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, 1997
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
------- -------
Commission file number 0-20625
-------
DUKE REALTY LIMITED PARTNERSHIP
----------------------------------
(Exact name of registrant as specified in its charter)
Indiana 35-1898425
---------------------------------- -----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
--------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)
(317) 808-6000
-----------------------------------------------------
(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
--------------------------- ------------------------------------------
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
--- ---
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 $125,887,724 based on the last reported
sale price of the common units of Duke Realty Investments, Inc., into
which Limited Partner Units are exchangeable, on March 1, 1999.
The number of Limited Partnership Units outstanding as of March 1, 1999
was 10,831,552.
<PAGE>
TABLE OF CONTENTS
FORM 10-K
Item No. PAGE(S)
------- -------
PART I
1. Business 1 - 4
2. Properties 4 - 17
3. Legal Proceedings 17
4. Submission of Matters to a
Vote of Security Holders 17
PART II
5. Market for the Registrant's Equity
and Related Security Holder Matters. 18
6. Selected Financial Data 18 - 19
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 19 - 27
7a. Quantitative and Qualitative Disclosure
About Market Risks 27 - 28
8. Financial Statements and Supplementary
Data. 28
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 28
PART III
10. Directors and Executive Officers of the
Registrant 29 - 32
11. Executive Compensation 32 - 40
12. Security Ownership of Certain Beneficial
Owners and Management 40
13. Certain Relationships and Related
Transactions 41
PART IV
14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 42 - 69
Signatures 70 - 71
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 28, 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" 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 88.8% of the partnership interest
("General Partner Units"). The remaining 11.2% of the Partnership is
owned by limited partners ("Limited Partner Units" and, together with the
General Partner Units, the "Common Units").
The Partnership's primarily business segment is the ownership and rental
of industrial, office and retail properties throughout the Midwest (See
discussion of Weeks merger below). As of December 31, 1998, the
Partnership owned interests in a diversified portfolio of 493 rental
properties comprising 59.3 million square feet (including 40 properties
and three expansions comprising 7.2 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; St. Louis, Missouri; Minneapolis,
Minnesota; Chicago, Illinois; 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 6.9 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 has rental
operations that are self-administered. In addition, the Partnership
conducts its service operations through Duke Realty Services Limited
Partnership and Duke Construction Limited Partnership, in which the
Partnership's controlled subsidiary, Duke Services, Inc., is the sole
general partner. 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.
- 1 -
<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;
Chicago, Illinois; Nashville, Tennessee; St. Louis, Missouri and
Minneapolis, Minnesota. The Partnership had 748 employees as of December
31, 1998.
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 and unconsolidated companies
(adjustments for minority interests and unconsolidated companies 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, 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 unit and effective rents in the markets where it owns properties
(see discussion of Weeks merger below). The Partnership also expects to
utilize its approximately 1,750 acres of unencumbered land and its many
business relationships with more than 3,600 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. 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.
- 2 -
<PAGE>
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 current 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
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 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 $1.4
billion through public debt and equity offerings during the three years
ended December 31, 1998. Based on these offerings, the General Partner
and the Partnership have demonstrated their ability 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
$450 million unsecured 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 outstanding
Common and Preferred Units and units of limited partnership interest
("Units") in the Operating Partnership plus outstanding indebtedness) at
December 31, 1998 was 27.75%. The Partnership's ratio of earnings to debt
service and ratio of earnings to fixed charges for the year ended December
31, 1998 were 2.54x and 2.05x, 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 and minority
interest in earnings of the Operating Partnership. Debt service consists
of interest expense and recurring principal amortization (excluding
maturities) and excludes amortization of debt issuance costs. In
computing the 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 and minority interest in
earnings of the Operating Partnership. 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.
MERGER WITH WEEKS CORPORATION
On March 1, 1999, the General Partner announced that it entered into an
Agreement and Plan of Merger, dated as of February 28, 1999 (the "Merger
Agreement"), with Weeks Corporation ("Weeks"), pursuant to which Weeks and
its consolidated subsidiary, Weeks Realty L.P. ("Weeks Operating
Partnership") will merge with and into the General Partner and the
Partnership. Weeks is a self-administered, self-managed, geographically
focused REIT that was organized in 1994. As of December 31, 1998, its in-
service property portfolio consisted of 300 industrial properties, 34
suburban office properties and five retail properties comprising 28.1
million square feet. As of December 31, 1998, the Weeks' primary markets
and the concentration of its portfolio (based on square footage of in-
service properties) were Atlanta, Georgia; Nashville, Tennessee; Miami,
Florida; Raleigh-Durham-Chapel Hill (the "Research Triangle"), North
- 3 -
<PAGE>
Carolina; Dallas/Ft. Worth, Texas; Orlando, Florida; and Spartanburg,
South Carolina. In addition, 31 industrial, suburban office and retail
properties were under development, in lease-up or under agreement to
acquire at December 31, 1998, comprising an additional 3.4 million square
feet. At December 31, 1998, the Weeks Operating Partnership had
approximately 7.3 million Common Units outstanding, and approximately $654
million aggregate principal amount of outstanding indebtedness. In the
merger, each outstanding common unit of the Weeks Operating Partnership
will be converted into the right to receive 1.38 Common Units of the
Partnership; each outstanding unit of 8.0% Series A Cumulative Redeemable
Preferred Equity of Weeks Operating Partnership will be converted into the
right to receive one depositary unit of the Partnership representing
1/1000 of a unit of 8.0% Series F Cumulative Redeemable Preferred Equity
of the Partnership; and each outstanding unit of 8.625% Series D
Cumulative Redeemable Preferred Equity of Weeks Operating Partnership will
be converted into the right to receive one depositary unit of the
Partnership representing 1/1000 of a unit of 8.625% Series H Cumulative
Redeemable Preferred Equity of the Partnership. The terms of the
Partnership's depositary units to be issued in the merger will be
identical to the terms of the Weeks Operating Partnership Series A and
Series D preferred equity. The merger of the Weeks Operating Partnership
into the Partnership is expected to qualify as a tax-free reorganization
and will be accounted for under the purchase method of accounting. The
transactions are expected to close in the second or third quarter of 1999,
subject to receipt of necessary approvals by the shareholders of the
General Partner and Weeks Corporation and satisfaction of customary
closing conditions.
If the merger between the Partnership and the Weeks Operating Partnership
is consummated as expected, the combined company will have significant
operations and assets located in southeastern markets where the
Partnership and its management have not traditionally operated or owned
assets. Since substantially all of the members of the Weeks Operating
Partnership's management are expected to remain with the combined company
for the foreseeable future after the merger, the Partnership expects
to have the necessary expertise to operate successfully in the new
markets. The combined company's operating performance will, however, be
exposed to the general economic conditions of its new markets and
could be adversely affected if conditions, such as an oversupply of space
or a reduction in demand for the types of properties supplied by the
combined company, become favorable.
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, 1998, the Partnership owns an interest in a
diversified portfolio of 493 commercial properties encompassing
approximately 59.3 million net rentable square feet (including 40
properties and three expansions comprising 7.2 million square feet
under development) located primarily in five states and approximately
1,750 acres of land for future development. The properties are
described on the following pages.
- 4 -
<PAGE>
<TABLE>
<CAPTION>
Net
Partner- Year Land Rentable %Leased
Name/ Ownership ship's Constd/ Area Area December
Location Interest Ownership Expanded (Acres) (sq. ft.) 31, 1998
- ---------------- ---------- -------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
IN-SERVICE
- -----------
INDUSTRIAL
- ----------
INDIANAPOLIS, INDIANA
PARK 100 BUS. PARK
Bldg. 48 Fee 50% [1] 1984 8.63 127,410 100%
Bldg. 49 Fee 50% [1] 1982 4.55 89,600 100%
Bldg. 50 Fee 50% [1] 1982 4.09 51,200 100%
Bldg. 52 Fee 50% [1] 1983 2.70 34,800 100%
Bldg. 53 Fee 50% [1] 1984 4.23 76,800 100%
Bldg. 54 Fee 50% [1] 1984 4.42 76,800 33%
Bldg. 55 Fee 50% [1] 1984 3.83 43,200 100%
Bldg. 56 Fee 50% [1] 1984 15.94 300,000 100%
Bldg. 57 Fee 50% [1] 1984 7.70 128,800 100%
Bldg. 58 Fee 50% [1] 1984 8.03 128,800 100%
Bldg. 59 Fee 50% [1] 1985 5.14 83,200 100%
Bldg. 60 Fee 50% [1] 1985 4.78 83,200 85%
Bldg. 62 Fee 50% [1] 1986 7.70 128,800 100%
Bldg. 67 Fee 50% [1] 1987 4.23 72,350 100%
Bldg. 68 Fee 50% [1] 1987 4.23 72,360 82%
Bldg. 71 Fee 50% [1] 1987 9.06 193,400 100%
Bldg. 74 Fee 10%-50% [2] 1988 12.41 257,400 100%
Bldg. 76 Fee 10%-50% [2] 1988 5.10 81,695 100%
Bldg. 78 Fee 10%-50% [2] 1988 21.80 512,777 100%
Bldg. 79 Fee 100% 1988 4.47 66,000 100%
Bldg. 80 Fee 100% 1988 4.47 66,000 100%
Bldg. 83 Fee 100% 1989 5.34 96,000 97%
Bldg. 84 Fee 100% 1989 5.34 96,000 73%
Bldg. 85 Fee 10%-50% [2] 1989 9.70 180,100 100%
Bldg. 89 Fee 10%-50% [2] 1990 11.28 311,600 100%
Bldg. 91 Fee 10%-50% [2] 1990/1996 7.53 196,800 100%
Bldg. 92 Fee 10%-50% [2] 1991 4.38 45,917 100%
Bldg. 95 Fee 100% 1993 15.23 336,000 100%
Bldg. 96 Fee 100% 1994/1997 27.69 737,850 100%
Bldg. 97 Fee 100% 1994 13.38 280,800 80%
Bldg. 98 Fee 100% 1968/1995 37.34 508,306 78%
Bldg. 99 Fee 50% [3] 1994 18.00 364,800 100%
Bldg. 100 Fee 100% 1995 7.00 117,500 100%
Bldg. 101 Fee 50% [1] 1983 4.37 45,000 64%
Bldg. 105 Fee 50% [1] 1983 4.64 41,400 100%
Bldg. 106 Fee 50% [1] 1978 4.64 41,400 100%
Bldg. 107 Fee 100% 1984 3.56 58,783 94%
Bldg. 108 Fee 50% [1] 1983 6.36 60,300 85%
Bldg. 109 Fee 100% 1985 4.80 46,000 82%
Bldg. 113 Fee 50% [1] 1987 6.20 72,000 90%
Bldg. 114 Fee 50% [1] 1987 6.20 56,700 97%
Bldg. 117 Fee 10%-50% [2] 1988 13.36 135,600 98%
Bldg. 120 Fee 10%-50% [2] 1989 4.54 54,982 86%
Bldg. 122 Fee 100% 1990 6.17 73,274 100%
Bldg. 125 Fee 100% 1994/1996 13.81 195,080 100%
Bldg. 126 Fee 100% 1984 4.04 60,100 86%
Bldg. 127 Fee 100% 1995 6.50 93,600 100%
Bldg. 128 Fee 100% 1996 14.40 322,000 100%
Bldg. 129 Fee 100% 1996 16.00 320,000 100%
Bldg. 130 Fee 100% 1996 9.70 152,000 92%
Bldg. 131 Fee 100% 1997 21.00 415,680 100%
Bldg. 133 Fee 100% 1997 1.30 20,530 100%
Bldg. 134 Fee 100% 1998 8.70 110,400 100%
Georgetown Ctr.
Bldg. 1 Fee 100% 1987 5.85 111,883 100%
Georgetown Ctr.
Bldg. 2 Fee 100% 1987 5.81 72,120 100%
Georgetown Ctr.
Bldg. 3 Fee 100% 1987 5.10 45,896 100%
- 5 -
<PAGE>
PARK FLETCHER
Bldg. 2 Fee 50% [1] 1970 1.31 20,160 100%
Bldg. 4 Fee 50% [1] 1974 1.73 23,000 0%
Bldg. 6 Fee 50% [1] 1971 3.13 36,180 80%
Bldg. 7 Fee 50% [1] 1974 3.00 41,900 100%
Bldg. 8 Fee 50% [1] 1974 2.11 18,000 100%
Bldg. 14 Fee 100% 1978 1.39 19,480 100%
Bldg. 15 Fee 50% [1] 1979 5.74 72,800 100%
Bldg. 16 Fee 50% [1] 1979 3.17 35,200 84%
Bldg. 18 Fee 50% [1] 1980 5.52 43,950 96%
Bldg. 21 Fee 50% [1] 1983 2.95 37,224 100%
Bldg. 22 Fee 50% [1] 1983 2.96 48,635 58%
Bldg. 26 Fee 50% [1] 1983 2.91 28,340 89%
Bldg. 27 Fee 25% [1] 1985 3.01 39,178 100%
Bldg. 28 Fee 25% [1] 1985 7.22 93,880 100%
Bldg. 29 Fee 50% [1] 1987 7.16 92,044 100%
Bldg. 30 Fee 50% [1] 1989 5.93 78,568 100%
Bldg. 31 Fee 50% [1] 1990 2.62 33,029 100%
Bldg. 32 Fee 50% [1] 1990 5.43 67,297 100%
Bldg. 33 Fee 50% [1] 1997 7.50 112,710 100%
Bldg. 34 Fee 50% [1] 1997 13.00 230,400 100%
Bldg. 35 Fee 50% [1] 1998 8.10 96,427 100%
Bldg. 36 Fee 50% [1] 1998 3.90 52,800 68%
Bldg. 37 Fee 50% [1] 1998 1.90 14,850 100%
SHADELAND STATION
7420-86 Shadeland Fee 100% 1984 4.09 48,600 100%
HUNTER CREEK BUS.PARK
Bldg. 1 Fee 10%-50% [2] 1989 5.97 86,500 77%
Bldg. 2 Fee 10%-50% [2] 1989 8.86 202,560 56%
HILLSDALE TECHNECTR.
Bldg. 1 Fee 50% [1] 1986 9.16 73,866 76%
Bldg. 2 Fee 50% [1] 1986 5.50 83,600 100%
Bldg. 3 Fee 50% [1] 1987 5.50 84,050 69%
Bldg. 4 Fee 100% 1987 7.85 73,874 100%
Bldg. 5 Fee 100% 1987 5.44 67,500 99%
Bldg. 6 Fee 100% 1987 4.25 64,000 100%
Franklin Road
Bus. Ctr. Fee 100% 1962,1971,
1974,1998 [4] 28.00 488,925 95%
Palomar Bus. Ctr. Fee 100% 1973 4.50 99,350 100%
Nampac Bldg. Fee 100% 1974 6.20 87,064 100%
NORTH AIRPORT PARK
Thomson Consumer
Elects. Fee 50% [1] 1996/1998 64.02 1,339,195 100%
Bldg. 2 Fee 100% 1997 22.50 377,280 100%
6060 Guion Road Fee 100% 1968/1974/1977 14.05 182,311 100%
4750 Kentucky Ave. Fee 100% 1974 11.01 125,000 100%
4316 West Minnesota Fee 100% 1970 10.40 121,250 100%
CARMEL, INDIANA
HAMILTON CROSSING
Bldg. 1 Fee 100% 1989 4.70 51,825 100%
GREENWOOD, INDIANA
SOUTH PARK BUS. CTR.
Bldg. 2 Fee 100% 1990 7.10 86,806 86%
- 6 -
<PAGE>
LEBANON, INDIANA
LEBANON BUS. PARK
American Air Filter Fee 100% 1996 10.40 153,600 100%
Little, Brown & Co. Fee 50% [1] 1996 31.60 500,455 100%
Purity Wholesale Fee 100% 1997 32.60 556,248 100%
Pamida Fee 100% 1997 14.90 200,000 100%
Prentice Hall Fee 100% 1998 38.90 576,040 100%
Lebanon (Gen. Cable) Fee 100% 1998 23.30 395,472 100%
CINCINNATI, OHIO
PARK 50 TECHNECTR.
Bldg. 20 Fee 100% 1987 8.37 96,000 94%
Bldg. 25 Fee 100% 1989 12.20 78,328 90%
GOVERNOR'S POINTE
4700 Bldg. Fee 100% 1987 5.51 76,400 91%
4800 Bldg. Fee 100% 1989 7.07 80,000 100%
4900 Bldg. Fee 100% 1987 9.41 79,034 98%
WORLD PARK
Bldg. 5 Fee 100% 1987 5.00 59,700 93%
Bldg. 6 Fee 100% 1987 7.26 92,400 100%
Bldg. 7 Fee 100% 1987 8.63 96,000 100%
Bldg. 8 Fee 100% 1989 14.60 192,000 100%
Bldg. 9 Fee 100% 1989 4.47 58,800 100%
Bldg. 11 Fee 100% 1989 8.98 96,000 100%
Bldg. 14 Fee 100% 1989 8.91 166,400 100%
Bldg. 15 Fee 100% 1990 6.50 93,600 100%
Bldg. 16 Fee 100% 1989 7.00 93,600 100%
MicroAge Fee 50% [1] 1994 15.10 304,000 100%
Bldg. 18 Fee 100% 1997 16.90 252,000 100%
Bldg. 28 Fee 100% 1998 11.60 220,160 100%
Bldg. 29 Fee 100% 1998 21.40 452,000 100%
Bldg. 31 Fee 100% 1998 7.10 122,120 100%
Union Ctr.Bldg. 1 Fee 100% 1998 4.00 59,400 35%
ENTERPRISE BUS. PARK
Bldg. 1 Fee 100% 1990 7.52 87,400 100%
Bldg. 2 Fee 100% 1990 7.52 84,940 100%
Bldg. A Fee 100% 1987 2.65 20,888 77%
Bldg. B Fee 100% 1988 2.65 34,940 54%
Bldg. D Fee 100% 1989 5.40 60,322 93%
FAIRFIELD BUS. CTR.
Bldg. D Fee 100% 1990 3.23 40,223 100%
Bldg. E Fee 100% 1990 6.07 75,600 100%
KENTUCKY DRIVE
7910 Kentucky Drive Fee 100% 1980 3.78 38,329 100%
7920 Kentucky Drive Fee 100% 1974 9.33 93,945 64%
OTHER INDUSTRIAL-CINCINNATI
U.S. Post
Office Bldg. Fee 40% [5] 1992 2.60 57,886 100%
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
Ctr. Fee 100% 1989 9.91 167,695 90%
Mosteller
Dist. Ctr. Fee 100% 1957/1996 25.80 357,796 100%
Mosteller
Dist. Ctr. II Fee 100% 1997 12.20 261,440 79%
Perimeter Park
Bldg. A Fee 100% 1991 2.92 28,100 100%
Perimeter Park
Bldg. B Fee 100% 1991 3.84 30,000 80%
- 7 -
<PAGE>
COLUMBUS, OHIO
Pet Foods Bldg. Fee 100% 1993/1995 16.22 276,000 100%
3800 Zane Trace
Dr. (MBM) Fee 100% 1978 3.98 83,167 100%
6600 Port Rd. Fee 100% 1995/1998 45.42 1,025,743 100%
3635 Zane Trace
Drive Fee 100% 1980 5.24 98,822 49%
Groveport Community
Ctr. #1 Fee 50% [6] 1998 17.78 354,750 64%
SOUTH POINTE BUS. CTR.
South Pointe A Fee 50% [1] 1995 14.06 293,824 100%
South Pointe B Fee 50% [1] 1996 13.16 307,200 100%
South Pointe C Fee 50% [1] 1996 12.57 322,000 100%
SouthPointe Bldg. D Fee 100% 1997 6.55 116,520 89%
SouthPointe Bldg. E Fee 100% 1997 6.55 82,520 71%
2190-2200 Westbelt
Dr. Fee 100% 1986 6.12 95,516 100%
HEBRON, KENTUCKY
SOUTHPARK BUS.CTR.
Bldg. 1 Fee 100% 1990 7.90 96,000 100%
Bldg. 3 Fee 100% 1991 10.79 192,000 100%
CR Services Fee 100% 1994 22.50 253,664 100%
Redken Laboratories Fee 100% 1994 28.79 166,400 100%
Skyport Bldg. I Fee 100% 1997 15.10 316,800 100%
LOUISVILLE, KENTUCKY
Dayco Fee 50% [1] 1995 30.00 282,539 100%
FLORENCE, KENTUCKY
Empire Commerce Ctr. Fee 100% 1973/1980 11.62 148,445 100%
CHICAGO, ILLINOIS
Kirk Road Bldg. Fee 100% 1990 3.50 62,400 100%
Abbot Bldg. Fee 100% 1989 2.15 43,930 100%
Janice Avenue Bldg. Fee 100% 1956 2.00 40,250 100%
Wolf Road Bldg. Fee 100% 1966/69 2.70 60,922 100%
Touhy Avenue Bldg. Fee 100% 1971 5.48 120,000 100%
Jarvis Avenue Bldg. Fee 100% 1969 5.35 111,728 100%
Laurel Drive Bldg. Fee 100% 1981 1.12 19,570 100%
Crossroads Bldg. I Fee 100% 1998 11.34 289,920 44%
Ballard Drive Bldg. Fee 100% 1985 3.33 54,274 100%
Oakmont Tech Ctr. Fee 100% 1989 6.30 111,659 100%
DECATUR, ILLINOIS
PARK 101 BUS. CTR.
Bldg. 3 Fee 100% 1979 5.76 75,600 91%
Bldg. 8 Fee 100% 1980 3.16 50,400 100%
NASHVILLE, TENNESSEE
HAYWOOD OAKS TECHNECTR.
Bldg. 2 Fee 100% 1988 2.94 50,400 71%
Bldg. 3 Fee 100% 1988 2.94 52,800 79%
Bldg. 4 Fee 100% 1988 5.23 46,800 100%
Bldg. 5 Fee 100% 1988 5.23 61,171 100%
Bldg. 6 Fee 100% 1989 10.53 113,400 71%
Bldg. 7 Fee 100% 1995 8.24 66,873 100%
Bldg. 8 Fee 100% 1997 15.44 71,615 100%
Greenbriar Bus. Park Fee 100% 1986 10.73 134,759 100%
Keebler Bldg. Fee 100% 1985 4.39 36,150 100%
MILWAUKEE, WISCONSIN
S.F. Music Box
Bldg. Fee 33.33% [7] 1993 8.90 153,600 100%
- 8 -
<PAGE>
ST. LOUIS, MISSOURI
I-70 Ctr. Fee 100% 1986 4.57 76,240 90%
1920 Beltway Fee 100% 1986 4.44 70,000 100%
Alfa Laval Fee 100% 1996 12.76 129,500 100%
Westport Ctr. I Fee 100% 1998 11.90 177,600 97%
Westport Ctr. II Fee 100% 1998 5.25 51,053 100%
St. Louis Bus Ctr A Fee 100% 1987 2.49 47,876 100%
St. Louis Bus Ctr B Fee 100% 1986 3.14 56,514 98%
St. Louis Bus Ctr C Fee 100% 1986 2.10 38,034 93%
St. Louis Bus Ctr D Fee 100% 1987 1.81 34,004 76%
Craig Park Ctr. Fee 100% 1984 3.19 42,210 93%
EARTH CITY
Dukeport I Fee 50% [1] 1996 21.24 403,200 100%
Dukeport II Fee 50% [1] 1997 14.70 244,800 100%
Dukeport III Fee 100% 1998 9.50 214,400 100%
Dukeport V Fee 100% 1998 6.00 96,000 29%
Horizon Bus. Ctr. Fee 100% 1985 5.31 75,746 100%
Warson Commerce Ctr. Fee 100% 1987/1988/1997 8.83 122,886 95%
RIVERPORT
Express Scripts
Srv.Ctr. Fee 100% 1992 10.81 119,000 100%
Riverport Dist.A Fee 100% 1990 5.96 100,000 100%
Riverport Dist.B Fee 100% 1989 3.36 45,200 100%
Southport I Fee 100% 1977 1.36 20,810 100%
Southport II Fee 100% 1978 1.53 22,400 100%
Southport Commerce
Ctr. Fee 100% 1978 2.65 34,873 100%
CLEVELAND, OHIO
Johnson Controls Fee 100% 1972 14.56 85,410 100%
Dyment Fee 100% 1988 12.00 246,140 100%
Mr. Coffee Fee 50% [1] 1997 35.00 458,000 100%
Fountain Parkway
Bldg I Fee 100% 1998 6.50 108,704 100%
Strongsville
Bldg. B Fee 100% 1998 4.50 67,540 100%
Enterprise Parkway Fee 100% 1974/1995 7.40 65,810 13%
Park 82 Bldg. 2 Fee 100% 1998 7.10 105,600 51%
SOLON INDUSTRIAL PARK
30600 Carter Fee 100% 1971 11.30 190,188 100%
6230 Cochran Fee 100% 1977 7.20 100,365 50%
31900 Solon-Front Fee 100% 1974 8.30 85,000 100%
5821 Solon Fee 100% 1970 5.80 66,638 78%
6161 Cochran Fee 100% 1978 6.10 62,400 85%
5901 Harper Fee 100% 1970 4.10 55,408 100%
29125 Solon Fee 100% 1980 5.90 47,329 100%
6661 Cochran Fee 100% 1979 4.70 39,000 87%
6521 Davis Fee 100% 1979 3.20 21,600 100%
31900 Solon-Rear Fee 100% 1982 5.30 7,193 100%
ST. PAUL, MINNESOTA
University Crossing Fee 100% 1990 5.65 83,291 100%
MINNEAPOLIS, MINNESOTA
Enterprise
Industrial Ctr. Fee 100% 1979 10.88 165,755 100%
Apollo Distribution
Ctr. Fee 100% 1997 11.05 168,480 100%
Sibley Industrial
Ctr. I Fee 100% 1973 2.88 54,612 100%
Sibley Industrial
Ctr. II Fee 100% 1972 2.58 37,800 0%
Sibley Industrial
Ctr. III Fee 100% 1968 4.10 32,810 100%
Yankee Place Fee 100% 1986 19.03 221,075 100%
Larc Industrial
Park I Fee 100% 1977 4.59 67,200 94%
Larc Industrial
Park II Fee 100% 1976 3.70 54,000 99%
Larc Industrial
Park III Fee 100% 1980 2.38 30,800 100%
Larc Industrial
Park IV Fee 100% 1980 1.06 13,800 100%
Larc Industrial
Park V Fee 100% 1980 1.54 22,880 100%
- 9 -
<PAGE>
Larc Industrial
Park VI Fee 100% 1975 3.91 63,600 100%
Larc Industrial
Park VII Fee 100% 1973 2.65 41,088 100%
Hampshire Dist.
Ctr. North Fee 100% 1979 9.26 159,200 100%
Hampshire Dist.
Ctr. South Fee 100% 1979 9.40 157,000 84%
Hampshire Tech
Ctr. Fee 100% 1998 14.22 142,526 100%
Penn Corporate
Bldg. Fee 100% 1977 2.08 40,844 100%
Bloomington
Industrial Fee 100% 1963 7.40 100,852 29%
Edina
Interchange I Fee 100% 1995 4.73 73,809 100%
Edina
Interchange II Fee 100% 1980 3.46 55,006 100%
Edina
Interchange III Fee 100% 1981 6.39 62,784 100%
Edina
Interchange IV Fee 100% 1974 1.99 22,440 100%
Edina
Interchange V Fee 100% 1974 4.92 139,101 100%
Edina
Interchange VI Fee 100% 1967 4.74 72,300 100%
Edina
Interchange VII Fee 100% 1970 2.36 30,654 100%
Pakwa Bus.
Park I Fee 100% 1979 1.67 38,196 100%
Pakwa Bus.
Park II Fee 100% 1979 1.67 21,254 100%
Pakwa Bus.
Park III Fee 100% 1979 1.67 19,978 81%
Cahill Bus. Ctr. Fee 100% 1980 3.90 60,082 100%
Encore Park Fee 100% 1977 14.50 126,858 100%
Johnson Bldg. Fee 100% 1974 2.09 62,718 96%
Cornerstone Bus.
Ctr. Fee 100% 1996 13.49 222,494 100%
Westside Bus. Park Fee 100% 1987 9.10 114,800 100%
Oxford Industrial Fee 100% 1971 1.23 16,736 100%
Cedar Lake Bus.
Ctr. Fee 100% 1976 3.05 50,400 100%
Medicine Lake
Industrial Fee 100% 1970 16.37 222,893 100%
801 Zane Avenue
North Fee 100% 1989 4.93 84,219 100%
Decatur Bus. Ctr. Fee 100% 1982 3.96 44,279 100%
Sandburg Industrial
Ctr. Fee 100% 1973 5.68 94,612 100%
Crystal Industrial
Ctr. Fee 100% 1974 3.23 72,000 95%
Bass Lake Bus.
Ctr. Fee 100% 1981 5.33 47,368 100%
Cliff Road
Industrial Ctr. Fee 100% 1972 3.31 49,821 97%
Professional
Plaza IV Fee 100% 1980 2.79 37,528 95%
Professional
Plaza III Fee 100% 1985 2.24 35,987 89%
Professional
Plaza II Fee 100% 1984 2.41 35,619 90%
Lyndale Commons I Fee 100% 1981 2.60 43,770 55%
Lyndale Commons II Fee 100% 1985 2.51 34,816 85%
Novartis Warehouse Fee 100% 1960 14.40 355,798 100%
Golden Hills I Fee 100% 1996 7.50 91,368 100%
Golden Triangle
Tech Ctr. Fee 100% 1997 11.10 90,771 100%
Trapp Road I Fee 100% 1996 6.50 96,800 100%
Broadway Bus.
Ctr. III Fee 100% 1983 2.77 21,600 100%
Broadway Bus.
Ctr. IV Fee 100% 1983 2.77 30,000 100%
Broadway Bus.
Ctr. V Fee 100% 1983 1.44 24,795 100%
Broadway Bus.
Ctr. VI Fee 100% 1983 2.77 66,961 100%
Broadway Bus.
Ctr. VII Fee 100% 1983 2.78 36,000 100%
Chanhassen I Fee 100% 1983 5.40 48,573 100%
Chanhassen II Fee 100% 1986 6.36 56,731 100%
Trapp Road
Bldg. 2 Fee 100% 1998 11.86 180,480 100%
7300 Northland
Drive Fee 100% 1980 8.48 152,480 100%
Eagandale
Tech Ctr. Fee 100% 1998 7.61 76,520 85%
Plymouth Tech Ctr. Fee 100% 1986 3.77 52,487 100%
Eagandale
Crossings Fee 100% 1998 6.60 80,104 75%
OFFICE
- ------
INDIANAPOLIS, INDIANA
PARK 100 BUS. PARK
Bldg. 34 Fee 100% 1979 2.00 22,272 94%
Bldg. 116 Fee 100% 1988 5.28 35,700 100%
Bldg. 118 Fee 100% 1988 6.50 35,700 85%
Bldg. 119 Fee 100% 1989 6.50 53,300 100%
CopyRite Bldg. Fee 50% [3] 1992 3.88 48,000 100%
Bldg. 132 Fee 100% 1997 4.40 27,600 100%
Woodland Corp.
Ctr. One Fee 100% 1998 6.00 77,186 100%
- 10 -
<PAGE>
WOODFIELD AT THE CROSSING
8440 Woodfield Fee 100% 1987 7.50 117,818 95%
8425 Woodfield Fee 100% 1989 13.30 259,777 94%
PARKWOOD CROSSING
One Parkwood Fee 100% 1989 5.93 108,281 100%
Two Parkwood Fee 100% 1996 5.96 93,950 100%
Three Parkwood Fee 100% 1997 6.24 122,712 100%
Four Parkwood Fee 100% 1998 5.90 133,086 99%
SHADELAND STATION
7240 Shadeland
Station Fee 66.67% [8] 1985 2.14 45,585 95%
7330 Shadeland
Station Fee 100% 1988 4.50 42,619 100%
7340 Shadeland
Station Fee 100% 1989 2.50 33,078 100%
7351 Shadeland
Station Fee 100% 1983 2.14 27,740 79%
7369 Shadeland
Station Fee 100% 1989 2.20 15,551 100%
7400 Shadeland
Station Fee 100% 1990 2.80 49,544 78%
KEYSTONE AT THE CROSSING
F.C. Tucker Fee/Grnd
Bldg. Lease [9] 100% 1978 4.70 4,840 100%
3520 Commerce Grnd/Bldg
Crossing Lease [10] 100% 1976 2.69 30,900 67%
8465 Keystone Fee 100% 1983 1.31 28,298 80%
8555 Keystone Fee/Grnd
Lease [11] 100% 1985 5.42 75,545 91%
Community MOB Fee 100% 1995 4.00 39,205 100%
One N. Capitol [12] 100% 1980 0.34 161,984 92%
HAMILTON CROSSING
Hamilton Crsg
Bldg. 2 Fee 100% 1997 5.10 32,800 77%
RIVER ROAD
Software Artistry Fee 100% 1998 6.90 108,273 100%
GREENWOOD, INDIANA
SOUTH PARK BUS. CTR.
Bldg. 1 Fee 100% 1989 5.40 39,715 84%
Bldg. 3 Fee 100% 1990 3.25 36,082 86%
St. Francis Fee/Grnd
Medical Bldg. Lease [13] 100% 1995 N/A 95,579 95%
CINCINNATI, OHIO
GOVERNOR'S HILL
8600 Governor's
Hill Fee 100% 1986 10.79 200,584 99%
8700 Governor's
Hill Fee 100% 1985 4.98 58,617 100%
8790 Governor's
Hill Fee 100% 1985 5.00 58,177 99%
8800 Governor's
Hill Fee 100% 1985 2.13 28,700 100%
GOVERNOR'S POINTE
4605 Governor's
Pointe Fee 100% 1990 8.00 178,306 100%
4705 Governor's
Pointe Fee 100% 1988 7.50 140,984 100%
4770 Governor's
Pointe Fee 100% 1986 4.50 76,037 99%
Anthem
Prescription Mgmt. Fee 100% 1997 5.00 78,240 100%
4660 Governor's
Pointe Fee 100% 1997 4.65 76,465 100%
4680 Governor's
Pointe Fee 100% 1998 9.80 126,102 73%
PARK 50 TECHNECTR.
SDRC Bldg. Fee 100% 1991 13.00 221,215 100%
Bldg. 17 Fee 100% 1985 8.19 70,644 99%
DOWNTOWN CINCINNATI
311 Elm Street Grnd/Bldg 1902/
Lease [14] 100% 1986 [15] 0.69 90,127 100%
312 Plum Street Fee 100% 1987 0.69 230,489 98%
312 Elm Street Fee 100% 1992 1.10 378,786 96%
- 11 -
<PAGE>
KENWOOD
Kenwood Commons
Bldg. I Fee 50% [16] 1986 2.09 46,145 100%
Kenwood Commons
Bldg. II Fee 50% [16] 1986 2.09 46,434 99%
Ohio National Fee 100% 1996 9.00 212,125 98%
Kenwood Exec. Ctr. Fee 100% 1981 3.46 49,984 100%
TRI-COUNTY
Triangle Off.Park Fee 100% 1965/
1985 [17] 15.64 172,650 92%
Tri-County Off.Park Fee 100% 1971,1973,
1982 [18] 11.27 102,166 80%
Executive Plaza I Fee 100% 1980 5.83 87,912 100%
Executive Plaza II Fee 100% 1981 5.02 88,885 100%
Executive Plaza III Fee 100% 1998 5.60 90,073 32%
BLUE ASH
West Lake Ctr. Fee 100% 1981 11.76 179,850 96%
Lake Forest Place Fee 100% 1985 13.50 217,264 99%
Huntington Bank
Bldg. Fee 100% 1986 0.94 3,235 100%
Blue Ash Office
Ctr. VI Fee 100% 1989 2.96 36,138 100%
Pfeiffer Woods Fee 50% [6] 1998 11.30 112,657 100%
OTHER OFFICE-CINCINNATI
Fidelity Drive Bldg. Fee 100% 1972 8.34 38,000 100%
Franciscan Fee/Grnd
Health Lease [19] 100% 1996 N/A 36,634 100%
One Ashview Place Fee 100% 1989 6.88 120,853 100%
Remington Park
Bldg. A Fee 100% 1982 3.20 38,236 100%
Remington Park
Bldg. B Fee 100% 1982 3.20 38,320 99%
COLUMBUS, OHIO
TUTTLE CROSSING
4600 Lakehurst
(Sterling 1) Fee 100% 1990 7.66 106,300 100%
4650 Lakehurst Fee 100% 1990 13.00 164,639 100%
5555 ParkCtr. Fee 100% 1992 6.09 83,971 100%
4700 Lakehurst Fee 100% 1994 3.86 49,600 82%
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%
Parkwood Place Fee 100% 1997 9.08 156,000 100%
MetroCtr. III Fee 100% 1983 5.91 73,757 100%
Veterans Admin.
Clinic Fee 100% 1994 4.98 118,000 100%
Scioto Corp.Ctr. Fee 100% 1987 7.58 57,251 100%
CompManagement Fee 100% 1997 5.60 68,700 100%
Atrium II Phase I Fee 100% 1998 11.04 145,000 100%
Sterling 4 Fee 100% 1998 3.10 94,219 100%
Emerald II Fee 100% 1998 3.21 45,214 90%
Two Easton Oval Fee 100% 1996 7.66 128,707 98%
Express Med Fee 50% [6] 1998 8.81 103,606 100%
Cleveland, Ohio
Rock Run - North Fee 100% 1984 5.00 62,565 91%
Rock Run - Ctr. Fee 100% 1985 5.00 61,099 67%
Rock Run - South Fee 100% 1986 5.00 62,989 97%
Freedom Square I Fee 100% 1980 2.59 40,208 73%
Freedom Square II Fee 100% 1987 7.41 116,665 96%
Corporate Plaza I Fee 100% 1989 6.10 114,028 100%
Corporate Plaza II Fee 100% 1991 4.90 103,834 88%
One Corp. Exchange Fee 100% 1989 5.30 88,376 93%
Corporate Ctr. I Fee 100% 1985 5.33 99,260 93%
Corporate Ctr. II Fee 100% 1987 5.32 104,402 85%
Corporate Place Fee 100% 1988 4.50 84,768 100%
- 12 -
<PAGE>
Partner- Year Land Net % Leased
Name/ Ownership ship's Const./ Area Rentable December
Location Interest Ownership Expanded Acres) Area (sq.ft.) 31, 1998
- --------------- --------- --------- -------- ------- ----------- ---------
Corporate Circle Fee 100% 1983 6.65 120,444 98%
Freedom Square III Fee 100% 1997 2.00 71,025 100%
6111 Oak Tree Fee 100% 1979/1995 5.00 70,906 97%
Landerbrook Fee 100% 1997 8.00 112,886 96%
Park Ctr. Bldg. 1 Fee 100% 1998 6.68 133,550 70%
Landerbrook Phase II Fee 100% 1998 5.74 103,300 46%
ST. LOUIS, MISSOURI
Laumeier I Fee 100% 1987 4.26 113,852 100%
Laumeier II Fee 100% 1988 4.64 112,477 100%
Laumeier IV Fee 100% 1987 2.24 62,842 100%
Westview Place Fee 100% 1988 2.69 119,585 99%
Westmark Fee 100% 1987 6.95 123,889 100%
MCI Fee 100% 1998 11.90 96,495 100%
EARTH CITY
3300 Pointe 70 [12] 100% 1989 6.61 103,549 100%
3322 NGIC [12] 100% 1987 6.61 112,000 100%
Riverport Tower Fee 100% 1991 22.03 317,891 100%
MARYVILLE CTR.
500 Maryville Ctr. Fee 100% 1984 9.27 165,544 97%
530 Maryville Ctr. Fee 100% 1990 5.31 107,957 100%
550 Maryville Ctr. Fee 100% 1988 4.55 97,109 96%
635 Maryville Ctr. Fee 100% 1987 8.78 148,307 100%
655 Maryville Ctr. Fee 100% 1994 6.26 90,499 100%
540 Maryville Ctr. Fee 100% 1990 5.23 107,973 100%
Twin Oaks Fee 100% 1995 5.91 85,066 100%
625 Maryville Ctr. Fee 50% [6] 1994 6.26 101,576 100%
CHICAGO, ILLINOIS
Central Park
of Lisle Fee 50% [6] 1990 8.88 345,200 100%
Executive Towers I Fee 100% 1983 6.33 203,302 99%
Executive Towers II Fee 100% 1984 6.33 224,140 100%
Executive Towers III Fee 100% 1987 6.33 222,400 78%
Atrium II Fee 100% 1986 6.55 100,952 100%
One Conway Park Fee 100% 1989 15.85 102,979 95%
Yorktown Office Ctr. Fee 100% 1979/1980/1981 7.52 98,619 99%
Oakmont Circle Off. Fee 100% 1990 6.90 117,738 81%
MINNEAPOLIS, MINNESOTA
10801Red Cir.Dr. Fee 100% 1977 4.00 60,078 100%
Medicine Lake
Prof. Bldg. Fee 100% 1970 1.54 8,100 100%
1601 E. Highway 13 Fee 100% 1986 2.80 38,652 98%
5219 Bldg. Fee 100% 1965 0.73 9,141 90%
Edina Realty Fee 100% 1965 1.93 24,080 100%
Norman Ctr. I Fee 100% 1969 4.27 47,345 0% [20]
Norman Ctr. II Fee 100% 1970 6.23 69,077 90%
Norman Ctr. III Fee 100% 1971 1.60 17,713 100%
Norman Ctr. IV Fee 100% 1967 4.27 45,332 100%
North Plaza Fee 100% 1966 2.26 28,141 100%
North Star Title Fee 100% 1965 3.41 42,479 100%
South Plaza Fee 100% 1966 2.68 33,370 97%
Tyrol West Fee 100% 1968 2.98 37,098 91%
Travelers
Express Tower Fee 30% [21] 1987 5.40 237,643 99%
NASHVILLE, TENNESSEE
CREEKSIDE CROSSING
One Creekside Crsg. Fee 100% 1998 5.35 116,390 53%
- 13 -
<PAGE>
One Lakeview Place Fee 100% 1986 6.85 114,972 97%
Two Lakeview Place Fee 100% 1988 6.06 114,521 100%
RETAIL
- ------
INDIANAPOLIS, INDIANA
PARK 100 BUS. PARK
Bldg. 121 Fee 100% 1989 2.27 19,716 70%
CASTLETON CORNER
Michael's Plaza Fee 100% 1984 4.50 46,374 100%
Cub Plaza Fee 100% 1986 6.83 60,136 92%
FORT WAYNE, INDIANA
Coldwater Crossing Fee 100% 1990 35.38 246,365 98%
GREENWOOD, INDIANA
GREENWOOD CORNER
First Indiana
Bank Branch Fee 100% 1988 1.00 2,400 100%
Greenwood
Corner Shoppes Fee 100% 1986 7.45 50,840 89%
DAYTON, OHIO
Sugarcreek Plaza Fee 100% 1988 17.46 77,940 93%
CINCINNATI, OHIO
Governor's Plaza Fee 100% 1990 35.00 181,493 98%
King's Mall
Shpg.Ctr.I Fee 100% 1990 5.68 52,661 100%
King's Mall
Shpg.Ctr.II Fee 100% 1988 8.90 67,725 99%
Montgomery Crst.
Phase I Fee 100% 1993 1.90 21,008 100%
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-
Governor's Plaza Fee 100% 1995 1.13 15,000 100%
Bigg's SuperCtr. Fee 100% 1996 14.00 198,940 100%
Fountain Place Fee 14% [22] 1997 1.98 207,170 100%
Tri-County Mktpl. Fee 100% 1998 10.36 74,174 100%
Western Hills Mktpl. Fee 100% 1998 10.50 148,140 85%
Galyans Trading Co. Fee 100% 1984 4.90 74,636 100%
Tuttle Retail Ctr. Fee 100% 1995/1996 13.44 144,340 86%
GOVERNOR'S POINTE
Lowe's Fee 100% 1997 15.00 135,147 99%
FLORENCE, KENTUCKY
Sofa Express Fee 100% 1997 1.78 20,250 100%
BLOOMINGTON, ILLINOIS
Lakewood Plaza Fee 100% 1987 11.23 87,010 98%
CHAMPAIGN, ILLINOIS
Market View Fee 100% 1985 8.50 86,553 84%
-------- ----------
Total In Service 3,395.90 52,028,032
-------- ----------
- 14 -
<PAGE>
UNDER CONSTRUCTION
- -------------------
INDUSTRIAL
- ----------
INDIANAPOLIS, INDIANA
PARK 100 BUS. PARK
Bldg. 136 Fee 100% Jan-99 10.50 152,000 58%
PARK FLETCHER BUS. PARK
Bldg. 38 Fee 50% [1] Apr-99 13.70 252,840 0%
Bldg. 39 Fee 50% [1] May-99 5.40 91,200 0%
Bldg. 40 Fee 50% [1] Jun-99 5.40 89,600 0%
LEBANON BUS. PARK
Lebanon Bldg 9
(Little Brown) Fee 100% Mar-99 26.80 397,320 100%
EXIT 5 BUS.PARK
Deflecto Corp. Fee/Grnd
Lease [23] 100% May-99 9.00 134,400 100%
CINCINNATI, OHIO
WORLD PARK
Union Ctr. Bldg. 2 Fee 100% Jan-99 3.82 64,800 29%
Union Ctr. Bldg. 3 Fee 100% Jan-99 15.00 321,200 59%
Union Ctr. Bldg. 6 Fee 100% Jun-99 16.25 321,464 100%
Skyport Bldg. 2 Fee 100% Feb-99 20.00 453,600 0%
COLUMBUS, OHIO
General Motors BTS Fee 100% Oct-99 27.54 504,000 100%
CLEVELAND, OHIO
Pioneer Standard Fee 100% Jan-99 12.90 224,600 100%
ST. LOUIS, MISSOURI
Dukeport 6 Fee 100% Mar-99 16.64 320,000 87%
Westport Ctr. III Fee 100% Jan-99 8.70 91,000 23%
Riverport I Fee 100% Apr-99 6.64 72,000 0%
MINNEAPOLIS, MINNESOTA
Silverbell Commons Fee 100% May-99 16.62 234,900 0%
7300 Northland Exp. Fee 100% Jun-99 2.50 33,020 100%
CHICAGO, ILLINOIS
CROSSROADS BUS. PARK
Crossroads Bldg 2 Fee 100% Jun-99 23.50 460,800 0%
NASHVILLE
Metropolitan
Airport Ctr. Fee 100% Apr-99 6.37 80,675 0%
OFFICE
INDIANAPOLIS, INDIANA
PARKWOOD CROSSING
Five Parkwood Fee 100% Jul-99 3.37 133,758 2%
Woodland Corp.
Ctr. II Fee 100% Jul-99 5.25 60,000 70%
HAMILTON CROSSING
Hamilton Crossing
Bldg 4 Fee 100% Jul-99 5.80 84,000 36%
DELAWARE BUS. PARK
Banc One Fee 100% Jan-00 14.00 193,000 100%
CINCINNATI, OHIO
Deerfield Crossing Fee 100% Aug-99 8.50 159,624 0%
- 15 -
<PAGE>
COLUMBUS, OHIO
TUTTLE CROSSING
Blazer I Fee 100% Jul-99 5.65 70,209 0%
One Easton Oval Fee 100% Mar-99 7.69 127,080 7%
Atrium II Fee 100% May-99 10.42 145,084 41%
Liebert Office Bldg Fee 100% Aug-99 5.65 67,594 67%
NEW ALBANY
Novus Services Fee 100% Feb-00 51.70 326,481 100%
CHICAGO, ILLINOIS
Central Park
of Lisle II Fee 50% [8] Jan-00 8.36 303,246 0%
ST. LOUIS, MISSOURI
520 Maryville Ctr. Fee 100% Jan-99 5.30 115,453 100%
Express Scripts
Headquarters Fee 100% May-99 11.40 141,774 100%
700 Maryville Ctr. Fee 100% Mar-00 5.70 210,154 0%
CLEVELAND, OHIO
Park Ctr. Bldg II Fee 100% Sep-99 6.67 133,983 0%
Corporate Ctr. III Fee 100% May-99 1.80 68,000 0%
NASHVILLE, TENNESSEE
Three Lakeview Pl. Fee 100% Nov-99 7.11 149,700 0%
MINNEAPOLIS, MINNESOTA
Golden Hills Bldg 3 Fee 100% Nov-99 7.20 86,362 100%
Golden Hills Bldg 2 Fee 100% Nov-99 7.50 79,231 32%
RETAIL
INDIANAPOLIS, INDIANA
Hamilton Crsg.
Ctr. Phase I Fee 100% Sep-99 9.00 66,306 45%
Hamilton Crsg.
Ctr. Phase II Fee 100% Aug-99 2.20 16,000 0%
Cincinnati, Ohio
Garden Ridge Fee 100% Apr-99 13.94 141,500 100%
Drug Emporium Exp. Fee 100% Sep-99 2.90 26,226 100%
Tuttle Crossing
Tuttle Retail Ctr.
-Cost Plus Fee 100% May-99 3.11 36,780 100%
-------- ----------
Total Under Construction 457.50 7,240,964
-------- ----------
TOTAL 3,853.40 59,268,996
======== ==========
</TABLE>
[1] These buildings and a 50% general partnership interest in Park
Fletcher Buildings 27 and 28 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.
[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. An expansion was completed in 1998.
[5] 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 such ownership interest.
[6] This building is owned by a limited liability company in which the
Partnership is a 50% member. The Partnership shares in the profit or loss of
the building in accordance with the Partnership's ownership interest.
- 16 -
<PAGE>
[7] 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.
[8] 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 the Partnership's ownership
interest.
[9] The Partnership owns the building and has a leasehold interest in the
land underlying this building with a lease term expiring October 2067.
[10] The Partnership has a leasehold interest in this building with a
lease term expiring May 2006.
[11] The Partnership owns the building and has a leasehold interest in the
land underlying this building with a lease expiring October 2067.
[12] These are properties for which there are loans to owners which
fully encumber the properties. Under the terms of the loans, the
Partnership effectively receives all income and economic value from the
properties. As a result, the properties are accounted for as owned
properties.
[13] 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.
[14] The Partnership has a leasehold interest in the building and the
underlying land with a lease term expiring June 2020. The Partnership
has an option to purchase the fee interest in the property throughout
the term of the lease.
[15] This building was renovated in 1986.
[16] These buildings are owned by a partnership in which the Partnership
owns a 75% general partnership interest. The Partnership shares in the
profit or loss from these buildings in accordance with such ownership
interest.
[17] This building was renovated in 1985.
[18] Tri-County Office Park consists of four buildings. One was built
in 1971, two were built in 1973, and one was built in 1982.
[19] The Partnership owns this building and has a leasehold interest in
the land underlying this building with a lease term expiring in June
2095.
[20] This building is currently vacant because the Partnership intends to
demolish the existing building and construct a new, larger office
property.
[21] This building is owned by a partnership in which the Partnership owns
a 30% limited partnership interest. The Company shares in the profit
or loss from the building in accordance with such ownership interest.
[22] This building is owned through a limited liability company in
which the partnership is a 25% member. The limited liability company
owns a 57.5% interest in the Fountain Place retail project.
[23] The Partnership owns this building and has a leasehold interest in
the land underlying this building with a lease term expiring in
October 2048.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is engaged in litigation as a defendant in a case filed
by a tenant involving an alleged breach of contractual lease
obligation. Based on information currently available and upon the
advice of counsel, it is the opinion of management that the ultimate
disposition of the pending legal proceeding should not have a material
adverse effect on the Partnership's consolidated financial statements.
However, in the event of an unfavorable ruling by a jury or judge in a
court of competent jurisdiction with respect to the ultimate
disposition of this case, such a ruling could have a material adverse
effect on the Partnership's results of operations in a particular
future period.
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, 1998.
- 17 -
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder 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, 1999, there were 146 record holders of Common Units.
On January 27, 1999, the Partnership declared a quarterly cash
distribution of $0.34 per Common Unit payable on February 26, 1999 to
Common Unitholders of record on February 11, 1999.
<TABLE>
<CAPTION>
1998 Distributions (1) 1997 Distributions (1)
---------------------- ----------------------
Quarter Ended
-------------
<S> <C> <C>
December 31 $.340 $.300
September 30 .340 .295
June 30 .300 .255
March 31 .300 .255
</TABLE>
(1) All distribution amounts reflect the General Partner's two-for-one stock
split effective August 1997.
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, 1998.
The following information should be read in conjunction with Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Item 8, "Financial Statements and
Supplementary Data" included in this Form 10-K (in thousands, except
per unit amounts):
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Revenues:
Rental Operations $ 348,625 $ 229,702 $ 162,160 $ 113,641 $ 89,299
Service Operations 24,716 22,378 19,929 17,777 18,473
--------- --------- --------- --------- -------
TOTAL REVENUES $ 373,341 $ 252,080 $ 182,089 $ 131,418 $107,772
--------- --------- --------- --------- -------
NET INCOME AVAILABLE
FOR COMMON UNITS $ 103,112 $ 72,780 $ 58,713 $ 41,600 $ 32,968
========= ========= ========= ========= =======
PER UNIT DATA (1):
Net Income per
Common Unit:
Basic $ 1.13 $ .98 $ .92 $ .78 $ .77
Diluted 1.12 .97 .91 .77 .77
Dividends paid per
Common Unit 1.28 1.10 1.00 .96 .92
Weighted Average Common
Units Outstanding 91,576 74,142 63,960 53,582 42,934
Weighted Average Common
and Dilutive Potential
Common Units 92,468 74,993 64,398 53,802 43,001
BALANCE SHEET DATA
(AT DECEMBER 31):
Total Assets $2,854,062 $2,177,174 $1,362,399 $1,046,532 $775,884
Total Debt 1,007,317 720,119 525,815 454,820 298,640
Total Preferred
Equity 348,366 218,906 72,856 - -
Total Unitholders'
Equity 1,677,988 1,324,780 769,269 540,221 447,298
Total Common Units
Outstanding (1) 96,853 87,054 66,364 56,606 48,768
OTHER DATA:
Funds From
Operations (2) $ 174,829 $ 118,828 $ 87,434 $ 64,846 $ 47,907
Cash Flow Provided
by (Used by):
Operating activities $ 220,529 $ 158,776 $ 95,470 $ 78,637 $ 51,856
Investing activities (703,575) (597,015) (277,009) (289,569) (116,227)
Financing activities 479,300 443,265 181,203 176,187 94,733
</TABLE>
(1) Information for all five years reflects the General Partner's
two-for-one stock split effected in August 1997.
- 18 -
<PAGE>
(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 and unconsolidated companies (adjustments for minority
interests, unconsolidated companies 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.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
--------
The Partnership's income from rental operations is substantially
influenced by the supply and demand for the Partnership's rental
space in its primary markets, 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 averaged 94.9% the last two years and was 95.1%
at December 31, 1998. 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 includes developing
and acquiring additional rental properties in its primary markets and
expanding into other attractive markets (see discussion of Weeks
merger below).
The Partnership tracks Same Property performance which compares those
properties that were fully in-service for all of a two-year period.
Because of the rapid growth of the Partnership, this population of
properties only represented 47.7% and 45.3% of the in-service
portfolio at December 31, 1998 and December 31, 1997, respectively.
In 1998, FFO from those properties that were fully in-service for the
past two years increased 4.4% over 1997, compared to a 4.7% increase
in 1997 over 1996.
The following table sets forth information regarding the
Partnership's in-service portfolio of rental properties as of
December 31, 1998 and 1997 (square feet in thousands):
<TABLE>
<CAPTION>
Total Percent of
Square Feet Total Square Feet Percent Occupied
------------------- ----------------- ----------------
Type 1998 1997 1998 1997 1998 1997
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL
Service Centers 6,123 4,309 11.7% 10.6% 93.4% 92.5%
Bulk 29,745 23,572 57.2% 58.0% 95.4% 93.4%
OFFICE
Suburban 13,015 10,047 25.0% 24.7% 95.0% 96.0%
CBD 861 699 1.7% 1.7% 96.3% 93.9%
RETAIL 2,284 2,041 4.4% 5.0% 95.8% 95.8%
------ ------ ------ ------
Total 52,028 40,668 100.0% 100.0% 95.1% 94.1%
====== ====== ====== ======
</TABLE>
Management expects occupancy of the in-service property portfolio to
remain stable because (i) only 11.1% and 9.0% of the Partnership's
occupied square footage is subject to leases expiring in 1999 and
2000, respectively, and (ii) the Partnership's renewal percentage
averaged 69%, 81% and 80% in 1998, 1997 and 1996, respectively.
- 19 -
<PAGE>
The following table reflects the Partnership's in-service lease
expiration schedule as of December 31, 1998, by product type
indicating square footage and annualized net effective rents under
expiring leases (in thousands, except per square foot amounts):
<TABLE>
<CAPTION>
Industrial Portfolio Office Portfolio Retail Portfolio Total Portfolio
-------------------- ---------------- ---------------- ---------------
Yr of Sq. Sq. Sq. Sq.
Exp. Ft. Rent Ft. Rent Ft. Rent Ft. Rent
- ----- ------ ----- ------ ----- ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 3,882 $ 16,884 1,506 $ 16,063 109 $ 1,114 5,497 $ 34,061
2000 3,019 13,054 1,290 16,051 120 1,464 4,429 30,569
2001 3,949 16,708 1,868 23,116 92 1,121 5,909 40,945
2002 4,611 18,977 1,678 19,175 149 1,678 6,438 39,830
2003 4,217 18,980 1,482 19,608 149 1,617 5,848 40,205
2004 1,785 8,062 763 10,245 18 194 2,566 18,501
2005 2,918 9,507 1,090 14,904 216 1,846 4,224 26,257
2006 2,267 8,983 733 10,590 8 108 3,008 19,681
2007 2,344 7,631 569 7,828 76 760 2,989 16,219
2008 2,447 8,698 447 6,048 46 613 2,940 15,359
There-
after 2,657 10,348 1,763 24,398 1,206 10,653 5,626 45,399
------ ------- ------ ------- ----- ------ ------ -------
Total 34,096 $137,832 13,189 $168,026 2,189 $21,168 49,474 $327,026
====== ======= ====== ======= ===== ====== ====== =======
Total
Port-
folio 35,868 13,876 2,284 52,028
====== ====== ===== ======
Annualized
net
effective
rent per sq.
ft.leased $ 4.04 $ 12.74 $ 9.67 $ 6.61
======= ======= ====== =======
</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 an 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 (see
discussion of Weeks merger below); and (iii) the completion of the
7.2 million square feet of properties under development at December
31, 1998 over the next four quarters and thereafter. The 7.2 million
square feet of properties under development are expected to be 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 1999 2,015 50% $104,830 11.9%
2nd Quarter 1999 2,159 37% 91,151 11.3%
3rd Quarter 1999 1,215 35% 93,553 11.8%
4th Quarter 1999 819 75% 42,063 11.4%
Thereafter 1,033 50% 126,439 10.6%
----- -------
7,241 47% $458,036 11.4%
===== =======
</TABLE>
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, 1998 is as follows (in thousands, except number of
properties and per unit amounts):
- 20 -
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Rental Operations revenues $348,625 $229,702 $162,160
Service Operations revenues 24,716 22,378 19,929
Earnings from Rental Operations 125,967 83,740 54,332
Earnings from Service Operations 7,195 7,153 6,436
Operating income 121,589 84,575 56,715
Net income available for
common units 103,112 72,780 58,713
Weighted average common
units outstanding (1) 91,576 74,142 63,960
Weighted average common
and dilutive potential
common units (1) 92,468 74,993 64,398
Basic income per common unit (1) $ 1.13 $ .98 $ .92
Diluted income per common unit (1) $ 1.12 $ .97 $ .91
Number of in-service properties
at end of year 453 355 249
In-service square footage at
end of year 52,028 40,668 27,402
Under development square footage
at end of year 7,241 5,243 3,801
</TABLE>
(1) As adjusted for the General Partner's two-for-one stock split effected
in August 1997.
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997
--------------------------------------------------------------------------
Rental Operations
-----------------
The Partnership increased its in-service portfolio of rental
properties from 355 properties comprising 40.7 million square feet at
December 31, 1997 to 453 properties comprising 52.0 million square
feet at December 31, 1998 through the acquisition of 66 properties
totaling 5.0 million square feet and the placement in service of 34
properties and seven building expansions totaling 6.3 million square
feet developed by the Partnership.
The Partnership also disposed of two properties totaling 21,000
square feet. These 98 net additional rental properties primarily
account for the $118.9 million increase in revenues from Rental
Operations from 1997 to 1998. The increase from 1997 to 1998 in
rental expenses, real estate taxes and depreciation and amortization
expense is also a result of the additional 98 in-service rental
properties.
Interest expense increased by $19.9 million primarily due to interest
expense of $11.4 million on $250 million of unsecured debt which the
Partnership issued in 1998 at effective interest rates ranging from
6.72% to 7.29%. Additionally, interest expense on the Partnership's
$100 million of unsecured debt issued in 1997 increased by $4.7
million due to the fact that debt was outstanding approximately five
months in 1997 compared to 12 months in 1998. This issuance bears
interest at an effective rate of 7.35%. The proceeds from these debt
issuances were used to fund development and acquisition of additional
rental properties.
As a result of the above mentioned items, earnings from Rental
Operations increased $42.3 million from $83.7 million for the year
ended 1997 to $126.0 million for 1998.
- 21 -
<PAGE>
Service Operations
------------------
Service Operations revenues increased from $22.4 million to $24.7
million for the year ended 1998 as compared to 1997 primarily as a
result of increases in construction management fee revenue because of
an increase in third-party construction volume. Service Operations
expenses increased from $15.2 million to $17.5 million for the year
ended 1998 as compared to 1997 primarily as a result of an increase
in payroll expenses resulting from the overall growth of the
Partnership and the additional regional offices opened in 1997.
As a result of the above-mentioned items, earnings from Service
Operations remained constant at $7.2 million for the years ended 1998
and 1997.
General and Administrative Expense
----------------------------------
General and administrative expense increased from $7.3 million for
the year ended 1997 to $11.6 million for 1998 as a result of internal
acquisition costs which are no longer permitted to be capitalized
being charged to general and administrative expense as well as an
increase in state and local income taxes resulting from the overall
growth of the Partnership.
Net Income Available for Common Units
-------------------------------------
Net income available for common units for the year ended 1998 was
$103.1 million compared to $72.8 million for 1997. This increase
results primarily from the increases in the operating results of
rental and service operations explained above.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
--------------------------------------------------------------------------
Rental Operations
-----------------
The Partnership increased its in-service portfolio of rental
properties from 249 properties comprising 27.4 million square feet at
December 31, 1996 to 355 properties comprising 40.7 million square
feet at December 31, 1997 through the acquisition of 84 properties
totaling 8.4 million square feet and the placement in service of 28
properties and two building expansions totaling 5.4 million square
feet developed by the Partnership.
The Partnership also disposed of six properties totaling 443,000 square
feet. These 106 net additional rental properties primarily account for
the $67.5 million increase in revenues from Rental Operations from 1996
to 1997. The increase from 1996 to 1997 in rental expenses, real estate
taxes and depreciation and amortization expense is also a result of the
additional 106 in-service rental properties.
Interest expense increased by $7.7 million. This increase was
primarily because of interest expense on the $90 million of unsecured
debt which the Partnership issued in 1996 at a weighted average rate
of 7.20% under its medium-term note program. The Partnership also
issued $100 million of unsecured debt in 1997 which bears interest at
an effective interest rate of 7.35%. The proceeds from these debt
issuances were used to fund development and acquisition of additional
rental properties.
As a result of the above mentioned items, earnings from Rental
Operations increased $29.4 million from $54.3 million for the year
ended 1996 to $83.7 million for the year ended 1997.
- 22 -
Service Operations
------------------
Service Operations revenues increased from $19.9 million to $22.4
million for the year ended 1997 as compared to 1996 primarily as a
result of increases in construction management fee revenue because of
an increase in third-party construction volume. Service Operations
expenses increased from $13.5 million to $15.2 million for the year
ended 1997 as compared to 1996 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 1996 and
1997.
As a result of the above-mentioned items, earnings from Service
Operations increased from $6.4 million to $7.2 million for the years
ended 1996 and 1997, respectively.
General and Administrative Expense
----------------------------------
General and administrative expense increased from $4.1 million for
the year ended 1996 to $7.3 million for 1997 primarily as a result of
increased state and local taxes due to the growth in revenues and net
income of the Partnership.
Other Income (Expense)
----------------------
Interest income increased from $1.2 million for the year ended 1996
to $2.2 million for the year ended 1997 as a result of the temporary
short-term investment of a greater amount of proceeds from the 1997
debt and equity offerings. Other expense consists of costs incurred
in pursuit of unsuccessful development or acquisition opportunities.
During the year ended 1996, the Partnership sold a 251,000 square
foot corporate headquarters facility pursuant to a purchase option
contained in the 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 1997 was
$72.8 million compared to $58.7 million for 1996. This increase
results primarily from the increases in the operating results of
rental and service operations explained above.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaling $220.5 million,
$158.8 million and $95.5 million for the years ended 1998, 1997 and
1996, 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.
- 23 -
<PAGE>
Net cash used by investing activities totaling $703.6 million, $597.0
million and $277.0 million for the years ended 1998, 1997 and 1996,
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.
Net cash provided by financing activities totaling $479.3 million,
$443.3 million and $181.2 million for the years ended 1998, 1997 and
1996, respectively, is comprised of debt and equity issuances, net of
distributions to unitholders and minority interests and repayments of
outstanding indebtedness. In 1998, the Partnership received $211.5
million of net proceeds from the General Partner's issuance of common
shares and $129.5 million of net proceeds from the General Partner's
preferred stock offering. The Partnership also issued $250.0 million
of unsecured debt. The Partnership used the net proceeds from the
equity and unsecured debt offerings to reduce amounts outstanding
under the Partnership's lines of credit and to fund the development
and acquisition of additional rental properties.
In 1997, the Partnership received $321.3 million of net proceeds from
the General Partner's issuance of common shares and $146.1 million of
net proceeds from the General Partner's preferred stock offering. The
Partnership also issued $100.0 million of unsecured debt. The
Partnership used the net proceeds from the equity and debt offerings
to reduce amounts outstanding under the Partnership's lines of credit
and to fund the 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.
A summary of the Partnership's recurring capital expenditures is as
follows (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
Tenant improvements $10,785 $ 7,985 $6,048
Leasing costs 6,655 5,057 3,032
Building improvements 2,206 1,211 780
------ ------ -----
Total $19,646 $14,253 $9,860
====== ====== =====
</TABLE>
The Partnership has a $450.0 million unsecured line of credit ("LOC")
available to fund the development and acquisition of additional
rental properties and to provide working capital as needed. The LOC
matures in April 2001 and bears interest at the 30-day London
Interbank Offered Rate ("LIBOR") plus .80%. The Partnership increased
the LOC from $200.0 million in August 1998. The Partnership has the
option to obtain borrowings from financial institutions who
participate in the LOC at rates lower than LIBOR plus .80%
("Competitive Bid Option"), subject to certain restrictions. While
the Partnership has utilized the Competitive Bid Option during 1998,
all amounts outstanding at December 31, 1998 are at LIBOR plus .80%.
Borrowings of $91 million under the LOC as of December 31, 1998 bear
interest at an effective rate of 6.43%. The Partnership also has a
demand $7.0 million secured line of credit which is available to
provide working capital, and bears interest payable monthly at the 30-
day LIBOR rate plus .65%. Borrowings of $7.0 million are outstanding
on this line of credit at December 31, 1998 and bear interest at an
effective rate of 6.28%.
The General Partner and the Partnership currently have on file three
Form S-3 Registration Statements with the Securities and Exchange
Commission (the "Shelf Registrations") which have remaining
availability as of December 31, 1998 of $967.9 million to issue
additional common stock, preferred stock and 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
General Partner and the Partnership also have a shelf registration on
file for at-the-market offerings of 1.5 million Common Units.
- 24 -
<PAGE>
The total debt outstanding at December 31, 1998 consists of notes
totaling $1.007 billion with a weighted average interest rate of
7.31% maturing at various dates through 2028. The Partnership has
$681.0 million of unsecured debt and $326.3 million of secured debt
outstanding at December 31, 1998. Scheduled principal amortization of
such debt totaled $7.1 million for the year ended 1998. 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>
1999 $ 7,885 $ 35,430 $ 43,315 6.40%
2000 5,753 64,850 70,603 7.13%
2001 5,954 166,095 172,049 6.78%
2002 6,462 50,000 56,462 7.40%
2003 4,519 66,144 70,663 8.47%
2004 3,509 177,035 180,544 7.41%
2005 3,800 100,000 103,800 7.49%
2006 4,117 100,000 104,117 7.07%
2007 3,653 14,938 18,591 7.76%
2008 3,941 100,000 103,941 6.78%
Thereafter 33,232 50,000 83,232 7.01%
------ ------- ---------
Total $82,825 $924,492 $1,007,317 7.31%
====== ======= =========
</TABLE>
The Partnership intends to pay regular quarterly distributions from
net cash provided by operating activities. A quarterly distribution
of $.34 per common unit was declared on January 27, 1999 which
represents an annualized distribution of $1.36 per 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 and
unconsolidated companies (adjustments for minority interest and
unconsolidated companies 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>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Net income available for common units $103,112 $ 72,780 $58,713
Add back (deduct):
Depreciation and amortization 68,766 44,806 31,363
Share of adjustments for
unconsolidated companies 4,302 3,017 1,890
Earnings from property sales (1,351) (1,775) (4,532)
------- -------- ------
FUNDS FROM OPERATIONS $174,829 $118,828 $87,434
======= ======= ======
CASH FLOW PROVIDED BY (USED BY):
Operating activities $ 220,529 $158,776 $ 95,470
Investing activities (703,575) (597,015) (277,009)
Financing activities 479,300 443,265 181,203
</TABLE>
The increase in FFO during the three-year period results primarily
from the increased in-service rental property portfolio as
discussed above under "Results of Operations."
- 25 -
<PAGE>
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.
MERGER WITH WEEKS
On March 1, 1999, the General Partner announced that it entered
into an Agreement and Plan of Merger, dated as of February 28,
1999 (the "Merger Agreement"), with Weeks Corporation ("Weeks"),
pursuant to which Weeks and its consolidated subsidiary, Weeks
Realty, L.P. ("Weeks Operating Partnership"), will merge with and
into the General Partner and Partnership. Weeks is a self-
administered, self-managed, geographically focused REIT that was
organized in 1994. As of December 31, 1998, its in-service
property portfolio consisted of 300 industrial properties, 34
suburban office properties and five retail properties comprising
28.1 million square feet. As of December 31, 1998, Weeks' primary
markets and the concentration of its portfolio (based on square
footage of in-service properties) were Atlanta, Georgia;
Nashville, Tennessee; Miami, Florida; Raleigh-Durham-Chapel Hill
(the "Research Triangle"), North Carolina; Dallas/Ft.Worth, Texas;
Orlando, Florida; and Spartanburg, South Carolina. In addition,
31 industrial, suburban office and retail properties were under
development, in lease-up or under agreement to acquire at December
31, 1998, comprising an additional 3.4 million square feet. At
December 31, 1998 the Weeks Operating Partnership had
approximately 7.3 million Common Units outstanding, and
approximately $654 million aggregate principal amount of
outstanding indebtness. In the merger, each outstanding Common
Unit of Weeks Operating Partnership will be converted into the
right to receive 1.38 Common Units of the Partnership; each
outstanding unit of 8.0% Series A Cumulative Redeemable Preferred
Equity of Weeks Operating Partnership will be converted into the
right to receive one depositary unit of the Partnership
representing 1/1000 of a unit of 8.0% Series F Cumulative
Redeemable Preferred Equity of the Partnership; and each
outstanding unit of 8.625% Series D Cumulative Redeemable
Preferred Equity of Weeks Operating Partnership will be converted
into the right to receive one depositary unit of the Partnership
representing 1/1000 of a unit of 8.625% Series H Cumulative
Redeemable Preferred Equity of the Partnership. The terms of the
Partnership's depositary units to be issued in the merger will be
identical to the terms of the Weeks Operating Partnership Series A
and Series D preferred equity. The merger of the Weeks Operating
Partnership into the Partnership is expected to qualify as a tax-
free reorganization and will be accounted for under the purchase
method of accounting. The transactions are expected to close in
the second or third quarter of 1999, subject to receipt of
necessary approvals by the shareholders of both the General
Partner and Weeks Corporation and satisfaction of customary
closing conditions.
If the merger between the Partnership and the Weeks Operating
Partnership is consummated as expected, the combined company will
have significant operations and assets located in southeastern
markets where the Partnership and its management have not
traditionally operated or owned assets. Since substantially all
of the members of the Weeks Operating Partnership's management are
expected to remain with the combined company for the foreseeable
future after the merger, the Partnership expects to have the
necessary expertise to operate successfully in the new markets.
The combined company's operating performance will, however, be
exposed to the general economic conditions of its new markets and
could be adversely affected if conditions, such as an oversupply
of space or a reduction in demand for the types of properties
supplied by the combined company, become favorable.
- 26 -
<PAGE>
YEAR 2000
The Partnership adopted a Year 2000 readiness plan for its
buildings in April, 1998 following the basic framework recommended
by the Building Owners and Managers Association. This Year 2000
readiness plan consists of eight (8) steps focusing on the
identification, prioritization, and remediation of potential Year
2000 problems arising from software and embedded chips located
within the building systems at the Partnership's properties.
Based upon implementation of this readiness plan which is
substantially complete, the Partnership does not believe the cost
for the upgrade and replacement of building systems and equipment
having potential Year 2000 related problems will be a material
amount.
The Partnership has retained a third-party consultant to identify
and assess the Year 2000 readiness of the Partnership's
information systems. Such systems include, but are not limited to,
accounting and property management, network operations, desktop
and software applications, internally developed software and other
general information systems and software utilized for payroll,
human resources, budgeting and tenant services.
Based upon the results of this assessment, the Partnership does
not believe the cost for the upgrade and replacement of internal
information systems having potential Year 2000 problems will be a
material amount. Based on the evaluations performed, the
Partnership does not believe the risks associated with its Year
2000 issues are significant. The Partnership's contingency plans
include allowing for alternative access to its properties, the
provision of limited electrical and telephone services and
security and other basic services.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
The Partnership is exposed to interest rate changes primarily as a
result of its line of credit and long-term debt used to maintain
liquidity and fund capital expenditures and expansion of the
Partnership's real estate investment portfolio and operations. The
Partnership's interest rate risk management objective is to limit
the impact of interest rate changes on earnings and cash flows and
to lower its overall borrowing costs. To achieve its objectives
the Partnership borrows primarily at fixed rates and may enter
into derivative financial instruments such as interest rate swaps,
caps and treasury locks in order to mitigate its interest rate
risk on a related financial instrument. The Partnership does not
enter into derivative or interest rate transactions for
speculative purposes.
The Partnership's interest rate risk is monitored using a variety
of techniques. The table below presents the principal amounts (in
thousands) of the expected annual maturities, weighted average
interest rates for the average debt outstanding in the specified
period, fair values and other terms required to evaluate the
expected cash flows and sensitivity to interest rate changes. The
fair values of the Partnership's debt instruments are calculated
as the present value of estimated future cash flows using a
discount rate commensurate with the risks involved.
- 27 -
<PAGE>
<TABLE>
<CAPTION>
1999 2000 2001 2002 2003
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Fixed rate secured
debt $36,145 $10,413 $80,845 $ 6,237 $70,418
Weighted average
interest rate 8.21% 8.34% 8.28% 8.22% 8.11%
Variable rate
LIBOR based
secured debt $ 7,000 $20,000 $ - $ - $ -
Weighted average
interest rate 6.41% 5.62% N/A N/A N/A
Variable rate
other secured
debt $ 170 $ 190 $ 205 $ 225 $ 245
Weighted average
interest rate 3.93% 3.91% 3.90% 3.88% 3.86%
Unsecured notes $ - $40,000 $ - $ 50,000 $ -
Weighted average
interest rate 7.19% 7.18% 7.18% 7.17% 7.17%
Unsecured line
of credit $91,000 $ - $ - $ - $ -
Weighted average
interest rate 6.43% N/A N/A N/A N/A
Fair
Thereafter Total Value
---------- ----- -----
<S> <C> <C> <C>
Fixed rate secured
debt $ 81,834 $285,892 $302,817
Weighted average
interest rate 8.00%
Variable rate
LIBOR based
secured debt $ - $ 27,000 $ 27,072
Weighted average
interest rate N/A
Variable rate
other secured
debt $ 12,390 $ 13,425 $ 10,052
Weighted average
interest rate 3.86%
Unsecured notes $500,000 $590,000 $606,803
Weighted average
interest rate 7.16%
Unsecured line
of credit $ - $ 91,000 $ 91,000
Weighted average
interest rate N/A
</TABLE>
As the table incorporates only those exposures that exist as of
December 31, 1998, it does not consider those exposures or
positions which could arise after that date. Moreover, because
firm commitments are not presented in the table above, the
information presented therein has limited predictive value. As a
result, the Partnership's ultimate realized gain or loss with
respect to interest rate fluctuations will depend on the exposures
that arise during the period, the Partnership's hedging strategies
at that time, and interest rates.
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 AND ON ACCOUNTING
FINANCIAL DISCLOSURE
None.
- 28 -
<PAGE>
Part III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership does not have any directors or officers. The following
information is provided regarding the Board of Directors of the
General Partner:
NAME, AGE, PRINCIPAL OCCUPATION(S) AND DIRECTOR
BUSINESS EXPERIENCE DURING PAST 5 YEARS SINCE
--------------------------------------- --------
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Thomas L. Hefner, Age 52 1993
Chairman, President and Chief Executive Officer
of the General Partner.
L. Ben Lytle, Age 52 1996
Chairman, President and Chief Executive Officer
of Anthem, Inc., a national insurance and financial
services firm. Director of IPALCO Enterprises, Inc.
and Central Newspapers, Inc.
Edward T. Baur, Age 52 1997
Vice President and General Manager of the
General Partner. Prior to joining the
General Partner in 1997, Mr. Baur was
the Chief Executive Officer of Baur
Properties.
John W. Wynne, Age 65 1986
Former Chairman of the Board of Directors
of the General Partner through 1998.
Director of First Indiana Corporation.
DIRECTORS WHOSE TERMS EXPIRE IN 2000
Howard L. Feinsand, Age 51 1988
Founder and Principal, Choir Capital Ltd.,
since 1996. Managing Director, Citicorp
North America, Inc., 1995-1996; Senior
Vice President and Manager, GE Capital
Aviation Services, Inc. an aircraft
Leasing company, 1994 - 1995. Director
of Egan Systems, Inc.
James E. Rogers, Age 51 1994
Vice Chairman, President and Chief Executive
Officer of Cinergy Corp., a regional
utility holding company. Director of
Cinergy Corp. and Fifth Third Bancorp.
Daniel C. Staton, Age 46 1993
President of Walnut Capital Partners, an
investment and venture capital company,
since 1997. Executive Vice President and
Chief Operating Officer of the General
Partner until May 1997. Chairman of the
Board of Directors of Storage Trust
Realty, Inc.
Jay J. Strauss, Age 63 1985
Chairman and Chief Executive Officer
of Regent Realty Group, Inc., a general
real estate and mortgage banking firm.
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Geoffrey Button, Age 50 1993
An independent real estate and financing
consultant. Prior to 1996, was Executive
Director of Wyndham Investments Limited,
a property holding company of Allied
Domecq Pension Funds. Director of Sector
Communications, Inc.
Ngaire E. Cuneo, Age 48 1995
Executive Vice President, Corporate
Development, Conseco, Inc., an owner,
operator and provider of services to
companies in the financial services
industry. Director of Conseco, Inc.
and Bankers Life Holding Corporation.
John D. Peterson, Age 65 1986
Chairman of City Securities Corporation,
a securities brokerage firm. Director
of Lilly Industries, Inc.
Darell E. Zink, Jr., Age 52 1993
Executive Vice President, Chief Financial
Officer and Assistant Secretary of the
General Partner. Director of People's
Bank Corporation of Indianapolis.
- 29 -
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS OF THE GENERAL PARTNER
The Board of Directors of the General Partner met four times during the
last fiscal year. The Board of Directors of the General Partner has an
Asset Committee, an Audit Committee, an Executive Compensation
Committee, a Finance Committee and a Nominating Committee.
The function of the Asset Committee is to discuss, review and
authorize business transactions that exceed established guidelines.
The members of the Asset Committee are Messrs. Baur, Feinsand,
Peterson, Strauss and Zink and Ms. Cuneo. Mr. Strauss served as the
Committee's chairman. The Committee met 12 times in 1998.
The function of the Audit Committee is to evaluate audit performance,
handle relations with the Partnership's independent auditors and
evaluate policies and procedures related to internal accounting
controls. The members of the Audit Committee are Messrs. Button,
Feinsand, Lytle and Peterson and Ms. Cuneo. Mr. Feinsand served as
the Committee's chairman. The Committee met 3 times during 1998.
The function of the Executive Compensation Committee is to review and
make recommendations to the Board of Directors with respect to the
compensation of directors, officers, and employees of the General Partner
and Partnership, to implement the Partnership's long term compensation
plans and other employee benefit plans and to make recommendations to
the Nominating Committee regarding individuals qualified to be
nominated as unaffiliated directors. The members of the Executive
Compensation Committee are Messrs. Button, Lytle, Rogers and Strauss
and Ms. Cuneo. Mr. Button served as the Committee's chairman. The
Committee met 5 times during 1998.
The function of the Finance Committee is to review, recommend and
authorize certain debt financing and equity transactions. The members
of the Finance Committee are Messrs. Baur, Button, Feinsand, Rogers,
Staton, Strauss and Zink. Mr. Rogers served as the Committee's
chairman. The committee met 6 times during 1998.
The function of the Nominating Committee is to nominate individuals
to serve as directors. The Nominating Committee is comprised of all
of the unaffiliated directors, Messrs. Button, Feinsand, Lytle,
Peterson, Rogers and Strauss and Ms. Cuneo. The committee does not
formally consider nominations by unitholders. Mr. Button served as
the Committee's chairman. The Committee met once during 1998.
In 1998, all directors attended at least 75% of the meetings of the
Board and all committees of the Board of which they were members
except for Mr. Rogers. Mr. Rogers attended 100% of the Board of
Directors meetings, but his overall attendance at all Board and
committee meetings was less than 75%.
DIRECTOR EMERITUS
At the annual meeting of the General Partner shareholders, the
General Partner will confer the title of Director Emeritus upon John
W. Wynne, who does not intend to stand for re-election as a Director
this year. Mr. Wynne has served the General Partner as a Director
with exemplary skill and loyalty since the General Partner was
established and was one of the founders of the General Partner in
1972. The entire Duke organization wishes to express its gratitude
and admiration for Mr. Wynne's outstanding service throughout his
career and looks forward to many more years of his valuable counsel
in the role of Director Emeritus.
- 30 -
<PAGE>
COMPENSATION OF DIRECTORS
Each non-employee director receives 1,200 shares of General Partner
common stock as annual compensation. Non-employee directors also
receive a fee of $2,500 for attendance at each meeting of the Board
of Directors. In addition, the non-employee directors receive $500
for participation in each telephonic meeting of the Board and for
participation in each committee meeting not held in conjunction with
a regularly scheduled Board meeting. Officers of the General Partner
who are also directors receive no additional compensation for their
services as directors.
Beginning in 1999, certain Directors will receive grants of stock
option and dividend increase units under the 1999 Director's Stock
Option and Dividend Increase Unit Plan of the General Partner.
Pursuant to this plan, Directors that do not receive grants of stock
options under any other General Partner plan for a year will receive
a grant of 2,500 stock options and 2,500 dividend increase units at
the first meeting of the General Partner's Executive Compensation
Committee of each year. However, for 1999 only, Directors that have
never been granted stock options under a General Partner plan will
receive a grant of 7,500 stock options and 7,500 dividend increase
units.
The following information is provided regarding the executive
officers of the General Partner who do not serve as Directors of the
General Partner:
NAME, AGE, PRINCIPAL OCCUPATION(S) AND WITH THE GENERAL
BUSINESS EXPERIENCE DURING PAST 5 YEARS PARTNER SINCE
--------------------------------------- ---------------
Gary A. Burk - Age 47 1979
President of Duke Services, Inc.
Mr. Burk is responsible for the
General Partner's and the
Partnership's construction
operations.
Robert Chapman - Age 45 1997
Executive Vice President - Acquisitions.
Mr. Chapman was previously with The REEF
Funds where he managed acquisitions
and dispositions.
John R. Gaskin - Age 37 1990
Vice President, General Counsel
and Secretary
Richard W. Horn - Age 41 1984
Executive Vice President - Office.
Mr. Horn is responsible for all
office activities of the General
Partner and the Partnership.
William E. Linville, III - Age 44 1987
Executive Vice President - Industrial.
Mr. Linville is responsible for all
industrial activities of the General
Partner and the Partnership.
John Nemecek - Age 44 1994
President - Asset and Property Management.
Mr. Nemecek was previously with Compass
Management where he managed the Florida
operations.
Dennis D. Oklak - Age 45 1986
Executive Vice President, Chief
Administrative Officer and Treasurer.
- 31 -
<PAGE>
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the General Partner's officers and directors, and persons
who beneficially own more than 10% of the Limited Partner Units, to
file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Based on a review of these forms,
the General Partner believes that during 1998 all of its officers,
directors and greater than 10% Limited Partner Unitholders timely
filed the forms required under Section 16(a).
ITEM 11. EXECUTIVE COMPENSATION
REPORT OF EXECUTIVE COMPENSATION COMMITTEE
Executive Compensation Philosophy
---------------------------------
The primary objectives of the Executive Compensation Committee (the
"Committee") of the Board of Directors in determining total
compensation of the General Partner's executive officers are (i) to
enable the General Partner to attract and retain high quality
executives by providing total compensation opportunities with a
combination of compensation elements which are at or above
competitive opportunities and which provide for moderate fixed costs
and leveraged incentive opportunities, and (ii) to align General
Partner shareholders interests and executive rewards by providing
substantial incentive opportunities to be earned by meeting pay-for-
performance standards designed to increase long-term shareholder
value. In order to accomplish these objectives, the Committee adopted
in 1995 an executive compensation program which provides (i) annual
base salaries at or near the market median, (ii) annual incentive
opportunities which reward the executives for achieving or surpassing
performance goals which represent industry norms of excellence, and
(iii) long-term incentive opportunities which are directly related to
increasing shareholder value.
Section 162(m) of the Internal Revenue Code of 1986, as amended,
imposes a limitation on the deductibility of nonperformance based
compensation in excess of $1 million paid to certain executive
officers. The Compensation Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation
is deductible to the extent permitted, while simultaneously providing
executives appropriate awards for their performance. The General
Partner's long-term incentive plans have been designed to comply with
the performance-based requirements of Section 162(m).
Base Salaries and Annual Cash Incentives
----------------------------------------
The range of base salaries for the executive officers of the General
Partner is established after a review by the Committee of the
salaries paid to executive officers of a comparison group of other
publicly traded real estate investment trusts. Other subjective
factors are considered such as the individual's experience and
performance.
An annual cash incentive range is established for each executive
officer at the beginning of the year. The actual annual cash
incentive paid to each executive is determined based on his or her
ability to impact measurable results. The amount of each executive's
annual award is based on a combination of three performance factors:
(i) overall corporate performance; (ii) business segment or
departmental performance; and (iii) individual performance. The
relative importance of each of the performance factors in determining
annual cash incentives differs for each executive position with the
performance factor for the most senior executives being based more
heavily on overall corporate performance and the performance factor
for the officers in-charge of business segments or departments being
based more
- 32 -
<PAGE>
heavily on the performance of their segment or department. The
overall corporate performance factor is based on a three-tier
measurement system consisting of Funds from Operations Growth Per
Share, Return on General Partners Shareholders' Equity and Return on
Real Estate Investments. The business segment performance is based on
certain financial measurements, including the volume and yield of new
acquisitions and developments, performance of the in-service property
portfolio, and the business segment's operating income contribution
to the General Partner. The amount of the targeted annual cash incentives
paid is based on the perceived level of attainment of each of the
measurements by the Committee.
Long-Term Incentive Opportunities
---------------------------------
The amount of long-term incentive compensation awarded to officers
and executives on an annual basis is determined at the discretion of
the Committee but is tied to overall corporate and business segment
performance, the participant's level of responsibility within the
General Partner and the participant's individual performance. The
long-term incentive opportunities consist of approximately two-thirds
Stock Options ("Options") and Dividend Increase Units ("DIUs") and
one-third Shareholder Value Grants.
Stock Option and Dividend Increase Unit Plans
---------------------------------------------
The objectives of the Stock Option and Dividend Increase Unit Plans
are to provide executive officers with long-term incentive
opportunities aligned with the unitholder benefits of an increased
Common Unit value and increased annual dividends. The number of
Options and DIUs issued to each executive annually is set by the
Committee based on the goal of providing approximately two-thirds of
the total annual long-term incentive award through these plans. The
Options and DIUs are for terms of no more than ten years. With
certain limited exceptions, awards made under the Stock Option and
Dividend Increase Unit Plans vest 20 percent per year over a five-
year period. The Options may not be issued for less than the fair
market value of the General Partner's Common Shares at the date of
grant. The value of each DIU at the date of exercise will be
determined by calculating the percentage of the General Partner's
annualized dividend per share to the market value of one Common Share
(the "Dividend Yield") at the date the DIU is granted and dividing
the increase in the General Partner's annualized dividend from the
date of grant to the date of exercise by such Dividend Yield. A DIU
may be exercised by a participant only to the extent that such
participant has exercised an Option to purchase a Common Share of the
General Partner under an Option granted under the 1995 Stock Option
Plan on the same date as the grant of the DIU.
Shareholder Value Plan
----------------------
The objective of the Shareholder Value Plan is to provide executive
officers with long-term incentive opportunities directly related to
providing total shareholder return in excess of the median of
independent market indices. The annual Shareholder Value Plan amount
for each executive is set by the Committee with the goal of providing
approximately one-third of the total long-term incentive award
through this plan. The award vests entirely three years after the
date of grant and the amount paid is based on the General Partner's
total shareholder return for such three year period as compared to
independent market indices. The independent market indices used for
comparison are the S&P 500 Index and the NAREIT Equity REIT Total
Return Index. The amount of the award payable may range from zero
percent if both of the rankings of the comparable returns are less
than the 50th percentile of both of the indices to 300 percent if the
rankings of both of the comparable returns are in the 90th percentile
or higher of both of the indices, with 100 percent of the award being
payable at the 60th percentile.
- 33 -
<PAGE>
Compensation of Chief Executive Officer
---------------------------------------
The compensation awarded to Mr. Hefner in 1998 consisted primarily of
an annual base salary, an annual cash incentive award, and grants
under the General Partner's long-term incentive plans. The total
compensation paid to Mr. Hefner has historically resulted in total
compensation that is below the comparable market median but is
considered appropriate in light of Mr. Hefner's substantial equity
interest in the General Partner and Partnership and his stock options
held.
Base Salary:
------------
The Committee intends to gradually increase Mr. Hefner's base salary
with the intent that, by 1999, his base salary will be equal to 90
percent of the market median of a comparison group of thirteen other
publicly traded real estate investment trusts. Mr. Hefner's annual
base salary for 1998 was $195,000.
Annual Cash Incentive:
----------------------
Under the Committee's executive compensation plan, Mr. Hefner is
eligible for a targeted annual cash incentive bonus. The amount of
Mr. Hefner's annual cash incentive bonus is determined solely upon
overall corporate performance which is based on a three-tier
measurement system consisting of Funds from Operations Growth Per
Share, Return on General Partner's Shareholders' Equity and Return on
Real Estate Investments as compared to pre-determined target criteria
established by the Committee. The amount of the targeted annual cash
incentives paid is based on the level of attainment of each of the
measurements as compared to the pre-determined targets. For 1998, the
General Partner's FFO Growth was 18.13% per Common Share, its Return
on Shareholders' Equity was 12.16% and its Return on Real Estate
Investments was 9.59%. Based on these results versus the pre-
determined targets established by the Committee, Mr. Hefner received
an Annual Cash Incentive award of $250,000 for 1998.
Long-Term Incentive Opportunity Award:
--------------------------------------
Mr. Hefner is also eligible for a targeted long-term incentive award
with a value equal to a percentage of his annual base salary. The
long-term incentive opportunity award granted to Mr. Hefner in 1998
consisted of i) the grant of an option to purchase 18,960 General
Partner Common Shares at a price of $24.25 per share, ii) the grant
of 18,960 DIUs with a Dividend Yield of 4.95%, and iii) the award of
a targeted amount of $66,667 under the Shareholder Value Plan.
In January 1998, Mr. Hefner received a payment of $53,460 pursuant to
a grant under the Shareholder Value Plan made in 1995. In February
1999, Mr. Hefner received a payment of $64,238 pursuant to a grant
under the Shareholder Value Plan made in 1996. The payout percentages
of these awards as determined by formulas contained in the plan were
178% and 214% for the grants made in 1995 and 1996, respectively.
Stock Purchase Plans
--------------------
In 1998, the Board of Directors adopted the Executive and Senior
Officer Stock Purchase Plan of the General Partner (the "Officer
Stock Purchase Plan") and the Director Stock Purchase Plan of the
General Partner (the "Director Stock Purchase Plan"). The purpose of
these plans is to more closely align officer and Director financial
rewards with the financial rewards realized by General Partner
shareholders, increase officer and Director motivation to manage the
General Partner and Partnership as equity owners, retain key
employees and increase the ownership of Common Shares by officers and
directors. On August 25, 1998, under the Officer Stock Purchase Plan,
certain officers of the General Partner received options to purchase
1,231,215 Common Shares at $21.625 per share (the closing price of a
Common Share on that date). On that same date, the officers
exercised these options by purchasing 1,231,215 Common Shares from
the General Partner at $21.625 per share. From August 26, 1998
through August 31, 1998, certain Directors of the General Partner
purchased 402,335 Common Shares under the Director Stock Purchase
Plan in the open market at an average price of $21.623 per share.
- 34 -
<PAGE>
All officers and Directors participating in the plans borrowed the
entire purchase price of the shares from KeyBank, N.A. and are
personally obligated to repay the loans. The General Partner and the
Partnership have unconditionally guaranteed the payment and
performance obligations of the officers and Directors to KeyBank,
N.A. Each participant is personally liable to the General Partner and
the Partnership for any payments made by the General Partner under the
guarantee as a result of default by such participant on their
KeyBank, N.A. loan.
Salary Replacement Plan
------------------------
In January 1999, subject to shareholder approval, the Committee
adopted the 1999 Salary Replacement Stock Option and Dividend
Increase Unit Plan of the General Partner (the "Salary Replacement
Plan"). The purpose of this plan is to encourage additional equity
ownership in the General Partner by key officers. Under this plan,
certain officers may elect to receive Options and DIUs in lieu of the
receipt of all or a portion of their base salary, annual incentive
bonus or Shareholder Value Plan payments. The number of Options and
DIUs granted under the Salary Replacement Plan will be based on the
amount of forgone compensation elected by a participant divided by
the Committee's determination of the value of an Option/DIU. The
exercise price of an option may not be less than the fair market
value of the General Partner's Common Shares at the date of grant.
All awards made under the Salary Replacement Plan will vest on the
date of grant.
Employment and Severance Agreements
-----------------------------------
In April 1998, the Committee adopted the General Partner Severance
Pay Plan. This plan provides for the payment of severance amounts to
certain key officers if, within one year of a change in control of
the General Partner and the Partnership, employment is terminated by
the General Partner other than "for cause" or if an officer
voluntarily terminates employment because of a reduction in the
officer's pay or his forced relocation. A "Level One" participant
will receive two times the sum of the compensation awarded to such
terminated participant for the calendar year preceding the date of
termination and a "Level Two" will receive one times his prior year
compensation. The only participants of the plan at this time are
Messrs. Burk, Chapman, Hefner, Horn, Linville, Oklak and Zink. The
Committee has designated each of these participants as eligible for
Level One benefits.
COMPENSATION COMMITTEE
Geoffrey Button, Chair
Ngaire E. Cuneo
James E. Rogers
Jay J. Strauss
L. Ben Lytle
- 35 -
<PAGE>
PERFORMANCE TABLE
The following table compares, over the last five years, the
cumulative total shareholder return on the General Partner's
Common Shares with the cumulative total return of the S&P 500
Index, and the cumulative total return of the NAREIT Equity REIT
Total Return Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
GENERAL PARTNER COMMON SHARES, S&P 500 INDEX,
AND NAREIT EQUITY REIT TOTAL RETURN INDEX *
<TABLE>
<CAPTION>
DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
The General
Partner 100.00 136.52 162.29 211.86 281.38 285.68
NAREIT 100.00 103.17 118.92 160.86 193.45 159.59
S&P 100.00 101.31 139.23 171.19 228.32 293.57
</TABLE>
* Assumes that the value of the investment in the General
Partner's Common Shares and each index was $100 on December 31,
1993 and that all dividends were reinvested.
- 36 -
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the compensation awarded, earned by,
or paid to the General Partner's chief executive officer and the
General Partner's six other most highly compensated executive
officers (the "Named Executive Officers") during the last three
fiscal years.
<TABLE>
<CAPTION>
LONG-TERM LONG-TERM
COMPENSATION COMPENSATION
ANNUAL COMPENSATION AWARDS PAYMENTS
------------------- ------------ ------------
(1) (2)
SECURITIES SHAREHOLDER ALL
NAME AND PRINCIPAL UNDERLYING VALUE PLAN OTHER
POSITION YEAR SALARY BONUS OPTIONS PAYMENTS COMP.
- ------------------ ---- ------ ----- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Thomas L.
Hefner 1998 $195,000 $250,000 76,763 $53,460 $7,676
President and 1997 175,000 200,000 13,010 0 3,200
Chief Executive
Officer 1996 165,000 100,000 12,880 0 3,000
Richard W. Horn 1998 $175,000 $325,000 23,699 71,280 $9,204
Executive Vice
President 1997 132,700 300,000 44,192 0 3,200
Office 1996 120,000 200,000 17,174 0 3,000
William E.
Linville, III 1998 $175,000 $275,000 69,942 71,280 $4,800
Executive Vice
President 1997 132,700 275,000 44,192 0 3,200
Industrial 1996 120,000 225,000 17,174 0 3,000
Gary A. Burk 1998 $175,000 $200,000 14,220 53,460 $4,800
President 1997 150,000 150,000 13,010 0 3,200
Construction 1996 150,000 75,000 12,880 0 3,000
Robert M. Chapman 1998 $175,000 $200,000 53,642 0 $3,311
Executive Vice
President 1997 21,192 100,000 10,000 0 0
Acquisitions 1996 0 0 0 0 0
Dennis D. Oklak
Executive Vice
President 1998 $175,000 $200,000 60,463 23,166 $4,800
Chief
Administrative 1997 150,000 150,000 7,096 0 3,200
Officer and
Treasurer 1996 140,000 85,000 7,872 0 3,000
Darell E. Zink, Jr. 1998 $175,000 $200,000 60,463 53,460 $4,800
Executive Vice
President 1997 150,000 150,000 13,010 0 3,200
and Chief Financial
Officer 1996 150,000 75,000 12,880 0 3,000
</TABLE>
(1) Includes the following options that were granted in August, 1998
in connection with the Officer Stock Purchase Plan: Mr. Hefner
57,803; Mr. Linville 46,243; Mr. Chapman 34,682; Mr. Oklak
46,243; Mr. Zink 46,243. Under that plan, the participants were
required to exercise the options the same day they were granted. The
grant price and the exercise price were both equal to the fair market
value of the General Partner's Common Shares on the date of grant.
(2) Represents payments made under the General Partner's Shareholder Value
Plan.
(3) For Messrs. Hefner, Horn, Linville, Burk, Oklak and Zink, includes a $4,800
contribution by the General Partner to the General Partner's Profit Sharing
and Salary Deferral Plan. For Mr. Chapman, a $2,625 Profit Sharing and
Salary Deferral Plan contribution was made. Also includes discounts of
$2,876, $4,404 and $686 received by Messrs. Hefner, Horn and Chapman,
respectively, in connection with Common Shares purchased under the General
Partner's Employee Stock Purchase Plan.
- 37 -
<PAGE>
STOCK OPTION GRANTS IN 1998
The following table sets forth certain information for the Named
Executive Officers relating to stock option grants during 1998 under
the General Partner's 1995 Stock Option Plan.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------
POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATE OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (1)
OPTIONS EMPLOYEES PRICE PER EXPIRATION --------------------
NAME GRANTED IN 1998 SHARE DATE 5% 10%
- ---- ---------- ---------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Hefner 18,960 1.1275% $24.250 1/28/08 $289,153 $732,771
(2) 57,803 3.4374% $21.625 8/25/98 $0 $0
Richard W. Horn 23,699 1.4093% $24.250 1/28/08 $361,426 $915,925
William E.
Linville, III 23,699 1.4093% $24.250 1/28/08 $361,426 $915,925
(2) 46,243 2.7499% $21.625 8/25/98 $0 $0
Gary A. Burk 14,220 .8456% $24.250 1/28/08 $216,865 $549,578
Robert M. Chapman 18,960 1.1275% $24.250 1/28/08 $289,153 $732,771
(2) 34,682 2.0624% $21.625 8/25/98 $0 $0
Dennis D. Oklak 14,220 .8456% $24.250 1/28/08 $216,865 $549,578
(2) 46,243 2.7499% $21.625 8/25/98 $0 $0
Darell E. Zink, Jr. 14,220 .8456% $24.250 1/28/08 $216,865 $549,578
(2) 46,243 2.7499% $21.625 8/25/98 $0 $0
</TABLE>
(1) The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the Securities and
Exchange Commission and, therefore, are not intended to forecast
future appreciation of the General Partner's stock price. For the
options expiring on January 28, 2008, the General Partner's per share
stock price would be $39.50 and $62.90 if increased 5% and 10%,
respectively, compounded annually over the 10-year option term.
(2) These options were granted in connection with the Officer Stock
Purchase Plan. Under that plan, the participants were required to
exercise the options the same day they were granted. The grant price
and the exercise price were each equal to the fair market value of
one General Partner Common Share on the date of grant.
The following table presents certain information for the Named
Executive Officers relating to the exercise of stock options during
1998 and, in addition, information relating to the valuation of
unexercised stock options.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT 12/31/98 AT 12/31/98 (1)
ON VALUE --------------------- --------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L.
Hefner (2) 114,203 $ 669,750 100,459 42,503 $1,073,609 $138,143
Richard W.
Horn 0 0 82,515 82,566 783,543 276,942
William E.
Linville,
III (2) 46,243 0 97,515 92,566 938,230 380,067
Gary A. Burk 42,300 518,175 114,559 37,763 1,233,997 138,143
Robert M.
Chapman (2) 34,682 0 2,000 26,960 1,000 4,000
Dennis D.
Oklak (2) 46,243 0 64,082 32,962 683,377 136,051
Darell E.
Zink,
Jr. (2) 167,022 1,374,697 36,080 37,763 370,657 138,143
</TABLE>
(1) Based on the closing price of the General Partner's Common Shares on
December 31, 1998 of $23.25.
(2) Includes shares exercised in connection with the Officer Stock Purchase
Plan for which no value was realized.
- 38 -
<PAGE>
The following table sets forth awards to the Named Executive Officers
in 1998 under the General Partner's Dividend Increase Share Plan and
Shareholder Value Plan.
LONG-TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
NUMBER OF PERFORMANCE UNDER NON-STOCK
SHARES, PERIOD PRICE-BASED-PLANS
DUIS, OR UNTIL ----------------------------
NAME OTHER RIGHTS PAYOUT THRESHOLD TARGET MAXIMUM
- ---- ------------ ---------- --------- ------- --------
<S> <C> <C> <C> <C> <C>
Thomas L. Hefner
Dividend Increase
Unit Plan (1) 18,960 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $66,667 $200,000
Richard W. Horn
Dividend Increase
Unit Plan (1) 23,699 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $83,333 $250,000
William E. Linville, III
Dividend Increase
Unit Plan (1) 23,699 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $83,333 $250,000
Gary A. Burk
Dividend Increase
Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $50,000 $150,000
Robert M. Chapman
Dividend Increase
Unit Plan (1) 18,960 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $66,667 $200,000
Dennis D. Oklak
Dividend Increase
Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $50,000 $150,000
Darell E. Zink, Jr.
Dividend Increase
Unit Plan (1) 14,220 DIUs N/A N/A N/A N/A
Shareholder Value
Plan (2) N/A 3 Years $0 $50,000 $150,000
</TABLE>
(1) Under the 1995 Dividend Increase Unit Plan, DIUs are granted to key
employees. DIUs vest over a five-year period at 20% per year. A participant
may exercise DIUs only to the extent that such participant has purchased a
General Partner Common Share pursuant to an option granted under the 1995
Stock Option Plan on the same date as the grant of the DIU. The value of
each DIU at the date of exercise is determined by calculating the Dividend
Yield at the date the DIU is granted and dividing the increase in the
General Partner's annualized dividend from the date of grant to the date
of exercise by such Dividend Yield. DIUs not exercised within 10 years of
the date of grant are forfeited. Distribution of a participant's benefits
under the 1995 Dividend Increase Unit Plan will be made in a single lump
sum payment in the form of the General Partner's Common Shares. The
"In-the-Money" value of vested DIUs at December 31, 1998 for these
executives was $104,402 for Messrs. Hefner, Zink and Burk, $178,247 for
Messrs. Horn and Linville, $6,936 for Mr. Chapman and $52,841 for
Mr. Oklak.
(2) Under the 1995 Shareholder Value Plan, awards are granted in specified
dollar amounts to selected key employees. The specified award is payable to
the participant on the third anniversary of the grant of the award. The
actual payments under the plan will be determined based upon the General
Partner's cumulative total shareholder return for the three year period
beginning on the date of grant as compared to the cumulative total return
for the S&P 500 Index and the NAREIT Equity REIT Total Return Index (the
"Indices") for the same period. The General Partner's cumulative total
shareholder return is calculated by determining the average per share
closing price of the General Partner's Common Shares for the 30 day period
preceding the end of the three year period increased by an amount that
would be realized if all cash dividends paid during the three year period
were reinvested in Common Shares of the General Partner and comparing this
amount to the average per share closing price of the General Partner's
Common Shares for the 30 day period preceding the date of grant. The
payment of one-half of the bonus award is adjusted based upon the
percentile ranking of the General Partner's cumulative total shareholder
return as compared to each of the Indices for the same period. The payment
adjustment may range from zero percent of the amount awarded if both of
the rankings of the comparable returns are less than the 50th percentile
of both of the Indices to 300 percent of the amount awarded if both of the
rankings are in the 90th percentile or higher of both of the Indices,
with 100 percent of the award being payable at the 60th percentile.
Distribution of a participant's adjusted bonus award at the end of the
three-year period after the date of grant will be made one-half in cash
and one-half in the form of Common Shares of the General Partner. The
amount of the awards payable to these executives on December 31, 1998
was $64,238 for Messrs. Hefner, Zink, and Burk, $85,650 for Messrs.
Linville and Horn, and $39,256 for Mr. Oklak.
- 39 -
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Ms. Cuneo, Mr. Lytle, and Mr. Strauss serve on the General Partner's
Executive Compensation Committee. The Partnership contracted with an
affiliate of Conseco, Inc. during 1998 for certain construction and
insurance related services. Ms. Cuneo is an Executive Vice President
and director of Conseco, Inc. In 1998, the Partnership received
$561,000 in construction related fees from a Conseco, Inc. affiliate
and paid a Conseco, Inc. affiliate $1,522,000 in insurance premiums.
The Partnership leases office space to affiliates of Anthem, Inc.
Mr. Lytle is Chairman, President and Chief Executive Officer of
Anthem, Inc. Under the leases, which have lease rates comparable to
similar space in the area, the Partnership received total rental
income of $1,756,000 in 1998.
In connection with the acquisition of an 8-building portfolio of
properties with a total purchase price of $16.2 million, the
Partnership paid Regent Realty Group, Inc. a commission of $117,000.
Mr. Strauss is Chairman and Chief Executive Officer of Regent Realty
Group, Inc.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The Partnership had 10,831,552 Limited Partner Units which were
outstanding as of the close of business on March 1, 1999.
The following table shows, as of March 1, 1999, the number and
percentage of Limited Partner Units held by each person known to the
Partnership 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 Limited Partner Units Beneficial Ownership
----------------- --------------------- --------------------
<S> <C> <C>
Thomas L. Hefner 2,588,006 (1) 23.89%
Darell E. Zink, Jr. 2,570,014 (1) 23.73%
Daniel C. Staton 2,407,478 (1) 22.23%
John W. Wynne 2,219,186 (1) 20.49%
David R. Mennel 2,165,022 (2) 19.99%
Gary A. Burk 2,164,278 (3) 19.98%
DMI Partnership 2,008,500 (4) 18.54%
Edward T. Baur 1,537,082 (4) 14.19%
Birch Mullins 1,472,959 (5) 13.60%
Robert L. and Mary Johnson 1,419,038 13.10%
James D. Eckhoff 1,149,897 (6) 10.62%
Lindbergh-Warson Properties, Inc. 1,086,934 10.03%
</TABLE>
(1) Includes 2,008,500 Limited Partner Units owned by DMI Partnership, a
partnership in which each of these individuals owns a 20.71% beneficial
interest.
(2) Includes 2,008,500 Limited Partner Units owned by DMI Partnership, a
partnership in which Mr. Mennel owns a 7.50% beneficial interest.
(3) Includes 2,008,500 Limited Partner Units owned by DMI Partnership, a
partnership in which Mr. Burk owns a 7.51% beneficial interest.
(4) Includes 1,086,934 Limited Partner Units owned by Lindbergh-Warson
Properties, Inc., a partnership in which Mr. Baur own 60.395% beneficial
interest.
(5) Includes 1,086,934 Limited Partner Units owned by Lindbergh-Warson
Properties, Inc., a partnership in which Mr. Mullins owns a 34.094%
beneficial interest.
(6) Includes 1,086,934 Limited Partner Units owned by Lindbergh-Warson
Properties, Inc., a partnership in which Mr. Eckhoff owns a 5.512%
beneficial interest.
- 40 -
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A wholly owned subsidiary of the General Partner is the sole general
partner of Duke Realty Services Limited Partnership (the "Services
Partnership"), which is in turn the sole general partner of Duke
Construction Limited Partnership (the "Construction Partnership").
The operations of these entities are included in the consolidated
financial statements of the Partnership. The Services Partnership
provides third-party property management, leasing, construction
management and development services and the Construction Partnership
provides third-party construction services. Certain of the executive
officers own limited partnership interests in these entities. Thomas
L. Hefner, Daniel C. Staton, Darell E. Zink, Jr., John W. Wynne, Gary
A. Burk and David R. Mennel, all of whom are officers or Directors of
the General Partner, control DMI Partnership ("DMI"), which owns ninety
percent of the capital interests of the Services Partnership and a
profits interest which varies from ten percent to ninety percent. The
share of net income of the Services Partnership allocated to DMI in
1998 was $1,211,000. DMI's share of net income from the Services
Partnership is included in minority interest in the Partnership's
financial statements. The Partnership has an option to acquire DMI's
interest in the Services Partnership in exchange for 833,334 of Common
Shares of the General Partner. The Partnership is required to purchase
DMI's interest in the Services Partnership for 833,334 Common Shares of
the General Partner upon a change in control of the General Partner or
the dissolution of the Partnership. DMI also indirectly owns a ninety-five
percent limited partnership interest in the Construction Partnership, which
the Partnership has the option to purchase for $1,000. The Construction
Partnership has a deficit cumulative capital balance; thus there was no
allocation of net income to any of the partners of the Construction
Partnership, including DMI.
The Services Partnership and the Construction Partnership provide
property management, leasing, construction and other tenant related
services to properties in which Messrs. Hefner, Staton, Zink, Wynne,
Burk and Mennel have ownership interests. The Partnership has an
option to acquire these executive officers' interests in these
properties (the "Option Properties"). In 1998, the Services
Partnership and the Construction Partnership received fees of
$2,247,000 for services provided to the Option Properties. The fees
charged by the Services Partnership and the Construction Partnership
for such services are equivalent to those charged to other third-
party owners for similar services except for one property. Pursuant
to an agreement with this property's lender, the payment of 75% of
the fees was deferred and payable only from excess sale or
refinancing proceeds. The Partnership agreed to this deferral in 1997
in order to retain certain contracts for services provided to other
properties owned by the lender. In 1998, the Partnership acquired
this loan from the third party lender and all such deferred fees have
been paid.
The Partnership also leased operating facilities in certain of the
Option Properties. In 1998, the aggregate rent under such leases was
approximately $21,309. The rental amount paid is comparable to
similar space in the area.
The Partnership has a $20.0 million loan to the Services Partnership,
which requires interest only payments at 12% through September, 2003.
The loan then amortizes over a 15-year period with interest at 12%
until final maturity in September, 2018. The loan is guaranteed by an
entity owned indirectly by Messrs. Hefner, Staton, Zink, Wynne, Burk
and Mennel. The Partnership also provides working capital financing
to the Services Partnership at a rate of prime plus 1%.
Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel, as well as
Edward T. Baur, a Director of the General Partner, and a corporation
controlled by Mr. Baur, have personal guarantees for $65.5 million of
the Partnership's debt. The Partnership has indemnified them from any
liability with respect to such debt.
The Partnership contracts with Steel Frame Erectors, Inc. ("SFE"), an
entity owned by Messrs. Hefner, Staton, Zink, Wynne, Burk and Mennel,
for certain construction-related services. During 1998, the total
costs under these contracts for Partnership related projects were
$1,396,000. The construction fees earned by SFE on company related
projects were $43,000. A 50% owned subsidiary of SFE leases space in
an office building from a limited liability company partially owned
by the Partnership. The subsidiary paid $294,000 under this lease in
1998.
In May, 1998 and January, 1999, a partnership 70% owned by Edward T.
Baur contributed land and a building to the Partnership in return for
101,849 Limited Partner Units with a value of $2.3 million and
the assumption of $1.4 million in indebtedness.
- 41 -
<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:
The following Consolidated Financial Statements of the
Partnership, together with the Independent Auditor's Report,
are listed below:
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1998 and 1997
Consolidated Statements of Operations, Years Ended December
31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows, Years Ended December
31, 1998, 1997 and 1996
Consolidated Statements of Unitholders' Equity, Years Ended
December 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements
2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Schedule III - Real Estate and Accumulated Depreciation
- 42 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
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, 1998 and 1997, and the results of their operations and
their cash flows for each of the years in the three-year period
ended December 31, 1998, 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 LLP
Indianapolis, Indiana
January 26, 1999 (except as to Note 12, which is as of March 1,
1999)
- 43 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
1998 1997
---- ----
ASSETS
- ------
<S> <C> <C>
Real estate investments:
Land and improvements $ 312,022 $ 231,614
Buildings and tenant improvements 2,091,757 1,591,604
Construction in progress 185,950 107,242
Investments in unconsolidated companies 125,746 106,450
Land held for development 146,911 139,817
--------- ---------
2,862,386 2,176,727
Accumulated depreciation (179,887) (116,264)
--------- ---------
Net real estate investments 2,682,499 2,060,463
Cash 6,626 10,372
Accounts receivable, net of allowance
of $896 and $420 9,641 5,932
Accrued straight-line rent receivable,
net of allowance of $841 20,332 14,746
Receivables on construction contracts 29,162 22,700
Deferred financing costs, net of
accumulated amortization of $11,064
and $9,101 11,316 12,289
Deferred leasing and other costs, net
of accumulated amortization of $16,838
and $9,251 53,281 34,369
Escrow deposits and other assets 41,205 16,303
--------- ---------
$2,854,062 $2,177,174
========= =========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Indebtedness:
Secured debt $ 326,317 $ 367,119
Unsecured notes 590,000 340,000
Unsecured line of credit 91,000 13,000
--------- ---------
1,007,317 720,119
Construction payables and amounts
due subcontractors 55,012 40,786
Accounts payable 4,836 1,342
Accrued expenses:
Accrued real estate taxes 36,075 25,203
Accrued interest 10,329 6,883
Other accrued expenses 21,676 13,851
Other liabilities 21,928 11,720
Tenant security deposits and
prepaid rents 18,534 14,268
--------- ---------
Total liabilities 1,175,707 834,172
--------- ---------
Minority interest 367 222
--------- ---------
Partners' equity:
General partner
Common equity 1,223,260 1,016,733
Preferred equity
(liquidation preference
of $360,000) 348,366 218,906
--------- ---------
1,571,626 1,235,639
Limited partners' common equity 106,362 107,141
--------- ---------
Total partners' equity 1,677,988 1,342,780
--------- ---------
$2,854,062 $2,177,174
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 44 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues:
Rental income $337,768 $220,970 $156,392
Equity in earnings of
unconsolidated companies 10,857 8,732 5,768
------- ------- -------
348,625 229,702 162,160
------- ------- -------
Operating expenses:
Rental expenses 59,769 40,375 29,669
Real estate taxes 33,906 20,485 14,244
Interest expense 60,217 40,296 32,552
Depreciation and amortization 68,766 44,806 31,363
------- ------- -------
222,658 145,962 107,828
------- ------- -------
Earnings from rental
operations 125,967 83,740 54,332
------- ------- -------
SERVICE OPERATIONS:
Revenues:
Property management,
maintenance
and leasing fees 13,189 12,799 11,496
Construction management and
development fees 10,417 8,646 6,895
Other income 1,110 933 1,538
------- ------- -------
24,716 22,378 19,929
------- ------- -------
Operating expenses:
Payroll 12,453 10,761 9,176
Maintenance 2,451 2,009 1,526
Office and other 2,617 2,455 2,791
------- ------- -------
17,521 15,225 13,493
------- ------- -------
Earnings from service
operations 7,195 7,153 6,436
------- ------- -------
General and administrative
expenses (11,573) (7,318) (4,053)
------- ------- -------
Operating income 121,589 83,575 56,715
OTHER INCOME (EXPENSE):
Interest income 1,562 2,169 1,185
Other expense (305) (1,083) (174)
Earnings from property sales 1,351 1,775 4,532
Minority interest in earnings
of subsidiaries (1,252) (1,171) (986)
------- ------- -------
Net income 122,945 85,265 61,272
Dividends on preferred units (19,833) (12,485) (2,559)
------- ------- -------
Net income available for
common units $103,112 $ 72,780 $ 58,713
------- ------- -------
Net income per common unit:
Basic $ 1.13 $ .98 $ .92
------- ------- -------
Diluted $ 1.12 $ .97 $ .91
------- ------- -------
Weighted average number of
common units outstanding 91,576 74,142 63,960
======= ======= =======
Weighted average number of
common and dilutive potential
common units 92,468 74,993 64,398
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 45 -
DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Years Ended December 31
(in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $122,945 $ 85,265 $ 61,272
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of buildings and tenant
improvements 61,414 39,771 27,568
Amortization of deferred leasing
and other costs 7,352 5,035 3,795
Amortization of deferred financing
costs 1,362 1,368 1,208
Minority interest in earnings 1,252 1,170 986
Straight-line rent adjustment (5,794) (4,469) (3,536)
Earnings from property sales (1,351) (1,775) (4,532)
Construction contracts, net 7,764 7,778 (1,640)
Other accrued revenues and
expenses, net 31,106 30,168 12,298
Equity in earnings in excess of
distributions received from
unconsolidated companies (5,521) (5,535) (1,949)
------- ------- -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 220,529 158,776 95,470
------- ------- -------
Cash flows from investing activities:
Rental property development costs (279,391) (195,088) (130,300)
Acquisition of real estate
investments (301,151) (324,203) (182,024)
Acquisition of undeveloped land and
infrastructure costs (53,736) (101,220) (16,122)
Recurring tenant improvements (10,785) (7,985) (6,048)
Recurring leasing costs (6,655) (5,057) (3,032)
Recurring building improvements (2,206) (1,211) (780)
Other deferred leasing costs (19,180) (14,000) (7,308)
Other deferred costs and other assets (10,808) (8,585) 6,808
Proceeds from property sales, net 9,071 32,560 50,844
Distributions received from
unconsolidated companies - 60,000 12,423
Net investment in and advances
to unconsolidated companies (28,734) (32,226) (1,470)
------- ------- -------
NET CASH USED BY INVESTING
ACTIVITIES (703,575) (597,015) (277,009)
------- ------- -------
Cash flows from financing activities:
Contributions from general partner 340,938 467,406 203,087
Proceeds from indebtedness 250,000 100,000 142,200
Payments on indebtedness
including principal amortization (49,997) (9,999) (84,677)
Borrowings (repayments) on lines
of credit, net 78,000 (14,000) (11,000)
Distributions to partners (136,967) (94,524) (65,986)
Distributions to minority interest (1,107) (1,328) (904)
Deferred financing costs (1,567) (4,290) (1,517)
------- ------- -------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 479,300 443,265 181,203
------- ------- -------
NET INCREASE (DECREASE)
IN CASH (3,746) 5,026 (336)
Cash and cash equivalents at
beginning of year 10,372 5,346 5,682
------- ------- -------
Cash and cash equivalents at
end of year $ 6,626 $ 10,372 $ 5,346
======= ======= =======
Other non-cash items:
Assumption of debt for real
estate acquisitions $ 9,195 $118,303 $ 24,472
======= ======= =======
Contributions of property to
unconsolidated companies $ 1,040 $ 49,381 $ 20,649
======= ======= =======
Conversion of Limited Partner
Units to shares $ 5,450 $ 19,446 $ 21,627
======= ======= =======
Issuance of Limited Partner Units
for real estate acquisitions $ 2,038 $ 95,720 $ 8,896
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 46 -
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, 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
($1.00 per Common Unit) (56,180) - (7,815) (63,995)
--------- ------- ------- ---------
BALANCE AT DECEMBER 31, 1996 683,710 72,856 12,703 769,269
Net income 65,206 12,485 7,574 85,265
Capital contribution from Duke
Realty Investments, Inc. 321,554 146,050 - 467,604
Acquisition of partnership
interest for Common Stock of
Duke Realty Investments, Inc. 19,446 - - 19,446
Acquisition of property in
exchange for Limited
Partner Units - - 95,720 95,720
Distributions to preferred
unitholders - (12,485) - (12,485)
Distributions to partners
($1.10 per Common Unit) (73,183) - (8,856) (82,039)
--------- ------- ------- ---------
BALANCE AT DECEMBER 31, 1997 1,016,733 218,906 107,141 1,342,780
Net income 92,018 19,833 11,094 122,945
Capital contribution from
Duke Realty Investments, Inc. 212,282 129,460 - 341,742
Acquisition of partnership
interest for Common Stock of
Duke Realty Investments, Inc. 5,450 - - 5,450
Acquisition of property in
exchange for Limited Partner
Units - - 2,038 2,038
Distributions to preferred
unitholders - (19,833) - (19,833)
Distributions to partners
($1.28 per Common Unit) (103,223) - (13,911) (117,134)
--------- ------- ------- ---------
BALANCE AT DECEMBER 31, 1998 $1,223,260 $348,366 $106,362 $1,677,988
========= ======= ======= =========
COMMON UNITS OUTSTANDING AT
DECEMBER 31, 1998 86,053 10,800 96,853
========= ======= ==========
Common Units outstanding at
December 31, 1997 76,065 10,989 87,054
========= ======= ==========
Common Units outstanding
at December 31, 1996 58,972 7,392 66,364
========= ======= ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 47 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
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" 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, Minneapolis, Minnesota;
Chicago, Illinois; 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 consolidated financial statements include the accounts of the
Partnership and its majority-owned or controlled subsidiaries. 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 1997 and 1996 balances have been reclassified to conform to
1998 presentation.
STOCK SPLIT
-----------
All units and per unit amounts have been adjusted to reflect the
General Partner's two-for-one stock split effected in August 1997.
- 48 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
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 and 15 years, respectively, 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 development, construction or
expansion of real estate investments are capitalized as a cost of
the property. All external costs associated with the acquisition of
real estate investments are capitalized as a cost of the property.
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.
The acquisitions of partnership interests are recorded under the
purchase method with assets acquired reflected at the fair market
value of the General Partner's common stock on the date of
acquisition, net of the retirement of any minority interest
liabilities. The acquisition amounts are allocated to rental
property based on their estimated fair values.
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.
CASH EQUIVALENTS
----------------
Highly liquid investments with a maturity of three months or less
when purchased are classified as cash equivalents.
DEFERRED COSTS
--------------
Costs incurred in connection with obtaining financing are amortized
to interest expense on the straight-line method over the term of the
related loan. All direct and indirect costs associated with the
rental of real estate investments 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.
- 49 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
REVENUES
--------
Rental Operations
-----------------
Rental income from leases with scheduled rental increases during
their terms is recognized 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 incurred.
NET INCOME PER COMMON UNIT
--------------------------
Basic net income per common unit is computed by dividing net income
available for common units by the weighted average number of common
units outstanding for the period. Diluted net income per unit is
computed by dividing the sum of net income available for common
units and minority interest in earnings of unitholders, by the sum
of the weighted average number of common units and dilutive
potential common units outstanding for the period.
The following table reconciles the components of basic and diluted
net income per unit:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Basic net income available for
common units $103,112 $72,780 $58,713
======= ====== ======
Weighted average partnership
units outstanding 91,576 74,142 63,960
Dilutive units for long-term
compensation plans 892 851 438
------- ------ ------
Weighted average number of common
units and dilutive potential common
units 92,468 74,993 64,398
======= ====== ======
</TABLE>
The Preferred D Series Convertible equity was anti-dilutive in 1998;
therefore, no conversion to common units is included in weighted
units outstanding at December 31, 1998.
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.
- 50 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The fair values of the Partnership's financial instruments are
generally calculated as the present value of estimated future cash
flows using a discount rate commensurate with the risks involved and
approximate their carrying or contract values.
DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------
The Partnership enters into derivative financial instruments such as
interest rate swaps and treasury locks in order to mitigate its
interest rate risk on a related financial instrument. These
derivative financial instruments are designated as hedges and
deferral accounting is applied as the derivative financial
instrument reduces exposure to interest rate risk. Gains and losses
on derivative financial instruments are amortized to interest
expense over the term of the hedged instrument. Amounts paid or
received on interest rate swaps are included in interest expense.
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.
(3) RELATED PARTY TRANSACTIONS
--------------------------
The Partnership provides management, leasing, construction and other
tenant related services to partnerships in which certain executive
officers have continuing ownership interests. The Partnership was
paid fees totaling $2.3 million, $3.3 million and $3.2 million for
such services in 1998, 1997 and 1996, 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 options were granted.
(4) INVESTMENTS IN UNCONSOLIDATED COMPANIES
--------------------------------------
Combined summarized financial information of the companies which are
accounted for by the equity method as of December 31, 1998 and 1997
and for the years ended December 31, 1998, 1997, and 1996 are as
follows (in thousands):
- 51 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Land, buildings and tenant
improvements, net $377,152 $322,799
Land held for development 15,136 14,261
Other assets 35,615 10,707
------- -------
$427,903 $347,767
======= =======
Property indebtedness $111,165 $ 94,982
Other liabilities 34,221 12,866
------- -------
145,386 107,848
Owners' equity 282,517 239,919
------- -------
$427,903 $347,767
======= =======
Rental income $ 52,703 $ 29,709 $21,880
======= ======= ======
Net income $ 19,753 $ 12,481 $ 9,761
======= ======= ======
</TABLE>
(5) Indebtedness
<TABLE>
<CAPTION>
Indebtedness at December 31 consists of the following (in thousands):
1998 1997
---- ----
<S> <C> <C>
Fixed rate secured debt, weighted average
interest rate of 8.09% at December 31, 1998,
maturity dates ranging from 1999 to 2017 $ 285,892 $334,239
Variable rate secured debt, weighted average
interest rate of 5.58% at December 31, 1998,
maturity dates ranging from Demand to 2025 40,425 32,880
Unsecured notes, weighted average interest
rate of 7.19% at December 31, 1998,
maturity dates ranging from 2000 to 2028 590,000 340,000
Unsecured line of credit, interest rate of
6.43% at December 31, 1998, maturity date
of 2001 91,000 13,000
--------- -------
$1,007,317 $720,119
========= =======
</TABLE>
As of December 31, 1998, the $326.3 million of secured debt is
collateralized by rental properties with a net carrying value of
$515.7 million.
The Partnership's unsecured LOC is used to fund development and
acquisition of additional rental properties and to provide working
capital as needed. In 1998, the Partnership increased the amount
available under the LOC to $450 million and maintained the borrowing
rate of LIBOR plus .80%. As part of the current LOC agreement, the
Partnership has the option to obtain borrowings from the financial
institutions which participate in the LOC at rates lower than LIBOR
plus .80%, subject to certain restrictions. All amounts outstanding on
the unsecured LOC at December 31, 1998 are at LIBOR plus .80%
(effective rate of 6.43%). The unsecured line of credit matures in
April 2001.
The Partnership entered into a $75.0 million forward Treasury Lock
Agreement (the "Treasury Lock") in 1997 to fix the effective interest
rate of a debt financing by the Partnership. The Partnership paid
$575,000 in 1998 to settle the Treasury Lock in conjunction with the
closing of the financing. The amount is being treated as a hedge and
is being amortized into interest expense over the term of the related
financing.
At December 31, 1998, scheduled amortization and maturities of all
indebtedness for the next five years and thereafter are as follows
(in thousands):
- 52 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1999 $ 43,315
2000 70,603
2001 172,049
2002 56,462
2003 70,663
Thereafter 594,225
---------
$1,007,317
=========
</TABLE>
Cash paid for interest in 1998, 1997, and 1996 was $63.6 million,
$41.9 million, and $35.5 million, respectively. Total interest
capitalized in 1998, 1997 and 1996 was $8.5 million, $6.0 million and
$5.5 million, respectively.
(6)SEGMENT REPORTING
-----------------
The Partnership is engaged in four operating segments, the ownership
and rental of office, industrial, and retail real estate investments
and the providing of various real estate services such as property
management, maintenance, leasing, and construction management to third-
party property owners ("Service Operations). The Partnership's
reportable segments offer different products or services and are
managed separately because each requires different operating
strategies and management expertise. There are no material
intersegment sales or transfers.
Non-segment revenue to reconcile to total revenue consists mainly of
equity in earnings of joint ventures. Non- segment assets to reconcile
to total assets consists of corporate assets including cash, deferred
financing costs and investments in unconsolidated subsidiaries.
The accounting policies of the segments are the same as those described
in Note 1.
The Partnership assesses and measures segment operating results based
on a performance measure referred to as Funds From Operations ("FFO").
The National Association of Real Estate Investment Trusts defines FFO
as net income or loss, excluding gains or losses from debt
restructurings and sales of property, plus depreciation and
amortization and adjustments for minority interest and unconsolidated
companies (adjustments for minority interest and unconsolidated
companies are calculated to reflect FFO on the same basis). FFO is not
a measure of operating results or cash flows from operating activities
as measured by generally accepted accounting principles, is not
necessarily indicative of cash available to fund cash needs and should
not be considered an alternative to cash flows as a measure of
liquidity. Interest expense and other non-property specific revenues
and expenses are not allocated to individual segments in determining
the Partnership's performance measure.
- 53 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
The revenues, FFO and assets for each of the reportable segments are
summarized as follows for the years ended and as of December 31, 1998,
1997, and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
----- ---- ----
<S> <C> <C> <C>
Revenues
Rental Operations:
Office $ 211,638 $ 141,331 $ 98,667
Industrial 104,658 60,209 40,789
Retail 21,102 18,345 16,625
Service Operations 24,716 22,378 19,929
--------- --------- ---------
Total Segment Revenues 362,114 242,263 176,010
Non-Segment Revenue 11,227 9,817 6,079
--------- --------- -------
Consolidated Revenue $ 373,341 $ 252,080 $182,089
========= ========= =======
Funds From Operations
Rental Operations:
Office $ 148,822 $ 98,323 $ 68,011
Industrial 83,606 49,898 33,526
Retail 17,685 15,033 13,514
Services Operations 7,195 7,153 6,436
--------- --------- ---------
Total Segment FFO 257,308 170,407 121,487
Non-Segment FFO:
Interest expense (60,217) (40,296) (32,552)
Interest income 1,562 2,169 1,185
General and administrative
expense (11,573) (7,318) (4,053)
Other expenses (6,325) (4,227) (2,746)
Minority interest in earnings
of subsidiaries (1,252) (1,171) (986)
Joint Venture FFO 15,159 11,749 7,658
Dividends on preferred units (19,833) (12,485) (2,559)
--------- --------- ---------
Consolidated FFO 174,829 118,828 87,434
Depreciation and amortization (68,766) (44,806) (31,363)
Share of joint venture
adjustments (4,302) (3,017) (1,890)
Earnings from property sales 1,351 1,775 4,532
--------- --------- -------
Net income available for
common unitholders $ 103,112 $ 72,780 $ 58,713
========= ========= =======
Assets
------
Rental Operations
Office $1,409,162 $1,085,142
Industrial 907,656 639,630
Retail 161,675 140,002
Service Operations 55,268 41,339
--------- ---------
Total Segment Assets 2,533,761 1,906,113
Non-Segment Assets 320,301 271,061
--------- ---------
Consolidated Assets $2,854,062 $2,177,174
========= =========
</TABLE>
(7) LEASING ACTIVITY
------------------
Future minimum rents due to the Partnership under non-cancelable
operating leases at December 31, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
1999 $ 284,746
2000 254,783
2001 217,107
2002 176,846
2003 139,674
Thereafter 530,175
---------
$1,603,331
=========
</TABLE>
- 54 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
In addition to minimum rents, certain leases require reimbursements of
specified operating expenses which amounted to $56.5 million, $33.8
million, and $19.7 million for the years ended December 31, 1998, 1997
and 1996, respectively.
(8) EMPLOYEE BENEFIT PLANS
----------------------
The Partnership maintains a 401(k) plan for the benefit of its full-
time employees. The Partnership matches the employees' contributions
up to three percent of the employees' salary and may also make annual
discretionary contributions. Total expense recognized by the
Partnership was $1,482,000, $882,000 and $328,000 for the years ended
1998, 1997 and 1996, 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 $2,178,000, $1,245,000 and $1,193,000 for 1998, 1997 and
1996, 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.
(9) 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 by the Partnership in
exchange for additional Common or Preferred units.
The following series of preferred equity is outstanding as of December
31, 1998 (in thousands, except percentages):
<TABLE>
<CAPTION>
Shares Dividend Redemption Liquidation
Description Outstanding Rate Date Preference Convertible
----------- ----------- -------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Preferred A Series 300 9.100% August 31, 2001 $ 75,000 No
Preferred B Series 300 7.990% September 30, 2007 150,000 No
Preferred D Series 540 7.375% December 31, 2003 135,000 Yes
</TABLE>
All series of preferred equity require cumulative distributions, have
no stated maturity date, and the redemption price of each series may
only be paid from the proceeds of other capital contributions from the
General Partner, which may include other classes or series of
preferred equity.
The Preferred Series D equity is convertible at a conversion rate of
9.3677 common units for each preferred unit outstanding.
The dividend rate on the Preferred B Series equity increases to 9.99%
after September 12, 2012.
In July 1998, the Board of Directors of the General Partner approved
the adoption of a shareholder rights plan ("Rights Agreement") and
declared a dividend of one right for each outstanding share of the
General Partner's Common Stock to stockholders of record at the close
of business on August 3, 1998, and for each share of common stock
issued by the General Partner thereafter and prior to the occurrence
of certain triggering events which would in effect execute the Rights
Agreement. Upon the occurrence of certain triggering events, each
right entitles the registered holder to purchase from the General
Partner one one-thousandth of a share of
- 55 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
Series C Junior Preferred Stock of the General Partner. In general,
each share of Series C Preferred Shares has substantially the same
economic attributes and carries substantially the same voting rights
as one share of General Partner Common Stock. As of December 31, 1998,
no events have triggered execution of the Rights Agreement.
(10) Stock Based Compensation
------------------------
The Partnership has two fixed stock option plans and two performance
based stock compensation plans. 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 as the exercise price of each option equals the
market price of the General Partner's stock on the date of grant. The
Partnership charges 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 net income per unit for the years ended December 31 would have
been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C> <C>
Net income As reported $103,112 $72,780 $58,713
Pro forma 102,805 72,606 58,564
Basic net income As reported 1.13 .98 .92
per unit Pro forma 1.12 .98 .92
Diluted net income As reported 1.12 .97 .91
per unit Pro forma 1.11 .97 .91
</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.
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: Dividend yield of 6.0% for all grants; expected
volatility of 19% for all grants; weighted average risk-free interest
rates of 5.7%, 6.4%, and 5.6% for 1998, 1997 and 1996 grants,
respectively; and weighted average expected lives of 6.5 years, 6.5
years, 7.9 years for 1998, 1997 and 1996 grants, respectively.
Fixed Stock Option Plans
------------------------
A summary of the status of the Partnership's two fixed stock option
plans as of December 31, 1998, 1997 and 1996, and changes during the
years ended on those dates is as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------------------- ------------------- ---------------------
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 1,927,380 $14.26 1,947,642 $12.89 1,732,138 $12.48
Granted 1,681,611 22.32 346,008 20.09 246,914 16.06
Exercised (1,543,026) 19.72 (319,169) 11.98 (200) 12.94
Forfeited (17,993) 21.50 (47,101) 15.74 (31,210) 15.34
--------- --------- ---------
Outstanding,
end of year 2,047,972 16.70 1,927,380 14.26 1,947,642 12.89
========= ========= =========
Options
exercisable,
end of year 1,067,753 927,312 864,657
========= ========= =========
Weighted-average
fair value
of options
granted during
the year $ .836 $ 2.81 $ 1.96
====== ====== =====
</TABLE>
- 56 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
The options outstanding at December 31, 1998, under the two fixed
stock option plans have a range of exercise prices from $11.88 to
$24.48 with a weighted average exercise price of $16.70 and a weighted
average remaining contractual life of 6.80 years. The options
exerciseable at December 31, 1998, have a weighted average exercise
price of $13.32.
Each option's maximum term is ten years and, with limited exceptions,
options granted under both plans vest at 20% per year, or, if earlier,
upon the death, retirement or disability of the optionee or a change
in control of the Partnership.
In August 1998, the General Partner granted 1,231,215 stock options to
certain officers in connection with those officers' participation in
the General Partner's Executive and Senior Officer Stock Purchase
Plan. Under this plan, the recipients of these stock options were
required to purchase 1,231,215 shares of General Partner Common Stock
by immediately exercising the stock options. Because the exercise
price of the stock option was the same as the fair market value of the
stock on the date of grant, these options had no value on the date of
grant. Excluding the 1,231,215 stock options granted in connection
with the Executive and Senior Officer Stock Purchase Plan, the
weighted-average fair value of options granted during 1998 was $3.12.
Performance Based Stock Plans
-----------------------------
The General Partner 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 General Partner
stock. A maximum of 400,000 shares of General Partner 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 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. 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 200,000 shares of General Partner 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.
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 two performance based stock compensation plans and,
therefore, computes compensation cost for these 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 these plans was $4,132,000, $2,515,000 and
$513,000 for 1998, 1997 and 1996, respectively.
- 57 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
(11) COMMITMENTS AND CONTINGENCIES
The Partnership has guaranteed $93 million of mortgage loans of
unconsolidated companies of which the Partnership is a 50% partner.
The mortgage loans are collateralized by rental properties of joint
ventures which have a net carrying value substantially in excess of
the mortgage loans. The Partnership does not anticipate that it will
be required to satisfy these guarantees.
The Partnership has entered into agreements, subject to the completion
of due diligence requirements, resolution of certain contingencies and
completion of customary closing conditions, for the future acquisition
of land totaling $86,439,000. The acquisitions are scheduled to close
periodically through 2002 and will be paid for through a combination
of cash and Limited Partner Unit issuance.
In August 1998, the General Partner and the Partnership adopted The
Executive and Senior Officer Stock Purchase Plan (the "Stock Purchase
Plan") whereby members of management and unaffiliated members of the
Partnership's Board of Directors purchased approximately $37 million
of common stock of the Partnership. Both the management and Board of
Director purchases were financed by five-year personal loans at market
interest rates from a financial institution. Participants are personally
responsible for repaying the interest, principal balance, and other
obligations as defined in the Stock Purchase Plan. As a condition of
the financing agreement with the financial institution, the
Partnership has guaranteed repayment of principal, interest and other
obligations for each participant, but is fully indemnified by the
participants. In the opinion of management, it is not probable that
the Partnership will be required to satisfy this guarantee.
The Partnership is engaged in litigation as a defendant in a case
filed by a tenant involving an alleged breach of contractual lease
obligation. Based on information currently available and upon the
advice of counsel, it is the opinion of management that the ultimate
disposition of the pending legal proceeding should not have a material
adverse effect on the Partnership's consolidated financial statements.
However, in the event of an unfavorable ruling by a jury or judge in a
court of competent jurisdiction with respect to the ultimate
disposition of this case, such a ruling could have a material adverse
effect on the Partnership's results of operations in a particular
future period.
(12) SUBSEQUENT EVENT
----------------
On March 1, 1999, the General Partner announced that it entered into
an Agreement and Plan of Merger, dated as of February 28, 1999 (the
"Merger Agreement"), with Weeks Corporation ("Weeks"), pursuant to
which Weeks and its consolidated subsidiary, Weeks Realty L.P. ("Weeks
Operating Partnership"), will merge with and into the General Partner
and the Partnership. Weeks is a self-administered, self-managed,
geographically focused REIT that was organized in 1994. As of
December 31, 1998, its in-service property portfolio consisted of 300
industrial properties, 34 suburban office properties and five retail
properties comprising 28.1 million square feet. As of December 31,
1998, the Weeks' primary markets and the concentration of its
portfolio (based on square footage of in-service properties) were
Atlanta, Georgia; Nashville, Tennessee; Miami, Florida; Raleigh-Durham-
Chapel Hill (the "Research Triangle"), North Carolina; Dallas/Ft.
Worth, Texas; Orlando, Florida; and Spartanburg, South Carolina. In
addition, 31 industrial, suburban office and retail properties were
under development, in lease-up or under agreement to acquire at
December 31, 1998, comprising an additional 3.4 million square feet.
At December 31, 1998, the Weeks Operating Partnership had
approximately 7.3 million Common Units outstanding, and approximately
$654 million aggregate principal amount of outstanding
- 58 -
<PAGE>
DUKE REALTY LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
indebtedness. In the merger, each outstanding Common Unit of Weeks
Operating Partnership will be converted into the right to receive
1.38 Common Units of the Partnership; each outstanding unit of 8.0%
Series A Cumulative Redeemable Preferred Equity of Weeks Operating
Partnership will be converted into the right to receive one preferred
unit of the Partnership representing 1/1000 of a unit of 8.0% Series
F Cumulative Redeemable Preferred Equity of the Partnership; and each
outstanding unit of 8.625% Series D Cumulative Redeemable Preferred
Equity of Weeks Operating Partnership will be converted into the
right to receive one depositary unit of the Partnership representing
1/1000 of a unit of 8.625% Series H Cumulative Redeemable Preferred
Equity of the Partnership. The terms of the Partnership's depositary
units to be issued in the merger will be identical to the terms of
the Weeks Operating Partnership Series A and Series D preferred
equity. The merger of the Weeks Operating Partnership into the
Partnership is expected to qualify as a tax-free reorganization and
will be accounted for under the purchase method of accounting. The
transactions are expected to close in the second or third quarter of
1999, subject to receipt of necessary approvals by the shareholders
of both the General Partner and Weeks Corporation and satisfaction of
customary closing conditions.
If the merger between the Partnership and the Weeks Operating
Partnership is consummated as expected, the combined company will
have significant operations and assets located is southeastern
markets where the Partnership and its management have not
traditionally operated or owned assets. Since substantially all of
the member of the Weeks Operating Partnership management are expected
to remain with the combined company for the foreseeable future after
the merger, the Partnership expects to have the necessary expertise
to operate successfully in the new markets. The combined company's
operating performance will, however, be exposed to the general
economic conditions of its new markets and could be adversely
affected if conditions, such as an oversupply of space or a reduction
in demand for the types of properties supplied by the combined
company, become unfavorable.
- 59 -
<PAGE>
<TABLE>
<CAPTION>
BUILDING
LOCATION/DEVELOPMENT BUILDING TYPE ENCUMBRANCES
- -------------------- -------- ----------- ------------
INDIANAPOLIS, INDIANA
- ---------------------
<S> <C> <C> <C>
CASTLETON CORNER CUB CTR. RETAIL -
CASTLETON CORNER MICHAEL'S PLAZA RETAIL -
COMMUNITY MOB COMMUNITY MOB OFF. -
PALOMAR BLDG. PALOMAR BUS.CTR. INDUST. -
FRANKLIN RD.BUS.CTR. FRANKLIN RD. BUS.CTR. INDUST. -
GEORGETOWN CTR. BLDG 1 INDUST. -
GEORGETOWN CTR. BLDG 2 INDUST. -
GEORGETOWN CTR. BLDG 3 INDUST. -
NAMPAC BLDG. NAMPAC BLDG. INDUST. -
6060 GUION RD. 6060 GUION RD. INDUST. -
GREENWOOD CORNER GREENWOOD CORNER SHOPPES RETAIL -
GREENWOOD CORNER FIRST INDIANA BRANCH RETAIL 249
HAMILTON CRSG. BLDG. 1 OFF. -
HAMILTON CRSG. BLDG 2 OFF. -
HILLSDALE TECHCTR. HILLSDALE BLDG 4 INDUST. -
HILLSDALE TECHCTR. HILLSDALE BLDG 5 INDUST. -
HILLSDALE TECHCTR. HILLSDALE BLDG 6 INDUST. -
8465 KEYSTONE 8465 KEYSTONE OFF. -
F.C. TUCKER F.C. TUCKER BLDG. OFF. -
8555 KEYSTONE 8555 KEYSTONE OFF. -
3520 COMMERCE CRSG. 3520 COMMERCE CRSG. OFF. -
4750 KENTUCKY AVE. 4750 KENTUCKY AVE. INDUST. -
NORTH AIRPORT PK. BLDG 2 INDUST. -
ONE N.CAPITOL ONE NORTH CAPITOL OFF. -
PK. 100 BUS.PK. PK. 100 BLDG 34 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 79 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 80 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 83 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 84 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 95 INDUST. 7,836
PK. 100 BUS.PK. PK. 100 BLDG 96 INDUST. 17,208
PK. 100 BUS.PK. PK. 100 BLDG 97 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 98 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 100 INDUST. 4,754
PK. 100 BUS.PK. PK. 100 BLDG 107 INDUST. 1,560
PK. 100 BUS.PK. PK. 100 BLDG 109 INDUST. 1,861
PK. 100 BUS.PK. PK. 100 BLDG 116 OFF. -
PK. 100 BUS.PK. PK. 100 BLDG 118 OFF. -
PK. 100 BUS.PK. PK. 100 BLDG 119 OFF. -
PK. 100 BUS.PK. PK. 100 BLDG 121 RETAIL -
PK. 100 BUS.PK. PK. 100 BLDG 122 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 125 INDUST. 4,550
PK. 100 BUS.PK. PK. 100 BLDG 126 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 127 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 128 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 129 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 130 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 131 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 132 OFF. -
PK. 100 BUS.PK. PK. 100 BLDG 133 INDUST. -
PK. 100 BUS.PK. PK. 100 BLDG 134 INDUST. -
PK. 100 BUS.PK. WOODLAND CORP. CTR. ONE OFF. -
PK. FLETCHER BLDG 14 INDUST. -
PARKWOOD CRSG. ONE PARKWOOD OFF. -
PARKWOOD CRSG. TWO PARKWOOD OFF. -
PARKWOOD CRSG. THREE PARKWOOD OFF. -
PARKWOOD CRSG. FOUR PK.WOOD OFF. -
SOFTWARE ARTISTRY, INC. SOFTWARE ARTISTRY, INC. OFF. -
SOUTH PK. BUS.CTR. BLDG 1 OFF. 1,329
SOUTH PK. BUS.CTR. BLDG 2 INDUST. 2,905
SOUTH PK. BUS.CTR. BLDG 3 OFF. 990
SHADELAND STA. 7351 SHADELAND 2-STORY OFF. -
SHADELAND STA. 7420-86 SHADELAND INDUST.(2) -
SHADELAND STA. 7240 SHADELAND 3-STORY OFF. 2,506
SHADELAND STA. 7330 SHADELAND STA. OFF. 1,724
SHADELAND STA. 7369 SHADELAND STA. OFF. 1,966
- 60 -
<PAGE>
SHADELAND STA. 7340 SHADELAND 2-STORY OFF. 1,108
SHADELAND STA. 7400 SHADELAND STA. OFF. 1,658
ST.FRANCIS MEDICAL ST. FRANCIS MEDICAL OFF. -
WOODFIELD CRSG. II 8440 WOODFIELD OFF. -
WOODFIELD CRSG. III 8425 WOODFIELD OFF. -
4316 W.MINNESOTA 4316 WEST MINNESOTA INDUST. -
NORCO WINDOWS LAND LSE NORCO WINDOWS LAND LEASE LAND LEASE -
UPS LAND LSE UPS LAND LEASE LAND LEASE -
NORGATE LAND LSE NORGATE LAND LEASE LAND LEASE -
ZOLLMAN LAND LSE ZOLLMAN LAND LEASE LAND LEASE -
BRYLANE LAND LSE BRYLANE LAND LEASE LAND LEASE -
SOUTH PK. GROUNDS SOUTH PK. GROUNDS LAND -
FORT WAYNE, INDIANA
- -------------------
COLDWATER CRSG. COLDWATER CRSG. RETAIL 5,746
LEBANON, INDIANA
- ----------------
LEBANON BUS.PK. AMERICAN AIR FILTER INDUST. -
LEBANON BUS.PK. PURITY WHOLESALE INDUST. -
LEBANON BUS.PK. PAMIDA INDUST. -
LEBANON BUS.PK. PRENTICE HALL INDUST. -
LEBANON BUS.PK. GENERAL CABLE INDUST. -
NASHVILLE, TENNESSEE
- --------------------
LAKEVIEW PLACE ONE LAKEVIEW PL. OFF. -
LAKEVIEW PL. TWO LAKEVIEW PL. OFF. -
GREENBRIAR BUS.PK. KEEBLER INDUST. -
GREENBRIAR BUS.PK. GREENBRIAR BUS.PK. INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 2 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 3 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 4 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 5 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 6 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 7 INDUST. -
HAYWOOD OAKS TECHCTR. BLDG 8 INDUST. -
CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. OFF. -
HEBRON, KENTUCKY
- ----------------
SOUTHPK. BUS.CTR. CR SERVICES INDUST. 5,916
SKYPORT BUS.PK. BLDG 1 INDUST. -
KENTUCKY SOUTHPK. BLDG 1 INDUST. -
KENTUCKY SOUTHPK. BLDG 3 INDUST. -
SOUTHPK. BUS.CTR. REDKEN LABORATORIES INDUST. 3,881
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMM.CTR. EMPIRE COMM.CTR. INDUST. -
SOFA EXPRESS - FLORENCE SOFA EXPRESS - FLORENCE RETAIL -
CINCINNATI, OHIO
- ----------------
ONE ASHVIEW PL. ONE ASHVIEW PL. OFF. -
BLUE ASH OFF.CTR VI BLUE ASH OFF. CTR VI OFF. -
CORNELL COMM.CTR. CORNELL COMM.CTR. INDUST. -
CREEK RD. BLDG 1 INDUST. -
CREEK RD. BLDG 2 INDUST. -
ZUSSMAN BLDG. 311 ELM OFF. -
312 ELM 312 ELM OFF. 30,410
ENTERPRISE BUS.PK. BLDG 1 INDUST. 2,038
ENTERPRISE BUS.PK. BLDG 2 INDUST. 1,981
ENTERPRISE BUS.PK. BLDG A INDUST. 414
ENTERPRISE BUS.PK. BLDG B INDUST. 692
ENTERPRISE BUS.PK. BLDG D INDUST. 1,195
EASTGATE SQ. EASTGATE SQ. RETAIL -
GARDEN RIDGE (EASTGATE) GARDEN RIDGE (EASTGATE) RETAIL -
TRI-COUNTY EXECUTIVE PLAZA I OFF. -
- 61 -
<PAGE>
TRI-COUNTY EXECUTIVE PLAZA II OFF. -
TRI-COUNTY EXECUTIVE PLAZA III OFF. -
FAIRFIELD BUS.CTR. D FAIRFIELD BUS.CTR. D INDUST. -
FAIRFIELD BUS.CTR. E FAIRFIELD BUS.CTR. E INDUST. -
GOVERNOR'S PLAZA KOHL'S DEPT. STORE RETAIL -
GOVERNOR'S PLAZA SOFA EXPRESS RETAIL -
GOVERNOR'S PLAZA OFFICE MAX, INC. RETAIL -
FIDELITY DR. BLDG. FIDELITY DR. BLDG. OFF. 1,537
PK. 50 TECHCTR. BLDG 17 OFF. -
PK. 50 TECHCTR. BLDG 20 INDUST. 3,884
PK. 50 TECHCTR. BLDG 25 INDUST. -
PK. 50 TECHCTR. BLDG 26 (SDRC) OFF. -
GOVERNOR'S HILL 8790 GOVERNOR'S HILL OFF. -
GOVERNOR'S HILL 8700 GOVERNOR'S HILL OFF. -
GOVERNOR'S HILL 8800 GOVERNOR'S HILL OFF. 1,161
GOVERNOR'S HILL 8600 GOVERNOR'S HILL OFF. -
GOVERNOR'S PLAZA GOVERNOR'S PLAZA RETAIL -
GOVERNOR'S PTE. 4770 BLDG OFF. 3,076
GOVERNOR'S PTE. 4700 BLDG INDUST. 3,091
GOVERNOR'S PTE. 4900 BLDG INDUST. 3,198
GOVERNOR'S PTE. 4705 BLDG OFF. -
GOVERNOR'S PTE. 4800 BLDG INDUST. -
GOVERNOR'S PTE. 4605 BLDG OFF. 4,159
GOVERNOR'S PTE. RETAIL SOUTH (BIGG'S) RETAIL -
GOVERNOR'S PTE. RETAIL NORTH (LOWE'S) RETAIL -
GOVERNOR'S PTE. ANTHEM PRESCRIPT. MGMT. OFF. -
GOVERNOR'S PTE. 4660 BLDG. OFF. -
GOVERNOR'S PTE. 4680 BLDG. OFF. -
FRANCISCAN HEALTH FRANCISCAN HEALTH OFF. -
HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. OFF. -
KING'S MALL SHP.CTR. KING'S AUTO MALL I RETAIL 2,131
KING'S MALL SHP.CTR. KING'S AUTO MALL II RETAIL -
7910 KENTUCKY DR. 7910 KENTUCKY DR. INDUST. -
7920 KENTUCKY DR. 7920 KENTUCKY DR. INDUST. -
KENWOOD KENWOOD EXECUTIVE CTR. OFF. -
KENWOOD COMMONS BLDG I OFF. (2) 3,838
KENWOOD COMMONS BLDG II OFF. (2) 3,862
LAKE FOREST PL. LAKE FOREST PL. OFF. -
MONTGOMERY CROSSING PHASE 1 RETAIL -
GOVERNOR'S PLAZA SPORTS UNLIMITED RETAIL 1,566
MOSTELLER DIST.CTR. MOSTELLER DIST.CTR. INDUST. -
MOSTELLER DIST.CTR. II MOSTELLER DIST.CTR. II INDUST. -
PFEIFFER RD. OHIO NATIONAL OFF. 18,660
PERIMETER PK. BLDG. A INDUST. -
PERIMETER PK. BLDG. B INDUST. -
S & L DATA 312 PLUM OFF. -
REMINGTON PK. BLDG A OFF. -
REMINGTON PK. BLDG B OFF. -
GALYAN'S TRADING CO. GALYAN'S TRADING CO. RETAIL 1,741
TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. RETAIL -
TRI-COUNTY OFF.PK. TRI-COUNTY OFF.PK. OFF. -
TRIANGLE OFF.PK. TRIANGLE OFF.PK. OFF. 4,735
TUTTLE CRSG. TUTTLE RETAIL CTR. RETAIL -
UNIVERSITY MOVING UNIVERSITY MOVING INDUST. -
WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. RETAIL -
WEST LAKE CTR. WEST LAKE CTR. OFF. -
WORLD PK. BLDG 5 INDUST. 2,415
WORLD PK. BLDG 6 INDUST. 3,739
WORLD PK. BLDG 7 INDUST. 3,884
WORLD PK. BLDG 8 INDUST. -
WORLD PK. BLDG 9 INDUST. -
WORLD PK. BLDG 11 INDUST. -
WORLD PK. BLDG 14 INDUST. -
WORLD PK. BLDG 15 INDUST. -
WORLD PK. BLDG 16 INDUST. -
WORLD PK. BLDG 18 INDUST. -
WORLD PK. BLDG 28 INDUST. -
WORLD PK. BLDG 29 INDUST. -
WORLD PK. BLDG 31 INDUST. -
- 62 -
<PAGE>
WORLD PK.AT UNION CTR WORLD PK.UNION CTR I INDUST. -
APPLEBEES LAND LEASE APPLEBEES LAND LEASE LAND LEASE -
LAZARUS LAND LEASE LAZARUS LAND LEASE LAND LEASE -
UNO'S LAND LEASE UNO'S LAND LEASE LAND LEASE -
CLEVELAND, OHIO
- ---------------
CORP. CTR. I CORP. CTR. I OFF. -
CORP. CTR. II CORP. CTR. II OFF. -
CORP. CIRCLE CORP. CIRCLE OFF. -
ONE CORP. EXCHANGE ONE CORP. EXCHANGE OFF. 3,576
CORP. PLAZA I CORP. PLAZA I OFF. 4,613
CORP. PLAZA II CORP. PLAZA II OFF. 4,201
CORP. PL. CORP. PL. OFF. -
PK. 82 BLDG 2 INDUST. -
PK. 82 STRONGSVILLE BLDG B INDUST. -
ENTERPRISE BUS.PK. ENTERPRISE PARKWAY INDUST. -
FOUNTAIN PKWAY BLDG I FOUNTAIN PKWAY BLDG I INDUST. -
FREEDOM SQ. FREEDOM SQ. I OFF. -
FREEDOM SQ. FREEDOM SQ. II OFF. 4,720
FREEDOM SQ. FREEDOM SQ. III OFF. -
JOHNSON CONTROLS JOHNSON CONTROLS INDUST. -
LANDERBROOK CORP. CTR LANDERBROOK CORP. CTR OFF. -
LANDERBROOK CORP. CTR LANDERBROOK CORP. CTR II OFF. -
6111 OAK TREE 6111 OAK TREE OFF. -
PK. CTR. BLDG I OFF. -
ROCK RUN CORP. PK. ROCK RUN - N. OFF. 2,531
ROCK RUN CORP. PK. ROCK RUN - CTR. OFF. 2,472
ROCK RUN CORP. PK. ROCK RUN - S. OFF. 2,548
SOLON INDUST. PK. 30600 CARTER INDUST. -
SOLON INDUST. PK. 6230 COCHRAN INDUST. -
SOLON INDUST. PK. 31900 SOLON-FRONT INDUST. -
SOLON INDUST. PK. 5821 SOLON INDUST. -
SOLON INDUST. PK. 6161 COCHRAN INDUST. -
SOLON INDUST. PK. 5901 HARPER INDUST. -
SOLON INDUST. PK. 29125 SOLON INDUST. -
SOLON INDUST. PK. 6661 COCHRAN INDUST. -
SOLON INDUST. PK. 6521 DAVIS INDUST. -
SOLON INDUST. PK. 31900 SOLON-REAR INDUST. -
DYMENT DYMENT INDUST. -
COLUMBUS, OHIO
- --------------
TWO EASTON OVAL TWO EASTON OVAL OFF. -
PET FOODS DIST. PET FOODS DIST. INDUST. 11,167
TUTTLE CRSG. METROCTR. III OFF. -
6600 PORT RD. 6600 PORT RD. INDUST. -
TUTTLE CRSG. SCIOTO CORP.CTR. OFF. -
SOUTH PTE. BLDG D INDUST. -
SOUTH PTE. BLDG E INDUST. -
TUTTLE CRSG. 4650 LAKEHURST (LITEL) OFF. -
TUTTLE CRSG. 4600 LAKEHURST
(STERLING 1) OFF. -
TUTTLE CRSG. 4700 LAKEHURST
(INDIANA INS.) OFF. -
TUTTLE CRSG. STERLING 2 OFF. -
TUTTLE CRSG. JOHN ALDEN LIFE INS. OFF. -
TUTTLE CRSG. CARDINAL HEALTH OFF. -
TUTTLE CRSG. STERLING 3 OFF. -
TUTTLE CRSG. COMPMANAGEMENT OFF. -
TUTTLE CRSG. STERLING 4 OFF. -
TUTTLE CRSG. 5555 PK. CTR. (XEROX) OFF. -
TUTTLE CRSG. PK.WOOD PL. OFF. -
TUTTLE CRSG. NATIONWIDE OFF. -
TUTTLE CRSG. EMERALD II OFF. -
TUTTLE CRSG. ATRIUM II PHASE I OFF. -
VETERANS ADMIN. CLINIC VA HOSPITAL OFF. 2,752
WESTBELT 2190-2200 WESTBELT DR. INDUST. -
3800 ZANE TRACE DR. 3800 ZANE TRACE DR.(MBM) INDUST. -
3635 ZANE TRACE DR. 3635 ZANE TRACE DR. INDUST. -
BMW PARKING EXP. BMW PARKING EXP. LAND -
- 63 -
<PAGE>
QWEST PARKING EXP. QWEST PARKING EXP. LAND -
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA RETAIL -
CHICAGO, ILLINOIS
- -----------------
ABBOTT DR. BLDG. ABBOTT DR. BLDG. INDUST. -
JANICE AVE. BLDG. JANICE AVE. BLDG. INDUST. -
WOLF RD. BLDG. WOLF RD. BLDG. INDUST. -
TOUHY AVE. BLDG. TOUHY AVE. BLDG. INDUST. -
JARVIS AVE. BLDG. JARVIS AVE. BLDG. INDUST. -
BALLARD DR. BLDG. BALLARD DR. BLDG. INDUST. -
LAUREL DR. BLDG. LAUREL DR. BLDG. INDUST. -
KIRK RD. BLDG KIRK RD. BLDG INDUST. -
ATRIUM II ATRIUM II OFF. -
CROSSROAD.S BLDG 1 INDUST. -
EXECUTIVE TOWERS I EXECUTIVE TOWERS I OFF. -
EXECUTIVE TOWERS II EXECUTIVE TOWERS II OFF. -
EXECUTIVE TOWERS III EXECUTIVE TOWERS III OFF. -
ONE CONWAY PK. ONE CONWAY PK. OFF. -
YORKTOWN OFF.CTR. YORKTOWN OFF.CTR. OFF. -
DECATUR, ILLINOIS
- -----------------
PK. 101 BUS.CTR. BLDG 3 INDUST. -
PK. 101 BUS.CTR. BLDG 8 INDUST. -
ILLINOIS POWER LND.LSE. ILLINOIS POWER LND.LSE. LAND LEASE -
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA RETAIL -
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW SHOP CTR. RETAIL -
WESTMONT, ILLINOIS
- ------------------
OAKMONT CIRCLE OAKMONT TECH CTR. INDUST. -
OAKMONT CIRCLE OAKMONT CIRCLE OFF. OFF. -
ST. LOUIS, MISSOURI
- -------------------
1920 BELTWAY 1920 BELTWAY INDUST. -
CRAIG PARK. CTR. CRAIG PARK. CTR. INDUST. -
DUKEPORT 3 DUKEPORT 3 INDUST. -
DUKEPORT 5 DUKEPORT 5 INDUST. -
ALFA-LAVAL ALFA-LAVAL INDUST. -
EARTH CITY 3322 NGIC OFF. 5,837
EARTH CITY 3300 PTE. 70 OFF. 5,397
MCI MCI OFF. -
HORIZON BUS.CTR. HORIZON BUS.CTR. INDUST. 1,357
I-170 CTR. I-170 CTR. INDUST. -
LAUMEIER OFF.PK. BLDG I OFF. -
LAUMEIER OFF.PK. BLDG II OFF. -
LAUMEIER OFF.PK. BLDG IV OFF. -
MARYVILLE CTR. 500 MARYVILLE CTR. OFF. 15,159
MARYVILLE CTR. 530 MARYVILLE CTR. OFF. 8,287
MARYVILLE CTR. 550 MARYVILLE CTR. OFF. 10,500
MARYVILLE CTR. 635 MARYVILLE CTR. OFF. 12,616
MARYVILLE CTR. 655 MARYVILLE CTR. OFF. 9,277
MARYVILLE CTR. 540 MARYVILLE CTR. OFF. 20,000
RIVERPORT TOWER RIVERPORT TOWER OFF. -
- 64 -
<PAGE>
RIVERPORT DIST. A RIVERPORT DIST. A INDUST. -
EXPRESS SCRIPTS SERV.CTR EXPRESS SCRIPTS SERV.CTR.INDUST. -
RIVERPORT DIST. B RIVERPORT DIST. B INDUST. -
SCRIPTS SCRIPTS OFF. -
ST. LOUIS BUS.CTR. BLDG A INDUST. -
ST. LOUIS BUS.CTR. BLDG B INDUST. -
ST. LOUIS BUS.CTR. BLDG C INDUST. -
ST. LOUIS BUS.CTR. BLDG D INDUST. -
SOUTHPORT I SOUTHPORT I INDUST. -
SOUTHPORT II SOUTHPORT II INDUST. -
SOUTHPORT COMM.CTR. SOUTHPORT COMM.CTR. INDUST. -
TWIN OAKS TWIN OAKS OFF. -
WARSON COMM.CTR. WARSON COMM.CTR. INDUST. -
WESTMARK WESTMARK OFF. -
WESTPORT WESTPORT CTR. I INDUST. -
WESTPORT WESTPORT CTR. II INDUST. -
WESTVIEW PL. WESTVIEW PL. OFF. -
BLOOMINGTON, MINNESOTA
- ----------------------
HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. INDUST. -
BROOKLYN PK., MINNESOTA
- ------------------------
7300 NORTHLAND DR. 7300 NORTHLAND DR. INDUST. -
EAGAN, MINNESOTA
- ----------------
EAGANDALE TECH CTR. EAGANDALE TECH CTR. INDUST. -
SILVER BELL COMMONS SILVER BELL COMMONS INDUST. -
PLYMOUTH, MINNESOTA
- -------------------
PLYMOUTH OFF./TECH CTR PLYMOUTH OFF./TECH CTR INDUST. -
ST. PAUL, MINNESOTA
- -------------------
UNIVERSITY CRSG. UNIVERSITY CRSG. INDUST. -
MINNEAPOLIS, MINNESOTA
- -------------------------
APOLLO DISTRIBUTION CTR. APOLLO DISTRIBUTION CTR. INDUST. -
BASS LAKE BUS.CTR. BASS LAKE BUS.CTR. INDUST. 1,076
BRD.WAY BUS.CTR III BRD.WAY BUS.CTR III INDUST. -
BRD.WAY BUS.CTR IV BRD.WAY BUS.CTR IV INDUST. -
BRD.WAY BUS.CTR V BRD.WAY BUS.CTR V INDUST. -
BRD.WAY BUS.CTR VI BRD.WAY BUS.CTR VI INDUST. -
BRD.WAY BUS.CTR VII BRD.WAY BUS.CTR VII INDUST. -
BLOOMINGTON INDUST. CTR BLOOMINGTON INDUST. CTR INDUST. 1,969
CAHILL BUS.CTR. CAHILL BUS.CTR. INDUST. -
CEDAR LAKE BUS.CTR. CEDAR LAKE BUS.CTR. INDUST. -
CHANHASSEN I CHANHASSEN I INDUST. -
CHANHASSEN II CHANHASSEN II INDUST. -
CORNERSTONE BUS.CTR CORNERSTONE BUS.CTR INDUST. 6,700
CRYSTAL INDUST.CTR. CRYSTAL INDUST.CTR. INDUST. -
5219 BLDG. 5219 BLDG. OFF. -
DECATUR BUS.CTR. DECATUR BUS.CTR. INDUST. -
EAGANDALE CRSG. EAGANDALE CRSG. INDUST. -
EDINA INTERCHANGE I EDINA INTERCHANGE I INDUST. 1,930
EDINA INTERCHANGE II EDINA INTERCHANGE II INDUST. 1,438
EDINA INTERCHANGE III EDINA INTERCHANGE III INDUST. 1,641
EDINA INTERCHANGE IV EDINA INTERCHANGE IV INDUST. -
EDINA INTERCHANGE V EDINA INTERCHANGE V INDUST. -
EDINA INTERCHANGE VI EDINA INTERCHANGE VI INDUST. -
EDINA INTERCHANGE VII EDINA INTERCHANGE VII INDUST. -
ENTERPRISE INDUST.CTR. ENTERPRISE INDUST.CTR. INDUST. 2,676
ENCORE PK. ENCORE PK. INDUST. -
EDINA REALTY EDINA REALTY OFF. -
GOLDEN HILLS I GOLDEN HILLS I INDUST. -
GOLDEN TRIANGLE TECH CTR GOLDEN TRIANGLE TECH CTR INDUST. -
PROFESSIONAL PLAZA PROFESSIONAL PLAZA OFF. -
PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV INDUST. -
- 65 -
<PAGE>
CLIFF RD. INDUST.CTR. CLIFF RD. INDUST.CTR. INDUST. -
PROFESSIONAL PLAZA III PROFESSIONAL PLAZA III INDUST. -
PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II INDUST. -
LYNDALE COMMONS 1 LYNDALE COMMONS 1 INDUST. -
LYNDALE COMMONS 2 LYNDALE COMMONS 2 INDUST. -
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. INDUST. 3,099
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. INDUST. 3,057
LARC INDUST. PK. I LARC INDUST. PK. I INDUST. -
LARC INDUST. PK. II LARC INDUST. PK. II INDUST. -
LARC INDUST. PK. III LARC INDUST. PK. III INDUST. -
LARC INDUST. PK. IV LARC INDUST. PK. IV INDUST. -
LARC INDUST. PK. V LARC INDUST. PK. V INDUST. -
LARC INDUST. PK. VI LARC INDUST. PK. VI INDUST. -
LARC INDUST. PK. VII LARC INDUST. PK. VII INDUST. -
MEDICINE LAKE MEDICINE LAKE
INDUST. CTR. INDUST. CTR. INDUST. 4,567
MEDICINE LAKE PROF BLDG. MEDICINE LAKE PROF BLDG. OFF. -
NORMAN CTR. I NORMAN CTR. I OFF. -
NORMAN CTR. II NORMAN CTR. II OFF. -
NORMAN CTR. III NORMAN CTR. III OFF. -
NORMAN CTR. IV NORMAN CTR. IV OFF. -
NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE INDUST. -
NORTH PLAZA NORTH PLAZA OFF. -
NORTH STAR TITLE NORTH STAR TITLE OFF. -
OXFORD INDUST. OXFORD INDUST. INDUST. -
PAKWA BUS.PK. I PAKWA BUS.PK. I INDUST. -
PAKWA BUS.PK. II PAKWA BUS.PK. II INDUST. -
PAKWA BUS.PK. III PAKWA BUS.PK. III INDUST. -
PENN CORP. BLDG. PENN CORP. BLDG. INDUST. -
10801 RED CIRCLE DR. 10801 RED CIRCLE DR. OFF. -
SANDBURG INDUST.CTR. SANDBURG INDUST.CTR. INDUST. -
SIBLEY INDUST.CTR. I SIBLEY INDUST.CTR. I INDUST. -
SIBLEY INDUST.CTR. II SIBLEY INDUST.CTR. II INDUST. -
SIBLEY INDUST.CTR. III SIBLEY INDUST.CTR. III INDUST. -
SOUTH PLAZA SOUTH PLAZA OFF. -
JOHNSON BLDG. JOHNSON BLDG. INDUST. -
TRAPP RD. I TRAPP RD. I INDUST. -
TRAPP RD. BLDG II TRAPP RD. BLDG II INDUST. -
TYROL WEST TYROL WEST OFF. -
WESTSIDE BUS.PK. WESTSIDE BUS.PK. INDUST. -
YANKEE PL. YANKEE PL. INDUST. -
801 ZANE AVE NORTH 801 ZANE AVE NORTH INDUST. -
CHILIES GROUND LEASE CHILIES GROUND LEASE LAND LEASE -
KNOX LAND LEASE KNOX LAND LEASE LAND LEASE -
OLIVE GARDEN GRND LEASE OLIVE GARDEN GRND LEASE LAND LEASE -
UNIVERSITY LAND LEASE UNIVERSITY LAND LEASE LAND LEASE -
ELIMINATIONS ELIMINATIONS N/A -
-------
TOTALS 326,317
=======
- 66 -
<PAGE>
INITIAL COST TO COMPANY COSTS (1)
----------------------- CAPITALIZED
BUILDINGS/ SUBSEQUENT TO
LOCATION/DEVELOPMENT BUILDING LAND IMPROVEMENTS ACQUISITION
- -------------------- -------- ------- ------------ -------------
INDIANAPOLIS, INDIANA
- ---------------------
<S> <C> <C> <C> <C>
CASTLETON CORNER CUB CTR. 540 4,850 315
CASTLETON CORNER MICHAEL'S PLAZA 749 3,400 406
COMMUNITY MOB COMMUNITY MOB 350 1,925 930
PALOMAR BLDG. PALOMAR BUS. CTR. 158 1,148 401
FRANKLIN ROAD FRANKLIN ROAD
BUS. CTR. BUS.CTR. 594 3,986 7,146
GEORGETOWN CENTRE BLDG 1 362 2,437 46
GEORGETOWN CENTRE BLDG 2 374 2,588 59
GEORGETOWN CENTRE BLDG 3 421 1,960 72
NAMPAC BLDG. NAMPAC BLDG. 274 1,622 149
6060 GUION RD. 6060 GUION RD. 511 2,656 721
GREENWOOD CORNER GREENWOOD CORNER
SHOPPES 390 3,435 208
GREENWOOD CORNER FIRST INDIANA BRANCH 46 254 13
HAMILTON CROSSING BLDG. 1 526 2,424 520
HAMILTON CROSSING BLDG 2 313 1,315 683
HILLSDALE TECHNECTR. HILLSDALE BLDG 4 366 4,711 522
HILLSDALE TECHNECTR. HILLSDALE BLDG 5 251 3,235 308
HILLSDALE TECHNECTR. HILLSDALE BLDG 6 315 4,054 250
8465 KEYSTONE 8465 KEYSTONE 89 1,302 61
F.C. TUCKER F.C. TUCKER BLDG. - 264 18
8555 KEYSTONE 8555 KEYSTONE - 5,857 245
3520 COMMERCE CROSSING 3520 COMMERCE CRSG. - 579 382
4750 KENTUCKY AVENUE 4750 KENTUCKY AVE. 246 2,260 272
NORTH AIRPORT PARK BLDG 2 550 5,470 2,196
ONE NORTH CAPITOL ONE NORTH CAPITOL 1,439 8,156 -
PARK 100 BUS. PARK PARK 100 BLDG 34 131 1,455 268
PARK 100 BUS. PARK PARK 100 BLDG 79 184 1,764 440
PARK 100 BUS. PARK PARK 100 BLDG 80 251 2,412 259
PARK 100 BUS. PARK PARK 100 BLDG 83 247 2,572 294
PARK 100 BUS. PARK PARK 100 BLDG 84 347 2,604 264
PARK 100 BUS. PARK PARK 100 BLDG 95 642 4,756 344
PARK 100 BUS. PARK PARK 100 BLDG 96 1,414 8,734 4,668
PARK 100 BUS. PARK PARK 100 BLDG 97 676 4,294 1,372
PARK 100 BUS. PARK PARK 100 BLDG 98 473 6,022 2,002
PARK 100 BUS. PARK PARK 100 BLDG 100 103 2,179 748
PARK 100 BUS. PARK PARK 100 BLDG 107 99 1,575 107
PARK 100 BUS. PARK PARK 100 BLDG 109 240 1,807 -
PARK 100 BUS. PARK PARK 100 BLDG 116 341 3,144 210
PARK 100 BUS. PARK PARK 100 BLDG 118 226 2,229 242
PARK 100 BUS. PARK PARK 100 BLDG 119 388 3,386 378
PARK 100 BUS. PARK PARK 100 BLDG 121 592 960 149
PARK 100 BUS. PARK PARK 100 BLDG 122 284 3,359 456
PARK 100 BUS. PARK PARK 100 BLDG 125 674 5,712 149
PARK 100 BUS. PARK PARK 100 BLDG 126 165 1,362 215
PARK 100 BUS. PARK PARK 100 BLDG 127 96 1,726 427
PARK 100 BUS. PARK PARK 100 BLDG 128 904 8,429 267
PARK 100 BUS. PARK PARK 100 BLDG 129 865 5,468 665
PARK 100 BUS. PARK PARK 100 BLDG 130 514 4,027 54
PARK 100 BUS. PARK PARK 100 BLDG 131 1,006 7,015 892
PARK 100 BUS. PARK PARK 100 BLDG 132 446 1,165 438
PARK 100 BUS. PARK PARK 100 BLDG 133 69 889 -
PARK 100 BUS. PARK PARK 100 BLDG 134 465 3,043 861
PARK 100 BUS. PARK WOODLAND CORP.CTR.1 290 3,355 1,542
PARK FLETCHER BLDG 14 76 722 99
PARKWOOD CROSSING ONE PARKWOOD 1,018 9,578 596
PARKWOOD CROSSING TWO PARKWOOD 861 7,499 -
PARKWOOD CROSSING THREE PARKWOOD 1,377 8,089 954
PARKWOOD CROSSING FOUR PARKWOOD 1,489 11,288 -
SOFTWARE ARTISTRY, SOFTWARE ARTISTRY,
INC. INC. 856 7,381 -
SOUTH PARK BUS. CTR. BLDG 1 287 2,328 457
SOUTH PARK BUS. CTR. BLDG 2 334 3,081 969
SOUTH PARK BUS. CTR. BLDG 3 208 2,150 636
SHADELAND STATION 7351 SHADELAND
2-STORY 101 1,359 233
SHADELAND STATION 7420-86 SHADELAND 260 2,595 648
SHADELAND STATION 7240 SHADELAND
3-STORY 152 3,113 869
SHADELAND STATION 7330 SHADELAND
STATION 255 4,045 65
SHADELAND STATION 7369 SHADELAND
STATION 100 1,129 155
- 60 -
<PAGE>
SHADELAND STATION 7340 SHADELAND
2-STORY 165 2,458 264
SHADELAND STATION 7400 SHADELAND
STATION 570 2,959 509
ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL - 5,839 640
WOODFIELD AT THE
CROSSING II 8440 WOODFIELD 719 9,106 1,275
WOODFIELD AT THE
CROSSING III 8425 WOODFIELD 3,767 19,817 3,194
4316 WEST MINNESOTA 4316 W. MINNESOTA 287 2,178 330
NORCO WINDOWS NORCO WINDOWS
LAND LEASE LAND LEASE 37 - -
UPS LAND LEASE UPS LAND LEASE - - 270
NORGATE LAND LEASE NORGATE LAND LEASE 51 - -
ZOLLMAN LAND LEASE ZOLLMAN LAND LEASE 115 - -
BRYLANE LAND LEASE BRYLANE LAND LEASE 54 - 3
SOUTH PARK GROUNDS SOUTH PARK GROUNDS 21 - -
FORT WAYNE, INDIANA
- --------------------
COLDWATER CROSSING COLDWATER CROSSING 2,310 15,827 1,428
LEBANON, INDIANA
- ----------------
LEBANON BUS. PARK AMERICAN AIR FILTER 177 3,053 81
LEBANON BUS. PARK PURITY WHOLESALE 610 7,848 418
LEBANON BUS. PARK PAMIDA 177 3,625 624
LEBANON BUS. PARK PRENTICE HALL 510 11,659 718
LEBANON BUS. PARK GENERAL CABLE 443 6,732 472
NASHVILLE, TENNESSEE
- ---------------------
LAKEVIEW PLACE ONE LAKEVIEW PLACE 2,046 11,591 73
LAKEVIEW PLACE TWO LAKEVIEW PLACE 2,046 11,591 121
GREENBRIAR BUS. PARK KEEBLER 307 1,183 79
GREENBRIAR BUS. PARK GREENBRIAR BUS.PK. 1,445 4,490 842
HAYWOOD OAKS TECHNECTR.BLDG 2 395 1,767 167
HAYWOOD OAKS TECHNECTR.BLDG 3 346 1,575 317
HAYWOOD OAKS TECHNECTR.BLDG 4 435 1,948 218
HAYWOOD OAKS TECHNECTR.BLDG 5 629 2,816 556
HAYWOOD OAKS TECHNECTR.BLDG 6 924 5,730 716
HAYWOOD OAKS TECHNECTR.BLDG 7 456 1,642 743
HAYWOOD OAKS TECHNECTR.BLDG 8 617 2,225 1,850
CREEKSIDE CROSSING 1 1 CREEKSIDE CRSG. 1,900 6,767 1,321
HEBRON, KENTUCKY
- ----------------
SOUTHPARK BUS. CTR. CR SERVICES 1,085 4,060 1,121
SKYPORT BUS. PARK BLDG 1 611 5,661 1,192
KENTUCKY SOUTHPARK BLDG 1 682 3,725 519
KENTUCKY SOUTHPARK BLDG 3 841 3,382 752
SOUTHPARK BUS. CTR. REDKEN LABS 779 3,095 189
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMMERCE CTR. EMPIRE COMMERCE CTR. 581 2,784 356
SOFA EXPRESS - SOFA EXPRESS -
FLORENCE FLORENCE 145 718 922
CINCINNATI, OHIO
- ----------------
ONE ASHVIEW PLACE ONE ASHVIEW PLACE 1,204 12,328 209
BLUE ASH OFF.CTR.VI BLUE ASH OFF.CTR.VI 518 2,775 118
CORNELL COMM. CTR. CORNELL COMM. CTR. 495 4,501 391
CREEK ROAD BLDG 1 103 792 53
CREEK ROAD BLDG 2 132 1,093 68
ZUSSMAN BLDG 311 ELM 339 6,226 691
312 ELM 312 ELM 4,750 43,823 7,748
ENTERPRISE BUS. PARK BLDG 1 1,030 5,482 830
ENTERPRISE BUS. PARK BLDG 2 733 3,443 1,268
ENTERPRISE BUS. PARK BLDG A 119 685 55
ENTERPRISE BUS. PARK BLDG B 119 1,117 111
ENTERPRISE BUS. PARK BLDG D 243 1,802 646
EASTGATE SQUARE EASTGATE SQUARE 2,030 4,079 1,122
GARDEN RIDGE GARDEN RIDGE
(EASTGATE) (EASTGATE) 626 - 199
TRI-COUNTY EXECUTIVE PLAZA I 729 5,249 58
- 61 -
<PAGE>
TRI-COUNTY EXECUTIVE PLAZA II 729 5,332 23
TRI-COUNTY EXECUTIVE PLAZA III 509 4,010 744
FAIRFIELD BUS. CTR. D FAIRFIELD BUS.CTR.D 135 1,639 17
FAIRFIELD BUS. CTR. E FAIRFIELD BUS.CTR.E 398 2,461 151
GOVERNOR'S PLAZA KOHL'S DEPT.STORE 1,345 3,575 273
GOVERNOR'S PLAZA SOFA EXPRESS 145 771 40
GOVERNOR'S PLAZA OFFICE MAX, INC. 651 1,223 104
FIDELITY DR. BLDG. FIDELITY DR. BLDG. 270 2,510 580
PARK 50 TECHNECTR. BLDG 17 500 5,961 -
PARK 50 TECHNECTR. BLDG 20 461 7,237 -
PARK 50 TECHNECTR. BLDG 25 1,161 3,758 1,077
PARK 50 TECHNECTR. BLDG 26 (SDRC) 911 19,004 1,469
GOVERNOR'S HILL 8790 GOVERNOR'S
HILL 400 4,581 542
GOVERNOR'S HILL 8700 GOVERNOR'S
HILL 459 5,705 255
GOVERNOR'S HILL 8800 GOVERNOR'S
HILL 225 2,305 503
GOVERNOR'S HILL 8600 GOVERNOR'S
HILL 1,220 17,689 2,049
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,012 8,452 775
GOVERNOR'S POINTE 4770 BLDG 586 7,609 524
GOVERNOR'S POINTE 4700 BLDG 584 5,465 547
GOVERNOR'S POINTE 4900 BLDG 654 4,017 869
GOVERNOR'S POINTE 4705 BLDG 719 6,910 2,246
GOVERNOR'S POINTE 4800 BLDG 978 4,742 998
GOVERNOR'S POINTE 4605 BLDG 630 16,236 2,208
GOVERNOR'S POINTE RETAIL S.(BIGG'S) 2,107 4,545 5,128
GOVERNOR'S POINTE RETAIL N.(LOWE'S) 1,241 4,214 2,680
GOVERNOR'S POINTE ANTHEM
PRESCRIPT.MGMT. 594 4,100 2,140
GOVERNOR'S POINTE 4660 BLDG 385 3,662 1,572
GOVERNOR'S POINTE 4680 BLDG 1,115 6,413 1,850
FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 84
HUNTINGTON BANK BLDG. HUNTINGTON BANK
BLDG. 175 220 11
KING'S MALL SHP.CTR. KING'S AUTO
MALL I 1,085 3,859 1,016
KING'S MALL SHP.CTR. KING'S AUTO
MALL II 1,928 3,636 1,349
7910 KENTUCKY DR. 7910 KENTUCKY DR. 285 673 81
7920 KENTUCKY DR. 7920 KENTUCKY DR. 698 1,235 27
KENWOOD KENWOOD EXEC.CTR. 606 3,886 92
KENWOOD COMMONS BLDG I - 3,199 1,060
KENWOOD COMMONS BLDG II - 2,867 1,323
LAKE FOREST PLACE LAKE FOREST PLACE 1,953 19,164 1,575
MONTGOMERY CROSSING PHASE I 260 852 143
GOVERNOR'S PLAZA SPORTS UNLIMITED 778 3,687 217
MOSTELLER DIST.CTR. MOSTELLER DIST.
CTR. 1,220 4,209 2,673
MOSTELLER DIST.CTR.II MOSTELLER DIST.
CTR.II 408 4,550 1,677
PFEIFFER ROAD OHIO NATIONAL 2,463 24,408 662
PERIMETER PARK BLDG. A 229 1,274 74
PERIMETER PARK BLDG. B 244 1,001 72
S & L DATA 312 PLUM 2,539 24,312 2,856
REMINGTON PARK BLDG A 560 1,442 32
REMINGTON PARK BLDG B 560 1,442 33
GALYAN'S TRADING GALYAN'S TRADING
COMPANY COMPANY 1,925 3,359 143
TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 5,368 4,065 76
TRI-COUNTY OFF.PK. TRI-COUNTY OFF.PK. 217 5,211 873
TRIANGLE OFF.PK. TRIANGLE OFF.PK. 1,000 10,440 2,233
TUTTLE CROSSING TUTTLE RETAIL CTR. 2,625 6,598 598
UNIVERSITY MOVING UNIVERSITY MOVING 248 1,612 105
WESTERN HILLS MKTPL. WESTERN HILLS
MKTPL. 3,583 7,511 67
WEST LAKE CTR. WEST LAKE CTR. 2,459 15,972 1,569
WORLD PARK WORLD PARK BLDG 5 270 3,260 689
WORLD PARK WORLD PARK BLDG 6 378 3,821 -
WORLD PARK WORLD PARK BLDG 7 525 4,150 386
WORLD PARK WORLD PARK BLDG 8 561 5,309 518
WORLD PARK WORLD PARK BLDG 9 317 2,993 366
WORLD PARK WORLD PARK BLDG 11 460 4,701 405
WORLD PARK WORLD PARK BLDG 14 380 3,592 291
WORLD PARK WORLD PARK BLDG 15 373 2,274 364
WORLD PARK WORLD PARK BLDG 16 321 3,033 236
WORLD PARK WORLD PARK BLDG 18 834 5,425 -
WORLD PARK WORLD PARK BLDG 28 738 1,549 2,750
WORLD PARK WORLD PARK BLDG 29 1,379 3,861 5,767
WORLD PARK WORLD PARK BLDG 31 458 3,058 34
- 62 -
<PAGE>
WORLD PARK AT WORLD PARK
UNION CTR. UNION CTR I 324 1,760 391
APPLEBEES LAND LEASE APPLEBEES LAND LEASE 309 - 29
LAZARUS LAND LEASE LAZARUS LAND LEASE 852 - -
UNO'S LAND LEASE UNO'S LAND LEASE - - 587
CLEVELAND, OHIO
- ---------------
CORPORATE CTR. I CORPORATE CTR. I 1,048 6,695 533
CORPORATE CTR. II CORPORATE CTR. II 1,048 6,712 971
CORPORATE CIRCLE CORPORATE CIRCLE 1,696 10,846 793
ONE CORPORATE ONE CORPORATE
ECHANGE EXCHANGE 1,287 8,226 488
CORPORATE PLAZA I CORPORATE PLAZA I 2,116 13,528 621
CORPORATE PLAZA II CORPORATE PLAZA II 1,841 11,768 514
CORPORATE PLACE CORPORATE PLACE 1,161 7,425 430
PARK 82 BLDG 2 322 2,065 717
PARK 82 STRONGSVILLE
BLDG B 243 1,902 324
ENTERPRISE BUS. PARK ENTERPRISE PKWY. 198 1,525 32
FOUNTAIN PKWY. BLDG I FOUNTAIN PKWY.
BLDG I 438 2,733 164
FREEDOM SQUARE FREEDOM SQUARE I 595 3,796 182
FREEDOM SQUARE FREEDOM SQUARE II 1,746 11,141 591
FREEDOM SQUARE FREEDOM SQUARE III 701 5,027 1,603
JOHNSON CONTROLS JOHNSON CONTROLS 364 2,330 61
LANDERBROOK CORP.CTR. LANDERBROOK
CORP.CTR. 1,807 7,445 3,290
LANDERBROOK CORP.CTR. LANDERBROOK
CORP.CTR. 2 1,382 7,453 743
6111 OAK TREE 6111 OAK TREE 703 4,492 288
PARK CTR. BLDG I 1,997 9,647 1,623
ROCK RUN CORP. PARK ROCK RUN - NORTH 837 5,351 242
ROCK RUN CORP. PARK ROCK RUN - CTR. 1,046 6,686 677
ROCK RUN CORP. PARK ROCK RUN - SOUTH 877 5,604 225
SOLON INDUST. PARK 30600 CARTER 819 3,286 98
SOLON INDUST. PARK 6230 COCHRAN 600 2,408 114
SOLON INDUST. PARK 31900 SOLON - FRONT 473 1,897 28
SOLON INDUST. PARK 5821 SOLON 554 2,222 58
SOLON INDUST. PARK 6161 COCHRAN 395 1,583 33
SOLON INDUST. PARK 5901 HARPER 349 1,399 128
SOLON INDUST. PARK 29125 SOLON 504 2,023 30
SOLON INDUST. PARK 6661 COCHRAN 244 981 39
SOLON INDUST. PARK 6521 DAVIS 128 514 10
SOLON INDUST. PARK 31900 SOLON - REAR 81 325 4
DYMENT DYMENT 817 5,203 -
COLUMBUS, OHIO
- --------------
TWO EASTON OVAL TWO EASTON OVAL 2,489 16,360 117
PET FOODS DIST. PET FOODS DIST. 268 4,932 1,323
TUTTLE CROSSING METROCTR. III 887 2,727 1,031
6600 PORT RD. 6600 PORT RD. 2,005 17,468 5,383
TUTTLE CROSSING SCIOTO CORP. CTR. 1,137 3,147 297
SOUTH POINTE BLDG D 276 2,485 1,000
SOUTH POINTE BLDG E 279 2,046 208
TUTTLE CROSSING 4650 LAKEHURST
(LITEL) 2,618 17,428 1,627
TUTTLE CROSSING 4600 LAKEHURST
(STERLING 1) 1,494 11,856 996
TUTTLE CROSSING 4700 LAKEHURST
(INDIANA INS.) 717 2,081 1,128
TUTTLE CROSSING STERLING 2 605 5,300 425
TUTTLE CROSSING JOHN ALDEN
LIFE INS. 1,066 6,856 622
TUTTLE CROSSING CARDINAL HEALTH 1,600 9,556 1,495
TUTTLE CROSSING STERLING 31,601 8,207 275
TUTTLE CROSSING COMPMANAGEMENT 867 2,860 1,681
TUTTLE CROSSING STERLING 4 483 9,011 766
TUTTLE CROSSING 5555 PARK CTR.
(XEROX) 1,580 8,630 559
TUTTLE CROSSING PARKWOOD PLACE 1,690 5,457 6,042
TUTTLE CROSSING NATIONWIDE 4,815 18,380 -
TUTTLE CROSSING EMERALD II 495 2,225 859
TUTTLE CROSSING ATRIUM II PHASE I 1,649 7,640 2,820
VETERANS ADMIN. CLINIC VA HOSPITAL 703 9,239 509
WESTBELT 2190-2200
WESTBELT DR. 300 1,900 8
3800 ZANE TRACE DR. 3800 ZANE TRACE DR.
(MBM) 170 1,916 480
3635 ZANE TRACE DR. 3635 ZANE TRACE DR. 236 1,749 122
BMW PARKING EXPANSION BMW PARKING EXP. 351 - -
- 63 -
<PAGE>
QWEST PARKING EXP. QWEST PARKING EXP. 201 - -
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 898 6,268 -
CHICAGO, ILLINOIS
- -----------------
ABBOTT DR. BLDG. ABBOTT DR. BLDG. 91 830 18
JANICE AVENUE BLDG. JANICE AVENUE BLDG. 94 865 -
WOLF ROAD BLDG. WOLF ROAD BLDG. 179 1,593 -
TOUHY AVENUE BLDG. TOUHY AVENUE BLDG. 310 2,823 381
JARVIS AVENUE BLDG. JARVIS AVENUE BLDG. 462 4,205 173
BALLARD DR. BLDG. BALLARD DR. BLDG. 186 1,693 24
LAUREL DR. BLDG. LAUREL DR. BLDG. 98 895 50
KIRK ROAD BLDG KIRK ROAD BLDG. 203 1,852 55
ATRIUM II ATRIUM II 776 6,991 123
CROSSROADS BLDG 1 917 8,251 711
EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,652 23,705 1,037
EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 30,965 430
EXECUTIVE TOWERS III EXECUTIVE TOWERS
III 3,512 32,126 391
ONE CONWAY PARK ONE CONWAY PARK 1,901 17,391 401
YORKTOWN OFFICE CTR. YORKTOWN OFF. CTR. 872 7,861 450
DECATUR, ILLINOIS
- -----------------
PARK 101 BUS. CTR. BLDG 3 275 2,405 894
PARK 101 BUS. CTR. BLDG 8 80 1,660 97
ILLINOIS POWER LND.LSE ILLINOIS POWER
LAND LEASE 212 - -
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 766 7,199 1,201
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW
SHOP CTR. 740 6,626 -
WESTMONT, ILLINOIS
- ------------------
OAKMONT CIRCLE OAKMONT TECH CTR. 1,501 8,450 -
OAKMONT CIRCLE OAKMONT CIRCLE OFF. 2,538 13,777 -
ST. LOUIS, MISSOURI
- -------------------
1920 BELTWAY 1920 BELTWAY 605 1,462 44
CRAIG PARK CTR. CRAIG PARK CTR. 254 2,285 -
DUKEPORT 3 DUKEPORT 3 741 3,768 890
DUKEPORT 5 DUKEPORT 5 636 2,354 204
ALFA-LAVAL ALFA-LAVAL 1,158 4,944 455
EARTH CITY 3322 NGIC 2,615 10,461 287
EARTH CITY 3300 POINTE 70 1,186 7,287 193
MCI MCI 1,151 6,844 286
HORIZON BUS. CTR. HORIZON BUS. CTR. 344 2,411 88
I-170 CTR. I-170 CTR. 950 3,915 453
LAUMEIER OFF.PK. BLDG I 1,220 9,091 1,227
LAUMEIER OFF.PK. BLDG II 1,258 9,054 1,149
LAUMEIER OFF.PK. BLDG IV 1,029 7,200 -
MARYVILLE CTR. 500 MARYVILLE CTR. 3,402 24,101 -
MARYVILLE CTR. 530 MARYVILLE CTR. 2,219 15,042 622
MARYVILLE CTR. 550 MARYVILLE CTR. 2,219 11,922 -
MARYVILLE CTR. 635 MARYVILLE CTR. 1,996 18,865 -
MARYVILLE CTR. 655 MARYVILLE CTR. 3,048 11,626 -
MARYVILLE CTR. 540 MARYVILLE CTR. 1,860 14,240 -
RIVERPORT TOWER RIVERPORT TOWER 3,250 29,251 629
RIVERPORT DIST. A RIVERPORT DIST. A 242 2,175 38
EXPRESS SCRIPTS EXPRESS SCRIPTS
SERVICE CTR SERVICE CTR 942 8,482 96
- 64 -
<PAGE>
RIVERPORT DIST. B RIVERPORT DIST. B 216 1,944 20
SCRIPTS SCRIPTS - 237 -
ST. LOUIS BUS. CTR. BLDG A 194 1,743 -
ST. LOUIS BUS. CTR. BLDG B 250 2,249 -
ST. LOUIS BUS. CTR. BLDG C 166 1,492 -
ST. LOUIS BUS. CTR. BLDG D 168 1,513 -
SOUTHPORT I SOUTHPORT I 192 808 13
SOUTHPORT II SOUTHPORT II 151 636 21
SOUTHPORT COMMERCE SOUTHPORT COMMERCE
CTR. CTR. 233 979 44
TWIN OAKS TWIN OAKS 566 8,072 221
WARSON COMMERCE CTR. WARSON COMMERCE CTR. 749 5,240 60
WESTMARK WESTMARK 1,200 9,759 792
WESTPORT WESTPORT CTR. I 1,666 4,161 2,084
WESTPORT WESTPORT CTR. II 714 1,968 1,039
WESTVIEW PLACE WESTVIEW PLACE 673 8,389 1,046
BLOOMINGTON, MINNESOTA
- ----------------------
HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 2,124 11,166 1,546
BROOKLYN PARK, MINNESOTA
- ------------------------
7300 NORTHLAND DR. 7300 NORTHLAND DR. 700 3,576 425
EAGAN, MINNESOTA
- ----------------
EAGANDALE TECH CTR. EAGANDALE TECH CTR. 987 5,554 307
SILVER BELL COMMONS SILVER BELL COMMONS 245 1,415 5
PLYMOUTH, MINNESOTA
- -------------------
PLYMOUTH OFFICE/ PLYMOUTH OFFICE/
TECH CTR TECH CTR 428 2,424 2
ST. PAUL, MINNESOTA
- -------------------
UNIVERSITY CROSSING UNIVERSITY CRSG 874 4,886 168
MINNEAPOLIS, MINNESOTA
- ----------------------
APOLLO DIST. CTR. APOLLO DIST. CTR. 866 4,842 640
BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 298 1,668 34
BROADWAY BUS. CTR III BROADWAY BUS.CTR III 140 791 31
BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 194 1,098 44
BROADWAY BUS. CTR V BROADWAY BUS. CTR V 160 908 37
BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 433 2,451 98
BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 233 1,318 138
BLOOMINGTON BLOOMINGTON
INDUST. CTR. INDUST. CTR. 628 3,508 88
CAHILL BUS. CTR. CAHILL BUS. CTR. 513 2,868 49
CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 334 1,868 13
CHANHASSEN I CHANHASSEN I 357 2,023 86
CHANHASSEN II CHANHASSEN II 438 2,483 97
CORNERSTONE BUS.CTR. CORNERSTONE
BUS. CTR. 1,469 8,212 36
CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 456 2,549 218
5219 BLDG. 5219 BLDG. 99 562 21
DECATUR BUS. CTR. DECATUR BUS. CTR. 436 2,436 26
EAGANDALE CROSSING EAGANDALE CROSSING 974 2,320 -
EDINA INTERCHANGE I EDINA INTERCHANGE I 637 3,560 55
EDINA INTERCHANGE II EDINA INTERCHANGE II 437 2,444 8
EDINA INTERCHANGE III EDINA INTERCHANGE III 493 2,754 10
EDINA INTERCHANGE IV EDINA INTERCHANGE IV 230 1,286 322
EDINA INTERCHANGE V EDINA INTERCHANGE V 982 5,489 28
EDINA INTERCHANGE VI EDINA INTERCHANGE VI 477 2,669 10
EDINA INTERCHANGE VII EDINA INTERCHANGE VII 180 1,028 114
ENTERPRISE ENTERPRISE
INDUST.CTR. INDUST. CTR. 874 4,884 617
ENCORE PARK ENCORE PARK 984 5,503 91
EDINA REALTY EDINA REALTY 330 1,817 179
GOLDEN HILLS I GOLDEN HILLS I 1,081 6,120 162
GOLDEN TRIANGLE GOLDEN TRIANGLE
TECH CTR TECH CTR 1,446 8,080 183
PROFESSIONAL PLAZA PROFESSIONAL PLAZA 471 2,635 49
PROFESSIONAL PLAZA IV PROFESSIONAL
PLAZA IV 248 1,387 26
- 65 -
<PAGE>
CLIFF ROAD CLIFF ROAD
INDUST.CTR. INDUST. CTR. 258 1,442 46
PROFESSIONAL PLAZA III PROFESSIONAL PLAZA
III 237 1,323 30
PROFESSIONAL PLAZA II PROFESSIONAL PLAZA
II 218 1,220 35
LYNDALE COMMONS 1 LYNDALE COMMONS 1 248 1,388 104
LYNDALE COMMONS 2 LYNDALE COMMONS 2 181 1,014 34
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST
CTR. N. 782 4,370 158
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR.S. 910 5,085 77
LARC INDUST. PARK I LARC INDUST. PARK I 283 1,580 27
LARC INDUST. PARK II LARC INDUST. PARK II 227 1,268 24
LARC INDUST. PARK III LARC INDUST. PARK III 137 765 3
LARC INDUST. PARK IV LARC INDUST. PARK IV 91 510 11
LARC INDUST. PARK V LARC INDUST. PARK V 97 541 3
LARC INDUST. PARK VI LARC INDUST. PARK VI 377 2,107 2
LARC INDUST. PARK VII LARC INDUST. PARK VII 244 1,365 147
MEDICINE LAKE MEDICINE LAKE
INDUST. CTR. INDUST. CTR. 1,158 6,472 26
MEDICINE LAKE MEDICINE LAKE
PROF.BLDG. PROF.BLDG. 77 430 1
NORMAN CTR. I NORMAN CTR. I 632 3,579 83
NORMAN CTR. II NORMAN CTR. II 782 4,433 159
NORMAN CTR. III NORMAN CTR. III 257 1,458 49
NORMAN CTR. IV NORMAN CTR. IV 562 3,183 101
NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 1,885 10,682 433
NORTH PLAZA NORTH PLAZA 288 1,629 131
NORTH STAR TITLE NORTH STAR TITLE 506 2,869 246
OXFORD INDUST. OXFORD INDUST. 103 576 8
PAKWA BUS. PARK I PAKWA BUS. PARK I 351 1,962 150
PAKWA BUS. PARK II PAKWA BUS. PARK II 217 1,212 19
PAKWA BUS. PARK III PAKWA BUS. PARK III 251 1,403 21
PENN CORPORATE BLDG. PENN CORPORATE BLDG. 315 1,762 6
10801 RED CIRCLE DR. 10801 RED CIRCLE DR. 533 2,981 56
SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 456 2,551 10
SIBLEY INDUST. CTR. I SIBLEY INDUST.CTR.I 356 2,012 185
SIBLEY INDUST. CTR. II SIBLEY INDUST.CTR.II 234 1,311 5
SIBLEY INDUST. SIBLEY INDUST.
CTR. III CTR.III 213 1,191 71
SOUTH PLAZA SOUTH PLAZA 377 2,136 143
JOHNSON BLDG. JOHNSON BLDG. 558 3,121 13
TRAPP ROAD I TRAPP ROAD I 671 3,800 153
TRAPP ROAD BLDG II TRAPP ROAD BLDG II 1,250 6,872 286
TYROL WEST TYROL WEST 350 1,985 208
WESTSIDE BUS. PARK WESTSIDE BUS. PARK 1,189 6,646 54
YANKEE PLACE YANKEE PLACE 2,822 15,777 275
801 ZANE AVE NORTH 801 ZANE AVE NORTH 369 2,064 9
CHILIES GROUND LEASE CHILIES GROUND LEASE 921 - 59
KNOX LAND LEASE KNOX LAND LEASE 1,066 - 1
OLIVE GARDEN GRND.LSE. OLIVE GARDEN
GRND.LSE. 850 - 70
UNIVERSITY LAND LEASE UNIVERSITY LND.LSE. 296 - -
ELIMINATIONS ELIMINATIONS - (132) -
------- --------- -------
TOTALS 297,942 1,886,148 219,689
======= ========= =======
- 66 -
<PAGE>
GROSS BOOK VALUE AT DECEMBER 31, 1998
-------------------------------------
LAND & BUILDINGS/
LOCATION/DEVELOPMENT BUILDING IMPROVEMENTS IMPROVEMENTS TOTAL
- -------------------- -------- ------------ ------------ --------
INDIANAPOLIS, INDIANA
- ---------------------
<S> <C> <C> <C> <C>
CASTLETON CORNER CUB CTR. 549 5,156 5,705
CASTLETON CORNER MICHAEL'S PLAZA 764 3,791 4,555
COMMUNITY MOB COMMUNITY MOB 350 2,855 3,205
PALOMAR BUILDING PALOMAR BUS. CTR. 158 1,549 1,707
FRANKLIN ROAD BUS. CTR. FRANKLIN ROAD BUS. CTR. 594 11,132 11,726
GEORGETOWN CTR. BLDG 1 362 2,483 2,845
GEORGETOWN CTR. BLDG 2 374 2,647 3,021
GEORGETOWN CTR. BLDG 3 421 2,032 2,453
NAMPAC BUILDING NAMPAC BUILDING 274 1,771 2,045
6060 GUION RD. 6060 GUION RD. 511 3,377 3,888
GREENWOOD CORNER GREENWOOD CORNER SHOPPES 418 3,615 4,033
GREENWOOD CORNER FIRST INDIANA BRANCH 47 266 313
HAMILTON CRSG. BLDG. 1 538 2,932 3,470
HAMILTON CRSG. BLDG. 2 384 1,927 2,311
HILLSDALE TECHCTR. HILLSDALE BLDG 4 366 5,233 5,599
HILLSDALE TECHCTR. HILLSDALE BLDG 5 251 3,543 3,794
HILLSDALE TECHCTR. HILLSDALE BLDG 6 315 4,304 4,619
8465 KEYSTONE 8465 KEYSTONE 89 1,363 1,452
F.C. TUCKER F.C. TUCKER BUILDING - 282 282
8555 KEYSTONE 8555 KEYSTONE - 6,102 6,102
3520 COMMERCE CRSG. 3520 COMMERCE CRSG. - 961 961
4750 KENTUCKY AVENUE 4750 KENTUCKY AVENUE 246 2,532 2,778
NORTH AIRPORT PARK BLDG 2 777 7,439 8,216
ONE NORTH CAPITOL ONE NORTH CAPITOL 1,439 8,156 9,595
PARK 100 BUS. PARK PARK 100 BLDG 34 133 1,721 1,854
PARK 100 BUS. PARK PARK 100 BLDG 79 187 2,201 2,388
PARK 100 BUS. PARK PARK 100 BLDG 80 256 2,666 2,922
PARK 100 BUS. PARK PARK 100 BLDG 83 252 2,861 3,113
PARK 100 BUS. PARK PARK 100 BLDG 84 354 2,861 3,215
PARK 100 BUS. PARK PARK 100 BLDG 95 642 5,100 5,742
PARK 100 BUS. PARK PARK 100 BLDG 96 1,436 13,380 14,816
PARK 100 BUS. PARK PARK 100 BLDG 97 676 5,666 6,342
PARK 100 BUS. PARK PARK 100 BLDG 98 273 8,224 8,497
PARK 100 BUS. PARK PARK 100 BLDG 100 103 2,927 3,030
PARK 100 BUS. PARK PARK 100 BLDG 107 99 1,682 1,781
PARK 100 BUS. PARK PARK 100 BLDG 109 246 1,801 2,047
PARK 100 BUS. PARK PARK 100 BLDG 116 348 3,347 3,695
PARK 100 BUS. PARK PARK 100 BLDG 118 230 2,467 2,697
PARK 100 BUS. PARK PARK 100 BLDG 119 395 3,757 4,152
PARK 100 BUS. PARK PARK 100 BLDG 121 604 1,097 1,701
PARK 100 BUS. PARK PARK 100 BLDG 122 290 3,809 4,099
PARK 100 BUS. PARK PARK 100 BLDG 125 674 5,861 6,535
PARK 100 BUS. PARK PARK 100 BLDG 126 165 1,577 1,742
PARK 100 BUS. PARK PARK 100 BLDG 127 96 2,153 2,249
PARK 100 BUS. PARK PARK 100 BLDG 128 904 8,696 9,600
PARK 100 BUS. PARK PARK 100 BLDG 129 865 6,133 6,998
PARK 100 BUS. PARK PARK 100 BLDG 130 513 4,082 4,595
PARK 100 BUS. PARK PARK 100 BLDG 131 1,111 7,802 8,913
PARK 100 BUS. PARK PARK 100 BLDG 132 446 1,603 2,049
PARK 100 BUS. PARK PARK 100 BLDG 133 69 889 958
PARK 100 BUS. PARK PARK 100 BLDG 134 464 3,905 4,369
PARK 100 BUS. PARK WOODLAND CORP. CTR.1 320 4,867 5,187
PARK FLETCHER BLDG 14 76 821 897
PARKWOOD CRSG. ONE PARKWOOD 1,018 10,174 11,192
PARKWOOD CRSG. TWO PARKWOOD 861 7,499 8,360
PARKWOOD CRSG. THREE PARKWOOD 1,377 9,043 10,420
PARKWOOD CRSG. FOUR PARKWOOD 1,490 11,287 12,777
SOFTWARE ARTISTRY, INC. SOFTWARE ARTISTRY, INC. 856 7,381 8,237
SOUTH PARK BUS. CTR. BLDG 1 292 2,780 3,072
SOUTH PARK BUS. CTR. BLDG 2 341 4,043 4,384
SOUTH PARK BUS. CTR. BLDG 3 212 2,782 2,994
SHADELAND STATION 7351 SHADELAND 2-STORY 103 1,590 1,693
SHADELAND STATION 7420-86 SHADELAND 266 3,237 3,503
SHADELAND STATION 7240 SHADELAND 3-STORY 152 3,982 4,134
SHADELAND STATION 7330 SHADELAND STATION 260 4,105 4,365
SHADELAND STATION 7369 SHADELAND STATION 102 1,282 1,384
- 60 -
<PAGE>
SHADELAND STATION 7340 SHADELAND 2-STORY 169 2,718 2,887
SHADELAND STATION 7400 SHADELAND STATION 581 3,457 4,038
ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL - 6,479 6,479
WOODFIELD AT THE CRSG.II 8440 WOODFIELD 733 10,367 11,100
WOODFIELD AT THE
CRSG. III 8425 WOODFIELD 3,843 22,935 26,778
4316 WEST MINNESOTA 4316 WEST MINNESOTA 287 2,508 2,795
NORCO WINDOWS LAND LEASE NORCO WINDOWS LND.LSE. 37 - 37
UPS LAND LEASE UPS LAND LEASE 270 - 270
NORGATE LAND LEASE NORGATE LAND LEASE 51 - 51
ZOLLMAN LAND LEASE ZOLLMAN LAND LEASE 115 - 115
BRYLANE LAND LEASE BRYLANE LAND LEASE 57 - 57
SOUTH PARK GROUNDS SOUTH PARK GROUNDS 21 - 21
FORT WAYNE, INDIANA
- -------------------
COLDWATER CRSG. COLDWATER CRSG. 2,310 17,255 19,565
LEBANON, INDIANA
- ----------------
LEBANON BUS. PARK AMERICAN AIR FILTER 177 3,134 3,311
LEBANON BUS. PARK PURITY WHOLESALE 610 8,266 8,876
LEBANON BUS. PARK PAMIDA 305 4,121 4,426
LEBANON BUS. PARK PRENTICE HALL 740 12,147 12,887
LEBANON BUS. PARK GENERAL CABLE 443 7,204 7,647
NASHVILLE, TENNESSEE
- --------------------
LAKEVIEW PLACE ONE LAKEVIEW PLACE 2,046 11,664 13,710
LAKEVIEW PLACE TWO LAKEVIEW PLACE 2,046 11,712 13,758
GREENBRIAR BUS. PARK KEEBLER 307 1,262 1,569
GREENBRIAR BUS. PARK GREENBRIAR BUS. PARK 1,445 5,332 6,777
HAYWOOD OAKS TECHCTR. BLDG 2 395 1,934 2,329
HAYWOOD OAKS TECHCTR. BLDG 3 346 1,892 2,238
HAYWOOD OAKS TECHCTR. BLDG 4 435 2,166 2,601
HAYWOOD OAKS TECHCTR. BLDG 5 629 3,372 4,001
HAYWOOD OAKS TECHCTR. BLDG 6 946 6,424 7,370
HAYWOOD OAKS TECHCTR. BLDG 7 456 2,385 2,841
HAYWOOD OAKS TECHCTR. BLDG 8 751 3,941 4,692
CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. 1,900 8,088 9,988
HEBRON, KENTUCKY
- ----------------
SOUTHPARK BUS. CTR. CR SERVICES 1,085 5,181 6,266
SKYPORT BUS. PARK BLDG 1 906 6,558 7,464
KENTUCKY SOUTHPARK BLDG 1 696 4,230 4,926
KENTUCKY SOUTHPARK BLDG 3 858 4,117 4,975
SOUTHPARK BUS. CTR. REDKEN LABORATORIES 779 3,284 4,063
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMMERCE CTR. EMPIRE COMMERCE CTR. 581 3,140 3,721
SOFA EXPRESS - FLORENCE SOFA EXPRESS - FLORENCE 735 1,050 1,785
CINCINNATI, OHIO
- ----------------
ONE ASHVIEW PLACE ONE ASHVIEW PLACE 1,204 12,537 13,741
BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 518 2,893 3,411
CORNELL COMMERCE CTR. CORNELL COMMERCE CTR. 495 4,892 5,387
CREEK ROAD BLDG 1 103 845 948
CREEK ROAD BLDG 2 132 1,161 1,293
ZUSSMAN BLDG 311 ELM 346 6,910 7,256
312 ELM 312 ELM 5,424 50,897 56,321
ENTERPRISE BUS. PARK BLDG 1 1,051 6,291 7,342
ENTERPRISE BUS. PARK BLDG 2 747 4,697 5,444
ENTERPRISE BUS. PARK BLDG A 119 740 859
ENTERPRISE BUS. PARK BLDG B 119 1,228 1,347
ENTERPRISE BUS. PARK BLDG D 243 2,448 2,691
EASTGATE SQUARE EASTGATE SQUARE 2,030 5,201 7,231
GARDEN RIDGE (EASTGATE) GARDEN RIDGE (EASTGATE) 626 199 825
TRI-COUNTY EXECUTIVE PLAZA I 728 5,308 6,036
- 61 -
TRI-COUNTY EXECUTIVE PLAZA II 728 5,356 6,084
TRI-COUNTY EXECUTIVE PLAZA III 509 4,754 5,263
FAIRFIELD BUS. CTR. D FAIRFIELD BUS. CTR. D 135 1,656 1,791
FAIRFIELD BUS. CTR. E FAIRFIELD BUS. CTR. E 398 2,612 3,010
GOVERNOR'S PLAZA KOHL'S DEPARTMENT STORE 1,345 3,848 5,193
GOVERNOR'S PLAZA SOFA EXPRESS 164 792 956
GOVERNOR'S PLAZA OFFICE MAX, INC. 651 1,327 1,978
FIDELITY DRIVE BUILDING FIDELITY DRIVE BUILDING 464 2,896 3,360
PARK 50 TECHCTR. BLDG 17 510 5,951 6,461
PARK 50 TECHCTR. BLDG 20 469 7,229 7,698
PARK 50 TECHCTR. BLDG 25 1,184 4,812 5,996
PARK 50 TECHCTR. BLDG 26 (SDRC) 929 20,455 21,384
GOVERNOR'S HILL 8790 GOVERNOR'S HILL 408 5,115 5,523
GOVERNOR'S HILL 8700 GOVERNOR'S HILL 468 5,951 6,419
GOVERNOR'S HILL 8800 GOVERNOR'S HILL 231 2,802 3,033
GOVERNOR'S HILL 8600 GOVERNOR'S HILL 1,245 19,713 20,958
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,053 9,186 11,239
GOVERNOR'S PTE. 4770 BLDG 596 8,123 8,719
GOVERNOR'S PTE. 4700 BLDG 595 6,001 6,596
GOVERNOR'S PTE. 4900 BLDG 673 4,867 5,540
GOVERNOR'S PTE. 4705 BLDG 792 9,083 9,875
GOVERNOR'S PTE. 4800 BLDG 998 5,720 6,718
GOVERNOR'S PTE. 4605 BLDG 715 18,359 19,074
GOVERNOR'S PTE. RETAIL SOUTH (BIGG'S) 4,227 7,553 11,780
GOVERNOR'S PTE. RETAIL NORTH (LOWE'S) 3,419 4,716 8,135
GOVERNOR'S PTE. ANTHEM PRESCRIPTION MGMT. 594 6,240 6,834
GOVERNOR'S PTE. 4660 BLDG 529 5,090 5,619
GOVERNOR'S PTE. 4680 BLDG 1,115 8,263 9,378
FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,332 3,332
HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. 175 231 406
KING'S MALL SHP. CTR. KING'S AUTO MALL I 124 4,836 5,960
KING'S MALL SHP. CTR. KING'S AUTO MALL II 952 4,961 6,913
7910 KENTUCKY DRIVE 7910 KENTUCKY DRIVE 285 754 1,039
7920 KENTUCKY DRIVE 7920 KENTUCKY DRIVE 698 1,262 1,960
KENWOOD KENWOOD EXECUTIVE CTR. 606 3,978 4,584
KENWOOD COMMONS BLDG I - 4,259 4,259
KENWOOD COMMONS BLDG II - 4,190 4,190
LAKE FOREST PLACE LAKE FOREST PLACE 1,953 20,739 22,692
MONTGOMERY CROSSING PHASE I 260 995 1,255
GOVERNOR'S PLAZA SPORTS UNLIMITED 778 3,904 4,682
MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. 1,327 6,775 8,102
MOSTELLER DIST. CTR. II MOSTELLER DIST. CTR. II 828 5,807 6,635
PFEIFFER ROAD OHIO NATIONAL 2,463 25,070 7,533
PERIMETER PARK BUILDING A 229 1,348 1,577
PERIMETER PARK BUILDING B 244 1,073 1,317
S & L DATA 312 PLUM 2,590 27,117 29,707
REMINGTON PARK BLDG A 560 1,474 2,034
REMINGTON PARK BLDG B 560 1,475 2,035
GALYAN'S TRADING CO. GALYAN'S TRADING CO. 1,925 3,502 5,427
TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 5,392 4,117 9,509
TRI-COUNTY OFFICE PARK TRI-COUNTY OFFICE PARK 221 6,080 6,301
TRIANGLE OFFICE PARK TRIANGLE OFFICE PARK 1,018 12,655 13,673
TUTTLE CRSG. TUTTLE RETAIL CTR. 3,450 6,371 9,821
UNIVERSITY MOVING UNIVERSITY MOVING 248 1,717 1,965
WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. 3,583 7,578 11,161
WEST LAKE CTR. WEST LAKE CTR. 2,459 17,541 20,000
WORLD PARK WORLD PARK BLDG 5 276 3,943 4,219
WORLD PARK WORLD PARK BLDG 6 385 3,814 4,199
WORLD PARK WORLD PARK BLDG 7 537 4,524 5,061
WORLD PARK WORLD PARK BLDG 8 561 5,827 6,388
WORLD PARK WORLD PARK BLDG 9 317 3,359 3,676
WORLD PARK WORLD PARK BLDG 11 460 5,106 5,566
WORLD PARK WORLD PARK BLDG 14 380 3,883 4,263
WORLD PARK WORLD PARK BLDG 15 381 2,630 3,011
WORLD PARK WORLD PARK BLDG 16 321 3,269 3,590
WORLD PARK WORLD PARK BLDG 18 997 5,262 6,259
WORLD PARK WORLD PARK BLDG 28 738 4,299 5,037
WORLD PARK WORLD PARK BLDG 29 1,379 9,628 11,007
WORLD PARK WORLD PARK BLDG 31 458 3,092 3,550
- 62 -
<PAGE>
WORLD PARK AT UNION CTR WORLD PARK UNION CTR I 324 2,151 2,475
APPLEBEES LAND LEASE APPLEBEES LAND LEASE 338 - 338
LAZARUS LAND LEASE LAZARUS LAND LEASE 852 - 852
UNO'S LAND LEASE UNO'S LAND LEASE 587 - 587
CLEVELAND, OHIO
- ---------------
CORPORATE CTR. I CORPORATE CTR. I 1,038 7,238 8,276
CORPORATE CTR. II CORPORATE CTR. II 1,048 7,683 8,731
CORPORATE CIRCLE CORPORATE CIRCLE 1,698 11,637 13,335
ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 1,287 8,714 10,001
CORPORATE PLAZA I CORPORATE PLAZA I 2,116 14,149 16,265
CORPORATE PLAZA II CORPORATE PLAZA II 1,841 12,282 14,123
CORPORATE PLACE CORPORATE PLACE 1,163 7,853 9,016
PARK 82 BLDG 2 322 2,782 3,104
PARK 82 STRONGSVILLE BLDG B 243 2,226 2,469
ENTERPRISE BUS. PARK ENTERPRISE PARKWAY 198 1,557 1,755
FOUNTAIN PARKWAY BLDG I FOUNTAIN PARKWAY BLDG I 527 2,808 3,335
FREEDOM SQUARE FREEDOM SQUARE I 595 3,978 4,573
FREEDOM SQUARE FREEDOM SQUARE II 1,746 11,732 13,478
FREEDOM SQUARE FREEDOM SQUARE III 701 6,630 7,331
JOHNSON CONTROLS JOHNSON CONTROLS 364 2,391 2,755
LANDERBROOK CORP. CTR LANDERBROOK CORP.CTR 1,808 10,734 12,542
LANDERBROOK CORP. CTR LANDERBROOK CORP.CTR II 1,382 8,196 9,578
6111 OAK TREE 6111 OAK TREE 703 4,780 5,483
PARK CTR. BLDG I 1,997 11,270 13,267
ROCK RUN CORPORATE PARK ROCK RUN - NORTH 837 5,593 6,430
ROCK RUN CORPORATE PARK ROCK RUN - CTR. 1,046 7,363 8,409
ROCK RUN CORPORATE PARK ROCK RUN - SOUTH 877 5,829 6,706
SOLON INDUST. PARK 30600 CARTER 821 3,382 4,203
SOLON INDUST. PARK 6230 COCHRAN 602 2,520 3,122
SOLON INDUST. PARK 31900 SOLON - FRONT 474 1,924 2,398
SOLON INDUST. PARK 5821 SOLON 555 2,279 2,834
SOLON INDUST. PARK 6161 COCHRAN 396 1,615 2,011
SOLON INDUST. PARK 5901 HARPER 350 1,526 1,876
SOLON INDUST. PARK 29125 SOLON 505 2,052 2,557
SOLON INDUST. PARK 6661 COCHRAN 245 1,019 1,264
SOLON INDUST. PARK 6521 DAVIS 128 524 652
SOLON INDUST. PARK 31900 SOLON - REAR 81 329 410
DYMENT DYMENT 816 5,204 6,020
COLUMBUS, OHIO
- --------------
TWO EASTON OVAL TWO EASTON OVAL 2,488 16,478 18,966
PET FOODS DISTRIBUTION PET FOODS DISTRIBUTION 1,031 5,492 6,523
TUTTLE CRSG. METROCTR. III 887 3,758 4,645
6600 PORT RD. 6600 PORT RD. 2,725 22,131 24,856
TUTTLE CRSG. SCIOTO CORPORATE CTR. 1,100 3,481 4,581
SOUTH PTE. BLDG D 76 3,485 3,761
SOUTH PTE. BLDG E 79 2,254 2,533
TUTTLE CRSG. 4650 LAKEHURST (LITEL) 2,670 19,003 21,673
TUTTLE CRSG. 4600 LAKEHURST
(STERLING 1) 1,524 12,822 14,346
TUTTLE CRSG. 4700 LAKEHURST
(INDIANA INS.) 717 3,209 3,926
TUTTLE CRSG. STERLING 2 605 5,725 6,330
TUTTLE CRSG. JOHN ALDEN LIFE INS. 1,066 7,478 8,544
TUTTLE CRSG. CARDINAL HEALTH 1,932 10,719 12,651
TUTTLE CRSG. STERLING 3 1,601 8,482 10,083
TUTTLE CRSG. COMPMANAGEMENT 867 4,541 5,408
TUTTLE CRSG. STERLING 4 483 9,777 10,260
TUTTLE CRSG. 5555 PARK CTR. (XEROX) 1,580 9,189 10,769
TUTTLE CRSG. PARKWOOD PLACE 1,690 11,499 13,189
TUTTLE CRSG. NATIONWIDE 4,815 18,380 23,195
TUTTLE CRSG. EMERALD II 495 3,084 3,579
TUTTLE CRSG. ATRIUM II PHASE I 1,649 10,460 12,109
VETERANS ADMIN. CLINIC VA HOSPITAL 703 9,748 10,451
WESTBELT 2190-2200 WESTBELT DRIVE 300 1,908 2,208
3800 ZANE TRACE DRIVE 3800 ZANE TRACE DRIVE
(MBM) 170 2,396 2,566
3635 ZANE TRACE DRIVE 3635 ZANE TRACE DRIVE 236 1,871 2,107
BMW PARKING EXPANSION BMW PARKING EXPANSION 351 - 351
- 63 -
QWEST PARKING EXPANSION QWEST PARKING EXPANSION 201 - 201
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 924 6,242 7,166
CHICAGO, ILLINOIS
- -----------------
ABBOTT DRIVE BUILDING ABBOTT DRIVE BUILDING 91 848 939
JANICE AVENUE BUILDING JANICE AVENUE BUILDING 94 855 949
WOLF ROAD BUILDING WOLF ROAD BUILDING 179 1,593 1,772
TOUHY AVENUE BUILDING TOUHY AVENUE BUILDING 310 3,204 3,514
JARVIS AVENUE BUILDING JARVIS AVENUE BUILDING 462 4,378 4,840
BALLARD DRIVE BUILDING BALLARD DRIVE BUILDING 186 1,717 1,903
LAUREL DRIVE BUILDING LAUREL DRIVE BUILDING 98 945 1,043
KIRK ROAD BLDG KIRK ROAD BLDG 203 1,907 2,110
ATRIUM II ATRIUM II 776 7,114 7,890
CROSSROADS BLDG 1 944 8,935 9,879
EXECUTIVE TOWERS I EXECUTIVE TOWERS I 2,670 4,724 27,394
EXECUTIVE TOWERS II EXECUTIVE TOWERS II 3,386 1,395 34,781
EXECUTIVE TOWERS III EXECUTIVE TOWERS III 3,512 2,517 36,029
ONE CONWAY PARK ONE CONWAY PARK 1,901 7,792 19,693
YORKTOWN OFFICE CTR. YORKTOWN OFFICE CTR. 872 8,311 9,183
DECATUR, ILLINOIS
- -----------------
PARK 101 BUS. CTR. BLDG 3 280 3,294 3,574
PARK 101 BUS. CTR. BLDG 8 184 1,653 1,837
ILLINOIS POWER LND.LSE. ILLINOIS POWER LND.LSE. 212 - 212
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 786 8,380 9,166
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW SHOP CTR. 755 6,611 7,366
WESTMONT, ILLINOIS
- -------------------
OAKMONT CIRCLE OAKMONT TECH CTR. 1,501 8,450 9,951
OAKMONT CIRCLE OAKMONT CIRCLE OFFICE 2,438 13,877 16,315
ST. LOUIS, MISSOURI
- -------------------
1920 BELTWAY 1920 BELTWAY 614 1,497 2,111
CRAIG PARK CTR. CRAIG PARK CTR. 254 2,285 2,539
DUKEPORT 3 DUKEPORT 3 965 4,434 5,399
DUKEPORT 5 DUKEPORT 5 637 2,557 3,194
ALFA-LAVAL ALFA-LAVAL 1,158 5,399 6,557
EARTH CITY 3322 NGIC 2,615 10,748 13,363
EARTH CITY 3300 PTE. 70 1,186 7,480 8,666
MCI MCI 1,281 7,000 8,281
HORIZON BUS. CTR. HORIZON BUS. CTR. 344 2,499 2,843
I-170 CTR. I-170 CTR. 1,018 4,300 5,318
LAUMEIER OFFICE PARK BLDG I 1,384 10,154 11,538
LAUMEIER OFFICE PARK BLDG II 1,421 10,040 11,461
LAUMEIER OFFICE PARK BLDG IV 1,029 7,200 8,229
MARYVILLE CTR. 500 MARYVILLE CTR. 3,402 24,101 27,503
MARYVILLE CTR. 530 MARYVILLE CTR. 2,219 15,042 17,261
MARYVILLE CTR. 550 MARYVILLE CTR. 1,996 12,145 14,141
MARYVILLE CTR. 635 MARYVILLE CTR. 3,048 17,813 20,861
MARYVILLE CTR. 655 MARYVILLE CTR. 1,860 12,814 14,674
MARYVILLE CTR. 540 MARYVILLE CTR. 2,219 13,881 16,100
RIVERPORT TOWER RIVERPORT TOWER 3,250 29,880 33,130
RIVERPORT DISTRIBUTION A RIVERPORT DIST. A 242 2,213 2,455
EXPRESS SCRIPTS EXPRESS SCRIPTS
SERVICE CTR SERVICE CTR 942 8,578 9,520
RIVERPORT DISTRIBUTION B RIVERPORT DIST. B 216 1,964 2,180
- 64 -
<PAGE>
SCRIPTS SCRIPTS - 237 237
ST. LOUIS BUS. CTR. BLDG A 194 1,743 1,937
ST. LOUIS BUS. CTR. BLDG B 250 2,249 2,499
ST. LOUIS BUS. CTR. BLDG C 166 1,492 1,658
ST. LOUIS BUS. CTR. BLDG D 168 1,513 1,681
SOUTHPORT I SOUTHPORT I 192 821 1,013
SOUTHPORT II SOUTHPORT II 151 657 808
SOUTHPORT COMMERCE CTR. SOUTHPORT COMMERCE CTR. 233 1,023 1,256
TWIN OAKS TWIN OAKS 566 8,293 8,859
WARSON COMMERCE CTR. WARSON COMMERCE CTR. 749 5,300 6,049
WESTMARK WESTMARK 1,206 10,545 11,751
WESTPORT WESTPORT CTR. I 1,714 6,197 7,911
WESTPORT WESTPORT CTR. II 921 2,800 3,721
WESTVIEW PLACE WESTVIEW PLACE 673 9,435 10,108
BLOOMINGTON, MINNESOTA
- ----------------------
HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 2,124 12,712 14,836
BROOKLYN PARK, MINNESOTA
- ------------------------
7300 NORTHLAND DRIVE 7300 NORTHLAND DRIVE 703 3,998 4,701
EAGAN, MINNESOTA
- -----------------
EAGANDALE TECH CTR. EAGANDALE TECH CTR. 987 5,861 6,848
SILVER BELL COMMONS SILVER BELL COMMONS 250 1,415 1,665
PLYMOUTH, MINNESOTA
- -------------------
PLYMOUTH OFFICE/ PLYMOUTH OFFICE/
TECH CTR TECH CTR 428 2,426 2,854
ST. PAUL, MINNESOTA
- -------------------
UNIVERSITY CRSG. UNIVERSITY CRSG. 891 5,037 5,928
MINNEAPOLIS, MINNESOTA
- ----------------------
APOLLO DISTRIBUTION CTR. APOLLO DISTRIBUTION CTR. 880 5,468 6,348
BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 295 1,705 2,000
BROADWAY BUS. CTR III BROADWAY BUS. CTR III 144 818 962
BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 200 1,136 1,336
BROADWAY BUS. CTR V BROADWAY BUS. CTR V 166 939 1,105
BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 447 2,535 2,982
BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 241 1,448 1,689
BLOOMINGTON INDUST. CTR BLOOMINGTON INDUST. CTR 621 3,603 4,224
CAHILL BUS. CTR. CAHILL BUS. CTR. 507 2,923 3,430
CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 331 1,884 2,215
CHANHASSEN I CHANHASSEN I 370 2,096 2,466
CHANHASSEN II CHANHASSEN II 453 2,565 3,018
CORNERSTONE BUS. CTR CORNERSTONE BUS. CTR 1,454 8,263 9,717
CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 451 2,772 3,223
5219 BUILDING 5219 BUILDING 102 580 682
DECATUR BUS. CTR. DECATUR BUS. CTR. 431 2,467 2,898
EAGANDALE CRSG. EAGANDALE CRSG. 974 2,320 3,294
EDINA INTERCHANGE I EDINA INTERCHANGE I 630 3,622 4,252
EDINA INTERCHANGE II EDINA INTERCHANGE II 432 2,457 2,889
EDINA INTERCHANGE III EDINA INTERCHANGE III 487 2,770 3,257
EDINA INTERCHANGE IV EDINA INTERCHANGE IV 228 1,610 1,838
EDINA INTERCHANGE V EDINA INTERCHANGE V 971 5,528 6,499
EDINA INTERCHANGE VI EDINA INTERCHANGE VI 472 2,684 3,156
EDINA INTERCHANGE VII EDINA INTERCHANGE VII 180 1,142 1,322
ENTERPRISE INDUST. CTR. ENTERPRISE INDUST. CTR. 864 5,511 6,375
ENCORE PARK ENCORE PARK 974 5,604 6,578
EDINA REALTY EDINA REALTY 349 1,977 2,326
GOLDEN HILLS I GOLDEN HILLS I 1,104 6,259 7,363
GOLDEN TRIANGLE TECH CTR GOLDEN TRIANGLE TECH CTR 1,456 8,253 9,709
PROFESSIONAL PLAZA PROFESSIONAL PLAZA 467 2,688 3,155
PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV 246 1,415 1,661
- 65 -
CLIFF ROAD INDUST. CTR. CLIFF ROAD INDUST. CTR. 255 1,491 1,746
PROFESSIONAL PLAZA III PROFESSIONAL PLAZA III 234 1,356 1,590
PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II 216 1,257 1,473
LYNDALE COMMONS 1 LYNDALE COMMONS 1 246 1,494 1,740
LYNDALE COMMONS 2 LYNDALE COMMONS 2 180 1,049 1,229
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 773 4,537 5,310
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 900 5,172 6,072
LARC INDUST. PARK I LARC INDUST. PARK I 280 1,610 1,890
LARC INDUST. PARK II LARC INDUST. PARK II 224 1,295 1,519
LARC INDUST. PARK III LARC INDUST. PARK III 135 770 905
LARC INDUST. PARK IV LARC INDUST. PARK IV 90 522 612
LARC INDUST. PARK V LARC INDUST. PARK V 96 545 641
LARC INDUST. PARK VI LARC INDUST. PARK VI 373 2,113 2,486
LARC INDUST. PARK VII LARC INDUST. PARK VII 242 1,514 1,756
MEDICINE LAKE MEDICINE LAKE
INDUST. CTR INDUST. CTR 1,145 6,511 7,656
MEDICINE LAKE PROF BLDG MEDICINE LAKE PROF BLDG 76 432 508
NORMAN CTR. I NORMAN CTR. I 644 3,650 4,294
NORMAN CTR. II NORMAN CTR. II 806 4,568 5,374
NORMAN CTR. III NORMAN CTR. III 263 1,501 1,764
NORMAN CTR. IV NORMAN CTR. IV 577 3,269 3,846
NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 1,950 11,050 13,000
NORTH PLAZA NORTH PLAZA 303 1,745 2,048
NORTH STAR TITLE NORTH STAR TITLE 539 3,082 3,621
OXFORD INDUST. OXFORD INDUST. 102 585 687
PAKWA BUS. PARK I PAKWA BUS. PARK I 347 2,116 2,463
PAKWA BUS. PARK II PAKWA BUS. PARK II 215 1,233 1,448
PAKWA BUS. PARK III PAKWA BUS. PARK III 248 1,427 1,675
PENN CORPORATE BUILDING PENN CORPORATE BUILDING 312 1,771 2,083
10801 RED CIRCLE DRIVE 10801 RED CIRCLE DRIVE 527 3,043 3,570
SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 451 2,566 3,017
SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I 356 2,197 2,553
SIBLEY INDUST. CTR. II SIBLEY INDUST. CTR. II 211 1,339 1,550
SIBLEY INDUST. CTR. III SIBLEY INDUST. CTR. III 211 1,264 1,475
SOUTH PLAZA SOUTH PLAZA 396 2,260 2,656
JOHNSON BUILDING JOHNSON BUILDING 552 3,140 3,692
TRAPP ROAD I TRAPP ROAD I 690 3,934 4,624
TRAPP ROAD BLDG II TRAPP ROAD BLDG II 1,250 7,158 8,408
TYROL WEST TYROL WEST 380 2,163 2,543
WESTSIDE BUS. PARK WESTSIDE BUS. PARK 1,176 6,713 7,889
YANKEE PLACE YANKEE PLACE 2,792 16,082 18,874
801 ZANE AVE NORTH 801 ZANE AVE NORTH 365 2,077 2,442
CHILIES GROUND LEASE CHILIES GROUND LEASE 980 - 980
KNOX LAND LEASE KNOX LAND LEASE 1,067 - 1,067
OLIVE GARDEN GRND LSE OLIVE GARDEN GRND LSE 920 - 920
UNIVERSITY LAND LEASE UNIVERSITY LAND LEASE 296 - 296
ELIMINATIONS ELIMINATIONS - (132) (132)
-------- --------- ---------
TOTALS 312,022 2,091,757 2,403,779
======== ========= =========
- 66 -
<PAGE>
ACCUMU. DATE OF DATE DEPR.
LOCATION/DEVELOPMENT BUILDING DEPR. CONST ACQU LIFE
- -------------------- --------- ------ ------- ---- -----
INDIANAPOLIS, INDIANA
- ----------------------
<S> <C> <C> <C> <C> <C>
CASTLETON CORNER CUB CTR. 1,671 1986 1986 (3)
CASTLETON CORNER MICHAEL'S PLAZA 557 1984 1993 (3)
COMMUNITY MOB COMMUNITY MOB 334 1995 1995 (3)
PALOMAR BLDG. PALOMAR BUS. CTR. 155 1973 1995 (3)
FRANKLIN ROAD BUS. CTR. FRANKLIN RD.BUS.CTR. 1,390 1962 1995 (3)
GEORGETOWN CTR. BLDG 1 139 1987 1996 (3)
GEORGETOWN CTR. BLDG 2 148 1987 1996 (3)
GEORGETOWN CTR. BLDG 3 109 1987 1996 (3)
NAMPAC BLDG. NAMPAC BLDG. 162 1974 1995 (3)
6060 GUION RD. 6060 GUION RD. 221 1968 1996 (3)
GREENWOOD CORNER GREENWOOD CORNER SHPS. 1,111 1986 1986 (3)
GREENWOOD CORNER FIRST INDIANA BRANCH 34 1988 1993 (3)
HAMILTON CRSG. BLDG. 1 459 1989 1993 (3)
HAMILTON CRSG. BLDG. 2 111 1997 1997 (3)
HILLSDALE TECHNECTR. HILLSDALE BLDG 4 754 1987 1993 (3)
HILLSDALE TECHNECTR. HILLSDALE BLDG 5 549 1987 1993 (3)
HILLSDALE TECHNECTR. HILLSDALE BLDG 6 571 1987 1993 (3)
8465 KEYSTONE 8465 KEYSTONE 135 1983 1995 (3)
F.C. TUCKER F.C. TUCKER BLDG. 37 1978 1993 (3)
8555 KEYSTONE 8555 KEYSTONE 319 1985 1997 (3)
3520 COMM. CRSG. 3520 COMM. CRSG. 301 1976 1993 (3)
4750 KENTUCKY AVE. 4750 KENTUCKY AVE. 148 1974 1996 (3)
NORTH AIRPORT PARK BLDG 2 664 1997 1997 (3)
ONE N. CAPITOL ONE N. CAPITOL - 1996 1996 (3)
PARK 100 BUS. PARK PARK 100 BLDG 34 617 1979 1986 (3)
PARK 100 BUS. PARK PARK 100 BLDG 79 448 1988 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 80 379 1998 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 83 368 1989 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 84 369 1989 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 95 651 1993 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 96 1,528 1994 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 97 1,159 1994 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 98 1,466 1968 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 100 439 1995 1995 (3)
PARK 100 BUS. PARK PARK 100 BLDG 107 224 1984 1995 (3)
PARK 100 BUS. PARK PARK 100 BLDG 109 642 1985 1986 (3)
PARK 100 BUS. PARK PARK 100 BLDG 116 937 1988 1988 (3)
PARK 100 BUS. PARK PARK 100 BLDG 118 336 1988 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 119 541 1989 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 121 145 1989 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 122 559 1990 1993 (3)
PARK 100 BUS. PARK PARK 100 BLDG 125 908 1994 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 126 225 1984 1994 (3)
PARK 100 BUS. PARK PARK 100 BLDG 127 241 1995 1995 (3)
PARK 100 BUS. PARK PARK 100 BLDG 128 1,243 1996 1996 (3)
PARK 100 BUS. PARK PARK 100 BLDG 129 464 1996 1996 (3)
PARK 100 BUS. PARK PARK 100 BLDG 130 426 1996 1996 (3)
PARK 100 BUS. PARK PARK 100 BLDG 131 513 1997 1997 (3)
PARK 100 BUS. PARK PARK 100 BLDG 132 109 1997 1997 (3)
PARK 100 BUS. PARK PARK 100 BLDG 133 26 1997 1997 (3)
PARK 100 BUS. PARK PARK 100 BLDG 134 89 1998 1998 (3)
PARK 100 BUS. PARK WOODLAND CORP. CTR. ONE 181 1998 1998 (3)
PARK FLETCHER BLDG 14 140 1978 1995 (3)
PARKWOOD CRSG. ONE PARKWOOD 891 1989 1995 (3)
PARKWOOD CRSG. TWO PARKWOOD 213 1996 1996 (3)
PARKWOOD CRSG. THREE PARKWOOD 622 1997 1997 (3)
PARKWOOD CRSG. FOUR PARKWOOD 156 1998 1998 (3)
SOFTWARE ARTISTRY, INC. SOFTWARE ARTISTRY, INC. 246 1998 1998 (3)
SOUTH PARK BUS. CTR. BLDG 1 556 1989 1993 (3)
SOUTH PARK BUS. CTR. BLDG 2 684 1990 1993 (3)
SOUTH PARK BUS. CTR. BLDG 3 575 1990 1993 (3)
SHADELAND STA. 7351 SHADELAND 2-STY. 254 1983 1993 (3)
SHADELAND STA. 7420-86 SHADELAND 1,072 1984 1986 (3)
SHADELAND STA. 7240 SHADELAND 3-STY. 1,282 1985 1993 (3)
SHADELAND STA. 7330 SHADELAND STA. 1,051 1988 1988 (3)
SHADELAND STA. 7369 SHADELAND STA. 165 1989 1993 (3)
- 60 -
<PAGE>
SHADELAND STA. 7340 SHADELAND 2-STY. 360 1989 1993 (3)
SHADELAND STA. 7400 SHADELAND STA. 588 1990 1993 (3)
ST. FRANCIS MEDICAL ST. FRANCIS MEDICAL 1,166 1995 1995 (3)
WOODFIELD AT THE 8440 WOODFIELD
CROSSING II 1,664 1987 1993 (3)
WOODFIELD AT THE 8425 WOODFIELD
CROSSING III 3,474 1989 1993 (3)
4316 WEST MINNESOTA 4316 W. MINNESOTA 146 1970 1996 (3)
NORCO WINDOWS LND.LSE. NORCO WINDOWS LND.LSE. 7 N/A 1995 (3)
UPS LND.LSE. UPS LND.LSE. 12 N/A 1997 (3)
NORGATE LND.LSE. NORGATE LND.LSE. - N/A 1995 (3)
ZOLLMAN LND.LSE. ZOLLMAN LND.LSE. - N/A 1994 (3)
BRYLANE LND.LSE. BRYLANE LND.LSE. 17 N/A 1994 (3)
SOUTH PARK GROUNDS SOUTH PARK GROUNDS - N/A 1996 (3)
FORT WAYNE, INDIANA
- -------------------
COLDWATER CRSG. COLDWATER CRSG. 1,988 1990 1994 (3)
LEBANON, INDIANA
- ----------------
LEBANON BUS. PARK AMERICAN AIR FILTER 305 1996 1996 (3)
LEBANON BUS. PARK PURITY WHOLESALE 339 1997 1997 (3)
LEBANON BUS. PARK PAMIDA 275 1997 1997 (3)
LEBANON BUS. PARK PRENTICE HALL 520 1998 1998 (3)
LEBANON BUS. PARK GENERAL CABLE 142 1998 1998 (3)
NASHVILLE, TENNESSEE
- --------------------
LAKEVIEW PLACE ONE LAKEVIEW PLACE 26 1986 1998 (3)
LAKEVIEW PLACE TWO LAKEVIEW PLACE 24 1988 1998 (3)
GREENBRIAR BUS. PARK KEEBLER 120 1985 1995 (3)
GREENBRIAR BUS. PARK GREENBRIAR BUS. PARK 757 1986 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 2 278 1988 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 3 423 1988 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 4 330 1988 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 5 684 1988 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 6 925 1989 1993 (3)
HAYWOOD OAKS TECHNECTR. BLDG 7 438 1995 1995 (3)
HAYWOOD OAKS TECHNECTR. BLDG 8 379 1997 1997 (3)
CREEKSIDE CRSG. ONE ONE CREEKSIDE CRSG. 189 1998 1998 (3)
HEBRON, KENTUCKY
- ----------------
SOUTHPARK BUS. CTR. CR SERVICES 461 1994 1994 (3)
SKYPORT BUS. PARK BLDG 1 380 1996 1997 (3)
KENTUCKY SOUTHPARK BLDG 1 562 1990 1993 (3)
KENTUCKY SOUTHPARK BLDG 3 481 1991 1993 (3)
SOUTHPARK BUS. CTR. REDKEN LABORATORIES 366 1994 1994 (3)
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMM. CTR. EMPIRE COMM. CTR. 215 1973 1996 (3)
SOFA EXPRESS - FLORENCE SOFA EXPRESS - FLORENCE 40 1997 1997 (3)
CINCINNATI, OHIO
- ---------------
ONE ASHVIEW PLACE ONE ASHVIEW PLACE 443 1989 1997 (3)
BLUE ASH OFF. CTR VI BLUE ASH OFF. CTR VI 93 1989 1997 (3)
CORNELL COMM. CTR. CORNELL COMM. CTR. 478 1989 1996 (3)
CREEK ROAD BLDG 1 46 1971 1996 (3)
CREEK ROAD BLDG 2 63 1971 1996 (3)
ZUSSMAN BLDG 311 ELM 1,024 1902 1993 (3)
312 ELM 312 ELM 7,031 1902 1993 (3)
ENTERPRISE BUS. PARK BLDG 1 902 1990 1993 (3)
ENTERPRISE BUS. PARK BLDG 2 1,022 1990 1993 (3)
ENTERPRISE BUS. PARK BLDG A 69 1987 1995 (3)
ENTERPRISE BUS. PARK BLDG B 112 1988 1995 (3)
ENTERPRISE BUS. PARK BLDG D 373 1989 1995 (3)
EASTGATE SQUARE EASTGATE SQUARE 485 1990 1995 (3)
GARDEN RIDGE (EASTGATE) GARDEN RIDGE (EASTGATE) - 1998 1998 (3)
TRI-COUNTY EXECUTIVE PLAZA I 284 1980 1996 (3)
- 61 -
<PAGE>
TRI-COUNTY EXECUTIVE PLAZA II 270 1981 1996 (3)
TRI-COUNTY EXECUTIVE PLAZA III - 1998 1998 (3)
FAIRFIELD BUS. CTR. D FAIRFIELD BUS. CTR. D 146 1990 1995 (3)
FAIRFIELD BUS. CTR. E FAIRFIELD BUS. CTR. E 226 1990 1995 (3)
GOVERNOR'S PLAZA KOHL'S DEPARTMENT STORE 388 1994 1994 (3)
GOVERNOR'S PLAZA SOFA EXPRESS 67 1995 1995 (3)
GOVERNOR'S PLAZA OFF. MAX, INC. 112 1995 1995 (3)
FIDELITY DR. BLDG. FIDELITY DR. BLDG. 965 1972 1986 (3)
PARK 50 TECHNECTR. BLDG 17 2,229 1985 1986 (3)
PARK 50 TECHNECTR. BLDG 20 1,954 1987 1988 (3)
PARK 50 TECHNECTR. BLDG 25 720 1989 1993 (3)
PARK 50 TECHNECTR. BLDG 26 (SDRC) 2,593 1991 1993 (3)
GOVERNOR'S HILL 8790 GOVERNOR'S HILL 823 1985 1991 (3)
GOVERNOR'S HILL 8700 GOVERNOR'S HILL 767 1985 1993 (3)
GOVERNOR'S HILL 8800 GOVERNOR'S HILL 1,228 1985 1986 (3)
GOVERNOR'S HILL 8600 GOVERNOR'S HILL 2,861 1986 1991 (3)
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 1,172 1990 1993 (3)
GOVERNOR'S POINTE 4770 BLDG 2,261 1986 1988 (3)
GOVERNOR'S POINTE 4700 BLDG 1,647 1987 1988 (3)
GOVERNOR'S POINTE 4900 BLDG 1,469 1987 1989 (3)
GOVERNOR'S POINTE 4705 BLDG 1,426 1988 1993 (3)
GOVERNOR'S POINTE 4800 BLDG 1,126 1989 1993 (3)
GOVERNOR'S POINTE 4605 BLDG 2,510 1990 1993 (3)
GOVERNOR'S POINTE RETAIL SOUTH (BIGG'S) 538 1996 1996 (3)
GOVERNOR'S POINTE RETAIL NORTH (LOWE'S) 261 1997 1997 (3)
GOVERNOR'S POINTE ANTHEM PRESCRIP.MGMT. 383 1997 1997 (3)
GOVERNOR'S POINTE 4660 BLDG 352 1997 1997 (3)
GOVERNOR'S POINTE 4680 BLDG 95 1998 1998 (3)
FRANCISCAN HEALTH FRANCISCAN HEALTH 263 1996 1996 (3)
HUNTINGTON BANK BLDG. HUNTINGTON BANK BLDG. 13 1986 1996 (3)
KING'S MALL SHP. CTR. KING'S AUTO MALL I 1,277 1990 1993 (3)
KING'S MALL SHP. CTR. KING'S AUTO MALL II 639 1988 1989 (3)
7910 KENTUCKY DR. 7910 KENTUCKY DR. 39 1980 1997 (3)
7920 KENTUCKY DR. 7920 KENTUCKY DR. 46 1974 1997 (3)
KENWOOD KENWOOD EXECUTIVE CTR. 100 1981 1997 (3)
KENWOOD COMMONS BLDG I 1,810 1986 1998 (3)
KENWOOD COMMONS BLDG II 982 1986 1998 (3)
LAKE FOREST PLACE LAKE FOREST PLACE 1,269 1985 1996 (3)
MONTGOMERY CRSG. PHASE I 99 1993 1993 (3)
GOVERNOR'S PLAZA SPORTS UNLIMITED 419 1994 1994 (3)
MOSTELLER DIST. CTR. MOSTELLER DIST. CTR. 851 1957 1996 (3)
MOSTELLER DIST. CTR. II MOSTELLER DIST. CTR. II 434 1997 1997 (3)
PFEIFFER ROAD OHIO NATIONAL 2,448 1996 1996 (3)
PERIMETER PARK BLDG. A 72 1991 1996 (3)
PERIMETER PARK BLDG. B 63 1991 1996 (3)
S & L DATA 312 PLUM 4,080 1987 1993 (3)
REMINGTON PARK BLDG A 49 1982 1997 (3)
REMINGTON PARK BLDG B 49 1982 1997 (3)
GALYAN'S TRADING CO. GALYAN'S TRADING CO. 355 1984 1994 (3)
TRI-COUNTY MKTPL. TRI-COUNTY MKTPL. 76 1998 1998 (3)
TRI-COUNTY OFF. PARK TRI-COUNTY OFF. PARK 1,023 1971 1993 (3)
TRIANGLE OFF. PARK TRIANGLE OFF. PARK 5,166 1965 1986 (3)
TUTTLE CRSG. TUTTLE RETAIL CTR. 566 1995 1995 (3)
UNIVERSITY MOVING UNIVERSITY MOVING 161 1991 1995 (3)
WESTERN HILLS MKTPL. WESTERN HILLS MKTPL. 48 1998 1998 (3)
WEST LAKE CTR. WEST LAKE CTR. 1,292 1981 1996 (3)
WORLD PARK WORLD PARK BLDG 5 1,305 1987 1990 (3)
WORLD PARK WORLD PARK BLDG 6 1,125 1987 1990 (3)
WORLD PARK WORLD PARK BLDG 7 1,058 1987 1990 (3)
WORLD PARK WORLD PARK BLDG 8 776 1989 1993 (3)
WORLD PARK WORLD PARK BLDG 9 544 1989 1993 (3)
WORLD PARK WORLD PARK BLDG 11 737 1989 1993 (3)
WORLD PARK WORLD PARK BLDG 14 523 1989 1993 (3)
WORLD PARK WORLD PARK BLDG 15 431 1990 1993 (3)
WORLD PARK WORLD PARK BLDG 16 419 1989 1993 (3)
WORLD PARK WORLD PARK BLDG 18 182 1997 1997 (3)
WORLD PARK WORLD PARK BLDG 28 181 1998 1998 (3)
WORLD PARK WORLD PARK BLDG 29 252 1998 1998 (3)
WORLD PARK WORLD PARK BLDG 31 - 1998 1998 (3)
- 62 -
<PAGE>
WORLD PARK AT UNION CTR WORLD PARK UNION CTR I 2 1998 1998 (3)
APPLEBEES LND.LSE. APPLEBEES LND.LSE. 11 N/A 1997 (3)
LAZARUS LND.LSE. LAZARUS LND.LSE. - N/A 1996 (3)
UNO'S LND.LSE. UNO'S LND.LSE. 22 N/A 1997 (3)
CLEVELAND, OHIO
- ---------------
CORP. CTR. I CORP. CTR. I 538 1985 1996 (3)
CORP. CTR. II CORP. CTR. II 582 1987 1996 (3)
CORP. CIRCLE CORP. CIRCLE 635 1983 1996 (3)
ONE CORP. EXCHANGE ONE CORP. EXCHANGE 669 1989 1996 (3)
CORP. PLAZA I CORP. PLAZA I 1,098 1989 1996 (3)
CORP. PLAZA II CORP. PLAZA II 917 1991 1996 (3)
CORP. PLACE CORP. PLACE 432 1988 1996 (3)
PARK 82 BLDG 2 6 1998 1998 (3)
PARK 82 STRONGSVILLE BLDG B 54 1998 1998 (3)
ENTERPRISE BUS. PARK ENTERPRISE PARKWAY 16 1974/1995 1998 (3)
FOUNTAIN PARKWAY BLDG I FOUNTAIN PARKWAY BLDG I 63 1998 1998 (3)
FREEDOM SQUARE FREEDOM SQUARE I 295 1980 1996 (3)
FREEDOM SQUARE FREEDOM SQUARE II 888 1987 1996 (3)
FREEDOM SQUARE FREEDOM SQUARE III 459 1997 1997 (3)
JOHNSON CONTROLS JOHNSON CONTROLS 99 1972 1997 (3)
LANDERBROOK CORP. CTR LANDERBROOK CORP. CTR 577 1997 1997 (3)
LANDERBROOK CORP. CTR LANDERBROOK CORP.CTR II 16 1998 1998 (3)
6111 OAK TREE 6111 OAK TREE 165 1979 1997 (3)
PARK CTR. BLDG I 31 1998 1998 (3)
ROCK RUN CORP. PARK ROCK RUN - N. 434 1984 1996 (3)
ROCK RUN CORP. PARK ROCK RUN - CTR. 537 1985 1996 (3)
ROCK RUN CORP. PARK ROCK RUN - S. 460 1986 1996 (3)
SOLON INDUST. PARK 30600 CARTER 110 1971 1997 (3)
SOLON INDUST. PARK 6230 COCHRAN 75 1997 1997 (3)
SOLON INDUST. PARK 31900 SOLON - FRONT 57 1974 1997 (3)
SOLON INDUST. PARK 5821 SOLON 69 1970 1997 (3)
SOLON INDUST. PARK 6161 COCHRAN 50 1978 1997 (3)
SOLON INDUST. PARK 5901 HARPER 46 1970 1997 (3)
SOLON INDUST. PARK 29125 SOLON 61 1980 1997 (3)
SOLON INDUST. PARK 6661 COCHRAN 30 1979 1997 (3)
SOLON INDUST. PARK 6521 DAVIS 16 1979 1997 (3)
SOLON INDUST. PARK 31900 SOLON - REAR 10 1982 1997 (3)
DYMENT DYMENT 216 1988 1997 (3)
COLUMBUS, OHIO
- --------------
TWO EASTON OVAL TWO EASTON OVAL 242 1996 1998 (3)
PET FOODS DIST. PET FOODS DIST. 573 1993 1993 (3)
TUTTLE CRSG. METROCTR. III 479 1983 1996 (3)
6600 PORT RD. 6600 PORT RD. 767 1995 1997 (3)
TUTTLE CRSG. SCIOTO CORP. CTR. 191 1987 1996 (3)
SOUTH POINTE BLDG D 134 1997 1997 (3)
SOUTH POINTE BLDG E 75 1997 1997 (3)
TUTTLE CRSG. 4650 LAKEHURST (LITEL) 2,415 1990 1993 (3)
TUTTLE CRSG. 4600 LAKEHURST
(STERLING 1) 1,632 1990 1993 (3)
TUTTLE CRSG. 4700 LAKEHURST
(INDIANA INS.) 788 1994 1994 (3)
TUTTLE CRSG. STERLING 2 526 1995 1995 (3)
TUTTLE CRSG. JOHN ALDEN LIFE INS. 717 1995 1995 (3)
TUTTLE CRSG. CARDINAL HEALTH 1,732 1995 1995 (3)
TUTTLE CRSG. STERLING 3 777 1996 1995 (3)
TUTTLE CRSG. COMPMANAGEMENT 172 1997 1997 (3)
TUTTLE CRSG. STERLING 4 225 1998 1998 (3)
TUTTLE CRSG. 5555 PARK CTR. (XEROX) 1,051 1992 1994 (3)
TUTTLE CRSG. PARKWOOD PLACE 617 1997 1997 (3)
TUTTLE CRSG. NATIONWIDE 1,843 1996 1996 (3)
TUTTLE CRSG. EMERALD II 11 1998 1998 (3)
TUTTLE CRSG. ATRIUM II PHASE I 439 1998 1998 (3)
VETERANS ADMIN. CLINIC VA HOSPITAL 1,017 1994 1994 (3)
WESTBELT 2190-2200 WESTBELT DR. 13 1986 1998 (3)
3800 ZANE TRACE DR. 3800 ZANE TRACE DR. (MBM) 205 1978 1994 (3)
3635 ZANE TRACE DR. 3635 ZANE TRACE DR. 27 1980 1998 (3)
BMW PARKING EXP. BMW PARKING EXP. 4 N/A 1998 (3)
- 63 -
<PAGE>
QWEST PARKING EXP. QWEST PARKING EXP. - N/A 1998 (3)
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 1,637 1988 1988 (3)
CHICAGO, ILLINOIS
- -----------------
ABBOTT DR. BLDG. ABBOTT DR. BLDG. 19 1989 1998 (3)
JANICE AVE. BLDG. JANICE AVE. BLDG. 18 1956 1998 (3)
WOLF ROAD BLDG. WOLF ROAD BLDG. 34 1966/69 1998 (3)
TOUHY AVE. BLDG. TOUHY AVE. BLDG. 63 1971 1988 (3)
JARVIS AVE. BLDG. JARVIS AVE. BLDG. 91 1969 1988 (3)
BALLARD DR. BLDG. BALLARD DR. BLDG. 36 1985 1998 (3)
LAUREL DR. BLDG. LAUREL DR. BLDG. 20 1981 1988 (3)
KIRK ROAD BLDG KIRK ROAD BLDG 39 1990 1998 (3)
ATRIUM II ATRIUM II 158 1986 1998 (3)
CROSSROADS BLDG 1 182 1998 1998 (3)
EXECUTIVE TOWERS I EXECUTIVE TOWERS I 896 1983 1997 (3)
EXECUTIVE TOWERS II EXECUTIVE TOWERS II 1,085 1984 1997 (3)
EXECUTIVE TOWERS III EXECUTIVE TOWERS III 1,162 1987 1997 (3)
ONE CONWAY PARK ONE CONWAY PARK 292 1989 1998 (3)
YORKTOWN OFF. CTR. YORKTOWN OFF. CTR. 119 1979/80/81 1998 (3)
DECATUR, ILLINOIS
- -----------------
PARK 101 BUS. CTR. BLDG 3 1,210 1979 1986 (3)
PARK 101 BUS. CTR. BLDG 8 535 1980 1986 (3)
ILLINOIS POWER LND.LSE. ILLINOIS POWER LND.LSE. - N/A 1994 (3)
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 2,165 1987 1988 (3)
CHAMPAIGN, ILLINOIS
- -------------------
MARKET VIEW MARKET VIEW SHOP CTR. 2,154 1985 1986 (3)
WESTMONT, ILLINOIS
- ------------------
OAKMONT CIRCLE OAKMONT TECH CTR. 35 1989 1998 (3)
OAKMONT CIRCLE OAKMONT CIRCLE OFF. 58 1990 1998 (3)
ST. LOUIS, MISSOURI
- -------------------
1920 BELTWAY 1920 BELTWAY 91 1986 1996 (3)
CRAIG PARK CTR. CRAIG PARK CTR. 2 1984 1998 (3)
DUKEPORT 3 DUKEPORT 3 167 1998 1998 (3)
DUKEPORT 5 DUKEPORT 5 5 1998 1998 (3)
ALFA-LAVAL ALFA-LAVAL 291 1996 1996 (3)
EARTH CITY 3322 NGIC 456 1987 1997 (3)
EARTH CITY 3300 POINTE 70 324 1989 1997 (3)
MCI MCI 212 1998 1998 (3)
HORIZON BUS. CTR. HORIZON BUS. CTR. 47 1985 1998 (3)
I-170 CTR. I-170 CTR. 296 1986 1996 (3)
LAUMEIER OFF. PARK BLDG I 1,098 1987 1995 (3)
LAUMEIER OFF. PARK BLDG II 1,027 1988 1995 (3)
LAUMEIER OFF. PARK BLDG IV 135 1987 1998 (3)
MARYVILLE CTR. 500 MARYVILLE CTR. 819 1984 1997 (3)
MARYVILLE CTR. 530 MARYVILLE CTR. 470 1990 1997 (3)
MARYVILLE CTR. 550 MARYVILLE CTR. 379 1988 1997 (3)
MARYVILLE CTR. 635 MARYVILLE CTR. 668 1987 1997 (3)
MARYVILLE CTR. 655 MARYVILLE CTR. 400 1994 1997 (3)
MARYVILLE CTR. 540 MARYVILLE CTR. 472 1990 1997 (3)
RIVERPORT TOWER RIVERPORT TOWER 961 1991 1997 (3)
RIVERPORT DIST. A RIVERPORT DIST. A 70 1990 1997 (3)
EXPRESS SCRIPTS EXPRESS SCRIPTS
SER.CTR SER.CTR 271 1992 1997 (3)
RIVERPORT DIST. B RIVERPORT DIST. B 61 1989 1997 (3)
- 64 -
<PAGE>
SCRIPTS SCRIPTS - 1998 1998 (3)
ST. LOUIS BUS. CTR. BLDG A 1 1987 1998 (3)
ST. LOUIS BUS. CTR. BLDG B 2 1986 1998 (3)
ST. LOUIS BUS. CTR. BLDG C 1 1986 1998 (3)
ST. LOUIS BUS. CTR. BLDG D 1 1987 1998 (3)
SOUTHPORT I SOUTHPORT I 26 1997 1997 (3)
SOUTHPORT II SOUTHPORT II 23 1978 1997 (3)
SOUTHPORT COMM. CTR. SOUTHPORT COMM. CTR. 38 1978 1997 (3)
TWIN OAKS TWIN OAKS 295 1994 1997 (3)
WARSON COMM. CTR. WARSON COMM. CTR. 98 1987/88/97 1998 (3)
WESTMARK WESTMARK 818 1987 1995 (3)
WESTPORT WESTPORT CTR. I 155 1998 1998 (3)
WESTPORT WESTPORT CTR. II 80 1998 1998 (3)
WESTVIEW PLACE WESTVIEW PLACE 1,020 1988 1995 (3)
BLOOMINGTON, MINNESOTA
- ----------------------
HAMPSHIRE TECH CTR. HAMPSHIRE TECH CTR. 102 1998 1998 (3)
BROOKLYN PARK, MINNESOTA
- ------------------------
7300 NORTHLAND DR. 7300 NORTHLAND DR. 26 1980 1998 (3)
EAGAN, MINNESOTA
- ----------------
EAGANDALE TECH CTR. EAGANDALE TECH CTR. 40 1998 1998 (3)
SILVER BELL COMMONS SILVER BELL COMMONS -
PLYMOUTH, MINNESOTA
- -------------------
PLYMOUTH OFF./TECH CTR PLYMOUTH OFF./TECH CTR 2 1986 1998 (3)
ST. PAUL, MINNESOTA
- -------------------
UNIVERSITY CRSG. UNIVERSITY CRSG. 85 1990 1998 (3)
MINNEAPOLIS, MINNESOTA
- ----------------------
APOLLO DIST. CTR. APOLLO DIST. CTR. 182 1997 1997 (3)
BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 66 1981 1997 (3)
BROADWAY BUS. CTR III BROADWAY BUS. CTR III 11 1983 1998 (3)
BROADWAY BUS. CTR IV BROADWAY BUS. CTR IV 15 1983 1998 (3)
BROADWAY BUS. CTR V BROADWAY BUS. CTR V 12 1983 1998 (3)
BROADWAY BUS. CTR VI BROADWAY BUS. CTR VI 33 1983 1998 (3)
BROADWAY BUS. CTR VII BROADWAY BUS. CTR VII 83 1983 1998 (3)
BLOOMINGTON INDUST. CTR BLOOMINGTON INDUST. CTR 104 1963 1997 (3)
CAHILL BUS. CTR. CAHILL BUS. CTR. 93 1980 1997 (3)
CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 56 1976 1997 (3)
CHANHASSEN I CHANHASSEN I 27 1983 1998 (3)
CHANHASSEN II CHANHASSEN II 33 1986 1998 (3)
CORNERSTONE BUS. CTR. CORNERSTONE BUS. CTR 243 1996 1997 (3)
CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 120 1974 1997 (3)
5219 BLDG. 5219 BLDG. 8 1965 1998 (3)
DECATUR BUS. CTR. DECATUR BUS. CTR. 73 1982 1997 (3)
EAGANDALE CRSG. EAGANDALE CRSG. 9 1998 1998 (3)
EDINA INTERCHANGE I EDINA INTERCHANGE I 112 1995 1997 (3)
EDINA INTERCHANGE II EDINA INTERCHANGE II 72 1980 1997 (3)
EDINA INTERCHANGE III EDINA INTERCHANGE III 81 1981 1997 (3)
EDINA INTERCHANGE IV EDINA INTERCHANGE IV 58 1974 1997 (3)
EDINA INTERCHANGE V EDINA INTERCHANGE V 167 1974 1997 (3)
EDINA INTERCHANGE VI EDINA INTERCHANGE VI 79 1967 1998 (3)
EDINA INTERCHANGE VII EDINA INTERCHANGE VII 11 1970 1998 (3)
ENTERPRISE INDUST. CTR. ENTERPRISE INDUST. CTR. 180 1979 1997 (3)
ENCORE PARK ENCORE PARK 172 1977 1997 (3)
EDINA REALTY EDINA REALTY 29 1965 1998 (3)
GOLDEN HILLS I GOLDEN HILLS I 92 1996 1998 (3)
GOLDEN TRIANGLE GOLDEN TRIANGLE
TECH CTR TECH CTR 121 1997 1998 (3)
PROFESSIONAL PLAZA PROFESSIONAL PLAZA 56 1986 1998 (3)
PROFESSIONAL PLAZA IV PROFESSIONAL PLAZA IV 28 1980 1998 (3)
- 65 -
<PAGE>
CLIFF ROAD INDUST. CTR. CLIFF ROAD INDUST. CTR. 39 1972 1998 (3)
PROFESSIONAL PLAZA III PROFESSIONAL PLAZA III 27 1985 1998 (3)
PROFESSIONAL PLAZA II PROFESSIONAL PLAZA II 35 1984 1998 (3)
LYNDALE COMMONS 1 LYNDALE COMMONS 1 32 1981 1998 (3)
LYNDALE COMMONS 2 LYNDALE COMMONS 2 46 1985 1998 (3)
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 129 1979 1997 (3)
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 150 1979 1997 (3)
LARC INDUST. PARK I LARC INDUST. PARK I 50 1977 1997 (3)
LARC INDUST. PARK II LARC INDUST. PARK II 52 1976 1997 (3)
LARC INDUST. PARK III LARC INDUST. PARK III 23 1980 1997 (3)
LARC INDUST. PARK IV LARC INDUST. PARK IV 16 1980 1997 (3)
LARC INDUST. PARK V LARC INDUST. PARK V 16 1980 1997 (3)
LARC INDUST. PARK VI LARC INDUST. PARK VI 62 1975 1997 (3)
LARC INDUST. PARK VII LARC INDUST. PARK VII 45 1973 1997 (3)
MEDICINE LAKE MEDICINE LAKE
INDUST. CTR INDUST. CTR 191 1970 1997 (3)
MEDICINE LAKE MEDICINE LAKE
PROF. BLDG. PROF. BLDG. 13 1970 1997 (3)
NORMAN CTR. I NORMAN CTR. I 53 1969 1998 (3)
NORMAN CTR. II NORMAN CTR. II 67 1970 1998 (3)
NORMAN CTR. III NORMAN CTR. III 22 1971 1998 (3)
NORMAN CTR. IV NORMAN CTR. IV 48 1967 1998 (3)
NOVARTIS WAREHOUSE NOVARTIS WAREHOUSE 162 1960 1998 (3)
NORTH PLAZA NORTH PLAZA 34 1966 1998 (3)
NORTH STAR TITLE NORTH STAR TITLE 45 1965 1998 (3)
OXFORD INDUST. OXFORD INDUST. 17 1971 1997 (3)
PAKWA BUS. PARK I PAKWA BUS. PARK I 67 1979 1997 (3)
PAKWA BUS. PARK II PAKWA BUS. PARK II 38 1979 1997 (3)
PAKWA BUS. PARK III PAKWA BUS. PARK III 48 1979 1997 (3)
PENN CORP. BLDG. PENN CORP. BLDG. 52 1977 1997 (3)
10801 RED CIRCLE DR. 10801 RED CIRCLE DR. 88 1977 1997 (3)
SANDBURG INDUST. CTR. SANDBURG INDUST. CTR. 75 1973 1997 (3)
SIBLEY INDUST. CTR. I SIBLEY INDUST. CTR. I 59 1973 1997 (3)
SIBLEY INDUST. CTR. II SIBLEY INDUST. CTR. II 35 1972 1997 (3)
SIBLEY INDUST. CTR. III SIBLEY INDUST. CTR. III 43 1967 1997 (3)
SOUTH PLAZA SOUTH PLAZA 35 1966 1998 (3)
JOHNSON BLDG. JOHNSON BLDG. 98 1974 1997 (3)
TRAPP ROAD I TRAPP ROAD I 57 1996 1998 (3)
TRAPP ROAD BLDG II TRAPP ROAD BLDG II 58 1998 1998 (3)
TYROL WEST TYROL WEST 32 1968 1998 (3)
WESTSIDE BUS. PARK WESTSIDE BUS. PARK 213 1987 1997 (3)
YANKEE PLACE YANKEE PLACE 530 1986 1997 (3)
801 ZANE AVE NORTH 801 ZANE AVE NORTH 62 1978 1997 (3)
CHILIES GRND.LSE. CHILIES GRND.LSE. - N/A 1998 (3)
KNOX LND.LSE. KNOX LND.LSE. - N/A 1997 (3)
OLIVE GARDEN GRND.LSE. OLIVE GARDEN GRND.LSE. - N/A 1998 (3)
UNIVERSITY LND.LSE. UNIVERSITY LND.LSE. - N/A 1997 (3)
ELIMINATIONS ELIMINATIONS - N/A N/A N/A
-------
TOTALS 179,887
=======
- 66 -
</TABLE>
DUKE REALTY LIMITED PARTNERSHIP
(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 75% interest in the partnership owning these
buildings. The Partnership exercises significant control over the
partnership, therefore, the buildings are consolidated by the
Partnership with minority interest recognized on the remaining 25%
ownership.
(3) Depreciation of real estate is computed using the straight-line method over
40 years for buildings, 15 years for land improvements and shorter periods
based on lease terms (generally 3 to 10 years) for tenant improvements.
<TABLE>
<CAPTION>
Real Estate Assets Accumulated Depreciation
------------------------------- ---------------------------
1998 1997 1996 1998 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning of
year $1,823,218 $1,181,431 $ 804,164 $116,264 $ 82,207 $ 56,335
Acquisitions 324,043 525,751 213,979 - - -
Construction
costs and
tenant
improvements 251,899 156,745 173,186 - - -
Depreciation
expense - - - 61,414 39,768 27,569
Acquisition
of minority
interest 5,450 19,446 21,627 - - -
--------- --------- --------- ------- ------- ------
2,404,610 1,883,373 1,212,956 177,678 121,975 83,904
Deductions during year:
Cost of real
estate sold (1,329) (32,333) (11,347) (337) (4,224) (586)
Contribution
to Joint
Venture - (27,873) (19,175) - (950) (108)
Other 498 51 (1,003) 2,546 (537) (1,003)
--------- --------- --------- ------- ------- ------
Balance at end
of year $2,403,779 $1,823,218 $1,181,431 $179,887 $116,264 $82,207
========= ========= ========= ======= ======= ======
</TABLE>
- 67 -
<PAGE>
3. EXHIBITS
Certain exhibits required by Item 601 of Regulation S-K have been
filed with previous reports by the Partnership and are herein
incorporated by reference thereto.
NUMBER DESCRIPTION
------- -----------
4.1 Amended and Restated Agreement of Limited Partnership of Duke
Realty Limited Partnership (the"Operating Partnership") is
incorporated herein by reference to Exhibit 10.1 to the
registration statement 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 the Operating Partnership are incorporated
herein by reference to Exhibit 10.2 to the Annual Report on Form
10-K for the year ended December 31, 1995, and the Third
Amendment to Amended and Restated Agreement of Limited
Partnership of the Operating Partnership is incorporated herein
by reference to Exhibit 10 to the Report of the Registrant on
Form 8-K filed August 15, 1996.
4.3 Fourth Amendment dated July 11, 1997 to Amended and Restated
Agreement of Limited Partnership of the Registrant.
4.4 Fifth Amendment dated October 1, 1997 to Amended and Restated
Agreement of Limited Partnership of the Registrant.
4.5 Sixth Amendment dated November 24, 1998, to Amended and Restated
Agreement of Limited Partnership of the Registrant.
4.6 Seventh Agreement dated January 20, 1999, to Amended and Restated
Agreement of Limited Partnership of the Registrant.
4.7 Eight Amendment dated February 18, 1999, to Amended and Restated
Agreement of Limited Partnership of the Registrant.
10.1 Second Amended and Restated Agreement of Limited Partnership of
Duke Realty Services Limited Partnership (the "Services
Partnership") are incorporated herein by reference to Exhibit
10.4 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 Limited 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 the Operating Partnership 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.
- 68 -
<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 to 10.11 to the 1993 Registration Statement.
10.11 1995 Key Employee Stock Option Plan is incorporated herein
by reference to Exhibit 10.13 to the Annual Report on Form 10-K
for the year ended December 31, 1995.
10.12 1995 Dividend Increase Unit Plan is incorporated herein by
reference to Exhibit 10.14 to the Annual Report on Form 10-K for
the year ended December 31, 1995.
10.13 1995 Shareholder Value Plan is incorporated herein by
reference to Exhibit 10.15 to the Annual Report on Form 10-K for
the year ended December 31, 1995.
10.14 1998 Unitholder Rights Agreement is incorporated herein by
reference to Exhibit 7.1 to the General Partner's Form 8-K dated
July 31, 1998.
10.15 1998 Duke Realty Severance Pay Plan.
11.1 Statement of Computation of Earnings to Fixed Changes
11.2 Statement of Computation of Earnings to Debt Service
21. List of Subsidiaries of Registrant.
23. Consent of KPMG LLP.
24. Executed powers of attorney of certain directors.
27. Financial Data Schedule
99.1 Selected Quarterly Financial Information
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 entitled to vote at
the 1999 Annual Meeting of Unitholders.
(B) Reports on Form 8-K
The Partnership filed Form 8-K on February 12, 1999, to file exhibits
in connection with the issuance of unsecured debt.
- 69 -
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 INVESTMENTS, INC.
March 30, 1999 By: /s/ Thomas L. Hefner
--------------------------------
Thomas L. Hefner
Chairman of the Board,
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
Executive Vice President and
Chief Administrative 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/ Thomas L. Hefner * 3/30/99 Chairman of the Board,
----------------------- President and Chief Executive
Thomas L. Hefner Officer and Director
/s/ Darell E. Zink, Jr. * 3/30/99 Executive Vice President
and Chief Financial
----------------------- Officer and Director
Darell E. Zink, Jr.
/s/ Dennis D. Oklak * 3/30/99 Executive Vice President and
----------------------- Chief Administrative Officer
Dennis D. Oklak
- 70 -
<PAGE>
/s/ Geoffrey Button * 3/30/99 Director
-----------------------
Geoffrey Button
/s/ John D. Peterson * 3/30/99 Director
-----------------------
John D. Peterson
/s/ Ngaire E. Cuneo * 3/30/99 Director
-----------------------
Ngaire E. Cuneo
/s/ L. Ben Lytle * 3/30/99 Director
-----------------------
L. Ben Lytle
/s/ Jay J. Strauss * 3/30/99 Director
-----------------------
Jay J. Strauss
/s/ Howard L. Feinsand * 3/30/99 Director
-----------------------
Howard L. Feinsand
/s/ James E. Rogers * 3/30/99 Director
-----------------------
James E. Rogers
/s/ Daniel C. Staton* 3/30/99 Director
-----------------------
Daniel C. Staton
/s/ John W. Wynne * 3/30/99 Director
-----------------------
John W. Wynne
* By Dennis D. Oklak, Attorney-in-Fact /s/
--------------------
Dennis D. Oklak
- 71 -
Exhibit 10.4
FIFTH AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE REALTY LIMITED PARTNERSHIP
--------------------------------------------------------
THIS FIFTH AMENDMENT TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP (this "Amendment") is made
effective as of October 1, 1997 by and among DUKE REALTY
INVESTMENTS, INC. (the "General Partner"), DMI Partnership
("DMI"), Thomas L. Hefner ("Hefner"), LINDBERGH-WARSON
PROPERTIES, INC., a Missouri corporation ("LWP"), MARYVILLE LAND
PARTNERSHIP, a Missouri general partnership ("MLP"), MARYVILLE
CENTRE ASSOCIATES VI, a Missouri general partnership ("MCA VI"),
MARYVILLE CENTRE ASSOCIATES VIII, a Missouri general partnership
("MCA VIII"), EDWARD T. BAUR, Trustee, BIRCH M. MULLINS, Trustee,
and JAMES D. ECKHOFF (LWP, MLP, MCA VI, MCA VIII, Edward T. Baur,
Birch M. Mullins, and James D. Eckhoff are collectively referred
to as the "Baur Group"). All capitalized terms used but not
defined in this Amendment shall have the meanings respectively
assigned to them in the Partnership Agreement (as hereinafter
defined).
RECITALS:
--------
A. The Partnership is governed by that certain Amended
and Restated Agreement of Limited Partnership, dated as of
October 4, 1993, as amended to date (the "Partnership
Agreement").
B. Pursuant to that certain Contribution and Exchange
Agreement by and among Lindbergh-Warson Properties, Inc., D/B/A
Baur Properties, Duke Realty Limited Partnership, and Duke Realty
Investments, Inc. and other parties, dated as of October 1, 1997,
the Baur Group contributed to the capital of the Partnership
certain assets, subject to certain liabilities, in exchange for
ownership interests in the Partnership.
C. The Baur Group wishes to be admitted as Additional
Limited Partners of the Partnership.
D. This Amendment is made pursuant to Section
9.05(a)(iii) and Section 9.05(b) of the Partnership Agreement.
E. The General Partner, DMI and Hefner collectively
own in excess of 90% of the outstanding Units.
F. All of the parties desire to enter into this
Amendment for the purpose of setting forth the admission of the
Baur Group to the Partnership as Additional Limited Partners and
certain amendments to the Partnership Agreement as hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby agree as
follows:
1. The Baur Group is hereby admitted as Additional
Limited Partners of the Partnership.
2. The Partnership Agreement is hereby amended as follows:
SECTION 1.04. DEFINITIONS.
----------------------------
Section 1.04 is hereby amended by inserting the
following new definitions:
"Baur Contribution and Exchange Agreement"
means that certain Contribution and Exchange Agreement by and
among Lindbergh-Warson Properties, Inc., D/B/A Baur
Properties, Duke Realty Limited Partnership, and Duke Realty
Investments, Inc. and other parties dated as of October 1,
1997.
"Baur Group" means, collectively, Lindbergh-
Warson Properties, Inc., Maryville Land Partnership,
Maryville Center Associates VI, Maryville Center Associates
VIII, Edward T. Baur, Trustee, Birch M. Mullins, Trustee and
James D. Eckhoff.
"Baur Units" means one or more Units issued by
the Partnership as a class that: (1) are distributed to the
Baur Group pursuant to section 2.1(c) of the Baur
Contribution and Exchange Agreement; (2) are entitled to the
distribution of certain refinancing proceeds pursuant to
Section 4.15(b); and (3) after the distribution pursuant to
Section 4.15(b), have all the same rights, powers, and
privileges as Units.
"Restructured Mortgage" means that certain
refinancing mortgage in the principal amount of
$20,000,000.00, which is subject to a certain liability
assumption agreement executed by the Baur Group, a copy of
which is attached as an exhibit to the Baur Contribution and
Exchange Agreement.
SECTION 2.03(A). CLASSIFICATION AND OWNERSHIP OF UNITS.
-------------------------------------------------------
Section 2.03(a) is hereby amended by deleting the first
sentence thereof and inserting the following in lieu thereof:
The Units shall all be of a single class unless and until the
Partnership issues Units of one or more additional classes
pursuant to Article IV.
ARTICLE IV. CAPITAL CONTRIBUTIONS, PROFITS AND LOSSES AND DISTRIBUTIONS.
-----------------------------------------------------------------------
Article IV is hereby amended by revising Section 4.03 and adding
Section 4.15 as follows:
SECTION 4.03. DISTRIBUTABLE CASH.
----------------------------------
Section 4.03 is hereby amended by deleting the first sentence thereof
and inserting the following in lieu thereof:
Except as otherwise provided in this Article IV,
distributions of Distributable Cash shall be made when
declared by the General Partner in its sole discretion to the
Partners who are Partners on the Partnership Record Date with
respect to such Distribution in accordance with their
respective Percentage Shares on such Partnership Record Date;
provided that in no event may a Partner receive a
Distribution of Distributable Cash with respect to a Unit if
such Partner is entitled to receive a Distribution out of
such Distributable Cash with respect to a REIT Share for
which such Unit has been exchanged.
<PAGE>
SECTION 4.15. BAUR UNITS.
--------------------------
(a) Pursuant to subsection (a) of Section 4.02,
the Partnership hereby issues Baur Units in the aggregate amount
of 1,925,337 to the Baur Group in exchange for the contribution
to the capital of the Partnership pursuant to the Baur
Contribution and Exchange Agreement of assets with an Agreed
Value in the aggregate of $60,817,142.20. Immediately following
the capital contributions described in this subsection and the
distributions pursuant to subsection (b) of this Section, the
Capital Accounts and the number of Baur Units owned by each
member of the Baur Group is as follows:
<TABLE>
<CAPTION>
Capital Baur
Accounts Units
-------- ------
<S> <C> <C>
Lindbergh-Warson Properties, Inc.: $ 6,424,625.74 303,048
Maryville Land Partnership: 26,523,604.91 1,251,114
Maryville Center Associates VI: 4,340,250.23 204,729
Maryville Center Associates VIII: 1,858,341.54 87,658
Edward T. Baur: 815,245.35 38,455
Birch M. Mullins: 779,383.24 36,763
James D. Eckhoff: 75,691.40 3,570
------------ ---------
TOTAL $40,817,142.41 1,925,337
</TABLE>
(b) Notwithstanding Section 4.03 or any other
provision of this Agreement, immediately after the effective time
of the admission of the Baur Group as Partners, each holder of
Baur Units shall be distributed an amount of cash equal to
$10.38779 for each Baur Unit held, for an aggregate Distribution
of $20,000,000.00, in accordance with the schedule attached
hereto ("Schedule A"). Pursuant to Notice 89-35, 1989-1 C.B.
675, for purposes of applying the interest tracing rules of
Treasury Regulations Section 1.163-8T, the Partnership shall
treat the amount distributed to each member of the Baur Group as
being made from the proceeds of the Restructured Mortgage.
Interest expense on such proceeds shall be allocated in
accordance with the general allocation rules of V.A of Notice 89-
35. Notwithstanding any other provision of this Agreement, the
General Partner shall not be liable for, nor be required to
restore or make a capital contribution on account of, any deficit
Capital Account balance to the extent that the proceeds of any
such restoration or capital contribution would be used to pay the
Restructured Mortgage. Furthermore, in the event that the
General Partner becomes liable for and is required to pay,
directly or indirectly, all or any portion of the Restructured
Mortgage from its separate assets, each member of the Baur Group
shall upon demand pay to the General Partner an amount of cash in
immediately available funds equal to the amount paid by the
General Partner on account of the Restructured Mortgage
multiplied by a fraction, the numerator of which is the number of
Baur Units issued to such member of the Baur Group pursuant to
Section 4.15(a) hereof and the denominator of which is the number
of Baur Units issued to all members of the Baur Group pursuant to
Section 4.15(a) hereof.
3. This Amendment may be executed in any number of
counterparts with the same effect as if all of the parties had
signed the same document. All counterparts shall be construed
together and shall constitute one agreement.
4. Except as amended hereby, the Partnership Agreement
shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the day and year first above written.
DUKE REALTY INVESTMENTS, INC.,
General Partner,
Date: By: /s/
----------------- -----------------------
Thomas L. Hefner
Chief Executive Officer
Date: /s/
---------------- ------------------------
THOMAS L. HEFNER
Date: DMI PARTNERSHIP
----------------- By: Duke Management, Inc., General Partner
By:
-------------------------------
Thomas L. Hefner, President
Date:
----------------- -------------------------------
EDWARD T. BAUR, TRUSTEE
Date:
----------------- -------------------------------
BIRCH M. MULLINS, TRUSTEE
Date:
----------------- -------------------------------
JAMES D. ECKHOFF
LINDBERGH-WARSON PROPERTIES, INC.
Date: By:
------------------ -------------------------------
Attest: Edward T. Baur, Chairman
----------------
James D. Eckhoff
Secretary
<PAGE>
MARYVILLE LAND PARTNERSHIP
By: Lindbergh-Warson Properties, Inc.,
its General Partner
Date: By:
------------------ -------------------------
Attest: Edward T. Baur, Chairman
------------------
James D. Eckhoff
Secretary
MARYVILLE CENTRE ASSOCIATES VI
By: Maryville Land Partnership,
its General Partner
By: Lindbergh-Warson
Properties, Inc., its
General Partner
Date: By:
------------------ -------------------------
Attest: Edward T. Baur, Chairman
------------------
James D. Eckhoff
Secretary
MARYVILLE CENTRE ASSOCIATES VIII
By: Maryville Land Partnership,
its General Partner
By: Lindbergh-Warson Properties, Inc.,
its General Partner
Date: By:
------------------ -------------------------
Attest: Edward T. Baur, Chairman
------------------
James D. Eckhoff
Secretary
<PAGE>
SCHEDULE A
-----------
DISTRIBUTION OF REFINANCING PROCEEDS
TO BAUR GROUP PURSUANT TO SECTION 4.03(b)
OF THE PARTNERSHIP AGREEMENT
----------------------------------------
<TABLE>
<CAPTION>
DISTRIBUTION OF
BAUR GROUP REFINANCING PROCEEDS
- ----------- ---------------------
<S> <C>
EDWARD T. BAUR 399,462.24
BIRCH M. MULLINS 381,890.15
JAMES D. ECKHOFF 37,088.05
MARYVILLE LAND PARTNERSHIP 12,996,306.62
LINDBERGH-WARSON PROPERTIES, INC. 3,148,003.69
MARYVILLE CENTRE ASSOCIATES VI 2,126,680.10
MARYVILLE CENTRE ASSOCIATES VIII 910,569.15
-------------
TOTAL $ 20,000,000.00
=============
</TABLE>
Exhibit 10.5
SIXTH AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE REALTY LIMITED PARTNERSHIP
The undersigned, as the General Partner of Duke Realty
Limited Partnership (the "Partnership"), hereby amends the
Partnership's Amended and Restated Agreement of Limited
Partnership, as heretofore amended (the "Partnership Agreement"),
pursuant to Sections 4.02(b) and 9.05(a)(v) of the Partnership
Agreement, to add a new Section 4.16 to read as provided in
Exhibit A hereto. In all other respects, the Partnership
Agreement shall continue in full force and effect as amended
hereby. Any capitalized terms used in this Amendment and not
defined herein have the meanings given to them in the Partnership
Agreement.
Effective as of 12:01 a.m., November 24, 1998.
DUKE REALTY INVESTMENTS,
INC., as General Partner
By: -------------------
Dennis D. Oklak
Vice President and
Treasurer
<PAGE>
EXHIBIT A
Section 4.16. Series D Preferred Units. Pursuant to
authority granted under Section 4.02(b) of this Agreement, the
General Partner hereby establishes a series of preferred Units
designated the 7.375% Series D Convertible Cumulative Redeemable
Preferred Units (Liquidation Preference $250.00 Per Unit) (the
"Series D Preferred Units") on the following terms:
(a) Number. The number of authorized units of the Series D
Preferred Units shall be 540,000 and shall at all times be equal
to the number of 7.375% Series D Cumulative Convertible
Redeemable Preferred Shares ("Series D Preferred Shares") issued
by the General Partner and then outstanding. Series D Preferred
Units shall be issued only to and held only by the General
Partner.
(b) Relative Seniority. In respect of rights to receive
dividends and to participate in distributions or payments in the
event of any liquidation, dissolution or winding up of the
Partnership, the Series D Preferred Units shall rank senior to
the Units initially established under Section 2.03 and issued
under Sections 4.01 and 4.02(a) ("Common Units") and any other
class or series of Units of the Partnership ranking, as to
Distributions and upon liquidation, junior to the Series D
Preferred Units (collectively, "Junior Units") and on a parity
with the Series A Preferred Units and the Series B Preferred
Units. In the event of Distributions from a Terminating Capital
Transaction pursuant to Section 4.04, Distributions to the holder
of Series D Preferred Units will be made prior to Distributions
to holders of Junior Units or to other Partners in accordance
with Capital Account positive balances pursuant to Section
4.04(d).
(c) Distributions.
(1) The General Partner, as holder of the then
outstanding Series D Preferred Units, shall be entitled to
receive, when and as declared by the General Partner out of
any funds legally available therefor, cumulative
Distributions at an initial rate of 7.375% per Unit per
year, payable in equal amounts of $4.609375 per Unit
quarterly in cash on the last day of each March, June,
September and December or, if not a Business Day (as
hereinafter defined), the next succeeding Business Day
beginning on December 31, 1998 (each such day being
hereinafter called a "Quarterly Distribution Date" and each
period ending on a Quarterly Distribution Date being
hereinafter called a "Distribution Period"). Distributions
shall be payable to the General Partner as holder of the
Series D Preferred Units at the close of business on the
applicable record date (the "Record Date"), which shall be
on such date designated by the Partnership for the payment
of Distributions that is not more than 30 nor less than 10
days prior to such Quarterly Distribution Date. The amount
of any distribution payable for any Distribution Period
shorter than a full Distribution Period shall be prorated
and computed on the basis of a 360-day year of twelve 30-day
months. Distributions on each Series D Preferred Unit shall
accrue and be cumulative from and including the date of
original issue thereof, whether or not (i) Distributions on
such units are earned and declared, (ii) the Partnership has
earnings, or (iii) on any Quarterly Distribution Date there
shall be funds legally available for the payment of
Distributions. Distributions paid on the Series D Preferred
Units in an amount less than the total amount of such
Distributions at the time accrued and payable on such units
shall be allocated pro rata on a per Unit basis among all
such Series D Preferred Units at the time outstanding.
Except as provided in subparagraph (e)(2)(v) and the last
sentence of this paragraph, unless the full cumulative
Distributions on the Series D Preferred Units have been or
contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment
for all past Distribution periods and the then current
Distribution period, no Distributions (other than
Distributions payable solely in Common Units or other units
of Partnership interest ranking junior to the Series D
Preferred Units as to Distributions and upon liquidation)
shall be declared or paid or set aside for payment or other
distribution made upon the Common Units or any other units
of Partnership interest ranking junior to or on a parity
with the Series D Preferred Units as to Distributions or
upon liquidation, nor shall any Common Units, or any other
units of Partnership interest ranking junior to or on a
parity with the Series D Preferred Units as to Distributions
or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or
made available for a sinking fund for the redemption of such
units) by the Partnership or any subsidiary of the
Partnership (except for conversion into or exchange for such
capital units of the Partnership ranking junior to the
Series D Preferred Units as to Distributions and upon
liquidation). If accrued Distributions on the Series D
Preferred Units for all prior Distribution periods have not
been paid in full, then any Distribution declared on the
Series D Preferred Units for any Distribution period and on
any series of preferred units at the time outstanding
ranking on a parity as to the Distributions with the Series
D Preferred Units will be declared ratably in proportion to
accrued and unpaid Distributions on the Series D Preferred
Units and such series of preferred units at the time
outstanding ranking on a parity as to Distributions with the
Series D Preferred Units.
"Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a
day on which banking institutions in New York City are
authorized or required by law, regulation or executive order
to close.
(2) The amount of any Distributions accrued on any
Series D Preferred Units at any Quarterly Distribution Date
shall be the amount of any unpaid Distributions accumulated
thereon, to and including such Quarterly Distribution Date,
whether or not earned or declared, and the amount of
Distributions accrued on any units of Series D Preferred
Units at any date other than a Quarterly Distribution Date
shall be equal to the sum of the amount of any unpaid
Distributions accumulated thereon, to and including the last
preceding Quarterly Distribution Date, whether or not earned
or declared, plus an amount calculated on the basis of the
annual Distribution rate of 7.375% per unit, for the period
after such last preceding Quarterly Distribution Date to and
including the date as of which the calculation is made based
on a 360-day year of twelve 30-day months.
(3) Except as provided in this Section 4.16, the
Series D Preferred Units shall not be entitled to
participate in the earnings or assets of the Partnership.
(4) Any Distribution payment made on the Series D
Preferred Units shall be first credited against the earliest
accrued but unpaid Distribution due with respect to such
units which remains payable.
(5) If, for any taxable year, the Partnership elects
to designate as "capital gain Distributions" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the Distributions paid or made available for the
year to holders of all classes of Units (the "Total
Distributions"), then the portion of the Capital Gains
Amount that shall be allocated to the holders of the Series
D Preferred Units shall be the amount that the total
Distributions paid or made available to the holders of the
Series D Preferred Units for the year bears to the Total
Distributions.
(6) No Distributions on the Series D Preferred Units
shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the
terms and provisions of any agreement of the Partnership,
including any agreement relating to its indebtedness,
prohibit such authorization, payment or setting apart for
payment or provide that such authorization, payment or
setting apart for payment would constitute a breach thereof
or a default thereunder, or if such authorization or payment
shall be restricted or prohibited by law. Notwithstanding
the foregoing, Distributions on the Series D Preferred Units
will accrue whether or not the Partnership has earnings,
whether or not there are funds legally available for the
payment of such Distributions and whether or not such
Distributions are authorized.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Partnership, the holders of
the Series D Preferred Units then outstanding shall be
entitled to receive and to be paid out of the assets of the
Partnership available for distribution to the Partners,
before any payment or distribution shall be made on any
Junior Units, the amount of $250.00 per unit, plus accrued
and unpaid Distributions thereon.
(2) After the payment to the holders of the Series D
Preferred Units of the full preferential amounts provided
for in this Section 4.16, the holders of the Series D
Preferred Units, as such, shall have no right or claim to
any of the remaining assets of the Partnership.
(3) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Partnership, the amounts
payable with respect to the preference value of the Series D
Preferred Units and any other units of the Partnership
ranking as to any such distribution on a parity with the
Series D Preferred Units are not paid in full, the holders
of the Series D Preferred Units and of such other units will
share ratably in any such distribution of assets of the
Partnership in proportion to the full respective preference
amounts to which they are entitled.
(4) Neither the sale, lease, transfer or conveyance of
all or substantially all of the property or business of the
Partnership, nor the merger or consolidation of the
Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the
Partnership, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the
purposes of this Section 4.16.
(e) Redemption by the Partnership.
(1) Optional Redemption. The General Partner shall
cause the Partnership to redeem one Series D Preferred Unit
for each Series D Preferred Share redeemed by the General
Partner, at a price per Series D Preferred Unit (the "Series
D Redemption Price"), payable in cash, of $250.00, together
with all accrued and unpaid Distributions to and including
the date fixed for redemption (the "Series D Redemption
Date"). The Series D Preferred Units have no stated
maturity and will not be subject to any sinking fund or
mandatory redemption provisions except as provided in
subparagraph (e)(3) below.
(2) Procedures of Redemption.
(i) The General Partner shall provide the
Partnership with a copy of any notice of redemption
given by the General Partner pursuant to Section
6.08(e)(2)(i) of its Articles of Incorporation, as
amended. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any
Series D Preferred Units.
(ii) If notice has been mailed by the General
Partner in accordance with Section 6.08(e)(2)(i) of its
Articles of Incorporation, as amended, and provided
that on or before the Series D Redemption Date
specified in such notice all funds necessary for such
redemption shall have been irrevocably set aside by the
Partnership, separate and apart from its other funds in
trust for the pro rata benefit of the holders of the
Series D Preferred Units so called for redemption, so
as to be, and to continue to be available therefor,
then, from and after the Series D Redemption Date,
Distributions on the Series D Preferred Units so called
for redemption shall cease to accumulate, and said
units shall no longer be deemed to be outstanding and
shall not have the status of Series D Preferred Units
and all rights of the General Partner as holder thereof
(except the right to receive the Series D Redemption
Price) shall cease. Upon surrender, in accordance with
such notice, of the certificates for any Series D
Preferred Units so redeemed (properly endorsed or
assigned for transfer, if the Partnership shall so
require and the notice shall so state), such Series D
Preferred Units shall be redeemed by the Partnership at
the Series D Redemption Price. In case fewer than all
the Series D Preferred Units represented by any such
certificate are redeemed, a new certificate or
certificates shall be issued representing the
unredeemed Series D Preferred Units without cost to the
holder thereof.
(iii) Any funds deposited with a bank or trust
company for the purpose of redeeming Series D Preferred
Units shall be irrevocable except that:
(A) the Partnership or the General Partner,
as the case may be, shall be entitled to receive
from such bank or trust company the interest or
other earnings, if any, earned on any money so
deposited in trust; and
(B) any balance of monies so deposited and
unclaimed by the General Partner, as holder of the
Series D Preferred Units entitled thereto at the
expiration of two years from the applicable Series
D Redemption Date shall be repaid, together with
any interest or other earnings earned thereon, to
the Partnership, and after any such repayment, the
General Partner as holder of the units entitled to
the funds so repaid to the Partnership shall look
only to the Partnership for payment without
interest or other earnings.
(iv) No Series D Preferred Units may be redeemed
except from proceeds from the sale or other issuance of
other equity interests of the Partnership.
(v) Unless full accumulated distributions on all
Series D Preferred Units shall have been or
contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for
payment for all past Distribution Periods and the then
current Distribution Period, no Series D Preferred
Units shall be redeemed or purchased or otherwise
acquired directly or indirectly by the Partnership or
any subsidiary of the Partnership (except by conversion
into or exchange for Junior Units) and no preferred
units of the Partnership shall be redeemed unless all
outstanding Series D Preferred Units are simultaneously
redeemed; provided, however, that the foregoing shall
not prevent the redemption of Series D Preferred Units
to preserve the REIT status of the General Partner or
the purchase or acquisition of Series D Preferred Units
pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series D
Preferred Units. Notwithstanding the foregoing, in the
case of a Redemption Request (as defined below) which
has not been fulfilled at the time the General Partner
gives notice of its election to redeem all or any
Series D Preferred Shares, the Series D Preferred Units
which are the subject of such pending Redemption
Request shall be redeemed prior to any other Series D
Preferred Units.
(3) Optional Redemption Upon the Death of a Holder of
Series D Preferred Shares.
(i) Commencing on December 31, 1998, and on the
last day of each March, June, September and December
thereafter (each, a "Holder Redemption Date"), the
Partnership will, upon notice from the General Partner
that it is required to redeem Series D Preferred Shares
as a result of the death of any holder of the Series D
Preferred Shares or depositary shares representing
Series D Preferred Shares, the Partnership will redeem
a number of Series D Preferred Units equal to the
number of Series D Preferred Shares redeemed by the
General Partner for cash or Common Units, at the option
of the General Partner. The Partnership shall redeem
the Series D Preferred Units subject to the limitations
that the Partnership will not be obligated to redeem
(A) more than16,200 Series D Preferred Units in any one
year; and (B) more than 100 Series D Preferred Units
per deceased owner of depositary shares per year (each
a "Redemption Limitation" and together the "Redemption
Limitations").
(ii) A Redemption Request which exceeds one or
both Redemption Limits will be held for redemption in
subsequent years until redeemed in full. A Redemption
Request will be applied in the order of receipt by the
transfer agent to successive years, regardless of the
number of years required to redeem such units.
(iii) At the General Partner's option, the
Series D Preferred Units may be redeemed for either
cash or Common Units. If such units are redeemed by
the Partnership for cash, the redemption price of such
units is $250.00 per Series D Preferred Unit (plus all
accrued and unpaid Distributions). If, however, such
units are redeemed by the Partnership for Common Units,
the redemption price will be $252.50 per Series D
Preferred Unit and the number of Common Units received
will be based on the closing price of the General
Partners common stock on the day prior to the Holder
Redemption Date (plus all accrued and unpaid
Distributions, which shall be paid in cash). No
fractional Common Units will be issued. In lieu of any
fractional units, the Partnership will pay cash in an
amount equal to the product of such fraction multiplied
by the closing price of one share of the General
Partner's common stock on the day prior to the Holder
Redemption Date.
(f) Voting Rights. Except as required by law, and as set
forth below, the holders of the Series D Preferred Units shall
not be entitled to vote at any meeting for any purpose or
otherwise to participate in any action taken by the Partnership
or the Partners, or to receive notice of any meeting of Partners.
(1) So long as any Series D Preferred Units remain
outstanding, the Partnership will not, without the
affirmative vote or consent of the holders of at least two-
thirds of the Series D Preferred Units outstanding at the
time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class),
(i) authorize or create, or increase the authorized or
issued amount of, any class or series of units ranking prior
to the Series D Preferred Units with respect to the payment
of Distributions or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any
authorized units of the Partnership into such units, or
create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any
such units; or (ii) amend, alter or repeal the provisions of
the Partnership's Amended and Restated Agreement of Limited
Partnership, as amended, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of
the Series D Preferred Units or the holders thereof;
provided, however, with respect to the occurrence of any of
the Events set forth in (ii) above, so long as the Series D
Preferred Units remain outstanding with the terms thereof
materially unchanged, taking into account that upon the
occurrence of an Event, the Partnership may not be the
surviving entity, the occurrence of any such Event shall not
be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Series
D Preferred Units and provided further that (x) any increase
in the amount of the authorized preferred units or the
creation or issuance of any other series of preferred units,
or (y) any increase in the amount of authorized Series D
Preferred Units or any other preferred units, in each case
ranking on a parity with or junior to the Series D Preferred
Units with respect to payment of Distributions or the
distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at
or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all
outstanding Series D Preferred Units shall have been
redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
(2) On each matter submitted to a vote of the holders
of Series D Preferred Units in accordance with this Section
4.16, or as otherwise required by law, each Series D
Preferred Unit shall be entitled to ten (10) votes, each of
which ten (10) votes may be directed separately by the
holder thereof.
(g) Conversion. The General Partner, as holder of the
Series D Preferred Units, shall have the right to convert all or
a portion of such Series D Preferred Units Common Units, as
follows:
(1) Upon notice to the Partnership by the General
Partner that a holder of depositary shares representing
Series D Preferred Shares has elected to convert such
depositary shares into common stock of the General Partner,
the General Partner shall have the right to convert a number
of Series D Preferred Units equal to the number of Series D
Preferred Shares so converted into fully paid and
non-assessable Common Units by surrendering such Series D
Preferred Units to be converted, such surrender to be made
in the manner provided in subsection (g)(2); provided,
however, that the right to convert units called for
redemption pursuant to subsection (e)(1) shall terminate at
the close of business on the Redemption Date fixed for such
redemption, unless the Partnership shall default in making
payment of the Common Units and any cash payable upon such
redemption under subsection (e)(1) hereof.
(2) (i) In order to exercise the conversion right,
the General Partner shall surrender the certificate
representing such Series D Preferred Unit, if certificated,
duly endorsed or assigned to the Partnership or in blank, to
the Partnership.
(ii) The General Partner as holder of the Series D
Preferred Units at the close of business on a distribution
payment record date shall be entitled to receive the
distribution payable on such units on the corresponding
Distribution Payment Date notwithstanding the conversion
thereof following such distribution payment record date and
prior to such Distribution Payment Date. However, Series D
Preferred Units surrendered for conversion during the
period between the close of business on any distribution
payment record date and the opening of business on the
corresponding Distribution Payment Date (except units
converted after the issuance of notice of redemption with
respect to a redemption date during such period or
coinciding with such Distribution Payment Date, such Series
D Preferred Units being entitled to such distribution on the
Distribution Payment Date) must be accompanied by payment of
an amount equal to the distribution payable on such Series D
Preferred Units on such Distribution Payment Date. The
General Partner as holder of Series D Preferred Units on a
distribution payment record date which are tendered for
conversion into Common Units on such Distribution Payment
Date will receive the distribution payable by the
Partnership on such Series D Preferred Units on such date,
and the General Partner as converting holder need not
include payment of the amount of such distribution upon
surrender of Series D Preferred Units for conversion. Except
as provided above, the Partnership shall make no payment or
allowance for unpaid distributions, whether or not in
arrears, on converted Series D Preferred Units or for
distributions on the Common Units issued upon such
conversion.
(iii) As promptly as practicable after the
surrender of Series D Preferred Units as aforesaid, the
Partnership shall issue and shall deliver to the General
Partner a certificate or certificates for the number of full
Common Units issuable upon the conversion of such Series D
Preferred Units in accordance with the provisions of this
subparagraph (g), and any fractional interest in respect of
a Common Unit arising upon such conversion shall be settled
as provided in subsection (g)(3).
(iv) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the
date on which the Series D Preferred Units shall have been
surrendered and such notice (and if applicable, payment of
an amount equal to the distribution payable on such units)
received by the Partnership as aforesaid, and the General
Partner shall be deemed to have become the holder of record
of the Common Units represented thereby at such time on such
date, unless the unit transfer books of the Partnership
shall be closed on that date, in which event the General
Partner shall be deemed to have become such holder of record
at the close of business on the next succeeding day on which
such unit transfer books are open.
(3) No fractional units of scrip representing
fractions of Common Units shall be issued upon conversion of
the Series D Preferred Units. Instead of any fractional
interest in a Common Unit that would otherwise be
deliverable upon the conversion of Series D Preferred Unit,
the Partnership shall pay to the General Partner as holder
of such unit an amount in cash based upon the Current Market
Price (as defined in Section 6.08(g)(3) of the General
Partner's Articles of Incorporation, as amended) of the
General Partner's common stock on the Trading Day (as
defined in Section 6.08(g)(3) of the General Partner's
Articles of Incorporation, as amended) immediately preceding
the date of conversion. If more than one Series D Preferred
Unit shall be surrendered for conversion at one time, the
number of full Common Units issuable upon conversion thereof
shall be as specified by the General Partner.
(4) The number of Series D Preferred Units shall be
increased or decreased by split, combination or otherwise in
the same manner as the Series D Preferred Shares so that the
number of authorized Series D Preferred Units will at all
times be equal to the number of authorized Series D
Preferred Shares and number of outstanding Series D
Preferred Units will at all times be equal to the number of
outstanding Series D Preferred Shares.
Exhibit 10.6
SEVENTH AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE REALTY LIMITED PARTNERSHIP
The undersigned, as the General Partner of Duke Realty
Limited Partnership (the "Partnership"), hereby amends the
Partnership's Amended and Restated Agreement of Limited
Partnership, as heretofore amended (the "Partnership Agreement"),
pursuant to Sections 4.02(b) and 9.05(a)(v) of the Partnership
Agreement, to add a new Section 4.17 to read as provided in
Exhibit A hereto. In all other respects, the Partnership
Agreement shall continue in full force and effect as amended
hereby. Any capitalized terms used in this Amendment and not
defined herein have the meanings given to them in the Partnership
Agreement.
Effective as of 12:01 a.m., January 20, 1999.
DUKE REALTY INVESTMENTS,
INC., as General Partner
By:
------------------------
Dennis D. Oklak
Executive Vice
President, Chief
Administrative
Officer and
Treasurer
<PAGE>
EXHIBIT A
Section 4.17. Series E Preferred Units. Pursuant to
authority granted under Section 4.02(b) of this Agreement, the
General Partner hereby establishes a series of preferred Units
designated the 8.25% Series E Cumulative Redeemable Preferred
Units (Liquidation Preference $250.00 Per Unit) (the "Series E
Preferred Units") on the following terms:
(a) Number. The number of authorized units of the Series E
Preferred Units shall be 460,000 and shall at all times be equal
to the number of 8.25% Series E Cumulative Redeemable Preferred
Shares ("Series E Preferred Shares") issued by the General
Partner and then outstanding. Series E Preferred Units shall be
issued only to and held only by the General Partner.
(b) Relative Seniority. In respect of rights to receive
dividends and to participate in distributions or payments in the
event of any liquidation, dissolution or winding up of the
Partnership, the Series E Preferred Units shall rank senior to
the Units initially established under Section 2.03 and issued
under Sections 4.01 and 4.02(a) ("Common Units") and any other
class or series of Units of the Partnership ranking, as to
Distributions and upon liquidation, junior to the Series E
Preferred Units (collectively, "Junior Units") and on a parity
with the Series A Preferred Units and the Series B Preferred
Units. In the event of Distributions from a Terminating Capital
Transaction pursuant to Section 4.04, Distributions to the holder
of Series E Preferred Units will be made prior to Distributions
to holders of Junior Units or to other Partners in accordance
with Capital Account positive balances pursuant to Section
4.04(d).
(c) Distributions.
(1) The General Partner, as holder of the then
outstanding Series E Preferred Units, shall be entitled to
receive, when and as declared by the General Partner out of
any funds legally available therefor, cumulative
Distributions at an initial rate of 8.25% per Unit per year,
payable in equal amounts of $5.15625 per Unit quarterly in
cash on the last day of each March, June, September and
December or, if not a Business Day (as hereinafter defined),
the next succeeding Business Day beginning on March 31, 1999
(each such day being hereinafter called a "Quarterly
Distribution Date" and each period ending on a Quarterly
Distribution Date being hereinafter called a "Distribution
Period"). Distributions shall be payable to the General
Partner as holder of the Series E Preferred Units at the
close of business on the applicable record date (the "Record
Date"), which shall be on such date designated by the
Partnership for the payment of Distributions that is not
more than 30 nor less than 10 days prior to such Quarterly
Distribution Date. The amount of any distribution payable
for any Distribution Period shorter than a full Distribution
Period (including the first Dividend Period) shall be
prorated and computed on the basis of a 360-day year of
twelve 30-day months. Distributions on each Series E
Preferred Unit shall accrue and be cumulative from and
including the date of original issue thereof, whether or not
(i) Distributions on such units are earned and declared,
(ii) the Partnership has earnings, or (iii) on any Quarterly
Distribution Date there shall be funds legally available for
the payment of Distributions. Distributions paid on the
Series E Preferred Units in an amount less than the total
amount of such Distributions at the time accrued and payable
on such units shall be allocated pro rata on a per Unit
basis among all such Series E Preferred Units at the time
outstanding. Except as provided in subparagraph (e)(2)(v)
and the last sentence of this paragraph, unless the full
cumulative Distributions on the Series E Preferred Units
have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set
apart for payment for all past Distribution Periods and the
then current Distribution Period, no Distributions (other
than Distributions payable solely in Common Units or other
units of Partnership interest ranking junior to the Series E
Preferred Units as to Distributions and upon liquidation)
shall be declared or paid or set aside for payment or other
Distribution made upon the Common Units or any other units
of Partnership interest ranking junior to or on a parity
with the Series E Preferred Units as to Distributions or
upon liquidation, nor shall any Common Units, or any other
units of Partnership interest ranking junior to or on a
parity with the Series E Preferred Units as to Distributions
or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or
made available for a sinking fund for the redemption of such
units) by the Partnership or any subsidiary of the
Partnership (except for conversion into or exchange for such
capital units of the Partnership ranking junior to the
Series E Preferred Units as to Distributions and upon
liquidation). If accrued Distributions on the Series E
Preferred Units for all prior Distribution Periods have not
been paid in full, then any Distribution declared on the
Series E Preferred Units for any Distribution Period and on
any series of preferred units at the time outstanding
ranking on a parity as to the Distributions with the Series
E Preferred Units will be declared ratably in proportion to
accrued and unpaid Distributions on the Series E Preferred
Units and such series of preferred units at the time
outstanding ranking on a parity as to Distributions with the
Series E Preferred Units.
"Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a
day on which banking institutions in New York City are
authorized or required by law, regulation or executive order
to close.
(2) The amount of any Distributions accrued on any
Series E Preferred Units at any Quarterly Distribution Date
shall be the amount of any unpaid Distributions accumulated
thereon, to and including such Quarterly Distribution Date,
whether or not earned or declared, and the amount of
Distributions accrued on any units of Series E Preferred
Units at any date other than a Quarterly Distribution Date
shall be equal to the sum of the amount of any unpaid
Distributions accumulated thereon, to and including the last
preceding Quarterly Distribution Date, whether or not earned
or declared, plus an amount calculated on the basis of the
annual Distribution rate of 8.25% per unit, for the period
after such last preceding Quarterly Distribution Date to and
including the date as of which the calculation is made based
on a 360-day year of twelve 30-day months.
(3) Except as provided in this Section 4.17, the
Series E Preferred Units shall not be entitled to
participate in the earnings or assets of the Partnership.
(4) Any Distribution payment made on the Series E
Preferred Units shall be first credited against the earliest
accrued but unpaid Distribution due with respect to such
units which remains payable.
(5) If, for any taxable year, the Partnership elects
to designate as "capital gain Distributions" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the Distributions paid or made available for the
year to holders of all classes of Units (the "Total
Distributions"), then the portion of the Capital Gains
Amount that shall be allocated to the holders of the Series
E Preferred Units shall be the amount that the total
Distributions paid or made available to the holders of the
Series E Preferred Units for the year bears to the Total
Distributions.
(6) No Distributions on the Series E Preferred Units
shall be authorized by the General Partner or be paid or set
apart for payment by the Partnership at such time as the
terms and provisions of any agreement of the Partnership,
including any agreement relating to its indebtedness,
prohibit such authorization, payment or setting apart for
payment or provide that such authorization, payment or
setting apart for payment would constitute a breach thereof
or a default thereunder, or if such authorization or payment
shall be restricted or prohibited by law. Notwithstanding
the foregoing, Distributions on the Series E Preferred Units
will accrue whether or not the Partnership has earnings,
whether or not there are funds legally available for the
payment of such Distributions and whether or not such
Distributions are authorized.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Partnership, the holders of
the Series E Preferred Units then outstanding shall be
entitled to receive and to be paid out of the assets of the
Partnership available for distribution to the Partners,
before any payment or distribution shall be made on any
Junior Units, the amount of $250.00 per Series E Preferred
Unit, plus accrued and unpaid Distributions thereon.
(2) After the payment to the holders of the Series E
Preferred Units of the full preferential amounts provided
for in this Section 4.17, the holders of the Series E
Preferred Units, as such, shall have no right or claim to
any of the remaining assets of the Partnership.
(3) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Partnership, the amounts
payable with respect to the preference value of the Series E
Preferred Units and any other units of the Partnership
ranking as to any such distribution on a parity with the
Series E Preferred Units are not paid in full, the holders
of the Series E Preferred Units and of such other units will
share ratably in any such distribution of assets of the
Partnership in proportion to the full respective preference
amounts to which they are entitled.
(4) Neither the sale, lease, transfer or conveyance of
all or substantially all of the property or business of the
Partnership, nor the merger or consolidation of the
Partnership into or with any other entity or the merger or
consolidation of any other entity into or with the
Partnership, shall be deemed to be a dissolution,
liquidation or winding up, voluntary or involuntary, for the
purposes of this Section 4.17.
(e) Redemption by the Partnership.
(1) Optional Redemption. The General Partner shall
cause the Partnership to redeem one Series E Preferred Unit
for each Series E Preferred Share redeemed by the General
Partner, at a price per Series E Preferred Unit (the "Series
E Redemption Price"), payable in cash, of $250.00, together
with all accrued and unpaid Distributions to and including
the date fixed for redemption (the "Series E Redemption
Date"). The Series E Preferred Units have no stated
maturity and will not be subject to any sinking fund or
mandatory redemption provisions.
(2) Procedures of Redemption.
(i) The General Partner shall provide the
Partnership with a copy of any notice of redemption
given by the General Partner pursuant to Section
6.09(e)(2)(i) of its Articles of Incorporation, as
amended. No failure to give such notice or any defect
therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any
Series E Preferred Units.
(ii) If notice has been mailed by the General
Partner in accordance with Section 6.09(e)(2)(i) of its
Articles of Incorporation, as amended, and provided
that on or before the Series E Redemption Date
specified in such notice all funds necessary for such
redemption shall have been irrevocably set aside by the
Partnership, separate and apart from its other funds in
trust for the pro rata benefit of the holders of the
Series E Preferred Units so called for redemption, so
as to be, and to continue to be available therefor,
then, from and after the Series E Redemption Date,
Distributions on the Series E Preferred Units so called
for redemption shall cease to accumulate, and said
units shall no longer be deemed to be outstanding and
shall not have the status of Series E Preferred Units
and all rights of the General Partner as holder thereof
(except the right to receive the Series E Redemption
Price) shall cease. Upon surrender, in accordance with
such notice, of the certificates for any Series E
Preferred Units so redeemed (properly endorsed or
assigned for transfer, if the Partnership shall so
require and the notice shall so state), such Series E
Preferred Units shall be redeemed by the Partnership at
the Series E Redemption Price. In case fewer than all
the Series E Preferred Units represented by any such
certificate are redeemed, a new certificate or
certificates shall be issued representing the
unredeemed Series E Preferred Units without cost to the
holder thereof.
(iii) Any funds deposited with a bank or trust
company for the purpose of redeeming Series E Preferred
Units shall be irrevocable except that:
(A) the Partnership or the General Partner,
as the case may be, shall be entitled to receive
from such bank or trust company the interest or
other earnings, if any, earned on any money so
deposited in trust; and
(B) any balance of monies so deposited and
unclaimed by the General Partner, as holder of the
Series E Preferred Units entitled thereto at the
expiration of two years from the applicable Series
E Redemption Date shall be repaid, together with
any interest or other earnings earned thereon, to
the Partnership, and after any such repayment, the
General Partner as holder of the units entitled to
the funds so repaid to the Partnership shall look
only to the Partnership for payment without
interest or other earnings.
(iv) No Series E Preferred Units may be redeemed
except from proceeds from the sale or other issuance of
other equity interests of the Partnership.
(v) Unless full accumulated distributions on all
Series E Preferred Units shall have been or
contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for
payment for all past Distribution Periods and the then
current Distribution Period, no Series E Preferred
Units shall be redeemed or purchased or otherwise
acquired directly or indirectly by the Partnership or
any subsidiary of the Partnership (except by conversion
into or exchange for Junior Units) and no preferred
units of the Partnership shall be redeemed unless all
outstanding Series E Preferred Units are simultaneously
redeemed; provided, however, that the foregoing shall
not prevent the redemption of Series E Preferred Units
to preserve the REIT status of the General Partner or
the purchase or acquisition of Series E Preferred Units
pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Series E
Preferred Units. Notwithstanding the foregoing, in the
case of a Redemption Request (as defined below) which
has not been fulfilled at the time the General Partner
gives notice of its election to redeem all or any
Series E Preferred Shares, the Series E Preferred Units
which are the subject of such pending Redemption
Request shall be redeemed prior to any other Series E
Preferred Units.
(f) Voting Rights. Except as required by law, and as set
forth below, the holders of the Series E Preferred Units shall
not be entitled to vote at any meeting for any purpose or
otherwise to participate in any action taken by the Partnership
or the Partners, or to receive notice of any meeting of Partners.
(1) So long as any Series E Preferred Units remain
outstanding, the Partnership will not, without the
affirmative vote or consent of the holders of at least two-
thirds of the Series E Preferred Units outstanding at the
time, given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class),
(i) authorize or create, or increase the authorized or
issued amount of, any class or series of units ranking prior
to the Series E Preferred Units with respect to the payment
of Distributions or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any
authorized units of the Partnership into such units, or
create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any
such units; or (ii) amend, alter or repeal the provisions of
the Partnership's Amended and Restated Agreement of Limited
Partnership, as amended, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of
the Series E Preferred Units or the holders thereof;
provided, however, with respect to the occurrence of any of
the Events set forth in (ii) above, so long as the Series E
Preferred Units remain outstanding with the terms thereof
materially unchanged, taking into account that upon the
occurrence of an Event, the Partnership may not be the
surviving entity, the occurrence of any such Event shall not
be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Series
E Preferred Units and provided further that (x) any increase
in the amount of the authorized preferred units or the
creation or issuance of any other series of preferred units,
or (y) any increase in the amount of authorized Series E
Preferred Units or any other preferred units, in each case
ranking on a parity with or junior to the Series E Preferred
Units with respect to payment of Distributions or the
distribution of assets upon liquidation, dissolution or
winding up, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at
or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all
outstanding Series E Preferred Units shall have been
redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
(2) On each matter submitted to a vote of the holders
of Series E Preferred Units in accordance with this Section
4.17, or as otherwise required by law, each Series E
Preferred Unit shall be entitled to ten (10) votes, each of
which ten (10) votes may be directed separately by the
holder thereof.
Exhibit 10.7
EIGHTH AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE REALTY LIMITED PARTNERSHIP
In consideration of the issuance by Duke Realty Limited
Partnership (the "Partnership") to Towne Investment Co., an Ohio
limited partnership ("TIC") of Units in the Partnership as
memorialized in TIC's execution of an Acknowledgement by
Distributee on January 1, 1994, TIC has agreed to indemnify Duke
Realty Investments, Inc., an Indiana corporation (the "General
Partner") from and against certain recourse indebtedness of the
Partnership effective as of the date on which non-recourse
indebtedness secured by the contribution of property to the
Partnership by TIC's predecessor-in-interest was repaid.
Accordingly, the undersigned, as the General Partner and Partners
(including TIC and the General Partner) holding more than ninety
percent (90%) of the outstanding Units of Duke Realty Limited
Partnership, hereby amend the Partnership's Amended and Restated
Agreement of Limited Partnership, as heretofore amended (the
"Partnership Agreement"), pursuant to Section 9.05(b) of the
Partnership Agreement, to add a new Section 3.15 to read as
provided in Exhibit A hereto. In all other respects, the
Partnership Agreement shall continue in full force and effect as
amended hereby. Any capitalized terms used in this Amendment and
not defined herein have the meanings given to them in the
Partnership Agreement.
This Amendment may be executed in any number of counterparts
and by separate signature pages, and all of such counterparts and
signature pages shall for all purposes constitute an agreement
binding on the parties hereto notwithstanding that all parties
are not signatory to the same counterpart or signature page.
This Amendment shall in all respects be governed by and
construed in accordance with the laws of the State of Indiana.
Executed as of February 18, 1999 but effective as of
12:01 a.m., September 30, 1998.
DUKE REALTY INVESTMENTS, INC., as
General Partner, as a holder of
Units and as attorney-in-fact
pursuant to Section 9.19 of the
Partnership Agreement for all
holders of Units who have consented
in writing to this Amendment
By:
------------------------------------
Dennis D. Oklak
Executive Vice President,
Chief Administrative Officer
and Treasurer
DMI PARTNERSHIP
By:
Duke Management, Inc., general
partner
By:
---------------------------
Darell E. Zink, Jr.
Executive Vice President, Chief
Financial Officer and Secretary
TOWNE INVESTMENT CO., an Ohio limited
partnership
By:
---------------------------------
Neil K. Bortz, General Partner
By:
---------------------------------
Marvin Rosenberg, General Partner
<PAGE>
EXHIBIT A
SECTION 3.15. INDEMNIFICATION OF CERTAIN RECOURSE DEBT.
(a) Definitions. As used in this Section 3.15, the following
terms shall have the meanings indicated:
"Claim Percentage" for TIC means 100%; provided, however,
in the event any other limited partner of the Partnership is
an indemnitor with respect to an Indemnity Claim, the Claim
Percentage for TIC with respect to such Indemnity Claim
shall be the percentage determined by dividing TIC's Maximum
Liability by the maximum liability with respect to such
Indemnity Claim of all indemnitors of the related Recourse
Debt.
"Indemnity Claim" means any demand made to the General
Partner by any holder of all or any part of the Recourse
Debt for payment of all or any part thereof.
"Indemnity Claim Amount" means, with respect to an
Indemnity Claim, the amount determined as prescribed in
subsection (c)(iv) of this section.
"Indemnity Credit" for TIC means, at any time, all
payments made prior to such time by TIC under subsection (b)
of this section.
"Maximum Liability" for TIC means $3,700,000.
"Recourse Debt" means any and all indebtedness of the
Partnership not evidenced by a non-recourse note.
"TIC" means Towne Investment Co., an Ohio limited
partnership, which is a Limited Partner as of September 30,
1998.
(b) Indemnification. Upon and subject to the terms and
provisions of this Section 3.15, TIC agrees to indemnify the
General Partner from and against liability for a portion of each
Indemnity Claim Amount (regardless of whether actually paid by
the General Partner) equal to TIC's Claim Percentage of the
Indemnity Claim Amount, subject, however, to the limitation that
the maximum amount required at anytime to be indemnified
hereunder by TIC shall not exceed the TIC Maximum Liability
reduced (not below zero) by TIC's Indemnity Credit at such time.
(c) Indemnification Procedure.
(i) The General Partner shall not pay any portion
of any Recourse Debt prior to (A) giving TIC written
notice of the related Indemnity Claim and the
opportunity to defend against the Indemnity Claim as
provided in this subsection (c) and (B) the
determination of the related Indemnity Claim Amount as
provided in subsection (c)(iv) below.
(ii) Whenever an Indemnity Claim arises, the General
Partner shall promptly give written notice to TIC
setting forth in reasonable detail, to the extent then
available, the facts concerning the Indemnity Claim.
(iii) TIC shall be entitled, at its sole expense, to
assume the entire defense of each Indemnity Claim with
counsel selected by TIC.
(iv) If TIC chooses to defend against an Indemnity
Claim, the related Indemnity Claim Amount shall be the
amount specified in a written settlement agreement with
the claimant that is approved in writing by the
Indemnitors or in an order of a court of competent
jurisdiction that is not further appealable. If TIC
chooses not to defend against an Indemnity Claim, the
related Indemnity Claim Amount shall be the amount of
the Indemnity Claim specified in a written settlement
agreement between the General Partner and the claimant
or in an order of a court of competent jurisdiction
that is not further appealable.
(d) Partnership Indemnification of TIC. Subject to subsection
(e) of this section, the Partnership shall indemnify TIC against
all amounts required to be paid by TIC under the terms of this
Section 3.15.
(e) Limitation on the Partnership Obligations. TIC agrees for
the benefit of the General Partner, and any successor general
partner of the Partnership, that enforcement by TIC of (i) the
Partnership's indemnity obligation under subsection (d) or (ii)
the Partnership's obligation under any other document to assume,
pay, or indemnify against any Recourse Debt shall be subject to
the limitation that (A) no Partner of the Partnership shall be
personally liable to TIC for performance by the Partnership of
any such obligation, (B) TIC shall not be entitled to seek or
obtain any personal money or other judgment against any Partner
of the Partnership for the Partnership's default in performance
of any such obligation, and (C) any such judgment obtained
against the Partnership shall only be enforceable by TIC against
the property and assets of the Partnership.
(f) Assumption of TIC's Obligations. Upon the distribution of
all the Units held by TIC to its partners, the obligations of TIC
pursuant to this Section 3.15 shall be assigned to and assumed by
the applicable partners in proportion to the number of Units
distributed to each such partner, and each such partner shall
become an indemnitor under this Section 3.15, and all obligations
of TIC that are not then due and payable shall terminate and TIC
shall be deemed no longer subject to this Section 3.15. Except
as provided in this subsection (f), TIC shall not have the right
to assign its obligations under this Section 3.15 without the
express written consent of the General Partner.
(g) Termination of Indemnitor's Obligations. This Section
3.15 shall continue in full force and effect until the first to
occur of the following:
(i) The death of an individual indemnitor
(including an assignee of any indemnitor), at which
time all obligations of the deceased individual
indemnitor (a "Terminated Indemnitor") under this
Section 3.15 that are not then due and payable shall
terminate, and the Terminated Indemnitor shall be
deemed no longer subject to this Section 3.15.
Following termination with respect to a Terminated
Indemnitor, this Section 3.15 shall remain effective
and enforceable with respect to all other indemnitors
then subject to this Section 3.15, and all allocations
of obligations under this Section 3.15 based upon the
total Claim Percentages held by indemnitors or a
specified group of indemnitors shall thereafter be
made.
(ii) Upon the exchange pursuant to Section 7.07 of
all the Units held by TIC or its successors, at which
time all obligations of the indemnitors under this
Section 3.15 that are not then due and payable shall
terminate.
(h) Notices. All notices, demands, or other communications
given pursuant to this section shall be in writing and shall be
sufficiently given if delivered by courier (including overnight
delivery service) or sent by registered or certified mail, first
class, postage prepaid, or by telecopy addressed as follows:
(i) If to the General Partner or the Partnership, to:
Duke Realty Investments, Inc.
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 45240
Telecopier No. (317) 808-6790
Attention: John R. Gaskin, Vice President and General Counsel
(ii) If to TIC, to:
Towne Investment Co.
1055 St. Paul Place
Cincinnati, Ohio 45202
Telecopier No. (513) 345-6975
Attention: Neil K. Bortz and Marvin Rosenberg
or such other address with respect to any party subject to this
section as such party may, from time to time, notify (as provided
above) the General Partner and the other parties subject hereto.
Any such notice, demand, or communication shall be deemed to have
been given (A) if so mailed, as of the close of the third
business day following the date so mailed, and (B) if personally
delivered or otherwise sent as provided above, on the date
received
Exhibit 10.18
DUKE REALTY
SEVERANCE PAY PLAN
ARTICLE I
INTRODUCTION
1.1. Purpose. The Duke Realty Severance Pay Plan (the
"Plan") is designed to provide severance benefits to selected
officers and key employees of the Company and its Subsidiaries.
1.2. Effective Date. The Effective Date of the Plan is
January 1, 1998.
1.3. Administration. The Plan shall be administered by the
Committee. The Committee, from time to time, may adopt any rule
or procedure it deems necessary or desirable for the proper and
efficient administration of the Plan, provided it is consistent
with the terms of the Plan. The decision of a majority of the
Committee members shall constitute the decision of the Committee.
The Committee's determinations and interpretations with respect
to the Plan shall be final and binding on all parties. Any
notice or document required to be given to or filed with the
Committee will be properly given or filed if delivered or mailed
by certified mail, postage prepaid, to the Committee at 8888
Keystone Crossing, Suite 1200, Indianapolis, Indiana 46240-2182.
1.4. Definitions. For purposes of this Plan, unless a
different meaning is clearly required by the context:
(a) "Board of Directors" means the board of directors
of the Company.
(b) "Change in Control of the Company" means (i) any
merger, consolidation or similar transaction which involves the
Company and in which persons who are the shareholders of the
Company immediately prior to such transaction own, immediately
after such transaction, shares of the surviving or combined
entity which possess voting rights equal to or less than fifty
percent (50%) of the voting rights of all shareholders of such
entity, determined on a fully diluted basis; (ii) any sale,
lease, exchange, transfer or other disposition of all or any
substantial part of the consolidated assets of the Company; (iii)
any tender, exchange, sale or other disposition (other than
disposition of the stock of the Company or any Subsidiary in
connection with bankruptcy, insolvency, foreclosure, receivership
or other similar transactions) or purchases (other than purchases
by the Company or any Company sponsored employee benefit plan, or
purchases by members of the board of directors of the Company or
any Subsidiary) of shares which represent more than twenty-five
percent (25%) of the voting power of the Company or any
Subsidiary; (iv) during any period of two (2) consecutive years,
individuals who at the date of the adoption of the Plan
constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the election of
each director at the beginning of such period has been approved
by directors representing at least a majority of the directors
then in office who were directors at the commencement of such two
(2) year period; (v) a majority of the Board of Directors
recommends the acceptance of or accept any agreement, contract,
offer or other arrangement providing for, or any series of
transactions resulting in, any of the transactions described
above. Notwithstanding the foregoing, a Change in Control of the
Company shall not occur as a result of the issuance of stock by
the Company in connection with any public offering of its stock.
(c) "Code" means the Internal Revenue Code, as
amended.
(d) "Committee" means the Executive Compensation
Committee of the Board of Directors.
(e) "Company" means Duke Realty Investments, Inc.
(f) "Effective Date" means January 1, 1998.
(g) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(h) "For Cause" means (i) the willful and continued
failure of a Participant to perform his required duties as an
officer or employee of the Company or any Subsidiary, (ii) any
action by a Participant which involves willful misfeasance or
gross negligence, (iii) the requirement of or direction by a
federal or state regulatory agency which has jurisdiction over
the Company or any Subsidiary to terminate the employment of the
Participant, (iv) the conviction of the Participant of the
commission of any criminal offense which involves dishonesty or
breach of trust, or (v) any intentional breach by the Participant
of a material term, condition or covenant of any agreement
between the Participant and the Company or any Subsidiary.
(i) "Good Reason" means a change in the Participant's
status or position with the Company or Subsidiaries that does not
represent a promotion from the Participant's status and position
as in effect immediately prior to the Change in Control of the
Company, a forced move to a location more than sixty (60) miles
from the Participant's place of business prior to the Change in
Control or a reduction by the Company and Subsidiaries in the
Participant's base salary and/or a reduction in their annual
incentive bonus target potential as in effect immediately prior
to the Change in Control of the Company.
(j) "Level One Benefits" means the severance benefits
payable under Section 3.2 of the Plan.
(k) "Level One Participant" means an officer or key
employee who is designated to participate in the Plan and receive
Level One Benefits as provided in Article II.
(l) "Level Two Benefits" means the severance benefits
payable under Section 3.3 of the Plan.
(m) "Level Two Participant" means an officer or key
employee who is designated to participate in the Plan and receive
Level Two Benefits.
(n) "Participant" means a Level One or Level Two
Participant.
(o) "Plan" means the severance pay plan embodied
herein, as amended from time to time, known as the Duke Realty
Severance Pay Plan.
(p) "Section 16 Grantee" means a person subject to
potential liability under Section 16(b) of the Exchange Act with
respect to transactions involving equity securities of the
Company.
(q) "Subsidiary" or "Subsidiaries" means a
corporation, partnership or limited liability company, a majority
of the outstanding voting stock, general partnership interests or
membership interest, as the case may be, of which is owned or
controlled directly or indirectly, by the Company or by one or
more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock having voting power for the election
of directors, or trustees, as the case may be, whether at all
times or only so long as no senior class of stock has such voting
power by reason of any contingency.
(r) "Territory" means the states of Indiana, Illinois,
Ohio, Kentucky, Missouri, Minnesota,Tennessee and any other state
in which the Company or a Subsidiary maintains a business
operation at the time the affected Participant terminates
employment with the Company and Subsidiaries.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
Participation in the Plan is limited to those officers and
key employees of the Company or a Subsidiary who, from time to
time, shall be designated by the Committee. Committee members
shall not be eligible to participate in this Plan while serving
as Committee members. A designated employee will become a
Participant in the Plan as of the later of the Effective Date or
the date specified by the Committee. The Committee shall also
designate whether the Participant will receive Level One Benefits
under Section 3.2 or Level Two Benefits under Section 3.3.
ARTICLE III
BENEFITS
3.1. Eligibility for Severance Benefits. In the event of a
Level One or Level Two Participant's involuntary termination of
employment or voluntary termination for Good Reason from the
Company and Subsidiaries within one year of a Change in Control,
unless terminated by the Company and Subsidiaries For Cause, such
Participant shall be eligible for severance benefits in
accordance with this Article III.
3.2. Level One Benefits. If a Level One Participant's
termination of employment occurs as provided in Section 3.1, the
Level One Participant shall be entitled to monthly salary
continuation payments, the total of which shall equal two times
the sum of (i) the Level One Participant's base pay received in
the calendar year immediately preceding the calendar year in
which his employment terminated (the "Compensation Year"), (ii)
any annual incentive bonus paid or payable to such Participant
with respect to services performed in the Compensation Year and
(iii) anylong term incentive bonus awarded to such Participant in
the Compensation Year. For purposes of this calculation, the
amount of any long term incentive bonus shall equal the value
ascribed to such award by the Committee at the time of its grant.
For example, if a Level One Participant's termination occurred in
1999 and he received $100,000 in base pay in 1998, received a
$5,000 annual incentive bonus in 1999 for services performed in
1998 and received a long term incentive bonus in 1998 valued at
$20,000, the benefit payable under this Section 3.2 would be
$250,000 [($100,000 + $5,000 + $20,000) x 2].
3.3. Level Two Benefits. If a Level Two Participant's
termination of employment occurs as provided in Section 3.2, the
Level Two Participant shall be entitled to monthly salary
continuation payments equal to one-half of the amount that would
be payable under Section 3.2 above if the Participant had been a
Level One Participant.
3.4. Manner and Timing of Payment. The benefit payable
under Section 3.2 shall be paid in 23 equal monthly payments and
the benefit payable under Section 3.3 shall be paid in 12 equal
monthly payments commencing on the last day of the month
following the month in which the Participant's employment was
terminated as described in Section 3.1. If a Participant dies
after receiving at least one monthly payment under the Plan, any
remaining monthly payments shall be paid to the Participant's
surviving spouse, or to the Participant's estate if there is no
surviving spouse on the date benefits are to be paid, in a lump
sum on the last day of the month following the month of the
Participant's death.
3.5. Forfeiture of Benefits. Notwithstanding any other provision
to the contrary, in order to protect the Company's and
Subsidiaries' viability and consequently their ability to pay the
benefits under this Plan and the other benefit plans they
maintain for the Participants, a Participant will forfeit all
benefits under this Plan should the Participant, either
individually or through any entity which is wholly or partially
owned or controlled by the Participant, directly or indirectly,
at any time prior to the Participant receiving all payments due
him under the Plan, engage in the Territory in any of the
following activities:
(i) solicit in any manner, seek to obtain, or service
the business of any customer of any of the Company
or a Subsidiary, other than for the Company or a
Subsidiary;
(ii) become an owner of any business, if such business
is substantially similar to or competes with the
Company or a Subsidiary;
(iii) become employed by or serve as an officer,
director, consultant, independent contractor,
agent or representative of any business which is
substantially similar to or competes with the
Company or a Subsidiary; or
(iv) solicit the employment of or hire any employee of
the Company or a Subsidiary, or encourage any
employee to terminate his or her employment with
the Company or a Subsidiary.
For purposes of this Section 3.5, a "customer " shall be deemed
to be any person, business, partnership, proprietorship, firm,
organization or corporation which has done business with the
Company or a Subsidiary or which has been solicited or serviced
in any manner, directly or indirectly, by the Company or a
Subsidiary within eighteen (18) months prior to the date of the
Participant's conduct in question, and the phrase "service the
business of any customer" means the development, modification,
enhancement or improvement of any product or service offered by
the Company or a Subsidiary or which is reasonably related to the
products or services offered by the Company or a Subsidiary.
Should the foregoing provisions be found to be unenforceable by a
court of competent jurisdiction because they are determined to be
overly broad or exceed the parameters and limitations necessary
for the Company's and Subsidiaries' reasonable protection, then
the restrictions shall be limited to the activities, geographic
area or period of time that a court of competent jurisdiction
deems equitable to the Participant and adequate to reasonably
protect the Company and Subsidiaries. If a Participant is to
forfeit his benefits pursuant to this Section 3.5, the Company
and Subsidiaries shall stop all benefit payments otherwise
payable but not yet paid to or for the Participant and may
require the Participant to repay any benefits previously paid to
the Participant under the Plan.
3.6. Withholding of Taxes. Each Participant shall be solely
responsible for, and the Company or Subsidiaries will withhold
from any amounts payable under this Plan, all legally required
federal, state, city and local taxes.
ARTICLE IV
CLAIMS FOR BENEFITS
It is not necessary that a Participant apply for benefits
under the Plan. However, if a Participant wishes to file a claim
for benefits, such claim must be in writing and filed with the
Committee. If a claim is denied, the Committee will furnish the
claimant with written notice of its decision, setting forth the
specific reasons for the denial, references to the Plan
provisions on which the denial is based, additional information
necessary to perfect the claim, if any, and a description of the
procedure for review of the denial. A claimant may request a
review of the denial of a claim for benefits by filing a written
application with the Committee within sixty (60) days after he
receives notice of the denial. Such a claimant is entitled to
review the Plan document and submit written issues and comments
to the Committee. The Committee, within a reasonable time after
it receives a request for review, will furnish the claimant with
written notice of its decision, setting forth the specific
reasons for the decision and references to the pertinent Plan
provisions on which the decision is based.
ARTICLE V
MISCELLANEOUS
5.1. Amendment or Termination. The Board of Directors or the
Committee may, at any time, without the approval of the
stockholders of the Company (except as otherwise required by
applicable law, rule or regulations, or listing requirements of
any National Securities Exchange on which are listed any of the
Company's equity securities, including without limitation any
shareholder approval requirement of Rule 16b-3 or any successor
safe harbor rule promulgated under the Exchange Act), alter,
amend, modify, suspend or discontinue the Plan.
5.2. Information to be Furnished by Participants.
Participants, or any other persons entitled to benefits under the
Plan, must furnish to the Committee such documents, evidence,
data or other information as the Committee considers necessary or
desirable for the purpose of administering the Plan. The
benefits under the Plan for each Participant, and each other
person who is entitled to benefits hereunder, are to be provided
on the condition that he furnish full, true and complete data,
evidence or other information, and that he will promptly sign any
document reasonably related to the administration of the Plan
requested by the Committee.
5.3. Employment Rights. The Plan does not constitute a
contract of employment and participation in the plan will not
give a Participant the right to be rehired or retained in the
employ of the Company or a Subsidiary, nor will participation in
the Plan give any Participant any right or claim to any benefit
under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan.
5.4. Evidence. Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information
which the person relying thereon considers pertinent and
reliable, and signed, made or presented by the proper party or
parties.
5.5. Gender and Number. Where the context admits, words in
the masculine gender shall include the feminine gender, the
plural shall include the singular and the singular shall include
the plural.
5.6. Action by Company. Any action required of or permitted
by the Company under the Plan shall be by resolution of the Board
of Directors, by a committee of the Board of Directors or by a
person or persons authorized by resolution of the Board of
Directors or the committee of the Board of Directors.
5.7. Controlling Laws. Except to the extent superseded by
laws of the United States, the laws of Indiana shall be
controlling in all matters relating to the Plan.
5.8. Mistake of Fact. Any mistake of fact or misstatement
of fact shall be corrected when it becomes known and proper
adjustment made by reason thereof.
5.9. Severability. In the event any provisions of the Plan
shall be held to be illegal or invalid for any reason, such
illegality or invalidity shall not affect the remaining parts of
the plan, and the Plan shall be construed and endorsed as if such
illegal or invalid provisions had never been contained in the
Plan.
5.10. Effect of Headings. The descriptive headings of
the sections of this Plan are inserted for convenience of
reference and identification only and do not constitute a part of
this Plan for purposes of interpretation.
5.11. Nontransferability. The benefits payable under
this Plan and any rights and privileges pertaining thereto shall
not be transferred, assigned, pledged or hypothecated in any way,
whether by operation of law or otherwise and shall not be subject
to execution, attachment or similar process.
5.12. Liability. By participating in the Plan, each
Participant agrees to release and hold harmless the Company, the
Subsidiaries (and their respective directors, officers and
employees) and the Committee, from and against any tax liability,
including without limitation, interest and penalties, incurred by
the Participant in connection with his participation in the Plan.
5.13. Funding. Benefits payable under this Plan to a
Participant or to a beneficiary will be paid by the Company and
Subsidiaries from their general assets. The Company is not
required to segregate on its books or otherwise establish any
funding procedure for any amount to be used for the payment of
benefits under this Plan. The Company may, however, in its sole
discretion, set funds aside in investments to meet its
anticipated obligations under the Plan. Any such action or set-
aside may not be deemed to create a trust of any kind between the
Company and any Participant or beneficiary or to constitute the
funding of any Plan benefits. Consequently, any person entitled
to a payment under the Plan will have no rights greater than the
rights of any other unsecured creditor of the Company.
DUKE REALTY INVESTMENTS, INC.
Dated: By:
------------------ ------------------------------------
Dennis D. Oklak, Executive
Vice President and Chief
Administrative Officer
EXHIBIT 11.1
DUKE REALTY LIMITED PARTNERSHIP
EARNINGS TO FIXED CHARGES CALCULATION (in thousands)
<TABLE>
<CAPTION>
DECEMBER 31,
1998
-----------
<S> <C>
CONSOLIDATED NET INCOME AVAILABLE FOR
COMMON UNITS $103,112
DIVIDENDS ON PREFERRED UNITS 19,833
GAIN ON PROPERTY SALES (1,351)
INTEREST EXPENSE 60,217
-------
EARNINGS BEFORE FIXED CHARGES $181,811
=======
INTEREST EXPENSE $ 60,217
DIVIDENDS ON PREFERRED UNITS 19,833
INTEREST COSTS CAPITALIZED 8,546
-------
TOTAL FIXED CHARGES $ 88,596
=======
FIXED CHARGE RATIO 2.05
=======
</TABLE>
EXHIBIT 11.2
DUKE REALTY LIMITED PARTNERSHIP
EARNINGS TO DEBT SERVICE CALCULATIONS (in thousands)
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
CONSOLIDATED NET INCOME AVAILABLE FOR
COMMON UNITS $103,112
GAIN ON PROPERTY SALES (1,351)
RECURRING PRINCIPAL AMORTIZATION 7,072
INTEREST EXPENSE (EXCLUDES AMORTIZATION OF
DEFERRED FINANCING FEES) 58,855
-------
EARNINGS BEFORE DEBT SERVICE $167,688
=======
INTEREST EXPENSE (EXCLUDES AMORTIZATION OF
DEFERRED FINANCING FEES) $ 58,855
RECURRING PRINCIPAL AMORTIZATION 7,072
-------
TOTAL DEBT SERVICE $ 65,927
=======
DEBT SERVICE RATIO 2.54
=======
</TABLE>
Exhibit 21
<TABLE>
<CAPTION>
SUBSIDIARIES OF DUKE REALTY LIMITED PARTNERSHIP
State of Names Under Which
Incorporation Subsidiary Does
Subsidiary Or Organization Business
- ---------- --------------- -----------------
<S> <C> <C>
Duke Services, Inc. Indiana Duke Services, Inc.
Duke Realty Services Limited Indiana Duke Realty Services Limited
Partnership Partnership
Duke Realty Construction, Inc. Indiana Duke Realty Construction,
Inc.
Duke Construction Limited Indiana Duke Construction Limited
Partnership Partnership
B/D Limited Partnership Indiana B/D Limited Partnership
Lamida Partners Limited Ohio Lamida Partners Limited
Partnership Partnership
Kenwood Office Associates Ohio Kenwood Office Associates
Park Creek Venture Indiana Park Creek Venture
Parkrite Limited Partnership Indiana Parkrite Limited Partnership
Post Road Limited Partnership Indiana Post Road Limited Partnership
Shadeland Station Office Indiana Shadeland Station Office
Associates II Limited Associates II Limited
Partnership Partnership
Dugan Realty, L.L.C. Indiana Dugan Realty, L.L.C.
Duke Tees Joint Venture Indiana Duke Tees Joint Venture
Park Fletcher Limited Indiana Park Fletcher Limited
Partnership 2728 Partnership 2728
Cincinnati Development Group Ohio Cincinnati Development Group
L.L.C. L.L.C.
Dugan Office, L.L.C. Indiana Dugan Office, L.L.C.
625 Building, L.L.C. Missouri 625 Building, L.L.C.
Minneapolis West Associates Minnesota Minneapolis West Associates
Duke A&M, L.L.C. Ohio Duke A&M, L.L.C.
Campus Development, L.L.C. Ohio Campus Development, L.L.C.
Duke Neyer, L.L.C. Ohio Duke Neyer, L.L.C.
Dugan SSP, L.L.C. Indiana Dugan SSL.C.
</TABLE>
THE PARTNERS
Duke Realty Limited Partnership
We consent to incorporation by reference in the registration
statements No. 333-26845-01, No. 333-49911-01 and No. 333-
04695-01 on Form S-3 of Duke Realty Investments, Inc. and
Duke Realty Limited Partnership of our report dated January
26, 1999, except as to note 12, which is as of March 1,
1999, relating to the consolidated balance sheets of Duke
Realty Limited Partnership and Subsidiaries as of December
31, 1998 and 1997, 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, 1998,
and the related schedule, which report appears in the
December 31, 1998, annual report on Form 10-K of Duke Realty
Limited Partnership.
KPMG LLP
Indianapolis, Indiana
March 18, 1999
87348/
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
------------------------------
Edward T. Baur
<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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-----------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
---------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-------------------------------
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 R. 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 and all
capacities, to sign the annual report on Form 10-K of Duke Realty
Limited Partnership for the year ended December 31, 1998, 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 26, 1999 /s/
-------------------------------
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 R. 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 and all capacities, to sign the
annual report on Form 10-K of Duke Realty Limited Partnership for
the year ended December 31, 1998, 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 26, 1999 /s/
----------------------------
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 R. 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 and all capacities, to sign the
annual report on Form 10-K of Duke Realty Limited Partnership for
the year ended December 31, 1998, 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 26, 1999 /s/
--------------------------------
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 R. Gaskin, and each of them,
his attorneys-in-fact and agents, with full power of substitution
and resubstitution for him in any and all capacities, to sign the
annual report on Form 10-K of Duke Realty Limited Partnership for
the year ended December 31, 1998, 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 26, 1999 /s/
------------------------------
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, 1998
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-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 6,626
<SECURITIES> 0
<RECEIVABLES> 60,872
<ALLOWANCES> (1,737)
<INVENTORY> 0
<CURRENT-ASSETS> 86,634
<PP&E> 2,862,386
<DEPRECIATION> (179,887)
<TOTAL-ASSETS> 2,854,062
<CURRENT-LIABILITIES> 168,390
<BONDS> 1,007,317
0
0
<COMMON> 0
<OTHER-SE> 1,677,988
<TOTAL-LIABILITY-AND-EQUITY> 2,854,062
<SALES> 0
<TOTAL-REVENUES> 376,254
<CGS> 191,840
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,085
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60,217
<INCOME-PRETAX> 103,112
<INCOME-TAX> 0
<INCOME-CONTINUING> 103,112
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 103,112
<EPS-PRIMARY> $1.13
<EPS-DILUTED> $1.12
</TABLE>
EXHIBIT 99.1
SELECTED QUARTERLY FINANCIAL INFORMATION
(UNAUDITED)
Selected quarterly information for the years ended December 31, 1998 and
1997 is as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------------------------
1998 December 31 September 30 June 30 March 31
--------------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Revenues from
Rental Operations $ 95,522 $ 90,348 $ 83,079 $ 79,676
Revenues from
Service Operations 5,510 7,284 7,022 4,900
Net income available
for common shares 23,302 23,449 21,858 22,262
Basic income per
common share (2) $ 0.28 $ 0.29 $ 0.27 $ 0.29
Diluted income per
common share (2) $ 0.27 $ 0.29 $ 0.27 $ 0.29
Weighted average
common shares (2) 84,394 81,594 80,080 76,655
Weighted average
common and dilutive
potential common
shares (2) 96,074 93,279 91,830 88,596
Funds From
Operations (1) $42,990 $39,421 $36,933 $34,730
Cash flow provided
by (used by):
Operating
activities $72,079 $48,798 $61,260 $39,051
Investing
activities (233,013) (119,313) (242,439) (109,049)
Financing
activities 145,851 70,169 174,389 88,814
1997
---------------------------
Revenues from
Rental Operations $ 70,980 $ 56,218 $ 51,586 $ 50,918
Revenues from
Service Operations $ 7,393 $ 5,917 $ 5,129 $ 3,939
Net income available
for common shares $ 19,406 $ 16,911 $ 14,696 $ 14,986
Basic income
per common share (2) $ 0. 26 $ 0.26 $ 0. 23 $ 0.24
Diluted income
per common share (2) $ 0. 25 $ 0.26 $ 0. 23 $ 0.24
Weighted average
common shares (2) 75,466 65,309 63,168 61,624
Weighted average
common and dilutive
potential common
shares (2) 86,649 72,971 70,576 69,579
Funds From
Operations (1) $ 33,126 $ 26,007 $ 24,406 $ 23,717
Cash flow
provided by (used by):
Operating
activities $ 49,057 $ 38,676 $ 42,489 $ 28,973
Investing
activities (216,788) (205,129) (134,244) (41,163)
Financing
activities 3,952 337,478 81,865 19,853
</TABLE>
(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 and unconsolidated companies
(adjustments for minority interest and unconsolidated companies 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 Company's operating
performance, and is not indicative of cash available to fund all cash
flow needs.
(2) Amounts adjusted to reflect the General Partner's two-for-one stock split
effected in August 1997.
