SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MARCH 30, 1998
(February 25, 1998)
ESSEX PROPERTY TRUST, INC.
(Exact name of Registrant as
Specified in its Charter)
Maryland
(State or Other Jurisdiction
of Incorporation)
1-13106
(Commission File Number)
77-0369576
(IRS Employer Identification No.)
925 East Meadow Drive
Palo Alto, CA 94303
(650) 494-3700
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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Item 5. OTHER EVENTS.
On December 30, 1997, the Company, through an 85% interest in a newly
formed limited partnership, acquired Casa Mango, a 96 unit apartment community
located in Del Mar, California, for a contract price of approximately $9.9
million. The property secures a loan from the Company of approximately $7.0
million, which may be replaced by third party financing. Pardee Construction
Company, a California corporation, was the arms-length third party seller of the
property.
On December 17, 1997, the Company acquired Village at Cascade Park, a
198 unit apartment community located in Vancouver, Washington, for a contract
price of approximately $10.4 million. WFRWW Partnership, Patricia Haugen and
John Leyerzaph were the arms-length third party sellers of the property.
On February 25, 1998, the Company acquired Mirabella Apartments, a
608-unit apartment community in Newbury Park, California, for a contract price
of approximately $50.5 million. Prometheus Southern California II, L.P. was the
arms-length third party sellers of the property.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
Independent Auditors' Report
Combined statements of revenues and certain expenses of Casa Mango, The
Village at Cascade Park, and Mirabella Apartments.
Notes to combined statements of revenues and certain expenses of Casa
Mango, The Village at Cascade Park, and Mirabella Apartments.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ESSEX PROPERTY, INC.
March 30, 1998
By: /s/ Mark J. Mikl
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Mark J. Mikl
Controller
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CASA MANGO, THE VILLAGE AT CASCADE PARK,
AND MIRABELLA APARTMENTS
Combined Statement of Revenues and Certain Expenses
December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
CASA MANGO, THE VILLAGE AT CASCADE PARK, AND MIRABELLA APARTMENTS
Combined Statement of Revenues and Certain Expenses
Year ended December 31, 1996
Contents
Page
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Independent Auditors'Report.............................................. 1
Combined Statement of Revenues and Certain Expenses...................... 2
Notes to Combined Statement of Revenues and Certain Expenses............. 3
<PAGE>
Independent Auditors' Report
The Board of Directors
Essex Property Trust, Inc.:
We have audited the accompanying Combined Statement of Revenues and Certain
Expenses (the Statement) of Casa Mango, the Village at Cascade Park, and
Mirabella Apartments for the year ended December 31, 1996. The Statement is the
responsibility of management. Our responsibility is to express an opinion on the
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 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 Statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying Statement 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 properties. It is not
intended to be a complete presentation of the operations of the properties.
In our opinion, the Statement referred to above presents fairly, in all material
respects, the revenues and certain expenses, as described in note 1, of Casa
Mango, the Village at Cascade Park, and Mirabella Apartments for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick, LLP
San Francisco, California
February 1, 1998
1
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CASA MANGO, THE VILLAGE AT CASCADE PARK, AND MIRABELLA APARTMENTS
Combined Statement of Revenues and Certain Expenses
Year ended December 31, 1996
Revenues:
Rental income $ 7,091,337
Other 198,865
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7,290,202
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Certain expenses:
Salaries 686,388
Real estate taxes 410,222
Utilities 572,372
Maintenance and repairs 567,585
Advertising 143,421
Insurance 158,156
Administrative 113,272
Professional services 98,328
Other 3,516
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2,753,260
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Revenues in excess of certain expenses $ 4,536,942
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See accompanying notes to Combined Statement of Revenues and Certain Expenses.
2
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CASA MANGO, THE VILLAGE AT CASCADE PARK, AND MIRABELLA APARTMENTS
Notes to Combined Statement of Revenues and Certain Expenses
December 31, 1996
(1) Properties and Accounting Presentation
The Combined Statementof Revenues and Certain 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 Casa Mango, a 96 unit apartment
building located in San Diego, California, the Village at Cascade Park, a
192 unit apartment building located in Vancouver, Washington, and
Mirabella, a 608 unit apartment building located in Newbury Park,
California.
The following represents the date each property was acquired:
Property Date
-------- -------
Casa Mango December 30, 1997
The Village at Cascade Park December 17, 1997
Mirabella February 25, 1998
In accordance with Rule 3-14, expenses are presented exclusive of
depreciation, management fees, interest and income taxes as these expenses
would not be comparable to the proposed future operations of the
properties.
The acquisition of the properties may result in a new valuation for
purposes of determining future property tax assessments.
Rental revenue is recognized on the accrual basis of accounting. Tenant
leases are generally for a one year period or less.
3
(Continued)
<PAGE>
CASA MANGO, THE VILLAGE AT CASCADE PARK, AND MIRABELLA APARTMENTS
Notes to Combined Statement of Revenues and Certain Expenses
(2) Estimated Taxable Operating Results and Cash to be Made Available by
Operations (unaudited)
Cash available from operations and taxable income for the twelve months
ended December 31, 1997 are shown below. Taxable operating results are
derived by deducting depreciation from net income before depreciation.
However, Essex Property Trust, Inc. (the Company) has and believes it will
continue to qualify as a real estate investment trust (REIT) under Sections
856 to 860 of the Internal Revenue Code of 1986, as amended. REITs are
allowed to deduct distributions to shareholders from taxable income. The
Company believes that current distributions to shareholders will equal or
exceed its taxable income. Depreciation expense was estimated considering
the purchase price of each property and the appropriate income tax
depreciation method using a 27 1/2 year depreciable life.
Revenues $ 8,840,000
Operating expenses 3,220,000
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Estimated cash available from operations 5,620,000
Depreciation expense 1,945,000
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Estimated taxable income $ 3,675,000
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