-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P/P+ztLXYIKINDcsfQHdwskeXLBmSVGh24bml/T+um2cgvrSO++AOYpJs7l+mIEa A36Xlsb7Pkq9yEh9SF8b6Q== 0000950131-97-004518.txt : 19970722 0000950131-97-004518.hdr.sgml : 19970722 ACCESSION NUMBER: 0000950131-97-004518 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970721 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970721 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURITY CAPITAL PACIFIC TRUST CENTRAL INDEX KEY: 0000080737 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 746056896 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10272 FILM NUMBER: 97643313 BUSINESS ADDRESS: STREET 1: 7777 MARKET CENTER AVE CITY: EL PASO STATE: TX ZIP: 79912 BUSINESS PHONE: 9158773900 MAIL ADDRESS: STREET 1: 7777 MARKET CENTER AVE CITY: EL PASO STATE: TX ZIP: 79912 FORMER COMPANY: FORMER CONFORMED NAME: PROPERTY TRUST OF AMERICA DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: EL PASO REAL ESTATE INVESTMENT TRUST DATE OF NAME CHANGE: 19700108 8-K 1 FORM 8-K DATED 07/21/97 =============================================================================== 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): July 21, 1997 SECURITY CAPITAL PACIFIC TRUST (Exact name of registrant as specified in its charter) Maryland 1-10272 74-6056896 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 7777 Market Center Avenue, 79912 El Paso, Texas (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (915) 877-3900 Not Applicable (Former name or former address, if changed since last report) =============================================================================== ITEM 5. OTHER EVENTS Acquisitions and Probable Acquisitions: The following acquisitions of multifamily communities, including one community under contract, were or will be made by Security Capital Pacific Trust (PTR) from unrelated parties. PTR acquired, or will acquire, these communities because PTR and its REIT manager, Security Capital Pacific Incorporated, believe that multifamily community investment in certain western United States markets present excellent long term opportunities for consistent rental increases, high occupancies and value appreciation. PTR acquired Sierra Hills apartments on April 17, 1997 from a corporation. Sierra Hills is a 300 unit, middle income complex located in San Bernadino, California. PTR acquired this community through a tax-deferred exchange, using disposition proceeds of approximately $18.7 million. At the date of purchase, the community's occupancy rate was 98.0%. PTR acquired Los Padres apartments on April 23, 1997 from a general partnership. Los Padres is a 245 unit, middle income complex located in Santa Clara, California. PTR acquired this community through a tax-deferred exchange, using disposition proceeds of approximately $30.5 million. At date of purchase, the community's occupancy rate was 96.3%. PTR acquired La Jolla Point apartments on April 24, 1997 from a partnership. La Jolla Point is a 328 unit, middle income complex located in La Jolla (San Diego County), California. PTR acquired this community for approximately $30.6 million through a tax-deferred exchange, using disposition proceeds of approximately $9.0 million and assumed a mortgage note payable in the amount of $21.6 million. At date of purchase, the community's occupancy rate was 95.7%. PTR acquired Cambrian apartments on June 3, 1997 from an agency of the State of California. Cambrian is a 422 unit, middle income complex located in Seattle, Washington. PTR acquired this community through a tax-deferred exchange, using disposition proceeds of approximately $41.1 million. At date of purchase, the community's occupancy rate was 97.2%. PTR acquired Pelican Point apartments on June 26, 1997 from a limited partnership. Pelican Point is a 400 unit moderate income complex located in Ventura, California. PTR acquired this community for approximately $29.0 million through a tax-deferred exchange, using disposition proceeds of approximately $13.0 million and assumed a mortgage note payable in the amount of $16.0 million. At the date of purchase, the community's occupancy rate was 97.8%. PTR acquired Le Club apartments on June 30, 1997 from a limited partnership. Le Club is a 370 unit moderate income complex located in Sacramento, California. PTR acquired this community for approximately $33.0 million through a tax-deferred exchange, using disposition proceeds of approximately $11.3 million and assumed a mortgage note payable in the amount of $21.7 million. At the date of purchase, the community's occupancy rate was 94.5%. PTR has entered into a contract with a limited partnership to purchase Carrington Place apartments, scheduled to close in July 1997. PTR's earnest money has become non-refundable and acquisition of this community is likely. However, there can be no assurance that the community will be acquired. Carrington Place is a 142 unit moderate income complex located in Salt Lake City, Utah and on May 19, 1997 was 98.3% occupied. PTR anticipates acquiring this community for approximately $7.2 million through a tax-deferred exchange, using disposition proceeds of approximately $3.6 million and assuming a mortgage note payable in the amount of approximately $3.6 million. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBIT (a) Financial Statements: Combined Statements of Revenues and Certain Expenses for Certain Multifamily Communities with Independent Auditors' Report thereon. (b) Pro Forma Financial Information: Pro Forma Balance Sheet as of March 31, 1997 (unaudited) Pro Forma Statement of Earnings for the year ended December 31, 1996 (unaudited) Pro Forma Statement of Earnings for the three months ended March 31, 1997 (unaudited) Notes to Pro Forma Financial Statements (c) Exhibit: Exhibit 23.1 - Independent Auditors' Consent SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Security Capital Pacific Trust Date: July 21, 1997 By: /s/ Bryan Flanagan ---------------------- Bryan Flanagan Senior Vice President and Principal Financial Officer By: /s/ Ash Atwood ----------------------- Ash Atwood Vice President and Principal Accounting Officer Independent Auditors' Report ---------------------------- The Board of Trustees and Shareholders Security Capital Pacific Trust: We have audited the accompanying Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (the Combined Statement) described in note 1 for the year ended December 31, 1996. This Combined Statement is the responsibility of management. Our responsibility is to express an opinion on the Combined 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 Combined Statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Statement. We believe that our audit provides a reasonable basis for our opinion. The accompanying Combined Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in Form 8-K to be filed by Security Capital Pacific Trust as described in note 2. The presentation is not intended to be a complete presentation of the Communities' revenues and expenses. In our opinion, the Combined Statement referred to above presents fairly, in all material respects, the combined revenues and certain expenses described in note 2 for certain Multifamily Communities for the year ended December 31, 1996, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP Chicago, Illinois July 3, 1997 SECURITY CAPITAL PACIFIC TRUST Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (note 1) Year ended December 31, 1996 and the Period from January 1, 1997 through the earlier of March 31, 1997 or Date of Acquisition (in thousands)
Period from January 1, 1997 through the earlier of March 31, 1997 or Date of Acquisition 1996 (unaudited) ---- --------------- Revenues: Rental revenues $22,968 5,600 Other real estate income 798 183 ------- ----- 23,766 5,783 ------- ----- Certain expenses: Salaries and benefits 1,540 384 Utilities 1,343 330 Repairs and maintenance 1,609 422 Management fees (note 4) 755 209 Real estate taxes 1,821 371 Advertising and promotion 295 72 Insurance (note 4) 340 84 Interest expense on debt assumed (note 5) 5,368 1,207 Other 762 163 ------- ----- 13,833 3,242 ------- ----- Revenues in excess of certain expenses $ 9,933 2,541 ======= =====
The accompanying notes are an integral part of the combined statement of revenues and certain expenses for certain multifamily communities. 1 SECURITY CAPITAL PACIFIC TRUST Notes to Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities Year ended December 31, 1996 and the Period from January 1, 1997 through the earlier of March 31, 1997 or Date of Acquisition (in thousands) (1) Operating Properties The Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (the Combined Statement) for the year ended December 31, 1996 and the period from January 1, 1997 through the earlier of March 31, 1997 or date of acquisition, relates to the operations of the following communities which have been or are expected to be acquired by Security Capital Pacific Trust (PTR) from unaffiliated parties:
Multifamily Acquisition Community Location Date Purchase Price --------- -------------------- ----------- -------------- Marina Lakes West Oakland, CA 2-19-97 $ 20,900 River Meadows Huntington Beach, CA 3-20-97 13,925 Folsom Ranch Sacramento, CA 3-31-97 23,150 Sierra Hills San Bernadino, CA 4-17-97 18,700 Los Padres Santa Clara, CA 4-23-97 30,500 La Jolla Point La Jolla, CA 4-24-97 30,600 Pelican Point Ventura, CA 6-26-97 29,000 Le Club Sacramento, CA 6-30-97 33,000 Carrington Place Salt Lake City, UT under contract 7,200 -------- $206,975 ========
(2) Basis of Presentation The accompanying Combined Statement has been prepared on the accrual basis of accounting. The Combined Statement has been prepared for the purpose of complying with the rules and regulation of the Securities and Exchange Commission and for inclusion in Form 8-K to be filed by PTR. The Combined Statement is not intended to be a complete presentation of combined revenues and expenses of the communities above for the year ended December 31, 1996 and the period from January 1, 1997 through the earlier of March 31, 1997 or date of acquisition. (Continued) 2 SECURITY CAPITAL PACIFIC TRUST Notes to Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (2) Basis of Presentation, Continued The Combined Statement excludes certain amounts which would not be comparable to the proposed future operations of the communities as follows: (a) depreciation of the building and improvements; (b) interest expense related to debt not assumed; (c) interest income; (d) income taxes; and (e) other income and expense items unique to the prior owners. (3) Summary of Significant Accounting Policies Revenue Recognition Rental income from leasing activities consist of lease payments earned from tenants under lease agreements. Capitalization Policy Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments are capitalized. Advertising and Promotion The cost of advertising and promotion is expensed as incurred. Use of Estimates The preparation of the Combined Statement in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Combined Statement and accompanying notes. Actual results could differ from those estimates. Unaudited Interim Combined Statement The Combined Statement for the period from January 1, 1997 through the earlier of March 31, 1997 or date of acquisition is unaudited. In the opinion of management, all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Combined Statement for the interim period have been included. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year for the communities. (Continued) 3 SECURITY CAPITAL PACIFIC TRUST Notes to Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities (4) Related Party Transactions Approximately $99 and $18 (unaudited) was accrued and paid in management fees to affiliates of prior owners in 1996 and 1997, respectively. Approximately $44 and $11 (unaudited) was paid in insurance expense to prior owners in 1996 and 1997, respectively. (5) Debt Assumption PTR assumed outstanding debt of approximately $21.6 million in connection with the acquisition of La Jolla Point. The debt consists of a tax-exempt variable rate mortgage note (4.35% nominal rate at April 24, 1997) which requires quarterly principal and interest payments of $484 through August 1, 2014 when all remaining principal and interest will be due and payable. PTR assumed outstanding debt of approximately $21.7 million in connection with the acquisition of Le Club. The debt consists of a tax-exempt variable rate bond (4.05% nominal rate at June 30, 1997) which requires quarterly principal and interest payments through November 1, 2015 when all remaining principal and interest will be due and payable. PTR assumed outstanding debt of approximately $16.0 million in connection with the acquisition of Pelican Point. The debt consists of a 7.0% nominal fixed rate tax-exempt mortgage note which requires monthly principal and interest payments of $114 until December 1, 1997 when all remaining principal and interest will be due and payable. PTR anticipates assuming outstanding debt of approximately $3.6 million in connection with the acquisition of Carrington Place. The debt consists of a 7.83% fixed rate tax-exempt mortgage note which requires monthly principal and interest payments of $28 until April 1, 2019 when all remaining principal and interest will be due and payable. 4 SECURITY CAPITAL PACIFIC TRUST PRO FORMA FINANCIAL STATEMENTS (Unaudited) The following unaudited pro forma financial statements for Security Capital Pacific Trust (PTR) reflect the acquisition or expected acquisition by PTR of the communities disclosed in this Form 8-K, Item 5 and those reported in Forms 8-K, Item 5 dated August 1, 1996, October 14, 1996, and February 20, 1997 (the "Previously Reported Acquisitions"). The pro forma financial statements have been prepared based upon certain pro forma adjustments to the historical financial statements of PTR. The accompanying unaudited pro forma balance sheet as of March 31, 1997 has been prepared as if the operating communities acquired, or under contract to be acquired, subsequent to March 31, 1997 had been acquired as of the balance sheet date. The accompanying unaudited pro forma statements of earnings for the year ended December 31, 1996 and for the three months ended March 31, 1997 have been prepared as if (i) the operating community acquisitions, including one operating community under contract, reported in this Form 8-K, Item 5 and (ii) the Previously Reported Acquisitions had occurred as of January 1, 1996. The acquisitions, including one community under contract, reported in this Form 8-K, Item 5 were structured as tax-deferred exchanges and therefore the effects of the community dispositions which funded (or are expected to fund) these acquisitions have also been reflected in the accompanying unaudited pro forma balance sheet as of March 31, 1997 and the unaudited pro forma statements of earnings as if the dispositions had occurred as of January 1, 1996. The unaudited pro forma financial statements do not purport to be indicative of the results which would actually have been obtained had the transactions described above been completed on the dates indicated or which may be obtained in the future. The unaudited pro forma financial statements should be read in conjunction with the combined statement of revenues and certain expenses for certain multifamily communities included herein and the financial statements of PTR. SECURITY CAPITAL PACIFIC TRUST PRO FORMA BALANCE SHEET March 31, 1997 (In thousands, except share data) (Unaudited)
Pro Forma Historical Adjustments Pro Forma ---------- ----------- --------- ASSETS ------ Real estate $ 2,233,866 $ 190,125 (a) $ 2,335,325 (88,666)(b) Less accumulated depreciation 100,041 (7,111)(b) 92,930 ------------ ------------ ----------- 2,133,825 108,570 2,242,395 Homestead Notes 191,829 191,829 Other mortgage notes receivable 13,537 - 13,537 ------------ ------------ ----------- Net investments 2,339,191 108,570 2,447,761 Cash and cash equivalents 7,941 - 7,941 Accounts receivable and accrued interest 8,487 - 8,487 Restricted cash in tax-deferred exchange escrow 59,000 (127,275)(a) 21,793 90,068 (b) Other assets 27,358 - 27,358 ------------- ------------ ----------- Total assets $ 2,441,977 $ 71,363 $ 2,513,340 ============ ============ =========== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Liabilities: Credit facilities $ 193,865 $ - $ 193,865 Long-term debt 630,000 - 630,000 Mortgages payable 230,578 62,850 (a) 287,964 (5,464)(b) Accounts payable 25,368 - 25,368 Accrued expenses and other liabilities 55,207 - 55,207 ------------ ------------ ----------- Total liabilities 1,135,018 57,386 1,192,404 ------------ ------------ ----------- Shareholders' Equity: Series A Preferred Shares (6,080,019 convertible shares; stated liquidation preference of $25 per share) 152,000 - 152,000 Series B Preferred Shares (4,200,000 shares issued; stated liquidation preference of $25 per share) 105,000 105,000 Common shares (76,075,971 shares issued) 76,076 - 76,076 Additional paid-in capital 928,330 - 928,330 Unrealized holding gain on Homestead Notes 73,886 73,886 Distributions in excess of net earnings (28,333) 13,977 (b) (14,356) ------------ ------------ ----------- Total shareholders' equity 1,306,959 13,977 1,320,936 ------------ ------------ ----------- Total liabilities and shareholders' equity $ 2,441,977 $ 71,363 $ 2,513,340 ============ ============ ===========
See accompanying notes to pro forma financial statements. SECURITY CAPITAL PACIFIC TRUST PRO FORMA STATEMENT OF EARNINGS (In thousands, except per share data) (Unaudited) [CAPTION] Year ended December 31, 1996 -------------------------------------------------------------------------------------- Historical ------------------------------------------------------- Acquisitions ------------------------ Previously Current Pro Forma PTR Revenues: PTR Reported (c) Report (d) Dispositions (e) Adjustments Pro Forma ---------- ---------- ----------- --------------- ----------- ------------ Rental revenues $ 322,046 $ 49,495 $ 21,252 $ (27,328) - $ 365,465 Interest income on Homestead Notes 2,035 - - - - 2,035 Other interest income 2,165 - - - - 2,165 ---------- ---------- ----------- -------------- -------------- ------------ 326,246 49,495 21,252 (27,328) - 369,665 ---------- ---------- ----------- -------------- -------------- ------------ Expenses: Rental expenses 116,512 17,642 6,663 (10,610) - 130,207 Property management fees paid to affiliates 11,610 2,020 689 (997) (510)(f) 12,812 Depreciation 44,887 - - (3,419) 11,551 (g) 53,019 Interest expense 35,288 8,650 3,524 (1,653) 17,529 (h) 63,338 REIT management fee paid to affiliate 22,191 - - - 76 (i) 22,267 General and administrative 1,077 - - - - 1,077 Other 592 - - - - 592 ---------- ---------- ----------- -------------- -------------- ------------ Total expenses 232,157 28,312 10,876 (16,679) 28,646 283,312 ---------- ---------- ----------- -------------- -------------- ------------ Earnings from operations 94,089 $ 21,183 10,376 (10,649) (28,646) 86,353 Less Preferred Share dividends 24,167 - - - - 24,167 ---------- ---------- ----------- -------------- -------------- ------------ Earnings from operations attributable to Common Shares $ 69,922 $ 21,183 $ 10,376 $ (10,649) $ (28,646) $ 62,186 ========== ========== =========== ============== ============== ============ Weighted-average Common Shares outstanding 73,057 73,057 ---------- ------------ Per Common Shares amounts: Earnings from operations attributable to Common Shares per Common Share $ 0.96 $ 0.85 ---------- ------------ See accompanying notes to pro forma financial statements.
PRO FORMA STATEMENT OF EARNINGS (In thousands, except per share data) (Unaudited)
Three months ended March 31, 1997 ------------------------------------------------------------------------------- Historical ---------------------------------------------------- Acquisitions ---------------------- Previously Current Pro Forma PTR Revenues: PTR Reported (c) Report(d) Dispositions(e) Adjustments Pro Forma ------- ------------ --------- --------------- ----------- --------- Rental revenues $79,950 $ 2,150 $ 5,480 $ (6,850) $- $80,730 Interest income on Homestead Notes 3,174 - - - - 3,174 Other interest income 370 - - - - 370 ------- ------- ------- ---------- -------- ------- 83,494 2,150 5,480 (6,850) - 84,274 ------- ------- ------- ---------- -------- ------- Expenses: Rental expenses 27,625 739 1,668 (2,626) - 27,406 Property management fees: Paid to affiliate 2,690 75 205 (252) (43)(f) 2,675 Paid to third parties 260 260 Depreciation 12,049 - - (715) 1,304 (g) 12,638 Interest expense 13,961 471 911 (213) (252)(h) 14,878 REIT management fee paid to affiliate 4,617 - - - 15 (i) 4,632 General and administrative 272 - - - - 272 Other 1,744 - - - - 1,744 ------- ------- ------- ---------- --------- ------- 63,218 1,285 2,784 (3,806) 1,024 64,505 ------- ------- ------- ---------- --------- ------- Earnings from operations 20,276 865 2,696 (3,044) (1,024) 19,769 Less Preferred Share dividends 5,035 - - - - 5,035 ------- ------- ------- ---------- --------- ------- Earnings from operations attributable to Common Shares $15,241 $ 865 $ 2,696 $ (3,044) $ (1,024) $14,734 ------- ======= ======= ========== ========= ------- Weighted average Common Shares outstanding 75,872 75,872 ======= ======= Per Common Shares amounts: Earnings from operations attributable to Common Shares per Common Share $ 0.20 $ 0.19 ======= ======= See accompanying notes to pro forma financial statements.
(a) Represents PTR's multifamily community acquisitions and one multifamily community under contract to be acquired subsequent to March 31, 1997, as follows:
Acquisition Acquisition Community Date Cost --------- ----------- ----------- Sierra Hills 04/17/97 $ 18,700 Los Padres 04/23/97 30,500 La Jolla Point 04/24/97 30,600 Cambrian 06/03/97 41,125 Pelican Point 06/26/97 29,000 Le Club 06/30/97 33,000 Carrington Place under contract 7,200 -------- Total $190,125 ========
PTR assumed, or anticipates assuming approximately $62,850 in mortgage notes payable upon the purchase of La Jolla Point, Le Club, Pelican Point and Carrington Place apartments. The $127,275 balance was or is expected to be financed using proceeds from community dispositions held in a tax- deferred exchange escrow account. (b) The following table summarizes the pro forma balance sheet adjustments relating to the post March 31, 1997 dispositions. The disposition proceeds were or are expected to be used in part to fund community acquisitions described in (a) above:
Net sales proceeds............................................... $95,532 Net book value ($88,666 Cost - $7,111 Accumulated Depreciation).. 81,555 ------- Gain............................................................. $13,977 ======= Mortgage note prepaid upon disposition of one community.......... $5,464 Restricted cash in tax-deferred exchange escrow.................. $90,068 ($95,532 Net sales proceeds - $5,464 prepayment of mortgage note)
(c) Reflects historical revenues and certain expenses, including mortgage interest if applicable, on the Previously Reported Acquisitions from the beginning of the period to the earlier of the respective dates of acquisition or the end of the respective period indicated. Historical revenues and certain expenses exclude amounts which would not be comparable to the proposed future operations of the communities such as certain interest expense, interest income, income taxes and depreciation. The following table reconciles the historical financial information for the communities previously reported (as defined below) to the pro forma statements of earnings:
For The Period January 1, 1996 To The Earlier Of The Date Of Acquisition Or December 31, 1996 ---------------------------------------------------- Property Rental Rental Management Interest Income Expense Fees Expense -------- -------- ---------- -------- Group A Communities (i)............... $40,567 $14,256 $1,699 $6,806 Group B Communities (ii).............. 7,007 2,430 246 1,844 Group C Communities (iii)............. 1,921 956 75 - ------- ------- ------ ------ Total............................... $49,495 $17,642 $2,020 $8,650 ======= ======= ====== ======
For The Period January 1, 1997 To The Earlier Of The Date Of Acquisition Or March 31, 1997 ------------------------------------------------ Property Rental Rental Management Interest Income Expense Fees Expense -------- -------- ---------- -------- Group A Communities (i)................. $ 742 $ 246 $ 27 $ 175 Group B Communities (ii)................ 1,408 493 48 296 Group C Communities (iii)............... - - - - ------- ------ ------ ------ Total................................. $ 2,150 $ 739 $ 75 $ 471 ======= ====== ====== ======
(i) Group A Communities consist of the following communities which were previously reported and for which an audited combined statement of revenues and certain expenses was previously provided:
Community Location Date Acquired ------------------------------- --------------------------------- ------------- Ocean Crest San Diego, California 03/29/96 Timberline Portland, Oregon 04/17/96 Club Pacifica San Diego, California 04/23/96 The Crossing Corona, California 05/21/96 Mission Springs Ontario, California 05/31/96 Newpointe Orange County, California 07/10/96 Brighton Portland, Oregon 08/16/96 Woodsong Village San Bernardino County, California 08/28/96 El Dorado San Diego, California 08/30/96 Ashton Place (formerly Oakwood) San Jose, California 09/16/96 Redwood San Francisco, California 09/20/96 Telegraph Hill Albuquerque, New Mexico 10/10/96 Summertree Salt Lake City, Utah 10/29/96 Villa Marseilles Aliso Viejo, California 11/12/96 Palisades La Jolla, California 11/27/96 Fox Creek Layton, Utah 12/17/96 Clubhouse Seattle, Washington 12/19/96 Harborside San Francisco, California 12/31/96 Newport Crossing Seattle, Washington 01/10/97 Reflections San Francisco, California 01/27/97 Marina Lakes East Oakland, California 02/19/97
(ii) Group B Communities consist of the following communities (three communities were previously reported but unaudited) for which an audited combined statements of revenues and certain expenses for the year ended December 31, 1996 is presented in this Form 8-K:
Community Location Date Acquired ------------------------ --------------------------------------- -------------- Previously Reported: Marina Lakes West Oakland, California 02/19/97 River Meadows Huntington Beach, California 03/20/97 Folsom Ranch Sacramento, California 03/31/97 Not Previously Reported: Sierra Hills San Bernadino, California 04/17/97 Los Padres Santa Clara, California 04/23/97 La Jolla Point La Jolla (San Diego County), California 04/24/97 Pelican Point Ventura, California 06/26/97 Le Club Sacramento, California 06/30/97 Carrington Place Salt Lake City, Utah under contract
(iii) Group C Communities consist of the following unaudited communities that were previously reported by PTR:
Community Location Date Acquired ----------------- -------------------------- ------------- Westcourt Village San Bernardino, California 03/27/96 Quail Ridge San Francisco, California 06/13/96
(d) Reflects historical revenues and certain expenses, including mortgage interest if applicable, on communities reported in this Form 8-K Item 5, for the year ended December 31, 1996 or for the period from January 1, 1997 to the earlier of the respective dates of acquisition or March 31, 1997. Historical revenues and certain expenses exclude amounts which would not be comparable to the proposed future operations of the communities such as certain interest expense, interest income, income taxes and depreciation. The following table reconciles the historical financial information for the Group B Communities to the pro forma statements of earnings:
For The Period January 1, 1996 To The Earlier Of The ---------------------------------------------------- Date Of Acquisition Or December 31, 1996 ---------------------------------------- Property Rental Rental Management Interest Income Expense Fees Expense ------ ------- ---------- -------- Total Group B Communities..................................... $23,766 $ 7,710 $ 755 $ 5,368 Less: Group B Communities, previously reported.................. (7,007) (2,430) (246) (1,844) ------ ------ ----- ------ Group B Communities, not previously reported.................. 16,759 5,280 509 3,524 Group D Community (iv)........................................ 4,493 1,383 180 - ------ ------ ----- ------- Total communities, not previously reported.................... $21,252 $ 6,663 $ 689 $ 3,524 ====== ====== ===== ======= For The Period January 1, 1997 To The Earlier Of The Date Of Acquisition Or March 31, 1997 Property ---------------------------------------------- Property Rental Rental Management Interest Income Expense Fees Expense ------ ------- ---------- -------- Total Group B Communities..................................... $ 5,783 $ 1,826 $ 209 $ 1,207 Less: Group B Communities, previously reported.................. (1,408) (493) (48) (296) ------ ------ ----- ------ Group B Communities, not previously reported.................. 4,375 1,333 161 911 Group D Community (iv)........................................ 1,105 335 44 - ------ ------ ----- ------ Total communities, not previously reported.................... $ 5,480 $ 1,668 $ 205 $ 911 ====== ====== ===== =======
(iv) Group D Community consists of the following unaudited community, which has not been previously reported: Community Location Date Acquired ------------ ----------------------- ---------------- Cambrian Seattle, Washington 6/03/97 (e) The acquisitions reflected in (a) above were structured as tax-deferred exchanges relating to the disposition of multifamily communities. This column reflects the elimination of the historical revenues and expenses for the period indicated related to the multifamily community dispositions which funded (or are expected to fund) these acquisitions. (f) Reflects the difference between historical property management fee expense and the fee that would have been charged by PTR's property manager, SCG Realty Services Incorporated. (g) Reflects pro forma depreciation expense adjustment from the beginning of the period to the earlier of the respective dates of acquisition or the end of the respective period indicated, based on the depreciable basis of PTR's acquisition cost, assuming asset lives ranging from 10 to 40 years. The pro forma depreciation expense adjustment amounts by community are as follows:
Twelve Three Community Acquisition Months Months --------- ------------------- Ended Ended Date Costs 12/31/96 3/31/97 ---- ----- -------- ------- Previously Reported: Westcourt Village....................... 03/27/96 12,762 61 - Ocean Crest............................. 03/29/96 15,600 77 - Timberline.............................. 04/17/96 7,043 40 - Club Pacifica........................... 04/23/96 14,300 88 - The Crossing............................ 05/21/96 14,850 116 - Mission Springs......................... 05/31/96 38,500 321 - Quail Ridge............................. 06/13/96 17,550 159 - Newpointe............................... 07/10/96 9,400 99 - Brighton................................ 08/16/96 11,150 140 - Woodsong Village........................ 08/28/96 12,300 162 - El Dorado............................... 08/30/96 29,350 391 - Ashton Place (formerly Oakwood)......... 09/16/96 64,800 923 - Redwood ................................ 09/20/96 37,000 535 - Telegraph Hill.......................... 10/10/96 8,100 126 - Summertree.............................. 10/29/96 10,000 166 - Villa Marseilles........................ 11/12/96 13,125 239 - Palisades............................... 11/27/96 31,600 575 - Fox Creek............................... 12/17/96 7,900 153 - Clubhouse............................... 12/19/96 8,030 156 - Harborside.............................. 12/31/96 21,385 427 - Newport Crossing........................ 01/10/97 11,290 226 6 Reflections............................. 01/27/97 52,100 1,042 77 Marina Lakes East....................... 02/19/97 18,600 371 51 Marina Lakes West....................... 02/19/97 20,900 419 57 River Meadows........................... 03/20/97 13,925 278 60 Folsom Ranch............................ 03/31/97 23,150 462 114 ------- ------ Total Previously Reported............. 7,752 365 ------- ------ Not Previously Reported: Sierra Hills............................ 04/17/97 18,700 $ 373 $ 92 Los Padres.............................. 04/23/97 30,500 609 150 La Jolla Point.......................... 04/24/97 30,600 611 151 Cambrian................................ 06/03/97 41,125 822 203 Pelican Point........................... 06/26/97 29,000 583 144 Le Club................................. 06/30/97 33,000 659 163 Carrington Place........................ under contract 7,200 142 36 ------- ------ Total Not Previously Reported......... 3,799 939 ------- ------ Grand Total....................... $11,551 $1,304 ======= ======
(h) Represents the pro forma interest expense adjustments related to utilization of line of credit borrowings that would have been required if the community acquisitions had occurred at January 1, 1996, net of the proforma reduction in line of credit borrowings associated with excess proceeds from dispositions:
Twelve Three Months Months Ended Ended 12/31/96 3/31/97 -------- ------- Pro forma line of credit borrowings required for operating communities acquired or under contract to be acquired, subsequent to the end of the respective period.....................$ 116,365 $ - Weighted average line of credit borrowings required for acquisitions made prior to the end of the respective period (net of mortgages assumed................................ 170,046 14,231 Less: Pro forma reduction in line of credit borrowings associated with weighted average excess disposition proceeds...................... (29,110) (29,110) --------- -------- Net pro forma line of credit borrowings............. 257,301 (14,879) Current interest rate............................... 6.8125% 6.7826% Proration factor.................................... 1.0 .25 --------- -------- Pro forma interest expense adjustment...............$ 17,529 $ (252) ========= ========
(i) Reflects adjustments to PTR's REIT management fee expense related to (i) the pro forma increase in cash flow resulting from acquisitions and dispositions of multifamily communities discussed in (c), (d) and (e) and (ii) adjustments discussed in (f) and (h):
Twelve Three Months Months Ended Ended 12/31/96 3/31/97 -------- ------- Historical earnings from operations from acquisitions and dispositions: Previously reported........................................$ 21,183 $ 865 Not Previously reported................................... 10,376 2,696 Dispositions, excluding depreciation expense.............. (14,068) (3,759) Pro Forma adjustments: Property management fees paid to affiliates............... 510 43 Interest expense.......................................... (17,529) 252 -------- ------- 472 97 REIT management fee percentage............................ 16% 16% -------- ------- Pro Forma REIT management fee expense adjustment..........$ 76 $ 15 ======== =======
EX-23.1 2 INDEPENDENT AUDITORS' CONSENT Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT ----------------------------- The Board of Trustees and Shareholders of Security Capital Pacific Trust: We consent to incorporation by reference in registration statements No. 33-25317 (Form S-8), No. 333-4455 (Form S-4), No. 333-12885 (Form S-3), and No. 333-24035 (Form S-3) of Security Capital Pacific Trust of our report dated July 3, 1997 relating to the Combined Statement of Revenues and Certain Expenses for Certain Multifamily Communities for the year ended December 31, 1996, which report appears in the current report on Form 8-K of Security Capital Pacific Trust dated July 21, 1997. KPMG PEAT MARWICK LLP Chicago, Illinois July 21, 1997 -----END PRIVACY-ENHANCED MESSAGE-----