the
minority interests' share of the pro forma adjustments to the net income of
the Operating Partnership.
(8) The pro forma taxable income for the Company for the year ended December
31, 1995, was approximately $71,000 which has been calculated as pro forma
net income from operations before minority interests for the year ended
December 31, 1995, of approximately $57,000 plus GAAP depreciation and
amortization of approximately $35,000 less tax basis depreciation and
amortization and other tax differences of approximately $21,000.
(9) Includes the Class B Common Stock and Class C Shares.
<PAGE> 21
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 hereunto duly authorized.
SPIEKER PROPERTIES, INC.
(Registrant)
Date: December 4, 1996 By: /s/ Elke Strunka
--------------------------------- -----------------
Elke Strunka
Vice President and
Principal Accounting Officer
