<PAGE>
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): October 27, 1997
BEACON PROPERTIES CORPORATION
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-12926 04-3224258
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
(617) 330-1400
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
Beacon Properties Corporation (the "Company") has acquired the following
properties:
On July 1, 1997 the Company acquired Sunnyvale Business Center, a
three-building, 175,000 square foot office property located in Sunnyvale,
California for $33.8 million in cash. The property is 100 percent occupied by
Advanced Micro Devices, Inc. under a sub-lease from Silicon Graphics, Inc. and
was completed in 1990. The seller was O.M. Sunnyvale Associates, L.P.
The Company acquired an 11-acre development site on August 21, 1997 located on
Route 128 near the Massachusetts Turnpike in Newton, Massachusetts and plans to
convert a former warehouse located there into a Class A office complex to be
known as Riverside Center. The purchase price was $32.5 million in cash and the
seller was Cabot Cabot & Forbes of New England. Scheduled for completion by
year-end 1999, Riverside Center will be a four-story office building containing
approximately 500,000 square feet, parking for 1,500 cars and pedestrian access
to the Charles River and Riverside Park.
On September 25, 1997 the Company acquired a parcel of land on which it plans to
develop a 22-story, 207,000 square foot Class A office tower located at 150
California Street in San Francisco, California. It was purchased from CalProp.,
Inc. for $10.6 million in cash.
On September 29, 1997 the Company purchased five acres in the Media District of
Burbank, California directly across from NBC studios, and plans to co-develop
with J.H. Snyder Company a Class A office project known as the Media Center. The
project will consist of three interconnected six-story buildings containing
585,000 square feet. The land was purchased for $18.9 million from the City of
Burbank, Ishverbhai Patel, Patel Charitable Remainder Unitrust and Burbank
Holdings, Inc.
The Civic Opera Building located at 20 North Wacker Drive in downtown Chicago,
was acquired on October 1, 1997. the purchase price was $59.6 million which
included the assumption of a mortgage of $31.8 million, issuance of $6.7 million
of Operating Partnership Units and $21.1 million of cash. The Civic Opera
Building was purchased from Windy Point LLC and Range Line LLC, affiliates of
the Fifield Realty Corporation. The building was originally constructed in 1929
and has undergone nearly $10 million of renovations since 1994. It contains
824,000 square feet in 44 floors.
200 West Adams was purchased on October 8, 1997 for $72.2 million in cash. The
building is located in downtown Chicago at the corner of Adams and Wells Street
and was completed in 1985. The 677,000 square foot building is currently 92%
leased. The property was acquired from the Adams Family LLC.
On October 20, 1997, Lakeside Office Park was acquired from the Mutual Life
Insurance Company of New York for $38.0 million in cash. The park consists of
five buildings containing a total of 391,000 square feet which is currently 92
percent occupied. The property was developed from 1972 to 1978 and refurbished
over the past three years. Lakeside is located in Atlanta's Central Perimeter
submarket at the intersection of I-285 and the Georgia 400.
Item 7. Financial Statements and Exhibits
(a) Financial Statements Under Rule 3-14 of Regulation S-X
Statement of Excess of Revenues over Specific Operating Expenses of
Civic Opera House, Chicago, Illinois for the year ended December 31,
1996
Statement of Excess of Revenues over Specific Operating Expenses of 200
W. Adams, Chicago, Illinois for the year ended December 31, 1996
(b) Pro Forma Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1997
(Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 1996 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Six
Months Ended June 30, 1997 (Unaudited)
(c) Exhibits
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants
2
<PAGE>
BEACON PROPERTIES CORPORATION
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 thereunto duly authorized.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
-------------------------------------
Robert J. Perriello
Senior Vice President
and Chief Financial Officer
Date: October 24, 1997
3
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders of
Beacon Properties Corporation
We have audited the accompanying statement of excess of revenues over specific
operating expenses of the Civic Opera House located at 20 North Wacker, Chicago,
Illinois (the "Property") for the year ended December 31, 1996. This financial
statement is the responsibility of the Property's management. 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 statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income and
expenses which would not be comparable with those resulting from the operations
of the Property after acquisition by Beacon Properties Corporation. The
accompanying financial statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of income and expenses described in Note 2) of the Civic Opera House
located in Chicago, Illinois for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Chicago, Illinois
September 9, 1997
F-1
<PAGE>
Civic Opera House
(20 North Wacker)
Chicago, Illinois
Statements of Excess of Revenues Over Specific Operating Expenses
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year
June 30, 1997 Ended
(Unaudited) December 31, 1996
<S> <C> <C>
Revenues:
Base rent $ 4,936,983 $ 10,357,540
Recoveries from tenants 570,584 1,545,110
Other income 146,027 551,086
-------------- -----------------
5,653,594 12,453,736
-------------- -----------------
Specific operating expenses (Note 2):
Property taxes 1,050,000 1,989,927
Repairs and maintenance 843,525 3,160,457
Utilities 637,141 1,462,370
Janitorial and cleaning 572,299 1,151,375
General and administrative 446,733 937,249
Security 86,347 167,594
Insurance 66,775 127,813
-------------- -----------------
3,702,820 8,996,785
-------------- -----------------
Excess of revenues over specific operating expenses $ 1,950,774 $ 3,456,951
============== =================
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-2
<PAGE>
Civic Opera House
(20 North Wacker)
Chicago, Illinois
Notes to Statements of Excess of Revenues
Over Specific Operating Expenses
1. Organization and Significant Accounting Policies
Description of Properties
The Civic Opera House (the "Property") is located at 20 North Wacker in
Chicago, Illinois and consists of 871,563 (unaudited) square feet of office
space. Beacon Properties Corporation intends to acquire the entire fee
interest in this Property.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of
the related leases. The excess of recognized rentals over amounts due
pursuant to lease terms is recorded as accrued rent and amounts to
approximately $168,000 and $384,000 for the six months ended June 30, 1997
and for the year ended December 31, 1996, respectively.
Risks and Uncertainties
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 those
estimates.
2. Basis of Accounting
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been
prepared in accordance with the applicable rules and regulations of the
Securities and Exchange Commission for real estate properties acquired or
to be acquired. Accordingly, the statement excludes certain historical
income and expenses not comparable to the operations of the property after
acquisition, such as interest income, management fees, depreciation,
amortization, and interest expense.
3. Description of Leasing Arrangements
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years
for noncancelable operating leases in effect at December 31, 1996 are
approximately as follows:
<TABLE>
<S> <C>
1997 $11,556,000
1998 11,929,000
1999 11,165,000
2000 9,475,000
2001 8,225,000
Thereafter 28,600,000
</TABLE>
F-3
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders of
Beacon Properties Corporation
We have audited the accompanying statement of excess of revenues over specific
operating expenses of 200 W. Adams (the "Property") located in Chicago, Illinois
for the year ended December 31, 1996. This financial statement is the
responsibility of the Property's management. 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 statement of excess of revenues over specific
operating expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income and
expenses which would not be comparable with those resulting from the operations
of the Property after acquisition by Beacon Properties Corporation. The
accompanying financial statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission and is not
intended to be a complete presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the excess of revenues over specific operating expenses
(exclusive of income and expenses described in Note 2) of 200 W. Adams located
in Chicago, Illinois for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Chicago, Illinois
September 5, 1997
F-4
<PAGE>
200 W. Adams
Chicago, Illinois
Statements of Excess of Revenues Over Specific Operating Expenses
<TABLE>
<CAPTION>
For the Six For the Year
Months Ended Ended
June 30, 1997 December 31,
(unaudited) 1996
<S> <C> <C>
Revenues:
Base rent $ 5,543,419 $ 10,466,993
Recoveries from tenants 1,164,900 2,646,523
Other income 38,066 67,580
--------------- ---------------
6,746,385 13,181,096
--------------- ---------------
Specific operating expenses (Note 2):
Utilities 231,500 591,666
Janitorial land cleaning 443,203 863,738
Security 100,549 218,063
General and administrative 148,261 339,363
Repairs and maintenance 318,878 581,577
Insurance 55,392 112,811
Property taxes 1,971,362 3,538,888
Landscaping 4,970 24,885
--------------- ---------------
3,274,115 6,270,991
--------------- ---------------
Excess of revenues over specific operating expenses $ 3,472,270 $ 6,910,105
=============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-5
<PAGE>
200 W. Adams
Chicago, Illinois
Notes to Statements of Excess of Revenues
Over Specific Operating Expenses
1. Organization and Significant Accounting Policies
Description of Properties
200 W. Adams (the "Property") is a 649,212 (unaudited) square foot
office complex located in Chicago, Illinois. Beacon Properties
Corporation intends to acquire the entire fee interest in this
Property.
Rental Revenues
Rental income is recognized on the straight-line method over the terms
of the related leases. The excess of recognized rentals over amounts
due pursuant to lease terms is recorded as accrued rent and amounted to
approximately $97,500 and $195,000 for the six months ended June 30,
1997 and for the year ended December 31, 1996, respectively.
Risks and Uncertainties
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
those estimates.
2. Basis of Accounting
The accompanying statement of excess of revenues over specific
operating expenses is presented on the accrual basis. This statement
has been prepared in accordance with the applicable rules and
regulations of the Securities and Exchange Commission for real estate
properties acquired or to be acquired. Accordingly, the statement
excludes certain historical income and expenses not comparable to the
operations of the property after acquisition, such as interest income,
management fees, depreciation, amortization, and interest expense.
3. Description of Leasing Arrangements
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate
tax reimbursement clauses, operating expense reimbursement clauses and
renewal options. Minimum lease payments to be received during the next
five years for noncancelable operating leases in effect at December 31,
1996 are approximately as follows:
<TABLE>
<S> <C>
1997 $ 10,268,575
1998 8,840,483
1999 7,407,512
2000 6,030,448
2001 5,445,315
Thereafter 12,421,388
</TABLE>
As of December 31, 1996, one type of tenant (government) occupied
approximately 35% of leaseable square feet and represented
approximately 50% of total base revenues.
F-6
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Beacon Properties Corporation (the "Company") as of June 30, 1997, is presented
as if the Sunnyvale Business Center, Riverside, 150 California, Civic Opera
Building, 200 West Adams, Media Center and Lakeside properties were acquired on
June 30, 1997.
The pro forma Condensed Consolidated Statements of Operations for the year
ended December 31, 1996 and six months ended June 30, 1997 are presented as if
the acquisition of the Properties acquired from January 1, 1996 to October 20,
1997 (as more fully described below), the closing of the MetLife Mortgage loan,
the Company's common stock offerings from January 1996 to April 1997 (as more
fully described below) and the Company's 8.96% Series A Cumulative Redeemable
Preferred Stock Offering at $25.00 per share had occurred as of January 1, 1996.
Furthermore, the Company qualified as a REIT, distributed all of its taxable
income and, therefore, incurred no income tax expense during the period.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Condensed
Consolidated Balance Sheet and Statement of Operations are not necessarily
indicative of what actual results of operations of the Company would have been
for the period, nor does it purport to represent the Company's results of
operations for future periods.
F-7
<PAGE>
Acquisitions included in pro forma:
<TABLE>
<CAPTION>
Rentable Year Built/ Date of
Property Name Sq Ft Renovated Acquisition
- ------------- ----- --------- -----------
<S> <C> <C> <C>
1996 Acquisitions
- -----------------------------------------------------------------------------------------------------------------------------
Perimeter Center, Atlanta, GA 3,302,000 1970-1989 02/15/96
- -----------------------------------------------------------------------------------------------------------------------------
New York Life Portfolio, Chicago, IL and Washington, D.C. 1,012,000 1984-1986 08/16/96
- -----------------------------------------------------------------------------------------------------------------------------
Fairfax County Portfolio, McLean, VA and Herndon, VA 550,000 1981-1988 09/05/96
- -----------------------------------------------------------------------------------------------------------------------------
Rosslyn Virginia Portfolio, Rosslyn, VA 666,000 1974-1980 10/18/96
- -----------------------------------------------------------------------------------------------------------------------------
New England Executive Park, Burlington, MA 817,000 1970-1985 11/15/96
- -----------------------------------------------------------------------------------------------------------------------------
245 First Street, Cambridge, MA 263,000 1985-1986 11/21/96
- -----------------------------------------------------------------------------------------------------------------------------
10960 Wilshire Boulevard, Westwood, CA 544,000 1971-1992 11/21/96
- -----------------------------------------------------------------------------------------------------------------------------
Shoreline Technology Park, Mountain View, CA 727,000 1985-1991 12/20/96
- -----------------------------------------------------------------------------------------------------------------------------
Lake Marriott Business Park, Santa Clara, CA 400,000 1981 12/20/96
- -----------------------------------------------------------------------------------------------------------------------------
Presidents Plaza, Chicago, IL 791,000 1980-1982 12/27/96
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Property Name Seller
- ------------- ------
<S> <C>
1996 Acquisitions
- ---------------------------------------------------------------------------------------------------------------------
Perimeter Center, Atlanta, GA Metropolitan Life Insurance Company
- ---------------------------------------------------------------------------------------------------------------------
New York Life Portfolio, Chicago, IL and Washington, D.C. New York Life Insurance Company
- ---------------------------------------------------------------------------------------------------------------------
Fairfax County Portfolio, McLean, VA and Herndon, VA Greensboro Associates, John Marshall
Associates Limited Partnership Woodldland-
Northridge I Limit Partnership
- ---------------------------------------------------------------------------------------------------------------------
Rosslyn Virginia Portfolio, Rosslyn, VA LaSalle Fund II
- ---------------------------------------------------------------------------------------------------------------------
New England Executive Park, Burlington, MA New England Executive Park Limited
Partnership, et al
- ---------------------------------------------------------------------------------------------------------------------
245 First Street, Cambridge, MA Riverview Building Combined Limited Partnership
- ---------------------------------------------------------------------------------------------------------------------
10960 Wilshire Boulevard, Westwood, CA 10960 Property Corporation
- ---------------------------------------------------------------------------------------------------------------------
Shoreline Technology Park, Mountain View, CA Teachers Insurance and Annuity Association (TIAA)
- ---------------------------------------------------------------------------------------------------------------------
Lake Marriott Business Park, Santa Clara, CA Teachers Insurance and Annuity Association (TIAA)
- ---------------------------------------------------------------------------------------------------------------------
Presidents Plaza, Chicago, IL Metropolitan Life Insurance Company
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
Purchase Price (in thousands)
----------------------------------------------------------
Property Name Cash Debt O.P.Units Total
- ------------- ---- ---- --------- -----
<S> <C> <C> <C> <C>
1996 Acquisitions
- ----------------------------------------------------------------------------------------------------------------------------
Perimeter Center, Atlanta, GA $322,200 $13,800 $336,000
- ----------------------------------------------------------------------------------------------------------------------------
New York Life Portfolio, Chicago, IL and Washington, D.C. $150,000 $150,000
- ----------------------------------------------------------------------------------------------------------------------------
Fairfax County Portfolio, McLean, VA and Herndon, VA $ 55,400 $21, 600 $77,000
- ----------------------------------------------------------------------------------------------------------------------------
Rosslyn Virginia Portfolio, Rosslyn, VA $99,050 $99,050
- ----------------------------------------------------------------------------------------------------------------------------
New England Executive Park, Burlington, MA $75,000 $75,000
- ----------------------------------------------------------------------------------------------------------------------------
245 First Street, Cambridge, MA $45,000 $45,000
- ----------------------------------------------------------------------------------------------------------------------------
10960 Wilshire Boulevard, Westwood, CA $133,000 $133,000
- ----------------------------------------------------------------------------------------------------------------------------
Shoreline Technology Park, Mountain View, CA $139,080 $139,080
- ----------------------------------------------------------------------------------------------------------------------------
Lake Marriott Business Park, Santa Clara, CA $43,920 $43,920
- ----------------------------------------------------------------------------------------------------------------------------
Presidents Plaza, Chicago, IL $38,000 $39,000 $77,000
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Rentable Year Built/ Date of
Property Name Sq Ft Renovated Acquisition
- ------------- ----- --------- -----------
<S> <C> <C> <C>
1997 Acquisitions
- -----------------------------------------------------------------------------------------------------------------------------
10880 Wilshire Boulevard, Westwood, CA 531,000 1970 4/23/97
- -----------------------------------------------------------------------------------------------------------------------------
Centerpointe I and II, Fairfax, VA 409,000 1988-1990 4/30/97
- -----------------------------------------------------------------------------------------------------------------------------
Westbrook Corporate Center, Westchester, IL 1,106,000 1985-1996 5/23/97
- -----------------------------------------------------------------------------------------------------------------------------
175 Wyman Street, Waltham, MA (1) (1) 5/13/97
- -----------------------------------------------------------------------------------------------------------------------------
225 Franklin Street, Boston, MA 929,545 1966 6/4/97
- -----------------------------------------------------------------------------------------------------------------------------
Sunnyvale Business Center, Sunnyvale, CA 175,000 1990 7/1/97
- -----------------------------------------------------------------------------------------------------------------------------
Riverside, Newton, MA (2) (2) 8/21/97
- -----------------------------------------------------------------------------------------------------------------------------
150 California, San Francisco, CA (3) (3) 9/25/97
- -----------------------------------------------------------------------------------------------------------------------------
Media Center , Los Angeles, CA (4) (4) 9/29/97
- -----------------------------------------------------------------------------------------------------------------------------
Civic Opera Building, Chicago, IL 824,000 1994 10/1/97
- -----------------------------------------------------------------------------------------------------------------------------
200 West Adams, Chicago, IL 677,000 1985 10/8/97
- -----------------------------------------------------------------------------------------------------------------------------
Lakeside, Atlanta, GA 391,000 1972-1978 10/20/97
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Property Name Seller
- ------------- ------
<S> <C>
1997 Acquisitions
- ----------------------------------------------------------------------------------------------------------------
10880 Wilshire Boulevard, Westwood, CA 10880 Property Corporation
- ----------------------------------------------------------------------------------------------------------------
Centerpointe I and II, Fairfax, VA Joshua Realty Corporation
- ----------------------------------------------------------------------------------------------------------------
Westbrook Corporate Center, Westchester, IL Westbrook Corporate Center Associates,
Westbrook Corporate Center IV Associates
Limited Partnership Westbrook Corporate
Center V Associates Limited Partnership
- ----------------------------------------------------------------------------------------------------------------
175 Wyman Street, Waltham, MA Hewlett-Packard Company
- ----------------------------------------------------------------------------------------------------------------
225 Franklin Street, Boston, MA Hexalon Real Estate, Inc.
- ----------------------------------------------------------------------------------------------------------------
Sunnyvale Business Center, Sunnyvale, CA O.M. Sunnyvale Associates, L.P.
- ----------------------------------------------------------------------------------------------------------------
Riverside, Newton, MA Cabot, Cabot & Forbes of New England, Inc.
- ----------------------------------------------------------------------------------------------------------------
150 California, San Francisco, CA CalProp, Inc.
- ----------------------------------------------------------------------------------------------------------------
Media Center , Los Angeles, CA City of Burbank, Ishverbhai Patel, Patel
Charitable Remainder Unitrust and Burbank
Holdings, Inc.
- ----------------------------------------------------------------------------------------------------------------
Civic Opera Building, Chicago, IL Windy Point LLC and Range Line LLC
- ----------------------------------------------------------------------------------------------------------------
200 West Adams, Chicago, IL Adams Family LLC
- ----------------------------------------------------------------------------------------------------------------
Lakeside, Atlanta, GA Mutual Life Insurance Company of New York
- ----------------------------------------------------------------------------------------------------------------
Purchase Price (in thousands)
---------------------------------------------------------------
Property Name Cash Debt O.P.Units Total
- ------------- ---- ---- --------- -----
<S> <S> <C> <C> <C>
1997 Acquisitions
- -----------------------------------------------------------------------------------------------------------------------------------
10880 Wilshire Boulevard, Westwood, CA $99,800 $99,800
- -----------------------------------------------------------------------------------------------------------------------------------
Centerpointe I and II, Fairfax, VA $25,000 $30,000 $55,000
- -----------------------------------------------------------------------------------------------------------------------------------
Westbrook Corporate Center, Westchester, IL $42,700 $106,000 $33,400 $182,100
- -----------------------------------------------------------------------------------------------------------------------------------
175 Wyman Street, Waltham, MA $24,000 $24,000
- -----------------------------------------------------------------------------------------------------------------------------------
225 Franklin Street, Boston, MA $280,000 $280,000
- -----------------------------------------------------------------------------------------------------------------------------------
Sunnyvale Business Center, Sunnyvale, CA $33,800 $33,800
- -----------------------------------------------------------------------------------------------------------------------------------
Riverside, Newton, MA $32,500 $32,500
- -----------------------------------------------------------------------------------------------------------------------------------
150 California, San Francisco, CA $10,600 $10,600
- -----------------------------------------------------------------------------------------------------------------------------------
Media Center , Los Angeles, CA $18,850 $18,850
- -----------------------------------------------------------------------------------------------------------------------------------
Civic Opera Building, Chicago, IL $21,136 $31,773 $6,701 $59,610
- -----------------------------------------------------------------------------------------------------------------------------------
200 West Adams, Chicago, IL $72,175 $72,175
- -----------------------------------------------------------------------------------------------------------------------------------
Lakeside, Atlanta, GA $38,000 $38,000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 175 Wyman Street consists of a vacant 335,000 square foot office/research
and development complex and 26.7 acres of land suitable for development. The
Company plans to redevelop the property into 400,000 square feet of class A
office space.
(2) The Riverside investment consists of a mortgage loan receivable from
Riverside Project LLC in the amount of $26,000 which bears interest at 9% and is
due upon sale along with 50% of any excess sale proceeds. In addition, loans
bearing interest at 7% in the amount of $3,250 each are due from Beacon Property
Management Corporation and Beacon Design Corporation, the proceeds of which were
used by these entities to capitalize Riverside Project LLC.
(3) 150 California land consists of a parcel of land on which the Company plans
to develop a 207,000 square foot class A office property.
(4) Media Center consists of a parcel of land on which the Company plans to
develop a 585,000 square feet of class A office space.
Common and Preferred Stock Offerings included in pro forma:
<TABLE>
<CAPTION>
Price Per Gross Net
Year Month Shares Type Share Proceeds Proceeds
---- ----- ------ ---- ----- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
1996 March 7,036,000 Common $26.25 $184,695 $173,800
1996 August 5,750,000 Common 25.75 148,063 139,400
1996 November 13,723,000 Common 30.75 421,982 398,900
1996 December 1,132,400 Common 33.465 37,896 37,800
1997 April 7,000,000 Common 32.125 224,875 212,722
1997 June 8,000,000 Preferred 25.00 200,000 193,350
</TABLE>
F-8
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma Adjustments
-------------------------------------------------------------------------
Beacon
Properties Sunnyvale
Corporation Business Civic Opera
Historical Center Riverside (A) 150 California (B) Building
---------- ------ ------------- ------------------ -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
ASSETS
Real estate, net $2,173,928 $33,800 $10,600 $59,610
Deferred financing and leasing costs, net 16,751
Cash and cash equivalents 54,235 (32,800) ($1,500)
Mortgages and notes receivable 51,507 32,500
Other assets 38,655 (1,000)
Investments in and advance
to joint ventures and corporations 51,345
----------- ----------- ------------- -------------- -----------
Total assets $2,386,421 $31,000 $10,600 $59,610
=========== =========== ============= ============== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $587,503 $31,773(C)
Note payable, Credit Facility 149,000 $31,000 $10,600 21,136
Other liabilities 66,973
Investment in joint venture 24,458
----------- ----------- ------------- -------------- -----------
Total liabilities 827,934 31,000 10,600 52,909
Minority interest in Operating Partnership 143,055 6,701(D)
Stockholders' equity 1,415,432
----------- ----------- ------------- -------------- -----------
Total liabilities and stockholders'
equity $2,386,421 $31,000 $10,600 $59,610
=========== =========== ============= ============== ===========
<CAPTION>
Pro Forma Adjustments
----------------------------------------------------------
200 West Media Pro Forma
Adams Center (E) Lakeside Consolidated
----- ---------- -------- ------------
(dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Real estate, net $72,175 $18,850 $38,000 $2,406,963
Deferred financing and leasing costs, net 16,751
Cash and cash equivalents 19,935
Mortgages and notes receivable 84,007
Other assets 37,655
Investments in and advance
to joint ventures and corporations 51,345
--------- ----------- ---------- ------------
Total assets $72,175 $18,850 $38,000 $2,616,656
========= =========== ========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $619,276
Note payable, Credit Facility $72,175 $18,850 $38,000 340,761
Other liabilities 66,973
Investment in joint venture 24,458
--------- ----------- ---------- ------------
Total liabilities 72,175 18,850 38,000 1,051,468
Minority interest in Operating Partnership 149,756
Stockholders' equity 1,415,432
--------- ----------- ---------- ------------
Total liabilities and stockholders
equity $72,175 $18,850 $38,000 $2,616,656
========= =========== ========== ============
</TABLE>
(A) The Riverside investment consists of a mortgage loan receivable from
Riverside Project LLC in the amount of $26,000 which bears interest at 9%
and is due upon sale along with 50% of any excess sale proceeds. In
addition, loans bearing interest at 7% in the amount of $3,250 each are due
from Beacon Property Management Corporation and Beacon Design Corporation,
the proceeds of which were used by these entities to capitalize Riverside
Project LLC.
(B) 150 California consists of a parcel of land on which the Company plans to
develop a 207,000 square foot class A office property.
(C) The mortgage debt has an interest rate of 7.37% and requires monthly
principal and interest payments based on a 25 year amortization schedule.
The mortgage matures March 15, 2000 but maybe extended until March 15, 2003
based on compliance with certain covenant requirements.
(D) The seller of Civic Opera Building was issued $6,701 of Operating
Partnership Units consisting of 156,756 units valued at $42.745 each.
(E) Media Center consists of a parcel of land on which the Company plans to
develop a 585,000 square feet of class A office space.
F-9
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon October &
Properties New York Life November
Corporation Perimeter and Fairfax Va. 1996
Historical Center (A) Portfolios (B) Acquisitions (G)
------------ ----------- ---------------- ----------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C>
Revenue:
Rental income $147,825 $6,420 19,098 38,886
Management fees 3,005
Recoveries from tenants 16,719 304 3,788 3,674
Mortgage interest income 4,970
Other income 11,272 208 845 3,012
------------- ------------ ------------- -------------
Total revenue 183,791 6,932 23,731 45,572
------------- ------------ ------------- -------------
Expenses:
Property expenses 37,211 1,562 4,875 11,716
Real estate taxes 18,124 591 1,708 3,991
General and administrative 19,331 378 812 1,700
Mortgage interest expense 30,300 1,895 (C) 2,954 (F)
Interest - amortization of financing costs 2,084 15 (D)
Depreciation and amortization 33,184 1,196 (E) 4,374 (E) 9,105 (E)
------------- ------------ ------------- -------------
Total expenses 140,234 5,637 14,723 26,512
------------- ------------ ------------- -------------
Income from operations 43,557 1,295 9,008 19,060
Equity in net income of joint ventures and corporation 4,989
------------- ------------ ------------- -------------
Income from continuing operations 48,546 1,295 9,008 19,060
Discontinued operations:
Loss from operations - Construction Company (2,609)
Loss on sale - Construction Company (249)
Gain on sale - Westlakes Office Park
------------- ------------ ------------- -------------
Income before minority interest 45,688 1,295 9,008 19,060
Minority interest in Operating Partnership (5,988)
------------- ------------ ------------- -------------
Income before extraordinary items $39,700 $1,295 $9,008 $19,060
Series A Preferred dividends
------------- ------------ ------------- -------------
Net income available for common shares
before extraordinary items $39,700 $1,295 $9,008 $19,060
============= ============ ============= =============
Common shares outstanding
Net income per common share
(1) Includes depreciation and amortization of $4,033
(2) Company share of Operating Partnership is 88.07%
<CAPTION>
Properties
December Acquired Westlakes
1996 as of Office Park
Acquisitions (H) June 30, 1997 (I) Sale (K)
---------------- ----------------- -----------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C>
Revenue:
Rental income 26,858 66,093 ($8,422)
Management fees
Recoveries from tenants 6,099 7,991 (1,020)
Mortgage interest income
Other income 470 2,771 (1,293)
----------- ------------- -----------
Total revenue 33,427 76,855 (10,735)
----------- ------------- -----------
Expenses:
Property expenses 4,509 14,299 (2,588)
Real estate taxes 5,036 8,499 (626)
General and administrative 1,250 1,952 (471)
Mortgage interest expense 10,380 (J)
Interest - amortization of financing costs
Depreciation and amortization 6,555 (E) 18,913 (E) (2,458)
----------- ------------- -----------
Total expenses 17,350 54,043 (6,143)
----------- ------------- -----------
Income from operations 16,077 22,812 (4,592)
Equity in net income of joint ventures and corporation
----------- ------------- -----------
Income from continuing operations 16,077 22,812 (4,592)
Discontinued operations:
Loss from operations - Construction Company
Loss on sale - Construction Company
Gain on sale - Westlakes Office Park 16,505
----------- ------------- -----------
Income before minority interest 16,077 22,812 11,913
Minority interest in Operating Partnership
----------- ------------- -----------
Income before extraordinary items $16,077 $22,812 $11,913
Series A Preferred dividends
----------- ------------- -----------
Net income available for common shares
before extraordinary items $16,077 $22,812 $11,913
=========== ============= ===========
Common shares outstanding
Net income per common share
(1) Includes depreciation and amortization of $4,033
(2) Company share of Operating Partnership is 88.07%
<CAPTION>
Properties
Acquired
After Pro Forma Pro Forma
June 30, 1997 (L) Adjustments Consolidated
----------------- ----------- ------------
<S> <C> <C> <C>
Revenue:
Rental income $28,548 $325,306
Management fees 3,005
Recoveries from tenants 4,645 42,200
Mortgage interest income 3,406 (M) 8,376
Other income 666 17,951
------------ ----------- ------------
Total revenue 33,859 3,406 396,838
------------ ----------- ------------
Expenses:
Property expenses 10,258 81,841
Real estate taxes 6,088 43,411
General and administrative 1,797 26,750
Mortgage interest expense 21,452 (N) 66,981
Interest - amortization of financing costs 2,099
Depreciation and amortization 6,108 (E) 76,976
----------- ---------- ------------
Total expenses 24,251 21,452 298,058
----------- ---------- ------------
Income from operations 9,608 (18,046) 98,780
Equity in net income of joint ventures and corporation (450) (O) 4,539 (1)
----------- ---------- ------------
Income from continuing operations 9,608 (18,497) 103,319
Discontinued operations:
Loss from operations - Construction Company (2,609)
Loss on sale - Construction Company (249)
Gain on sale - Westlakes Office Park 16,505
----------- ---------- ------------
Income before minority interest 9,608 (18,497) 116,966
Minority interest in Operating Partnership (5,822) (P) (11,810)
----------- ---------- ------------
Income before extraordinary items $9,608 ($24,319) $105,155 (2)
Series A Preferred dividends (17,960) (Q) (17,960)
----------- ---------- ------------
Net income available for common shares
before extraordinary items $9,608 ($42,279) $87,195
=========== ========== ============
Common shares outstanding 55,375,143
Net income per common share $1.57
(1) Includes depreciation and amortization of $4,033
(2) Company share of Operating Partnership is 88.07%
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
F-10
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(A) Results of operations of Perimeter Center for the period ended
February 14, 1996.
<TABLE>
<S> <C>
Rental income- historical $6,128
Pro forma straight-line rent adjustment 292
--------
Pro forma rental income $6,420
========
</TABLE>
(B) Results of operations of the Fairfax County Portfolio and the New York
Life Portfolio for the periods ended September 4, 1996 and August 15,
1996, respectively.
<TABLE>
<CAPTION>
Fairfax New York
County Life
Portfolio Portfolio Total
----------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Rental income-historical $7,284 $11,048 $18,332
Pro forma straight-line rent adjustment 377 389 766
----------------------------------------------
Pro forma rental income 7,661 11,437 19,098
Management fees
Recoveries from tenants 542 3,247 3,788
Mortgage interest income
Other income 72 773 845
----------------------------------------------
Total revenue 8,274 15,457 23,731
----------------------------------------------
Expenses:
Property expenses 1,581 3,294 4,875
Real estate taxes 364 1,345 1,708
General and administrative 80 732 812
Mortgage interest expense (F) 2,954 2,954
Interest - amortization of financing costs
Depreciation and amortization (E) 1,568 2,806 4,374
----------------------------------------------
Total expenses 6,546 8,177 14,723
----------------------------------------------
Income from operations $1,728 $7,280 $9,008
==============================================
</TABLE>
(C) Net interest expense associated with the MetLife Mortgage Loan in the
amount of $218 million based on a 7.08% interest rate for the period
ended prior to March 15, 1996.
(D) Amortization of the costs of obtaining the permanent financing at
$1.2 million over 10 years.
F-11
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(E) Detail of depreciation expense by property is presented as follows:
<TABLE>
<CAPTION>
Basis Life Depreciation
----- ---- ------------
<S> <C> <C> <C>
Perimeter Center $287,130 30 yrs $1,196
=================
Fairfax County Portfolio 69,300 30 yrs $1,568
The New York Life Portfolio 135,000 30 yrs 2,806
-----------------
$4,374
=================
October & November 1996 Acquisitions:
------------------------------------
Rosslyn, Virginia Portfolio 89,145 30 yrs $2,352
New England Executive Park 67,500 30 yrs 1,969
245 First Street 40,500 30 yrs 1,209
10960 Wilshire Boulevard 119,700 30 yrs 3,574
-----------------
$9,105
=================
December 1996 Acquisitions:
--------------------------
Lake Marriott Business Park 31,110 30 yrs $1,008
Shoreline Technology Park 100,650 30 yrs 3,263
Presidents Plaza 69,250 30 yrs 2,284
-----------------
$6,555
=================
1997 acquisitions as of June 30, 1997
-------------------------------------
10880 Wilshire Boulevard 102,000 30 yrs $3,400
Centerpointe 49,500 30 yrs 1,650
Westbrook Corporate Center 163,890 30 yrs 5,463
225 Franklin Street 252,000 30 yrs 8,400
-----------------
$18,913
=================
Properties acquired
-------------------
after June 30, 1997:
-------------------
Sunnyvale Business Center 30,420 30 yrs $1,014
Civic Opera Building 53,649 30 yrs 1,788
200 West Adams 64,958 30 yrs 2,165
Lakeside 34,200 30 yrs 1,140
-----------------
$6,108
=================
</TABLE>
(F) Fairfax County Portfolio interest expense on debt assumed for period prior
to acquisition:
<TABLE>
<CAPTION>
Principal Rate Expense
--------- ---- -------
<S> <C> <C> <C>
John Marshall $21,068 8.38% $1,197
EJ Randolph (1) 18,016 7.78% 951
Northridge 16,306 7.28% 806
------------ --------
$55,390 $2,954
============ ===========
</TABLE>
(1) Paid off by Credit Facility proceeds at closing.
F-12
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(G) Results of operations of the Rosslyn, Virginia Portfolio, New England
Executive Park, 245 First Street and 10960 Wilshire Boulevard for the period
prior acquisition.
<TABLE>
<CAPTION>
Rosslyn New England 10960
Virginia Executive Wilshire
Portfolio Park 245 First St. Blvd. Total
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income- historical $11,640 $11,766 $4,552 $9,650 $37,607
Pro forma straight-line rent adjustment 361 283 510 124 1,278
-------------------------------------------------------------------------------
Pro forma rental income 12,001 12,049 5,062 9,774 38,885
Management fees
Recoveries from tenants 528 1,113 1,776 257 3,674
Mortgage interest income
Other income $1,066 533 1,413 3,012
-------------------------------------------------------------------------------
Total revenue 13,595 13,162 7,371 11,444 45,571
-------------------------------------------------------------------------------
Expenses:
Property expenses 2,611 4,958 1,020 3,126 11,716
Real estate taxes 747 1,421 913 910 3,991
General and administrative 575 471 81 572 1,700
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (E) 2,352 1,969 1,209 3,574 9,105
-------------------------------------------------------------------------------
Total expenses 6,286 8,819 3,223 8,183 26,512
-------------------------------------------------------------------------------
Income from operations 7,308 4,342 4,148 3,261 19,059
===============================================================================
</TABLE>
(H) Results of operations of Lake Marriott Business Park, Shoreline
Technology Park and Presidents Plaza for the period prior to acquisition.
<TABLE>
<CAPTION>
Shoreline Lake Marriott
Technology Business Presidents
Park Park Plaza Total
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Rental income-historical $12,942 $3,824 $9,244 26,009
Pro forma straight-line rent adjustment 237 611 848
---------------------------------------------------------------
Pro forma rental income 12,942 4,061 9,855 26,857
Management fees
Recoveries from tenants 1,068 996 4,035 6,099
Mortgage interest income
Other income 470 470
---------------------------------------------------------------
Total revenue 14,010 5,057 14,359 33,426
---------------------------------------------------------------
Expenses:
Property expenses 105 718 3,685 4,509
Real estate taxes 1,068 395 3,572 5,036
General and administrative 71 8 1,171 1,250
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (E) 3,263 1,008 2,284 6,555
---------------------------------------------------------------
Total expenses 4,508 2,130 10,712 17,350
---------------------------------------------------------------
Income from operations 9,503 2,927 3,647 16,077
===============================================================
</TABLE>
F-13
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(I) Results of operations of 10880 Wilshire Boulevard,
Centerpointe and Westbrook Corporate Center, 225 Franklin
Street for the year 1996.
<TABLE>
<CAPTION>
10880 Westbrook 225
Wilshire Corporate Franklin
Boulevard Centerpointe Center Street Total
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $8,687 $7,293 $21,029 $24,172 $61,181
Pro forma straight-line rent adjustment 399 300 2,778 1,435 4,912
---------------------------------------------------------------------------------
Pro forma rental income 9,086 7,593 23,807 25,607 66,093
Management fees
Recoveries from tenants 80 578 1,806 5,527 7,991
Mortgage interest income
Other income 1,306 99 136 1,230 2,771
---------------------------------------------------------------------------------
Total revenue 10,472 8,270 25,749 32,364 76,855
---------------------------------------------------------------------------------
Expenses:
Property expenses 3,066 1,740 4,400 5,093 14,299
Real estate taxes 1,043 497 3,113 3,846 8,499
General and administrative 720 180 208 844 1,952
Mortgage interest expense (J) 1,914 8,466 10,380
Interest - amortization of financing costs
Depreciation and amortization (E) 3,400 1,650 5,463 8,400 18,913
---------------------------------------------------------------------------------
Total expenses 8,229 5,981 21,650 18,183 54,043
---------------------------------------------------------------------------------
Income from operations $2,243 $2,289 $4,099 $14,181 $22,812
=================================================================================
</TABLE>
(J) Interest expense in mortgage debt assumed:
Centerpointe - historical 1996 expense.
Westbrook Corporate Center - based on a principal balance of $106,000
with interest at 8%.
(K) Historical results of operations of Westlakes Office Park
(L) Results of operations of Sunnyvale Business Center, Civic Opera Building,
200 West Adams and Lakeside for the year 1996.
<TABLE>
<CAPTION>
Sunnyvale Civic 200
Business Opera West
Center Building Adams Lakeside Total
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $3,209 $10,358 $10,467 $4,408 $28,442
Pro forma straight-line rent adjustment 69 (68) 105 106
---------------------------------------------------------------------------------
Pro forma rental income 3,209 10,427 10,399 4,513 28,548
Management fees
Recoveries from tenants 212 1,545 2,647 241 4,645
Mortgage interest income
Other income 12 551 67 36 666
---------------------------------------------------------------------------------
Total revenue 3,433 12,523 13,113 4,790 33,859
---------------------------------------------------------------------------------
Expenses:
Property expenses 6,070 2,393 1,795 10,258
Real estate taxes 201 1,990 3,539 358 6,088
General and administrative 59 937 339 462 1,797
Mortgage interest expense (J)
Interest - amortization of financing costs
Depreciation and amortization (E) 1,014 1,788 2,165 1,140 6,108
---------------------------------------------------------------------------------
Total expenses 1,274 10,785 8,436 3,755 24,251
---------------------------------------------------------------------------------
Income from operations $2,159 $1,738 $4,677 $1,035 $9,608
=================================================================================
</TABLE>
F-14
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
<TABLE>
<S> <C>
(M) Interest income related to the acquisition of the Rowes Wharf mortgage $ 611
----------------
Interest income on Riverside notes receivable:
Interest income - note receivable from Riverside Project LLC ($26,000 * 9%) 2,340
Interest income - note receivable from Beacon Design Corp. ($3,250 * 7%) 228
Interest income - note receivable from Beacon Property Management Corp.
($3,250 * 7%) 228
----------------
Total 2,796
----------------
Grand total $3,406
================
(N) Credit facility interest expense:
Credit Facility balance per pro forma balance sheet $340,761
Less Credit Facility balances relating to development projects
in which the associated interest expense would be capitalized:
Development projects owned or underdevelopment as of June 30, 1997:
Crosby Phase II (2,957)
175 Wyman Street (24,000)
Development projects acquired after June 30, 1997:
150 California (10,600)
Media Center (18,850)
----------------
Adjusted pro forma Credit Facility balance 284,354
Average Credit Facility rate through December 31, 1996 7.78%
----------------
Pro Forma Credit Facility interest expense full year 22,123
Less historical 1996 Credit Facility interest expense 3,294
----------------
Pro Forma Credit Facility adjustment 18,829
----------------
Mortgage Interest:
Pro forma mortgage interest on Centerpointe full year based on principal
balance of $30,000 with interest at 7.32% 2,196
Less: Historical 1996 interest expense 1,914
----------------
282
----------------
Mortgage Interest:
Pro forma mortgage interest on Civic Opera Building full year based on
principal balance of $31,773 with interest at 7.37% 2,342
----------------
Grand total $21,452
================
(0) Adjustment to equity in net income of corporations as a result of
Riverside notes:
Beacon Design Corp. note payable ($3,250 * 7%) ($228)
Beacon Property Management Corp. note payable ($3,250 * 7%) (228)
----------------
Total interest expense adjustment (455)
Company ownership % of entities 98.99%
----------------
Adjustment to equity in net income of corporations ($450)
================
(P) Reflects decrease for minority interest (%) in Operating Partnership. 11.93%
(Q) Series A preferred dividends based on 8,000,000 shares with a $25.00
per share redemption price at 8.98%.
</TABLE>
F-15
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Beacon Properties Properties
Properties Acquired Westlakes Acquired
Corporation as of Office Park After Pro Forma Pro Forma
Historical June 30, 1997(A) Sale (B) June 30, 1997(C) Adjustments Consolidated
----------- ----------------- -------- ---------------- ----------- ------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $134,688 $29,151 (3,087) 14,482 $175,234
Management fees 1,579 1,579
Recoveries from tenants 17,598 2,964 (408) 1,982 22,136
Mortgage interest income 2,759 1,398(E) 4,157
Other income 6,129 269 (415) 212 6,195
----------- ---------------- ------------- ----------- ---------- ------------
Total revenue 162,753 32,383 (3,910) 16,676 1,398 209,300
----------- ---------------- ------------- ----------- ---------- ------------
Expenses:
Property expenses 31,316 5,943 (858) 4,321 40,722
Real estate taxes 17,480 3,719 (229) 3,308 24,278
General and administrative 17,711 461 (276) 934 18,830
Mortgage interest expense 22,663 4,065 6,560(F) 33,289
Interest - amortization of financing
costs 737 737
Depreciation and amortization 31,823 7,351(D) (2,049) 3,054 (D) 40,179
----------- ---------------- ------------- ----------- ---------- ------------
Total expenses 121,730 21,540 (3,412) 11,617 6,560 158,035
----------- ---------------- ------------- ----------- ---------- ------------
Income from operations 41,023 10,844 (498) 5,059 (5,163) 51,265
Equity in net income of joint ventures and
corporations 3,300 (225)(G) 3,075(1)
----------- ---------------- ------------- ----------- ---------- ------------
Income from continuing operations 44,323 10,844 (498) 5,059 (5,388) 54,340
Discontinued operations :
Loss from operations - Construction Company (1,473) (1,473)
----------- ---------------- ------------- ----------- ---------- ------------
Income before minority interest 42,850 10,844 (498) 5,059 (5,388) 52,867
Minority interest in Operating Partnership (6,679) 1,444(H) (5,235)
----------- ---------------- ------------- ----------- ---------- ------------
Income before extraordinary items 36,171 10,844 (498) 5,059 (3,944) 47,632(2)
Series A Preferred dividends (898) (8,082)(I) (8,980)
----------- ---------------- ------------- ----------- ---------- ------------
Net income available for common shares
before extraordinary items $35,273 $10,844 ($498) $5,059 ($12,026) $38,652
=========== ================ ============= =========== ========== ============
Common shares outstanding 55,375,143
Net income per common share $0.70
(1) Includes Depreciation and amortization of $2,076
</TABLE>
(2) Company share of Operating Partnership is 88.07%
See accompanying notes to pro forma condensed consolidated statement of
operations.
F-16
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
(A) Results of operations of 10880 Wilshire Boulevard, Centerpointe, Westbrook
Corporate Center and 225 Franklin Street for the period prior to the date
of acquisition.
<TABLE>
<CAPTION>
10880 Westbrook 225
Wilshire Corporate Franklin
Boulevard Centerpointe Center Street Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income - historical $4,078 $2,411 $9,961 $11,512 $27,962
Pro forma straight - line rent adjustment 660 99 464 (34) 1,189
--------------------------------------------------------------------------------
Pro forma rental income
4,738 2,510 10,425 11,478 29,151
Management fees
Recoveries from tenants 37 191 475 2,260 2,964
Mortgage interest income
Other income 81 33 2 154 269
--------------------------------------------------------------------------------
Total revenue 4,856 2,734 10,901 13,893 32,383
--------------------------------------------------------------------------------
Expenses:
Property expenses 1,274 575 1,941 2,153 5,943
Real estate taxes 360 164 1,617 1,578 3,719
General and administrative 31 60 27 344 461
Mortgage interest expense 726 3,339 4,065
Interest - amortization of financing costs
Depreciation and amortization (D) 1,058 545 2,155 3,593 7,351
--------------------------------------------------------------------------------
Total expenses 2,723 2,070 9,079 7,667 21,540
--------------------------------------------------------------------------------
Income from operations $2,133 $663 $1,822 $6,225 $10,844
================================================================================
</TABLE>
(B) The results of operations for Westlakes Office Park for the period January
1, 1997 to May 7, 1997.
(C) Results of operations of Sunnyvale Business Center, Civic Opera Building,
200 West Adams and Lakeside for the six months ended June 30, 1997.
<TABLE>
<CAPTION>
Sunnyvale Civic 200
Business Opera West
Center Building Adams Lakeside Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income-historical $1,610 $4,937 $5,543 $2,348 $14,438
Pro forma straight-line rent adjustment 59 (34) 19 44
--------------------------------------------------------------------------------
Pro forma rental income 1,610 4,996 5,509 2,367 14,482
Management fees
Recoveries from tenants 102 571 1,164 145 1,982
Mortgage interest income
Other income 7 146 38 21 212
--------------------------------------------------------------------------------
Total revenue 1,719 5,713 6,711 2,533 16,676
--------------------------------------------------------------------------------
Expenses:
Property expenses 2,206 1,155 960 4,321
Real estate taxes 102 1,050 1,971 185 3,308
General and administrative 87 447 148 252 934
Mortgage interest expense
Interest - amortization of financing costs
Depreciation and amortization (D) 507 894 1,083 570 3,054
--------------------------------------------------------------------------------
Total expenses 696 4,597 4,357 1,967 11,617
--------------------------------------------------------------------------------
Income from operations $1,023 $1,116 $2,354 $566 $5,059
================================================================================
</TABLE>
F-17
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
(Unaudited)
(D) Detail of depreciation expense by property is presented as follows:
<TABLE>
<CAPTION>
Basis Life Depreciation
----- ---- ------------
<S> <C> <C> <C>
1997 acquisitions as of June 30, 1997
-------------------------------------
10880 Wilshire Boulevard $102,000 30 yrs $1,058
Centerpointe 49,500 30 yrs 545
Westbrook Corporate Center 163,890 30 yrs 2,155
225 Franklin Street 252,000 30 yrs 3,593
-----------------
$7,351
=================
Properties acquired
-------------------
after June 30, 1997:
--------------------
Sunnyvale Business Center $30,420 30 yrs $507
Civic Opera Building 53,649 30 yrs 894
200 West Adams 64,958 30 yrs 1,083
Lakeside 34,200 30 yrs 570
-----------------
$3,054
=================
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
(E) Interest income on Riverside notes receivable:
Interest income - note receivable from Riverside Project LLC ($26,000*9%) $1,170
Interest income - note receivable from Beacon Design Corp. ($3,250*7%) 114
Interest income - note receivable from Beacon Property Management Corp. ($3,250*7%) 114
-------
Total $1,398
=======
</TABLE>
(F) Credit facility interest expense:
<TABLE>
<CAPTION>
<S> <C>
Credit Facility balance per pro forma balance sheet $340,761
Less Credit Facility balances relating to development projects
in which the associated interest expense would be capitalized:
Development projects owned or underdevelopment as of June 30, 1997:
Crosby Phase II (2,957)
175 Wyman Street (24,000)
Development projects acquired after June 30, 1997:
150 California (10,600)
Media Center (18,850)
----------------
Adjusted pro forma Credit Facility balance 284,354
Average Credit Facility rate through June 30, 1997 7.38%
----------------
Pro Forma Credit Facility interest expense full year 20,985
50%
----------------
Pro Forma Credit Facility interest expense 1/2 year 10,493
Less historical 1997 Credit Facility interest expense (5,103)
----------------
Pro Forma Credit Facility adjustment 5,390
----------------
Mortgage Interest:
Pro forma mortgage interest on Civic Opera Building 1/2 year based on
principal balance of $31,773 with interest at 7.37% 1,171
----------------
Grand total $6,560
================
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
(G) Adjustment to equity in net income of corporations as a result of Riverside notes:
Beacon Design Corp. note payable ($3,250*7%) ($114)
Beacon Property Management Corp. note payable ($3,250*7%) (114)
---------
Total interest expense adjustment (228)
Company ownership % of entities 98.99%
---------
Adjustment to equity in net income of corporations ($225)
=========
</TABLE>
(H) Reflects decrease for minority interest in Operating Partnership before
preferred shares.
(I) Series A preferred dividends based on 8,000,000 shares with a $25.00
redemption price at 8.98%.
F-18
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements of
Beacon Properties Corporation on Form S-3 (File Nos. 33-96736, 333-05707, 333-
21787, 333-21769, 333-25901, 333-34573 and 333-32693) and Form S-8 (File
Nos. 33-88606 and 333-19603) of our report dated September 5, 1997 on our audit
of the statement of excess of revenues over specific operating expenses of 200
W. Adams in Chicago, Illinois for the year ended December 31, 1996 and of our
report dated September 9, 1997 on our audit of the statement of excess of
revenues over specific operating expenses of the Civic Opera House located at 20
North Wacker in Chicago, Illinois for the year ended December 31, 1996, which
reports are included in this Form 8-K.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
October 23, 1997
