UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
/X/ Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required) for
the fiscal year ended December 31, 1996
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or
/ / Transition report pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 (No Fee Required) for the
transition period from to
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Commission file number 0-20625
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DUKE REALTY LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Indiana 35-1898425
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
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(Address of principal executive offices) (Zip Code)
(317) 846-4700
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(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class: Name of each exchange on which registered:
None N/A
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SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
LIMITED PARTNER UNITS
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( X )
The aggregate market value of the Limited Partner Units held by
non-affiliates of Registrant is $43,648,729 based on the last
reported sale price of the common shares of Duke Realty
Investments, Inc., into which Limited Partner Units are
exchangeable, on March 7, 1997.
The number of Limited Partnership Units outstanding as of March
7, 1997 was 3,309,758.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference the Proxy Statement of Duke
Realty Investments, Inc. related to the Annual Meeting of
Shareholders to be held April 24, 1997.
<PAGE>
TABLE OF CONTENTS
FORM 10-K
Item No. Page(s)
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PART I
1. Business..............................................1 -4
2. Properties............................................4 -13
3. Legal Proceedings.....................................13
4. Submission of Matters to a Vote of Security Holders...13
PART II
5. Market for the Registrant's Equity and Related
Security Holder Matters...............................13
6. Selected Financial Data...............................14
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................14- 22
8. Financial Statements and Supplementary Data...........22
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure...................22
PART III
10. Directors and Executive Officers of the Registrant....23-25
11. Executive Compensation................................25
12. Security Ownership of Certain Beneficial Owners and
Management............................................25
13. Certain Relationships and Related Transactions........25
PART IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K...........................................26-52
Signatures.................................................53-54
Exhibits
<PAGE>
When used in this Form 10-K Report, the words "believes," "expects,"
"estimates" and similar expressions are intended to identify forward-
looking statements. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially.
In particular, among the factors that could cause actual results to
differ materially are continued qualification as a real estate
investment trust, general business and economic conditions,
competition, increases in real estate construction costs, interest
rates, accessibility of debt and equity capital markets and other
risks inherent in the real estate business including tenant defaults,
potential liability relating to environmental matters and illiquidity
of real estate investments. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
the date hereof. The Partnership undertakes no obligation to publicly
release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events.
Readers are also advised to refer to Duke Realty Investments, Inc.'s
Form 8-K Report as filed with the U.S. Securities and Exchange
Commission on March 29, 1996 for additional information concerning
these risks.
PART I
ITEM 1. BUSINESS
Duke Realty Limited Partnership (the "Partnership") was formed on
October 4, 1993, when Duke Realty Investments, Inc. (the "Predecessor
Company" or the "General Partner") contributed all of its properties
and related assets and liabilities along with the net proceeds of
$309.3 million from the issuance of an additional 14,000,833 shares
through an offering (the "1993 Offering") to the Partnership.
Simultaneously, the Partnership completed the acquisition of Duke
Associates, a full-service commercial real estate firm operating in the
Midwest. The General Partner was formed in 1985 and qualifies as a real
estate investment trust under provisions of the Internal Revenue Code.
The General Partner is the sole general partner of the Partnership
currently owning 88.9% of the partnership interest ("General Partner
Units"). The remaining 11.1% of the Partnership is owned by limited
partners ("Limited Partner Units" and, together with the General
Partner Units, the "Common Units").
The Partnership's primary business segment is the ownership and rental
of industrial, office and retail properties throughout the Midwest. As
of December 31, 1996, it owned interests in a diversified portfolio of
266 rental properties comprising 31.2 million square feet (including 17
properties and one expansion comprising 3.8 million square feet under
development). Substantially all of these properties are located in the
Partnership's primary markets of Indianapolis, Indiana; Cincinnati,
Cleveland, and Columbus, Ohio; Detroit, Michigan; St. Louis, Missouri
and Nashville, Tennessee. In addition to its Rental Operations, the
Partnership through its Service Operations provides, on a fee basis,
leasing, management, construction, development and other real estate
services for approximately 8.7 million square feet of properties owned
by third parties. See Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Item 8 "Financial
Statements and Supplementary Data" for financial information of these
industry segments. The Partnership conducts its Service Operations
through Duke Realty Services Limited Partnership and Duke Construction
Limited Partnership, in which the Partnership has an 89% profits
interest (after certain preferred returns on partners' capital
accounts) and effective control of their operations. All references to
the "Partnership" in this Form 10-K Report include the Partnership and
those entities owned or controlled by the Partnership, unless the
context indicates otherwise. The Partnership has the largest commercial
real estate operations in Indianapolis and Cincinnati and is one of the
largest real estate companies in the Midwest.
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<PAGE>
The Partnership's headquarters and executive offices are located in
Indianapolis, Indiana. In addition, the Partnership has seven regional
offices located in Cincinnati, Ohio; Columbus, Ohio; Cleveland, Ohio;
Decatur, Illinois; Detroit, Michigan; Nashville, Tennessee and St.
Louis, Missouri. The Partnership had 480 employees as of December 31,
1996.
BUSINESS STRATEGY
The Partnership's business objective is to increase its Funds From
Operations ("FFO") by (i) maintaining and increasing property occupancy
and rental rates through the aggressive management of its portfolio of
existing properties; (ii) expanding existing properties; (iii)
developing and acquiring new properties; and (iv) providing a full line
of real estate services to the Partnership's tenants and to third-
parties. FFO is defined by the National Association of Real Estate
Investment Trusts as net income or loss excluding gains or losses from
debt restructuring and sales of property plus depreciation and
amortization, and after adjustments for minority interest,
unconsolidated partnerships and joint ventures (adjustments for
minority interests, unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis). While management believes
that FFO is a relevant measure of the Partnership's operating
performance because it is widely used by industry analysts to measure
the operating performance of equity REITs and real estate partnerships,
such amount does not represent cash flow from operations as defined by
generally accepted accounting principles, should not be considered as
an alternative to net income as an indicator of the Partnership's
operating performance, and is not indicative of cash available to fund
all cash flow needs. As a fully integrated commercial real estate firm,
the Partnership believes that its in-house leasing, management,
development and construction services and the Partnership's significant
base of commercially zoned and unencumbered land in existing business
parks should give the Partnership a competitive advantage in its future
development activities.
The Partnership believes that the analysis of real estate opportunities
and risks can be done most effectively at regional or local levels. As
a result, the Partnership intends to continue its emphasis on
increasing its market share and effective rents in its primary markets
within the Midwest. The Partnership also expects to utilize its
approximately 1,200 acres of unencumbered land and its many business
relationships with more than 2,800 commercial tenants to expand its
build-to-suit business (development projects substantially pre-leased
to a single tenant) and to pursue other development and acquisition
opportunities in its primary markets and elsewhere in the Midwest. The
Partnership believes that this regional focus will allow it to assess
market supply and demand for real estate more effectively as well as to
capitalize on its strong relationships with its tenant base.
The Partnership's policy is to seek to develop and acquire Class A
commercial properties located in markets with high growth potential for
Fortune 500 companies and other quality regional and local firms. The
Partnership's industrial and suburban office development focuses on
business parks and mixed-use developments suitable for development of
multiple projects on a single site where the Partnership can create and
control the business environment. These business parks and mixed-use
developments generally include restaurants and other amenities which
the Partnership believes will create an atmosphere that is particularly
efficient and desirable. The Partnership's retail development focuses
on community, power and neighborhood centers in its existing markets.
As a fully integrated real estate company, the Partnership is able to
arrange for or provide to its industrial, office and retail tenants not
only well located and well maintained facilities, but also additional
services such as build-to-suit construction, tenant finish
construction, expansion flexibility and advertising and marketing
services.
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<PAGE>
Consistent with its business strategy of expanding in attractive
Midwestern markets, the Partnership carefully analyzed the real estate
investment potential of several major Midwestern metropolitan areas.
Based on this analysis, management concluded that the St. Louis and
Cleveland markets offer attractive real estate investment returns in
the industrial and suburban office markets based on the following
factors: (i) fragmented competition; (ii) strong real estate
fundamentals; and (iii) favorable economic conditions.
In 1995, the Partnership established a regional office in St. Louis and
acquired 463,000 square feet of suburban office properties and 153
acres of land for the future development of industrial properties. In
February 1996, the Partnership acquired a 782,000 gross square foot
suburban office portfolio and the operating personnel of an independent
real estate developer and operator in Cleveland. The Partnership
intends to aggressively pursue the development and acquisition of
additional rental properties in both the St. Louis and Cleveland
markets.
All of the Partnership's properties are located in areas that include
competitive properties. Such properties are generally owned by
institutional investors, other REITs or local real estate operators;
however, no single competitor or small group of competitors is dominant
in the Partnership's markets. The supply and demand of similar
available rental properties may affect the rental rates the Partnership
will receive on its properties. Based upon the current occupancy rates
in the Partnership and competitive properties, the Partnership believes
there will not be significant competitive pressure to lower rental
rates in the near future.
FINANCING STRATEGY
The Partnership seeks to maintain a well-balanced, conservative and
flexible capital structure by: (i) currently targeting a ratio of long-
term debt to total market capitalization in the range of 25% to 40%;
(ii) extending and sequencing the maturity dates of its debt; (iii)
borrowing primarily at fixed rates; (iv) generally pursuing current and
future long-term debt financings and refinancings on an unsecured
basis; and (v) maintaining conservative debt service and fixed charge
coverage ratios. Management believes that these strategies have enabled
and should continue to enable the General Partner and the Partnership
to access the debt and equity capital markets for their long-term
requirements such as debt refinancings and financing development and
acquisitions of additional rental properties. The General Partner and
the Partnership have raised approximately $626 million through public
debt and equity offerings during the three years ended December 31,
1996. Based on these offerings, the General Partner and the Partnership
have demonstrated their abilities to access the public markets as a
source of capital to fund future growth. In addition, as discussed
under Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Partnership has a $150
million line of credit available for short-term fundings of development
and acquisition of additional rental properties. The Partnership's debt
to total market capitalization ratio (total market capitalization is
defined as the total market value of all Common and Preferred Units
outstanding plus outstanding indebtedness) at March 7, 1997 was 25.3%.
The market value of the Common and Preferred Units is assumed to be
equal to the General Partner's market value of Common and Preferred
Shares. The Partnership's ratio of earnings to debt service and ratio
of earnings to fixed charges for the year ended December 31, 1996 were
2.62x and 2.20x, respectively. In computing the ratio of earnings to
debt service, earnings have been calculated by adding debt service to
income before gains or losses on property sales. Debt service consists
of interest expense and recurring principal amortization (excluding
maturities) and excludes amortization of debt issuance costs. In
computing the
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<PAGE>
ratio of earnings to fixed charges, earnings have been calculated by
adding fixed charges, excluding capitalized interest, to income before
gains or losses on property sales. Fixed charges consist of interest
costs, whether expensed or capitalized, the interest component of
rental expense, amortization of debt issuance costs and preferred stock
dividend requirements. Management believes these measures to be
consistent with its financing strategy.
OTHER
The Partnership's operations are not dependent on a single or few
customers as no single customer accounts for more than 2% of the
Partnership's total revenue. The Partnership's operations are not
subject to any significant seasonal fluctuations. The Partnership
believes it is in compliance with environmental regulations and does
not anticipate material effects of continued compliance.
For additional information regarding the Partnership's investments and
operations, see Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and Item 8, "Financial
Statements and Supplementary Data." For additional information about
the Partnership's business segments see Item 8, "Financial Statements
and Supplementary Data."
ITEM 2. PROPERTIES
As of December 31, 1996, the Partnership owns an interest in a
diversified portfolio of 266 commercial properties encompassing
approximately 31.2 million net rentable square feet (including 17
properties and one expansion comprising 3.8 million square feet under
development) located primarily in five states and approximately 1,200
acres of land for future development. The properties are described on
the following pages.
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<PAGE>
<TABLE>
<CAPTION>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- ---------- ------- ----------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
IN-SERVICE
- ----------
INDUSTRIAL
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INDIANAPOLIS, INDIANA
PARK 100 BUSINESS PARK
Building 38 Fee 100% 1978 1.11 6,000 100%
Building 48 Fee 50% [1] 1984 8.63 127,410 100%
Building 49 Fee 50% [1] 1982 4.55 89,600 100%
Building 50 Fee 50% [1] 1982 4.09 51,200 100%
Building 52 Fee 50% [1] 1983 2.70 34,800 100%
Building 53 Fee 50% [1] 1984 4.23 76,800 100%
Building 54 Fee 50% [1] 1984 4.42 76,800 100%
Building 55 Fee 50% [1] 1984 3.83 43,200 100%
Building 56 Fee 50% [1] 1984 15.94 300,000 100%
Building 57 Fee 50% [1] 1984 7.70 128,800 100%
Building 58 Fee 50% [1] 1984 8.03 128,800 100%
Building 59 Fee 50% [1] 1985 5.14 83,200 100%
Building 60 Fee 50% [1] 1985 4.78 83,200 62%
Building 62 Fee 50% [1] 1986 7.70 128,800 100%
Building 67 Fee 50% [1] 1987 4.23 72,350 100%
Building 68 Fee 50% [1] 1987 4.23 72,360 100%
Building 71 Fee 50% [1] 1987 9.06 193,400 100%
Building 74 Fee 10%-50% [2] 1988 12.41 257,400 100%
Building 76 Fee 10%-50% [2] 1988 5.10 81,695 100%
Building 78 Fee 10%-50% [2] 1988 21.80 512,777 100%
Building 79 Fee 100% 1988 4.47 66,000 100%
Building 80 Fee 100% 1988 4.47 66,000 100%
Building 83 Fee 100% 1989 5.34 96,000 100%
Building 84 Fee 100% 1989 5.34 96,000 100%
Building 85 Fee 10%-50% [2] 1989 9.70 180,100 100%
Building 89 Fee 10%-50% [2] 1990 11.28 311,600 100%
Building 91 Fee 10%-50% [2]1990/1996 7.53 196,800 100%
Building 92 Fee 10%-50% [2] 1991 4.38 45,917 100%
Building 95 Fee 100% 1993 15.23 336,000 100%
Building 96 Fee 100% 1994 27.69 553,900 100%
Building 97 Fee 100% 1994 13.38 280,800 80%
Building 98 Fee 100% 1968/1995 37.34 508,306 100%
Building 99 Fee 50% [3] 1994 18.00 364,800 100%
Building 100 Fee 100% 1995 7.00 117,500 100%
Building 101 Fee 50% [1] 1983 4.37 45,000 92%
Building 105 Fee 50% [1] 1983 4.64 41,400 100%
Building 106 Fee 50% [1] 1978 4.64 41,400 100%
Building 107 Fee 100% 1984 3.56 58,783 40%
Building 108 Fee 50% [1] 1983 6.36 60,300 86%
Building 109 Fee 100% 1985 4.80 46,000 77%
Building 113 Fee 50% [1] 1987 6.20 72,000 100%
Building 114 Fee 50% [1] 1987 6.20 56,700 98%
Building 117 Fee 10%-50% [2] 1988 13.36 135,600 99%
Building 120 Fee 10%-50% [2] 1989 4.54 54,982 86%
Building 122 Fee 100% 1990 6.17 73,274 100%
Building 125 Fee 100% 1994/1996 13.81 195,080 100%
Building 126 Fee 100% 1984 4.04 60,100 100%
Building 127 Fee 100% 1995 6.50 93,600 100%
Building 128 Fee 100% 1996 14.40 322,000 100%
Building 129 Fee 100% 1996 16.00 320,000 54%
Building 130 Fee 100% 1996 9.70 152,000 73%
G'town Centre Bldg 1 Fee 100% 1987 5.85 111,883 51%
G'town Centre Bldg 2 Fee 100% 1987 5.81 72,120 95%
G'town Centre Bldg 3 Fee 100% 1987 5.10 45,536 56%
PARK FLETCHER
Building 2 Fee 50% [1] 1970 1.31 20,160 100%
Building 4 Fee 50% [1] 1974 1.73 23,000 100%
Building 6 Fee 50% [1] 1971 3.13 36,180 75%
Building 7 Fee 50% [1] 1974 3.00 41,900 80%
Building 8 Fee 50% [1] 1974 2.11 18,000 100%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- -------- ------ ----------- ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Building 14 Fee 100% 1978 1.39 19,480 100%
Building 15 Fee 50% [1] 1979 5.74 72,800 93%
Building 16 Fee 50% [1] 1979 3.17 35,200 100%
Building 18 Fee 50% [1] 1980 5.52 43,950 100%
Building 21 Fee 50% [1] 1983 2.95 37,224 100%
Building 22 Fee 50% [1] 1983 2.96 48,635 100%
Building 26 Fee 50% [1] 1983 2.91 28,340 53%
Building 27 Fee 25% [1] 1985 3.01 39,178 100%
Building 28 Fee 25% [1] 1985 7.22 93,880 100%
Building 29 Fee 50% [1] 1987 7.16 92,044 100%
Building 30 Fee 50% [1] 1989 5.93 78,568 100%
Building 31 Fee 50% [1] 1990 2.62 33,029 85%
Building 32 Fee 50% [1] 1990 5.43 67,297 100%
SHADELAND STATION
Buildings 204 & 205 Fee 100% 1984 4.09 48,600 100%
HUNTER CREEK BUSINESS PARK
Building 1 Fee 10%-50% [2] 1989 5.97 86,500 100%
Building 2 Fee 10%-50% [2] 1989 8.86 202,560 100%
HILLSDALE TECHNECENTER
Building 1 Fee 50% [1] 1986 9.16 73,436 100%
Building 2 Fee 50% [1] 1986 5.50 83,600 100%
Building 3 Fee 50% [1] 1987 5.50 84,050 100%
Building 4 Fee 100% 1987 7.85 73,874 100%
Building 5 Fee 100% 1987 5.44 67,500 93%
Building 6 Fee 100% 1987 4.25 64,000 100%
Franklin Road Fee 100% 1962,1971, 28.00 338,925 96%
Business Center 1974 [4]
Palomar Business Fee 100% 1973 4.50 99,350 100%
Center
Nampac Fee 100% 1974 6.20 83,200 100%
NORTH AIRPORT PARK
Thomson Consumer Fee 50% [5] 1996 52.00 599,040 100%
Electronics
6060 Guion Road Fee 100% 1968/1974 14.05 175,840 100%
/1977
4750 Kentucky Ave. Fee 100% 1974 11.01 125,000 100%
4316 West Minnesota Fee 100% 1970 10.40 121,465 100%
CARMEL, INDIANA
HAMILTON CROSSING
Building 1 Fee 100% 1989 4.70 51,825 100%
GREENWOOD, INDIANA
SOUTH PARK BUSINESS CENTER
Building 2 Fee 100% 1990 7.10 86,806 90%
LEBANON, INDIANA
LEBANON BUSINESS PARK
American Air Filter Fee 100% 1996 10.40 153,600 100%
Little, Brown and Fee 50% [5] 1996 31.60 500,455 100%
Company
CINCINNATI, OHIO
PARK 50 TECHNECENTER
Building 20 Fee 100% 1987 8.37 96,000 100%
Building 25 Fee 100% 1989 12.20 78,328 91%
GOVERNOR'S POINTE
4700 Building Fee 100% 1987 5.51 76,400 96%
4800 Building Fee 100% 1989 7.07 80,000 100%
4900 Building Fee 100% 1987 9.41 77,652 100%
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Partner- Net Percent
Ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest Ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- ---------- ------- --------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
WORLD PARK
Building 5 Fee 100% 1987 5.00 59,700 100%
Building 6 Fee 100% 1987 7.26 92,400 100%
Building 7 Fee 100% 1987 8.63 96,000 100%
Building 8 Fee 100% 1989 14.60 192,000 78%
Building 9 Fee 100% 1989 4.47 58,800 91%
Building 11 Fee 100% 1989 8.98 96,000 100%
Building 14 Fee 100% 1989 8.91 166,400 100%
Building 15 Fee 100% 1990 6.50 93,600 100%
Building 16 Fee 100% 1989 7.00 93,600 100%
MicroAge Fee 50% [1] 1994 15.10 304,000 100%
ENTERPRISE BUSINESS PARK
Building 1 Fee 100% 1990 7.52 87,400 91%
Building 2 Fee 100% 1990 7.52 84,940 100%
Building A Fee 100% 1987 2.65 20,888 100%
Building B Fee 100% 1988 2.65 34,940 95%
Building D Fee 100% 1989 5.40 60,322 71%
TRI-COUNTY BUSINESS PARK
Xetron Fee 10% [6] 1994 29.00 100,193 100%
FAIRFIELD BUSINESS CENTER
Building D Fee 100% 1990 3.23 40,223 100%
Building E Fee 100% 1990 6.07 75,600 100%
OTHER INDUSTRIAL - CINCINNATI
U.S. Post Office Fee 40% [7] 1992 2.60 57,886 100%
Building
University Moving Fee 100% 1991 4.95 70,000 100%
Creek Road Bldg I Fee 100% 1971 2.05 38,715 100%
Creek Road Bldg II Fee 100% 1971 2.63 53,210 100%
Cornell Commerce Fee 100% 1989 9.91 167,695 93%
Center
Mosteller Dist. Fee 100% 1957 [8] 25.80 357,796 64%
Center
Perimeter Park Fee 100% 1991 2.92 28,100 100%
Building A
Perimeter Park Fee 100% 1991 3.84 30,000 100%
Building B
COLUMBUS, OHIO
Pet Foods Bldg Fee 100% 1993/1995 16.22 276,000 100%
MBM Building Fee 100% 1978 3.98 83,000 100%
SOUTH POINTE BUSINESS CENTER
South Pointe A Fee 100% 1995 14.06 293,824 100%
South Pointe B Fee 100% 1996 13.16 307,200 100%
HEBRON, KENTUCKY
SOUTHPARK BUSINESS CENTER
Building 1 Fee 100% 1990 7.90 96,000 43%
Building 3 Fee 100% 1991 10.79 192,000 100%
CR Services Fee 100% 1994 22.50 214,840 100%
Redken Fee 100% 1994 28.79 166,400 100%
Laboratories
LOUISVILLE, KENTUCKY
Dayco Fee 50% [1] 1995 30.00 282,539 100%
FLORENCE, KENTUCKY
Empire Commerce Fee 100% 1973/1980 11.62 148,445 100%
Center
DECATUR, ILLINOIS
PARK 101 BUSINESS CENTER
Building 3 Fee 100% 1979 5.76 75,600 79%
Building 8 Fee 100% 1980 3.16 50,400 84%
</TABLE>
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<PAGE>
[CAPTION]
<TABLE>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- ---------- ------ ----------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
NASHVILLE, TENNESSEE
HAYWOOD OAKS TECHNECENTER
Building 2 Fee 100% 1988 2.94 50,400 100%
Building 3 Fee 100% 1988 2.94 52,800 100%
Building 4 Fee 100% 1988 5.23 46,800 94%
Building 5 Fee 100% 1988 5.23 61,171 94%
Building 6 Fee 100% 1989 10.53 113,400 100%
Building 7 Fee 100% 1995 8.24 66,873 100%
Greenbriar Fee 100% 1986 10.73 134,759 98%
Business Park
Keebler Building Fee 100% 1985 4.39 36,150 100%
MILWAUKEE, WISCONSIN
S.F. Music Box Fee 33.33% [9] 1993 8.90 153,600 100%
Building
ST. LOUIS, MISSOURI
I-70 Center Fee 100% 1986 4.57 76,240 85%
1920 Beltway Fee 100% 1986 4.44 70,000 100%
Interamerican Fee 100% 1996 21.24 403,200 71%
Alfa Laval Fee 100% 1996 12.76 129,500 100%
OFFICE
- ------
INDIANAPOLIS, INDIANA
PARK 100 BUSINESS PARK
Building 34 Fee 100% 1979 2.00 22,272 89%
Building 116 Fee 100% 1988 5.28 35,700 84%
Building 118 Fee 100% 1988 6.50 35,700 100%
Building 119 Fee 100% 1989 6.50 53,300 100%
CopyRite Bldg Fee 50% [3] 1992 3.88 48,000 100%
WOODFIELD AT THE CROSSING
Two Woodfield Fee 100% 1987 7.50 17,818 78%
Crossing
Three Woodfield Fee 100% 1989 13.30 259,777 94%
Crossing
PARKWOOD CROSSING
One Parkwood Fee 100% 1989 5.93 108,281 100%
Two Parkwood Fee 100% 1996 5.96 93,300 100%
SHADELAND STATION
7240 Shadeland Fee 66.67% [10] 1985 2.14 45,585 99%
Station
7330 Shadeland Fee 100% 1988 4.50 42,619 100%
Station
7340 Shadeland Fee 100% 1989 2.50 32,235 100%
Station
7351 Shadeland Fee 100% 1983 2.14 27,740 100%
Station
7369 Shadeland Fee 100% 1989 2.20 15,551 100%
Station
7400 Shadeland Fee 100% 1990 2.80 49,544 100%
Station
KEYSTONE AT THE CROSSING
F.C. Tucker Fee/Ground 100% 1978 N/A 4,840 100%
Building Lease [11]
3520 Commerce Ground/Bldg. 100% 1976 N/A 30,000 100%
Crossing Lease [12]
8465 Keystone Fee 100% 1983 1.31 28,298 93%
Community MOB Fee 100% 1995 4.00 39,205 100%
CARMEL, INDIANA
CARMEL MEDICAL CENTER
Building I Fee/Ground 100% 1985 N/A 40,060 77%
Lease [13]
Building II Fee/Ground 100% 1989 N/A 39,973 94%
Lease [13]
</TABLE>
-8-
<PAGE>
[CAPTION]
<TABLE>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- ---------- ------ ----------- ------ ----- --------
<S> <C> <C> <C> <C> <C> <C>
GREENWOOD, INDIANA
SOUTH PARK BUSINESS CENTER
Building 1 Fee 100% 1989 5.40 39,715 97%
Building 3 Fee 100% 1990 3.25 35,900 100%
St. Francis Fee/Ground 100% 1995 N/A 95,579 85%
Medical Building Lease [14]
CINCINNATI, OHIO
GOVERNOR'S HILL
8600 Governor's Fee 100% 1986 10.79 200,584 97%
Hill
8700 Governor's Fee 100% 1985 4.98 58,617 100%
Hill
8790 Governor's Fee 100% 1985 5.00 58,177 95%
Hill
8800 Governor's Fee 100% 1985 2.13 28,700 100%
Hill
GOVERNOR'S POINTE
4605 Governor's Fee 100% 1990 8.00 175,485 100%
Pointe
4705 Governor's Fee 100% 1988 7.50 140,984 100%
Pointe
4770 Governor's Fee 100% 1986 4.50 76,037 94%
Pointe
PARK 50 TECHNECENTER
SDRC Building Fee 100% 1991 13.00 221,215 100%
Building 17 Fee 100% 1985 8.19 70,644 97%
DOWNTOWN CINCINNATI
311 Elm Street Ground/Bldg. 100% 1902/1986 N/A 90,127 100%
Lease [15] [16]
312 Plum Street Fee 100% 1987 0.69 230,489 66%
312 Elm Street Fee 100% 1992 1.10 378,786 97%
KENWOOD
Kenwood Commons Fee 50% [17] 1986 2.09 46,145 100%
Building I
Kenwood Commons Fee 50% [17] 1986 2.09 46,434 96%
Building II
Ohio National Fee 100% 1996 9.00 212,125 98%
TRI-COUNTY
Triangle Office Fee 100% 1965/1985 15.64 172,650 82%
Park [18]
Tri-County Fee 100% 1971,1973, 11.27 102,166 82%
Office Park 1982 [19]
Executive Plaza I Fee 100% 1980 5.83 87,912 99%
Executive Plaza II Fee 100% 1981 5.02 88,885 100%
BLUE ASH
West Lake Center Fee 100% 1981 11.76 179,974 90%
Lake Forest Place Fee 100% 1985 13.50 217,264 94%
Huntington Bank Fee 100% 1986 0.94 3,235 100%
Building
OTHER OFFICE - CINCINNATI
Fidelity Drive Fee 100% 1972 8.34 38,000 100%
Building
Franciscan Fee/Ground 100% 1996 N/A 36,634 100%
Health System Lease[20]
COLUMBUS, OHIO
TUTTLE CROSSING
4600 Lakehurst Fee 100% 1990 7.66 106,300 100%
(Sterling 1)
4650 Lakehurst Fee 100% 1990 13.00 164,639 100%
(Litel)
5555 Parkcenter Fee 100% 1992 6.09 83,971 100%
(Xerox)
4700 Lakehurst Fee 100% 1994 3.86 49,600 100%
(Indiana Insurance)
Sterling 2 Fee 100% 1995 3.33 57,660 100%
John Alden Fee 100% 1995 6.51 101,112 100%
Cardinal Health Fee 100% 1995 10.95 132,854 100%
Nationwide Fee 100% 1996 17.90 315,102 100%
Sterling 3 Fee 100% 1996 3.56 64,500 100%
Metrocenter III Fee 100% 1983 5.91 73,757 100%
Veterans Fee 100% 1994 4.98 118,000 100%
Administration
Clinic
Scioto Corporate Fee 100% 1987 7.58 57,251 98%
Center
</TABLE>
-9-
<PAGE>
[CAPTION]
<TABLE>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq.ft.) 12/31/96
- --------- ---------- ------ ----------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
CLEVELAND, OHIO
Rock Run - North Fee 100% 1984 5.00 60,272 100%
Rock Run - Center Fee 100% 1985 5.00 61,174 100%
Rock Run - South Fee 100% 1986 5.00 63,107 100%
Freedom Square I Fee 100% 1980 2.59 39,622 100%
Freedom Square II Fee 100% 1987 7.41 115,156 100%
Corporate Plaza I Fee 100% 1989 6.10 112,951 100%
Corporate Plaza II Fee 100% 1991 4.90 103,638 100%
One Corporate Fee 100% 1989 5.30 87,739 95%
Exchange
Corporate Center I Fee 100% 1985 5.33 104,402 77%
Corporate Center II Fee 100% 1987 5.32 99,260 83%
Corporate Place Fee 100% 1988 4.50 84,768 90%
Corporate Circle Fee 100% 1983 6.65 120,444 98%
LIVONIA, MICHIGAN
SEVEN MILE CROSSING
38705 Seven Mile Fee/Ground 100% 1988 N/A 113,066 96%
Lease [21]
38701 Seven Mile Fee/Ground 100% 1989 N/A 132,153 99%
Lease [21]
ST. LOUIS, MISSOURI
Laumeier I Fee 100% 1987 4.29 113,852 97%
Laumeier II Fee 100% 1988 4.64 110,541 100%
Westview Place Fee 100% 1988 2.69 114,722 99%
Westmark Fee 100% 1987 6.95 123,889 100%
RETAIL
- ------
INDIANAPOLIS, INDIANA
PARK 100 BUSINESS PARK
Building 32 Fee 100% 1978 0.82 14,504 79%
Building 121 Fee 100% 1989 2.27 19,716 76%
CASTLETON CORNER
Michael's Plaza Fee 100% 1984 4.50 46,374 100%
Cub Plaza Fee 100% 1986 6.83 60,136 95%
FORT WAYNE, INDIANA
Coldwater Crossing Fee 100% 1990 35.38 246,365 88%
GREENWOOD, INDIANA
GREENWOOD CORNER
First Indiana Fee 100% 1988 1.00 2,400 100%
Bank Branch
Greenwood Corner Fee 100% 1986 7.45 50,840 46%
Shoppes
DAYTON, OHIO
Sugarcreek Plaza Fee 100% 1988 17.46 77,940 93%
CINCINNATI, OHIO
Governor's Plaza Fee 100% 1990 35.00 181,493 100%
King's Mall Fee 100% 1990 5.68 52,661 98%
Shopping Center I
King's Mall Fee 100% 1988 8.90 67,725 93%
Shopping Center II
Steinberg's Fee 100% 1993 1.90 21,008 100%
Park 50 Plaza Fee 100% 1989 2.20 18,000 43%
Kohl's Fee 100% 1994 12.00 80,684 100%
Sports Unlimited Fee 100% 1994 7.00 67,148 100%
Eastgate Square Fee 100% 1990/1996 11.60 94,182 100%
Office Max Fee 100% 1995 2.25 23,484 100%
Sofa Express - Fee 100% 1995 1.13 15,000 100%
Governor's Plaza
Bigg's Fee 100% 1996 14.00 157,791 100%
Supercenter
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Partner- Net Percent
ship's Year Land Rentable Occupied
Name/ Ownership Owner- Constructed/ Area Area at
Location Interest ship Expanded (Acres) (sq. ft.) 12/31/96
- --------- ---------- ------ ----------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
BLOOMINGTON, ILLINOIS
Lakewood Plaza Fee 100% 1987 11.23 87,010 92%
CHAMPAIGN, ILLINOIS
Market View Fee 100% 1985 8.50 86,553 90%
COLUMBUS, OHIO
Galyans Trading Fee 100% 1994 4.90 74,636 100%
Company
Tuttle Retail Fee 100% 1995/1996 13.44 144,244 100%
Center
</TABLE>
<TABLE>
<CAPTION>
UNDER CONSTRUCTION
- ------------------
Partner- Net Percent
ship's Expected Land Rentable Pre-leased
Ownership Owner- In-Service Area Area at
Interest ship Date (Acres) (sq.ft.) 12/31/96
----------- ------- ----------- ------ --------- --------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL
- ----------
INDIANAPOLIS, INDIANA
PARK FLETCHER BUSINESS PARK
Building 33 Fee 50% [1] Jan-97 7.50 112,000 36%
PARK 100 BUSINESS PARK
Building 131 Fee 100% May-97 21.00 404,900 100%
Building 96 Fee 100% Mar-97 8.40 183,950 100%
Expansion
NORTH AIRPORT PARK
Building 2 Fee 100% May-97 22.50 377,280 34%
LEBANON, INDIANA
LEBANON BUSINESS PARK
Purity Wholesale Fee 100% Jul-97 32.60 556,248 100%
Pamida Fee 100% May-97 14.90 200,000 100%
HEBRON, KENTUCKY
Skyport Building I Fee 100% May-97 15.10 316,800 0%
CLEVELAND, OHIO
Mr. Coffee Fee 100% Aug-97 35.00 458,000 100%
EARTH CITY, MISSOURI
Earth City Fee 100% Feb-97 14.70 244,800 0%
Building 52
NASHVILLE, TENNESSEE
HAYWOOD OAKS TECHNECENTER
Building 8 Fee 100% Sep-97 15.44 71,500 0%
OFFICE
- ------
INDIANAPOLIS, INDIANA
PARKWOOD CROSSING
Three Parkwood Fee 100% Jul-97 6.24 121,246 0%
RIVER ROAD
Software Fee 100% Jan-98 6.90 100,000 80%
Artistry
COLUMBUS, OHIO
TUTTLE CROSSING
Parkwood Place Fee 100% Jun-97 9.08 156,000 100%
CompManagement Fee 100% Oct-97 4.46 67,841 59%
CLEVELAND, OHIO
Freedom Square III Fee 100% Jul-97 2.00 71,025 0%
Landerbrook Fee 100% Nov-97 8.00 106,571 21%
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Partner- Net Percent
ship's Expected Land Rentable Pre-leased
Ownership Owner- In-Service Area Area at
Interest ship Date (Acres) (sq.ft.) 12/31/96
---------- ------ ----------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
RETAIL
- ------
CINCINNATI, OHIO
Fountain Place Fee 25% [22] Sep-97 1.98 232,301 90%
FLORENCE, KENTUCKY
Sofa Express Fee 100% Jul-97 1.78 20,250 100%
-------- ----------
2,133.05 31,202,862
======== ==========
</TABLE>
[1] These buildings are owned by a limited liability company in which
the Partnership is a 50.1% member. The Partnership shares in the profit
or loss from such buildings in accordance with the Partnership's ownership
interest. This limited liability company owns a 50% general partnership
interest in Park Fletcher Buildings 27 and 28 and shares in the profit or
loss from these buildings in accordance with the limited liability company's
interest.
[2] These buildings are owned by a partnership in which the Partnership is
a partner. The Partnership owns a 10% capital interest in the partnership
and receives a 50% interest in the residual cash flow after payment of a 9%
preferred return to the other partner on its capital interest.
[3] This building is owned in partnership with a tenant of the building.
The Partnership owns a 50% general partnership interest in the partnership.
The Partnership shares in the profit or loss from the building in accordance
with such ownership interest.
[4] This building was constructed in three phases; 1962, 1971 and 1974.
[5] This building was contributed to the limited liability company
referenced in footnote [1] in 1996.
[6] This building is owned by a partnership in which the Partnership owns
a 10% limited partnership interest. The Partnership shares in the cash flow
from the building in accordance with such ownership interest.
[7] This building is owned by a limited partnership in which the Partnership
has a 1% general partnership interest and a 39% limited partnership interest.
The Partnership shares in the profit or loss from such building in accordance
with the Partnership's ownership interest.
[8] This building was renovated in 1996.
[9] This building is owned by a partnership in which the Partnership owns
a 33.33% limited partnership interest. The Partnership shares in the profit
or loss from the building in accordance with such ownership interest.
[10] The Partnership owns a 66.67% general partnership interest in the
partnership owning this building. The Partnership shares in the profit or
loss of this building in accordance with such ownership interest.
[11] The Partnership owns the building and has a leasehold interest in the
land underlying this building with a lease term expiring October 31, 2067.
[12] The Partnership has a leasehold interest in this building with a lease
term expiring May 9, 2006.
[13] The Partnership owns these buildings and has a leasehold interest in the
land underlying these buildings, with the lease term expiring November 16,
2043.
[14] The Partnership owns this building and has a leasehold interest in the
land underlying this building with a lease term expiring August 2045, with
two 20-year options to renew.
[15] The Partnership has a leasehold interest in the building and the
underlying land with a lease term expiring March 31, 2020. The Partnership has
an option to purchase the fee interest in the property throughout the term of
the lease.
[16] This building was renovated in 1986.
[17] These buildings are owned by a partnership in which the Partnership has
a 50% general partnership interest. The Partnership shares in the profit or
loss from such buildings in accordance with such ownership interest.
[18] This building was renovated in 1985.
-12-
<PAGE>
[19] Tri-County Office Park consists of four buildings. One was built in
1971, two were built in 1973, and one was built in 1982.
[20] The Partnership owns this building and has a leasehold interest in the
land underlying this building with a lease term expiring June 2095.
[21] The Partnership owns these buildings and has a leasehold interest in
the land underlying these buildings with a lease term expiring May 31, 2057.
[22] These buildings are owned through a limited liability company in which
the partnership is a 25% member. The limited liability company will own a
57.5% interest in the Fountain Place retail project.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Partnership or any
subsidiary was a party or to which any of their property is subject
other than routine litigation incidental to the Partnership's business.
In the opinion of management, such litigation is not material to the
Partnership's business operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the year ended December 31, 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
There is no established public trading market for the Common Units. The
following table sets forth the cash distributions paid during each
quarter. Comparable cash distributions are expected in the future. As
of March 1, 1997, there were 159 record holders of Common Units.
On January 30, 1997, the Partnership declared a quarterly cash
distribution of $0.51 per Common Unit payable on February 28, 1997 to
Common Unitholders of record on February 14, 1997.
<TABLE>
<CAPTION>
1996 DISTRIBUTIONS 1995 DISTRIBUTIONS
------------------- -------------------
<S> <C> <C>
QUARTER ENDED
-------------
December 31 $ .51 $ .49
September 30 .51 .49
June 30 .49 .47
March 31 .49 .47
</TABLE>
-13-
<PAGE>
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following sets forth selected consolidated financial and operating
information on a historical basis for the Partnership for each of the
years in the five-year period ended December 31, 1996. The following
information should be read in conjunction with Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" for the Partnership and Item 8, the "Financial Statements
and Supplementary Data" included in this Form 10-K. The historical
operating data for the years ended December 31, 1996, 1995, 1994 and
1993 has been derived from the historical financial statements of the
Partnership and the Predecessor Company. The historical operating data
for the year ended December 31, 1992 has been derived from the
historical financial statements of the Predecessor Company.
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Results of Operations:
Revenues:
Rental Operations $ 162,160 $ 113,641 $ 89,299 $ 33,648 $ 17,675
Service Operations 19,929 17,777 18,473 5,654 -
-------- -------- ------- -------- -------
Total Revenues $ 182,089 $ 131,418 $107,772 $ 39,302 $ 17,675
======== ======== ======== ======== ========
Net Income (Loss)
Available to Common
Units $ 58,713 $ 41,600 $ 32,968 $ 6,670 $ (653)
======== ======== ======== ======== =========
Per Unit Data (1):
Net Income (Loss)
per Common Unit $ 1.84 $ 1.55 $ 1.54 $ 1.02 $ (.32)
Distributions per
Common Unit 2.00 1.92 1.84 1.68 1.68
Weighted Average
Common Units
Outstanding 31,980 26,791 21,467 6,540 2,045
Balance Sheet Data:
Total Assets $1,362,399 $1,046,532 $775,884 $633,885 $121,881
Total Debt $ 525,815 $ 454,820 $298,640 $248,433 $ 80,707
Total Preferred
Partners' Equity $ 72,856 - - - -
Total Partners'
Equity $ 769,269 $ 540,221 $447,298 $349,695 $ 36,129
Total Common Units
Outstanding at
end of year (1) 33,182 28,303 24,384 20,478 2,045
Other Data:
Funds From
Operations (2) $ 87,434 $ 64,846 $ 47,907 $ 13,474 $ 3,764
Cash Flow Provided
by (Used by):
Operating activities $ 95,470 $ 78,637 $ 51,856 $ 14,363 $ 5,453
Investing activities (277,009) (289,569) (116,227) (315,025) (710)
Financing activities 181,203 176,187 94,733 310,717 (4,952)
</TABLE>
(1)Information for 1993 and 1992 has been adjusted for the 1 for 4.2
reverse stock split of the Predecessor Company effected prior
to the completion of the 1993 reorganization.
(2)Funds From Operations, is defined by the National Association of
Real Estate Investment Trusts as net income or loss excluding
gains or losses from debt restructuring and sales of property
plus depreciation and amortization, and after adjustments for
minority interest, unconsolidated partnerships and joint ventures
(adjustments for minority interests, unconsolidated partnerships
and joint ventures are calculated to reflect Funds From Operations
on the same basis). Funds From Operations does not represent
cash flow from operations as defined by generally accepted accounting
principles, should not be considered as an alternative to net
income as an indicator of the Partnership's operating performance,
and is not indicative of cash available to fund all cash flow
needs. In March 1995, NAREIT issued a clarification of its
definition of FFO effective for years beginning after December
31, 1995. The clarification provides that amortization of deferred
financing costs and depreciation of non-rental real estate assets are
no longer to be added back to net income in arriving at FFO. The
Partnership adopted these changes effective January 1, 1996, and
the calculations of FFO for the years ended December 31, 1995,
1994, 1993 and 1992 have been revised accordingly.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
--------
The Partnership's operating results depend primarily upon income from
the rental operations of its industrial, office and retail properties
located in its primary
- 14 -
<PAGE>
markets. This income from rental operations is substantially influenced
by the supply and demand for the Partnership's rental space in its
primary markets. In addition, the Partnership's continued growth is
dependent upon its ability to maintain occupancy rates and increase
rental rates on its in-service portfolio and to continue development and
acquisition of additional rental properties.
The Partnership's primary markets in the Midwest have continued to
offer strong and stable local economies and have provided attractive
new development opportunities because of their central location,
established manufacturing base, skilled work force and moderate labor
costs. Consequently, the Partnership's occupancy rate of its in-
service portfolio has exceeded 92.0% the last two years and was 95.0%
at December 31, 1996. The Partnership expects to maintain its
overall occupancy at comparable levels and also expects to increase
rental rates as leases are renewed or new leases are executed. This
stable occupancy as well as increasing rental rates should improve
the Partnership's results of operations from its in-service
properties. The Partnership's strategy for continued growth also
includes developing and acquiring additional rental properties in its
primary markets and expanding into other attractive Midwestern
markets.
A new statistic that the Partnership started tracking in 1996 is Same
Property Performance which compares those properties that were fully
in-service for all of 1995 and 1996. Because of the rapid growth of
the Partnership, this population of properties only represented about
42.2% of the in-service portfolio at year end. As a result of the
loss of a 90,000 square foot downtown Cincinnati office tenant in
1996, along with the effects of a property tax reassessment in
another downtown Cincinnati property, Same Property FFO increased
only 1.1%. Without the decrease in the downtown Cincinnati portfolio,
Same Property FFO increase for this portfolio would have been 2.7%.
The following table sets forth information regarding the
Partnership's in-service portfolio of rental properties as of
December 31, 1996 and 1995 (square feet in thousands):
<TABLE>
<CAPTION>
Total Percent of
Square Feet Total Square Feet Percent Occupied
--------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Type 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ----
INDUSTRIAL
Service
Centers 3,151 2,802 11.5% 14.0% 94.0% 94.7%
Bulk 15,173 10,890 55.4% 54.3% 95.1% 96.5%
OFFICE
Suburban 6,319 3,874 23.1% 19.3% 96.6% 94.7%
CBD 699 699 2.5% 3.5% 87.1% 92.3%
Medical 370 332 1.3% 1.6% 92.8% 90.3%
RETAIL 1,690 1,476 6.2% 7.3% 93.7% 93.8%
------ ------ ----- -----
Total 27,402 20,073 100.0% 100.0% 95.0% 95.4%
====== ====== ===== =====
</TABLE>
Management expects occupancy of the in-service property portfolio to
remain stable because (i) only 10.7% and 12.3% of the Partnership's
occupied square footage is subject to leases expiring in 1997 and
1998, respectively, and (ii) the Partnership's renewal percentage
averaged 80%, 65% and 73% in 1996, 1995 and 1994, respectively.
- 15 -
<PAGE>
The following table reflects the Partnership's in-service lease
expiration schedule as of December 31, 1996, by product type
indicating square footage and annualized net effective rents under
expiring leases (in thousands, except per square foot amounts):
<TABLE>
<CAPTION>
Industrial Office Retail Total
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Yr. of Square Square Square Square
Exp. Feet Rent Feet Rent Feet Rent Feet Rent
------ ------- ------ ------ ------ -------- ------ ------ ------
1997 2,003 $ 8,163 713 $ 7,357 73 $ 744 2,789 $ 16,264
1998 2,303 8,628 777 8,382 110 1,168 3,190 18,178
1999 2,254 9,798 919 9,936 116 1,180 3,289 20,914
2000 2,119 8,451 809 9,831 103 1,262 3,031 19,544
2001 2,496 9,869 855 9,393 115 1,299 3,466 20,561
2002 443 2,076 731 7,771 110 1,063 1,284 10,910
2003 292 1,766 243 2,773 39 364 574 4,903
2004 923 3,759 97 1,143 13 125 1,033 5,027
2005 1,440 4,552 540 6,356 177 1,505 2,157 12,413
2006 1,854 5,952 344 4,258 5 66 2,203 10,276
There-
after 1,263 4,141 1,030 13,439 722 6,120 3,015 23,700
------ ------ ------ ------ ----- ------ ------ -------
Total
Leased 17,390 $67,155 7,058 $80,639 1,583 $14,896 26,031 $162,690
====== ====== ===== ====== ===== ====== ====== =======
Total
Port-
folio 18,324 7,388 1,690 27,402
====== ===== ===== ======
Annualized net
effective rent
per square foot
leased $ 3.86 $ 11.43 $ 9.41 $ 6.25
======= ====== ===== ======
</TABLE>
This stable occupancy, along with increasing rental rates in each of
the Partnership's markets, will allow the in-service portfolio to
continue to provide a comparable or increasing level of earnings from
rental operations. The Partnership also expects to realize growth in
earnings from rental operations through (i) the development and
acquisition of additional rental properties in its primary markets;
(ii) the expansion into other attractive Midwestern markets; and
(iii) the completion of the 3.8 million square feet of properties
under development at December 31, 1996 over the next five quarters.
The 3.8 million square feet of properties under development should
provide future earnings from rental operations growth for the
Partnership as they are placed in service as follows (in thousands,
except percentages):
<TABLE>
<CAPTION>
Anticipated Estimated Anticipated
In-Service Square Percent Project Stabilized
Date Feet Pre-Leased Costs Return
---------------- ------- ---------- --------- -----------
<S> <C> <C> <C> <C>
1st Quarter 1997 762 58% $ 21,309 11.6%
2nd Quarter 1997 1,234 54% 39,976 11.6%
3rd Quarter 1997 1,531 81% 50,827 11.1%
4th Quarter 1997
and thereafter 274 52% 28,240 12.3%
----- -------
3,801 66% $140,352 11.6%
===== =======
</TABLE>
-16-
<PAGE>
RESULTS OF OPERATIONS
---------------------
A summary of the Partnership's operating results and property
statistics for each of the years in the three-year period ended
December 31, 1996 is as follows (in thousands, except number of
properties and per Common Unit amounts):
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Rental Operations revenue $162,160 $113,641 $89,299
Service Operations revenue 19,929 17,777 18,473
Earnings from Rental Operations 54,158 37,206 26,929
Earnings from Service Operations 6,436 6,564 7,075
Operating income 56,541 40,526 30,743
Net income available for common
units $ 58,713 $ 41,600 $32,968
Weighted average common units
outstanding 31,980 26,791 21,467
Net income per common unit $ 1.84 $ 1.55 $ 1.54
Number of in-service properties
at end of year 249 201 127
In-service square footage at
end of year 27,402 20,073 12,896
Under development square footage
at end of year 3,801 3,448 2,362
</TABLE>
COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------
Rental Operations
-----------------
The Partnership increased its in-service portfolio of rental
properties from 201 properties comprising 20.1 million square feet at
December 31, 1995 to 249 properties comprising 27.4 million square
feet at December 31, 1996 through the acquisition of 34 properties
totaling 3.4 million square feet and the placement in service of 16
properties and four building expansions totaling 4.1 million square
feet developed by the Partnership.
The Partnership also disposed of two properties totaling 182,000
square feet. These 48 net additional rental properties primarily
account for the $48.5 million increase in revenues from Rental
Operations from 1995 to 1996. The increase from 1995 to 1996 in
rental expenses, real estate taxes and depreciation and amortization
expense is also a result of the additional 48 in-service rental
properties.
Interest expense increased by approximately $9.8 million. This
increase was primarily because of interest expense on the $150.0
million of unsecured notes which the Partnership issued in September
1995. These notes bear interest at an effective rate of 7.46% and
were outstanding a full year in 1996 as compared to approximately
three months in 1995. The Partnership also issued $90.0 million of
unsecured debt under its medium-term note program in 1996 which bears
interest at a weighted average rate of 7.20%. The proceeds from these
debt issuances were used to fund development and acquisition of
additional rental properties during 1995 and 1996.
As a result of the above mentioned items, earnings from rental
operations increased $17.0 million from $37.2 million for the year
ended December 31, 1995 to $54.2 million for the year ended December
31, 1996.
Service Operations
------------------
Service Operations revenues increased from $17.8 million to $19.9
million for the year ended December 31, 1996 as compared to the year
ended December 31, 1995 primarily as a result of increases in
construction management fee revenue because of an increase in
construction volume. Service Operations
-17-
<PAGE>
expenses increased from $11.2 million to $13.5 million for the year
ended December 31, 1996 as compared to the year ended December 31,
1995 primarily as a result of an increase in operating expenses
resulting from the overall growth of the Partnership and the
additional regional offices opened in 1995 and 1996.
As a result of the above-mentioned items, earnings from Service
Operations decreased from $6.6 million to $6.4 million for the years
ended December 31, 1995 and 1996, respectively.
General and Administrative Expense
---------------------------------
General and administrative expense increased from $3.2 million for
the year ended December 31, 1995 to $4.1 million for the year ended
December 31, 1996 primarily as a result of increased state and local
taxes due to the growth in revenues and net income of the
Partnership. Property advertising expense as well as other
administrative expenses also increased as a result of the expanding
size of the Partnership.
Other Income (Expense)
---------------------
Interest income decreased from $1.7 million for the year ended
December 31, 1995 to $1.2 million for the year ended December 31,
1996 as a result of the temporary short-term investment of a greater
amount of excess proceeds from the 1995 debt and equity offerings
compared to excess proceeds invested from the 1996 debt and equity
offerings.
During the year ended December 31, 1996, the Partnership sold a
251,000 square foot corporate headquarters facility to John Alden
Life Insurance Company in Miami, Florida pursuant to a purchase
option contained in John Alden's original agreement to lease the
building. The project was sold for approximately $32.9 million and
the Partnership recognized a gain of approximately $1.6 million on
the sale. The Partnership also realized gains totaling $2.9 million
in 1996 related to the sale of a retail center and several parcels of
land.
Net Income Available for Common Units
------------------------------------
Net income available for common units for the year ended December 31,
1996 was $58.7 million compared to net income available for common
units of $41.6 million for the year ended December 31, 1995. This
increase results primarily from the changes in the operating results
of rental and service operations explained above.
COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994
--------------------------------------------------------------------------
Rental Operations
-----------------
The Partnership increased its in-service portfolio of rental
properties from 127 properties comprising 12.9 million square feet at
December 31, 1994 to 201 properties comprising 20.1 million square
feet at December 31, 1995 through the acquisition of 60 properties
totaling 4.6 million square feet and the placement in service of 17
properties and two building expansions totaling 3.2 million square
feet developed by the Partnership. The Partnership also disposed of
three properties totaling 570,000 square feet. These 74 net
additional rental properties primarily account for the $24.3 million
increase in revenues from Rental Operations from 1994 to 1995.
The increase from 1994 to 1995 in rental expenses, real estate taxes
and depreciation and amortization expense is also a result of the
additional 74 in-service rental properties.
-18-
<PAGE>
Interest expense increased by approximately $2.6 million. This
increase was primarily because of interest expense on the $150.0
million of unsecured notes which the Partnership issued in September
1995. These notes bear interest at an effective rate of 7.46%. The
proceeds from these notes were used to (i) retire the outstanding
balance of $35.0 million on the Partnership's unsecured line of
credit; (ii) retire $39.5 million of mortgage debt which had a
weighted average interest rate of 6.08% and was scheduled to reset at
a market interest rate in the fourth quarter of 1995; and (iii) fund
development and acquisition of additional rental properties during
the fourth quarter of 1995.
As a result of the above mentioned items, earnings from rental
operations increased $10.3 million from $26.9 million for the year
ended December 31, 1994 to $37.2 million for the year ended December
31, 1995.
Service Operations
-----------------
Earnings from Service Operations decreased by approximately $500,000
in 1995 as compared to 1994. This decrease results primarily from a
decrease in construction fees even though total construction volume
remained consistent. This decrease in fees resulted from certain
contracts with above-market fees in 1994 which were not obtained in
1995. Property management, maintenance and leasing fees remained
consistent from 1994 to 1995. Payroll expense decreased from 1994 to
1995 as a result of the allocation of a greater portion of these
costs to the Partnership's Rental Operations segment. Other operating
expenses did not change materially.
Other Income (Expense)
---------------------
Interest income increased from $1.1 million for the year ended
December 31, 1994 to $1.7 million for the year ended December 31,
1995 as a result of the temporary short-term investment of excess
proceeds from the 1995 debt and equity offerings.
As part of its October 1993 acquisition of Duke Associates, the
Partnership acquired an option to purchase an interest in an entity
which provided telecommunication services to tenants in properties
owned and managed by the Partnership. At the time the option was
acquired, the option was not considered to have value because of
recurring net operating losses by such entity. Subsequent to the
acquisition of the option, the entity made changes in its operations,
principally entering into new contracts for the purchase of
telecommunication services and the provision of billing services,
which significantly improved its operating results. As a result of
these improvements in operating results, the entity entered into an
agreement to sell its telecommunications business to an unaffiliated
third party at an amount significantly in excess of the Partnership's
option price. The net proceeds from the sale were then loaned to a
subsidiary of the Partnership with a mortgage on certain property.
The Partnership subsequently exercised its option to acquire the
interest in this entity and recognized a gain of approximately $2.0
million based on the difference between its option price and the net
proceeds received from the sale to the unaffiliated third-party. Such
gain is included in earnings from property sales in 1994.
Net Income Available for Common Units
-------------------------------------
Net income available for common units for the year ended December 31,
1995 was $41.6 million compared to net income available for common
units of $33.0 million for the year ended December 31, 1994. This
increase results primarily from the changes in the operating results
of rental and service operations explained above.
-19-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaling $95.5 million,
$78.6 million and $51.9 million for the years ended December 31,
1996, 1995 and 1994, respectively, represents the primary source of
liquidity to fund distributions to unitholders and minority interests
and to fund recurring costs associated with the renovation and re-
letting of the Partnership's properties. The primary reason for the
increases in net cash provided by operating activities is, as
discussed above under "Results of Operations," the increase in net
income each year resulting from the expansion of the in-service
portfolio through development and acquisitions of additional rental
properties.
Net cash used by investing activities totaling $277.0 million, $289.6
million and $116.2 million for the years ended December 31, 1996,
1995 and 1994, respectively, represents the investment of funds by
the Partnership to expand its portfolio of rental properties through
the development and acquisition of additional rental properties. In
1996, $328.4 million was invested in the development and acquisition
of additional rental properties and land held for development and
$9.9 million was used for recurring building and tenant improvements
and leasing costs. Included in the $328.4 million of development and
acquisition of rental properties and land held for development for
the year ended December 31, 1996 is $44.5 million related to the
acquisition of eight suburban office buildings totaling 782,000 gross
square feet in Cleveland, Ohio. The purchase price of these eight
buildings was approximately $76.0 million which included the
assumption of $23.1 million of mortgage debt and the issuance of $8.4
million of Common Units. Also in 1996, the Partnership sold two
properties and several parcels of land and received $50.8 million of
net sales proceeds. These proceeds were used to fund a portion of the
1996 development and acquisition activity. In 1995, $250.3 million
was invested in the development and acquisition of additional rental
properties and land held for development and $8.6 million was used
for recurring building and tenant improvements and leasing costs. In
1994, $106.9 million was invested in the development and acquisition
of additional rental properties and land held for development and
$5.9 million was used for recurring building and tenant improvements
and leasing costs.
Net cash provided by financing activities totaling $181.2 million,
$176.2 million and $94.7 million for the years ended December 31,
1996, 1995 and 1994, respectively, is comprised of debt and equity
issuances, net of distributions to unitholders and minority interests
and repayments of outstanding indebtedness. In March 1996, the
Partnership received $125.3 million of net proceeds from the General
Partner's common stock offering which was used to pay down amounts
outstanding on the unsecured line of credit. During 1996, the
Partnership also received $5.5 million of net proceeds from the
issuance of common stock under the General Partner's Direct Stock
Purchase and Dividend Reinvestment Plan. The Partnership used these
net proceeds to fund the development and acquisition of additional
rental properties. In August 1996, the Partnership received $72.3
million of net proceeds from the General Partner's preferred stock
offering. In July 1996, the Partnership issued $40.0 million of
unsecured debt under its medium-term note program. These notes mature
in July 2000 and bear interest at 7.28%. In November 1996, the
Partnership issued $50.0 million of unsecured debt under its medium-
term note program. These notes mature in November 2004 and bear
interest at 7.14%. The Partnership used the net proceeds from the
preferred offering and the two medium-term note offerings to pay off
approximately $82.5 million of existing secured debt which was
scheduled to mature in the fourth quarter of 1996 or early 1997 and
the remainder to fund the development and acquisition of additional
rental properties. In 1995, the Partnership received $96.3 million of
net proceeds from the General Partner's common stock offering and
used the proceeds to fund development and acquisition of additional
rental properties. In 1995, the Partnership also received $150.0
million from an unsecured debt offering and used the proceeds to
retire outstanding mortgage indebtedness and to fund acquisition and
development of additional rental properties. In 1994, the Partnership
received $92.1 million of net proceeds from the General Partner's
common stock offering and
-20-
<PAGE>
$60.0 million from a seven-year mortgage loan. Of the $152.1 million
of these proceeds, the Partnership used $16.1 million to retire
outstanding mortgage indebtedness, and the remainder primarily to
fund development and acquisition of additional rental properties.
The recurring capital needs of the Partnership are funded primarily
through the undistributed net cash provided by operating activities.
An analysis of the Partnership's recurring capital expenditures is as
follows (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
------ ------- ------
<S> <C> <C> <C>
Tenant improvements $6,048 $4,312 $3,056
Leasing costs 3,032 3,519 2,407
Building improvements 780 757 474
----- ----- -----
Total $9,860 $8,588 $5,937
===== ===== =====
</TABLE>
The Partnership has a $150.0 million unsecured line of credit
available to fund the development and acquisition of additional
rental properties and to provide working capital as needed. This line
of credit matures in April 1998 and bears interest at the 30-day
London Interbank Offered Rate ("LIBOR") plus 1.25%. Borrowings of
$24.0 million under this line of credit as of December 31, 1996 bear
interest at an effective rate of 6.9375%. The Partnership also has a
demand $10.0 million secured line of credit which is available to
provide working capital. This facility bears interest payable monthly
at the 30-day LIBOR rate plus .75%. Borrowings of $10.0 million are
outstanding on this line of credit at December 31, 1996 and bear
interest at an effective rate of 6.23%. The current 30-day LIBOR rate
as of March 3, 1997 is 5.4375%.
The General Partner and the Partnership currently have on file two
Form S-3 Registration Statements with the Securities and Exchange
Commission (the "Shelf Registrations") which have remaining
availability as of December 31, 1996 of $470.0 million to issue
additional common stock, preferred stock or unsecured debt
securities. The General Partner and the Partnership intend to issue
additional securities under such Shelf Registrations to fund the
development and acquisition of additional rental properties.
The total debt outstanding at December 31, 1996 consists of notes
totaling $525.8 million with a weighted average interest rate of
7.55% maturing at various dates through 2017. The Partnership has
$264.0 million of unsecured debt and $261.8 million of secured debt
outstanding at December 31, 1996. Scheduled principal amortization of
such debt totaled $2.1 million for the year ended December 31, 1996.
A summary of the scheduled future amortization and maturities of the
Partnership's indebtedness is as follows (in thousands):
<TABLE>
<CAPTION>
Repayments
------------------------------------- Weighted Average
Scheduled Interest Rate of
Year Amortization Maturities Total Future Repayments
---- ------------ ---------- -------- -----------------
<S> <C> <C> <C> <C>
1997 $ 3,388 $ 10,000 $ 13,388 6.72%
1998 4,410 70,590 75,000 7.07%
1999 5,146 28,470 33,616 6.17%
2000 3,227 44,853 48,080 7.38%
2001 2,930 59,954 62,884 8.72%
2002 3,189 50,000 53,189 7.36%
2003 902 68,216 69,118 8.48%
2004 978 50,000 50,978 7.15%
2005 1,064 100,000 101,064 7.48%
2006 1,160 - 1,160 7.46%
Thereafter 17,338 - 17,338 7.61%
------- ------- -------
Total $43,732 $482,083 $525,815 7.55%
====== ======= =======
</TABLE>
The $10.0 million of maturities in 1997 represents the outstanding
balance as of December 31, 1996 on the Partnership's demand secured
line of credit.
-21-
<PAGE>
The Partnership intends to pay regular quarterly distributions from
net cash provided by operating activities. A quarterly distribution
of $.51 per common unit was declared on January 30, 1997 which
represents an annualized distribution of $2.04 per common unit.
FUNDS FROM OPERATIONS
Management believes that Funds From Operations ("FFO"), which is
defined by the National Association of Real Estate Investment Trusts
as net income or loss excluding gains or losses from debt
restructuring and sales of property plus depreciation and
amortization, and after adjustments for minority interest,
unconsolidated partnerships and joint ventures (adjustments for
minority interest, unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis), is the industry
standard for reporting the operations of real estate investment
trusts.
The following reflects the calculation of the Partnership's FFO for
the years ended December 31 (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
------- -------- --------
<S> <C> <C> <C>
Net income available for
common units $ 58,713 $ 41,600 $ 32,968
Add back:
Depreciation and
amortization 31,363 23,118 16,785
Share of joint venture
depreciation and amortization 1,890 411 352
Earnings from property sales (4,532) (283) (2,198)
------- ------- --------
FUNDS FROM OPERATIONS $ 87,434 $ 64,846 $ 47,907
======= ======= =======
CASH FLOW PROVIDED BY (USED BY):
Operating activities $ 95,470 $ 78,637 $ 51,856
Investing activities (277,009) (289,569) (116,227)
Financing activities 181,203 176,187 94,733
</TABLE>
The increase in FFO for the three-year period results primarily from
the increased in-service rental property portfolio as discussed above
under "Results of Operations."
In March 1995, NAREIT issued a clarification of its definition of FFO
effective for years beginning after December 31, 1995. The
clarification provides that amortization of deferred financing costs
and depreciation of non-rental real estate assets are no longer to be
added back to net income in arriving at FFO. The Partnership adopted
these changes effective January 1, 1996, and the calculations of FFO
for the years ended December 31, 1995 and 1994 have been revised
accordingly.
While management believes that FFO is the most relevant and widely
used measure of the Partnership's operating performance, such amount
does not represent cash flow from operations as defined by generally
accepted accounting principles, should not be considered as an
alternative to net income as an indicator of the Partnership's
operating performance, and is not indicative of cash available to
fund all cash flow needs.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are included under Item
14 of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
-22-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership does not have any directors or officers. The
information required by this Item for Directors and certain Executive
Officers of the General Partner will be contained in a definitive proxy
statement of Duke Realty Investments, Inc. which the Registrant
anticipates will be filed no later than March 24, 1997, which proxy
statement is incorporated herein by reference, and thus this part has
been omitted in accordance with General Instruction G(3) to Form 10-K.
The following information is provided regarding the executive officers
of the General Partner who do not serve as Directors of the General
Partner:
GARY A. BURK
Age 45, President of Construction Services and Executive Vice
President of Duke Services, Inc. - Mr. Burk joined the Partnership in
1979, and has been responsible for the Partnership's construction
management operations since 1986.
WILLIAM J. DEBOER
Age 41, Vice President of Construction Services - Mr. DeBoer joined
the Partnership in 1983. Prior to that time, Mr. DeBoer was with
Tousley Bixler Construction, an Indianapolis general contractor.
ROSS C. FARRO
Age 53, Vice President, Cleveland Group - Mr. Farro joined the
Partnership in January 1996 and is responsible for the Cleveland
activities of the Partnership. Prior to joining the Partnership, Mr.
Farro was an independent real estate developer and operator.
ROBERT D. FESSLER
Age 39, Vice President, Ohio Industrial Group - Mr. Fessler joined the
Partnership in 1987 and is responsible for the Cincinnati industrial
activities of the Partnership. Prior to joining the Partnership, Mr.
Fessler was a leasing representative with Trammel Crow.
JOHN R. GASKIN
Age 35, Vice President, General Counsel and Secretary - Mr. Gaskin
joined the Partnership in 1990. Prior to joining the Partnership, Mr.
Gaskin worked as an associate attorney in a mid-size Indianapolis,
Indiana law firm.
JAMES W. GRAY
Age 36, Vice President, Cincinnati Office Group - Mr. Gray joined the
Partnership in 1989 and has been responsible for the Partnership's
Cincinnati office activities since 1994. Prior to that time, Mr. Gray
was Vice President and General Counsel of Brian Properties, Inc., a
Chicago area commercial real estate developer.
RICHARD W. HORN
Age 39, Vice President of Acquisitions - Mr. Horn joined the
Partnership in 1984. Mr. Horn is responsible for the acquisition
activities of the Partnership and oversees the Nashville and Michigan
operations of the Partnership.
-23-
<PAGE>
DONALD J. HUNTER
Age 37, Vice President, Columbus Group - Mr. Hunter joined the
Partnership in 1989 and is responsible for the Columbus activities of
the Partnership. Prior to joining the Partnership, Mr. Hunter was with
Cushman and Wakefield, a national real estate firm.
STEVEN R. KENNEDY
Age 40, Vice President of Construction Services - Mr. Kennedy joined
the Partnership in 1986. Prior to that time, Mr. Kennedy was a Project
Manager for Charles Pankow Builders, Inc.
WAYNE H. LINGAFELTER
Age 37, Vice President, Indiana Office Group - Mr. Lingafelter joined
the Partnership in 1987 and is responsible for the Indiana office
activities of the Partnership. Prior to that time, Mr. Lingafelter was
with the management consulting firm of DRI, Inc.
WILLIAM E. LINVILLE, III
Age 42, Vice President, Industrial Group - Mr. Linville joined the
Partnership in 1987 and is responsible for all industrial activities
of the Partnership. Prior to that time, Mr. Linville was Vice
President and Regional Manager of the CB Commercial Brokerage Office
in Indianapolis.
DAVID R. MENNEL
Age 42, General Manager of Services Operations and President and
Treasurer of Duke Services, Inc.- Mr. Mennel was with the accounting
firm of Peat, Marwick, Mitchell & Co. and the property development
firm of Melvin Simon & Associates before joining the Partnership in
1978.
MICHAEL L. MYRVOLD
Age 41, Vice President, Retail Group - Mr. Myrvold joined the
Partnership in 1995 and is responsible for retail activities of the
Partnership. Prior to joining the Partnership, Mr. Myrvold was Vice
President of Real Estate of the Melville Realty Co., Inc.
JOHN M. NEMECEK
Age 41, President of Asset / Property Management - Mr. Nemecek joined
the Partnership in 1994. Prior to joining the Partnership, Mr. Nemecek
was the Senior Vice President/Florida Division of Compass Real Estate.
DENNIS D. OKLAK
Age 43, Vice President and Treasurer - Mr. Oklak joined the
Partnership in 1986 and has served as Tax Manager and Controller of
Development. Prior to joining the Partnership, Mr. Oklak was a Senior
Manager with the public accounting firm of Deloitte Haskins + Sells.
JEFFREY G. TULLOCH
Age 52, Vice President and General Manager, Cincinnati Group - Mr.
Tulloch joined the Partnership in 1995 and is responsible for all
Cincinnati activities of the Partnership. Mr. Tulloch was Senior Vice
President of the Galbreath Company before joining the Partnership.
-24-
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the officers and directors of the General Partner, and persons
who own more than 10% of the Limited Partner Units, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Such officers, directors and greater than 10% Limited
Partner Unitholders are required by Securities and Exchange Commission
regulations to furnish the Partnership with copies of all Section 16(a)
forms they file. To date, there have been no delinquencies in filing
such reports.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 with respect to officers and
directors of the General Partner will be contained in a definitive
proxy statement for Duke Realty Investments, Inc. which the Registrant
anticipates will be filed no later than March 24, 1997, which proxy
statement is incorporated herein by reference, and thus this part has
been omitted in accordance with General Instruction G(3) to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Partnership had 3,309,758 Limited Partner Units which were
outstanding as of the close of business on March 7, 1997.
The following table shows, as of March 7, 1997, the number and
percentage of Limited Partner Units held by each person known to the
Company who beneficially owned more than five percent of outstanding
Limited Partner Units. Except as otherwise noted, all Limited Partner
Units are held with sole power to vote and sole power of disposition.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
Beneficial Owner of Beneficial Ownership Limited Partner Units
------------------ ----------------------- ---------------------
<S> <C> <C>
Thomas L. Hefner 1,350,811 (1) 40.81%
Darell E. Zink, Jr. 1,341,815 (1) 40.54%
Daniel C. Staton 1,260,547 (1) 38.09%
John W. Wynne 1,166,401 (1) 35.24%
David R. Mennel 1,139,319 (2) 34.42%
Gary A. Burk 1,138,947 (3) 34.41%
Ross C. Farro 170,784 5.16%
DMI Partnership 1,061,058 32.06%
</TABLE>
(1) Includes 1,061,058 Limited Partner Units owned by DMI Partnership,
a partnership in which each of these individuals owns a 20.71% beneficial
interest.
(2) Includes 1,061,058 Limited Partner Units owned by DMI Partnership,
a partnership in which Mr. Mennel owns a 7.50% beneficial interest.
(3) Includes 1,061,058 Limited Partner Units owned by DMI Partnership,
a partnership in which Mr. Burk owns a 7.51% beneficial interest.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 with respect to officers and
directors of the General Partner will be contained in a definitive
proxy statement for Duke Realty Investments, Inc. which the Registrant
anticipates will be filed no later than March 24, 1997, which proxy
statement is incorporated herein by reference, and thus this part has
been omitted in accordance with General Instruction G(3) to Form 10-K.
-25-
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(A) DOCUMENTS FILED AS PART OF THIS REPORT.
1. CONSOLIDATED FINANCIAL STATEMENTS:
Index
-----
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1996 and 1995
Consolidated Statements of Operations, Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows, Years Ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Partners' Equity,
Years Ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Index
-----
Schedule III - Real Estate and Accumulated Depreciation
EDGAR Financial Data Schedule
-----------------------------
Exhibit 27 - Financial Data Schedule for year ended December 31,
1996 (EDGAR filing only)
Other schedules are omitted for the reasons that they are not
required, are not applicable, or the required information is set
forth in the financial statements or notes thereto.
-26-
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
Duke Realty Limited Partnership:
We have audited the consolidated financial statements of Duke Realty
Limited Partnership and Subsidiaries as listed in the accompanying
index. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule as
listed in the accompanying index. These consolidated financial
statements and the financial statement schedule are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on the consolidated financial statements
and the financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Duke Realty Limited Partnership and Subsidiaries as of
December 31, 1996 and 1995, and the results of their operations and
their cash flows for each of the years in the three-year period
ended December 31, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Indianapolis, Indiana
January 29, 1997
-27-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
December 31,
-----------------------------
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
------
Real estate investments:
Land and improvements $ 140,391 $ 91,550
Buildings and tenant improvements 1,041,040 712,614
Construction in progress 44,060 96,698
Land held for development 65,185 62,637
--------- ---------
1,290,676 963,499
Accumulated depreciation (82,207) (56,335)
--------- --------
Net real estate investments 1,208,469 907,164
Cash 5,346 5,682
Accounts receivable, net of allowance
of $709 and $624 5,255 5,184
Accrued straight-line rents, net of
allowance of $841 10,956 8,101
Receivables on construction contracts 12,859 9,462
Investments in unconsolidated companies 79,362 67,771
Deferred financing costs, net of
accumulated amortization of $3,529
and $2,072 8,127 8,141
Deferred leasing and other costs, net
of accumulated amortization
of $8,239 and $4,959 24,293 20,609
Escrow deposits and other assets 7,732 14,418
--------- ---------
$1,362,399 $1,046,532
========= =========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Indebtedness:
Secured debt $ 261,815 $ 259,820
Unsecured notes 240,000 150,000
Unsecured line of credit 24,000 45,000
--------- ---------
525,815 454,820
Construction payables and amounts
due subcontractors 23,167 21,410
Accounts payable 1,585 1,132
Accrued real estate taxes 14,888 10,374
Accrued interest 4,437 3,461
Other accrued expenses 6,935 5,454
Other liabilities 8,312 5,490
Tenant security deposits and prepaid
rents 7,611 3,872
--------- ---------
Total liabilities 592,750 506,013
--------- ---------
Minority interest 380 298
--------- ---------
Partners' equity:
General partner
Common equity 683,710 535,783
Preferred equity 72,856 -
--------- ---------
756,566 535,783
Limited partners' common equity 12,703 4,438
--------- ---------
Total partners' equity 769,269 540,221
--------- ---------
$1,362,399 $1,046,532
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 28 -
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------
1996 1995 1994
------- ------ --------
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues:
Rental income $156,392 $112,931 $88,243
Equity in earnings of
unconsolidated companies 5,768 710 1,056
------- ------- -------
162,160 113,641 89,299
------- ------- -------
Operating expenses:
Rental expenses 29,843 20,953 17,158
Real estate taxes 14,244 9,683 8,256
Interest expense 31,344 21,462 18,920
Depreciation and amortization 32,571 24,337 18,036
------- ------- -------
108,002 76,435 62,370
------- ------- ------
Earnings from rental
operations 54,158 37,206 26,929
------- ------- ------
SERVICE OPERATIONS:
Revenues:
Property management, maintenance
and leasing fees 11,496 11,138 11,084
Construction management and
development fees 6,895 5,582 6,107
Other income 1,538 1,057 1,282
------ ------ ------
19,929 17,777 18,473
------ ------ ------
Operating expenses:
Payroll 9,176 7,611 8,141
Maintenance 1,526 1,344 1,069
Office and other 2,791 2,258 2,188
------- ------ ------
13,493 11,213 11,398
------- ------ ------
Earnings from service
operations 6,436 6,564 7,075
------- ------ ------
General and administrative expenses (4,053) (3,244) (3,261)
------- ------- ------
Operating income 56,541 40,526 30,743
OTHER INCOME (EXPENSE):
Interest income 1,185 1,702 1,115
Earnings from property sales 4,532 283 2,198
Minority interest in earnings
of subsidiaries (986) (911) (1,088)
------- ------- -------
Net income 61,272 41,600 32,968
Dividends on preferred units (2,559) - -
------- ------- -------
Net income available to common
units $ 58,713 $41,600 $32,968
======= ====== ======
Net income per common unit $ 1.84 $ 1.55 $ 1.54
======= ====== ======
Weighted average number of
common units outstanding 31,980 26,791 21,467
======= ====== ======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-29-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1996 1995 1994
------- ------- --------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net income $ 61,272 $41,600 $ 32,968
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation of buildings
and tenant improvements 27,568 20,416 15,068
Amortization of deferred
financing costs 1,208 1,218 1,251
Amortization of deferred
leasing and other costs 3,795 2,703 1,717
Minority interest in earnings 986 911 1,088
Straight-line rent adjustment (3,536) (3,198) (2,307)
Allowance for straight-line rent
receivable - - 748
Earnings from property sales (4,532) (283) (2,198)
Construction contracts, net (1,640) 8,722 2,405
Other accrued revenues and expenses,
net 12,298 6,737 1,335
Equity in earnings in excess of
distributions received from
unconsolidated companies (1,949) (189) (219)
------- ------ ------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 95,470 78,637 51,856
------- ------ ------
Cash flows from investing activities:
Rental property development costs (130,300) (128,879) (55,819)
Acquisition of rental properties (182,024) (57,427) (44,201)
Acquisition of businesses - (25,620) -
Acquisition of undeveloped land and
infrastructure costs (16,122) (38,361) (6,924)
Recurring tenant improvements (6,048) (4,312) (3,056)
Recurring leasing costs (3,032) (3,519) (2,407)
Recurring building improvements (780) (757) (474)
Other deferred costs and other
assets (500) (16,225) (6,960)
Proceeds from property sales, net 50,844 5,281 3,337
Distributions received from
unconsolidated companies 12,423 - -
Net investment in and advances to
unconsolidated companies (1,470) (19,750) 277
------- ------- -------
NET CASH USED BY INVESTING
ACTIVITIES (277,009) (289,569) (116,227)
------- ------- -------
Cash flows from financing
activities:
Contributions from general
partner 203,087 96,302 92,145
Proceeds from indebtedness 142,200 150,051 61,504
Payments on indebtedness
including principal amortization (84,677) (60,030) (16,149)
Borrowings (repayments) on lines
of credit, net (11,000) 45,000 -
Distributions to partners (65,986) (50,807) (39,514)
Distributions to minority interest (904) (1,032) (1,191)
Deferred financing costs (1,517) (3,297) (2,062)
------- ------- -------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 181,203 176,187 94,733
------- ------- -------
NET INCREASE (DECREASE) IN CASH (336) (34,745) 30,362
Cash at beginning of year 5,682 40,427 10,065
------- ------- -------
Cash at end of year $ 5,346 $ 5,682 $ 40,427
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-30-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(IN THOUSANDS, EXCEPT FOR PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
General Partner Limited
--------------------- Partners'
Common Preferred Common
Equity Equity Equity Total
-------- --------- ------- --------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993 $348,038 $ - $ 1,657 $349,695
Net income 26,216 - 6,752 32,968
Capital contribution from
Duke Realty Investments,
Inc. 92,171 - - 92,171
Acquisition of partnership
interest for Common Stock
of Duke Realty Investments,
Inc. 11,523 - - 11,523
Acquisition of property in
exchange for Limited Partner
Units - - 455 455
Distributions to partners
($1.84 per Common Unit) (31,565) - (7,949) (39,514)
------- ----- ------ -------
BALANCE AT DECEMBER 31, 1994 $446,383 $ - $ 915 $447,298
Net income 35,070 - 6,530 41,600
Capital contribution from
Duke Realty Investments,
Inc. 96,433 - - 96,433
Acquisition of partnership
interest for Common Stock
of Duke Realty Investments,
Inc. 796 - - 796
Acquisition of property in
exchange for Limited Partner
Units - - 4,901 4,901
Distributions to partners
($1.92 per Common Unit) (42,899) - (7,908) (50,807)
------- ----- ------ -------
BALANCE AT DECEMBER 31, 1995 $535,783 $ - $ 4,438 $540,221
Net income 51,529 2,559 7,184 61,272
Capital contribution from
Duke Realty Investments,
Inc. 130,951 72,288 - 203,239
Acquisition of partnership
interest for Common Stock
of Duke Realty Investments,
Inc. 21,627 - - 21,627
Acquisition of property in
exchange for Limited Partner
Units - - 8,896 8,896
Distributions to preferred
unitholders - (1,991) - (1,991)
Distributions to partners
($2.00 per Common Unit) (56,180) - (7,815) (63,995)
------- ------ ------ -------
BALANCE AT DECEMBER 31, 1996 $683,710 $72,856 $12,703 $769,269
======= ====== ====== =======
COMMON UNITS OUTSTANDING AT
DECEMBER 31, 1996 29,486 3,696 33,182
======= ====== =======
Common Units outstanding at
December 31, 1995 24,152 4,151 28,303
======= ====== =======
Common Units outstanding at
December 31, 1994 20,391 3,993 24,384
======= ====== =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-31-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) THE PARTNERSHIP
---------------
Duke Realty Limited Partnership (the "Partnership") was formed on
October 4, 1993, when Duke Realty Investments, Inc. (the
"Predecessor Company" or the "General Partner") contributed all of
its properties and related assets and liabilities along with the net
proceeds of $309.2 million from the issuance of an additional
14,000,833 shares through an offering (the "1993 Offering") to the
Partnership. Simultaneously, the Partnership completed the
acquisition of Duke Associates, a full-service commercial real
estate firm operating in the Midwest. The General Partner was formed
in 1985 and qualifies as a real estate investment trust under
provisions of the Internal Revenue Code. In connection with the 1993
Offering, the formation of the Partnership and the acquisition of
Duke Associates, the General Partner effected a 1 for 4.2 reverse
stock split of its existing common shares. The General Partner is
the sole general partner of the Partnership and received 16,046,144
units of partnership interest ("General Partner Units") in exchange
for its original contribution which represented a 78.36% interest in
the Partnership. As part of the acquisition, Duke Associates
received 4,432,109 units of limited partnership interest ("Limited
Partner Units") (together with the General Partner Units, the
("Common Units")) which represented a 21.64% interest in the
Partnership. The Limited Partner Units are exchangeable for shares
of the General Partner's common stock on a one-for-one basis subject
generally to a one-year holding period.
The Partnership owns and operates a portfolio of industrial, office
and retail properties in the Midwest and provides real estate
services to third-party property owners. The Partnership's primary
markets are Indianapolis, Indiana; Cincinnati, Cleveland and
Columbus, Ohio; St. Louis, Missouri and Nashville, Tennessee.
The service operations are conducted through Duke Realty Services
Limited Partnership and Duke Construction Limited Partnership, in
which the Partnership has an 89% profits interest (after certain
preferred returns on partners' capital accounts) and effective
control of their operations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
PRINCIPLES OF CONSOLIDATION
---------------------------
The equity interests in these majority-owned or controlled
subsidiaries not owned by the Partnership are reflected as minority
interests in the consolidated financial statements. All significant
intercompany balances and transactions have been eliminated in the
consolidated financial statements.
RECLASSIFICATIONS
-----------------
Certain 1995 and 1994 balances have been reclassified to conform
with the 1996 presentation.
-32-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
SEGMENT OPERATIONS
------------------
The Partnership is engaged in two business segments, the ownership
and rental of real estate investments ("Rental Operations") and the
providing of various real estate services such as property
management, maintenance, leasing and construction management to
third-party property owners ("Service Operations"). There are no
material intersegment sales or transfers between Rental Operations
and Service Operations. The identifiable assets of the Service
Operations consisting of cash, accounts receivable, construction
receivables and other assets as of December 31, 1996 and 1995 were
$20.7 million and $15.8 million, respectively. Capital expenditures
related to Service Operations were $2.0 million, $1.5 million and
$761,000 for the years ended December 31, 1996, 1995, and 1994,
respectively. All remaining assets, capital expenditures,
depreciation, amortization and investments in and advances to
unconsolidated companies relate to Rental Operations. The operations
of each segment are reflected separately on the Statement of
Operations.
REAL ESTATE INVESTMENTS
-----------------------
Real estate investments are stated at the lower of cost less
accumulated depreciation or fair value if impairment is identified.
Buildings and land improvements are depreciated on the straight-line
method over 40 years, and tenant improvement costs are depreciated
on the straight-line method over the term of the related lease.
All direct and indirect costs, including interest and real estate
taxes clearly associated with the acquisition, development,
construction or expansion of real estate investments, are
capitalized as a cost of the property and depreciated over the
estimated useful life of the related asset.
The Partnership evaluates its real estate investments upon
occurrence of significant changes in the operations, but not less
than annually, to assess whether any impairment indications are
present, including recurring operating losses and significant
adverse changes in legal factors or business climate that affect the
recovery of the recorded value. If any real estate investment is
considered impaired, a loss is provided to reduce the carrying value
of the property to its estimated fair value.
DEFERRED COSTS
--------------
Costs incurred in connection with financing or leasing are amortized
on the straight-line method over the term of the related loan. All
direct and indirect costs associated with the rental of real estate
projects owned by the Partnership are amortized over the term of the
related lease. Unamortized costs are charged to expense upon the
early termination of the lease or upon early payment of the
financing. Prepaid interest is amortized to interest expense using
the effective interest method over the terms of the related loans.
-33-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
REVENUES
--------
Rental Operations
-----------------
Rental income from leases with scheduled rental increases during
their terms is recognized for financial reporting purposes on a
straight-line basis.
Service Operations
------------------
Management fees are based on a percentage of rental receipts of
properties managed and are recognized as the rental receipts are
collected. Maintenance fees are based upon established hourly rates
and are recognized as the services are performed. Leasing fees are
based on a percentage of the total rental due under completed
leases and are generally recognized upon lease execution.
Construction management and development fees are generally based on
a percentage of costs and are recognized as the project costs are
incurred. Other income consists primarily of payroll reimbursements
for on-site property management services.
NET INCOME PER COMMON UNIT
--------------------------
Net income per common unit is calculated using the weighted average
number of common units outstanding during the year. Common unit
equivalents dilute net income per common unit by less than 3% and are
not considered in computing weighted average common units
outstanding.
FEDERAL INCOME TAXES
--------------------
As a partnership, the allocated share of income or loss for the
year is included in the income tax returns of the partners;
accordingly, no accounting for income taxes is required in the
accompanying consolidated financial statements.
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The fair values of the Partnership's financial instruments,
including accounts receivable, accounts payable, accrued expenses,
mortgage debt, unsecured notes payable, line of credit and other
financial instruments, generally determined using the present value
of estimated future cash flows using a discount rate commensurate
with the risks involved, approximate their carrying or contract
values.
USE OF ESTIMATES
----------------
The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those
estimates.
-34-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(3) RELATED PARTY TRANSACTIONS
--------------------------
The Partnership provides management, leasing, construction and
other tenant related services to partnerships in which certain
executive officers of the General Partner have continuing ownership
interests. The Partnership was paid fees totaling $3.2 million,
$2.8 million and $3.0 million for such services in 1996, 1995 and
1994, respectively. Management believes the terms for such services
are equivalent to those available in the market. The Partnership
has an option to purchase the executive officers' interest in each
of these properties which expires October 2003. The option price of
each property was established at the date the option was granted.
(4) INVESTMENTS IN UNCONSOLIDATED COMPANIES
---------------------------------------
The Partnership has equity interests in unconsolidated partnerships
and joint ventures which own and operate rental properties and hold
land for development in the Midwest. The equity method of
accounting is used for these investments in which the Partnership
has the ability to exercise significant influence over operating
and financial policies. Any difference between the carrying amount
of these investments and the underlying equity in net assets is
amortized to equity in earnings of unconsolidated companies over 40
years. The cost method of accounting is used for non-majority owned
joint ventures over which the Partnership does not have the ability
to exercise significant influence. The difference between the cost
method and the equity method for such ventures does not
significantly affect the financial position or results of
operations of the Partnership. In 1995, the Partnership acquired
its unaffiliated partner's 50% interest in a joint venture which
owned two suburban office rental properties (one of which was under
construction as of December 31, 1995) and 40.3 acres of land held
for development. The Partnership accounted for the acquisition of
the 50% interest using the purchase method with its recorded
investment in the properties equal to the sum of the balance of its
investment in and advances to the joint venture at the date of
acquisition, the net liabilities assumed and cash paid to the joint
venture partner amounting to $24.4 million. In 1994, the
Partnership acquired its unaffiliated partner's 55% interest in a
partnership which owned a suburban office rental property. The
Partnership accounted for the acquisition of the 55% interest using
the purchase method with its recorded investment in the property
equal to the sum of its investment in the partnership at the date
of acquisition, the cash payment to the unaffiliated partner, cash
repayment of a portion of the partnership's mortgage loan and net
liabilities assumed, including the remaining balance on the
partnership's mortgage loan of $4.5 million. The fair value of the
property exceeds the Partnership's recorded investment. Also in
1994, a partnership in which the Partnership owned a 50% interest
was dissolved through the distribution of all assets and
liabilities to the partners. At the date of dissolution, the
Partnership had loans and advances to the partnership totaling $4.2
million. Under terms of the dissolution agreement, the Partnership
received 71 acres of land held for development and the partnership
was not required to repay the Partnership's loans and advances. The
Partnership's recorded investment in the property received is equal
to the sum of its investment in and loans and advances to the
partnership at the date of dissolution. The fair value of the
property exceeds the Partnership's recorded investment.
-35-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
On December 28, 1995, the Partnership formed a joint venture (Dugan
Realty L.L.C.) with an institutional real estate investor and
purchased 25 industrial buildings totaling approximately 2.3
million square feet. Upon formation of the venture, the Partnership
contributed approximately 1.4 million square feet of recently
developed and acquired industrial properties, 113 acres of recently
acquired land held for future development, at an agreed value of
$50.8 million, and approximately $16.7 million of cash for a 50.1%
interest in the joint venture. The Partnership's recorded
investment at December 31, 1995 in the joint venture of $59.4
million is the sum of the carrying value of the properties, land,
and cash contributed. The Partnership's joint venture partner
contributed cash of $67.5 million which was equal to the agreed
value of the Partnership's contribution. The total cash
contributed by the Partnership and the joint venture partner was
used to purchase the 25 industrial buildings noted above. The
recently acquired industrial properties and the undeveloped land
which were contributed were acquired as part of the acquisition of
Park Fletcher, Inc., an Indianapolis, Indiana based real estate
development and management company. The acquisition was accounted
for under the purchase method. The recorded carrying value of the
acquired properties and land was equal to the net liabilities
assumed plus cash paid plus mortgage indebtedness assumed of $17.4
million. The fair value of the property exceeds the Partnership's
recorded investment. The operating results of the acquired
properties and land have been included in the consolidated
operating results subsequent to the date of acquisition. The
Partnership completed the development of 1.1 million square feet of
property in 1996 and contributed these properties to the joint
venture at an agreed value of $24.9 million. The Partnership
recorded its investment in the joint venture related to the
additional contribution at its carrying value of $20.5 million. The
joint venture partner contributed cash to the venture equal to
49.9% of the agreed value of the properties contributed, $12.4
million, and this cash was distributed to the Partnership and
reduced its recorded investment in the venture. The Partnership
accounts for its investment in this joint venture on the equity
method because the joint venture partner's approval is required for
all major decisions and the joint venture partner has equal control
regarding the primary day-to-day operations of the venture.
-36-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Combined summarized financial information of the companies which are
accounted for by the equity method as of December 31, 1996 and
December 31, 1995 and for the years ended December 31, 1996, 1995 and
1994 are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Land, buildings and tenant
improvements, net $181,337 $155,628
Land held for development 7,975 8,515
Other assets 7,874 4,742
------- -------
$197,186 $168,885
======= =======
Property indebtedness $ 25,285 $ 28,185
Other liabilities 6,457 3,736
------- -------
31,742 31,921
Owners' equity 165,444 136,964
------- -------
$197,186 $168,885
======= =======
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
------- -------- --------
<S> <C> <C> <C>
Rental income $21,880 $3,398 $3,419
====== ===== =====
Net income $ 9,761 $ 363 $ 224
====== ===== =====
</TABLE>
Investments in unconsolidated companies include $6.1 million and
$6.0 million at December 31, 1996 and 1995, respectively, related
to joint ventures accounted for on the cost method. Included in
equity in earnings of unconsolidated companies are distributions
from a joint venture accounted for on the cost method totaling
$735,000, $521,000 and $837,000 in 1996, 1995 and 1994,
respectively.
<PAGE> -37-
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) INDEBTEDNESS
------------
Indebtedness at December 31 consists of the following (in
thousands):
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Mortgage note with monthly payments of $668
including principal and interest at 8.50%
due in 2003 $ 77,381 $ 78,832
Mortgage note with monthly payments of
interest of $436 through August 1997.
Thereafter, monthly payments of $471
including principal and interest at
8.72% due in 2001 60,000 60,000
Mortgage note with monthly payments
at 30-day LIBOR + .75% with monthly
principal payments ranging from
$63 to $165 due in 1999 32,700 -
Mortgage note with monthly payments
of interest at 7.25% due in 1998 25,500 25,500
Mortgage note with monthly payments
of $165 including principal and
interest at 8.19% due in 2017 19,500 -
Three mortgage notes with monthly
payments of interest at rates
ranging from 5.29% to 5.44%
due in 1996 - 59,619
Mortgage note with monthly payments
of $104 including principal and
interest at 6.80% due in 1998 15,423 15,619
Mortgage notes with monthly payments
in varying amounts including
interest at rates ranging from
5.55% to 10.25% due in varying
amounts through 2014 21,311 20,250
Demand secured line of credit with
monthly payments of interest
at 30-day LIBOR + .75% 10,000 -
------- -------
Total Secured Debt 261,815 259,820
Unsecured notes with semi-annual
payments of interest at 7.28%
due in 2000 40,000 -
Unsecured notes with semi-annual
payments of interest at 7.25%
(effective rate of 7.328%) due
in 2002 50,000 50,000
Unsecured notes with semi-annual
payments of interest at 7.14%
due in 2004 50,000 -
Unsecured notes with semi-annual
payments of interest at 7.375%
(effective rate of 7.519%) due
in 2005 100,000 100,000
Unsecured line of credit with
monthly payments of interest at
30-day LIBOR + 1.25% due in 1998 24,000 45,000
------- -------
Total Indebtedness $525,815 $454,820
======= =======
</TABLE>
As of December 31, 1996, the $261.8 million of mortgage notes are
collateralized by rental properties with a net carrying value of
$523.2 million.
-38-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In April 1995, the Partnership obtained an unsecured line of credit in
the aggregate amount of $100.0 million. The unsecured line of credit
matures in April 1998. Borrowings under this line of credit required
interest at 30-day LIBOR plus 2.00% as of December 31, 1995 (effective
rate of 7.69%). In 1996, the Partnership increased its amount
available under the unsecured line of credit to $150.0 million and
reduced the borrowing rate to LIBOR plus 1.25% as of December 31, 1996
(effective rate of 6.75%).
The Partnership has an interest rate swap agreement (the "Agreement")
on $33.0 million of the Partnership's outstanding mortgage debt to
effectively fix the interest rate on a portion of its floating rate
debt. Under the Agreement, the Partnership pays or receives the
difference between a fixed rate of 5.1875% and a floating rate of 30-
day LIBOR plus .75% based on the notional principal amount of $33.0
million. The amount paid or received under the Agreement is included
in interest expense on a monthly basis. The Agreement matures along
with the related mortgage loan in December 1999. The Agreement will
stay in place until maturity unless the 30-day LIBOR rate on the date
of monthly repricing exceeds 6.25% which will cause a termination of
the Agreement. The 30-day LIBOR rate at December 31, 1996 was 5.50%.
The estimated fair value of the Agreement at December 31, 1996 was
$312,000. The fair value was estimated by discounting the expected
cash flows to be received under the Agreement using rates currently
available for interest rate swaps of similar terms and maturities.
At December 31, 1996, scheduled amortization and maturities of all
indebtedness for the next five years and thereafter are as follows
(in thousands):
<TABLE>
<CAPTION>
Year Amount
---- ---------
<S> <C>
1997 $ 13,388
1998 75,000
1999 33,616
2000 48,080
2001 62,884
Thereafter 292,847
-------
$525,815
=======
</TABLE>
Cash paid for interest in 1996, 1995, and 1994 was $35.5 million,
$22.1 million, and $20.3 million, respectively. Total interest
capitalized in 1996, 1995 and 1994 was $5.5 million, $4.2 million and
$1.7 million, respectively.
(6) LEASING ACTIVITY
----------------
Future minimum rents due to the Partnership under non-cancelable
operating leases at December 31, 1996 are scheduled as follows (in
thousands):
<TABLE>
<CAPTION>
Year Amount
------ ---------
<S> <C>
1997 $ 155,206
1998 143,331
1999 125,743
2000 103,998
2001 84,363
Thereafter 406,453
---------
$1,019,094
=========
</TABLE>
-39-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In addition to minimum rents, certain leases require reimbursements
of specified operating expenses which amounted to $19.7 million,
$12.7 million, and $10.0 million for the years ended December 31,
1996, 1995 and 1994, respectively.
(7) EMPLOYEE BENEFIT PLANS
----------------------
The Partnership maintains a profit sharing and salary deferral plan
for the benefit of its full-time employees. The Partnership matches
the employees' contributions up to two percent of the employees'
salary and may also make annual discretionary contributions. Total
expense recognized by the Partnership was $328,000, $245,000 and
$370,000 for the years ended 1996, 1995 and 1994, respectively.
The Partnership makes contributions to a contributory health and
welfare plan as necessary to fund claims not covered by employee
contributions. Total expense recognized by the Partnership related
to this plan was $1,193,000, $882,000 and $766,000 for 1996, 1995
and 1994, respectively. Included in total expense is an estimate
based on historical experience of the effect of claims incurred but
not reported as of year-end.
(8) PARTNERS' EQUITY
----------------
The General Partner periodically accesses the public equity markets
and contributes the net proceeds to the Partnership to fund the
development and acquisition of additional rental properties. The
proceeds of these offerings are contributed to the Partnership in
exchange for additional Common Units, or in the case of the 1996
Preferred Stock Offering, Preferred Units. A summary of the public
equity issuances by the General Partner during the three-year period
ended December 31, 1996 is as follows (in thousands, except per
share price):
<TABLE>
<CAPTION>
Offering Price
Shares Issued Per Share Net Proceeds
------------- -------------- ------------
<S> <C> <C> <C>
Common Stock
------------
1994 Offering 3,887 $ 25.250 $ 92,171
1995 Offering 3,728 27.375 96,273
1996 Offering 4,400 30.125 125,251
Preferred Stock
---------------
1996 9.10% Dividend
Rate 300 $250.00 $72,288
</TABLE>
During the three years ended December 31, 1996, the General Partner
acquired a portion of the minority interest in the Partnership
through the issuance of shares of common stock for a like number of
common units. The acquisition of the minority interest was accounted
for under the purchase method with assets acquired recorded at the
fair market value of the General Partner's common stock on the date
of acquisition.
-40-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The following acquisition amounts were allocated to rental property,
undeveloped land and investments in unconsolidated companies based
on their estimated fair values (in thousands):
<TABLE>
<CAPTION>
Common
Shares Minority
Issued Interest Acquired
------ -----------------
<S> <C> <C>
1994 456 $11,524
1995 28 796
1996 753 21,627
</TABLE>
In August 1996, the General Partner issued 300,000 shares of 9.10%
Series A Cumulative Redeemable Preferred Shares receiving net
proceeds of approximately $72.3 million which were contributed to
the Partnership in exchange for a like number of Preferred Units. On
or after August 31, 2001, the Series A Preferred Units may be
redeemed for cash at the option of the General Partner, in whole or
in part at a redemption price of $250.00 per unit plus accrued and
unpaid distributions, if any, to the redemption date. The redemption
price of the Series A Preferred Units (other than any portion
thereof consisting of accrued and unpaid distributions) may only be
paid from the proceeds of other capital units of the Partnership,
which may include other classes or series of preferred units. The
Series A Preferred Units have no stated maturity, are not subject to
sinking fund or mandatory redemption provisions and are not
convertible into any other securities of the General Partner or the
Partnership. Distributions on the Series A Preferred Units are
cumulative from the date of original issue and are payable quarterly
on or about the last day of February, May, August and November of
each year, commencing on December 2, 1996, at the rate of 9.10% of
the liquidation preference per annum (equivalent to $22.75 per annum
per unit).
(9) STOCK BASED COMPENSATION
------------------------
The General Partner and the Partnership have four stock-based
compensation plans, which are described below. The Partnership
applies APB Opinion No. 25 and related Interpretations in
accounting for its plans. Accordingly, no compensation cost has
been recognized for its fixed stock option plans. The Partnership
does charge compensation costs against its income for its two
performance based stock plans. If compensation cost for the
Partnership's four stock-based compensation plans had been
determined consistent with FASB Statement No. 123, the
Partnership's net income and earnings per unit would have been
reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C> <C>
Net income As reported $58,713 $41,600
Pro forma $58,564 $41,544
Primary earnings As reported $ 1.84 $ 1.55
per Common Unit Pro forma $ 1.83 $ 1.55
</TABLE>
The effects of applying FASB Statement No. 123 in this pro forma
disclosure are not indicative of future amounts. The Statement does
not apply to awards prior to 1995, and additional awards in future
years are anticipated.
-41-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Fixed Stock Option Plans
------------------------
The Partnership has two fixed stock option plans, the Duke Realty
Services 1993 Stock Option Plan (the "1993 Plan") and the 1995 Key
Employees' Stock Option Plan of Duke Realty Investments, Inc. (the
"1995 Plan"). Under the 1995 Plan, the General Partner and the
Partnership are authorized to grant options to its employees for up
to 558,400 shares of common stock, as well as up to an additional
400,000 shares to the extent grants under the 1993 Plan lapse, are
forfeited or are otherwise terminated. The 1995 Plan was adopted in
1995, subject to shareholder approval, which approval was received
in 1996. Under the 1993 Plan, the General Partner and the
Partnership were authorized to grant options to its employees for up
to 1,315,000 shares of common stock, of which 751,180 are
outstanding as of December 31, 1996. Upon the approval of the 1995
Plan, no further grants are permitted under the 1993 Plan.
Under both plans, the exercise price of each option equals the
market price of the General Partner's stock on the date of grant,
and each option's maximum term is ten years. Options granted under
the 1993 Plan vest at 20% per year. Options granted under the 1995
Plan vest 50% at the end of the third year following the grant date,
and 25% per year for each of the two succeeding years, or, if
earlier, upon the death, retirement or disability of the optionee or
a change in control of the General Partner.
The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following assumptions used for grants in 1995 and 1996: Dividend
yield of 6.0%; expected volatility of 19%; weighted average risk-
free interest rates of 6.8% and 5.6% for 1995 and 1996 grants,
respectively; and weighted average expected lives of 7.8 years and
7.9 years for 1995 and 1996 grants, respectively.
A summary of the status of the General Partner and the Partnership's
two fixed stock option plans as of December 31, 1994, 1995 and 1996,
and changes during the years ended on those dates is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------------------- ------------------ ------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------ -------- ------ -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding,
beginning of
year 866,069 $24.958 681,500 $23.750 681,500 $23.75
Granted 123,457 $32.125 225,469 $28.413 - $ -
Exercised (100) $25.875 (1,000) $23.750 - $ -
Forfeited (15,605) $30.671 (39,900) $23.872 - $ -
------- ------- -------
Outstanding,
end of year 973,821 $25.775 866,069 $24.958 681,500 $23.75
======= ======= =======
Options
exercisable,
end of year 411,540 262,200 136,300
======= ======= =======
Weighted-average
fair value
of options
granted during
the year $ 3.925 $ 4.123
====== ======
</TABLE>
-42-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The following table summarizes information about fixed stock options
outstanding at December, 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
----------------------------------- ------------------------
Range Number Weighted Avg. Weighted Number Weighted
of Outstanding Remaining Avg. Exercisable Avg.
Exercise at Contractual Exercise at Exercise
Prices 12/31/96 Life Price 12/31/96 Price
--------- ----------- ------------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$23 - $24 642,900 6.76 $23.750 389,100 $23.750
$25 - $31 214,620 8.46 $28.401 22,440 $26.298
$32 - $33 116,301 9.08 $32.125 - -
------- -------
$23 - $33 973,821 7.41 $25.775 411,540 $23.889
======= =======
</TABLE>
Performance Based Stock Plans
-----------------------------
The Partnership has two performance based equity compensation plans.
Under the 1995 Dividend Increase Unit Plan (the "DIU Plan"),
Dividend Increase Units ("DIUs") are granted to key employees. The
value of DIUs exercised by employees is payable in company stock. A
maximum of 100,000 shares of the General Partner's stock may be
issued under the DIU Plan. The maximum term of all DIUs granted is
ten years.
The value of each DIU when exercised is equal to the increase in the
General Partner's annualized dividend per share from the date of
grant to the date of exercise, divided by the "dividend yield".
Dividend yield is the annualized dividend per share of the General
Partner divided by the market price per share of the General
Partner's common stock at the date of grant. DIUs are subject to the
same vesting schedule as stock options issued under the 1995 Plan.
The compensation cost that has been charged against income for the
DIU Plan was $152,000 and $39,000 for 1996 and 1995, respectively. A
summary of the status of DIUs granted by the Partnership is as
follows:
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
DIUs outstanding,
beginning of year 110,469 -
Granted 123,457 110,469
Exercised - -
Forfeited (11,285) -
------- -------
DIUs outstanding,
end of year 222,641 110,469
======= =======
DIUs exercisable,
end of year - -
======= =======
</TABLE>
Under the 1995 Shareholder Value Plan (the "SV Plan"), the
Partnership may grant awards in specified dollar amounts to key
employees. The award is payable to the employee on the third
anniversary of the date of grant. One-half of the award is payable
in common stock of the General Partner, and one-half is payable in
cash. A maximum of 100,000 shares of the General Partner's common
stock may be issued under the SV Plan.
The initial dollar amount of each award granted under the SV Plan is
adjusted upward or downward based on a comparison of the General
Partner's cumulative total shareholder return for the three year
period as compared to the cumulative total return of the S&P 500 and
the NAREIT Equity REIT Total Return indices. The award is not
payable upon the employee's termination of employment for any reason
other than retirement, death, disability or a change in control of
the General Partner.
-43-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The following table summarizes information about the initial amount
of SV Plan awards granted in 1995 and 1996:
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Amount of SVP initial awards,
beginning of year $456,080 $ -
Granted 521,165 456,080
Awards paid - -
Forfeited (51,666) -
------- -------
Amount of SVP initial awards,
end of year $925,579 $456,080
======= =======
</TABLE>
The Partnership believes that it is not possible to reasonably
estimate the fair value of the General Partner's common stock to be
issued under the DIU and SV Plans and, therefore, computes
compensation cost for the Plans based on the intrinsic value of the
awards as if they were exercised at the end of each applicable
reporting period. The compensation cost that has been charged
against income for the SV Plan was $361,000 and $152,000 for 1996
and 1995, respectively.
-44-
<PAGE>
3. Exhibits
Exhibit
Number Description
-------- --------------
4.1 Amended and Restated Agreement of Limited Partnership of Duke
Realty Limited Partnership ("DRLP") is incorporated herein by
reference to Exhibit 10.1 to the registration statement of Duke
Realty Investments, Inc. on Form S-2, as amended, filed on June
8, 1993, as File No. 33-64038 (the "1993 Registration
Statement").
4.2 First and Second Amendments to Amended and Restated Agreement of
Limited Partnership of DRLP are incorporated herein by reference
to Exhibit 10.2 of the Annual Report on Form 10-K of Duke Realty
Investments, Inc. for the year ended December 31, 1995 (File No.
1-9044)("DRE 10-K"), and the Third Amendment to Amended and
Restated Agreement of DRLP is incorporated herein by reference to
Exhibit 10 to the Report of Duke Realty Investments, Inc. on Form
8-K filed August 15, 1996.
4.3 Indenture between DRLP and The First National Bank of Chicago,
Trustee, and the First Supplement thereto, are incorporated by
reference to Exhibits 4.1 and 4.2 to the report of Duke Realty
Investments, Inc. on Form 8-K filed September 19, 1995 and the
Second Supplement thereto, is incorporated herein by reference to
Exhibit 4 to the report of Duke Realty Investments, Inc. on Form
8-K filed July 12, 1996.
10.1 Second Amended and Restated Agreement of Limited Partnership of
Duke Realty Services Limited Partnership (the "Services
Partnership") is incorporated herein by reference to Exhibit 10.3
of the DRE 10-K.
10.2 Promissory Note of the Services Partnership is incorporated
herein by reference to Exhibit 10.3 to the 1993 Registration
Statement.
10.3 Duke Realty Services Partnership 1993 Stock Option Plan is
incorporated herein by reference to Exhibit 10.4 to the 1993
Registration Statement.
10.4 Acquisition Option Agreement relating to certain properties not
contributed to DRLP by Duke Associates (the "Excluded
Properties") is incorporated herein by reference to Exhibit 10.5
to the 1993 Registration Statement.
10.5 Management Agreement relating to the Excluded Properties is
incorporated herein by reference to Exhibit 10.6 to the 1993
Registration Statement.
10.6 Contribution Agreement for certain properties and land
contributed by Duke Associates and Registrant to DRLP is
incorporated herein by reference to Exhibit 10.7 to the 1993
Registration Statement.
10.7 Contribution Agreement for certain assets and contracts
contributed by Duke Associates to the Service Partnership is
incorporated herein by reference to Exhibit 10.8 to the 1993
Registration Statement.
-45-
<PAGE>
10.8 Contribution Agreement for certain contracts contributed by Duke
Associates to DRLP is incorporated herein by reference to Exhibit
10.9 to the 1993 Registration Statement.
10.9 Stock Purchase Agreement is incorporated herein by reference to
Exhibit 10.10 to the 1993 Registration Statement.
10.10 Indemnification Agreement is incorporated herein by reference to
Exhibit 10.11 to the 1993 Registration Statement.
10.11 1995 Key Employee Stock Option Plan is incorporated herein
by reference to Exhibit 10.13 of the DRE 10-K.
10.12 1995 Dividend Increase Unit Plan is incorporated herein by
reference to Exhibit 10.14 of the DRE 10-K.
10.13 1995 Shareholder Value Plan is incorporated herein by reference
to Exhibit 10.15 of the DRE 10-K.
21. List of Subsidiaries of Registrant.
23. Consent of KPMG Peat Marwick LLP.
24. Executed powers of attorney of certain directors.
27. Financial Data Schedule
99.1 Selected Quarterly Financial Information
-46-
<PAGE>
The Partnership will furnish to any security holder, upon written
request, copies of any exhibit incorporated by reference, for a fee of
15 cents per page, to cover the costs of furnishing the exhibits.
Written request should include a representation that the person making
the request was the beneficial owner of securities.
(b) Reports on Form 8-K
None
-47-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
(IN THOUSANDS) SCHEDULE
III
LOCATION / BUILDING
DEVELOPMENT BUILDING TYPE ENCUMBRANCES
---------------------- -------- -------- ------------
<S> <C> <C> <C>
INDIANAPOLIS, INDIANA
---------------------
PARK 100 BUSINESS PARK BUILDING #32 RETAIL $ 586
PARK 100 BUSINESS PARK BUILDING #34 OFFICE 1,022
PARK 100 BUSINESS PARK BUILDING #38 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #79 INDUSTRIAL 1,037
PARK 100 BUSINESS PARK BUILDING #80 INDUSTRIAL 1,329
PARK 100 BUSINESS PARK BUILDING #83 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #84 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #95 INDUSTRIAL 3,326
PARK 100 BUSINESS PARK BUILDING #96 INDUSTRIAL 6,330
PARK 100 BUSINESS PARK BUILDING #97 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #98 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #100 INDUSTRIAL 1,662
PARK 100 BUSINESS PARK BUILDING #107 INDUSTRIAL 1,560
PARK 100 BUSINESS PARK BUILDING #109 INDUSTRIAL 1,135
PARK 100 BUSINESS PARK BUILDING #116 OFFICE 1,931
PARK 100 BUSINESS PARK BUILDING #118 OFFICE 1,220
PARK 100 BUSINESS PARK BUILDING #119 OFFICE -
PARK 100 BUSINESS PARK BUILDING #121 RETAIL -
PARK 100 BUSINESS PARK BUILDING #122 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #125 INDUSTRIAL 3,789
PARK 100 BUSINESS PARK BUILDING #126 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #127 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #128 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #129 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #130 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 1 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 2 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 3 INDUSTRIAL -
PARK 100 BUSINESS PARK NORGATE LAND LAND LEASE -
LEASE
PARK 100 BUSINESS PARK SCHAHET HOTELS LAND LEASE -
LAND LEASE
PARK 100 BUSINESS PARK KENNY ROGERS LAND LAND LEASE -
LEASE
PARK 100 BUSINESS PARK NORCO LAND LEASE LAND LEASE -
PARK 100 BUSINESS PARK ZOLLMAN LAND LAND LEASE -
LEASE
SHADELAND STATION 7351 SHADELAND OFFICE -
SHADELAND STATION BUILDING INDUSTRIAL 1,800
#204/205
SHADELAND STATION 7240 SHADELAND OFFICE (2) 2,644
SHADELAND STATION 7330 SHADELAND OFFICE 2,338
SHADELAND STATION 7369 SHADELAND OFFICE -
SHADELAND STATION 7340 SHADELAND OFFICE 322
SHADELAND STATION 7400 SHADELAND OFFICE 450
CASTLETON CORNER CUB PLAZA RETAIL 3,179
CASTLETON MICHAEL'S PLAZA RETAIL 2,405
SHOPPING CENTER
SOUTH PARK, INDIANA BUILDING #1 OFFICE 347
SOUTH PARK, INDIANA BUILDING #2 INDUSTRIAL 490
SOUTH PARK, INDIANA BUILDING #3 OFFICE -
SOUTH PARK, INDIANA BRYLANE PARKING OFFICE -
LOT LEASE
SOUTH PARK, INDIANA LEE'S INN LAND LAND LEASE -
LEASE
GREENWOOD CORNER GREENWOOD CORNER RETAIL -
GREENWOOD CORNER 1st INDIANA BANK RETAIL 255
BRANCH
CARMEL MEDICAL I CARMEL MEDICAL I MEDICAL 1,884
ST. FRANCIS ST. FRANCIS MEDICAL -
COMMUNITY MOB COMMUNITY MOB MEDICAL -
CARMEL MEDICAL II CARMEL MEDICAL II MEDICAL 2,432
HILLSDALE TECHNECENTER BUILDING #4 INDUSTRIAL 2,524
HILLSDALE TECHNECENTER BUILDING #5 INDUSTRIAL 1,705
HILLSDALE TECHNECENTER BUILDING #6 INDUSTRIAL 2,108
KEYSTONE AT THE 8465 KEYSTONE OFFICE -
CROSSING
WOODFIELD AT THE WOODFIELD II OFFICE 6,052
CROSSING
WOODFIELD AT THE WOODFIELD III OFFICE -
CROSSING
KEYSTONE AT THE 3520 COMMERCE OFFICE -
CROSSING CROSSING
ONE PARKWOOD ONE PARKWOOD OFFICE -
TWO PARKWOOD TWO PARKWOOD OFFICE -
PALOMAR PALOMAR INDUSTRIAL -
FRANKLIN ROAD FRANKLIN ROAD INDUSTRIAL -
BUSINESS CTR. BUSINESS CTR.
NAMPAC BUILDING NAMPAC BUILDING INDUSTRIAL -
HAMILTON CROSSING BUILDING #1 INDUSTRIAL -
KEYSTONE AT THE F.C. TUCKER OFFICE -
CROSSING BUILDING
PARK FLETCHER BUILDING #14 INDUSTRIAL -
6060 GUION ROAD 6060 GUION ROAD INDUSTRIAL -
(VANSTAR) (VANSTAR)
4750 KENTUCKY AVE. 4750 KENTUCKY AVE.INDUSTRIAL -
4316 WEST MINNESOTA 4316 W. MINNESOTA INDUSTRIAL -
FORT WAYNE, INDIANA
-------------------
COLDWATER CROSSING COLDWATER SHOPPES RETAIL 11,249
LEBANON, INNDIANA
-----------------
AMERICAN AIR FILTER AMERICAN AIR INDUSTRIAL -
FILTER
NASHVILLE, TENNESSEE
--------------------
KEEBLER BUILDING KEEBLER BUILDING INDUSTRIAL -
HAYWOOD OAKS TECHNECENTER BUILDING #2 INDUSTRIAL 1,057
HAYWOOD OAKS TECHNECENTER BUILDING #3 INDUSTRIAL 1,017
HAYWOOD OAKS TECHNECENTER BUILDING #4 INDUSTRIAL 1,138
HAYWOOD OAKS TECHNECENTER BUILDING #5 INDUSTRIAL 1,788
HAYWOOD OAKS TECHNECENTER BUILDING #6 INDUSTRIAL -
HAYWOOD OAKS TECHNECENTER BUILDING #7 INDUSTRIAL -
GREENBRIAR BUSINESS PARK GREENBRIAR INDUSTRIAL -
HEBRON, KENTUCKY
----------------
SOUTHPARK, KENTUCKY CR SERVICES INDUSTRIAL 3,053
SOUTHPARK, KENTUCKY BUILDING #1 INDUSTRIAL -
SOUTHPARK, KENTUCKY BUILDING #3 INDUSTRIAL -
SOUTHPARK, KENTUCKY REDKEN INDUSTRIAL 2,368
FLORENCE, KENTUCKY
------------------
EMPIRE COMMERCE EMPIRE COMMERCE INDUSTRIAL -
CINCINNATI, OHIO
----------------
PARK 50 TECHNECENTER BUILDING #17 OFFICE 3,503
PARK 50 TECHNECENTER BUILDING #20 INDUSTRIAL 4,200
PARK 50 TECHNECENTER BUILDING #24 RETAIL -
PARK 50 TECHNECENTER BUILDING #25 INDUSTRIAL -
PARK 50 TECHNECENTER SDRC BUILDING OFFICE -
FIDELITY DRIVE DUN & BRADSTREET OFFICE 1,768
WORLD PARK BUILDING #5 INDUSTRIAL 2,246
WORLD PARK BUILDING #6 INDUSTRIAL 2,307
WORLD PARK BUILDING #7 INDUSTRIAL 2,764
WORLD PARK BUILDING #8 INDUSTRIAL 2,836
WORLD PARK BUILDING #9 INDUSTRIAL 1,663
WORLD PARK BUILDING #11 INDUSTRIAL 2,558
WORLD PARK BUILDING #14 INDUSTRIAL 1,943
WORLD PARK BUILDING #15 INDUSTRIAL -
WORLD PARK BUILDING #16 INDUSTRIAL 1,577
EASTGATE PLAZA EASTGATE PLAZA RETAIL -
FAIRFIELD BUILDING D INDUSTRIAL -
BUSINESS CENTER
FAIRFIELD BUILDING E INDUSTRIAL -
BUSINESS CENTER
UNIVERSITY MOVING UNIVERSITY MOVING INDUSTRIAL -
TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 OFFICE (3) -
GOVERNOR'S PLAZA GOVERNOR'S PLAZA RETAIL -
GOVERNOR'S PLAZA KING'S MALL II RETAIL -
GOVERNOR'S PLAZA KOHLS RETAIL -
SOFA EXPRESS SOFA EXPRESS RETAIL -
OFFICE MAX OFFICE MAX RETAIL -
312 ELM BUILDING 312 ELM OFFICE 32,700
311 ELM STREET ZUSSMAN OFFICE -
ENTERPRISE BUILDING 1 INDUSTRIAL 4,155
BUSINESS PARK
ENTERPRISE BUILDING 2 INDUSTRIAL 3,101
BUSINESS PARK
ENTERPRISE BUILDING A INDUSTRIAL 494
BUSINESS PARK
ENTERPRISE BUILDING B INDUSTRIAL 760
BUSINESS PARK
ENTERPRISE BUILDING D INDUSTRIAL 1,271
BUSINESS PARK
312 PLUM STREET S & L DATA OFFICE -
TRIANGLE OFFICE PARK BUILDINGS #1-#38 OFFICE 6,025
GOVERNOR'S HILL 8790 GOVERNOR'S OFFICE -
HILL
GOVERNOR'S HILL 8700 GOVERNOR'S OFFICE -
HILL
GOVERNOR'S HILL 8800 GOVERNOR'S OFFICE 1,667
HILL
GOVERNOR'S HILL 8600 GOVERNOR'S OFFICE 15,423
HILL
GOVERNOR'S POINTE 4770 GOVERNOR'S OFFICE 4,747
POINTE
GOVERNOR'S POINTE 4700 BUILDING INDUSTRIAL 3,516
GOVERNOR'S POINTE 4900 BUILDING INDUSTRIAL 2,955
GOVERNOR'S POINTE 4705 GOVERNOR'S OFFICE -
POINTE
GOVERNOR'S POINTE 4800 GOVERNOR'S OFFICE -
POINTE
BIGG'S SUPERCENTER BIGG'S RETAIL -
SUPERCENTER
GOVERNOR'S POINTE 4605 GOVERNOR'S OFFICE 10,685
POINTE
MONTGOMERY CROSSING STEINBERG'S RETAIL 696
MONTGOMERY CROSSING II SPORTS UNLIMITED RETAIL 2,728
GOVERNOR'S PLAZA KING'S AUTO RETAIL 3,256
MALL I
MOSTELLER DIST. CENTER MOSTELLER DIST. INDUSTRIAL -
CENTER
FRANCISCAN HEALTH FRANCISCAN HEALTH MEDICAL -
PERIMETER PARK BUILDING A INDUST -
PERIMETER PARK BUILDING B INDUST -
CREEK ROAD BUILDING 1 INDUST -
CREEK ROAD BUILDING 2 INDUST -
WEST LAKE CENTER WEST LAKE CENTER OFFICE -
EXECUTIVE PLAZA I EXECUTIVE PLAZA I OFFICE -
EXECUTIVE PLAZA II EXECUTIVE PLAZA
II OFFICE -
LAKE FOREST PLACE LAKE FOREST PLACE OFFICE -
HUNTINGTON BANK HUNTINGTON BANK OFFICE -
OHIO NATIONAL OHIO NATIONAL OFFICE 19,500
CORNELL COMMERCE CORNELL COMMERCE INDUSTRIAL -
CLEVELAND, OHIO
---------------
ROCK RUN - NORTH ROCK RUN - NORTH OFFICE 723
ROCK RUN - CENTER ROCK RUN - CENTER OFFICE 895
ROCK RUN - SOUTH ROCK RUN - SOUTH OFFICE 757
FREEDOM SQUARE I FREEDOM SQUARE I OFFICE -
FREEDOM SQUARE II FREEDOM SQUARE II OFFICE 1,498
CORPORATE PLAZA I CORPORATE PLAZA I OFFICE 1,841
CORPORATE PLAZA II CORPORATE PLAZA OFFICE 1,575
II
ONE CORPORATE ONE CORPORATE OFFICE 1,103
EXCHANGE EXCHANGE
CORPORATE PLACE CORPORATE PLACE OFFICE -
CORPORATE CIRCLE CORPORATE CIRCLE OFFICE -
CORPORATE CENTER I CORPORATE CENTER OFFICE -
I
CORPORATE CENTER II CORPORATE CENTER OFFICE -
II
COLUMBUS, OHIO
--------------
CORP. PARK AT LITEL OFFICE -
TUTTLE CRSG
CORP. PARK AT STERLING 1 OFFICE -
TUTTLE CRSG
CORP. PARK AT INDIANA OFFICE -
TUTTLE CRSG INSURANCE
CORP. PARK AT STERLING 2 OFFICE -
TUTTLE CRSG
CORP. PARK AT CARDINAL HEALTH OFFICE -
TUTTLE CRSG
CORP. PARK AT STERLING 3 OFFICE -
TUTTLE CRSG
CORP. PARK AT NATIONWIDE OFFICE -
UTTLE CRSG
CORP. PARK AT LAZARUS GROUND RETAIL -
TUTTLE CRSG LEASE
CORP. PARK AT XEROX OFFICE 4,500
TUTTLE CRSG
SOUTH POINTE BUILDING A INDUSTRIAL -
SOUTH POINTE BUILDING B INDUSTRIAL -
PET FOODS BUILD- PET FOODS INDUSTRIAL 3,607
TO-SUIT DISTRIBUTION
GALYAN'S GALYAN'S RETAIL 3,135
TUTTLE RETAIL CENTER TUTTLE RETAIL RETAIL -
CENTER
MBM BUILDING MBM BUILDING INDUSTRIAL -
METROCENTER III METROCENTER III OFFICE -
SCIOTO CORPORATE CENTER SCIOTO CORPORATE OFFICE -
CENTER
V.A. HOSPITAL V.A. HOSPITAL MEDICAL 6,082
DAYTON, OHIO
------------
SUGARCREEK PLAZA SUGARCREEK PLAZA RETAIL 3,995
LIVONIA, MICHIGAN
-----------------
LIVONIA BUILDING A OFFICE -
LIVONIA BUILDING B OFFICE -
DECATUR, ILLINOIS
-----------------
PARK 101 BUILDING #3 INDUSTRIAL 1,927
PARK 101 BUILDING #8 INDUSTRIAL 1,001
PARK 101 ILL POWER LAND INDUSTRIAL -
LEASE
BLOOMINGTON, ILLINOIS
---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA RETAIL 5,100
CHAMPAIGN, ILLINOIS
-------------------
MARKET VIEW MARKET VIEW RETAIL 4,104
SHOPPING CTR CENTER
ST. LOUIS, MISSOURI
-------------------
LAUMEIER I LAUMEIER I OFFICE -
LAUMEIER II LAUMEIER II OFFICE -
WESTVIEW PLACE WESTVIEW PLACE OFFICE -
WESTMARK WESTMARK OFFICE -
ALFA - LAVAL ALFA - LAVAL INDUST -
I-70 CENTER I-70 CENTER INDUST -
1920 BELTWAY 1920 BELTWAY INDUST 1,396
INTERAMERICAN INTERAMERICAN INDUST -
VARIOUS LOCATIONS
-----------------
LAND IMP. - N/A N/A -
UNDEVELOPED LAND
ELIMINATIONS -
-------
TOTALS $261,815
=======
</TABLE>
-48-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
INITIAL COST TO
PARTNERSHIP COSTS (1)
------------------- CAPITALIZED
BUILDINGS/ SUBSEQUENT TO
LOCATION/DEVELOPMENT BUILDING LAND IMPROVEMENTS ACQUISITION
-------------------- -------- ---- ------------ -------------
<S> <C> <C> <C> <C>
INDIANAPOLIS, INDIANA
---------------------
PARK 100 BUSINESS PARK BUILDING #32 64 740 230
PARK 100 BUSINESS PARK BUILDING #34 131 1,455 217
PARK 100 BUSINESS PARK BUILDING #38 25 241 26
PARK 100 BUSINESS PARK BUILDING #79 184 1,764 269
PARK 100 BUSINESS PARK BUILDING #80 251 2,412 179
PARK 100 BUSINESS PARK BUILDING #83 247 2,572 147
PARK 100 BUSINESS PARK BUILDING #84 347 2,604 169
PARK 100 BUSINESS PARK BUILDING #95 642 4,756 207
PARK 100 BUSINESS PARK BUILDING #96 1,414 8,734 452
PARK 100 BUSINESS PARK BUILDING #97 676 4,294 1,230
PARK 100 BUSINESS PARK BUILDING #98 473 6,022 1,656
PARK 100 BUSINESS PARK BUILDING #100 103 2,179 652
PARK 100 BUSINESS PARK BUILDING #107 99 1,575 138
PARK 100 BUSINESS PARK BUILDING #109 240 1,865 (101)
PARK 100 BUSINESS PARK BUILDING #116 341 3,144 (75)
PARK 100 BUSINESS PARK BUILDING #118 226 2,229 155
PARK 100 BUSINESS PARK BUILDING #119 388 3,386 291
PARK 100 BUSINESS PARK BUILDING #121 592 960 115
PARK 100 BUSINESS PARK BUILDING #122 284 3,359 316
PARK 100 BUSINESS PARK BUILDING #125 674 5,712 -
PARK 100 BUSINESS PARK BUILDING #126 165 1,362 136
PARK 100 BUSINESS PARK BUILDING #127 96 1,726 371
PARK 100 BUSINESS PARK BUILDING #128 904 8,429 -
PARK 100 BUSINESS PARK BUILDING #129 865 5,468 -
PARK 100 BUSINESS PARK BUILDING #130 513 3,611 -
GEORGETOWN ROAD BUILDING 1 362 2,341 -
GEORGETOWN ROAD BUILDING 2 374 2,492 -
GEORGETOWN ROAD BUILDING 3 421 1,873 -
PARK 100 BUSINESS PARK NORGATE LAND 51 - -
LEASE
PARK 100 BUSINESS PARK SCHAHET HOTELS 131 - (131)
LAND LEASE
PARK 100 BUSINESS PARK KENNY ROGERS 56 - 9
LAND LEASE
PARK 100 BUSINESS PARK NORCO LAND LEASE - 38 (1)
PARK 100 BUSINESS PARK ZOLLMAN LAND
LEASE 115 - -
SHADELAND STATION 7351 SHADELAND 101 1,359 146
SHADELAND STATION BUILDING
#204/205 260 2,595 319
SHADELAND STATION 7240 SHADELAND 152 3,113 797
SHADELAND STATION 7330 SHADELAND 255 4,045 (172)
SHADELAND STATION 7369 SHADELAND 100 1,129 79
SHADELAND STATION 7340 SHADELAND 165 2,458 159
SHADELAND STATION 7400 SHADELAND 570 2,959 363
CASTLETON CORNER CUB PLAZA 540 4,850 222
CASTLETON MICHAEL'S PLAZA
SHOPPING CENTER 749 3,400 309
SOUTH PARK, INDIANA BUILDING #1 287 2,328 382
SOUTH PARK, INDIANA BUILDING #2 334 3,081 821
SOUTH PARK, INDIANA BUILDING #3 208 2,150 420
SOUTH PARK, INDIANA BRYLANE PARKING - 54 3
LOT LEASE
SOUTH PARK, INDIANA LEE'S INN LAND - 5 28
LEASE
GREENWOOD CORNER GREENWOOD CORNER 390 3,435 (75)
GREENWOOD CORNER 1st INDIANA BANK
BRANCH 46 245 16
CARMEL MEDICAL I CARMEL MEDICAL I - 3,710 (383)
ST. FRANCIS ST. FRANCIS - 5,839 230
COMMUNITY MOB COMMUNITY MOB 350 1,925 800
CARMEL MEDICAL II CARMEL MEDICAL
II - 4,000 294
HILLSDALE TECHNECENTER BUILDING #4 366 4,711 322
HILLSDALE TECHNECENTER BUILDING #5 251 3,235 161
HILLSDALE TECHNECENTER BUILDING #6 315 4,054 141
KEYSTONE AT THE 8465 KEYSTONE 89 1,302 24
CROSSING
WOODFIELD AT THE WOODFIELD II 719 9,106 859
CROSSING
WOODFIELD AT THE WOODFIELD III 3,767 19,817 2,218
CROSSING
KEYSTONE AT THE 3520 COMMERCE 19 560 59
CROSSING CRSG
ONE PARKWOOD ONE PARKWOOD 1,018 9,578 419
TWO PARKWOOD TWO PARKWOOD 861 5,134 2,112
PALOMAR PALOMAR 158 1,148 361
FRANKLIN ROAD FRANKLIN ROAD 594 3,986 1,629
BUSINESS CTR. BUSINESS CTR.
NAMPAC BUILDING NAMPAC BUILDING 274 1,622 106
HAMILTON CROSSING BUILDING #1 526 2,424 334
KEYSTONE AT THE F.C. TUCKER
CROSSING BUILDING - 264 13
PARK FLETCHER BUILDING #14 76 722 98
6060 GUION ROAD 6060 GUION ROAD
(VANSTAR) (VANSTAR) 511 2,656 -
4750 KENTUCKY AVENUE 4750 KENTUCKY 246 2,260 112
AVENUE
4316 WEST MINNESOTA 4316 WEST 287 2,178 170
MINNESOTA
FORT WAYNE, INDIANA
-------------------
COLDWATER CROSSING COLDWATER 2,310 15,827 821
SHOPPES
LEBANON, INDIANA
----------------
AMERICAN AIR AMERICAN AIR 177 3,053 -
FILTER FILTER
NASHVILLE, TENNESSEE
--------------------
KEEBLER BUILDING KEEBLER BUILDING 307 1,183 46
HAYWOOD OAKS BUILDING #2 395 1,767 100
TECHNECENTER
HAYWOOD OAKS BUILDING #3 346 1,575 254
TECHNECENTER
HAYWOOD OAKS BUILDING #4 435 1,948 52
TECHNECENTER
HAYWOOD OAKS BUILDING #5 629 2,816 380
TECHNECENTER
HAYWOOD OAKS BUILDING #6 924 5,730 475
TECHNECENTER
HAYWOOD OAKS BUILDING #7 456 1,642 593
TECHNECENTER
GREENBRIAR GREENBRIAR 1,445 4,490 562
BUSINESS PARK
HEBRON, KENTUCKY
----------------
SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,460 -
SOUTHPARK, KENTUCKY BUILDING #1 682 3,725 237
SOUTHPARK, KENTUCKY BUILDING #3 841 3,382 231
SOUTHPARK, KENTUCKY REDKEN 779 3,095 116
FLORENCE, KENTUCKY
------------------
EMPIRE COMMERCE EMPIRE COMMERCE 581 2,784 197
CINCINNATI, OHIO
----------------
PARK 50 TECHNECENTER BUILDING #17 500 6,200 (516)
PARK 50 TECHNECENTER BUILDING #20 461 7,450 (497)
PARK 50 TECHNECENTER BUILDING #24 151 809 93
PARK 50 TECHNECENTER BUILDING #25 1,161 3,758 266
PARK 50 TECHNECENTER SDRC BUILDING 911 19,004 1,004
FIDELITY DRIVE DUN & BRADSTREET 270 2,510 342
WORLD PARK BUILDING #5 270 3,260 435
WORLD PARK BUILDING #6 378 4,488 (793)
WORLD PARK BUILDING #7 525 4,150 204
WORLD PARK BUILDING #8 561 5,309 195
WORLD PARK BUILDING #9 317 2,993 247
WORLD PARK BUILDING #11 460 4,701 310
WORLD PARK BUILDING #14 380 3,592 184
WORLD PARK BUILDING #15 373 2,274 301
WORLD PARK BUILDING #16 321 3,033 20
EASTGATE PLAZA EASTGATE PLAZA 2,030 4,079 778
FAIRFIELD BUILDING D 135 1,639 28
BUSINESS CENTER
FAIRFIELD BUILDING E 398 2,461 84
BUSINESS CENTER
UNIVERSITY MOVING UNIVERSITY 248 1,612 61
MOVING
TRI-COUNTY OFFICE BUILDINGS #1 - 217 5,211 611
PARK #4
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,012 8,452 534
GOVERNOR'S PLAZA KING'S MALL II 1,928 3,636 353
GOVERNOR'S PLAZA KOHLS 1,345 3,575 164
SOFA EXPRESS SOFA EXPRESS 145 771 10
OFFICE MAX OFFICE MAX 651 1,223 63
312 ELM BUILDING 312 ELM 4,750 43,823 5,151
311 ELM STREET ZUSSMAN 339 6,226 435
ENTERPRISE BUILDING 1 1,030 5,482 492
BUSINESS PARK
ENTERPRISE BUILDING 2 733 3,443 1,050
BUSINESS PARK
ENTERPRISE BUILDING A 119 685 35
BUSINESS PARK
ENTERPRISE BUILDING B 119 1,117 56
BUSINESS PARK
ENTERPRISE BUILDING D 243 1,802 318
BUSINESS PARK
312 PLUM STREET S & L DATA 2,539 24,312 1,443
TRIANGLE OFFICE BUILDINGS #1 - 1,000 10,440 1,647
PARK #38
GOVERNOR'S HILL 8790 GOVERNOR'S 400 4,581 382
HILL
GOVERNOR'S HILL 8700 GOVERNOR'S 459 5,705 151
HILL
GOVERNOR'S HILL 8800 GOVERNOR'S 225 2,305 413
HILL
GOVERNOR'S HILL 8600 GOVERNOR'S 1,220 17,689 1,520
HILL
GOVERNOR'S POINTE 4770 GOVERNOR'S 586 7,609 185
POINTE
GOVERNOR'S POINTE 4700 BUILDING 584 5,465 159
GOVERNOR'S POINTE 4900 BUILDING 654 4,017 545
GOVERNOR'S POINTE 4705 GOVERNOR'S 719 6,910 1,825
POINTE
GOVERNOR'S POINTE 4800 GOVERNOR'S 978 4,742 738
POINTE
BIGG'S BIGG'S 2,107 4,545 1,828
SUPERCENTER SUPERCENTER
GOVERNOR'S POINTE 4605 GOVERNOR'S 630 16,236 1,142
POINTE
MONTGOMERY STEINBERG'S 260 852 117
CROSSING
MONTGOMERY SPORTS UNLIMITED 778 3,687 133
CROSSING II
GOVERNOR'S PLAZA KING'S AUTO 1,085 3,859 805
MALL I
MOSTELLER DIST. MOSTELLER DIST. 1,220 4,209 1,560
CENTER CENTER
FRANCISCAN HEALTH FRANCISCAN - 3,241 -
HEALTH
PERIMETER PARK BUILDING A 229 1,274 16
PERIMETER PARK BUILDING B 244 1,001 13
CREEK ROAD BUILDING 1 103 792 8
CREEK ROAD BUILDING 2 132 1,093 12
WEST LAKE CENTER WEST LAKE CENTER 2,459 15,972 204
EXECUTIVE PLAZA I EXECUTIVE PLAZA I 728 5,015 - -
EXECUTIVE PLAZA II EXECUTIVE PLAZA II 728 5,220 -
LAKE FOREST PLACE LAKE FOREST PLACE 1,953 19,164 -
HUNTINGTON BANK HUNTINGTON BANK 175 220 -
OHIO NATIONAL OHIO NATIONAL 2,463 24,408 -
CORNELL COMMERCE CORNELL COMMERCE 495 4,501 118
CLEVELAND, OHIO
---------------
ROCK RUN - NORTH ROCK RUN-NORTH 837 5,351 64
ROCK RUN - CENTER ROCK RUN-CENTER 1,046 6,686 -
ROCK RUN - SOUTH ROCK RUN-SOUTH 877 5,604 59
FREEDOM SQUARE I FREEDOM SQUARE I 595 3,796 19
FREEDOM SQUARE II FREEDOM SQUARE II 1,746 11,141 56
CORPORATE PLAZA I CORPORATE PLAZA I 2,116 13,528 261
CORPORATE PLAZA II CORPORATE PLAZA II 1,841 11,768 -
ONE CORPORATE ONE CORPORATE 1,287 8,226 17
EXCHANGE EXCHANGE
CORPORATE PLACE CORPORATE PLACE 1,161 7,425 102
CORPORATE CIRCLE CORPORATE CIRCLE 1,696 10,846 155
CORPORATE CENTER I CORPORATE CENTER I 1,048 6,695 87
CORPORATE CENTER II CORPORATE CENTER 1,048 6,712 -
II
COLUMBUS, OHIO
--------------
CORP. PARK AT LITEL 2,618 17,428 1,147
TUTTLE CRSG
CORP. PARK AT STERLING 1 1,494 11,856 664
TUTTLE CRSG
CORP. PARK AT INDIANA 717 2,081 941
TUTTLE CRSG INSURANCE
CORP. PARK AT STERLING 2 605 5,300 595
TUTTLE CRSG
CORP. PARK AT JOHN ALDEN LIFE 1,066 6,856 198
TUTTLE CRSG INSURANCE
CORP. PARK AT CARDINAL HEALTH 1,600 9,556 754
TUTTLE CRSG
CORP. PARK AT STERLING 3 1,601 8,207 -
TUTTLE CRSG
CORP. PARK AT NATIONWIDE 4,815 18,554 -
TUTTLE CRSG
CORP. PARK AT LAZARUS GROUND 852 - -
TUTTLE CRSG LEASE
CORP. PARK AT XEROX 1,580 8,630 321
TUTTLE CRSG
SOUTH POINTE BUILDING A 594 4,355 1,185
SOUTH POINTE BUILDING B 556 4,985 318
PET FOODS BUILD- PET FOODS 268 4,932 1,167
TO-SUIT DISTRIBUTION
GALYAN'S GALYAN'S 1,925 3,146 213
TUTTLE RETAIL TUTTLE RETAIL 2,625 6,598 -
CENTER CENTER
MBM BUILDING MBM BUILDING 170 1,916 72
METROCENTER III METROCENTER III 887 2,727 667
SCIOTO CORPORATE SCIOTO CORPORATE 1,137 3,147 43
CENTER CENTER
V.A. HOSPITAL V.A. HOSPITAL 703 9,239 308
DAYTON, OHIO
------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 898 6,492 (337)
LIVONIA, MICHIGAN
-----------------
LIVONIA BUILDING A - 9,474 883
LIVONIA BUILDING B - 11,930 1,135
DECATUR, ILLINOIS
-----------------
PARK 101 BUILDING #3 275 2,405 722
PARK 101 BUILDING #8 80 1,660 27
PARK 101 ILL POWER LAND 212 - -
LEASE
BLOOMINGTON, ILLINOIS
---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 766 7,199 1,039
CHAMPAIGN, ILLINOIS
-------------------
MARKET VIEW MARKET VIEW
SHOPPING CTR CENTER 740 6,830 (324)
ST. LOUIS, MISSOURI
-------------------
LAUMEIER I LAUMEIER I 1,220 9,091 576
LAUMEIER II LAUMEIER II 1,258 9,054 792
WESTVIEW PLACE WESTVIEW PLACE 673 8,389 442
WESTMARK WESTMARK 1,200 9,759 408
ALFA - LAVAL ALFA - LAVAL 1,158 4,944 161
I-70 CENTER I-70 CENTER 950 3,915 93
1920 BELTWAY 1920 BELTWAY 605 1,462 36
INTERAMERICAN INTERAMERICAN 1,416 7,661 7
VARIOUS LOCATIONS
-----------------
LAND IMP. - N/A - - -
UNDEVELOPED LAND
ELIMINATIONS - 117 -
------- ------- ------
TOTALS 138,622 977,363 66,674
======= ======= ======
</TABLE>
-49-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31,1996
<TABLE>
<CAPTION>
(IN THOUSANDS)
GROSS BOOK VALUE AT
DECEMBER 31, 1996
---------------------------
LOCATION/ LAND & BUILDINGS/
DEVELOPMENT BUILDING IMPROVEMENTS IMPROVEMENTS TOTAL
- -------------------- ------------- ------------- ------------- ------
<S> <C> <C> <C> <C>
INDIANAPOLIS, INDIANA
- ----------------------
PARK 100 BUSINESS PARK BUILDING #32 65 969 1,034
PARK 100 BUSINESS PARK BUILDING #34 133 1,671 1,803
PARK 100 BUSINESS PARK BUILDING #38 26 266 292
PARK 100 BUSINESS PARK BUILDING #79 187 2,030 2,217
PARK 100 BUSINESS PARK BUILDING #80 256 2,586 2,842
PARK 100 BUSINESS PARK BUILDING #83 252 2,714 2,966
PARK 100 BUSINESS PARK BUILDING #84 354 2,767 3,120
PARK 100 BUSINESS PARK BUILDING #95 642 4,963 5,605
PARK 100 BUSINESS PARK BUILDING #96 1,436 9,164 10,600
PARK 100 BUSINESS PARK BUILDING #97 676 5,524 6,200
PARK 100 BUSINESS PARK BUILDING #98 273 7,878 8,151
PARK 100 BUSINESS PARK BUILDING #100 103 2,831 2,934
PARK 100 BUSINESS PARK BUILDING #107 99 1,713 1,812
PARK 100 BUSINESS PARK BUILDING #109 246 1,758 2,004
PARK 100 BUSINESS PARK BUILDING #116 348 3,062 3,410
PARK 100 BUSINESS PARK BUILDING #118 230 2,379 2,610
PARK 100 BUSINESS PARK BUILDING #119 395 3,670 4,065
PARK 100 BUSINESS PARK BUILDING #121 604 1,063 1,667
PARK 100 BUSINESS PARK BUILDING #122 290 3,670 3,959
PARK 100 BUSINESS PARK BUILDING #125 674 5,712 6,386
PARK 100 BUSINESS PARK BUILDING #126 165 1,498 1,663
PARK 100 BUSINESS PARK BUILDING #127 96 2,096 2,192
PARK 100 BUSINESS PARK BUILDING #128 904 8,429 9,333
PARK 100 BUSINESS PARK BUILDING #129 865 5,468 6,332
PARK 100 BUSINESS PARK BUILDING #130 513 3,611 4,124
GEORGETOWN ROAD BUILDING 1 362 2,341 2,703
GEORGETOWN ROAD BUILDING 2 374 2,492 2,866
GEORGETOWN ROAD BUILDING 3 421 1,873 2,294
PARK 100 BUSINESS PARK NORGATE LAND LEASE 51 - 51
PARK 100 BUSINESS PARK SCHAHET HOTELS - - -
LAND LEASE
PARK 100 BUSINESS PARK KENNY ROGERS LAND 56 9 65
LEASE
PARK 100 BUSINESS PARK NORCO LAND LEASE - 37 37
PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE 115 - 115
SHADELAND STATION 7351 SHADELAND 103 1,504 1,606
SHADELAND STATION BUILDING #204/205 266 2,909 3,174
SHADELAND STATION 7240 SHADELAND 152 3,910 4,062
SHADELAND STATION 7330 SHADELAND 260 3,868 4,128
SHADELAND STATION 7369 SHADELAND 102 1,206 1,308
SHADELAND STATION 7340 SHADELAND 169 2,613 2,782
SHADELAND STATION 7400 SHADELAND 581 3,311 3,892
CASTLETON CORNER CUB PLAZA 550 5,062 5,612
CASTLETON SHOPPING CENTER MICHAEL'S PLAZA 764 3,694 4,458
SOUTH PARK, INDIANA BUILDING #1 292 2,704 2,997
SOUTH PARK, INDIANA BUILDING #2 341 3,895 4,236
SOUTH PARK, INDIANA BUILDING #3 212 2,566 2,778
SOUTH PARK, INDIANA BRYLANE PARKING - 57 57
LOT LEASE
SOUTH PARK, INDIANA LEE'S INN LAND LEASE - 33 33
GREENWOOD CORNER GREENWOOD CORNER 400 3,350 3,750
GREENWOOD CORNER 1st INDIANA BANK 47 260 307
BRANCH
CARMEL MEDICAL I CARMEL MEDICAL I - 3,327 3,327
ST. FRANCIS ST. FRANCIS - 6,069 6,069
COMMUNITY MOB COMMUNITY MOB 350 2,724 3,075
CARMEL MEDICAL II CARMEL MEDICAL II - 4,294 4,294
HILLSDALE TECHNECENTER BUILDING #4 366 5,033 5,399
HILLSDALE TECHNECENTER BUILDING #5 251 3,396 3,647
HILLSDALE TECHNECENTER BUILDING #6 315 4,195 4,510
KEYSTONE AT THE CROSSING 8465 KEYSTONE 89 1,326 1,415
WOODFIELD AT THE CROSSING WOODFIELD II 733 9,951 10,684
WOODFIELD AT THE CROSSING WOODFIELD III 3,843 21,959 25,802
KEYSTONE AT THE CROSSING 3520 COMMERCE CRSG. - 638 638
ONE PARKWOOD ONE PARKWOOD 1,018 9,997 11,015
TWO PARKWOOD TWO PARKWOOD 861 7,245 8,106
PALOMAR PALOMAR 158 1,509 1,667
FRANKLIN ROAD FRANKLIN ROAD 594 5,615 6,209
BUSINESS CTR. BUSINESS CTR.
NAMPAC BUILDING NAMPAC BUILDING 274 1,728 2,002
HAMILTON CROSSING BUILDING #1 536 2,748 3,284
KEYSTONE AT THE CROSSING F.C. TUCKER BLDG. - 277 277
PARK FLETCHER BUILDING #14 76 821 896
6060 GUION ROAD 6060 GUION ROAD 511 2,656 3,167
(VANSTAR) (VANSTAR)
4750 KENTUCKY AVENUE 4750 KENTUCKY AVE. 246 2,372 2,618
4316 WEST MINNESOTA 4316 W. MINNESOTA 287 2,348 2,634
FORT WAYNE, IN
- --------------
COLDWATER CROSSING COLDWATER SHOPPES 2,310 16,648 18,958
LEBANON, IN
- -----------
AMERICAN AIR FILTER AMERICAN AIR 177 3,053 3,230
FILTER
NASHVILLE, TENNESSEE
- --------------------
KEEBLER BUILDING KEEBLER BUILDING 307 1,228 1,536
HAYWOOD OAKS TECHNECENTER BUILDING #2 395 1,867 2,262
HAYWOOD OAKS TECHNECENTER BUILDING #3 346 1,829 2,175
HAYWOOD OAKS TECHNECENTER BUILDING #4 435 1,999 2,435
HAYWOOD OAKS TECHNECENTER BUILDING #5 629 3,196 3,825
HAYWOOD OAKS TECHNECENTER BUILDING #6 946 6,183 7,129
HAYWOOD OAKS TECHNECENTER BUILDING #7 456 2,235 2,692
GREENBRIAR BUSINESS PARK GREENBRIAR 1,445 5,053 6,498
HEBRON, KENTUCKY
- ----------------
SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,060 5,145
SOUTHPARK, KENTUCKY BUILDING #1 696 3,947 4,644
SOUTHPARK, KENTUCKY BUILDING #3 858 3,596 4,454
SOUTHPARK, KENTUCKY REDKEN 779 3,211 3,990
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMMERCE EMPIRE COMMERCE 581 2,981 3,562
CINCINNATI, OHIO
- ----------------
PARK 50 TECHNECENTER BUILDING #17 510 5,674 6,184
PARK 50 TECHNECENTER BUILDING #20 469 6,945 7,414
PARK 50 TECHNECENTER BUILDING #24 154 899 1,053
PARK 50 TECHNECENTER BUILDING #25 1,184 4,001 5,185
PARK 50 TECHNECENTER SDRC BUILDING 929 19,989 20,919
FIDELITY DRIVE DUN & BRADSTREET 277 2,845 3,122
WORLD PARK BUILDING #5 276 3,690 3,965
WORLD PARK BUILDING #6 385 3,688 4,073
WORLD PARK BUILDING #7 537 4,343 4,879
WORLD PARK BUILDING #8 561 5,504 6,065
WORLD PARK BUILDING #9 317 3,240 3,557
WORLD PARK BUILDING #11 460 5,011 5,471
WORLD PARK BUILDING #14 380 3,777 4,156
WORLD PARK BUILDING #15 381 2,567 2,948
WORLD PARK BUILDING #16 321 3,053 3,374
EASTGATE PLAZA EASTGATE PLAZA 2,030 4,857 6,887
FAIRFIELD BUSINESS CENTER BUILDING D 135 1,667 1,801
FAIRFIELD BUSINESS CENTER BUILDING E 398 2,545 2,943
UNIVERSITY MOVING UNIVERSITY MOVING 248 1,674 1,921
TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 221 5,818 6,039
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,053 8,946 10,998
GOVERNOR'S PLAZA KING'S MALL II 1,952 3,965 5,917
GOVERNOR'S PLAZA KOHLS 1,345 3,740 5,085
SOFA EXPRESS SOFA EXPRESS 145 781 926
OFFICE MAX OFFICE MAX 651 1,286 1,937
312 ELM BUILDING 312 ELM 5,428 48,295 53,724
311 ELM STREET ZUSSMAN - 7,000 7,000
ENTERPRISE BUSINESS PARK BUILDING 1 1,051 5,954 7,004
ENTERPRISE BUSINESS PARK BUILDING 2 747 4,479 5,226
ENTERPRISE BUSINESS PARK BUILDING A 119 720 839
ENTERPRISE BUSINESS PARK BUILDING B 119 1,173 1,292
ENTERPRISE BUSINESS PARK BUILDING D 243 2,120 2,363
312 PLUM STREET S & L DATA 2,590 25,704 28,294
TRIANGLE OFFICE PARK BUILDINGS #1-#38 1,018 12,069 13,087
GOVERNOR'S HILL 8790 GOVERNOR'S 408 4,955 5,363
HILL
GOVERNOR'S HILL 8700 GOVERNOR'S 468 5,847 6,315
HILL
GOVERNOR'S HILL 8800 GOVERNOR'S 231 2,712 2,943
HILL
GOVERNOR'S HILL 8600 GOVERNOR'S 1,245 19,184 20,429
HILL
GOVERNOR'S POINTE 4770 GOVERNOR'S 596 7,784 8,380
POINTE
GOVERNOR'S POINTE 4700 BUILDING 595 5,614 6,208
GOVERNOR'S POINTE 4900 BUILDING 673 4,543 5,216
GOVERNOR'S POINTE 4705 GOVERNOR'S 733 8,721 9,454
POINTE
GOVERNOR'S POINTE 4800 GOVERNOR'S 998 5,460 6,458
POINTE
BIGG'S SUPERCENTER BIGG'S SUPERCENTER 2,107 6,373 8,480
GOVERNOR'S POINTE 4605 GOVERNOR'S 643 17,365 18,008
POINTE
MONTGOMERY CROSSING STEINBERG'S 260 969 1,229
MONTGOMERY CROSSING I SPORTS UNLIMITED 778 3,820 4,598
GOVERNOR'S PLAZA KING'S AUTO MALL I 1,124 4,625 5,749
MOSTELLER DIST. CENTER MOSTELLER DIST. 1,220 5,769 6,989
CENTER
FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,241 3,241
PERIMETER PARK BUILDING A 229 1,290 1,519
PERIMETER PARK BUILDING B 244 1,013 1,258
CREEK ROAD BUILDING 1 103 801 903
CREEK ROAD BUILDING 2 132 1,105 1,237
WEST LAKE CENTER WEST LAKE CENTER 2,459 16,176 18,635
EXECUTIVE PLAZA I EXECUTIVE PLAZA I 728 5,015 5,743
EXECUTIVE PLAZA II EXECUTIVE PLAZA II 728 5,220 5,947
LAKE FOREST PLACE LAKE FOREST PLACE 1,953 19,164 21,117
HUNTINGTON BANK HUNTINGTON BANK 175 220 395
OHIO NATIONAL OHIO NATIONAL 2,463 24,408 26,870
CORNELL COMMERCE CORNELL COMMERCE 495 4,619 5,114
CLEVELAND, OHIO
- ---------------
ROCK RUN - NORTH ROCK RUN-NORTH 837 5,414 6,251
ROCK RUN - CENTER ROCK RUN-CENTER 1,046 6,686 7,732
ROCK RUN - SOUTH ROCK RUN-SOUTH 877 5,663 6,540
FREEDOM SQUARE I FREEDOM SQUARE I 595 3,816 4,410
FREEDOM SQUARE II FREEDOM SQUARE II 1,746 11,197 12,943
CORPORATE PLAZA I CORPORATE PLAZA I 2,116 13,789 15,905
CORPORATE PLAZA II CORPORATE PLAZA II 1,841 11,768 13,608
ONE CORPORATE ONE CORPORATE 1,287 8,244 9,530
EXCHANGE EXCHANGE
CORPORATE PLACE CORPORATE PLACE 1,163 7,525 8,688
CORPORATE CIRCLE CORPORATE CIRCLE 1,698 10,999 12,697
CORPORATE CENTER I CORPORATE CENTER I 1,040 6,791 7,831
CORPORATE CENTER II CORPORATE CENTER II 1,048 6,712 7,760
COLUMBUS, OHIO
- --------------
CORP. PARK AT LITEL 2,670 18,523 21,193
TUTTLE CRSG
CORP. PARK AT STERLING 1 1,524 12,490 14,014
TUTTLE CRSG
CORP. PARK AT INDIANA INSURANCE 717 3,022 3,739
TUTTLE CRSG
CORP. PARK AT STERLING 2 605 5,895 6,500
TUTTLE CRSG
CORP. PARK AT JOHN ALDEN LIFE 1,066 7,054 8,120
TUTTLE CRSG INSURANCE
CORP. PARK AT CARDINAL HEALTH 1,600 10,310 11,910
TUTTLE CRSG
CORP. PARK AT STERLING 3 1,601 8,207 9,807
TUTTLE CRSG
CORP. PARK AT NATIONWIDE 4,815 18,554 23,369
TUTTLE CRSG
CORP. PARK AT LAZARUS GROUND 852 - 852
TUTTLE CRSG LEASE
CORP. PARK AT XEROX 1,580 8,951 10,531
TUTTLE CRSG
SOUTH POINTE BUILDING A 594 5,540 6,134
SOUTH POINTE BUILDING B 556 5,303 5,859
PET FOODS BUILD-TO-SUIT PET FOODS 1,031 5,336 6,368
DISTRIBUTION
GALYAN'S GALYAN'S 1,925 3,359 5,284
TUTTLE RETAIL CENTER TUTTLE RETAIL 2,625 6,598 9,224
CENTER
MBM BUILDING MBM BUILDING 170 1,988 2,158
METROCENTER III METROCENTER III 887 3,395 4,281
SCIOTO CORPORATE CENTER SCIOTO CORPORATE 1,137 3,190 4 327
CENTER
V.A. HOSPITAL V.A. HOSPITAL 703 9,547 10,250
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 924 6,129 7,053
LIVONIA, MICHIGAN
- -----------------
LIVONIA BUILDING A - 10,357 10,357
LIVONIA BUILDING B - 13,065 13,065
DECATUR, ILLINOIS
- -----------------
PARK 101 BUILDING #3 280 3,122 3,402
PARK 101 BUILDING #8 184 1,583 1,767
PARK 101 ILL POWER LAND 212 - 212
LEASE
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 786 8,218 9,004
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW 755 6,491 7,246
SHOPPING CTR CENTER
ST. LOUIS, MISSOURI
- -------------------
LAUMEIER I LAUMEIER I 1,220 9,668 10,888
LAUMEIER II LAUMEIER II 1,258 9,846 11,104
WESTVIEW PLACE WESTVIEW PLACE 673 8,831 9,504
WESTMARK WESTMARK 1,200 10,167 11,367
ALFA - LAVAL ALFA - LAVAL 1,158 5,105 6,263
I-70 CENTER I-70 CENTER 950 4,008 4,958
1920 BELTWAY 1920 BELTWAY 605 1,498 2,103
INTERAMERICAN INTERAMERICAN 1,416 7,668 9,084
VARIOUS LOCATIONS
- -----------------
LAND IMP. - N/A - - -
UNDEVELOPED LAND
ELIMINATIONS - (1,110) (1,110)
------- --------- ---------
TOTALS 140,391 1,041,040 1,181,431
======= ========= =========
</TABLE>
-50-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
<TABLE>
<CAPTION>
(IN THOUSANDS)
DEPRE-
ACCUMULATED DATE OF DATE CIABLE
LOCATION/DEVELOPMENT BUILDING DEPRECIATION CONSTRUCTION ACQUIRED LIFE
- -------------------- -------- ------------ ------------ -------- ------
<S> <C> <C> <C> <C> <C>
INDIANAPOLIS, INDIANA
- ---------------------
PARK 100 BUSINESS PARK BUILDING #32 259 1978 1986 (4)
PARK 100 BUSINESS PARK BUILDING #34 473 1979 1986 (4)
PARK 100 BUSINESS PARK BUILDING #38 23 1978 1993 (4)
PARK 100 BUSINESS PARK BUILDING #79 213 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #80 221 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #83 216 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #84 219 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #95 361 1993 1994 (4)
PARK 100 BUSINESS PARK BUILDING #96 446 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #97 542 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #98 696 1968 1994 (4)
PARK 100 BUSINESS PARK BUILDING #100 171 1995 1995 (4)
PARK 100 BUSINESS PARK BUILDING #107 105 1984 1995 (4)
PARK 100 BUSINESS PARK BUILDING #109 511 1985 1986 (4)
PARK 100 BUSINESS PARK BUILDING #116 632 1988 1988 (4)
PARK 100 BUSINESS PARK BUILDING #118 199 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #119 327 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #121 85 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #122 338 1990 1993 (4)
PARK 100 BUSINESS PARK BUILDING #125 209 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #126 113 1984 1994 (4)
PARK 100 BUSINESS PARK BUILDING #127 90 1995 1995 (4)
PARK 100 BUSINESS PARK BUILDING #128 311 1996 1996 (4)
PARK 100 BUSINESS PARK BUILDING #129 - 1996 1996 (4)
PARK 100 BUSINESS PARK BUILDING #130 2 1996 1996 (4)
GEORGETOWN ROAD BUILDING 1 5 1987 1996 (4)
GEORGETOWN ROAD BUILDING 2 5 1987 1996 (4)
GEORGETOWN ROAD BUILDING 3 4 1987 1996 (4)
PARK 100 BUSINESS PARK NORGATE LAND - N/A 1995 (4)
LEASE
PARK 100 BUSINESS PARK SCHAHET HOTELS - N/A 1995 (4)
LAND LEASE
PARK 100 BUSINESS PARK KENNY ROGERS 1 N/A 1995 (4)
LAND LEASE
PARK 100 BUSINESS PARK NORCO LAND LEASE 3 N/A 1995 (4)
PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE - N/A 1994 (4)
SHADELAND STATION 7351 SHADELAND 138 1983 1993 (4)
SHADELAND STATION BUILDING 804 1984 1986 (4)
#204/205
SHADELAND STATION 7240 SHADELAND 1,044 1985 1993 (4)
SHADELAND STATION 7330 SHADELAND 763 1988 1988 (4)
SHADELAND STATION 7369 SHADELAND 98 1989 1993 (4)
SHADELAND STATION 7340 SHADELAND 212 1989 1993 (4)
SHADELAND STATION 7400 SHADELAND 338 1990 1993 (4)
CASTLETON CORNER CUB PLAZA 1,365 1986 1986 (4)
CASTLETON SHOPPING MICHAEL'S PLAZA 330 1984 1993 (4)
CENTER
SOUTH PARK, INDIANA BUILDING #1 363 1989 1993 (4)
SOUTH PARK, INDIANA BUILDING #2 328 1990 1993 (4)
SOUTH PARK, INDIANA BUILDING #3 344 1990 1993 (4)
SOUTH PARK, INDIANA BRYLANE PARKING 14 N/A 1994 (4)
LOT LEASE
SOUTH PARK, INDIANA LEE'S INN LAND - N/A 1995 (4)
LEASE
GREENWOOD CORNER GREENWOOD CORNER 885 1986 1986 (4)
GREENWOOD CORNER 1st INDIANA BANK 21 1988 1993 (4)
BRANCH
CARMEL MEDICAL I CARMEL MEDICAL I 885 1985 1986 (4)
ST. FRANCIS ST. FRANCIS 434 1995 1995 (4)
COMMUNITY MOB COMMUNITY MOB 128 1995 1995 (4)
CARMEL MEDICAL II CARMEL MEDICAL II 640 1989 1990 (4)
HILLSDALE TECHNECENTER BUILDING #4 421 1987 1993 (4)
HILLSDALE TECHNECENTER BUILDING #5 315 1987 1993 (4)
HILLSDALE TECHNECENTER BUILDING #6 334 1987 1993 (4)
KEYSTONE AT THE 8465 KEYSTONE 52 1983 1995 (4)
CROSSING
WOODFIELD AT THE WOODFIELD II 926 1987 1993 (4)
CROSSING
WOODFIELD AT THE WOODFIELD III 1,979 1989 1993 (4)
CROSSING
KEYSTONE AT THE 3520 COMMERCE 158 1976 1993 (4)
CROSSING CROSSING
ONE PARKWOOD ONE PARKWOOD 266 1989 1995 (4)
TWO PARKWOOD TWO PARKWOOD 307 1996 1996 (4)
PALOMAR PALOMAR 74 1973 1995 (4)
FRANKLIN ROAD FRANKLIN ROAD 258 1962 1995 (4)
BUSINESS CTR. BUSINESS CTR.
NAMPAC BUILDING NAMPAC BUILDING 71 1974 1995 (4)
HAMILTON CROSSING BUILDING #1 254 1989 1993 (4)
KEYSTONE AT THE F.C. TUCKER 22 1978 1993 (4)
CROSSING BUILDING
PARK FLETCHER BUILDING #14 68 1978 1995 (4)
6060 GUION ROAD 6060 GUION ROAD 33 1968 1996 (4)
(VANDSTAR) (VANSTAR)
4750 KENTUCKY 4750 KENTUCKY 16 1974 1996 (4)
AVENUE AVENUE
4316 W. MINNESOTA 4316 W. MINNESOTA 16 1970 1996 (4)
FORT WAYNE, INDIANA
- -------------------
COLDWATER CROSSING COLDWATER 1,058 1990 1994 (4)
SHOPPES
LEBANON, INDIANA
- ----------------
AMERICAN AIR FILTER AMERICAN AIR 51 1996 1996 (4)
FILTER
NASHVILLE, TENNESSEE
- --------------------
KEEBLER BUILDING KEEBLER BUILDING 55 1985 1995 (4)
HAYWOOD OAKS BUILDING #2 160 1988 1993 (4)
TECHNECENTER
HAYWOOD OAKS BUILDING #3 242 1988 1993 (4)
TECHNECENTER
HAYWOOD OAKS BUILDING #4 161 1988 1993 (4)
TECHNECENTER
HAYWOOD OAKS BUILDING #5 343 1988 1993 (4)
TECHNECENTER
HAYWOOD OAKS BUILDING #6 537 1989 1993 (4)
TECHNECENTER
HAYWOOD OAKS BUILDING #7 117 1995 1995 (4)
TECHNECENTER
GREENBRIAR BUSINESS GREENBRIAR 340 1986 1993 (4)
PARK
HEBRON, KENTUCKY
- ----------------
SOUTHPARK, KENTUCKY CR SERVICES 257 1994 1994 (4)
SOUTHPARK, KENTUCKY BUILDING #1 322 1990 1993 (4)
SOUTHPARK, KENTUCKY BUILDING #3 282 1991 1993 (4)
SOUTHPARK, KENTUCKY REDKEN 203 1994 1994 (4)
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMMERCE EMPIRE COMMERCE 35 1973 1996 (4)
CINCINNATI, OHIO
- ----------------
PARK 50 TECHNECENTER BUILDING #17 1,802 1985 1986 (4)
TECHNECENTER
PARK 50 TECHNECENTER BUILDING #20 1,451 1987 1988 (4)
TECHNECENTER
PARK 50 TECHNECENTER BUILDING #24 88 1989 1993 (4)
TECHNECENTER
PARK 50 TECHNECENTER BUILDING #25 320 1989 1993 (4)
TECHNECENTER
PARK 50 TECHNECENTER SDRC BUILDING 1,572 1991 1993 (4)
TECHNECENTER
FIDELITY DRIVE DUN & BRADSTREET 824 1972 1986 (4)
WORLD PARK BUILDING #5 954 1987 1990 (4)
WORLD PARK BUILDING #6 862 1987 1990 (4)
WORLD PARK BUILDING #7 830 1987 1990 (4)
WORLD PARK BUILDING #8 437 1989 1993 (4)
WORLD PARK BUILDING #9 284 1989 1993 (4)
WORLD PARK BUILDING #11 456 1989 1993 (4)
WORLD PARK BUILDING #14 316 1989 1993 (4)
WORLD PARK BUILDING #15 252 1990 1993 (4)
WORLD PARK BUILDING #16 247 1989 1993 (4)
EASTGATE PLAZA EASTGATE PLAZA 213 1990 1995 (4)
FAIRFIELD BUSINESS BUILDING D 47 1990 1995 (4)
CENTER
FAIRFIELD BUSINESS BUILDING E 74 1990 1995 (4)
CENTER
UNIVERSITY MOVING UNIVERSITY MOVING 75 1991 1995 (4)
TRI-COUNTY OFFICE PARK BUILDINGS #1-#4 558 1971 1993 (4)
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 707 1990 1993 (4)
GOVERNOR'S PLAZA KING'S MALL II 308 1988 1989 (4)
GOVERNOR'S PLAZA KOHLS 196 1994 1994 (4)
SOFA EXPRESS SOFA EXPRESS 25 1995 1995 (4)
OFFICE MAX OFFICE MAX 46 1995 1995 (4)
312 ELM BUILDING 312 ELM 4,066 1992 1993 (4)
311 ELM STREET ZUSSMAN 582 1902 1993 (4)
ENTERPRISE BUSINESS BUILDING 1 504 1990 1993 (4)
PARK
ENTERPRISE BUSINESS BUILDING 2 561 1990 1993 (4)
PARK
ENTERPRISE BUSINESS BUILDING A 29 1987 1995 (4)
PARK
ENTERPRISE BUSINESS BUILDING B 46 1988 1995 (4)
PARK
ENTERPRISE BUSINESS BUILDING D 110 1989 1995 (4)
PARK
312 PLUM STREET S & L DATA 2,148 1987 1993 (4)
TRIANGLE OFFICE BUILDINGS #1- 4,237 1965 1986 (4)
PARK #38
GOVERNOR'S HILL 8790 GOVERNOR'S 442 1985 1991 (4)
HILL
GOVERNOR'S HILL 8700 GOVERNOR'S 470 1985 1993 (4)
HILL
GOVERNOR'S HILL 8800 GOVERNOR'S 1,009 1985 1986 (4)
HILL
GOVERNOR'S HILL 8600 GOVERNOR'S 1,688 1986 1991 (4)
HILL
GOVERNOR'S POINTE 4770 GOVERNOR'S 1,650 1986 1988 (4)
POINTE
GOVERNOR'S POINTE 4700 BUILDING 1,260 1987 1988 (4)
GOVERNOR'S POINTE 4900 BUILDING 1,130 1987 1989 (4)
GOVERNOR'S POINTE 4705 GOVERNOR'S 736 1988 1993 (4)
POINTE
GOVERNOR'S POINTE 4800 GOVERNOR'S 612 1989 1993 (4)
POINTE
BIGG'S SUPERCENTER BIGG'S 75 1996 1996 (4)
SUPERCENTER
GOVERNOR'S POINTE 4605 GOVERNOR'S 1,451 1990 1993 (4)
POINTE
MONTGOMERY CROSSING STEINBERG'S 49 1993 1993 (4)
MONTGOMERY CROSSING II SPORTS UNLIMITED 224 1994 1994 (4)
GOVERNOR'S PLAZA KING'S AUTO 954 1990 1993 (4)
MALL I
MOSTELLER DIST. MOSTELLER DIST. 127 1950 1996 (4)
CENTER CENTER
FRANCISCAN HEALTH FRANCISCAN HEALTH 8 1996 1996 (4)
PERIMETER PARK BUILDING A 5 1991 1996 (4)
PERIMETER PARK BUILDING B 4 1991 1996 (4)
CREEK ROAD BUILDING 1 4 1971 1996 (4)
CREEK ROAD BUILDING 2 6 1971 1996 (4)
WEST LAKE CENTER WEST LAKE CENTER 136 1981 1996 (4)
EXECUTIVE PLAZA I EXECUTIVE PLAZA I 4 1980 1996 (4)
EXECUTIVE PLAZA II EXECUTIVE PLAZA II 5 1981 1996 (4)
LAKE FOREST PLACE LAKE FOREST PLACE 164 1985 1996 (4)
HUNTINGTON BANK HUNTINGTON BANK 2 1986 1996 (4)
OHIO NATIONAL OHIO NATIONAL 311 1996 1996 (4)
CORNELL COMMERCE CORNELL COMMERCE 126 1989 1996 (4)
CLEVELAND, OHIO
- ---------------
ROCK RUN - NORTH ROCK RUN-NORTH 133 1984 1996 (4)
ROCK RUN - CENTER ROCK RUN-CENTER 153 1985 1996 (4)
ROCK RUN - SOUTH ROCK RUN-SOUTH 136 1986 1996 (4)
FREEDOM SQUARE I FREEDOM SQUARE I 88 1980 1996 (4)
FREEDOM SQUARE II FREEDOM SQUARE II 260 1987 1996 (4)
CORPORATE PLAZA I CORPORATE PLAZA I 319 1989 1996 (4)
CORPORATE PLAZA II CORPORATE PLAZA 270 1991 1996 (4)
II
ONE CORPORATE ONE CORPORATE 190 1989 1996 (4)
EXCHANGE EXCHANGE
CORPORATE PLACE CORPORATE PLACE 19 1988 1996 (4)
CORPORATE CIRCLE CORPORATE CIRCLE 28 1983 1996 (4)
CORPORATE CENTER I CORPORATE CENTER I 80 1985 1996 (4)
CORPORATE CENTER II CORPORATE CENTER 77 1987 1996 (4)
II
COLUMBUS, OHIO
- --------------
CORP. PARK AT LITEL 1,447 1990 1993 (4)
TUTTLE CRSG
CORP. PARK AT STERLING 1 983 1990 1993 (4)
TUTTLE CRSG
CORP. PARK AT INDIANA 382 1994 1994 (4)
TUTTLE CRSG INSURANCE
CORP. PARK AT STERLING 2 239 1995 1995 (4)
TUTTLE CRSG
CORP. PARK AT JOHN ALDEN LIFE 303 1995 1995 (4)
TUTTLE CRSG INSURANCE
CORP. PARK AT CARDINAL HEALTH 650 1995 1995 (4)
TUTTLE CRSG
CORP. PARK AT STERLING 3 61 1995 1995 (4)
TUTTLE CRSG
CORP. PARK AT NATIONWIDE 360 1996 1996 (4)
TUTTLE CRSG
CORP. PARK AT LAZARUS GROUND - N/A 1996 (4)
TUTTLE CRSG LEASE
CORP. PARK AT XEROX 592 1992 1994 (4)
TUTTLE CRSG
SOUTH POINTE BUILDING A 249 1995 1995 (4)
SOUTH POINTE BUILDING B 101 1996 1996 (4)
PET FOODS BUILD- PET FOODS 299 1993 1993 (4)
TO-SUIT DISTRIBUTION
GALYAN'S GALYAN'S 180 1994 1994 (4)
TUTTLE RETAIL TUTTLE RETAIL 126 1995 1995 (4)
CENTER CENTER
MBM BUILDING MBM BUILDING 97 1978 1994 (4)
METROCENTER III METROCENTER III 81 1983 1996 (4)
SCIOTO CORPORATE SCIOTO CORPORATE 12 1987 1996 (4)
CENTER CENTER
V.A. HOSPITAL V.A. HOSPITAL 530 1994 1994 (4)
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 1,284 1988 1988 (4)
LIVONIA, MICHIGAN
- -----------------
LIVONIA BUILDING A 974 1988 1993 (4)
LIVONIA BUILDING B 1,148 1989 1993 (4)
DECATUR, ILLINOIS
- -----------------
PARK 101 BUILDING #3 945 1979 1986 (4)
PARK 101 BUILDING #8 423 1980 1986 (4)
PARK 101 ILL POWER LAND - N/A 1994 (4)
LEASE
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 1,654 1987 1988 (4)
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW 1,729 1985 1986 (4)
SHOPPING CTR CENTER
ST. LOUIS, MISSOURI
- -------------------
LAUMEIER I LAUMEIER I 391 1987 1995 (4)
LAUMEIER II LAUMEIER II 424 1988 1995 (4)
WESTVIEW PLACE WESTVIEW PLACE 377 1988 1995 (4)
WESTMARK WESTMARK 292 1987 1995 (4)
ALFA - LAVAL ALFA - LAVAL 21 1996 1996 (4)
I-70 CENTER I-70 CENTER 42 1986 1996 (4)
1920 BELTWAY 1920 BELTWAY 16 1986 1996 (4)
INTERAMERICAN INTERAMERICAN 64 1996 1996 (4)
VARIOUS LOCATIONS
- -----------------
LAND IMP. - N/A 457
UNDEVELOPED LAND
ELIMINATIONS -
------
TOTALS 82,207
======
</TABLE>
-51-
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(IN THOUSANDS)
(1) Costs capitalized subsequent to acquisition include decreases for purchase
price reduction payments received and land sales or takedowns.
(2) The Partnership owns a 66.67% interest in th partnership owning this
building. The Partnership shares in the cash flow of this building in
accordance with the Partnership's ownership interests.
(3) The four buildings comprising Tri-County Office Park were constructed in
1971, 1973 and 1982.
(4) Depreciation of real estate is computed using the straight-line method
over 40 years for building and shorter periods based on lease terms (generally
3 to 10 years) for tenant improvements.
<TABLE>
<CAPTION>
Real Estate Assets Accumulated Depreciation
---------------------------- --------------------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning of year $ 804,164 $653,552 $540,376 $56,335 $38,058 $23,725
Additions during
year:
Acquisitions 213,979 114,705 57,218 - - -
Construction
costs and
tenant
improvements 173,186 84,790 41,125 - - -
Depreciation
expense - - - 27,568 20,416 15,068
Acquisition of
minority interest
and joint venture
interest 21,627 796 15,742 - - -
--------- ------- ------- ------ ------ ------
1,212,956 853,843 654,461 83,903 58,474 38,793
Deductions
during year:
Cost of real
estate sold (11,347) (4,393) (909) (586) (1,259) -
Contribution to
Joint Venture (19,175) (44,725) - (108) (319) -
Other (1,003) (561) - (1,003) (561) (735)
--------- ------- ------- ------ ------ ------
$1,181,431 $804,164 $653,552 $82,207 $56,335 $38,058
========= ======= ======= ====== ====== ======
</TABLE>
-52-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
DUKE REALTY LIMITED PARTNERSHIP
By: Duke Realty Investments, Inc.
Its General Partner
March 14, 1997 By: /s/ Thomas L. Hefner
----------------- ------------------------------
Thomas L. Hefner
President and Chief Executive
Officer
By: /s/ Darell E. Zink, Jr.
------------------------------
Darell E. Zink, Jr.
Executive Vice President and
Chief Financial Officer
By: /s/ Dennis D. Oklak
------------------------------
Dennis D. Oklak
Vice President and Treasurer
(Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Signature Date Title
--------- ---- -----
/s/ John W. Wynne * 3/14/97 Chairman of the Board
----------------------
John W. Wynne
/s/ Thomas L. Hefner * 3/14/97 President and Chief Executive
---------------------- Officer and Director
Thomas L. Hefner
/s/ Daniel C. Staton * 3/14/97 Executive Vice President and
---------------------- Chief Operating Officer and
Daniel C. Staton Director
/s/ Darell E. Zink, Jr.* 3/14/97 Executive Vice President and
----------------------- Chief Financial Officer and
Darell E. Zink, Jr. Director
-53-
<PAGE>
/s/ Geoffrey Button * 3/14/97 Director
----------------------
Geoffrey Button
/s/ John D. Peterson * 3/14/97 Director
----------------------
John D. Peterson
/s/ Ngaire E. Cuneo * 3/14/97 Director
----------------------
Ngaire E. Cuneo
/s/ L. Ben Lytle * 3/14/97 Director
----------------------
L. Ben Lytle
/s/ Jay J. Strauss * 3/14/97 Director
----------------------
Jay J. Strauss
/s/ Howard L. Feinsand * 3/14/97 Director
----------------------
Howard L. Feinsand
/s/ James E. Rogers * 3/14/97 Director
----------------------
James E. Rogers
* By Dennis D. Oklak, Attorney-in-Fact /s/ Dennis D. Oklak
---------------------
-54-
EXHIBIT 21
SUBSIDIARIES OF DUKE REALTY LIMITED PARTNERSHIP
State of Names Under Which
Incorporation Subsidiary Does
Subsidiary or Organization Business
--------------------- ----------------- ---------------------
Duke Realty Services Indiana Duke Realty Services
Limited Partnership Limited Partnership
Duke Realty Construction, Indiana Duke Realty
Inc. Construction, Inc.
Duke Construction Limited Indiana Duke Construction
Partnership Limited Partnership
B/D Limited Partnership Indiana B/D Limited
Partnership
Lamida Partners Limited Ohio Lamida Partners
Partnership Limited Partnership
Duna Developers Ohio Duna Developers
Kenwood Office Associates Ohio Kenwood Office
Associates
Park Creek Venture Indiana Park Creek Venture
Parkrite Limited Indiana Parkrite Limited
Partnership Partnership
Post Road Limited Indiana Post Road Limited
Partnership Partnership
Shadeland Station Office Indiana Shadeland Station
Associates II Limited Office Associates
Partnership II Limited
Partnership
SCRED Ohio Limited Ohio SCRED Ohio Limited
Partnership Partnership
Dugan Realty L.L.C. Indiana Dugan Realty L.L.C.
Duke/Tees Joint Venture Indiana Duke/Tees J.V.
Park Fletcher Limited Indiana Park Fletcher
Partnership 2728 Limited
Partnership 2728
Cincinnati Development Ohio Cincinnati
Group L.L.C. Development
Group L.L.C.
Exhibit 23
The Partners
DUKE REALTY LIMITED PARTNERSHIP:
We consent to incorporation by reference in the registration
statements (No. 33-61361 and No. 333-04695) on Form S-3 of
Duke Realty Investments, Inc. and Duke Realty Limited
Partnership of our report dated January 29, 1997, relating
to the consolidated balance sheets of Duke Realty Limited
Partnership and Subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations,
partners' equity, and cash flows for each of the years in
the three-year period ended December 31, 1996, and the
related schedule, which report appears in the December 31,
1996 annual report on Form 10-K of Duke Realty Limited
Partnership.
/s/ KPMG Peat Marwick, LLP
Indianapolis, Indiana
March 12, 1997
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ Geoffrey Button
---------------------
Geoffrey Button
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to file
the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ Ngaire E. Cuneo
---------------------
Ngaire E. Cuneo
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ Howard L. Feinsand
------------------------
Howard L. Feinsand
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ John D. Peterson
----------------------
John D. Peterson
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ James E. Rogers
---------------------
James E. Rogers
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and Dennis D.
Oklak, and each of them, his attorneys-in-fact and agents,
with full power of substitution and resubstitution for him
in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ L. Ben Lytle
------------------
L. Ben Lytle
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ Daniel C. Staton
----------------------
Daniel C. Staton
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ Jay J. Strauss
-------------------
Jay J. Strauss
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any all capacities, to sign the annual report on
Form 10-K of Duke Realty Limited Partnership for the year
ended December 31, 1996, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneysin-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 30, 1997
/s/ John W. Wynne
-------------------
John W. Wynne
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Darell E. Zink, Jr., John Gaskin and Dennis D. Oklak, and
each of them, his attorneys-in-fact and agents, with full
power of substitution and resubstitution for him in any all
capacities, to sign the annual report on Form 10-K of Duke
Realty Limited Partnership for the year ended December 31,
1996, and any amendment thereof, and to file the same, with
exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission,
granting unto each of such attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary in connection with such
matters and hereby ratifying and confirming all that each of
such attorneys-in-fact and agents or his substitute or
substitutes may do or cause to be done by virtue hereof.
Dated: January 30, 1997
/s/ Thomas L. Hefner
---------------------
Thomas L. Hefner
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, John Gaskin and Dennis D. Oklak, and each
of them, his attorneys-in-fact and agents, with full power
of substitution and resubstitution for him in any all
capacities, to sign the annual report on Form 10-K of Duke
Realty Limited Partnership for the year ended December 31,
1996, and any amendment thereof, and to file the same, with
exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission,
granting unto each of such attorneys-in-fact and agents full
power and authority to do and perform each and every
act and thing requisite and necessary in connection with
such matters and hereby ratifying and confirming all that
each of such attorneys-in-fact and agents or his substitute
or substitutes may do or cause to be done by virtue hereof.
Dated: January 30, 1997
/s/ Darell E. Zink, Jr.
-------------------------
Darell E. Zink, Jr.
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., and John Gaskin, and
each of them, his attorneys-in-fact and agents, with full
power of substitution and resubstitution for him in any all
capacities, to sign the annual report on Form 10-K of Duke
Realty Limited Partnership for the year ended December 31,
1996, and any amendment thereof, and to file the same, with
exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission,
granting unto each of such attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary in connection with such
matters and hereby ratifying and confirming all that each of
such attorneys-in-fact and agents or his substitute or
substitutes may do or cause to be done by virtue hereof.
Dated: January 30, 1997
/s/ Dennis D. Oklak
--------------------
Dennis D. Oklak
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DUKE
REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES' DECEMBER 31, 1996 CONSOLIDATED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,346
<SECURITIES> 0
<RECEIVABLES> 30,620
<ALLOWANCES> (1,550)
<INVENTORY> 0
<CURRENT-ASSETS> 31,192
<PP&E> 1,290,676
<DEPRECIATION> (82,207)
<TOTAL-ASSETS> 1,362,399
<CURRENT-LIABILITIES> 66,935
<BONDS> 525,815
0
0
<COMMON> 0
<OTHER-SE> 769,269
<TOTAL-LIABILITY-AND-EQUITY> 1,362,399
<SALES> 0
<TOTAL-REVENUES> 187,806
<CGS> 94,204
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,545
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,344
<INCOME-PRETAX> 58,713
<INCOME-TAX> 0
<INCOME-CONTINUING> 58,713
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,713
<EPS-PRIMARY> $1.84
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 99.1
SELECTED QUARTERLY FINANCIAL INFORMATION
(UNAUDITED)
Selected quarterly information for the years ended December
31, 1996 and 1995 is as follows (in thousands, except per
Unit amounts):
Quarter Ended
------------------------------------------------------
1996 December 31 September 30 June 30 March 31
------------------- ------------ -------------- ------------ --------
[S] [C] [C] [C] [C]
Revenues from
Rental Operations $ 46,451 $ 41,448 $ 37,724 $36,537
Revenues from
Service Operations $ 5,404 $ 5,042 $ 5,137 $ 4,346
Net income available
for common units $ 17,415 $ 15,571 $ 14,150 $11,577
Net income per
common unit $ 0.53 $ 0.47 $ 0.43 $ 0.40
Weighted average
common units 33,147 33,053 33,011 28,686
Funds From
Operations (1) $ 23,803 $ 23,071 $ 21,768 $18,792
Cash flow provided
by (used by):
Operating activities $ 26,426 $ 29,908 $ 24,831 $14,305
Investing activities (74,606) (108,819) (13,719) (79,865)
Financing activities 41,622 90,541 (22,719) 71,759
1995
----------------------
Revenues from
Rental Operations $ 32,298 $ 29,098 $ 26,694 $25,551
Revenues from
Service Operations $ 4,496 $ 5,126 $ 4,320 $ 3,835
Net income available
for common units $ 11,399 $ 11,172 $ 10,155 $ 8,874
Net income per
common unit $ 0.40 $ 0.39 $ 0.39 $ 0.36
Weighted average
common units 28,303 28,300 26,113 24,388
Funds From
Operations (1) $ 17,910 $ 17,245 $ 15,531 $14,160
Cash flow provided
by (used by):
Operating activities $ 16,630 $ 21,453 $ 24,656 $15,898
Investing activities (100,325) (74,823) (79,445) (34,976)
Financing activities 29,775 91,871 68,085 (13,544)
(1)Funds From Operations is defined by the National Association of
Real Estate Investment Trusts as net income or loss excluding gains
or losses from debt restructuring and sales of property plus
depreciation and amortization, and after adjustments for minority
interest, unconsolidated partnerships and joint ventures
(adjustments for minority interest, unconsolidated partnerships and
joint ventures are calculated to reflect Funds From Operations on same
basis). Funds From Operations does not represent cash flow from
operations as defined by generally accepted accounting principles,
should not be considered as an alternative to net income as an
indicator of the Partnership's operating performance, and is not
indicative of cash available to fund all cash flow needs. In March
1995, NAREIT issued a clarification of its definition of FFO effective
for years beginning after December 31,1995. The clarification provides
that amortization of deferred financing costs and depreciation of
non-rental real estate assets are no longer to be added back to net
income in arriving at FFO. The Partnership adopted these changes
effective January 1, 1996, and the calculations of FFO for the quarterly
periods during the year ended December 31, 1995 have been revised
accordingly.
