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Home > Investing > Spotlight on REITs: Burnham Pacific Properties INC

Spotlight on REITs: Burnham Pacific Properties INC

Money Manager | Monday, March 12th, 2012

Burnham Pacific Properties INC: Was a real estate investing company that focused mostly on retail and commercial properties throughout the USA. It would buy a property manage it, renovate it and sell it. This company was founded in 1963, in San Diego California, as one of the country’s first limited status businesses. The company was listed on the New York Stock Exchange for years as BPP, until it went out of business in 2002.

Burnham Pacific Properties INC spent most of its time during 2000-2002 selling assets and stock in the company and as of July 1st 2002 its biggest property Central Shopping Center was sold for $3,000,000. Taking away the core asset of the company, which then completed the company’s total asset, sell off.

In 1998 Burnham Pacific Properties had over 1 billion dollars worth of assets, making it one of the biggest real estate investments trusts in California, In 1998 the REIT market was booming, in fact during 1997 the company’s portfolio grew by 187% this was a very positive sign for any investing shareholders, as was the 94% occupancy rate that the company held at this time, its retail properties and commercial business were able to compete with any other company in the market at that time.

But then in 2000 the company was doing poorly and had to start selling off all of their real estate assets, due to the market failures and the loss of some important properties along the way. The assets that could not be liquidated or sold were assumed by BPP liquidation trust in late 2002, and then in 2005 the assets were distributed accordingly, this was an extreme failure that nobody in the real estate investing business saw coming at that time.

The chairman and founder of Burnham Pacific Properties INC was John Burnham who had extensive experience as a insurance broker, real estate professional and bank director, giving him all the necessary information and skills to run a company of this size, he was accused a few times of fraud and illegal business activities by tenants and larger companies alike, all of which turned out to be a company issue not a personal one. And today John Burnham is 80.

Burnham Pacific Properties INC was a REIT that started off with a bang, acquiring many properties after it went public that may thought it was going to be the next large real estate trust in the nation. But due to over buying and poor business choices this was a investment trust that lasted only a few years as a huge market buyer, REIT is a risky business that can either pay off with huge dividends or fail in an extreme way, unfortunately this REIT was the latter.

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