<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
------------------
Commission File Number 333-21873
Date of Report (date of earliest event reported): OCTOBER 30, 1997
FIRST INDUSTRIAL, L.P.
(Exact name of Registrant as specified in its Charter)
DELAWARE 36-3924586
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
(312) 344-4300
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 30, 1997, First Industrial, L.P. ( the "Operating Partnership")
acquired 91 light industrial properties (the "Pacifica Phase I Properties") in
Denver, Colorado, totaling approximately 3.5 million square feet of gross
leasable area (the "Pacifica Phase I Acquisition"). The Pacifica Phase I
Properties were acquired for approximately $168.2 million which was funded with
$148.1 million in cash and the issuance of approximately .6 million limited
partnership units in the Operating Partnership (the "Units") valued at
approximately $20.1 million. The $148.1 million in cash was funded with
borrowings under the Operating Partnership's $200 million unsecured revolving
credit facility (the "1996 Unsecured Acquisition Facility") with a group of
banks for which the First National Bank of Chicago and the Union Bank of
Switzerland act as agents. The $148.1 million borrowed under the Operating
Partnership's 1996 Unsecured Acquisition Facility currently bears interest at
LIBOR plus 1%. The Pacifica Phase I Properties were acquired from Pacifica
Turnpike II Limited Liability Company, PAC II Limited Liability Company,
Pacifica Fountainhead Limited Liability Company, John B. Bertram Trust, H-B
Trust, IJM Investments, Pacifica N-I24, LLC, 15200 Commerce Partners, I.G.
Equities, Pacifica Industrial V Ltd., Liability, Pacifica Central Partnership,
Pacifica Gateway Limited Liability Company, Pacifica Hilltop Partnership, C.G.
Property Development Company, Pacifica Northeast Industrial Partnership,
Pacifica Industrial Denver I-70, C&L Denver I, Kaplan MB Properties II, A&R
Management and Development Co. No. 1, L.P., Pacifica North I-25 Industrial,
LLC., FTS, LLC, Pacifica Broadway Partnership, Pacifica 6400 Broadway
Partnership, The Stanley and Linda Gerlach Family Trust Dated 6-28-85, Pacifica
Denver VIII Limited Liability Company, BBS/PAC, Ltd. Liability Company, First
Trust Corporation, Pacifica Denver VI Limited Liability Company, Pacifica
Turnpike Park Partnership, Equity Industrial II, L.P., Jordan Park Limited
Liability Company, East 46th Partnership, Interstate Business Center, L.L.C.,
Apollo/Pacifica, LLC, Pacifica Development Properties II Limited Liability
Company, Pacifica ARKA Garrison Park Partnership, K Associates, Pacifica West
Evans Partnership, Pacifica/ARKA West Park Partnership, ARGC Partners, John A.
And Gloria H. Sage as Co-Trustees of the Jack and Gloria Sage Family Trust,
Kaplan MB Properties II, Pacifica/ARKA Arapahoe Partnership, A&R Management and
Development, Pacifica ILIFF Business Park Limited Liability Company, Russell S.
Bishop III and Mary M. Bishop as Co-Trustees, Bishop Family Trust, George
Hemminger IRA, Pacifica Southpark I Limited Liability Company,
Pacifica/ARKAI-225 Partnership, Kozen Family, LLC, Pacifica South Federal
Business Center, L.P., Pacifica ARKA Upland I Limited Liability Company, The
Jack and Gloria Sage Family Trust Agreement Dated 6/7/94, Pacifica 6th West
L.P., George M. Hemminger IRA, James A. Collins and Carol L. Collins, Trustee
of the Collins Family Trust Dated May 9, 1969 (together, the "Pacifica
Group"). Prior to the Pacifica Phase I Acquisition, the Pacifica Group was not
affiliated with the Operating Partnership, any affiliate of the Operating
Partnership or any director or officer of the Operating Partnership. Following
the Pacifica Phase I Acquisition, Timothy Gudim was appointed regional director
and Gregory Downs was appointed regional development officer. The Pacifica
Phase I Properties will continue to be used for light industrial use under the
existing lease terms.
In connection with the Pacifica Phase I Acquisition, the Operating
Partnership completed negotiations with the Pacifica Group to acquire an
additional 15 properties totaling approximately .7 million square feet of gross
leasable area (the "Pacifica Phase II Properties") (together with the Pacifica
Phase I Properties, the "Pacifica Acquisition Properties") for approximately
$25.4 million (the "Pacifica Phase II Acquisition"). The Pacifica Phase II
Acquisition will be funded with cash and Units and is scheduled to close within
the next several months. The Pacifica Phase II Properties will be used for
light industrial use under the existing lease terms.
The Operating Partnership is completing negotiations to acquire 64
properties totaling approximately 4.8 million square feet of gross leasable
area (the "Sealy Acquisition Properties") for approximately $128.5 million. The
Sealy Acquisition Properties will be funded with cash and Units and is
scheduled to close by November 30, 1997. The Sealy Acquisition Properties will
be used for light industrial and bulk warehouse use under existing lease terms.
ITEM 5. OTHER EVENTS
Since the filing of the Operating Partnership's Form 8-K/A No. 2 dated
June 30, 1997, exclusive of the Pacifica Acquisition Properties and the Sealy
Acquisition Properties described above, the Operating Partnership acquired 32
industrial properties and two land parcels for future development from
unrelated parties during the period July 15, 1997 through October 31, 1997, the
closing date of the last industrial property acquired. The combined purchase
price
1
<PAGE> 3
for these industrial properties and land parcels totaled approximately $69.4
million, excluding development costs incurred subsequent to the acquisition of
the land parcels and closing costs incurred in conjunction with the acquisition
of the industrial properties and land parcels. The 32 industrial properties
and two land parcels acquired are described below and were funded with working
capital, the issuance of Units and borrowings under the Operating Partnership's
1996 Unsecured Acquisition Facility. The Operating Partnership has continued
the pre-acquisition uses of the properties. With respect to the land parcels
purchased, the Operating Partnership intends to develop the land parcels and
operate the facilities as industrial rental property.
- - On August 6, 1997, the Operating Partnership purchased a land parcel
located in Minneapolis, Minnesota for approximately $.3 million. The land
parcel was purchased from Ronald A. Signorelli and John B. Pfaff.
- - On September 19, 1997, the Operating Partnership purchased three light
industrial properties totaling 106,721 square feet located in Oakwood,
Ohio. The purchase price of the properties was approximately $3.4
million. The properties were purchased from Oak Leaf Industrial Mall,
L.P.
- - On September 19, 1997, the Operating Partnership purchased two light
Industrial Properties totaling 62,395 square feet located in Independence,
Ohio. The purchase price of the properties was approximately $2.5
million. The properties were purchased from Valley Belt Industrial Mall,
L.P.
- - On September 22, 1997, the Operating Partnership purchased a 102,400
square foot bulk warehouse property located in Taylor, Michigan for
approximately $3.0 million. The property was purchased from Virginia
United, a Michigan co-partnership.
- - On September 26, 1997, the Operating Partnership purchased a 97,518 square
foot bulk warehouse property located in Kennesaw, Georgia for
approximately $5.2 million. The property was purchased from The Guardian
Insurance & Annuity Company, Inc, a Delaware corporation.
- - On September 29, 1997, the Operating Partnership purchased a 35,114 square
foot light industrial property located in Hazelwood, Missouri. The
purchase price for the property was approximately $1.0 million. The
property was purchased from McDonnell Douglas Corporation, a Maryland
corporation. This property was owner occupied prior to purchase.
- - On September 30, 1997, the Operating Partnership purchased a 570,000
square foot light industrial property located in Florence, Kentucky. The
purchase price for the property was approximately $6.0 million. The
property was purchased from Equitable Bag Co., Inc. This property was
owner occupied prior to purchase.
- - On October 1, 1997, the Operating Partnership purchased a 51,525 square
foot light industrial property located in Streetsboro, Ohio. The purchase
price for the property was approximately $2.2 million. The property was
purchased from Ethan Investment Corporation.
- - On October 7, 1997, the Operating Partnership purchased four bulk
warehouse properties totaling 476,401 square feet and one 80,400 square
foot light industrial property located in Chicago, Illinois for
approximately $10.0 million which was funded with $4.8 million in cash and
approximately .2 million Units valued at approximately $5.2 million in the
aggregate. The Properties were purchased from RJB Ford City Limited
Partnership.
- - On October 14, 1997, the Operating Partnership purchased a land parcel
located in Cheshire, Connecticut for approximately $.9 million. The land
parcel was purchased from River Valley Farm, Inc.
- - On October 17, 1997, the Operating Partnership purchased seven light
industrial properties totaling 480,118 square feet located in Nashville,
Tennessee. The purchase price for the properties was approximately $17.7
million. The properties were purchased from Metropolitan Life Insurance
company, a New York corporation.
2
<PAGE> 4
- - On October 21, 1997, the Operating Partnership purchased two light
Industrial Properties totaling 68,635 square feet located in Hicksville,
New York. The purchase price of the properties was approximately $1.9
million. The properties were purchased from Mastex Associates, a New York
partnership.
- - On October 23, 1997, the Operating Partnership purchased one bulk
warehouse property totaling 252,000 square feet and five light industrial
properties totaling 137,031 square feet located in the metropolitan area
of Chicago, Illinois for approximately $9.0 million which was funded with
$7.7 million in cash and approximately .05 million Units valued at
approximately $1.3 million in the aggregate. The properties were
purchased from Rob Commercial Joint Ventures Limited and RJB II, L.P.
- - On October 28, 1997, the Operating Partnership purchased a 32,000 square
foot light industrial property located in Willoughby, Ohio. The purchase
price for the property was approximately $.9 million. The property was
purchased from Hamann Parkway Limited.
- - On October 31, 1997, the Operating Partnership purchased an 89,456 square
foot light industrial property located in Minneapolis, Minnesota. The
purchase price for the property was approximately $5.4 million. The
property was purchased from City West Associates, L.L.P.
3
<PAGE> 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Combined Historical Statements of Revenues and Certain Expenses
for the 1997 Acquisition II Properties - Unaudited.
Combined Historical Statements of Revenues and Certain Expenses
for the Pacifica Acquisition Properties and Notes thereto with
Independent Accountant's report dated October 27, 1997.
Combined Historical Statements of Revenues and Certain Expenses
for the Sealy Acquisition Properties and Notes thereto with
Independent Accountant's report dated October 16, 1997.
Combined Historical Statements of Revenues and Certain Expenses
for the 1997 Acquisition III Properties and Notes thereto with
Independent Accountant's report dated October 20, 1997.
(b) Pro Forma Financial Information:
Pro Forma Statement of Operations for the Six Months Ended
June 30, 1997.
Pro Forma Statement of Operations for the Year Ended
December 31, 1996.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibits Number Description
- --------------- -----------
<S> <C>
23 Consent of Coopers & Lybrand L.L.P.
Independent Accountants
</TABLE>
4
<PAGE> 6
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1997 ACQUISITION II PROPERTIES
Combined Historical Statements of Revenues and Certain Expenses for the
1997 Acquisition II Properties for the Six Months Ended June 30, 1997
and the Year Ended December 31, 1996 - Unaudited..................... 6
PACIFICA ACQUISITION PROPERTIES
Report of Independent Accountants.................................... 7
Combined Historical Statements of Revenues and Certain Expenses for
the Pacifica Acquisition Properties for the Six Months Ended
June 30, 1997 and for the Year Ended December 31, 1996............... 8
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................. 9-10
SEALY ACQUISITION PROPERTIES
Report of Independent Accountants.................................... 11
Combined Historical Statements of Revenues and Certain Expenses for
the Sealy Acquisition Properties for the Six Months Ended June 30,
1997 and for the Year Ended December 31, 1996........................ 12
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................. 13-14
1997 ACQUISITION III PROPERTIES
Report of Independent Accountants.................................... 15
Combined Historical Statements of Revenues and Certain Expenses for
the 1997 Acquisition III Properties for the Six Months Ended
June 30, 1997 and for the Year Ended December 31, 1996............... 16
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................. 17-18
PRO FORMA FINANCIAL INFORMATION
Pro Forma Statement of Operations for the Six Months Ended
June 30, 1997........................................................ 19-20
Notes to Pro Forma Financial Statements.............................. 21-22
Pro Forma Statement of Operations for the Year Ended December 31,
1996................................................................. 23-25
Notes to Pro Forma Financial Statements.............................. 26-28
</TABLE>
5
<PAGE> 7
1997 ACQUISITION II PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
The Combined Historical Statements of Revenues and Certain Expenses as
shown below, present the summarized results of operations of 23 of the 202
properties acquired or contracted to be acquired by First Industrial, L.P. (the
"Operating Partnership") during the period July 15, 1997 through October 31,
1997 ( the "1997 Acquisition II Properties"). These statements are exclusive
of 91 properties (the "Pacifica Phase I Properties") acquired by the Operating
Partnership on October 30, 1997 and 15 properties (the "Pacifica Phase II
Properties") contracted to be acquired by the Operating Partnership within the
next several months (together, the "Pacifica Acquisition Properties"), which
have been audited and are included elsewhere in this Form 8-K, 64 properties
(the "Sealy Acquisition Properties") contracted to be acquired by the Operating
Partnership by November 30, 1997, which have been audited and are included
elsewhere in this Form 8-K and seven properties (the "1997 Acquisition III
Properties") acquired by the Operating Partnership on October 17, 1997 which
have been audited and are included elsewhere in this Form 8-K, two parcels of
land for future development and two properties occupied by the previous owner
during the period July 15, 1997 through October 31, 1997.
The 1997 Acquisition II Properties were acquired for an aggregate
purchase price of approximately $43.5 million, have an aggregate gross
leaseable area of approximately 1.6 million square feet. A description of each
property is included in Item 5.
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
(UNAUDITED) (UNAUDITED)
-------------- -----------------
<S> <C> <C>
Revenues:
Rental Income.................................... $ 3,003 $ 5,692
Tenant Recoveries and Other Income............... 629 1,203
-------------- -----------------
Total Revenues................................ 3,632 6,895
-------------- -----------------
Expenses:
Real Estate Taxes................................ 737 1,433
Repairs and Maintenance.......................... 178 409
Property Management.............................. 128 237
Utilities......................................... 25 47
Insurance........................................ 31 50
Other............................................ 3 31
-------------- -----------------
Total Expenses................................ 1,102 2,207
-------------- -----------------
Revenues in Excess of Certain Expenses............ $ 2,530 $ 4,688
=============== =================
</TABLE>
6
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of First Industrial, L.P.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the Pacifica Acquisition Properties as described in
Note 1 for the year ended December 31, 1996. This financial statement is the
responsibility of the Pacifica Acquisition Properties' management. Our
responsibility is to express an opinion on this financial statement 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 financial statement 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 the 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 historical statement of revenues 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 Form
8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be
a complete presentation of the Pacifica Acquisition Properties' revenues and
expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Pacifica
Acquisition Properties for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 27, 1997
7
<PAGE> 9
PACIFICA ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
Revenues:
Rental Income..................................... $ 8,846 $ 16,849
Tenant Recoveries and Other Income................ 1,868 3,453
------------- -----------------
Total Revenues................................. 10,714 20,302
------------- -----------------
Expenses:
Real Estate Taxes................................. 1,241 2,521
Repairs and Maintenance........................... 767 1,554
Property Management............................... 423 767
Utilities......................................... 282 547
Insurance......................................... 89 116
Other............................................. 7 155
------------- -----------------
Total Expenses................................. 2,809 5,660
------------- -----------------
Revenues in Excess of Certain Expenses............ $ 7,905 $ 14,642
============= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 10
PACIFICA ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses
(the "Statements") combined the results of operations of 91 properties acquired
by First Industrial, L.P. (the "Operating Partnership") and 15 properties to be
acquired within the next several months (together, the "Pacifica Acquisition
Properties").
The Pacifica Acquisition Properties are contracted to be acquired for
an aggregate purchase price of approximately $193.6 million. Summary
information regarding the Pacifica Acquisition Properties is as follows:
<TABLE>
<CAPTION>
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ------------------------ -----------------
<C> <C> <C> <C>
Denver, CO 106 4,123,846 (a)
</TABLE>
- -----------------
(a) Rental history commenced on January 1, 1996 for 101 of the buildings.
Rental history for the remaining five buildings, totaling 165,717 square
feet, commenced after June 30, 1997 when these buildings were placed in
service.
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the Pacifica Acquisition Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting periods. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of
scheduled rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
9
<PAGE> 11
PACIFICA ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The Pacifica Acquisition Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
<CAPTION>
Pacifica
Acquisition
Properties
-----------
<S> <C>
1997 $11,888
1998 10,476
1999 7,803
2000 5,410
2001 3,150
Thereafter 4,050
-------
Total $42,777
=======
</TABLE>
10
<PAGE> 12
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of First Industrial, L.P.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the Sealy Acquisition Properties as described in Note
1 for the year ended December 31, 1996. This financial statement is the
responsibility of the Sealy Acquisition Properties' management. Our
responsibility is to express an opinion on this financial statement 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 financial statement 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 the 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 historical statement of revenues 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 Form
8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be
a complete presentation of the Sealy Acquisition Properties' revenues and
expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Sealy
Acquisition Properties for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 16, 1997
11
<PAGE> 13
SEALY ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
Revenues:
Rental Income............................ $ 8,113 $ 15,163
Tenant Recoveries and Other Income....... 968 1,546
------------- -----------------
Total Revenues......................... 9,081 16,709
------------- -----------------
Expenses:
Real Estate Taxes........................ 1,097 2,068
Repairs and Maintenance.................. 903 1,546
Property Management...................... 391 700
Utilities................................ 243 329
Insurance................................ 126 264
Other.................................... --- ---
------------- -----------------
Total Expenses........................ 2,760 4,907
------------- -----------------
Revenues in Excess of Certain Expenses.... $ 6,321 $ 11,802
============= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 14
SEALY ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combined the results of operations of 64 properties contracted to
be acquired by November 30, 1997 (the "Sealy Acquisition Properties") by First
Industrial, L.P. (the "Operating Partnership"). Summary information regarding
the Sealy Acquisition Properties is as follows:
The Sealy Acquisition Properties are contracted to be acquired for an
aggregate purchase price of approximately $128.5 million. Summary information
responding to Sealy acquisition properties as follows:
<TABLE>
<CAPTION>
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ------------------------ -----------------
<C> <C> <C> <C>
Atlanta, GA 2 67,569 January 1, 1996
Baton Rouge, LA 4 225,147 January 1, 1996
Dallas, TX 19 1,620,442 January 1, 1996
Houston, TX 22 2,127,201 January 1, 1996
New Orleans, LA 14 557,453 January 1, 1996
Shreveport, LA 1 50,000 January 1, 1996
Tampa, FL 2 153,377 January 1, 1996
------------------------
TOTAL 64 4,801,189
========================
</TABLE>
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the Sealy Acquisition Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting periods. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
13
<PAGE> 15
SEALY ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The Sealy Acquisition Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
<CAPTION>
Sealy
Acquisition
Properties
-----------
<S> <C>
1997 $ 16,482
1998 13,525
1999 9,404
2000 5,057
2001 2,625
Thereafter 2,861
--------
Total $ 49,954
========
</TABLE>
14
<PAGE> 16
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of First Industrial, L.P.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the 1997 Acquisition III Properties as described in
Note 1 for the year ended December 31, 1996. This financial statement is the
responsibility of the 1997 Acquisition III Properties' management. Our
responsibility is to express an opinion on this financial statement 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 financial statement 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 the 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 historical statement of revenues 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 Form
8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be
a complete presentation of the 1997 Acquisition III Properties' revenues and
expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the 1997
Acquisition III Properties for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 20, 1997
15
<PAGE> 17
1997 ACQUISITION III PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
Revenues:
Rental Income.................................... $ 952 $ 1,945
Tenant Recoveries and Other Income............... 123 244
------------- -----------------
Total Revenues................................ 1,075 2,189
------------- -----------------
Expenses:
Real Estate Taxes................................ 105 222
Repairs and Maintenance.......................... 82 168
Property Management.............................. 45 91
Utilities........................................ 23 51
Insurance........................................ 7 14
Other............................................ 46 4
------------- -----------------
Total Expenses................................ 308 550
------------- -----------------
Revenues in Excess of Certain Expenses............ $ 767 $ 1,639
============= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 18
1997 ACQUISITION III PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combined the results of operations of seven properties acquired
by First Industrial, L.P. (the "Operating Partnership") on October 17, 1997
(the "1997 Acquisition III Properties").
The 1997 Acquisition III Properties were acquired for an aggregate
purchase price of approximately $ 17.7 million. Summary information regarding
the 1997 Acquisition III Properties is as follows:
<TABLE>
<CAPTION>
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ------------------------ -----------------
<C> <C> <C> <C>
Nashville, TN 7 480,118 January 1, 1996
</TABLE>
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the 1997 Acquisition III Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting periods. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
17
<PAGE> 19
1997 ACQUISITION III PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The 1997 Acquisition III Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
<CAPTION>
1997
Acquisition III
Properties
---------------
<S> <C>
1997 $ 1,581
1998 1,256
1999 720
2000 395
2001 229
Thereafter 497
---------------
Total $ 4,678
===============
</TABLE>
18
<PAGE> 20
FIRST INDUSTRIAL, L.P.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 Lazarus Punia Other 1997
First Acquisition Burman Acquisition Acquisition
Industrial, L.P. Property Properties Properties Properties
(Historical) (Historical) (Historical) (Historical) (Historical)
Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e)
---------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Rental Income....................... $32,447 $20 $1,501 $5,354 $ 952
Tenant Recoveries and
Other Income....................... 7,831 5 374 1,157 461
------- ---- ------ ------ -----
Total Revenues.................... 40,278 25 1,875 6,511 1,413
------- ---- ------ ------ -----
EXPENSES:
Real Estate Taxes................... 6,933 4 396 983 431
Repairs and Maintenance............. 1,715 1 119 267 48
Property Management................. 1,766 1 59 124 15
Utilities........................... 1,160 3 77 268 6
Insurance........................... 95 --- 22 85 8
Other............................... 514 --- 37 --- ---
General and Administrative.......... 2,642 --- --- --- ---
Interest Expense.................... 9,107 --- --- --- ---
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.............................. 8 --- --- --- ---
Depreciation and Other
Amortization....................... 6,243 --- --- --- ---
------- ---- ------ ------ -----
Total Expenses.................... 30,183 9 710 1,727 508
------- ---- ------ ------ -----
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and
Extraordinary Item.................. 10,095 16 1,165 4,784 905
Disposition of Interest Rate
Protection Agreements............... 4,038 --- --- --- ---
Gain on Sales of Properties.......... 460 --- --- --- ---
------- ---- ------ ------ -----
Income Before Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item................................ 14,593 16 1,165 4,784 905
Equity in Income of Other Real
Estate Partnerships................. 8,030 --- --- --- ---
------- ---- ------ ------ -----
Income Before Extraordinary
Item................................ $22,623 $16 $1,165 $4,784 $ 905
======= ==== ====== ====== =====
<CAPTION>
1997
Acquisition I
Properties Subtotal
(Historical) Carry
Note 2 (f) Forward
------------- ---------
<S> <C> <C>
REVENUES:
Rental Income....................... $550 $40,824
Tenant Recoveries and
Other Income....................... 236 10,064
----- -------
Total Revenues.................... 786 50,888
----- -------
EXPENSES:
Real Estate Taxes................... 194 8,941
Repairs and Maintenance............. 31 2,181
Property Management................. 22 1,987
Utilities........................... 1 1,515
Insurance........................... 5 215
Other............................... --- 551
General and Administrative.......... --- 2,642
Interest Expense.................... --- 9,107
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.............................. --- 8
Depreciation and Other
Amortization....................... --- 6,243
----- -------
Total Expenses.................... 253 33,390
----- -------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and
Extraordinary Item.................. 533 17,498
Disposition of Interest Rate
Protection Agreements............... --- 4,038
Gain on Sales of Properties.......... --- 460
----- -------
Income Before Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item................................ 533 21,996
Equity in Income of Other Real
Estate Partnerships................. --- 8,030
----- -------
Income Before Extraordinary
Item................................ $533 $30,026
===== =======
</TABLE>
The accompanying notes are an integral part of the pro forma financial statement
19
<PAGE> 21
FIRST INDUSTRIAL, L.P.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 1997
Pacifica Sealy Acquisition Acquisition
Acquisition Acquisition III II
Subtotal Properties Properties Properties Properties Pro Forma
Carry (Historical) (Historical) (Historical) (Historical) Adjustments
Forward Note 2 (g) Note 2 (h) Note 2 (i) Note 2 (j) Note 2 (k)
------- ------------ ------------ ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Rental Income................... $40,824 $8,846 $8,113 $ 952 $3,003 $ ---
Tenant Recoveries and
Other Income................... 10,064 1,868 968 123 629 ---
------- ------ ------ ----- ------ --------
Total Revenues................ 50,888 10,714 9,081 1,075 3,632 ---
------- ------ ------ ----- ------ --------
EXPENSES:
Real Estate Taxes............... 8,941 1,241 1,097 105 737 ---
Repairs and Maintenance......... 2,181 767 903 82 178 ---
Property Management............. 1,987 423 391 45 128 ---
Utilities....................... 1,515 282 243 23 25 ---
Insurance....................... 215 89 126 7 31 ---
Other........................... 551 7 --- 46 3 ---
General and Administrative...... 2,642 --- --- --- --- ---
Interest Expense................ 9,107 --- --- --- --- 5,254
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.......................... 8 --- --- --- --- ---
Depreciation and Other
Amortization.................... 6,243 --- --- --- --- 5,445
------- ------ ------ ----- ------ --------
Total Expenses................ 33,390 2,809 2,760 308 1,102 10,699
------- ------ ------ ----- ------ --------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item........................... 17,498 7,905 6,321 767 2,530 (10,699)
Disposition of Interest Rate
Protection Agreements........... 4,038 --- --- --- --- ---
Gain on Sales of Properties...... 460 --- --- --- --- ---
------- ------ ------ ----- ------ --------
Income Before Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item........................... 21,996 7,905 6,321 767 2,530 (10,699)
Equity in Income of Other Real
Estate Partnerships............ 8,030 --- --- --- --- 371
------- ------ ------ ----- ------ --------
Income Before Extraordinary
Item........................... $30,026 $7,905 $6,321 $ 767 $2,530 $(10,328)
======= ====== ====== ===== ====== ========
<CAPTION>
First
Industrial,
L.P.
Pro Forma
-----------
<S> <C>
REVENUES:
Rental Income................... $61,738
Tenant Recoveries and
Other Income................... 13,652
-------
Total Revenues................ 75,390
-------
EXPENSES:
Real Estate Taxes............... 12,121
Repairs and Maintenance......... 4,111
Property Management............. 2,974
Utilities....................... 2,088
Insurance....................... 468
Other........................... 607
General and Administrative...... 2,642
Interest Expense................ 14,361
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.......................... 8
Depreciation and Other
Amortization.................... 11,688
-------
Total Expenses................ 51,068
-------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item........................... 24,322
Disposition of Interest Rate
Protection Agreements........... 4,038
Gain on Sales of Properties...... 460
-------
Income Before Equity in Income
of Other Real Estate
Partnerships and
Extraordinary
Item........................... 28,820
Equity in Income of Other Real
Estate Partnerships............ 8,401
-------
Income Before Extraordinary
Item........................... $37,221
=======
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statement.
20
<PAGE> 22
FIRST INDUSTRIAL, L.P.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial, L.P. (the "Operating Partnership") was organized as a
limited partnership in the state of Delaware on November 23, 1993. The sole
general partner is First Industrial Realty Trust, Inc. (the "Company") with an
approximate 88.0% ownership interest at June 30, 1997.
The accompanying unaudited proforma statement of operations for the
Operating Partnership reflects the historical operations of the Operating
Partnership for the period January 1, 1997 through June 30, 1997, the
acquisition of one property on January 9, 1997 (the "1997 Acquisition
Property") and 39 properties acquired on January 31, 1997 (the "Lazarus Burman
Properties") which are reported on Form 8-K/A No.1 dated February 12, 1997, 15
properties (the "Punia Phase I Properties") acquired on June 30, 1997 and 27
properties acquired through October 31, 1997 and six properties to be acquired
(the "Punia Phase II Properties") (together, the "Punia Acquisition
Properties") which are reported on Form 8-K/A No.1 dated June 30, 1997, 9
properties acquired during the period February 1, 1997 through July 14, 1997
(the "Other 1997 Acquisition Properties"), two properties acquired during the
period February 1, 1997 through July 14, 1997 (the "1997 Acquisition I
Properties") reported on Form 8-K/A No. 2 dated June 30, 1997 and the
acquisition of 91 properties on October 30, 1997 and the additional 15
properties to be acquired within the next several months (together, the
"Pacifica Acquisition Properties"), 64 properties to be acquired by November
30, 1997 (the "Sealy Acquisition Properties"), seven properties acquired on
October 17, 1997 (the "1997 Acquisition III Properties") and 23 properties
acquired during the period July 15, 1997 through October 31, 1997 (the "1997
Acquisition II Properties") reported on this Form 8-K dated October 30, 1997.
The accompanying unaudited pro forma financial statement has been prepared
based upon certain pro forma adjustments to the historical June 30, 1997
financial statements of the Operating Partnership. The pro forma statement of
operations for the six months ended June 30, 1997 has been prepared as if the
properties acquired subsequent to December 31, 1996 had been acquired on either
January 1, 1996 or the lease commencement date if the property was developed
and as if the 8 3/4% Series B Preferred Units issued on May 14, 1997 (the
"Series B Preferred Capital Contribution"), the 8 5/8% Series C Preferred Units
issued on June 6, 1997 (the "Series C Preferred Capital Contribution"), the
637,440 Operating Partnership units issued September 16, 1997 (the "September
1997 Capital Contribution") and the 5,400,000 Operating Partnership units
issued on October 15, 1997 (the "October 1997 Capital Contribution") had been
completed on January 1, 1996.
The unaudited pro forma financial statement is not necessarily indicative
of what the Operating Partnership's results of operations would have been for
the six months ended June 30, 1997 had the properties been acquired as
described above, nor do they purport to present the future results of
operations of the Operating Partnership.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - JUNE 30, 1997
(a) The historical operations reflect the operations of the Operating
Partnership for the period January 1, 1997 through June 30, 1997 as
reported on the Company's Form 10-Q/A No. 1 dated August 26, 1997.
(b) The historical operations reflect the operations of the 1997
Acquisition Property for the period January 1, 1997 through the
acquisition date of this property on January 9, 1997.
(c) The historical operations reflect the operations of the Lazarus Burman
Properties for the period January 1, 1997 through January 31, 1997.
(d) The historical operations reflect the operations of the Punia
Acquisition Properties for the period January 1, 1997 through June 30,
1997.
21
<PAGE> 23
FIRST INDUSTRIAL, L.P.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(e) The historical operations reflect the operations of the Other 1997
Acquisition Properties for the period January 1, 1997 through the earlier
of June 30, 1997 or their respective acquisition dates.
(f) The historical operations reflect the operations of the 1997 Acquisition
I Properties for the period January 1, 1997 through the earlier of June
30, 1997 or their respective acquisition dates.
(g) The historical operations reflect the operations of the Pacifica
Acquisition Properties for the period January 1, 1997 through June 30,
1997.
(h) The historical operations reflect the operations of the Sealy Acquisition
Properties for the period January 1, 1997 through June 30, 1997.
(i) The historical operations reflect the operations of the 1997 Acquisition
III Properties for the period January 1, 1997 through June 30, 1997.
(j) The historical operations reflect the operations of the 1997 Acquisition
II Properties for the period January 1, 1997 through June 30, 1997.
(k) In connection with the Lazarus Burman Properties acquisition, the
Operating Partnership assumed two mortgage loans totaling $4.5 million
(the "Lazarus Burman Mortgage Loans"). The interest expense adjustment
reflects interest on the Lazarus Burman Mortgage Loans for the pro forma
period and as if such indebtedness was outstanding beginning January 1,
1996.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate
("LIBOR") plus 1%) for the assumed earlier purchase of the 1997
Acquisition Property, the Lazarus Burman Properties, the Punia
Acquisition Properties, the Other 1997 Acquisition Properties, the 1997
Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy
Acquisition Properties, the 1997 Acquisition III Properties and the 1997
Acquisition II Properties, offset by the interest savings related to the
assumed repayment of $144.0 million of acquisition facility borrowings on
January 1, 1996 from the proceeds of the Series B Preferred Capital
Contribution and Series C Preferred Capital Contribution and the assumed
repayment of $196.1 million of acquisition facility borrowings on January
1, 1996 from the proceeds of the September 1997 Capital Contribution and
the October 1997 Capital Contribution.
The depreciation and amortization adjustments reflect the charges for the
1997 Acquisition Property, the Lazarus Burman Properties, the Punia
Acquisition Properties, the Other 1997 Acquisition Properties, the 1997
Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy
Acquisition Properties, the 1997 Acquisition III Properties and the 1997
Acquisition II Properties from January 1, 1997 through the earlier of
their respective acquisition date or June 30, 1997 and if such
properties were acquired on January 1, 1996.
The equity in income of other real estate partnerships adjustment
reflects the Operating Partnership's 99% limited partnership equity
interest in an acquisition made by First Industrial Pennsylvania
Partnership, L.P. and the operations of an acquisition made by First
Industrial Financing Partnership, L.P.
22
<PAGE> 24
FIRST INDUSTRIAL, L.P.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
First First Other
Industrial, Highland Acquisition Acquisition
L.P. Properties Properties Properties
(Historical) (Historical) (Historical) (Historical)
Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d)
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Rental Income................................ $ 29,166 $ 1,385 $ 1,029 $ 2,893
Tenant Recoveries and
Other Income................................ 8,421 99 218 469
----------- ---------- ----------- -----------
Total Revenues............................. 37,587 1,484 1,247 3,362
----------- ---------- ----------- -----------
EXPENSES:
Real Estate Taxes............................ 6,109 129 237 519
Repairs and Maintenance...................... 1,071 89 45 139
Property Management.......................... 1,153 62 40 109
Utilities.................................... 1,047 153 21 68
Insurance.................................... 271 23 14 44
Other........................................ 284 --- --- ---
General and Administrative................... 4,014 --- --- ---
Interest Expense............................. 4,685 --- --- ---
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs.................... 196 --- --- ---
Depreciation and Other
Amortization................................ 6,310 --- --- ---
----------- ---------- ----------- -----------
Total Expenses............................ 25,140 456 357 879
----------- ---------- ----------- -----------
Income Before Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and Extraordinary
Item........................................ 12,447 1,028 890 2,483
Gain on Sale of Properties.................... 4,344 --- --- ---
----------- ---------- ----------- -----------
Income Before Equity in Income of Other Real
Estate Partnerships and Extraordinary
Item......................................... 16,791 1,028 890 2,483
Equity in Income of Other Real Estate
Partnerships................................. 20,130 --- --- ---
----------- ---------- ----------- -----------
Income Before Extraordinary
Item......................................... $ 36,921 $ 1,028 $ 890 $ 2,483
============ ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
1996 1997
Acquisition Acquisition
Properties Property
(Historical) (Historical) Subtotal
Note 2 (e) Note 2 (f) Carry Forward
----------- ----------- --------------
<S> <C> <C> <C>
REVENUES:
Rental Income................................ $ 7,601 $ 948 $ 43,022
Tenant Recoveries and
Other Income................................ 944 210 10,361
----------- ----------- --------------
Total Revenues............................. 8,545 1,158 53,383
----------- ----------- --------------
EXPENSES:
Real Estate Taxes............................ 1,283 167 8,444
Repairs and Maintenance...................... 539 62 1,945
Property Management.......................... 354 30 1,748
Utilities.................................... 30 135 1,454
Insurance.................................... 65 --- 417
Other........................................ 2 --- 286
General and Administrative................... --- --- 4,014
Interest Expense............................. --- --- 4,685
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs.................... --- --- 196
Depreciation and Other
Amortization................................ --- --- 6,310
----------- ----------- --------------
Total Expenses............................ 2,273 394 29,499
----------- ----------- --------------
Income Before Gain on Sales of
Properties, Equity in Income
of Other Real Estate
Partnerships and Extraordinary
Item........................................ 6,272 764 23,884
Gain on Sale of Properties.................... --- --- 4,344
----------- ----------- --------------
Income Before Equity in Income of Other Real
Estate Partnerships and Extraordinary
Item......................................... 6,272 764 28,228
Equity in Income of Other Real Estate
Partnerships................................. --- --- 20,130
----------- ----------- --------------
Income Before Extraordinary
Item......................................... $ 6,272 $ 764 $ 48,358
=========== =========== ==============
</TABLE>
The accompanying notes are an integral part of the pro forma financial statement
23
<PAGE> 25
FIRST INDUSTRIAL, L.P.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Lazarus Punia Other 1997
Burman Acquisition Acquisition
Subtotal Properties Properties Properties
Carry (Historical) (Historical) (Historical)
Forward Note 2 (g) Note 2 (h) Note 2(i)
------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Rental Income............................... $43,022 $18,606 $10,448 $2,749
Tenant Recoveries and Other
Income..................................... 10,361 4,636 2,668 987
------- ---------- ---------- -----------
Total Revenues........................... 53,383 23,242 13,116 3,736
------- ---------- ---------- -----------
EXPENSES:
Real Estate Taxes........................... 8,444 4,767 1,908 1,051
Repairs and Maintenance..................... 1,945 1,477 795 99
Property Management......................... 1,748 732 329 60
Utilities................................... 1,454 959 586 27
Insurance................................... 417 275 160 23
Other....................................... 286 457 218 ---
General and Administrative................... 4,014 --- --- ---
Interest Expense............................. 4,685 --- --- ---
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs.................... 196 --- --- ---
Depreciation and Other
Amortization................................ 6,310 --- --- ---
------- ---------- ---------- -----------
Total Expenses........................... 29,499 8,667 3,996 1,260
------- ---------- ---------- -----------
Income Before Gain on Sales
of Properties, Minority
Interest and Extraordinary
Item ....................................... 23,884 14,575 9,120 2,476
Gain on Sales of Properties.................. 4,344 --- --- ---
------- ---------- ---------- -----------
Income Before Equity in Income of Other
Real Estate Partnerships and Extraordinary
Item........................................ 28,228 14,575 9,120 2,476
Equity in Income of Other Real Estate
Partnerships................................ 20,130 --- --- ---
------- ---------- ---------- -----------
Income Before Extraordinary
Item........................................ $48,358 $14,575 $9,120 $2,476
======= ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
1997
Acquisition I
Properties Subtotal
(Historical) Carry
Note 2 (j) Forward
----------- --------
<S> <C> <C>
REVENUES:
Rental Income............................... $1,451 $76,276
Tenant Recoveries and Other
Income..................................... 648 19,300
----------- --------
Total Revenues........................... 2,099 95,576
----------- --------
EXPENSES:
Real Estate Taxes........................... 490 16,660
Repairs and Maintenance..................... 102 4,418
Property Management......................... 54 2,923
Utilities................................... 7 3,033
Insurance................................... 22 897
Other....................................... --- 961
General and Administrative................... --- 4,014
Interest Expense............................. --- 4,685
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs.................... --- 196
Depreciation and Other
Amortization................................ --- 6,310
----------- --------
Total Expenses........................... 675 44,097
----------- --------
Income Before Gain on Sales
of Properties, Minority
Interest and Extraordinary
Item ....................................... 1,424 51,479
Gain on Sales of Properties.................. --- 4,344
----------- --------
Income Before Equity in Income of Other
Real Estate Partnerships and Extraordinary
Item........................................ 1,424 55,823
Equity in Income of Other Real Estate
Partnerships................................ --- 20,130
----------- --------
Income Before Extraordinary
Item........................................ 1,424 $75,953
=========== ========
</TABLE>
The accompanying notes are an integral part of the pro forma
financial statement.
24
<PAGE> 26
FIRST INDUSTRIAL, L.P.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION> 1997
Pacifica Sealy Acquisition
Acquisition Acquisition III
Subtotal Properties Properties Properties
Carry (Historical) (Historical) (Historical)
Forward Note 2 (k) Note 2 (l) Note 2 (m)
-------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Rental Income............................... $ 76,276 $ 16,849 $ 15,163 $ 1,945
Tenant Recoveries and
Other Income............................... 19,300 3,453 1,546 244
-------- ----------- ----------- ------------
Total Revenues........................... 95,576 20,302 16,709 2,189
-------- ----------- ----------- ------------
EXPENSES:
Real Estate Taxes........................... 16,660 2,521 2,068 222
Repairs and Maintenance..................... 4,418 1,554 1,546 168
Property Management......................... 2,923 767 700 91
Utilities................................... 3,033 547 329 51
Insurance................................... 897 116 264 14
Other....................................... 961 155 --- 4
General and Administrative.................. 4,014 --- --- ---
Interest Expense............................ 4,685 --- --- ---
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs................... 196 --- --- ---
Depreciation and Other
Amortization............................... 6,310 --- --- ---
-------- ----------- ----------- ------------
Total Expenses........................... 44,097 5,660 4,907 550
-------- ----------- ----------- ------------
Income Before Gain on Sales of
Properties, Minority Interest
and Extraordinary Item...................... 51,479 14,642 11,802 1,639
Gain on Sale of Properties................... 4,344 --- --- ---
-------- ----------- ----------- ------------
Income Before Equity in Income of Other Real
Estate Partnerships and Extraordinary
Item........................................ 55,823 14,642 11,802 1,639
Equity in Income of Other Real Estate
Partnerships................................ 20,130 --- --- ---
-------- ----------- ----------- ------------
Income Before Extraordinary
Item........................................ $ 75,953 $ 14,642 $ 11,802 $ 1,639
======== =========== =========== ============
</TABLE>
<TABLE>
<CAPTION> 1997
Acquisition
II
Properties Pro Forma Pro Forma
(Historical) Adjustments First
Note 2 (n) Note 2 (o) Industrial, L.P.
----------- ----------- ----------------
<S> <C> <C> <C>
REVENUES:
Rental Income............................... $ 5,692 $ --- $115,925
Tenant Recoveries and
Other Income............................... 1,203 --- 25,746
----------- ----------- --------
Total Revenues........................... 6,895 --- 141,671
----------- ----------- --------
EXPENSES:
Real Estate Taxes........................... 1,433 --- 22,904
Repairs and Maintenance..................... 409 --- 8,095
Property Management......................... 237 --- 4,718
Utilities................................... 47 --- 4,007
Insurance................................... 50 --- 1,341
Other....................................... 31 --- 1,151
General and Administrative.................. --- --- 4,014
Interest Expense............................ --- 16,834 21,519
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs................... --- --- 196
Depreciation and Other
Amortization............................... --- 16,082 22,392
----------- ----------- --------
Total Expenses........................... 2,207 32,916 90,337
----------- ----------- --------
Income Before Gain on Sales of
Properties, Minority Interest
and Extraordinary Item...................... 4,688 (32,916) 51,334
Gain on Sale of Properties................... --- --- 4,344
----------- ----------- --------
Income Before Equity in Income of Other Real
Estate Partnerships and Extraordinary
Item........................................ 4,688 (32,916) 55,678
Equity in Income of Other Real Estate
Partnerships................................ --- 1,547 21,677
----------- ----------- --------
Income Before Extraordinary
Item........................................ $ 4,688 $ (31,369) 77,355
=========== =========== ========
</TABLE>
The accompanying notes are an integral part of the pro forma financial statement
25
<PAGE> 27
FIRST INDUSTRIAL, L.P.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial, L.P. (the "Operating Partnership") was organized as a
limited partnership in the state of Delaware on November 23, 1993. The sole
general partner is First Industrial Realty Trust, Inc. (the "Company") with an
approximate 88.0% ownership interest at June 30, 1997.
The accompanying unaudited pro forma statement of operations for the
Operating Partnership reflects the historical operations of the Company for the
period January 1, 1996 through December 31, 1996 and the acquisition of 27
properties (the "First Highland Properties") and 18 properties (the "Other
Acquisition Properties") acquired by the Operating Partnership between January
1, 1996 and April 10, 1996, the acquisition of 14 properties (the "Acquisition
Properties") and 43 (the "1996 Acquisition Properties") between April 11, 1996
and December 31, 1996, one property acquired on January 9, 1997 (the "1997
Acquisition Property"), and 39 properties acquired on January 31, 1997 (the
"Lazarus Burman Properties") which are reported on Amendment No. 3 to Form S-3
dated April 30, 1997, the acquisition of 15 properties (the "Punia Phase I
Properties") acquired on June 30, 1997 and 27 properties acquired through
October 31, 1997 and six properties to be acquired (the "Punia Phase II
Properties") (together, the "Punia Acquisition Properties") which are reported
on Form 8-K/A No. 1 dated June 30, 1997, nine properties acquired during the
period February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition
Properties") and two properties acquired during the period February 1, 1997
through July 14, 1997 (the "1997 Acquisition I Properties") reported on Form
8-K/A No. 2 dated June 30, 1997 and the acquisition of 91 properties on October
30, 1997 and the additional 15 properties to be acquired within the next
several months (together, the "Pacifica Acquisition Properties"), 64 properties
to be acquired by November 30, 1997 (the "Sealy Acquisition Properties"), seven
properties acquired on October 17, 1997 (the "1997 Acquisition III Properties")
and 23 properties acquired during the period July 15, 1997 through October 31,
1997 (the "1997 Acquisition II Properties") reported on this Form 8-K dated
October 30, 1997.
The accompanying unaudited pro forma financial statement has been
prepared based upon certain pro forma adjustments to the historical December
31, 1996 financial statements of the Operating Partnership. The pro forma
statement of operations for the year ended December 31, 1996 has been prepared
as if the properties acquired subsequent to December 31, 1995 had been acquired
on either January 1, 1996 or the lease commencement date if the property was
developed and as if the 5,175,000 Operating Partnership units (the "Units")
issued on February 2, 1996 (the "February 1996 Capital Contribution"), the
5,750,000 Units issued on October 25, 1996 (the "October 1996 Capital
Contribution"), the 8 3/4% Series B Preferred Units issued on May 14, 1997 (the
"Series B Preferred Capital Contribution"), the 8 5/8% Series C Preferred Units
issued on June 6, 1997 (the "Series C Preferred Capital Contribution"),
the 637,440 Units issued September 16, 1997 (the "September 1997 Capital
Contribution") and the 5,400,000 Units issued on October 15, 1997 (the
"October 1997 Capital Contribution") had been completed on January 1, 1996.
The unaudited pro forma financial statement is not necessarily indicative
of what the Operating Partnership's results of operations would have been for
the year ended December 31, 1996 had the properties been acquired as described
above, nor do they purport to present the future results of operations of the
Operating Partnership.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - DECEMBER 31, 1996
(a) The historical operations reflect income from continuing operations of
the Operating Partnership for the period January 1, 1996 through December
31, 1996 as reported on the Operating Partnership's Amendment No. 3 to
Form S-3 dated April 30, 1997.
(b) The historical operations reflect the operations of the First Highland
Properties for the period January 1, 1996 through the acquisition date of
these properties on March 20, 1996.
26
<PAGE> 28
FIRST INDUSTRIAL, L.P.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(c) The historical operations reflect the operations of the Other
Acquisition Properties for the period January 1, 1996 through their
respective acquisition dates.
(d) The historical operations reflect the operations of the Acquisition
Properties for the period January 1, 1996 through their respective
acquisition dates.
(e) The historical operations reflect the operations of the 1996
Acquisition Properties for the period January 1, 1996 through their
respective acquisition dates.
(f) The historical operations reflect the operations of the 1997
Acquisition Property for the period January 1, 1996 through December 31,
1996.
(g) The historical operations reflect the operations of the Lazarus
Burman Properties for the period January 1, 1996 through December 31,
1996.
(h) The historical operations reflect the operations of the Punia
Acquisition Properties for the period January 1, 1996 through December 31,
1996.
(i) The historical operations reflect the operations of the Other 1997
Acquisition Properties for the period January 1, 1996 through December 31,
1996.
(j) The historical operations reflect the operations of the 1997
Acquisition I Properties for the period January 1, 1996 through December
31, 1996.
(k) The historical operations reflect the operations of the Pacifica
Acquisition Properties for the period January 1, 1996 through December
31, 1996.
(l) The historical operations reflect the operations of the Sealy
Acquisition Properties for the period January 1, 1996 through December
31, 1996.
(m) The historical operations reflect the operations of the 1997
Acquisition III Properties for the period January 1, 1996 through
December 31, 1996.
(n) The historical operations reflect the operations of the 1997
Acquisition II Properties for the period January 1, 1996 through December
31, 1996.
(o) In connection with the First Highland Properties acquisition, the
Operating partnership assumed two mortgage loans totaling $9.4 million
(the "Assumed Indebtedness") and also entered into a new mortgage loan in
the amount of $36.8 million (the "New Indebtedness"). The interest
expense adjustment reflects interest on the Assumed Indebtedness and the
New Indebtedness as if such indebtedness was outstanding beginning January
1, 1996.
In connection with the Lazarus Burman Properties acquisition, the
Operating Partnership assumed two mortgage loans totaling $4.5 million
(the "Lazarus Burman Mortgage Loans"). The interest expense adjustment
reflects interest on the Lazarus Burman Mortgage Loans for the pro forma
period and as if such indebtedness was outstanding beginning January 1,
1996.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR")
plus 2%) for the assumed earlier purchase of the Other Acquisition
Properties offset by the interest savings related to the assumed repayment
of $59.4 million
27
<PAGE> 29
FIRST INDUSTRIAL, L.P.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
of acquisition facility borrowings on January 1, 1996 from the
proceeds of the February 1996 Capital Contribution.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at LIBOR plus 2%) for borrowings under the Operating
Partnership's $150 million secured revolving credit facility (the "1994
Acquisition Facility") or LIBOR plus 1.1% for borrowings under the
Company's $200 million unsecured revolving credit facility (the "1996
Acquisition Facility") for the assumed earlier purchase of the Acquisition
Properties and the 1996 Acquisition Properties, offset by the related
interest savings related to the assumed repayment of $84.2 million of
acquisition facility borrowings on January 1, 1996 from the proceeds of
the October 1996 Capital Contribution.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR")
plus 1%) for the assumed earlier purchase of the 1997 Acquisition
Property, the Lazarus Burman Properties, the Punia Acquisition Properties,
the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties,
the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the
1997 Acquisition III Properties and the 1997 Acquisition II Properties
offset by the interest savings related to the assumed repayment of $144.0
million of acquisition facility borrowings on January 1, 1996 from the
proceeds of the Series B Preferred Capital Contributions and Series C
Preferred Capital Contributions and the assumed repayment of $196.1
million of acquisition facility borrowings on January 1, 1996 from the
proceeds of the September 1997 Capital Contribution and the October 1997
Capital Contribution.
The depreciation and amortization adjustment reflects the charges for the
First Highland Properties, the Other Acquisition Properties, the
Acquisition Properties, the 1996 Acquisition Properties, the 1997
Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition
Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I
Properties, the Pacifica Acquisition Properties, the Sealy Acquisition
Properties, the 1997 Acquisition III Properties and the 1997 Acquisition
II Properties from January 1, 1996 through the earlier of their respective
acquisition date or December 31, 1996 and if such properties were acquired
on January 1, 1996.
The equity in income of other real estate partnerships adjustment
reflects the Operating Partnership's 99% limited partnership equity
interest in the operations of an acquisition made by First Industrial
Pennsylvania Partnership, L.P., the operations of an acquisition made by
First Industrial Indianapolis, L.P and the operations of an acquisition
made by First Industrial Financing Partnership, L.P.
28
<PAGE> 30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1933, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST INDUSTRIAL, L.P.
BY: FIRST INDUSTRIAL REALTY TRUST, INC.
Its Sole General Partner
November 13, 1997 By: /s/ Michael J. Havala
-----------------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting
Officer)
29
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
23 Consent of Coopers & Lybrand L.L.P.,
Independent Accountants
</TABLE>
30
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 8-K dated October 30, 1997 and
the incorporation by reference into the Registrant's two previously filed
Registration Statements on Form S-3 (File Nos. 333-21873 and 333-29879) of our
report dated October 27, 1997, on our audit of the combined historical
statement of revenues and certain expenses of the Pacifica Acquisition
Properties, of our report dated October 16, 1997 on our audit of the combined
historical statement of revenues and certain expenses of the Sealy Acquisition
Properties and of our report dated October 20, 1997 on our audit of the
combined historical statement of certain revenues and certain expenses of the
1997 Acquisition III Properties.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
November 13, 1997
31
