SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 8-K/A
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): JUNE 24, 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)
<PAGE>
Item 5. OTHER EVENTS.
Essex Property Trust, Inc. hereby amends Item 7 of its Current Report
on Form 8-K filed with the Securities and Exchange Commission on March 31, 1998
(the "Report"), to provide additional information relating to certain pro forma
adjustments. No significant changes have been made to Item 5 of the Report,
which has been included herein for convenience only.
On December 30, 1997, Casa Mango, a 96 unit apartment community located
in Del Mar, California, was acquired for a contract price of approximately $9.9
million, by a newly formed limited partnership in which the Company owns an
approximate $7 million preferred limited partner interest. For the approximate
remainder of the contract price, the Company owns an 84% limited partnership
interest, Essex Management Corporation owns a 1% general partnership interest
and unrelated third parties own a 15% limited partnership interest. 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 Page
--- -------------------- ----
Independent Auditors' Report 6
Combined statement of revenues and certain
expenses of Casa Mango, The Village at Cascade
Park, and Mirabella Apartments. 7
Notes to combined statements of revenues and
certain expenses of Casa Mango, The Village at
Cascade Park, and Mirabella Apartments 8
(c) Exhibits
--- --------
23.1 Consent of Independent Auditors' 10
Page 2 of 10
<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 TRUST, INC.
June 24, 1998 By: /s/ Mark J. Mikl
-----------------------
Mark J. Mikl
Controller
Page 3 of 10
<PAGE>
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 4 of 10
<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
----
Independent Auditors' Report........................................ 6
Combined Statement of Revenues and Certain Expenses................. 7
Notes to Combined Statement of Revenues and Certain Expenses....... 8
Page 5 of 10
<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 an 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
Page 6 of 10
<PAGE>
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
-------------
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
Page 7 of 10
<PAGE>
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 Statement of Revenues and Certain Expenses has bee
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.
Page 8 of 10
(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)
Estimated Taxable Operating Income and Cash Available by Operations for
the twelve months ended December 31, 1996 are shown below. 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.
The Company also believes that current distributions to shareholders
will equal or exceed 100% of its taxable income. Depreciation expense
of $1,890 was estimated considering the purchase price of each property
and the appropriate income tax depreciation method using a 27 1/2 year
depreciable life for the buildings.
Taxable Operating Income for Essex Property Trust, Inc. ("Registrant")
is estimated income subject to taxation before the dividends paid
deduction. Taxable income for Casa Mango, the Village at Cascade Park,
and Mirabella is estimated based on their combined revenues in excess
of certain expenses in the accompanying financial statement less
estimated depreciation expense. The dividends paid deduction is
estimated based on Registrants policy of paying dividends which exceed
100% of taxable income. Estimated Cash To Be Made Available By
Operations reflects Registrants' 1996 cash from operating activities.
Cash To Be Made Available By Operations from the combined operations of
Casa Mango, the Village at Cascade Park, and Mirabella is estimated to
be the same as revenues in excess of certain expenses in the
accompanying financial statement.
Casa Mango,
Village at
Cascade
Park, and
Registrant Mirabella Combined
---------- ----------- ----------
Year ended December 31, 1996
------------------------------------
Estimated taxable operating income $ 7,141 $ 2,647 $ 9,788
Estimated dividends paid deduction (7,141) (2,647) (9,788)
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Estimated tax expense $ - - -
========== =========== ==========
Estimated cash available by operations $ 22,029 4,537 26,566
Page 9 of 10
<PAGE>
Consent of Independent Auditors'
The Board of Directors
Essex Property Trust, Inc.:
We hereby consent to the incorporation of our report dated February 1, 1998
included in this Form 8-K/A into the Company's previously filed Registration
Statements No. 333-44467 and 333-21989.
KPMG Peat Marwick LLP
San Francisco, California
June 24, 1998
