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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 1998 OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _________ to ________
Commission File Number 333-21873
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) (Zip Code)
(312) 344-4300
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
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FIRST INDUSTRIAL, L.P.
TABLE OF CONTENTS
<TABLE>
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PAGE
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PART I.
Item 1. Business................................................................................ 3
Item 2. The Properties.......................................................................... 6
Item 3. Legal Proceedings....................................................................... 28
Item 4. Submission of Matters to a Vote of Security Holders..................................... 28
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters................... 29
Item 6. Selected Financial Data................................................................. 30
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations... 33
Item 7a. Quantitative and Qualitative Disclosures About Market Risk.............................. 45
Item 8. Financial Statements and Supplementary Data............................................. 45
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 45
PART III.
Item 10. Directors and Executive Officers of the Registrant...................................... 46
Item 11. Executive Compensation.................................................................. 46
Item 12. Security Ownership of Certain Beneficial Owners and Management.......................... 46
Item 13. Certain Relationships and Related Transactions.......................................... 46
PART IV.
Item 14. Exhibits, Financial Statements, Financial Statement Schedule and Reports on Form 8-K.... 47
SIGNATURES............................................................................................ 51
</TABLE>
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This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. First
Industrial, L.P. (the "Operating Partnership") intends such forward-looking
statements to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995,
and is including this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Operating
Partnership, are generally identifiable by use of the words "believe," "expect,"
"intend," "anticipate," "estimate," "project," or similar expressions. The
Operating Partnership's ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors which could have a
material adverse affect on the operations and future prospects of the Operating
Partnership on a consolidated basis include, but are not limited to, changes in:
economic conditions generally and the real estate market specifically,
legislative/regulatory changes (including changes to laws governing the taxation
of REITs), availability of capital, interest rates, competition, supply and
demand for industrial properties in the Operating Partnership's current and
proposed market areas, general accounting principles, policies and guidelines
applicable to REITs and status of Year 2000 compliance. These risks and
uncertainties should be considered in evaluating forward-looking statements and
undue reliance should not be placed on such statements. Further information
concerning the Operating Partnership and its business, including additional
factors that could materially affect the Operating Partnership's financial
results, is included herein and in the Operating Partnership's other filings
with the Securities and Exchange Commission.
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PART I
ITEM 1. BUSINESS
THE COMPANY
GENERAL
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 84.0% ownership interest at December 31, 1998. The Company also owns
a preferred general partnership interest in the Operating Partnership
("Preferred Units") with an aggregate liquidation priority of $350.0 million.
The Company is a real estate investment trust ("REIT") as defined in the
Internal Revenue Code. The Company's operations are conducted primarily through
the Operating Partnership. The limited partners of the Operating Partnership
own, in the aggregate, approximately a 16.0% interest in the Operating
Partnership at December 31, 1998.
The Operating Partnership is the sole member of limited liability
companies (the "L.L.C.'s"), owns a 95% economic interest in FR Development
Services, Inc., as well as a 99% limited partnership interest (subject in one
case as described below to a preferred limited partnership interest) in First
Industrial Financing Partnership, L.P. (the "Financing Partnership"), First
Industrial Securities, L.P. (the "Securities Partnership"), First Industrial
Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial
Pennsylvania Partnership, L.P. (the "Pennsylvania Partnership"), First
Industrial Harrisburg Partnership, L.P. (the "Harrisburg Partnership"), First
Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD., and
First Industrial Development Services, L.P. (together, the "Other Real Estate
Partnerships"). The Operating Partnership, through wholly owned limited
liability companies in which it is the sole member, also owns a 10% equity
interest in, and provides asset and property management services to, a joint
venture which invests in industrial properties.
The general partners of the Other Real Estate Partnerships are separate
corporations, each with a one percent general partnership interest in the Other
Real Estate Partnerships for which it acts as a general partner. Each general
partner of the Other Real Estate Partnerships is a wholly owned subsidiary of
the Company. The general partner of the Securities Partnership, First Industrial
Securities Corporation, also owns a preferred limited partnership interest in
the Securities Partnership which entitles it to receive a fixed quarterly
distribution, and results in it being allocated income in the same amount, equal
to the fixed quarterly dividend the Company pays on its 9.5%, $.01 par value,
Series A Cumulative Preferred Stock.
As of December 31, 1998, the Operating Partnership, the L.L.C.'s and FR
Development Services, Inc. (hereinafter defined as "The Consolidated Operating
Partnership") owned 885 in-service industrial properties, containing an
aggregate of approximately 57.3 million square feet of gross leasable area
("GLA"). On a combined basis, as of December 31, 1998, the Other Real Estate
Partnerships owned 102 in-service industrial properties, containing an aggregate
of approximately 12.0 million square feet of GLA. Of the 102 industrial
properties owned by the Other Real Estate Partnerships at December 31, 1998, 23
are held by the Financing Partnership, 19 are held by the Securities
Partnership, 23 are held by the Mortgage Partnership, 23 are held by the
Pennsylvania Partnership, six are held by the Harrisburg Partnership, six are
held by the Indianapolis Partnership, one is held by First Industrial
Development Services, L.P. and one is held by TK-SV, LTD.
The Consolidated Operating Partnership utilizes an operating approach
which combines the effectiveness of decentralized, locally based property
management, acquisition, sales and development functions with the cost
efficiencies of centralized acquisition, sales and development support, capital
markets expertise, asset management and fiscal control systems. At March 24,
1999, the Consolidated Operating Partnership had 236 employees.
The Consolidated Operating Partnership has grown and will seek to
continue to grow through the acquisition of additional industrial properties and
businesses, through the development of industrial properties and through joint
venture relationships with institutional partners to invest in industrial
properties.
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BUSINESS OBJECTIVES AND GROWTH PLANS
The Consolidated Operating Partnership's fundamental business objective
is to maximize the total return to its partners through increases in per unit
distributions and increases in the value of the Consolidated Operating
Partnership's properties and operations. The Consolidated Operating
Partnership's growth plan includes the following elements:
- - Internal Growth. The Consolidated Operating Partnership seeks to grow
internally by (i) increasing revenues by renewing or re-leasing spaces
subject to expiring leases at higher rental levels; (ii) increasing
occupancy levels at properties where vacancies exist and maintaining
occupancy elsewhere; (iii) controlling and minimizing property
operating and general and administrative expenses; (iv) renovating
existing properties; and (v) increasing ancillary revenues from
non-real estate sources.
- - External Growth. The Consolidated Operating Partnership seeks to grow
externally through (i) the acquisition of portfolios of industrial
properties, industrial property businesses or individual properties
which meet the Consolidated Operating Partnership's investment
parameters; (ii) the development of industrial properties; (iii) the
expansion of its properties; and (iv) investments in industrial
properties through joint venture relationships with institutional
partners.
BUSINESS STRATEGIES
The Consolidated Operating Partnership utilizes the following seven
strategies in connection with the operation of its business:
- - Organization Strategy. The Consolidated Operating Partnership
implements its decentralized property operations strategy through the
use of experienced regional management teams and local property
managers. Each operating region is headed by a managing director, who
is a senior executive officer of, and has an equity interest in, the
Company. The Consolidated Operating Partnership provides acquisition,
development and financing assistance, asset management oversight and
financial reporting functions from its headquarters in Chicago,
Illinois to support its regional operations. The Consolidated Operating
Partnership believes the size of its portfolio enables it to realize
operating efficiencies by spreading overhead over many properties and
by negotiating quantity purchasing discounts.
- - Market Strategy. The Consolidated Operating Partnership invests
mainly in markets where it can achieve size and economies of scale.
Based on the size of the Consolidated Operating Partnership's and the
Other Real Estate Partnerships' portfolios in their current markets,
which as of December 31, 1998 averaged approximately 2.2 million square
feet per market, and the experience of its managing directors, the
Consolidated Operating Partnership believes that it has sufficient
market presence and resources to compete effectively. As of December
31, 1998, the Consolidated Operating Partnership and the Other Real
Estate Partnerships owned portfolios in the metropolitan areas of
Atlanta, Georgia; Baltimore, Maryland; Baton Rouge, Louisiana; Chicago,
Illinois; Cincinnati, Ohio; Cleveland, Ohio; Columbus, Ohio; Dallas,
Texas; Dayton, Ohio; Denver, Colorado; Des Moines, Iowa; Detroit,
Michigan; Grand Rapids, Michigan; Hartford, Connecticut; Houston,
Texas; Indianapolis, Indiana; Louisville, Kentucky; Milwaukee,
Wisconsin; Minneapolis/St. Paul, Minnesota; Nashville, Tennessee; New
Orleans, Louisiana; Phoenix, Arizona; Portland, Oregon; Salt Lake City,
Utah; St. Louis, Missouri and Tampa, Florida, as well as the regional
areas of Long Island, New York and New Jersey.
- - Leasing and Marketing Strategy. The Consolidated Operating Partnership
has an operational management strategy designed to enhance tenant
satisfaction and portfolio performance. The Consolidated Operating
Partnership pursues an active leasing strategy, which includes
aggressively marketing available space, renewing existing leases at
higher rents per square foot and seeking leases which provide for the
pass-through of property-related expenses to the tenant. The
Consolidated Operating Partnership also has local and national
marketing programs which focus on the business and brokerage
communities and national tenants.
- - Acquisition Strategy. The Consolidated Operating Partnership's
acquisition strategy is to acquire properties in its current markets to
capitalize on local market expertise and maximize operating
effectiveness and efficiencies.
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- - Development Strategy. Of the 987 properties in the Consolidated
Operating Partnership's and the Other Real Estate Partnership's
portfolio at December 31, 1998, 226 have been developed by either the
Consolidated Operating Partnership, the Other Real Estate Partnerships
or its former management. The Consolidated Operating Partnership will
continue to leverage the development capabilities of its management,
many of whom are leading developers in their respective markets. In
1996, the Consolidated Operating Partnership formed, First Industrial
Development Services, L.P., of which, the Operating Partnership has a
99% limited partnership interest, to focus on development activities.
- - Disposition Strategy. The Consolidated Operating Partnership
continually evaluates local market conditions and property-related
factors and is actively considering disposition of select assets.
- - Financing Strategy. The Consolidated Operating Partnership believes
that the size of its portfolio, the diversity of its properties and
tenants and the financial strength of the Consolidated Operating
Partnership allow the Operating Partnership and it's general partner,
the Company, access to the public capital markets which are not
generally available to smaller, less diversified property owners
because of the portfolio size and diversity requirements.
RECENT DEVELOPMENTS
In 1998, the Consolidated Operating Partnership acquired or completed
development of 227 properties and several parcels of land for a total estimated
investment of approximately $484.2 million (approximately $49.4 million of which
was issued as limited partnership interests in the Operating Partnership
("Units")). The Consolidated Operating Partnership also sold 36 in-service
properties and several parcels of land for approximately $77.7 million of gross
proceeds. In addition, on January 2, 1998, the Financing Partnership distributed
173 industrial properties with a net book value of approximately $387.6 million
to the Operating Partnership.
During 1998, the Consolidated Operating Partnership, through the
Operating Partnership, issued $300.0 million of senior unsecured debt with
maturity dates ranging from 2011 to 2028.
On February 4, 1998, the Company issued 5,000,000 Depositary shares,
each representing 1/100th of a share of the Company's 7.95%, $.01 par value,
Series D Cumulative Preferred Stock (the "Series D Preferred Stock") at an
initial offering price of $25 per depositary share. The net proceeds of $120.6
million received from the Series D Preferred Stock were contributed to the
Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units
(the "Series D Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a preferred general partner unit
contribution.
On March 18, 1998, the Company issued 3,000,000 Depositary shares, each
representing 1/100th of a share of the Company's 7.90%, $.01 par value, Series E
Cumulative Preferred Stock (the "Series E Preferred Stock") at an initial
offering price of $25 per depositary share. The net proceeds of $72.1 million
received from the Series E Preferred Stock were contributed to the Operating
Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the
"Series E Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a preferred general partner unit
contribution.
On April 23, 1998, the Company issued, in a private placement,
1,112,644 shares of $.01 par value Common Stock (the "April 1998 Equity
Offering"). The net proceeds of approximately $33.1 million received from the
April 1998 Equity Offering were contributed to the Operating Partnership in
exchange for 1,112,644 Units in the Operating Partnership and are reflected in
the Consolidated Operating Partnership's financial statements as a general
partner unit contribution.
In 1998, the Operating Parthership issued in the aggregate, 1,515,983
Units valued at approximately $49.4 million.
On September 28, 1998, the Consolidated Operating Partnership, through
a wholly owned limited liability company in which the sole member is the
Operating Partnership, entered into a joint venture arrangement (the "September
1998 Joint Venture") with an institutional investor to invest in industrial
properties. The Consolidated Operating Partnership, through wholly owned limited
liability companies in which the sole member is the Operating Partnership, owns
a 10% equity interest in the September 1998 Joint Venture and provides property
and asset management services to the September 1998 Joint Venture. As of
December 31, 1998, the September 1998 Joint Venture owned 130 industrial
properties comprising approximately 6.3 million square feet of GLA.
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During the period January 1, 1999 through March 24, 1999, the
Consolidated Operating Partnership acquired or completed the development of
three industrial properties for a total estimated investment of approximately
$16.8 million. The Consolidated Operating Partnership also sold eight industrial
properties for approximately $19.1 million of gross proceeds.
FUTURE PROPERTY ACQUISITIONS, DEVELOPMENTS AND PROPERTY SALES
The Consolidated Operating Partnership has an active acquisition and
development program through which it is continually engaged in identifying,
negotiating and consummating portfolio and individual industrial property
acquisitions and developments. As a result, the Consolidated Operating
Partnership is currently engaged in negotiations relating to the possible
acquisitions and developments of certain industrial properties located in the
Consolidated Operating Partnership's current markets.
The Consolidated Operating Partnership also has an active sales program
through which it is continually engaged in identifying and evaluating its
current portfolio for potential sales candidates in order to redeploy capital.
As a result, the Consolidated Operating Partnership is currently engaged in
negotiations relating to the possible sales of certain industrial properties in
the Consolidated Operating Partnership's current portfolio.
When evaluating potential industrial property acquisitions and
developments, as well as potential industrial property sales, the Consolidated
Operating Partnership will consider such factors as: (i) the geographic area and
type of property; (ii) the location, construction quality, condition and design
of the property; (iii) the potential for capital appreciation of the property;
(iv) the ability of the Consolidated Operating Partnership to improve the
property's performance through renovation; (v) the terms of tenant leases,
including the potential for rent increases; (vi) the potential for economic
growth and the tax and regulatory environment of the area in which the property
is located; (vii) the potential for expansion of the physical layout of the
property and/or the number of sites; (viii) the occupancy and demand by tenants
for properties of a similar type in the vicinity; and (ix) competition from
existing properties and the potential for the construction of new properties in
the area.
INDUSTRY
Industrial properties are typically used for the design, assembly,
packaging, storage and distribution of goods and/or the provision of services.
As a result, the demand for industrial space in the United States is related to
the level of economic output. Historically, occupancy rates for industrial
property in the United States have been higher than those for other types of
commercial property. The Consolidated Operating Partnership believes that the
higher occupancy rate in the industrial property sector is a result of the
construction-on-demand nature of, and the comparatively short development time
required for, industrial property. For the five years ended December 31, 1998,
the occupancy rates for industrial properties in the United States have ranged
from 91.6% to 93.1%, with an occupancy rate of 91.8% at December 31, 1998.
ITEM 2. THE PROPERTIES
GENERAL
At December 31, 1998, the Consolidated Operating Partnership and the
Other Real Estate Partnerships owned 987 in-service properties (885 of which
were owned by the Consolidated Operating Partnership and 102 of which were owned
by the Other Real Estate Partnerships) containing an aggregate of approximately
69.3 million square feet of GLA in 25 states (57.3 million square feet of which
comprised the properties owned by the Consolidated Operating Partnership and
12.0 million square feet of which comprised the properties owned by the Other
Real Estate Partnerships), with a diverse base of more than 3,000 tenants
engaged in a wide variety of businesses, including manufacturing, retail,
wholesale trade, distribution and professional services. The properties are
generally located in business parks which have convenient access to interstate
highways and rail and air transportation. The median age of the Consolidated
Operating Partnership's and the Other Real Estate Partnership's properties on a
combined basis as of December 31, 1998 was approximately 15 years.
The Consolidated Operating Partnership and the Other Real Estate
Partnerships classify their properties into five industrial categories: Light
Industrial, R&D/flex, bulk warehouse, regional warehouse and manufacturing.
While some properties may have characteristics which fall under more than one
property type, the Consolidated Operating
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Partnership and the Other Real Estate Partnerships have used what they feel is
the most dominant characteristic to categorize the property.
The following tables summarize certain information as of December 31,
1998 with respect to the properties owned by the Consolidated Operating
Partnership, each of which is wholly owned. Information in the tables excludes
properties under development at December 31, 1998.
CONSOLIDATED OPERATING PARTNERSHIP
PROPERTY SUMMARY
<TABLE>
<CAPTION>
Light Industrial R&D/ FLEX Bulk Warehouse Regional Warehouse Manufacturing
---------------------- -------------------- --------------------- --------------------- --------------------
Number of Number of Number of Number of Number of
Metropolitan Area GLA Properties GLA Properties GLA Properties GLA Properties GLA Properties
- ----------------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Atlanta 398,882 7 --- --- 2,860,554 11 255,846 3 596,750 5
Baltimore 525,686 8 --- --- 171,000 1 --- --- --- ---
Baton Rouge 116,347 3 --- --- 108,800 1 --- --- --- ---
Chicago 1,500,265 25 165,170 4 2,973,558 14 87,548 2 1,069,167 6
Cincinnati 445,595 7 --- --- 800,080 3 --- --- 570,000 1
Cleveland 201,116 6 102,500 1 --- --- 51,525 1 --- ---
Columbus 56,849 1 217,612 2 1,653,534 4 --- --- 255,470 1
Dallas 753,653 21 118,618 4 698,543 4 65,700 1 224,984 2
Dayton 322,746 6 20,000 1 --- --- --- --- --- ---
Denver 1,887,857 46 1,856,512 48 202,939 2 301,131 5 --- ---
Des Moines 54,000 1 --- --- 879,043 5 --- --- --- ---
Detroit 2,495,896 97 656,092 21 2,486,937 14 777,451 18 17,240 1
Grand Rapids 514,816 11 10,000 1 1,436,855 7 --- --- 413,500 1
Hartford 441,800 10 --- --- 143,391 1 --- --- 84,000 1
Houston 484,981 7 95,073 1 1,521,877 11 372,585 5 --- ---
Indianapolis 727,980 16 62,200 5 1,319,965 7 211,360 6 54,000 1
Long Island 2,080,694 40 560,460 4 1,358,593 8 162,871 3 62,898 1
Milwaukee 347,259 7 37,765 1 --- --- 39,800 1 39,468 1
Minneapolis/St. Paul 1,276,669 24 805,494 12 976,594 4 537,033 5 1,134,931 15
Nashville 334,063 7 --- --- 1,175,376 6 --- --- 109,058 1
N. New Jersey 1,071,825 34 349,146 10 264,426 2 192,153 3 --- ---
New Orleans 342,287 9 169,801 5 --- --- 40,500 1 --- ---
Phoenix 87,462 2 99,418 1 174,854 1 261,156 3 --- ---
Portland 809,706 34 53,021 2 --- --- --- --- --- ---
Salt Lake City 590,853 40 91,152 5 --- --- --- --- --- ---
S. New Jersey 948,723 23 --- --- 321,406 2 129,971 2 22,738 1
St. Louis 540,180 11 --- --- 589,158 4 --- --- --- ---
Tampa 350,741 10 286,671 14 213,744 2 243,840 5 --- ---
Other (a) 25,254 1 --- --- 710,755 6 50,000 1 346,103 6
---------- ---------- --------- ---------- ---------- ---------- --------- ---------- --------- ----------
Total 19,734,185 514 5,756,705 142 23,041,982 120 3,780,470 65 5,000,307 44
========== ========== ========= ========== ========== ========== ========= ========== ========= ==========
</TABLE>
(a) Properties are located in Denton and Abilene, Texas; Wichita, Kansas; West
Lebanon, New Hampshire; Green Bay, Wisconsin; Shreveport, Louisiana and
Clarion, Iowa.
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CONSOLIDATED OPERATING PARTNERSHIP
PROPERTY SUMMARY TOTALS
<TABLE>
<CAPTION>
TOTALS
----------------------------------------------------------------------------------
AVERAGE GLA AS A % OF
NUMBER OF OCCUPANCY AT TOTAL
METROPOLITAN AREA GLA PROPERTIES 12/31/98 PORTFOLIO
- --------------------- -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Atlanta 4,112,032 26 96% 7.2%
Baltimore 696,686 9 99% 1.2%
Baton Rouge 225,147 4 97% 0.4%
Chicago 5,795,708 51 94% 10.1%
Cincinnati 1,815,675 11 98% 3.2%
Cleveland 355,141 8 99% 0.6%
Columbus 2,183,465 8 98% 3.8%
Dallas 1,861,498 32 96% 3.2%
Dayton 342,746 7 96% 0.6%
Denver 4,248,439 101 97% 7.4%
Des Moines 933,043 6 100% 1.6%
Detroit 6,433,616 151 95% 11.2%
Grand Rapids 2,375,171 20 99% 4.1%
Hartford 669,191 12 94% 1.2%
Houston 2,474,516 24 92% 4.3%
Indianapolis 2,375,505 35 98% 4.1%
Long Island 4,225,516 56 93% 7.4%
Milwaukee 464,292 10 99% 0.8%
Minneapolis/St. Paul 4,730,721 60 96% 8.3%
Nashville 1,618,497 14 99% 2.8%
N. New Jersey 1,877,550 49 86% 3.3%
New Orleans 552,588 15 93% 1.0%
Phoenix 622,890 7 88% 1.1%
Portland 862,727 36 98% 1.5%
Salt Lake City 682,005 45 87% 1.2%
S. New Jersey 1,422,838 28 96% 2.5%
St. Louis 1,129,338 15 92% 2.0%
Tampa 1,094,996 31 94% 1.9%
Other (a) 1,132,112 14 96% 2.0%
-------------- ---------------- ------------- ---------------
Total or Average 57,313,649 885 95% 100%
============== ================ ============= ===============
</TABLE>
(a) Properties are located in Denton and Abilene, Texas; Wichita, Kansas;
West Lebanon, New Hampshire; Green Bay, Wisconsin; Shreveport,
Louisiana and Clarion, Iowa.
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The following tables summarize certain information as of December 31,
1998 with respect to the properties owned by the Other Real Estate Partnerships,
each of which is wholly owned.
OTHER REAL ESTATE PARTNERSHIPS
PROPERTY SUMMARY
<TABLE>
<CAPTION>
Light Industrial R&D/ FLEX Bulk Warehouse Regional Warehouse Manufacturing
---------------------- -------------------- --------------------- --------------------- --------------------
Number of Number of Number of Number of Number of
Metropolitan Area GLA Properties GLA Properties GLA Properties GLA Properties GLA Properties
- ----------------- ---------- ---------- --------- ---------- ---------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Atlanta 59,959 1 153,508 4 --- --- --- --- --- ---
Baltimore 65,860 1 78,421 1 --- --- --- --- --- ---
Central 511,270 7 288,938 6 3,265,006 13 117,579 3 --- ---
Pennsylvania
Chicago 150,554 3 49,730 1 760,587 4 --- --- 323,425 1
Des Moines 75,072 3 --- --- --- --- 88,000 1 --- ---
Detroit 422,614 9 33,092 2 --- --- 66,395 1 --- ---
Grand Rapids 80,000 1 --- --- 822,500 5 --- --- 31,750 1
Indianapolis --- --- --- --- 1,763,853 5 --- --- --- ---
Louisville --- --- --- --- 532,400 1 --- --- --- ---
Milwaukee --- --- --- --- --- --- --- --- 468,000 1
Minneapolis/ 78,741 1 --- --- --- --- 75,939 1 541,193 3
St. Paul
Nashville --- --- --- --- 160,661 1 --- --- --- ---
Philadelphia 253,810 11 117,873 3 110,000 1 46,750 1 56,827 2
St. Louis --- --- --- --- 245,000 2 --- --- --- ---
Tampa --- --- 44,427 1 --- --- --- --- --- ---
---------- ---------- --------- ---------- ---------- ---------- --------- ---------- --------- ----------
Total 1,697,880 37 765,989 18 7,660,007 32 394,663 7 1,421,195 8
========== ========== ========= ========== ========== ========== ========= ========== ========= ==========
</TABLE>
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OTHER REAL ESTATE PARTNERSHIPS
PROPERTY SUMMARY TOTALS
<TABLE>
<CAPTION>
TOTALS
----------------------------------------------------------------------------------
AVERAGE GLA AS A%
NUMBER OF OCCUPANCY AT OF TOTAL
METROPOLITAN AREA GLA PROPERTIES 12/31/98 PORTFOLIO
- --------------------- -------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Atlanta 213,467 5 94% 1.8%
Baltimore 144,281 2 100% 1.2%
Central Pennsylvania 4,182,793 29 93% 35.0%
Chicago 1,284,296 9 99% 10.8%
Des Moines 163,072 4 96% 1.4%
Detroit 522,101 12 100% 4.4%
Grand Rapids 934,250 7 100% 7.8%
Indianapolis 1,763,853 5 90% 14.8%
Louisville 532,400 1 100% 4.5%
Milwaukee 468,000 1 100% 3.9%
Minneapolis/St. Paul 695,873 5 97% 5.8%
Nashville 160,661 1 100% 1.3%
Philadelphia 585,260 18 89% 4.9%
St. Louis 245,000 2 41% 2.0%
Tampa 44,427 1 100% 0.4%
-------------- ---------------- ------------- ---------------
Total or Average 11,939,734 102 94% 100.0%
============== ================ ============= ===============
</TABLE>
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PROPERTY ACQUISITION ACTIVITY
During 1998, the Consolidated Operating Partnership completed 39
separate property acquisition transactions totaling approximately 10.9 million
square feet of GLA at a total purchase price of approximately $447.0 million, or
$41.14 per square foot. The 220 properties acquired have the following
characteristics:
<TABLE>
<CAPTION>
NUMBER OF OCCUPANCY
METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE AT 12/31/98 ACQUISITION DATE
-------------------------- ----------- ---------- ---------------------------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Chicago, IL 1 53,500 Light Industrial 100% January 9, 1998
Chicago, IL 6 353,048 Light Industrial/Bulk Warehouse/ 88% January 12, 1998
Regional Warehouse/R&D Flex
Minneapolis, MN 4 318,013 Manufacturing 90% January 15, 1998
Chicago, IL 1 288,000 Bulk Warehouse 100% January 16, 1998
Salt Lake City, UT 9 183,772 Light Industrial/R&D Flex 84% January 28, 1998
Denver, CO 10 448,186 R&D Flex 100% January 29, 1998
Chicago, IL 4 309,386 Light Industrial/Bulk Warehouse 82% January 30, 1998
Cincinnati, OH 1 69,220 Light Industrial 100% February 11, 1998
Long Island, NY 1 42,700 Light Industrial 100% March 3, 1998
Grand Rapids, MI 2 75,200 Light Industrial 100% March 12, 1998
Chicago, IL 1 200,000 Manufacturing 100% March 17, 1998
Columbus, OH 2 217,612 R&D Flex 100% March 17, 1998
Long Island, NY 1 60,000 Light Industrial 100% March 23, 1998
Detroit, MI 1 66,132 Regional Warehouse 100% March 24, 1998
Detroit, MI 7 382,063 Light Industrial/Bulk Warehouse/ 100% March 25, 1998
R&D Flex
Atlanta, GA 1 123,808 Bulk Warehouse 100% March 27, 1998
Grand Rapids, MI 1 423,230 Bulk Warehouse 100% March 31, 1998
Long Island, NY 1 99,600 Light Industrial 100% April 1, 1998
Hartford, CT 11 525,800 Light Industrial/Manufacturing 98% April 1, 1998
Long Island, NY 1 325,000 Bulk Warehouse 100% April 1, 1998
Detroit, MI 39 856,910 Light Industrial/Manufacturing/ 92% April 3, 1998
R&D Flex/Regional Warehouse
Southern New Jersey (a) 29 1,531,588 Light Industrial/Bulk Warehouse/ 96% April 6, 1998
Manufacturing/Regional
Warehouse
Denver, CO 1 102,839 Bulk Warehouse 100% April 14, 1998
Columbus, OH 1 300,200 Bulk Warehouse 100% April 14, 1998
Baltimore, MD 9 696,686 Light Industrial/Bulk Warehouse 99% April 15, 1998
Chicago, IL 1 56,400 Light Industrial 100% May 14, 1998
Tampa, FL (b) 9 135,662 Light Industrial/R&D Flex N/A May 20, 1998
Detroit, MI (b) 5 147,725 R&D Flex N/A May 20, 1998
Chicago, IL (b) 1 191,145 Light Industrial N/A June 10, 1998
Denver, CO 1 292,471 Light Industrial 100% June 23, 1998
Chicago, IL (b) 1 84,760 Light Industrial N/A June 30, 1998
Atlanta, GA (b) 3 347,056 Light Industrial/Bulk Warehouse/ N/A July 7, 1998
Regional Warehouse
Chicago, IL (b) 1 200,000 Bulk Warehouse N/A July 24, 1998
Phoenix, AZ 2 87,462 Light Industrial 60% August 14, 1998
Long Island, NY (b) 1 50,338 Light Industrial N/A August 18, 1998
Portland, OR 36 856,516 Light Industrial/R&D Flex 98% August 31, 1998
Long Island, NY 1 52,329 Light Industrial 54% October 21, 1998
Dayton, OH 1 20,000 R&D Flex 100% October 30, 1998
Dallas, TX 12 291,168 Light Industrial/R&D Flex 99% November 4, 1998
----------- ----------
Total 220 10,865,525
=========== ==========
</TABLE>
(a) One property comprising 109,771 square feet was sold on April 6, 1998.
(b) Properties were sold to the September 1998 Joint Venture in the fourth
quarter of 1998.
11
<PAGE> 13
During 1998, the Other Real Estate Partnerships completed eight
separate property acquisition transactions totaling approximately 1.4 million
square feet of GLA at a total purchase price of approximately $44.5 million, or
$31.73 per square foot. The 27 properties acquired have the following
characteristics:
<TABLE>
<CAPTION>
NUMBER OF OCCUPANCY
METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE AT 12/31/98 ACQUISITION DATE
-------------------------- ----------- ---------- ---------------------------------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Indianapolis, IN 1 181,950 Bulk Warehouse 100% March 4, 1998
Philadelphia, PA 16 534,360 Light Industrial/Bulk Warehouse/ 89% March 12, 1998
Regional Warehouse/R&D Flex
/Manufacturing
Des Moines, IA 3 75,072 Light Industrial 92% April 1, 1998
Chicago, IL 1 284,135 Bulk Warehouse 100% April 9, 1998
Baltimore, MD 2 144,281 Light Industrial/R&D Flex 100% April 15, 1998
Des Moines, IA 1 88,000 Regional Warehouse 100% June 10, 1998
Tampa, FL 1 44,427 R&D Flex 100% July 16, 1998
Philadelphia, PA 2 50,900 Light Industrial 88% September 30, 1998
----------- ----------
Total 27 1,403,125
=========== ==========
</TABLE>
PROPERTY DEVELOPMENT ACTIVITY
During 1998, the Consolidated Operating Partnership completed seven
developments totaling approximately 1.0 million square feet of GLA at a total
cost of approximately $37.2 million, or $36.50 per square foot. The developed
properties have the following characteristics:
<TABLE>
<CAPTION>
OCCUPANCY
METROPOLITAN AREA GLA PROPERTY TYPE at 12/31/98 ACQUISITION DATE
- -------------------------- ----------- -------------------------------- -------------- --------------------
<S> <C> <C> <C> <C>
Detroit, MI 268,800 Bulk Warehouse 100% June 22, 1998
Detroit, MI 77,508 Light Industrial 100% June 26, 1998
Hartford, CT 143,391 Bulk Warehouse 80% July 1, 1998
Tampa, FL 21,778 Light Industrial 100% September 1, 1998
Cincinnati, OH 112,500 Bulk Warehouse 79% September 15, 1998
Long Island, NY 215,000 Light Industrial 82% September 24, 1998
Atlanta, GA 180,000 Bulk Warehouse 100% October 1, 1998
------------
Total 1,018,977
============
</TABLE>
During 1998, the Other Real Estate Partnerships completed five
developments and two expansions totaling approximately 1.6 million square feet
of GLA at a total cost of approximately $48.7 million, or $30.94 per square
foot. The developed properties have the following characteristics:
<TABLE>
<CAPTION>
OCCUPANCY
METROPOLITAN AREA GLA PROPERTY TYPE at 12/31/98 ACQUISITION DATE
- -------------------------- ----------- -------------------------------- -------------- --------------------
<S> <C> <C> <C> <C>
Detroit, MI (a) 70,000 Light Industrial 100% February 1, 1998
Milwaukee, WI 466,301 Manufacturing 100% March 2, 1998
Jefferson, IN 532,400 Bulk Warehouse 100% May 1, 1998
Indianapolis, IN 60,000 Bulk Warehouse 100% September 30, 1998
Central, PA 242,824 Bulk Warehouse 100% September 30, 1998
Central PA (a) 101,620 Light industrial 100% October 1, 1998
Indianapolis, IN 100,000 Bulk Warehouse 100% November 1, 1998
-----------
Total 1,573,145
===========
</TABLE>
(a) Expansion
At December 31, 1998, the Consolidated Operating Partnership had seven
projects under development, with an estimated completion GLA of .9 million
square feet and an estimated completion cost of approximately $30.3 million.
At December 31, 1998, the Other Real Estate Partnerships had 13 projects
under development, with an estimated completion GLA of 1.6 million square feet
and an estimated completion cost of approximately $71.6 million.
12
<PAGE> 14
PROPERTY SALES
During 1998, the Consolidated Operating Partnership sold 36 in-service
properties totaling approximately 1.6 million square feet of GLA and several
land parcels. Total gross sales proceeds approximated $77.7 million. The sold
in-service properties have the following characteristics:
<TABLE>
<CAPTION>
METROPOLITAN AREA GLA PROPERTY TYPE SALE DATE
----------------------------- ---------------- ------------------------- -------------------------
<S> <C> <C> <C>
Livonia, MI 38,500 Light Industrial January 7, 1998
Cherry Hill, NJ 109,771 Bulk Warehouse April 6, 1998
Byron, MI 16,000 Light Industrial July 21, 1998
Madison Heights, MI 29,550 Light Industrial July 30, 1998
Chicago, IL 80,400 Light Industrial September 2, 1998
Denver, CO 43,720 R&D Flex September 8, 1998
Chicago, IL (a) 200,000 Bulk Warehouse October 6, 1998
Chicago, IL (a) 191,145 Light Industrial October 6, 1998
Detroit, MI (a) 147,725 R&D Flex November 5, 1998
Long Island, NY (a) 50,338 Light Industrial November 19, 1998
Chicago, IL (a) 84,760 Light Industrial November 19, 1998
Atlanta, GA (a) 347,056 Light Industrial/ November 19, 1998
Bulk Warehouse/
Regional Warehouse
Tampa, FL (a) 135,662 Light Industrial/ November 19, 1998
R&D Flex
Englewood, CO 64,733 Light Industrial December 11, 1998
Farmington Hills, MI 7,306 Light Industrial December 15, 1998
Hamilton, NJ 37,406 Light Industrial December 30, 1998
Olivette, MO 31,500 Manufacturing December 30, 1998
Denver, CO 28,600 Light Industrial December 31, 1998
---------------
Total 1,644,172
================
</TABLE>
(a) Properties were sold to the September 1998 Joint Venture
During 1998, the Other Real Estate Partnerships sold five in-service
properties totaling approximately .4 million square feet of GLA and several land
parcels. Total gross sales proceeds approximated $22.2 million. The sold
in-service properties have the following characteristics:
<TABLE>
<CAPTION>
METROPOLITAN AREA GLA PROPERTY TYPE SALE DATE
----------------------------- ---------------- ------------------------- -------------------------
<S> <C> <C> <C>
Reading, PA 100,000 Bulk Warehouse March 5, 1998
Allentown, PA 101,750 Light Industrial March 5, 1998
Allentown, PA 43,425 Light Industrial March 5, 1998
Reading, PA 69,190 Bulk Warehouse March 5, 1998
Lebanon, PA 88,400 Bulk Warehouse March 11, 1998
---------------
Total 402,765
================
</TABLE>
PROPERTY ACQUISITIONS, DEVELOPMENTS AND SALES SUBSEQUENT TO YEAR END
During the period January 1, 1999 through March 24, 1999, the
Consolidated Operating Partnership acquired or completed development of three
industrial properties for a total estimated investment of approximately $16.8
million. The Consolidated Operating Partnership also sold eight industrial
properties for approximately $19.1 million of gross proceeds.
During the period January 1, 1999 through March 24, 1999, the Other Real
Estate Partnerships acquired one industrial property and one land parcel for a
total estimated investment of approximately $11.2 million.
13
<PAGE> 15
DETAIL PROPERTY LISTING
The following table lists all of the Consolidated Operating
Partnership's properties as of December 31, 1998, by geographic market area.
PROPERTY LISTING
<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- ------------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ATLANTA
- -------
1650 GA Highway 155 McDonough, GA 1991 Bulk Warehouse 12.80 228,400 100%
415 Industrial Park Road Cartersville, GA 1986 Manufacturing 9.27 119,657 100%
434 Industrial Park Road Cartersville, GA 1988 Manufacturing 8.07 57,493 100%
435 Industrial Park Road Cartersville, GA 1986 Reg. Warehouse 8.03 71,000 100%
14101 Industrial Park Blvd. Covington, GA 1984 Light Industrial 9.25 92,160 100%
801-804 Blacklawn Road Conyers, GA 1982 Bulk Warehouse 6.67 111,090 100%
1665 Dogwood Drive Conyers, GA 1973 Manufacturing 9.46 198,000 100%
1715 Dogwood Drive Conyers, GA 1973 Manufacturing 4.61 100,000 100%
11235 Harland Drive Covington, GA 1988 Light Industrial 5.39 32,361 100%
700 Westlake Parkway Atlanta, GA 1990 Light Industrial 3.50 56,400 100%
800 Westlake Parkway Atlanta, GA 1991 Bulk Warehouse 7.40 132,400 80%
4050 Southmeadow Parkway Atlanta, GA 1991 Reg. Warehouse 6.60 87,328 100%
4051 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 11.20 171,671 100%
4071 Southmeadow Parkway Atlanta, GA 1991 Bulk Warehouse 17.80 209,918 100%
4081 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 12.83 254,172 100%
1875 Rockdale Industrial Blvd. Conyers, GA 1966 Manufacturing 5.70 121,600 100%
3312 N. Berkeley Lake Road Duluth, GA 1969 Bulk Warehouse 52.11 1,040,276 100%
370 Great Southwest Pkway (k) Atlanta, GA 1986 Light Industrial 8.06 150,536 80%
3495 Bankhead Highway (k) Atlanta, GA 1986 Bulk Warehouse 20.50 408,819 70%
955 Cobb Place Kennesaw, GA 1991 Reg. Warehouse 8.73 97,518 100%
6105 Boatrock Boulevard Atlanta, GA 1972 Light Industrial 1.79 32,000 100%
1640 Sands Place Marietta, GA 1977 Light Industrial 1.97 35,425 100%
7000 Highland Parkway Smyrna, GA 1998 Bulk Warehouse 10.00 123,808 100%
2084 Lake Industrial Court Conyers, GA 1998 Bulk Warehouse 13.74 180,000 100%
---------- -------
SUBTOTAL OR AVERAGE 4,112,032 96%
---------- -------
BALTIMORE
- ---------
3431 Benson Baltimore, MD 1988 Light Industrial 3.48 60,400 100%
1801 Portal Baltimore, MD 1987 Light Industrial 3.72 57,600 100%
1811 Portal Baltimore, MD 1987 Light Industrial 3.32 60,000 100%
1831 Portal Baltimore, MD 1990 Light Industrial 3.18 46,522 100%
1821 Portal Baltimore, MD 1986 Light Industrial 4.63 86,234 100%
1820 Portal Baltimore, MD (g) 1982 Bulk Warehouse 6.55 171,000 100%
4845 Governers Way Frederick, MD 1988 Light Industrial 5.47 83,064 100%
8900 Yellow Brick Road Baltimore, MD 1982 Light Industrial 5.80 60,000 100%
7476 New Ridge Hanover, MD 1987 Light Industrial 18.00 71,866 89%
---------- -------
SUBTOTAL OR AVERAGE 696,686 99%
---------- -------
BATON ROUGE
- -----------
11200 Industriplex Blvd. Baton Rouge, LA 1986 Light Industrial 3.00 42,355 100%
11441 Industriplex Blvd. Baton Rouge, LA 1987 Light Industrial 2.40 35,596 81%
11301 Industriplex Blvd. Baton Rouge, LA 1985 Light Industrial 2.50 38,396 100%
6565 Exchequer Drive Baton Rouge, LA 1986 Bulk Warehouse 5.30 108,800 100%
---------- -------
SUBTOTAL OR AVERAGE 225,147 97%
---------- -------
CHICAGO
- -------
1330 West 43rd Street Chicago, IL 1977 Bulk Warehouse 4.25 109,728 100%
2300 Hammond Drive Schaumburg, IL 1970 Light Industrial 4.13 77,000 100%
6500 North Lincoln Avenue Lincolnwood, IL 1965/88 Light Industrial 2.52 63,050 62%
3600 West Pratt Avenue Lincolnwood, IL 1953/88 Bulk Warehouse 6.35 205,481 100%
917 North Shore Drive Lake Bluff, IL 1974 Light Industrial 4.27 84,575 100%
6750 South Sayre Avenue Bedford Park, IL 1975 Light Industrial 2.51 63,383 100%
585 Slawin Court Mount Prospect, IL 1992 R&D/Flex 3.71 38,150 100%
2300 Windsor Court Addison, IL 1986 Bulk Warehouse 6.80 105,100 81%
3505 Thayer Court Aurora, IL 1989 Light Industrial 4.60 64,220 100%
3600 Thayer Court Aurora, IL 1989 Light Industrial 6.80 67,058 100%
736-776 Industrial Drive Elmhurst, IL 1975 Light Industrial 3.79 80,520 100%
5310-5352 East Avenue Countryside, IL 1975 Light Industrial 4.77 88,042 100%
12330-12358 South LaTrobe Alsip, IL 1975 Light Industrial 3.71 85,390 92%
305-311 Era Drive Northbrook, IL 1978 Light Industrial 1.82 27,549 100%
700-714 Landwehr Road Northbrook, IL 1978 Light Industrial 1.99 41,835 91%
4330 South Racine Avenue Chicago, IL 1978 Manufacturing 5.57 168,000 100%
13040 S. Crawford Avenue Alsip, IL 1976 Bulk Warehouse 15.12 400,076 100%
12241 Melrose Street Franklin Park, IL 1969 Light Industrial 2.47 77,031 100%
7200 S. Leamington Bedford Park, IL 1950 Bulk Warehouse 12.24 310,752 100%
</TABLE>
14
<PAGE> 16
<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- ------------- ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CHICAGO (CONT.)
- -------
12301-12325 S. Laramie Alsip, IL 1975 Bulk Warehouse 8.83 100%
Avenue 204,586
6300 West Howard Street Niles, IL 1956/64 Manufacturing 19.50 364,000 100%
301 Hintz Wheeling, IL 1960 Manufacturing 2.51 43,636 100%
301 Alice Wheeling, IL 1965 Light Industrial 2.88 65,450 100%
410 West 169th Street South Holland, IL 1974 Bulk Warehouse 6.40 100%
151,436
1001 Commerce Court Buffalo Grove, IL 1989 Light Industrial 5.37 84,956 100%
11939 South Central Avenue Alsip, IL 1972 Bulk Warehouse 12.60 320,171 99%
405 East Shawmut LaGrange, IL 1965 Light Industrial 3.39 59,075 100%
2201 Lunt Elk Grove Village, IL 1963 Bulk Warehouse 7.98 212,040 85%
1010-50 Sesame Street Bensenville, IL (d) 1976 Manufacturing 8.00 252,000 100%
5555 West 70th Place Bedford Park, IL 1973 Manufacturing 2.50 41,531 100%
3200-3250 South St. Louis Chicago, IL 1968 Light Industrial 8.66 74,685 100%
(k)
3110-3130 South St. Louis Chicago, IL 1968 Light Industrial 4.00 23,254 100%
7301 South Hamlin Chicago, IL 1975/86 Light Industrial 1.49 56,017 100%
7401 South Pulaski Chicago, IL 1975/86 Bulk Warehouse 5.36 213,670 99%
3900 West 74th Street Chicago, IL 1975/86 Reg. Warehouse 2.13 66,000 100%
7501 South Pulaski Chicago, IL 1975/86 Bulk Warehouse 3.88 0%
145,714
396 Fenton Lane West Chicago, IL 1987 R&D/Flex 2.74 36,480 100%
400 Wegner Drive West Chicago, IL 1988 Light Industrial 1.33 22,480 100%
450 Fenton Lane West Chicago, IL 1990 R&D/Flex 2.74 35,880 61%
1275 Roosevelt Road West Chicago, IL 1986 R&D/Flex 5.50 54,660 85%
385 Fenton Lane West Chicago, IL 1990 Bulk Warehouse 6.79 182,000 100%
505 Wegner Drive West Chicago, IL 1988 Reg. Warehouse 1.92 21,548 0%
335 Crossroad Parkway Bolingbrook, IL 1996 Bulk Warehouse 12.86 288,000 100%
10435 Seymour Avenue Franklin Park, IL 1967 Light Industrial 1.85 53,500 100%
905 Paramount Batavia, IL 1977 Light Industrial 2.60 60,000 33%
1005 Paramount Batavia, IL 1978 Light Industrial 2.50 64,787 100%
34-45 Lake Street Northlake, IL 1978 Bulk Warehouse 5.71 124,804 100%
2120-24 Roberts Broadview, IL 1960 Light Industrial 2.30 60,008 73%
4309 South Morgan Street Chicago, IL 1975 Manufacturing 6.91 200,000 100%
405-17 University Drive Arlington Hgts, IL 1977 Light Industrial 2.42 56,400 100%
--------- -------
SUBTOTAL OR AVERAGE 5,795,708 94%
--------- -------
CINCINNATI
- ----------
9900-9970 Princeton Cincinnati, OH (a) 1970 Bulk Warehouse 10.64 185,580 98%
2940 Highland Avenue Cincinnati, OH (a) 1969/74 Bulk Warehouse 17.08 502,000 100%
4700-4750 Creek Road Blue Ash, OH (a) 1960 Light Industrial 15.32 265,000 96%
4860 Duff Drive Cincinnati, OH 1979 Light Industrial 1.02 15,986 100%
4866 Duff Drive Cincinnati, OH 1979 Light Industrial 1.02 16,000 100%
4884 Duff Drive Cincinnati, OH 1979 Light Industrial 1.59 25,000 70%
4890 Duff Drive Cincinnati, OH 1979 Light Industrial 1.59 25,018 100%
9636-9643 Interocean Drive Cincinnati, OH 1983 Light Industrial 4.13 29,371 100%
7600 Empire Drive Florence, KY 1964 Manufacturing 38.73 100%
570,000
12072 Best Place Springboro, OH 1984 Bulk Warehouse 7.80 112,500 86%
901 Pleasant Valley Drive Springboro, OH 1984 Light Industrial 7.70 69,220 100%
--------- -------
SUBTOTAL OR AVERAGE 1,815,675 98%
--------- -------
CLEVELAND
- ---------
6675 Parkland Boulevard Salon, OH 1991 R&D/Flex 10.41 102,500 100%
21510-21600 Alexander Rd. Oakwood, OH 1985 Light Industrial 5.70 106,721 98%
(l)
5405 & 5505 Valley Belt Rd. Independence, OH 1983 Light Industrial 6.23 62,395 100%
(k)
10145 Philipp Parkway Streetsboro, OH 1994 Reg. Warehouse 4.00 51,525 100%
4410 Hamann Willoughby, OH 1975 Light Industrial 1.40 32,000 100%
--------- -------
SUBTOTAL OR AVERAGE 355,141 99%
--------- -------
COLUMBUS
- --------
6911 Americana Parkway Columbus, OH 1980 Light Industrial 4.05 56,849 78%
3800 Lockbourne Industrial Columbus, OH 1986 Bulk Warehouse 43.60 404,734 100%
Pky
3880 Groveport Road Obetz, OH 1986 Bulk Warehouse 22.13 705,600 100%
1819 North Walcutt Road Columbus, OH 1973 Bulk Warehouse 11.33 243,000 88%
4300 Cemetery Road Hilliard, OH 1968 Manufacturing 62.71 255,470 100%
4115 Leap Road (k) Hilliard, OH 1977 R&D/Flex 18.66 217,612 100%
3300 Lockbourne Columbus, OH 1964 Bulk Warehouse 17.00 300,200 100%
--------- -------
SUBTOTAL OR AVERAGE 2,183,465 98%
--------- -------
DALLAS
- ------
1275-1281 Roundtable Drive Dallas, TX 1966 Light Industrial 1.75 30,642 100%
2406-2416 Walnut Ridge Dallas, TX 1978 Light Industrial 1.76 44,000 100%
12750 Perimeter Drive Dallas, TX 1979 Bulk Warehouse 6.72 178,200 100%
1324-1343 Roundtable Drive Dallas, TX 1972 Light Industrial 2.09 47,000 100%
1405-1409 Avenue II East Grand Prairie, TX 1969 Light Industrial 1.79 36,000 100%
2651-2677 Manana Dallas, TX 1966 Light Industrial 2.55 82,229 100%
2401-2419 Walnut Ridge Dallas, TX 1978 Light Industrial 1.20 30,000 100%
4248-4252 Simonton Farmers Ranch, TX 1973 Bulk Warehouse 8.18 205,693 100%
900-906 Great Southwest Pkwy Arlington, TX 1972 Light Industrial 3.20 69,761 100%
2179 Shiloh Road Garland, TX 1982 Reg. Warehouse 3.63 65,700 100%
</TABLE>
15
<PAGE> 17
<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- ------------- ---------- --- ------------
DALLAS (CONT.)
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
2159 Shiloh Road Garland, TX 1982 R&D/Flex 1.15 20,800 100%
2701 Shiloh Road Garland, TX 1981 Bulk Warehouse 8.20 214,650 100%
12784 Perimeter Drive (l) Dallas, TX 1981 Light Industrial 4.57 95,671 100%
3000 West Commerce Dallas, TX 1980 Manufacturing 11.23 128,478 100%
3030 Hansboro Dallas, TX 1971 Bulk Warehouse 3.71 100,000 100%
5222 Cockrell Hill Dallas, TX 1973 Manufacturing 4.79 96,506 100%
405-407 113th Arlington, TX 1969 Light Industrial 2.75 60,000 100%
816 111th Street Arlington, TX 1972 Light Industrial 2.89 65,000 0%
1017-25 Jacksboro Highway Fort Worth, TX 1970 Light Industrial 1.49 30.000 100%
7341 Dogwood Park Richland Hills, TX 1973 Light Industrial 1.09 20,000 100%
7427 Dogwood Park Richland Hills, TX 1973 Light Industrial 1.60 27,500 100%
7348-54 Tower Street Richland Hills, TX 1978 Light Industrial 1.09 20,000 100%
7370 Dogwood Park Richland Hills, TX (j) 1987 Light Industrial 1.18 18,500 100%
7339-41 Tower Street Richland Hills, TX 1980 Light Industrial 0.95 17,600 100%
7437-45 Tower Street Richland Hills, TX 1977 Light Industrial 1.16 20,000 100%
7331-59 Airport Freeway Richland Hills, TX 1987 R&D/Flex 2.63 37,800 100%
7338-60 Dogwood Park Richland Hills, TX 1978 R&D/Flex 1.51 26,208 92%
7450-70 Dogwood Park Richland Hills, TX (j) 1985 Light Industrial 0.88 18,000 100%
7423-49 Airport Freeway Richland Hills, TX (j) 1985 R&D/Flex 2.39 33,810 100%
7400 Whitehall Street Richland Hills, TX 1994 Light Industrial 1.07 21,750 100%
---------- -----
SUBTOTAL OR AVERAGE 1,861,498 96%
---------- -----
DAYTON
- ------
6094-6104 Executive Boulevard Huber Heights, OH 1975 Light Industrial 3.33 43,200 100%
6202-6220 Executive Boulevard Huber Heights, OH 1996 Light Industrial 3.79 64,000 100%
6268-6294 Executive Boulevard Huber Heights, OH 1989 Light Industrial 4.03 60,800 79%
5749-5753 Executive Boulevard Huber Heights, OH 1975 Light Industrial 1.15 12,000 100%
6230-6266 Executive Boulevard Huber Heights, OH 1979 Light Industrial 5.30 84,000 100%
2200-2224 Sandridge Road Moriane, OH 1983 Light Industrial 2.96 58,746 100%
8119-8137 Uehling Lane Dayton, OH 1978 R&D/Flex 1.15 20,000 100%
---------- -----
SUBTOTAL OR AVERAGE 342,746 96%
---------- -----
DENVER
- ------
7100 North Broadway - Bldg. 1 Denver, CO 1978 Light Industrial 16.80 32,269 94%
7100 North Broadway - Bldg. 2 Denver, CO 1978 Light Industrial 16.90 32,500 77%
7100 North Broadway - Bldg. 3 Denver, CO 1978 Light Industrial 11.60 22,259 100%
7100 North Broadway - Bldg. 5 Denver, CO 1978 Light Industrial 15.00 28,789 97%
7100 North Broadway - Bldg. 6 Denver, CO 1978 Light Industrial 22.50 38,255 95%
10691 East Bethany Drive Aurora, CO 1979 Light Industrial 1.84 25,026 100%
20100 East 32nd Avenue Parkway Aurora, CO 1997 R&D/Flex 4.10 51,300 99%
15700 - 15820 West 6th Avenue Golden, CO 1978 Light Industrial 1.92 52,758 89%
12850-15884 West 6th Avenue Golden, CO 1978 Light Industrial 1.92 31,856 100%
5454 Washington Denver, CO 1985 Light Industrial 4.00 34,740 88%
5801 West 6th Avenue Lakewood, CO 1980 Light Industrial 1.03 15,500 70%
5805 West 6th Avenue Lakewood, CO 1980 Light Industrial 1.03 20,358 23%
5815 West 6th Avenue Lakewood, CO 1980 Light Industrial 1.03 20,765 100%
5825 West 6th Avenue Lakewood, CO 1980 R&D/Flex 1.03 20,748 100%
5835 West 6th Avenue Lakewood, CO 1980 Light Industrial 1.03 20,490 100%
525 East 70th Street Denver, CO 1985 Light Industrial 5.18 12,000 100%
565 East 70th Street Denver, CO 1985 Light Industrial 5.18 29,990 100%
605 East 70th Street Denver, CO 1985 Light Industrial 5.18 34,000 88%
625 East 70th Street Denver, CO 1985 Light Industrial 5.18 24,000 100%
665 East 70th Street Denver, CO 1985 Light Industrial 5.18 24,000 83%
700 West 48th Street Denver, CO 1984 Light Industrial 5.40 53,431 100%
702 West 48th Street Denver, CO 1984 Light Industrial 5.40 23,820 100%
800 East 73rd Denver, CO 1984 R&D/Flex 4.50 49,360 100%
850 East 73rd Denver, CO 1984 R&D/Flex 4.50 38,962 100%
6425 North Washington Denver, CO 1983 R&D/Flex 4.05 82,120 100%
3370 North Peoria Street Aurora, CO 1978 R&D/Flex 1.64 25,520 50%
3390 North Peoria Street Aurora, CO 1978 R&D/Flex 1.46 22,699 100%
3508-3538 North Peoria Street Aurora, CO 1978 R&D/Flex 2.61 40,653 100%
3568 North Peoria Street Aurora, CO 1978 R&D/Flex 2.24 34,775 100%
3350 North Peoria Street Aurora, CO 1978 R&D/Flex 2.16 33,573 96%
4785 Elati Denver, CO 1972 Light Industrial 3.34 34,777 100%
4770 Fox Street Denver, CO 1972 Light Industrial 3.38 26,565 100%
1550 West Evans Denver, CO 1975 Light Industrial 3.92 78,788 100%
12401-41 East 37th Avenue Denver, CO 1980 R&D/Flex 1.19 26,922 100%
3751 - 71 Revere Street Denver, CO 1980 Reg. Warehouse 2.41 54,666 100%
3871 Revere Street Denver, CO 1980 Reg. Warehouse 3.19 75,265 100%
5454 Havana Street Denver, CO 1980 R&D/Flex 2.68 42,504 100%
5500 Havana Street Denver, CO 1980 R&D/Flex 2.19 34,776 100%
4570 Ivy Street Denver, CO 1985 Light Industrial 1.77 31,355 100%
5855 Stapleton Drive North Denver, CO 1985 Light Industrial 2.33 41,268 91%
5885 Stapleton Drive North Denver, CO 1985 Light Industrial 3.05 53,893 100%
5200-5280 North Broadway Denver, CO 1977 Light Industrial 1.54 31,780 100%
</TABLE>
16
<PAGE> 18
<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
DENVER (CONT.)
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
5977-5995 North Broadway Denver, CO 1978 Light Industrial 4.96 50,280 100%
2952-5978 North Broadway Denver, CO 1978 Light Industrial 7.91 88,977 100%
6400 North Broadway Denver, CO 1982 Light Industrial 4.51 69,430 100%
875 Parfet Street Lakewood, CO 1975 Light Industrial 3.06 49,216 100%
4721 Ironton Street Denver, CO 1969 R&D/Flex 2.84 50,160 100%
833 Parfet Street Lakewood, CO 1974 R&D/Flex 2.57 24,800 100%
11005 West 8th Avenue Lakewood, CO 1974 Light Industrial 2.57 25,672 100%
7100 North Broadway - 7 Denver, CO 1985 R&D/Flex 2.30 24,822 97%
7100 North Broadway - 8 Denver, CO 1985 R&D/Flex 2.30 9,107 100%
6804 East 48th Avenue Denver, CO 1973 R&D/Flex 2.23 46,464 100%
445 Bryant Street Denver, CO 1960 Light Industrial 6.31 292,471 100%
East 47th Drive - A Denver, CO 1997 R&D/Flex 3.00 51,200 100%
Centennial Airport Business Pk Denver, CO 1997 R&D/Flex 3.20 59,270 100%
9500 W. 49th Street - A Wheatridge, CO 1997 Light Industrial 1.74 19,217 100%
9500 W. 49th Street - B Wheatridge, CO 1997 Light Industrial 1.74 16,441 100%
9500 W. 49th Street - C Wheatridge, CO 1997 R&D/Flex 1.74 29,174 100%
9500 W. 49th Street - D Wheatridge, CO 1997 Light Industrial 1.74 41,615 100%
8100 South Park Way - A Littleton, CO 1997 R&D/Flex 3.33 52,581 100%
8100 South Park Way - B Littleton, CO 1984 R&D/Flex 0.78 12,204 100%
8100 South Park Way - C Littleton, CO 1984 Light Industrial 4.28 67,520 100%
451-591 East 124th Avenue Littleton, CO 1979 Light Industrial 4.96 59,711 100%
14100 East Jewell Aurora, CO 1980 R&D/Flex 3.67 58,553 67%
14190 East Jewell Aurora, CO 1980 R&D/Flex 1.84 29,442 92%
608 Garrison Street Lakewood, CO 1984 R&D/Flex 2.17 25,075 85%
610 Garrison Street Lakewood, CO 1984 R&D/Flex 2.17 24,965 100%
1111 West Evans (A&C) Denver, CO 1986 Light Industrial 2.00 36,894 100%
1111 West Evans (B) Denver, CO 1986 Light Industrial 0.50 4,725 100%
15000 West 6th Avenue Golden, CO 1985 R&D/Flex 5.25 69,279 100%
14998 West 6th Avenue E Golden, CO 1995 R&D/Flex 2.29 42,832 100%
14998 West 6th Avenue F Englewood, CO 1995 R&D/Flex 2.29 20,424 100%
12503 East Euclid Drive Denver, CO 1986 R&D/Flex 10.90 97,871 100%
6547 South Racine Circle Englewood, CO 1996 Light Industrial 3.92 60,112 85%
7800 East Iliff Avenue Denver, CO 1983 R&D/Flex 3.06 22,296 100%
2369 South Trenton Way Denver, CO 1983 R&D/Flex 4.80 33,267 62%
2370 South Trenton Way Denver, CO 1983 R&D/Flex 3.27 22,735 100%
2422 South Trenton Way Denver, CO 1983 R&D/Flex 3.94 27,413 100%
2452 South Trenton Way Denver, CO 1983 R&D/Flex 6.78 47,931 100%
651 Topeka Way Denver, CO 1985 R&D/Flex 4.53 24,000 100%
680 Atchinson Way Denver, CO 1985 R&D/Flex 4.53 24,000 100%
8122 South Park Lane - A Littleton, CO 1986 R&D/Flex 5.09 43,987 100%
8122 South Park Lane - B Littleton, CO 1986 Light Industrial 2.28 20,389 100%
1600 South Abilene Aurora, CO 1986 R&D/Flex 3.53 47,930 100%
1620 South Abilene Aurora, CO 1986 Light Industrial 2.04 27,666 100%
1640 South Abilene Aurora, CO 1986 Light Industrial 2.80 37,948 100%
13900 East Florida Avenue Aurora, CO 1986 R&D/Flex 1.44 19,493 100%
4301 South Federal Boulevard Englewood, CO 1997 Reg. Warehouse 2.80 35,381 100%
14401-14492 East 33rd Place Aurora, CO 1979 Bulk Warehouse 4.75 100,100 100%
11701 East 53rd Avenue Denver, CO 1985 Reg. Warehouse 4.19 81,981 100%
5401 Oswego Street Denver, CO 1985 Reg. Warehouse 2.80 53,838 100%
3811 Joliet Denver, CO 1977 R&D/Flex 14.24 124,290 100%
2630 West 2nd Avenue Denver, CO 1970 Light Industrial 0.50 8,260 100%
2650 West 2nd Avenue Denver, CO 1970 Light Industrial 2.80 36,081 83%
14818 West 6th Avenue Bldg. A Golden, CO 1985 R&D/Flex 2.54 39,776 100%
14828 West 6th Avenue Bldg. B Golden, CO 1985 R&D/Flex 2.54 41,805 100%
12055 E. 49th Ave/4955 Peoria Denver, CO 1984 R&D/Flex 3.09 49,575 100%
4940-4950 Paris Denver, CO 1984 R&D/Flex 1.58 25,290 100%
4970 Paris Denver, CO 1984 R&D/Flex 0.98 15,767 100%
5010 Paris Denver, CO 1984 R&D/Flex 0.92 14,822 100%
7367 South Revere Parkway Englewood, CO 1997 Bulk Warehouse 8.50 102,839 100%
---------- ------
SUBTOTAL OR AVERAGE 4,248,439 97%
---------- ------
DES MOINES
- ----------
1500 East Washington Avenue Des Moines, IA 1987 Bulk Warehouse 13.25 192,466 100%
1600 East Washington Avenue Des Moines, IA 1987 Bulk Warehouse 6.78 81,866 100%
4121 McDonald Avenue Des Moines, IA 1977 Bulk Warehouse 11.02 177,431 100%
4141 McDonald Avenue Des Moines, IA 1976 Bulk Warehouse 11.03 263,196 100%
4161 McDonald Avenue Des Moines, IA 1979 Bulk Warehouse 11.02 164,084 100%
5701 NE 17th Street Des Moines, IA 1968 Light Industrial 2.30 54,000 100%
---------- ------
SUBTOTAL OR AVERAGE 933,043 100%
---------- ------
DETROIT
- --------
12000 Merriman Road Livonia, MI 1975 Bulk Warehouse 9.28 180,000 67%
238 Executive Drive Troy, MI 1973 Light Industrial 1.32 13,740 100%
256 Executive Drive Troy, MI 1974 Light Industrial 1.12 11,273 100%
301 Executive Drive Troy, MI 1974 Light Industrial 1.27 20,411 100%
449 Executive Drive Troy, MI 1975 Reg. Warehouse 2.12 33,001 100%
</TABLE>
17
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
DETROIT (CONT.)
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
501 Executive Drive Troy, MI 1984 Light Industrial 1.57 18,061 100%
645 Executive Drive Troy, MI 1972 Light Industrial 2.27 32,470 100%
451 Robbins Drive Troy, MI 1975 Light Industrial 1.88 28,401 100%
700 Stephenson Highway Troy, MI 1978 R&D/Flex 3.13 29,344 100%
800 Stephenson Highway Troy, MI 1979 R&D/Flex 4.39 48,200 100%
1150 Stephenson Highway Troy, MI 1982 R&D/Flex 1.70 18,107 100%
1200 Stephenson Highway Troy, MI 1980 R&D/Flex 2.65 25,025 100%
1035 Crooks Road Troy, MI 1980 Light Industrial 1.74 23,320 100%
1095 Crooks Road Troy, MI 1986 R&D/Flex 2.83 35,042 100%
1416 Meijer Drive Troy, MI 1980 Light Industrial 1.20 17,944 100%
1624 Meijer Drive Troy, MI 1984 Light Industrial 3.42 44,040 100%
1972 Meijer Drive Troy, MI 1985 Reg. Warehouse 2.36 37,075 100%
2112 Meijer Drive Troy, MI 1980 Reg. Warehouse 4.12 34,558 100%
1621 Northwood Drive Troy, MI 1977 Bulk Warehouse 1.54 24,900 100%
1707 Northwood Drive Troy, MI 1983 Light Industrial 1.69 28,750 100%
1749 Northwood Drive Troy, MI 1977 Bulk Warehouse 1.69 26,125 100%
1788 Northwood Drive Troy, MI 1977 Light Industrial 1.55 12,480 100%
1821 Northwood Drive Troy, MI 1977 Reg. Warehouse 2.07 35,050 100%
1826 Northwood Drive Troy, MI 1977 Light Industrial 1.22 12,480 100%
1864 Northwood Drive Troy, MI 1977 Light Industrial 1.55 12,480 100%
1902 Northwood Drive Troy, MI 1977 R&D/Flex 3.65 62,925 0%
1921 Northwood Drive Troy, MI 1977 Light Industrial 2.33 42,000 100%
2230 Elliott Avenue Troy, MI 1974 Light Industrial 0.90 12,612 100%
2237 Elliott Avenue Troy, MI 1974 Light Industrial 0.96 12,612 100%
2277 Elliott Avenue Troy, MI 1975 Light Industrial 0.96 12,612 100%
2291 Elliott Avenue Troy, MI 1974 Light Industrial 1.06 12,200 100%
2451 Elliott Avenue Troy, MI 1974 Light Industrial 1.68 24,331 100%
2730 Research Drive Rochester Hills, MI 1988 Reg. Warehouse 3.52 57,850 100%
2791 Research Drive Rochester Hills, MI 1991 Reg. Warehouse 4.48 64,199 100%
2871 Research Drive Rochester Hills, MI 1991 Reg. Warehouse 3.55 49,543 100%
2911 Research Drive Rochester Hills, MI 1992 Reg. Warehouse 5.72 80,078 100%
3011 Research Drive Rochester Hills, MI 1988 Reg. Warehouse 2.55 32,637 100%
2870 Technology Drive Rochester Hills, MI 1988 Light Industrial 2.41 24,445 100%
2890 Technology Drive Rochester Hills, MI 1991 Light Industrial 1.76 24,410 100%
2900 Technology Drive Rochester Hills, MI 1992 Reg. Warehouse 2.15 31,047 100%
2920 Technology Drive Rochester Hills, MI 1992 Light Industrial 1.48 19,011 100%
2930 Technology Drive Rochester Hills, MI 1991 Light Industrial 1.41 17,994 100%
2950 Technology Drive Rochester Hills, MI 1991 Light Industrial 1.48 19,996 100%
2960 Technology Drive Rochester Hills, MI 1992 Reg. Warehouse 3.83 41,565 100%
23014 Commerce Drive Farmington Hills, MI 1983 R&D/Flex 0.65 7,200 100%
23028 Commerce Drive Farmington Hills, MI 1983 Light Industrial 1.26 20,265 100%
23035 Commerce Drive Farmington Hills, MI 1983 Light Industrial 1.23 15,200 100%
23042 Commerce Drive Farmington Hills, MI 1983 R&D/Flex 0.75 8,790 100%
23065 Commerce Drive Farmington Hills, MI 1983 Light Industrial 0.91 12,705 0%
23070 Commerce Drive Farmington Hills, MI 1983 R&D/Flex 1.43 16,765 100%
23079 Commerce Drive Farmington Hills, MI 1983 Light Industrial 0.85 10,830 100%
23093 Commerce Drive Farmington Hills, MI 1983 Reg. Warehouse 3.87 49,040 100%
23135 Commerce Drive Farmington Hills, MI 1986 Light Industrial 2.02 23,969 100%
23149 Commerce Drive Farmington Hills, MI 1985 Reg. Warehouse 6.32 47,700 100%
23163 Commerce Drive Farmington Hills, MI 1986 Light Industrial 1.51 19,020 100%
23177 Commerce Drive Farmington Hills, MI 1986 Light Industrial 2.29 32,127 100%
23206 Commerce Drive Farmington Hills, MI 1985 Light Industrial 1.30 19,822 100%
23290 Commerce Drive Farmington Hills, MI 1980 Reg. Warehouse 2.56 42,930 100%
23370 Commerce Drive Farmington Hills, MI 1980 Light Industrial 0.67 8,741 100%
24492 Indoplex Circle Farmington Hills, MI 1976 Light Industrial 1.63 24,000 100%
24528 Indoplex Circle Farmington Hills, MI 1976 Light Industrial 2.26 34,650 100%
31800 Plymouth Road - Bldg. 1 Livonia, MI 1968/89 Bulk Warehouse 42.71 705,829 99%
31800 Plymouth Road - Bldg. 2 Livonia, MI 1968/89 Bulk Warehouse 11.81 184,614 100%
31800 Plymouth Road - Bldg. 3 Livonia, MI 1968/89 Bulk Warehouse 6.13 98,024 96%
31800 Plymouth Road - Bldg. 6 Livonia, MI 1968/89 Bulk Warehouse 9.06 183,959 100%
31800 Plymouth Road - Bldg. 7 Livonia, MI 1968/89 Light Industrial 1.64 26,836 100%
21477 Bridge Street Southfield, MI 1986 Light Industrial 3.10 41,500 86%
32450 N. Avis Drive Madison Heights, MI 1974 Light Industrial 3.23 55,820 0%
32200 N. Avis Drive Madison Heights, MI 1973 Light Industrial 6.15 88,700 100%
11813 Hubbard Livonia, MI 1979 Light Industrial 1.95 33,300 100%
11866 Hubbard Livonia, MI 1979 Light Industrial 2.32 41,380 100%
12050-12300 Hubbard (k) Livonia, MI 1981 Light Industrial 6.10 85,086 89%
38200 Plymouth Livonia, MI 1997 Bulk Warehouse 11.43 140,365 100%
38220 Plymouth Livonia, MI 1988 Bulk Warehouse 13.14 145,232 100%
38300 Plymouth Livonia, MI 1997 Bulk Warehouse 6.95 127,800 100%
12707 Eckles Road Plymouth, MI 1990 Light Industrial 2.62 42,300 100%
9300-9328 Harrison Rd. Romulus, MI 1978 Light Industrial 2.53 29,286 100%
9330-9358 Harrison Rd. Romulus, MI 1978 Light Industrial 2.53 29,280 63%
28420-28448 Highland Rd Romulus, MI 1979 Light Industrial 2.53 29,280 100%
</TABLE>
18
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
DETROIT (CONT.)
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
28450-28478 Highland Rd Romulus, MI 1979 Light Industrial 2.53 29,340 88%
28421-28449 Highland Rd Romulus, MI 1980 Light Industrial 2.53 29,285 100%
28451-28479 Highland Rd Romulus, MI 1980 Light Industrial 2.53 29,280 75%
28825-28909 Highland Rd Romulus, MI 1981 Light Industrial 2.53 29,284 100%
28933-29017 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 50%
28824-28908 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 100%
28932-29016 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 100%
9710-9734 Harrison Road Romulus, MI 1987 Light Industrial 2.22 25,925 100%
9740-9772 Harrison Road Romulus, MI 1987 Light Industrial 2.53 29,548 100%
9840-9868 Harrison Road Romulus, MI 1987 Light Industrial 2.53 29,280 100%
9800-9824 Harrison Road Romulus, MI 1987 Light Industrial 2.22 25,620 100%
29265-29285 Airport Drive Romulus, MI 1983 Light Industrial 2.05 23,707 100%
29185-29225 Airport Drive Romulus, MI 1983 Light Industrial 3.17 36,658 100%
29149-29165 Airport Drive Romulus, MI 1984 Light Industrial 2.89 33,440 100%
29101-29115 Airport Drive Romulus, MI 1985 R&D/Flex 2.53 29,287 100%
29031-29045 Airport Drive Romulus, MI 1985 Light Industrial 2.53 29,280 100%
29050-29062 Airport Drive Romulus, MI 1986 Light Industrial 2.22 25,620 100%
29120-29134 Airport Drive Romulus, MI 1986 Light Industrial 2.53 29,282 100%
29200-29214 Airport Drive Romulus, MI 1985 Light Industrial 2.53 29,282 100%
9301-9339 Middlebelt Road Romulus, MI 1983 R&D/Flex 1.29 15,170 100%
21405 Trolley Industrial Road Taylor, MI 1971 Bulk Warehouse 11.25 180,986 98%
26980 Trolley Industrial Drive Taylor, MI 1997 Bulk Warehouse 5.43 102,400 100%
12050-12200 Farmington Road Livonia, MI 1973 Light Industrial 1.34 25,470 82%
33200 Capitol Avenue Livonia, MI 1977 Light Industrial 2.16 40,000 100%
32975 Capitol Avenue Livonia, MI 1978 R&D/Flex 0.99 18,465 100%
2725 S. Industrial Highway Ann Arbor, MI 1997 Light Industrial 2.63 37,875 100%
32920 Capitol Avenue Livonia, MI 1973 Reg. Warehouse 0.47 8,000 100%
32940 Capitol Avenue Livonia, MI 1971 Light Industrial 0.45 8,480 100%
11862 Brookfield Avenue Livonia, MI 1972 Light Industrial 0.92 14,600 100%
11923 Brookfield Avenue Livonia, MI 1973 Light Industrial 0.76 14,600 100%
11965 Brookfield Avenue Livonia, MI 1973 Light Industrial 0.88 14,600 100%
34005 Schoolcraft Road Livonia, MI 1981 Light Industrial 1.70 26,100 100%
13405 Stark Road Livonia, MI 1980 Light Industrial 0.65 9,750 100%
1170 Chicago Road Troy, MI 1983 Light Industrial 1.73 21,500 100%
1200 Chicago Road Troy, MI 1984 Light Industrial 1.73 26,210 100%
450 Robbins Drive Troy, MI 1976 Light Industrial 1.38 19,050 100%
556 Robbins Drive Troy, MI 1974 Light Industrial 0.63 8,760 100%
1230 Chicago Road Troy, MI 1996 Reg. Warehouse 2.10 30,120 100%
12886 Westmore Avenue Livonia, MI 1981 Light Industrial 1.01 18,000 0%
12898 Westmore Avenue Livonia, MI 1981 Light Industrial 1.01 18,000 0%
33025 Industrial Road Livonia, MI 1980 Light Industrial 1.02 6,250 100%
2002 Stephenson Highway Troy, MI 1986 R&D/Flex 1.42 21,850 100%
47711 Clipper Street Plymouth Twsp, MI 1996 Reg. Warehouse 2.27 36,926 100%
32975 Industrial Road Livonia, MI 1984 Light Industrial 1.19 21,000 100%
32985 Industrial Road Livonia, MI 1985 Light Industrial 0.85 12,040 100%
32995 Industrial Road Livonia, MI 1983 Light Industrial 1.11 14,280 100%
12874 Westmore Avenue Livonia, MI 1984 Light Industrial 1.01 16,000 100%
33067 Industrial Road Livonia, MI 1984 Light Industrial 1.11 18,640 100%
1775 Bellingham Troy, MI 1987 R&D/Flex 1.88 28,900 0%
1785 East Maple Troy, MI 1985 Light Industrial 0.80 10,200 100%
1807 East Maple Troy, MI 1984 R&D/Flex 2.15 28,100 100%
9800 Chicago Road Troy, MI 1985 Light Industrial 1.09 14,280 100%
1840 Enterprise Drive Rochester Hills, MI 1990 R&D/Flex 2.42 33,240 100%
1885 Enterprise Drive Rochester Hills, MI 1990 Light Industrial 1.47 19,604 100%
1935-55 Enterprise Drive Rochester Hills, MI 1990 R&D/Flex 4.54 53,324 100%
5500 Enterprise Court Warren, MI 1989 R&D/Flex 3.93 53,900 100%
5800 Enterprise Court Warren, MI 1987 Manufacturing 1.48 17,240 100%
750 Chicago Road Troy, MI 1986 Light Industrial 1.54 26,709 100%
800 Chicago Road Troy, MI 1985 Light Industrial 1.48 24,340 100%
850 Chicago Road Troy, MI 1984 Light Industrial 0.97 16,049 100%
2805 S. Industrial Highway Ann Arbor, MI 1990 R&D/Flex 1.70 24,458 100%
6833 Center Drive Sterling Heights, MI 1998 Reg. Warehouse 4.42 66,132 100%
22731 Newman Street Dearborn, MI 1985 R&D/Flex 2.31 48,000 100%
32201 North Avis Drive Madison Heights, MI 1974 R&D/Flex 4.19 50,000 100%
1100 East Mandoline Road Madison Heights, MI 1967 Bulk Warehouse 8.19 117,903 100%
30081 Stephenson Highway Madison Heights, MI 1967 Light Industrial 2.50 50,750 100%
1120 John A. Papalas Drive (1) Lincoln Park, MI 1985 Light Industrial 10.30 120,410 100%
36555 Ecorse Romulus, MI 1998 Bulk Warehouse 18.00 268,800 100%
6340 Middlebelt Romulus, MI 1998 Light Industrial 11.03 77,508 100%
---------- -------
SUBTOTAL OR AVERAGE 6,433,616 95%
---------- -------
GRAND RAPIDS
- ------------
2 84th Street Byron Center, MI 1986 Light Industrial 3.01 30,000 100%
</TABLE>
19
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
GRAND RAPIDS (CONT.)
- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
100 84th Street Byron Center, MI 1979 Light Industrial 4.20 81,000 100%
511 76th Street Grand Rapids, MI 1986 Bulk Warehouse 14.44 202,500 100%
553 76th Street Grand Rapids, MI 1985 R&D/Flex 1.16 10,000 100%
555 76th Street Grand Rapids, MI 1987 Bulk Warehouse 12.50 200,000 100%
2925 Remico Avenue Grandville, MI 1988 Light Industrial 3.40 66,505 100%
2935 Walkent Court Grand Rapids, MI 1991 Light Industrial 6.13 64,961 100%
3300 Kraft Avenue Grand Rapids, MI 1987 Bulk Warehouse 11.57 200,000 100%
3366 Kraft Avenue Grand Rapids, MI 1987 Bulk Warehouse 12.35 200,000 100%
4939 Starr Avenue Grand Rapids, MI 1985 Light Industrial 3.87 30,000 100%
5001 Kendrick Court Grand Rapids, MI 1983 Light Industrial 4.00 61,500 51%
5050 Kendrick Court Grand Rapids, MI 1988 Manufacturing 26.94 413,500 100%
5015 52nd Street Grand Rapids, MI 1987 Light Industrial 4.11 61,250 100%
5025 28th Street Grand Rapids, MI 1967 Light Industrial 3.97 14,400 100%
5079 33rd Street Grand Rapids, MI 1990 Bulk Warehouse 6.74 109,875 100%
5333 33rd Street Grand Rapids, MI 1991 Bulk Warehouse 8.09 101,250 100%
5130 Patterson Ave Grand Rapids, MI 1987 Light Industrial 6.57 30,000 100%
3395 Kraft Avenue Grand Rapids, MI 1985 Light Industrial 3.70 42,600 100%
3427 Kraft Avenue Grand Rapids, MI 1985 Light Industrial 2.40 32,600 100%
4412 Coloma Road Coloma, MI 1967 Bulk Warehouse 41.50 423,230 100%
---------- -------
SUBTOTAL OR AVERAGE 2,375,171 99%
---------- -------
HARTFORD
- --------
20 Utopia Road Manchester, CT 1989 Light Industrial 3.96 36,000 100%
50 Utopia Road Manchester, CT 1987 Light Industrial 3.97 60,000 100%
171 Utopia Road Manchester, CT 1987 Light Industrial 3.93 50,000 100%
135 Sheldon Road Manchester, CT 1987 Light Industrial 6.17 60,000 100%
169 Progress Road Manchester, CT 1987 Manufacturing 11.25 84,000 100%
227 Progress Drive Manchester, CT 1986 Light Industrial 2.51 19,800 100%
249 Progress Drive Manchester, CT 1985 Light Industrial 3.73 30,000 100%
428 Hayden Station Road Windsor, CT 1988 Light Industrial 5.47 36,000 100%
430 Hayden Station Road Windsor, CT 1987 Light Industrial 4.34 48,000 100%
436 Hayden Station Road Windsor, CT 1988 Light Industrial 10.96 60,000 100%
460 Hayden Station Road Windsor, CT 1985 Light Industrial 4.71 42,000 79%
345 MacCausland Court Cheshire, CT 1998 Bulk Warehouse 13.14 143,391 80%
---------- -------
SUBTOTAL OR AVERAGE 669,191 94%
---------- -------
HOUSTON
- --------
2102-2314 Edwards Street Houston, TX 1961 Bulk Warehouse 5.02 115,248 100%
4545 Eastpark Drive Houston, TX 1972 Reg. Warehouse 3.80 81,295 0%
3351 Ranch Street Houston, TX 1970 Reg. Warehouse 4.04 82,500 64%
3851 Yale Street Houston, TX 1971 Bulk Warehouse 5.77 132,554 100%
3337-3347 Ranch Street Houston, TX 1970 Reg. Warehouse 2.29 60,085 100%
8505 North Loop East Houston, TX 1981 Bulk Warehouse 4.99 107,769 100%
4749-4799 Eastpark Dr. Houston, TX 1979 Bulk Warehouse 7.75 182,563 100%
4851 Homestead Road Houston, TX 1973 Bulk Warehouse 3.63 142,250 100%
3365-3385 Rauch Street Houston, TX 1970 Reg. Warehouse 3.31 82,140 100%
5050 Campbell Road Houston, TX 1970 Bulk Warehouse 6.10 121,875 100%
4300 Pine Timbers Houston, TX 1980 Bulk Warehouse 64.77 113,400 58%
10600 Hampstead Houston, TX 1974 Light Industrial 1.26 19,063 100%
2300 Fairway Park Drive Houston, TX 1974 Light Industrial 1.25 19,008 100%
7969 Blakenship Houston, TX 1972 Light Industrial 2.27 48,140 100%
8001 Kempwood Houston, TX 1972 Light Industrial 1.45 33,034 100%
7901 Blankenship Houston, TX 1972 Light Industrial 2.17 48,000 100%
2500-2530 Fairway Park Houston, TX 1974 Bulk Warehouse 8.72 213,638 100%
6550 Longpointe Houston, TX 1980 Bulk Warehouse 4.13 97,700 100%
1815 Turning Basin Drive Houston, TX 1980 Bulk Warehouse 6.34 139,630 100%
1819 Turning Basin Drive Houston, TX 1980 Light Industrial 2.85 65,494 100%
4545 Mossford Drive Houston, TX 1975 Reg. Warehouse 3.56 66,565 100%
1805 Turning Basin Drive Houston, TX 1980 Bulk Warehouse 7.60 155,250 100%
7000 Empire Drive Houston, TX (f) 1980 R&D/Flex 6.25 95,073 91%
9777 West Gulfbank Drive Houston, TX (f) 1980 Light Industrial 15.45 252,242 85%
---------- -------
SUBTOTAL OR AVERAGE 2,474,516 92%
---------- -------
INDIANAPOLIS
- --------------------
2400 North Shadeland Indianapolis, IN 1970 Reg. Warehouse 2.45 40,000 100%
2402 North Shadeland Indianapolis, IN 1970 Bulk Warehouse 7.55 121,539 100%
7901 West 21st Street Indianapolis, IN 1985 Bulk Warehouse 12.00 353,000 100%
1445 Brookville Way Indianapolis, IN (a) 1989 Bulk Warehouse 8.79 115,200 100%
1440 Brookville Way Indianapolis, IN (a) 1990 Bulk Warehouse 9.64 166,400 100%
1240 Brookville Way Indianapolis, IN (a) 1990 Light Industrial 3.50 63,000 90%
</TABLE>
20
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
INDIANAPOLIS (CONT.)
- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1220 Brookville Way Indianapolis, IN (a) 1990 R&D/Flex 2.10 10,000 100%
1345 Brookville Way Indianapolis, IN (b) 1992 Bulk Warehouse 5.50 132,000 98%
1350 Brookville Way Indianapolis, IN (a) 1994 Reg. Warehouse 2.87 38,460 100%
1315 Sadlier Circle East Drive Indianapolis, IN (b) 1970/1992 R&D/Flex 1.33 14,000 100%
1341 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 Light Industrial 2.03 32,400 100%
1322-1438 Sadlier Circle East Dr Indianapolis, IN (b) 1971/1992 Light Industrial 3.79 36,000 100%
1327-1441 Sadlier Circle East Dr Indianapolis, IN (b) 1992 Light Industrial 5.50 54,000 93%
1304 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 Reg. Warehouse 2.42 17,600 100%
1402 Sadlier Circle East Drive Indianapolis, IN (b) 1970/1992 Light Industrial 4.13 40,800 100%
1504 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 Manufacturing 4.14 54,000 100%
1311 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 R&D/Flex 1.78 13,200 100%
1365 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 Light Industrial 2.16 30,000 50%
1352-1354 Sadlier Circle E.Drive Indianapolis, IN (b) 1970/1992 Light Industrial 3.50 44,000 100%
1335 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 R&D/Flex 1.20 20,000 100%
1327 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 Reg. Warehouse 1.20 12,800 100%
1425 Sadlier Circle East Drive Indianapolis, IN (b) 1971/1992 R&D/Flex 2.49 5,000 100%
1230 Brookville Way Indianapolis, IN (a) 1995 Reg. Warehouse 1.96 15,000 100%
6951 East 30th Street Indianapolis, IN 1995 Light Industrial 3.81 44,000 100%
6701 East 30th Street Indianapolis, IN 1995 Light Industrial 3.00 7,820 100%
6737 East 30th Street Indianapolis, IN 1995 Reg. Warehouse 11.01 87,500 100%
1225 Brookville Way Indianapolis, IN 1997 Light Industrial 1.00 10,000 100%
6555 East 30th Street Indianapolis, IN 1969/1981 Bulk Warehouse 37.00 331,826 100%
2432-2436 Shadeland Indianapolis, IN 1968 Light Industrial 4.57 70,560 100%
8402-8440 East 33rd Street Indianapolis, IN 1977 Light Industrial 4.70 55,200 89%
8520-8630 East 33rd Street Indianapolis, IN 1976 Light Industrial 5.30 81,000 100%
8710-8768 East 33rd Street Indianapolis, IN 1979 Light Industrial 4.70 43,200 100%
3316-3346 North Pagosa Court Indianapolis, IN 1977 Light Industrial 5.10 81,000 83%
3331 Raton Court Indianapolis, IN 1979 Light Industrial 2.80 35,000 100%
6751 East 30th Street Indianapolis, IN 1997 Bulk Warehouse 6.34 100,000 100%
---------- ------
SUBTOTAL OR AVERAGE 2,375,505 98%
---------- ------
LONG ISLAND
- -----------
1140 Motor Parkway Huppauge, NY 1978 Bulk Warehouse 8.00 153,500 100%
10 Edison Street Amityville, NY 1971 Light Industrial 1.40 34,400 100%
120 Secatogue Avenue Farmingdale, NY 1957 Reg. Warehouse 2.60 63,571 91%
100 Lauman Lane Hicksville, NY 1968 Reg. Warehouse 1.90 36,700 100%
200 Finn Court Farmingdale, NY 1965 Bulk Warehouse 5.00 105,573 100%
243 Dixon Avenue Amityville, NY 1978 Light Industrial 1.30 22,250 67%
717 Broadway Avenue Holbrook, NY 1967 Bulk Warehouse 12.30 150,000 100%
725 Broadway Avenue Holbrook, NY 1967 Bulk Warehouse 8.00 122,160 71%
270 Duffy Avenue Hicksville, NY 1956 R&D/Flex 8.40 134,625 99%
280 Duffy Avenue Hicksville, NY 1956 Light Industrial 2.60 49,200 100%
575 Underhill Boulevard Syosset, NY 1967 R&D/Flex 16.60 233,424 90%
5 Sidney Court Lindenhurst, NY 1962 Light Industrial 1.70 29,300 100%
7 Sidney Court Lindenhurst, NY 1964 Light Industrial 5.10 34,000 100%
450 Commack Road Deer Park, NY 1964 Light Industrial 5.10 60,005 100%
99 Layfayette Drive Syosset, NY 1964 Bulk Warehouse 10.90 221,454 99%
65 East Bethpage Road Plainview, NY 1960 Light Industrial 1.40 25,600 99%
171 Milbar Boulevard Farmingdale, NY 1961 Reg. Warehouse 2.30 62,600 99%
95 Horseblock Road Yaphank, NY 1971 Bulk Warehouse 20.00 180,906 85%
151-171 East 2nd Street Huntington, NY 1968 Light Industrial 2.70 42,725 100%
171-175 East 2nd Street Huntington, NY 1969 Light Industrial 2.60 42,374 100%
35 Bloomingdale Road Hicksville, NY 1962 Light Industrial 1.40 32,850 100%
15-39 Tec Street Hicksville, NY 1965 Light Industrial 1.10 17,350 87%
100 Tec Street Hicksville, NY 1965 Light Industrial 1.20 25,000 100%
51-89 Tec Street Hicksville, NY 1965 Light Industrial 1.20 21,850 100%
502 Old Country Road Hicksville, NY 1965 Light Industrial 0.50 10,000 100%
80-98 Tec Street Hicksville, NY 1965 Light Industrial 0.75 13,050 95%
201-233 Park Avenue Hicksville, NY 1962 Light Industrial 1.70 36,892 100%
6851 Jericho Turnpike Syosset, NY 1969 R&D/Flex 11.80 134,991 41%
One Fairchild Court Plainview, NY 1959 R&D/Flex 5.75 57,420 93%
79 Express Street Plainview, NY 1972 Light Industrial 4.70 72,146 84%
92 Central Avenue Farmingdale, NY 1961 Light Industrial 4.70 72,000 94%
160 Engineer Drive Hicksville, NY 1966 Light Industrial 1.90 29,500 100%
260 Engineers Drive Hicksville, NY 1966 Light Industrial 2.80 52,900 95%
87-119 Engineers Drive (k) Hicksville, NY 1966 Light Industrial 1.70 36,800 74%
950-970 South Broadway Hicksville, NY 1966 Light Industrial 2.65 55,146 97%
290 Duffy Avenue Hicksville, NY (c) 1974 Light Industrial 3.00 55,050 100%
185 Price Parkway Farmingdale, NY 1969 Bulk Warehouse 6.40 100,000 100%
62 Alpha Plaza Hicksville, NY 1968 Light Industrial 2.64 34,600 100%
</TABLE>
21
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
LONG ISLANDS (CONT.)
- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
90 Alpha Plaza Hicksville, NY 1969 Light Industrial 1.36 34,035 91%
325 Duffy Avenue Hicksville, NY 1970 Light Industrial 6.64 100,000 100%
600 West John Street Hicksville, NY 1955 Light Industrial 9.00 215,000 82%
939 Motor Parkway Hauppauge, NY 1977 Light Industrial 1.50 21,900 100%
2070 5th Avenue Ronkonkoma, NY 1975 Light Industrial 3.66 50,296 100%
200 13th Avenue Ronkonkoma, NY 1979 Light Industrial 4.70 72,089 95%
100 13th Avenue Ronkonkoma, NY 1979 Manufacturing 4.14 62,898 100%
1 Comac Loop Ronkonkoma, NY 1980 Light Industrial 5.18 63,765 94%
80 13th Avenue Ronkonkoma, NY 1983 Light Industrial 6.22 87,102 100%
90 13th Avenue Ronkonkoma, NY 1982 Light Industrial 6.95 105,519 100%
33 Comac Loop Ronkonkoma, NY 1983 Light Industrial 5.37 71,904 90%
101-125 Comac Street Ronkonkoma, NY 1985 Light Industrial 8.42 99,467 90%
999 Stewart Avenue Garden City, NY 1955 Light Industrial 1.70 42,700 100%
360 Smith Street Farmingdale, NY 1965 Light Industrial 3.00 60,000 100%
700 Dibblee Drive Garden City, NY 1965 Bulk Warehouse 12.24 325,000 100%
49 Mall Drive Hauppauge, NY 1986 Light Industrial 10.50 99,600 100%
275 Marcus Boulevard Hauppage, NY 1985 Light Industrial 5.00 52,329 54%
---------- ------
SUBTOTAL OR AVERAGE 4,225,516 93%
---------- ------
MILWAUKEE
- ----------
N25 W23050 Paul Road Pewaukee, WI 1989 R&D/Flex 4.50 37,765 100%
N25 W23255 Paul Road Pewaukee, WI 1987 Light Industrial 4.80 55,940 100%
N27 W23293 Roundy Drive Pewaukee, WI 1989 Manufacturing 3.64 39,468 100%
6523 North Sidney Place Glendale, WI 1978 Light Industrial 4.00 43,440 92%
8800 West Bradley Milwaukee, WI 1982 Light Industrial 8.00 78,000 100%
1435 North 113th Street Wauwatosa, WI 1993 Light Industrial 4.69 51,950 100%
11217-43 West Becher Street West Allis, WI 1979 Light Industrial 1.74 29,099 100%
2152 South 114th Street West Allis, WI 1980 Light Industrial 3.30 63,680 100%
4560 North 124th Street Wauwatosa, WI 1976 Light Industrial 1.31 25,150 100%
12221 West Feerick Street Wauwatosa, WI 1971 Reg. Warehouse 1.90 39,800 100%
---------- ------
SUBTOTAL OR AVERAGE 464,292 99%
---------- ------
MINNEAPOLIS/ST. PAUL
- --------------------
6507-6545 Cecilia Circle Bloomington, MN 1980 Manufacturing 9.65 74,118 95%
7830-7848 12th Avenue South Bloomington, MN 1978 Manufacturing 8.11 82,837 100%
1275 Corporate Center Drive Eagan, MN 1990 Light Industrial 1.50 19,675 100%
1279 Corporate Center Drive Eagan, MN 1990 Light Industrial 1.50 19,792 100%
2815 Eagandale Boulevard Eagan, MN 1990 Light Industrial 2.20 29,106 100%
6201 West 111th Street Bloomington, MN 1987 Bulk Warehouse 37.00 424,866 100%
6403-6545 Cecilia Drive Bloomington, MN 1980 Light Industrial 9.65 87,322 100%
6925-6943 Washington Avenue Edina, MN 1972 Manufacturing 2.75 37,169 60%
6955-6973 Washington Avenue Edina, MN 1972 Manufacturing 2.25 31,189 71%
7251-7267 Washington Avenue Edina, MN 1972 Light Industrial 1.82 26,250 75%
7301-7325 Washington Avenue Edina, MN 1972 Light Industrial 1.92 27,287 100%
7101 Winnetka Avenue North Brooklyn Park, MN 1990 Bulk Warehouse 14.18 252,978 100%
7600 Golden Triangle Drive Eden Prairie, MN 1989 R&D/Flex 6.79 73,855 100%
7850-7890 12th Avenue South Bloomington, MN 1978 Manufacturing 8.11 67,271 97%
7900 Main Street Northeast Fridley, MN 1973 Manufacturing 6.09 97,020 100%
7901 Beech Street Northeast Fridley, MN 1975 Manufacturing 6.07 97,020 100%
9901 West 74th Street Eden Prairie, MN 19 83/88 Reg. Warehouse 8.86 150,000 100%
10175-10205 Crosstown Circle Eden Prairie, MN 1980 Light Industrial 2.30 30,335 97%
11201 Hampshire Avenue South Bloomington, MN 1986 Manufacturing 5.90 60,480 100%
12220-12222 Nicollet Avenue Burnsville, MN 19 89/90 Light Industrial 1.80 17,116 100%
12250-12268 Nicollet Avenue Burnsville, MN 19 89/90 Light Industrial 4.30 42,465 100%
12224-12226 Nicollet Avenue Burnsville, MN 19 89/90 R&D/Flex 2.40 23,607 78%
305 2nd Street Northwest New Brighton, MN 1991 Light Industrial 5.43 62,293 99%
953 Westgate Drive St. Paul, MN 1991 Light Industrial 3.17 51,906 100%
980 Lone Oak Road Eagan, MN 1992 Reg. Warehouse 11.40 154,950 100%
990 Lone Oak Road Eagan, MN 1989 Reg. Warehouse 11.41 153,607 90%
1030 Lone Oak Road Eagan, MN 1988 Light Industrial 6.30 83,076 100%
1060 Lone Oak Road Eagan, MN 1988 Light Industrial 6.50 82,728 100%
5400 Nathan Lane Plymouth, MN 1990 Light Industrial 5.70 72,089 100%
6464 Sycamore Court Maplegrove, MN 1990 Manufacturing 6.40 79,702 100%
6701 Parkway Circle Brooklyn Center, MN 1987 R&D/Flex 4.44 75,000 100%
6601 Shingle Creek Brooklyn Center, MN 1985 R&D/Flex 4.59 68,899 99%
10120 West 76th Street Eden Prairie, MN 1987 Light Industrial 4.52 57,798 100%
7615 Golden Triangle Eden Prairie, MN 1987 Light Industrial 4.61 52,820 100%
7625 Golden Triangle Drive Eden Prairie, MN 1987 Light Industrial 4.61 73,125 100%
2605 Fernbrook Lane North Plymouth, MN 1987 R&D/Flex 6.37 80,769 100%
12155 Nicollet Avenue Burnsville, MN 1995 Reg. Warehouse 5.80 48,000 100%
</TABLE>
22
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
MINNEAPOLIS/ST. PAUL (CONT.)
- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
73rd Avenue North Brooklyn Park, MN 1995 R&D/Flex 4.46 59,782 100%
1905 West Country Road C Roseville, MN 1993 R&D/Flex 4.60 47,735 100%
2720 Arthur Street Roseville, MN 1995 R&D/Flex 6.06 74,337 100%
10205 51st Avenue North Plymouth, MN 1990 Reg. Warehouse 2.00 30,476 100%
4100 Peavey Road Chaska, MN 1988 Manufacturing 8.27 78,029 64%
11300 Hampshire Avenue South Bloomington, MN 1983 Bulk Warehouse 9.94 125,950 86%
375 Rivertown Drive Woodbury, MN 1996 Bulk Warehouse 11.33 172,800 100%
5205 Highway 169 Plymouth, MN 1960 Light Industrial 7.92 97,770 95%
6451-6595 Citywest Parkway Eden Prairie, MN 1984 R&D/Flex 6.98 83,189 66%
7100-7190 Shady Oak Road (1) Eden Prairie, MN 1982 Light Industrial 14.44 187,777 100%
7500-7546 Washington Square Eden Prairie, MN 1975 Light Industrial 5.40 46,200 85%
7550-7588 Washington Square Eden Prairie, MN 1975 Light Industrial 2.70 29,739 100%
5240-5300 Valley Industrial Blvd Shakopee, MN 1973 Light Industrial 9.06 80,000 100%
1565 First Avenue NW New Brighton, MN 1978 Manufacturing 8.87 112,083 100%
7125 Northland Terrace Brooklyn Park, MN 1996 R&D/Flex 5.89 79,675 91%
6900 Shady Oak Road Eden Prairie, MN 1980 R&D/Flex 4.60 49,190 100%
6477-6525 City West Parkway Eden Prairie, MN 1984 R&D/Flex 7.00 89,456 100%
500-530 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 4.47 85,442 100%
770-786 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 3.16 56,388 90%
800 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 4.10 100,250 100%
2530-2570 Kasota Avenue St. Paul, MN 1976 Manufacturing 4.56 75,933 63%
---------- -------
SUBTOTAL OR AVERAGE 4,730,721 96%
---------- -------
NASHVILLE
- ---------
417 Harding Industrial Drive Nashville, TN 1972 Bulk Warehouse 13.70 207,440 100%
520 Harding Drive (k) Nashville, TN 1975 Bulk Warehouse 16.64 392,128 100%
3099 Barry Drive Portland, TN 1995 Manufacturing 6.20 109,058 100%
3150 Barry Drive Portland, TN 1993 Bulk Warehouse 26.32 268,253 100%
5599 Highway 31 West Portland, TN 1995 Bulk Warehouse 20.00 161,500 100%
1650 Elm Hill Pike Nashville, TN 1984 Light Industrial 3.46 41,228 92%
1821 Air Lane Drive Nashville, TN 1984 Light Industrial 2.54 25,300 100%
1102 Appleton Drive Nashville, TN 1984 Light Industrial 1.73 28,022 100%
1920 Air Lane Drive Nashville, TN 1985 Light Industrial 3.19 49,912 100%
1931 Air Lane Drive Nashville, TN 1984 Light Industrial 10.11 87,549 100%
470 Metroplex Drive (k) Nashville, TN 1986 Light Industrial 8.11 102,052 80%
1150 Antiock Pike Nashville, TN 1987 Bulk Warehouse 9.83 146,055 100%
---------- ------
SUBTOTAL OR AVERAGE 1,618,497 99%
---------- ------
NORTHERN NEW JERSEY
- -------------------
116 Lehigh Drive Fairfield, NJ 1986 Bulk Warehouse 5.00 106,184 100%
60 Ethel Road West Piscataway, NJ 1982 Light Industrial 3.93 42,802 100%
70 Ethel Road West Piscataway, NJ 1979 Light Industrial 3.78 61,500 100%
105 Neptune Boulevard Neptune, NJ 1989 Light Industrial 10.00 20,440 87%
140 Hanover Avenue Hanover, NJ 1964/1988 R&D/Flex 2.95 24,905 100%
601-629 Montrose Avenue South Plainfield, NJ 1974 Light Industrial 5.83 75,000 87%
3 Marlen Hamilton, NJ 1981 Light Industrial 1.11 13,174 54%
5 Marlen Hamilton, NJ 1981 Light Industrial 1.56 21,000 100%
7 Marlen Hamilton, NJ 1982 Light Industrial 2.05 28,400 67%
8 Marlen Hamilton, NJ 1982 Reg. Warehouse 4.36 60,001 100%
15 Marlen Hamilton, NJ 1982 Light Industrial 1.19 13,562 100%
17 Marlen Hamilton, NJ 1981 Light Industrial 1.32 20,030 75%
1 South Gold Drive Hamilton, NJ 1973 Light Industrial 1.50 20,009 95%
5 South Gold Drive Hamilton, NJ 1974 Light Industrial 1.97 24,000 100%
6 South Gold Drive Hamilton, NJ 1975 Light Industrial 1.00 13,580 100%
7 South Gold Drive Hamilton, NJ 1976 Light Industrial 1.00 10,218 50%
8 South Gold Drive Hamilton, NJ 1977 Light Industrial 1.14 16,907 100%
9 South Gold Drive Hamilton, NJ 1980 Light Industrial 1.00 13,583 100%
11 South Gold Drive Hamilton, NJ 1979 Light Industrial 1.97 33,114 100%
12 South Gold Drive Hamilton, NJ 1980 Light Industrial 1.29 20,240 100%
9 Princess Road Lawrenceville, NJ 1985 R&D/Flex 2.36 24,375 92%
11 Princess Road Lawrenceville, NJ 1985 R&D/Flex 5.33 55,000 100%
15 Princess Road Lawrenceville, NJ 1986 R&D/Flex 2.00 20,625 100%
17 Princess Road Lawrenceville, NJ 1986 R&D/Flex 1.82 18,750 100%
220 Hanover Avenue Hanover, NJ 1987 Bulk Warehouse 29.27 158,242 0%
244 Shefield Street Mountainside, NJ 1965/1986 Light Industrial 2.20 23,000 100%
30 Troy Road Hanover, NJ 1972 Light Industrial 1.31 17,345 100%
15 Leslie Court Hanover, NJ 1971 Light Industrial 3.08 18,000 100%
20 Leslie Court Hanover, NJ 1974 Light Industrial 1.38 17,997 100%
25 Leslie Court Hanover, NJ 1975 Light Industrial 1.30 70,800 100%
130 Algonquin Parkway Hanover, NJ 1973 Light Industrial 5.50 29,008 100%
</TABLE>
23
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
NEW JERSEY (CONT.)
- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
150 Algonquin Parkway Hanover, NJ 1973 Light Industrial 2.47 17,531 100%
55 Locust Avenue Roseland, NJ 1980 Reg. Warehouse 13.63 79,750 100%
31 West Forest Street (k) Englewood, NJ 1978 Light Industrial 6.00 110,000 100%
25 World's Fair Drive Franklin, NJ 1986 R&D/Flex 1.81 20,000 100%
14 World's Fair Drive Franklin, NJ 1980 R&D/Flex 4.53 60,000 100%
16 World's Fair Drive Franklin, NJ 1981 Light Industrial 3.62 43,400 100%
18 World's Fair Drive Franklin, NJ 1982 R&D/Flex 1.06 12,809 100%
23 World's Fair Drive Franklin, NJ 1982 Light Industrial 1.20 15,540 100%
12 World's Fair Drive Franklin, NJ 1981 Light Industrial 3.85 65,000 96%
1 World's Fair Drive Franklin, NJ 1983 R&D/Flex 3.85 53,372 99%
2 World's Faire Drive Franklin, NJ 1982 R&D/Flex 2.06 59,310 77%
49 Napoleon Court Franklin, NJ 1982 Light Industrial 2.06 32,487 0%
50 Napoleon Court Franklin, NJ 1982 Light Industrial 1.52 20,158 100%
22 World's Fair Drive Franklin, NJ 1983 Light Industrial 3.52 50,000 100%
26 World's Fair Drive Franklin, NJ 1984 Light Industrial 3.41 47,000 100%
24 World's Fair Drive Franklin, NJ 1984 Light Industrial 3.45 47,000 79%
12 Wright Way Oakland, NJ 1981 Reg. Warehouse 6.52 52,402 100%
---------- ------
SUBTOTAL OR AVERAGE 1,877,550 86%
---------- ------
NEW ORLEANS
- -----------
520-524 Elmwood Park Blvd. (k)Jefferson, LA 1986 Light Industrial 5.32 102,209 91%
125 Mallard St. St. Rose, LA (e) 1984 R&D/Flex 1.38 23,436 100%
107 Mallard St. Rose, LA (e) 1985 Light Industrial 1.48 23,436 94%
125 James Drive West St. Rose, LA (e) 1990 Light Industrial 3.30 38,692 100%
161 James Drive West St. Rose, LA 1986 Light Industrial 2.80 47,474 50%
150 James Drive East St. Rose, LA 1986 Light Industrial 3.60 49,275 100%
115 James Drive West St. Rose, LA (e) 1986 Light Industrial 2.07 21,408 100%
100 James Drive St. Rose, LA (e) 1980 R&D/Flex 6.66 43,055 100%
143 Mallard St. St. Rose, LA (e) 1982 Light Industrial 1.48 23,436 99%
160 James Drive East St. Rose, LA (e) 1981 R&D/Flex 3.66 25,772 100%
190 James Drive East St. Rose, LA (e) 1987 Light Industrial 4.47 36,357 100%
120 Mallard St. St. Rose, LA (e) 1981 R&D/Flex 3.41 53,520 100%
110 James Drive West St. Rose, LA (e) 1983 R&D/Flex 1.57 24,018 77%
150 Canvasback Drive St. Rose, LA 1986 Reg. Warehouse 2.80 40,500 100%
---------- ------
SUBTOTAL OR AVERAGE 552,588 93%
---------- ------
PHOENIX
- -------
7340 South Kyrene Road Tempe, AZ 1996 Reg. Warehouse 7.20 63,720 100%
7350 South Kyrene Road Tempe, AZ 1996 Reg. Warehouse 5.36 99,384 59%
7360 South Kyrene Road Tempe, AZ 1996 R&D/Flex 5.42 99,418 100%
7343 South Hardy Drive Tempe, AZ 1997 Bulk Warehouse 7.84 174,854 100%
7333 South Hardy Drive Tempe, AZ 1997 Reg. Warehouse 7.90 98,052 100%
3906 East Broadway Road Phoenix, AZ 1997 Light Industrial 4.10 54,460 67%
3908 East Broadway Road Phoenix, AZ 1997 Light Industrial 2.52 33,002 49%
---------- ------
SUBTOTAL OR AVERAGE 622,890 88%
---------- ------
PORTLAND
- --------
5687 International Way Milwaukee, OR (i) 1974 Light Industrial 3.71 52,080 100%
5795 SW Jean Road (l) Lake Oswego, OR 1985 Light Industrial 3.02 37,352 100%
12130 NE Ainsworth Circle (k) Portland, OR 1986 R&D/Flex 4.39 53,021 75%
5509 NW 122nd Ave (k) Milwaukee, OR (h) 1995 Light Industrial 2.51 26,850 100%
6105-6113 NE 92nd Avenue (m) Portland, OR 1978 Light Industrial 7.42 132,800 100%
8727 NE Marx Drive (l) Portland, OR 1987 Light Industrial 6.59 111,000 100%
3910 SW 170th Ave Portland, OR 1987 Light Industrial 1.28 20,500 100%
3388 SE 20th St. Portland, OR 1981 Light Industrial 0.25 11,810 100%
5962-5964 NE 87th Ave Portland, OR 1979 Light Industrial 1.28 14,000 100%
116 SE Yamhill Portland, OR 1974 Light Industrial 0.00 7,500 100%
9106 NE Marx Drive Portland, OR 1969 Light Industrial 0.53 7,500 100%
11620 NE Ainsworth Circle Portland, OR 1992 Light Industrial 1.55 10,000 100%
11824 NE Ainsworth Circle Portland, OR 1992 Light Industrial 2.13 20,812 100%
12124 NE Ainsworth Circle Portland, OR 1984 Light Industrial 2.52 29,040 100%
1735 SE Highway 20 Bend, OR 1995 Light Industrial 1.43 18,000 100%
2715 SE Raymond Portland, OR 1971 Light Industrial 1.28 35,000 100%
1645 NE 72nd Ave Portland, OR 1972 Light Industrial 0.73 21,600 100%
1630 SE 8th Ave. Portland, OR 1968 Light Industrial 0.92 5,000 100%
9044 NE Marx Drive Portland, OR 1986 Light Industrial 0.35 19,500 100%
2443 SE 4th Ave. Portland, OR 1964 Light Industrial 0.76 27,128 100%
711 SE Stark St. Portland, OR 1972 Light Industrial 0.23 8,000 100%
11632 NE Ainsworth Circle Portland, OR 1990 Light Industrial 9.63 124,610 98%
NE 138th & Airport Way Portland, OR 1990 Light Industrial 12.91 49,624 100%
14699 NE Airport Way Portland, OR 1998 Light Industrial 4.75 20,000 100%
---------- ------
SUBTOTAL OR AVERAGE 862,727 98%
---------- ------
SALT LAKE CITY
- --------------
2255 South 300 West (o) Salt Lake City, UT 1980 Light Industrial 4.56 102,942 93%
512 Lawndale Drive (p) Salt Lake City, UT 1981 Light Industrial 35.00 395,291 86%
1270 West 2320 South West Valley, UT 1986 R&D/Flex 1.49 13,025 52%
</TABLE>
24
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
SALT LAKE CITY (CONT.)
- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1275 West 2240 South West Valley, UT 1986 R&D/Flex 2.06 38,227 100%
1288 West 2240 South West Valley, UT 1986 R&D/Flex 0.97 13,300 84%
2235 South 1300 West West Valley, UT 1986 Light Industrial 1.22 19,000 100%
1293 West 2200 South West Valley, UT 1986 R&D/Flex 0.86 13,300 0%
1279 West 2200 South West Valley, UT 1986 R&D/Flex 0.91 13,300 100%
1272 West 2240 South West Valley, UT 1986 Light Industrial 3.07 34,870 100%
1149 West 2240 South West Valley, UT 1986 Light Industrial 1.71 21,250 100%
1142 West 2320 South West Valley, UT 1987 Light Industrial 1.52 17,500 55%
---------- -------
SUBTOTAL OR AVERAGE 682,005 87%
---------- -------
SOUTHERN NEW JERSEY
- -------------------
2-5 North Olnev Ave. Cherry Hill, NJ 1963 Light Industrial 2.10 58,139 100%
2 Springdale Road Cherry Hill, NJ 1968 Light Industrial 1.44 21,008 100%
4 Springdale Road (k) Cherry Hill, NJ 1963 Light Industrial 3.02 58,132 0%
6 Springdale Road Cherry Hill, NJ 1964 Light Industrial 1.44 23,037 100%
8 Springdale Road Cherry Hill, NJ 1966 Light Industrial 3.02 45,054 100%
12 Springdale Road Cherry Hill, NJ 1965 Light Industrial 3.40 48,385 100%
1 Esterbrook Lane Cherry Hill, NJ 1965 Light Industrial 1.71 8,610 100%
16 Springdale Road Cherry Hill, NJ 1967 Light Industrial 5.30 48,922 91%
5 Esterbrook Lane Cherry Hill, NJ 1966 Reg. Warehouse 5.45 39,167 100%
2 Pin Oak Lane Cherry Hill, NJ 1968 Light Industrial 4.45 51,230 100%
6 Esterbrook Lane Cherry Hill, NJ 1966 Light Industrial 3.96 32,914 100%
3 Computer Drive Cherry Hill, NJ 1966 Bulk Warehouse 11.40 181,000 100%
19 Perina Blvd. Cherry Hill, NJ 1966 Light Industrial 4.00 30,000 100%
28 Springdale Road Cherry Hill, NJ 1967 Light Industrial 2.93 38,949 100%
3 Esterbrook Lane Cherry Hill, NJ 1968 Light Industrial 2.15 32,844 100%
4 Esterbrook Lane Cherry Hill, NJ 1969 Light Industrial 3.42 39,266 100%
26 Springdale Road Cherry Hill, NJ 1968 Light Industrial 3.25 31,652 100%
1 Keystone Ave. Cherry Hill, NJ 1969 Light Industrial 4.15 60,983 100%
1919 Springdale Road Cherry Hill, NJ 1970 Light Industrial 5.13 49,300 100%
21 Olnev Ave. Cherry Hill, NJ 1969 Manufacturing 1.75 22,738 100%
19 Olnev Ave. Cherry Hill, NJ 1971 Light Industrial 4.36 53,962 100%
2 Keystone Ave. Cherry Hill, NJ Light Industrial 3.47 50,922 100%
18 Olnev Ave. Cherry Hill, NJ 1974 Light Industrial 8.85 62,542 100%
22 Springdale Road Cherry Hill, NJ 1977 Light Industrial 6.24 88,872 100%
1998 Springdale Road Cherry Hill, NJ 1971 Light Industrial 0.95 14,000 100%
55 Carnegie Drive Cherry Hill, NJ 1988 Reg. Warehouse 15.20 90,804 100%
57 Carnegie Drive Cherry Hill, NJ 1987 Bulk Warehouse 13.70 140,406 100%
---------- -------
SUBTOTAL OR AVERAGE 1,422,838 96%
---------- -------
ST. LOUIS
- ---------
2121 Chapin Industrial Drive Vinita Park, MO 1969/87 Bulk Warehouse 23.40 280,905 100%
1200 Andes Boulevard Olivette, MO 1967 Light Industrial 2.77 66,600 100%
1248 Andes Boulevard Olivette, MO 1967 Light Industrial 3.15 60,708 100%
1208-1226 Ambassador Blvd. Olivette, MO 1966 Light Industrial 2.11 49,600 100%
1503-1525 Fairview Industrial Olivette, MO 1967 Light Industrial 2.18 46,481 100%
2462-2470 Schuetz Road St. Louis, MO 1965 Light Industrial 2.28 43,868 100%
10431-10449 Midwest Industrial Olivette, MO 1967 Light Industrial 2.40 55,125 97%
10751 Midwest Industrial Blvd. Olivette, MO 1965 Light Industrial 1.70 44,100 100%
11652-11666 Fairgrove Industrial St. Louis, MO 1966 Light Industrial 1.92 31,484 100%
11674-11688 Fairgrove Industrial St. Louis, MO 1967 Light Industrial 1.53 31,500 100%
2337 Centerline Drive Maryland Heights, MO 1967 Light Industrial 3.46 75,600 100%
6951 North Hanley Road (k) Hazelwood, MO 1965 Bulk Warehouse 9.50 129,453 32%
4560 Anglum Road Hazelwood, MO 1970 Light Industrial 2.60 35,114 100%
2760 South 1st Street St. Louis, MO 1997 Bulk Warehouse 11.00 178,800 100%
---------- -------
SUBTOTAL OR AVERAGE 1,129,338 92%
---------- -------
TAMPA
- ------
6614 Adamo Drive Tampa, FL 1967 Reg. Warehouse 2.78 41,377 100%
202 Kelsey Tampa, FL 1989 Bulk Warehouse 6.30 112,000 100%
6202 Benjamin Road Tampa, FL 1981 R&D/Flex 2.04 29,845 100%
6204 Benjamin Road Tampa, FL 1982 Light Industrial 4.16 60,975 79%
6206 Benjamin Road Tampa, FL 1983 Light Industrial 3.94 57,708 100%
6302 Benjamin Road Tampa, FL 1983 R&D/Flex 2.03 29,747 100%
6304 Benjamin Road Tampa, FL 1984 R&D/Flex 2.04 29,845 100%
6306 Benjamin Road Tampa, FL 1984 Light Industrial 2.58 37,861 79%
6308 Benjamin Road Tampa, FL 1984 Light Industrial 3.22 47,256 100%
5313 Johns Road Tampa, FL 1991 R&D/Flex 1.36 25,690 100%
5602 Thompson Center Court Tampa, FL 1972 R&D/Flex 1.39 14,914 100%
5411 Johns Road Tampa, FL 1997 Light Industrial 1.98 30,204 100%
5525 Johns Road Tampa, FL 1993 R&D/Flex 1.46 24,139 100%
5607 Johns Road Tampa, FL 1991 R&D/Flex 1.34 13,500 100%
5709 Johns Road Tampa, FL 1990 Light Industrial 1.80 25,480 100%
5711 Johns Road Tampa, FL 1990 Light Industrial 1.80 25,455 87%
4410 East Adamo Drive Tampa, FL 1990 Bulk Warehouse 5.60 101,744 100%
4420 East Adamo Drive Tampa, FL 1990 Reg. Warehouse 1.40 26,650 100%
4430 East Adamo Drive Tampa, FL 1987 Reg. Warehouse 3.75 64,551 79%
</TABLE>
25
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<TABLE>
<CAPTION>
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT
BUILDING ADDRESS CITY/STATE ENCUMBRANCES RENOVATED BUILDING TYPE (ACRES) GLA 12/31/98
---------------- ---------- ------------ ---------- -------------- ----------- --- ------------
TAMPA (CONT.)
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
4440 East Adamo Drive Tampa, FL 1988 Reg. Warehouse 3.75 64,800 100%
4450 East Adamo Drive Tampa, FL 1969 Reg. Warehouse 4.00 46,462 48%
5453 West Waters Avenue Tampa, FL 1987 R&D/Flex 0.66 7,200 100%
5455 West Waters Avenue Tampa, FL 1987 R&D/Flex 2.97 32,424 100%
5553 West Waters Avenue Tampa, FL 1987 Light Industrial 2.97 32,424 100%
5501 West Waters Avenue Tampa, FL 1990 R&D/Flex 1.53 15,870 100%
5503 West Waters Avenue Tampa, FL 1990 R&D/Flex 0.68 7,060 100%
5555 West Waters Avenue Tampa, FL 1990 R&D/Flex 2.31 23,947 100%
5557 West Waters Avenue Tampa, FL 1990 R&D/Flex 0.57 5,860 100%
5903 Johns Road Tampa, FL 1987 Light Industrial 1.20 11,600 100%
4107 North Himes Avenue Tampa, FL 1990 R&D/Flex 1.86 26,630 100%
5461 W. Waters Ave Tampa, FL 1998 Light Industrial 1.84 21,778 100%
---------- -------
SUBTOTAL OR AVERAGE 1,094,996 94%
---------- -------
OTHER
- -----
2800 Airport Road (n) Denton, TX 1968 Manufacturing 29.91 222,403 100%
3501 Maple Street Abilene, TX 1980 Manufacturing 34.42 123,700 100%
4200 West Harry Street (l) Wichita, KS 1972 Bulk Warehouse 21.45 177,655 100%
Industrial Park No. 2 West Lebanon, NH 1968 Bulk Warehouse 10.27 156,200 100%
931 Discovery Road Green Bay, WI 1997 Light Industrial 4.22 25,254 100%
9580 Interport Drive Shreveport, LA 1989 Reg. Warehouse 3.00 50,000 0%
2675 Valley View Drive Shreveport, LA 1997 Bulk Warehouse 12.00 250,000 100%
300 10th Street NW Clarion, IA 1997 Bulk Warehouse 8.63 126,900 100%
---------- -------
SUBTOTAL OR AVERAGE 1,132,112 96%
---------- -------
TOTAL 57,313,649 95%
========== =======
</TABLE>
(a) These properties collateralize a $35.2 million mortgage loan which
matures on April 1, 2003.
(b) These properties collateralize a $8.7 million mortgage loan which matures
on January 1, 2013.
(c) This property collateralizes a $.7 million mortgage loan which maturity
is based upon a contingent event related to the environmental status of
the property.
(d) This property collateralizes a $3.9 million mortgage loan which matures
on August 1, 2008.
(e) These properties collateralize a $7.8 million mortgage loan which matures
on April 1, 2006.
(f) These properties collateralize a $3.5 million mortgage loan which matures
on June 1, 2003.
(g) This property collateralizes the Acquisition Mortgage Loan IV (hereinafter
defined).
(h) These properties collateralize the Acquisition Mortgage Loan VI
(hereinafter defined).
(i) These properties collateralize the Acquisition Mortgage Loan VII
(hereinafter defined).
(j) These properties collateralize the Acquisition Mortgage Loan VIII
(hereinafter defined).
(k) Comprised of two properties.
(l) Comprised of three properties.
(m) Comprised of four properties.
(n) Comprised of five properties
(o) Comprised of seven properties.
(p) Comprised of 29 properties.
26
<PAGE> 28
TENANT AND LEASE INFORMATION
The Consolidated Operating Partnership has a diverse base of
approximately 2,900 tenants engaged in a wide variety of businesses including
manufacturing, retail, wholesale trade, distribution and professional services.
Most leases have an initial term of between three and five years and provide for
periodic rental increases that are either fixed or based on changes in the
Consumer Price Index. Industrial tenants typically have net or semi-net leases
and pay as additional rent their percentage of the property's operating costs,
including the costs of common area maintenance, property taxes and insurance. As
of December 31, 1998, approximately 95% of the GLA of the Consolidated Operating
Partnership's properties was leased, and no single tenant or group of related
tenants accounted for more than 1.2 % of the Consolidated Operating
Partnership's rent revenues, nor did any single tenant or group of related
tenants occupy more than 1.2%, of the Consolidated Operating Partnership's total
GLA as of December 31, 1998.
The following table shows scheduled lease expirations for all leases for
the Consolidated Operating Partnership's properties as of December 31, 1998.
<TABLE>
<CAPTION>
ANNUAL BASE RENT
NUMBER OF PERCENTAGE OF UNDER EXPIRING PERCENTAGE OF TOTAL
YEAR OF LEASES GLA GLA LEASES ANNUAL BASE RENT
EXPIRATION (1) EXPIRING EXPIRING (2) EXPIRING (IN THOUSANDS) EXPIRING (2)
- -------------- ---------- ------------ ------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
1999 852 13,214,501 24.2% $ 63,385 25.4%
2000 637 9,369,638 17.2% 42,393 17.0%
2001 564 9,010,511 16.5% 41,122 16.5%
2002 293 6,205,114 11.4% 28,120 11.3%
2003 323 5,804,106 10.6% 28,828 11.6%
2004 73 2,588,695 4.7% 9,772 3.9%
2005 39 1,601,298 2.9% 8,511 3.4%
2006 34 1,736,278 3.2% 6,867 2.8%
2007 24 1,797,620 3.3% 7,209 2.9%
2008 30 1,231,096 2.3% 6,522 2.6%
Thereafter 18 2,017,689 3.7% 6,582 2.6%
---------- ------------ ------------- ---------------- -------------------
Total 2,887 54,576,546 100.0% $ 249,311 100.0%
========= ============ ============= ================ ===================
</TABLE>
(1) Lease expirations as of December 31, 1998 assuming tenants do not exercise
existing renewal, termination, or purchase options.
(2) Does not include existing vacancies of 2,737,103 aggregate square feet.
The Other Real Estate Partnerships have a diverse base of more than 200
tenants engaged in a wide variety of businesses including manufacturing, retail,
wholesale trade, distribution and professional services. Most leases have an
initial term of between three and five years and provide for periodic rental
increases that are either fixed or based on changes in the Consumer Price Index.
Industrial tenants typically have net or semi-net leases and pay as additional
rent their percentage of the property's operating costs, including the costs of
common area maintenance, property taxes and insurance. As of December 31, 1998,
approximately 94% of the GLA of the Other Real Estate Partnership's properties
was leased, and no single tenant or group of related tenants accounted for more
than 6.5% of the Other Real Estate Partnerships' rent revenues, nor did any
single tenant or group of related tenants occupy more than 4.1%, of the Other
Real Estate Partnerships' total GLA as of December 31, 1998.
27
<PAGE> 29
The following table shows scheduled lease expirations for all leases for
the Other Real Estate Partnerships' properties as of December 31, 1998.
<TABLE>
<CAPTION>
ANNUAL BASE RENT
NUMBER OF PERCENTAGE OF UNDER EXPIRING PERCENTAGE OF TOTAL
YEAR OF LEASES GLA GLA LEASES ANNUAL BASE RENT
EXPIRATION (1) EXPIRING EXPIRING (2) EXPIRING (IN THOUSANDS) EXPIRING (2)
- -------------- ---------- ------------ ------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
1999 53 1,251,321 11.2% $ 4,440 10.1%
2000 56 1,775,010 15.8% 8,168 18.5%
2001 34 2,059,629 18.4% 6,876 15.6%
2002 26 1,115,819 9.9% 4,199 9.5%
2003 39 1,178,903 10.5% 6,070 13.7%
2004 16 1,368,129 12.2% 5,401 12.2%
2005 7 473,627 4.2% 1,808 4.1%
2006 2 146,816 1.3% 591 1.3%
2007 3 296,181 2.6% 810 1.8%
2008 4 1,084,718 9.7% 3,602 8.2%
Thereafter 3 468,000 4.2% 2,208 5.0%
---------- ------------ ------------- ---------------- -------------------
Total 243 11,218,153 100.0% $ 44,172 100.0%
========== ============ ============= ================ ===================
</TABLE>
- --------------
(1) Lease expirations as of December 31, 1998 assuming tenants do not exercise
existing renewal, termination, or purchase options.
(2) Does not include existing vacancies of 721,581 aggregate square feet.
ITEM 3. LEGAL PROCEEDINGS
The Consolidated Operating Partnership is involved in legal proceedings
arising in the ordinary course of business. All such proceedings, taken
together, are not expected to have a material impact on the results of
operations, financial position or liquidity of the Consolidated Operating
Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
28
<PAGE> 30
PART II
ITEM 5. MARKET FOR REGISTRANT'S PARTNERS' CAPITAL AND RELATED PARTNER MATTERS
There is no established public trading market for the general partner
and limited partner units and the Preferred Units. As of March 24, 1999, there
were 270 holders of record of general partner and limited partner units and one
holder of record (the Company) of Preferred Units.
Beginning with the third quarter of 1994, the Operating Partnership has
made consecutive quarterly distributions to its partners with respect to general
partner and limited partner units since the initial public offering of the
Company in June 1994. The Operating Partnership has made consecutive quarterly
distributions to the Company with respect to Preferred Units since the issuance
of each such Preferred Units. The current indicated annual distribution rate
with respect to general partner and limited partner units is $2.40 per unit
($.60 per Unit per quarter). The annual distribution rate with respect to
Preferred Units is $218.75000 per Series B Unit ($54.68750 per Series B Unit per
quarter), $215.624000 per Series C Unit ($53.90600 per Series C Unit per
quarter), $198.75000 per Series D Unit ($49.68750 per Series D Unit per quarter)
and $197.50000 per Series E Unit ($49.375000 per Series E Unit per quarter). The
Operating Partnership's ability to make distributions depends on a number of
factors, including its net cash provided by operating activities, capital
commitments and debt repayment schedules. Holders of general partner and limited
partner units are entitled to receive distributions when, as and if declared by
the Board of Directors of the Company, its general partner, after the priority
distributions required under the Operating Partnership's partnership agreement
have been made with respect to Preferred Units, out of any funds legally
available for that purpose.
The following table sets forth the distributions per Unit paid or
declared by the Operating Partnership during the periods noted:
Calendar Period Distribution
1998:
Fourth Quarter...................................... $.6000
Third Quarter....................................... $.5300
Second Quarter...................................... $.5300
First Quarter....................................... $.5300
1997:
First Quarter....................................... $.5300
Second Quarter...................................... $.5050
Third Quarter...................................... $.5050
Fourth Quarter...................................... $.5050
In 1996, the Operating Partnership issued an aggregate of 1,038,712
Units having an aggregate vale of $23.9 million in exchange for property. In
1997, the Operating Partnership issued an aggregate of 3,634,148 Units having an
aggregate value of $115.2 million in exchange for property. In 1998, the
Operating Partnership issued an aggregate of 1,515,983 Units having an aggregate
value of $49.4 million in exchange for property.
All of the above Units were issued in private placements in reliance on
Section 4 (2) of the Securities Act of 1933, as amended, including Regulation D
promulgated thereunder, to individuals or entities holding real property or
interests therein. No underwriters were used in connection with such issuances.
Subject to lock-up periods and certain adjustments, Units are generally
convertible into common stock, par value $.01, of the Company on a one-for-one
basis.
29
<PAGE> 31
ITEM 6. SELECTED FINANCIAL DATA
The following sets forth selected financial and operating data for the
Consolidated Operating Partnership on a historical basis and the Contributing
Businesses on a historical combined basis. The following data should be read in
conjunctionZ with the financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included elsewhere in this Form 10-K. The historical statements of operations
for the years ended December 31, 1998, 1997, 1996 and 1995 and the six months
ended December 31, 1994 include the results of operations of the Consolidated
Operating Partnership as derived from the Consolidated Operating Partnership's
audited financial statements. The historical balance sheet data and other data
as of December 31, 1998, 1997, 1996, 1995 and 1994 include the balances of the
Consolidated Operating Partnership as derived from the Consolidated Operating
Partnership's audited financial statements. The historical balance sheet data as
of June 30, 1994 and the combined statements of operations for the six months
ended June 30, 1994 has been derived from the historical financial statements of
the Contributing Businesses. In the opinion of management, the selected
financial data includes all adjustments necessary to present fairly the
information set forth therein.
30
<PAGE> 32
<TABLE>
<CAPTION>
===================================================================================================================================
CONTRIBUTING
BUSINESS
THE OPERATING PARTNERSHIP (COMBINED)
------------------------------------------------------------------- -------------
YEAR YEAR YEAR YEAR SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94 6/30/94
----------- ---------- ---------- ---------- ---------- -------------
(IN THOUSANDS, EXCEPT PER UNIT, RATIO AND PROPERTY DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Total Revenues............................. $ 293,386 $ 98,566 $ 37,587 $ 27,442 $ 9,604 $ 22,816
Property Expenses.......................... (85,773) (29,183) (9,935) (7,478) (2,120) (6,036)
General & Administrative Expense........... (12,919) (5,820) (4,014) (3,792) (1,047) (795)
Interest Expense........................... (68,862) (25,099) (4,685) (6,581) (807) (11,773)
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Cost ................ (851) (369) (196) (222) (187) (858)
Depreciation & Other Amortization.......... (54,209) (15,873) (6,310) (5,087) (1,916) (4,744)
Management and Construction
Income (Loss)........................... --- --- --- --- --- (81)
Equity in Income of Other Real
Estate Partnerships..................... 27,583 31,297 20,130 7,841 6,767 ---
Equity in Income of Joint Venture.......... 45 --- --- --- --- ---
Disposition of Interest Rate
Protection Agreements (a)............... (8,475) 4,038 --- --- --- ---
Restructuring Charge (b)................... (6,858) --- --- --- --- ---
Gain on Sales of Properties................ 2,931 728 4,344 --- --- ---
----------- ---------- ------------ --------- ---------- ----------
Income (Loss) Before Extraordinary
Loss and Cumulative Effect of
Change in Accounting Principle.......... 85,998 58,285 36,921 12,123 10,294 (1,471)
Extraordinary Loss (c)..................... --- (4,666) (2,273) --- --- (1,449)
Cumulative Effect of Change in
Accounting Principle (d)................. (719) --- --- --- --- ---
----------- ---------- ------------ --------- ---------- ----------
Net Income (Loss).......................... 85,279 53,619 34,648 12, 123 10,294 (2,920)
==========
Preferred Unit Distributions............... (26,691) (7,936) --- --- ---
----------- ---------- ------------ --------- ----------
Net Income Available to
Unitholders.............................. $ 58,588 $ 45,683 $ 34,648 $ 12,123 $ 10,294
=========== ========== ============ ========= ==========
Net Income Available to Unitholders
Before Extraordinary Loss and
Cumulative Effect of Change in
Accounting Principle Per Unit:
Basic.................................. $ 1.34 $ 1.41 $ 1.38 $ .59 $ .50
=========== ========== ============ ========= ==========
Diluted................................ $ 1.34 $ 1.40 $ 1.38 $ .59 $ .50
=========== ========== ============ ========= ==========
Net Income Available to Unitholders
Per Unit:
Basic.................................. $ 1.33 $ 1.28 $ 1.29 $ .59 $ .50
=========== ========== ============ ========= ==========
Diluted................................ $ 1.32 $ 1.27 $ 1.29 $ .59 $ .50
=========== ========== ============ ========= ==========
Distributions Per Unit..................... $ 2.19 $ 2.045 $ 1.9675 $ 1.905 $ .945
=========== ========== ============ ========= ==========
Weighted Average Number of Units
Outstanding
Basic.................................. 44,100 35,682 26,763 20,419 20,419
=========== ========== ============ ========= ==========
Diluted................................ 44,283 35,987 26,849 20,419 20,419
=========== ========== ============ ========= ==========
BALANCE SHEET DATA (END OF PERIOD):
Net Investment in Real Estate............... $ 1,988,030 $1,178,741 $ 345,648 $ 91,540 $ 159,056 $ 556,902
Investment in Other Real Estate
Partnerships............................ 368,364 643,621 258,411 241,918 208,274 ---
Total Assets............................... 2,470,661 1,870,183 622,122 356,060 375,220 616,767
Mortgage Loans, Acquisition
Facilities Payable, Senior
Unsecured Debt, Construction
Loans and Promissory Notes
Payable................................. 1,149,460 839,592 59,897 53,108 48,700 305,000
Total Liabilities.......................... 1,261,102 904,006 86,890 69,291 61,676 323,703
Partners' Capital.......................... 1,209,559 966,177 535,232 286,769 313,544 269,326
OTHER DATA:
Cash Flows From Operating
Activities................................ $ 120,319 $ 30,760 $ 18,871 $ 4,182 $ (10,299) $ 4,911
Cash Flows From Investing Activities....... (510,812) (1,052,705) (202,673) (40,906) (61,352) (374,757)
Cash Flows From Financing
Activities................................ 399,444 1,022,645 181,604 43,182 66,232 374,152
Ratio of Earnings to Fixed
Charges and Preferred Unit
Distributions (e)......................... 1.68x 2.29x 6.96x 2.68x 1.65x --- (f)
Total Properties (g)....................... 885 522 137 30 50 226
Total GLA in sq. ft (g).................... 57,313,649 34,455,753 12,650,986 3,488,921 4,857,281 17,393,813
Occupancy % (g)............................ 95% 94% 97% 97% 97% 97%
===================================================================================================================================
</TABLE>
31
<PAGE> 33
(a) On July 1, 1995, the Consolidated Operating Partnership entered into
interest rate swap agreements (the "1995 Interest Rate Protection
Agreements") with a notional value of $300.0 million, which, together with
the interest rate protection agreements the Financing Partnership owned,
effectively fixed the annual interest rate on the Financing Partnership's
$300.0 million mortgage loan at 6.97% for six years through June 30, 2001.
On May 16, 1997, the Consolidated Operating Partnership, through the
Operating Partnership, sold the 1995 Interest Rate Protection Agreements
resulting in a gain of approximately $4.0 million. The $8.5 million loss
on disposition of interest rate protection agreements for the year ended
December 31, 1998 represents the Consolidated Operating Partnership's,
through the Operating Partnership, settlement of its remaining interest
rate protection agreement which was scheduled to expire on January 4,
1999. This agreement was entered into in December 1997 in anticipation of
1998 senior unsecured debt offerings. Due to the changing market
conditions and the Consolidated Operating Partnership's expectation that
it would not issue debt securities associated with the interest rate
protection agreement, the Consolidated Operating Partnership, through the
Operating Partnership, settled its position in the interest rate
protection agreement.
(b) Represents a restructuring charge relating to severance costs, of which
approximately $1.2 million is non-cash relating to immediate vesting of
restricted stock.
(c) Upon consummation of the Initial Offering in June 1994, certain
Contributing Businesses' loans were repaid and the related unamortized
deferred financing fees totaling $1.5 million were written off. In 1996,
the Consolidated Operating Partnership, through Operating Partnership,
terminated certain revolving credit facilities. The Consolidated Operating
Partnership recorded an extraordinary loss of $2.3 million which is
comprised of the write-off of unamortized deferred financing fees, legal
costs and other expenses. In 1997, the Consolidated Operating Partnership,
through Operating Partnership, terminated an unsecured loan and a
revolving credit facility. The Consolidated Operating Partnership recorded
an extraordinary loss of $4.7 million which is comprised of the write-off
of unamortized deferred financing fees, legal costs and other expenses.
(d) In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP
98-5"). SOP 98-5 requires that the net unamortized balance of all start-up
costs and organizational costs be written off as a cumulative effect of a
change in accounting principle and all future start-up costs and
organizational costs be expensed. Consistent with SOP 98-5, in the second
quarter of 1998, the Consolidated Operating Partnership has reported a
cumulative effect of a change in accounting principle in the amount of
approximately $.7 million to reflect the write-off of the unamortized
balance of organizational costs on the Consolidated Operating
Partnership's balance sheet.
(e) For purposes of computing the ratios of earnings to fixed charges and
preferred unit distributions, earnings have been calculated by adding
fixed charges (excluding capitalized interest) to income (loss) before
extraordinary loss, cumulative effect of change in accounting principle,
gain on sales of properties, restructuring charge and disposition of
interest rate protection agreement(s). Fixed charges consist of interest
costs, whether expensed or capitalized, and amortization of interest rate
protection agreement(s) and deferred financing costs.
(f) Earnings were inadequate to cover fixed charges by approximately $1.4
million for the six months ended June 30, 1994.
(g) As of end of period and excludes properties under development.
32
<PAGE> 34
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with "Selected
Financial and Operating Data" and the Consolidated Financial Statements and
Notes thereto appearing elsewhere in this Form 10-K.
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 84.0% ownership interest at December 31, 1998. The Company also owns
a preferred general partnership interest in the Operating Partnership
("Preferred Units") with an aggregate liquidation priority of $350.0 million.
The Company is a real estate investment trust ("REIT") as defined in the
Internal Revenue Code. The Company's operations are conducted primarily through
the Operating Partnership. The limited partners of the Operating Partnership
own, in the aggregate, approximately a 16.0% interest in the Operating
Partnership at December 31, 1998.
The Operating Partnership is the sole member of limited liability
companies (the "L.L.C.'s"), owns a 95% economic interest in FR Development
Services, Inc., as well as a 99% limited partnership interest (subject in one
case as described below to a preferred limited partnership interest) in First
Industrial Financing Partnership, L.P. (the "Financing Partnership"), First
Industrial Securities, L.P. (the "Securities Partnership"), First Industrial
Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial
Pennsylvania Partnership, L.P. (the "Pennsylvania Partnership"), First
Industrial Harrisburg Partnership, L.P. (the "Harrisburg Partnership"), First
Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD., and
First Industrial Development Services, L.P. (together, the "Other Real Estate
Partnerships"). The Operating Partnership, through wholly owned limited
liability companies in which it is the sole member, also owns a 10% equity
interest in and provides asset and property management services to a joint
venture which invests in industrial properties.
The general partners of the Other Real Estate Partnerships are separate
corporations, each with a one percent general partnership interest in the Other
Real Estate Partnerships for which it acts as a general partner. Each general
partner of the Other Real Estate Partnerships is a wholly owned subsidiary of
the Company. The general partner of the Securities Partnership, First Industrial
Securities Corporation, also owns a preferred limited partnership interest in
the Securities Partnership which entitles it to receive a fixed quarterly
distribution, and results in it being allocated income in the same amount, equal
to the fixed quarterly dividend the Company pays on its 9.5%, $.01 par value,
Series A Cumulative Preferred Stock.
Profits, losses and distributions of the Operating Partnership are
allocated to the general partner and the limited partners in accordance with the
provisions contained within its restated and amended partnership agreement.
As of December 31, 1998, the Operating Partnership, the L.L.C.'s and FR
Development Services, Inc. (hereinafter defined as "The Consolidated Operating
Partnership") owned 885 in-service industrial properties, containing an
aggregate of approximately 57.3 million square feet of gross leasable area
("GLA"). On a combined basis, as of December 31, 1998, the Other Real Estate
Partnerships owned 102 in-service industrial properties, containing an aggregate
of approximately 12.0 million square feet of GLA. Of the 102 industrial
properties owned by the Other Real Estate Partnerships at December 31, 1998, 23
are held by the Financing Partnership, 19 are held by the Securities
Partnership, 23 are held by the Mortgage Partnership, 23 are held by the
Pennsylvania Partnership, six are held by the Harrisburg Partnership, six are
held by the Indianapolis Partnership, one is held by First Industrial
Development Services, L.P. and one is held by TK-SV, LTD.
RESULTS OF OPERATIONS
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997
At December 31, 1998, the Consolidated Operating Partnership owned 885
in-service properties containing approximately 57.3 million square feet of GLA,
compared to 521 in-service properties with approximately 34.2 million square
feet of GLA at December 31, 1997. During 1998, the Consolidated Operating
Partnership acquired 220 properties containing approximately 10.9 million square
feet of GLA, completed development of seven properties totaling 1.0 million
square feet of GLA and sold 36 in-service properties totaling 1.6 million square
feet of GLA and
33
<PAGE> 35
several land parcels. In addition, on January 2, 1998, the Financing Partnership
distributed 173 industrial properties comprising 12.8 million square feet of GLA
to the Operating Partnership.
Rental income and tenant recoveries and other income increased in 1998
over 1997 by $194.8 million or 197.7% due primarily to the properties acquired
or developed after December 31, 1996 and the distribution of 173 properties from
the Financing Partnership to the Operating Partnership on January 2, 1998
(between January 1, 1997 and December 31, 1998, the Consolidated Operating
Partnership acquired approximately $1.3 billion of industrial properties).
Revenues from properties owned prior to January 1, 1997 increased in 1998 over
1997 by approximately $2.3 million or 2.0% due primarily to increased rental
rates upon renewal or replacement of tenant leases.
Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased by approximately $56.6 million or 193.9% due primarily to the
properties acquired or developed after December 31, 1996 and the distribution of
173 properties from the Financing Partnership to the Operating Partnership on
January 2, 1998 (between January 1, 1997 and December 31, 1998, the Consolidated
Operating Partnership acquired approximately $1.3 billion of industrial
properties). Expenses from properties owned prior to January 1, 1997 remained
relatively unchanged.
General and administrative expense increased by approximately $7.1
million, of which, approximately $4.4 million is due primarily to the additional
expenses associated with managing the Consolidated Operating Partnership's
growing operations including additional professional fees relating to additional
properties owned and additional personnel to manage and expand the Consolidated
Operating Partnership's business. Approximately $2.7 million of the increase is
the result of the adoption of Emerging Issues Task Force Issue No. 97-11,
"Accounting for Internal Costs Relating to Real Estate Property Acquisitions"
("EITF 97-11"), which requires that internal costs of preacquisition activities
incurred in connection with the acquisition of an operating property be expensed
as incurred. The Company adopted EITF 97-11 on March 19, 1998.
Interest expense increased by approximately $43.8 million for the year
ended December 31, 1998 compared to the year ended December 31, 1997 due
primarily to a higher average debt balance outstanding resulting from the
issuance of unsecured debt to fund the acquisition and development of additional
properties (between January 1, 1997 and December 31, 1998, the Consolidated
Operating Partnership acquired approximately $1.3 billion of industrial
properties).
Amortization of interest rate protection agreements and deferred
financing costs increased by approximately $.5 million due primarily to
additional amortization of deferred financing costs relating to the issuance of
additional senior unsecured debt.
Depreciation and other amortization increased by approximately $38.3
million due primarily to the additional depreciation and amortization related to
the properties acquired or developed after December 31, 1996 and the
distribution of 173 properties from the Financing Partnership to the Operating
Partnership on January 2, 1998 (between January 1, 1997 and December 31, 1998,
the Consolidated Operating Partnership acquired approximately $1.3 billion of
industrial properties).
The $6.9 million restructuring charge for the year ended December 31,
1998 represents a charge in connection with the Consolidated Operating
Partnership's restructuring. The restructuring charge is comprised primarily of
severance costs, of which approximately $1.2 million is non-cash relating to
immediate vesting of restricted stock.
Equity in income of Other Real Estate Partnerships decreased in 1998
from 1997 by approximately $3.7 million due primarily to interest income earned
in 1997 on U.S. Government securities and the reinvestment of cash proceeds from
such securities upon maturity that were pledged as collateral by the Financing
Partnership to legally defease the Financing Partnership's $300.0 million
mortgage loan as well as a decrease in net income in one of the Other Real
Estate Partnerships due to the distribution of 173 industrial properties to the
Operating Partnership on January 2, 1998, offset by additional net income of
the Other Real Estate Partnerships due primarily to properties acquired by the
Other Real Estate Partnerships subsequent to December 31, 1996 and an
extraordinary loss and a loss from disposition of interest rate protection
agreements incurred in 1997.
34
<PAGE> 36
Equity in income of Joint Venture of approximately $.05 million for the
year ended December 31, 1998 represents the Consolidated Operating Partnership's
10% equity interest in the income of the September 1998 Joint Venture
(hereinafter defined).
The $8.5 million loss on disposition of interest rate protection
agreements for the year ended December 31, 1998 represents the Consolidated
Operating Partnership's, through the Operating Partnership, settlement of its
remaining interest rate protection agreement which was scheduled to expire on
January 4, 1999. This agreement was entered into in December 1997 in
anticipation of 1998 senior unsecured debt offerings. Due to the changing market
conditions and the Consolidated Operating Partnership's expectation that it
would not issue debt securities associated with the interest rate protection
agreement, the Consolidated Operating Partnership, through the Operating
Partnership, settled its position in the interest rate protection agreement.
The $4.0 million gain on disposition of interest rate protection
agreements for the year ended December 31, 1997 represents the sale of the
Consolidated Operating Partnership's, through the Operating Partnership,
interest rate protection agreements in April 1997. These agreements, together
with the interest rate protection agreements of the Financing Partnership, were
entered into in July 1995 and effectively fixed the annual interest rate on the
Financing Partnership's $300.0 million mortgage loan at 6.97% for six years
through June 30, 2001.
The $2.9 million gain on sales of properties for the year ended
December 31, 1998 resulted from the sale of 36 in-service properties and several
parcels of land. Gross proceeds for these property sales totaled approximately
$77.7 million.
The $.7 million gain on sales of properties for the year ended December
31, 1997 resulted from the sale of three in-service properties. Gross proceeds
for these property sales totaled approximately $16.1 million.
The $4.7 million extraordinary loss for the year ended December 31,
1997 represents the write-off of unamortized deferred financing costs,
prepayment fees, legal fees and other costs incurred to terminate an unsecured
loan and a revolving line of credit.
The $.7 million cumulative effect of change in accounting principle for
the year ended December 31, 1998 is the result of the write-off of the
unamortized balance of organizational costs on the Consolidated Operating
Partnership's balance sheet due to the early adoption of Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"), as further
discussed later in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
At December 31, 1997, the Consolidated Operating Partnership owned 521
in-service properties containing approximately 34.2 million square feet of GLA,
compared to 137 in-service properties with approximately 12.7 million square
feet of GLA at December 31, 1996. During 1997, the Consolidated Operating
Partnership acquired 379 properties containing approximately 20.7 million square
feet of GLA, completed development of eight properties totaling 1.2 million
square feet of GLA and sold three in-service properties totaling .4 million
square feet of GLA and one property held for redevelopment.
Rental income and tenant recoveries and other income increased in 1997
over 1996 by approximately $61.0 million or 162.2% due primarily to the
properties acquired after December 31, 1995. Revenues from properties owned
prior to January 1, 1996 remained relatively unchanged.
Property expenses, which include real estate taxes, repairs and
maintenance, property management, utilities, insurance and other expenses,
increased in 1997 over 1996 by approximately $19.2 million or 193.7% due
primarily to properties acquired after December 31, 1995. For properties owned
prior to January 1, 1996, property expenses remained relatively unchanged.
General and administrative expense increased in 1997 over 1996 by
approximately $1.8 million due primarily to the additional expenses associated
with managing the Consolidated Operating Partnership's growing operations
including additional professional fees relating to additional properties owned
and personnel to manage and expand the Consolidated Operating Partnership's
business.
Interest expense increased by approximately $20.4 million for the year
ended December 31, 1997 compared to the year ended December 31, 1996 due
primarily to a higher average debt balance to fund a capital contribution to the
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Financing Partnership for the purchase of U.S. Government securities to legally
defease a $300.0 million mortgage loan and to fund the acquisition and
development of additional properties.
Depreciation and amortization increased in 1997 over 1996 by
approximately $9.6 million due primarily to the additional depreciation and
amortization related to the properties acquired and placed in service after
December 31, 1995.
Equity in income of Other Real Estate Partnerships increased in 1997
over 1996 by approximately $11.2 million due primarily to interest income earned
on U.S. Government securities and the reinvestment of cash proceeds from such
securities upon maturity that were pledged as collateral by the Financing
Partnership to legally defease the Financing Partnership's $300.0 million
mortgage loan, additional net income from properties acquired by the Other Real
Estate Partnerships after December 31, 1995 and a gain from the sales of real
estate offset by an extraordinary loss and a loss from the disposition of
interest rate protection agreements.
The $4.0 million gain on the disposition of interest protection
agreements for the year ended December 31, 1997 represents the sale of the
Consolidated Operating Partnership's, through the Operating Partnership,
interest rate protection agreements in April 1997. These interest rate
protection agreements, together with the interest rate protection agreements of
the Financing Partnership, were entered into in July 1995 and effectively fixed
the annual interest rate on the Financing Partnership's $300.0 million mortgage
loan at 6.97% for six years through June 30, 2001.
The $.7 million gain on sales of properties for the year ended December
31, 1997 resulted from the sale of three in-service properties. Gross proceeds
for these property sales totaled approximately $16.1 million.
The $4.3 million gain on sales of properties for the year ended
December 31, 1996 resulted from the sale of six in-service properties. Gross
proceeds for these property sales totaled approximately $15.0 million.
The $ 4.7 million extraordinary loss for the year ended December 31,
1997 represents the write-off of unamortized deferred financing costs,
prepayment fees, legal fees and other costs incurred to terminate an unsecured
loan and a revolving line of credit.
The $2.3 million extraordinary loss for the year ended December 31,
1996 represents the write-off of unamortized deferred financing costs and a
prepayment fee incurred to terminate certain revolving credit facilities.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998, the Consolidated Operating Partnership's
unrestricted cash and cash equivalents totaled $13.9 million. Included in
restricted cash is approximately $7.7 million of gross proceeds from the sale of
properties. These sales proceeds will be disbursed as the Consolidated Operating
Partnership, through the Operating Partnership, exchanges into properties under
Section 1031 of the Internal Revenue Code.
YEAR ENDED DECEMBER 31, 1998
Net cash provided by operating activities of approximately $120.3
million for the year ended December 31, 1998 was comprised primarily of net
income of approximately $85.3 million and adjustments for non-cash items of
approximately $23.7 million and the net change in operating assets and
liabilities of approximately $11.3 million. The adjustments for the non-cash
items are primarily comprised of depreciation and amortization, a provision for
bad debts and the cumulative effect of a change in accounting, principle due to
the adoption of SOP 98-5 (as further discussed later in this "Management's
Discussion and Analysis of Financial Condition and Results of Operation"),
offset by the gain on sales of properties, equity in income of the Other Real
Estate Partnerships, equity in income of joint venture and the effect of the
straight-lining of rental income.
Net cash used in investing activities of approximately $510.8 million
for the year ended December 31, 1998 was comprised primarily of the acquisition
of real estate, development of real estate, capital expenditures related to the
expansion and improvement of existing real estate, closing costs from the sales
of properties, contributions to investment in Other Real Estate Partnerships,
investment in joint venture and an increase in restricted cash used to effect
Section 1031 exchanges, offset by distributions from investment in Other Real
Estate Partnerships, the proceeds from the sales of real estate and the
repayment of mortgage loans receivable.
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Net cash provided by financing activities of approximately $399.4
million for the year ended December 31, 1998 was comprised primarily of Unit and
preferred general partnership unit contributions, net proceeds from the issuance
of senior unsecured debt, net borrowings under the Operating Partnership's
$300.0 million unsecured revolving credit facility (the "1997 Unsecured
Acquisition Facility"), offset by Unit and preferred general partnership unit
distributions and repayments on mortgage loans payable.
YEAR ENDED DECEMBER 31, 1997
Net cash provided by operating activities of approximately $30.8
million for the year ended December 31, 1997 was comprised primarily of net
income of approximately $53.6 million offset by adjustments for non-cash items
of approximately $15.4 million and the net change in operating assets and
liabilities of approximately $7.4 million. The adjustments for the non-cash
items are primarily comprised of depreciation and amortization, extraordinary
loss and a provision for bad debts, offset by the gain on disposition of
interest rate protection agreements, the gain on sales of properties, equity in
income of the Other Real Estate Partnerships and the effect of the
straight-lining of rental income.
Net cash used in investing activities of approximately $1,052.7 million
for the year ended December 31, 1997 was comprised primarily of the acquisition
of real estate, development of real estate, capital expenditures related to the
expansion and improvement of existing real estate, closing costs from the sales
of properties, contributions to investment in Other Real Estate Partnerships and
the funding of mortgage loans receivable, offset by distributions from
investment in Other Real Estate Partnerships, the proceeds from the sales of
properties and funding of mortgage loans receivable.
Net cash provided by financing activities of approximately $1,022.6
million for the year ended December 31, 1997 was comprised primarily of Unit and
preferred general partnership unit contributions, net borrowings under the
Operating Partnership's $200.0 million unsecured revolving credit facility, net
proceeds from the issuance of senior unsecured debt and proceeds from the sale
of interest rate protection agreements, offset by Unit and preferred general
partnership unit distributions, repayments of mortgage loans payable, repayments
of promissory notes payable and repayments of senior unsecured debt.
YEAR ENDED DECEMBER 31, 1996
Net cash provided by operating activities of approximately $18.9
million for the year ended December 31, 1996 was comprised primarily of net
income of approximately $34.6 million offset by adjustments for non-cash items
of approximately $16.8 million and the net change in operating assets and
liabilities of approximately $1.1 million. The adjustments for the non-cash
items are primarily comprised of depreciation and amortization, extraordinary
loss and a provision for bad debts, offset by the gain on sales of properties
and the effect of the straight-lining of rental income.
Net cash used in investing activities of approximately $202.7 million
for the year ended December 31, 1996 was comprised primarily of the acquisition
of real estate, development of real estate, capital expenditures related to the
expansion and improvement of existing real estate, closing costs from the sales
of properties and contributions to investment in the Other Real Estate
Partnerships, offset by distributions from investment in Other Real Estate
Partnerships and the proceeds from the sales of properties and funding of
mortgage loans receivable.
Net cash provided by financing activities of approximately $181.6
million for the year ended December 31, 1996 was comprised primarily of Unit
contributions, and proceeds from mortgage loans payable, offset by Unit
distributions, repayments of mortgage loans payable, repayments of construction
loans payable and net repayments under the Operating Partnerships $200.0 million
unsecured revolving credit facility.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED UNIT DISTRIBUTIONS
The ratio of earnings to fixed charges and preferred unit distributions
was 1.68 for the year ended December 31, 1998 compared to 2.29 for the year
ended December 31, 1997 and 6.96 for the year ended December 31, 1996. The
decrease in the earnings to fixed charges and preferred unit distributions
between fiscal years 1998 and 1997 is primarily due to additional interest
expense and preferred unit distributions incurred in fiscal year 1998 from
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additional debt and preferred units issued to fund property acquisitions and
developments, which is partially offset by higher net operating income from the
property acquisitions as discussed in "Results of Operations" above. The
decrease in the earnings to fixed charges and preferred unit distributions
between fiscal year 1997 and 1996 is primarily due to additional interest
expense and preferred unit distributions incurred in fiscal year 1997 from
additional debt and preferred units issued in fiscal year 1997 to fund property
acquisitions and a capital contribution to the Financing Partnership to fund the
legal defeasance of its $300.0 million mortgage loan.
MARKET RISK
The following discussion about the Consolidated Operating Partnership's
risk-management activities includes "forward-looking statements" that involve
risk and uncertainties. Actual results could differ materially from those
projected in the forward-looking statements.
This analysis presents the hypothetical gain or loss in earnings, cash
flows or fair value of the financial instruments and derivative instruments
which are held by the Consolidated Operating Partnership at December 31, 1998
that are sensitive to changes in the interest rates. While this analysis may
have some use as a benchmark, it should not be viewed as a forecast.
In the normal course of business, the Consolidated Operating
Partnership also faces risks that are either non-financial or non-quantifiable.
Such risks principally include credit risk and legal risk and are not
represented in the following analysis.
At December 31, 1998, $134.8 million (approximately 12% of total debt
at December 31, 1998) of the Consolidated Operating Partnership's debt was
variable rate debt (all of the variable rate debt relates to the Operating
Partnership's 1997 Unsecured Acquisition Facility) and $1,014.6 million
(approximately 88% of total debt at December 31, 1998) was fixed rate debt. The
Consolidated Operating Partnership also had outstanding a written put and a
written call option (collectively, the "Written Options") which were issued in
conjunction with the initial offering of two tranches of unsecured debt. The
Consolidated Operating Partnership's past practice has been to lock into fixed
interest rates at issuance or fix the rate of variable rate debt through the use
of interest rate protection agreements when interest rate market conditions
dictate it is advantageous to do so. Currently, the Consolidated Operating
Partnership does not enter into financial instruments for trading or other
speculative purposes.
For fixed rate debt, changes in interest rates generally affect the
fair value of the debt, but not earnings or cash flows of the Consolidated
Operating Partnership. Conversely, for variable rate debt, changes in the
interest rate generally do not impact the fair value of the debt, but would
affect the Consolidated Operating Partnership's future earnings and cash flows.
The interest rate risk and changes in fair market value of fixed rate debt
generally do not have a significant impact on the Consolidated Operating
Partnership until the Consolidated Operating Partnership is required to
refinance such debt. See Note 7 to the consolidated financial statements for a
discussion of the maturity dates of the Consolidated Operating Partnership's
various fixed rate debt.
Based upon the amount of variable rate debt outstanding at December 31,
1998, a 10% increase or decrease in the interest rate on the Consolidated
Operating Partnership's variable rate debt would decrease or increase,
respectively, future net income and cash flows by approximately $.9 million per
year. A 10% increase in interest rates would decrease the fair value of the
fixed rate debt at December 31, 1998 by approximately $46.8 million to $946.9
million. A 10% decrease in interest rates would increase the fair value of the
fixed rate debt at December 31, 1998 by approximately $51.3 million to $1,045.0
million. A 10% increase in interest rates would decrease the fair value of the
Written Options at December 31, 1998 by approximately $4.0 million to $9.2
million. A 10% decrease in interest rates would increase the fair value of the
Written Options at December 31, 1998 by approximately $4.5 million to $17.7
million.
Information relating to the Consolidated Operating Partnership's
interest rate protection agreement that was settled on November 5, 1998 is
disclosed below in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
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INVESTMENT IN REAL ESTATE, DEVELOPMENT OF REAL ESTATE AND SALES OF REAL ESTATE
In 1998, the Consolidated Operating Partnership acquired 220 industrial
properties comprising approximately 10.9 million square feet of GLA for a total
purchase price of approximately $447.0 million, completed the development of
seven properties comprising approximately 1.0 million square feet of GLA at a
cost of approximately $37.2 million and sold 36 in-service properties comprising
approximately 1.6 million square feet of GLA and several land parcels for gross
proceeds of approximately $77.7 million. The gain on sales of properties was
approximately $2.9 million.
The Consolidated Operating Partnership has committed to the
construction of seven development projects totaling approximately .9 million
square feet of GLA. The estimated total construction costs are approximately
$30.3 million. These developments are expected to be funded with cash flow from
operations as well as borrowings under the Operating Partnership's 1997
Unsecured Acquisition Facility.
From January 1, 1999 to March 24, 1999, the Consolidated Operating
Partnership acquired three industrial properties for a total estimated
investment of approximately $16.8 million. The Operating Partnership also sold
eight industrial properties for approximately $19.1 million of gross proceeds.
REAL ESTATE HELD FOR SALE
The Consolidated Operating Partnership has an active sales program
through which it is continually engaged in identifying and evaluating its
current portfolio for potential sales candidates in order to redeploy capital.
At December 31, 1998, the Consolidated Operating Partnership had three
industrial properties located in New Jersey comprising approximately 148,874
square feet of GLA held for sale, one industrial property located in Michigan
comprising approximately 32,470 square feet of GLA held for sale and one
industrial property located in Colorado comprising approximately 26,922 square
feet of GLA held for sale. Income from operations of the five industrial
properties held for sale for the twelve months ended December 31, 1998, 1997 and
1996 is $.8 million, $.6 million and $.1 million, respectively. Net carrying
value of the five industrial properties held for sale at December 31, 1998 is
$9.7 million. There can be no assurance that such properties held for sale will
be sold.
INVESTMENT IN JOINT VENTURES
On September 28, 1998, the Consolidated Operating Partnership, through
a limited liability company in which the sole member is the Operating
Partnership, entered into a joint venture arrangement (the "September 1998 Joint
Venture") with an institutional investor to invest in industrial properties. The
Consolidated Operating Partnership, through wholly owned limited liability
companies in which the sole member is the Operating Partnership, owns a 10%
equity interest in the September 1998 Joint Venture and provides property and
asset management services to the September 1998 Joint Venture. On or after
October 2000, under certain circumstances, the Consolidated Operating
Partnership has the option of purchasing all of the properties owned by the
September 1998 Joint Venture at a price determined by the provisions of the
co-ownership agreement between the Consolidated Operating Partnership and the
September 1998 Joint Venture's other partner. The Consolidated Operating
Partnership received approximately $2.3 million in acquisition, asset management
and property management fees in 1998 from the September 1998 Joint Venture. The
Consolidated Operating Partnership accounts for the September 1998 Joint Venture
under the equity method of accounting. As of December 31, 1998, the September
1998 Joint Venture owned 130 industrial properties comprising approximately 6.3
million square feet of GLA.
MORTGAGE LOANS AND SENIOR UNSECURED DEBT
On April 16, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $2.5
million (the "Acquisition Mortgage Loan IV"). The Acquisition Mortgage Loan IV
is collateralized by one property in Baltimore, Maryland, bears interest at a
fixed rate of 8.95% and provides for monthly principal and interest payments
based on a 20-year amortization schedule. The Acquisition Mortgage Loan IV
matures on October 1, 2006. The Acquisition Mortgage Loan IV may be prepaid only
after October 2001 in exchange for the greater of a 1% prepayment fee or a yield
maintenance premium.
On August 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $1.0
million (the "Acquisition Mortgage Loan VI"). The Acquisition Mortgage Loan VI
is collateralized by one property in Portland, Oregon, bears interest at a fixed
rate of 8.875% and provides for monthly principal and interest payments based on
a 20-year amortization schedule. The Acquisition
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Mortgage Loan VI matures on November 1, 2006. The Acquisition Mortgage Loan VI
may be prepaid only after September 2001 in exchange for a 3% prepayment fee.
On August 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $1.4
million (the "Acquisition Mortgage Loan VII"). The Acquisition Mortgage Loan VII
is collateralized by one property in Milwaukie, Oregon, bears interest at a
fixed rate of 9.75% and provides for monthly principal and interest payments
based on a 25-year amortization schedule. The Acquisition Mortgage Loan VII
matures on March 15, 2002. The Acquisition Mortgage Loan VII may be prepaid only
after December 2001.
On November 5, 1998, the Consolidated Operating Partnership, through
the Consolidated Operating Partnership, assumed a mortgage loan in the principal
amount of $1.3 million (the "Acquisition Mortgage Loan VIII"). The Acquisition
Mortgage Loan VIII is collateralized by three properties in Richland Hills,
Texas, bears interest at a fixed rate of 8.450% and provides for monthly
principal and interest payments based on a 143-month amortization schedule. The
Acquisition Mortgage Loan VIII matures on July 1, 2009.
On March 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, issued $100.0 million of Dealer remarketable securities
which mature on April 5, 2011 and bear a coupon interest rate of 6.50% (the
"2011 Drs."). The issue price of the 2011 Drs. was 99.753%. Interest is paid
semi-annually in arrears on April 5 and October 5. The 2011 Drs. are callable
(the "Call Option"), at the option of J.P. Morgan Securities, Inc., as
Remarketing Dealer (the "Remarketing Dealer"), on April 5, 2001 (the
"Remarketing Date"). The Consolidated Operating Partnership received
approximately $2.8 million of proceeds from the Remarketing Dealer as
consideration for the Call Option. The Consolidated Operating Partnership will
amortize the proceeds over the life of the Call Option as an adjustment to
interest expense. If the holder of the Call Option calls the 2011 Drs. and
elects to remarket the 2011 Drs., then after the Remarketing Date, the interest
rate on the 2011 Drs. will be reset at a fixed rate until April 5, 2011 based
upon a predetermined formula as disclosed in the related Prospectus Supplement.
If the Remarketing Dealer elects not to remarket the 2011 Drs., then the
Consolidated Operating Partnership will be required to repurchase, on the
Remarketing Date, any 2011 Drs. that have not been purchased by the Remarketing
Dealer at 100% of the principal amount thereof, plus accrued and unpaid
interest, if any. The Consolidated Operating Partnership also settled an
interest rate protection agreement, in the notional amount of $100.0 million,
which was used to fix the interest rate on the 2011 Drs. prior to issuance. The
debt issue discount and the settlement amount of the interest rate protection
agreement are being amortized over the life of the 2011 Drs. as an adjustment to
interest expense. The 2011 Drs. contain certain covenants including limitations
on incurrence of debt and debt service coverage.
On July 14, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, issued $200.0 million of senior unsecured debt which
matures on July 15, 2028 and bears a coupon interest rate of 7.60% (the "2028
Notes"). The issue price of the 2028 Notes was 99.882%. Interest is paid
semi-annually in arrears on January 15 and July 15. The Consolidated Operating
Partnership also settled interest rate protection agreements, in the notional
amount of $150.0 million, which were used to fix the interest rate on the 2028
Notes prior to issuance. The debt issue discount and the settlement amount of
the interest rate protection agreements are being amortized over the life of the
2028 Notes as an adjustment to the interest expense. The 2028 Notes contain
certain covenants including limitation on incurrence of debt and debt service
coverage. Approximately $50.0 million of the 2028 Notes was purchased, through a
broker/dealer, by an entity in which a Director of the Company owns greater than
a ten percent interest.
On November 5, 1998 the Consolidated Operating Partnership, through the
Operating Partnership, settled its remaining interest rate protection agreement
which was scheduled to expire on January 4, 1999. This agreement was entered
into in December 1997 in anticipation of 1998 senior unsecured debt offerings.
Due to the changing market conditions and the Consolidated Operating
Partnership's expectation that it would not issue debt securities associated
with the interest rate protection agreement, the Consolidated Operating
Partnership settled its position in the interest rate protection agreement. As a
result, the Consolidated Operating Partnership recognized an expense of
approximately $8.5 million associated with the settlement of this interest rate
protection agreement in the fourth quarter of 1998.
ISSUANCE OF PREFERRED UNITS, UNITS AND EMPLOYEE STOCK OPTIONS
On February 4, 1998, the Company issued 5,000,000 Depositary Shares,
each representing 1/100th of a share of the Company's 7.95%, $.01 par value,
Series D Cumulative Preferred Stock (the "Series D Preferred Stock"), at an
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$53.906 per unit on its Series C Cumulative Preferred Units. On March 31, 1998,
the Operating Partnership paid a period prorated first quarter distribution of
$30.365 per unit on its Series D Preferred Units. The preferred unit
distributions paid on March 31, 1998 totaled, in the aggregate, approximately
$4.8 million. On March 31, 1998, the Operating Partnership accrued a period
prorated first quarter distribution of $7.13194 per Series E Preferred Unit,
totaling $.2 million for the three months ended March 31, 1998.
On June 30, 1998, the Operating Partnership paid a second quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
June 30, 1998, the Operating Partnership paid a second quarter distribution of
$53.906 per unit on its Series C Cumulative Preferred Units. On June 30, 1998,
the Operating Partnership paid a second quarter distribution of $49.687 per unit
on its Series D Preferred Units. On June 30, 1998, the Operating Partnership
paid a period prorated first quarter distribution and a second quarter
distribution totaling $56.5069 per unit on its Series E Preferred Units. The
preferred unit distributions paid on June 30, 1998 totaled, in the aggregate,
approximately $7.4 million.
On September 30, 1998, the Operating Partnership paid a third quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
September 30, 1998, the Operating Partnership paid a third quarter distribution
of $53.906 per unit on its Series C Cumulative Preferred Units. On September 30,
1998, the Operating Partnership paid a third quarter distribution of $49.687 per
unit on its Series D Preferred Units. On September 30, 1998, the Operating
Partnership paid a third quarter distribution of $49.375 per unit on its Series
E Preferred Units. The preferred unit distributions paid on September 30, 1998
totaled, in the aggregate, approximately $7.2 million.
On December 31, 1998, the Operating Partnership paid a fourth quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
December 31, 1998, the Operating Partnership paid a fourth quarter distribution
of $53.906 per unit on its Series C Cumulative Preferred Units. On December 31,
1998, the Operating Partnership paid a fourth quarter distribution of $49.687
per unit on its Series D Preferred Units. On December 31, 1998, the Operating
Partnership paid a fourth quarter distribution of $49.375 per unit on its Series
E Preferred Units. The preferred unit distributions paid on December 31, 1998
totaled, in the aggregate, approximately $7.2 million.
In March 1999, the Operating Partnership declared a first quarter
distribution of $.60 per unit which is payable on April 19, 1999. The Operating
Partnership also declared a first quarter distribution of $54.688 per unit,
$53.906 per unit, $49.687 per unit and $49.375 per unit on its Series B
Cumulative Preferred Units, Series C Cumulative Preferred Units, Series D
Preferred Units and Series E Preferred Units, respectively, which is payable on
March 31, 1999.
SHORT-TERM AND LONG-TERM LIQUIDITY NEEDS
The Consolidated Operating Partnership has considered its short-term
(one year or less) liquidity needs and the adequacy of its estimated cash flow
from operations and other expected liquidity sources to meet these needs. The
Consolidated Operating Partnership believes that its principal short-term
liquidity needs are to fund normal recurring expenses, debt service requirements
and the minimum distribution required by the Company to maintain the Company's
REIT qualification under the Internal Revenue Code. The Consolidated Operating
Partnership anticipates that these needs will be met with cash flows provided by
operating activities.
The Consolidated Operating Partnership expects to meet long-term
(greater than one year) liquidity requirements such as property acquisitions,
developments, scheduled debt maturities, major renovations, expansions and other
nonrecurring capital improvements through long-term secured and unsecured
indebtedness and the issuance of additional Units and preferred units. The
Consolidated Operating Partnership is also actively considering joint ventures
with institutional partners and dispositions of select assets as additional
financing strategies. As of December 31, 1998 and March 24, 1999, $100.0 million
of debt securities was registered and unissued under the Securities Act
of 1933, as amended. The Consolidated Operating Partnership may finance the
development or acquisition of additional properties through borrowings under the
1997 Unsecured Acquisition Facility. At December 31, 1998, borrowings under the
1997 Unsecured Acquisition Facility bore interest at a weighted average interest
rate of 6.5%. As of March 24, 1999, the Consolidated Operating Partnership,
through the Operating Partnership, had approximately $164.7 million available in
additional borrowings under the 1997 Unsecured Acquisition Facility.
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RELATED PARTY TRANSACTIONS
The Consolidated Operating Partnership often obtains title insurance
coverage for its properties from an entity for which an independent Director of
the Company became the President, Chief Executive Officer and a Director in
1996.
From time to time, the Consolidated Operating Partnership utilizes real
estate brokerage services from CB Richard Ellis for which a relative of one of
the Company's officers/Directors is an employee.
From time to time, the Consolidated Operating Partnership utilizes
leasing services from an entity for which one of the Company's former officers
located in a regional office owns a 62.5% ownership interest. For the year ended
December 31, 1998, the Consolidated Operating Partnership has paid
approximately $.2 million of leasing commissions to this entity.
On July 16, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, completed an acquisition of a real estate firm of which a
former officer and an employee of the Company owned a 77.5% interest. Gross
proceeds to the real estate firm totaled approximately $2.3 million.
On June 23, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, purchased a 292,471 square foot light industrial property
located in Denver, Colorado for approximately $12.2 million. The property was
purchased from a company in which one of the Company's officers owned a 12.08%
interest.
Four industrial properties were purchased from Western Suburban
Industrial Investments Limited Partnership ("Western") in which the sole general
partner, having a 5% interest, was Tomasz/Shidler Investment Corporation, the
sole shareholders of which were a Director of the Company and a former
Director/officer of the Company who also had a 53% and 32% limited partnership
interest in Western, respectively. Further, an additional Director/officer of
the Company was a limited partner in Western having an interest of 2%. The
aggregate purchase price for this acquisition totaled approximately $7.9
million, excluding costs incurred in conjunction with the acquisition of the
properties.
In the fourth quarter of 1998, the Consolidated Operating Partnership,
through the Operating Partnership, sold three industrial properties to a former
officer and Director of the Company for gross proceeds of approximately $10.7
million. The former officer and Director has the option of selling the
properties back to the Consolidated Operating Partnership and the Consolidated
Operating Partnership has the option of buying the properties from the former
officer and Director. The gain on sale from the sale of these properties has
been deferred and will be recognized if the above mentioned options are not
exercised.
ENVIRONMENTAL
The Consolidated Operating Partnership incurred environmental costs of
$.1 million and $.2 million in 1998 and 1997, respectively. The Consolidated
Operating Partnership estimates 1999 costs of approximately $.1 million. The
Consolidated Operating Partnership estimates that the aggregate cost which needs
to be expended in 1999 and beyond with regard to currently identified
environmental issues will not exceed approximately $1.8 million, a substantial
amount of which will be the primary responsibility of the tenant, the seller to
the Consolidated Operating Partnership or another responsible party. This
estimate was determined by a third party evaluation.
INFLATION
For the last several years, inflation has not had a significant impact
on the Consolidated Operating Partnership because of the relatively low
inflation rates in the Consolidated Operating Partnership's markets of
operation. Most of the Consolidated Operating Parnerhip's leases require the
tenants to pay their share of operating expenses, including common area
maintenance, real estate taxes and insurance, thereby reducing the Consolidated
Operating Partnership's exposure to increases in costs and operating expenses
resulting from inflation. In addition, many of the outstanding leases expire
within five years which may enable the Consolidated Operating Partnership to
replace existing leases with new leases at higher base rentals if rents of
existing leases are below the then-existing market rate.
43
<PAGE> 45
YEAR 2000 COMPLIANCE
The Year 2000 compliance issue concerns the inability of computerized
information systems and non-information systems to accurately calculate, store
or use a date after 1999. This could result in computer systems failures or
miscalculations causing disruptions of operations. The Year 2000 issue affects
almost all companies and organizations.
The Consolidated Operating Parntership has discussed its software
applications and internal operational programs with its current information
systems' vendor and, based on such discussions, believes that such applications
and programs will properly recognize calendar dates beginning in the year 2000.
The Consolidated Operating Partnership is discussing with its material
third-party service providers, such as its banks, payroll processor and
telecommunications provider, their Year 2000 compliance and is assessing what
effect their possible non-compliance might have on the Consolidated Operating
Partnership. In addition, the Consolidated Operating Partnership is discussing
with its material vendors the possibility of any interface difficulties and/or
electrical or mechanical problems relating to the year 2000 which may affect
properties owned by the Consolidated Operating Partnership. The Consolidated
Operating Partnership has also surveyed substantially all of its tenants to
determine the status of their Year 2000 compliance and what effect their
possible non-compliance might have on the Consolidated Operating Partnership.
The Consolidated Operating Partnership is currently processing the information
obtained from such tenant surveys and remains in discussions with its material
vendors and third-party service providers. Of the tenant surveys processed to
date, all have stated that they are either Year 2000 compliant or will be Year
2000 compliant by the end of 1999. The Consolidated Operating Partnership plans
to complete its assessment of Year 2000 compliance by such parties by June 30,
1999. Until such time the Consolidated Operating Partnership cannot estimate any
potential adverse impact resulting from the failure of tenants, vendors or
third-party service providers to address their Year 2000 issues; however, to
date, no significant Year 2000-related conditions have been identified.
Because the Consolidated Operating Partnership's evaluation of its Year
2000 issues has been conducted by its own personnel or by its vendors in
connection with their servicing operations, the Consolidated Operating
Partnership's expenditures for assessing its Year 2000 issues, though difficult
to quantify, to date have not been material. In addition, the Consolidated
Operating Partnership is not aware of any Year 2000-related conditions that it
believes would likely require any material expenditures by the Consolidated
Operating Partnership in the future.
Based on its current information, the Consolidated Operating
Partnership believes that the risk posed by any foreseeable Year 2000-related
problem with its internal systems and the systems at its properties (including
both information and non-information systems) or with its vendors or tenants is
minimal. Year 2000-related problems with the Consolidated Operating
Partnership's software applications and internal operational programs or with
the electrical or mechanical systems at its properties are unlikely to cause
more than minor disruptions in the Consolidated Operating Partnership's
operations. The Consolidated Operating Partnership believes that the risk posed
by Year 2000-related problems at certain of its third-party service providers,
such as its banks, payroll processor and telecommunications provider is
marginally greater, though, based on its current information, the Consolidated
Operating Partnership does not believe any such problems would have a material
effect on its operations. Any Year 2000 related problems at such third-party
service providers could delay the processing of financial transactions and the
Consolidated Operating Partnership's payroll and could disrupt the Consolidated
Operating Partnership's internal and external communications. At this time, the
Consolidated Operating Partnership has not developed and does not anticipate
developing any contingency plans with respect to Year 2000 issues. In addition,
the Consolidated Operating Partnership has no plans to seek independent
verification or review of its assessment of its Year 2000 issues. The
Consolidated Operating Partnership does intend to complete its assessment of,
and to continue to monitor, its Year 2000 issues and will develop contingency
plans if, and to the extent, deemed necessary.
While the Consolidated Operating Partnership believes that it will be
Year 2000 compliant by December 31, 1999, there can be no assurance that the
Consolidated Operating Partnership has been or will be successful in identifying
and assessing Year 2000 issues, or that, to the extent identified, the
Consolidated Operating Partnership's efforts to remediate such issues will be
effective such that Year 2000 issues will not have a material adverse effect on
the Consolidated Operating Partnership's business, financial condition or
results of operation.
44
<PAGE> 46
OTHER
In June 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income". This statement, effective for fiscal years beginning
after December 15, 1997, requires the Consolidated Operating Partnership to
report components of comprehensive income in a financial statement that is
displayed with the same prominence as other financial statements. Comprehensive
income is defined by Concepts Statement No. 6, "Elements of Financial
Statements" as the change in the equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources. It
includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Consolidated Operating
Partnership's net income available to unitholders approximates its comprehensive
income as defined in Concepts Statement No. 6, "Elements of Financial
Statements".
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information". This statement, effective for financial statements for fiscal
years beginning after December 15, 1997, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Generally, financial information is required to be reported
on the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The sole business of the
Consolidated Operating Partnership is the owning and operation of industrial
properties. The Consolidated Operating Partnership evaluates operating results
and allocates resources on a property-by-property basis. Accordingly, the
Consolidated Operating Partnership has concluded it has a single reportable
segment for FAS 131 purposes. Further, all operations are within the United
States and no tenant comprises more than 10% of consolidated revenues.
Therefore, no additional disclosure due to the adoption of FAS 131 is currently
required.
In March 1998, the FASB's Emerging Issues Task Force (the "Task Force")
issued Emerging Issues Task Force Issue No. 97-11, "Accounting for Internal
Costs Relating to Real Estate Property Acquisitions" ("EITF 97-11"). EITF 97-11,
effective March 19, 1998, requires that internal costs of preacquisition
activities incurred in connection with the acquisition of an operating property
be expensed as incurred. The Task Force concluded that a property is considered
operating if, at the date of acquisition, major construction activity is
substantially completed on the property and (a) it is held available for
occupancy upon completion of tenant improvements by the acquirer or (b) it is
already income producing. The Consolidated Operating Partnership adopted EITF
97-11 as of March 19, 1998. Prior to March 19, 1998, the Consolidated Operating
Partnership capitalized internal costs of preacquisition activities incurred in
connection with the acquisition of operating properties. The adoption of EITF
97-11 resulted in a cumulative increase of approximately $2.7 million in the
amount of general and administrative expense reflected in the Consolidated
Operating Partnership's consolidated statement of operations in 1998.
In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5
requires that the net unamortized balance of all start up costs and
organizational costs be written off as a cumulative effect of a change in
accounting principle and all future start-up costs and organizational costs be
expensed. In the second quarter of 1998, the Consolidated Operating Partnership
reported a cumulative effect of a change in accounting principle in the amount
of approximately $.7 million to reflect the write-off of the unamortized balance
of organizational costs on the Consolidated Operating Partnership's balance
sheet.
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement, effective for fiscal years beginning after June 15,
1999, establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments imbedded in
other contracts, be recorded in the balance sheet as either an asset or
liability measured at its fair value. The statement also requires that the
changes in the derivative's fair value be recognized in earnings unless specific
hedge accounting criteria are met. The Consolidated Operating Partnership is
currently assessing the impact of this new statement on its consolidated
financial position, liquidity, and results of operations.
45
<PAGE> 47
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Response to this item is included in Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations" above.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedule on page
F-1 of this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10, 11, 12, 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT,
EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Operating Partnership has no directors or executive officers; instead
it is managed by its sole general partner, the Company. The information
with respect to the sole general partner of the Operating Partnership
required by Item 10, Item 11, Item 12 and Item 13 is incorporated herein
by reference to parts of the Company's definitive proxy statement in
connection with its 1999 Annual Meeting of Stockholders (the form of which
is filed herewith as Exhibit 99) captioned "Information Regarding Nominees
and Directors", "Executive Officers and Other Senior Management",
"Director Compensation", "Executive Compensation", "Section 16 (a)
Beneficial Ownership Reporting Compliance", "Certain Relationships and
Transactions" and "Security Ownership of Management and Certain Beneficial
Owners". Information contained in the part of such proxy statement
captioned "Stock Performance Graph" is specifically not incorporated
herein by reference.
46
<PAGE> 48
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND
REPORTS ON FORM 8-K
(a) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND EXHIBITS
(1 & 2) See Index to Financial Statements and Financial Statement
Schedule on page F-1 of this Form 10-K
(3) Exhibits:
Exhibit No. Description
- ----------- -----------
3.1 Sixth Amended and Restated Limited Partnership Agreement of First
Industrial, L.P. dated March 18, 1998 (the "L.P. Agreement")
(incorporated by reference to Exhibit 10.1 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1997, File No. 1-13102)
3.2 First Amendment to the L.P. Agreement dated April 1, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.3 Second Amendment to the L.P. Agreement dated April 3, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.4 Third Amendment to the L.P. Agreement dated April 16, 1998
(incorporated by reference to Exhibit 10.4 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.5 Fourth Amendment to the L.P. Agreement dated June 24, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended June 30, 1998, File No.
1-13102)
3.6 Fifth Amendment to the L.P. Agreement dated July 16, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended June 30, 1998, File No.
1-13102)
3.7 Sixth Amendment to the L.P. Agreement dated August 31, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.8 Seventh Amendment to the L.P. Agreement dated October 21, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.9 Eighth Amendment to the L.P. Agreement dated October 30, 1998
(incorporated by reference to Exhibit 10.4 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.10 Ninth Amendment to the L.P. Agreement dated November 5, 1998
(incorporated by reference to Exhibit 10.5 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
4.1 Indenture, dated as of May 13, 1997, between First Industrial,
L.P. and First Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.1 of the Form 10-Q of the
Company for the fiscal quarter ended March 31, 1997, as amended
by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No.
1-13102)
4.2 Supplemental Indenture No. 1, dated as of May 13, 1997, between
First Industrial, L.P. and First Trust National Association as
Trustee relating to $150 million of 7.60% Notes due 2007 and $100
million of 7.15% Notes due 2027 (incorporated by reference to
Exhibit 4.2 of the Form 10-Q of the Company for the fiscal
quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of
the Company filed May 30, 1997, File No. 1-13102)
47
<PAGE> 49
4.3 Supplemental Indenture No. 2, dated as of May 22, 1997, between
First Industrial, L.P. and First Trust National Association as
Trustee relating to $100 million of 7 3/8% Notes due 2011
(incorporated by reference to Exhibit 4.4 of the Form 10-QT of
the Operating Partnership for the fiscal quarter ended March 31,
1997, File No. 333-21873)
4.4 Supplemental Indenture No. 3 dated October 28, 1997 between First
Industrial, L.P. and First Trust National Association providing
for the issuance of Medium-term Notes due Nine Months or more
from Date of Issue (incorporated by reference to Exhibit 4.1 of
Form 8-K of the Operating Partnership, dated November 3, 1997, as
filed November 3, 1997, File No. 333-21873)
4.5 6.90% Medium-Term Note due 2005 in principal amount of $50
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.17 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.6 7.00% Medium-Term Note due 2006 in principal amount of $150
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.18 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.7 7.50% Medium-Term Note due 2017 in principal amount of $100
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.19 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.8 Trust Agreement, dated as of May 16, 1997, between First
Industrial, L.P. and First Bank National Association, as Trustee
(incorporated by reference to Exhibit 4.5 of the Form 10-QT of
the Operating Partnership for the fiscal quarter ended March 31,
1997, File No. 333-21873)
4.9 Unsecured Revolving Credit Agreement (the "Unsecured Revolving
Credit Agreement"), dated as of December 15, 1997, by and among
the Operating Partnership, First Industrial Realty Trust, Inc.
and The First National Bank of Chicago, Union Bank of
Switzerland, New York Branch and certain other banks
(incorporated by reference to Exhibit 4.22 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1997, File No. 1-13102)
4.10 Supplemental Indenture No. 4, dated as of March 26, 1998, between
First Industrial, L.P. and First Trust National Trust
Association, as Trustee, relating to 6.50% Dealer remarketable
securities due April 5, 2011 (incorporated by reference to
Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated April 7,
1998, File No. 333-21873)
4.11 6.50% dealer remarketable security due April 5, 2011 in principal
amount of $100 million issued by First Industrial, L.P.
(incorporated by reference to Exhibit 4.2 of the Form 8-K of
First Industrial, L.P. dated April 7, 1998, File No. 333-21873)
4.12 Remarketing Agreement, dated March 31, 1998, between First
Industrial, L.P. and J.P. Morgan Securities Inc. (incorporated by
reference to Exhibit 1.2 of Form 8-K of First Industrial, L.P.
dated April 7, 1998, File No.333-21873)
4.13 7.60% Notes due 2028 in principal amount of $200 million issued
by First Industrial, L.P. (incorporated by reference to Exhibit
4.2 of the Form 8-K of First Industrial, L.P dated July 15, 1998,
File No. 333-21873)
4.14 Supplemental Indenture No. 5, dated as of July 14, 1998, between
First Industrial, L.P. and the U.S. Bank Trust National
Association, relating to First Industial, L.P.'s 7.60% Notes due
July 15, 2008 (incorporated by reference to Exhibit 4.1 of the
Form 8-K of First Industrial, L.P. dated July 15, 1998, File No.
333-21873)
10.1 Interest Rate Swap Agreement between First Industrial, L.P. and
UBS Securities (Swaps)Inc. (incorporated by reference to Exhibit
10.47 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, File No. 1-13102)
48
<PAGE> 50
12.1* Computation of Earnings to Fixed Charges and Preferred Unit
Distributions of First Industrial, L.P.
21.1 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21.1 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, File No. 1-13102)
23* Consent of PricewaterhouseCoopers, LLP
27.1* Financial Data Schedule of First Industrial, L.P.
99* The Form of Definitive Proxy Statement of First Industrial Realty
Trust, Inc., with respect to its 1999 Annual Meeting of
Stockholders
* Filed herewith.
(b) REPORTS ON FORM 8-K AND FORM 8-K/A
Report on Form 8-K filed November 12, 1998, dated November 6,
1998, as amended by the report on Form 8-K/A No. 1 filed January
11, 1999 relating to (i) the acquisition of 70 industrial
properties by the Operating Partnership, (ii) four industrial
properties by the Other Real Estate Partnerships and (iii) the
acquisition of 111 properties by a joint venture arrangement,
entered into on September 28, 1998, between the Operating
Partnership, through a limited liability company in which it is
the sole member, and an institutional investor. The reports
include Combined Historical Statements of Revenues and Certain
Expenses for the acquired properties and Pro Forma Balance Sheet
and Pro Forma Statements of Operations for the Operating
Partnership.
49
<PAGE> 51
================================================================================
The Company has prepared supplemental financial and operating
information which is available without charge upon request to the Company.
Please direct requests as follows:
First Industrial Realty Trust, Inc.
311 S. Wacker, Suite 4000
Chicago, IL 60606
Attention: Investor Relations
50
<PAGE> 52
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, thereunto duly authorized.
FIRST INDUSTRIAL, L.P.
BY: FIRST INDUSTRIAL REALTY TRUST, INC.
as general partner
Date: March 24, 1999 By: /s/ Michael W. Brennan
-----------------------------------------------
Michael W. Brennan
President, Chief Executive Officer and Director
(Principal Executive Officer)
Date: March 24, 1999 By: /s/ Michael J. Havala
-----------------------------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Jay H. Shidler Chairman of the Board of Directors March 24, 1999
- ------------------------------
Jay H. Shidler
/s/ Michael W. Brennan President, Chief Executive Officer March 24, 1999
- ------------------------------ and Director
Michael W. Brennan
/s/ Michael G. Damone Director of Strategic Planning March 24, 1999
- ------------------------------ and Director
Michael G. Damone
/s/ John L. Lesher Director March 24, 1999
- ------------------------------
John L. Lesher
/s/ Kevin W. Lynch Director March 24, 1999
- -----------------------------
Kevin W. Lynch
/s/ John E. Rau Director March 24, 1999
- -----------------------------
John E. Rau
/s/ Robert J. Slater Director March 24, 1999
- -----------------------------
Robert J. Slater
Director March 24, 1999
- -----------------------------
J. Steven Wilson
</TABLE>
51
<PAGE> 53
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
3.1 Sixth Amended and Restated Limited Partnership Agreement of First
Industrial, L.P. dated March 18, 1998 (the "L.P.
Agreement")(incorporated by reference to Exhibit 10.1 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, File No. 1-13102)
3.2 First Amendment to the L.P. Agreement dated April 1, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.3 Second Amendment to the L.P. Agreement dated April 3, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.4 Third Amendment to the L.P. Agreement dated April 16, 1998
(incorporated by reference to Exhibit 10.4 of the Form 10-Q of
the Company for the fiscal quarter ended March 31, 1998, File No.
1-13102)
3.5 Fourth Amendment to the L.P. Agreement dated June 24, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended June 30, 1998, File No.
1-13102)
3.6 Fifth Amendment to the L.P. Agreement dated July 16, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended June 30, 1998, File No.
1-13102)
3.7 Sixth Amendment to the L.P. Agreement dated August 31, 1998
(incorporated by reference to Exhibit 10.2 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.8 Seventh Amendment to the L.P. Agreement dated October 21, 1998
(incorporated by reference to Exhibit 10.3 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.9 Eighth Amendment to the L.P. Agreement dated October 30, 1998
(incorporated by reference to Exhibit 10.4 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
3.10 Ninth Amendment to the L.P. Agreement dated November 5, 1998
(incorporated by reference to Exhibit 10.5 of the Form 10-Q of
the Company for the fiscal quarter ended September 30, 1998, File
No. 1-13102)
4.1 Indenture, dated as of May 13, 1997, between First Industrial,
L.P. and First Trust National Association, as Trustee
(incorporated by reference to Exhibit 4.1 of the Form 10-Q of the
Company for the fiscal quarter ended March 31, 1997, as amended
by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No.
1-13102)
4.2 Supplemental Indenture No. 1, dated as of May 13, 1997, between
First Industrial, L.P. and First Trust National Association as
Trustee relating to $150 million of 7.60% Notes due 2007 and $100
million of 7.15% Notes due 2027 (incorporated by reference to
Exhibit 4.2 of the Form 10-Q of the Company for the fiscal
quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of
the Company filed May 30, 1997, File No. 1-13102)
52
<PAGE> 54
Exhibit No. Description
- ----------- -----------
4.3 Supplemental Indenture No. 2, dated as of May 22, 1997, between
First Industrial, L.P. and First Trust National Association as
Trustee relating to $100 million of 7 3/8% Notes due 2011
(incorporated by reference to Exhibit 4.4 of the Form 10-QT of
the Operating Partnership for the fiscal quarter ended March 31,
1997, File No. 333-21873)
4.4 Supplemental Indenture No. 3 dated October 28, 1997 between First
Industrial, L.P. and First Trust National Association providing
for the issuance of Medium-term Notes due Nine Months or more
from Date of Issue (incorporated by reference to Exhibit 4.1 of
Form 8-K of the Operating Partnership, dated November 3, 1997, as
filed November 3, 1997, File No. 333-21873)
4.5 6.90% Medium-Term Note due 2005 in principal amount of $50
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.17 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.6 7.00% Medium-Term Note due 2006 in principal amount of $150
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.18 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.7 7.50% Medium-Term Note due 2017 in principal amount of $100
million issued by First Industrial, L.P. (incorporated by
reference to Exhibit 4.19 of the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1997, File No.
1-13102)
4.8 Trust Agreement, dated as of May 16, 1997, between First
Industrial, L.P. and First Bank National Association, as Trustee
(incorporated by reference to Exhibit 4.5 of the Form 10-QT of
the Operating Partnership for the fiscal quarter ended March 31,
1997, File No. 333-21873)
4.9 Unsecured Revolving Credit Agreement (the "Unsecured Revolving
Credit Agreement"), dated as of December 15, 1997, by and among
the Operating Partnership, First Industrial Realty Trust, Inc.
and The First National Bank of Chicago, Union Bank of
Switzerland, New York Branch and certain other banks
(incorporated by reference to Exhibit 4.22 of the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
1997, File No. 1-13102)
4.10 Supplemental Indenture No. 4, dated as of March 26, 1998, between
First Industrial, L.P. and First Trust National Trust
Association, as Trustee, relating to 6.50% Dealer remarketable
securities due April 5, 2011 (incorporated by reference to
Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated April 7,
1998, File No. 333-21873)
4.11 6.50% dealer remarketable security due April 5, 2011 in principal
amount of $100 million issued by First Industrial, L.P.
(incorporated by reference to Exhibit 4.2 of the Form 8-K of
First Industrial, L.P. dated April 7, 1998, File No. 333-21873)
4.12 Remarketing Agreement, dated March 31, 1998, between First
Industrial, L.P. and J.P. Morgan Securities Inc. (incorporated by
reference to Exhibit 1.2 of Form 8-K of First Industrial, L.P.
dated April 7, 1998, File No.333-21873)
4.13 7.60% Notes due 2028 in principal amount of $200 million issued
by First Industrial, L.P. (incorporated by reference to Exhibit
4.2 of the Form 8-K of First Industrial, L.P dated July 15, 1998,
File No. 333-21873)
4.14 Supplemental Indenture No.5, dated as of July 14, 1998, between
First Industrial, L.P. and the U.S. Bank Trust National
Association, relating to First Industial, L.P.'s 7.60% Notes due
July 15, 2008 (incorporated by reference to Exhibit 4.1 of the
Form 8-K of First Industrial, L.P. dated July 15, 1998, File No.
333-21873)
10.1 Interest Rate Swap Agreement between First Industrial, L.P. and
UBS Securities (Swaps)Inc. (incorporated by reference to Exhibit
10.47 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, File No. 1-13102)
53
<PAGE> 55
Exhibit No. Description
- ----------- -----------
12.1* Computation of Earnings to Fixed Charges and Preferred Unit
Distributions of First Industrial, L.P.
21.1 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 21.1 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, File No. 1-13102)
23* Consent of PricewaterhouseCoopers LLP
27.1* Financial Data Schedule of First Industrial, L.P.
99* The Form of Definitive Proxy Statement of First Industrial Realty
Trust, Inc., with respect to its 1999 Annual Meeting of
Stockholders
* Filed herewith.
54
<PAGE> 56
FIRST INDUSTRIAL, L.P.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS
Report of Independent
Accountants..................................................................................... F-2
Consolidated Balance Sheets of First Industrial, L.P.
as of December 31, 1998 and 1997................................................................ F-3
Consolidated Statements of Operations of First Industrial, L.P. for the Years
Ended December 31, 1998, 1997 and 1996.......................................................... F-4
Consolidated Statements of Changes in Partners' Capital of First Industrial,
L.P. for the Years Ended December 31, 1998, 1997 and 1996....................................... F-5
Consolidated Statements of Cash Flows of First Industrial, L.P. for the Years Ended
December 31, 1997, 1996 and 1995................................................................ F-6
Notes to Consolidated Financial Statements...................................................... F-7
FINANCIAL STATEMENT SCHEDULE
Report of Independent Accountants............................................................... S-1
Schedule III: Real Estate and Accumulated Depreciation......................................... S-2
</TABLE>
F-1
<PAGE> 57
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
First Industrial, L.P.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in partners' capital and of
cash flows present fairly, in all material respects, the financial position of
First Industrial, L.P. (the "Operating Partnership") at December 31, 1998 and
1997, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Operating Partnership's management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 16, 1999
F-2
<PAGE> 58
FIRST INDUSTRIAL, L.P.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
-------------- ---------------
<S> <C> <C>
ASSETS
Assets:
Investment in Real Estate:
Land.............................................................. $ 323,363 $ 184,704
Buildings and Improvements........................................ 1,794,611 1,012,145
Furniture, Fixtures, and Equipment................................ 1,353 ---
Construction in Progress.......................................... 14,138 4,211
Less: Accumulated Depreciation.................................... (145,435) (22,319)
-------------- ---------------
Net Investment in Real Estate.................................. 1,988,030 1,178,741
Investment in Other Real Estate Partnerships........................ 368,364 643,621
Cash and Cash Equivalents........................................... 13,946 4,995
Restricted Cash..................................................... 7,680 ---
Tenant Accounts Receivable, Net..................................... 9,755 2,944
Investment in Joint Venture......................................... 4,458 ---
Deferred Rent Receivable............................................ 11,150 2,584
Deferred Financing Costs, Net....................................... 10,458 6,808
Prepaid Expenses and Other Assets, Net.............................. 56,820 30,490
-------------- ---------------
Total Assets................................................... $ 2,470,661 $ 1,870,183
============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage Loans Payable............................................. $ 66,065 $ 61,198
Senior Unsecured Debt.............................................. 948,595 648,994
Acquisition Facility Payable....................................... 134,800 129,400
Accounts Payable and Accrued Expenses.............................. 68,198 32,629
Rents Received in Advance and Security Deposits.................... 16,363 9,775
Distributions Payable.............................................. 27,081 22,010
-------------- ---------------
Total Liabilities.............................................. 1,261,102 904,006
-------------- ---------------
Commitments and Contingencies....................................... --- ---
Partners' Capital:
General Partner Preferred Units.................................... 336,990 144,290
General Partner Units.............................................. 689,923 677,608
Unamortized Value of General Partner Restricted Units.............. (3,312) (3,417)
Limited Partners Units............................................. 185,958 147,696
-------------- ---------------
Total Partners' Capital........................................ 1,209,559 966,177
-------------- ---------------
Total Liabilities and Partners' Capital........................ $ 2,470,661 $ 1,870,183
============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 59
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1998 1997 1996
----------- ----------- -------------
<S> <C> <C> <C>
Revenues:
Rental Income....................................................... $ 237,167 $ 77,204 $ 29,166
Tenant Recoveries and Other Income.................................. 56,219 21,362 8,421
----------- ----------- -------------
Total Revenues.................................................. 293,386 98,566 37,587
----------- ----------- -------------
Expenses:
Real Estate Taxes................................................... 48,768 16,970 6,109
Repairs and Maintenance............................................. 13,841 3,772 1,071
Property Management................................................. 11,541 3,789 1,153
Utilities........................................................... 7,667 2,723 1,047
Insurance........................................................... 794 249 271
Other............................................................... 3,162 1,680 284
General and Administrative.......................................... 12,919 5,820 4,014
Interest............................................................ 68,862 25,099 4,685
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs........................................... 851 369 196
Depreciation and Other Amortization................................. 54,209 15,873 6,310
Restructuring Charge................................................ 6,858 --- ---
----------- ----------- -------------
Total Expenses.................................................. 229,472 76,344 25,140
----------- ----------- -------------
Income from Operations Before Equity in Income of Other Real
Estate Partnerships, Equity in Income of Joint Venture and
Disposition of Interest Rate Protection Agreements.................. 63,914 22,222 12,447
Equity in Income of Other Real Estate Partnerships................... 27,583 31,297 20,130
Equity in Income of Joint Venture.................................... 45 --- ---
Disposition of Interest Rate Protection Agreements................... (8,475) 4,038 ---
----------- ----------- -------------
Income from Operations............................................... 83,067 57,557 32,577
Gain on Sales of Properties.......................................... 2,931 728 4,344
----------- ----------- -------------
Income Before Extraordinary Loss and Cumulative Effect of
Change in Accounting Principle...................................... 85,998 58,285 36,921
Extraordinary Loss................................................... --- (4,666) (2,273)
Cumulative Effect of Change in Accounting Principle.................. (719) --- ---
----------- ----------- -------------
Net Income........................................................... 85,279 53,619 34,648
Preferred Unit Distributions......................................... (26,691) (7,936) ---
----------- ----------- -------------
Net Income Available to Unitholders.................................. $ 58,588 $ 45,683 $ 34,648
=========== =========== =============
Net Income Available to Unitholders Before Extraordinary Loss and
Cumulative Effect of Change in Accounting Principle Per
Weighted Average Unit Outstanding
Basic........................................................... $ 1.34 $ 1.41 $ 1.38
=========== =========== =============
Diluted......................................................... $ 1.34 $ 1.40 $ 1.38
=========== =========== =============
Net Income Available to Unitholders Per Weighted Average
Unit Outstanding
Basic........................................................... $ 1.33 $ 1.28 $ 1.29
=========== =========== =============
Diluted......................................................... $ 1.32 $ 1.27 $ 1.29
=========== =========== =============
</TABLE>
See accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 60
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
General Unamortizeed
Partner General Value of Limited
Preferred Partner General Partner Partners
Total Units Units Restricted Units Units
----------- ----------- ----------- ---------------- ----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995........ $ 286,769 $ --- $ 269,357 $ --- $ 17,412
Contributions...................... 268,133 --- 244,269 --- 23,864
Distributions...................... (54,318) --- (50,418) --- (3,900)
Unit Conversions................... --- --- 943 --- (943)
Net Income......................... 34,648 --- 32,018 --- 2,630
----------- ----------- ----------- ---------------- ----------
Balance at December 31, 1996........ 535,232 --- 496,169 --- 39,063
Contributions...................... 458,860 144,290 199,340 --- 115,230
Issuance of General Partner
Restricted Units................ --- --- 3,655 (3,655) ---
Amortization of General Partner
Restricted Units................ 238 --- --- 238 ---
Distributions...................... (81,772) (7,936) (65,322) --- (8,514)
Unit Conversions................... --- --- 3,395 --- (3,395)
Net Income......................... 53,619 7,936 40,371 --- 5,312
----------- ----------- ----------- ---------------- ----------
Balance at December 31, 1997........ 966,177 144,290 677,608 (3,417) 147,696
Contributions...................... 279,208 192,700 37,095 --- 49,413
Issuance of General Partner
Restricted Units................ --- --- 2,345 (2,345) ---
Amortization of General Partner
Restricted Units................ 2,450 --- --- 2,450 ---
Distributions...................... (123,555) (26,691) (82,316) --- (14,548)
Unit Conversions................... --- --- 5,150 --- (5,150)
Net Income......................... 85,279 26,691 50,041 --- 8,547
----------- ----------- ----------- ---------------- ----------
Balance at December 31, 1998........ $ 1,209,559 $ 336,990 $ 689,923 $ (3,312) $ 185,958
=========== ========== =========== ================ ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 61
FIRST INDUSTRIAL, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, 1998 December 31, 1997 December 31, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ................................................... $ 85,279 $ 53,619 $ 34,648
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation ................................................. 48,889 14,660 5,115
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs .................................... 851 369 196
Other Amortization ........................................... 7,155 1,497 1,195
Disposition of Interest Rate Protection Agreements ........... -- (4,038) --
Gain on Sales of Properties .................................. (2,931) (728) (4,344)
Equity in Income of Other Real Estate Partnerships ........... (27,583) (31,297) (20,130)
Equity in Income of Joint Venture ............................ (45) -- --
Cumulative Effect of Change in Accounting Principle .......... 719 -- --
Extraordinary Loss ........................................... -- 4,666 2,273
Provision for Bad Debts ...................................... 649 779 35
Increase in Tenant Accounts Receivable and Prepaid
Expenses and Other Assets .................................. (19,039) (23,582) (965)
Increase in Deferred Rent Receivable ......................... (3,977) (1,350) (1,179)
Increase (Decrease) in Accounts Payable and Accrued
Expenses and Rents Received in Advance and Security
Deposits .................................................... 30,352 16,195 (498)
Organization Costs ........................................... -- (30) (32)
Decrease in Restricted Cash .................................. -- -- 2,557
----------- ----------- -----------
Net Cash Provided by Operating Activities ................... 120,319 30,760 18,871
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases and Additions to Investment in Real Estate ......... (492,675) (714,643) (221,282)
Contributions to Investment in Other Real Estate
Partnerships ................................................ (115,471) (419,869) (25,473)
Distributions from Investment in Other Real Estate
Partnerships ................................................ 30,664 65,956 29,110
Investment in Joint Venture .................................. (4,413) -- --
Proceeds from Sales of Investment in Real Estate ............. 77,657 16,084 14,972
Funding of Mortgage Loans Receivable ......................... -- (4,827) --
Repayment of Mortgage Loans Receivable ....................... 1,106 4,594 --
Increase in Restricted Cash .................................. (7,680) -- --
----------- ----------- -----------
Net Cash Used in Investing Activities ....................... (510,812) (1,052,705) (202,673)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Unit Contributions ........................................... 35,685 199,340 244,269
Unit Distributions ........................................... (91,796) (68,107) (47,991)
Preferred Contributions ...................................... 192,700 144,290 --
Preferred Unit Distributions ................................. (26,691) (7,936) --
Proceeds from Acquisition Facilities Payable ................. 531,000 540,100 103,523
Repayments on Acquisition Facilities Payable ................. (525,600) (415,100) (147,358)
Proceeds from Mortgage Loans Payable ......................... -- -- 36,750
Repayments on Mortgage Loans Payable ......................... (1,523) (4,652) (589)
Repayments on Construction Loans Payable ..................... -- -- (4,873)
Repayment of Promissory Notes Payable ........................ -- (9,919) --
Proceeds from Senior Unsecured Debt .......................... 299,517 983,757 --
Repayment of Senior Unsecured Debt ........................... -- (334,800) --
Proceeds from Sale of Interest Rate Protection Agreements .... -- 6,440 --
Other Proceeds from Senior Unsecured Debt .................... 2,760 2,377 --
Other Costs of Senior Unsecured Debt ......................... (11,890) (2,294) --
Debt Issuance Costs .......................................... (4,718) (10,851) (2,127)
----------- ----------- -----------
Net Cash Provided by Financing Activities ................... 399,444 1,022,645 181,604
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents ........ 8,951 700 (2,198)
Cash and Cash Equivalents, Beginning of Period ............... 4,995 4,295 6,493
----------- ----------- -----------
Cash and Cash Equivalents, End of Period ..................... $ 13,946 $ 4,995 $ 4,295
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 62
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
1. ORGANIZATION AND FORMATION OF PARTNERSHIP
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 84.0% ownership interest at December 31, 1998. The Company also
owns a preferred general partnership interest in the Operating Partnership
("Preferred Units") with an aggregate liquidation priority of $350,000. The
Company is a real estate investment trust ("REIT") as defined in the Internal
Revenue Code. The Company's operations are conducted primarily through the
Operating Partnership. The limited partners of the Operating Partnership own,
in the aggregate, approximately a 16.0% interest in the Operating Partnership at
December 31, 1998.
The Operating Partnership is the sole member of limited liability
companies (the "L.L.C.'s"), owns a 95% economic interest in FR Development
Services, Inc., as well as a 99% limited partnership interest (subject in one
case as described below to a preferred limited partnership interest) in First
Industrial Financing Partnership, L.P. (the "Financing Partnership"), First
Industrial Securities, L.P. (the "Securities Partnership"), First Industrial
Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial
Pennsylvania Partnership, L.P. (the "Pennsylvania Partnership"), First
Industrial Harrisburg Partnership, L.P. (the "Harrisburg Partnership"), First
Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD. and
First Industrial Development Services, L.P. (together, the "Other Real Estate
Partnerships"). The Operating Partnership, through wholly owned limited
liability companies in which it is the sole member, also owns a 10% equity
interest in and provides asset and property management services to a joint
venture which invests in industrial properties.
The general partners of the Other Real Estate Partnerships are separate
corporations, each with a one percent general partnership interest in the Other
Real Estate Partnerships for which it acts as a general partner. Each general
partner of the Other Real Estate Partnerships is a wholly owned subsidiary of
the Company. The general partner of the Securities Partnership, First
Industrial Securities Corporation, also owns a preferred limited partnership
interest in the Securities Partnership which entitles it to receive a fixed
quarterly distribution, and results in it being allocated income in the same
amount, equal to the fixed quarterly dividend the Company pays on its 9.5%, $.01
par value, Series A Cumulative Preferred Stock.
As of December 31, 1998, the Operating Partnership, the L.L.C.'s and FR
Development Services, Inc. (hereinafter defined as "The Consolidated Operating
Partnership") owned 885 in-service industrial properties, containing an
aggregate of approximately 57.3 million square feet (Unaudited) of gross
leasable area ("GLA"). On a combined basis, as of December 31, 1998, the Other
Real Estate Partnerships owned 102 in-service industrial properties, containing
an aggregate of approximately 12.0 million square feet (Unaudited) of GLA. Of
the 102 industrial properties owned by the Other Real Estate Partnerships at
December 31, 1998, 23 are held by the Financing Partnership, 19 are held by the
Securities Partnership, 23 are held by the Mortgage Partnership, 23 are held by
the Pennsylvania Partnership, six are held by the Harrisburg Partnership, six
are held by the Indianapolis Partnership, one is held by First Industrial
Development Services, L.P. and one is held by TK-SV, LTD.
Profits, losses and distributions of the Operating Partnership are
allocated to the general partner and the limited partners in accordance with the
provisions contained within its restated and amended partnership agreement.
F-7
<PAGE> 63
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
2. BASIS OF PRESENTATION
The consolidated financial statements of the Consolidated Operating
Partnership at December 31, 1998 and 1997 and for each of the three years ended
December 31, 1998 include the accounts and operating results of the Operating
Partnership, the L.L.C's and FR Development Services, Inc. Such financial
statements present the Operating Partnership's limited partnership interests in
each of the Other Real Estate Partnerships and the Operating Partnership's 10%
equity interest in the September 1998 Joint Venture (hereinafter defined) under
the equity method of accounting.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In order to conform with generally accepted accounting principles,
management, in preparation of the Consolidated Operating Partnership's financial
statements, is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of December 31, 1998 and 1997, and the reported amounts of
revenues and expenses for the years ended December 31, 1998, 1997 and 1996.
Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and liquid investments with
an initial maturity of three months or less. The carrying amount approximates
fair value due to the short maturity of these investments.
Investment in Real Estate and Depreciation
Purchase accounting has been applied when ownership interests in
properties were acquired for cash. The historical cost basis of properties has
been carried over when certain ownership interests were exchanged for limited
partnership units in the Operating Partnership on July 1, 1994 and purchase
accounting has been used for all other properties that were subsequently
exchanged for limited partnership units in the Operating Partnership.
Real estate assets are carried at the lower of depreciated cost or fair
value. The Consolidated Operating Partnership reviews its properties on a
quarterly basis for impairment and provides a provision if impairments are
determined. First, to determine if impairment may exist, the Consolidated
Operating Partnership reviews its properties and identifies those which have had
either an event of change or event of circumstances warranting further
assessment of recoverability. Then, the Consolidated Operating Partnership
estimates the fair value of those properties on an individual basis by
capitalizing the expected net operating income. Such amounts are then compared
to the property's depreciated cost to determine whether an impairment exists.
For properties management considers held for sale, the Consolidated Operating
Partnership ceases depreciating the properties and values the properties at the
lower of depreciated cost or fair value.
Interest expense, real estate taxes and other directly related expenses
incurred during construction periods are capitalized and depreciated commencing
with the date placed in service, on the same basis as the related assets.
Depreciation expense is computed using the straight-line method based on the
following useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and Improvements.................... 31.5 to 40
Land Improvements............................. 15
Furniture, Fixtures and Equipment............. 5 to 10
</TABLE>
Construction expenditures for tenant improvements, leasehold
improvements and leasing commissions are capitalized and amortized over the
terms of each specific lease. Repairs and maintenance are charged to expense
when incurred. Expenditures for improvements are capitalized.
F-8
<PAGE> 64
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
When assets are sold or retired, their costs and related accumulated
depreciation are removed from the accounts with the resulting gains or losses
reflected in net income or loss.
Investment in Other Real Estate Partnerships
Investment in Other Real Estate Partnerships represents the
Consolidated Operating Partnership's limited partnership interests, through the
Operating Partnership, in the Other Real Estate Partnerships. The Operating
Partnership accounts for its Investment in Other Real Estate Partnerships under
the equity method of accounting. Under the equity method of accounting, the
Operating Partnership share of earnings or losses of the Other Real Estate
Partnerships is reflected in income as earned and contributions or distributions
increase or decrease, respectively, the Operating Partnership's Investment in
Other Real Estate Partnerships as paid or received, respectively.
Investment in Joint Venture
Investment in Joint Venture represents the Operating Partnership's 10%
equity interest in the September 1998 Joint Venture (hereinafter defined). The
Consolidated Operating Partnership, through the Operating Partnership, accounts
for its Investment in Joint Venture under the equity method of accounting (as
described above).
Deferred Financing Costs
Deferred financing costs include fees and costs incurred to obtain
long-term financing. These fees and costs are being amortized over the terms of
the respective loans. Accumulated amortization of deferred financing costs was
$1,064 and $212 at December 31, 1998 and 1997, respectively. Unamortized
deferred financing costs are written-off when debt is retired before the
maturity date (see Note 13).
Revenue Recognition
Rental income is recognized on a straight-line method under which
contractual rent increases are recognized evenly over the lease term. Tenant
recovery income includes payments from tenants for taxes, insurance and other
property operating expenses and is recognized as revenue in the same period the
related expenses are incurred by the Consolidated Operating Partnership.
The Consolidated Operating Partnership provides an allowance for
doubtful accounts against the portion of tenant accounts receivable which is
estimated to be uncollectible. Accounts receivable in the consolidated balance
sheets are shown net of an allowance for doubtful accounts of $1,649 and $1,000
as of December 31, 1998 and 1997, respectively.
Income Taxes
In accordance with partnership taxation, each of the partners are
responsible for reporting their shares of taxable income or loss.
The Consolidated Operating Partnership is subject to certain state and
local income, excise and franchise taxes. The provision for such state and
local taxes has been reflected in general and administrative expense in the
statement of operations and has not been separately stated due to its
insignificance.
F-9
<PAGE> 65
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Earnings Per Unit
The Consolidated Operating Partnership has adopted the Financial
Accounting Standards Board ("FASB") Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" ("FAS 128"). Net income per weighted average
general partnership and limited partnership unit (the "Units") - basic is based
on the weighted average Units outstanding. Net income per weighted average Unit
- - diluted is based on the weighted average Units outstanding plus the effect of
the Company's in-the-money employee stock options that result in the issuance of
general partnership units. See Note 14 for the disclosure required under FAS
128.
Fair Value of Financial Instruments
The Consolidated Operating Partnership's financial instruments include
short-term investments, tenant accounts receivable, accounts payable, other
accrued expenses, mortgage loans payable, acquisition facility payable, senior
unsecured debt, certain put and call options issued in conjunction with two
initial offerings of unsecured debt and interest rate protection agreements. The
fair value of the short-term investments, tenant accounts receivable, accounts
payable and other accrued expenses was not materially different from their
carrying or contract values. See Note 7 for the fair values of the mortgage
loans payable, acquisition facility payable, senior unsecured debt, certain put
and call options issued in conjunction with two initial offerings of unsecured
debt and interest rate protection agreements.
Derivative Financial Instruments
The Consolidated Operating Partnership's, through the Operating
Partnership, interest rate protection agreements (the "Agreements") were used to
limit the interest rate on the Financing Partnership's $300,000 mortgage loan
and fix the interest rate on anticipated offerings of senior unsecured debt (see
Note 10). Receipts or payments resulting from the Agreements that were used to
limit the interest rate on the Financing Partnership's $300,000 mortgage loan
were recognized as adjustments to equity in income of Other Real Estate
Partnerships (specifically, the Financing Partnership). Upon termination of
these Agreements, the Operating Partnership recognized a gain (loss) from the
disposition of the Agreements equal to the amount of cash received or paid at
termination less the carrying value of the Agreements on the Consolidated
Operating Partnership's balance sheet. Receipts or payments that resulted from
the settlement of Agreements used to fix the interest rate on anticipated
offerings of senior unsecured debt are being amortized over the life of the
senior unsecured debt that the Agreements were used to hedge as an adjustment to
interest expense using the effective interest method (or the straight line
method if this method is not materially different from the effective interest
method). Any Agreements which no longer qualify for hedge accounting are marked
to market and any gain or loss is recognized immediately. The credit risks
associated with the Agreements were controlled through the evaluation and
monitoring of the creditworthiness of the counterparty. In the event that the
counterparty failed to meet the terms of the Agreements, the Consolidated
Operating Partnership's exposure was limited to the current value of the
interest rate differential, not the notional amount, and the Consolidated
Operating Partnership's carrying value of the Agreements on the balance sheet.
The Agreements were executed with creditworthy financial institutions.
Recent Accounting Pronouncements
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". This statement, effective
for fiscal years beginning after December 15, 1997, requires the Consolidated
Operating Partnership to report components of comprehensive income in a
financial statement that is displayed with the same prominence as other
financial
F-10
<PAGE> 66
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
statements. Comprehensive income is defined by Concepts Statement No. 6,
"Elements of Financial Statements" as the change in the equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. It includes all changes in equity during a period
except those resulting from investments by owners and distributions to owners.
The Consolidated Operating Partnership's net income available to unitholders
approximates its comprehensive income as defined in Concepts Statement No. 6,
"Elements of Financial Statements".
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"). This statement, effective for financial statements
for fiscal years beginning after December 15, 1997, requires that a public
business enterprise report financial and descriptive information about its
reportable operating segments. Generally, financial information is required
to be reported on the basis that it is used internally for evaluating segment
performance and deciding how to allocate resources to segments. The sole
business of the Consolidated Operating Partnership is the owning and the
operation of industrial properties. The Consolidated Operating Partnership
evaluates operating results and allocates resources on a property-by-property
basis. Accordingly, the Consolidated Operating Partnership has concluded it has
a single reportable segment for FAS 131 purposes. Further, all operations are
within the United States and no tenant comprises more than 10% of consolidated
revenues. Therefore, no additional disclosure due to the adoption of FAS 131 is
currently required.
In March 1998, the FASB's Emerging Issues Task Force (the "Task Force")
issued Emerging Issues Task Force Issue No. 97-11, "Accounting for Internal
Costs Relating to Real Estate Property Acquisitions" ("EITF 97-11"). EITF
97-11, effective March 19, 1998, requires that internal costs of preacquisition
activities incurred in connection with the acquisition of an operating property
should be expensed as incurred. The Task Force concluded that a property is
considered operating if, at the date of acquisition, major construction activity
is substantially completed on the property and (a) it is held available for
occupancy upon completion of tenant improvements by the acquirer or (b) it is
already income producing. The Consolidated Operating Partnership adopted EITF
97-11 as of March 19, 1998. Prior to March 19, 1998, the Consolidated Operating
Partnership capitalized internal costs of preacquisition activities
incurred in connection with the acquisition of operating properties. The
adoption of EITF 97-11 resulted in a cumulative increase of approximately $2,700
in the amount of general and administrative expense reflected in the
Consolidated Operating Partnership's consolidated statement of operations in
1998.
In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5
requires that the net unamortized balance of all start-up costs and
organizational costs be written off as a cumulative effect of a change in
accounting principle and all future start-up costs and organizational costs be
expensed. In the second quarter of 1998, the Consolidated Operating Partnership
reported a cumulative effect of a change in accounting principle in the amount
of approximately $719 to reflect the write-off of the unamortized balance of
organizational costs on the Consolidated Operating Partnership's balance sheet.
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement, effective for fiscal years beginning after June
15, 1999, establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments imbedded in
other contracts, be recorded in the balance sheet as either an asset or
liability measured at its fair value. The statement also requires that the
changes in the derivative's fair value be recognized in earnings unless specific
hedge accounting criteria are met. The Consolidated Operating Partnership is
currently assessing the impact of this new statement on its consolidated
financial position, liquidity, and results of operations.
F-11
<PAGE> 67
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
4. INVESTMENT IN OTHER REAL ESTATE PARTNERSHIPS
The Investment in Other Real Estate Partnerships reflects the Operating
Partnership's 99% limited partnership equity interest in the entities described
in Note 1 to these financial statements.
Summarized condensed financial information as derived from the
financial statements of the Other Real Estate Partnerships is presented below:
Condensed Combined Balance Sheets:
<TABLE>
<CAPTION>
Year Ended
-----------------------------------
December 31, December 31,
1998 1997
-------------- ---------------
<S> <C> <C>
ASSETS
Assets:
Investment in Real Estate, Net.............................. $ 419,117 $ 694,926
Other Assets................................................ 41,198 355,726
-------------- ---------------
Total Assets........................................... $ 460,315 $ 1,050,652
============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage Loans Payable..................................... $ 42,422 $40,000
Defeased Mortgage Loan Payable.............................. --- 300,000
Other Liabilities........................................... 5,901 23,317
-------------- ---------------
Total Liabilities...................................... 48,323 363,317
-------------- ---------------
Partners' Capital........................................... 411,992 687,335
-------------- ---------------
Total Liabilities and Partners' Capital................ $ 460,315 $ 1,050,652
============== ===============
</TABLE>
Condensed Combined Statements of Operations:
<TABLE>
<CAPTION>
Year Ended
-----------------------------------------------------------
December 31, December 31, December 31,
1998 1997 1996
-------------- --------------- ----------------
<S> <C> <C> <C>
Total Revenues................................................ $ 56,221 $ 124,406 $ 102,322
Property Expenses............................................. (13,005) (30,569) (28,933)
Interest Expense.............................................. (2,971) (24,760) (24,268)
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs.................................... (65) (2,443) (3,090)
Abandoned Pursuit Costs Charge................................ (360) --- ---
Depreciation and Other Amortization........................... (9,597) (23,310) (21,737)
Abandoned Pursuit Costs Charge................................ (360) --- ---
Loss on Disposition of Interest Rate Protection Agreements.... --- (2,608) ---
Gain on Sales of Properties................................... 2,417 4,275 ---
Extraordinary Loss............................................ --- (9,458) ---
Cumulative Effect of Change in Accounting Principle........... (858) --- ---
-------------- --------------- ----------------
Net Income.................................................... $ 31,782 $ 35,533 $ 24,294
============== =============== ================
</TABLE>
On January 2, 1998, the Financing Partnership, one of the Other Real
Estate Partnerships, distributed 173 properties with a net book value of
approximately $387,647 to the Operating Partnership.
F-12
<PAGE> 68
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
5. INVESTMENT IN JOINT VENTURE
On September 28, 1998, the Consolidated Operating Partnership, through
a wholly-owned limited liability company in which the Operating Partnership is
its sole member, entered into a joint venture arrangement (the "September 1998
Joint Venture") with an institutional investor to invest in industrial
properties. The Consolidated Operating Partnership, through wholly-owned
limited liability companies in which the Operating Partnership is the sole
member, owns a 10% equity interest in the September 1998 Joint Venture and
provides property and asset management services to the September 1998 Joint
Venture. On or after October 2000, under certain circumstances, the
Consolidated Operating Partnership has the option of purchasing all of the
properties owned by the September 1998 Joint Venture at a price determined by
the provisions of the co-ownership agreement between the Consolidated Operating
Partnership and the September 1998 Joint Venture's other partner. The
Consolidated Operating Partnership received approximately $2,348, (net of the
intercompany elimination) in acquisition, asset management and property
management fees in 1998 from the September 1998 Joint Venture. The Consolidated
Operating Partnership accounts for the September 1998 Joint Venture under the
equity method of accounting. As of December 31, 1998, the September 1998 Joint
Venture owned 130 industrial properties comprising approximately 6.3 million
square feet (unaudited) of GLA.
6. REAL ESTATE HELD FOR SALE
The Consolidated Operating Partnership has an active sales program
through which it is continually engaged in identifying and evaluating its
current portfolio for potential sales candidates in order to redeploy capital.
At December 31, 1998, the Consolidated Operating Partnership had three
industrial properties located in New Jersey comprising approximately 148,874
square feet (unaudited) of GLA held for sale, one industrial property located in
Michigan comprising approximately 32,470 square feet (unaudited) of GLA held for
sale and one industrial property located in Colorado comprising approximately
26,922 square feet (unaudited) of GLA held for sale. There can be no assurance
that such properties held for sale will be sold.
The following table discloses certain information regarding the five
industrial properties held for sale by the Consolidated Operating Partnership.
<TABLE>
YEAR ENDED
-----------------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Total Revenues $ 1,481 $ 1,013 $ 183
Operating Expenses (334) (170) (4)
Depreciation and Amortization (309) (250) (87)
--------- --------- ---------
Income from Operations $ 838 $ 593 $ 92
========= ========= =========
Net Carrying Value $ 9,720
=========
</TABLE>
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS
Mortgage Loans
On March 20, 1996, the Consolidated Operating Partnership, through the
Operating Partnership, entered into a $36,750 mortgage loan (the "CIGNA Loan")
that is collateralized by seven properties in Indianapolis, Indiana and three
properties in Cincinnati, Ohio. The CIGNA Loan bears interest at a fixed
interest rate of 7.50% and provides for monthly principal and interest payments
based on a 25-year amortization schedule. The CIGNA Loan matures on April 1,
2003. The CIGNA Loan may be prepaid only after April 1999 in exchange for the
greater of a 1% prepayment fee or a yield maintenance premium.
F-13
<PAGE> 69
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
On March 20, 1996, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a $6,424 mortgage loan and a $2,993 mortgage loan
(together, the "Assumed Loans") that are collateralized by 13 properties in
Indianapolis, Indiana and one property in Indianapolis, Indiana, respectively.
The Assumed Loans bear interest at a fixed rate of 9.25% and provide for monthly
principal and interest payments based on a 16.75-year amortization schedule.
The Assumed Loans mature on January 1, 2013. The Assumed Loans may be prepaid
only after December 1999 in exchange for the greater of a 1% prepayment fee or a
yield maintenance premium.
In conjunction with an acquisition of a portfolio of properties on
January 31, 1997, the Consolidated Operating Partnership, through the Operating
Partnership, assumed two mortgage loans in the amount of $3,800 (the "LB
Mortgage Loan I") and $705 (the "LB Mortgage Loan II"). The LB Mortgage Loan I,
which was collateralized by a property located in Long Island, New York and
provided for interest only payments prior to its maturity date of July 11,
1998, was paid off and retired by the Operating Partnership on December 19,
1997 (see Note 13). The LB Mortgage Loan II, which is collateralized by a
property located in Long Island, New York, is interest free until February,
1998, at which time the LB Mortgage Loan II bears interest at 8.00% and provides
for interest only payments prior to maturity. The LB Mortgage Loan II matures
180 days after the completion of a contingent event relating to the
environmental status of the property collateralizing the loan.
In conjunction with the acquisition of a portfolio of properties on
October 23, 1997, the Consolidated Operating Partnership, through the Operating
Partnership, assumed a mortgage loan in the amount of $4,153 (the "Acquisition
Mortgage Loan I"). The Acquisition Mortgage Loan I is collateralized by a
property in Bensenville, Illinois, bears interest at a fixed rate of 8.50% and
provides for monthly principal and interest payments based on a 15-year
amortization schedule. The Acquisition Mortgage Loan I matures on August 1,
2008. The Acquisition Mortgage Loan I may be prepaid after July 1998 in
exchange for a prepayment fee.
In conjunction with the acquisition of a portfolio of properties on
December 9, 1997, the Consolidated Operating Partnership, through the Operating
Partnership, assumed a mortgage loan in the amount of $7,997 (the "Acquisition
Mortgage Loan II"). The Acquisition Mortgage Loan II is collateralized by ten
properties in St. Charles, Louisiana, bears interest at a fixed rate of 7.75%
and provides for monthly principal and interest payments based on a 22-year
amortization schedule. The Acquisition Mortgage Loan II matures on April 1,
2006. The Acquisition Mortgage Loan II may be prepaid only after April 1999 in
exchange for the greater of a 1% prepayment fee or a yield maintenance premium.
In conjunction with the acquisition of a portfolio of properties on
December 23, 1997, the Consolidated Operating Partnership, through the Operating
Partnership, assumed a mortgage loan in the amount of $3,598 (the "Acquisition
Mortgage Loan III"). The Acquisition Mortgage Loan III is collateralized by two
properties in Houston, Texas, bears interest at a fixed interest rate of 8.875%
and provides for monthly principal and interest payments based on a 20-year
amortization schedule. The Acquisition Mortgage Loan III matures on June 1,
2003. The Acquisition Mortgage Loan III may be prepaid only after June 1998 in
exchange for the greater of a 2% prepayment fee or a yield maintenance premium.
On April 16, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $2,525
(the "Acquisition Mortgage Loan IV"). The Acquisition Mortgage Loan IV is
collateralized by one property in Baltimore, Maryland, bears interest at a fixed
rate of 8.95% and provides for monthly principal and interest payments based on
a 20-year amortization schedule. The Acquisition Mortgage Loan IV matures on
October 1, 2006. The Acquisition Mortgage Loan IV may be prepaid only after
October 2001 in exchange for the greater of a 1% prepayment fee or a yield
maintenance premium.
F-14
<PAGE> 70
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
On August 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $965
(the "Acquisition Mortgage Loan VI"). The Acquisition Mortgage Loan VI is
collateralized by one property in Portland, Oregon, bears interest at a fixed
rate of 8.875% and provides for monthly principal and interest payments based on
a 20-year amortization schedule. The Acquisition Mortgage Loan VI matures on
November 1, 2006. The Acquisition Mortgage Loan VI may be prepaid only after
September 2001 in exchange for a 3% prepayment fee.
On August 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of $1,367
(the "Acquisition Mortgage Loan VII"). The Acquisition Mortgage Loan VII is
collateralized by one property in Milwaukie, Oregon, bears interest at a fixed
rate of 9.75% and provides for monthly principal and interest payments based on
a 25-year amortization schedule. The Acquisition Mortgage Loan VII matures on
March 15, 2002. The Acquisition Mortgage Loan VII may be prepaid only after
December 2001.
On November 5, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, assumed a mortgage loan in the principal amount of
$1,348 (the "Acquisition Mortgage Loan VIII"). The Acquisition Mortgage Loan
VIII is collateralized by three properties in Richland Hills, Texas, bears
interest at a fixed rate of 8.45% and provides for monthly principal and
interest payments based on a 143-month amortization schedule. The Acquisition
Mortgage Loan VIII matures on July 1, 2009.
Senior Unsecured Debt, Net
On April 4, 1997, the Consolidated Operating Partnership, through the
Operating Partnership, entered into a $309,800 unsecured loan (the "Defeasance
Loan"). The Defeasance Loan bore interest at LIBOR plus 1% and had a scheduled
maturity of July 1, 1999. The gross proceeds from the Defeasance Loan were
contributed to the Financing Partnership which used the contribution to purchase
U.S. Government Securities as substitute collateral to execute a legal
defeasance of its $300,000 mortgage loan. The Defeasance Loan was paid off and
retired in May, 1997 (See Note 13).
On May 13, 1997, the Consolidated Operating Partnership, through the
Operating Partnership, issued $150,000 of senior unsecured debt which matures on
May 15, 2007 and bears a coupon interest rate of 7.60% (the "2007 Notes"). The
issue price of the 2007 Notes was 99.965%. Interest is paid semi-annually in
arrears on May 15 and November 15. The Consolidated Operating Partnership,
through the Operating Partnership, also entered into an interest rate
protection agreement which was used to fix the interest rate on the 2007 Notes
prior to issuance. The debt issue discount and the settlement amount of the
interest rate protection agreement are being amortized over the life of the
2007 Notes as an adjustment to the interest expense. The 2007 Notes contain
certain covenants including limitation on incurrence of debt and debt service
coverage.
On May 13, 1997, the Consolidated Operating Partnership, through the
Operating Partnership, issued $100,000 of senior unsecured debt which matures on
May 15, 2027, and bears a coupon interest rate of 7.15% (the "2027 Notes"). The
issue price of the 2027 Notes was 99.854%. The 2027 Notes are redeemable, at
the option of the holders thereof, on May 15, 2002. Interest is paid
semi-annually in arrears on May 15 and November 15. The Consolidated Operating
Partnership, through the Operating Partnership, also entered into an interest
rate protection agreement which was used to fix the interest rate on the 2027
Notes prior to issuance. The debt issue discount and the settlement amount of
the interest rate protection agreement are being amortized over the life of the
2027 Notes as an adjustment to interest expense. The 2027 Notes contain certain
covenants including limitation on incurrence of debt and debt service coverage.
F-15
<PAGE> 71
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
On May 22, 1997, the Consolidated Operating Partnership, through the
Operating Partnership, issued $100,000 of senior unsecured debt which matures on
May 15, 2011 and bears a coupon interest rate of 7.375% (the "2011 Notes"). The
issue price of the 2011 Notes was 99.348%. Interest is paid semi-annually in
arrears on May 15 and November 15. The 2011 Notes are redeemable, at the option
of the holder thereof, on May 15, 2004 (the "Put Option"). The Consolidated
Operating Partnership received approximately $1,781 of proceeds from the holder
of the 2011 Notes as consideration for the Put Option. The Consolidated
Operating Partnership amortizes the Put Option amount over the life of the Put
Option as an adjustment to interest expense. The Consolidated Operating
Partnership, through the Operating Partnership, also entered into an interest
rate protection agreement which was used to fix the interest rate on the 2011
Notes prior to issuance. The debt issue discount and the settlement amount of
the interest rate protection agreement are being amortized over the life of the
2011 Notes as an adjustment to interest expense. The 2011 Notes contain certain
covenants including limitation on incurrence of debt and debt service coverage.
On November 20, 1997, the Consolidated Operating Partnership, through
the Operating Partnership, issued $50,000 of senior unsecured debt which matures
on November 21, 2005 and bears a coupon interest rate of 6.90% (the "2005
Notes"). The issue price of the 2005 Notes was 100%. Interest is paid
semi-annually in arrears on May 21 and November 21. The 2005 Notes contain
certain covenants including limitation on incurrence of debt and debt service
coverage.
On November 24, 1997, the Consolidated Operating Partnership, through
the Operating Partnership, entered into a $25,000 unsecured loan (the "November
1997 Unsecured Loan"). The November 1997 Unsecured Loan bore interest at LIBOR
plus .80% and had a scheduled maturity date of December 31, 1997. The November
1997 Unsecured Loan was paid off and retired on December 5, 1997 (see Note 13).
On December 8, 1997, the Consolidated Operating Partnership, through
the Operating Partnership, issued $150,000 of senior unsecured debt which
matures on December 1, 2006 and bears a coupon interest rate of 7.00% (the "2006
Notes"). The issue price of the 2006 Notes was 100%. Interest is paid
semi-annually in arrears on June 1 and December 1. The Consolidated Operating
Partnership, through the Operating Partnership, also entered into an interest
rate protection agreement which was used to fix the interest rate on the 2006
Notes prior to issuance. The settlement amount of the interest rate protection
agreement is being amortized over the life of the 2006 Notes as an adjustment to
interest expense. The 2006 Notes contain certain covenants including limitation
on incurrence of debt and debt service coverage.
On December 8, 1997, the Consolidated Operating Partnership, through
the Operating Partnership, issued $100,000 of senior unsecured debt which
matures on December 1, 2017 and bears a coupon interest rate of 7.50% (the "2017
Notes"). The issue price of the 2017 Notes was 99.808%. Interest is paid
semi-annually in arrears on June 1 and December 1. The Consolidated Operating
Partnership will amortize the debt issue discount over the life of the 2017
Notes as an adjustment to interest expense. The 2017 Notes may be redeemed at
any time at the option of the Consolidated Operating Partnership, in whole or in
part, at a redemption price equal to the sum of the principal amount of the 2017
Notes being redeemed plus accrued interest thereon to the redemption date and
any make-whole amount, as defined in the Prospectus Supplement Relating to the
2017 Notes.
On March 31, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, issued $100,000 of Dealer remarketable securities which
mature on April 5, 2011 and bear a coupon interest rate of 6.50% (the "2011
Drs."). The issue price of the 2011 Drs. was 99.753%. Interest is paid
semi-annually in arrears on April 5 and October 5. The 2011 Drs. are callable
(the "Call Option"), at the option of J.P. Morgan Securities, Inc., as
Remarketing Dealer (the "Remarketing Dealer"), on April 5, 2001 (the
"Remarketing Date"). The Consolidated Operating Partnership received
approximately $2,760 of proceeds from the Remarketing Dealer as consideration
for the Call
F-16
<PAGE> 72
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
Option. The Consolidated Operating Partnership will amortize the proceeds over
the life of the Call Option as an adjustment to interest expense. If the
holder of the Call Option calls the 2011 Drs. and elects to remarket the 2011
Drs., then after the Remarketing Date, the interest rate on the 2011 Drs. will
be reset at a fixed rate until April 5, 2011 based upon a predetermined formula
as disclosed in the related Prospectus Supplement. If the Remarketing Dealer
elects not to remarket the 2011 Drs., then the Consolidated Operating
Partnership will be required to repurchase, on the Remarketing Date, any 2011
Drs. that have not been purchased by the Remarketing Dealer at 100% of the
principal amount thereof, plus accrued and unpaid interest, if any. The
Consolidated Operating Partnership also settled an interest rate protection
agreement, in the notional amount of $100,000, which was used to fix the
interest rate on the 2011 Drs. prior to issuance. The debt issue discount and
the settlement amount of the interest rate protection agreement are being
amortized over the life of the 2011 Drs. as an adjustment to interest expense.
The 2011 Drs. contain certain covenants including limitations on incurrence of
debt and debt service coverage.
On July 14, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, issued $200,000 of senior unsecured debt which matures on
July 15, 2028 and bears a coupon interest rate of 7.60% (the "2028 Notes"). The
issue price of the 2028 Notes was 99.882%. Interest is paid semi-annually in
arrears on January 15 and July 15. The Consolidated Operating Partnership,
through the Operating Partnership, also settled interest rate protection
agreements, in the notional amount of $150,000, which were used to fix the
interest rate on the 2028 Notes prior to issuance. The debt issue discount and
the settlement amount of the interest rate protection agreements are being
amortized over the life of the 2028 Notes as an adjustment to the interest
expense. The 2028 Notes contain certain covenants including limitation on
incurrence of debt and debt service coverage. Approximately $50,000 of the 2028
Notes was purchased, through a broker/dealer, by an entity in which a Director
of the Company owns greater than a ten percent interest.
Acquisition Facilities
In connection with the Initial Offering, the Consolidated Operating
Partnership, through the Operating Partnership, entered into a $100,000
collateralized revolving credit facility (the "1994 Acquisition Facility").
During the quarter ended June 30, 1995, the capacity of the 1994 Acquisition
Facility was increased to $150,000. Borrowings under the 1994 Acquisition
Facility bore interest at a floating rate equal to LIBOR plus 2.00% or a
"Corporate Base Rate" plus .50%, at the Operating Partnership's election.
Effective July 12, 1996, the lenders reduced the interest rate to LIBOR plus
1.75%. In December 1996, the Operating Partnership terminated the 1994
Acquisition Facility (see Note 13) and entered into a $200,000 unsecured
revolving credit facility (the "1996 Unsecured Acquisition Facility") which
initially bore interest at LIBOR plus 1.10% or a "Corporate Base Rate" plus .25%
and provided for interest only payments until the maturity date. In December
1997, the Operating Partnership terminated the 1996 Unsecured Acquisition
Facility (see Note 13) and entered into a $300,000 unsecured revolving credit
facility (the "1997 Unsecured Acquisition Facility") which initially bears
interest at LIBOR plus .80% or a "Corporate Base Rate", at the Operating
Partnership's election, and provides for interest only payments until maturity.
The Operating Partnership may borrow under the facility to finance the
acquisition of additional properties and for other corporate purposes, including
to obtain additional working capital. The 1997 Unsecured Acquisition Facility
contains certain financial covenants relating to debt service coverage, market
value net worth, dividend payout ratio and total funded indebtedness.
In December 1995, the Consolidated Operating Partnership, through the
Operating Partnership, entered into a $24,219 collateralized revolving credit
facility (the "1995 Credit Line"). The 1995 Credit Line bore interest at a
floating rate of LIBOR plus 2.45%. The Operating Partnership terminated the 1995
Credit Line in February 1996 (see Note 13).
F-17
<PAGE> 73
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
In May 1996, the Consolidated Operating Partnership, through the
Operating Partnership, entered into a $10,000 collateralized revolving credit
facility (the "1996 Credit Line"). The 1996 Credit Line bore interest at a
floating rate from LIBOR plus 2.45% to LIBOR plus 2.75%, depending on the term
of the interest rate option. The Operating Partnership terminated the 1995
Credit Line in November 1996 (see Note 13).
In September 1996, the Consolidated Operating Partnership, through the
Operating Partnership, entered into a $40,000 revolving credit facility (the
"1996 Acquisition Facility"). Borrowings under the 1996 Acquisition Facility
bore interest at a floating rate equal to LIBOR plus 2.00% or a "Corporate Base
Rate" plus .50%, at the Operating Partnership's election. The Operating
Partnership terminated the 1996 Acquisition Facility in November 1996 (see Note
13).
The following table discloses certain information regarding the
Consolidated Operating Partnership's mortgage loans, senior unsecured debt and
acquisition facility payable:
<TABLE>
<CAPTION>
OUTSTANDING BALANCE AT ACCRUED INTEREST PAYABLE AT INTEREST RATE AT
-------------------------- --------------------------- ----------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, MATURITY
1998 1997 1998 1997 1998 DATE
------------ ------------- -------------- ------------ ---------------- ---------
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE LOANS PAYABLE, NET
CIGNA Loan ....................... $ 35,220 $ 35,813 $ -- $ -- 7.500% 4/01/03
Assumed Loans .................... 8,661 8,950 -- -- 9.250% 1/01/13
LB Mortgage Loan II ............. 705 705 -- -- 8.000% (1)
Acquisition Mortgage Loan I ...... 3,864 4,135 -- 29 8.500% 8/01/08
Acquisition Mortgage Loan II ..... 7,828 7,997 51 52 7.750% 4/01/06
Acquisition Mortgage Loan III .... 3,485 3,598 26 27 8.875% 6/01/03
Acquisition Mortgage Loan IV ..... 2,488 -- 19 -- 8.950% 10/01/06
Acquisition Mortgage Loan VI ..... 1,024(2) -- 7 -- 8.875% 11/01/06
Acquisition Mortgage Loan VII .... 1,450(2) -- 11 -- 9.750% 3/15/02
Acquisition Mortgage Loan VIII ... 1,340 -- 9 -- 8.450% 7/01/09
--------- --------- --------- ---------
Total ............................ $ 66,065 $ 61,198 $ 123 $ 108
========= ========= ========= =========
SENIOR UNSECURED DEBT, NET
2005 Notes ....................... $ 50,000 $ 50,000 $ 383 $ 393 6.900% 11/21/05
2006 Notes ....................... 150,000 150,000 875 671 7.000% 12/01/06
2007 Notes ....................... 149,956(4) 149,951 1,457 1,457 7.600% 5/15/07
2011 Notes ....................... 99,424(4) 99,377 942 942 7.375% 5/15/11(5)
2017 Notes ....................... 99,818(4) 99,809 625 479 7.500% 12/01/17
2027 Notes ....................... 99,862(4) 99,857 914 914 7.150% 5/15/27(6)
2028 Notes ....................... 199,768(4) -- 7,051 -- 7.600% 7/15/28
2011 Drs ......................... 99,767(4) -- 1,553 -- 6.500%(8) 4/05/11(7)
--------- --------- --------- ---------
Total ............................ $ 948,595 $ 648,994 $ 13,800 $ 4,856
========= ========= ========= =========
ACQUISITION FACILITY PAYABLE
1997 Unsecured Acquisition
Facility ......................... $ 134,800 $ 129,400 $ 690 $ 297 6.493% 4/30/01
========= ========= ========= =========
</TABLE>
(1) The maturity date of the LB Mortgage Loan II is based on a contingent event
relating to the environmental status of the property collateralizing the
loan.
(2) The Acquisition Mortgage Loan VI and the Acquisition Mortgage Loan VII
are net of unamortized premiums of $68 and $100, respectively.
(3) The 1994 Defeased Mortgage Loan was paid off and retired on January 2,
1998.
(4) The 2007 Notes, 2011 Notes, 2017 Notes, 2027 Notes, 2028 Notes and the
2011 Drs. are net of unamortized discounts of $44, $576, $182, $138, $232
and $233, respectively.
(5) The 2011 Notes are redeemable at the option of the holder thereof, on May
15, 2004.
(6) The 2027 Notes are redeemable at the option of the holders thereof, on
May 15, 2002.
(7) The 2011 Drs. are required to be redeemed by the Operating Partnership on
April 5, 2001 if the Remarketing Dealer elects not to remarket the 2011
Drs.
(8) The 2011 Drs. bear interest at an annual rate of 6.50% to the Remarketing
Date. If the holder of the Call Option calls the 2011 Drs. and elects to
remarket the 2011 Drs., then after the Remarketing Date, the interest rate
on the 2011 Drs. will be reset at a fixed rate until April 5, 2011 based on
a predetermined formula as disclosed in the related Prospectus Supplement.
F-18
<PAGE> 74
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
7. MORTGAGE LOANS, NET, SENIOR UNSECURED DEBT, NET, ACQUISITION FACILITIES
PAYABLE AND INTEREST RATE PROTECTION AGREEMENTS, CONTINUED
Fair Value
At December 31, 1998 and 1997, the fair value of the Consolidated
Operating Partnership's mortgage loans payable, senior unsecured debt,
acquisition facility payable, Put Option, Call Option and interest rate
protection agreements were as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
-------------------------- -----------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Mortgage Loans Payable......... $ 66,065 $ 68,384 $ 61,198 $ 65,031
Senior Unsecured Debt.......... 948,595 925,320 648,994 666,954
Acquisition Facility Payable... 134,800 134,800 129,400 129,400
Put Option and Call Option..... 3,438 13,200 1,621 3,720
Interest Rate Protection
Agreements................... --- --- --- 4,974
------------ ----------- ------------ ------------
Total.......................... $ 1,152,898 $ 1,141,704 $ 841,213 $ 870,079
============ =========== ============ ============
</TABLE>
The following is a schedule of maturities of the mortgage loans, senior
unsecured debt and acquisition facility payable for the next five years ending
December 31, and thereafter:
<TABLE>
<CAPTION>
Amount
----------
<S> <C>
1999 $ 1,751
2000 1,901
2001 136,864
2002 3,464
2003 36,620
Thereafter 969,392
----------
Total $1,149,992
==========
</TABLE>
The maturity date of the LB Mortgage Loan II is based on a contingent
event. As a result, the LB Mortgage Loan II is not included in the preceding
table.
Interest Rate Protection Agreements
On July 1, 1995, the Consolidated Operating Partnership, through the
Operating Partnership, entered into interest rate swap agreements (the "1995
Interest Rate Protection Agreements") with a notional value of $300,000, which,
together with the interest rate protection agreements the Financing Partnership
owned, effectively fixed the annual interest rate on the Financing Partnership's
$300,000 mortgage loan at 6.97% for six years through June 30, 2001. The costs
of the 1995 Interest Rate Protection Agreements had been capitalized and were
being amortized over the respective terms of the 1995 Interest Rate
Protection Agreements. On May 16, 1997, the Operating Partnership sold the 1995
Interest Rate Protection Agreements (See Note 10).
F-19
<PAGE> 75
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
8. PARTNERS' CAPITAL
The Operating Partnership has issued general partnership units and
limited partnership units (together, the "Units") and preferred general
partnership units. The general partnership units resulted from capital
contributions from the Company. The limited partnership units are issued in
conjunction with the acquisition of certain properties (See discussion below).
Subject to lock-up periods and certain adjustments, limited partnership units
are generally convertible into common stock, par value $.01, of the Company on a
one-for-one basis. The preferred general partnership units result from preferred
capital contributions from the Company. The Operating Partnership will be
required to make all required distributions on the preferred general partnership
units prior to any distribution of cash or assets to the holders of the general
and limited partnership units except for distributions required to enable the
Company to maintain its qualification as a REIT.
Contributions
On April 23, 1998, the Company issued, in a private placement,
1,112,644 shares of $.01 par value Common Stock (the "April 1998 Equity
Offering"). The net proceeds of approximately $33,141 received from the April
1998 Equity Offering were contributed to the Operating Partnership in exchange
for 1,112,644 Units in the Operating Partnership and are reflected in the
Consolidated Operating Partnership's financial statements as a general partner
contribution (the "April 1998 Capital Contribution").
During 1998, the Operating Partnership issued 1,515,983 Units valued,
in the aggregate, at $49,413 in exchange for interests in certain properties.
These contributions are reflected in the Consolidated Operating Partnership's
financial statements as limited partners contributions.
During 1998, certain employees of the Company exercised 108,500
employee stock options. Gross proceeds to the Company approximated $2,543. The
gross proceeds from the option exercises were contributed to the Operating
Partnership in exchange for Units and are reflected in the Consolidated
Operating Partnership's financial statements as a general partner contribution.
On September 16, 1997, the Company issued 637,440 shares of $.01 par
value common stock (the "September 1997 Equity Offering"). The net proceeds of
the $18,900 received from the September 1997 Equity Offering were contributed to
the Operating Partnership in exchange for 637,440 Units in the Operating
Partnership and are reflected in the Consolidated Operating Partnership's
financial statements as a general partner contribution (the "September 1997
Capital Contribution").
On October 15, 1997, the Company issued 5,400,000 shares of $.01 par
value common stock (the "October 1997 Equity Offering"). The net proceeds of
$176,556 received from the October 1997 Equity Offering were contributed to the
Operating Partnership in exchange for 5,400,000 Units and are reflected in the
Consolidated Operating Partnership's financial statements as a general partner
contribution (the "October 1997 Capital Contribution").
During 1997, the Operating Partnership issued 3,634,148 Units valued,
in the aggregate, at $115,231 in exchange for interests in certain properties.
These contributions are reflected in the Consolidated Operating Partnership's
financial statements as limited partners contributions.
During 1997, certain employees of the Company exercised 168,000
employee stock options. Gross proceeds to the Company approximated $3,883. The
gross proceeds from the option exercises were contributed to the Operating
Partnership in exchange for Units and are reflected in the Consolidated
Operating Partnership's financial statements as a general partner contribution.
On February 2, 1996, the Company issued 5,175,000 shares of $.01 par
value common stock (the "February 1996 Equity Offering") inclusive of the
underwriters' over-allotment option. The net proceeds of $106,343 received from
the February 1996 Equity Offering were contributed to the Operating Partnership
in exchange for 5,175,000 Units and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner contribution.
F-20
<PAGE> 76
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
8. PARTNERS' CAPITAL, CONTINUED
On October 25, 1996, the Company issued 5,750,000 shares of $.01 par
value common stock (the "October 1996 Equity Offering") inclusive of the
underwriters' over-allotment option. The net proceeds of $137,697 received from
the October 1996 Equity Offering were contributed to the Operating Partnership
in exchange for 5,750,000 Units and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner contribution.
During 1996, the Operating Partnership issued 1,038,712 Units valued,
in the aggregate, at $23,863 in exchange for interests in certain properties.
These contributions are reflected in the Consolidated Operating Partnership's
financial statements as limited partners contributions.
During 1996, certain employees of the Company exercised 16,000 employee
stock options. Gross proceeds to the Company approximated $229. The gross
proceeds from the option exercises were contributed to the Operating Partnership
in exchange for Units and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner contribution.
Preferred Contributions:
On February 4, 1998, the Company issued 5,000,000 Depositary Shares,
each representing 1/100th of a share of the Company's 7.95%, $.01 par value,
Series D Cumulative Preferred Stock (the "Series D Preferred Stock"), at an
initial offering price of $25 per Depositary Share. The net proceeds of
$120,562 received from the Series D Preferred Stock were contributed to the
Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units
(the "Series D Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner preferred unit
contribution.
On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each
representing 1/100th of a share of the Company's 7.90%, $.01 par value, Series E
Cumulative Preferred Stock (the "Series E Preferred Stock"), at an initial
offering price of $25 per Depositary Share. The net proceeds of $72,138
received from the Series E Preferred Stock were contributed to the Operating
Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the
"Series E Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner preferred unit
contribution.
On May 14, 1997, the Company issued 4,000,000 Depositary Shares, each
representing 1/100th of a share of the Company's 8 3/4%, $.01 par value, Series
B Cumulative Preferred Stock (the "Series B Preferred Stock"), at an initial
offering price of $25 per Depositary Share. The net proceeds of $96,292
received from the Series B Preferred Stock were contributed to the Operating
Partnership in exchange for 8 3/4% Series B Cumulative Preferred Units (the
"Series B Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner preferred unit
contribution.
On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each
representing 1/100th of a share of the Company's 8 5/8%, $.01 par value, Series
C Cumulative Preferred Stock (the "Series C Preferred Stock"), at an initial
offering price of $25 per Depositary Share. The net proceeds of $47,997
received from the Series C Preferred Stock were contributed to the Operating
Partnership in exchange for 8 5/8% Series C Cumulative Preferred Units (the
"Series C Preferred Units") and are reflected in the Consolidated Operating
Partnership's financial statements as a general partner preferred unit
contribution.
Distributions:
On January 20, 1998, the Operating Partnership paid a fourth quarter
1997 distribution of $.53 per Unit, totaling approximately $22.0 million. On
April 20, 1998, the Operating Partnership paid a first quarter 1998 distribution
of $.53 per Unit, totaling approximately $22.5 million. On July 20, 1998, the
Operating Partnership paid a second quarter 1998 distribution of $.53 per Unit,
totaling approximately $23.6 million. On October 19, 1998, the Operating
Partnership paid a third quarter 1998 distribution of $.53 per Unit, totaling
approximately $23.7 million. On January 19, 1999, the Operating Partnership paid
a fourth quarter 1998 distribution of $.60 per Unit, totaling approximately
$27.1 million.
On March 31, 1998, the Operating Partnership paid a first quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
March 31, 1998, the Operating Partnership paid a first quarter distribution of
$53.906 per unit on its Series C Cumulative Preferred Units. On March 31, 1998,
the Operating Partnership paid a period prorated first quarter distribution of
$30.365 per unit on its Series D Preferred Units. The preferred unit
distributions paid on March 31, 1998 totaled, in the aggregate, approximately
$4.8 million. On March 31, 1998, the Operating Partnership accrued a period
prorated first quarter distribution of $7.13194 per Series E Preferred Unit,
totaling $.2 million for the three months ended March 31, 1998.
On June 30, 1998, the Operating Partnership paid a second quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
June 30, 1998, the Operating Partnership paid a second quarter distribution of
$53.906 per unit on its Series C Cumulative Preferred Units. On June 30, 1998,
the Operating Partnership paid a second quarter distribution of $49.687 per unit
on its Series D Preferred Units. On June 30, 1998, the Operating Partnership
paid a period prorated first quarter distribution and a second quarter
distribution totaling $56.5069 per unit on its Series E Preferred Units. The
preferred unit distributions paid on June 30, 1998 totaled, in the aggregate,
approximately $7.4 million.
On September 30, 1998, the Operating Partnership paid a third quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
September 30, 1998, the Operating Partnership paid a third quarter distribution
of $53.906 per unit on its Series C Cumulative Preferred Units. On September 30,
1998, the Operating Partnership paid a third quarter distribution of $49.687 per
unit on its Series D Preferred Units. On September 30, 1998, the Operating
Partnership paid a third quarter distribution of $49.375 per unit on its Series
E Preferred Units. The preferred unit distributions paid on September 30, 1998
totaled, in the aggregate, approximately $7.2 million.
On December 31, 1998, the Operating Partnership paid a fourth quarter
distribution of $54.688 per unit on its Series B Cumulative Preferred Units. On
December 31, 1998, the Operating Partnership paid a fourth quarter distribution
of $53.906 per unit on its Series C Cumulative Preferred Units. On December 31,
1998, the Operating Partnership paid a fourth quarter distribution of $49.687
per unit on its Series D Preferred Units. On December 31, 1998, the Operating
Partnership paid a fourth quarter distribution of $49.375 per unit on its Series
E Preferred Units. The preferred unit distributions paid on December 31, 1998
totaled, in the aggregate, approximately $7.2 million.
F-21
<PAGE> 77
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
9. ACQUISITION AND DEVELOPMENT OF REAL ESTATE
In 1998, the Consolidated Operating Partnership acquired 220 industrial
properties comprising approximately 10.9 million square feet (unaudited) of GLA
for a total purchase price of approximately $446,976 and completed the
development of seven properties comprising approximately 1.0 million square feet
(unaudited) of GLA at a cost of approximately $37,194.
In 1997, the Consolidated Operating Partnership acquired 380 industrial
properties comprising approximately 21.0 million square feet (unaudited) of GLA
for a total purchase price of approximately $817,058 and completed the
development of eight properties comprising approximately 1.2 million square feet
(unaudited) of GLA at a cost of approximately $38,008.
In 1996, the Consolidated Operating Partnership acquired 111 industrial
properties comprising approximately 9.4 million square feet (unaudited) of GLA
for a total purchase price of approximately $237,031 and completed the
development of two properties comprising approximately .2 million square feet
(unaudited) of GLA at a cost of approximately $8,930.
10. DISPOSITION OF INTEREST RATE PROTECTION AGREEMENTS
In November 1998, the Consolidated Operating Partnership, through the
Operating Partnership, settled its remaining interest rate protection agreement
which was scheduled to expire on January 4, 1999. This agreement was entered
into in December 1997 in anticipation of 1998 senior unsecured debt offerings.
Due to the changing market conditions and the Consolidated Operating
Partnership's expectation that it will not issue debt securities associated with
the interest rate protection agreement, the Consolidated Operating Partnership
settled its position in the interest rate protection agreement. As a result,
the Consolidated Operating Partnership has recognized an expense of
approximately $8,475 associated with the termination of the interest rate
protection agreement in the fourth quarter of 1998.
In May 1997, the Consolidated Operating Partnership, through the
Operating Partnership, sold the 1995 Interest Rate Protection Agreements. The
gross proceeds from the sale of the Interest Rate Protection Agreements were
approximately $6,440. The gain on disposition of the interest rate protection
agreements totaled approximately $4,038.
11. RESTRUCTURING CHARGE
In connection with management's plan to improve operating efficiencies
and reduce costs, the Consolidated Operating Partnership recorded a
restructuring charge of approximately $6,858 in the fourth quarter of 1998. The
restructuring charge is comprised of severance costs, of which approximately
$1,206 is non-cash relating to immediate vesting of restricted stock. The cash
portion of the severance costs were paid in fiscal year 1999.
12. SALES OF REAL ESTATE
In 1998, the Consolidated Operating Partnership, through the Operating
Partnership, sold 36 in-service properties and several land parcels. Gross
proceeds from these sales totaled approximately $77,657. The gain on sales
totaled approximately $2,931.
In 1997, the Consolidated Operating Partnership, through the Operating
Partnership, sold three in-service properties, one property held for
redevelopment and land parcels. Gross proceeds from these sales totaled
approximately $16,083. The gain on sales totaled approximately $728.
F-22
<PAGE> 78
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
12. SALES OF REAL ESTATE, CONTINUED
In 1996, the Consolidated Operating Partnership, through the Operating
Partnership, sold six in-service properties. Gross proceeds from these sales
totaled approximately $14,972. The gain on sales totaled approximately $4,344.
13. EXTRAORDINARY ITEMS
In 1997, the Consolidated Operating Partnership, through the Operating
Partnership, terminated the LB Mortgage I, the Defeasance Loan, the November
1997 Unsecured Loan and the 1996 Unsecured Acquisition Facility before their
contractual maturity date. As a result of these early retirements, the
Consolidated Operating Partnership recorded an extraordinary loss of $4,666
comprised of the write off of unamortized deferred financing fees, legal costs
and other expenses.
In 1996, the Consolidated Operating Partnership, through the Operating
Partnership, terminated the 1994 Acquisition Facility, the 1995 Credit Line, the
1996 Credit Line and the 1996 Acquisition Facility before their contractual
maturity date. As a result of these early retirements, the Consolidated
Operating Partnership recorded an extraordinary loss of $2,273 comprised of a
prepayment fee, the write-off of unamortized deferred financing fees, legal
costs and other expenses.
F-23
<PAGE> 79
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
14. EARNINGS PER UNIT
In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("FAS 128"), effective for financial
statements ending after December 15, 1997. As required by this statement, the
Consolidated Operating Partnership adopted the new standard for computing and
presenting earnings per Unit (EPU) for the year ended December 31, 1997, and for
all prior-periods' EPU data is presented herein. The computation of basic and
diluted EPU, as prescribed by FAS 128, is presented below:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1998 1997 1996
----------- ------------ --------------
<S> <C> <C> <C>
Numerator:
- ----------
Income Before Extraordinary Loss and Cumulative Effect of
Change in Accounting Principle................................... $ 85,998 $ 58,285 $ 36,921
Less: Preferred Unit Distributions............................... (26,691) (7,936) ---
----------- ------------ --------------
Net Income Available to Unitholders Before Extraordinary Loss-
For Basic and Diluted EPS........................................ 59,307 50,349 36,921
Extraordinary Loss................................................. --- (4,666) (2,273)
Cumulative Effect of Change in Accounting Principle................ (719) --- ---
----------- ------------ --------------
Net Income Available to Unitholders- For Basic and
Diluted EPS...................................................... $ 58,588 $ 45,683 $ 34,648
=========== ============ ==============
Denominator:
- ------------
Weighted Average Units Outstanding at December 31, 1998, 1997
and 1996, respectively-Basic..................................... 44,099,879 35,681,562 26,762,731
Effect of Dilutive Securities:
Employee Common Stock Options of the Company that result in
the issuance of general partnership units....................... 182,515 305,686 86,447
----------- ------------ --------------
Weighted Average Units Outstanding at December 31, 1998, 1997
and 1996, respectively-Diluted................................... 44,282,394 35,987,248 26,849,178
=========== ============ ==============
Basic EPS:
- ----------
Net Income Available to Unitholders Before Extraordinary Loss
and Cumulative Effect of Change in Accounting Principle.......... $ 1.34 $ 1.41 $ 1.38
=========== ============ ==============
Extraordinary Loss................................................. $ --- $ (.13) $ (.09)
=========== ============ ==============
Cumulative Effect of Change in Accounting Principle................ $ (.02) $ --- $ ---
=========== ============ ==============
Net Income Available to Unitholders................................ $ 1.33 $ 1.28 $ 1.29
=========== ============ ==============
Diluted EPS:
- ------------
Net Income Available to Unitholders Before Extraordinary Loss
and Cumulative Effect of Change in Accounting Principle.......... $ 1.34 $ 1.40 $ 1.38
=========== ============ ==============
Extraordinary Loss................................................. $ --- $ (.13) $ (.09)
=========== ============ ==============
Cumulative Effect of Change in Accounting Principle................ $ (.02) $ --- $ ---
=========== ============ ==============
Net Income Available to Unitholders................................ $ 1.32 $ 1.27 $ 1.29
=========== ============ ==============
</TABLE>
F-24
<PAGE> 80
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
15. FUTURE RENTAL REVENUES
The Consolidated Operating Partnership's properties are leased to
tenants under net and semi-net operating leases. Minimum lease payments
receivable, excluding tenant reimbursements of expenses, under noncancelable
operating leases in effect as of December 31, 1998 are approximately as follows:
<TABLE>
<S> <C>
1999 $ 242,260
2000 196,478
2001 154,143
2002 116,471
2003 85,129
Thereafter 201,262
--------------
Total $ 995,743
==============
</TABLE>
16. EMPLOYEE BENEFIT PLANS
The Company maintains two stock incentive plans, (the "Stock Incentive
Plans"), which are administered by the Compensation Committee of the Board of
Directors of the Company. The exercise of employee stock options results in a
contribution from the general partner to the Operating Partnership. Only
officers and other employees of the Company and its affiliates generally are
eligible to participate in the Stock Incentive Plans. However, independent
Directors of the Company receive automatic annual grants of options to purchase
10,000 shares at a per share exercise price equal to the fair market value of a
share on the date of grant.
The Stock Incentive Plans authorize (i) the grant of stock options that
qualify as incentive stock options under Section 422 of the Code, (ii) the grant
of stock options that do not so qualify, (iii) restricted stock awards, (iv)
performance share awards and (v) dividend equivalent rights. The exercise price
of stock options will be determined by the Compensation Committee, but may not
be less than 100% of the fair market value of the shares on the date of grant.
Special provisions apply to awards granted under the Stock Incentive Plans in
the event of a change in control in the Company. As of December 31, 1998, stock
options covering 5.0 million shares were outstanding and stock options covering
2.2 million shares were available under the Stock Incentive Plans. The
outstanding stock options generally vest over one to ten year periods and have
lives of ten years. Stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
Weighted Average
Exercise Price Exercise Price
Share per Share per Share
---------- ------------------ ------------------
<S> <C> <C> <C>
Outstanding at December 31,1995................ 858,000 $22.37 $ 18.25-$ 23.50
Granted...................................... 263,500 $22.94 $ 22.75-$ 25.63
Exercised.................................... (16,000) $23.50 $23.50
Expired or Terminated........................ (12,000) $23.50 $23.50
----------
Outstanding at December 31, 1996............... 1,093,500 $22.49 $ 18.25-$ 25.63
Granted...................................... 538,000 $30.32 $ 28.50-$30.375
Exercised or Converted....................... (300,000) $22.50 $ 18.25-$ 23.50
----------
Outstanding at December 31, 1997............... 1,331,500 $25.67 $ 18.25-$30.375
Granted...................................... 5,248,200 $34.92 $ 24.00-$ 35.81
Exercised or Converted....................... (165,500) $23.14 $ 20.25-$ 30.38
Expired or Terminated........................ (1,417,200) $35.42 $ 22.75-$ 35.81
----------
Outstanding at December 31, 1998............... 4,997,000 $32.70 $ 18.25-$ 35.81
==========
</TABLE>
F-25
<PAGE> 81
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
16. EMPLOYEE BENEFIT PLANS, CONTINUED
The following table summarizes currently outstanding and exercisable
options as of December 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------ ------------------------------
Weighted
Average Weighted Weight
Number Remaining Average Number Average
Range of Exercise Price Outstanding Contractual Life Exercise Price Exercisable Exercise Price
- ----------------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$ 18.25 - $ 25.63 685,000 6.53 $22.59 685,000 $22.59
$ 28.50 - $ 35.81 4,312,000 9.01 $34.30 870,350 $30.66
</TABLE>
The Consolidated Operating Partnership applies Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting
for the Company's Stock Incentive Plans. Accordingly, no compensation expense
has been recognized in the consolidated statements of operations. Had
compensation cost for the Company's Stock Incentive Plans been determined based
upon the fair value at the grant date for awards under the Stock Incentive Plans
consistent with the methodology prescribed under Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation", net
income and earnings per Unit would have been the pro forma amounts indicated in
the table below:
<TABLE>
<CAPTION>
For the Year Ended
------------------------------------
1998 1997 1996
--------- --------- ----------
<S> <C> <C> <C>
Net Income Available to Unitholders - as reported................................. $ 58,588 $ 45,683 $ 34,648
Net Income Available to Unitholders - pro forma................................... $ 56,801 $ 44,403 $ 34,142
Net Income Available to Unitholders per Unit - as reported- Basic................. $ 1.33 $ 1.28 $ 1.29
Net Income Available to Unitholders per Unit - pro forma- Basic................... $ 1.29 $ 1.24 $ 1.28
Net Income Available to Unitholders per Unit - as reported - Diluted.............. $ 1.32 $ 1.27 $ 1.29
Net Income Available to Unitholders per Unit - pro forma - Diluted............... $ 1.28 $ 1.23 $ 1.27
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions:
Expected dividend yield.......................................................... 8.01% 8.15% 7.16%
Expected stock price volatility.................................................. 20.56% 20.01% 18.12%
Risk-free interest rate.......................................................... 5.64% 6.48% 6.81%
Expected life of options......................................................... 3.74 3.78 7.37
</TABLE>
The weighted average fair value of options granted during 1998, 1997 and 1996 is
$2.95, $2.72 and $2.43 per option, respectively.
In September 1994, the Board of Directors approved and the Company
adopted a 401(k)/Profit Sharing Plan. Under the Company's 401(k)/Profit Sharing
Plan, all eligible employees may participate by making voluntary contributions.
The Company may make, but is not required to make, matching contributions. For
the year ended December 31, 1996 the Company did not make any matching
contributions. For the years ended December 31, 1998 and 1997, the Company,
through the Operating Partnership, made matching contributions of approximately
$198 and $108, respectively. In March 1996, the Board of Directors approved and
the Company adopted a Deferred Income Plan (the "Plan"). Under the Plan,
243,400 unit awards, 194,164 unit awards and 138,500 unit awards were granted
for the years ended December 31, 1998, 1997 and 1996 respectively, providing the
recipients with deferred income benefits which vest in three equal annual
installments. The expense related to these deferred income benefits is included
in general and administrative expenses in the consolidated statements of
operations.
During 1998, the Company awarded 51,850 shares of restricted common
stock to certain employees, 2,769 shares of restricted Common Stock to certain
Directors and certain other employees of the Company converted certain
employee stock options to 13,602 shares of restricted Common Stock. The
Operating Partnership issued Units to the Company in the same amount. These
restricted shares of Common Stock had a fair value of $2,324 on the date of
grant. The restricted common stock vests over a period from five to ten years.
Compensation
F-26
<PAGE> 82
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
16. EMPLOYEE BENEFIT PLANS, CONTINUED
expense will be charged to earnings in the Consolidated Operating Partnership's
consolidated statements of operations over the vesting period.
During 1997, the Company awarded 59,946 shares of restricted common
stock to certain employees, 1,274 of restricted common stock to certain
Directors and certain other employees of the Company converted certain
employee stock options to 54,936 shares of restricted common stock. The
Operating Partnership issued Units to the Company in the same amount. These
restricted shares of common stock had a fair value of $3,655 on the date of
grant. The restricted common stock vests over a period from two to ten years.
Compensation expense will be charged to earnings in the Consolidated Operating
Partnership's consolidated statements of operations over the vesting period.
17. RELATED PARTY TRANSACTIONS
The Consolidated Operating Partnership, through the Operating
Partnership, often obtains title insurance coverage for its properties from an
entity for which an independent Director of the Company became the President,
Chief Executive Officer and a Director in 1996.
From time to time, the Consolidated Operating Partnership utilizes real
estate brokerage services from CB Richard Ellis for which a relative of one of
the Company's officers/Directors is an employee.
From time to time, the Consolidated Operating Partnership utilizes
leasing services from an entity for which one of the Company's former officers
located in a regional office owns a 62.5% ownership interest. For the year
ended December 31, 1998, the Consolidated Operating Partnership has paid
approximately $247 of leasing commissions to this entity.
On July 16, 1998 the Consolidated Operating Partnership, through the
Operating Partnership, completed an acquisition of a real estate firm for which
a former officer and an employee of the Company owned a 77.5% interest. Gross
proceeds to the real estate firm totaled approximately $2,349.
On June 23, 1998, the Consolidated Operating Partnership, through the
Operating Partnership, purchased a 292,471 square foot (unaudited) light
industrial property located in Denver, Colorado for approximately $12,206. The
Property was purchased from a company in which one of the Company's officers
owned a 12.08% interest.
Four industrial properties were purchased from Western Suburban
Industrial Investments Limited Partnership ("Western") in which the sole general
partner, having a 5% interest, was Tomasz/Shidler Investment Corporation, the
sole shareholders of which were a Director of the Company and a former
Director/officer of the Company who also had a 53% and 32% limited partnership
interest in Western, respectively. Further, an additional Director/officer of
the Company was a limited partner in Western having an interest of 2%. The
aggregate purchase price for this acquisition totaled approximately $7,900
excluding costs incurred in conjunction with the acquisition of the
properties.
In the fourth quarter of 1998, the Consolidated Operating Partnership,
through the Operating Partnership, sold three industrial properties to a former
officer and Director of the Company for gross proceeds of approximately $10,701.
The former officer and Director has the option of selling the properties back to
the Operating Partnership and the Operating Partnership has the option of buying
the properties from the former officer and Director. The gain on sale from the
sale of these properties has been deferred and will be recognized if the above
mentioned options are not exercised.
F-27
<PAGE> 83
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA)
18. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Interest paid, net of
capitalized interest................ $ 59,510 $ 19,909 $ 5,069
=========== =========== ===========
Interest capitalized.................. $ 3,643 $ 1,151 $ 501
=========== =========== ===========
Supplemental schedule of noncash
investing and financing activities:
Distribution payable on Units......... $ 27,081 $ 22,010 $ 16,281
=========== =========== ===========
Exchange of limited partner units
for general partner units
Limited Partnership Interest.......... $ (5,150) $ (3,395) $ (943)
General Partnership Interest.......... 5,150 3,395 943
----------- ----------- -----------
$ --- $ --- $ ---
=========== =========== ===========
In conjunction with the property
acquisitions, the following assets
and liabilities were assumed:
Purchase of real estate............... $463,141 $ 817,058 $ 252,991
Mortgage loans........................ (6,222) (20,272) (9,417)
Operating partnership units........... (49,413) (115,230) (23,863)
Promissory notes payable.............. --- --- (9,919)
Accounts payable and
accrued expenses..................... (4,171) (11,064) (2,626)
----------- ----------- -----------
Acquisition of real estate............ $403,335 $ 670,492 $ 207,166
=========== =========== ===========
</TABLE>
F-28
<PAGE> 84
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
19. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Consolidated Operating
Partnership is involved in legal actions arising from the ownership of its
properties. In management's opinion, the liabilities, if any, that may
ultimately result from such legal actions are not expected to have a materially
adverse effect on the consolidated financial position, operations or liquidity
of the Consolidated Operating Partnership.
Thirty-two properties have leases granting the tenants options to
purchase the property. Such options are exercisable at various times and at
appraised fair market value or at a fixed purchase price generally in excess of
the Consolidated Operating Partnership's depreciated cost of the asset. The
Consolidated Operating Partnership has no notice of any exercise of any tenant
purchase option.
The Consolidated Operating Partnership, through the Operating
Partnership, has committed to the construction of seven development projects
totaling approximately .9 million square feet (unaudited). The estimated total
construction costs are approximately $30,299 (unaudited). These
developments are expected to be funded with cash flow from operations as well as
borrowings under the 1997 Unsecured Acquisition Facility.
At December 31, 1998, the Consolidated Operating Partnership, through
the Operating Partnership, had two letters of credit outstanding in the amounts
of $980 and $50. The $980 letter of credit was required under the original
issuance of the Company's Series A Preferred Stock to guarantee the payment of
one quarter's dividend on the Series A Preferred Stock. The Guarantee Agent of
the Series A Preferred Stock is the beneficiary of this letter of credit which
expires on June 29, 1999. The $50 letter of credit is pledged to a state
governmental entity for development purposes. It expires on February 28, 2000.
20. SUBSEQUENT EVENTS (UNAUDITED)
During the period January 1, 1999 through March 24, 1999, the
Consolidated Operating Partnership acquired or completed development of three
industrial properties for a total estimated investment of approximately $16,792.
The Consolidated Operating Partnership also sold eight industrial properties for
approximately $19,061 of gross proceeds.
In March 1999, the Operating Partnership declared a first quarter
distribution of $.60 per unit which is payable on April 19, 1999. The Operating
Partnership also declared a first quarter distribution of $54.688 per unit,
$53.906 per unit, $49.687 per unit and $49.375 per unit on its Series B
Cumulative Preferred Units, Series C Cumulative Preferred Units, Series D
Preferred Units and Series E Preferred Units, respectively, which is payable on
March 31, 1999.
F-29
<PAGE> 85
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
21. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
--------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Total Revenues ................................................... $ 63,078 $ 73,260 $ 77,158 $ 79,890
Equity In Income of Other Real Estate Partnerships ............... 8,757 5,289 7,443 6,094
Equity In Income of Joint Venture ................................ -- -- -- 45
Disposition of Interest Rate Protection Agreement ................ -- -- -- (8,475)
Income from Operations ........................................... 24,122 23,232 24,813 10,900
Gain on Sales of Properties ...................................... 43 50 599 2,239
Income Before Extraordinary Loss and Cumulative Effect of
Change in Accounting Principle ................................. 24,165 23,282 25,412 13,139
Cumulative Effect of Change in Accounting Principle .............. -- (719) -- --
Net Income ....................................................... 24,165 22,563 25,412 13,139
Preferred Unit Distributions ..................................... (4,998) (7,230) (7,230) (7,233)
-------- -------- -------- --------
Net Income Available to Unitholders .............................. $ 19,167 $ 15,333 $ 18,182 $ 5,906
======== ======== ======== ========
Earnings Per Unit:
Net Income Available to Unitholders Before Extraordinary Loss
and Cumulative Effect of Change in Accounting Principle per
Weighted Average Unit Outstanding:
Basic ............................................ $ .45 $ .36 $ .41 $ .13
======== ======== ======== ========
Diluted .......................................... $ .45 $ .36 $ .41 $ .13
======== ======== ======== ========
Net Income Available to Unitholders per Weighted Average
Unit Outstanding:
Basic ............................................ $ .45 $ .35 $ .35 $ .13
======== ======== ======== ========
Diluted .......................................... $ .45 $ .35 $ .35 $ .13
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total Revenues ..................................................... $ 18,899 $ 21,379 $ 24,032 $ 34,256
Equity In Income of Other Real Estate Partnerships ................. 5,834 2,196 11,472 11,795
Disposition of Interest Rate Protection Agreement .................. -- 4,038 -- --
Income from Operations ............................................. 12,220 9,943 16,308 19,086
Gain on Sales of Properties ........................................ -- 460 77 191
Income Before Extraordinary Loss ................................... 12,220 10,403 16,385 19,277
Extraordinary Loss ................................................. -- (3,428) -- (1,238)
Net Income ......................................................... 12,220 6,975 16,385 18,039
Preferred Unit Distributions ....................................... -- (1,405) (3,265) (3,266)
-------- -------- -------- --------
Net Income Available to Unitholders ................................ $ 12,220 $ 5,570 $ 13,120 $ 14,773
======== ======== ======== ========
Earnings Per Unit:
Net Income Available to Unitholders Before Extraordinary Loss
per Weighted Average Unit Outstanding:
Basic .................................................... $ .37 $ .26 $ .38 $ .39
======== ======== ======== ========
Diluted .................................................. $ .36 $ .26 $ .38 $ .39
======== ======== ======== ========
Net Income Available to Unitholders per Weighted Average
Unit Outstanding:
Basic .................................................... $ .37 $ .16 $ .38 $ .36
======== ======== ======== ========
Diluted .................................................. $ .36 $ .16 $ .38 $ .36
======== ======== ======== ========
</TABLE>
F-30
<PAGE> 86
FIRST INDUSTRIAL, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
22. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following Pro Forma Condensed Statements of Operations for the
years ended December 31, 1998 and 1997 (the "Pro Forma Statements") are
presented as if the acquisition of 600 industrial properties between January 1,
1997 and December 31, 1998 had been acquired on either January 1, 1997 or the
lease commencement date if the property was developed and as if the Operating
Partnership's 10% equity interest in the September 1998 Joint Venture had been
acquired on January 1, 1997. In addition, the Pro Forma Statements are prepared
as if the assumption of secured debt, the issuance of the 2007 Notes, the
issuance of the 2027 Notes, the issuance of the 2011 Notes, the issuance of the
2005 Notes, the issuance of the 2006 Notes, the issuance of the 2017 Notes, the
issuance of the 2011 Drs., the issuance of the 2028 Notes, the issuance of the
Series B Preferred Units, the issuance of the Series C Preferred Units, the
issuance of the Series D Preferred Units, the issuance of the Series E Preferred
Units, the September 1997 Capital Contribution, the October 1997 Capital
Contribution and the April 1998 Capital Contribution Offering had occurred on
January 1, 1997.
The Pro Forma Statements are not necessarily indicative of what the
Operating Partnership's results of operations would have been for the years
ended December 31, 1998 and 1997, nor do they purport to present the future
results of operations of the Operating Partnership.
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
--------------------------
December 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Total Revenues........................................... $ 304,318 $ 209,413
Property Expenses........................................ (88,413) (61,010)
General and Administrative Expense....................... (12,919) (5,820)
Interest Expense......................................... (70,567) (45,909)
Amortization of Interest Rate Protection Agreements
and Deferred Financing Costs............................ (851) (369)
Depreciation and Other Amortization...................... (56,046) (34,991)
Restructuring Charge..................................... (6,858) --
----------- -----------
Income from Operations Before Equity in Income of
Joint Venture and Disposition of Interest Rate
Protection Agreements................................... 68,664 61,314
Equity in Income of Other Real Estate Partnerships....... 28,559 35,078
Equity in (Loss) Income of Joint Venture................. (243) 87
Disposition of Interest Rate Protection Agreements....... (8,475) 4,038
----------- -----------
Income from Operations................................... 88,505 100,517
Gain on Sales of Properties.............................. 2,931 728
----------- -----------
Income Before Extraordinary Item......................... 91,436 101,245
Preferred Unit Distribution.............................. (28,929) (28,929)
----------- -----------
Income Before Extraordinary Loss and Cumulative Effect
of Change in Accounting Principle Available to
Unit Distribution....................................... $ 62,507 $ 72,316
----------- -----------
Income Before Extraordinary Item Available to
Unitholders Per Weighted Average Unit
Outstanding:
Basic.......................................... $ 1.39 $ 1.61
=========== ===========
Diluted........................................ $ 1.38 $ 1.61
=========== ===========
</TABLE>
F-31
<PAGE> 87
OTHER REAL ESTATE PARTNERSHIPS
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS
Report of Independent Accountants................................................ F-32
Combined Balance Sheets of the Other Real Estate Partnerships as of December 31,
1998 and 1997.................................................................... F-33
Combined Statements of Operations of the Other Real Estate Partnerships for the
Years Ended December 31, 1998, 1997 and 1996..................................... F-34
Combined Statements of Changes in Partners' Capital of the Other Real Estate
Partnerships for the Years Ended December 31, 1998, 1997 and 1996................ F-35
Combined Statements of Cash Flows of the Other Real Estate Partnerships for the
Years Ended December 31, 1998, 1997 and 1996..................................... F-36
Notes to Combined Financial Statements........................................... F-37
</TABLE>
F-32
<PAGE> 88
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
the Other Real Estate Partnerships
In our opinion, the accompanying combined balance sheets and the related
combined statements of operations, of changes in partners' capital and of cash
flows present fairly, in all material respects, the financial position of the
Other Real Estate Partnerships at December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Other Real
Estate Partnership's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 16, 1999
F-33
<PAGE> 89
OTHER REAL ESTATE PARTNERSHIPS
COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------ -------------
<S> <C> <C>
ASSETS
Assets:
Investment in Real Estate:
Land......................................................... $ 83,102 $ 114,329
Buildings and Improvements................................... 342,888 651,569
Furniture, Fixtures and Equipment............................ 84 1,385
Construction in Progress..................................... 23,494 25,947
Less: Accumulated Depreciation............................... (30,451) (98,304)
------------ -------------
Net Investment in Real Estate............................ 419,117 694,926
Cash and Cash Equivalents.................................... 6,351 3,972
Restricted Cash.............................................. 3,285 313,060
Tenant Accounts Receivable, Net.............................. 227 5,022
Deferred Rent Receivable..................................... 3,369 7,560
Deferred Financing Costs, Net................................ 1,748 1,787
Prepaid Expenses and Other Assets, Net....................... 26,218 24,325
------------ -------------
Total Assets............................................. $ 460,315 $ 1,050,652
============ =============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage Loans Payable....................................... $ 42,422 $ 40,000
Defeased Mortgage Loan Payable............................... --- 300,000
Accounts Payable and Accrued Expenses........................ 3,672 18,988
Rents Received in Advance and Security Deposits.............. 2,229 4,329
------------ -------------
Total Liabilities........................................ 48,323 363,317
------------ -------------
Commitments and Contingencies................................... --- ---
Partners' Capital............................................... 411,992 687,335
------------ -------------
Total Liabilities and Partners' Capital.................. $ 460,315 $ 1,050,652
============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-34
<PAGE> 90
OTHER REAL ESTATE PARTNERSHIPS
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1998 1997 1996
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Rental Income.......................................................... $ 44,499 $ 87,184 $ 79,947
Tenant Recoveries and Other Income..................................... 11,722 24,436 22,375
Interest Income-Defeasance............................................. --- 12,786 ---
------------ ------------ ------------
Total Revenues..................................................... 56,221 124,406 102,322
------------ ------------ ------------
Expenses:
Real Estate Taxes...................................................... 6,779 17,684 17,261
Repairs and Maintenance................................................ 1,460 4,506 4,337
Property Management.................................................... 2,095 4,045 3,558
Utilities.............................................................. 1,810 3,078 2,535
Insurance.............................................................. 140 319 605
Other.................................................................. 721 937 637
Interest............................................................... 2,971 24,760 24,268
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs.............................................. 65 2,443 3,090
Depreciation and Other Amortization.................................... 9,597 23,310 21,737
Abandoned Pursuit Costs Charge......................................... 360 --- ---
------------ ------------ ------------
Total Expenses..................................................... 25,998 81,082 78,028
------------ ------------ ------------
Income From Operations Before Disposition of Interest Rate
Protection Agreements.................................................. 30,223 43,324 24,294
Disposition of Interest Rate Protection Agreements...................... --- (2,608) ---
------------ ------------ ------------
Income from Operations.................................................. 30,223 40,716 24,294
Gain on Sales of Properties............................................. 2,417 4,275 ---
------------ ------------ ------------
Income Before Extraordinary Loss and Cumulative Effect of
Change in Accounting Principle......................................... 32,640 44,991 24,294
Extraordinary Loss...................................................... --- (9,458) ---
Cumulative Effect of Change in Accounting Principle..................... (858) --- ---
------------ ------------ ------------
Net Income.............................................................. $ 31,782 $ 35,533 $ 24,294
============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-35
<PAGE> 91
OTHER REAL ESTATE PARTNERSHIPS
COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Total
----------
<S> <C>
Balance at December 31, 1994................... $ 210,906
Contributions................................ 100,468
Distributions................................ (34,168)
Net Income................................... 8,395
----------
Balance at December 31, 1995................... 285,601
----------
Contributions................................ 25,874
Distributions................................ (33,312)
Net Income................................... 24,294
----------
Balance at December 31, 1996................... 302,457
----------
Contributions................................ 115,781
Distributions................................ (422,906)
Net Income................................... 35,533
----------
Balance at December 31, 1997................... 687,335
----------
Contributions................................ 115,781
Distributions................................ (422,906)
Net Income................................... 31,782
----------
Balance at December 31, 1998................... $ 411,992
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-36
<PAGE> 92
OTHER REAL ESTATE PARTNERSHIPS
COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, 1998 December 31, 1997 December 31, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income.......................................................... $ 31,782 $ 35,533 $ 24,294
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation....................................................... 8,676 20,626 19,427
Amortization of Interest Rate Protection Agreements and
Deferred Financing Costs......................................... 65 2,443 3,090
Other Amortization................................................. 919 2,684 2,310
Disposition of Interest Rate Protection Agreements................. --- 2,608 ---
Gain on Sales of Real Estate....................................... (2,417) (4,275) ---
Extraordinary Loss................................................. --- 9,458 ---
Cumulative Effect of Change in Accounting Principle................ 858 --- ---
Provision for (Recovery of) Bad Debts.............................. (99) 71 65
Increase in Tenant Accounts Receivable and Prepaid
Expenses and Other Assets....................................... (8,372) (4,776) (2,956)
(Decrease) Increase in Deferred Rent Receivable................... (680) (725) 308
(Decrease) Increase in Accounts Payable and Accrued
Expenses and Rents Received in Advance and Security
Deposits......................................................... (2,440) 2,460 2,424
Organization Costs................................................. (3) (155) (37)
Decrease (Increase) in Restricted Cash............................. 3,507 2,035 (4,275)
----------------- ----------------- -----------------
Net Cash Provided by Operating Activities........................ 31,796 67,987 44,650
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases and Additions to Investment in Real Estate............... (132,276) (113,228) (35,697)
Proceeds from Sales of Investment in Real Estate................... 22,247 17,574 ---
Funding of Mortgage Loans Receivable............................... --- (13,958) ---
Repayment of Mortgage Loans Receivable............................. 288 157 ---
Decrease in Restricted Cash........................................ 268 2,742 1,613
----------------- ----------------- -----------------
Net Cash Used in Investing Activities............................ (109,473) (106,713) (34,084)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions...................................................... 115,781 419,104 25,556
Distributions...................................................... (35,259) (69,759) (33,312)
Repayments on Mortgage Loans Payable............................... (300,424) (6,504) (346)
Decrease (Increase) in Restricted Cash............................. 306,000 (306,000) ---
Purchase of U.S. Government Securities............................. --- (300,000) ---
Purchase from Maturity of U.S. Government Securities............... --- 300,000 ---
Purchase of Interest Rate Protection Agreements.................... --- (150) ---
Proceeds from Sale of Interest Rate Protection .................... --- 3,510 ---
Debt Issuance Costs................................................ (6,042) (817) (1,030)
----------------- ----------------- -----------------
Net Cash Provided by Financing Activities........................ 80,056 39,384 (9,132)
----------------- ----------------- -----------------
Net Increase in Cash and Cash Equivalents........................... 2,379 658 1,434
Cash and Cash Equivalents, Beginning of Period...................... 3,972 3,314 1,880
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Period............................ $ 6,351 $ 3,972 $ 3,314
================= ================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-37
<PAGE> 93
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
1. ORGANIZATION AND FORMATION OF PARTNERSHIPS
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 84.0% ownership interest at December 31, 1998. The Company also owns
a preferred general partnership interest in the Operating Partnership
("Preferred Units") with an aggregate liquidation priority of $350,000.
The Company is a real estate investment trust ("REIT") as defined in the
Internal Revenue Code. The Company's operations are conducted primarily through
the Operating Partnership. The limited partners of the Operating Partnership
own, in the aggregate, approximately a 16.0% interest in the Operating
Partnership at December 31, 1998.
The Operating Partnership is the sole member of limited liability
companies (the "L.L.C.'s"), owns a 95% economic interest in FR Development
Services, Inc. as well as a 99% limited partnership interest (subject in one
case as described below to a preferred limited partnership interest) in First
Industrial Financing Partnership, L.P. (the "Financing Partnership"), First
Industrial Securities, L.P. (the "Securities Partnership"), First Industrial
Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial
Pennsylvania Partnership, L.P. (the "Pennsylvania Partnership"), First
Industrial Harrisburg Partnership, L.P. (the "Harrisburg Partnership"), First
Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD. and
First Industrial Development Services, L.P. (together, the "Other Real Estate
Partnerships"). The Operating Partnership, through wholly owned limited
liability companies in which it is the sole member, also owns a 10% equity
interest in and provides asset and property management services to a joint
venture which invests in industrial properties.
The general partners of the Other Real Estate Partnerships are separate
corporations, each with a one percent general partnership interest in the Other
Real Estate Partnerships for which it acts as a general partner. Each general
partner of the Other Real Estate Partnerships is a wholly owned subsidiary of
the Company. The general partner of the Securities Partnership, First Industrial
Securities Corporation, also owns a preferred limited partnership interest in
the Securities Partnership which entitles it to receive a fixed quarterly
distribution, and results in it being allocated income in the same amount, equal
to the fixed quarterly dividend the Company pays on its 9.5% $.01 par value
Series A Cumulative Preferred Stock.
On a combined basis, as of December 31, 1998, the Other Real Estate
partnerships owned 102 in-service industrial properties, containing an aggregate
of approximately 12.0 million square feet of GLA. Of the 102 industrial
properties owned by the Other Real Estate Partnerships at December 31, 1998, 23
are held by the Financing Partnership, 19 are held by the Securities
Partnership, 23 are held by the Mortgage Partnership, 23 are held by the
Pennsylvania Partnership, six are held by the Harrisburg Partnership, six are
held by the Indianapolis Partnership, one is held by First Industrial
Development Services, L.P. and one is held by TK-SV, LTD.
Profits, losses and distributions of the Other Real Estate Partnerships
are allocated to the general partner and the limited partners in accordance with
the provisions contained within its restated and amended partnership agreement.
F-38
<PAGE> 94
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
2. BASIS OF PRESENTATION
The combined financial statements of the Other Real Estate Partnerships
at December 31, 1998 and 1997 and for each of the three years ended December 31,
1998 include the accounts and operating results of the Other Real Estate
Partnerships on a combined basis.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In order to conform with generally accepted accounting principles,
management, in preparation of the Other Real Estate Partnerships' financial
statements, is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as of December 31, 1998 and 1997, and the reported amounts of
revenues and expenses for the years ended December 31, 1998, 1997 and 1996.
Actual results could differ from those estimates.
Cash and Cash Equivalents:
Cash and cash equivalents include all cash and liquid investments with
an initial maturity of three months or less. The carrying amount approximates
fair value due to the short maturity of these investments.
Investment in Real Estate and Depreciation:
Purchase accounting has been applied when ownership interests in
properties were acquired for cash. The historical cost basis of properties has
been carried over when certain ownership interests were exchanged for units in
the Operating Partnership (the "Units") on July 1, 1994, and purchase accounting
has been used for all other properties that were acquired for Units.
Real estate assets are carried at the lower of depreciated cost or fair
value. The Other Real Estate Partnerships review their properties on a quarterly
basis for impairment and provide a provision if impairments are determined.
First, to determine if impairment may exist, the Other Real Estate Partnerships
review their properties and identify those which have had either an event of
change or event of circumstances warranting further assessment of
recoverability. Then, the Other Real Estate Partnerships estimate the fair value
of those properties on an individual basis by capitalizing the expected net
operating income. Such amounts are then compared to the property's depreciated
cost to determine whether an impairment exists. For properties management
considers held for sale, the Other Real Estate Partnerships cease to depreciate
the properties and values the properties at the lower of depreciated cost or
fair value.
Interest expense, real estate taxes and other directly related expenses
incurred during construction periods are capitalized and depreciated commencing
with the date placed in service, on the same basis as the related assets.
Depreciation expense is computed using the straight-line method based on the
following useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings and Improvements.................................. 31.5 to 40
Land Improvements........................................... 15
Furniture, Fixtures and Equipment........................... 5 to 10
</TABLE>
F-39
<PAGE> 95
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
3. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES, CONTINUED
Revenue Recognition:
Construction expenditures for tenant improvements, leasehold
improvements and leasing commissions are capitalized and amortized over the
terms of each specific lease. Maintenance and repairs are charged to expense
when incurred. Expenditures for improvements are capitalized.
When assets are sold or retired, their costs and related accumulated
depreciation are removed from the accounts with the resulting gains or losses
reflected in net income or loss.
Deferred Financing Costs:
Deferred financing costs include fees and costs incurred to obtain
long-term financing. These fees and costs are being amortized over the terms of
the respective loans. Accumulated amortization of deferred financing costs was
$182 and $1,460 at December 31, 1998 and 1997, respectively. Unamortized
deferred financing fees are written-off when debt is retired before the maturity
date (see Note 9).
Rental Income is recognized on a straight-line method under which
contractual rent increases are recognized evenly over the lease term. Tenant
recovery income includes payments from tenants for taxes, insurance and other
property operating expenses and is recognized as revenues in the same period the
related expenses are incurred by the Other Real Estate Partnerships.
The Other Real Estate Partnerships provide an allowance for doubtful
accounts against the portion of tenant accounts receivable which is estimated to
be uncollectible. Accounts receivable in the combined balance sheets are shown
net of an allowance for doubtful accounts of $351 and $450 as of December 31,
1998 and December 31, 1997, respectively.
Income Taxes:
In accordance with partnership taxation, each of the partners are
responsible for reporting their share of taxable income or loss.
The Other Real Estate Partnerships are subject to certain state and
local income, excise and franchise taxes. The provision for such state and local
taxes has been reflected in general and administrative expense in the statement
of operations and has not been separately stated due to its insignificance.
Fair Value of Financial Instruments:
The Other Real Estate Partnerships' financial instruments include
short-term investments, tenant accounts receivable, accounts payable, other
accrued expenses, mortgage loans payable and interest rate protection
agreements. The fair value of the short-term investments, tenant accounts
receivable, accounts payable and other accrued expenses were not materially
different from their carrying or contract values. See Note 4 for the fair values
of the mortgage loans payable.
F-40
<PAGE> 96
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
3. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES, CONTINUED
Derivative Financial Instruments:
The Other Real Estate Partnerships' interest rate protection agreements
(the "Agreements") were used to limit the interest rate on the Financing
Partnership's $300,000 mortgage loan. Receipts or payments resulting from the
Agreements were recognized as adjustments to interest expense. Upon termination
of these Agreements, the Other Real Estate Partnerships recognized a gain (loss)
from the disposition of the Agreements equal to the amount of cash received or
paid at termination less the carrying value of the Agreements on the Other Real
Estate Partnerships' balance sheet (See note 8). The credit risks associated
with the Agreements were controlled through the evaluation and monitoring of the
creditworthiness of the counterparty. In the event that the counterparty failed
to meet the terms of the Agreements, the Other Real Estate Partnerships'
exposure was limited to the current value of the interest rate differential, not
the notional amount, and the Other Real Estate Partnerships' carrying value of
the Agreements on the balance sheet. The Agreements were executed with
creditworthy financial institutions.
Recent Accounting Pronouncements:
In June 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income". This statement, effective for fiscal years beginning
after December 15, 1997, requires the Other Real Estate Partnerships to report
components of comprehensive income in a financial statement that is displayed
with the same prominence as other financial statements. Comprehensive income is
defined by Concepts Statement No. 6, "Elements of Financial Statements" as the
change in the equity of a business enterprise during a period from transactions
and other events and circumstances from non-owner sources. It includes all
changes in equity during a period except those resulting from investments by
owners and distributions to owners. The Other Real Estate Partnerships' net
income available to unitholders approximates its comprehensive income as defined
in Concepts Statement No. 6, "Elements of Financial Statements".
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"). This statement, effective for financial statements for
fiscal years beginning after December 15, 1997, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Generally, financial information is required to be reported
on the basis that it is used internally for evaluating segment performance and
deciding how to allocate resources to segments. The sole business of the Other
Real Estate Partnerships is the owning and the operation of industrial
properties. The Other Real Estate Partnerships evaluate operating results and
allocates resources on a property-by-property basis. Accordingly, the Operating
Partnership has concluded it has a single reportable segment for FAS 131
purposes. Further, all operations are within the United States and no tenant
comprises more than 10% of consolidated revenues. Therefore, no additional
disclosure due to the adoption of FAS 131 is currently required.
F-41
<PAGE> 97
\
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
3. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES, CONTINUED
In April 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5
requires that the net unamortized balance of all start-up costs and
organizational costs be written off as a cumulative effect of a change in
accounting principle and all future start-up costs and organizational costs be
expensed. In the second quarter of 1998, the Other Real Estate Partnerships
reported a cumulative effect of a change in accounting principle in the amount
of approximately $858 to reflect the write-off of the unamortized balance of
organizational costs on the Other Real Estate Partnerships' balance sheet.
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities". This statement, effective for fiscal years beginning after June 15,
1999, establishes accounting and reporting standards requiring that every
derivative instrument, including certain derivative instruments imbedded in
other contracts, be recorded in the balance sheet as either an asset or
liability measured at its fair value. The statement also requires that the
changes in the derivative's fair value be recognized in earnings unless specific
hedge accounting criteria are met. The Other Real Estate Partnerships are
currently assessing the impact of this new statement on its consolidated
financial position, liquidity, and results of operations.
4. MORTGAGE LOANS
On June 30, 1994, the Other Real Estate Partnerships, through the
Financing Partnership, entered into a $300,000 mortgage loan (the "1994 Mortgage
Loan"). On April 4, 1997, the Other Real Estate Partnerships purchased U.S.
Government securities as substitute collateral to execute a legal defeasance of
a $300,000 mortgage loan (the "1994 Defeased Mortgage Loan") (see Note 9). Upon
the execution of the legal defeasance, 180 of the 195 properties collateralizing
the 1994 Defeased Mortgage Loan were released leaving 15 properties and the U.S.
Government securities as collateral. On January 2, 1998, the Other Real Estate
Partnerships used the gross proceeds from the maturity of the U.S. Government
securities to pay off and retire the 1994 Defeased Mortgage Loan. Due to the
retirement of the 1994 Defeased Mortgage Loan, the remaining 15 properties were
released on January 2, 1998. The 1994 Defeased Mortgage Loan provided for
interest only payments at a floating interest rate of LIBOR plus 1.40% which
such interest rate had been limited to 7.2% through the use of an interest rate
protection agreement from June 30, 1994 through June 30, 1995. From July 1, 1995
through May 15, 1997, the 1994 Defeased Mortgage Loan's interest rate had been
effectively fixed at the rate of 6.97% through the use of interest rate
protection agreements. From May 16, 1997 through December 31, 1997, the 1994
Defeased Mortgage Loan's interest rate had been limited to 7.2% through the use
of interest rate protection agreements.
Under the terms of the 1994 Defeased Mortgage Loan, certain cash
reserves were required to be and had been set aside for payment of tenant
improvements, capital expenditures, interest, real estate taxes, insurance and
potential environmental costs as well as certain other cash reserves to pay off
and retire the 1994 Defeased Mortgage Loan. The amount of cash reserves for
payment of potential environmental costs was determined by the lender and was
established at the closing of the 1994 Defeased Mortgage Loan. The amounts
included in the cash reserves relating to payments of tenant improvements,
capital expenditures, interest, real estate taxes and insurance were determined
by the lender and approximated the next periodic payment of such items. At
December 31, 1997, these reserves totaled $310,943 and are included in
restricted cash. Such cash reserves were invested in a money market fund at
December 31, 1997. The maturity of these investments is one day; accordingly,
cost approximates fair market value. On January 2, 1998, $300,000 of these cash
reserves were used to pay down and retire the 1994 Defeased Mortgage Loan,
$6,000 of these cash reserves were used to pay a prepayment fee on the 1994
Defeased Mortgage Loan and the remaining cash reserves were returned to the
Financing Partnership.
F-42
<PAGE> 98
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
4. MORTGAGE LOANS, CONTINUED
On December 29, 1995, the Other Real Estate Partnerships, through the
Mortgage Partnership, entered into a $40,200 mortgage loan (the "1995 Mortgage
Loan"). In the first quarter of 1996, the Other Real Estate Partnerships made a
one time pay-down of $200 on the 1995 Mortgage Loan which decreased the
outstanding balance to $40,000. The 1995 Mortgage Loan matures on January 11,
2026 and provides for interest only payments through January 11, 1998, after
which monthly principal and interest payments are required based on a 28-year
amortization schedule. The interest rate under the 1995 Mortgage Loan is fixed
at 7.22% per annum through January 11, 2003. After January 11, 2003, the
interest rate adjusts through a predetermined formula based on the applicable
Treasury rate. The 1995 Mortgage Loan is collateralized by 23 properties held by
the Other Real Estate Partnerships. The 1995 Mortgage Loan may be prepaid after
January 2003.
Under the terms of the 1995 Mortgage Loan, certain cash reserves are
required to be and have been set aside for refunds of security deposits and
payment of capital expenditures, interest, real estate taxes and insurance. The
amount of cash reserves segregated for security deposits is adjusted as tenants
turn over. The amounts included in the cash reserves relating to payments of
capital expenditures, interest, real estate taxes and insurance were determined
by the lender and approximate the next periodic payment of such items. At
December 31, 1998 and 1997, these reserves totaled $3,285 and $2,117,
respectively, and are included in restricted cash. Such cash reserves were
invested in a money market fund at December 31, 1998. The maturity of these
investments is one day, accordingly, cost approximates fair market value.
On December 14, 1995, the Other Real Estate Partnerships, through the
Harrisburg Partnership, entered into a $6,650 mortgage loan (the "Harrisburg
Mortgage Loan") that was collateralized by first mortgage liens on three
properties in Harrisburg, Pennsylvania. The Harrisburg Mortgage Loan bore
interest at a rate based on LIBOR plus 1.5% or prime plus 2.25%, at the Other
Real Estate Partnership's option, and provided for interest only payments
through May 31, 1996, with monthly principal and interest payments required
subsequently based on a 26.5-year amortization schedule. On December 15, 1997,
the Other Real Estate Partnerships, paid off and retired the Harrisburg Mortgage
Loan (see Note 9).
On July 16, 1998, the Other Real Estate Partnerships, through TK-SV,
LTD., assumed a mortgage loan in the principal amount of $2,566 (the
"Acquisition Mortgage Loan V"). The Acquisition Mortgage Loan V is
collateralized by one property in Tampa, Florida, bears interest at a fixed rate
of 9.01% and provides for monthly principal and interest payments based on a
30-year amortization schedule. The Acquisition Mortgage Loan V matures on
September 1, 2006. The Acquisition Mortgage Loan V may be prepaid only after
August 2002 in exchange for the greater of a 1% prepayment fee or a yield
maintenance premium.
F-43
<PAGE> 99
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
4. MORTGAGE LOANS, CONTINUED
The following table discloses certain information regarding the Other Real
Estate Partnerships' mortgage loans:
<TABLE>
<CAPTION> INTEREST
OUTSTANDING BALANCE AT ACCRUED INTEREST PAYABLE AT RATE AT
---------------------------- --------------------------- -----------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, MATURITY
1998 1997 1998 1997 1997 DATE
------------ ------------ ----------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE LOANS PAYABLE
1995 Mortgage Loan.............. $ 39,567 $ 40,000 $ 167 $ 168 7.22% 1/11/26
Acquisition Mortgage Loan V..... 2,855 (1) --- 19 --- 9.01% 9/01/06
------------ ------------ ----------- ------------
Total........................... $ 42,422 $ 40,000 $ 186 $ 168
============ ============ =========== ============
DEFEASED MORTGAGE LOAN
1994 Defeased Mortgage Loan
(formerly defined as the 1994
Mortgage Loan).................. $ --- $ 300,000 $ --- $ 1,831 (2) (2)
============ ============ =========== ============
</TABLE>
(1) The Acquisition Mortgage Loan V is net of an unamortized premium of $307.
(2) The 1994 Defeased Mortgage Loan was paid off and retired on January 2,
1998.
Fair Value:
At December 31, 1998 and 1997, the fair value of the Other Real Estate
Partnerships' mortgage loans payable were as follows:
<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
------------------------- -----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Mortgage Loans Payable....... $ 42,422 $ 42,921 $ 40,000 $ 40,807
Defeased Mortgage Loan
Payable..................... --- --- 300,000 300,000
---------- ---------- ---------- ----------
Total........................ $ 42,422 $ 42,921 $ 340,000 $ 340,807
========== ========== ========== ==========
</TABLE>
The following is a schedule of maturities of the mortgage loans for the
next five years ending December 31, and thereafter:
Amount
-------------
1999 $ 515
2000 554
2001 596
2002 640
2003 689
Thereafter 39,121
-------------
Total $ 42,115
=============
F-44
<PAGE> 100
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
5. ACQUISITION AND DEVELOPMENT OF REAL ESTATE
In 1998, the Other Real Estate Partnerships acquired 27 properties
comprising approximately 1.4 million square feet (unaudited) of GLA for a total
purchase price of approximately $44,528 and completed the development of five
properties and two expansions comprising approximately 1.6 million square feet
(unaudited) of GLA at a cost of approximately $48,676.
In 1997, the Other Real Estate Partnerships acquired nine properties
comprising approximately 1.9 million square feet (unaudited) of GLA for a total
purchase price of approximately $45,292 and completed the development of two
properties and two expansions comprising approximately .5 million square feet
(unaudited) of GLA at a cost of approximately $12,238.
In 1996, the Other Real Estate Partnerships acquired one property
comprising approximately 1.0 million square feet (unaudited) of GLA for a total
purchase price of approximately $15,960.
6. SALES OF REAL ESTATE
In 1998, the Other Real Estate Partnerships sold five in-service
properties and several parcels of land. Gross proceeds from these sales totaled
approximately $22,247. The gain on sales totaled approximately $2,417.
In 1997, the Other Real Estate Partnerships sold seven in-service
properties and several parcels of land. Gross proceeds from these sales totaled
approximately $17,574. The gain on sales totaled approximately $4,275.
7. ABANDONED PURSUIT COSTS CHARGE
The Other Real Estate Partnerships recorded an abandoned pursuit costs
charge of approximately $360 in the fourth quarter of 1998 related to abandoned
acquisitions.
8. DISPOSITION OF INTEREST RATE PROTECTION AGREEMENTS
In May 1997, the Other Real Estate Partnerships, through the Financing
Partnership, sold interest rate protection agreements for approximately $3,510.
The loss on disposition of the interest rate protection agreements totaled
approximately $2,608.
9. EXTRAORDINARY ITEMS
In 1997, the Other Real Estate Partnerships, through the Harrisburg
Partnership, terminated the Harrisburg Mortgage Loan before its contractual
maturity date. Also, the Other Real Estate Partnerships entered into a
commitment to pay down and retire the 1994 Defeased Mortgage Loan on January 2,
1998. As a result of the early retirement of the Harrisburg Mortgage Loan and
the commitment for early retirement of the 1994 Defeased Mortgage Loan, the
Other Real Estate Partnerships recorded an extraordinary loss of $9,458
comprised of prepayment fees, the write off of unamortized deferred financing
fees, legal costs and other expenses.
F-45
<PAGE> 101
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
10. FUTURE RENTAL REVENUES
The Other Real Estate Partnerships' properties are leased to tenants
under net and semi-net operating leases. Minimum lease payments receivable,
excluding tenant reimbursements of expenses, under noncancelable operating
leases in effect as of December 31, 1998 are approximately as follows:
1999 $ 45,810
2000
38,848
2001
31,913
2002
26,732
2003
22,175
Thereafter
71,620
------------
Total $ 237,098
============
11. RELATED PARTY TRANSACTIONS
The Other Real Estate Partnerships often obtain title insurance
coverage for its properties from an entity for which an independent Director of
the Company became the President, Chief Executive Officer and a Director in
1996.
From time to time, the Other Real Estate Partnerships utilize real
estate brokerage services from CB Richard Ellis for which a relative of one of
the Company's officers/Directors is an employee.
On November 19, 1997, one of the Other Real Estate Partnerships
exercised an option that was granted on March 19, 1996 to purchase a 100,000
square foot (unaudited) bulk warehouse property located in Indianapolis, Indiana
for approximately $3,338. The property was purchased from a partnership in which
one of the Company's officers owned a 33.0% interest.
The Other Real Estate Partnerships acquired an industrial property from
a real estate firm for which a former officer and an employee of the Company
owned a 77.5% interest for a purchase price of approximately $3,248, excluding
costs incurred in connection with the acquisition of the property.
12. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1998 1997 1996
----------- ------------ -----------
<S> <C> <C> <C>
Interest paid..................... $ 4,784 $ 24,718 $ 24,240
=========== ============ ===========
</TABLE>
In conjunction with the property acquisitions, the following assets
and liabilities were assumed:
<TABLE>
<S> <C> <C> <C>
Purchase of real estate, net...... $ 74,697 $ 45,292 $ ---
Deferred rent receivable.......... --- --- 318
Accounts payable and accrued
expenses......................... (830) (350) ---
Mortgage loans.................... (2,378) --- ---
Limited partnership interest...... --- --- (318)
----------- ------------ -----------
Acquisition of Real Estate $ 71,489 $ 44,942 $ ---
=========== ============ ===========
</TABLE>
F-46
<PAGE> 102
OTHER REAL ESTATE PARTNERSHIPS
NOTES TO COMBINED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
13. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Other Real Estate Partnerships
are involved in legal actions arising from the ownership of its properties. In
management's opinion, the liabilities, if any, that may ultimately result from
such legal actions are not expected to have a materially adverse effect on the
combined financial position, operations or liquidity of the Other Real Estate
Partnerships.
Twelve properties have leases granting the tenants options to purchase
the property. Such options are exercisable at various times and at appraised
fair market value or at a fixed purchase price generally in excess of the Other
Real Estate Partnerships' purchase price. The Other Real Estate Partnerships
have no notice of any exercise of any tenant purchase option.
The Other Real Estate Partnerships have committed to the construction
of 13 development projects totaling approximately 1.6 million square feet
(unaudited) of GLA. The estimated total construction costs are approximately
$71,623 (unaudited). These developments are expected to be funded with capital
contributions from the Operating Partnership.
14. SUBSEQUENT EVENTS (UNAUDITED)
During the period January 1, 1999 through March 24, 1999, the Other
Real Estate Partnerships purchased one industrial property containing an
aggregate of .4 million square feet (unaudited) of GLA and one land parcel for
approximately $11,190.
F-47
<PAGE> 103
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
First Industrial, L.P.
Our report on the consolidated financial statements of First Industrial, L.P. is
included on page F-2 of this Form 10-K. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule listed in the Index to Financial Statements and Financial Statement
Schedule on page F-1 of this Form 10-K. In our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 16, 1999
S-1
<PAGE> 104
CONSOLIDATED OPERATING PARTNERSHIP
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION
As Of December 31, 1998
(Dollars in thousands)
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ATLANTA
- -------
1650 GA Highway 155 Atlanta, GA 788 4,544 190 788 4,734 5,522
415 Industrial Park Road Atlanta, GA 544 3,140 69 544 3,209 3,753
434 Industrial Park Road Atlanta, GA 234 1,365 91 234 1,456 1,690
435 Industrial Park Road Atlanta, GA 281 1,638 64 281 1,702 1,983
14101 Industrial Park Boulevard Atlanta, GA 285 1,658 524 285 2,182 2,467
801-804 Blacklawn Road Atlanta, GA 361 2,095 167 361 2,262 2,623
1665 Dogwood Drive Atlanta, GA 635 3,662 24 635 3,686 4,321
1715 Dogwood Drive Atlanta, GA 288 1,675 97 288 1,772 2,060
11235 Harland Drive Atlanta, GA 125 739 30 125 769 894
700 Westlake Parkway Atlanta, GA 213 1,551 523 223 2,064 2,287
800 Westlake Parkway Atlanta, GA 450 2,645 460 479 3,076 3,555
4050 Southmeadow Parkway Atlanta, GA 401 2,813 162 425 2,951 3,376
4051 Southmeadow Parkway Atlanta, GA 697 3,486 843 726 4,300 5,026
4071 Southmeadow Parkway Atlanta, GA 750 4,460 722 828 5,104 5,932
4081 Southmeadow Parkway Atlanta, GA 1,012 5,450 617 1,157 5,922 7,079
1875 Rockdale Industrial Blvd. Atlanta, GA 386 2,264 201 386 2,465 2,851
3312 N. Berkeley Lake Road Duluth, GA 2,937 16,644 963 3,053 17,491 20,544
370 Great Southwest Parkway (m) Atlanta, GA 527 2,984 352 546 3,317 3,863
3495 Bankhead Highway (m) Atlanta, GA 983 5,568 297 1,021 5,827 6,848
955 Cobb Place Kennesaw, GA 780 4,420 170 804 4,566 5,370
6105 Boatrock Blvd Atlanta, GA 89 504 24 91 526 617
1640 Sands Place Marietta, GA 162 920 39 166 955 1,121
7000 Highland Parkway Smyrna, GA 761 4,213 83 772 4,285 5,057
2084 Lake Industrial Court Conyers, GA 662 - (658) - 4 4
BALTIMORE
- ---------
3431 Benson Baltimore, MD 553 3,062 96 562 3,149 3,711
1801 Portal Baltimore, MD 251 1,387 149 271 1,516 1,787
1811 Portal Baltimore, MD 327 1,811 190 354 1,974 2,328
1831 Portal Baltimore, MD 268 1,486 155 290 1,619 1,909
1821 Portal Baltimore, MD 430 2,380 507 467 2,850 3,317
1820 Portal Baltimore, MD (i) 884 4,891 151 899 5,027 5,926
4845 Governers Way Frederick, MD 810 4,487 113 824 4,586 5,410
8900 Yellow Brick Road Baltimore, MD 447 2,473 201 475 2,646 3,121
7476 New Ridge Hanover, MD 394 2,182 65 401 2,240 2,641
BATON ROUGE
- -----------
11200 Industriplex Blvd. Baton Rouge, LA 463 2,624 87 475 2,699 3,174
11441 Industriplex Blvd. Baton Rouge, LA 331 1,874 191 340 2,056 2,396
11301 Industriplex Blvd. Baton Rouge, LA 265 1,499 60 273 1,551 1,824
6565 Exchequer Drive Baton Rouge, LA 461 2,614 91 473 2,693 3,166
CHICAGO
- -------
1330 West 43rd Street Chicago, IL 369 1,464 527 375 1,985 2,360
2300 Hammond Drive Schaumburg, IL 442 1,241 525 444 1,764 2,208
6500 North Lincoln Avenue Lincolnwood, IL 613 1,336 1,748 625 3,072 3,697
3600 West Pratt Avenue Lincolnwood, IL 1,050 5,767 503 1,050 6,270 7,320
917 North Shore Drive Lake Bluff, IL 556 3,212 48 556 3,260 3,816
6750 South Sayre Avenue Bedford Park, IL 224 1,309 46 224 1,355 1,579
585 Slawin Court Mount Prospect, IL 611 3,505 1 611 3,506 4,117
2300 Windsor Court Addison, IL 688 3,943 260 688 4,203 4,891
3505 Thayer Court Aurora, IL 430 2,472 17 430 2,489 2,919
3600 Thayer Court Aurora, IL 636 3,645 178 636 3,823 4,459
736-776 Industrial Drive Elmhurst, IL 349 1,994 601 349 2,595 2,944
5310-5352 East Avenue Countryside, IL 382 2,036 544 382 2,580 2,962
12330-12358 South Latrobe Alsip, IL 381 2,067 227 381 2,294 2,675
305-311 Era Drive Northbrook, IL 200 1,154 144 205 1,293 1,498
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVE (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
ATLANTA
- -------
1650 GA Highway 155 634 1991 (s)
415 Industrial Park Road 357 1986 (s)
434 Industrial Park Road 161 1988 (s)
435 Industrial Park Road 194 1986 (s)
14101 Industrial Park Boulevard 195 1984 (s)
801-804 Blacklawn Road 346 1982 (s)
1665 Dogwood Drive 417 1973 (s)
1715 Dogwood Drive 253 1973 (s)
11235 Harland Drive 94 1988 (s)
700 Westlake Parkway 301 1990 (s)
800 Westlake Parkway 374 1991 (s)
4050 Southmeadow Parkway 350 1991 (s)
4051 Southmeadow Parkway 519 1989 (s)
4071 Southmeadow Parkway 607 1991 (s)
4081 Southmeadow Parkway 702 1989 (s)
1875 Rockdale Industrial Blvd. 258 1966 (s)
3312 N. Berkeley Lake Road 1,258 1969 (s)
370 Great Southwest Parkway (m) 196 1996 (s)
3495 Bankhead Highway (m) 295 1986 (s)
955 Cobb Place 152 1991 (s)
6105 Boatrock Blvd 14 1972 (s)
1640 Sands Place 28 1977 (s)
7000 Highland Parkway 89 1998 (s)
2084 Lake Industrial Court - 1998 (s)
BALTIMORE
- ---------
3431 Benson 58 1988 (s)
1801 Portal 28 1987 (s)
1811 Portal 37 1987 (s)
1831 Portal 30 1990 (s)
1821 Portal 55 1986 (s)
1820 Portal 94 1982 (s)
4845 Governers Way 86 1988 (s)
8900 Yellow Brick Road 50 1982 (s)
7476 New Ridge 42 1987 (s)
BATON ROUGE
- -----------
11200 Industriplex Blvd. 69 1986 (s)
11441 Industriplex Blvd. 73 1987 (s)
11301 Industriplex Blvd. 42 1985 (s)
6565 Exchequer Drive 73 1986 (s)
CHICAGO
- -------
1330 West 43rd Street 1,143 1977 (s)
2300 Hammond Drive 1,196 1970 (s)
6500 North Lincoln Avenue 1,136 1965/88 (s)
3600 West Pratt Avenue 740 1953/88 (s)
917 North Shore Drive 384 1974 (s)
6750 South Sayre Avenue 162 1975 (s)
585 Slawin Court 393 1992 (s)
2300 Windsor Court 659 1986 (s)
3505 Thayer Court 285 1989 (s)
3600 Thayer Court 451 1989 (s)
736-776 Industrial Drive 354 1975 (s)
5310-5352 East Avenue 338 1975 (s)
12330-12358 South Latrobe 290 1975 (s)
305-311 Era Drive 164 1978 (s)
</TABLE>
S-2
<PAGE> 105
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ---------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
700-714 Landwehr Road Northbrook, IL 357 2,052 207 357 2,259 2,616
4330 South Racine Avenue Chicago, IL 448 1,893 239 468 2,112 2,580
13040 S. Crawford Ave. Alsip, IL 1,073 6,193 24 1,073 6,217 7,290
12241 Melrose Street Franklin Park, IL 332 1,931 1,072 469 2,866 3,335
7200 S Leamington Bedford Park, IL 798 4,595 642 818 5,217 6,035
12301-12325 S Laramie Ave Alsip, IL 650 3,692 424 659 4,107 4,766
6300 W Howard Street Niles, IL 743 4,208 328 782 4,497 5,279
301 Hintz Wheeling, IL 160 905 71 167 969 1,136
301 Alice Wheeling, IL 218 1,236 58 225 1,287 1,512
410 W 169th Street South Holland, IL 462 2,618 136 476 2,740 3,216
1001 Commerce Court Buffalo Grove, IL 615 3,485 122 626 3,596 4,222
11939 S Central Avenue Alsip, IL 1,208 6,843 141 1,224 6,968 8,192
405 East Shawmut La Grange, IL 368 2,083 104 379 2,176 2,555
2201 Lunt Elk Grove Village, IL 469 2,656 1,325 560 3,890 4,450
1010-50 Sesame Street Bensenville, IL (f) 979 5,546 226 1,003 5,748 6,751
5555 West 70th Place Bedford Park, IL 146 829 89 157 907 1,064
3200-3250 South St. Louis (m) Chicago, IL 110 625 964 116 1,583 1,699
3110-3130 South St. Louis Chicago, IL 115 650 64 120 709 829
7301 South Hamlin Chicago, IL 149 846 339 154 1,180 1,334
7401 South Pulaski Chicago, IL 664 3,763 655 685 4,397 5,082
3900 West 74th Street Chicago, IL 137 778 204 142 977 1,119
7501 S. Pulaski Chicago, IL 360 2,038 148 326 2,220 2,546
396 Fenton Lane West Chicago, IL 202 1,143 41 205 1,181 1,386
400 Wegner Drive West Chicago, IL 65 367 31 67 396 463
450 Fenton Lane West Chicago, IL 195 1,106 31 198 1,134 1,332
1275 Roosevelt Road West Chicago, IL 372 2,110 52 377 2,157 2,534
385 Fenton Lane West Chicago, IL 868 4,918 106 878 5,014 5,892
505 Wegner Drive West Chicago, IL 91 514 22 93 534 627
335 Crossroad Parkway Bolingbrook, IL 1,560 8,840 346 1,587 9,159 10,746
10435 Seymour Avenue Franklin Park, IL 181 1,024 78 189 1,094 1,283
905 Paramount Batavia, IL 243 1,375 244 250 1,612 1,862
1005 Paramount Batavia, IL 282 1,600 445 291 2,036 2,327
34-45 Lake Street Northlake, IL 440 2,491 124 452 2,603 3,055
2120-24 Roberts Broadview, IL 220 1,248 62 227 1,303 1,530
4309 South Morgan Street Chicago, IL 750 4,150 222 778 4,344 5,122
405-17 University Drive Arlington Hgts, IL 265 1,468 66 266 1,533 1,799
CINCINNATI
- ----------
9900-9970 Princeton Cincinnati, OH (c) 545 3,088 863 566 3,930 4,496
2940 Highland Avenue Cincinnati, OH (c) 1,717 9,730 761 1,772 10,436 12,208
4700-4750 Creek Road Cincinnati, OH (c) 1,080 6,118 316 1,109 6,405 7,514
4860 Duff Drive Cincinnati, OH 67 378 13 68 390 458
4866 Duff Drive Cincinnati, OH 67 379 10 68 388 456
4884 Duff Drive Cincinnati, OH 104 591 17 107 605 712
4890 Duff Drive Cincinnati, OH 104 592 21 107 610 717
9636-9643 Interocean Drive Cincinnati, OH 123 695 75 125 768 893
7600 Empire Drive Florence, KY 900 5,100 120 915 5,205 6,120
12072 Best Place Springboro, OH 426 - 3,104 443 3,087 3,530
901 Pleasant Valley Drive Springboro, OH 304 1,721 149 313 1,861 2,174
CLEVELAND
- ---------
6675 Parkland Blvd Cleveland, OH 548 3,103 172 571 3,252 3,823
21510-21600 Alexander Road (n) Oakwood, OH 509 2,883 156 526 3,022 3,548
5405 & 5505 Valley Belt Road (m) Independence, OH 371 2,101 200 385 2,287 2,672
10145 Philipp Parkway Streetsboro, OH 334 1,891 59 342 1,942 2,284
4410 Hamann Willoughby, OH 138 782 82 154 848 1,002
COLUMBUS
- --------
6911 Americana Parkway Columbus, OH 314 1,777 127 321 1,897 2,218
3800 Lockbourne Industrial Parkway Columbus, OH 1,133 6,421 43 1,130 6,467 7,597
3880 Groveport Road Columbus, OH 2,145 12,154 445 2,165 12,579 14,744
1819 North Walcutt Road Columbus, OH 810 4,590 185 830 4,755 5,585
4300 Cemetery Road Hilliard, OH 1,103 6,248 215 1,160 6,406 7,566
4115 Leap Road (m) Hilliard, OH 758 4,297 104 772 4,387 5,159
3300 Lockbourne Columbus, OH 708 3,920 55 709 3,974 4,683
DALLAS
- ------
1275-1281 Roundtable Drive Dallas, TX 148 839 84 153 918 1,071
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVE (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
700-714 Landwehr Road 265 1978 (s)
4330 South Racine Avenue 1,276 1978 (s)
13040 S. Crawford Ave. 673 1976 (s)
12241 Melrose Street 323 1969 (s)
7200 S Leamington 376 1950 (s)
12301-12325 S Laramie Ave 310 1975 (s)
6300 W Howard Street 340 1956/1964 (s)
301 Hintz 72 1960 (s)
301 Alice 96 1965 (s)
410 W 169th Street 193 1974 (s)
1001 Commerce Court 168 1989 (s)
11939 S Central Avenue 294 1972 (s)
405 East Shawmut 86 1965 (s)
2201 Lunt 136 1963 (s)
1010-50 Sesame Street 179 1976 (s)
5555 West 70th Place 28 1973 (s)
3200-3250 South St. Louis (m) 55 1968 (s)
3110-3130 South St. Louis 22 1968 (s)
7301 South Hamlin 35 1975 (s)
7401 South Pulaski 142 1975 (s)
3900 West 74th Street 39 1975 (s)
7501 S. Pulaski 64 1975 (s)
396 Fenton Lane 30 1987 (s)
400 Wegner Drive 11 1988 (s)
450 Fenton Lane 28 1990 (s)
1275 Roosevelt Road 53 1986 (s)
385 Fenton Lane 124 1990 (s)
505 Wegner Drive 13 1988 (s)
335 Crossroad Parkway 225 1996 (s)
10435 Seymour Avenue 27 1967 (s)
905 Paramount 36 1977 (s)
1005 Paramount 42 1978 (s)
34-45 Lake Street 64 1978 (s)
2120-24 Roberts 33 1960 (s)
4309 South Morgan Street 90 1975 (s)
405-17 University Drive 25 1977 (s)
CINCINNATI
- ----------
9900-9970 Princeton 276 1970 (s)
2940 Highland Avenue 779 1969/1974 (s)
4700-4750 Creek Road 449 1960 (s)
4860 Duff Drive 21 1979 (s)
4866 Duff Drive 20 1979 (s)
4884 Duff Drive 31 1979 (s)
4890 Duff Drive 33 1979 (s)
9636-9643 Interocean Drive 44 1983 (s)
7600 Empire Drive 173 1964 (s)
12072 Best Place 34 1984 (s)
901 Pleasant Valley Drive 42 1984 (s)
CLEVELAND
- ---------
6675 Parkland Blvd 182 1991 (s)
21510-21600 Alexander Road (n) 101 1985 (s)
5405 & 5505 Valley Belt Road (m) 78 1983 (s)
10145 Philipp Parkway 61 1994 (s)
4410 Hamann 26 1975 (s)
COLUMBUS
- --------
6911 Americana Parkway 139 1980 (s)
3800 Lockbourne Industrial Parkway 378 1986 (s)
3880 Groveport Road 719 1986 (s)
1819 North Walcutt Road 206 1973 (s)
4300 Cemetery Road 172 1968 (s)
4115 Leap Road (m) 83 1977 (s)
3300 Lockbourne 74 1964 (s)
DALLAS
- ------
1275-1281 Roundtable Drive 24 1966 (s)
</TABLE>
S-3
<PAGE> 106
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2406-2416 Walnut Ridge Dallas, TX 178 1,006 44 183 1,045 1,228
12750 Perimiter Drive Dallas, TX 638 3,618 160 660 3,756 4,416
1324-1343 Roundtable Drive Dallas, TX 178 1,006 47 184 1,047 1,231
1405-1409 Avenue II East Grand Prairie, TX 118 671 110 123 776 899
2651-2677 Manana Dallas, TX 266 1,510 71 275 1,572 1,847
2401-2419 Walnut Ridge Dallas, TX 148 839 38 153 872 1,025
4248-4252 Simonton Farmers Ranch, TX 888 5,032 233 920 5,233 6,153
900-906 Great Southwest Pkwy Arlington, TX 237 1,342 62 245 1,396 1,641
2179 Shiloh Road Garland, TX 251 1,424 41 256 1,460 1,716
2159 Shiloh Road Garland, TX 108 610 19 110 627 737
2701 Shiloh Road Garland, TX 818 4,636 742 923 5,273 6,196
12784 Perimeter Drive (n) Dallas, TX 350 1,986 96 360 2,072 2,432
3000 West Commerce Dallas, TX 456 2,584 116 469 2,687 3,156
3030 Hansboro Dallas, TX 266 1,510 86 276 1,586 1,862
5222 Cockrell Hill Dallas, TX 296 1,677 79 306 1,746 2,052
405-407 113th Arlington, TX 181 1,026 33 185 1,055 1,240
816 111th Street Arlington, TX 251 1,421 56 258 1,470 1,728
1017-25 Jacksboro Highway Fort Worth, TX 97 537 40 103 571 674
7341 Dogwwod Park Richland Hills, TX 79 435 33 84 463 547
7427 Dogwwod Park Richland Hills, TX 96 532 40 102 566 668
7348-54 Tower Street Richland Hills, TX 88 489 37 94 520 614
7370 Dogwwod Park Richland Hills, TX (l) 91 503 37 96 535 631
7339-41 Tower Street Richland Hills, TX 98 541 39 104 574 678
7437-45 Tower Street Richland Hills, TX 102 563 41 108 598 706
7331-59 Airport Freeway Richland Hills, TX 354 1,958 126 372 2,066 2,438
7338-60 Dogwwod Park Richland Hills, TX 106 587 43 112 624 736
7450-70 Dogwwod Park Richland Hills, TX (l) 106 584 42 112 620 732
7423-49 Airport Freeway Richland Hills, TX (l) 293 1,621 148 308 1,754 2,062
7400 Whitehall Street Richland Hills, TX 109 603 43 115 640 755
DAYTON
- ------
6094-6104 Executive Blvd Dayton, OH 181 1,025 75 187 1,094 1,281
6202-6220 Executive Blvd Dayton, OH 268 1,521 99 275 1,613 1,888
6268-6294 Executive Blvd Dayton, OH 255 1,444 106 262 1,543 1,805
5749-5753 Executive Blvd Dayton, OH 50 282 81 53 360 413
6230-6266 Executive Blvd Dayton, OH 271 1,534 131 281 1,655 1,936
2200-2224 Sandridge Road Moriane, OH 218 1,233 103 226 1,328 1,554
8119-8137 Uehling Lane Dayton, OH 103 572 10 105 580 685
DENVER
- ------
7100 North Broadway - 1 Denver, CO 201 1,141 198 215 1,325 1,540
7100 North Broadway - 2 Denver, CO 203 1,150 112 204 1,261 1,465
7100 North Broadway - 3 Denver, CO 139 787 41 140 827 967
7100 North Broadway - 5 Denver, CO 180 1,018 65 178 1,085 1,263
7100 North Broadway - 6 Denver, CO 269 1,526 64 271 1,588 1,859
10691 East Bethany Drive Aurora, CO 186 1,054 32 188 1,084 1,272
20100 East 32nd Avenue Parkway Aurora, CO 333 1,888 295 337 2,179 2,516
15700-15820 West 6th Avenue Golden, Co 333 1,887 44 337 1,927 2,264
12850-15884 West 6th Avenue Golden, Co 201 1,139 24 206 1,158 1,364
5454 Washington Denver, CO 154 873 38 156 909 1,065
5801 West 6th Avenue Lakewood, CO 74 418 (4) 72 416 488
5805 West 6th Avenue Lakewood, CO 97 549 39 99 586 685
5815 West 6th Avenue Lakewood, CO 99 560 9 99 569 668
5825 West 6th Avenue Lakewood, CO 99 559 10 99 569 668
5835 West 6th Avenue Lakewood, CO 97 552 11 98 562 660
525 East 70th Street Denver, CO 68 384 8 69 391 460
565 East 70th Street Denver, CO 169 960 25 171 983 1,154
605 East 70th Street Denver, CO 192 1,089 28 194 1,115 1,309
625 East 70th Street Denver, CO 136 768 20 137 787 924
665 East 70th Street Denver, CO 136 768 28 137 795 932
700 West 48th Street Denver, CO 302 1,711 78 307 1,784 2,091
702 West 48th Street Denver, CO 135 763 88 139 847 986
800 East 73rd Denver, CO 225 1,273 16 224 1,290 1,514
850 East 73rd Denver, CO 177 1,005 12 177 1,017 1,194
6425 North Washington Denver, CO 374 2,118 48 383 2,157 2,540
3370 North Peoria Street Aurora, CO 163 924 144 163 1,068 1,231
3390 North Peoria Street Aurora, CO 145 822 25 147 845 992
3508-3538 North Peoria Street Aurora, CO 260 1,472 58 264 1,526 1,790
3568 North Peoria Street Aurora, CO 222 1,260 56 225 1,313 1,538
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
2406-2416 Walnut Ridge 28 1978 (s)
12750 Perimiter Drive 101 1979 (s)
1324-1343 Roundtable Drive 28 1972 (s)
1405-1409 Avenue II East 19 1969 (s)
2651-2677 Manana 43 1966 (s)
2401-2419 Walnut Ridge 24 1978 (s)
4248-4252 Simonton 141 1973 (s)
900-906 Great Southwest Pkwy 38 1972 (s)
2179 Shiloh Road 39 1982 (s)
2159 Shiloh Road 17 1982 (s)
2701 Shiloh Road 144 1981 (s)
12784 Perimeter Drive (n) 56 1981 (s)
3000 West Commerce 72 1980 (s)
3030 Hansboro 42 1971 (s)
5222 Cockrell Hill 47 1973 (s)
405-407 113th 28 1969 (s)
816 111th Street 40 1972 (s)
1017-25 Jacksboro Highway 2 1970 (s)
7341 Dogwwod Park 2 1973 (s)
7427 Dogwwod Park 2 1973 (s)
7348-54 Tower Street 2 1978 (s)
7370 Dogwwod Park 2 1987 (s)
7339-41 Tower Street 2 1980 (s)
7437-45 Tower Street 2 1977 (s)
7331-59 Airport Freeway 9 1987 (s)
7338-60 Dogwwod Park 3 1978 (s)
7450-70 Dogwwod Park 3 1985 (s)
7423-49 Airport Freeway 7 1985 (s)
7400 Whitehall Street 3 1994 (s)
DAYTON
- ------
6094-6104 Executive Blvd 70 1975 (s)
6202-6220 Executive Blvd 104 1976 (s)
6268-6294 Executive Blvd 99 1989 (s)
5749-5753 Executive Blvd 27 1975 (s)
6230-6266 Executive Blvd 98 1979 (s)
2200-2224 Sandridge Road 62 1983 (s)
8119-8137 Uehling Lane 4 1978 (s)
DENVER
- ------
7100 North Broadway - 1 46 1978 (s)
7100 North Broadway - 2 37 1978 (s)
7100 North Broadway - 3 27 1978 (s)
7100 North Broadway - 5 46 1978 (s)
7100 North Broadway - 6 53 1978 (s)
10691 East Bethany Drive 33 1979 (s)
20100 East 32nd Avenue Parkway 115 1997 (s)
15700-15820 West 6th Avenue 60 1978 (s)
12850-15884 West 6th Avenue 37 1978 (s)
5454 Washington 31 1985 (s)
5801 West 6th Avenue 13 1980 (s)
5805 West 6th Avenue 18 1980 (s)
5815 West 6th Avenue 18 1980 (s)
5825 West 6th Avenue 18 1980 (s)
5835 West 6th Avenue 17 1980 (s)
525 East 70th Street 12 1985 (s)
565 East 70th Street 31 1985 (s)
605 East 70th Street 36 1985 (s)
625 East 70th Street 25 1985 (s)
665 East 70th Street 24 1985 (s)
700 West 48th Street 55 1984 (s)
702 West 48th Street 37 1984 (s)
800 East 73rd 34 1984 (s)
850 East 73rd 26 1984 (s)
6425 North Washington 54 1983 (s)
3370 North Peoria Street 31 1978 (s)
3390 North Peoria Street 27 1978 (s)
3508-3538 North Peoria Street 51 1978 (s)
3568 North Peoria Street 49 1978 (s)
</TABLE>
S-4
<PAGE> 107
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION --------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ----------- ----- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3350 Peoria Aurora, CO 215 1,216 174 217 1,388 1,605
4785 Elati Denver, CO 173 981 20 175 999 1,174
4770 Fox Street Denver, CO 132 750 17 134 765 899
1550 W. Evans Denver, CO 388 2,200 66 395 2,259 2,654
12401-41 East 37th Ave Denver, CO 129 732 21 131 751 882
3751-71 Revere Street Denver, CO 262 1,486 43 267 1,524 1,791
3871 Revere Denver, CO 361 2,047 58 368 2,098 2,466
5454 Havana Street Denver, CO 204 1,156 25 207 1,178 1,385
5500 Havana Street Denver, CO 167 946 20 169 964 1,133
4570 Ivy Street Denver, CO 219 1,239 18 221 1,255 1,476
5855 Stapleton Drive North Denver, CO 288 1,630 29 290 1,657 1,947
5885 Stapleton Drive North Denver, CO 376 2,129 48 381 2,172 2,553
5200-5280 North Broadway Denver, CO 169 960 92 171 1,050 1,221
5977-5995 North Broadway Denver, CO 268 1,518 39 271 1,554 1,825
2952-5978 North Broadway Denver, CO 414 2,346 72 422 2,410 2,832
6400 North Broadway Denver, CO 318 1,804 55 325 1,852 2,177
875 Parfer Street Lakewood, CO 288 1,633 39 293 1,667 1,960
4721 Ironton Street Denver, CO 232 1,313 37 236 1,346 1,582
833 Parfer Street Lakewood, CO 196 1,112 31 199 1,140 1,339
11005 West 8th Avenue Lakewood, CO 102 580 15 104 593 697
7100 North Broadway - 7 Denver, CO 215 1,221 108 217 1,327 1,544
7100 North Broadway - 8 Denver, CO 79 448 35 80 482 562
6804 East 48th Avenue Denver, CO 253 1,435 29 256 1,461 1,717
445 Bryant Street Denver, CO 1,831 10,219 46 1,829 10,267 12,096
East 47th Drive - A Denver, CO 474 2,689 397 509 3,051 3,560
Centenial Airport Business Pk. Denver, CO 640 3,629 124 642 3,751 4,393
9500 West 49th Street - A Wheatridge, CO 432 2,448 19 434 2,465 2,899
9500 West 49th Street - B Wheatridge, CO 235 1,330 (52) 226 1,287 1,513
9500 West 49th Street - C Wheatridge, CO 602 3,409 17 600 3,428 4,028
9500 West 49th Street - D Wheatridge, CO 271 1,537 (156) 246 1,406 1,652
8100 South Park Way - A Littleton, CO 442 2,507 213 428 2,734 3,162
8100 South Park Way - B Littleton, CO 103 582 137 104 718 822
8100 South Park Way - C Littleton, CO 568 3,219 59 575 3,271 3,846
451-591 East 124th Avenue Littleton, CO 386 2,188 41 391 2,224 2,615
14100 East Jewell Aurora, CO 395 2,240 90 401 2,324 2,725
14190 East Jewell Aurora, CO 199 1,126 48 201 1,172 1,373
608 Garrison Street Lakewood, CO 265 1,501 56 267 1,555 1,822
610 Garrison Street Lakewood, CO 264 1,494 74 265 1,567 1,832
1111 West Evans (A&C) Denver, CO 233 1,321 31 236 1,349 1,585
1111 West Evans (B) Denver, CO 30 169 3 30 172 202
15000 West 6th Avenue Golden, Co 913 5,174 122 917 5,292 6,209
14998 West 6th Avenue Bldg E Golden, Co 565 3,199 73 568 3,269 3,837
14998 West 6th Avenue Bldg F Englewood, CO 269 1,525 17 271 1,540 1,811
12503 East Euclid Drive Denver, CO 1,219 6,905 149 1,229 7,044 8,273
6547 South Racine Circle Denver, CO 748 4,241 199 753 4,435 5,188
7800 East Iliff Avenue Denver, CO 196 1,110 29 198 1,137 1,335
2369 South Trenton Way Denver, CO 292 1,656 27 294 1,681 1,975
2370 South Trenton Way Denver, CO 200 1,132 83 201 1,214 1,415
2422 S. Trenton Way Denver, CO 241 1,364 83 243 1,445 1,688
2452 South Trenton Way Denver, CO 421 2,386 50 426 2,431 2,857
651 Topeka Way Denver, CO 194 1,099 24 197 1,120 1,317
680 Atchinson Way Denver, CO 194 1,099 24 197 1,120 1,317
8122 South Park Lane - A Littleton, CO 394 2,232 157 398 2,385 2,783
8122 South Park Lane - B Littleton, CO 186 1,054 38 188 1,090 1,278
1600 South Abilene Aurora, CO 465 2,633 72 470 2,700 3,170
1620 South Abilene Aurora, CO 268 1,520 52 270 1,570 1,840
1640 South Abilene Aurora, CO 368 2,085 75 371 2,157 2,528
13900 East Florida Ave Aurora, CO 189 1,071 36 190 1,106 1,296
4301 South Federal Boulevard Englewood, CO 237 1,341 58 239 1,397 1,636
14401-14492 East 33rd Place Aurora, CO 445 2,519 194 453 2,705 3,158
11701 East 53rd Avenue Denver, CO 416 2,355 56 422 2,405 2,827
5401 Oswego Street Denver, CO 273 1,547 101 278 1,643 1,921
3811 Joliet Denver, CO 735 4,166 92 746 4,247 4,993
2630 West 2nd Avenue Denver, CO 53 299 4 53 303 356
2650 West 2nd Avenue Denver, CO 221 1,252 26 223 1,276 1,499
14818 West 6th Avenue Bldg A Golden, Co 494 2,799 68 490 2,871 3,361
14828 West 6th Avenue Bldg B Golden, Co 519 2,942 152 523 3,090 3,613
12055 E. 49th Ave/4955 Peoria Denver, CO 298 1,688 73 302 1,757 2,059
4940-4950 Paris Denver, CO 152 861 33 154 892 1,046
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
3350 Peoria 41 1978 (s)
4785 Elati 31 1972 (s)
4770 Fox Street 24 1972 (s)
1550 W. Evans 70 1975 (s)
12401-41 East 37th Ave 24 1980 (s)
3751-71 Revere Street 47 1980 (s)
3871 Revere 65 1980 (s)
5454 Havana Street 37 1980 (s)
5500 Havana Street 30 1980 (s)
4570 Ivy Street 39 1985 (s)
5855 Stapleton Drive North 52 1985 (s)
5885 Stapleton Drive North 68 1985 (s)
5200-5280 North Broadway 33 1977 (s)
5977-5995 North Broadway 49 1978 (s)
2952-5978 North Broadway 75 1978 (s)
6400 North Broadway 58 1982 (s)
875 Parfer Street 52 1975 (s)
4721 Ironton Street 42 1969 (s)
833 Parfer Street 35 1974 (s)
11005 West 8th Avenue 18 1974 (s)
7100 North Broadway - 7 41 1985 (s)
7100 North Broadway - 8 15 1985 (s)
6804 East 48th Avenue 46 1973 (s)
445 Bryant Street 152 1960 (s)
East 47th Drive - A 97 1997 (s)
Centenial Airport Business Pk. 147 1997 (s)
9500 West 49th Street - A 77 1997 (s)
9500 West 49th Street - B 42 1997 (s)
9500 West 49th Street - C 115 1997 (s)
9500 West 49th Street - D 49 1997 (s)
8100 South Park Way - A 99 1997 (s)
8100 South Park Way - B 47 1984 (s)
8100 South Park Way - C 102 1984 (s)
451-591 East 124th Avenue 69 1979 (s)
14100 East Jewell 72 1980 (s)
14190 East Jewell 36 1980 (s)
608 Garrison Street 50 1984 (s)
610 Garrison Street 50 1984 (s)
1111 West Evans (A&C) 42 1986 (s)
1111 West Evans (B) 5 1986 (s)
15000 West 6th Avenue 169 1985 (s)
14998 West 6th Avenue Bldg E 105 1995 (s)
14998 West 6th Avenue Bldg F 48 1995 (s)
12503 East Euclid Drive 219 1986 (s)
6547 South Racine Circle 148 1996 (s)
7800 East Iliff Avenue 36 1983 (s)
2369 South Trenton Way 53 1983 (s)
2370 South Trenton Way 40 1983 (s)
2422 S. Trenton Way 44 1983 (s)
2452 South Trenton Way 76 1983 (s)
651 Topeka Way 28 1985 (s)
680 Atchinson Way 28 1985 (s)
8122 South Park Lane - A 73 1986 (s)
8122 South Park Lane - B 34 1986 (s)
1600 South Abilene 84 1986 (s)
1620 South Abilene 49 1986 (s)
1640 South Abilene 66 1986 (s)
13900 East Florida Ave 34 1986 (s)
4301 South Federal Boulevard 46 1997 (s)
14401-14492 East 33rd Place 84 1979 (s)
11701 East 53rd Avenue 75 1985 (s)
5401 Oswego Street 53 1985 (s)
3811 Joliet 1 1977 (s)
2630 West 2nd Avenue 9 1970 (s)
2650 West 2nd Avenue 40 1970 (s)
14818 West 6th Avenue Bldg A 95 1985 (s)
14828 West 6th Avenue Bldg B 102 1985 (s)
12055 E. 49th Ave/4955 Peoria 44 1984 (s)
4940-4950 Paris 22 1984 (s)
</TABLE>
S-5
<PAGE> 108
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION ---------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
4970 Paris Denver, CO 95 537 12 96 548 644
5010 Paril Denver, CO 89 505 13 91 516 607
7367 South Revere Parkway Englewood, CO 926 5,124 158 934 5,274 6,208
DES MOINES
- ----------
1550 East Washington Avenue Des Moines, IA 610 4,251 771 623 5,009 5,632
1600 East Washington Avenue Des Moines, IA 209 1,557 165 221 1,710 1,931
4121 McDonald Avenue Des Moines, IA 390 2,931 303 416 3,208 3,624
4141 McDonald Avenue Des Moines, IA 706 5,518 647 787 6,084 6,871
4161 McDonald Avenue Des Moines, IA 389 3,046 648 467 3,616 4,083
5701 NE 17th Street Des Moines, IA 162 918 130 175 1,035 1,210
DETROIT
- -------
12000 Merriman Road Livonia, MI 453 3,651 1,417 440 5,081 5,521
238 Executive Drive Troy, MI 52 173 428 100 553 653
256 Executive Drive Troy, MI 44 146 409 85 514 599
301 Executive Drive Troy, MI 71 293 521 133 752 885
449 Executive Drive Troy, MI 125 425 836 218 1,168 1,386
501 Executive Drive Troy, MI 71 236 586 129 764 893
645 Executive Drive Troy, MI 184 940 360 234 1,250 1,484
451 Robbins Drive Troy, MI 96 448 966 192 1,318 1,510
700 Stephenson Highway Troy, MI 250 854 1,361 386 2,079 2,465
800 Stephenson Highway Troy, MI 558 2,341 2,174 654 4,419 5,073
1150 Stephenson Highway Troy, MI 178 966 316 200 1,260 1,460
1200 Stephenson Highway Troy, MI 246 1,115 631 284 1,708 1,992
1035 Crooks Road Troy, MI 114 414 544 143 929 1,072
1095 Crooks Road Troy, MI 331 1,017 948 360 1,936 2,296
1416 Meijer Drive Troy, MI 94 394 390 121 757 878
1624 Meijer Drive Troy, MI 236 1,406 801 373 2,070 2,443
1972 Meijer Drive Troy, MI 315 1,301 726 372 1,970 2,342
2112 Meijer Drive Troy, MI 141 714 609 229 1,235 1,464
1621 Northwood Drive Troy, MI 85 351 1,042 215 1,263 1,478
1707 Northwood Drive Troy, MI 95 262 1,157 239 1,275 1,514
1749 Northwood Drive Troy, MI 107 477 466 164 886 1,050
1788 Northwood Drive Troy, MI 50 196 462 103 605 708
1821 Northwood Drive Troy, MI 132 523 746 220 1,181 1,401
1826 Northwood Drive Troy, MI 55 208 396 103 556 659
1864 Northwood Drive Troy, MI 57 190 442 107 582 689
1902 Northwood Drive Troy, MI 234 807 2,164 511 2,694 3,205
1921 Northwood Drive Troy, MI 135 589 1,165 291 1,598 1,889
2230 Elliott Avenue Troy, MI 46 174 419 95 544 639
2237 Elliott Avenue Troy, MI 48 159 419 90 536 626
2277 Elliott Avenue Troy, MI 48 188 438 104 570 674
2291 Elliott Avenue Troy, MI 52 209 342 86 517 603
2451 Elliott Avenue Troy, MI 78 319 840 164 1,073 1,237
2730 Research Drive Rochester Hills, MI 915 4,215 550 903 4,777 5,680
2791 Research Drive Rochester Hills, MI 557 2,731 296 560 3,024 3,584
2871 Research Drive Rochester Hills, MI 324 1,487 270 327 1,754 2,081
2911 Research Drive Rochester Hills, MI 505 2,136 382 504 2,519 3,023
3011 Research Drive Rochester Hills, MI 457 2,104 325 457 2,429 2,886
2870 Technology Drive Rochester Hills, MI 275 1,262 235 279 1,493 1,772
2890 Technology Drive Rochester Hills, MI 199 902 208 206 1,103 1,309
2900 Technology Drive Rochester Hills, MI 214 977 494 219 1,466 1,685
2920 Technology Drive Rochester Hills, MI 149 671 156 153 823 976
2930 Technology Drive Rochester Hills, MI 131 594 383 138 970 1,108
2950 Technology Drive Rochester Hills, MI 178 819 258 185 1,070 1,255
2960 Technology Drive Rochester Hills, MI 281 1,277 243 283 1,518 1,801
23014 Commerce Drive Farmington Hills, MI 39 203 125 56 311 367
23028 Commerce Drive Farmington Hills, MI 98 507 357 125 837 962
23035 Commerce Drive Farmington Hills, MI 71 355 179 93 512 605
23042 Commerce Drive Farmintgon Hills, MI 67 277 330 89 585 674
23065 Commerce Drive Farmington Hills, MI 71 408 143 93 529 622
23070 Commerce Drive Farmington Hills, MI 112 442 660 125 1,089 1,214
23079 Commerce Drive Farmington Hills, MI 68 301 181 79 471 550
23093 Commerce Drive Farmington Hills, MI 211 1,024 762 295 1,702 1,997
23135 Commerce Drive Farmington Hills, MI 146 701 229 158 918 1,076
23149 Commerce Drive Farmington Hills, MI 266 1,005 464 274 1,461 1,735
23163 Commerce Drive Farmington Hills, MI 111 513 243 138 729 867
23177 Commerce Drive Farmington Hills, MI 175 1,007 515 254 1,443 1,697
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
4970 Paris 14 1984 (s)
5010 Paril 13 1984 (s)
7367 South Revere Parkway 108 1997 (s)
DES MOINES
- ----------
1550 East Washington Avenue 717 1987 (s)
1600 East Washington Avenue 204 1987 (s)
4121 McDonald Avenue 382 1977 (s)
4141 McDonald Avenue 723 1976 (s)
4161 McDonald Avenue 514 1979 (s)
5701 NE 17th Street 38 1968 (s)
DETROIT
12000 Merriman Road 2,707 1975 (s)
238 Executive Drive 264 1973 (s)
256 Executive Drive 212 1974 (s)
301 Executive Drive 337 1974 (s)
449 Executive Drive 530 1975 (s)
501 Executive Drive 244 1984 (s)
645 Executive Drive 645 1972 (s)
451 Robbins Drive 519 1975 (s)
700 Stephenson Highway 853 1978 (s)
800 Stephenson Highway 1,509 1979 (s)
1150 Stephenson Highway 457 1982 (s)
1200 Stephenson Highway 647 1980 (s)
1035 Crooks Road 372 1980 (s)
1095 Crooks Road 707 1986 (s)
1416 Meijer Drive 282 1980 (s)
1624 Meijer Drive 791 1984 (s)
1972 Meijer Drive 701 1985 (s)
2112 Meijer Drive 515 1980 (s)
1621 Northwood Drive 593 1977 (s)
1707 Northwood Drive 483 1983 (s)
1749 Northwood Drive 395 1977 (s)
1788 Northwood Drive 269 1977 (s)
1821 Northwood Drive 530 1977 (s)
1826 Northwood Drive 245 1977 (s)
1864 Northwood Drive 258 1977 (s)
1902 Northwood Drive 1,229 1977 (s)
1921 Northwood Drive 752 1977 (s)
2230 Elliott Avenue 258 1974 (s)
2237 Elliott Avenue 232 1974 (s)
2277 Elliott Avenue 251 1975 (s)
2291 Elliott Avenue 243 1974 (s)
2451 Elliott Avenue 422 1974 (s)
2730 Research Drive 1,678 1988 (s)
2791 Research Drive 1,004 1991 (s)
2871 Research Drive 581 1991 (s)
2911 Research Drive 864 1992 (s)
3011 Research Drive 853 1988 (s)
2870 Technology Drive 517 1988 (s)
2890 Technology Drive 362 1991 (s)
2900 Technology Drive 525 1992 (s)
2920 Technology Drive 264 1992 (s)
2930 Technology Drive 300 1991 (s)
2950 Technology Drive 356 1991 (s)
2960 Technology Drive 505 1992 (s)
23014 Commerce Drive 108 1983 (s)
23028 Commerce Drive 292 1983 (s)
23035 Commerce Drive 186 1983 (s)
23042 Commerce Drive 215 1983 (s)
23065 Commerce Drive 188 1983 (s)
23070 Commerce Drive 354 1983 (s)
23079 Commerce Drive 180 1983 (s)
23093 Commerce Drive 602 1983 (s)
23135 Commerce Drive 325 1986 (s)
23149 Commerce Drive 537 1985 (s)
23163 Commerce Drive 257 1986 (s)
23177 Commerce Drive 561 1986 (s)
</TABLE>
S-6
<PAGE> 109
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) --------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
23206 Commerce Drive Farmington Hills, MI 125 531 627 137 1,146 1,283
23290 Commerce Drive Farmington Hills, MI 124 707 643 210 1,264 1,474
23370 Commerce Drive Farmington Hills, MI 59 233 165 66 391 457
24492 Indoplex Circle Farmington Hills, MI 67 370 724 175 986 1,161
24528 Indoplex Circle Farmington Hills, MI 91 536 1,082 263 1,446 1,709
31800 Plymouth Road - Building 1 Livonia, MI 3,415 19,481 2,400 3,417 21,879 25,296
31800 Plymouth Road - Building 2 Livonia, MI 671 3,860 389 674 4,246 4,920
31800 Plymouth Road - Building 3 Livonia, MI 322 1,869 154 324 2,021 2,345
31800 Plymouth Road - Building 6 Livonia, MI 557 3,207 991 560 4,195 4,755
31800 Plymouth Road - Building 7 Livonia, MI 139 832 10 141 840 981
21477 Bridge Street Southfield, MI 244 1,386 220 253 1,597 1,850
32450 N Avis Drive Madison Heights, MI 281 1,590 67 286 1,652 1,938
32200 N Avis Drive Madison Heights, MI 408 2,311 156 411 2,464 2,875
11813 Hubbard Livonia, MI 177 1,001 42 180 1,040 1,220
11866 Hubbard Livonia, MI 189 1,073 29 191 1,100 1,291
12050-12300 Hubbard (m) Livonia, MI 425 2,410 302 428 2,709 3,137
38200 Plymouth Road Livonia, MI 1,215 - 4,614 1,268 4,561 5,829
38220 Plymouth Road Livonia, MI 756 - 5,289 729 5,316 6,045
38300 Plymouth Road Livonia, MI 729 - 4,648 857 4,520 5,377
12707 Eckles Road Plymouth Township, MI 255 1,445 110 267 1,543 1,810
9300-9328 Harrison Rd Romulus, MI 147 834 126 154 953 1,107
9330-9358 Harrison Rd Romulus, MI 81 456 96 85 548 633
28420-28448 Highland Rd Romulus, MI 143 809 132 149 935 1,084
28450-28478 Highland Rd Romulus, MI 81 461 239 85 696 781
28421-28449 Highland Rd Romulus, MI 109 617 196 114 808 922
28451-28479 Highland Rd Romulus, MI 107 608 104 112 707 819
28825-28909 Highland Rd Romulus, MI 70 395 118 73 510 583
28933-29017 Highland Rd Romulus, MI 112 634 124 117 753 870
28824-28908 Highland Rd Romulus, MI 134 760 195 140 949 1,089
28932-29016 Highland Rd Romulus, MI 123 694 229 128 918 1,046
9710-9734 Harrison Rd Romulus, MI 125 706 136 130 837 967
9740-9772 Harrison Rd Romulus, MI 132 749 186 138 929 1,067
9840-9868 Harrison Rd Romulus, MI 144 815 118 150 927 1,077
9800-9824 Harrison Rd Romulus, MI 117 664 93 123 751 874
29265-29285 Airport Dr Romulus, MI 140 794 169 147 956 1,103
29185-29225 Airport Dr Romulus, MI 140 792 235 146 1,021 1,167
29149-29165 Airport Dr Romulus, MI 216 1,225 260 226 1,475 1,701
29101-29115 Airport Dr Romulus, MI 130 738 222 136 954 1,090
29031-29045 Airport Dr Romulus, MI 124 704 102 130 800 930
29050-29062 Airport Dr Romulus, MI 127 718 96 133 808 941
29120-29134 Airport Dr Romulus, MI 161 912 159 168 1,064 1,232
29200-29214 Airport Dr Romulus, MI 170 963 257 178 1,212 1,390
9301-9339 Middlebelt Rd Romulus, MI 124 703 114 130 811 941
21405 Trolley Industrial Drive Taylor, MI 758 4,293 185 778 4,458 5,236
26980 Trolley Industrial Drive Taylor, MI 450 2,550 131 463 2,668 3,131
12050-12200 Farmington Road Livonia, MI 201 1,115 21 202 1,135 1,337
33200 Capitol Avenue Livonia, MI 236 1,309 82 237 1,390 1,627
32975 Capitol Avenue Livonia, MI 135 748 23 136 770 906
2725 S. Industrial Highway Ann Arbor, MI 660 3,654 248 661 3,901 4,562
32920 Capitol Avenue Livonia, MI 76 422 11 77 432 509
32940 Capitol Avenue Livonia, MI 57 314 10 57 324 381
11862 Brookfield Avenue Livonia, MI 85 471 14 85 485 570
11923 Brookfield Avenue Livonia, MI 120 665 351 120 1,016 1,136
11965 Brookfield Avenue Livonia, MI 120 665 14 120 679 799
34005 Schoolcraft Road Livonia, MI 107 592 20 107 612 719
13405 Stark Road Livonia, MI 46 254 14 46 268 314
1170 Chicago Road Troy, MI 249 1,380 22 250 1,401 1,651
1200 Chicago Road Troy, MI 268 1,483 24 268 1,507 1,775
450 Robbins Drive Troy, MI 166 920 16 167 935 1,102
556 Robbins Drive Troy, MI 59 329 11 60 339 399
1230 Chicago Road Troy, MI 271 1,498 23 271 1,521 1,792
12886 Westmore Avenue Livonia, MI 190 1,050 32 190 1,082 1,272
12898 Westmore Avenue Livonia, MI 190 1,050 15 190 1,065 1,255
33025 Industrial Road Livonia, MI 80 442 16 80 458 538
2002 Stephenson Highway Troy, MI 179 994 18 180 1,011 1,191
47711 Clipper Street Plymouth Twsp, MI 539 2,983 30 540 3,012 3,552
32975 Industrial Road Livonia, MI 160 887 38 161 924 1,085
32985 Industrial Road Livonia, MI 137 761 20 138 780 918
32995 Industrial Road Livonia, MI 160 887 13 161 899 1,060
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
23206 Commerce Drive 328 1985 (s)
23290 Commerce Drive 491 1980 (s)
23370 Commerce Drive 145 1980 (s)
24492 Indoplex Circle 442 1976 (s)
24528 Indoplex Circle 699 1976 (s)
31800 Plymouth Road - Building 1 2,577 1968/89 (s)
31800 Plymouth Road - Building 2 477 1968/89 (s)
31800 Plymouth Road - Building 3 240 1968/89 (s)
31800 Plymouth Road - Building 6 511 1968/89 (s)
31800 Plymouth Road - Building 7 98 1968/89 (s)
21477 Bridge Street 173 1986 (s)
32450 N Avis Drive 121 1974 (s)
32200 N Avis Drive 183 1973 (s)
11813 Hubbard 77 1979 (s)
11866 Hubbard 80 1979 (s)
12050-12300 Hubbard (m) 243 1981 (s)
38200 Plymouth Road 210 1997 (s)
38220 Plymouth Road 108 1988 (s)
38300 Plymouth Road 98 1997 (s)
12707 Eckles Road 93 1990 (s)
9300-9328 Harrison Rd 52 1978 (s)
9330-9358 Harrison Rd 28 1978 (s)
28420-28448 Highland Rd 52 1979 (s)
28450-28478 Highland Rd 33 1979 (s)
28421-28449 Highland Rd 48 1980 (s)
28451-28479 Highland Rd 38 1980 (s)
28825-28909 Highland Rd 36 1981 (s)
28933-29017 Highland Rd 47 1982 (s)
28824-28908 Highland Rd 49 1982 (s)
28932-29016 Highland Rd 56 1982 (s)
9710-9734 Harrison Rd 61 1987 (s)
9740-9772 Harrison Rd 69 1987 (s)
9840-9868 Harrison Rd 52 1987 (s)
9800-9824 Harrison Rd 39 1987 (s)
29265-29285 Airport Dr 50 1983 (s)
29185-29225 Airport Dr 52 1983 (s)
29149-29165 Airport Dr 78 1984 (s)
29101-29115 Airport Dr 58 1985 (s)
29031-29045 Airport Dr 42 1985 (s)
29050-29062 Airport Dr 43 1986 (s)
29120-29134 Airport Dr 57 1986 (s)
29200-29214 Airport Dr 62 1985 (s)
9301-9339 Middlebelt Rd 44 1983 (s)
21405 Trolley Industrial Drive 202 1971 (s)
26980 Trolley Industrial Drive 88 1997 (s)
12050-12200 Farmington Road 21 1973 (s)
33200 Capitol Avenue 25 1977 (s)
32975 Capitol Avenue 14 1978 (s)
2725 S. Industrial Highway 74 1997 (s)
32920 Capitol Avenue 8 1973 (s)
32940 Capitol Avenue 6 1971 (s)
11862 Brookfield Avenue 9 1972 (s)
11923 Brookfield Avenue 22 1973 (s)
11965 Brookfield Avenue 13 1973 (s)
34005 Schoolcraft Road 11 1981 (s)
13405 Stark Road 5 1980 (s)
1170 Chicago Road 26 1983 (s)
1200 Chicago Road 28 1984 (s)
450 Robbins Drive 17 1976 (s)
556 Robbins Drive 6 1974 (s)
1230 Chicago Road 28 1996 (s)
12886 Westmore Avenue 20 1981 (s)
12898 Westmore Avenue 20 1981 (s)
33025 Industrial Road 8 1980 (s)
2002 Stephenson Highway 19 1986 (s)
47711 Clipper Street 56 1996 (s)
32975 Industrial Road 18 1984 (s)
32985 Industrial Road 14 1985 (s)
32995 Industrial Road 17 1983 (s)
</TABLE>
S-7
<PAGE> 110
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12874 Westmore Avenue Livonia, MI 137 761 16 138 776 914
33067 Industrial Road Livonia, MI 160 887 27 161 913 1,074
1775 Bellingham Troy, MI 344 1,902 23 344 1,925 2,269
1785 East Maple Troy, MI 92 507 11 92 518 610
1807 East Maple Troy, MI 321 1,775 22 321 1,797 2,118
9800 Chicago Road Troy, MI 206 1,141 13 207 1,153 1,360
1840 Enterprise Drive Rochester Hills, MI 573 3,170 26 573 3,196 3,769
1885 Enterprise Drive Rochester Hills, MI 209 1,158 19 210 1,176 1,386
1935-55 Enterprise Drive Rochester Hills, MI 1,285 7,144 20 1,287 7,162 8,449
5500 Enterprise Court Warren, MI 675 3,737 44 676 3,780 4,456
5800 Enterprise Court Warren, MI 202 1,117 14 202 1,131 1,333
750 Chicago Road Troy, MI 323 1,790 23 324 1,812 2,136
800 Chicago Road Troy, MI 283 1,567 25 284 1,591 1,875
850 Chicago Road Troy, MI 183 1,016 14 184 1,029 1,213
2805 S. Industrial Highway Ann Arbor, MI 318 1,762 20 319 1,781 2,100
6833 Center Drive Sterling Heights, MI 467 2,583 179 489 2,740 3,229
22731 Newman Street Dearborn, MI 542 3,001 93 543 3,093 3,636
32201 North Avis Drive Madison Heights, MI 345 1,911 85 347 1,994 2,341
1100 East Mandoline Road Madison Heights, MI 888 4,915 197 891 5,109 6,000
30081 Stephenson Highway Madison Heights, MI 271 1,499 333 272 1,831 2,103
1120 John A. Papalas Drive (n) Lincoln Park, MI 586 3,241 198 588 3,437 4,025
36555 Ecorse Romulus, MI 600 - 8,788 685 8,703 9,388
6340 Middlebelt Romulus, MI 673 - 3,420 833 3,260 4,093
GRAND RAPIDS
- ------------
2 84th Street SW Grand Rapids, MI 117 685 295 117 980 1,097
100 84th Street SW Grand Rapids, MI 255 1,477 150 255 1,627 1,882
511 76th Street SW Grand Rapids, MI 758 4,355 206 758 4,561 5,319
553 76th Street SW Grand Rapids, MI 32 191 242 32 433 465
555 76th Street SW Grand Rapids, MI 776 4,458 97 776 4,555 5,331
2925 Remico Avenue SW Grand Rapids, MI 281 1,617 21 281 1,638 1,919
2935 Walkent Court NW Grand Rapids, MI 285 1,663 202 285 1,865 2,150
3300 Kraft Avenue SE Grand Rapids, MI 838 4,810 220 838 5,030 5,868
3366 Kraft Avenue SE Grand Rapids, MI 833 4,780 625 833 5,405 6,238
4939 Starr Avenue Grand Rapids, MI 117 681 29 117 710 827
5001 Kendrick Court SE Grand Rapids, MI 210 1,221 117 210 1,338 1,548
5050 Kendrick Court SE Grand Rapids, MI 1,721 11,433 4,569 1,721 16,002 17,723
5015 52nd Street SE Grand Rapids, MI 234 1,321 35 234 1,356 1,590
5025 28th Street Grand Rapids, MI 77 488 17 77 505 582
5079 33rd Street SE Grand Rapids, MI 525 3,018 154 525 3,172 3,697
5333 33rd Street SE Grand Rapids, MI 480 2,761 82 480 2,843 3,323
5130 Patterson Avenue SE Grand Rapids, MI 137 793 21 137 814 951
3395 Kraft Avenue Grand Rapids, MI 214 1,212 73 220 1,279 1,499
3427 Kraft Avenue Grand Rapids, MI 157 892 56 162 943 1,105
4412 Coloma Road Coloma, MI 1,391 7,700 715 1,465 8,341 9,806
HARTFORD
- --------
20 Utopia Road Manchester, CT 113 703 71 114 773 887
50 Utopia Road Manchester, CT 193 1,188 14 194 1,201 1,395
171 Utopia Road Manchester, CT 174 1,076 13 176 1,087 1,263
135 Sheldon road Manchester, CT 247 1,488 89 248 1,576 1,824
169 Progress Road Manchester, CT 339 2,056 20 341 2,074 2,415
227 Progress Drive Manchester, CT 81 493 7 82 499 581
249 Progress Drive Manchester, CT 89 562 8 90 569 659
428 Hayden Station Road Windsor, CT 167 1,003 59 168 1,061 1,229
430 Hayden Station Road Windsor, CT 238 1,415 13 239 1,427 1,666
436 Hayden Station Road Windsor, CT 285 1,699 15 286 1,713 1,999
460 Hayden Station Road Windsor, CT 212 1,264 (6) 211 1,259 1,470
345 MacCausland Court Cheshire, CT 866 - 4,869 1,087 4,648 5,735
HOUSTON
- -------
2102-2314 Edwards Street Houston, TX 348 1,973 96 359 2,058 2,417
4545 Eastpark Drive Houston, TX 235 1,331 56 240 1,382 1,622
3351 Ranch St Houston, TX 272 1,541 84 278 1,619 1,897
3851 Yale St Houston, TX 413 2,343 141 425 2,472 2,897
3337-3347 Ranch Street Houston, TX 227 1,287 47 233 1,328 1,561
8505 N Loop East Houston, TX 439 2,489 123 449 2,602 3,051
4749-4799 Eastpark Dr Houston, TX 594 3,368 131 611 3,482 4,093
4851 Homestead Road Houston, TX 491 2,782 147 504 2,916 3,420
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
12874 Westmore Avenue 14 1984 (s)
33067 Industrial Road 17 1984 (s)
1775 Bellingham 36 1987 (s)
1785 East Maple 10 1985 (s)
1807 East Maple 34 1984 (s)
9800 Chicago Road 22 1985 (s)
1840 Enterprise Drive 60 1990 (s)
1885 Enterprise Drive 22 1990 (s)
1935-55 Enterprise Drive 134 1990 (s)
5500 Enterprise Court 71 1989 (s)
5800 Enterprise Court 21 1987 (s)
750 Chicago Road 34 1986 (s)
800 Chicago Road 30 1985 (s)
850 Chicago Road 19 1984 (s)
2805 S. Industrial Highway 33 1990 (s)
6833 Center Drive 57 1998 (s)
22731 Newman Street 64 1985 (s)
32201 North Avis Drive 41 1974 (s)
1100 East Mandoline Road 105 1967 (s)
30081 Stephenson Highway 33 1967 (s)
1120 John A. Papalas Drive (n) 70 1985 (s)
36555 Ecorse 103 1998 (s)
6340 Middlebelt 40 1998 (s)
GRAND RAPIDS
- ------------
2 84th Street SW 133 1986 (s)
100 84th Street SW 204 1979 (s)
511 76th Street SW 581 1986 (s)
553 76th Street SW 56 1985 (s)
555 76th Street SW 528 1987 (s)
2925 Remico Avenue SW 184 1988 (s)
2935 Walkent Court NW 203 1991 (s)
3300 Kraft Avenue SE 664 1987 (s)
3366 Kraft Avenue SE 798 1987 (s)
4939 Starr Avenue 94 1985 (s)
5001 Kendrick Court SE 153 1983 (s)
5050 Kendrick Court SE 1,709 1988 (s)
5015 52nd Street SE 152 1987 (s)
5025 28th Street 99 1967 (s)
5079 33rd Street SE 349 1990 (s)
5333 33rd Street SE 356 1991 (s)
5130 Patterson Avenue SE 100 1987 (s)
3395 Kraft Avenue 26 1985 (s)
3427 Kraft Avenue 19 1985 (s)
4412 Coloma Road 172 1967 (s)
HARTFORD
- --------
20 Utopia Road 14 1989 (s)
50 Utopia Road 22 1987 (s)
171 Utopia Road 20 1987 (s)
135 Sheldon road 33 1987 (s)
169 Progress Road 38 1987 (s)
227 Progress Drive 9 1986 (s)
249 Progress Drive 11 1985 (s)
428 Hayden Station Road 20 1988 (s)
430 Hayden Station Road 27 1987 (s)
436 Hayden Station Road 32 1988 (s)
460 Hayden Station Road 24 1985 (s)
345 MacCausland Court 52 1998 (s)
HOUSTON
- -------
2102-2314 Edwards Street 55 1961 (s)
4545 Eastpark Drive 37 1972 (s)
3351 Ranch St 43 1970 (s)
3851 Yale St 66 1971 (s)
3337-3347 Ranch Street 36 1970 (s)
8505 N Loop East 69 1981 (s)
4749-4799 Eastpark Dr 94 1979 (s)
4851 Homestead Road 79 1973 (s)
</TABLE>
S-8
<PAGE> 111
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3365-3385 Ranch Street Houston, TX 284 1,611 48 290 1,653 1,943
5050 Campbell Road Houston, TX 461 2,610 96 470 2,697 3,167
4300 Pine Timbers Houston, TX 489 2,769 130 499 2,889 3,388
10600 Hampstead Houston, TX 105 597 40 109 633 742
2300 Fairway Park Dr Houston, TX 86 488 31 89 516 605
7969 Blakenship Houston, TX 174 987 42 179 1,024 1,203
8001 Kempwood Houston, TX 98 558 30 101 585 686
7901 Blankenship Houston, TX 136 772 41 140 809 949
2500-2530 Fairway Park Drive Houston, TX 766 4,342 236 792 4,552 5,344
6550 Longpointe Houston, TX 362 2,050 98 370 2,140 2,510
1815 Turning Basin Dr Houston, TX 487 2,761 357 531 3,074 3,605
1819 Turning Basin Dr Houston, TX 231 1,308 157 251 1,445 1,696
4545 Mossford Dr Houston, TX 237 1,342 62 245 1,396 1,641
1805 Turning Basin Drive Houston, TX 564 3,197 429 616 3,574 4,190
7000 Empire Drive Houston, TX (h) 450 2,552 454 454 3,002 3,456
9777 West Gulfbank Drive Houston, TX (h) 1,217 6,899 358 1,226 7,248 8,474
INDIANAPOLIS
- ------------
2400 North Shadeland Indianapolis, IN 142 802 52 149 847 996
2402 North Shadeland Indianapolis, IN 466 2,640 251 490 2,867 3,357
7901 West 21st Street Indianapolis, IN 1,063 6,027 238 1,079 6,249 7,328
1445 Brookville Way Indianapolis, IN (c) 459 2,603 319 476 2,905 3,381
1440 Brookville Way Indianapolis, IN (c) 665 3,770 282 685 4,032 4,717
1240 Brookville Way Indianapolis, IN (c) 247 1,402 218 258 1,609 1,867
1220 Brookville Way Indianapolis, IN (c) 223 40 32 226 69 295
1345 Brookville Way Indianapolis, IN (d) 586 3,321 325 601 3,631 4,232
1350 Brookville Way Indianapolis, IN (c) 205 1,161 80 211 1,235 1,446
1315 Sadlier Circle E Dr Indianapolis, IN (d) 57 322 48 61 366 427
1341 Sadlier Circle E Dr Indianapolis, IN (d) 131 743 53 136 791 927
1322-1438 Sadlier Circle E Dr Indianapolis, IN (d) 145 822 114 152 929 1,081
1327-1441 Sadlier Circle E Dr Indianapolis, IN (d) 218 1,234 101 225 1,328 1,553
1304 Sadlier Circle E Dr Indianapolis, IN (d) 71 405 78 75 479 554
1402 Sadlier Circle E Dr Indianapolis, IN (d) 165 934 84 171 1,012 1,183
1504 Sadlier Circle E Dr Indianapolis, IN (d) 219 1,238 74 226 1,305 1,531
1311 Sadlier Circle E Dr Indianapolis, IN (d) 54 304 84 57 385 442
1365 Sadlier Circle E Dr Indianapolis, IN (d) 121 688 100 126 783 909
1352-1354 Sadlier Circle E Dr Indianapolis, IN (d) 178 1,008 126 184 1,128 1,312
1335 Sadlier Circle E Dr Indianapolis, IN (d) 81 460 57 85 513 598
1327 Sadlier Circle E Dr Indianapolis, IN (d) 52 295 25 55 317 372
1425 Sadlier Circle E Dr Indianapolis, IN (d) 21 117 24 23 139 162
1230 Brookville Way Indianapolis, IN (c) 103 586 51 109 631 740
6951 E 30th St Indianapolis, IN 256 1,449 95 265 1,535 1,800
6701 E 30th St Indianapolis, IN 78 443 40 82 479 561
6737 E 30th St Indianapolis, IN 385 2,181 147 398 2,315 2,713
1225 Brookville Way Indianapolis, IN 60 - 397 68 389 457
6555 E 30th St Indianapolis, IN 840 4,760 833 484 5,949 6,433
2432-2436 Shadeland Indianapolis, IN 212 1,199 182 230 1,363 1,593
8402-8440 E 33rd St Indianapolis, IN 222 1,260 146 230 1,398 1,628
8520-8630 E 33rd St Indianapolis, IN 326 1,848 300 336 2,138 2,474
8710-8768 E 33rd St Indianapolis, IN 175 993 94 187 1,075 1,262
3316-3346 N. Pagosa Court Indianapolis, IN 325 1,842 248 335 2,080 2,415
3331 Raton Court Indianapolis, IN 138 802 43 144 839 983
6751 E 30th St Indianapolis, IN 728 2,837 142 741 2,966 3,707
LONG ISLAND
- -----------
1140 Motor Parkway Hauppauge, NY 1,034 5,861 146 1,039 6,002 7,041
10 Edison Street Amityville, NY 183 1,036 59 185 1,093 1,278
120 Secatogue Ave Farmingdale, NY 375 2,123 59 377 2,180 2,557
100 Lauman Lane Hicksville, NY 216 1,226 88 218 1,312 1,530
200 Finn Court Farmingdale, NY 619 3,506 120 622 3,623 4,245
243 Dixon Avenue Amityville, NY 93 527 50 95 575 670
717 Broadway Avenue Holbrook, NY 790 4,474 67 794 4,537 5,331
725 Broadway Holbrook, NY 643 3,644 167 647 3,807 4,454
270 Duffy Avenue Hicksville, NY 1,305 7,393 219 1,309 7,608 8,917
280 Duffy Avenue Hicksville, NY 478 2,707 25 480 2,730 3,210
575 Underhill Boulevard Syosset, NY 2,714 15,382 320 2,724 15,692 18,416
5 Sidney Court Lindenhurst, NY 148 840 49 150 887 1,037
7 Sidney Court Lindenhurst, NY 172 975 32 174 1,005 1,179
450 Commack Road Deer Park, NY 304 1,720 54 306 1,772 2,078
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
3365-3385 Ranch Street 45 1970 (s)
5050 Campbell Road 73 1970 (s)
4300 Pine Timbers 79 1980 (s)
10600 Hampstead 17 1974 (s)
2300 Fairway Park Dr 14 1974 (s)
7969 Blakenship 28 1972 (s)
8001 Kempwood 16 1972 (s)
7901 Blankenship 22 1972 (s)
2500-2530 Fairway Park Drive 132 1974 (s)
6550 Longpointe 58 1980 (s)
1815 Turning Basin Dr 82 1980 (s)
1819 Turning Basin Dr 39 1980 (s)
4545 Mossford Dr 38 1975 (s)
1805 Turning Basin Drive 96 1980 (s)
7000 Empire Drive 75 1980 (s)
9777 West Gulfbank Drive 212 1980 (s)
INDIANAPOLIS
- ------------
2400 North Shadeland 32 1970 (s)
2402 North Shadeland 112 1970 (s)
7901 West 21st Street 204 1985 (s)
1445 Brookville Way 222 1989 (s)
1440 Brookville Way 282 1990 (s)
1240 Brookville Way 147 1990 (s)
1220 Brookville Way 5 1990 (s)
1345 Brookville Way 261 1992 (s)
1350 Brookville Way 87 1994 (s)
1315 Sadlier Circle E Dr 26 1970/1992 (s)
1341 Sadlier Circle E Dr 56 1971/1992 (s)
1322-1438 Sadlier Circle E Dr 75 1971/1992 (s)
1327-1441 Sadlier Circle E Dr 103 1992 (s)
1304 Sadlier Circle E Dr 35 1971/1992 (s)
1402 Sadlier Circle E Dr 72 1970/1992 (s)
1504 Sadlier Circle E Dr 92 1971/1992 (s)
1311 Sadlier Circle E Dr 45 1971/1992 (s)
1365 Sadlier Circle E Dr 52 1971/1992 (s)
1352-1354 Sadlier Circle E Dr 85 1970/1992 (s)
1335 Sadlier Circle E Dr 36 1971/1992 (s)
1327 Sadlier Circle E Dr 22 1971/1992 (s)
1425 Sadlier Circle E Dr 10 1971/1992 (s)
1230 Brookville Way 44 1995 (s)
6951 E 30th St 109 1995 (s)
6701 E 30th St 34 1992 (s)
6737 E 30th St 169 1995 (s)
1225 Brookville Way 14 1997 (s)
6555 E 30th St 460 1969/1981 (s)
2432-2436 Shadeland 84 1968 (s)
8402-8440 E 33rd St 78 1977 (s)
8520-8630 E 33rd St 129 1976 (s)
8710-8768 E 33rd St 64 1979 (s)
3316-3346 N. Pagosa Court 119 1977 (s)
3331 Raton Court 49 1979 (s)
6751 E 30th St 89 1997 (s)
LONG ISLAND
- -----------
1140 Motor Parkway 300 1978 (s)
10 Edison Street 54 1971 (s)
120 Secatogue Ave 109 1957 (s)
100 Lauman Lane 67 1968 (s)
200 Finn Court 181 1965 (s)
243 Dixon Avenue 28 1978 (s)
717 Broadway Avenue 228 1967 (s)
725 Broadway 190 1967 (s)
270 Duffy Avenue 391 1956 (s)
280 Duffy Avenue 137 1956 (s)
575 Underhill Boulevard 782 1967 (s)
5 Sidney Court 44 1962 (s)
7 Sidney Court 50 1964 (s)
450 Commack Road 89 1964 (s)
</TABLE>
S-9
<PAGE> 112
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
99 Layfayette Drive Syosset, NY 1,607 9,106 144 1,612 9,245 10,857
65 East Bethpage Road Plainview, NY 198 1,122 54 199 1,175 1,374
171 Milbar Boulevard Farmingdale, NY 454 2,574 111 457 2,682 3,139
95 Horseblock Road Yaphank, NY 1,313 7,439 326 1,318 7,760 9,078
151-171 East 2nd Street Huntington, NY 497 2,815 89 499 2,902 3,401
171-175 East 2nd Street Huntington, NY 493 2,792 68 495 2,858 3,353
35 Bloomingdale Road Hicksville, NY 190 1,076 86 192 1,160 1,352
15-39 Tec Street Hicksville, NY 164 930 48 166 976 1,142
100 Tec Street Hicksville, NY 237 1,340 69 238 1,408 1,646
51-89 Tec Street Hicksville, NY 207 1,171 42 208 1,212 1,420
502 Old Country Road Hicksville, NY 95 536 16 96 551 647
80-98 Tec Street Hicksville, NY 123 700 26 125 724 849
201-233 Park Avenue Hicksville, NY 349 1,979 92 351 2,069 2,420
6851 Jericho Turnpike Syosset, NY 1,570 8,896 465 1,576 9,355 10,931
One Fairchild Court Plainview, NY 315 1,786 68 318 1,851 2,169
79 Express Street Plainview, NY 417 2,363 122 420 2,482 2,902
92 Central Avenue Farmingdale, NY 837 4,745 78 841 4,819 5,660
160 Engineer Drive Hicksville, NY 148 836 38 149 873 1,022
260 Engineers Drive Hicksville, NY 264 1,494 81 266 1,573 1,839
87-119 Engineers Dr (m) Hicksville, NY 181 1,023 51 183 1,072 1,255
950-970 South Broadway Hicksville, NY 250 1,418 177 252 1,593 1,845
290 Duffy Avenue Hicksville, NY (e) 383 2,171 262 385 2,431 2,816
185 Price Parkway Farmingdale, NY 611 3,464 52 615 3,512 4,127
62 Alpha Plaza Hicksville, NY 155 877 53 159 926 1,085
90 Alpha Plaza Hicksville, NY 127 717 55 130 769 899
325 Duffy Avenue Hicksville, NY 480 2,720 81 488 2,793 3,281
600 West John Street Hicksville, NY 488 2,763 4,396 496 7,151 7,647
939 Motor Parkway Hauppauge, NY 105 596 93 112 682 794
2070 5th Avenue Ronkonkoma, NY 383 2,171 15 384 2,185 2,569
200 13th Avenue Ronkonkoma, NY 313 1,776 48 318 1,819 2,137
100 13th Avenue Ronkonkoma, NY 348 1,973 36 352 2,005 2,357
1 Comac Loop Ronkonkoma, NY 348 1,973 43 352 2,012 2,364
80 13th Avenue Ronkonkoma, NY 418 2,368 73 423 2,436 2,859
90 13th Avenue Ronkonkoma, NY 383 2,171 56 389 2,221 2,610
33 Comac Loop Ronkonkoma, NY 383 2,171 78 388 2,244 2,632
101-125 Comac Streer Ronkonkoma, NY 905 5,131 75 914 5,197 6,111
999 Stewart Avenue Garden City, NY 293 1,658 124 305 1,770 2,075
360 Smith Street Farmingdale, NY 334 1,851 207 342 2,050 2,392
700 Dibblee Drive Garden City, NY 2,219 12,282 135 2,227 12,409 14,636
49 Mall Drive Hauppauge, NY 343 5,220 955 989 5,529 6,518
275 Marcus Blvd Hauppauge, NY 349 1,934 123 365 2,041 2,406
Milwaukee
- ---------
N25 W23050 Paul Road Pewaukee, WI 474 2,723 12 474 2,735 3,209
N25 W23255 Paul Road Waukesha County, WI 571 3,270 1 571 3,271 3,842
N27 W23293 Roundy Drive Waukesha County, WI 412 2,837 1 412 2,838 3,250
6523 N. Sydney Place Milwaukee, WI 172 976 140 176 1,112 1,288
8800 W Bradley Milwaukee, WI 375 2,125 134 388 2,246 2,634
1435 North 113th St Wauwatosa, WI 300 1,699 366 310 2,055 2,365
11217-43 W. Becher St West Allis, WI 148 841 118 155 952 1,107
2152 S 114th Street West Allis, WI 326 1,846 97 339 1,930 2,269
4560 N. 124th Street Wauwatosa, WI 118 667 84 129 740 869
12221 W. Feerick Street Wauwatosa, WI 210 1,190 81 221 1,260 1,481
Minneapolis
- -----------
6507-6545 Cecilia Circle Bloomington, MN 357 1,320 525 386 1,816 2,202
7830-7848 12th Avenue South Bloomington, MN 376 1,346 251 381 1,592 1,973
1275 Corporate Center Drive Eagan, MN 80 357 52 93 396 489
1279 Corporate Center Drive Eagan, MN 105 357 90 109 443 552
2815 Eagandale Boulevard Eagan, MN 80 357 172 97 512 609
6201 West 111th Street Bloomington, MN 1,358 8,622 3,761 1,499 12,242 13,741
6403-6545 Cecilia Drive Bloomington, MN 366 1,363 529 395 1,863 2,258
6925-6943 Washington Avenue Edina, MN 117 504 705 237 1,089 1,326
6955-6973 Washington Avenue Edina, MN 117 486 410 207 806 1,013
7251-7279 Washington Avenue Edina, MN 129 382 431 182 760 942
7301-7329 Washington Avenue Edina, MN 174 391 496 193 868 1,061
7101 Winnetka Avenue North Brooklyn Park, MN 2,195 6,084 2,147 2,228 8,198 10,426
7600 Golden Triangle Drive Eden Prairie, MN 566 1,394 1,307 615 2,652 3,267
7850-7890 12th Avenue South Bloomington, MN 347 1,242 275 358 1,506 1,864
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
99 Layfayette Drive 475 1964 (s)
65 East Bethpage Road 62 1960 (s)
171 Milbar Boulevard 137 1961 (s)
95 Horseblock Road 388 1971 (s)
151-171 East 2nd Street 145 1968 (s)
171-175 East 2nd Street 144 1969 (s)
35 Bloomingdale Road 63 1962 (s)
15-39 Tec Street 57 1965 (s)
100 Tec Street 70 1965 (s)
51-89 Tec Street 69 1965 (s)
502 Old Country Road 27 1965 (s)
80-98 Tec Street 36 1965 (s)
201-233 Park Avenue 106 1962 (s)
6851 Jericho Turnpike 491 1969 (s)
One Fairchild Court 95 1959 (s)
79 Express Street 127 1972 (s)
92 Central Avenue 240 1961 (s)
160 Engineer Drive 43 1966 (s)
260 Engineers Drive 81 1966 (s)
87-119 Engineers Dr (m) 58 1966 (s)
950-970 South Broadway 94 1966 (s)
290 Duffy Avenue 133 1974 (s)
185 Price Parkway 176 1969 (s)
62 Alpha Plaza 29 1968 (s)
90 Alpha Plaza 24 1969 (s)
325 Duffy Avenue 75 1970 (s)
600 West John Street 107 1955 (s)
939 Motor Parkway 18 1977 (s)
2070 5th Avenue 59 1975 (s)
200 13th Avenue 50 1979 (s)
100 13th Avenue 54 1979 (s)
1 Comac Loop 55 1980 (s)
80 13th Avenue 66 1983 (s)
90 13th Avenue 60 1982 (s)
33 Comac Loop 61 1983 (s)
101-125 Comac Streer 140 1985 (s)
999 Stewart Avenue 36 1955 (s)
360 Smith Street 40 1965 (s)
700 Dibblee Drive 231 1965 (s)
49 Mall Drive 103 1986 (s)
275 Marcus Blvd 13 1985 (s)
Milwaukee
- ---------
N25 W23050 Paul Road 306 1989 (s)
N25 W23255 Paul Road 367 1987 (s)
N27 W23293 Roundy Drive 317 1989 (s)
6523 N. Sydney Place 85 1978 (s)
8800 W Bradley 144 1982 (s)
1435 North 113th St 111 1993 (s)
11217-43 W. Becher St 42 1979 (s)
2152 S 114th Street 76 1980 (s)
4560 N. 124th Street 29 1976 (s)
12221 W. Feerick Street 47 1971 (s)
Minneapolis
- -----------
6507-6545 Cecilia Circle 739 1981 (s)
7830-7848 12th Avenue South 751 1978 (s)
1275 Corporate Center Drive 139 1990 (s)
1279 Corporate Center Drive 162 1990 (s)
2815 Eagandale Boulevard 168 1990 (s)
6201 West 111th Street 2,308 1987 (s)
6403-6545 Cecilia Drive 791 1980 (s)
6925-6943 Washington Avenue 564 1972 (s)
6955-6973 Washington Avenue 501 1972 (s)
7251-7279 Washington Avenue 459 1972 (s)
7301-7329 Washington Avenue 730 1972 (s)
7101 Winnetka Avenue North 3,088 1990 (s)
7600 Golden Triangle Drive 1,080 1989 (s)
7850-7890 12th Avenue South 743 1978 (s)
</TABLE>
S-10
<PAGE> 113
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION ------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7900 Main Street Northeast Fridley, MN 480 1,604 626 497 2,213 2,710
7901 Beech Street Northeast Fridley, MN 405 1,554 621 428 2,152 2,580
9901 West 74th Street Eden Prairie, MN 621 3,289 2,018 639 5,289 5,928
10175-10205 Crosstown Circle Eden Prairie, MN 132 686 108 174 752 926
11201 Hampshire Avenue South Bloomington, MN 495 1,035 854 501 1,883 2,384
12220-12222 Nicollet Avenue Burnsville, MN 105 425 47 114 463 577
12250-12268 Nicollet Avenue Burnsville, MN 260 1,054 96 284 1,126 1,410
12224-12226 Nicollet Avenue Burnsville, MN 190 770 102 207 855 1,062
305 2nd Street Northwest Minneapolis, MN 460 2,744 41 460 2,785 3,245
953 Westgate Drive Minneapolis, MN 193 1,178 2 193 1,180 1,373
980 Lone Oak Road Minneapolis, MN 683 4,103 388 683 4,491 5,174
990 Lone Oak Road Minneapolis, MN 883 5,575 129 883 5,704 6,587
1030 Lone Oak Road Minneapolis, MN 456 2,703 64 456 2,767 3,223
1060 Lone Oak Road Minneapolis, MN 624 3,700 142 624 3,842 4,466
5400 Nathan Lane Minneapolis, MN 749 4,461 44 749 4,505 5,254
6464 Sycamore Court Minneapolis, MN 457 2,730 103 457 2,833 3,290
6701 Parkway Circle Brooklyn Center, MN 350 2,131 344 377 2,448 2,825
6601 Shingle Creek Parkway Brooklyn Center, MN 411 2,813 520 502 3,242 3,744
10120 W 76th Street Eden Prairie, MN 315 1,804 145 315 1,949 2,264
7615 Golden Triangle Eden Prairie, MN 268 1,532 346 268 1,878 2,146
7625 Golden Triangle Eden Prairie, MN 415 2,375 257 415 2,632 3,047
2605 Fernbrook Lane North Plymouth, MN 443 2,533 365 445 2,896 3,341
12155 Nicollet Ave. Burnsville, MN 286 - 1,678 288 1,676 1,964
73rd Avenue North Brooklyn Park, MN 504 2,856 73 512 2,921 3,433
1905 W Country Road C Roseville, MN 402 2,278 65 409 2,336 2,745
2720 Arthur Street Roseville, MN 824 4,671 78 832 4,741 5,573
10205 51st Avenue North Plymouth, MN 180 1,020 70 187 1,083 1,270
4100 Peavey Road Chaska, MN 399 2,261 443 415 2,688 3,103
11300 Hamshire Ave South Bloomington, MN 527 2,985 250 541 3,221 3,762
375 Rivertown Drive Woodbury, MN 1,083 6,135 2,668 1,503 8,383 9,886
5205 Highway 169 Plymouth, MN 446 2,525 777 739 3,009 3,748
6451-6595 Citywest Parkway Eden Prairie, MN 525 2,975 310 538 3,272 3,810
7100-7190 Shady Oak Rd (n) Eden Prairie, MN 1,118 6,333 485 1,149 6,787 7,936
7500-7546 Washington Square Eden Prairie, MN 229 1,300 50 235 1,344 1,579
7550-7588 Washington Square Eden Prairie, MN 153 867 39 157 902 1,059
5240-5300 Valley Industrial Blvd S Eden Prairie, MN 362 2,049 142 371 2,182 2,553
1565 First Avenue NW New Brighton, MN 485 2,750 173 496 2,912 3,408
7125 Northland Terrace Brooklyn Park, MN 660 3,740 724 767 4,357 5,124
6900 Shady Oak Road Eden Prairie, MN 310 1,756 219 340 1,945 2,285
6477-6525 City West Parkway Eden Prairie, MN 810 4,590 122 819 4,703 5,522
500-530 Kasota Avenue SE Minneapolis, MN 415 2,354 122 429 2,462 2,891
770-786 Kasota Avenue SE Minneapolis, MN 333 1,888 100 344 1,977 2,321
800 Kasota Avenue SE Minneapolis, MN 524 2,971 501 592 3,404 3,996
2530-2570 Kasota Avenue St. Paul, MN 407 2,308 178 424 2,469 2,893
NASHVILLE
- ---------
417 Harding Industrial Drive Nashville, TN 653 4,583 1,035 763 5,508 6,271
520 Harding Industrial Drive (m) Nashville, TN 645 3,382 3,532 1,052 6,507 7,559
3099 Barry Drive Portland, TN 418 2,368 60 424 2,422 2,846
3150 Barry Drive Portland, TN 941 5,333 331 987 5,618 6,605
5599 Highway 31 West Portland, TN 564 3,196 65 571 3,254 3,825
1650 Elm Hill Pike Nashville, TN 329 1,867 64 331 1,929 2,260
1821 Air Lane Drive Nashville, TN 151 858 (1) 151 857 1,008
1102 Appleton Drive Nashville, TN 154 873 1 154 874 1,028
1920 Air Lane Drive Nashville, TN 250 1,415 22 251 1,436 1,687
1931 Air Lane Drive Nashville, TN 491 2,785 110 495 2,891 3,386
470 Metroplex Drive (m) Nashville, TN 619 3,507 40 624 3,542 4,166
1150 Antiock Pike Nashville, TN 667 3,748 44 668 3,791 4,459
NORTHERN NEW JERSEY
- -------------------
116 Lehigh Drive Fairfield, NJ 851 4,823 49 855 4,868 5,723
60 Ethel Road West Piscataway, NJ 252 1,426 139 264 1,553 1,817
70 Ethel Road West Piscataway, NJ 431 2,443 147 451 2,570 3,021
105 Neptune Boulevard Neptune, NJ 245 1,386 71 255 1,447 1,702
140 Hanover Avenue Hanover, NJ 457 2,588 348 475 2,918 3,393
601-629 Montrose Avenue South Plainfield, NJ 487 2,762 197 512 2,934 3,446
3 Marlen Hamilton, NJ 71 404 32 74 433 507
5 Marlen Hamilton, NJ 116 655 41 121 691 812
7 Marlen Hamilton, NJ 128 728 54 136 774 910
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
7900 Main Street Northeast 1,169 1973 (s)
7901 Beech Street Northeast 913 1975 (s)
9901 West 74th Street 1,165 1983/88 (s)
10175-10205 Crosstown Circle 316 1980 (s)
11201 Hampshire Avenue South 793 1986 (s)
12220-12222 Nicollet Avenue 171 1989/90 (s)
12250-12268 Nicollet Avenue 442 1989/90 (s)
12224-12226 Nicollet Avenue 325 1989/90 (s)
305 2nd Street Northwest 337 1991 (s)
953 Westgate Drive 135 1991 (s)
980 Lone Oak Road 660 1992 (s)
990 Lone Oak Road 959 1989 (s)
1030 Lone Oak Road 339 1988 (s)
1060 Lone Oak Road 515 1988 (s)
5400 Nathan Lane 520 1990 (s)
6464 Sycamore Court 358 1990 (s)
6701 Parkway Circle 301 1987 (s)
6601 Shingle Creek Parkway 431 1985 (s)
10120 W 76th Street 195 1987 (s)
7615 Golden Triangle 380 1987 (s)
7625 Golden Triangle 303 1987 (s)
2605 Fernbrook Lane North 371 1987 (s)
12155 Nicollet Ave. 131 1995 (s)
73rd Avenue North 201 1995 (s)
1905 W Country Road C 160 1993 (s)
2720 Arthur Street 325 1995 (s)
10205 51st Avenue North 78 1990 (s)
4100 Peavey Road 161 1988 (s)
11300 Hamshire Ave South 315 1983 (s)
375 Rivertown Drive 366 1996 (s)
5205 Highway 169 221 1960 (s)
6451-6595 Citywest Parkway 251 1984 (s)
7100-7190 Shady Oak Rd (n) 373 1982 (s)
7500-7546 Washington Square 70 1975 (s)
7550-7588 Washington Square 47 1973 (s)
5240-5300 Valley Industrial Blvd S 115 1975 (s)
1565 First Avenue NW 134 1978 (s)
7125 Northland Terrace 186 1996 (s)
6900 Shady Oak Road 85 1980 (s)
6477-6525 City West Parkway 150 1984 (s)
500-530 Kasota Avenue SE 61 1976 (s)
770-786 Kasota Avenue SE 49 1976 (s)
800 Kasota Avenue SE 78 1976 (s)
2530-2570 Kasota Avenue 62 1976 (s)
NASHVILLE
- ---------
417 Harding Industrial Drive 1,085 1972 (s)
520 Harding Industrial Drive (m) 525 1975 (s)
3099 Barry Drive 136 1995 (s)
3150 Barry Drive 316 1993 (s)
5599 Highway 31 West 183 1995 (s)
1650 Elm Hill Pike 63 1984 (s)
1821 Air Lane Drive 27 1984 (s)
1102 Appleton Drive 28 1984 (s)
1920 Air Lane Drive 54 1985 (s)
1931 Air Lane Drive 108 1984 (s)
470 Metroplex Drive (m) 111 1986 (s)
1150 Antiock Pike 121 1987 (s)
NORTHERN NEW JERSEY
- -------------------
116 Lehigh Drive 244 1986 (s)
60 Ethel Road West 63 1982 (s)
70 Ethel Road West 96 1979 (s)
105 Neptune Boulevard 54 1989 (s)
140 Hanover Avenue 146 1964/1988 (s)
601-629 Montrose Avenue 112 1974 (s)
3 Marlen 12 1981 (s)
5 Marlen 26 1981 (s)
7 Marlen 29 1982 (s)
</TABLE>
S-11
<PAGE> 114
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION ------------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ----------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8 Marlen Hamilton, NJ 230 1,302 46 235 1,343 1,578
15 Marlen Hamilton, NJ 53 302 34 58 331 389
17 Marlen Hamilton, NJ 104 588 56 110 638 748
1 South Gold Drive Hamilton, NJ 106 599 44 112 637 749
5 South Gold Drive Hamilton, NJ 106 602 57 113 652 765
6 South Gold Drive Hamilton, NJ 58 332 33 63 360 423
7 South Gold Drive Hamilton, NJ 32 182 27 36 205 241
8 South Gold Drive Hamilton, NJ 103 584 43 109 621 730
9 South Gold Drive Hamilton, NJ 60 342 44 65 381 446
11 South Gold Drive Hamilton, NJ 183 1,039 66 192 1,096 1,288
12 South Gold Drive Hamilton, NJ 84 475 70 89 540 629
9 Princess Road Lawrenceville, NJ 221 1,254 84 231 1,328 1,559
11 Princess Road Lawrenceville, NJ 491 2,780 162 511 2,922 3,433
15 Princess Road Lawrenceville, NJ 234 1,328 273 245 1,590 1,835
17 Princess Road Lawrenceville, NJ 342 1,936 121 353 2,046 2,399
220 Hanover Avenue Hanover, NJ 1,361 7,715 421 1,420 8,077 9,497
244 Shefield Street Mountainside, NJ 201 1,141 75 210 1,207 1,417
30 Troy Road Hanover, NJ 128 727 39 134 760 894
15 Leslie Court Hanover, NJ 126 716 42 132 752 884
20 Leslie Court Hanover, NJ 84 474 32 88 502 590
25 Leslie Court Hanover, NJ 512 2,899 139 526 3,024 3,550
130 Algonquin Parkway Hanover, NJ 157 888 47 163 929 1,092
150 Algonquin Parkway Hanover, NJ 85 479 32 89 507 596
55 Locust Avenue Roseland, NJ 535 3,034 182 560 3,191 3,751
31 West Forest Street (m) Englewood, NJ 941 5,333 288 975 5,587 6,562
25 World's Fair Drive Franklin, NJ 285 1,616 83 297 1,687 1,984
14 World's Fair Drive Franklin, NJ 483 2,735 259 503 2,974 3,477
16 World's Fair Drive Franklin, NJ 174 988 77 183 1,056 1,239
18 World's Fair Drive Franklin, NJ 123 699 44 129 737 866
23 World's Fair Drive Franklin, NJ 134 758 47 140 799 939
12 World's Fair Drive Franklin, NJ 572 3,240 166 593 3,385 3,978
1 World's Fair Drive Franklin, NJ 632 3,581 160 654 3,719 4,373
2 World's Fair Drive Franklin, NJ 625 3,539 199 650 3,713 4,363
49 Napoleon Court Franklin, NJ 230 1,306 49 238 1,347 1,585
50 Napoleon Court Franklin, NJ 149 842 41 154 878 1,032
22 World's Fair Drive Franklin, NJ 364 2,064 110 375 2,163 2,538
26 World's Fair Drive Franklin, NJ 361 2,048 146 377 2,178 2,555
24 World's Fair Drive Franklin, NJ 347 1,968 112 362 2,065 2,427
12 Wright Way Oakland, NJ 410 2,321 110 424 2,417 2,841
NEW ORLEANS
- -----------
520-524 Elmwood Park Blvd (m) Jefferson, LA 926 5,248 225 949 5,450 6,399
125 Mallard St St. Rose, LA (g) 103 586 243 108 824 932
107 Mallard St. Rose, LA (g) 164 928 59 171 980 1,151
125 James Drive West St. Rose, LA (g) 246 1,392 81 257 1,462 1,719
161 James Drive West St. Rose, LA 298 1,687 240 304 1,921 2,225
150 James Drive East St. Rose, LA 399 2,258 100 409 2,348 2,757
115 James Drive West St. Rose, LA (g) 163 922 57 171 971 1,142
100 James Drive St. Rose, LA (g) 430 2,435 144 450 2,559 3,009
143 Mallard St St. Rose, LA (g) 143 812 56 151 860 1,011
160 James Drive East St. Rose, LA (g) 102 580 210 108 784 892
190 James Drive East St. Rose, LA (g) 205 1,160 113 214 1,264 1,478
120 Mallard St St. Rose, LA (g) 348 1,971 182 365 2,136 2,501
110 James Drive West St. Rose, LA (g) 143 812 65 150 870 1,020
150 Canvasback Dr St. Rose, LA 165 937 35 170 967 1,137
PHOENIX
- -------
7340 South Kyrene Rd Tempe, AZ 1,495 8,469 45 1,499 8,510 10,009
7350 S Kyrene Road Tempe, AZ 818 4,634 89 821 4,720 5,541
7360 South Kyrene Rd Tempe, AZ 508 2,876 35 511 2,908 3,419
7343 South Hardy Drive Tempe, AZ 1,119 6,341 162 1,126 6,496 7,622
7333 South Hardy Drive Tempe, AZ 1,549 8,779 53 1,555 8,826 10,381
3906 East Broadway Road Phoenix, AZ 434 2,402 79 437 2,478 2,915
3908 East Broadway Road Phoenix, AZ 336 1,862 39 339 1,898 2,237
PORTLAND
- --------
5687 International Way (o) Milwaukee, OR (k) 430 2,385 91 440 2,466 2,906
5795 SW Jean Road (n) Lake Oswego, OR 427 2,362 82 435 2,436 2,871
12130 NE Ainsworth Circle (m) Portland, OR 523 2,898 97 533 2,985 3,518
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
8 Marlen 36 1982 (s)
15 Marlen 12 1982 (s)
17 Marlen 24 1981 (s)
1 South Gold Drive 24 1973 (s)
5 South Gold Drive 26 1974 (s)
6 South Gold Drive 13 1975 (s)
7 South Gold Drive 8 1976 (s)
8 South Gold Drive 23 1977 (s)
9 South Gold Drive 14 1980 (s)
11 South Gold Drive 41 1979 (s)
12 South Gold Drive 20 1980 (s)
9 Princess Road 48 1985 (s)
11 Princess Road 109 1985 (s)
15 Princess Road 99 1986 (s)
17 Princess Road 81 1986 (s)
220 Hanover Avenue 302 1987 (s)
244 Shefield Street 45 1965/1986 (s)
30 Troy Road 27 1972 (s)
15 Leslie Court 28 1971 (s)
20 Leslie Court 19 1974 (s)
25 Leslie Court 107 1975 (s)
130 Algonquin Parkway 33 1973 (s)
150 Algonquin Parkway 19 1973 (s)
55 Locust Avenue 119 1980 (s)
31 West Forest Street (m) 198 1978 (s)
25 World's Fair Drive 63 1986 (s)
14 World's Fair Drive 126 1980 (s)
16 World's Fair Drive 39 1981 (s)
18 World's Fair Drive 27 1982 (s)
23 World's Fair Drive 30 1982 (s)
12 World's Fair Drive 126 1981 (s)
1 World's Fair Drive 139 1983 (s)
2 World's Fair Drive 145 1982 (s)
49 Napoleon Court 36 1982 (s)
50 Napoleon Court 24 1982 (s)
22 World's Fair Drive 58 1983 (s)
26 World's Fair Drive 81 1984 (s)
24 World's Fair Drive 78 1984 (s)
12 Wright Way 90 1981 (s)
NEW ORLEANS
- -----------
520-524 Elmwood Park Blvd (m) 150 1986 (s)
125 Mallard St 33 1984 (s)
107 Mallard 26 1985 (s)
125 James Drive West 40 1990 (s)
161 James Drive West 50 1986 (s)
150 James Drive East 64 1986 (s)
115 James Drive West 25 1986 (s)
100 James Drive 69 1980 (s)
143 Mallard St 23 1982 (s)
160 James Drive East 36 1981 (s)
190 James Drive East 35 1987 (s)
120 Mallard St 61 1981 (s)
110 James Drive West 25 1983 (s)
150 Canvasback Dr 26 1986 (s)
PHOENIX
- -------
7340 South Kyrene Rd 230 1996 (s)
7350 S Kyrene Road 127 1996 (s)
7360 South Kyrene Rd 79 1996 (s)
7343 South Hardy Drive 174 1997 (s)
7333 South Hardy Drive 238 1997 (s)
3906 East Broadway Road 27
3908 East Broadway Road 20
PORTLAND
- --------
5687 International Way (o) 27 1974 (s)
5795 SW Jean Road (n) 25 1985 (s)
12130 NE Ainsworth Circle (m) 31 1986 (s)
</TABLE>
S-12
<PAGE> 115
<TABLE>
<CAPTION>
COSTS
CAPITALIZED GROSS AMOUNT CARRIED
SUBSEQUENT AT CLOSE OF PERIOD
(b) TO 12/31/98
INITIAL COST ACQUISITION -----------------------
LOCATION (a) ---------------- OR BUILDING AND
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS COMPLETION LAND IMPROVEMENTS TOTAL
- ---------------- ----------- ------------ ---- --------- ---------- ---- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5509 NW 122nd Ave (m) Milwaukee, OR (j) 244 1,351 49 249 1,395 1,644
6105-6113 NE 92nd Avenue (o) Portland, OR 884 4,891 186 898 5,063 5,961
8727 NE Marx Drive (n) Portland, OR 580 3,210 141 590 3,341 3,931
3910 SW 170th Ave Portland, OR 125 690 39 128 726 854
3388 SE 20th St. Portland, OR 73 405 28 76 430 506
5962-5964 NE 87th Ave Portland, OR 72 398 31 75 426 501
116 SE Yamhill Portland, OR 38 208 22 40 228 268
9106 NE Marx Drive Portland, OR 40 223 23 43 243 286
11620 NE Ainsworth Circle Portland, OR 152 839 34 156 869 1,025
11824 NE Ainsworth Circle Portland, OR 166 916 43 170 955 1,125
12124 NE Ainsworth Circle Portland, OR 207 1,148 53 212 1,196 1,408
1735 SE Highway 20 Bend, OR 180 995 51 184 1,042 1,226
2715 SE Raymond Portland, OR 159 880 52 163 928 1,091
1645 NE 72nd Ave Portland, OR 116 641 40 120 677 797
1630 SE 8th Ave. Portland, OR 140 775 29 144 800 944
9044 NE Marx Drive Portland, OR 83 459 35 86 491 577
2443 SE 4th Ave. Portland, OR 157 870 47 161 913 1,074
711 SE Stark St. Portland, OR 42 233 24 45 254 299
11632 NE Ainsworth Circle Portland, OR 799 4,422 169 812 4,578 5,390
NE 138th & Airport Way Portland, OR 931 5,155 125 946 5,265 6,211
14699 NE Airport Way Portland, OR 242 1,340 51 248 1,385 1,633
SALT LAKE
- ---------
2255 South 300 West (q) Salt Lake City, UT 618 3,504 66 617 3,571 4,188
512 Lawndale Drive (r) Salt Lake City, UT 2,779 15,749 664 2,792 16,400 19,192
1270 West 2320 South West Valley, UT 138 784 38 142 818 960
1275 West 2240 South West Valley, UT 395 2,241 74 405 2,305 2,710
1288 West 2240 South West Valley, UT 119 672 25 122 694 816
2235 South 1300 West West Valley, UT 198 1,120 37 202 1,153 1,355
1293 West 2200 South West Valley, UT 158 896 31 162 923 1,085
1279 West 2200 South West Valley, UT 198 1,120 36 202 1,152 1,354
1272 West 2240 South West Valley, UT 336 1,905 71 344 1,968 2,312
1149 West 2240 South West Valley, UT 217 1,232 44 223 1,270 1,493
1142 West 2320 South West Valley, UT 217 1,232 42 223 1,268 1,491
SOUTHERN NEW JERSEY
- -------------------
2-5 North Olnev Ave. Cherry Hill, NJ 284 1,524 45 285 1,568 1,853
2 Springdale Road Cherry Hill, NJ 127 701 16 127 717 844
4 Springdale Road (m) Cherry Hill, NJ 335 1,853 43 336 1,895 2,231
6 Springdale Road Cherry Hill, NJ 99 547 17 99 564 663
8 Springdale Road Cherry Hill, NJ 259 1,436 33 260 1,468 1,728
12 Springdale Road Cherry Hill, NJ 279 1,545 55 280 1,599 1,879
1 Esterbrook Lane Cherry Hill, NJ 43 238 7 43 245 288
16 Springdale Road Cherry Hill, NJ 241 1,336 40 242 1,375 1,617
5 Esterbrook Lane Cherry Hill, NJ 241 1,336 29 242 1,364 1,606
2 Pin Oak Lane Cherry Hill, NJ 317 1,757 39 319 1,794 2,113
6 Esterbrook Lane Cherry Hill, NJ 165 914 25 166 938 1,104
3 Computer Drive Cherry Hill, NJ 500 2,768 120 502 2,886 3,388
19 Perina Blvd. Cherry Hill, NJ 161 889 22 161 911 1,072
28 Springdale Road Cherry Hill, NJ 192 1,060 28 192 1,088 1,280
3 Esterbrook Lane Cherry Hill, NJ 199 1,102 225 200 1,326 1,526
4 Esterbrook Lane Cherry Hill, NJ 234 1,294 30 235 1,323 1,558
26 Springdale Road Cherry Hill, NJ 227 1,257 24 228 1,280 1,508
1 Keystone Ave. Cherry Hill, NJ 227 1,223 37 222 1,265 1,487
1919 Springdale Road Cherry Hill, NJ 232 1,286 35 233 1,320 1,553
21 Olnev Ave. Cherry Hill, NJ 69 380 16 69 396 465
19 Olnev Ave. Cherry Hill, NJ 202 1,119 38 203 1,156 1,359
2 Keystone Ave. Cherry Hill, NJ 216 1,194 42 217 1,235 1,452
18 Olnev Ave. Cherry Hill, NJ 250 1,382 44 251 1,425 1,676
22 Springdale Road Cherry Hill, NJ 526 2,914 192 528 3,104 3,632
1998 Springdale Road Cherry Hill, NJ 17 96 34 18 129 147
55 Carnegie Drive Cherry Hill, NJ 550 3,047 69 552 3,114 3,666
57 Carnegie Drive Cherry Hill, NJ 739 4,109 102 742 4,208 4,950
ST. LOUIS
- ---------
2121 Chapin Industrial Drive Vinita Park, MO 606 4,384 1,261 614 5,637 6,251
1200 Andes Boulevard Olivette, MO 246 1,412 83 319 1,422 1,741
1248 Andes Boulevard Olivette, MO 156 907 52 157 958 1,115
1208-1226 Ambassador Boulevard Olivette, MO 235 1,351 1 235 1,352 1,587
<CAPTION>
ACCUMULATED
DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ------------ ---------- ------------
<S> <C> <C> <C>
5509 NW 122nd Ave (m) 14 1995 (s)
6105-6113 NE 92nd Avenue (o) 52 1978 (s)
8727 NE Marx Drive (n) 33 1987 (s)
3910 SW 170th Ave 7 1987 (s)
3388 SE 20th St. 4 1981 (s)
5962-5964 NE 87th Ave 4 1979 (s)
116 SE Yamhill 2 1974 (s)
9106 NE Marx Drive 2 1969 (s)
11620 NE Ainsworth Circle 9 1992 (s)
11824 NE Ainsworth Circle 10 1992 (s)
12124 NE Ainsworth Circle 12 1984 (s)
1735 SE Highway 20 11 1995 (s)
2715 SE Raymond 9 1971 (s)
1645 NE 72nd Ave 7 1972 (s)
1630 SE 8th Ave. 8 1968 (s)
9044 NE Marx Drive 5 1986 (s)
2443 SE 4th Ave. 9 1964 (s)
711 SE Stark St. 3 1972 (s)
11632 NE Ainsworth Circle 47 1990 (s)
NE 138th & Airport Way 55 1990 (s)
14699 NE Airport Way 14 1998 (s)
SALT LAKE
- ---------
2255 South 300 West (q) 97 1980 (s)
512 Lawndale Drive (r) 444 1981 (s)
1270 West 2320 South 21 1986 (s)
1275 West 2240 South 57 1986 (s)
1288 West 2240 South 17 1986 (s)
2235 South 1300 West 29 1986 (s)
1293 West 2200 South 23 1986 (s)
1279 West 2200 South 29 1986 (s)
1272 West 2240 South 52 1986 (s)
1149 West 2240 South 31 1986 (s)
1142 West 2320 South 31 1987 (s)
SOUTHERN NEW JERSEY
- -------------------
2-5 North Olnev Ave. 29 1963 (s)
2 Springdale Road 13 1968 (s)
4 Springdale Road (m) 35 1963 (s)
6 Springdale Road 10 1964 (s)
8 Springdale Road 27 1966 (s)
12 Springdale Road 32 1965 (s)
1 Esterbrook Lane 5 1965 (s)
16 Springdale Road 26 1967 (s)
5 Esterbrook Lane 25 1966 (s)
2 Pin Oak Lane 33 1968 (s)
6 Esterbrook Lane 17 1966 (s)
3 Computer Drive 53 1966 (s)
19 Perina Blvd. 17 1966 (s)
28 Springdale Road 20 1967 (s)
3 Esterbrook Lane 25 1968 (s)
4 Esterbrook Lane 25 1969 (s)
26 Springdale Road 24 1968 (s)
1 Keystone Ave. 23 1969 (s)
1919 Springdale Road 25 1970 (s)
21 Olnev Ave. 7 1969 (s)
19 Olnev Ave. 21 1971 (s)
2 Keystone Ave. 24 1966 (s)
18 Olnev Ave. 26 1974 (s)
22 Springdale Road 68 1977 (s)
1998 Springdale Road 5 1971 (s)
55 Carnegie Drive 58 1988 (s)
57 Carnegie Drive 78 1987 (s)
ST. LOUIS
- ---------
2121 Chapin Industrial Drive 4,227 1969/87 (s)
1200 Andes Boulevard 159 1967 (s)
1248 Andes Boulevard 150 1967 (s)
1208-1226 Ambassador Boulevard 152 1966 (s)
</TABLE>
S-13
<PAGE> 116
<TABLE>
<CAPTION>
COSTS
(b) CAPITALIZED
INITIAL COST SUBSEQUENT TO
LOCATION (a) ---------------------- ACQUISITION
BUILDING ADDRESS (CITY/STATE) ENCUMBRANCES LAND BUILDINGS OR COMPLETION
- ---------------- ---------- ------------ ---- --------- -------------
<S> <C> <C> <C> <C> <C>
1503-1525 Fairview Industrial Olivette, MO 112 658 110
2462-2470 Schuetz Road St. Louis, MO 174 1,004 1
10431-10449 Midwest Industrial Blvd Olivette, MO 237 1,360 198
10751 Midwest Industrial Boulevard Olivette, MO 193 1,119 13
11652-11666 Fairgrove Industrial Blvd St. Louis, MO 103 599 89
11674-11688 Fairgrove Industrial Blvd St. Louis, MO 118 689 27
2337 Centerline Drive Maryland Heights, MO 216 1,242 111
6951 N Hanley (m) Hazelwood, MO 405 2,295 1,437
4560 Anglum Road Hazelwood, MO 150 849 159
2760 South 1st Street St. Louis, MO 800 - 4,562
TAMPA
- -----
6614 Adamo Drive Tampa, FL 177 1,005 27
202 Kelsey Tampa, FL 602 3,409 129
6202 Benjamin Road Tampa, FL 203 1,151 70
6204 Benjamin Road Tampa, FL 432 2,445 194
6206 Benjamin Road Tampa, FL 397 2,251 158
6302 Benjamin Road Tampa, FL 214 1,212 97
6304 Benjamin Road Tampa, FL 201 1,138 116
6306 Benjamin Road Tampa, FL 257 1,457 99
6308 Benjamin Road Tampa, FL 345 1,958 132
5313 Johns Road Tampa, FL 204 1,159 66
5602 Thompson Center Court Tampa, FL 115 652 39
5411 Johns Road Tampa, FL 230 1,304 81
5525 Johns Road Tampa, FL 192 1,086 62
5607 Johns Road Tampa, FL 102 579 54
5709 Johns Road Tampa, FL 192 1,086 63
5711 Johns Road Tampa, FL 243 1,376 132
4410 E Adamo Drive Tampa, FL 523 2,962 220
4420 E Adamo Drive Tampa, FL 127 718 58
4430 E Adamo Drive Tampa, FL 333 1,885 169
4440 E Adamo Drive Tampa, FL 348 1,975 114
4450 E Adamo Drive Tampa, FL 253 1,436 115
5453 W Waters Avenue Tampa, FL 71 402 75
5455 W Waters Avenue Tampa, FL 307 1,742 145
5553 W Waters Avenue Tampa, FL 307 1,742 134
5501 W Waters Avenue Tampa, FL 154 871 63
5503 W Waters Avenue Tampa, FL 71 402 31
5555 W Waters Avenue Tampa, FL 213 1,206 67
5557 W Waters Avenue Tampa, FL 59 335 25
5903 Johns Road Tampa, FL 88 497 42
4107 N Himes Avenue Tampa, FL 568 3,220 162
5461 W. Waters Ave Tampa, FL 261 - 1,062
OTHER
- -----
2800 Airport Road (p) Denton, TX 369 1,935 1,572
3501 Maple Street Abilene, TX 67 1,057 941
4200 West Harry Street (n) Wichita, KS 193 2,224 1,751
Industrial Park No. 2 West Lebanon, NH 723 5,208 175
931 Discovery Road Green Bay, WI 121 685 130
9580 Interport Dr Shreveport, LA 113 639 22
2675 Valley View Drive Shreveport, LA 144 - 5,080
300 10th Street NW Clarion, IA 35 - 2,727
DEVELOPMENTS / REDEVELOPMENTS / VACANT LAND 19,067 2,350 4,933
========== ========== ========
309,579 1,584,267 $224,128
========== ========== ========
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF PERIOD
12/31/98
-------------------------------- ACCUMULATED
BUILDING AND DEPRECIATION YEAR BUILT/ DEPRECIABLE
BUILDING ADDRESS LAND IMPROVEMENTS TOTAL 12/31/98 RENOVATED LIVES (YEARS)
- ---------------- ---- ------------ ----- ----------- ---------- -------------
<S> <C> <C> <C> C> <C> <C>
1503-1525 Fairview Industrial 112 768 880 112 1967 (s)
2462-2470 Schuetz Road 174 1,005 1,179 113 1965 (s)
10431-10449 Midwest Industrial Blvd 237 1,558 1,795 187 1967 (s)
10751 Midwest Industrial Boulevard 193 1,132 1,325 128 1965 (s)
11652-11666 Fairgrove Industrial Blvd 103 688 791 91 1966 (s)
11674-11688 Fairgrove Industrial Blvd 118 716 834 94 1967 (s)
2337 Centerline Drive 216 1,353 1,569 M 158 1967 (s)
6951 N Hanley (m) 419 3,718 4,137 209 1965 (s)
4560 Anglum Road 161 997 1,158 44 1970 (s)
2760 South 1st Street 822 4,540 5,362 30 1997 (s)
TAMPA
- -----
6614 Adamo Drive 180 1,029 1,209 28 1967 (s)
202 Kelsey 619 3,521 4,140 95 1989 (s)
6202 Benjamin Road 211 1,213 1,424 32 1981 (s)
6204 Benjamin Road 454 2,617 3,071 75 1982 (s)
6206 Benjamin Road 416 2,390 2,806 63 1983 (s)
6302 Benjamin Road 224 1,299 1,523 37 1983 (s)
6304 Benjamin Road 209 1,246 1,455 39 1984 (s)
6306 Benjamin Road 269 1,544 1,813 42 1984 (s)
6308 Benjamin Road 362 2,073 2,435 55 1984 (s)
5313 Johns Road 213 1,216 1,429 33 1991 (s)
5602 Thompson Center Court 120 686 806 18 1972 (s)
5411 Johns Road 241 1,374 1,615 37 1997 (s)
5525 Johns Road 200 1,140 1,340 31 1993 (s)
5607 Johns Road 109 626 735 17 1991 (s)
5709 Johns Road 200 1,141 1,341 31 1990 (s)
5711 Johns Road 255 1,496 1,751 45 1990 (s)
4410 E Adamo Drive 550 3,155 3,705 85 1990 (s)
4420 E Adamo Drive 134 769 903 21 1990 (s)
4430 E Adamo Drive 345 2,042 2,387 54 1987 (s)
4440 E Adamo Drive 362 2,075 2,437 56 1988 (s)
4450 E Adamo Drive 266 1,538 1,804 41 1969 (s)
5453 W Waters Avenue 82 466 548 12 1987 (s)
5455 W Waters Avenue 326 1,868 2,194 50 1987 (s)
5553 W Waters Avenue 326 1,857 2,183 50 1987 (s)
5501 W Waters Avenue 162 926 1,088 25 1990 (s)
5503 W Waters Avenue 75 429 504 12 1990 (s)
5555 W Waters Avenue 221 1,265 1,486 34 1990 (s)
5557 W Waters Avenue 62 357 419 10 1990 (s)
5903 Johns Road 93 534 627 14 1987 (s)
4107 N Himes Avenue 592 3,358 3,950 91 1990 (s)
5461 W. Waters Ave 262 1,061 1,323 4 1998 (s)
OTHER
- -----
2800 Airport Road (p) 490 3,386 3,876 1,194 1965 (s)
3501 Maple Street 260 1,805 2,065 630 1980 (s)
4200 West Harry Street (n) 528 3,640 4,168 1,274 1972 (s)
Industrial Park No. 2 776 5,330 6,106 1,865 1968 (s)
931 Discovery Road 138 798 936 31 1997 (s)
9580 Interport Dr 115 659 774 18 1989 (s)
2675 Valley View Drive 277 4,947 5,224 31 1997 (s)
300 10th Street NW 165 2,597 2,762 16 1997 (s)
DEVELOPMENTS / REDEVELOPMENTS / VACANT LAND 20,647 5,703 26,350 - (t)
----------- ---------- ---------- ----------
$ 323,363 $1,794,611 $2,117,974 (u) $ 145,435
=========== ========== ========== ==========
</TABLE>
S-14
<PAGE> 117
NOTES:
(a) See description of encumbrances in Note 7 to Notes to Consolidated
Financial Statements.
(b) Initial cost for each respective property is total acquisition costs
associated with its purchase.
(c) These properties collateralize the CIGNA Loan.
(d) These properties collateralize the Assumed Loans.
(e) This property collateralizes the LB Mortgage Loan II.
(f) This property collateralizes the Acquisition Mortgage Loan I.
(g) These properties collateralize the Acquisition Mortgage Loan II.
(h) These properties collateralize the Acquisition Mortgage Loan III.
(i) These properties collateralize the Acquisition Mortgage Loan IV.
(j) These properties collateralize the Acquisition Mortgage Loan VI.
(k) These properties collateralize the Acquisition Mortgage Loan VII.
(l) These properties collateralize the Acquisition Mortgage Loan VIII.
(m) Comprised of two properties.
(n) Comprised of three properties.
(o) Comprised of four properties.
(p) Comprised of five properties.
(q) Comprised of seven properties.
(r) Comprised of 29 properties.
(s) Depreciation is computed based upon the following estimated lives:
Buildings and Improvement 31.5 to 40 years
Land Improvements 15 years
Furniture, Fixtures and Equipment 5 to 10 years
Tenant Improvements and
Leasehold Improvements Life of Lease
(t) These properties represent vacant land, developments and redevelopments
that have not been placed in service.
(u) Excludes $14,138 of Construction in Progress and $1,353 of Furniture,
Fixtures and Equipment.
At December 31, 1998, the aggregate cost of land and buildings and
equipment for federal income tax purpose was approximately $2.0 billion.
S-15
<PAGE> 118
CONSOLIDATED OPERATING PARTNERSHIP
SCHEDULE III:
REAL ESTATE AND ACCUMULATED DEPRECIATION (continued)
As Of December 31, 1998
(Dollars in thousands)
The changes in total real estate assets for the three years ended
December 31, 1998 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
<S> <C> <C> <C>
Balance, Beginning of Year...................................................... $1,201,060 $ 353,781 $ 96,392
Transfer of Assets Between Other Real Estate Partnerships....................... 457,528 --- ---
Acquisition, Construction Costs and Improvements................................ 548,796 862,103 269,279
Disposition of Assets........................................................... (73,919) (14,824) (11,890)
---------- ----------- ----------
Balance, End of Year............................................................ $2,133,465 $ 1,201,060 $ 353,781
========== =========== ==========
</TABLE>
The changes in accumulated depreciation for the three years ended
December 31, 1998 are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- ----------
<S> <C> <C> <C>
Balance, Beginning of Year...................................................... $ 22,319 $ 8,133 $ 4,852
Transfer of Assets Between Other Real Estate Partnerships....................... 75,338 --- ---
Depreciation for Year........................................................... 48,889 14,660 5,115
Disposition of Assets........................................................... (1,111) (474) (1,834)
---------- ----------- ----------
Balance, End of Year............................................................ $ 145,435 $ 22,319 $ 8,133
========== =========== ==========
</TABLE>
S-16
<PAGE> 1
EXHIBIT 12.1
FIRST INDUSTRIAL, L.P.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED UNIT DISTRIBUTIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income from Operations Before
Disposition of Interest Rate
Protection Agreements and
Restructuring Charge................... $ 98,400 $ 53,519 $ 32,577 $ 12,123 $ 8,823
Plus: Interest Expense and
Amortization of Interest Rate
Protection Agreements and Deferred
Financing Costs........................ 69,713 25,468 4,881 6,803 13,625
------------ ------------ ------------ ------------ ------------
Earnings Before Disposition of
Interest Rate Protection
Agreements, Restructuring Charge
and Fixed Charges...................... $ 168,113 $ 78,987 $ 37,458 $ 18,926 $ 22,448
============ ============ ============ ============ ============
Fixed Charges and Preferred Unit
Distributions (a)...................... $ 100,047 $ 34,555 $ 5,382 $ 7,069 $ 13,645
============ ============ ============ ============ ============
Ratio of Earnings to Fixed Charges
and Preferred Unit Distributions(b).... 1.68x 2.29x 6.96x 2.68x 1.65x
============ ============ ============ ============ ============
</TABLE>
(a) There were no preferred limited partnership distributions in
respect of any period prior to the fiscal quarter ended June 30, 1997
(b) For purposes of computing the ratios of earnings to fixed charges and
preferred unit distributions, earnings have been calculated by adding fixed
charges (excluding capitalized interest) to income from operations before
disposition of interest rate protection agreements and restructuring
charge. Fixed charges consist of interest costs, whether expensed or
capitalized and amortization of interest rate protection agreements and
deferred financing charges.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of First Industrial, L.P. on Form S-3 (File No. 333-43641) of our
report dated February 16, 1999, on our audits of the consolidated financial
statements of First Industrial, L.P. as of December 31, 1998 and 1997, and for
the years ended December 31, 1998, 1997 and 1996 and the financial statement
schedule as of December 31, 1998, which is included in this Annual Report on
Form 10-K and of our report dated February 16, 1999, on our audits of the
combined financial statements of the Other Real Estate Partnerships as of
December 31, 1998 and 1997, and for the years ended December 31, 1998, 1997 and
1996, which is also included in this Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
Chicago, Illinois
March 30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FIRST INDUSTRIAL, L.P. FOR THE YEAR ENDED DECEMBER 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 13,946
<SECURITIES> 0
<RECEIVABLES> 11,404
<ALLOWANCES> (1,649)
<INVENTORY> 0
<CURRENT-ASSETS> 23,701
<PP&E> 2,133,465
<DEPRECIATION> (145,435)
<TOTAL-ASSETS> 2,470,661
<CURRENT-LIABILITIES> 95,279
<BONDS> 1,149,460
0
0
<COMMON> 0
<OTHER-SE> 1,209,559
<TOTAL-LIABILITY-AND-EQUITY> 2,470,661
<SALES> 0
<TOTAL-REVENUES> 293,386
<CGS> 0
<TOTAL-COSTS> (86,422)
<OTHER-EXPENSES> (74,837)
<LOSS-PROVISION> 649
<INTEREST-EXPENSE> (68,862)
<INCOME-PRETAX> 85,998
<INCOME-TAX> 0
<INCOME-CONTINUING> 85,998
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (719)
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<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.32
</TABLE>
<PAGE> 1
EXHIBIT 99
FIRST INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
TO BE HELD ON MAY 12, 1999
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders
(the "Annual Meeting") of First Industrial Realty Trust, Inc. (the "Company")
will be held on Wednesday, May 12, 1999 at 9:00 a.m. at the Sears Tower
Conference Center, Lincoln Room, 233 South Wacker Drive, 33rd Floor, Chicago,
Illinois 60606 for the following purposes:
1. To elect three Class II directors of the Company to serve until the
2002 Annual Meeting of Stockholders and until their respective successors are
duly elected and qualified;
2. To ratify the Board of Directors' selection of
PricewaterhouseCoopers LLP as the Company's independent auditors for the fiscal
year ending December 31, 1999; and
3. To consider and act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.
Any action may be taken on the foregoing matters at the Annual Meeting
on the date specified above, or on any date or dates to which, by original or
later adjournment, the Annual Meeting may be adjourned, or to which the Annual
Meeting may be postponed.
The Board of Directors has fixed the close of business on March 12,
1999 as the record date for the Annual Meeting. Only stockholders of record of
the Company's common stock, $.01 par value per share, at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting and
at any adjournments or postponements thereof.
You are requested to fill in and sign the enclosed Proxy Card, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.
By Order of the Board of Directors
Chicago, Illinois Michael J. Havala
April ___, 1999 Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE> 2
FIRST INDUSTRIAL REALTY TRUST, INC.
311 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
----------------
PROXY STATEMENT
----------------
FOR THE 1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 12, 1999
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of First Industrial Realty Trust, Inc. (the
"Company") for use at the 1999 Annual Meeting of Stockholders of the Company to
be held on Wednesday, May 12, 1999, and at any adjournments or postponements
thereof (the "Annual Meeting"). At the Annual Meeting, stockholders will be
asked to vote on the election of three Class II directors of the Company, to
ratify the Board of Directors' selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for the current fiscal year and to act on any
other matters properly brought before them.
This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are first being sent to stockholders on or about April ___, 1999. The
Board of Directors has fixed the close of business on March 12, 1999 as the
record date for the Annual Meeting (the "Record Date"). Only stockholders of
record of the Company's common stock, par value $.01 per share (the "Common
Stock"), at the close of business on the Record Date will be entitled to notice
of and to vote at the Annual Meeting. As of the Record Date, there were
38,019,898 shares of Common Stock outstanding and entitled to vote at the Annual
Meeting. Holders of Common Stock outstanding as of the close of business on the
Record Date will be entitled to one vote for each share held by them on each
matter presented to the Stockholders at the Annual Meeting.
STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY CARD RECEIVED PRIOR TO
THE VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL
MEETING AS DIRECTED ON THE PROXY CARD. IF A PROPERLY EXECUTED PROXY CARD IS
SUBMITTED AND NO INSTRUCTIONS ARE GIVEN, THE PERSONS DESIGNATED AS PROXY HOLDERS
ON THE PROXY CARD WILL VOTE (I) FOR THE ELECTION OF THE THREE NOMINEES FOR CLASS
II DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT, (II) FOR THE
RATIFICATION OF THE BOARD OF DIRECTORS' SELECTION OF PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR AND (III) IN
THEIR OWN DISCRETION WITH RESPECT TO ANY OTHER BUSINESS THAT MAY PROPERLY COME
BEFORE THE STOCKHOLDERS AT THE ANNUAL MEETING OR AT ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF. IT IS NOT ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE
SET FORTH IN THE PROXY STATEMENT WILL BE PRESENTED AT THE ANNUAL MEETING.
1
<PAGE> 3
The presence, in person or by proxy, of holders of at least a majority
of the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a majority of the votes cast
with a quorum present at the Annual Meeting is required for the election of
Class II directors and the ratification of the selection of the Company's
auditors. Abstentions and broker non-votes will not be counted as votes cast
and, accordingly, will have no effect on the majority vote required, although
they will be counted for quorum purposes.
A stockholder of record may revoke a proxy at any time before it has
been exercised by filing a written revocation with the Secretary of the Company
at the address of the Company set forth above, by filing a duly executed proxy
bearing a later date, or by appearing in person and voting by ballot at the
Annual Meeting. Any stockholder of record as of the Record Date attending the
Annual Meeting may vote in person whether or not a proxy has been previously
given, but the presence (without further action) of a stockholder at the Annual
Meeting will not constitute revocation of a previously given proxy.
The Company's 1998 Annual Report, including financial statements for
the fiscal year ended December 31, 1998, is being mailed to stockholders
concurrently with this Proxy Statement. The Annual Report, however, is not part
of the proxy solicitation material.
PROPOSAL I
ELECTION OF A CLASS OF DIRECTORS
Pursuant to the Articles of Amendment and Restatement of the Company,
as amended (the "Articles"), the maximum number of members allowed to serve on
the Company's Board of Directors is 12. The Board of Directors of the Company
currently consists of nine seats and is divided into three classes, with the
directors in each class serving for a term of three years and until their
successors are duly elected and qualified. The term of one class expires at each
Annual Meeting of Stockholders. Eight persons currently serve as directors of
the Company.
At the Annual Meeting, three directors will be elected to serve until
the 2002 annual meeting of stockholders and until their successors are duly
elected and qualified. The Board of Directors has nominated Michael W. Brennan,
Michael G. Damone and Kevin W. Lynch to serve as Class II directors (the
"Nominees"). Each of the Nominees is currently serving as a Class II director of
the Company and has consented to be named as a nominee in this Proxy Statement.
The Board of Directors anticipates that each of the Nominees will serve as a
director if elected. However, if any person nominated by the Board of Directors
is unable to accept election, the proxies will vote for the election of such
other person or persons as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
2
<PAGE> 4
INFORMATION REGARDING NOMINEES AND DIRECTORS
The following biographical descriptions set forth certain information
with respect to the three Nominees for election as Class II directors at the
Annual Meeting, the continuing directors whose terms expire at the Annual
Meetings of Stockholders in 2000 and 2001 and certain executive officers, based
on information furnished to the Company by such persons. The following
information is as of March 12, 1999, unless otherwise specified.
CLASS II NOMINEES FOR ELECTION AT 1999 ANNUAL MEETING - TERM TO EXPIRE IN 2002
MICHAEL W. BRENNAN Director since 1996
Mr. Brennan, 42, has been a director since March 1996. He has been
President and Chief Executive Officer of the Company since November
1998, prior to which time he served as Chief Operating Officer of the
Company from December 1995 to November 1998 and as Senior Vice
President--Asset Management of the Company from April 1994 to December
1995. He was a partner of The Shidler Group between 1988 and 1994 and
the President of the Brennan/Tomasz/Shidler Investment Corporation and
was in charge of asset management, leasing, project finance, accounting
and treasury functions for The Shidler Group's Chicago operations.
Between 1986 and 1988, Mr. Brennan served as The Shidler Group's
principal acquisition executive in Chicago. Prior to joining The
Shidler Group, Mr. Brennan was an investment specialist with CB
Commercial (now CB Richard Ellis, Inc.). His professional affiliations
include the Urban Land Institute ("ULI"), the National Association of
Industrial and Office Properties ("NAIOP"), the National Association of
Real Estate Investment Trusts ("NAREIT"), National Association of
Manufacturers, the Council for Logistic Management, the Chicago Union
League Club Real Estate Group and the Young Presidents Organization.
MICHAEL G. DAMONE Director since 1994
Mr. Damone, 64, is Director of Strategic Planning for the Company and
has been a director of the Company since June 1994. Between 1973 and
1994, Mr. Damone was Chief Executive Officer of Damone/Andrew, a full
service real estate organization, which developed several million
square feet of industrial, warehouse, distribution and research and
development buildings. Prior to co-founding Damone/Andrew in 1973, Mr.
Damone was the executive vice president of a privately-held, Michigan
based real estate development and construction company, where he was
responsible for the development of industrial/business parks. His
professional affiliations include the Society of Industrial and Office
Realtors ("SIOR"), the National Association of Realtors ("NAR"), the
Michigan Association of Realtors and the South Oakland County Board of
Realtors.
3
<PAGE> 5
KEVIN W. LYNCH Director since 1994
Mr. Lynch, 46, has been a director of the Company since June 1994. Mr.
Lynch is the co-founder and Principal of The Townsend Group
("Townsend"), an institutional real estate consulting firm, which
provides real estate consulting for pension funds and institutional
investors. In his capacity as Principal, Mr. Lynch is responsible for
strategic development and implementation of client real estate
portfolios. Mr. Lynch is also responsible for new product development.
Prior to founding Townsend, Mr. Lynch was associated with Stonehenge
Capital Corporation, where he was involved in the acquisition of
institutional real estate properties and the structuring of
institutional real estate transactions. Since 1996, Mr. Lynch has
served on the Board of Directors for Lexington Corporate Properties. He
is a member of the National Real Estate Advisory Board for the Real
Estate Center at New York University, the National Council of Real
Estate Investment Fiduciaries, the Pension Real Estate Association, the
American Society for Real Estate Research, ULI and NAREIT.
CLASS III CONTINUING DIRECTORS - TERM TO EXPIRE IN 2000
JOHN RAU Director since 1994
Mr. Rau, 50, has been a director of the Company since June 1994. Mr.
Rau is President and Chief Executive Officer of Chicago Title
Corporation, a New York Stock Exchange listed company, and its
subsidiaries Chicago Title and Trust Co., Chicago Title Insurance Co.,
Ticor Title Insurance Co. and Security Union Title Insurance Co. Mr.
Rau is a director of Chicago Title Corporation, Chicago Title and Trust
Co. and Chicago Title Insurance Co., as well as Chairman of the Board
of Directors of Ticor Title Insurance Co. and Security Union Title
Insurance Co. He is also a director of LaSalle National Bank,
Borg-Warner Automotive, Inc. and Nicor Inc. From July 1993 until
November 1996, Mr. Rau was Dean of the Indiana University School of
Business. From 1991 to 1993, Mr. Rau served as Chairman of the Illinois
Economic Development Board and as special advisor to Illinois Governor
James Edgar. From 1990 to 1993, he was Chairman of the Banking Research
Center Board of Advisors and a Visiting Scholar at Northwestern
University's J.L. Kellogg Graduate School of Management. During that
time he also served as Special Consultant to McKinsey & Company, a
worldwide strategic consulting firm. From 1989 to 1991, Mr. Rau served
as President and Chief Executive Officer of LaSalle National Bank. From
1979 to 1989, he was associated with The Exchange National Bank,
serving as President from 1983 to 1989, at which time The Exchange
National Bank merged with LaSalle National Bank. Prior to 1979, he was
associated with First National Bank of Chicago.
ROBERT J. SLATER Director since 1994
Mr. Slater, 61, has been a director of the Company since June 1994.
Since 1985, Mr. Slater has been President of Jackson Consulting, Inc.,
a private consulting company specializing in advising basic
manufacturing and the distribution industries. Mr. Slater is also a
director of Southdown, Inc., a
4
<PAGE> 6
major cement and cement products manufacturing company, based in
Houston, Texas. He has retired as President of Crane Co., a
multinational manufacturing company.
CLASS I CONTINUING DIRECTORS - TERM TO EXPIRE IN 2001
JAY H. SHIDLER Director since 1993
Mr. Shidler, 52, has been Chairman of the Board of Directors since the
formation of the Company in August 1993. He is the founder and managing
partner of The Shidler Group. A nationally acknowledged expert in the
field of real estate investment and finance, Mr. Shidler has over 30
years of experience in real estate investment and has acquired and
managed properties involving several billion dollars in aggregate
value. Since 1970, Mr. Shidler has been directly involved in the
acquisition and management of over 1,000 properties in 40 states and
Canada. Mr. Shidler is the Chairman of the Board of Directors of
Corporate Office Properties Trust, Inc. (OFC: NYSE). Mr. Shidler is
also a founder and Chairman of the Board of Directors of CGA Group,
Ltd., a holding company whose subsidiary is a AAA-rated financial
guarantor based in Bermuda. He serves on the boards of directors of
several private companies and is active as a trustee of several
charitable organizations, including The Shidler Family Foundation. Mr.
Shidler is a member of ULI and NAREIT.
JOHN L. LESHER Director since 1994
Mr. Lesher, 65, has been a director of the Company since June 1994. Mr.
Lesher is President of Jack Lesher and Associates, a management
consulting firm. He was President of Resource Evaluation, Inc., a
consulting firm specializing in working capital management, from 1994
to July 1997, at which time he became the Chairman. He is a director of
REL Consultancy Group, the parent of Resource Evaluation, Inc., and a
director of The Sound Shore Fund. From 1990 to 1993, he was a Managing
Director of Korn/Ferry International, an executive recruiting
organization. From 1985 to 1989, he was Vice President of the New York
financial services practice of Cresap, McCormick & Paget, a management
consulting organization; President of Home Group Financial Services, a
subsidiary of Home Insurance Company; and President of Mars & Company,
an international strategic planning and consulting firm. Prior to 1985,
he served for 24 years in various capacities at Booz, Allen & Hamilton,
including from 1976 to 1985 as its President.
J. STEVEN WILSON Director since 1994
Mr. Wilson, 55, has been a director of the Company since June 1994.
Since 1991, Mr. Wilson has been Chairman of the Board of Directors,
President and Chief Executive Officer and a director of Wickes Inc.,
which is one of the largest lumber yard chains in the United States.
Since 1985, Mr. Wilson has been President, Chief Executive Officer and
a director of Riverside Group, Inc., an Internet development company
with e-commerce operations.
5
<PAGE> 7
EXECUTIVE OFFICERS AND OTHER SENIOR MANAGEMENT
MICHAEL J. HAVALA
Mr. Havala, 39, has been Chief Financial Officer, Treasurer and
Secretary of the Company since April 1994. He joined The Shidler Group
in 1989, and was Chief Financial Officer for The Shidler Group's
midwest region with responsibility for accounting, finance and treasury
functions. With The Shidler Group, Mr. Havala structured joint
ventures, obtained and refinanced project financing, developed and
implemented management information systems and directed all financial
aspects of a several million square foot portfolio located in various
states throughout the Midwest. Prior to joining The Shidler Group, Mr.
Havala was a Senior Tax Consultant with Arthur Andersen & Company,
where he specialized in real estate, banking and corporate finance. Mr.
Havala is a certified public accountant. His professional affiliations
include NAREIT and the Illinois CPA Society.
GARY H. HEIGL
Mr. Heigl, 43, has been the Chief Operating Officer of the Company
since December 1998, prior to which time he served as Senior Vice
President--Capital Markets of the Company from January 1996 to December
1998. Over the last 20 years, Mr. Heigl has specialized in commercial
real estate finance. During 1994 and 1995, Mr. Heigl was Senior Vice
President--Director of New Business Development for ITT Real Estate
Services, Inc. From 1991 through 1993, he operated his own real estate
consulting firm. From 1984 through 1990, Mr. Heigl served in various
project finance capacities at VMS Realty Partners culminating as Senior
Vice President--Finance and Dispositions. Prior to 1984, he served in
lending officer positions for the commercial real estate groups of ITT
Financial and Aid Association for Lutherans. Mr. Heigl's professional
affiliations include ULI and NAREIT.
JOHANNSON L. YAP
Mr. Yap, 36, has been the Chief Investment Officer of the Company since
February 1997. From April 1994 to February 1997, he served as Senior
Vice President--Acquisitions of the Company. During this time, he
oversaw and implemented the Company's investment strategy and
initiatives. In addition to participating in over one billion dollars
of investments, Mr. Yap has extensive experience in entity acquisitions
using the UPREIT structure. Prior to joining the Company, Mr. Yap
joined The Shidler Group in 1988 as an acquisitions associate, and
became Vice President in 1991, with responsibility for acquisitions,
property management, leasing, project financing, sales and construction
management functions. Between 1988 and 1994, he participated in the
acquisition, underwriting and due diligence of several hundred million
dollars of commercial properties. His
6
<PAGE> 8
professional affiliations include the Chicago Real Estate Council, ULI,
NAREIT, NAIOP and the Real Estate Investment Advisory Council.
ANTHONY MUSCATELLO
Mr. Muscatello, 50, has been the senior officer of the Company in
charge of development activities, as President of FI Development
Services Corporation, since September 1996, prior to which he had
served as a Senior Regional Director for Pennsylvania, Nashville and
Atlanta since June 1994. Over the last 25 years, he has been
responsible for the leasing, management and/or development of several
million square feet of office, industrial and residential real estate.
From 1987 to 1994, he served as Managing General Partner of the central
Pennsylvania operations of Rouse & Associates, where he was responsible
for day-to-day operations, including profit and loss, marketing,
leasing, acquisition, financing, construction and asset management
functions. From 1982 to 1987, he served in various capacities with
Rouse & Associates. From 1969 to 1982, Mr. Muscatello worked for
several real estate development firms, where his responsibilities
included land acquisition, market analysis and marketing, sales,
financing and construction of single family and multi-family homes. He
is an active member in NAIOP and the Industrial Real Estate Brokers of
Metropolitan New York.
DAVID P. DRAFT
Mr. Draft, 47, has been Managing Director of the Company's midwest
region since December 1998, prior to which time he served as a Senior
Regional Director of the Company for the Michigan and Northern Ohio
regions from March 1996 to December 1998. He oversees acquisitions,
developments, construction, asset management and lease negotiations for
the several million square foot regional portfolio. He has 24 years
experience in real estate brokerage, sales, leasing and asset
management. Between 1994 and March 1996, Mr. Draft was Co-Founder and
Principal of Draft & Gantos Properties, L.L.C., where he was
responsible for real estate management, construction and development.
From 1990 to 1994, Mr. Draft was Director of Development and Operations
for Robert Grooters Development Company where he was responsible for
land acquisitions, development project planning, financing and
construction of industrial property. From 1977 to 1990, he was with
First Real Estate, Inc. serving in the capacity of chief operating
officer. Mr. Draft is a licensed real estate broker and a member of NAR
and the Michigan Association of Realtors.
PETER F. MURPHY
Mr. Murphy, 33, has been Managing Director of the Company's eastern
region since December 1998, prior to which time he had served as a
Senior Regional Director of the Company for Indiana and Ohio since
March 1996. Between 1991 and March 1996, Mr. Murphy was a Vice
President of First Highland Management and Development Corporation
where he was responsible for the acquisition, development, management
and leasing activities for a portfolio of properties consisting of
several million square feet in Indiana and Ohio. Mr. Murphy is a member
of NAIOP.
7
<PAGE> 9
TIMOTHY E. GUDIM
Mr. Gudim, 39, has been Managing Director of the Company's western and
Gulf regions since December 1998, prior to which time he served as a
Senior Regional Director of the Company's western region from June 1998
to December 1998 and as a Regional Director for Colorado from November
1997 to June 1998. He oversees acquisitions, development,
build-to-suits, asset management and lease negotiations for the several
million square foot regional portfolio. Mr. Gudim has 17 years
experience in the industrial real estate field. Between 1991 and
October 1997, he was Vice President and a Principal of Pacifica Holding
Company, a full service real estate company operating in Denver. Mr.
Gudim's professional affiliations include NAIOP, SIOR and the
Association of Industrial Realtors.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company is currently managed by an eight member Board of Directors,
a majority of whom are independent of both The Shidler Group and the Company's
management. The current independent directors are Messrs. Lesher, Wilson, Lynch,
Rau and Slater. Pursuant to the terms of the Company's Articles, the directors
are divided into three classes. Class II directors hold office for a term
expiring at this Annual Meeting. Class III directors hold office for a term
expiring at the Annual Meeting of Stockholders to be held in 2000. Class I
directors hold office for a term expiring at the Annual Meeting of Stockholders
to be held in 2001. Each director will hold office for the term to which he is
elected and until his successor is duly elected and qualified. At each Annual
Meeting of Stockholders, the successors to the class of directors whose terms
expire at that meeting will be elected to hold office for a term continuing
until the Annual Meeting of Stockholders held in the third year following the
year of their election and the election and qualification of their successors.
The Board of Directors held eight meetings during the fiscal year of
1998. Except for Messrs. Rau and Lynch, each of the directors attended at least
75% of the total number of meetings of the Board of Directors and of the
respective committees of the Board of Directors of which he was a member.
The Board of Directors has appointed an Audit Committee, a Compensation
Committee, an Investment Committee, a Nominating Committee and a Special
Committee.
Audit Committee. The Audit Committee, which consists of Messrs. Rau,
Lynch and Wilson, makes recommendations concerning the engagement of independent
public accountants, reviews with the independent public accountants the plans
and results of the audit engagement, approves professional services provided by
the independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of the Company's internal accounting controls. The Audit Committee
met two times in 1998.
8
<PAGE> 10
Compensation Committee. The Compensation Committee, which consists of
Messrs. Slater and Lesher, makes recommendations and exercises all powers of the
Board of Directors in connection with certain compensation matters, including
incentive compensation and benefit plans. The Compensation Committee
administers, and has authority to grant awards under, the First Industrial
Realty Trust, Inc. 1994 Stock Incentive Plan (the "1994 Stock Plan"), the First
Industrial Realty Trust, Inc. 1997 Stock Incentive Plan (the "1997 Stock Plan")
and the First Industrial Realty Trust, Inc. Deferred Income Plan (the "Deferred
Income Plan"). The Compensation Committee met five times in 1998.
Investment Committee. The Investment Committee, which consists of
Messrs. Shidler, Brennan and Damone, provides oversight and discipline to the
acquisition and new investment process. New investment opportunities are
described in written reports based on detailed research and analyses in a
standardized format applying appropriate underwriting criteria. The Investment
Committee meets with the Company's acquisition personnel, reviews each
submission thoroughly and approves acquisitions and development projects having
a total investment of less than $30 million. The Investment Committee makes a
formal recommendation to the Board of Directors for all acquisitions and
development projects with a total investment in excess of $30 million. The
Investment Committee met 37 times during 1998.
Nominating Committee. The Nominating Committee proposes individuals for
election as directors at the Annual Meeting of Stockholders of the Company and
in connection with any vacancy that may develop on the Board of Directors. The
Board of Directors, in turn, as a whole by a majority vote either approves all
of the nominations so proposed by the Nominating Committee or rejects all of the
nominations in whole, but not in part. In the event that the Board of Directors
as a whole by a majority vote rejects the proposed nominations, the Nominating
Committee develops a new proposal. The Nominating Committee will consider
nominees recommended by stockholders of the Company. Such recommendations shall
be submitted in writing to the Secretary of the Company. The membership of the
Nominating Committee consists of a total of four directors which includes (i)
the Chairman of the Board of the Company, (ii) the President of the Company, and
(iii) two other directors selected by the entire Board of Directors of the
Company from among those directors who are not officers of the Company and whose
term is not expiring in the calendar year that the Nominating Committee is
making its proposal. The Nominating Committee that made the proposals approved
by the Board of Directors and set forth in this Proxy Statement consisted of
Messrs. Shidler, Brennan, Rau and Slater. The Nominating Committee met once in
March 1999 to determine its nominations for this Proxy Statement.
Special Committee. The Special Committee consists of Messrs. Shidler,
Brennan and Rau. The Special Committee is authorized, within limits specified by
the Board of Directors, to approve the terms under which the Company issues
common stock, preferred stock or depository shares representing fractional
interests in preferred stock, or which the Company or any of the Company's
subsidiaries, including First Industrial, L.P., issues debt. The Special
Committee met five times during 1998.
9
<PAGE> 11
DIRECTOR COMPENSATION
Directors of the Company who are also employees receive no additional
compensation for their services as a director. Non-employee directors of the
Company receive an annual director's fee equivalent in value to $20,000. At
least 50% of the value of such fee must be taken in the form of restricted
stock. Each non-employee director also receives $1,000 for each regular
quarterly meeting of the Board of Directors attended, $1,000 for each special
meeting of the Board attended, $1,000 for each substantive special telephonic
Board meeting participated in and $1,000 for each committee meeting attended.
Following the Annual Meeting of Stockholders held in 1998, each of the Company's
non-employee directors received options under the 1997 Stock Plan to purchase
10,000 shares at the market price of the shares on the date of grant. Such
options granted to non-employee directors vest one year after the date of grant.
Following this Annual Meeting the Company intends to grant 10,000 options under
the 1997 Stock Plan to each of the Company's non-employee directors. Such
options will be granted at the market price of the shares on the date of grant
and will vest one year after the date of grant.
10
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation, including
cash compensation and restricted stock and option awards, paid by the Company
with respect to the fiscal years ended December 31, 1996, 1997 and 1998 to the
Company's Chief Executive Officer, the four other most highly compensated
executive officers of the Company and to the Company's former Chief Executive
Officer (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
11
<PAGE> 13
<TABLE>
<CAPTION>
Long Term
Compensation
--------------------------------
Restricted Shares All Other
Name and Annual Stock Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Awards($)(2) Options(#) ($)(6)
- ------------------ ---- --------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael W. Brennan 1998 $ 276,875 $ 345,000 $ 163,313 85,000 (5) $ 90,054
President and 1997 225,000 337,500 178,125 310,000 (4) 59,112
Chief Executive Officer 1996 190,000 285,000 200,366 65,000 (3) 19,148
Michael J. Havala 1998 $ 225,000 $ 275,000 $ 138,188 45,000 (5) $ 71,434
Chief Financial 1997 195,000 292,500 142,500 220,000 (4) 52,511
Officer, Treasurer and 1996 175,000 236,241 154,135 44,000 (3) 17,529
Secretary
Gary H. Heigl 1998 $ 219,167 $ 320,000 $ 150,750 69,000 (5) $ 58,502
Chief Operating Officer 1997 185,000 277,500 142,500 220,000 (4) 38,157
1996 150,000 184,375 129,115 62,000 (3) 10,030
Johannson L. Yap 1998 $ 200,000 $ 300,000 $ 125,625 40,000 (5) $ 58,502
Chief Investment Officer 1997 150,000 300,000 199,500 265,000 (4) 38,157
1996 140,000 238,510 144,139 42,500 (3) 10,432
Anthony Muscatello 1998 $ 185,000 $ 310,000 $ 120,600 40,000 (5) $ 52,967
President of FI 1997 165,000 300,000 124,688 232,000 (4) 37,489
Development Services 1996 125,000 209,250 89,250 30,000 (3) 14,688
Corporation
Michael T. Tomasz 1998 $ 350,000 $ 450,000 $ 0 13,700 (5) $ 104,676
1997 300,000 450,000 222,656 375,000 (4) 128,608
1996 250,000 375,000 249,037 90,000 (3) 51,136
</TABLE>
12
<PAGE> 14
- -------------------
(1) Amounts for 1996 represent bonuses awarded in February 1997 based on
performance for the year ended December 31, 1996 and include bonus
amounts awarded in 1996 in conjunction with the Company's profitability
incentive plan. Amounts for 1997 represent bonuses awarded in February
1998 based on performance for the year ended December 31, 1997. Amounts
for 1998, other than for Mr. Tomasz, represent bonuses awarded in
February 1999 based on performance for the year ended December 31,
1998. Mr. Tomasz's 1998 bonus was paid pursuant to his Separation
Agreement.
(2) Amounts for 1996 represent restricted Common Stock awarded (but not
issued until September and October 1997) in February 1997 as part of
the annual bonus with respect to 1996 performance. Amounts for 1997
represent restricted Common Stock awarded in February 1998 as part of
the annual bonus with respect to 1997 performance. Amounts for 1998
represent restricted Common Stock awarded in March 1999 as part of the
annual bonus with respect to 1998 performance. The dollar amount shown
is approximately equal to the product of the number of shares of
restricted Common Stock granted multiplied by the closing price of the
Common Stock as reported by the New York Stock Exchange on the date of
grant ($29.75 on February 14, 1997 for 1996 amounts; $35.625 on for
February 18, 1998 for 1997 amounts; $25.125 on March 4, 1999 1998
amounts). This valuation does not take into account any diminution in
value which results from the restrictions applicable to such Common
Stock. From and after the date of issuance, holders of the restricted
Common Stock are entitled to vote such Common Stock and receive
dividends at the same rate applicable to unrestricted shares of
Common Stock; however, with respect to the restricted Common Stock
awarded in February 1997, but issued in September and October 1997, the
Named Executive Officers earned amounts equal to the dividends that
would have been payable if such restricted Common Stock had been issued
when awarded (such amounts equaled as follows: Mr. Brennan - $6,802,
Mr. Havala - $5,232, Mr. Heigl - $8,929, Mr. Yap - $4,893, Mr.
Muscatello - $3,030 and Mr. Tomasz - $8,455). The total number of
shares, and the value, of restricted Common Stock awarded to each Named
Executive Officer as of December 31, 1998 is as follows: Mr. Brennan -
11,735 shares ($314,645), Mr. Havala - 9,181 shares ($246,166), Mr.
Heigl - 12,840 shares ($344,273), Mr. Yap - 10,445 shares ($280,057),
Mr. Muscatello - 6,200 shares ($166,238) and Mr. Tomasz - 14,621 shares
($392,026). Restrictions with respect to restricted Common Stock
awarded to Mr. Tomasz were removed in November 1998 pursuant to his
Separation Agreement. An aggregate of 6,051 shares of restricted Common
Stock awarded to Messrs. Brennan, Havala, Heigl and Yap vested in
January 1999 and restrictions with respect to such shares have been
removed.
(3) Amounts for 1996 represent (a) an aggregate of 98,500 options granted
to the Named Executive Officers on July 11, 1996 under the 1994 Stock
Plan at an exercise price equal to $22.75 per share, (b) an aggregate
of 215,000 options granted to the Named Executive Officers on May 13,
1997 under the 1994 and 1997 Stock Plans at an exercise price equal to
$30.38 per share and (c) 20,000 options granted to Mr. Heigl on
July 10, 1997 under the 1997 Stock Plan at an exercise price equal to
$28.50 per share. These options vested in two equal installments on the
six-month and first year anniversary of the date of grant.
(4) Amounts for 1997 represent (a) an aggregate of 1,335,000 options
granted to the Named Executive Officers under the 1997 Stock Plan on
January 2, 1998 at an exercise price equal to $35.8125 per share and
which vest primarily in accordance with certain performance measures
established by the Compensation Committee and (b) an aggregate of
287,000 options granted to the Named Executive Officers under the 1997
Stock Plan on May 14, 1998 at an exercise price equal to $31.13 per
share and which vest in two equal installments on the six month and
first year anniversary of the date of grant, except for Mr. Tomasz's
options which vested on November 11, 1998 pursuant to his Separation
Agreement. All 300,000 options granted to Mr. Tomasz on January 2, 1998
have been cancelled pursuant to his Separation Agreement.
(5) Amounts for 1998 represent an aggregate of 239,000 options which the
Compensation Committee, in March 1999, determined to grant following
the Annual Meeting in May 1999 to the Named Executive Officers, other
than Mr. Tomasz, under the 1997 Stock Plan. Such options will vest in
two equal installments on the six-month and first year anniversary of
the date of grant and shall have an exercise price equal to the closing
price per share of Common Stock on the date of grant. Amounts for 1998
also represent (a) 13,700 options granted to Mr.
13
<PAGE> 15
Tomasz, pursuant to his Separation Agreement, under the 1997 Stock Plan
on November 11, 1998 at an exercise price equal to $30.00 per share and
which immediately vested, and (b) an aggregate of 40,000 options
granted to Messrs. Brennan and Heigl under the 1997 Stock Plan on
December 3, 1998 at an exercise price equal to $24.00 per share and
which vest in two equal installments on the six month and first year
anniversary of the date of grant.
(6) Includes premiums paid by the Company on term life insurance for the
benefit of the Named Executive Officers. Amounts reported for 1996 also
include benefits accrued on units awarded in 1996 to the Named
Executive Officers under the Deferred Income Plan. Generally, amounts
accrued under the Deferred Income Plan vest in equal quarterly
installments over three years and are paid out (in cash or Common Stock
at the discretion of the Compensation Committee) in three annual
installments, commencing on the January 31st after the date of grant.
Amounts accrued under the Deferred Income Plan to each Named Executive
Officer in 1996 were used to acquire Common Stock having an aggregate
value at the time of acquisition to each such Named Executive Officer
as follows: Mr. Brennan - $16,173, Mr. Havala - $14,974, Mr. Heigl -
$10,030, Mr. Yap - $9,861, Mr. Muscatello - $10,646 and Mr. Tomasz -
$34,971. Amounts accrued under the Deferred Income Plan to each Named
Executive Officer in 1997 were used to acquire Common Stock having an
aggregate value at the time of acquisition to each such Named Executive
Officer as follows: Mr. Brennan - $56,137, Mr. Havala - $49,956, Mr.
Heigl - $37,424, Mr. Yap - $37,424, Mr. Muscatello - $33,303 and Mr.
Tomasz - $112,443. A portion of the amounts accrued under the Deferred
Income Plan to each Named Executive Officer, other than Mr. Tomasz, in
1998 were used to acquire Common Stock having an aggregate value at the
time of acquisition to each such officer as follows: Mr. Brennan -
$43,591, Mr. Havala - $34,491, Mr. Heigl - $28,936, Mr. Yap - $28,936
and Mr. Muscatello - $29,389. The remainder of the amounts accrued
under the Deferred Income Plan to each Named Executive Officer, other
than Mr. Tomasz, in 1998 were paid in cash. All amounts accrued under
the Deferred Income Plan to Mr. Tomasz in 1998 were paid in cash
pursuant to his Separation Agreement. In addition to amounts reported
for Mr. Tomasz for 1998, on January 6, 1999, the Company paid Mr.
Tomasz approximately $2,724,214 in connection with his Separation
Agreement.
OPTION GRANTS AND EXERCISES
Option Grants. The following table sets forth the options granted in
the fiscal year ended December 31, 1998 to the Named Executive Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1998
------------------------------------------------------------
Individual Grants
------------------------------------------------------------
Percent of
Number of Total Options
Options Granted to Exercise or Total Present
Granted Employees in Base Price Expiration Value as
NAME (#)(1) 1998 (%)(2) ($/SH) Date(s) of Grant Date(3)
- ---- ----------- --------------- ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Michael W. Brennan 335,000 6.5 $ (4) (4) $ (4)
Michael J. Havala 220,000 4.2 (5) (5) (5)
Gary H. Heigl 235,000 4.5 (6) (6) (6)
Johannson L. Yap 265,000 5.1 (7) (7) (7)
Anthony Muscatello 232,000 4.5 (8) (8) (8)
Michael T. Tomasz 388,700 7.5 (9) (9) (9)
</TABLE>
14
<PAGE> 16
- -------------------
(1) Represents an aggregate of (i) 1,335,000 options granted on January 2,
1998 to the Named Executive Officers (ii) 287,000 options granted on
May 14, 1998 to the Named Executive Officers (iii) 13,700 options
granted on November 11, 1998 to Mr. Tomasz pursuant to his Separation
Agreement and (iv) an additional 25,000 and 15,000 options granted to
Messrs. Brennan and Heigl, respectively, on December 3, 1998. All of
such options were granted under the 1997 Stock Plan. Of the options
granted on January 2, 1998, 1,035,000 vest primarily in accordance with
certain performance measures established by the Compensation Committee;
of the options granted on May 14, 1998, 212,000 vest in two equal
installments on the six-month and first year anniversary of the date of
grant; of the options granted to Mr. Tomasz, 300,000 have been
cancelled and 88,700 vested on November 11, 1998 pursuant to his
Separation Agreement. The options granted to Messrs. Brennan and Heigl
on December 3, 1998 vest in two equal installments on the six month and
first year anniversary of the date of grant.
(2) Percentages do not take into account 60,000 options in the aggregate
granted to non-employee directors of the Company.
(3) Based on the Black-Scholes option pricing model adapted for use in
valuing stock options. The actual value, if any, that the Named
Executive Officer may receive would depend on the excess of the stock
price at the time of exercise over the exercise or base price on the
date the option is exercised. There is no assurance that the value
realized by the Named Executive Officer would be at or near the value
estimated by the Black-Scholes model. The estimated values under the
model are based on certain assumptions, such as interest rates, stock
price volatility and future dividend yields.
(4) Mr. Brennan received a grant of 250,000 options on January 2, 1998
which expire January 2, 2008, have an exercise price of $35.8125 and
had a total present value as of the date of grant of $757,500. Mr.
Brennan received a second grant of 60,000 options on May 14, 1998 which
expire May 14, 2008, have an exercise price of $31.13 and had a total
present value as of the date of grant of $159,600. Mr. Brennan received
a third grant of 25,000 options on December 3, 1998 which expire
December 3, 2008 have an exercise price of $24.00 and had a total
present value as of the date of grant of $43,750.
(5) Mr. Havala received a grant of 180,000 options on January 2, 1998 which
expire January 2, 2008, have an exercise price of $35.8125 and had a
total present value as of the date of grant of $545,400. Mr. Havala
received a second grant of 40,000 options on May 14, 1998 which expire
May 14, 2008, have an exercise price of $31.13 and had a total present
value as of the date of grant of $106,400.
(6) Mr. Heigl received a grant of 180,000 options on January 2, 1998 which
expire January 2, 2008, have an exercise price of $35.8125 and had a
total present value as of the date of grant of $545,400. Mr. Heigl
received a second grant of 40,000 options on May 14, 1998 which expire
May 14, 2008, have an excise price of $31.13 and had a total present
value as of the date of grant of $106,400. Mr. Heigl received a third
grant of 15,000 options on December 3, 1998 which expire December 3,
2008, have an excise price of $24.00 and had a total present value as
of the date of grant of $26,250.
(7) Mr. Yap received a grant of 225,000 options on January 2, 1998 which
expire January 2, 2008, have an exercise price of $35.8125 and had a
total present value as of the date of grant of $681,750. Mr. Yap
received a second grant of 40,000 options on May 14, 1998 which expire
May 14, 2008, have an exercise price of $31.13 and had a total present
value as of the date of grant of $106,400.
(8) Mr. Muscatello received a grant of 200,000 options on January 2, 1998
which expire January 2, 2008, have an exercise price of $35.8125 and
had a total present value as of the date of grant of $606,000. Mr.
Muscatello received a second grant of 32,000 options on May 14, 1998
which expire May 14, 2008, have an exercise price of $31.13 and had a
total present value as of the date of grant of $85,120.
15
<PAGE> 17
(9) Mr. Tomasz received a grant of 300,000 options on January 2, 1998. All
of such options have been cancelled. Mr. Tomasz received a second grant
of 75,000 options on May 14, 1998 which, pursuant to the terms of his
Separation Agreement, expire November 10, 2001, have an exercise price
of $31.13 and had a total present value as of the date of grant of
$199,500. Mr. Tomasz received a third grant of 13,700 options on
November 11, 1998 pursuant to his Separation Agreement which expire
November 10, 2001, have an exercise price of $30.00 and had a total
present value as of the date of grant of $16,714.
Option Exercises and Year-End Holdings. No options were exercised in
1998 by the Named Executive Officers. During such period an aggregate of 42,000
vested options were converted into restricted Common Stock by certain of the
Named Executive Officers. The following table sets forth the value of options
held at the end of 1998 by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR-END 1998 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR-END(#) DECEMBER 31, 1998(2)
ACQUIRED ON VALUE ----------------------- ----------------------
NAME EXERCISE(#)(1) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael W. Brennan 0 0 115,000 305,000 $ 196,250 $70,313
Michael J. Havala 0 0 130,000 200,000 319,000 0
Gary H. Heigl 0 0 82,000 215,000 48,750 42,188
Johannson L. Yap 0 0 102,500 245,000 215,781 0
Anthony Muscatello 0 0 96,000 216,000 271,250 0
Michael T. Tomasz 0 0 330,700 0 739,125 0
</TABLE>
- -------------------
(1) No options were exercised in 1998 by the Named Executive Officers.
During such period, certain of the Named Executive Officers converted
an aggregate of 42,000 vested options into restricted Common Stock. The
number of shares of restricted Common Stock received by each Named
Executive Officer in 1998 as a result of such conversion were as
follows: Mr. Brennan - 8,363 and Mr. Havala - 1,235.
(2) Based on the closing price per share of Common Stock as reported on the
New York Stock Exchange on December 31, 1998 ($26.8125).
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (as amended, the
"Exchange Act") requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange.
Officers, directors and "greater than ten-percent" stockholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms so
filed.
Based solely on review of the copies of such forms furnished to the
Company for 1998, all Section 16(a) filing requirements applicable to the
Company's officers, directors and "greater than ten-
16
<PAGE> 18
percent" stockholders were complied with, except that (i) each of Craig
Cosgrove, Scott Sealy, Sr., Donald Thompson, Timothy Donohue and Timothy Gudim
filed his Form 3 late, (ii) each of Jan Burman, Michael Damone, David Draft,
Timothy Gallagher, Michael Havala, Gary Heigl, Duane Lund, Peter Murphy, Anthony
Muscatello, Scott Musil, Jay Shidler and Michael Tomasz filed one Form 4 late
with respect to a transaction in January 1998 and (iii) Jan Burman filed one
Form 4 late with respect to a transaction in March 1998.
17
<PAGE> 19
EMPLOYMENT AGREEMENTS
In December 1996, the Company entered into a written employment
agreement with Michael T. Tomasz. The agreement provided for an initial term of
three years and subsequent three-year periods unless otherwise terminated. Upon
certain changes in control of the Company or a termination without cause, Mr.
Tomasz was entitled to severance in an amount equal to three times his annual
salary, three times his average bonus over the prior three years, immediate
vesting of his options and similar awards and the continuation of his other
benefits for three years. Mr. Tomasz agreed to a three-year covenant not to
compete after termination. In November 1998, Mr. Tomasz resigned his position as
President and Chief Executive Officer, and as a director, of the Company
pursuant to a Separation Agreement. Pursuant to the terms of the Separation
Agreement, Mr. Tomasz received, in addition to the remainder of his 1998 salary
and other 1998 compensation, a cash severance payment of approximately
$2,724,214 and 13,700 stock options with an exercise price of $30.00 per share
and an expiration date of November 10, 2001. All 300,000 stock options granted
to Mr. Tomasz on January 2, 1998 were cancelled. The remainder of Mr. Tomasz's
stock options became fully vested, with their expiration date accelerated to
November 10, 2001. In addition, all of Mr. Tomasz's restricted stock became
fully vested. The Separation Agreement supercedes and replaces Mr. Tomasz's
employment agreement except in respect of certain obligations contained in such
agreement, including, without limitation, confidentiality and loyalty,
indemnification and the covenant not to compete.
In February 1997, the Company entered into a written employment
agreement with Michael W. Brennan, who became the Company's President and Chief
Executive Officer in November 1998. The agreement provides for an initial annual
minimum base salary of $195,000, which may be increased at the discretion of the
Compensation Committee, and an annual bonus at the discretion of the
Compensation Committee. The agreement provides for an initial term of two years
and subsequent two year periods unless otherwise terminated; provided, however,
that the agreement will expire on Mr. Brennan's 70th birthday. Upon certain
changes in control of the Company or a termination without cause, Mr. Brennan is
entitled to severance in an amount equal to two times his annual salary, plus
two times his average bonus over the prior two years. In addition, upon
termination, Mr. Brennan's options and awards under the 1994 Stock Plan, the
1997 Stock Plan and Deferred Income Plan will fully vest and his other benefits
will continue for a period of two years. Severance amounts payable to Mr.
Brennan upon termination will be reduced if such amounts become payable after
Mr. Brennan's 67th birthday. Mr. Brennan has agreed to a two-year covenant not
to compete after termination.
STOCK PERFORMANCE GRAPH
The incorporation by reference of this Proxy Statement into any
document filed with the SEC by the Company shall not be deemed to include the
following performance graph unless such graph is specifically stated to be
incorporated by reference into such document.
The following graph provides a comparison of the cumulative total
stockholder return among the Company, the NAREIT Equity REIT Total Return Index
(the "NAREIT Index"), an industry index which, as
18
<PAGE> 20
of December 31, 1998, was comprised of 173 tax-qualified equity REITs (including
the Company) and the Standard & Poor's 500 Index ("S&P 500"). The comparison is
for the period from May 31, 1994 (for the NAREIT Index and the S&P 500) and June
23, 1994 (for the Company, the date of the Initial Public Offering of its Common
Stock) to December 31, 1998 and assumes the reinvestment of any dividends. The
initial price of the Company's Common Stock shown in the graph below is based
upon the price to the public of $23.50 per share in the Initial Public Offering
on June 23, 1994. The Common Stock of the Company was first listed for quotation
on the New York Stock Exchange on June 24, 1994. The closing price quoted on the
New York Stock Exchange at the close of business on June 24, 1994 was $23-5/8
per share. The NAREIT Index includes REITs with 75% or more of their gross
invested book value of assets invested directly or indirectly in the equity
ownership of real estate. Upon written request, the Company will provide
stockholders with a list of the REITs included in the NAREIT Index. The
historical information set forth below is not necessarily indicative of future
performance. The following graph was prepared at the Company's request by
Research Data Group, Inc., San Francisco, California.
[Graphic materials is presented here]
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN
--------------------------------------------------------------------------------------------
6/24/94 12/94 12/95 12/96 12/97 12/98
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FIRST INDUSTRIAL REALTY TRUST, INC. $100 $87 $110 $161 $204 $163
NAREIT EQUITY 100 96 111 150 180 148
S & P 500 100 102 141 173 231 297
--------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 21
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is composed of two
of the Company's independent outside directors, Messrs. Slater and Lesher. The
Compensation Committee is responsible for administering the policies which
govern the Company's executive compensation.
Objectives of Executive Compensation. The Compensation Committee has
designed its compensation policy to provide the proper incentives to management
to maximize the Company's performance in order to serve the best interests of
its stockholders. As a result, the Compensation Committee intends to focus on
incentive awards, such as stock option grants, restricted stock awards and
deferred income awards (as described below), as opposed to large salary
increases, to emphasize performance related incentive compensation. The
Compensation Committee currently grants stock option and other incentive awards
under the 1997 Stock Plan and the Deferred Income Plan.
The bonuses and incentive awards awarded for 1998 performance to the
Chief Executive Officer and the other executive officers were based on the
Company's Funds from Operations ("FFO"), an industry recognized measure of a
REIT's performance, and officer specific performance objectives, such as
individual performance related to same property net operating income growth and
investment goals.
The Company maintains the philosophy that compensation of its executive
officers and others should be directly and materially linked to operating
performance. To achieve this linkage, executive compensation is weighted towards
bonuses paid and incentive awards granted on the basis of the Company's
performance. Thus, while annual salary increases are based on personal
performance of the executive officers and general economic conditions, annual
bonuses and incentive award grants are directly tied to the Company's actual
economic performance during the applicable fiscal year.
Stock options, together with other incentive awards (e.g., restricted
stock), are granted to the executives under the provisions of the 1997 Stock
Plan. In addition, incentive awards are granted under the Deferred Income Plan.
Such incentive awards are granted to provide incentive to improve stockholder
value over the long-term and to encourage and facilitate executive stock
ownership. Stock options are granted at the market price of the Common Stock at
the date of grant to ensure that executives can only be rewarded for
appreciation in the price of the Common Stock when the Company's stockholders
are similarly benefited. The Compensation Committee determines those executives
who will receive incentive award grants and the size of such awards.
Compensation Committee Procedures. The Compensation Committee will
annually evaluate the personal performance of the Chief Executive Officer and
the other executive officers of the Company, as well as the Company's
performance. In setting the salary levels for compensation, the Compensation
Committee compares the total annual compensation and stock ownership of the
Chief Executive Officer and the other executive officers to the executive
compensation of executive officers of other publicly-held REITs. Personal
performance can include such qualitative factors as organizational and
management development exhibited
20
<PAGE> 22
from year to year. Generally the Compensation Committee will meet prior to the
beginning of each fiscal year to establish base salary and performance targets
for the upcoming year and will meet again at the beginning of each year to
review performance and approve incentive awards for the preceding fiscal year.
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits
the deductibility on the Company's tax return of compensation over $1 million to
any of the named executive officers of the Company unless, in general, the
compensation is paid pursuant to a plan which is performance-related,
non-discretionary and has been approved by the Company's stockholders. The
Compensation Committee's policy with respect to Section 162(m) is to make
reasonable efforts to ensure that compensation is deductible to the extent
permitted while simultaneously providing Company executives with appropriate
rewards for their performance.
The Compensation Committee believes that it has designed and
implemented a compensation structure which provides appropriate awards and
incentives for the Company's executive officers as they work to sustain and
improve the Company's overall performance.
Submitted by the Compensation Committee:
Robert J. Slater John L. Lesher
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Slater and Lesher.
Neither of them has served as an officer of the Company and Mr. Lesher has no
other business relationship or affiliation with the Company, except his service
as a director. From time to time, Mr. Slater provides consulting services to the
Company through his private consulting firm, Jackson Consulting, Inc.
21
<PAGE> 23
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company often obtains title insurance coverage for its properties
from Chicago Title Corporation ("CTC"). John Rau, a director of the Company,
became the President, Chief Executive Officer and a director of CTC in 1996.
Management of the Company believes the terms of the title insurance provided by
CTC to the Company and the premiums therefor are as favorable to the Company as
could be obtained from other title insurance companies.
The Company often engages in transactions for which CB Richard Ellis,
Inc. ("CB Richard Ellis") acts as a broker. The brother of Michael W. Brennan,
the President and Chief Executive Officer and a director of the Company, is an
employee of CB Richard Ellis and, in four such transactions in 1998 in which the
Company purchased or developed properties for an aggregate consideration or
project cost of approximately $139.8 million, received an aggregate of $130,115
as a portion of the brokerage commissions paid by the Company to CB Richard
Ellis in connection with such transactions. Management of the Company believes
the terms of brokerage services provided by CB Richard Ellis in such
transactions were as favorable to the Company as could be obtained in an arm's
length transaction.
From time to time, Robert J. Slater, a director of the Company,
provides consulting services to the Company through his private consulting firm,
Jackson Consulting, Inc. ("Jackson Consulting"). In 1998, the Company paid
Jackson Consulting approximately $36,000 in connection with Mr. Slater's
consulting services.
From time to time, the Company utilizes leasing services from Sealy and
Company, Inc. ("SCI") in which Scott P. Sealy, Sr., a former Senior Regional
Director of the Company, has a 62.5% ownership interest. In 1998, the Company
paid approximately $200,000 of leasing commissions to SCI. Management of the
Company believes the terms under which SCI provides leasing services are as
favorable to the Company as could be obtained in an arm's length transaction.
On January 30, 1998, First Industrial, L.P. acquired four industrial
properties located in the metropolitan Chicago area from Western Suburban
Industrial Investment Limited Partnership ("Western") for a total consideration
of approximately $7.9 million. The sole general partner of Western, having a 5%
interest, is Tomasz/Shidler Investment Corporation ("TSIC"), the sole
shareholders of which are Michael T. Tomasz, the former President and Chief
Executive Officer and a former director of the Company, and Jay H. Shidler,
Chairman of the Board of Directors of the Company. Messrs. Tomasz and Shidler
were also limited partners in Western having approximate interests of 32% and
53% respectively. Further, Michael W. Brennan was also a limited partner of
Western having an interest of 2%. As a result of this transaction, Mr. Shidler
was issued 1,886 Units (as defined below) of First Industrial, L.P., Mr. Tomasz
was issued 1,979 Units of First Industrial, L.P. and Mr. Brennan was issued 115
Units of First Industrial, L.P. The Units issued to Messrs. Shidler, Tomasz and
Brennan were valued at $36.72 per Unit at the time of the closing of the Western
transaction (having an aggregate value of $69,254, $72,669 and $4,229
respectively). Management of the Company believes the terms of this acquisition
were as favorable to the Company as could be obtained in an arm's length
transaction.
22
<PAGE> 24
On May 21, 1998, the Company acquired Thompson-Kirk Properties, Inc.
("TKP"), a real estate firm in which Donald C. Thompson, at the time one of the
Company's Senior Regional Directors, owned a 52.5% interest. Gross proceeds to
TKP totaled approximately $2.3 million. On July 16, 1998, the Company acquired
TK-SV, Ltd., a real estate partnership in which Mr. Thompson owned a 60.4%
interest, for approximately $3.2 million. Management of the Company believes the
terms of these acquisitions were as favorable to the Company as could be
obtained in an arm's length transaction.
On June 23, 1998, the Company purchased a 292,471 square foot light
industrial property located in Denver, Colorado for approximately $12.2 million.
The property was purchased from Pacifica Bryant Warehouse, LLC., in which
Timothy E. Gudim, one of the Company's Managing Directors, owned a 12.08%
interest. Management of the Company believes the terms of this acquisition were
as favorable to the Company as could be obtained in an arm's length transaction.
On November 19, 1998, the Company sold two industrial properties to two
limited partnerships, Roosevelt Glen Corporate Center ("Roosevelt") and Hartford
Center Investment Company ("Hartford"), for a total consideration of
approximately $8.3 million. TSIC has a 11.638% general partner interest and Mr.
Tomasz has a 75.585% limited partner interest in Roosevelt. TSIC has a 12.39%
general partner interest and Mr. Tomasz has a 80.454% limited partnership
interest in Hartford. On December 4, 1998, the Company sold one industrial
property to Eastgate Shopping Center Investment Co. ("Eastgate"), a limited
partnership, for a total consideration of approximately $2.4 million. TSIC has a
12.972% general partner interest and Mr. Tomasz has a 79.536% limited partner
interest in Eastgate. With respect to each transaction, the purchaser(s) has the
option to sell the property back to the Company and the Company has the option
to repurchase the property. Management of the Company believes the terms of
these transactions were as favorable to the Company as could be obtained in an
arm's length transaction.
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<PAGE> 25
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table presents information concerning the ownership of
Common Stock of the Company and limited partnership units ("Units") of First
Industrial, L.P. (which generally are exchangeable on a one-for-one basis,
subject to adjustments, for Common Stock) by all directors, the Named Executive
Officers, the directors and executive officers as a group and persons and
entities known to the Company to be beneficial owners of more than 5% of the
Company's Common Stock. The information is presented as of March 12, 1999,
unless otherwise indicated, and is based on representations of officers and
directors of the Company and filings received by the Company on Schedule 13G
under the Exchange Act.
<TABLE>
<CAPTION>
Common Stock/Units
Beneficially
Owned
-------------------------
Percent
Number of Class
-------- --------------
Names and Addresses of
5% Stockholders
---------------
<S> <C> <C>
Cohen & Steers Capital
Management, Inc.(1)
757 Third Avenue
New York, New York 10017............... 3,918,000 10.3%
Glickenhaus & Co.(2)
6 East 43rd Street
New York, New York 10017................ 2,796,500 7.4%
<CAPTION>
Names and Addresses of
Directors and Officers*
-----------------------
<S> <C> <C>
Jay H. Shidler(3)........................ 1,299,121 3.4%
Michael T. Tomasz(4)..................... 549,464 1.4%
John L. Lesher(5)........................ 43,068 **
Kevin W. Lynch(6)........................ 36,086 **
Michael G. Damone(7)..................... 229,996 **
John Rau(8).............................. 45,068 **
Robert J. Slater(9)...................... 29,173 **
</TABLE>
24
<PAGE> 26
<TABLE>
<CAPTION>
Common Stock/Units
Beneficially
Owned
-------------------------
Percent
Number of Class
-------- --------------
Names and Addresses of
5% Stockholders
---------------
<S> <C> <C>
J. Steven Wilson(10)..................... 43,634 **
Michael W. Brennan(11)................... 270,170 **
Michael J. Havala(12).................... 189,684 **
Gary H. Heigl(13)........................ 128,291 **
Johannson L. Yap(14)..................... 167,461 **
Anthony Muscatello(15)................... 209,007 **
All directors, Named Executive
Officers and other executive officers
as a group (16 persons)(16)............ 3,459,104 8.6%
</TABLE>
- --------------
* The business address for each of the Directors and executive officers
of the Company is 311 South Wacker Drive, Suite 4000, Chicago, Illinois
60606.
** Less than 1%
(1) Pursuant to a Schedule 13G dated February 9, 1999 filed by Cohen &
Steers Capital Management, Inc. ("CSCM"), CSCM has the sole power to
dispose of all 3,918,000 shares reported, but has the sole power to
vote only 3,337,100 of such shares.
(2) Pursuant to a Schedule 13G dated February 1, 1999 filed by Glickenhaus
& Co.. ("Glickenhaus"), Glickenhaus has the sole power to dispose of
all 2,796,500 shares reported, but has the sole power to vote only
2,318,900 of such shares.
(3) Includes 910,660 shares held by Shidler Equities, L.P., a Hawaii
limited partnership owned by Mr. Shidler and Wallette Shidler, 66,984
Units held by Mr. Shidler directly, 254,541 Units held by Shidler
Equities, L.P., 1,223 Units held by Mr. and Mrs. Shidler jointly, and
22,079 Units held by Holman/Shidler Investment Corporation. Also
includes 22,500 shares which may be acquired by Mr. Shidler upon the
exercise of vested options granted under the 1994 Stock Plan,
consisting of 15,000 at an exercise price of $23.50 per share and 7,500
shares at an exercise price of $18.25 per share. Also includes 10,000
shares which may be acquired upon the exercise of vested options
granted under the 1997 Stock Plan at an exercise price of $30.50 per
share and 10,000 shares which may be acquired upon the exercise of
options (which will vest in May 1999) granted under the 1997 Stock Plan
at an exercise price of $31.13 per share. Also includes 1,134 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(4) Includes 4,000 shares held by a trust for the benefit of Mr. Tomasz's
spouse and 6,200 shares held by a trust for the benefit of Mr. Tomasz's
daughters. A relative of Mr. Tomasz is the sole trustee of each of such
trusts. Includes 182,000 shares which may be acquired by Mr. Tomasz
upon the exercise of vested options granted under the 1994 Stock Plan,
consisting of 117,000 shares at an exercise price of $23.50 per share,
35,000 shares at an exercise price of $20.25 per share and 30,000
shares at an exercise price of $22.75 per share. Also includes 148,700
shares which may
25
<PAGE> 27
be acquired by Mr. Tomasz upon the exercise of vested options granted
under the 1997 Stock Plan, consisting of 60,000 shares at an exercise
price of $30.38 per share, 75,000 shares at an exercise price of $31.13
per share and 13,700 shares at an exercise price of $30.00. Also
includes 25,847 Units.
(5) Includes 22,500 shares which may be acquired by Mr. Lesher upon the
exercise of vested options granted under the 1994 Stock Plan,
consisting of 15,000 shares at an exercise price of $23.50 per share
and 7,500 shares at an exercise price of $18.25 per share. Also
includes 10,000 shares which may be acquired upon the exercise of
vested options granted under the 1997 Stock Plan at an exercise price
of $30.50 and 10,000 shares which may be acquired upon the exercise of
options (which will vest in May 1999) granted under the 1997 Stock Plan
at an exercise price of $31.13. Also includes 568 shares of restricted
Common Stock under the 1997 Stock Plan.
(6) Includes 15,000 shares which may be acquired by Mr. Lynch upon the
exercise of vested options granted under the 1994 Stock Plan at an
exercise price of $23.50 per share. Also includes 10,000 shares which
may be acquired upon the exercise of vested options granted under the
1997 Stock Plan at an exercise price of $30.50 and 10,000 shares which
may be acquired upon the exercise of options (which will vest in May
1999) granted under the 1997 Stock Plan at an exercise price of $31.13.
Also includes 568 shares of restricted Common Stock issued under the
1997 Stock Plan.
(7) Includes 3,000 shares held by a trust for the benefit of Mr. Damone's
wife. Also includes 37,500 shares which may be acquired by Mr. Damone
upon the exercise of vested options granted under the 1994 Stock Plan,
consisting of 30,000 shares at an exercise price of $23.50 per share
and 7,500 shares at an exercise price of $22.75 per share. Also
includes 10,000 shares which may be acquired upon the exercise of
vested options granted under the 1997 Stock Plan at an exercise price
of $30.38 and 10,000 shares which may be acquired upon the exercise of
options (5,000 of which have vested and 5,000 of which will vest in May
1999) granted under the 1997 Stock Plan at an exercise price of $31.13.
Also includes 144,296 Units. Also includes 2,000 shares of restricted
Common Stock issued under the 1997 Stock Plan.
(8) Includes 22,500 shares which may be acquired by Mr. Rau upon the
exercise of vested options granted under the 1994 Stock Plan,
consisting of 15,000 shares at an exercise price of $23.50 per share
and 7,500 shares at an exercise price of $18.25 per share. Also
includes 10,000 shares which may be acquired upon the exercise of
vested options granted under the 1997 Stock Plan at an exercise price
of $30.50 and 10,000 shares which may be acquired upon the exercise of
options (which will vest in May 1999) granted under the 1997 Stock Plan
at an exercise price of $31.13. Also includes 568 shares of restricted
Common Stock issued under the 1997 Stock Plan.
(9) Includes 10,000 shares which may be acquired by Mr. Slater upon the
exercise of vested options granted under the 1997 Stock Plan at an
exercise price of $30.50 per share and 10,000 shares which may be
acquired upon the exercise of options (which will vest in May 1999)
granted under the 1997 Stock Plan at an exercise price of $31.13. Also
includes 8,173 shares of restricted Common Stock issued under the 1997
Stock Plan.
(10) Includes 22,500 shares which may be acquired by Mr. Wilson upon the
exercise of vested options granted under the 1994 Stock Plan,
consisting of 15,000 shares at an exercise price of $23.50 per share
and 7,500 shares at an exercise price of $18.25 per share. Also
includes 10,000 shares which may be acquired upon the exercise of
vested options granted under the 1997 Stock Plan at an exercise price
of $30.50 and 10,000 shares which may be acquired upon the exercise of
options (which will vest in May 1999) granted under the 1997 Stock Plan
at an exercise price of $31.13. Also includes 1,134 shares of
restricted Common Stock issued under the 1997 Stock Plan.
(11) Includes 40,000 shares which may be acquired by Mr. Brennan upon the
exercise of options granted under the 1994 Stock Plan, consisting of
5,000 shares at an exercise price of $23.50 per share, 15,000 shares at
an exercise price of $20.25 per share and 20,000 shares at an exercise
price of $22.75 per share. Also includes 45,000 shares which may be
acquired by Mr. Brennan upon the exercise of vested options granted
under the 1997 Stock Plan at an exercise price of $30.38 per share.
Also includes 60,000 shares which may be acquired by Mr. Brennan upon
the exercise of options (30,000 of which have vested and 30,000 of
which will vest in May 1999) granted under the 1997 Stock Plan
26
<PAGE> 28
at an exercise price of $31.13 per share. Also includes 3,806 Units and
39,625 shares of restricted Common Stock issued under the 1997 Stock
Plan. Does not include 380 shares of Preferred Stock.
(12) Includes 1,251 shares held in custodial accounts for Mr. Havala's
children. Also includes 73,000 shares which may be acquired by Mr.
Havala upon the exercise of options granted under the 1994 Stock Plan,
consisting of 58,000 shares at an exercise price of $23.50 per share
and 15,000 shares at an exercise price of $20.25 per share. Also
includes 30,000 shares which may be acquired by Mr. Havala upon the
exercise of vested options granted under the 1997 Stock Plan at an
exercise price of $30.38 per share and 40,000 shares which may be
acquired by Mr. Havala upon the exercise of options (20,000 of which
have vested and 20,000 of which will vest in May 1999) granted under
the 1997 Stock Plan at an exercise price of $31.13 per share. Also
includes 26,150 shares of restricted Common Stock issued under the 1997
Stock Plan. Does not include 750 shares of Preferred Stock.
(13) Includes 12,000 shares which may be acquired by Mr. Heigl upon the
exercise of vested options granted under the 1994 Stock Plan at an
exercise price of $22.75 per share. Also includes 50,000 shares which
may be acquired upon the exercise of vested options granted under the
1997 Stock Plan, consisting of 30,000 shares at an exercise price of
$30.38 per share and 20,000 at an exercise price of $28.50 per share.
Also includes 40,000 shares which may be acquired by Mr. Heigl upon the
exercise of options (20,000 of which have vested and 20,000 of which
will vest in May 1999) granted under the 1997 Stock Plan at an exercise
price of $31.13 per share. Also includes 18,000 shares of restricted
Common Stock issued under the 1997 Stock Plan.
(14) Includes 1,390 shares held in a custodial account for the benefit of
Mr. Yap's children. Also includes 52,500 shares which may be acquired
by Mr. Yap upon the exercise of options granted under the 1994 Stock
Plan, consisting of 30,000 shares at an exercise price of $23.50 per
share, 10,000 shares at an exercise price of $20.25 per share and
12,500 shares at an exercise price of $22.75 per share. Also includes
30,000 shares which may be acquired by Mr. Yap upon the exercise of
options granted under the 1997 Stock Plan at an exercise price of
$30.38 and 40,000 shares which may be acquired by Mr. Yap upon the
exercise of options (20,000 of which have vested and 20,000 of which
will vest in May 1999) granted under the 1997 Stock Plan at an exercise
price of $31.13 per share. Also includes 1,680 Units. Also includes
18,551 shares of restricted Common Stock to be issued under the 1997
Stock Plan.
(15) Includes 60,000 shares which may be acquired by Mr. Muscatello upon the
exercise of options granted under the 1994 Stock Plan, consisting of
30,000 shares at an exercise price of $23.50 per share, 20,000 shares
at an exercise price of $20.25 per share and 10,000 shares at an
exercise price of $22.75 per share. Includes 20,000 shares which may be
acquired by Mr. Muscatello upon the exercise of vested options granted
under the 1997 Stock Plan at an exercise price of $30.38 and 32,000
shares which may be acquired by Mr. Muscatello upon the exercise of
options (16,000 of which have vested and 16,000 of which will vest in
May 1999) granted under the 1997 Stock Plan at an exercise price of
$31.13 per share. Also includes 81,654 Units. Also includes 11,000
shares of restricted Common Stock issued under the 1997 Stock Plan.
(16) Includes 572,000 shares in the aggregate which may be acquired by
directors or executive officers upon the exercise of options granted
under the 1994 Stock Plan, consisting of 345,000 shares at an exercise
price of $23.50 per share, 30,000 shares at an exercise price of $18.25
per share, 95,000 shares at an exercise price of $20.25 per share and
102,000 shares at an exercise price of $22.75 per share. Includes
767,700 shares in the aggregate which may be acquired by directors and
executive officers upon the exercise of options granted under the 1997
Stock Plan, consisting of 265,000 shares at an exercise price of
$30.38, 60,000 shares at an exercise price of $30.50, 20,000 shares at
an exercise price of $28.50, 409,000 shares at an exercise price of
$31.13 and 13,700 shares at an exercise price of $30.00. Also includes
698,749 Units. Also includes 145,071 shares of restricted Common Stock
issued under the 1997 Stock Plan. Does not include 1,130 shares of
Preferred Stock in the aggregate owned by certain executive officers
and directors of the Company.
27
<PAGE> 29
PROPOSAL II
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The accounting firm of PricewaterhouseCoopers LLP (or its predecessor,
Coopers & Lybrand L.L.P.) has served as the Company's independent auditors since
the Company's formation in August 1993. On March 5, 1999, the Board of Directors
voted to appoint PricewaterhouseCoopers LLP as the Company's independent
auditors for the current fiscal year. A representative of PricewaterhouseCoopers
LLP will be present at the Annual Meeting, will be given the opportunity to make
a statement if he or she so desires and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS
FOR FISCAL 1999.
OTHER MATTERS
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than December ___, 1999, in order to be considered for inclusion in the
proxy statement and on the proxy card that will be solicited by the Board of
Directors in connection with the 2000 Annual Meeting of Stockholders.
In addition, the Bylaws of the Company provide that in order for a
stockholder to nominate a candidate for election as a director at an annual
meeting or propose business for consideration at such annual meeting, notice
must generally be given to the Secretary of the Company not more than 180 days
nor less than 75 days prior to the first anniversary of the preceding year's
annual meeting. The fact that the Company may not insist upon compliance with
these requirements should not be construed as a waiver by the Company of its
right to do so at any time in the future.
28
<PAGE> 30
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, it is the intention of the
persons named as proxies in the accompanying Proxy Card to vote in their
discretion all shares represented by validly executed proxies.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO
THE COMPANY. PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY
CARD TODAY.
29
