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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
(Mark One)
  (X)     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                    For the fiscal year ended July 31, 19941995
                                       OR
  ( )        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                           Commission File No. 0-5303


                              BRE PROPERTIES, INC.
- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              Delaware                                     94-1722214
- - --------------------------------------    -----------------------------------------------------------------------------        -------------------------------
   (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER IDENTIFICATION
    NUMBER)
   INCORPORATION OR ORGANIZATION)               NUMBER)

     One Montgomery Street
     Telesis Tower, Suite 2500
     San Francisco, California                               9410494104-5525
- - --------------------------------------    -----------------------------------------------------------------------------          -----------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)

                                 (415) 445-6530
- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

           Securities registered pursuant to Section 12(b) of the Act:


Title of each class                    Name of each exchange on which registered
-TITLE OF EACH CLASS                   NAME OF EACH EXCHANGE ON WHICH REGISTERED
- -------------------                   -----------------------------------------
Class A common stock, $.01 par value                    New York Stock Exchange

Common Stock Purchase Rights                            New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                    Yes   X  .               No        .
                         -----                    -----
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K (SECTION(Section 229.405 OF THIS CHAPTER) IS NOT CONTAINED HEREIN, AND
WILL NOT BE CONTAINED, TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE
PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [   ]

At September 8, 1994,5, 1995, the aggregate market value of the registrant's shares of
Class A common stock, $.01 par value, held by nonaffiliates of the registrant
was approximately $336,396,000.$346,976,000. At that date 10,925,48310,970,865 shares were outstanding.



DOCUMENTS INCORPORATED BY REFERENCE

PortionsExcerpts of the BRE Properties, Inc. Annual Report to Shareholders for the year
ended July 31, 19941995 (the "Annual Report")(Exhibit 13.1 hereto) are incorporated
by reference into Parts I and II of this report.

With the exception of those portions
incorporated by reference, the 1994 Annual Report is not deemed to be filed as
part of this report.

Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders of BRE Properties, Inc. to be held on November 22, 1994filed within 120 days after the end
of registrant's fiscal year ended July 31, 1995 (the "Proxy Statement")Statement) are
incorporated by reference into Part III of this report.


                                       -2-


- -------------------------------------------------------------------------------
                                     PART I
- -------------------------------------------------------------------------------

ITEM 1.   BUSINESS
- ------------------

CORPORATE PROFILE


BRE Properties, Inc. ("BRE" or the "company"), a Delaware corporation, is a
self-administered equity real estate investment trust which primarily owns and
operates apartment communities in the western United States. At July 31, 1995,
BRE had ownership interests in 8,554 garden apartment units (5,235 wholly owned
and 3,319 on land leased to others) in California, Arizona, Washington and
Oregon. On that date, BRE also held ownership interests in four shopping
centers (including two held in partnerships in which the company is a limited
partner) and 11 other properties. Founded in 1970, the company has paid 100
consecutive quarterly dividends to shareholders since it commenced operations.

STRATEGIC FOCUS

The key aspects of the company's strategy include a focus on the acquisition of
multifamily properties; an accelerated, but orderly, disposition of industrial
properties; increased access to the capital markets for financing; and
the proposed internalization of property management. See "Property
Acquisitions and Dispositions", "Capital Resources" and "Employees".

STRUCTURE AND INVESTMENT POLICY

BRE has operated since its July 1970 inception as a real estate investment trust
pursuant to Sections 856-860 of the Internal Revenue Code, as amended.  Its
long-range investment policy emphasizes the purchase of fee ownership of both
the land and the improvements, primarily in garden apartment communities and
secondarily in shopping centers, located in the
Western United States. Among other things, this policy is designed to enable
management to monitor developments in local real estate markets and to take an
active role in managing the company's properties and improving their
performance. The policy is subject to ongoing review by the Board of Directors
and may be modified in the future to take into account changes in business or
economic conditions, as circumstances otherwise warrant, if it determines that
such changes are in the best interests of the company and its shareholders.

                                       At July 31, 1994, the company's portfolio of income-producing real estate
(including wholly owned properties, land owned and leased to others and limited
partnership investments in two shopping centers) consisted of 34 properties,
including 17 apartment communities, 4 shopping centers and 13 other
income-producing properties.  Of these properties, 26 are located in California,
4 in Washington, 3 in Arizona and one in Oregon.  See Items 2 and 7 of this
report for a description of the company's individual investments and of certain
developments during the year with respect to these investments.

The company's current investment profile is different from that of its early
years of operations.  Initially, the company was investing in both equities and
mortgage loans on a variety of property types in markets across the country.
Gradually, the company disposed of investments outside of the Western United
States.  The company has also shifted its overall investment focus to ownership
of properties, with an emphasis on apartments.  The transition in investment
focus has constrained the company's growth in funds from operations and
dividends because initial yields on newly purchased equity investments typically
have been below those of maturing mortgages.  It has also had an impact on
investment liquidity, since maturing mortgage loans provide cash which is
immediately available for reinvestment in equity properties.  Beyond this
impact, however, management believes there will be significant benefits for
shareholders in the long-term, including improved prospects for growth in funds
from operations and portfolio appreciation.-3-


REVENUES AND OCCUPANCY

The following table shows the percentage of the company's total rental and
partnership revenues contributed by certain classes of properties during the
last three fiscal years and the overall occupancy levels for these classes of
properties at July 31, 1994.  During these years,1995.

PERCENT OF REVENUES ------------------- Overall Occupancy Type of Property 1995 1994 1993 at July 31, 1995 - ---------------- ---- ---- ---- ----------------- Apartments 77% 71% 63% 95% Shopping centers 15 16 20 96 Other 8 13 17 54 --- --- --- -- 100% 100% 100% 90% --- --- --- -- --- --- --- --
The Hub Shopping Centerweighted average occupancy is calculated by multiplying the occupancy for each property by its square footage and dividing by the total square footage in Fremont, California, accounted for approximately 12% (1994), 14% (1993), and 17% (1992) ofthe portfolio. The following properties contributed 10% or more to the company's total rental and partnership revenues during the Westlake Village Apartments in Daly City, California, accounted for approximately 10% (1994), 12% (1993), and 13% (1992), and Sharon Green Apartments in Menlo Park, California, accounted for approximately 10% (1994), 11% (1993), and 12% (1992). -3- Percent of Revenues -------------------last three fiscal years:
Overall Occupancy Type of PropertyPERCENT OF REVENUES ------------------- 1995 1994 1993 1992 at July 31, 1994 ---------------- ---- ---- ---- ---------------- The Hub Shopping Center 11% 12% 14% Westlake Village Apartments 9 10 12 Sharon Green Apartments 8 10 11 -- -- -- 28% 32% 37% -- -- -- -- -- --
PORTFOLIO AT JULY 31, 1995 At July 31, 1995, the company's portfolio of income-producing real estate included, as a percent of cost, the following investments:
PERCENT PERCENT ------- ------- NUMBER OF NUMBER OF PROPERTIES COST PROPERTIES COST --------------------- ---------------------- Apartment Buildings 71 % 63 % 58 % 95 % Apartments 24 68% California 25 65% Shopping Centers 16 20 23 92centers 4 15 Arizona 10 19 Other 1311 17 19 54Washington 3 12 Oregon 1 4 --- --- --- --- 100 % 100 % 100 % 88 %TOTAL: 39 100% TOTAL: 39 100% --- --- --- --- --- --- --- ---
See Items 2 and 7 of this report for a description of the company's individual investments and of certain developments during the year with respect to these investments. -4- PROPERTY ACQUISITIONS AND DISPOSITIONS ACQUISITIONS - ------------ During fiscal 1995, the company purchased the following garden apartment communities, all located in Tucson, Arizona: (DOLLAR AMOUNTS IN THOUSANDS)
PRINCIPAL AMOUNT NUMBER OF MORTGAGES INTEREST NAME OF UNITS COST CASH ASSUMED RATE - ----------------------- --------- ------ ------- ------------ -------- Camino Seco Village 168 $6,695 $ - (1) $4,238 8.00% Casas Lindas 144 7,564 7,564 - - Colonia del Rio 176 8,868 3,558 5,310 8.00 Fountain Plaza 197 4,535 1,384 3,151 7.50 Hacienda del Rio 248 9,296 248 (1) 5,645 6.45 Oracle Village 144 6,046 1,826 4,220 7.80 SpringHill 224 8,666 3,291 5,375 8.00 ------ -------- ------- ------- TOTAL 1,301 $51,670 $17,871 $27,939 ------ -------- ------- ------- ------ -------- ------- -------
(1) The cash investments in Camino Seco Village and Hacienda del Rio do not include $2,457 and $3,403 respectively, in proceeds from tax- deferred exchanges for 515 Ellis, in Mountain View, California, and Marymoor Warehouse, in Redmond, Washington. Since their acquisition, an additional $131,000 has been invested in these properties. The mortgages on Fountain Plaza and Hacienda del Rio are fully amortizing, with final maturities in 2028. The four other mortgages assumed mature in the fiscal years 2000 and 2001, with aggregate balloon payments of $17,932,000 due at those times. Depending on market conditions at maturity, the company may choose, among other things, to renegotiate the terms with the existing lenders, refinance the properties with other lenders, sell assets or repay the balloon amounts through a public offering or private placement of debt or equity securities. Concurrent with the purchase of these apartment communities, BRE also funded two mortgage loans (one in November 1994 and the other in July 1995), each for $1,500,000, aggregating $3,000,000, to entities affiliated with the seller. Each loan bears interest at 10% for one year. One loan is secured by a second mortgage on a 254-unit apartment project in Tucson. The second loan is secured by a first mortgage on two parcels of undeveloped land in Tucson, plus a personal guarantee from the principals of the borrower. Providing that no event of default has occurred, the borrowers on each loan may request a one-year extension, during which time the interest rate rises to 11%, and a second one- year extension, during which time the interest rate rises to 12%. -5- During the year ended July 31, 1995, construction was completed of a 116-unit expansion of the tenant at200-unit Scottsdale Cove Apartments in Scottsdale, Arizona, bringing the 358,000 square foot warehouse/ distribution facility in Pomona, California discontinued business and vacatedtotal number of units to 316. The total cost of the premises. BRE pursued legal remedies and collected all rents due onexpansion was $6,139,000, $1,688,000 of which was invested during the lease throughyear ended July 1994, plus31, 1995. DISPOSITIONS - ------------ As the costscompany has increased its ownership of correcting deferred maintenance, and an adjusted allowance for rent due after July 1994. A rehabilitation programapartment communities during the past several years, it has been completed, including a new roof, exterior painting and interior work, and the property is now being marketed to prospective tenants. Twogradually reduced its portfolio of light industrial buildings are currently vacant:and office properties. BRE sold two such properties during fiscal 1995, Marymoor Warehouse, located in Redmond, Washington, and 515 Ellis, located in Mountain View, California, recording gross gains on sales of $1,389,000 and $1,244,000, respectively. Both of these transactions were structured as tax-deferred exchanges, with the sales proceeds of $5,860,000 reinvested in the Hacienda del Rio and Camino Seco Village Apartments, respectively. One light industrial property, Irvine Spectrum (50,000 square feet in Irvine, California), has been vacant since June 1994, and 515 Ellis (29,0001994. Negotiations are underway to sell this property during fiscal 1996, although no assurance can be given that the sale will be consummated. In September 1995, the company completed the sale of Pomona Warehouse (358,000 square feet in Mountain View,Pomona, California) haswhich had been vacant since JuneDecember 1993. A lease has been signedThe proceeds were used for a tax-deferred exchange into the Mountain View building. One previous vacancy was eliminated during the year with the signing of a six-year lease240-unit apartment community Newport Landing Phase I, purchased for the entire 64,000 square foot Fremont 3 Building$9,235,000, in Fremont, California. Another tenant leased, for five years, 66% of the 86,000 square foot 525 Almanor Building in Sunnyvale, California. New leases or lease extensions were also reached with tenants at sixPhoenix, Arizona. There are nine other light industrial buildings. Of the company's nine fully occupied light-industrial, warehouse/distribution and office properties, three have multiple tenants, each with one tenant occupying more than 50%totaling 520,000 square feet, in the portfolio. Going forward, BRE intends to continue the orderly disposition process of these properties and redeploy the net rental space, and six have single tenants.proceeds to acquire additional multifamily properties. CAPITAL RESOURCES The company's investments in income-producing properties may be made subject to mortgage financing or to other indebtedness secured by a prior lien against the property.financing. At present, eightJuly 31, 1995, fourteen of the company's wholly owned properties arewere subject to mortgage financing.financing, compared to eight such properties at July 31, 1994 and six at July 31, 1993. In addition, BRE is a limited partner in two partnerships that are subject to mortgage financing arranged by the general partner. The company and the general partner may refinance existing indebtedness if more favorable financing is available, and they may also incur new indebtedness, or increase the amount of existing indebtedness, secured through mortgage financing. The extent to which the company and the general partner may mortgage or otherwise finance investments depends upon such factors as the nature of the investment, the cost and availability of borrowed funds and the general economic climate. The company has obtained funds from a variety of sources, including non-recourse mortgage loans and the sale of equity. In fiscal 1993, the company raised approximately $55 million through a public offering of 1,500,000 shares of common stock and approximately $36,442,000 in new funds through mortgage financing on equity investments. In fiscal 1994, approximately $19,718,000 in new funds was raised through such mortgage financing. -4-In fiscal 1995, BRE -6- assumed $27,939,000 of mortgage debt on six newly acquired apartment properties in Tucson, Arizona. To further increase its access to capital markets, the company plans to seek shareholder authorization of a new class of preferred stock. In addition, since its inception, the company has had unsecured lines of credit from one or more commercial banks. These credit lines have had a one-year term and were available for short-term working capital needs,Currently, there are two such as financing new tenant improvements at existing properties. Theunsecured lines of credit, totaled $10,000,000 at July 31, 1993. During the quarter ended January 31, 1994, the company negotiated increases in theeach with a two-year term. The two credit lines of credit tototal $30,000,000 lengthened the term to two years and reached agreement with the banks that the proceeds could be usedare available to make real estate equity investments.investments and to provide working capital. There were no borrowings outstanding under these lines of credit during the fiscal year ended July 31, 1994.1995. The company pays annual commitment fees totaling $127,500 annually for thethese lines of credit, and borrowingcredit. Borrowing costs are based on BRE's choice of a spread over the interbank offered rate or the prime rate. The company is currently negotiating an increase in the size of its lines of credit and an extension of their two-year maturities. The company may continue to borrow from time to time to fund commitments, although there is no assurance at any given time that borrowed funds will be available or that the terms and conditions of such borrowings will be acceptable. For additional information regarding the company's long-term debt, see Note D inof Notes to the Financial Statements included in the 19941995 Annual Report, incorporated herein by reference. The growth and profitable operation of the company depend in large part upon the availability and cost of borrowed funds, as discussed above. In addition, the success of the company depends, among other factors, upon general business and economic conditions, construction costs, income-taxincome tax laws, increases or decreases in operating expenses, governmental regulations, population trends, zoning laws, legislation and the ability of the company to keep its properties leased at profitable levels. The company's properties compete for tenants primarily on the basis of location, rent charged, services provided, and the design and condition of improvements; and its properties encounter competition from similar properties located in their market areas. In many of these market areas, there is an oversupply of available space and competition for tenants has been, and continues to be, intense. In addition, vacancy and rental rates at certain of the company's properties have been adversely affected by the downturn in the national economy. A prolonged economic downturn could have a material adverse effect on the company's operations and financial condition. PROPERTY ACQUISITIONS During fiscal 1994, the company purchased the following garden apartment communities: MIRA MESA (Cimmaron, Hacienda and Westpark), September 1993 and WINCHESTER, March 1994: These properties include 616 units in four adjacent apartment communities in San Diego, California, as follows: -5--7-
Name Constructed Units Number of buildings Acres of Land - - ---- ----------- ----- ------------------- --------------- MIRA MESA Cimmaron 1986 184 23-eightplex 5.60 Hacienda 1985 192 24-eightplex 5.75 Westpark 1985 96 12-eightplex 3.00 WINCHESTER 1987 144 18-eightplex 5.23 --- Total 616 --- ---
The Mira Mesa and Winchester communities contain a mix of one- and two-bedroom units with monthly asking rents of $595-$725. All units have frost-free refrigerators, gas ranges and water heaters, central thermostat controlled forced air gas heating, wall unit air-conditioning in the living rooms, patios or decks with storage and cable television. Recreational facilities include outdoor heated swimming pools and spas. Central laundry rooms are provided for residents. The properties have been mapped for condominiums, although there are no present plans to pursue any condominium conversions. The purchase price for Mira Mesa was $24,371,000 in cash. In February 1994, the company obtained a first mortgage loan secured by Mira Mesa in the amount of $13,600,000. The interest rate is 7%, with an 11-year maturity and amortization based on 25 years. Winchester was purchased in March 1994 for $7,400,000 in cash. TERRA NOVA VILLAS, March 1994 - Located in Chula Vista, California, seven miles south of downtown San Diego, the Terra Nova Villas apartment community was purchased for $14,575,000, subject to $9,240,000 of fixed-rate (5.57%) bond financing. The bond financing matures in March 1995. Depending on market conditions at that time, BRE may repay the bonds in cash, renegotiate the terms of the bonds or refinance the property with another lender. Terra Nova Villas was constructed in 1985 and consists of 18 two-story buildings on 12.8 acres of land with monthly asking rents of $680-$815. All units have frost-free refrigerators, self-cleaning ovens, central air conditioning and heating, patios or decks and cable television hook-ups. Buildings have central gas water heaters. A separate clubhouse building contains leasing offices, a lounge and exercise room. The property offers a pool, spa, play area and two laundry rooms. In addition to these properties, which are complete and income-producing, in October 1993, BRE purchased seven acres of undeveloped land adjacent to the Scottsdale Cove Apartments in Scottsdale, Arizona, on which 116 units are currently being constructed. This addition will expand the total units in the Scottsdale Cove to 316. The estimated total cost is $6,165,000, of which $4,451,000 had been disbursed through July 31, 1994, including $143,000 of capitalized interest expense. A total of 32 units have been completed, of which 11 were occupied at July 31, 1994. All units are expected to be completed by October 1994. -6- PROPERTY DISPOSITIONS Two separate sales were completed in the 1994 fiscal year: The James Center Office Building in Bellevue, Washington, and Eastside Industrial Park in Redmond, Washington. A modest gain was recognized on the sale of these properties. The sales prices aggregated $9,800,000, and the cash proceeds are now available to be invested in other properties. EMPLOYEES As of July 31, 1994,1995, the company had 1921 employees. The company also has engaged 89 independent property management firms to manage 1726 of its apartment and multi-tenantmulti- tenant commercial properties. On June 5, 1995 , Arthur G. von Thaden, formerly president and chief executive officer, became Chairman. Frank C. McDowell was named president and chief executive officer. See "Executive Officers of the Registrant" of this report for information regarding Mr. McDowell's experience. To achieve the company's goal of becoming a fully integrated real estate operating company, it intends to take steps to internalize the property management function during fiscal 1996. These steps may include the creation of an internal property management organization staffed by existing and newly hired employees, on the acquisition of a multifamily portfolio accompanied by existing property management capabilities. Currently, BRE's asset management staff directs the operations of the properties, employing third parties to carry out day-to-day property management activities. EXECUTIVE OFFICERS OF THE REGISTRANT - ------------------------------------ The following persons were executive officers of the company as of September 1, 1995:
Age at Name September 1, 1995 Position(s) - --------------------------------------------------------------------------------------------- Frank C. McDowell 47 President, Chief Executive Officer and Director Arthur G. von Thaden 63 Chairman and Director Byron M. Fox 56 Executive Vice President Ronald P. Wargo 51 Senior Vice President Howard E. Mason, Jr. 62 Senior Vice President, Finance Ellen G. Breslauer 47 Secretary and Treasurer - ---------------------------------------------------------------------------------------------
Mr. McDowell was appointed to his current position on June 5, 1995, at which time Mr. von Thaden, who had been President and Chief Executive Officer, became chairman. Mr. Fox and Mr. Wargo were appointed to their positions in October of 1992. All of the other executive officers have held their respective positions since September 30, 1987. Set forth below is information regarding the business experience of each of the executive officers: From 1992 to 1995, Mr. McDowell was Chief Executive Officer and Chairman of Cardinal Realty Services, Inc. ("Cardinal"), a Columbus, Ohio-based apartment management company and owner of multifamily housing. At December 31, 1994, Cardinal ranked as the nation's 19th largest owner of apartments and as the 15th largest apartment management company. From 1988 to 1992, Mr. McDowell was Senior Vice President, -8- Head of Real Estate of First Interstate Bank of Texas. Mr. McDowell holds a Bachelor of Science Degree and a Masters of Business Administration Degree, both from the University of Texas, Austin. Mr. von Thaden served as Chief Executive Officer of the company and its former advisor from inception in 1970. Mr. von Thaden became a Director in 1981. Mr. von Thaden holds a Bachelor of Arts Degree from Trinity College. Mr. Fox was employed by BRE and appointed Senior Vice President in December 1987. From 1977 to 1987, he was Vice President and General Manager of Dillingham Investment Corporation, a Hawaii land-investment firm. Mr. Fox holds a Bachelor of Arts Degree from Colgate University and a Master of Business Administration Degree from Harvard Business School. Mr. Wargo, employed in 1978, was appointed Senior Vice President in charge of Asset Management in 1992. He holds the Certified Property Manager (CPM) designation awarded by the Institute of Real Estate Management. Mr. Wargo holds a Bachelor of Science Degree from LaSalle College and a Master of Business Administration Degree from Columbia University. Mr. Mason was Senior Vice President, Finance from October 1980, and has been chief financial and accounting officer from inception in 1970. He is a Certified Public Accountant and served as Controller for Henry Doelger Builder, Inc. from 1965 to 1970. Mr. Mason holds a Bachelor of Arts Degree from Menlo College and a Master of Business Administration Degree from San Francisco State University. Ms. Breslauer was appointed Secretary in September 1987 after becoming Treasurer in 1981. She was employed by the company in 1971 and is a Certified Public Accountant. A Phi Beta Kappa graduate, Ms. Breslauer holds a Bachelor of Arts Degree and a Master of Business Administration from the University of California, Berkeley. There is no family relationship among any of the company's executive officers or Directors. POTENTIAL ENVIRONMENTAL RISKS Investments in real property create a potential for environmental liability on the part of the owner of, or any mortgage lender on, such real property. If hazardous substances are discovered on or emanating from any of the company's properties, the owner or operator of the property (including the company) may be held strictly liable for all costs and liabilities relating to such hazardous substances. The company's current policy is to obtain a Phase I environmental study on each property it seeks to acquire and to proceed accordingly. The company currently carries no insurance for environmental liabilities, although policies in effect in earlier years may in some cases provide coverage for environmental liabilities which may have occurred during the earlier policy periods. 515 ELLIS STREET-9- RECENT DEVELOPMENT On October 11, 1995, BRE entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among BRE, Real Estate Investment Trust of California ("REIT-Cal") and a newly-formed Maryland subsidiary of REIT-Cal ("REIT-Cal Sub"). The companyMerger Agreement, which has conducted an investigationbeen approved by the Board of possible hazardous materials contaminationDirectors and Boards of Trustees of each of the soilparties, would result in the acquisition of REIT-Cal by BRE through (i) a merger of REIT-Cal with and groundwater at its light industrial property at 515 Ellis Street, Mountain View, Californiainto REIT-Cal Sub followed by (ii) a merger of REIT-Cal Sub with and into BRE (the "Ellis Street Property""Merger"). This investigation was conducted in connection with an inquiry by the Environmental Protection Agency ("EPA") into groundwater contamination found at certain third-party sites (the "MEW Sites") now listed on the National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"). Based on data made available to the company, management believes that the hazardous materials contamination emanating from the MEW Sites has resulted in contaminationFollowing consummation of the groundwater underlyingMerger, it is contemplated that BRE would change its Ellis Street Property. Although the Ellis Street Property is not a MEW Site, the company, along with several other entities, has been named as a Potentially Responsible Party for remedial costs with respectstate of corporate domicile from Delaware to the MEW Sites in order to permit the EPA to determine whether the company might have any liability for contributing to the MEW Sites contamination. The company's investigation did not reveal significant soil contamination at the Ellis Street Property due to on-site hazardous materials handling practices. However, if the Ellis Street Property is found to have contributed to the contamination emanating from the MEW Sites, the company could be jointly and severally responsible for remedial costs. -7- At the date of this Annual Report on Form 10-K, certain entities have entered into a consent decree with the EPA for remediation of the contamination emanating from the MEW Sites, and certain other entities have been ordered by the EPA to participate in the remediation. The remediation includes a regional groundwater extraction and treatment system which is expected to be installed and maintained by these parties. The company is not included in either the consent decree or order to participate in the remediation, and neither the EPA or any other party has requested that the company contribute to the MEW Sites cleanup. Although the ultimate outcome of environmental matters is subject to uncertainties and no assurances can be given, based on its investigation conducted to date, management does not believe that the contamination arising from the MEW Sites will have a material adverse effect on the company's financial condition and results of operations. The cost of the land and improvements at the Ellis Street property, at July 31, 1994, was $1,049,000, before deduction of accumulated depreciation. MARYMOOR WAREHOUSE The company has also conducted an investigation of possible contamination due to on-site handling practices at its Marymoor warehouse property located in Redmond, Washington. The investigation has shown the existence of petroleum hydrocarbon contamination in the soil at the property. As a result, the tenant at the property has conducted certain excavation and remediation activities. Additional testing is presently being conducted to confirm no further remediation is required. The company estimates the costs of this additional testing to be in the range of $10,000; however, if further remediation is required, the costs would be greater, perhaps substantially. The cost of the Marymoor land and improvements, at July 31, 1994, was $2,358,000, before deduction of accumulated depreciation. The company believes that, underMaryland. Under the terms of the tenant's lease,Merger Agreement, each issued and outstanding share of beneficial interest, without par value, of REIT-Cal would be converted into the tenant is responsible for undertaking any remediation or removalright to receive 0.57 (the "Exchange Ratio") of contamination, if any, causeda share of BRE common stock in a tax-free transaction. In the event that either (i) (a) the average closing price per share of the BRE common stock as reported by the tenant. AlthoughNew York Stock Exchange (the "NYSE") for the ultimate outcome of environmental matters is subject to uncertainties and no assurances can be given, basedten consecutive trading days ending on its investigations conducted to date, management believes that(and including) the contamination at the Marymoor property will not have a material adverse effect on the company's financial condition and results of operations, regardless of whether the tenant agrees to undertake any necessary remediation. 525 ALMANOR The former tenant at the company's light industrial property at 525 Almanor, Sunnyvale, California ("525 Almanor") has been named in an action for contribution to the costs of groundwater remediation at certain sites now listed on the National Priorities List under CERCLA. The company has been advised that the California Regional Water Quality Control Board is considering a prospective order naming the former tenant as primarily liable with respect to one area of the contamination and the company, along with certain other property owners in the area, as secondarily liable for such contamination. As oftrading day immediately preceding the date of this report,REIT-Cal's stockholders meeting to consider the company has not been namedMerger (the "BRE Average Price") is less than $28.575, and (b) the difference between the BRE Average Price and the closing price of the BRE common stock on the NYSE on September 11, 1995, expressed as a percent of the closing price of the BRE common stock on the NYSE on September 11, 1995, is at least 10% greater than the percentage decline in the order, although the company has notified its former tenant that, under -8- the termsvalue of the tenant's lease,NAREIT Equity REIT Index over the tenantperiod from September 11, 1995 to the trading day immediately preceding the date of the REIT-Cal stockholders meeting to consider the Merger, or (ii) the BRE Average Price is responsible for conducting any remediation or removal of contamination causedless than $28.07, the agreement may be terminated by REIT-Cal unless BRE increases the tenant. However, there can be no assuranceExchange Ratio so that the company ultimately will not have some liability with respect to this site. The costExchange Ratio as adjusted would equal a fraction the numerator of which is the product of 0.57 times (x) $28.575 in the case of a proposed termination under clause (i) above, or (y) $28.07 in the case of a proposed termination under clause (ii) above, and the denominator of which is the BRE Average Price. Closing of the 525 Almanor landMerger is contingent upon, among other things, approval of the stockholders of BRE and improvements, at July 31, 1994, was $4,245,000, before deductionREIT-Cal. The Merger will be treated as a purchase for accounting purposes. Upon the closing, Frank C. McDowell would continue to serve as President and Chief Executive Officer of accumulated depreciation.BRE. Three executives of REIT-Cal would also be added to BRE management: Jay W. Pauly as Senior Executive Vice President and Chief Operating Officer; LeRoy Carlson as Executive Vice President and Chief Financial Officer; and John H. Nunn as Senior Vice President, Property Management. In addition, three directors of REIT-Cal would be appointed to the BRE Board of Directors, increasing BRE's Board from six to nine members. 10 ITEM 2. PROPERTIES Information concerning the company's property portfolio is contained on pages 14-16 of the 1994 Annual Report, which information is hereby incorporated by reference. See also- ------ ---------- GENERAL In addition to the information set forth in this Item 2, information on the company's portfolio is set forth in Schedules XIIII and XIIIV under Item 14 (d)14(d) of this report. The company carries earthquake insurance on all of its properties. The annual aggregate limits (after payment of deductibles) for flood and earthquake coverage are $5,000,000 (in California) and $10,000,000 (outside of California). Apartments As reflected in the following chart, during the five fiscal years ended July 31, 1995,apartments have increased as a percentage of the company's portfolio of income producing properties and revenues:
1995 1994 1993 1992 1991 ------------------------------------------------ Percentage of portfolio at cost 68% 62% 53% 41% 38% Revenues generated 77% 70% 63% 58% 54%
In addition, revenue from apartments in the portfolio for all of fiscal 1995 and 1994 increased $943,000 (3%) in 1995 from the prior year. Since their real estate expenses also declined, their net operating income rose more than 6%. The following table shows certain operating information for the company's apartment investments owned at July 31, 1995. -11- BRE PROPERTIES, INC. Wholly owned apartments owned at July 31, 1995 Operating Information
1995 Average Monthly Rental Rates Average -------------------- Approximate Unit Size Per Average Number Rentable Area (Square Per Square Economic Property of units (Square Feet) Feet) Unit Foot Occupancy (1) - -------------------------------------------------------------------------------------------- SAN FRANCISCO BAY AREA, CALIFORNIA Sharon Green 296 321,944 1,088 $1,496 $1.38 96.2% Verandas 282 199,152 706 815 1.15 95.6 - ------------------------------------------------------------------------------------------- SUBTOTAL 578 521,096 902 $1,164 $1.27 95.9% - ------------------------------------------------------------------------------------------- SAN DIEGO, CALIFORNIA Cimmaron 184 146,472 796 $672 $0.84 93.8% Hacienda 192 148,624 774 649 0.84 95.0 Montanosa 472 352,248 746 764 1.02 94.1 Terra Nova Villas 232 185,440 799 674 0.84 91.4 Westpark 96 71,760 748 655 0.88 94.7 Winchester 144 112,744 783 672 0.86 96.2 - ------------------------------------------------------------------------------------------- SUBTOTAL 1,320 1,017,288 771 $665 $0.87 95.6% - ------------------------------------------------------------------------------------------- TUCSON, ARIZONA Camino Seco Village (2) 168 150,892 898 -- -- -- Casas Lindas 144 150,080 1,042 $838 $0.63 93.2% Colonia del Rio 176 177,760 1,010 696 0.52 88.2 Fountain Plaza 197 107,294 545 377 0.52 92.5 Hacienda del Rio 248 152,504 615 417 0.51 97.9 Oracle Village 144 129,336 898 600 0.50 96.5 SpringHill 224 175,520 784 559 0.54 95.3 - ------------------------------------------------------------------------------------------- SUBTOTAL 1,301 1,043,386 802 $575 $0.52 95.8% - ------------------------------------------------------------------------------------------- SEATTLE AREA, WASHINGTON Citywalk 102 90,672 889 $719 $0.81 96.7% Parkwood 240 256,256 1,068 776 0.73 93.0 Shadowbrook 352 274,504 780 659 0.84 92.1 - ------------------------------------------------------------------------------------------- SUBTOTAL 694 621,432 895 $706 $0.80 92.5% - ------------------------------------------------------------------------------------------- SACRAMENTO, CALIFORNIA Selby Ranch 400 396,442 991 $821 $0.83 89.7% - ------------------------------------------------------------------------------------------- PORTLAND, OREGON Brookdale Glen 354 271,040 766 $610 $0.80 93.5% - ------------------------------------------------------------------------------------------- SCOTTSDALE, ARIZONA Scottsdale Cove (3) 316 300,009 949 $755 $0.80 85.1% - ------------------------------------------------------------------------------------------- ORANGE COUNTY, CALIFORNIA Village Green 272 175,508 645 $633 $0.98 92.7% - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- TOTAL PORTFOLIO 5,235 4,346,201 830 $724 $0.81 93.9% - ------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------
(1) Average economic occupancy is defined as gross potential rent less vacancy losses, divided by gross potential rent for the period, expressed as a percentage. (2) Camino Seco Village- Acquired July 28, 1995 (3) Scottsdale Cove- Expanded by 116 units during fiscal 1995, with stabilization of occupancy achieved in February 1995. -12- OTHER PROPERTIES A majority of the company's commercial properties (i.e., properties other than apartments) are leased to tenants under long-term operating leases. For additional information regarding these leases, see Note B of Notes to the Financial Statements included in the 19941995 Annual Report, incorporated herein by reference. At July 31, 1994,1995, the company had approximately 123119 separate leases with approximately 121116 tenants in its commercial properties. Substantially all these leasesSee "Certain Significant Properties" for a discussion of The Hub Shopping Center, which has the majority of the company's total number of tenants. Of the company's eight fully occupied light-industrial, warehouse/distribution and office properties, two have multiple tenants, each with one tenant occupying more than 50% of the net rental space, and six have single tenants. During the year, one tenant came to the end of its lease term in 31% of Westridge (52,000 square feet in San Diego, California). A different tenant occupies the remaining 69% of the property. As discussed in "Dispositions", one light industrial property, Irvine Spectrum (50,000 square feet in Irvine, California) has been vacant since June 1994. Negotiations are net leases, which requireunderway to sell this property during fiscal 1996, although no assurance can be given that the tenant to reimbursesale will be consummated. In September 1995, the company completed the sale of Pomona Warehouse (358,000 square feet in Pomona, California) which had been vacant since December 1993. The proceeds were used for among other things, property- and casualty-insurance. In addition, BRE carries earthquake insurance on all its properties. The annual aggregate limits for Flood and Earthquake are $5,000,000 (in California) and $10,000,000 (outside of California). The company'sa tax-deferred exchange into the 240-unit apartment communities generally command rental ratescommunity Newport Landing Phase I, in the mid to upper range of the rental market. At July 31, 1994, monthly asking rents for the company's apartment units ranged from $545 at Brookdale Glen in Portland, Oregon, to $2,050 at Sharon Green in Menlo Park, California.Phoenix, Arizona. HEADQUARTERS The company maintains its corporate headquarters at One Montgomery Street, Suite 2500, Telesis Tower, San Francisco, California. A sublease with Wells Fargo Bank, for an eleven-year term, is for 10,142 rentable square feet at annual per square foot rents which began at $23 and rise to $34 in the tenth year. The lease term ends December 17, 1998. CERTAIN SIGNIFICANT PROPERTIES General For the fiscal year ended July 31, 1994,1995, one property had a book value equal to 10% or more of total assets or gross revenue equal to 10% or more of aggregate gross revenue: The Hub Shopping Center in Fremont, California. -9- THE HUB SHOPPING CENTER The occupancy rates at the following dates are shown below:
YEAR ENDED JULY 31, 1995 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---- The Hub Shopping Center 89% 93% 91%95% 89% 90%93% 91% 89%
-13- The average effective annual rentals per square foot at the following dates are shown below:
YEAR ENDED JULY 31, 1995 1994 1993 1992 1991 1990 ---- ---- ---- ---- ---------- ------ ------ ----- ------ The Hub Shopping Center * $ 10.70 $ 10.43 $ 10.36 $ 10.49 $ 10.36 (* Excludes$11.15 $10.70 $10.43 $10.36 $10.49
(Excludes Safeway ground lease covering 49,000 square feet of improvements, at a current annual base rent of $85,000, plus a percentage rent based on gross sales). Depreciation expense is calculated on The Hub Shopping Center, using the straight-line method and a 30 year life for the original buildings for both financial and tax reporting.
REPORTABLE REAL ESTATE (000 omitted except in realty tax rate) REPORTABLE REAL ESTATE DEPRECIATION LIFE CLAIMED TAXES FOR THE FEDERAL EXPENSE FOR THE FOR TAX YEAR TAX BASIS YEAR ENDED DEPRECIATION ENDING REALTY TAX 7/31/9495 (1) 7/31/9495 PURPOSES 6/30/94 RATE(3) -----------95(3) RATE (4) -------- ------- -------- ------- -------------- The Hub Shopping Center$30,145 $ 29,164 $ 1,0651,093 30 years $ 424 1.0727 %409 1.067% for original building (2) (1) The federal tax basis is after deduction of accumulated depreciation, as computed for tax purposes. (2) Leasing commissions on leases with a term of five years or more are amortized over the lease term. (3) BRE receives reimbursement from tenants for approximately 80% of the real estate taxes. (4) The realty tax rate is the amount which, when multiplied by the assessed value of a property, generates the real estate taxes due.
The Hub Shopping Center has 7675 tenants and 490,000 square feet of gross leasable space on 37.4 acres of land. Including a retail store owned and operated by Montgomery Ward, the center totals 659,000 square feet of gross leasable area. The open air regional shopping center is located in Fremont, California, 40 miles southeast of San Francisco and 10 miles northeast of San Jose. The company purchased The Hub in 1973 for $10,858,000 and has subsequently expanded and remodeled it significantly. Occupancy, 93% at July 31, 1993, dropped to 89% at July 31, 1994. The past several years have been characterized by the leasing of larger spaces to more promotional credit tenants, including Office Max, Fashion Bug, and Michael's Arts & Crafts. During fiscal 1994, BRE leased an 8,400 square foot store toCrafts, Trader Joe's, which operates 62 specialty food markets, and a 9,600 square foot store to Country Harvest Buffet. TheseBuffet, Old Navy Clothing Co., Taco Bell and other new leases are expected to bring occupancy to 95% by October 1994. -10- McDonalds. The Hub competes for retail tenants and customer traffic with numerous other shopping centers and discount stores (including superstores) in the area. Because large retail tenants generally draw shoppers to a center, they are typically able to negotiate lower per square-footsquare foot rents than occupants of smaller spaces. -14- The following table sets forth certain information regarding the six anchor tenants. Home Express and Safeway are the only tenants occupying 10% or more of the rentable square footage at The Hub.
CURRENT TENANT AND SQUARE LEASE MONTHLY PRINCIPAL BUSINESS FOOTAGE EXPIRATION RENEWAL OPTIONS BASE RENT - - ------------------ ------- ---------- --------------- -------------------- Home Express Housewares 50,000 1/31/97 Two 5-year options $25,000 Housewares Safeway Groceries 48,858 10/31/04 Four 5-year options 7,071*8,001* Groceries General Cinema 8-Screen Theater 36,437 12/31/07 Two 5-year options 43,269 8-Screen Theater Ross Dress for Less Clothing 29,050 1/31/95 Two05 One 5-year options 9,321option 10,626 Clothing Longs DrugsDrug Store 26,584 2/28/03 Two 10-year options 4,167 Office Max Office/Business Products 19,600 12/14/01 Two 5-year options 19,167 Office/Business Products * Ground lease only. The tenant owns the improvements.
-11- As of July 31, 1994, the1995, The Hub's lease expirations for the next 10 years are summarized as follows:
Total Percentage Number of Square of Gross Tenants Footage Annual RentTOTAL PERCENTAGE NUMBER OF SQUARE OF GROSS TENANTS FOOTAGE ANNUAL RENT ------- ------- ----------- 19951996 11 22,000 6.2 % 199634,000 4% 1997 12 80,000 18 1998 7 15,000 5 1999 5 17,000 6 2000 6 60,000 13 2001 4 18,000 6 2002 6 31,000 9 30,000 9.3 1997 10 76,000 16.9 1998 10 21,000 8.6 1999 4 13,000 4.8 2000 3 38,000 6.1 2001 2 14,000 3.4 2002 4 27,000 7.9 2003 5 38,000 5.76 2004 4 42,000 9.19 2005 4 54,000 4
-15- ITEM 3. LEGAL PROCEEDINGS None.- --------------------------- The company is defending various claims and legal actions that arise from its normal course of business, including certain environmental actions. While it is not feasible to predict or determine the ultimate outcome of these matters, in the opinion of management, none of these actions, individually or in the aggregate, will have a material effect on the company's results of operations, cash flows, liquidity or financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS - ------------------------------------------------------------ No matter was submitted to a vote of the shareholders during the fourth quarter of the fiscal year covered by this report. -12--16- EXECUTIVE OFFICERS OF THE REGISTRANT The following persons were executive officers of the company as of September 1, 1994:
Age at Name September 1, 1994 Position(s) - - ------------------------------------------------------------------------------------------------- Arthur G. von Thaden 62 President, Chief Executive Officer and Director Byron M. Fox 55 Executive Vice President Ronald P. Wargo 50 Senior Vice President Howard E. Mason, Jr. 61 Senior Vice President, Finance Ellen G. Breslauer 46 Secretary and Treasurer - - -------------------------------------------------------------------------------------------------
Mr. Fox and Mr. Wargo were appointed to their current positions in October of 1992. All of the other executive officers have held their respective positions since September 30, 1987. Set forth below is information regarding the business experience of each of the executive officers: Mr. von Thaden was elected a Director of BankAmerica Realty Investors in 1981. From 1970 to 1987, he was Chief Executive Officer of BankAmerica Realty Services, Inc. ("BARSI"), the former advisor to the company. Mr. Fox was employed by BRE and appointed Senior Vice President in December 1987. From 1977 to 1987, he was Vice President and General Manager of Dillingham Investment Corporation, a Hawaii land-investment firm. Mr. Wargo was employed by BARSI in 1978, and was appointed Senior Vice President in charge of Asset Management in 1992. He holds the Certified Property Manager (CPM) designation awarded by the Institute of Real Estate Management. Mr. Mason was Senior Vice President, Finance of BARSI from October 1980, and was its chief financial and accounting officer from its inception in 1970. He is a Certified Public Accountant and served as Controller for Henry Doelger Builder, Inc. from 1965 to 1970. Ms. Breslauer was elected Secretary in September 1987 after serving from March 1981 as Treasurer of BARSI, where she had been employed since 1971. She is a Certified Public Accountant. There is no family relationship among any of the company's executive officers or Directors. -13- - -------------------------------------------------------------------------------- PART II - ------------------------------------------------------------------------------- ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS The shares of the company's Class A common stock are traded on the New York Stock Exchange under the symbol BRE. Information concerning the high and low closing prices for the shares and dividends paid is contained on page 31 of the 19941995 Annual Report under the caption "Market Price Range and Dividends Paid Per Share," which information is incorporated herein by reference.reference to excerpts of the Annual Report. As of July 31, 1994,1995, there were approximately 3,8733,608 recordholders of the company's shares of Class A common stock. ITEM 6. SELECTED FINANCIAL DATA Reference is made to the information contained on page 2726 of the 19941995 Annual Report for the Selected Financial Data required by this Item, which information is incorporated herein by reference.reference to excerpts of the Annual Report. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the information contained on pages 28-3027-30 of the 19941995 Annual Report for Management'sunder the caption "Management's Discussion and Analysis of Financial Condition and Results from Operations,Operations", which information is incorporated herein by reference.reference to excerpts of the Annual Report. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to the financial statements contained on pages 18-2516-24 of the 19941995 Annual Report, for the Financial Statements, which financial statements are incorporated herein by reference.reference to excerpts of the Annual Report. See also Item 14 of this report for information concerning financial statements and schedules filed with this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. -14--17- - -------------------------------------------------------------------------------- PART III - ------------------------------------------------------------------------------- ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (a) EXECUTIVE OFFICERS. See "Executive Officers of the Registrant" in Part I of this report. (b) DIRECTORS. The information required by this Item is hereby incorporated by reference to the company's Proxy Statement under the heading "Election of Directors" and the caption "Compliance with Section 16(a) of the Securities and Exchange Act of 1934" filed with the Securities and Exchange Commission. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is hereby incorporated herein by reference to the Proxy Statement under the captions "Executive Compensation and Other Information", and "Compensation Committee Report on Executive Compensation of Executive Officers." ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this Item is hereby incorporated herein by reference to the Proxy Statement under the headings "Election of Directors" and "Principal Shareholders." ItemITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. -15-Reference is made to the information contained in Note H of Notes to Financial Statements, on page 23 of the 1995 Annual Report under the caption "Transactions with Related Parties", which information is incorporated herein by reference to excerpts of the Annual Report. -18- PART III ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) and (2) The responses to these subsections of Item 14 are submitted as a separate section of this report. (a)(3) ListLIST OF EXHIBITS 2.1 Agreement and Plan of Exhibits -----------------------Merger (1) 3.1 Restated Certificate of IncorporationIncorporation(2) 3.2 By-Laws (1)(3) 4.1 Rights Agreement, dated as of August 14, 1989, between the company and Chemical Trust Company of California, as successor rights agent to Bank of America N.T. & S.A. (2)(4) 10.1 1984 Stock Option Plan, as amended to date (3)(5) 10.2 1992 Employee Stock Option Plan, (3)as amended and restated to date 10.3 1994 Non-Employee Director Stock Plan 10.4 1992 Payroll Investment Plan (3) 10.4(5) 10.5 Form of Indemnification Agreement (4) 10.5(6) 10.6 Employment agreement with Arthur G. von Thaden (5) 10.6(7) 10.7 Agreement for Continuing Services with Arthur G. von Thaden 10.8 Employment agreement with Frank C. McDowell 10.9 Supplemental Executive Retirement Benefit agreement with Arthur G. von Thaden (5) 10.7(7) 10.10 Supplemental Executive Retirement Benefit agreement with Howard E. Mason, Jr. (5) 10.8(7) 10.11 BRE Properties, Inc. Retirement Plan (5) 10.9(7) 10.12 BRE Properties, Inc. Supplemental ERISA Retirement Plan 10.13 Sublease with Wells Fargo Bank on 10,142 square feet at Suite 2500, One Montgomery Street, San Francisco, California (5) 10.10(7) 10.14 Form of deferred compensation agreement with Eugene P. Carver (2) 11 Computation of earnings per share 1313.1 BRE Properties, Inc. 1994excerpts of the 1995 Annual Report 21 Subsidiaries of the registrant 24(2) 23.1 Consent of Ernst & Young LLP 27 Financial Data ScheduleSchedules - - --------------------------------------------- -19- (1) Incorporated by reference to the company's current report on Form 8-K dated October 11, 1995. (2) Incorporated by reference to the company's 1994 Annual Report on Form 10- K filed with the Securities and Exchange Commission on October 13, 1994. (3) Incorporated by reference to S-3 Registration Statement (No. 33-58802) filed with the Securities and Exchange Commission on February 26, 1993, as amended. (2)(4) Incorporated by reference to Exhibit 4.1 to the company's current report on Form 8-K dated August 14, 1989. -16- (3)(5) Incorporated by reference to the company's 1992 Annual Report on Form 10-K10- K filed with the Securities and Exchange Commission on October 19, 1992. (4)(6) Incorporated by reference to S-4 Registration Statement (No. 33-9014) filed with the Securities and Exchange Commission on September 25, 1986, as amended. (5)(7) Incorporated by reference to the company's 1988 Annual Report on Form 10-K10- K filed with the Securities and Exchange Commission on October 24, 1988. - - --------------------------------------------- (b) The exhibits listed in Item (a)(3) above are submitted as a separate section of this reportreport. (c) The financial statement schedules listed in response to Item (a)(1) and (2) are submitted as a separate section of this report. -17--20- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, there untothereunto duly authorized. BRE PROPERTIES, INC. Dated October 11, 199424, 1995 /s/ Arthur G. von Thaden ---------------- ------------------------- Arthur G. von ThadenFrank C. McDowell --------------------- Frank C. McDowell President Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date - - --------- ----- ---- /s/ Arthur G. von Thaden - - -------------------------Frank C. McDowell President and Director October 11, 1994 (Arthur G. von Thaden)24, 1995 - ------------------------ (Principal Executive Officer) ----------------(Frank C. McDowell) /s/ Howard E. Mason, Jr. - - ------------------------- Senior Vice President, Finance October 11, 199424, 1995 - ------------------------ (Principal Financial and Accounting (Howard E. Mason, Jr.) (Principal Financial ---------------- and Accounting Officer) /s/ C. Preston Butcher Director October 11, 1994 -24, 1995 - ------------------------ ---------------- (C. Preston Butcher) /s/ Eugene P. Carver Chairman and Director October 11, 1994 - - ------------------------ ---------------- (Eugene P. Carver) /s/ L. Michael Foley Director October 11, 199424, 1995 - - ------------------------ ---------------- (L. Michael Foley) /s/John McMahan Director October 11, 199424, 1995 - - ------------------------ ---------------- (John McMahan) /s/ Malcolm R. Riley Director October 11, 1994 -24, 1995 - ------------------------ ---------------- (Malcolm R. Riley) /s/ Arthur G. von Thaden Chairman and Director October 24, 1995 - ------------------------ (Arthur G. von Thaden) All of the Directors -18--21- ANNUAL REPORT ON FORM 10-K ITEM 14 (a)(1) AND (2) AND 14 (d) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES and FINANCIAL STATEMENT SCHEDULES YEAR ENDED JULY 31, 19941995 BRE PROPERTIES, INC. SAN FRANCISCO, CALIFORNIA -19--22- Form 10-K - Item 14 (a)(1) and (2) and 14(d) List of Financial Statements and Financial Statement Schedules Financial Statements: The following financial statements of BRE Properties, Inc. (the "company") are incorporated by reference in Item 8 to the specified portionsexcerpts of the BRE Properties, Inc. Annual Report to Shareholders for the year ended July 31, 1994.1995. Balance Sheets - July 31, 19941995 and July 31, 19931994 - page 1816 Statements of Income - Years ended July 31, 1995, 1994 July 31,and 1993 and July 31, 1992 - page 1917 Statements of Cash Flows - Years ended July 31, 1995, 1994 July 31,and 1993 and July 31, 1992 - page 2018 Statements of Shareholders' Equity - Years ended July 31, 1995, 1994 July 31,and 1993 and July 31, 1992 - page 2119 Notes to Financial Statements - pages 22-2520-24 Financial Statements Schedules The following financial statement schedules are included in Item 14(d): Schedule X Supplementary income statement informationII Valuation and qualifying accounts Schedule XIIII Real estate and accumulated depreciation Schedule XIIIV Mortgage loans on real estate All other schedules (I II, III, IV, V, VI, VII, VIII, IX, XIII and XIV)V) for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and, therefore, have been omitted. -20--23- REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS Shareholders and Directors BRE Properties, Inc. We have audited the financial statements and related schedules of BRE Properties, Inc. listed in Item 14 (a)(1) and (2) of the Annual Report on Form 10-K of BRE Properties, Inc. for the year ended July 31, 1994.1995. These financial statements and related schedules are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements and related schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and related schedules. 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 audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BRE Properties, Inc., at July 31, 19941995 and 1993,1994, and the results of its operations and cash flows for each of the three years in the period ended July 31, 19941995 in conformity with generally accepted accounting principles. Further, it is our opinion that the schedules referred to above present fairly, in all material respects, the information set forth therein in compliance with the applicable accounting regulations of the Securities and Exchange Commission. Ernst & Young LLP San Francisco, California August 29, 1994 -21-28, 1995 -24- BRE PROPERTIES, INC. SCHEDULE XII - SUPPLEMENTARY INCOME STATEMENT INFORMATIONVALUATION AND QUALIFYING ACCOUNTS July 31, 19941995 (000) OMITTED The activity in the allowance for possible investment losses for the three years ended July 31, 1995 is summarized as follows:
- - --------------------------------------------------------------------------- COL. A COL. B (1) - - --------------------------------------------------------------------------- ITEM Charged to Costs and Expenses - - ---------------------------------------------------------------------------1995 1994 1993 -------- -------- -------- Year ended July 31, 1994: Maintenance and repairs $4,966,000 Real estate and personal property taxes 3,043,000 Year ended July 31, 1993: Maintenance and repairs 4,015,000 Real estate and personal property taxes 2,266,000 Year ended July 31, 1992: Maintenance and repairs 2,771,000 Real estate and personal property taxes 1,762,000 (1) Amounts for the other costs and expenses items called for Balance at beginning of year $1,000 $1,000 $1,000 Plus: Charges to income 2,000 Less: Reductions in this Schedule are not presented because such amounts are less than 1%carrying value of total revenues.investments (1,750) -------- -------- -------- Balance at end of year $1,250 $1,000 $1,000 -------- -------- -------- -------- -------- --------
-22--25- BRE PROPERTIES, INC. SCHEDULE XIIII - REAL ESTATE AND ACCUMULATED DEPRECIATION JULY 31, 1994 (000 OMITTED)1995 (000) OMITTED
INITIAL COST TO COMPANYInitial Cost to Company ----------------------- COST BUILDINGS CAPITALIZED DEPRECI- AND SUBSEQUENT ABLE DATES ACQUIRED/ IMPROVE- TO LIVES- NAME LOCATION CONSTRUCTED LAND MENTS ACQUISITION YEARS -Cost Capitalized Dates Acquired/ Buildings and Subsequent to Name Location Constructed Land Improvements Acquisitions - ---- -------- --------------- ---- ------ ----------- ------------------- ------------- Apartments Montanosa San Diego, California 1992/1989-1990 $ 6,005 $ 24,065 $ 128 401989-90 $6,005 $24,065 $169 Mira Mesa San Diego, California 19931993/ 4,869 19,493 130 40133 (Cimmaron, Hacienda, Westpark) 1985-1987 Selby Ranch Sacramento, California 1986/1971-19741971-74 2,660 18,340 230 40231 Parkwood Mill Creek, Washington 1989/1989 3,947 15,811 33 4034 Scottsdale Cove Scottsdale, Arizona 1991-94/ 3,243 14,468 19 1992-94 Shadowbrook Redmond, Washington 1987/1986 3,1953,605 12,709 488 40131 The Verandas Union City, California 1993/1989 3,233 12,932 62 4063 Terra Nova Villas Chula Vista, California 1994/1985 2,925 11,699 28 4052 Brookdale Glen Portland, Oregon 1993/1985 2,797 11,188 40 Scottsdale Cove Scottsdale,58 Hacienda del Rio Tucson, Arizona 1991/1992 2,385 9,186 15 40 Expansion, under development 1993/1994 858 3,5931994/1983 1,859 7,437 28 Colonia del Rio Tucson, Arizona 1994/1985 1,774 7,094 20 Spring Hill Tucson, Arizona 1994/1987 1,733 6,933 26 Casas Lindas Tucson, Arizona 1994/1987 1,513 6,051 17 Westlake Village Daly City, California 1972/1951-71 7,425 Winchester San Diego, California 1994/1987 1,482 5,928 21 40 Westlake Village Daly City, California 1972/1951-1971 7,425 Sharon Green Menlo Park, California 1971/1970 1,250 5,770 201 45205 Camino Seco Village Tucson, Arizona 1995/1984 1,335 5,360 Oracle Village Tucson, Arizona 1994/1983 1,209 4,837 17 Citywalk Seattle, Washington 1988/1988 1,123 4,276 4010 Fountain Plaza Tucson, Arizona 1994/1975 907 3,628 23 Village Green La Habra, California 1972/1971 372 2,763 45 40115 Villa Serra Cupertino, California 1973/1970 900 ------- -------- ------- Subtotal-Apartments 45,426 157,753 1,381 ------- -------- ------- Shopping Centers---------- ---------- ---------- SUBTOTAL-APARTMENTS 56,166 200,782 1,351 ---------- ---------- ---------- The Hub Fremont, California 1973/1961-19871961-87 5,494 5,822 28,509 30-4030,509 El Camino Woodland Hills, California 1971/1970 1,500 10,037 2,762 40 ------- -------- ------- Subtotal-Shopping Centers3,697 ---------- ---------- ---------- SUBTOTAL-SHOPPING CENTERS 6,994 15,859 31,271 ------- -------- -------
34,206 ---------- ---------- ----------
GROSS AMOUNT AT WHICH CARRIED AT JULYGross Amount at Which Carried at July 31, 19941995 ---------------------------------------------- BUILDINGS ACCUMU- AND LATED IMPROVE- DEPRECI- ENCUM- NAME LOCATION LAND MENTS TOTAL ATION BRANCES -Buildings Depreciable and Accumulated Name Lives- Year Land Improvement Total Depreciation Encumbrances - ---- ------------------- ---- -------------------- ----- -------- ------------------- ------------ Apartments Montanosa San Diego, California $ 6,005 $ 24,193 $ 30,198 $ 955 $17,26840 $6,005 $24,234 $30,239 $1,561 $17,105 Mira Mesa San Diego, California40 4,869 19,623 24,492 407 13,51719,626 24,495 897 13,303 (Cimmaron, Hacienda, Westpark) Selby Ranch Sacramento, California40 2,660 18,570 21,230 3,803 12,95418,571 21,231 4,265 12,763 Parkwood Mill Creek, Washington40 3,947 15,844 19,791 1,87715,845 19,792 2,272 Scottsdale Cove 40 3,243 14,487 17,730 859 Shadowbrook Redmond, Washington40 3,605 12,787 16,392 2,27112,840 16,445 2,594 The Verandas Union City, California40 3,233 12,994 16,227 40512,995 16,228 730 Terra Nova Villas Chula Vista, California40 2,925 11,727 14,652 97 9,18211,751 14,676 391 9,240 Brookdale Glen Portland, Oregon40 2,797 11,188 13,985 373 Scottsdale Cove Scottsdale, Arizona 2,385 9,201 11,586 526 Expansion, under development 858 3,593 4,451 Winchester San Diego, California 1,482 5,949 7,431 5011,246 14,043 654 Hacienda del Rio 40 1,859 7,465 9,324 139 5,608 Colonia del Rio 40 1,774 7,114 8,888 147 5,273 Spring Hill 40 1,733 6,959 8,692 144 5,337 Casas Lindas 40 1,513 6,068 7,581 152 Westlake Village Daly City, California 7,425 7,425 * Winchester 40 1,482 5,928 7,410 198 Sharon Green Menlo Park, California45 1,250 5,971 7,221 2,785 19,6495,975 7,225 2,935 19,372 Camino Seco 40 1,335 5,360 6,695 4,234 Oracle Village 40 1,209 4,854 6,063 101 4,188 Citywalk Seattle, Washington40 1,123 4,276 5,399 6764,286 5,409 783 Fountain Plaza 40 907 3,651 4,558 68 3,136 Village Green La Habra, California45 372 2,808 3,180 1,5252,878 3,250 1,595 Villa Serra Cupertino, California 900 900 ** ------- -------- -------- ------- ------- Subtotal-Apartments 45,836 158,724 204,560 15,750 72,570 ------- -------- -------- ------- ------- Shopping Centers--------- --------- ---------- ---------- ---------- SUBTOTAL-APARTMENTS 56,166 202,133 258,299 20,485 99,559 --------- --------- ---------- ---------- ---------- The Hub Fremont, California30-40 5,494 34,331 39,825 10,66136,331 41,825 11,680 El Camino Woodland Hills, California40 1,500 12,799 14,299 1,776 1,374 ------- -------- -------- ------- ------- Subtotal-Shopping Centers13,734 15,234 2,130 1,269 --------- --------- ---------- ---------- ---------- SUBTOTAL-SHOPPING CENTERS 6,994 47,130 54,124 12,437 1,374 ------- -------- -------- ------- -------50,065 57,059 13,810 1,269 --------- --------- ---------- ---------- ----------
-23-* Subordinated land lease ** Nonsubordinated land lease -26- BRE PROPERTIES, INC. SCHEDULE XIIII - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued) JULY 31, 1994 (000 OMITTED)1995 (000) OMITTED
INITIAL COST TO COMPANYInitial Cost to Company ----------------------- COST BUILDINGS CAPITALIZED DEPRECI- AND SUBSEQUENT ABLE DATES ACQUIRED/ IMPROVE- TO LIVES- NAME LOCATION CONSTRUCTED LAND MENTS ACQUISITION YEARS - -Cost Capitalized Dates Acquired/ Buildings and Subsequent to Name Location Constructed Land Improvements Acquisitions ---- -------- -------------------------- ---- ------ ----------- ------------------ ------------ Other income-producing property Pomona Warehouse Pomona, California 1986/1981 $4,077 $7,429 Sorrento Technology San Diego, California 1989/1985 4,046 5,520 $700 LSI Logic Fremont, California 1982/1982-84 1,323 2,458 2,105 Fremont 3 Fremont, California 1982/1982-84 1,128 2,096 2,529 Westridge San Diego, California 1985/1984 1,072 4,300 108 Irvine Spectrum Irvine, California 1985/1984 1,459 3,983 63 Oak Creek II Milipitas, California 1984/1980 552 4,048 238 525 Almanor Sunnyvale, California 1971/1967-92 300 1,475 2,417 Peppertree Hayward, California 1981/1981 539 2,000 1,336 Oak Creek I Milipitas, California 1984/1980 379 2,780 73 Santa Clara Office Mountain View, California 1972/1971 233 703 348 -------- --------- -------- SUBTOTAL- OTHER 15,108 36,792 9,917 -------- --------- -------- TOTAL $78,268 $253,433 $45,474 ------- -------- ------- ------- -------- ------- Gross Amount at Which Carried at July 31, 1995 ---------------------------------------------- Buildings Depreciable and Accumulated Name Lives- Years Land Improvements Total Depreciation Encumbrances ---- ------------ ---- ------------ ----- ------------ ------------ Other income-producing property Pomona Warehouse Pomona, California 1986/1981 $ 4,077 $ 8,354 $ 767 40 $4,077 $7,429 $11,506 $2,204 Sorrento Technology San Diego, California 1989/198540 4,046 5,520 470 406,220 10,266 1,011 LSI Logic Fremont, California 1982/1982-198435 1,323 2,458 2,105 354,563 5,886 1,614 Fremont 3 Fremont, California 1987/198735 1,128 2,096 2,615 404,625 5,753 1,540 Westridge San Diego, California 1982/1982-198435 1,072 4,300 106 354,408 5,480 1,071 Irvine Spectrum Irvine, California 1985/1984 1,460 3,983 40 1,459 4,046 5,505 804 Oak Creek II Milpitas, California 1984/198035 552 4,048 312 354,286 4,838 1,283 525 Almanor Sunnyvale, California 1971/1967-199245 300 1,475 2,470 453,892 4,192 1,160 Peppertree Hayward, California 1981/198135 539 2,000 1,336 353,336 3,875 1,350 Oak Creek I Milpitas, California 1984/1980 379 2,780 73 35 Marymoor Redmond, Washington 1984/1980 418 1,808 132 35 Santa Clara County Mountain View, California 1972/1971 233 703 348 45 515 Ellis Mountain View, California 1973/1972 183 517 349 45 ------- -------- ------- Subtotal - Other 15,710 40,042 11,083 45 ------- -------- ------- Total $68,130 $213,654 $43,735 ------- -------- ------- ------- -------- -------
GROSS AMOUNT AT WHICH CARRIED AT JULY 31, 1994 ---------------------------------------------- BUILDINGS ACCUMU- AND LATED IMPROVE- DEPRECI- ENCUM- NAME LOCATION LAND MENTS TOTAL ATION BRANCES - - ---- -------- ---- --------- ----- -------- ------- Other income-producing property Pomona Warehouse Pomona, California $ 4,077 $ 9,121 $ 13,198 $ 1,946 Sorrento Technology San Diego, California 4,046 5,990 10,036 816 LSI Logic Fremont, California 1,323 4,563 5,886 1,481 Fremont 3 Fremont, California 1,128 4,711 5,839 1,410 Westridge San Diego, California 1,072 4,406 5,478 961 Irvine Spectrum Irvine, California 1,460 3,983 5,443 703 Oak Creek II Milpitas, California 552 4,360 4,912 1,170 525 Almanor Sunnyvale, California 300 3,945 4,245 976 Peppertree Hayward, California 539 3,336 3,875 1,259 Oak Creek I Milpitas, California 379 2,853 3,232 803 Marymoor Redmond, Washington 418 1,940 2,358 545884 Santa Clara County Mountain View, CaliforniaOffice 45 233 1,051 1,284 544 515 Ellis Mountain View, California 183 866 1,049 463 -------595 -------- -------- ------- Subtotal - Other 15,710 51,125 66,835 13,077 ------- -------- -------- ------- Total $68,540 $256,979 $325,519 $41,264 $73,944 -------SUBTOTAL- OTHER 15,108 46,709 61,817 13,516 -------- -------- ------- ------- ------- -------- -------- ------- ------- * Subordinated land lease ** Nonsubordinated land lease-------- TOTAL $78,268 $298,907 $377,175 $47,811 $100,828 -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
See Note A of Notes to Financial Statements for information related to lives on which depreciation is computed, and Note E of Notes to Financial Statements for additional information concerning encumbrances at July 31, 1994. -24-1995. -27- BRE PROPERTIES INC. SCHEDULE XIIII - REAL ESTATE AND ACCUMULATED DEPRECIATION JULY 31, 19941995 (000 OMITTED) The activity in equity investments and related accumulated depreciation for the three years ended July 31, 19941995 is summarized as follows:
EQUITY INVESTMENTS1995 1994 1993 1992 -------- -------- ----------------- --------- --------- EQUITY INVESTMENTS Balance at beginning of year $325,519 $282,012 $220,577 $212,926 Plus: Cash expenditures 23,515 45,712 33,535 4,42231,979 Acquisition through tax-deferred exchanges: Mortgage loan 17,500 Acquisition through tax-deferred exchangesValue of property exchanged 5,860 11,000 9,774Cash 248 1,556 Assumption of bond and mortgage debt 27,939 9,240 Less: PropertiesCost of properties disposed of through tax-deferred exchanges (4,156) (600) (4,946) Properties sold (11,445) (1,599)Reduction in carrying value (1,750) -------- -------- -------- Balance at end of year $377,175 $325,519 $282,012 $220,577 -------- -------- -------- -------- -------- -------- ACCUMULATED DEPRECIATION Balance at beginning of year $ 37,563 $ 32,270 $ 28,728$41,264 $37,563 $32,270 Plus: Provision during the year through charges to income 7,658 6,674 5,453 4,629 Less: Fully amortized leasing commissions on expired leases (74) (112) (160) (116) Accumulated depreciation on exchanged properties (971)(1,037) Accumulated depreciation on properties sold (2,861) ------- ------- ------- Balance at end of year $47,811 $41,264 $37,563 ------- ------- ------- ------- ------- ------- Approximate aggregate cost for federal income tax purposes $314,868 $265,735 $222,229 -------- -------- -------- -------- -------- --------
-28- BRE PROPERTIES, INC. SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE July 31, 1995 (000) OMITTED
Carrying Periodic Carrying Amount Subject to Final Payment Amount of Delinquent Principal Description Interest Rate Maturity Date Terms Mortgages or Interest ----------- ------------- ------------- -------- --------- -------------------- Office Building --------------- Washington 12% 1996 A $3,400 Apartments ---------- Arizona 10 1995 B 1,500 Land ---- Arizona 10 1996 B 1,500 Condominium ----------- Tennessee 8-10 2007-2008 C 904 Other 105 ----- ------ $7,409 None ------ ------
A Interest only is payable monthly. Principal is due at final maturity. B Interest only is payable monthly. Principal is due at final maturity. Provided that no event of default has occurred, the borrowers on each loan may request a one-year extension, during which time the interest rate rises to 11%, and a second one-year extension, during which time the interest rate rises to 12%. C Principal and interest are payable monthly in level amounts -29- BRE PROPERTIES, INC. SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE July 31, 1995 (000) OMITTED The activity in mortgage loans for the three years ended July 31, 1995 is summarized as follows:
1995 1994 1993 -------- -------- -------- Balance at beginning of year $4,516 $4,386 $5,254 Plus: Fundings 3,100 Less: Repayments (207) (320) (418) -------- -------- -------- Balance at end of year $41,264 $ 37,563 $ 32,270 -----------$7,409 $4,516 $4,836 -------- -------- -------- -------- -------- -------- Aggregate carrying amount of mortgage loans extended or renewed $3,400 $3,400 $3,400 -------- -------- -------- -------- -------- -------- Approximate aggregate cost for federal income tax purposes $265,735 $222,229 $171,126$7,409 $4,516 $4,836 -------- -------- -------- -------- -------- --------
-25- BRE PROPERTIES, INC. SCHEDULE XII - MORTGAGE LOANS ON REAL ESTATE JULY 31, 1994 (000 OMITTED)
CARRYING FINAL PERIODIC CARRYING AMOUNT SUBJECT TO INTEREST MATURITY PAYMENT AMOUNT OF DELINQUENT PRINCIPAL DESCRIPTION RATE DATE TERMS MORTGAGES OR INTEREST - - ----------- -------- -------- ------- --------- -------------------- OFFICE BUILDING Washington 11% 1995 A $3,400 CONDOMINIUM Tennessee 8-10 2007-2008 B 1,108 OTHER 8 ------ $4,516 None ------ ------ A Interest only is payable monthly. Principal is due at final maturity. B Principal and interest are payable monthly in level amounts. Loans are fully amortizing.
-26- BRE PROPERTIES, INC. SCHEDULE XII - MORTGAGE LOANS ON REAL ESTATE July 31, 1994 (000 OMITTED) The activity in mortgage loans for the three years ended July 31, 1994 is summarized as follows:
1994 1993 1992 -------- -------- -------- Balance at beginning of year $4,836 $5,254 $5,500 Less: Repayments (320) (418) (246) --- --- --- Balance at end of year $4,516 $4,836 $5,254 ----- ----- ----- ----- ----- ----- Aggregate carrying amount of mortgage loans extended or renewed $3,400 $3,400 $3,400 ----- ----- ----- ----- ----- ----- Approximate aggregate cost for federal income tax purposes $4,516 $4,836 $5,254 ----- ----- ----- ----- ----- -----
-27- ANNUAL REPORT ON FORM 10-K EXHIBIT INDEX YEAR ENDED JULY 31, 1994 BRE PROPERTIES, INC. SAN FRANCISCO, CALIFORNIA 3.1 Restated Certificate of Incorporation 3.2 By-Laws(1) 4.1 Rights Agreement, dated as of August 14, 1989, between the company and Chemical Trust Company of California, as successor rights agent to Bank of America N.T. & S.A.(2) 10.1 1984 Stock Option Plan, as amended to date(3) 10.2 1992 Employee Stock Option Plan(3) 10.3 1992 Payroll Investment Plan(3) 10.4 Form of Indemnification Agreement(4) 10.5 Employment agreement with Arthur G. von Thaden(5) 10.6 Supplemental Executive Retirement Benefit agreement with Arthur G. von Thaden(5) 10.7 Supplemental Executive Retirement Benefit agreement with Howard E. Mason, Jr.(5) 10.8 BRE Properties, Inc. Retirement Plan(5) 10.9 Sublease with Wells Fargo Bank on 10,142 square feet at Suite 2500, One Montgomery Street, San Francisco, California(5) 10.10 Form of deferred compensation agreement with Eugene P. Carver 11 Computation of earnings per share 13 BRE Properties, Inc. 1994 Annual Report 21 Subsidiaries of the registrant 24 Consent of Ernst & Young LLP 27 Financial Data Schedule ____________________ (1) Incorporated by reference to S-3 Registration Statement (No. 33-58802) filed with the Securities and Exchange Commission on February 26, 1993, as amended. -28- (2) Incorporated by reference to Exhibit 4.1 to the company's current report on Form 8-K dated August 14, 1989. (3) Incorporated by reference to the company's 1992 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 19, 1992. (4) Incorporated by reference to S-4 Registration Statement (No. 33-9014) filed with the Securities and Exchange Commission on September 25, 1986, as amended (5) Incorporated by reference to the company's 1988 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 24, 1988. (6) The company is not a party to any instrument with respect to long-term debt for which securities authorized thereunder exceed 10% of the total assets of the company. Copies of instruments with respect to long-term debt of lesser amounts will be provided to the Commission upon request. ____________________ -29--30-