-----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, FOPuUf7WUssJBYCB3IVTMZ1MxJRImN/WbJSOq+lhdSuMYoCWIkskyqjbX44wBXr7 i8nRnBw1+voxCnSm4m42qQ== 0000950137-01-502236.txt : 20010710 0000950137-01-502236.hdr.sgml : 20010710 ACCESSION NUMBER: 0000950137-01-502236 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010706 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: 10-K/A SEC ACT: SEC FILE NUMBER: 333-21873 FILM NUMBER: 1676131 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 10-K/A 1 c63539a1e10-ka.txt AMENDMENT #1 TO ANNUAL REPORT 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A No. 1 (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 OR ( ) Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ to __________. Commission File Number 333-21873 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) (Zip Code) (312) 344-4300 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . --- --- 2 FIRST INDUSTRIAL, L.P. TABLE OF CONTENTS
PAGE ---- PART I. Item 1. Business...................................................................................... 3 Item 2. The Properties................................................................................ 6 Item 3. Legal Proceedings............................................................................. 29 Item 4. Submission of Matters to a Vote of Security Holders........................................... 29 PART II. Item 5. Market for Registrant's Common Equity and Related Stockholder Matters......................... 30 Item 6. Selected Financial Data....................................................................... 31 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 34 Item 7a. Quantitative and Qualitative Disclosures About Market Risk.................................... 44 Item 8. Financial Statements and Supplementary Data................................................... 44 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures......... 44 PART III. Item 10. Directors and Executive Officers of the Registrant............................................ 44 Item 11. Executive Compensation........................................................................ 44 Item 12. Security Ownership of Certain Beneficial Owners and Management................................ 44 Item 13. Certain Relationships and Related Transactions................................................ 44 PART IV. Item 14. Exhibits, Financial Statements, Financial Statement Schedule and Reports on Form 8-K.......... 45 SIGNATURES..................................................................................................... 49
1 3 This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. First Industrial, L.P. (the "Operating Partnership") intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Operating Partnership, are generally identifiable by use of the words "believe", "expect", "intend", "anticipate", "estimate", "project", or similar expressions. The Operating Partnership's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on the operations and future prospects of the Operating Partnership on a consolidated basis include, but are not limited to, changes in: economic conditions generally and the real estate market specifically, legislative/regulatory changes (including changes to laws governing the taxation of real estate investment trusts), availability of capital, interest rates, competition, supply and demand for industrial properties in the Operating Partnership's current and proposed market areas and general accounting principles, policies and guidelines applicable to real estate investment trusts. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Further information concerning the Operating Partnership and its business, including additional factors that could materially affect the Operating Partnership's financial results, is included herein and in the Operating Partnership's other filings with the Securities and Exchange Commission. 2 4 PART I ITEM 1. BUSINESS THE COMPANY GENERAL 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 is First Industrial Realty Trust, Inc. (the "Company") with an approximate 84.3% ownership interest at December 31, 2000. The Company also owns a preferred general partnership interest in the Operating Partnership ("Preferred Units") with an aggregate liquidation priority of $350.0 million. The Company is a real estate investment trust ("REIT") as defined in the Internal Revenue Code. The Company's operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 15.7% interest in the Operating Partnership at December 31, 2000. The Operating Partnership is the sole member of several limited liability companies (the "L.L.C.s") and the majority economic stockholder of FR Development Services, Inc., and holds at least a 99% limited partnership interest (subject in one case, as described below, to a preferred limited partnership interest) in First Industrial Financing Partnership, L.P. (the "Financing Partnership"), First Industrial Securities, L.P. (the "Securities Partnership"), First Industrial Mortgage Partnership, L.P. (the "Mortgage Partnership"), First Industrial Pennsylvania, L.P. (the "Pennsylvania Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg Partnership"), First Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD., and First Industrial Development Services, L.P. (together, the "Other Real Estate Partnerships"). The Operating Partnership, through separate wholly-owned limited liability companies in which it is the sole member, also owns 10% equity interests in, and provides asset and property management services to, two joint ventures which invest in industrial properties. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The general partner of the Securities Partnership, First Industrial Securities Corporation, also owns a preferred limited partnership interest in the Securities Partnership which entitles it to receive a fixed quarterly distribution, and results in it being allocated income in the same amount, equal to the fixed quarterly dividend the Company pays on its 9.5%, $.01 par value, Series A Cumulative Preferred Stock. As of December 31, 2000, the Operating Partnership, the L.L.C.s and FR Development Services, Inc. (hereinafter defined as the "Consolidated Operating Partnership") owned 865 in-service industrial properties, containing an aggregate of approximately 55.6 million square feet of gross leasable area ("GLA"). On a combined basis, as of December 31, 2000, the Other Real Estate Partnerships owned 104 in-service industrial properties, containing an aggregate of approximately 12.6 million square feet of GLA. Of the 104 industrial properties owned by the Other Real Estate Partnerships at December 31, 2000, 22 are held by the Mortgage Partnership, 24 are held by the Pennsylvania Partnership, 22 are held by the Securities Partnership, 22 are held by the Financing Partnership, six are held by the Harrisburg Partnership, six are held by the Indianapolis Partnership, one is held by First Industrial Development Services, L.P. and one is held by TK-SV, LTD. The Consolidated Operating Partnership utilizes an operating approach which combines the effectiveness of decentralized, locally based property management, acquisition, sales and development functions with the cost efficiencies of centralized acquisition, sales and development support, capital markets expertise, asset management and fiscal control systems. At March 23, 2001, the Consolidated Operating Partnership had 283 employees. The Consolidated Operating Partnership has grown and will seek to continue to grow through the development of industrial properties and the acquisition of additional industrial properties. 3 5 BUSINESS OBJECTIVES AND GROWTH PLANS The Consolidated Operating Partnership's fundamental business objective is to maximize the total return to its partners through increases in per unit distributions and increases in the value of the Consolidated Operating Partnership's properties and operations. The Consolidated Operating Partnership's growth plan includes the following elements: - - Internal Growth. The Consolidated Operating Partnership seeks to grow internally by (i) increasing revenues by renewing or re-leasing spaces subject to expiring leases at higher rental levels; (ii) increasing occupancy levels at properties where vacancies exist and maintaining occupancy elsewhere; (iii) controlling and minimizing property operating and general and administrative expenses; (iv) renovating existing properties; and (v) increasing ancillary revenues from non-real estate sources. - - External Growth. The Consolidated Operating Partnership seeks to grow externally through (i) the development of industrial properties; (ii) the acquisition of portfolios of industrial properties, industrial property businesses or individual properties which meet the Consolidated Operating Partnership's investment parameters and geographic target markets; and (iii) the expansion of its properties. BUSINESS STRATEGIES The Consolidated Operating Partnership utilizes the following six strategies in connection with the operation of its business: - - Organization Strategy. The Consolidated Operating Partnership implements its decentralized property operations strategy through the use of experienced regional management teams and local property managers. Each operating region is headed by a managing director, who is a senior executive officer of, and has an equity interest in, the Company. The Consolidated Operating Partnership provides acquisition, development and financing assistance, asset management oversight and financial reporting functions from its headquarters in Chicago, Illinois to support its regional operations. The Consolidated Operating Partnership believes the size of its portfolio enables it to realize operating efficiencies by spreading overhead over many properties and by negotiating quantity purchasing discounts. - - Market Strategy. The Consolidated Operating Partnership's market strategy is to concentrate on the top 25 industrial real estate markets in the United States. These 25 markets were selected based upon (i) the strength of their industrial real estate fundamentals, including increased industrial demand expectations from e-commerce and supply chain management; (ii) their history and future outlook for continued economic growth and diversity; and (iii) a minimum market size of 100 million square feet of industrial space. Due to this market strategy, the Consolidated Operating Partnership plans on exiting the markets of Cleveland, Columbus, Dayton, Des Moines, Grand Rapids, Long Island and New Orleans/Baton Rouge. The net proceeds from the sales of properties in these markets will be used to bolster the Consolidated Operating Partnership's holdings in Atlanta, Baltimore/Washington, Chicago, Cincinnati/Louisville, Dallas/Fort Worth, Denver, Detroit, Harrisburg/Central Pennsylvania, Houston, Indianapolis, Los Angeles, Milwaukee, Minneapolis, Nashville, Northern New Jersey, Philadelphia, Phoenix, Portland, Salt Lake City, St. Louis and Tampa and to potentially enter new markets which fit its market strategy. The Consolidated Operating Partnership plans on exiting these markets in the next one to three years and is projected to incur closing costs between the range of 3% to 5% of gross sales proceeds. There can be no assurance that these properties will be sold in this time frame or the Consolidated Operating Partnership will incur closing costs within the range stated above. - - Disposition Strategy. As mentioned in the Market Strategy section above, the Consolidated Operating Partnership is planning to exit the markets of Cleveland, Columbus, Dayton, Des Moines, Grand Rapids, Long Island and New Orleans/Baton Rouge. The Consolidated Operating Partnership also continues to evaluate local market conditions and property-related factors in its other markets and will consider disposition of select assets. - - Acquisition/Development Strategy. The Consolidated Operating Partnership's acquisition/development strategy is to concentrate on the top 25 markets mentioned in the Market Strategy section above. The Consolidated Operating Partnership will use its Integrated Industrial Solutions(TM) capabilities to target these markets. Of the 4 6 969 properties in the Consolidated Operating Partnership's and Other Real Estate Partnerships' combined portfolios at December 31, 2000, 233 properties have been developed by either the Consolidated Operating Partnership, the Other Real Estate Partnerships, or its former management. The Consolidated Operating Partnership will continue to leverage the development capabilities of its management, many of whom are leading developers in their respective markets. - - Financing Strategy. The Consolidated Operating Partnership plans on utilizing net sales proceeds from property sales as well as borrowings under its $300 million unsecured line of credit to finance future acquisitions and developments. As of March 23, 2001, the Consolidated Operating Partnership had approximately $228.0 million available in additional borrowings under its $300 million unsecured line of credit. - - Leasing and Marketing Strategy. The Consolidated Operating Partnership has an operational management strategy designed to enhance tenant satisfaction and portfolio performance. The Consolidated Operating Partnership pursues an active leasing strategy, which includes aggressively marketing available space, renewing existing leases at higher rents per square foot and seeking leases which provide for the pass-through of property-related expenses to the tenant. The Consolidated Operating Partnership also has local and national marketing programs which focus on the business and brokerage communities and national tenants. RECENT DEVELOPMENTS In 2000, the Consolidated Operating Partnership acquired or completed development of 103 properties, redeveloped one property and acquired several parcels of land for a total estimated investment of approximately $440.1 million. The Consolidated Operating Partnership also sold 104 in-service properties, one property that was out of service and several parcels of land for a gross sales price of approximately $404.0 million During the period January 1, 2001 through March 23, 2001, the Consolidated Operating Partnership acquired 13 industrial properties and several land parcels for a total estimated investment of approximately $45.5 million. The Consolidated Operating Partnership also sold eight industrial properties and one land parcel for approximately $19.5 million of gross proceeds. On March 9, 2001, the Operating Partnership declared a first quarter distribution of $.6575 per unit which is payable on April 23, 2001. The Operating Partnership also declared first quarter 2001 preferred unit distributions of $54.688 per unit on its 8 3/4% Series B Cumulative Preferred Units, $53.906 per unit on its 8 5/8% Series C Cumulative Preferred Units, $49.687 per unit on its 7.95% Series D Cumulative Preferred Units and $49.375 per unit on its 7.90% Series E Cumulative Preferred Units. The preferred unit distributions are payable on April 2, 2001. On March 19, 2001, the Consolidated Operating Partnership, through the Operating Partnership, issued $200.0 million of unsecured notes in a private offering at an offering price of 99.695%. The unsecured notes mature on March 15, 2011 and bear a coupon interest rate of 7.375%. FUTURE PROPERTY ACQUISITIONS, DEVELOPMENTS AND PROPERTY SALES The Consolidated Operating Partnership has an active acquisition and development program through which it is continually engaged in identifying, negotiating and consummating portfolio and individual industrial property acquisitions and developments. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible acquisition and development of certain industrial properties located in certain of the Consolidated Operating Partnership's top 25 markets. The Consolidated Operating Partnership also has an active sales program. As a result, the Consolidated Operating Partnership is currently engaged in negotiations relating to the possible sales of certain industrial properties in the Consolidated Operating Partnership's current portfolio. When evaluating potential industrial property acquisitions and developments, as well as potential industrial property sales, the Consolidated Operating Partnership will consider such factors as: (i) the geographic area and type of property; (ii) the location, construction quality, condition and design of the property; (iii) the potential for capital appreciation of the property; (iv) the ability of the Consolidated Operating Partnership to improve the property's performance through renovation; (v) the terms of tenant leases, including the potential for rent increases; (vi) the potential for economic growth and the tax and regulatory environment of the area in which the property is located; (vii) the potential for expansion of the physical layout of the property and/or the number of sites; (viii) the occupancy and demand by tenants for properties of a similar type in the vicinity; and (ix) competition from existing properties and the potential for the construction of new properties in the area. 5 7 INDUSTRY Industrial properties are typically used for the design, assembly, packaging, storage and distribution of goods and/or the provision of services. As a result, the demand for industrial space in the United States is related to the level of economic output. Historically, occupancy rates for industrial property in the United States have been higher than those for other types of commercial property. The Consolidated Operating Partnership believes that the higher occupancy rate in the industrial property sector is a result of the construction-on-demand nature of, and the comparatively short development time required for, industrial property. For the five years ended December 31, 2000, the occupancy rates for industrial properties in the United States have ranged from 91.2%* to 93.3%*, with an occupancy rate of 93.3%* at December 31, 2000. ITEM 2. THE PROPERTIES GENERAL At December 31, 2000, the Consolidated Operating Partnership and the Other Real Estate Partnerships owned 969 in-service properties (865 of which were owned by the Consolidated Operating Partnership and 104 of which were owned by the Other Real Estate Partnerships) containing an aggregate of approximately 68.2 million square feet of GLA (55.6 million square feet of which comprised the properties owned by the Consolidated Operating Partnership and 12.6 million square feet of which comprised the properties owned by the Other Real Estate Partnerships) in 25 states, with a diverse base of more than 2,800 tenants engaged in a wide variety of businesses, including manufacturing, retail, wholesale trade, distribution and professional services. The properties are generally located in business parks which have convenient access to interstate highways and rail and air transportation. The weighted average age of the Consolidated Operating Partnership's and the Other Real Estate Partnerships' properties on a combined basis as of December 31, 2000 was approximately 14.7 years. The Consolidated Operating Partnership and Other Real Estate Partnerships maintain insurance on their respective properties that the Consolidated Operating Partnership and Other Real Estate Partnerships believe is adequate. The Consolidated Operating Partnership and the Other Real Estate Partnerships classify their properties into five industrial categories: Light industrial, bulk warehouse, R&D/flex, regional warehouse and manufacturing. While some properties may have characteristics which fall under more than one property type, the Consolidated Operating Partnership and the Other Real Estate Partnerships have used what they believe is the most dominant characteristic to categorize the property. The following tables summarize certain information as of December 31, 2000 with respect to the properties owned by the Consolidated Operating Partnership, each of which is wholly-owned. Information in the tables excludes properties under development at December 31, 2000. The following describes the different industrial categories: - Light industrial properties generally are of less than 100,000 square feet, have a ceiling height of 16 to 21 feet, are comprised of 5% - 50% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. The land use ratio is the ratio of the total property area to that not occupied by the building. - Bulk warehouse buildings generally are of more than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% - 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1. - R&D/flex buildings generally are of less than 100,000 square feet, have a ceiling height of less than 16 feet, are comprised of 50% or more of office space, contain less than 25% of manufacturing space and have a land use ratio of 4:1. - Regional warehouses generally are of less than 100,000 square feet, have a ceiling height of at least 22 feet, are comprised of 5% - 15% of office space, contain less than 25% of manufacturing space and have a land use ratio of 2:1. - Manufacturing properties are a diverse category of buildings that generally have a ceiling height of 10 - 18 feet, are comprised of 5% - 15% of office space, contain less than 50% of manufacturing space and have a land use ratio of 4:1. * SOURCE: TORTO WHEATON RESEARCH 6 8 CONSOLIDATED OPERATING PARTNERSHIP PROPERTY SUMMARY
Light Industrial Bulk Warehouse R&D Flex Regional Warehouse Manufacturing --------------------- --------------------- -------------------- -------------------- -------------------- Number of Number of Number of Number of Number of Metropolitan Area GLA Properties GLA Properties GLA Properties GLA Properties GLA Properties - ------------------- ---------- ---------- ---------- ---------- --------- ---------- --------- ---------- --------- ---------- Atlanta, GA 366,882 6 3,079,307 11 --- --- 184,846 2 419,600 3 Baltimore, MD 650,725 11 292,640 2 --- --- --- --- 171,000 1 Baton Rouge, LA 116,347 3 108,800 1 --- --- --- --- --- --- Central Pennsylvania --- --- --- --- --- --- 70,000 1 --- --- Chicago, IL 1,757,174 33 2,653,426 12 188,185 3 234,802 3 1,069,167 6 Cincinnati, OH 334,220 2 1,348,880 6 --- --- --- --- --- --- Cleveland, OH --- --- --- --- 102,500 1 --- --- --- --- Columbus, OH --- --- 1,653,534 4 217,612 2 --- --- 255,470 1 Dallas, TX 754,833 21 1,539,888 10 193,507 9 583,801 9 224,984 2 Dayton, OH 322,746 6 --- --- 20,000 1 --- --- --- --- Denver, CO 1,998,681 45 202,939 2 1,866,591 47 301,492 5 --- --- Des Moines, IA --- --- 879,040 5 --- --- --- --- --- --- Detroit, MI 2,516,870 95 1,079,130 9 593,246 20 859,566 20 17,240 1 Grand Rapids, MI 418,311 9 1,013,625 6 10,000 1 --- --- 413,500 1 Houston, TX 507,090 8 2,191,077 13 200,112 3 432,525 6 --- --- Indianapolis, IN 727,980 16 1,709,625 8 48,200 4 235,310 7 54,000 1 Long Island, NY 433,984 15 --- --- --- --- 36,880 1 --- --- Los Angeles, CA 99,749 5 --- --- --- --- --- --- --- --- Louisville, KY --- --- 443,500 2 --- --- --- --- --- --- Milwaukee, WI 290,826 6 100,000 1 --- --- 39,800 1 --- --- Minneapolis/ St. Paul, MN 1,195,385 22 1,626,149 8 661,748 10 537,034 5 790,732 11 Nashville, TN 334,061 7 1,344,298 9 --- --- --- --- 109,058 1 New Orleans, LA 395,831 10 --- --- 169,801 5 40,500 1 --- --- N. New Jersey 1,361,379 37 895,798 4 510,072 14 192,153 3 --- --- Phoenix, AZ 96,845 2 --- --- --- --- --- --- --- --- Portland, OR 734,032 31 --- --- 53,021 2 --- --- --- --- Salt Lake City, UT 591,276 40 --- --- 146,937 6 --- --- --- --- S. New Jersey 919,654 22 323,750 2 --- --- 209,300 3 22,738 1 St. Louis, MO 383,407 8 589,519 4 --- --- --- --- --- --- Tampa, FL 588,300 18 213,744 2 564,557 23 398,309 7 --- --- Other (a) --- --- 583,855 5 --- --- 50,000 1 346,103 6 ---------- ----- ---------- ----- --------- ------ --------- ------ --------- ----- Total 17,896,588 478 23,872,524 126 5,546,089 151 4,406,318 75 3,893,592 35 ========== ===== ========== ===== ========= ====== ========= ====== ========= =====
(a) Properties are located in Denton, Texas; Abilene, Texas; McAllen, Texas; Wichita, Kansas; West Lebanon, New Hampshire and Shreveport, Louisiana. 7 9 CONSOLIDATED OPERATING PARTNERSHIP PROPERTY SUMMARY TOTALS
TOTALS ----------------------------------------------------------- GLA AS A % NUMBER OF OCCUPANCY AT OF TOTAL METROPOLITAN AREA GLA PROPERTIES 12/31/00 PORTFOLIO - ----------------------------- ---------- ---------- ------------ ---------- Atlanta, GA 4,050,635 22 98% 7.3% Baltimore, MD 1,114,365 14 96% 2.0% Baton Rouge, LA 225,147 4 97% 0.4% Central Pennsylvania 70,000 1 100% 0.1% Chicago, IL 5,902,754 57 93% 10.6% Cincinnati, OH 1,683,100 8 92% 3.0% Cleveland, OH 102,500 1 100% 0.2% Columbus, OH 2,126,616 7 96% 3.8% Dallas, TX 3,297,013 51 99% 5.9% Dayton, OH 342,746 7 96% 0.6% Denver, CO 4,369,703 99 95% 7.9% Des Moines, IA 879,040 5 99% 1.6% Detroit, MI 5,066,052 145 97% 9.1% Grand Rapids, MI 1,855,436 17 100% 3.3% Houston, TX 3,330,804 30 95% 6.0% Indianapolis, IN 2,775,115 36 89% 5.0% Long Island, NY 470,864 16 96% 0.8% Los Angeles, CA 99,749 5 90% 0.2% Louisville, KY 443,500 2 100% 0.8% Milwaukee, WI 430,626 8 95% 0.8% Minneapolis/St. Paul, MN 4,811,048 56 94% 8.7% Nashville, TN 1,787,417 17 96% 3.2% New Orleans, LA 606,132 16 96% 1.1% N. New Jersey 2,959,402 58 94% 5.3% Phoenix, AZ 96,845 2 87% 0.2% Portland, OR 787,053 33 88% 1.4% Salt Lake City, UT 738,213 46 82% 1.3% S. New Jersey 1,475,442 28 90% 2.7% St. Louis, MO 972,926 12 100% 1.7% Tampa, FL 1,764,910 50 93% 3.2% Other (a) 979,958 12 100% 1.8% ---------- ---------- ------------ ---------- Total or Average 55,615,111 865 95% 100.0% ========== ========== ============ ==========
(a) Properties are located in Denton, Texas; Abilene, Texas; McAllen, Texas; Wichita, Kansas; West Lebanon, New Hampshire and Shreveport, Louisiana. 8 10 The following tables summarize certain information as of December 31, 2000 with respect to the properties owned by the Other Real Estate Partnerships, each of which is wholly-owned. OTHER REAL ESTATE PARTNERSHIPS PROPERTY SUMMARY
Light Industrial Bulk Warehouse R&D Flex Regional Warehouse Manufacturing ------------------- ------------------- ------------------ ------------------ ------------------- Number of Number of Number of Number of Number of Metropolican Area GLA Properties GLA Properties GLA Properties GLA Properties GLA Properties - -------------------- --------- --------- --------- --------- --------- -------- -------- --------- --------- -------- Atlanta, GA 59,959 1 1,037,338 3 153,508 4 90,289 1 --- --- Baltimore, MD 65,860 1 --- --- 78,418 1 --- --- --- --- Central 383,070 4 3,645,392 14 --- --- 117,579 3 --- --- Pennsylvania Chicago, IL 150,115 3 760,168 4 49,730 1 50,000 1 --- --- Des Moines, IA 75,072 3 --- --- --- --- 88,000 1 --- --- Detroit, MI 380,254 8 --- --- 33,092 2 66,395 1 --- --- Grand Rapids, MI 80,000 1 822,500 5 --- --- --- --- 31,750 1 Indianapolis, IN --- --- 1,796,341 5 --- --- 60,000 1 --- --- Milwaukee, WI --- --- --- --- 93,705 2 39,468 1 468,000 1 Minneapolis/St. 130,647 2 --- --- --- --- --- --- 533,390 3 Paul, MN Nashville, TN --- --- 160,661 1 --- --- --- --- --- --- Philadelphia, PA 273,775 12 324,320 2 36,802 2 46,750 1 56,827 2 St. Louis, MO --- --- 245,000 2 --- --- --- --- --- --- Tampa, FL --- --- --- --- 44,427 1 --- --- --- --- Other (a) 99,000 3 --- --- --- --- --- --- --- --- --------- --------- --------- --------- --------- -------- -------- --------- --------- -------- Total 1,697,752 38 8,791,720 36 489,682 13 558,481 10 1,089,967 7 ========= ========= ========= ========= ========= ======== ======== ========= ========= ========
(a) Properties are located in Austin, Texas. 10 11 OTHER REAL ESTATE PARTNERSHIPS PROPERTY SUMMARY TOTALS
TOTALS ----------------------------------------------------------------------------- GLA AS A % NUMBER OF OCCUPANCY AT OF TOTAL METROPOLITAN AREA GLA PROPERTIES 12/31/00 PORTFOLIO - ------------------------------- ---------------- ----------------- ------------------- ------------- Atlanta, GA 1,341,094 9 94% 10.6% Baltimore, MD 144,278 2 97% 1.1% Central Pennsylvania 4,146,041 21 98% 32.8% Chicago, IL 1,010,013 9 97% 8.0% Des Moines, IA 163,072 4 78% 1.3% Detroit, MI 479,741 11 99% 3.8% Grand Rapids, MI 934,250 7 100% 7.4% Indianapolis, IN 1,856,341 6 92% 14.7% Milwaukee, WI 601,173 4 100% 4.8% Minneapolis/St. Paul, MN 664,037 5 100% 5.3% Nashville, TN 160,661 1 100% 1.3% Philadelphia, PA 738,474 19 94% 5.8% St. Louis, MO 245,000 2 100% 1.9% Tampa, FL 44,427 1 100% 0.4% Other (a) 99,000 3 100% 0.8% ---------------- ----------------- ------------------- ------------- Total or Average 12,627,602 104 97% 100.0% ================ ================= =================== =============
(a) Properties are located in Austin, Texas. 11 12 PROPERTY ACQUISITION ACTIVITY During 2000, the Consolidated Operating Partnership completed 16 separate industrial property acquisition transactions comprising 82 in-service industrial properties and one industrial property under redevelopment totaling approximately 5.6 million square feet of GLA at a total purchase price of approximately $257.3 million, or $45.82 per square foot. The Consolidated Operating Partnership also purchased numerous land parcels for an aggregate purchase price of approximately $57.0 million. The 83 industrial properties acquired have the following characteristics:
NUMBER OF OCCUPANCY METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE AT 12/31/00 ACQUISITION DATE ---------------------------- ------------ ---------- --------------------------------- ----------- ------------------- Houston, TX 3 144,639 Light Industrial/R&D Flex 90% January 12, 2000 Southern New Jersey 1 79,329 Regional Warehouse 100% January 27, 2000 Nashville, TN 3 339,051 Bulk Warehouse 100% January 27, 2000 Dallas, TX 1 130,949 Bulk Warehouse 100% March 31, 2000 Harrisburg, PA (a) 1 38,668 Light Industrial N/A April 18, 2000 Houston, TX 1 251,850 Bulk Warehouse 100% April 25, 2000 Dallas, TX 18 1,303,317 R&D Flex/Bulk Whse/Reg Whse 100% June 30, 2000 Long Island, NY (b) 1 15,000 Light Industrial N/A August 15, 2000 Los Angeles, CA 3 69,592 Light Industrial 93% September 6, 2000 Los Angeles, CA 2 30,157 Light Industrial 86% September 20, 2000 Northern New Jersey 12 1,257,143 Lt. Industrial/R&D Flex/Bulk 94% September 28, 2000 Whse Baltimore, MD 3 125,212 Light Industrial 96% December 5, 2000 Tampa, FL 6 179,494 R&D Flex 98% December 14, 2000 Chicago, IL (c) 18 1,208,074 Lt. Industrial/R&D Flex/Bulk 94% December 18, 2000 Whse/Reg. Whse Denver, CO 4 234,683 Light Industrial/ R&D Flex 100% December 29, 2000 Detroit, MI 6 208,197 Light Industrial/Reg. Warehouse 93% December 29, 2000 ------------ ---------- Total 83 5,615,355 ============ ==========
(a) Property was sold on June 27, 2000. (b) Property was sold on August 16, 2000. (c) Acquisition includes a 50,400 square foot light industrial redevelopment property. During 2000, the Other Real Estate Partnerships completed one industrial property acquisition transaction comprising one in-service industrial property totaling approximately .2 million square feet of GLA at a total purchase price of approximately $6.3 million, or $29.62 per square foot. The Other Real Estate Partnerships also purchased numerous land parcels for an aggregate purchase price of approximately $2.9 million. The industrial property acquired has the following characteristics:
NUMBER OF OCCUPANCY METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE AT 12/31/00 ACQUISITION DATE ---------------------------- ------------ ---------- --------------------------------- ----------- ------------------- Philadelphia, PA 1 214,320 Bulk Warehouse 100% February 25, 2000 ------------ ---------- Total 1 214,320 ============ ==========
12 13 PROPERTY DEVELOPMENT ACTIVITY During 2000, the Consolidated Operating Partnership placed in service 20 developments and one redevelopment totaling approximately 3.6 million square feet of GLA at a total cost of approximately $125.8 million, or $35.27 per square foot. The developed properties have the following characteristics:
OCCUPANCY METROPOLITAN AREA GLA PROPERTY TYPE AT 12/31/00 COMPLETION DATE - ---------------------------- ----------- ------------------ ------------------- ---------------------- Louisville, KY 231,000 Bulk Warehouse 100% February 1, 2000 Denver, CO (a) 58,490 R&D Flex N/A March 1, 2000 Milwaukee, WI 100,000 Bulk Warehouse 80% March 1, 2000 Rochester, NY (b) 796,806 Bulk Warehouse N/A March 1, 2000 Denver, CO 16,500 Light Industrial 100% March 15, 2000 Cincinnati, OH 168,000 Bulk Warehouse 100% May 1, 2000 Cincinnati, OH 140,800 Bulk Warehouse 45% May 1, 2000 Northern New Jersey 45,700 R&D Flex 78% June 1, 2000 Atlanta, GA 504,000 Bulk Warehouse 100% June 1, 2000 Salt Lake City, UT 55,785 R&D Flex 100% June 1, 2000 Northern New Jersey 30,000 R&D Flex 67% September 1, 2000 Indianapolis, IN 389,660 Bulk Warehouse 100% September 30, 2000 Long Island, NY (c) 91,200 R&D Flex N/A September 30, 2000 Long Island, NY (c) (d) 134,991 R&D Flex N/A November 1, 2000 New Orleans, LA 53,544 Light Industrial 100% November 8, 2000 Philadelphia, PA 70,000 Reg. Warehouse 100% November 27, 2000 Minneapolis, MN 128,500 Bulk Warehouse 87% December 1, 2000 Chicago, IL (e) 319,506 Bulk Warehouse N/A December 29, 2000 Phoenix, AZ 58,285 Light Industrial 79% December 29, 2000 Tampa, FL 100,000 Light Industrial 80% December 29, 2000 Tampa, FL 72,000 Reg. Warehouse 65% December 29, 2000 ----------- Total 3,564,767 ===========
(a) Property was sold on September 26, 2000. (b) Property was sold on February 18, 2000. (c) Property was sold on November 30, 2000. (d) Redevelopment. (e) Property was sold on December 29, 2000. During 2000, the Other Real Estate Partnerships placed in service six developments and one redevelopment totaling approximately .5 million square feet of GLA at a total cost of approximately $22.2 million, or $44.32 per square foot. The developed properties have the following characteristics:
OCCUPANCY METROPOLITAN AREA GLA PROPERTY TYPE AT 12/31/00 COMPLETION DATE - ---------------------------- ----------- ------------------ ------------------- ---------------------- Austin, TX 33,000 Light Industrial 100% February 1, 2000 Denver, CO (a) 49,510 Bulk Warehouse N/A March 1, 2000 Austin, TX 33,000 Light Industrial 100% June 30, 2000 Chicago, IL 50,000 Reg. Warehouse 65% November 23, 2000 Minneapolis, MN (b) 123,485 Manufacturing 100% December 17, 2000 Indianapolis, IN 100,000 Bulk Warehouse 50% December 29, 2000 Atlanta, GA 110,000 Bulk Warehouse 55% December 29, 2000 ----------- Total 498,995 ===========
(a) Property was sold on September 26, 2000. (b) Redevelopment At December 31, 2000, the Consolidated Operating Partnership had 13 projects under development, with an estimated completion GLA of approximately 1.8 million square feet and an estimated completion cost of approximately $102.2 million. The Consolidated Operating Partnership estimates it will place in service nine projects with an estimated completion GLA of 1.2 million square feet and an estimated completion cost of approximately $60.5 million in fiscal year 2001. There can be no assurance that the Consolidated Operating Partnership will complete these projects in 2001 or that the actual completion cost will not exceed the amount stated above. At December 31, 2000, the Other Real Estate Partnerships had 8 projects under development, with an estimated completion GLA of approximately 2.2 million square feet and an estimated completion cost of approximately $75.5 million. The Other Real Estate Partnerships estimates it will place in service eight projects with an estimated completion GLA of 2.2 million square feet and an estimated completion cost of approximately $75.5 million in fiscal year 2001. There can be no assurance that the Other Real Estate Partnerships will complete these projects in 2001 or that the actual completion cost will not exceed the amount stated above. 13 14 PROPERTY SALES During 2000, the Consolidated Operating Partnership sold 104 in-service industrial properties and one out of service property totaling approximately 8.9 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $404.0 million. The 104 in-service properties and one out of service property sold have the following characteristics:
NUMBER OF METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE SALE DATE ----------------------------- ------------- ------------ ---------------------------------- ------------------ Nashville, TN (a) 1 392,128 Bulk Warehouse January 4, 2000 Portland, OR 1 20,500 Light Industrial January 24, 2000 Cleveland, OH 1 32,000 Light Industrial January 27, 2000 Cleveland, OH 1 51,525 Regional Warehouse January 31, 2000 Rochester, NY 1 796,806 Bulk Warehouse February 18, 2000 Des Moines, IA 1 54,000 Light Industrial February 23, 2000 Southern New Jersey 1 30,000 Light Industrial March 13, 2000 Long Island, NY 1 99,600 Light Industrial March 17, 2000 Chicago, IL 3 94,840 Light Industrial/R&D Flex March 20, 2000 Atlanta, GA 2 408,819 Bulk Warehouse April 19, 2000 Atlanta, GA 1 32,000 Light Industrial May 10, 2000 Hartford, CT 11 619,191 Lt. Industrial/Bulk June 8, 2000 Whse/Manufacturing Long Island, NY 1 325,000 Bulk Warehouse June 21, 2000 Harrisburg, PA 1 38,668 Light Industrial June 27, 2000 St. Louis, MO 1 46,481 Light Industrial June 29, 2000 Detroit, MI 2 58,650 Light Industrial June 29, 2000 Detroit, MI 1 47,700 Regional Warehouse June 29, 2000 St. Louis, MO 1 60,708 Light Industrial June 30, 2000 Phoenix, AZ 4 437,376 R&D Flex/Bulk Whse/Regional Whse August 4, 2000 Cincinnati, OH 5 111,375 Light Industrial August 10, 2000 Cleveland, OH 5 169,116 Light Industrial August 10, 2000 Long Island, NY 1 15,000 Light Industrial August 16, 2000 Columbus, OH 1 57,255 Light Industrial August 30, 2000 Denver, CO 1 59,970 R&D Flex September 26, 2000 Long Island, NY 1 25,401 Light Industrial October 10, 2000 Detroit, MI 1 180,986 Bulk Warehouse October 20, 2000 Detroit, MI 1 12,612 Light Industrial October 23, 2000 Denver, CO 5 97,861 Light Industrial/R&D Flex October 30, 2000 Chicago, IL 1 84,956 Light Industrial November 20, 2000 St. Louis, MO 1 49,600 Light Industrial November 20, 2000 Phoenix, AZ 1 98,052 Regional Warehouse November 21, 2000 Long Island, NY 32 3,266,434 Lt. Ind/R&D Flex/Bulk November 30, 2000 Whse/Regional Whse/Manuf. Grand Rapids, MI 1 66,505 Light Industrial December 1, 2000 Detroit, MI 1 12,612 Light Industrial December 6, 2000 Detroit, MI 1 12,200 Light Industrial December 13, 2000 Long Island, NY 1 58,850 Regional Warehouse December 19, 2000 Minneapolis, MN 1 124,800 Bulk Warehouse December 20, 2000 Minneapolis, MN 2 194,040 Manufacturing December 20, 2000 Northern New Jersey 1 20,440 Light Industrial December 24, 2000 Clarion, IA 1 126,900 Bulk Warehouse December 28, 2000 Northern New Jersey 1 13,580 Light Industrial December 29, 2000 Green Bay, WI 1 25,254 Light Industrial December 29, 2000 Portland, OR 1 49,624 Light Industrial December 29, 2000 Chicago, IL 1 319,506 Bulk Warehouse December 29, 2000 ------------- ------------ Total 105 8,898,921 ============= ============
(a) Property was out of service when sold. During 2000, the Other Real Estate Partnerships sold four in-service industrial properties totaling approximately .7 million square feet of GLA and several land parcels. Total gross sales proceeds approximated $29.7 million. The four in-service properties sold have the following characteristics:
NUMBER OF METROPOLITAN AREA PROPERTIES GLA PROPERTY TYPE SALE DATE ----------------------------- ------------- ------------ ------------------------------ ------------------ Philadelphia, PA 1 81,071 R&D Flex June 6, 2000 Louisville, KY 1 532,400 Bulk Warehouse June 26, 2000 Detroit, MI 1 42,360 Light Industrial June 29, 2000 Denver, CO 1 50,760 Bulk Warehouse September 26, 2000 ------------- ------------ Total 4 706,591 ============= ============
15 PROPERTY ACQUISITIONS, DEVELOPMENTS AND SALES SUBSEQUENT TO YEAR END During the period January 1, 2001 through March 23, 2001, the Consolidated Operating Partnership acquired 13 industrial properties and several land parcels for a total estimated investment of approximately $45.5 million. The Consolidated Operating Partnership also sold eight industrial properties and one land parcel for approximately $19.5 million of gross proceeds. During the period January 1, 2001 through March 23, 2001, the Other Real Estate Partnerships acquired eight industrial properties for a total estimated investment of approximately $27.9 million. The Other Real Estate Partnerships also sold one industrial property and one land parcel for approximately $1.8 million of gross proceeds. 15 16 DETAIL PROPERTY LISTING The following table lists all of the Consolidated Operating Partnership's properties as of December 31, 2000, by geographic market area. PROPERTY LISTING
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- ATLANTA 1650 GA Highway 155 McDonough, GA 1991 Bulk Warehouse 12.80 228,400 100% 14101 Industrial Park Blvd. Covington, GA 1984 Light Industrial 9.25 92,160 100% 801-804 Blacklawn Road Conyers, GA 1982 Bulk Warehouse 6.67 111,185 100% 1665 Dogwood Drive Conyers, GA 1973 Manufacturing 9.46 198,000 100% 1715 Dogwood Drive Conyers, GA 1973 Manufacturing 4.61 100,000 100% 11235 Harland Drive Covington, GA 1988 Light Industrial 5.39 32,361 100% 700 Westlake Parkway Atlanta, GA 1990 Light Industrial 3.50 56,400 70% 800 Westlake Parkway Atlanta, GA 1991 Bulk Warehouse 7.40 132,400 100% 4050 Southmeadow Parkway Atlanta, GA 1991 Reg. Warehouse 6.60 87,328 100% 4051 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 11.20 171,671 100% 4071 Southmeadow Parkway Atlanta, GA 1991 Bulk Warehouse 17.80 209,918 100% 4081 Southmeadow Parkway Atlanta, GA 1989 Bulk Warehouse 12.83 254,172 100% 1875 Rockdale Industrial Conyers, GA 1966 Manufacturing 5.70 121,600 100% Blvd. 3312 N. Berkeley Lake Road Duluth, GA 1969 Bulk Warehouse 52.11 1,040,296 100% 370 Great Southwest Pkway Atlanta, GA 1986 Light Industrial 8.06 150,536 66% (i) 955 Cobb Place Kennesaw, GA 1991 Reg. Warehouse 8.73 97,518 100% 1640 Sands Place Marietta, GA 1977 Light Industrial 1.97 35,425 57% 7000 Highland Parkway Smyrna, GA 1998 Bulk Warehouse 10.00 123,808 100% 2084 Lake Industrial Court Conyers, GA 1998 Bulk Warehouse 13.74 180,000 100% 1003 Sigman Road Conyers, GA 1996 Bulk Warehouse 11.30 123,457 100% 220 Greenwood Court McDonough, GA 2000 Bulk Warehouse 26.69 504,000 100% ---------- ------- SUBTOTAL OR AVERAGE SUBTOTAL OR AVERAGE 4,050,635 98% ---------- ------- BALTIMORE 3431 Benson Baltimore, MD 1988 Light Industrial 3.48 60,227 100% 1801 Portal Baltimore, MD 1987 Light Industrial 3.72 57,600 100% 1811 Portal Baltimore, MD 1987 Light Industrial 3.32 60,000 100% 1831 Portal Baltimore, MD 1990 Light Industrial 3.18 46,522 100% 1821 Portal Baltimore, MD 1986 Light Industrial 4.63 86,234 92% 1820 Portal Baltimore, MD (f) 1982 Bulk Warehouse 6.55 171,000 100% 4845 Governers Way Frederick, MD 1988 Light Industrial 5.47 83,064 98% 8900 Yellow Brick Road Baltimore, MD 1982 Light Industrial 5.80 60,000 100% 7476 New Ridge Hanover, MD 1987 Light Industrial 18.00 71,866 93% 1328 Charwood Road Hanover, MD 1986 Bulk Warehouse 9.00 150,500 83% 8779 Greenwood Place Savage, MD 1978 Bulk Warehouse 8.00 142,140 100% 1350 Blair Drive Odenton, MD 1991 Light Industrial 2.86 29,317 100% 1360 Blair Drive Odenton, MD 1991 Light Industrial 4.19 42,985 90% 1370 Blair Drive Odenton, MD 1991 Light Industrial 5.15 52,910 100% ---------- ------- SUBTOTAL OR AVERAGE 1,114,365 96% ---------- ------- BATON ROUGE 11200 Industriplex Blvd. Baton Rouge, LA 1986 Light Industrial 3.00 42,355 100% 11441 Industriplex Blvd. Baton Rouge, LA 1987 Light Industrial 2.40 35,596 100% 11301 Industriplex Blvd. Baton Rouge, LA 1985 Light Industrial 2.50 38,396 80% 6565 Exchequer Drive Baton Rouge, LA 1986 Bulk Warehouse 5.30 108,800 100% ---------- ------- SUBTOTAL OR AVERAGE 225,147 97% ---------- ------- CENTRAL PENNSYLVANIA 2252 125 East Kensinger Cranberry Township, 2000 Reg. Warehousae 13.00 70,000 100% Drive PA ---------- ------- SUBTOTAL OR AVERAGE 70,000 100% ---------- ------- CHICAGO 2300 Hammond Drive Schaumburg, IL 1970 Light Industrial 4.13 77,000 100% 6500 North Lincoln Avenue Lincolnwood, IL 1965/88 Light Industrial 2.52 61,548 100% 3600 West Pratt Avenue Lincolnwood, IL 1953/88 Bulk Warehouse 6.35 204,679 87% 917 North Shore Drive Lake Bluff, IL 1974 Light Industrial 4.27 84,575 100% 6750 South Sayre Avenue Bedford Park, IL 1975 Light Industrial 2.51 63,383 100% 585 Slawin Court Mount Prospect, 1992 R&D/Flex 3.71 38,150 100% IL 2300 Windsor Court Addison, IL 1986 Bulk Warehouse 6.80 105,100 100% 3505 Thayer Court Aurora, IL 1989 Light Industrial 4.60 64,220 100% 3600 Thayer Court Aurora, IL 1989 Light Industrial 6.80 66,958 100% 736-776 Industrial Drive Elmhurst, IL 1975 Light Industrial 3.79 80,180 100% 305-311 Era Drive Northbrook, IL 1978 Light Industrial 1.82 27,549 100% 700-714 Landwehr Road Northbrook, IL 1978 Light Industrial 1.99 41,835 100% 4330 South Racine Avenue Chicago, IL 1978 Manufacturing 5.57 168,000 100% 13040 S. Crawford Avenue Alsip, IL 1976 Bulk Warehouse 15.12 400,076 100% 12241 Melrose Street Franklin Park, IL 1969 Light Industrial 2.47 77,301 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- CHICAGO (CONT.) 12301-12325 S. Laramie Alsip, IL 1975 Bulk Warehouse 8.83 100% Avenue 204,586 6300 Howard Niles, IL 1956/64 Manufacturing 19.50 364,000 100% 301 Hintz Wheeling, IL 1960 Manufacturing 2.51 43,636 100% 301 Alice Wheeling, IL 1965 Light Industrial 2.88 65,450 100% 410 West 169th Street South Holland, IL 1974 Bulk Warehouse 6.40 70% 151,436 11939 South Central Avenue Alsip, IL 1972 Bulk Warehouse 12.60 320,171 99% 405 East Shawmut LaGrange, IL 1965 Light Industrial 3.39 59,075 100% 1010-50 Sesame Street Bensenville, IL (c) 1976 Manufacturing 8.00 252,000 100% 5555 West 70th Place Bedford Park, IL 1973 Manufacturing 2.50 41,531 100% 3200-3250 South St. Louis Chicago, IL 1968 Light Industrial 8.66 74,685 100% (i) 3110-3130 South St. Louis Chicago, IL 1968 Light Industrial 4.00 23,254 100% 7301 South Hamlin Chicago, IL 1975/86 Light Industrial 1.49 56,017 43% 7401 South Pulaski Chicago, IL 1975/86 Bulk Warehouse 5.36 213,670 79% 3900 West 74th Street Chicago, IL 1975/86 Reg. Warehouse 2.13 66,000 0% 7501 South Pulaski Chicago, IL 1975/86 Bulk Warehouse 3.88 159,728 100% 385 Fenton Lane West Chicago, IL 1990 Bulk Warehouse 6.79 182,000 100% 335 Crossroad Parkway Bolingbrook, IL 1996 Bulk Warehouse 12.86 288,000 100% 10435 Seymour Avenue Franklin Park, IL 1967 Light Industrial 1.85 53,500 43% 905 Paramount Batavia, IL 1977 Light Industrial 2.60 60,000 100% 1005 Paramount Batavia, IL 1978 Light Industrial 2.50 64,574 100% 34-45 Lake Street Northlake, IL 1978 Bulk Warehouse 5.71 124,804 100% 2120-24 Roberts Broadview, IL 1960 Light Industrial 2.30 60,009 52% 4309 South Morgan Street Chicago, IL 1975 Manufacturing 6.91 200,000 49% 405-17 University Drive Arlington Hgts, IL 1977 Light Industrial 2.42 56,400 100% 3575 Stern Avenue St. Charles, IL 1979/1984 Reg. Warehouse 2.73 68,728 100% 3810 Stern Avenue St. Charles, IL 1985 Reg. Warehouse 4.67 100,074 100% 3645 Swenson Avenue St. Charles, IL 1981 Light Industrial 3.27 42,547 34% 315 Kirk Road St. Charles, IL 1969/93/95 Bulk Warehouse 12.42 299,176 100% 550 Business Center Drive Mount Prospect, IL 1984 Light Industrial 2.26 34,596 100% 700 Business Center Drive Mount Prospect, IL 1980 Light Industrial 3.12 34,800 100% 555 Business Center Drive Mount Prospect, IL 1981 Light Industrial 2.96 31,175 100% 800 Business Center Drive Mount Prospect, IL 1988/99 Light Industrial 5.40 81,610 100% 580 Slawin Court Mount Prospect, IL 1985 Light Industrial 2.08 30,225 100% 1150 Feehanville Drive Mount Prospect, IL 1983 Light Industrial 2.74 33,600 100% 850 Feehanville Drive Mount Prospect, IL 1983 Light Industrial 2.87 34,875 100% 1200 Business Center Drive Mount Prospect, IL 1988/2000 Light Industrial 6.68 106,000 76% 1331 Business Center Drive Mount Prospect, IL 1985 Light Industrial 3.12 30,380 100% 1601 Feehanville Drive Mount Prospect, IL 1986/2000 R&D/Flex 6.07 64,080 76% 3627 Stern Avenue St. Charles, IL 1979 Light Industrial 1.84 30,000 100% 902 Feehanville Avenue Mount Prospect, IL 1983 Light Industrial 3.61 49,853 100% 1661 Feehanville Avenue Mount Prospect, IL 1986 R&D/Flex 6.89 85,955 99% ---------- ------- SUBTOTAL OR AVERAGE 5,902,754 93% ---------- ------- CINCINNATI 9900-9970 Princeton Cincinnati, OH (a) 1970 Bulk Warehouse 10.64 185,580 82% 2940 Highland Avenue Cincinnati, OH (a) 1969/74 Bulk Warehouse 17.08 502,000 95% 4700-4750 Creek Road Blue Ash, OH (a) 1960 Light Industrial 15.32 265,000 97% 12072 Best Place Springboro, OH 1984 Bulk Warehouse 7.80 112,500 100% 901 Pleasant Valley Drive Springboro, OH 1984 Light Industrial 7.70 69,220 100% 4440 Mulhauser Road Cincinnati, OH 1999 Bulk Warehouse 15.26 240,000 100% 4434 Mulhauser Road Cincinnati, OH 1999 Bulk Warehouse 25.00 140,800 45% 9449 Glades Drive Hamilton, OH 1999 Bulk Warehouse 7.40 168,000 100% ---------- ------- SUBTOTAL OR AVERAGE 1,683,100 92% ---------- ------- CLEVELAND 6675 Parkland Boulevard Solon, OH 1991 R&D/Flex 10.41 102,500 100% ---------- ------- SUBTOTAL OR 102,500 100% Average ---------- ------- COLUMBUS 3800 Lockbourne Industrial Columbus, OH 1986 Bulk Warehouse 22.12 404,734 100% Pky 3880 Groveport Road Obetz, OH 1986 Bulk Warehouse 43.41 705,600 100% 1819 North Walcutt Road Columbus, OH 1973 Bulk Warehouse 11.33 243,000 69% 4300 Cemetery Road Hilliard, OH 1968 Manufacturing 62.71 255,470 100% 4115 Leap Road (i) Hilliard, OH 1977 R&D/Flex 18.66 217,612 100% 3300 Lockbourne Columbus, OH 1964 Bulk Warehouse 17.00 300,200 100% ---------- ------- SUBTOTAL OR AVERAGE 2,126,616 96% ---------- ------- DALLAS 1275-1281 Roundtable Drive Dallas, TX 1966 Light Industrial 1.75 30,642 100% 2406-2416 Walnut Ridge Dallas, TX 1978 Light Industrial 1.76 44,000 100% 12750 Perimeter Drive Dallas, TX 1979 Bulk Warehouse 6.72 178,200 100% 1324-1343 Roundtable Drive Dallas, TX 1972 Light Industrial 2.09 47,000 100% 1405-1409 Avenue II East Grand Prairie, TX 1969 Light Industrial 1.79 36,000 100% 2651-2677 Manana Dallas, TX 1966 Light Industrial 2.55 82,229 100% 2401-2419 Walnut Ridge Dallas, TX 1978 Light Industrial 1.20 30,000 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- DALLAS (CONT.) 4248-4252 Simonton Farmers Ranch, TX 1973 Bulk Warehouse 8.18 205,693 100% 900-906 Great Southwest Pkwy Arlington, TX 1972 Light Industrial 3.20 69,761 100% 2179 Shiloh Road Garland, TX 1982 Reg. Warehouse 3.63 65,700 100% 2159 Shiloh Road Garland, TX 1982 R&D/Flex 1.15 20,800 100% 2701 Shiloh Road Garland, TX 1981 Bulk Warehouse 8.20 214,650 100% 12784 Perimeter Drive (j) Dallas, TX 1981 Light Industrial 4.57 95,671 83% 3000 West Commerce Dallas, TX 1980 Manufacturing 11.23 128,478 100% 3030 Hansboro Dallas, TX 1971 Bulk Warehouse 3.71 100,000 100% 5222 Cockrell Hill Dallas, TX 1973 Manufacturing 4.79 96,506 100% 405-407 113th Arlington, TX 1969 Light Industrial 2.75 60,000 50% 816 111th Street Arlington, TX 1972 Light Industrial 2.89 65,000 100% 1017-25 Jacksboro Highway Fort Worth, TX 1970 Light Industrial 1.49 30,000 100% 7341 Dogwood Park Richland Hills, TX 1973 Light Industrial 1.09 20,000 100% 7427 Dogwood Park Richland Hills, TX 1973 Light Industrial 1.60 27,500 100% 7348-54 Tower Street Richland Hills, TX 1978 Light Industrial 1.09 20,063 50% 7370 Dogwood Park Richland Hills, TX 1987 Light Industrial 1.18 18,500 100% 7339-41 Tower Street Richland Hills, TX 1980 Light Industrial 0.95 17,600 100% 7437-45 Tower Street Richland Hills, TX 1977 Light Industrial 1.16 20,000 100% 7331-59 Airport Freeway Richland Hills, TX 1987 R&D/Flex 2.63 37,800 100% 7338-60 Dogwood Park Richland Hills, TX 1978 R&D/Flex 1.51 26,275 100% 7450-70 Dogwood Park Richland Hills, TX 1985 Light Industrial 0.88 18,000 100% 7423-49 Airport Freeway Richland Hills, TX 1985 R&D/Flex 2.39 33,812 80% 7400 Whitehall Street Richland Hills, TX 1994 Light Industrial 1.07 22,867 95% 1602-1654 Terre Colony Dallas, TX 1981 Bulk Warehouse 5.72 130,949 100% 3330 Duncanville Road Dallas, TX 1987 Reg. Warehouse 2.20 50,560 100% 2001 100th Street Grand Prairie, TX 1973/93 Reg. Warehouse 3.50 74,106 100% 6851-6909 Snowden Road Fort Worth, TX 1985/86 Bulk Warehouse 13.00 281,200 100% 2351-2355 Merritt Drive Garland, TX 1986 R&D/Flex 5.00 16,740 100% 10575 Vista Park Dallas, TX 1988 Reg. Warehouse 2.10 37,252 100% 701-735 North Plano Road Richardson, TX 1972/94 Bulk Warehouse 5.78 100,065 100% 2259 Merritt Drive Garland, TX 1986 R&D Flex 1.90 16,740 100% 2260 Merritt Drive Garland, TX 1986/99 Reg. Warehouse 3.70 62,847 100% 2220 Merritt Drive Garland, TX 1986/2000 Reg. Warehouse 3.90 70,936 100% 2010 Merritt Drive Garland, TX 1986 Reg. Warehouse 2.80 57,392 100% 2363 Merritt Drive Garland, TX 1986 R&D Flex 0.40 12,300 100% 2447 Merritt Drive Garland, TX 1986 R&D Flex 0.40 12,300 100% 2465-2475 Merritt Drive Garland, TX 1986 R&D Flex 0.50 16,740 100% 2485-2505 Merritt Drive Garland, TX 1986 Bulk Warehouse 5.70 108,550 100% 17919 Waterview Parkway Dallas, TX 1987 Reg. Warehouse 4.88 70,390 100% 4201 Highway 75 North Sherman, TX 1986 Bulk Warehouse 25.00 100,578 100% 2425 East Pioneer Drive Irving, TX 1987 Reg. Warehouse 6.60 94,618 100% 1350 Avenue South Grand Prairie, TX 1987 Bulk Warehouse 5.80 120,003 100% ---------- ------- SUBTOTAL OR AVERAGE 3,297,013 99% ---------- ------- DAYTON 6094-6104 Executive Huber Heights, OH 1975 Light Industrial 3.33 43,200 70% Boulevard 6202-6220 Executive Huber Heights, OH 1996 Light Industrial 3.79 64,000 100% Boulevard 6268-6294 Executive Huber Heights, OH 1989 Light Industrial 4.03 60,800 100% Boulevard 5749-5753 Executive Huber Heights, OH 1975 Light Industrial 1.15 12,000 100% Boulevard 6230-6266 Executive Huber Heights, OH 1979 Light Industrial 5.30 100% Boulevard 84,000 2200-2224 Sandridge Road Moraine, OH 1983 Light Industrial 2.96 58,746 100% 8119-8137 Uehling Lane Dayton, OH 1978 R&D/Flex 1.15 20,000 100% ---------- ------- SUBTOTAL OR 342,746 96% AVERAGE ---------- ------- DENVER 7100 North Broadway - Bldg. 1 Denver, CO 1978 Light Industrial 16.80 32,269 89% 7100 North Broadway - Bldg. 2 Denver, CO 1978 Light Industrial 16.90 32,500 96% 7100 North Broadway - Bldg. 3 Denver, CO 1978 Light Industrial 11.60 22,259 97% 7100 North Broadway - Bldg. 5 Denver, CO 1978 Light Industrial 15.00 28,789 100% 7100 North Broadway - Bldg. 6 Denver, CO 1978 Light Industrial 22.50 38,255 84% 20100 East 32nd Avenue Aurora, CO 1997 R&D/Flex 4.10 51,300 96% Parkway 15700 - 15820 West 6th Golden, CO 1978 Light Industrial 1.92 52,767 96% Avenue 15850-15884 West 6th Avenue Golden, CO 1978 Light Industrial 1.92 31,856 88% 5454 Washington Denver, CO 1985 Light Industrial 4.00 34,740 100% 525 East 70th Street Denver, CO 1985 Light Industrial 5.18 12,000 100% 565 East 70th Street Denver, CO 1985 Light Industrial 5.18 29,990 100% 605 East 70th Street Denver, CO 1985 Light Industrial 5.18 34,000 100% 625 East 70th Street Denver, CO 1985 Light Industrial 5.18 24,000 100% 665 East 70th Street Denver, CO 1985 Light Industrial 5.18 24,000 100% 700 West 48th Street Denver, CO 1984 Light Industrial 5.40 53,431 100% 702 West 48th Street Denver, CO 1984 Light Industrial 5.40 23,820 78% 800 East 73rd Denver, CO 1984 R&D/Flex 4.50 49,360 100% 850 East 73rd Denver, CO 1984 R&D/Flex 4.50 38,962 82%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ --------- ------------- ------- --- -------- DENVER (CONT.) 6425 North Washington Denver, CO 1983 R&D/Flex 4.05 82,120 90% 3370 North Peoria Street Aurora, CO 1978 R&D/Flex 1.64 25,520 78% 3390 North Peoria Street Aurora, CO 1978 R&D/Flex 1.46 22,699 100% 3508-3538 North Peoria Street Aurora, CO 1978 R&D/Flex 2.61 40,653 100% 3568 North Peoria Street Aurora, CO 1978 R&D/Flex 2.24 34,937 91% 4785 Elati Denver, CO 1972 Light Industrial 3.34 34,777 87% 4770 Fox Street Denver, CO 1972 Light Industrial 3.38 26,565 100% 1550 West Evans Denver, CO 1975 Light Industrial 3.92 78,788 96% 3751 - 71 Revere Street Denver, CO 1980 Reg. Warehouse 2.41 55,027 100% 3871 Revere Street Denver, CO 1980 Reg. Warehouse 3.19 75,265 100% 5454 Havana Street Denver, CO 1980 R&D/Flex 2.68 42,504 100% 5500 Havana Street Denver, CO 1980 R&D/Flex 2.19 34,776 100% 4570 Ivy Street Denver, CO 1985 Light Industrial 1.77 31,355 57% 5855 Stapleton Drive North Denver, CO 1985 Light Industrial 2.33 41,268 100% 5885 Stapleton Drive North Denver, CO 1985 Light Industrial 3.05 53,893 100% 5200-5280 North Broadway Denver, CO 1977 Light Industrial 1.54 31,780 100% 5977-5995 North Broadway Denver, CO 1978 Light Industrial 4.96 50,280 100% 2952-5978 North Broadway Denver, CO 1978 Light Industrial 7.91 88,977 100% 6400 North Broadway Denver, CO 1982 Light Industrial 4.51 69,430 100% 875 Parfet Street Lakewood, CO 1975 Light Industrial 3.06 49,216 100% 4721 Ironton Street Denver, CO 1969 R&D/Flex 2.84 51,260 100% 833 Parfet Street Lakewood, CO 1974 R&D/Flex 2.57 24,800 77% 11005 West 8th Avenue Lakewood, CO 1974 Light Industrial 2.57 25,672 100% 7100 North Broadway - 7 Denver, CO 1985 R&D/Flex 2.30 24,822 89% 7100 North Broadway - 8 Denver, CO 1985 R&D/Flex 2.30 9,107 77% 6804 East 48th Avenue Denver, CO 1973 R&D/Flex 2.23 46,464 100% 445 Bryant Street Denver, CO 1960 Light Industrial 6.31 292,472 83% East 47th Drive -A Denver, CO 1997 R&D/Flex 3.00 51,200 100% 7025 South Revere Parkway Denver, CO 1997 R&D/Flex 3.20 59,270 100% 9500 W. 49th Street - A Wheatridge, CO 1997 Light Industrial 1.74 19,217 100% 9500 W. 49th Street - B Wheatridge, CO 1997 Light Industrial 1.74 16,441 100% 9500 W. 49th Street - C Wheatridge, CO 1997 R&D/Flex 1.74 29,174 100% 9500 W. 49th Street - D Wheatridge, CO 1997 Light Industrial 1.74 41,615 46% 8100 South Park Way - A Littleton, CO 1997 R&D/Flex 3.33 52,581 100% 8100 South Park Way - B Littleton, CO 1984 R&D/Flex 0.78 12,204 100% 8100 South Park Way - C Littleton, CO 1984 Light Industrial 4.28 67,520 100% 451-591 East 124th Avenue Littleton, CO 1979 Light Industrial 4.96 59,711 100% 14100 East Jewell Aurora, CO 1980 R&D/Flex 3.67 58,553 95% 14190 East Jewell Aurora, CO 1980 R&D/Flex 1.84 29,442 100% 608 Garrison Street Lakewood, CO 1984 R&D/Flex 2.17 25,075 89% 610 Garrison Street Lakewood, CO 1984 R&D/Flex 2.17 24,965 61% 1111 West Evans (A&C) Denver, CO 1986 Light Industrial 2.00 36,894 100% 1111 West Evans (B) Denver, CO 1986 Light Industrial 0.50 4,725 100% 15000 West 6th Avenue Golden, CO 1985 R&D/Flex 5.25 69,279 100% 14998 West 6th Avenue Golden, CO 1995 R&D/Flex 2.29 42,832 100% Building E 14998 West 6th Avenue Englewood, CO 1995 R&D/Flex 2.29 20,424 100% Building F 12503 East Euclid Drive Denver, CO 1986 R&D/Flex 10.90 97,871 77% 6547 South Racine Circle Englewood, CO 1996 Light Industrial 3.92 59,918 100% 7800 East Iliff Avenue Denver, CO 1983 R&D/Flex 3.06 22,296 100% 2369 South Trenton Way Denver, CO 1983 R&D/Flex 4.80 33,108 100% 2370 South Trenton Way Denver, CO 1983 R&D/Flex 3.27 22,735 100% 2422 South Trenton Way Denver, CO 1983 R&D/Flex 3.94 27,413 100% 2452 South Trenton Way Denver, CO 1983 R&D/Flex 6.78 47,931 100% 651 Topeka Way Denver, CO 1985 R&D/Flex 4.53 24,000 100% 680 Atchinson Way Denver, CO 1985 R&D/Flex 4.53 24,000 83% 8122 South Park Lane - A Littleton, CO 1986 R&D/Flex 5.09 43,987 94% 8122 South Park Lane - B Littleton, CO 1986 Light Industrial 2.28 20,389 100% 1600 South Abilene Aurora, CO 1986 R&D/Flex 3.53 47,930 100% 1620 South Abilene Aurora, CO 1986 Light Industrial 2.04 27,666 100% 1640 South Abilene Aurora, CO 1986 Light Industrial 2.80 37,948 100% 13900 East Florida Avenue Aurora, CO 1986 R&D/Flex 1.44 19,493 100% 4301 South Federal Boulevard Englewood, CO 1997 Reg. Warehouse 2.80 35,381 100% 14401-14492 East 33rd Place Aurora, CO 1979 Bulk Warehouse 4.75 100,100 100% 11701 East 53rd Avenue Denver, CO 1985 Reg. Warehouse 4.19 81,981 100% 5401 Oswego Street Denver, CO 1985 Reg. Warehouse 2.80 53,838 100% 3811 Joliet Denver, CO 1977 R&D/Flex 14.24 124,290 100% 2630 West 2nd Avenue Denver, CO 1970 Light Industrial 0.50 8,260 100% 2650 West 2nd Avenue Denver, CO 1970 Light Industrial 2.80 36,081 100% 14818 West 6th Avenue Bldg. A Golden, CO 1985 R&D/Flex 2.54 39,776 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- DENVER (CONT.) 14828 West 6th Avenue Bldg. B Golden, CO 1985 R&D/Flex 2.54 41,805 91% 12055 E. 49th Ave/4955 Peoria Denver, CO 1984 R&D/Flex 3.09 49,575 100% 4940-4950 Paris Denver, CO 1984 R&D/Flex 1.58 25,290 100% 4970 Paris Denver, CO 1984 R&D/Flex 0.98 15,767 100% 5010 Paris Denver, CO 1984 R&D/Flex 0.92 14,822 100% 7367 South Revere Parkway Englewood, CO 1997 Bulk Warehouse 8.50 102,839 100% 10311 W. Hampden Avenue Lakewood, CO 1999 Light Industrial 4.40 52,183 57% 9195 6th Avenue Lakewood, CO 2000 Light Industrial 1.44 16,500 100% 8200 East Park Meadows Drive Lone Tree, CO 1984 R&D Flex 6.60 90,219 100% (i) 3250 Quentin (i) Aurora, CO 1984/2000 Light Industrial 8.90 144,464 100% ---------- ------- SUBTOTAL OR 4,369,703 95% AVERAGE ---------- ------- DES MOINES 1500 East Washington Avenue Des Moines, IA 1987 Bulk Warehouse 13.25 192,466 100% 1600 East Washington Avenue Des Moines, IA 1987 Bulk Warehouse 6.78 81,866 100% 4121 McDonald Avenue Des Moines, IA 1977 Bulk Warehouse 11.02 177,431 100% 4141 McDonald Avenue Des Moines, IA 1976 Bulk Warehouse 11.03 263,196 96% 4161 McDonald Avenue Des Moines, IA 1979 Bulk Warehouse 11.02 164,081 100% ---------- ------- SUBTOTAL OR 879,040 99% AVERAGE ---------- ------- DETROIT 238 Executive Drive Troy, MI 1973 Light Industrial 1.32 13,740 100% 256 Executive Drive Troy, MI 1974 Light Industrial 1.12 11,273 100% 301 Executive Drive Troy, MI 1974 Light Industrial 1.27 20,411 100% 449 Executive Drive Troy, MI 1975 Reg. Warehouse 2.12 33,001 100% 501 Executive Drive Troy, MI 1984 Light Industrial 1.57 18,061 100% 451 Robbins Drive Troy, MI 1975 Light Industrial 1.88 28,401 100% 700 Stephenson Highway Troy, MI 1978 R&D/Flex 3.13 29,344 100% 800 Stephenson Highway Troy, MI 1979 R&D/Flex 4.39 48,200 100% 1150 Stephenson Highway Troy, MI 1982 R&D/Flex 1.70 18,107 100% 1200 Stephenson Highway Troy, MI 1980 R&D/Flex 2.65 25,025 100% 1035 Crooks Road Troy, MI 1980 Light Industrial 1.74 23,320 100% 1095 Crooks Road Troy, MI 1986 R&D/Flex 2.83 35,042 100% 1416 Meijer Drive Troy, MI 1980 Light Industrial 1.20 17,944 100% 1624 Meijer Drive Troy, MI 1984 Light Industrial 3.42 44,040 100% 1972 Meijer Drive Troy, MI 1985 Reg. Warehouse 2.36 37,075 100% 2112 Meijer Drive Troy, MI 1980 Reg. Warehouse 4.12 34,558 100% 1621 Northwood Drive Troy, MI 1977 Bulk Warehouse 1.54 24,900 100% 1707 Northwood Drive Troy, MI 1983 Light Industrial 1.69 28,750 100% 1749 Northwood Drive Troy, MI 1977 Bulk Warehouse 1.69 26,125 100% 1788 Northwood Drive Troy, MI 1977 Light Industrial 1.55 12,480 100% 1821 Northwood Drive Troy, MI 1977 Reg. Warehouse 2.07 35,050 100% 1826 Northwood Drive Troy, MI 1977 Light Industrial 1.22 12,480 100% 1864 Northwood Drive Troy, MI 1977 Light Industrial 1.55 12,480 100% 1921 Northwood Drive Troy, MI 1977 Light Industrial 2.33 42,000 100% 2277 Elliott Avenue Troy, MI 1975 Light Industrial 0.96 12,612 100% 2451 Elliott Avenue Troy, MI 1974 Light Industrial 1.68 24,331 100% 2730 Research Drive Rochester 1988 Reg. Warehouse 3.52 57,850 100% Hills, MI 2791 Research Drive Rochester 1991 Reg. Warehouse 4.48 64,199 100% Hills, MI 2871 Research Drive Rochester 1991 Reg. Warehouse 3.55 49,543 100% Hills, MI 2911 Research Drive Rochester 1992 Reg. Warehouse 5.72 80,078 100% Hills, MI 3011 Research Drive Rochester 1988 Reg. Warehouse 2.55 32,637 100% Hills, MI 2870 Technology Drive Rochester 1988 Light Industrial 2.41 24,445 100% Hills, MI 2890 Technology Drive Rochester 1991 Light Industrial 1.76 24,410 100% Hills, MI 2900 Technology Drive Rochester 1992 Reg. Warehouse 2.15 31,047 100% Hills, MI 2920 Technology Drive Rochester 1992 Light Industrial 1.48 19,011 100% Hills, MI 2930 Technology Drive Rochester 1991 Light Industrial 1.41 17,994 100% Hills, MI 2950 Technology Drive Rochester 1991 Light Industrial 1.48 19,996 100% Hills, MI 2960 Technology Drive Rochester 1992 Reg. Warehouse 3.83 41,565 100% Hills, MI 23014 Commerce Drive Farmington 1983 R&D/Flex 0.65 7,200 100% Hills, MI 23028 Commerce Drive Farmington 1983 Light Industrial 1.26 20,265 100% Hills, MI 23035 Commerce Drive Farmington 1983 Light Industrial 1.23 15,200 100% Hills, MI 23042 Commerce Drive Farmington 1983 R&D/Flex 0.75 8,790 100% Hills, MI 23065 Commerce Drive Farmington 1983 Light Industrial 0.91 12,705 100% Hill, MI 23070 Commerce Drive Farmington 1983 R&D/Flex 1.43 16,765 100% Hills, MI 23079 Commerce Drive Farmington 1983 Light Industrial 0.85 10,830 100% Hills, MI 23093 Commerce Drive Farmington 1983 Reg. Warehouse 3.87 49,040 100% Hills, MI 23135 Commerce Drive Farmington 1986 Light Industrial 2.02 23,969 100% Hills, MI 23163 Commerce Drive Farmington 1986 Light Industrial 1.51 19,020 100% Hills, MI 23177 Commerce Drive Farmington 1986 Light Industrial 2.29 32,127 100% Hills, MI 23206 Commerce Drive Farmington 1985 Light Industrial 1.30 19,822 100% Hills, MI 23290 Commerce Drive Farmington 1980 Reg. Warehouse 2.56 42,930 100% Hills, MI
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ --------- ------------- ------- --- -------- DETROIT (CONT.) 23370 Commerce Drive Farmington 1980 Light Industrial 0.67 8,741 100% Hills, MI 21477 Bridge Street Southfield, MI 1986 Light Industrial 3.10 41,500 80% 32450 N. Avis Drive Madison Heights, 1974 Light Industrial 3.23 55,820 100% MI 32200 N. Avis Drive Madison Heights, 1973 Light Industrial 6.15 88,700 100% MI 11813 Hubbard Livonia, MI 1979 Light Industrial 1.95 33,300 100% 11866 Hubbard Livonia, MI 1979 Light Industrial 2.32 41,380 100% 12050-12300 Hubbard (i) Livonia, MI 1981 Light Industrial 6.10 85,086 88% 38200 Plymouth Livonia, MI 1997 Bulk Warehouse 11.43 140,365 100% 38220 Plymouth Livonia, MI 1988 Bulk Warehouse 13.14 145,232 100% 38300 Plymouth Livonia, MI 1997 Bulk Warehouse 6.95 127,800 100% 12707 Eckles Road Plymouth, MI 1990 Light Industrial 2.62 42,300 100% 9300-9328 Harrison Rd. Romulus, MI 1978 Light Industrial 2.53 29,286 88% 9330-9358 Harrison Rd. Romulus, MI 1978 Light Industrial 2.53 29,280 100% 28420-28448 Highland Rd Romulus, MI 1979 Light Industrial 2.53 29,280 100% 28450-28478 Highland Rd Romulus, MI 1979 Light Industrial 2.53 29,340 100% 28421-28449 Highland Rd Romulus, MI 1980 Light Industrial 2.53 29,285 100% 28451-28479 Highland Rd Romulus, MI 1980 Light Industrial 2.53 29,280 63% 28825-28909 Highland Rd Romulus, MI 1981 Light Industrial 2.53 29,284 100% 28933-29017 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 63% 28824-28908 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 100% 28932-29016 Highland Rd Romulus, MI 1982 Light Industrial 2.53 29,280 100% 9710-9734 Harrison Road Romulus, MI 1987 Light Industrial 2.22 25,925 100% 9740-9772 Harrison Road Romulus, MI 1987 Light Industrial 2.53 29,548 100% 9840-9868 Harrison Road Romulus, MI 1987 Light Industrial 2.53 29,280 100% 9800-9824 Harrison Road Romulus, MI 1987 Light Industrial 2.22 25,620 100% 29265-29285 Airport Drive Romulus, MI 1983 Light Industrial 2.05 23,707 58% 29185-29225 Airport Drive Romulus, MI 1983 Light Industrial 3.17 36,658 100% 29149-29165 Airport Drive Romulus, MI 1984 Light Industrial 2.89 33,440 100% 29101-29115 Airport Drive Romulus, MI 1985 R&D/Flex 2.53 29,287 50% 29031-29045 Airport Drive Romulus, MI 1985 Light Industrial 2.53 29,280 100% 29050-29062 Airport Drive Romulus, MI 1986 Light Industrial 2.22 25,837 100% 29120-29134 Airport Drive Romulus, MI 1986 Light Industrial 2.53 29,282 75% 29200-29214 Airport Drive Romulus, MI 1985 Light Industrial 2.53 29,282 100% 9301-9339 Middlebelt Road Romulus, MI 1983 R&D/Flex 1.29 15,173 100% 26980 Trolley Industrial Taylor, MI 1997 Bulk Warehouse 5.43 100% Drive 102,400 28055 S. Wick Road Romulus, MI 1989 Light Industrial 6.79 42,060 100% 12050-12200 Farmington Road Livonia, MI 1973 Light Industrial 1.34 25,470 57% 33200 Capitol Avenue Livonia, MI 1977 Light Industrial 2.16 40,000 100% 32975 Capitol Avenue Livonia, MI 1978 R&D/Flex 0.99 18,465 100% 2725 S. Industrial Highway Ann Arbor, MI 1997 Light Industrial 2.63 37,875 100% 32920 Capitol Avenue Livonia, MI 1973 Reg. Warehouse 0.47 8,000 100% 32940 Capitol Avenue Livonia, MI 1971 Light Industrial 0.45 8,480 0% 11862 Brookfield Avenue Livonia, MI 1972 Light Industrial 0.92 14,600 0% 11923 Brookfield Avenue Livonia, MI 1973 Light Industrial 0.76 14,600 100% 11965 Brookfield Avenue Livonia, MI 1973 Light Industrial 0.88 14,600 100% 34005 Schoolcraft Road Livonia, MI 1981 Light Industrial 1.70 26,100 100% 13405 Stark Road Livonia, MI 1980 Light Industrial 0.65 9,750 100% 1170 Chicago Road Troy, MI 1983 Light Industrial 1.73 21,500 100% 1200 Chicago Road Troy, MI 1984 Light Industrial 1.73 26,210 100% 450 Robbins Drive Troy, MI 1976 Light Industrial 1.38 19,050 100% 556 Robbins Drive Troy, MI 1974 Light Industrial 0.63 8,760 100% 1230 Chicago Road Troy, MI 1996 Reg. Warehouse 2.10 30,120 100% 12886 Westmore Avenue Livonia, MI 1981 Light Industrial 1.01 18,000 0% 12898 Westmore Avenue Livonia, MI 1981 Light Industrial 1.01 18,000 100% 33025 Industrial Road Livonia, MI 1980 Light Industrial 1.02 6,250 100% 2002 Stephenson Highway Troy, MI 1986 R&D/Flex 1.42 21,850 100% 47711 Clipper Street Plymouth Twsp, MI 1996 Reg. Warehouse 2.27 36,926 100% 32975 Industrial Road Livonia, MI 1984 Light Industrial 1.19 21,000 100% 32985 Industrial Road Livonia, MI 1985 Light Industrial 0.85 12,040 100% 32995 Industrial Road Livonia, MI 1983 Light Industrial 1.11 14,280 100% 12874 Westmore Avenue Livonia, MI 1984 Light Industrial 1.01 16,000 100% 33067 Industrial Road Livonia, MI 1984 Light Industrial 1.11 18,640 100% 1775 Bellingham Troy, MI 1987 R&D/Flex 1.88 28,900 100% 1785 East Maple Troy, MI 1985 Light Industrial 0.80 10,200 100% 1807 East Maple Troy, MI 1984 R&D/Flex 2.15 28,100 100% 9800 Chicago Road Troy, MI 1985 Light Industrial 1.09 14,280 100% 1840 Enterprise Drive Rochester Hills, MI 1990 R&D/Flex 2.42 33,240 100% 1885 Enterprise Drive Rochester Hills, MI 1990 Light Industrial 1.47 19,604 100% 1935-55 Enterprise Drive Rochester Hills, MI 1990 R&D/Flex 4.54 53,400 100% 5500 Enterprise Court Warren, MI 1989 R&D/Flex 3.93 53,900 100% 5800 Enterprise Court Warren, MI 1987 Manufacturing 1.48 17,240 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ --------- ------------- ------- --- -------- DETROIT (CONT.) 750 Chicago Road Troy, MI 1986 Light Industrial 1.54 26,709 100% 800 Chicago Road Troy, MI 1985 Light Industrial 1.48 24,340 100% 850 Chicago Road Troy, MI 1984 Light Industrial 0.97 16,049 100% 2805 S. Industrial Highway Ann Arbor, MI 1990 R&D/Flex 1.70 24,458 100% 6833 Center Drive Sterling Heights, MI 1998 Reg. Warehouse 4.42 66,132 100% 22731 Newman Street Dearborn, MI 1985 R&D/Flex 2.31 48,000 100% 32201 North Avis Drive Madison Heights, MI 1974 R&D/Flex 4.19 50,000 100% 1100 East Mandoline Road Madison Heights, MI 1967 Bulk Warehouse 8.19 117,903 100% 30081 Stephenson Highway Madison Heights, MI 1967 Light Industrial 2.50 50,750 100% 1120 John A. Papalas Drive(j) Lincoln Park, MI 1985 Light Industrial 10.30 120,410 100% 36555 Ecorse Romulus, MI 1998 Bulk Warehouse 18.00 268,800 100% 6340 Middlebelt Romulus, MI 1998 Light Industrial 11.03 77,508 100% 4872 S. Lapeer Road Lake Orion Twsp, MI 1999 Bulk Warehouse 9.58 125,605 100% 775 James L. Hart Parkway Ypsilanti, MI 1999 Reg. Warehouse 7.65 55,535 100% 1400 Allen Drive Troy, MI 1979 Reg. Warehouse 1.98 27,280 100% 1408 Allen Drive Troy, MI 1979 Light Industrial 1.44 19,704 100% 1305 Stephenson Hwy Troy, MI 1979 Reg. Warehouse 3.42 47,000 100% 32505 Industrial Drive Madison Heights, MI 1979 Light Industrial 3.07 47,013 100% 1799-1813 Northfield Drive(i) Rochester Hills, MI 1980 Light Industrial 4.22 67,360 80% ---------- ------- SUBTOTAL OR AVERAGE 5,066,052 97% ---------- ------- GRAND RAPIDS 2 84th Street SW Byron Center, MI 1986 Light Industrial 3.01 30,000 100% 100 84th Street SW Byron Center, MI 1979 Light Industrial 4.20 81,000 100% 511 76th Street SW Grand Rapids, MI 1986 Bulk Warehouse 14.44 202,500 95% 553 76th Street SW Grand Rapids, MI 1985 R&D/Flex 1.16 10,000 100% 555 76th Street SW Grand Rapids, MI 1987 Bulk Warehouse 12.50 200,000 100% 2935 Walkent Court NW Grand Rapids, MI 1991 Light Industrial 6.13 64,961 100% 3300 Kraft Avenue SE Grand Rapids, MI 1987 Bulk Warehouse 11.57 200,000 100% 3366 Kraft Avenue SE Grand Rapids, MI 1987 Bulk Warehouse 12.35 200,000 100% 5001 Kendrick Court SE Grand Rapids, MI 1983 Light Industrial 4.00 61,500 100% 5050 Kendrick Court SE Grand Rapids, MI 1988 Manufacturing 26.94 413,500 100% 5015 52nd Street SE Grand Rapids, MI 1987 Light Industrial 4.11 61,250 100% 5025 28th Street Grand Rapids, MI 1967 Light Industrial 3.97 14,400 100% 5079 33rd Street SE Grand Rapids, MI 1990 Bulk Warehouse 6.74 109,875 100% 5333 33rd Street SE Grand Rapids, MI 1991 Bulk Warehouse 8.09 101,250 100% 5130 Patterson Ave Grand Rapids, MI 1987 Light Industrial 6.57 30,000 100% 3395 Kraft Avenue Grand Rapids, MI 1985 Light Industrial 3.70 42,600 100% 3427 Kraft Avenue Grand Rapids, MI 1985 Light Industrial 2.40 32,600 100% ---------- ------- SUBTOTAL OR 1,855,436 100% AVERAGE ---------- ------- HOUSTON 2102-2314 Edwards Street Houston, TX 1961 Bulk Warehouse 5.02 115,248 100% 4545 Eastpark Drive Houston, TX 1972 Reg. Warehouse 3.80 81,295 0% 3351 Rauch Street Houston, TX 1970 Reg. Warehouse 4.04 82,500 100% 3851 Yale Street Houston, TX 1971 Bulk Warehouse 5.77 132,554 100% 3337-3347 Rauch Street Houston, TX 1970 Reg. Warehouse 2.29 53,425 100% 8505 North Loop East Houston, TX 1981 Bulk Warehouse 4.99 107,769 100% 4749-4799 Eastpark Dr. Houston, TX 1979 Bulk Warehouse 7.75 182,563 93% 4851 Homestead Road Houston, TX 1973 Bulk Warehouse 3.63 142,250 100% 3365-3385 Rauch Street Houston, TX 1970 Reg. Warehouse 3.31 82,140 100% 5050 Campbell Road Houston, TX 1970 Bulk Warehouse 6.10 121,875 84% 4300 Pine Timbers Houston, TX 1980 Bulk Warehouse 4.76 113,400 100% 10600 Hampstead Houston, TX 1974 Light Industrial 1.26 19,063 100% 2300 Fairway Park Drive Houston, TX 1974 Light Industrial 1.25 19,008 100% 7901 Blankenship Houston, TX 1972 Light Industrial 2.17 48,000 100% 2500-2530 Fairway Park Houston, TX 1974 Bulk Warehouse 8.72 213,638 100% 6550 Longpointe Houston, TX 1980 Bulk Warehouse 4.13 97,700 100% 1815 Turning Basin Drive Houston, TX 1980 Bulk Warehouse 6.34 139,630 100% 1819 Turning Basin Drive Houston, TX 1980 Light Industrial 2.85 65,494 100% 4545 Mossford Drive Houston, TX 1975 Reg. Warehouse 3.56 66,565 100% 1805 Turning Basin Drive Houston, TX 1980 Bulk Warehouse 7.60 155,250 100% 7000 Empire Drive Houston, TX (e) 1980 R&D/Flex 6.25 95,073 96% 9777 West Gulfbank Drive Houston, TX (e) 1980 Light Industrial 15.45 252,242 82% 9835 A Genard Road Houston, TX 1980 Bulk Warehouse 39.20 417,350 100% 9835 B Genard Road Houston, TX 1980 Reg. Warehouse 6.40 66,600 100% 16134 West Hardy Houston, TX 1984 Light Industrial 3.60 34,177 92% 16216 West Hardy Houston, TX 1984 Light Industrial 3.12 29,631 100% 10161 Harwin Drive Houston, TX 1979/1981 R&D/Flex 5.27 73,052 100% 10165 Harwin Drive Houston, TX 1979/1981 R&D/Flex 2.31 31,987 100% 10175 Harwin Drive Houston, TX 1979/1981 Light Industrial 2.85 39,475 64% 100 Donwick The Woodlands, TX 1982 Bilk Warehouse 15.85 251,850 100% ---------- ------- SUBTOTAL OR AVERAGE 3,330,804 95% ---------- -------
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ --------- ------------- ------- --- -------- INDIANAPOLIS 2400 North Shadeland Indianapolis, IN 1970 Reg. Warehouse 2.45 40,000 100% 2402 North Shadeland Indianapolis, IN 1970 Bulk Warehouse 7.55 121,539 94% 7901 West 21st Street Indianapolis, IN 1985 Bulk Warehouse 12.00 353,000 100% 1445 Brookville Way Indianapolis, IN (a) 1989 Bulk Warehouse 8.79 115,200 100% 1440 Brookville Way Indianapolis, IN (a) 1990 Bulk Warehouse 9.64 166,400 100% 1240 Brookville Way Indianapolis, IN (a) 1990 Light Industrial 3.50 63,000 100% 1220 Brookville Way Indianapolis, IN (a) 1990 R&D/Flex 2.10 10,000 100% 1345 Brookville Way Indianapolis, IN (b) 1992 Bulk Warehouse 5.50 132,000 100% 1350 Brookville Way Indianapolis, IN (a) 1994 Reg. Warehouse 2.87 38,460 100% 1341 Sadlier Circle East Indianapolis, IN (b) 1971/1992 Light Industrial 2.03 32,400 100% Drive 1322-1438 Sadlier Circle Indianapolis, IN (b) 1971/1992 Light Industrial 3.79 36,000 87% East Dr 1327-1441 Sadlier Circle Indianapolis, IN (b) 1992 Light Industrial 5.50 54,000 80% East Dr 1304 Sadlier Circle East Indianapolis, IN (b) 1971/1992 Reg. Warehouse 2.42 17,600 100% Drive 1402 Sadlier Circle East Indianapolis, IN (b) 1970/1992 Light Industrial 4.13 40,800 88% Drive 1504 Sadlier Circle East Indianapolis, IN (b) 1971/1992 Manufacturing 4.14 54,000 100% Drive 1311 Sadlier Circle East Indianapolis, IN (b) 1971/1992 R&D/Flex 1.78 13,200 100% Drive 1365 Sadlier Circle East Indianapolis, IN (b) 1971/1992 Light Industrial 2.16 30,000 100% Drive 1352-1354 Sadlier Circle E. Indianapolis, IN (b) 1970/1992 Light Industrial 3.50 44,000 100% Drive 1335 Sadlier Circle East Indianapolis, IN (b) 1971/1992 R&D/Flex 1.20 20,000 100% Drive 1327 Sadlier Circle East Indianapolis, IN (b) 1971/1992 Reg. Warehouse 1.20 12,800 100% Drive 1425 Sadlier Circle East Indianapolis, IN (b) 1971/1992 R&D/Flex 2.49 5,000 100% Drive 1230 Brookville Way Indianapolis, IN (a) 1995 Reg. Warehouse 1.96 15,000 100% 6951 East 30th Street Indianapolis, IN 1995 Light Industrial 3.81 44,000 100% 6701 East 30th Street Indianapolis, IN 1995 Light Industrial 3.00 7,820 100% 6737 East 30th Street Indianapolis, IN 1995 Reg. Warehouse 11.01 87,500 100% 1225 Brookville Way Indianapolis, IN 1997 Light Industrial 1.00 10,000 100% 6555 East 30th Street Indianapolis, IN 1969/1981 Bulk Warehouse 22.00 331,826 45% 2432-2436 Shadeland Indianapolis, IN 1968 Light Industrial 4.57 70,560 94% 8402-8440 East 33rd Street Indianapolis, IN 1977 Light Industrial 4.70 55,200 78% 8520-8630 East 33rd Street Indianapolis, IN 1976 Light Industrial 5.30 81,000 72% 8710-8768 East 33rd Street Indianapolis, IN 1979 Light Industrial 4.70 43,200 70% 3316-3346 North Pagosa Court Indianapolis, IN 1977 Light Industrial 5.10 81,000 72% 3331 Raton Court Indianapolis, IN 1979 Light Industrial 2.80 35,000 100% 6751 East 30th Street Indianapolis, IN 1997 Bulk Warehouse 6.34 100,000 100% 9210 East 146th Street Noblesville, IN 1978 Reg. Warehouse 11.91 23,950 0% 5902 Decatur Blvd Indianapolis, IN 2000 Bulk Warehouse 26.50 389,660 100% ---------- ------ SUBTOTAL OR AVERAGE 2,775,115 89% ---------- ------ LONG ISLAND 10 Edison Street Amityville, NY 1971 Light Industrial 1.40 34,400 100% 100 Lauman Lane Hicksville, NY 1968 Reg. Warehouse 1.90 36,880 100% 35 Bloomingdale Road Hicksville, NY 1962 Light Industrial 1.40 31,950 89% 15-39 Tec Street Hicksville, NY 1965 Light Industrial 1.10 17,350 100% 100 Tec Street Hicksville, NY 1965 Light Industrial 1.20 25,000 48% 51-89 Tec Street Hicksville, NY 1965 Light Industrial 1.20 21,741 100% 502 Old Country Road Hicksville, NY 1965 Light Industrial 0.50 10,000 100% 80-98 Tec Street Hicksville, NY 1965 Light Industrial 0.75 13,025 100% 201-233 Park Avenue Hicksville, NY 1962 Light Industrial 1.70 36,787 100% 160 Engineers Drive Hicksville, NY 1966 Light Industrial 1.90 29,500 100% 260 Engineers Drive Hicksville, NY 1966 Light Industrial 2.80 52,380 100% 87-119 Engineers Drive (i) Hicksville, NY 1966 Light Industrial 1.70 36,400 100% 950-970 South Broadway Hicksville, NY 1966 Light Industrial 2.65 55,889 93% 62 Alpha Plaza Hicksville, NY 1968 Light Industrial 2.64 34,600 100% 90 Alpha Plaza Hicksville, NY 1969 Light Industrial 1.36 34,962 100% ---------- ------ SUBTOTAL OR AVERAGE 470,864 96% ---------- ------ LOS ANGELES 5220 Fourth Street Irwindale,CA 2000 Light Industrial 1.28 28,800 89% 15705 Arrow Highway Irwindale,CA 1987 Light Industrial 0.75 16,792 87% 15709 Arrow Highway Irwindale,CA 1987 Light Industrial 1.10 24,000 100% 6407-6419 Alondra Blvd. Paramount, CA 1985 Light Industrial 0.90 16,392 100% 6423-6431 Alondra Blvd. Paramount, CA 1985 Light Industrial 0.76 13,765 68% ---------- ------ SUBTOTAL OR AVERAGE 99,749 90% ---------- ------ LOUISVILLE 9001 Cane Run Road Louisville, KY 1998 Bulk Warehouse 39.60 212,500 100% 9101 Cane Run Road Louisville, KY 2000 Bulk Warehouse 14.00 231,000 100% ---------- ------ SUBTOTAL OR AVERAGE 443,500 100% ---------- ------ MILWAUKEE 6523 N. Sydney Place Glendale, WI 1978 Light Industrial 4.00 43,440 100% 8800 W. Bradley Milwaukee, WI 1982 Light Industrial 8.00 77,621 100% 1435 North 113th Street Wauwatosa, WI 1993 Light Industrial 4.69 51,950 100% 11217-43 W. Becher Street West Allis, WI 1979 Light Industrial 1.74 29,099 100%
23 24
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ----------- ------------- ------- --- -------- MILWAUKEE 2152 S. 114th Street West Allis, WI 1980 Light Industrial 3.30 63,716 100% 4560 North 124th Street Wauwatosa, WI 1976 Light Industrial 1.31 25,000 100% 12221 West Feerick Street Wauwatosa, WI 1971 Reg. Warehouse 1.90 39,800 100% 4410 80 North 132nd Street Butler, WI 1999 Bulk Warehouse 4.90 100,000 80% ---------- ------ ------ SUBTOTAL OR AVERAGE 430,626 95% ---------- ------ MINNEAPOLIS/ST. PAUL 6507-6545 Cecilia Circle Bloomington, MN 1980 Manufacturing 9.65 74,118 100% 1275 Corporate Center Drive Eagan, MN 1990 Light Industrial 1.50 19,675 100% 1279 Corporate Center Drive Eagan, MN 1990 Light Industrial 1.50 19,792 100% 2815 Eagandale Boulevard Eagan, MN 1990 Light Industrial 2.20 29,106 100% 6201 West 111th Street Bloomington, MN 1987 Bulk Warehouse 37.00 424,866 100% 6403-6545 Cecilia Drive Bloomington, MN 1980 Light Industrial 9.65 87,198 100% 6925-6943 Washington Avenue Edina, MN 1972 Manufacturing 2.75 37,625 100% 6955-6973 Washington Avenue Edina, MN 1972 Manufacturing 2.25 31,189 100% 7251-7267 Washington Avenue Edina, MN 1972 Light Industrial 1.82 26,250 100% 7301-7325 Washington Avenue Edina, MN 1972 Light Industrial 1.92 27,297 100% 7101 Winnetka Avenue North Brooklyn Park, MN 1990 Bulk Warehouse 14.18 252,978 100% 7600 Golden Triangle Drive Eden Prairie, MN 1989 R&D/Flex 6.79 74,148 100% 9901 West 74th Street Eden Prairie, MN 1983/88 Reg. Warehouse 8.86 150,000 42% 11201 Hampshire Avenue South Bloomington, MN 1986 Manufacturing 5.90 60,480 100% 12220-12222 Nicollet Avenue Burnsville, MN 1989/90 Light Industrial 1.80 17,116 67% 12250-12268 Nicollet Avenue Burnsville, MN 1989/90 Light Industrial 4.30 42,465 91% 12224-12226 Nicollet Avenue Burnsville, MN 1989/90 R&D/Flex 2.40 23,607 78% 305 2nd Street Northwest New Brighton, MN 1991 Light Industrial 5.43 62,293 100% 980 Lone Oak Road Eagan, MN 1992 Reg. Warehouse 11.40 154,950 74% 990 Lone Oak Road Eagan, MN 1989 Reg. Warehouse 11.41 153,608 100% 1030 Lone Oak Road Eagan, MN 1988 Light Industrial 6.30 83,076 90% 1060 Lone Oak Road Eagan, MN 1988 Light Industrial 6.50 82,728 73% 5400 Nathan Lane Plymouth, MN 1990 Light Industrial 5.70 72,089 100% 6464 Sycamore Court Maple Grove, MN 1990 Manufacturing 6.40 79,702 100% 10120 W. 76th Street Eden Prairie, MN 1987 Light Industrial 4.52 57,798 100% 7615 Golden Triangle Eden Prairie, MN 1987 Light Industrial 4.61 52,816 99% 7625 Golden Triangle Drive Eden Prairie, MN 1987 Light Industrial 4.61 73,125 81% 2605 Fernbrook Lane North Plymouth, MN 1987 R&D/Flex 6.37 80,766 100% 12155 Nicollet Avenue Burnsville, MN 1995 Reg. Warehouse 5.80 48,000 100% 73rd Avenue North Brooklyn Park, MN 1995 R&D/Flex 4.46 59,782 100% 1905 W. Country Road C Roseville, MN 1993 R&D/Flex 4.60 47,735 100% 2720 Arthur Street Roseville, MN 1995 R&D/Flex 6.06 74,337 100% 10205 51st Avenue North Plymouth, MN 1990 Reg. Warehouse 2.00 30,476 100% 4100 Peavey Road Chaska, MN 1988 Manufacturing 8.27 78,029 71% 11300 Hampshire Ave. South Bloomington, MN 1983 Bulk Warehouse 9.94 145,210 100% 375 Rivertown Drive Woodbury, MN 1996 Bulk Warehouse 11.33 251,968 100% 5205 Highway 169 Plymouth, MN 1960 Light Industrial 7.92 98,844 85% 6451-6595 Citywest Parkway Eden Prairie, MN 1984 R&D/Flex 6.98 82,769 100% 7100-7190 Shady Oak Road (j) Eden Prairie, MN 1982 Light Industrial 14.44 187,777 100% 7500-7546 Washington Square Eden Prairie, MN 1975 Light Industrial 5.40 46,200 95% 7550-7558 Washington Square Eden Prairie, MN 1975 Light Industrial 2.70 29,739 100% 5240-5300 Valley Industrial Shakopee, MN 1973 Light Industrial 9.06 80,001 64% Blvd S 1565 First Avenue NW New Brighton, MN 1978 Manufacturing 8.87 112,083 100% 7125 Northland Terrace Brooklyn Park, MN 1996 R&D/Flex 5.89 79,958 100% 6900 Shady Oak Road Eden Prairie, MN 1980 R&D/Flex 4.60 49,190 100% 6477-6525 City West Parkway Eden Prairie, MN 1984 R&D/Flex 7.00 89,456 100% 1157 Valley Park Drive Shakopee, MN 1997 Bulk Warehouse 9.97 126,014 100% 500-530 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 4.47 85,442 80% 770-786 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 3.16 56,388 100% 800 Kasota Avenue SE Minneapolis, MN 1976 Manufacturing 4.10 100,250 100% 2530-2570 Kasota Avenue St. Paul, MN 1976 Manufacturing 4.56 75,426 100% 504 Malcolm Ave. SE Minneapolis, MN 1999 Bulk Warehouse 7.50 143,066 100% 1150 Gateway Drive Shakopee, MN 1999 Bulk Warehouse 9.75 153,454 100% 5555 12th Avenue East Shakopee, MN 2000 Bulk Warehouse 7.81 128,593 87% ---------- ------ SUBTOTAL OR AVERAGE 4,811,048 94% ---------- ------ NASHVILLE 417 Harding Industrial Drive Nashville, TN 1972 Bulk Warehouse 13.70 207,440 100% 3099 Barry Drive Portland, TN 1995 Manufacturing 6.20 109,058 57% 3150 Barry Drive Portland, TN 1993 Bulk Warehouse 26.32 268,253 100% 5599 Highway 31 West Portland, TN 1995 Bulk Warehouse 20.00 161,500 100% 1650 Elm Hill Pike Nashville, TN 1984 Light Industrial 3.46 41,228 83% 1821 Air Lane Drive Nashville, TN 1984 Light Industrial 2.54 25,300 100% 1102 Appleton Drive Nashville, TN 1984 Light Industrial 1.73 28,022 100% 1920 Air Lane Drive Nashville, TN 1985 Light Industrial 3.19 49,922 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- --------- --- -------- NASHVILLE (CONT.) 1931 Air Lane Drive Nashville, TN 1984 Light Industrial 10.11 87,549 92% 470 Metroplex Drive (i) Nashville, TN 1986 Light Industrial 8.11 102,040 84% 1150 Antiock Pike Nashville, TN 1987 Bulk Warehouse 9.83 146,055 100% 1630 Corporate Place La Vergne, TN 1973 Bulk Warehouse 7.60 122,000 100% 4640 Cummings Park Nashville, TN 1986 Bulk Warehouse 14.69 100,000 100% 211 Nesbitt North Nashville, TN 1983 Bulk Warehouse 6.12 135,625 100% 211 Nesbitt South Nashville, TN 1983 Bulk Warehouse 6.10 135,925 100% 211 Nesbitt West Nashville, TN 1985 Bulk Warehouse 3.05 67,500 100% ---------- ------ SUBTOTAL OR AVERAGE 1,787,417 96% ---------- ------ NEW ORLEANS 520-524 Elmwood Park Blvd.(i) Jefferson, LA 1986 Light Industrial 5.32 102,209 92% 125 Mallard St. St. Rose, LA (d) 1984 R&D/Flex 1.38 23,436 100% 107 Mallard St. Rose, LA (d) 1985 Light Industrial 1.48 23,436 100% 125 James Drive West St. Rose, LA (d) 1990 Light Industrial 3.30 38,692 100% 161 James Drive West St. Rose, LA 1986 Light Industrial 2.80 47,474 100% 150 James Drive East St. Rose, LA 1986 Light Industrial 3.60 49,275 85% 115 James Drive West St. Rose, LA (d) 1986 Light Industrial 2.07 21,408 100% 100 James Drive St. Rose, LA (d) 1980 R&D/Flex 6.66 43,055 100% 143 Mallard St. St. Rose, LA (d) 1982 Light Industrial 1.48 23,436 100% 160 James Drive East St. Rose, LA (d) 1981 R&D/Flex 3.66 25,772 100% 190 James Drive East St. Rose, LA (d) 1987 Light Industrial 4.47 36,357 79% 120 Mallard St. St. Rose, LA (d) 1981 R&D/Flex 3.41 53,520 94% 110 James Drive West St. Rose, LA (d) 1983 R&D/Flex 1.57 24,018 100% 150 Canvasback Drive St. Rose, LA 1986 Reg. Warehouse 2.80 40,500 100% 150 Teal Street St. Rose, LA 1999 Light Industrial 3.33 53,544 100% ---------- ------ SUBTOTAL OR AVERAGE 606,132 96% ---------- ------ NORTHERN NEW JERSEY 60 Ethel Road West Piscataway, NJ 1982 Light Industrial 3.93 42,802 63% 70 Ethel Road West Piscataway, NJ 1979 Light Industrial 3.78 62,000 81% 140 Hanover Avenue Hanover, NJ 1964/1988 R&D/Flex 2.95 24,905 100% 601-629 Montrose Avenue South Plainfield, NJ 1974 Light Industrial 5.83 75,000 100% 3 Marlen Hamilton, NJ 1981 Light Industrial 1.11 13,174 100% 5 Marlen Hamilton, NJ 1981 Light Industrial 1.56 21,000 100% 7 Marlen Hamilton, NJ 1982 Light Industrial 2.05 28,400 100% 8 Marlen Hamilton, NJ 1982 Reg. Warehouse 4.36 60,001 100% 15 Marlen Hamilton, NJ 1982 Light Industrial 1.19 13,562 100% 17 Marlen Hamilton, NJ 1981 Light Industrial 1.32 20,065 100% 1 South Gold Drive Hamilton, NJ 1973 Light Industrial 1.50 20,009 95% 5 South Gold Drive Hamilton, NJ 1974 Light Industrial 1.97 24,000 100% 7 South Gold Drive Hamilton, NJ 1976 Light Industrial 1.00 10,220 100% 8 South Gold Drive Hamilton, NJ 1977 Light Industrial 1.14 16,907 100% 9 South Gold Drive Hamilton, NJ 1980 Light Industrial 1.00 13,583 100% 11 South Gold Drive Hamilton, NJ 1979 Light Industrial 1.97 33,114 100% 12 South Gold Drive Hamilton, NJ 1980 Light Industrial 1.29 20,240 100% 9 Princess Road Lawrenceville, NJ 1985 R&D/Flex 2.36 24,375 100% 11 Princess Road Lawrenceville, NJ 1985 R&D/Flex 5.33 55,000 100% 15 Princess Road Lawrenceville, NJ 1986 R&D/Flex 2.00 20,625 100% 17 Princess Road Lawrenceville, NJ 1986 R&D/Flex 1.82 18,750 100% 220 Hanover Avenue Hanover, NJ 1987 Bulk Warehouse 29.27 158,242 100% 244 Shefield Street Mountainside, NJ 1965/1986 Light Industrial 2.20 23,430 100% 30 Troy Road Hanover, NJ 1972 Light Industrial 1.31 17,500 100% 15 Leslie Court Hanover, NJ 1971 Light Industrial 3.08 18,000 100% 20 Leslie Court Hanover, NJ 1974 Light Industrial 1.38 17,997 100% 25 Leslie Court Hanover, NJ 1975 Light Industrial 1.30 70,800 100% 130 Algonquin Parkway Hanover, NJ 1973 Light Industrial 5.50 29,008 100% 150 Algonquin Parkway Hanover, NJ 1973 Light Industrial 2.47 17,531 100% 55 Locust Avenue Roseland, NJ 1980 Reg. Warehouse 13.63 79,750 100% 31 West Forest Street (i) Englewood, NJ 1978 Light Industrial 6.00 110,000 100% 25 World's Fair Drive Franklin, NJ 1986 R&D/Flex 1.81 20,000 0% 14 World's Fair Drive Franklin, NJ 1980 R&D/Flex 4.53 60,000 92% 16 World's Fair Drive Franklin, NJ 1981 Light Industrial 3.62 43,400 100% 18 World's Fair Drive Franklin, NJ 1982 R&D/Flex 1.06 12,809 100% 23 World's Fair Drive Franklin, NJ 1982 Light Industrial 1.20 16,000 100% 12 World's Fair Drive Franklin, NJ 1981 Light Industrial 3.85 65,000 96% 49 Napoleon Court Franklin, NJ 1982 Light Industrial 2.06 32,500 100% 50 Napoleon Court Franklin, NJ 1982 Light Industrial 1.52 20,158 100% 22 World's Fair Drive Franklin, NJ 1983 Light Industrial 3.52 50,000 100% 26 World's Fair Drive Franklin, NJ 1984 Light Industrial 3.41 47,000 100% 24 World's Fair Drive Franklin, NJ 1984 Light Industrial 3.45 47,000 100%
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LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- NORTHERN NEW JERSEY (CONT.) 12 Wright Way Oakland, NJ 1981 Reg. Warehouse 6.52 52,402 100% 155 Pierce Street Sumerset, NJ 1999 R&D/Flex 4.84 46,000 78% 20 World's Fair Drive Lot 13 Sumerset, NJ 1999 R&D/Flex 4.25 30,000 67% 10 New Maple Road Pine Brook, NJ 1973/1999 Bulk Warehouse 18.13 265,376 100% 60 Chapin Road Pine Brook, NJ 1977/2000 Bulk Warehouse 13.61 258,240 100% 45 Route 46 Pine Brook, NJ 1974/1987 Light Industrial 6.54 83,830 81% 43 Route 46 Pine Brook, NJ 1974/1987 Light Industrial 2.48 35,629 87% 39 Route 46 Pine Brook, NJ 1970 R&D/Flex 1.64 22,014 80% 26 Chapin Road Pine Brook, NJ 1983 Light Industrial 5.15 75,623 83% 30 Chapin Road Pine Brook, NJ 1983 Light Industrial 5.15 75,633 89% 20 Hook Mountain Road Pine Brook, NJ 1972/1984 Bulk Warehouse 14.02 213,940 98% 30 Hook Mountain Road Pine Brook, NJ 1972/1987 Light Industrial 3.36 51,264 73% 55 Route 46 Pine Brook, NJ 1978/1994 R&D/Flex 2.13 24,051 100% 16 Chapin Road Pine Brook, NJ 1987 R&D/Flex 4.61 67,795 92% 20 Chapin Road Pine Brook, NJ 1987 R&D/Flex 5.69 83,748 100% ---------- ------- SUBTOTAL OR AVERAGE 2,959,402 94% ---------- ------- PHOENIX 4655 Mc Dowell Phoenix, AZ 2000 Light Industrial 3.97 58,285 79% 1045 South Edward Drive Tempe, AZ 1976 Light Industrial 2.12 38,560 100% ---------- ------- SUBTOTAL OR AVERAGE 96,845 87% ---------- ------- PORTLAND 5687 International Way (k) Milwaukee, OR (h) 1974 Light Industrial 3.71 52,080 80% 5795 SW Jean Road (j) Lake Oswego, OR 1985 Light Industrial 3.02 37,352 100% 12130 NE Ainsworth Circle (i) Portland, OR 1986 R&D/Flex 4.39 53,021 77% 5509 NW 122nd Ave (i) Milwaukee, OR (g) 1995 Light Industrial 2.51 26,850 100% 6105-6113 NE 92nd Avenue (k) Portland, OR 1978 Light Industrial 7.42 145,250 100% 8727 NE Marx Drive (j) Portland, OR 1987 Light Industrial 6.59 111,000 59% 3388 SE 20th Street Portland, OR 1981 Light Industrial 0.25 11,810 100% 5962-5964 NE 87th Avenue Portland, OR 1979 Light Industrial 1.28 14,000 100% 116 SE Yamhill Portland, OR 1974 Light Industrial 0.23 7,500 100% 9106 NE Marx Drive Portland, OR 1969 Light Industrial 0.53 7,500 100% 11620 NE Ainsworth Circle Portland, OR 1992 Light Industrial 1.55 10,000 100% 11824 NE Ainsworth Circle Portland, OR 1992 Light Industrial 2.13 20,812 27% 12124 NE Ainsworth Circle Portland, OR 1984 Light Industrial 2.52 29,040 100% 2715 SE Raymond Portland, OR 1971 Light Industrial 1.28 35,000 100% 1645 NE 72nd Avenue Portland, OR 1972 Light Industrial 0.73 21,600 100% 1630 SE 8th Avenue Portland, OR 1968 Light Industrial 0.92 5,000 100% 9044 NE Marx Drive Portland, OR 1986 Light Industrial 0.35 19,500 100% 2443 SE 4th Avenue Portland, OR 1964 Light Industrial 0.76 27,128 100% 711 SE Stark Street Portland, OR 1972 Light Industrial 0.23 8,000 100% 11632 NE Ainsworth Circle Portland, OR 1990 Light Industrial 9.63 124,610 98% 14699 NE Airport Way Portland, OR 1998 Light Industrial 4.75 20,000 100% ---------- ------- SUBTOTAL OR AVERAGE 787,053 88% ---------- ------- SALT LAKE CITY 2255 South 300 West (n) Salt Lake City, UT 1980 Light Industrial 4.56 103,018 100% 512 Lawndale Drive (o) Salt Lake City, UT 1981 Light Industrial 35.00 395,638 79% 1270 West 2320 South West Valley, UT 1986 R&D/Flex 1.49 13,025 58% 1275 West 2240 South West Valley, UT 1986 R&D/Flex 2.06 38,227 100% 1288 West 2240 South West Valley, UT 1986 R&D/Flex 0.97 13,300 60% 2235 South 1300 West West Valley, UT 1986 Light Industrial 1.22 19,000 54% 1293 West 2200 South West Valley, UT 1986 R&D/Flex 0.86 13,300 45% 1279 West 2200 South West Valley, UT 1986 R&D/Flex 0.91 13,300 100% 1272 West 2240 South West Valley, UT 1986 Light Industrial 3.07 34,870 36% 1149 West 2240 South West Valley, UT 1986 Light Industrial 1.71 21,250 100% 1142 West 2320 South West Valley, UT 1987 Light Industrial 1.52 17,500 83% 1152 West 2240 South West Valley, UT 1999 R&D/Flex 13.56 55,785 100% ---------- ------- SUBTOTAL OR AVERAGE 738,213 82% ---------- ------- SOUTHERN NEW JERSEY 2-5 North Olnev Ave. Cherry Hill, NJ 1963 Light Industrial 2.10 58,139 100% 2 Springdale Road Cherry Hill, NJ 1968 Light Industrial 1.44 21,008 92% 4 Springdale Road (i) Cherry Hill, NJ 1963 Light Industrial 3.02 58,189 100% 6 Springdale Road Cherry Hill, NJ 1964 Light Industrial 1.44 23,037 100% 8 Springdale Road Cherry Hill, NJ 1966 Light Industrial 3.02 45,054 59% 12 Springdale Road Cherry Hill, NJ 1965 Light Industrial 3.40 49,259 75% 1 Esterbrook Lane Cherry Hill, NJ 1965 Light Industrial 1.71 8,610 100% 16 Springdale Road Cherry Hill, NJ 1967 Light Industrial 5.30 48,922 100% 5 Esterbrook Lane Cherry Hill, NJ 1966 Reg. Warehouse 5.45 39,167 100% 2 Pin Oak Lane Cherry Hill, NJ 1968 Light Industrial 4.45 51,230 100% 6 Esterbrook Lane Cherry Hill, NJ 1966 Light Industrial 3.96 32,914 100% 3 Computer Drive Cherry Hill, NJ 1966 Bulk Warehouse 11.40 181,000 67% 28 Springdale Road Cherry Hill, NJ 1967 Light Industrial 2.93 38,949 100%
26 27
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- SOUTHERN NEW JERSEY 3 Esterbrook Lane Cherry Hill, NJ 1968 Light Industrial 2.15 32,844 100% 4 Esterbrook Lane Cherry Hill, NJ 1969 Light Industrial 3.42 39,266 100% 26 Springdale Road Cherry Hill, NJ 1968 Light Industrial 3.25 31,652 93% 1 Keystone Ave. Cherry Hill, NJ 1969 Light Industrial 4.15 60,983 90% 1919 Springdale Road Cherry Hill, NJ 1970 Light Industrial 5.13 49,300 100% 21 Olnev Ave. Cherry Hill, NJ 1969 Manufacturing 1.75 22,738 100% 19 Olnev Ave. Cherry Hill, NJ 1971 Light Industrial 4.36 53,962 73% 2 Keystone Ave. Cherry Hill, NJ 1970 Light Industrial 3.47 50,922 91% 18 Olnev Ave. Cherry Hill, NJ 1974 Light Industrial 8.85 62,542 100% 22 Springdale Road Cherry Hill, NJ 1977 Light Industrial 6.24 88,872 75% 1998 Springdale Road Cherry Hill, NJ 1971 Light Industrial 0.95 14,000 100% 55 Carnegie Drive Cherry Hill, NJ 1988 Reg. Warehouse 15.20 90,804 100% 57 Carnegie Drive Cherry Hill, NJ 1987 Bulk Warehouse 13.70 142,750 100% 111 Whittendale Drive Morrestown, NJ 1991/1996 Reg. Warehouse 5.00 79,329 100% ---------- ------- SUBTOTAL OR AVERAGE 1,475,442 90% ---------- ------- ST. LOUIS 2121 Chapin Industrial Drive Vinita Park, MO 1969/87 Bulk Warehouse 23.40 281,105 100% 1200 Andes Boulevard Olivette, MO 1967 Light Industrial 2.77 66,600 100% 2462-2470 Schuetz Road St. Louis, MO 1965 Light Industrial 2.28 43,868 100% 10431-10449 Midwest Industrial Olivette, MO 1967 Light Industrial 2.40 55,125 100% 10751 Midwest Industrial Blvd. Olivette, MO 1965 Light Industrial 1.70 44,100 100% 11652-11666 Fairgrove Industrial St. Louis, MO 1966 Light Industrial 1.92 31,500 100% 11674-11688 Fairgrove Industrial St. Louis, MO 1967 Light Industrial 1.53 31,500 100% 2337 Centerline Drive Maryland Heights, MO 1967 Light Industrial 3.46 75,600 100% 6951 N. Hanley (i) Hazelwood, MO 1965 Bulk Warehouse 9.50 129,614 100% 4560 Anglum Road Hazelwood, MO 1970 Light Industrial 2.60 35,114 100% 2760 South 1st Street St. Louis, MO 1997 Bulk Warehouse 11.00 178,800 100% ---------- ------- SUBTOTAL OR AVERAGE 972,926 100% ---------- ------- TAMPA 6614 Adamo Drive Tampa, FL 1967 Reg. Warehouse 2.78 41,377 100% 202 Kelsey Tampa, FL 1989 Bulk Warehouse 6.30 112,000 100% 6202 Benjamin Road Tampa, FL 1981 R&D/Flex 2.04 29,845 100% 6204 Benjamin Road Tampa, FL 1982 Light Industrial 4.16 60,975 100% 6206 Benjamin Road Tampa, FL 1983 Light Industrial 3.94 57,708 100% 6302 Benjamin Road Tampa, FL 1983 R&D/Flex 2.03 29,747 91% 6304 Benjamin Road Tampa, FL 1984 R&D/Flex 2.04 29,845 100% 6306 Benjamin Road Tampa, FL 1984 Light Industrial 2.58 37,861 100% 6308 Benjamin Road Tampa, FL 1984 Light Industrial 3.22 47,256 80% 5313 Johns Road Tampa, FL 1991 R&D/Flex 1.36 25,690 100% 5602 Thompson Center Court Tampa, FL 1972 R&D/Flex 1.39 14,914 100% 5411 Johns Road Tampa, FL 1997 Light Industrial 1.98 30,204 100% 5525 Johns Road Tampa, FL 1993 R&D/Flex 1.46 24,139 100% 5607 Johns Road Tampa, FL 1991 R&D/Flex 1.34 13,500 100% 5709 Johns Road Tampa, FL 1990 Light Industrial 1.80 25,480 44% 5711 Johns Road Tampa, FL 1990 Light Industrial 1.80 25,455 100% 4410 East Adamo Drive Tampa, FL 1990 Bulk Warehouse 5.60 101,744 100% 4420 East Adamo Drive Tampa, FL 1990 Reg. Warehouse 1.40 26,650 100% 4430 East Adamo Drive Tampa, FL 1987 Reg. Warehouse 3.75 64,551 100% 4440 East Adamo Drive Tampa, FL 1988 Reg. Warehouse 3.75 64,800 100% 4450 East Adamo Drive Tampa, FL 1969 Reg. Warehouse 4.00 46,462 48% 5453 West Waters Avenue Tampa, FL 1987 R&D/Flex 0.66 7,200 100% 5455 West Waters Avenue Tampa, FL 1987 R&D/Flex 2.97 32,424 100% 5553 West Waters Avenue Tampa, FL 1987 Light Industrial 2.97 32,424 100% 5501 West Waters Avenue Tampa, FL 1990 R&D/Flex 1.53 15,870 100% 5503 West Waters Avenue Tampa, FL 1990 R&D/Flex 0.68 7,060 16% 5555 West Waters Avenue Tampa, FL 1990 R&D/Flex 2.31 23,947 100% 5557 West Waters Avenue Tampa, FL 1990 R&D/Flex 0.57 5,860 100% 5903 Johns Road Tampa, FL 1987 Light Industrial 1.20 11,600 100% 4107 North Himes Avenue Tampa, FL 1990 R&D/Flex 1.86 25,522 100% 5461 W. Waters Avenue Tampa, FL 1998 Light Industrial 1.84 21,778 100% 10040 18th Street North Tampa, FL 1998 Reg. Warehouse 5.15 82,469 76% 5471 W. Waters Avenue Tampa, FL 1999 R&D/Flex 2.00 23,778 100% 5505 Johns Road #7 Tampa, FL 1999 Light Industrial 2.12 30,019 100% 8110 Anderson Road Tampa, FL 1999 Light Industrial 7.40 100,000 80% 8130 Anderson Road Tampa, FL 1999 Reg. Warehouse 5.30 72,000 65% 5481 W. Waters Avenue Tampa, FL 1999 R&D/Flex 3.60 41,861 100% 5483 W. Waters Avenue Tampa, FL 1999 R&D/Flex 2.92 33,861 100% 6702-6712 Benjamin Road (m) Tampa, FL 1982 Light Industrial 9.20 107,540 93% 5905 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 1.67 18,720 100% 5907 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 0.53 5,980 100% 5909 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 1.60 18,000 100%
27 28
LOCATION YEAR BUILT LAND AREA OCCUPANCY AT BUILDING ADDRESS CITY/STATE ENCUMBRANCES -RENOVATED BUILDING TYPE (ACRES) GLA 12/31/00 ---------------- ---------- ------------ ---------- ------------- ------- --- -------- TAMPA (CONT.) 5911 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 2.70 30,397 100% 5910 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 4.77 53,591 95% 5912 Breckenridge Parkway Tampa, FL 1982 R&D/Flex 4.70 52,806 98% ---------- ------- SUBTOTAL OR AVERAGE 1,764,910 93% ---------- ------- OTHER 2800 Airport Road (l) Denton, TX 1968 Manufacturing 29.91 222,403 100% 3501 Maple Street Abilene, TX 1980 Manufacturing 34.42 123,700 100% 4200 West Harry Street (j) Wichita, KS 1972 Bulk Warehouse 21.45 177,655 100% Industrial Park No. 2 West Lebanon, NH 1968 Bulk Warehouse 10.27 156,200 100% 2675 Valley View Drive Shreveport, LA 1997 Bulk Warehouse 12.00 250,000 100% 6601 S. 33rd Street McAllen, TX 1975 Reg. Warehouse 3.31 50,000 100% ---------- ------- SUBTOTAL OR AVERAGE 979,958 100% ---------- ------- TOTAL 55,615,111 95% ========== =======
(a) These properties collateralize a $34.0 million mortgage loan which matures on April 1, 2003. (b) These properties collateralize a $8.0 million mortgage loan which matures on January 1, 2013. (c) This property collateralizes a $3.3 million mortgage loan which matures on August 1, 2008. (d) These properties collateralize a $7.4 million mortgage loan which matures on April 1, 2006. (e) These properties collateralize a $3.2 million mortgage loan which matures on June 1, 2003. (f) This property collateralizes a $2.4 million mortgage loan which matures on October 1, 2006. (g) These properties collateralize a $.9 million mortgage loan which matures on November 1, 2006. (h) These properties collateralize a $1.3 million mortgage loan which matures on March 15, 2002. (i) Comprised of two properties. (j) Comprised of three properties. (k) Comprised of four properties. (l) Comprised of five properties. (m) Comprised of six properties. (n) Comprised of seven properties. (o) Comprised of 29 properties. 28 29 TENANT AND LEASE INFORMATION The Consolidated Operating Partnership has a diverse base of more than 2,600 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and five years and provide for periodic rental increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property's operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2000, approximately 95% of the GLA of the Consolidated Operating Partnership's properties was leased, and no single tenant or group of related tenants accounted for more than 1.0% of the Consolidated Operating Partnership's rent revenues, nor did any single tenant or group of related tenants occupy more than 1.3% of the Consolidated Operating Partnership's total GLA as of December 31, 2000. The following table shows scheduled lease expirations for all leases for the Consolidated Operating Partnership's properties as of December 31, 2000.
ANNUAL BASE RENT NUMBER OF PERCENTAGE OF UNDER EXPIRING PERCENTAGE OF TOTAL YEAR OF LEASES GLA GLA LEASES ANNUAL BASE RENT EXPIRATION (1) EXPIRING EXPIRING (2) EXPIRING (IN THOUSANDS) EXPIRING (2) -------------- ------------ --------------- ---------------- -------------------- --------------------- 2001 766 11,893,217 22.5% $ 51,802 21.0% 2002 602 9,597,715 18.2% 46,271 18.8% 2003 571 9,078,566 17.2% 45,509 18.4% 2004 301 6,660,414 12.6% 30,382 12.3% 2005 296 6,451,237 12.2% 32,319 13.1% 2006 63 2,074,293 3.9% 9,285 3.8% 2007 45 3,185,368 6.0% 13,044 5.3% 2008 19 826,845 1.6% 3,720 1.5% 2009 26 1,086,854 2.1% 5,107 2.1% 2010 19 1,040,388 2.0% 4,469 1.8% Thereafter 17 917,062 1.7% 4,845 1.9% ------------ --------------- --------------- -------------------- --------------------- Total 2,725 52,811,959 100.0% $ 246,753 100.0% ============ =============== =============== ==================== =====================
(1) Lease expirations as of December 31, 2000 assuming tenants do not exercise existing renewal, termination, or purchase options. (2) Does not include existing vacancies of 2,803,152 aggregate square feet. The Other Real Estate Partnerships have a diverse base of more than 200 tenants engaged in a wide variety of businesses including manufacturing, retail, wholesale trade, distribution and professional services. Most leases have an initial term of between three and five years and provide for periodic rental increases that are either fixed or based on changes in the Consumer Price Index. Industrial tenants typically have net or semi-net leases and pay as additional rent their percentage of the property's operating costs, including the costs of common area maintenance, property taxes and insurance. As of December 31, 2000, approximately 97% of the GLA of the Other Real Estate Partnerships' properties was leased, and no single tenant or group of related tenants accounted for more than 7.2% of the Other Real Estate Partnerships' rent revenues, nor did any single tenant or group of related tenants occupy more than 5.3% of the Other Real Estate Partnerships' total GLA as of December 31, 2000. 29 30 The following table shows scheduled lease expirations for all leases for the Other Real Estate Partnerships' properties as of December 31, 2000.
ANNUAL BASE RENT NUMBER OF PERCENTAGE OF UNDER EXPIRING PERCENTAGE OF TOTAL YEAR OF LEASES GLA GLA LEASES ANNUAL BASE RENT EXPIRATION (1) EXPIRING EXPIRING (2) EXPIRING (IN THOUSANDS) EXPIRING (2) -------------- ------------ --------------- ---------------- -------------------- --------------------- 2001 57 2,377,709 19.5% $ 8,413 17.2% 2002 33 1,189,285 9.7% 5,057 10.3% 2003 2,226,183 18.2% 9,038 18.4% 42 2004 35 1,888,907 15.5% 7,993 16.3% 2005 22 1,352,603 11.1% 5,910 12.1% 2006 441,236 3.6% 1,810 3.7% 9 2007 581,397 4.8% 1,572 3.2% 7 2008 4 591,786 4.8% 2,827 5.8% 2009 5 940,985 7.7% 3,277 6.7% 2010 4 148,003 1.2% 878 1.8% Thereafter 4 468,000 3.9% 2,231 4.5% ------------ --------------- --------------- -------------------- --------------------- Total 222 12,206,094 100.0% $ 49,006 100.0% ============ =============== =============== ==================== =====================
- -------------- (1) Lease expirations as of December 31, 2000 assuming tenants do not exercise existing renewal, termination, or purchase options. (2) Does not include existing vacancies of 421,508 aggregate square feet. ITEM 3. LEGAL PROCEEDINGS The Consolidated Operating Partnership is involved in legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material impact on the results of operations, financial position or liquidity of the Consolidated Operating Partnership. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None 30 31 PART II ITEM 5. MARKET FOR REGISTRANT'S PARTNERS' CAPITAL AND RELATED PARTNER MATTERS There is no established public trading market for the general partner and limited partner units and the Preferred Units. As of March 23, 2001, there were 397 holders of record of general partner and limited partner units ("Unit") and one holder of record (the Company) of Preferred Units. Beginning with the third quarter of 1994, the Operating Partnership has made consecutive quarterly distributions to its partners with respect to general partner and limited partner units since the initial public offering of the Company in June 1994. The Operating Partnership has made consecutive quarterly distributions to the Company with respect to Preferred Units since the issuance of each such Preferred Units. The current indicated annual distribution rate with respect to general partner and limited partner units is $2.63 per unit ($.6575 per Unit per quarter). The annual distribution rate with respect to Preferred Units is $218.75000 per Series B Preferred Unit ($54.68750 per Series B Preferred Unit per quarter), $215.624000 per Series C Preferred Unit ($53.90600 per Series C Preferred Unit per quarter), $198.75000 per Series D Preferred Unit ($49.68750 per Series D Preferred Unit per quarter) and $197.50000 per Series E Preferred Unit ($49.375000 per Series E Preferred Unit per quarter). The Operating Partnership's ability to make distributions depends on a number of factors, including its net cash provided by operating activities, capital commitments and debt repayment schedules. Holders of general partner and limited partner units are entitled to receive distributions when, as and if declared by the Board of Directors of the Company, its general partner, after the priority distributions required under the Operating Partnership's partnership agreement have been made with respect to Preferred Units, out of any funds legally available for that purpose. The following table sets forth the distributions per Unit paid or declared by the Operating Partnership during the periods noted: Distribution Quarter Ended Declared ------------- -------- December 31, 2000.................... $.6575 September 30, 2000................... .6200 June 30, 2000........................ .6200 March 31, 2000....................... .6200 December 31, 1999.................... .6200 September 30, 1999................... .6000 June 30, 1999........................ .6000 March 31, 1999....................... .6000 In 1998, the Operating Partnership issued an aggregate of 1,515,983 Units having an aggregate value of $49.4 million in exchange for property. In 1999, the Operating Partnership issued an aggregate of 173,070 Units having an aggregate value of $4.3 million in exchange for property. In 2000, the Operating Partnership issued an aggregate of 114,715 Units having an aggregate value of $3.5 million in exchange for property. All of the above Units were issued in private placements in reliance on Section 4 (2) of the Securities Act of 1933, as amended, including Regulation D promulgated thereunder, to individuals or entities holding real property or interests therein. No underwriters were used in connection with such issuances. Subject to lock-up periods and certain adjustments, Units are convertible into common stock, par value $.01, of the Company on a one-for-one basis or cash at the option of the Company. 31 32 ITEM 6. SELECTED FINANCIAL DATA The following sets forth selected financial and operating data for the Consolidated Operating Partnership on a historical basis. The following data should be read in conjunction with the financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this Form 10-K/A No. 1. The historical statements of operations for the years ended December 31, 2000, 1999, 1998, 1997 and 1996 include the results of operations of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership's audited financial statements. The historical balance sheet data and other data as of December 31, 2000, 1999, 1998, 1997 and 1996 include the balances of the Consolidated Operating Partnership as derived from the Consolidated Operating Partnership's audited financial statements. In the opinion of management, the selected financial data includes all adjustments necessary to present fairly the information set forth therein. 32 33
------------------------------------------------------------------------------- YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96 ----------- ------------ ------------ ------------ ----------- (IN THOUSANDS, EXCEPT PER UNIT, RATIO AND PROPERTY DATA) STATEMENTS OF OPERATIONS DATA: Total Revenues ...................... $ 321,220 $ 314,365 $ 293,386 $ 98,566 $ 37,587 Property Expenses ................... (93,188) (85,326) (85,773) (29,183) (9,935) General & Administrative Expense .... (16,971) (12,961) (12,919) (5,820) (4,014) Interest Expense .................... (80,885) (76,799) (68,862) (25,099) (4,685) Amortization of Interest Rate Protection Agreements and Deferred Financing Costs ......... (1,683) (1,295) (851) (369) (196) Depreciation & Other Amortization ... (55,558) (57,927) (54,209) (15,873) (6,310) Valuation Provision on Real Estate Held For Sale (a) ............. (2,169) --- --- --- --- Restructuring Charge (b) ............ --- --- (6,858) --- --- Equity in Income of Other Real Estate Partnerships .............. 33,049 45,714 27,583 31,297 20,130 Equity in Income of Joint Ventures .. 571 302 45 --- --- Disposition of Interest Rate Protection Agreements (c) ........ --- --- (8,475) 4,038 --- Gain on Sales of Real Estate ........ 25,430 11,904 2,931 728 4,344 ------------ ------------ ------------ ------------ ------------ Income Before Extraordinary Loss and Cumulative Effect of Change in Accounting Principle ... 129,816 137,977 85,998 58,285 36,921 Extraordinary Loss (d) .............. --- --- --- (4,666) (2,273) Cumulative Effect of Change in Accounting Principle (e) .......... --- --- (719) --- --- ------------ ------------ ------------ ------------ ------------ Net Income .......................... 129,816 137,977 85,279 53,619 34,648 Preferred Unit Distributions ....... (28,924) (28,924) (26,691) (7,936) --- ------------ ------------ ------------ ------------ ------------ Net Income Available to Unitholders $ 100,892 $ 109,053 $ 58,588 $ 45,683 $ 34,648 ============ ============ ============ ============ ============ Net Income Available to Unitholders Before Extraordinary Loss and Cumulative Effect of Change in Accounting Principle Per Unit: Basic ...................... $ 2.20 $ 2.41 $ 1.34 $ 1.41 $ 1.38 ============ ============ ============ ============ ============ Diluted .................... $ 2.19 $ 2.40 $ 1.34 $ 1.40 $ 1.38 ============ ============ ============ ============ ============ Net Income Available to Unitholders Per Unit: Basic ...................... $ 2.20 $ 2.41 $ 1.33 $ 1.28 $ 1.29 ============ ============ ============ ============ ============ Diluted .................... $ 2.19 $ 2.40 $ 1.32 $ 1.27 $ 1.29 ============ ============ ============ ============ ============ Distributions Per Unit .............. $ 2.5175 $ 2.42 $ 2.19 $ 2.045 $ 1.9675 ============ ============ ============ ============ ============ Weighted Average Number of Units Outstanding: Basic ..................... 45,928 45,271 44,100 35,682 26,763 ============ ============ ============ ============ ============ Diluted .................... 46,184 45,373 44,283 35,987 26,849 ============ ============ ============ ============ ============ BALANCE SHEET DATA (END OF PERIOD): Real Estate, Before Accumulated Depreciation ................ $ 2,020,552 $ 2,131,434 $ 2,133,465 $ 1,201,060 $ 353,781 Real Estate, After Accumulated Depreciation ................ 1,838,072 1,952,141 1,988,030 1,178,741 345,648 Real Estate Held For Sale, Net ....... 190,379 --- --- --- --- Investment in and Advances to Other Real Estate Partnerships .... 381,231 380,774 368,364 643,621 258,411 Total Assets ......................... 2,539,407 2,443,987 2,470,661 1,870,183 622,122 Mortgage Loans Payable, Net, Acquisition Facilities Payable and Senior Unsecured Debt, Net ....... 1,180,023 1,105,747 1,149,460 839,592 59,897 Total Liabilities .................... 1,329,576 1,228,637 1,261,102 904,006 86,890 Partners' Capital .................... 1,209,831 1,215,350 1,209,559 966,177 535,232 OTHER DATA: Cash Flows From Operating Activities $ 151,889 $ 183,533 $ 147,902 $ 62,057 $ 18,871 Cash Flows From Investing Activities (85,152) (15,798) (538,395) (1,084,002) (202,673) Cash Flows From Financing Activities (63,115) (181,659) 399,444 1,022,645 181,604 Total Properties (f) ................ 865 868 886 521 137 Total GLA in sq. ft (f) ............. 55,615,111 54,788,585 57,403,413 34,259,042 12,650,986 Occupancy % (f) ..................... 95% 96% 95% 94% 97%
33 34 (a) Represents a valuation provision on real estate held for sale on the Consolidated Operating Partnership's exit portfolio in Grand Rapids, MI. (b) Represents a restructuring charge relating to severance costs, of which approximately $1.2 million is non-cash relating to immediate vesting of restricted units. (c) On May 16, 1997, the Consolidated Operating Partnership, through the Operating Partnership, sold interest rate protection agreements relating to its $300.0 million mortgage loan resulting in a gain of approximately $4.0 million. The $8.5 million loss on disposition of interest rate protection agreements for the year ended December 31, 1998 represents the Consolidated Operating Partnership's, through the Operating Partnership, settlement of its remaining interest rate protection agreement that was scheduled to expire on January 4, 1999. This agreement was entered into in December 1997 in anticipation of 1998 senior unsecured debt offerings. Due to the changing market conditions and the Consolidated Operating Partnership's expectation that it would not issue debt securities associated with the interest rate protection agreement, the Consolidated Operating Partnership, through the Operating Partnership, settled its position in the interest rate protection agreement. (d) In 1996, the Consolidated Operating Partnership, through the Operating Partnership, terminated certain revolving credit facilities. The Consolidated Operating Partnership recorded an extraordinary loss of $2.3 million which is comprised of the write-off of unamortized deferred financing fees, legal costs and other expenses. In 1997, the Consolidated Operating Partnership, through the Operating Partnership, terminated an unsecured loan and a revolving credit facility. The Consolidated Operating Partnership recorded an extraordinary loss of $4.7 million which is comprised of the write-off of unamortized deferred financing fees, legal costs and other expenses. (e) In April 1998, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5 requires that the net unamortized balance of all start-up costs and organizational costs be written off as a cumulative effect of a change in accounting principle and all future start-up costs and organizational costs be expensed. Consistent with SOP 98-5, the Consolidated Operating Partnership has reported a cumulative effect of a change in accounting principle in the amount of approximately $.7 million to reflect the write-off of the unamortized balance of organizational costs on the Consolidated Operating Partnership's balance sheet. (f) As of end of period and excludes properties under development. 34 35 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with "Selected Financial and Operating Data" and the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-K/A No. 1. 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 is First Industrial Realty Trust, Inc. (the "Company") with an approximate 84.3% ownership interest at December 31, 2000. The Company also owns a preferred general partnership interest in the Operating Partnership ("Preferred Units") with an aggregate liquidation priority of $350.0 million. The Company is a real estate investment trust ("REIT") as defined in the Internal Revenue Code. The Company's operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 15.7% interest in the Operating Partnership at December 31, 2000. The Operating Partnership is the sole member of several limited liability companies (the "L.L.C.s") and the majority economic shareholder of FR Development Services, Inc., and holds at least a 99% limited partnership interest (subject in one case as described below to a preferred limited partnership interest) in First Industrial Financing Partnership, L.P. (the "Financing Partnership"), First Industrial Securities, L.P. (the "Securities Partnership"), First Industrial Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial Pennsylvania, L.P. (the "Pennsylvania Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg Partnership"), First Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD., and First Industrial Development Services, L.P. (together, the "Other Real Estate Partnerships"). The Operating Partnership, through separate wholly-owned limited liability companies in which it is the sole member, also owns 10% equity interests in, and provides asset and property management services to, two joint ventures which invest in industrial properties. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The general partner of the Securities Partnership, First Industrial Securities Corporation, also owns a preferred limited partnership interest in the Securities Partnership which entitles it to receive a fixed quarterly distribution, and results in it being allocated income in the same amount, equal to the fixed quarterly dividend the Company pays on its 9.5%, $.01 par value, Series A Cumulative Preferred Stock. The financial statements of the Operating Partnership report the L.L.C.s and FR Development Services, Inc. on a consolidated basis (hereinafter defined as the "Consolidated Operating Partnership") and the Other Real Estate Partnerships and two joint ventures are accounted for under the equity method of accounting. The minority ownership interest in FR Development Services, Inc. is not reflected in the consolidated financial statements due to its immateriality. Profits, losses and distributions of the Operating Partnership, the L.L.C. and the Other Real Estate Partnerships are allocated to the general partner and the limited partners, or members, as applicable, in accordance with the provisions contained within the partnership agreements or operating agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships. As of December 31, 2000, the Consolidated Operating Partnership owned 865 in-service industrial properties, containing an aggregate of approximately 55.6 million square feet of gross leasable area ("GLA"). On a combined basis, as of December 31, 2000, the Other Real Estate Partnerships owned 104 in-service industrial properties, containing an aggregate of approximately 12.6 million square feet of GLA. Of the 104 industrial properties owned by the Other Real Estate Partnerships at December 31, 2000, 22 are held by the Financing Partnership, 22 are held by the Securities Partnership, 22 are held by the Mortgage Partnership, 24 are held by the Pennsylvania Partnership, six are held by the Harrisburg Partnership, six are held by the Indianapolis Partnership, one is held by First Industrial Development Services, L.P. and one is held by TK-SV, LTD. RESULTS OF OPERATIONS COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO YEAR ENDED DECEMBER 31, 1999 At December 31, 2000, the Consolidated Operating Partnership owned 865 in-service properties with approximately 55.6 million square feet of GLA, compared to 868 in-service properties with approximately 54.8 million 35 36 square feet of GLA at December 31, 1999. During 2000, the Consolidated Operating Partnership acquired 82 in-service properties containing approximately 5.6 million square feet of GLA and one property under redevelopment, completed development of 20 properties and redevelopment of one property totaling approximately 3.6 million square feet of GLA and sold 104 in-service properties totaling approximately 8.5 million square feet of GLA, one out of service property and several land parcels. The Consolidated Operating Partnership also took three properties out of service that are under redevelopment, comprising approximately .1 million square feet of GLA and placed in service one property comprising approximately .2 million square feet of GLA. Rental income and tenant recoveries and other income increased by approximately $6.9 million or 2.2%. The increase in rental income is primarily due to same store growth. The increase in tenant recoveries and other income is primarily due to an increase in property expenses as discussed below. Rental income and tenant recoveries and other income from properties owned prior to January 1, 1999 increased by approximately $8.2 million or 3.5% due primarily to general rent increases and an increase in recoverable income due to an increase in property expenses as discussed below. Property expenses, which include real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses increased by approximately $7.9 million or 9.2% due primarily to increases in all property expense categories. The increase in real estate tax expense is due primarily to general increases in real estate taxes in many of the Consolidated Operating Partnership's markets. The increase in repairs and maintenance expense is due primarily to an increase in landscaping and maintenance expenses. The increase in property management expense is primarily due to the opening of a regional office in California in the third quarter of 1999 as well as general pay increases. Insurance expense increased due primarily to rate increases. Other expense increased due primarily to an increase in master lease payments associated with certain properties during the year ended December 31, 2000 compared to the year ended December 31, 1999. Property expenses from properties owned prior to January 1, 1999 increased by approximately $4.1 million or 6.3% due primarily to the explanations above. General and administrative expense increased by approximately $4.0 million due primarily to general pay increases and additional employees. Interest expense increased by approximately $4.1 million for the year ended December 31, 2000 compared to the year ended December 31, 1999. The increase is primarily due to an increase in the weighted average interest rate for the year ended December 31, 2000 (7.32%) compared to the year ended December 31, 1999 (7.15%) and an increase in the average debt balance outstanding. The average debt balance outstanding for the year ended December 31, 2000 and 1999 was approximately $1,182.3 million and $1,159.6 million, respectively. Amortization of deferred financing costs increased by approximately $.4 million due primarily to amortization of additional deferred financing costs relating to the Operating Partnership's $300.0 million unsecured line of credit (the "1997 Unsecured Acquisition Facility") and the Company's 2000 Unsecured Acquisition Facility (defined below), which amended and restated the 1997 Unsecured Acquisition Facility. Depreciation and other amortization decreased by approximately $2.4 million due primarily to the Consolidated Operating Partnership ceasing depreciation and amortization on properties it considers held for sale as well as due to properties sold subsequent to December 31, 1998. This decrease is offset by depreciation and amortization related to properties acquired or developed subsequent to December 31, 1998. The valuation provision on real estate held for sale of approximately $2.2 million for the year ended December 31, 2000 represents a valuation provision on the Consolidated Operating Partnership's exit market portfolio in Grand Rapids, Michigan. Equity in income of Other Real Estate Partnerships decreased by approximately $12.7 million due primarily to a decrease in gain on sales of real estate for the year ended December 31, 2000 as compared to the year ended December 31, 1999, offset by an increase in average occupied GLA for the year ended December 31, 2000 compared to the year ended December 31, 1999. During the year ended December 31, 2000, the Other Real Estate Partnerships sold four industrial properties and one land parcel for a gain of approximately $3.9 million. During the year ended December 31, 1999, the Other Real Estate Partnerships sold 44 industrial properties, one property under development and several land parcels for a gain of approximately $17.9 million. 36 37 The $25.4 million gain on sale of real estate for the year ended December 31, 2000 resulted from the sale of 105 industrial properties and several land parcels. Gross proceeds from these sales were approximately $404.0 million. The $11.9 million gain on sale of real estate for the year ended December 31, 1999 resulted from the sale of 44 industrial properties, one property under development and several land parcels. Gross proceeds from these sales were approximately $178.3 million. Approximately $4.8 million and $23.3 million of the gross proceeds from the sales of these properties was received from one of the Operating Partnership's industrial real estate joint ventures and the Financing Partnership, respectively (the Consolidated Operating Partnership sold two properties to one of the Operating Partnership's industrial real estate joint ventures and two properties to the Financing Partnership, in each case, at the Consolidated Operating Partnership's approximate net book value). COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO YEAR ENDED DECEMBER 31, 1998 At December 31, 1999, the Consolidated Operating Partnership owned 868 in-service properties with approximately 54.8 million square feet of GLA, compared to 886 in-service properties with approximately 57.4 million square feet of GLA at December 31, 1998. During 1999, the Consolidated Operating Partnership acquired 16 in-service properties containing approximately 1.2 million square feet of GLA and one property under development, completed development of 16 properties and expansion of one property totaling approximately 2.4 million square feet of GLA and sold 44 in-service properties totaling approximately 5.5 million square feet of GLA, one property under development and several land parcels. The Consolidated Operating Partnership also took two properties out of service that are under redevelopment, comprising approximately .5 million square feet of GLA. In addition, during 1999, the Operating Partnership contributed four industrial properties comprising .2 million square feet of GLA to the Securities Partnership. Rental income and tenant recoveries and other income increased by approximately $21.0 million or 7.2% due primarily to an increase in average GLA for the year ended December 31, 1999 as compared to the year ended December 31, 1998 and an increase in same store revenue. Also, approximately $1.5 million of this increase is due to additional acquisition, asset management and property management fees received from the Operating Partnership's two industrial real estate joint ventures in fiscal year 1999. Revenues from properties owned prior to January 1, 1999, increased by approximately $6.4 million or 2.9% due primarily to increased rental rates upon renewal or replacement of tenant leases. Property expenses, which include real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses, decreased by approximately $.5 million or .5% due primarily to a decrease in property management expense, offset by an increase in real estate taxes, repairs and maintenance and other expense due to an increase in average GLA for the year ended December 31, 1999 as compared to the year ended December 31, 1998. The majority of the decrease in property management expense is due to a decrease in the operational costs of the regional offices that manage the Consolidated Operating Partnerships properties primarily due to a reduced employee headcount. Expenses from properties owned prior to January 1, 1999 remained relatively unchanged. General and administrative expense remained relatively unchanged. Interest expense increased by approximately $7.9 million for the year ended December 31, 1999 compared to the year ended December 31, 1998 due primarily to a higher average debt balance outstanding resulting from the issuance of senior unsecured debt to fund the acquisition and development of additional properties, slightly offset by an increase in capitalized interest for the year ended December 31, 1999 due to an increase in development activities. The average debt balances outstanding for the years ended December 31, 1999 and 1998 were approximately $1,159.6 million and $1,017.3 million, respectively. Amortization of deferred financing costs increased by approximately $.4 million due primarily to amortization of deferred financing costs relating to the issuance of additional senior unsecured debt to fund the acquisition and development of additional properties. 37 38 Depreciation and other amortization increased by approximately $3.7 million due primarily to the additional depreciation and amortization related to the properties acquired or developed after December 31, 1997. The $6.9 million restructuring charge for the year ended December 31, 1998 represents a charge in connection with the Consolidated Operating Partnership's restructuring. The restructuring charge is comprised primarily of severance costs, of which approximately $1.2 million is non-cash relating to immediate vesting of restricted units. Equity in income of Other Real Estate Partnerships increased by approximately $18.1 million or 65.7% due primarily to an increase in gain on sales of real estate for the year ended December 31, 1999 as compared to the year ended December 31, 1998. Also, during the year ended December 31, 1998, the Other Real Estate Partnerships recognized an expense of approximately $.9 million to write off the unamoritized balance of organizational costs due to the adoption of Statement of Position 98-5 "Reporting on the Costs of Start-Up Activities" (discussed below). During the year ended December 31, 1999, the Other Real Estate Partnerships sold 13 industrial properties and several land parcels for a gain of approximately $17.9 million. During the year ended December 31, 1998, the Other Real Estate Partnerships sold five industrial properties and several land parcels for a gain of approximately $2.4 million. Equity in income of joint ventures increased by approximately $.3 million for the year ended December 31, 1999 compared to the year ended December 31, 1998. This increase is due to a full year of operations of one of the Operating Partnership's industrial real estate joint ventures in 1999 as opposed to a partial year of operations in 1998 and the start up of the Operating Partnership's second industrial real estate joint venture in 1999. The $8.5 million loss on disposition of interest rate protection agreements for the year ended December 31, 1998 represents the Consolidated Operating Partnership's, through the Operating Partnership, settlement of an interest rate protection agreement which was scheduled to expire on January 4, 1999. This agreement was entered into in December 1997 in anticipation of 1998 senior unsecured debt offerings. Due to the changing market conditions and the Consolidated Operating Partnership's expectation that it would not issue debt securities associated with the interest rate protection agreement, the Consolidated Operating Partnership, through the Operating Partnership, settled its position in the interest rate protection agreement. The $11.9 million gain on sale of real estate for the year ended December 31, 1999 resulted from the sale of 44 industrial properties, one property under development and several land parcels. Gross proceeds from these sales were approximately $178.3 million. Approximately $4.8 million and $23.3 million of the gross proceeds from the sales of these properties was received from one of the Operating Partnership's industrial real estate joint ventures and the Financing Partnership, respectively (the Consolidated Operating Partnership sold two properties to one of the Operating Partnership's industrial real estate joint ventures and two properties to the Financing Partnership, in each case, at the Consolidated Operating Partnership's approximate net book value). The $2.9 million gain on sale of real estate for the year ended December 31, 1998 resulted from the sale of 36 industrial properties and several parcels of land. Gross proceeds from these sales were approximately $77.7 million. The $.7 million cumulative effect of change in accounting principle for the year ended December 31, 1998 is the result of the write-off of the unamoritized balance of organizational costs on the Consolidated Operating Partnership's balance sheet due to the early adoption of Statement of Position 98-5 "Reporting on the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5 requires that the net unamoritized balance of all start-up costs and organizational costs be written off as a cumulative effect of a change in accounting principle and all future start-up costs and organizational costs be expensed. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2000, the Consolidated Operating Partnership's cash and cash equivalents was approximately $3.6 million and restricted cash totaled approximately $23.0 million. Restricted cash was comprised of gross proceeds from the sales of certain properties. These sales proceeds will be disbursed as the Consolidated Operating Partnership exchanges into properties under Section 1031 of the Internal Revenue Code. 38 39 YEAR ENDED DECEMBER 31, 2000 Net cash provided by operating activities of approximately $151.9 million for the year ended December 31, 2000 was comprised primarily of net income of approximately $129.8 million and adjustments for non-cash items of approximately $36.9 million, offset by the net change in operating assets and liabilities of approximately $14.8 million. The adjustments for the non-cash items of approximately $36.9 million are primarily comprised of depreciation and amortization of approximately $60.8 million, a valuation provision on real estate held for sale on a portfolio of properties located in Grand Rapids, Michigan of approximately $2.2 million and a provision for bad debts of approximately $.1 million, offset by the gain on sale of real estate of approximately $25.4 million and the effect of the straight-lining of rental income of approximately $.8 million. Net cash used in investing activities of approximately $85.2 million for the year ended December 31, 2000 was comprised primarily of the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate and an increase in restricted cash from sales proceeds deposited with an intermediary for Section 1031 exchange purposes, offset by the net proceeds from the sale of real estate, distributions from the Operating Partnership's two industrial real estate joint ventures and the repayment of mortgage loans receivable. Net cash used in financing activities of approximately $63.1 million for the year ended December 31, 2000 was comprised primarily of general partnership and limited partnership units ("Unit") and preferred general partnership unit distributions, the purchase of general partnership Units, repayments on mortgage loans payable and debt issuance costs incurred in conjunction with the 2000 Unsecured Acquisition Facility (defined below), offset by the net borrowings under the Operating Partnership's lines of credit and Unit contributions. YEAR ENDED DECEMBER 31, 1999 Net cash provided by operating activities of approximately $183.5 million for the year ended December 31, 1999 was comprised primarily of net income of approximately $138.0 million, adjustments for non-cash items of approximately $43.9 million and the net change in operating assets and liabilities of approximately $1.6 million. The adjustments for the non-cash items of approximately $43.9 million are primarily comprised of depreciation and amortization of approximately $59.3 million, offset by the gain on sale of real estate of approximately $11.9 million and the effect of the straight-lining of rental income of approximately $3.5 million. Net cash used in investing activities of approximately $15.8 million for the year ended December 31, 1999 was comprised primarily of the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, contributions to and investments in the Other Real Estate Partnerships, contributions to and investments in the Operating Partnership's two industrial real estate joint ventures and the funding of mortgage loans receivable, offset by distributions from Other Real Estate Partnerships, distributions from one of the Operating Partnership's industrial real estate joint ventures, net proceeds from the sales of real estate, the repayment of mortgage loans receivable and a decrease in restricted cash due to the use of restricted cash to purchase properties to effect Section 1031 exchanges. Net cash used in financing activities of approximately $181.7 million for the year ended December 31, 1999 was comprised primarily of Unit and preferred general partnership unit distributions, repayments on mortgage loans payable, debt issuance costs and net repayments under the 1997 Unsecured Acquisition Facility, offset by Unit contributions. YEAR ENDED DECEMBER 31, 1998 Net cash provided by operating activities of approximately $147.9 million for the year ended December 31, 1998 was comprised primarily of net income of approximately $85.3 million and adjustments for non-cash items of approximately $51.4 million and the net change in operating assets and liabilities of approximately $11.3 million. The adjustments for the non-cash items of approximately $51.4 million are primarily comprised of depreciation and 39 40 amortization of approximately $56.9 million, a provision for bad debts of approximately $.6 million and the cumulative effect of a change in accounting principle of approximately $.7 million due to the adoption of SOP 98-5, offset by the gain on sale of real estate of approximately $2.9 million and the effect of the straight-lining of rental income of approximately $3.9 million. Net cash used in investing activities of approximately $538.4 million for the year ended December 31, 1998 was comprised primarily of the acquisition of real estate, development of real estate, capital expenditures related to the expansion and improvement of existing real estate, contributions to and investments in Other Real Estate Partnerships, investment in one of the Operating Partnership's industrial real estate joint ventures and an increase in restricted cash from sales proceeds deposited with an intermediary for Section 1031 exchange purposes, offset by distributions from investment in Other Real Estate Partnerships, net proceeds from the sales of real estate and the repayment of mortgage loans receivable. Net cash provided by financing activities of approximately $399.4 million for the year ended December 31, 1998 was comprised primarily of Unit and preferred general partnership unit contributions, net proceeds from the issuance of senior unsecured debt, and net borrowings under the Operating Partnership's 1997 Unsecured Acquisition Facility, offset by Unit and preferred general partnership unit distributions and repayments on mortgage loans payable. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges was 2.13, 2.44 and 2.08 for the years ended December 31, 2000, 1999 and 1998, respectively. The increase in earnings to fixed charges between fiscal years 1999 and 1998 is primarily due to an increase in income from operations in fiscal year 1999 as compared to fiscal year 1998 due to a restructuring charge and a loss from disposition of interest rate protection agreements incurred in 1998 and an increase in the equity in income of other real estate partnerships as discussed in "Results of Operations" above. The decrease in earnings to fixed charges between fiscal years 2000 and 1999 is primarily due to a decrease in income from operations in fiscal year 2000 as compared to fiscal year 1999 due to a valuation provision on real estate held for sale and a decrease in the equity in income of Other Real Estate Partnerships as well as an increase in fixed charges resulting from an increase in interest expense due to an increase in the weighted average interest rate for the year ended December 31, 2000 compared to the year ended December 31, 1999 and an increase in the weighted average debt balance outstanding as discussed in "Results of Operations" above. SEGMENT REPORTING Management views the Consolidated Operating Partnership as a single segment. INVESTMENT IN REAL ESTATE, DEVELOPMENT OF REAL ESTATE AND SALES OF REAL ESTATE During the year ended December 31, 2000, the Consolidated Operating Partnership purchased 82 in-service industrial properties and one industrial property under redevelopment comprising approximately 5.6 million square feet of GLA as well as several land parcels, for an aggregate purchase price of approximately $314.3 million, excluding costs incurred in conjunction with the acquisition of the properties and land parcels. The Consolidated Operating Partnership also completed the development of 20 industrial properties and one property under redevelopment comprising approximately 3.6 million square feet of GLA at a cost of approximately $125.8 million. During the year ended December 31, 2000, the Consolidated Operating Partnership sold 104 in-service industrial properties and one out of service property comprising approximately 8.9 million square feet of GLA as well as several land parcels. Gross proceeds from these sales were approximately $404.0 million. The Consolidated Operating Partnership has committed to the construction of 13 development projects totaling approximately 1.8 million square feet of GLA for an estimated investment of approximately $102.2 million. Of this amount, approximately $56.0 million remains to be funded. These developments are expected to be funded with cash flows from operations, proceeds from the sales of select properties of the Consolidated Operating Partnership and borrowings under the Operating Partnership's 2000 Unsecured Acquisition Facility (defined below). From January 1, 2001 to March 23, 2001, the Consolidated Operating Partnership acquired 13 industrial properties and several land parcels for a total estimated investment of approximately $45.5 million. The Consolidated 40 41 Operating Partnership also sold eight industrial properties and one land parcel for approximately $19.5 million of gross proceeds. REAL ESTATE HELD FOR SALE The Consolidated Operating Partnership plans on exiting the markets of Cleveland, Columbus, Dayton, Des Moines, Grand Rapids, Long Island and New Orleans/Baton Rouge as well as continually engages in identifying and evaluating its other real estate markets for potential sales candidates. At December 31, 2000, the Consolidated Operating Partnership had 74 industrial properties comprising approximately 6.9 million square feet of GLA held for sale. Income from operations of the 74 industrial properties held for sale for the year ended December 31, 2000, 1999 and 1998 is approximately $19.6 million, $16.1 million and $15.5 million, respectively. Net carrying value of the 74 industrial properties held for sale at December 31, 2000 is approximately $190.4 million. There can be no assurance that such properties held for sale will be sold. INVESTMENTS IN JOINT VENTURES During the year ended December 31, 2000, the Consolidated Operating Partnership, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, received, in the aggregate, approximately $2.8 million in asset management and property management fees from two industrial real estate joint ventures. The Operating Partnership, through wholly-owned limited liability companies in which it is the sole member, received distributions of approximately $.9 million from two industrial real estate joint ventures. As of December 31, 2000, the two industrial real estate joint ventures owned 177 industrial properties comprising approximately 8.3 million square feet of GLA. On or after October 2000, under certain circumstances, the Consolidated Operating Partnership has the option of purchasing all of the properties owned by one of the joint ventures at a price to be determined in the future. The Consolidated Operating Partnership has not exercised this option. ACQUISITION FACILITY PAYABLE In June 2000, the Operating Partnership amended and restated the 1997 Unsecured Acquisition Facility which gives the Operating Partnership the right, subject to certain conditions, to increase the aggregate commitment up to $400.0 million as well as extended the maturity of the 1997 Unsecured Acquisition Facility to June 30, 2003 (the "2000 Unsecured Acquisition Facility"). SENIOR UNSECURED DEBT On March 19, 2001, the Consolidated Operating Partnership, through the Operating Partnership, issued $200.0 million of unsecured notes in a private offering at an offering price of 99.695%. The unsecured notes mature on March 15, 2011 and bear a coupon interest rate of 7.375%. MARKET RISK The following discussion about the Consolidated Operating Partnership's risk-management activities includes "forward-looking statements" that involve risk and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. This analysis presents the hypothetical gain or loss in earnings, cash flows or fair value of the financial instruments and derivative instruments which are held by the Consolidated Operating Partnership at December 31, 2000 that are sensitive to changes in the interest rates. While this analysis may have some use as a benchmark, it should not be viewed as a forecast. In the normal course of business, the Consolidated Operating Partnership also faces risks that are either non-financial or non-quantifiable. Such risks principally include credit risk and legal risk and are not represented in the following analysis. At December 31, 2000, $170.0 million (approximately 14% of total debt at December 31, 2000) of the Consolidated Operating Partnership's debt was variable rate debt (all of the variable rate debt relates to the Operating 41 42 Partnership's 2000 Unsecured Acquisition Facility) and $1,010.0 million (approximately 86% of total debt at December 31, 2000) was fixed rate debt. The Consolidated Operating Partnership also had outstanding a written put and a written call option (collectively, the "Written Options") which were issued in conjunction with the initial offering of two tranches of senior unsecured debt. Currently, the Consolidated Operating Partnership does not enter into financial instruments for trading or other speculative purposes. For fixed rate debt, changes in interest rates generally affect the fair value of the debt, but not earnings or cash flows of the Consolidated Operating Partnership. Conversely, for variable rate debt, changes in the interest rate generally do not impact the fair value of the debt, but would affect the Consolidated Operating Partnership's future earnings and cash flows. The interest rate risk and changes in fair market value of fixed rate debt generally do not have a significant impact on the Consolidated Operating Partnership until the Consolidated Operating Partnership is required to refinance such debt. See Note 6 to the consolidated financial statements for a discussion of the maturity dates of the Consolidated Operating Partnership's various fixed rate debt. Based upon the amount of variable rate debt outstanding at December 31, 2000, a 10% increase or decrease in the interest rate on the Consolidated Operating Partnership's variable rate debt would decrease or increase, respectively, future net income and cash flows by approximately $1.3 million per year. A 10% increase in interest rates would decrease the fair value of the fixed rate debt at December 31, 2000 by approximately $45.4 million to $936.2 million. A 10% decrease in interest rates would increase the fair value of the fixed rate debt at December 31, 2000 by approximately $50.4 million to $1,032.0 million. A 10% increase in interest rates would decrease the fair value of the Written Options at December 31, 2000 by approximately $4.1 million to $8.0 million. A 10% decrease in interest rates would increase the fair value of the Written Options at December 31, 2000 by approximately $5.5 million to $17.6 million. ISSUANCE OF UNITS AND EMPLOYEE STOCK OPTIONS During the year ended December 31, 2000, the Company awarded 355,139 shares of restricted common stock to certain employees and 3,663 shares of restricted common stock to certain Directors. Other employees of the Company converted certain in-the-money employee stock options to 14,903 shares of restricted common stock. The Consolidated Operating Partnership, through the Operating Partnership, issued Units to the Company in the same amount. These shares of restricted common stock had a fair value of approximately $9.7 million on the date of grant. The restricted common stock vests over periods from one to ten years. During the year ended December 31, 2000, the Operating Partnership issued 937,250 non-qualified employee stock options to certain officers, Directors and employees of the Company. These non-qualified employee stock options vest over periods from one to three years, have a strike price of $27.25-$30.00 per share and expire ten years from the date of grant. For the year ended December 31, 2000, certain employees of the Company exercised 518,550 non-qualified employee stock options. Gross proceeds to the Company were $12.5 million. The Consolidated Operating Partnership, through the Operating Partnership, issued 518,550 Units to the Company in the same amount. REPURCHASE OF UNITS In March 2000, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common stock. The Company may make purchases from time to time, if price levels warrant, in the open market or in privately negotiated transactions. During the year ended December 31, 2000, the Company repurchased 394,300 shares of its common stock at a weighted average price per share of approximately $29.67. The Operating Partnership repurchased general partnership Units from the Company in the same amount. DISTRIBUTIONS On January 24, 2000, the Operating Partnership paid a fourth quarter 1999 distribution of $.62 per Unit, totaling approximately $28.2 million. On April 17, 2000, the Operating Partnership paid a first quarter 2000 distribution of $.62 per Unit, totaling approximately $28.5 million. On July 17, 2000, the Operating Partnership paid a second quarter 2000 distribution of $.62 per Unit, totaling approximately $28.6 million. On October 23, 2000, the 42 43 Operating Partnership paid a third quarter 2000 distribution of $.62 per Unit, totaling approximately $28.4 million. On January 22, 2001, the Operating Partnership paid a fourth quarter 2000 distribution of $.6575 per Unit, totaling approximately $30.3 million. On March 31, 2000, June 30, 2000, October 2, 2000 and January 2, 2001, the Operating Partnership paid quarterly 2000 distributions of $54.688 per unit on its 8 3/4% Series B Cumulative Preferred Units (the "Series B Preferred Units"), $53.906 per unit on its 8 5/8% Series C Cumulative Preferred Units (the "Series C Preferred Units"), $49.687 per unit on its 7.95% Series D Cumulative Preferred Units (the "Series D Preferred Units") and $49.375 per unit on its 7.90% Series E Cumulative Preferred Units (the "Series E Preferred Units"). The preferred unit distributions paid on March 31, 2000, June 30, 2000, October 2, 2000 and January 2, 2001 totaled, in the aggregate, approximately $7.2 million per quarter. On March 9, 2001, the Operating Partnership declared a first quarter distribution of $.6575 per Unit which is payable on April 23, 2001. The Operating Partnership also declared first quarter 2000 distributions of $54.688 per unit on its Series B Preferred Units, $53.906 per unit on its Series C Preferred Units, $49.687 per unit on its Series D Preferred Units and $49.375 per unit on its Series E Preferred Units, respectively, which are payable on April 2, 2001. SHORT-TERM AND LONG-TERM LIQUIDITY NEEDS The Consolidated Operating Partnership has considered its short-term (one year or less) liquidity needs and the adequacy of its estimated cash flow from operations and other expected liquidity sources to meet these needs. The Consolidated Operating Partnership believes that its principal short-term liquidity needs are to fund normal recurring expenses, debt service requirements and the minimum distribution required by the Company to maintain the Company's REIT qualification under the Internal Revenue Code. The Consolidated Operating Partnership anticipates that these needs will be met with cash flows provided by operating activities. The Consolidated Operating Partnership expects to meet long-term (greater than one year) liquidity requirements such as property acquisitions, developments, scheduled debt maturities, major renovations, expansions and other nonrecurring capital improvements through the disposition of select assets, long-term secured and unsecured indebtedness and the issuance of additional Units and preferred units. As of December 31, 2000 and March 23, 2001, $100.0 million of debt securities was registered and unissued under the Securities Act of 1933, as amended. The Consolidated Operating Partnership may also finance the development or acquisition of additional properties through borrowings under the 2000 Unsecured Acquisition Facility. At December 31, 2000, borrowings under the 2000 Unsecured Acquisition Facility bore interest at a weighted average interest rate of 7.26%. As of March 23, 2001, the Consolidated Operating Partnership, through the Operating Partnership, had approximately $228.0 million available in additional borrowings under the 2000 Unsecured Acquisition Facility. The 2000 Unsecured Acquisition Facility bears interest at a floating rate of LIBOR plus .80% or the Prime Rate, at the Company's option. RELATED PARTY TRANSACTIONS The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of Michael W. Brennan, the President and Chief Executive Officer and a director of the Company is an employee of CB Richard Ellis, Inc. For the year ended December 31, 2000, this relative received approximately $.06 million in brokerage commissions paid by the Consolidated Operating Partnership. The Consolidated Operating Partnership periodically utilizes consulting services from the private consulting firm of Robert J. Slater, a director of the Company. For the year ended December 31, 2000, the Consolidated Operating Partnership has paid approximately $.005 million of fees to this entity. On November 19, 1998, the Consolidated Operating Partnership, through the Operating Partnership, sold two industrial properties to two limited partnerships, Roosevelt Glen Corporate Center ("Roosevelt") and Hartford Center Investment Company ("Hartford"), for a total consideration of approximately $8.3 million. An entity in which one of the shareholders is Jay Shidler, Chairman of the Board of Directors ("TSIC") has a 11.638% general partner interest in Roosevelt. TSIC has a 12.39% general partner interest in Hartford. On December 4, 1998, the Operating Partnership sold one industrial property to Eastgate Shopping Center Investment Co. ("Eastgate"), a limited partnership, for a total consideration of approximately $2.5 million. TSIC has a 12.972% general partner interest in Eastgate. In each case, the purchaser had the option of selling the properties back to the Operating Partnership and the Operating Partnership had the option of buying the properties back from the purchaser for a stipulated period of time. In 43 44 January 2000, the purchasers exercised their options to sell the properties back to the Operating Partnership. The gain on sale was deferred due to the existence of these options. In January and February 2001, FR Development Services, Inc. ("FRDS") purchased all of the voting and non-voting shares (a total of 25,790 shares) of FRDS held by Michael W. Brennan, President and Chief Executive Officer and a director of the Company, Michael J. Havala, Chief Financial Officer of the Company, Johannson L. Yap, Chief Investment Officer of the Company and Gary H. Heigl, former Chief Operating Officer of the Company, for approximately $1.3 million, in connection with FRDS' election to become a wholly-owned taxable REIT subsidiary of the Company. At the time of the transaction, these executive officers had equity interests in FRDS totaling 2.76%. ENVIRONMENTAL The Consolidated Operating Partnership incurred environmental costs of $.1 million and $.5 million in 2000 and 1999, respectively. The Consolidated Operating Partnership estimates 2001 costs of approximately $.2 million. The Consolidated Operating Partnership estimates that the aggregate cost which needs to be expended in 2001 and beyond with regard to currently identified environmental issues will not exceed approximately $.4 million, a substantial amount of which will be the primary responsibility of the tenant, the seller to the Consolidated Operating Partnership or another responsible party. This estimate was determined by a third party evaluation. INFLATION For the last several years, inflation has not had a significant impact on the Consolidated Operating Partnership because of the relatively low inflation rates in the Consolidated Operating Partnership's markets of operation. Most of the Consolidated Operating Partnership's leases require the tenants to pay their share of operating expenses, including common area maintenance, real estate taxes and insurance, thereby reducing the Consolidated Operating Partnership's exposure to increases in costs and operating expenses resulting from inflation. In addition, many of the outstanding leases expire within five years which may enable the Consolidated Operating Partnership to replace existing leases with new leases at higher base rentals if rents of existing leases are below the then-existing market rate. OTHER The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133") on June 1, 1998. Statement of Financial Accounting Standards No. 138 "Accounting for Derivative Instruments and Hedging Activities - An Amendment of FAS Statement 133" was issued in June 2000. FAS 133, as amended, is effective for fiscal years beginning after June 15, 2000 as provided by Statement of Financial Accounting Standards No. 137 issued in July 1999. FAS 133, as amended, requires fair value accounting for all derivatives including recognizing all such instruments on the balance sheet with an offsetting amount recorded in the income statement or as part of comprehensive income. FAS 133, as amended, becomes effective for the Consolidated Operating Partnership for the year ending December 31, 2001. FAS 133 did not have an impact on the Consolidated Operating Partnership's consolidated financial position, consolidated results of operations or consolidated cash flows. In March 2000, the FASB issued Statement of Accounting Standards Interpretation 44, Accounting for Certain Transactions Involving Stock Compensation ("Interpretation 44"). Interpretation 44 is generally effective for new stock option grants beginning July 1, 2000. However, the interpretive definition of an employee and certain effective repricing provisions apply to new awards granted after December 15, 1998. Further, the FASB determined that any modifications to current accounting as a result of this guidance are to be recorded prospectively, effective as of July 1, 2000. The Consolidated Operating Partnership has applied the accounting mandated by Interpretation 44 as of July 1, 2000 and there has not been a material impact on the Consolidated Operating Partnership's consolidated financial position, consolidated results of operations or consolidated cash flows. The REIT Modernization Act, which was passed in 1999 and will take effect on January 1, 2001, modifies certain provisions of the Internal Revenue Code of 1986, as amended, with respect to the taxation of REITs. Two key provisions of this tax law change will impact future Consolidated Operating Partnership operations: the availability of a taxable REIT subsidiary which may be wholly-owned directly by a REIT and a reduction in the required level of distributions by a REIT to 90% of ordinary taxable income. The Consolidated Operating Partnership converted its preferred stock subsidiary to a wholly-owned taxable REIT subsidiary in January 2001. 44 45 In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 101 was required to be implemented in the fourth fiscal quarter of 2000. The adoption of SAB 101 did not have an effect on the Consolidated Operating Partnership's results of operations or its financial position as the Consolidated Operating Partnership's revenue recognition practices were compliant with the pronouncement. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Response to this item is included in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" above. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See Index to Financial Statements and Financial Statement Schedule on page F-1 of this Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None. PART III ITEM 10, 11, 12, 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, EXECUTIVE COMPENSATION, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Operating Partnership has no directors or executive officers; instead it is managed by its sole general partner, the Company. The information with respect to the sole general partner of the Operating Partnership required by Item 10, Item 11, Item 12 and Item 13 is incorporated herein by reference to parts of the Company's definitive proxy statement in connection with its 2001 Annual Meeting of Stockholders (which will be filed no later than April 15, 2001) captioned "Information Regarding Nominees and Directors", "Executive Officers and Other Senior Management", "Director Compensation", "Executive Compensation", "Section 16 (a) Beneficial Ownership Reporting Compliance", "Certain Relationships and Transactions" and "Security Ownership of Management and Certain Beneficial Owners". Information contained in the part of such proxy statement captioned "Stock Performance Graph" is specifically not incorporated herein by reference. 45 46 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULE AND EXHIBITS (1 & 2) See Index to Financial Statements and Financial Statement Schedule on page F-1 of this Form 10-K (3) Exhibits: Exhibit No. Description - ----------- ----------- 3.1 Sixth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. dated March 18, 1998 (the "L.P. Agreement")(incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 3.2 First Amendment to the L.P. Agreement dated April 1, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.3 Second Amendment to the L.P. Agreement dated April 3, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.4 Third Amendment to the L.P. Agreement dated April 16, 1998 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.5 Fourth Amendment to the L.P. Agreement dated June 24, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1998, File No. 1-13102) 3.6 Fifth Amendment to the L.P. Agreement dated July 16, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1998, File No. 1-13102) 3.7 Sixth Amendment to the L.P. Agreement dated August 31, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.8 Seventh Amendment to the L.P. Agreement dated October 21, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.9 Eighth Amendment to the L.P. Agreement dated October 30, 1998 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.10 Ninth Amendment to the L.P. Agreement dated November 5, 1998 (incorporated by reference to Exhibit 10.5 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.11 Tenth Amendment to the L.P. Agreement dated January 28, 2000 (incorporated by reference to Exhibit 10.11 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-13102) 3.12 Eleventh Amendment to the L.P. Agreement dated January 28, 2000 (incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-13102) 46 47 3.13 Twelfth Amendment to the L.P. Agreement dated June 27, 2000 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2000, File No. 1-13102) 3.14 Thirteenth Amendment to the L.P. Agreement dated September 1, 2000 (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.15 Fourteenth Amendment to the L.P. Agreement dated October 13, 2000 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.16 Fifteenth Amendment to the L.P. Agreement dated October 13, 2000 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.17 Sixteenth Amendment to the L.P. Agreement dated October 27, 2000 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.18 Seventeenth Amendment to the L.P. Agreement dated January 25, 2001(incorporated by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-13102) 3.19 Eighteenth Amendment to the L.P. Agreement dated February 13, 2001(incorporated by reference to Exhibit 10.19 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-13102) 4.1 Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102) 4.2 Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102) 4.3 Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 7 3/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873) 4.4 Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873) 4.5 6.90% Medium-Term Note due 2005 in principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.17 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 4.6 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 47 48 Exhibit No. Description - ---------- ----------- 4.7 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 4.8 Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873) 4.9 Amended and Restated Unsecured Revolving Credit Agreement, dated as of June 30, 2000 among First Industrial, L.P., First Industrial Realty Trust, Inc. and Bank One, N.A., UBS AG, Stamford Branch, Bank of America, N.A. and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2000, File No. 1-13102) 4.10 Supplemental Indenture No. 4, dated as of March 26, 1998, between First Industrial, L.P. and First Trust National Trust Association, as Trustee, relating to 6.50% Dealer remarketable securities due April 5, 2011 (incorporated by reference to Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.11 6.50% Dealer remarketable securities due April 5, 2011 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.12 Remarketing Agreement, dated March 31, 1998, between First Industrial, L.P. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 1.2 of Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.13 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P dated July 15, 1998, File No. 333-21873) 4.14 Supplemental Indenture No.5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industial, L.P.'s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873) 4.15** 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. 4.16** Supplemental Indenture No.6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.'s 7.375% Notes due March 15, 2011 4.17** Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC 12.1* Computation of ratios of earnings to fixed charges of First Industrial, L.P. 21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-13102) 23 * Consent of PricewaterhouseCoopers LLP * Filed herewith. ** Filed previously as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000. 48 49 (b) REPORTS ON FORM 8-K AND 8-K/A None. - -------------------------------------------------------------------------------- The Company has prepared supplemental financial and operating information which is available without charge upon request to the Company. Please direct requests as follows: First Industrial Realty Trust, Inc. 311 S. Wacker, Suite 4000 Chicago, IL 60606 Attention: Investor Relations 49 50 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST INDUSTRIAL, L.P. BY: FIRST INDUSTRIAL REALTY TRUST, INC. AS GENERAL PARTNER Date: July 6, 2001 By: /s/ Michael W. Brennan ---------------------------------------------- Michael W. Brennan President, Chief Executive Officer and Director (Principal Executive Officer) Date: July 6, 2001 By: /s/ Michael J. Havala ---------------------------------------------- Michael J. Havala Chief Financial Officer (Principal Financial and Accounting Officer) 50 51 EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 3.1 Sixth Amended and Restated Limited Partnership Agreement of First Industrial, L.P. dated March 18, 1998 (the "L.P. Agreement")(incorporated by reference to Exhibit 10.1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 3.2 First Amendment to the L.P. Agreement dated April 1, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.3 Second Amendment to the L.P. Agreement dated April 3, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.4 Third Amendment to the L.P. Agreement dated April 16, 1998 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1998, File No. 1-13102) 3.5 Fourth Amendment to the L.P. Agreement dated June 24, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1998, File No. 1-13102) 3.6 Fifth Amendment to the L.P. Agreement dated July 16, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 1998, File No. 1-13102) 3.7 Sixth Amendment to the L.P. Agreement dated August 31, 1998 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.8 Seventh Amendment to the L.P. Agreement dated October 21, 1998 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.9 Eighth Amendment to the L.P. Agreement dated October 30, 1998 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.10 Ninth Amendment to the L.P. Agreement dated November 5, 1998 (incorporated by reference to Exhibit 10.5 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 1998, File No. 1-13102) 3.11 Tenth Amendment to the L.P. Agreement dated January 28, 2000 (incorporated by reference to Exhibit 10.11 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-13102) 3.12 Eleventh Amendment to the L.P. Agreement dated January 28, 2000 (incorporated by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, File No. 1-13102) 3.13 Twelfth Amendment to the L.P. Agreement dated June 27, 2000 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2000, File No. 1-13102) 3.14 Thirteenth Amendment to the L.P. Agreement dated September 1, 2000 (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.15 Fourteenth Amendment to the L.P. Agreement dated October 13, 2000 (incorporated by reference to Exhibit 10.2 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 51 52 Exhibit No. Description - ---------- ----------- 3.16 Fifteenth Amendment to the L.P. Agreement dated October 13, 2000 (incorporated by reference to Exhibit 10.3 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.17 Sixteenth Amendment to the L.P. Agreement dated October 27, 2000 (incorporated by reference to Exhibit 10.4 of the Form 10-Q of the Company for the fiscal quarter ended September 30, 2000, File No. 1-13102) 3.18 Seventeenth Amendment to the L.P. Agreement dated January 25, 2001(incorporated by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-13102) 3.19 Eighteenth Amendment to the L.P. Agreement dated February 13, 2001(incorporated by reference to Exhibit 10.19 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, File No. 1-13102) 4.1 Indenture, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102) 4.2 Supplemental Indenture No. 1, dated as of May 13, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $150 million of 7.60% Notes due 2007 and $100 million of 7.15% Notes due 2027 (incorporated by reference to Exhibit 4.2 of the Form 10-Q of the Company for the fiscal quarter ended March 31, 1997, as amended by Form 10-Q/A No. 1 of the Company filed May 30, 1997, File No. 1-13102) 4.3 Supplemental Indenture No. 2, dated as of May 22, 1997, between First Industrial, L.P. and First Trust National Association as Trustee relating to $100 million of 7 3/8% Notes due 2011 (incorporated by reference to Exhibit 4.4 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873) 4.4 Supplemental Indenture No. 3 dated October 28, 1997 between First Industrial, L.P. and First Trust National Association providing for the issuance of Medium-Term Notes due Nine Months or more from Date of Issue (incorporated by reference to Exhibit 4.1 of Form 8-K of the Operating Partnership, dated November 3, 1997, as filed November 3, 1997, File No. 333-21873) 4.5 6.90% Medium-Term Note due 2005 in principal amount of $50 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.17 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 4.6 7.00% Medium-Term Note due 2006 in principal amount of $150 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.18 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 4.7 7.50% Medium-Term Note due 2017 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.19 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997, File No. 1-13102) 52 53 4.8 Trust Agreement, dated as of May 16, 1997, between First Industrial, L.P. and First Bank National Association, as Trustee (incorporated by reference to Exhibit 4.5 of the Form 10-QT of the Operating Partnership for the fiscal quarter ended March 31, 1997, File No. 333-21873) 4.9 Amended and Restated Unsecured Revolving Credit Agreement, dated as of June 30, 2000 among First Industrial, L.P., First Industrial Realty Trust, Inc. and Bank One, N.A., UBS AG, Stamford Branch, Bank of America, N.A. and certain other banks (incorporated by reference to Exhibit 10.1 of the Form 10-Q of the Company for the fiscal quarter ended June 30, 2000, File No. 1-13102) 4.10 Supplemental Indenture No. 4, dated as of March 26, 1998, between First Industrial, L.P. and First Trust National Trust Association, as Trustee, relating to 6.50% Dealer remarketable securities due April 5, 2011 (incorporated by reference to Exhibit 4.1 of Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.11 6.50% Dealer remarketable securities due April 5, 2011 in principal amount of $100 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.12 Remarketing Agreement, dated March 31, 1998, between First Industrial, L.P. and J.P. Morgan Securities Inc. (incorporated by reference to Exhibit 1.2 of Form 8-K of First Industrial, L.P. dated April 7, 1998, File No. 333-21873) 4.13 7.60% Notes due 2028 in principal amount of $200 million issued by First Industrial, L.P. (incorporated by reference to Exhibit 4.2 of the Form 8-K of First Industrial, L.P dated July 15, 1998, File No. 333-21873) 4.14 Supplemental Indenture No.5, dated as of July 14, 1998, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.'s 7.60% Notes due July 15, 2028 (incorporated by reference to Exhibit 4.1 of the Form 8-K of First Industrial, L.P. dated July 15, 1998, File No. 333-21873) 4.15** 7.375% Note due 2011 in principal amount of $200 million issued by First Industrial, L.P. 4.16** Supplemental Indenture No. 6, dated as of March 19, 2001, between First Industrial, L.P. and the U.S. Bank Trust National Association, relating to First Industrial, L.P.'s 7.375% Notes due March 15, 2011 4.17** Registration Rights Agreement, dated as of March 19, 2001, among First Industrial, L.P. and Credit Suisse First Boston Corporation, Chase Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney, Inc., Banc of America Securities LLC, Banc One Capital Markets, Inc. and UBS Warburg LLC 12.1* Computation of ratios of earnings to fixed charges of First Industrial, L.P. 21.1 Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2000, File No. 1-13102) 23* Consent of PricewaterhouseCoopers LLP * Filed herewith. ** Filed previously as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2000. 54 FIRST INDUSTRIAL, L.P. INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
PAGE ---- FINANCIAL STATEMENTS Report of Independent Accountants....................................................... F-2 Consolidated Balance Sheets of First Industrial, L.P. as of December 31, 2000 and 1999................................................................................ F-3 Consolidated Statements of Operations of First Industrial, L.P. for the Years Ended December 31, 2000, 1999 and 1998........................................................ F-4 Consolidated Statements of Changes in Partners' Capital of First Industrial, L.P. for the Years Ended December 31, 2000, 1999 and 1998........................................ F-5 Consolidated Statements of Cash Flows of First Industrial, L.P. for the Years Ended December 31, 2000, 1999 and 1998........................................................ F-6 Notes to Consolidated Financial Statements.............................................. F-7 FINANCIAL STATEMENT SCHEDULE Report of Independent Accountants....................................................... S-1 Schedule III: Real Estate and Accumulated Depreciation................................ S-2
F-1 55 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of First Industrial, L.P. In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of changes in partners' capital and of cash flows present fairly, in all material respects, the financial position of First Industrial, L.P. (the "Operating Partnership") at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Operating Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Chicago, Illinois February 9, 2001 F-2 56 FIRST INDUSTRIAL, L.P. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
December 31, December 31, 2000 1999 ----------- ----------- ASSETS Assets: Investment in Real Estate: Land ........................................................ $ 341,746 $ 311,149 Buildings and Improvements .................................. 1,643,540 1,776,217 Furniture, Fixtures and Equipment ........................... 1,353 1,353 Construction in Progress .................................... 33,913 42,715 Less: Accumulated Depreciation .............................. (182,480) (179,293) ----------- ----------- Net Investment in Real Estate ....................... 1,838,072 1,952,141 Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $21,974 .................................. 190,379 -- Investments in and Advances to Other Real Estate Partnerships ................................................. 381,231 380,774 Cash and Cash Equivalents ...................................... 3,644 22 Restricted Cash ................................................ 23,027 927 Tenant Accounts Receivable, Net ................................ 8,857 8,986 Investments in Joint Ventures .................................. 6,158 6,408 Deferred Rent Receivable ....................................... 10,887 13,777 Deferred Financing Costs, Net .................................. 10,543 9,905 Prepaid Expenses and Other Assets, Net ......................... 66,609 71,047 ----------- ----------- Total Assets ........................................ $ 2,539,407 $ 2,443,987 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage Loans Payable, Net .................................... $ 61,242 $ 63,059 Senior Unsecured Debt, Net ..................................... 948,781 948,688 Acquisition Facility Payable ................................... 170,000 94,000 Accounts Payable and Accrued Expenses .......................... 94,448 75,397 Rents Received in Advance and Security Deposits ................ 17,593 19,329 Distributions Payable .......................................... 37,512 28,164 ----------- ----------- Total Liabilities ................................... 1,329,576 1,228,637 ----------- ----------- Commitments and Contingencies ..................................... -- -- Partners' Capital: General Partner Preferred Units (140,000 units issued and outstanding at December 31, 2000 and 1999) .................. 336,990 336,990 General Partner Units (38,844,086 and 38,152,811 units issued and outstanding at December 31, 2000 and 1999, respectively) ............................................... 697,864 694,899 Unamortized Value of General Partnership Restricted Units ..... (8,812) (4,087) Limited Partners' Units (7,223,859 and 7,309,643 units issued and outstanding at December 31, 2000 and 1999, respectively) ............................................... 183,406 187,548 Amortization of Stock Based Compensation ...................... 383 -- ----------- ----------- Total Partners' Capital ........................... 1,209,831 1,215,350 ----------- ----------- Total Liabilities and Partners' Capital ........... $ 2,539,407 $ 2,443,987 =========== ===========
The accompanying notes are an integral part of the financial statements. F-3 57 FIRST INDUSTRIAL, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except for per unit data)
Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ Revenues: Rental Income ........................................................ $ 253,799 $ 249,719 $ 237,167 Tenant Recoveries and Other Income ................................... 67,421 64,646 56,219 --------- --------- --------- Total Revenues ............................................. 321,220 314,365 293,386 --------- --------- --------- Expenses: Real Estate Taxes .................................................... 51,320 49,590 48,768 Repairs and Maintenance .............................................. 16,256 14,992 13,841 Property Management .................................................. 11,730 9,013 11,541 Utilities ............................................................ 7,849 7,602 7,667 Insurance ............................................................ 1,195 690 794 Other ................................................................ 4,838 3,439 3,162 General and Administrative ........................................... 16,971 12,961 12,919 Interest ............................................................. 80,885 76,799 68,862 Amortization of Deferred Financing Costs ............................. 1,683 1,295 851 Depreciation and Other Amortization .................................. 55,558 57,927 54,209 Valuation Provision on Real Estate Held for Sale ..................... 2,169 -- -- Restructuring Charge ................................................. -- -- 6,858 --------- --------- --------- Total Expenses ............................................ 250,454 234,308 229,472 --------- --------- --------- Income from Operations Before Equity in Income of Other Real Estate Partnerships, Equity in Income of Joint Ventures and Disposition of Interest Rate Protection Agreements ............................... 70,766 80,057 63,914 Equity in Income of Other Real Estate Partnerships ...................... 33,049 45,714 27,583 Equity in Income of Joint Ventures ...................................... 571 302 45 Disposition of Interest Rate Protection Agreements ...................... -- -- (8,475) --------- --------- --------- Income from Operations .................................................. 104,386 126,073 83,067 Gain on Sale of Real Estate ............................................. 25,430 11,904 2,931 --------- --------- --------- Income Before Cumulative Effect of Change in Accounting Principle ....... 129,816 137,977 85,998 Cumulative Effect of Change in Accounting Principle ..................... -- -- (719) --------- --------- --------- Net Income .............................................................. 129,816 137,977 85,279 Less: Preferred Unit Distributions ..................................... (28,924) (28,924) (26,691) --------- --------- --------- Net Income Available to Unitholders .................................... $ 100,892 $ 109,053 $ 58,588 ========= ========= ========= Net Income Available to Unitholders Before Cumulative Effect Of Change in Accounting Principle Per Weighted Average Unit Outstanding: Basic ....................................................... $ 2.20 $ 2.41 $ 1.34 ========= ========= ========= Diluted ..................................................... $ 2.19 $ 2.40 $ 1.34 ========= ========= ========= Net Income Available to Unitholders Per Weighted Average Unit Outstanding: Basic ....................................................... $ 2.20 $ 2.41 $ 1.33 ========= ========= ========= Diluted ..................................................... $ 2.19 $ 2.40 $ 1.32 ========= ========= =========
The accompanying notes are an integral part of the financial statements. F-4 58 FIRST INDUSTRIAL, L.P. CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Dollars in thousands)
Unamortized Value of General General Amortization Partner General Partner Limited Of Stock Preferred Partner Restricted Partners Based Total Units Units Units Units Compensation ----------- ----------- ----------- ----------- ------------ ------------- Balance at December 31, 1997 ............. $ 966,177 $ 144,290 $ 677,608 $ (3,417) $ 147,696 $ -- Contributions .......................... 279,208 192,700 37,095 -- 49,413 -- Issuance of General Partner Restricted Units ................... -- -- 2,345 (2,345) -- -- Amortization of General Partner Restricted Units .................... -- 2,450 -- 2,450 -- -- Distributions .......................... (123,555) (26,691) (82,316) -- (14,548) -- Unit Conversions ....................... -- -- 5,150 -- (5,150) -- Net Income ............................. 85,279 26,691 50,041 -- 8,547 -- ----------- ----------- ----------- ------------ ----------- ------ Balance at December 31, 1998 ........... 1,209,559 336,990 689,923 (3,312) 185,958 -- Contributions .......................... 5,115 -- 840 -- 4,275 -- Issuance of General Partner Restricted Units .................... -- -- 2,008 (2,008) -- -- Amortization of General Partner Restricted Units .................... 1,233 -- -- 1,233 -- -- Distributions .......................... (138,534) (28,924) (92,151) -- (17,459) -- Unit Conversions ....................... -- -- 2,618 -- (2,618) -- Net Income ............................. 137,977 28,924 91,661 -- 17,392 -- ----------- ----------- ----------- ----------- ----------- ------ Balance at December 31, 1999 ............. 1,215,350 336,990 694,899 (4,087) 187,548 -- Contributions .......................... 16,156 -- 12,769 -- 3,387 -- Issuance of General Partner Restricted Units .................... -- -- 9,689 (9,689) -- -- Purchase of General Partnership Units .. (11,699) -- (11,699) -- -- -- Repurchase and Retirement of Restricted Units .................... (466) -- (466) -- -- -- Amortization of Stock Based Compensation ........................ 383 -- -- -- -- 383 Amortization of General Partner Restricted Units .................... 4,964 -- -- 4,964 -- -- Distributions .......................... (144,673) (28,924) (97,531) -- (18,218) -- Unit Conversions ....................... -- -- 5,706 -- (5,706) -- Net Income ............................. 129,816 28,924 84,497 -- 16,395 -- ----------- ----------- ----------- ----------- ----------- ------ Balance at December 31, 2000 ............. $ 1,209,831 $ 336,990 $ 697,864 $ (8,812) $ 183,406 $ 383 =========== =========== =========== =========== =========== ======
The accompanying notes are an integral part of the financial statements. F-5 59 FIRST INDUSTRIAL, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Year Ended Year Ended Year Ended December 31, 2000 December 31, 1999 December 31, 1998 ----------------- ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income ............................................................. $ 129,816 $ 137,977 $ 85,279 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation ........................................................... 49,496 52,494 48,889 Amortization of Deferred Financing Costs ........................... 1,683 1,295 851 Other Amortization ................................................. 9,650 5,504 7,155 Valuation Provision on Real Estate Held for Sale ................... 2,169 -- -- Provision for Bad Debts .................................................................. 50 8 649 Equity in Income of Joint Ventures ................................. (571) (302) (45) Distributions from Joint Ventures .................................. 571 302 -- Gain on Sale of Real Estate ........................................ (25,430) (11,904) (2,931) Equity in Income of Other Real Estate Partnerships ................. (33,049) (45,714) (27,583) Distributions from Investment in Other Real Estate Partnerships .... 33,049 45,714 27,583 Cumulative Effect of Change in Accounting Principle ................ -- -- 719 Increase in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net ................................ (20,865) (7,948) (19,039) Increase in Deferred Rent Receivable ............................... (830) (3,510) (3,977) Increase in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits ............... 6,150 9,617 30,352 --------- ---------- --------- Net Cash Provided by Operating Activities .................... 151,889 183,533 147,902 --------- ---------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of and Additions to Investment in Real Estate ............. (460,884) (177,613) (491,650) Net Proceeds from Sales of Investment in Real Estate ............... 379,849 171,133 76,632 Investments in and Advances to Other Real Estate Partnerships ...... (102,695) (138,404) (115,471) Distributions from Other Real Estate Partnerships .................. 102,238 136,317 3,081 Contributions to and Investments in Joint Ventures ................. (37) (2,522) (4,413) Distributions from Joint Ventures .................................. 287 572 -- Funding of Mortgage Loans Receivable ............................... -- (12,467) -- Repayment of Mortgage Loans Receivable ............................. 18,190 433 1,106 (Increase) Decrease in Restricted Cash ............................. (22,100) 6,753 (7,680) --------- ---------- --------- Net Cash Used in Investing Activities ......................... (85,152) (15,798) (538,395) --------- ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Unit Contributions, Net ............................................. 12,478 532 35,685 Unit Distributions .................................................. (113,632) (108,527) (91,796) Purchase of General Partnership Units ............................... (11,699) -- -- Repurchase of Restricted Units ...................................... (466) -- -- Preferred Contributions ............................................. -- -- 192,700 Preferred Unit Distributions ........................................ (21,693) (28,924) (26,691) Repayments on Mortgage Loans Payable ................................ (1,780) (2,967) (1,523) Proceeds from Acquisition Facilities Payable ........................ 290,200 156,600 531,000 Repayments on Acquisition Facilities Payable ........................ (214,200) (197,400) (525,600) Proceeds from Senior Unsecured Debt ................................. -- -- 299,517 Other Proceeds from Senior Unsecured Debt ........................... -- -- 2,760 Other Costs of Senior Unsecured Debt ................................ -- -- (11,890) Cost of Debt Issuance ............................................... (2,323) (973) (4,718) --------- ---------- --------- Net Cash (Used in) Provided by Financing Activities .......... (63,115) (181,659) 399,444 --------- ---------- --------- Net Increase (Decrease) in Cash and Cash Equivalents ................ 3,622 (13,924) 8,951 Cash and Cash Equivalents, Beginning of Period ...................... 22 13,946 4,995 --------- ---------- --------- Cash and Cash Equivalents, End of Period ............................ $ 3,644 $ 22 $ 13,946 ========= ========== =========
The accompanying notes are an integral part of the financial statements. F-6 60 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 1. ORGANIZATION AND FORMATION OF PARTNERSHIP 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 is First Industrial Realty Trust, Inc. (the "Company") with an approximate 84.3% ownership interest at December 31, 2000. The Company also owns a preferred general partnership interest in the Operating Partnership ("Preferred Units") with an aggregate liquidation priority of $350,000. The Company is a real estate investment trust ("REIT") as defined in the Internal Revenue Code. The Company's operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 15.7% interest in the Operating Partnership at December 31, 2000. The Operating Partnership is the sole member of several limited liability companies (the "L.L.C.s") and the majority economic stockholder of FR Development Services, Inc., and holds at least a 99% limited partnership interest (subject in one case as described below to a preferred limited partnership interest) in First Industrial Financing Partnership, L.P. (the "Financing Partnership"), First Industrial Securities, L.P. (the "Securities Partnership"), First Industrial Mortgage Partnership, L.P (the "Mortgage Partnership"), First Industrial Pennsylvania, L.P. (the "Pennsylvania Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg Partnership"), First Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD. and First Industrial Development Services, L.P. (together, the "Other Real Estate Partnerships"). The Operating Partnership, through separate wholly-owned limited liability companies in which it is the sole member, also owns 10% equity interests in and provides asset and property management services to, two joint ventures which invest in industrial properties. The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The general partner of the Securities Partnership, First Industrial Securities Corporation, also owns a preferred limited partnership interest in the Securities Partnership which entitles it to receive a fixed quarterly distribution, and results in it being allocated income in the same amount, equal to the fixed quarterly dividend the Company pays on its 9.5%, $.01 par value, Series A Cumulative Preferred Stock. As of December 31, 2000, the Operating Partnership, the L.L.C.s and FR Development Services, Inc. (hereinafter defined as the "Consolidated Operating Partnership") owned 865 in-service industrial properties, containing an aggregate of approximately 55.6 million square feet (unaudited) of gross leasable area ("GLA"). On a combined basis, as of December 31, 2000, the Other Real Estate Partnerships owned 104 in-service industrial properties, containing an aggregate of approximately 12.6 million square feet (unaudited) of GLA. Of the 104 industrial properties owned by the Other Real Estate Partnerships at December 31, 2000, 22 are held by the Mortgage Partnership, 24 are held by the Pennsylvania Partnership, 22 are held by the Securities Partnership, 22 are held by the Financing Partnership, six are held by the Harrisburg Partnership, six are held by the Indianapolis Partnership, one is held by First Industrial Development Services, L.P. and one is held by TK-SV, LTD. Profits, losses and distributions of the Operating Partnership, the L.L.C.s and Other Real Estate Partnerships are allocated to the general partner and the limited partners, or the members, as applicable, in accordance with the provisions contained within the partnership agreements or ownership agreements, as applicable, of the Operating Partnership, the L.L.C.s and the Other Real Estate Partnerships. F-7 61 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 2. BASIS OF PRESENTATION The consolidated financial statements of the Consolidated Operating Partnership at December 31, 2000 and 1999 and for each of the three years ended December 31, 2000 include the accounts and operating results of the Operating Partnership, the L.L.C.s and FR Development Services, Inc. on a consolidated basis. Such financial statements present the Operating Partnership's limited partnership interests in each of the Other Real Estate Partnerships and the Operating Partnership's 10% equity interests in the September 1998 Joint Venture (hereinafter defined) and the September 1999 Joint Venture (hereinafter defined) under the equity method of accounting. The minority ownership interest in FR Development Services, Inc. is not reflected in the consolidated financial statements due to its immateriality. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In order to conform with generally accepted accounting principles, management, in preparation of the Consolidated Operating Partnership's financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2000 and 1999, and the reported amounts of revenues and expenses for the years ended December 31, 2000, 1999 and 1998. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments. Investment in Real Estate and Depreciation Purchase accounting has been applied when ownership interests in properties were acquired for cash. The historical cost basis of properties has been carried over when certain ownership interests were exchanged for limited partnership units in the Operating Partnership on July 1, 1994 and purchase accounting has been used for all other properties that were subsequently exchanged for limited partnership units in the Operating Partnership. Real estate assets are carried at cost. The Consolidated Operating Partnership reviews its properties on a quarterly basis for impairment and provides a provision if impairments are determined. First, to determine if impairment may exist, the Consolidated Operating Partnership reviews its properties and identifies those which have had either an event of change or event of circumstances warranting further assessment of recoverability. Then, the Consolidated Operating Partnership estimates the fair value of those properties on an individual basis by capitalizing the expected net operating income. Such amounts are then compared to the property's depreciated cost to determine whether an impairment exists. For properties management considers held for sale, the Consolidated Operating Partnership ceases depreciating the properties and values the properties at the lower of depreciated cost or fair value less cost to sell. Interest expense, real estate taxes and other directly related expenses incurred during construction periods are capitalized and depreciated commencing with the date placed in service, on the same basis as the related assets. Depreciation expense is computed using the straight-line method based on the following useful lives: Years ----- Buildings and Improvements............................. 31.5 to 40 Land Improvements...................................... 15 Furniture, Fixtures and Equipment...................... 5 to 10 Construction expenditures for tenant improvements, leasehold improvements and leasing commissions are capitalized and amortized over the terms of each specific lease. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized. F-8 62 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Deferred Financing Costs Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $4,042 and $2,359 at December 31, 2000 and 1999, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date. Investment in and Advances to Other Real Estate Partnerships Investment in Other Real Estate Partnerships represents the Consolidated Operating Partnership's limited partnership interests in and advances to, through the Operating Partnership, the Other Real Estate Partnerships. The Operating Partnership accounts for its Investment in Other Real Estate Partnerships under the equity method of accounting. Under the equity method of accounting, the Operating Partnership's share of earnings or losses of the Other Real Estate Partnerships is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Operating Partnership's Investment in Other Real Estate Partnerships as paid or received, respectively. Investments in Joint Ventures Investments in Joint Ventures represents the Operating Partnership's 10% equity interests in the September 1998 Joint Venture (hereinafter defined) and the September 1999 Joint Venture (hereinafter defined). The Consolidated Operating Partnership, through the Operating Partnership, accounts for its Investments in Joint Ventures under the equity method of accounting. Under the equity method of accounting, the Consolidated Operating Partnership's share of earnings or losses of the September 1998 Joint Venture (hereinafter defined) and the September 1999 Joint Venture (hereinafter defined) is reflected in income as earned and contributions or distributions increase or decrease, respectively, the Consolidated Operating Partnership's Investments in Joint Ventures as paid or received, respectively. Revenue Recognition Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for taxes, insurance and other property operating expenses and is recognized as revenue in the same period the related expenses are incurred by the Consolidated Operating Partnership. The Consolidated Operating Partnership provides an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the consolidated balance sheets are shown net of an allowance for doubtful accounts of $1,707 and $1,657 as of December 31, 2000 and 1999, respectively. Gain on Sale of Real Estate Gain on sale of real estate is recognized using the full accrual method. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual method of accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are removed from the accounts with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Consolidated Operating Partnership after completion of each sale are included in the determination of the gains on sales. F-9 63 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Income Taxes In accordance with partnership taxation, each of the partners are responsible for reporting their shares of taxable income or loss. The Consolidated Operating Partnership is subject to certain state and local income, excise and franchise taxes. The provision for such state and local taxes has been reflected in general and administrative expense in the statement of operations and has not been separately stated due to its insignificance. Earnings Per Unit ("EPU") Net income per weighted average general partnership and limited partnership unit (the "Units") - basic is based on the weighted average Units outstanding. Net income per weighted average Unit - diluted is based on the weighted average Units outstanding plus the effect of the Company's in-the-money employee stock options that result in the issuance of general partnership units. See Note 13 for further disclosures. Fair Value of Financial Instruments The Consolidated Operating Partnership's financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses, mortgage loans payable, acquisition facility payable, senior unsecured debt and certain put and call options issued in conjunction with two offerings of unsecured debt. The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses were not materially different from their carrying or contract values due to the short-term nature of these financial instruments. See Note 6 for the fair values of the mortgage loans payable, acquisition facility payable, senior unsecured debt and certain put and call options issued in conjunction with two initial offerings of unsecured debt. Derivative Financial Instruments Historically, the Consolidated Operating Partnership, through the Operating Partnership, has used interest rate protection agreements (the "Agreements") to fix the interest rate on anticipated offerings of senior unsecured debt, limit the interest rate on existing debt or convert floating rate debt to fixed rate debt. Receipts or payments that result from the settlement of Agreements used to fix the interest rate on anticipated offerings of senior unsecured debt are amortized over the life of the senior unsecured debt. Receipts or payments resulting from the Agreements that were used to limit the interest rate on existing debt are recognized as a component of interest expense. The cost basis of this type of instrument is amortized over the life of the instrument and is recognized in net income as well. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component of interest expense. Any Agreements which no longer qualify for hedge accounting are marked to market and any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Consolidated Operating Partnership's exposure is limited to the current value of the interest rate differential, not the notional amount, and the Consolidated Operating Partnership's carrying value of the Agreements on the balance sheet. Segment Reporting Management views the Consolidated Operating Partnership as a single segment. F-10 64 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Recent Accounting Pronouncements The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133") on June 1, 1998. Statement of Financial Accounting Standards No. 138 "Accounting for Derivative Instruments and Hedging Activities - An Amendment of FAS Statement 133" was issued in June 2000. FAS 133, as amended, is effective for fiscal years beginning after June 15, 2000 as provided by Statement of Financial Accounting Standards No. 137 issued in July 1999. FAS 133, as amended, requires fair value accounting for all derivatives including recognizing all such instruments on the balance sheet with an offsetting amount recorded in the income statement or as part of comprehensive income. FAS 133, as amended, becomes effective for the Consolidated Operating Partnership for the year ending December 31, 2001. FAS 133 did not have an impact on the Consolidated Operating Partnership's consolidated financial position, consolidated results of operations or consolidated cash flows. In March 2000, the FASB issued Statement of Accounting Standards Interpretation 44, Accounting for Certain Transactions Involving Stock Compensation ("Interpretation 44"). Interpretation 44 is generally effective for new stock option grants beginning July 1, 2000. However, the interpretive definition of an employee and certain effective repricing provisions apply to new awards granted after December 15, 1998. Further, the FASB determined that any modifications to current accounting as a result of this guidance are to be recorded prospectively, effective as of July 1, 2000. The Consolidated Operating Partnership has applied the accounting mandated by Interpretation 44 as of July 1, 2000 and there has not been a material impact on the Consolidated Operating Partnership's consolidated financial position, consolidated results of operations or consolidated cash flows. The REIT Modernization Act, which was passed in 1999 and will take effect on January 1, 2001, modifies certain provisions of the Internal Revenue Code of 1986, as amended, with respect to the taxation of REITs. Two key provisions of this tax law change will impact future Consolidated Operating Partnership operations: the availability of a taxable REIT subsidiary which may be wholly-owned directly by a REIT and a reduction in the required level of distributions by a REIT to 90% of ordinary taxable income. The Consolidated Operating Partnership converted its preferred stock subsidiary to a wholly-owned taxable REIT subsidiary in January 2001. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 101 was required to be implemented in the fourth fiscal quarter of 2000. The adoption of SAB 101 did not have an effect on the Consolidated Operating Partnership's results of operations or its financial position as the Consolidated Operating Partnership's revenue recognition practices were compliant with the pronouncement. 4. INVESTMENTS IN AND ADVANCES TO OTHER REAL ESTATE PARTNERSHIPS The investments in and advances to Other Real Estate Partnerships reflects the Operating Partnership's limited partnership equity interests in the entities referred to in Note 1 to these financial statements. Summarized condensed financial information as derived from the financial statements of the Other Real Estate Partnerships is presented below: F-11 65 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 4. INVESTMENTS IN OTHER REAL ESTATE PARTNERSHIPS, CONTINUED Condensed Combined Balance Sheets:
Year Ended --------------------------------- December 31, December 31, 2000 1999 ------------- ------------- ASSETS Assets: Investment in Real Estate, Net ....................... $383,021 $433,970 Real Estate Held for Sale, Net ....................... 46,043 -- Other Assets, Net .................................... 40,218 38,491 -------- -------- Total Assets ................................. $469,282 $472,461 ======== ======== LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage Loans Payable .............................. $ 41,333 $ 41,891 Other Liabilities .................................... 40,714 35,620 -------- -------- Total Liabilities ........................... 82,047 77,511 -------- -------- Partners' Capital .................................... 387,235 394,950 -------- -------- Total Liabilities and Partners' Capital...... $469,282 $472,461 ======== ========
Condensed Combined Statements of Operations:
Year Ended ----------------------------------------------- December 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ Total Revenues ......................................... $ 64,431 $ 59,677 $ 56,221 Property Expenses ...................................... (15,784) (13,685) (13,005) General and Administrative ............................. -- (167) -- Interest Expense ....................................... (3,040) (3,070) (2,971) Amortization of Deferred Financing Costs ............... (67) (67) (65) Depreciation and Other Amortization .................... (11,431) (10,485) (9,597) Valuation Provision on Real Estate Held for Sale ....... (731) -- -- Abandoned Pursuit Costs Charge ......................... -- -- (360) Gain on Sales of Real Estate ........................... 3,866 17,893 2,417 Cumulative Effect of Change in Accounting Principle .... -- -- (858) -------- -------- -------- Net Income ............................................. $ 37,244 $ 50,096 $ 31,782 ======== ======== ========
On January 2, 1998, the Financing Partnership distributed 173 industrial properties with a net book value of approximately $387,647 to the Operating Partnership. During 1999, the Operating Partnership contributed four industrial properties to the Securities Partnership. The four properties contributed by the Operating Partnership to the Securities Partnership had an aggregate net book value of approximately $10,387. F-12 66 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 5. INVESTMENTS IN JOINT VENTURES On September 28, 1998, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is its sole member, entered into a joint venture arrangement (the "September 1998 Joint Venture") with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, owns a 10% equity interest in the September 1998 Joint Venture and provides property and asset management services to the September 1998 Joint Venture. On or after October 2000, under certain circumstances, the Operating Partnership has the option of purchasing all of the properties owned by the September 1998 Joint Venture at a price to be determined in the future. The Consolidated Operating Partnership has not exercised this option. The Consolidated Operating Partnership received approximately $2,199 and $2,315 (net of the intercompany elimination) in acquisition, asset management and property management fees in 2000 and 1999 respectively, from the September 1998 Joint Venture. For the year ended December 31, 2000, the Operating Partnership, through a wholly-owned limited liability company of which it is the sole member, invested approximately $4 and received distributions of approximately $796 from the September 1998 Joint Venture. For the year ended December 31, 1999, the Operating Partnership, through a wholly-owned limited liability company of which it is the sole member, invested approximately $767 and received distributions of approximately $874 from the September 1998 Joint Venture. The Consolidated Operating Partnership accounts for the September 1998 Joint Venture under the equity method of accounting. As of December 31, 2000, the September 1998 Joint Venture owned 138 industrial properties comprising approximately 7.1 million square feet (unaudited) of GLA. On September 2, 1999, the Consolidated Operating Partnership, through a wholly-owned limited liability company in which the Operating Partnership is its sole member, entered into another joint venture arrangement (the "September 1999 Joint Venture") with an institutional investor to invest in industrial properties. The Consolidated Operating Partnership, through wholly-owned limited liability companies in which the Operating Partnership is the sole member, owns a 10% equity interest in the September 1999 Joint Venture and provides property and asset management services to the September 1999 Joint Venture. On or after September 2001, under certain circumstances, the Consolidated Operating Partnership has the option of purchasing all the properties owned by the September 1999 Joint Venture at a price to be determined in the future. The Consolidated Operating Partnership received approximately $557 and $993 (net of the intercompany elimination) in acquisition, asset management and property management fees in 2000 and 1999 respectively, from the September 1999 Joint Venture. For the year ended December 31, 2000, the Operating Partnership, through a wholly-owned limited liability company in which it is the sole member, also invested approximately $33 and received distributions of approximately $62 from the September 1999 Joint Venture. For the year ended December 31, 1999, the Operating Partnership, through a wholly-owned limited liability company in which it is the sole member, also invested approximately $1,755 in the September 1999 Joint Venture. The Consolidated Operating Partnership accounts for the September 1999 Joint Venture under the equity method of accounting. As of December 31, 2000, the September 1999 Joint Venture owned 39 industrial properties comprising approximately 1.2 million square feet (unaudited) of GLA. F-13 67 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE Mortgage Loans Payable, Net On March 20, 1996, the Consolidated Operating Partnership, through the Operating Partnership, entered into a $36,750 mortgage loan (the "CIGNA Loan") that is collateralized by seven properties in Indianapolis, Indiana and three properties in Cincinnati, Ohio. The CIGNA Loan bears interest at a fixed interest rate of 7.50% and provides for monthly principal and interest payments based on a 25-year amortization schedule. The CIGNA Loan matures on April 1, 2003. The CIGNA Loan may be prepaid only after April 1999 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium. On March 20, 1996, the Consolidated Operating Partnership, through the Operating Partnership, assumed a $6,424 mortgage loan and a $2,993 mortgage loan (together, the "Assumed Loans") that are collateralized by 13 properties in Indianapolis, Indiana and one property in Indianapolis, Indiana, respectively. The Assumed Loans bear interest at a fixed rate of 9.25% and provide for monthly principal and interest payments based on a 16.75-year amortization schedule. The Assumed Loans mature on January 1, 2013. The Assumed Loans may be prepaid only after December 1999 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium. On January 31, 1997, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $705 (the "LB Mortgage Loan II"). The LB Mortgage Loan II, which is collateralized by a property located in Long Island, New York, is interest free until February, 1998, at which time the LB Mortgage Loan II bears interest at 8.00% and provides for interest only payments prior to maturity. The LB Mortgage Loan II matures 180 days after the completion of a contingent event relating to the environmental status of the property collateralizing the loan. On October 23, 1997, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $4,153 (the "Acquisition Mortgage Loan I"). The Acquisition Mortgage Loan I is collateralized by a property in Bensenville, Illinois, bears interest at a fixed rate of 8.50% and provides for monthly principal and interest payments based on a 15-year amortization schedule. The Acquisition Mortgage Loan I matures on August 1, 2008. The Acquisition Mortgage Loan I may be prepaid after July 1998 in exchange for a prepayment fee. On December 9, 1997, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $7,997 (the "Acquisition Mortgage Loan II"). The Acquisition Mortgage Loan II is collateralized by ten properties in St. Charles, Louisiana, bears interest at a fixed rate of 7.75% and provides for monthly principal and interest payments based on a 22-year amortization schedule. The Acquisition Mortgage Loan II matures on April 1, 2006. The Acquisition Mortgage Loan II may be prepaid only after April 1999 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium. On December 23, 1997, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the amount of $3,598 (the "Acquisition Mortgage Loan III"). The Acquisition Mortgage Loan III is collateralized by two properties in Houston, Texas, bears interest at a fixed interest rate of 8.875% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan III matures on June 1, 2003. The Acquisition Mortgage Loan III may be prepaid only after June 1998 in exchange for the greater of a 2% prepayment fee or a yield maintenance premium. F-14 68 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE, CONTINUED On April 16, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $2,525 (the "Acquisition Mortgage Loan IV"). The Acquisition Mortgage Loan IV is collateralized by one property in Baltimore, Maryland, bears interest at a fixed rate of 8.95% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan IV matures on October 1, 2006. The Acquisition Mortgage Loan IV may be prepaid only after October 2001 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium. On August 31, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $965 (the "Acquisition Mortgage Loan VI"). The Acquisition Mortgage Loan VI is collateralized by one property in Portland, Oregon, bears interest at a fixed rate of 8.875% and provides for monthly principal and interest payments based on a 20-year amortization schedule. The Acquisition Mortgage Loan VI matures on November 1, 2006. The Acquisition Mortgage Loan VI may be prepaid only after September 2001 in exchange for a 3% prepayment fee. On August 31, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $1,367 (the "Acquisition Mortgage Loan VII"). The Acquisition Mortgage Loan VII is collateralized by one property in Milwaukee, Oregon, bears interest at a fixed rate of 9.75% and provides for monthly principal and interest payments based on a 25-year amortization schedule. The Acquisition Mortgage Loan VII matures on March 15, 2002. The Acquisition Mortgage Loan VII may be prepaid only after December 2001. On November 5, 1998, the Consolidated Operating Partnership, through the Operating Partnership, assumed a mortgage loan in the principal amount of $1,348 (the "Acquisition Mortgage Loan VIII"). The Acquisition Mortgage Loan VIII was collateralized by three properties in Richland Hills, Texas, bore interest at a fixed rate of 8.45% and provided for monthly principal and interest payments based on a 143-month amortization schedule. On August 2, 1999, the Consolidated Operating Partnership paid off and retired the Acquisition Mortgage Loan VIII. Senior Unsecured Debt, Net On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on May 15, 2007 and bears a coupon interest rate of 7.60% (the "2007 Notes"). The issue price of the 2007 Notes was 99.965%. Interest is paid semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2007 Notes prior to issuance. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2007 Notes as an adjustment to the interest expense. The 2007 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. On May 13, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on May 15, 2027, and bears a coupon interest rate of 7.15% (the "2027 Notes"). The issue price of the 2027 Notes was 99.854%. The 2027 Notes are redeemable, at the option of the holders thereof, on May 15, 2002. Interest is paid semi-annually in arrears on May 15 and November 15. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2027 Notes prior to issuance. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2027 Notes as an adjustment to interest expense. The 2027 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. F-15 69 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE, CONTINUED On May 22, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on May 15, 2011 and bears a coupon interest rate of 7.375% (the "2011 Notes"). The issue price of the 2011 Notes was 99.348%. Interest is paid semi-annually in arrears on May 15 and November 15. The 2011 Notes are redeemable, at the option of the holder thereof, on May 15, 2004 (the "Put Option"). The Consolidated Operating Partnership received approximately $1,781 of proceeds from the holder of the 2011 Notes as consideration for the Put Option. The Consolidated Operating Partnership amortizes the Put Option amount over the life of the Put Option as an adjustment to interest expense. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2011 Notes prior to issuance. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2011 Notes as an adjustment to interest expense. The 2011 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. On November 20, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $50,000 of senior unsecured debt which matures on November 21, 2005 and bears a coupon interest rate of 6.90% (the "2005 Notes"). The issue price of the 2005 Notes was 100%. Interest is paid semi-annually in arrears on May 21 and November 21. The 2005 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $150,000 of senior unsecured debt which matures on December 1, 2006 and bears a coupon interest rate of 7.00% (the "2006 Notes"). The issue price of the 2006 Notes was 100%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership, through the Operating Partnership, also entered into an interest rate protection agreement which was used to fix the interest rate on the 2006 Notes prior to issuance. The settlement amount of the interest rate protection agreement is being amortized over the life of the 2006 Notes as an adjustment to interest expense. The 2006 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. On December 8, 1997, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of senior unsecured debt which matures on December 1, 2017 and bears a coupon interest rate of 7.50% (the "2017 Notes"). The issue price of the 2017 Notes was 99.808%. Interest is paid semi-annually in arrears on June 1 and December 1. The Consolidated Operating Partnership is amortizing the debt issue discount over the life of the 2017 Notes as an adjustment to interest expense. The 2017 Notes may be redeemed at any time at the option of the Consolidated Operating Partnership, in whole or in part, at a redemption price equal to the sum of the principal amount of the 2017 Notes being redeemed plus accrued interest thereon to the redemption date and any make-whole amount, as defined in the Prospectus Supplement Relating to the 2017 Notes. The 2017 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. On March 31, 1998, the Consolidated Operating Partnership, through the Operating Partnership, issued $100,000 of Dealer remarketable securities which mature on April 5, 2011 and bear a coupon interest rate of 6.50% (the "2011 Drs."). The issue price of the 2011 Drs. was 99.753%. Interest is paid semi-annually in arrears on April 5 and October 5. The 2011 Drs. are callable (the "Call Option"), at the option of J.P. Morgan Securities, Inc., as Remarketing Dealer (the "Remarketing Dealer"), on April 5, 2001 (the "Remarketing Date"). The Consolidated Operating Partnership received approximately $2,760 of proceeds from the Remarketing Dealer as consideration for the Call Option. The Consolidated Operating Partnership is amortizing the proceeds over the life of the Call Option as an adjustment to interest expense. If the holder of the Call Option calls the 2011 Drs. and elects to remarket the 2011 Drs., then after the Remarketing Date, the interest rate on the 2011 Drs. will be reset at a fixed rate until April 5, 2011 based upon a predetermined formula as disclosed in the related Prospectus Supplement. If the Remarketing Dealer elects not to remarket the 2011 Drs., then the Consolidated Operating Partnership will be required to repurchase, on the Remarketing Date, any 2011 Drs. that have not been purchased by the Remarketing Dealer at 100% of the principal amount thereof, plus accrued and unpaid interest, if any. The Consolidated Operating Partnership also settled an interest rate protection agreement, in the notional amount of $100,000, which F-16 70 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE, CONTINUED was used to fix the interest rate on the 2011 Drs. prior to issuance. The debt issue discount and the settlement amount of the interest rate protection agreement are being amortized over the life of the 2011 Drs. as an adjustment to interest expense. The 2011 Drs. contain certain covenants including limitations on incurrence of debt and debt service coverage. On July 14, 1998, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of senior unsecured debt which matures on July 15, 2028 and bears a coupon interest rate of 7.60% (the "2028 Notes"). The issue price of the 2028 Notes was 99.882%. Interest is paid semi-annually in arrears on January 15 and July 15. The Consolidated Operating Partnership, through the Operating Partnership, also settled interest rate protection agreements, in the notional amount of $150,000, which were used to fix the interest rate on the 2028 Notes prior to issuance. The debt issue discount and the settlement amount of the interest rate protection agreements are being amortized over the life of the 2028 Notes as an adjustment to the interest expense. The 2028 Notes contain certain covenants including limitation on incurrence of debt and debt service coverage. Approximately $50,000 of the 2028 Notes was purchased, through a broker/dealer, by an entity in which a Director of the Company owns greater than a ten percent interest. Acquisition Facilities In December 1997, the Operating Partnership terminated its $200,000 unsecured revolving credit facility and entered into a $300,000 unsecured revolving credit facility (the "1997 Unsecured Acquisition Facility") which bore interest at LIBOR plus .80% or a "Corporate Base Rate", at the Operating Partnership's election, and provided for interest only payments until maturity. In June 2000, the Operating Partnership amended the 1997 Unsecured Acquisition Facility which extended the maturity date to June 30, 2003 and includes the right, subject to certain conditions, to increase the aggregate commitment up to $400,000 (the "2000 Unsecured Acquisition Facility"). The Operating Partnership may borrow under the 2000 Unsecured Acquisition Facility to finance the acquisition and development of additional properties and for other corporate purposes, including to obtain additional working capital. The 2000 Unsecured Acquisition Facility contains certain financial covenants relating to debt service coverage, market value net worth, dividend payout ratio and total funded indebtedness. F-17 71 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT FOR PER UNIT DATA) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE, CONTINUED The following table discloses certain information regarding the Consolidated Operating Partnership's mortgage loans, senior unsecured debt and acquisition facility payable:
OUTSTANDING BALANCE AT ACCRUED INTEREST PAYABLE AT INTEREST RATE AT ----------------------------- ----------------------------- ---------------- DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, MATURITY 2000 1999 2000 1999 2000 DATE ------------ ------------ ------------ ------------ ---------------- -------- MORTGAGE LOANS PAYABLE, NET CIGNA Loan $ 33,952 $ 34,636 $ 212 $ 216 7.500% 4/01/03 Assumed Loans 7,995 8,343 -- -- 9.250% 1/01/13 LB Mortgage Loan II 705 705 5 -- 8.000% (1) Acquisition Mortgage Loan I 3,294 3,591 -- -- 8.500% 8/01/08 Acquisition Mortgage Loan II 7,432 7,630 -- -- 7.750% 4/01/06 Acquisition Mortgage Loan III 3,214 3,350 -- -- 8.875% 6/01/03 Acquisition Mortgage Loan IV 2,364 2,423 17 -- 8.950% 10/01/06 Acquisition Mortgage Loan VI 957 (2) 991 (2) -- -- 8.875% 11/01/06 Acquisition Mortgage Loan VII 1,329 (2) 1,390 (2) -- -- 9.750% 3/15/02 --------- --------- -------- -------- Total $ 61,242 $ 63,059 $ 234 $ 216 ========= ========= ======== ======== SENIOR UNSECURED DEBT, NET 2005 Notes $ 50,000 $ 50,000 $ 383 $ 383 6.900% 11/21/05 2006 Notes 150,000 150,000 875 875 7.000% 12/01/06 2007 Notes 149,966 (3) 149,961 (3) 1,457 1,457 7.600% 5/15/07 2011 Notes 99,517 (3) 99,470 (3) 942 942 7.375% 5/15/11 (4) 2017 Notes 99,838 (3) 99,828 (3) 625 625 7.500% 12/01/17 2027 Notes 99,872 (3) 99,867 (3) 914 914 7.150% 5/15/27 (5) 2028 Notes 199,783 (3) 199,776 (3) 7,009 7,009 7.600% 7/15/28 2011 Drs 99,805 (3) 99,786 (3) 1,553 1,553 6.500% (7) 4/05/11 (6) --------- --------- -------- -------- Total $ 948,781 $ 948,688 $ 13,758 $ 13,758 ========= ========= ======== ======== ACQUISITION FACILITY PAYABLE 1997 Unsecured Acquisition Facility $ -- $ 94,000 $ -- $ 663 (8) (8) ========= ========= ======== ======== 2000 Unsecured Acquisition Facility $ 170,000 $ --- $ 1,359 $ -- 7.26% 6/30/03 ========= ========= ======== ========
(1) The maturity date of the LB Mortgage Loan II is based on a contingent event relating to the environmental status of the property collateralizing the loan. (2) At December 31, 2000, the Acquisition Mortgage Loan VI and the Acquisition Mortgage Loan VII are net of unamortized premiums of $49 and $35, respectively. At December 31, 1999, the Acquisition Mortgage Loan VI and the Acquisition Mortgage Loan VII are net of unamortized premiums of $57 and $64, respectively. (3) At December 31, 2000, the 2007 Notes, 2011 Notes, 2017 Notes, 2027 Notes, 2028 Notes and the 2011 Drs. are net of unamortized discounts of $33, $483, $162, $128, $217 and $195, respectively. At December 31, 1999, the 2007 Notes, 2011 Notes, 2017 Notes, 2027 Notes, 2028 Notes and the 2011 Drs. are net of unamortized discounts of $39, $530, $172, $133, $224 and $214, respectively. (4) The 2011 Notes are redeemable at the option of the holder thereof, on May 15, 2004. (5) The 2027 Notes are redeemable at the option of the holders thereof, on May 15, 2002. (6) The 2011 Drs. are required to be redeemed by the Operating Partnership on April 5, 2001 if the Remarketing Dealer elects not to remarket the 2011 Drs. (7) The 2011 Drs. bear interest at an annual rate of 6.50% to the Remarketing Date. If the holder of the Call Option calls the 2011 Drs. and elects to remarket the 2011 Drs., then after the Remarketing Date, the interest rate on the 2011 Drs. will be reset at a fixed rate until April 5, 2011 based on a predetermined formula as disclosed in the related Prospectus Supplement. (8) The 1997 Unsecured Acquisition Facility was amended and restated in June 2000. F-18 72 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 6. MORTGAGE LOANS PAYABLE, NET, SENIOR UNSECURED DEBT, NET AND ACQUISITION FACILITIES PAYABLE, CONTINUED Fair Value At December 31, 2000 and 1999, the fair value of the Consolidated Operating Partnership's mortgage loans payable, senior unsecured debt, acquisition facility payable, Put Option and Call Option were as follows:
December 31, 2000 December 31, 1999 -------------------------- --------------------------- Carrying Fair Carrying Fair Amount Value Amount Value ----------- ------------ ------------- ------------ Mortgage Loans Payable......... $ 61,242 $ 62,715 $ 63,059 $ 61,445 Senior Unsecured Debt.......... 948,781 918,865 948,688 859,455 Acquisition Facility Payable... 170,000 170,000 94,000 94,000 Put Option and Call Option..... 1,089 12,150 2,263 3,950 ----------- ---------- ----------- ----------- Total.......................... 1,181,112 $1,163,730 $ 1,108,010 $ 1,018,850 =========== ========== =========== ===========
The fair value of the Consolidated Operating Partnership's mortgage loans payable and Put and Call Option were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value of the acquisition facility payable was not materially different than its carrying value due to the variable interest rate nature of the loan. The fair value of the senior unsecured debt was determined by quoted market prices. The following is a schedule of the stated maturities and scheduled principal payments of the mortgage loans, senior unsecured debt and acquisition facility payable for the next five years ending December 31, and thereafter: Amount ------------- 2001.................. $ 1,946 2002.................. 3,325 2003.................. 206,532 2004.................. 1,319 2005.................. 51,438 Thereafter............ 915,893 ------------ Total................. $ 1,180,453 ============ The maturity date of the LB Mortgage Loan II is based on a contingent event. As a result, the LB Mortgage Loan II is not included in the preceding table. F-19 73 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 7. PARTNERS' CAPITAL The Operating Partnership has issued general partnership units and limited partnership units (together, the "Units") and preferred general partnership units. The general partnership units resulted from capital contributions from the Company. The limited partnership units are issued in conjunction with the acquisition of certain properties (See discussion below). Subject to lock-up periods and certain adjustments, limited partnership units are convertible into common stock, par value $.01, of the Company on a one-for-one basis or cash at the option of the Company. The preferred general partnership units result from preferred capital contributions from the Company. The preferred general partnership units have an aggregate liquidation priority of $350,000. The Operating Partnership is required to make all required distributions on the preferred general partnership units prior to any distribution of cash or assets to the holders of the general and limited partnership units. The consent of the holder of the preferred general partnership units is required to alter such holder's rights as to allocations and distributions, to alter or modify such holder's rights with respect to redemption, to cause the early termination of the Operating Partnership, or to amend the provisions of the partnership agreement which requires such consent. Unit Contributions: On April 23, 1998, the Company issued, in a private placement, 1,112,644 shares of $.01 par value Common Stock (the "April 1998 Equity Offering"). The net proceeds of approximately $33,141 received from the April 1998 Equity Offering were contributed to the Operating Partnership in exchange for 1,112,644 Units in the Operating Partnership and are reflected in the Consolidated Operating Partnership's financial statements as a general partner contribution. For the year ended December 31, 1998, the Operating Partnership issued 1,515,983 Units valued, in the aggregate, at $49,413 in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership's financial statements as limited partner contributions. For the year ended December 31, 1999, the Operating Partnership issued 173,070 Units valued, in the aggregate, at $4,273 in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership's financial statements as limited partner contributions. For the year ended December 31, 2000, the Operating Partnership issued 114,715 Units valued, in the aggregate, at $3,475 in exchange for interests in certain properties. These contributions are reflected in the Consolidated Operating Partnership's financial statements as limited partner contributions. For the year ended December 31, 1998, certain employees of the Company exercised 108,500 non-qualified employee stock options. Gross proceeds to the Company approximated $2,544. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership's financial statements as a general partner contribution. For the year ended December 31, 1999, certain employees of the Company exercised 33,000 non-qualified employee stock options. Gross proceeds to the Company approximated $732. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership's financial statements as a general partner contribution. For the year ended December 31, 2000, certain employees of the Company exercised 518,550 non-qualified employee stock options. Gross proceeds to the Company approximated $12,478. The gross proceeds from the option exercises were contributed to the Operating Partnership in exchange for Units and are reflected in the Consolidated Operating Partnership's financial statements as a general partner contribution. Preferred Contributions: On May 14, 1997, the Company issued 4,000,000 Depositary Shares, each representing 1/100th of a share of the Company's 8 3/4%, $.01 par value, Series B Cumulative Preferred Stock (the "Series B Preferred Stock"), at an initial offering price of $25 per Depositary Share. The net proceeds of $96,292 received from the Series B Preferred Stock were contributed to the Operating Partnership in exchange for 8 3/4% Series B Cumulative Preferred Units (the F-20 74 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 7. PARTNERS' CAPITAL, CONTINUED "Series B Preferred Units") and are reflected in the Consolidated Operating Partnership's financial statements as a general partner preferred unit contribution. On June 6, 1997, the Company issued 2,000,000 Depositary Shares, each representing 1/100th of a share of the Company's 8 5/8%, $.01 par value, Series C Cumulative Preferred Stock (the "Series C Preferred Stock"), at an initial offering price of $25 per Depositary Share. The net proceeds of $47,997 received from the Series C Preferred Stock were contributed to the Operating Partnership in exchange for 8 5/8% Series C Cumulative Preferred Units (the "Series C Preferred Units") and are reflected in the Consolidated Operating Partnership's financial statements as a general partner preferred unit contribution. On February 4, 1998, the Company issued 5,000,000 Depositary Shares, each representing 1/100th of a share of the Company's 7.95%, $.01 par value, Series D Cumulative Preferred Stock (the "Series D Preferred Stock"), at an initial offering price of $25 per Depositary Share. The net proceeds of $120,562 received from the Series D Preferred Stock were contributed to the Operating Partnership in exchange for 7.95% Series D Cumulative Preferred Units (the "Series D Preferred Units") and are reflected in the Consolidated Operating Partnership's financial statements as a general partner preferred unit contribution. On March 18, 1998, the Company issued 3,000,000 Depositary Shares, each representing 1/100th of a share of the Company's 7.90%, $.01 par value, Series E Cumulative Preferred Stock (the "Series E Preferred Stock"), at an initial offering price of $25 per Depositary Share. The net proceeds of $72,138 received from the Series E Preferred Stock were contributed to the Operating Partnership in exchange for 7.90% Series E Cumulative Preferred Units (the "Series E Preferred Units") and are reflected in the Consolidated Operating Partnership's financial statements as a general partner preferred unit contribution. Distributions: On January 24, 2000, the Operating Partnership paid a fourth quarter 1999 distribution of $.62 per Unit, totaling approximately $28,164. On April 17, 2000, the Operating Partnership paid a first quarter 2000 distribution of $.62 per Unit, totaling approximately $28,462. On July 17, 2000, the Operating Partnership paid a second quarter 2000 distribution of $.62 per Unit, totaling approximately $28,601. On October 23, 2000, the Operating Partnership paid a third quarter 2000 distribution of $.62 per Unit, totaling approximately $28,409. On January 22, 2001, the Operating Partnership paid a fourth quarter 2000 distribution of $.6575 per Unit, totaling approximately $30,275. On March 31, 2000, June 30, 2000, October 2, 2000 and January 2, 2001, the Operating Partnership paid quarterly 2000 distributions of $54.688 per unit on its Series B Preferred Units, $53.906 per unit on its Series C Preferred Units, $49.687 per unit on its Series D Preferred Units and $49.375 per unit on its Series E Preferred Units. The preferred unit distributions paid on March 31, 2000, June 30, 2000, October 2, 2000 and January 2, 2001 totaled, in the aggregate, approximately $7,231 per quarter. Repurchase of Units: In March 2000, the Company's Board of Directors approved the repurchase of up to $100,000 of the Company's common stock. The Company may make purchases from time to time, if price levels warrant, in the open market or in privately negotiated transactions. During the year ended December 31, 2000, the Company repurchased 394,300 shares of its common stock at a weighted average price per share of approximately $29.67. The Operating Partnership repurchased general partnership Units from the Company in the same amount. 8. ACQUISITION AND DEVELOPMENT OF REAL ESTATE In 1998, the Consolidated Operating Partnership acquired 221 industrial properties comprising approximately 11.0 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $454,778 and completed the development of seven properties comprising approximately 1.0 million square feet (unaudited) of GLA at a cost of approximately $37,194. F-21 75 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 8. ACQUISITION AND DEVELOPMENT OF REAL ESTATE, CONTINUED In 1999, the Consolidated Operating Partnership acquired 16 in-service industrial properties and one industrial property under redevelopment comprising, in the aggregate, approximately 1.3 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $47,516 and completed the development of 16 properties and one expansion comprising approximately 2.4 million square feet (unaudited) of GLA at a cost of approximately $81,925. In 2000, the Consolidated Operating Partnership acquired 82 in-service industrial properties and one industrial property under redevelopment comprising, in the aggregate, approximately 5.6 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $314,307 and completed the development of 20 properties and one redevelopment comprising approximately 3.6 million square feet (unaudited) of GLA at a cost of approximately $125,794. 9. SALES OF REAL ESTATE AND REAL ESTATE HELD FOR SALE In 1998, the Consolidated Operating Partnership, through the Operating Partnership, sold 36 in-service properties and several land parcels. The aggregate gross sales price of these sales totaled approximately $77,657. The gain on sales totaled approximately $2,931. In 1999, the Consolidated Operating Partnership, through the Operating Partnership, sold 44 in-service industrial properties, one property under development and several land parcels. The aggregate gross sales price totaled approximately $178,304. Approximately $4,835 and $23,308 of the gross proceeds from the sales of these properties was received from the September 1998 Joint Venture and Financing Partnership, respectively (the Consolidated Operating Partnership sold two properties to the September 1998 Joint Venture and two properties to the Financing Partnership, in each case, at the Consolidated Operating Partnership's approximate net book value). The gain on sales totaled approximately $11,904. In 2000, the Consolidated Operating Partnership, through the Operating Partnership, sold 105 industrial properties and several land parcels. The aggregate gross sales price of these sales totaled approximately $404,046. The gain on sales totaled approximately $25,430. The Consolidated Operating Partnership has an active sales program through which it is continually engaged in identifying and evaluating its current portfolio for potential sales candidates in order to redeploy capital. At December 31, 2000, the Consolidated Operating Partnership had 74 industrial properties comprising approximately 6.9 million square feet (unaudited) of GLA held for sale. There can be no assurance that such properties held for sale will be sold. The following table discloses certain information regarding the 74 industrial properties held for sale by the Consolidated Operating Partnership. Year Ended -------------------------------- 2000 1999 1998 -------- -------- -------- Total Revenues .................... $ 31,120 $ 29,504 $ 27,539 Operating Expenses ................ (8,363) (7,940) (7,070) Depreciation and Amortization ..... (3,157) (5,437) (5,001) -------- -------- -------- Income from Operations ............ $ 19,600 $ 16,127 $ 15,468 ======== ======== ======== In 2000, the Consolidated Operating Partnership recognized a valuation provision on real estate held for sale of $2,169 relating to the Consolidated Operating Partnership's exit market portfolio of properties in Grand Rapids, Michigan. The fair value was determined by a quoted market price less transaction costs. F-22 76 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 10. DISPOSITION OF INTEREST RATE PROTECTION AGREEMENTS In November 1998, the Consolidated Operating Partnership, through the Operating Partnership, settled its remaining interest rate protection agreement which was scheduled to expire on January 4, 1999. This agreement was entered into in December 1997 in anticipation of 1998 senior unsecured debt offerings. Due to the changing market conditions and the Consolidated Operating Partnership's expectation that it would not issue debt securities associated with the interest rate protection agreement, the Consolidated Operating Partnership settled its position. As a result, the Consolidated Operating Partnership recognized an expense of approximately $8,475 associated with the termination of the interest rate protection agreement in the fourth quarter of 1998. 11. RESTRUCTURING CHARGE In connection with management's plan to improve operating efficiencies and reduce costs, the Consolidated Operating Partnership recorded a restructuring charge of approximately $6,858 in 1998. The restructuring charge is comprised of severance costs, of which approximately $1,206 is non-cash relating to immediate vesting of restricted Units. The cash portion of the severance costs was paid in fiscal year 1999. F-23 77 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 12. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS Supplemental disclosure of cash flow information:
Year Ended Year Ended Year Ended December 31, 2000 December 31, 1999 December 31, 1998 ----------------- ----------------- ----------------- Interest paid, net of capitalized interest ........... $ 80,171 $ 76,775 $ 59,510 ======== ======== ======== Interest capitalized ................................. $ 5,203 $ 5,568 $ 3,643 ======== ======== ======== Supplemental Schedule of Noncash Investing and Financing Activities: Distribution payable on Units ........................ $ 30,281 $ 28,164 $ 27,081 ======== ======== ======== Distribution payable on Preferred Units .............. $ 7,231 $ -- $ -- ======== ======== ======== Exchange of Limited Partnership Units for General Partnership Units Limited Partnership Units....................... $ (5,706) $ (2,618) $ (5,150) General Partnership Units ...................... 5,706 2,618 5,150 -------- -------- -------- $ -- $ -- $ -- ======== ======== ========
In conjunction with the property and land acquisitions, the following assets and liabilities were assumed: Purchase of real estate .................. $ 314,307 $ 47,516 $ 454,778 Mortgage loans ........................... -- -- (6,222) Operating partnership units .............. -- -- (49,413) Accounts payable and Accrued expenses .... (3,820) (274) (4,171) --------- --------- --------- $ 310,487 $ 47,242 $ 394,972 ========= ========= =========
In conjunction with certain property sales, the Operating Partnership provided seller financing on behalf of certain buyers: Notes receivable............... $ 7,749 $ 12,060 $ -- ====== ======== ======== In conjunction with the distribution of 173 properties from the Financing Partnership to the Operating Partnership on January 2, 1998, the following assets and liabilities were assumed: Investment in real estate .......................... $382,190 Tenant accounts receivable ......................... 3,017 Deferred rent receivable ........................... 4,689 Other assets ....................................... 6,209 Accounts payable and accrued expenses .............. (5,920) Rents received in advance and security deposits .... (2,538) -------- Investments in other real estate partnerships ...... $387,647 ======== In conjunction with the contribution of four properties from the Operating Partnership to the Securities Partnership during 1999, the following assets and liabilities were contributed: Investment in real estate, net ................... $ 10,387 Tenant accounts receivable ....................... (21) Deferred rent receivable ......................... 40 Other assets, net ................................ 17 Accounts payable and accrued expenses ............ (100) -------- Investment in other real estate partnerships ..... $ 10,323 ======== F-24 78 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 13. EARNINGS PER UNIT The computation of basic and diluted EPU is presented below:
Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------- Numerator: Income Before Cumulative Effect of Change in Accounting Principle $ 129,816 $ 137,977 $ 85,998 Less: Preferred Distributions ....................................... (28,924) (28,924) (26,691) ----------- ----------- ------------ Net Income Available to Unitholders Before Cumulative Effect of Change in Accounting Principle - For Basic and Diluted EPU ........................................ 100,892 109,053 59,307 Cumulative Effect of Change in Accounting Principle .................... -- -- (719) ----------- ----------- ------------ Net Income Available to Unitholders - For Basic and Diluted EPU ........................................ $ 100,892 $ 109,053 $ 58,588 =========== =========== ============ Denominator: Weighted Average Units - Basic ......................................... 45,928,359 45,270,821 44,099,879 Effect of Dilutive Securities: Employee and Director Common Stock Options of the Company that result in the issuance of general partnership units ........................................................ 256,069 101,801 182,515 ----------- ----------- ------------ Weighted Average Units Outstanding - Diluted ........................... 46,184,428 45,372,622 44,282,394 =========== =========== ============ Basic EPU: Net Income Available to Unitholders Before Cumulative Effect of Change in Accounting Principle ..................................... $ 2.20 $ 2.41 $ 1.34 =========== =========== ============ Cumulative Effect of Change in Accounting Principle .................... $ -- $ -- $ (.02) =========== =========== ============ Net Income Available to Unitholders .................................... $ 2.20 $ 2.41 $ 1.33 =========== =========== ============ Diluted EPU: Net Income Available to Unitholders Before Cumulative Effect of Change in Accounting Principle ..................................... $ 2.19 $ 2.40 $ 1.34 =========== =========== ============ Cumulative Effect of Change in Accounting Principle .................... $ -- $ -- $ (.02) =========== =========== ============ Net Income Available to Unitholders .................................... $ 2.19 $ 2.40 $ 1.32 =========== =========== ============
14. FUTURE RENTAL REVENUES The Consolidated Operating Partnership's properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under noncancelable operating leases in effect as of December 31, 2000 are approximately as follows: 2001............... $225,505 2002............... 185,449 2003............... 140,927 2004............... 104,701 2005............... 69,699 Thereafter......... 165,032 -------- Total........ $891,313 ======== F-25 79 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 15. EMPLOYEE BENEFIT PLANS The Company maintains two stock incentive plans, (the "Stock Incentive Plans"), which are administered by the Compensation Committee of the Board of Directors of the Company. There are approximately 7.7 million shares reserved under the Stock Incentive Plans. Only officers and employees of the Company and its affiliates generally are eligible to participate in the Stock Incentive Plans. However, independent Directors of the Company receive automatic annual grants of options to purchase 10,000 shares at a per share exercise price equal to the fair market value of a share on the date of grant. The Stock Incentive Plans authorize (i) the grant of stock options that qualify as incentive stock options under Section 422 of the Code, (ii) the grant of stock options that do not so qualify, (iii) restricted stock awards, (iv) performance share awards and (v) dividend equivalent rights. The exercise price of stock options will be determined by the Compensation Committee. Special provisions apply to awards granted under the Stock Incentive Plans in the event of a change in control in the Company. As of December 31, 2000, stock options covering 3.0 million shares were outstanding and stock options covering 3.5 million shares were available under the Stock Incentive Plans. The outstanding stock options generally vest over one to three year periods and have lives of ten years. Stock option transactions are summarized as follows:
Weighted Average Exercise Price Exercise Price Share per Share Price per Share ---------- ---------------- ---------------- Outstanding at December 31, 1997 ........................ 1,331,500 $ 25.67 $18.25-$30.375 Granted ............................................... 5,248,200 $ 34.92 $24.00-$35.81 Exercised or Converted ............................. (165,500) $ 23.14 $20.25-$30.38 Expired or Terminated .............................. (1,417,200) $ 35.42 $22.75-$35.81 ---------- Outstanding at December 31, 1998 ........................ 4,997,000 $ 32.70 $18.25-$35.81 Granted ............................................... 1,041,567 $ 25.35 $25.13-$27.69 Exercised or Converted .............................. (68,000) $ 22.79 $20.25-$25.13 Expired or Terminated .............................. (3,194,300) $ 35.31 $22.75-$35.81 ---------- Outstanding at December 31, 1999 ...................... 2,776,267 $ 27.04 $18.25-$31.13 Granted............................................... 937,250 $ 27.34 $25.13-$30.00 Exercised or Converted ............................. (605,550) $ 24.58 $18.25-$31.13 Expired or Terminated .............................. (84,500) $ 28.63 $25.13-$31.13 --------- Outstanding at December 31, 2000 ...................... 3,023,467 $ 27.61 $18.25-$31.13 =========
The following table summarizes currently outstanding and exercisable options as of December 31, 2000:
Options Outstanding Options Exercisable ---------------------------------------------------- -------------------------------- Weighted Average Weighted Weighted Remaining Average Average Number Contractual Exercise Number Exercise Range of Exercise Price Outstanding Life Price Exercisable Price - --------------------------- -------------- ---------------- -------------- -------------- ------------- $18.25-$25.13 911,900 6.7 $ 23.99 911,900 $23.99 $26.44-$31.13 2,111,567 8.2 $ 29.17 1,195,417 $30.48
The Consolidated Operating Partnership applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), in accounting for its Stock Incentive Plans. Under APB 25, compensation expense is not recognized for options issued in which the strike price is equal to the fair value of the Company's stock on the date of grant. Certain options issued in 2000 were issued with a strike price less than the fair value of the Company's stock on the date of grant. Compensation expense is being recognized for the intrinsic value of these options determined at the date of grant over the vesting period. F-26 80 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 15. EMPLOYEE BENEFIT PLANS, CONTINUED Had compensation expense for the Company's Stock Incentive Plans been determined based upon the fair value at the grant date for awards under the Stock Incentive Plans consistent with the methodology prescribed under Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation", net income and earnings per share would have been the pro forma amounts indicated in the table below:
For the Year Ended ------------------------------------------ 2000 1999 1998 ----------- ----------- ------------ Net Income Available to Unitholders - as reported ........................ $ 100,892 $ 109,053 $ 58,588 Net Income Available to Unitholders - pro forma .......................... $ 99,947 $ 107,185 $ 56,801 Net Income Available to Unitholders per Unit - as reported- Basic ........ $ 2.20 $ 2.41 $ 1.33 Net Income Available to Unitholders per Unit - pro forma- Basic .......... $ 2.18 $ 2.37 $ 1.29 Net Income Available to Unitholders per Unit - as reported - Diluted ..... $ 2.19 $ 2.40 $ 1.32 Net Income Available to Unitholders per Unit - pro forma - Diluted ...... $ 2.16 $ 2.36 $ 1.28
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Expected dividend yield ...................... 8.33% 8.88% 8.01% Expected stock price volatility .............. 20.30% 20.55% 20.56% Risk-free interest rate ...................... 6.18% 5.30% 5.64% Expected life of options...................... 3.05 2.73 3.74
The weighted average fair value of options granted during 2000, 1999 and 1998 is $2.91, $1.79 and $2.95 per option, respectively. In September 1994, the Board of Directors approved and the Company adopted a 401(k)/Profit Sharing Plan. Under the Company's 401(k)/Profit Sharing Plan, all eligible employees may participate by making voluntary contributions. The Company may make, but is not required to make, matching contributions. For the years ended December 31, 2000, 1999 and 1998, the Company, through the Operating Partnership, made matching contributions of approximately $211, $208 and $198, respectively. In March 1996, the Board of Directors approved and the Company adopted a Deferred Income Plan (the "Plan"). At December 31, 2000, 765,159 units were outstanding. The expense related to these deferred income benefits is included in general and administrative expenses in the consolidated statements of operations. During 1998, the Company awarded 51,850 shares of restricted Common Stock to certain employees and 2,769 shares of restricted Common Stock to certain Directors. Other employees of the Company converted certain in-the-money employee stock options to 13,602 shares of restricted Common Stock. The Operating Partnership issued Units to the Company in the same amount. These restricted shares of Common Stock had a fair value of $2,345 on the date of grant. The restricted Common Stock vests over a period from five to ten years. Compensation expense will be charged to earnings in the Operating Partnership's consolidated statements of operations over the vesting period. During 1999, the Company awarded 72,300 shares of restricted Common Stock to certain employees and 3,504 shares of restricted Common Stock to certain Directors. Other employees of the Company converted certain in-the-money employee stock options to 5,224 shares of restricted Common Stock. The Operating Partnership issued Units to the Company in the same amount. These restricted shares of Common Stock had a fair value of $2,121 on the date of grant. The restricted Common Stock vests over a period from five to ten years. Compensation expense will be charged to earnings in the Operating Partnership's consolidated statements of operations over the vesting period. F-28 81 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 15. EMPLOYEE BENEFIT PLANS, CONTINUED During 2000, the Company awarded 355,139 shares of restricted Common Stock to certain employees and 3,663 shares of restricted Common Stock to certain Directors. Other employees of the Company converted certain in-the-money employee stock options to 14,903 shares of restricted Common Stock. The Operating Partnership issued Units to the Company in the same amount. These restricted shares of Common Stock had a fair value of $9,689 on the date of grant. The restricted Common Stock vests over a period from three to ten years. Compensation expense will be charged to earnings in the Operating Partnership's consolidated statements of operations over the vesting period. 16. RELATED PARTY TRANSACTIONS On November 19, 1998, the Consolidated Operating Partnership, through the Operating Partnership, sold two industrial properties to two limited partnerships, Roosevelt Glen Corporate Center ("Roosevelt") and Hartford Center Investment Company ("Hartford"), for a total consideration of approximately $8,341. An entity in which one of the shareholders is the Chairman of the Board of Directors ("TSIC") has a 11.638% general partner interest in Roosevelt. TSIC has a 12.39% general partner interest in Hartford. On December 4, 1998, the Consolidated Operating Partnership, through the Operating Partnership, sold one industrial property to Eastgate Shopping Center Investment Co. ("Eastgate"), a limited partnership, for a total consideration of approximately $2,521. TSIC has a 12.972% general partner interest in Eastgate. In each case, the purchaser had the option of selling the properties back to the Operating Partnership and the Operating Partnership had the option of buying the properties back from the purchaser for a stipulated period of time. In January 2000, the purchasers exercised their options to sell the properties back to the Operating Partnership. The gain on sale was deferred due to the existence of these options. On September 2, 1999, the September 1999 Joint Venture purchased a 1,159,121 square foot (unaudited) industrial property portfolio located in Los Angeles, California for approximately $63,901. An officer of the Company held ownership interests ranging between .004% and .13% in various entities that sold certain properties to the September 1999 Joint Venture. The Consolidated Operating Partnership periodically engages in transactions for which CB Richard Ellis, Inc. acts as a broker. A relative of one of the Company's officers/Directors is an employee of CB Richard Ellis, Inc. For the years ended December 31, 2000, 1999 and 1998, this relative received brokerage commissions in the amount of $60, $18 and $130, respectively, from the Consolidated Operating Partnership. The Consolidated Operating Partnership periodically utilizes consulting services from the private consulting firm of one of the Company's Directors. For the year ended December 31, 2000, 1999 and 1998 the Consolidated Operating Partnership has paid approximately $5, $15 and $36 of fees, respectively, to this entity. In January and February 2001, FR Development Services, Inc. ("FRDS") purchased all of the voting and non-voting shares (a total of 25,790 shares) of FRDS held by certain executive officers of the Company for approximately $1.3 million, in connection with FRDS' election to become a wholly-owned taxable REIT subsidiary of the Company. At the time of the transaction, these executive officers had equity interests in FRDS totaling 2.76%. The conversion of FRDS to a wholly-owned taxable REIT subsidiary of the Company will not have a material impact on the financial position or results of operations of the Consolidated Operating Partnership. 17. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Consolidated Operating Partnership is involved in legal actions arising from the ownership of its properties. In management's opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the consolidated financial position, operations or liquidity of the Consolidated Operating Partnership. F-29 82 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per unit data) 17. COMMITMENTS AND CONTINGENCIES, CONTINUED Twenty six properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price generally in excess of the Consolidated Operating Partnership's depreciated cost of the asset. The Consolidated Operating Partnership has no notice of any exercise of any tenant purchase option. The Consolidated Operating Partnership has committed to the construction of 13 development projects totaling approximately 1.8 million square feet (unaudited) of GLA for an estimated investment of approximately $102.2 million (unaudited). These developments are expected to be funded with cash flow from operations, proceeds from the sales of select properties of the Consolidated Operating Partnership and borrowings under the Operating Partnership's 2000 Unsecured Acquisition Facility. At December 31, 2000, the Consolidated Operating Partnership, through the Operating Partnership had four letters of credit outstanding in the aggregate amount of $1.8 million. These letters of credit expire between August 2001 and March 2003. 18. SUBSEQUENT EVENTS (UNAUDITED) During the period January 1, 2001 through March 23, 2001, the Consolidated Operating Partnership acquired 13 industrial properties and several land parcels for a total estimated investment of approximately $45,546. The Consolidated Operating Partnership also sold eight industrial properties and one land parcel for approximately $19,451 of gross proceeds. On March 9, 2001, the Operating Partnership declared a first quarter distribution of $.6575 per unit which is payable on April 23, 2001. The Operating Partnership also declared a first quarter distribution of $54.688 per unit, $53.906 per unit, $49.687 per unit and $49.375 per unit on its Series B Preferred Units, Series C Preferred Units, Series D Preferred Units and Series E Preferred Units, respectively, which is payable on April 2, 2001. On March 19, 2001, the Consolidated Operating Partnership, through the Operating Partnership, issued $200,000 of unsecured notes in a private offering at an offering price of 99.695%. The unsecured notes mature on March 15, 2011 and bear a coupon interest rate of 7.375%. F-30 83 FIRST INDUSTRIAL, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except for per share data) 19. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Year Ended December 31, 2000 -------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------- Total Revenues .................................................. $ 79,767 $ 78,322 $ 80,114 $ 83,017 Equity In Income of Other Real Estate Partnerships .............. 6,808 11,323 7,819 7,099 Equity In Income of Joint Ventures .............................. 31 88 70 382 Income from Operations .......................................... 25,218 28,246 26,800 24,122 Gain on Sale of Real Estate ..................................... 5,888 6,257 6,144 7,141 Net Income ...................................................... 31,106 34,503 32,944 31,263 Preferred Unit Distributions .................................... (7,231) (7,231) (7,231) (7,231) -------- -------- -------- -------- Net Income Available to Unitholders ............................. $ 23,875 $ 27,272 $ 25,713 $ 24,032 ======== ======== ======== ======== Earnings Per Unit: Net Income Available to Unitholders per Weighted Average Unit Outstanding: Basic ..................................................... $ .52 $ .59 $ .56 $ .52 ======== ======== ======== ======== Diluted ................................................... $ .52 $ .59 $ .56 $ .52 ======== ======== ======== ========
Year Ended December 31, 2000 -------------------------------------------- First Second Third Fourth Quarter Quarter Quarter Quarter -------- -------- -------- --------- Total Revenues .................................................. $ 80,958 $ 79,089 $ 78,863 $ 75,455 Equity In Income of Other Real Estate Partnerships .............. 6,408 6,521 22,748 10,037 Equity In Income (Loss) of Joint Ventures ....................... 126 120 126 (70) Income from Operations .......................................... 26,458 26,586 44,073 28,956 Gain on Sale of Real Estate ..................................... 1,545 6,850 1,509 2,000 Net Income ...................................................... 28,003 33,436 45,582 30,956 Preferred Unit Distributions .................................... (7,231) (7,231) (7,231) (7,231) -------- -------- -------- -------- Net Income Available to Unitholders ............................. $ 20,772 $ 26,205 $ 38,351 $ 23,725 ======== ======== ======== ======== Earnings Per Unit: Net Income Available to Unitholders per Weighted Average Unit Outstanding: Basic ....................................................... $ .46 $ .58 $ .85 $ .52 ======== ======== ======== ======== Diluted ..................................................... $ .46 $ .58 $ .85 $ .52 ======== ======== ======== ========
F-31 84 OTHER REAL ESTATE PARTNERSHIPS INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
PAGE ---- FINANCIAL STATEMENTS Report of Independent Accountants....................................................... F-32 Combined Balance Sheets of the Other Real Estate Partnerships as of December 31, 2000 and 1999........................................................................... F-33 Combined Statements of Operations of the Other Real Estate Partnerships for the Years Ended December 31, 2000, 1999, and 1998........................................... F-34 Combined Statements of Changes in Partners' Capital of the Other Real Estate Partnerships for the Years Ended December 31, 2000, 1999, and 1998...................... F-35 Combined Statements of Cash Flows of the Other Real Estate Partnerships for the Years Ended December 31, 2000, 1999, and 1998........................................... F-36 Notes to Combined Financial Statements.................................................. F-37
F-31 85 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of the Other Real Estate Partnerships In our opinion, the accompanying combined balance sheets and the related combined statements of operations, of changes in partners' capital and of cash flows present fairly, in all material respects, the financial position of the Other Real Estate Partnerships at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Other Real Estate Partnerships' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Chicago, Illinois February 9, 2001 F-32 86 OTHER REAL ESTATE PARTNERSHIPS COMBINED BALANCE SHEETS (DOLLARS IN THOUSANDS)
December 31, December 31, 2000 1999 ------------ ------------ ASSETS Assets: Investment in Real Estate: Land ...................................................... $ 55,878 $ 72,789 Buildings and Improvements ................................ 345,478 355,565 Furniture, Fixtures and Equipment ......................... 84 84 Construction in Progress .................................. 18,802 37,695 Less: Accumulated Depreciation ............................ (37,221) (32,163) --------- --------- Net Investment in Real Estate ..................... 383,021 433,970 Real Estate Held for Sale, Net of Accumulated Depreciation and Amortization of $4,344 ................................. 46,043 -- Cash and Cash Equivalents .................................... 2,819 2,528 Restricted Cash .............................................. 1,188 1,425 Tenant Accounts Receivable, Net .............................. 936 938 Deferred Rent Receivable ..................................... 3,903 3,360 Deferred Financing Costs, Net ................................ 1,611 1,676 Prepaid Expenses and Other Assets, Net ....................... 29,761 28,564 --------- --------- Total Assets ...................................... $ 469,282 $ 472,461 ========= ========= LIABILITIES AND PARTNERS' CAPITAL Liabilities: Mortgage Loans Payable, Net .................................. $ 41,333 $ 41,891 Accounts Payable and Accrued Expenses ........................ 38,203 32,935 Rents Received in Advance and Security Deposits .............. 2,511 2,685 --------- --------- Total Liabilities ................................. 82,047 77,511 --------- --------- Commitments and Contingencies ................................... -- -- Partners' Capital ............................................... 387,235 394,950 --------- --------- Total Liabilities and Partners' Capital ......... $ 469,282 $ 472,461 ========= =========
The accompanying notes are an integral part of the financial statements. F-33 87 OTHER REAL ESTATE PARTNERSHIPS COMBINED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS)
Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 1998 ------------- ------------- ------------ Revenues: Rental Income ................................................... $ 49,538 $ 46,219 $ 44,499 Tenant Recoveries and Other Income............................... 14,893 13,458 11,722 -------- -------- -------- Total Revenues ........................................ 64,431 59,677 56,221 -------- -------- -------- Expenses: Real Estate Taxes ............................................... 8,126 6,983 6,779 Repairs and Maintenance ......................................... 1,871 1,835 1,460 Property Management ............................................. 2,008 1,862 2,095 Utilities ....................................................... 2,140 2,331 1,810 Insurance ....................................................... 242 142 140 Other ........................................................... 1,397 532 721 General and Administrative ...................................... -- 167 -- Interest ........................................................ 3,040 3,070 2,971 Amortization of Deferred Financing Costs ........................ 67 67 65 Depreciation and Other Amortization ............................. 11,431 10,485 9,597 Valuation Provision on Real Estate Held for Sale ................ 731 -- -- Abandoned Pursuit Costs Charge .................................. -- -- 360 -------- -------- -------- Total Expenses ....................................... 31,053 27,474 25,998 -------- -------- -------- Income from Operations ............................................. 33,378 32,203 30,223 Gain on Sale of Real Estate ........................................ 3,866 17,893 2,417 -------- -------- -------- Income Before Cumulative Effect of Change in Accounting Principle ....................................................... 37,244 50,096 32,640 Cumulative Effect of Change in Accounting Principle ................ -- -- (858) -------- -------- -------- Net Income ......................................................... $ 37,244 $ 50,096 $ 31,782 ======== ======== ========
The accompanying notes are an integral part of the financial statements. F-34 88 OTHER REAL ESTATE PARTNERSHIPS COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DOLLARS IN THOUSANDS) Total --------- Balance at December 31, 1997 .............. $ 687,335 Contributions ......................... 115,781 Distributions.......................... (422,906) Net Income ............................ 31,782 --------- Balance at December 31, 1998 .............. 411,992 --------- Contributions ......................... 120,679 Distributions.......................... (187,817) Net Income ............................ 50,096 --------- Balance at December 31, 1999 .............. 394,950 --------- Contributions ......................... 95,425 Distributions.......................... (140,384) Net Income ............................ 37,244 --------- Balance at December 31, 2000 .............. $ 387,235 ========= The accompanying notes are an integral part of the financial statements. F-35 89 OTHER REAL ESTATE PARTNERSHIPS COMBINED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
Year Ended Year Ended Year Ended December 31, 2000 December 31, 1999 December 31, 1998 ------------------ ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net Income ................................................... $ 37,244 $ 50,096 $ 31,782 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation .............................................. 10,344 8,676 9,714 Amortization of Deferred Financing Costs .................. 67 67 65 Other ..................................................... 768 Amortization .............................................. 1,053 919 Valuation Provision on Real Estate Held for Sale .......... 731 -- -- Gain on Sale of Real Estate ............................... (3,866) (17,893) (2,417) Cumulative Effect of Change in Accounting Principle ....... -- -- 858 Recovery of Provision for Bad Debts ....................... -- (8) (99) (Increase) Decrease in Tenant Accounts Receivable and Prepaid Expenses and Other Assets, Net .............. (4,299) 870 (8,372) Increase in Deferred Rent Receivable ...................... (644) (552) (680) Increase (Decrease) in Accounts Payable and Accrued Expenses and Rents Received in Advance and Security Deposits ................................... 8,583 25,856 (2,440) Organization Costs ........................................ -- -- (3) Decrease in Restricted Cash ............................... 406 1,515 3,507 --------- --------- --------- Net Cash Provided by Operating Activities ............... 49,619 70,433 31,796 --------- --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of and Additions to Investment in Real Estate .... (33,200) (79,104) (132,229) Net Proceeds from Sales of Investment in Real Estate ...... 28,000 82,088 22,200 Funding of Mortgage Loans Receivable ...................... -- (332) -- Repayment of Mortgage Loans Receivable .................... 2,764 699 288 (Increase) Decrease in Restricted Cash .................... (169 346 268 --------- --------- --------- Net Cash (Used in) Provided by Investing Activities ..... (2,605) 3,697 (109,473) --------- --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Contributions ............................................. 95,425 110,356 115,781 Distributions ............................................. (140,384) (187,817) (35,259) Repayments on Mortgage Loans Payable ...................... (520) (492) (300,424) Decrease (Increase) in Restricted Cash .................... -- -- 306,000 Purchase of U.S. Government Securities .................... (1,244) -- -- Cost of Debt Issuance ..................................... -- -- (6,042) --------- --------- --------- Net Cash (Used in) Provided by Financing Activities ..... (46,723) (77,953) 80,056 --------- --------- --------- Net Increase (Decrease) in Cash and Cash Equivalents ...... 291 (3,823) 2,379 Cash and Cash Equivalents, Beginning of Period ............ 2,528 6,351 3,972 --------- --------- --------- Cash and Cash Equivalents, End of Period .................. $ 2,819 $ 2,528 $ 6,351 ========= ========= =========
The accompanying notes are an integral part of the financial statements. F-36 90 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 1. ORGANIZATION AND FORMATION OF PARTNERSHIPS 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 is First Industrial Realty Trust, Inc. (the "Company") with an approximate 84.3% ownership interest at December 31, 2000. The Company is a real estate investment trust ("REIT") as defined in the Internal Revenue Code. The Company's operations are conducted primarily through the Operating Partnership. The limited partners of the Operating Partnership own, in the aggregate, approximately a 15.7% interest in the Operating Partnership at December 31, 2000. The Operating Partnership owns at least a 99% limited partnership interest (subject in one case as described below to a preferred limited partnership interest) in First Industrial Financing Partnership, L.P. (the "Financing Partnership"), First Industrial Securities, L.P. (the "Securities Partnership"), First Industrial Mortgage Partnership, L.P. (the "Mortgage Partnership"), First Industrial Pennsylvania, L.P. (the "Pennsylvania Partnership"), First Industrial Harrisburg, L.P. (the "Harrisburg Partnership"), First Industrial Indianapolis, L.P. (the "Indianapolis Partnership"), TK-SV, LTD. and First Industrial Development Services, L.P. (together, the "Other Real Estate Partnerships"). The general partners of the Other Real Estate Partnerships are separate corporations, each with at least a .01% general partnership interest in the Other Real Estate Partnerships for which it acts as a general partner. Each general partner of the Other Real Estate Partnerships is a wholly-owned subsidiary of the Company. The general partner of the Securities Partnership, First Industrial Securities Corporation, also owns a preferred limited partnership interest in the Securities Partnership which entitles it to receive a fixed quarterly distribution, and results in it being allocated income in the same amount, equal to the fixed quarterly dividend the Company pays on its 9.5% $.01 par value Series A Cumulative Preferred Stock. On a combined basis, as of December 31, 2000, the Other Real Estate partnerships owned 104 in-service industrial properties, containing an aggregate of approximately 12.6 million square feet (unaudited) of GLA. Of the 104 industrial properties owned by the Other Real Estate Partnerships at December 31, 2000, 22 are held by the Mortgage Partnership, 24 are held by the Pennsylvania Partnership, 22 are held by the Securities Partnership, 22 are held by the Financing Partnership, six are held by the Harrisburg Partnership, six are held by the Indianapolis Partnership, one is held by First Industrial Development Services, L.P. and one is held by TK-SV, LTD. Profits, losses and distributions of the Other Real Estate Partnerships are allocated to the general partner and the limited partners in accordance with the provisions contained within its restated and amended partnership agreement. F-37 91 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 2. BASIS OF PRESENTATION The combined financial statements of the Other Real Estate Partnerships at December 31, 2000 and 1999 and for each of the three years ended December 31, 2000 include the accounts and operating results of the Other Real Estate Partnerships on a combined basis. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In order to conform with generally accepted accounting principles, management, in preparation of the Other Real Estate Partnerships' financial statements, is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of December 31, 2000 and 1999, and the reported amounts of revenues and expenses for the years ended December 31, 2000, 1999 and 1998. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include all cash and liquid investments with an initial maturity of three months or less. The carrying amount approximates fair value due to the short maturity of these investments. Investment in Real Estate and Depreciation Purchase accounting has been applied when ownership interests in properties were acquired for cash. The historical cost basis of properties has been carried over when certain ownership interests were exchanged for Operating Partnership units on July 1, 1994, and purchase accounting has been used for all other properties that were subsequently acquired for Operating Partnership units. Real estate assets are carried at cost. The Other Real Estate Partnerships reviews its properties on a quarterly basis for impairment and provides a provision if impairments are determined. First, to determine if impairment may exist, the Other Real Estate Partnerships reviews its properties and identifies those which have had either an event of change or event of circumstances warranting further assessment of recoverability. Then, the Other Real Estate Partnerships estimates the fair value of those properties on an individual basis by capitalizing the expected net operating income. Such amounts are then compared to the property's depreciated cost to determine whether an impairment exists. For properties management considers held for sale, the Other Real Estate Partnerships ceases to depreciate the properties and values the properties at the lower of depreciated cost or fair value less cost to sell. Interest expense, real estate taxes and other directly related expenses incurred during construction periods are capitalized and depreciated commencing with the date placed in service, on the same basis as the related assets. Depreciation expense is computed using the straight-line method based on the following useful lives: Years ----- Buildings and Improvements.............................. 31.5 to 40 Land Improvements....................................... 15 Furniture, Fixtures and Equipment....................... 5 to 10 F-38 92 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Construction expenditures for tenant improvements, leasehold improvements and leasing commissions are capitalized and amortized over the terms of each specific lease. Repairs and maintenance are charged to expense when incurred. Expenditures for improvements are capitalized. Deferred Financing Costs Deferred financing costs include fees and costs incurred to obtain long-term financing. These fees and costs are being amortized over the terms of the respective loans. Accumulated amortization of deferred financing costs was $316 and $249 at December 31, 2000 and 1999, respectively. Unamortized deferred financing costs are written-off when debt is retired before the maturity date. Revenue Recognition Rental income is recognized on a straight-line method under which contractual rent increases are recognized evenly over the lease term. Tenant recovery income includes payments from tenants for taxes, insurance and other property operating expenses and is recognized as revenues in the same period the related expenses are incurred by the Other Real Estate Partnerships. The Other Real Estate Partnerships provide an allowance for doubtful accounts against the portion of tenant accounts receivable which is estimated to be uncollectible. Accounts receivable in the combined balance sheets are shown net of an allowance for doubtful accounts of $343 as of December 31, 2000 and December 31, 1999, respectively. Gain on Sale of Real Estate Gain on sale of real estate is recognized using the full accrual method. Gains relating to transactions which do not meet the full accrual method of accounting are deferred and recognized when the full accrual accounting criteria are met or by using the installment or deposit methods of profit recognition, as appropriate in the circumstances. As the assets are sold, their costs and related accumulated depreciation are removed from the accounts with resulting gains or losses reflected in net income or loss. Estimated future costs to be incurred by the Other Real Estate Partnerships after completion of each sale are included in the determination of the gains on sales. Income Taxes In accordance with partnership taxation, each of the partners are responsible for reporting their share of taxable income or loss. The Other Real Estate Partnerships are subject to certain state and local income, excise and franchise taxes. The provision for such state and local taxes has been reflected in general and administrative expense in the statement of operations and has not been separately stated due to its insignificance. Fair Value of Financial Instruments The Other Real Estate Partnerships' financial instruments include short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable, other accrued expenses and mortgage loans payable. The fair values of the short-term investments, tenant accounts receivable, net, mortgage notes receivable, accounts payable and other accrued expenses were not materially different from their carrying or contract values due to the short-term nature of these financial instruments. See Note 4 for the fair values of the mortgage loans payable. F-39 93 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Derivative Financial Instruments Historically, the Other Real Estate Partnerships has used interest rate protection agreements (the "Agreements") to limit the interest rate on existing debt or convert floating rate debt to fixed rate debt. Receipts or payments resulting from the Agreements that were used to limit the interest rate on existing debt are recognized as a component of interest expense. The cost basis of this type of instrument is amortized over the life of the instrument and is recognized in net income as well. Receipts or payments resulting from Agreements used to convert floating rate debt to fixed rate debt are recognized as a component of interest expense. Any Agreements which no longer qualify for hedge accounting are marked to market and any gain or loss is recognized in net income immediately. The credit risks associated with the Agreements are controlled through the evaluation and monitoring of the creditworthiness of the counterparty. In the event that the counterparty fails to meet the terms of the Agreements, the Other Real Estate Partnerships' exposure is limited to the current value of the interest rate differential, not the notional amount, and the Other Real Estate Partnerships' carrying value of the Agreements on the balance sheet. Segment Reporting Management views the Other Real Estate Partnerships as a single segment. Recent Accounting Pronouncements The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133 "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133") on June 1, 1998. Statement of Financial Accounting Standards No. 138 "Accounting for Derivative Instruments and Hedging Activities - An Amendment of FAS Statement 133" was issued in June 2000. FAS 133, as amended, is effective for fiscal years beginning after June 15, 2000 as provided by Statement of Financial Accounting Standards No. 137 issued in July 1999. FAS 133, as amended, requires fair value accounting for all derivatives including recognizing all such instruments on the balance sheet with an offsetting amount recorded in the income statement or as part of comprehensive income. FAS 133, as amended, becomes effective for the Other Real Estate Partnerships for the year ending December 31, 2001. FAS 133 did not have an impact on the Other Real Estate Partnerships' consolidated financial position, consolidated results of operations or consolidated cash flows. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 101 was required to be implemented in the fourth fiscal quarter of 2000. The adoption of SAB 101 did not have an effect on the Other Real Estate Partnerships' results of operations or its financial position as the Other Real Estate Partnerships' revenue recognition practices were compliant with the pronouncement. F-40 94 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 4. MORTGAGE LOANS PAYABLE, NET On June 30, 1994, the Other Real Estate Partnerships, through the Financing Partnership, entered into a $300,000 mortgage loan. On April 4, 1997, the Other Real Estate Partnerships purchased U.S. Government securities as substitute collateral to execute a legal defeasance of the $300,000 mortgage loan (the "1994 Defeased Mortgage Loan"). On January 2, 1998, the Other Real Estate Partnerships used the gross proceeds from the maturity of the U.S. Government securities to pay off and retire the 1994 Defeased Mortgage Loan. On December 29, 1995 the Other Real Estate Partnerships, through the Mortgage Partnership, borrowed $40,200 under a mortgage loan (the "1995 Mortgage Loan"). In June 2000, the Other Real Estate Partnerships purchased approximately $1.2 million of U.S. Government securities as substitute collateral to execute a legal defeasance of approximately $1.2 million of the 1995 Mortgage Loan. The terms of the legal defeasance require the Mortgage Partnership to use the gross proceeds from the maturities of the U.S. Government securities to paydown and subsequently retire the defeased portion of the 1995 Mortgage Loan in January 2003. The Other Real Estate Partnerships are carrying the defeased portion of the 1995 Mortgage Loan on its balance sheet until it pays down and subsequently retires the defeased portion of the 1995 Mortgage Loan in January 2003. The remaining portion of the 1995 Mortgage Loan matures on January 11, 2026. Upon the execution of the legal defeasance, one of the 23 properties collateralizing the 1995 Mortgage Loan was released and subsequently sold. The 1995 Mortgage Loan provides for monthly principal and interest payments based on a 28-year amortization schedule. The interest rate under the 1995 Mortgage Loan is fixed at 7.22% per annum through January 11, 2003. After January 11, 2003, the interest rate adjusts through a predetermined formula based on the applicable Treasury rate. The 1995 Mortgage Loan is collateralized by 22 properties held by the Mortgage Partnership. The 1995 Mortgage Loan may be prepaid on or after January 2003. Under the terms of the 1995 Mortgage Loan, certain cash reserves are required to be and have been set aside for refunds of security deposits and payment of capital expenditures, interest, real estate taxes and insurance. The amount of cash reserves segregated for security deposits is adjusted as tenants turn over. The amounts included in the cash reserves relating to payments of capital expenditures, interest, real estate taxes and insurance were determined by the lender and approximate the next periodic payment of such items. At December 31, 2000 and 1999, these reserves totaled $1,188 and $1,425, respectively, and are included in Restricted Cash. Such cash reserves were invested in a money market fund at December 31, 2000. The maturity of these investments is one day; accordingly, cost approximates fair market value. On July 16, 1998, the Other Real Estate Partnerships, through TK-SV, LTD., assumed a mortgage loan in the principal amount of $2,566 (the "Acquisition Mortgage Loan V"). The Acquisition Mortgage Loan V is collateralized by one property in Tampa, Florida, bears interest at a fixed rate of 9.01% and provides for monthly principal and interest payments based on a 30-year amortization schedule. The Acquisition Mortgage Loan V matures on September 1, 2006. The Acquisition Mortgage Loan V may be prepaid only after August 2002 in exchange for the greater of a 1% prepayment fee or a yield maintenance premium. The following table discloses certain information regarding the Other Real Estate Partnerships' mortgage loans:
OUTSTANDING BALANCE AT ACCRUED INTEREST PAYABLE AT INTEREST RATE AT ----------------------------- ----------------------------- -------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, MATURITY 2000 1999 2000 1999 2000 DATE ----------- ------------ ------------ ------------ ------------ ---------- MORTGAGE LOANS PAYABLE 1995 MORTGAGE LOAN ............ $38,604(1) $39,099(1) $ 163 $ 165 7.22% 1/11/26 ACQUISITION MORTGAGE LOAN V.... 2,729(2) 2,793(2) -- -- 9.01% 9/01/06 ------- ------- ------- ------ TOTAL ......................... $41,333 $41,892 $ 163 $ 165 ======= ======= ======= ======
(1) Approximately $1.2 million of this loan has been defeased and will be paid in full in January 2003. (2) At December 31, 2000 and 1999, the Acquisition Mortgage Loan V is net of unamortized premiums of $219 and $258, respectively. F-41 95 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 4. MORTGAGE LOANS PAYABLE, NET, CONTINUED Fair Value: At December 31, 2000 and 1999, the fair value of the Other Real Estate Partnerships' mortgage loans payable were as follows: December 31, 2000 December 31, 1999 ------------------ ----------------- Carrying Fair Carrying Fair Amount Value Amount Value -------- ------- -------- ------- Mortgage Loans Payable .... $41,333 $41,373 $41,892 $40,000 ------- ------- ------- ------- Total ..................... $41,333 $41,373 $41,892 $40,000 ======= ======= ======= ======= The fair value of the Other Real Estate Partnerships' mortgage loans payable were determined by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The following is a schedule of maturities of the mortgage loans for the next five years ending December 31, and thereafter: Amount ------- 2001.................. $ 568 2002.................. 610 2003.................. 1,802 2004................. 679 2005................. 739 Thereafter............ 36,716 ------- Total................. $41,114 ======= 5. STOCKHOLDERS' EQUITY Preferred Stock In 1995, the Company issued 1,650,000 shares of 9.5%, $.01 par value, Series A Cumulative Preferred Stock (the "Series A Preferred Stock") at an initial offering price of $25 per share. Dividends on the Series A Preferred Stock are cumulative from the date of initial issuance and are payable quarterly in arrears. The payment of dividends and amounts upon liquidation, dissolution or winding up ranks senior to the payments on the Company's $.01 par value common stock ("Common Stock"). The Series A Preferred Stock is not redeemable prior to November 17, 2000. On or after November 17, 2000, the Series A Preferred Stock is redeemable for cash at the option of the Other Real Estate Partnerships, in whole or in part, at $25.00 per share, or $41,250 in the aggregate, plus dividends accrued and unpaid to the redemption date (See Note 13). The Series A Preferred Stock has no stated maturity and is not convertible into any other securities of the Company. The Company contributed $41,250 to First Industrial Securities Corporation, which contributed $41,250 to the Securities Partnership for a preferred limited partnership interest. The payment of dividends on, and payments on liquidation or redemption of, the Series A Preferred Stock is guaranteed by the Securities Partnership (the "Guarantor") pursuant to a Guarantee and Payment Agreement (the "Guarantee Agreement"). To the extent the Company fails to make any payment of dividend or pay any portion of the liquidation preference on or the redemption price of any shares of Series A Preferred Stock, the Guarantor will be obligated to pay an amount to each holder of Series A Preferred Stock equal to any such shortfall. F-42 96 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 6. ACQUISITION AND DEVELOPMENT OF REAL ESTATE In 1998, the Other Real Estate Partnerships acquired 27 properties comprising approximately 1.4 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $83,059 and completed the development of five properties and two expansions comprising approximately 1.6 million square feet (unaudited) of GLA at a cost of approximately $48,676. In 1999, the Other Real Estate Partnerships acquired four in-service industrial properties and two industrial properties under redevelopment comprising, in the aggregate, approximately 1.5 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $51,018 and completed the development of three properties comprising approximately .7 million square feet (unaudited) of GLA at a cost of approximately $21,726. In 2000, the Other Real Estate Partnerships acquired one in-service industrial property comprising approximately .2 million square feet (unaudited) of GLA and several land parcels for a total purchase price of approximately $9,222 and completed the development of six properties and one redevelopment comprising approximately .5 million square feet (unaudited) of GLA at a cost of approximately $22,160. 7. SALES OF REAL ESTATE AND REAL ESTATE HELD FOR SALE In 1998, the Other Real Estate Partnerships sold five in-service properties and several parcels of land. The aggregate gross sales price of these sales totaled approximately $22,247. The gain on sales totaled approximately $2,417. In 1999, the Other Real Estate Partnerships sold 13 in-service properties and several parcels of land. The aggregate gross sales price of these sales totaled approximately $90,818. The gain on sales totaled approximately $17,893. In 2000, the Other Real Estate Partnerships sold four in-service properties and several parcels of land. Gross proceeds from these sales totaled approximately $29,667. The gain on sales totaled approximately $3,866. The Other Real Estate Partnerships has an active sales program through which they continually engage in identifying and evaluating its current portfolio for potential sales candidates in order to redeploy capital. At December 31, 2000, the Other Real Estate Partnerships had 11 industrial properties comprising approximately 1.1 million square feet (unaudited) of GLA held for sale. There can be no assurance that such properties held for sale will be sold. The following table discloses certain information regarding the 11 industrial properties held for sale by the Other Real Estate Partnerships. YEAR ENDED ----------------------------- 2000 1999 1998 ------- ------- ------- Total Revenues .................... $ 4,286 $ 4,208 $ 3,674 Operating Expenses ................ (1,044) (1,004) (832) Depreciation and Amortization ..... (458) (877) (753) ------- ------- ------- Income from Operations ............ $ 2,784 $ 2,327 $ 2,089 ======= ======= ======= In 2000, the Other Real Estate Partnerships recognized a valuation provision on real estate held for sale of $731 relating to the Other Real Estate Partnerships' exit market portfolio of properties in Grand Rapids, Michigan. The fair value was determined by a quoted market price less transaction costs. 8. ABANDONED PURSUIT COSTS CHARGE The Other Real Estate Partnerships recorded an abandoned pursuit costs charge of approximately $360 in 1998 related to abandoned acquisitions. F-43 97 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 9. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS Supplemental disclosure of cash flow information:
Year Ended Year Ended Year Ended December 31, December 31, December 31, 2000 1999 1998 ------------ ------------ ------------ Interest paid................. $ 3,042 $ 3,091 $ 4,784 ======= ======= =======
In conjunction with the property and land acquisitions, the following assets and liabilities were assumed: Purchase of real estate ........... $ 9,222 $ 27,709 $ 74,697 Accounts payable and accrued Expenses ....................... -- (68) (830) Mortgage loans .................... -- -- (2,378) -------- -------- -------- $ 9,222 $ 27,641 $ 71,489 ======== ======== ======== In conjunction with the contribution of 173 properties from the Financing Partnership to the Operating Partnership on January 2, 1998, the following assets and liabilities were contributed: Investment in real estate .......................... $ 382,190 Tenant accounts receivable ......................... 3,017 Deferred rent receivable ........................... 4,689 Other assets ....................................... 6,209 Accounts payable and accrued expenses .............. (5,920) Rents received in advance and security deposits .... (2,538) --------- Investments in other real estate partnerships ...... $ 387,647 ========= In conjunction with the distribution of four properties from the Operating Partnership to the Securities Partnership during 1999, the following assets and liabilities were assumed: Investment in real estate, net .................. $ 10,387 Tenant accounts receivable ...................... (21) Deferred rent receivable ........................ 40 Other assets, net ............................... 17 Accounts payable and accrued expenses ........... (100) -------- Investment in other real estate partnerships .... $ 10,323 ======== 10. FUTURE RENTAL REVENUES The Other Real Estate Partnerships' properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursements of expenses, under noncancelable operating leases in effect as of December 31, 2000 are approximately as follows: 2001.................... $ 45,947 2002.................... 39,365 2003.................... 31,995 2004.................... 23,799 2005.................... 16,240 Thereafter.............. 70,103 ---------- Total............. $ 227,449 ========== 11. RELATED PARTY TRANSACTIONS Periodically, the Other Real Estate Partnerships utilizes real estate brokerage services from CB Richard Ellis, Inc., for which a relative of one of the Company's officers/Directors is an employee. On September 15, 1999, the Other Real Estate Partnerships sold nine industrial properties to an entity whose Chairman of the Board of Directors is also Chairman of the Board of Directors of the Company. The gross proceeds from the sales of these nine industrial properties approximated $39,475 and the gain on sales approximated $14,552. F-44 98 OTHER REAL ESTATE PARTNERSHIPS NOTES TO COMBINED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) 12. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Other Real Estate Partnerships are involved in legal actions arising from the ownership of its properties. In management's opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a materially adverse effect on the combined financial position, operations or liquidity of the Other Real Estate Partnerships. Five properties have leases granting the tenants options to purchase the property. Such options are exercisable at various times and at appraised fair market value or at a fixed purchase price generally in excess of the Other Real Estate Partnerships' depreciated cost of the asset. The Other Real Estate Partnerships have no notice of any exercise of any tenant purchase option. The Other Real Estate Partnerships have committed to the construction of eight development projects totaling approximately 2.2 million square feet (unaudited) of GLA. The estimated total construction costs are approximately $75.5 million (unaudited). These developments are expected to be funded with capital contributions from the Operating Partnership. 13. SUBSEQUENT EVENTS (UNAUDITED) During the period January 1, 2001 through March 23, 2001, the Other Real Estate Partnerships acquired eight industrial properties for a total estimated investment of approximately $27,880. The Other Real Estate Partnerships also sold one industrial property and one land parcel for approximately $1,780 of gross proceeds. On March 9, 2001, the Company called for the redemption of all of its outstanding Series A Preferred Stock at the price of $25.00 per share, plus accrued and unpaid dividends. The redemption date will be April 9, 2001. Such redemption will result in a corresponding redemption of First Industrial Securities Corporation's preferred limited partnership interest in the Securities Partnership. F-45 EX-12.1 2 c63539a1ex12-1.txt COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12.1 FIRST INDUSTRIAL, L.P. COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED UNIT DISTRIBUTIONS (DOLLARS IN THOUSANDS)
12/31/00 12/31/99 12/31/98 ---------- ---------- ---------- Income From Operations ............................ $104,386 $126,073 $ 83,067 Plus: Interest Expense and Amortization of Interest Rate Protection Agreements and Deferred Financing Costs ................................... 82,568 78,094 69,713 -------- -------- -------- Earnings Before Fixed Charges ..................... $186,954 $204,167 $152,780 ======== ======== ======== Fixed Charges and Preferred Unit Distributions .... $ 87,771 $ 83,662 $ 73,356 ======== ======== ======== Ratio of Earnings to Fixed Charges and Preferred Unit Distributions(a) ................... 2.13x 2.44x 2.08x ======== ======== ========
(a) For purposes of computing the ratios of earnings to fixed charges and preferred unit distributions, earnings have been calculated by adding fixed charges (excluding capitalized interest) to income from operations before income allocated to minority interest. Fixed charges consist of interest costs, whether expensed or capitalized and amortization of interest rate protection agreements and deferred financing charges. EX-23 3 c63539a1ex23.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (File No. 333-43641) of First Industrial, L.P. of our report dated February 9, 2001 relating to the consolidated financial statements and of our report dated February 9, 2001 relating to the combined statements of the Other Real Estate Partnerships, which appear in this Annual Report on Form 10-K/A No. 1. We also consent to the incorporation by reference of our report dated February 9, 2001 relating to the financial statement schedule of First Industrial, L.P., which appears in this Form 10-K/A No. 1. PricewaterhouseCoopers LLP Chicago, Illinois July 6, 2001 -----END PRIVACY-ENHANCED MESSAGE-----