UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended December
31, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------
Commission File Number 333-63723-06
REGENCY OFFICE PARTNERSHIP, L.P.
(Exact name of registrant as specified in its charter)
Delaware 59-3402467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal executive offices) (zip code)
Securities registered pursuant to Section 12(b)of the Act:
NONE
(Title of Class)
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES ( ) NO (x)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. (X)
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant and the approximate number of shares of
Registrant's voting common stock outstanding is not applicable.
Documents Incorporated by Reference
None
<PAGE>
TABLE OF CONTENTS
Form 10-K
Item
No.
Report Page
This filing constitutes a special financial report pursuant to Rule 5d-2 of the
Securities Exchange Act of 1934. This report contains only the financial
statements of the registrant for 1998, the last full fiscal year preceding the
fiscal year in which the registrant's registration statement on Form S-4 (No.
333-63723) became effective.
PART IV
Item 14.
Exhibits, Financial Statements, Schedules and Reports on Form 8-K.............1
(a) Financial Statements and Financial Statement Schedules:
The financial statements together with the report of KPMG LLP dated February 1,
1999, are listed on the index immediately preceding the financial statements at
the end of this report.
(b) Reports on Form 8-K: None
(c) Exhibits:
23.Consent of KPMG LLP
27.Financial Data Table
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REGENCY OFFICE PARTNERSHIP, L.P.
By: REGENCY CENTERS, L.P.,
General Partner
By: REGENCY REALTY CORPORATION,
General Partner
Date: March 17, 1999 By: /s/ Martin E. Stein, Jr.
------------------------
Martin E Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 17, 1999 By: /s/ Bruce M. Johnson
--------------------
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: March 17, 1999 By: /s/ J. Christian Leavitt
------------------------
J. Christian Leavitt, Senior Vice President,
Finance and Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: March 17, 1999 /s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 17, 1999 /s/ Mary Lou Rogers
-------------------
Mary Lou Rogers, President, Chief Operating
Officer and Director
Date: March 17, 1999 /s/ Thomas B. Allin
-------------------
Thomas B. Allin, Director
Date: March 17, 1999 /s/ Raymond L. Bank
-------------------
Raymond L. Bank, Director
Date: March 17, 1999 /s/ A. R. Carpenter
A. R. Carpenter, Director
Date: March 17, 1999 /s/ Jeffrey A. Cozad
--------------------
Jeffrey A. Cozad, Director
Date: March 17, 1999 /s/ J. Dix Druce, Jr.
---------------------
J. Dix Druce, Jr., Director
Date: March 17, 1999 /s/ John T. Kelley
------------------
John T. Kelley, Director
Date: March 17, 1999 /s/ Douglas S. Luke
-------------------
Douglas S. Luke, Director
Date: March 17, 1999 /s/ John C. Schweitzer
----------------------
John C. Schweitzer, Director
Date: March 17, 1999 /s/ Lee Wielansky
Lee Wielansky, Director
Date: March 17, 1999 /s/ Terry N. Worrell
--------------------
Terry N. Worrell, Director
<PAGE>
Independent Auditors' Report
The Partners
Regency Office Partnership, L.P.:
We have audited the accompanying balance sheets of Regency Office Partnership,
L.P. as of December 31, 1998 and 1997, and the related statements of operations,
partners' capital, and cash flows for each of the years in the three-year period
ended December 31, 1998. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Regency Office Partnership,
L.P. as of December 31, 1998 and 1997, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
1998, in conformity with generally accepted accounting principles.
KPMG LLP
Jacksonville, Florida
February 28, 1999
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Balance Sheets
December 31, 1998 and 1997
1998 1997
------------ -------------
Assets
Cash restricted for tenants' security deposits $ 47,099 62,852
Property and buildings, at cost (note 2):
Land 7,394,905 --
Buildings and improvements 26,811,187 --
------------ -------------
34,206,092 --
Less accumulated depreciation (566,209) --
------------ -------------
Net property and buildings 33,639,883 --
------------ -------------
-- 19,258,232
------------ -------------
Accounts receivable and other assets 227,946 41,894
Deferred leasing costs, less accumulated
amortization (note 4) 8,521 278,771
------------ -------------
Total other assets 236,467 320,665
------------ -------------
$ 33,923,449 19,641,749
============= =============
Liabilities and Partners' Capital
Accounts payable and other liabilities $ 125,541 87,142
Tenants' security deposits 47,099 62,852
------------ -------------
Total liabilities 172,640 149,994
------------- --------------
33,750,809 19,491,755
------------ -------------
$ 33,923,449 19,641,749
============ =============
See accompanying notes to financial statements.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Statement of Operations
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
------------ ------------ ------------
Revenues:
Rental income (note 3) $ 3,440,366 4,136,367 4,026,288
Tenant reimbursements 517,374 496,029 443,574
Other income 11,033 52,597 28,486
------------ ------------ -----------
Total revenues 3,968,773 4,684,993 4,498,348
------------ ------------ ------------
Expenses:
Operating and maintenance (note 4) 270,072 661,970 610,493
Depreciation 566,209 675,588 662,411
General and administrative 310,145 309,874 240,471
Utilities 87,062 472,036 492,209
Real estate taxes 334,875 447,478 440,128
Amortization of deferred leasing
costs 279,991 179,451 70,710
Interest -- 290,127 444,666
------------ ----------- ------------
Total expenses 1,848,354 3,036,524 2,961,088
------------ ----------- ------------
Income before gain
on sale of real estate 2,120,419 1,648,469 1,537,260
Gain on sale of real estate
(note 2) 10,725,974 450,902 --
------------ ------------ ------------
Net income $ 12,846,393 2,099,371 1,537,260
============ ============ ============
See accompanying notes to financial statements.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Statements of Partners' Capital
Years ended December 31, 1998, 1997 and 1996
Total
Partners'
Capital
--------------------
Balance at December 31, 1995 $ 16,885,087
Net cash contributions (distributions) (1,828,008)
Net income 1,537,260
--------------------
Balance at December 31, 1996 16,594,339
Net cash contributions (distributions) 798,045
Net income 2,099,371
--------------------
Balance at December 31, 1997 19,491,755
Net cash contributions (distributions) 1,412,661
Net income 12,846,393
--------------------
Balance at December 31, 1998 $ 33,750,809
====================
See accompanying notes to financial statements.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Statements of Cash Flows
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
--------- ---------- ---------
Cash flows from operating activities:
Net income $12,846,393 2,099,371 1,537,260
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 566,209 675,588 662,411
Amortization of deferred leasing costs 279,991 179,451 70,710
Deferred leasing costs (9,741) (208,305) (116,563)
Gain on sale of real estate (10,725,974) (450,902) --
Changes in assets and liabilities:
Accounts receivable and other assets (186,052 20,163 (20,594)
Accounts payable and other liabilities 38,399 66,770 (36,369)
Cash restricted for tenants' security
deposits 15,753 (11,618) (623)
Tenants' security deposits (15,753) 11,618 623
-------- --------- --------
Net cash provided by operating activities 2,809,225 2,382,136 2,096,855
---------- ---------- ----------
Cash flows from investing activities:
Proceeds from sale of real estate 29,984,206 2,645,229 --
Purchase of and additions to property
and buildings (34,206,092) (568,650) (250,430)
---------- ---------- ---------
Net cash provided by(used in)
investing activities (4,221,886) 2,076,579 (250,430)
---------- ---------- ----------
Cash flows from financing activities:
Principal payments on mortgage loan -- (5,256,760) (60,768)
Net cash contributions (distributions) 1,412,661 798,045(1,828,008)
---------- ---------- ----------
Net cash provided by (used in)
financing activities 1,412,661 (4,458,715)(1,888,776)
---------- ---------- ----------
Net change in cash -- -- (42,351)
Cash at beginning of year -- -- 42,351
---------- ---------- ----------
Cash at end of year $ -- -- --
========== ========== =========
Supplemental disclosure of cash flow
information
Cash paid for interest $ -- 302,627 444,666
========== ========== =========
See accompanying notes to financial state
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(1) Summary of Significant Accounting Policies
(a) Partnership Structure
Regency Office Partnership, L.P. (the Partnership) was formed as
a Florida partnership for the purpose of acquiring, leasing and
operating shopping centers and office buildings.
The Partnership interest is currently held 99% by Regency Centers,
L.P., a Florida partnership (RCLP), as general partner, and 1% by
Regency Realty Corporation, RCLP's parent. Prior to February 23,
1998, the Partnership was owned 100% by two wholly owned
subsidiaries of Regency Realty Corporation.
(b) Method of Accounting
The accompanying financial statements were prepared on the accrual
basis of accounting. No provision for income taxes is made because
any liability for income taxes is that of the individual Partners
and not that of the Partnership.
(c) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the
Partnership's management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period.
Actual results could differ from those estimates.
(d) Property and Buildings
Property and building are recorded at cost. Major additions and
improvements to property and buildings are capitalized to the
property accounts, while replacements, maintenance, and repairs
which do not improve or extend the useful lives of the respective
assets are reflected in operations. Depreciation is computed using
the straight-line method over the estimated useful lives of the
property and buildings, which is 39 years for buildings and
improvements and the life of the lease term for tenant
improvements.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(e) Revenue Recognition
The Partnership leases space to tenants under agreements with
varying terms. Leases are accounted for as operating leases with
minimum rent recognized on a straight-line basis over the term of
the lease regardless of when payments are due. During 1996, the
Partnership collected cash of $28,128 in excess of minimum rent
recorded related to the impact of recognizing rent on a
straight-line basis. Contingent rentals are included in income in
the period earned.
(f) Deferred Costs
Deferred costs consist of costs associated with leasing the
property. Such costs are deferred and amortized using the
straight-line method over the terms of the respective leases.
(g) Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Partnership
considers all instruments with a maturity of 90 days or less at
purchase to be cash equivalents.
(h) Impairment of Long-Lived Assets
The Partnership follows the provisions of Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of." This
Statement requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverablility of assets to be held and used is measured by
comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amounts of the assets
exceed their fair value.
(2) Sale of Office Buildings and Purchase of Shopping Centers
During 1997 and 1996, the operations of the Partnership were generated
from the rental of four office properties. Those properties were (1)
Quadrant, a 188,502 square foot property located in Jacksonville,
Florida, constructed and acquired in 1985 for approximately $17.9
million, (2) Paragon Cable Building, a 40,298 square foot property
located in Tampa, Florida, constructed and acquired in 1993 for
approximately $3.0 million, (3) Westland One, a 36,304 square foot
property located in Jacksonville, Florida, constructed and acquired in
1988 for approximately $2.0 million, and (4) Fairway Executive Center, a
33,135 square foot property located in Fort Lauderdale, Florida. On
December 22, 1997 the Partnership sold Fairway Executive Center for
$2,645,229 which resulted in a gain of $450,902.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
In December 1997, the partnership classified all of its office buildings
as held for sale. Accordingly, no depreciation has been recorded on such
properties from that point forward. During the first six months of 1998
the Partnership sold the remaining three office properties for a net
sales price of $29,984,206, and recorded a gain of $10,725,974.
During 1998, prior to their sale, the office buildings generated $187,800
in income before gain on sale of real estate. Subsequent to the sales of
the office properties, the Partnership purchased two shopping centers.
Cherry Grove, a 186,040 square foot property, constructed in 1997,
located in Cincinnati, Ohio, was purchased for $16,243,443, and
Bloomingdale Square, a 267,935 square foot property, constructed in 1987,
located in Tampa, Florida, was purchased for $17,962,650. At December 31,
1998, Cherry Grove and Bloomingdale Square had accumulated depreciation
of $265,335 and $300,874, respectively, and had a combined net cost, for
federal income tax purposes, of $28.6 million.
(3) Leases
The Partnership has various tenant leases with terms that expire through
2021. Based on the sales and subsequent purchases of rental property
described in note 2, the following future minimum rental payments reflect
the leases related to the Partnership's current rental properties only,
Cherry Grove and Bloomingdale Square:
Year ending December 31, Amount
1999 $ 3,304,241
2000 3,164,758
2001 2,817,471
2002 2,394,313
2003 1,963,670
Thereafter 14,409,125
----------------
$ 28,053,578
================
Most tenants are responsible for payment or reimbursement of their
proportionate share of taxes, insurance, and common area expenses.
During 1998, Kroger and WalMart paid base rents totaling $518,515 and
$371,754, respectively, which exceeded 10% of the total minimum rent
earned by the Partnership. In each of 1997 and 1996, two office building
tenants paid minimum rent of $1,228,764, which exceeded 10% of the total
minimum rent earned by the Partnership.
<PAGE>
REGENCY OFFICE PARTNERSHIP, L.P.
Notes to Financial Statements
December 31, 1998, 1997 and 1996
(4) Related Party Transactions
The Partnership paid fees for property management to RCLP of $151,454,
$172,194 and $166,172 for the years ended December 31, 1998, 1997, and
1996, respectively. In addition, during 1996 the Partnership paid RRG, an
affiliate of RCLP, $45,000 for asset management services.
The Partnership paid tenant lease commissions to RCLP of $9,741,
$208,305, and $116,563 or the years ended December 31, 1998, 1997, and
1996, respectively. Such payments have been recorded as deferred leasing
costs in the accompanying balance sheets.
Exhibit 23
Independent Auditors' Consent
The Board of Directors
Regency Realty Corporation:
We consent to incorporation by reference in the registration statement (No.
333-63723) on Form S-4 of Regency Centers, L.P., of our report dated February
28, 1999, relating to the balance sheets of RRC Operating Partnership of
Georgia, L.P. as of December 31, 1998 and 1997, and the related statements of
operations, partners' capital, and cash flows for the years ended December 31,
1998 and 1997, and for the period from February 22, 1996 (inception) to December
31, 1996, which report appears in the December 31, 1998, annual report on Form
10-K of RRC Operating Partnership of Georgia, L.P.
KPMG LLP
Jacksonville, Florida
March 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
OFFICE PARTNERSHIP, L.P.'S FORM 10-K FOR THE YEAR ENDED 12/31/98
</LEGEND>
<CIK> 0001066252
<NAME> REGENCY OFFICE PARTNERSHIP, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 47,099
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<RECEIVABLES> 227,946
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<PP&E> 34,206,092
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