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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-24920
ERP OPERATING LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
ILLINOIS 36-3894853
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuantto Section 12(b) of the Act:
7.57% Notes due August 15, 2026 New York Stock Exchange
(Title of Class) (Name of Each Exchange on Which Registered)
Securities registered pursuantto Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
-------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
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DOCUMENTS INCORPORATED BY REFERENCE
None.
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ERP OPERATING LIMITED PARTNERSHIP
TABLE OF CONTENTS
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PART I. PAGE
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Item 1. Business 4
Item 2. The Properties 19
Item 3. Legal Proceedings 24
Item 4. Submission of Matters to a Vote of Security Holders 24
PART II.
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters 25
Item 6. Selected Financial Data 25
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations 28
Item 7A. Quantitative and Qualitative Disclosure About Market Risk 40
Item 8. Financial Statements and Supplementary Data 41
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 41
PART III.
Item 10. Trustees and Executive Officers of the Registrant 42
Item 11. Executive Compensation 46
Item 12. Security Ownership of Certain Beneficial Owners and Management 46
Item 13. Certain Relationships and Related Transactions 48
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 51
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PART I
ITEM 1. BUSINESS
GENERAL
ERP Operating Limited Partnership, an Illinois limited partnership
formed in May 1993 (the "Operating Partnership"), is managed and controlled
by Equity Residential Properties Trust ("EQR"), a Maryland real estate
investment trust, its general partner. EQR is a self-administered and
self-managed equity real estate investment trust ("REIT"). EQR was organized
in March 1993 and commenced operations on August 18, 1993 upon completion of
its initial public offering (the "EQR IPO") of 13,225,000 common shares of
beneficial interest, $0.01 par value per share ("Common Shares"). EQR was
formed to continue the multifamily residential business objectives and
acquisition strategies of certain affiliated entities controlled by Mr.
Samuel Zell, Chairman of the Board of Trustees of EQR. These entities had
been engaged in the acquisition, ownership and operation of multifamily
residential properties since 1969. As used herein, the term "Company"
includes EQR and those entities owned or controlled by it, as the survivor of
the mergers between EQR and each of Wellsford Residential Property Trust
("Wellsford") (the "Wellsford Merger"), Evans Withycombe Residential, Inc.
("EWR") (the "EWR Merger"), Merry Land & Investment Company, Inc. ("MRY")
(the "MRY Merger") and Lexford Residential Trust ("LFT") ("the LFT Merger")
(collectively, the "Mergers").
The Operating Partnership has formed a series of partnerships (the
"Financing Partnerships") which beneficially own certain Properties (see
definition below) that may be encumbered by mortgage indebtedness. In general,
these are structured so that the Operating Partnership, owns a 1% limited
partner interest and a 98% general partner interest in each, with the remaining
1% general partner interest in each Financing Partnership owned by various
qualified REIT subsidiaries wholly owned by EQR (each a "QRS Corporation").
Rental income from the Properties that are beneficially owned by a Financing
Partnership is used first to service the applicable mortgage debt and pay other
operating expenses and any excess is then distributed 1% to the applicable QRS
Corporation, as the general partner of such Financing Partnership, and 99% to
the Operating Partnership, as the sole 1% limited partner and as the 98% general
partner. The Operating Partnership has also formed a series of limited liability
companies that own certain Properties (collectively, the "LLCs"). The Operating
Partnership is a 99% managing member of each LLC and a QRS Corporation is a 1%
member of each LLC.
The Operating Partnership's subsidiaries include a series of management
limited partnerships and companies (collectively, the "Management Partnerships"
or the "Management Companies"), the Financing Partnerships, the LLCs and certain
other entities.
As of December 31, 1999, the Operating Partnership owned or had interests
in 1,062 multifamily properties containing 225,708 units, of which it
wholly-owned a portfolio of 983 multifamily properties (individually, a
"Property" and collectively, the "Properties") containing 214,060 units. The
remaining 79 properties represent investments in partnership interests and/or
subordinated mortgages containing 11,648 units. The Operating Partnership's
Properties are located in 35 states throughout the United States. EQR is,
together with the Operating Partnership, one of the largest publicly traded
REITs (based on the aggregate market value of EQR's outstanding Common Shares)
and is the largest publicly traded REIT owner of multifamily properties (based
on the number of apartment units wholly-owned and total revenues earned).
Since the EQR IPO and through December 31, 1999, the Operating Partnership
has acquired direct interests in 988 properties containing 209,975 units in the
aggregate for a total purchase price of approximately $12 billion, including the
assumption of approximately $3.2 billion of mortgage indebtedness and $848.2
million of unsecured notes. Since the EQR IPO and through December 31, 1999, the
Operating Partnership has disposed of 74 properties, containing 17,640 units for
a total sales price of approximately $654.2 million.
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The Company's corporate headquarters and executive offices are located in
Chicago, Illinois. In addition, the Operating Partnership has 31 management
offices in the following cities:
- Scottsdale and Tucson, Arizona;
- Irvine, Sacramento and San Francisco, California;
- Denver, Colorado;
- Tampa, Jacksonville, Ft. Lauderdale and Orlando, Florida;
- Atlanta and Augusta, Georgia;
- Chicago, Illinois;
- Kansas City, Kansas;
- Louisville, Kentucky;
- Bethesda, Maryland;
- Ypsilanti, Michigan;
- Minneapolis, Minnesota;
- Las Vegas, Nevada;
- Charlotte and Raleigh, North Carolina;
- Reynoldsburg, Ohio
- Tulsa, Oklahoma;
- Portland, Oregon;
- Nashville and Memphis, Tennessee.
- Dallas, Houston and San Antonio, Texas; and
- Seattle and Redmond, Washington
The Operating Partnership has approximately 6,700 employees. An on-site
manager, who supervises the on-site employees and is responsible for the
day-to-day operations of the Property, directs each of the Operating
Partnership's Properties. A leasing administrator and/or property administrator
generally assists the manager. In addition, a maintenance director at each
Property supervises a maintenance staff whose responsibilities include a variety
of tasks, including responding to service requests, preparing vacant apartments
for the next resident and performing preventive maintenance procedures
year-round.
BUSINESS OBJECTIVES AND OPERATING STRATEGIES
The Operating Partnership seeks to maximize both current income and
long-term growth in income, thereby increasing:
- the value of the Properties;
- distributions on a per limited partnership interest ("OP Unit")
basis;and
- partners' value.
The Operating Partnership's strategies for accomplishing these objectives
are:
- maintaining and increasing Property occupancy while increasing rental
rates;
- controlling expenses, providing regular preventive maintenance, making
periodic renovations and enhancing amenities;
- maintaining a ratio of consolidated debt-to-total market
capitalization of less than 50%
- strategically acquiring and disposing of properties; and
- purchasing newly developed, as well as co-investing in the development
of, multifamily communities.
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PART I
The Operating Partnership is committed to tenant satisfaction by striving
to anticipate industry trends and implementing strategies and policies
consistent with providing quality tenant services. In addition, the Operating
Partnership continuously surveys rental rates of competing properties and
conducts satisfaction surveys of residents to determine the factors they
consider most important in choosing a particular apartment unit.
ACQUISITION STRATEGIES
The Operating Partnership anticipates that future property acquisitions
will be located in the continental United States. Management will continue to
use market information to evaluate acquisition opportunities. The Operating
Partnership's market database allows it to review the primary economic
indicators of the markets where the Operating Partnership currently manages
Properties and where it expects to expand its operations. Acquisitions may be
financed from various sources of capital, which may include retained cash flow,
issuance of additional equity securities by EQR and debt securities by the
Operating Partnership, sales of Properties and collateralized and
uncollateralized borrowings. In addition, the Operating Partnership may acquire
additional multifamily properties in transactions that include the issuance of
OP Units as consideration for the acquired properties. Such transactions may, in
certain circumstances, partially defer the sellers' tax consequences.
When evaluating potential acquisitions, the Operating Partnership will consider:
- the geographic area and type of community;
- the location, construction quality, condition and design of the
property;
- the current and projected cash flow of the property and the ability to
increase cash flow;
- the potential for capital appreciation of the property;
- the terms of resident leases, including the potential for rent
increases;
- the potential for economic growth and the tax and regulatory
environment of the community in which the property is located;
- the occupancy and demand by residents for properties of a similar type
in the vicinity (the overall market and submarket);
- the prospects for liquidity through sale, financing or refinancing of
the property;
- the benefits of integration into existing operations; and
- competition from existing multifamily properties and the potential for
the construction of new multifamily properties in the area.
The Operating Partnership expects to purchase multifamily properties with
physical and market characteristics similar to the Properties.
DEVELOPMENT STRATEGIES
The Operating Partnership seeks to acquire newly constructed properties and
make investments towards the development of properties in markets where it
discerns strong demand, which the Operating Partnership believes will enable it
to achieve superior rates of return. The Operating Partnership's current
communities under development and future developments are in markets or will be
in markets where certain market demographics justify the development of high
quality multifamily communities. In evaluating whether to develop an apartment
community in a particular location, the Operating Partnership analyzes relevant
demographic, economic and financial data. Specifically, the Operating
Partnership considers the following factors, among others, in determining the
viability of a potential new apartment community:
- income levels and employment growth trends in the relevant market;
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- uniqueness of location;
- household growth and net migration of the relevant market's
population;
- supply/demand ratio, competitive housing alternatives, sub-market
occupancy and rent levels;
- barriers to entry that would limit competition; and
- purchase prices and yields of available existing stabilized
communities, if any.
DISPOSITION STRATEGIES
Management will use market information to evaluate dispositions. Factors
the Operating Partnership considers in deciding whether to dispose of its
Properties include the following:
- potential increases in new construction;
- areas where the economy is expected to decline substantially; and
- markets where the Operating Partnership does not intend to establish
long-term concentrations.
The Operating Partnership will reinvest the proceeds received from property
dispositions primarily to fund property acquisitions as well as fund development
activities. In addition, when feasible the Operating Partnership may structure
these transactions as tax deferred exchanges.
FINANCING STRATEGIES
It is the Company's policy that EQR shall not incur indebtedness other than
short-term trade, employee compensation, dividends payable or similar
indebtedness that will be paid in the ordinary course of business, and that
indebtedness shall instead be incurred by the Operating Partnership to the
extent necessary to fund the business activities conducted by the Operating
Partnership and its subsidiaries.
EQUITY OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
During 1997, EQR issued 84,183 Common Shares pursuant to the Employee Share
Purchase Plan at net prices which ranged from $35.63 per share to $42.08 per
share and contributed to the Operating Partnership proceeds in the amount of
approximately $3.2 million in connection therewith in exchange for OP Units.
In March 1997, EQR completed three separate public offerings relating to an
aggregate of 1,921,000 publicly registered Common Shares, which were sold to the
public at a price of $46 per share. EQR contributed to the Operating Partnership
net proceeds of approximately $88.3 million in exchange for OP Units.
In May 1997, EQR sold 7,000,000 depositary shares (the "Series D Depositary
Shares"). Each Series D Depositary Share represents a 1/10 fractional interest
in a 8.60% Series D Cumulative Redeemable Preferred Share of Beneficial
Interest, $0.01 par value per share (the "Series D Preferred Shares"). The
liquidation preference of each of the Series D Preferred shares is $250.00
(equivalent to $25 per Series D Depositary Share). EQR raised gross proceeds of
approximately $175 million from this offering (the "Series D Preferred Share
Offering"). The net proceeds of approximately $169.5 million from the Series D
Preferred Share Offering were contributed by EQR to the Operating Partnership in
exchange for 700,000 of the Operating Partnership's 8.60% cumulative redeemable
preference units (the "Series D Cumulative Redeemable Preference Units").
In June 1997, EQR completed five separate public offerings comprising an
aggregate of 8,992,023 publicly registered Common Shares, which were sold to the
public at prices ranging from $44.06 to $45.88
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per share. EQR contributed to the Operating Partnership net proceeds of
approximately $398.9 million therewith in exchange for additional OP Units.
In September 1997, EQR completed the sale of 498,000 publicly registered
Common Shares, which were sold to the public at a price of $51.125 per share.
EQR contributed to the Operating Partnership net proceeds of approximately $24.2
million in connection with this offering in exchange for OP Units.
In September 1997, EQR sold 11,000,000 depositary shares (the "Series G
Depositary Shares"). Each Series G Depositary Share represents a 1/10 fractional
interest in a 7 1/4% Series G Convertible Cumulative Preferred Share of
Beneficial Interest, $0.01 par value per share (the "Series G Preferred
Shares"). Series G Depositary Shares representing Series G Preferred Shares are
convertible at the option of the holder thereof at any time into Common Shares
at a conversion price of $58.58 per Common Share (equivalent to a conversion
rate of approximately .4268 Common Shares for each Series G Depositary Share).
The liquidation preference of each of the Series G Preferred Shares is $250.00
per share (equivalent to $25 per Series G Depositary Share). In addition, in
October 1997, EQR sold 1,650,000 additional Series G Depositary Shares pursuant
to an over-allotment option granted to the underwriters. EQR contributed to the
Operating Partnership the net proceeds of approximately $303.6 million in
connection with this offering (the "Series G Preferred Share Offering") in
exchange for 1,265,000 of the Operating Partnership's 7 1/4% convertible
cumulative preference units (the "Series G Convertible Cumulative Preference
Units").
In October 1997, in connection with the acquisition of a portfolio of
Properties, EQR issued 3,315,500 publicly registered Common Shares, which were
issued at a price of $45.25 per share with a value of approximately $150
million. EQR contributed its interest in the portfolio of Properties acquired
with Common Shares to the Operating Partnership in exchange for additional OP
Units.
On November 3, 1997, EQR filed with the SEC a Form S-3 Registration
Statement to register 7,000,000 Common Shares pursuant to a Distribution
Reinvestment and Share Purchase Plan. This registration statement was
declared effective on November 25, 1997. The Distribution Reinvestment and
Share Purchase Plan (the "DRIP Plan") of EQR provides holders of record and
beneficial owners of Common Shares, Preferred Shares, and limited partnership
interests in the Operating Partnership with a simple and convenient method of
investing cash distributions in additional Common Shares (which is referred
to herein as the "Dividend Reinvestment - DRIP Plan"). Common Shares may also
be purchased on a monthly basis with optional cash payments made by
participants in the Plan and interested new investors, not currently
shareholders of EQR, at the market price of the Common Shares less a discount
ranging between 0% and 5%, as determined in accordance with the DRIP Plan
(which is referred to herein as the "Share Purchase - DRIP Plan"). The
proceeds from sales were contributed to the Operating Partnership in exchange
for OP Units.
In December 1997, in connection with an acquisition of a Property, EQR
issued 736,296 publicly registered Common Shares, which were issued at a price
of $48.85 per share with a value of approximately $36 million. EQR contributed
the Property acquired with Common Shares to the Operating Partnership in
exchange for additional OP Units.
Also in December 1997, EQR completed the sale of 467,722 publicly
registered Common Shares, which were sold at a price of $51.3125 per share. EQR
contributed to the Operating Partnership net proceeds of approximately $22.8
million in connection with this offering in exchange for additional OP Units.
During 1998, EQR issued 93,521 Common Shares pursuant to the Employee Share
Purchase Plan. EQR contributed to the Operating Partnership net proceeds of
approximately $3.7 million in exchange for OP Units.
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During 1998, EQR issued 1,023,184 Common Shares pursuant to the Share
Purchase - DRIP Plan. EQR contributed to the Operating Partnership net proceeds
of approximately $50.7 million in exchange for OP Units.
During 1998, EQR issued 10,230 Common Shares pursuant to the Dividend
Reinvestment - DRIP Plan. EQR contributed to the Operating Partnership net
proceeds of approximately $0.4 million in exchange for OP Units.
On January 27, 1998, EQR completed an offering of 4,000,000 publicly
registered Common Shares, which were sold to the public at a price of $50.4375
per share. EQR contributed to the Operating Partnership net proceeds of
approximately $195.3 million in exchange for OP Units.
On February 3, 1998, EQR filed with the SEC a Form S-3 Registration
Statement to register $1 billion of equity securities. The SEC declared this
registration statement effective on February 27, 1998. In addition, EQR carried
over $272 million related to the registration statement effective on August 4,
1997. As of December 31, 1999, $1.1 billion remained outstanding under this
registration statement.
On February 18, 1998, EQR completed two offerings of 988,340 publicly
registered Common Shares, which were sold to the public at a price of $50.625
per share. On February 23, 1998, EQR completed an offering of 1,000,000 publicly
registered Common Shares, which were sold to the public at a price of $48 per
share. EQR contributed to the Operating Partnership net proceeds from these
offerings of approximately $95 million in exchange for OP Units.
On March 30, 1998, EQR completed an offering of 495,663 publicly registered
Common Shares, which were sold at a price of $47.9156 per share. EQR contributed
to the Operating Partnership net proceeds of approximately $23.7 million in
exchange for OP Units.
On April 29, 1998, EQR completed an offering of 946,565 publicly registered
Common Shares, which were sold at a price of $46.5459 per share. EQR contributed
to the Operating Partnership net proceeds of approximately $44.1 million in
exchange for OP Units.
On September 20, 1998, EQR completed its repurchase of 2,367,400 of its
Common Shares of beneficial interest, on the open market, for an average price
of $40 per share. The purchases were made between August 5 and September 17,
1998. The Operating Partnership paid approximately $94.7 million in exchange for
OP Units. These shares and OP Units were subsequently retired.
In connection with the acquisition of one Property on December 22, 1998,
the Operating Partnership issued 48,328 Series A Junior Convertible Preference
Units to certain sellers of these Properties. The Junior Convertible Preference
Units have a stated value of $100 and entitle the holders thereof to
preferential distributions from the Operating Partnership (other than
liquidating distributions) before distributions to the holders of the OP Units
and EQR (provided EQR shall be entitled to receive distributions necessary to
maintain its REIT status under U.S. tax laws).
During 1999, EQR issued 147,885 Common Shares pursuant to the Employee
Share Purchase Plan. EQR contributed to the Operating Partnership net proceeds
of approximately $5.2 million in exchange for OP Units.
During 1999, EQR issued 22,534 Common Shares pursuant to the Share Purchase
- - DRIP Plan. EQR contributed to the Operating Partnership net proceeds of
approximately $1.0 million in exchange for OP Units.
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During 1999, EQR issued 36,132 Common Shares pursuant to the Dividend
Reinvestment - DRIP Plan. EQR contributed to the Operating Partnership net
proceeds of approximately $1.5 million in exchange for OP Units.
In connection with the acquisition of two Properties on June 29, 1999, the
Operating Partnership issued 28,795 Series A Junior Convertible Preference Units
to certain sellers of these Properties. The Junior Convertible Preference Units
have a stated value of $100 and entitle the holders thereof to preferential
distributions from the Operating Partnership (other than liquidating
distributions) before distributions to the holders of the OP Units and EQR
(provided EQR shall be entitled to receive distributions necessary to maintain
its REIT status under U.S. tax laws).
In connection with the acquisition of one Property on July 29, 1999, the
Operating Partnership issued 7,367 Series B Junior Convertible Preference Units
to certain sellers of these Properties. The Junior Convertible Preference Units
have a stated value of $25 and entitle the holders thereof to preferential
distributions from the Operating Partnership (other than liquidating
distributions) before distributions to the holders of the OP Units and EQR
(provided EQR shall be entitled to receive distributions necessary to maintain
its REIT status under U.S. tax laws).
On September 27, 1999, EQR-Mosaic, L.L.C., a subsidiary of the
Operating Partnership, issued 800,000 units of 8.00% Series A Cumulative
Convertible Redeemable Preference Interests (also referred to as the "Preference
Interests") with an equity value of $40 million. EQR-Mosaic, L.L.C. received $39
million in net proceeds from this transaction. The liquidation value of these
units is $50 per unit. The 800,000 units are exchangeable into 800,000 shares of
8.00% Series M Cumulative Redeemable Preferred Shares of Beneficial Interest of
EQR. The Series M Preferred Shares are not convertible to EQR Common Shares.
Dividends for the Series A Preference Interests or the Series M Preferred Shares
are payable quarterly at the rate of $4.00 per unit/share per year.
On October 12, 1999, EQR repurchased and retired 148,453 Common Shares
previously issued in connection with the LFT Merger. These Common Shares were
owned by various LFT employees and trustees. The Operating Partnership paid
approximately $6.3 million in exchange for OP Units.
DEBT OFFERINGS FOR THE YEARS ENDED DECEMBER 31, 1997, 1998 AND 1999
In October 1997, the Operating Partnership issued $150 million of unsecured
fixed rate notes (the "2017 Notes") in a public debt offering. The 2017 Notes
are due on October 15, 2017 and bear interest at 7.125%, which is payable
semiannually in arrears on April 15 and October 15, commencing April 15, 1998.
The 2017 Notes are redeemable at any time by the Operating Partnership pursuant
to the terms thereof. The Operating Partnership received net proceeds of
approximately $147.4 million in connection with this issuance.
In November 1997, the Operating Partnership issued $200 million of
unsecured fixed rate notes in a public debt offering. Of the $200 million
issued, $150 million of these notes are due November 15, 2001 (the "2001 Notes")
and bear interest at a rate of 6.55%, which is payable semiannually in arrears
on May 15 and November 15, commencing on May 15, 1998. The remaining $50 million
of these notes are due November 15, 2003 (the "2003 Notes") and bear interest at
a rate of 6.65%, which is payable semiannually in arrears on May 15 and November
15, commencing on May 15, 1998. The Operating Partnership received net proceeds
of approximately $198.5 million in connection with the 2001 Notes and the 2003
Notes.
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998. As of
December 31, 1999, $430 million remained outstanding under this registration
statement.
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In April 1998, the Operating Partnership issued $300 million of unsecured
fixed rate notes (the "2015 Notes") in a public debt offering. The 2015 Notes
were issued at a discount, which is being amortized over the life of the notes
on a straight-line basis. The 2015 Notes are due April 13, 2015. The annual
interest rate on the 2015 Notes to April 13, 2005 (the "Remarketing Date") is
6.63%, which is payable semi-annually in arrears on October 13 and April 13,
commencing October 13, 1998. The 2015 Notes are subject to mandatory tender to
the remarketing agent on the Remarketing Date, at the election of the
remarketing dealer and subject to certain limitations. If the remarketing
dealer, initially Salomon Brothers Inc., does not purchase all tendered 2015
Notes on the Remarketing Date, or in certain other limited circumstances, the
Operating Partnership will be required to repurchase the 2015 Notes at 100% of
their principal amount plus accrued interest. If the 2015 Notes are remarketed,
the 2015 Notes will bear interest at the rate determined by the remarketing
dealer on and after the Remarketing Date. The Operating Partnership received net
proceeds of approximately $298.1 million in connection with this issuance. The
Operating Partnership also received approximately $8.1 million from the sale of
the option to remarket the 2015 Notes on the Remarketing Date, which is being
amortized over the term of the 2015 Notes. Prior to the issuance of the 2015
Notes, the Operating Partnership entered into an interest rate protection
agreement to effectively fix the interest rate cost of such issuance at the
Remarketing Date. The Operating Partnership received a one-time settlement
payment from this transaction, which was approximately $0.6 million and is being
amortized over seven years.
In August 1998, the Operating Partnership issued $100 million of Remarketed
Reset Notes (the "August 2003 Notes") in a public debt offering. The August 2003
Notes were issued at a discount, which is being amortized over the life of the
notes on a straight-line basis. The August 2003 Notes are due August 21, 2003.
During the period from and including August 21, 1998 to but excluding August 23,
1999 (the "Initial Spread Period") the interest rate on the August 2003 Notes
was LIBOR plus 0.45%. The current interest rate for the period from August 23,
1999 to August 22, 2000 is LIBOR plus 0.75%. Beginning August 23, 1999, the
Operating Partnership is entitled to redeem the August 2003 Notes on certain
dates and in certain circumstances. The Operating Partnership received net
proceeds of approximately $99.7 million in connection with this issuance.
In September 1998, the Operating Partnership issued $145 million of
unsecured fixed rate notes (the "2000 Notes") in a public debt offering. The
2000 Notes were issued at a discount, which is being amortized over the life of
the notes on a straight-line basis. The 2000 Notes are due September 15, 2000.
The annual interest rate on the 2000 Notes is 6.15%, which is payable
semi-annually in arrears on March 15 and September 15, commencing March 15,
1999. The Operating Partnership received net proceeds of approximately $144.5
million in connection with this issuance.
In June 1999, the Operating Partnership issued $300 million of redeemable
unsecured fixed rate notes (the "June 2004 Notes") in connection with the Debt
Shelf Registration in a public debt offering. The June 2004 Notes were issued at
a discount, which is being amortized over the life of the notes on a
straight-line basis. The June 2004 Notes are due June 23, 2004. The annual
interest rate on the June 2004 Notes is 7.10%, which is payable semiannually in
arrears on December 23 and June 23, commencing December 23, 1999. The Operating
Partnership received net proceeds of approximately $298.0 million in connection
with this issuance.
CREDIT FACILITY
On August 12, 1999 the Operating Partnership obtained a new three year $700
million unsecured revolving credit facility, with Bank of America Securities LLC
and Chase Securities Inc. acting as joint lead arrangers. The new line of credit
replaced the Operating Partnership's $500 million unsecured revolving credit
facility, as well as the $120 million unsecured revolving credit facility which
the Operating Partnership assumed in the MRY Merger. The prior existing
revolving credit facilities were repaid in full
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and terminated upon the closing of the new facility. This new credit facility
matures in August 2002 and will be used to fund property acquisitions, costs for
certain Properties under development and short term liquidity requirements.
Advances under the credit facility bear interest at variable rates based upon
LIBOR available at various interest periods, plus a certain spread dependent
upon the Operating Partnership's credit rating. As of March 20, 2000, there were
no amounts outstanding under this new facility.
BUSINESS COMBINATIONS
On May 30, 1997, the Company completed the acquisition of the multifamily
property business of Wellsford through the Wellsford Merger. The transaction was
valued at approximately $1 billion and included 72 Properties of Wellsford
containing 19,004 units, which were contributed to the Operating Partnership.
The purchase price consisted of:
- 10.8 million Common Shares issued by EQR with a market value, at the
date of closing, of $443.7 million. Upon contribution of the net
assets by EQR to the Operating Partnership, the Operating Partnership
issued 10.8 million OP Units to EQR;
- liquidation value of $157.5 million for the following:
a) Wellsford Series A Cumulative Convertible Preferred Shares of
Beneficial Interest;
b) Wellsford Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $345 million;
- assumption of other liabilities of approximately $33.5 million; and
- other merger related costs of approximately $23.4 million.
In the Wellsford Merger, each outstanding common share of beneficial
interest of Wellsford was converted into .625 of a Common Share. In addition,
Wellsford Series A Cumulative Convertible Preferred Shares of Beneficial
Interest were redesignated as EQR's 3,999,800 Series E Cumulative Convertible
Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series
E Preferred Shares") and Wellsford's Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest were redesignated as EQR's 2,300,000 9.65% Series
F Cumulative Redeemable Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series F Preferred Shares").
On December 23, 1997, EQR completed the acquisition of the multifamily
property business of EWR through the EWR Merger. The transaction was valued at
approximately $1.2 billion and included 53 Properties of EWR containing 15,331
units and three Properties under construction or expansion containing 953 units,
which were contributed to the Operating Partnership. The purchase price
consisted of:
- 10.3 million Common Shares issued by EQR with a market value, at the
date of closing, of approximately $501.6 million. Upon contribution of
the net assets by EQR to the Operating Partnership, the Operating
Partnership issued 10.3 million OP Units to EQR;
- issuance of approximately 2.2 million Operating Partnership OP Units,
in exchange for approximately 4.4 million EWR Operating Partnership OP
units at a market value of approximately $107.3 million;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $498 million;
- assumption of other liabilities of approximately $28.2 million; and
- other merger related costs of approximately $16.7 million.
In the EWR Merger, each outstanding common share of beneficial interest of
EWR was converted into .50 of a Common Share.
12
<PAGE>
On October 19, 1998, the Company completed the acquisition of the
multifamily property business of MRY through the MRY Merger. The transaction was
valued at approximately $2.2 billion and included 108 Properties containing
32,315 units, three Properties under construction and/or expansion anticipated
to contain 872 units and six Additional Properties containing 1,297 units that
were contributed to six joint ventures. The purchase price consisted of:
- 21.8 million Common Shares issued by EQR with a market value, at the
date of closing, of approximately $1 billion. Upon contribution of the
net assets by EQR to the Operating Partnership, the Operating
Partnership issued 21.8 million OP Units to EQR;
- issuance of approximately 0.9 million Operating Partnership OP Units,
in exchange for approximately 1.6 million MRY DownREIT I LP units at a
market value of approximately $40.2 million;
- liquidation value of $369.1 million for the following:
a) MRY Series A Cumulative Convertible Preferred Shares of
Beneficial Interest;
b) MRY Series B Cumulative Convertible Preferred Shares of
Beneficial Interest;
c) MRY Series C Cumulative Convertible Preferred Shares of
Beneficial Interest;
d) MRY Series D Cumulative Redeemable Preferred Shares of Beneficial
Interest;
e) MRY Series E Cumulative Redeemable Preferred Shares of Beneficial
Interest;
- assumption of mortgage indebtedness, unsecured notes and a line of
credit in the amount of $723.5 million;
- assumption of other liabilities of approximately $46.5 million; and
- other merger related costs of approximately $51.9 million.
In the MRY Merger, each outstanding common share of beneficial interest of
MRY was converted into .53 of a Common Share. In addition, MRY spun-off certain
assets and liabilities to Merry Land Properties, Inc. ("MRYP Spinco"). In
connection with this spin-off, each holder of MRY common shares received one
share of MRYP Spinco for each twenty shares of MRY common held. As partial
consideration for the transfer, the Operating Partnership extended a $25
million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt
Agreement. As additional consideration, the Operating Partnership extended an
additional $20 million of indebtedness to MRYP Spinco under a 15-year,
Subordinated Debt Agreement, bearing interest payable quarterly. The Operating
Partnership also entered into the Preferred Stock Agreement and received 5,000
shares of MRYP Spinco Preferred Stock with a liquidation preference of $1,000
per share. In June 1999, MRYP Spinco repaid the entire outstanding Senior Note
balance of $18.3 million and the Subordinated Debt Agreement balance of $20.0
million and repurchased all 5,000 shares of the preferred stock for $2.7
million. There is no further obligation by either party in connection with these
agreements.
In addition, MRY Series A Cumulative Convertible Preferred Shares of
Beneficial Interest were redesignated as EQR's 164,951 Series H Cumulative
Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series H Preferred Shares"), the MRY Series B Cumulative Convertible
Preferred Shares of Beneficial were redesignated as EQR's 4,000,000 Series I
Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value
per share (the "Series I Preferred Shares"), the MRY Series C Cumulative
Convertible Preferred Shares of Beneficial Interest were redesignated as EQR's
4,599,400 Series J Cumulative Convertible Preferred Shares of Beneficial
Interest, $0.01 par value per share (the "Series J Preferred Shares"), the MRY
Series D Cumulative Redeemable Preferred Shares of Beneficial Interest were
redesignated as EQR's 1,000,000 Series K Cumulative Redeemable Preferred Shares
of Beneficial Interest, $0.01 par value per share (the "Series K Preferred
Shares") and the MRY Series E Cumulative Redeemable Preferred Shares of
Beneficial Interest were redesignated as EQR's 4,000,000 Series L Cumulative
Redeemable Preferred Shares of Beneficial Interest,
13
<PAGE>
$0.01 par value per share (the "Series L Preferred Shares"). The Operating
Partnership issued to EQR Preference Units with identical terms to the above.
During 1999, all of the Series I Preferred Shares were converted into
2,566,797 Common Shares, and, as a result, all of the Series I Preference
Units were converted into 2,566,797 OP Units.
On August 23, 1999, the Operating Partnership sold its entire interest in
the six joint venture properties to MRYP Spinco and received $54.1 million.
There is no further obligation to either party in connection with the joint
venture agreements.
On October 1, 1999, the Company completed the acquisition of the
multifamily property business of LFT through the LFT Merger. The transaction was
valued at approximately $738 million and included 402 Properties of LFT
containing 36,609 units. The purchase price consisted of:
- 4.0 million Common Shares issued by EQR with a market value, at the
date of closing, of approximately $181.1 million. Upon contribution of
the net assets by EQR to the Operating Partnership, the Operating
Partnership issued 4.0 million OP Units to EQR;
- assumption of mortgage indebtedness and unsecured notes in the amount
of $528.3 million;
- acquisition of other assets of approximately $40.9 million and
assumption of other liabilities of approximately $25.3 million; and
- other merger related costs of approximately $24.5 million.
In the LFT Merger, each outstanding common share of beneficial interest of
LFT was converted into .463 of a Common Share.
RECENT TRANSACTIONS
On January 14, 2000, the Company entered into an agreement to acquire, in
an all cash and debt transaction, Globe Business Resources, Inc. ("Globe"), one
of the nation's largest providers of temporary corporate housing and furniture
rental. The shareholders of Globe will receive $13.00 per share upon closing and
up to an additional $0.50 per share post closing, upon final determination of
costs, if any, relating to any potential breaches of certain representations and
covenants. At full funding of $13.50 per share, the Company would pay
approximately $64.8 million in cash for Globe. In addition, the Operating
Partnership will assume approximately $69.4 million in debt. The acquisition,
which is expected to close during the second quarter of 2000, requires Globe
shareholder approval.
From January 1, 2000 through March 3, 2000, the Operating Partnership
acquired Windmont Apartments, a 178-unit property located in Atlanta, GA from an
unaffiliated party for a total purchase price of approximately $10.3 million.
From January 1, 2000 through March 3, 2000, the Operating Partnership
disposed of six Properties for a total sales price of $46.7 million.
On March 3, 2000, Lexford Properties, L.P., a subsidiary of
the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative
Convertible Redeemable Preference Units with an equity value of $55.0 million.
Lexford Properties, L.P. received $53.6 million in net proceeds from this
transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of EQR. The Series
M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the
Series B Preference Units or the Series M-1 Preferred Shares are payable
quarterly at the rate of $4.25 per unit/share per year. The net proceeds
received from this transaction will be used for scheduled mortgage and line of
credit repayments.
14
<PAGE>
On March 20, 2000, the Operating Partnership obtained new mortgage
financing on eleven previously unencumbered properties in the amount of $148.3
million. The net proceeds received from this transaction will be used for
scheduled mortgage and line of credit repayments.
COMPETITION
All of the Properties are located in developed areas that include other
multifamily properties. The number of competitive multifamily properties in a
particular area could have a material effect on the Operating Partnership's
ability to lease units at the Properties or at any newly acquired properties and
on the rents charged. The Operating Partnership may be competing with other
entities that have greater resources than the Operating Partnership and whose
managers have more experience than the Operating Partnership's officers and
trustees. In addition, other forms of multifamily properties, including
multifamily properties and manufactured housing controlled by Mr. Zell, and
single-family housing, provide housing alternatives to potential residents of
multifamily properties.
RISK FACTORS
THE FOLLOWING RISK FACTORS OMIT THE USE OF DEFINED TERMS USED ELSEWHERE
HEREIN AND CONTAIN DEFINED TERMS THAT ARE DIFFERENT FROM THOSE USED IN THE OTHER
SECTIONS OF THIS REPORT. UNLESS OTHERWISE INDICATED, WHEN USED IN THIS SECTION,
THE TERMS "WE" AND "US" REFER TO ERP OPERATING LIMITED PARTNERSHIP, AN ILLINOIS
LIMITED PARTNERSHIP, WHICH IS MANAGED BY ITS GENERAL PARTNER EQUITY RESIDENTIAL
PROPERTIES TRUST, A MARYLAND REAL ESTATE INVESTMENT TRUST.
Set forth below are the risks that we believe are important to investors
who purchase or own our Units of limited partnership interest or debt
securities. In this section, we refer to the Units and debt securities together
as our "securities," and the investors who own Units and/or debt securities as
our "security holders."
DEBT FINANCING AND PREFERRED SHARES COULD ADVERSELY AFFECT OUR PERFORMANCE
GENERAL
As of December 31, 1999, certain of our multifamily properties were subject
to approximately $2.9 billion of mortgage indebtedness and our total debt
equaled approximately $5.5 billion. Of our total debt outstanding, $700.9
million (including the balance of $300 million outstanding on our $700 million
unsecured line of credit) was floating rate debt and $965.8 million was issued
at tax exempt rates. In addition to debt, Equity Residential Properties Trust,
our general partner, has issued preferred shares of beneficial interest and
depositary shares. The use of debt and preferred equity financing creates
certain risks, including the following.
SCHEDULED DEBT PAYMENTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION
In the future, our cash flow could be insufficient to pay distributions on
our securities at expected levels and to meet required payments of principal and
interest. We may not be able to refinance existing debt (which in virtually all
cases requires substantial principal payments at maturity) and, if we can, the
terms of such refinancing might not be as favorable as the terms of our existing
indebtedness. If principal payments due at maturity cannot be refinanced,
extended or paid with proceeds of other capital transactions, such as our
general partner raising new equity capital, our cash flow will not be sufficient
in all years to repay all maturing debt. As a result, we may be forced to
postpone capital expenditures necessary for the maintenance of our properties
and may have to dispose of one or more properties on terms that would otherwise
be unacceptable to us.
15
<PAGE>
FINANCIAL COVENANTS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION
If a property we own is mortgaged to secure payment of indebtedness and we
are unable to meet the mortgage payments, the holder of the mortgage could
foreclose on the property, resulting in loss of income and asset value.
Foreclosure on our mortgaged properties or an inability to refinance existing
indebtedness would likely have a negative impact on our financial condition and
results of operations. A foreclosure could also result in our recognition of
taxable income without our actually receiving cash proceeds from the disposition
of the property with which to pay the tax. This could adversely affect our cash
flow and could make it more difficult for us to service our debt and make
distributions to security holders.
The mortgages on our properties contain customary negative covenants that,
among other things, limit our ability, without the prior consent of the lender,
to further mortgage the property and to discontinue insurance coverage. In
addition, our credit facilities contain certain customary restrictions,
requirements and other limitations on our ability to incur indebtedness. The
indentures under which a substantial portion of our debt was issued contain
certain financial and operating covenants including, among other things,
maintenance of certain financial ratios, as well as limitations on our ability
to incur secured and unsecured indebtedness (including acquisition financing),
sell all or substantially all of our assets and engage in mergers,
consolidations and certain acquisitions. Accordingly, in the event that we are
unable to raise additional equity or borrow money because of these restrictions,
our ability to acquire additional properties may be limited. If we are unable to
acquire additional properties, our ability to increase the distributions to
security holders, as we have done in the past, will be limited to management's
ability to increase funds from operations, and thereby cash available for
distributions, from the existing properties in our portfolio at such time.
Some of our properties were financed with tax-exempt bonds that contain
certain restrictive covenants or deed restrictions. We have retained an
independent outside consultant to monitor compliance with the restrictive
covenants and deed restrictions that affect these properties. If these bond
compliance requirements require us to lower our rental rates to attract low or
moderate income tenants, or eligible/qualified tenants, then our income from
these properties may be limited.
OUR DEGREE OF LEVERAGE COULD LIMIT OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING
The debt to market capitalization ratio (total debt as a percentage of
total debt plus the market value of the outstanding common and preferred shares
of beneficial interest and Units) of our general partner and its subsidiaries
(including us) was approximately 42.75% as of December 31, 1999. We have a
policy of incurring indebtedness for borrowed money only if upon such incurrence
our debt to market capitalization ratio would be approximately 50% or less. Our
degree of leverage could have important consequences to security holders. For
example, the degree of leverage could affect our ability to obtain additional
financing in the future for working capital, capital expenditures, acquisitions,
development or other general corporate purposes, making us more vulnerable to a
downturn in business or the economy generally.
RISING INTEREST RATES COULD ADVERSELY AFFECT CASH FLOW
Advances under our credit facility bear interest at variable rates based
upon LIBOR available at various interest periods, plus a certain spread
dependent upon the Operating Partnership's credit rating. Certain of our senior
unsecured debt instruments also, from time to time, bear interest at floating
rates. We may also borrow additional money with variable interest rates in the
future. Increases in interest rates would increase our interest expenses under
these debt instruments and would increase the costs of refinancing existing
indebtedness and of issuing new debt. Accordingly, higher interest would
16
<PAGE>
adversely affect cash flow and our ability to service our debt and to make
distributions to security holders.
ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND CAN BE COSTLY
Federal, state and local laws and regulations relating to the protection of
the environment may require a current or previous owner or operator of real
estate to investigate and clean up hazardous or toxic substances or petroleum
product releases at such property. The owner or operator may have to pay a
governmental entity or third parties for property damage and for investigation
and clean-up costs incurred by such parties in connection with the
contamination. These laws typically impose clean-up responsibility and liability
without regard to whether the owner or operator knew of or caused the presence
of the contaminants. Even if more than one person may have been responsible for
the contamination each person covered by the environmental laws may be held
responsible for all of the clean-up costs incurred. In addition, third parties
may sue the owner or operator of a site for damages and costs resulting from
environmental contamination emanating from that site.
Environmental laws also govern the presence, maintenance and removal of
asbestos. These laws require that owners or operators of buildings containing
asbestos properly manage and maintain the asbestos, that they notify and train
those who may come into contact with asbestos and that they undertake special
precautions, including removal or other abatement, if asbestos would be
disturbed during renovation or demolition of a building. These laws may impose
fines and penalties on building owners or operators who fail to comply with
these requirements and may allow third parties to seek recovery from owners or
operators for personal injury associated with exposure to asbestos fibers.
Substantially all of our properties have been the subject of environmental
assessments completed by qualified independent environmental consultant
companies. These environmental assessments have not revealed, nor are we aware
of, any environmental liability that our management believes would have a
material adverse effect on our business, results of operations, financial
condition or liquidity.
We cannot assure you that existing environmental assessments of our
properties reveal all environmental liabilities, that any prior owner of any of
our properties did not create a material environmental condition not known to
us, or that a material environmental condition does not otherwise exist as to
any one or more of our properties.
OUR ABILITY TO SERVICE DEBT AND MAKE DISTRIBUTIONS TO SECURITY HOLDERS IS
SUBJECT TO RISKS ASSOCIATED WITH THE REAL ESTATE INDUSTRY
GENERAL
Real property investments are subject to varying degrees of risk and are
relatively illiquid. Several factors may adversely affect the economic
performance and value of our properties. These factors include changes in the
national, regional and local economic climate, local conditions such as an
oversupply of multifamily properties or a reduction in demand for our
multifamily properties, the attractiveness of our properties to tenants,
competition from other available multifamily property owners and changes in
market rental rates. Our ability to service our debt and make distributions to
security holders also depends on our ability to collect rent from tenants and to
pay for adequate maintenance, insurance and other operating costs, including
real estate taxes, which could increase over time. Also, the expenses of owning
and operating a property are not necessarily reduced when circumstances such as
market factors and competition cause a reduction in income from the property.
17
<PAGE>
WE MAY BE UNABLE TO RENEW LEASES OR RELET SPACE AS LEASES EXPIRE
When our tenants decide not to renew their leases upon expiration, we may
not be able to relet their space. Even if the tenants do renew or we can relet
the space, the terms of renewal or reletting may be less favorable than current
lease terms. If we are unable to promptly renew the leases or relet the space,
or if the rental rates upon renewal or reletting are significantly lower than
expected rates, then our results of operations and financial condition will be
adversely affected. Consequently, our cash flow and ability to service debt and
make distributions to security holders would be reduced.
NEW ACQUISITIONS OR DEVELOPMENTS MAY FAIL TO PERFORM AS EXPECTED AND
COMPETITION FOR ACQUISITIONS MAY RESULT IN INCREASED PRICES FOR PROPERTIES
We intend to continue to actively acquire or develop multifamily
properties. Newly acquired or developed properties may fail to perform as
expected. We may underestimate the costs necessary to bring an acquired property
up to standards established for its intended market position or to develop a
property. Additionally, we expect that other major real estate investors with
significant capital will compete with us for attractive investment
opportunities. This competition has increased prices for multifamily properties.
We may not be in a position or have the opportunity in the future to make
suitable property acquisitions on favorable terms.
BECAUSE REAL ESTATE INVESTMENTS ARE ILLIQUID, WE MAY NOT BE ABLE TO SELL
PROPERTIES WHEN APPROPRIATE
Real estate investments generally cannot be sold quickly. We may not be
able to vary our portfolio promptly in response to economic or other conditions.
This inability to respond promptly to changes in the performance of our
investments could adversely affect our financial condition and ability to
service our debt and make distributions to our security holders.
CHANGES IN LAWS COULD AFFECT OUR BUSINESS
We are generally not able to pass through to our tenants under existing
leases, increases in real estate taxes, income taxes and service or other taxes.
Consequently, any such increases may adversely affect our financial condition
and limit our ability to service our debt and make distributions to our security
holders. Similarly, changes that increase our potential liability under
environmental laws or our expenditures on environmental compliance would
adversely affect our cash flow and ability to service our debt and make
distributions on our securities.
WE DEPEND ON OUR KEY PERSONNEL
We depend on the efforts of the Chairman of the Board of Trustees of our
general partner, Samuel Zell, and the executive officers of our general partner,
particularly Douglas Crocker II and Gerald A. Spector. If they resign, our
operations could be temporarily adversely effected. Mr. Crocker and Mr. Spector
have entered into Deferred Compensation Agreements with our general partner,
which provide both with a salary benefit after their respective termination of
employment with our general partner. In addition, Mr. Zell, Mr. Crocker and Mr.
Spector have entered into Noncompetition Agreements with our general partner.
18
<PAGE>
OUR GENERAL PARTNER'S COMPLIANCE WITH REAL ESTATE INVESTMENT TRUST (REIT)
DISTRIBUTION REQUIREMENTS MAY AFFECT OUR FINANCIAL CONDITION
DISTRIBUTION REQUIREMENTS MAY INCREASE THE INDEBTEDNESS OF THE COMPANY
We may be required from time to time, under certain circumstances, to
accrue as income for tax purposes interest and rent earned but not yet received.
In such event, or upon our repayment of principal on debt, we could have taxable
income without sufficient cash to enable our general partner to meet the
distribution requirements of a REIT. Accordingly, we could be required to borrow
funds or liquidate investments on adverse terms in order to meet such
distribution requirements.
WE ARE DEPENDENT ON EXTERNAL SOURCES OF CAPITAL
Because of our general partner's annual REIT distribution requirements, we
may not be able to fund all future capital needs, including for acquisitions and
developments, from income generated by operations and the disposition of certain
assets. We therefore may have to rely on third-party sources of capital, which
may or may not be available on favorable terms or at all. Our access to
third-party sources of capital depends on a number of things, including the
market's perception of our growth potential and our current and potential future
earnings. Moreover, additional debt financing may increase our leverage.
ITEM 2. THE PROPERTIES
As of December 31, 1999, the Operating Partnership owned or had interests
in a portfolio of 1,062 multifamily Properties located in 35 states containing
225,708 apartment units. The Operating Partnership has:
<TABLE>
<CAPTION>
AVERAGE AVERAGE AVERAGE
NUMBER OF NUMBER OCCUPANCY MONTHLY
TYPE PROPERTIES OF UNITS PERCENTAGE RENT
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GARDEN 652 282 94.9% $ 764
MID/HIGH-RISE 24 360 95.4% $ 1,239
RANCH 386 85 93.3% $ 463
----------------
TOTAL 1,062
================
</TABLE>
Tenant leases are generally year-to-year and require security deposits. The
garden-style properties are generally defined as properties with two and/or
three floors while the mid-rise/high-rise properties are defined as properties
greater than three floors. These two property types typically provide residents
with amenities, which may include a clubhouse, swimming pool, laundry facilities
and cable television access. Certain of these properties offer additional
amenities such as saunas, whirlpools, spas, sports courts and exercise rooms.
The ranch-style properties, which are defined as single story properties,
generally do not provide additional amenities for its residents.
It is management's role to monitor compliance with Property policies and to
provide preventive maintenance of the Properties including common areas,
facilities and amenities. The Operating Partnership holds periodic meetings of
its Property management personnel for training and implementation of the
Operating Partnership's strategies. The Operating Partnership believes that, due
in part to this strategy, the Properties historically have had high occupancy
rates.
The distribution of the Properties throughout the United States reflects
the Operating Partnership's belief that geographic diversification helps
insulate the portfolio from regional and economic influences. At
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<PAGE>
the same time, the Operating Partnership has sought to create clusters of
Properties within each of its primary markets in order to achieve economies of
scale in management and operation; however, the Operating Partnership may
acquire additional multifamily properties located anywhere in the United States.
The Operating Partnership beneficially owns fee simple title to 976 of the
983 controlled Properties and holds a 99-year leasehold interest with respect to
one Property (Mallgate). In addition, with respect to two Properties, the
Operating Partnership owns the debt collateralized by such Properties and with
respect to four Properties, the Operating Partnership owns the debt
collateralized by the Properties. The remaining 79 properties represent
investments in partnership interests and/or subordinated mortgages containing
11,648 units.
Direct fee simple title for certain of the Properties is owned by
single-purpose nominee corporations, LLC's or land trusts that engage in no
business other than holding title to the Property for the benefit of the
Operating Partnership. Holding title in such a manner is expected to make it
less costly to transfer such Property in the future in the event of a sale and
should facilitate financing since lenders often require title to a Property to
be held in a single purpose entity in order to isolate that Property from
potential liabilities of other Properties. Direct fee simple title for certain
other Properties is owned by a single LLC.
The Operating Partnership also leases (under operating leases) various
management, regional and corporate offices throughout the United States. See
Item 1 for the locations of these offices.
The following table sets forth certain information by type and by state
relating to the Properties owned by the Operating Partnership or in which the
Operating Partnership had a direct equity or mortgage interest as of December
31, 1999.
20
<PAGE>
<TABLE>
<CAPTION>
GARDEN-STYLE PROPERTIES
AVERAGE DECEMBER 31,
OCCUPANCY 1999
PERCENTAGE AS OF AVERAGE MONTHLY
NUMBER OF NUMBER PERCENTAGE OF DECEMBER 31, 1999 RENTAL RATE PER
STATE PROPERTIES OF UNITS TOTAL UNITS UNIT
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alabama 12 2,483 1.10 % 87.4 % $507
Arizona 65 19,513 8.65 94.9 734
California 70 18,215 8.07 96.5 1,061
Colorado 31 8,102 3.59 95.0 733
Connecticut 1 156 0.07 93.6 814
Florida 85 24,448 10.83 94.5 717
Georgia 40 13,112 5.81 94.7 769
Illinois 6 2,154 0.95 96.1 978
Indiana 1 320 0.14 94.7 627
Iowa 1 200 0.09 93.0 596
Kansas 6 2,392 1.06 96.5 721
Kentucky 7 1,941 0.86 94.0 583
Maine 5 672 0.30 97.1 770
Maryland 27 6,587 2.92 95.9 786
Massachusetts 6 1,214 0.54 96.4 1,141
Michigan 11 4,084 1.81 94.4 821
Minnesota 17 3,641 1.61 95.4 907
Missouri 8 1,590 0.70 95.7 654
Nevada 11 3,595 1.59 93.8 677
New Hampshire 1 390 0.17 96.2 842
New Jersey 1 704 0.31 97.9 959
New Mexico 4 1,073 0.48 93.5 667
North Carolina 38 10,358 4.59 94.8 652
Ohio 1 827 0.37 92.7 836
Oklahoma 9 2,324 1.03 95.8 559
Oregon 11 3,448 1.53 94.1 694
South Carolina 8 1,473 0.65 94.4 543
Tennessee 18 5,081 2.25 94.6 662
Texas 84 26,158 11.59 94.3 704
Utah 4 1,426 0.63 93.5 612
Virginia 16 4,837 2.14 95.4 769
Washington 43 10,367 4.59 95.5 788
Wisconsin 4 1,281 0.57 95.6 897
------------ ------------ -------------
TOTAL GARDEN-STYLE 652 184,166 81.59 %
------------ ------------ ------------- -------------- -------------
AVERAGE GARDEN-STYLE 282 94.9 % $764
------------ -------------- -------------
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
MID-RISE/HIGH-RISE PROPERTIES
AVERAGE DECEMBER 31,
OCCUPANCY 1999
PERCENTAGE AS OF AVERAGE MONTHLY
NUMBER OF NUMBER PERCENTAGE OF DECEMBER 31, 1999 RENTAL RATE PER
STATE PROPERTIES OF UNITS TOTAL UNITS UNIT
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Arizona 1 611 0.27 % 91.2 % $581
California 1 164 0.07 94.0 1,670
Connecticut 2 407 0.18 95.3 1,939
Florida 2 457 0.20 97.0 973
Illinois 1 1,420 0.63 95.4 838
Iowa 1 186 0.08 95.1 799
Massachusetts 4 2,181 0.97 98.2 1,467
Minnesota 1 162 0.07 98.8 1,246
New Jersey 2 684 0.30 96.0 1,954
Ohio 1 765 0.34 79.3 987
Oregon 1 525 0.23 93.9 915
Texas 2 333 0.15 97.3 1,061
Virginia 1 277 0.12 97.8 1,031
Washington 4 472 0.21 95.0 985
------------ ------------ -------------
TOTAL MID-RISE/HIGH-RISE 24 8,644 3.83 %
------------ ------------ ------------- -------------- -------------
AVERAGE MID-RISE/HIGH-RISE 360 95.4 % $1,239
------------ -------------- -------------
</TABLE>
<TABLE>
<CAPTION>
RANCH-STYLE PROPERTIES
<S> <C> <C> <C> <C> <C>
Alabama 2 159 0.07 % 94.0 % $388
Florida 97 8,922 3.95 94.4 468
Georgia 60 4,964 2.20 93.6 494
Illinois 4 281 0.12 91.9 444
Indiana 51 4,415 1.96 90.6 450
Kentucky 27 2,026 0.90 95.2 428
Maryland 4 413 0.18 92.7 537
Michigan 21 1,720 0.76 97.3 539
Ohio 100 8,337 3.69 92.3 439
Pennsylvania 7 580 0.26 93.2 534
South Carolina 3 269 0.12 93.9 444
Tennessee 5 348 0.15 96.5 453
Texas 1 67 0.03 93.0 467
West Virginia 4 397 0.18 91.1 423
------------ ------------ -------------
TOTAL RANCH-STYLE 386 32,898 14.58 %
------------ ------------ ------------- -------------- -------------
AVERAGE RANCH-STYLE 85 93.3 % $463
------------ -------------- -------------
------------ ------------ -------------
TOTAL OPERATING PARTNERSHIP
RESIDENTIAL PORTFOLIO 1,062 225,708 100.00%
============ ============ =============
</TABLE>
22
<PAGE>
The properties currently under development
(see discussion in Item 7) are included in the following table.
<TABLE>
<CAPTION>
DEVELOPMENT
ESTIMATED COST FUNDED
DEVELOPMENT NUMBER OF NUMBER DEVELOPMENT COST AT 12/31/1999
PROJECT NAME LOCATION PROPERTIES OF UNITS (IN MILLIONS) (IN MILLIONS)(1)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
La Mirage IV(3) San Diego, CA 1 340 $ 54.4 $ 1.6
Town Center II (2) Houston, TX 1 260 15.2 15.2
Prospect Towers II(3) Hackensack, NJ 1 203 33.8 0.6
--------- -------- ------------- --------------
EXPANSION PROJECTS 3 803 $103.4 $ 17.4
--------- -------- ------------- --------------
Peachtree Atlanta, GA 1 355 $ 35.3 $ 8.8
Lincoln Park Lawrence, MA 1 174 17.8 4.5
Mount Laurel Crossing Mt. Laurel, NJ 1 296 25.2 6.3
Fairfax Corners Fairfax, VA 1 652 63.9 16.0
Lakeside Park Tampa, FL 1 264 17.7 4.4
Eden Village Loudon County, VA 1 298 28.7 0.0
Landings, The Lake Zurich, IL 1 206 20.9 5.2
Regents Court San Diego, CA 1 251 37.1 9.3
Potomac Yard Alexandria, VA 1 588 65.7 0.0
Waltham Terrace Waltham, MA 1 192 27.0 0.0
Braintree Woods Braintree, MA 1 202 27.4 6.8
Savannah at Park Place Atlanta, GA 1 416 43.9 9.9
--------- -------- ------------- -------------
LINCOLN PROPERTY COMPANY
JOINT VENTURE PROJECTS 12 3,894 $410.6 $ 71.2
--------- -------- ------------- -------------
Hampden Town Center Aurora, CO 1 444 $ 44.8 $ 9.5
Warner Ridge Woodland Hills, CA 1 579 111.2 27.8
--------- -------- ------------- -------------
LEGACY PARTNERS JOINT VENTURE PROJECTS 2 1,023 $156.0 $ 37.3
--------- -------- ------------- -------------
Parkfield Denver, CO 1 476 $ 37.9 $ 0.0
--------- -------- ------------- -------------
EARNOUT PROJECTS 1 476 $ 37.9 $ 0.0
--------- -------- ------------- -------------
--------- -------- ------------- -------------
TOTAL PROJECTS 18 6,196 $707.9 $125.9
========= ======== ============= =============
</TABLE>
<TABLE>
ESTIMATED EQR TOTAL EQR
FUTURE FUNDING FUNDING ESTIMATED
DEVELOPMENT OBLIGATION OBLIGATION COMPLETION
PROJECT NAME LOCATION (IN MILLIONS)(1) (IN MILLIONS)(1) DATE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
La Mirage IV(3) San Diego, CA $52.8 $ 54.4 Q1 2001
Town Center II (2) Houston, TX 0.0 15.2 Completed
Prospect Towers II(3) Hackensack, NJ 33.2 33.8 Q2 2001
------------- ------------
EXPANSION PROJECTS $86.0 $103.4
------------- ------------
Peachtree Atlanta, GA $0.0 $8.8 Completed
Lincoln Park Lawrence, MA 0.0 4.5 Q2 2000
Mount Laurel Crossing Mt. Laurel, NJ 0.0 6.3 Q2 2000
Fairfax Corners Fairfax, VA 0.0 16.0 Q3 2001
Lakeside Park Tampa, FL 0.0 4.4 Q4 2000
Eden Village Loudon County, VA 7.2 7.2 Q4 2001
Landings, The Lake Zurich, IL 0.0 5.2 Q3 2000
Regents Court San Diego, CA 0.0 9.3 Q1 2001
Potomac Yard Alexandria, VA 16.4 16.4 Q3 2001
Waltham Terrace Waltham, MA 6.7 6.7 Q4 2001
Braintree Woods Braintree, MA 0.0 6.8 Q4 2000
Savannah at Park Place Atlanta, GA 1.1 11.0 Q4 2000
------------- ------------
LINCOLN PROPERTY COMPANY
JOINT VENTURE PROJECTS $31.4 $102.6
------------- ------------
Hampden Town Center Aurora, CO $1.7 $11.2 Q1 2001
Warner Ridge Woodland Hills, CA 0.0 27.8 Q4 2001
------------- ------------
LEGACY PARTNERS JOINT VENTURE PROJECTS $1.7 $39.0
------------- ------------
Parkfield Denver, CO $37.9 $37.9 Q4 2000
------------- ------------
EARNOUT PROJECTS $37.9 $37.9
------------- ------------
------------- ------------
TOTAL PROJECTS $157.0 $282.9
============= ============
</TABLE>
(1) The Operating Partnership's Funding of Lincoln Property Company Joint
Venture and Legacy Partners Joint Venture Projects is limited to 25%
of the total development cost.
(2) Town Center II was substantially completed and acquired on December
22, 1999 and is included in the outstanding property and unit counts
as of that date.
(3) Estimated development cost does not include the cost of land
previously acquired by the Operating Partnership.
23
<PAGE>
PART I
ITEM 3. LEGAL PROCEEDINGS
Only ordinary routine litigation incidental to the business which is not
deemed material was initiated during the year ended December 31, 1999. As of
December 31, 1999, the Operating Partnership does not believe there is any other
litigation threatened against the Operating Partnership other than routine
litigation arising out of the ordinary course of business, some of which is
expected to be covered by liability insurance, none of which is expected to have
a material adverse effect on the consolidated financial statements of the
Operating Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
24
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
There is no established public trading market for the OP Units.
During 1999, the Operating Partnership directly issued 513,634 OP Units
having a value of $25.2 million and 36,162 Junior Convertible Preference Units
having a value of $3.0 million in exchange for direct or indirect interests in
multifamily Properties in private placement transactions under section 4(2) of
the Securities Exchange Act of 1934, as amended. OP Units are exchangeable into
Common Shares of EQR on a one-for-one basis or, at the option of EQR, the cash
equivalent thereof one year from the date of issuance. Junior Convertible
Preference Units are exchangeable into OP Units under certain circumstances in
accordance with the respective term sheet of the issuance.
The following tables sets forth, for the periods indicated, the
distributions paid on the Operating Partnership's OP Units:
<TABLE>
<CAPTION>
FISCAL YEAR 1999 DISTRIBUTIONS
----------------------------------------------------------------
<S> <C>
Fourth Quarter Ended December 31, 1999 $0.76
Third Quarter Ended September 30, 1999 $0.76
Second Quarter Ended June 30, 1999 $0.71
First Quarter Ended March 31, 1999 $0.71
FISCAL YEAR 1998 DISTRIBUTIONS
----------------------------------------------------- ------------------
Fourth Quarter Ended December 31, 1998 $0.71
Third Quarter Ended September 30, 1998 $0.67
Second Quarter Ended June 30, 1998 $0.67
First Quarter Ended March 31, 1998 $0.67
</TABLE>
In addition, on February 17, 2000, the Operating Partnership declared a
$0.76 distribution on each OP Unit payable on April 14, 2000 to OP Unit holders
of record on March 20, 2000.
The number of holders of record of OP Units in the Operating Partnership at
March 1, 2000 was 330. The number of outstanding OP Units as of March 1, 2000
was 140,369,532. In addition, the number of holders of record of Junior
Convertible Preference Units in the Operating Partnership at March 1, 2000 was
30. The number of outstanding Junior Convertible Preference Units as of March 1,
2000 was 84,490.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial and operating information
on a historical basis for the Operating Partnership. The following information
should be read in conjunction with all of the financial statements and notes
thereto included elsewhere in this Form 10-K. The historical operating and
balance sheet data for the year ended December 31, 1995 have been derived from
the historical Financial Statements of the Operating Partnership. The historical
operating and balance sheet data for the years ended December 31, 1999, 1998,
1997 and 1996 have been derived from the historical Financial Statements of the
Operating Partnership audited by Ernst & Young LLP, independent auditors.
Certain capitalized terms as used herein, are defined in the Notes to the
Consolidated Financial Statements.
25
<PAGE>
PART II
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(FINANCIAL INFORMATION IN THOUSANDS EXCEPT FOR PER OP UNIT AND PROPERTY DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Total revenues $ 1,753,118 $ 1,336,996 $ 747,078 $ 478,385 $ 390,384
============ ============= ============ =========== ============
Income before gain on disposition of properties, net
and extraordinary item $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738
============ ============= ============ =========== ============
Net income $ 423,417 $ 276,735 $ 189,852 $ 115,923 $ 83,355
============ ============= ============ =========== ============
Net income per OP Unit - basic $ 2.30 $ 1.65 $ 1.79 $ 1.70 $ 1.68
============ ============= ============ =========== ============
Net income per OP Unit - diluted $ 2.29 $ 1.63 $ 1.76 $ 1.69 $ 1.67
============ ============= ============ =========== ============
Weighted average OP Units outstanding - basic 135,001 111,713 73,182 51,108 42,749
============ ============= ============ =========== ============
Weighted average OP Units outstanding - diluted 135,655 112,578 74,281 51,520 42,865
============ ============= ============= =========== ============
Distributions declared per OP Unit outstanding $ 2.94 $ 2.72 $ 2.55 $ 2.40 $ 2.18
============ ============= ============ =========== ============
BALANCE SHEET DATA (at end of period):
Real estate, before accumulated depreciation (1) $ 12,238,963 $ 10,942,063 $ 7,121,435 $ 2,983,510 $ 2,188,939
Real estate, after accumulated depreciation (1) $ 11,168,476 $ 10,223,572 $ 6,676,673 $ 2,681,998 $ 1,970,600
Total assets $ 11,715,689 $ 10,700,260 $ 7,094,631 $ 2,986,127 $ 2,141,260
Total debt $ 5,473,868 $ 4,680,527 $ 2,948,323 $ 1,254,274 $ 1,002,219
Junior Convertible Preference Units $ 7,896 $ 4,833 $ - $ - $ 24,578
Cumulative Convertible Redeemable Preference Interests $ 40,000 $ - $ - $ - $ -
9 3/8% Series A Cumulative Redeemable Preference Units $ 153,000 $ 153,000 $ 153,000 $ 153,000 $ 153,000
9 1/8% Series B Cumulative Redeemable Preference Units $ 125,000 $ 125,000 $ 125,000 $ 125,000 $ 125,000
9 1/8% Series C Cumulative Redeemable Preference Units $ 115,000 $ 115,000 $ 115,000 $ 115,000 $ -
8.60% Series D Cumulative Redeemable Preference Units $ 175,000 $ 175,000 $ 175,000 $ - $ -
Series E Cumulative Convertible Preference Units $ 99,850 $ 99,925 $ 99,963 $ - $ -
9.65% Series F Cumulative Redeemable Preference Units $ 57,500 $ 57,500 $ 57,500 $ - $ -
7 1/4% Series G Convertible Cumulative Preference Units $ 316,250 $ 316,250 $ 316,250 $ - $ -
7.00% Series H Cumulative Convertible Preference Units $ 3,686 $ 3,914 $ - $ - $ -
8.82% Series I Cumulative Convertible Preference Units $ - $ 100,000 $ - $ - $ -
8.60% Series J Cumulative Convertible Preference Units $ 114,980 $ 114,985 $ - $ - $ -
8.29% Series K Cumulative Redeemable Preference Units $ 50,000 $ 50,000 $ - $ - $ -
7.625% Series L Cumulative Redeemable Preference Units $ 100,000 $ 100,000 $ - $ - $ -
General and Limited Partners' Capital $ 4,603,751 $ 4,346,414 $ 2,921,682 $ 1,216,467 $ 750,902
OTHER DATA:
Total properties (at end of period) (2) 983 653 463 218 174
Total apartment units (at end of period) (2) 214,060 186,496 135,200 67,705 53,294
Funds from operations available to Common
Shares and OP Units (3) $ 619,603 $ 458,841 $ 270,763 $ 160,267 $ 120,965
Cash flow provided by (used for):
Operating activities $ 785,219 $ 543,213 $ 348,997 $ 210,930 $ 141,534
Investing activities $ (523,551) $ (1,047,374) $ (1,552,390) $ (635,655) $ (324,018)
Financing activities $ (236,516) $ 474,831 $ 1,089,417 $ 558,568 $ 175,874
</TABLE>
26
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA (CONSOLIDATED HISTORICAL (CONTINUED))
(1) Includes approximately $18.0 million and $96.3 million of construction in
progress as of December 31, 1999 and 1998, respectively.
(2) Totals exclude properties which the Operating Partnership had investments
in partnership interests and/or subordinated mortgages. As of December 31,
1999, this represented 79 properties containing 11,648 units. As of
December 31, 1998, this represented 27 properties containing 5,193 units.
As of December 31, 1997, this represented 26 properties containing 5,267
units.
(3) The Operating Partnership generally considers funds from operations ("FFO")
to be one measure of the performance of real estate companies, including an
equity REIT. The definition of FFO adopted in March 1995 by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT") defines FFO as net income (loss) (computed in accordance with
generally accepted accounting principles ("GAAP")), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation on
real estate assets, and after adjustments for unconsolidated partnerships
and joint ventures. Adjustments for unconsolidated partnerships and joint
ventures are calculated to reflect FFO on the same basis. The Operating
Partnership believes that FFO is helpful to investors as a measure of the
performance of an equity REIT because, along with cash flows from operating
activities, financing activities and investing activities, it provides
investors an understanding of the ability of the Company to incur and
service debt and to make capital expenditures. FFO, in and of itself, does
not represent cash generated from operating activities in accordance with
GAAP and therefore should not be considered an alternative to net income as
an indication of the Operating Partnership's performance or to net cash
flows from operating activities as determined by GAAP as a measure of
liquidity and is not necessarily indicative of cash available to fund cash
needs. The Operating Partnership's calculation of FFO represents net
income, excluding gains on dispositions of properties, gains on early
extinguishment of debt, and write-off of unamortized costs on refinanced
debt, less an allocation of net income to preference unit holders, plus
depreciation on real estate assets and amortization of deferred financing
costs related to EQR's Predecessor Business. The Operating Partnership's
calculation of FFO may differ from the methodology for calculating FFO
utilized by other REIT's and, accordingly, may not be comparable to such
other REIT's. The Operating Partnership's calculation of FFO for 1995 has
been restated to reflect the effects of the definition as mentioned above.
The Operating Partnership will adopt, effective January 1, 2000, NAREIT's
updated recommended definition of FFO as approved in the fourth quarter of
1999.
27
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7. OVERVIEW
The following discussion and analysis of the results of operations and
financial condition of the Operating Partnership should be read in conjunction
with the Consolidated Financial Statements and Notes thereto. Due to the
Operating Partnership's ability to control the Management Partnerships and
Management Companies, the Financing Partnerships, the LLC's, and certain other
entities, each entity has been consolidated with the Operating Partnership for
financial reporting purposes. Capitalized terms used herein and not defined are
as defined elsewhere in this Annual Report on Form 10-K for the year ended
December 31, 1999.
Forward-looking statements in this Item 7 as well as Item 1 of this Annual
Report on Form 10-K are intended to be made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The words
"believes", "expects" and "anticipates" and other similar expressions which are
predictions of or indicate future events and trends and which do not relate
solely to historical matters identify forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties, which could
cause actual results, performance, or achievements of the Operating Partnership
to differ materially from anticipated future results, performance or
achievements expressed or implied by such forward-looking statements. Factors
that might cause such differences include, but are not limited to, the
following:
- alternative sources of capital to the Operating Partnership are higher
than anticipated;
- occupancy levels and market rents may be adversely affected by local
economic and market conditions, which are beyond the Operating
Partnership's control; and
- additional factors as discussed in Part I of this Annual Report as
filed on Form 10-K.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Operating Partnership
undertakes no obligation to publicly release any revisions to these
forward-looking statements, which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
RESULTS OF OPERATIONS
The acquired properties are presented in the Consolidated Financial
Statements of the Operating Partnership from the date of each acquisition or the
closing dates of the Mergers. The following table summarizes the number of
Acquired and Disposed Properties and related units for the prior three years:
<TABLE>
<CAPTION>
ACQUISITIONS DISPOSITIONS
---------------------------------- -------------------------------
Number of Number of Number of Number of
YEAR Properties Units Properties Units
--------------------------- ---------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
1997 252 68,830 7 1,336
1998 210 56,015 20 4,719
1999 366 35,450 36 7,886
</TABLE>
In addition, during the year ended December 31, 1999, the Operating
Partnership also sold its entire interest in six MRY joint venture properties
(to MRYP Spinco) containing 1,297 units for approximately $54.1 million.
28
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
The Operating Partnership's overall results of operations for the year
ended December 31, 1999 and 1998 have been significantly impacted by the
Operating Partnership's acquisition and disposition activity. The significant
changes in rental revenues, property and maintenance expenses, real estate taxes
and insurance, depreciation expense, property management and interest expense
can all primarily be attributed to the acquisition of the 1998 Acquired
Properties and the 1999 Acquired Properties, partially offset by the disposition
of the 1998 Disposed Properties and the 1999 Disposed Properties. The impact of
the 1998 Acquired Properties, the 1999 Acquired Properties, the 1998 Disposed
Properties and the 1999 Disposed Properties is discussed in greater detail in
the following paragraphs.
Properties that the Operating Partnership owned for all of both 1999 and
1998 (the "1999 Same Store Properties"), which represented 121,490 units,
impacted the Operating Partnership's results of operations. Properties that the
Operating Partnership owned for all of both 1998 and 1997 (the "1998 Same Store
Properties"), which represented 63,243 units, also impacted the Operating
Partnership's results of operations. Both the 1999 Same Store Properties and
1998 Same Store Properties are discussed in the following paragraphs.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER
31, 1998
For the year ended December 31, 1999, income before gain on disposition of
properties, net, and extraordinary item increased by $75.3 million when compared
to the year ended December 31, 1998. This increase was primarily due to the
acquisition of the 1998 Acquired Properties and the 1999 Acquired Properties as
well as increases in rental revenues net of increases in property and
maintenance expenses, real estate taxes and insurance, property management
expenses, depreciation expense, interest expense and general and administrative
expenses.
In regard to the 1999 Same Store Properties, total revenues increased by
approximately $35.8 million to $1.1 billion or 3.48% primarily as a result of
higher rental rates charged to new tenants and tenant renewals and an increase
in income from billing tenants for their share of utility costs as well as other
ancillary services provided to tenants. Overall, property operating expenses,
which include property and maintenance, real estate taxes and insurance and an
allocation of property management expenses, increased approximately $0.1 million
or 0.03%. This increase was primarily the result of higher expenses for on-site
compensation costs and an increase in real estate taxes on certain properties,
but was partially offset by lower leasing and advertising, administrative,
maintenance and property management costs.
Property management represents expenses associated with the self-management
of the Operating Partnership's Properties. These expenses increased by
approximately $8.5 million primarily due to the continued expansion of the
Operating Partnership's property management business. During 1999, the Operating
Partnership assumed a management office in Reynoldsburg, Ohio related to the LFT
Merger.
Fee and asset management revenues and fee and asset management expenses are
associated with the management of properties not owned by the Operating
Partnership that are managed for affiliates. These revenues and expenses
decreased due to the Operating Partnership acquiring certain of these properties
that were formerly fee-managed.
Interest expense, including amortization of deferred financing costs,
increased by approximately $91.9 million. This increase was primarily the result
of an increase in the Operating Partnership's average indebtedness outstanding
which increased by $1.3 billion. However, the Operating Partnership's effective
29
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
interest costs decreased from 7.10% for the year ended December 31, 1998 to
7.05% for the year ended December 31, 1999.
General and administrative expenses, which include corporate operating
expenses, increased approximately $1.7 million between the periods under
comparison. This increase was primarily due to the addition of corporate
personnel. However, by gaining certain economies of scale with a much larger
operation these expenses as a percentage of total revenues were 1.27% for the
year ended December 31, 1999 compared to 1.54% of total revenues for the year
ended December 31, 1998.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER
31, 1997
For the year ended December 31, 1998, income before gain on disposition of
properties, net and extraordinary item increased by $79 million when compared to
the year ended December 31, 1997. This increase was primarily due to increases
in rental revenues net of increases in property and maintenance expenses, real
estate taxes and insurance, property management expenses, depreciation expense,
interest expense and general and administrative expenses.
In regard to the 1998 Same Store Properties rental income increased by
approximately $23.1 million to $527.3 million or 4.59% primarily as a result of
higher rental rates charged to new tenants and tenant renewals, a 1.01% increase
in average economic occupancy levels and an increase in income from billing
tenants for their share of utility costs. Overall, property operating expenses,
which include property and maintenance, real estate taxes and insurance and an
allocation of property management expenses, increased approximately $5.3 million
or 2.65%. This increase was primarily the result of higher compensation costs,
leasing and advertising costs, utilities, and maintenance charges.
Property management represents expenses associated with the self-management
of the Operating Partnership's Properties. These expenses increased by
approximately $26.3 million primarily due to the continued expansion of the
Operating Partnership's property management business. The 1998 amounts include a
full year effect of the various offices the Operating Partnership opened in
1997, including the Scottsdale Office, which had a significant expansion
resulting from the EWR Merger. During 1998, the Operating Partnership opened new
management offices in Jacksonville and Orlando, Florida and the Operating
Partnership assumed a management office in Augusta, Georgia related to the MRY
Merger.
Fee and asset management revenues and fee and asset management expenses are
associated with the management of properties not owned by the Operating
Partnership that are managed for affiliates. These net revenues decreased due to
the disposition of certain of these properties, resulting in the Operating
Partnership no longer providing fee and asset management services to such
properties.
Interest expense, including amortization of deferred financing costs,
increased by approximately $125.5 million. This increase was primarily the
result of an increase in the Operating Partnership's average indebtedness
outstanding which increased by $1.9 billion. However, the Operating
Partnership's effective interest costs decreased from 7.50% for the year ended
December 31, 1997 to 7.10% for the year ended December 31, 1998.
General and administrative expenses, which include corporate operating
expenses, increased approximately $5.8 million between the periods under
comparison. This increase was primarily due to the addition of corporate
personnel in the Operating Partnership's Human Resources, Accounting, Legal and
30
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Management Information Systems groups, as well as higher compensation costs,
shareholder reporting costs and professional fees. However, by gaining certain
economies of scale with a much larger operation these expenses as a percentage
of total revenues were 1.54% for the year ended December 31, 1998 compared to
1.98% of total revenues for the year ended December 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
FOR THE YEAR ENDED DECEMBER 31, 1999
As of January 1, 1999, the Operating Partnership had approximately $4
million of cash and cash equivalents and $330 million available on its lines of
credit, of which $12 million was restricted. After taking into effect the
various transactions discussed in the following paragraphs, the Operating
Partnership's cash and cash equivalents balance at December 31, 1999 was
approximately $29.1 million and the amount available on the Operating
Partnership's line of credit was $400 million, of which $65.8 million was
restricted. The following discussion also explains the changes in net cash
provided by operating activities, net cash used for investing activities and net
cash provided by (used for) financing activities, all of which are presented in
the Operating Partnership's Statements of Cash Flows.
Part of the Operating Partnership's strategy in funding the purchase of
multifamily properties, funding its Properties in the development stage and the
funding of the Operating Partnership's investment in two joint ventures with
multifamily real estate developers is to utilize its line of credit and to
subsequently repay the line of credit from the issuance of additional equity or
debt securities or the disposition of Properties. Utilizing this strategy during
1999, EQR and/or the Operating Partnership:
- issued the June 2004 Notes and received net proceeds of $298.0
million;
- refinanced seven Properties and received additional proceeds of $78.5
million;
- obtained new mortgage financing on eleven previously unencumbered
properties and received net proceeds of $126.5 million;
- disposed of forty-two properties (including the sale of the Operating
Partnership's interest in six MRY joint venture properties) and
received net proceeds of $383 million;
- issued approximately 1.2 million Common Shares and received net
proceeds of $38.5 million which were contributed by EQR to the
Operating Partnership in exchange for OP Units; and
- issued 800,000 8.00% Series A Cumulative Convertible Redeemable
Preference Interests of EQR-Mosaic, L.L.C. and received net proceeds
of $39 million.
All of these proceeds were utilized to either:
- purchase additional properties;
- provide funding for properties in the development stage; and/or
- repay the line of credit and mortgage indebtedness on certain
Properties
With respect to the 1999 Acquired Properties, the Operating Partnership
assumed and/or entered into new mortgage indebtedness of approximately $69.9
million, issued OP Units with a value of $25.2 million and issued Junior
Convertible Preference Units with a value of $3.0 million. The total purchase
price of the 1999 Acquired Properties was approximately $1.4 billion.
31
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Subsequent to December 31, 1999 and through March 3, 2000, the Operating
Partnership acquired one additional property containing 178 units for a total
purchase price of approximately $10.3 million.
Subsequent to December 31, 1999 and through March 3, 2000, the Operating
Partnership disposed of six properties for a total sales price of $46.7 million.
These proceeds will be utilized to purchase additional properties. The Operating
Partnership anticipates that it will continue to sell certain Properties in the
portfolio.
On March 3, 2000, Lexford Properties, L.P., a subsidiary of
the Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative
Convertible Redeemable Preference Units with an equity value of $55.0 million.
Lexford Properties, L.P. received $53.6 million in net proceeds from this
transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of EQR. The Series
M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the
Series B Preference Units or the Series M-1 Preferred Shares are payable
quarterly at the rate of $4.25 per unit/share per year. The net proceeds
received from this transaction will be used for scheduled mortgage and line of
credit repayments.
In regard to the joint venture agreements with two multifamily residential
real estate developers during the year ended December 31, 1999, the Operating
Partnership funded a total of $88.6 million and during 2000 the Operating
Partnership expects to fund approximately $32.7 million in connection with these
agreements. In connection with the first agreement, the Operating Partnership
has an obligation to fund up to an additional $20 million to guarantee third
party construction financing.
In regard to certain other properties that were under development and/or
expansion during the year ended December 31, 1999, the Operating Partnership
funded $47.5 million. During 2000, the Operating Partnership expects to fund
$44.9 million related to the continued development and/or expansion of as many
as three Properties.
In regard to certain properties that were under earnout/development
agreements, during the year ended December 31, 1999, the Operating Partnership
funded the following:
- $17.2 million relating to the acquisition of Copper Canyon Apartments,
which included a $1.0 million earnout payment to the developer;
- $24.9 million relating to the acquisition of Skyview Apartments, which
included a $3.1 million earnout payment to the developer; and
- $18.3 million relating to the acquisition of Rosecliff Apartments.
Subsequent to December 31, 1999, the Operating Partnership funded $2.3
million for an initial earnout payment to the developer of Rosecliff Apartments.
During 2000, the Operating Partnership expects to fund $33.4 million related to
the continued earnout/development of one Property.
In May 1999, the Operating Partnership repaid its 1999 Notes that matured
on May 15, 1999. The $125 million repayment was initially funded from borrowings
under the Operating Partnership's lines of credit.
32
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
In November 1999, the Operating Partnership repaid the 1999-A Notes that
matured on November 24, 1999. The $25 million repayment was initially funded
from borrowings under the Operating Partnership's line of credit.
During 1999, the Operating Partnership repaid approximately $60.8 million
of mortgage indebtedness on 31 Properties. These repayments were funded from the
Operating Partnership's line of credit and/or certain proceeds from
dispositions.
In addition, the Operating Partnership refinanced the debt on six existing
properties totaling $45.0 million with new mortgage indebtedness totaling $65.7
million.
As of December 31, 1999, the Operating Partnership had total indebtedness
of approximately $5.5 billion, which included mortgage indebtedness of $2.9
billion (including premiums of $2.1 million), of which $838 million represented
tax-exempt bond indebtedness, and unsecured debt of $2.3 billion (including net
discounts and premiums in the amount of $2.5 million), of which $127.8 million
represented tax-exempt bond indebtedness.
Subsequent to December 31, 1999, the Operating Partnership settled on a
$100 million interest rate protection agreement and received approximately $7.0
million in connection therewith.
On March 20, 2000, the Operating Partnership obtained new mortgage
financing on eleven previously unencumbered properties in the amount of $148.3
million. The net proceeds received from this transaction will be used for
scheduled mortgage and line of credit repayments.
In the second quarter of 2000, the Operating Partnership anticipates
repaying mortgage indebtedness of approximately $85 million assumed in
connection with the LFT Merger. These repayments will also be primarily funded
from additional borrowings under the line of credit and/or additional mortgage
borrowings.
The Operating Partnership has, from time to time, entered into interest
rate protection agreements (financial instruments) to reduce the potential
impact of increases in interest rates but believes it has limited exposure to
the extent of non-performance by the counterparties of each protection agreement
since each counterparty is a major U.S. financial institution, and the Operating
Partnership does not anticipate their non-performance. No such financial
instrument has been used for trading purposes.
In August 1996, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate cost of the Operating
Partnership's 2026 Notes. The agreement was for a notional amount of $150
million with a locked in treasury rate of 7.57%.
In July 1997, the Operating Partnership entered into two interest rate
protection agreements to effectively fix the interest rate cost of the Operating
Partnership's 2001 Notes and 2003 Notes. One agreement was for a notional amount
of $100 million with a locked in treasury rate of 6.134%. The second agreement
was for a notional amount of $75 million with a locked in treasury rate of
6.287%.
In April 1998, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate cost of the Operating
Partnership's 2015 Notes. The agreement was for a notional amount of $300
million with a locked in treasury rate of 6.63%.
33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
In May 1998, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate cost of the Evans
Withycombe Financing Limited Partnership indebtedness to within a range of 5.6%
to 6.0% upon its refinancing. The agreement was for a notional amount of $131
million with a settlement date of August 2001. There was no initial cost to the
Operating Partnership for entering into this agreement.
In August 1998, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate cost of the Operating
Partnership's planned financing in the fourth quarter of 1998. This agreement
was canceled in November at a cost of approximately $3.7 million. This cost is
being amortized over the life of the financing for the 15 previously
unencumbered Properties that occurred in November 1998.
In August 1998, the Operating Partnership entered into an interest rate
swap agreement that fixed the Operating Partnership's interest rate risk on a
portion of the Operating Partnership's variable rate tax-exempt bond
indebtedness at a rate of 3.65125%. This agreement was for a notional amount of
$150 million with a termination date of August 2003.
In August 1998, the Operating Partnership entered into an interest rate
swap agreement that fixed the Operating Partnership's interest rate risk on a
portion of the Operating Partnership's variable rate tax-exempt bond
indebtedness at a rate of 3.683%. This agreement was for a notional amount of
$150 million with a termination date of August 2005.
The fair value of these instruments, discussed above, as of December 31,
1999 approximates their carrying or contract values.
The Operating Partnership has a policy of capitalizing expenditures made
for new assets, including newly acquired properties and the costs associated
with placing these assets into service. Expenditures for improvements and
renovations that significantly enhance the value of existing assets or
substantially extend the useful life of an asset are also capitalized.
Expenditures for in-the-unit replacement-type items such as appliances,
draperies, carpeting and floor coverings, mechanical equipment and certain
furniture and fixtures are also capitalized. Expenditures for ordinary
maintenance and repairs are expensed to operations as incurred. With respect to
acquired properties, the Operating Partnership has determined that it generally
spends $1,000 per unit during its first three years of ownership to fully
improve and enhance these properties to meet the Operating Partnership's
standards. In regard to replacement-type items described above, the Operating
Partnership generally expects to spend $250 per unit on an annual recurring
basis.
During the year ended December 31, 1999, total capital expenditures for the
Operating Partnership approximated $141.9 million. Of this amount, approximately
$34.5 million, or $427 per unit, related to capital improvements and major
repairs for the 1997, 1998 and 1999 Acquired Properties. Capital improvements
and major repairs for all of the Operating Partnership's pre-EQR IPO properties
and 1993, 1994, 1995 and 1996 Acquired Properties approximated $40.8 million, or
$362 per unit. Capital spent for replacement-type items approximated $53.5
million, or $277 per unit. In addition, approximately $5.9 million was spent on
four specific assets related to major renovations and repositioning of these
assets. Also included in total capital expenditures was approximately $7.2
million expended for non-real estate additions such as computer software,
computer equipment, and furniture and fixtures and leasehold improvements for
the Operating Partnership's property management offices and its corporate
headquarters. Such capital expenditures were primarily funded from working
capital reserves and from net cash provided by operating activities. Total
capital expenditures for 2000 are budgeted to be approximately $110.0 million
for all
34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Properties.
Total distributions paid in 1999 amounted to $514.9 million, which included
certain distributions declared in the fourth quarters of 1998 and 1999. The
Operating Partnership paid a $0.76 per OP Unit distribution on December 31, 1999
for the quarter ended December 31, 1999 to OP Unit holders of record as of
December 20, 1999.
The Operating Partnership expects to meet its short-term liquidity
requirements, including capital expenditures related to maintaining its existing
Properties and certain scheduled unsecured note and mortgage note repayments,
generally through its working capital, net cash provided by operating activities
and borrowings under its line of credit. The Operating Partnership considers its
cash provided by operating activities to be adequate to meet operating
requirements and payments of distributions. The Operating Partnership also
expects to meet its long-term liquidity requirements, such as scheduled
unsecured note and mortgage debt maturities, property acquisitions, financing of
construction and development activities and capital improvements through the
issuance of unsecured notes and equity securities including additional OP Units
as well as from undistributed FFO and proceeds received from the disposition of
certain Properties. In addition, the Operating Partnership has certain
uncollateralized Properties available for additional mortgage borrowings in the
event that the public capital markets are unavailable to the Operating
Partnership or the cost of alternative sources of capital to the Operating
Partnership is too high.
On August 12, 1999 the Operating Partnership obtained a new three year $700
million unsecured revolving credit facility, with Bank of America Securities LLC
and Chase Securities Inc. acting as joint lead arrangers. The new line of credit
replaced the Operating Partnership's $500 million unsecured revolving credit
facility, as well as the $120 million unsecured revolving credit facility which
the Operating Partnership assumed in the MRY Merger. The prior existing
revolving credit facilities were repaid in full and terminated upon the closing
of the new facility. This new credit facility matures in August 2002 and will be
used to fund property acquisitions, costs for certain properties under
development and short term liquidity requirements. Advances under the credit
facility bear interest at variable rates based upon LIBOR at various interest
periods, plus a certain spread dependent upon the Operating Partnership's credit
rating. As of March 20, 2000, there were no amounts outstanding under this new
facility.
Pursuant to the LFT Merger, the Operating Partnership assumed a line of
credit that had an outstanding balance of approximately $26.4 million. On
October 1, 1999, the Operating Partnership repaid the outstanding balance and
terminated this facility.
In connection with the Wellsford Merger, the Operating Partnership has
provided a $14.8 million credit enhancement with respect to bonds issued to
finance certain public improvements at a multifamily development project.
Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real
Properties, Inc. ("WRP Newco"), the Operating Partnership has agreed to purchase
up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. These preferred
shares would be convertible to WRP Newco common shares under certain
circumstances. As of December 31, 1999, no shares of WRP Newco Series A
Preferred had been acquired by the Operating Partnership. The Operating
Partnership expects to fund this $25 million investment in April 2000.
In connection with the MRY Merger, the Operating Partnership extended a $25
million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior Debt
Agreement. On June 24, 1999, MRYP
35
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Spinco repaid the entire outstanding Senior Note balance of $18.3 million and
there is no further obligation by either party in connection with this
agreement.
Also, in connection with the MRY Merger, the Operating Partnership entered
into six joint venture agreements with MRYP Spinco. The Operating Partnership
contributed six properties with an initial value of $52.7 million in return for
an ownership interest in each joint venture. On August 23, 1999, the Operating
Partnership sold its entire interest in these six properties to MRYP Spinco and
received $54.1 million. There is no further obligation by either party in
connection with these agreements.
FOR THE YEAR ENDED DECEMBER 31, 1998
As of January 1, 1998, the Operating Partnership had approximately $33.3
million of cash and cash equivalents and $265 million available on its line of
credit of which $24.7 million was restricted. After taking into effect the
various transactions discussed in the following paragraphs, cash and cash
equivalents at December 31, 1998 were approximately $4 million and the amounts
available on the Operating Partnership's lines of credit were $330 million of
which $12 million was restricted. The following discussion also explains the
changes in net cash provided by operating activities, net cash (used for)
investing activities and net cash provided by financing activities, all of which
are presented in the Operating Partnership's Consolidated Statements of Cash
Flows.
Part of the Operating Partnership's strategy in funding the purchase of
multifamily properties, funding its Properties in the development stage and the
funding of the Operating Partnership's investment in a joint venture with a
multifamily real estate developer, excluding those Properties acquired through
the Mergers, is to utilize its line of credit and to subsequently repay the line
of credit from the issuance of additional equity or debt securities or the
disposition of Properties. Utilizing this strategy during 1998 EQR and/or the
Operating Partnership:
- issued a total of approximately 8.5 million Common Shares through
various offerings and received total net proceeds of $412.5 million,
which were contributed by EQR to the Operating Partnership in exchange
for OP Units;
- issued the 2015 Notes, the August 2003 Notes and the 2000 Notes and
received net proceeds of $542.3 million;
- mortgaged fifteen previously unencumbered Properties and received net
proceeds of $223.5 million; and
- disposed of twenty properties, which generated net proceeds of
approximately $177 million.
All of these proceeds were utilized to either:
- purchase additional properties;
- provide funding for properties in the development stage; and/or
- repay the lines of credit and mortgage indebtedness on certain
Properties.
With respect to the 1998 Acquired Properties, EQR issued 21.8 million
Common Shares having a value of $1.0 billion and issued the following preferred
shares having a combined liquidation value of $369.1 million (upon contribution
of the net assets by EQR to the Operating Partnership, the Operating Partnership
issued OP Units and cumulative convertible or redeemable preference units):
36
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
- Series H Preferred Shares;
- Series I Preferred Shares;
- Series J Preferred Shares;
- Series K Preferred Shares; and
- Series L Preferred Shares.
The Operating Partnership also assumed mortgage indebtedness, unsecured
notes and a line of credit of approximately $1.2 billion, issued OP Units having
a value of approximately $205.2 million and issued Junior Convertible Preference
Units having a value of approximately $4.8 million. The cash portion of these
acquisitions were primarily funded from amounts drawn on the Operating
Partnership's lines of credit and proceeds received in connection with the
transactions mentioned in the previous paragraphs.
In December 1997, the Operating Partnership entered into a joint venture
agreement with a multifamily residential real estate developer whereby the
Operating Partnership will make investments in a limited partnership to fund its
portion of the project cost. During 1998, the Operating Partnership funded a
total of $23.9 million in connection with this agreement.
In regards to certain other properties that were under development and/or
expansion in 1998, the Operating Partnership funded $31.6 million.
In regards to certain properties that were under earnout/development
agreements in 1998, no amounts were funded.
As of December 31, 1998, the Operating Partnership had total indebtedness
of approximately $4.7 billion, which included mortgage indebtedness of $2.3
billion (including premiums of $4.5 million), of which $878.3 million
represented tax-exempt bond indebtedness, and unsecured debt of $2.3 billion
(net of a $5.3 million discount), of which $35.6 million represented tax-exempt
bond indebtedness. During the year, the Operating Partnership repaid an
aggregate of $63.8 million of mortgage indebtedness on nine of its Properties.
These repayments were funded from the Operating Partnership's line of credit or
from proceeds received from the various capital transactions mentioned in the
previous paragraphs.
YEAR 2000 ISSUE
In prior years, the Operating Partnership discussed the nature and progress
of its plans to become Year 2000 ready. In late 1999, the Operating Partnership
completed its remediation and testing of systems. As a result of those planning
and implementation efforts, the Operating Partnership experienced no significant
disruptions in mission critical information technology and non-information
technology systems and believes those systems successfully responded to the Year
2000 date change. The Operating Partnership expensed approximately $184,000 and
$700,000 during 1999 and 1998, respectively, in connection with remediating its
systems. The Operating Partnership is not aware of any material problems
resulting from Year 2000 issues, either with its products, its internal systems,
or the products and services of third parties. The Operating Partnership will
continue to monitor its mission critical computer applications and those of its
suppliers and vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.
37
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FUNDS FROM OPERATIONS
Commencing in 1996, the Operating Partnership implemented the definition of
FFO adopted by the Board of Governors of NAREIT in March 1995. The definition
primarily eliminates the amortization of deferring financing costs and
depreciation of non-real estate assets as items added back to net income when
calculating FFO.
The Operating Partnership generally considers FFO to be one measure of the
performance of real estate companies. The resolution adopted by the Board of
Governors of NAREIT defines FFO as net income (loss) (computed in accordance
with GAAP), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation on real estate assets, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures are calculated to reflect FFO on the same basis.
The Operating Partnership believes that FFO is helpful to investors as a measure
of the performance of a real estate Operating Partnership because, along with
cash flows from operating activities, financing activities and investing
activities, it provides investors an understanding of the ability of the
Operating Partnership to incur and service debt and to make capital
expenditures. FFO in and of itself does not represent cash generated from
operating activities in accordance with GAAP and therefore should not be
considered an alternative to net income as an indication of the Operating
Partnership's performance or to net cash flows from operating activities as
determined by GAAP as a measure of liquidity and is not necessarily indicative
of cash available to fund cash needs. The Operating Partnership's calculation of
FFO represents net income, excluding gains on dispositions of properties, gains
on early extinguishment of debt, and write-off of unamortized costs on
refinanced debt, plus depreciation on real estate assets and amortization of
deferred financing costs related to EQR's Predecessor Business less an
allocation of net income to preference unit holders. The Operating Partnership's
calculation of FFO may differ from the methodology for calculating FFO utilized
by other companies and, accordingly, may not be comparable to such other
companies.
The Operating Partnership will adopt, effective January 1, 2000, NAREIT's
updated recommended definition of FFO as approved in the fourth quarter of 1999.
For the year ended December 31, 1999, FFO increased $160.8 million
representing a 35% increase when compared to the year ended December 31, 1998.
For the year ended December 31, 1998, FFO increased by $188.1 million
representing a 69.5% increase when compared to the year ended December 31, 1997.
38
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FUNDS FROM OPERATIONS (CONTINUED)
The following is a reconciliation of net income to FFO for the years ended
December 31, 1999, 1998 and 1997 (amounts are in thousands):
<TABLE>
<CAPTION>
------------------------------------------------------------ --- ------------- --- ------------- -- --------------
Year Ended Year Ended Year Ended
12/31/99 12/31/98 12/31/97
------------------------------------------------------------ --- ------------- --- ------------- -- --------------
<S> <C> <C> <C>
Net income $ 423,417 $ 276,735 $ 189,852
Adjustments:
Depreciation on real estate assets* 402,466 296,691 153,526
Amortization of deferred financing costs
related to predecessor business - 35 235
Allocation of net income to preference
unit and interest holders (113,196) (92,917) (59,012)
Loss on early extinguishment of debt 451 - -
Gain on disposition of properties (93,535) (21,703) (13,838)
------------------------------------------------------------ --- ------------- --- ------------- -- --------------
FFO $ 619,603 $ 458,841 $ 270,763
------------------------------------------------------------ --- ------------- --- ------------- -- --------------
</TABLE>
* Includes $1,009,000 and $183,000 related to the Operating Partnership's share
of depreciation from unconsolidated joint ventures and limited partnerships for
the years ended December 31, 1999 and 1998, respectively.
39
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Operating Partnership's future earnings, cash flows and fair values
relevant to financial instruments are dependent upon prevalent market rates.
Market risk is the risk of loss from adverse changes in market prices and
interest rates. The Operating Partnership manages its market risk by matching
projected cash inflows from operating properties, financing activities and
investing activities with projected cash outflows to fund debt payments,
acquisitions, capital expenditures, distributions and other cash requirements.
The Operating Partnership also utilizes certain derivative financial instruments
to limit market risk. Interest rate protection agreements are used to convert
floating rate debt to a fixed rate basis. Derivatives are used for hedging
purposes rather than speculation. The Operating Partnership does not enter into
financial instruments for trading purposes.
The Operating Partnership has total outstanding debt of approximately
$5.5 billion at December 31, 1999, of which approximately $700.9 million, or
12.8%, is floating rate debt, including the effects of any interest rate
protection agreements. If market rates of interest on the Operating
Partnership's floating rate debt increase by 55 basis points (a 10% increase),
the increase in interest expense on the Operating Partnership's floating rate
debt would decrease future earnings and cash flows by approximately $3.9
million. If market rates of interest on the Operating Partnership's floating
rate debt decrease by 55 basis points (a 10% increase), the decrease in interest
expense on the Operating Partnership's floating rate debt would increase future
earnings and cash flows by approximately $3.9 million.
These amounts were determined by considering the impact of hypothetical
interest rates and equity prices on the Operating Partnership's financial
instruments. These analyses do not consider the effects of the reduced level of
overall economic activity that could exist in such an environment. Further, in
the event of a change of such magnitude, management would likely take actions to
further mitigate its exposure to the change. However, due to the uncertainty of
the specific actions that would be taken and their possible effects, this
analysis assumes no changes in the Operating Partnership's financial structure.
40
<PAGE>
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Consolidated Financial Statements on page F-1 of this Form
10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
41
<PAGE>
PART III
ITEMS 10,11,12 AND 13 (PART III) OF THIS FORM 10-K OMIT THE USE OF CERTAIN
DEFINED TERMS USED ELSEWHERE HEREIN AND CONTAIN CERTAIN DEFINED TERMS THAT ARE
DIFFERENT FROM THOSE USED IN THE OTHER SECTIONS OF THIS REPORT.
ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a,b,c,d,e & f) TRUSTEES AND EXECUTIVE OFFICERS
The Operating Partnership does not have any trustees or executive officers.
The trustees and executive officers, as of March 1, 2000, of Equity Residential
Properties Trust (the "Trust"), their ages and their positions and offices are
set forth in the following table:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ -------- ----------------------------------------------------------------
<S> <C> <C>
Samuel Zell 58 Chairman of the Board of Trustees (term expires in 2002)
Douglas Crocker II 59 President, Chief Executive Officer and Trustee
(term expires in 2001)
John W. Alexander 52 Trustee (term expires in 2002)
Stephen O. Evans 54 Trustee (term expires in 2000)
Henry H. Goldberg 61 Trustee (term expires in 2002)
Errol R. Halperin 59 Trustee (term expires in 2002)
James D. Harper, Jr. 66 Trustee (term expires in 2001)
Boone A. Knox 63 Trustee (term expires in 2002)
Edward Lowenthal 55 Trustee (term expires in 2000)
Jeffrey H. Lynford 52 Trustee (term expires in 2000)
Sheli Z. Rosenberg 58 Trustee (term expires in 2001)
Gerald A. Spector 53 Executive Vice President, Chief Operating Officer and Trustee
(term expires in 2001)
Michael N. Thompson 51 Trustee (term expires in 2001)
B. Joseph White 52 Trustee (term expires in 2000)
Leslie B. Fox 41 Executive Vice President and President - Lexford Division
Alan W. George 42 Executive Vice President - Acquisitions/Dispositions and Strategic Business
Development
Edward J. Geraghty 50 Executive Vice President and President - Eastern Division
Michael J. McHugh 44 Executive Vice President, Chief Accounting Officer and Treasurer
David J. Neithercut 44 Executive Vice President and Chief Financial Officer
Gregory H. Smith 48 Executive Vice President and President - Central Division
Bruce C. Strohm 45 Executive Vice President, General Counsel and Secretary
Frederick C. Tuomi 45 Executive Vice President and President - Western Division
</TABLE>
The following is a biographical summary of the experience of the trustees
and executive officers of the Trust. Officers serve at the pleasure of the Board
of Trustees.
Samuel Zell has been Chairman of the Board of the Trust since March 1993.
Since January 1999, Mr. Zell has been chairman of Equity Group Investments, LLC,
an investment company ("EGI LLC"). For more than five years prior to 1999, Mr.
Zell had been chairman of the board of directors of Equity Group Investments,
Inc., an owner, manager and financier of real estate and corporations ("EGI").
He is also chairman of the board of directors of American Classic Voyages Co.,
an owner and operator of cruise lines, Anixter International Inc., a provider of
integrated network and cabling systems
42
<PAGE>
("Anixter"), Manufactured Home Communities, Inc. ("MHC"), a manufactured home
community real estate investment trust ("REIT"), Chart House Enterprises, Inc.,
an owner and operator of restaurants, Capital Trust, Inc., a specialized finance
company ("Capital Trust"), Davel Communications, Inc., an owner and operator of
public payphones, Danielson Holding Corporation, an insurance holding company,
and Equity Office Properties Trust, an office building REIT ("EOP"). He is a
director of Ramco Energy plc, an independent oil company based in the United
Kingdom.
Douglas Crocker II has been Chief Executive Officer, President and a
Trustee of the Trust since March 1993. Mr. Crocker has been a director of
Wellsford Real Properties, Inc. ("WRP"), a publicly traded real estate merchant
banking firm since its formation in June 1997, Ventas, Inc., a real estate
company focusing on the ownership and acquisition of health care properties,
since November 1998, and was a director of Horizon Group Inc., an owner,
developer and operator of outlet retail properties from July 1996 to June 1998.
Mr. Crocker has been president and chief executive officer of First Capital
Financial Corporation, a sponsor of public limited real estate partnerships
("First Capital"), since December 1992, and a director of First Capital since
January 1993. He was an executive vice president of Equity Financial and
Management Company, a subsidiary of EGI, providing strategic direction and
services for EGI's real estate and corporate activities from November 1992 until
March 1997. Mr. Crocker chairs and serves on boards or committees of various
multi-family housing associations, including the National Multi-Housing Council
and the Multifamily Council of the Urban Land Institute, and is a member of the
Board of Governors of the National Association of Real Estate Investment Trusts
("NAREIT").
John W. Alexander has been a Trustee of the Trust since May 1993 and is
the president of Mallard Creek Capital Partners, Inc., an investment company
with interests in real estate and development entities. He is also a partner of
Meringoff Equities, a real estate investment and development company, and is a
member of the International Council of Shopping Centers and the Urban Land
Institute.
Stephen O. Evans has been a Trustee of the Trust since December 23,
1997, the date of the merger of Evans Withycombe Residential, Inc. ("Evans"), a
multifamily property REIT founded by Mr. Evans, into the Trust ("Evans Merger"),
and is President of Evans Realty Associates, a real estate holding company. Mr.
Evans has also served as an Executive Vice President from December 1997 to
December 1999. Prior to the Evans Merger, Mr. Evans served as the chairman of
the board and chief executive officer of Evans since its formation in May 1994.
Mr. Evans is a member of NAREIT, Lambda Alpha, a national land economic
fraternity, and the Urban Land Institute.
Henry H. Goldberg has been a Trustee of the Trust since January 1995.
Mr. Goldberg is chairman of the board, chief executive officer and founder of
The Artery Group, L.L.C., a diversified real estate company. Mr. Goldberg is
also a director of the University of Maryland Foundation.
Errol R. Halperin has been a Trustee of the Trust since May 1993. Mr.
Halperin has been an attorney at the law firm of Piper Marbury Rudnick & Wolfe
and its predecessor since 1979, serving as a senior partner and a member of the
firm's executive committee since 1981 and co-chairman of the firm's Business and
Technology Group since 1999, and a director of Elkay Manufacturing Company, a
plumbing fixtures manufacturer, since 1980. Mr. Halperin specializes in federal
income tax counseling and real estate and corporate transactions.
James D. Harper, Jr. has been a Trustee of the Trust since May 1993.
Mr. Harper is the president of JDH Realty Co., a real estate development and
investment company, and is the principal partner in AH Development, S.E. and AH
HA Investments, S.E., special limited partnerships formed to develop
43
<PAGE>
over 400 acres of land in Puerto Rico. He is a trustee of EOP and a director of
Burnham Pacific Properties Inc., a commercial real estate REIT. Mr. Harper is
also a trustee of the Urban Land Institute.
Boone A. Knox has been a Trustee of the Trust since October 19, 1998,
the date of the merger of Merry Land & Investment Company, Inc. ("Merry Land"),
a multifamily property REIT, into the Trust ("Merry Land Merger"). Mr. Knox has
been a director of Merry Land Properties, Inc. ("MRYP"), a publicly traded
diversified real estate company, since its formation as part of the Merry Land
Merger. Prior to the Merry Land Merger, Mr. Knox had been chairman of the board
of Merry Land since December 1996. Mr. Knox has served as chairman of the board
of directors of Regions Bank, Central Georgia since January 1997, and has been a
director of Cousins Properties, Incorporated, a retail and office building REIT,
since 1969, and of The InterCept Group, Inc., a technology products and services
provider to financial institutions, since February 1998.
Edward Lowenthal has been a Trustee of the Trust since June 1997,
shortly after the merger of Wellsford Residential Property Trust ("Wellsford"),
a multifamily property REIT, and the Trust on May 30, 1997 (the "Wellsford
Merger"). Mr. Lowenthal has been the president, chief executive officer and a
director of WRP since its formation in January 1997, and had been the president
and chief executive officer and a trustee of Wellsford since its formation in
July 1992 until the Wellsford Merger. Mr. Lowenthal is a director of Omega
Healthcare, Inc., a healthcare REIT, Omega Worldwide, Inc., a health care
finance company, and Great Lakes REIT, Inc., an office building REIT. He is also
a member of the Board of Governors of NAREIT and a member of the New York bar.
Jeffrey H. Lynford has been a Trustee of the Trust since June 1997,
shortly after the Wellsford Merger. Mr. Lynford has been the chairman of the
board and secretary of WRP since its formation in January 1997, and had been the
chairman of the board and secretary of Wellsford since its formation in July
1992 until the Wellsford Merger. Mr. Lynford currently serves as a trustee
emeritus of the National Trust for Historic Preservation and as a director of
six mutual funds managed by Cohen & Steers. He is also a trustee of Polytechnic
University, a trustee for Caramoor Center for Music and the Arts, and a member
of the New York bar.
Sheli Z. Rosenberg has been a Trustee of the Trust since March 1993.
Ms. Rosenberg has been vice chairman of EGI, LLC from January 1, 2000 and chief
executive officer and president of EGI LLC from January 1, 1999 to January 1,
2000. From November 1994 until 1999, Ms. Rosenberg had been chief executive
officer, president and a director of EGI. Ms. Rosenberg had been a principal of
the law firm of Rosenberg & Liebentritt, P.C. ("R&L"), from 1980 to 1997. Ms.
Rosenberg is a trustee of EOP and is a director of Capital Trust, MHC, Anixter,
CVS Corporation, a drugstore chain, Dynergy Inc., a supplier of electricity and
natural gas, and Danka Business Systems PLC, an office imaging equipment and
services supplier.
Gerald A. Spector has been a Trustee and Executive Vice President of
the Trust since March 1993 and Chief Operating Officer of the Trust since
February 1995.
Michael N. Thompson has been a Trustee of the Trust since October 19,
1998, the date of the Merry Land Merger. Mr. Thompson has been president, chief
operating officer and a director of MRYP since its formation as part of the
Merry Land Merger. Prior to the Merry Land Merger, Mr. Thompson served as
executive vice president and chief operating officer of Merry Land since
December 1996, and as a vice president of Merry Land from August 1992 until
December 1996.
B. Joseph White has been a Trustee of the Trust since May 1993. Mr.
White has been a professor at the University of Michigan Business School since
1987 and has served as the dean since 1991. Mr. White is a director of Kelly
Services, Inc., a temporary services firm, Gordon Food Service,
44
<PAGE>
Inc., a midwestern food distribution company, Kaydon Corporation, a manufacturer
of precision engineered metal products, and five mutual funds managed by Alger
Management, Inc.
Leslie B. Fox has been Executive Vice President and President - Lexford
Division of the Trust since October 1, 1999, the date of the merger of Lexford
Residential Trust ("Lexford") into the Trust (the "Lexford Merger"). Prior to
the Lexford Merger, Ms. Fox had been executive vice president and chief
operating officer of Lexford since December 1997, and executive vice president -
investment management since June 1997. Ms. Fox was president of Asset Investors
Corporation ("AIC") and Commercial Assets, Incorporated ("CAI"), both publicly
traded REITs, from October 1996 through May 1997, and held senior management
positions with AIC and CAI from November 1993 through September 1996.
Alan W. George has been Executive Vice President -
Acquisitions/Dispositions and Strategic Business Development of the Trust since
February 1997 and was Senior Vice President - Acquisitions of the Trust from
December 1995 until February 1997.
Edward J. Geraghty has been Executive Vice President of the Trust since
March 1998 and President - Eastern Division since April, 1999. Mr. Geraghty was
a managing director - real estate of The Travelers Investment Group, Inc. from
June 1995 to March 1998.
Michael J. McHugh has been an Executive Vice President of the Trust
since January 1998, and Chief Accounting Officer and Treasurer of the Trust
since February 1995. Mr. McHugh was Senior Vice President of the Trust from
February 1995 until January 1998.
David J. Neithercut has been Executive Vice President and Chief
Financial Officer of the Trust since February 1995.
Gregory H. Smith has been Executive Vice President of the Trust since
December 1994 and President - Central Division since April 1999.
Bruce C. Strohm has been Executive Vice President and General Counsel
of the Trust since March 1995 and Secretary of the Trust since November 1995.
Frederick C. Tuomi has been Executive Vice President of the Trust since
January 1994 and President - Western Division since April 1999.
Pursuant to the Trust's declaration of trust, the trustees are divided
into three classes as nearly equal in number as possible, with each class having
a term of three years.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Operating Partnership to
report, based on its review of reports to the SEC, about transactions in its OP
Units furnished to the Operating Partnership and written representation of the
Trust's trustees and executive officers and the Operating Partnership's 10%
owners. There were no such items on which to report during 1999.
45
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Operating Partnership does not have any executive compensation.
Information concerning the Equity Residential Properties Trust's executive
compensation will be contained in its definitive proxy statement relating to the
2000 Annual Meeting of Shareholders to be held on May 16, 2000. Please see this
definitive proxy statement for further discussion.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of March 1, 2000,
(except as otherwise indicated in the footnotes) regarding the beneficial
ownership of the OP Units by each person known by the Operating Partnership to
be the beneficial owner of more than five percent of the Operating Partnership's
outstanding OP Units, and in addition, each trustee of the Trust, the executive
officers of the Trust, and by all trustees and executive officers of the Trust
as a group. Each person named in the table has sole voting and investment power
with respect to all OP Units shown as beneficially owned by such person, except
as otherwise set forth in the notes to the table.
<TABLE>
<CAPTION>
SHARES UPON PERCENT OF
NUMBER OF EXERCISE OF COMMON
NAME COMMON SHARES(1) OPTIONS(2) TOTAL(1) SHARES(1)
------------------------------- -------------------- ----------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Samuel Zell 3,235,723 (3) 480,001 3,715,724 2.85%
Douglas Crocker II 292,505 (4) 770,833 1,063,338 -
John W. Alexander 7,432 30,001 37,433 -
Stephen O. Evans 743,641 (5) 82,001 825,642 -
Henry H. Goldberg 421,146 (6) 20,001 441,147 -
Errol R. Halperin 6,796 (7) 30,001 36,797 -
James D. Harper, Jr. 6,997 30,001 36,998 -
Boone A. Knox 1,432,687 (8) 1,667 1,434,354 1.13%
Edward Lowenthal 103,474 (9) 10,001 113,475 -
Jeffrey H. Lynford 50,680 10,001 60,681 -
Sheli Z. Rosenberg 109,149 (10) 101,667 210,816 -
Gerald A. Spector 194,683 (11) 329,084 523,767 -
Michael N. Thompson 122,257 (12) 1,667 123,924 -
B. Joseph White 6,636 25,001 31,637 -
Edward J. Geraghty 25,248 48,999 74,247 -
Alan W. George 35,317 102,499 137,816 -
David J. Neithercut 24,940 (13) 180,374 205,314 -
Trustees and Executive
Officers as a
Group (22 persons) 6,995,607 2,616,877 9,612,484 7.22%
------------------------------- -------------------- ----------------- ------------------- ----------------
</TABLE>
- - Less than 1%.
(1) In accordance with SEC regulations, assumes that all OP units,
convertible preference units in the Operating Partnership and the Trust's
convertible preferred shares of beneficial interest held by the person
are exchanged for common shares, that none of the OP units, convertible
preference units or convertible shares held by other persons are so
exchanged, and that no options to acquire common shares held by other
persons are exercised.
46
<PAGE>
(2) Reflects common shares which may be acquired within 60 days after March
1, 2000 through the exercise of share options.
(3) Includes 2,431,350 OP units which are exchangeable on a one-for-one basis
into 2,431,350 common shares. Also includes 30,000 common shares
beneficially owned by the Zell Family Foundation. Mr. Zell disclaims
beneficial ownership of 567,256 common shares (including the 30,000
common shares held by the Zell Family Foundation and assuming the
exchange of 537,256 OP units) because the economic benefits with respect
to such common shares are attributable to other persons.
(4) Includes 8,825 common shares beneficially owned by Mr. Crocker's spouse,
as to which Mr. Crocker disclaims beneficial ownership. Also includes
175,000 common shares beneficially owned by MWC Partners, L.P. ("MWC"),
of which Mr. Crocker is the sole general partner. The sole limited
partner of MWC is a trust created for the benefit of Mr. Crocker's wife
and Mr. Crocker's children.
(5) Includes 739,753 OP units which are exchangeable on a one-for-one basis
into 739,753 common shares.
(6) Includes 182,269 OP units held by Mr. Goldberg, which are exchangeable on
a one-for-one basis into 182,269 common shares; 14,460 Junior Convertible
Preference Units which are exchangeable into 29,509 common shares; 6,047
Junior Convertible Preference Units which are exchangeable into 12,340
common shares; and 179,632 common shares held by Goldberg Investment
Limited Partnership ("GILP"). Mr. Goldberg is the sole limited partner of
GILP and the sole shareholder of Goldberg Investment, Inc. ("GII"), which
is the sole general partner of GILP.
(7) Includes 1,000 common shares beneficially owned by Mr. Halperin's spouse,
as to which Mr. Halperin disclaims beneficial ownership.
(8) Includes 1,173,949 common shares beneficially owned by Knox, Ltd., of
which Mr. Knox is the general partner, and includes 3,387 common shares
beneficially owned by BT Investments, of which Mr. Knox is the managing
partner. Mr. Knox disclaims beneficial ownership of the common shares
owned by Knox, Ltd. and BT Investments, except to the extent of his
pecuniary interest in 151,116 common shares. Also includes 3,114 common
shares beneficially owned by Mr. Knox's spouse and 424 common shares
beneficially owned by Mr. Knox, not individually, but as custodian for
his niece and nephew, as to all of which Mr. Knox disclaims beneficial
ownership. Also includes 167,881 common shares beneficially owned by the
Knox Foundation, of which Mr. Knox is the trustee. Mr. Knox disclaims
beneficial ownership of the common shares owned by the Knox Foundation.
(9) Includes 49,178 common shares beneficially owned by Mr. Lowenthal's
spouse, as to which Mr. Lowenthal disclaims beneficial ownership.
(10) Includes 16,200 common shares beneficially owned by Ms. Rosenberg's
spouse, as to which Ms. Rosenberg disclaims beneficial ownership. Also
includes 1,528 OP units which are exchangeable on a one-for-one basis
into 1,528 common shares.
(11) Includes 35,647 common shares beneficially owned by Mr. Spector's spouse,
and 2,337 common shares beneficially owned by Mr. Spector as custodian
for his minor children, as to all of which Mr. Spector disclaims
beneficial ownership. Also includes 1,683 OP units which are exchangeable
on a one-for-one basis into 1,683 common shares.
47
<PAGE>
(12) Includes 419 common shares beneficially owned by Mr. Thompson's children
and 2,648 common shares beneficially owned by Mr. Thompson's spouse, as
to all of which Mr. Thompson disclaims beneficial ownership.
(13) Includes 2,000 common shares and 1,112 Series E Convertible Preferred
Shares beneficially owned by Mr. Neithercut's children, as to all of
which Mr. Neithercut disclaims beneficial ownership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Pursuant to the terms of the partnership agreement for the
Operating Partnership, the Operating Partnership is required to reimburse the
Trust for all expenses incurred by the Trust in excess of income earned by the
Trust through its indirect 1% ownership of various Financing Partnerships and
LLC's. Amounts paid on behalf of the Trust are reflected in the Consolidated
Statements of Operations as general and administrative expenses.
EGI or certain of its affiliated entities provide the Trust with
certain services with respect to certain aspects of the Trust's business,
including, but not limited to, real estate tax evaluation services, and office
facility services. The Audit Committee annually reviews the rates charged by EGI
for services rendered to the Trust. Amounts incurred for these services amounted
to approximately $708,600 for the year ended December 31, 1999.
(b) The Trust has engaged Seyfarth, Shaw, Fairweather & Geraldson, a
law firm in which Ms. Rosenberg's husband is a partner, and Piper Marbury
Rudnick & Wolfe, a law firm in which Mr. Halperin is a partner, to perform legal
services for the Trust and certain of its subsidiaries from time to time.
The Trust occupies office space at various office buildings which are
owned and/or managed by EOP and its affiliates. Amounts incurred for such office
space in 1999 were $1,455,036. Multifamily residential communities owned by
various affiliates of Mr. Zell, Mr. Goldberg and Mr. Evans are also managed by
the Trust. The Trust received approximately $2.4 million in property and asset
management fees from such affiliates for the year ended December 31, 1999.
(c) Mr. Goldberg is a two-thirds owner and chairman of the board of
directors of Artery Property Management, Inc., a real estate property management
company ("APMI"). In connection with the acquisition of certain properties from
Mr. Goldberg and his affiliates during 1995, the Operating Partnership made a
loan to Mr. Goldberg and APMI of $15,212,000 evidenced by two notes and secured
by OP units. The largest aggregate amount of indebtedness outstanding under the
loan at any time during 1999 was $14,558,484 and the amount outstanding as of
December 31, 1999 was $6,167,117. The first note issued in the amount of
$1,056,000 accrued interest at the prime rate plus 3 1/2 % per annum and was
repaid in full in October 1999. The second note issued in the amount of
$14,156,000 bears interest equal to approximately $130,695 per year plus the
amount of distributions payable on the remaining OP units and common shares
pledged as collateral for the loan. As of December 31, 1999, the loan was
secured by 64,948 OP Units owned by Mr. Goldberg and 123,792 common shares owned
by Goldberg Investment Limited Partnership, a partnership controlled by Mr.
Goldberg. This loan matures on November 30, 2004.
In connection with the agreement to acquire certain properties from Mr.
Goldberg and his affiliates, the Operating Partnership extended a $12,000,000
non-revolving line of credit to Mr. Goldberg and his wife in September 1998. The
loan bore interest at the prime rate plus 2%. The largest principal amount owed
in 1999 was $5,272,432. The loan was repaid in full in October 1999.
48
<PAGE>
During 1999, the Operating Partnership acquired eight properties and
the related management agreements from affiliates of Mr. Goldberg for an
aggregate purchase price of approximately $110.2 million, including the
assumption of approximately $44.3 million of mortgage indebtedness. The purchase
price also included the issuance of 28,795 Series A Junior Convertible
Preference Units in the Operating Partnership, which have a liquidation value of
$100 and are exchangeable for OP Units upon certain circumstances. On June 29,
1999, Mr. Goldberg received 8,462 of these units with a liquidation value of
approximately $0.8 million.
Mr. Tuomi borrowed $100,000 from the Trust in 1994 related to his
purchase of a home. The loan bears interest at the 30-day London Interbank
Offered Rate ("LIBOR") plus 2% with interest due quarterly. The largest
principal amount owed in 1999 was $54,000 and the principal balance at December
31, 1999 was $36,000. The loan is payable in equal principal installments of
$18,000 over the next two years.
Mr. Crocker borrowed $564,000 from the Trust in August 1996. The loan
bears interest at 30-day LIBOR plus 2% with interest due quarterly. The largest
principal amount owed in 1999 was $402,850 and the principal balance at December
31, 1999 was $322,280. Payment is secured by a pledge of Mr. Crocker's common
shares. The loan is payable in equal principal installments of $80,570 over
seven years commencing March 15, 1997.
Mr. Crocker borrowed $100,000 from the Trust in August 1998 related to
the payment of a tax liability. The loan bears interest at 30-day LIBOR plus 2%.
The largest principal amount owed in 1999, and the principal balance at December
31, 1999, was $100,000. The loan was repaid in full in February 2000.
Mr. Crocker borrowed $600,000 from an affiliate of the Trust in May
1999. The loan bears interest at 30-day LIBOR plus 2%. The largest principal
amount owed in 1999, and the principal balance due at December 31, 1999, was
$600,000. The loan is due in full in September 2001.
Mr. Spector borrowed $105,000 from an affiliate of the Trust in
December 1998 related to the payment of a partnership interest expense. The loan
was repaid in full in May 1999. The loan bore interest at 30-day LIBOR plus 2%.
Mr. Spector borrowed $258,000 from an affiliate of the Trust in
December 1998 related to the payment of a tax liability. The loan was repaid in
full in May 1999. The loan bore interest at 30-day LIBOR plus 2%.
Mr. Geraghty borrowed $325,000 from an affiliate of the Trust on
September 9, 1999 related to his purchase of a home in Atlanta. The loan was due
in full upon the earlier to occur of the sale of his home in Chicago or one year
from the date of the loan. The loan was repaid in full on September 11, 1999.
The loan bore interest at 30-day LIBOR plus 2%.
Mr. George borrowed $100,000 from the Trust in December 1997 related to
home improvements. The loan bears interest at 30-day LIBOR plus 2% with interest
due monthly beginning in January 1998. The largest principal amount owed in 1999
was $100,000, and the principal balance due at December 31, 1999, was $69,657.
Payment is secured by a pledge of Mr. George's common shares and share options
and a second mortgage on Mr. George's home. Remaining payments of principal are
due in the amount of $30,000 on April 1, 2000 and $39,657 on April 1, 2001.
The executive officers listed below are indebted to the Trust as a
result of purchasing common shares from the Trust in June 1994. The loans accrue
interest, payable quarterly in arrears, at the
49
<PAGE>
applicable federal rate, as defined in the Code in effect at the date of each
loan. The loans are due and payable on the first to occur of the date in which
the individual leaves the Trust, other than by reason of death or disability, or
the respective loan's due date. The due dates of the loans range from August
2000 to August 2004. The loans are recourse to the respective individuals and
are collateralized by a pledge of the common shares purchased. All distributions
paid on pledged common shares in excess of the then marginal tax rate on the
taxable portion of such distributions are used to pay interest and principal on
the loans.
<TABLE>
<CAPTION>
LARGEST PRINCIPAL PRINCIPAL
AMOUNT OWED BALANCE AT INTEREST
NAME IN 1999 DEC. 31, 1999 RATE
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Douglas Crocker II $ 770,846 $ 716,504 6.21%
Douglas Crocker II 894,529 847,486 6.15%
Douglas Crocker II 929,073 909,391 7.26%
Douglas Crocker II 1,809,597 1,734,509 7.93%
Frederick C. Tuomi 312,843 312,843 7.26%
Alan W. George 78,081 74,287 7.26%
</TABLE>
(d) None
50
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a)
(1 & 2) See Index to Financial Statements and Schedule on page F-1 of
this Form 10-K.
(3) Exhibits:
<TABLE>
<S> <C>
4.1* Indenture, dated as of May 16, 1994, by and among the Operating
Partnership, as obligor, EQR, as guarantor and The First National Bank
of Chicago, as trustee in connection with 8 1/2% senior notes due May
15, 1999.
4.2* Indenture, dated October 1, 1994, between the Operating Partnership, as
obligor and The First National Bank of Chicago, as trustee.
10.1** Fifth Amended and Restated Agreement of Limited Partnership of ERP
Operating Limited Partnership.
10.2*** Form of Property Management Agreement (REIT properties).
10.3* Form of Property Management Agreement (Non-REIT properties).
10.4+ Amended and Restated Master Reimbursement Agreement, dated as of
November 1, 1996 by and between Federal National Mortgage Association
and EQR-Bond Partnership.
10.5+++ Revolving Credit Agreement dated as of August 12, 1999 among the
Operating Partnership, the Banks listed therein, Bank of America,
National Association, as administrative agent, The Chase Manhattan
Bank, as syndication agent, Morgan Guaranty Trust Company of New York,
as documentation agent, Bank of America Securities LLC, as joint lead
arranger, and Chase Securities Inc., as joint lead arranger.
10.6+++ First Amendment to Revolving Credit Agreement dated November 10, 1999
between the Operating Partnership, Bank of America, National
Association, as administrative agent, The Chase Manhattan Bank, as
syndication agent, Morgan Guaranty Trust Company of New York, as
documentation agent and the Banks listed as signatories thereto.
10.7++ Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership of Evans Withycombe Residential, LP.
10.8+++ Amended and Restated Limited Partnership Agreement of Lexford
Properties, L.P.
12 Computation of Ratio of Earnings to Fixed Charges
21 List of Subsidiaries of ERP Operating Limited Partnership
23.1 Consent of Ernst & Young LLP
24.1 Power of Attorney for James D. Harper, Jr. dated February 29, 2000
24.2 Power of Attorney for Errol R. Halperin dated February 29, 2000
24.3 Power of Attorney for John W. Alexander dated March 13, 2000
24.4 Power of Attorney for B. Joseph White dated March 9, 2000
24.5 Power of Attorney for Henry H. Goldberg dated March 1, 2000
24.6 Power of Attorney for Jeffrey H. Lynford dated March 1, 2000
24.7 Power of Attorney for Edward Lowenthal dated March 2, 2000
24.8 Power of Attorney for Stephen O. Evans dated March 2, 2000
24.9 Power of Attorney for Boone A. Knox dated February 29, 2000
24.10 Power of Attorney for Michael N. Thompson dated March 6, 2000
27 Financial Data Schedule
</TABLE>
* Included as an exhibit to the Operating Partnership's Form 10/A, dated
December 12, 1994, File No. 0-24920, and incorporated herein by
reference.
** Included as an exhibit to the Operating Partnership's Form 8-K/A dated
July 23, 1998, filed on August 18, 1998.
*** Included as an exhibit to EQR's Form S-11 Registration Statement, File
No. 33- 63158, and incorporated herein by reference.
51
<PAGE>
+ Included as an exhibit to the Operating Partnership's Form 10-K for the
year ended December 31, 1996.
++ Included as an exhibit to the Operating Partnership's Form 10-K for the
year ended December 31, 1997.
+++ Included as an exhibit to EQR's Form 10-K for the year ended December
31, 1999 and incorporated herein by reference.
(b) Reports on Form 8-K:
A Report on Form 8-K dated October 1, 1999 and filed on October 5, 1999,
reporting the closing of the merger between Equity Residential Properties Trust
and Lexford Residential Trust.
A Report on Form 8-K dated and filed on December 3, 1999, disclosing additional
financial information of Lexford Residential Trust as of September 30, 1999.
(c) Exhibits:
See Item 14(a)(3) above.
(d) Financial Statement Schedules:
See Index to Financial Statements attached hereto on page F-1 of this
Form 10-K.
52
<PAGE>
PART IV
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
behalf by the undersigned thereunto duly authorized.
ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL PROPERTIES TRUST,
ITS GENERAL PARTNER
<TABLE>
<S> <C> <C>
Date: March 13, 2000 By: /s/ DOUGLAS CROCKER II
-------------- ---------------------------------------------
Douglas Crocker II
President, Chief Executive Officer,
Trustee and *Attorney-in-Fact
Date: March 13, 2000 By: /s/ DAVID J. NEITHERCUT
-------------- ---------------------------------------------
David J. Neithercut
Executive Vice President and
Chief Financial Officer
Date: March 13, 2000 By: /s/ MICHAEL J. MCHUGH
-------------- ---------------------------------------------
Michael J. McHugh
Executive Vice President, Chief Accounting
Officer, Treasurer and *Attorney-in-fact
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Date: March 13, 2000 By: /s/ SAMUEL ZELL
--------------- ----------------------------------------------
Samuel Zell
Chairman of the Board of Trustees
Date: March 13, 2000 By: /s/ GERALD A. SPECTOR
-------------- ----------------------------------------------
Gerald A. Spector
Executive Vice President, Chief
Operating Officer and Trustee
Date: March 13, 2000 By: /s/ SHELI Z. ROSENBERG
-------------- ----------------------------------------------
Sheli Z. Rosenberg
Trustee
</TABLE>
53
<PAGE>
SIGNATURES-CONTINUED
<TABLE>
<S> <C> <C>
Date: March 13, 2000 By: /s/ JAMES D. HARPER *
-------------- ----------------------------------------------
James D. Harper
Trustee
Date: March 13, 2000 By: /s/ ERROL R. HALPERIN *
-------------- ----------------------------------------------
Errol R. Halperin
Trustee
Date: March 13, 2000 By: /s/ JOHN W. ALEXANDER *
-------------- ----------------------------------------------
John W. Alexander
Trustee
Date: March 13, 2000 By: /s/ B. JOSEPH WHITE *
-------------- ----------------------------------------------
B. Joseph White
Trustee
Date: March 13, 2000 By: /s/ HENRY H. GOLDBERG *
-------------- ----------------------------------------------
Henry H. Goldberg
Trustee
Date: March 13, 2000 By: /s/ JEFFREY H. LYNFORD *
-------------- ----------------------------------------------
Jeffrey H. Lynford
Trustee
Date: March 13, 2000 By: /s/ EDWARD LOWENTHAL *
-------------- ----------------------------------------------
Edward Lowenthal
Trustee
Date: March 13, 2000 By: /s/ STEPHEN O. EVANS *
-------------- ----------------------------------------------
Stephen O. Evans
Trustee
Date: March 13, 2000 By: /s/ BOONE A. KNOX *
-------------- ----------------------------------------------
Boone A. Knox
Trustee
Date: March 13, 2000 By: /s/ MICHAEL N. THOMPSON *
-------------- ----------------------------------------------
Michael N. Thompson
Trustee
</TABLE>
* By: /s/ MICHAEL J. MCHUGH
--------------------------------
Michael J. McHugh,
as Attorney-in-fact
54
<PAGE>
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
ERP OPERATING LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Auditors........................................................ F-2
Consolidated Balance Sheets as of
December 31, 1999 and 1998........................................................ F-3
Consolidated Statements of Operations for
the years ended December 31, 1999, 1998 and 1997.................................. F-4
Consolidated Statements of Cash Flows for
the years ended December 31, 1999, 1998 and 1997.................................. F-5 to F-7
Consolidated Statements of Partners' Capital
for the years ended December 31, 1999, 1998 and 1997.............................. F-8
Notes to Consolidated Financial Statements............................................ F-9 to F-43
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III - Real Estate and Accumulated Depreciation............................... S-1 to S-21
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Partners
ERP Operating Limited Partnership
We have audited the accompanying consolidated balance sheets of ERP Operating
Limited Partnership (the "Operating Partnership") as of December 31, 1999 and
1998, and the related consolidated statements of operations, partners' capital
and cash flows for each of the three years in the period ended December 31,
1999. Our audits also included the financial statement schedule listed in the
Index at Item 14(a). These financial statements are the responsibility of the
Operating Partnership's management. Our responsibility is to express an opinion
on these financial statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of ERP
Operating Limited Partnership at December 31, 1999 and 1998, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 16, 2000
except for Note 22, as to which the date is
March 20, 2000
F-2
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Investment in real estate
Land $ 1,550,378 $ 1,326,148
Depreciable property 10,670,550 9,519,579
Construction in progress 18,035 96,336
------------ ------------
12,238,963 10,942,063
Accumulated depreciation (1,070,487) (718,491)
------------ ------------
Investment in real estate, net of accumulated depreciation 11,168,476 10,223,572
Real estate held for disposition 12,868 29,886
Cash and cash equivalents 29,117 3,965
Investment in mortgage notes, net 84,977 88,041
Rents receivable 1,731 4,758
Deposits - restricted 111,270 69,339
Escrow deposits - mortgage 75,328 68,725
Deferred financing costs, net 33,968 27,569
Other assets 197,954 184,405
------------ ------------
TOTAL ASSETS $ 11,715,689 $ 10,700,260
============ ============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage notes payable $ 2,883,583 $ 2,341,011
Notes, net 2,290,285 2,049,516
Lines of credit 300,000 290,000
Accounts payable and accrued expenses 102,955 100,926
Accrued interest payable 44,257 46,176
Rents received in advance and other liabilities 74,196 54,616
Security deposits 39,687 37,439
Distributions payable 18,813 18,755
------------ ------------
Total liabilities 5,753,776 4,938,439
------------ ------------
Commitments and contingencies
Partners' capital:
Junior Convertible Preference Units 7,896 4,833
------------ ------------
Cumulative Convertible Redeemable Preference Interests 40,000 -
------------ ------------
Cumulative Convertible or Redeemable Preference Units 1,310,266 1,410,574
------------ ------------
General Partner 4,194,668 3,919,873
Limited Partners 409,083 426,541
------------ ------------
Total General Partner and Limited Partners capital 4,603,751 4,346,414
------------ ------------
Total partners' capital 5,961,913 5,761,821
------------ ------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 11,715,689 $ 10,700,260
============ ============
</TABLE>
SEE ACCOMPANYING NOTES
F-3
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER OP UNIT DATA)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------
1999 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
REVENUES
Rental income $ 1,711,738 $1,293,560 $707,733
Fee and asset management 4,970 5,622 5,697
Interest income - investment in mortgage notes 12,559 18,564 20,366
Interest and other income 23,851 19,250 13,282
----------- ---------- --------
Total revenues 1,753,118 1,336,996 747,078
----------- ---------- --------
EXPENSES
Property and maintenance 414,026 326,733 176,075
Real estate taxes and insurance 171,289 126,009 69,520
Property management 61,626 53,101 26,793
Fee and asset management 3,587 4,279 3,364
Depreciation 408,688 301,869 156,644
Interest:
Expense incurred 337,189 246,585 121,324
Amortization of deferred financing costs 4,084 2,757 2,523
General and administrative 22,296 20,631 14,821
----------- ---------- --------
Total expenses 1,422,785 1,081,964 571,064
----------- ---------- --------
Income before gain on disposition of properties, net
and extraordinary item 330,333 255,032 176,014
Gain on disposition of properties, net 93,535 21,703 13,838
----------- ---------- --------
Income before extraordinary item 423,868 276,735 189,852
Loss on early extinguishment of debt (451) - -
----------- ---------- --------
Net income 423,417 276,735 189,852
=========== ========== ========
ALLOCATION OF NET INCOME
Junior Convertible Preference Units $ 349 $ - $ -
=========== ========== ========
Cumulative Convertible Redeemable Preference Interests $ 836 $ - $ -
=========== ========== ========
Cumulative Convertible or Redeemable Preference Units $ 112,011 $ 92,917 $ 59,012
=========== ========== ========
General Partner $ 280,685 $ 165,289 $117,580
Limited Partners 29,536 18,529 13,260
----------- ---------- --------
Net income available to OP Unit holders $ 310,221 $ 183,818 $130,840
=========== ========== ========
Weighted average OP Units outstanding 135,001 111,713 73,182
=========== ========== ========
Net income per OP Unit - basic $ 2.30 $ 1.65 $ 1.79
=========== ========== ========
Net income per OP Unit - diluted $ 2.29 $ 1.63 $ 1.76
=========== ========== ========
</TABLE>
SEE ACCOMPANYING NOTES
F-4
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
1999 1998 1997
-----------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 423,417 $ 276,735 $ 189,852
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Depreciation 408,688 301,869 156,644
Amortization of deferred financing costs 4,084 2,757 2,523
Amortization of discounts and premiums on debt (2,322) (1,958) (353)
Amortization of treasury locks and options on debt 987 1,649 818
Amortization of discount on investment in mortgage notes (1,165) (3,015) (3,100)
Gain on disposition of properties, net (93,535) (21,703) (13,838)
Compensation paid with Company Common Shares 9,625 803 2,325
CHANGES IN ASSETS AND LIABILITIES:
Decrease (increase) in rents receivable 3,559 (1,456) (1,373)
(Increase) in deposits - restricted (9,953) (13,147) (23,183)
Decrease (increase) in other assets 47,670 (8,787) (13,708)
(Decrease) increase in accounts payable and accrued expenses (5,610) (3,601) 20,235
(Decrease) increase in accrued interest payable (6,387) 7,546 12,224
Increase (decrease) in rents received in advance and other
liabilities 7,963 (2,077) 12,112
(Decrease) increase in security deposits (1,802) 7,598 7,819
--------- ----------- -----------
Net cash provided by operating activities 785,219 543,213 348,997
--------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate, net (632,474) (990,728) (1,190,933)
Improvements to real estate (134,716) (90,608) (50,246)
Additions to non-real estate property (7,219) (11,412) (9,754)
Interest capitalized for real estate under construction (1,493) (1,620) -
Proceeds from disposition of real estate, net 329,342 174,796 35,758
Decrease (increase) in investment in mortgage notes 4,229 2,853 (86,367)
(Increase) decrease in deposits on real estate acquisitions, net (25,563) (18,451) 7,946
Decrease (increase) in mortgage deposits 11,117 (20,499) (25,521)
Investment in limited partnerships (40,480) (23,946) (6,900)
Decrease in mortgage receivables 7,150 - -
Purchase of management contract rights (285) (119) (5,000)
Costs related to Mergers (18,274) (50,139) (176,908)
Other investing activities (14,885) (17,501) (44,465)
--------- ----------- -----------
Net cash (used for) investing activities (523,551) (1,047,374) (1,552,390)
--------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES
F-5
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
1999 1998 1997
------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan and bond acquisition costs $ (9,522) $ (9,021) $ (11,617)
MORTGAGE NOTES PAYABLE:
Proceeds 204,986 223,491 16,460
Lump sum payoffs (105,846) (63,785) (113,389)
Monthly principal payments (21,147) (12,624) (7,157)
NOTES, NET:
Proceeds 298,014 542,227 348,303
Payoffs (152,266) (120,000) (100,000)
LINES OF CREDIT:
Proceeds 1,372,000 859,000 442,500
Repayments (1,388,383) (881,000) (207,500)
Proceeds from treasury locks and options on debt 1,380 8,130 -
Capital Contributions from General Partner, net 37,842 427,365 522,539
Distributions to General Partner for Common Shares
repurchased and retired
(6,252) (94,705) -
Proceeds from sale of preference units/interests, net 39,000 - 491,250
Distributions paid to partners (514,916) (404,519) (292,082)
Principal receipts on employee notes, net 203 272 110
Principal receipts on other notes receivable, net 8,391 - -
----------- --------- -----------
Net cash (used for) provided by financing activities (236,516) 474,831 1,089,417
----------- --------- -----------
Net increase (decrease) in cash and cash equivalents 25,152 (29,330) (113,976)
Cash and cash equivalents, beginning of year 3,965 33,295 147,271
----------- --------- -----------
Cash and cash equivalents, end of year $ 29,117 $ 3,965 $ 33,295
=========== ========= ===========
SUPPLEMENTAL INFORMATION:
Cash paid during the year for interest $ 341,936 $ 234,318 $ 109,100
=========== ========= ===========
Mortgage loans assumed and/or entered into through
acquisitions of real estate $ 69,885 $ 459,820 $ 597,245
=========== ========= ===========
Net real estate contributed in exchange for OP Units or Junior
Convertible Preference Units $ 28,232 $ 169,834 $ 191,329
=========== ========= ===========
Mortgage loans assumed by purchaser in real estate dispositions $ (12,500) $ - $ -
=========== ========= ===========
Transfers to real estate held for disposition $ 12,868 $ 29,886 $ -
=========== ========= ===========
</TABLE>
SEE ACCOMPANYING NOTES
F-6
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1999 1998 1997
--------------------------------------------------
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION (Continued):
Investment in mortgage notes converted to investment in
real estate $ - $ 88,184 $ -
=========== ========== ==========
Refinancing of mortgage notes payable in favor of notes, net $ 92,180 $ 35,600 $ -
=========== ========== ==========
Net (assets acquired) liabilities assumed through Mergers $ (15,604) $ 42,955 $ 33,237
=========== ========== ==========
Mortgage loans assumed through Mergers $ 499,654 $ 184,587 $ 333,966
=========== ========== ==========
Unsecured notes assumed through Mergers $ 2,266 $ 461,956 $ 383,954
=========== ========== ==========
Line of credit assumed through Mergers $ 26,383 $ 77,000 $ -
=========== ========== ==========
Valuation of OP Units issued through Mergers $ 181,124 $1,050,878 $1,052,582
=========== ========== ==========
Liquidation value of Preference Units redesignated through
Mergers $ - $ 369,109 $ 157,495
=========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES
F-7
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1999 1998 1997
-------------------------------------------------------
<S> <C> <C> <C>
Accumulated partners' capital, beginning of year $ 5,761,821 $ 3,963,395 $ 1,609,467
CAPITAL CONTRIBUTIONS FROM GENERAL PARTNER:
Issuance of OP Units in connection with Common Share
offerings - 370,459 536,764
Issuance of Preference Units in connection with Preferred
Share offerings - - 491,250
Issuance of OP Units in connection with Mergers 181,124 1,050,878 1,052,582
Redesignation of Preference Units through Mergers - 369,109 157,495
Issuance of OP Units and Junior Convertible Preference Units in
connection with acquisitions 28,232 169,834 191,329
Issuance of Preference Units/Interests in connection with other
offerings 40,000 - -
Distributions to General Partner for Common Shares
repurchased and retired (6,252) (94,705) -
Distributions declared to partners (511,606) (401,595) (251,934)
Net income 423,417 276,735 189,852
Other, net 45,177 57,711 (13,410)
----------- ----------- -----------
Accumulated partners' capital, end of year $ 5,961,913 $ 5,761,821 $ 3,963,395
=========== =========== ===========
ALLOCATION OF PARTNERS' CAPITAL, END OF YEAR:
General Partner $ 4,194,668 $ 3,919,873 $ 2,648,278
=========== =========== ===========
Limited Partners $ 409,083 $ 426,541 $ 273,404
=========== =========== ===========
Junior Convertible Preference Units $ 7,896 $ 4,833 $ -
=========== =========== ===========
Cumulative Convertible Redeemable Preference Interests $ 40,000 $ - $ -
=========== =========== ===========
9 3/8% Series A Cumulative Redeemable Preference Units $ 153,000 $ 153,000 $ 153,000
=========== =========== ===========
9 1/8% Series B Cumulative Redeemable Preference Units $ 125,000 $ 125,000 $ 125,000
=========== =========== ===========
9 1/8% Series C Cumulative Redeemable Preference Units $ 115,000 $ 115,000 $ 115,000
=========== =========== ===========
8.60% Series D Cumulative Redeemable Preference Units $ 175,000 $ 175,000 $ 175,000
=========== =========== ===========
Series E Cumulative Convertible Preference Units $ 99,850 $ 99,925 $ 99,963
=========== =========== ===========
9.65% Series F Cumulative Redeemable Preference Units $ 57,500 $ 57,500 $ 57,500
=========== =========== ===========
7 1/4% Series G Convertible Cumulative Preference Units $ 316,250 $ 316,250 $ 316,250
=========== =========== ===========
7.00% Series H Cumulative Convertible Preference Units $ 3,686 $ 3,914 $ -
=========== =========== ===========
8.82% Series I Cumulative Convertible Preference Units $ - $ 100,000 $ -
=========== =========== ===========
8.60% Series J Cumulative Convertible Preference Units $ 114,980 $ 114,985 $ -
=========== =========== ===========
8.29% Series K Cumulative Redeemable Preference Units $ 50,000 $ 50,000 $ -
=========== =========== ===========
7.625% Series L Cumulative Redeemable Preference Units $ 100,000 $ 100,000 $ -
=========== =========== ===========
</TABLE>
SEE ACCOMPANYING NOTES
F-8
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
ERP Operating Limited Partnership (the "Operating Partnership"), an
Illinois limited partnership, was formed to conduct the multifamily residential
property business of Equity Residential Properties Trust ("EQR"). EQR is a
Maryland real estate investment trust ("REIT") formed on March 31, 1993 and is
the general partner of the Operating Partnership. As used herein, the term
"Company" means EQR, and its subsidiaries, as the survivor of the mergers
between EQR and each of Wellsford Residential Property Trust ("Wellsford") (the
"Wellsford Merger"), Evans Withycombe Residential, Inc. ("EWR") (the "EWR
Merger"), Merry Land & Investment Company, Inc ("MRY") (the "MRY Merger") and
Lexford Residential Trust ("LFT") ("the LFT Merger") (see Note 4).
The Operating Partnership is engaged in the acquisition, disposition,
ownership, management and operation of multifamily properties. As of December
31, 1999, the Operating Partnership owned or had interests in a portfolio of
1,062 multifamily properties containing 225,708 apartment units of which it
controlled a portfolio of 983 multifamily properties containing 214,060
apartment units (individually a "Property" and collectively the "Properties").
The Operating Partnership had an investment in partnership interests (equity
investments) and/or an investment in subordinated mortgages collateralized by
the remaining 79 Properties containing 11,648 units. These properties are
located in 35 states throughout the United States.
The Operating Partnership has formed a series of partnerships (the
"Financing Partnerships") which beneficially own certain Properties that may be
encumbered by mortgage indebtedness. In general, these are structured so that
the Operating Partnership owns a 1% limited partner interest and a 98% general
partner interest in each, with the remaining 1% general partner interest in each
Financing Partnership owned by various qualified REIT subsidiaries wholly owned
by EQR (each a "QRS Corporation"). Rental income from the Properties that are
beneficially owned by a Financing Partnership is used first to service the
applicable mortgage debt and pay other operating expenses and any excess is then
distributed 1% to the applicable QRS Corporation, as the general partner of such
Financing Partnership, and 99% to the Operating Partnership, as the sole 1%
limited partner and as the 98% general partner. The Operating Partnership has
also formed a series of limited liability companies that own certain Properties
(collectively, the "LLC's"). The Operating Partnership is a 99% managing member
of each LLC and a QRS Corporation is a 1% member of each LLC.
2. BASIS OF PRESENTATION
The Wellsford Merger, the EWR Merger, the MRY Merger and the LFT
Merger (collectively, the "Mergers") were treated as purchases in accordance
with Accounting Principles Board Opinion No. 16. The fair value of the
consideration given by the Company in the Mergers was used as the valuation
basis for each of the combinations. The assets acquired and the liabilities
assumed of Wellsford were recorded at their relative fair values as of May 30,
1997 (the "Wellsford Closing Date"). The assets acquired and the liabilities
assumed of EWR were recorded at their relative fair values as of December 23,
1997 (the "EWR Closing Date"). The assets acquired and the liabilities assumed
of MRY were recorded at their relative fair values as of October 19, 1998 (the
"MRY Closing Date"). The assets acquired and the liabilities assumed of LFT were
recorded at their relative fair values as of October 1, 1999 (the "LFT Closing
Date"). The accompanying consolidated statements of operations and cash flows
include the results of the Properties purchased through the Mergers from their
respective closing dates.
Due to the Operating Partnership's ability to control either through
ownership or by contract a series of management limited partnerships and
companies (collectively, the "Management Partnerships" or the
F-9
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
"Management Companies"), the Financing Partnerships, the LLC's, and certain
other entities, each such entity has been consolidated with the Operating
Partnership for financial reporting purposes. In regard to the Management
Companies, the Operating Partnership does not have legal control; however, these
entities are consolidated for financial reporting purposes, the effects of which
are immaterial. Certain reclassifications have been made to the prior year's
financial statements in order to conform to the current year presentation.
Minority interests represented by EQR's indirect 1% interest in various
Financing Partnerships and LLCs are immaterial and have not been accounted for
in the Consolidated Financial Statements. In addition, certain amounts due from
EQR for its 1% interest in the Financing Partnerships has not been reflected in
the Consolidated Balance Sheets since such amounts are immaterial to the
Consolidated Balance Sheets.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) REAL ESTATE ASSETS AND DEPRECIATION
Real estate is recorded at cost less accumulated depreciation less an
adjustment, if any, for impairment. A land value is assigned based on the
purchase price if acquired separately or based on market research if acquired in
a merger or in a single or portfolio acquisition.
For real estate properties to be disposed of, an impairment loss is
recognized when the fair value of the real estate, less the estimated cost to
sell, is less than the carrying amount of the real estate measured at the time
it is certain that the Operating Partnership will sell the property. Real estate
held for disposition is reported at the lower of its carrying amount or its
estimated fair value, less its cost to sell.
Depreciation is computed on a straight-line basis over the estimated
useful lives of the assets. The Operating Partnership uses a 30-year estimated
life for buildings and a five-year estimated life for initial furniture,
fixtures and equipment. Replacements inside a unit such as appliances and
carpeting, are depreciated over a five-year estimated life. Expenditures for
ordinary maintenance and repairs are expensed to operations as incurred and
significant renovations and improvements that improve and/or extend the useful
life of the asset are capitalized over their estimated useful life, generally
five to ten years. Initial direct leasing costs are expensed as incurred as such
expense approximates the deferral and amortization of initial direct leasing
costs over the lease terms. Property sales or dispositions are recorded when
title transfers and sufficient consideration has been received by the Operating
Partnership. Upon disposition, the related costs and accumulated depreciation
are removed from the respective accounts. Any gain or loss on sale of
disposition is recognized in accordance with accounting principles generally
accepted in the United States.
The Operating Partnership classifies Properties under development
and/or expansion and properties in the lease up phase as construction in
progress until construction on the apartment community has been completed and
all certificates of occupancy permits have been obtained. The Operating
Partnership also classifies land relating to construction in progress as land on
its balance sheet. Land associated with construction in progress was $18.5
million and $19.4 million as of December 31, 1999 and 1998, respectively.
(b) CASH AND CASH EQUIVALENTS
The Operating Partnership considers all demand deposits, money market
accounts and investments
F-10
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
in certificates of deposit and repurchase agreements purchased with a maturity
of three months or less, at the date of purchase, to be cash equivalents. The
Operating Partnership maintains its cash and cash equivalents at financial
institutions. The combined account balances at each institution periodically
exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage,
and, as a result, there is a concentration of credit risk related to amounts on
deposit in excess of FDIC insurance coverage. The Operating Partnership believes
that the risk is not significant, as the Operating Partnership does not
anticipate their non-performance.
(c) DEFERRED FINANCING COSTS
Deferred financing costs include fees and costs incurred to obtain the
Operating Partnership's line of credit, long-term financing and costs for
certain interest rate protection agreements. These costs are amortized over the
terms of the related debt. Unamortized financing costs are written-off when debt
is retired before the maturity date. The accumulated amortization of such
deferred financing costs was $11.1 million and $8.2 million at December 31, 1999
and 1998, respectively.
(d) INTEREST RATE PROTECTION AGREEMENTS
The Operating Partnership from time to time enters into interest rate
protection agreements to effectively convert floating rate debt to a fixed rate
basis, as well as to hedge anticipated financing transactions. Net amounts paid
or received under these agreements are recognized as an adjustment to interest
expense when such amounts are incurred or earned. Settlement amounts paid or
received in connection with terminated interest rate protection agreements are
deferred and amortized over the remaining term of the related financing
transaction on the straight-line method. The Operating Partnership believes it
has limited exposure to the extent of non-performance by the counterparties of
each protection agreement since each counterparty is a major U.S. financial
institution, and the Operating Partnership does not anticipate their
non-performance.
(e) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("Statement No. 133").
Statement No. 133 requires recording all derivative instruments as assets or
liabilities measured at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of
derivatives will either be offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized
in earnings. The ineffective portion of a derivative's change in fair value
will be immediately recognized in earnings. The standard's effective date was
deferred by FASB Statement No. 137 to all fiscal quarters of all fiscal years
beginning after June 15, 2000. The Operating Partnership is planning to adopt
the standard once it is effective and does not anticipate that the adoption
will have a material impact on the Operating Partnership's financial
condition and results of operations.
(f) FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Operating Partnership's financial
instruments, including cash and cash equivalents, mortgage notes payable, other
notes payable, lines of credit and other financial instruments, approximate
their carrying or contract values. With respect to the Operating Partnership's
investment in mortgage notes, the fair value as of December 31, 1999 and 1998
was estimated to be approximately $87.0
F-11
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
million and $91.8 million, respectively, compared to the Operating Partnership's
carrying value of $85 million and $88 million, respectively. The estimated fair
value of the Operating Partnership's investment in mortgage notes represents the
estimated net present value based on the expected future property level cash
flows and an estimated current market discount rate.
(g) REVENUE RECOGNITION
Rental income attributable to leases is recorded when due from tenants
and is recognized monthly as it is earned, which is not materially different
than on a straight-line basis. Interest income is recorded on an accrual basis.
(h) LEASE AGREEMENTS
The majority of the leases entered into between a tenant and a
Property for the rental of an apartment unit are year-to-year, renewable upon
consent of both parties on a year-to-year or month-to-month basis.
(i) INCOME TAXES
The Operating Partnership is not liable for Federal income taxes as the
partners recognize their proportionate share of the Operating Partnership income
or loss in their tax returns; therefore, no provision for Federal income taxes
is made in the financial statements of the Operating Partnership. However, the
Operating Partnership is subject to certain state and local income, excise or
franchise taxes. The aggregate cost of land and depreciable property for Federal
income tax purposes as of December 31, 1999 and 1998 was approximately $8.6
billion and $8.5 billion, respectively.
(j) CASH DISTRIBUTIONS AND ALLOCATION OF INCOME (LOSS)
Distributions, profits and losses are generally allocated to the
General Partner and the Limited Partners in proportion to their respective
percentage interests.
(k) USE OF ESTIMATES
In preparation of the Operating Partnership's financial statements
in conformity with accounting principles generally accepted in the United
States, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates.
(l) REPORTABLE SEGMENTS
During the fourth quarter of 1998, the Operating Partnership adopted
Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION ("Statement No. 131"). Statement No.
131 superseded FASB Statement of Financial Accounting Standards No. 14,
FINANCIAL REPORTING FOR SEGMENTS OF A BUSINESS ENTERPRISE ("Statement No. 14").
Statement No. 131 establishes standards for the way that public business
enterprises report information regarding reportable operating segments. The
adoption of Statement No. 131 did not affect the Operating Partnership's results
of operations or financial position.
F-12
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Operating Partnership has one primary reportable business
segment, which consists of investment in rental real estate. The Operating
Partnership's primary business is owning, managing and operating multifamily
residential properties which includes the generation of rental and other related
income through the leasing of apartment units to tenants. The Operating
Partnership also has a segment for corporate level activity including such items
as interest income earned on short-term investments, interest income earned on
investment in mortgage notes, general and administrative expenses, and interest
expense on mortgage notes payable and unsecured note issuances. In addition, the
Operating Partnership has a segment for third party management activity that is
immaterial and does not meet the threshold requirements of Statement No. 131 as
a reportable segment.
The Operating Partnership evaluates performance and allocates resources
primarily based on the rental and other income generated from each property less
property and maintenance expenses, real estate taxes and insurance, and property
management expenses, which is considered net operating income ("NOI"). However,
all other segment measurements are disclosed in the Operating Partnership's
consolidated financial statements, and accordingly the accounting policies of
the reportable segments are the same as those described elsewhere in the Summary
of Significant Accounting Policies.
The Operating Partnership also considers funds from operations
("FFO") to be a primary measure of the performance of real estate companies. The
Operating Partnership believes that FFO is helpful to investors as a measure of
the performance of a real estate company because, along with cash flows from
operating activities, financing activities and investing activities, it provides
investors an understanding of the ability of the Operating Partnership to incur
and service debt and to make capital expenditures. FFO in and of itself does not
represent cash generated from operating activities in accordance with accounting
principles generally accepted in the United States ("GAAP") and therefore should
not be considered an alternative to net income as an indication of the Operating
Partnership's performance or to net cash flows from operating activities as
determined by GAAP as a measure of liquidity and is not necessarily indicative
of cash available to fund cash needs. The Operating Partnership's calculation of
FFO represents net income, excluding gains on dispositions of properties, gains
on early extinguishment of debt, and write-off of unamortized costs on
refinanced debt, plus depreciation on real estate assets and amortization of
deferred financing costs related to EQR's predecessor business, less an
allocation of net income to preference unit holders. The Operating Partnership's
calculation of FFO may differ from the methodology for calculating FFO utilized
by other real estate companies and, accordingly, may not be comparable to such
other companies. The Operating Partnership will adopt, effective January 1,
2000, the National Association of Real Estate Investment Trust's ("NAREIT")
updated recommended definition of FFO as approved in the fourth quarter of 1999.
All revenues are from external customers and no revenues are generated
from transactions with other segments. There are no tenants who contributed 10%
or more of the Operating Partnership's total revenues during 1999, 1998 or 1997.
Interest expense on debt is not allocated to individual Properties, even if the
Properties secure such debt. There is no provision for income taxes as the
Operating Partnership is not liable for Federal income taxes as the partners
recognize their proportionate share of the Operating Partnership income or loss
in their tax returns.
4. BUSINESS COMBINATIONS
In connection with the Wellsford Merger each outstanding common
share of beneficial interest of Wellsford was converted into .625 of a Common
Share of EQR. In addition, Wellsford's Series A Cumulative Convertible Preferred
Shares of Beneficial Interest were redesignated as EQR's 3,999,800 Series E
Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01 par value
per share (the
F-13
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
"Series E Preferred Shares") and Wellsford's Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest were redesignated as EQR's 2,300,000
9.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest,
$0.01 par value per share (the "Series F Preferred Shares").
On the Wellsford Closing Date, 72 Properties containing 19,004 units
and other related assets were acquired for a total purchase price of
approximately $1 billion. The purchase price consisted of 10.8 million Common
Shares issued by EQR with a market value of $443.7 million, the liquidation
value of $157.5 million for the Series E Preferred Shares and the Series F
Preferred Shares, the assumption of mortgage indebtedness and unsecured notes in
the amount of $345 million, the assumption of other liabilities of approximately
$33.5 million and other merger related costs of approximately $23.4 million.
Upon contribution of the net assets by EQR to the Operating Partnership, the
Operating Partnership issued 10.8 million OP Units to EQR. In addition, the
Operating Partnership issued the Series E Cumulative Convertible Preference
Units (see Note 5) and the Series F Cumulative Redeemable Preference Units (see
Note 5).
On the EWR Closing Date, 53 Properties containing 15,331 units and
three Properties under construction or expansion containing 953 units and other
related assets were acquired for a total purchase price of approximately $1.2
billion. In connection with the EWR Merger, as of the EWR Closing Date, each
outstanding common share of beneficial interest of EWR was converted into .50 of
a Common Share of EQR. The purchase price consisted of 10.3 million Common
Shares issued by EQR with a market value of approximately $501.6 million,
issuance of approximately 2.2 million Operating Partnership OP Units in exchange
for approximately 4.4 million EWR Operating Partnership OP Units at a market
value of approximately $107.3 million, the assumption of mortgage indebtedness
and unsecured notes in the amount of $498 million, the assumption of other
liabilities of approximately $28.2 million and other EWR Merger related costs of
approximately $16.7 million. Upon contribution of the net assets by EQR to the
Operating Partnership, the Operating Partnership issued 10.3 million OP Units to
EQR.
In connection with the MRY Merger, each outstanding common share of
beneficial interest of MRY was converted into 0.53 of a Common Share of EQR. In
addition, MRY spun-off certain assets and liabilities to Merry Land Properties,
Inc. ("MRYP Spinco"). As partial consideration for the transfer, the Operating
Partnership extended a $25 million, one year, non-revolving loan to MRYP Spinco
pursuant to a Senior Debt Agreement. As of December 31, 1999, the debt agreement
was no longer outstanding.
In addition, MRY Series A Cumulative Convertible Preferred Shares of
Beneficial Interest were redesignated as EQR's 164,951 Series H Cumulative
Convertible Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series H Preferred Shares"), the MRY Series B Cumulative Convertible
Preferred Shares of Beneficial Interest were redesignated as EQR's 4,000,000
Series I Cumulative Convertible Preferred Shares of Beneficial Interest, $0.01
par value per share (the "Series I Preferred Shares"), the MRY Series C
Cumulative Convertible Preferred Shares of Beneficial Interest were redesignated
as EQR's 4,599,400 Series J Cumulative Convertible Preferred Shares of
Beneficial Interest, $0.01 par value per share (the "Series J Preferred
Shares"), the MRY Series D Cumulative Redeemable Preferred Shares of Beneficial
Interest were redesignated as EQR's 1,000,000 Series K Cumulative Redeemable
Preferred Shares of Beneficial Interest, $0.01 par value per share (the "Series
K Preferred Shares") and the MRY Series E Cumulative Redeemable Preferred Shares
of Beneficial Interest were redesignated as EQR's 4,000,000 Series L Cumulative
Redeemable Preferred Shares of Beneficial Interest, $0.01 par value per share
(the "Series L Preferred Shares").
On the MRY Closing Date, 108 Properties containing 32,315 units,
three Properties under construction or expansion expected to contain 872 units,
six Additional Properties that represent an
F-14
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
investment in six joint ventures containing 1,297 units and other related assets
were acquired for a total purchase price of approximately $2.2 billion. The
purchase price consisted of 21.8 million Common Shares issued by EQR with a
market value of approximately $1 billion, issuance of approximately 0.9 million
Operating Partnership OP Units in exchange for approximately 1.6 million Merry
Land DownREIT I LP units at a market value of approximately $40.2 million, the
liquidation value of $369.1 million for the Series H Preferred Shares, the
Series I Preferred Shares, the Series J Preferred Shares, the Series K Preferred
Shares and the Series L Preferred Shares, the assumption of mortgage
indebtedness, unsecured notes and a line of credit in the amount of $723.5
million, the assumption of other liabilities of approximately $46.5 million and
other merger related costs of approximately $51.9 million. Upon contribution of
the net assets by EQR to the Operating Partnership, the Operating Partnership
issued 21.8 million OP Units to EQR. In addition, the Operating Partnership
issued the Series H Cumulative Convertible Preference Units, the Series I
Cumulative Convertible Preference Units, the Series J Cumulative Convertible
Preference Units, the Series K Cumulative Redeemable Preference Units and the
Series L Cumulative Redeemable Preference Units (see Note 5 for additional
information on these issuances).
On the LFT Closing Date, 402 Properties containing 36,609 units and
other related assets were acquired for a total purchase price of approximately
$738 million. In connection with the LFT Merger, each outstanding common share
of beneficial interest of LFT was converted into 0.463 of a Common Share of EQR.
The purchase price consisted of 4.0 million Common Shares issued by EQR with a
market value of $181.1 million, the assumption of mortgage indebtedness, a term
loan and a line of credit in the amount of $528.3 million, the acquisition of
other assets of approximately $40.9 million, the assumption of other liabilities
of approximately $25.3 million and other merger related costs of approximately
$24.5 million. Upon contribution of the net assets by EQR to the Operating
Partnership, the Operating Partnership issued 4.0 million OP Units to EQR.
All of the amounts stated in the previous paragraph are based on
management's current best estimates, which are subject to adjustment within one
year of the closing date.
5. PARTNERS' CAPITAL
As of December 31, 1999 and 1998, OP Units outstanding totaled
139,934,540 and 131,417,938, respectively. The limited partners of the Operating
Partnership as of December 31, 1999 and 1998 include various individuals and
entities that contributed their properties to the Operating Partnership in
exchange for a partnership interest (the "Limited Partners") and are represented
by 12,483,742 and 13,187,929 OP Units, respectively. As of December 31, 1999 and
1998, EQR (as the general partner) had an approximate 91.08% and 89.96%
interest, respectively, and the Limited Partners had an approximate 8.92% and
10.04% interest, respectively, in the Operating Partnership.
In regards to the general partner, net proceeds from the various equity
offerings of EQR, have been contributed by EQR to the Operating Partnership in
return for an increased ownership percentage. Due to the Limited Partners'
ability to convert their interest into an ownership interest in the general
partner, the net offering proceeds are allocated between EQR (as general
partner) and the Limited Partners (to the extent represented by OP Units) to
account for the change in their respective percentage ownership of the equity of
the Operating Partnership.
The following table presents the changes in the Operating
Partnership's issued and outstanding OP Units for the years ended December 31,
1999, 1998 and 1997:
F-15
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Operating Partnership's OP Units outstanding at January 1, 131,417,938 98,677,855 59,013,064
ISSUED TO GENERAL PARTNER:
Conversion of LFT common shares 4,018,717 -- --
January 1998 Common Share Offering -- 4,000,000 --
February 1998 Common Share Offerings -- 1,988,340 --
March 1998 Common Share Offering -- 495,663 --
April 1998 Common Share Offering -- 946,565 --
Conversion of MRY common shares -- 21,801,612 --
March 1997 Common Share Offerings -- -- 1,921,000
June 1997 Common Share Offerings -- -- 8,992,023
September 1997 Common Share Offering -- -- 498,000
October 1997 Common Share Offering -- -- 3,315,500
December 1997 Common Share Offerings -- -- 1,204,018
Conversion of Wellsford common shares -- -- 10,823,016
Conversion of EWR common shares -- -- 10,288,583
Conversion of Series E Preferred Shares 1,669 834 723
Conversion of Series H Preferred Shares 6,580 6,078 --
Conversion of all Series I Preferred Shares 2,566,797 -- --
Conversion of Series J Preferred Shares 122 -- --
Employee Share Purchase Plan 147,885 93,521 84,183
Dividend Reinvestment - DRIP Plan 36,132 10,230 --
Share Purchase - DRIP Plan 22,534 1,023,184 --
Exercise of options 1,013,192 431,174 180,138
Restricted share grants, net 306,500 59,060 28,246
Profit-sharing/401(k) Plan contribution 30,260 15,980 13,140
Common Shares repurchased and retired (148,453) (2,367,400) --
Common Shares other 1,033 (434) (326)
ISSUED TO LIMITED PARTNERS:
Issuance pursuant to MRY Merger -- 866,146 --
Issuance pursuant to EWR Merger -- -- 2,200,418
Issuance through acquisitions 513,634 3,369,539 116,128
OP Units other -- (9) 1
OPERATING PARTNERSHIP'S OP UNITS OUTSTANDING AT DECEMBER 31, 139,934,540 131,417,938 98,677,855
- ------------------------------------------------------------- ---------------------- ----------------------- ---------------------
</TABLE>
On October 12, 1999, EQR repurchased and retired 148,453 Common Shares
previously issued in connection with the LFT Merger. Various LFT employees and
trustees owned these Common Shares. EQR paid approximately $6.3 million in
connection therewith. Concurrent with this transaction, the Operating
Partnership repurchased and retired 148,453 OP Units previously issued to EQR.
In connection with the acquisition of one Property on December 22,
1998, the Operating Partnership issued 48,328 Series A Junior Convertible
Preference Units to certain sellers of these Properties. The Junior Convertible
Preference Units have a stated value of $100 and entitle the holders thereof to
preferential distributions from the Operating Partnership (other than
liquidating distributions) before distributions to the holders of the OP Units
and EQR (provided EQR shall be entitled to receive distributions necessary to
maintain its REIT status under U.S. tax laws).
In connection with the acquisition of two Properties on June 29, 1999,
the Operating Partnership issued 28,795 Series A Junior Convertible Preference
Units to certain sellers of these Properties. The Junior Convertible Preference
Units have a stated value of $100 and entitle the holders thereof to
preferential
F-16
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
distributions from the Operating Partnership (other than liquidating
distributions) before distributions to the holders of the OP Units and EQR
(provided EQR shall be entitled to receive distributions necessary to maintain
its REIT status under U.S. tax laws).
In connection with the acquisition of one Property on July 29, 1999,
the Operating Partnership issued 7,367 Series B Junior Convertible Preference
Units to certain sellers of these Properties. The Junior Convertible Preference
Units have a stated value of $25 and entitle the holders thereof to preferential
distributions from the Operating Partnership (other than liquidating
distributions) before distributions to the holders of the OP Units and EQR
(provided EQR shall be entitled to receive distributions necessary to maintain
its REIT status under U.S. tax laws).
The following table presents the Operating Partnership's issued and
outstanding Junior Convertible Preference Units as of December 31, 1999 and
1998:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL
DIVIDEND
REDEMPTION CONVERSION RATE PER
DATE RATE UNIT (3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Junior Convertible Preference Units:
Series A Junior Convertible Preference Units; liquidation (1) 2.0408 $5.469344
value $100 per unit; 77,123 and 48,328 units issued and
outstanding at December 31, 1999 and 1998, respectively
Series B Junior Convertible Preference Units; liquidation (2) (2) $2.000000
value $25 per unit; 7,367 units issued and outstanding at
December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
AMOUNTS ARE IN THOUSANDS
DECEMBER DECEMBER
31, 1999 31, 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Junior Convertible Preference Units:
Series A Junior Convertible Preference Units; liquidation $ 7,712 $ 4,833
value $100 per unit; 77,123 and 48,328 units issued and
outstanding at December 31, 1999 and 1998, respectively
Series B Junior Convertible Preference Units; liquidation 184 --
value $25 per unit; 7,367 units issued and outstanding at
December 31, 1999
- --------------------------------------------------------------------------------------------------------------------------
$ 7,896 $ 4,833
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) On the fifth anniversary of the respective issuance (the "Redemption
Date"), the Series A Junior Convertible Preference Units shall be
automatically converted into OP Units based upon the conversion rate.
Prior to the Redemption Date, the Operating Partnership or the holders
may elect to convert the Series A Junior Convertible Preference Units
to OP Units under certain circumstances based upon the conversion rate.
(2) On or after the tenth anniversary of the issuance (the "Redemption
Date"), the Series B Junior Convertible Preference Units may be
converted into OP Units at the option of the Operating Partnership
based on the contractual conversion rate. Prior to the Redemption Date,
the holders may elect to convert the Series B Junior Convertible
Preference Units to OP Units under certain circumstances based on the
contractual conversion rate. The contractual conversion rate is based
upon a ratio dependent upon the closing price of EQR's Common Shares.
The current rate at December 31, 1999 was 0.510204.
(3) Dividends on both series of Junior Convertible Preference Units are
payable quarterly at various pay dates.
On September 27, 1999, EQR-Mosaic, L.L.C., a subsidiary of
the Operating Partnership, issued 800,000 units of 8.00% Series A Cumulative
Convertible Redeemable Preference Interests (also referred to as the "Preference
Interests") with an equity value of $40 million. EQR-Mosaic, L.L.C. received $39
million in net proceeds from this transaction. The liquidation value of these
units is
F-17
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
$50 per unit. The 800,000 units are exchangeable into 800,000 shares of 8.00%
Series M Cumulative Redeemable Preferred Shares of Beneficial Interest of EQR.
The Series M Preferred Shares are not convertible to EQR Common Shares.
Dividends for the Series A Preference Interests or the Series M Preferred Shares
are payable quarterly at the rate of $4.00 per unit/share per year.
The following table presents the Operating Partnership's issued and
outstanding Cumulative Convertible or Redeemable Preference Units as of December
31, 1999 and 1998:
F-18
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
----------------------------------------------------------- ------------ ------------ ----------- -------------------------
AMOUNTS ARE IN THOUSANDS
-------------------------
ANNUAL
DIVIDEND
REDEMPTION CONVERSION RATE PER DECEMBER DECEMBER
DATE (1) (2) RATE (2) UNIT (3) 31,1999 31, 1998
----------------------------------------------------------- ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cumulative Convertible or Redeemable Preference Units:
9 3/8% Series A Cumulative Redeemable Preference Units; 6/1/00 N/A $2.34375 $ 153,000 $ 153,000
liquidation value $25 per unit; 6,120,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
9 1/8% Series B Cumulative Redeemable Preference Units; 10/15/05 N/A $22.81252 125,000 125,000
liquidation value $250 per unit; 500,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
9 1/8% Series C Cumulative Redeemable Preference Units; 9/9/06 N/A $22.81252 115,000 115,000
liquidation value $250 per unit; 460,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
8.60% Series D Cumulative Redeemable Preference Units; 7/15/07 N/A $21.50000 175,000 175,000
liquidation value $250 per unit; 700,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
Series E Cumulative Convertible Preference Units; 11/1/98 0.5564 $1.75000 99,850 99,925
liquidation value $25 per unit; 3,994,000 and
3,997,000 units issued and outstanding at
December 31, 1999 and December 31, 1998, respectively
9.65% Series F Cumulative Redeemable Preference Units; 8/24/00 N/A $2.41250 57,500 57,500
liquidation value $25 per unit; 2,300,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
7 1/4% Series G Convertible Cumulative Preference Units; 9/15/02 4.2680 $18.12500 316,250 316,250
liquidation value $250 per unit; 1,265,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
7.00% Series H Cumulative Convertible Preference Units; 6/30/98 0.7240 $1.75000 3,686 3,914
liquidation value $25 per unit; 147,452 and 156,551
units issued and outstanding at December 31, 1999
and December 31, 1998, respectively
8.82% Series I Cumulative Convertible Preference Units; 10/31/99 0.6417 $2.20500 - 100,000
liquidation value $25 per unit; 0 and 4,000,000 units
issued and outstanding at December 31, 1999 and
December 31, 1998, respectively (4)
8.60% Series J Cumulative Convertible Preference Units; 3/31/00 0.6136 $2.15000 114,980 114,985
liquidation value $25 per unit; 4,599,200 and 4,599,400
units issued and outstanding at December 31, 1999 and
December 31, 1998, respectively
8.29% Series K Cumulative Redeemable Preference Units; 12/10/26 N/A $4.14500 50,000 50,000
liquidation value $50 per unit; 1,000,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
7.625% Series L Cumulative Redeemable Preference Units; 2/13/03 N/A $1.90625 100,000 100,000
liquidation value $25 per unit; 4,000,000 units issued
and outstanding at December 31, 1999 and
December 31, 1998
----------------------------------------------------------- ------------ ------------ ----------- ------------ ------------
$1,310,266 $1,410,574
----------------------------------------------------------- ------------ ------------ ----------- ------------ ------------
</TABLE>
F-19
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(1) On or after the redemption date, redeemable preference units
(Series A, B, C, D, F, K and L) may be redeemed for cash at the
option of the Company, in whole or in part, at a redemption price
equal to the liquidation price per unit, plus accrued and unpaid
distributions, if any, in conjunction with the concurrent
redemption of the corresponding Preferred Shares of EQR.
(2) On or after the redemption date, convertible preference units
(Series E, G, H, I & J) may be redeemed under certain circumstances
for cash or OP Units at the option of the Company, in whole or in
part, at various redemption prices per unit based upon the
contractual conversion rate, plus accrued and unpaid distributions,
if any, in conjunction with the concurrent redemption/conversion of
the corresponding Preferred Shares of EQR. The conversion rate
listed for Series G is the preference unit rate and the equivalent
depositary unit rate is 0.4268.
(3) Dividends on all series of preference units are payable quarterly
at various pay dates. Dividend rates listed for Series B, C, D and
G are preference unit rates. The equivalent depositary unit annual
dividend rates are $2.281252, $2.281252, $2.15 and $1.8125 per
Series B, C, D and G depositary unit, respectively.
(4) During 1999, all of the Series I preference units were converted
into 2,566,797 OP Units of the Operating Partnership in conjunction
with the conversion of the Series I Preferred Shares of EQR.
The following table presents the Operating Partnership's allocation of
net income among Cumulative Convertible or Redeemable Preference Units for the
years ended December 31, 1999, 1998 and 1997 (AMOUNTS ARE IN THOUSANDS):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------------------------------------------
<S> <C> <C> <C>
ALLOCATION OF NET INCOME:
9 3/8% Series A Cumulative Redeemable
Preference Units $ 14,344 $ 14,344 $ 14,344
9 1/8% Series B Cumulative Redeemable
Preference Units 11,406 11,406 11,406
9 1/8% Series C Cumulative Redeemable
Preference Units 10,494 10,494 10,494
8.60% Series D Cumulative Redeemable
Preference Units 15,050 15,050 9,238
Series E Cumulative Convertible Preference Units 6,992 6,995 4,143
9.65% Series F Cumulative Redeemable
Preference Units 5,549 5,549 3,284
7 1/4% Series G Convertible Cumulative
Preference Units 22,928 22,928 6,103
7.00% Series H Cumulative Convertible
Preference Units 261 55 -
8.82% Series I Cumulative Convertible
Preference Units 3,329 1,764 -
8.60% Series J Cumulative Convertible
Preference Units 9,888 1,978 -
8.29% Series K Cumulative Redeemable
Preference Units 4,145 829 -
7.625% Series L Cumulative Redeemable
Preference Units 7,625 1,525 -
------------- -------------- ------------
Cumulative Convertible or Redeemable Preference Units $ 112,011 $ 92,917 $ 59,012
============= ============== ============
</TABLE>
F-20
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
6. REAL ESTATE
The following table summarizes the carrying amounts for investment in
real estate as of December 31, 1999 and 1998 (AMOUNTS ARE IN THOUSANDS):
<TABLE>
<CAPTION>
====================================================================
1999 1998
--------------------------------------------------------------------
<S> <C> <C>
Land $ 1,550,378 $ 1,326,148
Buildings and Improvements 10,266,290 9,186,220
Furniture, Fixtures and Equipment 404,260 333,359
Construction in Progress 18,035 96,336
--------------------------------------------------------------------
Real Estate 12,238,963 10,942,063
Accumulated Depreciation (1,070,487) (718,491)
--------------------------------------------------------------------
Real Estate, net $ 11,168,476 $ 10,223,572
--------------------------------------------------------------------
</TABLE>
The following table summarizes the carrying amounts for the real estate
held for disposition as of December 31, 1999 and 1998 (AMOUNTS ARE IN
THOUSANDS):
<TABLE>
<CAPTION>
====================================================================
1999 1998
--------------------------------------------------------------------
<S> <C> <C>
Land $ 2,383 $ 4,189
Buildings and Improvements 14,596 35,620
Furniture, Fixtures and Equipment 1,403 4,389
Construction in Progress -- --
------------------------------------- --------------- -------------
Real Estate 18,382 44,198
Accumulated Depreciation (5,514) (14,312)
------------------------------------- --------------- -------------
Real Estate Held for Disposition $ 12,868 $ 29,886
------------------------------------- --------------- -------------
</TABLE>
In addition to the LFT Merger, during the year ended December 31, 1999,
the Operating Partnership acquired the twenty-two Properties listed below, of
which fourteen were acquired from unaffiliated parties and eight were acquired
from an affiliated party. In connection with certain of the acquisitions listed
below, the Operating Partnership assumed and/or entered into mortgage
indebtedness of approximately $69.9 million, issued OP Units having a value of
approximately $25.2 million and issued Junior Convertible Preference Units
having a value of approximately $3.0 million. The cash portion of these
transactions was funded primarily from proceeds received from the disposition of
certain properties, working capital and the Operating Partnership's line of
credit.
F-21
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
<CAPTION>
- --------------- ----------------------------------- --------------------------------- ------------ --------------
PURCHASE
PRICE
DATE NUMBER (IN
ACQUIRED PROPERTY LOCATION OF UNITS THOUSANDS)
- --------------- ----------------------------------- --------------------------------- ------------ --------------
<S> <C> <C> <C> <C>
01/22/99 Fireside Park Rockville, MD 236 $14,279
01/22/99 Mill Pond Glen Burnie, MD 240 11,745
01/28/99 Aspen Crossing Wheaton, MD 192 11,386
02/24/99 Copper Canyon Highlands Ranch, CO 222 16,200
03/04/99 Siena Terrace Lake Forest, CA 356 33,000
03/23/99 Greenbriar Kirkwood, MO 218 12,033
03/24/99 Fairland Gardens Silver Spring, MD 400 25,897
04/28/99 Pine Tree Club Wildwood, MO 150 7,988
04/28/99 Westbrooke Village I & II Manchester, MO 252 12,642
04/29/99 Brookside Frederick, MD 228 10,809
04/30/99 Skyview Rancho Santa Margarita, CA 260 21,800
05/20/99 Lincoln at Defoors Atlanta, GA 300 25,500
05/25/99 Rosecliff Quincy, MA 156 18,263
05/25/99 Canyon Crest Santa Clarita, CA 158 12,500
06/29/99 Greentree I Glen Burnie, MD 350 15,625
06/29/99 Greentree III Glen Burnie, MD 207 9,598
07/14/99 Brookdale Village Naperville, IL 252 19,600
07/29/99 Longfellow Place* Boston, MA 710 237,000
07/30/99 Greentree II Glen Burnie, MD 239 10,907
10/28/99 Granada Highlands Malden, MA 919 128,000
12/16/99 Bridgewater at Wells Crossing Orange Park, FL 288 15,500
12/22/99 Town Center Phase II Houston, TX 260 14,423
- -----------------------------------------------------------------------------------------------------------------
6,593 $684,695
- --------------- ----------------------------------- --------------------------------- ------------ --------------
</TABLE>
* This acquisition also included approximately 264,000 square feet of office and
retail space and two parking garages.
In addition to the MRY Merger, during the year ended December 31, 1998,
the Operating Partnership acquired 99 Properties, of which 96 were acquired from
unaffiliated parties and 3 were acquired from an affiliated party. In connection
with certain of these acquisitions, the Operating Partnership assumed and/or
entered into mortgage indebtedness of approximately $459.8 million, issued OP
Units having a value of approximately $165 million and issued Junior Convertible
Preference Units having a value of approximately $4.8 million. The cash portion
of these transactions was funded primarily from proceeds raised from the various
capital transactions as disclosed in Note 5 of the Notes to Consolidated
Financial Statements, the various debt offerings as disclosed in Note 12 of the
Notes to Consolidated Financial Statements, the Operating Partnership's line of
credit, proceeds received from the disposition of certain Properties and working
capital.
7. REAL ESTATE DISPOSITIONS
During the year ended December 31, 1999, the Operating Partnership
disposed of the thirty-six Properties listed below to unaffiliated parties. The
Operating Partnership recognized a net gain for financial reporting purposes of
approximately $93.5 million. In connection with one of these dispositions, the
purchaser assumed the Operating Partnership's mortgage indebtedness of
approximately $12.5 million.
F-22
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
<TABLE>
<CAPTION>
===================================================================================================================
DISPOSITION
DATE DISPOSED NUMBER PRICE
PROPERTY LOCATION OF UNITS (IN THOUSANDS)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/06/99 Fox Run Little Rock, AR 337 $10,623
01/06/99 Greenwood Forest Little Rock, AR 239 7,533
01/06/99 Walnut Ridge Little Rock, AR 252 7,943
01/06/99 Williamsburg Little Rock, AR 211 6,651
01/27/99 The Hawthorne Phoenix, AZ 276 20,500
03/02/99 The Atrium Durham, NC 208 10,750
03/24/99 Greenbriar Kirkwood, MO 218 12,525
05/06/99 Sandstone at Bear Creek Euless, TX 40 2,075
05/12/99 La Costa Brava/Cedar Cove Jacksonville, FL 464 17,650
05/18/99 Lands End Pacifica , CA 260 30,100
07/01/99 The Willows Knoxville, TN 250 11,950
07/26/99 Tivoli Lakes Club Deerfield Beach, FL 278 17,000
07/29/99 The Seasons Boise, ID 120 6,026
08/19/99 Kingswood Manor San Antonio, TX 129 3,800
08/19/99 Hampton Green San Antonio, TX 293 8,000
08/19/99 Trails End San Antonio, TX 308 9,100
08/19/99 Waterford San Antonio, TX 133 4,500
09/23/99 Southbank Mesa, AZ 113 4,550
09/30/99 Governor's Place Augusta, GA 190 5,500
09/30/99 Maxwell House Augusta, GA 216 3,500
10/14/99 Burn Brae Irving, TX 282 10,800
10/15/99 Casa Cordoba Tallahassee, FL 168 5,672
10/15/99 Casa Cortez Tallahassee, FL 66 2,228
11/18/99 Orchards of Landen Maineville, OH 312 19,100
11/23/99 Flying Sun Phoenix, AZ 108 5,100
12/15/99 Sleepy Hollow Kansas City, MO 388 18,050
12/15/99 Harbour Landing Corpus Christi, TX 284 9,500
12/15/99 Doral Louisville, KY 228 9,750
12/20/99 Villa Manana Phoenix, AZ 260 11,350
12/20/99 University Park Toledo, OH 99 2,050
12/20/99 Village of Hampshire Heights Toledo, OH 304 7,000
12/22/99 Superstition Vistas/Heritage Point Mesa, AZ 464 25,000
12/22/99 The Meadows Mesa, AZ 306 14,500
12/28/99 Metropolitan Park Seattle, WA 82 7,000
--------------- --------------------------------------- ------------------------- -------------- -----------------
7,886 $347,376
--------------- --------------------------------------- ------------------------- -------------- -----------------
</TABLE>
In addition, during the year ended December 31, 1999, the Operating
Partnership also sold its entire interest in six MRY joint venture properties
(to MRYP Spinco) containing 1,297 units for approximately $54.1 million.
8. COMMITMENTS TO ACQUIRE/DISPOSE OF REAL ESTATE
As of December 31, 1999, in addition to the Property that was
subsequently acquired as discussed in Note 22 of the Notes to Consolidated
Financial Statements, the Operating Partnership entered into separate agreements
to acquire three multifamily properties containing 886 units from unaffiliated
parties. The Operating Partnership expects a combined purchase price of
approximately $126 million.
F-23
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
As of December 31, 1999, in addition to the Properties that were
subsequently disposed of as discussed in Note 22 of the Notes to Consolidated
Financial Statements, the Operating Partnership entered into separate agreements
to dispose of fourteen multifamily properties containing 3,056 units to
unaffiliated parties. The Operating Partnership expects a combined disposition
price of approximately $138.9 million.
The closings of these pending transactions are subject to certain
contingencies and conditions; therefore, there can be no assurance that these
transactions will be consummated or that the final terms thereof will not differ
in material respects from those summarized in the preceding paragraphs.
9. INVESTMENT IN MORTGAGE NOTES, NET
In 1995, the Operating Partnership made an $89 million investment in
partnership interests and subordinated mortgages collateralized by 21 of the
Properties. These 21 Properties consist of 3,896 units, located in California,
Colorado, New Mexico and Oklahoma. This included an $87.1 million investment in
second and third mortgages (net of an original discount of approximately $12.7
million to their face amount), $1.6 million represented a one time payment for
an interest rate protection agreement and $0.3 million represented an investment
for primarily a 49.5% limited partnership interest in the title-holding
entities. As the Operating Partnership does not control the general partners of
the title-holding entities and substantially all of the Operating Partnership's
investment is in second and third mortgages (which are subordinate to first
mortgages owned by third party unaffiliated entities), the $87.1 million
investment is accounted for as an investment in mortgage notes. The $1.6 million
payment made for the interest rate protection agreement is included in deferred
financing costs and is being amortized over the term of the related debt.
As of December 31, 1999 and 1998, the second mortgage notes had a
combined principal balance of approximately $17.5 million and $21.7 million,
respectively, and currently accrue interest at a rate of 9.45% per annum,
receive principal amortization from excess cash flow and have a stated maturity
date of December 31, 2019. As of December 31, 1999 and 1998, the third mortgage
notes had a combined principal balance of approximately $71.1 million and $71.1
million, respectively, and currently accrue interest at a rate of 6.15% per
annum, plus up to an additional 3% per annum to the extent of available cash
flow. Contingent interest on the third mortgage notes is recognized to the
extent it is received. The third mortgage notes have a stated maturity of
December 31, 2024. Receipt of principal and interest on the second and third
mortgage notes is subordinated to the receipt of all interest on the first
mortgage notes. With respect to the discount on these notes, the unamortized
balance at December 31, 1999 and 1998 was $4.8 million and $6 million,
respectively. During 1999, 1998 and 1997, the Operating Partnership amortized
$1.2 million, $3.0 million and $3.1 million, respectively, which is included in
interest income-investment in mortgage notes in the consolidated statements of
operations. This discount is being amortized utilizing the effective yield
method based on the expected life of the investment.
10. DEPOSITS-RESTRICTED
Deposits-restricted as of December 31, 1999 primarily included the
following:
- a deposit in the amount of $25 million held in a third party
escrow account to provide collateral for third party
construction financing in connection with two separate joint
venture agreements;
- approximately $48.9 million was held in third party escrow
accounts, representing proceeds received in connection with the
Operating Partnership's disposition of three properties and
earnest money deposits made for one additional acquisition;
F-24
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
- approximately $29.9 million was for tenant security, utility
deposits, and other deposits for certain of the Operating
Partnership's Properties; and
- approximately $7.5 million of other deposits.
Deposits-restricted as of December 31, 1998 primarily included the
following:
- a deposit in the amount of $20 million held in a third party
escrow account to provide collateral for third party construction
financing in connection with the Joint Venture Agreement;
- approximately $22.2 million held in third party escrow accounts
representing proceeds received in connection with the Operating
Partnership's disposition of four properties;
- approximately $15.3 million for tenant security and utility
deposits for certain of the Operating Partnership's Properties;
and
- approximately $11.8 million of other deposits.
11. MORTGAGE NOTES PAYABLE
As of December 31, 1999, the Operating Partnership had outstanding
mortgage indebtedness of approximately $2.9 billion encumbering 545 of the
Properties. The carrying value of such Properties (net of accumulated
depreciation of $416 million) was approximately $4.7 billion. The mortgage notes
payables are generally due in monthly installments of principal and interest.
During the year ended December 31, 1999 the Operating Partnership:
- as part of the LFT Merger, assumed the outstanding mortgage
balances on 342 Properties in the aggregate amount of $499.7
million;
- assumed the outstanding mortgage balances on eight additional
properties acquired during 1999 in the aggregate amount of $69.9
million;
- repaid the outstanding mortgage balances on 31 Properties in the
aggregate amount of $60.8 million. In connection with the above
transactions, the Operating Partnership incurred prepayment
penalties of $0.5 million, which have been classified as losses
on early extinguishment of debt;
- refinanced the debt on four existing properties totaling $44.9
million with new mortgage indebtedness totaling $62.9 million;
- obtained new mortgage financing on eleven previously unencumbered
properties in the amount of $126.5 million;
- refinanced the debt totaling $120.8 million on ten existing
properties. In addition, five previously unencumbered properties
cross-collateralize each of the new mortgage notes;
- refinanced the debt on two existing properties and consequently
sold its lender position to a third party, thus receiving
additional net cash proceeds of approximately $2.6 million. The
bond indebtedness on these two properties is now unsecured and is
classified as notes, net at December 31, 1999;
- refinanced the debt on one existing property and consequently
sold its lender position to a third party, thus receiving
additional cash proceeds of approximately $13.7 million; and
- sold the debt on one property totaling $12.5 million in
conjunction with a real estate disposition.
F-25
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
As of December 31, 1999, scheduled maturities for the Operating
Partnership's outstanding mortgage indebtedness are at various dates through
October 1, 2033. The interest rate range on the Operating Partnership's mortgage
debt was 4.00% to 10.13% at December 31, 1999. During the year ended December
31, 1999, the effective interest cost on all of the Operating Partnership's debt
was 7.05%.
Aggregate payments of principal on mortgage notes payable for each of
the next five years and thereafter are as follows (amounts in thousands):
<TABLE>
<CAPTION>
- ---------------------------------- ----------------
YEAR TOTAL
- ---------------------------------- ----------------
<S> <C>
2000 $ 49,588
2001 349,223
2002 249,458
2003 97,351
2004 171,597
Thereafter 1,962,966
Net Unamortized Premiums 3,400
- ---------------------------------- ----------------
Total $2,883,583
- ---------------------------------- ----------------
</TABLE>
During the year ended December 31, 1998, the Operating Partnership
repaid the outstanding mortgage balances on nine Properties in the aggregate
amount of $63.8 million.
As of December 31, 1998, the Operating Partnership had outstanding
mortgage indebtedness of approximately $2.3 billion encumbering 216 of the
Properties. The carrying value of such Properties (net of accumulated
depreciation of $250 million) was approximately $3.8 billion. The mortgage notes
payables are generally due in monthly installments of principal and interest. In
connection with the Properties acquired during the year ended December 31, 1998,
including the effects of the MRY Merger, the Operating Partnership assumed the
outstanding mortgage balances on 58 Properties in the aggregate amount of $608.9
million, which includes a premium of approximately $1.5 million recorded in
connection with the MRY Merger.
As of December 31, 1998, scheduled maturities for the Operating
Partnership's outstanding mortgage indebtedness are at various dates through
October 1, 2033. The interest rate range on the Operating Partnership's mortgage
debt was 3.00% to 10.00% at December 31, 1998. During the year ended December
31, 1998, the effective interest cost on all of the Operating Partnership's debt
was 7.10%.
The Operating Partnership has, from time to time, entered into interest
rate protection agreements (financial instruments) to reduce the potential
impact of increases in interest rates but believes it has limited exposure to
the extent of non-performance by the counterparties of each protection agreement
since each counterparty is a major U.S. financial institution, and the Operating
Partnership does not anticipate their non-performance. No such financial
instrument has been used for trading purposes.
Concurrent with the refinancing of certain tax-exempt bonds and as a
requirement of the credit provider of the bonds, the Financing Partnership,
which owns certain of the Properties, entered into interest rate protection
agreements, which were assigned to the credit provider as additional security.
The Financing Partnership pays interest based on a fixed interest rate and the
counterparty of the agreement pays interest to the Operating Partnership at a
floating rate that is calculated based on the Public Securities Association
Index for municipal bonds ("PSA Municipal Index"). As of December 31, 1999, the
aggregate notional
F-26
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
amounts of these agreements were approximately $133.4 million, $27.7 million and
$9.1 million. As of December 31, 1998, the aggregate notional amounts of these
agreements were approximately $135.1 million, $28.0 million and $9.2 million.
The fixed interest rates for these agreements were 4.81%, 4.528% and 4.90%. The
termination dates are October 1, 2003, January 1, 2004 and April 1, 2004.
The Operating Partnership simultaneously entered into substantially
identical reverse interest rate protection agreements. Under these agreements
the Operating Partnership pays interest monthly at a floating rate based on the
PSA Municipal Index and the counterparty pays interest to the Operating
Partnership based on a fixed interest rate. As of December 31, 1999, the
aggregate notional amounts of these agreements were approximately $133.4
million, $27.7 million, and $9.1 million. As of December 31, 1998, the aggregate
notional amounts of these agreements were approximately $135.1 million, $28.0
million and $9.2 million. The fixed interest rates received by the Operating
Partnership in exchange for paying interest based on the PSA Municipal Index for
these agreements were 4.74%, 4.458% and 4.83%. The termination dates are October
1, 2003, January 1, 2004 and April 1, 2004. Collectively, these agreements
effectively cost the Operating Partnership 0.07% per annum on the current
outstanding aggregate notional amount.
The Operating Partnership also has an interest rate swap agreement for
a notional amount of $228 million, for which it will receive payments if the PSA
index exceeds 8.00%, that terminates on December 1, 2000. Any payments by the
counterparty under this agreement have been collaterally assigned to the
provider of certain sureties related to the tax exempt bonds secured by certain
of its Properties. The Operating Partnership has no payment obligations to the
counterparty with respect to this agreement.
In May 1998, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate of the Evans
Withycombe Financing Limited Partnership indebtedness to within a range of 5.6%
to 6.0%. The agreement was for a notional amount of $131 million with a
settlement date of August 2001. There was no initial cost to the Operating
Partnership for entering into this agreement.
In August 1998, the Operating Partnership entered into an interest rate
protection agreement to effectively fix the interest rate cost of the Operating
Partnership's planned financing in the fourth quarter of 1998. This agreement
was canceled in November 1998 at a cost of approximately $3.7 million. This cost
is being amortized over the life of the financing for the fifteen previously
unencumbered Properties that occurred in November 1998.
In August 1998, the Operating Partnership entered into an interest rate
swap agreement that fixed the Operating Partnership's interest rate risk on a
portion of the Operating Partnership's variable rate tax-exempt bond
indebtedness at a rate of 3.65125%. This agreement was for a notional amount of
$150 million with a termination date of August 2003.
In August 1998, the Operating Partnership entered into an interest rate
swap agreement that fixed the Operating Partnership's interest rate risk on a
portion of the Operating Partnership's variable rate tax-exempt bond
indebtedness at a rate of 3.683%. This agreement was for a notional amount of
$150 million with a termination date of August 2005.
In October 1999, the Operating Partnership settled on a $50 million
treasury lock and received $1.38 million. This settlement is being amortized
over the life of the financing for the eleven previously unencumbered Properties
that occurred in July 1999.
F-27
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The Operating Partnership believes that it has limited exposure to the
extent of non-performance by the counterparties of the agreements, mentioned in
the previous paragraphs, since each counterparty is a major U.S. financial
institution, and the Operating Partnership does not anticipate their
non-performance.
The fair value of these instruments, discussed above, as of December
31, 1999 approximates their carrying or contract values.
12. NOTES
The following tables summarize the Operating Partnership's unsecured
note balances and certain interest rate and maturity date information as of and
for the years ended December 31, 1999 and 1998, respectively:
<TABLE>
<CAPTION>
Weighted
December 31, 1999 Net Principal Interest Rate Ranges Average Maturity Date
(AMOUNTS ARE IN THOUSANDS) Balance Interest Rate Ranges
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Public Notes $ 2,062,759 6.150% - 9.375% 6.98% 2000 - 2026
Floating Rate Public Notes 99,746 (1) 5.81% 2003
Fixed Rate Tax-Exempt Bonds 127,780 4.750% - 5.200% 4.99% 2024 - 2029
-------------------
Totals $ 2,290,285
===================
</TABLE>
(1) As of December 31, 1999, floating rate public notes consisted of
one note. The interest rate on this note was LIBOR (reset
quarterly) plus a spread equal to 0.75% at December 31, 1999
(reset annually in August).
<TABLE>
<CAPTION>
Weighted Maturity
DECEMBER 31, 1998 Net Principal Interest Rate Ranges Average Date Ranges
(AMOUNTS ARE IN THOUSANDS) Balance Interest Rate
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Public Notes $ 1,889,241 6.150% - 9.375% 7.36% 1999 - 2026
Floating Rate Public Notes 124,675 (2) 6.14% 1999 - 2003
Fixed Rate Tax-Exempt Bonds 35,600 4.750% 4.750% 2024
-------------------
Totals $ 2,049,516
===================
</TABLE>
(2) As of December 31, 1998, floating rate public notes consisted
of two separate notes. The interest rate on the first note was
LIBOR (reset quarterly) plus a spread equal to 0.45% at
December 31, 1998 (reset annually in August). The interest
rate on the second note was LIBOR (reset quarterly) plus a
spread equal to 0.32% at December 31, 1998.
As of December 31, 1999, the Operating Partnership had outstanding
unsecured notes of approximately $2.3 billion net of a $4.6 million discount and
including a $7.1 million premium.
As of December 31, 1998, the Operating Partnership had outstanding
unsecured notes of approximately $2.0 billion net of a $5.3 million discount and
including a $9.2 million premium.
F-28
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
On February 3, 1998, the Operating Partnership filed a Form S-3
Registration Statement to register $1 billion of debt securities. The SEC
declared this registration statement effective on February 27, 1998. As of
December 31, 1999, $430 million remained outstanding under this registration
statement.
During the year ended December 31, 1999, the Operating Partnership:
- issued $300 million of redeemable unsecured fixed rate notes (the
"June 2004 Notes") in connection with the Debt Shelf Registration
in a public debt offering (the "Ninth Public Debt Offering"). The
June 2004 Notes were issued at a discount, which is being
amortized over the life of the notes on a straight-line basis. As
of December 31, 1999, the unamortized discount balance was
approximately $0.2 million. The June 2004 Notes are due June 23,
2004. The annual interest rate on the June 2004 Notes is 7.10%,
which is payable semiannually in arrears on December 23 and June
23, commencing December 23, 1999. The Operating Partnership
received net proceeds of approximately $298.0 million in
connection with this issuance;
- repaid its $125 million fixed rate notes that matured on May 15,
1999 and its $25 million floating rate notes that matured on
November 24, 1999;
- refinanced the bond indebtedness collateralized by four existing
properties. The bond indebtedness on all four properties totaling
$75.8 million is now unsecured;
- pursuant to the LFT Merger, assumed an unsecured term note in the
approximate amount of $2.3 million and paid it off the same day;
and
- refinanced the bond indebtedness collateralized by two existing
properties. The bond indebtedness on both properties totaling
$16.4 million is now unsecured.
Aggregate payments of principal on unsecured notes payable for each of
the next five years and thereafter are as follows (amounts in thousands):
<TABLE>
<CAPTION>
---------------------------------- ------------------
YEAR TOTAL
---------------------------------- ------------------
<S> <C>
2000 $ 200,000
2001 150,000
2002 265,000
2003 190,000
2004 415,000
Thereafter 1,067,780
Net Unamortized Premiums 7,056
Net Unamortized Discounts (4,551)
---------------------------------- ------------------
Total $2,290,285
---------------------------------- ------------------
</TABLE>
As of December 31, 1999 and 1998, the remaining unamortized balance of
deferred settlement receipts from treasury locks and interest rate protection
agreements was $9.5 million and $8.8 million, respectively.
As of December 31, 1999 and 1998, the remaining unamortized balance of
deferred settlement payments on treasury locks and interest rate protection
agreements was $3.7 million and $5.4 million, respectively.
In regard to the interest rate protection agreements mentioned, the
Operating Partnership believes that it has limited exposure to the extent of
non-performance by the counterparties of each agreement since
F-29
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
each counterparty is a major U.S. financial institution and the Operating
Partnership does not anticipate their non-performance.
13. LINES OF CREDIT
On August 12, 1999 the Operating Partnership obtained a new three year
$700 million unsecured revolving credit facility, with Bank of America
Securities LLC and Chase Securities Inc. acting as joint lead arrangers,
maturing August 11, 2002. The new line of credit replaced the Operating
Partnership's $500 million unsecured revolving credit facility, as well as the
$120 million unsecured revolving credit facility which the Company assumed in
the MRY Merger. The prior existing revolving credit facilities were repaid in
full and terminated upon the closing of the new facility. Advances under the
credit facility bear interest at variable rates based upon LIBOR at various
interest periods, plus a certain spread dependent upon the Operating
Partnership's credit rating. As of December 31, 1999 and 1998, $300 million and
$290 million, respectively, was outstanding and $65.8 million and $12 million,
respectively, was restricted on the lines of credit. During the years ended
December 31, 1999 and 1998, the weighted average interest rate was 6.42% and
6.47%, respectively.
Pursuant to the LFT Merger, the Operating Partnership assumed a line of
credit that had an outstanding balance of approximately $26.4 million. On
October 1, 1999, the Operating Partnership repaid the outstanding balance and
terminated this facility.
14. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE OP UNIT
The following tables set forth the computation of net income per OP
Unit - basic and net income per OP Unit - diluted.
F-30
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997
-------------------------------------------------
(AMOUNTS IN THOUSANDS EXCEPT PER OP UNIT AMOUNTS)
<S> <C> <C> <C>
NUMERATOR:
Income before gain on disposition of properties, net,
extraordinary item and allocation of income to
Junior Convertible Preference Units, Cumulative
Convertible Redeemable Preference Interests and
Redeemable Preference Units $ 330,333 $ 255,032 $ 176,014
Income allocated to Junior Convertible Preference Units (349) -- --
Income allocated to Cumulative Convertible Redeemable
Preference Interests (836) -- --
Income allocated to Redeemable Preference Units (112,011) (92,917) (59,012)
--------- --------- ---------
Income before gain on disposition of properties, net
and extraordinary item 217,137 162,115 117,002
Gain on disposition of properties, net 93,535 21,703 13,838
Loss on early extinguishment of debt (451) -- --
--------- --------- ---------
Numerator for net income per OP Unit - basic 310,221 183,818 130,840
Effect of dilutive securities -- -- --
--------- --------- ---------
Numerator for net income per OP Unit - diluted $ 310,221 $ 183,818 $ 130,840
========= ========= =========
DENOMINATOR:
Denominator for net income per OP Unit - basic 135,001 111,713 73,182
Effect of dilutive securities:
OP Units issuable upon exercise of EQR's
share options 654 865 1,099
--------- --------- ---------
Denominator for net income per OP Unit - diluted 135,655 112,578 74,281
========= ========= =========
Net income per OP Unit - basic $ 2.30 $ 1.65 $ 1.79
========= ========= =========
Net income per OP Unit - diluted $ 2.29 $ 1.63 $ 1.76
========= ========= =========
</TABLE>
F-31
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998 1997
-----------------------------------------------
(AMOUNTS IN THOUSANDS EXCEPT PER OP UNIT
AMOUNTS)
<S> <C> <C> <C>
NET INCOME PER OP UNIT - BASIC:
Income before gain on disposition of properties, net and
extraordinary item per OP Unit - basic $ 1.61 $ 1.45 $ 1.60
Gain on disposition of properties, net 0.69 0.20 0.19
Loss on early extinguishment of debt - - -
------------- -------------- --------------
Net income per OP Unit - basic $ 2.30 $ 1.65 $ 1.79
============= ============== ==============
NET INCOME PER OP UNIT - DILUTED:
Income before gain on disposition of properties, net and
extraordinary item per OP Unit - diluted $ 1.60 $ 1.44 $ 1.58
Gain on disposition of properties, net 0.69 0.19 0.18
Loss on early extinguishment of debt - - -
------------- -------------- --------------
Net income per OP Unit - diluted $ 2.29 $ 1.63 $ 1.76
============= ============== ==============
</TABLE>
CONVERTIBLE PREFERENCE UNITS THAT COULD BE CONVERTED INTO 12,023,051,
8,739,688 AND 2,763,898 WEIGHTED COMMON SHARES (WHICH WOULD BE CONTRIBUTED TO
THE OPERATING PARTNERSHIP IN EXCHANGE FOR OP UNITS) FOR THE YEARS ENDED
DECEMBER 31, 1999, 1998 AND 1997, RESPECTIVELY, WERE OUTSTANDING BUT WERE NOT
INCLUDED IN THE COMPUTATION OF DILUTED EARNINGS PER OP UNIT BECAUSE THE
EFFECTS WOULD BE ANTI-DILUTIVE.
PURSUANT TO EQR'S SHARE OPTION PLAN, EQR HAS OFFERED THE OPPORTUNITY TO
ACQUIRE COMMON SHARES THROUGH THE GRANT OF SHARE OPTIONS ("OPTIONS") TO
OFFICERS, DIRECTORS, KEY EMPLOYEES AND CONSULTANTS OF EQR FOR 6.4 MILLION, 6.2
MILLION AND 4.1 MILLION COMMON SHARES AT A WEIGHTED AVERAGE EXERCISE PRICE OF
$41.48, $40.61 AND $36.21 PER COMMON SHARE AS OF DECEMBER 31, 1999, 1998 AND
1997, RESPECTIVELY. AS OF DECEMBER 31, 1999, 1998 AND 1997, 3.3 MILLION, 2.8
MILLION AND 1.3 MILLION COMMON SHARES WERE EXERCISABLE, RESPECTIVELY. ANY
COMMON SHARES ISSUED PURSUANT TO EQR'S SHARE OPTION PLAN WILL RESULT IN THE
OPERATING PARTNERSHIP ISSUING OP UNITS TO EQR ON A ONE-FOR-ONE BASIS.
ACCORDINGLY, THE DILUTIVE EFFECT OF EQR'S OPTIONS HAVE BEEN INCLUDED IN THE
NUMBER OF OP UNITS - DILUTED.
15. SUMMARIZED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
The following Summarized Pro Forma Condensed Statement of Operations
has been prepared as if the following had occurred on January 1, 1999 (as
described in Note 4, Note 5, Note 6, Note 7, Note 11 and Note 12 of Notes to
Consolidated Financial Statements):
o the acquisition of the 402 LFT properties containing 36,609 units and
other related assets for a total purchase price of approximately $738
million;
o the acquisition of an additional 22 Properties, including the related
assumption of $69.9 million of mortgage indebtedness, the issuance of
Junior Convertible Preference Units with a value of $3.0 million and
the issuance of OP Units with a value of $25.2 million;
F-32
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
o the disposition of 36 properties;
o the $300 million public debt offering in June 1999;
o the repayment of the 1999 Notes totaling $125 million;
o the repayment of the 1999-A Medium Term Notes totaling $25 million;
o the repayment of LFT's unsecured term note and line of credit totaling
$28.6 million;
o the repayment of the outstanding mortgage balances on 31 properties
totaling $60.8 million;
o the mortgage financing of eleven previously unencumbered Properties
for $126.5 million;
o the mortgage refinancing of eight properties increasing mortgage
indebtedness by $21.8 million (net);
o the issuance of the 800,000 units of 8.00% Series A Cumulative
Convertible Redeemable Preference Interests; and
o the conversion of all of the Series I Preferred Shares to 2,566,797
Common Shares during 1999 (resulting in the issuance of 2,566,797
additional OP Units by the Operating Partnership to EQR).
This would result in 139,461,669 OP Units outstanding on January 1,
1999. In management's opinion, the Summarized Pro Forma Condensed Statement of
Operations does not purport to present what actual results would have been had
the above transactions occurred on January 1, 1999, or to project results for
any future period. The amounts presented in the following statement are in
thousands except for per OP Unit amounts:
<TABLE>
<CAPTION>
SUMMARIZED PRO FORMA
CONDENSED STATEMENT
OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 1999
-------------------------------------- ---------------------------------
<S> <C>
Total revenues $ 1,883,294
---------
Total expenses $ 1,547,363
---------
Net income available for OP Units $ 223,618
=======
Net income per OP Unit $ 1.60
====
</TABLE>
16. EMPLOYEE SHARE PURCHASE PLAN
Under EQR's Employee Share Purchase Plan certain eligible officers,
trustees and employees of EQR may annually acquire up to $100,000 of Common
Shares of EQR. The aggregate number of Common Shares available under the
Employee Share Purchase Plan shall not exceed 1,000,000, subject to adjustment
by the Board of Trustees. The Common Shares may be purchased quarterly at a
price equal to 85% of the lessor of: (a) the closing price for a share on the
first day of such quarter, and (b) the greater of: (i) the closing price for a
share on the first day of such quarter, and (ii) the average closing price for a
share for all the business days in the quarter. During 1997, EQR issued 84,183
Common Shares at net prices that ranged from $35.63 per share to $42.08 per
share and raised approximately $3.2 million in connection therewith. During
1998, EQR issued 93,521 Common Shares at net prices that ranged from $35.70 per
share to $42.71 per share and raised approximately $3.7 million in connection
therewith. During 1999, EQR issued 147,885 Common Shares at net prices that
ranged from $34.37 per share to $36.71 per share and raised approximately $5.2
million in connection therewith. The net proceeds were contributed to the
Operating Partnership in exchange for OP Units.
F-33
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
17. DISTRIBUTION REINVESTMENT AND SHARE PURCHASE PLAN
The Distribution Reinvestment and Share Purchase Plan (the "DRIP Plan")
of EQR provides holders of record and beneficial owners of Common Shares,
Preferred Shares, and limited partnership interests in the Operating Partnership
with a simple and convenient method of investing cash distributions in
additional Common Shares (which is referred to herein as the "Dividend
Reinvestment - DRIP Plan"). Common Shares may also be purchased on a monthly
basis with optional cash payments made by participants in the Plan and
interested new investors, not currently shareholders of EQR, at the market price
of the Common Shares less a discount ranging between 0% and 5%, as determined in
accordance with the DRIP Plan (which is referred to herein as the "Share
Purchase - DRIP Plan"). The net proceeds from any Common Share issuances are
contributed to the Operating Partnership in exchange for OP Units.
18. EMPLOYEE TRANSACTIONS
Douglas Crocker II, President and Chief Executive Officer of the
Company, and three other officers had purchased an aggregate of 190,000 Common
Shares at prices which range from $26 to $31.625 per Common Share. These
purchases were financed by loans made by the Operating Partnership in the
aggregate amount of approximately $5.3 million. The employee notes accrue
interest, payable in arrears, at rates that range from 6.15% per annum to 7.93%
per annum. Scheduled maturities are at various dates through March 2005. The
outstanding balance on these loans in the aggregate was $4.7 million and $4.9
million for the years ended December 31, 1999 and 1998, respectively. The
employee notes are recourse to Mr. Crocker and the three other officers and are
collateralized by pledges of the 190,000 Common Shares purchased.
In addition, as of December 31, 1999, the outstanding principal balance
on additional notes issued to Mr. Crocker and three other officers was
approximately $1.2 million. These notes accrue interest, payable in arrears, at
one month LIBOR plus 2% per annum. Scheduled maturities are at various dates
through March 2003. Subsequent to December 31, 1999, Mr. Crocker paid a
principal installment on his note in the amount of $80,570 and repaid another
note in full in the amount of $100,000. The notes are recourse to Mr. Crocker
and the four other officers and are collateralized by pledges of Company options
and share awards.
Mr. Crocker and Gerald A. Spector, Executive Vice President and Chief
Operating Officer of the Company, have entered into Deferred Compensation
Agreements with the Company which provide both with a salary benefit after their
respective termination of employment with the Company, under certain
circumstances. In addition, Mr. Crocker also has entered into a Share
Distributions Agreement with the Company whereby he was issued options to
purchase 100,000 Common Shares under the terms of the Fifth Amended Option and
Award Plan. Upon exercise of these options, Mr. Crocker will be entitled to
receive dividends on these shares as if they had been outstanding from the grant
date through the exercise date. The Operating Partnership has recognized $1.1
million, $0.8 million and $0.7 million of compensation expense for the years
ended December 31, 1999, 1998 and 1997, respectively, related to these
agreements.
The Company has established a defined contribution plan (the "401(k)
Plan") that provides retirement benefits for employees that meet minimum
employment criteria. The Operating Partnership, on behalf of the Company,
contributes 100% of the first 4% of eligible compensation that a participant
contributes to the 401(k) Plan. Participants are vested in the Company's
contributions over five years. The Operating Partnership, on behalf of the
Company, made contributions in the amount of $1.4 million and
F-34
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
$1.4 million for the years ended December 31, 1997 and 1998, respectively, and
expects to make contributions in the amount of approximately $3.1 million for
the year ended December 31, 1999.
19. TRANSACTIONS WITH RELATED PARTIES
Pursuant to the terms of the partnership agreement for the Operating
Partnership, the Operating Partnership is required to reimburse EQR for all
expenses incurred by EQR in excess of income earned by EQR through its indirect
1% ownership of various Financing Partnerships and LLC's. Amounts paid on behalf
of EQR are reflected in the Consolidated Statements of Operations as general and
administrative expenses.
In connection with the Wellsford Merger, Jeffrey H. Lynford and Edward
Lowenthal (trustees of the Company) each executed a consulting agreement with
the Company. Each consulting agreement has a term of five years from May 30,
1997, the closing date of the Wellsford Merger. Pursuant to the consulting
agreements, each of Messrs, Lynford and Lowenthal will serve as a senior
management consultant to the Company and will receive compensation at the rate
of $200,000 per year plus reimbursement for reasonable out-of-pocket expenses.
In connection with the EWR Merger, in December 1997, Stephen O. Evans
(a trustee of the Company) executed a consulting agreement with an affiliate of
the Company. The consulting agreement had a term of two years and expired on
December 31, 1999. Pursuant to the consulting agreement, Mr. Evans served as a
senior management consultant to the Company and received compensation at the
rate of $225,000 per year. Mr. Evans also received an option to purchase 115,500
Common Shares that will vest in three equal annual installments and will have an
exercise price equal to $50.125 per Common Share. Mr. Evans was also eligible to
participate in all of the Company's employee benefit plans in which persons in
comparable positions participate, treating Mr. Evans as an employee.
In connection with the affiliated lease agreements for various offices
as defined in Note 20, the Management Companies paid Equity Office Holdings,
L.L.C. ("EOH") $126,272, $114,539 and $145,511 in connection with the Chicago
Office, $261,040, $194,506 and $177,793 in connection with the Tampa Office,
$131,079, $83,485 and $55,149 in connection with the Southern California area
office and $770,317, $772,320 and $632,693 in connection with the space occupied
by the corporate headquarters for the years ended December 31, 1999, 1998 and
1997, respectively. Also, the Management Companies paid EOH $166,328 and $55,117
in connection with the Atlanta Office for the year ended December 31, 1999 and
1998, respectively. Amounts due to EOH were $311,345, $136,000 and $59,675 as of
December 31, 1999, 1998 and 1997, respectively.
Equity Group Investments, Inc. and certain of its subsidiaries,
including, Equity Properties & Development, L.P. and Equity Properties
Management Corp. (collectively, "EGI"), have provided certain services to the
Operating Partnership and the Company which include, but are not limited to,
investor relations, corporate secretarial, real estate tax evaluation services
and market consulting and research services. Fees paid to EGI for these services
amounted to approximately $708,582, $1.1 million and $1.1 million for the years
ended December 31, 1999, 1998 and 1997, respectively. Amounts due to EGI were
$175,662, $57,408 and $74,578 as of December 31, 1999, 1998 and 1997,
respectively.
Artery Property Management, Inc., a real estate property management
company ("APMI") in which Mr. Goldberg, a trustee of the Company, is a
two-thirds owner and chairman of the board of directors, provided the Operating
Partnership consulting services with regard to property acquisitions and
additional
F-35
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
business opportunities. In connection with the acquisition of certain Properties
from Mr. Goldberg and his affiliates during 1995, the Operating Partnership made
a loan to Mr. Goldberg and APMI of $15,212,000 evidenced by two notes and
secured by 465,545 OP Units. At December 31, 1999, approximately $6.2 million
was outstanding and 64,948 OP Units and 123,792 Common Shares secured this loan.
In connection with the acquisition of certain Properties from Mr. Goldberg and
his affiliates during 1998, the Operating Partnership made a $12,000,000
revolving loan to Mr. Goldberg and his wife in September 1998. On October 1,
1999 this note was fully repaid.
During 1999, the Operating Partnership acquired eight Properties and
the related management agreements from affiliates of Mr. Goldberg for an
aggregate purchase price of approximately $110.2 million, including the
assumption of approximately $44.3 million of mortgage indebtedness. The purchase
price also included the issuance of 28,795 Series A Junior Convertible
Preference Units in the Operating Partnership which have a liquidation value of
$100 per unit and are exchangeable for OP Units under certain circumstances. On
June 29, 1999, Mr. Goldberg received 8,462 of these units with a liquidation
value of approximately $0.8 million.
Certain related entities provided services to the Operating Partnership
and the Company. These included, but were not limited to, Rosenberg &
Liebentritt, P.C., which provided legal services, and Arthur A. Greenberg, which
provided tax advisory services. Fees paid to these related entities in the
aggregate amounted to $1.3 million for the year ended December 31, 1997. In
addition, The Riverside Agency, Inc., which provided insurance brokerage
services, was paid fees and reimbursed premiums and loss claims in the amount of
$0.3 million for the year ended December 31, 1997.
Piper, Marbury, Rudnick & Wolfe, a law firm in which Mr. Errol
Halperin, a trustee of the Company, is a partner, provided legal services to the
Operating Partnership. Fees paid to this firm amounted to approximately $1.6
million, $2.2 million and $2.3 million for the years ended December 31, 1999,
1998 and 1997, respectively.
Seyfarth, Shaw, Fairweather & Geraldson, a law firm in which Ms. Sheli
Rosenberg's (a trustee of the Company) husband is a partner, provided legal
services to the Operating Partnership. Fees paid to this firm amounted to
$34,357 and $29,146, for the years ended December 31, 1999 and 1998,
respectively.
In addition, the Operating Partnership and the Company have provided
acquisitions, asset and property management services to certain related entities
for properties not owned by the Operating Partnership. Fees received for
providing such services were approximately $2.4 million, $3.5 million and $4.6
million for the years ended December 31, 1999, 1998 and 1997, respectively.
20. COMMITMENTS AND CONTINGENCIES
The Operating Partnership, as an owner of real estate, is subject to
various environmental laws of Federal and local governments. Compliance by the
Operating Partnership with existing laws has not had a material adverse effect
on the Operating Partnership's financial condition and results of operations.
However, the Operating Partnership cannot predict the impact of new or changed
laws or regulations on its current Properties or on properties that it may
acquire in the future.
The Operating Partnership does not believe there is any litigation
threatened against the Operating Partnership other than routine litigation
arising out of the ordinary course of business, some of which is
F-36
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
expected to be covered by liability insurance, none of which is expected to have
a material adverse effect on the consolidated financial statements of the
Operating Partnership.
In regard to the joint venture agreements with two multifamily
residential real estate developers during the year ended December 31, 1999, the
Operating Partnership funded a total of $88.6 million and during 2000 the
Operating Partnership expects to fund approximately $32.7 million in connection
with these agreements. In connection with the first agreement, the Operating
Partnership has an obligation to fund up to an additional $20 million to
guarantee third party construction financing.
In regard to certain other properties that were under development
and/or expansion during the year ended December 31, 1999, the Operating
Partnership funded $47.5 million. During 2000, the Operating Partnership expects
to fund $44.9 million related to the continued development and/or expansion of
as many as three Properties.
In regard to certain properties that were under earnout/development
agreements, during the year ended December 31, 1999, the Operating Partnership
funded the following:
o $17.2 million relating to the acquisition of Copper Canyon Apartments,
which included a $1.0 million earnout payment to the developer;
o $24.9 million relating to the acquisition of Skyview Apartments, which
included a $3.1 million earnout payment to the developer; and
o $18.3 million relating to the acquisition of Rosecliff Apartments.
During 2000, the Operating Partnership expects to fund $33.4 million
related to the continued earnout/development of one Property.
In connection with the Wellsford Merger, the Operating Partnership has
provided a $14.8 million credit enhancement with respect to certain tax-exempt
bonds issued to finance certain public improvements at a multifamily development
project. Pursuant to the terms of a Stock Purchase Agreement with Wellsford Real
Properties, Inc. ("WRP Newco"), the Operating Partnership has agreed to purchase
up to 1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. These preferred
shares would be convertible to WRP Newco common shares under certain
circumstances. As of December 31, 1999, no shares of WRP Newco Series A
Preferred had been acquired by the Operating Partnership.
In connection with the MRY Merger, the Operating Partnership extended a
$25 million, one year, non-revolving loan to MRYP Spinco pursuant to a Senior
Debt Agreement. On June 24, 1999, MRYP Spinco repaid the entire outstanding
Senior Note balance of $18.3 million and there is no further obligation by
either party in connection with this agreement.
Also, in connection with the MRY Merger, the Operating Partnership
entered into six joint venture agreements with MRYP Spinco, the entity spun-off
in the MRY Merger. The Operating Partnership contributed six properties with an
initial value of $52.7 million in return for an ownership interest in each joint
venture. On August 23, 1999, the Operating Partnership sold its entire interest
in these six properties to MRYP Spinco and there is no further obligation by
either party in connection with these agreements.
F-37
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
The Management Companies have lease agreements with an affiliated party
covering office space occupied by the management offices located in Tampa,
Florida (the "Tampa Office"), Atlanta, Georgia (the "Atlanta Office"); and
Chicago, Illinois (the "Chicago Office"). The Management Companies also have a
lease agreement with an affiliated party covering office space occupied by an
area office located in Southern California. The Tampa Office agreement expires
on October 31, 2001, the Atlanta Office agreement expires on June 20, 2001, the
Chicago Office agreement expires on July 11, 2000 and the Southern California
agreement expires on July 31, 2000.
The Management Companies also have seven additional lease agreements
with unaffiliated parties covering space occupied by the management offices
located in Dallas, Texas (the "Dallas Office"); Bethesda, Maryland (the
"Bethesda Office"); Denver, Colorado (the "Denver Office"); Seattle, Washington
(the "Seattle Office"); Scottsdale, Arizona (the "Scottsdale Office") Charlotte,
North Carolina (the "Charlotte Office") and Reynoldsburg, Ohio (the "Lexford
Office"). The lease agreement for the Dallas Office expires on September 30,
2005, the lease agreement for the Bethesda Office expires on February 1, 2004,
the lease agreement for the Denver Office expires on December 31, 2002, the
lease agreement for the Seattle Office expires on June 30, 2003, the lease
agreement for the Scottsdale Office expires on July 31, 2004, the lease
agreement for the Charlotte Office expires on May 31, 2004 and the lease
agreement for the Lexford Office expires on December 31, 2004.
The Management Companies also have a lease agreement with an affiliated
party covering office space occupied by the corporate headquarters located in
Chicago, Illinois. This agreement, as amended, expires on July 31, 2001. In
addition, commencing June 15, 1998, the Management Companies increased the
office space occupied by its corporate personnel. The lease agreement covering
the additional space expires on December 31, 2004.
During the years ended December 31, 1999, 1998 and 1997, total lease
payments incurred, including a portion of real estate taxes, insurance, repairs
and utilities, aggregated $3,271,513, $2,528,150 and $1,491,766, respectively.
The minimum basic aggregate rental commitment under the above described
leases in years succeeding December 31, 1999 is as follows:
<TABLE>
<CAPTION>
------------------ ---------------
Year Amount
------------------ ---------------
<S> <C>
2000 $3,197,959
2001 2,754,510
2002 2,220,692
2003 2,005,051
2004 1,619,293
Thereafter 481,179
------------------ ---------------
Total 12,278,684
------------------ ---------------
</TABLE>
21. REPORTABLE SEGMENTS
The following tables set forth the reconciliation of net income and
total assets for the Operating Partnership's reportable segments for the years
ended December 31, 1999, 1998 and 1997 (see also Note 3 for further discussion).
F-38
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1999 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 1,711,738 $ - $ 1,711,738
Property and maintenance expense (414,026) - (414,026)
Real estate tax and insurance expense (171,289) - (171,289)
Property management expense (61,626) - (61,626)
-----------------------------------------------------
Net operating income 1,064,797 - 1,064,797
Fee and asset management income - 4,970 4,970
Interest income - investment in mortgage notes - 12,559 12,559
Interest and other income - 23,851 23,851
Fee and asset management expense - (3,587) (3,587)
Depreciation expense on non-real estate assets - (7,231) (7,231)
Interest expense:
Expense incurred - (337,189) (337,189)
Amortization of deferred financing costs - (4,084) (4,084)
General and administrative expense - (22,296) (22,296)
Allocation of net income to preference unit/interest holders - (113,196) (113,196)
Adjustment for depreciation expense related to
equity in unconsolidated joint ventures - 1,009 1,009
-----------------------------------------------------
Funds from operations available to OP Units (unaudited) 1,064,797 (445,194) 619,603
Depreciation expense on real estate assets (401,457) - (401,457)
Gain on disposition of properties, net 93,535 - 93,535
Loss on early extinguishment of debt - (451) (451)
Adjustment for depreciation expense related to
equity in unconsolidated joint ventures - (1,009) (1,009)
-----------------------------------------------------
Net income available to OP Unit holders $ 756,875 $ (446,654) $ 310,221
=====================================================
Investment in real estate, net of accumulated depreciation $11,151,167 $ 17,309 $ 11,168,476
=====================================================
Total assets $11,164,035 $ 551,654 $ 11,715,689
=====================================================
</TABLE>
F-39
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1998 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 1,293,560 $ - $ 1,293,560
Property and maintenance expense (326,733) - (326,733)
Real estate tax and insurance expense (126,009) - (126,009)
Property management expense (53,101) - (53,101)
-----------------------------------------------------
Net operating income 787,717 - 787,717
Fee and asset management income - 5,622 5,622
Interest income - investment in mortgage notes - 18,564 18,564
Interest and other income - 19,250 19,250
Fee and asset management expense - (4,279) (4,279)
Depreciation expense on non-real estate assets - (5,361) (5,361)
Interest expense:
Expense incurred - (246,585) (246,585)
Amortization of deferred financing costs - (2,757) (2,757)
General and administrative expense - (20,631) (20,631)
Allocation of net income to preference unit/interest holders - (92,917) (92,917)
Adjustment for amortization of deferred financing costs - 35 35
related to predecessor business
Adjustment for depreciation expense related to equity in - 183 183
unconsolidated joint ventures
-----------------------------------------------------
Funds from operations available to OP Units (unaudited) 787,717 (328,876) 458,841
Depreciation expense on real estate assets (296,508) - (296,508)
Gain on disposition of properties, net 21,703 - 21,703
Adjustment for amortization of deferred financing costs - (35) (35)
related to predecessor business
Adjustment for depreciation expense related to equity in - (183) (183)
Unconsolidated joint ventures
-----------------------------------------------------
Net income available to OP Unit holders $ 512,912 $ (329,094) $ 183,818
=====================================================
Investment in real estate, net of accumulated depreciation $ 10,208,113 $ 15,459 $ 10,223,572
=====================================================
Total assets $ 10,237,999 $ 462,261 $ 10,700,260
=====================================================
</TABLE>
F-40
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
<TABLE>
<CAPTION>
RENTAL REAL CORPORATE/
1997 (AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 707,733 $ - $ 707,733
Property and maintenance expense (176,075) - (176,075)
Real estate tax and insurance expense (69,520) (69,520)
Property management expense (26,793) - (26,793)
-----------------------------------------------------
Net operating income 435,345 - 435,345
Fee and asset management income - 5,697 5,697
Interest income - investment in mortgage notes - 20,366 20,366
Interest and other income - 13,282 13,282
Fee and asset management expense - (3,364) (3,364)
Depreciation expense on non-real estate assets - (3,118) (3,118)
Interest expense:
Expense incurred - (121,324) (121,324)
Amortization of deferred financing costs - (2,523) (2,523)
General and administrative expense - (14,821) (14,821)
Allocation of net income to preference unit/interest holders - (59,012) (59,012)
Adjustment for amortization of deferred financing costs - 235 235
related to predecessor business
-----------------------------------------------------
Funds from operations available to OP Units (unaudited) 435,345 (164,582) 270,763
Depreciation expense on real estate assets (153,526) - (153,526)
Gain on disposition of properties, net 13,838 - 13,838
Adjustment for amortization of deferred financing costs - (235) (235)
related to predecessor business
-----------------------------------------------------
Net income available to OP Unit holders $ 295,657 $ (164,817) $ 130,840
=====================================================
</TABLE>
(1) The Operating Partnership has one primary reportable business segment,
which consists of investment in rental real estate. The Operating
Partnership's primary business is owning, managing, and operating
multifamily residential properties which includes the generation of
rental and other related income through the leasing of apartment units
to tenants.
(2) The Operating Partnership has a segment for corporate level activity
including such items as interest income earned on short-term
investments, interest income earned on investment in mortgage notes,
general and administrative expenses, and interest expense on mortgage
notes payable and unsecured note issuances. In addition, the Operating
Partnership has a segment for third party management activity that is
immaterial and does not meet the threshold requirements of a reportable
segment as provided for in Statement No. 131. Interest expense on debt
is not allocated to individual Properties, even if the Properties
secure such debt.
22. SUBSEQUENT EVENTS
On January 14, 2000, the Company announced it has entered into an
agreement to acquire, in an all cash and debt transaction, Globe Business
Resources, Inc. ("Globe"), one of the nation's largest providers of temporary
corporate housing and furniture rental. Shareholders of Globe will receive
$13.00 per share
F-41
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
upon closing and up to an additional $0.50 per share post closing, upon final
determination of costs, if any, relating to any potential breaches of certain
representations and covenants. At full funding of $13.50 per share, the Company
would pay approximately $64.8 million in cash (based on the 4.8 million Globe
shares currently outstanding). In addition, the Operating Partnership will
assume approximately $69.4 million in debt. The acquisition, which is expected
to close during the second quarter of 2000, does not require approval of the
Company's shareholders but does require Globe shareholder approval.
On January 19, 2000, the Operating Partnership acquired Windmont
Apartments, a 178-unit multifamily property located in Atlanta, GA, from an
unaffiliated third party for a purchase price of approximately $10.3 million.
On January 24, 2000, the Operating Partnership funded $2.3 million for
an initial earnout payment to the developer of Rosecliff Apartments.
On January 25, 2000, the Operating Partnership settled on a $100
million forward starting swap and received $7.1 million in connection therewith.
The amount received will be amortized over the life of the financing transaction
that the Operating Partnership closed on March 20, 2000 (see below).
From January 1, 2000 through March 3, 2000, the Operating Partnership
repaid the outstanding mortgage balances on three properties in the aggregate
amount of $12.8 million.
On February 4, 2000, the Operating Partnership disposed of Lakeridge at
the Moors Apartments, a 175-unit multifamily property located in Miami, FL, to
an unaffiliated party for a total sales price of $10 million.
On February 9, 2000, the Operating Partnership disposed of Sonnet Cove
I&II Apartments, a 331-unit multifamily property located in Lexington, KY, to an
unaffiliated party for a total sales price of $12.3 million.
On February 25, 2000, the Operating Partnership disposed of Yuma Court
Apartments, a 40-unit multifamily property located in Colorado Springs, CO, to
an unaffiliated party for a total sales price of $2.4 million.
On February 25, 2000, the Operating Partnership disposed of Oaks of
Lakebridge Apartments, a 170-unit multifamily property located in Ormond Beach,
FL, to an unaffiliated party for a total sales price of $7.8 million.
On February 25, 2000, the Operating Partnership disposed of Indigo
Plantation Apartments, a 304-unit multifamily property located in Daytona Beach,
FL, to an unaffiliated party for a total sales price of $14.2 million.
On March 3, 2000, Lexford Properties, L.P., a subsidiary
of the Operating Partnership, issued 1.1 million units of 8.50% Series B
Cumulative Convertible Redeemable Preference Units with an equity value of $55.0
million. Lexford Properties, L.P. received $53.6 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The 1.1
million units are exchangeable into 1.1 million shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of EQR. The Series
M-1 Preferred Shares are not convertible to EQR Common Shares. Dividends for the
Series B Preference Units or the Series M-1 Preferred Shares are payable
quarterly at the
F-42
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
rate of $4.25 per unit/share per year.
On March 20, 2000, the Operating Partnership obtained new mortgage
financing on eleven previously unencumbered properties in the amount of $148.3
million.
23. QUARTERLY FINANCIAL DATA (UNAUDITED):
The following unaudited quarterly data has been prepared on the basis
of a December 31 year-end. The 1999 and 1998 net income per weighted average OP
Unit amounts have been presented and, where appropriate, restated to comply with
Statement of Financial Accounting Standards No. 128, Earnings Per Share. For
further discussion of net income per weighted average OP Unit outstanding and
impact of Statement No. 128, see Note 14 of Notes to Consolidated Financial
Statements. Amounts are in thousands, except for per OP Unit amounts.
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
1999 3/31 6/30 9/30 12/31
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TOTAL REVENUES $416,137 $422,222 $435,188 $479,571
========= ========= ========= ========
NET INCOME $100,680 $104,050 $102,931 $115,756
======== ========= ========= ========
NET INCOME AVAILABLE TO OP UNIT
HOLDERS $71,237 $76,250 $74,924 $87,810
======= ======== ======== =======
WEIGHTED AVERAGE
OP UNITS OUTSTANDING 132,066 133,378 134,993 139,486
======= ======= ======= =======
NET INCOME PER OP UNIT - BASIC $0.54 $0.57 $0.56 $0.63
===== ===== ===== =====
NET INCOME PER OP UNIT - DILUTED $0.54 $0.57 $0.55 $0.63
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
1998 3/31 6/30 9/30 12/31
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TOTAL REVENUES $286,291 $306,959 $339,249 $404,497
========= ========= ========= ========
NET INCOME $61,275 $72,357 $61,102 $82,001
======== ======== ======== =======
NET INCOME AVAILABLE TO OP UNIT
HOLDERS $39,583 $50,665 $39,411 $54,159
======== ======== ======== =======
WEIGHTED AVERAGE
OP UNITS OUTSTANDING 102,948 107,182 109,688 126,794
======= ======= ======= =======
NET INCOME PER OP UNIT - BASIC $0.38 $0.47 $0.36 $0.43
===== ===== ===== =====
NET INCOME PER OP UNIT - DILUTED $0.38 $0.47 $0.36 $0.42
===== ===== ===== =====
</TABLE>
F-43
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
2300 Elliott Seattle, WA $ - $ 796,700 $ 7,173,725 $ 100 $2,935,619
2900 on First Combined Seattle, WA - 1,176,400 10,600,360 1,300 1,221,640
3000 Grand Des Moines, IA - 858,305 7,736,013 - 1,479,910
740 River Drive St. Paul, MN 6,648,364 1,620,000 11,232,943 6,700 667,316
7979 Westheimer Houston, TX - 1,388,400 12,497,975 1,700 1,403,830
Acacia Creek Scottsdale, AZ 20,790,723 6,121,856 35,380,172 - 826,219
Acadia Court Bloomington, IN 2,092,837 257,484 2,317,353 - 4,007
Acadia Court II Bloomington, IN 1,806,908 253,636 2,282,721 - 3,287
Adams Farm Greensboro, NC - 2,350,000 30,073,197 - 192,947
Alderwood Park Lynnwood, WA 4,030,879 3,760,000 8,110,530 7,400 251,284
Altamonte San Antonio, TX (S) 1,663,100 14,986,474 1,970 1,079,239
Amberidge Detroit, MI 919,875 130,844 1,177,598 - 2,644
Amberton Manassas, VA 10,597,067 888,800 8,474,461 11,800 953,021
Amberwood (OH) Canton, OH 887,691 126,227 1,136,042 - 3,281
Amberwood I (FL) Jacksonville, FL 397,879 101,744 915,696 - 1,612
Amesbury I Columbus, OH 1,228,447 143,039 1,287,355 - 6,063
Amesbury II Columbus, OH 1,275,358 180,588 1,625,293 - 2,489
Amhurst (Tol) Toledo, OH 804,321 161,854 1,456,683 - 3,345
Amhurst I (OH) Dayton, OH 902,927 152,574 1,373,165 - 5,899
Amhurst II (OH) Dayton, OH 934,952 159,416 1,434,748 - 3,173
Andover Court Columbus, OH 719,453 123,875 1,114,873 - 750
Annhurst (IN) Indianpolis, IN 1,275,000 189,235 1,703,117 - 25,662
Annhurst (PA) Pittsburgh, PA 1,951,830 307,952 2,771,572 - 7,495
Annhurst II (OH) Columbus, OH 1,064,340 116,739 1,050,648 - 964
Annhurst III (OH) Columbus, OH 866,157 134,788 1,213,092 - 4,691
Ansley Oaks St. Louis, IL - 134,522 1,210,697 - 6,779
Apple Ridge I Columbus, OH 1,036,653 139,300 1,253,697 - 2,067
Apple Ridge III Columbus, OH 577,684 72,585 653,268 - 2,113
Apple Run (MI) Jackson, MI 497,314 87,459 787,133 - 3,227
Apple Run II (Col) Columbus, OH - 93,810 844,292 - 2,107
Applegate (Chi) Columbus, OH 529,497 7,738 69,640 - 2,236
Applegate (Col) Bloomington, IN 940,163 171,829 1,546,462 - 2,971
Applegate (Lor) Youngstown, OH 512,809 66,488 598,393 - 2,843
Applegate I (IN) Muncie, IN 924,977 138,506 1,246,551 - 17,867
Applegate II (IN) Muncie, IN 1,236,009 180,017 1,620,150 - 10,066
Applerun (War) Youngstown, OH 670,142 113,303 1,019,729 - 1,083
Applewood I & II Daytona Beach, FL 2,193,626 235,230 2,117,074 - 46,153
Aragon Woods Indianpolis, IN 1,104,739 157,791 1,420,119 - 8,996
Arbor Glen Pittsfield Twp, MI - 1,092,300 9,887,635 3,764 329,195
Arboretum (AZ) Tucson, AZ (P) 3,453,446 19,020,019 - 602,827
Arboretum (GA) Atlanta, GA - 4,679,400 15,937,649 2,900 505,371
Arboretum (MA) Canton, MA (S) 4,680,000 10,995,641 5,900 110,930
Arbors at Century Center Memphis, TN - 2,520,000 15,236,996 1,700 326,386
Arbors of Brentwood Nashville, TN (D) 404,570 13,536,367 100 958,708
Arbors of Hickory Hollow Nashville, TN (D) 202,285 6,937,209 700 1,613,360
Arbors of Las Colinas Irving, TX - 1,662,300 15,385,713 1,600 1,163,452
Ashford Hill Columbus, OH 1,400,000 184,985 1,664,868 - 5,143
Ashgrove (IN) Indianpolis, IN 866,676 172,924 1,556,316 - 4,337
Ashgrove (KY) Louisville, KY 1,050,088 171,816 1,546,342 - 4,136
Ashgrove (Mar) Battle Creek, MI 839,002 119,823 1,078,405 - 2,800
Ashgrove (OH) Cincinnati, OH 1,261,088 157,535 1,417,811 - 3,088
Ashgrove I (MI) Detroit, MI 3,284,510 403,580 3,632,218 - 7,742
Ashgrove II (MI) Detroit, MI 2,301,646 311,912 2,807,210 - 5,130
Ashton, The Corona Hills, CA - 2,594,264 33,042,398 - 381,532
Aspen Crossing Silver Spring, MD - 2,880,000 8,561,456 - 207,627
Audubon Village Tampa, FL - 3,576,000 26,121,909 - 407,722
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
2300 Elliott $ 796,800 $ 10,109,344 $ 10,906,144 $ (922,189) 1992 30 Years
2900 on First Combined 1,177,700 11,822,000 12,999,700 (1,560,994) 1989-91 30 Years
3000 Grand 858,305 9,215,923 10,074,228 (5,333,188) 1970 30 Years
740 River Drive 1,626,700 11,900,258 13,526,958 (904,264) 1962 30 Years
7979 Westheimer 1,390,100 13,901,805 15,291,905 (2,580,432) 1973 30 Years
Acacia Creek 6,121,856 36,206,391 42,328,247 (2,731,863) 1988-1994 30 Years
Acadia Court 257,484 2,321,360 2,578,844 (20,996) 1985 30 Years
Acadia Court II 253,636 2,286,008 2,539,643 (20,862) 1986 30 Years
Adams Farm 2,350,000 30,266,144 32,616,144 (1,381,592) 1987 30 Years
Alderwood Park 3,767,400 8,361,813 12,129,213 (448,619) 1982 30 Years
Altamonte 1,665,070 16,065,713 17,730,783 (3,306,194) 1985 30 Years
Amberidge 130,844 1,180,241 1,311,085 (10,682) 1985 30 Years
Amberton 900,600 9,427,482 10,328,082 (1,758,943) 1986 30 Years
Amberwood (OH) 126,227 1,139,323 1,265,550 (10,627) 1987 30 Years
Amberwood I (FL) 101,744 917,309 1,019,053 (8,521) 1981 30 Years
Amesbury I 143,039 1,293,418 1,436,458 (12,005) 1986 30 Years
Amesbury II 180,588 1,627,782 1,808,370 (14,957) 1987 30 Years
Amhurst (Tol) 161,854 1,460,028 1,621,882 (13,191) 1983 30 Years
Amhurst I (OH) 152,574 1,379,064 1,531,638 (12,854) 1979 30 Years
Amhurst II (OH) 159,416 1,437,921 1,597,337 (13,293) 1981 30 Years
Andover Court 123,875 1,115,623 1,239,498 (10,163) 1982 30 Years
Annhurst (IN) 189,235 1,728,780 1,918,015 (16,379) 1985 30 Years
Annhurst (PA) 307,952 2,779,067 3,087,019 (24,948) 1984 30 Years
Annhurst II (OH) 116,739 1,051,612 1,168,351 (9,682) 1986 30 Years
Annhurst III (OH) 134,788 1,217,784 1,352,572 (11,136) 1988 30 Years
Ansley Oaks 134,522 1,217,476 1,351,998 (11,446) 1986 30 Years
Apple Ridge I 139,300 1,255,765 1,395,064 (11,513) 1987 30 Years
Apple Ridge III 72,585 655,381 727,967 (6,005) 1982 30 Years
Apple Run (MI) 87,459 790,361 877,820 (7,314) 1982 30 Years
Apple Run II (Col) 93,810 846,399 940,210 (7,951) 1980 30 Years
Applegate (Chi) 7,738 71,876 79,613 (1,330) 1981 30 Years
Applegate (Col) 171,829 1,549,433 1,721,262 (13,939) 1982 30 Years
Applegate (Lor) 66,488 601,236 667,724 (5,698) 1982 30 Years
Applegate I (IN) 138,506 1,264,418 1,402,923 (11,476) 1984 30 Years
Applegate II (IN) 180,017 1,630,216 1,810,233 (15,034) 1987 30 Years
Applerun (War) 113,303 1,020,812 1,134,115 (9,329) 1983 30 Years
Applewood I & II 235,230 2,163,227 2,398,457 (22,519) 1982 30 Years
Aragon Woods 157,791 1,429,115 1,586,906 (13,287) 1986 30 Years
Arbor Glen 1,096,064 10,216,830 11,312,895 (814,768) 1990 30 Years
Arboretum (AZ) 3,453,446 19,622,846 23,076,292 (1,571,619) 1987 30 Years
Arboretum (GA) 4,682,300 16,443,020 21,125,320 (1,264,590) 1970 30 Years
Arboretum (MA) 4,685,900 11,106,571 15,792,471 (644,133) 1989 30 Years
Arbors at Century Center 2,521,700 15,563,382 18,085,082 (859,174) 1988/1990 30 Years
Arbors of Brentwood 404,670 14,495,074 14,899,744 (3,465,757) 1986 30 Years
Arbors of Hickory Hollow 202,985 8,550,569 8,753,554 (2,474,364) 1986 30 Years
Arbors of Las Colinas 1,663,900 16,549,165 18,213,065 (3,681,305) 1984/85 30 Years
Ashford Hill 184,985 1,670,011 1,854,996 (15,312) 1986 30 Years
Ashgrove (IN) 172,924 1,560,653 1,733,577 (14,028) 1983 30 Years
Ashgrove (KY) 171,816 1,550,478 1,722,293 (14,040) 1984 30 Years
Ashgrove (Mar) 119,823 1,081,204 1,201,027 (9,912) 1983 30 Years
Ashgrove (OH) 157,535 1,420,900 1,578,434 (12,950) 1983 30 Years
Ashgrove I (MI) 403,580 3,639,960 4,043,540 (32,433) 1985 30 Years
Ashgrove II (MI) 311,912 2,812,340 3,124,253 (25,053) 1987 30 Years
Ashton, The 2,594,264 33,423,929 36,018,193 (2,464,027) 1986 30 Years
Aspen Crossing 2,880,000 8,769,083 11,649,083 (307,059) 1979 30 Years
Audubon Village 3,576,000 26,529,631 30,105,631 (1,214,035) 1990 30 Years
</TABLE>
S-1
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Augustine Club Tallahassee, FL - 1,110,000 8,906,841 - 51,948
Autumn Cove Atlanta, GA 741,297 187,220 1,684,983 - 1,536
Autumn Creek Cordova, TN (E) 1,680,000 9,345,282 1,900 170,212
Auvers Village Orlando, FL - 3,840,000 29,322,243 - 317,058
Bainbridge Durham, NC - 1,042,900 9,688,677 33,400 1,169,267
Balcones Club Austin, TX - 2,184,000 10,128,165 1,500 442,458
Banyan Lake Boynton Beach, FL - 2,736,000 11,227,892 2,600 553,268
Barrington Atlanta, GA 1,018,645 144,459 1,300,132 - 8,774
Bay Club Phoenix, AZ - 828,100 6,221,786 100 1,595,448
Bay Ridge San Pedro, CA - 2,385,399 2,176,963 15,901 42,715
Bayside Lakeland, FL - 73,463 661,165 - 6,044
Bayside at the Islands Gilbert, AZ (O) 3,306,484 15,573,006 - 248,089
Beach Club Fort Myers, FL - 2,080,000 14,800,928 - 374,079
Bear Canyon Tucson, AZ 8,482,946 1,660,608 11,228,524 - 84,261
Beckford Place (IN) Indianpolis, IN 715,911 99,046 891,413 - 15,144
Beckford Place (Pla) Parkersburg, OH 1,013,959 161,161 1,450,447 - 14,180
Beckford Place (Wap) Lima, OH 620,607 76,491 688,419 - 2,224
Beckford Place I (OH) Canton, OH 1,161,993 168,426 1,515,830 - 2,538
Beckford Place II (OH) Canton, OH 1,229,833 172,134 1,549,209 - 2,446
Bel Aire I Miami, FL - 188,343 1,695,084 - 8,251
Bel Aire II Miami, FL - 136,416 1,227,745 - 6,957
Bell Road I & II Nashville, TN - 3,100,000 846,693 - -
Bellevue Meadows Bellevue, WA - 4,500,000 12,574,814 7,100 84,737
Belmont Crossing Riverdale, GA - 1,580,000 18,449,045 - 122,063
Belmont Landing Riverdale, GA - 2,120,000 21,651,256 - 220,121
Beneva Place Sarasota, FL 8,700,000 1,344,000 9,665,447 - 98,710
Berkshire Place Charlotte, NC - 805,550 12,540,032 - 93,866
Bermuda Cove Jacksonville, FL - 1,503,000 19,561,896 - 196,306
Berry Pines Pensacola, FL 989,344 154,086 1,386,772 - 11,378
Birches, The Lima, OH 973,805 94,798 853,180 - 1,869
Bishop Park Winter Park, FL - 2,592,000 17,982,357 - 1,217,731
Blue Swan San Antonio, TX (E) 1,424,800 7,596,023 700 400,660
Blueberry Hill I Orlando, FL 738,919 140,370 1,263,328 - 4,073
Boulder Creek Wilsonville, OR - 3,552,000 11,485,309 2,400 544,576
Bourbon Square Combined Palatine, IL 26,950,227 3,982,600 35,870,194 2,700 5,323,864
Bradford Place St. Louis, IL 1,098,789 140,356 1,263,208 - 8,912
Bramblewood San Jose, CA - 5,184,000 9,658,072 6,700 143,451
Branchwood Orlando, FL - 324,069 2,916,617 - 3,175
Brandon Court Bloomington, IN 1,428,498 170,636 1,535,722 - 6,044
Brandywine E. Lakeland, FL 595,521 88,126 793,138 - 2,152
Breckenridge Lexington, KY 9,162,971 1,645,800 14,845,715 2,500 484,825
Brentwood Vancouver, WA - 1,318,200 12,202,521 39,021 849,109
Breton Mill Houston, TX (F) 212,720 8,547,263 100 742,697
Briarwood (CA) Sunnyvale, CA 14,103,692 9,984,000 22,265,278 7,500 63,517
Bridford Lakes Greensboro, NC - 2,265,314 25,823,941 - 342,755
Bridge Creek Wilsonville, OR - 1,294,600 11,690,114 5,290 1,524,030
Bridgeport Raleigh, NC - 1,296,200 11,942,278 500 297,325
Bridgewater at Wells Crossing Orange Park, FL - 2,160,000 13,347,474 - (20,800)
Brierwood Jacksonville, FL - 546,100 4,965,856 5,800 717,682
Brittany Square Tulsa, OK - 625,000 4,236,498 - 650,495
Brixworth Nashville, TN - 1,172,100 10,564,856 1,700 356,644
Broadway Garland, TX 6,106,827 1,440,000 7,803,082 3,700 315,030
Brookdale Village Naperville, IL 11,490,000 3,276,000 16,360,060 - 76,870
Brookfield Salt Lake City, UT - 1,152,000 5,682,453 1,000 120,039
Brookridge Centreville, VA (E) 2,520,000 16,007,356 1,500 238,305
Brookside (CO) Boulder, CO - 3,600,000 10,212,594 400 36,220
Brookside (MD) Frederick, MD 8,203,145 2,736,000 8,156,453 - 50,702
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Augustine Club 1,110,000 8,958,789 10,068,789 (419,933) 1988 30 Years
Autumn Cove 187,220 1,686,519 1,873,739 (14,911) 1985 30 Years
Autumn Creek 1,681,900 9,515,494 11,197,394 (803,105) 1991 30 Years
Auvers Village 3,840,000 29,639,301 33,479,301 (1,343,424) 1991 30 Years
Bainbridge 1,076,300 10,857,944 11,934,244 (2,345,416) 1984 30 Years
Balcones Club 2,185,500 10,570,623 12,756,123 (777,309) 1984 30 Years
Banyan Lake 2,738,600 11,781,160 14,519,760 (1,231,543) 1986 30 Years
Barrington 144,459 1,308,906 1,453,365 (11,919) 1984 30 Years
Bay Club 828,200 7,817,234 8,645,434 (2,061,881) 1976 30 Years
Bay Ridge 2,401,300 2,219,678 4,620,978 (228,161) 1987 30 Years
Bayside 73,463 667,210 740,672 (6,597) 1982 30 Years
Bayside at the Islands 3,306,484 15,821,095 19,127,579 (1,188,034) 1989 30 Years
Beach Club 2,080,000 15,175,007 17,255,007 (719,580) 1990 30 Years
Bear Canyon 1,660,608 11,312,784 12,973,392 (850,529) 1996 30 Years
Beckford Place (IN) 99,046 906,558 1,005,603 (8,496) 1984 30 Years
Beckford Place (Pla) 161,161 1,464,627 1,625,788 (13,460) 1982 30 Years
Beckford Place (Wap) 76,491 690,643 767,134 (6,449) 1981 30 Years
Beckford Place I (OH) 168,426 1,518,368 1,686,794 (13,733) 1983 30 Years
Beckford Place II (OH) 172,134 1,551,655 1,723,789 (13,975) 1985 30 Years
Bel Aire I 188,343 1,703,335 1,891,678 (15,413) 1985 30 Years
Bel Aire II 136,416 1,234,702 1,371,118 (11,173) 1986 30 Years
Bell Road I & II 3,100,000 846,693 3,946,693 - (R) 30 Years
Bellevue Meadows 4,507,100 12,659,552 17,166,652 (686,762) 1983 30 Years
Belmont Crossing 1,580,000 18,571,108 20,151,108 (845,370) 1988 30 Years
Belmont Landing 2,120,000 21,871,377 23,991,377 (1,001,635) 1988 30 Years
Beneva Place 1,344,000 9,764,156 11,108,156 (449,277) 1986 30 Years
Berkshire Place 805,550 12,633,898 13,439,448 (581,657) 1982 30 Years
Bermuda Cove 1,503,000 19,758,202 21,261,202 (896,951) 1989 30 Years
Berry Pines 154,086 1,398,150 1,552,236 (13,025) 1985 30 Years
Birches, The 94,798 855,048 949,846 (8,117) 1977 30 Years
Bishop Park 2,592,000 19,200,088 21,792,088 (865,075) 1991 30 Years
Blue Swan 1,425,500 7,996,683 9,422,183 (708,614) 1985-1994 30 Years
Blueberry Hill I 140,370 1,267,401 1,407,771 (11,808) 1986 30 Years
Boulder Creek 3,554,400 12,029,885 15,584,285 (1,265,906) 1991 30 Years
Bourbon Square Combined 3,985,300 41,194,058 45,179,358 (9,308,546) 1984-87 30 Years
Bradford Place 140,356 1,272,120 1,412,477 (11,769) 1986 30 Years
Bramblewood 5,190,700 9,801,522 14,992,222 (522,533) 1986 30 Years
Branchwood 324,069 2,919,791 3,243,860 (26,379) 1981 30 Years
Brandon Court 170,636 1,541,765 1,712,401 (14,224) 1984 30 Years
Brandywine E. 88,126 795,290 883,416 (7,316) 1981 30 Years
Breckenridge 1,648,300 15,330,540 16,978,840 (1,235,360) 1986-1987 30 Years
Brentwood 1,357,221 13,051,631 14,408,852 (2,423,484) 1990 30 Years
Breton Mill 212,820 9,289,960 9,502,780 (2,138,545) 1986 30 Years
Briarwood (CA) 9,991,500 22,328,795 32,320,295 (1,102,269) 1985 30 Years
Bridford Lakes 2,265,314 26,166,696 28,432,010 (1,228,501) 1999 30 Years
Bridge Creek 1,299,890 13,214,144 14,514,034 (3,026,340) 1987 30 Years
Bridgeport 1,296,700 12,239,604 13,536,304 (2,691,810) 1990 30 Years
Bridgewater at Wells Crossing 2,160,000 13,326,674 15,486,674 (21,021) 1986 30 Years
Brierwood 551,900 5,683,537 6,235,437 (830,482) 1974 30 Years
Brittany Square 625,000 4,886,993 5,511,993 (2,683,742) 1982 30 Years
Brixworth 1,173,800 10,921,500 12,095,300 (1,401,742) 1985 30 Years
Broadway 1,443,700 8,118,112 9,561,812 (495,896) 1983 30 Years
Brookdale Village 3,276,000 16,436,929 19,712,929 (276,898) 1986 30 Years
Brookfield 1,153,000 5,802,492 6,955,492 (502,518) 1985 30 Years
Brookridge 2,521,500 16,245,660 18,767,160 (1,310,622) 1989 30 Years
Brookside (CO) 3,600,400 10,248,814 13,849,214 (580,483) 1993 30 Years
Brookside (MD) 2,736,000 8,207,155 10,943,155 (211,691) 1993 30 Years
</TABLE>
S-2
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Brookside II (MD) Frederick, MD - 2,448,000 6,929,404 2,800 346,930
Brunswick (IL) Champaign, IL 1,392,689 199,520 1,795,683 - 4,831
Brunswick I (WV) Pittsburgh, PA 1,693,948 241,739 2,175,654 - 17,670
Brunswick II (WV) Pittsburgh, WV 1,284,805 202,928 1,826,354 - 9,842
Burwick Farms Howell, MI 9,176,084 1,102,200 9,932,207 2,400 250,695
Calais Dallas, TX - 1,118,900 10,070,076 - 424,486
California Gardens Jacksonville, FL - 105,528 949,754 - 8,619
Cambridge at Hickory Hollow Nashville, TN (U) 3,240,000 17,903,507 800 211,835
Cambridge Commons I Indianapolis, IN - 179,139 1,612,253 - 23,097
Cambridge Commons II Indianapolis, IN 889,905 141,845 1,276,607 - 27,778
Cambridge Commons III Indianapolis, IN - 98,125 883,124 - 13,875
Cambridge Village Lewisville, TX - 800,000 8,762,606 1,300 410,179
Camden Way I Jacksonville, GA 923,892 109,240 983,156 - 11,408
Camden Way II Jacksonville, GA 745,698 105,552 949,969 - 1,024
Camellero Scottsdale, AZ 11,597,077 1,923,600 17,324,593 1,300 2,791,342
Camellia Court (KY) Louisville, KY 593,319 115,620 1,040,578 - 1,492
Camellia Court (OH) Columbus, OH 565,693 68,584 617,254 - 2,642
Camellia Court I (Col) Columbus, OH 1,007,909 133,059 1,197,529 - 4,245
Camellia Court I (Day) Dayton, OH 1,096,022 131,858 1,186,725 - 4,285
Camellia Court II (Col) Columbus, OH 945,285 118,421 1,065,788 - 1,315
Camellia Court II (Day) Dayton, OH 780,269 131,571 1,184,138 - 2,417
Candlelight I Tampa, FL 606,065 105,000 945,002 - 5,210
Candlelight II Tampa, FL 600,666 95,061 855,551 - 6,404
Canterbury Germantown, MD 31,363,911 2,781,300 26,711,251 - 2,941,680
Canterbury Crossings Orlando, FL - 273,671 2,463,037 - 4,393
Canterchase Nashville, TN 5,627,420 862,200 7,765,192 1,400 552,637
Canyon Creek (AZ) Tucson, AZ - 834,313 6,083,047 100 381,397
Canyon Crest Santa Clarita, CA - 2,370,000 10,147,286 - 180,685
Canyon Crest Views Riverside, CA - 1,744,640 17,397,194 - 239,927
Canyon Ridge San Diego, CA - 4,869,448 11,955,064 - 191,180
Canyon Sands Phoenix, AZ - 1,475,900 13,436,146 16,850 510,150
Cardinal, The Greensboro, NC 7,324,402 1,280,000 11,850,557 1,200 194,770
Carleton Court (PA) Erie, PA - 128,528 1,156,756 - 3,325
Carleton Court (WV) Charleston, WV 1,341,720 196,222 1,766,001 - 2,820
Carmel Terrace San Diego, CA - 2,288,300 20,596,281 - 504,482
Carolina Crossing Greenville, SC - 547,800 4,949,619 2,400 219,279
Carriage Hill Macon, GA 688,124 131,911 1,187,196 - 583
Carriage Homes at Wyndham Glen Allen, VA - 1,736,000 27,448,696 - 35,987
Casa Capricorn San Diego, CA - 1,260,100 11,365,093 2,600 415,546
Casa Ruiz San Diego, CA - 3,920,000 9,389,153 2,400 173,918
Cascade at Landmark Alexandria, VA - 3,601,000 19,672,036 2,400 386,827
Catalina Shores Las Vegas, NV - 1,222,200 11,042,867 4,800 616,049
Catalina Shores (WRP) Las Vegas, NV - 1,427,200 12,844,277 - 136,297
Cedar Crest Overland Park, KS 14,108,784 2,159,800 19,425,812 900 1,689,519
Cedar Hill Knoxville, TN 1,452,748 204,792 1,843,131 - 6,112
Cedar Ridge (TX) Arlington, TX 3,537,028 605,000 4,238,427 3,600 58,401
Cedargate (GA) Atlanta, GA 860,724 205,043 1,845,391 - 1,873
Cedargate (MI) Southbend, IN 798,043 120,378 1,083,403 - 2,139
Cedargate (She) Louisville, KY 1,205,960 158,685 1,428,168 - 4,208
Cedargate I (Cla) Dayton, OH 1,237,463 159,599 1,436,393 - 3,128
Cedargate I (IN) Bloomington, IN 1,115,965 191,650 1,724,853 - 932
Cedargate I (KY) Louisville, KY 847,702 165,397 1,488,569 - 9,136
Cedargate I (OH) Columbus, OH 2,249,899 240,587 2,165,281 - 7,465
Cedargate II (IN) Bloomington, IN 1,106,850 165,041 1,485,367 - 501
Cedargate II (KY) Louisville, KY 1,160,000 140,895 1,268,055 - 2,459
Cedargate II (OH) Columbus, OH 703,354 87,618 788,563 - 5,656
Cedars, The Charlotte, NC -- 2,025,300 18,225,424 2,879 454,674
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Brookside II (MD) 2,450,800 7,276,335 9,727,135 (425,804) 1979 30 Years
Brunswick (IL) 199,520 1,800,513 2,000,034 (16,411) 1986 30 Years
Brunswick I (WV) 241,739 2,193,325 2,435,064 (20,211) 1986 30 Years
Brunswick II (WV) 202,928 1,836,196 2,039,125 (16,777) 1987 30 Years
Burwick Farms 1,104,600 10,182,902 11,287,502 (876,755) 1991 30 Years
Calais 1,118,900 10,494,562 11,613,462 (1,052,951) 1986 30 Years
California Gardens 105,528 958,372 1,063,900 (9,393) 1987 30 Years
Cambridge at Hickory Hollow 3,240,800 18,115,343 21,356,143 (1,520,957) 1997 30 Years
Cambridge Commons I 179,139 1,635,349 1,814,488 (15,364) 1986 30 Years
Cambridge Commons II 141,845 1,304,386 1,446,231 (12,550) 1987 30 Years
Cambridge Commons III 98,125 896,999 995,124 (8,971) 1988 30 Years
Cambridge Village 801,300 9,172,786 9,974,086 (856,706) 1987 30 Years
Camden Way I 109,240 994,564 1,103,803 (9,527) 1985 30 Years
Camden Way II 105,552 950,993 1,056,545 (8,908) 1986 30 Years
Camellero 1,924,900 20,115,935 22,040,835 (3,362,648) 1979 30 Years
Camellia Court (KY) 115,620 1,042,070 1,157,690 (9,638) 1982 30 Years
Camellia Court (OH) 68,584 619,896 688,480 (5,902) 1981 30 Years
Camellia Court I (Col) 133,059 1,201,774 1,334,833 (11,185) 1981 30 Years
Camellia Court I (Day) 131,858 1,191,010 1,322,868 (10,946) 1981 30 Years
Camellia Court II (Col) 118,421 1,067,103 1,185,524 (9,591) 1984 30 Years
Camellia Court II (Day) 131,571 1,186,555 1,318,125 (10,820) 1982 30 Years
Candlelight I 105,000 950,213 1,055,213 (8,874) 1982 30 Years
Candlelight II 95,061 861,955 957,016 (8,365) 1985 30 Years
Canterbury 2,781,300 29,652,931 32,434,231 (5,545,041) 1986 30 Years
Canterbury Crossings 273,671 2,467,430 2,741,100 (21,854) 1983 30 Years
Canterchase 863,600 8,317,829 9,181,429 (1,166,563) 1985 30 Years
Canyon Creek (AZ) 834,413 6,464,444 7,298,857 (1,596,443) 1986 30 Years
Canyon Crest 2,370,000 10,327,972 12,697,972 (226,931) 1993 30 Years
Canyon Crest Views 1,744,640 17,637,121 19,381,761 (1,274,377) 1982-1983 30 Years
Canyon Ridge 4,869,448 12,146,244 17,015,692 (892,881) 1989 30 Years
Canyon Sands 1,492,750 13,946,296 15,439,046 (2,061,724) 1983 30 Years
Cardinal, The 1,281,200 12,045,327 13,326,527 (1,247,214) 1994 30 Years
Carleton Court (PA) 128,528 1,160,081 1,288,609 (10,774) 1985 30 Years
Carleton Court (WV) 196,222 1,768,822 1,965,044 (16,028) 1985 30 Years
Carmel Terrace 2,288,300 21,100,763 23,389,063 (3,931,878) 1988-89 30 Years
Carolina Crossing 550,200 5,168,898 5,719,098 (460,588) 1988-89 30 Years
Carriage Hill 131,911 1,187,779 1,319,690 (10,920) 1985 30 Years
Carriage Homes at Wyndham 1,736,000 27,484,683 29,220,683 (1,206,396) 1999 30 Years
Casa Capricorn 1,262,700 11,780,639 13,043,339 (1,417,659) 1981 30 Years
Casa Ruiz 3,922,400 9,563,071 13,485,471 (837,630) 1976-1986 30 Years
Cascade at Landmark 3,603,400 20,058,863 23,662,263 (1,895,299) 1990 30 Years
Catalina Shores 1,227,000 11,658,916 12,885,916 (2,439,001) 1989 30 Years
Catalina Shores (WRP) 1,427,200 12,980,574 14,407,774 (1,246,328) 1989 30 Years
Cedar Crest 2,160,700 21,115,331 23,276,031 (2,848,098) 1986 30 Years
Cedar Hill 204,792 1,849,243 2,054,036 (16,777) 1986 30 Years
Cedar Ridge (TX) 608,600 4,296,829 4,905,429 (247,895) 1980 30 Years
Cedargate (GA) 205,043 1,847,264 2,052,308 (16,359) 1983 30 Years
Cedargate (MI) 120,378 1,085,542 1,205,920 (9,961) 1983 30 Years
Cedargate (She) 158,685 1,432,376 1,591,061 (13,045) 1984 30 Years
Cedargate I (Cla) 159,599 1,439,521 1,599,120 (13,087) 1984 30 Years
Cedargate I (IN) 191,650 1,725,785 1,917,435 (15,546) 1983 30 Years
Cedargate I (KY) 165,397 1,497,705 1,663,101 (13,653) 1983 30 Years
Cedargate I (OH) 240,587 2,172,746 2,413,333 (20,157) 1982 30 Years
Cedargate II (IN) 165,041 1,485,868 1,650,909 (13,370) 1985 30 Years
Cedargate II (KY) 140,895 1,270,514 1,411,409 (11,597) 1986 30 Years
Cedargate II (OH) 87,618 794,219 881,837 (7,599) 1983 30 Years
Cedars, The 2,028,179 18,680,098 20,708,277 (1,264,053) 1983 30 Years
</TABLE>
S-3
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Cedarwood (OH) Parkersburg, OH 429,100 23,916 215,243 - 7,433
Cedarwood I (Bel) Parkersburg, OH - 82,082 738,735 - 2,249
Cedarwood I (FL) Ocala, FL 742,098 119,470 1,075,226 - 5,118
Cedarwood I and II (IN) Elkhart, IN 1,935,444 251,745 2,265,704 - 5,809
Cedarwood I (KY) Lexington, KY 725,701 106,681 960,127 - 6,114
Cedarwood II (FL) Ocala, FL 565,693 98,372 885,352 - 824
Cedarwood II (KY) Lexington, KY 996,680 106,724 960,518 - 10,626
Cedarwood III (KY) Lexington, KY 851,423 102,491 922,420 - 8,760
Celebration Westchase Houston, TX - 2,204,590 6,667,960 100 959,088
Centre Lake III Miami, FL 4,746,131 685,601 6,170,412 - 21,744
Champion Oaks Houston, TX 6,594,689 931,900 8,389,394 - 698,062
Champions Club Glen Allen, VA - 954,000 12,417,167 - 224,038
Champion's Park Norcross, GA - 1,134,000 14,570,304 - 149,012
Chandler Court Chandler, AZ - 1,352,600 12,175,173 500 1,328,359
Chandler's Bay Kent, WA - 1,503,400 13,640,021 3,500 1,114,241
Chantecleer Lakes Naperville, IL (E) 6,688,000 16,341,986 1,400 421,596
Chaparral Largo, FL - 303,100 6,261,338 - 3,178,219
Chardonnay Park Redmond, WA 3,426,890 1,297,500 6,725,737 - 63,719
Charing Cross Toledo, OH 804,122 154,584 1,391,260 - 1,200
Charter Club Everett, WA - 998,700 9,012,305 2,400 330,203
Chartwell Court Houston, TX - 1,215,000 12,827,843 700 137,139
Chatelaine Park Duluth, GA - 1,818,000 24,489,671 - 126,922
Chatham Wood High Point, NC - 700,000 8,311,884 - 158,743
Chelsea Court Cleveland, OH 684,336 145,835 1,312,517 - 2,496
Chelsea Square Redmond, WA - 3,390,000 9,289,074 7,100 75,975
Cherry Creek I,II,&III (TN) Hermitage, TN - 2,942,345 45,483,592 - 38,332
Cherry Glen I & II Indianapolis, IN 3,176,114 335,596 3,020,362 - 15,041
Cherry Hill Seattle, WA - 700,100 6,300,112 - 93,802
Cherry Tree Baltimore, MD 2,009,159 352,003 3,168,025 - 8,880
Chestnut Hills Tacoma, WA - 756,300 6,806,635 - 166,132
Cheyenne Crest Colorado Springs, CO - 73,950 4,131,145 100 749,398
Chicksaw Crossing Orlando, FL 11,707,137 2,044,000 12,366,832 - 146,530
Chimneys Charlotte, NC - 904,700 8,154,674 2,400 434,384
Cierra Crest Denver, CO 21,409,834 4,800,000 34,894,898 3,100 180,735
Cimarron Ridge Denver, CO - 1,591,100 14,320,031 - 951,302
Cityscape South Louis Park, MN (U) 1,560,000 10,794,604 3,200 184,970
Claire Point Jacksonville, FL - 2,048,000 14,649,393 - 214,007
Clarion Decatur, GA - 1,501,900 13,537,919 2,400 107,696
Clarys Crossing Columbia, MD - 891,000 15,489,721 - 98,932
Classic, The Stamford, CT - 2,880,000 19,918,680 3,500 313,369
Clearlake Pines II Melbourne, FL 893,282 119,280 1,073,518 - 1,967
Clearview I Indianapolis, IN 1,091,745 182,206 1,639,850 - 4,333
Clearview II Indianapolis, IN - 226,963 2,042,667 - 5,337
Clearwater Cleveland, OH 1,036,652 128,303 1,154,728 - 2,234
Cloisters on the Green Lexington, KY - 187,074 1,746,721 - 2,315,324
Club at Tanasbourne Hillsboro, OR 10,981,261 3,520,000 16,271,439 1,300 712,875
Club at the Green Beaverton, OR - 2,030,150 12,622,687 800 610,142
Coach Lantern Scarborough, ME - 450,000 4,405,723 2,900 109,901
Coachman Trails Plymouth, MN 6,491,117 1,224,000 9,532,005 3,000 163,946
Coconut Palm Club Coconut Creek, GA - 3,000,000 17,689,319 1,700 322,508
Colinas Pointe Denver, CO (E) 1,587,400 14,285,902 - 286,023
Colony Place Fort Myers, FL - 1,500,000 20,920,274 - 194,577
Colony Woods Birmingham, AL 12,628,842 1,656,000 21,787,686 1,300 101,463
Concord Square Cincinnati, OH - 121,509 1,093,577 - 1,138
Concord Square (IN) Kokomo, IN 749,854 123,247 1,109,220 - 4,837
Concord Square I & II (OH) Mansfield, OH 1,240,279 164,124 1,477,118 - 4,349
Concorde Bridge Overland Park, KS - 1,972,400 17,776,438 2,400 535,564
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Cedarwood (OH) 23,916 222,676 246,592 (2,513) 1982 30 Years
Cedarwood I (Bel) 82,082 740,983 823,065 (6,987) 1980 30 Years
Cedarwood I (FL) 119,470 1,080,344 1,199,814 (10,037) 1978 30 Years
Cedarwood I and II (IN) 251,745 2,271,513 2,523,258 (20,481) 1983/84 30 Years
Cedarwood I (KY) 106,681 966,241 1,072,922 (9,053) 1984 30 Years
Cedarwood II (FL) 98,372 886,177 984,549 (8,056) 1980 30 Years
Cedarwood II (KY) 106,724 971,144 1,077,868 (9,205) 1986 30 Years
Cedarwood III (KY) 102,491 931,180 1,033,671 (8,704) 1986 30 Years
Celebration Westchase 2,204,690 7,627,048 9,831,738 (2,157,668) 1979 30 Years
Centre Lake III 685,601 6,192,157 6,877,758 (55,787) 1986 30 Years
Champion Oaks 931,900 9,087,455 10,019,355 (1,876,080) 1984 30 Years
Champions Club 954,000 12,641,205 13,595,205 (574,482) 1988 30 Years
Champion's Park 1,134,000 14,719,315 15,853,315 (672,437) 1987 30 Years
Chandler Court 1,353,100 13,503,532 14,856,632 (1,968,600) 1987 30 Years
Chandler's Bay 1,506,900 14,754,262 16,261,162 (2,950,212) 1989 30 Years
Chantecleer Lakes 6,689,400 16,763,582 23,452,982 (1,399,079) 1986 30 Years
Chaparral 303,100 9,439,557 9,742,656 (6,636,364) 1976 30 Years
Chardonnay Park 1,297,500 6,789,456 8,086,956 (597,014) 1982-1989 30 Years
Charing Cross 154,584 1,392,460 1,547,044 (12,732) 1978 30 Years
Charter Club 1,001,100 9,342,507 10,343,607 (2,031,374) 1991 30 Years
Chartwell Court 1,215,700 12,964,982 14,180,682 (960,130) 1995 30 Years
Chatelaine Park 1,818,000 24,616,593 26,434,593 (1,092,990) 1995 30 Years
Chatham Wood 700,000 8,470,627 9,170,627 (408,826) 1986 30 Years
Chelsea Court 145,835 1,315,014 1,460,849 (12,049) 1981 30 Years
Chelsea Square 3,397,100 9,365,049 12,762,149 (502,839) 1991 30 Years
Cherry Creek I,II,&III (TN) 2,942,345 45,521,924 48,464,269 (1,315,473) 1986/96 30 Years
Cherry Glen I & II 335,596 3,035,402 3,370,998 (27,894) 1986/87 30 Years
Cherry Hill 700,100 6,393,914 7,094,014 (608,893) 1991 30 Years
Cherry Tree 352,003 3,176,905 3,528,908 (28,275) 1986 30 Years
Chestnut Hills 756,300 6,972,767 7,729,067 (701,302) 1991 30 Years
Cheyenne Crest 74,050 4,880,543 4,954,593 (1,332,855) 1984 30 Years
Chicksaw Crossing 2,044,000 12,513,362 14,557,362 (587,728) 1986 30 Years
Chimneys 907,100 8,589,058 9,496,158 (757,432) 1974 30 Years
Cierra Crest 4,803,100 35,075,632 39,878,732 (2,574,457) 1996 30 Years
Cimarron Ridge 1,591,100 15,271,333 16,862,433 (1,569,561) 1984 30 Years
Cityscape 1,563,200 10,979,573 12,542,773 (798,782) 1990 30 Years
Claire Point 2,048,000 14,863,400 16,911,400 (679,020) 1986 30 Years
Clarion 1,504,300 13,645,616 15,149,916 (1,107,543) 1990 30 Years
Clarys Crossing 891,000 15,588,653 16,479,653 (698,024) 1984 30 Years
Classic, The 2,883,500 20,232,050 23,115,550 (1,599,059) 1990 30 Years
Clearlake Pines II 119,280 1,075,484 1,194,764 (9,861) 1985 30 Years
Clearview I 182,206 1,644,183 1,826,388 (14,950) 1986 30 Years
Clearview II 226,963 2,048,005 2,274,968 (18,479) 1987 30 Years
Clearwater 128,303 1,156,962 1,285,265 (10,381) 1986 30 Years
Cloisters on the Green 187,074 4,062,045 4,249,119 (2,989,242) 1974 30 Years
Club at Tanasbourne 3,521,300 16,984,314 20,505,614 (1,720,349) 1990 30 Years
Club at the Green 2,030,950 13,232,829 15,263,779 (1,388,047) 1991 30 Years
Coach Lantern 452,900 4,515,624 4,968,524 (314,592) 1971/1981 30 Years
Coachman Trails 1,227,000 9,695,951 10,922,951 (520,267) 1987 30 Years
Coconut Palm Club 3,001,700 18,011,827 21,013,527 (1,038,093) 1992 30 Years
Colinas Pointe 1,587,400 14,571,925 16,159,325 (1,396,068) 1986 30 Years
Colony Place 1,500,000 21,114,851 22,614,851 (950,675) 1991 30 Years
Colony Woods 1,657,300 21,889,148 23,546,448 (1,164,356) 1991/1994 30 Years
Concord Square 121,509 1,094,715 1,216,223 (9,967) 1982 30 Years
Concord Square (IN) 123,247 1,114,057 1,237,303 (10,217) 1983 30 Years
Concord Square I & II (OH) 164,124 1,481,466 1,645,590 (13,691) 1981/83 30 Years
Concorde Bridge 1,974,800 18,312,002 20,286,802 (1,507,828) 1973 30 Years
</TABLE>
S-4
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Conway Station Orlando, FL - 1,936,000 10,852,858 - 119,516
Copper Canyon Denver, CO - 1,443,000 16,064,368 - 10,517
Copper Creek Phoenix, AZ - 1,017,400 9,148,068 - 304,674
Copper Hill Bedford, TX - 1,020,000 6,001,680 1,800 370,936
Copper Terrace Orlando, FL - 1,200,000 17,887,868 - 387,322
Copperfield San Antonio, TX - 791,200 7,121,171 - 437,383
Country Brook Chandler, AZ (O) 1,505,219 29,542,535 - 273,686
Country Club Place (FL) Pembroke Pines, FL - 912,000 10,016,543 - 318,621
Country Club Village Seattle, WA - 1,150,500 10,352,179 - 526,284
Country Gables Beaverton, OR 8,204,727 1,580,500 14,248,239 1,200,000 481,350
Country Ridge Farmington Hills, MI (U) 1,605,800 14,599,936 16,150 550,397
Countryside San Antonio, TX - 667,500 6,008,259 100 412,423
Countryside I Daytona Beach, FL - 136,665 1,229,981 - 16,073
Countryside II Daytona Beach, FL - 234,633 2,111,700 - 8,391
Countryside Manor Atlanta, GA 1,163,328 298,186 2,683,678 - 52,218
Coventry at Cityview Fort Worth, TX - 2,160,000 23,072,847 - 98,094
Creekside (San Mateo) San Mateo, CA 14,503,372 9,600,000 21,193,232 6,600 135,586
Creekside Homes at Legacy Plano. TX - 4,560,000 32,275,748 - 105,379
Creekside Village Mountlake Terrace, WA 14,826,887 2,802,900 25,270,594 4,700 1,380,117
Creekwood Charlotte, NC - 1,859,300 16,740,569 2,400 291,533
Crescent at Cherry Creek Denver, CO (E) 2,592,000 15,149,470 2,000 203,737
Cross Creek Charlotte, NC 12,628,842 3,150,000 20,299,439 1,600 226,589
Crossing at Green Valley Las Vegas, NV 10,214,792 2,408,500 21,673,209 - 559,613
Crosswinds St. Petersburg, FL - 1,561,200 5,777,205 - 528,718
Crown Court Phoenix, AZ - 3,156,600 28,414,599 - 822,085
Crystal Creek Phoenix, AZ - 952,900 8,581,704 600 689,464
Crystal Village Attleboro, MA - 1,365,000 4,992,817 4,000 222,939
Cypress Panama City, FL 1,421,807 171,882 1,546,941 - 5,514
Cypress Cove Melbourne, FL - 1,630,000 19,020,939 - 121,373
Cypress Point Las Vegas, NV - 953,800 8,636,551 5,890 660,432
Daniel Court Cincinnati, OH 2,339,616 334,101 3,006,906 - 48,439
Dartmouth Place I Akron, OH - 151,771 1,365,939 - 673
Dartmouth Place II Akron, OH 835,726 130,102 1,170,914 - 1,258
Dartmouth Woods Denver, CO 4,283,469 1,608,000 10,832,754 1,800 170,582
Dawntree Carrollton, TX - 1,204,600 10,851,833 900 1,957,423
Deerbrook Jacksonville, FL - 1,008,000 8,845,716 - 268,237
Deerwood (Corona) Corona, CA - 4,740,000 20,313,008 2,200 443,272
Deerwood (FL) Orlando, FL 874,672 114,948 1,034,533 - 2,643
Deerwood (SD) San Diego, CA - 2,075,700 18,740,815 6,395 3,100,942
Deerwood Meadows Greensboro, NC - 986,643 7,204,362 100 673,335
Defoor Village Atlanta, GA - 2,964,000 10,573,374 2,400 73,350
Del Coronado Mesa, AZ (N) 1,963,200 17,680,640 1,200 970,090
Desert Park Las Vegas, NV - 1,085,400 9,759,958 - 670,709
Desert Sands Phoenix, AZ - 1,464,200 13,331,581 16,850 1,139,193
Dogwood Glen I Indianpolis, IN 1,750,348 240,855 2,167,693 - 8,496
Dogwood Glen II Indianpolis, IN 1,364,537 202,397 1,821,571 - 6,718
Dos Caminos Phoenix, AZ - 1,727,900 15,567,778 - 644,151
Dover Place I Cleveland, OH 1,126,709 244,294 2,198,644 - 4,301
Dover Place II Cleveland, OH 1,623,551 230,895 2,078,058 - 644
Dover Place III Cleveland, OH 769,313 119,835 1,078,516 - 51
Dover Place IV Cleveland, OH 1,868,332 261,912 2,357,208 - 117
Driftwood Jacksonville, FL 346,206 126,357 1,137,216 - 3,381
Duraleigh Woods Raleigh, NC - 1,629,000 19,917,750 - 816,697
Eagle Canyon Chino Hills, CA - 1,806,800 16,279,860 2,100 374,756
Eagle Rim Redmond, WA - 976,200 8,801,849 1,600 586,880
East Pointe Charlotte, NC 9,324,851 1,364,100 12,295,246 1,800 1,204,794
Edgewood Woodinville, WA 5,765,994 1,068,200 9,632,980 1,900 482,907
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Conway Station 1,936,000 10,972,375 12,908,375 (512,582) 1987 30 Years
Copper Canyon 1,443,000 16,074,885 17,517,885 (464,397) 1999 30 Years
Copper Creek 1,017,400 9,452,742 10,470,142 (898,503) 1984 30 Years
Copper Hill 1,021,800 6,372,616 7,394,416 (387,204) 1983 30 Years
Copper Terrace 1,200,000 18,275,190 19,475,190 (827,643) 1989 30 Years
Copperfield 791,200 7,558,554 8,349,754 (843,648) 1984 30 Years
Country Brook 1,505,219 29,816,221 31,321,440 (2,166,522) 1986-1996 30 Years
Country Club Place (FL) 912,000 10,335,164 11,247,164 (480,928) 1987 30 Years
Country Club Village 1,150,500 10,878,463 12,028,963 (1,016,737) 1991 30 Years
Country Gables 2,780,500 14,729,589 17,510,089 (1,571,653) 1991 30 Years
Country Ridge 1,621,950 15,150,333 16,772,283 (2,092,845) 1986 30 Years
Countryside 667,600 6,420,682 7,088,282 (698,035) 1980 30 Years
Countryside I 136,665 1,246,054 1,382,719 (11,733) 1982 30 Years
Countryside II 234,633 2,120,091 2,354,724 (19,424) 1982 30 Years
Countryside Manor 298,186 2,735,896 3,034,083 (24,672) 1985 30 Years
Coventry at Cityview 2,160,000 23,170,941 25,330,941 (1,032,613) 1996 30 Years
Creekside (San Mateo) 9,606,600 21,328,817 30,935,417 (1,126,487) 1985 30 Years
Creekside Homes at Legacy 4,560,000 32,381,127 36,941,127 (1,420,194) 1998 30 Years
Creekside Village 2,807,600 26,650,711 29,458,311 (5,117,588) 1987 30 Years
Creekwood 1,861,700 17,032,101 18,893,801 (1,441,955) 1987-1990 30 Years
Crescent at Cherry Creek 2,594,000 15,353,207 17,947,207 (1,201,679) 1994 30 Years
Cross Creek 3,151,600 20,526,028 23,677,628 (1,165,524) 1989 30 Years
Crossing at Green Valley 2,408,500 22,232,822 24,641,322 (2,105,455) 1986 30 Years
Crosswinds 1,561,200 6,305,923 7,867,123 (637,241) 1986 30 Years
Crown Court 3,156,600 29,236,684 32,393,284 (2,810,106) 1987 30 Years
Crystal Creek 953,500 9,271,168 10,224,668 (1,723,802) 1985 30 Years
Crystal Village 1,369,000 5,215,756 6,584,756 (386,720) 1974 30 Years
Cypress 171,882 1,552,455 1,724,337 (14,243) 1985 30 Years
Cypress Cove 1,630,000 19,142,312 20,772,312 (867,992) 1990 30 Years
Cypress Point 959,690 9,296,983 10,256,673 (1,999,455) 1989 30 Years
Daniel Court 334,101 3,055,345 3,389,446 (28,239) 1985 30 Years
Dartmouth Place I 151,771 1,366,612 1,518,383 (12,284) 1982 30 Years
Dartmouth Place II 130,102 1,172,172 1,302,273 (10,597) 1986 30 Years
Dartmouth Woods 1,609,800 11,003,336 12,613,136 (1,104,796) 1990 30 Years
Dawntree 1,205,500 12,809,256 14,014,756 (2,696,547) 1982 30 Years
Deerbrook 1,008,000 9,113,953 10,121,953 (428,249) 1983 30 Years
Deerwood (Corona) 4,742,200 20,756,280 25,498,480 (1,709,155) 1992 30 Years
Deerwood (FL) 114,948 1,037,176 1,152,124 (9,520) 1982 30 Years
Deerwood (SD) 2,082,095 21,841,758 23,923,853 (4,942,798) 1990 30 Years
Deerwood Meadows 986,743 7,877,697 8,864,440 (2,048,569) 1986 30 Years
Defoor Village 2,966,400 10,646,725 13,613,125 (589,285) 1997 30 Years
Del Coronado 1,964,400 18,650,730 20,615,130 (3,191,774) 1985 30 Years
Desert Park 1,085,400 10,430,667 11,516,067 (1,742,920) 1987 30 Years
Desert Sands 1,481,050 14,470,774 15,951,824 (2,077,285) 1982 30 Years
Dogwood Glen I 240,855 2,176,189 2,417,043 (19,715) 1986 30 Years
Dogwood Glen II 202,397 1,828,289 2,030,685 (16,643) 1987 30 Years
Dos Caminos 1,727,900 16,211,929 17,939,829 (1,563,082) 1983 30 Years
Dover Place I 244,294 2,202,945 2,447,239 (19,485) 1982 30 Years
Dover Place II 230,895 2,078,702 2,309,597 (18,414) 1983 30 Years
Dover Place III 119,835 1,078,567 1,198,402 (9,489) 1983 30 Years
Dover Place IV 261,912 2,357,325 2,619,236 (20,848) 1986 30 Years
Driftwood 126,357 1,140,597 1,266,955 (10,643) 1985 30 Years
Duraleigh Woods 1,629,000 20,734,447 22,363,447 (948,536) 1987 30 Years
Eagle Canyon 1,808,900 16,654,615 18,463,515 (2,016,417) 1985 30 Years
Eagle Rim 977,800 9,388,729 10,366,529 (1,880,558) 1986-88 30 Years
East Pointe 1,365,900 13,500,040 14,865,940 (3,183,576) 1987 30 Years
Edgewood 1,070,100 10,115,887 11,185,987 (2,038,593) 1986 30 Years
</TABLE>
S-5
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Elmtree Park I Indianpolis, IN 1,488,803 157,687 1,419,184 - 4,451
Elmtree Park II Indianpolis, IN 935,749 114,114 1,027,027 - 7,967
Elmwood (GA) Atlanta, GA 828,235 183,756 1,653,808 - 5,018
Elmwood I (FL) W. Palm Beach, FL 1,338,661 163,389 1,470,498 - 5,064
Elmwood II (FL) W. Palm Beach, FL 1,339,923 179,743 1,617,691 - 1,787
Emerald Bay Winter Park, FL - 2,160,000 13,549,968 1,600 766,134
Emerald Place Bermuda Dunes, CA - 954,400 8,609,599 2,100 658,459
Emerson Place Combined Boston, MA - 14,850,000 57,582,798 5,000 936,486
Enclave, The Tempe, AZ (P) 1,500,192 19,281,399 - 124,309
English Hills Charlotte, NC - 1,260,000 12,554,291 - 241,048
Esprit Del Sol Solana Beach, CA - 5,110,000 11,913,045 1,200 153,817
Essex Place Overland Park, KS - 1,831,900 16,513,586 3,500 2,347,676
Essex Place (FL) Tampa, FL - 1,188,000 7,106,384 - 122,091
Estate at Quarry Lake Austin, TX 12,454,239 1,963,000 18,972,537 - 179,131
Ethans Glen III Kansas City, MO 2,366,364 244,100 2,221,562 2,400 94,857
Ethans Ridge I Kansas City, MO 16,232,216 1,945,900 17,563,769 2,400 706,019
Ethans Ridge II Kansas City, MO 10,991,981 1,465,500 13,176,233 2,635 231,760
Fairfield Combined Stamford, CT - 6,500,000 39,425,167 10,200 187,599
Fairland Gardens Silver Spring, MD - 6,000,000 19,978,402 - 370,801
Falls Tampa, FL - 1,440,000 8,445,778 - 170,773
Farmington Gates Germantown, TN - 969,700 8,786,180 4,098 478,095
Farnham Park Houston, TX 11,356,588 1,512,000 14,234,419 600 158,866
Fernbrook Townhomes Plymouth, MN 5,196,328 576,000 6,683,693 4,100 -
Fielder Crossing Arlington, TX 3,373,279 714,000 3,935,453 4,100 39,730
Firdale Village Seattle, WA - 2,279,400 20,496,049 - 499,849
Fireside Park Rockville, MD 8,749,542 4,248,000 10,099,286 - 82,030
Forest Glen Pensacola, FL 1,078,228 161,548 1,453,936 - 12,777
Forest Place Tampa, FL 10,594,977 1,708,000 8,612,029 - 235,685
Forest Ridge I & II Arlington, TX - 2,339,300 21,266,573 23,400 1,254,610
Forest Valley San Antonio, TX - 590,000 5,310,328 - 197,987
Forest Village Macon, GA 1,231,993 224,022 2,016,196 - 3,762
Forsythia Court (KY) Louisville, KY 1,926,833 279,450 2,515,053 - 4,253
Forsythia Court (MD) Baltimore, MD 2,085,646 251,955 2,267,597 - 2,310
Forsythia Court II (MD) Baltimore, MD 2,320,497 239,834 2,158,502 - 4,356
Fountain Creek Phoenix, AZ - 686,000 6,177,920 500 423,043
Fountain Place I Eden Prairie, MN 24,676,652 2,399,900 21,678,609 5,168 503,200
Fountain Place II Eden Prairie, MN 12,612,600 1,226,500 11,087,407 4,850 205,532
Fountainhead Combined San Antonio, TX (S) 3,617,449 14,131,386 - 1,344,210
Fountains at Flamingo Las Vegas, NV - 3,180,900 28,650,076 2,200 782,801
Four Lakes Lisle, IL 10,344,569 2,465,000 13,091,599 - 8,785,388
Four Lakes 5 Lisle, IL (S) 600,000 18,717,933 - 1,397,362
Fox Run (WA) Federal Way, WA - 638,500 5,760,413 1,200 569,763
Foxchase Grand Prairie, TX - 781,500 7,621,196 200 549,368
Foxcroft Scarborough, ME - 520,000 4,527,409 3,400 180,361
Foxhaven Canton, OH 1,816,369 256,821 2,311,388 - 3,619
Foxton (MI) Detriot, MI 897,474 156,363 1,407,262 - 3,896
Foxton II (OH) Dayton, OH 1,381,197 165,806 1,492,250 - 5,268
Garden Court Detriot, MI 2,123,809 351,532 3,163,785 - 4,343
Garden Lake Riverdale, GA - 1,464,500 13,186,716 2,400 319,603
Garden Terrace I Tampa, FL 593,409 93,144 838,295 - 4,504
Garden Terrace II Tampa, FL 678,182 97,120 874,077 - 9,394
Gatehouse at Pine Lake Plantation , FL - 1,886,200 17,070,795 10,400 514,172
Gatehouse on the Green Pembroke Pines, FL - 2,216,800 20,056,270 11,400 637,607
Gates at Carlson Center Minnetonka, MN (Q) 4,350,000 23,802,817 5,200 638,657
Gates of Redmond Redmond, WA 6,222,662 2,305,600 12,122,006 500 266,081
Gateway Villas Scottsdale, AZ - 1,431,048 14,926,833 - 88,014
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Elmtree Park I 157,687 1,423,636 1,581,323 (13,162) 1986 30 Years
Elmtree Park II 114,114 1,034,995 1,149,109 (9,742) 1987 30 Years
Elmwood (GA) 183,756 1,658,826 1,842,583 (14,713) 1984 30 Years
Elmwood I (FL) 163,389 1,475,562 1,638,951 (13,308) 1984 30 Years
Elmwood II (FL) 179,743 1,619,478 1,799,221 (14,376) 1984 30 Years
Emerald Bay 2,161,600 14,316,102 16,477,702 (1,107,336) 1972 30 Years
Emerald Place 956,500 9,268,058 10,224,558 (2,146,222) 1988 30 Years
Emerson Place Combined 14,855,000 58,519,284 73,374,284 (3,413,919) 1962 30 Years
Enclave, The 1,500,192 19,405,708 20,905,900 (1,389,414) 1994 30 Years
English Hills 1,260,000 12,795,339 14,055,339 (602,187) 1984 30 Years
Esprit Del Sol 5,111,200 12,066,862 17,178,062 (595,282) 1986 30 Years
Essex Place 1,835,400 18,861,261 20,696,661 (4,115,387) 1970-84 30 Years
Essex Place (FL) 1,188,000 7,228,476 8,416,476 (334,076) 1989 30 Years
Estate at Quarry Lake 1,963,000 19,151,668 21,114,668 (865,054) 1995 30 Years
Ethans Glen III 246,500 2,316,420 2,562,920 (183,034) 1990 30 Years
Ethans Ridge I 1,948,300 18,269,788 20,218,088 (1,431,763) 1988 30 Years
Ethans Ridge II 1,468,135 13,407,993 14,876,128 (1,024,418) 1990 30 Years
Fairfield Combined 6,510,200 39,612,765 46,122,965 (2,423,749) 1996 30 Years
Fairland Gardens 6,000,000 20,349,202 26,349,202 (582,927) 1981 30 Years
Falls 1,440,000 8,616,551 10,056,551 (414,270) 1985 30 Years
Farmington Gates 973,798 9,264,274 10,238,072 (723,242) 1976 30 Years
Farnham Park 1,512,600 14,393,284 15,905,884 (989,376) 1996 30 Years
Fernbrook Townhomes 580,100 6,683,693 7,263,793 (328,876) 1993 30 Years
Fielder Crossing 718,100 3,975,183 4,693,283 (230,318) 1980 30 Years
Firdale Village 2,279,400 20,995,897 23,275,297 (2,040,106) 1986 30 Years
Fireside Park 4,248,000 10,181,316 14,429,316 (362,944) 1961 30 Years
Forest Glen 161,548 1,466,713 1,628,262 (13,625) 1986 30 Years
Forest Place 1,708,000 8,847,714 10,555,714 (439,668) 1985 30 Years
Forest Ridge I & II 2,362,700 22,521,183 24,883,883 (3,355,354) 1984/85 30 Years
Forest Valley 590,000 5,508,315 6,098,315 (581,196) 1983 30 Years
Forest Village 224,022 2,019,958 2,243,980 (18,298) 1983 30 Years
Forsythia Court (KY) 279,450 2,519,306 2,798,756 (22,721) 1985 30 Years
Forsythia Court (MD) 251,955 2,269,907 2,521,862 (20,235) 1986 30 Years
Forsythia Court II (MD) 239,834 2,162,858 2,402,691 (19,421) 1987 30 Years
Fountain Creek 686,500 6,600,963 7,287,463 (1,204,197) 1984 30 Years
Fountain Place I 2,405,068 22,181,809 24,586,877 (1,673,205) 1989 30 Years
Fountain Place II 1,231,350 11,292,939 12,524,289 (840,451) 1989 30 Years
Fountainhead Combined 3,617,449 15,475,596 19,093,045 (6,874,617) 1985/1987 30 Years
Fountains at Flamingo 3,183,100 29,432,877 32,615,977 (5,583,649) 1989-91 30 Years
Four Lakes 2,465,000 21,876,987 24,341,987 (11,901,961) 1968/1988* 30 Years
Four Lakes 5 600,000 20,115,295 20,715,295 (7,936,713) 1968/1988* 30 Years
Fox Run (WA) 639,700 6,330,175 6,969,875 (1,374,796) 1988 30 Years
Foxchase 781,700 8,170,564 8,952,264 (851,504) 1983 30 Years
Foxcroft 523,400 4,707,770 5,231,170 (324,960) 1977/1979 30 Years
Foxhaven 256,821 2,315,007 2,571,828 (21,160) 1986 30 Years
Foxton (MI) 156,363 1,411,159 1,567,521 (12,682) 1983 30 Years
Foxton II (OH) 165,806 1,497,518 1,663,324 (13,965) 1983 30 Years
Garden Court 351,532 3,168,128 3,519,660 (28,179) 1988 30 Years
Garden Lake 1,466,900 13,506,319 14,973,219 (1,136,899) 1991 30 Years
Garden Terrace I 93,144 842,799 935,943 (8,090) 1981 30 Years
Garden Terrace II 97,120 883,471 980,591 (8,688) 1982 30 Years
Gatehouse at Pine Lake 1,896,600 17,584,967 19,481,567 (2,031,874) 1990 30 Years
Gatehouse on the Green 2,228,200 20,693,877 22,922,077 (2,382,963) 1990 30 Years
Gates at Carlson Center 4,355,200 24,441,474 28,796,674 (1,573,137) 1989 30 Years
Gates of Redmond 2,306,100 12,388,087 14,694,187 (1,083,369) 1979 30 Years
Gateway Villas 1,431,048 15,014,847 16,445,895 (1,081,046) 1995 30 Years
</TABLE>
S-6
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Geary Court Yard San Francisco, CA 17,709,692 1,719,400 15,606,269 3,000 219,655
Gentian Oaks Columbus, GA 1,203,778 169,268 1,523,416 - 2,617
Georgian Woods Combined (REIT)Wheaton, MD 18,590,806 5,034,000 28,817,818 4,400 1,956,090
Glen Arm Manor Albany, GA 1,167,058 166,498 1,498,486 - 5,299
Glen Eagle Greenville, SC - 833,500 7,523,244 2,400 138,654
GlenGarry Club Bloomingdale, IL (Q) 3,125,000 15,807,889 4,700 750,843
Glenlake Glendale Heights. IL 14,845,000 5,040,000 16,671,970 1,700 572,258
Glenridge Colorado Springs, CO (F) 884,688 4,650,939 100 607,958
Glenview Huntsville, AL 1,647,376 184,451 1,660,061 - 22,546
Glenwood Village Macon, GA 1,096,813 167,779 1,510,009 - 8,499
Governor's Pointe Roswell, GA (E) 3,744,000 24,520,965 2,600 813,249
Granada Highlands Malden, MA - 28,210,000 99,956,182 - (138,357)
Grandview I & II Las Vegas, NV - 2,325,600 15,527,187 7,700 233,024
Greenbriar Glen Altlanta, GA 1,538,287 227,701 2,049,311 - 5,965
Greengate Marietta, GA - 132,979 1,526,005 - 1,349,931
Greenglen (Day) Dayton, OH 1,141,512 204,289 1,838,604 - 5,377
Greenglen II (Lim) Lima, OH 891,704 87,335 786,015 - 1,024
Greenglen II (Tol) Toledo, OH 814,863 162,264 1,460,373 - 2,255
Greenhaven Union City, CA 10,857,291 7,500,000 15,210,399 7,000 147,711
Greenhouse - Frey Road Atlanta, GA (S) 2,464,900 22,187,443 2,300 1,629,230
Greenhouse - Holcomb Bridge Atlanta, GA (S) 2,142,400 19,291,427 900 1,429,246
Greenhouse - Roswell Atlanta, GA (S) 1,217,500 10,974,727 2,500 1,023,254
Greentree 1 Glen Burnie, MD 11,761,074 3,912,968 11,799,657 - 195,706
Greentree 2 Glen Burnie, MD - 2,700,000 8,261,634 - 72,591
Greentree 3 Glen Burnie, MD 7,245,399 2,380,443 7,294,085 - 62,104
Greenwich Woods Silver Spring, MD 18,426,770 3,095,700 29,226,035 5,300 2,496,472
Greenwood Village Tempe, AZ (O) 2,118,781 17,274,216 - 468,585
Grey Eagle Greenville, SC - 725,200 6,547,650 2,400 126,075
Greystone Atlanta, GA - 2,250,000 5,207,079 2,000 345,842
Gwinnett Crossing Duluth, GA - 2,632,000 32,016,496 - 331,101
Hall Place Quincy, MA - 3,150,000 5,121,950 800 30,725
Hammock's Place Miami, FL (F) 319,080 12,513,467 100 684,686
Hampshire Court Ft. Wayne, IN - 101,297 911,672 - 1,812
Hampshire II Cleveland, OH 860,000.00 126,231 1,136,082 - 2,529
Hamptons Tacoma, WA 5,857,832 1,119,200 10,075,844 - 250,024
Harbinwood Atlanta, GA 1,627,164 236,761 2,130,849 - 5,012
Harbor Pointe Milwaukee, WI 12,000,000 2,975,000 22,096,546 4,800 937,057
Harborview San Pedro, CA 12,104,725 6,400,000 12,633,175 2,500 260,840
Harrison Park Tucson, AZ (O) 1,265,094 16,342,322 - 219,481
Hartwick Anderson, IN 727,948 123,791 1,114,115 - 8,316
Harvest Grove Conyers, GA - 752,000 18,717,899 - 155,391
Harvest Grove I Columbus, OH 1,637,684 170,334 1,533,007 - 2,826
Harvest Grove II Columbus, OH 1,076,969 148,792 1,339,124 - 4,038
Hatcherway Jacksonville, GA 745,042 96,885 871,969 - 4,129
Hathaway Long Beach, CA - 2,512,200 22,611,912 300 747,836
Hayfield Park Cincinnati, KY 1,577,277 261,457 2,353,111 - 2,958
Haywood Pointe Greenville, SC - 480,000 9,163,271 - 95,060
Hearthstone San Antonio, TX - 1,035,700 3,525,388 200 674,597
Heathmoore (Eva) Evansville, IN 1,155,071 162,375 1,461,371 - 3,232
Heathmoore (KY) Louisville, KY 927,105 156,840 1,411,559 - 3,290
Heathmoore (MI) Detriot, MI 1,725,257 227,105 2,043,945 - 2,156
Heathmoore I (IN) Indianapolis, IN 1,229,295 144,557 1,301,010 - 5,939
Heathmoore I (MI) Detriot, MI 1,564,304 232,064 2,088,575 - 3,353
Heathmoore II (MI) Detriot, MI 918,553 170,433 1,533,893 - 3,534
Heritage, The Phoenix, AZ (O) 1,211,205 13,136,903 - 91,266
Heron Cove Coral Springs, FL - 823,000 8,114,762 - 578,453
Heron Landing (J) Lauderhill, FL - 707,100 6,406,776 4,700 469,761
Heron Pointe Boynton Beach, FL - 1,546,700 7,804,414 - 538,442
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Geary Court Yard 1,722,400 15,825,925 17,548,325 (1,148,571) 1990 30 Years
Gentian Oaks 169,268 1,526,034 1,695,302 (13,817) 1985 30 Years
Georgian Woods Combined (REIT) 5,038,400 30,773,909 35,812,309 (4,708,939) 1967 30 Years
Glen Arm Manor 166,498 1,503,786 1,670,284 (13,819) 1986 30 Years
Glen Eagle 835,900 7,661,897 8,497,797 (657,971) 1990 30 Years
GlenGarry Club 3,129,700 16,558,731 19,688,431 (1,077,078) 1989 30 Years
Glenlake 5,041,700 17,244,228 22,285,928 (1,341,810) 1988 30 Years
Glenridge 884,788 5,258,897 6,143,685 (1,393,882) 1985 30 Years
Glenview 184,451 1,682,607 1,867,058 (15,893) 1986 30 Years
Glenwood Village 167,779 1,518,508 1,686,287 (14,184) 1986 30 Years
Governor's Pointe 3,746,600 25,334,214 29,080,814 (2,071,813) 1982-1986 30 Years
Granada Highlands 28,210,000 99,817,825 128,027,825 (616,003) 1972 30 Years
Grandview I & II 2,333,300 15,760,211 18,093,511 (919,023) 1980 30 Years
Greenbriar Glen 227,701 2,055,276 2,282,977 (18,554) 1988 30 Years
Greengate 132,979 2,875,936 3,008,915 (1,780,427) 1971 30 Years
Greenglen (Day) 204,289 1,843,980 2,048,270 (16,738) 1983 30 Years
Greenglen II (Lim) 87,335 787,039 874,374 (7,469) 1981 30 Years
Greenglen II (Tol) 162,264 1,462,628 1,624,891 (13,234) 1982 30 Years
Greenhaven 7,507,000 15,358,110 22,865,110 (791,410) 1983 30 Years
Greenhouse - Frey Road 2,467,200 23,816,673 26,283,873 (4,903,879) 1985 30 Years
Greenhouse - Holcomb Bridge 2,143,300 20,720,674 22,863,974 (4,363,006) 1985 30 Years
Greenhouse - Roswell 1,220,000 11,997,982 13,217,982 (2,525,185) 1985 30 Years
Greentree 1 3,912,968 11,995,363 15,908,331 (240,618) 1973 30 Years
Greentree 2 2,700,000 8,334,225 11,034,225 (136,124) 1973 30 Years
Greentree 3 2,380,443 7,356,189 9,736,632 (143,473) 1973 30 Years
Greenwich Woods 3,101,000 31,722,507 34,823,507 (6,410,863) 1967 30 Years
Greenwood Village 2,118,781 17,742,801 19,861,582 (1,349,731) 1984 30 Years
Grey Eagle 727,600 6,673,725 7,401,325 (567,982) 1991 30 Years
Greystone 2,252,000 5,552,921 7,804,921 (334,766) 1960 30 Years
Gwinnett Crossing 2,632,000 32,347,597 34,979,597 (1,483,650) 1989/90 30 Years
Hall Place 3,150,800 5,152,674 8,303,474 (198,701) 1998 30 Years
Hammock's Place 319,180 13,198,153 13,517,333 (3,089,391) 1986 30 Years
Hampshire Court 101,297 913,484 1,014,780 (8,413) 1982 30 Years
Hampshire II 126,231 1,138,612 1,264,843 (10,487) 1981 30 Years
Hamptons 1,119,200 10,325,869 11,445,069 (1,031,315) 1991 30 Years
Harbinwood 236,761 2,135,861 2,372,622 (19,145) 1985 30 Years
Harbor Pointe 2,979,800 23,033,603 26,013,403 (1,608,231) 1970/1990 30 Years
Harborview 6,402,500 12,894,015 19,296,515 (1,337,178) 1985 30 Years
Harrison Park 1,265,094 16,561,803 17,826,897 (1,256,808) 1985 30 Years
Hartwick 123,791 1,122,431 1,246,222 (10,246) 1982 30 Years
Harvest Grove 752,000 18,873,290 19,625,290 (872,861) 1986 30 Years
Harvest Grove I 170,334 1,535,832 1,706,166 (14,069) 1986 30 Years
Harvest Grove II 148,792 1,343,162 1,491,953 (12,252) 1987 30 Years
Hatcherway 96,885 876,098 972,984 (8,439) 1986 30 Years
Hathaway 2,512,500 23,359,748 25,872,248 (3,763,231) 1987 30 Years
Hayfield Park 261,457 2,356,069 2,617,526 (21,110) 1986 30 Years
Haywood Pointe 480,000 9,258,331 9,738,331 (435,792) 1985 30 Years
Hearthstone 1,035,900 4,199,985 5,235,885 (1,101,530) 1982 30 Years
Heathmoore (Eva) 162,375 1,464,603 1,626,977 (13,526) 1984 30 Years
Heathmoore (KY) 156,840 1,414,848 1,571,688 (12,914) 1983 30 Years
Heathmoore (MI) 227,105 2,046,102 2,273,207 (18,315) 1983 30 Years
Heathmoore I (IN) 144,557 1,306,950 1,451,506 (11,949) 1983 30 Years
Heathmoore I (MI) 232,064 2,091,928 2,323,992 (18,517) 1986 30 Years
Heathmoore II (MI) 170,433 1,537,427 1,707,860 (13,772) 1986 30 Years
Heritage, The 1,211,205 13,228,170 14,439,375 (968,755) 1995 30 Years
Heron Cove 823,000 8,693,215 9,516,215 (1,838,946) 1987 30 Years
Heron Landing (J) 711,800 6,876,537 7,588,337 (1,099,485) 1988 30 Years
Heron Pointe 1,546,700 8,342,856 9,889,556 (849,081) 1989 30 Years
</TABLE>
S-7
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Heron Pointe (Atl) Jacksonville, Fl 1,610,460 214,332 1,928,989 - 6,523
Heron Run Plantation, FL - 917,800 9,006,476 - 806,918
Hickory Creek Richmond, VA - 1,323,000 18,520,609 - 235,832
Hickory Mill Columbus, OH 1,055,961 161,714 1,455,430 - 13,342
Hickory Mill I Charleston, WV 934,166 129,187 1,162,681 - 931
Hickory Place Gainesville, FL 1,338,750 192,453 1,732,080 - 439
Hickory Ridge Greenville, SC - 285,800 2,591,930 2,400 125,220
Hidden Acres Sarasota, FL 1,646,801 253,139 2,278,249 - 10,113
Hidden Lakes Haltom City, TX - 1,872,000 20,242,109 - 87,354
Hidden Oaks Cary, NC - 1,176,200 10,614,135 2,400 965,785
Hidden Palms Tampa, FL (E) 2,048,000 6,380,289 1,600 407,995
Hidden Pines Orlando, FL 19,562 176,308 1,586,772 - 2,970
Hidden Valley Club Ann Arbor, MI - 915,000 7,342,020 - 1,395,871
High Points St. Petersburg, FL 1,056,641 222,308 2,000,769 - 6,383
Highland Creste Seattle, WA - 935,200 8,415,391 - 385,329
Highland Grove Stone Mt., GA - 1,665,700 15,010,714 2,400 213,174
Highland Point Denver, CO 9,886,746 1,631,900 14,684,439 - 342,409
Highline Oaks Denver, CO 7,100,000 1,055,000 9,748,823 2,400 337,844
Hillcrest Villas Ft. Walton Bch., FL 978,813 141,603 1,274,427 - 13,721
Hillside Manor Albany, GA 611,803 102,632 923,690 - 5,484
Hillside Trace Tampa, FL 1,058,133 138,888 1,249,992 - 8,214
Hollows Columbia, SC - 450,000 8,835,008 - 67,279
Holly Park Columbus, GA 790,970 138,418 1,245,760 - 9,271
Holly Ridge Miami, FL - 295,596 2,660,361 - 4,627
Holly Sands I Ft. Walton Bch.,FL 1,373,631 190,942 1,718,481 - 13,513
Holly Sands II Ft. Walton Bch., FL 1,037,680 124,578 1,121,198 - 2,297
Hollyview Silver Springs, MD - 189,000 1,506,539 2,400 33,512
Horizon Place Tampa, FL 12,475,333 2,128,000 12,086,937 - 254,270
Hunt Club Charlotte, NC - 1,090,000 17,992,887 - 196,881
Hunter Glen (IL) Springfield, IL 956,507 158,197 1,423,776 - 2,428
Hunter's Glen Chesterfield, MO - 913,500 8,230,595 1,700 545,410
Hunter's Green Fort Worth, TX (F) 524,200 3,653,481 100 698,698
Hunters Ridge/South Pointe St. Louis, MO 18,630,250 1,950,000 17,570,346 5,600 1,115,090
Huntington Hollow Tulsa, OK - 668,600 6,018,259 - 186,853
Huntington Park Everett, WA - 1,594,500 14,748,864 3,000 292,087
Idlewood Indianapolis, IN - 2,560,000 11,473,589 1,800 528,947
Independence Village Columbus, OH - 226,988 2,042,891 - 9,506
Indian Bend Phoenix, AZ - 1,072,500 9,675,133 3,200 1,397,968
Indian Lake I Atlanta, GA 4,207,504 839,669 7,557,017 - 25,941
Indian Tree Arvada, CO - 881,125 4,552,815 100 871,891
Indigo Plantation Daytona Beach, FL - 1,520,000 14,650,246 - 98,980
Indigo Springs Kent, WA 7,740,381 1,270,000 11,446,902 500 648,933
Ingleside, The Phoenix, AZ - 1,203,600 10,685,212 - 72,304
Iris Glen Atlanta, GA 1,785,000 270,458 2,434,122 - 6,212
Ironwood at the Ranch Wesminster, CO 5,808,479 1,493,300 13,439,305 - 226,423
Isle at Arrowhead Ranch Glendale, AZ - 1,650,237 19,533,715 - 120,568
Ivy Place (K) Atlanta, GA - 793,200 7,228,257 9,750 323,819
James Street Crossing Kent, WA 16,395,379 2,078,600 18,738,034 2,654 324,912
Jefferson at Walnut Creek Austin, TX (E) 2,736,000 14,598,337 1,600 203,494
Jefferson Way I Jacksonville, Fl 1,028,679 147,799 1,330,189 - 4,695
Junipers at Yarmouth Yarmouth, ME - 1,350,000 7,861,966 5,700 417,354
Jupiter Cove I W. Palm Beach, FL 1,637,684 233,932 2,105,392 - 12,397
Jupiter Cove III W. Palm Beach, FL 1,723,290 242,010 2,178,090 - 3,615
Kempton Downs Gresham, OR - 1,182,200 10,943,372 35,149 1,012,310
Ketwood Dayton, OH 1,605,298 266,443 2,397,989 - 11,007
Keystone Austin, TX 2,789,477 498,000 4,487,295 500 695,837
Kimmerly Glen Charlotte, NC - 1,040,000 12,406,969 - 93,533
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Heron Pointe (Atl) 214,332 1,935,511 2,149,844 (17,926) 1986 30 Years
Heron Run 917,800 9,813,395 10,731,195 (2,059,502) 1987 30 Years
Hickory Creek 1,323,000 18,756,441 20,079,441 (865,310) 1984 30 Years
Hickory Mill 161,714 1,468,772 1,630,486 (13,515) 1980 30 Years
Hickory Mill I 129,187 1,163,612 1,292,799 (10,517) 1983 30 Years
Hickory Place 192,453 1,732,519 1,924,973 (15,620) 1983 30 Years
Hickory Ridge 288,200 2,717,150 3,005,350 (244,413) 1968 30 Years
Hidden Acres 253,139 2,288,362 2,541,501 (21,345) 1987 30 Years
Hidden Lakes 1,872,000 20,329,463 22,201,463 (909,260) 1996 30 Years
Hidden Oaks 1,178,600 11,579,921 12,758,521 (987,908) 1988 30 Years
Hidden Palms 2,049,600 6,788,284 8,837,884 (621,560) 1986 30 Years
Hidden Pines 176,308 1,589,741 1,766,049 (14,253) 1981 30 Years
Hidden Valley Club 915,000 8,737,891 9,652,891 (5,271,915) 1973 30 Years
High Points 222,308 2,007,152 2,229,460 (18,484) 1986 30 Years
Highland Creste 935,200 8,800,720 9,735,920 (931,911) 1989 30 Years
Highland Grove 1,668,100 15,223,889 16,891,989 (1,255,285) 1988 30 Years
Highland Point 1,631,900 15,026,848 16,658,748 (1,455,251) 1984 30 Years
Highline Oaks 1,057,400 10,086,666 11,144,066 (952,996) 1986 30 Years
Hillcrest Villas 141,603 1,288,148 1,429,751 (12,065) 1985 30 Years
Hillside Manor 102,632 929,173 1,031,806 (8,871) 1985 30 Years
Hillside Trace 138,888 1,258,206 1,397,094 (11,706) 1987 30 Years
Hollows 450,000 8,902,286 9,352,286 (419,929) 1987 30 Years
Holly Park 138,418 1,255,031 1,393,449 (11,912) 1985 30 Years
Holly Ridge 295,596 2,664,988 2,960,583 (23,909) 1986 30 Years
Holly Sands I 190,942 1,731,994 1,922,936 (15,944) 1985 30 Years
Holly Sands II 124,578 1,123,495 1,248,072 (10,289) 1986 30 Years
Hollyview 191,400 1,540,051 1,731,451 (125,799) 1965 30 Years
Horizon Place 2,128,000 12,341,207 14,469,207 (586,978) 1985 30 Years
Hunt Club 1,090,000 18,189,769 19,279,769 (829,308) 1990 30 Years
Hunter Glen (IL) 158,197 1,426,204 1,584,402 (13,004) 1987 30 Years
Hunter's Glen 915,200 8,776,005 9,691,205 (1,163,664) 1985 30 Years
Hunter's Green 524,300 4,352,179 4,876,479 (1,229,116) 1981 30 Years
Hunters Ridge/South Pointe 1,955,600 18,685,436 20,641,036 (1,866,301) 1986-1987 30 Years
Huntington Hollow 668,600 6,205,112 6,873,712 (682,525) 1981 30 Years
Huntington Park 1,597,500 15,040,951 16,638,451 (3,240,823) 1991 30 Years
Idlewood 2,561,800 12,002,536 14,564,336 (1,036,708) 1991 30 Years
Independence Village 226,988 2,052,397 2,279,385 (19,419) 1978 30 Years
Indian Bend 1,075,700 11,073,101 12,148,801 (2,382,653) 1973 30 Years
Indian Lake I 839,669 7,582,957 8,422,626 (67,778) 1987 30 Years
Indian Tree 881,225 5,424,706 6,305,931 (1,553,220) 1983 30 Years
Indigo Plantation 1,520,000 14,749,225 16,269,225 (681,686) 1989 30 Years
Indigo Springs 1,270,500 12,095,835 13,366,335 (1,354,595) 1991 30 Years
Ingleside, The 1,203,600 10,757,516 11,961,116 (770,952) 1995 30 Years
Iris Glen 270,458 2,440,334 2,710,792 (21,884) 1984 30 Years
Ironwood at the Ranch 1,493,300 13,665,728 15,159,028 (1,318,351) 1986 30 Years
Isle at Arrowhead Ranch 1,650,237 19,654,283 21,304,520 (1,429,829) 1996 30 Years
Ivy Place (K) 802,950 7,552,076 8,355,026 (1,041,136) 1978 30 Years
James Street Crossing 2,081,254 19,062,945 21,144,199 (1,434,987) 1989 30 Years
Jefferson at Walnut Creek 2,737,600 14,801,831 17,539,431 (1,220,695) 1994 30 Years
Jefferson Way I 147,799 1,334,883 1,482,682 (12,134) 1987 30 Years
Junipers at Yarmouth 1,355,700 8,279,320 9,635,020 (870,172) 1970 30 Years
Jupiter Cove I 233,932 2,117,789 2,351,722 (18,963) 1987 30 Years
Jupiter Cove III 242,010 2,181,705 2,423,715 (19,306) 1987 30 Years
Kempton Downs 1,217,349 11,955,682 13,173,031 (2,233,649) 1990 30 Years
Ketwood 266,443 2,408,996 2,675,439 (21,828) 1979 30 Years
Keystone 498,500 5,183,133 5,681,633 (1,100,519) 1981 30 Years
Kimmerly Glen 1,040,000 12,500,502 13,540,502 (579,229) 1986 30 Years
</TABLE>
S-8
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Kings Colony Savannah, GA 2,084,325 230,149 2,071,343 - 8,117
Kingsport Alexandria, VA - 1,262,250 12,479,294 - 982,079
Kirby Place Houston, TX (E) 3,620,000 25,914,555 1,600 258,979
Knox Landing Knoxville, TN 1,551,481 158,589 1,427,298 - 6,373
La Costa Brava (ORL) Orlando, FL - 206,626 4,610,502 - 2,638,716
La Mariposa Mesa, AZ (O) 2,047,539 12,466,128 - 318,757
La Mirage San Diego, CA - 34,895,200 93,909,311 - 2,665,264
La Reserve Oro Valley, AZ (O) 3,264,562 4,936,546 - 218,849
La Tour Fontaine Houston, TX 9,610,482 2,916,000 15,917,178 - 107,312
La Valencia Mesa, AZ - 3,553,350 20,542,396 - 678,386
Ladera Mesa, AZ 10,906,931 2,978,879 20,640,453 - 82,888
Lake in the Woods (MI) Ypsilanti, MI - 1,859,625 18,283,831 - 5,889,551
Lake Point Charlotte, NC - 1,058,975 13,587,338 - 114,443
Lakes at Vinings Atlanta, GA 22,200,684 6,496,000 21,857,927 2,000 209,564
Lakeshore at Preston Plano, TX 12,933,907 3,322,000 15,211,713 3,800 117,521
Lakeshore I (GA) Chattanooga, TN 1,236,015 169,375 1,524,375 - 34,990
Lakeville Resort Petaluma, CA 20,367,547 2,734,100 24,610,651 2,400 855,402
Lakewood Greens Dallas, TX 8,293,081 2,016,000 9,032,159 3,600 254,494
Lakewood Oaks Dallas, TX - 1,630,200 14,686,192 1,400 870,899
Lamplight Court Columbus, OH - 70,517 634,654 - 15,753
Landera San Antonio, TX - 766,300 6,896,811 - 294,058
Landings (FL), The Winterhaven, FL 716,235 130,953 1,178,580 - 15,445
Landings (TN) Memphis, TN - 1,314,000 14,090,109 - 249,510
Larkspur I (Hil) Columbus, OH 993,689 179,628 1,616,653 - 3,697
Larkspur I (Mor) Dayton, OH 452,555 55,416 498,745 - 2,813
Larkspur II Dayton, OH - 29,908 269,168 - 718
Larkspur Woods Sacramento, CA (E) 5,800,000 14,539,036 2,900 366,134
Laurel Bay Detroit, MI 859,412 186,004 1,674,035 - 2,119
Laurel Court Toledo, OH 1,116,603 135,736 1,221,621 - 3,331
Laurel Gardens Coral Springs, FL - 4,800,000 25,942,631 - 258,894
Laurel Glen Atlanta, GA 1,701,792 289,509 2,605,582 - 5,312
Laurel Ridge Chapel Hill, NC - 160,000 3,594,635 22,551 1,467,459
Legends Tucson, AZ - 2,729,788 17,911,434 - 205,304
Lexington Farm Alpharetta, GA 18,455,654 3,520,000 21,063,101 1,900 146,849
Lexington Glen Atlanta, GA - 5,760,000 40,190,507 - 180,007
Lexington Park Orlando, FL - 2,016,000 12,346,726 - 314,673
Lincoln at Defoors Atlanta, GA - 5,100,000 20,425,822 - 154,794
Lincoln Green I San Antonio, TX - 947,366 5,833,661 - 255,937
Lincoln Green I & II (CA) Sunnyvale, CA 12,727,505 9,048,000 18,483,642 9,300 106,511
Lincoln Green II San Antonio, TX - 1,052,340 5,212,696 - 705,958
Lincoln Green III San Antonio, TX - 536,010 1,828,661 - 273,656
Lincoln Heights Quincy, MA 21,409,834 5,925,000 33,595,262 3,400 229,981
Lincoln Village I & II (CA) Larkspur, CA - 17,100,000 31,399,237 7,300 2,054,383
Lindendale Columbus, OH 1,382,143 209,159 1,882,427 - 5,305
Link Terrace Savannah, GA 898,724 121,839 1,096,547 - 3,896
Little Cottonwoods Tempe, AZ (O) 3,050,133 26,991,689 - 308,845
Lodge (OK), The Tulsa, OK - 313,571 3,023,363 (200) 930,879
Lodge (TX), The San Antonio, TX - 1,363,636 8,737,564 - 630,444
Lofton Place Tampa, FL - 2,240,000 16,679,214 - 609,388
Longfellow Place - Combined Boston, MA - 53,164,160 184,021,737 - 424,740
Longwood Decatur, GA - 1,452,000 13,087,837 2,048 518,830
Longwood (KY) Lexington,KY 943,932 146,309 1,316,781 - 4,531
Madison at Cedar Springs Dallas, TX - 2,470,000 33,194,620 - 69,228
Madison at Chase Oaks Plano, TX - 3,055,000 28,932,885 - 140,773
Madison at River Sound Lawrenceville, GA - 3,666,999 47,387,106 - 68,178
Madison at Round Grove Austin, TX - 2,626,000 25,682,373 - 145,729
Madison at Stone Creek Lewisville, TX - 2,535,000 22,611,700 - 150,265
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Kings Colony 230,149 2,079,460 2,309,609 (19,070) 1987 30 Years
Kingsport 1,262,250 13,461,373 14,723,623 (2,811,542) 1986 30 Years
Kirby Place 3,621,600 26,173,534 29,795,134 (2,033,124) 1994 30 Years
Knox Landing 158,589 1,433,671 1,592,259 (13,477) 1986 30 Years
La Costa Brava (ORL) 206,626 7,249,218 7,455,844 (4,129,893) 1967 30 Years
La Mariposa 2,047,539 12,784,885 14,832,424 (981,457) 1986 30 Years
La Mirage 34,895,200 96,574,575 131,469,775 (8,319,235) 1988/1992 30 Years
La Reserve 3,264,562 5,155,395 8,419,957 (455,305) 1988 30 Years
La Tour Fontaine 2,916,000 16,024,490 18,940,490 (696,631) 1994 30 Years
La Valencia 3,553,350 21,220,782 24,774,132 (1,610,709) 1998 30 Years
Ladera 2,978,879 20,723,341 23,702,220 (1,488,588) 1995 30 Years
Lake in the Woods (MI) 1,859,625 24,173,382 26,033,007 (13,445,220) 1969 30 Years
Lake Point 1,058,975 13,701,781 14,760,756 (640,515) 1984 30 Years
Lakes at Vinings 6,498,000 22,067,492 28,565,492 (1,211,285) 1972/1975 30 Years
Lakeshore at Preston 3,325,800 15,329,235 18,655,035 (841,484) 1992 30 Years
Lakeshore I (GA) 169,375 1,559,365 1,728,740 (14,995) 1986 30 Years
Lakeville Resort 2,736,500 25,466,053 28,202,553 (3,060,894) 1984 30 Years
Lakewood Greens 2,019,600 9,286,654 11,306,254 (531,387) 1986 30 Years
Lakewood Oaks 1,631,600 15,557,091 17,188,691 (3,233,391) 1987 30 Years
Lamplight Court 70,517 650,407 720,924 (6,401) 1972 30 Years
Landera 766,300 7,190,869 7,957,169 (740,084) 1983 30 Years
Landings (FL), The 130,953 1,194,025 1,324,978 (11,203) 1984 30 Years
Landings (TN) 1,314,000 14,339,619 15,653,619 (653,435) 1986 30 Years
Larkspur I (Hil) 179,628 1,620,350 1,799,978 (14,581) 1983 30 Years
Larkspur I (Mor) 55,416 501,558 556,974 (4,721) 1982 30 Years
Larkspur II 29,908 269,886 299,794 (2,535) 1984 30 Years
Larkspur Woods 5,802,900 14,905,170 20,708,070 (1,218,608) 1989/1993 30 Years
Laurel Bay 186,004 1,676,154 1,862,158 (15,167) 1989 30 Years
Laurel Court 135,736 1,224,951 1,360,687 (11,448) 1978 30 Years
Laurel Gardens 4,800,000 26,201,525 31,001,525 (1,169,799) 1989 30 Years
Laurel Glen 289,509 2,610,894 2,900,403 (23,262) 1986 30 Years
Laurel Ridge 182,551 5,062,094 5,244,644 (2,749,488) 1975 30 Years
Legends 2,729,788 18,116,738 20,846,526 (1,353,986) 1995 30 Years
Lexington Farm 3,521,900 21,209,949 24,731,849 (1,129,048) 1995 30 Years
Lexington Glen 5,760,000 40,370,514 46,130,514 (1,792,637) 1990 30 Years
Lexington Park 2,016,000 12,661,398 14,677,398 (582,892) 1988 30 Years
Lincoln at Defoors 5,100,000 20,580,616 25,680,616 (459,955) 1980 30 Years
Lincoln Green I 947,366 6,089,598 7,036,964 (3,203,644) 1984/1986 30 Years
Lincoln Green I & II (CA) 9,057,300 18,590,153 27,647,453 (980,932) 1979 30 Years
Lincoln Green II 1,052,340 5,918,654 6,970,994 (2,703,798) 1984/1986 30 Years
Lincoln Green III 536,010 2,102,317 2,638,327 (991,219) 1984/1986 30 Years
Lincoln Heights 5,928,400 33,825,243 39,753,643 (2,415,021) 1991 30 Years
Lincoln Village I & II (CA) 17,107,300 33,453,620 50,560,920 (1,816,235) 1980 30 Years
Lindendale 209,159 1,887,732 2,096,890 (17,177) 1987 30 Years
Link Terrace 121,839 1,100,443 1,222,282 (10,110) 1984 30 Years
Little Cottonwoods 3,050,133 27,300,534 30,350,667 (1,989,161) 1984 30 Years
Lodge (OK), The 313,371 3,954,242 4,267,613 (2,419,623) 1979 30 Years
Lodge (TX), The 1,363,636 9,368,009 10,731,645 (3,827,792) 1979(#) 30 Years
Lofton Place 2,240,000 17,288,602 19,528,602 (780,117) 1988 30 Years
Longfellow Place - Combined 53,164,160 184,446,477 237,610,637 (2,668,333) 1975 30 Years
Longwood 1,454,048 13,606,667 15,060,715 (2,905,506) 1992 30 Years
Longwood (KY) 146,309 1,321,312 1,467,621 (12,100) 1985 30 Years
Madison at Cedar Springs 2,470,000 33,263,848 35,733,848 (1,451,112) 1995 30 Years
Madison at Chase Oaks 3,055,000 29,073,658 32,128,658 (1,299,365) 1995 30 Years
Madison at River Sound 3,666,999 47,455,284 51,122,283 (2,096,164) 1996 30 Years
Madison at Round Grove 2,626,000 25,828,103 28,454,103 (1,158,009) 1995 30 Years
Madison at Stone Creek 2,535,000 22,761,964 25,296,964 (1,026,234) 1995 30 Years
</TABLE>
S-9
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Madison at the Arboretum Austin, TX - 1,046,500 9,638,269 - 166,261
Madison on Melrose Richardson, TX - 1,300,000 15,067,256 - 47,134
Madison on the Parkway Dallas, TX - 2,444,000 22,482,051 - 105,958
Mallard Cove Greenville, SC - 803,700 7,322,311 9,650 664,534
Mallard Cove at Conway Orlando, FL - 600,000 2,555,069 - 4,872,430
Mallgate Louisville, KY - - 6,702,515 - 4,537,936
Marabou Mills I Indianpolis, IN 1,412,119 224,178 2,017,602 - 5,162
Marabou Mills II Indianpolis, IN 959,880 192,186 1,729,676 - 14,463
Marabou Mills III Indianpolis, IN 1,176,908 171,557 1,544,010 - 3,234
Marbrisa Tampa, FL - 811,500 7,313,488 2,000 2,147,386
Mariner Club (FL) Pembroke Pines, FL 9,501,055 1,824,000 20,771,566 500 188,748
Mariners Wharf Orange Park, FL - 1,858,800 16,744,951 2,400 239,255
Mark Landing I Miami, FL 1,307,433 191,986 1,727,872 - 1,963
Marks Englewood, CO 20,560,000 4,928,500 44,418,180 - 882,561
Marquessa Corona Hills, CA (U) 6,888,500 21,604,584 - 591,208
Marsh Landing I Brunswick, GA 776,149 133,193 1,198,735 - 5,347
Marshlanding II Brunswick, GA 952,036 111,187 1,000,684 - 8,237
Martha Lake Seattle, WA - 823,200 7,405,070 (2,000) 130,462
Martins Landing Roswell, GA 12,745,735 4,800,000 12,949,891 2,000 247,544
Marymont (MD) Laurel, MD - 1,901,800 17,135,393 2,000 657,214
McAlpine Ridge Charlotte, NC - 1,283,400 11,557,252 600 838,514
McDowell Place Naperville, IL 15,786,052 2,578,900 23,211,919 1,500 930,783
Meadow Creek Tigard, OR 8,209,235 1,298,100 11,692,425 1,000 1,198,268
Meadowland Athens, GA 983,511 152,395 1,371,552 - 3,056
Meadowood (Cin) Cincinnati, OH 1,776,638 330,734 2,976,610 - 6,878
Meadowood (Cra) Indianpolis, IN 1,098,209 132,471 1,192,235 - 17,543
Meadowood (Cuy) Akron, OH 1,286,594 201,407 1,812,659 - 2,097
Meadowood (FL) Huntington, KY 862,397 96,350 867,146 - 17,574
Meadowood (Fra) Franklin, IN 1,021,963 129,252 1,163,264 - 6,951
Meadowood (Log) Southbend, IN - 93,338 840,044 - 8,342
Meadowood (New) Evansville, IN 981,203 131,546 1,183,914 - 7,844
Meadowood (Nic) Lexington,KY 1,401,249 173,223 1,559,007 - 30,448
Meadowood (Tem) Toledo, MI 1,340,000 173,675 1,563,071 - 2,064
Meadowood (Wel) Youngstown, OH - 58,570 527,133 - 796
Meadowood Apts. (Man) Mansfield, OH 937,100 118,504 1,066,538 - 2,403
Meadowood I (GA) Atlanta, GA 986,986 205,468 1,849,208 - 3,322
Meadowood I (MI) Jackson, MI 944,458 146,208 1,315,871 - 2,165
Meadowood I (OH) Columbus, OH 1,016,762 146,912 1,322,211 - 7,343
Meadowood II (FL) Orlando, FL 823,042 160,367 1,443,300 - 1,943
Meadowood II (GA) Atlanta, GA 883,550 176,968 1,592,713 - 5,264
Meadowood II (IN) Indianpolis, IN 708,179 122,626 1,103,630 - 3,501
Meadowood II (OH) Columbus, OH 484,068 57,802 520,217 - 471
Meadows I (OH), The Columbus, OH 785,201 150,800 1,357,203 - 8,655
Meadows II (OH), The Columbus, OH 1,158,433 186,636 1,679,728 - 4,861
Meadows in the Park Birmingham, AL - 1,000,000 8,533,099 900 525,288
Meadows on the Lake Birmingham, AL - 1,000,000 8,529,726 900 24,124
Meldon Place Toledo, OH 2,400,695 288,434 2,595,904 - 7,891
Merrifield Hagerstown, MD 2,045,897 268,712 2,418,407 - 5,194
Merrill Creek Tacoma, WA - 814,200 7,330,606 - 96,201
Merrimac Woods Costa Mesa, CA - 673,300 6,081,677 2,400 500,505
Merritt at Satellite Place Duluth, GA - 3,400,000 29,919,407 - 3,102
Miguel Place St. Petersburg, FL 1,469,356 199,349 1,794,141 - 6,348
Mill Pond Millersville, MD 7,912,334 2,880,000 8,931,260 - 289,776
Mill Run Savannah, GA 1,519,728 198,212 1,783,904 - 3,278
Mill Village Randolph, MA - 6,200,000 13,221,679 (14,700) 302,028
Millburn Akron, OH 1,205,695 192,062 1,728,558 - 2,457
Millburn Court II Dayton, OH 908,789 122,870 1,105,834 - 6,623
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Madison at the Arboretum 1,046,500 9,804,530 10,851,030 (445,081) 1995 30 Years
Madison on Melrose 1,300,000 15,114,390 16,414,390 (666,001) 1995 30 Years
Madison on the Parkway 2,444,000 22,588,009 25,032,009 (1,010,063) 1995 30 Years
Mallard Cove 813,350 7,986,845 8,800,195 (1,164,556) 1983 30 Years
Mallard Cove at Conway 600,000 7,427,499 8,027,499 (4,733,928) 1974 30 Years
Mallgate - 11,240,451 11,240,451 (7,354,306) 1969 30 Years
Marabou Mills I 224,178 2,022,764 2,246,942 (18,412) 1986 30 Years
Marabou Mills II 192,186 1,744,139 1,936,326 (15,857) 1987 30 Years
Marabou Mills III 171,557 1,547,244 1,718,801 (14,005) 1987 30 Years
Marbrisa 813,500 9,460,873 10,274,373 (1,289,391) 1984 30 Years
Mariner Club (FL) 1,824,500 20,960,314 22,784,814 (938,007) 1988 30 Years
Mariners Wharf 1,861,200 16,984,206 18,845,406 (1,382,369) 1989 30 Years
Mark Landing I 191,986 1,729,835 1,921,821 (15,636) 1987 30 Years
Marks 4,928,500 45,300,740 50,229,240 (4,281,090) 1987 30 Years
Marquessa 6,888,500 22,195,792 29,084,292 (1,673,748) 1992 30 Years
Marsh Landing I 133,193 1,204,082 1,337,275 (11,068) 1984 30 Years
Marshlanding II 111,187 1,008,920 1,120,108 (9,409) 1986 30 Years
Martha Lake 821,200 7,535,532 8,356,732 (731,255) 1991 30 Years
Martins Landing 4,802,000 13,197,435 17,999,435 (739,426) 1972 30 Years
Marymont (MD) 1,903,800 17,792,607 19,696,407 (3,476,900) 1987-88 30 Years
McAlpine Ridge 1,284,000 12,395,765 13,679,765 (2,492,628) 1989-90 30 Years
McDowell Place 2,580,400 24,142,702 26,723,102 (2,820,106) 1988 30 Years
Meadow Creek 1,299,100 12,890,692 14,189,792 (2,731,776) 1985 30 Years
Meadowland 152,395 1,374,608 1,527,003 (12,492) 1984 30 Years
Meadowood (Cin) 330,734 2,983,488 3,314,223 (26,751) 1985 30 Years
Meadowood (Cra) 132,471 1,209,778 1,342,248 (11,341) 1983 30 Years
Meadowood (Cuy) 201,407 1,814,756 2,016,162 (16,221) 1985 30 Years
Meadowood (FL) 96,350 884,720 981,069 (8,532) 1983 30 Years
Meadowood (Fra) 129,252 1,170,215 1,299,467 (10,820) 1983 30 Years
Meadowood (Log) 93,338 848,386 941,724 (7,854) 1984 30 Years
Meadowood (New) 131,546 1,191,758 1,323,304 (11,187) 1984 30 Years
Meadowood (Nic) 173,223 1,589,455 1,762,678 (14,491) 1983 30 Years
Meadowood (Tem) 173,675 1,565,136 1,738,810 (14,019) 1984 30 Years
Meadowood (Wel) 58,570 527,929 586,499 (5,088) 1986 30 Years
Meadowood Apts. (Man) 118,504 1,068,942 1,187,446 (9,775) 1983 30 Years
Meadowood I (GA) 205,468 1,852,530 2,057,997 (16,546) 1982 30 Years
Meadowood I (MI) 146,208 1,318,035 1,464,243 (11,846) 1983 30 Years
Meadowood I (OH) 146,912 1,329,554 1,476,467 (12,120) 1984 30 Years
Meadowood II (FL) 160,367 1,445,243 1,605,609 (13,009) 1980 30 Years
Meadowood II (GA) 176,968 1,597,977 1,774,945 (14,319) 1984 30 Years
Meadowood II (IN) 122,626 1,107,131 1,229,756 (10,529) 1986 30 Years
Meadowood II (OH) 57,802 520,688 578,490 (4,727) 1985 30 Years
Meadows I (OH), The 150,800 1,365,858 1,516,658 (12,593) 1985 30 Years
Meadows II (OH), The 186,636 1,684,589 1,871,226 (15,199) 1987 30 Years
Meadows in the Park 1,000,900 9,058,388 10,059,288 (718,147) 1986 30 Years
Meadows on the Lake 1,000,900 8,553,850 9,554,750 (652,281) 1987 30 Years
Meldon Place 288,434 2,603,794 2,892,228 (24,002) 1978 30 Years
Merrifield 268,712 2,423,601 2,692,313 (21,850) 1988 30 Years
Merrill Creek 814,200 7,426,806 8,241,006 (712,427) 1994 30 Years
Merrimac Woods 675,700 6,582,182 7,257,882 (834,633) 1970 30 Years
Merritt at Satellite Place 3,400,000 29,922,509 33,322,509 (256,094) 1999 30 Years
Miguel Place 199,349 1,800,489 1,999,838 (16,667) 1987 30 Years
Mill Pond 2,880,000 9,221,037 12,101,037 (335,570) 1984 30 Years
Mill Run 198,212 1,787,182 1,985,393 (16,459) 1986 30 Years
Mill Village 6,185,300 13,523,707 19,709,007 (1,045,059) 1971/1977 30 Years
Millburn 192,062 1,731,015 1,923,077 (15,339) 1984 30 Years
Millburn Court II 122,870 1,112,457 1,235,327 (10,292) 1981 30 Years
</TABLE>
S-10
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Millston I Cincinnati, OH 443,126 73,599 662,395 - 4,213
Millston II Cincinnati, OH 329,988 59,830 538,472 - (963)
Mirador Phoenix, AZ - 2,597,518 23,402,200 - 168,298
Mission Bay Orlando, FL - 2,432,000 21,623,560 - 195,874
Mission Palms Tucson, AZ - 2,023,400 18,209,315 - 422,331
Misty Woods Cary, NC - 720,790 18,063,934 - 1,111,837
Montgomery Court I (MI) Lansing, MI 1,213,411 156,298 1,406,680 - 7,186
Montgomery Court I (OH) Columbus, OH 1,280,843 163,755 1,473,796 - 42,777
Montgomery Court II (OH) Columbus, OH 795,450 149,734 1,347,604 - 3,890
Montierra Scottsdale, AZ - 3,455,000 17,269,841 - 21,931
Montrose Square Columbus, OH 1,699,852 193,266 1,739,394 - 10,725
Morgan Trace Atlanta, GA 1,437,958 239,102 2,151,922 - 3,035
Morningside Scottsdale, AZ (O) 670,470 12,607,976 - 155,496
Morningside (FL) Titusville, FL - 197,890 1,781,006 - 18,926
Mosswood I Orlando, FL 785,201 163,294 1,469,644 - 9,206
Mosswood II Orlando, FL 1,534,000 275,330 2,477,969 - 8,596
Mountain Park Ranch Phoenix, AZ (P) 1,662,332 18,260,276 - 327,404
Mountain Run Albuquerque, NM - 2,023,400 20,734,818 280,600 719,179
Mountain Terrace Stevenson Ranch, CA - 3,977,200 35,826,520 (10,700) 478,785
Newberry I Lansing, MI 1,144,691 183,509 1,651,580 - 8,340
Newberry II Lansing, MI 1,235,839 142,292 1,280,632 - 6,463
Newport Heights Seattle, WA - 390,700 3,522,780 500 304,974
North Creek (Everett) Evertt, WA 8,157,506 3,960,000 12,411,015 7,500 172,724
North Creek Heights Seattle, WA - 753,800 6,786,778 - 129,466
North Hill Atlanta, GA 16,060,957 2,520,000 18,550,989 5,300 3,450,464
Northampton 1 Largo, MD 20,380,296 1,843,200 17,397,514 - 2,356,521
Northampton 2 Largo, MD - 1,494,100 14,464,432 19,400 449,175
Northgate Village San Antonio, TX - 660,000 5,974,145 100 698,354
Northlake (FL) Jacksonville, FL - 1,166,000 10,514,526 2,400 218,250
Northridge Pleasant Hill, CA - 5,525,000 14,695,328 2,800 582,926
Northridge (GA) Atlanta, GA 968,755 238,811 2,149,295 - 4,854
Northrup Court I Pittsburgh, PA 1,375,701 189,246 1,703,213 - 973
Northrup Court II Pittsburgh, PA 886,769 157,190 1,414,713 - 2,427
Northwoods Village Cary, NC (E) 1,368,000 11,460,337 1,700 529,690
Nova Glen I Daytona Beach, FL - 142,086 1,278,771 - 7,932
Nova Glen II Daytona Beach, FL 1,284,043 175,168 1,576,511 - 7,642
Novawood I Daytona Beach, FL 310,000 122,311 1,100,803 - 4,051
Novawood II Daytona Beach, FL 720,993 144,401 1,299,613 - 4,217
Oak Gardens Miami, FL - 329,968 2,969,711 - 5,526
Oak Mill 2 Germantown, MD 9,507,486 854,000 8,230,187 133 1,192,091
Oak Park North Agoura Hills, CA (N) 1,706,500 15,362,666 400 131,674
Oak Park South Agoura Hills, CA (N) 1,683,400 15,154,608 400 266,763
Oak Ridge Orlando, FL 1,217,944 173,617 1,562,552 - 5,442
Oak Shade Daytona Beach, FL 1,467,867 229,403 2,064,627 - 4,303
Oakley Woods Atlanta, GA 1,131,397 165,449 1,489,040 - 27,803
Oaks (NC) Charlotte, NC - 2,196,744 23,601,540 - 91,742
Oaks of Lakebridge Ormond Beach, FL - 413,700 3,912,636 2,100 460,951
Oakwood Manor Miami, FL - 173,247 1,559,222 - 5,410
Oakwood Village (FL) St. Petersburg, FL 721,523 145,547 1,309,922 - 6,046
Oakwood Village (GA) Augusta, GA 1,054,585 161,174 1,450,567 - 3,466
Ocean Walk Key West, FL 21,099,078 2,834,900 25,531,749 3,849 284,742
Old Archer Court Gainesville, FL 993,263 170,323 1,532,911 - 5,323
Olde Redmond Place Redmond, WA 9,274,306 4,800,000 14,126,038 7,100 129,092
Olentangy Commons (OH) Columbus, OH - 3,032,336 22,821,061 - 7,556,896
Olivewood (MI) Detriot, MI 3,339,425 519,167 4,672,501 - 27,383
Olivewood I Indianapolis, IN 932,086 184,701 1,662,312 - 7,258
Olivewood II Indianapolis, IN 1,292,000 186,235 1,676,111 - 7,750
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Millston I 73,599 666,609 740,208 (6,563) 1981 30 Years
Millston II 59,830 537,508 597,338 (5,088) 1982 30 Years
Mirador 2,597,518 23,570,498 26,168,016 (1,709,124) 1995 30 Years
Mission Bay 2,432,000 21,819,435 24,251,435 (972,490) 1991 30 Years
Mission Palms 2,023,400 18,631,646 20,655,046 (1,832,997) 1980 30 Years
Misty Woods 720,790 19,175,771 19,896,561 (890,158) 1984 30 Years
Montgomery Court I (MI) 156,298 1,413,866 1,570,164 (12,993) 1984 30 Years
Montgomery Court I (OH) 163,755 1,516,573 1,680,328 (14,001) 1985 30 Years
Montgomery Court II (OH) 149,734 1,351,494 1,501,228 (12,301) 1986 30 Years
Montierra 3,455,000 17,291,772 20,746,772 (457,154) 1999 30 Years
Montrose Square 193,266 1,750,119 1,943,385 (17,088) 1987 30 Years
Morgan Trace 239,102 2,154,957 2,394,059 (19,367) 1986 30 Years
Morningside 670,470 12,763,472 13,433,942 (933,893) 1989 30 Years
Morningside (FL) 197,890 1,799,932 1,997,821 (18,468) 1984 30 Years
Mosswood I 163,294 1,478,849 1,642,143 (13,463) 1981 30 Years
Mosswood II 275,330 2,486,565 2,761,895 (22,392) 1982 30 Years
Mountain Park Ranch 1,662,332 18,587,680 20,250,012 (1,382,379) 1994 30 Years
Mountain Run 2,304,000 21,453,997 23,757,997 (2,141,282) 1985 30 Years
Mountain Terrace 3,966,500 36,305,304 40,271,804 (3,982,884) 1992 30 Years
Newberry I 183,509 1,659,920 1,843,429 (15,010) 1985 30 Years
Newberry II 142,292 1,287,095 1,429,387 (11,642) 1986 30 Years
Newport Heights 391,200 3,827,754 4,218,954 (822,936) 1985 30 Years
North Creek (Everett) 3,967,500 12,583,739 16,551,239 (647,951) 1986 30 Years
North Creek Heights 753,800 6,916,244 7,670,044 (661,310) 1990 30 Years
North Hill 2,525,300 22,001,453 24,526,753 (2,343,974) 1984 30 Years
Northampton 1 1,843,200 19,754,035 21,597,235 (4,473,537) 1977 30 Years
Northampton 2 1,513,500 14,913,607 16,427,107 (2,884,167) 1988 30 Years
Northgate Village 660,100 6,672,499 7,332,599 (1,794,088) 1984 30 Years
Northlake (FL) 1,168,400 10,732,777 11,901,177 (899,665) 1989 30 Years
Northridge 5,527,800 15,278,254 20,806,054 (918,027) 1974 30 Years
Northridge (GA) 238,811 2,154,149 2,392,960 (19,311) 1985 30 Years
Northrup Court I 189,246 1,704,186 1,893,432 (15,234) 1985 30 Years
Northrup Court II 157,190 1,417,140 1,574,330 (12,671) 1985 30 Years
Northwoods Village 1,369,700 11,990,027 13,359,727 (1,019,828) 1986 30 Years
Nova Glen I 142,086 1,286,703 1,428,789 (11,918) 1984 30 Years
Nova Glen II 175,168 1,584,152 1,759,320 (14,746) 1986 30 Years
Novawood I 122,311 1,104,854 1,227,165 (10,198) 1980 30 Years
Novawood II 144,401 1,303,830 1,448,232 (11,956) 1980 30 Years
Oak Gardens 329,968 2,975,237 3,305,205 (26,651) 1988 30 Years
Oak Mill 2 854,133 9,422,277 10,276,410 (1,667,080) 1985 30 Years
Oak Park North 1,706,900 15,494,340 17,201,240 (2,252,250) 1990 30 Years
Oak Park South 1,683,800 15,421,370 17,105,170 (2,424,736) 1989 30 Years
Oak Ridge 173,617 1,567,994 1,741,611 (14,326) 1985 30 Years
Oak Shade 229,403 2,068,930 2,298,333 (18,744) 1985 30 Years
Oakley Woods 165,449 1,516,842 1,682,291 (13,965) 1984 30 Years
Oaks (NC) 2,196,744 23,693,282 25,890,026 (1,056,167) 1996 30 Years
Oaks of Lakebridge 415,800 4,373,586 4,789,386 (1,117,621) 1984 30 Years
Oakwood Manor 173,247 1,564,633 1,737,880 (14,203) 1986 30 Years
Oakwood Village (FL) 145,547 1,315,967 1,461,514 (12,299) 1986 30 Years
Oakwood Village (GA) 161,174 1,454,033 1,615,207 (13,370) 1985 30 Years
Ocean Walk 2,838,749 25,816,491 28,655,239 (1,899,755) 1990 30 Years
Old Archer Court 170,323 1,538,234 1,708,558 (14,160) 1977 30 Years
Olde Redmond Place 4,807,100 14,255,130 19,062,230 (769,558) 1986 30 Years
Olentangy Commons (OH) 3,032,336 30,377,957 33,410,293 (19,008,907) 1972 30 Years
Olivewood (MI) 519,167 4,699,883 5,219,050 (42,683) 1986 30 Years
Olivewood I 184,701 1,669,571 1,854,272 (15,038) 1985 30 Years
Olivewood II 186,235 1,683,861 1,870,096 (15,261) 1986 30 Years
</TABLE>
S-11
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
One Eton Square Tulsa, OK - 1,570,100 14,130,937 - 718,912
Orange Grove Village Tucson, AZ (O) 1,813,154 14,893,347 - 301,882
Orchard Ridge Seattle, WA - 482,600 4,372,033 3,000 254,386
Overlook San Antonio, TX - 1,100,000 9,901,517 200 631,826
Overlook Manor Frederick, MD - 1,296,000 3,932,513 3,100 159,057
Overlook Manor II Frederick, MD 5,860,000 2,184,000 6,284,130 2,300 49,984
Overlook Manor III Frederick, MD - 1,024,000 3,029,673 2,300 32,968
Paces Station Atlanta, GA - 4,801,500 32,547,553 - 1,646,648
Palatka Oaks I Gainesville, FL 188,564 49,535 445,818 - 6,560
Palatka Oaks II Gainesville, FL 207,421 42,767 384,899 - 5,522
Palm Place Sarasota. FL 1,353,618 248,315 2,234,833 - 10,223
Palms at South Shore League City, TX - 1,200,000 16,522,433 - 416,281
Palms, The Phoenix, AZ (O) 3,285,226 11,270,203 - 256,071
Panther Ridge Seattle, WA - 1,055,800 9,506,117 - 453,522
Paradise Pointe Dania, FL - 1,493,800 17,344,218 419,614 1,799,747
Parc Royale Houston, TX 8,766,487 2,223,000 11,936,833 - 86,783
Park Knoll Atlanta, GA - 2,904,500 26,175,911 4,300 1,915,780
Park Meadow Gilbert, AZ (O) 835,217 15,120,769 - 265,939
Park Place I and II (MN) Plymouth, MN 17,525,591 2,428,200 21,918,197 7,800 1,135,866
Park Place (TX) Houston, TX 9,976,425 1,603,000 11,961,284 - 167,908
Park West (CA) Los Angeles, CA - 3,033,300 27,302,383 200 944,675
Park West (TX) Austin, TX - 648,605 4,738,542 100 486,853
Park West End (VA) Richmond, VA 7,168,169 1,560,000 11,871,449 2,500 97,312
Parkcrest Southfield, MI 7,110,922 1,260,000 10,404,807 5,000 383,797
Parkridge Place Las Colinas, TX - 6,430,800 17,091,674 2,100 558,596
Parkside Union City, CA - 6,240,000 11,827,453 6,700 418,035
Parkview Terrace Redlands, CA - 4,969,200 35,653,777 - 331,371
Parkville (Col) Columbus, OH 1,745,875 150,433 1,353,897 - 20,995
Parkville (IN) Muncie, IN 745,459 103,434 930,908 - 3,407
Parkville (Par) Dayton, OH 588,286 127,863 1,150,767 - 3,144
Parkville (WV) Parkersburg, WV - 105,460 949,139 - 1,999
Parkwood East Fort Collins, CO - 1,644,000 14,790,698 - 225,821
Patchen Oaks Lexington, KY - 1,344,000 8,129,210 1,300 339,237
Pelican Pointe I Jacksonville, FL 1,297,844 213,515 1,921,634 - 5,780
Pelican Pointe II Jacksonville, FL 989,685 184,852 1,663,670 - 4,000
Pine Barrens Jacksonville, FL 1,489,659 268,303 2,414,726 - 15,659
Pine Harbour Orlando, FL - 1,661,000 14,970,915 3,300 1,066,706
Pine Knoll Atlanta, GA 1,220,819 138,052 1,242,470 - 6,355
Pine Lake Tampa, FL 655,073 79,877 718,891 - 1,697
Pine Meadow Greensboro, NC 4,696,390 719,300 6,487,043 1,350 815,015
Pine Meadows I (FL) Ft. Meyers, FL 1,062,399 152,019 1,368,175 - 12,276
Pine Terrace I & II Panama City, FL 2,166,946 288,992 2,600,927 - 76,057
Pine Tree Club Wildwood, MO - 1,125,000 7,046,441 - 64,569
Pinellas Pines St. Petersburg, FL 1,552,906 174,999 1,574,993 - (6,430)
Pines of Cloverlane Pittsfield Township, MI - 1,906,600 16,880,313 1,200 3,957,201
Pines of Springdale West Palm Beach, FL - 471,200 4,416,174 2,667 450,125
Plantation (TX) Houston, TX - 2,320,000 7,718,422 2,900 380,548
Plantation Ridge Marietta, GA - 4,086,000 19,206,247 2,900 1,087,595
Plantations at Killearn Tallahassee, FL 4,960,829 828,000 7,617,890 - 122,109
Pleasant Ridge Arlington, TX 1,640,061 441,000 1,999,502 4,100 28,405
Plum Tree Corner, WI (Q) 1,992,000 20,246,205 4,700 436,480
Plum Tree Park Seattle, WA - 1,133,400 10,201,652 - 195,938
Plumwood (Che) Anderson, IN 448,333 84,923 764,303 - 1,854
Plumwood (For) Ft. Wayne, IN 604,317 131,351 1,182,157 - 5,105
Plumwood I Columbus, OH 1,711,169 289,814 2,608,329 - 20,625
Plumwood II Columbus, OH 444,366 107,583 968,248 - 968
Point (NC) Charlotte, NC - 1,700,000 25,417,267 - 55,211
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
One Eton Square 1,570,100 14,849,849 16,419,949 (1,553,505) 1985 30 Years
Orange Grove Village 1,813,154 15,195,228 17,008,382 (1,181,558) 1986/1995 30 Years
Orchard Ridge 485,600 4,626,418 5,112,018 (989,493) 1988 30 Years
Overlook 1,100,200 10,533,342 11,633,542 (1,126,151) 1985 30 Years
Overlook Manor 1,299,100 4,091,571 5,390,671 (223,567) 1980/1985 30 Years
Overlook Manor II 2,186,300 6,334,114 8,520,414 (356,121) 1980/1985 30 Years
Overlook Manor III 1,026,300 3,062,642 4,088,942 (165,917) 1980/1985 30 Years
Paces Station 4,801,500 34,194,201 38,995,701 (3,030,942) 1984-1988/1989 30 Years
Palatka Oaks I 49,535 452,378 501,913 (4,530) 1977 30 Years
Palatka Oaks II 42,767 390,421 433,187 (3,804) 1980 30 Years
Palm Place 248,315 2,245,056 2,493,371 (20,245) 1984 30 Years
Palms at South Shore 1,200,000 16,938,714 18,138,714 (751,887) 1990 30 Years
Palms, The 3,285,226 11,526,273 14,811,499 (856,248) 1990 30 Years
Panther Ridge 1,055,800 9,959,639 11,015,439 (1,041,171) 1980 30 Years
Paradise Pointe 1,913,414 19,143,965 21,057,379 (3,798,899) 1987-90 30 Years
Parc Royale 2,223,000 12,023,616 14,246,616 (531,529) 1994 30 Years
Park Knoll 2,908,800 28,091,691 31,000,491 (6,365,689) 1983 30 Years
Park Meadow 835,217 15,386,708 16,221,925 (1,127,461) 1986 30 Years
Park Place I and II (MN) 2,436,000 23,054,063 25,490,063 (3,094,798) 1986 30 Years
Park Place (TX) 1,603,000 12,129,192 13,732,192 (874,889) 1996 30 Years
Park West (CA) 3,033,500 28,247,058 31,280,558 (4,573,054) 1987/90 30 Years
Park West (TX) 648,705 5,225,394 5,874,099 (1,300,192) 1985 30 Years
Park West End (VA) 1,562,500 11,968,761 13,531,261 (894,429) 1985 30 Years
Parkcrest 1,265,000 10,788,604 12,053,604 (595,297) 1987 30 Years
Parkridge Place 6,432,900 17,650,270 24,083,170 (1,480,035) 1985 30 Years
Parkside 6,246,700 12,245,488 18,492,188 (713,305) 1979 30 Years
Parkview Terrace 4,969,200 35,985,148 40,954,348 (2,637,623) 1986 30 Years
Parkville (Col) 150,433 1,374,892 1,525,325 (13,505) 1978 30 Years
Parkville (IN) 103,434 934,316 1,037,750 (8,682) 1982 30 Years
Parkville (Par) 127,863 1,153,911 1,281,774 (10,468) 1982 30 Years
Parkville (WV) 105,460 951,138 1,056,598 (8,796) 1982 30 Years
Parkwood East 1,644,000 15,016,519 16,660,519 (1,435,827) 1986 30 Years
Patchen Oaks 1,345,300 8,468,447 9,813,747 (485,193) 1990 30 Years
Pelican Pointe I 213,515 1,927,414 2,140,929 (17,639) 1987 30 Years
Pelican Pointe II 184,852 1,667,670 1,852,522 (15,161) 1987 30 Years
Pine Barrens 268,303 2,430,385 2,698,688 (22,241) 1986 30 Years
Pine Harbour 1,664,300 16,037,621 17,701,921 (3,633,109) 1991 30 Years
Pine Knoll 138,052 1,248,825 1,386,877 (11,312) 1985 30 Years
Pine Lake 79,877 720,588 800,464 (6,710) 1982 30 Years
Pine Meadow 720,650 7,302,059 8,022,709 (1,098,597) 1974 30 Years
Pine Meadows I (FL) 152,019 1,380,450 1,532,470 (12,688) 1985 30 Years
Pine Terrace I & II 288,992 2,676,983 2,965,975 (25,306) 1983 30 Years
Pine Tree Club 1,125,000 7,111,010 8,236,010 (178,421) 1986 30 Years
Pinellas Pines 174,999 1,568,563 1,743,562 (14,057) 1983 30 Years
Pines of Cloverlane 1,907,800 20,837,514 22,745,314 (3,781,260) 1975-79 30 Years
Pines of Springdale 473,867 4,866,299 5,340,166 (1,092,682) 1985/87(x) 30 Years
Plantation (TX) 2,322,900 8,098,970 10,421,870 (625,820) 1969 30 Years
Plantation Ridge 4,088,900 20,293,842 24,382,742 (1,232,194) 1975 30 Years
Plantations at Killearn 828,000 7,739,999 8,567,999 (364,497) 1990 30 Years
Pleasant Ridge 445,100 2,027,907 2,473,007 (117,006) 1982 30 Years
Plum Tree 1,996,700 20,682,685 22,679,385 (1,349,403) 1989 30 Years
Plum Tree Park 1,133,400 10,397,590 11,530,990 (999,214) 1991 30 Years
Plumwood (Che) 84,923 766,158 851,080 (7,080) 1980 30 Years
Plumwood (For) 131,351 1,187,262 1,318,613 (10,918) 1981 30 Years
Plumwood I 289,814 2,628,954 2,918,768 (23,897) 1978 30 Years
Plumwood II 107,583 969,216 1,076,799 (8,669) 1983 30 Years
Point (NC) 1,700,000 25,472,478 27,172,478 (1,134,122) 1996 30 Years
</TABLE>
S-12
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Pointe at South Mountain Phoenix, AZ 11,600,069 2,228,800 20,059,311 - 621,583
Pointe East Redmond, WA - 601,800 5,425,763 800 235,997
Polos Fort Myers, FL - 1,640,000 18,444,966 - 301,494
Polos East Orlando, FL - 1,386,000 19,058,620 - 138,739
Combined Ft. Lauderdale ProperFt. Lauderdale, FL 10,000,000 10,222,700 39,715,328 8,600 2,069,004
Portland Center Combined Portland, OR 21,929,538 6,028,000 43,554,399 4,900 722,041
Portofino Chino Hills, CA - 3,572,400 14,660,994 - 171,655
Portside Towers Combined Jersey City, NJ 57,560,162 22,440,000 96,842,913 15,700 313,184
Prairie Creek I & II Richardson, TX - 4,067,292 39,494,373 - 56,494
Preakness Antioch, TN (E) 1,560,000 7,671,710 1,900 1,138,963
Preserve at Squaw Peak Phoenix, AZ (O) 517,788 8,533,992 - 152,605
Preston at Willowbend Plano, TX - 872,500 8,107,915 - 1,678,188
Preston Bend Dallas, TX 8,719,000 1,083,000 10,024,505 2,200 189,245
Preston Lake Atlanta, GA - 1,430,900 12,918,697 34,993 1,281,902
Princeton Court Evansville, IN 906,106 116,696 1,050,264 - 12,807
Princeton Square Jacksonville, FL - 864,000 11,910,478 - 113,638
Promenade (FL) St. Petersburg, FL - 2,124,193 25,804,037 - 140,252
Promenade Terrace Corona Hills, CA 15,661,286 2,281,000 20,546,289 1,800 458,387
Promontory Pointe I & II Phoenix, AZ (O) 2,355,509 30,421,840 - 330,742
Prospect Towers Hackensack, NJ 14,624,305 8,425,000 27,989,853 1,600 883,784
Pueblo Villas Albuquerque, NM - 854,300 7,694,320 1,300 977,991
Quail Call Albany, GA 716,387 104,723 942,511 - 3,483
Quail Cove Salt Lake City, UT - 2,271,800 20,444,381 - 551,603
Ramblewood I (Val) Valdosta, GA 975,751 132,084 1,188,753 - 4,187
Ramblewood II (Aug) Augusta, GA - 169,269 1,523,424 - 19,542
Ramblewood II (Val) Valdosta, GA 483,139 61,672 555,049 - 1,789
Rancho Murietta Tempe, AZ - 1,766,282 17,585,449 - 308,644
Ranchside St. Petersburg, FL 686,474 144,692 1,302,232 - 5,878
Ranchstone Houston, TX - 770,000 15,371,431 - 81,134
Ravens Crest Plainsboro, NJ (N) 4,673,000 42,080,642 2,850 2,252,693
Ravenwood Greenville, SC 1,565,791 197,284 1,775,552 - 3,227
Ravinia Greenfield, WI (Q) 1,236,000 12,055,713 4,100 264,043
Red Deer I Dayton, OH 1,281,868 204,317 1,838,851 - 2,347
Red Deer II Dayton, OH 1,174,345 193,852 1,744,665 - 3,194
Redan Village I Atlanta, GA 1,204,316 274,294 2,468,650 - 7,780
Redan Village II Atlanta, GA 1,080,708 240,605 2,165,449 - 1,919
Redlands Lawn and Tennis Redlands, CA - 4,822,320 26,359,328 - 506,607
Reflections at the Lakes Las Vegas, NV - 1,896,000 17,058,626 - 384,427
Regatta San Antonio, TX - 818,500 7,366,677 - 255,057
Regency Charlotte, NC - 890,000 11,783,920 - 78,512
Regency Palms Huntington Beach, CA - 1,856,500 16,718,292 900 823,622
Regency Woods Des Moines, IA 6,351,345 745,100 7,027,086 8,380 219,695
Registry Denver, CO - 1,303,100 11,726,478 - 219,650
Reserve at Ashley Lake Boynton Beach, FL 24,150,000 3,519,900 23,345,118 500 452,827
Reserve Square Combined Cleveland, OH - 2,618,352 23,582,869 500 12,070,829
Retreat, The Phoenix, AZ - 3,475,114 27,268,765 - 38,552
Richmond Townhomes Houston, TX 9,191,494 940,000 13,906,905 - 94,029
Ridgegate Seattle, WA - 805,800 7,323,524 - 151,483
Ridgetop Tacoma, WA - 811,500 7,299,490 - 128,373
Ridgetree Dallas, TX - 2,094,600 19,037,864 20,600 1,426,528
Ridgeway Commons Memphis, TN - 568,400 5,396,306 14,840 200,136
Ridgewood (Lou) Louisville, KY 864,095 163,686 1,473,173 - 430
Ridgewood (MI) Detriot, MI 1,200,000 176,969 1,592,721 - 4,776
Ridgewood (Rus) Nashville, KY 763,342 69,156 622,405 - 12,074
Ridgewood I (Bed) Bedford, IN 850,377 107,120 964,079 - 6,672
Ridgewood I (Elk) Elkhart, IN 1,171,440 159,371 1,434,341 - 14,808
Ridgewood I (GA) Atlanta, GA 1,413,648 230,574 2,075,168 - 5,968
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Pointe at South Mountain 2,228,800 20,680,894 22,909,694 (2,018,761) 1988 30 Years
Pointe East 602,600 5,661,760 6,264,360 (1,079,919) 1988 30 Years
Polos 1,640,000 18,746,460 20,386,460 (867,299) 1991 30 Years
Polos East 1,386,000 19,197,359 20,583,359 (865,308) 1991 30 Years
Combined Ft. Lauderdale Proper10,231,300 41,784,332 52,015,632 (6,224,657) 1988 30 Years
Portland Center Combined 6,032,900 44,276,439 50,309,339 (1,717,412) 1965 30 Years
Portofino 3,572,400 14,832,649 18,405,049 (1,075,995) 1989 30 Years
Portside Towers Combined 22,455,700 97,156,097 119,611,797 (5,181,331) 1992/1997 30 Years
Prairie Creek I & II 4,067,292 39,550,867 43,618,158 (1,128,902) 1998/99 30 Years
Preakness 1,561,900 8,810,673 10,372,573 (803,978) 1986 30 Years
Preserve at Squaw Peak 517,788 8,686,597 9,204,385 (649,077) 1990 30 Years
Preston at Willowbend 872,500 9,786,103 10,658,603 (2,263,021) 1985 30 Years
Preston Bend 1,085,200 10,213,750 11,298,950 (980,172) 1986 30 Years
Preston Lake 1,465,893 14,200,599 15,666,492 (3,335,031) 1984-86 30 Years
Princeton Court 116,696 1,063,071 1,179,767 (9,916) 1985 30 Years
Princeton Square 864,000 12,024,115 12,888,115 (563,868) 1984 30 Years
Promenade (FL) 2,124,193 25,944,289 28,068,482 (1,145,473) 1994 30 Years
Promenade Terrace 2,282,800 21,004,676 23,287,476 (2,677,571) 1990 30 Years
Promontory Pointe I & II 2,355,509 30,752,581 33,108,090 (2,246,711) 1984/1996 30 Years
Prospect Towers 8,426,600 28,873,636 37,300,236 (1,907,947) 1995 30 Years
Pueblo Villas 855,600 8,672,311 9,527,911 (1,210,863) 1975 30 Years
Quail Call 104,723 945,994 1,050,717 (8,893) 1984 30 Years
Quail Cove 2,271,800 20,995,984 23,267,784 (2,069,366) 1987 30 Years
Ramblewood I (Val) 132,084 1,192,940 1,325,024 (10,896) 1983 30 Years
Ramblewood II (Aug) 169,269 1,542,967 1,712,236 (14,924) 1986 30 Years
Ramblewood II (Val) 61,672 556,839 618,511 (5,149) 1983 30 Years
Rancho Murietta 1,766,282 17,894,093 19,660,375 (1,329,081) 1983 30 Years
Ranchside 144,692 1,308,110 1,452,802 (12,306) 1985 30 Years
Ranchstone 770,000 15,452,565 16,222,565 (684,806) 1996 30 Years
Ravens Crest 4,675,850 44,333,335 49,009,185 (9,058,639) 1984 30 Years
Ravenwood 197,284 1,778,779 1,976,062 (16,278) 1987 30 Years
Ravinia 1,240,100 12,319,756 13,559,856 (805,342) 1991 30 Years
Red Deer I 204,317 1,841,198 2,045,515 (16,553) 1986 30 Years
Red Deer II 193,852 1,747,859 1,941,711 (15,699) 1987 30 Years
Redan Village I 274,294 2,476,430 2,750,724 (22,143) 1984 30 Years
Redan Village II 240,605 2,167,368 2,407,974 (19,377) 1986 30 Years
Redlands Lawn and Tennis 4,822,320 26,865,935 31,688,255 (2,012,103) 1986 30 Years
Reflections at the Lakes 1,896,000 17,443,054 19,339,054 (1,673,007) 1989 30 Years
Regatta 818,500 7,621,734 8,440,234 (776,707) 1983 30 Years
Regency 890,000 11,862,432 12,752,432 (537,602) 1986 30 Years
Regency Palms 1,857,400 17,541,914 19,399,314 (2,550,877) 1969 30 Years
Regency Woods 753,480 7,246,781 8,000,261 (569,679) 1986 30 Years
Registry 1,303,100 11,946,129 13,249,229 (1,150,094) 1987 30 Years
Reserve at Ashley Lake 3,520,400 23,797,945 27,318,345 (1,814,527) 1990 30 Years
Reserve Square Combined 2,618,852 35,653,698 38,272,550 (8,338,981) 1973 30 Years
Retreat, The 3,475,114 27,307,317 30,782,431 (489,190) 1999 30 Years
Richmond Townhomes 940,000 14,000,934 14,940,934 (622,577) 1995 30 Years
Ridgegate 805,800 7,475,008 8,280,808 (730,185) 1990 30 Years
Ridgetop 811,500 7,427,863 8,239,363 (747,671) 1988 30 Years
Ridgetree 2,115,200 20,464,391 22,579,591 (3,018,446) 1983 30 Years
Ridgeway Commons 583,240 5,596,442 6,179,682 (435,462) 1970 30 Years
Ridgewood (Lou) 163,686 1,473,603 1,637,289 (13,306) 1984 30 Years
Ridgewood (MI) 176,969 1,597,496 1,774,465 (14,383) 1983 30 Years
Ridgewood (Rus) 69,156 634,478 703,635 (6,392) 1984 30 Years
Ridgewood I (Bed) 107,120 970,751 1,077,871 (9,041) 1984 30 Years
Ridgewood I (Elk) 159,371 1,449,149 1,608,520 (13,455) 1984 30 Years
Ridgewood I (GA) 230,574 2,081,136 2,311,710 (18,548) 1984 30 Years
</TABLE>
S-13
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Ridgewood I (Lex) Lexington, KY 1,040,373 203,720 1,833,477 - 1,814
Ridgewood I (OH) Columbus, OH 1,191,565 174,066 1,566,593 - 6,169
Ridgewood II (Bed) Bedford, IN 883,318 99,559 896,029 - 8,806
Ridgewood II (Elk) Elkhart, IN 1,297,758 215,335 1,938,012 - 19,093
Ridgewood II (GA) Atlanta, GA 1,008,359 164,999 1,484,991 - 794
Ridgewood II (OH) Columbus, OH 1,151,846 162,914 1,466,226 - 3,176
Ridgewood Village San Diego, CA (U) 5,760,000 14,032,511 1,500 17,709
Rincon Houston, TX - 4,400,000 16,734,746 1,900 122,065
River Bend Tampa, FL - 602,945 2,916,839 - 1,765,660
River Glen I Columbus, OH 985,686 171,272 1,541,447 - 2,855
River Glen II Columbus, OH 1,156,468 158,684 1,428,152 - 1,186
River Hill Grand Prairie, TX - 2,004,000 19,272,944 - 220,879
River Oak Louisville, KY - 1,253,900 11,300,386 2,700 492,123
River Park Fort Worth, TX 7,632,622 2,240,000 8,818,888 5,400 1,089,629
Rivers Edge Waterbury, CT - 780,000 6,561,802 1,900 44,071
Rivers End I Jacksonville, FL 1,406,919 171,745 1,545,703 - 3,361
Rivers End II Jacksonville, FL 1,127,324 190,688 1,716,189 - 3,186
Riverside Park Tulsa, OK (E) 1,440,000 12,389,121 1,400 342,244
Riverview Estates Toledo, OH 1,057,319 141,210 1,270,890 - 3,158
Roanoke Detriot, MI 40,500 369,911 3,329,200 - 6,827
Rock Creek Corrboro, NC - 895,100 8,062,948 600 343,612
Rolido Parque Houston, TX 7,111,022 2,950,000 7,935,130 5,900 750,516
Rosecliff Quincy, MA - 5,460,000 12,989,873 - 2,717
Rosehill Pointe Lenexa, KS 12,924,830 2,073,400 18,864,909 22,600 1,690,797
Rosewood (KY) Louisville, KY 1,608,243 253,453 2,281,076 - 16,594
Rosewood (OH) Columbus, OH 1,279,827 212,378 1,911,405 - 8,425
Rosewood Commons I Indianapolis, IN 1,864,582 228,644 2,057,800 - 11,881
Rosewood Commons II Indianapolis, IN 1,194,320 220,463 1,984,167 - 16,118
Royal Oak Eagan, MN 13,148,135 1,598,200 14,415,400 4,704 337,982
Royal Oaks (FL) Jacksonville, FL - 1,988,000 13,645,117 - 138,372
Sabal Palm Pompano Beach, FL - 3,536,000 20,190,650 2,600 737,738
Sabal Palm at Boot Ranch Palm Harbor, FL 16,631,058 3,888,000 28,923,692 - 168,353
Sabal Palm at Carrollwood
Place Tampa, FL - 3,888,000 26,911,542 - 169,009
Sabal Palm at Lake Buena
Vista Orlando, Fl 21,170,000 2,800,000 23,687,893 - 201,215
Sabal Palm at Metrowest Orlando, Fl - 4,560,000 38,394,865 (450,000) 205,634
Sabal Palm at Metrowest II Orlando, Fl - 4,110,000 33,907,283 450,000 78,683
Sabal Pointe (L) Coral Springs, FL - 1,941,900 17,570,508 9,700 344,893
Saddle Creek Carrollton, TX - 703,300 6,375,449 4,800 3,237,209
Saddle Ridge Loudoun County, VA - 1,351,800 12,283,616 13,000 451,702
Sailboat Bay Raleigh, NC - 960,000 8,797,580 - 183,887
San Tropez Phoenix, AZ - 2,738,000 24,650,003 - 310,770
Sandalwood Toledo, OH 1,103,983 151,926 1,367,336 - 1,490
Sandpiper II Fort Pierce, FL 1,033,653 155,496 1,399,461 - 9,964
Sanford Court Orlando, Fl 1,760,829 238,814 2,149,327 - 8,519
Sawgrass Cove Bradenton, FL - 1,671,200 15,060,378 2,950 1,420,386
Scarborough Square Rockville, MD 5,119,928 1,815,000 7,540,062 - 99,143
Scottsdale Courtyards Scottsdale, AZ (O) 2,979,269 25,073,538 - 293,614
Scottsdale Meadows Scottsdale, AZ - 1,512,000 11,407,699 - 197,072
Sedona Ridge Ahwatukee, AZ - 5,508,000 9,703,496 - 311,028
Sedona Springs Austin, TX - 2,574,000 23,477,043 - 130,113
Seeley Lake Tacoma, WA - 2,760,400 24,845,286 - 380,827
Settler's Point Salt Lake City, UT - 1,715,100 15,437,046 - 613,357
Seventh & James Seattle, WA - 663,800 5,974,803 - 133,631
Shadow Bay I Jacksonville, FL - 123,319 1,109,867 - 4,003
Shadow Bay II Jacksonville, FL 990,062 139,709 1,257,379 - 4,570
Shadow Brook Phoenix, AZ (O) 3,065,496 18,367,686 - 292,506
Shadow Lake Doraville, GA - 1,140,000 13,117,277 - 81,614
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Ridgewood I (Lex) 203,720 1,835,291 2,039,010 (16,373) 1984 30 Years
Ridgewood I (OH) 174,066 1,572,762 1,746,828 (14,247) 1984 30 Years
Ridgewood II (Bed) 99,559 904,834 1,004,393 (8,571) 1986 30 Years
Ridgewood II (Elk) 215,335 1,957,105 2,172,440 (18,206) 1986 30 Years
Ridgewood II (GA) 164,999 1,485,785 1,650,784 (13,269) 1986 30 Years
Ridgewood II (OH) 162,914 1,469,402 1,632,316 (13,274) 1985 30 Years
Ridgewood Village 5,761,500 14,050,220 19,811,720 (1,021,636) 1997 30 Years
Rincon 4,401,900 16,856,811 21,258,711 (1,660,510) 1996 30 Years
River Bend 602,945 4,682,499 5,285,444 (3,638,171) 1971 30 Years
River Glen I 171,272 1,544,302 1,715,574 (13,938) 1987 30 Years
River Glen II 158,684 1,429,338 1,588,022 (12,809) 1987 30 Years
River Hill 2,004,000 19,493,823 21,497,823 (878,180) 1996 30 Years
River Oak 1,256,600 11,792,509 13,049,109 (945,076) 1989 30 Years
River Park 2,245,400 9,908,517 12,153,917 (564,762) 1984 30 Years
Rivers Edge 781,900 6,605,874 7,387,774 (374,911) 1974 30 Years
Rivers End I 171,745 1,549,064 1,720,809 (14,079) 1986 30 Years
Rivers End II 190,688 1,719,375 1,910,062 (15,542) 1986 30 Years
Riverside Park 1,441,400 12,731,365 14,172,765 (1,052,333) 1994 30 Years
Riverview Estates 141,210 1,274,048 1,415,258 (12,199) 1987 30 Years
Roanoke 369,911 3,336,028 3,705,939 (29,499) 1985 30 Years
Rock Creek 895,700 8,406,560 9,302,260 (990,522) 1986 30 Years
Rolido Parque 2,955,900 8,685,646 11,641,546 (663,254) 1978 30 Years
Rosecliff 5,460,000 12,992,590 18,452,590 (276,066) 1990 30 Years
Rosehill Pointe 2,096,000 20,555,705 22,651,705 (3,200,631) 1984 30 Years
Rosewood (KY) 253,453 2,297,670 2,551,123 (20,784) 1984 30 Years
Rosewood (OH) 212,378 1,919,830 2,132,209 (17,670) 1985 30 Years
Rosewood Commons I 228,644 2,069,680 2,298,325 (19,123) 1986 30 Years
Rosewood Commons II 220,463 2,000,285 2,220,749 (18,268) 1987 30 Years
Royal Oak 1,602,904 14,753,382 16,356,285 (1,116,654) 1989 30 Years
Royal Oaks (FL) 1,988,000 13,783,489 15,771,489 (636,826) 1991 30 Years
Sabal Palm 3,538,600 20,928,388 24,466,988 (2,123,534) 1989 30 Years
Sabal Palm at Boot Ranch 3,888,000 29,092,045 32,980,045 (1,299,988) 1996 30 Years
Sabal Palm at Carrollwood
Place 3,888,000 27,080,552 30,968,552 (1,214,963) 1995 30 Years
Sabal Palm at Lake Buena
Vista 2,800,000 23,889,108 26,689,108 (1,087,252) 1988 30 Years
Sabal Palm at Metrowest 4,110,000 38,600,499 42,710,499 (1,685,822) 1998 30 Years
Sabal Palm at Metrowest II 4,560,000 33,985,966 38,545,966 (1,513,049) 1997 30 Years
Sabal Pointe (L) 1,951,600 17,915,401 19,867,001 (2,540,052) 1995 30 Years
Saddle Creek 708,100 9,612,658 10,320,758 (3,488,055) 1980 30 Years
Saddle Ridge 1,364,800 12,735,318 14,100,118 (1,949,000) 1989 30 Years
Sailboat Bay 960,000 8,981,467 9,941,467 (419,027) 1986 30 Years
San Tropez 2,738,000 24,960,773 27,698,773 (2,325,211) 1989 30 Years
Sandalwood 151,926 1,368,826 1,520,752 (12,278) 1984 30 Years
Sandpiper II 155,496 1,409,425 1,564,920 (13,069) 1982 30 Years
Sanford Court 238,814 2,157,846 2,396,660 (19,922) 1976 30 Years
Sawgrass Cove 1,674,150 16,480,765 18,154,915 (3,610,334) 1991 30 Years
Scarborough Square 1,815,000 7,639,205 9,454,205 (286,105) 1967 30 Years
Scottsdale Courtyards 2,979,269 25,367,152 28,346,421 (1,842,672) 1993 30 Years
Scottsdale Meadows 1,512,000 11,604,771 13,116,771 (854,318) 1984 30 Years
Sedona Ridge 5,508,000 10,014,524 15,522,524 (1,016,060) 1988 30 Years
Sedona Springs 2,574,000 23,607,156 26,181,156 (1,060,492) 1995 30 Years
Seeley Lake 2,760,400 25,226,114 27,986,514 (2,429,867) 1990 30 Years
Settler's Point 1,715,100 16,050,403 17,765,503 (1,555,999) 1986 30 Years
Seventh & James 663,800 6,108,434 6,772,234 (577,713) 1992 30 Years
Shadow Bay I 123,319 1,113,869 1,237,188 (10,279) 1984 30 Years
Shadow Bay II 139,709 1,261,948 1,401,657 (11,561) 1985 30 Years
Shadow Brook 3,065,496 18,660,192 21,725,688 (1,366,383) 1984 30 Years
Shadow Lake 1,140,000 13,198,891 14,338,891 (599,606) 1989 30 Years
</TABLE>
S-14
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Shadow Ridge Tallahassee, FL 1,018,858 150,327 1,352,939 - 4,518
Shadow Trace Atlanta, GA - 244,320 2,198,884 - 21,522
Shadowood I Sarasota, FL 1,420,269 157,661 1,418,945 - 13,534
Shadowood II Sarasota, FL 1,920,328 152,031 1,368,278 - 6,871
Sheffield Court Arlington, VA - 3,349,350 31,960,800 - 622,255
Sherbrook (IN) Indianapolis, IN 1,673,663 171,920 1,547,284 - 9,547
Sherbrook (OH) Columbus, OH 1,092,268 163,493 1,471,440 - 3,084
Sherbrook (PA) Pittsburgh, WV 1,278,955 279,665 2,516,985 - 2,476
Shoal Run Birmingham, AL - 1,380,000 12,218,577 - 49,790
Shores at Andersen Springs Chandler, AZ (O) 2,743,816 22,774,646 - 288,461
Siena Terrace Lake Forest, CA - 8,900,000 24,123,024 - 308,655
Sierra Canyon Canyon Cnty, CA - 3,480,000 12,546,066 4,200 678,896
Silver Creek Phoenix, AZ (O) 712,102 6,707,496 - 102,761
Silver Forest Ocala, FL 859,440 126,536 1,138,821 - 2,222
Silver Shadow Las Vegas, NV - 952,100 8,799,511 1,340 216,655
Silver Springs (FL) Jacksonville, FL - 1,828,700 16,474,735 2,400 589,385
Silver Springs (OK) Tulsa, OK - 672,500 6,052,669 - 116,197
Silverwood Mission, KS (S) 1,230,000 11,070,904 - 979,523
Sky Pines I & II Orlando, Fl 2,307,645 349,029 3,141,259 - 19,577
Sky Ridge Atlanta, GA 1,879,443 437,373 3,936,361 - 10,391
Skylark Union City, CA - 1,775,000 16,713,916 6,600 250,652
Skyline Gateway Tucson, AZ - 1,128,400 10,155,747 - 287,983
Skyview Rancho Santa Margarita, - 3,380,000 21,708,875 - 21,933
Slate Run (Bt) Louisville, KY 766,280 96,556 869,006 - 5,434
Slate Run (Hop) Hopkinsville, KY 908,184 91,304 821,734 - 19,319
Slate Run (Ind) Indianapolis, IN 2,028,467 295,593 2,660,337 - 9,937
Slate Run (Leb) Indianapolis, IN 1,232,500 154,061 1,386,549 - 17,957
Slate Run (Mia) Dayton, OH 862,241 136,065 1,224,583 - 3,260
Slate Run I (Lou) Louisville, KY 870,163 179,766 1,617,890 - 1,832
Slate Run II (Lou) Louisville, KY 1,168,080 167,723 1,509,506 - 3,212
Smoketree Polo Club Indio, CA 9,050,000 864,000 6,950,033 3,200 232,119
Sommerset Place Raleigh, NC - 360,000 7,800,206 - 71,740
Songbird San Antonio, TX 6,554,066 1,080,500 9,734,435 2,000 930,874
Sonoran Phoenix, AZ (O) 2,361,922 31,841,724 - 370,955
Sonterra at Foothill Ranch Orange Cnty, CA 16,378,029 7,500,000 24,048,507 3,400 38,798
South Creek Mesa, AZ 15,600,333 2,669,300 24,042,042 2,000 1,002,105
Southwood Palo Alto, CA - 6,930,000 14,324,069 6,600 624,987
Spicewood Indianapolis, IN 1,012,173 128,355 1,155,191 - 37
Spicewood Springs Jacksonville, FL - 1,536,000 21,138,009 - 979,925
Spinnaker Cove Hermitage, TN 14,205,000 1,420,500 12,770,421 41,231 501,696
Spring Gate Panama City, FL 971,750 132,951 1,196,563 - 8,708
Spring Oak Richmond, VA - 3,803,700 7,854,648 - -
Springbrook Anderson, SC 1,702,253 168,959 1,520,630 - 18,100
Springs Colony Orlando, FL (S) 631,900 5,860,157 8,500 914,970
Springs of Country Woods Salt Lake City, UT - 3,547,400 31,906,637 - 1,112,515
Springwood (Col) Columbus, OH 1,082,979 189,948 1,709,529 - 7,351
Springwood (IN) Ft. Wayne, IN 773,114 119,199 1,072,791 - 2,848
Springwood (KY) Cincinnati, KY 801,399 117,442 1,056,980 - 2,215
Springwood II (Aus) Youngstown, OH 473 78,057 702,513 - 731
Steeplechase Charlotte, NC - 1,111,500 10,180,750 - 97,056
Sterling Point Denver, CO - 935,500 8,419,200 - 168,200
Stewart Way I & II Savannah, GA 2,198,566 290,773 2,616,953 - 11,104
Stillwater Savannah, GA 941,996 151,198 1,360,780 - 4,254
Stonehenge (Day) Dayton, OH 1,180,692 202,294 1,820,645 - 1,857
Stonehenge (Ind) Indianapolis, IN 1,198,930 146,810 1,321,293 - 18,388
Stonehenge (Jas) Jasper, IN 438,289 78,335 705,013 - 2,403
Stonehenge (KY) Nashville, KY 790,000 111,632 1,004,684 - 4,406
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Shadow Ridge 150,327 1,357,457 1,507,783 (12,473) 1983 30 Years
Shadow Trace 244,320 2,220,406 2,464,726 (20,114) 1984 30 Years
Shadowood I 157,661 1,432,479 1,590,139 (13,296) 1982 30 Years
Shadowood II 152,031 1,375,149 1,527,180 (12,753) 1983 30 Years
Sheffield Court 3,349,350 32,583,055 35,932,405 (5,878,396) 1986 30 Years
Sherbrook (IN) 171,920 1,556,832 1,728,752 (14,579) 1986 30 Years
Sherbrook (OH) 163,493 1,474,524 1,638,018 (13,348) 1985 30 Years
Sherbrook (PA) 279,665 2,519,462 2,799,127 (22,240) 1986 30 Years
Shoal Run 1,380,000 12,268,367 13,648,367 (575,058) 1986 30 Years
Shores at Andersen Springs 2,743,816 23,063,106 25,806,922 (1,695,090) 1989 30 Years
Siena Terrace 8,900,000 24,431,678 33,331,678 (731,866) 1988 30 Years
Sierra Canyon 3,484,200 13,224,962 16,709,162 (854,087) 1987 30 Years
Silver Creek 712,102 6,810,256 7,522,358 (529,648) 1986 30 Years
Silver Forest 126,536 1,141,043 1,267,579 (10,405) 1985 30 Years
Silver Shadow 953,440 9,016,166 9,969,606 (1,936,532) 1992 30 Years
Silver Springs (FL) 1,831,100 17,064,120 18,895,220 (1,484,647) 1985 30 Years
Silver Springs (OK) 672,500 6,168,867 6,841,367 (637,471) 1984 30 Years
Silverwood 1,230,000 12,050,427 13,280,427 (2,512,138) 1986 30 Years
Sky Pines I & II 349,029 3,160,836 3,509,864 (29,036) 1986 30 Years
Sky Ridge 437,373 3,946,753 4,384,126 (35,177) 1987 30 Years
Skylark 1,781,600 16,964,567 18,746,167 (821,077) 1986 30 Years
Skyline Gateway 1,128,400 10,443,730 11,572,130 (1,041,992) 1985 30 Years
Skyview 3,380,000 21,730,807 25,110,807 (469,341) 1999 30 Years
Slate Run (Bt) 96,556 874,441 970,997 (8,247) 1984 30 Years
Slate Run (Hop) 91,304 841,053 932,357 (8,305) 1984 30 Years
Slate Run (Ind) 295,593 2,670,274 2,965,867 (23,947) 1984 30 Years
Slate Run (Leb) 154,061 1,404,505 1,558,566 (13,015) 1984 30 Years
Slate Run (Mia) 136,065 1,227,844 1,363,908 (11,097) 1985 30 Years
Slate Run I (Lou) 179,766 1,619,723 1,799,488 (14,642) 1984 30 Years
Slate Run II (Lou) 167,723 1,512,718 1,680,441 (13,772) 1985 30 Years
Smoketree Polo Club 867,200 7,182,152 8,049,352 (380,571) 1987-89 30 Years
Sommerset Place 360,000 7,871,945 8,231,945 (361,991) 1983 30 Years
Songbird 1,082,500 10,665,309 11,747,809 (1,393,324) 1981 30 Years
Sonoran 2,361,922 32,212,679 34,574,601 (2,360,245) 1995 30 Years
Sonterra at Foothill Ranch 7,503,400 24,087,305 31,590,705 (1,495,623) 1997 30 Years
South Creek 2,671,300 25,044,147 27,715,447 (3,328,589) 1986-89 30 Years
Southwood 6,936,600 14,949,056 21,885,656 (808,666) 1985 30 Years
Spicewood 128,355 1,155,228 1,283,583 (10,462) 1986 30 Years
Spicewood Springs 1,536,000 22,117,934 23,653,934 (1,035,439) 1986 30 Years
Spinnaker Cove 1,461,731 13,272,117 14,733,849 (1,371,884) 1986 30 Years
Spring Gate 132,951 1,205,271 1,338,222 (11,289) 1983 30 Years
Spring Oak 3,803,700 7,854,648 11,658,348 - (R) 30 Years
Springbrook 168,959 1,538,730 1,707,689 (14,782) 1986 30 Years
Springs Colony 640,400 6,775,127 7,415,527 (1,573,779) 1986 30 Years
Springs of Country Woods 3,547,400 33,019,153 36,566,553 (3,167,620) 1982 30 Years
Springwood (Col) 189,948 1,716,880 1,906,828 (15,468) 1983 30 Years
Springwood (IN) 119,199 1,075,639 1,194,838 (9,845) 1981 30 Years
Springwood (KY) 117,442 1,059,195 1,176,637 (9,746) 1986 30 Years
Springwood II (Aus) 78,057 703,244 781,301 (6,588) 1982 30 Years
Steeplechase 1,111,500 10,277,806 11,389,306 (487,273) 1986 30 Years
Sterling Point 935,500 8,587,400 9,522,900 (823,591) 1979 30 Years
Stewart Way I & II 290,773 2,628,057 2,918,829 (24,309) 1986 30 Years
Stillwater 151,198 1,365,034 1,516,232 (12,351) 1983 30 Years
Stonehenge (Day) 202,294 1,822,502 2,024,796 (16,375) 1985 30 Years
Stonehenge (Ind) 146,810 1,339,681 1,486,491 (12,647) 1984 30 Years
Stonehenge (Jas) 78,335 707,416 785,751 (6,651) 1985 30 Years
Stonehenge (KY) 111,632 1,009,090 1,120,722 (9,416) 1983 30 Years
</TABLE>
S-15
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Stonehenge (Mas) Canton, OH 624,377 145,386 1,308,477 - 7,424
Stonehenge (MI) Jackson, MI 1,068,963 146,554 1,318,985 - 330
Stonehenge (Ott) Lima, OH 558,155 97,654 878,884 - 4,432
Stonehenge I (Ric) Dayton, OH 1,122,698 156,343 1,407,087 - 10,760
Stoney Creek Tacoma, WA - 1,215,200 10,938,134 - 182,572
Stratford Lane I Columbus, OH 893,247 206,637 1,867,258 - 1,983
Strawberry Place Tampa, FL 770,474 78,445 706,003 - 14,281
Suffolk Grove I Columbus, OH - 214,107 1,926,961 - 3,288
Suffolk Grove II Columbus, OH 1,050,088 167,683 1,509,147 - 2,222
Sugartree I Daytona Beach, FL 983,117 164,985 1,484,863 - 10,917
Summer Chase Denver, CO 11,830,115 1,708,000 15,382,234 1,200 1,179,229
Summer Creek Plymouth, MN 2,303,767 576,000 3,815,800 3,600 242,638
Summer Ridge Riverside, CA - 600,500 5,422,807 1,900 223,894
Summerset Village Chatsworth, CA - 2,628,500 23,675,871 262,846 376,991
Summerwood Hayward, CA - 4,860,000 6,942,421 6,600 224,843
Summit at Lake Union Seattle, WA - 1,424,600 12,852,461 100 759,034
Summit Chase Coral Springs, FL - 1,120,000 4,433,084 2,100 348,037
Sun Creek Glendale, AZ (O) 896,929 7,066,940 - 130,685
Sunny Oak Village Overland Park, KS 14,898,087 2,222,600 20,230,536 25,150 2,151,058
Sunnyside Albany, GA 1,332,479 166,887 1,501,984 - 603
Sunrise Springs Las Vegas, NV - 972,600 8,775,662 2,700 379,434
Sunset Way I Miami, FL 1,619,086 258,568 2,327,111 - 11,739
Sunset Way II Miami, FL 2,636,031 274,903 2,474,128 - 4,764
Suntree Village Oro Valley, AZ (O) 1,571,745 13,095,941 - 374,645
Surprise Lake Village Tacoma, WA - 1,830,200 16,470,508 - 455,216
Surrey Downs Bellevue, WA - 3,050,000 7,848,618 7,100 76,023
Sutton Place Dallas, TX - 1,316,500 12,227,725 41,900 2,827,457
Sutton Place (FL) Lakeland, FL 855,842 120,887 1,087,987 - 7,479
Sweetwater Glen Lawrenceville, GA - 500,000 10,469,749 - 76,429
Sycamore Creek Scottsdale, AZ (E) 3,150,000 19,087,302 2,000 429,964
Tabor Ridge Cleveland, OH 1,687,748 235,940 2,123,463 - 560
Tamarind at Stoneridge Columbia, SC - 1,053,800 9,489,319 2,400 172,709
Tamarlane Portland, ME - 690,000 5,153,633 900 147,937
Tanasbourne Terrace Hillsboro, OR 11,982,492 1,873,000 16,891,205 3,700 1,264,592
Tanglewood (OR) Portland, OR - 760,000 6,863,649 3,000 1,615,686
Tanglewood (VA) Manassas, VA 24,855,587 2,103,400 19,674,833 4,895 2,251,142
Terrace Trace Tampa, FL 1,637,684 193,916 1,745,248 - 3,812
Thymewood II Miami, FL (552) 219,661 1,976,949 - 3,459
Timber Hollow Chapel Hill, NC - 800,000 11,219,537 - 130,316
Timbercreek Toledo, OH 1,542,455 203,420 1,830,778 - 1,371
Timberwalk Jacksonville, FL - 1,988,000 13,204,219 - 142,033
Timberwood Aurora, CO - 1,512,000 14,587,786 6,600 388,286
Timberwood (OH) Macon, GA 555,480 144,299 1,298,695 - 6,087
Town Center (TX) Kingwood, TX - 1,290,000 11,530,216 1,300 193,375
Town Center II (TX) Kingwood, TX - 1,375,000 13,837,474 - 1,590
Town Centre III & IV Laurel, MD 15,238,742 2,546,500 24,230,152 4,700 2,034,631
Towne Square Chandler, AZ - 1,924,710 36,211,417 - 319,701
Townhomes of Meadowbrook Auburn Hills, MI 10,071,742 1,380,000 12,367,314 2,600 469,826
Trails (CO), The Aurora, CO 10,074,269 1,217,800 8,877,205 100 1,710,373
Trails (NV), The Las Vegas, NV - 3,076,200 27,712,940 3,000 1,146,722
Trails (TX), The Arlington, TX - 616,700 5,745,125 21,300 579,446
Trails at Briar Forest Houston, TX 14,160,486 2,380,000 24,911,561 - 243,736
Trails at Dominion Park Houston, TX 25,013,613 2,529,000 35,699,589 2,800 1,092,971
Trails of Valley Ranch Irving, TX - 2,808,000 7,923,064 1,400 205,855
Trailway Pond I Burnsville, MN 4,913,909 476,800 4,309,055 2,484 232,699
Trailway Pond II Burnsville, MN 11,365,354 1,104,700 9,954,266 2,588 249,320
Trinity Lakes Cordova, TN (E) 1,980,000 14,955,732 2,000 469,324
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Stonehenge (Mas) 145,386 1,315,901 1,461,287 (12,102) 1984 30 Years
Stonehenge (MI) 146,554 1,319,315 1,465,869 (11,807) 1984 30 Years
Stonehenge (Ott) 97,654 883,316 980,970 (7,992) 1983 30 Years
Stonehenge I (Ric) 156,343 1,417,847 1,574,190 (12,848) 1984 30 Years
Stoney Creek 1,215,200 11,120,706 12,335,906 (1,071,035) 1990 30 Years
Stratford Lane I 206,637 1,869,241 2,075,878 (16,695) 1984 30 Years
Strawberry Place 78,445 720,283 798,728 (7,096) 1982 30 Years
Suffolk Grove I 214,107 1,930,249 2,144,356 (17,358) 1985 30 Years
Suffolk Grove II 167,683 1,511,369 1,679,051 (13,449) 1987 30 Years
Sugartree I 164,985 1,495,781 1,660,766 (13,702) 1984 30 Years
Summer Chase 1,709,200 16,561,462 18,270,662 (2,269,958) 1983 30 Years
Summer Creek 579,600 4,058,438 4,638,038 (230,197) 1985 30 Years
Summer Ridge 602,400 5,646,701 6,249,101 (742,851) 1985 30 Years
Summerset Village 2,891,346 24,052,863 26,944,208 (2,824,900) 1985 30 Years
Summerwood 4,866,600 7,167,264 12,033,864 (400,314) 1982 30 Years
Summit at Lake Union 1,424,700 13,611,495 15,036,195 (1,240,993) 1995 - 1997 30 Years
Summit Chase 1,122,100 4,781,121 5,903,221 (548,513) 1985 30 Years
Sun Creek 896,929 7,197,625 8,094,554 (556,216) 1985 30 Years
Sunny Oak Village 2,247,750 22,381,595 24,629,345 (3,379,027) 1984 30 Years
Sunnyside 166,887 1,502,587 1,669,474 (13,731) 1984 30 Years
Sunrise Springs 975,300 9,155,096 10,130,396 (1,827,290) 1989 30 Years
Sunset Way I 258,568 2,338,851 2,597,418 (21,465) 1987 30 Years
Sunset Way II 274,903 2,478,892 2,753,795 (22,424) 1988 30 Years
Suntree Village 1,571,745 13,470,586 15,042,331 (1,087,909) 1986 30 Years
Surprise Lake Village 1,830,200 16,925,724 18,755,924 (1,666,072) 1986 30 Years
Surrey Downs 3,057,100 7,924,641 10,981,741 (432,578) 1986 30 Years
Sutton Place 1,358,400 15,055,182 16,413,582 (3,867,574) 1985 30 Years
Sutton Place (FL) 120,887 1,095,466 1,216,353 (10,198) 1984 30 Years
Sweetwater Glen 500,000 10,546,178 11,046,178 (486,070) 1986 30 Years
Sycamore Creek 3,152,000 19,517,266 22,669,266 (1,589,335) 1984 30 Years
Tabor Ridge 235,940 2,124,022 2,359,962 (19,335) 1986 30 Years
Tamarind at Stoneridge 1,056,200 9,662,028 10,718,228 (832,338) 1985 30 Years
Tamarlane 690,900 5,301,569 5,992,469 (503,791) 1986 30 Years
Tanasbourne Terrace 1,876,700 18,155,797 20,032,497 (3,783,624) 1986-89 30 Years
Tanglewood (OR) 763,000 8,479,335 9,242,335 (2,101,837) 1976 30 Years
Tanglewood (VA) 2,108,295 21,925,975 24,034,270 (4,128,721) 1987 30 Years
Terrace Trace 193,916 1,749,060 1,942,976 (16,100) 1985 30 Years
Thymewood II 219,661 1,980,407 2,200,068 (17,760) 1986 30 Years
Timber Hollow 800,000 11,349,853 12,149,853 (521,951) 1986 30 Years
Timbercreek 203,420 1,832,149 2,035,569 (16,581) 1987 30 Years
Timberwalk 1,988,000 13,346,252 15,334,252 (620,991) 1987 30 Years
Timberwood 1,518,600 14,976,073 16,494,673 (874,206) 1983 30 Years
Timberwood (OH) 144,299 1,304,781 1,449,081 (12,035) 1985 30 Years
Town Center (TX) 1,291,300 11,723,592 13,014,892 (1,247,668) 1994 30 Years
Town Center II (TX) 1,375,000 13,839,065 15,214,065 (13,563) 1994 30 Years
Town Centre III & IV 2,551,200 26,264,783 28,815,983 (5,338,532) 1968, 1969 30 Years
Towne Square 1,924,710 36,531,118 38,455,828 (2,700,797) 1987-1996 30 Years
Townhomes of Meadowbrook 1,382,600 12,837,140 14,219,740 (756,374) 1988 30 Years
Trails (CO), The 1,217,900 10,587,578 11,805,478 (2,767,017) 1986 30 Years
Trails (NV), The 3,079,200 28,859,662 31,938,862 (5,629,075) 1988 30 Years
Trails (TX), The 638,000 6,324,570 6,962,570 (1,466,440) 1984 30 Years
Trails at Briar Forest 2,380,000 25,155,297 27,535,297 (1,152,474) 1990 30 Years
Trails at Dominion Park 2,531,800 36,792,560 39,324,360 (3,882,199) 1992 30 Years
Trails of Valley Ranch 2,809,400 8,128,919 10,938,319 (570,724) 1986 30 Years
Trailway Pond I 479,284 4,541,754 5,021,039 (345,153) 1988 30 Years
Trailway Pond II 1,107,288 10,203,586 11,310,874 (768,364) 1988 30 Years
Trinity Lakes 1,982,000 15,425,056 17,407,056 (1,298,278) 1985 30 Years
</TABLE>
S-16
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Trowbridge Atlanta, GA - 2,520,000 9,489,361 1,000 609,462
Turf Club Littleton, CO - 2,100,000 15,478,040 7,300 843,095
Turkscap I Tampa, FL 558,781 125,766 1,131,898 - 5,550
Turkscap III Tampa, FL 768,804 135,850 1,222,651 - 1,580
Tyrone Gardens Randolph, MA - 4,950,000 5,800,235 3,000 72,480
University Square I Tampa, FL 917,645 197,457 1,777,109 - 2,674
Valencia Plantation Orlando, FL - 873,000 12,819,377 - 51,727
Valley Creek I Woodbury, MN 12,827,815 1,622,600 14,626,770 4,115 629,348
Valley Creek II Woodbury, MN 10,110,100 1,229,500 11,091,476 3,159 159,419
Valleybrook Atlanta, GA 1,525,843 254,490 2,290,411 - 5,534
Valleyfield (KY) Lexington, KY 1,835,776 252,329 2,270,959 - 5,562
Valleyfield (PA) Pittsburg, PA - 274,317 2,468,850 - 6,692
Valleyfield I Atlanta, GA 1,629,018 252,413 2,271,717 - 2,510
Valleyfield II Atlanta, GA 1,026,548 258,320 2,324,883 - 2,086
Via Ventura Phoenix, AZ (E) 1,476,500 13,382,006 10,100 4,815,861
Villa Encanto Phoenix, AZ - 2,884,447 22,197,363 - 789,747
Villa Madeira Phoenix, AZ - 1,580,000 14,240,297 2,100 1,601,637
Villa Serenas Tucson, AZ 9,141,446 2,424,900 14,615,923 1,800 265,649
Villa Solana Laguna Hills, CA - 1,663,500 14,985,678 1,600 1,372,378
Village at Bear Creek Denver, CO 21,113,845 4,519,700 40,676,390 - 219,654
Village at Lakewood Phoenix, AZ (P) 3,166,411 13,859,090 - 441,698
Village at Tanque Verde Tucson, AZ (P) 1,434,838 7,134,638 - 303,789
Village Oaks Austin, TX 4,987,945 1,184,400 10,663,736 1,600 507,844
Village of Newport Federal Way, WA - 414,900 3,747,606 1,400 292,129
Village of Sycamore Ridge Memphis, TN - 621,300 5,612,046 2,600 262,988
Villas at Josey Ranch Carrollton, TX 6,727,424 1,584,000 7,264,404 3,700 269,222
Villas of Oak Creste San Antonio, TX - 905,800 8,151,738 - 493,841
Viridian Lake Fort Myers, FL - 960,000 17,806,758 - 283,004
Vista Del Lago Mission Viejo, CA 30,971,241 4,524,400 40,736,293 1,400 2,495,423
Vista Grove Mesa, AZ - 1,341,796 12,157,045 - 146,856
Vista Pointe Irving, TX - 2,079,000 17,028,694 1,800 151,120
Walden Wood Southfield, MI 5,706,032 833,300 7,513,690 1,400 1,360,155
Walker Place Dallas, TX 1,145,471 125,274 1,127,466 - 2,241
Walker's Mark Dallas, TX - 984,000 6,029,822 800 196,019
Warwick Station Denver, CO 9,534,250 2,281,900 20,543,195 100 201,494
Waterbury (GA) Athens, GA 657,813 147,450 1,327,050 - 2,444
Waterbury (IN) Indianapolis, IN 824,264 105,245 947,206 - 2,357
Waterbury (MI) Detroit,MI 2,106,702 331,739 2,985,650 - 24,135
Waterbury (OH) Cincinnati, OH 1,130,576 193,167 1,738,500 - 2,518
Waterbury (TN) Clarksville, TN 942,471 116,968 1,052,708 - 2,319
Waterford (Jax) Jacksonville, FL - 3,024,000 23,662,293 - 518,347
Waterford at Deerwood Jacksonville, FL 10,566,370 1,736,000 10,659,702 - 294,000
Waterford at Orange Park Orange Park, FL 9,540,000 1,960,000 12,098,784 - 963,644
Waterford at Regency Jacksonville, FL 7,075,238 1,113,000 5,184,162 - 134,766
Waterford at the Lakes Kent, WA - 3,100,200 16,153,087 - 558,075
Waterford Place (TN) Nashville, TN - 900,000 12,003,189 - 86,076
Waterford Village (Broward) Delray Beach, FL - 1,888,000 15,358,635 - 1,397,696
Watermark Square Portland, OR 8,061,856 1,580,000 14,247,039 500 1,058,489
Waterstone Place Seattle, WA 2,950,900 26,674,599 13,100 2,931,368
Welleby Lake Club Sunrise, FL - 3,648,000 17,620,879 - 214,745
Wellington (WA) Silverdale, WA 8,062,026 1,097,300 9,883,303 2,000 594,557
Wellington Hill Manchester, NH (S) 1,872,500 17,120,662 17,700 1,944,224
Wellsford Oaks Tulsa, OK - 1,310,500 11,794,290 - 188,148
Wentworth Detroit,MI - 217,502 1,957,520 - 2,180
West Of Eastland Columbus, OH 2,022,939 234,544 2,110,894 - 12,197
Westbrook Village Manchester, MO - 2,310,000 10,621,218 - 43,490
Westcreek Jacksonville, FL 180,466 185,199 1,666,792 - 12,032
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Trowbridge 2,521,000 10,098,823 12,619,823 (550,816) 1980 30 Years
Turf Club 2,107,300 16,321,136 18,428,436 (944,364) 1986 30 Years
Turkscap I 125,766 1,137,448 1,263,215 (10,406) 1977 30 Years
Turkscap III 135,850 1,224,231 1,360,081 (11,074) 1982 30 Years
Tyrone Gardens 4,953,000 5,872,715 10,825,715 (341,434) 1961/1965 30 Years
University Square I 197,457 1,779,783 1,977,240 (16,278) 1979 30 Years
Valencia Plantation 873,000 12,871,105 13,744,105 (574,894) 1990 30 Years
Valley Creek I 1,626,715 15,256,117 16,882,833 (1,152,417) 1989 30 Years
Valley Creek II 1,232,659 11,250,895 12,483,555 (845,794) 1990 30 Years
Valleybrook 254,490 2,295,945 2,550,435 (20,417) 1986 30 Years
Valleyfield (KY) 252,329 2,276,520 2,528,849 (20,533) 1985 30 Years
Valleyfield (PA) 274,317 2,475,542 2,749,859 (22,044) 1985 30 Years
Valleyfield I 252,413 2,274,228 2,526,641 (20,095) 1984 30 Years
Valleyfield II 258,320 2,326,970 2,585,290 (20,555) 1985 30 Years
Via Ventura 1,486,600 18,197,867 19,684,467 (4,160,469) 1980 30 Years
Villa Encanto 2,884,447 22,987,109 25,871,556 (1,754,746) 1983 30 Years
Villa Madeira 1,582,100 15,841,934 17,424,034 (3,318,290) 1971 30 Years
Villa Serenas 2,426,700 14,881,572 17,308,272 (1,297,882) 1973 30 Years
Villa Solana 1,665,100 16,358,056 18,023,156 (3,537,814) 1984 30 Years
Village at Bear Creek 4,519,700 40,896,044 45,415,744 (3,760,814) 1987 30 Years
Village at Lakewood 3,166,411 14,300,787 17,467,198 (1,116,058) 1988 30 Years
Village at Tanque Verde 1,434,838 7,438,426 8,873,264 (621,346) 1984-1994 30 Years
Village Oaks 1,186,000 11,171,580 12,357,580 (1,399,883) 1984 30 Years
Village of Newport 416,300 4,039,735 4,456,035 (871,926) 1987 30 Years
Village of Sycamore Ridge 623,900 5,875,035 6,498,935 (513,509) 1977 30 Years
Villas at Josey Ranch 1,587,700 7,533,626 9,121,326 (431,527) 1986 30 Years
Villas of Oak Creste 905,800 8,645,579 9,551,379 (929,891) 1979 30 Years
Viridian Lake 960,000 18,089,761 19,049,761 (820,681) 1991 30 Years
Vista Del Lago 4,525,800 43,231,717 47,757,517 (9,277,982) 1986-88 30 Years
Vista Grove 1,341,796 12,303,901 13,645,697 (774,793) 1997 - 1998 30 Years
Vista Pointe 2,080,800 17,179,814 19,260,614 (1,073,208) 1996 30 Years
Walden Wood 834,700 8,873,845 9,708,545 (2,174,376) 1972 30 Years
Walker Place 125,274 1,129,707 1,254,981 (10,667) 1988 30 Years
Walker's Mark 984,800 6,225,841 7,210,641 (365,841) 1982 30 Years
Warwick Station 2,282,000 20,744,689 23,026,689 (1,959,615) 1986 30 Years
Waterbury (GA) 147,450 1,329,495 1,476,945 (12,008) 1985 30 Years
Waterbury (IN) 105,245 949,563 1,054,808 (8,723) 1984 30 Years
Waterbury (MI) 331,739 3,009,785 3,341,524 (27,075) 1985 30 Years
Waterbury (OH) 193,167 1,741,018 1,934,185 (15,721) 1985 30 Years
Waterbury (TN) 116,968 1,055,027 1,171,995 (9,732) 1985 30 Years
Waterford (Jax) 3,024,000 24,180,639 27,204,639 (1,132,510) 1988 30 Years
Waterford at Deerwood 1,736,000 10,953,702 12,689,702 (524,459) 1985 30 Years
Waterford at Orange Park 1,960,000 13,062,428 15,022,428 (687,174) 1986 30 Years
Waterford at Regency 1,113,000 5,318,928 6,431,928 (265,356) 1985 30 Years
Waterford at the Lakes 3,100,200 16,711,163 19,811,363 (1,723,697) 1990 30 Years
Waterford Place (TN) 900,000 12,089,265 12,989,265 (542,453) 1994 30 Years
Waterford Village (Broward) 1,888,000 16,756,331 18,644,331 (798,065) 1989 30 Years
Watermark Square 1,580,500 15,305,528 16,886,028 (1,641,362) 1990 30 Years
Waterstone Place 2,964,000 29,605,967 32,569,967 (7,165,406) 1990 30 Years
Welleby Lake Club 3,648,000 17,835,624 21,483,624 (806,867) 1991 30 Years
Wellington (WA) 1,099,300 10,477,860 11,577,160 (1,948,942) 1990 30 Years
Wellington Hill 1,890,200 19,064,886 20,955,086 (4,193,508) 1987 30 Years
Wellsford Oaks 1,310,500 11,982,438 13,292,938 (1,186,540) 1991 30 Years
Wentworth 217,502 1,959,700 2,177,202 (17,646) 1985 30 Years
West Of Eastland 234,544 2,123,090 2,357,634 (20,121) 1977 30 Years
Westbrook Village 2,310,000 10,664,708 12,974,708 (269,544) 1984 30 Years
Westcreek 185,199 1,678,824 1,864,023 (15,664) 1986 30 Years
</TABLE>
S-17
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Westridge Tacoma, WA - 3,501,900 31,506,082 - 799,774
Westway Brunswick, GA 883,125 168,323 1,514,904 - 8,381
Westwood (IN) Elkhart, IN - 78,508 706,570 - 9,098
Westwood (OH) Columbus, OH 94,282 18,554 166,988 - -
Westwood Pines Tamarac, FL - 1,526,200 13,739,616 2,400 339,978
Whispering Oaks Walnut Creek, CA 10,972,056 2,167,300 19,539,586 3,500 1,060,849
Whispering Pines II Fr. Pierce, FL - 105,172 946,544 - 4,776
Whisperwood Alabany, GA 550,950 84,240 758,163 - 3,140
White Bear Woods White Bear Lake, MN 14,184,170 1,621,300 14,609,576 3,441 236,302
Wilcrest Woods Savannah, GA 1,348,783 187,306 1,685,757 - 5,027
Wilde Lake Richmond, VA 4,440,000 934,600 8,524,744 12,600 521,276
Willow Brook (NC) Durham, NC - 1,408,000 7,118,834 1,500 184,159
Willow Creek I (GA) Atlanta, GA 832,502 145,769 1,326,411 - 1,035
Willow Lakes Spartanburg, SC 2,050,475 200,990 1,808,906 - 7,841
Willow Run (GA) Atlanta, GA 1,730,934 197,965 1,781,684 - 9,904
Willow Run (IN) New Albany, IN 1,130,811 183,873 1,654,854 - 9,003
Willow Run (KY) Owensboro, KY 1,128,383 141,016 1,269,141 - 3,579
Willow Run (OH) Mansfield, OH 833,658 103,396 930,565 - 2,591
Willow Trail Norcross, GA - 1,120,000 11,412,982 - 84,286
Willowick Aurora, CO - 500,000 4,157,878 6,900 190,983
Willowood (GA) Macon, GA 1,154,151 160,258 1,442,318 - 4,980
Willowood (KY) Owensboro, KY - 96,239 866,148 - 9,062
Willowood East II Indianapolis, IN 786,368 104,918 944,260 - 8,583
Willowood I (Gro) Columbus, OH 947,000 126,045 1,134,405 - 854
Willowood I (IN) Bloomington, IN 1,140,000 163,896 1,475,066 - 7,636
Willowood I (KY) Lexington, KY 1,016,267 138,822 1,249,401 - 8,177
Willowood I (Woo) Akron, OH 732,395 117,254 1,055,287 - 1,349
Willowood II (Gro) Columbus, OH 552,007 70,924 638,312 - 237
Willowood II (IN) Bloomington, IN 1,148,500 161,306 1,451,756 - 1,841
Willowood II (KY) Lexington, KY 851,423 120,375 1,083,379 - 341
Willowood II (Tro) Dayton, OH 914,537 142,623 1,283,610 - 3,872
Willowood II (Woo) Akron, OH 868,458 103,199 928,792 - 3,464
Willows I (OH), The Columbus, OH 560,734 76,283 686,551 - 2,744
Willows II (OH), The Columbus, OH 640,430 96,679 870,108 - 6,021
Willows III (OH), The Columbus, OH 863,348 129,221 1,162,993 - 1,867
Wimberly Dallas, TX - 2,232,000 27,685,923 - 108,124
Wimbledon Oaks Arlington, TX 7,422,826 1,488,000 8,850,195 3,700 350,075
Windemere Mesa, AZ 5,992,960 949,000 8,771,280 300 411,868
Windmill Colorado Springs, CO - 395,544 4,958,634 100 797,354
Windridge (CA) Laguna Niguel, CA (N) 2,660,800 23,966,595 2,100 854,440
Windridge (GA) Dunwoody, GA - 1,224,000 13,627,762 - 156,084
Windwood I (FL) Melbourne, FL - 113,913 1,025,215 - 4,573
Windwood II (FL) Melbourne, FL 360,000 118,915 1,070,236 - 3,338
Wingwood (Orl) Orlando, FL 1,498,204 236,884 2,131,959 - 8,062
Winter Woods I (FL) Orlando, FL 947,610 144,921 1,304,292 - 5,310
Winterwood Charlotte, NC 11,737,476 1,720,100 15,501,142 1,900 1,667,447
Winthrop Court (KY) Lexington, KY 1,488,803 184,709 1,662,384 - 28,198
Winthrop Court II (OH) Columbus, OH 742,316 102,381 921,430 - 1,200
Wood Creek (CA) Pleasant Hill, CA - 9,728,000 23,009,768 1,900 302,901
Wood Crest Villa Westland, MI - 925,900 8,492,103 7,922 824,243
Wood Forest Daytona Beach, FL 6,125,061 1,008,000 4,950,210 - 29,316
Wood Lane Place Woodbury, MN 14,014,000 2,003,300 18,081,691 5,847 615,477
Woodbine (Cuy) Akron, OH 1,035,420 185,868 1,672,813 - 471
Woodbine (Por) Hungtington, OH 636,931 78,098 702,881 - 20,015
Woodbridge (M) Cary, NC 4,688,514 1,981,900 17,838,219 100 509,795
Woodcliff I Atlanta, GA 1,172,930 276,659 2,489,931 - 4,654
Woodcliff II Atlanta, GA 1,681,499 266,449 2,398,044 - 5,495
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ---------------------------------------------------------------------------------------------------------- DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Westridge 3,501,900 32,305,856 35,807,756 (3,146,814) 1987/1991 30 Years
Westway 168,323 1,523,286 1,691,608 (14,064) 1984 30 Years
Westwood (IN) 78,508 715,668 794,176 (6,752) 1984 30 Years
Westwood (OH) 18,554 166,988 185,543 (1,625) 1980 30 Years
Westwood Pines 1,528,600 14,079,594 15,608,194 (1,066,322) 1991 30 Years
Whispering Oaks 2,170,800 20,600,436 22,771,236 (2,456,734) 1974 30 Years
Whispering Pines II 105,172 951,319 1,056,491 (8,779) 1986 30 Years
Whisperwood 84,240 761,303 845,543 (7,249) 1985 30 Years
White Bear Woods 1,624,741 14,845,878 16,470,619 (1,126,466) 1989 30 Years
Wilcrest Woods 187,306 1,690,784 1,878,090 (15,352) 1986 30 Years
Wilde Lake 947,200 9,046,020 9,993,220 (1,042,447) 1989 30 Years
Willow Brook (NC) 1,409,500 7,302,993 8,712,493 (742,988) 1986 30 Years
Willow Creek I (GA) 145,769 1,327,446 1,473,214 (11,861) 1985 30 Years
Willow Lakes 200,990 1,816,747 2,017,737 (16,905) 1986 30 Years
Willow Run (GA) 197,965 1,791,588 1,989,553 (16,450) 1983 30 Years
Willow Run (IN) 183,873 1,663,857 1,847,730 (15,085) 1984 30 Years
Willow Run (KY) 141,016 1,272,720 1,413,736 (11,889) 1984 30 Years
Willow Run (OH) 103,396 933,156 1,036,552 (8,901) 1983 30 Years
Willow Trail 1,120,000 11,497,268 12,617,268 (530,427) 1985 30 Years
Willowick 506,900 4,348,862 4,855,762 (252,644) 1980 30 Years
Willowood (GA) 160,258 1,447,298 1,607,556 (13,089) 1984 30 Years
Willowood (KY) 96,239 875,210 971,449 (8,405) 1984 30 Years
Willowood East II 104,918 952,843 1,057,761 (9,133) 1985 30 Years
Willowood I (Gro) 126,045 1,135,259 1,261,304 (10,255) 1984 30 Years
Willowood I (IN) 163,896 1,482,702 1,646,598 (13,323) 1983 30 Years
Willowood I (KY) 138,822 1,257,578 1,396,401 (11,535) 1984 30 Years
Willowood I (Woo) 117,254 1,056,636 1,173,890 (9,683) 1984 30 Years
Willowood II (Gro) 70,924 638,548 709,472 (5,761) 1985 30 Years
Willowood II (IN) 161,306 1,453,597 1,614,903 (13,123) 1986 30 Years
Willowood II (KY) 120,375 1,083,720 1,204,096 (9,929) 1985 30 Years
Willowood II (Tro) 142,623 1,287,482 1,430,105 (11,897) 1987 30 Years
Willowood II (Woo) 103,199 932,257 1,035,456 (8,784) 1986 30 Years
Willows I (OH), The 76,283 689,295 765,578 (6,649) 1987 30 Years
Willows II (OH), The 96,679 876,129 972,808 (8,139) 1981 30 Years
Willows III (OH), The 129,221 1,164,860 1,294,081 (10,483) 1987 30 Years
Wimberly 2,232,000 27,794,047 30,026,047 (1,229,499) 1996 30 Years
Wimbledon Oaks 1,491,700 9,200,270 10,691,970 (518,830) 1985 30 Years
Windemere 949,300 9,183,148 10,132,448 (888,408) 1986 30 Years
Windmill 395,644 5,755,988 6,151,632 (1,702,527) 1985 30 Years
Windridge (CA) 2,662,900 24,821,035 27,483,935 (4,652,693) 1989 30 Years
Windridge (GA) 1,224,000 13,783,845 15,007,845 (643,036) 1982 30 Years
Windwood I (FL) 113,913 1,029,787 1,143,700 (9,723) 1988 30 Years
Windwood II (FL) 118,915 1,073,573 1,192,488 (10,097) 1987 30 Years
Wingwood (Orl) 236,884 2,140,021 2,376,905 (19,329) 1980 30 Years
Winter Woods I (FL) 144,921 1,309,603 1,454,524 (12,027) 1985 30 Years
Winterwood 1,722,000 17,168,589 18,890,589 (3,973,146) 1986 30 Years
Winthrop Court (KY) 184,709 1,690,582 1,875,291 (15,946) 1985 30 Years
Winthrop Court II (OH) 102,381 922,630 1,025,011 (8,332) 1986 30 Years
Wood Creek (CA) 9,729,900 23,312,669 33,042,569 (2,128,073) 1987 30 Years
Wood Crest Villa 933,822 9,316,346 10,250,168 (896,381) 1970 30 Years
Wood Forest 1,008,000 4,979,526 5,987,526 (238,822) 1985 30 Years
Wood Lane Place 2,009,147 18,697,168 20,706,315 (1,390,578) 1989 30 Years
Woodbine (Cuy) 185,868 1,673,284 1,859,152 (14,873) 1982 30 Years
Woodbine (Por) 78,098 722,896 800,994 (7,100) 1981 30 Years
Woodbridge (M) 1,982,000 18,348,014 20,330,014 (2,659,864) 1993-95 30 Years
Woodcliff I 276,659 2,494,585 2,771,244 (22,045) 1984 30 Years
Woodcliff II 266,449 2,403,539 2,669,989 (21,332) 1986 30 Years
</TABLE>
S-18
<PAGE>
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
<TABLE>
<CAPTION>
COST CAPITALIZED
SUBSEQUENT TO
INITIAL COST TO ACQUISITION
DESCRIPTION COMPANY (IMPROVEMENTS, NET) (I)
- --------------------------------------------------------------------------------------------------------------------------
BUILDING & BUILDING &
APARTMENT NAME LOCATION ENCUMBRANCES LAND FIXTURES LAND FIXTURES
- ---------------------- ---------------- ------------ --------- ----------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Woodcreek Beaverton, OR 10,836,214 1,753,700 15,804,205 2,100 2,119,075
Woodcrest I Macon, GA 1,152,424 115,739 1,050,217 - 3,979
Woodlake (WA) Kirkland, WA 11,642,214 6,624,000 16,735,484 7,400 250,511
Woodlake at Killearn Tallahassee, FL - 1,404,300 13,024,748 3,855 738,290
Woodland Hills Decatur, GA - 1,223,900 11,021,239 700 575,900
Woodland I & II (FL) Orlando, FL 3,498,688 461,949 4,157,538 - 28,119
Woodland Meadows Ann Arbor, MI - 2,003,600 18,049,552 2,400 312,397
Woodland Oaks Tulsa, OK - 893,100 8,038,166 - 407,656
Woodlands (KY) Nashville, KY - 72,094 648,844 - 18,514
Woodlands I (Col) Columbus, OH 1,802,330 231,996 2,087,960 - 10,966
Woodlands I (PA) Pittsburgh, PA 1,040,321 163,192 1,468,725 - 3,493
Woodlands I (Str) Cleveland, OH 1,412,684 197,378 1,776,398 - 2,905
Woodlands II (Col) Columbus, OH 1,563,244 192,633 1,733,701 - 9,332
Woodlands II (PA) Pittsburgh, PA - 192,972 1,736,751 - 11,689
Woodlands II (Str) Cleveland, OH 1,588,582 183,996 1,655,964 - 1,992
Woodlands III (Col) Columbus, OH - 230,536 2,074,824 - 6,001
Woodlands of Brookfield Brookfield, WI (Q) 1,480,000 13,961,081 4,600 237,393
Woodlands of Minnetonka Minnetonka, MN - 2,392,500 13,543,076 2,000 466,954
Woodleaf Campbell, CA 11,543,551 8,544,000 16,988,183 6,600 112,378
Woodmoor Austin, TX - 649,300 5,875,968 4,500 1,242,377
Woodridge (CO) Aurora, CO - 2,774,000 20,845,971 6,700 474,382
Woodridge (MN) Eagan, MN 7,712,379 1,600,000 10,449,579 2,300 247,486
Woods of North Bend Raleigh, NC - 1,039,000 9,305,319 500 1,305,050
Woodscape Raleigh, NC - 956,000 8,607,940 1,300 285,321
Woodside Lorton, VA - 1,308,100 12,510,903 17,900 505,533
Woodtrail Atlanta, GA 998,738 250,895 2,258,054 - 13,149
Woodvalley Anniston, AL 1,416,346 190,188 1,711,693 - 6,319
Wycliffe Court Nashville, TN 1,143,552 166,545 1,498,902 - 6,778
Wynbrook Atlanta, GA - 2,544,000 11,017,078 2,500 211,136
Wyndridge 2 Memphis, TN 14,135,000 1,486,000 13,749,636 2,000 556,066
Wyndridge 3 Memphis, TN 10,855,000 1,500,000 13,531,741 2,500 403,393
Yarmouth Woods Yarmouth, ME - 690,000 6,096,155 2,800 209,209
Yorktowne at Olde Mill Millersville, MD - 216,000 4,224,762 - 2,019,215
Yuma Court Colorado Springs, CO - 113,163 840,859 100 159,593
Miscellaneous - - 6,732,080 - 4,569
Operating Partnership Chicago, IL - - 88,566 - 150
Management Business Chicago, IL - - 3,442,962 101,000 32,920,524
------------- ------------- --------------- --------- -----------
Total Investment in
Real Estate $ 2,309,147,938 $1,546,641,806 $10,262,221,652 $3,735,914 $426,363,116
============= ============= =============== ========= ===========
Real Estate Held for
Disposition
Lakeridge at Moors Miami, FL $ - $ 2,100,000 $ 9,068,840 $ - $ 60,745
Sonnet Cove I Lexington, KY - 183,407 1,770,784 - 2,835,689
Sonnet Cove II Lexington, KY - 100,000 1,462,579 - 799,939
------------- ------------- --------------- --------- -----------
Total Real Estate Held for
Disposition $ - $ 2,383,407 $ 12,302,203 $ - $ 3,696,373
============= ============= =============== ========= ===========
Total Real Estate $2,309,147,938 $1,549,025,213 $10,274,523,855 $3,735,914 $430,059,488
============= ============= =============== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
GROSS AMOUNT CARRIED
AT CLOSE OF LIFE USED TO
DESCRIPTION PERIOD 12/31/99 COMPUTE
- ------------------------------------------------------------------------------------------------------------ DEPRECIATION IN
BUILDING & ACCUMULATED DATE OF LATEST INCOME
APARTMENT NAME LAND FIXTURES (A) TOTAL (B) DEPRECIATION CONSTRUCTION STATEMENT (C)
- ---------------------- --------- ------------- ------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Woodcreek 1,755,800 17,923,280 19,679,080 (3,965,455) 1982-84 30 Years
Woodcrest I 115,739 1,054,197 1,169,935 (9,867) 1984 30 Years
Woodlake (WA) 6,631,400 16,985,996 23,617,396 (939,644) 1984 30 Years
Woodlake at Killearn 1,408,155 13,763,038 15,171,193 (3,102,947) 1986 30 Years
Woodland Hills 1,224,600 11,597,140 12,821,740 (1,667,097) 1985 30 Years
Woodland I & II (FL) 461,949 4,185,657 4,647,605 (38,133) 1984/85 30 Years
Woodland Meadows 2,006,000 18,361,948 20,367,948 (1,509,989) 1987-1989 30 Years
Woodland Oaks 893,100 8,445,823 9,338,923 (861,147) 1983 30 Years
Woodlands (KY) 72,094 667,359 739,452 (6,855) 1983 30 Years
Woodlands I (Col) 231,996 2,098,926 2,330,922 (19,183) 1983 30 Years
Woodlands I (PA) 163,192 1,472,219 1,635,410 (13,177) 1983 30 Years
Woodlands I (Str) 197,378 1,779,304 1,976,681 (15,886) 1984 30 Years
Woodlands II (Col) 192,633 1,743,033 1,935,666 (15,871) 1984 30 Years
Woodlands II (PA) 192,972 1,748,440 1,941,412 (15,803) 1987 30 Years
Woodlands II (Str) 183,996 1,657,956 1,841,952 (14,857) 1985 30 Years
Woodlands III (Col) 230,536 2,080,825 2,311,361 (19,051) 1987 30 Years
Woodlands of Brookfield 1,484,600 14,198,474 15,683,074 (839,601) 1990 30 Years
Woodlands of Minnetonka 2,394,500 14,010,030 16,404,530 (1,073,483) 1988 30 Years
Woodleaf 8,550,600 17,100,561 25,651,161 (908,798) 1984 30 Years
Woodmoor 653,800 7,118,345 7,772,145 (1,731,345) 1981 30 Years
Woodridge (CO) 2,780,700 21,320,353 24,101,053 (1,240,035) 1980-82 30 Years
Woodridge (MN) 1,602,300 10,697,066 12,299,366 (640,231) 1986 30 Years
Woods of North Bend 1,039,500 10,610,369 11,649,869 (1,895,988) 1983 30 Years
Woodscape 957,300 8,893,261 9,850,561 (1,090,592) 1979 30 Years
Woodside 1,326,000 13,016,436 14,342,436 (2,515,124) 1987 30 Years
Woodtrail 250,895 2,271,203 2,522,098 (20,118) 1984 30 Years
Woodvalley 190,188 1,718,013 1,908,201 (15,624) 1986 30 Years
Wycliffe Court 166,545 1,505,680 1,672,224 (13,653) 1985 30 Years
Wynbrook 2,546,500 11,228,213 13,774,713 (671,616) 1972/1976 30 Years
Wyndridge 2 1,488,000 14,305,702 15,793,702 (1,431,485) 1988 30 Years
Wyndridge 3 1,502,500 13,935,134 15,437,634 (1,407,694) 1988 30 Years
Yarmouth Woods 692,800 6,305,364 6,998,164 (440,205) 1971/1978 30 Years
Yorktowne at Olde Mill 216,000 6,243,977 6,459,977 (4,584,812) 1974 30 Years
Yuma Court 113,263 1,000,452 1,113,715 (265,573) 1985 30 Years
Miscellaneous - 6,736,649 6,736,649 (1,038)
Operating Partnership - 88,716 88,716 (68,122) (H)
Management Business 101,000 36,363,486 36,464,486 (19,155,155) (G)
------------- -------------- -------------- ---------------
Total Investment in
Real Estate $1,550,377,719 $10,688,584,768 $12,238,962,488 $(1,070,486,957)
============= ============== ============== ===============
Real Estate Held for
Disposition
Lakeridge at Moors $ 2,100,000 $ 9,129,585 $ 11,229,585 $ (417,185) 1991 30 Years
Sonnet Cove I 183,407 4,606,473 4,789,880 (3,452,988) 1972 30 Years
Sonnet Cove II 100,000 2,262,518 2,362,518 (1,643,555) 1974 30 Years
------------- -------------- -------------- ---------------
Total Real Estate Held for
Disposition $ 2,383,407 $ 15,998,576 $ 18,381,983 $ (5,513,728)
============= ============== ============== ===============
Total Real Estate $1,552,761,126 $10,704,583,344 $12,257,344,470 $(1,076,000,085)
============= =============== ============== ===============
</TABLE>
S-19
<PAGE>
SCHEDULE III
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
NOTES
(A) The balance of furniture & fixtures included in the total investment in
real estate amount was $404,259,561 as of December 31, 1999.
(B) The aggregate cost for Federal Income Tax purposes as of December 31,
1999 was approximately $8.5 billion,
(C) The life to compute depreciation for furniture and fixtures is 5 years.
(D) These two properties are encumbered by $14,438,632 in bonds.
(E) These 17 properties are encumbered by $136,000,000 in bonds.
(F) These four properties are encumbered by $15,500,000 in bonds.
(G) This asset consists of various acquisition dates and largely represents
furniture, fixtures and equipment owned by the Management Business.
(H) This asset consists of various acquisition dates and represents
furniture, fixtures and equipment owned by the Operating Partnership.
(I) Improvements are net of write-off of fully depreciated assets which are
no longer in service.
(J) Formerly known as Oxford & Sussex.
(K) Formerly known as Post Place.
(L) Formerly known as The Vinings at Coral Springs.
(M) Formerly known as The Plantations(NC)
(N) These five properties are pledged as additional collateral in
connection with the tax-exempt bond refinancing of $177,570,000.
(O) These 21 properties are encumbered by $132,203,864 in bonds.
(P) These 5 properties are encumbered by $48,722,302 note payable.
(Q) These 5 properties are encumbered by $50,000,000 of mortgage debt.
(R) These properties are currently under development and will be completed
subsequent to December 31, 1999.
(S) These ten properties are encumbered by $177,570,000 in bonds.
(T) Includes Port Royale I, Port Royale II and Port Royale III. Port Royale
III is encumbered by a third party mortgage.
(U) These five properties are pledged as additional collateral in
connection with a tax-exempt bond refinancing totaling $122,104,116.
* Four Lakes was constructed in phases between 1968 & 1988.
(#) The Lodge-Texas was struck by a tornado that destroyed most of the
property. The property was reconstructed during 1989 & 1990.
(X) Pines of Springfield was constructed in phases between 1985 & 1987.
<PAGE>
Schedule III
ERP OPERATING LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
(AMOUNTS IN THOUSANDS)
The changes in total real estate for the years ended December 31, 1999, 1998,
and 1997 are as follows:
<TABLE>
1999 1998 1997
------------ ------------ -------------
<C> <S> <S> <S>
Balance, beginning of year $ 10,986,261 $ 7,121,435 $ 2,983,510
Acquisitions 1,448,582 3,927,768 4,112,126
Improvements 141,935 102,020 60,043
Write-off of fully depreciated assets
which are no longer in service - (25) (930)
Dispositions and other (319,434) (164,937) (33,314)
------------ ------------ -------------
Balance, end of year $ 12,257,344 $ 10,986,261 $ 7,121,435
============= ============ =============
</TABLE>
The changes in accumulated depreciation for the years ended December 31, 1999,
1998, and 1997 are as follows:
<TABLE>
1999 1998 1997
------------ ------------ -------------
<C> <S> <S> <S>
Balance, beginning of year $ 732,803 $ 444,762 $ 301,512
Depreciation 406,906 301,869 156,644
Write-off of fully depreciated assets
which are no longer in service - (25) (930)
Dispositions and other (63,708) (13,803) (12,464)
------------ ------------ -------------
Balance, end of year $ 1,076,001 $ 732,803 $ 444,762
============= ============= =============
</TABLE>
S-21
<PAGE>
Exhibit 12
ERP OPERATING LIMITED PARTNERSHIP
Consolidated Historical
Earnings to Combined Fixed Charges and Preferred Distributions Ratio
<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------------------------------
12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
---------- ---------- ----------- ----------- ----------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C>
REVENUES
Rental income $1,711,738 $1,293,560 $ 707,733 $ 454,412 $ 373,919
Fee income - outside managed 4,970 5,622 5,697 6,749 7,030
Interest income - investment in mortgage notes 12,559 18,564 20,366 12,819 4,862
Interest and other income 23,851 19,250 13,282 4,405 4,573
---------- ---------- ----------- ----------- ----------
Total revenues 1,753,118 1,336,996 747,078 478,385 390,384
---------- ---------- ----------- ----------- ----------
EXPENSES
Property and maintenance 414,026 326,733 176,075 127,172 112,186
Real estate taxes and insurance 171,289 126,009 69,520 44,128 37,002
Property management 61,626 53,101 26,793 17,512 15,213
Fee and asset management 3,587 4,279 3,364 3,837 3,887
Depreciation 408,688 301,869 156,644 93,253 72,410
Interest:
Expense incurred 337,189 246,585 121,324 81,351 78,375
Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444
General and administrative 22,296 20,631 14,821 9,857 8,129
---------- ---------- ----------- ----------- ----------
Total expenses 1,422,785 1,081,964 571,064 381,352 330,646
---------- ---------- ----------- ----------- ----------
Income before extraordinary items $ 330,333 $ 255,032 $ 176,014 $ 97,033 $ 59,738
========== ========== =========== =========== ==========
Combined Fixed Charges and Preferred Distributions:
Interest and other financing costs $ 337,189 $ 246,585 $ 121,324 $ 81,351 $ 78,375
Amortization of deferred financing costs 4,084 2,757 2,523 4,242 3,444
Preferred distributions 113,196 92,917 59,012 29,015 10,109
---------- ---------- ----------- ----------- ----------
TOTAL COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $ 454,469 $ 342,259 $ 182,859 $ 114,608 $ 91,928
========== ========== =========== =========== ==========
EARNINGS BEFORE COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS $ 671,606 $ 504,374 $ 299,861 $ 182,626 $ 141,557
========== ========== =========== =========== ==========
FUNDS FROM OPERATIONS BEFORE COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS (1)(2) $1,074,072 $ 801,065 $ 453,387 $ 273,800 $ 212,138
========== ========== =========== =========== ==========
RATIO OF EARNINGS BEFORE COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED CHARGES
AND PREFERRED DISTRIBUTIONS 1.48 1.47 1.64 1.59 1.54
========== ========== =========== =========== ==========
RATIO OF FUNDS FROM OPERATIONS BEFORE COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS TO COMBINED FIXED
CHARGES AND PREFERRED DISTRIBUTIONS 2.36 2.34 2.48 2.39 2.31
- --------------------------------------------------------------------------------------------------------------------------
========== ========== =========== =========== ==========
(1) Includes unconsolidated depreciation from Joint
Ventures and limited partnerships $ 1,009 $ 183 $ -- $ -- $ --
========== ========== =========== =========== ==========
(2) Excludes non-real estate depreciation $ (7,231) $ (5,361) $ (3,118) $ (2,079) $ (1,829)
========== ========== =========== =========== ==========
</TABLE>
<PAGE>
Exhibit 21
ERP OPERATING LIMITED PARTNERSHIP
SUBSIDIARIES
ENTITY
----------------------------------------------------------------------
1 EVANS WITHYCOMBE RESIDENTIAL LIMITED PARTNERSHIP
2 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP
3 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P.
4 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP II
5 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT L.P. II
6 EQUITY RESIDENTIAL PROPERTIES MANAGEMENT CORP III
7 EVANS WITHYCOMBE MANAGEMENT INC.
8 ARTERY NORTHAMPTON LIMITED PARTNERSHIP
9 BUENA VISTA PLACE ASSOCIATES
10 Capital Realty Investors Tax Exempt Fund, L.P.
11 CAPREIT Arbor Glen L.P.
12 CAPREIT ATRIUM, L.P.
13 CAPREIT BOTANY ARMS, L.P.
14 CAPREIT BRECKENRIDGE
15 CAPREIT BURWICK FARMS, L.P.
16 CAPREIT Cedars L.P.
17 CAPREIT CHIMNEYS, L.P.
18 CAPREIT CLARION, L.P.
19 CAPREIT CONCORDE BRIDGE, L.P.
20 CAPREIT CREEKWOOD, L.P.
21 CAPREIT EASTLAND ON THE LAKE, L.P.
22 CAPREIT Farmington Gates L.P.
23 CAPREIT GARDEN LAKE, L.P.
24 CAPREIT GLENEAGLE, L.P.
25 CAPREIT GREYEAGLE, L.P.
26 CAPREIT HAMPTON ARMS, L.P.
27 CAPREIT HIDDEN OAKS, L.P.
28 CAPREIT HIGHLAND GROVE, L.P.
29 CAPREIT MARINER'S WHARF, L.P.
30 CAPREIT NORTHLAKE, L.P.
31 CAPREIT Ridgeway Commons L.P.
32 CAPREIT River Oak L.P.
33 CAPREIT SILVER SPRINGS, L.P.
34 CAPREIT SYCAMORE RIDGE, L.P.
35 CAPREIT TARMARIND AT STONEBRIDGE, L.P.
36 CAPREIT TIVOLI LAKES CLUB, L.P.
37 CAPREIT Westwood Pines L.P.
38 CAPREIT Woodcrest Villa L.P.
39 CAPREIT WOODLAND MEADOWS, L.P.
40 CARROLLWOOD LP
41 CEDAR CREST GENERAL PARTNERSHIP
42 COUNTRY CLUB ASSOCIATES LIMITED PARTNERSHIP
43 COUNTRY RIDGE GENERAL PARTNERSHIP
44 CRICO of Trailway Pond II, L.P.
45 CRICO of White Bear Woods I, L.P.
46 CRICO of Ethan's I, L.P.
47 CRICO of Ethan's II, L.P.
48 CRICO of Fountain Place, L.P.
<PAGE>
ENTITY
----------------------------------------------------------------------
49 CRICO of James Street Crossing, L.P.
50 CRICO of Ocean Walk, L.P.
51 CRICO of Regency Woods, L.P.
52 CRICO of Trailway Pond I, L.P.
53 CRICO of Valley Creek I, L.P.
54 CRICO of Valley Creek II, L.P.
55 CRICO of Woodlane Place, L.P.
56 CRICO Royal Oaks, L.P.
57 E-G-ONE ASSOCIATES
58 E-G-TWO ASSOCIATES
59 E-LODGE ASSOCIATES LIMITED PARTNERSHIP
60 EQR-740 RIVER DRIVE, LLC
61 EQR-ALDERWOOD LP
62 EQR-ARBORETUM, LLC
63 EQR-ARBORS FINANCING LIMITED PARTNERSHIP
64 EQR-ARIZONA, L.L.C.
65 EQR-ARTBHOLDER, L.L.C.
66 EQR-ARTCAPLOAN, L.L.C.
67 EQR-BELLEVUE MEADOW GP LP
68 EQR-BELLEVUE MEADOW LP
69 EQR-BOND PARTNERSHIP
70 EQR-BRAMBLEWOOD GP LP
71 EQR-BRAMBLEWOOD LP
72 EQR-BRETON HAMMOCKS FINANCING LIMITED PARTNERSHIP
73 EQR-BRIARWOOD GP LP
74 EQR-BRIARWOOD LP
75 EQR-BROADWAY LP
76 EQR-BS FINANCING LIMITED PARTNERSHIP
77 EQR-CALIFORNIA, L.L.C
78 EQR-CAMELLERO FINANCING LIMITED PARTNERSHIP
79 EQR-CANTER CHASE GENERAL PARTNERSHIP
80 EQR-CEDAR POINTE GP LP
81 EQR-CEDAR POINTE LP
82 EQR-CEDAR RIDGE GP, LLC
83 EQR-CEDAR RIDGE LP
84 EQR-CHARDONNAY PARK, L.L.C.
85 EQR-CHELSEA SQUARE GP LP
86 EQR-CHELSEA SQUARE LP
87 EQR-COACHMAN TRIALS, LLC
88 EQR-CONNOR, LLC
89 EQR-CONTINENTAL VILLAS FINANCING LIMITED PARTNERSHIP
90 EQR-CREEKSIDE GP LP
91 EQR-CREEKSIDE LP
92 EQR-CREEKSIDE OAKS GENERAL PARTNERSHIP
93 EQR-DARTMOUTH WOODS GENERAL PARTNERSHIP
94 EQR-DORAL FINANCING LIMITED PARTNERSHIP
95 EQR-EMERALD PLACE FINANCING LIMITED PARTNERSHIP
96 EQR-EOI FINANCING LIMITED PARTNERSHIP
<PAGE>
ENTITY
----------------------------------------------------------------------
97 EQR-ESSEX PLACE FINANCING LIMITED PARTNERSHIP
98 EQR-FAIRFIELD, LLC
99 EQR-FERNBROOK, LLC
100 EQR-FIELDERS CROSSING GP, LLC
101 EQR-FIELDERS CROSSING LP
102 EQR-FLATLANDS, LLC
103 EQR-GOVERNOR'S PLACE FINANCING LIMITED PARTNERSHIP
104 EQR-GRANDVIEW I GP LP
105 EQR-GRANDVIEW I LP
106 EQR-GRANDVIEW II GP LP
107 EQR-GRANDVIEW II LP
108 EQR-GREENHAVEN GP LP
109 EQR-GREENHAVEN LP
110 EQR-HIGHLINE OAKS, L.L.C.
111 EQR-IRONWOOD, L.L.C.
112 EQR-KEYSTONE FINANCING GENERAL PARTNERSHIP
113 EQR-LAKESHORE AT PRESTON LP
114 EQR-LAKEVILLE RESORT GENERAL PARTNERSHIP
115 EQR-LAKEWOOD GREENS GP, LLC
116 EQR-LAKEWOOD GREENS LP
117 EQR-LEXINGTON FARM, LLC
118 EQR-LINCOLN GREEN I AND II GP LIMITED PARTNERSHIP
119 EQR-LINCOLN VILLAGE (CA) I LP
120 EQR-LINCOLN VILLAGE (CA) II LP
121 EQR-LODGE (OK) GP LIMITED PARTNERSHIP
122 EQR-MARKS A, L.L.C.
123 EQR-MARKS B, L.L.C.
124 EQR-MARTINS LANDING, LLC
125 EQR-MET CA FINANCING LIMITED PARTNERSHIP
126 EQR-MET FINANCING LIMITED PARTNERSHIP
127 EQR-MISSOURI, L.L.C.
128 EQR-MOUNTAIN SHADOWS GP LP
129 EQR-MOUNTAIN SHADOWS LP
130 EQR-NORTH CREEK, LLC
131 EQR-NORTH HILL, L.L.C.
132 EQR-OLDE REDMOND GP LP
133 EQR-OLDE REDMOND LP
134 EQR-OLDE REDMOND LP LP
135 EQR-OREGON, L.L.C.
136 EQR-OVERLOOK MANOR II, LLC
137 EQR-PARK PLACE I GENERAL PARTNERSHIP
138 EQR-PARK PLACE II GENERAL PARTNERSHIP
139 EQR-PARKCREST, LLC
140 EQR-PARKSIDE LP
141 EQR-PINE MEADOWS GARDEN GENERAL PARTNERSHIP
142 EQR-PLANTATION FINANCING LIMITED PARTNERSHIP
143 EQR-PLANTATION, L.L.C.
144 EQR-PLEASANT RIDGE LP
<PAGE>
ENTITY
----------------------------------------------------------------------
145 EQR-PORTLAND CENTER, LLC
146 EQR-PRESTON BEND, G.P.
147 EQR-RESERVE SQUARE LIMITED PARTNERSHIP
148 EQR-RIDGEMONT/MOUNTAIN BROOK, L.L.C.
149 EQR-RIVER PARK LP
150 EQR-SANDSTONE LP
151 EQR-SKYLARK, LLC
152 EQR-SMOKETREE, LLC
153 EQR-SONTERRA AT FOOTHILLS RANCH LP
154 EQR-SOUTHWOOD GP LP
155 EQR-SOUTHWOOD LP
156 EQR-SOUTHWOOD LP I LP
157 EQR-SOUTHWOOD LP II LP
158 EQR-SPINNAKER COVE, L.L.C.
159 EQR-SUMMER CREEK, LLC
160 EQR-SUMMERWOOD GP LP
161 EQR-SUMMERWOOD LP
162 EQR-SURREY DOWNS GP LP
163 EQR-SURREY DOWNS LP
164 EQR-SURREY DOWNS LP LP
165 EQR-SWN LINE FINANCING LIMITED PARTNERSHIP
166 EQR-TANASBOURNE TERRACE FINANCING LIMITED PARTNERSHIP
167 EQR-TENNESSEE LP
168 EQR-THE LAKES AT VININGS, LLC
169 EQR-TIMBERWOOD GP LP
170 EQR-TIMBERWOOD LP
171 EQR-TOWNHOMES OF MEADOWBROOK, LLC
172 EQR-TRAILS AT DOMINION GENERAL PARTNERSHIP
173 EQR-VALLEY PARK SOUTH FINANCING LIMITED PARTNERSHIP
174 EQR-VILLA SERENAS GENERAL PARTNERSHIP
175 EQR-VILLAGE OAKS GENERAL PARTNERSHIP
176 EQR-VILLAS OF JOSEY RANCH GP, LLC
177 EQR-VILLAS OF JOSEY RANCH LP
178 EQR-VININGS AT ASHLEY LAKE, L.L.C.
179 EQR-VIRGINIA, L.L.C.
180 EQR-WARWICK, L.L.C.
181 EQR-WASHINGTON, L.L.C.
182 EQR-WATERFALL, L.L.C.
183 EQR-WATSON G.P.
184 EQR-WELLINGTON, L.L.C.
185 EQR-WEST COAST PORTFOLIO GP, LLC
186 EQR-WIMBLEDON OAKS LP
187 EQR-WOODLAKE GP LP
188 EQR-WOODLAKE LP
189 EQR-WOODLEAF GP LP
190 EQR-WOODLEAF LP
191 EQR-WOODRIDGE I LP
192 EQR-WOODRIDGE II LP
<PAGE>
ENTITY
----------------------------------------------------------------------
193 EQR-WOODRIDGE III LP
194 EQR-WOODRIDGE, LLC
195 EQR-WYNDRIDGE II, L.L.C.
196 EQR-WYNDRIDGE III, L.L.C.
197 EQR-YORKTOWNE FINANCING LIMITED PARTNERSHIP
198 EQUITY-GREEN I VENTURE LIMITED PARTNERSHIP
199 EQUITY-GREEN II VENTURE LIMITED PARTNERSHIP
200 EQUITY-LODGE VENTURE LTD.
201 EQUITY-STONEBROOK VENTURE LTD.
202 ERP-SOUTHEAST PROPERTIES, LLC
203 E-STONEBROOK ASSOCIATES
204 EVANS WITHYCOMBE FINANCE, L.P.
205 EW CHANDLER, L.P.
206 FOREST PLACE ASSOCIATES
207 FOURTH TOWNE CENTRE LIMITED PARTNERSHIP
208 FPAII, L.P.
209 Geary Courtyard Associates
210 GEORGIAN WOODS ANNEX ASSOCIATES
211 GLENLAKE CLUB L.P.
212 GREENWICH WOODS LIMITED PARTNERSHIP
213 HAMMOCKS AT LONG POINT, LLC
214 HORIZON PLACE ASSOCIATES
215 HUNTERS'S GLEN GENERAL PARTNERSHIP
216 HUNTINGTON, LLC
217 LANDON LEGACY PARTNERS LIMITED
218 LANDON PRAIRIE CREEK PARTNERS LIMITED
219 LENOX PLACE LP
220 MAGNOLIA VILLA, LLC
221 MCCASLIN HIDDEN LAKES, LTD.
222 MCCASLIN RIVERHILL, LTD.
223 MCKINLEY HILLS PARTNERS-85,
224 MERRY LAND DOWNREIT I LP
225 MERRY LAND, LLC
226 ML NORTH CAROLINA APARTMENTS LP
227 ML TENNESSEE APARTMENTS LP
228 ML TEXAS APARTMENTS LP
229 NORTHRIDGE LAKES LP
230 NRL ASSOCIATES LP
231 OAKS AT BAYMEADOWS ASSOCIATES
232 OAKS AT REGENCY ASSOCIATES
233 ROLIDO PARQUE GP
234 ROSEHILL POINTE GENERAL PARTNERSHIP
235 SARASOTA BENEVA PLACE ASSOICATES, LTD.
236 SEAGULL DRIVE JOINT VENTURE
237 SECOND COUNRTY CLUB ASSOCIATES LIMITED PARTNERSHIP
238 SECOND GEORGIAN WOODS LIMITED PARTNERSHIP
239 SONGBIRD GENERAL PARTNERSHIP
240 SUMMIT PLACE, LLC
<PAGE>
ENTITY
----------------------------------------------------------------------
241 SUNNY OAK VILLAGE GENERAL PARTNERSHIP
242 THE CROSSINGS ASSOCIATES
243 THE GATES OF REDMOND, L.L.C.
244 THE WIMBERLY APARTMENT HOMES, LTD.
245 THIRD TOWNE CENTRE LIMITED PARTNERSHIP
246 TOWERS AT PORTSIDE URBAN RENEWAL COMPANY, LLC
247 VININGS CLUB AT METROWEST LP
248 WINDSOR PLACE, LLC
249 WOOD FOREST ASSOCIATES
250 WOODCREST (AUGUSTA), LLC
251 CRP SERVICE COMPANY, LLC
252 DUXFORD, LLC
253 EQR-BENEVA PLACE, LLC
254 EQR-BROOKDALE VILLAGE, LLC
255 EQR-CHICKASAW CROSSING, LLC
256 EQR-CODELLE, LLC
257 EQR-FOREST PLACE, LLC
258 EQR-GEORGIAN WOODS, LLC
259 EQR-HORIZON PLACE, LLC
260 EQR-LEXFORD LENDER, LLC
261 EQR-MOSAIC, LLC
262 EQR-NEW ENGLAND PROGRAM, LLC
263 EQR-PINETREE/WESTBROOKE, LLC
264 EQR-S & T, LLC
265 EQR-SABLE PALM AT LAKE BUENA VISTA, LLC
266 EQR-SCARBOROUGH SQUARE, LLC
267 EQR-TENNESSEE LOAN PORTFOLIO, LLC
268 EQR-THE WATERFORD AT DEERWOOD, LLC
269 EQR-THE WATERFORD AT ORANGE PARK, LLC
270 EQR-THE WATERFORD AT REGENCY, LLC
271 EQR-WOOD FOREST, LLC
272 GREENTREE APARTMENTS LP
273 LEXFORD GP II, LLC
274 LEXFORD PARTNERS, LLC
275 LEXFORD PROPERTIES MANAGEMENT, LLC
276 OLD REDWOODS, LLC
277 SCARBOROUGH ASSOCIATES
278 SECOND TOWNE CENTRE LP
279 THIRD GREENTREE ASSOCIATES LP
280 WOODBINE PROPERTIES
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Forms S-3 No. 333-45557) of ERP Operating Limited Partnership and in the
related Prospectus of our report dated February 16, 2000, except for Note 22,
as to which the date is March 20, 2000, with respect to the consolidated
financial statements and schedule of ERP Operating Limited Partnership included
in this Annual Report (Form 10-K) for the year ended December 31, 1999.
/s/ Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
March 23, 2000
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
STATE OF FLORIDA
COUNTY OF DADE
KNOW ALL MEN BY THESE PRESENTS that James D. Harper, Jr., having an
address at 11120 McCann Rd., Amity, OR 97101 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power of substitution and revocation, hereby ratifying and
confirming all that each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, James D. Harper, Jr., has hereunto set his hand this
29 day of February, 2000.
/s/ James D. Harper, Jr.
--------------------------
James D. Harper, Jr.
I, Marita B. Scholtz, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that James D. Harper, Jr., personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 29th day of February, 2000.
/s/ Marita B. Scholtz
-----------------------
(Notary Public)
My Commission Expires: 5/11/2003
------------------------------
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
-----------------
STATE OF ILLINOIS
COUNTY OF COOK
KNOW ALL MEN BY THESE PRESENTS that Errol R. Halperin, having an address
at 107 W. Delaware, Unit F, Chicago, IL 60610, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the doing
thereof, with full power of substitution and revocation, hereby ratifying and
confirming all that each of such Attorney-in-Fact or his substitutes shall
lawfully do or cause to be done by virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Errol R. Halperin, has hereunto set his hand this
29th day of February, 2000.
/s/ Errol R. Halperin
-----------------------
Errol R. Halperin
I, Anna L. De La Garza, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Errol R. Halperin, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 29th day of February, 2000.
/s/ Anna L. De La Garza
-------------------------
(Notary Public)
My Commission Expires: March 24, 2000
-----------------------
<PAGE>
Exhibit 24.3
POWER OF ATTORNEY
-------------------
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
KNOW ALL MEN BY THESE PRESENTS that John W. Alexander, having an address
at 255 COLVILLE RD., NORTH CAROLINA, has made, constituted and appointed and
BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II and
Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, John W. Alexander, has hereunto set his hand this
13th day of March, 2000.
/s/ John W. Alexander
----------------------------------------
John W. Alexander
I, Amy Alexander, a Notary Public in and for said County in the State of
aforesaid, do hereby certify that John W. Alexander, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 13th day of March, 2000.
/s/ Amy Alexander
-----------------------------------------
(Notary Public)
My Commission Expires: 10/31/2004
_________________________________
<PAGE>
Exhibit 24.4
POWER OF ATTORNEY
STATE OF Michigan
COUNTY OF Washtenaw
KNOW ALL MEN BY THESE PRESENTS that B. Joseph White, having an address at
3000 Hunting Valley, Ann Arbor, MI 48104, has made, constituted and appointed
and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II
and Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, B. Joseph White, has hereunto set his hand this 9th
day of March, 2000.
/s/ B. Joseph White
-------------------------
B. Joseph White
I, Sheryl L. Brueger, a Notary Public in and for said County in the State
of aforesaid, do hereby certify that B. Joseph White, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 9th day of March, 2000.
/s/ Sheryl L. Brueger
-------------------------
(Notary Public)
Sheryl L. Brueger
Notary Public, Washtenaw County, MI
My Commission Expires Oct. 9, 2002
My Commission Expires:
---------------------------------------
<PAGE>
Exhibit 24.5
POWER OF ATTORNEY
-----------------
STATE OF MARYLAND
COUNTY OF MONTGOMERY
KNOW ALL MEN BY THESE PRESENTS that Henry H. Goldberg, having an address
at 7200 Wisconsin Ave., Suite 1000, Bethesda, MD 20814, has made, constituted
and appointed and BY THESE PRESENTS, does make, constitute and appoint
Douglas Crocker II and Michael J. McHugh, or either of them, having an address
at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Henry H. Goldberg, has hereunto set his hand this
1st day of March, 2000.
/s/ Henry H. Goldberg
-----------------------
Henry H. Goldberg
I, Priscilla Drevo, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Henry H. Goldberg, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 1st day of March, 2000.
/s/ Priscilla Drevo
---------------------
Priscilla Drevo
My Commission Expires: 12/1/2003
---------
<PAGE>
Exhibit 24.6
POWER OF ATTORNEY
-----------------
STATE OF NEW YORK
COUNTY OF NEW YORK
KNOW ALL MEN BY THESE PRESENTS that Jeffrey H. Lynford, having an address
at 10 Holly Branch Rd., Katonoh, NY 10536, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Jeffrey H. Lynford, has hereunto set his hand this
1st day of March, 2000.
/s/ Jeffrey H. Lynford
-----------------------
Jeffrey H. Lynford
I, Stasia M. Ananson, a Notary Public in and for State of New York,
County of New York, do hereby certify that Jeffrey H. Lynford, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 1st day of March, 2000.
/s/ Stasia M. Ananson
----------------------
(Notary Public)
My Commission Expires: 2001, July 19
<PAGE>
Exhibit 24.7
POWER OF ATTORNEY
STATE OF New Jersey
COUNTY OF Bergen
------
KNOW ALL MEN BY THESE PRESENTS that Edward Lowenthal, having an address
at 13 Ackerman Rd. Saddle River, NJ 07458, has made, constituted and appointed
and BY THESE PRESENTS, does make, constitute and appoint Douglas Crocker II
and Michael J. McHugh, or either of them, having an address at Two North
Riverside Plaza, Chicago, Illinois, 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such, Attorney-in-Fact,
full power and authority to do and perform each and every act and thing,
requisite and necessary to be done in an about the premises, as fully, to all
intents and purposes as he might or could do if personally present at the
doing thereof, with full power of substitution and revocation, hereby
ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Edward Lowenthal, has hereunto set his hand this 2nd
day of March, 2000.
/s/ Edward Lowenthal
--------------------
Edward Lowenthal
I, Kim Beaulieu Ezzy, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Edward Lowenthal, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 2nd day of March, 2000.
/s/ Kim Beaulieu Ezzy
---------------------
(Notary Public)
KIM BEAULIEU EZZY
Notary Public,
State of New York
No. 01EZ6031418
My Commission Expires: ________________________ Qualified in New York
County
Commission Expires on
October 4, 2001.
<PAGE>
Exhibit 24.8
POWER OF ATTORNEY
STATE OF ARIZONA
COUNTY OF MARICOPA
KNOW ALL MEN BY THESE PRESENTS that Stephen O. Evans, having an address
at 5825 E. Starlight Way, Paradise Valley, AZ 85253 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in and about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and
revocation, hereby ratifying and confirming all that each of such
Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by
virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, Stephen O. Evans, has hereunto set his hand this
2nd day of March, 2000.
/s/ Stephen O. Evans
-----------------------
Stephen O. Evans
I, Kristine M. Kovac, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Stephen O. Evans, personally
known to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 2nd day of March, 2000.
/s/ Kristine M. Kovac
-----------------------
(Notary Public)
My Commission Expires: November 23, 2003
-------------------
<PAGE>
Exhibit 24.9
POWER OF ATTORNEY
STATE OF GEORGIA
COUNTY OF MCDUFFIE
KNOW ALL MEN BY THESE PRESENTS that Boone A. Knox, having an address
at 3133 Washington Rd. Thomson, GA 30824 has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and
revocation, hereby ratifying and confirming all that each of such
Attorney-in-Fact or his substitutes shall lawfully do or cause to be done by
virture hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed
writing.
IN WITNESS WHEREOF, Boone A. Knox, has hereunto set his hand this
29th day of February, 2000.
/s/ Boone A. Knox
-----------------------
Boone A. Knox
I, Barbara A. Crutchfield, a Notary Public in and for said County in the
State of aforesaid, do hereby certify that Boone A. Knox, personally known
to me to be the same person whose name is subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that he
signed and delivered said instrument as his own free voluntary act for the
uses and purposes therein set forth.
Given under my hand and notarial seal this 29th day of February, 2000.
/s/ Barbara A. Crutchfield
---------------------------
(Notary Public)
My Commission Expires: Notary Public, Glascock County, Georgia
My Commission Expires June 22, 2003
---------------------------------------
<PAGE>
Exhibit 24.10
POWER OF ATTORNEY
STATE OF Georgia
COUNTY OF Columbia
KNOW ALL MEN BY THESE PRESENTS that Michael N. Thompson, having an
address at 5 Brigantine Court, Savannah, GA 31410, has made, constituted and
appointed and BY THESE PRESENTS, does make, constitute and appoint Douglas
Crocker II and Michael J. McHugh, or either of them, having an address at Two
North Riverside Plaza, Chicago, Illinois 60606, his true and lawful
Attorney-in-Fact for him and his name, place and stead to sign and execute in
any and all capacities this Annual Report on Form 10-K and any or all
amendments to this Annual Report granting unto each of such,
Attorney-in-Fact, full power and authority to do and perform each and every
act and thing, requisite and necessary to be done in an about the premises,
as fully, to all intents and purposes as he might or could do if personally
present at the doing thereof, with full power of substitution and revocation,
hereby ratifying and confirming all that each of such Attorney-in-Fact or his
substitutes shall lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall remain in full force and effect until
terminated by the undersigned through the instrumentality of a signed writing.
IN WITNESS WHEREOF, Michael N. Thompson, has hereunto set his hand this
6th day of March, 2000.
/s/ Michael N. Thompson
-------------------------
Michael N. Thompson
I, Cindy W. Henry, a Notary Public in and for said County in the State
aforesaid, do hereby certify that Michael N. Thompson, personally known to me
to be the same person whose name is subscribed to the foregoing instrument
appeared before me this day in person and acknowledged that he signed and
delivered said instrument as his own free voluntary act for the uses and
purposes therein set forth.
Given under my hand and notarial seal this 6th day of March, 2000.
/s/ Cindy W. Henry
-------------------------
(Notary Public)
Notary Public, Columbia County, Georgia
My Commission Expires January 27, 2004
My Commission Expires:
---------------------------------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTARCTED FROM CONSOLIDATED
BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 29,117
<SECURITIES> 0
<RECEIVABLES> 1,731
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 388,098
<PP&E> 42,238,963
<DEPRECIATION> 1,070,487
<TOTAL-ASSETS> 11,715,689
<CURRENT-LIABILITIES> 279,908
<BONDS> 5,473,868
0
1,310,266
<COMMON> 0
<OTHER-SE> 47,896
<TOTAL-LIABILITY-AND-EQUITY> 11,715,689
<SALES> 1,729,267
<TOTAL-REVENUES> 1,753,118
<CGS> 0
<TOTAL-COSTS> 650,528
<OTHER-EXPENSES> 22,296
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 341,273
<INCOME-PRETAX> 330,333
<INCOME-TAX> 0
<INCOME-CONTINUING> 330,333
<DISCONTINUED> 93,535
<EXTRAORDINARY> (451)
<CHANGES> 0
<NET-INCOME> 310,221
<EPS-BASIC> 2.30
<EPS-DILUTED> 2.29
</TABLE>
