<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration No. 333-71565
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus supplement is not complete and +
+may be changed. We may not sell these securities, nor may we accept offers to +
+buy them, without first delivering a final prospectus supplement and +
+accompanying prospectus. This preliminary prospectus supplement and +
+accompanying prospectus are not an offer to sell these securities and we are +
+not soliciting offers to buy these securities in any state where the offer or +
+sale of these securities is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Dated July 22, 1999
Prospectus Supplement
(To Prospectus dated April 20, 1999)
2,800,000 Shares
[Logo of Cabot Industrial]
Common Shares of Beneficial Interest
The selling shareholders identified in this prospectus supplement are offering
all of these shares and will receive all of the proceeds of this offering. None
of the shares are being offered by Cabot Industrial Trust.
The common shares are traded on the New York Stock Exchange under the symbol
"CTR." On July 21, 1999, the last reported sale price of the common shares was
$21.50 per share.
Investing in the common shares involves risks. See "Risk Factors" beginning on
page 3 of the accompanying prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proceeds to
Price to Underwriting the Selling
Public Discount Shareholders
- -------------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- -------------------------------------------------
Total $ $ $
- -------------------------------------------------
</TABLE>
The selling shareholders have agreed to grant the underwriter the right to
purchase up to an additional 420,000 common shares to cover over-allotments.
It is expected that delivery of the shares will be made to investors on or
about , 1999.
J.P. Morgan & Co.
, 1999
<PAGE>
You should rely only on the information provided or incorporated by reference
in this prospectus supplement and the accompanying prospectus. We have not
authorized anyone to give you any different information. This prospectus
supplement and the accompanying prospectus do not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the shares
described in this prospectus supplement or an offer to sell or a solicitation
of an offer to buy the shares in any jurisdiction in which an offer or
solicitation would be unlawful.
TABLE OF CONTENTS
Page
Prospectus Supplement
<TABLE>
<S> <C>
Summary.................................................................... S-3
Information about Cabot Trust.............................................. S-7
Price Range of Common Shares and Dividend Policy........................... S-12
Capitalization............................................................. S-13
Selected Financial and Other Data.......................................... S-14
Property Information....................................................... S-16
Management................................................................. S-27
Selling Shareholders....................................................... S-30
Underwriting............................................................... S-31
Legal Matters.............................................................. S-32
</TABLE>
Prospectus
<TABLE>
<S> <C>
Risk Factors................................................................ 3
Where You Can Find More Information......................................... 10
Forward Looking Statements.................................................. 11
Cabot Industrial Trust...................................................... 12
Use of Proceeds............................................................. 13
Selling Shareholders........................................................ 13
Plan of Distribution........................................................ 16
Description of Common Shares................................................ 16
Federal Income Tax Consequences............................................. 21
Legal Matters............................................................... 31
Experts..................................................................... 31
</TABLE>
Forward-Looking Statements
Some of the information included or incorporated by reference in this
prospectus supplement and in the accompanying prospectus contains forward-
looking statements, such as those pertaining to our future results of
operations, market conditions and prospects. You can identify forward-looking
statements by their use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," "seeks," "intends," "plans," "pro forma,"
"estimates" or "anticipates" or the negative of these words and phrases or
similar words or phrases. Discussions of strategy, plans or intentions also
include forward-looking statements.
Forward-looking statements inherently involve risks and uncertainties and you
should not rely on them as predictions of future events. The factors described
under the heading "Risk Factors" in the accompanying prospectus, as well as
changes in the industrial real estate market and the general economy, could
cause future events and actual results to differ materially from those set
forth or contemplated in the forward-looking statements.
S-2
<PAGE>
SUMMARY
Except as otherwise indicated, all references in this prospectus supplement to
"Cabot Trust," "we," "us," "our" and similar references mean Cabot Industrial
Trust and its subsidiaries, including Cabot L.P. All references herein to
"Cabot L.P." mean Cabot Industrial Properties, L.P. and its subsidiaries.
Cabot Industrial Trust
We began operations upon the completion of our initial public offering in
February 1998. Substantially all of our assets, including our portfolio of
industrial properties, are held or controlled by Cabot L.P., and we conduct
substantially all of our operations through Cabot L.P. We owned a 93.1%
partnership interest in Cabot L.P. as of June 30, 1999.
We are an internally managed real estate company that acquires, leases, manages
and holds for investment a diversified portfolio of bulk distribution,
multitenant distribution and workspace properties. Using local builders, we
also selectively develop new industrial properties in markets where we believe
that property development will produce higher returns than acquiring existing
properties. As of March 31, 1999, we owned 242 properties that had
approximately 30 million rentable square feet, approximately 97.3% of which was
leased to 473 tenants at that date.
We have a significant market presence across the United States, owning
properties in a total of 21 markets, with more than one million rentable square
feet in ten of those markets. In addition to having a geographically diverse
portfolio, we have a tenant base that is diversified across industries and no
single tenant accounted for more than 3.5% of our annualized base rent as of
March 31, 1999. We believe that we have expanded successfully and have achieved
superior tenant relations due to our properties' favorable locations and our
management expertise.
Our primary external growth strategy is to acquire and build modern, high-
quality industrial properties in attractive submarkets within the markets that
we currently serve. Our primary internal growth strategy is to increase the
cash flow generated by our properties by renewing or replacing expiring leases
with new leases at higher rental rates and through rent increase provisions in
our leases.
We use our $325.0 million unsecured revolving credit acquisition facility to
acquire and develop properties and for working capital needs. As of June 30,
1999, we had outstanding $4.0 million of borrowings under our acquisition
facility, $159.1 million of mortgage indebtedness and $200.0 million aggregate
principal amount of 7.125% Redeemable Notes due 2004.
Members of our senior management team have worked together since 1987 and have
an average of approximately 19 years of experience in the real estate industry.
Descriptions of our business and growth strategies and our development program,
as well as our financing activities, can be found on pages S-7 through S-11 of
this prospectus supplement. Additional important information about our business
and our common shares is contained in the accompanying prospectus.
S-3
<PAGE>
Organization
The following diagram depicts our ownership structure as of June 30, 1999 in
summary form.
[FLOW CHART APPEARS HERE]
Limited Partners Common Shareholders
6.9%
limited
partnership
interest Cabot Industrial Trust
93.1%
general
partnership
interest
Preferred Unitholders
Cabot Industrial Properties, L.P.
Industrial Properties and
Other Assets
S-4
<PAGE>
Properties
The following table provides information regarding the properties we owned as
of March 31, 1999, organized by property type.
<TABLE>
<CAPTION>
Rentable Square
Feet Annualized Net Rent(1)
---------------- -------------------------------
Number of % of % of Per Leased
Property Type by Region Properties Amount Total Amount Total Square Foot
----------------------- ---------- ---------- ----- ------------ ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Bulk Distribution
Properties:
West.................... 19 4,000,394 13.3% $ 12,723,292 11.1% $3.40
Southwest............... 4 1,326,200 4.4 4,156,599 3.6 3.13
Midwest................. 18 4,256,937 14.2 12,514,149 10.9 2.99
Southeast............... 5 1,355,266 4.5 4,515,121 3.9 3.33
Northeast............... 10 2,478,262 8.3 9,539,828 8.3 3.85
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average............... 56 13,417,059 44.7% $ 43,448,989 37.8% $3.32
----- ---------- ----- ------------ ----- -----
Multitenant Distribution
Properties:
West.................... 18 2,598,763 8.7% $ 9,368,503 8.1% $3.65
Southwest............... 6 674,830 2.3 2,432,482 2.1 3.60
Midwest................. 17 2,625,147 8.7 9,947,454 8.7 3.96
Southeast............... 11 1,899,234 6.3 5,596,734 4.9 3.27
Northeast............... 15 2,467,517 8.2 9,843,057 8.6 3.99
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average............... 67 10,265,491 34.2% $ 37,188,230 32.4% $3.74
----- ---------- ----- ------------ ----- -----
Workspace Properties:
West.................... 41 1,869,634 6.2% $ 10,317,520 9.0% $5.63
Southwest............... 3 312,267 1.0 2,264,606 2.0 7.25
Midwest................. 40 1,831,555 6.1 9,244,859 8.1 5.27
Southeast............... 16 1,116,471 3.8 4,980,057 4.3 4.53
Northeast............... 19 1,222,586 4.0 7,355,138 6.4 6.16
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average............... 119 6,352,513 21.1% $ 34,162,180 29.8% $5.52
----- ---------- ----- ------------ ----- -----
Total/weighted average.. 242 30,035,063 100.0% $114,799,399 100.0% $3.93
===== ========== ===== ============ ===== =====
Properties by Region:
West.................... 78 8,468,791 28.2% $ 32,409,315 28.2% $3.98
Southwest............... 13 2,313,297 7.7 8,853,687 7.7 3.83
Midwest................. 75 8,713,639 29.0 31,706,462 27.7 3.75
Southeast............... 32 4,370,971 14.6 15,091,912 13.1 3.62
Northeast............... 44 6,168,365 20.5 26,738,023 23.3 4.35
----- ---------- ----- ------------ ----- -----
Total/weighted average.. 242 30,035,063 100.0% $114,799,399 100.0% $3.93
===== ========== ===== ============ ===== =====
</TABLE>
- --------
(1) "Annualized net rent" means annualized monthly net rent from leases in
effect as of March 31, 1999. "Net rent" means contractual rent, excluding
any reimbursements for real estate taxes or operating expenses.
S-5
<PAGE>
The Offering
<TABLE>
<S> <C>
Common Shares Offered by the
Selling Shareholders............ 2,800,000 shares
Over-Allotment Option from the
Selling Shareholders............ 420,000 shares
Common Shares Outstanding as of
June 30, 1999................... 40,619,420 shares
Use of Proceeds.................. We will not receive any of the net proceeds from this
offering.
New York Stock Exchange Symbol... "CTR"
</TABLE>
- --------
Common Shares Outstanding as of June 30, 1999 excludes 4,363,356 common shares
reserved for issuance under our employee long-term incentive plan, of which
options for 3,275,615 shares were outstanding as of June 30, 1999. Also
excludes 3,014,139 common shares issuable upon conversion of outstanding
limited partnership units in Cabot L.P.
S-6
<PAGE>
INFORMATION ABOUT CABOT TRUST
General
Our goal is to be the preeminent national real estate company focused on
serving a variety of industrial space users. We own and operate bulk
distribution, multitenant distribution and workspace properties. As of March
31, 1999, our portfolio consisted of 242 properties, which aggregated
approximately 30 million rentable square feet and included:
.56 bulk distribution properties aggregating 13,417,059 rentable square
feet;
.67 multitenant distribution properties aggregating 10,265,491 rentable
square feet; and
.119 workspace properties aggregating 6,352,513 rentable square feet.
As of March 31, 1999, our properties were approximately 97.3% leased to 473
tenants. We believe that we have achieved high occupancy and tenant retention
rates due to our properties' favorable locations and our management expertise.
We have a significant market presence across the United States, owning
properties in a total of 21 markets, 18 of which we have identified as
principal targeted markets. We own properties with more than one million
rentable square feet in ten of those markets. No single market accounted for
more than 11.6% of our total rentable square feet as of March 31, 1999. Our
tenant base is also diversified across industries, and no single tenant
accounted for more than 3.5% of our annualized base rent as of that same date.
In addition to acquiring existing industrial properties, we selectively develop
new industrial properties in submarkets of our existing markets where we
believe that development will produce higher returns than acquiring existing
properties. To limit overhead expenses associated with our development program,
we currently use local builders with whom we have established strong
relationships to provide construction services and to assist in the lease-up of
the newly constructed properties.
The seven individuals who comprise our senior management have an average of
approximately 19 years of experience in the real estate industry. Members of
senior management have worked together since 1987, as executive officers of
Cabot Partners Limited Partnership prior to the formation of Cabot Trust and,
previously, as executive officers of Cabot, Cabot & Forbes Realty Advisors,
Inc. Cabot, Cabot & Forbes Realty Advisors, Inc. was an affiliate of Cabot,
Cabot & Forbes, a nationwide real estate development, investment, construction
and management firm that pioneered the development of large-scale planned
industrial parks.
We are a Maryland real estate investment trust formed in October 1997. Our
principal executive offices are located at Two Center Plaza, Suite 200, Boston,
Massachusetts 02108, and our telephone number is (617) 723-0900.
Business Strategies
Our fundamental business objective is to maximize the total return to our
investors through growth in our cash available for distribution and in the
value of our portfolio of industrial properties and operations. We believe that
we are well positioned to take advantage of the opportunities presented by
today's changing industrial real estate markets through the business strategies
and operations described below.
S-7
<PAGE>
Leveraging Our Substantial National Market Presence
We believe that maintaining and expanding our market presence in our 18
principal targeted markets across the country will be an important factor in
achieving future growth and our targeted returns on investment.
Our substantial presence in our principal markets provides significant
strategic advantages. In addition to the quality and attractive locations of
our properties, foremost among these advantages is that we are well positioned
to market our industrial space to national companies that have space
requirements in multiple markets. We have a national tenant marketing program
that emphasizes the advantages of dealing with a single source for a company's
industrial space needs. These advantages include greater efficiency of lease
negotiations and day-to-day property management, as well as better
understanding of the tenants' current needs and prospective space requirements.
We serve 31 tenants that use more than one of our properties. These tenants
accounted for approximately 24% of our annualized base rents as of March 31,
1999. Thirteen of those tenants lease properties in multiple markets.
We believe that having a substantial inventory of properties and significant
leasing activities within each local market increases our visibility to
prospective tenants and enables us to establish strong relationships with
leasing brokers and other local market participants. These brokers and market
participants serve as sources of information and potential tenant referrals. In
addition, larger inventories of properties increase our opportunities to
relocate tenants to one or more of our other properties as their needs change.
A larger scale of operations in a local market also increases our economic
efficiency by enabling us to better support the costs of our on-site property
management personnel needed to build long-term tenant relationships in that
market and achieve economies of scale.
Serving a Variety of Tenants by Offering a Broad Spectrum of Industrial
Property Types
We also believe that our strategy of offering a broad spectrum of industrial
property types provides complementary benefits in meeting our growth
objectives. Offering a broad spectrum of property types enables us to provide
better service, on a more cost-efficient basis, to national customers who may
need various types of workspace properties, in addition to distribution space,
for their local operations. At the same time, offering a variety of property
types suitable for smaller companies enables us to capture a larger share of
the growth in our chosen industrial property markets. This strategy of offering
diverse property types also enables us to pursue opportunities as they arise
across our tenant mix by responding to shifts in demand at different stages of
the economic cycle.
Growth Strategies
We intend to achieve our growth objectives through a combination of industrial
property acquisitions, internal growth and industrial property development.
Acquisitions
Our principal growth strategy is to acquire additional modern, high-quality
properties in attractive submarkets within the industrial markets that we
currently serve. The focus of our acquisition activity is primarily on
acquiring individual properties and small collections of properties rather than
on large portfolios of properties. We believe this acquisition strategy enables
us to be highly selective as to building quality and projected long-term yields
of the properties we acquire.
S-8
<PAGE>
Following the completion of our initial public offering we acquired 84
properties during the remainder of 1998 in 41 separate transactions for an
aggregate purchase price of $426.2 million. These properties contain
approximately 9.6 million rentable square feet, of which 43.3% is bulk
distribution, 29.6% is multitenant distribution and 27.1% is workspace
property. Through June 30, 1999, we had acquired 60 additional industrial
properties containing 3,807,000 rentable square feet, of which 12.4% is bulk
distribution, 45.6% is multitenant distribution and 42.0% is workspace
property. As of June 30, 1999, we had also contracted to acquire twelve
additional industrial properties containing approximately 1,464,000 rentable
square feet. One property containing approximately 120,000 square feet was sold
on June 22, 1999 and one property containing approximately 225,000 square feet
is under agreement to be sold as of June 30, 1999.
Emphasis on Market Research. We follow a disciplined, value-oriented strategy
in our property acquisitions. We seek to acquire modern, cost-efficient
buildings located in key national and regional distribution centers. Our
property acquisitions are based on extensive research in each targeted market
regarding:
.current yields;
.economic and demographic trends;
.property replacement and operating costs;
.rent levels, historical occupancy rates and trends;
.construction quality and property conditions;
.the physical characteristics of other buildings within the market;
.access to transportation, proximity to housing and local crime rates;
.location in modern industrial parks;
.the supply of and demand for industrial space in targeted submarkets; and
.existing and potential tenant space requirements.
Our research includes extensive in-market activity by our employees, including
physical site inspections and continuing contacts with leasing brokers and
other active participants in the local markets. We have compiled the results of
our extensive research and that of Cabot Partners Limited Partnership over the
years into a proprietary database, which we update periodically and which
covers many markets and submarkets in which we have significant investments or
that we have targeted. This database contains computerized profiles, keyed to
aerial maps that we have prepared of our properties and each of the buildings
deemed most competitive to our properties or attractive for acquisition. These
profiles include such information as the building's age, current tenant and
lease information and the building's physical characteristics, including
overall dimensions, clear heights and truck court dimensions.
Diversification of Industrial Property Types. Approximately 70.2% of our
properties, based on annualized net rents at March 31, 1999, are bulk
distribution and multitenant distribution facilities. We have historically
focused on these types of properties because of the opportunities for superior
returns they have provided. While we expect that both types of properties will
continue to be an important focus of our future acquisition program, we believe
that workspace properties are also attractive in selected markets where they
are in limited supply and strong demand exists. We have increased our
acquisitions of workspace properties, which represented approximately 29.8% of
our properties, based on annualized net rents at March 31, 1999.
S-9
<PAGE>
Relationships with Institutional Real Estate Investors. The operations of our
sponsor and organizer, Cabot Partners, were focused on serving public and
private pension funds and other institutional real estate investors in
connection with investments in and management of industrial real estate. This
has provided our management with an extensive knowledge of and, we believe, a
favorable reputation with these investors. We expect to benefit from our
relationships with them through further acquisitions as they increasingly seek
to securitize their direct real estate investments.
Capital and UPREIT Structure. As of June 30, 1999, we had outstanding $159.1
million of fixed-rate debt secured by specified properties, $4.0 million of
variable-rate unsecured borrowings and $200.0 million aggregate principal
amount of 7.125% Redeemable Notes due 2004. Our consolidated debt-to-total
market capitalization ratio as of that date was approximately 27%. Also as of
June 30, 1999, we had unencumbered properties totaling approximately 26 million
rentable square feet and representing approximately 81% of our total portfolio
on a square footage basis.
We currently intend to maintain a ratio of debt-to-total market capitalization
of 40% or less. Although there is no limit in our organizational documents on
the amount of indebtedness that we may incur, the indenture under which the
7.125% Redeemable Notes due 2004 were issued contains financial and operating
covenants that limit our ability to incur additional secured and unsecured
indebtedness.
We intend to exploit our relatively unleveraged capital structure and
substantial equity base in our acquisition and development activities. In
addition, our UPREIT structure, which enables us to acquire industrial
properties on a non-cash basis by exchanging our limited partnership interests
in Cabot L.P. for properties in a tax-deferred manner, provides an attractive
alternative to a taxable cash sale for tax-paying property owners.
Increase Cash Flow Generated by Existing Properties
Our primary internal growth strategy is to increase the cash flow generated by
our existing properties, and from properties that we acquire in the future, by
renewing or replacing expiring leases with new leases at higher rental rates
and through rent increase provisions in our leases. In addition, we work
actively to:
. maintain our historically high occupancy levels by retaining existing
tenants, thereby minimizing "down time" and re-leasing costs;
. improve the occupancy levels of any newly acquired properties that have
lower occupancy levels than we typically expect from our existing
properties; and
. capitalize on economies of scale arising from the size of our portfolio
of properties and control costs.
Development
Our senior management has extensive real estate development experience,
including experience derived from the industrial park development activities of
Cabot, Cabot and Forbes. We believe that in select target markets there are
attractive opportunities for new development with potentially greater returns
than those available from the purchase of existing stabilized properties, and
we are pursuing a development program where those opportunities exist. We are
also engaging in discussions with our existing tenants about their future space
needs. Based on those discussions, we believe that financially attractive
build-to-suit opportunities from our tenant base may be available over time.
S-10
<PAGE>
To limit overhead expenses associated with our development program, we
currently use local builders with whom we have established strong relationships
to provide construction services and to assist in the lease-up of the newly
constructed properties. However, we may expand our in-house development staff
as our development activities increase.
Through June 30, 1999, we had engaged in thirteen development projects with
total projected development costs of approximately $105 million and
approximately 2.2 million square feet of projected rentable space. These
projects are located in nine different sub-markets of our existing markets and
involve construction of each of our three principal property types, but with a
particular weighting toward development of multitenant and workspace properties
with mid-sized tenant spaces of 4,000 to 50,000 square feet. These types of
properties have provided the strongest rental increases and face the least
competition from other developers.
We currently are in active negotiations regarding two additional projects with
projected development costs of approximately $44 million and approximately
876,000 square feet of projected rentable space.
Financing Activities
We established a $325.0 million unsecured revolving acquisition facility with a
syndicate of banks led by Morgan Guaranty Trust Company of New York in March
1998. We use the acquisition facility to acquire and develop properties and for
working capital needs. The interest at a variable rate equal to LIBOR plus 100
basis points. As of June 30, 1999, we had $4.0 million of borrowings
outstanding under the facility. The acquisition facility matures in March 2001.
We borrowed $87.6 million in February 1999 and borrowed an additional $5.6
million under the same agreement in April 1999, all secured by specified
properties. This secured indebtedness has an interest rate of 7.25% and is to
be repaid using a 25-year amortization schedule, with a balloon payment equal
to the then outstanding balance due on March 1, 2009. The proceeds of this
borrowing were used to repay a portion of the balance outstanding under our
acquisition facility. As of June 30, 1999, we had a total of $159.1 million of
fixed rate mortgage indebtedness and had unencumbered properties totaling
approximately 26 million rentable square feet, or approximately 81% of our
total rentable square feet.
Cabot L.P. completed a private placement of $65 million of 8.625% Series B
Cumulative Redeemable Perpetual Preferred Units at $50 per unit on April 29,
1999. The net proceeds of this placement were used to reduce outstanding
borrowings under our acquisition facility.
Cabot L.P. completed a public offering of $200 million aggregate principal
amount of 7.125% Redeemable Notes due 2004 on May 4, 1999. The net proceeds of
the offering were used to reduce outstanding balances under our acquisition
facility and for general corporate purposes.
S-11
<PAGE>
PRICE RANGE OF COMMON SHARES AND DIVIDEND POLICY
Our common shares began trading on the New York Stock Exchange ("NYSE") on
January 30, 1998, under the symbol "CTR." The following table sets forth the
high and low sales prices per share as reported on the New York Stock Exchange
Composite Tape and the dividends paid on the common shares for the periods
indicated.
<TABLE>
<CAPTION>
1998: High Low Dividends
- ----- ------ ------ ---------
<S> <C> <C> <C>
First Quarter (from January 30, 1998)................... $23.81 $20.88 $.202
Second Quarter.......................................... 25.13 19.81 .325
Third Quarter........................................... 22.19 17.56 .325
Fourth Quarter.......................................... 22.00 16.88 .325
<CAPTION>
1999:
- -----
<S> <C> <C> <C>
First Quarter........................................... 20.44 17.88 .340
Second Quarter.......................................... 22.00 18.25 .340
Third Quarter (through July 21, 1999)................... 23.00 20.50 --
</TABLE>
The amounts available for dividends to our shareholders are affected by a
number of factors, including the revenues received from our properties, our
operating expenses, interest expense on our borrowings and our capital
expenditures. Future dividends will be at the discretion of the board of
trustees and will depend on our actual FFO, our financial condition and capital
requirements, the annual income distribution requirements under the REIT
provisions of the Code and such other factors as our board of trustees deems
relevant. In 1998, 100% of dividends to shareholders were taxable as ordinary
income.
S-12
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of March 31, 1999 on a
historical basis and as adjusted to give effect to Cabot L.P.'s note offering
and preferred unit placement and the application of a portion of the net
proceeds thereof to repay borrowings under our acquisition facility.
<TABLE>
<CAPTION>
As of March 31, 1999
----------------------
As
Historical Adjusted
---------- ----------
(dollars in
thousands)
<S> <C> <C>
Debt:
Mortgage indebtedness................................ $ 149,784 $ 149,784
Borrowings under acquisition facility................ 211,000 --
7.125% Redeemable Notes due 2004..................... -- 200,000
---------- ----------
Total debt......................................... $ 360,784 $ 349,784
---------- ----------
Minority interest:
Limited partnership units............................ $ 58,349 $ 58,349
8.625% Series B Cumulative Redeemable Perpetual
Preferred Units..................................... -- 63,175
---------- ----------
Total minority interest............................ $ 58,349 $ 121,524
---------- ----------
Shareholders' equity:
Common shares, $0.01 par value, 150,000,000 shares
authorized; 40,518,271 shares issued and outstanding
at March 31, 1999................................... $ 405 $ 405
Paid in capital...................................... 761,168 761,168
Retained deficit..................................... (2,703) (2,703)
---------- ----------
Total shareholders' equity......................... $ 758,870 $ 758,870
---------- ----------
Total capitalization............................... $1,178,003 $1,230,178
========== ==========
</TABLE>
S-13
<PAGE>
SELECTED FINANCIAL AND OTHER DATA
The following table sets forth selected financial and other data on a
consolidated basis. The selected operating, balance sheet and cash flow data
as of December 31, 1998 and for the period then ended have been derived from
financial statements audited by Arthur Andersen LLP, independent auditors.
Since we were formed in October 1997 and did not begin operations until
February 4, 1998, the results for the year ended December 31, 1998 represent
activity for 331 days (approximately 11 months) and no comparisons with prior
periods are available.
Data as of March 31, 1999 and 1998 and for the three months then ended have
not been audited but, in the opinion of management, include all adjustments
(consisting solely of normal recurring adjustments) necessary to present
fairly such information in accordance with generally accepted accounting
principles applied on a consistent basis. The results of operations for the
three months ended March 31, 1999 are not necessarily indicative of results to
be expected for the entire year.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------- Year Ended
1999 1998(1) December 31, 1998
Operating Data ---------- --------- -----------------
(in thousands, except per share data) (unaudited)
<S> <C> <C> <C>
Total revenues....................... $ 34,138 $ 14,733 $ 102,425
Property taxes....................... 3,845 1,642 11,843
Property operating expenses.......... 2,680 1,042 6,579
General and administrative expenses.. 2,185 1,068 6,815
Depreciation and amortization........ 6,810 3,174 20,913
Interest expense..................... 4,315 155 7,009
Settlement of treasury lock.......... 2,492 -- --
Net income........................... 7,691 3,478 50,958
Basic and diluted earnings per
share............................... 0.28 0.19 1.17
Basic weighted average shares out-
standing............................ 27,873 18,587 18,587
Diluted weighted average shares out-
standing............................ 27,873 18,587 18,587
<CAPTION>
Year Ended
March 31, December 31, 1998
--------------------- -----------------
1999 1998
Balance Sheet Data ---------- ---------
(in thousands) (unaudited)
<S> <C> <C> <C>
Rental property, before accumulated
depreciation........................ $1,150,535 $ 840,041 $1,072,675
Total assets......................... 1,225,089 856,224 1,110,570
Mortgage debt........................ 149,784 13,445 48,206
Line of credit borrowings............ 211,000 -- 200,000
Total liabilities.................... 407,870 32,045 293,272
Minority interest.................... 58,349 471,430 468,311
Shareholders' equity................. 758,870 352,749 348,987
<CAPTION>
Three Months Ended
March 31,
--------------------- Year Ended
1999 1998(1) December 31, 1998
Other Data ---------- --------- -----------------
(in thousands, except number of
properties and percentages) (unaudited)
<S> <C> <C> <C>
Funds from operations(2)............. $ 21,300 $ 11,300 $ 71,269
Cash flows provided by operating ac-
tivities............................ 20,834 16,005 78,726
Cash flows used in investing activi-
ties................................ (71,970) (178,561) (398,795)
Cash flows provided by financing ac-
tivities............................ 83,393 163,868 322,369
Total rentable square feet of proper-
ties at end of period............... 30,035 22,913 28,033
Number of properties at end of peri-
od.................................. 242 152 206
Percentage leased at end of period... 97.3% 96.9% 97.4%
</TABLE>
(footnotes on following page)
S-14
<PAGE>
(continued from previous page)
(1) Period from February 4, 1998 (commencement of operations) through March 31,
1998.
(2) Funds from operations, or FFO, represents net income before minority
interest and extraordinary items, adjusted for depreciation of real property
and amortization of tenant improvements costs, lease commissions and gains from
the sale of properties. In addition to cash flow and net income, management
generally considers FFO to be a measure of the performance of an equity REIT
because, together with net income and cash flows, FFO provides investors with
an additional basis to evaluate the ability of a REIT to incur and service debt
and to fund acquisitions and other capital expenditures. However, FFO does not
measure whether cash flow is sufficient to fund all of an entity's cash needs,
including principal amortization, capital improvements and distributions to
shareholders. FFO also does not represent cash generated from operating,
investing or financing activities as determined in accordance with generally
accepted accounting principles. It should not be considered as an alternative
to net income as an indicator of a REIT's operating performance or to cash
flows as a measure of liquidity. Further, we calculate FFO in accordance with
the White Paper on Funds from Operations approved by the Board of Governors of
the National Association of Real Estate Investment Trusts, Inc. in March 1995.
FFO as disclosed by other REITs may not be comparable to our calculation.
S-15
<PAGE>
PROPERTY INFORMATION
For descriptive purposes, our properties may generally be grouped into three
broad categories: bulk distribution properties, multitenant distribution
properties and workspace properties.
Bulk distribution properties are oriented primarily to large national and
regional distribution tenants. These properties generally have at least 100,000
square feet of rentable space, building depths of at least 240 feet and clear
heights of 24 feet or more. They also generally have truck courts exceeding 100
feet in depth to accommodate larger modern trucks, a ratio of loading docks to
rentable space of one or more per 10,000 square feet and a location with good
access to interstate highways.
Multitenant distribution properties are oriented primarily to smaller regional
and local distribution tenants and are generally designed to be subdivided to
suit tenants whose space requirements generally range from 10,000 square feet
to 100,000 square feet. These properties generally have clear heights of 20
feet or more, building depths of less than 240 feet unless configured with
loading docks on two sides and a location with good access to regional and
interstate highways.
Both bulk distribution and multitenant distribution properties are used
predominately for the storage and distribution of goods.
Workspace properties are designed to serve a variety of industrial tenants with
workspace-related requirements, including light manufacturing and assembly,
research, testing, re-packaging and sorting, back office, sales office and
office/warehouse functions. Workspace tenants include smaller companies and
local units of national or large regional companies whose space requirements
generally range from 3,000 square feet to 70,000 square feet. Workspace
properties generally have clear heights of 14 to 24 feet, attractive building
exteriors, office finish of up to 30% or more, parking ratios of one to four
spaces per 1,000 rentable square feet and locations with good access to
executive residential areas and local highways, labor supply and dining and
shopping amenities.
Our properties are typically leased on a triple net basis, meaning that our
tenants pay their share, based generally on square footage leased, of real
estate taxes and operating costs. If we are responsible for paying a stated
amount of real estate taxes and operating costs and tenants are responsible for
any and all increases in real estate taxes and operating costs above that
stated amount, we lease those properties at a higher gross rent. Excluding
lease renewal options, the lease terms for our properties typically range from
three to five years or, for leases that are renewed, a shorter period of
generally two to three years. At March 31, 1999, approximately 42% of our
leases, based on annualized net rent, contain a provision providing for an
automatic "stepped rent" increase of a specified amount or percentage at a
specified point or points during the remaining term of the lease.
S-16
<PAGE>
Tenant Information
The following table lists our ten largest tenants, as measured by annualized
base rent as of
March 31, 1999.
<TABLE>
<CAPTION>
Weighted
Average
Months
Total Remaining
Leased Annualized Percent of After
Square Base Annualized March 31,
Tenants(1) Feet(1) Rent(1)(2)Base Rent(1) 1999(1)
---------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
GATX Logistics, Inc........................................ 1,296,872 $ 4,108,552 3.5% 30.3
Exel Logistics, Inc. (Merchants Home Delivery)............. 1,064,648 3,766,695 3.2 51.6
Advance Transformer Co., a division of Philips North
America Corporation....................................... 480,258 2,618,591 2.2 28.0
Wal-Mart................................................... 400,310 1,633,264 1.4 15.0
B. Dalton Bookseller (guaranteed by Barnes & Noble, Inc.).. 400,000 1,606,548 1.4 53.0
Port Jersey Distribution Services.......................... 465,857 1,579,500 1.3 32.2
Goodtimes Home Video Corp.................................. 358,564 1,370,837 1.1 36.6
GTE Communications Corp.................................... 96,517 1,278,850 1.1 103.0
Enesco Corporation......................................... 234,000 1,088,100 0.9 2.0
General Services Administration............................ 187,976 1,083,358 0.9 27.8
--------- ----------- ---- -----
Total/Weighted average months remaining.................... 4,985,002 $20,134,295 17.0% 35.8
========= =========== ==== =====
</TABLE>
- --------
(1) Includes aggregations of affiliated entities based on available
information.
(2) Annualized base rent means contractual rent stated on an annualized basis.
S-17
<PAGE>
Lease Expirations
The following table summarizes the lease expirations at our properties for
leases in place as of March 31, 1999, assuming that none of our tenants
exercise renewal options or termination rights, if any, at or prior to the
scheduled expirations. The table does not include approximately 822,567
rentable square feet that were not leased as of that date.
<TABLE>
<CAPTION>
Number of Annualized Percent of
Leases Annualized Base Rent Annualized
Expiring Expiring Leases Base Rent of of Expiring Base Rent of
Year of --------- ---------------------- Expiring Leases per Expiring
Lease Expiration Square Feet % of Total Leases(1) Square Foot(1) Leases(1)
- ------------------------ ----------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
1999.................... 76 3,725,851 12.8% $ 14,374,176 $3.86 12.1%
2000.................... 108 3,858,801 13.2 16,535,177 4.29 14.0
2001.................... 105 4,924,309 16.9 19,359,025 3.93 16.4
2002.................... 85 5,078,032 17.4 20,161,277 3.97 17.0
2003.................... 68 4,440,961 15.2 17,784,129 4.00 15.0
2004.................... 39 2,257,243 7.7 8,673,776 3.84 7.3
2005.................... 14 1,006,126 3.4 4,439,124 4.41 3.7
2006.................... 6 706,344 2.4 2,907,137 4.12 2.5
2007.................... 9 1,111,439 3.8 5,106,352 4.59 4.3
2008 and beyond......... 22 2,103,390 7.2 9,044,628 4.30 7.7
--- ---------- ----- ------------ ----- -----
Total/Average annualized
base rent.............. 532 29,212,496 100.0% $118,384,801 $4.05 100.0%
=== ========== ===== ============ ===== =====
</TABLE>
(1) Based on currently payable contractual rent.
Properties by Type and Location
The following tables provide detailed information regarding the properties we
owned as of March 31, 1999, organized by property type and location.
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- ------ ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Bulk Distribution
Properties:
West Region
Los Angeles Market
South Vintage Avenue,
Building 1, Ontario,
CA 1986 1 272,448 100% $ 723,389 0.6% $ 2.66
South Vintage Avenue,
Building 2, Ontario,
CA 1986 1 248,064 87 719,703 0.6 3.32
South Rockefeller
Avenue, Ontario, CA 1986 1 164,140 100 551,510 0.5 3.36
East Jurupa Street,
Ontario, CA 1986 1 142,404 100 461,388 0.4 3.24
DeForest Circle, Mira
Loma, CA 1992 1 250,584 100 871,841 0.8 3.48
Vintage Avenue,
Ontario, CA 1988 1 284,559 100 973,200 0.8 3.42
San Fernando Road, Sun
Valley, CA 1980 1 181,670 100 1,015,536 0.9 5.61
Rowland Street, City of
Industry, CA 1998 1 181,635 30 245,991 0.2 4.46
Santa Anita Avenue,
Rancho Cucamonga, CA 1988 1 212,300 100 792,864 0.7 3.73
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 9 1,937,804 92% $ 6,355,422 5.5% $ 3.57
</TABLE>
S-18
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- -------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- ------ ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix Market
North 47th Avenue,
Phoenix, AZ 1986 1 163,200 100% $ 453,867 0.4% $ 2.78
South 63rd Avenue,
Phoenix, AZ 1990 1 168,165 100 450,494 0.4 2.68
South 55th Avenue,
Phoenix, AZ 1986 1 100,000 0 0 0.0 0.00
South 41st Avenue,
Building 2, Phoenix,
AZ 1985 1 223,740 100 678,172 0.6 3.03
South 49th Avenue,
Phoenix, AZ 1989 1 114,871 100 330,828 0.3 2.88
North 104th Avenue,
Tolleson, AZ 1995 1 279,279 100 805,169 0.7 2.88
West Van Buren,
Tolleson, AZ 1997 1 278,142 100 868,470 0.8 3.12
South 84th Avenue,
Tolleson, AZ 1989 1 236,007 100 802,488 0.7 3.40
North 103rd Street,
Phoenix, AZ 1999 1 279,186 100 942,524 0.8 3.38
--- --------- --- ----------- ---- ------
Market
subtotal/weighted
average 9 1,842,590 95% $ 5,332,012 4.7% $ 3.06
San Diego Market
Dornoch Court, San
Diego, CA 1988 1 220,000 100% $ 1,035,858 0.9% $ 4.71
--- --------- --- ----------- ---- ------
West Region
subtotal/weighted
average 19 4,000,394 94% $12,723,292 11.1% $ 3.40
Southwest Region
Dallas Market
Luna Road, Carrollton,
TX 1997 1 205,400 100% $ 679,992 0.6% $ 3.31
DFW Trade Center,
Building 1,
Grapevine, TX 1996 1 540,000 100 1,705,803 1.5 3.16
DFW Trade Center,
Building 2,
Grapevine, TX 1997 1 440,000 100 1,278,000 1.1 2.90
Airline Drive,
Building 2, Coppell,
TX 1990 1 140,800 100 492,804 0.4 3.50
--- --------- --- ----------- ---- ------
Southwest
Region/Market
subtotal/weighted
average 4 1,326,200 100% $ 4,156,599 3.6% $ 3.13
Midwest Region
Chicago Market
West 73rd Street,
Building 1, Bedford
Park, IL 1982 1 233,282 100% $ 735,279 0.6% $ 3.15
West 73rd Street,
Building 2, Bedford
Park, IL 1986 1 380,269 100 1,034,331 0.9 2.72
West 73rd Street,
Building 3, Bedford
Park, IL 1979 1 232,000 100 727,667 0.6 3.14
Remington Street,
Bolingbrook, IL 1996 1 212,333 100 796,925 0.7 3.75
Harvester Drive,
Chicago, IL 1974 1 212,922 100 628,119 0.6 2.95
Arthur Avenue, Elk
Grove, IL 1978 1 230,768 100 699,228 0.6 3.03
North Raddant Road,
Batavia, IL 1991 1 170,462 100 711,954 0.6 4.18
Ambassador Road,
Naperville, IL 1996 1 203,500 65 503,366 0.4 3.80
Mark Street, Wood
Dale, IL 1985 1 234,000 100 833,392 0.7 3.56
--- --------- --- ----------- ---- ------
Market
subtotal/weighted
average 9 2,109,536 97% $ 6,670,261 5.7% $ 3.27
Cincinnati/Northern
Kentucky Market
Holton Drive,
Independence, KY 1996 1 352,000 100% $ 991,951 0.9% $ 2.82
International Way,
Hebron, KY 1990 1 192,000 100 556,800 0.5 2.90
Kingsley Drive,
Building 1,
Cincinnati, OH 1981 1 154,004 100 429,999 0.4 2.79
Kingsley Drive,
Building 2,
Cincinnati, OH 1981 1 249,402 100 710,000 0.6 2.85
International Road,
Building 1,
Cincinnati, OH 1990 1 192,000 100 528,000 0.5 2.75
International Road,
Building 2,
Cincinnati, OH 1990 1 204,800 100 721,520 0.6 3.52
--- --------- --- ----------- ---- ------
Market
subtotal/weighted
average 6 1,344,206 100% $ 3,938,270 3.5% $ 2.93
Columbus Market
Westbelt Drive,
Building 2, Columbus
OH 1980 1 229,200 100% $ 640,552 0.6% $ 2.79
Equity Drive, Building
1, Columbus, OH 1980 1 227,480 100 516,594 0.4 2.27
--- --------- --- ----------- ---- ------
Market
subtotal/weighted
average 2 456,680 100% $ 1,157,146 1.0% $ 2.53
Other Market
North State Road #9,
Howe, IN 1988 1 346,515 100% $ 748,472 0.7% $ 2.16
--- --------- --- ----------- ---- ------
Midwest Region
subtotal/weighted
average 18 4,256,937 98% $12,514,149 10.9% $ 2.99
</TABLE>
S-19
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
----------------- -------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ------ ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Southeast Region
Atlanta Market
Highway 316, Dacula, GA 1989 1 326,019 100% $ 1,057,413 0.9% $ 3.24
Westgate Parkway, Fulton County, GA 1988 1 231,835 100 695,505 0.6 3.00
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 2 557,854 100% $ 1,752,918 1.5% $ 3.14
Memphis Market
Pilot Drive, Memphis, TN 1987 1 336,080 100% $ 795,326 0.7% $ 2.37
--- ---------- --- ----------- ---- ------
Orlando Market
Landstreet Road, Building 1, Orlando FL 1997 1 355,732 100% $ 1,639,782 1.4% $ 4.61
--- ---------- --- ----------- ---- ------
Charlotte Market
Reames Road, Charlotte, NC 1994 1 105,600 100% $ 327,095 0.3% $ 3.10
--- ---------- --- ----------- ---- ------
Southeast Region subtotal/weighted average 5 1,355,266 100% $ 4,515,121 3.9% $ 3.33
Northeast Region
Baltimore/Washington Market
Tar Bay Drive, Jessup, MD 1990 1 210,000 100% $ 800,527 0.7% $ 3.81
Oceano Avenue, Jessup, MD 1987 1 243,500 100 998,349 0.9 4.10
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 2 453,500 100% $ 1,798,876 1.6% $ 3.97
Harrisburg Market
Brackbill Boulevard, Building 1,
Mechanicsburg, PA 1984 1 259,200 100% $ 913,069 0.8% $ 3.52
Brackbill Boulevard, Building 2,
Mechanicsburg, PA 1994 1 235,200 100 828,432 0.7 3.52
Cumberland Parkway, Mechanicsburg, PA 1992 1 340,000 100 1,144,967 1.0 3.37
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 3 834,400 100% $ 2,886,468 2.5% $ 3.46
New York/New Jersey Market
Pepes Farm Road, Milford, CT 1980 1 200,000 100% $ 829,998 0.7% $ 4.15
South Middlesex Avenue, Building 1, Cranbury, NJ 1989 1 204,369 100 735,728 0.6 3.60
Birch Creek Road, Bridgeport, NJ 1991/1997 1 203,229 100 792,463 0.7 3.90
Pierce Street, Franklin Township, NJ 1984 1 182,764 100 776,748 0.7 4.25
Herrod Boulevard, South Brunswick, NJ 1989 1 400,000 100 1,719,547 1.5 4.30
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 5 1,190,362 100% $ 4,854,484 4.2% $ 4.08
Northeast Region subtotal/weighted average 10 2,478,262 100% $ 9,539,828 8.3% $ 3.85
--- ---------- --- ----------- ---- ------
Bulk Distribution Properties Total 56 13,417,059 98% $43,448,989 37.8% $ 3.32
</TABLE>
S-20
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- ------ ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Multitenant Distribution
Properties:
West Region
Los Angeles Market
West Rincon Street,
Corona, CA 1986 1 162,900 100% $ 729,600 0.6% $ 4.48
Jersey Court, Rancho
Cucamonga, CA 1989 1 88,134 100 291,000 0.3 3.30
12th Street, Chino, CA 1990 1 104,600 100 402,000 0.3 3.84
East Dyer Road, Santa
Ana, CA 1954/1965 1 372,096 100 1,480,660 1.3 3.98
Industry Circle, La
Mirada, CA 1966 1 112,946 100 474,373 0.4 4.20
East Santa Ana Street,
Building 1, Ontario,
CA 1989 1 98,782 100 355,615 0.3 3.60
East Santa Ana Street,
Building 2, Ontario,
CA 1990 1 62,398 100 224,632 0.2 3.60
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 7 1,001,856 100% $ 3,957,880 3.4% $ 3.95
Phoenix Market
South 40th Avenue,
Building 1, Phoenix,
AZ 1990 1 126,360 100% $ 338,093 0.3% $ 2.68
South 40th Avenue,
Building 2, Phoenix,
AZ 1989 1 127,042 100 384,872 0.3 3.03
South 40th Avenue,
Building 3, Phoenix,
AZ 1987 1 201,600 100 622,944 0.5 3.09
South 41st Avenue,
Building 1, Phoenix,
AZ 1989 1 161,230 100 440,157 0.4 2.73
South 39th Avenue,
Phoenix, AZ 1989 1 159,450 100 658,368 0.6 4.13
South 53rd Avenue,
Phoenix, AZ 1987 1 127,680 100 340,905 0.3 2.67
South 9th Street,
Phoenix, AZ 1983 1 89,423 100 436,218 0.4 4.88
44th Avenue and
Roosevelt, Phoenix, AZ 1997 1 144,592 78 337,333 0.3 3.00
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 8 1,137,377 97% $ 3,558,890 3.1% $ 3.22
Seattle Market
Kent West Corporate
Park II, Kent, WA 1989 1 250,820 100% $ 966,492 0.8% $ 3.85
--- --------- --- ----------- --- ------
San Francisco Market
Reed Avenue, Building
1, West Sacramento, CA 1988 1 103,110 100% $ 461,905 0.4% $ 4.48
Reed Avenue, Building
2, West Sacramento, CA 1988 1 105,600 100 423,336 0.4 4.01
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 2 208,710 100% $ 885,241 0.8% $ 4.24
--- --------- --- ----------- --- ------
West Region
subtotal/weighted
average 18 2,598,763 99% $ 9,368,503 8.1% $ 3.65
Southwest Region
Dallas Market
10th Street, Building 1
Plano, TX 1997 1 99,679 100% $ 439,824 0.4% $ 4.41
10th Street, Building 2
Plano, TX 1997 1 107,260 100 423,086 0.4 3.94
North Lake Drive,
Coppell, TX 1982 1 230,400 100 690,343 0.6 3.00
Airline Drive, Building
1, Coppell, TX 1991 1 75,000 100 262,500 0.2 3.50
113th Street,
Arlington, TX 1979 1 79,735 100 291,032 0.2 3.65
Diplomat Drive, Farmers
Branch, TX 1984 1 82,756 100 325,697 0.3 3.94
--- --------- --- ----------- --- ------
Southwest Region/Market
subtotal/weighted
average 6 674,830 100% $ 2,432,482 2.1% $ 3.60
Midwest Region
Chicago Market
Medinah Road, Building
1, Chicago, IL 1986 1 319,459 100% $ 1,741,840 1.5% $ 5.45
Medinah Road, Building
2, Chicago, IL 1986 1 160,799 100 876,751 0.8 5.45
Swenson Avenue, St.
Charles, IL 1988 1 81,110 100 322,237 0.3 3.97
High Grove Lane,
Naperville, IL 1994 1 95,000 100 392,549 0.3 4.13
Western Avenue, Lisle,
IL 1979/1985 1 67,996 100 383,143 0.3 5.63
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 5 724,364 100% $ 3,716,520 3.2% $ 5.13
Cincinnati/Northern
Kentucky Market
Lake Forest Drive,
Building 1, Blue Ash,
OH 1978 1 239,891 100% $ 660,192 0.6% $ 2.75
Lake Forest Drive,
Building 2, Blue Ash,
OH 1979 1 176,956 94 442,559 0.4 2.65
--- --------- --- ----------- --- ------
Market subtotal/weighted
average 2 416,847 98% $ 1,102,751 1.0% $ 2.71
</TABLE>
S-21
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ------ ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Columbus Market
International Street, Columbus, OH 1988 1 152,800 100% $ 435,479 0.4% $ 2.85
Port Road, Building 1, Franklin County, OH 1995 1 205,109 100 677,903 0.6 3.31
Port Road, Building 2, Franklin County, OH 1995 1 156,000 100 425,899 0.4 2.73
Westbelt Drive, Building 1, Columbus, OH 1980 1 202,000 100 1,010,000 0.9 5.00
Dividend Drive, Columbus, OH 1979 1 144,850 100 443,241 0.4 3.06
Twin Creek Drive, Columbus, OH 1989 1 176,000 76 386,256 0.3 2.87
--- --------- --- ----------- --- ------
Market subtotal/weighted average 6 1,036,759 96% $ 3,378,778 3.0% $ 3.40
Minneapolis Market
Woodale Drive, Building 1, Mounds View MN 1992 1 78,016 33% $ 142,692 0.1% $ 5.57
Trenton Lane, Plymouth, MN 1994 1 122,032 100 617,482 0.6 5.06
Lexington Avenue, Eagan, MN 1979 1 184,429 96 616,274 0.5 3.49
--- --------- --- ----------- --- ------
Market subtotal/weighted average 3 384,477 84% $ 1,376,448 1.2% $ 4.24
Other Market
Sysco Court, Grand Rapids, MI 1985 1 62,700 100% $ 372,957 0.3% $ 5.95
--- --------- --- ----------- --- ------
Midwest Region subtotal/weighted average 17 2,625,147 96% $ 9,947,454 8.7% $ 3.96
Southeast Region
Orlando Market
Orlando Central Park, Building 1, Orlando, FL 1988 1 267,432 100% $ 889,343 0.8% $ 3.33
Orlando Central Park, Building 2, Orlando, FL 1983 1 156,660 100 493,476 0.4 3.15
Orlando Central Park, Building 3, Orlando, FL 1991 1 356,583 90 1,416,090 1.2 4.41
Orlando Central Park, Building 4, Orlando, FL 1984 1 133,400 81 386,766 0.4 3.59
Orlando Central Park, Building 5, Orlando, FL 1985 1 139,800 100 493,962 0.4 3.53
Orlando Central Park, Building 6, Orlando, FL 1986 1 119,000 79 339,467 0.3 3.61
Exchange Drive, Orlando, FL 1979 1 115,728 69 232,237 0.2 2.91
Kingspointe Parkway, Orlando, FL 1991 1 101,870 33 120,060 0.1 3.55
--- --------- --- ----------- --- ------
Market subtotal/weighted average 8 1,390,473 86% $ 4,371,401 3.8% $ 3.64
Atlanta Market
Atlanta Industrial Drive, Atlanta, GA 1986 1 161,965 100% $ 417,522 0.4% $ 2.58
Westpark Drive, Building 1, Fulton County, GA 1981 1 216,074 100 539,189 0.5 2.50
Westpark Drive, Building 2, Fulton County, GA 1981 1 130,722 100 268,622 0.2 2.05
--- --------- --- ----------- --- ------
Market subtotal/weighted average 3 508,761 100% $ 1,225,333 1.1% $ 2.41
--- --------- --- ----------- --- ------
Southeast Region subtotal/weighted average 11 1,899,234 90% $ 5,596,734 4.9% $ 3.27
Northeast Region
Boston Market
First Avenue, Needham, MA(2) 1961/1992 1 119,573 100% $ 699,680 0.6% $ 5.85
--- --------- --- ----------- --- ------
Baltimore/Washington Market
Port Capital Drive, Jessup, MD 1974 1 94,381 100% $ 460,962 0.4% $ 4.88
Greenwood Place, Savage, MD 1985 1 77,424 100 295,871 0.3 3.82
Bollman Place, Savage, MD 1985 1 104,409 100 498,485 0.4 4.77
Stayton Drive, Jessup, MD 1985 1 125,800 100 514,650 0.5 4.09
--- --------- --- ----------- --- ------
Market subtotal/weighted average 4 402,014 100% $ 1,769,968 1.6% $ 4.40
</TABLE>
S-22
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
----------------- -------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ---------- ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
New York/New Jersey Market
Colony Road, Building 1, Jersey City, NJ 1974 1 124,933 100% $ 499,731 0.4% $ 4.00
Colony Road, Building 2, Jersey City, NJ 1976 1 262,453 100 918,438 0.8 3.50
Pulaski Boulevard, Port Jersey, NJ(3) 1974 1 224,664 100 703,139 0.6 3.13
Port Jersey Boulevard, Building 1, Port Jersey, NJ 1974/1982 1 425,121 100 1,740,013 1.5 4.09
Port Jersey Boulevard, Building 2, Port Jersey, NJ 1974/1982 1 204,564 100 802,841 0.7 3.92
Industrial Drive, Building 1, Port Jersey, NJ 1976 1 263,717 100 1,002,124 0.9 3.80
Industrial Drive, Building 2, Port Jersey, NJ 1976 1 154,000 100 615,996 0.5 4.00
Industrial Drive, Building 3, Port Jersey, NJ 1972 1 45,274 100 181,095 0.2 4.00
South Middlesex Avenue, Building 2, Cranbury, NJ 1982 1 203,404 100 661,062 0.6 3.25
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 9 1,908,130 100% $ 7,124,439 6.2% $ 3.73
Harrisburg Market
Ritter Road, Mechanicsburg, PA 1986 1 37,800 100% $ 248,970 0.2% $ 6.59
--- ---------- --- ----------- ---- ------
Northeast Region subtotal/weighted average 15 2,467,517 100% $ 9,843,057 8.6% $ 3.99
--- ---------- --- ----------- ---- ------
Multitenant Distribution Properties Total 67 10,265,491 97% $37,188,230 32.4% $ 3.74
Workspace Properties:
West Region
Los Angeles Market
East Howell Avenue, Building 1, Anaheim CA 1968 1 81,475 100% $ 327,882 0.3% $ 4.02
East Howell Avenue, Building 2, Anaheim CA 1991 1 25,962 100 109,040 0.1 4.20
Royal Avenue, Simi Valley, CA 1988 1 26,120 100 157,442 0.1 6.03
Union Place, Building 1, Simi Valley, CA 1985 1 22,710 100 145,768 0.1 6.42
Union Place, Building 2, Simi Valley, CA 1987 1 36,538 100 324,360 0.3 8.88
Anza Drive, Building 1, Valencia, CA 1990 1 10,296 100 65,121 0.1 6.32
Anza Drive, Building 2, Valencia, CA 1990 1 7,944 100 57,192 0.0 7.20
Anza Drive, Building 3, Valencia, CA 1990 1 8,663 100 62,400 0.1 7.20
Kovacs Lane, Huntington Beach, CA 1988 1 125,000 100 1,000,800 0.9 8.01
Artesia Avenue, Building 1, Fullerton, CA 1991 1 55,498 100 227,949 0.2 4.11
Artesia Avenue, Building 2, Fullerton, CA 1991 1 60,502 100 283,149 0.2 4.68
Commonwealth Avenue, Fullerton, CA 1965 1 64,292 100 250,047 0.2 3.89
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 12 525,000 100% $ 3,011,150 2.6% $ 5.74
Phoenix Market
South Priest Drive, Tempe, AZ 1998 1 54,900 100% $ 394,200 0.4% $ 7.18
East Encanto Drive, Tempe, AZ 1990 1 81,817 100 329,950 0.3 4.03
West Alameda Drive, Building 1, Tempe, AZ 1984 1 30,606 67 93,041 0.1 4.56
West Alameda Drive, Building 2, Tempe, AZ 1984 1 30,606 100 133,176 0.1 4.35
West Alameda Drive, Building 3, Tempe, AZ 1984 1 30,606 100 149,346 0.1 4.88
West Alameda Drive, Building 4, Tempe, AZ 1984 1 30,606 100 134,669 0.1 4.40
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 6 259,141 96% $ 1,234,382 1.1% $ 4.96
San Diego Market
Airway Road, Building 1, Otay Mesa, CA 1996 1 44,840 46% $ 137,015 0.1% $ 6.71
Airway Road, Building 2, Otay Mesa, CA 1996 1 78,296 100 449,738 0.4 5.74
Avenida Encinas, Building 1, Carlsbad, CA 1972 1 80,000 100 663,229 0.6 8.29
Avenida Encinas, Building 2, Carlsbad, CA 1993 1 126,008 100 716,846 0.6 5.69
--- ---------- --- ----------- ---- ------
Market subtotal/weighted average 4 329,144 93% $ 1,966,828 1.7% $ 6.45
</TABLE>
S-23
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- --------- ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Seattle Market
Kent West Corporate Park I, Building 1, Kent, WA 1989 1 41,700 100% $ 501,984 0.4% $12.04
Kent West Corporate Park I, Building 2, Kent, WA 1989 1 16,000 86 95,712 0.1 6.96
Kent West Corporate Park I, Building 3, Kent, WA 1989 1 36,250 100 137,064 0.1 3.78
Kent West Corporate Park I, Building 4, Kent, WA 1989 1 57,990 100 225,108 0.2 3.88
--- --------- --- ----------- --- ------
Market subtotal/weighted average 4 151,940 99% $ 959,868 0.8% $ 6.41
San Francisco Market
Brisbane Industrial Park, Building 1, Brisbane,
CA 1961 1 39,800 100% $ 220,293 0.2% $ 5.54
Brisbane Industrial Park, Building 2, Brisbane,
CA 1960 1 21,186 100 139,743 0.1 6.60
Brisbane Industrial Park, Building 3, Brisbane,
CA 1969 1 23,586 100 173,861 0.2 7.37
Brisbane Industrial Park, Building 4, Brisbane,
CA 1968 1 40,680 100 246,340 0.2 6.06
Brisbane Industrial Park, Building 5, Brisbane,
CA 1966 1 37,040 100 214,612 0.2 5.79
Brisbane Industrial Park, Building 6, Brisbane,
CA 1963 1 31,745 100 211,982 0.2 6.68
Brisbane Industrial Park, Building 7, Brisbane,
CA 1967 1 32,211 100 208,728 0.2 6.48
Brisbane Industrial Park, Building 8, Brisbane,
CA 1961 1 18,600 100 130,046 0.1 6.99
Brisbane Industrial Park, Building 9, Brisbane,
CA 1966 1 43,500 100 222,419 0.2 5.11
Brisbane Industrial Park, Building 10, Brisbane,
CA 1961 1 116,400 100 89,773 0.1 0.77
Brisbane Industrial Park, Building 11, Brisbane,
CA 1968 1 35,744 100 220,897 0.2 6.18
Brisbane Industrial Park, Building 12, Brisbane,
CA 1968 1 24,786 100 138,949 0.1 5.61
Brisbane Industrial Park, Building 13, Brisbane,
CA 1962 1 58,000 100 348,000 0.3 6.00
Brisbane Industrial Park, Building 14, Brisbane,
CA 1969 1 19,100 100 102,204 0.1 5.35
Huntwood Avenue, Hayward, CA 1982 1 62,031 100 477,445 0.4 7.70
--- --------- --- ----------- --- ------
Market subtotal/weighted average 15 604,409 100% $ 3,145,292 2.8% $ 5.20
--- --------- --- ----------- --- ------
West Region subtotal/weighted average 41 1,869,634 98% $10,317,520 9.0% $ 5.63
Southwest Region
Dallas Market
DFW Trade Center Building 2, Grapevine, TX 1997 1 202,361 100% $ 1,723,670 1.5% $ 8.52
Diplomat Drive, Building 1, Farmers Branch, TX 1997 1 53,375 100 325,044 0.3 6.09
Bradley Lane,Carrollton, TX 1984 1 56,531 100 215,892 0.2 3.82
--- --------- --- ----------- --- ------
Southwest Region/Market subtotal/weighted average 3 312,267 100% $ 2,264,606 2.0% $ 7.25
Southeast Region
Atlanta Market
Cobb International Place, Building 1, Atlanta,
GA 1996 1 60,000 100% $ 260,820 0.2% $ 4.35
Cobb International Place, Building 2, Atlanta,
GA 1996 1 68,000 100 238,452 0.2 3.51
Town Park Drive, Building 1, Kennesaw, GA 1995 1 65,830 100 322,396 0.3 4.90
Town Park Drive, Building 2, Kennesaw, GA 1995 1 55,554 100 250,632 0.2 4.51
South Royal Drive, Building 1, Tucker, GA 1987 1 53,402 91 232,327 0.2 4.79
South Royal Drive, Building 2, Tucker, GA 1987 1 43,720 100 180,333 0.2 4.12
South Royal Drive, Building 3, Tucker, GA 1989 1 37,041 100 150,286 0.1 4.06
--- --------- --- ----------- --- ------
Market subtotal/weighted average 7 383,547 99% $ 1,635,246 1.4% $ 4.32
Charlotte Market
Airport Road, Monroe, NC 1972 1 118,930 100% $ 591,600 0.5% $ 4.97
US Highway 74 and Old Charlotte Monroe, NC 1957 1 135,000 100 394,400 0.4 2.92
--- --------- --- ----------- --- ------
Market subtotal/weighted average 2 253,930 100% $ 986,000 0.9% $ 3.88
</TABLE>
S-24
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- --------- ------ ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Orlando Market
Boggy Creek Road, Building 1, Orlando, FL 1992 1 52,500 99% $ 267,496 0.2% $ 5.14
Boggy Creek Road, Building 2, Orlando, FL 1996 1 55,456 100 311,543 0.3 5.62
Boggy Creek Road, Building 3, Orlando, FL 1998 1 55,456 81 273,847 0.2 6.13
Boggy Creek Road, Building 4, Orlando, FL 1999 1 50,108 100 250,539 0.2 5.00
Landstreet Road, Building 2, Orlando, FL 1997 1 55,456 100 317,797 0.3 5.73
Landstreet Road, Building 3, Orlando, FL 1996 1 50,018 100 247,589 0.2 4.95
--- --------- --- ----------- --- ------
Market subtotal/weighted average 6 318,994 96% $ 1,668,811 1.4% $ 5.42
Other Markets
Industrial Drive South, Gluckstadt, MS 1988 1 160,000 100% $ 690,000 0.6% $ 4.31
--- --------- --- ----------- --- ------
Southeast Region subtotal/weighted average 16 1,116,471 99% $ 4,980,057 4.3% $ 4.53
Northeast Region
Baltimore/Washington Market
The Crysen Center, Building 1, Jessup, MD 1985 1 75,820 100% $ 371,887 0.3% $ 4.90
The Crysen Center, Building 2, Jessup, MD 1985 1 76,043 93 336,427 0.3 4.74
West Nursery Road, Building 1, Linthicum MD 1989 1 49,100 100 343,700 0.3 7.00
West Nursery Road, Building 2, Linthicum MD 1989 1 39,041 100 380,720 0.3 9.75
Fontana Lane, Building 1, Baltimore, MD 1988 1 47,434 100 252,650 0.2 5.33
Fontana Lane, Building 2, Baltimore, MD 1988 1 61,320 84 364,084 0.3 7.04
Bristol Court, Jessup, MD 1988 1 73,071 91 348,267 0.3 5.24
Guilford Road, Annapolis Junction, MD 1989 1 96,686 100 579,608 0.5 5.99
Nokes Boulevard, Sterling, VA 1998 1 88,489 100 726,576 0.6 8.21
Oakville Industrial Park, Building 1, Alexandria, VA 1949 1 67,225 92 350,940 0.3 5.70
Oakville Industrial Park, Building 2, Alexandria, VA 1940 1 23,683 100 120,425 0.1 5.08
Oakville Industrial Park, Building 3, Alexandria, VA 1947 1 76,089 100 533,433 0.5 7.01
Oakville Industrial Park, Building 4, Alexandria, VA 1952 1 2,800 100 18,624 0.0 6.65
Oakville Industrial Park, Building 5, Alexandria, VA 1955 1 56,134 98 237,748 0.2 4.31
Oakville Industrial Park, Building 6, Alexandria, VA 1946 1 50,876 100 527,691 0.5 10.37
--- --------- --- ----------- --- ------
Market subtotal/weighted average 15 883,811 97% $ 5,492,780 4.7% $ 6.42
Boston Market
Technology Drive, Auburn, MA 1973 1 54,400 100% $ 194,448 0.2% $ 3.57
John Hancock Road, Taunton, MA 1986 1 34,224 100 206,147 0.2 6.02
--- --------- --- ----------- --- ------
Market subtotal/weighted average 2 88,624 100% $ 400,595 0.4% $ 4.52
New York/New Jersey Market
New England Avenue, Piscataway, NJ 1975/1995 1 101,553 100% $ 404,861 0.4% $ 3.99
Memorial Drive, Franklin Township, NJ 1988 1 148,598 100 1,056,902 0.9 7.11
--- --------- --- ----------- --- ------
Market subtotal/weighted average 2 250,151 100% $ 1,461,763 1.3% $ 5.84
--- --------- --- ----------- --- ------
Northeast Region subtotal/weighted average 19 1,222,586 98% $ 7,355,138 6.4% $ 6.16
Midwest Region
Chicago Market
Feehanville Drive, Mount Prospect, IL 1987 1 57,150 100% $ 454,342 0.4% $ 7.95
Business Center, Building 1, Mount Prospect, IL 1985 1 43,250 100 356,380 0.3 8.24
Business Center, Building 2, Mount Prospect, IL 1989 1 79,900 67 508,672 0.4 9.54
Tower Lane, Bensenville, IL 1977 1 76,737 100 452,520 0.4 5.90
--- --------- --- ----------- --- ------
Market subtotal/weighted average 4 257,037 90% $ 1,771,914 1.5% $ 7.69
</TABLE>
S-25
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(1)
----------------- --------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ---------- ------ ------------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Cincinnati/Northern Kentucky Market
Building J, Airport Exchange, Erlanger, KY 1997 1 67,749 100% $ 462,373 0.4% $6.82
Spiral Drive, Building 1, Florence, KY 1988 1 26,556 100 240,309 0.2 9.05
Spiral Drive, Building 2, Florence, KY 1989 1 34,999 100 294,803 0.3 8.42
Empire Drive, Florence, KY 1991 1 101,250 100 318,999 0.3 3.15
Kentucky Drive, Building 2, Florence, KY 1991 1 128,077 100 367,515 0.3 2.87
Foundation Drive, Building 1, Elsmere, KY 1983 1 33,000 100 102,630 0.1 3.11
Foundation Drive, Building 2, Elsmere, KY 1983 1 62,560 100 310,592 0.3 4.96
Foundation Drive, Building 3, Elsmere, KY 1990 1 7,000 100 90,000 0.1 12.86
Foundation Drive, Building 4, Elsmere, KY 1983 1 12,000 100 51,744 0.0 4.31
Foundation Drive, Building 5, Elsmere, KY 1983 1 12,000 100 47,400 0.1 3.95
Foundation Drive, Building 6, Elsmere, KY 1984 1 17,500 100 59,675 0.1 3.41
Foundation Drive, Building 7, Elsmere, KY 1984 1 12,000 100 43,098 0.0 3.59
Foundation Drive, Building 8, Elsmere, KY 1984 1 10,000 100 66,000 0.1 6.60
Power Line Drive, Elsmere, KY 1994 1 6,000 100 34,088 0.0 5.68
Turfway Road, Building 1, Erlanger, KY 1990 1 30,711 100 150,778 0.1 4.91
Turfway Road, Building 2, Erlanger, KY 1990 1 39,396 100 179,324 0.2 4.55
Turfway Road, Building 3, Erlanger, KY 1996 1 41,839 100 150,300 0.1 3.59
Jamike Drive, Building 1, Erlanger, KY 1986 1 15,000 100 60,499 0.1 4.03
Jamike Drive, Building 2, Erlanger, KY 1986 1 26,949 100 126,528 0.1 4.70
Jamike Drive, Building 3, Erlanger, KY 1986 1 38,900 64 111,589 0.1 4.50
Jamike Drive, Building 4, Erlanger, KY 1988 1 42,606 89 141,244 0.1 3.74
Jamike Drive, Building 5, Erlanger, KY 1985 1 24,640 100 116,503 0.1 4.73
Jamike Drive, Building 6, Erlanger, KY 1985 1 26,560 100 104,832 0.1 3.95
Jamike Drive, Building 7, Erlanger, KY 1985 1 31,540 55 42,567 0.0 2.44
Empire Drive, Building A, Florence, KY 1990 1 47,840 100 161,548 0.1 3.38
Empire Drive, Building B, Florence, KY 1990 1 47,842 100 201,214 0.2 4.21
Commerce Boulevard, Loveland, OH 1989 1 34,600 100 171,000 0.1 4.94
Creek Road, Blue Ash, OH 1983 1 66,095 95 469,390 0.4 7.49
--- ---------- --- ------------ ----- -----
Market subtotal/weighted average 28 1,045,209 97% $ 4,676,542 4.1% $4.64
Columbus Market
Equity Drive, Columbus, OH 1980 1 116,160 87% $ 581,108 0.5% $5.76
Alum Creek Road, Columbus, OH 1988 1 34,600 100 175,076 0.2 5.06
--- ---------- --- ------------ ----- -----
Market subtotal/weighted average 2 150,760 90% $ 756,184 0.7% $5.58
Minneapolis Market
Woodale Drive, Building 2, Mounds View, MN 1989 1 55,742 100% $ 470,356 0.4% $8.44
Woodale Drive, Building 3, Mounds View, MN 1990 1 144,019 100 844,751 0.8 5.87
Woodale Drive, Building 4, Mounds View, MN 1992 1 42,551 100 208,107 0.2 4.89
Cahill Road, Edina, MN 1979 1 45,800 100 241,801 0.2 5.28
Monticello Lane, Maple Grove, MN 1986 1 40,437 100 157,704 0.1 3.90
--- ---------- --- ------------ ----- -----
Market subtotal/weighted average 5 328,549 100% $ 1,922,719 1.7% $5.85
Other Markets
Rudolph Way, Greendale, IN 1990 1 50,000 100% $ 117,500 0.1% $2.35
--- ---------- --- ------------ ----- -----
Midwest Region subtotal/weighted average 40 1,831,555 96% $ 9,244,859 8.1% $5.27
--- ---------- --- ------------ ----- -----
Workspace Properties Total 119 6,352,513 97% $ 34,162,180 29.8% $5.52
--- ---------- --- ------------ ----- -----
Grand Total 242 30,035,063 97% $114,799,399 100.0% $3.93
=== ========== === ============ ===== =====
</TABLE>
- --------
(1) "Annualized net rent" means annualized monthly net rent from leases in
effect as of March 31, 1999. "Net rent" means contractual rent, excluding
any reimbursements for real estate taxes or operating expenses.
(2)Property was sold June, 1999.
(3)Property currently under agreement to be sold.
S-26
<PAGE>
MANAGEMENT
The following table sets forth information with respect to our officers and
trustees.
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business
Name Age Experience and Other Positions
---- --- ------------------------------------
<C> <C> <S>
Ferdinand Colloredo-Mansfeld.. 59 Ferdinand Colloredo-Mansfeld has served as
our Chairman of the Board of Trustees and
Chief Executive Officer since our formation
in October 1997. Mr. Colloredo-Mansfeld
also serves as the Chairman and Chief
Executive Officer of Cabot Advisors.
Mr. Colloredo-Mansfeld served as Chairman,
Chief Executive Officer and Chief
Investment Officer of Cabot Partners
Limited Partnership from 1990 to 1997,
having previously served in the same
positions with Cabot, Cabot & Forbes Realty
Advisors, Inc., an affiliate of Cabot,
Cabot & Forbes, since its formation in
1986. Mr. Colloredo-Mansfeld began his real
estate career in 1970 when he joined Cabot,
Cabot & Forbes, a national real estate
development, management and construction
firm, becoming its Chief Financial Officer
in 1973, Chief Operating Officer in 1974
and Chief Executive Officer in 1976, a
position he held until his retirement from
that company in 1989. As Chief Executive
Officer, Mr. Colloredo-Mansfeld oversaw the
development and management of approximately
$4 billion of commercial properties in
twenty states, including 35 master planned
suburban business and industrial parks. Mr.
Colloredo-Mansfeld is a graduate of Harvard
College and Harvard Business School. He is
a limited partner in Brown Brothers
Harriman & Co. and is a Director of Data
General Corporation and Raytheon Company.
He is Chairman of the Board of Trustees of
Massachusetts General Hospital. Mr.
Colloredo-Mansfeld is the father of Franz
Colloredo-Mansfeld, our Chief Financial
Officer.
Robert E. Patterson........... 54 Mr. Patterson has served as our President
and a Trustee since our formation in
October 1997. Mr. Patterson served as
Executive Vice President, Director of
Acquisitions and a member of the Investment
Committee of Cabot, Cabot & Forbes Realty
Advisors, Inc. and, subsequently, Cabot
Partners Limited Partnership from 1987 to
1997. Mr. Patterson began his real estate
career in 1972 as a lawyer with the firm of
Gaston, Snow & Ely Bartlett. In 1978, he
became the first Executive Director of the
Massachusetts Industrial Finance Agency and
remained in that position until 1983 when
he joined the Beal Companies, a Boston-
based real estate development, management
and investment firm as Senior Vice-
President. He joined Cabot, Cabot & Forbes
Realty Advisors, Inc. in 1987 to head its
acquisitions group and was a founding
partner of Cabot Partners Limited
Partnership upon its formation as an
independent entity in 1990. Mr. Patterson
is a graduate of Harvard College and
Harvard Law School. He is a Trustee of The
Putnam Group of Mutual Funds, a Trustee of
the Sea Education Association and Chairman
of the Board of Trustees of the Joslin
Diabetes Center. He is a member of numerous
industry associations, including the
National Association of Real Estate
Investment Trusts and the Urban Land
Institute.
</TABLE>
S-27
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience
Name Age and Other Positions
---- --- -----------------------------------------------
<C> <C> <S>
George M. Lovejoy, Jr.... 68 Mr. Lovejoy became a Trustee of ours in March
1999. Mr. Lovejoy has since 1994 been President
of Fifty Associates, a real estate investment
company of which he has been an executive
officer since 1966, and was a senior executive
officer from 1972 to 1993 of Meredith & Grew, a
real estate service company of which he was
President from 1978 to 1988 and Chairman from
1988 to 1993. He is a Trustee of MGI Properties,
Chairman of the Investment Committee of Copley
Investors Limited Partnership and a Director or
Trustee of a number of funds in the Scudder
family of mutual funds. Mr. Lovejoy's
professional organization affiliations include
the Counselors of Real Estate, the Greater
Boston Building Owners & Managers Association
and the Greater Boston Real Estate Board, of
each of which organizations he is a past
President, the International Council of Shopping
Centers, the Massachusetts Association of
Realtors, the National Association of Realtors
and the Institute of Real Estate Management. He
is also a Trustee and a past President of the
New England Aquarium, a member of the
Corporation of Northeastern University and a
member and past Chairman of the Massachusetts
Advisory Committee of the Nature Conservancy.
Christopher C. Milliken.. 53 Mr. Milliken has been a Trustee of ours since
February 1998. He has been President, Chief
Executive Officer and a Director of the Boise
Cascade Office Products Corporation since April
1998, previously having served as Senior Vice
President, Operations from 1995 to April 1998
and Eastern Regional Manager from 1990 to 1995.
Prior to beginning his career at Boise Cascade
Office Products Corporation in 1977, Mr.
Milliken served in various merchandise
management positions at Marshall Field & Company
from 1970 to 1977.
Maurice Segall........... 69 Mr. Segall has been a Trustee of ours since
February 1998. Mr. Segall has been a senior
lecturer at the MIT-Sloan School of Management
and a senior advisor to the Boston Consulting
Group since 1989. Until 1989, he was Chairman,
President and Chief Executive Corporate Officer
of Zayre Corporation, which he joined as
President and Chief Executive Officer in 1978.
Mr. Segall is a Director of AMR Corporation and
Harcourt General, Inc. He is a Trustee of
Massachusetts General Hospital and the Boston
Museum of Fine Arts.
W. Nicholas Thorndike.... 65 Mr. Thorndike has served as a Trustee of ours
since February 1998. Mr. Thorndike retired in
1988 from Wellington Management
Company/Thorndike, Doran, Paine and Lewis where
he was Chairman of the Board and Managing
Partner. Mr. Thorndike serves as a Director of
Courier Corporation, Data General Corporation,
the Providence Journal (where he is Chairman of
the Executive Committee) and Bradley Real
Estate, Inc. He also serves as a Trustee of
Massachusetts General Hospital, having served as
its Chairman of the Board from 1987 to 1992 and
President from 1992 to 1994, and serves as a
Trustee of Eastern Utilities Associates,
Northeastern University and The Putnam Group of
Mutual Funds.
</TABLE>
S-28
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience
Name Age and Other Positions
---- --- -----------------------------------------------
<C> <C> <S>
Ronald L. Skates.......... 57 Mr. Skates has been a Trustee of ours since
February 1998. Mr. Skates has been President,
Chief Executive Officer and Director of Data
General Corporation since 1989. Prior to
joining Data General Corporation in 1986, Mr.
Skates was a Partner of Price Waterhouse LLP,
certified public accountants. He is a member of
the American Institute of Certified Public
Accountants and the Massachusetts Society of
Certified Public Accountants. He is also a
Trustee of Massachusetts General Hospital and
Vice Chairman and a Director of the
Massachusetts High Technology Council.
Franz Colloredo-Mansfeld.. 36 Franz Colloredo-Mansfeld has been our Chief
Financial Officer since October 1997 and served
as a Senior Vice President of Cabot Partners
since 1996. He was a Senior Engagement Manager
of McKinsey & Company, Inc. from 1992 through
1996. He previously worked for the Deutsche
Bank real estate investment group in 1992 and
was a Robert Bosch Fellow at the German Central
Bank (Bundesbank) in Frankfurt, Germany in
1991. He was also an investment banker with
Merrill Lynch & Co. from 1986 through 1989,
where he specialized in mergers and
acquisitions. Mr. Colloredo-Mansfeld is a
graduate of Harvard College and Harvard
Business School. He is on the Board of Advisors
of Gilbane, Inc. and is a director or trustee
of numerous charitable organizations.
Mr. Colloredo-Mansfeld is the son of Ferdinand
Colloredo-Mansfeld, our Chief Executive
Officer.
Andrew D. Ebbott.......... 43 Mr. Ebbott has served as our Senior Vice
President, Director of Acquisitions since
October 1997. Mr. Ebbott joined Cabot, Cabot &
Forbes Realty Advisors, Inc. in 1988 as
Director of Research and a member of its
acquisition department, becoming a Vice-
President in 1991 and a Senior Vice President
in 1995 of Cabot Partners Limited Partnership.
Mr. Ebbott is a graduate of Dartmouth College
and the University of Chicago Business School.
He has over 13 years experience in real estate
finance, investment and research and is a
member of the American Institute of Certified
Public Accountants.
Howard B. Hodgson, Jr..... 43 Mr. Hodgson has been our Senior Vice President,
Director of Real Estate Operations since
October 1997 and has served as a Senior Vice
President, Director of Asset Management and
Member of the Investment Committee of Cabot
Partners Limited Partnership from 1992 to
October 1997. Mr. Hodgson began his real estate
career in 1979 with the Boston-based real
estate firm of R.M. Bradley & Co., Inc.,
becoming the head of its institutional property
management group prior to joining Cabot, Cabot
& Forbes Asset Management Company in 1991 as a
Senior Vice President and head of its property
management group. Mr. Hodgson is a graduate of
Northeastern University. He is a Trustee and
member of the Executive Committee of the
Cambridge Savings Bank and is a Trustee of
Cambridge Financial Group, Inc. He is a member
of the Building Owners and Managers Association
and the National Association of Industrial and
Office Parks and is a corporate Trustee of the
Trustees of Reservations.
</TABLE>
S-29
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience and
Name Age Other Positions
---- --- ---------------------------------------------------
<C> <C> <S>
Neil E. Waisnor... 44 Mr. Waisnor has served as our Senior Vice President-
Finance, Treasurer and Secretary since October 1997.
Mr. Waisnor was a founding partner of Cabot Partners
Limited Partnership, joining as a Vice President and
Treasurer in 1990 and becoming a Senior Vice President
and Chief Financial Officer in 1995. Prior to joining
Cabot Partners Limited Partnership, he was Vice
President and Controller of Cabot, Cabot & Forbes,
where he served in a variety of financial capacities
since 1985. He worked for Arthur Andersen & Co. from
1977 until 1985, where he was a senior audit manager
serving real estate and high technology companies. Mr.
Waisnor is a graduate of the University of
Massachusetts at Amherst and is a member of the
American Institute of Certified Public Accountants and
the Massachusetts Society of Certified Public
Accountants and has served on the Accounting Committee
of the National Council of Real Estate Investment
Fiduciaries.
Eugene F. Reilly.. 38 Mr. Reilly has been our Senior Vice President-Director
of Development since October 1997. Mr. Reilly served as
Director of Leasing and Marketing of Cabot Partners
Limited Partnership from 1992 to October 1997, becoming
Senior Vice President in 1996. Mr. Reilly began his
real estate career with the Boston commercial real
estate brokerage firm of Leggat McCall and Werner in
1983 and subsequently became a leasing broker with
Julien J. Studley, Inc. In 1985, he joined National
Development Corporation where he became a Senior Vice
President prior to joining Cabot Partners Limited
Partnership as a Vice President in 1992. Mr. Reilly is
a graduate of Harvard College. He is a member of the
National Association of Industrial and Office Parks,
the Industrial Development Research Council and the
Council of Logistics Managers.
</TABLE>
SELLING SHAREHOLDERS
The following table lists the selling shareholders and the number of common
shares that each is selling pursuant to this prospectus supplement.
<TABLE>
<CAPTION>
Common
Shares
That Are
Being
Common Shares Sold Common Shares
Selling Shareholder Owned Before the Offering Hereunder(2) Owned After the Offering(2)
- ------------------- --------------------------------- ------------ --------------------------------
Number Percent Outstanding(1) Number Percent Outstanding(1)
---------- ---------------------- --------- ----------------------
<S> <C> <C> <C> <C> <C>
IBM Retirement Plan
Trust.................. 10,246,244 23.5% 900,000 9,346,244 21.4%
State of Wisconsin
Investment Board....... 2,959,534 6.8% 900,000 2,059,534 4.7%
Leland Stanford Jr.
University Endowment
Fund................... 2,367,923 5.4% 1,000,000 1,367,923 3.1%
</TABLE>
- --------
(1) The calculation is based on the sum of all outstanding common shares and
limited partnership units in Cabot L.P. that are convertible into common
shares.
(2) Assumes the underwriter has not exercised its option to purchase up to
420,000 additional shares to cover over-allotments.
For information on additional shares available for sale, see "Selling
Shareholders" and "Risk Factors--Shares that become available for future sale
may adversely affect the market price of our common shares" in the accompanying
prospectus.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
among us, the selling shareholders and J.P. Morgan Securities, Inc., as
underwriter, the selling shareholders have agreed to sell to the underwriter
and the underwriter has agreed to purchase from the selling shareholders
2,800,000 common shares.
The underwriter has advised us and the selling shareholders that it proposes to
offer the common shares to the public initially at the public offering price
set forth on the cover page of this prospectus supplement and may offer the
common shares to selected dealers at such price less a concession of not to
exceed $ per share. The underwriter may allow, and such dealers may
reallow, a concession to other dealers of not to exceed $ per share. After
the initial public offering of the common shares, the public offering price and
other selling terms may be changed by the representatives.
The selling shareholders have granted the underwriter an option, exercisable
for 30 days from the date of this prospectus supplement, to purchase up to
420,000 additional common shares from the selling shareholders at the same
price per share to be paid by the underwriter for the other shares offered
hereby. The underwriter may exercise the option only to cover over-allotments,
if any, made in connection with the distribution of the common shares offered
hereby.
The following table shows the per share and total underwriting discounts to be
paid to the underwriter by the selling shareholders. Such amounts are shown
assuming both no exercise and full exercise of the underwriter's option to
purchase up to 420,000 additional common shares. We will not pay any
underwriting discounts to the underwriter in this offering.
<TABLE>
<CAPTION>
Paid by the Selling
Shareholders
-------------------------
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per share.......................................... $ $
Total.............................................. $ $
</TABLE>
We and the selling shareholders have agreed to indemnify the underwriter
against certain liabilities, including liabilities under the Securities Act, or
to contribute to payments the underwriter may be required to make in respect
thereof.
We estimate that the total expenses of this offering, excluding underwriting
discounts, will be $300,000. The selling shareholders will not be responsible
for any such expenses.
In connection with this offering, the underwriter may engage in transactions
that stabilize, maintain or otherwise affect the price of the common shares.
Specifically, the underwriter may overallot this offering, creating a short
position. In addition, the underwriter may bid for, and purchase, common shares
in the open market to cover short positions or to stabilize the price of the
common shares. Finally, the underwriter may reclaim selling concessions allowed
for distributing common shares in this offering, if it repurchases previously
distributed common shares in covering transactions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain
the market price of the common shares above independent market levels. The
underwriter is not required to engage in these activities, and may end any of
these activities at any time.
We, the selling shareholders and certain of our other shareholders have agreed,
with limited exceptions, that during the period beginning from the date of this
prospectus supplement and continuing through the date 60 days after the date of
this prospectus supplement, they will not,
S-31
<PAGE>
(1) offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of, directly or indirectly, any common shares or any securities convertible
into or exercisable or exchangeable for, or that represent the right to receive
common shares or any substantially similar securities or (2) enter into any
swap, option, future, forward or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the common shares or any
substantially similar security, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of common shares or such
other securities, in cash or otherwise (other than pursuant to employee stock
option and restricted stock plans existing on the date of this prospectus
supplement) without the prior written consent of the underwriter.
From time to time in the ordinary course of its businesses, the underwriter and
its affiliates have engaged in and may in the future engage in commercial
and/or investment banking transactions with us and our affiliates.
LEGAL MATTERS
The legality of the shares will be passed upon for us by Mayer, Brown & Platt,
which firm will rely upon the opinion of Ballard Spahr Andrews & Ingersoll, LLP
as to various matters of Maryland law. Cahill Gordon & Reindel, a partnership
including a professional corporation, will act as counsel to the underwriter in
connection with this offering.
S-32
