-----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, QNkOqqjVDpaVCQFGlJx9jYIvc2n69k0TIsGH859hOPLnltRXYZFUYOhNJVlv3rje 38QDdt+a34v1mF766cWm6w== 0001029869-97-000458.txt : 19970410 0001029869-97-000458.hdr.sgml : 19970410 ACCESSION NUMBER: 0001029869-97-000458 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970407 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970409 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEACON PROPERTIES CORP CENTRAL INDEX KEY: 0000920114 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 043224258 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-12926 FILM NUMBER: 97576793 BUSINESS ADDRESS: STREET 1: 50 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173301400 MAIL ADDRESS: STREET 1: 50 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: BEACON OFFICE PROPERTIES INC DATE OF NAME CHANGE: 19940311 8-K/A 1 FORM 8-K/A-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A-1 CURRENT REPORT ----------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 7, 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) 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 10880 Wilshire Boulevard for the year ended December 31, 1996 Statement of Excess of Revenues over Specific Operating Expenses of Centerpointe for the year ended December 31, 1996 Statement of Excess of Revenues over Specific Operating Expenses of Westbrook Corporate Center for the year ended December 31, 1996 (b) Pro Forma Financial Statements Pro Forma Condensed Consolidated Balance Sheet as of December 31, 1996 (Unaudited) Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 1996 (Unaudited) (c) Exhibits 2.1 Agreement of Purchase and Sale and Joint Escrow Instructions between 10880 Property Corporation as seller and Beacon Properties, L.P. as buyer dated March 19, 1997 (a) 2.2 Agreement of Sale dated March 26, 1997 between Joshua Realty Corporation and Beacon Properties, L.P. (b) 2.3 Contribution Agreement dated March 20, 1997 between Westbrook Corporate Center Associates, Westbrook Corporate Center IV Associates Limited Partnership and Westbrook Corporate Center V Associates Limited Partnership, Illinois limited partnerships which are, respectively, the sole beneficiaries of the land trusts which own title to the Real Property and Beacon Properties, L.P. (b) 23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants. - ---------- (a) To be filed by amendment (b) Previously filed as part of the Company's Current Report on Form 8-K dated March 27, 1997. 2 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/ Lionel P. Fortin ----------------------------------- Lionel P. Fortin, Executive Vice President and Chief Operating Officer Date: April 8, 1997 3 10880 WILSHIRE BOULEVARD WESTWOOD, CALIFORNIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1996 F-1 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 10880 Wilshire Boulevard in Westwood, California (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 10880 Wilshire Boulevard in Westwood, California, for the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. Boston, Massachusetts March 11, 1997 F-2 10880 WILSHIRE BOULEVARD WESTWOOD, CALIFORNIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the Year Ended December 31, 1996 ----------------- Revenues: Base rent $ 8,687,295 Recoveries from tenants 80,246 Parking income, net of management fees 991,828 Other income 314,125 ----------- 10,073,494 ----------- Specific operating expenses (Note 2): Utilities 980,518 Janitorial and cleaning 92,112 Security 331,954 General and administrative 401,004 Management fee 319,183 Repairs and maintenance 1,271,907 Insurance 101,671 Property taxes 1,042,614 Landscaping 76,811 Ground lease 210,000 ----------- 4,827,774 ----------- Excess of revenues over specific operating expenses $ 5,245,720 ===========
The accompanying notes are an integral part of the financial statement. F-3 10880 WILSHIRE BOULEVARD WESTWOOD, CALIFORNIA NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties 10880 Wilshire Boulevard (the "Property") is located in Westwood, California and consists of one office building encompassing approximately 534,000 square feet. Beacon Properties Corporation intends to acquire the entire leasehold interest in the 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. The impact of the straight-line rent adjustment increased revenues by approximately $1,750,000 for the year ended December 31, 1996. 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 and amortization. Continued F-4 10880 WILSHIRE BOULEVARD WESTWOOD, CALIFORNIA NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES, CONTINUED 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: Year Ending December 31, 1997 $ 8,614,000 1998 11,333,000 1999 11,770,000 2000 11,288,000 2001 9,438,000 Thereafter 9,427,000 As of December 31, 1996, three tenants occupied approximately 34% of leasable square feet and represented 16% of total 1996 base revenues. 4. Ground Lease Commitment: The property is subject to a ground lease expiring in 2068. The lease provides for minimum rental payments of $210,000 per annum. At specified dates as provided for in the lease, annual rent payable is subject to adjustment at the greater of $210,000 or 7% of appraised market value of the property, as defined. The lessee has an option to buy out the lease on August 1, 2001 and pay the lessor for the land at an amount based on fair market value, as defined. The future minimum commitments under the ground lease are approximately as follows: 1997 $ 210,000 1998 210,000 1999 210,000 2000 210,000 2001 210,000 Thereafter 13,895,000 F-5 CENTERPOINTE FAIRFAX, VIRGINIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1996 F-6 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 Centerpointe in Fairfax, Virginia (the "Properties") for the year ended December 31, 1996. This financial statement is the responsibility of the Properties' 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 Properties 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 Properties' 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 Centerpointe in Fairfax, Virginia, for the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. Boston, Massachusetts March 18, 1997 F-7 CENTERPOINTE FAIRFAX, VIRGINIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the Year Ended December 31, 1996 ----------------- Revenues: Base rent $ 7,293,132 Recoveries from tenants 577,788 Other income 98,827 ----------- 7,969,747 ----------- Specific operating expenses (Note 2): Mortgage interest (Note 4) 1,914,230 Utilities 563,917 Janitorial and cleaning 466,366 Security 106,847 General and administrative 179,771 Repairs and maintenance 505,785 Insurance 37,906 Property taxes 497,166 Landscaping 59,255 ----------- 4,331,243 ----------- Excess of revenues over specific operating expenses $ 3,638,504 ===========
The accompanying notes are an integral part of the financial statement. F-8 CENTERPOINTE FAIRFAX, VIRGINIA NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties Centerpointe (the "Properties") is an office portfolio located in Fairfax, Virginia consisting of two office buildings and encompassing approximately 427,000 square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Properties. 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. The impact of the straight-line rent adjustment increased revenues by approximately $491,000 for the year ended December 31, 1996. 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, and amortization. Continued F-9 CENTERPOINTE FAIRFAX, VIRGINIA NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES, CONTINUED 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: Year Ending December 31, 1997 $ 5,881,000 1998 5,495,000 1999 5,256,000 2000 5,030,000 2001 5,033,000 Thereafter 29,413,000 As of December 31, 1996, one tenant occupied approximately 65% of leasable square feet and represented 61% of total 1996 base revenues. 4. Mortgage Note: The mortgage note in the amount of $30,000,000, requires interest only monthly payments of $183,000 through December 1, 1998. Beginning on January 1, 1999, the note requires monthly installments of principal and interest of $218,197. The note bears interest at 7.32% and is due on February 28, 2001. The note is collaterized by the property and assignment of leases. Principal payments due on the mortgage note during the next five years are approximately as follows: 1997 -0- 1998 -0- 1999 437,000 2000 470,000 2001 29,039,000 F-10 WESTBROOK CORPORATE CENTER WESTCHESTER, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1996 F-11 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 Westbrook Corporate Center in Westchester, Illinois (the "Properties") for the year ended December 31, 1996. This financial statement is the responsibility of the Properties' 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 Properties 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 Properties' 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 Westbrook Corporate Center in Westchester, Illinois for the year ended December 31, 1996 in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. Boston, Massachusetts March 21, 1997 F-12 WESTBROOK CORPORATE CENTER WESTCHESTER, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES For the Year Ended December 31, 1996 ----------------- Revenues: Base rent $21,029,383 Recoveries from tenants 1,805,660 Other income 135,933 -------------- 22,970,976 -------------- Specific operating expenses (Note 2): Utilities 1,351,852 Janitorial and cleaning 1,176,162 Security 219,080 General and administrative 207,959 Repairs and maintenance 1,306,547 Insurance 140,967 Property taxes 3,112,555 Landscaping 204,898 -------------- 7,720,020 -------------- Excess of revenues over specific operating expenses $15,250,956 ============== The accompanying notes are an integral part of the financial statement. F-13 WESTBROOK CORPORATE CENTER WESTCHESTER, ILLINOIS NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: ------------------------------------------------ Description of Properties Westbrook Corporate Center (the "Properties") is an office complex located in Westchester, Illinois consisting of five interconnected ten-story office towers encompassing approximately 1,102,000 square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Properties. 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. The impact of the straight-line rent adjustment decreased revenues by approximately $1,600,000 for the year ended December 31, 1996. 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. Continued F-14 WESTBROOK CORPORATE CENTER WESTCHESTER, ILLINOIS NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES, CONTINUED 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: Year Ending December 31, ------------------------ 1997 $ 23,329,000 1998 21,978,000 1999 19,607,000 2000 16,648,000 2001 9,246,000 Thereafter 13,883,000 As of December 31, 1996, one tenant occupied approximately 9% of leaseable square feet and represented 12% of total 1996 base revenues. F-15 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 December 31, 1996, is presented as if the 10880 Wilshire Boulevard, Centerpointe and Westbrook Corporate Center properties had been acquired as of December 31, 1996. Additionally, the Company's proposed, 7,000,000 share, common stock offering ($35.00 per share) and related repayment of the Credit Facility had occurred as of December 31, 1996. The pro forma Condensed Consolidated Statements of Operations for the year ended December 31, 1996 is presented as if the acquisition of the Properties acquired from January 1, 1996 to December 31, 1996 (as more fully described below), the closing of the MetLife Mortgage loan, the Company's common stock offerings from January 1, 1996 to December 31, 1996 (as more fully described below) and the Company's proposed common stock offering 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. Acquisitions included in pro forma:
Rentable Year Built/ Date of Property Name Location Sq Ft Renovated Acquisition - ----------------------------------------------------------------------------------------------------------------- 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 1997 Pending Acquisitions 10880 Wilshire Boulevard Westwood, CA 531,000 1970 Pending Centerpointe Fairfax, VA 409,000 1986-1990 Pending Westbrook Corporate Center Westchester, IL 1,106,000 1985-1996 Pending
F-16
Purchase Price (in thousands) ---------------------------------------- Property Name Seller Cash Debt O.P.Units Total - ------------------------------------------------------------------------------------------------------------------------------------ 1996 Acquisitions Perimeter Center Metropolitan Life Insurance Company 322,200 $13,800(2) 336,000 New York Life Portfolio New York Life Insurance Company 150,000 150,000 Fairfax County Portfolio Greensboro Associates, John Marshall Associates Limited Partnership and Woodland-Northridge I Limited Partnership $55,400 21,600(2) 77,000 Rosslyn Virginia Portfolio LaSalle Fund II 99,050 99,050 New England Executive Park New England Executive Park Limited Partnership et al 75,000 75,000 245 First Street Riverview Building Combined Limited Partnership 45,000 45,000 10960 Wilshire Boulevard 10960 Property Corporation 133,000 133,000 Shoreline Technology Park Teachers Insurance and Annuity Association (TIAA) 139,080 139,080 Lake Marriott Business Park Teachers Insurance and Annuity Association (TIAA) 43,920 43,920 Presidents Plaza Metropolitan Life Insurance Company 38,000 39,000(2) 77,000 1997 Pending Acquisitions 10880 Wilshire Boulevard 10880 Property Corporation 102,000 102,000 Centerpointe Joshua Realty Corporation 25,000 30,000 55,000 Westbrook Corporate Center Westbrook Corporate Center Associates, 26,100 106,000 50,000(3) 182,100 Westbrook Corporate Center IV Associates Limited Partnership and Westbrook Corporate Center V Associates Limited Partnership
(1) The Company holds approximately 52% of the common stock of a private REIT which owns this property. The total purchase price was $156 million consisting of $66 million in cash and proceeds from a $90 million first mortgage loan. The Company accounts for this investment under the equity method of accounting. (2) The Company issued Operating Partnership Units in the amount of 540,059 for Perimeter Center ($25.55 per unit), 833,820 for the Fairfax County Portfolio ($25.90 per unit) and 1,171,500 for Presidents Plaza ($33.29 per unit). These Units were valued based on the average trading price of Beacon Properties Corporation's Common Stock for the applicable period (20 to 30 days) prior to closing as prescribed in the purchase and sale agreements. (3) The Company expects to issue approximately 1,428,571 Operating Partnership Units in connection with the purchase of Westbrook Corporate Center. The number of units was estimated based on a valuation of $35.00 per unit. The actual number of units will be based on the average price of Beacon Properties Corporation's common stock for the 10 days prior to 2 days preceding the closing of this property. Common Stock Offerings included in pro forma: Price Per Gross Net Year Month Shares Share Proceeds Proceeds - ---- ----- ------ ----- -------- -------- (in thousands) 1996 March 7,036,000 26.25 184,695 173,800 1996 August 5,750,000 25.75 148,063 139,400 1996 November 13,723,000 30.75 421,982 398,900 1996 December 1,132,400 33.47 37,896 37,800 1997 April(4) 7,000,000 35.00 245,000 230,300 (4) Proposed. F-17 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET December 31, 1996 (Unaudited)
Pro Forma Adjustments ------------------------------------------------------- Beacon Properties 10880 Westbrook Proposed Corporation Wilshire Corporate 1997 Pro Forma Historical Boulevard Centerpointe Center Stock Offering Consolidated ----------- --------- ------------ --------- -------------- ------------ (dollars in thousands) ASSETS Real estate, net $1,593,995 $102,000 $55,000 $182,100 $1,933,095 Deferred financing and leasing costs, net 17,321 17,321 Cash and cash equivalents 36,086 (102,000) (25,000) (26,100) $137,014 20,000 Mortgage notes receivable 51,491 51,491 Other assets 28,366 28,366 Investments in and advance to joint ventures and corporations 52,153 52,153 ---------- -------- ------- -------- -------- ---------- Total assets $1,779,412 $ -- $30,000 $156,000 $137,014 $2,102,426 ========== ======== ======= ======== ======== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes payable $452,212 $30,000(A) $106,000(B) $588,212 Note payable, Credit Facility 153,000 $(93,286)(D) 59,714 Other liabilities 41,764 41,764 Investment in joint venture 24,735 24,735 --------- -------- ------- -------- -------- ---------- Total liabilities 671,711 30,000 106,000 (93,286) 714,425 Minority interest in Operating Partnership 108,551 50,000(C) 158,551 Stockholders' equity 999,150 230,300(E) 1,229,450 --------- -------- ------- -------- -------- ---------- Total liabilities and stockholders' equity $1,779,412 $ -- $30,000 $156,000 $137,014 $2,102,426 ========== ======== ======= ======== ======== ==========
Notes: (A) Mortgage debt due on February 28, 2002 with interest only through December 1999 at 7.32% and principal amortized over a 25 year period thereafter. This mortgage will be assumed in connection with the purchase of Centerpointe. (B) Mortgage debt is expected to have a 10 year term with interest at 8.03% and principal amortized over a 26 year period and is expected to be assumed in connection with the purchase of Westbrook Corporate Center. (C) The seller of Westbrook will be issued $50,000,000 of Operating Partnership Units expected to consist of 1,428,571 units valued at $35.00 each. The valuation is based on the average trading price of Beacon Properties Corporation common stock for the 10 days prior to 2 days preceding the closing of the property. (D) Expected repayment of Credit Facility. (E) The Company expects to sell 7,000,000 shares of common stock at $35.00 per share. Proceeds of Offering $245,000 Expenses of Offering (6.0%) (14,700) -------- $230,300 ======== F-18 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1996 (Unaudited)
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) Revenue: Rental income $147,825 $6,420(A) $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 - Construction Company: Loss from operations (2,609) Loss on sale (249) -------- ------ ------ ------- Income before minority interest 45,688 1,295 9,008 19,060 Minority interest in Operating Partnership (5,988) -------- ------ ------ ------- Net income before extraordinary items $39,700 $1,295 $9,008 $19,060 ======== ====== ====== ======= F-19 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1996 (Unaudited) December 1996 Pending Pro Forma Pro Forma Acquisitions(H) Acquisitions(I) Adjustments Consolidated --------------- --------------- ----------- ------------ (dollars in thousands except per share amounts and shares outstanding) Revenue: Rental income 26,858 40,486 $279,573 Management fees 3,005 Recoveries from tenants 6,099 2,464 33,048 Mortgage interest income 611(K) 5,581 Other income 470 1,541 17,348 ------- ------ ------- -------- Total revenue 33,427 44,491 611 338,555 ------- ------ ------- -------- Expenses: Property expenses 4,509 9,206 69,078 Real estate taxes 5,036 4,653 34,103 General and administrative 1,250 1,108 250(L) 24,830 Mortgage interest expense 10,380(J) 1,634(M) 47,162 Interest - amortization of financing costs 2,099 Depreciation and amortization 6,555(E) 10,513(E) 64,927 ------- ------ ------- -------- Total expenses 17,350 35,860 1,884 242,199 ------- ------ ------- -------- Income from operations 16,077 8,631 (1,273) 96,356 Equity in net income of joint ventures and corporation 4,989(1) ------- ------ ------- -------- Income from continuing operations 16,077 8,631 (1,273) 101,345 Discontinued operations - Construction Company: Loss from operations (2,609) Loss on sale (249) ------- ------ ------- -------- Income before minority interest 16,077 8,631 (1,273) 98,487 Minority interest in Operating Partnership (6,038)(N) (12,026) ------- ------ ------- -------- Net income before extraordinary items $16,077 $8,631 ($7,311) $86,461(2) ======= ====== ======= ======== Common shares outstanding 55,116,480 Net income per common share $1.57 (1) Includes depreciation and amortization $4,033 (2) Company share of Operating Partnership is 87.79%
See accompanying notes to pro forma condensed consolidated statement of operations. F-20 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. Rental income-historical $6,128 Pro forma straight-line rent adjustment 292 ------ Pro forma rental income $6,420 ====== (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.
Fairfax New York County Life Portfolio Portfolio Total ------------------------------------------- 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 ===========================================
(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-21 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:
Basis Life Depreciation ----- ---- ------------ 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 ====== Pending Acquisitions: ---------------------- 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 ------ $10,513 ======
(F)Fairfax County Portfolio interest expense on debt assumed for period prior to acquisition:
Principal Rate Expense --------- ---- ------- 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 ======= ======
(1) Paid off by Credit Facility proceeds at closing. F-22 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.
Rosslyn New England 10960 Virginia Executive Wilshire Portfolio Park 245 First St. Blvd. Total --------------------------------------------------------------------- Revenue: Rental income-historical $11,640 $11,766 $4,552 $9,650 $37,608 Pro forma straight-line rent adjustment 361 283 510 124 1,278 --------------------------------------------------------------------- Pro forma rental income 12,001 12,049 5,062 9,774 38,886 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 45,572 --------------------------------------------------------------------- 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 $ 4,343 $4,148 $ 3,262 $19,060 =====================================================================
(H) Results of operations of Lake Marriott Business Park, Shoreline Technology Park and Presidents Plaza for the period prior to acquisition.
Shoreline Lake Marriott Technology Business Presidents Park Park Plaza Total -------------------------------------------------------- Revenue: Rental income-historical $12,942 $3,824 $9,244 $26,010 Pro forma straight-line rent adjustment 237 611 848 -------------------------------------------------------- Pro forma rental income 12,942 4,061 9,855 26,858 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 33,427 -------------------------------------------------------- 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 ========================================================
F-23 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 for the year 1996.
10880 Westbrook Wilshire Corporate Boulevard Centerpointe Center Total ------------------------------------------------------- Revenue: Rental income-historical $8,687 $7,293 $21,029 $37,009 Pro forma straight-line rent adjustment 399 300 2,778 3,477 ------------------------------------------------------- Pro forma rental income 9,086 7,593 23,807 40,486 Management fees Recoveries from tenants 80 578 1,806 2,464 Mortgage interest income Other income 1,306 99 136 1,541 ------------------------------------------------------- Total revenue 10,472 8,270 25,749 44,491 ------------------------------------------------------- Expenses: Property expenses 3,066 1,740 4,400 9,206 Real estate taxes 1,043 497 3,113 4,653 General and administrative 720 180 208 1,108 Mortgage interest expense 1,914(J) 8,466(J) 10,380 Interest - amortization of financing costs Depreciation and amortization (E) 3,400 1,650 5,463 10,513 ------------------------------------------------------- Total expenses 8,229 5,981 21,650 35,860 ------------------------------------------------------- Income from operations $2,243 $2,289 $ 4,099 $ 8,631 =======================================================
(J) Interest expense on mortgage debt assumed: Centerpointe - historical 1996 expense. Westbrook Corporate Center - based on a principal balance of $106,000 with interest calculated at 8.03%. (K) Interest income related to the acquisition of the Rowes Wharf mortgage. (L) Additional general and administrative expense attributable to acquisitions. (M) Credit Facility Interest expense: Pro Forma Credit Facility balance $59,714 Average Credit Facility rate through December 31, 1996 7.78% ------- Pro Forma Credit Facility interest expense full year 4,646 Less historical 1996 Credit Facility interest expense 3,294 ------- Pro Forma adjustment 1,352 -------- 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 Expense 1,914 ------- 282 ------- Grand Total $1,634 ======= (N) Reflects decrease for minority interest (12.21%) in Operating Partnership. F-24 EX-23.1 2 CONSENT OF INDEPENDENT ACCOUNTANTS 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. 333-05707, 333-21787 and 333-21769) and Form S-8 (File Nos. 33-88606 and 333-19603) of our report dated March 11, 1997 on our audit of the statement of excess of revenues over specific operating expenses of 10880 Wilshire Boulevard in Westwood, California for the year ended December 31, 1996, of our report dated March 18, 1997 on our audit of the statement of excess of revenues over specific operating expenses of Centerpointe in Fairfax, Virginia for the year ended December 31, 1996, and of our report dated March 21, 1997 on our audit of the statement of excess of revenues over specific operating expenses of Westbrook Corporate Center in Westchester, Illinois for the year ended December 31, 1996, which reports are included in this Form 8-K/A-1. /s/ COOPERS & LYBRAND L.L.P. Boston, Massachusetts April 8, 1997 -----END PRIVACY-ENHANCED MESSAGE-----