<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 30, 1997
Federal Realty Investment Trust
------------------------------------------------------
(Exact name of registrant as specified in its charter)
District of Columbia 1-7533 52-0782497
- ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1626 East Jefferson Street, Rockville, Maryland 20852-4041
- ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 301/998-8100
------------
Exhibit Index appears on Page 3.
<PAGE>
Item 5. Other Events
Federal Realty Investment Trust hereby files as exhibit 99 the
following supplemental data pertaining to its portfolio of properties at June
30, 1997.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99 Supplemental portfolio information at June 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FEDERAL REALTY INVESTMENT TRUST
Date: July 30, 1997 /s/ Cecily A. Ward
--------------------------
Cecily A. Ward
Vice President, Controller
-2-
<PAGE>
EXHIBIT INDEX
Exh No. Exhibit Page No.
- ------- ------- --------
99 Supplemental portfolio information at June 30, 1997 4
-3-
<PAGE>
FEDERAL REALTY INVESTMENT TRUST
================================================================================
Supplemental Information
June 30, 1997
================================================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
1. Debt Summary.......................................................... E-2
2. Occupancy
Percentage Leased................................................. E-3
Economic Occupancy................................................ E-4
Regional Breakdown................................................ E-5
3. Leases Signed Analysis
Comparable and Non-Comparable..................................... E-6
4. Press Release......................................................... E-7
5. Glossary of Terms..................................................... E-10
</TABLE>
================================================================================
1626 East Jefferson Street
Rockville, Maryland 20852-4041
301/998-8100
<PAGE>
FEDERAL REALTY INVESTMENT TRUST
DEBT ANALYSIS (EXCLUDING CAPITAL LEASES AND INTEREST RATE SWAPS)
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Balance
Maturity Rate (in thousands)
-------- ---- --------------
<S> <C> <C> <C>
MORTGAGES
Barracks Road 06/01/98 9.77% $ 21,222
Falls Plaza 06/01/98 9.77% 4,219
Old Keene Mill 06/01/98 9.77% 6,917
West Falls 06/01/98 9.77% 4,842
Loehmanns Plaza 07/21/98 9.75% 6,370
Federal Plaza 03/10/01 8.95% 28,256
Tysons Station 09/01/01 9.875% 4,236
Bristol 08/01/98 9.65% 10,909
Escondido (Municipal bonds) purchased 12/31/96 10/01/16 Variable ## 9,400
Northeast 12/31/01 participating 1,500
---------
$ 97,871
=========
NOTES PAYABLE
Revolving credit facilities libor + .75% $ 93,095
Note issued in connection with
tenant buyout at Queen Anne Plaza 01/15/06 8.875% 1,205
Note issued in connection with
renovation of Perring Plaza 01/31/13 10.00% 2,817
Other various various 279
---------
$ 97,396
=========
UNSECURED PUBLIC DEBT
5 1/4% Convertible subordinated 04/30/02 5.250% $ 289
debentures
5 1/4% Convertible subordinated 10/28/03 5.250% 75,000
debentures
8 7/8% Notes (fixed) 01/15/00 8.875% 75,000
8 7/8% Notes (fixed) * 01/15/00 7.530% 25,000
8% Notes (fixed) 04/21/02 8.000% 25,000
6 5/8% Notes (fixed) 12/01/05 6.625% 40,000
7.48% Debentures 08/15/26 7.480% 50,000
---------
$ 290,289
=========
Total fixed rate debt $ 381,561 78.58%
Total variable rate debt 103,995 21.42%
--------- ------
Total debt $ 485,556 100.00%
========= ======
Weighted average interest rate:
-------------------------------
Fixed rate debt 7.74%
Variable on revolving facilities 6.40% **
</TABLE>
* The Trust purchased an interest rate swap on $25 million which sold for $1.5
million, thereby decreasing the effective interest rate.
** Weighted average interest rate on revolving credit facilities for six months
ended June 30, 1997
## The bonds bear interest at a variable rate determined weekly to be the
interest rate which would enable the bonds to be remarketed at 100% of
their principal amount.
<PAGE>
FEDERAL REALTY INVESTMENT TRUST
PERCENTAGE LEASED ANALYSIS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVERALL OCCUPANCY
(Quarter to Quarter Analysis) June 30, 1997 June 30, 1996
---------------------------------- ----------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,770,492 11,986,868 94% 12,317,789 11,593,141 94%
Rollingwood Apartments (# of units) 282 280 99% 282 282 100%
</TABLE>
<TABLE>
<CAPTION>
OVERALL OCCUPANCY
(Rolling 12 Months) June 30, 1997 March 31, 1997
-------------------------------- -------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,770,492 11,986,868 94% 13,046,013 12,228,746 94%
Rollingwood Apartments (# of units) 282 280 99% 282 281 99%
<CAPTION>
OVERALL OCCUPANCY
(Rolling 12 Months) December 31, 1996 September 30, 1996
-------------------------------- -------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,733,461 11,935,107 94% 12,324,469 11,509,125 93%
Rollingwood Apartments (# of units) 282 278 98% 282 281 99%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SAME CENTER OCCUPANCY
(Quarter to Quarter Comparison) June 30, 1997 June 30, 1996
---------------------------------- ----------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,150,587 10,531,352 94% 11,630,983 11,049,612 95%
Rollingwood Apartments (# of units) 282 280 99% 282 282 100%
</TABLE>
<TABLE>
<CAPTION>
SAME CENTER OCCUPANCY
(Rolling 12 Months) At June 30, 1997 At March 31, 1997
---------------------------------- ----------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,150,587 10,531,352 94% 11,425,601 10,762,859 94%
Rollingwood Apartments (# of units) 282 280 99% 282 281 99%
<CAPTION>
At December 31, 1996 At September 30, 1996
---------------------------------- ----------------------------------
Type Size Leased Occupancy Size Leased Occupancy
- ----------------------------------- ---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,247,168 10,625,745 94% 11,559,958 10,904,972 94%
Rollingwood Apartments (# of units) 282 278 98% 282 281 99%
</TABLE>
<PAGE>
Federal Realty Investment Trust
Economic Occupancy Analysis
June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OVERALL ECONOMIC OCCUPANCY
(Quarter to Quarter Analysis) June 30, 1997 June 30, 1996
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,770,492 11,724,538 92% 12,317,789 11,300,470 92%
Rollingwood Apartments (# of units) 282 280 99% 282 282 100%
</TABLE>
<TABLE>
<CAPTION>
OVERALL ECONOMIC OCCUPANCY
(Rolling 12 Months) June 30, 1997 March 31, 1997
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,770,492 11,724,538 92% 13,046,013 11,982,214 92%
Rollingwood Apartments (# of units) 282 280 99% 282 276 98%
</TABLE>
<TABLE>
<CAPTION>
OVERALL ECONOMIC OCCUPANCY
(Rolling 12 Months) December 31, 1996 September 30, 1996
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 12,733,461 11,680,876 92% 12,324,469 11,277,086 92%
Rollingwood Apartments (# of units) 282 277 98% 282 277 98%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SAME CENTER ECONOMIC OCCUPANCY
(Quarter to Quarter Comparison) June 30, 1997 June 30, 1996
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,150,587 10,269,022 92% 11,630,983 10,768,633 93%
Rollingwood Apartments (# of units) 282 280 99% 282 282 100%
</TABLE>
<TABLE>
<CAPTION>
SAME CENTER ECONOMIC OCCUPANCY
(Rolling 12 Months) At June 30, 1997 At March 31, 1997
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,150,587 10,269,022 92% 11,425,601 10,518,375 92%
Rollingwood Apartments (# of units) 282 280 99% 282 276 98%
</TABLE>
<TABLE>
<CAPTION>
SAME CENTER ECONOMIC OCCUPANCY
(Rolling 12 Months) At December 31, 1996 At September 30, 1996
-------------------------------------- --------------------------------------
Leases Leases
Generating Economic Generating Economic
Type Size Income Occupancy Size Income Occupancy
- ----------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Retail Properties (square feet) 11,247,168 10,378,343 92% 11,559,958 10,678,933 92%
Rollingwood Apartments (# of units) 282 277 98% 282 277 98%
</TABLE>
<PAGE>
FEDERAL REALTY INVESTMENT TRUST
REGIONAL OCCUPANCY ANALYSIS
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Square Occupancy
Region Footage 06/30/97
- -------------------- ------------ ---------
<S> <C> <C>
D.C./Baltimore 3,998,319 96%
Philadelphia 2,206,475 92%
New York/New Jersey 1,961,952 97%
Central Virginia 1,174,078 95%
Mid-West 761,021 93%
New England 1,110,194 96%
Southern California 595,918 84%
Other 962,535 85%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Square Occupancy
Region Footage 06/30/97
- -------------------- ------------ ---------
<S> <C> <C>
D.C./Baltimore 3,998,319 96%
Anchor 2,003,692 99%
Small Shops 1,994,627 93%
Philadelphia 2,206,475 92%
Anchor 1,226,287 91%
Small Shops 980,188 93%
New York/New Jersey 1,961,952 97%
Anchor 1,410,130 100%
Small Shops 551,822 91%
Central Virginia 1,174,078 95%
Anchor 546,849 100%
Small Shops 627,229 90%
Mid-West 761,021 93%
Anchor 419,549 96%
Small Shops 341,472 89%
New England 1,110,194 96%
Anchor 564,207 100%
Small Shops 545,987 92%
Southern California 595,918 84%
Anchor 152,944 100%
Small Shops 442,974 78%
Other 962,535 85%
Anchor 501,042 85%
Small Shops 461,493 84%
</TABLE>
<PAGE>
FEDERAL REALTY INVESTMENT TRUST
LEASING ACTIVITY
JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMPARABLE
WEIGHTED
NUMBER OF SQUARE AVERAGE LEASE
ROLLING 12 MONTHS LEASES SIGNED FEET TERM (YEARS)
- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
2nd Quarter 1997 73 357,162 9.6
1st Quarter 1997 58 220,452 6.9
4th Quarter 1996 85 469,455 10.7
3rd Quarter 1996 89 298,546 6.1
TOTAL 305 1,345,615 8.8
</TABLE>
<TABLE>
<CAPTION>
COMPARABLE
AVERAGE PRIOR AVERAGE CURRENT
RENT PER RENT PER ANNUALIZED
ROLLING 12 MONTHS SQUARE FOOT SQUARE FOOT INCREASE IN RENT
- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
2nd Quarter 1997 $13.32 $15.11 $ 637,973
1st Quarter 1997 $11.09 $14.88 $ 836,236
4th Quarter 1996 $10.88 $15.94 $2,376,264
3rd Quarter 1996 $14.17 $16.05 $ 562,179
TOTAL $12.29 $15.57 $4,412,652
</TABLE>
<TABLE>
<CAPTION>
COMPARABLE ESTIMATED
PERCENTAGE TENANT
INCREASE IMPROVEMENT
ROLLING 12 MONTHS OVER PRIOR RENT COSTS
- ----------------- ---------------- ----------------
<S> <C> <C>
2nd Quarter 1997 13% $ 2,847,000
1st Quarter 1997 34% $ 3,162,000
4th Quarter 1996 47% $ 6,988,000
3rd Quarter 1996 13% $ 1,740,000
TOTAL 27% $14,737,000
</TABLE>
<TABLE>
<CAPTION>
NON-COMPARABLE WEIGHTED
AVERAGE
NUMBER OF SQUARE LEASE
ROLLING 12 MONTHS LEASES SIGNED FEET TERM (YEARS)
- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
2nd Quarter 1997 7 81,229 11.5
1st Quarter 1997 7 29,178 12.4
4th Quarter 1996 8 170,449 18.3
3rd Quarter 1996 5 19,918 8.3
TOTAL 27 300,774 16.4
</TABLE>
<TABLE>
<CAPTION>
NON-COMPARABLE ESTIMATED
ANNUALIZED TENANT
AVERAGE RENT CURRENT IMPROVEMENT
ROLLING 12 MONTHS PER SQUARE FOOT RENT COSTS
- ----------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
2nd Quarter 1997 $11.75 $ 954,526 $ 348,000
1st Quarter 1997 $19.86 $ 579,585 $ 70,000
4th Quarter 1996 $12.85 $2,189,679 $ 995,000
3rd Quarter 1996 $13.89 $ 276,607 $ 380,000
TOTAL $13.30 $4,000,397 $1,793,000
</TABLE>
<PAGE>
Exhibit 99
Mary Jane Morrow
Senior Vice President
Finance & Treasurer
(301) 998-8321
FEDERAL REALTY INVESTMENT TRUST ANNOUNCES
SECOND QUARTER 1997 OPERATING RESULTS
Rockville, Maryland
July 30, 1997
Federal Realty Investment Trust (NYSE:FRT) reported today that funds from
operations for the second quarter of 1997 increased 26% to $19.9 million from
$15.8 million in the second quarter of 1996. On a per share basis, funds from
operations rose 6% to $.51 in the second quarter of 1997 from $.48 in the
comparable quarter of 1996. Funds from operations also improved for the first
six months of 1997 increasing 26% to $38.9 million or $1.01 per share from $30.8
million or $.94 per share in the first half of 1996.
A comparison of property operations for the second quarter of 1997 versus
the second quarter of 1996 shows the following:
. Rental income increased 18% to $47.1 million in 1997 from $39.9 million in
1996. When adjusted to exclude properties acquired and sold during 1996 and
1997, rental income increased 7% to $41.7 million in 1997 from $38.8
million in 1996.
. During the second quarter of 1997, the Trust signed leases for a total
438,000 square feet. On a same space basis, the Trust re-leased 357,000
square feet at an average increase in rent per square foot of 13%. The
weighted average rent on these leases was $15.11 per square foot compared
to the previous average rent of $13.32 per square foot.
-More-
<PAGE>
. Same property occupancy stood at 94% at June 30, 1997 compared to 95% a
year ago. At June 30, 1997, the Trust's overall portfolio was 94% leased
compared to 94% a year ago.
Commenting on the quarter, Steven J. Guttman, President and Chief Executive
Officer stated, "We are pleased with our continued growth in the second quarter.
Strong property results, combined with positive contributions from our recent
redevelopments and acquisitions, produced solid growth in funds from operations.
While our acquisition pace slowed somewhat in the second quarter, we anticipate,
given our current pipeline, that the pace will accelerate in the second half of
the year."
Year to date, the Trust has acquired six retail properties containing
564,000 square feet for a cash investment of approximately $90 million. The
acquisitions include the purchase of two shopping centers; Pike 7 Plaza, located
in Tysons Corner, Virginia and Town & Country Village, located in San Jose,
California; and four main street retail buildings; two buildings on Third Street
Promenade in Santa Monica, California; one building in San Diego's Gaslamp
Quarter, and one building in Chicago, Illinois.
Periodic sales of properties is an integral part of the Trust's asset
management strategy. During the second quarter, the Trust completed the sale of
two properties: Town & Country Shopping Center in Springfield, Illinois and
Shillington Shopping Center in Shillington, Pennsylvania. These properties no
longer fit the Trust's investment criteria in terms of location and future
growth potential. The Trust recognized a gain of approximately $7.0 million on
these sales.
Federal Realty is an equity real estate investment trust specializing in
the ownership, management and redevelopment of prime retail properties. The
Trust's real estate portfolio contains 90 retail properties, consisting of
neighborhood and community shopping centers and main street retail buildings,
located in strategic metropolitan markets across the United States. These
markets include Boston, New York/New Jersey, Philadelphia, metropolitan
Washington D.C., Chicago and California.
Federal Realty has paid quarterly dividends to its shareholders
continuously since its founding in 1962 and has increased its dividend rate for
29 consecutive years. Shares of the Trust are traded on the New York Stock
Exchange under the symbol: FRT.
###
<PAGE>
FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
OPERATING RESULTS 1997 1996 1997 1996
- ----------------- --------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES
Rental income $47,061 $39,913 $90,981 $80,660
Interest 1,448 1,056 2,948 1,919
Other income 2,293 2,601 5,520 4,763
-------- ------- ------- -------
50,802 43,570 99,449 87,342
EXPENSES
Rental 10,789 9,924 21,005 21,717
Real estate taxes 4,892 4,045 9,466 7,969
Interest 11,999 11,139 23,988 22,288
Administrative 2,493 2,136 4,594 3,822
Depreciation and amortization 10,404 9,344 29,528 18,676
-------- ------- ------- -------
40,577 36,588 79,581 74,472
-------- ------- ------- -------
OPERATING INCOME BEFORE INVESTORS'
SHARE OF OPERATIONS AND GAIN ON
SALE OF REAL ESTATE 10,225 6,982 19,868 12,870
Investors' share of operations (249) (85) (581) 53
-------- ------- ------- -------
INCOME BEFORE GAIN ON SALE OF REAL
ESTATE 9,976 6,897 19,287 12,923
Gain on sale of real estate 7,034 - 7,034 -
NET INCOME $17,010 $ 6,897 $26,321 $12,923
======== ======= ======= =======
EARNINGS PER SHARE $0.43 $0.21 $0.68 $0.40
======== ======= ======= =======
FUNDS FROM OPERATIONS
Net income $17,010 $ 6,897 $26,321 $12,923
Add: depreciation and amortization
of real estate assets 9,354 8,355 18,418 16,697
Add: amortization of initial direct
costs of leases 564 592 1,148 1,185
Less: gain on sale of real
estate (7,034) - (7,034) -
-------- ------- ------- -------
Funds from operations $19,894 $15,844 $38,853 $30,805
======== ======= ======= =======
Funds from operations per share $0.51 $0.48 $1.01 $0.94
======== ======= ======= =======
Weighted average shares outstanding 39,219 33,066 38,633 32,666
</TABLE>
================================================================================
<TABLE>
<CAPTION>
June 30, December 31,
BALANCE SHEET DATA 1997 1996
- ------------------ ------------ -------------
<S> <C> <C>
ASSETS
Real estate, at cost $1,266,649 $1,147,865
Accumulated depreciation and amortization (233,401) (223,553)
---------- ----------
1,033,248 924,312
Mortgage notes receivable 38,126 27,913
Cash 19,496 11,041
Receivables 17,915 17,294
Other assets 35,862 54,746
---------- ----------
TOTAL ASSETS $1,144,647 $1,035,306
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Obligations under capital leases & mortgages payable $ 224,229 $ 229,189
Notes payable 97,396 66,106
Senior Notes 215,000 215,000
5 1/4% Convertible subordinated debentures 75,289 75,289
Other liabilities 62,481 60,837
SHAREHOLDERS' EQUITY 470,252 388,885
---------- ----------
$1,144,647 $1,035,306
========== ==========
</TABLE>
9
<PAGE>
GLOSSARY OF TERMS
AVERAGE OCCUPANCY COSTS: Includes rent, common area maintenance expense, real
estate taxes, merchant association dues and other charges
ECONOMIC OCCUPANCY: The square footage generating rental income expressed as a
percentage of its total rentable square feet.
LEASES SIGNED - COMPARABLE: Represents leases signed on spaces for which there
was a former tenant.
LEASES SIGNED - NONCOMPARABLE: Represents leases signed on spaces for which
there was no previous tenant, i.e. expansion space or space that was previously
non-leasable.
LEASES SIGNED - PRIOR RENT: Total rent paid by the previous tenant; includes
minimum and percentage rent.
OCCUPANCY: The currently leased portion of a property expressed as a percentage
of its total rentable square feet; includes square feet covered by leases for
stores not yet opened.
OVERALL OCCUPANCY: Occupancy for the entire portfolio -- includes all centers
owned in reporting period.
SAME CENTER OCCUPANCY: Occupancy for only those centers owned and operating in
the periods being compared. Excludes centers purchased or sold as well as
properties under redevelopment.
TENANT IMPROVEMENT COSTS: Represents the total dollars committed for the
improvement (fit-out) of a space as relates to a specific lease. The amounts
shown represent not only the estimated cost to fit-out the tenant space, but may
also include base building costs (i.e. expansion, escalators or new entrances)
which are required to make the space leasable.
