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Previous: CORNERSTONE PROPERTIES INC, 8-K, 1998-03-27 |
Next: DYCO OIL & GAS PROGRAM 1981-1, 10-K405, 1998-03-27 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 26, 1998 (Date of earliest event reported)
CORNERSTONE PROPERTIES INC.
(Exact name of registrant as specified in its charter)
Nevada 0-10421 74-2170858
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
Cornerstone Properties Inc.
126 East 56th Street
New York, NY 10022
(Address of principal executive offices)
(212) 605-7100
(Registrant's telephone number,
including area code)
<PAGE> 2
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 - Supplemental Information to Quarterly Earnings Release
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CORNERSTONE PROPERTIES INC.
(Registrant)
By:/s/ John S.Moody.
John S. Moody, Chairman and
Chief Executive Officer
Date: March 27, 1998
By:/s/ Kevin P. Mahoney.
Kevin P. Mahoney, Chief Financial Officer
Date: March 27, 1998
<PAGE> 1
Exhibit 99.1
Cornerstone Properties Inc.
Supplemental Information to Quarterly Earnings Release
1) Fourth Quarter 1997
o Balance Sheet
o Income Statement
2) Fourth Quarter Press Release
3) Quarterly Fact Sheet
4) Table of Properties
5) Top Ten Tenants
6) Historical Occupancy
7) Average Annual Rents
8) Lease Expiration Schedule
9) Tenant Retention
10) Capital Expenditures and Leasing Costs
11) Minority Sharing in Cash Flows and Residual Proceeds
<PAGE> 2
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Fourth Quarter 1997
o Balance Sheet
o Income Statement
<PAGE> 3
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
----------- ---------
(Dollar amounts in thousands)
<S> <C> <C>
ASSETS
Investments, at cost: (Notes 1, 2 and 4)
Land $ 260,542 $ 68,395
Buildings, leasehold interests and improvements 1,559,085 612,567
Mortgage notes receivable, inclusive of $13,065,000 unamortized premium 240,253 --
Deferred lease costs 127,645 118,700
----------- ---------
2,187,525 799,662
Less: Accumulated depreciation and amortization 229,652 198,686
----------- ---------
Total investments 1,957,873 600,976
Cash and cash equivalents (Note 1) 24,730 114,803
Restricted cash (Note 3) 1,903 4,426
Other deferred costs, net of accumulated amortization of $1,998,000 and $1,140,000 5,728 3,562
Deferred tenant receivables (Notes 1 and 11) 38,531 34,747
Tenant and other receivables, net (Note 1) 7,584 2,405
Notes receivable 1,652 2,911
Other assets 13,480 2,350
----------- ---------
Total Assets $ 2,051,481 $ 766,180
=========== =========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Long-term debt, inclusive of $11,209,000 unamortized premium (Note 4) $ 706,178 $ 400,142
Credit facility (Note 5) 187,000 --
Accrued interest payable 4,134 1,082
Accrued real estate taxes payable 13,401 13,222
Common Stockholders' distribution payable -- 12,366
Accounts payable and accrued expenses 18,363 6,468
Unearned revenue and other liabilities 10,986 9,095
----------- ---------
Total Liabilities 940,062 442,375
----------- ---------
Minority Interest (Note 1) 15,420 (17,478)
----------- ---------
Commitments and Contingencies (Notes 2, 4, 5, 7 and 13)
Redeemable Preferred Stock; (1997-344,828; 1996-1,493,104) shares authorized;
(1997-0; 1996-1,148,276) shares issued and outstanding; $166,500,000 redemption
value (Note 6) -- 162,743
----------- ---------
Stockholders' Investment (Note 7)
7% Cumulative Convertible Preferred Stock, $16.50 stated value 50,000 50,000
15,000,000 shares authorized; 3,030,303 shares issued and outstanding
Common stock, no par value; 250,000,000 shares authorized;
(1997-83,191,819; 1996-20,609,754) shares issued and outstanding
Paid-in capital 1,048,187 160,577
Accumulated deficit -- (30,789)
Deferred compensation (2,188) (1,248)
----------- ---------
Total Stockholders' Investment 1,095,999 178,540
----------- ---------
Total Liabilities and Stockholders' Investment $ 2,051,481 $ 766,180
=========== =========
</TABLE>
<PAGE> 4
CORNERSTONE PROPERTIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(Dollar amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited) (Unaudited)
Three Months Three Months Twelve Months Twelve Months
Ended Ended Ended Ended
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Revenues
Office and parking rentals $ 56,591 $ 30,807 $ 159,828 $ 111,494
Interest and other income 5,651 1,338 14,083 5,414
--------- --------- --------- ---------
Total Revenues 62,242 32,145 173,911 116,908
--------- --------- --------- ---------
Expenses
Building operating expenses 13,269 7,038 35,962 24,578
Real estate taxes 8,007 5,424 25,560 19,610
Interest expense 11,582 7,680 33,977 31,734
Depreciation and amortization 10,113 6,448 30,978 24,317
General and administrative 2,430 1,745 7,564 6,407
--------- --------- --------- ---------
Total Expenses 45,401 28,335 134,041 106,646
--------- --------- --------- ---------
16,841 3,810 39,870 10,262
--------- --------- --------- ---------
Other income (expenses)
Net gain on interest rate swaps -- (1,123) 99 4,278
Minority Interest (960) (502) (2,368) (1,519)
--------- --------- --------- ---------
Income before extraordinary item 15,881 2,185 37,601 13,021
Extraordinary loss -- (139) (54) (3,925)
--------- --------- --------- ---------
Net income $ 15,881 $ 2,046 $ 37,547 $ 9,096
========= ========= ========= =========
Net income (loss) applicable to common stock $ 15,006 $ (482) $ 27,387 $ 3,943
========= ========= ========= =========
Income (loss) before extraordinary
item per common share $ 0.26 $ (0.01) $ 0.63 $ 0.39
========= ========= ========= =========
Net income (loss) per common share $ 0.26 $ (0.03) $ 0.63 $ 0.19
========= ========= ========= =========
Net income (loss) per fully diluted common share $ 0.26 $ (0.03) $ 0.63 $ 0.19
========= ========= ========= =========
</TABLE>
<PAGE> 5
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Fourth Quarter Press Release
<PAGE> 6
CORNERSTONE PROPERTIES INC.
126 East 56th Street
New York, NY 10022
Telephone (212) 605-7100 Facsimile (212) 605-7199
AT CORNERSTONE PROPERTIES
Kevin P. Mahoney Karin Maas
Chief Financial Officer VP, Investor Relations
(212) 605-7101 (212) 605-7113
AT THE FINANCIAL RELATIONS BOARD
Julie Gottlieb Stephanie Mishra Judith Sylk-Siegel
(General Info) (Analyst Info) (Media Info)
(212) 661-8030 (415) 986-1591 (212) 661-8030
FOR IMMEDIATE RELEASE
February 25, 1998
CORNERSTONE PROPERTIES INC. ANNOUNCES
FOURTH QUARTER AND FISCAL YEAR 1997 RESULTS
New York, NEW YORK (February 25, 1998) -- Cornerstone Properties Inc.
(NYSE:CPP), a real estate investment trust, announced today funds from
operations of $0.34 per share for the fourth quarter and $1.28 per share for the
fiscal year ended December 31, 1997.
- --------------------------------------------------------------------------------
1997 Financial Highlights
o Year-to-date property net operating income rose 46% over 1996.
o Year-to-date FF0 grew 95% to $69.1 million in 1997 over $35.5 million in
1996.
o Lowered leverage to approximately 30% of total market capitalization.
1997 Portfolio Highlights
o Purchased 527 Madison Avenue (216,000 s.f.) in midtown Manhattan in
February, 1997.
o Acquired nine properties and a parcel of undeveloped land from Dutch
Institutional Holding Company (4.5 million s.f.) in October, 1997.
o Purchased the second mortgage on Sixty State Street in Boston (823,000
s.f.) in December, 1997.
o Doubled size of portfolio to 18 properties and 10.2 million s.f. at the
end of 1997 from 7 properties and 4.7 million s.f. at the end of 1996.
o Overall occupancy rate maintained at 97%; tenant retention rate remained a
solid 83%.
1997 Operational Highlights
o Completed first U.S. public offering in April at $14.00 per share and
delivered a total return of 30.89% for the participants who held stock
over the eight-month holding period.
o Entered into an Acquisition Line of Credit in the amount of $350 million.
o New York State Teacher's Retirement System and Rodamco converted $166.5
million of preferred shares into common stock.
o Restructured as an umbrella partnership REIT, or UPREIT.
- --------------------------------------------------------------------------------
(more)
<PAGE> 7
Cornerstone Properties Announces 4Q/FY '97 Results
Page 2
February 25, 1998
Fourth Quarter 1997 Results
Funds from operations (FF0) allocated to shareholders amounted to $26,164,000,
or $0.34 per share calculated on 77,676,000 diluted total shares outstanding,
compared to $10,079,000, or $0.33 per share on 30,288,000 diluted total shares
outstanding, for the three months ended December 31, 1996. The increase in FF0
per share was due to the impact of the acquisition of the Dutch Institutional
Holding Company (DIHC) portfolio on October 27, 1997. As defined by NAREIT,
funds from operations equals net income excluding expenses from debt
restructuring, gains (or loss) on sale of property, plus depreciation and
amortization.
Net income for the fourth quarter of 1997 grew to $15,881,000, compared to
$2,046,000 in the fourth quarter of 1996. The increase was driven by increased
property net operating income from acquisitions made in late 1996 and 1997,
reduced leverage and same-store NOI growth of 0.93%.
Fiscal 1997 Results
Year-to-date FF0 allocated to shareholders was $69,100,000, or $1.28 per share
on 54,192,000 diluted total shares outstanding, compared to $35,488,000, or
$1.37 per share on 25,821,000 diluted total shares outstanding for the
comparable 1996 period.
Year-to-date net operating income before depreciation from Cornerstone
Properties' real estate assets increased 46% to $98,306,000 for the twelve
months ended December 31, 1997, from $67,306,000 for the comparable period in
1996. The increase is primarily attributable to the Company's acquisition of
three properties in 1996 (Tower 56 in midtown Manhattan; One Lincoln Centre in
Oakbrook, Illinois; and the Frick Building in Pittsburgh, Pennsylvania) and, in
1997, 527 Madison Avenue in midtown Manhattan (February) and the nine-property
DIHC portfolio (October).
Year-to-date net income increased to $37,547,000, compared to $9,096,000 for
1996, reinforced by growth in real estate net operating income and offset by a
one-time gain on an interest rate swap transaction in 1996 relating to the
forward swap hedging of the refinancing of One Norwest Center.
Comments from Management
John S. Moody, Cornerstone Properties' Chairman and Chief Executive Officer,
commented on the Company's performance, "1997 was a tremendously successful --
and significant-- year for Cornerstone. The actions taken since our public
offering in April increased not just growth in FF0, but the sustainability of
that growth. On the acquisition front, we dramatically increased the size of
Cornerstone's portfolio with the purchase of the DIHC portfolio and smaller
acquisitions in midtown Manhattan and Boston, growing the portfolio to 18
properties totaling 10.2 million rentable square feet well ahead of plan. We
entered new target markets, increased our presence in others, and accelerated
geographic and tenant diversification to reduce portfolio risk and improve the
quality of earnings. Furthermore, we privately negotiated these acquisitions
with the sellers, which is testimony to Cornerstone's attractiveness as a
partner."
Mr. Moody continued, "We also significantly enhanced our financial flexibility,
in order to reinforce our ability to compete for assets and capital.
Specifically, we increased our existing line of credit by 75% to $350 million
and in January, converted to an UPREIT structure. We have also initiated
discussions to obtain a credit rating from both Standard & Poor's and Moody's,
which we believe will
<PAGE> 8
Cornerstone Properties Announces 4Q/FY '97 Results
Page 3
February 25, 1998
reduce our weighted average cost of capital and make the Company even more
appealing to sellers seeking to take a long-term, strategic position in
Cornerstone Properties." Mr. Moody concluded, "The combination of sustainable
growth from UPREIT transactions and enhanced financial flexibility should enable
Cornerstone to compete more effectively with our peers.'
Acquisitions Double Cornerstone's Portfolio
On February 14, 1997, the Company purchased 527 Madison Avenue in midtown
Manhattan for $67 million.
On October 27, 1997, the Company completed the purchase of nine properties and a
parcel of undeveloped land from the Dutch Institutional Holding Company in
exchange for $259 million in cash, $250 million in mortgage debt and 34,187,500
shares of common stock.
On December 31, 1997, the Company purchased a controlling interest in the form
of a second mortgage on Sixty State Street in Boston for $131.5 million. The
acquisition was completed on January 5, 1998, at which time the Company also
announced its intent to purchase 500 Corporate Centre, a Chicago office park,
using UPREIT shares in a transaction for the first time. The deal was completed
on February 3.
Acquisition Line of Credit Increased
On October 27, 1997, Bankers Trust Company and The Chase Manhattan Bank
increased their commitment to the Company's Acquisition Line of Credit from $200
million to $350 million. An initial drawdown of $54 million was made to fund a
portion of the cash needed to close the DIHC transaction in addition to the cash
on hand raised by Cornerstone's first U.S. public offering in April.
Quarterly Dividend Declared
The Company declared a quarterly dividend of $0.30 per share payable on February
27, 1998 to shareholders of record on January 31, 1998. The Company expects to
continue to maintain its quarterly dividend at $0.30 per share for the
foreseeable future until such time as its relatively high FFO payout ratio
(currently at 89%) becomes more in line with its peers.
"Same-Store" Revenue Growth Continues
The Company achieved year-to-date "same store" net operating income growth of
0.93% over 1996, despite the rolldown of 94,000 square feet leased by BTM
Capital Corp. (a subsidiary of Bank of Tokyo-Mitsubishi) and the expiration of
the Gadsby & Hannah lease (40,000 square feet) at 125 Summer Street in Boston.
Leasing Update: Tenant Retention Rate 83% and Overall Occupancy Rate 97%
Tenant retention for 1997 continued strong at 83%, while the portfolios overall
occupancy rate was maintained at 97%. The Company has been successful in its
goal to bring the occupancy of the two properties acquired in late 1996 -- the
Frick Building and One Lincoln Centre -- in line with the remainder of the
portfolio. Occupancy at the Frick Building increased from 85% at December 31,
1996 to 89% at December 31, 1997, and occupancy at One Lincoln Centre increased
from 91% to 96% during the same period.
<PAGE> 9
Cornerstone Properties Announces 4Q/FY '97 Results
Page 4
February 25, 1998
Cornerstone Properties Inc. is a self-administered equity real estate investment
trust (REIT) investing exclusively in Class A quality office properties in prime
locations in major metropolitan areas and central business districts. The
Company, through its subsidiaries, currently owns 19 Class A quality office
properties throughout the United States totaling 10.9 million renewable square
feet. Headquartered in New York City, the Company's stock is traded on the New
York Stock Exchange under the ticker symbol CPP.
With the exception of the historical information contained in the release, the
matters described herein contain forward-looking statements that are made
pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve a number of risks,
uncertainties or other factors beyond the Company's control which may cause
material differences in actual results, performance or other expectations. These
factors include, but are not limited to, those detailed in the Company's
registration statement and periodic reports filed with the Securities & Exchange
Commission.
###
To receive more information on Cornerstone Properties,
Via fax at no charge, dial 1-800-PRO-INFO and enter ticker symbol CPP,
or visit Cornerstone Properties' web site at www.cstoneprop.com
[Financial Statements follow]
<PAGE> 10
Cornerstone Properties Announces 4Q/FY '97 Results
Page 5
February 25, 1998
Cornerstone Properties Inc.
Funds From Operations
December 31, 1997
<TABLE>
<CAPTION>
3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended
12/31/97 12/31/96 12/31/97 12/31/96
-------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Rental Income $ 56,592 $ 30,807 $159,828 $111,494
Building Operating Expenses 21,276 12,462 61,522 44,188
-------- -------- -------- --------
Building Net Operating Income $ 35,316 $ 18,345 $ 98,306 $ 67,306
-------- -------- -------- --------
Corporate General and Administrative (2,431) (1,745) (7,564) (6,407)
Interest and Other Income 5,652 1,338 14,083 5,414
-------- -------- -------- --------
EBITDA $ 38,537 $ 17,938 $104,825 $ 66,313
-------- -------- -------- --------
Interest Expense (11,582) (7,680) (33,977) (31,734)
Non-Real Estate Depreciation* -- -- -- --
Minority Adjustments (1,467) (1,120) (3,919) (3,530)
Norwest Tax Adjustment -- 321 -- 2,428
Rent Notes 476 429 1,379 1,242
-------- -------- -------- --------
Funds From Operations 25,964 9,888 68,308 34,719
Interest on Convertible Debt 200 191 792 769
-------- -------- -------- --------
Funds From Operations (Adjusted for
convertible debt) $ 26,164 $ 10,079 $ 69,100 $ 35,488
-------- -------- -------- --------
Weighted Average Fully Diluted Shares 77,678 30,288 54,192 25,821
FFO Per Share (Fully Diluted) $ 0.34 $ 0.33 $ 1.28 $ 1.37
Less: Capital Expenditures Per Share 0.02 0.04 0.09 0.17
-------- -------- -------- --------
AFFO Per Share 0.31 0.30 1.19 1.21
Funds From Operations $ 25,964 $ 9,888 $ 68,308 $ 34,719
Less: Preferred Dividends (875) (2,528) (10,160) (5,153)
Less: Recurring Lease Costs and
Capital Expenditures** (1,740) (1,084) (4,739) (4,336)
Less: Straight Line Rents Adjusted For
Minority Interest (1,951) (242) (2,697) (993)
-------- -------- -------- --------
Funds Available for Distribution $ 21,398 $ 6,034 $ 50,712 $ 24,237
-------- -------- -------- --------
Weighted Average Common Shares
Outstanding 73,478 20,437 43,572 20,344
Funds Available for Distribution Per Share 0.29 0.30 1.16 1.19
Distribution Per Share 0.30 0.30 1.20 1.20
</TABLE>
* Non real estate depreciation has been reclassed to the general and
administrative category and finance amortization has been reclassed to
interest expense beginning in the third quarter of 1997.
** Based on a five year 1993-1997 average of recurring (revenue generating)
tenant leasing costs of $7.69 per square foot leased times the five year
(1998-2002) average quarterly lease expiration, adjusted for minority
interest of 207,070 square feet ($1,592,368), plus a capital expenditure
reserve of $0.06 per square foot,adjusted for minority interest, of
$148,982.
Year to date the Company has incurred $8,174,403 in recurring tenant costs
in leasing 1,020,042 square feet or a cost of $8.01 per square foot.
Year to date the Company has incurred $587,297 in recurring capital costs
on an average of 5.6 million square feet owned or a cost of $0.10 per
square foot.
<PAGE> 11
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Quarterly Fact Sheet
<PAGE> 12
Cornerstone Properties Inc.
Quarterly Fact Sheet
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1998 Common Dividends Record Date Payment Date
<S> <C> <C>
2nd Quarter 4/30/98 5/29/98
3rd Quarter 7/31/98 8/31/98
4th Quarter 10/30/98 11/30/98
1st Quarter 1999 1/29/99 2/26/99
- ---------------------------------------------------------------------------------------
Earnings Release/ Quarterly Conference Call
1st Quarter 5/5/98
2nd Quarter 8/4/98
3rd Quarter 11/3/98
4th Quarter 2/25/99
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Current Quarter Year to Date
3rd Quarter Results 1997 1996 1997 1996
<S> <C> <C> <C> <C>
FFO Per Share $ 0.34 $ 0.33 $ 1.28 $ 1.37
AFFO Per Share $ 0.31 $ 0.30 $ 1.19 $ 1.21
FAD Per Share $ 0.29 $ 0.30 $ 1.16 $ 1.19
FFO Payout Ratio 89% 90% 94% 87%
AFFO Payout Ratio 95% 101% 101% 99%
FAD Payout Ratio 103% 102% 103% 101%
Same Store NOI Growth NA NA 0.93% NA
EBITDA Interest Coverage 3.24 2.12 3.02 2.05
Fixed Charge Coverage 3.02 1.59 2.32 1.77
- ------------------------------------------------------------------------------------------------------------------------
Recurring Leasing Costs (Adjusted for minority interest) $1,854,382 $1,086,232 $8,174,403 4,344,926
Per Square Foot Leased $ 10.09 $ 11.55 $ 8.01 $ 11.55
Recurring Capital Expenditures $ 249,911 $ -- $ 517,062 $ --
Non- Recurring Leasing Cost $ 183,173 $ 299,234 $1,148,346 1,196,934
Non- Recurring Capital Expenditures $ 302,348 $ 6,375 $ 455,355 $ 25,500
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Parking Revenues (included in Office and Parking) $3,544,246 $1,465,837 $8,123,621 $5,767,427
Parking Expense (included in Building Operating Expense) $ 472,221 $ 221,160 $1,021,262 $ 872,984
Net Parking Income $3,072,025 $1,244,677 $7,102,359 $4,894,443
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Straight Line Rents $1,950,779 $ 242,000 $2,697,207 $ 993,000
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 13
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Table of Properties
<PAGE> 14
Cornerstone Properties Inc.
Table of Properties
As of December 31, 1997
<TABLE>
<CAPTION>
Remaining
Company's Number Average
Property Name Year Percent Total Rentable Occupancy of Lease Term Largest
and Location Constructed Interest Square Feet Rate Leases (in Years) Tenant
- --------------------------- ----------- --------- -------------- --------- ------ ---------- -----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
One Norwest Center 1983 100% 1,188,000 99% 46 8.3 Norwest Bank Denver N.A.
Denver, Colorado Newmont Gold Company
Teletech, Inc.
Norwest Center(1) 1988 50% 1,118,000 98% 32 11.5 Norwest Corporation
Minneapolis, Minnesota Faegre & Benson
KPMG Peat Marwick
Washington Mutual Tower(2)(3) 1988 50% 1,155,000 97% 95 4.7 Perkins Coie
Seattle, Washington Washington Mutual
Karr Tuttle Campbell
125 Summer Street 1989 100% 464,000 99% 26 3.0 Deloitte & Touche
Boston, Massachussetts BTM Capital Corp.
Burns & Levinson
Tower 56(4) 1983 100% 162,000 98% 42 3.1 Cornerstone Properties
New York, New York ICC Associates, L.P.
United Bank of Kuwait
One Lincoln Centre 1986 100% 297,000 96% 42 2.2 Superior Bank FSB
Oakbrook Terrace, IL Microsoft Corporation
Arthur Andersen LLP
The Frick Building(5) 1902 100% 341,000 89% 72 3.9 Meyer, Darragh, Buckler,
Pittsburgh, PA Bebenek & Eck
Sable, Makaroff & Gudsky
527 Madison Avenue(6) 1986 100% 216,000 100% 18 5.4 The Sumitomo Trust & Banking
New York, NY Co., Ltd. W.P. Stewart Co.,
Inc. Hill Samuel New York,
Inc.
191 Peachtree Street(7)(8) 1991 80% 1,221,000 95% 37 8.2 Wachovia Bank
Atlanta, Georgia King & Spalding
Powell, Goldstein, Frazer &
Murphy
Market Square(7)(9) 1990 60% 689,000 95% 46 7.2 Fulbright & Jaworski
Washington, D.C. Edison Electric Institute
Reid & Preist
Sherman & Sterling
500 Boylston Street(7)(10) 1988 91.5% 715,000 100% 12 6.3 Massachussetts Financial
Services
Boston, Massachussetts The New England Life
Towers Perrin Forster &
Crosby, Inc.
222 Berkeley Street(7)(10) 1991 91.5% 531,000 100% 28 6.3 Houghton Mifflin
Boston, Massachussetts Saga International Holidays
Oracle Corporation
Charlotte Plaza(7) 1982 100% 613,000 94% 43 6.8 First Union
Charlotte, North Carolina Parker Poe
Adams & Bernstein
200 Galleria(7) 1985 100% 433,000 91% 56 3.6 Liberty Mutual Group
Atlanta, Georgia
11 Canal Center(7) 1986 100% 70,000 84% 6 8.5 Robbins Gioa
Alexandria, Virginia Veda Inc.
99 Canal Center(7) 1986 100% 138,000 99% 18 3.6 Lowe, Price, LeBlanc & Becker
Alexandria, Virginia Howard, Needles, Tannen &
Bergendoff
National District Attorney's
Association
TransPotomac Plaza 5(7) 1983 100% 96,000 99% 11 4.9 Cities In Schools
Alexandria, Virginia The Onyx Group
Larson & Taylor
Sixty State Street(11) 1979 100% 823,000 98% 42 8.9 Hale & Dorr
Boston, Massachusetts The Pioneer Group, Inc.
ITT/Sheraton
------ ----------- ------- ----- --------
83% 10,270,000 97% 672 6.9
====== =========== ======= ===== ========
</TABLE>
<PAGE> 15
Cornerstone Properties Inc.
Table of Properties
Footnotes
- ----------
(1) While the Company's stated interest in the partnership which owns Norwest
Center is 50%, its economic interest in the Property is significantly
larger because of priority distributions it receives on its invested
capital base. For the twelve months ended December 31, 1997, the Company's
share of earnings and cash distributions from the partnership which owns
Norwest Center was 79.3%.
(2) While the Company's stated interest in the partnership which owns
Washington Mutual Tower is 50%, its economic interest in the Property is
significantly larger because of priority distributions it receives on its
invested capital base. For the twelve months ended December 31, 1997, the
Company received 100% of the cash distributions from the partnership which
ownes Washington Mutual Tower.
(3) Includes the Galland and Seneca Buildings.
(4) The Company's headquarters are located at Tower 56.
(5) The Property was substantially renovated in 1988.
(6) The Property was acquired by the Company in February 1997.
(7) Property acquired in the DIHC Acquisition.
(8) While the Company's stated interest in the partnership which owns 191
Peachtree Street is 80%, its economic interest is significantly larger
since it has acquired the first mortgage note in the amount of $145
million on the Property, which earns interest at 9.375%, and will receive
a priority distribution on its acquired capital base. In addition, in 1996
and 1997, the partner in the transaction, CH Associates, Ltd., received an
annual incentive distribution of $250,000 which, the Company expects, it
will continue to receive under the partnership agreement through February
28, 2000, with the Company receiving the remainder.
(9) At December 31, 1997, the Company owned the two loans on Market Square. In
January 1998, the Company acquired partnership interests with a stated
interest in the partnerships which own Market Square. Its economic
interest is significantly larger since it has acquired the first mortgage
note in the amount of $181 million on the Property which earns interest at
9.75% and will receive a priority distribution on its acquired capital
base. During 1996, the Company received 100% of the cash flow from the
Property.
(10) Distributions of cash flow and sales and refinancing proceeds are shared
in proportion to the Company's 91.5% partnership interest and Hines
Colorado Limited's ("Hines") 8.5% partnership interest.
(11) The Company acquired the second mortgage on the Property on December 31,
1997. Since it is currently projected that all the economic benefits
(subject to the first mortgage) from the Property inure to the Company, it
will be accounted for as an equity investment.
<PAGE> 16
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Top Ten Tenants
<PAGE> 17
Cornerstone Properties Inc.
Top Ten Tenants
As of December 31, 1997
<TABLE>
<CAPTION>
Full Service
Straight-Line Rent
---------------------------
Straight-Line Percent Scheduled Lease
Tenant Rent Recoveries Amount of Total Expiration Date
- -------------------------------------- ------------- ------------ ------------ -------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Norwest Corporation (1)(3) $ 20,512,000 $ 10,717,000 $ 31,229,000 11% Jan-99 14,000
Aug-01 7,000
Jul-03 143,000
Jul-13 402,000
Aug-18 451,000
---------
1,017,000
Massachusetts Financial Services(1) 9,853,000 4,482,000 14,335,00 5% Feb-03 359,000
Wachovia Bank(1) 8,921,000 3,396,000 12,317,000 4% Dec-08 382,000
Hale & Dorr(1) 7,345,000 3,596,000 10,941,000 4% Jun-13 273,000
King & Spalding(1) 8,031,000 2,605,000 10,636,000 4% Mar-06 306,000
The New England Life(1) 5,102,000 2,688,000 7,790,000 3% Sep-08 213,000
Powell Goldstein Frazer & Murphy(1) 5,365,000 1,808,000 7,173,000 2% Jan-06 199,000
Fullbright & Jaworski(2) 4,371,000 1,693,000 6,064,000 2% Jun-10 123,000
First Union(2)(4) 5,566,000 153,372 5,719,372 2% Mar-99 50,000
Aug-00 23,000
Mar-01 23,000
Aug-01 46,000
Sep-02 22,000
Aug-08 46,000
Mar-09 23,000
Mar-10 47,000
Mar-11 48,000
Apr-14 4,000
---------
332,000
Perkins Coie (2) 5,129,000 424,000 5,553,000 2% Dec-98 2,000
Jul-98 7,000
Jul-04 199,000
---------
208,000
------------ ------------ ------------
$ 80,195,000 $ 31,562,372 $111,757,372 38% 3,412,000
============ ============ ============ ====
Total Portfolio $226,558,000 $ 68,548,000 $295,106,000
============ ============ ============
</TABLE>
<PAGE> 18
Cornerstone Properties Inc.
Top Ten Tenants
Footnotes
- ----------
(1) Net Lease.
(2) Gross Lease.
(3) Norwest Corporation includes Norwest Corporation and Norwest Bank Denver
N.A.
(4) The 332,000 square feet of space includes 115,000 square feet currently
leased to another tenant, which will be leased by First Union commencing
September 1, 1998.
<PAGE> 19
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Historical Occupancy
<PAGE> 20
HISTORICAL OCCUPANCY RATE
<TABLE>
<CAPTION>
Total Bldg.
Sq. Ft. 1992 1993 1994 1995 1996 1997
---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
One Norwest Center 1,188,000 95% 96% 96% 98% 99% 99%
Norwest Center 1,118,000 100% 100% 100% 100% 100% 98%
Washington Mutual Tower 1,155,000 94% 96% 97% 97% 97% 97%
125 Summer Street 464,000 94% 100% 99%
Tower 56 162,000 91% 97% 98%
One Lincoln Centre 297,000 91% 96%
Frick 341,000 85% 89%
527 Madison 216,000 96% 100%
191 Peachtree Street 1,221,000 95%
Market Square 689,000 95%
500 Boylston Street 715,000 100%
222 Berkeley Street 531,000 100%
Charlotte Plaza 613,000 94%
200 Galleria 433,000 91%
11 Canal Center 70,000 84%
99 Canal Center 138,000 99%
TransPotomac Plaza 5 96,000 99%
60 State Street 823,000 98%
--------------------------------------------------------------------------------------
10,270,000 96% 97% 98% 98% 97% 97%
======================================================================================
</TABLE>
<PAGE> 21
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Average Annual Rents
<PAGE> 22
Average Annual Net Rents
The attached schedule shows Average Annual Net Rents per square foot occupied,
which are defined as Full Service Rents per square foot occupied less
Recoverable Operating Expenses per square foot occupied.
<TABLE>
<CAPTION>
Total Bldg.
Sq. Ft. 1997 1996 1995 1994 1993 1992
---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
One Norwest Center 1,188,000 $ 12.46 $ 12.08 $ 11.78 $ 11.61 $ 12.05 $ 12.35
Norwest Center 1,118,000 $ 18.29 $ 17.94 $ 17.82 $ 17.25 $ 17.56 $ 16.02
Washington Mutual Tower 1,155,000 $ 15.77 $ 15.98 $ 16.17 $ 15.27 $ 15.34 $ 15.26
125 Summer Street 464,000 $ 21.27 $ 23.24 $ 22.48
Tower 56 162,000 $ 22.76 $ 20.45
One Lincoln Centre 297,000 $ 19.60 $ 18.56
Frick 341,000 $ 10.50 $ 11.24
527 Madison 216,000 $ 36.55 $ 35.47
191 Peachtree Street 1,221,000 $ 21.07
500 Boylston Street 715,000 $ 25.89
222 Berkeley Street 531,000 $ 16.68
Charlotte Plaza 613,000 $ 9.35
200 Galleria 433,000 $ 12.92
11 Canal Center 70,000 $ 14.11
99 Canal Center 138,000 $ 14.49
TransPotomac Plaza 5 96,000 $ 12.55
---------- ------------------------------------------------------------------
Wtd Avg Occ - Portfolio 8,758,000 $ 17.46 $ 16.99 $ 16.06 $ 14.65 $ 14.93 $ 14.51
========== ==================================================================
</TABLE>
Average Annual Net Effective Rents
Average Annual Net Effective Rents per square foot occupied are Base Rents as
calculated on a straight-line basis through the term of the lease, plus recovery
of operating expenses, less recoverable operating expenses and amortization of
deferred leasing costs.
<TABLE>
<CAPTION>
Total Bldg.
Sq. Ft. 1997 1996 1995 1994 1993 1992
---------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
One Norwest Center 1,188,000 $ 11.66 $ 10.80 $ 10.56 $ 10.25 $ 10.59 $ 10.92
Norwest Center 1,118,000 $ 17.23 $ 17.43 $ 17.31 $ 17.00 $ 17.27 $ 17.48
Washington Mutual Tower 1,155,000 $ 12.02 $ 11.80 $ 11.83 $ 11.03 $ 10.84 $ 10.43
125 Summer Street 464,000 $ 20.00 $ 22.27 $ 23.33
Tower 56 162,000 $ 21.56 $ 21.17
One Lincoln Centre 297,000 $ 19.76 $ 19.70
Frick 341,000 $ 10.47 $ 11.69
527 Madison 216,000 $ 36.89 $ 30.99
191 Peachtree Street 1,221,000 $ 24.26
500 Boylston Street 715,000 $ 26.08
222 Berkeley Street 531,000 $ 18.08
Charlotte Plaza 613,000 $ 9.76
200 Galleria 433,000 $ 13.52
11 Canal Center 70,000 $ 14.72
99 Canal Center 138,000 $ 15.00
TransPotomac Plaza 5 96,000 $ 14.29
---------- ------------------------------------------------------------------
Wtd Avg Occ - Portfolio 8,758,000 $ 17.28 $ 15.43 $ 14.37 $ 12.69 $ 12.83 $ 12.88
========== ==================================================================
</TABLE>
<PAGE> 23
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Lease Expirations
<PAGE> 24
Lease Expirations
The following table sets forth certain categories of information relating to
lease expirations for all of the Properties.
<TABLE>
<CAPTION>
PROPERTY 1998 1999 2000 2001
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
One Norwest Center (1) Square feet expiring(3) 49,000 sf 69,000 sf 144,000 sf 55,000 sf
Straight-Line rent(4) $ 363,000 $ 639,000 $ 1,212,000 $ 592,000
Straight-Line rent per sq. ft $ 7.41 $ 9.26 $ 8.42 $ 10.76
Recoveries (5) $ 292,000 $ 411,000 $ 854,000 $ 330,000
Full service St-Line rent(6) $ 655,000 $ 1,050,000 $ 2,066,000 $ 922,000
Full service St-Line rent per sq. ft $ 13.37 $ 15.22 $ 14.35 $ 16.76
% Full service St-Lined rent 2.98% 4.78% 9.41% 4.20%
Asking market rent per sq. ft.(7) $ 22.00
No. of tenant leases expiring(8) 7 6 8 6
Norwest Center(1) Square feet expiring 61,000 sf 50,000 sf 104,000 sf 2,000 sf
Straight-Line rent $ 573,000 $ 775,000 $ 1,655,000 $ 35,000
Straight-Line rent per sq. ft $ 9.39 $ 15.50 $ 15.91 $ 17.50
Recoveries $ 866,000 $ 697,000 $ 1,579,000 $ 32,000
Full service St-Line rent $ 1,439,000 $ 1,472,000 $ 3,234,000 $ 67,000
Full service St-Line rent per sq. ft $ 23.59 $ 29.44 $ 31.10 $ 33.50
% Full service St-Lined rent 3.71% 3.80% 8.34% 0.17%
Asking market rent per sq. ft $ 35.00
No. of tenant leases expiring 14 4 4 1
Washington Mutual Tower(2) Square feet expiring 140,000 sf 191,000 sf 40,000 sf 52,000 sf
Straight-Line rent $ 2,722,000 $ 3,617,000 $ 730,000 $ 1,097,000
Straight-Line rent per sq. ft $ 19.44 $ 18.94 $ 18.25 $ 21.10
Recoveries $ 192,000 $ 174,000 $ 28,000 $ 36,000
Full service St-Line rent $ 2,914,000 $ 3,791,000 $ 758,000 $ 1,133,000
Full service St-Line rent per sq. ft $ 20.81 $ 19.85 $ 18.95 $ 21.79
% Full service St-Lined rent 11.70% 15.22% 3.04% 4.55%
Asking market rent per sq. ft $ 31.00
No. of tenant leases expiring 33 24 9 11
125 Summer Street(2) Square feet expiring 9,000 sf 171,000 sf 118,000 sf 9,000 sf
Straight-Line rent $ 219,000 $ 5,847,000 $ 4,001,000 $ 139,000
Straight-Line rent per sq. ft $ 24.33 $ 34.19 $ 33.91 $ 15.44
Recoveries $ 42,000 $ 1,243,000 $ 522,000 $ 132,000
Full service St-Line rent $ 261,000 $ 7,090,000 $ 4,523,000 $ 271,000
Full service St-Line rent per sq. ft $ 29.00 $ 41.46 $ 38.33 $ 30.11
% Full service St-Lined rent 1.59% 43.32% 27.64% 1.66%
Asking market rent per sq. ft $ 38.00
No. of tenant leases expiring 6 5 6 2
Tower 56(2) Square feet expiring 15,000 sf 33,000 sf 17,000 sf 42,000 sf
Straight-Line rent $ 568,000 $ 1,375,000 $ 682,000 $ 1,776,000
Straight-Line rent per sq. ft $ 37.87 $ 41.67 $ 40.12 $ 42.29
Recoveries $ 13,000 $ 20,000 $ 1,000 $ 16,000
Full service St-Line rent $ 581,000 $ 1,395,000 $ 683,000 $ 1,792,000
Full service St-Line rent per sq. ft $ 38.73 $ 42.27 $ 40.18 $ 42.67
% Full service St-Lined rent 9.00% 21.60% 10.57% 27.74%
Asking market rent per sq. ft $ 54.00
No. of tenant leases expiring 5 8 7 10
One Lincoln Centre(1) Square feet expiring 64,000 sf 41,000 sf 93,000 sf 3,000 sf
Straight-Line rent $ 1,248,000 $ 660,000 $ 1,932,000 $ 54,000
Straight-Line rent per sq. ft $ 19.50 $ 16.10 $ 20.77 $ 18.00
Recoveries $ 461,000 $ 375,000 $ 721,000 $ 25,000
Full service St-Line rent $ 1,709,000 $ 1,035,000 $ 2,653,000 $ 79,000
Full service St-Line rent per sq. ft $ 26.70 $ 25.24 $ 28.53 $ 26.33
% Full service St-Lined rent 21.55% 13.05% 33.45% 1.00%
Asking market rent per sq. ft $ 30.00
No. of tenant leases expiring 14 7 13 1
Frick Building(2) Square feet expiring 18,000 sf 39,000 sf 74,000 sf 42,000 sf
Straight-Line rent $ 377,000 $ 798,000 $ 1,502,000 $ 801,000
Straight-Line rent per sq. ft $ 20.94 $ 20.46 $ 20.30 $ 19.07
Recoveries $ 26,000 $ 18,000 $ 23,000 $ --
Full service St-Line rent $ 403,000 $ 816,000 $ 1,525,000 $ 801,000
Full service St-Line rent per sq. ft $ 22.39 $ 20.92 $ 20.61 $ 19.07
% Full service St-Lined rent 6.54% 13.24% 24.75% 13.00%
Asking market rent per sq. ft $ 22.00
No. of tenant leases expiring 14 16 19 6
<CAPTION>
PROPERTY 2002 2003 2004 2005
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
One Norwest Center (1) Square feet expiring(3) 110,000 sf 146,000 sf 118,000 sf
Straight-Line rent(4) $ 1,042,000 $ 2,115,000 $ 1,338,000
Straight-Line rent per sq. ft $ 9.47 $ 14.49 $ 11.34
Recoveries (5) $ 658,000 $ 890,000 $ 707,000
Full service St-Line rent(6) $ 1,700,000 $ 3,005,000 $ 2,045,000
Full service St-Line rent per sq. ft $ 15.45 $ 20.58 $ 17.33
% Full service St-Lined rent 7.75% 13.69% 9.32%
Asking market rent per sq. ft.(7)
No. of tenant leases expiring(8) 11 2 2
Norwest Center(1) Square feet expiring 53,000 sf 179,000 sf 119,000 sf
Straight-Line rent $ 455,000 $ 2,726,000 $ 2,078,000
Straight-Line rent per sq. ft $ 8.58 $ 15.23 $ 17.46
Recoveries $ 776,000 $ 2,733,000 $ 1,788,000
Full service St-Line rent $ 1,231,000 $ 5,459,000 $ 3,866,000
Full service St-Line rent per sq. ft $ 23.23 $ 30.50 $ 32.49
% Full service St-Lined rent 3.17% 14.08% 9.97%
Asking market rent per sq. ft
No. of tenant leases expiring 3 1 3
Washington Mutual Tower(2) Square feet expiring 106,000 sf 172,000 sf 270,000 sf 13,000 sf
Straight-Line rent $ 2,322,000 $ 3,592,000 $ 6,471,000 $ 242,000
Straight-Line rent per sq. ft $ 21.91 $ 20.88 $ 23.97 $ 18.62
Recoveries $ 59,000 $ 211,000 $ 483,000 $ 5,000
Full service St-Line rent $ 2,381,000 $ 3,803,000 $ 6,954,000 $ 247,000
Full service St-Line rent per sq. ft $ 22.46 $ 22.11 $ 25.76 $ 19.00
% Full service St-Lined rent 9.56% 15.27% 27.92% 0.99%
Asking market rent per sq. ft
No. of tenant leases expiring 7 5 4 1
125 Summer Street(2) Square feet expiring 125,000 sf 16,000 sf 10,000 sf
Straight-Line rent $ 3,310,000 $ 318,000 $ 275,000
Straight-Line rent per sq. ft $ 26.48 $ 19.88 $ 27.50
Recoveries $ 145,000 $ 154,000 $ 19,000
Full service St-Line rent $ 3,455,000 $ 472,000 $ 294,000
Full service St-Line rent per sq. ft $ 27.64 $ 29.50 $ 29.40
% Full service St-Lined rent 21.11% 2.88% 1.80%
Asking market rent per sq. ft
No. of tenant leases expiring 4 2 1
Tower 56(2) Square feet expiring 28,000 sf 5,000 sf 10,000 sf
Straight-Line rent $ 1,338,000 $ 194,000 $ 451,000
Straight-Line rent per sq. ft $ 47.79 $ 38.80 $ 45.10
Recoveries $ 12,000 $ 6,000 $ 7,000
Full service St-Line rent $ 1,350,000 $ 200,000 $ 458,000
Full service St-Line rent per sq. ft $ 48.21 $ 40.00 $ 45.80
% Full service St-Lined rent 20.90% 3.10% 7.09%
Asking market rent per sq. ft
No. of tenant leases expiring 8 2 2
One Lincoln Centre(1) Square feet expiring 79,000 sf 1,000 sf
Straight-Line rent $ 1,707,000 $ 16,000
Straight-Line rent per sq. ft $ 21.61 $ 16.00
Recoveries $ 722,000 $ 11,000
Full service St-Line rent $ 2,429,000 $ 27,000
Full service St-Line rent per sq. ft $ 30.75 $ 27.00
% Full service St-Lined rent 30.62% 0.34%
Asking market rent per sq. ft
No. of tenant leases expiring 6 1
Frick Building(2) Square feet expiring 35,000 sf 55,000 sf 11,000 sf
Straight-Line rent $ 641,000 $ 1,070,000 $ 195,000
Straight-Line rent per sq. ft $ 18.31 $ 19.45 $ 17.73
Recoveries $ 1,000 $ 19,000 $ --
Full service St-Line rent $ 642,000 $ 1,089,000 $ 195,000
Full service St-Line rent per sq. ft $ 18.34 $ 19.80 $ 17.73
% Full service St-Lined rent 10.42% 17.67% 3.16%
Asking market rent per sq. ft
No. of tenant leases expiring 10 3 1
<CAPTION>
2008
and
PROPERTY 2006 2007 Beyond Total
- -------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
One Norwest Center (1) Square feet expiring(3) 76,000 sf 406,000 sf 1,173,000 sf
Straight-Line rent(4) $ 1,127,000 $ 6,421,000 $ 14,849,000
Straight-Line rent per sq. ft $ 14.83 $ 15.82 $ 12.66
Recoveries (5) $ 463,000 $ 2,495,000 $ 7,100,000
Full service St-Line rent(6) $ 1,590,000 $ 8,916,000 $ 21,949,000
Full service St-Line rent per sq. ft $ 20.92 $ 21.96 $ 18.71
% Full service St-Lined rent 7.24% 40.62% 100.00%
Asking market rent per sq. ft.(7)
No. of tenant leases expiring(8) 2 2 46
Norwest Center(1) Square feet expiring 527,000 sf 1,095,000 sf
Straight-Line rent $ 13,738,000 $ 22,035,000
Straight-Line rent per sq. ft $ 26.07 $ 20.12
Recoveries $ 8,271,000 $ 16,742,000
Full service St-Line rent $ 22,009,000 $ 38,777,000
Full service St-Line rent per sq. ft $ 41.76 $ 35.41
% Full service St-Lined rent 56.76% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 2 32
Washington Mutual Tower(2) Square feet expiring 138,000 sf 1,122,000 sf
Straight-Line rent $ 2,653,000 $ 23,446,000
Straight-Line rent per sq. ft $ 19.22 $ 20.90
Recoveries $ 272,000 $ 1,460,000
Full service St-Line rent $ 2,925,000 $ 24,906,000
Full service St-Line rent per sq. ft $ 21.20 $ 22.20
% Full service St-Lined rent 11.74% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 1 95
125 Summer Street(2) Square feet expiring 458,000 sf
Straight-Line rent $ 14,109,000
Straight-Line rent per sq. ft $ 30.81
Recoveries $ 2,257,000
Full service St-Line rent $ 16,366,000
Full service St-Line rent per sq. ft $ 35.73
% Full service St-Lined rent 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 26
Tower 56(2) Square feet expiring 150,000 sf
Straight-Line rent $ 6,384,000
Straight-Line rent per sq. ft $ 42.56
Recoveries $ 75,000
Full service St-Line rent $ 6,459,000
Full service St-Line rent per sq. ft $ 43.06
% Full service St-Lined rent 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 42
One Lincoln Centre(1) Square feet expiring 281,000 sf
Straight-Line rent $ 5,617,000
Straight-Line rent per sq. ft $ 19.99
Recoveries $ 2,315,000
Full service St-Line rent $ 7,932,000
Full service St-Line rent per sq. ft $ 28.23
% Full service St-Lined rent 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 42
Frick Building(2) Square feet expiring 24,000 sf 298,000 sf
Straight-Line rent $ 664,000 $ 6,048,000
Straight-Line rent per sq. ft $ 27.67 $ 20.30
Recoveries $ 27,000 $ 114,000
Full service St-Line rent $ 691,000 $ 6,162,000
Full service St-Line rent per sq. ft $ 28.79 $ 20.68
% Full service St-Lined rent 11.21% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 3 72
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
PROPERTY 1998 1999 2000 2001
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
No. 527 Madison(2) Square feet expiring 22,000 sf 2,000 sf 10,000 sf 78,000 sf
Straight-Line rent $ 1,146,000 $ 108,000 $ 380,000 $ 4,511,000
Straight-Line rent per sq. ft $ 52.09 $ 54.00 $ 38.00 $ 57.83
Recoveries $ 146,000 $ 12,000 $ 11,000 $ 553,000
Full service St-Line rent $ 1,292,000 $ 120,000 $ 391,000 $ 5,064,000
Full service St-Line rent per sq. ft $ 58.73 $ 60.00 $ 39.10 $ 64.92
% Full service St-Lined rent 10.85% 1.01% 3.28% 42.52%
Asking market rent per sq. ft $ 53.00
No. of tenant leases expiring 4 1 2 1
191 Peachtree Street(1) Square feet expiring 20,000 sf 2,000 sf 10,000 sf 139,000 sf
Straight-Line rent $ 198,000 $ 23,000 $ 127,000 $ 2,672,000
Straight-Line rent per sq. ft $ 9.90 $ 11.50 $ 12.70 $ 19.22
Recoveries $ 130,000 $ 10,000 $ 87,000 $ 1,218,000
Full service St-Line rent $ 328,000 $ 33,000 $ 214,000 $ 3,890,000
Full service St-Line rent per sq. ft $ 16.40 $ 16.50 $ 21.40 $ 27.99
% Full service St-Lined rent 0.89% 0.09% 0.58% 10.51%
Asking market rent per sq. ft $ 26.00
No. of tenant leases expiring 6 1 5 6
Market Square(2) Square feet expiring 63,000 sf 13,000 sf 48,000 sf 91,000 sf
Straight-Line rent $ 2,084,000 $ 379,000 $ 1,414,000 $ 3,541,000
Straight-Line rent per sq. ft $ 33.08 $ 29.15 $ 29.46 $ 38.91
Recoveries $ 31,000 $ 105,000 $ 339,000 $ 607,000
Full service St-Line rent $ 2,115,000 $ 484,000 $ 1,753,000 $ 4,148,000
Full service St-Line rent per sq. ft $ 33.57 $ 37.23 $ 36.52 $ 45.58
% Full service St-Lined rent 7.51% 1.72% 6.22% 14.72%
Asking market rent per sq. ft $ 44.00
No. of tenant leases expiring 6 2 7 8
500 Boylston(1) Square feet expiring 73,000 sf 16,000 sf
Straight-Line rent $ 2,438,000 $ 300,000
Straight-Line rent per sq. ft $ 33.40 $ 18.75
Recoveries $ 896,000 $ 83,000
Full service St-Line rent $ 3,334,000 $ 383,000
Full service St-Line rent per sq. ft $ 45.67 $ 23.94
% Full service St-Lined rent 12.22% 1.40%
Asking market rent per sq. ft $ 41.00
No. of tenant leases expiring 4 3
222 Berkeley Street(1) Square feet expiring 25,000 sf 50,000 sf 70,000 sf
Straight-Line rent $ 458,000 $ 839,000 $ 1,980,000
Straight-Line rent per sq. ft $ 18.32 $ 16.78 $ 28.29
Recoveries $ 279,000 $ 627,000 $ 773,000
Full service St-Line rent $ 737,000 $ 1,466,000 $ 2,753,000
Full service St-Line rent per sq. ft $ 29.48 $ 29.32 $ 39.33
% Full service St-Lined rent 4.60% 9.15% 17.18%
Asking market rent per sq. ft $ 41.00
No. of tenant leases expiring 5 5 6
Charlotte Plaza(2) Square feet expiring 30,000 sf 60,000 sf 26,000 sf 69,000 sf
Straight-Line rent $ 495,000 $ 1,188,000 $ 421,000 $ 1,176,000
Straight-Line rent per sq. ft $ 16.50 $ 19.80 $ 16.19 $ 17.04
Recoveries $ 15,000 $ 10,000 $ 6,000 $ 12,000
Full service St-Line rent $ 510,000 $ 1,198,000 $ 427,000 $ 1,188,000
Full service St-Line rent per sq. ft $ 17.00 $ 19.97 $ 16.42 $ 17.22
% Full service St-Lined rent 4.86% 11.41% 4.07% 11.31%
Asking market rent per sq. ft $ 22.00
No. of tenant leases expiring 11 5 2 1
200 Galleria(2) Square feet expiring 41,000 sf 24,000 sf 71,000 sf 61,000 sf
Straight-Line rent $ 801,000 $ 488,000 $ 1,485,000 $ 1,279,000
Straight-Line rent per sq. ft $ 19.54 $ 20.33 $ 20.92 $ 20.97
Recoveries $ 33,000 $ 18,000 $ 59,000 $ 17,000
Full service St-Line rent $ 834,000 $ 506,000 $ 1,544,000 $ 1,296,000
Full service St-Line rent per sq. ft $ 20.34 $ 21.08 $ 21.75 $ 21.25
% Full service St-Lined rent 10.14% 6.15% 18.77% 15.75%
Asking market rent per sq. ft $ 27.00
No. of tenant leases expiring 12 4 15 12
<CAPTION>
PROPERTY 2002 2003 2004 2005
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
No. 527 Madison(2) Square feet expiring 22,000 sf 8,000 sf 6,000 sf
Straight-Line rent $ 821,000 $ 1,140,000 $ 277,000
Straight-Line rent per sq. ft $ 37.32 $ 142.50 $ 46.17
Recoveries $ 14,000 $ 6,000 $ 3,000
Full service St-Line rent $ 835,000 $ 1,146,000 $ 280,000
Full service St-Line rent per sq. ft $ 37.95 $ 143.25 $ 46.67
% Full service St-Lined rent 7.01% 9.62% 2.35%
Asking market rent per sq. ft
No. of tenant leases expiring 2 1 1
191 Peachtree Street(1) Square feet expiring 45,000 sf 3,000 sf 34,000 sf 17,000 sf
Straight-Line rent $ 682,000 $ 49,000 $ 762,000 $ 292,000
Straight-Line rent per sq. ft $ 15.16 $ 16.33 $ 22.41 $ 17.18
Recoveries $ 364,000 $ 13,000 $ 251,000 $ 143,000
Full service St-Line rent $ 1,046,000 $ 62,000 $ 1,013,000 $ 435,000
Full service St-Line rent per sq. ft $ 23.24 $ 20.67 $ 29.79 $ 25.59
% Full service St-Lined rent 2.82% 0.17% 2.74% 1.17%
Asking market rent per sq. ft
No. of tenant leases expiring 7 1 3 5
Market Square(2) Square feet expiring 10,000 sf 11,000 sf 27,000 sf 177,000 sf
Straight-Line rent $ 318,000 $ 445,000 $ 977,000 $ 6,280,000
Straight-Line rent per sq. ft $ 31.80 $ 40.45 $ 36.19 $ 35.48
Recoveries $ 12,000 $ 99,000 $ 85,000 $ 1,827,000
Full service St-Line rent $ 330,000 $ 544,000 $ 1,062,000 $ 8,107,000
Full service St-Line rent per sq. ft $ 33.00 $ 49.45 $ 39.33 $ 45.80
% Full service St-Lined rent 1.17% 1.93% 3.77% 28.77%
Asking market rent per sq. ft
No. of tenant leases expiring 4 2 3 4
500 Boylston(1) Square feet expiring 400,000 sf 10,000 sf
Straight-Line rent $ 10,682,000 $ 129,000
Straight-Line rent per sq. ft $ 26.71 $ 12.90
Recoveries $ 4,849,000 $ 121,000
Full service St-Line rent $ 15,531,000 $ 250,000
Full service St-Line rent per sq. ft $ 38.83 $ 25.00
% Full service St-Lined rent 56.92% 0.92%
Asking market rent per sq. ft
No. of tenant leases expiring 3 1
222 Berkeley Street(1) Square feet expiring 114,000 sf
Straight-Line rent $ 2,190,000
Straight-Line rent per sq. ft $ 19.21
Recoveries $ 1,392,000
Full service St-Line rent $ 3,582,000
Full service St-Line rent per sq. ft $ 31.42
% Full service St-Lined rent 22.36%
Asking market rent per sq. ft
No. of tenant leases expiring 7
Charlotte Plaza(2) Square feet expiring 50,000 sf 17,000 sf 111,000 sf 11,000 sf
Straight-Line rent $ 878,000 $ 310,000 $ 2,267,000 $ 231,000
Straight-Line rent per sq. ft $ 17.56 $ 18.24 $ 20.42 $ 21.00
Recoveries $ 19,000 $ 15,000 $ 30,000 $ --
Full service St-Line rent $ 897,000 $ 325,000 $ 2,297,000 $ 231,000
Full service St-Line rent per sq. ft $ 17.94 $ 19.12 $ 20.69 $ 21.00
% Full service St-Lined rent 8.54% 3.09% 21.87% 2.20%
Asking market rent per sq. ft
No. of tenant leases expiring 10 2 3 1
200 Galleria(2) Square feet expiring 170,000 sf 11,000 sf 3,000 sf
Straight-Line rent $ 3,335,000 $ 208,000 $ 76,000
Straight-Line rent per sq. ft $ 19.62 $ 18.91 $ 25.33
Recoveries $ 155,000 $ --
Full service St-Line rent $ 3,490,000 $ 208,000 $ 76,000
Full service St-Line rent per sq. ft $ 20.53 $ 18.91 $ 25.33
% Full service St-Lined rent 42.42% 2.53% 0.92%
Asking market rent per sq. ft
No. of tenant leases expiring 10 1 1
<CAPTION>
2008
and
PROPERTY 2006 2007 Beyond Total
- -------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
No. 527 Madison(2) Square feet expiring 27,000 sf 33,000 sf 208,000 sf
Straight-Line rent $ 1,119,000 $ 1,613,000 $ 11,115,000
Straight-Line rent per sq. ft $ 41.44 $ 48.88 $ 53.44
Recoveries $ 2,000 $ 47,000 $ 794,000
Full service St-Line rent $ 1,121,000 $ 1,660,000 $ 11,909,000
Full service St-Line rent per sq. ft $ 41.52 $ 50.30 $ 57.25
% Full service St-Lined rent 9.41% 13.94% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 4 2 18
191 Peachtree Street(1) Square feet expiring 506,000 sf 382,000 sf 1,158,000 sf
Straight-Line rent $ 13,396,000 $ 8,921,000 $ 27,122,000
Straight-Line rent per sq. ft $ 26.47 $ 23.35 $ 23.42
Recoveries $ 4,293,000 $ 3,396,000 $ 9,905,000
Full service St-Line rent $ 17,689,000 $ 12,317,000 $ 37,027,000
Full service St-Line rent per sq. ft $ 34.96 $ 32.24 $ 31.97
% Full service St-Lined rent 47.77% 33.26% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 2 1 37
Market Square(2) Square feet expiring 47,000 sf 9,000 sf 156,000 sf 652,000 sf
Straight-Line rent $ 1,695,000 $ 363,000 $ 5,144,000 $ 22,640,000
Straight-Line rent per sq. ft $ 36.06 $ 40.33 $ 32.97 $ 34.72
Recoveries $ 650,000 $ 6,000 $ 1,773,000 $ 5,534,000
Full service St-Line rent $ 2,345,000 $ 369,000 $ 6,917,000 $ 28,174,000
Full service St-Line rent per sq. ft $ 49.89 $ 41.00 $ 44.34 $ 43.21
% Full service St-Lined rent 8.32% 1.31% 24.55% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 2 3 5 46
500 Boylston(1) Square feet expiring 213,000 sf 712,000 sf
Straight-Line rent $ 5,102,000 $ 18,651,000
Straight-Line rent per sq. ft $ 23.95 $ 26.20
Recoveries $ 2,688,000 $ 8,637,000
Full service St-Line rent $ 7,790,000 $ 27,288,000
Full service St-Line rent per sq. ft $ 36.57 $ 38.33
% Full service St-Lined rent 28.55% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 1 12
222 Berkeley Street(1) Square feet expiring 252,000 sf 19,000 sf 530,000 sf
Straight-Line rent $ 3,642,000 $ 472,000 $ 9,581,000
Straight-Line rent per sq. ft $ 14.45 $ 24.84 $ 18.08
Recoveries $ 3,137,000 $ 233,000 $ 6,441,000
Full service St-Line rent $ 6,779,000 $ 705,000 $ 16,022,000
Full service St-Line rent per sq. ft $ 26.90 $ 37.11 $ 30.23
% Full service St-Lined rent 42.31% 4.40% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 3 2 28
Charlotte Plaza(2) Square feet expiring 1,000 sf 10,000 sf 189,000 sf 574,000 sf
Straight-Line rent $ 24,000 $ 214,000 $ 3,001,000 $ 10,205,000
Straight-Line rent per sq. ft $ 24.00 $ 21.40 $ 15.88 $ 17.78
Recoveries $ -- $ -- $ 191,000 $ 298,000
Full service St-Line rent $ 24,000 $ 214,000 $ 3,192,000 $ 10,503,000
Full service St-Line rent per sq. ft $ 24.00 $ 21.40 $ 16.89 $ 18.30
% Full service St-Lined rent 0.23% 2.04% 30.39% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 1 1 6 43
200 Galleria(2) Square feet expiring 11,000 sf 392,000 sf
Straight-Line rent $ 262,000 $ 7,934,000
Straight-Line rent per sq. ft $ 23.82 $ 20.24
Recoveries $ 12,000 $ 294,000
Full service St-Line rent $ 274,000 $ 8,228,000
Full service St-Line rent per sq. ft $ 24.91 $ 20.99
% Full service St-Lined rent 3.33% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 1 56
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
PROPERTY 1998 1999 2000 2001
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
11 Canal Center(2) Square feet expiring 3,000 sf 2,000 sf 2,000 sf
Straight-Line rent $ 67,000 $ 40,000 $ 37,000
Straight-Line rent per sq. ft $ 22.33 $ 20.00 $ 18.50
Recoveries $ -- $ 1,000 $ --
Full service St-Line rent $ 67,000 $ 41,000 $ 37,000
Full service St-Line rent per sq. ft $ 22.33 $ 20.50 $ 18.50
% Full service St-Lined rent 4.71% 2.88% 2.60%
Asking market rent per sq. ft $ 27.00
No. of tenant leases expiring 1 1 1
99 Canal Center(2) Square feet expiring 6,000 sf 5,000 sf 27,000 sf 61,000 sf
Straight-Line rent $ 63,000 $ 78,000 $ 567,000 $ 1,569,000
Straight-Line rent per sq. ft $ 10.50 $ 15.60 $ 21.00 $ 25.72
Recoveries $ -- $ 6,000 $ 13,000 $ 80,000
Full service St-Line rent $ 63,000 $ 84,000 $ 580,000 $ 1,649,000
Full service St-Line rent per sq. ft $ 10.50 $ 16.80 $ 21.48 $ 27.03
% Full service St-Lined rent 1.88% 2.50% 17.26% 49.08%
Asking market rent per sq. ft $ 27.00
No. of tenant leases expiring 3 2 2 5
Transpotomac Plaza(2) Square feet expiring 20,000 sf 2,000 sf 2,000 sf 15,000 sf
Straight-Line rent $ 348,000 $ 43,000 $ 33,000 $ 280,000
Straight-Line rent per sq. ft $ 17.40 $ 21.50 $ 16.50 $ 18.67
Recoveries $ 1,000 $ -- $ -- $ --
Full service St-Line rent $ 349,000 $ 43,000 $ 33,000 $ 280,000
Full service St-Line rent per sq. ft $ 17.45 $ 21.50 $ 16.50 $ 18.67
% Full service St-Lined rent 18.47% 2.28% 1.75% 14.81%
Asking market rent per sq. ft $ 24.00
No. of tenant leases expiring 3 1 1 1
60 State Street(2) Square feet expiring 26,000 sf 34,000 sf 3,000 sf 29,000 sf
Straight-Line rent $ 593,000 $ 809,000 $ 74,000 $ 872,000
Straight-Line rent per sq. ft $ 22.81 $ 23.79 $ 24.67 $ 30.07
Recoveries $ 131,000 $ 106,000 $ 5,000 $ 40,000
Full service St-Line rent $ 724,000 $ 915,000 $ 79,000 $ 912,000
Full service St-Line rent per sq. ft $ 27.85 $ 26.91 $ 26.33 $ 31.45
% Full service St-Lined rent 2.71% 3.42% 0.30% 3.41%
Asking market rent per sq. ft $ 39.00
No. of tenant leases expiring 5 9 1 3
===================================================================================================
All Properties Total Square feet expiring(3) 682,000 sf 805,000 sf 789,000 sf 820,000 sf
Straight-Line rent(4) $ 14,694,000 $ 18,033,000 $ 16,255,000 $ 22,411,000
Straight-Line rent per sq. ft $ 21.55 $ 22.40 $ 20.60 $ 27.33
Recoveries (5) $ 3,554,000 $ 3,915,000 $ 4,249,000 $ 3,871,000
Full service St-Line rent(6) $ 18,248,000 $ 21,948,000 $ 20,504,000 $ 26,282,000
Full service St-Line rent per sq. ft $ 26.76 $ 27.26 $ 25.99 $ 32.05
% Full service St-Lined rent 6.18% 7.44% 6.95% 8.91%
Asking market rent per sq. ft.(7)
No. of tenant leases expiring(8) 152 104 102 81
<CAPTION>
PROPERTY 2002 2003 2004 2005
- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
11 Canal Center(2) Square feet expiring 5,000 sf 5,000 sf
Straight-Line rent $ 120,000 $ 116,000
Straight-Line rent per sq. ft $ 24.00 $ 23.20
Recoveries $ -- $ --
Full service St-Line rent $ 120,000 $ 116,000
Full service St-Line rent per sq. ft $ 24.00 $ 23.20
% Full service St-Lined rent 8.43% 8.15%
Asking market rent per sq. ft
No. of tenant leases expiring 1 1
99 Canal Center(2) Square feet expiring 22,000 sf 16,000 sf
Straight-Line rent $ 555,000 $ 400,000
Straight-Line rent per sq. ft $ 25.23 $ 25.00
Recoveries $ 18,000 $ 11,000
Full service St-Line rent $ 573,000 $ 411,000
Full service St-Line rent per sq. ft $ 26.05 $ 25.69
% Full service St-Lined rent 17.05% 12.23%
Asking market rent per sq. ft
No. of tenant leases expiring 2 4
Transpotomac Plaza(2) Square feet expiring 26,000 sf
Straight-Line rent $ 567,000
Straight-Line rent per sq. ft $ 21.81
Recoveries $ 1,000
Full service St-Line rent $ 568,000
Full service St-Line rent per sq. ft $ 21.85
% Full service St-Lined rent 30.05%
Asking market rent per sq. ft
No. of tenant leases expiring 2
60 State Street(2) Square feet expiring 153,000 sf 90,000 sf 96,000 sf
Straight-Line rent $ 3,306,000 $ 2,061,000 $ 2,623,000
Straight-Line rent per sq. ft $ 21.61 $ 22.90 $ 27.32
Recoveries $ 1,572,000 $ 124,000 $ 182,000
Full service St-Line rent $ 4,878,000 $ 2,185,000 $ 2,805,000
Full service St-Line rent per sq. ft $ 31.88 $ 24.28 $ 29.22
% Full service St-Lined rent 18.25% 8.17% 10.49%
Asking market rent per sq. ft
No. of tenant leases expiring 6 1 8
==================================================================================================
All Properties Total Square feet expiring(3) 1,131,000 sf 1,144,000 sf 817,000 sf 239,000 sf
Straight-Line rent(4) $ 22,766,000 $ 25,007,000 $ 18,507,000 $ 7,713,000
Straight-Line rent per sq. ft $ 20.13 $ 21.86 $ 22.65 $ 32.27
Recoveries (5) $ 5,906,000 $ 9,149,000 $ 3,660,000 $ 1,997,000
Full service St-Line rent(6) $ 28,672,000 $ 34,156,000 $ 22,167,000 $ 9,710,000
Full service St-Line rent per sq. ft $ 25.35 $ 29.86 $ 27.13 $ 40.63
% Full service St-Lined rent 9.72% 11.57% 7.51% 3.29%
Asking market rent per sq. ft.(7)
No. of tenant leases expiring(8) 98 32 32 14
<CAPTION>
2008
and
PROPERTY 2006 2007 Beyond Total
- -------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
11 Canal Center(2) Square feet expiring 42,000 sf 59,000 sf
Straight-Line rent $ 1,042,000 $ 1,422,000
Straight-Line rent per sq. ft $ 24.81 $ 24.10
Recoveries $ -- $ 1,000
Full service St-Line rent $ 1,042,000 $ 1,423,000
Full service St-Line rent per sq. ft $ 24.81 $ 24.12
% Full service St-Lined rent 73.23% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 1 6
99 Canal Center(2) Square feet expiring 137,000 sf
Straight-Line rent $ 3,232,000
Straight-Line rent per sq. ft $ 23.59
Recoveries $ 128,000
Full service St-Line rent $ 3,360,000
Full service St-Line rent per sq. ft $ 24.53
% Full service St-Lined rent 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 18
Transpotomac Plaza(2) Square feet expiring 18,000 sf 9,000 sf 92,000 sf
Straight-Line rent $ 411,000 $ 206,000 $ 1,888,000
Straight-Line rent per sq. ft $ 22.83 $ 22.89 $ 20.52
Recoveries $ -- $ -- $ 2,000
Full service St-Line rent $ 411,000 $ 206,000 $ 1,890,000
Full service St-Line rent per sq. ft $ 22.83 $ 22.89 $ 20.54
% Full service St-Lined rent 21.75% 10.90% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 2 1 11
60 State Street(2) Square feet expiring 35,000 sf 32,000 sf 308,000 sf 806,000 sf
Straight-Line rent $ 1,085,000 $ 925,000 $ 7,932,000 $ 20,280,000
Straight-Line rent per sq. ft $ 31.00 $ 28.91 $ 25.75 $ 25.16
Recoveries $ 45,000 $ 320,000 $ 3,926,000 $ 6,451,000
Full service St-Line rent $ 1,130,000 $ 1,245,000 $ 11,858,000 $ 26,731,000
Full service St-Line rent per sq. ft $ 32.29 $ 38.91 $ 38.50 $ 33.17
% Full service St-Lined rent 4.23% 4.66% 44.36% 100.00%
Asking market rent per sq. ft
No. of tenant leases expiring 2 4 3 42
================================================================================================
All Properties Total Square feet expiring(3) 627,000 sf 634,000 sf 2,209,000 sf 9,897,000 sf
Straight-Line rent(4) $ 17,581,000 $ 12,654,000 $ 50,937,000 $226,558,000
Straight-Line rent per sq. ft $ 28.04 $ 19.96 $ 23.06 $ 22.89
Recoveries (5) $ 5,002,000 $ 4,272,000 $ 22,973,000 $ 68,548,000
Full service St-Line rent(6) $ 22,583,000 $ 16,926,000 $ 73,910,000 $295,106,000
Full service St-Line rent per sq. ft $ 36.02 $ 26.70 $ 33.46 $ 29.82
% Full service St-Lined rent 7.65% 5.74% 25.05% 100.00%
Asking market rent per sq. ft.(7)
No. of tenant leases expiring(8) 12 22 23 672
</TABLE>
* Includes 4,605 square feet of retail space leased to the Gap at a base
rent of $871,200 and recoveries of $5,964, totalling to a full service
rent of $877,164.
<PAGE> 27
Cornerstone Properties Inc.
Lease Expiration Schedule
Footnotes
- ----------
(1) Net Lease building.
(2) Gross Lease building.
(3) The total square footage expiring in any particular year.
(4) Straight-line rent is the average of all lease payments required to be
made through the term of the lease as required under Generally Accepted
Accounting Principles.
(5) The actual recovery of operating expenses as of December 31, 1997 in net
lease buildings and the recovery of operating expense escalations in gross
lease buildings.
(6) Full Service Straight-Line Rent is Straight-Line Rent plus recoveries.
(7) Asking market rent is the average initially quoted rent to prospective
tenants in each building. All market rents shown are on full service
basis.
(8) The number of tenant leases expiring in each year.
<PAGE> 28
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Tenant Retention
<PAGE> 29
RETENTION
The attached table sets forth the Company's tenant retention on expiring leases
since January 1, 1993. The analysis is based upon the percentage of expiring
leases in the applicable building with a tenant or subtenant being retained in
the expiring space, or an existing tenant expanding into the expiring space. A
tenants lease is added to the retention schedule at the time a lease extension
is signed with the tenant, or the tenant notifies the Company of an option being
exercised.
<TABLE>
<CAPTION>
------------------------- -------------------------- -------------------------
1993 1994 1995
------------------------- -------------------------- -------------------------
sq ft sq ft sq ft sq ft sq ft sq ft
retained expir. ret % retained expir. ret % retained expir. ret %
------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One Norwest 126,511 154,615 82% 93,962 94,981 99% 64,627 71,364 91%
Norwest 24,832 37,806 66% 16,293 26,317 62% 22,762 23,792 96%
WAMU 90,230 130,010 69% 127,334 153,645 83% 29,547 44,742 66%
125 Summer
Tower 56
One Lincoln Centre
Frick Building
527 Madison
191 Peachtree Street
500 Boylston Street
222 Berkeley Street
Charlotte Plaza
200 Galleria
11 Canal Center
99 Canal Center
TransPotomac Plaza 5
------------------------- -------------------------- -------------------------
Weighted 241,573 322,431 75% 237,589 274,943 86% 116,936 139,898 84%
<CAPTION>
------------------------- ----------------------------
1996 1997
------------------------- ----------------------------
sq ft sq ft sq ft sq ft
retained expir. ret % retained expir. ret %
------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
One Norwest 43,601 72,903 60% 266,021 313,612 85%
Norwest 4,336 9,777 44% 205,749 234,260 88%
WAMU 86,956 106,250 82% 182,194 207,738 88%
125 Summer 95,816 96,658 99% 41,252 62,218 66%
Tower 56 46,003 53,762 86% 37,027 50,679 73%
One Lincoln Centre 35,320 42,099 84%
Frick Building 99,570 115,743 86%
527 Madison 5,980 20,587 29%
191 Peachtree Street - - -
500 Boylston Street - 3,005 0%
222 Berkeley Street - - -
Charlotte Plaza 2,974 6,390 47%
200 Galleria 10,672 21,725 49%
11 Canal Center - 8,889 0%
99 Canal Center - - -
TransPotomac Plaza 5 - - -
------------------------- ----------------------------
Weighted 276,712 339,350 82% 873,113 1,046,936 83%
Five year total 82.6%
=========
</TABLE>
<PAGE> 30
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Capital Expenditures
<PAGE> 31
Incremental Revenue Generating Leasing Costs and Capital Expenditures
- --------------------------------------------------------------------------------
The following table shows Historical Incremental Revenue Generating Leasing
Costs which are the leasing costs (tenant improvements and leasing commissions)
required (i)to lease first generation space on development properties and (ii)
space which was vacant at the time of the acquisition of a property which will
increase the overall return on the property. Additionally, the table shows
Historical Incremental Revenue Generating Capital Expenditures which are Capital
Expenditures expended to increase the profitability of the building either
through the generation of higher earnings capability, or by improving building
system efficiency, thus producing lower operating expenses prospectively.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 Total
<S> <C> <C> <C> <C> <C> <C>
One Norwest Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Norwest Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Washington Mutual Tower
Total Tenant Lease Costs 404,988 643,235 -- -- -- 1,048,223
Total Square Feet Leased 69,727 146,517 -- -- -- 216,244
Total Per Square Foot 5.81 4.39 -- -- -- 4.85
Capital Expenditures 88,401 25,500 135,194 102,567 967,533 1,319,195
125 Summer Street
Total Tenant Lease Costs -- 369,727 -- -- -- 369,727
Total Square Feet Leased -- 33,136 -- -- -- 33,136
Total Per Square Foot -- 11.16 -- -- -- 11.16
Capital Expenditures -- -- -- -- -- --
Tower 56
Total Tenant Lease Costs -- 174,266 -- -- -- 174,266
Total Square Feet Leased -- 7,115 -- -- -- 7,115
Total Per Square Foot -- 24.49 -- -- -- 24.49
Capital Expenditures -- -- -- -- -- --
One Lincoln Centre
Total Tenant Lease Costs 261,538 9,706 -- -- -- 271,244
Total Square Feet Leased 11,816 1,941 -- -- -- 13,757
Total Per Square Foot 22.13 5.00 -- -- -- 19.72
Capital Expenditures 61,877 -- -- -- -- 61,877
Frick Building
Total Tenant Lease Costs 457,688 -- -- -- -- 457,688
Total Square Feet Leased 25,353 -- -- -- -- 25,353
Total Per Square Foot 18.05 -- -- -- -- 18.05
Capital Expenditures 88,073 -- -- -- -- 88,073
527 Madison Avenue
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures --
191 Peachtree Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures --
500 Boylston Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures --
</TABLE>
<PAGE> 32
Incremental Revenue Generating Leasing Costs and Capital Expenditures
- --------------------------------------------------------------------------------
The following table shows Historical Incremental Revenue Generating Leasing
Costs which are the leasing costs (tenant improvements and leasing commissions)
required (i)to lease first generation space on development properties and (ii)
space which was vacant at the time of the acquisition of a property which will
increase the overall return on the property. Additionally, the table shows
Historical Incremental Revenue Generating Capital Expenditures which are Capital
Expenditures expended to increase the profitability of the building either
through the generation of higher earnings capability, or by improving building
system efficiency, thus producing lower operating expenses prospectively.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 Total
<S> <C> <C> <C> <C> <C> <C>
222 Berkeley Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures --
Charlotte Plaza
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures --
200 Galleria
Total Tenant Lease Costs 24,132 -- -- -- -- 24,132
Total Square Feet Leased 2,139 -- -- -- -- 2,139
Total Per Square Foot 11.28 -- -- -- -- 11.28
Capital Expenditures --
11 Canal Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures 102,986
99 Canal Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures 51,419
TransPotomac Plaza 5
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures 62,579
60 State Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Minority Interest*
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Total Cornerstone Portfolio
Total Tenant Lease Costs 1,148,346 1,196,934 -- -- -- 2,345,280
Total Square Feet Leased 109,035 188,709 -- -- -- 297,744
Total Per Square Foot Leased 10.53 6.34 -- -- -- 7.88
Capital Expenditures 455,335 25,500 135,194 102,567 967,533 1,686,129
Weighted Average Square Footage Owned** 5,348,000 3,895,680 3,263,769 3,239,636 3,237,400 18,984,485
Total Per Square Foot 0.09 0.01 0.04 0.03 0.30 0.09
</TABLE>
* Adjustments for minority interests at Norwest Center (20.7%), 500 Boylston
and 222 Berkeley (8.5%) and 191 Peachtree (3%)
** Square footage owned is adjusted for minority interests as described above
<PAGE> 33
Non Incremental Revenue Generating Leasing Costs and Capital Expenditures
- --------------------------------------------------------------------------------
The following table shows Historical Non-Incremental Revenue Generating Leasing
Costs which are the leasing costs (tenant improvements and leasing commissions),
in total and on a per square foot basis, to re-lease expiring leases or renew or
extend existing leases. The Company believes that its ability to renew and
extend existing tenants at a high percentage has substantially reduced its
overall leasing costs on a per square foot basis. Additioanlly, the table shows
Historical Non-Incremental Revenue Generating Capital Expenditures which are
Capital Expenditures expended to maintain a property in a Class A manner and do
not give rise to additional earnings capacity , but rather allow the property to
maintain its competitive position within its market. The Company believes that
its focus on continuing high level of maintenance of its assets has greatly
reduced the amount of Capital Expenditures required at its buildings.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 Total
<S> <C> <C> <C> <C> <C> <C>
One Norwest Center
Total Tenant Lease Costs 1,823,664 1,009,006 141,135 540,444 754,802 4,269,051
Total Square Feet Leased 308,697 81,445 75,939 117,966 177,700 761,747
Total Per Square Foot 5.91 12.39 1.86 4.58 4.25 5.60
Capital Expenditures 102,000 -- -- -- -- 102,000
Norwest Center
Total Tenant Lease Costs 569,103 42,237 144,275 30,193 154,940 940,748
Total Square Feet Leased 212,795 6,629 24,986 26,939 38,065 309,414
Total Per Square Foot 2.67 6.37 5.77 1.12 4.07 3.04
Capital Expenditures 10,974 -- -- -- -- 10,974
Washington Mutual Tower
Total Tenant Lease Costs 1,204,606 793,361 290,971 1,065,962 1,303,860 4,658,760
Total Square Feet Leased 208,875 124,474 53,894 151,051 150,497 688,791
Total Per Square Foot 5.77 6.37 5.40 7.06 8.66 6.76
Capital Expenditures 21,922 -- -- 50,801 -- 72,723
125 Summer Street
Total Tenant Lease Costs 1,314,489 2,158,339 -- -- -- 3,472,828
Total Square Feet Leased 65,105 117,794 -- -- -- 182,899
Total Per Square Foot 20.19 18.32 -- -- -- 18.99
Capital Expenditures 53,185 518,632 -- -- -- 571,817
Tower 56
Total Tenant Lease Costs 724,025 339,124 -- -- -- 1,063,149
Total Square Feet Leased 65,283 42,203 -- -- -- 107,486
Total Per Square Foot 11.09 8.04 -- -- -- 9.89
Capital Expenditures 43,538 -- -- -- -- 43,538
One Lincoln Centre
Total Tenant Lease Costs 287,758 2,859 -- -- -- 290,617
Total Square Feet Leased 42,826 3,652 -- -- -- 46,478
Total Per Square Foot 6.72 0.78 -- -- -- 6.25
Capital Expenditures 154,646 -- -- -- -- 154,646
Frick Building
Total Tenant Lease Costs 1,170,443 -- -- -- -- 1,170,443
Total Square Feet Leased 105,609 -- -- -- -- 105,609
Total Per Square Foot 11.08 -- -- -- -- 11.08
Capital Expenditures 31,468 14,219 -- -- -- 45,687
527 Madison Avenue
Total Tenant Lease Costs 746,070 -- -- -- -- 746,070
Total Square Feet Leased 29,821 -- -- -- -- 29,821
Total Per Square Foot 25.02 -- -- -- -- 25.02
Capital Expenditures 86,562 -- -- -- -- 86,562
191 Peachtree Street
Total Tenant Lease Costs 96,023 -- -- -- -- 96,023
Total Square Feet Leased 2,597 -- -- -- -- 2,597
Total Per Square Foot 36.97 -- -- -- -- 36.97
Capital Expenditures -- -- -- -- -- --
500 Boylston Street
Total Tenant Lease Costs 34,558 -- -- -- -- 34,558
Total Square Feet Leased 3,005 -- -- -- -- 3,005
Total Per Square Foot 11.50 -- -- -- -- 11.50
Capital Expenditures -- -- -- -- -- --
</TABLE>
<PAGE> 34
Non Incremental Revenue Generating Leasing Costs and Capital Expenditures
- --------------------------------------------------------------------------------
The following table shows Historical Non-Incremental Revenue Generating Leasing
Costs which are the leasing costs (tenant improvements and leasing commissions),
in total and on a per square foot basis, to re-lease expiring leases or renew or
extend existing leases. The Company believes that its ability to renew and
extend existing tenants at a high percentage has substantially reduced its
overall leasing costs on a per square foot basis. Additioanlly, the table shows
Historical Non-Incremental Revenue Generating Capital Expenditures which are
Capital Expenditures expended to maintain a property in a Class A manner and do
not give rise to additional earnings capacity , but rather allow the property to
maintain its competitive position within its market. The Company believes that
its focus on continuing high level of maintenance of its assets has greatly
reduced the amount of Capital Expenditures required at its buildings.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993 Total
<S> <C> <C> <C> <C> <C> <C>
222 Berkeley Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Charlotte Plaza
Total Tenant Lease Costs 154,044 -- -- -- -- 154,044
Total Square Feet Leased 9,139 -- -- -- -- 9,139
Total Per Square Foot 16.86 -- -- -- -- 16.86
Capital Expenditures 15,039 -- -- -- -- 15,039
200 Galleria
Total Tenant Lease Costs 173,242 -- -- -- -- 173,242
Total Square Feet Leased 10,672 -- -- -- -- 10,672
Total Per Square Foot 16.23 -- -- -- -- 16.23
Capital Expenditures -- -- -- -- -- --
11 Canal Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
99 Canal Center
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
TransPotomac Plaza 5
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
60 State Street
Total Tenant Lease Costs -- -- -- -- -- --
Total Square Feet Leased -- -- -- -- -- --
Total Per Square Foot -- -- -- -- -- --
Capital Expenditures -- -- -- -- -- --
Minority Interest*
Total Tenant Lease Costs 123,622 9,208 30,442 5,978 30,988 200,238
Total Square Feet Leased 44,382 1,372 5,172 5,576 7,879 64,382.03
Total Per Square Foot 2.79 6.71 5.89 1.07 3.93 3.11
Capital Expenditures 2,272 -- -- -- -- 2,272
Total Cornerstone Portfolio
Total Tenant Lease Costs 8,174,403 4,335,718 545,939 1,630,621 2,182,614 16,869,295
Total Square Feet Leased 1,020,042 374,825 149,647 290,380 358,383 2,193,276
Total Per Square Foot Leased 8.01 11.57 3.65 5.62 6.09 7.69
Capital Expenditures 517,062 532,851 -- 50,801 -- 1,100,714
Weighted Average Square Footage Owned** 5,348,000 3,895,680 3,263,769 3,239,636 3,237,400 18,984,485
Total Per Square Foot 0.10 0.14 -- 0.02 -- 0.06
</TABLE>
* Adjustments for minority interests at Norwest Center (20.7%), 500 Boylston
and 222 Berkeley (8.5%) and 191 Peachtree (3%)
** Square footage owned is adjusted for minority interests as described above
<PAGE> 35
Cornerstone Properties Inc.
Supplemental Information to
Quarterly Earnings Release
o Minority Sharing in Cash Flows and
Residual Proceeds
<PAGE> 36
MINORITY SHARING IN CASH FLOWS
Five of the Company's properties are held in partnerships which allow the
Company's partners to participate in the cash flows of their respective
properties. The following discussion provides the details of partner's
participation in the cash flow of each of the respective properties.
Norwest Center
Under the partnership agreement, cash flow is used first to pay operating
and capital expenditures, then debt service on the mortgage note. The remaining
cash flow is paid first to Cornerstone, as a 7% cumulative preference return on
its capital base of $92.3 million ($6,461,000), the remaining cash flow is split
50% to Cornerstone and 50% to their partner, Sixth & Marquette Limited
Partnership ("S&M"). Should cash flow be insufficient to pay the preference
return ("Preference Deficit") it will accumulate and earn interest at 7%. Any
Preference Deficit will be paid as the first priority payment after debt
service. Cash distributions of $11.04 million during the twelve months of 1997
were split $8.75 million to Cornerstone (79.25%) and $2.29 million to S&M
(20.75%). Earnings during the year were split 79.30% to Cornerstone and 20.70%
to S&M. Sales proceeds from Norwest Center will be split as follows as of
December 31, 1997:
1) To debt $110.0 million
2) To Cornerstone 92.3 million
3) To Cornerstone 9.3 million
4) To Cornerstone 1.0 million
5) To S&M 17.9 million
6) The remaining proceeds will be split 50/50 among the two partners.
Washington Mutual Tower
Under the partnership agreement, cash flow is used first to pay operating
and capital expenditures, then debt service on the mortgage note. The remaining
cash flow is paid first to Cornerstone as a 9.53% preference return on a capital
base of $47.0 million ($4,479,000), next cash is used to pay the Preference
Deficit on the second preference return (currently $8.9 million), the next
payment is to Cornerstone on its second preference return of 8% on its capital
base of $100.0 million ($8,000,000), finally cash flow is split 50% to
Cornerstone and 50% to 1212. The cumulative Preference Deficit earns interest at
a rate of 8% until it is repaid. Cash flow of $12.2 million was distributed to
Cornerstone during 1997. Cornerstone's partner, 1212 Partnership, does not
currently share in the cash flow from Washington Mutual Tower. With regard to
the sale of the building, the Company will receive the first $155.9 million of
proceeds after repayment of the $79.1 million mortgage ($235.0 million in total
proceeds). Any proceeds above this amount will be split 50/50 with Cornerstone's
partners.
<PAGE> 37
MINORITY SHARING IN CASH FLOWS (continued)
191 Peachtree
Under the partnership agreement, cash flow is used first to pay operating
and capital expenditures, then debt service on the mortgage note. In addition,
the partner in the transaction, CH Associates, Ltd., will receive an annual
incentive distribution of $250,000 which Cornerstone expects it will receive
under the partnership agreement through February 28, 2000. Cornerstone receives
the remaining cash flow until such time as its cumulative undistributed
preferred return ($15.3 million) as of 12/31/97, has been reimbursed. Excess
cash flow will be split 80% to Cornerstone and 20% to CH Associates, Ltd. Sales
proceeds from 191 Peachtree will be split as follows as of December 31, 1997:
1) To Debt $ 1.6 million
2) To Cornerstone (as partial holder
of the debt) $161.1 million
3) To Cornerstone for its undistributed
preferred return $ 15.3 million
4) To Cornerstone for its priority capital
contribution $145.0 million
500 Boylston and 222 Berkeley Street
Distributions of cash flows and sales proceeds are shared in proportion to
Cornerstone's 91.5% partnership interest and Hines Colorado Limited's 8.5%
partnership interest.
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