SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): June 20, 1997
CarrAmerica Realty Corporation
(formerly Carr Realty Corporation)
(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 624-7500
<PAGE>
FORM 8-K
ITEM 1. Changes in Control of Registrant
Not applicable
ITEM 2. Acquisition or Disposition of Assets.
Not applicable.
ITEM 3. Bankruptcy or Receivership.
Not applicable.
ITEM 4. Changes in Registrant's Certifying Accountant.
Not applicable.
ITEM 5. Other Events.
Attached hereto as Exhibit 99.1 are Historical Summaries of Operating
Revenue and Expenses for the three months ended March 31, 1997 (unaudited) and
the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report for each of the following properties: Tollhill East & West, 150
River Oaks, Signature Plaza, Canyon Park, CM Capital, Embassy Row, Draper Park
North and Sorenson Research Plaza. Also attached as Exhibit 99.1 is the
Historical Summary of Operating Revenue and Expenses for the year ended December
31, 1996 with accompanying notes and Independent Auditors' Report for Quorum
Place. In accordance with Rule 3-14 of Regulation S-X, financial statements with
respect to the listed properties are being filed because the Company has either
(a) already acquired the properties and the book value of the properties
individually by project or in the aggregate, are significant, or (b) deemed the
acquisition to be probable and the book value of the properties, individually or
in the aggregate, are significant.
ITEM 6. Resignations of Registrant's Directors.
Not applicable.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements.
Attached hereto as Exhibit 99.1 are the following financial
statements:
(i) Historical Summaries of Operating Revenue and Expenses
for Tollhill East & West for the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report;
(ii) Historical Summaries of Operating Revenue and Expenses
for 150 River Oaks for the three months ended March 31, 1997 (unaudited) and the
year ended December 31, 1996 with accompanying notes and Independent Auditors'
Report;
(iii) Historical Summaries of Operating Revenue and Expenses
for Signature Plaza for the three months ended March 31, 1997 (unaudited) and
the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report;
<PAGE>
(iv) Historical Summaries of Operating Revenue and Expenses
for Canyon Park for the three months ended March 31, 1997 (unaudited) and the
year ended December 31, 1996 with accompanying notes and Independent Auditors'
Report;
(v) Historical Summaries of Operating Revenue and Expenses
for CM Capital for the three months ended March 31, 1997 (unaudited) and the
year ended December 31, 1996 with accompanying notes and Independent Auditors'
Report;
(vi) Historical Summaries of Operating Revenue and Expenses
for Embassy Row for the three months ended March 31, 1997 (unaudited) and the
year ended December 31, 1996 with accompanying notes and Independent Auditors'
Report;
(vii) Historical Summaries of Operating Revenue and Expenses
for Draper Park North for the three months ended March 31, 1997 (unaudited) and
the year ended December 31, 1996 with accompanying notes and Independent
Auditors' Report;
(viii) Historical Summaries of Operating Revenue and Expenses
for Sorenson Research Plaza for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with accompanying notes and
Independent Auditors' Report; and
(ix) Historical Summary of Operating Revenue and Expenses for
Quorum Place for the year ended December 31, 1996 with accompanying notes and
Independent Auditors' Report.
(b) Pro Forma Financial Information .
None.
(c) Exhibits
Exhibit
Number
99.1 Financial Statements
(i) Historical Summaries of Operating
Revenue and Expenses for Tollhill East &
West for the three months ended March 31,
1997 (unaudited) and the year ended
December 31, 1996 with accompanying notes
and Independent Auditors' Report.
(ii) Historical Summaries of Operating
Revenue and Expenses for 150 River Oaks for
the three months ended March 31, 1997
(unaudited) and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(iii) Historical Summaries of Operating
Revenue and Expenses for Signature Plaza
for the three months ended March 31, 1997
(unaudited) and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(iv) Historical Summaries of Operating
Revenue and Expenses for Canyon Park for
the three months ended March 31, 1997
(unaudited) and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(v) Historical Summaries of Operating
Revenue and Expenses for CM Capital for the
three months ended March 31, 1997
(unaudited)
<PAGE>
and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(vi) Historical Summaries of Operating
Revenue and Expenses for Embassy Row for
the three months ended March 31, 1997
(unaudited) and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(vii) Historical Summaries of Operating
Revenue and Expenses for Draper Park North
for the three months ended March 31, 1997
(unaudited) and the year ended December 31,
1996 with accompanying notes and
Independent Auditors' Report.
(viii) Historical Summaries of Operating
Revenue and Expenses for Sorenson Research
Plaza for the three months ended March 31,
1997 (unaudited) and the year ended
December 31, 1996 with accompanying notes
and Independent Auditors' Report.
(ix) Historical Summary of Operating
Revenue and Expenses for Quorum Place for
the year ended December 31, 1996 with
accompanying notes and Independent
Auditors' Report.
ITEM 8. Change in Fiscal Year.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
Date: June 20, 1997
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
-----------------------------
Brian K. Fields
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number
99.1 Financial Statements
(i) Historical Summaries of Operating Revenue and Expenses
for Tollhill East & West for the three months ended March 31,
1997 (unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(ii) Historical Summaries of Operating Revenue and Expenses
for 150 River Oaks for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(iii) Historical Summaries of Operating Revenue and Expenses
for Signature Plaza for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(iv) Historical Summaries of Operating Revenue and Expenses
for Canyon Park for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(v) Historical Summaries of Operating Revenue and Expenses
for CM Capital for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(vi) Historical Summaries of Operating Revenue and Expenses
for Embassy Row for the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(vii) Historical Summaries of Operating Revenue and Expenses
for Draper Park North for the three months ended March 31,
1997 (unaudited) and the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
(viii) Historical Summaries of Operating Revenue and Expenses
for Sorenson Research Plaza for the three months ended March
31, 1997 (unaudited) and the year ended December 31, 1996
with accompanying notes and Independent Auditors' Report.
(ix) Historical Summary of Operating Revenue and Expenses for
Quorum Place for the year ended December 31, 1996 with
accompanying notes and Independent Auditors' Report.
TOLLHILL EAST AND WEST
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Tollhill East and West for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Tollhill East and West. Our responsibility is to express an
opinion on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of
Tollhill East and West.
In our opinion, the historical summary referred to above presents fairly, in
all material respects, the operating revenue and expenses described in note
2(a) of Tollhill East and West for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
May 16, 1997
<PAGE>
TOLLHILL EAST AND WEST
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited) and the year ended
December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 768 2,464
Recovery of operating expenses 18 35
Other income 8 37
----- -----
Total operating revenue 794 2,536
----- -----
Operating expenses:
Maintenance 89 238
Utilities 114 470
Real estate taxes 70 278
Insurance 8 32
Management fees 38 125
General operating 22 87
Administrative 53 210
----- -----
Total operating expenses 394 1,440
----- -----
Operating revenue in excess of
operating expenses $ 400 1,096
===== =====
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
TOLLHILL EAST AND WEST
Notes to Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Tollhill East and West consists of two buildings located in Suburban
Dallas, Texas, containing approximately 238,000 square feet of office
space available for lease. At March 31, 1997, Tollhill East and West was
90% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the proposed future operations of the
property, have been excluded. Interest income has been excluded
from revenue, and interest, depreciation and amortization, and
other costs not directly related to the future operations of
Tollhill East and West have been excluded from expenses.
Management is not aware of any other material factors that would
cause the historical summaries of operating revenue and expenses
to not be indicative of the future operating results of the
buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the three months ended March
31, 1996, have been included. The results of operations for the
three-month period ended March 31, 1996 are not necessarily
indicative of the results for the full year.
(Continued)
<PAGE>
TOLLHILL EAST AND WEST
Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Tollhill East and West for the 12
months ended March 31, 1997, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the buildings
is computed on the modified accelerated cost recovery system method over
a 39-year life. This statement does not purport to forecast actual
operating results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,151
Less estimated depreciation and amortization expense 499
-------
Pro forma taxable operating income $ 652
=======
Pro forma cash available from operations $ 954
=======
<PAGE>
150 RIVER OAKS
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of 150 River Oaks for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of 150 River Oaks. Our responsibility is to express an opinion on
the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of 150
River Oaks.
In our opinion, the historical summary referred to above presents fairly, in
all material respects, the operating revenue and expenses described in note
2(a) of 150 River Oaks for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
San Francisco, CA
June 2, 1997
<PAGE>
150 RIVER OAKS
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 376 250
Recovery of operating expenses 47 67
------- -------
Total operating revenue 423 317
------- -------
Operating expenses:
Maintenance 25 9
Utilities 1 1
Real estate taxes 26 50
Insurance 7 41
Management fees 4 4
General and administrative 1 1
------- -------
Total operating expenses 64 106
------- -------
Operating revenue in excess of
operating expenses $ 359 211
======= =======
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
150 RIVER OAKS
Notes to the Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
150 River Oaks (the Property) is located in San Jose, California and
contains approximately 100,000 square feet of office space available
for lease. The Property was constructed in 1984. At March 31, 1997, the
Property was 100% leased to one tenant.
The Property was renovated during 1996 for the present tenant whose
lease began on November 1, 1996. This statement includes the operations
of the property while it was in service and various other operational
costs incurred throughout the year.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the future operations of the property, have
been excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of 150 River Oaks have
been excluded from expenses. Management is not aware of any other
material factors that would cause the historical summaries of
operating revenue and expenses to not be indicative of the future
operating results of the building.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the three months ended March
31, 1997 have been included. The results of operations for the
three-month period ended March 31, 1997 are not necessarily
indicative of the results for the full year.
<PAGE>
2
150 RIVER OAKS
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of 150 River Oaks for the 12 months ended
March 31, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the building is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 493
Less estimated depreciation and amortization expense (225)
------
Pro forma taxable operating income $ 268
======
Pro forma cash available from operations $ 493
======
<PAGE>
SIGNATURE PLAZA
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Signature Plaza for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Signature Plaza. Our responsibility is to express an opinion on
the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of
Signature Plaza.
In our opinion, the historical summary referred to above presents fairly, in
all material respects, the operating revenue and expenses described in note
2(a) of Signature Plaza for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
June 16, 1997
<PAGE>
SIGNATURE PLAZA
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited) and the year ended
December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 836 3,273
Recovery of operating expenses 222 900
Other income 77 369
------- -------
Total operating revenue 1,135 4,542
------- -------
Operating expenses:
Maintenance 99 496
Utilities 104 476
Real estate taxes 121 460
Insurance 12 47
Management fees 42 166
General operating 13 61
Administrative 75 401
------- -------
Total operating expenses 466 2,107
------- -------
Operating revenue in excess of
operating expenses $ 669 2,435
======= =======
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
SIGNATURE PLAZA
Notes to Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Signature Plaza is a multi-tenant office building located in Downtown
Orlando, Florida. The building contains approximately 274,000 square
feet of office space available for lease. At March 31, 1997, Signature
Plaza was 92% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the proposed future operations of the
property, have been excluded. Interest income has been excluded
from revenue, and interest, depreciation and amortization, and
other costs not directly related to the future operations of
Signature Plaza have been excluded from expenses. Management is
not aware of any other material factors that would cause the
historical summaries of operating revenue and expenses to not be
indicative of the future operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the three months ended March
31, 1997, have been included. The results of operations for the
three-month period ended March 31, 1997 are not necessarily
indicative of the results for the full year.
(Continued)
<PAGE>
SIGNATURE PLAZA
Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Signature Plaza for the 12 months
ended March 31, 1997, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the buildings
is computed on the modified accelerated cost recovery system method over
a 39-year life. This statement does not purport to forecast actual
operating results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 2,399
Less estimated depreciation and amortization expense 715
------
Pro forma taxable operating income $ 1,684
======
Pro forma cash available from operations $ 2,289
======
<PAGE>
CANYON PARK PORTFOLIO
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Canyon Park Portfolio for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Canyon Park Portfolio. Our responsibility is to express an opinion
on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of Canyon
Park Portfolio.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Canyon Park Portfolio for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
June 13, 1997
<PAGE>
CANYON PARK PORTFOLIO
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 814 3,096
Recovery of operating expenses 130 482
Other income 1 10
------ ------
Total operating revenue 945 3,588
------ ------
Operating expenses:
Maintenance 72 255
Utilities 23 75
Real estate taxes 75 298
Insurance 7 28
Management fees 20 77
General operating 16 114
Administrative 26 113
------ ------
Total operating expenses 239 960
------ ------
Operating revenue in excess of operating $ 706 2,628
expenses ====== ======
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
CANYON PARK PORTFOLIO
Notes to Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997
(unaudited) and the year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Canyon Park Portfolio (the Portfolio) consists of six buildings and
approximately 10 acres of land located in Bothell, Washington, a suburb
of Seattle, containing approximately 202,000 square feet of office, lab
and distribution space available for lease. As of March 31, 1997, Canyon
Park Portfolio was 100% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented, as certain revenue and expenses, which may not
be comparable to those expected to be incurred by CarrAmerica
Realty Corporation in the proposed future operations of the
Portfolio, have been excluded. Interest income has been excluded
from revenue, and interest, depreciation and amortization, and
other costs not directly related to the future operations of the
Portfolio have been excluded from expenses. Management is not
aware of any other material factors that would cause the
historical summaries of operating revenue and expenses to not be
indicative of the future operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments, consisting only of normal recurring
accruals, necessary to present fairly the historical summary of
operating revenue and expenses for the three months ended March
31, 1997, have been included. The results of operations for the
three-month period ended March 31, 1997 are not necessarily
indicative of the results for the full year.
<PAGE>
CANYON PARK PORTFOLIO
Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of the Portfolio for the 12 months ended
March 31, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 2,571
Less estimated depreciation and amortization expense 555
---------
Pro forma taxable operating income $ 2,016
=========
Pro forma cash available from operations $ 2,816
=========
<PAGE>
CM CAPITAL
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of CM Capital: Arroyo, Amador and Rinconada
(collectively, the Buildings) for the year ended December 31, 1996. This
historical summary is the responsibility of the management of the Buildings. Our
responsibility is to express an opinion on the historical summary based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of the
Buildings. In our opinion, the historical summary referred to above presents
fairly, in all material respects, the operating revenue and expenses described
in note 2(a) of the Buildings for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
San Francisco, CA
June 2, 1997
<PAGE>
CM CAPITAL
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
------------ ------------
Operating revenue:
Building rental $1,061 3,733
Recovery of operating expenses 189 600
------ -----
Total operating revenue 1,250 4,333
------ -----
Operating expenses:
Maintenance 69 291
Utilities -- 15
Real estate taxes 50 279
Insurance 15 72
Management fees 16 52
General and administrative 42 174
------ -----
Total operating expenses 192 883
------ -----
Operating revenue in excess of
operating expenses $1,058 3,450
====== =====
See accompanying notes to historical summaries of operating revenue
and expenses.
<PAGE>
CM CAPITAL
Notes to the Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
The CM Capital buildings: Arroyo, Amador, and Rinconada (collectively,
the Buildings), are located in Pleasanton, California and contain
approximately 322,000 square feet of office space available for lease.
The Buildings were constructed in 1983. At March 31, 1997, the Buildings
were 100% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summaries of operating revenue and
expenses are not representative of the actual operations for the
periods presented as certain revenue and expenses, which may not be
comparable to those expected to be incurred by CarrAmerica Realty
Corporation in the future operations of the property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of the Buildings have
been excluded from expenses.
Revenue and expense included for the Rinconada property has been
annualized based on the 9 1/2 months ended December 31, 1996. This
property was occupied by the same tenant for all of 1996.
Management is not aware of any other material factors that would
cause the historical summaries of operating revenue and expenses to
not be indicative of the future operating results of the buildings.
(b) Revenue and Recognition
Revenue from rental operations is recognized straight-line over the
terms of the respective leases.
(c) Interim Unaudited Financial Information
The accompanying unaudited financial information for the three
months ended March 31, 1997 has been prepared consistent with the
rules and regulations of the Securities and Exchange Commission
governing the preparation of the amounts for the year ended
December 31, 1996. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequare to make the
information
<PAGE>
CM CAPITAL
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(2) (c) Continued
presented not misleading. In the opinion of management, all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the historical summary of operating
revenue and expenses for the three months ended March 31, 1997 have
been included. The results of operations for the three-month period
ended March 31, 1997 are not necessarily indicative of the results
for the full year.
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of the Buildings for the 12 months ended
March 31, 1997, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the buildings is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 3,432
Less estimated depreciation and amortization expense (645)
-------
Pro forma taxable operating income $ 2,787
=======
Pro forma cash available from operations $ 3,432
=======
<PAGE>
EMBASSY ROW
Historical Summaries
of Operating Revenue and Expenses
Three months ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Embassy Row for the year ended December
31, 1996. This statement is the responsibility of the management of Greystone
Realty Management, Inc. Our responsibility is to express an opinion on the
historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of
Embassy Row.
In our opinion, the historical summary of operating revenue and expenses
referred to above presents fairly, in all material respects, the operating
revenue and expenses described in note 2(a) of Embassy Row for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Atlanta, Georgia
March 20, 1997
<PAGE>
EMBASSY ROW
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 1,823 6,733
Recovery of operating expenses 121 276
Other 30 146
------- -------
Total operating revenue 1,974 7,155
------- -------
Operating expenses:
Maintenance 20 260
Utilities 284 829
Real estate taxes 171 685
Insurance - related party 12 49
Management fees - related party 114 285
General operating 201 710
Administrative 86 427
------- -------
Total operating expenses 888 3,245
------- -------
Operating revenue in excess of
operating expenses $ 1,086 3,910
======= =======
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
EMBASSY ROW
Notes to the Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Embassy Row consists of three office buildings, a restaurant and
approximately 10.65 acres of undeveloped land located in Atlanta,
Georgia. The three office buildings contain approximately 161,000,
150,000, and 152,000 square feet of office space, respectively, with
approximately 4,000 square feet of restaurant space. Greystone Realty
Corporation is the asset manager and their subsidiary, Greystone Realty
Management, Inc., is the property manager for the buildings.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summary of operating revenue and
expenses is not representative of the actual operations for the
year ended December 31, 1996, as certain revenue and expenses,
which may not be comparable to those expected to be incurred by
CarrAmerica Realty Corporation in the proposed future operations
of the property, have been excluded. Interest income has been
excluded from revenue and interest, depreciation and
amortization, and other costs not directly related to the future
operations of Embassy Row have been excluded from expenses.
Management is not aware of any other material factors that would
cause the historical summary of operating revenue and expenses to
not be indicative of the future operating results of the
buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Embassy Row for the twelve months
ended March 31, 1997, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax
<PAGE>
EMBASSY ROW
Notes to the Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Continued
depreciation for the buildings is computed on the modified accelerated
cost recovery system method over a 39-year life. This statement does not
purport to forecast actual operating results for any period in the
future.
Pro forma net operating income (exclusive of
depreciation and amortization expenses) $ 4,018
Less estimated depreciation and amortization expense 993
------
Pro forma taxable operating income $ 3,025
======
Pro forma cash available from operations $ 4,018
======
<PAGE>
DRAPER PARK NORTH
Historical Summaries
of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Draper Park North for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Draper Park North. Our responsibility is to express an opinion on
the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of Draper
Park North.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses, described in note 2(a),
of Draper Park North for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Salt Lake City, Utah
March 21, 1997
<PAGE>
DRAPER PARK NORTH
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
------------ ------------
Operating revenue:
Building rental $447 784
Recovery of operating expenses 160 197
---- ---
Total operating revenue 607 981
---- ---
Operating expenses:
Common area maintenance 85 149
Management fees 17 30
Real estate tax, insurance and other 58 18
---- ---
Total operating expenses 160 197
---- ---
Operating revenue in excess of
operating expenses $447 784
==== ===
See accompanying notes to historical summaries of operating revenue
and expenses.
<PAGE>
DRAPER PARK NORTH
Notes to Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Draper Park North consists of three buildings located in Draper, Utah,
containing approximately 179,000 square feet of office space available
for lease. Construction of each of the buildings was completed and
operations commenced in 1996. At December 31, 1996, Draper Park North
was 93% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summary of operating revenue and
expenses is not representative of the actual operations for
the year ended December 31, 1996, as certain revenue and
expenses, which may not be comparable to those expected to be
incurred by CarrAmerica Realty Corporation in the proposed
future operations of the property, have been excluded.
Interest income has been excluded from revenue, and interest,
depreciation and amortization, and other costs not directly
related to the future operations of Draper Park North have
been excluded from expenses. Management is not aware of any
other material factors that would cause the historical summary
of operating revenue and expenses to not be indicative of the
future operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line
over the terms of the respective leases. The historical
summary for the year ended December 31, 1996 reflects revenues
and expenses for the period since the buildings' operations
commenced.
(3) Pro Forma Taxable Operating Results and Cash Available from
Operations (Unaudited)
The unaudited pro forma table reflects the taxable operating results
and cash available from operations of the Draper Park North for the
year ended March 31, 1997, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation
<PAGE>
DRAPER PARK NORTH
Notes to Historical Summaries of Operating Revenue and Expenses
(dollars in thousands)
(3) Continued
for the buildings is computed on the modified accelerated cost recovery
system method over a 39-year life. This statement does not purport to
forecast actual operating results for any period in the future.
Pro forma net operating income (exclusive of interest,
depreciation and amortization expenses) $1,393
Less estimated depreciation and amortization expense 529
------
Pro forma taxable operating income $ 864
======
Pro forma cash available from operations $1,393
======
<PAGE>
SORENSON RESEARCH PARK
Historical Summaries of Operating Revenue and Expenses
Three Months Ended March 31, 1997 (Unaudited)
and Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Sorenson Research Park for the year ended
December 31, 1996. This historical summary is the responsibility of the
management of Sorenson Research Park. Our responsibility is to express an
opinion on the historical summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the historical summary is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the historical summary. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the historical
summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of
Sorenson Research Park.
In our opinion, the historical summary referred to above presents fairly, in
all material respects, the operating revenue and expenses, described in note
2(a), of Sorenson Research Park for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Salt Lake City, Utah
March 21, 1997
<PAGE>
SORENSON RESEARCH PARK
Historical Summaries of Operating Revenue and Expenses
For the three months ended March 31, 1997 (unaudited)
and the year ended December 31, 1996
(dollars in thousands)
Three months Year
ended ended
March 31, December 31,
1997 1996
---- ----
Operating revenue:
Building rental $ 470 $ 1,978
Recovery of operating expenses 34 411
------- -------
Total operating revenue 504 2,389
------- -------
Operating expenses:
Maintenance -- 92
Utilities -- 94
Real estate and other taxes 33 185
Insurance -- 13
General operating 1 27
------- -------
Total operating expenses 34 411
------- -------
Operating revenue in excess of
operating expenses $ 470 $ 1,978
======= =======
See accompanying notes to historical summaries of operating revenue and
expenses.
<PAGE>
SORENSON RESEARCH PARK
Notes to Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Sorenson Research Park consists of five office buildings located in
Salt Lake City, Utah. One of the five buildings is currently under
construction and is expected to be completed in 1997. The other four
operating office buildings were constructed between 1987 and 1996 and
contain approximately 178,000 square feet of office space available
for lease. At December 31, 1996, each of the four operating office
buildings were 100% leased under triple-net, single tenant lease
agreements. Management pays certain operating expenses on behalf of
the tenants which are fully reimbursed by the tenants.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summary of operating revenue and
expenses is not representative of the actual operations for
the year ended December 31, 1996, as certain revenue and
expenses, which may not be comparable to those expected to be
incurred by CarrAmerica Realty Corporation in the proposed
future operations of the property, have been excluded.
Interest income has been excluded from revenue, and interest,
depreciation and amortization, and other costs not directly
related to the future operations of Sorenson Research Park
have been excluded from expenses. Management is not aware of
any other material factors that would cause the historical
summary of operating revenue and expenses to not be
indicative of the future operating results of the buildings.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line
over the terms of the respective leases.
(3) Related Party
A principal of the owner of Sorenson Research Park is also a principal
in a company that leases approximately 58,000 square feet of office
space in Sorenson Research Park. Rental revenue from this lease
amounted to $733 thousand for the year ended December 31, 1996.
(4) Management Fees
Management of Sorenson Research Park is provided by an affiliate and
management fees are not charged to Sorenson Research Park. Therefore,
management fees are not included in the accompanying historical
summary.
<PAGE>
SORENSON RESEARCH PARK
Notes to Historical Summaries of Operating Revenue and Expenses
Three months ended March 31, 1997 (unaudited)
and year ended December 31, 1996
(dollars in thousands)
(5) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results
and cash available from operations of Sorenson Research Park for the
year ended March 31, 1997, as adjusted for certain items which can be
factually supported. For purposes of presenting pro forma net taxable
operating income, revenue is recognized when it is either collectible
under the lease terms or collected. Tax depreciation for the buildings
is computed on the modified accelerated cost recovery system method
over a 39-year life. This statement does not purport to forecast
actual operating results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,830
Less estimated depreciation and amortization expense 672
------
Pro forma taxable operating income $ 1,158
======
Pro forma cash available from operations $ 1,830
======
<PAGE>
QUORUM PLACE
Historical Summary
of Operating Revenue and Expenses
For the Year Ended December 31, 1996
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
CarrAmerica Realty Corporation:
We have audited the accompanying historical summary of operating revenue and
expenses, as defined in note 2(a), of Quorum Place for the year ended December
31, 1996. This historical summary is the responsibility of the management of
Quorum Place. Our responsibility is to express an opinion on the historical
summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the historical summary is free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the historical summary. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the historical summary. We believe
that our audit provides a reasonable basis for our opinion.
The accompanying historical summary was prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and is
not intended to be a complete presentation of the revenue and expenses of Quorum
Place.
In our opinion, the historical summary referred to above presents fairly, in all
material respects, the operating revenue and expenses described in note 2(a) of
Quorum Place for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Washington, DC
June 3, 1997
<PAGE>
QUORUM PLACE
Historical Summary of Operating Revenue and Expenses
For the year ended December 31, 1996
(dollars in thousands)
Operating revenue:
Building rental $ 2,140
Recovery of operating expenses 146
Other operating income 32
---------
Total operating revenue 2,318
---------
Operating expenses:
Maintenance 168
Utilities 327
Real estate taxes 282
Insurance 30
Management fees 65
General operating 44
Administrative 204
---------
Total operating expenses 1,120
---------
Operating revenue in excess of operating expenses $ 1,198
=========
See accompanying notes to historical summary of operating revenue and expenses.
<PAGE>
QUORUM PLACE
Notes to Historical Summary of Operating Revenue and Expenses
For the year ended December 31, 1996
(dollars in thousands)
(1) Description of the Property
Quorum Place is a multi-tenant office building located in suburban
Dallas, Texas. The building contains approximately 177,000 square feet of
office space available for lease. At December 31, 1996, Quorum Place was
96% leased.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying historical summary of operating revenue and
expenses is not representative of the actual operations for 1996
as certain revenue and expenses, which may not be comparable to
those expected to be incurred by CarrAmerica Realty Corporation in
the proposed future operations of the property, have been
excluded. Interest income has been excluded from revenue, and
interest, depreciation and amortization, and other costs not
directly related to the future operations of Quorum Place have
been excluded from expenses. Management is not aware of any other
material factors that would cause the historical summary of
operating revenue and expenses to not be indicative of the future
operating results of the building.
(b) Revenue Recognition
Revenue from rental operations is recognized straight-line over
the terms of the respective leases.
(3) Pro Forma Taxable Operating Results and Cash Available from Operations
(Unaudited)
The unaudited pro forma table reflects the taxable operating results and
cash available from operations of Quorum Place for the year ended
December 31, 1996, as adjusted for certain items which can be factually
supported. For purposes of presenting pro forma net taxable operating
income, revenue is recognized when it is either collectible under the
lease terms or collected. Tax depreciation for the building is computed
on the modified accelerated cost recovery system method over a 39-year
life. This statement does not purport to forecast actual operating
results for any period in the future.
Pro forma net operating income (exclusive of
depreciation and amortization expense) $ 1,037
Less estimated depreciation and amortization expense 366
---------
Pro forma taxable operating income $ 671
=========
Pro forma cash available from operations $ 1,010
=========
