<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 ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 23, 1997
PACIFIC GULF PROPERTIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-12546 33-0577520
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
363 SAN MIGUEL DRIVE, NEWPORT BEACH, CALIFORNIA 92660-7805
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 721-2700
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Press Release Issued by the Company on February 18, 1997 relating to
the Company's fourth quarter and year end results.
99.2 Press Release Issued by the Company on January 28, 1997 relating to
the acquisition of industrial business parks in Santa Ana, California.
99.3 Press Release Issued by the Company on January 23, 1997 relating to
the acquisition of an industrial building in Algona, Washington.
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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.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By: /s/ Donald G. Herrman
-------------------------
Name: Donald G. Herrman
Title: Chief Financial Officer
February 18, 1997
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EXHIBIT 99.1
PACIFIC GULF PROPERTIES POSTS 10% PER SHARE
GAIN IN FOURTH QUARTER FFO AND 9% PER SHARE
INCREASE IN FFO FOR THE YEAR ENDED DECEMBER 31, 1996
NEWPORT BEACH, California (February 18, 1997) -- Glen L. Carpenter,
Chairman of the Board and Chief Executive Officer of Pacific Gulf Properties
Inc. (NYSE:PAG), reported today that fourth quarter funds from operations (FFO)
of Pacific Gulf Properties Inc. on a fully diluted basis, assuming conversion of
all remaining subordinated debentures, was 10% higher on a per share basis than
the comparable quarter in 1995.
Carpenter stated that for the fourth quarter ended December 31, 1996, FFO
was $4,794,000, or $.46 per share, compared with $3,341,000, or $.42 per share,
in the fourth quarter of 1995. Carpenter attributed the increase in FFO to
continued growth in same store sales for both the industrial and multifamily
operations, and to new property acquisitions made primarily at the end of the
second quarter in 1996 using proceeds from a common equity offering in May 1996.
Net loss for the fourth quarter of 1996 was $2,426,000, or $.32 per share,
after deducting a non-cash, non-recurring charge of $3,596,000 for the Company's
December 1996 debenture exchange offer. This compares with net income of
$6,964,000, or $1.43 per share, in the same period of 1995, which included a
gain of $6,664,000, or $1.37 per share, associated with the sale of the
Company's multifamily properties in Texas. Fourth quarter
- more -
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Pacific Gulf Properties -- Page 2
income from 1996 before gains on the sale of properties and the non-cash,
non-recurring charge associated with the debenture exchange offer was
$1,170,000, compared with $300,000 for 1995.
Funds from operations, assuming conversion of all remaining
subordinated debentures, for the year ended December 31, 1996 totaled
$16,930,000, or $1.81 per share, compared with $13,108,000, or $1.66 per share,
in 1995. The increase for the year, of 9% on a per share basis, was due to a
continuing growth in the performance of properties held both in 1995 and 1996
and approximately $83,000,000 of new property acquisitions made during 1996.
Net operating income for the Company's industrial portfolio increased from
$9,626,000 in 1995 to $15,475,000 in 1996, a 61% increase. Net operating
income for the Company's multifamily portfolio increased from $14,683,000 in
1995 to $17,550,000 in 1996, an increase of 20%.
Net loss for the year ended December 31, 1996 was $118,000, or $.02 per
share, after deduction of the non-cash, non-recurring $3,596,000 charge related
to the debenture exchange offer. This compares with net income of $8,403,000,
or $1.74 per share, in 1995 which included the $6,664,000, or $1.37 per share
gain from the Texas property sale. Income for the year ended December 31, 1996
before gains on the sale of properties and before the non-cash, non-recurring
charge for the debenture exchange offer was $3,404,000 in 1996, compared with
$1,739,000 in 1995.
Carpenter indicated that net operating income on properties held both
in 1995 and 1996 for the multifamily operations increased 9% for the 12-month
period ended December 31, 1996, compared with the same period for 1995.
Revenues for properties
--more--
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Pacific Gulf Properties - Page 3
held in both 1995 and 1996 for the same period increased 6% while expenses
increased only 1%. The total portfolio physical occupancies increased to 93% at
December 31, 1996, compared with 92% at December 31, 1995.
Pacific Gulf Properties Inc., a self-administered and self-managed
equity real estate investment trust, owns, operates, leases, acquires and
rehabilitates industrial and multifamily properties located in California and
the Pacific Northwest.
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PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
-------------------------------------
Dec. 31, 1996 Dec. 31, 1995
------------- -------------
<S> <C> <C>
REVENUES
Rental income
Multifamily properties $ 7,431 $ 7,460
Industrial properties 6,314 3,250
--------- ---------
13,745 10,710
Rental property expenses
Multifamily properties 3,027 2,960
Industrial properties 1,517 664
--------- ---------
4,544 3,624
Depreciation 2,315 1,720
Interest (including amortization
debenture discount and financing
costs of $287 and $287 respectively) 4,798 4,187
General and administrative 918 879
Non-recurring loss on exchange
of debentures 3,596 --
--------- ---------
16,171 10,410
Income (loss) before gain on sale
of properties (2,426) 300
Gain on sale of real estate properties -- 6,664
--------- ---------
Net Income (loss) ($2,426) $6,964
========= =========
Weighted average number of common
shares outstanding 7,484,592 4,856,735
========= =========
Net income (loss) per common share ($0.32) $1.43
========= =========
</TABLE>
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PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except share data)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
REVENUES 1996 1995
- -------- ---------- ----------
<S> <C> <C>
Rental income
Multifamily properties $ 29,104 $ 24,898
Industrial properties 20,783 12,193
---------- ----------
49,887 37,091
---------- ----------
EXPENSES
Rental property expenses
Multifamily properties 11,554 10,215
Industrial properties 5,308 2,567
---------- ----------
16,862 12,782
Depreciation 8,236 6,081
Interest (including
amortization of debenture
discount and financing costs
of $1,211 and $1,009
respectively) 18,411 14,066
General and administrative 2,974 2,423
Non-recurring loss on exchange
of debentures 3,596 --
---------- ----------
50,079 35,352
Income (loss) before non-
recurring and extraordinary
items (192) 1,739
Gain on sale of real estate
properties 74 6,664
---------- ----------
Net income (loss) $ (118) $ 8,403
========== ==========
Weighted average number of
common shares outstanding 6,340,748 4,830,723
========== ==========
Net income (loss) per common
share (0.02) 1.74
========== ==========
Dividends declared per common
share $ 1.61 $ 1.57
========== ==========
</TABLE>
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FUNDS FROM OPERATIONS(a)
<TABLE>
<CAPTION>
(In thousands except per share data) (In thousands except per share data)
For the Three Months Ended For the Twelve Months Ended
------------------------------------ ------------------------------------
Dec. 31, 1996 Dec. 31, 1995 Dec. 31, 1996 Dec. 31, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Income (Loss) $(2,426) $ 6,964 $ (118) $ 8,403
Less: Gain on Sale of Real Estate -- (6,664) (74) (6,664)
Plus: Non-recurring loss on Debenture Exchange 3,596 -- 3,596 --
Plus: Depreciation and Amortization 2,602 2,006 9,447 7,090
------- ------- ------- ------
Funds from Operations(a) 3,772 2,306 12,851 8,429
Amortization
Debenture Discount and Costs (141) (138) (570) (582)
Costs Related to Financing Assumed from Predecessor
and Line of Credit Costs (83) (80) (379) (302)
Long-term Financing Costs (63) (69) (262) (155)
------ ------ ------- -----
Funds from Operations - New Definition $3,485 $2,019 $11,640 $7,820
====== ====== ======= ======
Weighted Average Outstanding Shares - Primary 7,485 4,857 6,341 4,831
====== ====== ======= ======
Funds from Operations per share - New Definition $0.47 $0.42 $1.84 $1.62
</TABLE>
(a) Industry analysts generally consider funds from operation ("FFO") an
appropriate rating of performance of a real estate investment trust ("REIT").
The Company computes funds from operations in accordance with standards
established by the National Association of Real Estate Investment Trusts
("NAREIT"). Funds from operations is defined as net income (computed in
accordance with generally accepted accounting principles), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. NAREIT modified the calculation of FFO to, among other things,
eliminate amortization of deferred financing costs and depreciation of non-real
estate assets as items which are added back to net income when computing FFO.
The Company adopted the modified calculation as of January 1, 1996.
PRO FORMA FUNDS FROM OPERATIONS(b)
<TABLE>
<S> <C> <C> <C> <C>
Funds from Operations - New Definition $ 3,485 $2,019 $11,640 $ 7,820
Interest Expense on Debentures 1,168 1,184 4,720 4,736
Amortization of Debenture Discount and Costs 141 138 570 552
------- ------ ------- ------
Fully Diluted Funds from Operations $ 4,794 $3,341 $16,930 $13,108
======= ====== ======= =======
Fully Diluted Weighted Average Outstanding Shares 10,372 7,894 9,338 7,868
======= ====== ======= =======
Fully Diluted Funds from Operations per share --
New Definition $0.46 $0.42 $1.81 $1.66
</TABLE>
(b) Pro Forma Funds from Operations Calculations - Assume the conversion of all
Convertible Subordinated Debentures on the first day of each respective
period.
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BALANCE SHEET DATA (in thousands)
Pacific Gulf Properties Inc.
----------------------------
December 31, 1996 December 31, 1995
----------------- -----------------
Real Estate $352,867 $278,692
Cash and Cash Equivalents 1,523 2,847
Other Assets 10,250 7,052
-------- --------
Total Assets $364,640 $288,591
======== ========
Mortgage and Other Notes Payable $197,401 $149,847
Convertible Subordinated Debentures 14,227 55,659
Other Liabilities 9,673 7,587
Minority Interest 3,518 3,518
Shareholders' Equity 139,821 71,980
-------- --------
Total Liabilities and Shareholders' Equity $364,640 $288,591
======== ========
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EXHIBIT 99.2
PACIFIC GULF PROPERTIES ACQUIRES
INDUSTRIAL BUSINESS PARKS
IN ORANGE COUNTY, CALIFORNIA
NEWPORT BEACH, California (January 28, 1997) -- Pacific Gulf Properties
Inc. (NYSE: PAG) announced today that it has acquired two industrial business
parks in Santa Ana, California containing a total of 321,000 square feet for a
total purchase price of $14,600,000. Both parks were 90 percent leased at close
of escrow.
Occupying area in a prime industrial section of Central Orange County,
Harbor and Harbor Warner Business Centers are situated on 17.5 acres and consist
of 18 modern concrete tilt-up buildings. The buildings are divisible to
accommodate users from 360 to 7,000 square feet with very little modification to
the existing product, providing Pacific Gulf with the ability to attract and
accommodate tenants with varied needs.
Glenn L. Carpenter, Chairman and Chief Executive Officer of Pacific
Gulf Properties, stated "the addition of these parks to our portfolio not only
expands our base of industrial product in a very favorable market, but also
corresponds with the Company's overall business strategy to focus on the small
to mid size tenant." Carpenter further stated that the Company now boasts an
industrial portfolio of 25 properties containing 5,422,400 total square feet.
Also, Carpenter noted that the purchase would be funded by proceeds from its
recent equity offering, completed on January 21, 1997
Pacific Gulf Properties Inc., a self-administered and self-managed
equity real estate investment trust, owns, operates, leases, acquires,
rehabilitates and develops industrial and multifamily properties located in
California and the Pacific Northwest.
###
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EXHIBIT 99.3
PACIFIC GULF PROPERTIES CONTINUES
EXPANSION OF ITS INDUSTRIAL PORTFOLIO
NEWPORT BEACH, California (January 23, 1997) -- Pacific Gulf
Properties, Inc. (NYSE: PAG) has acquired a 200,400 square foot industrial
building in Alonga, Washington, from Principal Financial Group for a total
purchase price of $9,450,000. At close of escrow, the project was 100 percent
leased.
The building, situated on 10.5 acres, was designed as an industrial
distribution/manufacturing facility, with a ceiling clear height of 24 feet and
18 dock-high loading positions. However, the building can be divided to
accommodate 20,000 square-foot users. Located in the growing market of South
Kent Valley, this acquisition expands Pacific Gulf's presence in the Seattle
market, and adds a different product size to Pacific Gulf's current inventory
base.
Glenn L. Carpenter, Chairman and Chief Executive Officer, stated that
the purchase of the Algona property is part of the Company's continuing
expansion in the industrial area which began earlier this year, increasing the
size of its Seattle-area portfolio to five projects totalling more than 861,000
square feet, bringing the Company's total industrial portfolio to 5,101,400
square feet. Carpenter also stated that the purchase would be funded by
proceeds received from its recent equity offering, completed on January 21,
1997.
Pacific Gulf Properties Inc., a self-administered and self-managed
equity real estate investment trust, owns, operates, leases, acquires,
rehabilitates and develops industrial and multifamily properties located in
California and the Pacific Northwest.
