<PAGE>
UNITED STATES
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) : AUGUST 29, 1997
---------------
ESSEX PROPERTY TRUST, INC.
--------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
MARYLAND 1-13106 77-0369576
- -------- ------- ----------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
</TABLE>
777 CALIFORNIA AVENUE, PALO ALTO, CALIFORNIA 94304
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code : (650) 494-3700
--------------
Page 1 of 16
<PAGE>
ITEM 5. OTHER EVENTS
- --------------------
(Dollars in thousands)
1997 ACQUISITIONS
- -----------------
On January 3, 1997, the Company acquired Wilshire Promenade, a 128 unit
apartment community in Fullerton, California, for a contract price of $10,250.
Wilshire Promenade Limited Partnership, a California limited partnership was the
arms-length unrelated third party seller of the property.
On January 28, 1997, the Company acquired Tara Village, a 168 unit apartment
community in Tarzana, California, for a contract price of $10,300. KLST
Partnership, a California general partnership was the arms-length unrelated
third party seller of the property.
On February 27, 1997, the Company acquired Foothill Gardens and Twin Creeks
located in San Ramon, California, adding 176 units to the Company's portfolio.
These properties were purchased for an aggregate contract price of $19,166.
Dame Construction Company, Inc., a California corporation was the arms-length
unrelated third party seller of the property.
On June 3, 1997, the Company purchased Kings Road, a 194 unit apartment
community located in Los Angeles, California, for a contract price of $12,895.
Kings Road Apartments, L.P., a California limited partnership was the arms-
length unrelated third party seller of the property.
On June 23, 1997, the Company purchased Evergreen Heights, a 200 unit apartment
community located in Kirkland, Washington, for a contract price of $15,800. In
connection with this transaction the Company assumed a $9,404, 8.78% fixed
interest rate loan. The loan matures in December, 2002. Lincoln Evergreen
Limited Partnership, a Washington limited partnership was the arms-length third
party seller of the property.
On June 25, 1997, the Company acquired Villa Scandia, a 118 unit apartment
community located in Ventura, California, for a contract price of $5,160. Tiger
Ventura County, L.P., a Delaware limited partnership was the arms-length third
party seller of the property.
On June 26, 1997, the Company acquired Casa Del Mar, a 96 unit apartment
community located in Pasadena, California, for a contract price of $6,075. CEI-
Pasadena Partners, Ltd., a California limited partnership was the arms-length
third party seller of the property.
On June 30, 1997, the Company, through an 85% interest in a newly formed limited
partnership, acquired The Bluffs II, a 224 unit apartment community located in
San Diego, California, for a contract price of $10,660. The property secures a
loan from the Company of $7,672, which may be replaced by third party financing.
The balance of the purchase price was paid by the issuance of (i) 18,473 limited
partnership units of Essex Portfolio L.P. (valued at $544) (ii) payment of $493
in cash by the 15% partners in the newly formed partnership and (iii) Essex's
cash investment. Lincoln-Bluffs II Associates, L.P., a California limited
partnership was the arms-length third party seller of the property.
On July 15, 1997, the Company acquired The Village Apartments, a 122 unit
apartment community, located in Oxnard, California, for a contract price of
$7,720. Pacifica Village, Ltd., a California limited partnership was the arms-
length third party seller of the property.
On August 6, 1997, the Company acquired a majority ownership interest in an
additional 193 units located adjacent to the 371 unit Camarillo Oaks property
which the Company has owned since 1996. The contract price of this property was
$12,000. In connection with this transaction the Company assumed $8,915 of tax
exempt variable rate bonds which mature in June 2018. Jimmie H. and Judy S.
Shinohara and Camarillo Investments, Inc. a California corporation was the arms-
length third party seller of the property.
On August 6, 1997, the Company acquired Park Place and Windsor Court Apartments,
located in Los Angeles, California, adding 118 units to the Company's portfolio.
These properties were purchased for an
Page 2 of 16
<PAGE>
aggregate purchase price of $11,000. Detroit Properties, Inc., a California
corporation was the arms-length third party seller of the property.
On August 21, 1997, the Company approved the acquisition of Huntington Breakers,
a 342 unit apartment community located in Huntington Beach, California, for a
contract price of $30,400. In connection with this transaction the Company will
be assuming approximately $16,000 of tax exempt variable rate bonds which mature
in July 2014. The anticipated acquisition date is September 30, 1997. Huntington
Breakers Apartments Limited Partnership, a California limited partnership is the
arms-length third party seller of the property.
The acquisitions were funded with proceeds from the Company's December 1996 and
March 1997 Common Stock and Convertible Preferred Stock offerings, assumed loans
or bonds secured by the properties as indicated above, the Company's lines of
credit and the proceeds from dispositions of two of the Company's retail
centers.
1997 DISPOSITIONS
- -----------------
On April 23, 1997, the Company sold Cedar Mill Place, a retail shopping center
located in Portland, Oregon for a gross sales price of $1,950 resulting in a
gain of approximately $454. Tandem Properties, LLC was the arms-length third
party purchaser of the property.
On May 15, 1997, the Company sold Wichita Towne Center, a retail shopping center
located in Milwaukie, Oregon for a gross sales price of $1,617 resulting in a
loss of $40. Hsu-Chin Cheng and Kou-Ping Cheng, Co-Trustees of The Cheng Family
Trust was the arms-length third party purchaser of the property.
All of the acquisition and disposition transactions were arms-length
transactions with unrelated third parties. In each case, the purchase price was
based upon a number of factors, including historical and projected rental
income, appropriate capitalization rates for similar properties, market
comparables, prevailing market conditions in the area and extensive due
diligence studies including review of financial operations and physical
inspections.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS PAGE
- -------------------------------------------------------------------------- ----
(A) FINANCIAL STATEMENTS - (ATTACHMENT "A") 5
- -------------------------------------------
Combined Historical Summary of Gross Income and Direct Operating Expenses for
Wilshire Promenade, Tara Village, Evergreen Heights, The Bluffs II, The Village
Apartments, Camarillo Lots 7, 8 and 9 and Huntington Breakers for the Year Ended
December 31, 1996.
(B) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION - UNAUDITED
- ----------------------------------------------------------------------
(ATTACHMENT "B") 11
- ----------------
Pro forma condensed consolidated balance sheet for Essex Property Trust as of
June 30, 1997 and the related pro forma condensed consolidated statements of
operations for the six months ended June 30, 1997 and the year ended December
31, 1996.
(C) EXHIBITS
- ------------
None
Page 3 of 16
<PAGE>
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 of the
undersigned, hereunto duly authorized.
ESSEX PROPERTY TRUST, INC.
By: /s/ Mark J. Mikl
----------------------------------------------
Mark J. Mikl, Controller
(Principal Accounting Officer)
Date: August 29, 1997
--------------------------------------------
Page 4 of 16
<PAGE>
ATTACHMENT "A"
WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS,
THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9,
AND HUNTINGTON BREAKERS APARTMENTS
Combined Historical Summary of Gross Income and
Direct Operating Expenses
December 31, 1996
(With Independent Auditors' Report Thereon)
Page 5 of 16
<PAGE>
ATTACHMENT "A"
WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS,
THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9,
AND HUNTINGTON BREAKERS APARTMENTS
Combined Historical Summary of Gross Income and
Direct Operating Expenses
Year ended December 31, 1996
CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report......................................................... A-1
Combined Historical Summary of Gross Income and Direct Operating Expenses............ A-2
Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses... A-3
</TABLE>
Page 6 of 16
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Essex Property Trust, Inc.:
We have audited the accompanying Combined Historical Summary of Gross Income and
Direct Operating Expenses (the Summary) of Wilshire Promenade, Tara Village,
Evergreen Heights, The Bluffs II, The Village Apartments, Camarillo Lots 7, 8,
and 9, and Huntington Breakers Apartments (the Properties) for the year ended
December 31, 1996. The Summary is the responsibility of management. Our
responsibility is to express an opinion on the Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the Summary is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the Summary. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall Summary presentation. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying Summary was prepared to comply with the requirements of rule 3-
14 of Regulation S-X of the Securities and Exchange Commission and excludes
certain expenses, described in note 1, that would not be comparable to those
resulting from the proposed future operations of the property.
In our opinion, the Summary referred to above presents fairly, in all material
respects, the combined gross income and direct operating expenses, exclusive of
expenses described in note 1, of Wilshire Promenade, Tara Village, Evergreen
Heights, The Bluffs II, The Village Apartments, Camarillo Lots 7, 8, and 9, and
Huntington Breakers Apartments for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
San Francisco, California
August 15, 1997 KPMG Peat Marwick LLP
Page A-1
<PAGE>
WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS,
THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9,
AND HUNTINGTON BREAKERS APARTMENTS
Combined Historical Summary of Gross Income and
Direct Operating Expenses
Year ended December 31, 1996
<TABLE>
<CAPTION>
Revenue:
<S> <C>
Rental income $12,278,673
Other 441,916
-----------
12,720,589
-----------
Operating expenses:
Salaries 1,060,069
Maintenance and repairs 1,144,514
Real estate taxes 762,261
Utilities 778,672
Administrative 218,680
Advertising 153,264
Insurance 240,419
Interest 2,696,167
Other 172,197
-----------
7,226,243
-----------
Operating income $5,494,346
===========
</TABLE>
Page A-2
<PAGE>
WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS,
THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9,
AND HUNTINGTON BREAKERS APARTMENTS
Notes to Combined Historical Summary of Gross Income and
Direct Operating Expenses
Year ended December 31, 1996
(1) PROPERTIES AND ACCOUNTING PRESENTATION
The Combined Historical Summary of Gross Income and Direct Operating
Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X of
the Securities and Exchange Commission and relates to the operations of
Wilshire Promenade, a 128 unit apartment community located in Fullerton,
California; Tara Village, a 168 unit apartment building located in Tarzana,
California; Evergreen Heights, a 200 unit apartment community located in
Kirkland, Washington; The Bluffs II, a 224 unit apartment community located
in San Diego, California; The Village Apartments, a 122 unit apartment
community located in Oxnard, California; Camarillo Lots 7, 8, and 9, three
apartment buildings comprising 193 units, located in Camarillo, California;
and Huntington Breakers Apartments, a 342 unit apartment building located in
Huntington Beach, California.
The following represents the date each property was acquired:
1997
----
<TABLE>
<CAPTION>
<S> <C>
Wilshire Promenade January 3
Tara Village January 28
Evergreen Heights June 23
The Bluffs II June 30
The Village Apartments July 15
Camarillo Lots 7, 8, and 9 August 6
Huntington Breakers Apartments approved acquisition
</TABLE>
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreciation, management fees and income taxes as these
expenses would not be comparable to the proposed future operations of the
properties. Interest expense is included for Evergreen Heights, Camarillo
Lots 7, 8, and 9 and Huntington Breakers as debt instruments were assumed in
connection with the acquisition (or probable acquisition) of these
properties.
The acquisition of the properties may result in a new valuation for purposes
of determining future property tax assessments.
(Continued)
Page A-3
<PAGE>
WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS,
THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9,
AND HUNTINGTON BREAKERS APARTMENTS
Notes to Combined Historical Summary of Gross Income and
Direct Operating Expenses
Rental revenue is recognized on the accrual basis of accounting. Tenant
leases are generally for a one year period or less.
(2) ESTIMATED TAXABLE OPERATING RESULTS AND CASH TO BE MADE AVAILABLE BY
OPERATIONS (UNAUDITED)
Pro forma cash available from operations and pro forma taxable income for
the twelve months ended June 30, 1997 are shown below. Pro forma taxable
operating results are derived by deducting depreciation. However, in any
year in which Essex Property Trust, Inc. (the Company) qualifies as a real
estate investment trust (REIT) under Sections 856 to 860 of the Internal
Revenue Code of 1986, as amended (the Code), in general it is not subject to
federal income tax on that portion of its income that it distributes to
stockholders. The Company believes it qualifies under the code as a REIT.
Depreciation expense was estimated considering the purchase price of each
property and the appropriate income tax depreciation method.
<TABLE>
<CAPTION>
<S> <C>
Revenues $12,886,007
Operating expenses 7,562,855
-----------
Cash available from operations 5,323,152
Depreciation expense 1,821,188
-----------
Taxable income $ 3,501,964
===========
</TABLE>
Page A-4
<PAGE>
ATTACHMENT "B"
ESSEX PROPERTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION - UNAUDITED
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1997 B-1
Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 1997 B-2
Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1996 B-3
Notes to Pro Forma Condensed Consolidated Financial Information B-4
</TABLE>
Page 11 of 16
<PAGE>
ESSEX PROPERTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997
(Unaudited)
(Dollars in thousands, except shares and per share amounts)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS (2)
ACQUISITION
HISTORICAL PROPERTY PRO FORMA
---------- --------------- ---------
<S> <C> <C> <C>
ASSETS
Real estate
Rental properties
Land and land improvements $130,657 $ 15,280 $145,937
Buildings and improvements 401,452 45,840 447,292
-------- -------- --------
532,109 61,120 593,229
Less accumulated depreciation (52,942) 0 (52,942)
-------- -------- --------
479,167 61,120 540,287
Investments 3,022 0 3,022
-------- -------- --------
482,189 61,120 543,309
Cash and cash equivalents 19,827 (7,814) 12,013
Notes and other receivables 18,734 0 18,734
Other assets 10,605 89 10,694
-------- -------- --------
$531,355 $ 53,395 $584,750
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes and bonds payable $179,932 $ 24,915 $204,847
Lines of credit 0 27,400 27,400
Accounts payable and accrued liabilities 14,216 0 14,216
Dividends payable 7,220 0 7,220
Other liabilities 3,328 0 3,328
-------- -------- --------
Total liabilities 204,696 52,315 257,011
Minority interest 26,255 1,080 27,335
STOCKHOLDERS' EQUITY
8.75% convertible preferred stock,
series 1996A, $.001 par value,
1,600,000 authorized, 800,000
issued and outstanding 1 0 1
Common stock, $.0001 par value,
668,400,000 shares authorized,
8,805,500 shares issued and
outstanding 1 0 1
Additional paid in capital 334,483 0 334,483
Accumlulated deficit (34,081) 0 (34,081)
-------- -------- --------
300,404 0 300,404
-------- -------- --------
$531,355 $ 53,395 $584,750
======== ======== ========
</TABLE>
See accompanying notes to pro forma condensed consolidated financial information
Page B-1
<PAGE>
ESSEX
PROPERTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
(Dollars in thousands, except shares
and per share amounts)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS(3)
----------------------------------------
ACQUISITION DISPOSITION
HISTORICAL PROPERITIES PROPERITIES PRO FORMA
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental $ 35,709 $ 7,772 $ 225 $ 43,256
Interest and other income 2,422 69 0 2,491
----------- ---------- -------- --------
38,131 7,841 225 45,747
EXPENSES
Property operating expenses
Maintenance and repairs 3,087 789 38 3,838
Real estate taxes 2,902 661 16 3,547
Utilities 2,280 603 22 2,861
Administrative 2,352 550 0 2,902
Advertising 552 78 0 630
Insurance 464 121 2 583
Depreciation and amortization 6,308 1,479 0 7,787
----------- ---------- -------- --------
17,945 4,281 78 22,148
Interest 6,230 2,001 0 8,231
Amortization of deferred financing 255 9 0 264
cost
General and administrative 1,051 0 0 1,051
Loss from hedge termination 0 0 0 0
----------- ---------- -------- --------
Total expenses 25,481 6,291 78 31,694
----------- ---------- -------- --------
Income before gain on sales of real
estate, minority interest and
extraordinary item 12,650 1,550 147 14,053
Gain on sales of real estate 414 0 414 0
----------- ---------- -------- --------
Income before minority interest and
extraordinary item 13,064 1,550 561 14,053
Minority interest (1,838) (257) (18) (2,077)
----------- ---------- -------- --------
Income before extraordinary item 11,226 1,293 543 11,976
Extraordinary item (104) 0 0 (104)
----------- ---------- -------- --------
Net income $ 11,122 $ 1,293 $ 543 $ 11,872
=========== ========== ======== ==========
PER SHARE DATA
Net income per share from operations
before extraordinary item $ 0.81 $ 0.87
Extraordinary item - debt
extinguishment (0.01) (0.01)
----------- --------
Net income per share $ 0.80 $ 0.86
=========== ==========
Weighted average number of shares
outstanding during the period 12,764,917 13,774,154
=========== ==========
SUPPLEMENTAL INFORMATION - FUNDS FROM
OPERATIONS
Income before minority interest $ 12,960 $ 1,550 $ 561 $ 13,949
Adjustments
Depreciation and amortization 6,308 1,479 0 7,787
Adjustment for unconsolidated
joint ventures 448 0 0 448
Non-recurring items, including gain
on sales of real estate and loss from
hedge termination and
extraordinary item (310) 0 (414) 104
Minority interest (280) 0 0 (280)
----------- ---------- -------- --------
Funds from operations $ 19,126 $ 3,029 $ 147 $ 22,008
=========== ========== ======== ========
See accompanying notes to pro forma condensed consolidated financial information
Page B-2
</TABLE>
<PAGE>
ESSEX
PROPERTY TRUST, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(Unaudited)
(Dollars in thousands, except shares
and per share amounts)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS(3)
----------------------------------------
ACQUISITION DISPOSITION
HISTORICAL PROPERITIES PROPERITIES PRO FORMA
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental $ 47,780 $ 19,980 $ 578 $ 67,182
Interest and other income 2,913 386 0 3,299
------------ ----------- ---------- ----------
50,693 20,366 578 70,481
EXPENSES
Property operating expenses
Maintenance and repairs 4,341 1,979 90 6,230
Real estate taxes 3,790 1,733 46 5,477
Utilities 3,175 1,502 47 4,630
Administrative 2,911 1,397 (0) 4,308
Advertising 653 236 0 889
Insurance 635 355 8 982
Depreciation and amortization 8,855 3,684 91 12,448
------------ ----------- ---------- ----------
24,360 10,886 282 34,964
Interest 11,442 4,032 0 15,474
Amortization of deferred financing
costs 639 17 0 656
General and administrative 1,717 0 0 1,717
Loss from hedge termination 42 0 0 42
------------ ----------- ---------- ----------
Total expenses 38,200 14,935 282 52,853
------------ ----------- ---------- ----------
Income before gain on sales of real
estate, minority interest and
extraordinary item 12,493 5,431 296 17,628
Gain on sales of real estate 2,477 0 0 2,477
------------ ----------- ---------- ----------
Income before minority interest and
extraordinary item 14,970 5,431 296 20,105
Minority interest (2,648) (1,038) (41) (3,645)
------------ ----------- ---------- ----------
Income before extraordinary item 12,322 4,393 255 16,460
Extraordinary item (3,441) 0 0 (3,441)
------------ ----------- ---------- ----------
Net income $ 8,881 $ 4,393 $ 255 $ 13,019
============ =========== ========== ==========
PER SHARE DATA
Net income per share from operations
before extraordinary item $ 1.50 $ 1.69
Extraordinary item - debt
extinguishment (0.38) (0.30)
------------ ----------
Net income per share $ 1.12 $ 1.39
============ ==========
Weighted average number of shares
outstanding during the period 7,347,527 9,366,000
============ ==========
SUPPLEMENTAL INFORMATION - FUNDS FROM
OPERATIONS
Income before minority interest $ 11,529 $ 5,431 $ 296 $ 16,664
Adjustments
Depreciation and amortization 8,855 3,684 91 12,448
Adjustment for unconsolidated
joint ventures 508 0 0 508
Non-recurring items, including gain
on sales of real estate and loss from
hedge termination and
extraordinary item 1,006 0 0 1,006
Minority interest (560) 0 0 (560)
------------ ----------- ---------- ----------
Funds from operations $ 21,338 $ 9,115 $ 387 $ 30,066
============ =========== ========== ==========
See accompanying notes to pro forma condensed consolidated financial information
Page B-3
</TABLE>
<PAGE>
ESSEX PROPERTY TRUST, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
JUNE 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
(Dollars in thousands, except shares and per share amounts)
(1) - OVERVIEW
- --------------
Between January 1, 1997 and August 25,1997, Essex directly acquired thirteen
multifamily properties at an aggregate contract price of $121,026. In addition,
Essex currently has a multifamily property which would be considered a probable
acquisition at a contract price of $30,400. During this period, the Company
disposed of two retail properties for proceeds of $3,567. Greater details
regarding these property transactions are included in Item 5 of this form 8-K
filing.
On March 31, 1997, Essex completed the sale of 2,000,000 shares of its Common
Stock to Cohen & Steers at a price of $29.125 per share. Net proceeds from the
sale were $58,125.
On June 20, 1997, Essex completed the second phase of the Tiger/Westbrook
transaction with the sale of an additional $20,000 of its Convertible Preferred
Stock, to Tiger/Westbrook. Gross proceeds from the sale were $20,000.
The following unaudited pro forma condensed consolidated balance sheet as of
December 31, 1996 and pro forma condensed consolidated statements of operations
for the six months ended June 30, 1997 and the year ended December 31, 1996, are
presented as if the property and equity transactions stated above occurred on
January 1, 1996.
(2) - PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS
- ----------------------------------------------------------------
The pro forma condensed consolidated balance sheet as of June 30, 1997 includes
nine acquisitions with an aggregate cost of $90,306 in the historical column and
pro forma adjustments for four property acquisitions and one probable
acquisition all subsequent to June 30, 1997 with an aggregate cost of $61,120.
Real estate investments were increased by $151,426 based on the contracted
acquisition prices. It is assumed that 75% of the increase in real estate
investment will be allocated to buildings and improvements for purposes of
depreciation.
The detail of the increase in real estate investment based on properties
acquisition since July 1, 1997 is as follows:
<TABLE>
<CAPTION>
<S> <C>
The Village $ 7,720
Camarillo Oaks additional 193 units $12,000
Park Place / Windsor Court (2 properties) $11,000
Huntington Breakers (probable acquisition) $30,400
</TABLE>
The Village Apartments acquisition was funded with proceeds from the 1997 equity
transactions.
The additional 193 units at Camarillo Oaks acquisition was funded with
approximately $8,915 of assumed tax exempt variable rate bonds and the balance
with the Company's lines of credit.
The Park Place / Windsor Court acquisition was funded with the Company's lines
of credit.
The Huntington Breakers is anticipated to be funded with approximately $16,000
of assumed tax exempt variable rate bonds and the balance with the Company's
lines of credits.
Page B-4
<PAGE>
ESSEX PROPERTY TRUST, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
JUNE 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
(Dollars in thousands, except shares and per share amounts)
(3) - PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ADJUSTMENTS
- ----------------------------------------------------------------------------
The pro forma condensed consolidated statements of operations for the six months
ended June 30, 1997 and year ended December 31, 1996 include the following pro
forma adjustments:
For Wilshire Promenade, acquired on January 3, 1997, pro forma adjustment was
made by annualizing the six months of actual operating income through June 30,
1997 for inclusion in the six months ended June 30, 1997 and the twelve months
ended December 31, 1996.
For Tara Village, acquired on January 28, 1997, pro forma adjustment was made by
annualizing the five months of actual operating income through June 30, 1997 for
inclusion in the six months ended June 30, 1997 and the twelve months ended
December 31, 1996.
For Foothill Gardens and Twin Creeks, acquired on February 27, 1997, pro forma
adjustment was made by annualizing the four months actual operating income
through June 30, 1997 for inclusion in the six months ended June 30, 1997 and
the twelve months ended December 31, 1996.
For Cedar Mill and Wichita Towne Center shopping centers, the pro forma
adjustment reflects the elimination of the actual results of operations.
For Kings Road, Casa Del Mar, Evergreen Heights, Villa Scandia, The Bluffs II,
The Village Apartments, additional 193 units at Camarillo Oaks, Park Place,
Windsor Court and Huntington Breakers, pro forma adjustments incorporated into
the six months ended June 30, 1997 or the twelve months ended December 31, 1996
is based on the respective properties semi-annualized or annualized internal
operating budgets.
Page B-5
