-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GRt7YA2VxOkYzk4jlnSySxmYZhSGdQx1IFqIpzjgFwWXPAXJKpPcaAdF0TBuTyaA ki9rRbZHN2buPD1sFEhHVg== 0000950124-99-000162.txt : 19990112 0000950124-99-000162.hdr.sgml : 19990112 ACCESSION NUMBER: 0000950124-99-000162 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981106 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990111 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST INDUSTRIAL LP CENTRAL INDEX KEY: 0001033128 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363924586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 333-21873 FILM NUMBER: 99504283 BUSINESS ADDRESS: STREET 1: 311 S WACKER DR STREET 2: STE 4000 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123444300 MAIL ADDRESS: STREET 1: 150 N WACKER DR STREET 2: STE 150 CITY: CHICAGO STATE: IL ZIP: 60606 8-K/A 1 FORM 8-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A NO. 1 Current report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------ Commission File Number 333-21873 Date of Report (date of earliest event reported): NOVEMBER 6, 1998 FIRST INDUSTRIAL, L.P. (Exact name of Registrant as specified in its Charter) DELAWARE 36-3924586 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606 (Address of principal executive offices) (312) 344-4300 (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS Since the filing of the First Industrial, L.P. (the "Operating Partnership") Form 8-K dated April 6, 1998, as amended by the report on Form 8-K/A No. 1 filed on June 16, 1998, the Operating Partnership acquired 69 industrial properties from unrelated parties and one industrial property from a related party during the period April 17, 1998 through November 6, 1998 and partnerships in which the Operating Partnership owns a 99% limited partnership interest (the "Other Real Estate Partnerships") purchased three industrial properties from unrelated parties and one industrial property from a related party during the period April 17, 1998 through November 6, 1998. The combined purchase price of the 70 industrial properties acquired by the Operating Partnership totaled approximately $102.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The combined purchase price of the four industrial properties acquired by the Other Real Estate Partnerships totaled approximately $7.2 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 70 industrial properties acquired by the Operating Partnership and the four industrial properties acquired by the Other Real Estate Partnerships are described below and were funded with either or a combination of working capital, the issuance of limited partnership units in the Operating Partnership (the "Units"), preferred capital contributions from the general partner, the assumption of secured debt, borrowings under the Operating Partnership's $300 million unsecured revolving credit facility and the issuance of other unsecured debt. The Operating Partnership and the Other Real Estate Partnerships will operate the facilities as industrial rental property. On September 28, 1998, the Operating Partnership, through a limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the "September 1998 Joint Venture") with an institutional investor to invest in industrial properties. Two limited liability companies in which the Operating Partnership is the sole member, will own a 10% equity interest in the September 1998 Joint Venture and will provide property and asset management services to the September 1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial properties from unrelated parties and seven industrial properties from the Operating Partnership during the period October 9, 1998 through November 6, 1998. The combined purchase price of the 111 industrial properties acquired totaled approximately $171.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 111 industrial properties acquired by the September 1998 Joint Venture are described below and were funded with cash capital contributions made by the partners of the September 1998 Joint Venture and the assumption and issuance of secured debt. The September 1998 Joint Venture will operate these facilities as industrial rental property. PROPERTIES ACQUIRED BY THE OPERATING PARTNERSHIP AND THE OTHER REAL ESTATE PARTNERSHIPS: * On May 19, 1998, the Operating Partnership purchased a 56,400 square foot light industrial property located in Arlington Heights, Illinois. The purchase price for the property was approximately $1.7 million. The property was purchased from Dynasty Property Group, an Illinois general partnership. * On May 21, 1998, the Operating Partnership purchased five light industrial properties and four research and development/flex properties totaling 135,662 square feet located in St. Petersburg, Florida. The aggregate purchase price for these properties was approximately $7.3 million. The properties were purchased from Gandy/275 Associates, a Florida general partnership. * On June 10, 1998, the Other Real Estate Partnerships purchased an 88,000 square foot regional warehouse property located in Des Moines, Iowa for approximately $1.9 million. The property was purchased from Jared R. Johnson and Elaine E. Johnson. * On June 23, 1998, the Operating Partnership purchased a 292,471 square foot light industrial property located in Denver, Colorado from a firm in which an officer of the Operating Partnership owned a 12.08% interest. The purchase price for the property was approximately $12.2 million which was funded with $8.1 million in cash and the issuance of 132,109 Units valued at $4.1 million. The property was purchased from Pacifica Bryant Warehouse, LLC, a Colorado limited liability company. Rental history had not commenced as of the date of purchase. * On June 30, 1998, the Operating Partnership purchased an 84,760 square foot light industrial property located in Skokie, Illinois. The purchase price for the property was approximately $2.6 million. The property was purchased from 3 Com Corporation. This property was owner occupied prior to the date of purchase. 1 3 * On July 7, 1998, the Operating Partnership purchased one light industrial property, one bulk warehouse property and one regional warehouse property totaling 347,056 square feet located in Conyers, Georgia. The aggregate purchase price for these properties was approximately $9.9 million. The properties were purchased from Robert Pattillo Properties, Inc., a Georgia corporation. * On July 16, 1998, the Other Real Estate Partnerships purchased a 44,427 square foot research and development/flex property located in Tampa, Florida from a firm in which an officer and an employee of the Operating Partnership owned a 77.5% interest. The purchase price for the property was approximately $3.2 million which was funded with $.6 million in cash, the assumption of $2.6 million of debt and the issuance of 1,190 Units valued at $0.03 million. The property was purchased from TK-SV, Ltd. * On August 14, 1998, the Operating Partnership purchased two light industrial properties totaling 87,462 square feet located in Phoenix, Arizona. The aggregate purchase price for these properties was approximately $5.0 million. The properties were purchased from Orsett/40th Street and I & 10 Limited Partnership. Rental history commenced on September 1, 1997. * On August 18, 1998, the Operating Partnership purchased a 50,338 square foot light industrial property located in Port Washington, New York. The purchase price for the property was approximately $2.5 million. The property was purchased from Seaview Harbor Associates. * On August 31, 1998, the Operating Partnership purchased 34 light industrial properties and two research and development/flex properties totaling 856,516 square feet located in Portland, Oregon. The aggregate purchase price for these properties was approximately $44.5 million which was funded with $28.5 million in cash, the assumption of $2.3 million in debt and the issuance of 455,483 Units valued at $13.7 million. The properties were purchased from D.W. Sivers Company, Sivers Investment Partnership, Dennis W. Sivers, Sivers Family Real Property, L.L.C. and Wendell C. Sivers Marital Trust. * On September 30, 1998, the Other Real Estate Partnerships purchased two light industrial properties totaling 50,900 square feet located in Aston, Pennsylvania. The aggregate purchase price for these properties was approximately $2.1 million. The properties were purchased from Richard C. DeSantis and Paul C. Steelman, individually and as co-partners t/a Richard DeSantis Developers. * On September 30, 1998, the Operating Partnership purchased a 121,400 square foot bulk warehouse property located in Lavergne, Tennessee. The purchase price for the property was approximately $1.5 million. The property was purchased from AMTROL, Inc., a Rhode Island corporation. Rental history had not commenced as of the date of purchase. * On October 13, 1998, the Operating Partnership purchased a 41,800 square foot bulk warehouse property located in Romulus, Michigan. The purchase price for the property was approximately $1.3 million. The property was purchased from Airborne Express Corporation. This property was owner occupied prior to the date of purchase. * On October 21, 1998, the Operating Partnership purchased a 52,329 square foot light industrial property located in Hauppauge, New York. The purchase price for the property was approximately $2.3 million which was funded with $2.3 million in cash and the issuance of 1,650 Units valued at $.04 million. The property was purchased from 275 Corpark Associates Company, a New York partnership. * On October 30, 1998, the Operating Partnership purchased a 20,000 square foot light industrial property located in Dayton, Ohio. The purchase price for the property was approximately $0.7 million which was funded with $.3 million in cash and the issuance of 13,704 Units valued at $.4 million. The property was purchased from Trottwood Industrial Park, an Ohio general partnership. * On November 5, 1998, the Operating Partnership purchased nine light industrial properties and three research and development/flex properties totaling 291,168 square feet located in Richland Hills, Texas. The aggregate purchase price for these properties was approximately $10.5 million which was funded with $7.7 million in cash, the assumption of $1.3 million in debt and the issuance of 60,000 Units valued at $1.5 million. The properties were 2 4 purchased from Priscilla Ann Hodges, Leland A. Hodges, III, Margery Lynn Hodges Berry and Four Star Investments, Inc. PROPERTIES ACQUIRED BY THE SEPTEMBER 1998 JOINT VENTURE: * On October 9, 1998, the September 1998 Joint Venture purchased 61 industrial properties totaling 2,856,388 square feet. Of the 61 industrial properties purchased, 47 properties are located in Houston, Texas; three properties are located in McAllen, Texas; two properties are located in Indianapolis, Indiana; two properties are located in Irving, Texas; two properties are located in Nashville, Tennessee; one property is located in Tampa, Florida; one property is located in Milwaukee, Wisconsin; one property is located in Bolingbrook, Illinois; one property is located in Des Plaines, Illinois; and one property is located in Romulus, Michigan. The aggregate purchase price for these properties was approximately $94.8 million. Fifty-nine of the 61 industrial properties were purchased from Investors Equity Fund, Inc./162516 Canada, Inc.; Investors Equity Fund, Inc./168065 Canada, Inc.; Investors Equity Fund, Inc./167098 Canada, Inc.; Investors Equity Fund, Inc.; KIRKWOOD Tech Associates, Ltd.; Greenbriar III Associates, Ltd.; Jameel Warehouses, Inc.; Rockley Road Properties, Inc.; AXXA, L.L.C.; 34th Street Building, Ltd.; Pinemont-Hempstead Associates I, Ltd.; Pinemont-Hempstead Associates II, Ltd.; 11421 Todd Road Limited Partnership; East Warehouse, L.L.C.; Houston Industrial Warehouses, L.L.C.; Industrial Partners, L.L.C.; TMC Properties, L.L.C., a New Jersey limited liability company; Merit 1995 Industrial Portfolio Limited Partnership, a Texas limited partnership; Guion Road Associates, Inc.; Southwest Centre, a Texas general partnership; MMC Capital Corp.; BVT Acorn Distribution Center, Ltd., a Tennessee limited partnership; APPC Metroplex Investors 1984, Ltd., L.P.; and Stair Realty, a Florida joint venture. Two of the 61 industrial properties were purchased from the Operating Partnership. * On October 23, 1998, the September 1998 Joint Venture acquired six industrial properties totaling 859,136 square feet. Of the six industrial properties purchased, three properties are located in Wichita, Kansas; one property is located in Addison, Illinois; one property is located in Aston, Pennsylvania; and one property is located in Louisville, Kentucky. The aggregate purchase price for these properties was approximately $20.0 million. The properties were purchased from Realco Investments; A.S. Industrial Properties; Aston Investments; and Starker Services, Inc. * On November 6, 1998, the September 1998 Joint Venture purchased 44 industrial properties totaling 1,442,842 square feet. Of the 44 industrial properties purchased, 26 properties are located in Fort Worth, Texas; ten properties are located in McAllen, Texas; five properties are located in Ann Arbor, Michigan; one property is located in Clearwater, Florida; one property is located in Deer Park, New York; and one property is located in Cherry Hills, New Jersey. The aggregate purchase price for these properties was approximately $56.2 million. Thirty-nine of the 44 industrial properties were purchased from Midway Brazos Partners, Ltd., O.P. Leonard. Jr.; Louise Leonard Keffler; Leonard Properties, et al; Virginia Leonard Marital Trust; BMP Joint Venture, a Texas joint venture; 1016 Partnership, a Texas general partnership; Sally Elaine Wilson, individually, as Independent Executor of the Estate of Darrell L. Wilson (deceased) and as Testamentary Trustee under the Last Will and Testament of Darrell L. Wilson (deceased) and Phillip Hunke; Corridor Commercial Center Associates, a Florida general partnership; Wilson Partnership, a Texas general partnership; Gilbert King and Kenneth Katzman, as Executors under the Last Will and Testament of Jerome Krinsky; and C.H.O.C.K. Associates, a New Jersey general partnership. Five of the 44 industrial properties were purchased from the Operating Partnership. 3 5 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements: Combined Historical Statements of Revenues and Certain Expenses for the 1998 Acquisition B Properties - Unaudited. Combined Historical Statements of Revenues and Certain Expenses for the 1998 Acquisition II Properties and Notes thereto with Independent Accountant's report dated December 31, 1998. (b) Pro Forma Financial Information: Pro Forma Balance Sheet as of September 30, 1998. Pro Forma Statement of Operations for the Nine Months Ended September 30, 1998. Pro Forma Statement of Operations for the Year Ended December 31, 1997. (c) Exhibits. Exhibits Number Description --------------- ----------- 23 Consent of PricewaterhouseCoopers LLP, Independent Accountants 4 6 INDEX TO FINANCIAL STATEMENTS -----------------------------
PAGE ---- 1998 ACQUISITION B PROPERTIES - ----------------------------- Combined Historical Statements of Revenues and Certain Expenses for the 1998 Acquisition B Properties for the Nine Months Ended September 30, 1998 and the Year Ended December 31, 1997- Unaudited.................................... 6 1998 ACQUISITION I PROPERTIES ----------------------------- Report of Independent Accountants.................................................. 7 Combined Historical Statements of Revenues and Certain Expenses for the 1998 Acquisition II Properties for the Nine Months Ended September 30, 1998 (Unaudited) and for the Year Ended December 31, 1997............................... 8 Notes to Combined Historical Statements of Revenues and Certain Expenses........... 9-10 PRO FORMA FINANCIAL INFORMATION - ------------------------------- Pro Forma Balance Sheet as of September 30, 1998................................... 11 Pro Forma Statement of Operations for the Nine Months Ended September 30, 1998..... 12-13 Notes to Pro Forma Financial Statements............................................ 14-17 Pro Forma Statement of Operations for the Year Ended December 31, 1997............. 18-19 Notes to Pro Forma Financial Statement............................................. 20-24
5 7 1998 ACQUISITION B PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) The Combined Historical Statements of Revenues and Certain Expenses as shown below, present the summarized results of operations of 18 of 74 industrial properties acquired (of which 17 properties were acquired from unrelated parties and one property was acquired from a related party) during the period April 17, 1998 through November 6, 1998 (collectively, the "1998 Acquisition B Properties") by First Industrial, L.P. (the "Operating Partnership"). The Combined Historical Statement of Revenues and Certain Expenses for the Nine Months Ended September 30, 1998 includes operations only for the periods for which the properties were not owned by the Operating Partnership. These statements are exclusive of 48 properties (the "1998 Acquisition II Properties") acquired by the Operating Partnership which have been audited and are included elsewhere in this Form 8-K/A No. 1, four properties acquired by partnerships in which the Operating Partnership has a 99% limited partnership interest, two properties occupied by the previous owner prior to acquisition and two properties in which rental history had not commenced prior to the date of purchase. The 1998 Acquisition B Properties were acquired for an aggregate purchase price of approximately $29.4 million and have an aggregate gross leaseable area of 749,252 square feet. A description of each property is included in Item 5.
FOR THE NINE FOR THE MONTHS ENDED YEAR ENDED SEPTEMBER 30, 1998 DECEMBER 31, 1997 (UNAUDITED) (UNAUDITED) ---------------------- --------------------- Revenues: Rental Income................................. $ 1,556 $ 2,677 Tenant Recoveries and Other Income............ 401 786 ---------------------- --------------------- Total Revenues........................... 1,957 3,463 ---------------------- --------------------- Expenses: Real Estate Taxes............................. 311 567 Repairs and Maintenance....................... 89 152 Property Management........................... 64 116 Utilities..................................... 15 23 Insurance..................................... 15 37 Other......................................... 13 22 --------------------- --------------------- Total Expenses.......................... 507 917 ---------------------- --------------------- Revenues in Excess of Certain Expenses........... $ 1,450 $ 2,546 ====================== =====================
6 8 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of First Industrial, L.P. We have audited the accompanying combined historical statement of revenues and certain expenses of the 1998 Acquisition II Properties as described in Note 1 for the year ended December 31, 1997. This financial statement is the responsibility of the 1998 Acquisition II Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined historical statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K/A No. 1 dated November 6, 1998 of First Industrial, L.P. and is not intended to be a complete presentation of the 1998 Acquisition II Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the 1998 Acquisition II Properties for the year ended December 31, 1997 in conformity with generally accepted accounting principles. PRICEWATERHOUSECOOPERS LLP Chicago, Illinois December 31, 1998 7 9 1998 ACQUISITION II PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS)
FOR THE NINE MONTHS ENDED FOR THE SEPTEMBER 30, 1998 YEAR ENDED (UNAUDITED) DECEMBER 31, 1997 ---------------------- --------------------- Revenues: Rental Income.................................. $ 3,524 $ 5,782 Tenant Recoveries and Other Income............. 305 606 ---------------------- --------------------- Total Revenues............................ 3,829 6,388 ---------------------- --------------------- Expenses: Real Estate Taxes.............................. 420 682 Repairs and Maintenance........................ 107 189 Property Management............................ 67 83 Utilities...................................... 44 89 Insurance...................................... 42 51 Other.......................................... 23 30 ---------------------- --------------------- Total Expenses........................... 703 1,124 ---------------------- --------------------- Revenues in Excess of Certain Expenses........... $ 3,126 $ 5,264 ====================== =====================
The accompanying notes are an integral part of the financial statements. 8 10 1998 ACQUISITION II PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 1. BASIS OF PRESENTATION. The Combined Historical Statements of Revenues and Certain Expenses (the "Statements") combined the results of operations of 48 industrial properties acquired by First Industrial, L.P. (the "Operating Partnership") during the period April 17, 1998 through November 6, 1998 (the "1998 Acquisition II Properties"). The 1998 Acquisition II Properties were acquired for an aggregate purchase price of approximately $55.0 million.
SQUARE # OF FEET DATE DATE RENTAL METROPOLITAN AREA PROPERTIES (UNAUDITED) ACQUIRED HISTORY COMMENCED --------------------- ------------ -------------------------- ---------------- ----------------- Portland, Oregon 36 856,516 August 31, 1998 January 1, 1997 Richland Hills, Texas 12 291,168 November 5, 1998 January 1, 1997 ------------ -------------------------- 48 1,147,684 ============ ==========================
The unaudited Combined Historical Statement of Revenues and Certain Expenses for the nine months ended September 30, 1998 includes the operations only for those periods for which the properties were not owned by the Operating Partnership and reflects, in the opinion of management, all adjustments necessary for a fair presentation of the interim statement. All such adjustments are of a normal and recurring nature. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Statements exclude certain expenses such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of the 1998 Acquisition II Properties that may not be comparable to the expenses expected to be incurred in their proposed future operations. Management is not aware of any material factors relating to these properties which would cause the reported financial information not to be necessarily indicative of future operating results. In order to conform with generally accepted accounting principles, management, in preparation of the Statements, is required to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting period. Actual results could differ from these estimates. Revenue and Expense Recognition The Statements have been prepared on the accrual basis of accounting. Rental income is recorded when due from tenants based upon lease terms. The effects of scheduled rent increases and rental concessions, if any, are recognized on a straight-line basis over the term of the tenant's lease. 9 11 1998 ACQUISITION II PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 3. FUTURE RENTAL REVENUES The 1998 Acquisition II Properties are leased to tenants under net, semi-net and gross operating leases. Minimum lease payments receivable, excluding tenant reimbursement of expenses, under noncancelable operating leases in effect as of December 31, 1997 are approximately as follows:
1998 Acquisition II Properties ----------------- 1998 $ 4,763 1999 4,167 2000 3,162 2001 2,491 2002 1,884 Thereafter 5,128 ----------------- Total $ 21,595 =================
10 12 FIRST INDUSTRIAL, L.P. PRO FORMA BALANCE SHEET AS OF SEPTEMBER 30, 1998 (DOLLARS IN THOUSANDS)
First 1998 1998 Industrial, Acquisition Acquisition L.P. B(1) II(1) Inc. Properties Properties (Historical) (Historical) (Historical) Note 2 (a) Note 2 (b) Note 2 (c) --------------- -------------- ------------- ASSETS Assets: Investment in Real Estate: Land................................$ 330,611 $ 641 $ 1,586 Buildings and Improvements.......... 1,831,145 3,634 8,986 Furniture, Fixtures and Equipment... 1,358 --- --- Construction in Progress............ 6,054 --- --- Less: Accumulated Depreciation...... (133,258) --- --- --------------- -------------- ------------- Net Investment in Real Estate..... 2,035,910 4,275 10,572 Investment in Other Real Estate Partnerships..... 342,789 --- --- Investment in Joint Venture........... --- --- --- Cash and Cash Equivalents............. 2,602 (3,894) (7,698) Restricted Cash....................... 2,138 --- --- Tenant Accounts Receivable, Net....... 9,254 --- --- Deferred Rent Receivable.............. 9,680 --- --- Deferred Financing Costs, Net........ 10,514 --- --- Prepaid Expenses and Other Assets, . Net.................................. 62,751 --- --- ------------- ------------ ------------- Total Assets......................$ 2,475,638 $ 381 $ 2,874 ============= ============ ============= LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage Loans Payable................$ 65,125 $ --- $ 1,348 Senior Unsecured Debt, Net............ 948,572 --- --- Acquisition Facilities Payable........ 128,800 --- --- Accounts Payable and Accrued Expenses. 64,409 --- --- Rents Received in Advance and Security Deposits............................. 17,760 --- --- Distributions Payable................. 23,735 --- --- ------------- ------------ ------------- Total Liabilities................. 1,248,401 --- 1,348 ============= ============ ============= Commitments and Contingencies........... --- --- --- Partners' Capital: General Partner Preferred Units....... 336,990 --- --- General Partner Units................. 702,728 --- --- Limited Partner Units................. 187,519 381 1,526 ------------- ------------ ------------- Total Partners' Capital........... 1,227,237 381 1,526 ============= ============ ============= Total Liabilities and Partners' Capital........ $ 2,475,638 $ 381 $ 2,874 ============= ============ ============= September 1998 Joint Venture Sale First Properties Pro Forma Industrial, (Historical) Adjustments L.P. Note 2 (d) Note 2 (e) Pro Forma ------------ ------------ -------------- ASSETS Assets: Investment in Real Estate: Land................................ $ (5,085) $ --- $ 327,753 Buildings and Improvements.......... (28,812) --- 1,814,953 Furniture, Fixtures and Equipment... --- --- 1,358 Construction in Progress............ --- --- 6,054 Less: Accumulated Depreciation...... --- --- (133,258) ------------ ------------ ------------- Net Investment in Real Estate..... (33,897) --- 2,016,860 Investment in Other Real Estate Partnerships..... --- --- 342,789 Investment in Joint Venture........... --- 3,420 3,420 Cash and Cash Equivalents............. 33,897 (24,907) --- Restricted Cash....................... --- --- 2,138 Tenant Accounts Receivable, Net....... --- --- 9,254 Deferred Rent Receivable.............. --- --- 9,680 Deferred Financing Costs, Net........ --- --- 10,514 Prepaid Expenses and Other Assets, . Net.................................. --- --- 62,751 ------------ ------------ ------------- Total Assets...................... $ --- $ (21,487) $ 2,457,406 ============ ============ ============= LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage Loans Payable................ $ --- $ --- $ 66,473 Senior Unsecured Debt, Net............ --- --- 948,572 Acquisition Facilities Payable........ --- (21,487) 107,313 Accounts Payable and Accrued Expenses. --- --- 64,409 Rents Received in Advance and Security Deposits............................. --- --- 17,760 Distributions Payable................. --- --- 23,735 ------------ ------------ ------------- Total Liabilities................. --- (21,487) 1,228,262 ------------ ------------ ------------- Commitments and Contingencies........... --- --- --- Partners' Capital: General Partner Preferred Units....... --- --- 336,990 General Partner Units................. --- --- 702,728 Limited Partner Units................. --- --- 189,426 ------------ ------------ ------------- Total Partners' Capital........... --- --- 1,229,144 ------------ ------------ ------------- Total Liabilities and Partners' Capital........ $ --- $ (21,487) $ 2,457,406 ============ ============ ============= The accompanying notes are an integral part of the pro forma financial statement.
11 13 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (DOLLARS IN THOUSANDS, EXCEPT UNIT AND PER UNIT DATA)
1998 1998 1998 First Acquisition Acquisition Acquisition Industrial, A I B L.P. Properties Properties Properties (Historical) (Historical) (Historical) (Historical) Subtotal Note 3 (a) Note 3 (b) Note 3 (c) Notes 3 (d) Carry forward --------------- -------------- ------------- ------------ -------------- REVENUES: Rental Income................................ $ 173,540 $ 990 $ 6,619 $ 1,556 $ 182,705 Tenant Recoveries and Other Income........... 39,956 478 1,164 401 41,999 --------------- -------------- ------------- ------------ -------------- Total Revenues......................... 213,496 1,468 7,783 1,957 224,704 --------------- -------------- ------------- ------------ -------------- EXPENSES: Real Estate Taxes............................ 35,320 478 1,077 311 37,186 Repairs and Maintenance...................... 9,991 18 606 89 10,704 Property Management.......................... 8,543 13 272 64 8,892 Utilities.................................... 5,758 3 134 15 5,910 Insurance.................................... 596 12 58 15 681 Other........................................ 2,965 1 68 13 3,047 General and Administrative................... 9,830 --- --- --- 9,830 Interest..................................... 49,401 --- --- --- 49,401 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs..... 610 --- --- --- 610 Depreciation and Other Amortization.......... 39,804 --- --- --- 39,804 --------------- -------------- ------------- ------------ -------------- Total Expenses........................ 162,818 525 2,215 507 166,065 --------------- -------------- ------------- ------------ -------------- Income from Operations Before Equity in Income of Other Real Estate Partnerships and Loss in Equity of Joint Venture......... 50,678 943 5,568 1,450 58,639 Equity in Income of Other Real Estate Partnerships................................ 21,489 --- --- --- 21,489 Loss in Equity of Joint Venture.............. --- --- --- --- --- --------------- -------------- ------------- ------------ -------------- Income from Operations....................... 72,167 943 5,568 1,450 80,128 Gain on Sales of Properties, Net............. 692 --- --- --- 692 --------------- -------------- ------------- ------------ -------------- Income Before Cumulative Effect of Change in Accounting Principle..................... 72,859 943 5,568 1,450 80,820 Less: Preferred Unit Distributions........... (19,458) --- --- --- (19,458) --------------- -------------- ------------- ------------ -------------- Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders................................. $ 53,401 $ 943 $ 5,568 $ 1,450 $ 61,362 =============== ============== ============= ============ ============== Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders Per Weighted Average Unit Outstanding: Basic (43,749,712 for September 30, 1998)... $ 1.22 ================ Diluted (43,984,978 for September 30, 1998) $ 1.21 ================ Pro Forma Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders Per Weighted Average Unit Outstanding: Basic (45,076,236 for September 30, 1998, pro forma).................................. Diluted (45,311,502 for September 30, 1998, pro forma).................................. The accompanying notes are an integral part of the pro forma financial statement.
12 14 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (DOLLARS IN THOUSANDS, EXCEPT UNIT AND PER UNIT DATA)
1998 September Acquisition 1998 Joint II Venture Sale First Subtotal Properties Properties Pro Forma Industrial, Carry (Historical) (Historical) Adjustments L.P. Forward Note 3 (e) Note 3 (f) Note 3 (g) Pro Forma --------------- ---------------- -------------- ------------- -------------- REVENUES: Rental Income............................ $ 182,705 $ 3,524 $ (1,282) $ --- $ 184,947 Tenant Recoveries and Other Income....... 41,999 305 (190) --- 42,114 --------------- -------------- -------------- ------------- -------------- Total Revenues..................... 224,704 3,829 (1,472) --- 227,061 --------------- -------------- -------------- ------------- -------------- EXPENSES: Real Estate Taxes........................ 37,186 420 (185) --- 37,421 Repairs and Maintenance.................. 10,704 107 (35) --- 10,776 Property Management...................... 8,892 67 (45) --- 8,914 Utilities................................ 5,910 44 (19) --- 5,935 Insurance................................ 681 42 (3) --- 720 Other.................................... 3,047 23 --- --- 3,070 General and Administrative............... 9,830 --- --- --- 9,830 Interest................................. 49,401 --- --- 6,279 55,680 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs. 610 --- --- --- 610 Depreciation and Other Amortization...... 39,804 --- --- 2,488 42,292 --------------- -------------- -------------- ------------- -------------- Total Expenses.................... 166,065 703 (287) 8,767 175,248 --------------- -------------- -------------- ------------- -------------- Income from Operations Before Equity in Income of Other Real Estate Partnerships and Loss in Equity of Joint Venture..... 58,639 3,126 (1,185) (8,767) 51,813 Equity in Income of Other Real Estate Partnerships............................ 21,489 --- --- 976 22,465 Loss in Equity of Joint Venture.......... --- --- --- (24) (24) --------------- -------------- -------------- ------------- -------------- Income from Operations................... 80,128 3,126 (1,185) (7,815) 74,254 Gain on Sales of Properties, Net......... 692 --- --- --- 692 --------------- -------------- -------------- ------------- ---------------- Income Before Cumulative Effect of Change in Accounting Principle................. 80,820 3,126 (1,185) (7,815) 74,946 Less: Preferred Unit Distributions....... (19,458) --- --- (2,238) (21,696) =============== ============== ============== ============= ================ Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders............................. $ 61,362 $ 3,126 $ (1,185) $ (10,053) $ 53,250 =============== ============== ============== ============= ================ Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders Per Weighted Average Unit Outstanding: Basic (43,749,712 for September 30, 1998)... Diluted (43,984,978 for September 30, 1998) Pro Forma Income Before Cumulative Effect of Change in Accounting Principle Available to Unitholders Per Weighted Average Unit Outstanding: Basic (45,076,236 for September 30, 1998, pro forma).................................. $ 1.18 ================ Diluted (45,311,502 for September 30, 1998, $ 1.18 pro forma).................................. ================ The accompanying notes are an integral part of the pro forma financial statement.
13 15 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION. First Industrial, L.P. (the "Operating Partnership") was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner of the Operating Partnership is First Industrial Realty Trust, Inc. (the "Company") with an approximate 83.8% ownership interest at September 30, 1998. Since the filing of the Operating Partnership's Form 8-K dated April 6, 1998, as amended by the report on Form 8-K/A No. 1 filed on June 16, 1998, the Operating Partnership acquired 69 industrial properties from unrelated parties and one industrial property from a related party during the period April 17, 1998 through November 6, 1998 and partnerships in which the Operating Partnership owns a 99% limited partnership interest (the "Other Real Estate Parternships") purchased three industrial properties from unrelated parties and one industrial property from a related party during the period April 17, 1998 through November 6, 1998. The combined purchase price of the 70 industrial properties acquired by the Operating Partnership totaled approximately $102.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The combined purchase price of the four industrial properties acquired by the Other Real Estate Partnerships totaled approximately $7.2 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 70 industrial properties acquired by the Operating Partnership and the four industrial properties acquired by the Other Real Estate Partnerships were funded with either or a combination of working capital, the issuance of limited partnership units in the Operating Partnership (the "Units"), preferred capital contributions from the general partner, the assumption of secured debt, borrowings under the Operating Partnership's $300 million unsecured revolving credit facility (the "1997 Unsecured Acquisition Facility") and the issuance of other unsecured debt. The Operating Partnership and the Other Real Estate Partnerships will operate the facilities as industrial rental property. On September 28, 1998, the Operating Partnership, through a limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the "September 1998 Joint Venture") with an institutional investor to invest in industrial properties. Two limited liability companies in which the Operating Partnership is the sole member, will own a 10% equity interest in the September 1998 Joint Venture and will provide property and asset management services to the September 1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial properties from unrelated parties and seven industrial properties (the "September 1998 Joint Venture Sale Properties") from the Operating Partnership during the period October 9, 1998 through November 6, 1998. The combined purchase price of the 111 industrial properties acquired totaled approximately $171.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 111 industrial properties acquired by the September 1998 Joint Venture were funded with cash capital contributions made by the partners of the September 1998 Joint Venture and the assumption and issuance of secured debt. The September 1998 Joint Venture will operate these facilities as industrial rental property. The accompanying unaudited pro forma balance sheet and unaudited pro forma statement of operations for the Operating Partnership reflect the historical financial position of the Operating Partnership as of September 30, 1998, the historical operations of the Operating Partnership for the period January 1, 1998 through September 30, 1998, adjusted by the acquisition of 30 properties (the "1998 Acquisition A Properties") and 111 properties (the "1998 Acquisition I Properties") during the period January 1, 1998 through April 16, 1998 which are reported on Form 8-K/A No. 1 dated April 6, 1998, the acquisition of 18 properties (the "1998 Acquisition B Properties") and 48 properties (the "1998 Acquisition II Properties") acquired and the sale of the September 1998 Joint Venture Sale Properties during the period April 17, 1998 through November 6, 1998 reported on this Form 8-K/A No. 1 dated November 6, 1998 and the Operating Partnership's 99% equity interest in the operations of 24 industrial properties purchased by the other Real Estate Partnerships during the period January 1, 1998 through November 6, 1998 and the Operating Partnership's 10% equity interest in the September 1998 Joint Venture. The accompanying unaudited pro forma balance sheet as of September 30, 1998 has been prepared as if the properties acquired and sold subsequent to September 30, 1998 had been acquired or sold, respectively, on September 30, 1998, the Operating Partnership's 10% equity interest in the September 1998 Joint Venture acquired after September 30, 1998 had been acquired on September 30, 1998 and the assumption of $1.3 million of secured debt had occurred on September 30, 1998. 14 16 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS The accompanying unaudited pro forma statement of operations for the nine months ended September 30, 1998 has been prepared as if the properties acquired subsequent to December 31, 1997 had been acquired on either January 1, 1997 or the lease commencement date if the property was developed, the sale of the September 1998 Joint Venture Sale Properties had been sold on January 1, 1997 and as if the Operating Partnership's 10% equity interest in the September 1998 Joint Venture and the Operating Partnership's 99% equity interest in the operations of 24 industrial properties purchased by the Other Real Estate Partnerships during the period January 1, 1998 through November 6, 1998 had been acquired on January 1, 1997. In addition, the unaudited pro forma statement of operations is prepared as if the assumption of $8.7 million of secured debt, the issuance on March 31, 1998 of $100 million of unsecured debt bearing interest at 6.5% which matures on April 5, 2011 (the "2011 Drs."), the issuance on July 14, 1998 of $200 million of unsecured debt bearing interest at 7.60% which matures on July 15, 2028 (the "2028 Notes"), the issuance on February 4, 1998 of the 7.95% Series D Preferred Units (the "Series D Preferred Capital Contribution") and the issuance on March 18, 1998 of the 7.90% Series E Preferred Units (the "Series E Preferred Capital Contribution") and the issuance on April 23, 1998 of 1,112,644 general partnership units in the Operating Partnership (the "April 1998 Capital Contribution") had been completed on January 1, 1997. The unaudited pro forma balance sheet is not necessarily indicative of what the Operating Partnership's financial position would have been as of September 30, 1998 had the transactions been consummated as described above, nor does it purport to present the future financial position of the Operating Partnership. The unaudited pro forma statement of operations is not necessarily indicative of what the Operating Partnership's results of operations would have been for the nine months ended September 30, 1998 had the transactions been consummated as described above, nor does it purport to present the future results of operations of the Operating Partnership. 2. BALANCE SHEET PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - SEPTEMBER 30, 1998 (a) The historical balance sheet reflects the financial position of the Operating Partnership as of September 30, 1998 as reported in the Operating Partnership's Form 10-Q for the quarter ended September 30, 1998. (b) Represents the 1998 Acquisition B Properties and a property that was owner occupied prior to the date of purchase that were acquired subsequent to September 30, 1998 (the "1998 Acquisition B(1) Properties") as if the acquisitions had occurred on September 30, 1998. The 1998 Acquisition B(1) Properties were acquired for approximately $4.3 million in the aggregate which was funded with $3.8 million in cash and the issuance of 15,354 Units valued at $.5 million. (c) Represents the 1998 Acquisition II Properties that were acquired subsequent to September 30, 1998 (the "1998 Acquisition II(1) Properties") as if the acquisitions had occurred on September 30, 1998. The 1998 Acquisition II(1) Properties were acquired for approximately $10.5 million in the aggregate which was funded with $7.7 million in cash, the assumption of $1.3 million of secured debt and the issuance of 60,000 Units valued at $1.5 million. (d) Represents the September 1998 Joint Venture Sale Properties sold by the Operating Partnership to the September 1998 Joint Venture subsequent to September 30, 1998 as if the sales had occurred on September 30, 1998. The sale of the September 1998 Joint Venture Sale Properties resulted in sales proceeds of approximately $33.9 million, approximately the Operating Partnership's book value of such assets. (e) Represents the adjustments needed to present the pro forma balance sheet as of September 30, 1998 as if borrowings and repayments subsequent to September 30, 1998 under the 1997 Unsecured Acquisition Facility, due to the acquisitions and sales disclosed above, had occurred on September 30, 1998 and as if the Operating Partnership's 10% equity interest in the September 1998 Joint Venture of approximately $3.4 million had been acquired on September 30, 1998. 15 17 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS 3. STATEMENT OF OPERATIONS PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - SEPTEMBER 30, 1998 (a) The historical operations reflect the operations of the Operating Partnership for the period January 1, 1998 through September 30, 1998 as reported in the Operating Partnership's Form 10-Q for the quarter ended September 30, 1998. (b) The historical operations reflect the operations of the 1998 Acquisition A Properties for the period January 1, 1998 through their respective acquisition dates. (c) The historical operations reflect the operations of the 1998 Acquisition I Properties for the period January 1, 1998 through their respective acquisition dates. (d) The historical operations reflect the operations of the 1998 Acquisition B Properties for the period January 1, 1998 through the earlier of September 30, 1998 or their respective acquisition dates. (e) The historical operations reflect the operations of the 1998 Acquisition II Properties for the period January 1, 1998 through the earlier of September 30, 1998 or their respective acquisition dates. (f) The historical operations reflect the operations of five of the September 1998 Joint Venture Sale Properties for the period May 22, 1998 through September 30, 1998, one of the September 1998 Joint Venture Sale Properties for the period June 11, 1998 through September 30, 1998 and one of the September 1998 Joint Venture Sale Properties for the period July 25, 1998 through September 30, 1998. (g) In conjunction with the acquisition of the 1998 Acquisition I Properties, the Operating Partnership assumed a $2.5 million mortgage loan (the "Acquisition Mortgage Loan IV"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan IV for the pro forma period as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1998 Acquisition B Properties, the Operating Partnership assumed a $2.6 million mortgage loan (the "Acquisition Mortgage Loan V"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan V for the pro forma period as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1998 Acquisition II Properties, the Operating Partnership assumed a $1.0 million mortgage loan (the "Acquisition Mortgage Loan VI"), a $1.3 million mortgage loan (the "Acquisition Mortgage Loan VII") and a $1.3 million mortgage loan (the "Acquisition Mortgage Loan VIII"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII and the Acquisition Mortgage Loan VIII for the pro forma period as if such indebtedness was outstanding beginning January 1, 1997. The interest expense adjustment reflects an increase in the acquisition facility borrowings at the 30-day London Interbank Offered Rate ("LIBOR") plus .8% for borrowings under the 1997 Unsecured Acquisition Facility for the assumed earlier purchase of the 1998 Acquisition A Properties, the 1998 Acquisition I Properties, the 1998 Acquisition B Properties and the 1998 Acquisition II Properties offset by the interest savings related to the assumed repayment of $560.2 million of acquisition facility borrowings on January 1, 1997 from the proceeds of the issuance of the 2011 Drs., the 2028 Notes, the Series D Preferred Capital Contribution and Series E Preferred Capital Contribution, the April 1998 Capital Contribution and the proceeds from the sale of the September 1998 Joint Venture Sale Properties as if such properties were sold on January 1, 1997 and also reflects an increase in interest expense due to the issuance of the 2011 Drs. and the 2028 Notes as if such unsecured debt was outstanding as of January 1, 1997. 16 18 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Dollars in thousands) Interest expense related to the Acquisition Mortgage Loan IV, the Acquisition Mortgage Loan V, the Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII and the Acquisition Mortgage Loan VIII as if such indebtedness was outstanding as of January 1, 1997........................................................... $ 422 Interest expense related to the assumed earlier borrowings under the 1997 Unsecured Acquisition Facility............................... 11,360 Interest expense related to the issuance of the 2011 Drs. and the 2028 Notes as if such debt was outstanding as of January 1, 1997.. 9,723 Interest savings due to the assumed repayment of $560.2 million of acquisition facility borrowings on January 1, 1997 from the proceeds of the issuance of the 2011 Drs., the 2028 Notes, the Series D Preferred Capital Contribution, the Series E Preferred Capital Contribution, the April 1998 Capital Contribution and the proceeds from the sale of the 1998 Joint Venture Sale Properties ....................................................... (15,226) --------- Net Pro Forma Interest Adjustment............................. $ 6,279 =========
The depreciation and amortization adjustments reflect the charges for the 1998 Acquisition A Properties, the 1998 Acquisition I Properties, the 1998 Acquisition B Properties and the 1998 Acquisition II Properties from January 1, 1998 through the earlier of their respective acquisition date or September 30, 1998 as if such properties were acquired on January 1, 1997. The equity in income of the other real estate partnerships adjustment reflects the Operating Partnership's 99% limited partnership equity interest in the operations of 16 properties acquired by First Industrial Indianapolis, L.P., five properties acquired by First Industrial Financing Partnership, L.P., two properties acquired by First Industrial Pennsylvania Partnership, L.P. and one property acquired by TK-SV, Ltd. during the period January 1, 1998 through November 6, 1998 as if such acquisitions had occurred on January 1, 1997. The pro forma loss in equity of joint venture adjustment (presented below) reflects the Operating Partnership's 10% equity interest in the operations of 111 properties acquired by the September 1998 Joint Venture during the period October 9, 1998 through November 6, 1998 as if such acquisitions and their respective operations had commenced on January 1, 1997.
September 1998 Joint Venture (Dollars in thousands) --------------------- Total Revenues........................ $ 14,203 Total Expenses........................ (14,447) --------------------- Net Loss.............................. $ (244) ===================== Pro Forma Loss in Equity of Joint Venture.................... $ (24) =====================
The preferred unit distribution adjustment reflects preferred distributions attributable to the units issued in conjunction with the Series D Preferred Capital Contribution and the Series E Preferred Capital Contribution as if such units were outstanding as of January 1, 1997. 17 19 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT UNIT AND PER UNIT DATA)
1997 1997 1998 1998 First Acquisition Acquisition Acquisition Acquisition Industrial, A I A I L.P. Properties Properties Properties Properties Subtotal (Historical) (Historical) (Historical) (Historical) (Historical) Carry Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e) forward ------------- ------------ ------------ ------------ ------------ ------------- REVENUES: Rental Income............................ $ 77,204 $ 7,319 $ 51,228 $ 5,885 $ 22,095 $ 163,731 Tenant Recoveries and Other Income....... 21,362 1,969 9,093 2,536 3,602 38,562 ------------- ------------ ------------ ------------ ------------ ------------- Total Revenues..................... 98,566 9,288 60,321 8,421 25,697 202,293 ------------- ------------ ------------ ------------ ------------ ------------- EXPENSES: Real Estate Taxes........................ 16,970 2,072 7,746 2,562 3,598 32,948 Repairs and Maintenance.................. 3,772 352 4,958 227 2,050 11,359 Property Management...................... 3,789 265 2,149 150 696 7,049 Utilities................................ 2,723 103 1,777 92 420 5,115 Insurance................................ 249 87 615 50 216 1,217 Other.................................... 1,680 4 243 14 97 2,038 General and Administrative............... 5,820 --- --- --- --- 5,820 Interest................................. 25,099 --- --- --- --- 25,099 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs. 369 --- --- --- --- 369 Depreciation and Other Amortization...... 15,873 --- --- --- --- 15,873 ------------- ------------ ------------ ------------ ------------ ------------- Total Expenses.................... 76,344 2,883 17,488 3,095 7,077 106,887 ------------- ------------ ------------ ------------ ------------ ------------- Income from Operations Before Equity in Income of Other Real Estate Partnerships, Loss in Equity of Joint Venture and Disposition of Interest Rate Protection Agreement............................... 22,222 6,405 42,833 5,326 18,620 95,406 Equity in Income of Other Real Estate Partnerships............................ 31,297 --- --- --- --- 31,297 Loss in Equity of Joint Venture.......... --- --- --- --- --- --- Disposition of Interest Rate Protection Agreement............................... 4,038 --- --- --- --- 4,038 ------------ ------------ ------------ ------------ ------------- ------------ Income from Operations................... 57,557 6,405 42,833 5,326 18,620 130,741 Gain on Sales of Properties, Net......... 728 --- --- --- --- 728 ------------ ------------ ------------ ------------ ------------ ------------- Income Before Extraordinary Loss......... 58,285 6,405 42,833 5,326 18,620 131,469 Less: Preferred Unit Distributions....... (7,936) --- --- --- --- (7,936) ------------ ------------ ------------ ------------ ------------ ------------- Income Before Extraordinary Loss Available to Unitholders................ $ 50,349 $ 6,405 $ 42,833 $ 5,326 $ 18,620 $ 123,533 ============ ============ ============ ============ ============ ============= Income Before Extraordinary Loss Available to Unitholders Per Weighted Average Unit Outstanding: Basic (35,681,562 for December 31, 1997......................... $ 1.41 ============ Diluted (35,987,248 for December 31, 1997......................... $ 1.40 ============ Pro Forma Income Before Extraordinary Loss Available to Unitholders Per Weighted Average Unit Outstanding: Basic (44,781,196 for December 31, 1997, pro forma).................. Diluted (45,016,462 for December 31, 1997, pro forma)................... The accompanying notes are an integral part of the pro forma financial statement.
18 20 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (DOLLARS IN THOUSANDS, EXCEPT UNIT AND PER UNIT DATA)
1998 1998 Acquisition Acquisition B II First Subtotal Properties Properties Pro Forma Industrial, Carry (Historical) (Historical) Adjustments L.P. forward Note 2(f) Note 2(g) Note 2(h) Pro Forma ------------ ------------ ------------ ------------- ------------ REVENUES: Rental Income......................$ 163,731 $ 2,677 $ 5,782 $ --- $ 172,190 Tenant Recoveries and Other Income............................ 38,562 786 606 --- 39,954 ------------ ------------ ------------ ------------ ----------- Total Revenues.................. 202,293 3,463 6,388 --- 212,144 ------------ ------------ ------------ ------------ ----------- EXPENSES: Real Estate Taxes.................. 32,948 567 682 --- 34,197 Repairs and Maintenance............ 11,359 152 189 --- 11,700 Property Management................ 7,049 116 83 --- 7,248 Utilities.......................... 5,115 23 89 --- 5,227 Insurance.......................... 1,217 37 51 --- 1,305 Other.............................. 2,038 22 30 --- 2,090 General and Administrative......... 5,820 --- --- --- 5,820 Interest........................... 25,099 --- --- 24,945 50,044 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.......... 369 --- --- --- 369 Depreciation and Other Amortization...................... 15,873 --- --- 19,536 35,409 ------------ ------------ ------------ ------------ ----------- Total Expenses.................. 106,887 917 1,124 44,481 153,409 ------------ ------------ ------------ ------------ ----------- Income from Operations Before Equity in Income of Other Real Estate Partnerships, Loss in Equity of Joint Venture and Disposition of Interest Rate Protection Agreement.............. 95,406 2,546 5,264 (44,481) 58,735 Equity in Income of Other Real Estate Partnerships............... 31,297 --- --- 3,781 35,078 Loss in Equity of Joint Venture.... --- --- --- (131) (131) Disposition of Interest Rate Protection Agreement.............. 4,038 --- --- --- 4,038 ------------ ------------ ------------- ------------ ----------- Income from Operations............. 130,741 2,546 5,264 (40,831) 97,720 Gain on Sales of Properties, Net... 728 --- --- --- 728 ------------ ------------ ------------ ------------ ----------- Income Before Extraordinary Loss... 131,469 2,546 5,264 (40,831) 98,448 Less: Preferred Unit Distributions (7,936) --- --- (20,992) (28,928) ------------ ------------ ------------ ------------ ----------- Income Before Extraordinary Loss Available to Unitholders..........$ 123,533 $ 2,546 $ 5,264 $ (61,823) $ 69,520 ============ ============ ============ ============ =========== Income Before Extraordinary Loss Available to Unitholders Per Weighted Average Unit Outstanding: Basic (35,681,562 for December 31, 1997)......................... Diluted (35,987,248 for December 31, 1997)............................. Pro Forma Income Before Extraordinary Loss Available to Unitholders Per Weighted Average Unit Outstanding: Basic (44,781,196 for December 31, 1997, pro forma).................. $ 1.55 =========== Diluted (45,016,462 for December 31, 1997, pro forma).................. $ 1.54 ===========
The accompanying notes are an integral part of the pro forma financial statement. 19 21 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION. First Industrial, L.P. (the "Operating Partnership") was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner of the Operating Partnership is First Industrial Realty Trust, Inc. (the "Company") with an approximate 83.3% ownership interest at December 31, 1997. Since the filing of the Operating Partnership's Form 8-K dated April 6, 1998, as amended by the report on Form 8-K/A No.1 filed on June 16, 1998, the Operating Partnership acquired 69 industrial properties from unrelated parties and one industrial property from a related party during the period April 17, 1998 through November 6, 1998 and partnerships in which the Operating Partnership owns a 99% limited partnership interest (the "Other Real Estate Parternships") purchased three industrial properties from unrelated parties and one property from a related party during the period April 17, 1998 through November 6, 1998. The combined purchase price of the 70 industrial properties acquired by the Operating Partnership totaled approximately $102.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The combined purchase price of the four industrial properties acquired by the Other Real Estate Partnerships totaled approximately $7.2 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 70 industrial properties acquired by the Operating Partnership and the four industrial properties acquired by the Other Real Estate Partnerships were funded with either or a combination of working capital, the issuance of limited partnership units in the Operating Partnership (the "Units"), preferred capital contributions from the general partner, the assumption of secured debt, borrowings under the Operating Partnership's $300 million unsecured revolving credit facility (the "1997 Unsecured Acquisition Facility") and the issuance of other unsecured debt. The Operating Partnership and the Other Real Estate Partnerships will operate the facilities as industrial rental property. On September 28, 1998, the Operating Partnership, through a limited liability company in which the Operating Partnership is the sole member, entered into a joint venture arrangement (the "September 1998 Joint Venture") with an institutional investor to invest in industrial properties. Two limited liability companies in which the Operating Partnership is the sole member, will own a 10% equity interest in the September 1998 Joint Venture and will provide property and asset management services to the September 1998 Joint Venture. The September 1998 Joint Venture acquired 104 industrial properties from unrelated parties and seven industrial properties (the "September 1998 Joint Venture Sale Properties") from the Operating Partnership during the period October 9, 1998 through November 6, 1998. The combined purchase price of the 111 industrial properties acquired totaled approximately $171.0 million, excluding closing costs incurred in conjunction with the acquisition of the industrial properties. The 111 industrial properties acquired by the September 1998 Joint Venture were funded with cash capital contributions made by the partners of the September 1998 Joint Venture and the assumption and issuance of secured debt. The September 1998 Joint Venture will operate these facilities as industrial rental property. The accompanying unaudited pro forma statement of operations for the Operating Partnership reflects the historical operations of the Operating Partnership for the period January 1, 1997 through December 31, 1997 adjusted by the acquisition of one property on January 9, 1997 (the "1997 Acquisition Property") which is included in Amendment No. 3 to Form S-3 dated April 30, 1997, the acquisition of nine properties during the period February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition Properties") reported on Form 8-K/A No. 2 dated June 30, 1997, the acquisition of 23 properties during the period July 15, 1997 through October 31, 1997 (the "1997 Acquisition II Properties") reported on Form 8-K dated October 30, 1997, the acquisition of four properties during the period November 1, 1997 through December 31, 1997 (the "1997 Acquisition IV Properties") reported on Form 8-K/A No. 2 dated December 11, 1997 (collectively, the "1997 Acquisition A Properties"), the acquisition of 39 properties on January 31, 1997 (the "Lazarus Burman Properties") which are included in Amendment No. 3 to Form S-3 dated April 30, 1997, the acquisition of 15 properties (the "Punia Phase I Properties") on June 30, 1997 and 33 properties through December 5, 1997 (the "Punia Phase II Properties" and, together with the Punia Phase I Properties, the "Punia Acquisition Properties") which are reported on Form 8-K/A No.1 dated June 30, 1997, the acquisition of two properties during the period February 1, 1997 through July 14, 1997 (the "1997 Acquisition I Properties") reported on Form 8-K/A No. 2 dated June 30, 1997, the acquisition of 93 properties on October 30, 1997, two properties on December 4, 1997 and 10 properties on January 30, 1998 (together, the "Pacifica Acquisition Properties"), the acquisition of 64 properties on December 9, 1997 (the "Sealy Acquisition Properties") and seven properties on October 17, 1997 (the "1997 Acquisition 20 22 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS III Properties") which are reported on Form 8-K dated October 30, 1997, the acquisition of 28 properties and one property scheduled to be acquired by March 31, 1998 which closed on July 16, 1998 (the "1997 Acquisition V Properties"), 36 properties (the "1997 Acquisition VI Properties") and eight properties (the "1997 Acquisition VII Properties") during the period November 1, 1997 through December 31, 1997 which are reported on Form 8-K/A No. 1 dated December 11, 1997, the acquisition of three properties during the period November 1, 1997 through December 31, 1997 (the "1997 Acquisition VIII Properties") reported on Form 8-K/A No. 2 dated December 11, 1997 (collectively, the "1997 Acquisition I Properties"), the acquisition of 30 properties (the "1998 Acquisition A Properties") and 111 properties (the "1998 Acquisition I Properties") during the period January 1, 1998 through April 16, 1998 reported on Form 8-K/A No.1 dated April 6, 1998 and the acquisition of 20 properties (the "1998 Acquisition B Properties") and 48 properties (the "1998 Acquisition II Properties") during the period April 17, 1998 through November 6, 1998 reported on this Form 8-K/A No. 1 dated November 6, 1998 and the Operating Partnership's 99% equity interest in the operations of 28 industrial properties purchased by the Other Real Estate Partnerships during the period January 1, 1997 through November 6, 1998 and the Operating Partnership's 10% equity interest in the September 1998 Joint Venture. The accompanying unaudited pro forma statement of operations for the year ended December 31, 1997 has been prepared as if the properties acquired subsequent to December 31, 1996 had been acquired on either January 1, 1997 or the lease commencement date if the property was developed and as if the Operating Partnership's 10% equity interest in the September 1998 Joint Venture and the Operating Partnership's 99% equity interest in the operations of 28 industrial properties purchased by the Other Real Estate Partnerships during the period January 1, 1997 through November 6, 1998 had been acquired on January 1, 1997. In addition, the unaudited pro forma statement of operations is prepared as if the assumption of $29.0 million of secured debt, the issuance on May 13, 1997 of $150.0 million of unsecured debt bearing interest at 7.60% which matures on May 15, 2007 (the "2007 Notes"), the issuance on May 13, 1997 of $100.0 million of unsecured debt bearing interest at 7.15% which matures on May 15, 2027 (the "2027 Notes"), the issuance on May 22, 1997 of $100.0 million of unsecured debt bearing interest 7.375% which matures on May 15, 2011 (the "2011 Notes"), the issuance on November 20, 1997 of $50.0 million of unsecured debt bearing interest at 6.90% which matures on November 21, 2005 (the "2005 Notes"), the issuance on December 8, 1997 of $150.0 million of unsecured debt bearing interest at 7.00% which matures December 1, 2006 (the "2006 Notes"), the issuance on December 8, 1997 of $100.0 million of unsecured debt bearing interest at 7.50% which matures on December 1, 2017 (the "2017 Notes"), the issuance on March 31, 1998 of $100 million of unsecured debt bearing interest at 6.50% which matures on April 5, 2011 (the "2011 Drs."), the issuance on July 14, 1998 of $200 million of unsecured debt bearing interest at 7.60% which matures on July 15, 2028 (the "2028 Notes"), the issuance on May 14, 1997 of 8.75% Series B Preferred Units (the "Series B Preferred Capital Contribution"), the issuance on June 6, 1997 of 8.63% Series C Preferred Units (the "Series C Preferred Capital Contribution"), the issuance on February 4, 1998 of 7.95% Series D Preferred Units (the "Series D Preferred Capital Contribution"), the issuance on March 18, 1998 of 7.90% Series E Preferred Units (the "Series E Preferred Capital Contribution"), the issuance on September 16, 1997 of 637,440 general partnership units in the Operating Partnership (the "September 1997 Capital Contribution"), the issuance on October 15, 1997 of 5,400,000 general partnership units in the Operating Partnership (the "October 1997 Capital Contribution") and the issuance on April 23, 1998 of 1,112,644 general partnership units in the Operating Partnership (the "April 1998 Capital Contribution") had been completed on January 1, 1997. The unaudited pro forma statement of operations is not necessarily indicative of what the Operating Partnership's results of operations would have been for the year ended December 31, 1997 had the transactions been consummated as described above, nor does it purport to present the future results of operations of the Operating Partnership. 2. STATEMENT OF OPERATIONS PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - DECEMBER 31, 1997 (a) The historical operations reflect income from continuing operations of the Operating Partnership for the period January 1, 1997 through December 31, 1997 as reported on the Operating Partnership's Form 10-K dated March 31, 1998. (b) The historical operations reflect the operations of the 1997 Acquisition A Properties for the period January 1, 1997 through their respective acquisition dates. 21 23 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS (c) The historical operations reflect the operations of the 1997 Acquisition I Properties for the period January 1, 1997 through their respective acquisition dates. (d) The historical operations reflect the operations of the 1998 Acquisition A Properties for the period January 1, 1997 through December 31, 1997. (e) The historical operations reflect the operations of the 1998 Acquisition I Properties for the period January 1, 1997 through December 31, 1997. (f) The historical operations reflect the operations of the 1998 Acquisition B Properties for the period January 1, 1997 through December 31, 1997. (g) The historical operations reflect the operations of the 1998 Acquisition II Properties for the period January 1, 1997 through December 31, 1997. (h) In conjunction with the acquisition of the 1997 Acquisition I Properties, the Operating Partnership assumed a $3.8 million mortgage loan (the "LB Mortgage Loan I") and a $.7 million mortgage loan (the "LB Mortgage Loan II"). The interest expense adjustment reflects interest on the LB Mortgage Loan I and the LB Mortgage Loan II for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1997 Acquisition A Properties, the Operating Partnership assumed a $4.2 million mortgage loan (the "Acquisition Mortgage Loan I") and a $3.6 million mortgage loan (the "Acquisition Mortgage Loan III"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan I and the Acquisition Mortgage Loan III for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1997 Acquisition I Properties, the Operating Partnership assumed an $8.0 million mortgage loan (the "Acquisition Mortgage Loan II"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan II for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1998 Acquisition I Properties, the Operating Partnership assumed a $2.5 million mortgage loan (the "Acquisition Mortgage Loan IV"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan IV for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1998 Acquisition B Properties, the Operating Partnership assumed a $2.6 million mortgage loan (the "Acquisition Mortgage Loan V"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan V for the pro forma period as if such indebtedness was outstanding beginning January 1, 1997. In conjunction with the acquisition of the 1998 Acquisition II Properties, the Operating Partnership assumed a $1.0 million mortgage loan (the "Acquisition Mortgage Loan VI"), a $1.3 million mortgage loan (the "Acquisition Mortgage Loan VII") and a $1.3 million mortgage loan (the "Acquisition Mortgage Loan VIII"). The interest expense adjustment reflects interest on the Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII, and the Acquisition Mortgage Loan VIII for the pro forma period as if such indebtedness was outstanding beginning January 1, 1997. 22 24 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS The interest expense adjustment reflects an increase in the acquisition facility borrowings at LIBOR plus 1% for borrowings under the Operating Partnership's $200 million unsecured revolving acquisition facility (the "1996 Unsecured Acquisition Facility") or LIBOR plus .8% for borrowings under the Operating Partnership's 1997 Unsecured Acquisition Facility for the assumed purchase of the 1997 Acquisition A Properties, the 1997 Acquisition I Properties, the 1998 Acquisition A Properties, the 1998 Acquisition I Properties, the 1998 Acquisition B Properties and the 1998 Acquisition II Properties offset by the interest savings related to the assumed repayment of $1.5 billion of acquisition facility borrowings on January 1, 1997 from the proceeds of the issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005 Notes, the 2006 Notes, the 2017 Notes, the 2011 Drs., the 2028 Notes, the Series B Preferred Capital Contribution, the Series C Preferred Capital Contribution, the Series D Preferred Capital Contribution, the Series E Preferred Capital Contribution, the September 1997 Capital Contribution, the October 1997 Capital Contribution, the April 1998 Capital Contribution and the proceeds from the sale of the September 1998 Joint Venture Sale Properties as if such properties were sold on January 1, 1997 and also reflects an increase in interest expense due to the issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005 Notes, the 2006 Notes, the 2017 Notes, the 2011 Drs. and the 2028 Notes as if such unsecured debt was outstanding as of January 1, 1997.
(Dollars in thousands) Interest expense related to the LB Mortgage Loan I, the LB Mortgage Loan II, the Acquisition Mortgage Loan I, The Acquisition Mortgage Loan II, the Acquisition Mortgage Loan III, the Acquisition Mortgage Loan IV, the Acquisition Mortgage Loan V, the Acquisition Mortgage Loan VI, the Acquisition Mortgage Loan VII and the Acquisition Mortgage Loan VIII as if such indebtedness was outstanding as of January 1, 1997..................................................... $ 2,002 Interest expense related to the assumed earlier borrowings under the 1996 Unsecured Acquisition Facility and 1997 Unsecured Acquisition Facility............................................................ 56,226 Interest expense related to the issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005 Notes, the 2006 Notes, the 2017 Notes, the 2011 Drs. and the 2028 Notes as if such debt was outstanding as of January 1, 1997................................... 51,257 Interest savings due to the assumed repayment of $1.5 billion of acquisition facility borrowings on January 1, 1997 from the proceeds of the issuance of the 2007 Notes, the 2027 Notes, the 2011 Notes, the 2005 Notes, the 2006 Notes, the 2017 Notes and the 2011 Drs., the 2028 Notes, the Series B Preferred Capital Contribution, the Series C Preferred Capital Contribution, the Series D Capital Contribution, the Series E Preferred Capital Contribution, the September 1997 Capital Contribution, the October 1997 Capital Contribution, the April 1998 Capital Contribution and the proceeds from the sale of the September 1998 Joint Venture Sale Properties... (84,540) --------- Net Pro Forma Interest Adjustment............................. $ 24,945 =========
The depreciation and amortization adjustment reflects the charges for the 1997 Acquisition A Properties, the 1997 Acquisition I Properties, the 1998 Acquisition A Properties, the 1998 Acquisition I Properties, the 1998 Acquisition B Properties and the 1998 Acquisition II Properties from January 1, 1997 through the earlier of their respective acquisition date or December 31, 1997 and if such properties were acquired on January 1, 1997. 23 25 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS The equity in income of other real estate partnerships adjustment reflects the Operating Partnership's 99% limited partnership equity interest in the operations of two properties acquired by First Industrial Pennsylvania Partnership, L.P. and two properties acquired by First Industrial Financing Partnership, L.P. during the period January 1, 1997 through December 31, 1997 and the operations of 16 properties acquired by First Industrial Indianapolis, L.P., five properties acquired by First Industrial Financing Partnership, L.P., two properties acquired by First Industrial Pennsylvania Partnership, L.P. and one property acquired by TK-SV, Ltd. during the period January 1, 1998 through November 6, 1998 as if such acquisitions had occurred on January 1, 1997. The pro forma loss in equity of joint venture adjustment (presented below) reflects the Operating Partnership's 10% equity interest in the operations of 111 properties acquired by the September 1998 Joint Venture during the period October 9, 1998 through November 6, 1998 as if such acquisitions and their respective operations had commenced on January 1, 1997.
September 1998 Joint Venture (Dollars in thousands) -------------- Total Revenues........................ $ 17,965 Total Expenses........................ (19,276) -------------- Net Loss.............................. $ (1,311) ============== Pro Forma Loss in Equity of Joint Venture............................... $ (131) ==============
The preferred unit distribution adjustment reflects preferred distributions attributable to the units issued in conjunction with the Series B Preferred Capital Contribution, the Series C Preferred Capital Contribution, the Series D Preferred Capital Contribution and the Series E Preferred Capital Contribution as if such preferred units were outstanding as of January 1, 1997. 24 26 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1933, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST INDUSTRIAL, L.P. BY: FIRST INDUSTRIAL REALTY TRUST, INC. January 11, 1999 By: /s/ Michael J. Havala ------------------------------------------- Michael J. Havala Chief Financial Officer (Principal Financial and Accounting Officer) 25 27 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 23 Consent of PricewaterhouseCoopers LLP, Independent Accountants 26 EX-23 2 CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the inclusion in this Form 8-K/A No. 1 dated November 6, 1998 and the incorporation by reference into the Registrant's previously filed Registration Statement on Form S-3 (File No. 333-43641) of our report dated December 31, 1998 on our audit of the combined historical statement of revenues and certain expenses of the 1998 Acquisition II Properties for the year ended December 31, 1997. PRICEWATERHOUSECOOPERS LLP Chicago, Illinois January 11, 1999 27 -----END PRIVACY-ENHANCED MESSAGE-----