Burnham Pacific Loses $1.1 Mil in Third Quarter; Liquidation Plan Costing $32.3 Mil

SAN DIEGO-Real estate investment trust Burnham Pacific Properties lost $1.1 million in the third quarter, as revenues fell and the company took over charges associated with its planned liquidation.

The company took a $1.1 million loss, or a negative four cents per share, in funds from operations for the quarter ending Sept. 30.That compares to $7.3 million in black ink, or $0.23 per share, for the same quarter last year. Revenues were $31.5 million during the third quarter of 2000, compared with $31.6 million in the third quarter of 1999.

The decline in FFO was due in part to lower revenues, which resulted from asset sales, a decrease in some fee income and an increase in borrowing costs. Burnham Pacific expects these factors will “continue to impact the company’s operating results,” the company says in a statement issued Wednesday.

A myriad of legal and financial problems hurt Burnham’s bottom line in the third quarter, during which the embattled REIT’s board of directors decided to liquidate the company after a running battle with dissident investors over the value of the publicly traded firm.

The company also paid $3.3 million for consulting and legal fees duringthe third quarter and wrote off $32.3 million in connection with the company’s recently announced plan to liquidate. Burnham took a restructuring hit of $2.1 million for severance and related costs for employees affected by the company’s decision to end a joint venture with the California Public Employees Retirement System. This was in addition to a severance expense of $1.6 million associated with the resignation of the former CEO and litigation expenses of $977,000, resulting from a recent verdict against the company in favor of a tenant.