SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 21, 1996
THE MACERICH COMPANY
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(Exact Name of Registrant as Specified in Charter)
Maryland 1-12504 95-4448705
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
233 Wilshire Boulevard, Suite 700, Santa Monica, CA 90401
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (310) 394-6911
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
1
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Item 2. Acquisition or Disposition of Assets
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Acquisition of Valley View Mall. On October 21, 1996, Macerich
Valley View Limited Partnership (the "Macerich Valley View Partnership"),
a majority-owned subsidiary of The Macerich Company (the "Registrant")
acquired Valley View Mall, containing, in the aggregate, approximately
1,567,000 square feet, from LaSalle Street Fund Incorporated of Delaware
("LaSalle") pursuant to a Purchase and Sale Agreement between LaSalle and
Macerich Valley View Partnership (the "Purchase Agreement"). The assets
acquired include, among other things, real property, the buildings and
improvements located thereon, certain lease interests, tangible and
intangible personal property and rights related thereto.
The aggregate purchase price, including closing costs, is
approximately $85.5 million, and was determined in good faith arms length
negotiations between Registrant and LaSalle. In negotiating the purchase
price the Registrant considered, among other factors, the mall's
historical and projected cash flow, the nature and term of existing
tenancies and leases, the current operating costs, the expansion
availability, the physical condition of the property, and the terms and
conditions of available financing. No independent appraisals were
obtained by the Registrant. The purchase price consisted of $85.5
million in cash. The cash consideration was paid from the Registrant's
general corporate funds and proceeds from debt placed on the property
concurrently with the acquisition. The Registrant intends to continue
operating the mall as currently operated and leasing the space therein to
national and local retailers.
Earnings before interest, taxes, depreciation and amortization,
as reflected on the attached statement of revenues and direct oprating
expenses, for the mall for 1995 was approximately $7.7 million, and for
the six months ended June 30, 1996 was approximately $4.0 million.
The description contained herein of the transaction described
above does not purport to be complete and is qualified in its entirety by
reference to the Purchase Agreement which is filed as Exhibit 2.1 hereto.
2
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Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
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(a) Financial Statements of Business Acquired
Report of Independent Accountants F-1
Statement of Revenues and
Certain Expenses for the year
ended December 31, 1995 and for the
six months ended June 30, 1996 and
1995 F-2
Notes to Financial Statements F-3
(b) Pro Forma Financial Information
Condensed Combined Statements of Income for
the year ended December 31, 1995 F-4
Condensed Combined Statements of Operations
for the six months ended June 30, 1996 and 1995 F-5
Condensed Combined Balance Sheet as of
June 30, 1996 F-6
(c) Exhibits
2.1 Purchase and Sale Agreement dated as of
September 26, 1996 between LaSalle Street Fund
Incorporated of Delaware and Macerich Valley
View Limited Partnership, a California limited
partnership.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Santa
Monica, State of California, on October 30, 1996.
THE MACERICH COMPANY
By: /s/THOMAS O'HERN
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Thomas O'Hern
Senior Vice President
and Chief Financial Officer
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Exhibit Index
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Exhibit No. Document Page
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2.1 Purchase Agreement dated
September 26, 1996 between LaSalle
Street Fund Incorporated of Delaware,
and Macerich Valley View Limited
Partnership, a California limited
partnership.
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Report of Independent Accountants
To the Board of Directors
of LaSalle Street Fund Incorporated of Delaware
We have audited the accompanying Statement of Revenues and Direct
Operating Expenses of Valley View Center for the year ended December 31,
1995. This statement is the responsibility of the Company's management.
Our responsibility is to express an opinion on this statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall presentation of the statement. We believe that our audit provides
a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with
the rules and regulations of the Securities and Exchange Commission (S-X
Rule 3-14) and excludes certain material expenses, that would not be
comparable to those resulting from the proposed future operations of the
property described in Note 2 and is not intended to be a complete
presentation of Valley View's revenue and expenses.
In our opinion, the statement referred to above presents fairly, in all
material respects, the revenues and direct operating expenses described in
Note 2 of Valley View Center for the year ended December 31, 1995, in
conformity with generally accepted accounting principles.
Price Waterhouse LLP
Chicago, Illinois
September 30, 1996
F-1
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VALLEY VIEW CENTER
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STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
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Year ended Six months Six months
December 31, ended ended
1995 June 30, 1995 June 30,1996
(unaudited) (unaudited)
Revenues:
Real Estate $14,216,038 $7,181,370 $7,437,203
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Direct Operating Expenses:
Property operating expenses 4,635,143 2,181,805 2,446,860
Real estate taxes 1,873,592 1,017,462 961,884
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6,508,735 3,199,267 3,408,744
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Revenues in excess of direct
operating expenses $ 7,707,303 $3,982,103 $4,028,459
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The accompanying notes are an integral part of this statement.
F-2
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VALLEY VIEW CENTER
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1995
1. Description of the Property
Valley View, (the "Property") located in Dallas, Texas, is a 1,500,000
square feet enclosed regional mall built between 1973 and 1982. The
Property was acquired by LaSalle Street Fund Incorporated (the Fund)
in July, 1981 and is managed by LaSalle Asset Managers Limited, an
affiliate of the Fund and LaSalle Partners.
2. Significant Accounting Policies
Basis of Presentation
The accompanying statement of revenues and direct operating expenses
is not representative of the actual operations for the year ended
December 31, 1995, because expenses which may not be comparable to the
proposed future operations of Valley View have been excluded.
Expenses excluded consist of management fees, mortgage interest,
depreciation and amortization, and other costs not directly related to
future operations.
Revenue recognition
Rental revenues are recognized as they are due in accordance with the
terms of the tenant lease contracts which approximates a straightline
basis.
F-3
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The following unaudited pro forma statement of operations has been prepared for
the year ended December 31, 1995.
This statement gives effect to the acquisition of Valley View Mall as if that
acquisition was completed on January 1, 1995.
This statement does not purport to be indicative of the results of operations
that actually would have resulted if the Registrant had owned Valley View Mall
throughout the period presented.
This statement should be read in conjunction with the financial statements and
notes thereto included elsewhere herein.
THE MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
(all amounts in thousands)
Pro forma Pro forma Results
Company results Adjustment- (Including the
for the Valley View Mall
year ended Valley View Mall Acquisition)
December 31, 1995 Acquisition December 31, 1995
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(A)
Revenues:
Minimum Rents 69,253 8,109 77,362
Percentage Rents 4,814 297 5,111
Tenant Recoveries 26,961 5,793 32,754
Other 1,441 17 1,458
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Total revenues 102,469 14,216 116,685
Shopping center expenses 31,580 6,508 38,088
REIT general and
administrative expenses 2,011 0 2,011
Depreciation and
amortization 25,749 1,673 (B) 27,422
Interest expense 25,531 6,082 (C) 31,613
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Net income (loss)
before minority interest
and uncombined joint
ventures and
management companies 17,598 (47) 17,551
Minority interest (D) (8,246) 17 (8,229)
Income (loss) from
uncombined joint
ventures and
management companies 3,250 0 3,250
Extraordinary loss on early
extinguishment of debt (1,299) (1,299)
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Net income 11,303 (30) 11,273
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Net income per share $0.73 $0.73
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Weighted average number
shares of common stock
outstanding 15,482 15,482
(A) The information should be read in conjunction with The Macerich Company's
(the "Company") report on Form 10-K for the period ended December 31, 1995.
(B) Depreciation on the Valley View Mall acquisition is computed on the
straight-line method over the estimated useful life of 39 years.
(C) Interest expense is based on debt expected to be placed on the
property at acquisition - $60,000 at LIBOR plus 1.5% (6.875%), plus
$11,000 of other indebtedness at LIBOR plus 1.75% (7.125%), and
$14,500 at a fixed rate of 8% percent.
(D) Minority interest represents the limited partners ownership
F-4
The following unaudited pro forma statement of operations has been prepared for
the six months ended June 30, 1996. This statement gives effect to the acquisition of
Valley View Mall as if that acquisition was completed on January 1, 1996
This statement also gives effect to the acquisition of Villa Marina Marketplace
as if it were acquired on January 1, 1996. Villa Marina Marketplace was acquired on
January 25, 1996, details of that acquisition are included in an 8K dated
February 2, 1996. This statement does not purport to be indicative of the
results of operations that actually would have resulted if the Registrant had owned
Valley View Mall and Villa Marina Marketplace throughout the period presented.
This statement should be read in conjunction with the financial statements and
notes thereto included elsewhere herein.
The Macerich Company
Unaudited Pro Forma
Condensed Combined Statement of Operations
(all amounts in thousands)
Pro forma Pro forma Pro forma Results
Adjustment- Adjustment- (Including the Valley View
Company results Valley View Mall for VillaMarina Mall Acquisition)
for the six months ended the six months ended Marketplace for the six months ended
June 30, 1996 June 30, 1996 Jan 1 to Jan 24, 1996 June 30, 1996
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(A)
Revenues:
Minimum Rents 46,641 4,005 603 51,249
Percentage Rents 3,089 170 50 3,309
Tenant Recoveries 22,582 3,019 228 25,829
Other 758 243 1,001
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Total revenues 73,070 7,437 881 81,388
Shopping center expenses 23,796 3,409 251 27,456
REIT general and
administrative expenses 1,396 0 0 1,396
Depreciation and amortization 15,650 837 (B) 171 16,658
Interest expense 20,359 3,041 (C) 117 23,517
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Net income (loss) before
minority interest and
uncombined joint ventures
and extraordinary loss 11,869 150 343 12,362
Minority interest (c) (5,277) (57) (130) (5,464)
Income (loss) from uncombined
joint ventures and
management companies 2,121 2,121
Extraordinary loss on early
retirement of debt 0 0
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Net income 8,713 93 213 9,019
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Weighted average of
shares outstanding 19,996 19,996
Net income per share $0.44 $0.45
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(A) This information should be read in conjunction with The Macerich Company's (the "Company") report on Form 10-Q
for the period ended June 30, 1996
(B) Depreciation on the Valley View Mall acquisition is computed on the straight-line method over the estimated useful
life of 39 years.
(C) Interest expense is based on debt expected to be placed on the property at acquisition- $60,000 at LIBOR + 1.5%
(6.875%) , plus $11,000 of other indebtedness at LIBOR + 1.75% (7.125%), and $14,500 at a fixed rate of 8%
(D) Minority interest represents the 38% ownership interest in the Operating Partnership not owned by the Company
F-5
The MACERICH COMPANY
UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
(all amounts in thousands)
Pro forma
Pro forma (Including the
Adjustment- Valley View
Company at Valley View Mall Mall Acquisition)
June 30, 1996 Acquisition June 30, 1996
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Gross property 929,260 85,500 1,011,760
Total assets 838,984 85,500 921,484
Mortgages and loans 571,970 85,500 654,470
Minority interest 91,667 0 91,667
Common stock 200 200
Additional paid
in capital 150,065 150,065
Retained earnings 0 0
Total liabilities and
shareholder equity 838,984 85,500 921,484
F-6