<PAGE>
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 1934
Date of Report (Date of earliest event reported): February 17, 1998
WEEKS REALTY, L.P.
(Exact name of registrant as specified in its charter)
Georgia 000-22933 58-2121388
------- --------- ----------
(State of (Commission File (IRS Employer Identification
Incorporation) Number) No.)
4497 Park Drive, Norcross, Georgia 30093
----------------------------------------
(Address of principal executive offices, including zip code)
(770) 923-4076
--------------
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
In accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired under Rule 3-14 of
Regulation S-X, the following audited and unaudited statements of revenues and
certain expenses and pro forma financial information relating to Weeks Realty,
L.P.'s (the "Operating Partnership") acquisition of certain real estate
properties of NWI Warehouse Group, L.P. ("NWI") and Lichtin Properties, Inc. and
its affiliated entities ("Lichtin") are attached as exhibits to this Current
Report.
During the period from January 1, 1997 through December 31, 1997, the Operating
Partnership, a 76% majority owned subsidiary of Weeks Corporation (the
"Company"), acquired 19 industrial and suburban office properties located in
Nashville, Tennessee and the Research Triangle area of North Carolina from NWI
and Lichtin, respectively, for aggregate acquisition consideration of
approximately $92.7 million, including closing costs and acquisition expenses.
The acquisition prices were determined through arm's length negotiations between
the Operating Partnership and NWI and Lichtin after an evaluation of the
properties' physical condition, lease characteristics, operating expense rates
and future capital improvement needs. The aggregate acquisition consideration
consisted of assumed mortgage indebtedness of approximately $24.0 million, the
assumption and repayment of other indebtedness and the payment of cash through
borrowings under the Operating Partnership's revolving credit facility with
Wachovia Bank totaling approximately $37.6 million, and units of limited
partnership interest in the Operating Partnership valued at $31.1 million. The
NWI real estate properties were acquired pursuant to the Contribution Agreement
for Development Properties between the Operating Partnership and NWI dated
November 1, 1996, and the Lichtin real estate properties were acquired pursuant
to the Contribution Agreement for Completed Properties -- Lichtin Portfolio, the
Contribution Agreement for Northern Telecom Properties and the Contribution
Agreement for Development Properties and Regency Forest Land between the
Operating Partnership and Lichtin, all dated December 31, 1996.
On November 30, 1996 and December 31, 1996, respectively, the Operating
Partnership acquired the business operations of NWI and Lichtin and a
significant portion of their industrial and suburban office portfolios. In
conjunction with the initial closing transactions, the Operating Partnerhip
agreed, subject to completion of certain properties under development and the
updating of its due diligence procedures, to acquire these additional industrial
and suburban office properties from NWI and Lichtin pursuant to the terms of the
acquisition agreements referred to above.
The 19 properties total approximately 1,549,000 square feet of leasable space
with 15 of the properties located in the Research Triangle area of North
Carolina and four of the properties located in Nashville, Tennessee. Six of the
properties are multi-tenant business distribution buildings, nine of the
properties are business service buildings (five plus a portion of a sixth
building are leased to Northern Telecom, Ltd.), two of the properties are
multi-tenant suburban office buildings and two of the properties are multi-
tenant bulk warehouse buildings. The properties were constructed between 1982
and 1997. The properties are leased to a number of tenants and were on average
96% occupied at December 31, 1997. The Operating Partnership expects to continue
to operate the properties as business distribution, business service, bulk
warehouse and suburban office buildings, as applicable, held for lease to
tenants.
2
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements required by Item 7(a)(3) relating to the
acquisition of 15 industrial and suburban office properties in the
Research Triangle area of North Carolina from Lichtin (the "Lichtin
1997 Acquisition Properties") and the acquisition of four industrial
properties in Nashville, Tennessee from NWI (the "NWI 1997 Acquisition
Properties") described in Item 5 are attached hereto as Exhibits A and
B and incorporated herein by this reference.
(b) Pro Forma Financial Information
The unaudited pro forma financial information required by Item 7(b)
relating to the NWI and Lichtin 1997 Acquisition Properties described
in Item 5 is attached hereto as Exhibit C and incorporated herein by
this reference.
(c) Exhibits
Exhibit
No. Description
----------------------------------------------------------------------
A Financial statements of the Lichtin 1997
Acquisition Properties required by Item 7(a)(3).
B Financial statements of the NWI 1997
Acquisition Properties required by Item 7(a)(3).
C Pro forma financial information required by
Item 7(b).
23.1 Consent of Independent Public Accountants.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEEKS REALTY, L.P.
Registrant
By: Weeks GP Holdings, Inc.,
its sole general partner
Date: February 17, 1998 /s/ David P. Stockert
---------------------------------
David P. Stockert
Senior Vice President and
Chief Financial Officer
4
<PAGE>
Index to Exhibits
Exhibit Description Page
- ------- ----------- ----
A Financial statements of the Lichtin 1997 Acquisition
Properties required by Item 7(a)(3) 6
B Financial statements of the NWI 1997 Acquisition Properties
required by Item 7(a)(3) 12
C Pro forma financial information required by Item 7(b) 17
23.1 Consent of Independent Public Accountants 25
5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports dated February 13, 1998 and to all
references to our Firm, included in Weeks Realty, L.P.'s Current Report on Form
8-K dated February 17, 1998, and filed on February 18, 1998, into the Operating
Partnership's previously filed Registration Statement on Form S-3 (File No. 333-
32755).
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 18, 1998
25
<PAGE>
Exhibit A
LICHTIN 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND
CERTAIN EXPENSES FOR THE YEARS
ENDED DECEMBER 31, 1996, 1995 AND 1994 AND
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Weeks Realty, L.P.
We have audited the accompanying combined statements of revenue and certain
expenses of the Lichtin 1997 Acquisition Properties, as defined in Note 1, for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements 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 statements of revenue and certain
expenses are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statements of
revenue and certain expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the Lichtin
1997 Acquisition Properties after their acquisition by Weeks Realty, L.P., a
subsidiary of Weeks Corporation. The accompanying combined statements of
revenue and certain expenses were prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
Weeks Realty, L.P.'s Form 8-K and are not intended to be a complete presentation
of the Lichtin 1997 Acquisition Properties' revenue and expenses.
In our opinion, the combined statements of revenue and certain expenses present
fairly, in all material respects, the revenue and certain expenses (exclusive of
expenses described in Note 1) of the Lichtin 1997 Acquisition Properties for
each of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 13, 1998
<PAGE>
LICHTIN 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Nine Months Year Ended Year Ended Year Ended
Ended Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(In thousands) 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenue:
Rental income $ 2,437 $ 4,347 $ 4,670 $ 4,555
Tenant reimbursements 1,179 2,187 2,362 2,408
- ----------------------------------------------------------------------------------------------------------------
3,616 6,534 7,032 6,963
- ----------------------------------------------------------------------------------------------------------------
Certain Expenses:
Property operating and
maintenance 1,176 2,100 2,241 2,302
Real estate taxes 215 381 381 418
- ----------------------------------------------------------------------------------------------------------------
1,391 2,481 2,622 2,720
- ----------------------------------------------------------------------------------------------------------------
Revenue in Excess of
Certain Expenses $ 2,225 $ 4,053 $ 4,410 $ 4,243
================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
LICHTIN 1997 ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Real Estate Properties Acquired
The accompanying financial statements include the combined operations (see
"Basis of Presentation" below) of 15 industrial and suburban office
properties (the "Lichtin 1997 Acquisition Properties") located in the
Research Triangle area of North Carolina and owned by entities affiliated
with Lichtin Properties, Inc. ("Lichtin"). The Lichtin entities are a
related party of Weeks Corporation (the "Company") and Weeks Realty, L.P.
(the "Operating Partnership") resulting from their ownership interests in
the Company and the Operating Partnership.
On December 31, 1996, the Company, through the Operating Partnership,
acquired the business operations of Lichtin and a significant portion of
its industrial and suburban office portfolio. In conjunction with the
initial closing transaction, the Company agreed, subject to completion of
certain properties under development and the updating of its due diligence
procedures, to acquire additional industrial and suburban office properties
from Lichtin. As detailed in the table below, the Company has acquired the
following properties from Lichtin during 1997 on the dates detailed below.
<TABLE>
<CAPTION>
Date Year Square
Acquired Property Name Constructed Feet Property Type
---------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
1/31/97 409A Airport Blvd. 1982 85,129 Business distribution
1/31/97 409B Airport Blvd. 1983 42,712 Business distribution
1/31/97 409C Airport Blvd 1986 26,215 Business distribution
7/1/97 100 Perimeter Park Dr. 1987 55,664 Business service
7/1/97 200 Perimeter Park Dr. 1987 55,664 Business service
7/1/97 300 Perimeter Park Dr. 1986 55,664 Business service
7/1/97 400 Perimeter Park Dr. 1983 74,088 Business service
7/1/97 500 Perimeter Park Dr. 1985 74,017 Business service
7/1/97 800 Perimeter Park Dr. 1984 55,637 Business service
7/1/97 1000 Perimeter Park Dr. 1982 56,436 Business service
8/1/97 1100 Perimeter Park Dr. 1990 84,950 Business service
10/1/97 2600 Perimeter Park Dr. 1996 70,848 Business service
10/1/97 2000 Perimeter Park Dr. 1997 55,636 Suburban office
10/1/97 4000 Regency Pkwy. 1997 102,561 Suburban office
10/1/97 101 Innovation Ave. 1996 97,200 Business distribution
</TABLE>
Basis of Presentation
The accompanying combined financial statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses not comparable to the
operations of the Lichtin 1997 Acquisition Properties after their
acquisition by the Operating Partnership, such as property management fees,
interest, depreciation, amortization and other costs not directly related
to the future operations of the Lichtin 1997 Acquisition Properties.
<PAGE>
The unaudited combined financial statement for the period from January 1,
1997 to the earlier of the building acquisition dates or September 30, 1997
has been included to comply with the applicable rules and regulations of
the Securities and Exchange Commission and is not intended to be a complete
presentation of historical revenue and certain expenses for such properties
for any period other than as defined herein. The historical revenue and
certain expenses of the above listed properties subsequent to their
acquisition dates have been excluded from this financial statement as such
amounts are included in the historical financial statements of the Company.
The four buildings acquired on October 1, 1997, commenced rental operations
in 1997. Prior to 1997, these buildings were under development.
Use of Estimates
The preparation of the combined statements of revenue and certain expenses
in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
2. LEASING ACTIVITY:
Future minimum rentals due under noncancelable operating leases with
tenants as of December 31, 1996, are as follows (in thousands):
---------------------------------------------------------------------
Year Amount
---------------------------------------------------------------------
1997 $ 4,147
1998 3,843
1999 3,616
2000 2,642
2001 288
Thereafter 199
---------------------------------------------------------------------
$ 14,735
---------------------------------------------------------------------
In addition to minimum rental payments, tenants pay reimbursements for
their pro rata share of specified operating expenses, which amounted to
$1,179,000 for the nine months ended September 30, 1997 (unaudited) and
$2,187,000, $2,362,000 and $2,408,000 for the years ended December 31,
1996, 1995 and 1994, respectively. Certain leases contain options to renew.
<PAGE>
During the years ended December 31, 1996, 1995 and 1994, respectively, 64%,
60% and 62% of rental revenues were received from one tenant (Northern
Telecom, Ltd.), which occupies space in six of the buildings. The lease for
these spaces expires in July 2005 and includes an option for the tenant to
terminate the lease in June 2000 subject to the payment of termination fees
and certain space restoration costs. Future minimum rents, excluding the
termination fee of $634,000 included in 2000, would be $3,400,000,
$3,070,000 and $9,938,000 for 2000, 2001 and the periods thereafter,
respectively, if the tenant discussed herein does not exercise its early
termination option in 2000.
<PAGE>
Exhibit B
NWI 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND
CERTAIN EXPENSES FOR THE YEAR
ENDED DECEMBER 31, 1996, FOR THE PERIOD FROM
AUGUST 1, 1995 (THE RENTAL COMMENCEMENT DATE)
TO DECEMBER 31, 1995
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of Weeks Realty, L.P.
We have audited the accompanying combined statements of revenue and certain
expenses of the NWI 1997 Acquisition Properties, as defined in Note 1, for each
of the year ended December 31, 1996, and for the period from August 1, 1995 (the
rental commencement date) to December 31, 1995. These financial statements are
the responsibility of management. Our responsibility is to express an opinion on
these financial statements 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 statements of revenue and certain
expenses are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statements of
revenue and certain expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As described in Note 1, these financial statements exclude certain expenses that
would not be comparable with those resulting from the operations of the NWI 1997
Acquisition Properties after their acquisition by Weeks Realty, L.P., a
subsidiary of Weeks Corporation. The accompanying combined statements of revenue
and certain expenses were prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission for inclusion in Weeks
Realty, L.P.'s Form 8-K and are not intended to be a complete presentation of
the NWI 1997 Acquisition Properties' revenue and expenses.
In our opinion, the combined statements of revenue and certain expenses present
fairly, in all material respects, the revenue and certain expenses (exclusive of
expenses described in Note 1) of the NWI 1997 Acquisition Properties for the
year ended December 31, 1996, and for the period from August 1, 1995 (the rental
commencement date) to December 31, 1995, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 13, 1998
<PAGE>
NWI 1997 ACQUISITION PROPERTIES
(AS DEFINED IN NOTE 1)
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
- --------------------------------------------------------------------------------
Period From
Nine Months Year Ended Aug. 1, 1995
Ended Sept. 30, Dec. 31, to Dec. 31,
(In thousands) 1997 1996 1995
- --------------------------------------------------------------------------------
(Unaudited)
Revenue:
Rental income $ 504 $ 702 $ 122
Tenant reimbursements 108 114 12
- --------------------------------------------------------------------------------
612 816 134
- --------------------------------------------------------------------------------
Certain Expenses:
Property operating and
maintenance 64 110 29
Real estate taxes 83 52 4
- --------------------------------------------------------------------------------
147 162 33
- --------------------------------------------------------------------------------
Revenue in Excess of
Certain Expenses $ 465 $ 654 $ 101
================================================================================
The accompanying notes are an integral part of these statements.
<PAGE>
NWI 1997 ACQUISITION PROPERTIES
NOTES TO COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Real Estate Properties Acquired
The accompanying financial statements include the combined operations (see
"Basis of Presentation" below) of four industrial properties (the "NWI 1997
Acquisition Properties") located in Nashville, Tennessee and owned by NWI
Warehouse Group, L.P. ("NWI"). NWI is a related party of Weeks Corporation
(the "Company") and Weeks Realty, L.P. (the "Operating Partnership")
resulting from its ownership interests in the Company and the Operating
Partnership.
On November 30, 1996, the Company, through the Operating Partnership,
acquired the business operations of NWI and a significant portion of its
industrial property portfolio. In conjunction with the initial closing
transactions, the Company agreed, subject to completion of certain
properties under development and the updating of its due diligence
procedures, to acquire additional industrial properties from NWI. As
detailed in the table below, the Company has acquired the following
properties from NWI during 1997 on the dates detailed below.
<TABLE>
<CAPTION>
Date Year Square
Acquired Property Name Constructed Feet Property Type
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3/31/97 277 Mallory Station Rd. 1995 127,285 Business distribution
3/31/97 735 Melrose Ave. 1995 165,902 Bulk warehouse
12/1/97 1000 Airpark Center 1997 106,122 Business distribution
12/1/97 1411 Donelson Pike 1996 156,933 Bulk warehouse
</TABLE>
Basis of Presentation
The accompanying combined financial statements have been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statements exclude certain historical expenses not comparable to the
operations of the NWI 1997 Acquisition Properties after their acquisition
by the Operating Partnership, such as property management fees, interest,
depreciation, amortization and other costs not directly related to the
future operations of the NWI 1997 Acquisition Properties.
The two buildings acquired on March 31, 1997, commenced rental operations
on August 1, 1995. The two buildings acquired on December 1, 1997,
commenced rental operations in 1997. In periods prior to their rental
commencement, the buildings were under development. As such, the
accompanying statements of revenue and certain expenses reflect only
periods subsequent to the commencement of rental operations.
The unaudited combined financial statement for the period from January 1,
1997 to the earlier of the building acquisition dates or September 30, 1997
has been included to comply with the applicable rules and regulations of
the Securities and Exchange Commission and is not
<PAGE>
intended to be a complete presentation of historical revenue and certain
expenses for such properties for any period other than as defined herein.
The historical revenue and certain expenses of the above listed properties
subsequent to their acquisition dates have been excluded from this
financial statement as such amounts are included in the historical
financial statements of the Company.
Use of Estimates
The preparation of the combined statements of revenue and certain expenses
in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Revenue Recognition
All leases are classified as operating leases, and rental revenue is
recognized on a straight-line basis over the terms of the leases.
<PAGE>
2. LEASING ACTIVITY:
Future minimum rentals due under noncancelable operating leases with
tenants as of December 31, 1996, are as follows (in thousands):
---------------------------------------------------------------------------
Year Amount
---------------------------------------------------------------------------
1997 $ 1,110
1998 1,107
1999 1,087
2000 928
2001 369
Thereafter 792
---------------------------------------------------------------------------
$ 5,393
---------------------------------------------------------------------------
In addition to minimum rental payments, tenants pay reimbursements for their pro
rata share of specified operating expenses, which amounted to $108,000 for the
nine months ended September 30, 1997 (unaudited), $114,000 for the year ended
December 31, 1996, and $12,000 for the period from August 1, 1995 to December
31, 1995. Certain leases contain options to renew.
<PAGE>
Exhibit C
Weeks Realty, L.P.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
The unaudited condensed consolidated statements of operations are presented as
if the Operating Partnership acquired the NWI and Lichtin 1997 Acquisition
Properties as described herein, as of January 1, 1996. The unaudited combined
results of operations of the NWI and Lichtin 1997 Acquisition Properties for the
nine months ended September 30, 1997 include the historical revenue and certain
operating expenses of the properties through their respective acquisition dates
(see Note 1 to the combined statements of revenue and certain expenses included
herein as Exhibits A and B). The actual operating results of the acquired
properties subsequent to their acquisition dates are included in the historical
financial statements of the Operating Partnership. In management's opinion, all
adjustments necessary to present fairly the effects of the acquisition of the
NWI and Lichtin 1997 Acquisition Properties have been made.
These unaudited pro forma condensed consolidated statements of operations should
be read in conjunction with the unaudited pro forma condensed consolidated
balance sheet of the Operating Partnership included herein, the consolidated
financial statements and accompanying notes thereto of the Operating Partnership
for the year ended December 31, 1996 included in its Form 10/A dated and filed
with the Commission on October 1, 1997, and the unaudited condensed consolidated
financial statements and accompanying notes thereto of the Operating Partnership
included in its September 30, 1997 Quarterly Report on Form 10-Q.
The unaudited pro forma condensed consolidated statements of operations are not
necessarily indicative of what the actual results of operations of the Operating
Partnership would have been assuming the Operating Partnership had acquired the
NWI and Lichtin 1997 Acquisition Properties as of the beginning of each period
presented, nor do they purport to represent the results of operations for future
periods.
<PAGE>
Weeks Realty, L.P.
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 1997
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Operating Lichtin 1997 NWI 1997
Partnership Acquisition Acquisition Pro Forma
Historical(a) Properties(b) Properties(b) Adjustments Pro Forma
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Rental income $ 57,326 $ 2,437 $ 504 $ -- $ 60,267
Tenant reimbursements 7,319 1,179 108 -- 8,606
Direct financing lease 565 -- -- -- 565
Other 406 -- -- -- 406
- -------------------------------------------------------------------------------------------------------------------------------
65,616 3,616 612 -- 69,844
- -------------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating
and maintenance 7,720 1,176 64 -- 8,960
Real estate taxes 5,394 215 83 -- 5,692
Depreciation and amortization 17,344 -- -- 997/(c)/ 18,341
Interest 14,341 -- -- 2,113/(d)/ 16,454
Amortization of deferred
financing costs 679 -- -- -- 679
General and administrative 3,675 -- -- -- 3,675
- -------------------------------------------------------------------------------------------------------------------------------
49,153 1,391 147 3,110 53,801
- -------------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of
unconsolidated subsidiaries,
interest income and gain on sale
of real estate asset 16,463 2,225 465 (3,110) 16,043
Equity in earnings of
unconsolidated subsidiaries 1,538 -- -- -- 1,538
Interest income 996 -- -- -- 996
Gain on sale of real estate asset 209 -- -- -- 209
- -------------------------------------------------------------------------------------------------------------------------------
Net Income $ 19,206 $ 2,225 $ 465 $ (3,110) $ 18,786
- -------------------------------------------------------------------------------------------------------------------------------
Earnings Per Unit Data:
Basic $ 0.92 -- -- -- $ 0.87
Diluted $ 0.91 -- -- -- $ 0.86
- -------------------------------------------------------------------------------------------------------------------------------
Weighted average units:
Basic 20,816 -- -- 707/(e)/ 21,523
Diluted 21,018 -- -- 707/(e)/ 21,725
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Weeks Realty, L.P.
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 1996
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Operating Lichtin 1997 NWI 1997
Partnership Acquisition Acquisition Pro Forma
Historical(a) Properties(b) Properties(b) Adjustments Pro Forma
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue
Rental $ 48,162 $ 4,347 $ 702 $ -- $ 53,211
Tenant reimbursements 4,517 2,187 114 -- 6,818
Direct financing lease 768 -- -- -- 768
Other 436 -- -- -- 436
- ---------------------------------------------------------------------------------------------------------------------------
53,883 6,534 816 -- 61,233
- ---------------------------------------------------------------------------------------------------------------------------
Expenses
Property operating
and maintenance 6,025 2,100 110 -- 8,235
Real estate taxes 4,725 381 52 -- 5,158
Depreciation and amortization 13,474 -- -- 1,412(c) 14,886
Interest 11,779 -- -- 2,813(d) 14,592
Amortization of deferred
financing costs 864 -- -- -- 864
General and administrative 3,039 -- -- -- 3,039
- ---------------------------------------------------------------------------------------------------------------------------
39,906 2,481 162 4,225 46,774
- ---------------------------------------------------------------------------------------------------------------------------
Income before equity in earnings of
unconsolidated subsidiaries and
interest income 13,977 4,053 654 (4,225) 14,459
Equity in earnings of
unconsolidated subsidiaries 1,340 -- -- -- 1,340
Interest income 492 -- -- -- 492
- ---------------------------------------------------------------------------------------------------------------------------
Net Income $ 15,809 $ 4,053 $ 654 $ (4,225) $ 16,291
- ---------------------------------------------------------------------------------------------------------------------------
Earnings Per Unit Data:
Basic $ 1.11 -- -- -- $ 1.09
Diluted $ 1.10 -- -- -- $ 1.08
- ---------------------------------------------------------------------------------------------------------------------------
Weighted average units:
Basic 14,280 -- -- 641(e) 14,921
Diluted 14,386 641(e) 15,027
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Weeks Realty, L.P.
Notes and Assumptions to Unaudited Pro Forma
Condensed Consolidated Statements of Operations
(a) Represents the Operating Partnership's unaudited condensed consolidated
statement of operations contained in its Quarterly Report on Form 10-Q
for the nine months ended September 30, 1997, and the Operating
Partnership's consolidated statement of operations contained in its
Form 10/A dated and filed with the Commission on October 1, 1997, for
the year ended December 31, 1996, as applicable.
(b) Represents adjustments to reflect historical rental revenue, tenant
reimbursements, real estate taxes and certain property operating and
maintenance expenses for the Lichtin 1997 Acquisition Properties as
detailed in Exhibit A and the NWI 1997 Acquisition Properties as
detailed in Exhibit B.
(c) Represents adjustment to reflect depreciation expense for the NWI and
Lichtin 1997 Acquisition Properties based upon the Operating
Partnership's assumed allocation of the acquisition price to land,
buildings and improvements using a 35 year life for buildings and the
life of the lease for tenant improvements for periods prior to the
buildings' respective acquisition dates (see Note 1 to the combined
statements of revenue and certain expenses included herein as Exhibits
A and B).
(d) Represents interest expense for periods prior to the buildings'
respective acquisition dates (see Note 1 to the combined statements of
revenue and certain expenses included herein as Exhibits A and B)
associated with approximately $24.0 million of mortgage debt assumed at
a weighted average interest rate of approximately 9.0% and additional
Operating Partnership revolving credit facility borrowings of
approximately $37.6 million at an interest rate of 7.00% which were
utilized to acquire the Lichtin 1997 Acquisition Properties.
(e) Represents the adjustment of weighted average units outstanding to
reflect the units in the Operating Partnership issued in conjunction
with the acquisitions of the NWI and Lichtin 1997 Acquisition
Properties.
<PAGE>
Weeks Realty, L.P.
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
The unaudited pro forma condensed consolidated balance sheet is presented as if
the acquisition of certain of the Lichtin and NWI 1997 Acquisition Properties
which occurred subsequent to September 30, 1997 (consisting of four properties
acquired from Lichtin and two properties from NWI for total acquisition
consideration of approximately $43.4 million) had occurred as of September 30,
1997. The unaudited pro forma condensed consolidated balance sheet is not
necessarily indicative of what the actual financial position of the Operating
Partnership would have been at September 30, 1997, nor does it purport to
represent the future financial position of the Operating Partnership.
The unaudited pro forma condensed consolidated balance sheet should be read in
conjunction with the unaudited pro forma condensed consolidated statements of
operations of the Operating Partnership included herein, the consolidated
financial statements and accompanying notes thereto of the Operating Partnership
included in its Form 10/A dated and filed with the Commission on October 1, 1997
for the year ended December 31, 1996, and the unaudited condensed consolidated
financial statements and accompanying notes thereto of the Operating Partnership
included in its September 30, 1997 Quarterly Report on Form 10-Q.
<PAGE>
Weeks Realty, L.P.
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Operating Partnership Pro Forma
Historical/(a)/ Adjustments/(b)/ Pro Forma
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Land $ 98,279 $ 5,986 $ 104,265
Buildings and improvements 578,722 37,372 616,094
Accumulated depreciation (56,639) -- (56,639)
- ---------------------------------------------------------------------------------------------------------------------------
Operating real estate assets 620,362 43,358 663,720
Developments in progress 72,415 -- 72,415
Land held for future development 9,833 -- 9,833
- ---------------------------------------------------------------------------------------------------------------------------
Net real estate assets 702,610 43,358 745,968
Real estate loans 24,619 -- 24,619
Cash and cash equivalents 476 -- 476
Direct financing lease 6,387 -- 6,387
Receivables 5,032 -- 5,032
Deferred costs, net 12,530 -- 12,530
Investments in and notes receivable
from unconsolidated subsidiaries 8,876 -- 8,876
Other assets 2,600 -- 2,600
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets $ 763,130 $ 43,358 $ 806,488
===========================================================================================================================
Liabilities and Partners' Capital
Mortgage notes payable $ 190,687 $ -- $ 190,687
Bank credit facility borrowings 150,098 28,423/(b)/ 178,521
Accounts payable
and accrued expenses 18,301 -- 18,301
Other liabilities 4,127 -- 4,127
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities 363,213 28,423 391,636
- ---------------------------------------------------------------------------------------------------------------------------
Other limited partners' capital interests,
at redemption value 168,381 15,717/(b)(c)/ 184,098
Partners' capital 231,536 (782)/(c)/ 230,754
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Partners' Capital $ 763,130 $ 43,358 $ 806,488
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Weeks Realty, L.P.
Notes and Assumptions to Unaudited Pro Forma
Condensed Consolidated Balance Sheet
(a) Represents the Operating Partnership's unaudited condensed consolidated
balance sheet contained in the Operating Partnership's Quarterly Report
on Form 10-Q for the quarterly period ended September 30, 1997.
(b) Represents the aggregate purchase price, including closing costs, of
approximately $43.4 million for the four properties acquired from
Lichtin and the two properties acquired from NWI subsequent to
September 30, 1997 (see Note 1 to the combined statements of revenue
and certain expenses included herein as Exhibits A and B). The
aggregate acquisition consideration for these six properties consisted
of the assumption and repayment of other indebtedness and the payment
of cash through the Operating Partnership's revolving credit facility
of approximately $28.4 million, and units of limited partnership
interest in the Operating Partnership valued at $15.0 million.
(c) Includes the adjustment of $782,000 to state the other limited
partners' capital interests at their redemption value of $32.75 per
unit as of September 30, 1997.
