SAN FRANCISCO, SAN DIEGO, and SACRAMENTO, March 9 /PRNewswire/ -- AMB
Property Corporation (NYSE: AMB), Burnham Pacific Properties (NYSE: BPP) and
the California Public Employees' Retirement System (CalPERS) announced today
that BPP Retail, LLC, a co-investment entity between BPP and CalPERS, will
acquire 28 shopping centers owned by AMB aggregating 5.1 million square feet
for $663.4 million. The centers will be acquired in separate transactions,
which are currently expected to close on or about April 30, July 31 and
December 1, 1999. Six additional centers totaling 1.5 million square feet are
under contract for $284.4 million with BPP, subject to a financing
confirmation. If completed, these centers are currently expected to close by
year-end 1999.
Hamid R. Moghadam, Chief Executive Officer and President of AMB stated,
"AMB's strategy for over a decade has been to own both retail and industrial
properties to serve the real estate needs of the supply chain. Strategically,
however, we have a strong desire to sharpen our focus on certain types of
industrial properties located at or near major air cargo facilities or
seaports and convenient to major highway systems."
J. David Martin, Chief Executive Officer and President of BPP stated, "We
are very pleased to have this unique opportunity to acquire one of the highest
quality shopping center portfolios in the U.S. This transaction provides us
with a national platform in which to continue to grow our company. It also
fulfills our acquisition expectations for the year, which allows us to fully
focus our management attention on internal growth opportunities. We also
believe that it fulfills our earnings expectations for 1999 and 2000 without
further acquisitions."
Guy F. Jaquier, Senior Investment Officer for CalPERS Real Estate
commented, "We are excited about this opportunity as well. We have had a long
relationship with AMB and know them to be high quality real estate
professionals who have an eye for excellent properties. We are also pleased
with our relationship with BPP and their active management focus on community
shopping centers. This is one of those rare transactions where everyone
wins."
As part of the transaction, AMB granted CalPERS an option to acquire up to
two million original issue common shares of AMB for a purchase price of $25
per share, which may be exercised on or before March 31, 2000. BPP granted
CalPERS an option to acquire up to one million original issue common shares of
BPP for a purchase price of $15-3/8 per share, which may be exercised on or
before June 30, 2000. Guy Jacquier commented, "We are very impressed with
both of these companies and their management teams. We like both companies'
strategies and believe that they will both be long-term winners in each of
their sectors. We therefore wanted the opportunity to have the option to
acquire additional equity ownership in each."
W. Blake Baird, Chief Investment Officer and Managing Director of AMB
added, "In addition to the important benefit of redeploying capital into both
higher yielding and more strategic assets, AMB has the opportunity to
strengthen our balance sheet and increase our financial flexibility. With the
proceeds from the first group of transactions, we currently expect to reinvest
approximately $520 million in industrial properties and to reduce our secured
indebtedness by approximately $100 million. Further, if we complete the
dispositions of the additional six centers, we currently expect the proceeds
would be split evenly between debt reduction and reinvestment resulting in a
total redeployment into industrial properties of approximately $650 million
and total debt reduction of approximately $240 million. The phased closings
will allow us to redeploy capital thoughtfully and efficiently. As a result,
we currently expect to complete our acquisition and development activity in
1999 without the need for additional common equity capital."
Details of the transaction are as follows:
GLA Price
Closing Date Centers (000s SF) (Millions)
April 30, 1999 11 2,010 $ 292.8
July 31, 1999 12 2,036 245.8
December 1, 1999 5 1,028 124.8
Subtotal 28 5,074 $ 663.4
December 31, 1999 6 1,533 284.4
Total 34 6,607 $ 947.8
The 34 properties were valued individually using an overall capitalization
rate of 8.8% on cash basis net operating income. The attached schedule shows
a list of properties, their names, locations, square footage and major
tenants.
James W. Gaube, Chief Investment Officer and Executive Vice President of
BPP commented on the transactions, "This is a very mature portfolio in
excellent locations. There are many value-added opportunities for us
throughout the portfolio, including anchor tenant expansions, vacant pad
build-outs and re-tenanting which will enhance our yields even further."
John H. Diserens, Managing Director -- Retail of AMB added, "Burnham will
be acquiring a terrific collection of assets which took us over a decade to
assemble. We will continue to own a limited number of top-tier neighborhood
and community shopping centers. While our focus is clearly on industrial
assets, we will continue to manage retail assets for institutional clients
within AMB's Investment Management Division and may acquire selected value-
added retail assets opportunistically for AMB and its institutional partners."
Daniel B. Platt, Chief Financial Officer of BPP commented on the capital
structure of the acquisitions: "The capital needed for these transactions will
be raised from a combination of asset contributions to BPP Retail, LLC by
Burnham Pacific to cover its equity commitment, cash from CalPERS and debt
financing provided by Chase Manhattan Bank. The equity relationship in the
LLC will remain at 80% for CalPERS and 20% for BPP. Initially, the debt level
will be consistent with BPP's current level." No debt will be assumed by BPP
Retail, LLC as part of the transaction.
Hamid R. Moghadam, J. David Martin, and Guy F. Jaquier stated jointly, "In
this strategic transaction we all meet our objectives. AMB sharpens its
investment focus and improves its financial flexibility. Burnham receives a
high quality portfolio, which is profitable in the short and long term and
which provides a national platform for future growth. CalPERS receives a well
diversified, institutional quality portfolio that took ten years to assemble
and meets its investment goals."
AMB is a national real estate operating company with a primary focus on
industrial properties. As of December 31, 1998, AMB's portfolio consisted of
76% industrial and 24% retail product, based on annual rent. As of year-end
1998, AMB owned 582 industrial buildings and 38 retail centers totaling 63.6
million square feet located in markets nationwide including: Atlanta, Boston,
Chicago, Dallas/Fort Worth, Los Angeles, Miami, Minneapolis, Northern New
Jersey, the San Francisco Bay Area and Seattle. In addition, AMB manages,
through its subsidiary, AMB Investment Management, 4.5 million square feet of
property and has an investment in 4.0 million square feet of industrial
property in Chicago through an unconsolidated joint venture. As of December
31, 1998, the Company had 90.4 million common shares and units outstanding.
BPP is a fully integrated real estate operating company which acquires,
rehabilitates, develops and manages retail properties in the Western United
States. As of December 31, 1998, BPP had interests in 87 properties totaling
over 10 million square feet in California, Oregon, Washington, Colorado, Utah,
Texas and New Mexico.
CalPERS is the nation's largest public pension fund with assets totaling
more than $150 billion, of which $6.9 billion is invested in real estate. The
System provides retirement and health benefits to more than one million state
and local public employees and their families.
This press release and its attachment will be accessible through AMB's web
site at http://www.amb.com and through BPP's web site at http://www.burnhampacific.com. For
further information on CalPERS, please visit the web site at
http://www.calpers.ca.gov. Senior management from AMB and BPP will host a joint
conference call for industry analysts and institutional investors at 8:00 a.m.
(PST) tomorrow, March 10, 1999. To participate in the live conference call,
dial 1-800-633-8556 and enter the reservation number 11932858. After the call
had ended, a replay will be available through March 12, 1999 by dialing
1-800-633-8284 and entering reservation number 11932858. All other interested
parties are welcome to listen with live access to this call via the Internet
through the Vcall website at http://www.vcall.com.
This press release contains forward-looking statements about AMB and BPP,
which are made pursuant to the safe-harbor provisions of Section 21E of the
Securities Exchange Act of 1934. Such statements relate to, among other
things, the timing of the closings of the transactions, financing methods to
be used by AMB for its future acquisitions, the acquisition of assets,
corporate strategy and the consummation of the fourth transaction, all of
which may affect the future plans of operations, business strategy, growth of
operations and financial position. A number of factors could cause AMB's and
BPP's actual results to differ materially from those anticipated, including
changes in the general economic climate, the supply of and demand for
industrial and retail properties in AMB's and BPP's markets, potential
environmental liabilities, interest rate levels, the availability of
financing, tenant credit risks and higher than expected costs. For further
information on these and other factors that could impact AMB and BPP and the
statements contained herein, reference should be made to AMB's and BPP's
filings with the Securities and Exchange Commission, including their reports
on Form 10-K for the fiscal year ended December 31, 1997.
Portfolio Overview:
Total
Property Metropolitan GLA
Name Area (000's SF) Major Tenants
Phase 1 -- Close 04/30/99
Aurora Marketplace Seattle, WA 107 Longs Drugs; Safeway
Bayhill Center San Francisco, CA 122 Longs Drugs; Mollie
Stone's Markets
Corbins Corner Hartford, CT 177 Filene's Basement;
Toys 'R Us; Old Navy
Delray Plaza Miami, FL 301 Home Place; Regal
Cinema; Publix
Eastgate Plaza Seattle, WA 77 Rite Aid; Albertson's
Granada Village Los Angeles, CA 225 Ralphs; TJ Maxx; Rite Aid
Kendall Mall Miami, FL 300 J.C. Penney Home Store;
Publix; Eckard
Long Gate Baltimore, MD 405 Kohl's, Target; Safeway
Silverado Plaza San Francisco, CA 85 Nob Hill Foods; Rite Aid
Twin Oaks Los Angeles, CA 102 Ralph's; Rite Aid
Ygnacio Plaza San Francisco, CA 109 Lucky; Rite Aid
Subtotal 2,010
Phase 2 -- Close 07/31/99
Applewood Village Denver, CO 353 Wal-Mart Stores; King
Soopers; Walgreens
Arapahoe Village Denver, CO 159 Safeway; Mann Theatres
Brentwood Commons Chicago, IL 102 Dominick's
Civic Center Plaza Niles, IL 264 Dominick's; Home Depot
Five Points Santa Barbara, CA 144 Lucky; Ross Stores; Longs
Drugs
Pleasant Hill San Francisco, CA 234 Toys 'R Us; Target
First Colony Market Houston, TX 112 Randall's; Sears Hardware
Westheimer Market Houston, TX 136 Randall's
Woodway Collection Houston, TX 11 Randall's; Eckerd
Riverview Plaza Chicago, IL 139 Dominick's; Toys 'R Us;
Walgreens
Rockford Road Plaza Minneapolis, MN 206 TJ Maxx; Old Navy;
Rainbow Foods
Southwest Pavillion Reno, NV 77 Scolari's Food and Drug
Subtotal 2,036
Phase 3 -- Close 12/01/99
Memorial Collection Houston, TX 110 Randall's; Walgreen's
Palm-Aire Marketplace Miami, FL 160 Eckerd; Winn Dixie
Rancho San Diego San Diego,CA 111 Vons; Longs Drugs
Totem Lakes Mall Kirkland, WA 290 Comp USA; Trader Joe's;
Rite Aid; Lamonts
Weslayan Plaza Houston, TX 356 Randall's; Walgreens
Subtotal 1,028
Subtotal Phases 1-3 5,074
Phase 4 -- Close 12/31/99
Around Lennox Atlanta, GA 121 Bally's Fitness Center;
Comp USA; Circuit City
La Jolla Village San Diego,CA 165 Whole Foods Market; Sav-
On Drugs
Lakeshore Plaza San Francisco, CA 123 Ross Stores; Lucky
Latham Farms Albany, NY 602 Sam's Club; Wal-Mart
Stores
Manhattan Village
& Fry's Los Angeles, CA 424 Macy's; Ralphs; Sav-On
Drugs; Fry's Electronics
Woodlawn Center Atlanta, GA 98 Publix; Zany Brainy
Subtotal 1,533
Total 6,607
SOURCE Burnham Pacific Properties; AMB Property Corporation;
California
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Related links:
http://www.burnhampacific.com
CONTACT:
Christine G. Schadlich, Vice President,
Investor Relations of AMB Property Corporation, 415-394-9000 Ext.
250, Fax: 415-394-9001, cschadlich@amb.com; or Theresa
Jossenberger, Shareholder Relations Manager of Burnham Pacific
Properties, 619-652-4700, Fax: 619-652-4711,
tajossenberger@bpac.com; or Brad W. Pacheco, Public Information
Officer - Investments of California Public Employees' Retirement
System, 916-326-3991, Fax: 916-326-3507
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