-----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, Vxsu3KMswOardUZM/zxCLIco7d/D3gIO9DAjbUPFIGBIBrWkVjPBNnXF8XG04aww QvFh9OuGUuSkkGrMQiOgZg== 0000950137-97-003765.txt : 19971117 0000950137-97-003765.hdr.sgml : 19971117 ACCESSION NUMBER: 0000950137-97-003765 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971030 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971114 SROS: NONE 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: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-21873 FILM NUMBER: 97717667 BUSINESS ADDRESS: STREET 1: 311 S WACKER DR STREET 2: STE 4000 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3127049000 MAIL ADDRESS: STREET 1: 150 N WACKER DR STREET 2: STE 150 CITY: CHICAGO STATE: IL ZIP: 60606 8-K 1 FORM 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------ Commission File Number 333-21873 Date of Report (date of earliest event reported): OCTOBER 30, 1997 FIRST INDUSTRIAL, L.P. (Exact name of Registrant as specified in its Charter) DELAWARE 36-3924586 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 311 S. WACKER DRIVE, SUITE 4000, CHICAGO, ILLINOIS 60606 (Address of principal executive offices) (312) 344-4300 (Registrant's telephone number, including area code) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On October 30, 1997, First Industrial, L.P. ( the "Operating Partnership") acquired 91 light industrial properties (the "Pacifica Phase I Properties") in Denver, Colorado, totaling approximately 3.5 million square feet of gross leasable area (the "Pacifica Phase I Acquisition"). The Pacifica Phase I Properties were acquired for approximately $168.2 million which was funded with $148.1 million in cash and the issuance of approximately .6 million limited partnership units in the Operating Partnership (the "Units") valued at approximately $20.1 million. The $148.1 million in cash was funded with borrowings under the Operating Partnership's $200 million unsecured revolving credit facility (the "1996 Unsecured Acquisition Facility") with a group of banks for which the First National Bank of Chicago and the Union Bank of Switzerland act as agents. The $148.1 million borrowed under the Operating Partnership's 1996 Unsecured Acquisition Facility currently bears interest at LIBOR plus 1%. The Pacifica Phase I Properties were acquired from Pacifica Turnpike II Limited Liability Company, PAC II Limited Liability Company, Pacifica Fountainhead Limited Liability Company, John B. Bertram Trust, H-B Trust, IJM Investments, Pacifica N-I24, LLC, 15200 Commerce Partners, I.G. Equities, Pacifica Industrial V Ltd., Liability, Pacifica Central Partnership, Pacifica Gateway Limited Liability Company, Pacifica Hilltop Partnership, C.G. Property Development Company, Pacifica Northeast Industrial Partnership, Pacifica Industrial Denver I-70, C&L Denver I, Kaplan MB Properties II, A&R Management and Development Co. No. 1, L.P., Pacifica North I-25 Industrial, LLC., FTS, LLC, Pacifica Broadway Partnership, Pacifica 6400 Broadway Partnership, The Stanley and Linda Gerlach Family Trust Dated 6-28-85, Pacifica Denver VIII Limited Liability Company, BBS/PAC, Ltd. Liability Company, First Trust Corporation, Pacifica Denver VI Limited Liability Company, Pacifica Turnpike Park Partnership, Equity Industrial II, L.P., Jordan Park Limited Liability Company, East 46th Partnership, Interstate Business Center, L.L.C., Apollo/Pacifica, LLC, Pacifica Development Properties II Limited Liability Company, Pacifica ARKA Garrison Park Partnership, K Associates, Pacifica West Evans Partnership, Pacifica/ARKA West Park Partnership, ARGC Partners, John A. And Gloria H. Sage as Co-Trustees of the Jack and Gloria Sage Family Trust, Kaplan MB Properties II, Pacifica/ARKA Arapahoe Partnership, A&R Management and Development, Pacifica ILIFF Business Park Limited Liability Company, Russell S. Bishop III and Mary M. Bishop as Co-Trustees, Bishop Family Trust, George Hemminger IRA, Pacifica Southpark I Limited Liability Company, Pacifica/ARKAI-225 Partnership, Kozen Family, LLC, Pacifica South Federal Business Center, L.P., Pacifica ARKA Upland I Limited Liability Company, The Jack and Gloria Sage Family Trust Agreement Dated 6/7/94, Pacifica 6th West L.P., George M. Hemminger IRA, James A. Collins and Carol L. Collins, Trustee of the Collins Family Trust Dated May 9, 1969 (together, the "Pacifica Group"). Prior to the Pacifica Phase I Acquisition, the Pacifica Group was not affiliated with the Operating Partnership, any affiliate of the Operating Partnership or any director or officer of the Operating Partnership. Following the Pacifica Phase I Acquisition, Timothy Gudim was appointed regional director and Gregory Downs was appointed regional development officer. The Pacifica Phase I Properties will continue to be used for light industrial use under the existing lease terms. In connection with the Pacifica Phase I Acquisition, the Operating Partnership completed negotiations with the Pacifica Group to acquire an additional 15 properties totaling approximately .7 million square feet of gross leasable area (the "Pacifica Phase II Properties") (together with the Pacifica Phase I Properties, the "Pacifica Acquisition Properties") for approximately $25.4 million (the "Pacifica Phase II Acquisition"). The Pacifica Phase II Acquisition will be funded with cash and Units and is scheduled to close within the next several months. The Pacifica Phase II Properties will be used for light industrial use under the existing lease terms. The Operating Partnership is completing negotiations to acquire 64 properties totaling approximately 4.8 million square feet of gross leasable area (the "Sealy Acquisition Properties") for approximately $128.5 million. The Sealy Acquisition Properties will be funded with cash and Units and is scheduled to close by November 30, 1997. The Sealy Acquisition Properties will be used for light industrial and bulk warehouse use under existing lease terms. ITEM 5. OTHER EVENTS Since the filing of the Operating Partnership's Form 8-K/A No. 2 dated June 30, 1997, exclusive of the Pacifica Acquisition Properties and the Sealy Acquisition Properties described above, the Operating Partnership acquired 32 industrial properties and two land parcels for future development from unrelated parties during the period July 15, 1997 through October 31, 1997, the closing date of the last industrial property acquired. The combined purchase price 1 3 for these industrial properties and land parcels totaled approximately $69.4 million, excluding development costs incurred subsequent to the acquisition of the land parcels and closing costs incurred in conjunction with the acquisition of the industrial properties and land parcels. The 32 industrial properties and two land parcels acquired are described below and were funded with working capital, the issuance of Units and borrowings under the Operating Partnership's 1996 Unsecured Acquisition Facility. The Operating Partnership has continued the pre-acquisition uses of the properties. With respect to the land parcels purchased, the Operating Partnership intends to develop the land parcels and operate the facilities as industrial rental property. - - On August 6, 1997, the Operating Partnership purchased a land parcel located in Minneapolis, Minnesota for approximately $.3 million. The land parcel was purchased from Ronald A. Signorelli and John B. Pfaff. - - On September 19, 1997, the Operating Partnership purchased three light industrial properties totaling 106,721 square feet located in Oakwood, Ohio. The purchase price of the properties was approximately $3.4 million. The properties were purchased from Oak Leaf Industrial Mall, L.P. - - On September 19, 1997, the Operating Partnership purchased two light Industrial Properties totaling 62,395 square feet located in Independence, Ohio. The purchase price of the properties was approximately $2.5 million. The properties were purchased from Valley Belt Industrial Mall, L.P. - - On September 22, 1997, the Operating Partnership purchased a 102,400 square foot bulk warehouse property located in Taylor, Michigan for approximately $3.0 million. The property was purchased from Virginia United, a Michigan co-partnership. - - On September 26, 1997, the Operating Partnership purchased a 97,518 square foot bulk warehouse property located in Kennesaw, Georgia for approximately $5.2 million. The property was purchased from The Guardian Insurance & Annuity Company, Inc, a Delaware corporation. - - On September 29, 1997, the Operating Partnership purchased a 35,114 square foot light industrial property located in Hazelwood, Missouri. The purchase price for the property was approximately $1.0 million. The property was purchased from McDonnell Douglas Corporation, a Maryland corporation. This property was owner occupied prior to purchase. - - On September 30, 1997, the Operating Partnership purchased a 570,000 square foot light industrial property located in Florence, Kentucky. The purchase price for the property was approximately $6.0 million. The property was purchased from Equitable Bag Co., Inc. This property was owner occupied prior to purchase. - - On October 1, 1997, the Operating Partnership purchased a 51,525 square foot light industrial property located in Streetsboro, Ohio. The purchase price for the property was approximately $2.2 million. The property was purchased from Ethan Investment Corporation. - - On October 7, 1997, the Operating Partnership purchased four bulk warehouse properties totaling 476,401 square feet and one 80,400 square foot light industrial property located in Chicago, Illinois for approximately $10.0 million which was funded with $4.8 million in cash and approximately .2 million Units valued at approximately $5.2 million in the aggregate. The Properties were purchased from RJB Ford City Limited Partnership. - - On October 14, 1997, the Operating Partnership purchased a land parcel located in Cheshire, Connecticut for approximately $.9 million. The land parcel was purchased from River Valley Farm, Inc. - - On October 17, 1997, the Operating Partnership purchased seven light industrial properties totaling 480,118 square feet located in Nashville, Tennessee. The purchase price for the properties was approximately $17.7 million. The properties were purchased from Metropolitan Life Insurance company, a New York corporation. 2 4 - - On October 21, 1997, the Operating Partnership purchased two light Industrial Properties totaling 68,635 square feet located in Hicksville, New York. The purchase price of the properties was approximately $1.9 million. The properties were purchased from Mastex Associates, a New York partnership. - - On October 23, 1997, the Operating Partnership purchased one bulk warehouse property totaling 252,000 square feet and five light industrial properties totaling 137,031 square feet located in the metropolitan area of Chicago, Illinois for approximately $9.0 million which was funded with $7.7 million in cash and approximately .05 million Units valued at approximately $1.3 million in the aggregate. The properties were purchased from Rob Commercial Joint Ventures Limited and RJB II, L.P. - - On October 28, 1997, the Operating Partnership purchased a 32,000 square foot light industrial property located in Willoughby, Ohio. The purchase price for the property was approximately $.9 million. The property was purchased from Hamann Parkway Limited. - - On October 31, 1997, the Operating Partnership purchased an 89,456 square foot light industrial property located in Minneapolis, Minnesota. The purchase price for the property was approximately $5.4 million. The property was purchased from City West Associates, L.L.P. 3 5 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements: Combined Historical Statements of Revenues and Certain Expenses for the 1997 Acquisition II Properties - Unaudited. Combined Historical Statements of Revenues and Certain Expenses for the Pacifica Acquisition Properties and Notes thereto with Independent Accountant's report dated October 27, 1997. Combined Historical Statements of Revenues and Certain Expenses for the Sealy Acquisition Properties and Notes thereto with Independent Accountant's report dated October 16, 1997. Combined Historical Statements of Revenues and Certain Expenses for the 1997 Acquisition III Properties and Notes thereto with Independent Accountant's report dated October 20, 1997. (b) Pro Forma Financial Information: Pro Forma Statement of Operations for the Six Months Ended June 30, 1997. Pro Forma Statement of Operations for the Year Ended December 31, 1996. (c) Exhibits.
Exhibits Number Description - --------------- ----------- 23 Consent of Coopers & Lybrand L.L.P. Independent Accountants
4 6 INDEX TO FINANCIAL STATEMENTS
PAGE ---- 1997 ACQUISITION II PROPERTIES Combined Historical Statements of Revenues and Certain Expenses for the 1997 Acquisition II Properties for the Six Months Ended June 30, 1997 and the Year Ended December 31, 1996 - Unaudited..................... 6 PACIFICA ACQUISITION PROPERTIES Report of Independent Accountants.................................... 7 Combined Historical Statements of Revenues and Certain Expenses for the Pacifica Acquisition Properties for the Six Months Ended June 30, 1997 and for the Year Ended December 31, 1996............... 8 Notes to Combined Historical Statements of Revenues and Certain Expenses............................................................. 9-10 SEALY ACQUISITION PROPERTIES Report of Independent Accountants.................................... 11 Combined Historical Statements of Revenues and Certain Expenses for the Sealy Acquisition Properties for the Six Months Ended June 30, 1997 and for the Year Ended December 31, 1996........................ 12 Notes to Combined Historical Statements of Revenues and Certain Expenses............................................................. 13-14 1997 ACQUISITION III PROPERTIES Report of Independent Accountants.................................... 15 Combined Historical Statements of Revenues and Certain Expenses for the 1997 Acquisition III Properties for the Six Months Ended June 30, 1997 and for the Year Ended December 31, 1996............... 16 Notes to Combined Historical Statements of Revenues and Certain Expenses............................................................. 17-18 PRO FORMA FINANCIAL INFORMATION Pro Forma Statement of Operations for the Six Months Ended June 30, 1997........................................................ 19-20 Notes to Pro Forma Financial Statements.............................. 21-22 Pro Forma Statement of Operations for the Year Ended December 31, 1996................................................................. 23-25 Notes to Pro Forma Financial Statements.............................. 26-28
5 7 1997 ACQUISITION II PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) The Combined Historical Statements of Revenues and Certain Expenses as shown below, present the summarized results of operations of 23 of the 202 properties acquired or contracted to be acquired by First Industrial, L.P. (the "Operating Partnership") during the period July 15, 1997 through October 31, 1997 ( the "1997 Acquisition II Properties"). These statements are exclusive of 91 properties (the "Pacifica Phase I Properties") acquired by the Operating Partnership on October 30, 1997 and 15 properties (the "Pacifica Phase II Properties") contracted to be acquired by the Operating Partnership within the next several months (together, the "Pacifica Acquisition Properties"), which have been audited and are included elsewhere in this Form 8-K, 64 properties (the "Sealy Acquisition Properties") contracted to be acquired by the Operating Partnership by November 30, 1997, which have been audited and are included elsewhere in this Form 8-K and seven properties (the "1997 Acquisition III Properties") acquired by the Operating Partnership on October 17, 1997 which have been audited and are included elsewhere in this Form 8-K, two parcels of land for future development and two properties occupied by the previous owner during the period July 15, 1997 through October 31, 1997. The 1997 Acquisition II Properties were acquired for an aggregate purchase price of approximately $43.5 million, have an aggregate gross leaseable area of approximately 1.6 million square feet. A description of each property is included in Item 5.
FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED JUNE 30, 1997 DECEMBER 31, 1996 (UNAUDITED) (UNAUDITED) -------------- ----------------- Revenues: Rental Income.................................... $ 3,003 $ 5,692 Tenant Recoveries and Other Income............... 629 1,203 -------------- ----------------- Total Revenues................................ 3,632 6,895 -------------- ----------------- Expenses: Real Estate Taxes................................ 737 1,433 Repairs and Maintenance.......................... 178 409 Property Management.............................. 128 237 Utilities......................................... 25 47 Insurance........................................ 31 50 Other............................................ 3 31 -------------- ----------------- Total Expenses................................ 1,102 2,207 -------------- ----------------- Revenues in Excess of Certain Expenses............ $ 2,530 $ 4,688 =============== =================
6 8 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of First Industrial, L.P. We have audited the accompanying combined historical statement of revenues and certain expenses of the Pacifica Acquisition Properties as described in Note 1 for the year ended December 31, 1996. This financial statement is the responsibility of the Pacifica Acquisition Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined historical statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be a complete presentation of the Pacifica Acquisition Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Pacifica Acquisition Properties for the year ended December 31, 1996 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Chicago, Illinois October 27, 1997 7 9 PACIFICA ACQUISITION PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS)
FOR THE SIX MONTHS ENDED FOR THE JUNE 30, 1997 YEAR ENDED (UNAUDITED) DECEMBER 31, 1996 ------------- ----------------- Revenues: Rental Income..................................... $ 8,846 $ 16,849 Tenant Recoveries and Other Income................ 1,868 3,453 ------------- ----------------- Total Revenues................................. 10,714 20,302 ------------- ----------------- Expenses: Real Estate Taxes................................. 1,241 2,521 Repairs and Maintenance........................... 767 1,554 Property Management............................... 423 767 Utilities......................................... 282 547 Insurance......................................... 89 116 Other............................................. 7 155 ------------- ----------------- Total Expenses................................. 2,809 5,660 ------------- ----------------- Revenues in Excess of Certain Expenses............ $ 7,905 $ 14,642 ============= =================
The accompanying notes are an integral part of the financial statements. 8 10 PACIFICA ACQUISITION PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 1. BASIS OF PRESENTATION. The Combined Historical Statements of Revenues and Certain Expenses (the "Statements") combined the results of operations of 91 properties acquired by First Industrial, L.P. (the "Operating Partnership") and 15 properties to be acquired within the next several months (together, the "Pacifica Acquisition Properties"). The Pacifica Acquisition Properties are contracted to be acquired for an aggregate purchase price of approximately $193.6 million. Summary information regarding the Pacifica Acquisition Properties is as follows:
SQUARE # OF FEET DATE RENTAL METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED - ----------------- ------------------------ ----------------- Denver, CO 106 4,123,846 (a)
- ----------------- (a) Rental history commenced on January 1, 1996 for 101 of the buildings. Rental history for the remaining five buildings, totaling 165,717 square feet, commenced after June 30, 1997 when these buildings were placed in service. The unaudited Combined Historical Statement of Revenues and Certain Expenses for the six months ended June 30, 1997 reflects, in the opinion of management, all adjustments necessary for a fair presentation of the interim statement. All such adjustments are of a normal and recurring nature. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Statements exclude certain expenses such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of the Pacifica Acquisition Properties that may not be comparable to the expenses expected to be incurred in their proposed future operations. Management is not aware of any material factors relating to these properties which would cause the reported financial information not to be necessarily indicative of future operating results. In order to conform with generally accepted accounting principles, management, in preparation of the Statements, is required to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting periods. Actual results could differ from these estimates. Revenue and Expense Recognition The Statements have been prepared on the accrual basis of accounting. Rental income is recorded when due from tenants. The effects of scheduled rent increases and rental concessions, if any, are recognized on a straight-line basis over the term of the tenant's lease. 9 11 PACIFICA ACQUISITION PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 3. FUTURE RENTAL REVENUES The Pacifica Acquisition Properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursement of expenses, under noncancelable operating leases in effect as of December 31, 1996 are approximately as follows:
Pacifica Acquisition Properties ----------- 1997 $11,888 1998 10,476 1999 7,803 2000 5,410 2001 3,150 Thereafter 4,050 ------- Total $42,777 =======
10 12 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of First Industrial, L.P. We have audited the accompanying combined historical statement of revenues and certain expenses of the Sealy Acquisition Properties as described in Note 1 for the year ended December 31, 1996. This financial statement is the responsibility of the Sealy Acquisition Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined historical statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be a complete presentation of the Sealy Acquisition Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the Sealy Acquisition Properties for the year ended December 31, 1996 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Chicago, Illinois October 16, 1997 11 13 SEALY ACQUISITION PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS)
FOR THE SIX MONTHS ENDED FOR THE JUNE 30, 1997 YEAR ENDED (UNAUDITED) DECEMBER 31, 1996 ------------- ----------------- Revenues: Rental Income............................ $ 8,113 $ 15,163 Tenant Recoveries and Other Income....... 968 1,546 ------------- ----------------- Total Revenues......................... 9,081 16,709 ------------- ----------------- Expenses: Real Estate Taxes........................ 1,097 2,068 Repairs and Maintenance.................. 903 1,546 Property Management...................... 391 700 Utilities................................ 243 329 Insurance................................ 126 264 Other.................................... --- --- ------------- ----------------- Total Expenses........................ 2,760 4,907 ------------- ----------------- Revenues in Excess of Certain Expenses.... $ 6,321 $ 11,802 ============= =================
The accompanying notes are an integral part of the financial statements. 12 14 SEALY ACQUISITION PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 1. BASIS OF PRESENTATION. The Combined Historical Statements of Revenues and Certain Expenses (the "Statements") combined the results of operations of 64 properties contracted to be acquired by November 30, 1997 (the "Sealy Acquisition Properties") by First Industrial, L.P. (the "Operating Partnership"). Summary information regarding the Sealy Acquisition Properties is as follows: The Sealy Acquisition Properties are contracted to be acquired for an aggregate purchase price of approximately $128.5 million. Summary information responding to Sealy acquisition properties as follows:
SQUARE # OF FEET DATE RENTAL METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED - ----------------- ------------------------ ----------------- Atlanta, GA 2 67,569 January 1, 1996 Baton Rouge, LA 4 225,147 January 1, 1996 Dallas, TX 19 1,620,442 January 1, 1996 Houston, TX 22 2,127,201 January 1, 1996 New Orleans, LA 14 557,453 January 1, 1996 Shreveport, LA 1 50,000 January 1, 1996 Tampa, FL 2 153,377 January 1, 1996 ------------------------ TOTAL 64 4,801,189 ========================
The unaudited Combined Historical Statement of Revenues and Certain Expenses for the six months ended June 30, 1997 reflects, in the opinion of management, all adjustments necessary for a fair presentation of the interim statement. All such adjustments are of a normal and recurring nature. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Statements exclude certain expenses such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of the Sealy Acquisition Properties that may not be comparable to the expenses expected to be incurred in their proposed future operations. Management is not aware of any material factors relating to these properties which would cause the reported financial information not to be necessarily indicative of future operating results. In order to conform with generally accepted accounting principles, management, in preparation of the Statements, is required to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting periods. Actual results could differ from these estimates. Revenue and Expense Recognition The Statements have been prepared on the accrual basis of accounting. Rental income is recorded when due from tenants. The effects of scheduled rent increases and rental concessions, if any, are recognized on a straight-line basis over the term of the tenant's lease. 13 15 SEALY ACQUISITION PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 3. FUTURE RENTAL REVENUES The Sealy Acquisition Properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursement of expenses, under noncancelable operating leases in effect as of December 31, 1996 are approximately as follows:
Sealy Acquisition Properties ----------- 1997 $ 16,482 1998 13,525 1999 9,404 2000 5,057 2001 2,625 Thereafter 2,861 -------- Total $ 49,954 ========
14 16 REPORT OF INDEPENDENT ACCOUNTANTS To the Partners of First Industrial, L.P. We have audited the accompanying combined historical statement of revenues and certain expenses of the 1997 Acquisition III Properties as described in Note 1 for the year ended December 31, 1996. This financial statement is the responsibility of the 1997 Acquisition III Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The accompanying combined historical statement of revenues and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in the Form 8-K dated October 30, 1997 of First Industrial, L.P. and is not intended to be a complete presentation of the 1997 Acquisition III Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the revenues and certain expenses of the 1997 Acquisition III Properties for the year ended December 31, 1996 in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. Chicago, Illinois October 20, 1997 15 17 1997 ACQUISITION III PROPERTIES COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS)
FOR THE SIX MONTHS ENDED FOR THE JUNE 30, 1997 YEAR ENDED (UNAUDITED) DECEMBER 31, 1996 ------------- ----------------- Revenues: Rental Income.................................... $ 952 $ 1,945 Tenant Recoveries and Other Income............... 123 244 ------------- ----------------- Total Revenues................................ 1,075 2,189 ------------- ----------------- Expenses: Real Estate Taxes................................ 105 222 Repairs and Maintenance.......................... 82 168 Property Management.............................. 45 91 Utilities........................................ 23 51 Insurance........................................ 7 14 Other............................................ 46 4 ------------- ----------------- Total Expenses................................ 308 550 ------------- ----------------- Revenues in Excess of Certain Expenses............ $ 767 $ 1,639 ============= =================
The accompanying notes are an integral part of the financial statements. 16 18 1997 ACQUISITION III PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 1. BASIS OF PRESENTATION. The Combined Historical Statements of Revenues and Certain Expenses (the "Statements") combined the results of operations of seven properties acquired by First Industrial, L.P. (the "Operating Partnership") on October 17, 1997 (the "1997 Acquisition III Properties"). The 1997 Acquisition III Properties were acquired for an aggregate purchase price of approximately $ 17.7 million. Summary information regarding the 1997 Acquisition III Properties is as follows:
SQUARE # OF FEET DATE RENTAL METROPOLITAN AREA PROPERTIES (UNAUDITED) HISTORY COMMENCED - ----------------- ------------------------ ----------------- Nashville, TN 7 480,118 January 1, 1996
The unaudited Combined Historical Statement of Revenues and Certain Expenses for the six months ended June 30, 1997 reflects, in the opinion of management, all adjustments necessary for a fair presentation of the interim statement. All such adjustments are of a normal and recurring nature. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. The Statements exclude certain expenses such as interest, depreciation and amortization, professional fees, and other costs not directly related to the future operations of the 1997 Acquisition III Properties that may not be comparable to the expenses expected to be incurred in their proposed future operations. Management is not aware of any material factors relating to these properties which would cause the reported financial information not to be necessarily indicative of future operating results. In order to conform with generally accepted accounting principles, management, in preparation of the Statements, is required to make estimates and assumptions that affect the reported amounts of revenues and certain expenses during the reporting periods. Actual results could differ from these estimates. Revenue and Expense Recognition The Statements have been prepared on the accrual basis of accounting. Rental income is recorded when due from tenants. The effects of scheduled rent increases and rental concessions, if any, are recognized on a straight-line basis over the term of the tenant's lease. 17 19 1997 ACQUISITION III PROPERTIES NOTES TO COMBINED HISTORICAL STATEMENTS OF REVENUES AND CERTAIN EXPENSES (DOLLARS IN THOUSANDS) 3. FUTURE RENTAL REVENUES The 1997 Acquisition III Properties are leased to tenants under net and semi-net operating leases. Minimum lease payments receivable, excluding tenant reimbursement of expenses, under noncancelable operating leases in effect as of December 31, 1996 are approximately as follows:
1997 Acquisition III Properties --------------- 1997 $ 1,581 1998 1,256 1999 720 2000 395 2001 229 Thereafter 497 --------------- Total $ 4,678 ===============
18 20 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1997 Lazarus Punia Other 1997 First Acquisition Burman Acquisition Acquisition Industrial, L.P. Property Properties Properties Properties (Historical) (Historical) (Historical) (Historical) (Historical) Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) Note 2 (e) ---------------- ------------- ------------- ------------ ------------ REVENUES: Rental Income....................... $32,447 $20 $1,501 $5,354 $ 952 Tenant Recoveries and Other Income....................... 7,831 5 374 1,157 461 ------- ---- ------ ------ ----- Total Revenues.................... 40,278 25 1,875 6,511 1,413 ------- ---- ------ ------ ----- EXPENSES: Real Estate Taxes................... 6,933 4 396 983 431 Repairs and Maintenance............. 1,715 1 119 267 48 Property Management................. 1,766 1 59 124 15 Utilities........................... 1,160 3 77 268 6 Insurance........................... 95 --- 22 85 8 Other............................... 514 --- 37 --- --- General and Administrative.......... 2,642 --- --- --- --- Interest Expense.................... 9,107 --- --- --- --- Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.............................. 8 --- --- --- --- Depreciation and Other Amortization....................... 6,243 --- --- --- --- ------- ---- ------ ------ ----- Total Expenses.................... 30,183 9 710 1,727 508 ------- ---- ------ ------ ----- Income Before Disposition of Interest Rate Protection Agreements, Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item.................. 10,095 16 1,165 4,784 905 Disposition of Interest Rate Protection Agreements............... 4,038 --- --- --- --- Gain on Sales of Properties.......... 460 --- --- --- --- ------- ---- ------ ------ ----- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item................................ 14,593 16 1,165 4,784 905 Equity in Income of Other Real Estate Partnerships................. 8,030 --- --- --- --- ------- ---- ------ ------ ----- Income Before Extraordinary Item................................ $22,623 $16 $1,165 $4,784 $ 905 ======= ==== ====== ====== ===== 1997 Acquisition I Properties Subtotal (Historical) Carry Note 2 (f) Forward ------------- --------- REVENUES: Rental Income....................... $550 $40,824 Tenant Recoveries and Other Income....................... 236 10,064 ----- ------- Total Revenues.................... 786 50,888 ----- ------- EXPENSES: Real Estate Taxes................... 194 8,941 Repairs and Maintenance............. 31 2,181 Property Management................. 22 1,987 Utilities........................... 1 1,515 Insurance........................... 5 215 Other............................... --- 551 General and Administrative.......... --- 2,642 Interest Expense.................... --- 9,107 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.............................. --- 8 Depreciation and Other Amortization....................... --- 6,243 ----- ------- Total Expenses.................... 253 33,390 ----- ------- Income Before Disposition of Interest Rate Protection Agreements, Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item.................. 533 17,498 Disposition of Interest Rate Protection Agreements............... --- 4,038 Gain on Sales of Properties.......... --- 460 ----- ------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item................................ 533 21,996 Equity in Income of Other Real Estate Partnerships................. --- 8,030 ----- ------- Income Before Extraordinary Item................................ $533 $30,026 ===== =======
The accompanying notes are an integral part of the pro forma financial statement 19 21 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1997 1997 Pacifica Sealy Acquisition Acquisition Acquisition Acquisition III II Subtotal Properties Properties Properties Properties Pro Forma Carry (Historical) (Historical) (Historical) (Historical) Adjustments Forward Note 2 (g) Note 2 (h) Note 2 (i) Note 2 (j) Note 2 (k) ------- ------------ ------------ ------------- ------------- ----------- REVENUES: Rental Income................... $40,824 $8,846 $8,113 $ 952 $3,003 $ --- Tenant Recoveries and Other Income................... 10,064 1,868 968 123 629 --- ------- ------ ------ ----- ------ -------- Total Revenues................ 50,888 10,714 9,081 1,075 3,632 --- ------- ------ ------ ----- ------ -------- EXPENSES: Real Estate Taxes............... 8,941 1,241 1,097 105 737 --- Repairs and Maintenance......... 2,181 767 903 82 178 --- Property Management............. 1,987 423 391 45 128 --- Utilities....................... 1,515 282 243 23 25 --- Insurance....................... 215 89 126 7 31 --- Other........................... 551 7 --- 46 3 --- General and Administrative...... 2,642 --- --- --- --- --- Interest Expense................ 9,107 --- --- --- --- 5,254 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.......................... 8 --- --- --- --- --- Depreciation and Other Amortization.................... 6,243 --- --- --- --- 5,445 ------- ------ ------ ----- ------ -------- Total Expenses................ 33,390 2,809 2,760 308 1,102 10,699 ------- ------ ------ ----- ------ -------- Income Before Disposition of Interest Rate Protection Agreements, Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................... 17,498 7,905 6,321 767 2,530 (10,699) Disposition of Interest Rate Protection Agreements........... 4,038 --- --- --- --- --- Gain on Sales of Properties...... 460 --- --- --- --- --- ------- ------ ------ ----- ------ -------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................... 21,996 7,905 6,321 767 2,530 (10,699) Equity in Income of Other Real Estate Partnerships............ 8,030 --- --- --- --- 371 ------- ------ ------ ----- ------ -------- Income Before Extraordinary Item........................... $30,026 $7,905 $6,321 $ 767 $2,530 $(10,328) ======= ====== ====== ===== ====== ======== First Industrial, L.P. Pro Forma ----------- REVENUES: Rental Income................... $61,738 Tenant Recoveries and Other Income................... 13,652 ------- Total Revenues................ 75,390 ------- EXPENSES: Real Estate Taxes............... 12,121 Repairs and Maintenance......... 4,111 Property Management............. 2,974 Utilities....................... 2,088 Insurance....................... 468 Other........................... 607 General and Administrative...... 2,642 Interest Expense................ 14,361 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.......................... 8 Depreciation and Other Amortization.................... 11,688 ------- Total Expenses................ 51,068 ------- Income Before Disposition of Interest Rate Protection Agreements, Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................... 24,322 Disposition of Interest Rate Protection Agreements........... 4,038 Gain on Sales of Properties...... 460 ------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................... 28,820 Equity in Income of Other Real Estate Partnerships............ 8,401 ------- Income Before Extraordinary Item........................... $37,221 =======
The accompanying notes are an integral part of the pro forma financial statement. 20 22 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION. First Industrial, L.P. (the "Operating Partnership") was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the "Company") with an approximate 88.0% ownership interest at June 30, 1997. The accompanying unaudited proforma statement of operations for the Operating Partnership reflects the historical operations of the Operating Partnership for the period January 1, 1997 through June 30, 1997, the acquisition of one property on January 9, 1997 (the "1997 Acquisition Property") and 39 properties acquired on January 31, 1997 (the "Lazarus Burman Properties") which are reported on Form 8-K/A No.1 dated February 12, 1997, 15 properties (the "Punia Phase I Properties") acquired on June 30, 1997 and 27 properties acquired through October 31, 1997 and six properties to be acquired (the "Punia Phase II Properties") (together, the "Punia Acquisition Properties") which are reported on Form 8-K/A No.1 dated June 30, 1997, 9 properties acquired during the period February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition Properties"), two properties acquired during the period February 1, 1997 through July 14, 1997 (the "1997 Acquisition I Properties") reported on Form 8-K/A No. 2 dated June 30, 1997 and the acquisition of 91 properties on October 30, 1997 and the additional 15 properties to be acquired within the next several months (together, the "Pacifica Acquisition Properties"), 64 properties to be acquired by November 30, 1997 (the "Sealy Acquisition Properties"), seven properties acquired on October 17, 1997 (the "1997 Acquisition III Properties") and 23 properties acquired during the period July 15, 1997 through October 31, 1997 (the "1997 Acquisition II Properties") reported on this Form 8-K dated October 30, 1997. The accompanying unaudited pro forma financial statement has been prepared based upon certain pro forma adjustments to the historical June 30, 1997 financial statements of the Operating Partnership. The pro forma statement of operations for the six months ended June 30, 1997 has been prepared as if the properties acquired subsequent to December 31, 1996 had been acquired on either January 1, 1996 or the lease commencement date if the property was developed and as if the 8 3/4% Series B Preferred Units issued on May 14, 1997 (the "Series B Preferred Capital Contribution"), the 8 5/8% Series C Preferred Units issued on June 6, 1997 (the "Series C Preferred Capital Contribution"), the 637,440 Operating Partnership units issued September 16, 1997 (the "September 1997 Capital Contribution") and the 5,400,000 Operating Partnership units issued on October 15, 1997 (the "October 1997 Capital Contribution") had been completed on January 1, 1996. The unaudited pro forma financial statement is not necessarily indicative of what the Operating Partnership's results of operations would have been for the six months ended June 30, 1997 had the properties been acquired as described above, nor do they purport to present the future results of operations of the Operating Partnership. 2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - JUNE 30, 1997 (a) The historical operations reflect the operations of the Operating Partnership for the period January 1, 1997 through June 30, 1997 as reported on the Company's Form 10-Q/A No. 1 dated August 26, 1997. (b) The historical operations reflect the operations of the 1997 Acquisition Property for the period January 1, 1997 through the acquisition date of this property on January 9, 1997. (c) The historical operations reflect the operations of the Lazarus Burman Properties for the period January 1, 1997 through January 31, 1997. (d) The historical operations reflect the operations of the Punia Acquisition Properties for the period January 1, 1997 through June 30, 1997. 21 23 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS (e) The historical operations reflect the operations of the Other 1997 Acquisition Properties for the period January 1, 1997 through the earlier of June 30, 1997 or their respective acquisition dates. (f) The historical operations reflect the operations of the 1997 Acquisition I Properties for the period January 1, 1997 through the earlier of June 30, 1997 or their respective acquisition dates. (g) The historical operations reflect the operations of the Pacifica Acquisition Properties for the period January 1, 1997 through June 30, 1997. (h) The historical operations reflect the operations of the Sealy Acquisition Properties for the period January 1, 1997 through June 30, 1997. (i) The historical operations reflect the operations of the 1997 Acquisition III Properties for the period January 1, 1997 through June 30, 1997. (j) The historical operations reflect the operations of the 1997 Acquisition II Properties for the period January 1, 1997 through June 30, 1997. (k) In connection with the Lazarus Burman Properties acquisition, the Operating Partnership assumed two mortgage loans totaling $4.5 million (the "Lazarus Burman Mortgage Loans"). The interest expense adjustment reflects interest on the Lazarus Burman Mortgage Loans for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1996. The interest expense adjustment reflects an increase in the acquisition facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR") plus 1%) for the assumed earlier purchase of the 1997 Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the 1997 Acquisition III Properties and the 1997 Acquisition II Properties, offset by the interest savings related to the assumed repayment of $144.0 million of acquisition facility borrowings on January 1, 1996 from the proceeds of the Series B Preferred Capital Contribution and Series C Preferred Capital Contribution and the assumed repayment of $196.1 million of acquisition facility borrowings on January 1, 1996 from the proceeds of the September 1997 Capital Contribution and the October 1997 Capital Contribution. The depreciation and amortization adjustments reflect the charges for the 1997 Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the 1997 Acquisition III Properties and the 1997 Acquisition II Properties from January 1, 1997 through the earlier of their respective acquisition date or June 30, 1997 and if such properties were acquired on January 1, 1996. The equity in income of other real estate partnerships adjustment reflects the Operating Partnership's 99% limited partnership equity interest in an acquisition made by First Industrial Pennsylvania Partnership, L.P. and the operations of an acquisition made by First Industrial Financing Partnership, L.P. 22 24 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
First First Other Industrial, Highland Acquisition Acquisition L.P. Properties Properties Properties (Historical) (Historical) (Historical) (Historical) Note 2 (a) Note 2 (b) Note 2 (c) Note 2 (d) ----------- ---------- ----------- ----------- REVENUES: Rental Income................................ $ 29,166 $ 1,385 $ 1,029 $ 2,893 Tenant Recoveries and Other Income................................ 8,421 99 218 469 ----------- ---------- ----------- ----------- Total Revenues............................. 37,587 1,484 1,247 3,362 ----------- ---------- ----------- ----------- EXPENSES: Real Estate Taxes............................ 6,109 129 237 519 Repairs and Maintenance...................... 1,071 89 45 139 Property Management.......................... 1,153 62 40 109 Utilities.................................... 1,047 153 21 68 Insurance.................................... 271 23 14 44 Other........................................ 284 --- --- --- General and Administrative................... 4,014 --- --- --- Interest Expense............................. 4,685 --- --- --- Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.................... 196 --- --- --- Depreciation and Other Amortization................................ 6,310 --- --- --- ----------- ---------- ----------- ----------- Total Expenses............................ 25,140 456 357 879 ----------- ---------- ----------- ----------- Income Before Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 12,447 1,028 890 2,483 Gain on Sale of Properties.................... 4,344 --- --- --- ----------- ---------- ----------- ----------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item......................................... 16,791 1,028 890 2,483 Equity in Income of Other Real Estate Partnerships................................. 20,130 --- --- --- ----------- ---------- ----------- ----------- Income Before Extraordinary Item......................................... $ 36,921 $ 1,028 $ 890 $ 2,483 ============ ========== =========== ===========
1996 1997 Acquisition Acquisition Properties Property (Historical) (Historical) Subtotal Note 2 (e) Note 2 (f) Carry Forward ----------- ----------- -------------- REVENUES: Rental Income................................ $ 7,601 $ 948 $ 43,022 Tenant Recoveries and Other Income................................ 944 210 10,361 ----------- ----------- -------------- Total Revenues............................. 8,545 1,158 53,383 ----------- ----------- -------------- EXPENSES: Real Estate Taxes............................ 1,283 167 8,444 Repairs and Maintenance...................... 539 62 1,945 Property Management.......................... 354 30 1,748 Utilities.................................... 30 135 1,454 Insurance.................................... 65 --- 417 Other........................................ 2 --- 286 General and Administrative................... --- --- 4,014 Interest Expense............................. --- --- 4,685 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.................... --- --- 196 Depreciation and Other Amortization................................ --- --- 6,310 ----------- ----------- -------------- Total Expenses............................ 2,273 394 29,499 ----------- ----------- -------------- Income Before Gain on Sales of Properties, Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 6,272 764 23,884 Gain on Sale of Properties.................... --- --- 4,344 ----------- ----------- -------------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item......................................... 6,272 764 28,228 Equity in Income of Other Real Estate Partnerships................................. --- --- 20,130 ----------- ----------- -------------- Income Before Extraordinary Item......................................... $ 6,272 $ 764 $ 48,358 =========== =========== ==============
The accompanying notes are an integral part of the pro forma financial statement 23 25 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Lazarus Punia Other 1997 Burman Acquisition Acquisition Subtotal Properties Properties Properties Carry (Historical) (Historical) (Historical) Forward Note 2 (g) Note 2 (h) Note 2(i) ------- ---------- ---------- ----------- REVENUES: Rental Income............................... $43,022 $18,606 $10,448 $2,749 Tenant Recoveries and Other Income..................................... 10,361 4,636 2,668 987 ------- ---------- ---------- ----------- Total Revenues........................... 53,383 23,242 13,116 3,736 ------- ---------- ---------- ----------- EXPENSES: Real Estate Taxes........................... 8,444 4,767 1,908 1,051 Repairs and Maintenance..................... 1,945 1,477 795 99 Property Management......................... 1,748 732 329 60 Utilities................................... 1,454 959 586 27 Insurance................................... 417 275 160 23 Other....................................... 286 457 218 --- General and Administrative................... 4,014 --- --- --- Interest Expense............................. 4,685 --- --- --- Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.................... 196 --- --- --- Depreciation and Other Amortization................................ 6,310 --- --- --- ------- ---------- ---------- ----------- Total Expenses........................... 29,499 8,667 3,996 1,260 ------- ---------- ---------- ----------- Income Before Gain on Sales of Properties, Minority Interest and Extraordinary Item ....................................... 23,884 14,575 9,120 2,476 Gain on Sales of Properties.................. 4,344 --- --- --- ------- ---------- ---------- ----------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 28,228 14,575 9,120 2,476 Equity in Income of Other Real Estate Partnerships................................ 20,130 --- --- --- ------- ---------- ---------- ----------- Income Before Extraordinary Item........................................ $48,358 $14,575 $9,120 $2,476 ======= ========== ========== ===========
1997 Acquisition I Properties Subtotal (Historical) Carry Note 2 (j) Forward ----------- -------- REVENUES: Rental Income............................... $1,451 $76,276 Tenant Recoveries and Other Income..................................... 648 19,300 ----------- -------- Total Revenues........................... 2,099 95,576 ----------- -------- EXPENSES: Real Estate Taxes........................... 490 16,660 Repairs and Maintenance..................... 102 4,418 Property Management......................... 54 2,923 Utilities................................... 7 3,033 Insurance................................... 22 897 Other....................................... --- 961 General and Administrative................... --- 4,014 Interest Expense............................. --- 4,685 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs.................... --- 196 Depreciation and Other Amortization................................ --- 6,310 ----------- -------- Total Expenses........................... 675 44,097 ----------- -------- Income Before Gain on Sales of Properties, Minority Interest and Extraordinary Item ....................................... 1,424 51,479 Gain on Sales of Properties.................. --- 4,344 ----------- -------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 1,424 55,823 Equity in Income of Other Real Estate Partnerships................................ --- 20,130 ----------- -------- Income Before Extraordinary Item........................................ 1,424 $75,953 =========== ========
The accompanying notes are an integral part of the pro forma financial statement. 24 26 FIRST INDUSTRIAL, L.P. PRO FORMA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1997 Pacifica Sealy Acquisition Acquisition Acquisition III Subtotal Properties Properties Properties Carry (Historical) (Historical) (Historical) Forward Note 2 (k) Note 2 (l) Note 2 (m) -------- ----------- ----------- ------------ REVENUES: Rental Income............................... $ 76,276 $ 16,849 $ 15,163 $ 1,945 Tenant Recoveries and Other Income............................... 19,300 3,453 1,546 244 -------- ----------- ----------- ------------ Total Revenues........................... 95,576 20,302 16,709 2,189 -------- ----------- ----------- ------------ EXPENSES: Real Estate Taxes........................... 16,660 2,521 2,068 222 Repairs and Maintenance..................... 4,418 1,554 1,546 168 Property Management......................... 2,923 767 700 91 Utilities................................... 3,033 547 329 51 Insurance................................... 897 116 264 14 Other....................................... 961 155 --- 4 General and Administrative.................. 4,014 --- --- --- Interest Expense............................ 4,685 --- --- --- Amortization of Interest Rate Protection Agreements and Deferred Financing Costs................... 196 --- --- --- Depreciation and Other Amortization............................... 6,310 --- --- --- -------- ----------- ----------- ------------ Total Expenses........................... 44,097 5,660 4,907 550 -------- ----------- ----------- ------------ Income Before Gain on Sales of Properties, Minority Interest and Extraordinary Item...................... 51,479 14,642 11,802 1,639 Gain on Sale of Properties................... 4,344 --- --- --- -------- ----------- ----------- ------------ Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 55,823 14,642 11,802 1,639 Equity in Income of Other Real Estate Partnerships................................ 20,130 --- --- --- -------- ----------- ----------- ------------ Income Before Extraordinary Item........................................ $ 75,953 $ 14,642 $ 11,802 $ 1,639 ======== =========== =========== ============
1997 Acquisition II Properties Pro Forma Pro Forma (Historical) Adjustments First Note 2 (n) Note 2 (o) Industrial, L.P. ----------- ----------- ---------------- REVENUES: Rental Income............................... $ 5,692 $ --- $115,925 Tenant Recoveries and Other Income............................... 1,203 --- 25,746 ----------- ----------- -------- Total Revenues........................... 6,895 --- 141,671 ----------- ----------- -------- EXPENSES: Real Estate Taxes........................... 1,433 --- 22,904 Repairs and Maintenance..................... 409 --- 8,095 Property Management......................... 237 --- 4,718 Utilities................................... 47 --- 4,007 Insurance................................... 50 --- 1,341 Other....................................... 31 --- 1,151 General and Administrative.................. --- --- 4,014 Interest Expense............................ --- 16,834 21,519 Amortization of Interest Rate Protection Agreements and Deferred Financing Costs................... --- --- 196 Depreciation and Other Amortization............................... --- 16,082 22,392 ----------- ----------- -------- Total Expenses........................... 2,207 32,916 90,337 ----------- ----------- -------- Income Before Gain on Sales of Properties, Minority Interest and Extraordinary Item...................... 4,688 (32,916) 51,334 Gain on Sale of Properties................... --- --- 4,344 ----------- ----------- -------- Income Before Equity in Income of Other Real Estate Partnerships and Extraordinary Item........................................ 4,688 (32,916) 55,678 Equity in Income of Other Real Estate Partnerships................................ --- 1,547 21,677 ----------- ----------- -------- Income Before Extraordinary Item........................................ $ 4,688 $ (31,369) 77,355 =========== =========== ========
The accompanying notes are an integral part of the pro forma financial statement 25 27 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION. First Industrial, L.P. (the "Operating Partnership") was organized as a limited partnership in the state of Delaware on November 23, 1993. The sole general partner is First Industrial Realty Trust, Inc. (the "Company") with an approximate 88.0% ownership interest at June 30, 1997. The accompanying unaudited pro forma statement of operations for the Operating Partnership reflects the historical operations of the Company for the period January 1, 1996 through December 31, 1996 and the acquisition of 27 properties (the "First Highland Properties") and 18 properties (the "Other Acquisition Properties") acquired by the Operating Partnership between January 1, 1996 and April 10, 1996, the acquisition of 14 properties (the "Acquisition Properties") and 43 (the "1996 Acquisition Properties") between April 11, 1996 and December 31, 1996, one property acquired on January 9, 1997 (the "1997 Acquisition Property"), and 39 properties acquired on January 31, 1997 (the "Lazarus Burman Properties") which are reported on Amendment No. 3 to Form S-3 dated April 30, 1997, the acquisition of 15 properties (the "Punia Phase I Properties") acquired on June 30, 1997 and 27 properties acquired through October 31, 1997 and six properties to be acquired (the "Punia Phase II Properties") (together, the "Punia Acquisition Properties") which are reported on Form 8-K/A No. 1 dated June 30, 1997, nine properties acquired during the period February 1, 1997 through July 14, 1997 (the "Other 1997 Acquisition Properties") and two properties acquired during the period February 1, 1997 through July 14, 1997 (the "1997 Acquisition I Properties") reported on Form 8-K/A No. 2 dated June 30, 1997 and the acquisition of 91 properties on October 30, 1997 and the additional 15 properties to be acquired within the next several months (together, the "Pacifica Acquisition Properties"), 64 properties to be acquired by November 30, 1997 (the "Sealy Acquisition Properties"), seven properties acquired on October 17, 1997 (the "1997 Acquisition III Properties") and 23 properties acquired during the period July 15, 1997 through October 31, 1997 (the "1997 Acquisition II Properties") reported on this Form 8-K dated October 30, 1997. The accompanying unaudited pro forma financial statement has been prepared based upon certain pro forma adjustments to the historical December 31, 1996 financial statements of the Operating Partnership. The pro forma statement of operations for the year ended December 31, 1996 has been prepared as if the properties acquired subsequent to December 31, 1995 had been acquired on either January 1, 1996 or the lease commencement date if the property was developed and as if the 5,175,000 Operating Partnership units (the "Units") issued on February 2, 1996 (the "February 1996 Capital Contribution"), the 5,750,000 Units issued on October 25, 1996 (the "October 1996 Capital Contribution"), the 8 3/4% Series B Preferred Units issued on May 14, 1997 (the "Series B Preferred Capital Contribution"), the 8 5/8% Series C Preferred Units issued on June 6, 1997 (the "Series C Preferred Capital Contribution"), the 637,440 Units issued September 16, 1997 (the "September 1997 Capital Contribution") and the 5,400,000 Units issued on October 15, 1997 (the "October 1997 Capital Contribution") had been completed on January 1, 1996. The unaudited pro forma financial statement is not necessarily indicative of what the Operating Partnership's results of operations would have been for the year ended December 31, 1996 had the properties been acquired as described above, nor do they purport to present the future results of operations of the Operating Partnership. 2. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS - DECEMBER 31, 1996 (a) The historical operations reflect income from continuing operations of the Operating Partnership for the period January 1, 1996 through December 31, 1996 as reported on the Operating Partnership's Amendment No. 3 to Form S-3 dated April 30, 1997. (b) The historical operations reflect the operations of the First Highland Properties for the period January 1, 1996 through the acquisition date of these properties on March 20, 1996. 26 28 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS (c) The historical operations reflect the operations of the Other Acquisition Properties for the period January 1, 1996 through their respective acquisition dates. (d) The historical operations reflect the operations of the Acquisition Properties for the period January 1, 1996 through their respective acquisition dates. (e) The historical operations reflect the operations of the 1996 Acquisition Properties for the period January 1, 1996 through their respective acquisition dates. (f) The historical operations reflect the operations of the 1997 Acquisition Property for the period January 1, 1996 through December 31, 1996. (g) The historical operations reflect the operations of the Lazarus Burman Properties for the period January 1, 1996 through December 31, 1996. (h) The historical operations reflect the operations of the Punia Acquisition Properties for the period January 1, 1996 through December 31, 1996. (i) The historical operations reflect the operations of the Other 1997 Acquisition Properties for the period January 1, 1996 through December 31, 1996. (j) The historical operations reflect the operations of the 1997 Acquisition I Properties for the period January 1, 1996 through December 31, 1996. (k) The historical operations reflect the operations of the Pacifica Acquisition Properties for the period January 1, 1996 through December 31, 1996. (l) The historical operations reflect the operations of the Sealy Acquisition Properties for the period January 1, 1996 through December 31, 1996. (m) The historical operations reflect the operations of the 1997 Acquisition III Properties for the period January 1, 1996 through December 31, 1996. (n) The historical operations reflect the operations of the 1997 Acquisition II Properties for the period January 1, 1996 through December 31, 1996. (o) In connection with the First Highland Properties acquisition, the Operating partnership assumed two mortgage loans totaling $9.4 million (the "Assumed Indebtedness") and also entered into a new mortgage loan in the amount of $36.8 million (the "New Indebtedness"). The interest expense adjustment reflects interest on the Assumed Indebtedness and the New Indebtedness as if such indebtedness was outstanding beginning January 1, 1996. In connection with the Lazarus Burman Properties acquisition, the Operating Partnership assumed two mortgage loans totaling $4.5 million (the "Lazarus Burman Mortgage Loans"). The interest expense adjustment reflects interest on the Lazarus Burman Mortgage Loans for the pro forma period and as if such indebtedness was outstanding beginning January 1, 1996. The interest expense adjustment reflects an increase in the acquisition facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR") plus 2%) for the assumed earlier purchase of the Other Acquisition Properties offset by the interest savings related to the assumed repayment of $59.4 million 27 29 FIRST INDUSTRIAL, L.P. NOTES TO PRO FORMA FINANCIAL STATEMENTS of acquisition facility borrowings on January 1, 1996 from the proceeds of the February 1996 Capital Contribution. The interest expense adjustment reflects an increase in the acquisition facility borrowings (at LIBOR plus 2%) for borrowings under the Operating Partnership's $150 million secured revolving credit facility (the "1994 Acquisition Facility") or LIBOR plus 1.1% for borrowings under the Company's $200 million unsecured revolving credit facility (the "1996 Acquisition Facility") for the assumed earlier purchase of the Acquisition Properties and the 1996 Acquisition Properties, offset by the related interest savings related to the assumed repayment of $84.2 million of acquisition facility borrowings on January 1, 1996 from the proceeds of the October 1996 Capital Contribution. The interest expense adjustment reflects an increase in the acquisition facility borrowings (at the 30-day London Interbank Offered Rate ("LIBOR") plus 1%) for the assumed earlier purchase of the 1997 Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the 1997 Acquisition III Properties and the 1997 Acquisition II Properties offset by the interest savings related to the assumed repayment of $144.0 million of acquisition facility borrowings on January 1, 1996 from the proceeds of the Series B Preferred Capital Contributions and Series C Preferred Capital Contributions and the assumed repayment of $196.1 million of acquisition facility borrowings on January 1, 1996 from the proceeds of the September 1997 Capital Contribution and the October 1997 Capital Contribution. The depreciation and amortization adjustment reflects the charges for the First Highland Properties, the Other Acquisition Properties, the Acquisition Properties, the 1996 Acquisition Properties, the 1997 Acquisition Property, the Lazarus Burman Properties, the Punia Acquisition Properties, the Other 1997 Acquisition Properties, the 1997 Acquisition I Properties, the Pacifica Acquisition Properties, the Sealy Acquisition Properties, the 1997 Acquisition III Properties and the 1997 Acquisition II Properties from January 1, 1996 through the earlier of their respective acquisition date or December 31, 1996 and if such properties were acquired on January 1, 1996. The equity in income of other real estate partnerships adjustment reflects the Operating Partnership's 99% limited partnership equity interest in the operations of an acquisition made by First Industrial Pennsylvania Partnership, L.P., the operations of an acquisition made by First Industrial Indianapolis, L.P and the operations of an acquisition made by First Industrial Financing Partnership, L.P. 28 30 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1933, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST INDUSTRIAL, L.P. BY: FIRST INDUSTRIAL REALTY TRUST, INC. Its Sole General Partner November 13, 1997 By: /s/ Michael J. Havala ----------------------------------- Michael J. Havala Chief Financial Officer (Principal Financial and Accounting Officer) 29 31 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 23 Consent of Coopers & Lybrand L.L.P., Independent Accountants
30 EX-23 2 CONSENT OF COOPERS & LYBRAND, L.L.P. 1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the inclusion in this Form 8-K dated October 30, 1997 and the incorporation by reference into the Registrant's two previously filed Registration Statements on Form S-3 (File Nos. 333-21873 and 333-29879) of our report dated October 27, 1997, on our audit of the combined historical statement of revenues and certain expenses of the Pacifica Acquisition Properties, of our report dated October 16, 1997 on our audit of the combined historical statement of revenues and certain expenses of the Sealy Acquisition Properties and of our report dated October 20, 1997 on our audit of the combined historical statement of certain revenues and certain expenses of the 1997 Acquisition III Properties. COOPERS & LYBRAND L.L.P. Chicago, Illinois November 13, 1997 31 -----END PRIVACY-ENHANCED MESSAGE-----