<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 1996
REGISTRATION NO. 333-8163
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 2
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
ARDEN REALTY GROUP, INC.
(Exact Name of Registrant as Specified in its Governing Instruments)
------------------------
9100 Wilshire Boulevard
East Tower, Suite 700
Beverly Hills, California 90212
(310) 271-8600
(Address of principal executive offices)
------------------------
Richard S. Ziman
9100 Wilshire Boulevard
East Tower, Suite 700
Beverly Hills, California 90212
(310) 271-8600
(Name and Address of Agent for Service)
------------------------
COPIES TO:
William J. Cernius J. Warren Gorrell, Jr.
Latham & Watkins Joseph G. Connolly, Jr.
650 Town Center Drive Hogan & Hartson L.L.P.
Suite 2000 Columbia Square
Costa Mesa, California 92626 555 Thirteenth Street, N.W.
(714) 540-1235 Washington, D.C. 20004-1109
(202) 637-5600
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ________________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share....... 21,674,500 $20.00 $433,490,000 $149,479(3)
</TABLE>
(1) Includes 2,827,000 shares which the Underwriters have the option to purchase
solely to cover overallotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Of this amount, $148,504 was previously paid and $976 is being paid
herewith.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Arden Realty Group, Inc.
We have audited the accompanying statement of revenue and certain expenses
of 1950 Sawtelle for the period January 1, 1995 to June 14, 1995. This statement
of revenue and certain expenses is the responsibility of the management of 1950
Sawtelle. Our responsibility is to express an opinion on the statement of
revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in the registration statement on Form S-11 of
Arden Realty Group, Inc. Certain expenses (described in Note 1) that would not
be comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of 1950 Sawtelle for the period January 1, 1995 to June 14, 1995.
Ernst & Young LLP
Los Angeles, California
April 10, 1996
F-34
<PAGE>
1950 SAWTELLE
STATEMENT OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
FOR THE PERIOD JANUARY 1, 1995 TO JUNE 14, 1995
<TABLE>
<S> <C>
REVENUE:
Rental............................................................................. $ 847
Tenant reimbursements.............................................................. 33
Parking............................................................................ 68
---------
Total revenue.................................................................... 948
---------
CERTAIN EXPENSES:
Property operating and maintenance................................................. 204
Real estate taxes.................................................................. 83
---------
Total certain expenses........................................................... 287
---------
Excess of revenue over certain expenses........................................ $ 661
---------
---------
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-35
<PAGE>
1950 SAWTELLE
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
FOR THE PERIOD JANUARY 1, 1995 TO JUNE 14, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The accompanying statement of revenue and certain expenses includes the
operations of 1950 Sawtelle, a 103,772 square foot commercial office property
located in Los Angeles, California. 1950 Sawtelle was acquired by 1950 Sawtelle
Associates, L.P. on June 14, 1995 for $9,251,000. Substantial ownership
interests in the entity that owns the property are held by Richard Ziman, Victor
Coleman, and related individuals and entities controlled by them (the "Owners").
The Owners of this property and other affiliates (the "Arden Predecessors") and
other unrelated parties, which collectively represent the "Participants," will,
concurrently with a proposed public offering, enter into a series of
transactions with Arden Realty Group, Inc., a Maryland corporation, to form a
real estate investment trust (the "REIT") to continue and expand the business of
the Arden Predecessors. 1950 Sawtelle has been managed by Arden Realty Group,
Inc., a California corporation, since its acquisition by the Arden Predecessors.
1950 Sawtelle was purchased from a nonaffiliated third party.
BASIS OF PRESENTATION
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
registration statement on Form S-11 of Arden Realty Group, Inc., a Maryland
corporation (the "Company").
The accompanying statement is not representative of the actual operations
for the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of 1950
Sawtelle have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the 1950 Sawtelle.
REVENUE RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amount of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
2. COMMERCIAL OFFICE PROPERTIES
The future minimum lease payments to be received under existing operating
leases as of June 14, 1995 are as follows:
<TABLE>
<S> <C>
1996............................................................ $1,568,000
1997............................................................ 1,338,000
1998............................................................ 610,000
1999............................................................ 173,000
2000............................................................ 110,000
Thereafter...................................................... 136,000
</TABLE>
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in 1950 Sawtelle is generally leased to tenants under lease
terms which provide for the tenants to pay for increases in operating expenses
in excess of specified amounts.
F-36
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Arden Realty Group, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of Westwood Terrace, Skyview Center, 4811 and 4900/10 Airport Plaza
Drive and New Wilshire for the period December 1, 1994 to November 22, 1995.
This combined statement of revenue and certain expenses is the responsibility of
the management of Westwood Terrace, Skyview Center, 4811 and 4900/10 Airport
Plaza Drive and New Wilshire. Our responsibility is to express an opinion on the
combined statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. 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 audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the registration statement
on Form S-11 of Arden Realty Group, Inc. Certain expenses (described in Note 1)
that would not be comparable to those resulting from the proposed future
operations of the properties are excluded and the statement is not intended to
be a complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of Westwood Terrace, Skyview Center, 4811 and
4900/10 Airport Plaza Drive and New Wilshire for the period December 1, 1994 to
November 22, 1995.
Ernst & Young LLP
Los Angeles, California
September 10, 1996
F-37
<PAGE>
WESTWOOD TERRACE, SKYVIEW CENTER,
4811 AND 4900/10 AIRPORT PLAZA DRIVE
AND NEW WILSHIRE
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
FOR THE PERIOD DECEMBER 1, 1994 TO NOVEMBER 22, 1995
<TABLE>
<S> <C>
REVENUE:
Rental........................................................................... $ 12,675
Tenant reimbursements............................................................ 693
Parking.......................................................................... 2,162
Other............................................................................ 805
---------
Total revenue.................................................................... 16,335
---------
CERTAIN EXPENSES:
Property operating and maintenance............................................... 4,208
Real estate taxes................................................................ 1,505
Insurance........................................................................ 416
Ground rent...................................................................... 169
Bad debts........................................................................ 66
Other............................................................................ 107
---------
Total certain expenses........................................................... 6,471
---------
Excess of revenue over certain expenses........................................ $ 9,864
---------
---------
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-38
<PAGE>
WESTWOOD TERRACE, SKYVIEW CENTER,
4811 AND 4900/10 AIRPORT PLAZA DRIVE
AND NEW WILSHIRE
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
FOR THE PERIOD DECEMBER 1, 1994 TO NOVEMBER 22, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The accompanying combined statement of revenue and certain expenses includes
the operations of five commercial office properties located in Southern
California which were acquired by Arden LAOP IV, LLC on November 22, 1995 from
nonaffiliated third parties. The ownership interests in the entity that owns the
properties are held by Richard Ziman, Victor Coleman, Arthur Gilbert and related
individuals and entities controlled by them (the "Arden Predecessors"). The
Arden Predecessors, along with other unrelated parties, which collectively
represent the "Participants," will, concurrently with a proposed public
offering, enter into a series of transactions with Arden Realty Group, Inc., a
Maryland corporation, to form a real estate investment trust (the "REIT") to
continue and expand the business of the Arden Predecessors. All of the
properties have been managed by Arden Realty Group, Inc., a California
corporation, since acquisition by the Arden Predecessors.
The properties are as follows:
<TABLE>
<CAPTION>
SOUTHERN APPROXIMATE
CALIFORNIA RENTABLE ACQUISITION
PROPERTY NAME LOCATION SQUARE FOOTAGE ACQUISITION DATE PRICE
- -------------------- ------------------ -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Westwood Terrace Los Angeles 135,943 November 1995 $ 18,953,000
Skyview Center Los Angeles 391,675 November 1995 40,216,000
4811 and 4900/10
Airport Plaza Dr. Long Beach 272,013 November 1995 14,452,000
New Wilshire Los Angeles 202,704 November 1995 21,102,000
-------------- ----------------
1,002,335 $ 94,723,000
-------------- ----------------
-------------- ----------------
</TABLE>
BASIS OF PRESENTATION
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
registration statement on Form S-11 of Arden Realty Group, Inc., a Maryland
corporation (the "Company"). The accompanying statement was prepared on a
combined basis because the properties are all currently owned and managed by the
Arden Predecessors. There are no interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the periods presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of
Westwood Terrace, Skyview Center, 4811 and 4900/10 Airport Plaza Drive and New
Wilshire have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of Westwood Terrace, Skyview Center, 4811
and 4900/10 Airport Plaza Drive and New Wilshire.
REVENUE RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amount of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-39
<PAGE>
WESTWOOD TERRACE, SKYVIEW CENTER,
4811 AND 4900/10 AIRPORT PLAZA DRIVE
AND NEW WILSHIRE
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES -- (CONTINUED)
FOR THE PERIOD DECEMBER 1, 1994 TO NOVEMBER 22, 1995
2. COMMERCIAL OFFICE PROPERTIES
The future minimum lease payments to be received under the existing
operating leases as of November 22, 1995 are as follows:
<TABLE>
<S> <C>
1996........................................................... $15,290,000
1997........................................................... 13,880,000
1998........................................................... 11,456,000
1999........................................................... 9,396,000
2000........................................................... 8,271,000
Thereafter..................................................... 24,817,000
</TABLE>
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in Westwood Terrace, Skyview Center, 4811 and 4900/10 Airport
Plaza Drive and New Wilshire is generally leased to tenants under lease terms
which provide for the tenants to pay for increases in operating expenses in
excess of specified amounts.
F-40
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Arden Realty Group, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of 70 South Lake and Calabasas Commerce Center for the period January
1, 1995 to November 22, 1995. This combined statement of revenue and certain
expenses is the responsibility of the management of 70 South Lake and Calabasas
Commerce Center. Our responsibility is to express an opinion on the combined
statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. 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 audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the registration statement
on Form S-11 of Arden Realty Group, Inc. Certain expenses (described in Note 1)
that would not be comparable to those resulting from the proposed future
operations of the properties are excluded and the statement is not intended to
be a complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of 70 South Lake and Calabasas Commerce Center for
the period January 1, 1995 to November 22, 1995.
Ernst & Young LLP
Los Angeles, California
April 10, 1996
F-41
<PAGE>
70 SOUTH LAKE AND CALABASAS COMMERCE CENTER
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
FOR THE PERIOD JANUARY 1, 1995 TO NOVEMBER 22, 1995
<TABLE>
<CAPTION>
REVENUE:
<S> <C>
Rental............................................................................ $ 3,411
Tenant reimbursements............................................................. 401
Parking........................................................................... 150
Other............................................................................. 77
---------
Total revenue..................................................................... 4,039
---------
CERTAIN EXPENSES:
Property operating and maintenance................................................ 968
Real estate taxes................................................................. 232
Insurance......................................................................... 43
Other............................................................................. 10
---------
Total certain expenses............................................................ 1,253
---------
Excess of revenue over certain expenses......................................... $ 2,786
---------
---------
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-42
<PAGE>
70 SOUTH LAKE AND CALABASAS COMMERCE CENTER
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The accompanying combined statement of revenue and certain expenses includes
the operations of two commercial office properties located in Southern
California which were acquired by Arden LAOP IV, LLC on November 22, 1995. The
ownership interests in the entity that owns the properties are held by Richard
Ziman, Victor Coleman, Arthur Gilbert and related individuals and entities
controlled by them (the "Arden Predecessors"). The Arden Predecessors, along
with other unrelated parties, which collectively represent the "Participants,"
will, concurrently with a proposed public offering, enter into a series of
transactions with Arden Realty Group, Inc. a Maryland corporation, to form a
real estate investment trust (the "REIT") to continue and expand the business of
the Arden Predecessors. All of the properties have been managed by Arden Realty
Group, Inc., a California corporation, since acquisition by the Arden
Predecessors. The properties were purchased from nonaffiliated third parties.
The properties are as follows:
<TABLE>
<CAPTION>
APPROXIMATE
SOUTHERN RENTABLE
CALIFORNIA SQUARE ACQUISITION
PROPERTY NAME LOCATION FOOTAGE ACQUISITION DATE PRICE
- ------------------------------------- ----------- ------------ ---------------------- -------------
<S> <C> <C> <C> <C>
70 South Lake........................ Pasadena 100,133 November 22, 1995 $ 10,457,000
Calabasas Commerce Center............ Calabasas 123,121 November 22, 1995 10,987,000
------------ -------------
223,254 $ 21,444,000
------------ -------------
------------ -------------
</TABLE>
BASIS OF PRESENTATION
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
registration statement on Form S-11 of Arden Realty Group, Inc., a Maryland
corporation (the "Company"). The accompanying statement was prepared on a
combined basis because the properties are all currently owned and managed by the
Arden Predecessors. There are no interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of 70
South Lake and Calabasas Commerce Center have been excluded. Excluded expenses
consist of interest, depreciation and amortization and property general and
administrative costs not directly comparable to the future operations of 70
South Lake and Calabasas Commerce Center.
REVENUE RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amount of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-43
<PAGE>
70 SOUTH LAKE AND CALABASAS COMMERCE CENTER
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES -- (CONTINUED)
2. COMMERCIAL OFFICE PROPERTIES
The future minimum lease payments to be received under existing operating
leases as of November 22, 1995 are as follows:
<TABLE>
<CAPTION>
1996............................................................. 3,150,000
<S> <C>
1997............................................................. 2,749,000
1998............................................................. 2,133,000
1999............................................................. 1,870,000
2000............................................................. 731,000
Thereafter....................................................... 1,968,000
</TABLE>
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in 70 South Lake and Calabasas Commerce Center is generally
leased to tenants under lease terms which provide for the tenants to pay for
increases in operating expenses in excess of specified amounts.
F-44
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Arden Realty Group, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the 1996 Acquired Properties for the year ended December 31, 1995.
This combined statement of revenue and certain expenses is the responsibility of
the management of the 1996 Acquired Properties. Our responsibility is to express
an opinion on the combined statement of revenue and certain expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. 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 audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the registration statement
on Form S-11 of Arden Realty Group, Inc. Certain expenses (described in Note 1)
that would not be comparable to those resulting from the proposed future
operations of the properties are excluded and the statement is not intended to
be a complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of the 1996 Acquired Properties for the year ended
December 31, 1995, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Los Angeles, California
April 10, 1996
F-45
<PAGE>
1996 ACQUIRED PROPERTIES
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEAR
ENDED
DECEMBER 31,
1995
FOR THE 1996 ------------
INTERIM PERIOD
PRIOR TO
ACQUISITION
---------------
(UNAUDITED)
<S> <C> <C>
REVENUE
Rental............................................................................ $ 3,923 $ 19,391
Tenant reimbursements............................................................. 258 961
Parking........................................................................... 308 1,859
Other............................................................................. 144 350
------ ------------
Total revenue................................................................... 4,633 22,561
------ ------------
CERTAIN EXPENSES
Property operating and maintenance................................................ 1,065 5,401
Real estate taxes................................................................. 151 1,753
Insurance......................................................................... 135 521
Ground rent....................................................................... 138 1,067
Bad debts......................................................................... -- 106
------ ------------
Total certain expenses.......................................................... 1,489 8,848
------ ------------
Excess of revenue over certain expenses....................................... $ 3,144 $ 13,713
------ ------------
------ ------------
</TABLE>
See accompanying notes to combined statements of revenue and certain expenses.
F-46
<PAGE>
1996 ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The accompanying combined statements of revenue and certain expenses include
the combined operations of five commercial office properties located in Southern
California which were acquired in 1996 (the "1996 Acquired Properties") from
nonaffiliated third parties by entities in which substantial interests are owned
by Richard Ziman, Victor Coleman, Arthur Gilbert and related individuals and
controlled by them (the "Arden Predecessors"). The properties were purchased for
cash utilizing funds from new debt financing. Two of the properties (400
Corporate Pointe and 5832 Bolsa) were acquired from a single seller. The Arden
Predecessors, along with other unrelated parties, which collectively represent
the "Participants," will, concurrently with a proposed public offering, enter
into a series of transactions with Arden Realty Group, Inc., a Maryland
corporation, to form a real estate investment trust (the "REIT") to continue and
expand the business of the Arden Predecessors. All of the properties have been
managed by Arden Realty Group, Inc., a California corporation, since their
acquisition by the Arden Predecessors.
The 1996 Acquired Properties are as follows:
<TABLE>
<CAPTION>
APPROXIMATE
RENTABLE
SOUTHERN CALIFORNIA SQUARE ACQUISITION ACQUISITION
PROPERTY NAME LOCATION FOOTAGE DATE PRICE
- ------------------------ -------------------- ------------ ---------------- --------------
<S> <C> <C> <C> <C>
5832 Bolsa Huntington Beach 49,355 February 1996 $ 4,654,000
400 Corporate Pointe Culver City 164,598 February 1996 21,206,000
9665 Wilshire Beverly Hills 158,684 February 1996 29,331,000
Imperial Bank Tower San Diego 540,413 February 1996 39,474,000
100 Broadway Long Beach 191,727 July 1, 1996 19,799,000
------------ --------------
1,104,777 $ 114,464,000
------------ --------------
------------ --------------
</TABLE>
BASIS OF PRESENTATION
The accompanying statements were prepared to comply with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
registration statement on Form S-11 of Arden Realty Group, Inc., a Maryland
corporation (the "Company"). The accompanying statements were prepared on a
combined basis because the properties are controlled by the Arden Predecessors.
There are no interproperty accounts to be eliminated.
The accompanying statements are not representative of the actual operations
for the periods presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of the
1996 Acquired Properties have been excluded. Excluded expenses consist of
interest, depreciation and amortization and property general and administrative
costs not directly comparable to the future operations of the 1996 Acquired
Properties.
REVENUE RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
RISKS AND UNCERTAINTIES
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-47
<PAGE>
1996 ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
UNAUDITED INTERIM STATEMENT
The combined interim financial statements for the 1996 interim period
includes the revenue and certain expenses for the period prior to acquisition by
the Arden Predecessors. In the opinion of management, such financial statements
reflect all adjustments necessary for a fair presentation of the results of the
respective interim periods. All such adjustments are of a normal, recurring
nature.
2. COMMERCIAL OFFICE PROPERTIES
The future minimum lease payments to be received under existing operating
leases as of December 31, 1995 are as follows:
<TABLE>
<S> <C>
1996........................................... $19,849,000
1997........................................... 18,159,000
1998........................................... 16,405,000
1999........................................... 15,866,000
2000........................................... 14,204,000
Thereafter..................................... 34,774,000
</TABLE>
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in the 1996 Acquired Properties is generally leased to tenants
under lease terms which provide for the tenants to pay for increases in
operating expenses in excess of specified amounts.
F-48
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors
Arden Realty Group, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the Acquisition Properties for the year ended December 31, 1995.
This combined statement of revenue and certain expenses is the responsibility of
the management of the Acquisition Properties. Our responsibility is to express
an opinion on the combined statement of revenue and certain expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. 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 audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission for inclusion in the registration statement
on Form S-11 of Arden Realty Group, Inc. Certain expenses (described in Note 1)
that would not be comparable to those resulting from the proposed future
operations of the properties are excluded and the statement is not intended to
be a complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of the Acquisition Properties for the year ended
December 31, 1995, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Los Angeles, California
April 19, 1996
F-49
<PAGE>
ACQUISITION PROPERTIES
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED FOR THE YEAR
JUNE 30, ENDED
-------------------- DECEMBER 31,
1996 1995 1995
--------- --------- -------------
(UNAUDITED)
<S> <C> <C> <C>
REVENUE
Rental........................................................................ $ 2,101 $ 2,240 $ 4,280
Tenant reimbursements......................................................... 58 26 54
Parking....................................................................... 87 55 133
Other......................................................................... 174 31 85
--------- --------- ------
Total revenue............................................................... 2,420 2,352 4,552
--------- --------- ------
CERTAIN EXPENSES
Property operating and maintenance............................................ 717 844 1,606
Real estate taxes............................................................. 190 205 412
Insurance..................................................................... 114 78 151
Bad debts..................................................................... -- 2 18
Other......................................................................... -- 20 41
--------- --------- ------
Total certain expenses...................................................... 1,021 1,149 2,228
--------- --------- ------
Excess of revenue over certain expenses................................... $ 1,399 $ 1,203 $ 2,324
--------- --------- ------
--------- --------- ------
</TABLE>
See accompanying notes to combined statements of revenue and certain expenses.
F-50
<PAGE>
ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The accompanying combined statements of revenue and certain expenses include
the combined operations of two commercial office properties located in Southern
California (the "Acquisition Properties") which are to be acquired by Arden
Realty Group, Inc., a Maryland corporation (the "Company") from the same
nonaffiliated third party, concurrently with the consummation of a proposed
initial public offering of the Common Stock of the Company.
The Acquisition Properties are as follows:
<TABLE>
<CAPTION>
SOUTHERN APPROXIMATE
CALIFORNIA RENTABLE ACQUISITION
PROPERTY NAME LOCATION SQUARE FOOTAGE PRICE
- ---------------------- ------------------ -------------- -------------
<S> <C> <C> <C>
303 Glenoaks Blvd. Burbank 175,449 $ 24,854,000
12501 East Imperial Norwalk 122,175 9,978,000
------- -------------
297,624 $ 34,832,000
------- -------------
------- -------------
</TABLE>
BASIS OF PRESENTATION
The accompanying statements have been prepared to comply with the rules and
regulations of the Securities and Exchange Commission for inclusion in the
registration statement on Form S-11 of the Company.
The accounts of the Acquisition Properties are combined in the statements of
revenue and certain expenses and there are no interproperty accounts to be
eliminated. The accompanying statements are not representative of the actual
operations for the periods presented as certain expenses that may not be
comparable to the expenses expected to be incurred by the Company in the future
operations of the Acquisition Properties have been excluded. Excluded expenses
consist of interest, depreciation and amortization and property general and
administrative costs not directly comparable to the future operations of the
Acquisition Properties.
REVENUE RECOGNITION
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
RISKS AND UNCERTAINTIES
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
UNAUDITED INTERIM STATEMENT
The combined statements of revenue and certain expenses for the six months
ended June 30, 1996 and 1995 are unaudited. In the opinion of management, such
financial statements reflect all adjustments necessary for a fair presentation
of the results of the respective interim periods. All such adjustments are of a
normal, recurring nature.
F-51
<PAGE>
ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES -- (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995
2. COMMERCIAL OFFICE PROPERTY
The future minimum lease payments to be received under existing operating
leases as of December 31, 1995 are as follows:
<TABLE>
<S> <C>
1996............................................ $5,310,000
1997............................................ 5,185,000
1998............................................ 4,175,000
1999............................................ 2,789,000
2000............................................ 1,770,000
Thereafter...................................... 1,739,000
</TABLE>
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in the Acquisition Properties is generally leased to tenants
under lease terms which provide for the tenants to pay for increases in
operating expenses in excess of specified amounts.
F-52
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-11 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Los Angeles, State of California on the 16th day of September, 1996.
ARDEN REALTY GROUP, INC.
By: /s/ RICHARD S. ZIMAN
-----------------------------------
Richard S. Ziman
CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Richard S. Ziman or Victor J. Coleman or
any one of them, his or her attorneys-in-fact and agents, each with full power
of substitution and resubstitution for him or her in any and all capacities, to
sign any or all amendments or post-effective amendments to this Registration
Statement or a Registration Statement prepared in accordance with Rule 462 of
the Securities Act, and to file the same, with exhibits thereto and other
documents in connection herewith or in connection with the registration of the
Common Stock under the Securities Exchange Act of 1934, as amended, 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 or her substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities
indicated on September 16, 1996.
TITLE
-------------------------
Chairman of the Board of
/s/ RICHARD S. ZIMAN Directors and
- ----------------------------------- Chief Executive Officer
Richard S. Ziman (Principal Executive
Officer)
/s/ VICTOR J. COLEMAN President, Chief
- ----------------------------------- Operating Officer and
Victor J. Coleman Director
/s/ DIANA M. LAING Chief Financial Officer
- ----------------------------------- (Principal Financial
Diana M. Laing Officer)
Chief Accounting Officer
/s/ MICHELE BYER and Secretary
- ----------------------------------- (Principal Accounting
Michele Byer Officer)
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT NUMBERED PAGE
- --------- ---------------------------------------------------------------------------------------- ---------------------
<S> <C> <C>
1.1+ Form of Underwriting Agreement between the Company and the Representatives.
3.1 Articles of Amendment and Restatement of the Company's Charter.
3.2 Bylaws of the Company.
3.3 Specimen of certificate representing shares of Common Stock.
5.1+ Opinion of Latham & Watkins regarding the validity of the securities being registered.
8.1+ Opinion of Latham & Watkins regarding tax matters.
10.1 Form of Agreement of Limited Partnership of the Operating Partnership.
10.2+ 1996 Stock Option and Incentive Plan.
10.3 Form of Officers and Directors Indemnity Agreement.
10.5 Mortgage Financing Agreement.
10.6+ Employment Agreements between the Company and Mr. Ziman.
10.7+ Employment Agreement between the Company and Mr. Coleman.
10.8 Employment Agreement between the Company and Ms. Laing.
10.9+ Miscellaneous Rights Agreement among the Company, the Operating Partnership and Mr.
Ziman.
10.10 Ground lease for Imperial Bank Tower.
10.11 Ground lease for parking structure of Imperial Bank Tower.
10.12 Master Ground Lease for Long Beach Airport Business Park.
10.13 Ground lease for parking structure at the Anaheim City Centre.
10.14+ Option Agreement with Broad Base Investments Two, LLC.
10.15 Option Agreement with CIC Equities, Inc.
10.16 Option Agreement with TJB Investments, Inc.
10.17 Contribution Agreement with Richard S. Ziman.
10.18 Contribution Agreement with Victor J. Coleman.
10.19 Contribution Agreement with Michele Byer.
10.20 Contribution Agreement with Arden Century Associates.
10.21 Contribution Agreement with Arden LAOP Two, LLC.
10.22 Contribution Agreement with Arden Sawtelle Associates.
10.23 Contribution Agreement with Coleman Enterprises, Inc.
10.24 Partnership Interest Contribution Agreement with Arthur Gilbert and Rosalinde Gilbert
1982 Trust.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. EXHIBIT NUMBERED PAGE
- --------- ---------------------------------------------------------------------------------------- ---------------------
10.25 Contribution Agreement with Intercity Building Associates.
<S> <C> <C>
10.26 Contribution Agreement with Metropolitan Falls Partners.
10.27 Contribution Agreement with Montour Realty Associates.
10.28 Contribution Agreement with Ziman Realty Partners.
10.29 Contribution Agreement with Arthur Gilbert and Rosalinde Gilbert 1982 Trust.
10.30 Contribution Agreement with Arden Realty Group, Inc.
10.31 Office Market Study Prepared by Cushman & Wakefield of California, Inc.
21.1* Subsidiary of the Registrant.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Cushman & Wakefield of California, Inc.
23.3+ Consent of Latham & Watkins (contained in Exhibits 5.1 and 8.1).
23.4* Consent of Carl D. Covitz.
23.5* Consent of Kenneth B. Roath.
23.6* Consent of Arthur Gilbert.
23.7* Consent of Steven C. Good.
23.8 Consent of Jerry Asher.
24. Power of Attorney (see Page II-6).
27. Financial Data Schedule.
</TABLE>
- ------------------------
* Previously filed.
+ To be filed by Amendment.
