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As filed with the Securities and Exchange Commission on March 29, 1996
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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): March 29, 1996
DUKE REALTY INVESTMENTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Indiana 1-9044 35-1740409
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (317) 574-3531
NOT APPLICABLE
(Former name or former address changed since last report)
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ITEM 5. OTHER EVENTS
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Duke Realty Investments, Inc. (the
"Company") is hereby filing cautionary statements identifying important
factors that could cause the Company's actual results to differ materially
from those projected in forward-looking statements of the Company made by,
or on behalf of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. The following is filed as an
Exhibit to this Report.
EXHIBIT NUMBER 99
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Duke Realty Investments, Inc.
(Registrant)
Date: March 29, 1996 By: /s/ Dennis D. Oklak
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Dennis D. Oklak
Vice President and Treasurer
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EXHIBIT 99
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Duke Realty Investments, Inc. (the "Company") desires to take advantage of
the new "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995 and is filing this Form 8-K in order to do so. The Act
became law in late December 1995 and, except for the Conference Report, no
official interpretations of the Act's provisions have been published. Many
of the important factors discussed below have been discussed in the
Company's prior SEC filings.
The Company wishes to caution readers that the following important factors,
among others, in some cases have affected, and in the future could affect,
the Company's actual results and could cause the Company's actual
consolidated results for the first quarter of 1996, and beyond, to differ
materially from those expressed in any forward-looking statements made by
or on behalf of, the Company:
* TAX RISKS
REIT CLASSIFICATION. The Company intends to continue to operate so as to
qualify as a real estate investment trust (a "REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"). Although the Company
believes that it will operate in such a manner, no assurance can be given
that the Company will be able to do so. Qualification as a REIT provides
significant tax advantages for the Company and its shareholders. However,
qualification as a REIT involves satisfaction of numerous requirements
established under highly technical and complex Code provisions of which
there are only limited judicial and administrative interpretations and
involves the determination of various factual matters and circumstances not
entirely within the Company's control. In addition, no assurance can be
given that legislation, new regulations, administrative interpretations or
court decisions will not significantly change the tax laws with respect to
qualification as a REIT or the Federal income tax consequences of such
qualification. The Company, however, is not aware of any proposal to amend
the tax laws that would significantly and adversely affect the Company's
ability to operate as a REIT.
If the Company fails to qualify as a REIT in any taxable year, it will not
be allowed a deduction for distributions to shareholders and will be
subject to Federal income tax (including any applicable alternative minimum
tax) on its taxable income at regular corporate rates. In addition, unless
entitled to relief under certain statutory provisions, the Company would
also be disqualified from treatment as a REIT for the four taxable years
following the year during which qualification was lost. Such
disqualification would reduce the net earnings of the Company available for
investment or distribution to shareholders due to the additional tax
liability of the Company for the year or years involved.
OTHER TAX LIABILITIES. Even if the Company qualifies as a REIT it may be
subject to certain Federal, state, and local taxes on its income and
property.
* GENERAL REAL ESTATE INVESTMENT RISKS
GENERAL. Investments in the Company will generally be subject to the
risks incident to the ownership and operation of real estate. These
include the risks normally associated with changes in general national
economic or regional or local market conditions, competition for
tenants, changes in market rental rates, inability to collect rent
from tenants due to
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bankruptcy or insolvency of tenants or otherwise, and the need to
periodically renovate, repair and relet spaces and to pay the cost thereof.
TENANT DEFAULTS. As substantially all of the Company's income is derived
from rental income from real property, the Company's income and funds for
distribution to shareholders would be adversely affected if a significant
number of the tenants at its properties were unable to meet their lease
obligations. In the event of a default by a lessee, the Company may
experience delays in enforcing its rights as lessor and may incur
substantial costs in protecting its investment. At any time, a tenant of
the properties may also seek protection under the bankruptcy laws, which
could result in rejection and termination of such tenant's lease and
thereby cause a reduction in the cash available for distribution by the
Company.
POSSIBLE LIABILITY RELATING TO ENVIRONMENTAL MATTERS. Under various
Federal, state and local laws, ordinances and regulations, an owner or
operator of real property may become liable for the costs of removal or
remediation of certain hazardous substances released on or in its property.
Such laws often impose such liability without regard to whether the owner
or operator knew of, or was responsible for, the release of such hazardous
substances. The presence of such substances, or the failure to properly
remediate such substances, when released, may adversely affect the owner's
ability to sell such real estate or to borrow using such real estate as
collateral. Neither the Company (since its organization in 1986) nor Duke
Associates (since its organization in 1972) has received any notice of any
noncompliance, liability or other claim by any governmental authority in
connection with any of the Company's properties or the Company's land held
for development; and the Company is not aware of any environmental
conditions with respect to any of the properties or the land that could be
material. Phase I environmental audits (which do not involve invasive
procedures such as soil sampling or ground water analysis) have been
performed for all of the properties and land by qualified independent
environmental consultants. These Phase I environmental audits did not
reveal any significant environmental liability that would have a material
adverse effect on the Company's business. No assurance can be given that
such a Phase I environmental audit reveals all potential environmental
liabilities or that no prior owner created any material environmental
condition not known to the Company or the independent consultants or that
future uses or conditions (including, without limitation, changes in
applicable environmental laws and regulations) will not result in
imposition of environmental liability.
REAL ESTATE DEVELOPMENT BUSINESS. The Company intends to continue to
engage in the real estate development business which involves significant
risks in addition to those involved in the ownership and operation of
established commercial properties, including the risks that financing may
not be available on favorable terms for development projects, that
construction may not be completed on schedule, resulting in increased debt
service expense and construction costs, and that properties may not be
leased on profitable terms. If any of the above occurred, the Company's
ability to make expected distributions to shareholders could be adversely
affected.
OTHER RELATED BUSINESSES. The Company will be subject to the risks
associated with the leasing, management, construction management and other
tenant-related service provided by the Company. These risks include the
risk that management and leasing contracts with third party owners or for
the properties in which the Company has a non-controlling interest will be
lost to competitors, that contracts will not be renewed upon expiration or
will not be renewed on terms as favorable as the current terms, and that
such activities generally may decline. The construction management
operation is subject to the various risks incident to the construction
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business. Adverse developments could impair the ability of the Company to
make expected distributions to shareholders.
LIMITED GEOGRAPHIC DIVERSIFICATION. Substantially all of the Company's
properties are located in the Midwest and most of the properties are
located in three cities, Indianapolis, Cincinnati and Columbus. As of
December 31, 1995, in excess of 80% of the Company's properties, in terms
of both dollar value of net effective rent and square footage were located
in those three cities. Although recently the Midwest has not suffered as
severe an economic downturn in its real estate markets as other regions of
the United States, there can be no assurance that economic conditions in
the Midwest will not worsen at some time in the future. In that event, the
Company might experience a greater decrease in its operating results and
funds available for distributions than would be the case if the properties
and the land were located over a wider geographic area.
ILLIQUIDITY OF REAL ESTATE INVESTMENTS. Equity real estate investments
are relatively illiquid and therefore tend to limit the ability of the
Company to vary its portfolio promptly in response to changes in economic
or other conditions. In addition, certain significant expenditures
associated with each equity investment (such as mortgage payments, real
estate taxes and maintenance costs) are generally not reduced when
circumstances cause a reduction in income from the investment. Should such
events occur, the Company's income and cash available for distribution
would be adversely affected.
* DEBT AND EQUITY FINANCING
The Company will be subject to the risks normally associated with debt or
equity financing, including the risk that the Company's net income and cash
flow will be insufficient to pay dividends at expected levels and meet
required payments of principal and interest, the risk that existing
indebtedness on the Company's properties (which in all cases will not have
been fully amortized at maturity) will not be able to be refinanced or that
the terms of such refinancing will not be as favorable as the terms of
existing indebtedness. The total debt outstanding at December 31, 1995
consists of notes totaling $454.8 million, $49.5 million of which was
floating rate debt. If principal payments due at maturity cannot be
financed, extended or paid with proceeds of other capital transactions,
such as new equity capital, the Company expects that net income and cash
flow may not be sufficient in all years to pay dividends at expected levels
and to repay all such maturing debt. If a property or properties are
mortgaged to secure payment of indebtedness and the Company is unable to
meet mortgage payments, the property could be foreclosed upon by or
otherwise transferred to the mortgagee with a consequent loss of income and
asset value to the Company.
