-----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, A1ZnKgzMlrhcs9e9qQjU2/8jprOT8377YcjK/bGeWZfpARrPwHGw5Ae3B3d1xp95 13c0t4QMxQGYyiNfbL1eOQ== 0001012870-97-001662.txt : 19970912 0001012870-97-001662.hdr.sgml : 19970912 ACCESSION NUMBER: 0001012870-97-001662 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970829 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970829 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESSEX PROPERTY TRUST INC CENTRAL INDEX KEY: 0000920522 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 770369576 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13106 FILM NUMBER: 97672705 BUSINESS ADDRESS: STREET 1: 777 CALIFORNIA AVE CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4154943700 MAIL ADDRESS: STREET 1: 777 CALIFORNIA AVENUE CITY: PALO ALTO STATE: CA ZIP: 94304 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) : AUGUST 29, 1997 --------------- ESSEX PROPERTY TRUST, INC. -------------------------- (Exact name of registrant as specified in its charter)
MARYLAND 1-13106 77-0369576 - -------- ------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification No.)
777 CALIFORNIA AVENUE, PALO ALTO, CALIFORNIA 94304 --------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code : (650) 494-3700 -------------- Page 1 of 16 ITEM 5. OTHER EVENTS - -------------------- (Dollars in thousands) 1997 ACQUISITIONS - ----------------- On January 3, 1997, the Company acquired Wilshire Promenade, a 128 unit apartment community in Fullerton, California, for a contract price of $10,250. Wilshire Promenade Limited Partnership, a California limited partnership was the arms-length unrelated third party seller of the property. On January 28, 1997, the Company acquired Tara Village, a 168 unit apartment community in Tarzana, California, for a contract price of $10,300. KLST Partnership, a California general partnership was the arms-length unrelated third party seller of the property. On February 27, 1997, the Company acquired Foothill Gardens and Twin Creeks located in San Ramon, California, adding 176 units to the Company's portfolio. These properties were purchased for an aggregate contract price of $19,166. Dame Construction Company, Inc., a California corporation was the arms-length unrelated third party seller of the property. On June 3, 1997, the Company purchased Kings Road, a 194 unit apartment community located in Los Angeles, California, for a contract price of $12,895. Kings Road Apartments, L.P., a California limited partnership was the arms- length unrelated third party seller of the property. On June 23, 1997, the Company purchased Evergreen Heights, a 200 unit apartment community located in Kirkland, Washington, for a contract price of $15,800. In connection with this transaction the Company assumed a $9,404, 8.78% fixed interest rate loan. The loan matures in December, 2002. Lincoln Evergreen Limited Partnership, a Washington limited partnership was the arms-length third party seller of the property. On June 25, 1997, the Company acquired Villa Scandia, a 118 unit apartment community located in Ventura, California, for a contract price of $5,160. Tiger Ventura County, L.P., a Delaware limited partnership was the arms-length third party seller of the property. On June 26, 1997, the Company acquired Casa Del Mar, a 96 unit apartment community located in Pasadena, California, for a contract price of $6,075. CEI- Pasadena Partners, Ltd., a California limited partnership was the arms-length third party seller of the property. On June 30, 1997, the Company, through an 85% interest in a newly formed limited partnership, acquired The Bluffs II, a 224 unit apartment community located in San Diego, California, for a contract price of $10,660. The property secures a loan from the Company of $7,672, which may be replaced by third party financing. The balance of the purchase price was paid by the issuance of (i) 18,473 limited partnership units of Essex Portfolio L.P. (valued at $544) (ii) payment of $493 in cash by the 15% partners in the newly formed partnership and (iii) Essex's cash investment. Lincoln-Bluffs II Associates, L.P., a California limited partnership was the arms-length third party seller of the property. On July 15, 1997, the Company acquired The Village Apartments, a 122 unit apartment community, located in Oxnard, California, for a contract price of $7,720. Pacifica Village, Ltd., a California limited partnership was the arms- length third party seller of the property. On August 6, 1997, the Company acquired a majority ownership interest in an additional 193 units located adjacent to the 371 unit Camarillo Oaks property which the Company has owned since 1996. The contract price of this property was $12,000. In connection with this transaction the Company assumed $8,915 of tax exempt variable rate bonds which mature in June 2018. Jimmie H. and Judy S. Shinohara and Camarillo Investments, Inc. a California corporation was the arms- length third party seller of the property. On August 6, 1997, the Company acquired Park Place and Windsor Court Apartments, located in Los Angeles, California, adding 118 units to the Company's portfolio. These properties were purchased for an Page 2 of 16 aggregate purchase price of $11,000. Detroit Properties, Inc., a California corporation was the arms-length third party seller of the property. On August 21, 1997, the Company approved the acquisition of Huntington Breakers, a 342 unit apartment community located in Huntington Beach, California, for a contract price of $30,400. In connection with this transaction the Company will be assuming approximately $16,000 of tax exempt variable rate bonds which mature in July 2014. The anticipated acquisition date is September 30, 1997. Huntington Breakers Apartments Limited Partnership, a California limited partnership is the arms-length third party seller of the property. The acquisitions were funded with proceeds from the Company's December 1996 and March 1997 Common Stock and Convertible Preferred Stock offerings, assumed loans or bonds secured by the properties as indicated above, the Company's lines of credit and the proceeds from dispositions of two of the Company's retail centers. 1997 DISPOSITIONS - ----------------- On April 23, 1997, the Company sold Cedar Mill Place, a retail shopping center located in Portland, Oregon for a gross sales price of $1,950 resulting in a gain of approximately $454. Tandem Properties, LLC was the arms-length third party purchaser of the property. On May 15, 1997, the Company sold Wichita Towne Center, a retail shopping center located in Milwaukie, Oregon for a gross sales price of $1,617 resulting in a loss of $40. Hsu-Chin Cheng and Kou-Ping Cheng, Co-Trustees of The Cheng Family Trust was the arms-length third party purchaser of the property. All of the acquisition and disposition transactions were arms-length transactions with unrelated third parties. In each case, the purchase price was based upon a number of factors, including historical and projected rental income, appropriate capitalization rates for similar properties, market comparables, prevailing market conditions in the area and extensive due diligence studies including review of financial operations and physical inspections. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS PAGE - -------------------------------------------------------------------------- ---- (A) FINANCIAL STATEMENTS - (ATTACHMENT "A") 5 - ------------------------------------------- Combined Historical Summary of Gross Income and Direct Operating Expenses for Wilshire Promenade, Tara Village, Evergreen Heights, The Bluffs II, The Village Apartments, Camarillo Lots 7, 8 and 9 and Huntington Breakers for the Year Ended December 31, 1996. (B) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION - UNAUDITED - ---------------------------------------------------------------------- (ATTACHMENT "B") 11 - ---------------- Pro forma condensed consolidated balance sheet for Essex Property Trust as of June 30, 1997 and the related pro forma condensed consolidated statements of operations for the six months ended June 30, 1997 and the year ended December 31, 1996. (C) EXHIBITS - ------------ None Page 3 of 16 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned, hereunto duly authorized. ESSEX PROPERTY TRUST, INC. By: /s/ Mark J. Mikl ---------------------------------------------- Mark J. Mikl, Controller (Principal Accounting Officer) Date: August 29, 1997 -------------------------------------------- Page 4 of 16 ATTACHMENT "A" WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS, THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9, AND HUNTINGTON BREAKERS APARTMENTS Combined Historical Summary of Gross Income and Direct Operating Expenses December 31, 1996 (With Independent Auditors' Report Thereon) Page 5 of 16 ATTACHMENT "A" WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS, THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9, AND HUNTINGTON BREAKERS APARTMENTS Combined Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1996 CONTENTS
Page ---- Independent Auditors' Report......................................................... A-1 Combined Historical Summary of Gross Income and Direct Operating Expenses............ A-2 Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses... A-3
Page 6 of 16 INDEPENDENT AUDITORS' REPORT The Board of Directors Essex Property Trust, Inc.: We have audited the accompanying Combined Historical Summary of Gross Income and Direct Operating Expenses (the Summary) of Wilshire Promenade, Tara Village, Evergreen Heights, The Bluffs II, The Village Apartments, Camarillo Lots 7, 8, and 9, and Huntington Breakers Apartments (the Properties) for the year ended December 31, 1996. The Summary is the responsibility of management. Our responsibility is to express an opinion on the Summary based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall Summary presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying Summary was prepared to comply with the requirements of rule 3- 14 of Regulation S-X of the Securities and Exchange Commission and excludes certain expenses, described in note 1, that would not be comparable to those resulting from the proposed future operations of the property. In our opinion, the Summary referred to above presents fairly, in all material respects, the combined gross income and direct operating expenses, exclusive of expenses described in note 1, of Wilshire Promenade, Tara Village, Evergreen Heights, The Bluffs II, The Village Apartments, Camarillo Lots 7, 8, and 9, and Huntington Breakers Apartments for the year ended December 31, 1996, in conformity with generally accepted accounting principles. San Francisco, California August 15, 1997 KPMG Peat Marwick LLP Page A-1 WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS, THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9, AND HUNTINGTON BREAKERS APARTMENTS Combined Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1996
Revenue: Rental income $12,278,673 Other 441,916 ----------- 12,720,589 ----------- Operating expenses: Salaries 1,060,069 Maintenance and repairs 1,144,514 Real estate taxes 762,261 Utilities 778,672 Administrative 218,680 Advertising 153,264 Insurance 240,419 Interest 2,696,167 Other 172,197 ----------- 7,226,243 ----------- Operating income $5,494,346 ===========
Page A-2 WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS, THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9, AND HUNTINGTON BREAKERS APARTMENTS Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses Year ended December 31, 1996 (1) PROPERTIES AND ACCOUNTING PRESENTATION The Combined Historical Summary of Gross Income and Direct Operating Expenses has been prepared in accordance with Rule 3-14 of Regulation S-X of the Securities and Exchange Commission and relates to the operations of Wilshire Promenade, a 128 unit apartment community located in Fullerton, California; Tara Village, a 168 unit apartment building located in Tarzana, California; Evergreen Heights, a 200 unit apartment community located in Kirkland, Washington; The Bluffs II, a 224 unit apartment community located in San Diego, California; The Village Apartments, a 122 unit apartment community located in Oxnard, California; Camarillo Lots 7, 8, and 9, three apartment buildings comprising 193 units, located in Camarillo, California; and Huntington Breakers Apartments, a 342 unit apartment building located in Huntington Beach, California. The following represents the date each property was acquired: 1997 ----
Wilshire Promenade January 3 Tara Village January 28 Evergreen Heights June 23 The Bluffs II June 30 The Village Apartments July 15 Camarillo Lots 7, 8, and 9 August 6 Huntington Breakers Apartments approved acquisition
In accordance with Rule 3-14, direct operating expenses are presented exclusive of depreciation, management fees and income taxes as these expenses would not be comparable to the proposed future operations of the properties. Interest expense is included for Evergreen Heights, Camarillo Lots 7, 8, and 9 and Huntington Breakers as debt instruments were assumed in connection with the acquisition (or probable acquisition) of these properties. The acquisition of the properties may result in a new valuation for purposes of determining future property tax assessments. (Continued) Page A-3 WILSHIRE PROMENADE, TARA VILLAGE, EVERGREEN HEIGHTS, THE BLUFFS II, THE VILLAGE APARTMENTS, CAMARILLO LOTS 7, 8, AND 9, AND HUNTINGTON BREAKERS APARTMENTS Notes to Combined Historical Summary of Gross Income and Direct Operating Expenses Rental revenue is recognized on the accrual basis of accounting. Tenant leases are generally for a one year period or less. (2) ESTIMATED TAXABLE OPERATING RESULTS AND CASH TO BE MADE AVAILABLE BY OPERATIONS (UNAUDITED) Pro forma cash available from operations and pro forma taxable income for the twelve months ended June 30, 1997 are shown below. Pro forma taxable operating results are derived by deducting depreciation. However, in any year in which Essex Property Trust, Inc. (the Company) qualifies as a real estate investment trust (REIT) under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the Code), in general it is not subject to federal income tax on that portion of its income that it distributes to stockholders. The Company believes it qualifies under the code as a REIT. Depreciation expense was estimated considering the purchase price of each property and the appropriate income tax depreciation method.
Revenues $12,886,007 Operating expenses 7,562,855 ----------- Cash available from operations 5,323,152 Depreciation expense 1,821,188 ----------- Taxable income $ 3,501,964 ===========
Page A-4 ATTACHMENT "B" ESSEX PROPERTY TRUST, INC. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION - UNAUDITED TABLE OF CONTENTS
PAGE ---- Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1997 B-1 Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 1997 B-2 Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1996 B-3 Notes to Pro Forma Condensed Consolidated Financial Information B-4
Page 11 of 16 ESSEX PROPERTY TRUST, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997 (Unaudited) (Dollars in thousands, except shares and per share amounts)
PRO FORMA ADJUSTMENTS (2) ACQUISITION HISTORICAL PROPERTY PRO FORMA ---------- --------------- --------- ASSETS Real estate Rental properties Land and land improvements $130,657 $ 15,280 $145,937 Buildings and improvements 401,452 45,840 447,292 -------- -------- -------- 532,109 61,120 593,229 Less accumulated depreciation (52,942) 0 (52,942) -------- -------- -------- 479,167 61,120 540,287 Investments 3,022 0 3,022 -------- -------- -------- 482,189 61,120 543,309 Cash and cash equivalents 19,827 (7,814) 12,013 Notes and other receivables 18,734 0 18,734 Other assets 10,605 89 10,694 -------- -------- -------- $531,355 $ 53,395 $584,750 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Mortgage notes and bonds payable $179,932 $ 24,915 $204,847 Lines of credit 0 27,400 27,400 Accounts payable and accrued liabilities 14,216 0 14,216 Dividends payable 7,220 0 7,220 Other liabilities 3,328 0 3,328 -------- -------- -------- Total liabilities 204,696 52,315 257,011 Minority interest 26,255 1,080 27,335 STOCKHOLDERS' EQUITY 8.75% convertible preferred stock, series 1996A, $.001 par value, 1,600,000 authorized, 800,000 issued and outstanding 1 0 1 Common stock, $.0001 par value, 668,400,000 shares authorized, 8,805,500 shares issued and outstanding 1 0 1 Additional paid in capital 334,483 0 334,483 Accumlulated deficit (34,081) 0 (34,081) -------- -------- -------- 300,404 0 300,404 -------- -------- -------- $531,355 $ 53,395 $584,750 ======== ======== ========
See accompanying notes to pro forma condensed consolidated financial information Page B-1 ESSEX PROPERTY TRUST, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (Unaudited) (Dollars in thousands, except shares and per share amounts)
PRO FORMA ADJUSTMENTS(3) ---------------------------------------- ACQUISITION DISPOSITION HISTORICAL PROPERITIES PROPERITIES PRO FORMA -------------------------------------------------------------------------- REVENUES Rental $ 35,709 $ 7,772 $ 225 $ 43,256 Interest and other income 2,422 69 0 2,491 ----------- ---------- -------- -------- 38,131 7,841 225 45,747 EXPENSES Property operating expenses Maintenance and repairs 3,087 789 38 3,838 Real estate taxes 2,902 661 16 3,547 Utilities 2,280 603 22 2,861 Administrative 2,352 550 0 2,902 Advertising 552 78 0 630 Insurance 464 121 2 583 Depreciation and amortization 6,308 1,479 0 7,787 ----------- ---------- -------- -------- 17,945 4,281 78 22,148 Interest 6,230 2,001 0 8,231 Amortization of deferred financing 255 9 0 264 cost General and administrative 1,051 0 0 1,051 Loss from hedge termination 0 0 0 0 ----------- ---------- -------- -------- Total expenses 25,481 6,291 78 31,694 ----------- ---------- -------- -------- Income before gain on sales of real estate, minority interest and extraordinary item 12,650 1,550 147 14,053 Gain on sales of real estate 414 0 414 0 ----------- ---------- -------- -------- Income before minority interest and extraordinary item 13,064 1,550 561 14,053 Minority interest (1,838) (257) (18) (2,077) ----------- ---------- -------- -------- Income before extraordinary item 11,226 1,293 543 11,976 Extraordinary item (104) 0 0 (104) ----------- ---------- -------- -------- Net income $ 11,122 $ 1,293 $ 543 $ 11,872 =========== ========== ======== ========== PER SHARE DATA Net income per share from operations before extraordinary item $ 0.81 $ 0.87 Extraordinary item - debt extinguishment (0.01) (0.01) ----------- -------- Net income per share $ 0.80 $ 0.86 =========== ========== Weighted average number of shares outstanding during the period 12,764,917 13,774,154 =========== ========== SUPPLEMENTAL INFORMATION - FUNDS FROM OPERATIONS Income before minority interest $ 12,960 $ 1,550 $ 561 $ 13,949 Adjustments Depreciation and amortization 6,308 1,479 0 7,787 Adjustment for unconsolidated joint ventures 448 0 0 448 Non-recurring items, including gain on sales of real estate and loss from hedge termination and extraordinary item (310) 0 (414) 104 Minority interest (280) 0 0 (280) ----------- ---------- -------- -------- Funds from operations $ 19,126 $ 3,029 $ 147 $ 22,008 =========== ========== ======== ======== See accompanying notes to pro forma condensed consolidated financial information Page B-2
ESSEX PROPERTY TRUST, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (Unaudited) (Dollars in thousands, except shares and per share amounts)
PRO FORMA ADJUSTMENTS(3) ---------------------------------------- ACQUISITION DISPOSITION HISTORICAL PROPERITIES PROPERITIES PRO FORMA ------------------------------------------------------------------------- REVENUES Rental $ 47,780 $ 19,980 $ 578 $ 67,182 Interest and other income 2,913 386 0 3,299 ------------ ----------- ---------- ---------- 50,693 20,366 578 70,481 EXPENSES Property operating expenses Maintenance and repairs 4,341 1,979 90 6,230 Real estate taxes 3,790 1,733 46 5,477 Utilities 3,175 1,502 47 4,630 Administrative 2,911 1,397 (0) 4,308 Advertising 653 236 0 889 Insurance 635 355 8 982 Depreciation and amortization 8,855 3,684 91 12,448 ------------ ----------- ---------- ---------- 24,360 10,886 282 34,964 Interest 11,442 4,032 0 15,474 Amortization of deferred financing costs 639 17 0 656 General and administrative 1,717 0 0 1,717 Loss from hedge termination 42 0 0 42 ------------ ----------- ---------- ---------- Total expenses 38,200 14,935 282 52,853 ------------ ----------- ---------- ---------- Income before gain on sales of real estate, minority interest and extraordinary item 12,493 5,431 296 17,628 Gain on sales of real estate 2,477 0 0 2,477 ------------ ----------- ---------- ---------- Income before minority interest and extraordinary item 14,970 5,431 296 20,105 Minority interest (2,648) (1,038) (41) (3,645) ------------ ----------- ---------- ---------- Income before extraordinary item 12,322 4,393 255 16,460 Extraordinary item (3,441) 0 0 (3,441) ------------ ----------- ---------- ---------- Net income $ 8,881 $ 4,393 $ 255 $ 13,019 ============ =========== ========== ========== PER SHARE DATA Net income per share from operations before extraordinary item $ 1.50 $ 1.69 Extraordinary item - debt extinguishment (0.38) (0.30) ------------ ---------- Net income per share $ 1.12 $ 1.39 ============ ========== Weighted average number of shares outstanding during the period 7,347,527 9,366,000 ============ ========== SUPPLEMENTAL INFORMATION - FUNDS FROM OPERATIONS Income before minority interest $ 11,529 $ 5,431 $ 296 $ 16,664 Adjustments Depreciation and amortization 8,855 3,684 91 12,448 Adjustment for unconsolidated joint ventures 508 0 0 508 Non-recurring items, including gain on sales of real estate and loss from hedge termination and extraordinary item 1,006 0 0 1,006 Minority interest (560) 0 0 (560) ------------ ----------- ---------- ---------- Funds from operations $ 21,338 $ 9,115 $ 387 $ 30,066 ============ =========== ========== ========== See accompanying notes to pro forma condensed consolidated financial information Page B-3
ESSEX PROPERTY TRUST, INC. NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION JUNE 30, 1997 AND DECEMBER 31, 1996 (Unaudited) (Dollars in thousands, except shares and per share amounts) (1) - OVERVIEW - -------------- Between January 1, 1997 and August 25,1997, Essex directly acquired thirteen multifamily properties at an aggregate contract price of $121,026. In addition, Essex currently has a multifamily property which would be considered a probable acquisition at a contract price of $30,400. During this period, the Company disposed of two retail properties for proceeds of $3,567. Greater details regarding these property transactions are included in Item 5 of this form 8-K filing. On March 31, 1997, Essex completed the sale of 2,000,000 shares of its Common Stock to Cohen & Steers at a price of $29.125 per share. Net proceeds from the sale were $58,125. On June 20, 1997, Essex completed the second phase of the Tiger/Westbrook transaction with the sale of an additional $20,000 of its Convertible Preferred Stock, to Tiger/Westbrook. Gross proceeds from the sale were $20,000. The following unaudited pro forma condensed consolidated balance sheet as of December 31, 1996 and pro forma condensed consolidated statements of operations for the six months ended June 30, 1997 and the year ended December 31, 1996, are presented as if the property and equity transactions stated above occurred on January 1, 1996. (2) - PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS - ---------------------------------------------------------------- The pro forma condensed consolidated balance sheet as of June 30, 1997 includes nine acquisitions with an aggregate cost of $90,306 in the historical column and pro forma adjustments for four property acquisitions and one probable acquisition all subsequent to June 30, 1997 with an aggregate cost of $61,120. Real estate investments were increased by $151,426 based on the contracted acquisition prices. It is assumed that 75% of the increase in real estate investment will be allocated to buildings and improvements for purposes of depreciation. The detail of the increase in real estate investment based on properties acquisition since July 1, 1997 is as follows:
The Village $ 7,720 Camarillo Oaks additional 193 units $12,000 Park Place / Windsor Court (2 properties) $11,000 Huntington Breakers (probable acquisition) $30,400
The Village Apartments acquisition was funded with proceeds from the 1997 equity transactions. The additional 193 units at Camarillo Oaks acquisition was funded with approximately $8,915 of assumed tax exempt variable rate bonds and the balance with the Company's lines of credit. The Park Place / Windsor Court acquisition was funded with the Company's lines of credit. The Huntington Breakers is anticipated to be funded with approximately $16,000 of assumed tax exempt variable rate bonds and the balance with the Company's lines of credits. Page B-4 ESSEX PROPERTY TRUST, INC. NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION JUNE 30, 1997 AND DECEMBER 31, 1996 (Unaudited) (Dollars in thousands, except shares and per share amounts) (3) - PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ADJUSTMENTS - ---------------------------------------------------------------------------- The pro forma condensed consolidated statements of operations for the six months ended June 30, 1997 and year ended December 31, 1996 include the following pro forma adjustments: For Wilshire Promenade, acquired on January 3, 1997, pro forma adjustment was made by annualizing the six months of actual operating income through June 30, 1997 for inclusion in the six months ended June 30, 1997 and the twelve months ended December 31, 1996. For Tara Village, acquired on January 28, 1997, pro forma adjustment was made by annualizing the five months of actual operating income through June 30, 1997 for inclusion in the six months ended June 30, 1997 and the twelve months ended December 31, 1996. For Foothill Gardens and Twin Creeks, acquired on February 27, 1997, pro forma adjustment was made by annualizing the four months actual operating income through June 30, 1997 for inclusion in the six months ended June 30, 1997 and the twelve months ended December 31, 1996. For Cedar Mill and Wichita Towne Center shopping centers, the pro forma adjustment reflects the elimination of the actual results of operations. For Kings Road, Casa Del Mar, Evergreen Heights, Villa Scandia, The Bluffs II, The Village Apartments, additional 193 units at Camarillo Oaks, Park Place, Windsor Court and Huntington Breakers, pro forma adjustments incorporated into the six months ended June 30, 1997 or the twelve months ended December 31, 1996 is based on the respective properties semi-annualized or annualized internal operating budgets. Page B-5 -----END PRIVACY-ENHANCED MESSAGE-----