SAN DIEGO, Sept. 14 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP), an equity real estate investment trust (REIT), today announced
execution of definitive documentation relative to its appointment by the
California Public Employees' Retirement System (CalPERS) to become CalPERS'
exclusive co-investment partner for neighborhood, community, promotional and
specialty retail centers throughout the western United States. Details of the
relationship with CalPERS, which will be effected through a newly formed
limited liability company of which Burnham will be the manager, are as
follows:
Targeted Initial Capitalization
CalPERS Initial Property Contributions +/- $ 80-million
BPP Initial Contributions +/- $ 20-million
CalPERS Cash Contributions +/- $320-million
BPP Cash (or Property) Contributions +/- $ 80-million
Initial Leverage +/- $175-million
Total Capitalization +/- $675-million
Total Capital Available for Investment +/- $575-million
Investment Relationship
CalPERS _ 80% / BPP _ 20%
Preferred Return to CalPERS on Existing Assets
5.00% "Real" Rate of Return Base, plus
0.50% Existing Asset Premium, plus
0.24% Leverage Premium at 25% Leverage, equals
5.74% Total "Real" Internal Rate of Return Preference
Benchmark Performance Goal for Burnham Pacific
NCREIF non-mall retail sub-index, Western U.S., plus 50 basis
points.
Incentive Fee to Burnham Pacific
25% of total return above the CalPERS preference after exceeding
the benchmark.
Management Fees to Burnham Pacific
.50% Acquisition Fee on Gross Asset Value/Paid at Acquisition
.50% Disposition Fee on Gross Asset Value/Paid at Disposition
.40% Annual Asset Management Fee on Gross Asset Value/Paid
Quarterly
3% Property Management Fee on Gross Revenues/Paid Monthly
3% All Costs (Less Land) Development Fee/Paid over Development
Period
Leasing Fees at 75% of Market Rates/Paid at Leasing
Retail Asset Targets
Neighborhood Centers
Community Centers
Power/Promotional Centers
Specialty Centers
Geographic State Targets
Alaska Idaho Oregon
Arizona Louisiana Texas
Arkansas Montana Utah
California Nevada Washington
Colorado New Mexico Wyoming
Hawaii Oklahoma
Allowable Investments
Single Assets
Portfolios
Operating Companies
Partnership Interest
Leasehold Interest
Convertible Debt
Pre-sale Agreements
Joint Ventures
Land Leases
Term of Agreement
30 Years
"Burnham Pacific is very pleased to have been chosen as CalPERS' exclusive
co-investment partner for western retail," commented J. David Martin, CEO of
Burnham Pacific. "This expanded relationship with CalPERS provides Burnham
with several unique advantages, including:
1) Immediate access to a substantial amount of callable capital (to be
invested at our discretion) and the reduced dependence upon additional
capital from the public markets;
2) The opportunity to leverage our own investment capital with substantial
incentive fees;
3) The reduction of general overhead expenses with the receipt of
management fees from the relationship;
4) The increased access to investment opportunities provided through this
relationship; and
5) The reduction of operating costs such as insurance rates and debt costs
as a result of the relationship.
David Gilbert, Senior Investment Officer for CalPERS added, "We are also
very pleased with this relationship. Burnham Pacific provides CalPERS with a
significant co-investment partner and a fully-integrated real estate operating
company focused in this targeted investment strategy. We fully expect to
expand this relationship even further as CalPERS continues its growth and
opportunities present themselves."
CalPERS is the nation's largest public pension fund managing assets
totaling more than $140 billion. The System provides retirement and health
benefits to more than one million state and public employees and their
families. Further information about CalPERS can be found on their web site at
http://www.calpers.ca.gov.
Burnham Pacific is a fully integrated real estate operating company which
acquires, rehabilitates, develops and manages retail properties in the Western
United States. The Company has offices in San Diego, Los Angeles, San
Francisco and Sacramento in California, as well as Portland, Oregon and
Seattle, Washington. The Company also makes available on a quarterly basis,
supplemental information which includes property and corporate level detail
which is available upon request. More information on Burnham Pacific may be
found on the Company's web site at http://www.burnhampacific.com or by calling
800-462-5181.
This news release contains forward-looking statements regarding future
events or financial performance of Burnham Pacific. 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
MD&A section of the Company's most recent 10-K report.
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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