SAN DIEGO, April 2 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced that it is restructuring its internal operations
to outsource its property management function to third party providers. The
outsourcing will result in a 26 percent reduction in Burnham Pacific's work
force and the closure of three property management offices. The Company will
record a restructuring charge of approximately $1.5 million in the first
quarter of 1999 and expects the transition to be completed by July 31, 1999.
J. David Martin, President and Chief Executive Officer, commented on the
announcement, "This decision follows the agreements which we have recently
entered into with AMB Property Corporation to purchase their national
portfolio of 34 retail shopping centers. AMB operates these centers through
independent property managers. As we focused on whether we would expand our
own internal property management capabilities, we concluded that outsourcing
the management of our existing properties was the right long-term strategic
decision. We expect this decision to benefit Burnham Pacific in several ways.
1. First, it enables the Company to more efficiently enter and exit
selected markets and assets as opportunities present themselves. This ability
is key to our focus on maximizing the return on our invested capital.
2. Secondly, it allows the Company to establish strategic relationships
with national property management companies as well as local providers. We
expect that these relationships should benefit the Company with increased
opportunities and improved services.
3. And third, it allows the management team to focus more time on
value-added activities that will more directly impact the bottom line."
Daniel B. Platt, Chief Financial Officer, also commented on the
announcement, "We believe that this decision will have a positive effect on
long-term earnings. However, we expect that the transition will have an
approximate $.01 per share dilutive effect on 1999 Funds From Operations (FFO)
and an approximate $.02 per share dilutive effect on 2000 FFO. These dilutive
effects do not take into account any additional accretive activities that may
occur between now and the end of those periods."
Joseph Wm. Byrne, Chief Operating Officer, added to Mr. Martin's comments,
"We believe that this is clearly in the best long-term interest of the
Company. We have a highly talented staff of retail real estate professionals
whose focus is valued added activities. Outsourcing property management
activities under the supervision of our Asset Managers allows us to maximize
our time on these activities. We will continue to asset manage, lease,
rehabilitate, develop, acquire and dispose of our assets in-house. These are
the activities that create additional value."
Burnham Pacific is a real estate investment trust that focuses on value
added retail real estate opportunities throughout the United States. More
information may be found by calling 800-462-5181 or visiting the Company's web
site at http://www.burnhampacific.com.
This news release contains forward-looking statements regarding future
events or financial performance of the Company. These statements are only
predictions and actual events or results may differ materially. Investors
should refer to the documents the Company files from time to time with the
Securities and Exchange Commission, specifically the cautionary statement
identifying certain factors that could affect future results included in the
"Risk Factors" section of the Company's most recently filed Registration
Statement and Form 10K.
SOURCE Burnham Pacific Properties, Inc.
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Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer of
Burnham Pacific Properties, Inc., 619-652-4700, Fax:
619-652-4711, dbplatt@bpac.com
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