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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-12482
GLIMCHER REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 31-1390518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SOUTH THIRD STREET 43215
COLUMBUS, OHIO (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 621-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
COMMON SHARES OF BENEFICIAL INTEREST, NEW YORK STOCK EXCHANGE
PAR VALUE $.01 PER SHARE
-------------------------------------
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
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of 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 [ ].
As of March 12, there were 21,888,931 Common Shares of Beneficial Interest
outstanding, par value $.01 per share, and the aggregate market value of such
stock held by non-affiliates of the Registrant was $20.125 (based on the closing
price on the New York Stock Exchange on such date).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1997 Glimcher Realty Trust Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the year covered by
this Form 10-K with respect to the Annual Meeting of Shareholders to be held on
May 12, 1997 are incorporated by reference into Part III.
1 of 73 pages
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
FORM
10-K
REPORT
PAGE
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ITEM NO.
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PART I
<S> <C> <C>
1. Business.................................................................................... 3
2. Properties.................................................................................. 8
3. Legal Proceedings........................................................................... 20
4. Submission of Matters to a Vote of Security Holders......................................... 21
PART II
5. Market for the Registrant's Common Equity and Related Shareholder Matters................... 21
6. Selected Financial Data..................................................................... 22
7. Management's Discussion and Analysis of Financial Condition and Results of Operations....... 23
8. Financial Statements and Supplementary Data................................................. 35
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........ 35
PART III
10. Directors and Executive Officers of the Registrant.......................................... 35
11. Executive Compensation...................................................................... 36
12. Security Ownership of Certain Beneficial Owners and Management.............................. 36
13. Certain Relationships and Related Transactions.............................................. 36
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K........................... 36
</TABLE>
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PART I
This Form 10-K, together with other statements and information publicly
disseminated by Glimcher Realty Trust ("GRT"), contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements are based on assumptions and expectations which may not be
realized and are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and otherwise, may
differ from the results discussed in the forward-looking statements. Risks and
other factors that might cause differences, some of which could be material,
include, but are not limited to, the effect of economic and market conditions;
failure to consummate financing and venture arrangements, including the failure
of Nomura Asset Capital Corporation ("Nomura") to purchase additional preferred
shares (as discussed below under Developments, Acquisitions and Renovations
During the 1996 Fiscal Year) or to provide permanent financing, development
risks, including lack of satisfactory financing, construction and lease-up
delays and cost overruns; the level and volatility of interest rates; financial
stability of tenants within the retail industry; the rate of revenue increases
versus expense increases; the ability of Glimcher Development Corporation
("GDC"), GRT's newly formed non-qualified real estate investment trust ("REIT")
subsidiary, to generate fees from future developments, as well as other risks
listed from time to time in this Form 10-K and in GRT's other reports filed with
the Securities and Exchange Commission.
ITEM 1. BUSINESS
(a) General Development of Busines
GRT is a Maryland REIT which was formed on September 1, 1993 to continue
the business of The Glimcher Company ("TGC"), and its affiliates, of owning,
leasing, acquiring, developing and operating enclosed regional malls (the "Mall
Properties"), community shopping center properties (the "Community Shopping
Centers") and single tenant retail properties (the "Single Tenant Retail
Properties"). The Mall Properties, Community Shopping Centers and Single Tenant
Retail Properties are each individually referred to herein as a "Property" and
collectively referred to herein as the "Properties". On January 26, 1994, GRT
consummated an initial public offering (the "IPO") of 15,825,000 of its common
shares of beneficial interest (the "Shares"). On February 3, 1994, GRT sold an
additional 2,373,750 Shares as a result of the underwriters exercising the
over-allotment option granted to them in connection with the IPO . The net
proceeds of the IPO were used by GRT primarily to acquire (at the time of the
IPO) an 86.2% interest in Glimcher Properties Limited Partnership (the
"Operating Partnership"), a Delaware limited partnership of which Glimcher
Properties Corporation ("GPC"), a Delaware corporation and a wholly owned
subsidiary of GRT, is sole general partner, and to repay mortgage indebtedness
with respect to one of the Properties acquired in connection with the IPO ( the
"IPO Properties). The Operating Partnership and/or its subsidiaries applied the
portion of the net proceeds received by it from GRT towards (i) the acquisition
of 46 Properties (the "Acquisition Properties"), (ii) the repayment of certain
mortgage indebtedness and prepayment penalties on 29 Properties (the "Glimcher
Properties") contributed to the Operating Partnership and its affiliates by
entities affiliated with Herbert Glimcher and David J. Glimcher or the
beneficial owners of such entities (collectively, the "Glimcher Entities"),
(iii) the payment to persons unaffiliated with TGC of the purchase price for
minority interests in certain of the Glimcher Properties, (iv) the payment of
other costs and expenses associated with the IPO transactions, and (v) for
working capital and other general business purposes. The net proceeds from the
exercise of the over-allotment option were used entirely to reduce the then
outstanding balance of GRT's credit facility. On June 27, 1995, the Company
completed a public offering of an additional 3,500,000 Shares (the "Second
Offering"). The net proceeds from the Second Offering were used by GRT to
acquire additional units of limited partnership in the Operating Partnership.
The Operating Partnership then used the proceeds obtained in exchange for the
GRT units to reduce variable rate indebtedness.
The Operating Partnership is a 99.0% limited partner of four Delaware
limited partnerships, Glimcher Holdings Limited Partnership ("Holdings"),
Glimcher Centers Limited Partnership ("Centers"), Grand Central Limited
Partnership ("GCLP") and Glimcher York Associates Limited Partnership ("York")
and of one Ohio limited partnership, Morgantown Mall Associates Limited
Partnership ("Morgantown"). The general partner of Holdings, Centers, GCLP and
York is a wholly owned corporate subsidiary of GPC, and the general partner of
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Morgantown is GPC. In 1996, GRT also purchased interests in two unconsolidated
ventures and one corporate subsidiary. The Operating Partnership is (i) an 81.8%
member of a Colorado limited liability company, Olathe Mall L.L.C. ("Olathe")
which is a 55.0% member in Great Plains Metro Mall L.L.C. ("Great Plains"), (ii)
a 33.3% member of a Delaware limited liability company, Johnson City Venture
L.L.C. ("Johnson City") and (iii) a common shareholder of GDC with 95.0%
economic interest and no voting interest. GDC was incorporated on October 16,
1996; construction, development, leasing and legal departments of GRT were
transferred to GDC on November 1, 1996 and will provide their services for a
fee, to GRT to ventures in which GRT has an ownership interest and to third
parties. The operation of GDC allows the Company to earn non-qualified revenues
without jeopardizing its REIT status. The Operating Partnership and entities
directly or indirectly owned or controlled by GRT, on a consolidated basis, are
hereinafter referred to as the "Company".
The Company does not engage or pay a REIT advisor. Management, leasing,
accounting, design and construction supervision expertise is provided through
its own personnel, through GDC, or, where appropriate, through outside
professionals.
(b) Developments, Acquisitions and Renovations During the 1996 Fiscal Year
In the fiscal year ended December 31, 1996, the Company completed
construction of the first phase of Georgesville Square containing 132,000 square
feet of gross leasable area ("GLA") and began the construction of Meadowview
Square, both located in Ohio. Additionally, the Company completed the first
phase of the renovation and expansion of Grand Central Mall and completed the
expansion of Morgantown Commons, both located in West Virginia, and began the
expansion of Indian Mound Mall in Ohio. Finally, the Company, through its 45.0%
investment in Olathe, began the development of The Great Mall of the Great
Plains in Kansas containing an aggregate of 850,000 square feet of GLA (for more
detail discussion of the foregoing, see the 1996 Development Activity and the
1996 Renovation/Expansion Activity in Management's Discussion and Analysis of
Financial Condition and Results of Operations).
In the fiscal year ended December 31, 1996, the Company completed the
acquisition of Delaware Community Plaza containing 153,000 square feet of GLA
located in Ohio. Additionally, the Company completed the acquisition of a 22
Wal-Mart anchored Community Shopping Center portfolio containing an aggregate of
4.4 million square feet of GLA. Finally, the Company, through its 33.3%
investment in Johnson City, completed the acquisition of The Mall at Johnson
City, Tennessee containing an aggregate of 549,000 square feet of GLA (for more
detail discussion of the foregoing see the 1996 Acquisitions Activity in
Management's Discussion and Analysis of Financial Condition and Results of
Operations).
On November 27, 1996, the Company sold 34,000 shares of its Series A
convertible preferred shares (the "Preferred Shares"). The Preferred Shares were
sold in a private placement to Partnership Acquisition Trust II, a Delaware
business trust ("PAT II"), and no underwriter was used in connection with the
sale of the Preferred Shares. The Preferred Shares were offered and sold for an
aggregate cash consideration of $34.0 million, and as part of the transaction,
PAT II also acquired an interest in Great Plains and a right to require Great
Plains to purchase the Preferred Shares under certain circumstances.
The sale of the Preferred Shares was exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act") by virtue of the fact
that the Preferred Shares were sold to PAT II for its own account for investment
and not with a view towards the resale, transfer or distribution thereof, nor
with any present intention of distributing the Preferred Shares, thus qualifying
the sale of the Preferred Shares as a transaction by an issuer not involving any
public offering in accordance with Section 4(2) of the Securities Act. In
addition, PAT II is an "accredited investor" as defined in Rule 501(a) under the
Securities Act.
The Company may redeem the Preferred Shares, at any time, at par. PAT II
may also convert the Preferred Shares at any time during the conversion period
which commences on the earliest of (i) the date of default under the securities
purchase agreement between PAT II, the Operating Partnership and GRT, or (ii)
November 27, 2001, the beginning of the sixth year after the date when the
Preferred Shares are issued, and ends on the close of business on the business
day next preceding the date fixed for redemption or for payment of any amounts
distributable on liquidation to the holders of the Preferred Shares. The number
of fully-paid and nonassessable conversion Shares, is
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obtained by dividing the then applicable liquidation preference (generally,
$1,000, but subject to adjustment based on when the conversion occurs) by the
conversion price per Share which is equal to the product of (i) the average
market price per Share over the 30 trading days prior to the conversion,
multiplied by (ii) the applicable conversion percentage. The applicable
percentage means, based on when the calculation is made, a percentage between
70.0% and 90.0%.
(c) Narrative Description of Business
GENERAL The Company concentrates its business on various types of retail
properties such as Mall Properties, Community Shopping Centers and Single Tenant
Retail Properties, which are generally strategically located in markets where
management of the Company has extensive operating experience and knowledge of
market conditions. At December 31, 1996, the Properties consisted of nine Mall
Properties (one of which is owned by Johnson City), 87 Community Shopping
Centers and 17 Single Tenant Retail Properties, containing an aggregate of 18.6
million square feet of GLA (18.0 million square feet of GLA is wholly-owned by
the Company) located in 24 states primarily throughout the East and the Midwest.
As of December 31, 1996, the occupancy rate for all of the Properties was
95.4% of which 85.1%, 10.5% and 4.4% was leased to national retailers, regional
retailers and local retailers, respectively. The Company focus is to maintain
high occupancy rates for the Properties by capitalizing on management's
long-standing relationships with national and regional tenants and its extensive
experience in marketing to local retailers.
As of December 31, 1996, the Properties had average annualized minimum
rents of $6.32 per square foot of GLA. Approximately 78.6%, 13.4% and 8.0% of
the annualized minimum rents of the Properties as of December 31, 1996 was
derived from national retail chains, regional retail chains and local retailers,
respectively. Wal-Mart, Kmart and Lowe's represented approximately 10.1%, 8.8%,
and 4.8%, respectively, of the aggregate annualized minimum rents of the
Properties as of December 31, 1996; no other tenant represented more than 3.0%
of the aggregate annualized minimum rents of the Properties for such period.
MALL PROPERTIES The Mall Properties provide a broad range of shopping
alternatives to serve the needs of customers in all market segments. Each of the
Mall Properties is anchored by two to five department stores such as
Elder-Beerman, JC Penney, Lazarus, Parisian, Proffitt's, Sears, Stone & Thomas
and Wal-Mart. Mall stores, most of which are national retailers, include Fashion
Bug, Footlocker, Hallmark, Lerner New York, Limited Express, Radio Shack, The
Disney Store, The Gap, The Limited, Warner Brothers and Waldenbooks. To provide
a complete shopping, dining and entertainment experience, the Mall Properties
generally have at least one theme restaurant, a food court which offers a
variety of fast food alternatives, multiple screen movie theaters and other
entertainment activities. The largest of the Mall Properties is 1,041,000 square
feet of GLA and has approximately 130 stores and the smallest is 225,000 square
feet of GLA and has approximately 55 stores. One of the Mall Properties is owned
by Johnson City. The Mall Properties also have additional restaurants and retail
businesses such as Chi-Chi's, Red Lobster and Toys `R' Us located along the
perimeter of the parking areas.
As of December 31, 1996, the Mall Properties accounted for 27.3% of the
total GLA of the Properties and had an overall occupancy rate of 93.0%. The Mall
Properties accounted for 45.2% of the Properties' 1996 aggregate annualized
minimum rents.
COMMUNITY SHOPPING CENTERS The Company's Community Shopping Centers are
designed to attract local and regional area customers and are typically anchored
by a combination of supermarkets, discount department stores or drug stores
("Community Anchors") which attract shoppers to each center's smaller shops. The
tenants at the Company's Community Shopping Centers typically offer day-to-day
necessities and value oriented merchandise. Community Anchors include nationally
recognized retailers such as Hills, JC Penney, Kmart, Lowe's, Target and
Wal-Mart and supermarkets such as Big Bear, Kroger and Winn-Dixie. Many of the
Community Shopping Centers have retail businesses or restaurants such as The
Huntington National Bank, Long John Silver's and McDonald's located along the
perimeter of the parking areas.
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As of December 31, 1996, the Community Shopping Centers accounted for 65.3%
of the total GLA of the Properties, and had an overall occupancy rate of 95.8%.
The Community Shopping Centers accounted for 48.1% of the Properties' 1996
aggregate annualized minimum rents.
SINGLE TENANT RETAIL PROPERTIES The Company's Single Tenant Retail
Properties are occupied by Kmart, Lowe's, Walgreens and Grand Union. The net
leases with the tenants at the Single Tenant Retail Properties expire between
June 1997 and January 2025 and have an average remaining lease term of
approximately 10 years without regard to renewal options.
As of December 31, 1996, the Single Tenant Retail Properties had an overall
occupancy rate of 100%. The Single Tenant Retail Properties accounted for 7.4%
of the total GLA of the Properties, and 6.7% of the Properties' 1996 aggregate
annualized minimum rents
GROWTH STRATEGIES AND OPERATING POLICIES Management of the Company believes
per Share growth in funds from operations ("FFO") is the critical factor in
enhancing shareholder value. The Company's primary business objective is to
achieve growth in FFO by developing and acquiring retail properties and by
improving the operating performance and value of its existing portfolio through
selective expansion and renovation of its Properties and by maintaining high
occupancies, increasing minimum rents per square foot of GLA and aggressively
controlling costs.
Key elements of the Company's growth strategies and operating policies are
to: (i) increase Property values by aggressively marketing available GLA and
renewing existing leases; (ii) negotiate and sign leases which provide for
regular or periodic fixed contractual increases to minimum rents; (iii)
capitalize on management's long-standing relationships with national and
regional retailers and extensive experience in marketing to local retailers, as
well as explore the leverage inherent in a larger portfolio of properties to
lease available space; (iv) utilize its team management approach to increase
productivity and efficiency; (v) hold Properties for long-term investment and
emphasize regular maintenance, periodic renovation and capital improvements to
preserve and maximize value; (vi) control operating costs by utilizing Company
employees and/or GDC employees to do management, leasing, marketing, finance,
accounting, construction supervision, legal and data processing activities; and
(vii) renovate, reconfigure or expand Properties and utilize existing land
available for expansion and development of outparcels to meet the needs of
existing or new tenants. Additionally, the Company seeks to utilize its
development capabilities to develop quality Properties at the lowest possible
cost.
The Company intends to make acquisitions in a manner consistent with the
requirements of the Code, applicable to REITs and related regulations with
respect to the composition of the Company's portfolio and the derivation of
income unless, because of circumstances or changes in the Code (or any related
regulation), the trustees of the Company determine that it is no longer in the
best interests of the Company to qualify as a REIT.
The Company's acquisition strategies are to selectively acquire
strategically located Properties in regional markets where management generally
has extensive operating experience and/or where it has been able to capitalize
on its strong working relationships with national, regional and local retailers,
to enhance such center's operating performance through a comprehensive program
of leasing, merchandising, reconfiguration, proactive management, renovation and
expansion.
The following factors, among others, are considered by the Company in
making acquisitions: (i) the geographic area and type of Property; (ii) the
location, construction quality, condition and design of the Property; (iii) the
current FFO generated by the Property and the ability to increase FFO through
property repositioning and proactive management of the tenant base; (iv) the
potential for capital appreciation; (v) the terms of tenant leases; (vi) the
existing tenant mix at the Property; (vii) the potential for economic growth and
the tax and regulatory environment of the communities in which the Properties
are located; (viii) the occupancy and demand by tenants for Properties of
similar type in the vicinity; and (ix) the prospects for financing or
refinancing of the Property.
The Company owns its Properties for long-term investment. Therefore, its
focus is to provide for regular maintenance for its Properties and conduct
periodic renovations and refurbishments to preserve and increase Property values
while also increasing the retail sales prospects of its tenants. The projects
usually include
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renovating existing facades, installing uniform signage, updating interior
decor, resurfacing parking lots and increasing parking lot lighting. To meet the
needs of existing or new tenants and changing consumer demands, the Company also
reconfigures and expands its Properties, including utilizing land available for
expansion and development of outparcels for the addition of new anchors. In
addition, the Company works closely with its tenants to renovate their stores
and enhance their merchandising capabilities.
FINANCING STRATEGIES At December 31, 1996, the Company had a debt to total
market capitalization ratio of 50.1%, based upon the closing price of the Shares
on the New York Stock Exchange as of December 31, 1996. The Company expects that
it may from time to time reevaluate its policy with respect to its ratio of debt
to total market capitalization in light of then current economic conditions,
relative costs of debt and equity capital, market values of its Properties,
acquisition, development and expansion opportunities and other factors,
including meeting the taxable income distribution requirement for REITs under
the Code if the Company has taxable income without receipt of cash sufficient to
enable the Company to meet such distribution requirements.
To the extent determined by its Board of Trustees, the Company may raise
additional capital through equity offerings, debt financings, ventures,
retention of FFO (subject to provisions in the Code concerning taxability of
undistributed REIT income) or a combination of these methods. The Company may
also finance acquisitions through the exchange of Properties.
CORPORATE HEADQUARTERS The Company's headquarters are located at 20 South
Third Street, Columbus, Ohio 43215, and its telephone number is (614) 621-9000.
In addition, the Company maintains leasing and management offices at each of its
Mall Properties.
COMPETITION All of the Properties are located in areas which have shopping
centers and other retail facilities. Generally, there are other retail
properties within a five-mile radius of a Property. The amount of rentable
retail space in the vicinity of the Company's Properties could have a material
adverse effect on the amount of rent charged by the Company and on the Company's
ability to rent vacant space and/or renew leases of such properties. There are
numerous commercial developers, real estate companies and major retailers that
compete with the Company in seeking land for development, properties for
acquisition and tenants for properties, some of which may have greater financial
resources than the Company and more operating or development experience than
that of the Company. There are numerous shopping facilities that compete with
the Company's Properties in attracting retailers to lease space. In addition,
retailers at the Properties may face increasing competition from outlet malls,
discount shopping clubs, catalog companies, direct mail and telemarketing.
EMPLOYEES At December 31, 1996, the Company, its GDC subsidiary and the two
ventures the Company has member interests in, had an aggregate of 521 employees
of which 110 were employed at the Company headquarters, including 51 GDC
employees, and 411 employees located at the Mall Properties, of which 321 were
part-time.
REAL ESTATE AND OTHER CONSIDERATIONS As an owner and developer of real
estate, the Company is subject to risks arising in connection with such
activities and the underlying real estate, including defaults under or
non-renewal of tenant leases, tenant bankruptcies, competition, liquidity of
real estate, inability to rent unleased space, failure to generate sufficient
income to meet operating expenses, including debt service, capital expenditures
and tenant improvements, environmental matters, financing availability, defaults
under and failure to repay borrowings, fluctuations in interest rates, changes
in real estate and zoning laws, cost overruns and other development activities.
The success of the Company also depends upon certain key personnel, its ability
to maintain its qualification as a REIT, and trends in the national and local
economy, including income tax laws, governmental regulations and legislation and
population trends.
TAX STATUS The Company intends to continue to be taxed as a REIT under
Sections 856 through 860 of the Code. As such, the Company generally will not be
subject to Federal income tax to the extent it distributes at least 95.0% of its
REIT taxable income to its shareholders. If the Company fails to qualify as a
REIT in any taxable year, the Company will be subject to Federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Even as a qualified REIT, the Company is subject to
certain state and local taxes on its income and property and to federal income
and excise taxes on its undistributed income.
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ITEM 2. PROPERTIES
The Company's 113 Properties, 112 of which are wholly-owned, are located in
24 states primarily throughout the East and the Midwest as follows: Ohio (27),
Pennsylvania (12), Tennessee (10), Kentucky (8), West Virginia (8), South
Carolina (7), New York (6), North Carolina (6), Indiana (5), Florida (3),
Virginia (3), Illinois (2), Massachusetts (2), Missouri (2), Washington (2),
Wisconsin (2), Alabama (1), Arizona (1), Colorado (1), Georgia (1) Kansas (1),
Michigan (1), Nebraska (1), and Texas (1).
(a) Mall Properties
Nine of the Properties, including one joint venture Property, are Mall
Properties and range in size from 225,000 square feet of GLA to 1,041,000 square
feet of GLA. Four of the Mall Properties are located in Ohio and five are
located in the states of West Virginia (2), Kentucky (1), New York (1) and
Tennessee (1). The location, general character and major tenant information with
respect to the Mall Properties at December 31, 1996 are set forth below in the
Summary of Mall Properties schedule.
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SUMMARY OF MALL PROPERTIES AT DECEMBER 31, 1996
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<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS STORES LEASE
PROPERTY/LOCATION GLA GLA(1) GLA LEASED LEASED ANCHORS EXPIRATION (4)
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<S> <C> <C> <C> <C> <C> <C> <C>
Ashland Town Center 226,862 189,764 416,626 100.0 77.2 JC Penney 10/31/04
Ashland, KY ................... Proffitt's 01/31/10
Wal-Mart 11/10/09
Grand Central Mall 442,833 366,177 809,010 100.0 82.6 Goody's 04/30/03
Parkersburg, WV................. JC Penney 09/30/97
Phar-Mor 04/30/07
Sears 09/25/02
Stone & Thomas (2) 01/31/33
Indian Mound Mall 233,634 187,519 421,153 100.0 79.0 Elder-Beerman 09/30/06
Heath, OH....................... Hills 01/31/12
JC Penney 10/31/01
Lazarus 09/30/01
Morgantown Mall 359,171 183,226 542,397 100.0 84.9 Carmike
Morgantown, WV ................. Cinemas, Inc. 10/31/05
Elder-Beerman 09/30/10
JC Penney 09/30/05
Proffitt's 03/15/11
Sears 09/30/05
New Towne Mall 291,741 216,622 508,363 100.0 76.1 Elder-Beerman 10/31/08
New Philadelphia, OH ........... Hills 01/31/14
JC Penney 09/30/03
Phar-Mor 06/30/10
Sears 10/31/98
River Valley Mall 286,288 269,373 555,661 100.0 89.5 Elder-Beerman 09/30/07
Lancaster, OH ................. Hills 01/31/13
JC Penney 09/30/02
Lazarus 09/30/02
Sears 10/31/99
Southside Mall 147,508 77,531 225,039 81.4 88.5 JC Penney 07/31/01
Oneonta, NY ................... Kmart 06/30/08
The Mall at Fairfield Commons 684,742 356,477 1,041,219 100.0 92.4 Elder-Beerman 10/31/13
Beavercreek, OH ................ JC Penney 10/31/08
Lazarus (2) 01/31/15
Parisian 01/31/14
Sears 10/31/08
--------- --------- --------- ---- ----
Company owned Properties 2,672,779 1,846,689 4,519,468 99.0 84.3
PROPERTY OWNED IN A VENTURE
The Mall at Johnson City 334,605 214,218 548,823 100.0 83.3 Goody's 05/31/06
Johnson City, TN (3) ........... JC Penney 03/31/00
Proffitt's for Her 10/31/12
Proffitt's for Men, 06/30/06
Kids & Home
Sears 03/09/01
--------- --------- --------- ---- ----
TOTAL ........................... 3,007,384 2,060,907 5,068,291 99.1 84.2
========= ========= ========= ==== ====
</TABLE>
1) Includes outparcels.
2) Ground lease.
3) The Company owns 33.3% of this Mall Property. As the venture's managing
general partner, the Company, and GDC are responsible for management
and leasing services, respectively, and receive fees for providing
these services.
4) Lease expiration dates do not consider options to renew.
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(b) Community Shopping Centers
Eighty-seven of the Properties are Community Shopping Centers ranging in
size from 17,000 to 491,000 square feet of GLA. The Community Shopping Centers
are located in 22 states primarily in the East and the Midwest as follows: Ohio
(20), Tennessee (9), Pennsylvania (7), South Carolina (7), Kentucky (6), North
Carolina (6), West Virginia (6), New York (4), Florida (3), Indiana (3),
Illinois (2), Missouri (2), Virginia (2), Wisconsin (2), Alabama (1), Arizona
(1), Colorado (1), Georgia (1), Kansas (1), Michigan (1), Texas (1), and
Washington (1). The location, general character and major tenant information
with respect to the Community Shopping Centers at December 31, 1996 are set
forth below in the Summary of Community Shopping Centers schedule.
SUMMARY OF COMMUNITY SHOPPING CENTERS AT DECEMBER 31, 1996
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<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS STORES LEASE
PROPERTY LOCATION GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Applewood Village 114,539 25,500 140,039 100.0 84.9 Food Town 10/31/10
Fremont, OH................... Wal-Mart 1/26/10
Arnold Plaza 140,340 14,900 155,240 100.0 100.0 Kmart 11/30/02
Arnold, MO.................... Schnucks 07/31/98
Artesian Square 152,028 25,400 177,428 100.0 88.2 JC Penney 04/30/08
Martinsville, IN.............. Kroger 11/30/09
Wal-Mart 09/39/09
Ashland Plaza 90,547 42,246 132,820 100.0 96.2 Hills 01/31/03
Ashland, KY...................
Audubon Village 85,491 39,101 124,592 100.0 72.0 Wal-Mart 01/31/08
Henderson, KY.................
Aviation Plaza 123,538 51,177 174,715 100.0 94.4 Piggly Wiggly 12/31/09
Oshkosh, WI................... Wal-Mart 12/29/09
Ayden Plaza 21,000 11,800 32,800 100.0 84.7 Food Lion 10/31/07
Ayden, NC...................
Barren River Plaza 206,395 27,200 233,595 100.0 94.5 Goody's 10/31/00
Glasgow, KY................... Wal-Mart 09/18/10
Watson's 09/26/10
Winn Dixie 10/31/10
Bollweevil Shopping 30,625 12,760 43,385 100.0 92.5 Winn-Dixie 05/23/04
Center Enterprise, AL..........
Buckhannon Plaza 70,951 13,865 84,816 100.0 85.6 Ames 05/31/00
Tennerton, WV................. A&P 04/30/00
Cambridge Plaza 79,949 15,070 95,019 100.0 100.0 Hills 01/31/13
Cambridge, OH................
Canal Place Plaza 117,162 32,800 149,962 100.0 76.8 Kmart 08/31/19
Rome, NY.....................
Chillicothe Plaza 91,508 6,654 98,162 100.0 100.0 Hills 01/31/13
Chillicothe, OH..............
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS STORES LEASE
GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
PROPERTY LOCATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Clarksville Plaza 93,672 18,170 111,842 100.0 49.4 Crossroads 01/31/04
Clarksville, IN............... Furniture
Service 01/31/98
Merchandise
College Plaza 148,181 30,250 178,431 100.0 100.0 Food Lion 09/29/12
Bluefield, VA................ Wal-Mart 05/29/12
Corry Plaza 87,768 20,599 108,367 100.0 100.0 GC Murphy 04/30/02
Corry, PA..................... Company
Quality Farm 08/31/04
& Fleet
Quality 09/30/99
Markets
Cross Creek Plaza 170,406 72,119 242,525 100.0 92.7 JC Penney 02/28/10
Beaufort, SC.................. Wal-Mart 11/10/09
Winn Dixie 07/17/11
Crossing Meadows 178,599 55,385 233,984 100.0 96.8 Festival Foods 06/27/10
Onalaska, WI..................
Wal-Mart 08/23/11
Crossroads Center 200,980 43,950 244,930 100.0 73.4 Goody's 10/31/01
Knoxville, TN................. Ingles 09/25/10
Wal-Mart 01/31/09
Cumberland Crossing 100,034 44,700 144,734 100.0 96.6 Food City 12/13/10
Jacksboro, TN................. Wal-Mart 09/28/10
Cypress Bay Village 197,821 59,264 257,085 100.0 86.8 Food Lion 12/20/10
Morehead City, NC............. Sears 02/13/00
Wal-Mart 09/29/09
Dallas Plaza 112,609 10,500 123,109 100.0 100.0 Kmart 11/30/00
Balch Springs, TX.............
Daytona Plaza 116,907 24,346 141,253 100.0 88.5 Kmart 10/30/98
Daytona Beach, FL.............
Delaware Community Plaza 54,152 99,299 153,451 100.0 100.0 Kroger 03/31/13
Delaware, OH..................
East Pointe Plaza 183,862 95,410 279,271 100.0 100.0 Food Lion 11/16/10
Columbia, SC.................. Superpetz 03/31/06
Wal-Mart 01/31/09
East Pointe Plaza 107,211 37,900 145,111 100.0 95.8 Big Bear 09/30/13
Marysville, OH................ Wal-Mart
Franklin Square 198,262 38,800 237,062 100.0 92.3 Goody's 05/31/99
Spartanburg, SC............... Ingles 11/30/07
Wal-Mart 07/31/07
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS SHORES LEASE
PROPERTY/LOCATION GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Georgesville Square 131,644 131,644 100.0 Lowe's 10/31/16
Columbus, OH.................
Grand Union Plaza 61,335 61,335 100.0 Grand Union 06/30/19
South Glens Falls, NY........
Gratiot Center 173,165 28,151 201,316 84.7 100.0 Kessel Food 10/31/09
Saginaw, MI.................. Market
Kmart 11/30/13
Hills Plaza East 77,000 19,025 96,025 100.0 87.4 Hills 10/31/97
Erie, PA.....................
Hocking Valley Mall 147,817 31,670 179,487 100.0 100.0 Kmart 09/30/03
Lancaster, OH................. Kroger 09/30/97
Horizon Park 84,180 84,180 100.0 Kmart 11/30/00
Longmont, CO..................
Hunter's Ridge Shopping 84,180 92,430 176,610 100.0 94.6 Kmart 06/30/01
Center Gahanna, OH............
Huntington Plaza 100,671 7,200 107,871 24.8 100.0 Kroger 10/31/01
Huntington, WV................
Indian Mound Plaza 16,600 16,600 72.3 N/A
Heath, OH.....................
Kmart Shopping Center 91,657 38,509 130,166 100.0 Kmart 11/30/03
Puyallup, WA.................. 77.9
Knox Village Square 173,033 34,400 207,433 100.0 94.8 Big Bear 01/29/13
Mount Vernon, OH.............. JC Penney 05/31/08
Kmart 01/31/18
Lexington Parkway Plaza 152,852 57,298 210,150 100.0 86.1 Goody's 03/31/00
Lexington, NC.................. Ingles 09/25/10
Wal-Mart 12/29/09
Liberty Plaza 29,000 29,700 58,700 100.0 81.1 Food Lion 05/31/03
Morristown, TN................
Linden Corners 80,000 10 80,010 100.0 100.0 Hills 01/31/14
Buffalo, NY...................
Logan Place 89,848 24,900 114,748 100.0 83.1 Houchens 11/30/08
Russellville, KY.............. Wal-Mart 03/31/08
Loyal Plaza 174,617 138,858 313,475 100.0 75.2 Bi Lo 05/31/12
Loyalsock, PA (3)............. Family Toy 01/31/03
Warehouse
Kmart 08/31/01
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS SHORES LEASE
PROPERTY/LOCATION GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Marion Towne Centre 102,913 53,630 156,543 100.0 89.3 Piggly Wiggly 08/31/12
Marion, SC................. Wal-Mart 06/19/12
Middletown Plaza 77,000 53,125 130,125 100.0 23.5 Hills 02/28/02
Middletown, OH.............
Mill Run 125,357 46,862 172,219 100.0 100.0 Lowe's 12/31/14
Columbus, OH...............
Monroe Shopping Center 64,746 28,450 93,196 100.0 88.8 Ingles 11/30/02
Madisonville, TN........... Wal-Mart 01/31/03
Morgantown Commons 200,187 33,278 233,465 100.0 78.1 SuperKmart 02/28/21
Morgantown, WV............. OfficeMax 08/31/11
Phar-Mor 06/30/06
Morgantown Plaza 74,540 28,824 103,364 100.0 100.0 Hills 10/31/97
Star City, WV..............
Morningside Plaza 33,896 41,221 75,117 100.0 80.8 Kash N'Karry 06/30/05
Dade City, FL..............
Mount Vernon Plaza 49,932 12,759 62,691 49.9 17.4 Heilig-Meyers 09/12/06
Mt.Vernon, OH..............
New Boston Mall 84,180 44,550 128,730 100.0 94.6 Kmart 11/30/03
Portsmouth, OH.............
Newberry Square Shopping 104,588 22,240 126,828 100.0 100.0 Wal-Mart 09/30/07
Center - Newberry, SC...... Winn Dixie 12/09/07
Newport Plaza II 84,180 14,800 98,980 100.0 78.4 Kmart 06/13/04
Newport, KY (3)............
North Horner 22,486 17,650 40,136 100.0 47.9 Food Lion 09/11/02
Sanford, NC................
Northtowne Square 42,130 29,500 71,630 100.0 90.8 Kroger 09/30/01
Chattanooga, TN............
Ohio River Plaza 105,857 43,136 148,993 100.0 94.4 Big Bear 11/18/09
Gallipolis, OH............. Hills 01/31/20
Pea Ridge 110,192 39,860 150,052 100.0 87.5 Kmart 10/31/04
Huntington, WV............. Kroger 02/29/00
Perdido Point Plaza 36,987 9,600 46,587 100.0 100.0 Delchamps 04/30/05
Pensacola, FL..............
Piedmont Plaza 197,402 51,650 249,052 84.7 96.9 Food Lion 12/02/09
Greenwood, SC.............. Lowe's 12/31/09
Wal-Mart 09/29/09
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS STORES LEASE
PROPERTY/LOCATION GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Plaza Vista Mall 161,043 53,229 214,272 100.0 95.5 JC Penney 02/28/04
Sierra Vista, AZ .......... Wal-Mart 10/14/11
Prestonsburg Village 107,715 67,632 175,347 100.0 100.0 Wal-Mart 09/30/05
Center Prestonsburg, KY.... Winn Dixie 01/30/06
Rend Lake Shopping Center 96,913 24,470 121,383 100.0 95.1 Big John's 10/31/99
Benton, IL................. Wal-Mart 01/31/07
Rhea County Shopping 71,952 38,050 110,002 100.0 91.6 Ingles 02/28/03
Center - Dayton, TN...... Wal-Mart 09/30/03
River Edge Plaza 108,829 27,396 136,225 100.0 92.1 Food City 11/01/08
Sevierville, TN (3)........ Wal-Mart (1) 09/30/03
River Valley Plaza 153,000 58,865 211,865 100.0 97.9 Big Bear 05/31/09
Lancaster, OH.............. Target 10/03/14
Roane County Plaza 124,848 35,350 160,198 100.0 87.8 Goody's 02/28/00
Rockwood, TN............... Ingles 02/28/10
Wal-Mart 01/31/10
Scott Town Plaza 55,134 22,500 77,634 100.0 50.5 Fashion Bug 03/31/97
Bloomsburg, PA............. Kmart 08/31/01
Shady Springs Plaza 37,232 30,345 67,577 100.0 79.2 Kroger 09/30/08
Beaver, WV.................
Sidney Shopping Center 50,071 50,071 100.0 Grand Union 07/31/19
Sidney, NY.................
Southside Plaza 147,693 24,600 172,293 100.0 100.0 Food Lion 12/17/11
Sanford, NC................ Wal-Mart 12/29/11
Springfield Commons West 180,167 180,167 100.0 Big Bear 03/31/15
Springfield, OH............. Lowe's 01/31/15
Steamboat Bend 81,272 25,420 106,692 100.0 86.3 Hannibal 08/25/02
Hannibal, MO............... Farm &
Home Supply
Wetterau 10/31/00
Stewart Plaza 30,979 27,069 58,048 100.0 83.4 Kroger 10/31/99
Mansfield, OH..............
Sunbury Plaza 91,131 49,265 140,396 100.0 83.8 Acme 08/31/98
Sunbury, PA................ Bi-Lo 08/31/98
Sycamore Square 66,304 28,500 94,804 100.0 55.1 Food Lion 01/20/10
Ashland City, TN........... Wal-Mart 11/11/08
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
% OF % OF
ANCHORS STORES TOTAL ANCHORS STORES LEASE
PROPERTY/LOCATION GLA GLA GLA LEASED LEASED ANCHOR(S) EXPIRATION (4)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Target Plaza 97,000 97,000 100.0 Target 11/29/14
Heath, OH..................
Torresdale Plaza 130,882 11,400 142,282 100.0 Acme (2) 01/31/97
Philadelphia,PA........... Kmart 11/30/01
Twin County Plaza 122,273 38,440 160,713 100.0 95.8 Ingles 01/31/07
Galax, VA.................. Wal-Mart 12/31/07
Village Plaza 450,870 40,100 490,970 100.0 96.0 Bi-Lo 11/30/08
Augusta, GA................ Goody's 11/30/98
Home Quarters 01/31/09
OfficeMax 01/31/02
Sam's Club 07/11/08
Wal-Mart 10/28/08
Village Plaza 24,510 31,197 55,707 100.0 95.5 Falley's Food 10/31/00
Manhattan, KS.............. 4 Less
Village Square 11,624 28,450 40,074 100.0 100.0 IGA 07/31/06
Kutztown, PA............... Supermarket
Vincennes 108,682 108,682 100.0 Kmart 06/30/99
Vincennes, IN (3).......... Kroger 12/31/98
Wal-Mart Plaza 155,198 45,305 200,503 100.0 66.8 All About 11/30/10
Springfield, OH............ Sports
. Wal-Mart 10/27/15
Walnut Cove 32,000 26,450 58,450 100.0 100.0 Ingles 03/31/06
Walnut Cove, NC............
Walterboro Plaza 99,730 32,400 132,130 100.0 95.6 Piggly Wiggly 09/09/10
Walterboro, Wal-Mart 06/23/09
SC........................
Westpark Plaza 31,170 24,152 55,322 100.0 100.0 Kroger 03/31/08
------ ------ ------ ----- -----
Carbondale, IL (3).........
COMPANY OWNED
PROPERTIES.................9,270,357 2,849,636 12,119,993 98.3 87.7
========== ========= ========== ==== ====
</TABLE>
(1) Wal-Mart vacated the store on September 30, 1995 but continues to pay
rent in accordance with their lease agreement.
(2) Acme vacated the store upon expiration of its lease on January 31,
1997.
(3) Ground lease.
(4) Lease expiration dates do not consider options to renew.
15
<PAGE> 16
(c) Single Tenant Retail Properties
Seventeen of the Properties are Single Tenant Retail Properties net
leased to either Kmart (10), Lowe's (4), Walgreens (2) or Grand Union (1). The
Single Tenant Retail Properties range in size from 13,000 to 125,000 square feet
of GLA and are located in the following states: Pennsylvania (5), Ohio (3),
Indiana (2), Massachusetts (2), Kentucky (1), Nebraska (1), New York (1),
Virginia (1) and Washington (1). The location, general character and tenant
information with respect to the Single Tenant Retail Properties at December 31,
1996 are set forth below in the Summary of Single Tenant Retail Properties
schedule.
SUMMARY OF SINGLE TENANT RETAIL PROPERTIES AT DECEMBER 31, 1996
---------------------------------------------------------------
<TABLE>
<CAPTION>
% LEASE
TENANT/LOCATION TOTAL GLA LEASED EXPIRATION (3)
- --------------------------------- --------- ------ --------------
<S> <C> <C> <C>
Kmart/Alliance, NE (2) .......... 40,800 100.0 03/31/08
Lowe's/Altoona, PA .............. 121,148 100.0 07/31/14
Kmart/Bloomington, IN ........... 87,405 100.0 11/30/05
Grand Union/ Chatham, NY ........ 21,756 100.0 07/31/19
Kmart/ Clifton Heights, PA ...... 87,543 100.0 10/31/04
Lowe's/ Columbus, OH ............ 125,357 100.0 12/31/14
Kmart/ Fairhaven, MA ........... 91,653 100.0 11/30/02
Kmart/ Feasterville, PA ......... 94,500 100.0 06/30/98
Kmart/ Langhorne, PA ............ 95,810 100.0 11/30/99
Kmart/ Leechburg, PA ............ 85,909 100.0 05/31/06
Walgreens/ Louisville, KY ....... 13,000 100.0 01/31/25
Lowe's/ Marion, OH .............. 72,507 100.0 07/31/13
Walgreens/New Albany, IN ........ 13,000 100.0 09/30/24
Kmart/ Norfolk, VA (2) .......... 120,997 100.0 07/30/99
Kmart/ Seekonk, MA. (1) (2) ..... 105,900 100.0 06/30/97
Lowe's/ Wooster, OH ............. 71,463 100.0 07/31/13
Kmart/ Yakima, WA ............... 116,799 100.0 09/30/99
--------- -----
TOTAL COMPANY OWNED PROPERTIES 1,365,547 100.0
========= =====
</TABLE>
(1) Kmart closed their store on February 12, 1995 but continues to pay rent in
accordance with their lease agreement.
(2) Ground lease.
(3) Lease expiration dates do not consider options to renew.
16
<PAGE> 17
(d) Ground Leases
Eight of the Properties are subject to long-term ground leases where a
third party owns the underlying land and has leased the land to the Company. The
expiration dates of the ground leases (assuming the exercise by the Company of
all of its options to extend the terms of such leases) range from May 2038 to
April 2082. The Company pays rent, ranging from $1,500 to $60,000 per annum, for
the use of the land and generally is responsible for the costs and expenses
associated with maintaining the building and improvements thereto. In addition,
some of the ground leases provide for sharing of the percentage rents collected,
if any. At the end of the lease term, unless extended, the land, together with
all improvements thereon, will revert to the land owner without compensation to
the lessee.
(e) Properties Subject to Indebtedness
To finance the acquisition and development of Properties, the Company has
entered into mortgage loans and a credit facility. A description of all such
loans is provided below.
THE NOMURA LOAN ($181.0 MILLION)
- --------------------------------
The Nomura loan is held by Nomura and is evidenced by four notes
(collectively, the "Notes" and individually, a "Note"): (i) two notes, each in
the principal amount of $40.0 million, one of which bears interest at the rate
of 6.995% per annum and matures on February 1, 1999, and the other of which
bears interest at the rate of 7.505% per annum and matures on February 1, 2003;
(ii) a note in the principal amount of $76.0 million which bears interest at the
rate of 7.625% per annum and matures on August 1, 2000; and (iii) a note in the
principal amount of $25.0 million which bears interest at the rate of 6.935% per
annum and matures on October 1, 2000. Each of the Notes provides for monthly
payments of interest only with the principal amount due on maturity. The
borrowers under the Nomura loan are Holdings, Centers and GCLP (collectively,
the "Borrowers").
Each Note prohibits prepayment (other than upon casualty or condemnation),
except that the Note executed by Holdings which matures on February 1, 1999 may
be prepaid during the last six months of its term and the other three Notes may
be prepaid during the last 12 months of their respective terms.
The Nomura loan is a non-recourse loan. Payment of principal and interest
on the Nomura loan is secured by first mortgage liens on 56 Properties (the
"Nomura Properties"), 26 of which are owned by Holdings, 29 of which are owned
by Centers and l of which is owned by GCLP, and a pledge of the partnership
interests in each of the Borrowers, which interests are held by an affiliate of
GRT. These mortgages are cross-collateralized and cross-defaulted.
The Nomura loan contains customary representations, covenants and events of
default. In addition, it requires that (i) the Borrowers comply with certain
affirmative and negative covenants, including covenants restricting the
incurrence of additional indebtedness on the Nomura Properties; (ii) each
Borrower establish and maintain certain reserve funds; and (iii) the general
partner of each Borrower have an independent director whose vote will be
required for certain specified actions, including the making of any bankruptcy
filing by the respective Borrower. Neither GRT nor the Operating Partnership is
a party to, and neither has guaranteed any amount in respect of, the Nomura
Loan, other than certain limited indemnification obligations primarily relating
to potential environmental liabilities and the pledge of partnership interests
as described above.
The Nomura loan also provides that the Nomura Properties will be managed by
the Company or a third party selected by the Company, provided that the Company,
or any other party then managing such property, may be removed as manager of
such properties if an event of default occurs under such loan or if the ratio of
the sum of (i) the net operating income of the Nomura Properties during the
preceding 12 calendar months and (ii) all interest earned during such period on
U.S. government obligations delivered to Nomura as substituted collateral for
the Nomura Properties released (as described in the paragraph above), decreases
below an amount equal to 75.0% of the net operating income for the Nomura
Properties determined as of September 30, 1993 (approximately $23.8 million) for
three consecutive months.
17
<PAGE> 18
THE MORGANTOWN LOAN ($50.2 MILLION)
- -----------------------------------
The Morgantown loan is held by Connecticut General Life Insurance Company
("CIGNA") and bears interest at a rate equal to 7.500% per annum and is payable
interest only until maturity on April 1, 1999. Repayment of the Morgantown loan
is principally secured by first mortgage liens on Morgantown Mall and Morgantown
Commons.
THE CIGNA LOAN ($50.0 MILLION)
- ------------------------------
The CIGNA loan is secured by first mortgage liens on 10 Properties, bears
interest at a rate equal to 7.470% per annum and is payable interest only until
maturity on October 26, 2002. These mortgages are cross-collateralized and
cross-defaulted.
THE CREDIT FACILITY ($175.0 MILLION)
- ------------------------------------
The Company has a credit facility with The Huntington National Bank
pursuant to an Amended and Restated Loan Agreement dated as of June 30, 1995, as
amended, with The Huntington National Bank and Key Bank, as agents (the
"Agents") and a consortium of banks (the "Credit Facility") and pursuant to
which the Company can borrow up to $175.0 million. In November 1996, the Company
entered into a Second Amendment to the Credit Facility agreement which modified
certain of the provisions of such agreement, as well as provided for additional
covenants relating primarily to the Company's development activity and venture
investments. As of December 31, 1996, $103.0 million had been advanced to the
Company. Subject to certain limitations, the Credit Facility may be drawn upon
for tenant improvements, acquisitions, working capital and general corporate
purposes. All borrowings under the Credit Facility are unsecured and bear
interest at variable rates ranging from LIBOR plus 150 basis points to LIBOR
plus 250 basis points. The variable rate is set quarterly based on the Company's
leverage ratio of total consolidated liabilities ($614.1 million at December 31,
1996) to consolidated tangible net worth ($335.3 million at December 31, 1996).
Consolidated tangible net worth is defined as the Company's total assets less
total liabilities and intangible assets. At December 31, 1996 the annual
interest rate was LIBOR plus 175 basis points (7.250%). Interest only is payable
monthly until maturity on June 30, 1998. On July 14, 1995, the Company entered
into a rate protection agreement under which the obligor has agreed to reimburse
the Company to the extent interest expense increased as a result of an increase
in LIBOR above 8.500% per annum, and the Company has agreed to reimburse the
obligor to the extent interest expense decreased as a result of a decrease in
LIBOR below 4.500% per annum. The Credit Facility, as amended, contains
customary covenants, representations, warranties and events of default,
including maintenance of a specified minimum net worth, loan to value ratios,
project costs to asset value ratios, total debt to asset value ratios and EBITDA
to total debt service, net operating income requirements on the negative pledge
pool, restrictions on the incurrence of additional indebtedness, and approval of
anchor leases with respect to the properties which are part of the negative
pledge pool for the Credit Facility.
THE 1996 ACQUISITION PROPERTY LOANS ($159.7 MILLION)
- ----------------------------------------------------
In January 1996 the Company acquired Delaware Community Plaza. In October
1996 the Company acquired 22 Community Shopping Centers from Retail Property
Investors, Inc. (RPI). In these transactions the Company assumed 17 mortgage
loans and financed six of the properties under a $34.4 million bridge facility.
18
<PAGE> 19
The following schedule summarizes these loans at December 31, 1996 (in
thousands):
<TABLE>
<CAPTION>
BALANCE
DECEMBER 31, INTEREST PAYMENT
PROPERTY NAME LOCATION 1996 RATE TERMS MATURITY
- ------------------------------------ --------------- ------------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Delaware Community Plaza Delaware, OH $8,380 7.875% (a) Apr. 1, 2016
RPI assumed loans:
Applewood Village Fremont, OH 3,797 9.000% (a) Jun. 1, 2010
Artesian Square Martinsville, IN 5,340 8.000% (b) May 1, 2000
Audubon Village Henderson, KY 4,350 8.750% (a) Jul. 1, 2000
Aviation Plaza Oshkosh, WI 6,723 8.000% (a) Jun. 1, 1999
Barren River Plaza Glasgow, KY 8,101 8.750% (a) Jun. 10, 2001
Crossing Meadows Onalaska, WI 9,375 8.000% (a) Jun. 1, 1999
Crossroads Center Knoxville, TN 6,590 8.000% (b) Jul. 1, 2000
Cumberland Crossing Jacksboro, TN 5,137 8.750% (a) Jun. 10, 2001
East Pointe Plaza Columbia, SC 11,111 8.750% (a) Jun. 10, 2001
Lexington Parkway Plaza Lexington, NC 7,538 9.125% (a) Mar. 1, 2000
Logan Place Russellville, KY 2,415 8.000% (b) May 1, 2000
Marion Towne Center Marion, SC 5,740 7.375% (a) Jul. 1, 2002
Piedmont Plaza Greenwood, SC 10,125 8.000% (b) Mar. 1, 2000
Roane County Plaza Rockwood, TN 5,123 9.125% (a) Mar. 1, 2000
Southside Plaza Sanford, NC 6,547 8.000% (a) Nov. 5, 1997
Village Plaza Augusta, GA 18,887 8.000% (a) Nov. 1, 1999
RPI bridge facility: 34,372 (c) (b) Oct. 17, 1997
College Plaza Bluefield, VA
Cross Creek Plaza Beaufort, SC
Cypress Bay Village Morehead City, NC
Franklin Square Spartanburg, SC
Sycamore Square Ashland City, TN
Walterboro Plaza Walterboro, SC
--------
$159,651
========
</TABLE>
(a) The loan requires monthly payments of principal and interest.
(b) The loan requires monthly payments of interest only.
(c) The loan bears interest at LIBOR plus 175 basis points (7.375% at December
31, 1996) and can be extended for a year.
THE CONSTRUCTION LOANS
- ----------------------
Georgesville Square Loan
In September 1996, the Company entered into a construction loan to finance
the development of Georgesville Square, a Community Shopping Center in Columbus,
Ohio pursuant to which the Company has a right to borrow $16.9 million. The
construction loan is due October 1, 1999, is subject to two extensions of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.625% at December 31, 1996). As of December 31, 1996, the Company
borrowed $13.5 million under the construction loan.
Meadowview Square Loan
In October 1996, the Company entered into a construction loan to finance
the development of Meadowview Square a Community Shopping Center in Kent, Ohio,
pursuant to which the Company has a right to borrow $9.8 million. The
construction loan is due November 1, 1999, is subject to two extension of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.625% at December 31, 1996). As of December 31, 1996, the Company had
borrowed $7.1 million under the construction loan.
19
<PAGE> 20
Morgantown Commons Loan
In June 1995, the Company entered into a construction loan to finance the
expansion of Morgantown Commons, a Community Shopping Center in Morgantown, West
Virginia, pursuant to which the Company has a right to borrow $10.5 million. The
construction loan is due June 1, 1998 and is payable monthly, interest only, at
LIBOR plus 200 basis points (7.625% at December 31, 1996). As of December 31,
1996, the Company had borrowed $9.5 million under the construction loan.
Promissory Notes
- ----------------
The Georgesville Square Loan
The Company acquired in 1995 parcels of land located at Georgesville Road,
Columbus, Ohio for the construction and development of a Community Shopping
Center. One of the parcels of land was acquired subject to a promissory note.
The $1.6 million promissory note was due October 1996 and required monthly
payments of interest and principal beginning January 1996 at a fixed rate of
8.000% per annum. The note was prepaid with no penalty with proceeds from the
Credit Facility on February 2, 1996.
The Meadowview Square Loan
The Company acquired in August 1994 and December 1995 parcels of land
located in Kent, Ohio for the construction and development of a Community
Shopping Center. One of the parcels of land was acquired subject to a promissory
note in the amount of $870,000 which was due in full and paid in March 1996.
ITEM 3. LEGAL PROCEEDINGS
In December 1994, the Estate of Amos Ginor ("Ginor") and Langhorne Plaza
Associates ("Langhorne") commenced a lawsuit, The Estate of Amos Ginor, et al.
v. Dennis Landsberg, et al., against various defendants, including Holdings and
GRT (collectively, the "Glimcher Entities"), that was pending in the United
States District Court for the Southern District of New York. Thereafter, the
Glimcher Entities filed motions for summary judgment which, on December 16,
1996, were granted in their entirety.
On January 26, 1996, ACPA Fund II, Ltd., et al. filed a lawsuit against
Dennis Landsberg, et al., including as defendants the Glimcher Entities that was
pending in the United States District Court for the Southern District of Texas,
Houston Division. Venue of the lawsuit was transferred to the United States
District Court for the Southern District of New York. The allegations contained
in the complaint are similar to the allegations contained in the Ginor lawsuit.
The Glimcher Entities filed motions for summary judgment on the Ginor lawsuit,
which were granted in their entirety on December 16, 1996.
The Company was previously advised that the United States Environmental
Protection Agency (the "EPA") is likely to include its Stewart Plaza in
Mansfield, Ohio as part of a much larger National Priority List site, designated
by the EPA for remedial activities under the Federal hazardous site cleanup
program. This action is the result of the discovery of perchlorethylene (a
solvent used predominantly in cleaning) in drinking water wells located near the
property. In accordance with Federal law, the Company may, to some extent be
liable for costs associated with remedial activities which might be performed in
connection with the site. However, no contamination has been discovered on the
property itself and the Company believes its liability may be limited by the
fact that the property does not appear to be a source of the contamination on
the site. In the fourth quarter of 1996, the Company was advised by legal
counsel that the investigation will no longer include Stewart Plaza.
20
<PAGE> 21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of fiscal year
1996.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
(a) Market Information
The Shares have been approved for listing and are currently traded on the
New York Stock Exchange ("NYSE") under the symbol "GRT." On March 12, 1997, the
last reported sales price of the Shares on the NYSE was $20.125 The following
table shows the high and low sales prices for the Shares on the NYSE for the
1996 and 1995 quarterly periods indicated as reported by the New York Stock
Exchange Composite Tape and the cash distributions per Share paid by GRT with
respect to each such periods.
<TABLE>
<CAPTION>
DISTRIBUTIONS
QUARTER ENDED HIGH LOW PER SHARE
------------- ---- --- ---------
<S> <C> <C> <C>
March 31, 1995 $21.875 $19.500 $0.4675
June 30, 1995 21.375 19.125 0.4808
September 30, 1995 22.250 19.875 0.4808
December 31, 1995 21.125 16.875 0.4808
March 31, 1996 17.750 15.250 0.4808
June 30, 1996 17.500 16.250 0.4808
September 30, 1996 19.625 16.250 0.4808
December 31, 1996 22.000 19.000 0.4808
</TABLE>
(b) Holders
The number of holders of record of the Shares was 900 as of March 12, 1997.
(c) Distributions
Future Share distributions paid by GRT will be at the discretion of the
trustees of GRT and will depend upon the actual cash flow of GRT, its financial
condition, capital requirements, the annual distribution requirements under the
REIT provisions of the Code and such other factors as the trustees of GRT deem
relevant.
GRT has implemented a Distribution Reinvestment and Share Purchase Plan
under which its shareholders or Operating Partnership unit holders may elect to
purchase additional Shares and/or automatically reinvest their distributions in
Shares. In order to fulfill its obligations under the plan, GRT may purchase
Shares in the open market or issue Shares that have been registered and
authorized specifically for the plan. As of December 31, 1996 250,000 Shares
were authorized of which 14,959 Shares have been issued.
(d) Recent Sales of Unregistered Securities
The information required herein, is set forth under the Developments,
Acquisitions and Renovations during the 1996 Fiscal Year.
21
<PAGE> 22
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth Selected Financial Data for the Company and
for the Company's predecessor, Glimcher Properties. This information should be
read in conjunction with the financial statements of the Company and Glimcher
Properties and Management's Discussion and Analysis of the Financial Condition
and Results of Operations, each included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
COMPANY GLIMCHER PROPERTIES
FOR THE YEARS ENDED DECEMBER 31, FOR THE YEARS ENDED DECEMBER 31,
-------------------------------- -------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS):
Revenue:
Minimum rents............................. $ 87,660 $ 79,323 $ 67,704 $ 32,528 $26,631
Percentage rents.......................... 2,896 2,921 3,397 1,260 832
Tenant recoveries......................... 22,384 19,514 17,688 7,817 6,598
Other................................... 4,738 2,490 2,003 1,524 726
------- -------- -------- ------- -------
Total revenues........................ 117,678 104,248 90,792 43,129 34,787
------- -------- -------- ------- -------
Operating expenses:
Real estate taxes......................... 10,233 8,588 7,778 3,395 2,707
Recoverable operating expenses............ 13,893 11,920 11,635 5,926 4,997
------- -------- -------- ------- -------
24,126 20,508 19,413 9,321 7,704
Provision for credit losses............... 2,072 1,620 2,203 1,556 969
Other operating expenses.................. 1,014 578 462 516 499
------- -------- -------- ------- -------
Total operating expenses................ 27,212 22,706 22,078 11,393 9,172
------- -------- -------- ------- -------
Property net operating income......... 90,466 81,542 68,714 31,736 25,615
Depreciation and amortization............... 22,418 20,560 17,599 7,888 6,851
General and administrative.................. 9,371 6,409 6,182 2,323 1,724
Gain on sales of outparcels................. 1,506 1,017 281
Interest income............................. 506 649 655 1,208 1,742
Interest expense:
Interest expense.......................... 28,521 25,439 22,217 23,764 20,729
Amortization of interest rate buydow...... 776 776 711
Non-recurring transfer cost................. 2,055
Income from unconsolidated entities, net.... 42
Minority interest in partnership............ 3,385 3,294 2,137 436
------- -------- -------- ------- -------
Income (loss) before extraordinary items.. 28,049 25,713 18,468 (450) (1,666)
------- -------- -------- ------- -------
Extraordinary item:
Extinguishment of debt-prepayment fees
and write-off of deferred financing cost.. 5,864
------- -------- -------- ------- -------
Net income (loss)........................... 28,049 25,713 12,604 (450) (1,666)
Preferred stock dividends................... 268
------- -------- -------- ------- -------
Net income available to common shareholders. $27,781 $ 25,713 $ 12,604 $ (450) $(1,666)
======= ======== ======== ======= =======
Per Common Share Data:
Income before extraordinary item.......... 1.27 $ 1.27 $ 1.08
Extraordinary item........................ (0.34)
-------- -------- --------
Net income available to common
shareholders ....................... $ 1.27 $ 1.27 $ 0.74
======== ======== ========
Distributions........................... $ 1.9232 $ 1.9099 $ 1.7405
======== ======== ========
BALANCE SHEET DATA (IN THOUSANDS):
Real estate, before accumulated
depreciation........................ $949,138 $696,898 $644,379 $ 351,205 $241,630
Total assets............................. 949,402 669,003 637,084 356,957 253,697
Mortgage notes payable................... 470,929 291,579 268,676 350,123 252,844
Total debt............................... 575,247 324,779 345,348 375,004 260,532
Total shareholders' equity (deficit)..... 269,211 284,691 230,246 (57,816) (34,449)
OTHER DATA:
Funds from operations (2) (in thousands). $ 51,382 $ 46,983 $ 38,686 $ 6,857 $ 4,904
Number of properties (1)................. 113 88 84 27 23
Total GLA (in thousands) (3)............. 18,554 13,154 12,298 6,228 4,336
Occupancy (1) (3)........................ 95.4% 95.6% 95.7% 92.7% 89.6%
</TABLE>
(1) Number of Properties and occupancy are reflective of the Properties that
were open and/or paying rent at the end of the periods.
(2) Management considers funds from operations (FFO) to be a supplemental
measure of the Company's operating performance. FFO, as modified in January
1996 by NAREIT is defined as net income (computed in accordance with
Generally Accepted Accounting Principles (GAAP), less gains or losses from
debt restructuring, plus real estate depreciation and amortization and plus
minority interest in partnerships. FFO does not represent cash generated
from operating activities in accordance with GAAP and is not necessarily
indicative of cash available to fund cash needs. FFO should not be
considered as an alternative to net income as the primary indicator of the
Company's operating performance or as an alternative to cash flow as a
measure of liquidity.
(3) 1996 includes 549,000 square feet of GLA owned by a limited liability
company in which the Company is a 33.3% member.
22
<PAGE> 23
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following should be read in conjunction with the Selected Financial
Data and the Financial Statements of the Company and Glimcher Properties,
including the respective notes thereto, all of which are included in this Form
10-K.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
REVENUES
Total revenues increased 12.9%, or $13.4 million, for the year ended
December 31, 1996. The total revenue increase was $12.2 million after
eliminating the net effect of 1995/1996 non-comparable items totaling $1.1
million. The $12.2 million increase was primarily the result of increased
revenues of $1.2 million at the Mall Properties and $10.9 million at the
Community Shopping Centers.
Minimum rents
Minimum rents increased 10.5%, or $8.3 million, for the year ended
December 31, 1996. The minimum rent increase was $9.2 million after the net
effect of 1995/1996 non-comparable items totaling $880,000. The summary below
identifies the 10.5% increase by its various components.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------------------------
MALL COMMUNITY SHOPPING CENTERS/ PERCENT
PROPERTIES SINGLE TENANT RETAIL PROPERTIES TOTAL TOTAL
---------- ------------------------------- ----- -----
<S> <C> <C> <C> <C>
Same center $0.2 $0.1 $0.3 0.4%
Acquisitions/Developments 0.0 8.9 8.9 11.2
Non-comparable items 0.0 (0.9) (0.9) (1.1)
---- ---- ---- ----
After non-comparable items $0.2 $8.1 $8.3 10.5%
==== ==== ==== ====
</TABLE>
Percentage rents
Percentage rents remained constant at $2.9 million for both years ended
December 31, 1996 and 1995. Of the $2.9 million in percentage rents for 1996,
$1.6 million was earned at the Mall Properties and $1.3 million at the Community
Shopping Centers.
Tenant recoveries
Tenant recoveries increased 14.7%, or $2.9 million, for the year ended
December 31, 1996. Same center properties accounted for $1.7 million of the $2.9
million increase and related primarily to increased real estate tax assessments
and snow removal costs. Acquisitions and openings of new developments during
1995 and 1996 accounted for $1.2 million of the $2.9 million increase. The
recovery ratio for the year ended December 31, 1996 was 91.6% (after eliminating
the effect of the 1995/1996 non-comparable items) compared to 93.4% for the year
ended December 31, 1995 (after eliminating the effect of the 1995/1996
non-comparable items).
Other revenues
The $2.2 million increase in other revenues was primarily the result of
the $2.3 million incentive management fee relating to net operating cash flow
the Company earned during the escrow period of its acquisition of the RPI
Properties.
23
<PAGE> 24
OPERATING EXPENSES
Total operating expenses increased 19.8%, or $4.5 million, for the year
ended December 31, 1996. Recoverable expenses increased $3.6 million, the
provision for credit losses increased $450,000 and other operating expenses
increased $440,000.
Recoverable expenses
The $3.6 million increase in recoverable expenses was the result of a
$1.6 million increase in real estate taxes resulting from reassessments and a
$2.0 million increase in recoverable operating expenses. Of the $3.6 million
increase, $1.3 million relates to acquisitions and developments opened in 1995
and 1996, $1.6 million relates to the Mall Properties and $700,000 relates to
the Community Shopping Centers.
Provision for credit losses
The provision for credit losses was $2.1 million and represented 1.8%
of total revenues for the year ended December 31, 1996, compared to 1.6% of
total revenues for the year ended December 31, 1995.
Other operating expenses
Other operating expenses increased $440,000. The majority of this
increase relates to marketing costs.
GENERAL AND ADMINISTRATIVE
Since June 1995 the Company increased its corporate staff from 75
employees to 84 employees as of December 31, 1995 and then to 110 employees as
of December 31, 1996. The staff increases include several key officer positions
in leasing and corporate management. This growth in corporate staff was
initiated to accomplish the Company's development and acquisition growth
strategy and enhanced core portfolio support. Primarily, as a result of these
staff additions, general and administrative expense increased $3.0 million in
1996. The 1996 general and administrative expense increase was also affected by
charges for developments not pursued which increased $500,000 for the year.
The Company's focus on new developments has also contributed to
increased general and administrative expense to support future revenue growth.
In an effort to offset a portion of corporate general and administrative expense
the Company formed GDC on October 16, 1996, and transferred 51 employees in the
construction, development, leasing and legal departments to GDC. The GDC staff
will provide services for a fee, to the Company, to ventures in which the
Company has an ownership interest and to third parties. GDC, an unconsolidated
non-qualified REIT subsidiary, is permitted to earn non-qualified revenues but
the income from such services will be subject to federal income taxes. The
Company will also receive management fees for the services provided by its
operations staff to ventures.
GAIN ON SALES OF OUTPARCELS
During the year ended December 31, 1996, the Company completed the sale
of three parcels of land which resulted in a gain of $1.5 million. There were no
sales of land during the year ended December 31, 1995.
INTEREST EXPENSE/CAPITALIZED INTEREST
For the year ended December 31, 1996 interest expense increased 12.1%,
or $3.1 million. The increase was due to increased debt levels partially off-set
by a lower effective interest rate. The effective interest rate and the weighted
average debt balance for the year ended December 31, 1996 were 7.46% and $421.7
million, respectively, compared to 7.76% and $333.0 million, respectively, for
the corresponding period of 1995. During 1996 and 1995, interest capitalized on
development projects totaled $3.4 million, and $690,000, respectively.
24
<PAGE> 25
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
REVENUES
Total revenues increased 14.8%, or $13.5 million, for the year ended
December 31, 1995. The total revenue increase was $11.6 million after
eliminating the effect of 1995 non-comparable items totaling $1.9 million. The
$11.6 million increase was primarily the result of increased revenues of $1.4
million at the Mall Properties and $10.2 million at the Community Shopping
Centers.
Minimum rents
Minimum rents increased 17.2%, or $11.6 million, for the year ended
December 31, 1995. The minimum rent increase was $10.3 million after eliminating
the effect of 1995 non-comparable items totaling $1.3 million. The summary below
identifies the 17.2% increase by its various components.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
---------------------------------------------------------
MALL COMMUNITY SHOPPING CENTERS/ PERCENT
PROPERTIES SINGLE TENANT RETAIL PROPERTIES TOTAL TOTAL
---------- ------------------------------- ----- -----
<S> <C> <C> <C> <C>
Same center $ 0.8 $(0.1) $ 0.7 1.1%
Acquisitions/Developments 0.0 9.6 9.6 14.2
Non-comparable items 0.4 0.9 1.3 1.9
----- ----- ----- -----
After non-comparable items $ 1.2 $10.4 $11.6 17.2%
===== ===== ===== =====
</TABLE>
Percentage rents
The $480,000 decrease in percentage rents was mainly the result of
decreases at the Mall Properties. The amount of percentage rents recorded in
1994 included revenue of $290,000 relating to adjustments to certain tenant
receivables. Additionally, actual sales reported by an anchor tenant subsequent
to year-end 1994 were lower than originally estimated, resulting in a reduction
to income during 1995.
Tenant recoveries
Tenant recoveries increased 10.3%, or $1.8 million, for the year ended
December 31, 1995. The tenant recoveries increase was $1.5 million after
eliminating the effect of 1995 non-comparable items totaling $350,000. Same
center Properties accounted for $730,000 of the $1.5 million increase and
acquisitions and openings of new developments during 1995 and 1994 accounted for
$740,000 of the $1.5 million increase. The recovery ratio for the year ended
December 31, 1995 was 93.4% (after eliminating the effect of the 1995
non-comparable item) compared to 91.1% for the year ended December 31, 1994.
Other revenues
The $490,000 increase in other revenues was the result of increases in
temporary tenant income from the Mall Properties of $300,000 and the effect of a
1995 $180,000 non-comparable item relating to the sale of the interest rate
protection agreement on the Company's credit facility.
OPERATING EXPENSES
Total operating expenses increased 2.8%, or $630,000, for the year
ended December 31, 1995. Recoverable expenses increased $1.1 million, the
provision for credit losses decreased $580,000 and other operating expenses
increased $120,000.
Recoverable expenses
The $1.1 million increase in recoverable expenses was the result of an
increase of $810,000 in real estate taxes and a $280,000 increase in recoverable
operating expenses. All of the $1.1 million increase relates to acquisitions and
developments opened in 1995 and 1994.
25
<PAGE> 26
Provision for credit losses
The provision for credit losses was $1.6 million and represented 1.6%
of total revenues for the year ended December 31, 1995, compared to 2.4% of
total revenues for the year ended December 31, 1994.
Other operating expenses
The $120,000 increase in other operating expenses relates primarily to
acquisitions and developments opened in 1995 and 1994.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased $230,000 to 6.2% of total
revenues for the year ended December 31, 1995. The general and administrative
expense increase was $400,000 after the net effect of 1994/1995 non-comparable
items totaling $170,000 relating to litigation costs and non-cash compensation
expense to reflect the value of Operating Partnership units. The 1995 general
and administrative expense increase was due primarily to staff expansion.
INTEREST EXPENSE/CAPITALIZED INTEREST
For the year ended December 31, 1995 interest expense increased 14.3%,
or $3.3 million. The increase was due to increased debt levels and an increase
in interest rates. The effective interest rate and the weighted average debt
balance for the year ended December 31, 1995 were 7.76% and $333.0 million,
respectively, compared to 7.33% and $328.8 million, respectively, for the
corresponding period of 1994. During 1995 and 1994, interest capitalized on
development projects totaled $690,000 and $2.1 million, respectively.
NON-RECURRING TRANSFER COSTS AND EXTRAORDINARY ITEMS
The year ended December 31, 1994 includes $2.1 million and $5.9 million
of non-recurring transfer costs and extraordinary items, respectively,
associated with the transfer of real estate, including transfer taxes, title
costs, prepayment fees, and the write-off of deferred financing fees relating to
mortgages repaid with the IPO proceeds.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company has several active development, renovation and expansion
projects and will continue to be active in these areas. Future development
projects being considered include those relating to the commitment between the
Company and Nomura discussed below. Management anticipates that the funds
available under its Credit Facility and the Company's plan to utilize
construction financing, long-term mortgage debt and the venture structure to
raise equity and financing for acquisitions and developments and the issuance of
preferred and common stock will provide sufficient capital resources to carry
out the Company's business strategy relative to the acquisitions, renovations,
expansions and developments discussed herein.
At December 31, 1996 the Company's debt to total market capitalization
was 50.1% which is consistent with the current policy of the Company to maintain
this ratio between 40.0% and 60.0%. The Company is reviewing this policy and
other measurements of leverage including debt service coverage and debt to asset
values.
Net cash provided by operating activities for the year ended December
31, 1996 increased $12.8 million, or 31.1%. Net income adjusted for non-cash
items accounted for $3.3 million of this increase, with the remaining $9.5
million increase resulting from changes in assets and liabilities.
Tenant accounts receivable, net, has increased $5.8 million since
December 31, 1995. The primary reasons for the increase relates to year-end
tenant recovery billings for the increased recoverable expenses associated with
new Properties, increased real estate tax assessments and snow removal costs and
a $1.4 million increase in straight-line rents receivable.
26
<PAGE> 27
Net cash used in investment activities for the year ended December 31,
1996 increased $77.5 million. The increase was primarily the result of real
estate development and acquisition activity, including the Company's investment
in unconsolidated entities of $41.1 million.
Net cash provided by financing activities for the year ended December
31, 1996 increased $69.1 million, resulting from additional borrowings and the
issuance of preferred stock and was primarily used to fund the increase in real
estate investments. Cash distributions increased from $41.4 million to $47.1
million.
Property Net Operating Income
The Company's 1996 property net operating income was $90.5 million. The
Properties owned for all of 1996 generated $82.5 million of property net
operating income and consisted of eight Mall Properties, 64 Community Shopping
Centers and 17 Single Tenant Retail Properties. Delaware Community Plaza, owned
for approximately 11 months, generated $1.4 million of property net operating
income. The RPI Properties which were acquired on October 17, 1996, generated
$6.6 million of property net operating income which includes a $2.3 million
incentive management fee relating to net operating cash flow for the period May
14, 1996 through October 16, 1996.
The Company's solid base of assets going into the 1997 year include:
(a) the 88 Properties owned for all of 1996, (b) a full year's operations for
Delaware Community Plaza, Georgesville Square-Phase I and the 22 RPI Properties,
(c) a full year's effect for the Company's one third interest in Johnson City,
and (d) the anticipated openings of Georgesville Square-Phase II, Meadowview
Square, and, The Great Mall of the Great Plains in which the Operating
Partnership has a preferred interest.
ACQUISITION, EXPANSION AND DEVELOPMENT ACTIVITY
The Company continues to be very active in its acquisition, expansion,
and development activities. Its business strategy is to set in place activities
that will allow the Company's assets and cash flow to grow. A brief summary of
the Company's acquisition, expansion and development activity follows:
1996 Acquisitions Activity
- --------------------------
RPI
On October 17, 1996, the Company acquired from RPI 22 Wal-Mart anchored
Community Shopping Centers located in nine central and eastern states and
containing approximately 4.4 million square feet of GLA. The $197.0 million
purchase price was paid for (a) by the assumption by the Company of debt of
approximately $117.1 million, secured by first mortgage loans on 16 of the
Properties, and (b) approximately $79.9 million in cash. The cash portion of the
purchase price was obtained from a $34.4 million bridge loan which is secured by
first mortgage loans on six of the Properties. The bridge loan matures on
October 17, 1997, but can be renewed for an additional year. Loan interest is
payable at the rate of LIBOR plus 175 basis points. The remaining cash purchase
price of $45.5 million was drawn under the Company's Credit Facility.
Delaware Community Plaza
In January 1996, the Company purchased Delaware Community Plaza, a
Community Shopping Center totaling 153,000 square feet of GLA located in
Delaware, Ohio, for $12.5 million. The purchase price was paid for by the
assumption of debt of $7.3 million, secured by the Property, and $5.2 million in
cash.
27
<PAGE> 28
The Mall at Johnson City
The Mall at Johnson City, which totals 549,000 square feet of GLA
located in Johnson City, Tennessee was purchased in mid November 1996 by Johnson
City. The purchase price was $44.0 million and consisted of a first mortgage
loan for $31.0 million, with the balance representing equity from the members.
The loan expires November 15, 1999, however the borrower (Johnson City ) has the
right to extend the loan for one year provided certain extension conditions are
met. The loan interest rate is LIBOR plus 125 basis points (6.813% at December
31, 1996). The members in the venture are Property Acquisition Trust I (PAT I),
an affiliate of Nomura, and the Operating Partnership. The venture's equity was
funded one third by the Operating Partnership and two thirds by PAT I. PAT I's
equity earns a preferred return at varying rates ranging from LIBOR plus 250
basis points to LIBOR plus 500 basis points after which the Operating
Partnership receives its preferred return using the same preferred return rate
structure. After both preferred return positions are satisfied additional
distributions are allocated 50/50. The preferred return rate is capped at 12.0%.
1996 Renovation/Expansions Activity
- -----------------------------------
Grand Central Mall
The renovation and expansion of this Mall Property located in
Parkersburg, West Virginia will bring its GLA to 887,000 square feet. The
addition of a food court and the expansion of the existing cinema to a 37,000
square foot 12-screen cinema were completed and opened in 1996. Additional
expansion of the Mall Property will include an 83,000 square foot Proffitt's
which is projected to open in March 1998. The estimated cost of the Proffitt's
expansion is $5.0 million of which $790,000 was expended as of December 31,
1996.
Indian Mound Mall
The expansion of this Mall Property located in Newark/Heath, Ohio,
will add approximately 120,000 square feet and bring its GLA to 539,000 square
feet. The expansion includes the addition of a 92,000 square foot Sears,
expanding the current cinema from 18,000 square feet to 42,000 square feet and
adding 6,000 square feet of small shops. The opening of the new retail space is
projected for the fall of 1997. The estimated cost of the expansion is $3.9
million of which $1.5 million was expended as of December 31, 1996.
1996 Development Activity
- -------------------------
Georgesville Square
This development is a Community Shopping Center containing 232,000
square feet of GLA located in Columbus, Ohio. The center will be anchored by a
132,000 square foot Lowe's and a 63,000 square foot Kroger, with the balance of
the GLA in small shops. Lowe's opened in October 1996, with Kroger and the small
shops expected to open in the second quarter of 1997. The estimated cost of the
development is $17.4 million, of which $16.9 million will be financed from a
construction loan which bears interest at LIBOR plus 200 basis points (7.625% at
December 31, 1996) and matures October 1, 1999, subject to two extensions of six
months each. As of December 31, 1996, expended dollars total $16.0 million of
which $13.5 million was drawn under the construction loan. Additionally, the
Company recently announced the construction of a 70,000 square foot 16-screen
cinema on one of the center's outparcel lots which is scheduled to open in early
1998. The Company has also expended an additional $3.4 million relating to land
costs for future phases of this development.
28
<PAGE> 29
Meadowview Square
This development is a Community Shopping Center containing 151,000
square feet of GLA located in Kent/Ravenna, Ohio. The center is anchored by a
126,000 square foot Wal-Mart with the balance of the space in small shops.
Wal-Mart opened in January 1997 and the small shops will open later in 1997. The
estimated cost of the development is $11.1 million, of which $9.8 million will
be financed from a construction loan which bears interest at LIBOR plus 200
basis points (7.625% at December 31, 1996) and matures November 1, 1999 subject
to two extensions of six months each. As of December 31, 1996, expended dollars
total $8.6 million of which $7.1 million was drawn under the construction loan.
The Company has also expended an additional $1.7 million relating to land costs
for future phases of this development.
The Great Mall of the Great Plains
The Operating Partnership maintains a 45.0% interest in Great Plains
which owns The Great Mall of the Great Plains, a single level enclosed
super-regional, value and entertainment oriented mall totaling approximately
850,000 square feet of GLA located in Olathe, Kansas (Kansas City, Kansas
metropolitan area). The Property will consist of 10 anchors including a
16-screen cinema, approximately 150 small shop tenants and 20 food court and
kiosk units. The grand opening of the Mall Property is scheduled for August
1997. The Operating Partnership has made a preferred equity contribution to
Great Plains of $34.0 million (Member Preferred Equity) which accrues a
preferred distribution of the greater of (a) 10.0% until the grand opening and
11.0% after the grand opening or (b) the dividend rate on the $34.0 million of
Preferred Shares issued to Nomura on November 27, 1996. The estimated cost of
Phase I of the development is $110.0 million, of which $74.1 million will be
financed from a construction loan which bears interest at LIBOR plus 225 basis
points (7.875% at December 31, 1996) and matures July 1, 1999. As of December
31, 1996 expended dollars total $65.7 million of which $27.3 million was drawn
under the construction loan.
Proposed Developments with Nomura
- ---------------------------------
On September 18, 1996, the Company announced the receipt of a
commitment from Nomura, subject to satisfaction of certain conditions, to
provide equity to the Company and permanent debt financing for three
developments: (a) The Great Mall of the Great Plains discussed above, (b) a
Metro Mall in Elizabeth, New Jersey, and ( c) a Metro Mall in Carson,
California.
Under the Nomura commitment, Nomura would be issued up to $135.0
million of Preferred Shares in the Company of which $34.0 million was issued on
November 27, 1996 in connection with The Great Mall of the Great Plains. The
Preferred Shares would earn dividends based upon one of the following two
dividend options available to the Company: (a) a floating rate at the 90 day
LIBOR, reset quarterly, plus 285 basis points (8.350% at December 31, 1996); or,
(b) a four year fixed rate which can be set any time during the year after the
issuance of Preferred Shares for a development project equal to the five year
U.S. Treasury Security with approximately four years remaining plus 285 basis
points (8.980% at December 31, 1996). After four years this fixed rate would be
converted to the terms described above in clause (a). The dividend rate on the
$34.0 million Preferred Shares is based on the terms described above in clause
(a), however the Company can elect to proceed under the terms described in
clause (b) at anytime during the year after the issue date. The dividend payment
obligation and the redemption of the Preferred Shares issued is secured by a
pledge by the Company of its corresponding preferred equity interests in the
Operating Partnership which totals $34.0 million as of December 31, 1996.
Beginning in the sixth year after the Preferred Shares are issued, the Preferred
Shares are convertible at the option of Nomura to Shares of the Company at
varying discount rates from the then current market price ranging between 70.0%
and 90.0%; however, the Company may redeem the Preferred Shares at any time,
prior to conversion, at its option without any penalty or premiums.
29
<PAGE> 30
The proceeds from the remaining $101.0 million Nomura commitment to
purchase Preferred Shares would be invested by the Company in the Elizabeth and
Carson projects as Member Preferred Equity. The Member Preferred Equity would be
entitled to receive a preferred yield equal to the greater of (a) 10.0% until
the grand opening and 11.0% thereafter or (b) the dividend yield on the
Preferred Shares. The Member Preferred Equity yield is cumulative and payable
from the cash flow of each venture. The purchase of Preferred Shares by Nomura
and the related Member Preferred Equity investments by the Company in Elizabeth
and Carson are subject to due diligence which is ongoing. Nomura, the Operating
Partnership and the land owners, would hold member interests in both the
Elizabeth and Carson ventures of 40.0%, 30.0% and 30.0%, respectively. These
interests would be subordinate to the Member Preferred Equity interest held by
the Operating Partnership. The Company's $34.0 million Member Preferred Equity
investment in Great Plains is structured as outlined above, however, the Nomura
and other member interests in Great Plains are 45.0% and 10.0%, respectively.
Under the Nomura commitment, Nomura would provide Great Plains, and the
Metro Mall developments in Elizabeth and Carson with permanent financing. The
principal amount of the permanent financing would be based on the net operating
income of the project, loan to value and debt service coverage ratios and a debt
service coverage constant. The permanent financing would mature 15 years
following the closing of each of the loans and would amortize based on a 25 year
amortization schedule containing level principal and interest payments.
Capital Invested in Real Estate
Investment in real estate consists of: (a) eight Mall Properties
totaling 4.5 million square feet of GLA; (b) 87 Community Shopping Centers
totaling 12.1 million square feet of GLA; (c) 17 Single Tenant Retail Properties
totaling 1.4 million square feet of GLA; and (d) developments in progress which
relate to the Company's renovation, expansion and developments in progress
activities totaling 454,000 square feet of GLA.
The investment in real estate has increased $252.2 million since
December 31, 1995. The primary components of this increase are summarized below
(in thousands):
<TABLE>
<CAPTION>
NAME OF PROPERTY/DESCRIPTION COST PROJECT TYPE
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
RPI Properties............................................. $201,852 ACQUIsition
Delaware Community Plaza................................... 12,368 Acquisition
Georgesville Square........................................ 16,281 Development
Meadowview Square.......................................... 7,873 Development
Grand Central Mall......................................... 3,004 Renovation/Expansion
Morgantown Commons......................................... 1,438 Renovation/Expansion
Indian Mound Mall.......................................... 1,116 Renovation/Expansion
Capital expenditures....................................... 5,177 Cap-X (1)
Various properties, net.................................... 3,131
--------
$252,240
========
</TABLE>
(1) Capital expenditures include tenant improvements and tenant allowances on
second generation space of $3,900, routine, recurring maintenance capital
expenditures that can not be passed through to the tenants of $1,255 and leasing
commissions on second generation space of $22.
30
<PAGE> 31
PORTFOLIO DATA
Tenants reporting sales data for the year ended December 31, 1996
and December 31, 1995 represented 11.9 million square feet of GLA, or 82.5% of
the 1996/1995 "same store" population. Below is a summary of the "same store"
data:
<TABLE>
<CAPTION>
COMMUNITY SINGLE TENANT
MALL PROPERTIES SHOPPING CENTERS RETAIL PROPERTIES
------------------------ ------------------------- -------------------------
PROPERTY TYPE SALES PSF % INCREASE SALES PSF % INCREASE SALES PSF % INCREASE
- ------------- --------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Anchors............ $168.71 1.9% $227.38 1.8% $177.06 5.7%
Stores............. 238.00 2.1 168.79 2.4 -
------- ------- -------
Total $199.99 $219.78 $177.06
======= ======= =======
</TABLE>
The total portfolio occupancy rates have remained relatively constant
at 95.4% at December 31, 1996 and 95.6% at December 31, 1995, with the fourth
quarter showing a positive trend when compared to the third quarter. The Company
has focused significant efforts on maintaining its occupancy levels during the
difficult retail environment experienced over the past several years. The
occupancy levels by property type are summarized below:
<TABLE>
<CAPTION>
PROPERTY TYPE OCCUPANCY
- ---------------------------------------- ------------------------------------------------------------------------
12/31/96 9/30/96 6/30/96 3/31/96 12/31/95
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Malls Properties:
Anchors ........................... 99.1% 95.7% 95.8% 95.8% 100.0%
Stores ............................ 84.2% 83.1% 84.2% 84.2% 85.0%
----- ----- ----- ----- -----
Total ....................... 93.0% 90.6% 91.2% 91.2% 94.0%
----- ----- ----- ----- -----
Community Shopping Centers:
Anchors ........................... 98.3% 97.8% 97.0% 97.2% 98.2%
Stores ............................ 87.7% 87.1% 87.9% 87.9% 88.2%
Total ....................... 95.8% 95.1% 94.7% 94.9% 95.7%
----- ----- ----- ----- -----
Single Tenant Retail Properties: ....... 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Total Portfolio.................... 95.4% 94.1% 94.1% 94.2% 95.6%
===== ===== ===== ===== =====
</TABLE>
The 0.9% mall anchor tenant vacancy represents one space totaling
27,000 square feet of GLA. The 1.7% community shopping center anchor tenant
vacancy represents four spaces totaling 157,000 square feet of GLA. Mall store
vacancies total 326,000 square feet of GLA and community shopping centers store
vacancies total 350,000 square feet of GLA.
31
<PAGE> 32
In the twelve months of 1996 new and rollover leases totaled 488,000
square feet. Rollover leases represent expiring leases where the tenant renewed.
All other leases are categorized as new. The following table summarizes the new
and rollover activity by type for the twelve months ended December 31, 1996:
<TABLE>
<CAPTION>
SQUARE FEET ANALYSIS AVERAGE ANNUALIZED BASE RENT
------------------------------------ --------------------------------------------------
NEW ROLLOVER NEW ROLLOVER PORTFOLIO
PROPERTY TYPE LEASES LEASES TOTAL LEASES LEASES TOTAL AVERAGE
- ------------- ------ ------ ----- ------ ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Malls Properties:
Anchors ................... -- -- -- $ -- $ -- $ -- $ 4.06
Stores .................... 85,566 37,085 122,651 24.38 23.87 24.23 20.74
------- ------- ------- ------ ------ ------ ------
85,566 37,085 122,651 24.38 23.87 24.23 10.05
------- ------- -------
Community
Shopping Centers:
Anchors ................... 196,291 -- 196,291 6.86 -- 6.86 4.35
Stores .................... 104,268 65,095 169,363 8.24 9.47 8.71 8.24
------- ------- ------- ------ ------ ------ ------
300,559 65,095 365,654 7.34 9.47 7.72 5.19
------- ------- -------
Single Tenant
Retail Properties:
-- -- -- -- -- -- 4.27
------- ------- ------- ------ ------ ------ ------
Total .............. 386,125 102,180 488,305 $11.11 $14.69 $11.86 $ 6.32
======= ======= ======= ====== ====== ====== ======
</TABLE>
32
<PAGE> 33
The following table summarizes the Company's lease expirations as of
December 31, 1996:
<TABLE>
<CAPTION>
TOTAL ANCHOR
TOTAL ANCHOR TOTAL ANCHOR ANNUALIZED ANNUALIZED
LEASE SQUARE FEET SQUARE FEET ANNUALIZED ANNUALIZED BASE RENTS/ BASE RENTS/
EXPIRATION NUMBER OF OF GLA OF GLA BASE RENTS BASE RENTS SQUARE FOOT SQUARE FOOT
YEAR LEASES EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING (1) EXPIRING (1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Month-to-month 62 148,553 - $ 1,394,810 $ - $ 9.51 $ -
1997 239 1,045,550 487,154 6,816,255 1,195,351 6.53 2.45
1998 218 1,047,782 548,555 7,132,182 1,600,704 6.80 2.92
1999 221 1,098,056 575,168 7,811,230 1,706,160 7.23 2.97
2000 210 1,159,990 545,427 8,653,003 1,760,370 7.46 3.23
2001 115 900,589 635,071 5,307,220 2,090,717 6.53 3.74
Thereafter 539 12,292,075 10,666,928 71,950,472 47,578,225 6.02 4.60
----- ---------- ---------- ------------- -----------
1,604 17,692,595 13,458,303 $ 109,065,172 $55,931,527 $ 6.32 $ 4.28
===== ============= =========== ======= ======
Vacant GLA 861,236 184,985
---------- ----------
Total 18,553,831 13,643,288
========== ==========
PERCENT OF
PERCENT OF ANNUALIZED
LEASE TOTAL GLA BASE RENTS
EXPIRATION REPRESENTED BY REPRESENTED BY
YEAR EXPIRING LEASES EXPIRING LEASES
- -------------------------------------------------
<S> <C> <C>
Month-to-month 0.8% 1.3%
1997 5.6% 6.2%
1998 5.6% 6.5%
1999 5.9% 7.2%
2000 6.3% 7.9%
2001 4.9% 4.9%
Thereafter 66.3% 66.0%
---- -----
95.4% 100.0%
==== =====
Vacant GLA
Total
</TABLE>
The following table summarizes the Company's top ten tenants by
annualized base rents as of December 31, 1996:
<TABLE>
<CAPTION>
NUMBER OF TOTAL ANNUALIZED PERCENT OF PERCENT OF
TENANT STORES SQUARE FEET ANNUALIZED BASE RENTS/ OCCUPIED ANNUALIZED
NAME LEASED OF GLA BASE RENTS SQUARE FOOT (1) SQUARE FEET BASE RENTS
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Wal-Mart 33 3,028,404 $ 10,996,899 $3.63 16.3% 10.1%
Kmart 29 2,708,854 9,644,839 3.56 14.6% 8.8%
Lowe's 10 823,833 5,219,227 6.34 4.4% 4.8%
Hills 11 874,072 3,180,192 3.64 4.7% 2.9%
J.C.Penney 15 769,222 2,588,982 3.37 4.2% 2.4%
Kroger 11 381,465 2,122,634 5.56 2.1% 1.9%
Big Bear 5 246,369 1,908,930 7.75 1.3% 1.8%
Sears 7 571,991 1,648,394 3.32 3.1% 1.5%
Food Lion 9 234,486 1,548,306 6.60 1.3% 1.4%
Goody's 10 248,378 1,529,946 6.16 1.3% 1.4%
----- ---------- --------------
140 9,887,074 40,388,349
All other 1,464 7,805,521 68,676,823 9.24 42.1% 63.0%
----- ---------- -------------- ---- ------
1,604 17,692,595 $ 109,065,172 $6.32 95.4% 100.0%
===== ========== =============== ===== ==== =====
</TABLE>
(1) The base rents per square foot calculation excludes outlot and ground
leases that do not pay rents or pay nominal amounts for rents.
(2) The lease expiration table and the top ten tenant's table include the
Johnson City venture.
33
<PAGE> 34
FUNDS FROM OPERATIONS
Management considers FFO to be a supplemental measure of the Company's
operating performance. FFO, as modified in January 1996 by NAREIT is defined as
net income (computed in accordance with Generally Accepted Accounting Principles
(GAAP)), less gains or losses from debt restructuring, plus real estate
depreciation and amortization and plus minority interest in partnership. FFO
does not represent cash generated from operating activities in accordance with
GAAP and is not necessarily indicative of cash available to fund cash needs. FFO
should not be considered as an alternative to net income as the primary
indicator of the Company's operating performance or as an alternative to cash
flow as a measure of liquidity.
The following table illustrates the calculation of FFO for the year ended
December 31, 1996, 1995 and 1994 (in thousands):
<TABLE>
<CAPTION>
1996 NAREIT FFO DEFINITION
--------------------------------
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net income available to common shareholders ....................... $ 27,781 $25,713 $12,604
Add back (less):
Real estate depreciation and amortization .................... 20,173 17,875 15,576
Litigation settlement ........................................ 279
Gain on sale of cap and collar ............................... (178)
Minority interest in partnership ............................. 3,385 3,294 2,137
Extraordinary item ........................................... 5,864
Non-recurring transfer cost .................................. 2,055
Non-cash compensation expense to reflect
values of operating partnership units ..................... 450
Income from unconsolidated entities .......................... (42)
FFO from unconsolidated entities ............................. 85
--------- ------- -------
Funds from operations ............................................. $ 51,382 $46,983 $38,686
======== ======= =======
Weighted average shares/units outstanding ......................... 24,492 22,773 19,468
======== ======= =======
</TABLE>
Under the new NAREIT definition of FFO, non-cash charges for non-real
estate depreciation, loan amortization fees and interest rate buydown
amortization are deducted in computing FFO. For the years ended December 31,
1996, 1995 and 1994 these non-cash charges total $3.0 million, $3.5 million and
$2.7 million, respectively.
FFO increased 9.4%, or $4.4 million for the year ended December 31,
1996. The increase was the result of improved property net operating income of
$9.0 million including, the incentive management fee of $2.3 million relating to
net operating cash flow the Company earned during the escrow period of its
acquisition of the RPI portfolio, and the gain on the sales of three outparcels
of $1.5 million. This increase was partially offset by increased interest
expense of $3.1 million and increased general and administrative expense of $3.0
million.
FFO increased 21.5%, or $8.3 million for the year ended December 31,
1995. The increase was primarily the result of improved property net operating
income of $12.8 million, partially offset by increased interest expense of $3.3
million, increased non-real estate depreciation and loan fee amortization of
$660,000, increased general and administrative expense of $230,000 and the 1994
$450,000 non-cash compensation expense to reflect values of Operating
Partnership units.
34
<PAGE> 35
INFLATION
Inflation has remained relatively low during the past three years and
has had a minimal impact on the Company's Properties. Many tenants' leases
contain provisions designed to lessen the impact of inflation. Such provisions
include clauses enabling the Company to receive percentage rentals based on
tenants' gross sales, which generally increase as prices rise, and/or escalation
clauses, which generally increase rental rates during the terms of the leases.
In addition, many of the leases are for terms of less than 10 years, which may
enable the Company to replace existing leases with new leases at higher base
and/or percentage rentals if rents of the existing leases are below the
then-existing market rate. Substantially all of the leases, other than those for
anchors, require the tenants to pay a proportionate share of common area
maintenance, real estate taxes and insurance, thereby reducing the Company's
exposure to increases in costs and operating expenses resulting from inflation.
However, inflation may have a negative impact on some of the Company's
other operating items. Interest expense and general and administrative expenses
may be adversely affected by inflation as these specified costs could increase
at a rate higher than rents. Also, for tenant leases with stated rent increases,
inflation may have a negative effect as the stated rent increases in these
leases could be lower than the increase in inflation at any given time.
OTHER
The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season, when tenant occupancy and retail sales
are typically at their highest levels. In addition, shopping malls achieve most
of their temporary tenant rents during the holiday season. As a result of the
above, earnings are generally highest in the fourth quarter of each year.
The retail industry has experienced some difficulty, which is reflected
in sales and occupancy trends and in bankruptcies and restructuring of some
prominent retail organizations. Continuation of these trends could impact future
earnings performance.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and financial statement schedule of Glimcher
Realty Trust and the Report of Independent Accountants thereon are filed
pursuant to this Item 8 and are included in this report in Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 12, 1997.
35
<PAGE> 36
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 12, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 12, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference to GRT's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
year covered by this Form 10-K with respect to its Annual Meeting of
Shareholders to be held on May 12, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
(a) (1) Financial Statements
--------------------
- Report of Independent Accountants .................................. 41
- Glimcher Realty Trust Consolidated Balance Sheets................... 42
- Glimcher Realty Trust Consolidated Statements of Operations
for the years ended December 31, 1996, 1995, and 1994 ............ 43
- Glimcher Realty Trust Consolidated Statements of Shareholders'
Equity ended December 31, 1996, 1995 and 1994....................... 44
- Glimcher Realty Trust Consolidated Statements of Cash Flows
for the years ended December 31, 1996, 1995, and 1994 ............ 45
- Notes to Consolidated Financial Statements.......................... 47
(2) Financial Statement Schedule
----------------------------
- Schedule III - Real Estate and Accumulated Depreciation ............ 64
- Notes to Schedule III .......................................... 73
(3) Exhibits
--------
3.1 Amended and Restated Declaration of Glimcher Realty Trust. (2)
3.2 Bylaws, as amended. (2)
3.3 Amendment to the Company's Amended and Restated Declaration of Trust.
(1)
4.1 Specimen certificate for Common Shares of Beneficial Interest. (2)
4.2 Specimen Certificate evidencing 34,000 shares of Series A Convertible
Preferred Shares. (7)
10.1 Loan Agreement between Glimcher Properties Limited Partnership,
Glimcher Realty Trust, Glimcher Properties Corporation and The
Huntington National Bank relating to the Credit Facility. (1)
10.2 First Amendment to Loan Agreement by and among The Huntington National
Bank, Glimcher Properties Limited Partnership, Glimcher Realty Trust
and Glimcher Properties Corporation relating to the Credit Facility.
(1)
</TABLE>
36
<PAGE> 37
<TABLE>
<S> <C>
10.3 Second Amendment to Loan Agreement, First Note Extension Agreement and
First Amendment to a Credit Line Deed of Trust by and among The
Huntington National Bank, Glimcher Properties Limited Partnership,
Glimcher Realty Trust and Glimcher Properties Corporation relating to
the Credit Facility. (1)
10.4 Revolving Note issued by Glimcher Properties Limited Partnership in
connection with the Credit Facility. (1)
10.5 Executed Form of Open-End Mortgage, Assignment of Rents and Security
Agreement issued by Glimcher Properties Limited Partnership in
connection with the Credit Facility. (1)
10.6 Promissory Note issued by Morgantown Mall Associates Limited
Partnership in connection with the Morgantown Loan. (2)
10.7 Credit Line Deed of Trust and Security Agreement, issued by Morgantown
Mall Associates Limited Partnership in connection with the Morgantown
Loan. (2)
10.8 Amended and Restated Loan Agreement among Nomura Asset Capital
Corporation, Glimcher Holdings Limited Partnership, Glimcher Centers
Limited Partnership and Grand Central Limited Partnership relating to
the Nomura Loan. (1)
10.9 Holdings A Note, Nonrecourse Mortgage Note executed by Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership relating to the Nomura Loan. (1)
10.10 Holdings B Note, Nonrecourse Mortgage Note executed by Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership relating to the Nomura Loan. (1)
10.11 Centers Note, Nonrecourse Mortgage Note executed by Glimcher Holdings
Limited Partnership, Glimcher Centers Limited Partnership and Grand
Central Limited Partnership relating to the Nomura Loan. (1)
10.12 Grand Central Note, Nonrecourse Mortgage Note executed by Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership relating to the Nomura Loan. (1)
10.13 ISDA Master Agreement between The Huntington National Bank and
Glimcher Properties Limited Partnership. (1)
10.14 Agreement by and between Glimcher Properties Limited Partnership and
Start Marketing, Inc. (1)
10.15 Continuing Guaranty issued by Glimcher Realty Trust guaranteeing
payment of obligations of Glimcher Properties Limited Partnership in
connection with the Credit Facility. (1)
10.16 Continuing Guaranty issued by Glimcher Properties Corporation
guaranteeing payment of obligations of Glimcher Properties Limited
Partnership in connection with the Credit Facility. (1)
10.17 Exemplar of Mortgage/Deed of Trust, Assignment of Leases, Security
Agreement and Fixture Filing issued by Glimcher Holdings Limited
Partnership in connection with the Nomura Loan. (1)
10.18 Exemplar of Mortgage/Deed of Trust, Assignment of Leases, Security
Agreement and Fixture Filing and Modification of Mortgage/Deed of
Trust issued by Glimcher Centers Limited Partnership in connection
with the Nomura Loan. (1)
10.19 Deed of Trust, Assignment of Leases, Security Agreement and Fixture
Filing and Modification of Deed of Trust issued by Grand Central
Limited Partnership in connection with the Nomura Loan. (1)
10.20 Glimcher Realty Trust 1993 Employee Share Option Plan. (2)
10.21 Glimcher Realty Trust 1993 Trustee Share Option Plan. (2)
10.22 First Amended and Restated Loan Agreement dated as of
June 30, 1995 between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher
Properties Corporation, The Huntington National Bank,
Society National Bank and a Bank Group. (3)
</TABLE>
37
<PAGE> 38
<TABLE>
<S> <C>
10.23 Revolving Promissory Note dated June 30, 1995 in the amount of $87.5
million executed by Glimcher Properties Limited Partnership to The
Huntington National Bank. (3)
10.24 Revolving Promissory Note dated June 30, 1995 in the amount of $87.5
million executed by Glimcher Properties Limited Partnership to Society
National Bank.(3)
10.25 Guaranty dated June 30, 1995 issued by Glimcher Realty Trust in favor
of The Huntington National Bank. (3)
10.26 Guaranty dated June 30, 1995 issued by Glimcher
Properties Corporation in favor of The Huntington
National Bank. (3)
10.27 Guaranty dated June 30, 1995 issued by Glimcher
Realty Trust in favor of Society National Bank. (3)
10.28 Guaranty dated June 30, 1995 issued by Glimcher
Properties Corporation in favor of Society National
Bank. (3)
10.29 Promissory Note dated as of October 26, 1995 issued
by Glimcher Properties Limited Partnership in
the amount of twenty seven million six hundred
thousand dollars ($27,600,000). (4)
10.30 Exemplar Open-End Mortgage, Security Agreement and Fixture Filing
issued by Glimcher Properties Limited Partnership in connection with
the Connecticut General Life Insurance Company Loan. (4)
10.31 Exemplar Second Mortgage and Security Agreement dated as of October
26, 1995 issued by Glimcher Properties Limited Partnership in
connection with the Connecticut General Life Insurance Company Loan.
(4)
10.32 Exemplar Assignment of Rents and Leases dated as of October 26, 1995
issued by Glimcher Properties Limited Partnership in connection with
the Connecticut General Life Insurance Company Loan. (4)
10.33 Promissory Note dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership in the amount of six million two
hundred thousand dollars ($6,200,000). (4)
10.34 Promissory Note dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership in the amount of three million six
hundred thousand dollars ($3,600,000). (4)
10.35 Promissory Note dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership in the amount of three million three
hundred thousand dollars ($3,300,000). (4)
10.36 Promissory Note dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership in the amount of four million two
hundred thousand dollars ($4,200,000). (4)
10.37 Promissory Note dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership in the amount of five million one
hundred thousand dollars ($5,100,000). (4)
10.38 Completion Guaranty dated as of October 26, 1995 issued by Glimcher
Properties Limited Partnership and Glimcher Realty Trust in favor of
Connecticut General Life Insurance Company. (4)
10.39 Purchase and Sale Agreement by and among the Company and Retail
Property Investors, Inc., PaineWebber Retail Property Investments,
Ltd., PaineWebber Retail Property Investments Joint Venture,
PaineWebber College Plaza, l.P., and PaineWebber Marion Towne, L.P.,
dated as of March 11, 1996, as amended. (6)
10.40 Securities Purchase Agreement among Partnership Acquisition Trust II,
Glimcher Properties Limited Partnership and Glimcher Realty Trust,
dated November 26, 1996. (7)
</TABLE>
38
<PAGE> 39
21.1 Subsidiaries of the Registrant
23.1 Consent of Independent Accountants
27 Financial Data Schedule. (5)
99 Second Amendment to First Amended and Restated Loan
Agreement
----------
(1) Incorporated by reference to GRT's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994, filed with the Securities and
Exchange Commission on March 21, 1995.
(2) Incorporated by reference to GRT's Registration Statement No. 33-69740.
(3) Incorporated by reference to GRT's Form 8-K filed with the Securities
and Exchange Commission on July 26, 1995.
(4) Incorporated by reference to GRT's Form 8-K filed with the Securities
and exchange Commission on December 13, 1995.
(5) This exhibit is filed for EDGAR filing purposes only.
(6) Incorporated by reference to GRT's Form 8-K filed with the Securities
and Exchange Commission on November 7, 1996.
(7) Incorporated by reference to GRT's Form 8-K filed with the Securities
and Exchange Commission on February 5, 1997.
(b) Reports on Form 8-K
-------------------
- During the fiscal year ended December 31, 1996, the Company
filed a Report on Form 8-K with the Securities and Exchange
Commission on November 7, 1996, in connection with the
acquisition of the RPI Properties and Amendment on Form 8-K/A
filed with the Securities and Exchange Commission on December
16, 1996.
39
<PAGE> 40
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.
GLIMCHER REALTY TRUST
/s/ David J. Glimcher
-------------------------------------
David J. Glimcher
President and Chief Executive Officer
March 20, 1997
--------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been executed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Herbert Glimcher Chairman of the Board and Trustee March 20, 1997
- ----------------------------------------------- --------
Herbert Glimcher
/s/ David J. Glimcher President, Chief Executive Officer March 20, 1997
- ----------------------------------------------- (Principal Executive Officer) and --------
David J. Glimcher Trustee
/s/ Terry A. Schreiner Senior Vice President March 20, 1997
- ----------------------------------------------- and Chief Financial Officer --------
Terry A. Schreiner
/s/ William R. Husted Senior Vice President March 20, 1997
- ----------------------------------------------- of Construction and Trustee --------
William R. Husted
/s/ Philip G. Barach Member, Board of Trustees March 20, 1997
- ----------------------------------------------- --------
Philip G. Barach
/s/ Oliver Birckhead Member, Board of Trustees March 20, 1997
- ----------------------------------------------- --------
Oliver Birckhead
/s/ E. Gordon Gee Member, Board of Trustees March 20, 1997
- ----------------------------------------------- --------
E. Gordon Gee
/s/ Alan R. Weiler Member, Board of Trustees March 20, 1997
- ----------------------------------------------- --------
Alan R. Weiler
</TABLE>
40
<PAGE> 41
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders
of Glimcher Realty Trust
We have audited the consolidated financial statements and financial
statement schedule of Glimcher Realty Trust and subsidiaries as listed in Item
14(a) of this Form 10-K. These financial statements and financial statement
schedule are the responsibility of Glimcher Realty Trust's management. Our
responsibility is to express an opinion on these financial statements and
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 the 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 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Glimcher Realty
Trust and subsidiaries as of December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
February 21, 1997
41
<PAGE> 42
GLIMCHER REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PAR VALUE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
------- -------
<S> <C> <C>
Investment in real estate:
Land....................................................................... $ 78,339 $ 57,181
Buildings, improvements and equipment...................................... 846,500 623,471
Developments in progress:
Land................................................................ 6,852 4,885
Developments........................................................ 17,447 11,361
------- -------
949,138 696,898
Less accumulated depreciation.............................................. 86,421 66,699
------- -------
Net investment in real estate....................................... 862,717 630,199
Cash and cash equivalents.................................................... 8,968 5,832
Cash in escrow............................................................... 5,008 4,722
Investment in unconsolidated entities........................................ 41,133
Tenant accounts receivable, net.............................................. 21,286 15,507
Deferred expenses, net....................................................... 8,644 11,542
Prepaid and other assets..................................................... 1,646 1,201
------- -------
$949,402 $669,003
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable....................................................... $470,929 $291,579
Notes payable................................................................ 104,318 33,200
Accounts payable and accrued expenses........................................ 26,770 14,011
Distributions payable........................................................ 12,044 11,773
------- -------
614,061 350,563
Commitments and contingencies (notes 10 and 11)..............................
Minority interest in partnership............................................. 32,130 33,749
Redeemable preferred stock:
Series A convertible preferred shares of beneficial interest, 40,000 shares
authorized, 34,000 shares issued and outstanding as of December 31, 1996 34,000
Shareholders' equity:
Common shares of beneficial interest, $.01 par value, 100,000,000 shares
authorized, 21,888,931 shares issued and outstanding as of December 31,
1996; 21,881,921 shares issued and outstanding as of
December 31, 1995.......................................................... 219 219
Additional paid-in capital.................................................. 316,673 316,558
Distributions in excess of accumulated earnings............................. (47,681) (32,086)
------- -------
$949,402 $669,003
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
42
<PAGE> 43
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Minimum rents.................................................... $ 87,660 $ 79,323 $ 67,704
Percentage rents................................................. 2,896 2,921 3,397
Tenant recoveries................................................ 22,384 19,514 17,688
Other............................................................ 4,738 2,490 2,003
---------- ---------- ----------
Total revenues 117,678 104,248 90,792
---------- ---------- ----------
Operating Expenses:
Real estate taxes................................................ 10,233 8,588 7,778
Recoverable operating expenses................................... 13,893 11,920 11,635
---------- ---------- ----------
24,126 20,508 19,413
Provision for credit losses...................................... 2,072 1,620 2,203
Other operating expenses......................................... 1,014 578 462
---------- ---------- ----------
Total operating expenses....................................... 27,212 22,706 22,078
---------- ---------- ----------
Property net operating income............................... 90,466 81,542 68,714
Depreciation and Amortization:
Real estate depreciation....................................... 20,173 17,875 15,576
Non-real estate depreciation................................... 896 817 705
Loan fee amortization.......................................... 1,349 1,868 1,318
---------- ---------- ----------
22,418 20,560 17,599
General and administrative......................................... 9,371 6,409 6,182
Gain on sales of outparcels........................................ 1,506
Interest income.................................................... 506 649 655
Interest expense................................................... 28,521 25,439 22,217
Amortization of interest rate buydown.............................. 776 776 711
Non-recurring transfer cost........................................ 2,055
Income from unconsolidated entities................................ 42
Minority interest in partnership................................... 3,385 3,294 2,137
---------- ---------- ----------
Income before extraordinary item................................... 28,049 25,713 18,468
Extraordinary item:
Extinguishment of debt-prepayment fees and write-off of
deferred financing cost ..................................... 5,864
---------- ---------- ----------
Net income......................................................... 28,049 25,713 12,604
Preferred stock dividends.......................................... 268
---------- ---------- ----------
Net income available to common shareholders.................... $ 27,781 $ 25,713 $ 12,604
========== ========== ==========
Earnings per common share of beneficial interest................... $ 1.27 $ 1.27 $ 1.08
Extraordinary item................................................. (0.34)
---------- ---------- ----------
Earnings per share available to common shareholders............ $ 1.27 $ 1.27 $ 0.74
========== ========== ==========
Cash distributions declared per common share of beneficial interest $ 1.9232 $ 1.9099 $ 1.7405
========== ========== ==========
Weighted average number of common shares of beneficial interest
outstanding.................................................... 21,888,068 20,169,138 17,055,636
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
43
<PAGE> 44
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND GLIMCHER PROPERTIES
COMBINED STATEMENT OF OWNERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DISTRI-
BUTIONS
SERIES A COMMON SHARES IN EXCESS
CONVERTIBLE OF BENEFICIAL ADDITIONAL OF ACCU-
PREFERRED SHARES INTEREST PAID-IN MULATED OWNERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS DEFICIT TOTAL
------ ------ ------ ------ ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GLIMCHER PROPERTIES
Balance, December 31, 1993.................... $(57,816) $(57,816)
------- -------
Net income for the period January 1, 1994 to
January 25, 1994............................ 243 243
Asset distribution............................ (1,265) (1,265)
Non-cash compensation to employees............ 422 422
Contributions to capital of amounts due
to owners................................... 1,281 1,281
Deemed distribution........................... (406) (406)
------- -------
Balance, January 25, 1994....................... (57,541) (57,541)
------- -------
GLIMCHER REALTY TRUST
Contribution of Glimcher Properties........... 159,848 $ 2 $(93,551) 57,541 (36,008)
Net proceeds from the IPO..................... 15,825,000 158 296,993 297,151
Net proceeds from the over-allotment option... 2,373,750 24 45,053 45,077
Distributions declared, $1.7405 per Share..... $(31,953) (31,953)
Net income for the period January 26, 1994
to December 31, 1994........................ 12,604 12,604
Transfer from minority interest in partnership 916 916
---------- ---- ------- ------- ------- -------
Balance, December 31, 1994...................... 18,358,598 184 249,411 (19,349) 0 230,246
---------- ---- ------- ------- ------- -------
Distributions declared, $1.9099 per Share..... (38,450) (38,450)
Proceeds from Distribution Reinvestment
and Share Purchase Plan .................... 11,419 227 227
Other issuance of Shares...................... 11,904 250 250
Net proceeds from second public offering...... 3,500,000 35 68,775 68,810
Net income.................................... 25,713 25,713
Transfer to minority interest in partnership.. (2,105) (2,105)
---------- ---- ------- ------- ------- -------
Balance, December 31, 1995...................... 21,881,921 219 316,558 (32,086) 0 284,691
---------- ---- ------- ------- ------- -------
Distributions declared, $1.9232 per Share..... (42,096) (42,096)
Proceeds from Distribution Reinvestment
and Share Purchase Plan .................... 3,540 60 60
Other issuance of Shares...................... 3,470 57 57
Preferred equity 34,000 $34,000 (1,280) 32,720
Preferred stock dividends declared............ (268) (268)
Net income.................................... 28,049 28,049
Transfer to minority interest in partnership.. (2) (2)
------ ------ ---------- ---- ------- ------- ------- -------
Balance, December 31, 1996...................... 34,000 $34,000 21,888,931 $219 $316,673 $(47,681) $ 0 $303,211
====== ====== ========== ==== ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
44
<PAGE> 45
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................. $ 28,049 $ 25,713 $ 12,604
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for doubtful accounts...................... 2,072 1,620 2,203
Depreciation and amortization........................ 22,418 20,560 17,599
Other non-cash expenses.............................. 816 776 1,133
Minority interest in partnership..................... 3,385 3,294 2,137
Gains on sales of outparcels......................... (1,506)
Write-off of deferred financing fees................. 1,091
Loss on early extinguishment of debt................. 4,773
Net changes in operating assets and liabilities:
Tenant accounts receivable, net...................... (7,440) (4,199) (9,223)
Prepaid and other assets............................. 898 (136) (640)
Accounts payable and accrued expenses................ 5,050 (6,656) (33)
------- ------- -------
Net cash provided by operating activities................ 53,742 40,972 31,644
------- ------- -------
Cash flows from investing activities:
Sale of investments.................................. 2,412
Additions to investment in real estate............... (36,615) (44,789) (76,648)
Acquisition of properties............................ (54,110) (5,601) (120,017)
Investment in unconsolidated entities................ (41,133)
Purchase of third-party investor interests........... (26,811)
Proceeds from sales of outparcels.................... 4,330
Withdrawals from cash in escrow...................... 997 4,203 5,841
Additions to deferred expenses....................... (172) (3,008) (4,072)
------- ------- -------
Net cash used in investing activities.................... (126,703) (49,195) (219,295)
------- ------- -------
</TABLE>
(continued)
The accompanying notes are an integral part of these consolidated financial
statements
45
<PAGE> 46
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from (payments to) revolving line of credit, net... 69,800 (39,972) (4,888)
Proceeds from issuance of mortgages and notes payable....... 23,756 66,152 127,738
Principal payments on mortgage and notes payable............ (3,155) (46,749) (249,060)
Purchase of interest rate buydown on mortgage............... (4,009)
Proceeds from the issuance of common shares of
beneficial interest, net of underwriting and other
offering costs of $4,690 and $26,296, respectively........ 68,810 342,228
Proceeds from the issuance of Series A convertible
preferred shares of beneficial interest, net of costs of
$1,280.................................................... 32,720
Proceeds from Trustee Share Option Plan, Dividend
Reinvestment and Share Purchase Plan...................... 77 227
Cash distributions, common shareholders..................... (42,093) (36,512) (23,370)
Cash distributions, Operating Partnership unit holders...... (5,008) (4,943) (3,300)
Deemed distributions........................................ (406)
------- ------- -------
Net cash provided by financing activities...................... 76,097 7,013 184,933
------- ------- -------
Net change in cash and cash equivalents........................ 3,136 (1,210) (2,718)
Cash and cash equivalents, at beginning of period.............. 5,832 7,042 9,760
------- ------- -------
Cash and cash equivalents, at end of period.................... $ 8,968 $ 5,832 $ 7,042
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
46
<PAGE> 47
GLIMCHER REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Glimcher Realty Trust (the "Company" or "GRT") is a Maryland real estate
investment trust ("REIT"). GRT completed its initial public offering (the "IPO")
of 15,825,000 common shares of beneficial interest (the "Shares") on January 26,
1994. On February 3, 1994, GRT sold an additional 2,373,750 Shares as a result
of the underwriters' exercising the over-allotment option granted to them in
connection with the IPO. In connection with the IPO, GRT acquired the business
and operations of The Glimcher Company ("TGC") which consisted of owning,
leasing, managing, acquiring, and developing enclosed regional malls, (the "Mall
Properties") community shopping centers (the "Community Shopping Centers") and
single tenant retail properties (the "Single Tenant Retail Properties"). On June
27, 1995, the Company completed a public offering of an additional 3,500,000
Shares.
In connection with the IPO, TGC and various affiliated entities and
individuals contributed the management, development, leasing and construction
supervision activities of TGC and their ownership interests in 29 properties
(the "Glimcher Properties"), to Glimcher Properties Limited Partnership, a
Delaware limited partnership of which the general partner is a wholly owned
subsidiary of GRT and the limited partner is GRT (the "Operating Partnership")
in exchange for Shares of GRT and limited partnership units of the Operating
Partnership. GRT contributed substantially all of the net proceeds of the IPO to
the Operating Partnership. The Operating Partnership then acquired, from
unrelated third-parties, 46 additional Community Shopping Centers and Single
Tenant Retail properties (the "Acquisition Properties") in exchange for $93,413
in cash and the assumption of certain mortgage debt of $76,000.
The Company concentrates its business on three types of retail properties:
Mall Properties, Community Shopping Centers and Single Tenant Retail Properties
(the "Properties"), which are generally strategically located in under-served
middle markets where management of the Company has extensive operating
experience and in-depth knowledge of market conditions. At December 31, 1996,
the Properties consisted of nine Mall Properties, 87 Community Shopping Centers,
and 17 Single Tenant Retail Properties located in 24 states primarily throughout
the East and the Midwest. One of the Mall Properties is owned by a limited
liability company in which the Company is a 33.3% member.
Basis of Presentation
The accompanying consolidated financial statements include the accounts of
GRT, its majority owned partnerships and corporations, and the Acquisition
Properties for the period January 26, 1994 through December 31, 1996. For the
periods prior to the IPO, the financial statements include the combined accounts
of 18 partnerships and eight sole proprietorships (which owned a combined total
of 29 properties) and the accounts of the management activities of TGC (the
"Glimcher Properties"). The Glimcher Properties were contributed to GRT on
January 26, 1996. Net income of the Glimcher Properties of $243 for the period
January 1 to January 25, 1994 has been classified as income allocated to
minority interest in the consolidated statement of operations as it is
attributable to the prior owners who have retained a continuing ownership in the
assets contributed to the Operating Partnership. The exchange of the Glimcher
Properties for interests in GRT and the Operating Partnership was accounted for
as a reorganization of entities under common control. As such, these assets and
liabilities were transferred and accounted for at historical cost in a manner
similar to that in a pooling of interest.
47
<PAGE> 48
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Third Party Investors' Interest
During January 1994, TGC acquired all third-party interests in Fairfield
Commons Limited Partnership for $46,881 in cash and a note payable of $3,300.
Under the terms of the agreement, the acquisition was made by the Operating
Partnership using funds from the IPO. The acquisition was accounted for under
the purchase method of accounting and the excess of the consideration over the
carrying value of the partnership interests acquired of approximately $22,000
was recorded as an increase in the carrying value of the Property.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include GRT, the
Operating Partnership (89.4% owned by GRT at December 31, 1996 and 1995), four
Delaware limited partnerships (Glimcher Holdings Limited Partnership, Glimcher
Centers Limited Partnership, Grand Central Limited Partnership, and Glimcher
York Associates Limited Partnership) and one Ohio limited partnership
(Morgantown Mall Associates Limited Partnership), all of which are owned
directly or indirectly by GRT. The Operating Partnership has an investment in
two corporate ventures and one other corporation which are accounted for under
the equity method. All significant inter-entity balances and transactions have
been eliminated.
The net assets of TGC transferred to the Operating Partnership are included
in the accompanying consolidated financial statements on a historical cost
basis. Adjusted net liabilities of TGC, which relate to the management
operations contributed to the Operating Partnership, were $2,620 at December 31,
1993. The changes in net assets between periods have been reflected as deemed
capital contributions or distributions in the accompanying financial statements.
Revenue Recognition
Minimum rents are recognized on an accrual basis over the terms of the
related leases which approximates a straight-line basis. Percentage rents are
recognized on an accrual basis. Recoveries from tenants for taxes, insurance and
other shopping center operating expenses are recognized as revenues in the
period the applicable costs are accrued.
An allowance for doubtful accounts has been provided against the portion of
tenant accounts receivable which is estimated to be uncollectible. Tenant
accounts receivable in the accompanying balance sheets are shown net of an
allowance for doubtful accounts of $4,463, $2,229 and $3,080 as of December 31,
1996, 1995 and 1994, respectively.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. For example, estimates are used to establish common area
maintenance, real estate tax and insurance tenant accounts receivable,
percentage rents and accounts receivable reserves. The Company bases its
estimates on historical sales performance of tenants, changes in Property
occupancy, mix of tenants and industry trends of tenant credit risk. Actual
results could differ from those estimates.
48
<PAGE> 49
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Cash and Cash Equivalents
For purposes of the statements of cash flows, all highly liquid investments
purchased with original maturities of three months or less are considered to be
cash equivalents. The carrying amounts approximate fair value.
Supplemental Disclosure of Non-Cash Financing and Investing Activities
Accounts payable of $5,617, $2,152 and $3,131 were accrued for real estate
improvements and other assets as of December 31, 1996, 1995 and 1994,
respectively.
GRT, through the Operating Partnership, acquired 23 Community Shopping
Centers during the year ended December 31, 1996. The purchase price included
cash of $54,110 and the assumption of net liabilities of $160,110. GRT, through
the Operating Partnership, acquired one Community Shopping Center during the
year ended December 31, 1995. The purchase price included cash of $5,601 and the
assumption of net liabilities of $153. GRT, through the Operating Partnership,
acquired six Community Shopping Centers and one Single Tenant Retail Property
during the year ended December 31, 1994. The aggregate purchase prices included
cash of $26,601, the issuance of Operating Partnership units at a value of $916
and the assumption of net liabilities and mortgage debt of $18,025.
Share distributions of $10,524, $10,521 and $8,583, and Operating
Partnership distributions of $1,252, $1,252 and $1,217 had been declared but not
paid as of December 31, 1996, 1995 and 1994, respectively. Series A convertible
preferred share distributions of $268 had been declared but not paid as of
December 31, 1996.
Amounts paid for interest were $30,295, $25,457 and $23,353, in 1996, 1995
and 1994, respectively.
Amounts paid for state and local income taxes were $572, $810 and $82 in
1996, 1995 and 1994, respectively.
Cash in Escrow
Cash in escrow consists primarily of cash held for real estate taxes,
payments by tenants for early termination of their leases, and property
maintenance and expansion or leasehold improvements as required by certain of
the loan agreements. Cash in escrow may be released as certain income
requirements have been met.
Deferred Expenses
Deferred expenses consist principally of financing fees, leasing
commissions paid to third parties and direct costs related to leasing
activities. These costs are amortized on a straight-line basis over the terms of
the respective agreements. Deferred expenses in the accompanying consolidated
balance sheets are shown net of accumulated amortization of $9,232 and $6,939 as
of December 31, 1996 and 1995, respectively.
Investment in Real Estate
Real estate assets are stated at cost. Costs incurred for the acquisition,
development, construction and improvement of properties are capitalized,
including direct costs incurred by GRT for these activities. Interest and real
estate taxes incurred during construction periods are capitalized and amortized
on the same basis as the related assets.
49
<PAGE> 50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Management evaluates the recoverability of its investment in real estate
assets in accordance with Statement of Financial Accounting Standards ("SFAS")
121, "Accounting for Impairment of Long-Lived Assets and Long-Lived Assets To Be
Disposed Of". This statement requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that full asset
recoverability is questionable. Management's assessment of recoverability of its
real estate assets under this statement includes, but is not limited to, recent
operating results, expected net operating cash flow and management's plans for
future operations. The Company adopted SFAS No. 121 in 1996 and the adoption had
no effect on the results of operations or financial condition of the Company.
Depreciation expense is computed using the straight-line method and
estimated useful lives for building and improvements of 40 years and equipment
and fixtures of five to 10 years.
Expenditures for improvements and construction allowances paid to tenants
are capitalized and amortized over the remaining life of the initial terms of
each lease. Maintenance and repairs are charged to expense when incurred.
Income Taxes
GRT files as a REIT under Sections 856-860 of the internal revenue code
(the "Code"). In order to qualify as a REIT, GRT is required to distribute at
least 95.0% of its taxable income to shareholders and to meet certain asset and
income tests as well as certain other requirements. GRT will generally not be
liable for federal income taxes, provided it satisfies the necessary
distribution requirements. Even as a qualified REIT, the Company is subject to
certain state and local taxes on its income and property.
The Company's has an equity investment in Glimcher Development Corporation
("GDC"), which is a non-qualified REIT subsidiary under Section 856 (I) of the
Code. For federal income tax purposes, GDC is treated as a separate entity and
taxed as a regular C-Corporation.
Interest Costs
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Interest capitalized...................... $ 3,394 $ 690 $ 2,139
Interest expense.......................... 28,521 25,439 22,217
Amortization of interest rate buydown..... 776 776 711
------ ------ ------
Total interest costs................... $32,691 $26,905 $25,067
====== ====== ======
</TABLE>
Advertising Costs
The Company promotes its Properties on behalf of its tenants through
various media. The majority of the advertising expenses incurred are recovered
from the tenants through lease obligations. Certain advertising expenses are
directly related to certain specialty events which generate additional
non-tenant revenues to offset such expenses. Net advertising expense (income)
was $308, $106 and ($195) for the years ended December 31, 1996, 1995 and 1994,
respectively.
50
<PAGE> 51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reclassifications
Certain reclassifications of prior period amounts have been made in the
financial statements to conform to the 1996 presentation.
Land costs related to new developments have been reclassified to
developments in progress for both the 1996 and 1995 presentations. Developments
in progress reflect total project cost until a project's grand opening date, at
which time the project cost will be transferred to land and buildings,
improvements and equipment.
51
<PAGE> 52
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
3. MORTGAGE NOTES PAYABLE AS OF DECEMBER 31, 1996 AND 1995 CONSIST OF THE FOLLOWING:
ESTIMATED
CARRYING AMOUNT OF PAYMENT BALLOON PAYMENT FINAL
DESCRIPTION MORTGAGE NOTES PAYABLE INTEREST RATE TERMS AT MATURITY MATURITY DATE
- ------------------------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Central Limited Partnership ............ $25,000 $ 25,000 6.935% 6.935% (a) $25,000 October 1, 2000
Glimcher Holdings Limited Partnership - Loan A 40,000 40,000 6.995% 6.995% (a) 40,000 February 1, 1999
Glimcher Holdings Limited Partnership - Loan B 40,000 40,000 7.505% 7.505% (a) 40,000 February 1, 2003
Glimcher Centers Limited Partnership ......... 76,000 76,000 7.625% 7.625% (a) 76,000 August 1, 2000
Morgantown Mall Associates Limited Partnership 50,200 50,200 7.500% 7.500% (a) 50,200 April 1, 1999
Glimcher Properties Limited Partnership -
Mortgage Notes Payable:
Glimcher Properties Limited Partnership 50,000 50,000 7.470% 7.470% (a) 50,000 October 26, 2002
Georgesville Square .................... 1,646 8.000% (b)
Meadowview Square ...................... 866 (c)
Delaware Community Plaza ............... 8,380 7.875% (d) April 1, 2016
RPI Acquisition:
Applewood Village ................... 3,797 9.000% (d) June 1, 2010
Artesian Square ..................... 5,340 8.000% (a) 5,190 May 1, 2000
Audubon Village ..................... 4,350 8.750% (d) 3,813 July 1, 2000
Aviation Plaza ...................... 6,723 8.000% (d) 6,561 June 1, 1999
Barren River Plaza .................. 8,101 8.750% (d) 7,592 June 10, 2001
Crossing Meadows .................... 9,375 8.000% (d) 9,096 June 1, 1999
Crossroads Center ................... 6,590 8.000% (a) 6,590 July 1, 2000
Cumberland Crossing ................. 5,137 8.750% (d) 4,814 June 10, 2001
East Pointe Plaza ................... 11,111 8.750% (d) 10,679 June 10, 2001
Lexington Parkway Plaza ............. 7,538 9.125% (d) 6,941 March 1, 2000
Logan Place ......................... 2,415 8.000% (a) 1,948 May 1, 2000
Marion Towne Center ................. 5,740 7.375% (d) 5,268 July 1, 2002
Piedmont Plaza ...................... 10,125 8.000% (a) 9,850 March 1, 2000
Roane County Plaza .................. 5,123 9.125% (d) 4,722 March 1, 2000
Southside Plaza ..................... 6,547 8.000% (d) 6,452 November 5, 1997
Village Plaza ....................... 18,887 8.000% (d) 18,402 November 1, 1999
RPI Bridge Facility .................... 34,372 (f) (a)(g) 34,372 October 17, 1997
Construction Loans:
Morgantown Commons ($10,500 available) . 9,455 7,867 (e) (e) (a) June 1, 1998
Georgesville Square ($16,900 available) 13,515 (e) (a)(g) October 1, 1999
Meadowview Square ($9,800 available) ... 7,108 (e) (a)(g) November 1, 1999
-------- --------
Total Mortgage Notes Payable ........ $470,929 $291,579
======== ========
<FN>
(a) The loan requires monthly payments of interest only.
(b) The loan required monthly payments of principal and interest and was prepaid
with no penalty on February 2, 1996. (c) The loan required no payments until
maturity and was replaced with a construction loan bearing market interest.
(d) The loan requires monthly payments of principal and interest only.
(e) The loan bears interest at LIBOR plus 200 basis points (7.625% at December 31, 1996 and 7.938% at
December 31, 1995, respectively).
(f) The loan bears interest at LIBOR plus 175 basis points (7.375% at December 31, 1996).
(g) The loan can be extended for up to one year.
</TABLE>
52
<PAGE> 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
All mortgage notes payable are collateralized by certain Properties
held within the respective partnerships. The loan agreement for Grand Central
Limited Partnership, Glimcher Holdings Limited Partnership and Glimcher Centers
Limited Partnership contains financial covenants regarding minimum net operating
income and coverage ratios.
Principal maturities (excluding extension options) on mortgage notes
payable during the five years subsequent to December 31, 1996, are as follows:
1997 - $42,508; 1998 - $11,277; 1999 - $146,711; 2000 - $141,186; 2001 -
$23,794; thereafter - $105,453.
4. NOTES PAYABLE
At December 31, 1996, the Company maintained a revolving line of credit
(the "Credit Facility") with two banks, as agents, of $175,000 which is due in
June 1998. All borrowings under the Credit Facility are unsecured and bear
interest at variable rates ranging from LIBOR plus 150 basis points to LIBOR
plus 250 basis points. The variable rate is set quarterly based on the Company's
leverage ratio of total consolidated liabilities ($614,061 at December 31, 1996)
to consolidated tangible net worth ($335,341 at December 31, 1996). Consolidated
tangible net worth is defined as the Company's total assets less total
liabilities and intangible assets. At December 31, 1996, the Credit Facility
interest rate was LIBOR plus 175 basis points (7.250%). In November 1996, the
Company entered into a second amendment to the Credit Facility which modified
certain of the provisions of the Credit Facility loan agreement as well as
provided for additional covenants relating primarily to the Company's
development activity and venture investments. During 1996 and 1995, the weighted
average interest rate was 7.112% and 7.892%, respectively.
The Credit Facility, as amended, contains customary covenants,
representations, warranties and events of default, including maintenance of a
specified minimum net worth requirement, loan to value ratios, project costs to
asset value ratios, total debt to asset value ratios and EBITDA to total debt
service, net operating income requirements on the negative pledge pool,
restrictions on the incurrence of additional indebtedness and approval of anchor
leases with respect to the properties which are part of the negative pledge pool
for the Credit Facility.
At December 31, 1996, the balance outstanding on the Credit Facility
was $103,000. In addition, $450 represents a holdback on the available balance
of the Credit Facility for letters of credit issued under the Credit Facility.
As of December 31, 1996, the unused balance of the Credit Facility available to
the Company was $71,550.
In connection with the Credit Facility the Company entered into a rate
protection agreement on July 14, 1995, under which the obligor has agreed to
reimburse the Company to the extent interest expense increased as a result of an
increase in LIBOR above 8.500% per annum, and the Company has agreed to
reimburse the obligor to the extent of interest expense decreased as a result of
a decrease in LIBOR below 4.500% per annum. Thus, the majority of the Company's
variable-rate debt has contractual protection against interest rate
fluctuations.
In February, 1996, GRT entered into a note payable for its three-year
directors and officers liability insurance premium of $600 at a fixed rate of
7.575%. The note requires quarterly payments of principal and interest in the
amount of $55 with the final payment due November 23, 1998. The balance
outstanding was $408 at December 31, 1996. Additionally, in September, 1996, the
Company entered into a note payable for its property and general liability
insurance premium of $1.4 million at a fixed rate of 5.920%. The note requires
monthly payments of principal and interest in the amount of $135 with the final
payment due July 1997. The balance outstanding was $910 at December 31, 1996.
53
<PAGE> 54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
5. REDEEMABLE PREFERRED STOCK
On November 27, 1996, the Company sold 34,000 shares of its 40,000
authorized Series A convertible preferred shares (the "Preferred Shares").
Dividends on the Preferred Shares will be paid based upon one of the following
two dividend options available to the Company: (a) a floating rate at the 90 day
LIBOR, reset quarterly, plus 285 basis points (8.350% at December 31, 1996); or,
(b) a four-year fixed rate which can be set any time during the year after the
issuance of Preferred Shares for a development project equal to the five-year
U.S. Treasury Security with approximately four years remaining plus 285 basis
points (8.980% at December 31, 1996). After four years this fixed rate would be
converted to the terms described above in clause (a). The dividend rate on the
$34.0 million Preferred Shares is based on the terms described above in clause
(a), however the Company can elect to proceed under the terms described in
clause (b) at anytime during the year after the issue date. The dividend payment
obligation and the redemption of the Preferred Shares issued is secured by a
pledge by the Company of its corresponding preferred equity interests in the
Operating Partnership which totals $34.0 million as of December 31, 1996.
Beginning in the sixth year after the Preferred Shares are issued, the Preferred
Shares are convertible at the option of Nomura to Shares of the Company. The
number of conversion Shares is obtained by dividing the liquidation preference
(generally, $1, but subject to adjustment based on when the conversion occurs),
by the conversion price per Share which is equal to the product of (i) the
average market price per Share over the 30 trading days prior to the conversion,
multiplied by (ii) the applicable conversion percentage which ranges between
70.0% and 90.0%; however, the Company may redeem the Preferred Shares at any
time, prior to conversion, at its option without any penalty or premiums.
6. DERIVATIVE FINANCIAL INSTRUMENTS
The Company has limited involvement with derivative financial
instruments and does not use them for trading purposes. They are used to manage
well-defined interest rate risks. Interest rate protection agreements are used
to reduce the potential impact of increases and decreases in interest rates on
variable rate debt. In 1995, the Company entered into a rate protection
agreement on its amended Credit Facility for a term of three years under which
the obligor has agreed to reimburse the Company to the extent interest expense
increased as a result of an increase in LIBOR above 8.500% per annum, and the
Company has agreed to reimburse the obligor to the extent interest expense
decreased as a result of a decrease in LIBOR below 4.500% per annum. The Company
is exposed to credit loss in the event of non-performance by the obligor.
However, the Company does not anticipate non-performance by the obligor.
7. RENTALS UNDER OPERATING LEASES
Minimum rents contain straight-line adjustments for rental revenue
increases which are recorded in accordance with generally accepted accounting
principles. The aggregate rental revenue increases resulting from the
straight-line adjustments for the years ended December 31, 1996, 1995 and 1994
were $1,747, $1,686 and $1,255, respectively.
GRT receives rental income from the leasing of retail shopping center
space under operating leases with expiration dates through the year 2025. The
minimum future base rentals under non-cancelable operating leases as of December
31, 1996 are as follows:
1997............................. $102,426
1998............................. 96,270
1999............................. 90,002
2000............................. 82,034
2001............................. 75,881
Thereafter....................... 537,105
---------
$983,718
=========
54
<PAGE> 55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Minimum future base rentals do not include amounts which may be
received from certain tenants based upon a percentage of their gross sales or as
reimbursement of operating expenses.
In 1996, 1995 and 1994, the only tenant that collectively accounted for
more than 10.0% of rental income was Kmart which represented approximately
10.9%, 11.3% and 11.1% of rentals, respectively. The tenant base includes
national, regional and local retailers, and consequently the credit risk is
concentrated in the retail industry.
8. INVESTMENT IN UNCONSOLIDATED ENTITIES
Investments in unconsolidated entities consist of preferred stock and
non-voting common stock of GDC, a 45.0% interest in Great Plains and a 33.3%
interest in Johnson City.
The Company owns preferred and common stock in GDC entitling it to
approximately 95.0% of the net profits of GDC and has the ability to exercise
significant influence but not voting control with respect to GDC. The Company is
accounting for its investment in GDC using the equity method of accounting.
The Company accounts for its 45.0% interest in Great Plains and its
33.3% interest in Johnson City under the equity method of accounting and records
its share of income or loss in accordance with the terms of the respective
agreements.
The net income (loss) for each unconsolidated entity is allocated in
accordance with the provisions of the applicable operating agreements. The
allocation provisions in these agreements may differ from the ownership interest
held by each member under the terms of these agreements.
The summary financial information of the Company's unconsolidated
entities were accounted for using the equity method, and a summary of the
Operating Partnership's investment in and share of net income from such
unconsolidated entities which ranges from 33.3% to 95.0% are presented below:
<TABLE>
<CAPTION>
BALANCE SHEETS
DECEMBER 31, 1996
<S> <C>
Assets:
Investment properties at cost, net...................... $ 80,902
Cash and cash equivalents................................. 711
Tenant accounts receivable................................ 218
Other assets.............................................. 659
----------
$ 82,490
==========
Liabilities and Members' Equity:
Mortgage note payable..................................... $ 31,000
Accounts payable due Company.............................. 1,084
Accounts payable and accrued expenses..................... 2,475
----------
34,559
Members' equity........................................... 47,931
----------
$ 82,490
==========
Operating Partnership's Share of:
Total assets.............................................. $ 45,645
==========
Members' equity........................................... $ 40,439
==========
</TABLE>
55
<PAGE> 56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1996
<S> <C>
Total revenues.......................................................... $ 994
Operating expenses...................................................... 706
------------
Net operating income.................................................... 288
Depreciation and amortization........................................... 84
Interest expense........................................................ 270
Gain on sale of outparcel............................................... 286
------------
Net Income....................................................... $ 220
============
Operating Partnership's share of net income............................. $ 42
============
RECONCILIATION OF MEMBERS' EQUITY TO COMPANY INVESTMENT IN
UNCONSOLIDATED ENTITIES:
Members' equity..................................................... $ 40,439
Additional Company costs............................................ 694
------------
Investment in unconsolidated entities............................... $ 41,133
============
</TABLE>
9. TRANSACTIONS WITH AFFILIATES
On October 16, 1996, the Company formed Glimcher Development
Corporation (GDC), an unconsolidated non-qualified REIT subsidiary which is
owned by the Operating Partnership, Herbert Glimcher, David J. Glimcher and
Michael P. Glimcher (the "Glimchers"). The Operating Partnership holds 95.0% of
the ownership interest; the Glimchers hold 100.0% of the voting interest and
5.0% of the ownership interest. The Company transferred 51 employees in the
construction, development, leasing and legal departments to GDC. GDC will
provide services for a fee, to the Company, to ventures in which the Company has
an ownership interest and to third parties. GDC will allow the REIT to earn
non-qualified revenues without jeopardizing its REIT status.
In 1996, the Company reimbursed TGC and Corporate Flight, Inc.,
companies in which Herbert Glimcher has an interest, $20 and $59, respectively,
for the use, in connection with Company related matters, of a bus owned by TGC
and an airplane leased by Corporate Flight, Inc. In 1996, the Company purchased
a parcel of land from TGC for $215.
The Company executed during 1995 a lease termination agreement for one
of the Mall Properties with a tenant owned by Herbert Glimcher and David J.
Glimcher. As part of the lease termination agreement, the Company received
equipment in the amount of $250 in consideration for the remaining lease
obligation of the tenant in 1995 and 1996.
In January 1995, the Company purchased a parcel of land for $129 from
TGC. Also, during 1995, the Company reimbursed TGC $143 for the use of an
airplane leased by TGC in connection with Company related matters. In September
1995, the Company purchased four automobiles from TGC for use at its Mall
Properties for $32.
Effective January 1994, the Company engaged Start Marketing, Inc.
("SMI"), a company wholly owned by Herbert Glimcher, to provide certain services
which, if rendered by the Company, may have caused rental income from the Mall
Properties to be non-qualified for purposes of maintaining the Company's REIT
status. Total income and expenses recognized by SMI as of December 31, 1996,
were approximately $224 and $223, respectively, with net income realized of
approximately $1. In 1995, total income and expenses recognized were
approximately $3,419 and $3,404, respectively, with net income realized of
approximately $15. In 1994, total income and expense recognized were
approximately $3,133 and $3,117, respectively, with net income realized of
approximately $16.
56
<PAGE> 57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Effective January 1994, the Company engaged Archer-Meek-Weiler Agency,
Inc. ("AMW"), an agency in which Alan R. Weiler (a Trustee of GRT) is president,
to provide property and employee practices liability insurance services to the
Company. Total commissions received by AMW during 1996, 1995 and 1994 were
approximately $128, $170 and $141, respectively.
Prior to March 1994, rental expense under a month-to-month building
lease was included as general and administrative expenses in the amount of $55
for 1994. The building was owned by a partnership in which an officer of GRT
holds a 25.0% interest.
Certain of the properties also have tenants in which officers of GRT
hold a financial interest. Annual base minimum rents and tenant accounts
receivable from these tenants are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Minimum rents................................... $580 $934 $635
Tenant accounts receivable...................... 27 60 25
</TABLE>
10. COMMITMENTS
TGC entered into a new operating lease for office space on September
10, 1993, which was subsequently assigned to the Operating Partnership. The
lease had an initial term of ten years commencing on March 21, 1994.
Additionally, eight of GRT's properties are subject to long-term ground leases
where a third party owns the underlying land and has leased the land to GRT. GRT
pays rent, ranging from $2 to $60 per annum, for the use of the land and
generally is responsible for the costs and expenses associated with maintaining
the building and improvements thereto. Future minimum rental payments as of
December 31, 1996 are as follows:
<TABLE>
<CAPTION>
OFFICE GROUND
LEASE LEASES
------ ------
<S> <C> <C>
1997.............................................................. $ 511 $ 218
1998.............................................................. 520 219
1999.............................................................. 506 219
2000.............................................................. 496 222
2001.............................................................. 518 223
Thereafter........................................................ 1,259 7,733
------- -------
$3,810 $8,834
======= =======
</TABLE>
Total rental expenses (including miscellaneous month-to-month lease
rentals) for the years ended December 31, 1996, 1995 and 1994 were $618, $457
and $367, respectively. Ground lease expenses for the years ended December 31,
1996, 1995 and 1994 were $336, $223 and $182, respectively.
In connection with the development of The Great Mall of the Great
Plains, the Operating Partnership provided the lender with a completion
guarantee and an unconditional guarantee of payment of the greater of 25.0% of
the outstanding obligation on the indebtedness less capitalized net operating
income calculated in accordance with the agreement.
57
<PAGE> 58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
In connection with the mortgage note payable for Johnson City, the
Operating Partnership provided the lender with an unconditional guarantee for
the payment of the lesser of $6,200 or the outstanding balance of the loan plus
interest at the default rate which is 200 basis points higher than the interest
rate on the loan.
11. CONTINGENCIES
Litigation
In December 1994, the Estate of Amos Ginor ("Ginor") and Langhorne
Plaza Associates ("Langhorne") commenced a lawsuit, The Estate of Amos Ginor, et
al. v. Dennis Landsberg, et al., against various defendants, including Holdings
and GRT (collectively, the "Glimcher Entities"), that was pending in the United
States District Court for the Southern District of New York. Thereafter, the
Glimcher Entities filed motions for summary judgment which, on December 16,
1996, were granted in their entirety.
On January 26, 1996, ACPA Fund II, Ltd., et al. filed a lawsuit against
Dennis Landsberg, et al., including as defendants the Glimcher Entities that was
pending in the United States District Court for the Southern District of Texas,
Houston Division. Venue of the lawsuit was transferred to the United States
District Court for the Southern District of New York. The allegations contained
in the complaint are similar to the allegations contained in the Ginor lawsuit.
The Glimcher Entities filed motions for summary judgment in the Ginor lawsuit
which were granted in their entirety on December 16, 1996.
Environmental Matters
The Company was previously advised that the United States Environmental
Protection Agency (the "EPA") is likely to include its Stewart Plaza in
Mansfield, Ohio as part of a much larger National Priority List site, designated
by the EPA for remedial activities under the Federal hazardous site cleanup
program. This action is the result of the discovery of perchlorethylene (a
solvent used predominantly in cleaning) in drinking water wells located near the
property. In accordance with Federal law, the Company may, to some extent be
liable for costs associated with remedial activities which might be performed in
connection with the site. However, no contamination has been discovered on the
property itself and the Company believes its liability may be limited by the
fact that the property does not appear to be a source of the contamination on
the site. In the fourth quarter of 1996, the Company was advised by legal
counsel that the investigation will no longer include Stewart Plaza.
12. SHARE OPTION PLANS
GRT has established the Employee Share Option Plan (the "Employee
Plan") and the Trustee Share Option Plan (the "Trustee Plan") for the purpose of
attracting and retaining the Company's trustees, executive and other employees.
A maximum of 400,000 Shares have been reserved for issuance under the Employee
Plan and a maximum of 700,000 Shares have been reserved for issuance under the
Trustee Plan.
The Company applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized related to options granted under the
plans. Had compensation cost for the plans been determined based on the fair
value at the grant dates for grants under these plans consistent with SFAS No.
123, the Company's net income available to common shareholders would have been
decreased to the pro forma amounts indicated below:
58
<PAGE> 59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C> <C>
Net income available to As reported $27,781 $25,713
common shareholders Pro forma 27,742 25,710
Net income per Share available As reported $1.27 $1.27
to common shareholders Pro forma 1.27 1.27
</TABLE>
The fair value of each option grant was estimated on the date of the
grant using the Black-Scholes options pricing model with the following
assumptions: average risk free interest rates ranging from 5.82% to 6.90%,
expected average lives of five years, dividend rates of $1.9232 and volatility
of 14.39%.
The options exercisable at December 31, 1996, 1995 and 1994 under the
Trustee Plan were 90,333, 45,667 and 2,000, respectively. The options
exercisable at December 31, 1996 and 1995 under the Employee Plan were 76,333
and 49,333 respectively. There were no options exercisable under the Employee
Plan at December 31, 1994.
A summary of the status of the Company's two option plans at December
31, 1996, 1995 and 1994 and changes during the years ending on those dates is
presented below:
<TABLE>
<CAPTION>
1994 1995 1996
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- -------- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
TRUSTEE PLAN:
Outstanding at beginning of year - $ - $127,000 $20.250 129,000 $20.250
Granted 127,000 20.250 2,000 20.250 114,000 17.000
Exercised - - - - (1,000) 17.000
------- -------- -------
Outstanding at end of year 127,000 20.250 129,000 20.250 242,000 18.732
======= ======== =======
EMPLOYEE PLAN:
Outstanding at beginning of year - $ - $155,650 $20.250 163,000 $20.262
Granted 168,200 20.250 15,000 20.375 181,800 17.092
Forfeited (12,550) 20.250 (7,650) 20.250 (60,000) 19.221
-------- -------- --------
Outstanding at end of year 155,650 20.250 163,000 20.262 284,800 18.457
======== ======== =======
Options exercisable at year-end
under the Trustee Plan 2,000 45,667 90,333
Options exercisable at year-end
under the Employee Plan - 49,333 76,333
Weighted-average fair value of
options granted during the year $ - $ 0.8945 $ 0.4781
</TABLE>
59
<PAGE> 60
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table summarizes information regarding the options outstanding at
December 31, 1996 under the Company's two plans:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------------------- -----------------------------------------
NUMBER WEIGHTED-AVERAGE NUMBER
RANGE OF OUTSTANDING AT REMAINING WEIGHTED-AVERAGE EXERCISABLE AT WEIGHTED-AVERAGE
EXERCISE PRICES DECEMBER 31, 1996 CONTRACTUAL LIFE EXERCISE PRICE DECEMBER 31,1996 EXERCISE PRICE
- --------------- ----------------- ---------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
TRUSTEE PLAN:
$ 20.250 127,000 7.1 $ 20.250 85,333 $ 20.250
20.250 2,000 8.3 20.250 2,000 20.250
17.000 113,000 9.2 17.000 3,000 17.000
------- -------
17.000 - 20.250 242,000 8.1 18.732 90,333 20.142
======= =======
EMPLOYEE PLAN:
$ 20.250 107,000 7.1 $ 20.250 71,333 $ 20.250
20.375 15,000 8.8 20.375 5,000 20.375
16.250 - 20.250 162,800 9.2 17.102 - -
------- -------
16.250 - 20.375 284,800 8.4 18.457 76,333 20.258
======= =======
</TABLE>
All of the options granted in 1994 under the Employee Plan and all but
2,000 Shares granted in 1994 under the Trustee Plan will be exercisable at the
rate of 33.3% per annum over a three-year period beginning with the first
anniversary of the date of grant and will remain exercisable through the tenth
anniversary of such date. Options for 2,000 Shares which were granted under the
Trustee Plan were exercisable immediately, and remain exercisable through the
tenth anniversary of such date.
All of the options granted in 1995 under the Trustee Plan were
exercisable immediately. These options remain exercisable through the tenth
anniversary of the grant. All of the options granted in 1995 under the Employee
Plan will be exercisable at the rate of 33.3% per annum over a three-year period
beginning with the first anniversary of the date of grant and will remain
exercisable through the tenth anniversary of such date.
All but 20,000 Shares granted in 1996 under the Employee Plan will be
exercisable at the rate of 33.3% per annum over a three-year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. Options for 20,000 Shares will be
exercisable at the rate of 50.0% per annum over a two-year period beginning with
the first anniversary of the date of grant and will remain exercisable through
the tenth anniversary of such date. All but 4,000 Shares granted under the
Trustee Plan in 1996 will be exercisable at the rate of 33.3% per annum over a
three-year period beginning with the first anniversary of the date of grant and
will remain exercisable through the tenth anniversary of such date. Options for
4,000 Shares were exercisable immediately, and will remain exercisable through
the tenth anniversary of such date.
13. EMPLOYEE BENEFIT PLAN - 401(K) PLAN
In January 1996, the Company established a qualified retirement savings
plan under IRC 401(k) for eligible employees which contains a cash or deferred
arrangement which permits participants to defer up to a maximum of 15.0% of
their compensation, subject to certain limitations. Participant's salary
deferrals up to a maximum of 4.0% of qualified compensation will be matched at
50.0%. The Company matching will be in the form of GRT Shares. The Company
contributed $66 to the plan in 1996.
60
<PAGE> 61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
14. DISTRIBUTIONS
For the years ended December 31, 1996, 1995 and 1994, approximately
31.0%, 38.0% and 54.0%, respectively, of the distributions received by
shareholders were considered to be a return of capital for tax purposes. Also,
0.68% of each quarterly distribution declared in 1996 was designated and
considered to be long-term capital gain for tax purposes.
15. EARNINGS PER SHARE
Primary earnings per Share is computed based upon the weighted average
number of Shares outstanding during the periods presented. Assumed exercise of
outstanding share options are not materially dilutive for any of the periods
presented. The assumed conversion of the Preferred Shares results in an
anti-dilutive effect on the per Share amounts and are excluded from the
calculation.
In connection with GRT's IPO, an extraordinary loss of $5,864 was
generated relating to the early extinguishment of debt. For purposes of the
earnings per Share computation, GRT's share of the loss of $5,136 is
approximately $0.34 per Share.
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, cash in escrow,
tenant accounts receivable, accounts payable and accrued expenses are reasonable
estimates of their fair values because of the short maturity of these financial
instruments. The carrying value of the Credit Facility is also a reasonable
estimate of its fair value because it bears variable rate interest at current
market rates. Based on the discounted amount of future cash flows using rates
currently available to GRT for similar liabilities (ranging from 7.10% to 8.00%
per annum at December 31, 1996 and 7.63% to 8.23% per annum at December 31,
1995), the fair value of GRT's mortgage notes payable is estimated at $471,119
and $283,790 at December 31, 1996 and 1995, respectively. The fair value of the
debt instruments identified with GRT considers in part the credit of GRT as an
entity, and not just the individual entities and properties owned by GRT.
<TABLE>
<CAPTION>
17. ACQUISITIONS
NET
AMOUNT LIABILITIES
ACQUISITION PROPERTY NAME ALLOCATED TO AND DEBT
DATE AND LOCATION ASSETS ACQUIRED CASH ASSUMED
- ------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
ACQUISITION - 1995:
Sept. 1995 Twin County Plaza - Galax, VA............... $ 5,754 $ 5,601 $ 153
======== ======== ========
Acquisitions - 1996:
Jan. 1996 Delaware Community Plaza -
Delaware, OH................................ $ 12,368 $ 5,167 $ 7,201
Oct. 1996 RPI......................................... 201,852 48,943 152,909
-------- -------- --------
Total............................................................. $214,220 $ 54,110 $160,110
======== ======== ========
</TABLE>
61
<PAGE> 62
<TABLE>
<CAPTION>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
18. INTERIM FINANCIAL INFORMATION (UNAUDITED)
FIRST SECOND THIRD FOURTH 1995
YEAR ENDED DECEMBER 31, 1995 QUARTER QUARTER QUARTER QUARTER TOTAL
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues .............................................. $25,453 $25,218 $26,060 $27,517 $104,248
Income before minority interest in partnership................ 6,200 5,577 8,380 8,850 29,007
Net income applicable to Shares............................... 5,423 4,894 7,481 7,915 25,713
Net income per Share ......................................... 0.30 0.26 0.34 0.37 1.27
Distributions declared per Share.............................. 0.4675 0.4808 0.4808 0.4808 1.9099
Weighted average number of Shares outstanding
(in thousands)............................................ 18,359 18,514 21,866 21,880 20,169
<CAPTION>
FIRST SECOND THIRD FOURTH 1996
YEAR ENDED DECEMBER 31, 1996 QUARTER QUARTER QUARTER QUARTER TOTAL
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues .............................................. $27,248 $27,095 $27,634 $35,701 $117,678
Income before minority interest in partnership................ 7,163 7,628 7,508 9,135 31,434
Preferred stock dividends..................................... 268 268
Net income available to common shareholders................... 6,412 6,802 6,679 7,888 27,781
Net income per Share available to common shareholders ........ 0.29 0.31 0.31 0.36 1.27
Distributions declared per Share.............................. 0.4808 0.4808 0.4808 0.4808 1.9232
Weighted average number of Shares outstanding
(in thousands)............................................ 21,886 21,888 21,889 21,889 21,888
</TABLE>
62
<PAGE> 63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
19. PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The accompanying unaudited pro forma consolidated statements of
operations for the years ended December 31, 1996 and 1995, are presented as if
the acquisition of RPI and Delaware Community Plaza had been made as of January
1, 1996 and January 1, 1995, respectively.
The unaudited pro forma statements of operations are not necessarily
indicative of what the actual results of operations of the Company would have
been assuming the acquisition of RPI and Delaware Community Plaza had been
completed as of the beginning of the periods presented, nor are they indicative
of the results of operations for future periods.
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNT)
1996 1995
---- ----
<S> <C> <C>
Total revenues............................................................... $135,680 $130,623
-------- --------
Operating expenses:
Real estate taxes........................................................ 11,426 10,036
Recoverable operating expenses........................................... 15,393 13,664
-------- --------
26,819 23,700
Other operating expenses................................................. 3,246 2,244
-------- --------
Total operating expenses........................................... 30,065 25,944
-------- --------
Property net operating income.................................... 105,615 104,679
Depreciation and amortization................................................ 26,101 25,461
General and administrative................................................... 9,683 6,803
Gain on sales of outparcels.................................................. 1,506
Interest income.............................................................. 886 1,042
Interest expense............................................................. 41,705 42,449
Income from unconsolidated entities.......................................... 42
Minority interest in partnership............................................. 3,526 3,458
-------- ---------
Net income................................................................... 27,034 27,550
Preferred stock dividends.................................................... 268
-------- ---------
Net income available to common shareholders...................... $ 26,766 $ 27,550
======== =========
Earnings per common share of beneficial interest.................... $ 1.22 $ 1.37
======== =========
</TABLE>
63
<PAGE> 64
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center -
Ashland,
KY............................... (g) $3,866 $21,454 $5,108 $4,144 $26,562 $30,706
Grand Central Mall -
Parkersburg, WV................ $25,000 3,960 41,136 8,085 3,960 49,221 53,181
Indian Mound Mall -
Heath, OH...................... (f) 892 19,497 3,560 587 23,057 23,644
Morgantown Mall -
Morgantown, WV................. (i) 1,273 40,484 2,289 1,249 42,773 44,022
New Towne Mall -
New Philadelphia, OH........... (f) 1,190 23,475 7,529 1,248 31,004 32,252
River Valley Mall -
Lancaster, OH.................. (g) 875 26,910 11,397 1,002 38,307 39,309
Southside Mall - Oneonta, NY..... (g) 1,194 10,643 107 1,194 10,750 11,944
The Mall at Fairfield Commons -
Beavercreek, OH................ (f) 5,438 102,914 4,521 5,438 107,435 112,873
COMMUNITY SHOPPING CENTERS AND SINGLE TENANT RETAIL PROPERTIES
Applewood Village - Fremont, OH 3,797 410 3,676 410 3,676 4,086
Arnold Plaza - Arnold, MO....... (g) 527 4,965 43 527 5,008 5,535
Artesian Square - Martinsville, IN 5,340 760 6,791 760 6,791 7,551
Ashland Plaza - Ashland, KY...... (g) 312 1,633 457 312 2,090 2,402
Audubon Village -
Henderson, KY................. 4,350 606 5,453 606 5,453 6,059
Aviation Plaza - Oshkosh, WI....... 6,723 914 8,227 914 8,227 9,141
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center -
Ashland,
KY............................... $5,613 1989
Grand Central Mall -
Parkersburg, WV................ 4,521 1993
Indian Mound Mall -
Heath, OH...................... 7,703 1986
Morgantown Mall -
Morgantown, WV................. 8,912 1990
New Towne Mall -
New Philadelphia, OH........... 8,214 1988
River Valley Mall -
Lancaster, OH.................. 9,882 1987
Southside Mall - Oneonta, NY..... 793 1994
The Mall at Fairfield Commons -
Beavercreek, OH................ 10,738 1993
COMMUNITY SHOPPING CENTERS AND SINGLE TENANT RETAIL PROPERTIES
Applewood Village - Fremont, OH 15 1996
Arnold Plaza - Arnold, MO....... 352 1994
Artesian Square - Martinsville, IN 28 1996
Ashland Plaza - Ashland, KY...... 928 1968
Audubon Village -
Henderson, KY................. 23 1996
Aviation Plaza - Oshkosh, WI....... 34 1996
</TABLE>
64
<PAGE> 65
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- ---------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ayden Plaza - Ayden, NC........... (g) $ 138 $ 1,243 $ 138 $ 1,243 $ 1,381
Barren River Plaza - Glasgow, KY $8,101 1,215 10,932 1,215 10,932 12,147
Bollweevil Shopping Center -
Enterprise, AL.................. (g) 215 1,916 $ 3 215 1,919 2,134
Buckhannon - Tennerton, WV........ (g) 269 2,464 269 2,464 2,733
Cambridge Plaza -
Cambridge, OH................... (g) 195 691 344 195 1,035 1,230
Canal Place Plaza -
Rome, NY........................ (h) 420 6,264 119 420 6,383 6,803
Chatham - Chatham, NY............. 227 2,042 227 2,042 2,269
Chillicothe Plaza -
Chillicothe,OH.................. (g) 78 410 161 78 571 649
Clarksville Plaza -
Clarksville, IN................. (f) 127 621 466 127 1,087 1,214
College Plaza - Bluefield, VA (j) 1,072 9,650 1,072 9,650 10,722
Corry Plaza - Corry, PA........... (g) 265 2,472 81 265 2,553 2,818
Cross Creek Plaza -
Beaufort, SC................... (j) 1,317 11,854 1,317 11,854 13,171
Crossing Meadows -
Onalaska, WI................... 9,375 1,334 12,006 1,334 12,006 13,340
Crossroads Center -
Knoxville, TN................... 6,590 883 7,944 883 7,944 8,827
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ayden Plaza - Ayden, NC........... $91 1994
Barren River Plaza - Glasgow, KY 46 1996
Bollweevil Shopping Center -
Enterprise, AL.................. 140 1994
Buckhannon - Tennerton, WV........ 178 1994
Cambridge Plaza -
Cambridge, OH................... 610 1965
Canal Place Plaza -
Rome, NY........................ 404 1994
Chatham - Chatham, NY............. 128 1994
Chillicothe Plaza -
Chillicothe,OH.................. 177 1964
Clarksville Plaza -
Clarksville, IN................. 246 1968
College Plaza - Bluefield, VA 40 1996
Corry Plaza - Corry, PA........... 185 1994
Cross Creek Plaza -
Beaufort, SC................... 49 1996
Crossing Meadows -
Onalaska, WI................... 50 1996
Crossroads Center -
Knoxville, TN................... 33 1996
</TABLE>
65
<PAGE> 66
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
X COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cumberland Crossing -
Jacksboro, TN................. $5,137 $729 $6,562 $729 $6,562 $ 7,291
Cypress Bay Village
Morehead City, NC............. (j) 1,121 10,089 1,121 10,089 11,210
Dallas Plaza -
Balch Springs, TX............... (g) 262 2,326 262 2,326 2,588
Daytona Plaza -
Daytona Beach, FL.............. (g) 420 3,807 $45 420 3,852 4,272
Delaware Community Plaza -
Delaware, OH.................. 8,380 1,250 11,118 1,250 11,118 12,368
East Point Plaza -
Columbia, SC.................. 11,111 1,255 11,294 1,255 11,294 12,549
East Pointe Plaza -
Marysville, OH................. (f) 453 4,112 3,401 427 7,513 7,940
Franklin Square -
Spartanburg, SC.............. (j) 977 8,789 977 8,789 9,766
Georgesville Square Phase I -
Columbus, OH.................. 13,515 7,806 1,623 7,806 9,429
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cumberland Crossing -
Jacksboro, TN................. $27 1996
Cypress Bay Village
Morehead City, NC............. 42 1996
Dallas Plaza -
Balch Springs, TX............... 169 1994
Daytona Plaza -
Daytona Beach, FL.............. 285 1994
Delaware Community Plaza -
Delaware, OH.................. 258 1996
East Point Plaza -
Columbia, SC.................. 47 1996
East Pointe Plaza -
Marysville, OH................. 808 1992
Franklin Square -
Spartanburg, SC.............. 37 1996
Georgesville Square Phase I -
Columbus, OH.................. 16 1996
</TABLE>
66
<PAGE> 67
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUIDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Union Plaza -
South Glens Falls, NY.......... $507 $4,566 $507 $ 4,566 $ 5,073
Gratiot Center - Saginaw, MI..... (h) 1,196 10,778 $12 1,196 10,790 11,986
Hills Plaza East - Erie, PA...... (g) 241 2,240 9 241 2,249 2,490
Hocking Valley Mall -
Lancaster, OH.................. (g) 606 5,550 73 606 5,623 6,229
Horizon Park - Longmont, CO...... (g) 219 1,908 219 1,908 2,127
Hunter's Ridge Shopping
Center - Gahanna,OH............ (h) 850 7,713 11 850 7,724 8,574
Huntington Plaza -
Huntington, WV................. 175 525 29 175 554 729
Indian Mound Plaza -
Heath, OH...................... 22 384 39 22 423 445
Kmart - Alliance, NE............. (g) 175 1,567 6 175 1,573 1,748
Kmart - Bloomington IN........... (g) 298 2,689 298 2,689 2,987
Kmart - Clifton Heights, PA...... (g) 277 2,491 277 2,491 2,768
Kmart - Fairhaven, MA............ (g) 221 1,995 221 1,995 2,216
Kmart - Feasterville, PA......... (g) 244 2,204 244 2,204 2,448
Kmart - Langhorne, PA............ (g) 314 2,936 314 2,936 3,250
Kmart - Leechburg, PA............ (g) 261 2,338 12 261 2,350 2,611
Kmart - Norfolk, VA.............. (g) 188 1,662 188 1,662 1,850
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Grand Union Plaza -
South Glens Falls, NY.......... $295 1994
Gratiot Center - Saginaw, MI..... 696 1994
Hills Plaza East - Erie, PA...... 160 1994
Hocking Valley Mall -
Lancaster, OH.................. 405 1994
Horizon Park - Longmont, CO...... 134 1994
Hunter's Ridge Shopping
Center - Gahanna, OH........... 441 1994
Huntington Plaza -
Huntington, WV................. 172 1966
Indian Mound Plaza -
Heath, OH...................... 86 1988
Kmart - Alliance, NE............. 114 1994
Kmart - Bloomington IN........... 193 1994
Kmart - Clifton Heights, PA...... 181 1994
Kmart - Fairhaven, MA............ 144 1994
Kmart - Feasterville, PA......... 160 1994
Kmart - Langhorne, PA............ 211 1994
Kmart - Leechburg, PA............ 170 1994
Kmart - Norfolk, VA.............. 121 1994
</TABLE>
67
<PAGE> 68
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kmart - Seekonk, MA........... (g) $244 $2,182 $244 $2,182 $2,426
Kmart Shopping Center -
Puyallup, WA............... (g) 426 3,870 426 3,870 4,296
Kmart - Yakima, WA............ (g) 256 2,305 256 2,305 2,561
Knox Village Square -
Mount Vernon, OH........... (g) 865 8,479 $89 865 8,568 9,433
Lexington Parkway Plaza -
Lexington, NC............... $7,538 1,003 9,029 1,003 9,029 10,032
Liberty Plaza - Morristown,TN. (g) 369 3,312 369 3,312 3,681
Linden Corners - Buffalo, NY.. (g) 414 3,726 414 3,726 4,140
Logan Place - Russellville, KY 2,415 367 3,307 367 3,307 3,674
Lowe's - Altoona, PA.......... (h) 1,452 4,877 1 1,452 4,878 6,330
Lowe's - Columbus, OH........ (h) 1,330 4,569 1,330 4,569 5,899
Lowe's - Marion, OH.......... (g) 626 2,454 626 2,454 3,080
Lowe's - Wooster, OH.......... (g) 500 2,515 4 520 2,519 3,039
Loyal Plaza - Loyalsock, PA... (g) 1,718 15,513 6 1,718 15,519 17,237
Marion Towne Center -
Marion, SC................. 5,740 754 6,787 754 6,787 7,541
Middletown Plaza -
Middletown, OH.............. 127 1,159 34 127 1,193 1,320
Mill Run - Columbus, OH....... (h) 2,711 6,935 74 2,711 7,009 9,720
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Kmart - Seekonk, MA........... $159 1994
Kmart Shopping Center -
Puyallup, WA............... 281 1994
Kmart - Yakima, WA............ 168 1994
Knox Village Square -
Mount Vernon, OH........... 884 1992
Lexington Parkway Plaza -
Lexington, NC............... 38 1996
Liberty Plaza - Morristown,TN. 241 1994
Linden Corners - Buffalo, NY.. 271 1994
Logan Place - Russellville, KY 14 1996
Lowe's - Altoona, PA.......... 253 1994
Lowe's - Columbus, OH........ 229 1994
Lowe's - Marion, OH.......... 213 1993
Lowe's - Wooster, OH.......... 218 1993
Loyal Plaza - Loyalsock, PA... 1,150 1994
Marion Towne Center -
Marion, SC................. 28 1996
Middletown Plaza -
Middletown, OH.............. 129 1972
Mill Run - Columbus, OH....... 330 1995
</TABLE>
68
<PAGE> 69
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Monroe Shopping Center -
Madisonville, TN..................... (g) $375 $3,522 $375 $3,522 $3,897
Morgantown Commons -
Morgantown, WV....................... (i) 175 7,549 $120 358 7,669 8,027
Morgantown Commons
Expansion - Morgantown, WV .......... $9,455 10,698 10,698 10,698
Morgantown Plaza -
Star City, WV........................ (f) 305 1,137 673 305 1,810 2,115
Morningside Plaza -
Dade City, FL........................ (g) 487 4,300 63 487 4,363 4,850
Mount Vernon Plaza -
Mount Vernon, OH..................... 58 431 340 58 771 829
New Boston Mall -
Portsmouth, OH....................... (g) 537 4,906 6 537 4,912 5,449
Newberry Square Shopping
Center - Newberry, SC................ (h) 594 5,355 1 594 5,356 5,950
Newport Plaza II -
Newport, KY.......................... (g) 462 4,176 462 4,176 4,638
North Horner - Sanford, NC............. (g) 206 1,875 206 1,875 2,081
Northtowne Square -
Chattanooga,TN....................... (g) 390 3,516 16 390 3,532 3,922
Ohio River Plaza -
Gallipolis, OH....................... (f) 502 6,373 29 461 6,402 6,863
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Monroe Shopping Center -
Madisonville, TN..................... $252 1994
Morgantown Commons -
Morgantown, WV....................... 1,335 1991
Morgantown Commons
Expansion - Morgantown, WV .......... 1996
Morgantown Plaza -
Star City, WV........................ 688 1967
Morningside Plaza -
Dade City, FL........................ 321 1994
Mount Vernon Plaza -
Mount Vernon, OH..................... 526 1963
New Boston Mall -
Portsmouth, OH....................... 368 1994
Newberry Square Shopping
Center - Newberry, SC................ 303 1994
Newport Plaza II -
Newport, KY.......................... 304 1994
North Horner - Sanford, NC............. 136 1994
Northtowne Square -
Chattanooga,TN....................... 257 1994
Ohio River Plaza -
Gallipolis, OH....................... 1,145 1989
</TABLE>
69
<PAGE> 70
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Pea Ridge - Huntington, WV............. (g) $687 $6,160 $49 $687 $6,209 $6,896
Perdido Point Plaza -
Pensacola, FL....................... (g) 329 2,957 329 2,957 3,286
Piedmont Plaza -
Greenwood, SC $10,125 1,070 9,632 1,070 9,632 10,702
Plaza Vista Mall -
Sierra Vista, AZ..................... (f) 1,531 6,436 3,734 1,396 10,170 11,566
Prestonsburg Village Center -
Prestonsburg, KY..................... (h) 663 6,002 663 6,002 6,665
Rend Lake Shopping Center -
Benton, IL........................... (g) 462 4,175 462 4,175 4,637
Rhea County Shopping Center -
Dayton, TN........................... (g) 395 3,524 395 3,524 3,919
River Edge Plaza -
Sevierville, TN...................... (g) 553 5,054 553 5,054 5,607
River Valley Plaza -
Lancaster, OH........................ (g) 320 5,035 180 304 5,215 5,519
Roane County Plaza -
Rockwood, TN........................ 5,123 630 5,669 630 5,669 6,299
Scott Town Plaza -
Bloomsburg, PA....................... (g) 188 1,730 1 188 1,731 1,919
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Pea Ridge - Huntington, WV............. $450 1994
Perdido Point Plaza -
Pensacola, FL....................... 216 1994
Piedmont Plaza -
Greenwood, SC 40 1996
Plaza Vista Mall -
Sierra Vista, AZ..................... 1,586 1988
Prestonsburg Village Center -
Prestonsburg, KY..................... 337 1994
Rend Lake Shopping Center -
Benton, IL........................... 309 1994
Rhea County Shopping Center -
Dayton, TN........................... 256 1994
River Edge Plaza -
Sevierville, TN...................... 365 1994
River Valley Plaza -
Lancaster, OH........................ 975 1988
Roane County Plaza -
Rockwood, TN........................ 24 1996
Scott Town Plaza -
Bloomsburg, PA....................... 134 1994
</TABLE>
70
<PAGE> 71
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shady Springs Plaza -
Beaver, WV........................... (g) $455 $4,094 $84 $455 $4,178 $4,633
Sidney Shopping Center -
Sidney, NY........................... 518 4,656 518 4,656 5,174
Southside Plaza - Sanford, NC.......... $6,547 960 8,644 960 8,644 9,604
Springfield Commons West -
Springfield, OH...................... (h) 859 8,707 859 8,707 9,566
Steamboat Bend -
Hannibal, MO......................... (f) 100 1,649 402 100 2,051 2,151
Stewart Plaza -
Mansfield, OH......................... 563 1,867 140 264 2,007 2,271
Sunbury Plaza - Sunbury, PA............ (g) 448 4,074 448 4,074 4,522
Sycamore Square -
Ashland City, TN.................... (j) 334 3,010 334 3,010 3,344
Target Plaza - Heath, OH............... 171 17 171 17 188
Torresdale Plaza -
Philadelphia, PA..................... (g) 476 4,282 476 4,282 4,758
Twin County Plaza -
Galax, VA............................ 575 5,199 6 575 5,205 5,780
Village Plaza - Augusta, GA............ 18,887 2,194 19,747 2,194 19,747 21,941
Village Plaza - Manhattan, KS.......... 100 1,481 269 100 1,750 1,850
Village Square - Kutztown, PA.......... (g) 225 2,013 36 225 2,049 2,274
Vincennes - Vincinnes, IN............ (g) 208 1,875 208 1,875 2,083
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shady Springs Plaza -
Beaver, WV........................... $298 1994
Sidney Shopping Center -
Sidney, NY........................... 291 1994
Southside Plaza - Sanford, NC.......... 36 1996
Springfield Commons West -
Springfield, OH...................... 398 1995
Steamboat Bend -
Hannibal, MO......................... 359 1988
Stewart Plaza -
Mansfield, OH......................... 834 1979
Sunbury Plaza - Sunbury, PA............ 297 1994
Sycamore Square -
Ashland City, TN.................... 12 1996
Target Plaza - Heath, OH............... 1 1995
Torresdale Plaza -
Philadelphia, PA..................... 312 1994
Twin County Plaza -
Galax, VA............................ 174 1995
Village Plaza - Augusta, GA............ 82 1996
Village Plaza - Manhattan, KS.......... 360 1988
Village Square - Kutztown, PA.......... 147 1994
Vincennes - Vincinnes, IN............ 137 1994
</TABLE>
71
<PAGE> 72
<TABLE>
<CAPTION>
GLIMCHER REALTY TRUST
SCHEDULE III--REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
COSTS CAPITALIZED
SUBSEQUENT GROSS AMOUNTS AT WHICH
INITIAL COST TO ACQUISITION CARRIED AT CLOSE OF PERIOD
--------------------- ----------------- --------------------------
BUILDINGS BUILDINGS
AND AND
DESCRIPTION AND LOCATION IMPROVEMENTS IMPROVEMENTS TOTAL
OF PROPERTY ENCUMBRANCES (d) LAND (a) IMPROVEMENTS LAND (e) (b)(c)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Walgreens - Louisville, KY............. (g) $128 $1,141 $27 $128 $1,168 $1,296
Walgreens - New Albany, IN............. (g) 123 1,093 28 123 1,121 1,244
Wal-Mart Plaza -
Springfield, OH...................... (h) 875 7,952 875 7,952 8,827
Walnut Cove -
Walnut Cove, NC...................... (g) 209 1,855 209 1,855 2,064
Walterboro Plaza -
Walterboro, SC...................... (j) 629 5,660 629 5,660 6,289
Westpark Plaza -
Carbondale, IL....................... (g) 432 3,881 432 3,881 4,313
PARTNERSHIPS
Glimcher Properties Limited
Partnership ......................... 1,780 1,057 2,837 2,837
------ ------- ------ ------ ------- -------
76,896 772,616 73,884 78,339 846,500 924,839
------ ------- ------ ------ ------- -------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Phase II -
Columbus, OH......................... $13,515 5,279 4,628 5,279 9,907
Meadowview Square -
Kent, OH............................. 7,108 8,185 2,114 8,185 10,299
Other Developments..................... 3,983 110 3,983 4,093
------ ------- ------- ------ -------- --------
17,447 6,852 17,447 24,299
------- ------ -------- --------
TOTAL.................................. $76,896 $772,616 $91,331 85,191 $863,947 $949,138
======= ======== ======= ====== ======== ========
DATE
CONSTRUCTION
DESCRIPTION AND LOCATION ACCUMULATED WAS DATE
OF PROPERTY DEPRECIATION COMPLETED ACQUIRED
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Walgreens - Louisville, KY............. $83 1994
Walgreens - New Albany, IN............. 80 1994
Wal-Mart Plaza -
Springfield, OH...................... 234 1995
Walnut Cove -
Walnut Cove, NC...................... 135 1994
Walterboro Plaza -
Walterboro, SC...................... 24 1996
Westpark Plaza -
Carbondale, IL....................... 283 1994
PARTNERSHIPS
Glimcher Properties Limited
Partnership ......................... 1,406
-------
86,421
-------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Phase II -
Columbus, OH.........................
Meadowview Square -
Kent, OH.............................
Other Developments.....................
-------
-------
TOTAL.................................. $86,421
=======
</TABLE>
72
<PAGE> 73
GLIMCHER REALTY TRUST
NOTES TO SCHEDULE III
(DOLLARS IN THOUSANDS)
(a) Initial cost for constructed and acquired property is cost at end
of first complete calendar year subsequent to opening or acquisition. For
centers that opened during 1996 and have not yet completed their first calendar
year subsequent to opening, the initial cost is cost incurred through December
31, 1996.
(b) The aggregate gross cost of land and buildings, improvements and
equipment for federal income tax purposes is approximately $939,244.
(c) RECONCILIATION OF REAL ESTATE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year ........ $ 696,898 $ 644,379 $ 351,205
Additions:
Improvements .................. 41,841 46,765 99,697
Acquisitions .................. 214,220 5,754 193,477
Deductions .......................... (3,821)
--------- --------- ---------
Balance at close of year ............ $ 949,138 $ 696,898 $ 644,379
========= ========= =========
</TABLE>
RECONCILIATION OF ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year ........ $ 66,699 $ 48,966 $ 33,496
Depreciation expense .............. 20,124 17,733 15,470
Deductions ........................ (402)
-------- -------- --------
Balance at close of year ............ $ 86,421 $ 66,699 $ 48,966
======== ======== ========
</TABLE>
(d) See description of debt in notes 3 and 4 of Notes to Consolidated
Financial Statements.
(e) Depreciation is computed based upon the following estimated lives:
Buildings and improvement .................... 40 years
Equipment and fixtures .......................5-10 years
(f) Properties are unencumbered but constitute a negative pledge pool for
the Credit Facility with a consortium of banks of up to $175,000.
(g) Properties cross-collateralize the following loans:
Glimcher Holdings Limited Partnership Loan A .........$40,000
Glimcher Holdings Limited Partnership Loan B .........$40,000
Glimcher Centers Limited Partnership ..................$76,000
(h) Properties cross-collateralize the following loan:
Glimcher Properties Limited Partnership .............. $50,000
(i) Properties cross-collateralize the following loan:
Morgantown Mall Associates Limited Partnership ........$50,200
(j) Properties cross-collateralize a bridge facility for $34,372.
73
<PAGE> 1
Exhibit 21.1
List of Subsidiaries
Glimcher Realty Trust ("GRT") has the following subsidiaries:
1. Glimcher Properties Corporation, a Delaware corporation (100%
shareholder);
2. Glimcher Properties Limited Partnership, a Delaware limited
partnership (approximately 89% limited partnership interest); and
3. Glimcher Johnson City, Inc., a Delaware Corporation (100%
shareholder).
Glimcher Properties Corporation has the following subsidiaries:
1. Glimcher Holdings, Inc., a Delaware corporation (100%
shareholder);
2. Glimcher Centers, Inc., a Delaware corporation (100%
shareholder);
3. Glimcher Grand Central, Inc., a Delaware corporation (100%
shareholder);
4. Glimcher York, Inc., a Delaware corporation (100% shareholder).
Glimcher Properties Limited Partnership has the following subsidiaries:
1. Glimcher Holdings Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
2. Glimcher Centers Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
3. Grand Central Limited Partnership, a Delaware limited partnership
(99% limited partnership interest);
4. Glimcher York Associates Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
5. Morgantown Mall Associates Limited partnership, an Ohio Limited
partnership (99% limited partnership interest);
6. Olathe Mall L.L.C., a Colorado limited liability company
(approximately 82% member interest);
7. Johnson City Venture L.L.C., a Delaware limited liability company
(approximately 32% member interest); and
8. Glimcher Development Corporation, a Delaware corporation (95%
shareholder).
<PAGE> 1
Exhibit 23.1
Consent of Independent Accounts
We consent to the incorporation by reference in the registration statements of
Glimcher Realty Trust on Forms S-3 (Files Nos. 33-90730 and 33-91084) and on
Forms S-8 (File No. 33-94542 and 333-10221) of our report dated February 21,
1997, on our audits of the consolidated financial statements and financial
statement schedule of Glimcher Realty Trust as of December 31, 1996 and 1995,
and for each of the years then ended which is included in this Annual Report on
Form 10-K.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
March 19, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 8,968
<SECURITIES> 0
<RECEIVABLES> 21,286
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 949,138
<DEPRECIATION> 86,421
<TOTAL-ASSETS> 949,402
<CURRENT-LIABILITIES> 0
<BONDS> 470,929
<COMMON> 219
0
0
<OTHER-SE> 316,673
<TOTAL-LIABILITY-AND-EQUITY> 949,402
<SALES> 0
<TOTAL-REVENUES> 117,678
<CGS> 0
<TOTAL-COSTS> 27,212
<OTHER-EXPENSES> 31,789
<LOSS-PROVISION> 2,072
<INTEREST-EXPENSE> 29,297
<INCOME-PRETAX> 27,781
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,781
<EPS-PRIMARY> 1.27
<EPS-DILUTED> 1.27
</TABLE>
<PAGE> 1
Exhibit 99
Second Amendment To First Amended And Restated Loan Agreement
This Second Amendment to First Amended and Restated Loan Agreement (this
"Amendment") is entered into at Columbus, Ohio, by and among The Huntington
National Bank, KeyBank National Association, The First National Bank of Chicago,
Fleet National Bank, Star Bank, National Association, Corestates Bank, National
Association, PNC Bank, Ohio, National Association, The Provident Bank and
National City Bank of Columbus, as lenders (the "Banks"); The Huntington
National Bank and KeyBank National Association, as co-agents (the "Co-Agents");
The Huntington National Bank, as administrative agent (the "Administrative
Agent"); Glimcher Properties Limited Partnership, as borrower (the "Company");
and Glimcher Realty Trust and Glimcher Properties Corporation, as guarantors
(collectively the "Guarantor"), as of the 26th day of November, 1996, in order
to amend the First Amended and Restated Loan Agreement entered into by and among
The Huntington National Bank, KeyBank National Association (in each case in
their respective roles as lenders and agents), the Company and the Guarantor as
of the 30th day of June, 1995, as thereafter amended as of the 17th day of
October, 1995 (the "Loan Agreement").
Whereas, the parties to this Amendment desire to amend certain of the
provisions of the Loan Agreement, the Loan Agreement is hereby amended as
follows:
1. Section 8.15 of the Loan Agreement is hereby amended to recite in its
entirety as follows:
Except for any restrictions imposed by governmental authorities, there
do not now and will not in the future exist any restrictions on the
payment to the Company or the Guarantor of the cash flow from any of
the respective properties of the Company or the Guarantor after
payment of the debt service and operating expenses and funding of any
required maintenance or capital improvement reserve associated with
such property, nor will there exist any such restrictions as to that
portion of the cash flow from any Joint Venture (as defined in Section
10.14 of this Agreement) that is payable to the Company or the
Guarantor by reason of their respective pro rata ownership interests
in such Joint Venture.
2. Section 10.9 of the Loan Agreement is hereby amended to recite in its
entirety as follows:
Neither the Company nor the Guarantor will purchase for investment
securities of any kind excepting (a) bonds or other obligations of the
United States; (b) certificates of deposit issued by commercial banks
with a capital of at least $100,000,000.00; (c) commercial paper rated
at least A-1 or P-1; (d) such money market funds and similar
investments as are acceptable to the Co-Agents; (e) investments in
each other; and (f) investments in Glimcher/Glaziers LA MetroMall LLC,
Glimcher/Glaziers NJ MetroMall LLC, California MetroMall LLC,
Elizabeth MetroMall LLC, Olathe Mall LLC and Great Plains MetroMall
LLC, which entities have been or will be formed in connection with
Company's and/or Guarantor's investment in regional shopping malls to
be located in Olathe, Kansas, Elizabeth, New Jersey and Carson,
California.
3. Section 10.14 of the Loan Agreement is hereby amended to recite in its
entirety as follows:
Investments in Joint Ventures by the Company and the Guarantor,
whether in the form of equity or inter-company debt, shall not exceed
$175,000,000.00 without prior written approval of the Majority Banks,
which approval shall not be unreasonably withheld. Investments in
Joint Ventures that own real estate projects that have not yet been
opened to the general shopping public shall not exceed $135,000,000.00
without such approval.
-1-
<PAGE> 2
"Joint Venture" shall mean any business entity that is an
unconsolidated Subsidiary of the Company or the Guarantor or of any
Subsidiary or Joint Venture of either, and any business entity in
which the Company, the Guarantor and their Subsidiaries and Joint
Ventures hold in the aggregate less than a 100% ownership interest.
4. Section 10.26 of the Loan Agreement is hereby amended to recite in its
entirety as follows:
Neither the Company nor the Guarantor shall enter into any agreement
with any party that contains (a) a negative pledge, (b) an agreement
not to convey or permit liens or (c) any comparable covenant.
Notwithstanding the provisions of the foregoing sentence to the
contrary, the Company and/or the Guarantor shall be permitted to enter
into agreements containing a negative pledge, an agreement not to
convey or permit liens or comparable covenants (in the aggregate,
"Negative Pledge Covenants") under the following circumstances: (i)
Negative Pledge Covenants may be provided in the Collateral Assignment
of Preferred Partnership Interest (the "Security Agreement") in which
Guarantor grants a security interest to Nomura Asset Capital
Corporation (or an affiliate thereof) in preferred partnership
interests issued by Borrower to Guarantor, to the extent any such
security interest secures: Guarantor's obligation to repay, redeem or
repurchase, in the event of the sale or refinance of a shopping mall,
monies paid by Nomura Asset Capital Corporation or an affiliate
thereof to purchase preferred stock, the proceeds of which were used
by Guarantor, directly or indirectly, to acquire or construct any of
the shopping malls associated with the entities described in Section
10.9(f) hereof, as modified; Guarantor's obligation to pay dividends
on equity interests issued by Guarantor in return for such
contributions; and obligations of Guarantor relating to its entering
into the Security Agreements; (ii) Negative Pledge Covenants may be
given to lenders in documenting any first mortgage financing obtained
in order to acquire, construct, develop, redevelop, expand or
renovate, either directly or indirectly, properties owned or to be
acquired with the proceeds of such mortgage financing by Company or
Guarantor, provided that such Negative Pledge Covenants relate solely
to the properties being financed; and (iii) Negative Pledge Covenants
may be given to the extent the same are customary in any easement
agreements, development agreements, redevelopment agreements, or
similar agreements entered into in connection with financing of the
type described in (ii) above; provided, however, that in no event
shall any Negative Pledge Covenants be given with respect to the
Negative Pledge Pool.
5. A new Section 10.28 is added to the Loan Agreement to read as follows:
10.28 Ratio of Project Costs to Asset Value.
-------------------------------------
The Company's and the Guarantor's pro-rated share of the aggregate
budgeted project costs of all projects under construction and not yet
open to the general shopping public for a period of six months,
excluding any infrastructure or off-site improvement costs that have
been publicly financed, shall not exceed 25% of Asset Value, as
defined in Section 10.29 hereof. The Company's and the Guarantor's
pro-rated share of such project costs shall be deemed to be the higher
of the percentage of their liability for indebtedness incurred in
connection with the project or their percentage ownership interest in
such project.
6. A new Section 10.29 is added to the Loan Agreement to read as follows:
10.29 Total Debt to Asset Value.
-------------------------
-2-
<PAGE> 3
(a) The consolidated total debt of the Company, the Guarantor and
their respective Subsidiaries (determined in accordance with generally
accepted accounting principles) shall not exceed 60% of Asset Value,
to be tested quarterly beginning March 31, 1997, as of the end of each
fiscal quarter, and, prior to March 31, 1997, to be tested monthly and
the calculations to be provided to the Administrative Agent no later
than 30 days following each month end. "Asset Value" shall mean the
aggregate of the Company's, the Guarantor's and their respective
Subsidiaries' consolidated earnings before interest, income taxes,
depreciation and amortization and minority interest expense for the
preceding twelve months (all as determined in accordance with
generally accepted accounting principles) capitalized at a rate of
9.5% (substituting, as to properties owned for less than 12 months,
the actual purchase price of such properties); plus the market value
of each property under development, which shall be equal to its cost
to date until the earlier of (i) 48 months from the beginning of
construction of such development property, (ii) 30 months from the
issuance of the Certificate of Occupancy for such development
property, or (iii) 24 months from the opening of such development
property to the general shopping public, and thereafter in accordance
with the formula stated in the first part of this sentence; plus
unrestricted cash and cash substitutes.
(b) The consolidated total debt of the Company, the Guarantor and
their respective Subsidiaries (determined in accordance with generally
accepted accounting principles), plus, as to unconsolidated
affiliates, the product of the outstanding debt of such affiliates and
the greater of (i) the percentage of such affiliates' debt for which
creditors of such affiliates have recourse to the Company or the
Guarantor, or (ii) the percentage of the aggregate ownership of the
Company and the Guarantor in such affiliate (the "Glimcher
Percentage"), shall not exceed 65% of Total Asset Value, to be tested
quarterly beginning March 31, 1997, as of the end of each fiscal
quarter, and, prior to March 31, 1997, to be tested monthly and the
calculations to be provided to the Administrative Agent no later than
30 days following each month end. "Total Asset Value" shall mean the
aggregate of the Company's, the Guarantor's and their respective
Subsidiaries' consolidated earnings before interest, income taxes,
depreciation and amortization and minority interest expense ("EBITDA")
for the preceding twelve months, less income from investments in joint
ventures (all as determined in accordance with generally accepted
accounting principles), plus the product of the EBITDA of each
unconsolidated affiliate and the Glimcher Percentage with respect to
such affiliate, capitalized at a rate of 9.5% (substituting, as to
properties owned for less than 12 months, the actual purchase price of
such properties); plus the product of the Glimcher Percentage and the
market value of each property under development, which shall be equal
to its cost to date until the earlier of (i) 48 months from the
beginning of construction of such development property, (ii) 30 months
from the issuance of the Certificate of Occupancy for such development
property, or (iii) 24 months from opening of such development property
to the general shopping public, and thereafter in accordance with the
formula stated in the first part of this sentence; plus unrestricted
cash and cash substitutes.
(c) Upon any non-compliance with this Section 10.29, the Company and
the Guarantor shall promptly execute and deliver to the Administrative
Agent all such instruments, agreements and other writings reasonably
required to convey to the
-3-
<PAGE> 4
Co-Agents a first lien against the Negative Pledge Pool as security
for all the obligations of the Company and the Guarantor pursuant to
this Agreement and to the promissory notes executed in connection
herewith.
7. A new Section 10.30 is added to the Loan Agreement, to read as
follows:
10.30 EBITDA to Total Debt Service of Consolidated and Unconsolidated
---------------------------------------------------------------
Affiliates.
----------
The ratio of the Company's, the Guarantor's and their respective
Subsidiaries' consolidated earnings before interest, income taxes,
depreciation and amortization and minority interest ("EBITDA"), plus,
as to unconsolidated affiliates, the product of the EBITDA of each
such affiliate and the greater of (i) the percentage of such
affiliates' debt for which creditors of such affiliates' debt have
recourse to the Company or the Guarantor, or (ii) the percentage of
the aggregate ownership of the Company and the Guarantor in such
affiliate, to "Total Consolidated and Unconsolidated Debt Service"
shall be not less than 1.75, calculated as of the end of each fiscal
quarter for the four calendar quarters preceding such date. "Total
Consolidated and Unconsolidated Debt Service" shall mean Total Debt
Service as defined in Section 10.24, plus, as to unconsolidated
affiliates, the product of total interest plus scheduled debt
amortization, excluding balloon payments of such affiliate, and the
Glimcher Percentage (as defined in Section 10.29) as to each such
affiliate.
8. A new section 10.31 is added to the Loan Agreement to read as follows:
10.31 Notice of Other Defaults.
------------------------
The Company and the Guarantor shall give prompt written notice to the
Co-Agents (a) upon the failure of the Guarantor to make any preferred
dividend payment owing to Nomura Asset Capital Corporation or any of
its affiliates, or (b) upon the occurrence of any default by the
Company, the Guarantor or any of their affiliates in the performance
of any obligation owing to Nomura Asset Capital Corporation or any of
its affiliates under any instrument, agreement or other writing.
9. Section 12.1(i) of the Loan Agreement is hereby amended to recite in
its entirety as follows:
12.1 Nature of Events.
----------------
(i) the Company or the Guarantor fails to make any payment or to
perform or observe any covenant owing to any of the Banks or to
any third party pursuant to any agreement to repay borrowed
money, and any applicable grace period has expired, to the extent
that such failure as to any indebtedness to any third party
permits such third party to accelerate the maturity of the
indebtedness and the indebtedness exceeds $8,000,000.00, or there
shall exist any Default by Glimcher Realty Trust in the
performance of any of its obligations pursuant to its Articles
Supplementary (as Default is defined therein).
10. The Company and the Guarantor represent and warrant that no Event of
Default has occurred and is continuing, nor will any occur immediately after the
execution and delivery of this Amendment by the performance or observance of any
provision hereof or thereof.
-4-
<PAGE> 5
11. Each reference to the Loan Agreement, whether by use of the phrase
"Loan Agreement," "Agreement," the prefix "herein" or any other term, and
whether contained in the Loan Agreement itself, in this Amendment, in any
document executed concurrently herewith or in any loan documents executed
hereafter, shall be construed as a reference to the Loan Agreement as previously
amended and as amended by this Amendment.
12. Except as previously amended and as modified herein, the Loan Agreement
and the Loan Documents shall remain as written originally and in full force and
effect in all respects, and nothing herein shall affect, modify, limit or impair
any of the rights and powers which the Banks may have thereunder.
13. The Company and the Guarantor agree to perform and observe all the
covenants, agreements, stipulations, and conditions to be performed on its part
under the Loan Agreement, the promissory notes and guarantees executed and
delivered in connection herewith, the Loan Documents, and all other related
agreements, as amended by this Amendment.
14. The Company and the Guarantor hereby represent and warrant to the
Co-Agents and the Banks that (a) the Company and the Guarantor have legal power
and authority to execute and deliver the within Amendment; (b) the respective
officers executing the within Amendment on behalf of the Company and the
Guarantor have been duly authorized to execute and deliver the same and bind the
Company and the Guarantor with respect to the provisions provided for herein and
therein; (c) the execution by the Company and Guarantor and the performance and
observance by the Company and the Guarantor of the provisions hereof do not
violate or conflict with the articles of incorporation, regulations or by-laws
of the Company or the Guarantor or any law applicable to the Company or the
Guarantor or result in the breach of any provision of or constitute a default
under any agreement, instrument or document binding upon or enforceable against
the Company or the Guarantor; and (d) this Amendment constitute valid and
legally binding obligations upon the Company and the Guarantor, subject to
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally, to general equitable principles and to
applicable doctrines of commercial reasonableness.
15. This Amendment shall become effective only upon its execution by the
Company, the Guarantor and the Co-Agents. Execution by the parties hereto may be
in any number of counterparts, but all of such counterparts when taken together
shall constitute one and the same document.
16. The capitalized terms used herein shall have the same meanings as the
capitalized terms used in the Loan Agreement.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the Company, the Guarantor, the Banks, the Co-Agents
and the Administrative Agent have hereunto set their hands as of the ___ day of
November, 1996.
COMPANY:
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
By: GLIMCHER PROPERTIES CORPORATION
Its: Sole General Partner
By: /s/ George A. Schmidt
------------------------------
George A. Schmidt
Its: Senior Vice President
GUARANTOR:
GLIMCHER REALTY TRUST
By: /s/ George A. Schmidt
------------------------------
George A. Schmidt
Its: Senior Vice President
GLIMCHER PROPERTIES CORPORATION
By: /s/ George A. Schmidt
------------------------------
George A. Schmidt
Its: Senior Vice President
BANKS:
THE HUNTINGTON NATIONAL BANK
By: /s/ Carol G. Smith
------------------------------
Carol G. Smith
Its: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ David C. Bluestone
------------------------------
David C. Bluestone
Its: Vice President
-6-
<PAGE> 7
THE FIRST NATIONAL BANK OF CHICAGO
By:
Its:
FLEET NATIONAL BANK
By:
Its:
STAR BANK, NATIONAL ASSOCIATION
By: /s/ Marilyn K. Miller
------------------------------
Marilyn K. Miller
Its: Vice President
CORESTATES BANK, NATIONAL ASSOCIATION
By:
Its:
PNC BANK, OHIO, NATIONAL ASSOCIATION
By:
Its:
THE PROVIDENT BANK
By: /s/ Nick Jevic
------------------------------
Nick Jevic
Its: Vice President
-7-
<PAGE> 8
NATIONAL CITY BANK OF COLUMBUS
By: /s/ Steven A. Smith
------------------------------
Steven A. Smith
Its: Vice President
CO-AGENTS:
THE HUNTINGTON NATIONAL BANK
By: /s/ Carol Smith
------------------------------
Carol Smith
Its: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ David C. Bluestone
------------------------------
David Bluestone
Its: Vice President
ADMINISTRATIVE AGENT:
THE HUNTINGTON NATIONAL BANK
By: /s/ Carol Smith
------------------------------
Carol Smith
Its: Vice President
-8-
