FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
APRIL 1, 1997
Date of Report
(Date of Earliest Event Reported)
PACIFIC REAL ESTATE INVESTMENT TRUST
(Exact name of registrant as
specified in its charter)
0-8725 CALIFORNIA 94-1572930
(Registration (State or Other (IRS Employer
file Number) Jurisdiction of Identification
Incorporation) Number)
1010 EL CAMINO REAL #210, MENLO PARK CA 94025
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(415) 327-7147
(800) 366-6707...Wats line for all states
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The Trust was organized to acquire, manage and ultimately sell
income-producing real properties. In the course of its business,
Monterey Plaza Shopping Center, located in San Jose, California and five
notes receivable, were sold on April 25, 1997.
TERMS OF ORIGINAL ACQUISITION
In July 1987, the Trust purchased an option to acquire the Monterey Plaza
Shopping Center development site. Option payments totaled $964,000. The
Trust exercised its option in March 1989 for $9,704,000 and developed and
leased the shopping center. The Trust's mortgage loan encumbering the
property was from Prudential Insurance Company for $19,000,000, secured by a
First Deed of Trust on the property. The five notes receivable were acquired
in connection with the sale of Westwood Village Shopping Center in 1988, Mt.
Shasta Shopping Center in 1990 and the sale of options to acquire two other
shopping center properties in Scotts Valley, CA in 1994.
TERMS OF DISPOSITION AND FINANCING
The Trust sold Monterey Plaza Shopping Center for $24,957,000 and the
Trust's five notes receivable for $4,606,000 to Pan Pacific Development (US)
Inc. ("Pan Pacific") on April 25, 1997. After assumption of the existing loan
balance of approximately $18,371,000, the net cash proceeds to the Trust were
$11,192,000, less closing costs from the transaction and repayment of short
term debt. As part of this transaction, Pan Pacific has become the primary
obligor on the First Deed of Trust secured by the Mt. Shasta Shopping Center
with a remaining principal balance of $1,519,000. In the event of a default
by Pan Pacific, the Trust remains liable on this First Deed of Trust. In
connection with the sale, a loss of approximately $770,000 was recorded by
the Trust in the first quarter of 1997.
CARRYING AMOUNT AT DATE OF SALE
At the date of sale, the net carrying amount of land and improvements,
after depreciation, for financial statement purposes was $25,041,000 for
Monterey Plaza and $4,606,000 for the Notes Receivable.
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PACIFIC REAL ESTATE INVESTMENT TRUST
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PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 1996
PRO FORMA
ADJUSTMENTS
ASSETS HISTORICAL (NOTE 1) PRO FORMA
---------- ------------ ---------
Investment in commercial properties:
Operating properties:
Land . . . . . . . . . . . . . . . $ 10,104,000 $(10,104,000) $ 0
Buildings and improvements . . . . 28,187,000 (18,273,000) 9,914,000
Accumulated depreciation . . . . . (7,271,000) 3,141,000 (4,130,000)
------------ ------------ ------------
Operating properties - net . . . . 31,020,000 (25,236,000) 5,784,000
Property in receivership . . . . . . . 4,438,000 4,438,000
Notes receivable . . . . . . . . . . . 6,279,000 (6,103,000) 176,000
Cash . . . . . . . . . . . . . . . . . 1,011,000 3,801,000 4,812,000
Restricted cash . . . . . . . . . . . . 1,154,000 (1,054,000) 100,000
Accounts receivable (net of allowance
of $143,000 in 1996 and $146,000
in 1995) . . . . . . . . . . . . . . 489,000 (282,000) 207,000
Deferred lease commissions - net . . . 425,000 (210,000) 215,000
Deferred financing costs - net . . . . 329,000 (65,000) 264,000
Other assets . . . . . . . . . . . . . 1,038,000 (375,000) 663,000
------------ ------------ ------------
Total . . . . . . . . . . . . . . $ 46,183,000 $(29,524,000) $ 16,659,000
------------ ------------ ------------
------------ ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage loans . . . . . . . . . . . $ 25,700,000 $(19,955,000) $ 5,745,000
Short-term notes . . . . . . . . . 7,700,000 (7,700,000) 0
Security deposits . . . . . . . . . 118,000 (58,000) 60,000
Accounts payable and other
liabilities . . . . . . . . . . . 1,968,000 (1,041,000) 927,000
------------ ------------ ------------
Total liabilities . . . . . . . . 35,486,000 (28,754,000) 6,732,000
------------ ------------ ------------
Commitments and contingencies . . . . .
Minority interest in joint venture. . . 3,375,000 3,375,000
Shareholders' Equity:
Shares of beneficial interest, $10
par value, authorized: 1996 and
1995, 10,611,863; shares issued
and outstanding: 1996 and 1995,
3,706,845 . . . . . . . . . . . . . 37,068,000 37,068,000
Additional paid-in capital . . . . . . 11,009,000 11,009,000
Accumulated deficit . . . . . . . . . . (40,755,000) (770,000) (41,525,000)
------------ ------------ ------------
Shareholders' equity - net . . . . . . 7,322,000 (770,000) 6,552,000
------------ ------------ ------------
Total . . . . . . . . . . . . . . $ 46,183,000 $(29,524,000) $ 16,659,000
------------ ------------ ------------
------------ ------------ ------------
See note to pro forma consolidated financial statements.
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PACIFIC REAL ESTATE INVESTMENT TRUST
--------------
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996
PRO FORMA
ADJUSTMENT
HISTORICAL (NOTE 1) PRO FORMA
------------ ------------ ------------
Rental revenues . . . . . . . . . . . . . $ 5,780,000 $ (2,957,000) $ 2,823,000
------------ ------------ ------------
Operating expenses (including related
party amounts of $478,000 and
$694,000 in 1996 and 1995
respectively):
Operating . . . . . . . . . . . . . . 1,619,000 (417,000) 1,202,000
Property tax. . . . . . . . . . . . . 483,000 (345,000) 138,000
General and administrative . . . . . 520,000 520,000
Depreciation and amortization . . . . 2,062,000 (717,000) 1,345,000
Property management fees . . . . . . 197,000 (98,000) 99,000
Loss on impairment of value . . . . . 1,455,000 1,455,000
Gain on sale of property . . . . . . (772,000) (772,000)
------------ ------------ ------------
Total operating expenses . . . . . 5,564,000 (1,577,000) 3,987,000
------------ ------------ ------------
Operating income (loss) . . . . . . . . . 216,000 (1,380,000) (1,164,000)
------------ ------------ ------------
Other income/(expense):
Interest income . . . . . . . . . . . . 645,000 (490,000) 155,000
Interest expense . . . . . . . . . . . (3,404,000) 1,947,000 (1,457,000)
Merger expense . . . . . . . . . . . . (230,000) (230,000)
Loss on lease termination . . . . . . . (240,000) (240,000)
------------ ------------ ------------
Total other income/(expense) . . . (3,229,000) 1,457,000 (1,772,000)
------------ ------------ ------------
Net loss before minority interest . . . . (3,013,000) 77,000 (2,936,000)
Minority interest in joint venture . . . (414,000) (414,000)
------------ ------------ ------------
Net loss . . . . . . . . . . . . . . . . $ (3,427,000) $ 77,000 $ (3,350,000)
------------ ------------ ------------
------------ ------------ ------------
See notes to consolidated financial statements.
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BASIS OF PRESENTATION
NOTE 1.
The unaudited statements present: (1) the pro-forma consolidated balance
sheet at December 31, 1996 as if the Trust had sold Monterey Plaza Shopping
Center and the five notes receivable on that date, and (2) the pro-forma
consolidated statement of operations for the year ended December 31, 1996 as
if the Trust had sold Monterey Plaza and the five notes receivable on January
1, 1996. The unaudited statements also present the historical figures as
previously reported in the appropriate Form 10-K. Accounts related to
Monterey Plaza Shopping Center and the five notes receivable have been
eliminated as presented by the pro forma adjustments.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements.
Not applicable.
(b) Pro forma Financial Information.
Historical financial information and pro forma financial information
relating to the sale of Monterey Plaza Shopping Center and the five
notes receivable are included in the report.
(c) Exhibits.
Upon their receipt the Trust will amend its Form 8-K to include the
disposition documents for Monterey Plaza Shopping Center.
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Wilcox Patterson Date
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Robert Ch. Gould Date
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Harry E. Kellogg Date
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