UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) September 30, 1997
ARDEN REALTY, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12193 95-4578533
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
9100 Wilshire Boulevard, East Tower, Suite 700 90212
Beverly Hills, California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 271-8600
Item 7. Financial Statements and Exhibits
(a) Financial statements of properties acquired
120 South Spalding Drive
Statement of Revenue and Certain Expenses:
Report of Independent Auditors
Statements of Revenue and Certain Expenses for the
Year Ended December 31, 1996
Notes to Statements of Revenue and Certain Expenses
1370 Valley Vista
Statement of Revenue and Certain Expenses:
Report of Independent Auditors
Statement of Revenue and Certain Expenses for the
Year Ended December 31, 1996
Notes to Statement of Revenue and Certain Expenses
Foremost Professional Plaza
Statement of Revenue and Certain Expenses:
Report of Independent Auditors
Statement of Revenue and Certain Expenses for the
Year Ended December 31, 1996
Notes to Statement of Revenue and Certain Expenses
(b) Pro forma financial information.
Pro Forma Condensed Consolidated Statements of Operations for the nine months
ended September 30, 1997 (Unaudited)
Pro forma Condensed Consolidated Statement of Operations for the year ended
December 31, 1996 (Unaudited)
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
Report of Independent Auditors
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of 120 South Spalding Drive for the year ended December 31, 1996. This
statement of revenue and certain expenses is the responsibility of the
management of 120 South Spalding Drive. 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. 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 120 South Spalding Drive for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Ernst & Young LLP
Los Angeles, California
August 20, 1997
<TABLE>
120 SOUTH SPALDING DRIVE
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
(In Thousands)
<S> <C>
Revenue:
Rental $ 693
Tenant recoveries 55
Parking - net of expenses 46
Other income 8
Total revenue 802
Certain Expenses:
Property operating and maintenance 282
Real estate taxes 121
Insurance 26
Total certain expenses 429
Excess of revenue over certain expenses $373
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
120 SOUTH SPALDING DRIVE
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of 120 South Spalding Drive (the "Property") located in Southern
California, which was acquired by Arden Realty, Inc. (the "Company") on
August 21, 1997 from a nonaffiliated third party. The Property was acquired
for $11,300,000 and has approximately 60,656 rentable square feet.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
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 the Property have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs
not directly comparable to the future operation of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
120 SOUTH SPALDING DRIVE
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
Use of Estimates
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
2. Commercial Office Property
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows:
1997 $ 772,000
1998 932,000
1999 829,000
2000 539,000
2001 387,000
Thereafter 2,095,000
$ 5,554,000
The above future minimum lease payments do not include specified payments
for tenant reimbursements of operating expenses.
Office space in the Property is generally leased to tenants under lease terms
which provide for the tenants to pay increases in operating expenses in excess
of specified amounts. At December 31, 1996, three of the Property's tenants
accounted for approximately 55% of the Property's aggregate annualized
base rent.
Report of Independent Auditors
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses of
1370 Valley Vista for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the management of 1370
Valley Vista. 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. 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 1370 Valley Vista for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Ernst & Young LLP
Los Angeles, California
August 25, 1997
<TABLE>
1370 VALLEY VISTA
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
(In Thousands)
<S> <C>
Revenue:
Rental $ 1,333
Tenant recoveries 116
Total revenue 1,449
Certain Expenses:
Property operating and maintenance 367
Real estate taxes 121
Insurance 49
Total certain expenses 537
Excess of revenue over certain expenses $ 912
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
1370 VALLEY VISTA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of 1370 Valley Vista (the "Property") located in Southern
California, which was acquired by Arden Realty, Inc. (the "Company") on
September 5, 1997, from a nonaffiliated third party. The Property was
acquired for $10,800,000 and has approximately 84,081 rentable square feet.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
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
the Property have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs
not directly comparable to the future operation of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
1370 VALLEY VISTA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
Use of Estimates
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
2. Commercial Office Property
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows:
1997 $1,355,000
1998 1,301,000
1999 1,266,000
2000 1,052,000
2001 981,000
Thereafter 911,000
6,866,000
The above future minimum lease payments do not include specified payments for
tenant reimbursements of operating expenses.
Office space in the Property is generally leased to tenants under lease terms
which provide for the tenants to pay increases in operating expenses in excess
of specified amounts. At December 31, 1996, three of the Property's tenants
accounted for approximately 68% of the Property's aggregate annualized base
rent.
Report of Independent Auditors
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses of
Foremost Professional Plaza for the year ended December 31, 1996. This
statement of revenue and certain expenses is the responsibility of the
management of Foremost Professional Plaza. 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. 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 Foremost Professional Plaza for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Ernst & Young LLP
Los Angeles, California
September 5, 1997
<TABLE>
FOREMOST PROFESSIONAL PLAZA
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
(In Thousands)
<S> <C>
Revenue:
Rental $ 856
Tenant recoveries 12
Parking - net of expenses 5
Total revenue 873
Certain Expenses:
Property operating and maintenance 94
Real estate taxes 42
Insurance 8
Total certain expenses 144
Excess of revenue over certain expenses $ 729
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
FOREMOST PROFESSIONAL PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of Foremost Professional Plaza (the "Property") located in Southern
California, which was acquired by Arden Realty, Inc. (the "Company") on
September 30, 1997, from a nonaffiliated third party. The Property was
acquired for $8,250,000 and has approximately 60,534 rentable square feet.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
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
the Property have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs
not directly comparable to the future operation of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
FOREMOST PROFESSIONAL PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the year ended December 31, 1996
Use of Estimates
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 revenue and expenses during the reporting period.
Actual results could differ from those estimates.
2. Commercial Office Property
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows:
1997 $ 765,000
1998 478,000
1999 130,000
2000 32,000
2001 32,000
Thereafter 11,000
1,448,000
The above future minimum lease payments do not include specified payments for
tenant reimbursements of operating expenses.
Office space in the Property is generally leased to tenants under lease terms
which provide for the tenants to pay increases in operating expenses in excess
of specified amounts.
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited pro forma condensed consolidated statements of
operations for the nine months ended September 30, 1997 and for the year ended
December 31, 1996 are presented as if: (i) the consummation of the initial
public offering of common stock in October 1996 (the "IPO"), and related
formation transactions in connection with the IPO; (ii) the acquisition of
properties acquired during 1996 (the "1996 Acquisitions"); and (iii) the
acquisition of properties described in Item 2 of the related Form 8K filed on
October 15, 1997, (the "1997 Third Quarter Acquisitions") had occurred at
January 1, 1996.
The pro forma condensed consolidated financial statements are not
necessarily indicative of what the actual financial position or results of
operations would have been had the Company completed the transactions
described above, nor do they purport to represent the future financial
position of the Company.
<TABLE>
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1997
(Unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Pro Forma Adjustments
Pre-Acquisition
Period for the 1997
Arden Third Quarter Other Arden Realty,
Realty, Inc. Acquisitions (B) Adjustments Inc. Pro Forma
Revenues
Rental $80,740 3,360 $ 150(C) $84,250
Tenant reimbursements 3,593 387 -- 3,980
Parking-net 5,267 29 -- 5,296
Other 1,451 14 -- 1,465
91,051 3,790 150 94,991
Other income 563 -- 1,123(D) 1,686
Total revenue 91,614 3,790 1,273 96,677
Expenses
Property expenses 29,175 1,191 7(E) 30,463
REIT general and
administrative 2,828 -- 172(F) 3,000
Interest 13,723 -- 2,165(G) 15,888
Loss on valuation of
derivative 3,111 -- -- 3,111
Depreciation and
amortization 13,261 -- 566(H) 13,827
Total expenses 62,098 1,191 3,000 66,289
Income before
minority interests 29,516 2,599 (1,727) 30,388
Minority interests (3,105) -- (92)(I) (3,197)
Net income $26,411 $2,599 $(1,819) $27,191
Weighted average common
shares outstanding before
the conversion of OP Units 25,440 25,440
Net income per
common share $1.04 $1.07
</TABLE>
See accompanying notes
<TABLE>
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
(Unaudited)
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Pro Forma Adjustments
Arden Realty, Equity in Net Loss of
Inc. Consolidated Arden Predecessors Noncombined Pre-acquisition
Oct. 9, 1996 to Combined Jan. 1, Entities Jan. 1, 1996 Period for the 1996 1997 Third Quarter
Dec. 31, 1996 1996 to Oct. 8, 1996 to Oct. 8, 1996 Acquisitions(A) Acquisitions(B)
Revenues
Rental $17,041 $32,287 $12,828 $23,095 $5,289
Tenant
reimbursements 803 2,031 243 733 254
Parking-net 1,215 3,692 846 1,161 51
Other 375 1,125 357 606 9
19,434 39,135 14,274 25,595 5,603
Other income 138 1,330 -- -- --
Total revenues 19,572 40,465 14,274 25,595 5,603
Expenses
Property expenses 6,005 14,224 6,053 11,449 1,777
General and
administrative 753 1,758 -- -- --
Interest 1,280 24,521 7,356 -- --
Depreciation and
amortization 3,108 5,264 2,705 -- --
Total expenses 11,146 45,767 16,114 11,449 1,777
Equity in net (loss)
of noncombined
entities -- (336) 336 -- --
Income (loss) before
minority interests
and extraordinary
items 8,426 (5,638) (1,504) 14,146 3,826
Minority interests (993) 721 (721) -- --
Income (loss)
before extra-
ordinary items 7,433 (4,917) (2,225) 14,146 3,826
Extraordinary (loss)
gain on early
extinguishment of
debt, net of
minority interests
share (13,105) 1,877 -- -- --
Net (loss) income $(5,672) $(3,040) $(2,225) $14,146 $3,826
Weighted average
common shares
outstanding
before
conversion of
OP Units 21,680
Net (loss) income
per common share $(0.26)
</TABLE>
<TABLE>
<S> <C> <C>
Other Arden Realty,
Adjustments Inc. Pro Forma
Revenues
Rental $ 98(C) $ 90,638
Tenant reimbursements -- 4,064
Parking - net -- 6,965
Other -- 2,472
104,139
Other income 253(D) 1,721
Total revenues 351 105,860
Expenses
Property expenses 258(E) 39,746
General Adminsitrative 1,489(F) 4,000
Interest (19,202)(G) 13,955
Depreciation and
amortization 3,487(H) 14,564
Total expenses (13,988) 72,265
Equity in net (loss) of
noncombined entities -- --
Income (loss) before
minority interests and
extraordinary items 14,339 33,595
Minority interests (3,025)(I) (4,019)
Income (loss) before
extraordinary items 11,314 29,577
Extraordinary (loss) gain on
early extinguishments of
debt, net of minority
interests share 11,228(J) --
Net (loss) income $22,542 $29,577
Weighted average common shares
outstanding before conversion
of OP Units 21,680
Net (loss) income per common share $ 1.36
</TABLE>
See accompanying notes.
ARDEN REALTY, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(Unaudited)
(in thousands)
1. Adjustments to the Pro Forma Condensed Consolidated Statements
of Operations
The pro forma adjustments reflected in the Pro Forma
Condensed Consolidated Statements of Operations for the nine
months ended September 30, 1997 and the year ended December 31,
1996 are set forth below:
A. Represents the preacquisition period for the 17 properties acquired in
1996.
<TABLE>
1996 Acquisitions
For the Year Ended December 31, 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
400 Imperial 10351
Corporate 5832 9665 Bank 100 303 Santa 2730 Grand
Pointe Bolsa Wilshire Tower Broadway Norwalk Glenoaks Monica Wilshire Avenue
Revenue
Rental $390 $80 $548 $1,351 $1,554 $1,387 $1,980 $1,134 $ 960 $--
Tenant reimbursements 103 -- 19 29 107 40 48 11 -- --
Parking, net 28 10 58 124 88 66 129 99 43 --
Other 23 -- 32 15 74 4 138 7 12 --
Total revenues 544 90 657 1,519 1,823 1,497 2,295 1,251 1,015 --
Property expenses 123 8 203 574 581 578 956 551 451 --
Excess of revenue over
certain expenses $421 $82 $454 $945 $1,242 $ 919 $1,339 $ 700 $ 564 $--
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Burbank Los
Executive Plaza Angeles Sumitomo
and California Center Corporate 5200 Bank Santa
Federal Building Promenade Center Century Building Monica Total
Revenue
Rental $2,156 $2,097 $5,882 $1,021 $1,926 $629 $23,095
Tenant reimbursements -- 51 128 115 79 3 733
Parking, net 164 -- -- 40 254 58 1,161
Other -- -- 288 2 9 2 606
Total revenues 2,320 2,148 6,298 1,178 2,268 692 25,595
Property expenses 976 982 2,881 1,188 1,070 327 11,449
Excess of revenue over
certain expenses $1,344 $1,166 $3,417 $ (10) $1,198 $365 $14,146
</TABLE>
B. Represents the actual preacquisition results for the 1997 Third Quarter
Acquisitions:
<TABLE>
The 1997 Third Quarter Acquisitions
For the Year Ended December 31, 1996
<S> <C> <C> <C> <C> <C> <C>
120 Bay 1370 Foremost
Spalding Tech Valley Renaissance Professional
Drive Center Vista Court Plaza Total
Revenue
Rental $693 $ $985 $1,333 $1,422 $856 $5,289
Tenant reimbursements 55 25 116 46 12 254
Parking, net 46 -- -- -- 5 51
Other 8 1 -- -- -- 9
Total revenues 802 1,011 1,449 1,468 873 5,603
Property expenses 429 371 537 296 144 1,777
Excess of revenue over
certain expenses $373 $ 640 $ 912 $1,172 $729 $3,826
</TABLE>
<TABLE>
Pre-Acquisition Period For the 1997 Third Quarter
Acquisitions
For the Nine Months Ended September 30, 1997
<S> <C> <C> <C> <C> <C> <C>
120 Bay 1370 Foremost
Spalding Tech Valley Renaissance Professional
Drive Center Vista Court Plaza Total
Revenue
Rental $435 $784 $ 736 $644 $761 $3,360
Tenant reimbursements 26 22 308 26 5 387
Parking, net 29 -- -- -- -- 29
Other 7 1 2 1 3 14
Total revenues 497 807 1,046 671 769 3,790
Property expenses 209 219 359 261 143 1,191
Excess of revenue over
certain expenses $288 $588 $ 687 $410 $626 $2,599
</TABLE>
C. Increase in rental revenue to adjust the 1996
Acquisitions and the 1997 Third Quarter
Acquisitions to straightline rental revenue
calculated as though the properties were purchased
at January 1, 1996
<TABLE>
<S> <C> <C>
D. Increase in other income: Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
Increase in other income relating
to interest income from the
mortgage notes receivable 1,123 1,506
Decrease in other income to
eliminate nonrecurring
construction fees which would not
have been realized by the Company
and certain management fees that
will not be earned. -- (1,253)
1,123 253
</TABLE>
E. Increase in property general and administrative expenses related to
additional property payroll costs relating to the 1997 Third Quarter
Acquisitions for the period ended September 30, 1997 and to the 1996
Acquisitions and 1997 Third Quarter Acquisitions for the period ended
December 31, 1996.
F. Increase in general and administrative expenses related to expected
level of operations as a public real estate investment trust and the
incremental increase relating to the management of additional properties.
<TABLE>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
<S> <C> <C>
G. Increase (decrease) in interest expense:
Decrease in interest
expense due to repayment of
mortgage loans and lines of credit $ -- $ (31,877)
Increase in interest
expense related to the new
mortgage loan and line of
credit with an interest rate
of LIBOR plus 1.5% and LIBOR
plus 1.45%, respectively,
for the period ended
December 31, 1996, and the
increase in interest expense
related to the increase to
the line of credit with an
interest rate ranging from
LIBOR plus 1.45% to LIBOR
plus 1.75% for the period
ended September 30, 1997. 1,702 11,862
Increase in interest
expense related to increase
to the City National Bank
line of credit with an
interest rate of City
National Bank Prime Rate
less 0.875% 463 618
Increase in amortization
of finance costs related to
the line of credit -- 195
Net increase (decrease) in
interest expense $ 2,165 $ (19,202)
</TABLE>
<TABLE>
<S> <C> <C>
Nine Months Ended Year Ended
September 30, 1997 December 31, 1996
H. Increase in depreciation expense:
Increase in depreciation
expense to reflect a full
nine months of depreciation
for the 1997 Third Quarter
Acquisitions for the nine
months ended September 30,
1997 and a full year of
depreciation for the 1996
Acquisitions and 1997 Third
Quarter Acquisitions for the
year ended December 31,
1996, utilizing a 40 year
useful life for buildings
and a 10 year useful life
for improvements $ 566 $ 3,357
Increase in depreciation
due to the fair value of
consideration paid in excess
of book value of interests
in properties acquired from
nonaffiliates in connection
with the completion of the
IPO -- 130
Net increase in
depreciation expense $ 566 $ 3,487
</TABLE>
I. To reflect adjustment for minority interest of
10.5% and 12% for the nine months ended September 30,
1997 and year end December 31, 1996, respectively, in
the Operating Partnership.
J. To eliminate net extraordinary loss related to
early extinguishment of debt.
(c) Exhibits.
Signatures
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto
duly authorized.
ARDEN REALTY, INC.
Date: November 13, 1997 By: /s/ Diana M. Laing
Diana M. Laing
Chief Financial Officer
