Buffett Makes Passive Investment in Burnham

Burnham Pacific Properties Inc., a San Diego-based real estate investment trust that is liquidating itself, has piqued the interest of billionaire investor Warren Buffett.

Buffett, chief executive of Berkshire Hathaway Inc., disclosed that he has taken a 5.1% stake in Burnham.

In a filing with the Securities and Exchange Commission, Buffett described the investment as passive, meaning he has no interest in getting involved in Burnham’s affairs.

Buffett is a “value” investor: He often seeks to invest in companies whose shares are underappreciated in the market.

Thus, his stake in Burnham could signal that he believes Burnham will be worth more in its liquidation than the current market price would indicate. But the SEC filing did not say when Buffett bought his stake of nearly 1.7 million Burnham shares, or at what price or prices.

Burnham shares rose 6.1% on Wednesday, up 30 cents to $5.23 on the New York Stock Exchange, their highest price since February.

A spokeswoman at Burnham declined to comment on Buffett’s move.

Burnham’s board approved a plan to liquidate the REIT’s assets in August 2000, after deciding that bids for the company weren’t high enough.

Burnham, one of the largest owners of strip malls on the West Coast, announced last week that it will make a liquidating distribution of $1.25 a share to its common stockholders Jan. 8.

Earlier this month, Burnham announced that it had raised about $91.8 million in cash by selling eight properties to Pacific Retail, a joint venture led by affiliates of P. O’B. Montgomery & Co. and Apollo Real Estate Advisors.

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Bloomberg News was used in compiling this report.