UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
/X/ Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 (Fee Required) for the
fiscal year ended December 31, 1997
----------------
or
/ / Transition report pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 (No Fee Required)
for the transition period from to
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Commission file number 1-9044
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DUKE REALTY INVESTMENTS, INC.
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(Exact name of registrant as specified in its charter)
Indiana 35-1740409
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8888 Keystone Crossing, Suite 1200
Indianapolis, Indiana 46240
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(Address of principal executive offices) (Zip Code)
(317) 846-4700
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(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
Title of each class: Name of each exchange on which registered:
------------------- -----------------------------------------
<S> <C>
Common Stock ($.01 par value) New York Stock Exchange
Series A Cumulative Redeemable) New York Stock Exchange
Preferred Shares ($.01 par value)
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE.
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
The aggregate market value of the voting shares of the
Registrant's outstanding common shares held by non-affiliates of
the Registrant is $1,720,038,903 based on the last reported sale
price on March 11, 1998.
The number of Common Shares outstanding as of March 11, 1998 was
77,196,875 ($.01 par value).
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference the Registrant's Proxy
Statement related to the Annual Meeting of Shareholders to be
held April 23, 1998.
<PAGE>
TABLE OF CONTENTS
Form 10-K
Item No. Page(s)
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PART I
1. Business 1 - 4
2. Properties 4 - 14
3. Legal Proceedings 14
4. Submission of Matters to a Vote of
Security Holders 14
PART II
5. Market for the Registrant's Common Stock
and Related Security Holder Matters. 15
6. Selected Financial Data 15
7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 15 - 24
8. Financial Statements and Supplementary
Data 24
9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 24
PART III
10. Directors and Executive Officers of
the Registrant 24 - 25
11. Executive Compensation 25
12. Security Ownership of Certain Beneficial
Owners and Management 25
13. Certain Relationships and Related
Transactions 25
PART IV
14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 26 - 52
Signatures 54 - 55
Exhibits 56 - 57
<PAGE>
WHEN USED IN THIS FORM 10-K REPORT, THE WORDS "BELIEVES," "EXPECTS,"
"ESTIMATES" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-
LOOKING STATEMENTS. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY.
IN PARTICULAR, AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY ARE CONTINUED QUALIFICATION AS A REAL ESTATE
INVESTMENT TRUST, GENERAL BUSINESS AND ECONOMIC CONDITIONS,
COMPETITION, INCREASES IN REAL ESTATE CONSTRUCTION COSTS, INTEREST
RATES, ACCESSIBILITY OF DEBT AND EQUITY CAPITAL MARKETS AND OTHER
RISKS INHERENT IN THE REAL ESTATE BUSINESS INCLUDING TENANT DEFAULTS,
POTENTIAL LIABILITY RELATING TO ENVIRONMENTAL MATTERS AND ILLIQUIDITY
OF REAL ESTATE INVESTMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF
THE DATE HEREOF. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY
RELEASE THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING
STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER
THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
READERS ARE ALSO ADVISED TO REFER TO THE COMPANY'S FORM 8-K REPORT AS
FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON
MARCH 26, 1996 FOR ADDITIONAL INFORMATION CONCERNING THESE
RISKS.
PART I
ITEM 1. BUSINESS
Duke Realty Investments, Inc. (the "Company") is a self-administered
and self-managed real estate investment trust ("REIT"). The Company
began operations upon completion of its initial public offering in
February 1986. In October 1993, the Company completed an additional
common stock offering and acquired the rental real estate and service
businesses of Duke Associates whose operations began in 1972. The
Company's primary business segment is the ownership and rental of
industrial, office and retail properties throughout the Midwest. As
of December 31, 1997, the Company owned interests in a diversified
portfolio of 380 rental properties comprising 45.9 million square
feet (including 25 properties and three expansions comprising 5.2
million square feet under development). Substantially all of these
properties are located in the Company's primary markets of
Indianapolis, Indiana; Cincinnati, Cleveland, and Columbus, Ohio; St.
Louis, Missouri; Minneapolis, Minnesota and Nashville, Tennessee. In
addition to its Rental Operations, the Company, through its Service
Operations provides, on a fee basis, leasing, management,
construction, development and other real estate services for
approximately 8.3 million square feet of properties owned by third
parties. See Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Item 8, "Financial
Statements and Supplementary Data" for financial information of these
industry segments. The Company's rental operations are conducted
through Duke Realty Limited Partnership (the "Operating
Partnership"). In addition, the Company conducts its service
operations through Duke Realty Services Limited Partnership and Duke
Construction Limited Partnership, in which the Company's wholly-owned
subsidiary, Duke Services, Inc., is the sole general partner. All
references to the "Company" in this Form 10-K Report include the
Company and those entities owned or controlled by the Company, unless
the context indicates otherwise. The Company has the largest
commercial real estate operations in Indianapolis and Cincinnati and
is one of the largest real estate companies in the Midwest.
The Company's headquarters and executive offices are located in
Indianapolis, Indiana. In addition, the Company has seven regional
offices located in Cincinnati, Ohio; Columbus, Ohio; Cleveland, Ohio;
Chicago, Illinois; Nashville, Tennessee; St. Louis, Missouri
and Minneapolis, Minnesota. The Company had 620 employees as of
December 31, 1997.
- 1 -
<PAGE>
BUSINESS STRATEGY
The Company's business objective is to increase its Funds From
Operations ("FFO") by (i) maintaining and increasing property
occupancy and rental rates through the aggressive management of its
portfolio of existing properties; (ii) expanding existing properties;
(iii) developing and acquiring new properties; and (iv) providing a
full line of real estate services to the Company's tenants and to
third-parties. FFO is defined by the National Association of Real
Estate Investment Trusts as net income or loss excluding gains or
losses from debt restructuring and sales of property plus
depreciation and amortization, and after adjustments for minority
interest, unconsolidated partnerships and joint ventures (adjustments
for minority interests, unconsolidated partnerships and joint
ventures are calculated to reflect FFO on the same basis). While
management believes that FFO is a relevant measure of the Company's
operating performance because it is widely used by industry analysts
to measure the operating performance of equity REITs, such amount
does not represent cash flow from operations as defined by generally
accepted accounting principles, should not be considered as an
alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash
flow needs. As a fully integrated commercial real estate firm, the
Company believes that its in-house leasing, management, development
and construction services and the Company's significant base of
commercially zoned and unencumbered land in existing business parks
should give the Company a competitive advantage in its future
development activities.
The Company believes that the analysis of real estate opportunities
and risks can be done most effectively at regional or local levels.
As a result, the Company intends to continue its emphasis on
increasing its market share and effective rents in its primary
markets within the Midwest. The Company also expects to utilize its
approximately 1,700 acres of unencumbered land and its many business
relationships with more than 3,300 commercial tenants to expand its
build-to-suit business (development projects substantially pre-leased
to a single tenant) and to pursue other development and acquisition
opportunities in its primary markets and elsewhere in the Midwest.
The Company believes that this regional focus will allow it to assess
market supply and demand for real estate more effectively as well as
to capitalize on its strong relationships with its tenant base.
The Company's policy is to seek to develop and acquire Class A
commercial properties located in markets with high growth potential
for Fortune 500 companies and other quality regional and local firms.
The Company's industrial and suburban office development focuses on
business parks and mixed-use developments suitable for development of
multiple projects on a single site where the Company can create and
control the business environment. These business parks and mixed-use
developments generally include restaurants and other amenities which
the Company believes will create an atmosphere that is particularly
efficient and desirable. The Company's retail development focuses on
community, power and neighborhood centers in its existing markets. As
a fully integrated real estate company, the Company is able to arrange
for or provide to its industrial, office and retail tenants not only
well located and well maintained facilities, but also additional
services such as build-to-suit construction, tenant finish
construction, expansion flexibility and advertising and marketing
services.
Consistent with its business strategy of expanding in attractive
Midwestern markets, the Company carefully analyzed the real estate
investment potential of several major Midwestern metropolitan areas.
Based on this analysis, management concluded that the Minneapolis
and Chicago markets offer attractive real estate investment
returns in the industrial and suburban office markets based on
the following factors: (i) fragmented competition; (ii)
strong real estate fundamentals; and (iii) favorable economic
conditions.
- 2 -
<PAGE>
In October 1997, the Company acquired a 3.2 million gross square
foot industrial and suburban office portfolio and the operating
personnel of an independent real estate developer and operator in
Minneapolis. Also in 1997, the Company established a regional
office in Chicago and acquired 995,000 square feet of suburban
office properties and 160 acres of land for the future development
of office and industrial properties. In addition to these major
transactions, the Company significantly expanded its presence in St.
Louis through the acquisition of a 982,000 gross square foot
primarily suburban office portfolio and the operating personnel of an
independent real estate developer and operator.
All of the Company's properties are located in areas that include
competitive properties. Such properties are generally owned by
institutional investors, other REITs or local real estate operators;
however, no single competitor or small group of competitors is
dominant in the Company's markets. The supply and demand of similar
available rental properties may affect the rental rates the Company
will receive on its properties. Based upon the current occupancy
rates in Company and competitive properties, the Company believes
there will not be significant competitive pressure to lower rental
rates in the near future.
FINANCING STRATEGY
The Company seeks to maintain a well-balanced, conservative and
flexible capital structure by: (i) currently targeting a ratio of
long-term debt to total market capitalization in the range of 25% to
40%; (ii) extending and sequencing the maturity dates of its debt;
(iii) borrowing primarily at fixed rates; (iv) generally pursuing
current and future long-term debt financings and refinancings on an
unsecured basis; and (v) maintaining conservative debt service and
fixed charge coverage ratios. Management believes that these
strategies have enabled and should continue to enable the Company to
access the debt and equity capital markets for their long-term
requirements such as debt refinancings and financing development and
acquisitions of additional rental properties. The Company has raised
approximately $1.1 billion through public debt and equity offerings
during the three years ended December 31, 1997. Based on these
offerings, the Company has demonstrated its abilities to access the
public markets as a source of capital to fund future growth. In
addition, as discussed under Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the
Company has a $200 million unsecured line of credit available for
short-term fundings of development and acquisition of additional
rental properties. The Company's debt to total market capitalization
ratio (total market capitalization is defined as the total market
value of all outstanding Common and Preferred Shares and units of
limited partnership interest ("Units") in the Operating Partnership
plus outstanding indebtedness) at March 11, 1998 was 25.79%. The
Company's ratio of earnings to debt service and ratio of earnings to
fixed charges for the year ended December 31, 1997 were 2.62x and
2.12x, respectively. In computing the ratio of earnings to debt
service, earnings have been calculated by adding debt service to
income before gains or losses on property sales and minority interest
in earnings of the Operating Partnership. Debt service consists of
interest expense and recurring principal amortization (excluding
maturities) and excludes amortization of debt issuance costs. In
computing the ratio of earnings to fixed charges, earnings have been
calculated by adding fixed charges, excluding capitalized interest,
to income before gains or losses on property sales and minority
interest in earnings of the Operating Partnership. Fixed charges
consist of interest costs, whether expensed or capitalized, the
interest component of rental expense, amortization of debt issuance
costs and preferred stock dividend requirements. Management believes
these measures to be consistent with its financing strategy.
OTHER
The Company's operations are not dependent on a single or few
customers as no single customer accounts for more than 2% of the
Company's total revenue. The Company's operations are not subject to
any
- 3 -
<PAGE>
significant seasonal fluctuations. The Company believes it is in
compliance with environmental regulations and does not anticipate
material effects of continued compliance.
For additional information regarding the Company's investments and
operations, see Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and Item 8,
"Financial Statements and Supplementary Data." For additional
information about the Company's business segments, see Item 8,
"Financial Statements and Supplementary Data."
ITEM 2. PROPERTIES
As of December 31, 1997, the Company owns an interest in a
diversified portfolio of 380 commercial properties encompassing
approximately 45.9 million net rentable square feet (including 25
properties and three expansions comprising 5.2 million square feet
under development) located primarily in five states and approximately
1,700 acres of land for future development. The properties are
described on the following pages.
- 4 -
<PAGE>
<TABLE>
<CAPTION>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- --------- ------- -------- ------------
IN-SERVICE
----------
INDUSTRIAL
----------
<S> <C> <C> <C> <C> <C> <C>
Indianapolis,
Indiana
PARK 100 BUSINESS
PARK
Building 38 Fee 100% 1978 1.11 6,000 100%
Building 48 Fee 50%[1] 1984 8.63 127,410 100%
Building 49 Fee 50%[1] 1982 4.55 89,600 100%
Building 50 Fee 50%[1] 1982 4.09 51,200 100%
Building 52 Fee 50%[1] 1983 2.70 34,800 100%
Building 53 Fee 50%[1] 1984 4.23 76,800 100%
Building 54 Fee 50%[1] 1984 4.42 76,800 100%
Building 55 Fee 50%[1] 1984 3.83 43,200 85%
Building 56 Fee 50%[1] 1984 15.94 300,000 0%
Building 57 Fee 50%[1] 1984 7.70 128,800 100%
Building 58 Fee 50%[1] 1984 8.03 128,800 100%
Building 59 Fee 50%[1] 1985 5.14 83,200 100%
Building 60 Fee 50%[1] 1985 4.78 83,200 85%
Building 62 Fee 50%[1] 1986 7.70 128,800 100%
Building 67 Fee 50%[1] 1987 4.23 72,350 100%
Building 68 Fee 50%[1] 1987 4.23 72,360 100%
Building 71 Fee 50%[1] 1987 9.06 193,400 100%
Building 74 Fee 10%-50%[2] 1988 12.41 257,400 100%
Building 76 Fee 10%-50%[2] 1988 5.10 81,695 48%
Building 78 Fee 10%-50%[2] 1988 21.80 512,777 100%
Building 79 Fee 100% 1988 4.47 66,000 100%
Building 80 Fee 100% 1988 4.47 66,000 100%
Building 83 Fee 100% 1989 5.34 96,000 35%
Building 84 Fee 100% 1989 5.34 96,000 73%
Building 85 Fee 10%-50%[2] 1989 9.70 180,100 100%
Building 89 Fee 10%-50%[2] 1990 11.28 311,600 100%
Building 91 Fee 10%-50%[2] 1990/1996 7.53 196,800 85%
Building 92 Fee 10%-50%[2] 1991 4.38 45,917 100%
Building 95 Fee 100% 1993 15.23 336,000 100%
Building 96 Fee 100% 1994/1997 [3] 27.69 737,850 100%
Building 97 Fee 100% 1994 13.38 280,800 94%
Building 98 Fee 100% 1968/1995 37.34 508,306 100%
Building 99 Fee 50%[4] 1994 18.00 364,800 100%
Building 100 Fee 100% 1995 7.00 117,500 100%
Building 101 Fee 50%[1] 1983 4.37 45,000 100%
Building 105 Fee 50%[1] 1983 4.64 41,400 100%
Building 106 Fee 50%[1] 1978 4.64 41,400 100%
Building 107 Fee 100% 1984 3.56 58,783 45%
Building 108 Fee 50%[1] 1983 6.36 60,300 100%
Building 109 Fee 100% 1985 4.80 46,000 94%
Building 113 Fee 50%[1] 1987 6.20 72,000 82%
Building 114 Fee 50%[1] 1987 6.20 56,700 100%
Building 117 Fee 10%-50%[2] 1988 13.36 135,600 90%
Building 120 Fee 10%-50%[2] 1989 4.54 54,982 86%
Building 122 Fee 100% 1990 6.17 73,274 100%
Building 125 Fee 100% 1994/1996 13.81 195,080 100%
Building 126 Fee 100% 1984 4.04 60,100 100%
Building 127 Fee 100% 1995 6.50 93,600 100%
Building 128 Fee 100% 1996 14.40 322,000 100%
Building 129 Fee 100% 1996 16.00 320,000 100%
Building 130 Fee 100% 1996 9.70 152,000 92%
Building 131 Fee 100% 1997 21.00 415,680 100%
Building 133 Fee 100% 1997 1.30 20,530 100%
Georgetown
Centre Bldg. 1 Fee 100% 1987 5.85 111,883 56%
Georgetown
Centre Bldg. 2 Fee 100% 1987 5.81 72,120 95%
Georgetown
Centre Bldg. 3 Fee 100% 1987 5.10 45,536 57%
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<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- -------- ------- ------ ------------
PARK FLETCHER
Building 2 Fee 50%[1] 1970 1.31 20,160 100%
Building 4 Fee 50%[1] 1974 1.73 23,000 0%
Building 6 Fee 50%[1] 1971 3.13 36,180 100%
Building 7 Fee 50%[1] 1974 3.00 41,900 100%
Building 8 Fee 50%[1] 1974 2.11 18,000 100%
Building 14 Fee 100% 1978 1.39 19,480 100%
Building 15 Fee 50%[1] 1979 5.74 72,800 100%
Building 16 Fee 50%[1] 1979 3.17 35,200 100%
Building 18 Fee 50%[1] 1980 5.52 43,950 100%
Building 21 Fee 50%[1] 1983 2.95 37,224 79%
Building 22 Fee 50%[1] 1983 2.96 48,635 58%
Building 26 Fee 50%[1] 1983 2.91 28,340 100%
Building 27 Fee 25%[1] 1985 3.01 39,178 75%
Building 28 Fee 25%[1] 1985 7.22 93,880 100%
Building 29 Fee 50%[1] 1987 7.16 92,044 100%
Building 30 Fee 50%[1] 1989 5.93 78,568 100%
Building 31 Fee 50%[1] 1990 2.62 33,029 100%
Building 32 Fee 50%[1] 1990 5.43 67,297 100%
Building 33 Fee 50%[1] 1997 7.50 112,710 100%
Building 34 Fee 50%[1] 1997 13.00 230,400 100%
SHADELAND STATION
Buildings 204
& 205 Fee 100% 1984 4.09 48,600 100%
HUNTER CREEK
BUSINESS PARK
Building 1 Fee 10%-50%[2] 1989 5.97 86,500 100%
Building 2 Fee 10%-50%[2] 1989 8.86 202,560 83%
HILLSDALE TECHNECTR.
Building 1 Fee 50%[1] 1986 9.16 73,436 91%
Building 2 Fee 50%[1] 1986 5.50 83,600 100%
Building 3 Fee 50%[1] 1987 5.50 84,050 100%
Building 4 Fee 100% 1987 7.85 73,874 100%
Building 5 Fee 100% 1987 5.44 67,500 93%
Building 6 Fee 100% 1987 4.25 64,000 100%
Franklin Road 1962
Bus.Ctr. Fee 100% 1971,1974 [5] 18.65 338,925 82%
Palomar Bus.
Ctr. Fee 100% 1973 4.50 99,350 100%
Nampac Fee 100% 1974 6.20 83,200 100%
NORTH AIRPORT PARK
Thomson Consumer
Electronics Fee 50%[6] 1996 52.00 599,040 100%
Building 2 Fee 100% 1997 22.50 377,280 100%
6060 Guion Rd. Fee 100% 1968/1974/1977 14.05 179,203 0%
4750 Kentucky Ave.Fee 100% 1974 11.01 125,000 100%
4316 W. Minnesota Fee 100% 1970 10.40 121,465 100%
CARMEL, INDIANA
HAMILTON CROSSING
Building 1 Fee 100% 1989 4.70 51,825 91%
GREENWOOD, INDIANA
SOUTH PARK BUS.CTR.
Building 2 Fee 100% 1990 7.10 86,806 74%
LEBANON, INDIANA
LEBANON BUS.PARK
American Air
Filter Fee 100% 1996 10.40 153,600 100%
Little, Brown
& Co. Fee 50%[6] 1996 31.60 500,455 100%
Purity Wholesale Fee 100% 1997 32.60 556,248 100%
Pamida Fee 100% 1997 14.90 200,000 100%
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<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- -------- ------- ------- ------------
CINCINNATI, OHIO
PARK 50 TECHNECTR.
Building 20 Fee 100% 1987 8.37 96,000 100%
Building 25 Fee 100% 1989 12.20 78,328 81%
GOVERNOR'S POINTE
4700 Building Fee 100% 1987 5.51 76,400 100%
4800 Building Fee 100% 1989 7.07 80,000 71%
4900 Building Fee 100% 1987 9.41 77,652 100%
WORLD PARK
Building 5 Fee 100% 1987 5.00 59,700 100%
Building 6 Fee 100% 1987 7.26 92,400 100%
Building 7 Fee 100% 1987 8.63 96,000 100%
Building 8 Fee 100% 1989 14.60 192,000 97%
Building 9 Fee 100% 1989 4.47 58,800 100%
Building 11 Fee 100% 1989 8.98 96,000 100%
Building 14 Fee 100% 1989 8.91 166,400 100%
Building 15 Fee 100% 1990 6.50 93,600 100%
Building 16 Fee 100% 1989 7.00 93,600 100%
MicroAge Fee 50%[1] 1994 15.10 304,000 100%
Building 18 Fee 100% 1997 16.90 252,000 100%
ENTERPRISE
BUS.PARK
Building 1 Fee 100% 1990 7.52 87,400 91%
Building 2 Fee 100% 1990 7.52 84,940 100%
Building A Fee 100% 1987 2.65 20,888 100%
Building B Fee 100% 1988 2.65 34,940 94%
Building D Fee 100% 1989 5.40 60,322 93%
FAIRFIELD BUS.CTR.
Building D Fee 100% 1990 3.23 40,223 88%
Building E Fee 100% 1990 6.07 75,600 100%
KENTUCKY DRIVE
7910 Kentucky
Dr. Fee 100% 1980 3.78 38,329 100%
7920 Kentucky
Dr. Fee 100% 1974 9.33 93,945 100%
OTHER INDUST. -
CINCINNATI
U.S. Post
Office Bldg. Fee 40%[7] 1992 2.60 57,886 100%
University
Moving Fee 100% 1991 4.95 70,000 100%
Creek Road
Bldg.I Fee 100% 1971 2.05 38,715 100%
Creek Road
Bldg.II Fee 100% 1971 2.63 53,210 100%
Cornell Commerce
Ctr. Fee 100% 1989 9.91 167,695 94%
Mosteller Dist.
Ctr. Fee 100% 1957 [8] 25.80 357,796 100%
Mosteller Dist.
Ctr.II Fee 100% 1997 12.20 261,440 45%
Perimeter Park
Bldg.A Fee 100% 1991 2.92 28,100 100%
Perimeter Park
Bldg.B Fee 100% 1991 3.84 30,000 60%
COLUMBUS, OHIO
Pet Foods Bldg. Fee 100% 1993/1995 16.22 276,000 100%
MBM Bldg. Fee 100% 1978 3.98 83,000 100%
Sun TV Fee 100% 1995 33.42 793,807 100%
SOUTH POINTE
BUS. CTR.
South Pointe A Fee 50% 1995 14.06 293,824 100%
South Pointe B Fee 50% 1996 13.16 307,200 100%
South Pointe C Fee 50% 1996 12.57 322,000 78%
SouthPointe
Bldg.D Fee 100% 1997 6.55 116,520 35%
SouthPointe
Bldg.E Fee 100% 1997 6.55 82,520 0%
HEBRON, KENTUCKY
SOUTHPARK BUS.CTR.
Bldg. 1 Fee 100% 1990 7.90 96,000 100%
Bldg. 3 Fee 100% 1991 10.79 192,000 100%
CR Services Fee 100% 1994 22.50 214,840 100%
Redken Labs Fee 100% 1994 28.79 166,400 100%
Skyport Bldg.I Fee 100% 1997 15.10 316,800 100%
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<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- -------- ------- -------- ------------
LOUISVILLE,
KENTUCKY
Dayco Fee 50%[1] 1995 30.00 282,539 100%
FLORENCE,
KENTUCKY
Empire
Commerce Ctr. Fee 100% 1973/1980 11.62 148,445 100%
DECATUR,
ILLINOIS
PARK 101
BUS. CTR.
Building 3 Fee 100% 1979 5.76 75,600 82%
Building 8 Fee 100% 1980 3.16 50,400 77%
NASHVILLE,
TENNESSEE
HAYWOOD OAKS
TECHNECTR.
Building 2 Fee 100% 1988 2.94 50,400 100%
Building 3 Fee 100% 1988 2.94 52,800 100%
Building 4 Fee 100% 1988 5.23 46,800 100%
Building 5 Fee 100% 1988 5.23 61,171 100%
Building 6 Fee 100% 1989 10.53 113,400 100%
Building 7 Fee 100% 1995 8.24 66,873 100%
Building 8 Fee 100% 1997 15.44 71,615 100%
Greenbriar
Bus.Park Fee 100% 1986 10.73 134,759 98%
Keebler Bldg. Fee 100% 1985 4.39 36,150 100%
MILWAUKEE,
WISCONSIN
S.F. Music
Box Bldg. Fee 33.33%[9] 1993 8.90 153,600 100%
ST. LOUIS,
MISSOURI
I-70 Ctr. Fee 100% 1986 4.57 76,240 100%
1920 Beltway Fee 100% 1986 4.44 70,000 100%
Alfa Laval Fee 100% 1996 12.76 129,500 100%
EARTH CITY
Dukeport I Fee 100% 1996 21.24 403,200 100%
Dukeport II Fee 100% 1997 14.70 244,800 65%
RIVERPORT
Scripts Bldg. Fee 100% 1992 10.81 119,000 100%
Riverport Dist. Fee 100% 1990 5.96 100,000 100%
Shultz Bldg. Fee 100% 1989 3.36 45,200 100%
Southport I Fee 100% 1977 1.36 20,810 100%
Southport II Fee 100% 1978 1.53 22,400 100%
Southport Comm.
Ctr. Fee 100% 1978 2.65 34,873 99%
CLEVELAND, OHIO
Johnson Controls Fee 100% 1972 14.56 85,410 100%
Dyment Fee 100% 1988 12.00 246,140 100%
Mr. Coffee Fee 100% 1997 35.00 458,000 100%
SOLON INDUST.PARK
30600 Carter Fee 100% 1971 11.30 190,188 90%
6230 Cochran Fee 100% 1977 7.20 100,365 84%
31900 Solon-Front Fee 100% 1974 8.30 85,000 100%
5821 Solon Fee 100% 1970 5.80 66,638 100%
6161 Cochran Fee 100% 1978 6.10 62,400 85%
5901 Harper Fee 100% 1970 4.10 54,719 70%
29125 Solon Fee 100% 1980 5.90 47,329 100%
6661 Cochran Fee 100% 1979 4.70 39,000 100%
6521 Davis Fee 100% 1979 3.20 21,600 100%
31900 Solon-Rear Fee 100% 1982 5.30 7,193 100%
MINNEAPOLIS,
MINNESOTA
Enterprise
Indust.C Fee 100% 1979 10.88 165,755 76%
Apollo Dist.Ctr. Fee 100% 1997 11.05 168,480 0%
Sibley Indust.
Ctr. Fee 100% 1973 2.88 54,612 100%
Sibley Indust.
Ctr. Fee 100% 1972 2.58 37,800 100%
Sibley Indust.
Ctr. Fee 100% 1968 4.10 32,810 39%
Yankee Place Fee 100% 1986 19.03 221,075 90%
- 8 -
<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- --------- ------- ------- -----------
Larc Indust.
Park I Fee 100% 1977 4.59 67,200 85%
Larc Indust.
Park II Fee 100% 1976 3.70 54,000 99%
Larc Indust.
Park III Fee 100% 1980 2.38 30,800 100%
Larc Indust.
Park IV Fee 100% 1980 1.06 13,800 41%
Larc Indust.
Park V Fee 100% 1980 1.54 22,880 100%
Larc Indust.
Park VI Fee 100% 1975 3.91 63,600 81%
Larc Indust.
Park VII Fee 100% 1973 2.65 41,088 100%
Hampshire Dist.
Ctr. Fee 100% 1979 9.26 159,200 100%
Hampshire Dist.
Ctr. Fee 100% 1979 9.40 157,000 100%
Penn Corporate
Bldg. Fee 100% 1977 2.08 40,844 100%
Bloomington
Indust. Fee 100% 1963 7.40 100,852 78%
Edina Inter-
change I Fee 100% 1995 4.73 73,809 95%
Edina Inter-
change II Fee 100% 1980 3.46 55,006 100%
Edina Inter-
change III Fee 100% 1981 6.39 62,784 100%
Edina Inter-
change IV Fee 100% 1974 1.99 22,440 75%
Edina Inter-
change V Fee 100% 1974 4.92 139,101 100%
Pakwa Bus.
Park I Fee 100% 1979 1.67 38,196 100%
Pakwa Bus.
Park II Fee 100% 1979 1.41 21,254 100%
Pakwa Bus.
Park III Fee 100% 1979 1.32 19,978 89%
7540 Bush
Lake Rd. Fee 100% 1967 4.74 72,300 100%
Cahill Bus.Ctr. Fee 100% 1980 3.90 60,082 100%
Encore Park Fee 100% 1977 14.50 126,858 100%
Johnson Bldg. Fee 100% 1974 2.09 62,718 97%
Cornerstone Bus. Fee 100% 1996 13.49 222,494 100%
Westside Bus.Park Fee 100% 1987 9.10 114,800 100%
Oxford Indust. Fee 100% 1971 1.23 16,736 0%
Cedar Lake
Bus.Ctr. Fee 100% 1976 3.05 50,400 100%
Medicine Lake
Indust. Fee 100% 1970 16.37 222,893 100%
801 Zane Ave.N. Fee 100% 1989 4.93 84,219 100%
Decatur Bus.Ctr. Fee 100% 1982 3.96 44,279 100%
Sandburg
Indust.Ctr. Fee 100% 1973 5.68 94,612 100%
Crystal
Indust.Ctr. Fee 100% 1974 3.23 72,000 96%
Bass Lake Bus.Ctr.Fee 100% 1981 5.33 47,368 100%
OFFICE
-------
INDIANAPOLIS,
INDIANA
PARK 100 BUS.
PARK
Building 34 Fee 100% 1979 2.00 22,272 97%
Building 116 Fee 100% 1988 5.28 35,700 84%
Building 118 Fee 100% 1988 6.50 35,700 100%
Building 119 Fee 100% 1989 6.50 53,300 100%
CopyRite Bldg. Fee 50%[4] 1992 3.88 48,000 100%
Building 132 Fee 100% 1997 4.40 27,600 43%
WOODFIELD AT
THE CROSSING
Two Woodfield
Crsg. Fee 100% 1987 7.50 117,818 84%
Three Woodfield
Crsg. Fee 100% 1989 13.30 259,777 98%
PARKWOOD CROSSING
One Parkwood Fee 100% 1989 5.93 108,281 100%
Two Parkwood Fee 100% 1996 5.96 93,950 100%
Three Parkwood Fee 100% 1997 6.24 121,246 89%
SHADELAND STATION
7240 Shadeland
Sta. Fee 66.67%[10] 1985 2.14 45,585 82%
7330 Shadeland
Sta. Fee 100% 1988 4.50 42,619 87%
7340 Shadeland
Sta. Fee 100% 1989 2.50 32,235 77%
7351 Shadeland
Sta. Fee 100% 1983 2.14 27,740 92%
7369 Shadeland
Sta. Fee 100% 1989 2.20 15,551 100%
7400 Shadeland
Sta. Fee 100% 1990 2.80 49,544 100%
KEYSTONE AT
THE CROSSING
F.C. Tucker Fee/Ground
Bldg. Lease [11] 100% 1978 N/A 4,840 100%
3520 Commerce Ground/Bldg.
Crsg. Lease [12] 100% 1976 2.69 30,000 0%
8465 Keystone Fee 100% 1983 1.31 28,298 99%
8555 Keystone Fee/Ground
Lease [11] 100% 1985 N/A 75,545 94%
Community MOB Fee 100% 1995 4.00 39,205 100%
- 9 -
<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- --------- ------- ------- -----------
HAMILTON
CROSSING
Hamilton Crsg.
Bldg. 2 Fee 100% 1997 5.10 32,800 77%
GREENWOOD,
INDIANA
SOUTH PARK
BUS. CTR.
Building 1 Fee 100% 1989 5.40 39,715 96%
Building 3 Fee 100% 1990 3.25 35,900 100%
St. Francis Fee/Ground
Medical Bldg. Lease[13] 100% 1995 N/A 95,579 95%
CINCINNATI, OHIO
GOVERNOR'S HILL
8600 Governor's
Hill Fee 100% 1986 10.79 200,584 97%
8700 Governor's
Hill Fee 100% 1985 4.98 58,617 100%
8790 Governor's
Hill Fee 100% 1985 5.00 58,177 95%
8800 Governor's
Hill Fee 100% 1985 2.13 28,700 100%
GOVERNOR'S POINTE
4605 Governor's
Pte. Fee 100% 1990 8.00 178,306 100%
4705 Governor's
Pte. Fee 100% 1988 7.50 140,984 100%
4770 Governor's
Pte. Fee 100% 1986 4.50 76,037 72%
Anthem Prescrip.
Mgmt. Fee 100% 1997 5.00 78,240 100%
Gov. Pte.4660
Bldg. Fee 100% 1997 4.65 76,465 91%
PARK 50 TECHNECTR.
SDRC Building Fee 100% 1991 13.00 221,215 100%
Building 17 Fee 100% 1985 8.19 70,644 97%
DOWNTOWN CINCINNATI
311 Elm Street Grnd/Bldg.
Lse [14] 100% 1902/1986 [15] N/A 90,127 100%
312 Plum Street Fee 100% 1987 0.69 230,489 89%
312 Elm Street Fee 100% 1992 1.10 378,786 96%
KENWOOD
Kenwood Commons
Bldg.I Fee 50%[16] 1986 2.09 46,145 100%
Kenwood Commons
Bldg.II Fee 50%[16] 1986 2.09 46,434 96%
Ohio National Fee 100% 1996 9.00 212,125 100%
Kenwood Executive
Ctr. Fee 100% 1981 3.46 49,984 97%
TRI-COUNTY
Triangle Off.
Park Fee 100% 1965/1985[17] 15.64 172,650 92%
Tri-County Off. 1971, 1973
Park Fee 100% 1982 [18] 11.27 102,166 88%
Executive Plaza I Fee 100% 1980 5.83 87,912 97%
Executive
Plaza II Fee 100% 1981 5.02 88,885 100%
BLUE ASH
West Lake Ctr. Fee 100% 1981 11.76 179,850 98%
Lake Forest Pl. Fee 100% 1985 13.50 217,264 94%
Huntington Bank
Bldg. Fee 100% 1986 0.94 3,235 100%
Blue Ash Off.
Ctr. VI Fee 100% 1989 2.96 35,603 90%
OTHER OFFICE -
CINCINNATI
Fidelity Dr.
Bldg. Fee 100% 1972 8.34 38,000 100%
Franciscan Fee/Ground
Health Sys. Lease[19] 100% 1996 N/A 36,634 100%
One Ashview Pl. Fee 100% 1989 6.88 120,853 100%
Remington Park
Bldg.A Fee 100% 1982 3.20 38,236 100%
Remington Park
Bldg.B Fee 100% 1982 3.20 38,320 99%
COLUMBUS, OHIO
TUTTLE CROSSING
4600 Lakehurst
(Sterling 1) Fee 100% 1990 7.66 106,300 100%
4650 Lakehurst
(Litel) Fee 100% 1990 13.00 164,639 100%
5555 ParkCtr.
(Xerox) Fee 100% 1992 6.09 83,971 94%
4700 Lakehurst
(Indiana Ins.) Fee 100% 1994 3.86 49,600 100%
Sterling 2 Fee 100% 1995 3.33 57,660 100%
John Alden Fee 100% 1995 6.51 101,112 76%
Cardinal Health Fee 100% 1995 10.95 132,854 100%
Nationwide Fee 100% 1996 17.90 315,102 100%
Sterling 3 Fee 100% 1996 3.56 64,500 100%
- 10 -
<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- --------- ------- ------- -----------
Parkwood Place Fee 100% 1997 9.08 156,000 100%
MetroCtr. III Fee 100% 1983 5.91 73,757 100%
Veterans Admin.
Clinic Fee 100% 1994 4.98 118,000 100%
Scioto Corp.Ctr. Fee 100% 1987 7.58 57,251 98%
CompManagement Fee 100% 1997 5.60 68,700 100%
CLEVELAND, OHIO
Rock Run - N. Fee 100% 1984 5.00 62,565 99%
Rock Run - Ctr. Fee 100% 1985 5.00 61,099 93%
Rock Run - S. Fee 100% 1986 5.00 62,989 84%
Freedom Square I Fee 100% 1980 2.59 40,208 96%
Freedom Square II Fee 100% 1987 7.41 116,665 92%
Corporate Plaza I Fee 100% 1989 6.10 114,028 99%
Corporate Plz. II Fee 100% 1991 4.90 103,834 90%
One Corp. Exch. Fee 100% 1989 5.30 88,376 91%
Corporate Ctr.I Fee 100% 1985 5.33 99,260 99%
Corporate Ctr.II Fee 100% 1987 5.32 104,402 82%
Corporate Place Fee 100% 1988 4.50 84,768 98%
Corporate Circle Fee 100% 1983 6.65 120,444 99%
Freedom Sq. III Fee 100% 1997 2.00 71,025 87%
6111 Oak Tree Fee 100% 1979-1995 5.00 70,906 83%
Landerbrook Fee 100% 1997 8.00 110,148 72%
ST. LOUIS,
MISSOURI
Laumeier I Fee 100% 1987 4.26 113,852 100%
Laumeier II Fee 100% 1988 4.64 112,477 100%
Westview Place Fee 100% 1988 2.69 114,722 97%
Westmark Fee 100% 1987 6.95 123,889 100%
EARTH CITY
3300 Pointe 70 Fee 100% 1989 6.61 103,549 99%
3322 NGIC Fee 100% 1987 6.61 112,000 100%
Riverport Tower Fee 100% 1991 317,891 100%
MARYVILLE CTR.
500 Maryville Ctr.Fee 100% 1984 9.27 165,544 100%
530 Maryville Ctr.Fee 100% 1990 5.31 107,957 98%
550 Maryville Ctr.Fee 100% 1988 4.55 97,109 96%
635 Maryville Ctr.Fee 100% 1987 8.78 148,307 97%
655 Maryville Ctr.Fee 100% 1994 6.26 90,499 100%
540 Maryville Ctr.Fee 100% 1990 5.23 107,973 98%
Twin Oaks Fee 100% 1980 5.91 85,066 98%
625 Maryville Ctr.Fee 50% 1994 6.26 101,576 100%
CHICAGO, ILLINOIS
Central Park
of Lisle Fee 50% [20] 1990 8.88 345,200 93%
Executive Towers
I Fee 100% 1983 6.33 203,302 96%
Executive Towers
II Fee 100% 1984 6.33 224,140 99%
Executive Towers
III Fee 100% 1987 6.33 222,400 100%
MINNEAPOLIS,
MINNESOTA
10801 Red Cr.Dr. Fee 100% 1977 4.00 60,078 100%
Medicine Lake
Prof. Bldg. Fee 100% 1970 1.54 8,100 100%
RETAIL
------
INDIANAPOLIS,
INDIANA
PARK 100
BUS. PARK
Building 32 Fee 100% 1978 0.82 14,504 58%
Building 121 Fee 100% 1989 2.27 19,716 76%
CASTLETON CORNER
Michael's Plaza Fee 100% 1984 4.50 46,374 100%
Cub Plaza Fee 100% 1986 6.83 60,136 100%
FORT WAYNE, INDIANA
Coldwater Crsg. Fee 100% 1990 35.38 246,365 89%
- 11 -
<PAGE>
Net Percent
Year Land Rentable Occupied at
Name/ Ownership Company's Constd/ Area Area December 31,
Location Interest Ownership Expanded (Acres) (sq.ft.) 1997
------------ --------- --------- --------- ------- -------- ------------
GREENWOOD, INDIANA
GREENWOOD CORNER
First Indiana
Bank Branch Fee 100% 1988 1.00 2,400 100%
Greenwood Corner
Shoppes Fee 100% 1986 7.45 50,840 84%
DAYTON, OHIO
Sugarcreek Plaza Fee 100% 1988 17.46 77,940 97%
CINCINNATI, OHIO
Governor's Plaza Fee 100% 1990 35.00 181,493 99%
King's Mall
Shp.Ctr. I Fee 100% 1990 5.68 52,661 94%
King's Mall
Shp.Ctr. II Fee 100% 1988 8.90 67,725 92%
Steinberg's Fee 100% 1993 1.90 21,008 100%
Kohl's Fee 100% 1994 12.00 80,684 100%
Sports Unlimited Fee 100% 1994 7.00 67,148 100%
Eastgate Square Fee 100% 1990/1996 11.60 94,182 100%
Office Max Fee 100% 1995 2.25 23,484 100%
Sofa Express Fee 100% 1995 1.13 15,000 100%
Bigg's SuperCtr. Fee 100% 1996 14.00 170,791 100%
Fountain Place Fee 25%[21] 1997 1.98 207,170 95%
GOVERNOR'S POINTE
Lowe's Fee 100% 1997 15.00 128,747 100%
FLORENCE, KENTUCKY
Sofa Express Fee 100% 1997 1.78 20,250 100%
BLOOMINGTON, ILLINOIS
Lakewood Plaza Fee 100% 1987 11.23 87,010 94%
CHAMPAIGN, ILLINOIS
Market View Fee 100% 1985 8.50 86,553 88%
COLUMBUS, OHIO
Galyans Trading
Company Fee 100% 1984 4.90 74,636 100%
Tuttle Retail
Ctr. Fee 100% 1995/1996 13.44 144,340 100%
-------- ----------
IN-SERVICE TOTAL 2,684.36 40,668,043
-------- ----------
</TABLE>
UNDER CONSTRUCTION
------------------
<TABLE>
<CAPTION>
Net Percent
Expected Land Rentable Pre-leased at
Name/ Ownership Company's In-service Area Area December 31,
Location Interest Ownership Date (Acres) (sq.ft.) 1997
- ------------ ---------- ---------- --------- ------- --------- -------------
INDUSTRIAL
- ----------
<S> <C> <C> <C> <C> <C> <C>
INDIANAPOLIS,
INDIANA
Building 134 Fee 100% May-98 8.70 110,400 41%
Franklin Road
Exp. Fee 100% Mar-98 9.35 150,000 61%
PARK FLETCHER
BUS. PARK
Building 35 Fee 50%[1] Oct-97 8.10 96,000 67%
Building 36 Fee 50%[1] Feb-98 3.90 52,800 0%
LEBANON,
INDIANA
LEBANON BUS.
PARK
Prentice Hall Fee 100% Jan-98 38.90 577,340 100%
Lebanon
(General
Cable) Fee 100% May-98 23.30 395,472 50%
Thomson
Consumer Exp. Fee 50% Jun-98 12.02 740,155 100%
CINCINNATI, OHIO
WORLD PARK
World Park
Bldg 28 Fee 100% Jan-98 11.60 220,160 87%
World Park
Bldg 29 Fee 100% Apr-98 21.40 452,000 100%
COLUMBUS, OHIO
Sun TV Exp. Fee 100% Jun-98 12.00 231,936 100%
- 12 -
<PAGE>
Net Percent
Expected Land Rentable Pre-leased at
Name/ Ownership Company's In-service Area Area December 31,
Location Interest Ownership Date (Acres) (sq.ft.) 1997
- ----------- ---------- --------- ---------- ------- -------- -------------
CLEVELAND,
OHIO
Fountain Pkwy
Bldg. B1 Fee 100% May-98 6.50 108,704 0%
Strongsville
Bldg. 1 Fee 100% May-98 4.50 72,000 0%
ST. LOUIS,
MISSOURI
EARTH CITY
Dukeport 3 Fee 100% Dec-97 9.50 214,400 0%
Dukeport 4 Fee 100% Apr-98 12.70 153,600 0%
West Port
Ctr. I Fee 100% May-98 11.90 177,600 0%
OFFICE
INDIANAPOLIS,
INDIANA
PARK 100
BUS. PARK
Building 135 Fee 100% Mar-98 6.00 77,125 74%
RIVER ROAD
Software
Artistry Fee 100% Jan-98 6.90 108,273 75%
PARKWOOD CROSSING
Four Parkwood Fee 100% Sep-98 5.90 132,836 0%
CINCINNATI, OHIO
Gov. Pointe
4680 Bldg. Fee 100% Aug-98 9.80 126,102 0%
COLUMBUS, OHIO
TUTTLE CROSSING
Rings Road
Office Bldg. Fee 100% Apr-98 11.01 145,000 29%
Sterling 4 Fee 100% Apr-98 3.10 94,219 100%
One Easton
Oval Fee 100% May-98 7.69 127,080 0%
ST. LOUIS,
MISSOURI
EARTH CITY
MCI Fee 100% May-98 11.90 97,356 100%
520 Maryville
Ctr. Fee 100% Dec-98 5.30 113,659 0%
NASHVILLE,
TENNESSEE
CREEKSIDE
CROSSING
Creekside
Crossing One Fee 100% Jul-98 5.35 112,800 0%
CLEVELAND,
OHIO
Park Ctr.
Bldg.1 Fee 100% Oct-98 6.68 133,550 0%
RETAIL
- ------
CINCINNATI, OHIO
Tri-County
Marketplace Fee 100% Oct-98 10.38 74,174 100%
Western Hills
Marketplace Fee 100% Sep-98 10.50 148,140 82%
-------- ----------
UNDER CONST. TOTAL 294.88 5,242,881
-------- ----------
2,979.24 45,910,924
======== ==========
</TABLE>
[1] These buildings are owned by a limited liability company in which the
Company is a 50.1% member. The Company shares in the profit or loss from
such buildings in accordance with the Company's ownership interest. This
limited liability company owns a 50% general partnership interest in Park
Fletcher Buildings 27 and 28 and shares in the profit or loss from these
buildings in accordance with the limited liability company's interest.
[2] These buildings are owned by a partnership in which the Company is a
partner. The Company owns a 10% capital interest in the partnership and
receives a 50% interest in the residual cash flow after payment of a 9%
preferred return to the other partner on its capital interest.
- 13 -
<PAGE>
[3] This building was constructed in 1994 and expanded in 1997.
[4] This building is owned in partnership with a tenant of the building. The
Company owns a 50% general partnership interest in the partnership. The
Company shares in the profit or loss from the building in accordance with
such ownership interest.
[5] This building was constructed in three phases; 1962, 1971 and 1974.
[6] This building was contributed to the limited liability company
referenced in footnote [1] in 1996.
[7] This building is owned by a limited partnership in which the Company has
a 1% general partnership interest and a 39% limited partnership interest.
The Company shares in the profit or loss from such building in accordance
with the Company's ownership interest.
[8] This building was renovated in 1996.
[9] This building is owned by a partnership in which the Company owns a
33.33% limited partnership interest. The Company shares in the profit or
loss from the building in accordance with such ownership interest.
[10] The Company owns a 66.67% general partnership interest in the
partnership owning this building. The Company shares in the profit or loss
of this building in accordance with the Company's ownership interest.
[11] The Company owns the building and has a leasehold interest in the land
underlying this building with a lease term expiring October 31, 2067.
[12] The Company has a leasehold interest in this building with a lease term
expiring May 9, 2006.
[13] The Company owns this building and has a leasehold interest
in the land underlying this building with a lease term expiring August
2045, with two 20-year options to renew.
[14] The Company has a leasehold interest in the building and the
underlying land with a lease term expiring June 30, 2020. The Company has
an option to purchase the fee interest in the property throughout the term
of the lease.
[15] This building was renovated in 1986.
[16] These buildings are owned by a partnership in which the
Company has a 50% general partnership interest. The Company shares in the
profit or loss from such buildings in accordance with such ownership
interest.
[17] This building was renovated in 1985.
[18] Tri-County Office Park consists of four buildings. One was
built in 1971, two were built in 1973, and one was built in 1982.
[19] The Company owns this building and has a leasehold interest
in the land underlying this building with a lease term expiring June 2095.
[20] This building is owned by a limited liability company in
which the Company is a 50% member. The Company shares in the profit or loss
of this building in accordance with the Company's ownership interest.
[21] This building is owned through a limited liability company in which
the partnership Company is a 25% member. The limited liability company
will own a 57.5% interest in the Fountain Place retail project.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company or any
subsidiary was a party or to which any of their property is subject
other than routine litigation incidental to the Company's business. In
the opinion of management, such litigation is not material to the
Company's business operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the year ended December 31, 1997.
- 14 -
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Shares are listed for trading on the New York
Stock Exchange, symbol DRE. The following table sets forth the high
and low sales prices of the Common Stock for the periods indicated and
the dividend paid per share during each such period. Comparable cash
dividends are expected in the future. As of March 4, 1998, there
were 8,332 record holders of Common Shares.
<TABLE>
<CAPTION>
1997 (1) 1996 (1)
------------------------------ -------------------------
QUARTER ENDED HIGH LOW DIVIDEND HIGH LOW DIVIDEND
---------------- ---- ----- -------- ---- ----- --------
<S> <C> <C> <C> <C> <C> <C>
December 31 $25.00 $21.38 $.300 $19.25 $16.38 $.255
September 30 23.63 19.81 .295 16.62 14.50 .255
June 30 20.88 17.13 .255 15.25 14.19 .245
March 31 21.44 19.00 .255 16.25 14.56 .245
</TABLE>
(1) All stock prices and dividend amounts reflect the Company's two-for-one
stock split effected in August 1997.
On January 29, 1998, the Company declared a quarterly cash dividend of
$0.30 per share payable on February 27, 1998 to common shareholders of
record on February 13, 1998. Following is a summary of the taxable
nature of the Company's dividends for the three years ended December
31:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Total dividends per share $1.10 $1.00 $.96
==== ==== ===
Percent taxable as
ordinary income 100.00% 99.10% 85.51%
Percent taxable as
long-term capital gains - - .82%
Percent non-taxable as
return of capital - .90% 13.67%
------- ------- -------
100.00% 100.00% 100.00%
======= ======= =======
</TABLE>
Dividends per share of $.97 and $.89 were required for the Company to
maintain its REIT status in 1997 and 1996, respectively.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following sets forth selected consolidated financial and
operating information on a historical basis for the Company for each
of the years in the five-year period ended December 31, 1997. The
following information should be read in conjunction with Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Item 8, "Financial Statements and
Supplementary Data" included in this Form 10-K (in thousands, except
per share amounts):
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS:
Revenues:
Rental Operations $ 229,702 $ 162,160 $113,641 $ 89,299 $ 33,648
Service Operations 22,378 19,929 17,777 18,473 5,654
--------- --------- ------- ------- -------
TOTAL REVENUES $ 252,080 $ 182,089 $131,418 $107,772 $ 39,302
========= ========== ======= ======= =======
NET INCOME (LOSS)
AVAILABLE FOR
COMMON SHARES $ 65,999 $ 50,872 $ 35,019 $ 26,216 $ 5,013
========= ========= ======== ======= =======
PER SHARE DATA (1):
Net Income per
Common Share
Basic $ .99 $ .91 $ .77 $ .77 $ .46
Diluted .98 .90 .77 .77 .46
Dividends per
Common Share 1.10 1.00 .96 .92 .84
Weighted Average
Common Shares
Outstanding 66,427 56,134 45,358 34,278 10,918
Weighted Average
Common and Dilutive
potential Common
Shares 74,993 64,398 53,802 43,002 13,152
- 15 -
<PAGE>
BALANCE SHEET DATA
(at December 31):
Total Assets $2,176,214 $1,361,142 $1,045,588 $774,901 $632,885
Total Debt 720,119 525,815 454,820 298,640 248,433
Total Preferred Equity 218,338 72,288 - - -
Total Shareholders'
Equity 1,234,681 754,932 534,789 445,384 347,038
Total Common Shares
Outstanding (1) 76,065 58,972 48,304 40,782 32,092
OTHER DATA:
Funds From Operations
(2) $ 107,256 $ 76,079 $ 54,746 $ 38,198 $ 11,064
Cash Flow Provided by
(Used by):
Operating activities $ 159,195 $ 95,135 $ 78,620 $ 51,873 $ 14,363
Investing activities (597,324) (276,748) (289,569) (116,238)(315,025)
Financing activities 443,148 181,220 176,243 94,733 310,717
</TABLE>
(1)Information for 1993 has been adjusted for the 1 for 4.2 reverse
stock split effected in 1993. Information for all five years
reflects the two-for-one stock split effected in August 1997.
(2)Funds From Operations, is defined by the National Association of
Real Estate Investment Trusts as net income or loss excluding
gains or losses from debt restructuring and sales of property
plus depreciation and amortization, and after adjustments for
minority interest, unconsolidated partnerships and joint ventures
(adjustments for minority interests, unconsolidated partnerships
and joint ventures are calculated to reflect Funds From Operations
on the same basis). Funds From Operations does not represent cash
flow from operations as defined by generally accepted accounting
principles, should not be considered as an alternative to net
income as an indicator of the Company's operating performance,
and is not indicative of cash available to fund all cash flow needs.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
--------
The Company's operating results depend primarily upon income from the
rental operations of its industrial, office and retail properties
located in its primary markets. This income from rental operations is
substantially influenced by the supply and demand for the Company's
rental space in its primary markets. In addition, the Company's
continued growth is dependent upon its ability to maintain occupancy
rates and increase rental rates on its in-service portfolio and to
continue development and acquisition of additional rental properties.
The Company's primary markets in the Midwest have continued to offer
strong and stable local economies and have provided attractive new
development opportunities because of their central location,
established manufacturing base, skilled work force and moderate labor
costs. Consequently, the Company's occupancy rate of its in-service
portfolio has averaged 94.5% the last two years and was 94.1% at
December 31, 1997. The Company expects to maintain its overall
occupancy at comparable levels and also expects to increase
rental rates as leases are renewed or new leases are executed. This
stable occupancy as well as increasing rental rates should improve
the Company's results of operations from its in-service properties.
The Company's strategy for continued growth also includes developing
and acquiring additional rental properties in its primary markets and
expanding into other attractive Midwestern markets.
A new statistic that the Company started tracking in 1996 is Same
Property Performance which compares those properties that were fully
in-service for all of a two-year period. Because of the rapid growth
of the Company, this population of properties only represented 45.3% and
42.2% of the in-service portfolio at December 31, 1997 and December 31,
1996, respectively. As a result of the loss of a 90,000 square foot
downtown Cincinnati office tenant in 1996, along with the effects of a
property tax reassessment in another downtown Cincinnati property, Same
Property FFO increased only 1.1% from 1995 to 1996. In 1997, Same Property
FFO improved significantly with a 4.7% increase over 1996.
- 16 -
<PAGE>
The following table sets forth information regarding the Company's in-
service portfolio of rental properties as of December 31, 1997 and
1996 (square feet in thousands):
<TABLE>
<CAPTION>
Total Percent of
Square Feet Total Square Feet Percent Occupied
------------------ ----------------- ----------------
Type 1997 1996 1997 1996 1997 1996
---- ------ ------ ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
INDUSTRIAL
Service Centers 3,707 3,151 9.1% 11.5% 91.9% 94.0%
Bulk 24,173 15,173 59.4% 55.4% 93.5% 95.1%
OFFICE
Suburban 9,758 6,319 24.0% 23.1% 95.9% 96.6%
CBD 699 699 1.7% 2.5% 93.9% 87.1%
Medical 290 370 .8% 1.3% 98.4% 92.8%
RETAIL 2,041 1,690 5.0% 6.2% 95.8% 93.7%
------ ------ ------ ------
Total 40,668 27,402 100.0% 100.0% 94.1% 95.0%
====== ====== ====== ======
</TABLE>
Management expects occupancy of the in-service property portfolio to
remain stable because (i) only 10.2% and 12.2% of the Company's
occupied square footage is subject to leases expiring in 1998 and
1999, respectively, and (ii) the Company's renewal percentage
averaged 81%, 80% and 65% in 1997, 1996 and 1995, respectively.
The following tables reflects the Company's in-service lease
expiration schedules as of December 31, 1997, by product type
indicating square footage and annualized net effective rents under
expiring leases (in thousands, except per square foot amounts):
<TABLE>
<CAPTION>
Industrial Portfolio Office Portfolio Retail Portfolio Total Portfolio
-------------------- ---------------- ---------------- ---------------
Yr of Sq. Sq. Sq. Sq.
Exp Ft. Rent Ft. Rent Ft. Rent Ft. Rent
- ------ ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 2,951 $ 11,508 874 $ 9,738 81 $ 918 3,906 $ 22,164
1999 3,236 13,738 1,322 14,560 114 1,197 4,672 29,495
2000 2,739 11,696 1,052 13,675 126 1,525 3,917 26,896
2001 2,944 11,940 1,465 17,639 89 1,064 4,498 30,643
2002 3,821 15,234 1,443 16,597 157 1,747 5,421 33,578
2003 1,455 5,880 475 5,661 57 541 1,987 12,082
2004 775 3,465 298 3,659 17 178 1,090 7,302
2005 1,761 5,593 924 12,916 177 1,518 2,862 20,027
2006 2,052 7,212 625 9,606 5 67 2,682 16,885
2007 1,875 5,813 362 4,638 76 760 2,313 11,211
There-
after 2,394 8,995 1,461 20,190 1,055 8,513 4,910 37,698
------ ------- ------ ------- ----- ------ ------ ------
Total
Leased 26,003 $101,074 10,301 $128,879 1,954 $18,028 38,258 $247,981
====== ======= ====== ======= ===== ====== ====== =======
Total
Port-
folio 27,880 10,747 2,041 40,668
====== ====== ===== ======
Annualized
net effective
rent per sq.
foot leased $ 3.89 $ 12.51 $ 9.23 $ 6.48
======= ======= ====== =======
</TABLE>
This stable occupancy, along with increasing rental rates in each of
the Company's markets, will allow the in-service portfolio to
continue to provide a comparable or increasing level of earnings
from rental operations. The Company also expects to realize growth
in earnings from rental operations through (i) the development and
acquisition of additional rental properties in its primary markets;
(ii) the expansion into
- 17 -
<PAGE>
other attractive Midwestern markets; and (iii) the completion of the
5.2 million square feet of properties under development at December
31, 1997 over the next five quarters. The 5.2 million square feet of
properties under development should provide future earnings from
rental operations growth for the Company as they are placed in
service as follows (in thousands, except percentages):
<TABLE>
<CAPTION>
Anticipated Estimated Anticipated
In-Service Square Percent Project Stabilized
Date Feet Pre-Leased Costs Return
----------- -------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
1st Quarter 1998 1,496 71% $ 50,258 11.3%
2nd Quarter 1998 2,779 68% 96,427 11.1%
3rd Quarter 1998 387 31% 35,119 12.1%
4th Quarter 1998
and thereafter 581 13% 75,508 11.2%
----- -------
5,243 60% $257,312 11.3%
===== =======
</TABLE>
RESULTS OF OPERATIONS
---------------------
A summary of the Company's operating results and property statistics
for each of the years in the three-year period ended December 31, 1997
is as follows (in thousands, except number of properties and per share
amounts):
<TABLE>
<CAPTION>
1997 1996 1995
------- -------- -------
<S> <C> <C> <C>
Rental Operations revenues $229,702 $162,160 $113,641
Service Operations revenues 22,378 19,929 17,777
Earnings from Rental Operations 83,740 54,332 37,275
Earnings from Service Operations 7,153 6,436 6,569
Operating income 84,363 56,049 40,308
Net income available for
common shares $ 65,999 $ 50,872 $ 35,019
Weighted average common
shares outstanding (1) 66,427 56,134 45,358
Weighted average common and
dilutive potential common
shares (1) 74,993 64,398 53,802
Basic income per common
share (1) $ .99 $ .91 $ .77
Diluted income per common
share (1) $ .98 $ .90 $ .77
Number of in-service properties
at end of year 355 249 201
In-service square footage at
end of year 40,668 27,402 20,073
Under development square footage
at end of year 5,243 3,801 3,448
</TABLE>
(1) As adjusted for the two-for-one stock split effected in August 1997.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------
Rental Operations
-----------------
The Company increased its in-service portfolio of rental properties
from 249 properties comprising 27.4 million square feet at December
31, 1996 to 355 properties comprising 40.7 million square feet at
December 31, 1997 through the acquisition of 84 properties totaling
8.4 million square feet and the placement in service of 28 properties
and two building expansions totaling 5.4 million square feet
developed by the Company.
The Company also disposed of six properties totaling 443,000 square
feet. These 106 net additional rental properties primarily account
for the $67.5 million increase in revenues from Rental Operations
from 1996 to 1997. The increase from 1996 to 1997 in rental expenses,
real estate taxes and depreciation and amortization expense is also a
result of the additional 106 in-service rental properties.
- 18 -
<PAGE>
Interest expense increased by approximately $7.7 million. This
increase was primarily because of interest expense on the $90 million
of unsecured debt which the Company issued in 1996 under its medium-
term note program. These notes bear interest at a weighted average
rate of 7.20% and were outstanding a full year in 1997 as compared to
less than six months in 1996. The Company also issued $100 million of
unsecured debt in 1997 which bears interest at an effective interest
rate of 7.35%. The proceeds from these debt issuances were used
to fund development and acquisition of additional rental properties.
As a result of the above mentioned items, earnings from Rental
Operations increased $29.4 million from $54.3 million for the year
ended December 31, 1996 to $83.7 million for the year ended December
31, 1997.
Service Operations
----------------
Service Operations revenues increased from $19.9 million to $22.4
million for the year ended December 31, 1997 as compared to the year
ended December 31, 1996 primarily as a result of increases in
construction management fee revenue because of an increase in third-
party construction volume. Service Operations expenses increased from
$13.5 million to $15.2 million for the year ended December 31, 1997
as compared to the year ended December 31, 1996 primarily as a result
of an increase in operating expenses resulting from the overall
growth of the Company and the additional regional offices opened in
1996 and 1997.
As a result of the above-mentioned items, earnings from Service
Operations increased from $6.4 million to $7.2 million for the years
ended December 31, 1996 and 1997, respectively.
General and Administrative Expense
---------------------------------
General and administrative expense increased from $4.7 million for
the year ended December 31, 1996 to $6.5 million for the year ended
December 31, 1997 primarily as a result of increased state and local
taxes due to the growth in revenues and net income of the Company.
Property advertising expense also increased as a result of the
expanding size of the Company.
Other Income (Expense)
---------------------
Interest income increased from $1.2 million for the year ended
December 31, 1996 to $2.2 million for the year ended December 31,
1997 as a result of the temporary short-term investment of a greater
amount of proceeds from the 1997 debt and equity offerings. Other
expense consists of costs incurred in pursuit of unsuccessful
development or acquisition opportunities.
During the year ended December 31, 1996, the Company sold a 251,000
square foot corporate headquarters facility pursuant to a purchase
option contained in the original agreement to lease the building. The
project was sold for approximately $32.9 million and the Company
recognized a gain of approximately $1.6 million on the sale. The
Company also realized gains totaling $2.9 million in 1996 related to
the sale of a retail center and several parcels of land.
Net Income Available for Common Shares
-------------------------------------
Net income available for common shares for the year ended December
31, 1997 was $66.0 million compared to $50.9 million for the year
ended December 31, 1996. This increase results primarily from the
increases in the operating results of rental and service operations
explained above.
- 19 -
<PAGE>
COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995
- -----------------------------------------------------------------------------
Rental Operations
----------------
The Company increased its in-service portfolio of rental properties
from 201 properties comprising 20.1 million square feet at December
31, 1995 to 249 properties comprising 27.4 million square feet at
December 31, 1996 through the acquisition of 34 properties totaling
3.4 million square feet and the placement in service of 16 properties
and four building expansions totaling 4.1 million square feet
developed by the Company.
The Company also disposed of two properties totaling 182,000 square
feet. These 48 net additional rental properties primarily account for
the $48.5 million increase in revenues from Rental Operations from
1995 to 1996. The increase from 1995 to 1996 in rental expenses, real
estate taxes and depreciation and amortization expense is also a
result of the additional 48 in-service rental properties.
Interest expense increased by approximately $9.9 million. This
increase was primarily because of interest expense on the $150.0
million of unsecured notes which the Company issued in September
1995. These notes bear interest at an effective rate of 7.46%
and were outstanding a full year in 1996 as compared to approximately
three months in 1995. The Company also issued $90.0 million of
unsecured debt under its medium-term note program in 1996 which bears
interest at a weighted average rate of 7.20%. The proceeds from these
debt issuances were used to fund development and acquisition of
additional rental properties during 1995 and 1996.
As a result of the above-mentioned items, earnings from Rental
Operations increased $17.0 million from $37.3 million for the
year ended December 31, 1995 to $54.3 million for the year ended
December 31, 1996.
Service Operations
------------------
Service Operations revenues increased from $17.8 million to
$19.9 million for the year ended December 31, 1996 as compared to the
year ended December 31, 1995 primarily as a result of increases in
construction management fee revenue because of an increase in
construction volume. Service Operations expenses increased from $11.2
million to $13.5 million for the year ended December 31, 1996 as
compared to the year ended December 31, 1995 primarily as a result of
an increase in operating expenses resulting from the overall growth
of the Company and the additional regional offices opened in 1995 and
1996.
As a result of the above-mentioned items, earnings from Service
Operations decreased from $6.6 million to $6.4 million for the years
ended December 31, 1995 and 1996, respectively.
General and Administrative Expense
----------------------------------
General and administrative expense increased from $3.5 million for
the year ended December 31, 1995 to $4.7 million for the year ended
December 31, 1996 primarily as a result of increased state and local
taxes due to the growth in revenues and net income of the Company.
Property advertising expense as well as certain public company
expenses also increased as a result of the expanding size of the
Company.
Other Income (Expense)
---------------------
Interest income decreased from $1.9 million for the year ended
December 31, 1995 to $1.2 million for the year ended December 31,
1996 as a result of the temporary short-term investment of a greater
amount of proceeds from the 1995 debt and equity offerings compared
to proceeds generated by the 1996 debt and equity offerings.
- 20 -
<PAGE>
During the year ended December 31, 1996, the Company sold a 251,000
square foot corporate headquarters facility pursuant to a purchase
option contained in the original agreement to lease the building. The
project was sold for approximately $32.9 million and the Company
recognized a gain of approximately $1.6 million on the sale. The
company also realized gains totaling $2.9 million in 1996 related to
the sale of a retail center and several parcels of land.
Net Income Available for Common Shares
-------------------------------------
Net income available for common shares for the year ended December
31, 1996 was $50.9 million compared to $35.0 million for the year
ended December 31, 1995. This increase results primarily from the
changes in the operating result of rental and service operations
explained above.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities totaling $159.2 million,
$95.1 million and $78.6 million for the years ended December 31,
1997, 1996 and 1995, respectively, represents the primary source of
liquidity to fund distributions to shareholders and minority
interests and to fund recurring costs associated with the renovation
and re-letting of the Company's properties. The primary reason for
the increases in net cash provided by operating activities is, as
discussed above under "Results of Operations," the increase in net
income each year resulting from the expansion of the in-service
portfolio through development and acquisitions of additional rental
properties.
Net cash used by investing activities totaling $597.3 million, $276.7
million and $289.6 million for the years ended December 31, 1997,
1996 and 1995, respectively, represents the investment of funds by
the Company to expand its portfolio of rental properties through the
development and acquisition of additional rental properties. In 1997,
$620.5 million was invested in the development and acquisition of
additional rental properties and land held for development and $14.3
million was used for recurring building and tenant improvements and
leasing costs.
Included in the $620.5 million of development and acquisition of
rental properties and land held for development for the year ended
December 31, 1997 is $1.3 million related to the acquisition of 41
industrial and suburban office buildings totaling 3.2 million gross
square feet in Minneapolis, Minnesota. The purchase price of these 41
buildings was approximately $144.7 million which included the
assumption of $93.1 million of mortgage debt, the issuance of $48.5
million of units of partnership interest in the Company's operating
partnership, and the assumption of approximately $1.8 million of
accrued taxes and other liabilities.
Also included in $620.5 million of development and acquisition of
rental properties and land held for development for the year ended
December 31, 1997 is $27.9 million related to the acquisition of 8
suburban office buildings and 3 industrial buildings totaling 982,000
gross square feet and land held for development in St. Louis,
Missouri. The purchase price of these properties was approximately
$147.7 million which included the assumption of $77.8 million of
mortgage debt, the issuance of $40.8 million of units of partnership
interest in the Company's operating partnership and the assumption of
approximately $1.2 million of accrued taxes and other liabilities.
Also in 1997, the Company sold six properties and several parcels of
land and received $32.6 million of net sales proceeds. These proceeds
were used to fund a portion of the 1997 development and acquisition
activity.
- 21 -
<PAGE>
In 1996, $328.4 million was invested in the development and
acquisition of additional rental properties and land held for
development and $9.9 million was used for recurring building and
tenant improvements and leasing costs. In 1995, $250.3 million was
invested in the development and acquisition of additional rental
properties and land held for development and $8.6 million was used
for recurring building and tenant improvements and leasing costs.
Net cash provided by financing activities totaling $443.1 million,
$181.2 million and $176.2 million for the years ended December 31,
1997, 1996 and 1995, respectively, is comprised of debt and equity
issuances, net of distributions to shareholders and minority
interests and repayments of outstanding indebtedness. In 1997, the
Company received $299.1 million of net proceeds from common stock
offerings which were used to pay down amounts outstanding on the
unsecured line of credit and to fund acquisition and development of
additional rental properties and land held for development. During
1997, the Company also received $18.4 million of net proceeds from
the issuance of common stock under its Direct Stock Purchase and
Dividend Reinvestment Plan. The Company used these net proceeds to
fund the development and acquisition of additional rental properties.
In July 1997, the Company received $146.1 million of net proceeds
from a preferred stock offering. In August 1997, the Company issued
$100.0 million of unsecured debt. This unsecured debt matures in July
2004 and bears interest at an effective interest rate of 7.35%.
The Company used the net proceeds from the preferred stock and the
unsecured debt offerings to reduce amounts outstanding under the
Company's lines of credit and to fund the development and acquisition
of additional rental properties.
In March 1996, the Company received $125.3 million of net proceeds
from a common stock offering which was used to pay down amounts
outstanding on the unsecured line of credit. During 1996, the Company
also received $5.5 million of net proceeds from the issuance of
common stock under its Direct Stock Purchase and Dividend
Reinvestment Plan. The Company used these net proceeds to fund the
development and acquisition of additional rental properties.
In August 1996, the Company received $72.3 million of net proceeds
from a preferred stock offering. In July 1996, the Company issued
$40.0 million of unsecured debt under its medium-term note program.
These notes mature in July 2000 and bear interest at 7.28%. In
November 1996, the Company issued $50.0 million of unsecured debt
under its medium-term note program. These notes mature in November
2004 and bear interest at 7.14%. The Company used the net proceeds
from the preferred stock offering and the two medium-term note
offerings to pay off approximately $82.5 million of existing secured
debt which was scheduled to mature in the fourth quarter of 1996 or
early in 1997 and the remainder to fund the development and
acquisition of additional rental properties.
In 1995, the Company received $96.3 million of net proceeds from a
common stock offering and used the proceeds to fund development and
acquisition of additional rental properties. In 1995, the Company
also received $150.0 million from an unsecured debt offering and used
the proceeds to retire outstanding mortgage indebtedness and to fund
acquisition and development of additional rental properties.
The recurring capital needs of the Company are funded primarily
through the undistributed net cash provided by operating activities.
An analysis of the Company's recurring capital expenditures is as
follows (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
----- ---- ----
<S> <C> <C> <C>
Tenant improvements $ 7,985 $6,048 $4,312
Leasing costs 5,057 3,032 3,519
Building improvements 1,211 780 757
------ ----- -----
Total $14,253 $9,860 $8,588
====== ===== =====
</TABLE>
- 22 -
<PAGE>
The Company has a $200.0 million unsecured line of credit available
to fund the development and acquisition of additional rental
properties and to provide working capital as needed. This line of
credit matures in April 2001 and bears interest at the 30-day London
Interbank Offered Rate ("LIBOR") plus .80%. Borrowings of $13.0
million under this line of credit as of December 31, 1997 bear
interest at an effective rate of 6.74%. The Company also has a demand
$7.0 million secured line of credit which is available to provide
working capital. This facility bears interest payable monthly at the
30-day LIBOR rate plus .65%. Borrowings of $7.0 million are
outstanding on this line of credit at December 31, 1997 and bear
interest at an effective rate of 6.59%. The current 30-day LIBOR rate
as of March 2, 1998 is 5.68%.
The Company currently has on file two Form S-3 Registration
Statements with the Securities and Exchange Commission (the "Shelf
Registrations") which have remaining availability as of December 31,
1997 of $504.1 million to issue additional common stock, preferred
stock and unsecured debt securities. The Company intends to issue
additional securities under such Shelf Registrations to fund the
development and acquisition of additional rental properties.
The total debt outstanding at December 31, 1997 consists of notes
totaling $720.1 million with a weighted average interest rate of
7.58% maturing at various dates through 2017. The Company has $353.0
million of unsecured debt and $367.1 million of secured debt
outstanding at December 31, 1997. Scheduled principal amortization of
such debt totaled $4.1 million for the year ended December 31, 1997.
A summary of the scheduled future amortization and maturities of the
Company's indebtedness is as follows (in thousands):
<TABLE>
<CAPTION>
Repayments
------------------------------------- Weighted Average
Scheduled Interest Rate of
Year Amortization Maturities Total Future Repayments
---- ------------ ---------- ------- -----------------
<S> <C> <C> <C> <C>
1998 $ 6,795 $ 47,714 $ 54,509 7.07%
1999 5,880 30,450 36,330 6.71%
2000 6,262 64,850 71,112 7.14%
2001 5,926 87,560 93,486 7.65%
2002 6,433 50,000 56,433 7.40%
2003 4,415 68,216 72,631 8.46%
2004 3,398 177,035 180,433 7.41%
2005 3,681 100,000 103,681 7.49%
2006 3,989 - 3,989 7.68%
2007 3,516 14,939 18,455 7.77%
There-
after 29,060 - 29,060 7.69%
------ ------- -------
Total $79,355 $640,764 $720,119 7.58%
====== ======= =======
</TABLE>
The Company intends to pay regular quarterly dividends from net cash
provided by operating activities. A quarterly dividend of $.30 per
common share was declared on January 29, 1998 which represents an
annualized dividend of $1.20 per share.
YEAR 2000
The Company has reviewed the impact of Year 2000 issues and has
determined that it is not expected to have a material impact on
its business, operations or its financial condition.
FUNDS FROM OPERATIONS
Management believes that Funds From Operations ("FFO"), which is
defined by the National Association of Real Estate Investment Trusts
as net income or loss excluding gains or losses from debt
restructuring and
- 23 -
<PAGE>
sales of property plus depreciation and amortization, and after
adjustments for minority interest, unconsolidated partnerships and
joint ventures (adjustments for minority interest, unconsolidated
partnerships and joint ventures are calculated to reflect FFO on the
same basis), is the industry standard for reporting the operations of
real estate investment trusts.
The following reflects the calculation of the Company's FFO for the
years ended December 31 (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Net income available for common shares $ 65,999 $ 50,872 $ 35,019
Add back:
Depreciation and amortization 44,806 31,363 23,118
Share of joint venture
depreciation and amortization 3,017 1,890 411
Earnings from property sales (1,775) (4,532) (283)
Minority interest share of add-backs (4,791) (3,514) (3,519)
------- ------ -------
FUNDS FROM OPERATIONS $107,256 $ 76,079 $ 54,746
======= ====== =======
CASH FLOW PROVIDED BY (USED BY):
Operating activities $ 159,195 $ 95,135 $ 78,620
Investing activities (597,324) (276,748) (289,569)
Financing activities 443,148 181,220 176,243
</TABLE>
The increase in FFO during the three-year period results primarily
from the increased in-service rental property portfolio as
discussed above under "Results of Operations."
While management believes that FFO is the most relevant and widely
used measure of the Company's operating performance, such amount
does not represent cash flow from operations as defined by
generally accepted accounting principles, should not be considered
as an alternative to net income as an indicator of the Company's
operating performance, and is not indicative of cash available to
fund all cash flow needs.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data are included under Item
14 of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ON ACCOUNTING
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item for Directors and certain
Executive Officers will be contained in a definitive proxy statement
which the Registrant anticipates will be filed no later than March
23, 1998, which proxy statement is incorporated herein by reference,
and thus this part has been omitted in accordance with General
Instruction G(3) to Form 10-K.
The following information is provided regarding the executive
officers of the Company who do not serve as Directors of the Company:
- 24 -
<PAGE>
GARY A. BURK
Age 46, President of Construction Services and Executive Vice
President of Duke Services, Inc. - Mr. Burk joined the Company in
1979, and has been responsible for the Company's construction
management operations since 1986.
JOHN R. GASKIN
Age 36, Vice President, General Counsel and Secretary - Mr. Gaskin
joined the Company in 1990. Prior to joining the Company, Mr. Gaskin
worked as an associate attorney in a mid-size Indianapolis, Indiana
law firm.
RICHARD W. HORN
Age 40, Executive Vice President - Office - Mr. Horn joined the
Company in 1984. Mr. Horn is responsible for all office activities
of the Company and also oversees the Nashville and Michigan operations
of the Company.
WILLIAM E. LINVILLE, III
Age 43, Executive Vice President - Industrial - Mr. Linville joined
the Company in 1987 and is responsible for all industrial activities
of the Company. Prior to that time, Mr. Linville was Vice President
and Regional Manager of the CB Commercial Brokerage Office in
Indianapolis.
DAVID R. MENNEL
Age 43, General Manager of Services Operations and President and
Treasurer of Duke Services, Inc.- Mr. Mennel was with the accounting
firm of Peat Marwick Mitchell & Co. and the property development
firm of Melvin Simon & Associates before joining the Company in
1978.
DENNIS D. OKLAK
Age 44, Executive Vice President and Chief Administrative Officer -
Mr. Oklak joined the Company in 1986 and has served as Treasurer,
Tax Manager and Controller of Development. Prior to joining the
Company, Mr. Oklak was a Senior Manager with the public accounting
firm of Deloitte Haskins Sells.
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own
more than 10% of the Company's Common Stock, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than 10% shareholders are
required by Securities and Exchange Commission regulation to furnish
the Company with copies of all Section 16(a) forms they file.
Information regarding Section 16(a) filings will be contained in a
definitive proxy statement which the Registrant anticipates will be
filed no later than March 23, 1998, which proxy statement is
incorporated herein by reference, and thus this part has been omitted
in accordance with General Instruction G(3) to Form 10-K.
ITEM 11, 12, 13 EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS.
The information required by Item 11, Item 12 and Item 13 will be
contained in a definitive proxy statement which the Registrant
anticipates will be filed no later than March 23, 1998, which proxy
statement is incorporated herein by reference, and thus this part has
been omitted in accordance with General Instruction G(3) to Form 10-
K.
- 25 -
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents Filed as Part of This Report.
1. Consolidated Financial Statements:
Index
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1997 and 1996
Consolidated Statements of Operations, Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Cash Flows, Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Shareholders' Equity, Years Ended December
31, 1997, 1996 and 1995
Notes to Consolidated Financial Statements
2. CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Index
-----
Schedule III - Real Estate and Accumulated Depreciation
EDGAR Financial Data Schedule
-----------------------------
Exhibit 27 - Financial Data Schedule for year ended December 31,
1997 (EDGAR filing only)
Other schedules are omitted for the reasons that they are not
required, are not applicable, or the required information is set
forth in the financial statements or notes thereto.
- 26 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Directors of
Duke Realty Investments, Inc.:
We have audited the consolidated financial statements of Duke
Realty Investments, Inc. and Subsidiaries as listed in the
accompanying index. In connection with our audits of the
consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying index.
These consolidated financial statements and the financial
statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on the
consolidated financial statements and the financial statement
schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Duke Realty Investments, Inc. and Subsidiaries as of
December 31, 1997 and 1996, and the results of their operations
and their cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally
accepted accounting principles. Also, in our opinion, the related
financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Indianapolis, Indiana
January 28, 1998
- 27 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996
----------- ---------
ASSETS
------
<S> <C> <C>
Real estate investments:
Land and improvements $ 231,614 $ 140,391
Buildings and tenant improvements 1,591,604 1,041,040
Construction in progress 107,242 44,060
Investments in unconsolidated companies 106,450 79,362
Land held for development 139,817 65,185
--------- ---------
2,176,727 1,370,038
Accumulated depreciation (116,264) (82,207)
--------- ---------
Net real estate investments 2,060,463 1,287,831
Cash and cash equivalents 10,353 5,334
Accounts receivable, net of
allowance of $420 and $709 5,932 5,260
Straight-line rent receivable,
net of allowance of $841 14,746 10,956
Receivables on construction contracts 22,700 12,859
Deferred financing costs, net of
accumulated amortization
of $9,101 and $6,519 12,386 10,958
Deferred leasing and other costs,
net of accumulated amortization
of $9,251 and $5,249 34,369 21,573
Escrow deposits and other assets 15,265 6,371
--------- ---------
$2,176,214 $1,361,142
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Indebtedness:
Secured debt $ 367,119 $ 261,815
Unsecured notes 340,000 240,000
Unsecured line of credit 13,000 24,000
--------- ---------
720,119 525,815
Construction payables and amounts
due subcontractors 40,786 23,167
Accounts payable 1,342 1,585
Accrued Expenses:
Real estate taxes 25,203 14,888
Interest 6,883 4,437
Other 13,848 7,312
Other liabilities 11,720 8,312
Tenant security deposits and prepaid rents 14,268 7,611
--------- ---------
Total liabilities 834,169 593,127
--------- ---------
Minority interest 107,364 13,083
--------- ---------
Shareholders' equity:
Preferred shares and paid-in
capital ($.01 par value); 5,000 shares
authorized:
9.10% Series A, 300 shares issued
and outstanding (liquidation
preference of $75,000) 72,288 72,288
7.99% Series B, 300 shares issued
and outstanding (liquidation
preference of $150,000) 146,050 -
Common shares and paid-in capital
($.01 par value); 150,000 shares
authorized; 76,065 and 58,972 shares
issued and outstanding 1,071,990 731,107
Distributions in excess of net income (55,647) (48,463)
--------- ---------
Total shareholders' equity 1,234,681 754,932
--------- ---------
$2,176,214 $1,361,142
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 28 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues:
Rental income $220,970 $156,392 $112,931
Equity in earnings of
unconsolidated companies 8,732 5,768 710
------- ------- -------
229,702 162,160 113,641
------- -------- -------
Operating expenses:
Rental expenses 40,375 29,669 20,922
Real estate taxes 20,485 14,244 9,683
Interest expense 40,296 32,552 22,643
Depreciation and amortization 44,806 31,363 23,118
------- ------- -------
145,962 107,828 76,366
------- ------- -------
Earnings from rental operations 83,740 54,332 37,275
------- ------- -------
SERVICE OPERATIONS:
Revenues:
Property management, maintenance
and leasing fees 12,799 11,496 11,138
Construction management and
development fees 8,646 6,895 5,582
Other income 933 1,538 1,057
------- ------- -------
22,378 19,929 17,777
------- ------- -------
Operating expenses:
Payroll 10,761 9,176 7,606
Maintenance 2,009 1,526 1,344
Office and other 2,455 2,791 2,258
------- ------- -------
15,225 13,493 11,208
------- ------- -------
Earnings from service operations 7,153 6,436 6,569
------- ------- -------
General and administrative expense (6,530) (4,719) (3,536)
------- ------- -------
Operating income 84,363 56,049 40,308
OTHER INCOME (EXPENSE):
Interest income 2,174 1,194 1,900
Earnings from property sales 1,775 4,532 283
Other expense (1,083) (174) (31)
Minority interest in earnings
of unitholders (7,574) (7,184) (6,530)
Other minority interest in
earnings of subsidiaries (1,171) (986) (911)
------- ------- -------
Net income 78,484 53,431 35,019
Dividends on preferred shares (12,485) (2,559) -
------- ------- -------
Net income available for
common shares $ 65,999 $ 50,872 $ 35,019
======= ======= =======
Net income per common share:
Basic $ .99 $ .91 $ .77
======= ======= =======
Diluted $ .98 $ .90 $ .77
======= ======= =======
Weighted average number of
common shares outstanding 66,427 56,134 45,358
======= ======= =======
Weighted average number of
common and dilutive potential
common shares 74,993 64,398 53,802
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 29 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 78,484 $ 53,431 $ 35,019
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation of buildings and
tenant improvements 39,771 27,568 20,416
Deferred financing costs 2,545 2,132 2,138
Amortization of deferred
leasing and other costs 4,170 2,871 1,783
Minority interest in earnings 8,745 8,170 7,441
Straight-line rent adjustment (4,469) (3,536) (3,198)
Earnings from property sales (1,775) (4,532) (283)
Construction contracts, net 7,778 (1,640) 8,722
Other accrued revenues and expenses,
net 29,481 12,620 6,771
Equity in earnings in excess of
operating distributions received
from unconsolidated companies (5,535) (1,949) (189)
------- ------- -------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 159,195 95,135 78,620
------- ------- -------
Cash flows from investing activities:
Rental property development costs (195,088) (130,300) (128,879)
Acquisition of real estate
investments (324,203) (182,024) (83,047)
Acquisition of land held for
development and infrastructure
costs (101,220) (16,122) (38,361)
Recurring tenant improvements (7,985) (6,048) (4,312)
Recurring leasing costs (5,057) (3,032) (3,519)
Recurring building improvements (1,211) (780) (757)
Other deferred leasing costs (14,000) (7,308) (9,773)
Other deferred costs and other assets (8,894) 7,069 (6,452)
Proceeds from property sales, net 32,560 50,844 5,281
Distributions received from
unconsolidated companies 60,000 12,423 -
Net investment in and advances
to unconsolidated companies (32,226) (1,470) (19,750)
------- ------- -------
NET CASH USED BY
INVESTING ACTIVITIES (597,324) (276,748) (289,569)
Cash flows from financing activities:
Proceeds from issuance of
common shares, net 321,239 130,799 96,297
Proceeds from issuance of
preferred shares, net 146,050 72,288 -
Proceeds from indebtedness 100,000 142,200 150,051
Payments on indebtedness
including principal amortization (9,999) (84,677) (60,030)
Borrowings (repayments) on lines
of credit, net (14,000) (11,000) 45,000
Distributions to common shareholders (73,183) (56,163) (42,838)
Distributions to preferred
shareholders (12,485) (1,991) -
Distributions to minority interest (10,184) (8,719) (8,940)
Deferred financing costs (4,290) (1,517) (3,297)
------- ------- -------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 443,148 181,220 176,243
------- ------- --------
NET INCREASE (DECREASE)
IN CASH 5,019 (393) (34,706)
Cash and cash equivalents
at beginning of year 5,334 5,727 40,433
------- ------- -------
Cash and cash equivalents at
end of year $ 10,353 $ 5,334 $ 5,727
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 30 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Common
Preferred Shares Distributions
Shares and and Paid-in in Excess of
Paid-in Capital Capital Net Income Total
--------------- ----------- ------------- -----
<S> <C> <C> <C> <C>
BALANCE AT
DECEMBER 31, 1994 - $ 481,305 $(35,921) $ 445,384
Issuance of common
shares, net of
underwriting
discounts and
related costs of
$5,767 - 96,428 - 96,428
Acquisition of
minority interest - 796 - 796
Net income - - 35,019 35,019
Distributions to
common shareholders
($.96 per share) - - (42,838) (42,838)
------- --------- --------- ---------
BALANCE AT
DECEMBER 31, 1995 - 578,529 (43,740) 534,789
Issuance of common
shares, net of
underwriting
discounts and
related costs of
$7,299 - 130,951 - 130,951
Issuance of preferred
shares, net of
underwriting
discounts and
related costs of
$2,712 $ 72,288 - - 72,288
Acquisition of
minority interest - 21,627 - 21,627
Net income - - 53,431 53,431
Distributions to
preferred
shareholders - - (1,991) (1,991)
Distributions to
common
shareholders
($1.00 per share) - - (56,163) (56,163)
------- --------- ------ ---------
BALANCE AT
DECEMBER 31, 1996 72,288 731,107 (48,463) 754,932
Issuance of common
shares, net of
underwriting
discounts and
related costs of
$16,920 - 321,437 - 321,437
Issuance of preferred
shares, net of
underwriting
discounts and
related costs of
$3,950 146,050 - - 146,050
Acquisition of
minority interest - 19,446 - 19,446
Net income - - 78,484 78,484
Distributions to
preferred
shareholders - - (12,485) (12,485)
Distributions to
common
shareholders
($1.10 per share) - - (73,183) (73,183)
------- --------- ------- ---------
BALANCE AT
DECEMBER 31, 1997 $218,338 $1,071,990 $(55,647) $1,234,681
======= ========= ======= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
- 31 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) THE COMPANY
-------------
The Company was formed in 1985 and qualifies as a real estate
investment trust ("REIT") under the provisions of the Internal
Revenue Code. The Company is a self-administered REIT which owns
and operates a portfolio of industrial, office and retail
properties in the Midwest. The Company's primary markets are
Indianapolis, Indiana; Cincinnati, Cleveland and Columbus, Ohio;
St. Louis, Missouri; Chicago, Illinois; Minneapolis, Minnesota
and Nashville, Tennessee.
The Company's rental operations are conducted through Duke Realty
Limited Partnership ("DRLP"), of which the Company owns 87.4% at
December 31, 1997. The remaining interests in DRLP ("Limited
Partner Units") are exchangeable by the unitholders for shares of
the Company's common stock on a one-for-one basis. In addition,
the Company conducts operations through Duke Realty Services
Limited Partnership and Duke Construction Limited Partnership, in
which the Company's wholly-owned subsidiary, Duke Services, Inc.,
is the sole general partner.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
PRINCIPLES OF CONSOLIDATION
--------------------------
The consolidated financial statements include the accounts of the
Company and its majority-owned or controlled subsidiaries. The
equity interests in these majority-owned or controlled
subsidiaries not owned by the Company are reflected as minority
interests in the consolidated financial statements. All
significant intercompany balances and transactions have been
eliminated in the consolidated financial statements.
RECLASSIFICATIONS
------------------
Certain 1996 and 1995 balances have been reclassified to conform
with the 1997 presentation.
STOCK SPLIT
-----------
All shares and per share amounts have been adjusted to reflect
the Company's two-for-one stock split effected in August 1997.
SEGMENT OPERATIONS
-----------------
The Company is engaged in two business segments, the ownership
and rental of real estate investments ("Rental Operations") and
the providing of various real estate services such as property
management, maintenance, leasing and construction management to
third-party property owners ("Service Operations"). There are no
material intersegment sales or transfers between Rental
Operations and Service Operations. The identifiable assets of the
Service Operations consisting of cash, accounts receivable,
construction receivables and other assets as of December 31, 1997
and 1996 were $37.4 million and $20.7 million, respectively.
Capital expenditures related to Service Operations were $4.8
- 32 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
million, $2.0 million and $1.5 million for the years ended
December 31, 1997, 1996, and 1995, respectively. All remaining
assets, capital expenditures, depreciation, amortization and
investments in and advances to unconsolidated companies relate to
Rental Operations. The operations of each segment are reflected
separately on the Statement of Operations.
REAL ESTATE INVESTMENTS
-----------------------
Real estate investments are stated at the lower of cost less
accumulated depreciation or fair value if impairment is
identified. Buildings and land improvements are depreciated on
the straight-line method over 40 years, and tenant improvement
costs are depreciated on the straight-line method over the term
of the related lease.
All direct and indirect costs, including interest and real estate
taxes clearly associated with the acquisition, development,
construction or expansion of real estate investments are
capitalized as a cost of the property and depreciated over the
estimated useful life of the related asset.
The Company evaluates its real estate investments upon occurrence
of significant changes in the operations, but not less than
annually, to assess whether any impairment indications are
present, including recurring operating losses and significant
adverse changes in legal factors or business climate that affect
the recovery of the recorded value. If any real estate investment
is considered impaired, a loss is provided to reduce the carrying
value of the property to its estimated fair value.
CASH EQUIVALENTS
----------------
Highly liquid investments with a maturity of three months or less
when purchased are classified as cash equivalents.
DEFERRED COSTS
-------------
Costs incurred in connection with obtaining financing are
amortized on the straight-line method over the term of the
related loan. All direct and indirect costs associated with the
rental of real estate projects owned by the Company are amortized
over the term of the related lease. Unamortized costs are charged
to expense upon the early termination of the lease or upon early
payment of the financing.
Prepaid interest is amortized to interest expense using the
effective interest method over the terms of the related loans.
REVENUES
-------
Rental Operations
-----------------
Rental income from leases with scheduled rental increases during
their terms is recognized for financial reporting purposes on a
straight-line basis.
- 33 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Service Operations
------------------
Management fees are based on a percentage of rental receipts of
properties managed and are recognized as the rental receipts are
collected. Maintenance fees are based upon established hourly
rates and are recognized as the services are performed. Leasing
fees are based on a percentage of the total rental due
under completed leases and are generally recognized upon lease
execution. Construction management and development fees are
generally based on a percentage of costs and are recognized as
the project costs are incurred. Other income consists primarily
of payroll reimbursements for on-site property management
services.
NET INCOME PER COMMON SHARE
---------------------------
Basic net income per common share is computed by dividing net
income available for common shares by the weighted average number
of common shares outstanding for the period. Diluted net income
per share is computed by dividing the sum of net income available
for common shares and minority interest in earnings of unitholders,
by the sum of the weighted average number of common shares and
dilutive potential common shares outstanding for the period.
The following table reconciles the components of basic and
diluted net income per share:
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Basic net income available for
common shares $65,999 $50,872 $35,019
Minority interest in earnings
of unitholders 7,574 7,184 6,530
------ ------ ------
Diluted net income available for
common shares and dilutive
potential shares $73,573 $58,056 $41,549
====== ====== ======
Weighted average number of common
shares outstanding 66,427 56,134 45,358
Weighted average partnership
units outstanding 7,715 7,826 8,224
Dilutive shares for long-term
compensation plans 851 438 220
------ ------ ------
Weighted average number of common
shares and dilutive potential common
shares 74,993 64,398 53,802
====== ====== ======
</TABLE>
FEDERAL INCOME TAXES
------------------
The Company qualifies and intends to continue to qualify as a
REIT under the Internal Revenue Code. As a REIT, the Company is
allowed to reduce taxable income by all or a portion of its
distributions to shareholders. As deductible distributions have
exceeded taxable income, no provision for federal income taxes
has been made in the accompanying consolidated financial
statements.
Earnings and profits, which determine the taxability of dividends
to shareholders, differ from net income reported for financial
reporting purposes primarily because of different depreciable
lives and bases of rental properties and differences in the
timing of recognition of earnings upon disposition of properties.
- 34 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
A summary of the taxable nature of the Company's dividends for
the three years ended December 31 is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Total dividends per share $1.10 $1.00 $ .96
==== ==== ====
Percent taxable as ordinary income 100.00% 99.10% 85.51%
Percent taxable as long-term
capital gains - - .82%
Percent non-taxable as return
of capital - .90% 13.67%
------- ------- -------
100.00% 100.00% 100.00%
======= ======= =======
</TABLE>
Dividends per share of $.97, $.89 and $.74 were required for the
Company to maintain its REIT status in 1997, 1996 and 1995,
respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The fair values of the Company's financial instruments, including
accounts receivable, accounts payable, accrued expenses, mortgage
debt, unsecured notes payable, lines of credit and other
financial instruments, generally determined using the present
value of estimated future cash flows using a discount rate
commensurate with the risks involved, approximate their carrying
or contract values.
USE OF ESTIMATES
----------------
The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from those
estimates.
DERIVATIVE FINANCIAL INSTRUMENTS
--------------------------------
The Company may enter into derivative financial instruments such
as interest rate swaps and treasury locks in order to mitigate
its interest rate risk on a related financial instrument. The
Company has designated these derivative financial instruments as
hedges and applies deferral accounting as the instrument to be
hedged exposes the Company to interest rate risk and the
derivative financial instrument reduces that exposure. Gains and
losses related to the derivative financial instrument are
deferred and amortized to interest expense over the term of the
hedged instrument.
(3) Related Party Transactions
--------------------------
The Company provides management, leasing, construction and other
tenant related services to partnerships in which certain
executive officers have continuing ownership interests. The
Company was paid fees totaling $3.3 million, $3.2 million and
$2.8 million for such services in 1997, 1996 and 1995,
respectively. Management believes the terms for such services
are equivalent to those available in the market. The Company has
an option to purchase the executive officers' interest in each of
these properties which expires October 2003. The option price of
each property was established at the date the options were
granted.
- 35 -
<PAGE>
(4) Acquisitions of Real Estate Property Investments
-------------------------------------------------
In October 1997, the Company acquired a 982,000 square foot
suburban office and industrial portfolio and undeveloped land
from and the operating personnel of an independent real estate
developer and operator in St. Louis, Missouri. The purchase price
of this portfolio was approximately $147.7 million which included
the assumption of $77.8 million of mortgage debt, the issuance of
$40.8 million of Limited Partner Units, the assumption of
approximately $1.2 million of accrued taxes and other
liabilities, and $27.9 million of cash.
Also in October 1997, the Company acquired a 3.2 million square
foot industrial and suburban office portfolio and the operating
personnel from an independent real estate developer and
operator in Minneapolis, Minnesota. The purchase price of this
portfolio was approximately $144.7 million which included the
assumption of $93.1 million of mortgage debt, the issuance of
$48.5 million of Limited Partner Units, the assumption of
approximately $1.8 million of accrued taxes and other
liabilities, and $1.3 million of cash.
(5) Investments in Unconsolidated Companies
---------------------------------------
The Company has equity interests in unconsolidated partnerships
and joint ventures which own and operate rental properties and
hold land for development in the Midwest. The equity method of
accounting is used for these investments in which the Company has
the ability to exercise significant influence over operating and
financial policies. Any difference between the carrying amount of
these investments and the underlying equity in net assets is
amortized to equity in earnings of unconsolidated companies over
40 years. The cost method of accounting is used for non-majority
owned joint ventures over which the Company does not have the
ability to exercise significant influence. The difference between
the cost method and the equity method for such ventures does not
significantly affect the financial position or results of
operations of the Company.
In 1995, the Company acquired its unaffiliated partner's 50%
interest in a joint venture which owned two suburban office
rental properties (one of which was under construction as of
December 31, 1995) and 40.3 acres of land held for development.
The Company accounted for the acquisition of the 50% interest
using the purchase method with its recorded investment in the
properties equal to the sum of the balance of its investment in
and advances to the joint venture at the date of acquisition, the
net liabilities assumed and cash paid to the joint venture
partner amounting to $24.4 million.
On December 28, 1995, the Company formed a joint venture (Dugan
Realty LLC) with an institutional real estate investor and
purchased 25 industrial buildings totaling approximately 2.3
million square feet. Upon formation of the venture, the Company
contributed approximately 1.4 million square feet of recently
developed and acquired industrial properties, 113 acres of
recently acquired land held for future development at an agreed
value of $50.8 million, and approximately $16.7 million of cash
for a 50.1% interest in the joint venture. The Company's recorded
investment at December 31, 1995 in the joint venture of $59.4
million is the sum of the carrying value of the properties, land
and cash contributed. The Company's joint venture partner
contributed cash of $67.5 million for its 49.9% interest in
the venture. The cash contributed by the Company and the joint
venture partner was used to purchase the 25 industrial buildings
noted above. The recently acquired industrial properties and the
undeveloped land which were contributed were acquired as part of
the acquisition of Park Fletcher, Inc.,
- 36 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
an Indianapolis, Indiana based real estate development and
management company. The acquisition was accounted for under the
purchase method. The recorded carrying value of the acquired
properties and land was equal to the net liabilities assumed
plus cash paid plus mortgage indebtedness assumed of $17.4
million. The fair value of the property exceeds the Company's
recorded investment. The operating results of the acquired
properties and land have been included in the consolidated
operating results subsequent to the date of acquisition. The
Company completed the development of 1.1 million square feet of
property in 1996 and contributed these properties to the joint
venture at an agreed value of $24.9 million. The Company recorded
its investment in the joint venture related to this additional
contribution at its carrying value of $20.5 million. The joint
venture partner contributed cash of $12.4 million to the venture,
which equaled 49.9% of the agreed value of the properties contributed.
The cash was distributed to the Company and reduced its recorded
investment in the venture. During 1997, the Company contributed an
additional six buildings totaling two million square feet with an
agreed value of $60.8 million and received a cash distribution of $60
million from the proceeds of a mortgage loan received in May of 1997.
The joint venture partner contributed $753,000 of cash to the venture
to maintain proportionate ownership interest. The Company accounts
for its investment in this joint venture on the equity method because
the joint venture partner's approval is required for all major
decisions, and the joint venture partner has equal control
regarding the primary day-to-day operations of the venture.
In May 1997, the Company formed a joint venture
(Dugan/Office, LLC) with an institutional real estate investor,
to which each venture partner contributed $32.2 million in cash
for a 50% ownership interest. Simultaneously, the contributed
cash was used to purchase office property consisting of
approximately 345,000 square feet and 17 acres of undeveloped
land.
Combined summarized financial information of the companies which
are accounted for by the equity method as of December 31, 1997
and December 31, 1996 and for the years ended December 31, 1997,
1996, and 1995 are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
--------- --------
<S> <C> <C>
Land, buildings and tenant
improvements, net $322,799 $181,337
Land held for development 14,261 7,975
Other assets 10,707 7,874
------- -------
$347,767 $197,186
======= =======
Property indebtedness $ 94,982 $ 25,285
Other liabilities 12,866 6,457
------- -------
107,848 31,742
Owners' equity 239,919 165,444
------- -------
$347,767 $197,186
======= =======
</TABLE>
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Rental income $29,709 $21,880 $3,398
====== ====== =====
Net income $12,481 $ 9,761 $ 363
====== ====== =====
</TABLE>
- 37 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Investments in unconsolidated companies include $6.1 million at
December 31, 1997 and 1996 related to joint ventures accounted
for on the cost method. Included in equity in earnings of
unconsolidated companies are distributions from a joint venture
accounted for on the cost method totaling $947,000, $735,000 and
$521,000 in 1997, 1996 and 1995, respectively.
(6) INDEBTEDNESS
------------
<TABLE>
<CAPTION>
Indebtedness at December 31 consists of the following (in
thousands):
1997 1996
--------- ----------
<S> <C> <C>
Mortgage note with monthly payments of $668
including principal and interest at 8.50%
due in 2003 $ 75,882 $ 77,381
Mortgage note with monthly payments of
interest of $436 through August 1997.
Thereafter, monthly payments of $471 including
principal and interest at 8.72% due in 2001 59,824 60,000
Mortgage note with monthly payments at 30-day
LIBOR + .75% with monthly principal payments
ranging from $63 to $165 due in 1999 31,950 32,700
Mortgage note with monthly payments of interest
at 7.25% due in 1998 25,500 25,500
Mortgage note with monthly payments of interest at
LIBOR + .80% due in 2000 20,000 -
Mortgage note with monthly payments of $165
including principal and interest at 8.19%
due in 2017 19,097 19,500
Mortgage note with monthly payments of $104
including principal and interest at 6.80%
due in 1998 15,214 15,423
Mortgage notes with monthly payments in varying
amounts including interest at rates ranging
from 4.89% to 10.25% due in varying amounts
through 2017 30,424 21,311
Mortgage notes from the same lender with monthly
payments in varying amounts including interest
at rates ranging from 7.87% to 8.70% due in
varying amounts through 2012 49,534 -
Mortgage notes from the same lender with monthly
payments in varying amounts including interest
at rates ranging from 7.63% to 7.96% due in
varying amounts through 2012 32,694 -
Demand secured line of credit with monthly
payments of interest at 30-day LIBOR + .65% 7,000 10,000
-------- -------
Total secured debt 367,119 261,815
-------- -------
Unsecured notes with semi-annual payments of
interest at 7.28% due in 2000 40,000 40,000
Unsecured notes with semi-annual payments of
interest at 7.25% (effective rate of 7.33%)
due in 2002 50,000 50,000
Unsecured notes with semi-annual payments of
interest at 7.14% due in 2004 50,000 50,000
Unsecured notes with semi-annual payments of
interest at 7.37% (effective rate
of 7.52%) due in 2005 100,000 100,000
- 38 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(6)INDEBTEDNESS (CON'T)
1997 1996
-------- --------
Unsecured notes with semi-annual
payments of interest at 6.95%
(effective rate of 7.35%) due 2004 $100,000 $ -
Unsecured line of credit with monthly
payments of interest at 30-day LIBOR
+ .80% due in 2001 13,000 24,000
------- -------
Total unsecured debt 353,000 264,000
------- -------
Total indebtedness $720,119 $525,815
======= =======
</TABLE>
As of December 31, 1997, the $367.1 million of secured debt is
collateralized by rental properties with a net carrying value of
$641.9 million.
In April 1995, the Company obtained an unsecured line of credit in
the aggregate amount of $100 million which required interest at 30-
day LIBOR plus 2.00% (effective rate of 7.69% as of December 31,
1995). In 1996, the Company increased the amount available under the
line to $150 million and reduced the borrowing rate to LIBOR plus
1.25% (effective rate of 6.75% as of December 31, 1996). In 1997,
the Company increased the amount available under the line to $200
million and reduced the borrowing rate to LIBOR plus .80% (effective
rate of 6.74% as of December 31, 1997). The unsecured line of credit
matures in April 2001.
The Company has an interest rate swap agreement (the "Agreement") on
$33.0 million of the Company's outstanding mortgage debt to
effectively fix the interest rate on a portion of its floating rate
debt. Under the Agreement, the Company pays or receives the
difference between a fixed rate of 5.19% and a floating rate of 30-
day LIBOR plus 75% based on the notional principal amount of $33.0
million. The amount paid or received under the Agreement is included
in interest expense on a monthly basis. The Agreement matures along
with the related mortgage loan in December 1999. The Agreement will
stay in place until maturity unless the 30-day LIBOR rate on the
date of monthly repricing exceeds 6.25% which will cause a
termination of the Agreement. The 30-day LIBOR rate at December 31,
1997 was 5.94%. The estimated fair value of the Agreement at
December 31, 1997 was $428,000. The fair value was estimated by
discounting the expected cash flows to be received under the
Agreement using rates currently available for interest rate swaps of
similar terms and maturities.
The Company has a $75.0 million ("Notional Principal") forward
Treasury Lock Agreement (the "Treasury Lock") which is intended to
fix the effective interest rate of future financings by the Company.
Under the Treasury Lock, the Company will pay or receive the
difference between a fixed rate of 5.86% and the ten year treasury
rate as of February 26, 1998 (the "Determination Date"). The ten
year treasury rate at December 31, 1997 was 5.74%. The estimated
fair value of the Treasury Lock at December 31, 1997 was ($672,000).
The fair value was estimated by multiplying the $75.0 million
Notional Principal times the present value of the December 31, 1997
rate difference based upon semi-annual corresponding periods over a
ten year term.
- 39 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
At December 31, 1997, scheduled amortization and maturities of all
indebtedness for the next five years and thereafter are as follows
(in thousands):
<TABLE>
<CAPTION>
Year Amount
---- ---------
<S> <C>
1998 $ 54,509
1999 36,330
2000 71,112
2001 93,486
2002 56,433
Thereafter 408,249
--------
$720,119
=======
</TABLE>
Cash paid for interest in 1997, 1996, and 1995 was $41.9 million,
$35.5 million, and $22.1 million, respectively. Total interest
capitalized in 1997, 1996 and 1995 was $6.0 million, $5.5 million
and $4.2 million, respectively.
(7) LEASING ACTIVITY
----------------
Future minimum rents due to the Company under non-cancelable
operating leases at December 31, 1997 are scheduled as follows (in
thousands):
<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
1998 $ 236,190
1999 219,555
2000 190,997
2001 162,266
2002 131,676
Thereafter 582,769
---------
$1,523,453
=========
</TABLE>
In addition to minimum rents, certain leases require reimbursements
of specified operating expenses which amounted to $33.8 million,
$19.7 million, and $12.7 million for the years ended December 31,
1997, 1996 and 1995, respectively.
(8) EMPLOYEE BENEFIT PLANS
----------------------
The Company maintains a 401(k) plan for the benefit of its full-time
employees. The Company matches the employees' contributions up to two
percent of the employees' salary and may also make annual discretionary
contributions. Total expense recognized by the Company was $882,000,
$328,000 and $245,000 for the years ended 1997, 1996 and 1995,
respectively.
The Company makes contributions to a contributory health and welfare
plan as necessary to fund claims not covered by employee
contributions. Total expense recognized by the Company related to
this plan was $1,245,000, $1,193,000 and $882,000 for 1997, 1996 and
1995, respectively. Included in total expense is an estimate based
on historical experience of the effect of claims incurred but not
reported as of year-end.
- 40 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(9) Shareholders' Equity
--------------------
The Company periodically accesses the public equity markets to fund
the development and acquisition of additional rental properties. The
proceeds of these offerings are contributed to DRLP in exchange for
additional interest in the partnership. A summary of the public
equity issuances during the three-year period ended December 31,
1997 is as follows (in thousands, except per share price):
<TABLE>
<CAPTION>
Offering Price
Shares Issued Per Share Net Proceeds
------------- ---------- ------------
<S> <C> <C> <C>
Common Stock
----------
1995 Offering 7,456 $ 13.69 $ 96,273
1996 Offering 8,800 15.06 125,251
1997 Offering 3,000 20.00 56,725
1997 Offering 10,542 21.44 214,004
1997 Offering 926 21.50 18,894
1997 Offering 449 22.25 9,525
Preferred Stock
---------------
1996 9.10%
Dividend Rate 300 $250.00 $ 72,288
1997 7.99%
Dividend Rate 300 $500.00 $146,050
</TABLE>
During the three years ended December 31, 1997, the Company acquired
a portion of the minority interest in DRLP through the issuance of
shares of common stock for a like number of Limited Partner Units.
The acquisition of the minority interest was recorded under the
purchase method with assets acquired reflected at the fair market
value of the Company's common stock on the date of acquisition. The
following acquisition amounts were allocated to rental property,
undeveloped land and investments in unconsolidated companies based
on their estimated fair values (in thousands):
<TABLE>
<CAPTION>
Common
Shares Minority
Issued Interest Acquired
------ -----------------
<S> <C> <C>
1995 56 $ 796
1996 1,506 21,627
1997 971 19,446
</TABLE>
In August 1996, the Company issued 300,000 shares of 9.10% Series A
Cumulative Redeemable Preferred Shares receiving net proceeds of
approximately $72.3 million. On or after August 31, 2001, the Series
A Preferred Shares may be redeemed for cash at the option of the
Company, in whole or in part at a redemption price of $250.00 per
share plus accrued and unpaid distributions, if any, to the
redemption date. The redemption price of the Series A Preferred
Shares (other than any portion thereof consisting of accrued and
unpaid distributions) may only be paid from the proceeds of other
capital shares of the Company, which may include other classes or
series of preferred shares. The Series A Preferred Shares have no
stated maturity, are not subject to sinking fund or mandatory
redemption provisions and are not convertible into any other
securities of the Company. Distributions on the Series A Preferred
Shares are cumulative from the date of original issue and are
payable quarterly on or about
- 41 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
the last day of February, May, August and November of each year,
commencing on December 2, 1996, at the rate of 9.10% of the
liquidation preference per annum (equivalent to $22.75 per annum per
share).
In July 1997, the Company issued 300,000 shares of 7.99% Series B
Cumulative Step-Up Premium Rate Preferred Shares ("Series B
Preferred Shares") receiving net proceeds of approximately $146.1
million. On or after September 30, 2007, the Series B Preferred
Shares may be redeemed for cash at the option of the Company, in
whole or in part at a redemption price of $500.00 per share plus
accrued and unpaid distributions, if any, to the redemption date.
The redemption price of the Series B Preferred Shares (other than
any portion thereof consisting of accrued and unpaid distributions)
may only be paid from the proceeds of other capital shares of the
Company, which may include other classes or series of preferred
shares. The Series B Preferred Shares have no stated maturity, are
not subject to sinking fund or mandatory redemption provisions and
are not convertible into any other securities of the Company.
Distributions on the Series B Preferred Shares are cumulative from
the date of original issue and are payable quarterly on or about the
last day of March, June, September, and December of each year,
commencing on September 30, 1997, at the rate of 7.99% of the
liquidation preference per annum (equivalent to $39.95 per annum per
share) through September 30, 2012 and at a rate of 9.99% of the
liquidation preference per annum (equivalent to $49.95 per annum
per share) thereafter.
(10) STOCK BASED COMPENSATION
-------------------------
The Company has four stock-based compensation plans, which are
described below. The Company applies APB Opinion No. 25 and related
interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized for its fixed stock option
plans. The Company charges compensation costs against its income
for its two performance based stock plans. If compensation cost for
the Company's four stock-based compensation plans had been
determined consistent with FASB Statement No. 123, the Company's
net income and net income per share for the years ended December 31
would have been reduced to the pro forma amounts indicated below:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C> <C>
Net income As reported $65,999 $50,872 $35,019
Pro forma 65,825 50,723 34,963
Basic net income As reported .99 .91 .77
per share Pro forma .99 .91 .77
Diluted net income As reported .98 .90 .77
per share Pro forma .98 .90 .77
</TABLE>
The effects of applying FASB Statement No. 123 in this pro forma
disclosure are not indicative of future amounts. The Statement does
not apply to awards prior to 1995, and additional awards in future
years are anticipated.
- 42 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
FIXED STOCK OPTION PLANS
The Company has two fixed stock options plans, the Duke Realty Services
1993 Stock Option Plan (the "1993 Plan") and the 1995 Key Employees'
Stock Option Plan of Duke Realty Investments, Inc. (the "1995 Plan").
Under the 1995 Plan, the Company is authorized to grant options to its
employees for up to 1,116,800 shares of common stock, as well as up to an
additional 800,000 shares to the extent grants under the 1993 Plan lapse,
are forfeited or are otherwise terminated. The 1995 Plan was adopted in
1995 subject to shareholder approval, which approval was received in
1996. Under the 1993 Plan, the Company was authorized to grant
options to its employees for up to 2,630,000 shares of common stock,
of which 1,178,700 are outstanding as of December 31, 1997. No
further grants are permitted under the 1993 Plan.
Under both plans, the exercise price of each option equals the
market price of the Company's stock on the date of grant, and each
option's maximum term is ten years. Options granted under both plans
vest at 20% per year, or, if earlier, upon the death, retirement or
disability of the optionee or a change in control of the Company.
The fair value of each option for all grants is estimated on the
date of grant using the Black-Scholes option-pricing model with the
following assumptions used: Dividend yield of 5.8% for 1997 grants
and 6.0% for 1996 and 1995 grants; expected volatility of 19% for
all grants; weighted average risk-free interest rates of 6.4%, 5.6%
and 6.8% for 1997, 1996 and 1995 grants, respectively; and weighted
average expected lives of 6.5 years, 7.9 years, 7.8 years for 1997,
1996 and 1995 grants, respectively.
A summary of the status of the Company's two fixed stock option
plans as of December 31, 1997, 1996 and 1995, and changes during the
years ended on those dates is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------------------- ------------------- -------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding,
beginning of
year 1,947,642 $12.89 1,732,138 $12.48 1,363,000 $11.87
Granted 346,008 20.09 246,914 16.06 450,938 14.21
Exercised (319,169) 11.98 (200) 12.94 (2,000) 11.87
Forfeited (47,101) 15.74 (31,210) 15.34 (79,800) 11.94
--------- --------- ---------
Outstanding, end
of year 1,927,380 14.26 1,947,642 12.89 1,732,138 12.48
========= ========= =========
Options
exercisable,
end of year 927,312 864,657 524,400
======= ======= =======
Weighted-average
fair value of
options granted
during the year $ 2.81 $ 1.96 $ 2.06
====== ====== ======
</TABLE>
The following table summarizes information about fixed stock options
outstanding at December 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------- -----------------------------
Weighted
Number Average Weighted Weighted
Range Outstanding Remaining Average Number Average
of Exercise at Contractual Exercise Exercisable Exercise
Prices 12/31/97 Life Price at 12/31/97 Price
- ----------- ----------- ----------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
$11.00-$12.00 967,500 5.76 $11.87 723,100 $11.87
$12.00-$17.00 625,698 7.67 14.83 204,212 14.54
$18.00-$23.00 330,682 9.23 20.08 0 N/A
$23.00-$25.00 3,500 9.84 23.06 0 N/A
- ------------- --------- -------
$11.00-$25.00 1,927,380 6.98 14.26 927,312 12.46
========= =======
</TABLE>
- 43 -
<PAGE>
DUKE REALTY INVESTMENTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Performance Based Stock Plans
-----------------------------
The Company has two performance based equity compensation plans.
Under the 1995 Dividend Increase Unit Plan (the "DIU Plan"),
Dividend Increase Units ("DIUs") are granted to key employees. The
value of DIUs exercised by employees is payable in company stock. A
maximum of 200,000 shares of Company stock may be issued under the
DIU Plan. The maximum term of all DIUs granted is ten years.
The value of each DIU when exercised is equal to the increase in the
Company's annualized dividend per share from the date of grant to
the date of exercise, divided by the "dividend yield." Dividend
yield is the annualized dividend per share divided by the market
price per share of the Company's common stock at the date of grant.
DIUs are subject to the same vesting schedule as stock options
issued under the 1995 Plan. The compensation cost that has been
charged against income for the DIU Plan was $1,474,000, $152,000 and
$30,000 for 1997, 1996 and 1995, respectively. A summary of the
status of DIUs granted by the Company is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
DIUs outstanding,
beginning of year 445,282 220,938 -
Granted 346,008 246,914 220,938
Forfeited (34,101) (22,570) -
------- ------- -------
DIUs outstanding,
end of year 757,189 445,282 220,938
======= ======= =======
DIUs exercisable,
end of year 126,681 - -
======= ======= =======
</TABLE>
Under the 1995 Shareholder Value Plan (the "SV Plan"), the Company
may grant awards in specified dollar amounts to key employees. The
award is payable to the employee on the third anniversary of the
date of grant. One-half of the award is payable in common stock of
the Company, and one-half is payable in cash. A maximum of 200,000
shares of Company stock may be issued under the SV Plan.
The initial dollar amount of each award granted under the SV Plan is
adjusted upward or downward based on a comparison of the Company's
cumulative total shareholder return for the three year period as
compared to the cumulative total return of the S&P 500 and the
NAREIT Equity REIT Total Return indices. The award is not payable
upon the employee's termination of employment for any reason other
than retirement, death, disability or a change in control of the
Company.
The following table summarizes information about the initial amount
of SV Plan awards granted in 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Amount of SVP initial awards,
beginning of year $ 925,578 $456,080 $ -
Granted 616,900 521,165 456,080
Forfeited (177,750) (51,667) -
--------- ------- -------
Amount of SVP initial awards,
end of year $1,364,728 $925,578 $456,080
========= ======= =======
</TABLE>
The Company believes that it is not possible to reasonably estimate
the fair value of the common stock to be issued under the DIU and SV
Plans and, therefore, computes compensation cost for the Plans based
on the intrinsic value of the awards as if they were exercised at
the end of each applicable reporting period. The compensation cost
that has been charged against income for the SV Plan was $1,041,000,
and $361,000 and $152,000 for 1997, 1996 and 1995, respectively.
- 44 -
<PAGE>
3. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
3.1 Articles of Incorporation of Registrant are incorporated herein by
reference to Exhibit 3.1 to the registration statement on Form S-3,
as amended, filed on July 28, 1995, as File No. 33-61361 (the
"1995 Registration Statement").
3.2 Amendment dated August 16, 1996 to Articles of Incorporation of
Registrant.
3.3 Amendment dated June 12, 1997 to Articles of Incorporation of
Registrant.
3.4 Amendment dated July 11, 1997 to Articles of Incorporation of
Registrant.
3.5 By-Laws of Registrant are incorporated herein by reference to
Exhibit 3.2 to the 1995 Registration Statement.
3.6 Amendment dated October 23, 1997 to By-laws of Registrant.
4.1 Instruments Defining Rights of Security Holders, including
Indentures, are incorporated herein by reference to Articles V,
VI, VIII, IX and X of Registrant's Articles of Incorporation.
4.2 Indenture between Duke Realty Limited Partnership and The First
National Bank of Chicago, Trustee, and the First Supplement
thereto, are incorporated herein by reference to Exhibits 4.1 and
4.2 to the report of the Registrant on Form 8-K filed September 19,
1995 and the Second Supplement thereto, is incorporated herein by
reference to Exhibit 4 to the report of the Registrant on
Form 8-K filed July 12, 1996.
10.1 Amended and Restated Agreement of Limited Partnership of Duke
Realty Limited Partnership (the "Operating Partnership") is
incorporated herein by reference to Exhibit 10.1 to the
registration statement on Form S-2, as amended, filed on June 8,
1993, as File No. 33-64038 (the "1993 Registration Statement).
10.2 First and Second Amendments to Amended and Restated
Agreement of Limited Partnership of the Operating Partnership are
incorporated herein by reference to Exhibit 10.2 to the Annual
Report on Form 10-K for the year ended December 31, 1995, and the
Third Amendment to Amended and Restated Agreement of Limited
Partnership of the Operating Partnership is incorporated herein
by reference to Exhibit 10 to the Report of the Registrant on
Form 8-K filed August 15, 1996.
10.3 Fourth Amendment dated July 11, 1997 to Amended and Restated
Agreement of Operating Partnership of the Registrant
10.4 Second Amended and Restated Agreement of Limited Partnership of
Duke Realty Services Limited Partnership (the "Services
Partnership") are incorporated herein by reference to Exhibit
10.3 to the Annual Report on Form 10-K for the year ended
December 31, 1995.
10.5 Promissory Note of the Services Partnership is incorporated
herein by reference to Exhibit 10.3 to the 1993 Registration
Statement.
- 45 -
<PAGE>
10.6 Duke Realty Services Limited Partnership 1993 Stock Option Plan
is incorporated herein by reference to Exhibit 10.4 to the 1993
Registration Statement.
10.7 Acquisition Option Agreement relating to certain properties not
contributed to the Operating Partnership by Duke Associates (the
"Excluded Properties") is incorporated herein by reference to
Exhibit 10.5 to the 1993 Registration Statement.
10.8 Management Agreement relating to the Excluded Properties is
incorporated herein by reference to Exhibit 10.6 to the 1993
Registration Statement.
10.9 Indemnification Agreement is incorporated herein by
reference to Exhibit 10.11 to the 1993 Registration Statement.
10.10 1995 Key Employee Stock Option Plan is incorporated herein
by reference to Exhibit 10.13 to the Annual Report on Form 10-K
for the year ended December 31, 1995.
10.11 1995 Dividend Increase Unit Plan is incorporated herein by
reference to Exhibit 10.14 to the Annual Report on Form 10-K for
the year ended December 31, 1995.
10.12 1995 Shareholder Value Plan is incorporated herein by
reference to Exhibit 10.15 to the Annual Report on Form 10-K for
the year ended December 31, 1995.
21. List of Subsidiaries of Registrant.
23. Consent of KPMG Peat Marwick, LLP
24. Executed powers of attorney of certain directors.
27. Financial Data Schedule
99.1 Selected Quarterly Financial Information
- 46 -
<PAGE>
The Company will furnish to any security holder, upon written request,
copies of any exhibit incorporated by reference, for a fee of 15 cents
per page, to cover the costs of furnishing the exhibits. Written
request should include a representation that the person making the
request was the beneficial owner of securities entitled to vote at the
1998 Annual Meeting of Shareholders.
(b) Reports on Form 8-K
Report on Form 8-K dated November 10, 1997 including Item 7 and
Balance Sheet and Statement of Operations.
Report on Form 8-K dated December 22, 1997 including Item 7.
- 47 -
<PAGE>
DUKE REALTY INVESTMENTS, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
<TABLE>
<CAPTION>
BUILDING ENCUMBER-
LOCATION / DEVELOPMENT BUILDING TYPE ANCES
---------------------- --------- -------- ---------
INDIANAPOLIS, INDIANA
---------------------
<S> <C> <C> <C>
PARK 100 BUSINESS PARK BUILDING #32 RETAIL $ -
PARK 100 BUSINESS PARK BUILDING #34 OFFICE -
PARK 100 BUSINESS PARK BUILDING #38 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #79 INDUSTRIAL 1,075
PARK 100 BUSINESS PARK BUILDING #80 INDUSTRIAL 1,320
PARK 100 BUSINESS PARK BUILDING #83 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #84 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #95 INDUSTRIAL 3,187
PARK 100 BUSINESS PARK BUILDING #96 INDUSTRIAL 8,222
PARK 100 BUSINESS PARK BUILDING #97 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #98 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #100 INDUSTRIAL 1,554
PARK 100 BUSINESS PARK BUILDING #107 INDUSTRIAL 1,560
PARK 100 BUSINESS PARK BUILDING #109 INDUSTRIAL 1,059
PARK 100 BUSINESS PARK BUILDING #116 OFFICE -
PARK 100 BUSINESS PARK BUILDING #118 OFFICE 1,215
PARK 100 BUSINESS PARK BUILDING #119 OFFICE -
PARK 100 BUSINESS PARK BUILDING #121 RETAIL -
PARK 100 BUSINESS PARK BUILDING #122 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #125 INDUSTRIAL 3,627
PARK 100 BUSINESS PARK BUILDING #126 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #127 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #128 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #129 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #130 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #131 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #132 INDUSTRIAL -
PARK 100 BUSINESS PARK BUILDING #133 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 1 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 2 INDUSTRIAL -
GEORGETOWN ROAD BUILDING 3 INDUSTRIAL -
PARK 100 BUSINESS PARK UPS LAND LEASE LAND LEASE -
PARK 100 BUSINESS PARK NORGATE LAND
LEASE LAND LEASE -
PARK 100 BUSINESS PARK KENNY ROGERS
LAND LEASE LAND LEASE -
PARK 100 BUSINESS PARK SCHAHET HOTELS
LAND LEASE LAND LEASE -
PARK 100 BUSINESS PARK NORCO LAND LEASE LAND LEASE -
PARK 100 BUSINESS PARK ZOLLMAN LAND
LEASE LAND LEASE -
SHADELAND STATION 7351 SHADELAND OFFICE -
SHADELAND STATION BLDG #204/205 INDUSTRIAL 1,796
SHADELAND STATION 7240 SHADELAND OFFICE 2,578
SHADELAND STATION 7330 SHADELAND OFFICE 2,245
SHADELAND STATION 7369 SHADELAND OFFICE -
SHADELAND STATION 7340 SHADELAND OFFICE 1,401
SHADELAND STATION 7400 SHADELAND OFFICE 1,956
CASTLETON CORNER CUB PLAZA RETAIL -
CASTLETON SHOPPING CTR. MICHAEL'S PLAZA RETAIL 2,360
SOUTH PARK, INDIANA BUILDING #1 OFFICE 1,506
SOUTH PARK, INDIANA BUILDING #2 INDUSTRIAL 2,138
SOUTH PARK, INDIANA BUILDING #3 OFFICE 1,015
SOUTH PARK, INDIANA BRYLANE PARKING
LOT LEASE OFFICE -
GREENWOOD CORNER GREENWOOD CORNER RETAIL -
GREENWOOD CORNER 1st INDIANA BANK
BRANCH RETAIL 252
ST. FRANCIS ST. FRANCIS MEDICAL -
COMMUNITY MOB COMMUNITY MOB MEDICAL -
HILLSDALE TECHNECENTER BUILDING #4 INDUSTRIAL 2,588
HILLSDALE TECHNECENTER BUILDING #5 INDUSTRIAL 1,704
HILLSDALE TECHNECENTER BUILDING #6 INDUSTRIAL 2,094
KEYSTONE AT THE CROSSING 8465 KEYSTONE OFFICE -
WOODFIELD AT THE CROSSING WOODFIELD II OFFICE -
WOODFIELD AT THE CROSSING WOODFIELD III OFFICE -
KEYSTONE AT THE CROSSING 8555 KATC OFFICE -
KEYSTONE AT THE CROSSING 3520 COMMERCE
CRSG OFFICE -
ONE PARKWOOD ONE PARKWOOD OFFICE -
TWO PARKWOOD TWO PARKWOOD OFFICE -
THREE PARKWOOD THREE PARKWOOD OFFICE -
PALOMAR PALOMAR INDUSTRIAL -
FRANKLIN ROAD BUS. CTR. FRANKLIN ROAD
BUS. CTR. INDUSTRIAL -
NAMPAC BUILDING NAMPAC BUILDING INDUSTRIAL -
HAMILTON CROSSING BUILDING #1 INDUSTRIAL -
HAMILTON CROSSING BUILDING #2 INDUSTRIAL -
KEYSTONE AT THE CROSSING F.C. TUCKER BLDG. OFFICE -
PARK FLETCHER BUILDING #14 INDUSTRIAL -
- 48 -
<PAGE>
6060 GUION ROAD (VANSTAR) 6060 GUION ROAD
(VANSTAR) INDUSTRIAL -
NORTH AIRPORT PARK BUILDING #2 INDUSTRIAL -
4750 KENTUCKY AVENUE 4750 KENTUCKY
AVENUE INDUSTRIAL -
4316 WEST MINNESOTA 4316 WEST
MINNESOTA INDUSTRIAL -
FORT WAYNE, INDIANA
------------------
COLDWATER CROSSING COLDWATER
SHOPPES RETAIL 10,740
LEBANON, INDIANA
----------------
AMERICAN AIR FILTER AMERICAN
AIR FILTER INDUSTRIAL -
PURITY WHOLESALE PURITY WHOLESALE INDUSTRIAL -
PAMIDA PAMIDA INDUSTRIAL -
NASHVILLE, TENNESSEE
-------------------
KEEBLER BUILDING KEEBLER BUILDING INDUSTRIAL -
HAYWOOD OAKS TECHNECENTER BUILDING #2 INDUSTRIAL 1,055
HAYWOOD OAKS TECHNECENTER BUILDING #3 INDUSTRIAL 1,011
HAYWOOD OAKS TECHNECENTER BUILDING #4 INDUSTRIAL 1,175
HAYWOOD OAKS TECHNECENTER BUILDING #5 INDUSTRIAL 1,765
HAYWOOD OAKS TECHNECENTER BUILDING #6 INDUSTRIAL -
HAYWOOD OAKS TECHNECENTER BUILDING #7 INDUSTRIAL -
HAYWOOD OAKS TECHNECENTER BUILDING #8 INDUSTRIAL -
GREENBRIAR BUSINESS PARK GREENBRIAR INDUSTRIAL -
HEBRON, KENTUCKY
----------------
SOUTHPARK, KENTUCKY CR SERVICES INDUSTRIAL 2,866
SOUTHPARK, KENTUCKY BUILDING #1 INDUSTRIAL -
SOUTHPARK, KENTUCKY BUILDING #3 INDUSTRIAL -
SOUTHPARK, KENTUCKY REDKEN INDUSTRIAL 2,257
FLORENCE, KENTUCKY
------------------
EMPIRE COMMERCE EMPIRE COMMERCE INDUSTRIAL -
SOFA EXPRESS SOFA EXPRESS RETAIL -
CINCINNATI, OHIO
---------------
PARK 50 TECHNECENTER BUILDING #17 OFFICE -
PARK 50 TECHNECENTER BUILDING #20 INDUSTRIAL 3,903
PARK 50 TECHNECENTER BUILDING #25 INDUSTRIAL -
PARK 50 TECHNECENTER SDRC BUILDING OFFICE -
FIDELITY DRIVE DUN & BRADSTREET OFFICE 1,633
WORLD PARK BUILDING #5 INDUSTRIAL 2,144
WORLD PARK BUILDING #6 INDUSTRIAL 2,158
WORLD PARK BUILDING #7 INDUSTRIAL 2,600
WORLD PARK BUILDING #8 INDUSTRIAL 2,842
WORLD PARK BUILDING #9 INDUSTRIAL 1,656
WORLD PARK BUILDING #11 INDUSTRIAL 2,533
WORLD PARK BUILDING #14 INDUSTRIAL 1,928
WORLD PARK BUILDING #15 INDUSTRIAL -
WORLD PARK BUILDING #16 INDUSTRIAL 1,539
WORLD PARK BUILDING #18
(BEIERSDORF) INDUSTRIAL -
EASTGATE PLAZA EASTGATE PLAZA RETAIL -
FAIRFIELD BUS.CTR. BUILDING D INDUSTRIAL -
FAIRFIELD BUS.CTR. BUILDING E INDUSTRIAL -
UNIVERSITY MOVING UNIVERSITY MOVING INDUSTRIAL -
TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 OFFICE -
GOVERNOR'S PLAZA GOVERNOR'S PLAZA RETAIL -
GOVERNOR'S PLAZA KING'S MALL II RETAIL -
GOVERNOR'S PLAZA KOHLS RETAIL -
SOFA EXPRESS SOFA EXPRESS RETAIL -
- 49 -
<PAGE>
OFFICE MAX OFFICE MAX RETAIL -
312 ELM BUILDING 312 ELM OFFICE 31,950
311 ELM STREET ZUSSMAN OFFICE -
ENTERPRISE BUS. PARK BUILDING 1 INDUSTRIAL 4,071
ENTERPRISE BUS. PARK BUILDING 2 INDUSTRIAL 2,995
ENTERPRISE BUS. PARK BUILDING A INDUSTRIAL 433
ENTERPRISE BUS. PARK BUILDING B INDUSTRIAL 668
ENTERPRISE BUS. PARK BUILDING D INDUSTRIAL 1,316
312 PLUM STREET S & L DATA OFFICE -
TRIANGLE OFFICE PARK BUILDINGS #1 - #38 OFFICE 4,865
GOVERNOR'S HILL 8790 GOVERNOR'S
HILL OFFICE -
GOVERNOR'S HILL 8700 GOVERNOR'S
HILL OFFICE -
GOVERNOR'S HILL 8800 GOVERNOR'S
HILL OFFICE 1,558
GOVERNOR'S HILL 8600 GOVERNOR'S
HILL OFFICE 15,214
GOVERNOR'S POINTE 4770 GOVERNOR'S PTE. OFFICE 4,441
GOVERNOR'S POINTE 4700 BUILDING INDUSTRIAL 3,363
GOVERNOR'S POINTE 4900 BUILDING INDUSTRIAL 2,744
GOVERNOR'S POINTE 4705 GOVERNOR'S PTE. OFFICE -
GOVERNOR'S POINTE 4800 GOVERNOR'S PTE. OFFICE -
GOVERNOR'S POINTE LOWES RETAIL -
GOVERNOR'S POINTE ANTHEM PRESCRIPTION
MGMT. OFFICE -
GOVERNOR'S POINTE 4660 GOVERNOR'S PTE OFFICE -
BIGG'S SUPERCENTER BIGG'S SUPERCENTER RETAIL -
GOVERNOR'S POINTE 4605 GOVERNOR'S PTE OFFICE 10,442
MONTGOMERY CROSSING STEINBERG'S RETAIL -
MONTGOMERY CROSSING II SPORTS UNLIMITED RETAIL 2,601
GOVERNOR'S PLAZA KING'S AUTO MALL I RETAIL 3,050
MOSTELLER DIST. CTR. MOSTELLER DIST.
CTR. INDUSTRIAL -
MOSTELLER DIST. CTR. MOSTELLER DIST.
CTR. II INDUSTRIAL -
FRANCISCAN HEALTH FRANCISCAN HEALTH MEDICAL -
PERIMETER PARK BUILDING A INDUSTRIAL -
PERIMETER PARK BUILDING B INDUSTRIAL -
CREEK ROAD BUILDING 1 INDUSTRIAL -
CREEK ROAD BUILDING 2 INDUSTRIAL -
WEST LAKE CENTER WEST LAKE CENTER OFFICE -
EXECUTIVE PLAZA I EXECUTIVE PLAZA I OFFICE -
EXECUTIVE PLAZA II EXECUTIVE PLAZA II OFFICE -
LAKE FOREST PLACE LAKE FOREST PLACE OFFICE -
HUNTINGTON BANK HUNTINGTON BANK OFFICE -
OHIO NATIONAL OHIO NATIONAL OFFICE 19,097
CORNELL COMMERCE CORNELL COMMERCE INDUSTRIAL -
ONE ASHVIEW PLACE ONE ASHVIEW PLACE OFFICE -
REMINGTON PARK BLDG A OFFICE -
REMINGTON PARK BLDG B OFFICE -
BLUE ASH OFFICE CTR VI BLUE ASH OFFICE
CTR VI OFFICE -
SKYPORT BUSINESS PARK SKYPORT BUILDING
1 INDUSTRIAL -
APPLEBEES APPLEBEES LAND LEASE -
7910 KENTUCKY DRIVE 7910 KENTUCKY DR. INDUSTRIAL -
7920 KENTUCKY DRIVE 7920 KENTUCKY DR. INDUSTRIAL -
KENWOOD EXEC. CENTER KENWOOD EXEC. CTR. OFFICE -
CLEVELAND, OHIO
----------------
ROCK RUN - NORTH ROCK RUN-NORTH OFFICE 3,283
ROCK RUN - CENTER ROCK RUN - CENTER OFFICE 4,063
ROCK RUN - SOUTH ROCK RUN - SOUTH OFFICE 3,441
FREEDOM SQUARE I FREEDOM SQUARE I OFFICE -
FREEDOM SQUARE II FREEDOM SQUARE II OFFICE 6,878
CORPORATE PLAZA I CORPORATE PLAZA I OFFICE 8,372
CORPORATE PLAZA II CORPORATE PLAZA II OFFICE 7,155
ONE CORPORATE EXCHANGE ONE CORPORATE EXCH. OFFICE 5,089
FREEDOM SQUARE III FREEDOM SQUARE III OFFICE -
6111 OAK TREE 6111 OAK TREE OFFICE -
CORPORATE PLACE CORPORATE PLACE OFFICE -
CORPORATE CIRCLE CORPORATE CIRCLE OFFICE -
LANDERBROOK CORPORATE LANDERBROOK CORP. OFFICE -
DYMENT DYMENT INDUSTRIAL -
JOHNSON CONTROLS JOHNSON CONTROLS INDUSTRIAL -
SOLON INDUSTRIAL PARK 30600 CARTER INDUSTRIAL -
SOLON INDUSTRIAL PARK 6230 COCHRAN INDUSTRIAL -
SOLON INDUSTRIAL PARK 31900 SOLON-
FRONT INDUSTRIAL -
SOLON INDUSTRIAL PARK 5821 SOLON INDUSTRIAL -
SOLON INDUSTRIAL PARK 6161 COCHRAN INDUSTRIAL -
SOLON INDUSTRIAL PARK 5901 HARPER INDUSTRIAL -
- 50 -
<PAGE>
SOLON INDUSTRIAL PARK 29125 SOLON INDUSTRIAL -
SOLON INDUSTRIAL PARK 6661 COCHRAN INDUSTRIAL -
SOLON INDUSTRIAL PARK 6521 DAVIS INDUSTRIAL -
SOLON INDUSTRIAL PARK 31900 SOLON-REAR INDUSTRIAL -
CORPORATE CENTER I CORPORATE CTR I OFFICE -
CORPORATE CENTER II CORPORATE CTR II OFFICE -
COLUMBUS, OHIO
--------------
CORP. PARK AT TUTTLE CRSG LITEL OFFICE -
CORP. PARK AT TUTTLE CRSG STERLING 1 OFFICE -
CORP. PARK AT TUTTLE CRSG INDIANA INSURANCE OFFICE -
CORP. PARK AT TUTTLE CRSG STERLING 2 OFFICE -
CORP. PARK AT TUTTLE CRSG JOHN ALDEN LIFE INS. OFFICE -
CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH OFFICE -
CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT OFFICE -
CORP. PARK AT TUTTLE CRSG STERLING 3 OFFICE -
CORP. PARK AT TUTTLE CRSG NATIONWIDE OFFICE -
CORP. PARK AT TUTTLE CRSG LAZARUS GRND LEASE RETAIL -
CORP. PARK AT TUTTLE CRSG XEROX OFFICE -
SUN TV SUN TV INDUSTRIAL -
SOUTH POINTE BUILDING D INDUSTRIAL -
SOUTH POINTE BUILDING E INDUSTRIAL -
PET FOODS BUILD-TO-SUIT PET FOODS DIST. INDUSTRIAL 3,352
GALYAN'S GALYAN'S RETAIL 3,011
TUTTLE RETAIL CENTER TUTTLE RETAIL CTR. RETAIL -
MBM BUILDING MBM BUILDING INDUSTRIAL -
METROCENTER III METROCENTER III OFFICE -
SCIOTO CORPORATE CENTER SCIOTO CORP.CTR. OFFICE -
V.A. HOSPITAL V.A. HOSPITAL MEDICAL 5,804
PARKWOOD PLACE PARKWOOD PLACE OFFICE -
TUTTLE CROSSING UNO'S LAND LEASE -
DAYTON, OHIO
------------
SUGARCREEK PLAZA SUGARCREEK
PLAZA RETAIL -
CHICAGO, ILLINOIS
-----------------
EXECUTIVE TOWERS I EXECUTIVE TOWERS
I OFFICE -
EXECUTIVE TOWERS II EXECUTIVE TOWERS
II OFFICE -
EXECUTIVE TOWERS III EXECUTIVE TOWERS
III OFFICE -
DECATUR, ILLINOIS
-----------------
PARK 101 BUILDING #3 INDUSTRIAL -
PARK 101 BUILDING #8 INDUSTRIAL -
PARK 101 ILL POWER
LAND LEASE INDUSTRIAL -
BLOOMINGTON, ILLINOIS
---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA RETAIL -
CHAMPAIGN, ILLINOIS
-------------------
MARKET VIEW SHOPPING CTR MARKET VIEW CTR. RETAIL -
ST. LOUIS, MISSOURI
-------------------
LAUMEIER I LAUMEIER I OFFICE -
LAUMEIER II LAUMEIER II OFFICE -
WESTVIEW PLACE WESTVIEW PLACE OFFICE -
WESTMARK WESTMARK OFFICE -
ALFA - LAVAL ALFA - LAVAL INDUSTRIAL -
I-70 CENTER I-70 CENTER INDUSTRIAL -
1920 BELTWAY 1920 BELTWAY INDUSTRIAL -
POINT 70 3322 NGIC OFFICE 6,938
POINT 70 3300 POINTE 70 OFFICE 4,460
RIVERPORT TOWER RIVERPORT TOWER OFFICE -
SCRIPTS BUILDING SCRIPTS BUILDING INDUSTRIAL -
RIVERPORT DISTRIBUTION RIVERPORT DIST. INDUSTRIAL -
- 51 -
<PAGE>
SCHULTZ BUILDING SCHULTZ BUILDING INDUSTRIAL -
MARYVILLE CENTER 500 MARYVILLE
CENTER OFFICE 15,382
MARYVILLE CENTER 530 MARYVILLE
CENTER OFFICE 8,521
MARYVILLE CENTER 550 MARYVILLE
CENTER OFFICE 10,500
MARYVILLE CENTER 635 MARYVILLE
CENTER OFFICE 12,926
MARYVILLE CENTER 655 MARYVILLE
CENTER OFFICE 9,612
MARYVILLE CENTER 540 MARYVILLE
CENTER OFFICE 20,000
TWIN OAKS TWIN OAKS OFFICE -
SOUTHPORT I SOUTHPORT I INDUSTRIAL -
SOUTHPORT II SOUTHPORT II INDUSTRIAL -
SOUTHPORT COMMERCE CTR SOUTHPORT
COMMERCE CTR. INDUSTRIAL -
MINNEAPOLIS, MINNESOTA
----------------------
ENTERPRISE INDUST. CTR. ENTERPRISE
INDUST. CTR. INDUSTRIAL 2,792
APOLLO DISTRIBUTION CTR. APOLLO DIST.CTR. INDUSTRIAL -
SIBLEY INDUST. CTR. I SIBLEY INDUST.
CTR. I INDUSTRIAL -
SIBLEY INDUST. CTR. II SIBLEY INDUST.
CTR. II INDUSTRIAL -
SIBLEY INDUST. CTR. III SIBLEY INDUST.
CTR. III INDUSTRIAL -
YANKEE PLACE YANKEE PLACE INDUSTRIAL -
LARC INDUST. PARK I LARC INDUST.
PARK I INDUSTRIAL -
LARC INDUST. PARK II LARC INDUST.
PARK II INDUSTRIAL -
LARC INDUST. PARK III LARC INDUST.
PARK III INDUSTRIAL -
LARC INDUST. PARK IV LARC INDUST.
PARK IV INDUSTRIAL -
LARC INDUST. PARK V LARC INDUST.
PARK V INDUSTRIAL -
LARC INDUST. PARK VI LARC INDUST.
PARK VI INDUSTRIAL -
LARC INDUST. PARK VII LARC INDUST.
PARK VII INDUSTRIAL -
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST.
CTR. N. INDUSTRIAL 2,969
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST
CTR. S. INDUSTRIAL 3,454
PENN CORPORATE BUILDING PENN CORP. BLDG. INDUSTRIAL -
BLOOMINGTON INDUST. CTR. BLOOMINGTON
INDUST. CTR. INDUSTRIAL 2,066
EDINA INTERCHANGE I EDINA INTERCHANGE
I INDUSTRIAL 2,135
EDINA INTERCHANGE II EDINA INTERCHANGE
II INDUSTRIAL 1,465
EDINA INTERCHANGE III EDINA INTERCHANGE
III INDUSTRIAL 1,652
EDINA INTERCHAGE IV EDINA INTERCHAGE
IV INDUSTRIAL -
EDINA INTERCHANGE V EDINA INTERCHANGE
V INDUSTRIAL -
PAKWA BUS. PARK I PAKWA BUS.PARK I INDUSTRIAL -
PAKWA BUS. PARK II PAKWA BUS.PARK
II INDUSTRIAL -
PAKWA BUS. PARK III PAKWA BUS.PARK
III INDUSTRIAL -
7540 BUSH LAKE ROAD 7540 BUSH LAKE
ROAD INDUSTRIAL -
CAHILL BUS. CTR. CAHILL BUS. CTR. INDUSTRIAL -
10801 RED CIRCLE DRIVE 10801 RED CIRCLE
DRIVE OFFICE -
ENCORE PARK ENCORE PARK INDUSTRIAL -
JOHNSON BUILDING JOHNSON BUILDING INDUSTRIAL -
CORNERSTONE BUS. CTR CORNERSTONE
BUS. CTR INDUSTRIAL 6,856
WESTSIDE BUS. PARK WESTSIDE BUS.
PARK INDUSTRIAL -
KNOX LAND LEASE KNOX LAND LEASE LAND LEASE -
OXFORD INDUSTRIAL OXFORD INDUST. INDUSTRIAL -
CEDAR LAKE BUS.CTR. CEDAR LAKE
BUS.CTR. INDUSTRIAL -
MEDICINE LAKE INDUST.CTR. MEDICINE LAKE
INDUST.CTR. INDUSTRIAL 4,763
MEDICINE LAKE PROF BLDG. MEDICINE LAKE
PROF BLDG. OFFICE -
801 ZANE AVE NORTH 801 ZANE AVE.
NORTH INDUSTRIAL -
DECATUR BUSINESS CTR. DECATUR BUSINESS
CTR. INDUSTRIAL -
SANDBURG INDUSTRIAL CTR. SANDBURG
INDUSTRIAL CTR. INDUSTRIAL -
CRYSTAL INDUSTRIAL CTR. CRYSTAL INDUST.
CTR. INDUSTRIAL -
BASS LAKE BUSINESS CTR. BASS LAKE
BUSINESS CTR. INDUSTRIAL 1,115
UNIVERSITY LAND LEASE UNIVERSITY LAND
LEASE LAND LEASE -
ELIMINATIONS -
-------
TOTALS $367,119
=======
- 52 -
<PAGE>
INITIAL COST TO COMPANY COSTS (1)
------------------------- CAPITALIZED
BLDGS/ SUBSEQUENT TO
LOCATION/ DEVELOPMENT BUILDING LAND IMPROVEMENTS ACQUISITION
---------------------- -------- ------- ------------ -------------
INDIANAPOLIS, INDIANA
---------------------
<S> <C> <C> <C> <C>
PARK 100 BUSINESS PARK BUILDING #32 64 740 234
PARK 100 BUSINESS PARK BUILDING #34 131 1,455 261
PARK 100 BUSINESS PARK BUILDING #38 25 241 26
PARK 100 BUSINESS PARK BUILDING #79 184 1,764 409
PARK 100 BUSINESS PARK BUILDING #80 251 2,412 231
PARK 100 BUSINESS PARK BUILDING #83 247 2,572 213
PARK 100 BUSINESS PARK BUILDING #84 347 2,604 242
PARK 100 BUSINESS PARK BUILDING #95 642 4,756 323
PARK 100 BUSINESS PARK BUILDING #96 1,414 8,734 4,613
PARK 100 BUSINESS PARK BUILDING #97 676 4,294 1,350
PARK 100 BUSINESS PARK BUILDING #98 473 6,022 1,956
PARK 100 BUSINESS PARK BUILDING #100 103 2,179 730
PARK 100 BUSINESS PARK BUILDING #107 99 1,575 138
PARK 100 BUSINESS PARK BUILDING #109 240 1,865 (52)
PARK 100 BUSINESS PARK BUILDING #116 341 3,144 39
PARK 100 BUSINESS PARK BUILDING #118 226 2,229 209
PARK 100 BUSINESS PARK BUILDING #119 388 3,386 367
PARK 100 BUSINESS PARK BUILDING #121 592 960 143
PARK 100 BUSINESS PARK BUILDING #122 284 3,359 426
PARK 100 BUSINESS PARK BUILDING #125 674 5,712 126
PARK 100 BUSINESS PARK BUILDING #126 165 1,362 168
PARK 100 BUSINESS PARK BUILDING #127 96 1,726 419
PARK 100 BUSINESS PARK BUILDING #128 904 8,429 228
PARK 100 BUSINESS PARK BUILDING #129 865 5,468 577
PARK 100 BUSINESS PARK BUILDING #130 514 4,027 -
PARK 100 BUSINESS PARK BUILDING #131 1,006 7,015 735
PARK 100 BUSINESS PARK BUILDING #132 446 1,165 380
PARK 100 BUSINESS PARK BUILDING #133 - 987 37
GEORGETOWN ROAD BUILDING 1 362 2,437 -
GEORGETOWN ROAD BUILDING 2 374 2,588 -
GEORGETOWN ROAD BUILDING 3 421 1,960 -
PARK 100 BUSINESS PARK UPS LAND LEASE - - 270
PARK 100 BUSINESS PARK NORGATE LAND LEASE 51 - -
PARK 100 BUSINESS PARK KENNY ROGERS
LAND LEASE 56 - 9
PARK 100 BUSINESS PARK SCHAHET HOTELS
LAND LEASE 131 - (131)
PARK 100 BUSINESS PARK NORCO LAND LEASE - 38 (1)
PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE 115 - -
SHADELAND STATION 7351 SHADELAND 101 1,359 200
SHADELAND STATION BUILDING #204/205 260 2,595 627
SHADELAND STATION 7240 SHADELAND 152 3,113 859
SHADELAND STATION 7330 SHADELAND 255 4,045 52
SHADELAND STATION 7369 SHADELAND 100 1,129 103
SHADELAND STATION 7340 SHADELAND 165 2,458 217
SHADELAND STATION 7400 SHADELAND 570 2,959 435
CASTLETON CORNER CUB PLAZA 540 4,850 300
CASTLETON SHOPPING CTR. MICHAEL'S PLAZA 749 3,400 388
SOUTH PARK, INDIANA BUILDING #1 287 2,328 438
SOUTH PARK, INDIANA BUILDING #2 334 3,081 919
SOUTH PARK, INDIANA BUILDING #3 208 2,150 472
SOUTH PARK, INDIANA BRYLANE PKG.
LOT LEASE - 54 3
GREENWOOD CORNER GREENWOOD CORNER 390 3,435 144
GREENWOOD CORNER 1st INDIANA
BANK BRANCH 46 245 22
ST. FRANCIS ST. FRANCIS - 5,839 612
COMMUNITY MOB COMMUNITY MOB 350 1,925 941
HILLSDALE TECHNECENTER BUILDING #4 366 4,711 597
HILLSDALE TECHNECENTER BUILDING #5 251 3,235 250
HILLSDALE TECHNECENTER BUILDING #6 315 4,054 222
KEYSTONE AT THE CROSSING 8465 KEYSTONE 89 1,302 55
WOODFIELD AT THE CROSSING WOODFIELD II 719 9,106 908
WOODFIELD AT THE CROSSING WOODFIELD III 3,767 19,817 2,725
KEYSTONE AT THE CROSSING 8555 KATC - 5,857 93
KEYSTONE AT THE CROSSING 3520 COMMERCE
CRSG 19 560 73
ONE PARKWOOD ONE PARKWOOD 1,018 9,578 524
TWO PARKWOOD TWO PARKWOOD 861 5,134 2,316
THREE PARKWOOD THREE PARKWOOD 1,316 6,048 2,102
PALOMAR PALOMAR 158 1,148 394
FRANKLIN RD.BUS. CTR. FRANKLIN RD.
BUS. CTR. 594 3,986 2,310
NAMPAC BUILDING NAMPAC BUILDING 274 1,622 142
HAMILTON CROSSING BUILDING #1 526 2,424 396
HAMILTON CROSSING BUILDING #2 313 1,315 630
KEYSTONE AT THE CROSSING F.C. TUCKER
BUILDING - 264 17
PARK FLETCHER BUILDING #14 76 722 98
- 48 -
<PAGE>
6060 GUION RD. (VANSTAR) 6060 GUION
ROAD (VANSTAR) 511 2,656 131
NORTH AIRPORT PARK BUILDING #2 550 5,470 2,170
4750 KENTUCKY AVE. 4750 KENTUCKY AVE. 246 2,260 214
4316 W. MINNESOTA 4316 W. MINNESOTA 287 2,178 295
FORT WAYNE, INDIANA
-------------------
COLDWATER CROSSING COLDWATER
SHOPPES 2,310 15,827 1,146
LEBANON, INDIANA
----------------
AMERICAN AIR FILTER AMERICAN
AIR FILTER 177 3,053 70
PURITY WHOLESALE PURITY WHOLESALE 269 7,361 1,209
PAMIDA PAMIDA 177 3,625 590
NASHVILLE, TENNESSEE
--------------------
KEEBLER BUILDING KEEBLER BUILDING 307 1,183 74
HAYWOOD OAKS TECHNECENTER BUILDING #2 395 1,767 152
HAYWOOD OAKS TECHNECENTER BUILDING #3 346 1,575 295
HAYWOOD OAKS TECHNECENTER BUILDING #4 435 1,948 194
HAYWOOD OAKS TECHNECENTER BUILDING #5 629 2,816 424
HAYWOOD OAKS TECHNECENTER BUILDING #6 924 5,730 648
HAYWOOD OAKS TECHNECENTER BUILDING #7 456 1,642 734
HAYWOOD OAKS TECHNECENTER BUILDING #8 617 2,225 1,341
GREENBRIAR BUSINESS PARK GREENBRIAR 1,445 4,490 762
HEBRON, KENTUCKY
-----------------
SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,060 -
SOUTHPARK, KENTUCKY BUILDING #1 682 3,725 379
SOUTHPARK, KENTUCKY BUILDING #3 841 3,382 312
SOUTHPARK, KENTUCKY REDKEN 779 3,095 178
FLORENCE, KENTUCKY
------------------
EMPIRE COMMERCE EMPIRE COMMERCE 581 2,784 337
SOFA EXPRESS SOFA EXPRESS 145 718 914
CINCINNATI, OHIO
----------------
PARK 50 TECHNECENTER BUILDING #17 500 6,200 (344)
PARK 50 TECHNECENTER BUILDING #20 461 7,450 (346)
PARK 50 TECHNECENTER BUILDING #25 1,161 3,758 948
PARK 50 TECHNECENTER SDRC BUILDING 911 19,004 1,400
FIDELITY DRIVE DUN & BRADSTREET 270 2,510 384
WORLD PARK BUILDING #5 270 3,260 627
WORLD PARK BUILDING #6 378 4,488 (684)
WORLD PARK BUILDING #7 525 4,150 364
WORLD PARK BUILDING #8 561 5,309 360
WORLD PARK BUILDING #9 317 2,993 321
WORLD PARK BUILDING #11 460 4,701 390
WORLD PARK BUILDING #14 380 3,592 255
WORLD PARK BUILDING #15 373 2,274 354
WORLD PARK BUILDING #16 321 3,033 21
WORLD PARK BUILDING #18
(BEIERSDORF) 834 6,000 (633)
EASTGATE PLAZA EASTGATE PLAZA 2,030 4,079 909
FAIRFIELD BUSINESS CTR. BUILDING D 135 1,639 71
FAIRFIELD BUSINESS CTR. BUILDING E 398 2,461 136
UNIVERSITY MOVING UNIVERSITY MOVING 248 1,612 98
TRI-COUNTY OFFICE PARK BUILDINGS #1-#4 217 5,211 747
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,012 8,452 740
GOVERNOR'S PLAZA KING'S MALL II 1,928 3,636 573
GOVERNOR'S PLAZA KOHLS 1,345 3,575 256
SOFA EXPRESS SOFA EXPRESS 145 771 36
- 49 -
<PAGE>
OFFICE MAX OFFICE MAX 651 1,223 98
312 ELM BUILDING 312 ELM 4,750 43,823 6,179
311 ELM STREET ZUSSMAN 339 6,226 611
ENTERPRISE BUSINESS PARK BUILDING 1 1,030 5,482 797
ENTERPRISE BUSINESS PARK BUILDING 2 733 3,443 1,202
ENTERPRISE BUSINESS PARK BUILDING A 119 685 49
ENTERPRISE BUSINESS PARK BUILDING B 119 1,117 80
ENTERPRISE BUSINESS PARK BUILDING D 243 1,802 550
312 PLUM STREET S & L DATA 2,539 24,312 2,573
TRIANGLE OFFICE PARK BUILDINGS
#1 - #38 1,000 10,440 2,119
GOVERNOR'S HILL 8790 GOVERNOR'S
HILL 400 4,581 475
GOVERNOR'S HILL 8700 GOVERNOR'S
HILL 459 5,705 240
GOVERNOR'S HILL 8800 GOVERNOR'S
HILL 225 2,305 490
GOVERNOR'S HILL 8600 GOVERNOR'S
HILL 1,220 17,689 1,860
GOVERNOR'S POINTE 4770 GOVERNOR'S
POINTE 586 7,609 412
GOVERNOR'S POINTE 4700 BUILDING 584 5,465 470
GOVERNOR'S POINTE 4900 BUILDING 654 4,017 648
GOVERNOR'S POINTE 4705 GOVERNOR'S
POINTE 719 6,910 2,157
GOVERNOR'S POINTE 4800 GOVERNOR'S
POINTE 978 4,742 978
GOVERNOR'S POINTE LOWES 1,241 4,214 1,789
GOVERNOR'S POINTE ANTHEM
PRESCRIPTION
MGMT. 594 4,100 1,996
GOVERNOR'S POINTE 4660 GOVERNOR'S
POINTE 385 3,662 1,264
BIGG'S SUPERCENTER BIGG'S
SUPERCENTER 2,107 4,545 3,091
GOVERNOR'S POINTE 4605 GOVERNOR'S
POINTE 630 16,236 1,882
MONTGOMERY CROSSING STEINBERG'S 260 852 140
MONTGOMERY CROSSING II SPORTS UNLIMITED 778 3,687 205
GOVERNOR'S PLAZA KING'S AUTO
MALL I 1,085 3,859 967
MOSTELLER DIST. CTR. MOSTELLER DIST.
CTR. 1,220 4,209 2,634
MOSTELLER DIST. CTR. MOSTELLER DIST.
CTR. II 408 4,550 1,003
FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 -
PERIMETER PARK BUILDING A 229 1,274 43
PERIMETER PARK BUILDING B 244 1,001 45
CREEK ROAD BUILDING 1 103 792 55
CREEK ROAD BUILDING 2 132 1,093 61
WEST LAKE CTR. WEST LAKE CTR. 2,459 15,972 998
EXECUTIVE PLAZA I EXECUTIVE
PLAZA I 729 5,249 -
EXECUTIVE PLAZA II EXECUTIVE
PLAZA II 729 5,332 -
LAKE FOREST PLACE LAKE FOREST
PLACE 1,953 19,164 284
HUNTINGTON BANK HUNTINGTON BANK 175 220 9
OHIO NATIONAL OHIO NATIONAL 2,463 24,408 341
CORNELL COMMERCE CORNELL COMMERCE 495 4,501 316
ONE ASHVIEW PLACE ONE ASHVIEW PL. 1,204 12,328 175
REMINGTON PARK BLDG A 560 1,442 27
REMINGTON PARK BLDG B 560 1,442 23
BLUE ASH OFFICE CTR VI BLUE ASH OFFICE
CTR VI 518 2,775 35
SKYPORT BUSINESS PARK SKYPORT BLDG.1 611 5,661 535
APPLEBEES APPLEBEES 338 - -
7910 KENTUCKY DRIVE 7910 KENTUCKY DR. 285 673 76
7920 KENTUCKY DRIVE 7920 KENTUCKY DR. 698 1,235 15
KENWOOD EXEC. CTR. KENWOOD EXEC. CTR. 606 3,886 -
CLEVELAND, OHIO
---------------
ROCK RUN - NORTH ROCK RUN - N. 837 5,351 175
ROCK RUN - CTR. ROCK RUN - CTR. 1,046 6,686 143
ROCK RUN - SOUTH ROCK RUN - S. 877 5,604 189
FREEDOM SQUARE I FREEDOM SQ. I 595 3,796 96
FREEDOM SQUARE II FREEDOM SQ. II 1,746 11,141 445
CORPORATE PLAZA I CORPORATE
PLAZA I 2,116 13,528 583
CORPORATE PLAZA II CORPORATE
PLAZA II 1,841 11,768 260
ONE CORPORATE EXCHANGE ONE CORPORATE
EXCHANGE 1,287 8,226 352
FREEDOM SQUARE III FREEDOM SQ. III 701 5,027 1,168
6111 OAK TREE 6111 OAK TREE 703 4,492 80
CORPORATE PLACE CORPORATE PLACE 1,161 7,425 320
CORPORATE CIRCLE CORPORATE CIRCLE 1,696 10,846 606
LANDERBROOK CORPORATE LANDERBROOK
CORPORATE 1,807 7,445 2,062
DYMENT DYMENT 817 5,234 58
JOHNSON CONTROLS JOHNSON CONTROLS 364 2,330 26
SOLON INDUSTRIAL PARK 30600 CARTER 819 3,286 38
SOLON INDUSTRIAL PARK 6230 COCHRAN 600 2,408 31
SOLON INDUSTRIAL PARK 31900 SOLON-FRONT 473 1,897 22
SOLON INDUSTRIAL PARK 5821 SOLON 554 2,222 30
SOLON INDUSTRIAL PARK 6161 COCHRAN 395 1,583 25
SOLON INDUSTRIAL PARK 5901 HARPER 349 1,399 19
- 50 -
<PAGE>
SOLON INDUSTRIAL PARK 29125 SOLON 504 2,023 27
SOLON INDUSTRIAL PARK 6661 COCHRAN 244 981 14
SOLON INDUSTRIAL PARK 6521 DAVIS 128 514 6
SOLON INDUSTRIAL PARK 31900 SOLON-REAR 81 325 4
CORPORATE CTR. I CORPORATE
CTR. I 1,048 6,695 441
CORPORATE CTR. II CORPORATE
CTR. II 1,048 6,712 852
COLUMBUS, OHIO
--------------
CORP. PARK AT TUTTLE CRSG LITEL 2,618 17,428 1,555
CORP. PARK AT TUTTLE CRSG STERLING 1 1,494 11,856 927
CORP. PARK AT TUTTLE CRSG INDIANA INS. 717 2,081 1,079
CORP. PARK AT TUTTLE CRSG STERLING 2 605 5,300 389
CORP. PARK AT TUTTLE CRSG JOHN ALDEN
LIFE INS. 1,066 6,856 432
CORP. PARK AT TUTTLE CRSG CARDINAL HEALTH 1,600 9,556 1,442
CORP. PARK AT TUTTLE CRSG COMPMANAGEMENT 867 2,860 1,507
CORP. PARK AT TUTTLE CRSG STERLING 3 1,601 8,207 228
CORP. PARK AT TUTTLE CRSG NATIONWIDE 4,815 18,554 (285)
CORP. PARK AT TUTTLE CRSG LAZARUS GROUND
LEASE 852 - -
CORP. PARK AT TUTTLE CRSG XEROX 1,580 8,630 490
SUN TV SUN TV 2,005 17,468 215
SOUTH POINTE BUILDING D 276 2,485 502
SOUTH POINTE BUILDING E 279 2,046 -
PET FOODS BUILD-TO-SUIT PET FOODS DIST. 268 4,932 1,296
GALYAN'S GALYAN'S 1,925 3,146 335
TUTTLE RETAIL CTR. TUTTLE RETAIL
CTR. 2,625 6,598 548
MBM BUILDING MBM BUILDING 170 1,916 114
METROCTR. III METROCTR. III 887 2,727 958
SCIOTO CORPORATE CTR. SCIOTO CORPORATE
CTR. 1,137 3,147 184
V.A. HOSPITAL V.A. HOSPITAL 703 9,239 478
PARKWOOD PLACE PARKWOOD PLACE 1,690 5,457 6,020
TUTTLE CROSSING UNO'S - - 587
DAYTON, OHIO
------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 898 6,492 (229)
CHICAGO, ILLINOIS
-----------------
EXECUTIVE TOWERS I EXECUTIVE
TOWERS I 2,652 23,705 756
EXECUTIVE TOWERS II EXECUTIVE
TOWERS II 3,386 30,965 144
EXECUTIVE TOWERS III EXECUTIVE
TOWERS III 3,512 32,126 89
DECATUR, ILLINOIS
-----------------
PARK 101 BUILDING #3 275 2,405 787
PARK 101 BUILDING #8 80 1,660 58
PARK 101 ILL POWER
LAND LEASE 212 - -
BLOOMINGTON, ILLINOIS
---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 766 7,199 1,175
CHAMPAIGN, ILLINOIS
-------------------
MARKET VIEW SHOPPING CTR MARKET VIEW CTR. 740 6,830 (204)
ST. LOUIS, MISSOURI
-------------------
LAUMEIER I LAUMEIER I 1,220 9,091 1,073
LAUMEIER II LAUMEIER II 1,258 9,054 1,038
WESTVIEW PLACE WESTVIEW PLACE 673 8,389 812
WESTMARK WESTMARK 1,200 9,759 702
ALFA - LAVAL ALFA - LAVAL 1,158 4,944 357
I-70 CENTER I-70 CENTER 950 3,915 239
1920 BELTWAY 1920 BELTWAY 605 1,462 36
POINT 70 3322 NGIC 2,615 10,461 241
POINT 70 3300 POINTE 70 1,186 7,287 88
RIVERPORT TOWER RIVERPORT TOWER 3,250 29,251 263
SCRIPTS BUILDING SCRIPTS BUILDING 942 8,482 65
RIVERPORT DISTRIBUTION RIVERPORT DIST. 242 2,175 31
- 51 -
<PAGE>
SCHULTZ BUILDING SCHULTZ BUILDING 216 1,943 15
MARYVILLE CTR. 500 MARYVILLE
CTR. 3,402 26,962 82
MARYVILLE CTR. 530 MARYVILLE
CTR. 2,219 14,420 -
MARYVILLE CTR. 550 MARYVILLE
CTR. 2,219 13,106 -
MARYVILLE CTR. 635 MARYVILLE
CTR. 1,996 11,525 254
MARYVILLE CTR. 655 MARYVILLE
CTR. 3,048 16,652 -
MARYVILLE CTR. 540 MARYVILLE
CTR. 1,860 12,225 115
TWIN OAKS TWIN OAKS 566 8,072 83
SOUTHPORT I SOUTHPORT I 192 808 1
SOUTHPORT II SOUTHPORT II 151 636 8
SOUTHPORT COMMERCE CTR. SOUTHPORT
COMMERCE CTR. 233 979 16
MINNEAPOLIS, MINNESOTA
----------------------
ENTERPRISE INDUST.CTR. ENTERPRISE
INDUST.CTR. 874 4,884 -
APOLLO DISTRIBUTION CTR. APOLLO DIST.
CTR. 866 4,842 -
SIBLEY INDUST.CTR. I SIBLEY
INDUST.CTR. I 356 2,012 4
SIBLEY INDUST.CTR. II SIBLEY
INDUST.CTR. II 234 1,311 138
SIBLEY INDUST.CTR. III SIBLEY
INDUST.CTR. III 213 1,191 -
YANKEE PLACE YANKEE PLACE 2,822 15,777 -
LARC INDUST.PARK I LARC INDUST.
PARK I 283 1,580 -
LARC INDUST.PARK II LARC INDUST.
PARK II 227 1,268 -
LARC INDUST.PARK III LARC INDUST.
PARK III 137 765 -
LARC INDUST.PARK IV LARC INDUST.
PARK IV 91 510 -
LARC INDUST.PARK V LARC INDUST.
PARK V 97 541 -
LARC INDUST.PARK VI LARC INDUST.
PARK VI 377 2,107 -
LARC INDUST.PARK VII LARC INDUST.
PARK VII 244 1,365 12
HAMPSHIRE DIST CTR. N. HAMPSHIRE
DIST CTR. N. 782 4,370 -
HAMPSHIRE DIST CTR. S. HAMPSHIRE
DIST CTR. S. 910 5,085 -
PENN CORPORATE BUILDING PENN CORP.BLDG. 315 1,762 -
BLOOMINGTON INDUST.CTR. BLOOMINGTON
INDUST.CTR. 628 3,508 -
EDINA INTERCHANGE I EDINA INTER-
CHANGE I 637 3,560 -
EDINA INTERCHANGE II EDINA INTER-
CHANGE II 437 2,444 -
EDINA INTERCHANGE III EDINA INTER-
CHANGE III 493 2,754 -
EDINA INTERCHAGE IV EDINA INTER-
CHANGE IV 230 1,286 -
EDINA INTERCHANGE V EDINA INTER-
CHANGE V 982 5,489 -
PAKWA BUSINESS PARK I PAKWA BUSINESS
PARK I 351 1,962 -
PAKWA BUSINESS PARK II PAKWA BUSINESS
PARK II 217 1,212 -
PAKWA BUSINESS PARK III PAKWA BUSINESS
PARK III 251 1,403 -
7540 BUSH LAKE ROAD 7540 BUSH
LAKE ROAD 477 2,669 -
CAHILL BUSINESS CTR. CAHILL BUSINESS
CTR. 513 2,868 29
10801 RED CIRCLE DRIVE 10801 RED
CIRCLE DRIVE 533 2,981 -
ENCORE PARK ENCORE PARK 984 5,503 -
JOHNSON BUILDING JOHNSON BUILDING 558 3,121 3
CORNERSTONE BUSINESS CTR. CORNERSTONE
BUSINESS CTR. 1,469 8,212 -
WESTSIDE BUSINESS PARK WESTSIDE BUSINESS
PARK 1,189 6,646 -
KNOX LAND LEASE KNOX LAND LEASE 1,066 - -
OXFORD INDUSTRIAL OXFORD INDUST. 103 576 -
CEDAR LAKE BUSINESS CTR. CEDAR LAKE
BUSINESS CTR. 334 1,868 -
MEDICINE LAKE INDUST.CTR. MEDICINE LAKE
INDUST.CTR. 1,158 6,472 -
MEDICINE LAKE PROF BLDG. MEDICINE LAKE
PROF BLDG. 77 430 -
801 ZANE AVE NORTH 801 ZANE AVE N. 369 2,064 -
DECATUR BUSINESS CTR. DECATUR BUS.CTR. 436 2,436 18
SANDBURG INDUST.CTR. SANDBURG INDUST.
CTR. 456 2,551 -
CRYSTAL INDUST.CTR. CRYSTAL INDUST.
CTR. 456 2,549 51
BASS LAKE BUSINESS CTR. BASS LAKE BUS.CTR. 298 1,668 2
UNIVERSITY LAND LEASE UNIVERSITY
LAND LEASE 296 - -
ELIMINATIONS - 117 -
------- --------- -------
TOTALS $220,959 1,474,101 130,229
- 52 -
<PAGE>
GROSS BOOK VALUE AT DECEMBER 31, 1997
-------------------------------------
LAND & BUILDINGS/
LOCATION/DEVELOPMENT BUILDING IMPROVEMENTS IMPROVEMENTS TOTAL
- -------------------- ------------ ------------ ------------ ----------
INDIANAPOLIS, INDIANA
<S> <C> <C> <C> <C>
PARK 100 BUS. PARK BUILDING #32 65 973 1,038
PARK 100 BUS. PARK BUILDING #34 133 1,714 1,847
PARK 100 BUS. PARK BUILDING #38 27 265 292
PARK 100 BUS. PARK BUILDING #79 187 2,170 2,357
PARK 100 BUS. PARK BUILDING #80 256 2,638 2,894
PARK 100 BUS. PARK BUILDING #83 252 2,780 3,032
PARK 100 BUS. PARK BUILDING #84 354 2,839 3,193
PARK 100 BUS. PARK BUILDING #95 642 5,079 5,721
PARK 100 BUS. PARK BUILDING #96 1,436 13,325 14,761
PARK 100 BUS. PARK BUILDING #97 676 5,644 6,320
PARK 100 BUS. PARK BUILDING #98 273 8,177 8,450
PARK 100 BUS. PARK BUILDING #100 103 2,909 3,012
PARK 100 BUS. PARK BUILDING #107 99 1,713 1,812
PARK 100 BUS. PARK BUILDING #109 246 1,807 2,053
PARK 100 BUS. PARK BUILDING #116 348 3,176 3,524
PARK 100 BUS. PARK BUILDING #118 231 2,433 2,664
PARK 100 BUS. PARK BUILDING #119 395 3,746 4,141
PARK 100 BUS. PARK BUILDING #121 604 1,091 1,695
PARK 100 BUS. PARK BUILDING #122 290 3,779 4,069
PARK 100 BUS. PARK BUILDING #125 674 5,838 6,512
PARK 100 BUS. PARK BUILDING #126 165 1,530 1,695
PARK 100 BUS. PARK BUILDING #127 96 2,145 2,241
PARK 100 BUS. PARK BUILDING #128 904 8,657 9,561
PARK 100 BUS. PARK BUILDING #129 865 6,045 6,910
PARK 100 BUS. PARK BUILDING #130 514 4,027 4,541
PARK 100 BUS. PARK BUILDING #131 1,110 7,646 8,756
PARK 100 BUS. PARK BUILDING #132 446 1,545 1,991
PARK 100 BUS. PARK BUILDING #133 - 1,024 1,024
GEORGETOWN ROAD BUILDING 1 362 2,437 2,799
GEORGETOWN ROAD BUILDING 2 374 2,588 2,962
GEORGETOWN ROAD BUILDING 3 421 1,960 2,381
PARK 100 BUS. PARK UPS LAND LEASE 270 - 270
PARK 100 BUS. PARK NORGATE LAND LEASE 51 - 51
PARK 100 BUS. PARK KENNY ROGERS
LAND LEASE 56 9 65
PARK 100 BUS. PARK SCHAHET HOTELS
LAND LEASE - - -
PARK 100 BUS. PARK NORCO LAND LEASE - 37 37
PARK 100 BUS. PARK ZOLLMAN LAND LEASE 115 - 115
SHADELAND STATION 7351 SHADELAND 104 1,556 1,660
SHADELAND STATION BUILDING #204/205 266 3,216 3,482
SHADELAND STATION 7240 SHADELEND 152 3,972 4,124
SHADELAND STATION 7330 SHADELAND 260 4,092 4,352
SHADELAND STATION 7369 SHADELAND 102 1,230 1,332
SHADELAND STATION 7340 SHADELAND 169 2,671 2,840
SHADELAND STATION 7400 SHADELAND 581 3,383 3,964
CASTLETON CORNER CUB PLAZA 550 5,140 5,690
CASTLETON SHOPPING CTR MICHAEL'S PLAZA 764 3,773 4,537
SOUTH PARK, INDIANA BUILDING #1 292 2,761 3,053
SOUTH PARK, INDIANA BUILDING #2 341 3,993 4,334
SOUTH PARK, INDIANA BUILDING #3 212 2,618 2,830
SOUTH PARK, INDIANA BRYLANE PKG
LOT LEASE - 57 57
GREENWOOD CORNER GREENWOOD CORNER 419 3,550 3,969
GREENWOOD CORNER 1st INDIANA BANK
BRANCH 47 266 313
ST. FRANCIS ST. FRANCIS - 6,451 6,451
COMMUNITY MOB COMMUNITY MOB 351 2,865 3,216
HILLSDALE TECHNECTR BUILDING #4 366 5,308 5,674
HILLSDALE TECHNECTR BUILDING #5 251 3,485 3,736
HILLSDALE TECHNECTR BUILDING #6 315 4,276 4,591
KEYSTONE AT THE CRSG 8465 KEYSTONE 90 1,356 1,446
WOODFIELD AT THE CRSG WOODFIELD II 733 10,000 10,733
WOODFIELD AT THE CRSG WOODFIELD III 3,843 22,466 26,309
KEYSTONE AT THE CRSG 8555 KATC - 5,950 5,950
KEYSTONE AT THE CRSG 3520 COMMERCE CRSG - 652 652
ONE PARKWOOD ONE PARKWOOD 1,018 10,102 11,120
TWO PARKWOOD TWO PARKWOOD 861 7,449 8,310
THREE PARKWOOD THREE PARKWOOD 1,377 8,089 9,466
PALOMAR PALOMAR 158 1,542 1,700
FRANKLIN RD.BUS. CTR. FRANKLIN RD.
BUS. CTR. 594 6,296 6,890
NAMPAC BUILDING NAMPAC BUILDING 274 1,764 2,038
HAMILTON CROSSING BUILDING #1 536 2,810 3,346
HAMILTON CROSSING BUILDING #2 382 1,876 2,258
KEYSTONE AT THE CRSG F.C. TUCKER BLDG - 281 281
PARK FLETCHER BUILDING #14 76 821 896
- 48 -
<PAGE>
6060 GUION RD.(VANSTAR) 6060 GUION RD.
(VANSTAR) 511 2,787 3,298
NORTH AIRPORT PARK BUILDING #2 777 7,413 8,190
4750 KENTUCKY AVENUE 4750 KENTUCKY AVE. 246 2,474 2,720
4316 WEST MINNESOTA 4316 W. MINNESOTA 287 2,473 2,760
FORT WAYNE, INDIANA
- -------------------
COLDWATER CROSSING COLDWATER
SHOPPES 2,310 16,973 19,283
LEBANON, INDIANA
- ----------------
AMERICAN AIR FILTER AMERICAN AIR
FILTER 177 3,123 3,300
PURITY WHOLESALE PURITY WHOLESALE 610 8,229 8,839
PAMIDA PAMIDA 306 4,086 4,392
NASHVILLE, TENNESSEE
- --------------------
KEEBLER BUILDING KEEBLER BUILDING 308 1,256 1,564
HAYWOOD OAKS TECHNECTR BUILDING #2 395 1,919 2,314
HAYWOOD OAKS TECHNECTR BUILDING #3 346 1,870 2,216
HAYWOOD OAKS TECHNECTR BUILDING #4 436 2,141 2,577
HAYWOOD OAKS TECHNECTR BUILDING #5 629 3,240 3,869
HAYWOOD OAKS TECHNECTR BUILDING #6 946 6,356 7,302
HAYWOOD OAKS TECHNECTR BUILDING #7 456 2,376 2,832
HAYWOOD OAKS TECHNECTR BUILDING #8 752 3,431 4,183
GREENBRIAR BUSINESS PARK GREENBRIAR 1,445 5,252 6,697
HEBRON, KENTUCKY
- ----------------
SOUTHPARK, KENTUCKY CR SERVICES 1,085 4,060 5,145
SOUTHPARK, KENTUCKY BUILDING #1 696 4,090 4,786
SOUTHPARK, KENTUCKY BUILDING #3 859 3,676 4,535
SOUTHPARK, KENTUCKY REDKEN 779 3,273 4,052
FLORENCE, KENTUCKY
- ------------------
EMPIRE COMMERCE EMPIRE COMMERCE 581 3,121 3,702
SOFA EXPRESS SOFA EXPRESS 735 1,042 1,777
CINCINNATI, OHIO
- ----------------
PARK 50 TECHNECTR BUILDING #17 510 5,846 6,356
PARK 50 TECHNECTR BUILDING #20 469 7,096 7,565
PARK 50 TECHNECTR BUILDING #25 1,184 4,683 5,867
PARK 50 TECHNECTR SDRC BUILDING 929 20,386 21,315
FIDELITY DRIVE DUN & BRADSTREET 277 2,887 3,164
WORLD PARK BUILDING #5 277 3,880 4,157
WORLD PARK BUILDING #6 385 3,797 4,182
WORLD PARK BUILDING #7 537 4,502 5,039
WORLD PARK BUILDING #8 561 5,669 6,230
WORLD PARK BUILDING #9 317 3,314 3,631
WORLD PARK BUILDING #11 460 5,091 5,551
WORLD PARK BUILDING #14 380 3,847 4,227
WORLD PARK BUILDING #15 381 2,620 3,001
WORLD PARK BUILDING #16 321 3,054 3,375
WORLD PARK BUILDING #18
(BEIERSDORF) 997 5,204 6,201
EASTGATE PLAZA EASTGATE PLAZA 2,031 4,987 7,018
FAIRFIELD BUSINESS CTR BUILDING D 135 1,710 1,845
FAIRFIELD BUSINESS CTR BUILDING E 398 2,597 2,995
UNIVERSITY MOVING UNIVERSITY MOVING 248 1,710 1,958
TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 221 5,954 6,175
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 2,054 9,150 11,204
GOVERNOR'S PLAZA KING'S MALL II 1,952 4,185 6,137
GOVERNOR'S PLAZA KOHLS 1,345 3,832 5,177
SOFA EXPRESS SOFA EXPRESS 165 787 952
- 49 -
<PAGE>
OFFICE MAX OFFICE MAX 651 1,321 1,972
312 ELM BUILDING 312 ELM 5,428 49,324 54,752
311 ELM STREET ZUSSMAN 347 6,829 7,176
ENTERPRISE BUSINESS PARK BUILDING 1 1,051 6,258 7,309
ENTERPRISE BUSINESS PARK BUILDING 2 747 4,631 5,378
ENTERPRISE BUSINESS PARK BUILDING A 119 734 853
ENTERPRISE BUSINESS PARK BUILDING B 119 1,197 1,316
ENTERPRISE BUSINESS PARK BUILDING D 243 2,352 2,595
312 PLUM STREET S & L DATA 2,590 26,834 29,424
TRIANGLE OFFICE PARK BUILDINGS #1-#38 1,018 12,541 13,559
GOVERNOR'S HILL 8790 GOVERNOR'S
HILL 409 5,047 5,456
GOVERNOR'S HILL 8700 GOVERNOR'S
HILL 468 5,936 6,404
GOVERNOR'S HILL 8800 GOVERNOR'S
HILL 231 2,789 3,020
GOVERNOR'S HILL 8600 GOVERNOR'S
HILL 1,246 19,523 20,769
GOVERNOR'S POINTE 4770 GOVERNOR'S
POINTE 597 8,010 8,607
GOVERNOR'S POINTE 4700 BUILDING 596 5,923 6,519
GOVERNOR'S POINTE 4900 BUILDING 673 4,646 5,319
GOVERNOR'S POINTE 4705 GOVERNOR'S
POINTE 793 8,993 9,786
GOVERNOR'S POINTE 4800 GOVERNOR'S
POINTE 998 5,700 6,698
GOVERNOR'S POINTE LOWES 3,001 4,243 7,244
GOVERNOR'S POINTE ANTHEM PRESCRIP-
TION MGMT. 594 6,096 6,690
GOVERNOR'S POINTE 4660 GOVERNOR'S
POINTE 529 4,782 5,311
BIGG'S SUPERCENTER BIGG'S SUPER-
CENTER 3,567 6,176 9,743
GOVERNOR'S POINTE 4605 GOVERNOR'S
POINTE 716 18,032 18,748
MONTGOMERY CROSSING STEINBERG'S 261 991 1,252
MONTGOMERY CROSSING II SPORTS UNLIMITED 778 3,892 4,670
GOVERNOR'S PLAZA KING'S AUTO
MALL I 1,124 4,787 5,911
MOSTELLER DIST. CTR MOSTELLER DIST.
CTR 1,320 6,743 8,063
MOSTELLER DIST. CTR MOSTELLER DIST.
CTR II 828 5,133 5,961
FRANCISCAN HEALTH FRANCISCAN HEALTH - 3,248 3,248
PERIMETER PARK BUILDING A 229 1,317 1,546
PERIMETER PARK BUILDING B 245 1,045 1,290
CREEK ROAD BUILDING 1 103 847 950
CREEK ROAD BUILDING 2 132 1,155 1,287
WEST LAKE CTR WEST LAKE CTR 2,459 16,970 19,429
EXECUTIVE PLAZA I EXECUTIVE
PLAZA I 729 5,249 5,978
EXECUTIVE PLAZA II EXECUTIVE
PLAZA II 729 5,332 6,061
LAKE FOREST PLACE LAKE FOREST
PLACE 1,954 19,447 21,401
HUNTINGTON BANK HUNTINGTON BANK 175 229 404
OHIO NATIONAL OHIO NATIONAL 2,462 24,749 27,211
CORNELL COMMERCE CORNELL COMMERCE 496 4,816 5,312
ONE ASHVIEW PLACE ONE ASHVIEW PL. 1,204 12,503 13,707
REMINGTON PARK BLDG A 560 1,469 2,029
REMINGTON PARK BLDG B 560 1,465 2,025
BLUE ASH OFFICE CTR VI BLUE ASH OFFICE
CTR VI 518 2,810 3,328
SKYPORT BUSINESS PARK SKYPORT BLDG 1 906 5,901 6,807
APPLEBEES APPLEBEES 338 - 338
7910 KENTUCKY DRIVE 7910 KENTUCKY DR. 285 749 1,034
7920 KENTUCKY DRIVE 7920 KENTUCKY DR. 698 1,250 1,948
KENWOOD EXEC. CTR KENWOOD EXEC. CTR 606 3,886 4,492
CLEVELAND, OHIO
- ---------------
ROCK RUN - NORTH ROCK RUN - NORTH 837 5,526 6,363
ROCK RUN - CTR ROCK RUN - CTR 1,046 6,829 7,875
ROCK RUN - SOUTH ROCK RUN - SOUTH 877 5,793 6,670
FREEDOM SQUARE I FREEDOM SQUARE I 595 3,893 4,488
FREEDOM SQUARE II FREEDOM SQUARE II 1,746 11,586 13,332
CORPORATE PLAZA I CORPORATE
PLAZA I 2,116 14,111 16,227
CORPORATE PLAZA II CORPORATE
PLAZA II 1,841 12,028 13,869
ONE CORPORATE EXCHANGE ONE CORPORATE
EXCHANGE 1,287 8,578 9,865
FREEDOM SQUARE III FREEDOM
SQUARE III 701 6,195 6,896
6111 OAK TREE 6111 OAK TREE 703 4,572 5,275
CORPORATE PLACE CORPORATE PLACE 1,165 7,741 8,906
CORPORATE CIRCLE CORPORATE CIRCLE 1,698 11,451 13,149
LANDERBROOK CORPORATE LANDERBROOK
CORPORATE 1,807 9,507 11,314
DYMENT DYMENT 816 5,293 6,109
JOHNSON CONTROLS JOHNSON CONTROLS 364 2,356 2,720
SOLON INDUSTRIAL PARK 30600 CARTER 821 3,322 4,143
SOLON INDUSTRIAL PARK 6230 COCHRAN 601 2,438 3,039
SOLON INDUSTRIAL PARK 31900 SOLON-FRONT 474 1,918 2,392
SOLON INDUSTRIAL PARK 5821 SOLON 556 2,250 2,806
SOLON INDUSTRIAL PARK 6161 COCHRAN 395 1,608 2,003
SOLON INDUSTRIAL PARK 5901 HARPER 349 1,418 1,767
- 50 -
<PAGE>
SOLON INDUSTRIAL PARK 29125 SOLON 505 2,049 2,554
SOLON INDUSTRIAL PARK 6661 COCHRAN 245 994 1,239
SOLON INDUSTRIAL PARK 6521 DAVIS 128 520 648
SOLON INDUSTRIAL PARK 31900 SOLON-REAR 81 329 410
CORPORATE CTR I CORPORATE CTR I 1,041 7,143 8,184
CORPORATE CTR II CORPORATE CTR II 1,048 7,564 8,612
COLUMBUS, OHIO
- --------------
CORP. PARK AT TUTTLE
CRSG LITEL 2,670 18,931 21,601
CORP. PARK AT TUTTLE
CRSG STERLING 1 1,525 12,752 14,277
CORP. PARK AT TUTTLE
CRSG INDIANA INS. 717 3,160 3,877
CORP. PARK AT TUTTLE
CRSG STERLING 2 605 5,689 6,294
CORP. PARK AT TUTTLE JOHN ALDEN
CRSG LIFE INS. 1,066 7,288 8,354
CORP. PARK AT TUTTLE
CRSG CARDINAL HEALTH 1,933 10,665 12,598
CORP. PARK AT TUTTLE
CRSG COMPMANAGEMENT 867 4,367 5,234
CORP. PARK AT TUTTLE
CRSG STERLING 3 1,601 8,435 10,036
CORP. PARK AT TUTTLE
CRSG NATIONWIDE 4,816 18,268 23,084
CORP. PARK AT TUTTLE LAZARUS
CRSG GROUND LEASE 852 - 852
CORP. PARK AT TUTTLE
CRSG XEROX 1,580 9,120 10,700
SUN TV SUN TV 2,006 17,682 19,688
SOUTH POINTE BUILDING D 276 2,987 3,263
SOUTH POINTE BUILDING E 279 2,046 2,325
PET FOODS BUILD-TO-SUIT PET FOODS DIST. 1,031 5,465 6,496
GALYAN'S GALYAN'S 1,925 3,481 5,406
TUTTLE RETAIL CTR TUTTLE RETAIL CTR 3,451 6,321 9,772
MBM BUILDING MBM BUILDING 170 2,030 2,200
METROCTR III METROCTR III 887 3,685 4,572
SCIOTO CORPORATE CTR SCIOTO CORPORATE
CTR 1,101 3,367 4,468
V.A. HOSPITAL V.A. HOSPITAL 703 9,717 10,420
PARKWOOD PLACE PARKWOOD PLACE 1,690 11,477 13,167
TUTTLE CROSSING UNO'S 587 - 587
DAYTON, OHIO
- ------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 925 6,236 7,161
CHICAGO, ILLINOIS
- -----------------
EXECUTIVE TOWERS I EXECUTIVE
TOWERS I 2,652 24,461 27,113
EXECUTIVE TOWERS II EXECUTIVE
TOWERS II 3,386 31,109 34,495
EXECUTIVE TOWERS III EXECUTIVE
TOWERS III 3,512 32,215 35,727
DECATUR, ILLINOIS
- -----------------
PARK 101 BUILDING #3 280 3,187 3,467
PARK 101 BUILDING #8 185 1,613 1,798
PARK 101 ILL POWER
LAND LEASE 212 - 212
BLOOMINGTON, ILLINOIS
- ---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 786 8,354 9,140
CHAMPAIGN, ILLINOIS
- --------------------
MARKET VIEW SHOPPING
CTR MARKET VIEW CTR 755 6,611 7,366
ST. LOUIS, MISSOURI
- -------------------
LAUMEIER I LAUMEIER I 1,386 9,998 11,384
LAUMEIER II LAUMEIER II 1,422 9,927 11,349
WESTVIEW PLACE WESTVIEW PLACE 673 9,201 9,874
WESTMARK WESTMARK 1,207 10,454 11,661
ALFA - LAVAL ALFA - LAVAL 1,158 5,300 6,458
I-70 CENTER I-70 CENTER 950 4,154 5,104
1920 BELTWAY 1920 BELTWAY 616 1,487 2,103
POINT 70 3322 NGIC 2,615 10,702 13,317
POINT 70 3300 POINTE 70 1,186 7,375 8,561
RIVERPORT TOWER RIVERPORT TOWER 3,251 29,513 32,764
SCRIPTS BUILDING SCRIPTS BUILDING 942 8,547 9,489
RIVERPORT DISTRIBUTION RIVERPORT DIST. 242 2,206 2,448
- 51 -
<PAGE>
SCHULTZ BUILDING SCHULTZ BUILDING 216 1,958 2,174
MARYVILLE CENTER 500 MARYVILLE CTR 3,402 27,044 30,446
MARYVILLE CENTER 530 MARYVILLE CTR 2,219 14,420 16,639
MARYVILLE CENTER 550 MARYVILLE CTR 2,219 13,106 15,325
MARYVILLE CENTER 635 MARYVILLE CTR 1,996 11,779 13,775
MARYVILLE CENTER 655 MARYVILLE CTR 3,048 16,652 19,700
MARYVILLE CENTER 540 MARYVILLE CTR 1,860 12,340 14,200
TWIN OAKS TWIN OAKS 566 8,155 8,721
SOUTHPORT I SOUTHPORT I 192 809 1,001
SOUTHPORT II SOUTHPORT II 151 644 795
SOUTHPORT COMMERCE CTR SOUTHPORT
COMMERCE CTR 233 995 1,228
MINNEAPOLIS, MINNESOTA
- ----------------------
ENTERPRISE INDUSTRIAL ENTERPRISE
CTR INDUSTRIAL CTR 874 4,884 5,758
APOLLO DISTRIBUTION CTR APOLLO DIST. CTR 866 4,842 5,708
SIBLEY INDUSTRIAL CTR I SIBLEY INDUSTRIAL
CTR I 360 2,012 2,372
SIBLEY INDUSTRIAL CTR II SIBLEY INDUSTRIAL
CTR II 234 1,449 1,683
SIBLEY INDUSTRIAL SIBLEY INDUSTRIAL
CTR III CTR III 213 1,191 1,404
YANKEE PLACE YANKEE PLACE 2,822 15,777 18,599
LARC INDUSTRIAL PARK I LARC INDUSTRIAL
PARK I 284 1,579 1,863
LARC INDUSTRIAL PARK II LARC INDUSTRIAL
PARK II 227 1,268 1,495
LARC INDUSTRIAL PARK III LARC INDUSTRIAL
PARK III 138 764 902
LARC INDUSTRIAL PARK IV LARC INDUSTRIAL
PARK IV 91 510 601
LARC INDUSTRIAL PARK V LARC INDUSTRIAL
PARK V 97 541 638
LARC INDUSTRIAL PARK VI LARC INDUSTRIAL
PARK VI 377 2,107 2,484
LARC INDUSTRIAL PARK VII LARC INDUSTRIAL
PARK VII 245 1,376 1,621
HAMPSHIRE DIST CTR N. HAMPSHIRE DIST
CTR N. 782 4,370 5,152
HAMPSHIRE DIST CTR S. HAMPSHIRE DIST
CTR S. 910 5,085 5,995
PENN CORPORATE BUILDING PENN CORP.BLDG 315 1,762 2,077
BLOOMINGTON INDUST.CTR. BLOOMINGTON
INDUST. CTR. 628 3,508 4,136
EDINA INTERCHANGE I EDINA INTER-
CHANGE I 637 3,560 4,197
EDINA INTERCHANGE II EDINA INTER-
CHANGE II 437 2,444 2,881
EDINA INTERCHANGE III EDINA INTER-
CHANGE III 493 2,754 3,247
EDINA INTERCHAGE IV EDINA INTER-
CHAGE IV 230 1,286 1,516
EDINA INTERCHANGE V EDINA INTER-
CHANGE V 982 5,489 6,471
PAKWA BUSINESS PARK I PAKWA BUSINESS
PARK I 351 1,962 2,313
PAKWA BUSINESS PARK II PAKWA BUSINESS
PARK II 218 1,211 1,429
PAKWA BUSINESS PARK III PAKWA BUSINESS
PARK III 251 1,403 1,654
7540 BUSH LAKE ROAD 7540 BUSH
LAKE ROAD 477 2,669 3,146
CAHILL BUSINESS CTR CAHILL BUSINESS
CTR 513 2,897 3,410
10801 RED CIRCLE DRIVE 10801 RED CIRCLE
DRIVE 533 2,981 3,514
ENCORE PARK ENCORE PARK 984 5,503 6,487
JOHNSON BUILDING JOHNSON BUILDING 558 3,124 3,682
CORNERSTONE BUSINESS CTR CORNERSTONE
BUSINESS CTR 1,469 8,212 9,681
WESTSIDE BUSINESS PARK WESTSIDE
BUSINESS PARK 1,189 6,646 7,835
KNOX LAND LEASE KNOX LAND LEASE 1,066 - 1,066
OXFORD INDUSTRIAL OXFORD INDUST. 103 576 679
CEDAR LAKE BUSINESS CTR CEDAR LAKE
BUSINESS CTR 334 1,868 2,202
MEDICINE LAKE INDUST CTR MEDICINE LAKE
INDUST CTR 1,158 6,472 7,630
MEDICINE LAKE PROF BLDG MEDICINE LAKE
PROF BLDG 77 430 507
801 ZANE AVE NORTH 801 ZANE AVE N. 369 2,064 2,433
DECATUR BUSINESS CTR DECATUR
BUSINESS CTR 436 2,454 2,890
SANDBURG INDUSTRIAL CTR SANDBURG INDUST.
CTR 456 2,551 3,007
CRYSTAL INDUSTRIAL CTR CRYSTAL INDUST.
CTR 456 2,600 3,056
BASS LAKE BUSINESS CTR BASS LAKE
BUSINESS CTR 299 1,669 1,968
UNIVERSITY LAND LEASE UNIVERSITY LAND
LEASE 296 - 296
ELIMINATIONS - (1,955) (1,955)
------- --------- ---------
TOTALS 231,614 1,591,604 1,823,218
======= ========= =========
- 52 -
<PAGE>
ACCUM DATE OF DATE DEPR.
LOCATION/DEVELOPMENT BUILDING DEPR. CONSTRN. ACQUIRED LIFE
---------------------- -------- ------- ------- -------- -----
INDIANAPOLIS, INDIANA
---------------------
<S> <C> <C> <C> <C> <C>
PARK 100 BUSINESS PARK BUILDING #32 286 1978 1986 (4)
PARK 100 BUSINESS PARK BUILDING #34 557 1979 1986 (4)
PARK 100 BUSINESS PARK BUILDING #38 30 1978 1993 (4)
PARK 100 BUSINESS PARK BUILDING #79 337 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #80 297 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #83 286 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #84 291 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #95 508 1993 1994 (4)
PARK 100 BUSINESS PARK BUILDING #96 1,061 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #97 837 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #98 1,030 1968 1994 (4)
PARK 100 BUSINESS PARK BUILDING #100 303 1995 1995 (4)
PARK 100 BUSINESS PARK BUILDING #107 162 1984 1995 (4)
PARK 100 BUSINESS PARK BUILDING #109 577 1985 1986 (4)
PARK 100 BUSINESS PARK BUILDING #116 782 1988 1988 (4)
PARK 100 BUSINESS PARK BUILDING #118 383 1988 1993 (4)
PARK 100 BUSINESS PARK BUILDING #119 431 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #121 114 1989 1993 (4)
PARK 100 BUSINESS PARK BUILDING #122 451 1990 1993 (4)
PARK 100 BUSINESS PARK BUILDING #125 621 1994 1994 (4)
PARK 100 BUSINESS PARK BUILDING #126 177 1984 1994 (4)
PARK 100 BUSINESS PARK BUILDING #127 163 1995 1995 (4)
PARK 100 BUSINESS PARK BUILDING #128 773 1996 1996 (4)
PARK 100 BUSINESS PARK BUILDING #129 221 1996 1996 (4)
PARK 100 BUSINESS PARK BUILDING #130 196 1996 1996 (4)
PARK 100 BUSINESS PARK BUILDING #131 197 1997 1997 (4)
PARK 100 BUSINESS PARK BUILDING #132 8 1997 1997 (4)
PARK 100 BUSINESS PARK BUILDING #133 6 1997 1997 (4)
GEORGETOWN ROAD BUILDING 1 66 1987 1996 (4)
GEORGETOWN ROAD BUILDING 2 71 1987 1996 (4)
GEORGETOWN ROAD BUILDING 3 52 1987 1996 (4)
PARK 100 BUSINESS PARK UPS LAND LEASE 3 N/A 1997 (4)
PARK 100 BUSINESS PARK NORGATE LAND LEASE - N/A 1995 (4)
PARK 100 BUSINESS PARK KENNY ROGERS
LAND LSE 1 N/A 1995 (4)
PARK 100 BUSINESS PARK SCHAHET HOTELS
LAND LSE - N/A 1995 (4)
PARK 100 BUSINESS PARK NORCO LAND LEASE 5 N/A 1995 (4)
PARK 100 BUSINESS PARK ZOLLMAN LAND LEASE - N/A 1994 (4)
SHADELAND STATION 7351 SHADELAND 199 1983 1993 (4)
SHADELAND STATION BUILDING #204/205 923 1984 1986 (4)
SHADELAND STATION 7240 SHADELAND 1,162 1985 1993 (4)
SHADELAND STATION 7330 SHADELAND 919 1988 1988 (4)
SHADELAND STATION 7369 SHADELAND 126 1989 1993 (4)
SHADELAND STATION 7340 SHADELAND 280 1989 1993 (4)
SHADELAND STATION 7400 SHADELAND 455 1990 1993 (4)
CASTLETON CORNER CUB PLAZA 1,510 1986 1986 (4)
CASTLETON SHOPPING CTR. MICHAEL'S PLAZA 440 1984 1993 (4)
SOUTH PARK, INDIANA BUILDING #1 462 1989 1993 (4)
SOUTH PARK, INDIANA BUILDING #2 493 1990 1993 (4)
SOUTH PARK, INDIANA BUILDING #3 458 1990 1993 (4)
SOUTH PARK, INDIANA BRYLANE PKG
LOT LEASE 14 N/A 1994 (4)
GREENWOOD CORNER GREENWOOD CORNER 999 1986 1986 (4)
GREENWOOD CORNER 1st INDIANA BANK 27 1988 1993 (4)
ST. FRANCIS ST. FRANCIS 780 1995 1995 (4)
COMMUNITY MOB COMMUNITY MOB 234 1995 1995 (4)
HILLSDALE TECHNECENTER BUILDING #4 580 1987 1993 (4)
HILLSDALE TECHNECENTER BUILDING #5 426 1987 1993 (4)
HILLSDALE TECHNECENTER BUILDING #6 442 1987 1993 (4)
KEYSTONE AT THE CROSSING 8465 KEYSTONE 94 1983 1995 (4)
WOODFIELD AT THE CROSSING WOODFIELD II 1,247 1987 1993 (4)
WOODFIELD AT THE CROSSING WOODFIELD III 2,677 1989 1993 (4)
KEYSTONE AT THE CROSSING 8555 KATC 69 1985 1997 (4)
KEYSTONE AT THE CROSSING 3520 COMMERCE CRSG 221 1976 1993 (4)
ONE PARKWOOD ONE PARKWOOD 569 1989 1995 (4)
TWO PARKWOOD TWO PARKWOOD 675 1996 1996 (4)
THREE PARKWOOD THREE PARKWOOD 169 1997 1997 (4)
PALAMOR PALAMOR 113 1973 1995 (4)
FRANKLIN ROAD BUS. CTR. FRANKLIN ROAD
BUS. CTR. 492 1962 1995 (4)
NAMPAC BUILDING NAMPAC BUILDING 115 1974 1995 (4)
HAMILTON CROSSING BUILDING #1 342 1989 1993 (4)
HAMILTON CROSSING BUILDING #2 15 1997 1997 (4)
KEYSTONE AT THE CROSSING F.C. TUCKER BLDG 29 1978 1993 (4)
PARK FLETCHER BUILDING #14 102 1978 1995 (4)
- 48 -
<PAGE>
6060 GUION RD (VANSTAR) 6060 GUION RD
(VANSTAR) 103 1968 1996 (4)
NORTH AIRPORT PARK BUILDING #2 260 1997 1997 (4)
4750 KENTUCKY AVE 4750 KENTUCKY AVE 78 1974 1996 (4)
4316 W.MINNESOTA 4316 W.MINNESOTA 78 1970 1996 (4)
FORT WAYNE, INDIANA
-------------------
COLDWATER CROSSING COLDWATER SHOPPES 1,504 1990 1994 (4)
LEBANON, INDIANA
----------------
AMERICAN AIR FILTER AMERICAN AIR FILTER 153 1996 1996 (4)
PURITY WHOLESALE PURITY WHOLESALE 132 1997 1997 (4)
PAMIDA PAMIDA 107 1997 1997 (4)
NASHVILLE, TENNESSEE
--------------------
KEEBLER BUILDING KEEBLER BUILDING 86 1985 1995 (4)
HAYWOOD OAKS TECHNECTR BUILDING #2 213 1988 1993 (4)
HAYWOOD OAKS TECHNECTR BUILDING #3 326 1988 1993 (4)
HAYWOOD OAKS TECHNECTR BUILDING #4 229 1988 1993 (4)
HAYWOOD OAKS TECHNECTR BUILDING #5 477 1988 1993 (4)
HAYWOOD OAKS TECHNECTR BUILDING #6 721 1989 1993 (4)
HAYWOOD OAKS TECHNECTR BUILDING #7 308 1995 1995 (4)
HAYWOOD OAKS TECHNECTR BUILDING #8 54 1997 1997 (4)
GREENBRIAR BUS. PARK GREENBRIAR 555 1986 1993 (4)
HEBRON, KENTUCKY
----------------
SOUTHPARK, KENTUCKY CR SERVICES 359 1994 1994 (4)
SOUTHPARK, KENTUCKY BUILDING #1 433 1990 1993 (4)
SOUTHPARK, KENTUCKY BUILDING #3 374 1991 1993 (4)
SOUTHPARK, KENTUCKY REDKEN 284 1994 1994 (4)
FLORENCE, KENTUCKY
------------------
EMPIRE COMMERCE EMPIRE COMMERCE 123 1973 1996 (4)
SOFA EXPRESS SOFA EXPRESS 13 1997 1997 (4)
CINCINNATI, OHIO
----------------
PARK 50 TECHNECENTER BUILDING #17 2,021 1985 1986 (4)
PARK 50 TECHNECENTER BUILDING #20 1,704 1987 1988 (4)
PARK 50 TECHNECENTER BUILDING #25 510 1989 1993 (4)
PARK 50 TECHNECENTER SDRC BUILDING 2,081 1991 1993 (4)
FIDELITY DRIVE DUN & BRADSTREET 894 1972 1986 (4)
WORLD PARK BUILDING #5 1,126 1987 1990 (4)
WORLD PARK BUILDING #6 987 1987 1990 (4)
WORLD PARK BUILDING #7 943 1987 1990 (4)
WORLD PARK BUILDING #8 595 1989 1993 (4)
WORLD PARK BUILDING #9 438 1989 1993 (4)
WORLD PARK BUILDING #11 596 1989 1993 (4)
WORLD PARK BUILDING #14 421 1989 1993 (4)
WORLD PARK BUILDING #15 341 1990 1993 (4)
WORLD PARK BUILDING #16 324 1989 1993 (4)
WORLD PARK BUILDING #18
(BEIERSDORF) 40 1997 1997 (4)
EASTGATE PLAZA EASTGATE PLAZA 343 1990 1995 (4)
FAIRFIELD BUSINESS CTR. BUILDING D 93 1990 1995 (4)
FAIRFIELD BUSINESS CTR. BUILDING E 149 1990 1995 (4)
UNIVERSITY MOVING UNIVERSITY MOVING 118 1991 1995 (4)
TRI-COUNTY OFFICE PARK BUILDINGS #1 - #4 785 1971 1993 (4)
GOVERNOR'S PLAZA GOVERNOR'S PLAZA 938 1990 1993 (4)
GOVERNOR'S PLAZA KING'S MALL II 463 1988 1989 (4)
GOVERNOR'S PLAZA KOHLS 292 1994 1994 (4)
SOFA EXPRESS SOFA EXPRESS 46 1995 1995 (4)
- 49 -
<PAGE>
OFFICE MAX OFFICE MAX 78 1995 1995 (4)
312 ELM BUILDING 312 ELM 5,499 1992 1993 (4)
311 ELM STREET ZUSSMAN 800 1902 1993 (4)
ENTERPRISE BUS. PARK BUILDING 1 689 1990 1993 (4)
ENTERPRISE BUS. PARK BUILDING 2 793 1990 1993 (4)
ENTERPRISE BUS. PARK BUILDING A 49 1987 1995 (4)
ENTERPRISE BUS. PARK BUILDING B 78 1988 1995 (4)
ENTERPRISE BUS. PARK BUILDING D 225 1989 1995 (4)
312 PLUM STREET S & L DATA 3,041 1987 1993 (4)
TRIANGLE OFFICE PARK BUILDINGS #1 - #38 4,681 1965 1986 (4)
GOVERNOR'S HILL 8790 GOVERNOR'S HILL 619 1985 1991 (4)
GOVERNOR'S HILL 8700 GOVERNOR'S HILL 618 1985 1993 (4)
GOVERNOR'S HILL 8800 GOVERNOR'S HILL 1,148 1985 1986 (4)
GOVERNOR'S HILL 8600 GOVERNOR'S HILL 2,281 1986 1991 (4)
GOVERNOR'S POINTE 4770 GOVERNOR'S PTE. 1,955 1986 1988 (4)
GOVERNOR'S POINTE 4700 BUILDING 1,436 1987 1988 (4)
GOVERNOR'S POINTE 4900 BUILDING 1,298 1987 1989 (4)
GOVERNOR'S POINTE 4705 GOVERNOR'S PTE. 1,102 1988 1993 (4)
GOVERNOR'S POINTE 4800 GOVERNOR'S PTE. 847 1989 1993 (4)
GOVERNOR'S POINTE LOWES 37 1997 1997 (4)
GOVERNOR'S POINTE ANTHEM PRESCRIP.MGMT. 74 1997 1997 (4)
GOVERNOR'S POINTE 4660 GOVERNOR'S PTE 59 1997 1997 (4)
BIGG'S SUPERCENTER BIGG'S SUPERCENTER 292 1996 1996 (4)
GOVERNOR'S POINTE 4605 GOVERNOR'S PTE 1,951 1990 1993 (4)
MONTGOMERY CROSSING STEINBERG'S 74 1993 1993 (4)
MONTGOMERY CROSSING II SPORTS UNLIMITED 321 1994 1994 (4)
GOVERNOR'S PLAZA KING'S AUTO MALL I 1,108 1990 1993 (4)
MOSTELLER DIST. CTR. MOSTELLER DIST.CTR. 469 1957 1996 (4)
MOSTELLER DIST. CTR. MOSTELLER DIST.CTR.II 23 1997 1997 (4)
FRANCISCAN HEALTH FRANCISCAN HEALTH 135 1996 1996 (4)
PERIMETER PARK BUILDING A 38 1991 1996 (4)
PERIMETER PARK BUILDING B 32 1991 1996 (4)
CREEK ROAD BUILDING 1 25 1971 1996 (4)
CREEK ROAD BUILDING 2 34 1971 1996 (4)
WEST LAKE CTR. WEST LAKE CTR. 631 1981 1996 (4)
EXECUTIVE PLAZA I EXECUTIVE PLAZA I 135 1980 1996 (4)
EXECUTIVE PLAZA II EXECUTIVE PLAZA II 138 1981 1996 (4)
LAKE FOREST PLACE LAKE FOREST PLACE 651 1985 1996 (4)
HUNTINGTON BANK HUNTINGTON BANK 8 1986 1996 (4)
OHIO NATIONAL OHIO NATIONAL 1,312 1996 1996 (4)
CORNELL COMMERCE CORNELL COMMERCE 280 1989 1996 (4)
ONE ASHVIEW PLACE ONE ASHVIEW PLACE 117 1989 1997 (4)
REMINGTON PARK BLDG A 12 1982 1997 (4)
REMINGTON PARK BLDG B 12 1982 1997 (4)
BLUE ASH OFFICE CTR VI BLUE ASH OFFICE CTR VI 16 1989 1997 (4)
SKYPORT BUSINESS PARK SKYPORT BUILDING 1 102 1996 1997 (4)
APPLEBEES APPLEBEES 2 N/A 1997 (4)
7910 KENTUCKY DRIVE 7910 KENTUCKY DRIVE 9 1980 1997 (4)
7920 KENTUCKY DRIVE 7920 KENTUCKY DRIVE 14 1974 1997 (4)
KENWOOD EXEC. CTR. KENWOOD EXEC. CTR. - 1981 1997 (4)
CLEVELAND, OHIO
---------------
ROCK RUN - NORTH ROCK RUN - NORTH 277 1984 1996 (4)
ROCK RUN - CTR. ROCK RUN - CTR. 323 1985 1996 (4)
ROCK RUN - SOUTH ROCK RUN - SOUTH 295 1986 1996 (4)
FREEDOM SQUARE I FREEDOM SQUARE I 186 1980 1996 (4)
FREEDOM SQUARE II FREEDOM SQUARE II 552 1987 1996 (4)
CORPORATE PLAZA I CORPORATE PLAZA I 714 1989 1996 (4)
CORPORATE PLAZA II CORPORATE PLAZA II 543 1991 1996 (4)
ONE CORPORATE EXCHANGE ONE CORPORATE EXCHANGE 418 1989 1996 (4)
FREEDOM SQUARE III FREEDOM SQUARE III 113 1997 1997 (4)
6111 OAK TREE 6111 OAK TREE 28 1979 1997 (4)
CORPORATE PLACE CORPORATE PLACE 214 1988 1996 (4)
CORPORATE CIRCLE CORPORATE CIRCLE 328 1983 1996 (4)
LANDERBROOK CORPORATE LANDERBROOK CORP. 59 1997 1997 (4)
DYMENT DYMENT 88 1988 1997 (4)
JOHNSON CONTROLS JOHNSON CONTROLS 39 1972 1997 (4)
SOLON INDUSTRIAL PARK 30600 CARTER 16 1971 1997 (4)
SOLON INDUSTRIAL PARK 6230 COCHRAN 12 1977 1997 (4)
SOLON INDUSTRIAL PARK 31900 SOLON - FRONT 9 1974 1997 (4)
SOLON INDUSTRIAL PARK 5821 SOLON 11 1970 1997 (4)
SOLON INDUSTRIAL PARK 6161 COCHRAN 8 1978 1997 (4)
SOLON INDUSTRIAL PARK 5901 HARPER 7 1970 1997 (4)
- 50 -
<PAGE>
SOLON INDUSTRIAL PARK 29125 SOLON 10 1980 1997 (4)
SOLON INDUSTRIAL PARK 6661 COCHRAN 5 1979 1997 (4)
SOLON INDUSTRIAL PARK 6521 DAVIS 3 1979 1997 (4)
SOLON INDUSTRIAL PARK 31900 SOLON - REAR 2 1982 1997 (4)
CORPORATE CTR. I CORPORATE CTR. I 303 1985 1996 (4)
CORPORATE CTR. II CORPORATE CTR. II 307 1987 1996 (4)
COLUMBUS, OHIO
--------------
CORP. PARK AT TUTTLE
CRSG LITEL 1,923 1990 1993 (4)
CORP. PARK AT TUTTLE
CRSG STERLING 1 1,301 1990 1993 (4)
CORP. PARK AT TUTTLE
CRSG INDIANA INSURANCE 617 1994 1994 (4)
CORP. PARK AT TUTTLE
CRSG STERLING 2 383 1995 1995 (4)
CORP. PARK AT TUTTLE
CRSG JOHN ALDEN LIFE INS. 521 1995 1995 (4)
CORP. PARK AT TUTTLE
CRSG CARDINAL HEALTH 1,189 1995 1995 (4)
CORP. PARK AT TUTTLE
CRSG COMPMANAGEMENT 27 1997 1997 (4)
CORP. PARK AT TUTTLE
CRSG STERLING 3 419 1996 1995 (4)
CORP. PARK AT TUTTLE
CRSG NATIONWIDE 1,101 1996 1996 (4)
CORP. PARK AT TUTTLE
CRSG LAZARUS GROUND LEASE - N/A 1996 (4)
CORP. PARK AT TUTTLE
CRSG XEROX 922 1992 1994 (4)
SUN TV SUN TV 225 1995 1997 (4)
SOUTH POINTE BUILDING D 18 1997 1997 (4)
SOUTH POINTE BUILDING E 8 1997 1997 (4)
PET FOODS
BUILD-TO-SUIT PET FOODS DIST. 435 1993 1993 (4)
GALYAN'S GALYAN'S 267 1984 1994 (4)
TUTTLE RETAIL CTR. TUTTLE RETAIL CTR. 343 1995 1995 (4)
MBM BUILDING MBM BUILDING 148 1978 1994 (4)
METROCENTER III METROCENTER III 272 1983 1996 (4)
SCIOTO CORPORATE CTR. SCIOTO CORP. CTR. 96 1987 1996 (4)
V.A. HOSPITAL V.A. HOSPITAL 773 1994 1994 (4)
PARKWOOD PLACE PARKWOOD PLACE 213 1997 1997 (4)
TUTTLE CROSSING UNO'S N/A 1997 (4)
DAYTON, OHIO
------------
SUGARCREEK PLAZA SUGARCREEK PLAZA 1,462 1988 1988 (4)
CHICAGO, ILLINOIS
-----------------
EXECUTIVE TOWERS I EXECUTIVE TOWERS I 223 1983 1997 (4)
EXECUTIVE TOWERS II EXECUTIVE TOWERS II 278 1984 1997 (4)
EXECUTIVE TOWERS III EXECUTIVE TOWERS III 296 1987 1997 (4)
DECATUR, ILLINOIS
-----------------
PARK 101 BUILDING #3 1,082 1979 1986 (4)
PARK 101 BUILDING #8 471 1980 1986 (4)
PARK 101 ILL POWER LAND LEASE - N/A 1994 (4)
BLOOMINGTON, ILLINOIS
---------------------
LAKEWOOD PLAZA LAKEWOOD PLAZA 1,895 1987 1988 (4)
CHAMPAIGN, ILLINOIS
-------------------
MARKET VIEW SHOPPING
CTR. MARKET VIEW CTR. 1,946 1985 1986 (4)
ST. LOUIS, MISSOURI
-------------------
LAUMEIER I LAUMEIER I 775 1987 1995 (4)
LAUMEIER II LAUMEIER II 720 1988 1995 (4)
WESTVIEW PLACE WESTVIEW PLACE 704 1988 1995 (4)
WESTMARK WESTMARK 564 1987 1995 (4)
ALFA - LAVAL ALFA - LAVAL 153 1996 1996 (4)
I-70 CENTER I-70 CENTER 159 1986 1996 (4)
1920 BELTWAY 1920 BELTWAY 53 1986 1996 (4)
POINT 70 3322 NGIC - 1987 1997 (4)
POINT 70 3300 POINTE 70 130 1989 1997 (4)
RIVERPORT TOWER RIVERPORT TOWER 209 1991 1997 (4)
SCRIPTS BUILDING SCRIPTS BUILDING 56 1992 1997 (4)
RIVERPORT DIST. RIVERPORT DIST. 15 1990 1997 (4)
- 51 -
<PAGE>
SCHULTZ BUILDING SCHULTZ BUILDING 13 1989 1997 (4)
MARYVILLE CENTER 500 MARYVILLE CTR. 191 1984 1997 (4)
MARYVILLE CENTER 530 MARYVILLE CTR. 97 1990 1997 (4)
MARYVILLE CENTER 550 MARYVILLE CTR. 90 1988 1997 (4)
MARYVILLE CENTER 635 MARYVILLE CTR. 92 1987 1997 (4)
MARYVILLE CENTER 655 MARYVILLE CTR. 115 1994 1997 (4)
MARYVILLE CENTER 540 MARYVILLE CTR. 82 1990 1997 (4)
TWIN OAKS TWIN OAKS 53 1994 1997 (4)
SOUTHPORT I SOUTHPORT I 5 1977 1997 (4)
SOUTHPORT II SOUTHPORT II 5 1978 1997 (4)
SOUTHPORT COMMERCE SOUTHPORT COMMERCE
CTR. CTR. 7 1978 1997 (4)
MINNEAPOLIS, MINNESOTA
----------------------
ENTERPRISE INDUSTRIAL ENTERPRISE INDUSTRIAL
CTR. CTR. 21 1979 1997 (4)
APOLLO DIST. CTR. APOLLO DIST. CTR. 21 1997 1997 (4)
SIBLEY INDUST.CTR. I SIBLEY INDUST.
CTR. I 9 1973 1997 (4)
SIBLEY INDUST.CTR. II SIBLEY INDUST.
CTR. II 6 1972 1997 (4)
SIBLEY INDUST.CTR. III SIBLEY INDUST.
CTR. III 5 1967 1997 (4)
YANKEE PLACE YANKEE PLACE 68 1986 1997 (4)
LARC INDUST. PARK I LARC INDUST. PARK I 7 1977 1997 (4)
LARC INDUST. PARK II LARC INDUST. PARK II 5 1976 1997 (4)
LARC INDUST. PARK III LARC INDUST. PARK III 3 1980 1997 (4)
LARC INDUST. PARK IV LARC INDUST. PARK IV 2 1980 1997 (4)
LARC INDUST. PARK V LARC INDUST. PARK V 2 1980 1997 (4)
LARC INDUST. PARK VI LARC INDUST. PARK VI 9 1975 1997 (4)
LARC INDUST. PARK VII LARC INDUST. PARK VII 6 1973 1997 (4)
HAMPSHIRE DIST CTR. N. HAMPSHIRE DIST CTR. N. 19 1979 1997 (4)
HAMPSHIRE DIST CTR. S. HAMPSHIRE DIST CTR. S. 22 1979 1997 (4)
PENN CORPORATE BLDG. PENN CORPORATE BLDG 8 1977 1997 (4)
BLOOMINGTON INDUST. BLOOMINGTON INDUST.
CTR. CTR. 15 1963 1997 (4)
EDINA INTERCHANGE I EDINA INTERCHANGE I 15 1995 1997 (4)
EDINA INTERCHANGE II EDINA INTERCHANGE II 11 1980 1997 (4)
EDINA INTERCHANGE III EDINA INTERCHANGE III 12 1981 1997 (4)
EDINA INTERCHAGE IV EDINA INTERCHAGE IV 6 1974 1997 (4)
EDINA INTERCHANGE V EDINA INTERCHANGE V 24 1974 1997 (4)
PAKWA BUS. PARK I PAKWA BUS. PARK I 8 1979 1997 (4)
PAKWA BUS. PARK II PAKWA BUS. PARK II 5 1979 1997 (4)
PAKWA BUS. PARK III PAKWA BUS. PARK III 6 1979 1997 (4)
7540 BUSH LAKE ROAD 7540 BUSH LAKE ROAD 11 1967 1997 (4)
CAHILL BUSINESS CTR. CAHILL BUSINESS CTR. 13 1980 1997 (4)
10801 RED CIRCLE DR. 10801 RED CIRCLE DR. 13 1977 1997 (4)
ENCORE PARK ENCORE PARK 24 1977 1997 (4)
JOHNSON BUILDING JOHNSON BUILDING 14 1974 1997 (4)
CORNERSTONE BUS.CTR. CORNERSTONE BUS. CTR. 35 1996 1997 (4)
WESTSIDE BUS. PARK WESTSIDE BUS. PARK 29 1987 1997 (4)
KNOX LAND LEASE KNOX LAND LEASE - N/A 1997 (4)
OXFORD INDUSTRIAL OXFORD INDUSTRIAL 2 1971 1997 (4)
CEDAR LAKE BUS. CTR. CEDAR LAKE BUS. CTR. 8 1976 1997 (4)
MEDICINE LAKE INDUST. MEDICINE LAKE
CTR. INDUST.CTR. 28 1970 1997 (4)
MEDICINE LAKE PROF. MEDICINE LAKE PROF.
BLDG. BLDG. 2 1970 1997 (4)
801 ZANE AVE NORTH 801 ZANE AVE NORTH 9 1978 1997 (4)
DECATUR BUSINESS CTR. DECATUR BUSINESS CTR. 10 1982 1997 (4)
SANDBURG INDUSTRIAL SANDBURG INDUSTRIAL
CTR. CTR. 11 1973 1997 (4)
CRYSTAL INDUST. CTR. CRYSTAL INDUST. CTR. 14 1974 1997 (4)
BASS LAKE BUS. CTR. BASS LAKE BUS. CTR. 7 1981 1997 (4)
UNIVERSITY LAND UNIVERSITY LAND
LEASE LEASE - N/A 1997 (4)
ELIMINATIONS -
-------
TOTALS 116,264
=======
</TABLE>
- 52 -
<PAGE>
(1) Costs capitalized subsequent to acquisition include decreases for
purchase price reduction payments received and land sales or takedowns.
(2) The Company owns a 66.67% interest in the partnership owning this
building. The Company shares in the cash flow of this building in accordance
with the Company's partnership interests.
(3) The four buildings comprising Tri-County Office Park were constructed in
1971, 1973, and 1982.
(4) Depreciation of real estate is computed using the straight-line method
over 40 years for building and shorter periods based on lease terms
(generally 3 to 10 years) for tenant improvements.
<TABLE>
<CAPTION>
Real Estate Assets Accumulated Depreciation
----------------------------- --------------------------
1997 1996 1995 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at
beginning
of year $1,181,431 $ 804,164 $653,552 $ 82,207 $56,335 $38,058
Acquisitions 525,751 213,979 114,705 - - -
Construction
costs and
tenant
improvements 156,745 173,186 84,790 - - -
Depreciation
expense - - - 39,768 27,569 20,416
Acquisition of
minority
interest and
joint venture
interest 19,446 21,627 796 - - -
--------- --------- ------- ------- ------ ------
1,883,373 1,212,956 853,843 121,975 83,904 58,474
Deductions
during year:
Cost of real
estate sold (32,333) (11,347) (4,393) (4,224) (586) (1,259)
Contribution to
Joint Venture (27,873) (19,175) (44,725) (950) (108) (319)
Other 51 (1,003) (561) (537) (1,003) (561)
--------- --------- ------- ------- ------ ------
$1,823,218 $1,181,431 $804,164 $116,264 $82,207 $56,335
========= ========= ======= ======= ====== ======
</TABLE>
- 53 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
DUKE REALTY INVESTMENTS, INC.
March 20, 1998 By: /s/ Thomas L. Hefner
-----------------------------------
Thomas L. Hefner
President and Chief Executive Officer
By: /s/ Darell E. Zink, Jr.
-----------------------------------
Darell E. Zink, Jr.
Executive Vice President and
Chief Financial Officer
By: /s/ Dennis D. Oklak
-----------------------------------
Dennis D. Oklak
Executive Vice President and
Chief Administrative Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Signature Date Title
/s/ John W. Wynne * 3/20/98 Chairman of the Board
-------------------
John W. Wynne
/s/ Thomas L. Hefner * 3/20/98 President and Chief Executive
-------------------- Officer and Director
Thomas L. Hefner
/s/ Darell E. Zink, Jr.* 3/20/98 Executive Vice President and
--------------------- Chief Financial Officer and
Darell E. Zink, Jr. Director
/s/ Dennis D. Oklak * 3/20/98 Executive Vice President and
------------------- Chief Administrative Officer
Dennis D. Oklak
- 54 -
<PAGE>
/s/ Geoffrey Button * 3/20/98 Director
---------------------
Geoffrey Button
/s/ John D. Peterson * 3/20/98 Director
----------------------
John D. Peterson
/s/ Ngaire E. Cuneo * 3/20/98 Director
--------------------
Ngaire E. Cuneo
/s/ L. Ben Lytle * 3/20/98 Director
------------------
L. Ben Lytle
/s/ Jay J. Strauss * 3/20/98 Director
--------------------
Jay J. Strauss
/s/ Howard L. Feinsand * 3/20/98 Director
------------------------
Howard L. Feinsand
/s/ James E. Rogers * 3/20/98 Director
-----------------------
James E. Rogers
/s/ Daniel C. Staton* 3/20/98 Director
--------------------
Daniel C. Staton
* By Dennis D. Oklak, Attorney-in-Fact /s/ Dennis D. Oklak
-----------------------
- 55 -
ARTICLES OF AMENDMENT
OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
DUKE REALTY INVESTMENTS, INC.
The undersigned officer of DUKE REALTY INVESTMENTS, INC. (the
"Corporation"), existing pursuant to the provisions of INDIANA
BUSINESS CORPORATION LAW (IND. CODE 23-1 ET SEQ.), AS AMENDED
(the "Act") and desiring to give notice of corporate action
effectuating amendment of certain provisions of its Amended and
Restated Articles of Incorporation certify the following facts:
ARTICLE I - AMENDMENT
SECTION 1: The date of incorporation of the Corporation is
MARCH 12, 1992
SECTION 2: The name of the Corporation following this amendment of
its Amended and Restated Articles of Incorporation is:
DUKE REALTY INVESTMENTS, INC.
SECTION 3: The exact text to Article VI of the Amended and
Restated Articles of Incorporation is amended to add Section 6.05
as follows:
SEE ATTACHED EXHIBIT A
---------
This Amendment is to be effective at 12:01a.m. on August 16, 1996.
ARTICLE II-MANNER OF ADOPTION AND VOTE
SECTION 1: Action by Directors:
The Board of Directors of the Corporation duly adopted resolutions
amending Article VI of the Amended and Restated Articles of
Incorporation. These resolutions were adopted at meetings duly
held on July 27, 1995, February 1, 1996 and August 6, 1996, at
which quorums were present.
SECTION 2: Action by Shareholders:
Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation
were not required to vote with respect to this amendment to the
Amended and Restated Articles of Incorporation.
SECTION 3: Compliance with legal requirements:
The manner of the adoption of the Articles of Amendment and the
vote by which they were adopted constitute full legal compliance
with the provisions of the Act, the Amended and Restated Articles
of Incorporation, and the Code of By-Laws of the Corporation.
I hereby verify, subject to penalties for perjury, that the facts
contained herein are true this 16th day of August, 1996.
/s/ Dennis D. Oklak
------------------------------
Dennis D. Oklak, Vice President
and Treasurer
Exhibit A
6.05. Series A Preferred Stock. Pursuant to authority granted
under Section 6.01 of the Corporation's Amended and Restated
Articles of Incorporation (the "Articles of Incorporation"), the
Board of Directors of the Corporation hereby establishes a series
of preferred shares designated the 9.10%
Series A Cumulative Redeemable Preferred Shares ($0.01 Par Value
Per Share) (Liquidation Preference $250.00 Per Share) (the "Series
A Preferred Shares") on the following terms:
(a) Number. The number of authorized shares of the Series A
Preferred Shares shall be 460,000.
(b) Relative Seniority. In respect of rights to receive
dividends and to participate in distributions or payments in the event
of any liquidation, dissolution or winding up of the Corporation, the Series
A Preferred Shares shall rank senior to the Common Shares and any other
class or series of shares of the Corporation ranking, as to
dividends and upon liquidation, junior to the Series A Preferred Shares
(collectively, "Junior Shares").
(c) Dividends.
(1) The holders of the then outstanding Series A Preferred
Shares shall be entitled to receive, when and as declared by the
Board of Directors out of any funds legally available
therefor, cumulative dividends at the rate of $22.75 per share
per year, payable in equal amounts of $5.6875 per share quarterly
in cash on the last day of each February, May, August
and November or, if not a Business Day (as hereinafter defined),
the next succeeding Business Day beginning on December 2, 1996
(each such day being hereinafter called a "Quarterly
Dividend Date" and each period ending on a Quarterly Dividend
Date being hereinafter called a "Dividend Period"). Dividends shall
be payable to holders of record as they appear in the
share records of the Corporation at the close of business on the
applicable record date (the "Record Date"), which shall be the first
day of the calendar month in which the applicable Quarterly Dividend Date
falls on or such other date designated by the Board of Directors of
the Corporation for the payment of dividends that is not more
than 30 nor less than 10 days prior to such Quarterly Dividend Date.
The amount of any dividend payable for any Dividend Period shorter than a
full Dividend Period shall be prorated and computed on the basis of a
360-day year of twelve 30-day months. Dividends on each share of
Series A Preferred Shares shall accrue and be cumulative from and including
the date of original issue thereof, whether or not (i) dividends on such
shares are earned or declared or (ii) on any Quarterly Dividend
Date there shall be funds legally available for the payment of
dividends. Dividends paid on the Series A Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a per share basis among
all such shares at the time outstanding.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation
or executive order to close.
(2) The amount of any dividends accrued on any Series A
Preferred Shares at any Quarterly Dividend Date shall be the amount of
any unpaid dividends accumulated thereon, to and including such Quarterly
Dividend Date, whether or not earned or declared, and the
amount of dividends accrued on any shares of Series A Preferred
Shares at any date other than a Quarterly Dividend Date shall be equal
to the sum of the amount of any unpaid dividends accumulated thereon, to
and including the last preceding Quarterly Dividend Date, whether
or not earned or declared, plus an amount calculated on the basis
of the annual dividend rate of $22.75 per share for the period after such
last preceding Quarterly Dividend Date to and including the date as of
which the calculation is made based on a 360-day year of twelve 30-day months.
(3) Except as provided in this Section 6.05, the Series A
Preferred Shares shall not be entitled to participate in the earnings
or assets of the Corporation.
(4) Any dividend payment made on the Series A Preferred
Shares shall be first credited against the earliest accrued but unpaid
dividend due with respect to such shares which remains payable.
(5) If, for any taxable year, the Company elects to
designate as "capital gain dividends" (as defined in Section 857 of the
Code), any portion (the "Capital Gains Amount") of the dividends paid
or made available for the year to holders of all classes of Shares (the
"Total Dividends"), then the portion of the Capital Gains Amount
that shall be allocated to the holders of the Series A Preferred Shares
shall be the amount that the total dividends paid or made available to
the holders of the Series A Preferred Shares for the year bears to the
Total Dividends.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the Series A
Preferred Shares then outstanding shall be entitled to receive and to be
paid out of the assets of the Corporation available for distribution to its
shareholders, before any payment or distribution shall be made on
any Junior Shares, the amount of $250.00 per share, plus accrued and unpaid
dividends thereon.
(2) After the payment to the holders of the Series A
Preferred Shares of the full preferential amounts provided for in this
Section 6.05, the holders of the Series A Preferred
Shares, as such, shall have no right or claim to any of the
remaining assets of the Corporation.
(3) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable
with respect to the preference value of the Series A
Preferred Shares and any other shares of the Corporation ranking
as to any such distribution on a parity with the Series A Preferred
Shares are not paid in full, the holders of the Series A
Preferred Shares and of such other shares will share ratably in
any such distribution of assets of the Corporation in proportion to the
full respective preference amounts to which they are entitled.
(4) Neither the sale of all or substantially all of the
property or business of the Corporation, nor the merger or consolidation
of the Corporation into or with any other entity or the merger or
consolidation of any other entity into or with the Corporation, shall be
deemed to be a dissolution, liquidation or winding up, voluntary
or involuntary, for the purposes of this Section 6.05.
(e) Redemption.
(1) Optional Redemption. On and after August 31, 2001, the
Corporation may, at its option, redeem at any time all or, from time to time,
part of the Series A Preferred Shares at a price per share (the "Series A
Redemption Price"), payable in cash, of $250.00, together with all accrued
and unpaid dividends to and including the date fixed for redemption
(the "Series A Redemption Date").
(2) Procedures of Redemption.
(i) Notice of any redemption will be mailed by the
Corporation, postage prepaid, not less than 30 nor more than 60 days
prior to the Series A Redemption Date, addressed to each holder of record
of the Series A Preferred Shares to be redeemed at the address set forth
in the share transfer records of the Corporation. No failure to give such
notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any Series A Preferred
Shares except as to the holder to whom the Corporation has failed
to give notice or except as to the holder to whom notice was defective.
In addition to any information required by law or by the applicable rules
of any exchange upon which Series A Preferred Shares (or depositary shares
or receipts representing fractional interests in Series A
Preferred Shares) may be listed or admitted to trading, such notice shall
state: (a) the Series A Redemption Date; (b) the Series A Redemption Price;
(c) the number of Series A Preferred Shares to be redeemed; (d) the place or
places where certificates for such shares are to be surrendered for payment
of the Series A Redemption Price; and (e) that dividends on the shares to be
redeemed will cease to accumulate on the Series A Redemption Date.
(ii) If notice has been mailed in accordance with
subparagraph (e)(2)(i) above and provided that on or before the Series A
Redemption Date specified in such notice all funds necessary for such
redemption shall have been irrevocably set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata
benefit of the holders of the Series A Preferred Shares so
called for redemption, so as to be, and to continue to be available therefor,
then, from and after the Series A Redemption Date, dividends on the Series A
Preferred Shares so called for redemption shall cease to accumulate, and said
shares shall no longer be deemed to be outstanding and shall not have the
status of Series A Preferred Shares and all rights of the holders
thereof as shareholders of the Corporation (except the right to receive the
Series A Redemption Price) shall cease. Upon surrender, in
accordance with such notice, of the certificates for any Series A
Preferred Shares so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require
and the notice shall so state), such Series A Preferred Shares shall
be redeemed by the Corporation at the Series A Redemption Price.
In case fewer than all the Series A Preferred Shares represented
by any such certificate are redeemed, a new certificate or certificates
shall be issued representing the unredeemed Series A Preferred Shares
without cost to the holder thereof.
(iii) Any funds deposited with a bank or trust
company for the purpose of redeeming Series A Preferred Shares shall
be irrevocable except that:
(A) the Corporation shall be entitled to receive
from such bank or trust company the interest or other earnings, if any,
earned on any money so deposited in trust, and the holders of any shares
redeemed shall have no claim to such interest or other earnings; and
(B) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Series A Preferred
Shares entitled thereto at the expiration of two years from the
Applicable Series A Redemption Date shall be repaid, together with
any interest or other earnings earned thereon, to the Corporation,
and after any such repayment, the holders of the shares
entitled to the funds so repaid to the Corporation shall look only to the
Corporation for payment without interest or other earnings.
(iv) No Series A Preferred Shares may be redeemed except from
proceeds from the sale of other capital stock of the Company,
including but not limited to common stock, preferred stock, depositary
shares, interests, participations or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(v) Unless full accumulated dividends on all Series A
Preferred Shares shall have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for
payment for all past Dividend Periods and the then current Dividend Period,
no Series A Preferred Shares shall be redeemed or purchased or otherwise
acquired directly or indirectly (except by conversion into or exchange for
Junior Shares); provided, however, that the foregoing shall not
prevent the redemption of Series A Preferred Shares pursuant
to this Section 6.05 or the purchase or acquisition of Series A
Preferred Shares pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of Series
A Preferred A Shares.
(vi) If the Series A Redemption Date is after a
Record Date and before the related Quarterly Dividend Date, the
dividend payable on such Quarterly Dividend Date shall be paid to
the holder in whose name the Series A Preferred Shares to be
redeemed are registered at the close of business on
such Record Date notwithstanding the redemption thereof between
such Record Date and the related Quarterly Dividend Date or the
Corporation's default in the payment of the dividend due.
(vii) In case of redemption of less than all Series
A Preferred Shares at the time outstanding, the Series A Preferred
Shares to be redeemed shall be selected prorata from the holders of
record of such shares in proportion to the number of Series
A Preferred Shares held by such holders (with adjustments to
avoid redemption of fractional shares) or by any other equitable method
determined by the Corporation.
(f) Voting Rights. Except as required by law, and as set forth
below, the holders of the Series A Preferred Shares shall not be
entitled to vote at any meeting of the shareholders for election
of Directors or for any other purpose or otherwise to participate
in any action taken by the Corporation or the shareholders thereof,
or to receive notice of any meeting of shareholders.
(1) Whenever dividends on any Series A Preferred Shares
shall be in arrears for six or more quarterly periods, whether or
not such quarterly periods are consecutive, the
holders of such Series A Preferred Shares (voting separately as a
class with all other series of preferred shares upon which like voting
rights have been conferred and are exercisable) will
be entitled to vote for the election of two additional Directors
of the Corporation at a special meeting called by the holders of Record
of at least ten percent (10%) of any series of preferred
shares so in arrears (unless such request is received less than
90 days before the date fixed of for the next annual or special meeting
of the shareholders) or at the next annual meeting of
shareholders, and at each subsequent annual meeting until all
dividends accumulated on such Series A Preferred Shares for the
past dividend periods and the then current dividend period
shall have been fully paid or declared and a sum sufficient for
the payment thereof set aside for payment. In such case, the entire
Board of Directors of the Corporation will be increased by two Directors.
(2) So long as any Series A Preferred Shares remain
outstanding, the Corporation will not, without the affirmative
vote or consent of the holders of at least two-thirds of the
Series A Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or
increase the authorized or issued amount of, any class or series
of shares of beneficial interest ranking prior to the Series A
Preferred Shares with respect to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding
up or reclassify any authorized shares of the Corporation into
such shares, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the provisions of the
Corporation's Articles of Incorporation, whether by
merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference, privilege
or voting power of the Series A Preferred Shares or the holders
thereof; provided, however, with respect to the occurrence of any
of the Events set forth in (ii) above, so long as the Series A
Preferred Shares remain outstanding with the terms thereof
materially unchanged, taking into account that upon the
occurrence of an Event, the Corporation may not be the surviving
entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Series A
Preferred Shares and provided further that (x) any increase in the
amount of the authorized Preferred Shares or the creation or
issuance of any other Series A Preferred Shares, or (u) any increase
in the amount of authorized Series A Preferred Shares
or any other preferred shares, in each case ranking on a parity
with or junior to the Series A Preferred Shares with respect to payment
of dividends or the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or
prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding
Series A Preferred Shares shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust to
effect such redemption.
(3) On each matter submitted to a vote of the holders of
Series A Preferred Shares in accordance with this Section 6.05, or as
otherwise required by law, each Series A Preferred
Share shall be entitled to ten (10) votes, each of which ten (10)
votes may be directed separately by the holder thereof. With respect to
each Series A Preferred Share, the holder thereof may designate up to ten
(10) proxies, with each such proxy having the right to vote
a whole number of votes (totaling ten (10) votes per Series A
Preferred Share).
(g) Conversion. The Series A Preferred Shares are not convertible into
or exchangeable for any other property or securities of the Corporation.
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
DUKE REALTY INVESTMENTS, INC.
The undersigned officer of Duke Realty Investments, Inc. (the
"Corporation"), existing pursuant to the Indiana Business
Corporation Law, as amended (the "Act"), desiring to give notice
of corporate action effectuating amendment of certain provisions
of its Articles of Incorporation, certifies the following facts:
ARTICLE I
AMENDMENTS
SECTION 1. The date of incorporation of the Corporation is
March 12, 1992.
SECTION 2. The name of the Corporation following this
amendment to the Articles of Incorporation is Duke Realty
Investments, Inc.
SECTION 3. The exact text of Article V of the Articles of
Incorporation is now as follows:
The total number of shares of capital stock which this
corporation shall have authority to issue is one
hundred fifty-five million (155,000,000), of which one
hundred fifty million (150,000,000) shall be common stock
having a par value of $.01 per share, and five million
(5,000,000) shall be serial preferred
stock having a par value of $.01 per share.
ARTICLE II
MANNER OF ADOPTION AND VOTE
SECTION 1. Action by Directors. The Board of Directors
of the Corporation duly adopted a resolution proposing to amend
the terms and provisions of Article V of the Articles of
Incorporation and directing a meeting of the Shareholders,
allowing such shareholders to vote on the proposed amendment.
SECTION 2. Action by Shareholders. The Shareholders of
the Corporation entitled to vote adopted the proposed Amendment
during the annual meeting as called by the Board of Directors.
The result of such vote was as follows:
<TABLE>
<CAPTION>
<S> <C>
NUMBER OF OUTSTANDING SHARES OF
COMMON STOCK, PAR VALUE $.01 PER SHARE 31,437,846
SHARES ENTITLED TO VOTE: 31,437,846
SHARES REPRESENTED AT THE MEETING: 26,167,822
SHARES VOTED IN FAVOR: 21,479,543
SHARES VOTED AGAINST: 4,461,187
ABSTENTIONS: 77,088
SECTION 3. Compliance with Legal Requirements. The manner of
adoption of the Articles of Amendment and the vote by which they
were adopted constitute full legal compliance with the provisions
of the Act, the Articles of Incorporation, and the By-Laws of the
Corporation.
Executed this 23rd day of May, 1997.
/s/ Dennis D. Oklak
------------------------------
Dennis D. Oklak, Vice President and Treasurer
</TABLE>
ARTICLES OF AMENDMENT
OF THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
DUKE REALTY INVESTMENTS, INC.
The undersigned officer of DUKE REALTY INVESTMENTS, INC. (the
"Corporation"), existing pursuant to the provisions of INDIANA
BUSINESS CORPORATION LAW (IND. CODE 23-1 ET SEQ.), AS AMENDED
(the "Act") and desiring to give notice of corporate action
effectuating amendment of certain provisions of its Amended and
Restated Articles of Incorporation certify the following facts:
ARTICLE I - AMENDMENT
SECTION 1: The date of incorporation of the Corporation is:
MARCH 12, 1992
SECTION 2: The name of the Corporation following this amendment of
its Amended and Restated Articles of Incorporation is:
DUKE REALTY INVESTMENTS, INC.
SECTION 3: The exact text to Article VI of the Amended and Restated
Articles of Incorporation is amended to add Section 6.05 as
follows:
SEE ATTACHED EXHIBIT A
---------
This Amendment is to be effective at 12:01 a.m. on July 11, 1997.
ARTICLE II-MANNER OF ADOPTION AND VOTE
SECTION 1: Action by Directors:
The Board of Directors of the Corporation duly adopted resolutions
amending Article VI of the Amended and Restated Articles of
Incorporation. These resolutions were adopted at meetings duly held
on April 25, 1996, January 9, 1997 and July 7, 1997 at which
quorums were present.
SECTION 2: Action by Shareholders:
Pursuant to I.C. 23-1-25-2(d), the Shareholders of the Corporation
were not required to vote with respect to this amendment to the
Amended and Restated Articles of Incorporation.
SECTION 3: Compliance with legal requirements:
The manner of the adoption of the Articles of Amendment and the
vote by which they were adopted constitute full legal compliance
with the provisions of the Act, the Amended and Restated Articles
of Incorporation, and the Code of By-Laws of the Corporation.
I hereby verify, subject to penalties for perjury, that the facts
contained herein are true this 10th day of July, 1997.
/s/ Dennis D. Oklak
---------------------------------
Dennis D. Oklak, Vice President and
Treasurer
Exhibit A
6.05. Series B Preferred Stock. Pursuant to authority granted
under Section 6.01 of the Corporation's Amended and Restated
Articles of Incorporation (the "Articles of Incorporation"), the
Board of Directors of the Corporation hereby establishes a series
of preferred shares designated the 7.99% Series B Cumulative Step-
Up Premium Rate Preferred Shares ($0.01 Par Value Per Share)
(Liquidation Preference $500.00 Per Share) (the "Series B
Preferred Shares") on the following terms:
(a) Number. The number of authorized shares of the Series B
Preferred Shares shall be 300,000.
(b) Relative Seniority. In respect of rights to receive dividends
and to participate in distributions or payments in the event of
any liquidation, dissolution or winding up of the Corporation, the
Series B Preferred Shares shall rank senior to the Common Shares
and any other class or series of shares of the Corporation
ranking, as to dividends and upon liquidation, junior to the
Series B Preferred Shares (collectively, "Junior Shares").
(c) Dividends.
(1) The holders of the then outstanding Series B Preferred
Shares shall be entitled to receive, when and as declared by the
Board of Directors out of any funds legally available therefore,
cumulative dividends at an initial rate of $39.95 per share per
year, payable in equal amounts of $9.9875 per share quarterly in
cash on the last day of each March, June, September and December
or, if not a Business Day (as hereinafter defined), the next
succeeding Business Day beginning on September 30, 1997 (each such
day being hereinafter called a "Quarterly Dividend Date" and each
period ending on a Quarterly Dividend Date being hereinafter
called a "Dividend Period"); provided, however, that beginning
with each Quarterly Dividend Date after October 1, 2012, the rate
shall increase to $49.95 per Series B Preferred Share per year,
payable in equal amounts of $12.4875 on each Quarterly
Distribution Date. Dividends shall be payable to holders of record
as they appear in the share records of the Corporation at the
close of business on the applicable record date (the "Record
Date"), which shall be the first day of the calendar month in
which the applicable Quarterly Dividend Date falls on or such
other date designated by the Board of Directors of the Corporation
for the payment of dividends that is not more than 30 nor less
than 10 days prior to such Quarterly Dividend Date. The amount of
any dividend payable for any Dividend Period shorter than a full
Dividend Period shall be prorated and computed on the basis of a
360-day year of twelve 30-day months. Dividends on each share of
Series B Preferred Shares shall accrue and be cumulative from and
including the date of original issue thereof, whether or not (i)
dividends on such shares are earned or declared or (ii) on any
Quarterly Dividend Date there shall be funds legally available for
the payment of dividends. Dividends paid on the Series B Preferred
Shares in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated
pro rata on a per share basis among all such shares at the time
outstanding.
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law,
regulation or executive order to close.
(2) The amount of any dividends accrued on any Series B
Preferred Shares at any Quarterly Dividend Date shall be the
amount of any unpaid dividends accumulated thereon, to and
including such Quarterly Dividend Date, whether or not earned or
declared, and the amount of dividends accrued on any shares of
Series B Preferred Shares at any date other than a Quarterly
Dividend Date shall be equal to the sum of the amount of any
unpaid dividends accumulated thereon, to and including the last
preceding Quarterly Dividend Date, whether or not earned or
declared, plus an amount calculated on the basis of the annual
dividend rate of $39.95 per share with respect to a Quarterly
Dividend Date on or before October 1, 2012 and $49.95 per share
with respect to a Quarterly Dividend Date after October 1, 2012,
and in either case, for the period after such last preceding
Quarterly Dividend Date to and including the date as of which the
calculation is made based on a 360-day year of twelve 30-day
months.
(3) Except as provided in this Section 6.06, the Series B
Preferred Shares shall not be entitled to participate in the
earnings or assets of the Corporation.
(4) Any dividend payment made on the Series B Preferred
Shares shall be first credited against the earliest accrued but
unpaid dividend due with respect to such shares which remains
payable.
(5) If, for any taxable year, the Company elects to
designate as "capital gain dividends" (as defined in Section 857
of the Code), any portion (the "Capital Gains Amount") of the
dividends paid or made available for the year to holders of all
classes of Shares (the "Total Dividends"), then the portion of the
Capital Gains Amount that shall be allocated to the holders of the
Series B Preferred Shares shall be the amount that the total
dividends paid or made available to the holders of the Series B
Preferred Shares for the year bears to the Total Dividends.
(d) Liquidation Rights.
(1) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, the holders of the
Series B Preferred Shares then outstanding shall be entitled to
receive and to be paid out of the assets of the Corporation
available for distribution to its shareholders, before any payment
or distribution shall be made on any Junior Shares, the amount of
$500.00 per share, plus accrued and unpaid dividends thereon.
(2) After the payment to the holders of the Series B
Preferred Shares of the full preferential amounts provided for in
this Section 6.06, the holders of the Series B Preferred Shares,
as such, shall have no right or claim to any of the remaining
assets of the Corporation.
(3) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the amounts payable
with respect to the preference value of the Series B Preferred
Shares and any other shares of the Corporation ranking as to any
such distribution on a parity with the Series B Preferred Shares
are not paid in full, the holders of the Series B Preferred Shares
and of such other shares will share ratably in any such
distribution of assets of the Corporation in proportion to the
full respective preference amounts to which they are entitled.
(4) Neither the sale of all or substantially all of the
property or business of the Corporation, nor the merger or
consolidation of the Corporation into or with any other entity or
the merger or consolidation of any other entity into or with the
Corporation, shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for the purposes of this
Section 6.06.
(e) Redemption.
(1) Optional Redemption. On and after September 30, 2007,
the Corporation may, at its option, redeem at any time all or,
from time to time, part of the Series B Preferred Shares at a
price per share (the "Series B Redemption Price"), payable in
cash, of $500.00, together with all accrued and unpaid dividends
to and including the date fixed for redemption (the "Series B
Redemption Date").
(2) Procedures of Redemption.
(i) Notice of any redemption will be mailed by the
Corporation, postage prepaid, not less than 30 nor more than
60 days prior to the Series B Redemption Date, addressed to
each holder of record of the Series B Preferred Shares to be
redeemed at the address set forth in the share transfer
records of the Corporation. No failure to give such notice or
any defect therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any Series
B Preferred Shares except as to the holder to whom the
Corporation has failed to give notice or except as to the
holder to whom notice was defective. In addition to any
information required by law or by the applicable rules of any
exchange upon which Series B Preferred Shares (or depositary
shares or receipts representing fractional interests in
Series B Preferred Shares) may be listed or admitted to
trading, such notice shall state: (a) the Series B Redemption
Date; (b) the Series B Redemption Price; (c) the number of
Series B Preferred Shares to be redeemed; (d) the place or
places where certificates for such shares are to be
surrendered for payment of the Series B Redemption Price; and
(e) that dividends on the shares to be redeemed will cease to
accumulate on the Series B Redemption Date.
(ii) If notice has been mailed in accordance with
subparagraph (e)(2)(i) above and provided that on or before
the Series B Redemption Date specified in such notice all
funds necessary for such redemption shall have been
irrevocably set aside by the Corporation, separate and apart
from its other funds in trust for the pro rata benefit of the
holders of the Series B Preferred Shares so called for
redemption, so as to be, and to continue to be available
therefor, then, from and after the Series B Redemption Date,
dividends on the Series B Preferred Shares so called for
redemption shall cease to accumulate, and said shares shall
no longer be deemed to be outstanding and shall not have the
status of Series B Preferred Shares and all rights of the
holders thereof as shareholders of the Corporation (except
the right to receive the Series B Redemption Price) shall
cease. Upon surrender, in accordance with such notice, of
the certificates for any Series B Preferred Shares so
redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice shall so state),
such Series B Preferred Shares shall be redeemed by the
Corporation at the Series B Redemption Price. In case fewer
than all the Series B Preferred Shares represented by any
such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed
Series B Preferred Shares without cost to the holder thereof.
(iii) Any funds deposited with a bank or trust company
for the purpose of redeeming Series B Preferred Shares shall
be irrevocable except that:
(A) the Corporation shall be entitled to receive
from such bank or trust company the interest or other
earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall have
no claim to such interest or other earnings; and
(B) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the Series B
Preferred Shares entitled thereto at the expiration of
two years from the applicable Series B Redemption Date
shall be repaid, together with any interest or other
earnings earned thereon, to the Corporation, and after
any such repayment, the holders of the shares entitled
to the funds so repaid to the Corporation shall look
only to the Corporation for payment without interest or
other earnings.
(iv) No Series B Preferred Shares may be redeemed except
from proceeds from the sale of other capital stock of the
Company, including but not limited to common stock, preferred
stock, depositary shares, interests, participations or other
ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable
for equity securities) or options to purchase any of the
foregoing.
(v) Unless full accumulated dividends on all Series B
Preferred Shares shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past Dividend
Periods and the then current Dividend Period, no Series B
Preferred Shares shall be redeemed or purchased or otherwise
acquired directly or indirectly (except by conversion into or
exchange for Junior Shares); provided, however, that the
foregoing shall not prevent the redemption of Series B
Preferred Shares pursuant to this Section 6.06 or the
purchase or acquisition of Series B Preferred Shares pursuant
to a purchase or exchange offer made on the same terms to
holders of all outstanding shares of Series B Preferred A
Shares.
(vi) If the Series B Redemption Date is after a Record
Date and before the related Quarterly Dividend Date, the
dividend payable on such Quarterly Dividend Date shall be
paid to the holder in whose name the Series A Preferred
Shares to be redeemed are registered at the close of business
on such Record Date notwithstanding the redemption thereof
between such Record Date and the related Quarterly Dividend
Date or the Corporation's default in the payment of the
dividend due.
(vii) In case of redemption of less than all Series B Preferred
Shares at the time outstanding, the Series B Preferred Shares to
be redeemed shall be prorata from the holders of record of such
shares in proportion to the number of Series B Preferred Shares
held by such holders (with adjustments to avoid redemption of
fractional shares) or by any other equitable method determined by
the Corporation.
(f) Voting Rights. Except as required by law, and as set forth
below, the holders of the Series B Preferred Shares shall not be
entitled to vote at any meeting of the shareholders for election
of Directors or for any other purpose or otherwise to participate
in any action taken by the Corporation or the shareholders
thereof, or to receive notice of any meeting of shareholders.
(1) Whenever dividends on any Series B Preferred Shares
shall be in arrears for six or more quarterly periods, whether or
not such quarterly periods are consecutive, the holders of such
Series B Preferred Shares (voting separately as a class with all
other series of preferred shares upon which like voting rights
have been conferred and are exercisable) will be entitled to vote
for the election of two additional Directors of the Corporation at
a special meeting called by the holders of Record of at least ten
percent (10%) of any series of preferred shares so in arrears
(unless such request is received less than 90 days before the date
fixed of for the next annual or special meeting of the
shareholders) or at the next annual meeting of shareholders, and
at each subsequent annual meeting until all dividends accumulated
on such Series B Preferred Shares for the past dividend periods
and the then current dividend period shall have been fully paid or
declared and a sum sufficient for the payment thereof set aside
for payment. In such case, the entire Board of Directors of the
Corporation will be increased by two Directors.
(2) So long as any Series B Preferred Shares remain
outstanding, the Corporation will not, without the affirmative
vote or consent of the holders of at least two-thirds of the
Series B Preferred Shares outstanding at the time, given in person
or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of
beneficial interest ranking prior to the Series B Preferred Shares
with respect to the payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up or reclassify
any authorized shares of the Corporation into such shares, or
create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares; or (ii)
amend, alter or repeal the provisions of the Corporation's
Articles of Incorporation, whether by merger, consolidation or
otherwise (an "Event"), so as to materially and adversely affect
any right, preference, privilege or voting power of the Series B
Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii)
above, so long as the Series B Preferred Shares remain outstanding
with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event, the Corporation may not be
the surviving entity, the occurrence of any such Event shall not
be deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of Series B
Preferred Shares and provided further that (x) any increase in the
amount of the authorized Preferred Shares or the creation or
issuance of any other Series B Preferred Shares, or (u) any
increase in the amount of authorized Series B Preferred Shares or
any other preferred shares, in each case ranking on a parity with
or junior to the Series B Preferred Shares with respect to payment
of dividends or the distribution of assets upon liquidation,
dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or
prior to the time when the act with respect to which such vote
would otherwise be required shall be effected, all outstanding
Series B Preferred Shares shall have been redeemed or called for
redemption and sufficient funds shall have been deposited in trust
to effect such redemption.
(3) On each matter submitted to a vote of the holders of
Series B Preferred Shares in accordance with this Section 6.06, or
as otherwise required by law, each Series B Preferred Share shall
be entitled to ten (10) votes, each of which ten (10) votes may be
directed separately by the holder thereof. With respect to each
Series B Preferred Share, the holder thereof may designate up to
ten (10) proxies, with each such proxy having the right to vote a
whole number of votes (totaling ten (10) votes per Series B
Preferred Share).
(g) Conversion. The Series B Preferred Shares are not
convertible into or exchangeable for any other property or
securities of the Corporation.
DUKE REALTY INVESTMENTS, INC.
AMENDMENT OF AMENDED AND RESTATED BY-LAWS
RESOLVED, That Section 5.08 of the Amended and Restated
By-Laws of Duke Realty Investments, Inc. is amended to read
as follows:
Section 5.08. Number of Directors and Classification
-----------------------------------------------------
of Board of Directors. (a) The number of Directors shall be
twelve (12). (b) There shall be three (3) classes of
Directors, each class to be as nearly equal in number
as possible. The Directors of one class have been
elected for a term expiring in 1998; the Directors of a
second class have been elected for a term expiring in
1999; and the Directors of a third class have been
elected for a term expiring in 2000. At each annual
meeting of the shareholders, one (1) class of Directors
shall be elected for a term of three (3) years, or
until their successors have been duly elected and
qualified, to replace those Directors whose terms
expire at such annual meeting.
FOURTH AMENDMENT TO
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
DUKE REALTY LIMITED PARTNERSHIP
-----------------------------------
The undersigned, as the General Partner of Duke Realty
Limited Partnership (the "Partnership"), hereby amends the
Partnership's Amended and Restated Agreement of Limited
Partnership, as heretofore amended (the "Partnership
Agreement"), pursuant to Sections 4.02(b) and 9.05(a)(v) of
the Partnership Agreement, to add a new Section 4.14 to read
as provided in EXHIBIT A hereto. In all other respects, the
Partnership Agreement shall continue in full force and
effect as amended hereby. Any capitalized terms used in
this Amendment and not defined herein have the meanings
given to them in the Partnership Agreement.
Effective as of 12:01 a.m., July 11, 1997.
DUKE REALTY INVESTMENTS, INC.,
as General Partner
By: /s/ Dennis D. Oklak
-------------------------
Dennis D. Oklak
Vice President and Treasurer
Exhibit A
SECTION 4.14. SERIES B PREFERRED UNITS. Pursuant to
authority granted under Section 4.02(b) of this Agreement,
the General Partner hereby establishes a series of preferred
Units designated the 7.99% Series B Cumulative Step-Up
Premium Rate Preferred Units (Liquidation Preference $500.00
Per Unit) (the "Series B Preferred Units") on the following
terms:
(a) Number and Holder. The number of Series B Preferred Units
-----------------
shall not exceed 345,000 and shall at all times be equal to
the number of 7.99% Series B Cumulative Step-Up Premium Rate
Preferred Shares ("Series B Preferred Shares") issued by the
General Partner and then outstanding. Series B Preferred
Units shall be issued only to and held only by the General
Partner.
(b) Relative Seniority. In respect of rights to receive
------------------
Distributions of Distributable Cash pursuant to Section 4.03
and to participate in Distributions or payments in the event
of any liquidation or termination of the Partnership
pursuant to Section 4.04, the Series B Preferred Units shall
rank senior to the Units initially established under Section
2.03 and issued under Sections 4.01 and 4.02(a) ("Common
Units") and any other class or series of Units of the
Partnership ranking, as to Distributions and upon
liquidation, junior to the Series B Preferred Units
(collectively, "Junior Units"). In the event of
Distributions from a Terminating Capital Transaction
pursuant to Section 4.04, Distributions to the holder of
Series B Preferred Units will be made prior to Distributions
to holders of Junior Units or to other Partners in
accordance with Capital Account positive balances pursuant
to Section 4.04(d).
(c) Distributions.
-------------
(1) The General Partner, as holder of the then
outstanding Series B Preferred Units, shall be entitled
to receive, when and as declared by the General Partner
out of any funds legally available therefor, cumulative
Distributions at the initial rate of $39.95 per Series
B Preferred Unit per year, payable in equal amounts of
$9.9875 per Series B Preferred Unit quarterly in cash
on the last day of each March, June, September and
December or, if not a Business Day (as hereinafter
defined), the succeeding Business Day, beginning on
September 30, 1997 (each such day being hereinafter
called a "Quarterly Distribution Date" and each period
ending on a Quarterly Distribution Date being
hereinafter called a "Distribution Period"); provided,
however, that beginning with Quarterly Distribution
Dates after October 1, 2012, the rate shall increase to
$49.95 per Series B Preferred Unit per year, payable in
equal amounts of $12.4875 on each Quarterly
Distribution Date. Distributions shall be payable to
the General Partner as holder of the Series B Preferred
Units. The amount of any Distribution payable for any
Distribution Period shorter than a full Distribution
Period shall be prorated and computed on the basis of a
360-day year of twelve 30-day months. Distributions on
each share of Series B Preferred Units shall accrue and
be cumulative from and including the date of original
issue thereof, whether or not (i) Distributions on such
Units are earned or declared or (ii) on any Quarterly
Distribution Date there shall be funds legally
available for the payment of Distributions.
Distributions paid on the Series B Preferred Units in
an amount less than the total amount of such
Distributions at the time accrued and payable on such
Series B Preferred Units shall be allocated pro rata on
a per Unit basis among all such Series B Preferred
Units at the time outstanding.
"Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor
a day on which banking institutions in New York City
are authorized or required by law, regulation or
executive order to close.
(2) The amount of any Distributions accrued on
any Series B Preferred Units at any Quarterly
Distribution Date shall be the amount of any unpaid
Distributions accumulated thereon, to and including
such Quarterly Distribution Date, whether or not earned
or declared, and the amount of Distributions accrued on
any Series B Preferred Units at any date other than a
Quarterly Distribution Date shall be equal to the sum
of the amount of any unpaid Distributions accumulated
thereon, to and including the last preceding Quarterly
Distribution Date, whether or not earned or declared,
plus an amount calculated on the basis of the annual
Distribution rate of $39.95 per Series B Preferred Unit
with respect to a Quarterly Distribution Date on or
before October 1, 2012 and $49.95 per Series B
Preferred Unit with respect to a Quarterly Distribution
Date after October 1, 2012, and in either case, for the
period after such last preceding Quarterly Distribution
Date to and including the date as of which the
calculation is made based on a 360-day year of twelve
30-day months.
(3) Except as provided in this Section 4.14, the
Series B Preferred Units shall not be entitled to
participate in the earnings or assets of the
Partnership.
(4) Any Distribution payment made on the Series B
Preferred Units shall be first credited against the
earliest accrued but unpaid Distribution due with
respect to such Series B Preferred Units which remains
payable.
(5) All Distributions made on the Series B
Preferred Units shall result in a corresponding
reduction to the Capital Accounts of the holders of
such Series B Preferred Units.
(d) Liquidation Rights.
------------------
(1) Upon the voluntary or involuntary dissolution and
liquidation or winding up of the Partnership, the holders of
the Series B Preferred Units then outstanding shall be
entitled to receive and to be paid out of the assets of the
Partnership available for Distribution to its Partners,
before any payment or Distribution shall be made on any
Junior Units, the amount of $500.00 per Series B Preferred
Unit, plus accrued and unpaid Distributions thereon. Such
Distributions shall result in a corresponding reduction to
the Capital Accounts of the holders of such Series B
Preferred Units.
(2) After the payment to the holders of the
Series B Preferred Units of the full preferential
amounts provided for in this Section 4.14, the holders
of the Series B Preferred Units, as such, shall have no
right or claim to any of the remaining assets of the
Partnership.
(3) If, upon any voluntary or involuntary
dissolution and liquidation or winding up of the
Partnership, the amounts payable with respect to the
preference value of the Series B Preferred Units and
any other Units of the Partnership ranking as to any
such Distribution on a parity with the Series B
Preferred Units are not paid in full, the holders of
the Series B Preferred Units and of such other Units
will share ratably in any such Distribution of assets
of the Partnership in proportion to the full respective
preference amounts to which they are entitled.
(4) Neither the sale of all or substantially all
of the property or business of the Partnership, nor the
merger or consolidation of the Partnership into or with
any other entity or the merger or consolidation of any
other entity into or with the Partnership, shall be
deemed to be a voluntary or involuntary dissolution and
liquidation or winding up for the purposes of this
Section 4.14.
(e) Redemption.
----------
(1) Redemption. The General Partner shall cause the
----------
Partnership to redeem one Series B Preferred Unit for each
Series B Preferred Share redeemed by the General Partner, at
a price per Series B Preferred Unit (the "Series B
Redemption Price"), payable in cash, of $500.00, together
with all accrued and unpaid Distributions to and including
the date fixed for redemption of such Series B Preferred
Shares (the "Series B Redemption Date").
(2) Procedures of Redemption..
------------------------
(i) Provided that on or before the Series B
Redemption Date all funds necessary for the redemption
by the General Partner of the associated Series B
Preferred Shares shall have been irrevocably set aside
by the General Partner or the Partnership, separate and
apart from its other funds in trust for the pro rata
benefit of the General Partner as holder of the Series
B Preferred Units to be redeemed, so as to be, and to
continue to be available therefor, then, from and after
the Series B Redemption Date, Distributions on the
Series B Preferred Units to be redeemed shall cease to
accumulate, and said Series B Preferred Units shall no
longer be deemed to be outstanding and shall not have
the status of Series B Preferred Units and all rights
of the General Partner as the holder thereof (except
the right to receive the Series B Redemption Price)
shall cease. Upon surrender of the certificates for any
Series B Preferred Units so redeemed (properly endorsed
or assigned for transfer, if the Partnership shall so
require), such Series B Preferred Units shall be
redeemed by the Partnership at the Series B Redemption
Price. In case fewer than all the Series B Preferred
Units represented by any such certificate are redeemed,
a new certificate or certificates shall be issued
representing the unredeemed Series B Preferred Units
without cost to the General Partner as holder thereof.
(ii) Any funds deposited with a bank or trust
company for the purpose of redeeming Series B Preferred
Units shall be irrevocable except that:
(A) the Partnership or the General Partner,
as the case may be, as depositor of the funds
shall be entitled to receive from such bank or
trust company the interest or other earnings, if
any, earned on any money so deposited in trust,
and the General Partner as holder of any Series B
Preferred Units redeemed shall have no claim to
such interest or other earnings; and
(B) any balance of monies so deposited and
unclaimed by the General Partner as holder of the
Series B Preferred Units entitled thereto at the
expiration of two years from the applicable Series
B Redemption Date shall be repaid, together with
any interest or other earnings earned thereon, to
the Partnership, and after any such repayment, the
General Partner as holder of any Series B
Preferred Units entitled to the funds so repaid to
the Partnership shall look only to the Partnership
for payment without interest or other earnings.
(iii) Unless full accumulated Distributions on
all Series B Preferred Units shall have been or
contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for
payment for all past Distribution Periods and the then
current Distribution Period, no Series B Preferred
Units shall be redeemed or purchased or otherwise
acquired directly or indirectly (except by conversion
into or exchange for Junior Units); provided, however,
that the foregoing shall not prevent the redemption of
Series B Preferred Units pursuant to this Section 4.14
or the purchase or acquisition of Series B Preferred
Units pursuant to a purchase or exchange offer made to
the General Partner as the sole holder of all
outstanding Series B Preferred Units.
(iv) If the Series B Redemption Date is after a
record date for payment of dividends on the Series B
Preferred Shares and before the related Quarterly
Distribution Date, the Distribution payable on such
Quarterly Distribution Date shall be paid to the
General Partner notwithstanding the redemption of the
Series B Preferred Units between such record date and
the related Quarterly Distribution Date or the
Partnership's default in the payment of the
Distribution due.
(f) Voting Rights. Except as required by law, and as set forth
-------------
below, the holders of the Series B Preferred Units shall not
be entitled to vote at any meeting for any purpose or
otherwise to participate in any action taken by the
Partnership or the holders of Units, or to receive notice of
any meeting of holders of Units. Accordingly, any
calculation in connection with Special Partner Approval or
any matter requiring the approval of a specified number or
percentage of Units shall be made without regard to the
Series B Preferred Units.
(1) So long as any Series B Preferred Units
remain outstanding, the Partnership will not, without
the affirmative vote or consent of the General Partner
as holder of the Series B Preferred Units,
(i) authorize or create, or increase the authorized or
issued amount of, any class or series of Units ranking
prior to the Series B Preferred Units with respect to
the payment of Distributions or the Distribution of
assets upon liquidation or winding up or reclassify any
authorized Units of the Partnership into such Units,
or create, authorize or issue any obligation or
security convertible into or evidencing the right to
purchase any such Units; or (ii) amend, alter or repeal
the provisions of the Partnership's Amended and
Restated Agreement of Limited Partnership, as amended,
whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any
right, preference, privilege or voting power of the
Series B Preferred Units or the General Partner as
holder thereof; provided, however, with respect to the
occurrence of any of the Events set forth in (ii)
above, so long as the Series B Preferred Units remain
outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence
of an Event, the Partnership may not be the surviving
entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights,
preferences, privileges or voting power of the General
Partner as the holder of Series B Preferred Units and
provided further that (x) any increase in the amount of
the authorized Preferred Units or the creation or
issuance of any other Series B Preferred Units, or
(u) any increase in the amount of authorized Series B
Preferred Units or any other preferred Units, in each
case ranking on a parity with or junior to the Series B
Preferred Units with respect to payment of
Distributions or the distribution of assets upon
liquidation or winding up, shall not be deemed to
materially and adversely affect such rights,
preferences, privileges or voting powers.
(2) The foregoing voting provisions will not
apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required
shall be effected, all outstanding Series B Preferred
Units shall have been redeemed or called for redemption
and sufficient funds shall have been deposited in trust
to effect such redemption.
(g) Conversion. The Series B Preferred Units are not
----------
convertible into or exchangeable for any other property or
securities of the Partnership.
(h) Allocation of Profits and Losses.
--------------------------------
(1) Notwithstanding the allocation provisions in
Section 4.05, for each fiscal year of the Partnership,
Profits shall first be allocated to the holders of
Series B Preferred Units in an amount equal to the
amount of Distributions to which the holders of such
units are entitled pursuant to Section 4.14(c). To the
extent insufficient Profits exist for such purposes in
a fiscal year, Profits in the next succeeding fiscal
year shall first be allocated to holders of Series B
Preferred Units to eliminate such deficiency until such
holders have been allocated cumulative Profits equal to
one hundred percent (100%) of the Distributions both
current and cumulative to which such holders are
entitled.
(2) Notwithstanding the allocation provisions
contained in Section 4.05, in the event of a
Terminating Capital Transaction in which the
Partnership is liquidated, Losses shall be allocated to
the holders of Series B Preferred Units if, and only
if, after the reduction of all other Partners' Capital
Accounts to zero, remaining Losses exist, but only to
the extent of the positive balances in the Capital
Accounts of such holders.
(3) Subject to the provisions of Section 4.08,
the holders of Series B Preferred Units shall be
allocated their pro rata share of each item of Profit
and Loss of the Partnership based upon the percentage
of all Profits and Losses of the Partnership allocated
to such holders.
(4) All determinations of Percentage Shares shall
be made without regard to Series B Preferred Units.
EXHIBIT 21
SUBSIDIARIES OF DUKE REALTY INVESTMENTS, INC.
State of Names Under Which
Incorporation Subsidiary Does
Subsidiary or Organization Business
-------------------------------- --------------- ------------------------
Duke Realty Limited Partnership Indiana Duke Realty Limited
Partnership
Duke Services, Inc. Indiana Duke Services, Inc.
Duke Realty Services Limited Indiana Duke Realty Services
Partnership Limited Partnership
Duke Realty Construction, Inc. Indiana Duke Realty
Construction, Inc.
Duke Construction Limited Indiana Duke Construction
Partnership Limited Partnership
B/D Limited Partnership Indiana B/D Limited Partnership
Lamida Partners Limited Ohio Lamida Partners Limited
Partnership Partnership
Kenwood Office Associates Ohio Kenwood Office
Associates
Park Creek Venture Indiana Park Creek Venture
Parkrite Limited Partnership Indiana Parkrite Limited
Partnership
Post Road Limited Partnership Indiana Post Road Limited
Partnership
Shadeland Station Office Indiana Shadeland Station Office
Associates II Limited Partnership Associates II Limited
Partnership
Dugan Realty L.L.C. Indiana Dugan Realty L.L.C.
Duke/Tees Joint Venture Indiana Duke/Tees J.V.
Park Fletcher Limited Indiana Park Fletcher Limited
Partnership 2728 Partnership 2728
Cincinnati Development Ohio Cincinnati Development
Group L.L.C. Group L.L.C.
Dugan/Office, L.L.C. Indiana Dugan/Office, L.L.C.
625 Building, L.L.C. Missouri 625 Building, L.L.C.
The Board of Directors
DUKE REALTY INVESTMENTS, INC.:
We consent to incorporation by reference in the registration
statements No. 33-64567, No. 33-64659, No. 333-26845, No. 333-
24289, No. 333-26833, and No. 333-04695 on Form S-3 and No. 33-
55727, No. 333-39965 and No. 333-42513 on Form S-8 of Duke Realty
Investments, Inc. of our report dated January 28, 1998, relating
to the consolidated balance sheets of Duke Realty Investments,
Inc. and Subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of operations, shareholders'
equity, and cash flows for each of the years in the three-year
period ended December 31, 1997, and the related schedule, which
report appears in the December 31, 1997, annual report on Form 10-
K of Duke Realty Investments, Inc.
KPMG Peat Marwick LLP
Indianapolis, Indiana
March 17, 1998
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Edward T. Baur
-------------------
Edward T. Baur
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Geoffrey Button
--------------------
Geoffrey Button
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Ngaire E.Cuneo
-------------------
Ngaire E. Cuneo
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Howard L. Feinsand
----------------------
Howard L. Feinsand
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ L. Ben Lytel
----------------------
L. Ben Lytle
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ John D. Peterson
-----------------------------
John D. Peterson
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ James E. Rogers
-------------------
James E. Rogers
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Lee Stanfield
-----------------
Lee Stanfield
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Daniel C. Staton
---------------------
Daniel C. Staton
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Jay J. Strauss
---------------------
Jay J. Strauss
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr., John R. Gaskin and
Dennis D. Oklak, and each of them, his attorneys-in-fact and
agents, with full power of substitution and resubstitution
for him in any and all capacities, to sign the annual report
on Form 10-K of Duke Realty Investments, Inc. for the year
ended December 31, 1997, and any amendment thereof, and to
file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ John W. Wynne
-----------------
John W. Wynne
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Darell E. Zink, Jr., John R. Gaskin and Dennis D. Oklak, and
each of them, his attorneys-in-fact and agents, with full
power of substitution and resubstitution for him in any and
all capacities, to sign the annual report on Form 10-K of
Duke Realty Investments, Inc. for the year ended
December 31, 1997, and any amendment thereof, and to file
the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Thomas L. Hefner
-----------------------
Thomas L. Hefner
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, John R. Gaskin and Dennis D. Oklak, and
each of them, his attorneys-in-fact and agents, with full
power of substitution and resubstitution for him in any and
all capacities, to sign the annual report on Form 10-K of
Duke Realty Investments, Inc. for the year ended
December 31, 1997, and any amendment thereof, and to file
the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Darell E. Zink, Jr.
-----------------------
Darell E. Zink, Jr.
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby constitutes and appoints
Thomas L. Hefner, Darell E. Zink, Jr. and John R. Gaskin,
and each of them, his attorneys-in-fact and agents, with
full power of substitution and resubstitution for him in any
and all capacities, to sign the annual report on Form 10-K
of Duke Realty Investments, Inc. for the year ended
December 31, 1997, and any amendment thereof, and to file
the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto each of such attorneys-in-fact and
agents full power and authority to do and perform each and
every act and thing requisite and necessary in connection
with such matters and hereby ratifying and confirming all
that each of such attorneys-in-fact and agents or his
substitute or substitutes may do or cause to be done by
virtue hereof.
Dated: January 28, 1998
/s/ Dennis D. Oklak
-------------------
Dennis D. Oklak
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DUKE
REALTY INVESTMENTS, INC. AND SUBSIDIARIES' DECEMBER 31, 1997 CONSOLIDATED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 10,353
<SECURITIES> 0
<RECEIVABLES> 44,639
<ALLOWANCES> (1,261)
<INVENTORY> 0
<CURRENT-ASSETS> 54,250
<PP&E> 2,176,727
<DEPRECIATION> (116,264)
<TOTAL-ASSETS> 2,176,214
<CURRENT-LIABILITIES> 114,050
<BONDS> 720,119
0
218,338
<COMMON> 1,016,343
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,176,214
<SALES> 0
<TOTAL-REVENUES> 256,029
<CGS> 128,504
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,230
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,296
<INCOME-PRETAX> 65,999
<INCOME-TAX> 0
<INCOME-CONTINUING> 65,699
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,999
<EPS-PRIMARY> $.99
<EPS-DILUTED> $.98
</TABLE>
Exhibit 99.1
SELECTED QUARTERLY FINANCIAL INFORMATION
(Unaudited)
Selected quarterly information for the years ended December 31, 1997 and
1996 is as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------------------------
1997 December 31 September 30 June 30 March 31
- ----------------------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C>
Revenues from Rental
Operations $ 70,980 $ 56,218 $ 51,586 $ 50,918
Revenues from Service
Operations $ 7,393 $ 5,917 $ 5,129 $ 3,939
Net income available for
common shares $ 19,406 $ 16,911 $ 14,696 $ 14,986
Basic income per common
share (2) $ 0.26 $ 0.26 $ 0.23 $ 0.24
Diluted income per
common share (2) $ 0.25 $ 0.26 $ 0.23 $ 0.24
Weighted average common
shares (2) 75,466 65,309 63,168 61,624
Weighted average common
and dilutive potential
common shares (2) 86,649 72,971 70,576 69,579
Funds From Operations
(1) $ 33,126 $ 26,007 $ 24,406 $ 23,717
Cash flow provided
by (used by):
Operating activities $ 49,057 $ 38,676 $ 42,489 $ 28,973
Investing activities (216,788) (205,129) (134,244) (41,163)
Financing activities 3,952 337,478 81,865 19,853
1996
- ------------------------
Revenues from Rental
Operations $ 46,451 $ 41,448 $ 37,724 $ 36,537
Revenues from Service
Operations $ 5,404 $ 5,042 $ 5,137 $ 4,346
Net income available
for common shares $ 15,447 $ 13,478 $ 12,299 $ 9,648
Basic income per common
share (2) $ 0.26 $ 0.23 $ 0.21 $ 0.20
Diluted income per
common share (2) $ 0. 26 $ 0.23 $ 0.21 $ 0.20
Weighted average common
shares (2) 58,910 58,714 58,288 48,568
Weighted average common
and dilutive potential
common shares (2) 66,885 66,503 66,370 57,778
Funds From Operations
(1) $ 20,966 $ 20,202 $ 19,088 $ 15,823
Cash flow provided by
(used by):
Operating activities $ 26,032 $ 29,987 $ 24,647 $ 14,469
Investing activities (74,241) (108,909) (13,733) (79,865)
Financing activities 41,620 90,559 (22,718) 71,759
</TABLE>
(1) Funds From Operations is defined by the National Association of Real
Estate Investment Trusts as net income or loss excluding gains or
losses from debt restructuring and sales of property plus
depreciation and amortization, and after adjustments for minority
interest, unconsolidated partnerships and joint ventures (adjustments
for minority interest, unconsolidated partnerships and joint ventures
are calculated to reflect Funds From Operations on same basis).
Funds From Operations does not represent cash flow from operations as
defined by generally accepted accounting principles, should not be
considered as an alternative to net income as an indicator of the
Company's operating performance, and is not indicative of cash
available to fund all cash flow needs.
(2) Amounts adjusted to reflect the Company's two-for-one stock split
effected in August 1997.
