<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 193
__________________
Commission File Number 1-13102
Date of Report (date of earliest event reported): OCTOBER 30, 1997
FIRST INDUSTRIAL REALTY TRUST, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 36-3935116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606
(Address of principal executive offices)
(312) 344-4300
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 30, 1997, First Industrial Realty Trust, Inc. and its
Subsidiaries ( the "Company"), through First Industrial, L.P. (the "Operating
Partnership"), of which the Company is the sole general partner, acquired 91
light industrial properties (the "Pacifica Phase I Properties") in Denver,
Colorado, totaling approximately 3.5 million square feet of gross leasable area
(the "Pacifica Phase I Acquisition"). The Pacifica Phase I Properties were
acquired for approximately $168.2 million which was funded with $148.1 million
in cash and the issuance of approximately .6 million limited partnership units
in the Operating Partnership (the "Units") valued at approximately $20.1
million. The $148.1 million in cash was funded with borrowings under the
Company's $200 million unsecured revolving credit facility (the "1996 Unsecured
Acquisition Facility") with a group of banks for which the First National Bank
of Chicago and the Union Bank of Switzerland act as agents. The $148.1 million
borrowed under the Company's 1996 Unsecured Acquisition Facility currently
bears interest at LIBOR plus 1%. The Pacifica Phase I Properties were acquired
from Pacifica Turnpike II Limited Liability Company, PAC II Limited Liability
Company, Pacifica Fountainhead Limited Liability Company, John B. Bertram
Trust, H-B Trust, IJM Investments, Pacifica N-I24, LLC, 15200 Commerce
Partners, I.G. Equities, Pacifica Industrial V Ltd. Liability, Pacifica
Central Partnership, Pacifica Gateway Limited Liability Company, Pacifica
Hilltop Partnership, C.G. Property Development Company, Pacifica Northeast
Industrial Partnership, Pacifica Industrial Denver I-70, C&L Denver I, Kaplan
MB Properties II, A&R Management and Development Co. No. 1, L.P., Pacifica
North I-25 Industrial, LLC., FTS, LLC, Pacifica Broadway Partnership, Pacifica
6400 Broadway Partnership, The Stanley and Linda Gerlach Family Trust Dated
6-28-85, Pacifica Denver VIII Limited Liability Company, BBS/PAC, Ltd.
Liability Company, First Trust Corporation, Pacifica Denver VI Limited
Liability Company, Pacifica Turnpike Park Partnership, Equity Industrial II,
L.P., Jordan Park Limited Liability Company, East 46th Partnership, Interstate
Business Center, L.L.C., Apollo/Pacifica, LLC, Pacifica Development Properties
II Limited Liability Company, Pacifica ARKA Garrison Park Partnership, K
Associates, Pacifica West Evans Partnership, Pacifica/ARKA West Park
Partnership, ARGC Partners, John A. And Gloria H. Sage as Co-Trustees of the
Jack and Gloria Sage Family Trust, Kaplan MB Properties II, Pacifica/ARKA
Arapahoe Partnership, A&R Management and Development, Pacifica ILIFF Business
Park Limited Liability Company, Russell S. Bishop III and Mary M. Bishop as
Co-Trustees, Bishop Family Trust, George Hemminger IRA, Pacifica Southpark I
Limited Liability Company, Pacifica/ARKAI-225 Partnership, Kozen Family, LLC,
Pacifica South Federal Business Center, L.P., Pacifica ARKA Upland I Limited
Liability Company, The Jack and Gloria Sage Family Trust Agreement Dated
6/7/94, Pacifica 6th West L.P., George M. Hemminger IRA, James A. Collins and
Carol L. Collins, Trustee of the Collins Family Trust Dated May 9, 1969
(together, the "Pacifica Group"). Prior to the Pacifica Phase I Acquisition,
the Pacifica Group was not affiliated with the Company, any affiliate of the
Company or any director or officer of the Company. Following the Pacifica
Phase I Acquisition, Timothy Gudim was appointed regional director and Gregory
Downs was appointed regional development officer. The Pacifica Phase I
Properties will continue to be used for light industrial use under the existing
lease terms.
In connection with the Pacifica Phase I Acquisition, the Company completed
negotiations with the Pacifica Group to acquire an additional 15 properties
totaling approximately .7 million square feet of gross leasable area (the
"Pacifica Phase II Properties") (together with the Pacifica Phase I Properties,
the "Pacifica Acquisition Properties") for approximately $25.4 million (the
"Pacifica Phase II Acquisition"). The Pacifica Phase II Acquisition will be
funded with cash and Units and is scheduled to close within the next several
months. The Pacifica Phase II Properties will be used for light industrial use
under the existing lease terms.
The company is completing negotiations to acquire 64 properties totaling
approximately 4.8 million square feet of gross leasable area (the "Sealy
Acquisition Properties") for approximately $128.5 million. The Sealy
Acquisition Properties will be funded with cash and Units and is scheduled to
close by November 30, 1997. The Sealy Acquisition Properties will be used for
light industrial and bulk warehouse use under existing lease terms.
ITEM 5. OTHER EVENTS
Since the filing of the Company's Form 8-K/A No. 2 dated June 30, 1997,
exclusive of the Pacifica Acquisition Properties and the Sealy Acquisition
Properties described above, the Company acquired 36 industrial properties and
five land parcels for future development from unrelated parties during the
period July 15, 1997 through October 31, 1997, the closing date of the last
industrial property acquired. The combined purchase price for these industrial
1
<PAGE> 3
properties and land parcels totaled approximately $83.9 million, excluding
development costs incurred subsequent to the acquisition of the land parcels
and closing costs incurred in conjunction with the acquisition of the
industrial properties and land parcels. The 36 industrial properties and five
land parcels acquired are described below and were funded with working capital,
the issuance of Units and borrowings under the Company's 1996 Unsecured
Acquisition Facility. The Company has continued the pre-acquisition uses of
the properties. With respect to the land parcels purchased, the Company
intends to develop the land parcels and operate the facilities as industrial
rental property.
o On July 16, 1997, the Company purchased a land parcel located in Clarion,
Iowa for approximately $.05 million. The land parcel was purchased from
the R.W. Hagie Trust.
o On July 31, 1997, the Company purchased two light industrial properties
totaling 161,539 square feet located in Indianapolis, Indiana. The
purchase price of the properties was approximately $4.1 million. The
properties were purchased from National Life Insurance Company.
o On August 6, 1997, the Company purchased a land parcel located in
Minneapolis, Minnesota for approximately $.3 million. The land parcel was
purchased from Ronald A. Signorelli and John B. Pfaff.
o On August 27, 1997, the Company purchased a 54,000 square foot light
industrial property located in Des Moines, Iowa. The purchase price for
the property was approximately $1.1 million. The property was purchased
from Dennis L. Elwell. This property was owner occupied prior to
purchase.
o On September 19, 1997, the Company purchased a land parcel located in
Louisville, Kentucky for approximately $1.5 million. The land parcel was
purchased from Louisville and Jefferson County Riverport Authority.
o On September 19, 1997, the Company purchased three light Industrial
Properties totaling 106,721 square feet located in Oakwood, Ohio. The
purchase price of the properties was approximately $3.4 million. The
properties were purchased from Oak Leaf Industrial Mall, L.P.
o On September 19, 1997, the Company purchased two light industrial
properties totaling 62,395 square feet located in Independence, Ohio. The
purchase price of the properties was approximately $2.5 million. The
properties were purchased from Valley Belt Industrial Mall, L.P.
o On September 22, 1997, the Company purchased a 102,400 square foot bulk
warehouse property located in Taylor, Michigan for approximately $3.0
million. The property was purchased from Virginia United, a Michigan
co-partnership.
o On September 23, 1997, the Company purchased a 353,000 square foot light
industrial property located in Indianapolis, Indiana. The purchase price
for the property was approximately $7.1 million. The property was
purchased from Merchandise Warehouse Co., Inc. This property was owner
occupied prior to purchase.
o On September 26, 1997, the Company purchased a 97,518 square foot bulk
warehouse property located in Kennesaw, Georgia for approximately $5.2
million. The property was purchased from The Guardian Insurance & Annuity
Company, Inc, a Delaware corporation.
o On September 29, 1997, the Company purchased a 35,114 square foot light
industrial property located in Hazelwood, Missouri. The purchase price
for the property was approximately $1.0 million. The property was
purchased from McDonnell Douglas Corporation, a Maryland corporation. This
property was owner occupied prior to purchase.
o On September 30, 1997, the Company purchased a 570,000 square foot light
industrial property located in Florence, Kentucky. The purchase price for
the property was approximately $6.0 million. The property was purchased
from Equitable Bag Co., Inc. This property was owner occupied prior to
purchase.
2
<PAGE> 4
o On October 1, 1997, the Company purchased a 51,525 square foot light
industrial property located in Streetsboro, Ohio. The purchase price for
the property was approximately $2.2 million. The property was purchased
from Ethan Investment Corporation.
o On October 7, 1997, the Company purchased four bulk warehouse properties
totaling 476,401 square feet and one 80,400 square foot light industrial
property located in Chicago, Illinois for approximately $10.0 million
which was funded with $4.8 million in cash and approximately .2 million
Units valued at approximately $5.2 million in the aggregate. The
Properties were purchased from RJB Ford City Limited Partnership.
o On October 14, 1997, the Company purchased a land parcel located in
Cheshire, Connecticut for approximately $.9 million. The land parcel was
purchased from River Valley Farm, Inc.
o On October 17, 1997, the Company purchased seven light industrial
properties totaling 480,118 square feet located in Nashville, Tennessee.
The purchase price for the properties was approximately $17.7 million.
The Properties were purchased from Metropolitan Life Insurance Company, a
New York corporation.
o On October 21, 1997, the Company purchased two light Industrial Properties
totaling 68,635 square feet located in Hicksville, New York. The purchase
price of the properties was approximately $1.9 million. The properties
were purchased from Mastex Associates, a New York partnership.
o On October 23, 1997, the Company purchased one bulk warehouse property
totaling 252,000 square feet and five light industrial properties totaling
137,031 square feet located in the metropolitan area of Chicago, Illinois
for approximately $9.0 million which was funded with $7.7 million in cash
and approximately .05 million Units valued at approximately $1.3 million
in the aggregate. The properties were purchased from Rob Commercial Joint
Ventures Limited and RJB II, L.P.
o On October 28, 1997, the Company purchased a land parcel located in
Romulus, Michigan for approximately $.6 million. The land parcel was
purchased from Par Driving, Inc., a Michigan corporation.
o On October 28, 1997, the Company purchased a 32,000 square foot light
industrial property located in Willoughby, Ohio. The purchase price for
the property was approximately $.9 million. The property was purchased
from Hamann Parkway Limited.
o On October 31, 1997, the Company purchased an 89,456 square foot light
industrial property located in Minneapolis, Minnesota. The purchase price
for the property was approximately $5.4 million. The property was
purchased from City West Associates, L.L.P.
3
<PAGE> 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Combined Historical Statements of Revenues and Certain Expenses
for the 1997 Acquisition II Properties - Unaudited.
Combined Historical Statements of Revenues and Certain Expenses
for the Pacifica Acquisition Properties and Notes thereto with
Independent Accountant's report dated October 27, 1997.
Combined Historical Statements of Revenues and Certain Expenses
for the Sealy Acquisition Properties and Notes thereto with
Independent Accountant's report dated October 16, 1997.
Combined Historical Statements of Revenues and Certain Expenses
for the 1997 Acquisition III Properties and Notes thereto with
Independent Accountant's report dated October 20, 1997.
(b) Pro Forma Financial Information:
Pro Forma Statement of Operations for the Six Months Ended
June 30, 1997.
Pro Forma Statement of Operations for the Year Ended December
31, 1996.
(c) Exhibits.
Exhibits Number Description
--------------- -----------------------------------------
23 Consent of Coopers & Lybrand L.L.P.
Independent Accountants
4
<PAGE> 6
INDEX TO FINANCIAL STATEMENTS
1997 ACQUISITION II PROPERTIES PAGE
Combined Historical Statements of Revenues and
Certain Expenses for the 1997 Acquisition II
Properties for the Six Months Ended June 30, 1997 and the Year Ended
December 31, 1996 - Unaudited........................................... 6
PACIFICA ACQUISITION PROPERTIES
Report of Independent Accountants...................................... 7
Combined Historical Statements of Revenues and
Certain Expenses for the Pacifica Acquisition
Properties for the Six Months Ended June 30, 1997
and for the Year Ended December 31, 1997............................... 8
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................... 9-10
SEALY ACQUISITION PROPERTIES
Report of Independent Accountants...................................... 11
Combined Historical Statements of Revenues and
Certain Expenses for the Sealy Acquisition
Properties for the Six Months Ended June 30, 1997 and
for the Year Ended December 31, 1996................................... 12
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................... 13-14
1997 ACQUISITION III PROPERTIES
Report of Independent Accountants...................................... 15
Combined Historical Statements of Revenues and
Certain Expenses for the 1997 Acquisition III
Properties for the Six Months Ended June 30, 1997
and for the Year Ended December 31, 1996............................... 16
Notes to Combined Historical Statements of Revenues and Certain
Expenses............................................................... 17-18
PRO FORMA FINANCIAL INFORMATION
Pro Forma Statement of Operations for the Six Months Ended June
30, 1997............................................................... 19-20
Notes to Pro Forma Financial Statements................................ 21-22
Pro Forma Statement of Operations for the Year Ended December 31,
1996................................................................... 23-25
Notes to Pro Forma Financial Statements................................ 26-28
5
<PAGE> 7
1997 ACQUISITION II PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
The Combined Historical Statements of Revenues and Certain Expenses as
shown below, present the summarized results of operations of 25 of the 206
properties acquired or contracted to be acquired by First Industrial Realty
Trust, Inc. and its subsidiaries (the "Company") during the period July 15,
1997 through October 31, 1997 ( the "1997 Acquisition II Properties"). These
statements are exclusive of 91 properties (the "Pacifica Phase I Properties")
acquired by the Company on October 30, 1997 and 15 properties (the "Pacifica
Phase II Properties") contracted to be acquired by the Company within the next
several months (together, the "Pacifica Acquisition Properties"), which have
been audited and are included elsewhere in this Form 8-K, 64 properties (the
"Sealy Acquisition Properties") contracted to be acquired by the Company by
November 30, 1997, which have been audited and are included elsewhere in this
Form 8-K and seven properties (the "1997 Acquisition III Properties") acquired
by the Company on October 17, 1997 which have been audited and are included
elsewhere in this Form 8-K, five parcels of land for future development and
four properties occupied by the previous owner during the period July 15, 1997
through October 31, 1997.
The 1997 Acquisition II Properties were acquired for an aggregate purchase
price of approximately $47.6 million, have an aggregate gross leaseable area of
approximately 1.7 million square feet. A description of each property is
included in Item 5.
<TABLE>
<S> <C> <C>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
(UNAUDITED) (UNAUDITED)
---------------- ------------------
Revenues:
Rental Income...................... $ 3,266 $ 6,213
Tenant Recoveries and Other Income. 665 1,256
----------- -----------
Total Revenues................... 3,931 7,469
----------- -----------
Expenses:
Real Estate Taxes................. 781 1,518
Repairs and Maintenance........... 183 424
Property Management............... 138 254
Utilities......................... 27 53
Insurance......................... 34 56
Other............................. 3 31
----------- -----------
Total Expenses................... 1,166 2,336
----------- -----------
Revenues in Excess of Certain
Expenses.......................... $ 2,765 $ 5,133
=========== ===========
</TABLE>
6
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
First Industrial Realty Trust, Inc.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the Pacifica Acquisition Properties as described in
Note 1 for the year ended December 31, 1996. This financial statement is the
responsibility of the Pacifica Acquisition Properties' management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
The accompanying combined historical statement of revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission for inclusion in the Form
8-K dated October 30, 1997 of First Industrial Realty Trust, Inc. and is not
intended to be a complete presentation of the Pacifica Acquisition Properties'
revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Pacifica
Acquisition Properties for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 27, 1997
7
<PAGE> 9
PACIFICA ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- ------------------
<S> <C> <C>
Revenues:
Rental Income.......................... $ 8,846 $ 16,849
Tenant Recoveries and Other Income..... 1,868 3,453
----------- -------------
Total Revenues....................... 10,714 20,302
----------- -------------
Expenses:
Real Estate Taxes..................... 1,241 2,521
Repairs and Maintenance............... 767 1,554
Property Management................... 423 767
Utilities............................. 282 547
Insurance............................. 89 116
Other................................. 7 155
----------- -------------
Total Expenses....................... 2,809 5,660
----------- -------------
Revenues in Excess of Certain Expenses. $ 7,905 $ 14,642
=========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 10
PACIFICA ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combined the results of operations of 91 properties acquired by
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company")
and 15 properties to be acquired within the next several months (together,
the "Pacifica Acquisition Properties").
The Pacifica Acquisition Properties are contracted to be acquired for an
aggregate purchase price of approximately $193.6 million. Summary information
regarding the Pacifica Acquisition Properties is as follows:
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ----------------------- -----------------
Denver, CO 106 4,123,846 (a)
- -----------------------------------
(a) Rental history commenced on January 1, 1996 for 101 of the buildings.
Rental history for the remaining five buildings, totaling 165,717 square
feet, commenced after June 30, 1997 when these buildings were placed in
service.
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the Pacifica Acquisition Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting periods. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
9
<PAGE> 11
PACIFICA ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The Pacifica Acquisition Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
<CAPTION>
Pacifica
Acquisition
Properties
---------------
<S> <C>
1997 $11,888
1998 10,476
1999 7,803
2000 5,410
2001 3,150
Thereafter 4,050
---------------
Total $42,777
===============
</TABLE>
10
<PAGE> 12
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
First Industrial Realty Trust, Inc.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the Sealy Acquisition Properties as described in Note
1 for the year ended December 31, 1996. This financial statement is the
responsibility of the Sealy Acquisition Properties' management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
The accompanying combined historical statement of revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission for inclusion in the Form
8-K dated October 30, 1997 of First Industrial Realty Trust, Inc. and is not
intended to be a complete presentation of the Sealy Acquisition Properties'
revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Sealy
Acquisition Properties for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 16, 1997
11
<PAGE> 13
SEALY ACQUISITION PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
---------------- -----------------
<C> <C>
Revenues:
Rental Income..................... $ 8,113 $ 15,163
Tenant Recoveries and Other Income 968 1,546
------------ ---------------
Total Revenues................... 9,081 16,709
------------ ---------------
Expenses:
Real Estate Taxes................. 1,097 2,068
Repairs and Maintenance........... 903 1,546
Property Management............... 391 700
Utilities......................... 243 329
Insurance......................... 126 264
Other............................. --- ---
------------ ---------------
Total Expenses................... 2,760 4,907
------------ ---------------
Revenues in Excess of Certain
Expenses.......................... $ 6,321 $ 11,802
============ ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 14
SEALY ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combined the results of operations of 64 properties contracted to
be acquired by November 30, 1997 (the "Sealy Acquisition Properties") by First
Industrial Realty Trust, Inc. and its subsidiaries (the "Company"). Summary
information regarding the Sealy Acquisition Properties is as follows:
The Sealy Acquisition Properties are contracted to be acquired for an
aggregate purchase price of approximately $128.5 million. Summary information
regarding the Sealy Acquisition Properties is as follows:
<TABLE>
<CAPTION>
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ----------------------- -----------------
<S> <C> <C> <C>
Atlanta, GA 2 67,569 January 1, 1996
Baton Rouge, LA 4 225,147 January 1, 1996
Dallas, TX 19 1,620,442 January 1, 1996
Houston, TX 22 2,127,201 January 1, 1996
New Orleans, LA 14 557,453 January 1, 1996
Shreveport, LA 1 50,000 January 1, 1996
Tampa, FL 2 153,377 January 1, 1996
------------------------
TOTAL 64 4,801,189
========================
</TABLE>
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the Sealy Acquisition Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting period. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
13
<PAGE> 15
SEALY ACQUISITION PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The Sealy Acquisition Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
<CAPTION>
Sealy
Acquisition
Properties
---------------
<S> <C>
1997 $ 16,482
1998 13,525
1999 9,404
2000 5,057
2001 2,625
Thereafter 2,861
---------------
Total $ 49,954
===============
</TABLE>
14
<PAGE> 16
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
First Industrial Realty Trust, Inc.
We have audited the accompanying combined historical statement of revenues
and certain expenses of the 1997 Acquisition III Properties as described in
Note 1 for the year ended December 31, 1996. This financial statement is the
responsibility of the 1997 Acquisition III Properties' management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis
for our opinion.
The accompanying combined historical statement of revenues and certain
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission for inclusion in the Form
8-K dated October 30, 1997 of First Industrial Realty Trust, Inc. and is not
intended to be a complete presentation of the 1997 Acquisition III Properties'
revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the 1997
Acquisition III Properties for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 20, 1997
15
<PAGE> 17
1997 ACQUISITION III PROPERTIES
COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
---------------- -----------------
<S> <C> <C>
Revenues:
Rental Income....................... $ 952 $ 1,945
Tenant Recoveries and Other Income.. 123 244
---------------- -----------------
Total Revenues.............. 1,075 2,189
---------------- -----------------
Expenses:
Real Estate Taxes................... 105 222
Repairs and Maintenance............. 82 168
Property Management................. 45 91
Utilities........................... 23 51
Insurance........................... 7 14
Other............................... 46 4
---------------- -----------------
Total Expenses.............. 308 550
---------------- -----------------
Revenues in Excess of Certain Expenses. $ 767 $ 1,639
=============== =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 18
1997 ACQUISITION III PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BASIS OF PRESENTATION.
The Combined Historical Statements of Revenues and Certain Expenses (the
"Statements") combined the results of operations of seven properties acquired
by First Industrial Realty Trust, Inc. and its subsidiaries (the "Company") on
October 17, 1997 (the "1997 Acquisition III Properties").
The 1997 Acquisition III Properties were acquired for an aggregate
purchase price of approximately $ 17.7 million. Summary information regarding
the 1997 Acquisition III Properties is as follows:
SQUARE
# OF FEET DATE RENTAL
METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED
- ----------------- ------------------------ -----------------
Nashville, TN 7 480,118 January 1, 1996
The unaudited Combined Historical Statement of Revenues and Certain
Expenses for the six months ended June 30, 1997 reflects, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
statement. All such adjustments are of a normal and recurring nature.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The Statements exclude certain expenses such as interest, depreciation and
amortization, professional fees, and other costs not directly related to the
future operations of the 1997 Acquisition III Properties that may not be
comparable to the expenses expected to be incurred in their proposed future
operations. Management is not aware of any material factors relating to these
properties which would cause the reported financial information not to be
necessarily indicative of future operating results.
In order to conform with generally accepted accounting principles,
management, in preparation of the Statements, is required to make estimates
and assumptions that affect the reported amounts of revenues and certain
expenses during the reporting period. Actual results could differ from these
estimates.
Revenue and Expense Recognition
The Statements have been prepared on the accrual basis of accounting.
Rental income is recorded when due from tenants. The effects of scheduled
rent increases and rental concessions, if any, are recognized on a
straight-line basis over the term of the tenant's lease.
17
<PAGE> 19
1997 ACQUISITION III PROPERTIES
NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
3. FUTURE RENTAL REVENUES
The 1997 Acquisition III Properties are leased to tenants under net and
semi-net operating leases. Minimum lease payments receivable, excluding tenant
reimbursement of expenses, under noncancelable operating leases in effect as of
December 31, 1996 are approximately as follows:
<TABLE>
1997
Acquisition III
Properties
---------------
<S> <C>
1997 $ 1,581
1998 1,256
1999 720
2000 395
2001 229
Thereafter 497
---------------
Total $ 4,678
===============
</TABLE>
18
<PAGE> 20
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 Punia Other 1997 1997
First Industrial Acquisition Lazarus Burman Acquisition Acquisition Acquisition I
Realty Trust, Inc Property Properties Properties Properties Properties
(Historical) (Historical) (Historical) (Historical) (Historical) (Historical)
Note 2 (a) Note 2 (b) Note 2(c) Note 2 (d) Note 2 (e) Note 2 (f)
----------------- ------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Rental Income.................... $ 74,709 $ 20 $ 1,501 $ 5,354 $ 1,178 $ 550
Tenant Recoveries and
Other Income................... 19,925 5 374 1,157 482 236
Interest Income on U.S.
Government Securities.......... 4,157 --- --- --- --- ---
--------------- ------------ ------------ ------------ ----------- -------------
Total Revenues............... 98,791 25 1,875 6,511 1,660 786
--------------- ------------ ------------ ------------ ----------- -------------
EXPENSES:
Real Estate Taxes............... 15,647 4 396 983 448 194
Repairs and Maintenance......... 4,286 1 119 267 53 31
Property Management............. 3,519 1 59 124 21 22
Utilities....................... 2,825 3 77 268 6 1
Insurance....................... 276 --- 22 85 9 5
Other........................... 854 --- 37 --- --- ---
General and Administrative..... 2,690 --- --- --- --- ---
Interest Expense................ 21,321 --- --- --- --- ---
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.......................... 1,380 --- --- --- --- ---
Depreciation and Other
Amortization................... 17,712 --- --- --- --- ---
--------------- ------------ ------------ ------------ ----------- -------------
Total Expenses................ 70,510 9 710 1,727 537 253
--------------- ------------ ------------ ------------ ----------- -------------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Minority Interest
and Extraordinary Item.......... 28,281 16 1,165 4,784 1,123 533
Disposition of Interest Rate
Protection Agreements........... 1,430 --- --- --- --- ---
Gain on Sales of Properties...... 3,999 --- --- --- --- ---
--------------- ------------ ------------ ------------ ----------- -------------
Income Before Minority Interest
and Extraordinary Item.......... 33,710 16 1,165 4,784 1,123 533
Income Allocated to Minority
Interest......................... (1,950) --- --- --- --- ---
--------------- ------------ ------------ ------------ ----------- -------------
Income Before Extraordinary
Item............................. 31,760 16 1,165 4,784 1,123 533
--------------- ------------ ------------ ------------ ----------- -------------
Preferred Stock Dividends........ (3,365) --- --- --- --- ---
--------------- ------------ ------------ ------------ ----------- -------------
Income Before Extraordinary
Item Available to Common
Shareholders..................... $ 28,395 $ 16 $ 1,165 $ 4,784 $ 1,123 $ 533
============== ============ ============ ============= ============ ==============
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(30,080,434 for June 30, 1997). $ $.94
Pro Forma Income Before ==============
Extraordinary Item Per
Weighted Average Common
Share Outstanding (36,117,874
for June 30, 1997, pro forma).
</TABLE>
<TABLE>
<CAPTION>
Subtotal
Carry Forward
--------------
<S> <C>
REVENUES:
Rental Income.................... $ 83,312
Tenant Recoveries and
Other Income................... 22,179
Interest Income on U.S.
Government Securities.......... 4,157
--------------
Total Revenues............... 109,648
--------------
EXPENSES:
Real Estate Taxes............... 17,672
Repairs and Maintenance......... 4,757
Property Management............. 3,746
Utilities....................... 3,180
Insurance....................... 397
Other........................... 891
General and Administrative...... 2,690
Interest Expense................ 21,321
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.......................... 1,380
Depreciation and Other
Amortization................... 17,712
--------------
Total Expenses................ 73,746
--------------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Minority Interest
and Extraordinary Item.......... 35,902
Disposition of Interest Rate
Protection Agreements........... 1,430
Gain on Sales of Properties...... 3,999
--------------
Income Before Minority Interest
and Extraordinary Item.......... 41,331
Income Allocated to Minority
Interest........................ (1,950)
--------------
Income Before Extraordinary
Item............................ 39,381
--------------
Preferred Stock Dividends........ (3,365)
--------------
Income Before Extraordinary
Item Available to Common
Shareholders.................... $36,016
==============
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(30,080,434 as of June 30, 1997).
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding (30,080,434
as of June 30, 1997, pro forma).
</TABLE>
The Accompanying notes are an integral part of the pro forma financial
statement.
19
<PAGE> 21
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Pacifica
Acquisition Sealy Acquisition 1997 Acquisition
Subtotal Properties Properties III Properties
Carry (Historical) (Historical) (Historical) Note 2
Forward Note 2 (g) Note 2 (h) Note 2 (i)
------------- -------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
REVENUES:
Rental Income....................... $ 83,312 $ 8,846 $ 8,113 $ 952
Tenant Recoveries and
Other Income....................... 22,179 1,868 968 123
Interest Income on U.S.
Government Securities.............. 4,157 --- --- ---
------------- -------------- --------------- --------------
Total Revenues.................... 109,648 10,714 9,081 1,075
------------- -------------- --------------- --------------
EXPENSES:
Real Estate Taxes................... 17,672 1,241 1,097 105
Repairs and Maintenance............. 4,757 767 903 82
Property Management................. 3,746 423 391 45
Utilities........................... 3,180 282 243 23
Insurance........................... 397 89 126 7
Other............................... 891 7 --- 46
General and Administrative.......... 2,690 --- --- ---
Interest Expense.................... 21,321 --- --- ---
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.............................. 1,380 --- --- ---
Depreciation and Other
Amortization....................... 17,712 --- --- ---
------------- -------------- --------------- --------------
Total Expenses................... 73,746 2,809 2,760 308
------------- -------------- --------------- --------------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Minority Interest
and Extraordinary Item.............. 35,902 7,905 6,321 767
Disposition of Interest Rate
Protection Agreements............... 1,430 --- --- ---
Gain on Sales of Properties.......... 3,999 --- --- ---
------------- -------------- --------------- --------------
Income Before Minority Interest
and Extraordinary Item.............. 41,331 7,905 6,321 767
Income Allocated to Minority
Interest............................ (1,950) --- --- ---
------------- -------------- --------------- --------------
Income Before Extraordinary
Item................................ 39,381 7,905 6,321 767
------------- -------------- --------------- --------------
Preferred Stock Dividends............ (3,365) --- --- ---
------------- -------------- --------------- --------------
Income Before Extraordinary
Item Available to Common
Shareholders........................ $ 36,016 $ 7,905 $ 6,321 $ 767
============= ============= =============== ==============
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(30,080,434 for June 30, 1997)....
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding (30,080,434
for June 30, 1997, pro forma)....
</TABLE>
<TABLE>
<CAPTION>
1997 Acquisition
II Properties Pro Forma First Industrial
(Historical) Adjustments Realty Trust, Inc.
Note 2 (j) Note 2 (k) Pro Forma
------------------- ------------------- -------------------
<S> <C> <C> <C>
REVENUES:
Rental Income....................... $3,266 $--- $104,489
Tenant Recoveries and
Other Income....................... 665 --- 25,803
Interest Income on U.S.
Government Securities.............. --- --- 4,157
---------------- ------------- ----------
Total Revenues.................... 3,931 --- 134,449
---------------- ------------- ----------
EXPENSES:
Real Estate Taxes................... 781 --- 20,896
Repairs and Maintenance............. 183 --- 6,692
Property Management................. 138 --- 4,743
Utilities........................... 27 --- 3,755
Insurance........................... 34 --- 653
Other............................... 3 --- 947
General and Administrative.......... --- --- 2,690
Interest Expense.................... --- 5,254 26,575
Amortization of Interest
Rate Protection Agreements
and Deferred Financing
Costs.............................. --- --- 1,380
Depreciation and Other
Amortization....................... --- 5,524 23,236
---------------- ------------- ----------
Total Expenses................... 1,166 10,778 91,567
---------------- ------------- ----------
Income Before Disposition of
Interest Rate Protection
Agreements, Gain on Sales of
Properties, Minority Interest
and Extraordinary Item.............. 2,765 (10,778) 42,882
Disposition of Interest Rate
Protection Agreements............... --- --- 1,430
Gain on Sales of Properties.......... --- --- 3,999
---------------- ------------- ----------
Income Before Minority Interest
and Extraordinary Item.............. 2,765 (10,778) 48,311
Income Allocated to Minority
Interest............................ --- (3,028) (4,978)
---------------- ------------- ----------
Income Before Extraordinary
Item................................ 2,765 (13,806) 43,333
---------------- ------------- ----------
Preferred Stock Dividends............ --- (5,126) (8,491)
---------------- ------------- ----------
Income Before Extraordinary
Item Available to Common
Shareholders........................ $ 2,765 $ (18,932) $ 34,842
=============== ============= ==========
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(30,080,434 for June 30, 1997)....
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding (36,117,874
for June 30, 1997, pro forma).... $ .96
==========
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statement.
20
<PAGE> 22
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company")
was organized in the state of Maryland on August 10, 1993. The Company is a
real estate investment trust ("REIT") as defined in the Internal Revenue Code.
The accompanying unaudited proforma statement of operations for the
Company reflects the historical operations of the Company for the period
January 1, 1997 through June 30, 1997, the acquisition of one property on
January 9, 1997 (the "1997 Acquisition Property") and 39 properties acquired on
January 31, 1997 (the "Lazarus Burman Properties") which are reported on Form
8-K/A No.1 dated February 12, 1997, 15 properties (the "Punia Phase I
Properties") acquired on June 30, 1997 and 27 properties acquired through
October 31, 1997 and six properties to be acquired (the "Punia Phase II
Properties") (together, the "Punia Acquisition Properties") which are reported
on Form 8-K/A No.1 dated June 30, 1997, 11 properties acquired during the
period February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition
Properties") and two properties acquired during the period February 1, 1997
through July 14, 1997 (the "1997 Acquisition I Properties") reported on Form
8-K/A No. 2 dated June 30, 1997 and the acquisition of 91 properties on October
30, 1997 and the additional 15 properties to be acquired within the next
several months (together, the "Pacifica Acquisition Properties"), 64 properties
to be acquired by November 30, 1997 (the "Sealy Acquisition Properties"), seven
properties acquired on October 17, 1997 (the "1997 Acquisition III Properties")
and 25 properties acquired during the period July 15, 1997 through October 31,
1997 (the "1997 Acquisition II Properties") reported on this Form 8-K dated
October 30, 1997.
The accompanying unaudited pro forma financial statement has been prepared
based upon certain pro forma adjustments to the historical June 30, 1997
financial statements of the Company. The pro forma statement of operations for
the six months ended June 30, 1997 has been prepared as if the properties
acquired subsequent to December 31, 1996 had been acquired on either January 1,
1996 or the lease commencement date if the property was developed and as if the
40,000 shares of $1 par value Series B Cumulative Preferred Stock issued on May
14, 1997 (the "Series B Preferred Stock Offering"), the 20,000 shares of $1 par
value Series C Cumulative Preferred Stock issued on June 6, 1997 (the "Series C
Preferred Stock Offering"), the 637,440 shares of $.01 par value common stock
issued on September 16, 1997 (the "September 1997 Equity Offering") and the
5,400,000 shares of $.01 par value common stock issued on October 15, 1997 (the
"October 1997 Equity Offering") had been completed on January 1, 1996.
The unaudited pro forma financial statement is not necessarily indicative
of what the Company's results of operations would have been for the six months
ended June 30, 1997 had the properties been acquired as described above, nor do
they purport to present the future results of operations of the Company.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - JUNE 30, 1997
(a) The historical operations reflect the operations of the Company for the
period January 1, 1997 through June 30, 1997 as reported on the Company's
Form 10-Q/A No.1 dated August 26, 1997.
(b) The historical operations reflect the operations of the 1997
Acquisition Property for the period January 1, 1997 through the
acquisition date of this property on January 9, 1997.
(c) The historical operations reflect the operations of the Lazarus Burman
Properties for the period January 1, 1997 through January 31, 1997.
(d) The historical operations reflect the operations of the Punia
Acquisition Properties for the period January 1, 1997 through June 30,
1997.
21
<PAGE> 23
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(e) The historical operations reflect the operations of the Other 1997
Acquisition Properties for the period January 1, 1997 through the earlier
of June 30, 1997 or their respective acquisition dates.
(f) The historical operations reflect the operations of the 1997
Acquisition I Properties for the period January 1, 1997 through the
earlier of June 30, 1997 or their respective acquisition dates.
(g) The historical operations reflect the operations of the Pacifica
Acquisition Properties for the period January 1, 1997 through June 30,
1997.
(h) The historical operations reflect the operations of the Sealy
Acquisition Properties for the period January 1, 1997 through June 30,
1997.
(i) The historical operations reflect the operations of the 1997
Acquisition III Properties for the period January 1, 1997 through June
30, 1997.
(j) The historical operations reflect the operations of the 1997
Acquisition II Properties for the period January 1, 1997 through June
30, 1997.
(k) In connection with the Lazarus Burman Properties acquisition, the
Company assumed two mortgage loans totaling $4.5 million (the "Lazarus
Burman Mortgage Loans"). The interest expense adjustment reflects
interest on the Lazarus Burman Mortgage Loans for the pro forma period
and as if such indebtedness was outstanding beginning January 1, 1996.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate
("LIBOR") plus 1%) for the assumed earlier purchase of the 1997
Acquisition Property, the Lazarus Burman Properties, the Punia
Acquisition Properties, the Other 1997 Acquisition Properties, the 1997
Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy
Acquisition Properties, the 1997 Acquisition III Properties and the 1997
Acquisition II Properties offset by the interest savings related to the
assumed repayment of $144.0 million of acquisition facility borrowings on
January 1, 1996 from the proceeds of the Series B Preferred Stock
Offering and Series C Preferred Stock Offering and the assumed repayment
of $196.1 million of acquisition facility borrowings on January 1, 1996
from the proceeds of the September 1997 Equity Offering and the October
1997 Equity Offering.
The depreciation and amortization adjustments reflect the charges for the
1997 Acquisition Property, the Lazarus Burman Properties, the Punia
Acquisition Properties, the Other 1997 Acquisition Properties, the 1997
Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy
Acquisition Properties, the 1997 Acquisition III Properties and the 1997
Acquisition II Properties from January 1, 1997 through the earlier of
their respective acquisition date or June 30, 1997 and if such properties
were acquired on January 1, 1996.
Income allocated to minority interest reflects income attributable to
units in First Industrial, L.P. (the "Units") owned by unit holders other
than the Company. The minority interest adjustment reflects a 12.5%
minority interest for the six months ended June 30, 1997. This
adjustment reflects the income to unitholders for Units issued in
connection with certain property acquisitions as if such Units had been
issued on January 1, 1996 and to reflect the completion of the Series B
Preferred Stock Offering, the Series C Preferred Stock Offering, the
September 1997 Equity Offering and the October 1997 Equity Offering as of
January 1, 1996.
The preferred stock dividend adjustment reflects preferred dividends
attributable to the Series B Preferred Stock and the Series C Preferred
Stock as if such preferred stock was outstanding as of January 1, 1996.
22
<PAGE> 24
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
First
Industrial First Other 1996 1997
Realty Highland Acquisition Acquisition Acquisition Acquisition
Trust, Inc. Properties Properties Properties Properties Property Subtotal
(Historical) (Historical) (Historical) (Historical) (Historical) (Historical) Carry
Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e) Note 2 (f) Forward
------------ ----------- ------------ ------------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES:
Rental Income.................. $109,113 $1,915 $1,029 $2,893 $7,601 $ 948 $123,499
Tenant Recoveries and
Other Income.................. 30,942 182 218 469 944 210 32,965
-------- ------ ------ ------ ------ ----- --------
Total Revenues............... 140,055 2,097 1,247 3,362 8,545 1,158 156,464
-------- ------ ------ ------ ------ ----- --------
EXPENSES:
Real Estate Taxes.............. 23,371 213 237 519 1,283 167 25,790
Repairs and Maintenance........ 5,408 134 45 139 539 62 6,327
Property Management............ 5,067 86 40 109 354 30 5,686
Utilities...................... 3,582 189 21 68 30 135 4,025
Insurance...................... 877 28 14 44 65 --- 1,028
Other.......................... 919 --- --- --- 2 --- 921
General and Administrative..... 4,018 --- --- --- --- --- 4,018
Interest Expense............... 28,954 --- --- --- --- --- 28,954
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs...... 3,286 --- --- --- --- --- 3,286
Depreciation and Other
Amortization.................. 28,049 --- --- --- --- --- 28,049
-------- ------ ------ ------ ------ ----- --------
Total Expenses............... 103,531 650 357 879 2,273 394 108,084
-------- ------ ------ ------ ------ ----- --------
Income Before Gain on Sales of
Properties, Minority Interest
and Extraordinary Item......... 36,524 1,447 890 2,483 6,272 764 48,380
Gain on Sale of Properties....... 4,344 --- --- --- --- --- 4,344
-------- ------ ------ ------ ------ ----- --------
Income Before Minority Interest
and Extraordinary Item......... 40,868 1,447 890 2,483 6,272 764 52,724
Income Allocated to Minority
Interest....................... (2,931) --- --- --- --- --- (2,931)
-------- ------ ------ ------ ------ ----- --------
Income Before Extraordinary
Item........................... 37,937 1,447 890 2,483 6,272 764 49,793
-------- ------ ------ ------ ------ ----- --------
Preferred Stock Dividends ....... (3,919) --- --- --- --- --- (3,919)
-------- ------ ------ ------ ------ ----- --------
Income Before Extraordinary
Item Available to Common
Shareholders................... $ 34,018 $1,447 $ 890 $2,483 $6,272 $ 764 $ 45,874
======== ====== ====== ====== ====== ===== ========
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(24,755,953 for December
31, 1996)...................... $ 1.37
========
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding
(29,890,106 for
December 31, 1996, pro
forma).........................
</TABLE>
The accompanying notes are an integral part of the pro forma financial statement
23
<PAGE> 25
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Lazarus Punia Other 1997 1997
Burman Acquisition Acquisition Acquisition I
Properties Properties Properties Properties
Subtotal (Historical) (Historical) (Historical) (Historical)
Carry Forward Note 2 (g) Note 2 (h) Note 2 (i) Note 2 (j)
------------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Rental Income................................. $123,499 $18,606 $10,448 $3,829 $1,451
Tenant Recoveries and Other
Income....................................... 32,965 4,636 2,668 1,089 648
-------- ------- ------- ------ ------
Total Revenues............................. 156,464 23,242 13,116 4,918 2,099
-------- ------- ------- ------ ------
EXPENSES:
Real Estate Taxes............................. 25,790 4,767 1,908 1,131 490
Repairs and Maintenance....................... 6,327 1,477 795 124 102
Property Management........................... 5,686 732 329 89 54
Utilities..................................... 4,025 959 586 27 7
Insurance..................................... 1,028 275 160 30 22
Other......................................... 921 457 218 --- ---
General and Administrative..................... 4,018 --- --- --- ---
Interest Expense............................... 28,954 --- --- --- ---
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs..................... 3,286 --- --- --- ---
Depreciation and Other
Amortization................................. 28,049 --- --- --- ---
-------- ------- ------- ------ ------
Total Expenses............................. 108,084 8,667 3,996 1,401 675
-------- ------- ------- ------ ------
Income Before Gain on Sales
of Properties, Minority
Interest and Extraordinary
Item ........................................ 48,380 14,575 9,120 3,517 1,424
Gain on Sales of Properties.................... 4,344 --- --- --- ---
-------- ------- ------- ------ ------
Income Before Minority
Interest and Extraordinary
Item......................................... 52,724 14,575 9,120 3,517 1,424
Income Allocated to Minority
Interest..................................... (2,931) --- --- --- ---
-------- ------- ------- ------ ------
Income Before Extraordinary
Item......................................... 49,793 14,575 9,120 3,517 1,424
-------- ------- ------- ------ ------
Preferred Stock Dividends...................... (3,919) --- --- --- ---
-------- ------- ------- ------ ------
Income Before Extraordinary
Item Available to Common
Shareholders................................. $45,874 $14,575 $ 9,120 $3,517 $1,424
======== ======= ======= ====== ======
<CAPTION>
Subtotal
Carry
Forward
--------
<S> <C>
REVENUES:
Rental Income................................. $157,833
Tenant Recoveries and Other
Income....................................... 42,006
--------
Total Revenues............................. 199,839
--------
EXPENSES:
Real Estate Taxes............................. 34,086
Repairs and Maintenance....................... 8,825
Property Management........................... 6,890
Utilities..................................... 5,604
Insurance..................................... 1,515
Other......................................... 1,596
General and Administrative..................... 4,018
Interest Expense............................... 28,954
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs..................... 3,286
Depreciation and Other
Amortization................................. 28,049
--------
Total Expenses............................. 122,823
--------
Income Before Gain on Sales
of Properties, Minority
Interest and Extraordinary
Item ........................................ 77,016
Gain on Sales of Properties.................... 4,344
--------
Income Before Minority
Interest and Extraordinary
Item......................................... 81,360
Income Allocated to Minority
Interest..................................... (2,931)
--------
Income Before Extraordinary
Item......................................... 78,429
--------
Preferred Stock Dividends......................
(3,919)
Income Before Extraordinary --------
Item Available to Common
Shareholders................................. $74,510
========
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statement.
24
<PAGE> 26
FIRST INDUSTRIAL REALTY TRUST, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1997 1997
Pacifica Sealy Acquisition Acquisition
Acquisition Acquisition III II
Subtotal Properties Properties Properties Properties
Carry (Historical) (Historical) (Historical) (Historical)
Forward Note 2 (k) Note 2 (l) Note 2 (m) Note 2 (n)
-------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Rental Income................................. $157,833 $16,849 $15,163 $1,945 $6,213
Tenant Recoveries and
Other Income................................. 42,006 3,453 1,546 244 1,256
-------- ------- ------- ------ ------
Total Revenues.............................. 199,839 20,302 16,709 2,189 7,469
-------- ------- ------- ------ ------
EXPENSES:
Real Estate Taxes............................. 34,086 2,521 2,068 222 1,518
Repairs and Maintenance....................... 8,825 1,554 1,546 168 424
Property Management........................... 6,890 767 700 91 254
Utilities..................................... 5,604 547 329 51 53
Insurance..................................... 1,515 116 264 14 56
Other......................................... 1,596 155 --- 4 31
General and Administrative.................... 4,018 --- --- --- ---
Interest Expense.............................. 28,954 --- --- --- ---
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs..................... 3,286 --- --- --- ---
Depreciation and Other
Amortization................................. 28,049 --- --- --- ---
-------- ------- ------- ------ ------
Total Expenses.............................. 122,823 5,660 4,907 550 2,336
-------- ------- ------- ------ ------
Income Before Gain on Sales of
Properties, Minority Interest
and Extraordinary Item....................... 77,016 14,642 11,802 1,639 5,133
Gain on Sale of Properties..................... 4,344 --- --- --- ---
-------- ------- ------- ------ ------
Income Before Minority Interest
and Extraordinary Item....................... 81,360 14,642 11,802 1,639 5,133
Income Allocated to Minority
Interest..................................... (2,931) --- --- --- ---
-------- ------- ------- ------ ------
Income Before Extraordinary
Item......................................... 78,429 14,642 11,802 1,639 5,133
-------- ------- ------- ------ ------
Preferred Stock Dividends ..................... (3,919) --- --- --- ---
-------- ------- ------- ------ ------
Income Before Extraordinary
Item Available to Common
Shareholders................................. $ 74,510 $14,642 $11,802 $1,639 $5,133
======== ======= ======= ====== ======
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(24,755,953 as of December
31,1996).....................................
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding
(29,890,106 as of
December 31, 1996, pro
forma).......................................
<CAPTION>
Pro Forma Subtotal
Adjustments Carry
Note 2 (o) Forward
---------- --------
<S> <C> <C>
REVENUES:
Rental Income................................. $ --- $198,003
Tenant Recoveries and
Other Income................................. --- 48,505
--------- ---------
Total Revenues.............................. --- 246,508
--------- ---------
EXPENSES:
Real Estate Taxes............................. --- 40,415
Repairs and Maintenance....................... --- 12,517
Property Management........................... --- 8,702
Utilities..................................... --- 6,584
Insurance..................................... --- 1,965
Other......................................... --- 1,786
General and Administrative.................... --- 4,018
Interest Expense.............................. 16,834 45,788
Amortization of Interest Rate
Protection Agreements and
Deferred Financing Costs..................... --- 3,286
Depreciation and Other
Amortization................................. 16,421 44,470
--------- ---------
Total Expenses.............................. 33,255 169,531
--------- ---------
Income Before Gain on Sales of
Properties, Minority Interest
and Extraordinary Item....................... (33,255) 76,977
Gain on Sale of Properties..................... --- 4,344
--------- ---------
Income Before Minority Interest
and Extraordinary Item....................... (33,255) 81,321
Income Allocated to Minority
Interest..................................... (5,111) (8,042)
--------- ---------
Income Before Extraordinary
Item......................................... (38,366) 73,279
--------- ---------
Preferred Stock Dividends ..................... (13,063) (16,982)
--------- ---------
Income Before Extraordinary
Item Available to Common
Shareholders................................. $ (51,429) $ 56,297
========= =========
Income Before Extraordinary
Item Per Weighted Average
Common Share Outstanding
(24,755,953 as of December
31,1996).....................................
Pro Forma Income Before
Extraordinary Item Per
Weighted Average Common
Share Outstanding
(29,890,106 as of
December 31, 1996, pro
forma)....................................... $ 1.56
=========
</TABLE>
The accompanying notes are an integral part of the pro forma financial statement
25
<PAGE> 27
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION.
First Industrial Realty Trust, Inc. and its subsidiaries (the "Company")
was organized in the state of Maryland on August 10, 1993. The Company is a
real estate investment trust ("REIT") as defined in the Internal Revenue Code.
The accompanying unaudited pro forma statement of operations for the
Company reflects the historical operations of the Company for the period
January 1, 1996 through December 31, 1996 and the acquisition of 28 properties
(the "First Highland Properties") and 18 properties (the "Other Acquisition
Properties") acquired by the Company between January 1, 1996 and April 10, 1996
which were reported on Form 8-K/A No. 1 dated March 20, 1996, the acquisition
of 14 properties (the "Acquisition Properties") and 43 properties (the "1996
Acquisition Properties") between April 11, 1996 and December 31, 1996, one
property acquired on January 9, 1997 (the "1997 Acquisition Property"), and 39
properties acquired on January 31, 1997 (the "Lazarus Burman Properties") which
are reported on Form 8-K/A No. 1 dated February 12, 1997, the acquisition of
15 properties (the "Punia Phase I Properties") acquired on June 30, 1997 and 27
properties acquired through October 31, 1997 and six properties to be acquired
(the "Punia Phase II Properties") (together, the "Punia Acquisition
Properties") which are reported on Form 8-K/A No.1 dated June 30, 1997, 11
properties acquired during the period February 1, 1997 through July 14, 1997
(the "Other 1997 Acquisition Properties") and two properties acquired during
the period February 1, 1997 through July 14, 1997 (the "1997 Acquisition I
Properties") reported on Form 8-K/A No. 2 dated June 30, 1997 and the
acquisition of 91 properties on October 30, 1997 and the additional 15
properties to be acquired within the next several months (together, the
"Pacifica Acquisition Properties"), 64 properties to be acquired by November
30, 1997 (the "Sealy Acquisition Properties"), seven properties acquired on
October 17, 1997 (the "1997 Acquisition III Properties") and 25 properties
acquired during the period July 15, 1997 through October 31, 1997 (the "1997
Acquisition II Properties") reported on this Form 8-K dated October 30, 1997.
The accompanying unaudited pro forma financial statement has been prepared
based upon certain pro forma adjustments to the historical December 31, 1996
financial statement of the Company. The pro forma statement of operations for
the year ended December 31, 1996 has been prepared as if the properties
acquired subsequent to December 31, 1995 had been acquired on either January 1,
1996 or the lease commencement date if the property was developed and as if the
5,175,000 shares of $.01 par value common stock issued on February 2, 1996 (the
"February 1996 Equity Offering"), the 5,750,000 shares of $.01 par value common
stock issued on October 25, 1996 (the "October 1996 Equity Offering"), the
40,000 shares of $1 par value Series B Cumulative Preferred Stock issued on May
14, 1997 (the "Series B Preferred Stock Offering"), the 20,000 shares of $1 par
value Series C Cumulative Preferred Stock issued on June 6, 1997 (the "Series C
Preferred Stock Offering"), the 637,440 shares of $.01 par value common stock
issued on September 16, 1997 (the "September 1997 Equity Offering") and the
5,400,000 shares of $.01 par value common stock issued on October 15, 1997 (the
"October 1997 Equity Offering") had been completed on January 1, 1996.
The unaudited pro forma financial statement is not necessarily indicative
of what the Company's results of operations would have been for the year ended
December 31, 1996 had the properties been acquired as described above, nor do
they purport to present the future results of operations of the Company.
2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - DECEMBER 31, 1996
(a) The historical operations reflect income from continuing operations of
the Company for the period January 1, 1996 through December 31, 1996 as
reported on the Company's Form 10-K dated March 27, 1997.
(b) The historical operations reflect the operations of the First Highland
Properties for the period January 1, 1996 through the acquisition date of
these properties on March 20, 1996.
(c) The historical operations reflect the operations of the Other
Acquisition Properties for the period January 1, 1996 through their
respective acquisition dates.
26
<PAGE> 28
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(d) The historical operations reflect the operations of the Acquisition
Properties for the period January 1, 1996 through their respective
acquisition dates.
(e) The historical operations reflect the operations of the 1996 Acquisition
Properties for the period January 1, 1996 through their respective
acquisition dates.
(f) The historical operations reflect the operations of the 1997 Acquisition
Property for the period January 1, 1996 through December 31, 1996.
(g) The historical operations reflect the operations of the Lazarus Burman
Properties for the period January 1, 1996 through December 31, 1996.
(h) The historical operations reflect the operations of the Punia Acquisition
Properties for the period January 1, 1996 through December 31, 1996.
(i) The historical operations reflect the operations of the Other 1997
Acquisition Properties for the period January 1, 1996 through December
31, 1996.
(j) The historical operations reflect the operations of the 1997 Acquisition
I Properties for the period January 1, 1996 through December 31, 1996.
(k) The historical operations reflect the operations of the Pacifica
Acquisition Properties for the period January 1, 1996 through December
31, 1996.
(l) The historical operations reflect the operations of the Sealy Acquisition
Properties for the period January 1, 1996 through December 31, 1996.
(m) The historical operations reflect the operations of the 1997 Acquisition
III Properties for the period January 1, 1996 through December 31, 1996.
(n) The historical operations reflect the operations of the 1997 Acquisition
II Properties for the period January 1, 1996 through December 31, 1996.
(o) In connection with the First Highland Properties acquisition, the Company
assumed two mortgage loans totaling $9.4 million (the "Assumed
Indebtedness") and also entered into a new mortgage loan in the amount of
$36.8 million ( the "New Indebtedness"). The interest expense adjustment
reflects interest on the Assumed Indebtedness and the New Indebtedness as
if such indebtedness was outstanding beginning January 1, 1996.
In connection with the Lazarus Burman Properties acquisition, the Company
assumed two mortgage loans totaling $4.5 million (the "Lazarus Burman
Mortgage Loans"). The interest expense adjustment reflects interest on
the Lazarus Burman Mortgage Loans for the pro forma period and as if such
indebtedness was outstanding beginning January 1, 1996.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR")
plus 2%) for the assumed earlier purchase of the Other Acquisition
Properties offset by the interest savings related to the assumed repayment
of $59.4 million of acquisition facility borrowings on January 1, 1996
from the proceeds of the February 1996 Equity Offering.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at LIBOR plus 2%) for borrowings under the Company's
$150 million secured revolving credit facility (the "1994 Acquisition
27
<PAGE> 29
FIRST INDUSTRIAL REALTY TRUST, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
Facility") or LIBOR plus 1.1% for borrowings under the Company's $200
million unsecured revolving credit facility (the "1996 Acquisition
Facility") for the assumed earlier purchase of the Acquisition Properties
and the 1996 Acquisition Properties, offset by the related interest
savings related to the assumed repayment of $84.2 million of acquisition
facility borrowings on January 1, 1996 from the proceeds of the October
1996 Equity Offering.
The interest expense adjustment reflects an increase in the acquisition
facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR")
plus 1%) for the assumed earlier purchase of the 1997 Acquisition
Property, the Lazarus Burman Properties, the Punia Acquisition Properties,
the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties,
the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the
1997 Acquisition III Properties and the 1997 Acquisition II Properties
offset by the interest savings related to the assumed repayment of $144.0
million of acquisition facility borrowings on January 1, 1996 from the
proceeds of the Series B Preferred Stock Offering and Series C Preferred
Stock Offering and the assumed repayment of $196.1 million of acquisition
facility borrowings on January 1, 1996 from the proceeds of the September
1997 Equity Offering and the October 1997 Equity Offering.
The depreciation and amortization adjustment reflects the charges for the
First Highland Properties, the Other Acquisition Properties, the
Acquisition Properties, the 1996 Acquisition Properties, the 1997
Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition
Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I
Properties, the Pacifica Acquisition Properties, the Sealy Acquisition
Properties, the 1997 Acquisition III Properties and the 1997 Acquisition
II Properties from January 1, 1996 through the earlier of their respective
acquisition date or December 31, 1996 and if such properties were acquired
on January 1, 1996.
Income allocated to minority interest reflects income attributable to
units in First Industrial, L.P. (the "Units") owned by unitholders other
than the Company. The minority interest adjustment reflects a 12.5%
minority interest for the year ended December 31, 1996. This adjustment
reflects the income to unitholders for Units issued in connection with
certain property acquisitions as if such Units had been issued on January
1, 1996 and to reflect the completion of the February 1996 Equity
Offering, the October 1996 Equity Offering, the Series B Preferred Stock
Offering, the Series C Preferred Stock Offering, the September 1997 Equity
Offering and the October 1997 Equity Offering as of January 1, 1996.
The preferred stock dividend adjustment reflects preferred dividends
attributable to the Series B Preferred Stock and the Series C Preferred
Stock as if such preferred stock was outstanding as of January 1, 1996.
28
<PAGE> 30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1933, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST INDUSTRIAL REALTY TRUST, INC.
November 13, 1997 By: /s/ Michael J. Havala .
-------------------------------------------
Michael J. Havala
Chief Financial Officer
(Principal Financial and Accounting Officer)
29
<PAGE> 31
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
23 Consent of Coopers & Lybrand L.L.P.,
Independent Accountants
30
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 8-K dated October 30, 1997 and
the incorporation by reference into the Registrant's five previously filed
Registration Statements on Form S-3 (File Nos. 33-95190, 333-03999, 333-21873,
333-21887 and 333-29879), and the Registrant's two previously filed
Registration Statements on Form S-8 (File No.'s 33-95188 and 333-36699) of our
report dated October 27, 1997, on our audit of the combined historical
statement of revenues and certain expenses of the Pacifica Acquisition
Properties, of our report dated October 16, 1997 on our audit of the combined
historical statement of revenues and certain expenses of the Sealy Acquisition
Properties and of our report dated October 20, 1997 on our audit of the
combined historical statement of certain revenues and certain expenses of the
1997 Acquisition III Properties.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
November 13, 1997
31
