þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ohio | 34-6513657 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) | |
7 Bulfinch Place, Suite 500, Boston, Massachusetts | 02114 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Exchange on Which Registered | |
Common shares, $1.00 par value | New York Stock Exchange |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Item of Form 10-K | Page | |||||||
4 | ||||||||
12 | ||||||||
21 | ||||||||
22 | ||||||||
33 | ||||||||
33 | ||||||||
34 | ||||||||
37 | ||||||||
38 | ||||||||
54 | ||||||||
55 | ||||||||
104 | ||||||||
104 | ||||||||
104 | ||||||||
105 | ||||||||
105 | ||||||||
105 | ||||||||
105 | ||||||||
105 | ||||||||
106 | ||||||||
107 | ||||||||
108 | ||||||||
110 | ||||||||
Exhibit 10.19 | ||||||||
Exhibit 10.20 | ||||||||
Exhibit 21 | ||||||||
Exhibit 23.1 | ||||||||
Exhibit 23.2 | ||||||||
Exhibit 24 | ||||||||
Exhibit 31 | ||||||||
Exhibit 32 | ||||||||
Exhibit 99.1 |
2
| the declaration or payment of distributions by us; |
| the ownership, management and operation of properties; |
| potential acquisitions or dispositions of our properties, assets or other
businesses; |
| our policies regarding investments, acquisitions, dispositions, financings
and other matters; |
| our qualification as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, which we refer to as the Code; |
| the real estate industry and real estate markets in general; |
| the availability of debt and equity financing; |
| interest rates; |
| general economic conditions; |
| supply of real estate investment opportunities and demand; |
| trends affecting us or our assets; |
| the effect of acquisitions or dispositions on capitalization and financial
flexibility; |
| the anticipated performance of our assets and of acquired properties and
businesses, including, without limitation, statements regarding anticipated revenues, cash
flows, funds from operations, earnings before interest, depreciation and amortization,
property net operating income, operating or profit margins and sensitivity to economic
downturns or anticipated growth or improvements in any of the foregoing; and |
| our ability, and that of our assets and acquired properties and businesses to
grow. |
3
4
| acquire operating properties of specific property types and locations that we believe: |
| are undervalued, |
||
| present an opportunity to outperform the marketplace while providing recurring
current or potentially recurring cash flow, or |
||
| can provide superior returns through an infusion of capital and/or improved management;
|
| acquire portfolios or interests in portfolios at properties within characteristics similar to the above; |
|
| acquire loan assets using the same criteria for operating properties, as well as consideration of loan assets that may
present an opportunity for us to acquire through foreclosure an equity interest in the underlying real estate
collateral; |
|
| acquire securities issued by other REITs we believe are undervalued; and |
|
| divest investments as they mature in value to the point where we may be unlikely to achieve better than market returns
in order to redeploy capital to what we believe to be higher yielding opportunities. Consistent with our total return
approach to investing, it is not possible to predict when we will exit any particular investment. |
5
6
Loan | Stated Interest | Carrying | Maturity | Senior | ||||||||||||||||||||
Name | Position | Asset Type | Location | Rate (1) | Amount (2) | Par Value | Date (3) | Debt (4) | ||||||||||||||||
Loans Receivable |
||||||||||||||||||||||||
Beverly Hilton (10) |
B Note | Hotel | Beverly Hills, CA | Libor + 1.74% | $ | 7,899 | $ | 10,000 | 08/09/11 | $ | 166,000 | |||||||||||||
Metropolitan Tower |
B Note | Office | New York, NY | Libor + 1.51% | 10,312 | 15,000 | 11/01/11 | 81,559 | ||||||||||||||||
Westwood * |
Whole loan | Office | Phoeniz, AZ | 11.00% | 3,500 | 3,500 | 04/30/12 | | ||||||||||||||||
Siete Square |
B Participation | Office | Phoeniz, AZ | 10.37% | 2,488 | 2,500 | (5) | 06/09/12 | 3,000 | |||||||||||||||
Moffett Towers * |
B Note | Office | Sunnyvale, CA | Libor + 6.48% | 21,752 | 21,603 | 07/31/12 | 108,786 | ||||||||||||||||
160 Spear |
B Note | Office | San Francisco, CA | 9.75% | 6,674 | 15,000 | (5) | 06/09/13 | 35,000 | |||||||||||||||
160 Spear |
Mezzanine | Office | San Francisco, CA | 15.00% | 3,029 | 3,000 | 06/09/13 | 50,000 | ||||||||||||||||
Legacy Orchard * |
Secured | Corporate Loan | n/a | 15.00% | 9,750 | 9,750 | (5) | 10/31/14 | | |||||||||||||||
San Marbeya * |
Whole loan | Multi-Fam | Tempe, AZ | 5.88% | 26,966 | 30,930 | 01/01/15 | | ||||||||||||||||
Rockwell * |
Mezzanine | Industrial | Shirley, NY | 12.00% | 255 | 1,496 | 05/01/16 | 17,045 | ||||||||||||||||
500-512 7th Ave * |
B Note | Office | New York, NY | 7.19% | 9,954 | 11,638 | 07/11/16 | 253,673 | ||||||||||||||||
180 N. Michigan (6) |
Mezzanine | Office | Chicago, IL | 8.50% | 1,862 | 1,862 | 12/31/16 | 18,080 | ||||||||||||||||
Wellington Tower |
Mezzanine | Mixed use | New York, NY | 6.79% | 2,456 | 3,501 | 07/11/17 | 22,500 | ||||||||||||||||
CDH CDO LLC * |
Unsecured | n/a | n/a | 12.00% | 3,498 | 3,498 | 12/30/15 | | ||||||||||||||||
$ | 110,395 | |||||||||||||||||||||||
Loan Securities |
||||||||||||||||||||||||
WBCMT 2007 WHL8 |
CMBS | Hotel | Various | Libor + 1.75% | $ | 45 | 1,130 | 06/09/12 | 1,470,264 | |||||||||||||||
Metropolitan Tower* |
Rake Bonds | Office | New York, NY | (7) | 6,668 | 8,748 | 11/01/11 | 72,812 | ||||||||||||||||
West Olive |
Rake Bonds | Office | Burbank, CA | (8) | 4,606 | 6,364 | 02/28/13 | 15,666 | ||||||||||||||||
Concord CDO-1 * |
CDO Bonds | Various | Various | Libor + 1.20% | 662 | 662 | (5) | 12/25/46 | 288,025 | |||||||||||||||
$ | 11,981 | |||||||||||||||||||||||
Loans in Equity Investment (9) |
||||||||||||||||||||||||
Riverside Plaza* |
B Note | Retail | Riverside, CA | 12.00% | $ | 7,883 | 7,800 | 12/01/12 | 54,400 | |||||||||||||||
* | Loan Asset was acquired by the Trust in 2010. Additional loan asset details are described
below. |
|
(1) | Represents contractual interest rates without giving effect to loan discount and
accretion. The stated interest rate may be significantly different than the Trusts effective
interest rate on certain loan investments. |
|
(2) | Carrying amount includes all applicable accrued interest and accretion of discount. |
|
(3) | After giving effect to all contractual extensions. |
|
(4) | Debt which is senior to our loan. |
|
(5) | Par Value is presented at the borrowers discounted payoff option (DPO) amount. |
|
(6) | Represents a tenant improvement and capital expenditure loan collateralized by a
subordinate mortgage or the ownership interest in the property owner. |
|
(7) | Ranges from Libor + 1.15% to Libor + 1.35%. |
|
(8) | Ranges from Libor + 0.65% to Libor + 1.60%. |
|
(9) | Equity investment amounts are presented based on the Trusts 50% ownership percentage. |
|
(10) | Under contract to sell at par. Expected closing in July 2011. |
7
8
9
10
Cost | Fair Value | |||||||
REIT Preferred Shares |
$ | 15,757 | $ | 28,547 | ||||
REIT Common Shares |
3,590 | 4,485 | ||||||
$ | 19,347 | $ | 33,032 | |||||
11
| our Annual Reports on Form 10-K and all amendments thereto; |
| our quarterly reports on Form 10-Q and all amendments thereto; |
| our current reports on Form 8-K and all amendments thereto; |
| other SEC filings; |
| organizational documents; |
| Audit Committee Charter; |
| Compensation Committee Charter; |
| Conflicts Committee Charter; |
| Nominating and Corporate Governance Committee Charter; |
| Code of Business Conduct and Ethics; and |
| Corporate Governance Guidelines. |
12
| adverse changes in general and local economic conditions which affect the demand
for real estate assets; |
| competition from other properties; |
| increases in interest rates; |
| reduced availability of financing; |
| the cyclical nature of the real estate industry and possible oversupply of, or
reduced demand for, properties in the markets in which our investments are located; |
| the attractiveness of our properties to tenants and purchasers; |
| how well we manage our properties; |
| changes in market rental rates and our ability to rent space on favorable terms; |
| the financial condition of our tenants and borrowers including their becoming
insolvent and bankrupt; |
| the need to periodically renovate, repair and re-lease space and the costs thereof; |
| increases in maintenance, insurance and operating costs; |
| civil unrest, armed conflict or acts of terrorism against the United States; and |
| earthquakes floods and other natural disasters or acts of God that may result in
uninsured losses. |
13
| we may not be able to obtain financing for acquisitions on favorable terms; |
| acquired properties may fail to perform as expected; |
| the actual costs of repositioning or redeveloping acquired properties may be higher
than our estimates; |
| acquired properties may be located in new markets where we may have limited knowledge
and understanding of the local economy, an absence of business relationships in the area or
unfamiliarity with local governmental and permitting procedures; and |
| we may not be able to efficiently integrate acquired properties, particularly
portfolios of properties, into our organization and manage new properties in a way that
allows us to realize cost savings and synergies. |
14
| liabilities for clean-up of pre-existing disclosed or undisclosed environmental
contamination; |
| claims by tenants, vendors or other persons arising on account of actions or omissions
of the former owners of the properties; and |
| liabilities incurred in the ordinary course of business. |
15
16
| Depressing prices for our investments, operating properties and loan assets; |
| Decreasing interest income received or increases in interest expenses paid; |
| Reducing the number of potential purchasers for our assets; |
| Increasing risk of default on loan assets; |
| Limiting the ability to obtain new or replacement financing; and |
| Limiting the ability to sell additional debt or equity securities. |
17
18
19
20
21
Major | ($000s) | ($000s) | Debt | |||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Tenants | Cost Less | Ownership | Debt | Maturity | ||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Sq. Feet. | Depreciation | of Land | Balance | & Int Rate | ||||||||||||||||||||||||||
Retail |
||||||||||||||||||||||||||||||||||||
Atlanta, GA |
The Kroger Co. | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 61,000 | 100 | % | (2016/2026) | 61,000 | $ | 3,928 | Ground Lease | (1 | ) | (1 | ) | ||||||||||||||||||||||
Denton, TX |
Fitness Evolution | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 46,000 | 63 | % | (2012) | 29,000 | 2,250 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
Greensboro, NC |
The Kroger Co. | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 47,000 | 100 | % | (2017/2037) | 47,000 | 3,219 | Ground Lease | (1 | ) | (1 | ) | |||||||||||||||||||||||
Lousiville, KY |
The Kroger Co. | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 47,000 | 100 | % | (2015/2040) | 47,000 | 2,681 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
Memphis, TN |
The Kroger Co. | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 47,000 | 100 | % | (2015/2040) | 47,000 | 1,281 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
Seabrook TX |
The Kroger Co. | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 53,000 | 100 | % | (2015/2040) | 53,000 | 1,798 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
St. Louis, MO (2) |
2004 | 100 | % | 46,000 | 0 | % | Vacant | 46,000 | 1,487 | Fee | (1 | ) | (1 | ) | ||||||||||||||||||||||
Subtotal Retail |
347,000 | 16,644 | 19,002 | (1) | ||||||||||||||||||||||||||||||||
22
Major | ($000s) | ($000s) | ||||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Tenants | Cost Less | Ownership | Debt | Debt Maturity | ||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Sq. Feet. | Depreciation | of Land | Balance | & Int Rate | ||||||||||||||||||||||||||
Office |
||||||||||||||||||||||||||||||||||||
Amherst, NY (3) |
Ingram Micro Systems | 10/2013 | ||||||||||||||||||||||||||||||||||
2005 | 100 | % | 200,000 | 100 | % | (2013/2023) | 200,000 | $ | 17,083 | Fee | $ | 16,117 | 5.65 | % | ||||||||||||||||||||||
Andover, MA |
PAETEC Comm. | 03/2011 | ||||||||||||||||||||||||||||||||||
2005 | 100 | % | 93,000 | 100 | % | (2022/2037) | 93,000 | 7,448 | Fee | 6,135 | 6.60 | % | ||||||||||||||||||||||||
Chicago, IL |
The Gettys Group | 03/2016 | ||||||||||||||||||||||||||||||||||
(One East Erie / Marc Realty) |
2005 | 80 | % | 126,000 | 87 | % | (2012/2016) | 13,000 | 21,794 | Fee | 20,828 | 5.75 | % | |||||||||||||||||||||||
River North Surgery | ||||||||||||||||||||||||||||||||||||
(2015/ n/a) | 15,000 | |||||||||||||||||||||||||||||||||||
Chicago, IL |
Bally Total Fitness | 04/2012 | ||||||||||||||||||||||||||||||||||
(River City / Marc Realty ) |
2007 | 60 | % | 253,000 | 72 | % | (2013/2021) | 55,000 | 14,854 | Fee | 9,100 | 6.00 | % | |||||||||||||||||||||||
MCI d/b/a Verizon | ||||||||||||||||||||||||||||||||||||
(2019/2023) | 37,000 | |||||||||||||||||||||||||||||||||||
Houston, TX |
Spectra Energy | 04/2016 | ||||||||||||||||||||||||||||||||||
2004 | 8 | % | 614,000 | 100 | % | (2018/2028) | 614,000 | 60,042 | Fee | 60,351 | 6.34 | % | ||||||||||||||||||||||||
Indianapolis, IN |
No Tenants | 04/2015 | ||||||||||||||||||||||||||||||||||
(Circle Tower) |
1974 | 100 | % | 111,000 | 84 | % | Over 10% | | 4,732 | Fee | 4,245 | 5.82 | % | |||||||||||||||||||||||
Lisle, IL |
United Healthcare | 06/2016 | ||||||||||||||||||||||||||||||||||
2006 | 100 | % | 169,000 | 52 | % | (2014/ n/a) | 41,000 | 18,709 | Fee | 16,972 | 6.26 | % | ||||||||||||||||||||||||
Lisle, IL |
T Systems, Inc. | 06/2016 | ||||||||||||||||||||||||||||||||||
2006 | 100 | % | 67,000 | 85 | % | (2011) | 35,000 | 8,166 | Fee | 6,932 | 6.26 | % | ||||||||||||||||||||||||
ABM Janitorial | ||||||||||||||||||||||||||||||||||||
(2012/2014) | 11,000 | |||||||||||||||||||||||||||||||||||
Zenith Insurance | ||||||||||||||||||||||||||||||||||||
(2011) | 10,000 | |||||||||||||||||||||||||||||||||||
Lisle, IL |
Ryerson | 03/2017 | ||||||||||||||||||||||||||||||||||
(Marc Realty) |
2006 | 60 | % | 54,000 | 100 | % | (2018/2028) | 54,000 | 3,674 | Fee | 5,600 | 5.55 | % | |||||||||||||||||||||||
Orlando, FL |
Siemens Real Estate, Inc. | 07/2017 | ||||||||||||||||||||||||||||||||||
2004 | 100 | % | 256,000 | 100 | % | (2017/2042) | 256,000 | 14,643 | Ground Lease | 38,657 | 6.40 | % | ||||||||||||||||||||||||
Plantation, FL |
BellSouth | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 133,000 | 100 | % | (2020/2035) | 133,000 | 11,567 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
South Burlington, VT |
Fairpoint Comm. | 03/2011 | ||||||||||||||||||||||||||||||||||
2005 | 100 | % | 56,000 | 100 | % | (2014/2029) | 56,000 | 3,021 | Ground Lease | 2,629 | 6.60 | % | ||||||||||||||||||||||||
Phoenix, AZ (Deer Valley Professional Center) |
2010 | 96.5 | % | 82,000 | 61 | % | United Healthcare (2017/2027) | 42,000 | 8,126 | Fee | | n/a | ||||||||||||||||||||||||
Englewood, CO |
RGN-Denver LLC | |||||||||||||||||||||||||||||||||||
(Crossroads I) |
2010 | 100.0 | % | 118,000 | 55 | % | (2015/2025) | 17,000 | 7,427 | Fee | | n/a | ||||||||||||||||||||||||
Englewood, CO | Catholic Health Initiatives | |||||||||||||||||||||||||||||||||||
(Crossroads II) |
2010 | 100.0 | % | 118,000 | 58 | % | (2011) | 30,000 | 7,938 | Fee | | n/a | ||||||||||||||||||||||||
Subtotal Office |
2,450,000 | 209,224 | 187,566 | |||||||||||||||||||||||||||||||||
23
Units / | Major | ($000s) | ($000s) | |||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Tenants | Cost Less | Ownership | Debt | Debt Maturity | ||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Sq. Feet. | Depreciation | of Land | Balance | & Int Rate | ||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||
Residential |
||||||||||||||||||||||||||||||||||||
Meriden, CT |
02/2012 | |||||||||||||||||||||||||||||||||||
(Newbury Apts) |
2010 | 100 | % | 180 Units | 92 | % | n/a | n/a | 25,115 | Fee | $ | 23,875 | 5.83 | % | ||||||||||||||||||||||
Warehouse |
||||||||||||||||||||||||||||||||||||
Jacksonville, FL |
Football Fanatics | |||||||||||||||||||||||||||||||||||
2004 | 100 | % | 587,000 | 100 | % | (2015/2024) | 558,000 | 10,818 | Fee | (1 | ) | (1 | ) | |||||||||||||||||||||||
Mixed Use |
||||||||||||||||||||||||||||||||||||
Churchill, PA (4) |
2004 | 100 | % | 1,008,000 | 100 | % | Viacom, Inc. (2010) |
1,008,000 | 10,466 | Ground Lease | (1 | ) | (1 | ) | ||||||||||||||||||||||
Subtotal Other |
1,595,000 | 46,399 | 23,875 | |||||||||||||||||||||||||||||||||
Total Consolidated Properties | 4,392,000 | $ | 272,267 | $ | 230,443 | |||||||||||||||||||||||||||||||
(**) | Occupancy rates include all signed leases, including space undergoing tenant
improvements. |
|
(1) | Our retail properties and our properties located in Churchill, Pennsylvania, Plantation,
Florida, and Jacksonville, Florida collateralized $19,002 of mortgage debt at an interest rate of
LIBOR + 1.75% which matures in June 2011. |
|
(2) | On February 8, 2011 we entered into a contract to sell this property subject to the buyers due
to diligence. We anticipate that the sale of this property will be consumated during the second
quarter of 2011. |
|
(3) | The Amherst, New York office property represents two separate buildings. The ground underlying
the properties is leased to us by the local development authority pursuant to a ground lease which
requires no payment. Effective October 31, 2013, legal title to the ground will vest with us. |
|
(4) | The lease term with respect to our property located in Churchill, Pennsylvania expired on
December 31, 2010. We currently are in litigation with the former tenant, Viacom, related to the
condition of the property. |
24
($000s) | ||||||||||||||||||||||||||||||||||||
Major | Equity | ($000s) | ||||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Tenants | Investment | Ownership | Debt | Debt Maturity | ||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Sq. Feet. | Balance | of Land | Balance (1) | & Int Rate | ||||||||||||||||||||||||||
Marc Realty
Portfolio Equity
Investments |
||||||||||||||||||||||||||||||||||||
8 South Michigan, |
08/2011 | |||||||||||||||||||||||||||||||||||
Chicago, IL |
2005 | 50 | % | 174,000 | 94 | % | No tenants over 10% | | $ | 7,087 | Ground Lease | $ | 3,886 | 6.87 | % | |||||||||||||||||||||
11 East Adams, |
IL School of Health | 08/2011 | ||||||||||||||||||||||||||||||||||
Chicago, IL |
2005 | 49 | % | 161,000 | 78 | % | (2015/2020) | 28,700 | 3,223 | Fee | 9,999 | Libor + 2 | % | |||||||||||||||||||||||
29 East Madison, |
Computer Systems Institute | 05/2013 | ||||||||||||||||||||||||||||||||||
Chicago, IL |
2005 | 50 | % | 235,000 | 90 | % | (2020/2030) | 25,000 | 7,720 | Fee | 11,130 | 5.20 | % | |||||||||||||||||||||||
30 North Michigan, |
08/2014 | |||||||||||||||||||||||||||||||||||
Chicago, IL |
2005 | 50 | % | 221,000 | 91 | % | No tenants over 10% | | 12,080 | Fee | 13,097 | 5.99 | % | |||||||||||||||||||||||
223 West Jackson,
Chicago, IL |
06/2012 | |||||||||||||||||||||||||||||||||||
(Brooks Building) |
2005 | 50 | % | 168,000 | 59 | % | No tenants over 10% | | 7,452 | Fee | 7,794 | 6.92 | % | |||||||||||||||||||||||
4415 West Harrison,
Hillside, IL |
North American Medical Mgmt | 12/2015 | ||||||||||||||||||||||||||||||||||
(High Point) |
2005 | 50 | % | 192,000 | 67 | % | (2015/2020) | 20,400 | 6,275 | Fee | 4,610 | 5.62 | % | |||||||||||||||||||||||
2000-60 Algonquin,
Shaumburg, IL |
02/2013 | |||||||||||||||||||||||||||||||||||
(Salt Creek) |
2005 | 50 | % | 101,000 | 70 | % | No tenants over 10% | | 2,344 | Fee | (2 | ) | Libor + 2.75 | % | ||||||||||||||||||||||
1701 E. Woodfield, |
09/2015 | |||||||||||||||||||||||||||||||||||
Shaumburg, IL |
2005 | 50 | % | 175,000 | 87 | % | No tenants over 10% | | 4,221 | Fee | 5,755 | Libor + 3 | % (3) | |||||||||||||||||||||||
2720 River Rd, |
10/2012 | |||||||||||||||||||||||||||||||||||
Des Plains, IL |
2005 | 50 | % | 108,000 | 92 | % | No tenants over 10% | | 4,123 | Fee | 2,581 | 6.095 | % | |||||||||||||||||||||||
3701 Algonquin, |
ISACA | 02/2013 | ||||||||||||||||||||||||||||||||||
Rolling Meadows IL |
2005 | 50 | % | 193,000 | 82 | % | (2018/2024) | 29,600 | 2,931 | Fee | 10,373 | Libor + 2.75 | % | |||||||||||||||||||||||
Relational Funding | ||||||||||||||||||||||||||||||||||||
(2013/ n/a) | 27,400 | |||||||||||||||||||||||||||||||||||
2205-55 Enterprise, |
Consumer Portfolio | 02/2013 | ||||||||||||||||||||||||||||||||||
Westchester, IL |
2005 | 50 | % | 130,000 | 94 | % | (2014/2019) | 18,900 | 3,018 | Fee | (2 | ) | Libor + 2.75 | % | ||||||||||||||||||||||
900-910 Skokie,
Northbrook, IL |
MIT Financial Group | 02/2011 | (4) | |||||||||||||||||||||||||||||||||
(Ridgebrook) |
2005 | 50 | % | 119,000 | 78 | % | (2016/ n/a) | 12,600 | 1,676 | Fee | 5,405 | Libor + 2 | % | |||||||||||||||||||||||
Subtotal Marc Realty Portfolio |
1,977,000 | 62,150 | 86,236 | |||||||||||||||||||||||||||||||||
25
($000s) | ||||||||||||||||||||||||||||||||||||
Major | Equity | ($000s) | ||||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Tenants | Investment | Ownership | Debt | Debt Maturity | ||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Sq. Feet. | Balance | of Land | Balance (1) | & Int Rate | ||||||||||||||||||||||||||
Sealy Venture
Properties Equity
Investments |
||||||||||||||||||||||||||||||||||||
Atlanta, GA (5) |
Original Mattress | 01/2012 | ||||||||||||||||||||||||||||||||||
(Northwest Atlanta) |
2006 | 60 | % | 472,000 | 75 | % | (2020/2025) | 57,000 | $ | 2,479 | Fee | $ | 28,750 | 5.7 | % | |||||||||||||||||||||
Atlanta, GA (6) |
Alere Health | 11/2016 | ||||||||||||||||||||||||||||||||||
(Newmarket) |
2008 | 68 | % | 470,000 | 66 | % | (2011/ n/a) | 76,000 | 6,647 | Fee | 37,000 | 6.12 | % | |||||||||||||||||||||||
Nashville, TN (7) |
05/2012 | |||||||||||||||||||||||||||||||||||
(Airpark) |
2007 | 50 | % | 1,155,000 | 86 | % | No tenants over 10% | | 2,778 | Fee | 74,000 | 5.77 | % | |||||||||||||||||||||||
Subtotal Sealy Venture Properties |
2,097,000 | $ | 11,904 | $ | 139,750 | |||||||||||||||||||||||||||||||
Total Equity Investments |
4,074,000 | |||||||||||||||||||||||||||||||||||
(**) | Occupancy rates include all signed leases including space undergoing tenant improvements |
|
(1) | Debt balance shown represents 100% of the debt encumbering the properties. |
|
(2) | Both the 2000-60 Algonquin and 2205-55 Enterprise Road Marc Realty properties are cross
collateralized by a mortgage of $11,606 which is included in total debt balance. |
|
(3) | An interest rate swap agreement with a notional amount of $5,755 effectively converts the
interest rate to a fixed rate of 4.78%. |
|
(4) | In February 2011, the maturity date was extended to May 2011 and the venture is currently
negotiating with the lender to further extend the maturity date. |
|
(5) | Equity investment in Sealy Northwest Atlanta consists of 12 flex/office properties. |
|
(6) | Equity investment in Sealy Newmarket consists of six flex/office campus style properties |
|
(7) | Equity investment in Sealy Airpark consists of 13 light distribution and service center
properties. |
26
($000s) | ||||||||||||||||||||||||||||||||||||
Preferred | ||||||||||||||||||||||||||||||||||||
Equity | ($000s) | |||||||||||||||||||||||||||||||||||
Description and | Year | Trusts | Rentable | (**) | Major Tenants | Investment | Ownership | Debt | Debt Maturity | |||||||||||||||||||||||||||
Location | Acquired | Ownership | Square Feet | % Leased | (Lease /Options Exp) | Balance | of Land | Balance (1) | & Int Rate | |||||||||||||||||||||||||||
Office |
||||||||||||||||||||||||||||||||||||
180 North Michigan |
||||||||||||||||||||||||||||||||||||
Chicago, IL |
None over | 03/2011 | (2) | |||||||||||||||||||||||||||||||||
(Marc Realty) |
2008 | 70 | % | 229,000 | 89 | % | 10% | $ | 3,923 | Fee | 18,080 | Libor+1.5 | %(3) |
(1) | Debt balance shown represents 100% of the debt encumbering the properties. |
|
(2) | In February 2011, the venture elected to exercise the extension option, extending maturity to March 27, 2013. |
|
(3) | An interest rate swap agreement with a notional amount of $17,614 effectively converts the interest rate to
a fixed rate of 4.55%. |
Current Term | Lease Term Rents | |||||
Property Location | Expiration | Renewal Terms | Per Annum | |||
Atlanta, GA
|
9/30/2011 | Three 5 year | $30,000 plus 1/2 of 1% of sales greater than $27,805,800 (1) | |||
Churchill, PA
|
12/31/2015 | Five 5 year | $300,000 through current term and then fair market value | |||
Greensboro, NC
|
12/31/2012 | Three 5-year and fifteen 1-year | $71,178 increased by approximately $12,000 for each successive renewal period plus 1% of sales over $36,213,850 (1) | |||
Lafayette, LA (2)
|
4/30/2013 | Seven 5-year | $185,064 increased by 5% for each successive renewal term | |||
Orlando, FL
|
12/31/2017 | Five 5-year | $1 though the current term and then fair market value (1) | |||
South Burlington, VT
|
1/2/2015 | Three 5-year and one 10-year | None (1) |
(1) | The lease requires the tenant to perform all covenants under the ground lease including the
payment of ground rent. |
|
(2) | We have determined that the fair market value of the property is less than the required
ground rent payments and have stopped making any payments on the ground lease. We have
received notice that as a result of the failure to make such payments the ground lease is in
default. |
27
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
4 | 12,000 | $ | 313,000 | 11 | % | ||||||||||
2012 |
1 | 12,000 | 254,000 | 9 | % | |||||||||||
2013 |
4 | 11,000 | 387,000 | 14 | % | |||||||||||
2014 |
3 | 19,000 | 495,000 | 17 | % | |||||||||||
2015 and beyond |
10 | 49,000 | 1,417,000 | 49 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
2 | 2,000 | $ | 32,000 | 1 | % | ||||||||||
2012 |
2 | 13,000 | 314,000 | 10 | % | |||||||||||
2013 |
3 | 60,000 | 667,000 | 21 | % | |||||||||||
2014 |
1 | 6,000 | 121,000 | 4 | % | |||||||||||
2015 and beyond |
5 | 90,000 | 2,021,000 | 64 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
17 | 18,000 | $ | $225,000 | 17 | % | ||||||||||
2012 |
9 | 10,000 | 158,000 | 12 | % | |||||||||||
2013 |
7 | 21,000 | 298,000 | 22 | % | |||||||||||
2014 |
2 | 5,000 | 61,000 | 4 | % | |||||||||||
2015 and beyond |
11 | 37,000 | 618,000 | 45 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
2 | 5,000 | $ | 56,000 | 5 | % | ||||||||||
2012 |
2 | 8,000 | 77,000 | 7 | % | |||||||||||
2013 |
3 | 18,000 | 178,000 | 17 | % | |||||||||||
2014 |
4 | 51,000 | 755,000 | 70 | % | |||||||||||
2015 and beyond |
3 | 7,000 | 12,000 | 1 | % |
28
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
2 | 45,000 | $ | 673,000 | 80 | % | ||||||||||
2012 |
1 | 11,000 | 150,000 | 18 | % | |||||||||||
2013 |
1 | 1,000 | 15,000 | 2 | % | |||||||||||
2014 and beyond |
| | | |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
| | $ | | | |||||||||||
2012 |
| | | | ||||||||||||
2013 |
| | | | ||||||||||||
2014 |
| | | | ||||||||||||
2015 and beyond |
2 | 587,000 | 386,000 | 100 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
| | $ | | | |||||||||||
2012 |
| | | | ||||||||||||
2013 |
| | | | ||||||||||||
2014 |
1 | 2,000 | 50,000 | 31 | % | |||||||||||
2015 and beyond |
2 | 48,000 | 112,000 | 69 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
4 | 20,000 | $ | 361,000 | 34 | % | ||||||||||
2012 |
1 | 2,000 | 40,000 | 4 | % | |||||||||||
2013 |
1 | 10,000 | 200,000 | 19 | % | |||||||||||
2014 |
2 | 2,000 | 42,000 | 4 | % | |||||||||||
2015 and beyond |
3 | 31,000 | 423,000 | 39 | % |
29
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
3 | 44,000 | $ | 83,000 | 68 | % | ||||||||||
2012 |
2 | 6,000 | 14,000 | 11 | % | |||||||||||
2013 |
2 | 5,000 | 8,000 | 7 | % | |||||||||||
2014 |
| | | | ||||||||||||
2015 and beyond |
2 | 12,000 | 17,000 | 14 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
23 | 94,000 | $ | 1,041,000 | 37 | % | ||||||||||
2012 |
14 | 54,000 | 544,000 | 19 | % | |||||||||||
2013 |
13 | 68,000 | 529,000 | 19 | % | |||||||||||
2014 |
4 | 16,000 | 109,000 | 4 | % | |||||||||||
2015 and beyond |
11 | 121,000 | 576,000 | 21 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
14 | 118,000 | $ | 1,682,000 | 49 | % | ||||||||||
2012 |
3 | 18,000 | 238,000 | 7 | % | |||||||||||
2013 |
6 | 61,000 | 696,000 | 20 | % | |||||||||||
2014 |
| | | | ||||||||||||
2015 and beyond |
11 | 104,000 | 820,000 | 24 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
22 | 220,000 | $ | 1,913,000 | 24 | % | ||||||||||
2012 |
18 | 239,000 | 2,001,000 | 25 | % | |||||||||||
2013 |
18 | 85,000 | 747,000 | 9 | % | |||||||||||
2014 |
11 | 121,000 | 929,000 | 12 | % | |||||||||||
2015 and beyond |
17 | 297,000 | 2,447,000 | 30 | % |
30
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
19 | 24,000 | $ | 534,000 | 15 | % | ||||||||||
2012 |
15 | 16,000 | 355,000 | 10 | % | |||||||||||
2013 |
14 | 27,000 | 598,000 | 16 | % | |||||||||||
2014 |
8 | 20,000 | 378,000 | 10 | % | |||||||||||
2015 and beyond |
26 | 76,000 | 1,762,000 | 49 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
5 | 18,000 | $ | 323,000 | 10 | % | ||||||||||
2012 |
5 | 19,000 | 359,000 | 11 | % | |||||||||||
2013 |
5 | 8,000 | 156,000 | 5 | % | |||||||||||
2014 |
3 | 7,000 | 142,000 | 5 | % | |||||||||||
2015 and beyond |
12 | 74,000 | 2,163,000 | 69 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
15 | 25,000 | $ | 571,000 | 13 | % | ||||||||||
2012 |
32 | 50,000 | 1,428,000 | 32 | % | |||||||||||
2013 |
8 | 23,000 | 722,000 | 16 | % | |||||||||||
2014 |
5 | 23,000 | 193,000 | 4 | % | |||||||||||
2015 and beyond |
22 | 89,000 | 1,517,000 | 35 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
50 | 44,000 | $ | 1,149,000 | 21 | % | ||||||||||
2012 |
46 | 37,000 | 948,000 | 17 | % | |||||||||||
2013 |
24 | 14,000 | 345,000 | 6 | % | |||||||||||
2014 |
16 | 19,000 | 538,000 | 10 | % | |||||||||||
2015 and beyond |
50 | 85,000 | 2,464,000 | 46 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
5 | 8,000 | $ | 164,000 | 7 | % | ||||||||||
2012 |
3 | 3,000 | 59,000 | 3 | % | |||||||||||
2013 |
4 | 13,000 | 156,000 | 7 | % | |||||||||||
2014 |
6 | 16,000 | 414,000 | 18 | % | |||||||||||
2015 and beyond |
15 | 60,000 | 1,467,000 | 64 | % |
31
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
19 | 45,000 | $ | 765,000 | 36 | % | ||||||||||
2012 |
8 | 14,000 | 267,000 | 13 | % | |||||||||||
2013 |
6 | 20,000 | 246,000 | 12 | % | |||||||||||
2014 |
3 | 11,000 | 173,000 | 8 | % | |||||||||||
2015 and beyond |
5 | 35,000 | 680,000 | 31 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
21 | 24,000 | $ | 326,000 | 52 | % | ||||||||||
2012 |
4 | 7,000 | 76,000 | 12 | % | |||||||||||
2013 |
6 | 17,000 | 126,000 | 20 | % | |||||||||||
2014 |
2 | 4,000 | 29,000 | 5 | % | |||||||||||
2015 and beyond |
5 | 19,000 | 75,000 | 11 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
19 | 22,000 | $ | 454,000 | 16 | % | ||||||||||
2012 |
20 | 42,000 | 704,000 | 25 | % | |||||||||||
2013 |
19 | 32,000 | 715,000 | 26 | % | |||||||||||
2014 |
8 | 12,000 | 154,000 | 6 | % | |||||||||||
2015 and beyond |
9 | 39,000 | 739,000 | 27 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
20 | 26,000 | $ | 421,000 | 31 | % | ||||||||||
2012 |
17 | 24,000 | 375,000 | 27 | % | |||||||||||
2013 |
8 | 11,000 | 134,000 | 10 | % | |||||||||||
2014 |
7 | 17,000 | 272,000 | 20 | % | |||||||||||
2015 and beyond |
7 | 12,000 | 170,000 | 12 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
6 | 25,000 | $ | 435,000 | 16 | % | ||||||||||
2012 |
4 | 7,000 | 110,000 | 4 | % | |||||||||||
2013 |
7 | 41,000 | 756,000 | 27 | % | |||||||||||
2014 |
3 | 24,000 | 446,000 | 16 | % | |||||||||||
2015 and beyond |
6 | 59,000 | 1,061,000 | 37 | % |
32
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
4 | 13,000 | $ | 215,000 | 11 | % | ||||||||||
2012 |
6 | 16,000 | 261,000 | 13 | % | |||||||||||
2013 |
4 | 12,000 | 192,000 | 10 | % | |||||||||||
2014 |
5 | 36,000 | 612,000 | 31 | % | |||||||||||
2015 and beyond |
7 | 36,000 | 722,000 | 35 | % |
Number of | Aggregate by | 2010 Rental | % of Total | |||||||||||||
Tenants Whose | Ft. Covered by | Revenue for | Annualized | |||||||||||||
Leases Expire | Expiring Leases | Leases Expiring | Rental Revenue | |||||||||||||
2011 |
22 | 36,000 | $ | 621,000 | 42 | % | ||||||||||
2012 |
8 | 9,000 | 163,000 | 11 | % | |||||||||||
2013 |
10 | 16,000 | 305,000 | 20 | % | |||||||||||
2014 |
4 | 9,000 | 88,000 | 6 | % | |||||||||||
2015 and beyond |
9 | 23,000 | 316,000 | 21 | % |
33
High | Low | |||||||
Year Ended December 31, 2009: |
||||||||
First quarter |
$ | 12.30 | $ | 5.83 | ||||
Second quarter |
10.83 | 6.63 | ||||||
Third quarter |
10.15 | 8.44 | ||||||
Fourth quarter |
11.38 | 8.70 | ||||||
Year Ended December 31, 2010: |
||||||||
First quarter |
$ | 13.19 | $ | 10.59 | ||||
Second quarter |
14.30 | 10.10 | ||||||
Third quarter |
14.59 | 11.01 | ||||||
Fourth quarter |
13.84 | 11.80 |
Quarter Ended | 2010 | 2009 | ||||||
March 31 |
$ | 0.1625 | $ | 0.2500 | ||||
June 30 |
0.1625 | 0.2500 | ||||||
September 30 |
0.1625 | 0.2500 | ||||||
December 31 |
0.1625 | 0.1625 |
34
35
Period Ended | ||||||||||||||||||||||||
Index | 12/31/05 | 12/31/06 | 12/31/07 | 12/31/08 | 12/31/09 | 12/31/10 | ||||||||||||||||||
Winthrop Realty Trust |
100.00 | 126.31 | 104.89 | 46.78 | 51.90 | 64.30 | ||||||||||||||||||
MSCI US REIT (RMS) |
100.00 | 135.92 | 113.06 | 70.13 | 90.20 | 115.89 | ||||||||||||||||||
Peer Group Index |
100.00 | 122.90 | 88.59 | 64.72 | 68.95 | 80.45 |
36
Years Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Operating Results (in thousands, except per share data) |
||||||||||||||||||||
Revenue |
$ | 55,367 | $ | 47,357 | $ | 43,952 | $ | 49,608 | $ | 52,602 | ||||||||||
Income (loss) from continuing operations (1) |
$ | 18,480 | $ | (85,212 | ) | $ | (70,383 | ) | $ | 3,167 | $ | 42,445 | ||||||||
Income (loss) from discontinued operations (2) |
(2,003 | ) | 865 | 2,207 | (686 | ) | 491 | |||||||||||||
Net income (loss) |
16,477 | (84,347 | ) | (68,176 | ) | 2,481 | 42,936 | |||||||||||||
Preferred dividends |
(288 | ) | (147 | ) | | | | |||||||||||||
Net income (loss) applicable to Common Shares |
$ | 16,189 | $ | (84,494 | ) | $ | (68,176 | ) | $ | 2,481 | $ | 42,936 | ||||||||
Per Common Share |
||||||||||||||||||||
Income (loss) from continuing operations, basic |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | $ | 0.24 | $ | 3.62 | ||||||||
Income (loss) from discontinued operations, basic (2) |
(0.09 | ) | 0.05 | 0.15 | (0.05 | ) | 0.05 | |||||||||||||
Net income (loss) applicable to Common Shares, basic |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | $ | 0.19 | $ | 3.67 | ||||||||
Income (loss) from continuing operations per
Common Share, diluted |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | $ | 0.24 | $ | 3.54 | ||||||||
Income (loss) from discontinued operations, diluted |
(0.09 | ) | 0.05 | 0.15 | (0.05 | ) | 0.03 | |||||||||||||
Net income (loss) applicable to Common Shares, diluted |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | $ | 0.19 | $ | 3.57 | ||||||||
Dividends declared per Common Share |
$ | 0.65 | $ | 0.9125 | $ | 1.35 | $ | 2.15 | $ | 1.50 | ||||||||||
Balance Sheet Data: (in thousands) |
||||||||||||||||||||
Total Assets |
$ | 610,128 | $ | 493,192 | $ | 578,094 | $ | 745,447 | $ | 851,620 | ||||||||||
Total Debt (3) |
$ | 277,193 | $ | 238,067 | $ | 299,865 | $ | 335,191 | $ | 362,522 | ||||||||||
Non-Controlling redeemable preferred interest |
$ | 3,221 | $ | 12,169 | $ | | $ | | $ | | ||||||||||
Total Shareholders Equity |
$ | 295,771 | $ | 217,089 | $ | 248,250 | $ | 291,794 | $ | 323,586 | ||||||||||
(1) | Income (loss) from continuing operation, including per share data, are net of
non-controlling interests. |
|
(2) | The results of the Biloxi, Mississippi property were classified as
discontinued operations for 2006 through 2008. The results of Ventek were
classified as discontinued operations for 2006 through 2008. The results of the
Athens, Georgia; Lafayette, Louisiana; Knoxville, Tennessee and Sherman, Texas
properties were classified as discontinued operations for 2006 through 2010. The
results of the Creekwood, Apartment property were classified as discontinued
operations for 2007 through 2009. |
|
(3) | For comparability purposes, the Total Debt balances for 2007 and 2006 do not
include repurchase agreements of $75,175 and $111,911, respectively. These debt
securities were sold in January 2008. |
37
38
39
40
| the use of cash and cash equivalents; |
| rents and reimbursements received from our operating properties; |
| payments received under our loan assets; |
| interest and dividends received from investments in REIT securities; |
| cash distributions from joint ventures; |
| borrowings under our credit facility; |
| asset specific borrowings; and |
| the issuance of equity and debt securities. |
41
Net cash flow provided by operating activities |
$ | 19,612 | ||
Net cash flow used in investing activities |
(112,650 | ) | ||
Net cash flow provided by financing activities |
71,802 | |||
Decrease in cash and cash equivalents |
$ | (21,236 | ) | |
| $115,854,000 for the acquisition of eleven new loans receivable; |
| $2,949,000 for additional loan advances under existing facilities; |
| $3,498,000 for the issuance of a new loan receivable; |
| $10,871,000 for investment in our PSW NYC joint venture; |
| $7,800,000 for investment in our Riverside loan joint venture; |
| $6,961,000 for investment in our Marc Realty equity investments; |
| $2,113,000 to fund a tenant improvement escrow for the Deer Valley Medical Center; |
| $6,110,000 for purchases of REIT securities carried at fair value; |
| $5,276,000 for investment in capital and tenant improvements at our operating
properties; |
| $9,409,000 for the acquisition of the land underlying eight of our operating
properties; |
| $7,112,000 for the purchase of loan securities; and |
| $8,700,000 for the acquisition of a new operating property (Crossroads I). |
| $31,249,000 in proceeds from the sale of securities carried at fair value; |
| $9,876,000 in proceeds from the sale at par value of 50% interest in the 500-512
Seventh Avenue B Participation; |
| $3,000,000 in proceeds from the sale at par value of the Siete Square A Participation; |
| $6,540,000 received on full satisfaction of the Driver loan; |
| $8,200,000 received on full satisfaction of the 1701 E. Woodfield Road loan; |
| $9,625,000 return of capital distribution from our PSW NYC equity investment; and |
| $1,750,000 in proceeds from the sale of our Athens, Georgia property. |
| $66,774,000 in proceeds from the issuance of 5,750,000 Common Shares pursuant to our
public offering; and |
| $25,450,000 drawn down on our Revolving Line of Credit. |
| $14,573,000 for dividend payments on our Common Shares; and |
| $10,199,000 for mortgage loan repayments which included $3,537,000 of the principal
repayments related to the disposition of three operating properties. |
42
Less than | After | |||||||||||||||||||
Total | 1 Year | 2-3 Years | 4-5 Years | 5 Years | ||||||||||||||||
Mortgage loans payable (principal and interest) (1) |
$ | 284,083 | $ | 46,273 | $ | 80,104 | $ | 33,978 | $ | 123,728 | ||||||||||
Revolving line of credit (principal and interest) |
26,108 | 26,108 | | | | |||||||||||||||
Ground lease obligations |
1,932 | 485 | 847 | 600 | | |||||||||||||||
Advisors fee (2) |
6,838 | 6,838 | | | | |||||||||||||||
Series B-1 Preferred Shares (3) |
21,300 | | 21,300 | | | |||||||||||||||
Series C Preferred Shares (3) |
3,600 | | 3,600 | | | |||||||||||||||
$ | 343,861 | $ | 79,704 | $ | 105,851 | $ | 34,578 | $ | 123,728 | |||||||||||
(1) | Does not reflect financing activity subsequent to December 31, 2010. |
|
(2) | Advisors fee based upon the terms of the Advisory Agreement, effective January
1, 2011, with no effect given to any equity that may be issued after December 31, 2010.
No amounts have been included for subsequent renewal periods of the Advisory
Agreement. |
|
(3) | Series B-1 and
Series C Preferred Shares assumes mandatory redemption date in February 2012 with
no further conversions. |
43
| Operating Properties our wholly and partially owned operating properties and from July
1, 2009 our 12 Marc Realty equity investments; |
||
| Loan Assets our loans receivable, loan securities carried at fair value, and equity investments in loan assets; |
||
| REIT Securities our ownership of equity and debt securities in other real estate investment trusts; and |
||
| Corporate non-segment specific results which includes interest on cash reserves,
general and administrative expenses and other non-segment specific income and expense items. |
2010 | 2009 | |||||||
Operating properties |
$ | 373,142 | $ | 313,682 | ||||
Loan assets |
134,269 | 31,774 | ||||||
REIT securities |
33,032 | 52,597 | ||||||
Corporate |
||||||||
Cash and cash equivalents |
45,257 | 66,493 | ||||||
Restricted cash |
8,593 | 9,505 | ||||||
Accounts receivable and prepaids |
12,402 | 14,559 | ||||||
Deferred financing costs |
1,158 | 1,495 | ||||||
Discontinued Operations |
2,275 | 3,087 | ||||||
Total Assets |
$ | 610,128 | $ | 493,192 | ||||
44
2010 | 2009 | 2008 | ||||||||||
Operating properties (1) |
$ | 2,588 | $ | (8,345 | ) | $ | 2,666 | |||||
Loan assets (1) |
19,218 | (99,830 | ) | (67,770 | ) | |||||||
REIT securities |
8,273 | 27,002 | 1,346 | |||||||||
Corporate expenses |
(10,711 | ) | (3,022 | ) | (6,142 | ) | ||||||
Consolidated income (loss) from continuing operations |
$ | 19,368 | $ | (84,195 | ) | $ | (69,900 | ) | ||||
(1) | As of July 1, 2009, in conjunction with the restructuring of our preferred equity
investment in Marc Realty, our investments in the Marc Realty portfolio which were
previously included in the loan assets business segment are now classified as equity
investments and are included in the operating properties segment. |
2010 | 2009 | |||||||
Rents and reimbursements |
$ | 38,239 | $ | 40,021 | ||||
Operating expenses |
(8,674 | ) | (7,042 | ) | ||||
Real estate taxes |
(2,542 | ) | (2,542 | ) | ||||
Impairment loss on investments in real estate |
| (10,000 | ) | |||||
Equity in income of Marc Realty investments |
1,776 | 281 | ||||||
Impairment loss on Marc Realty equity investment |
| (2,500 | ) | |||||
Equity in loss of Sealy Northwest Atlanta |
(710 | ) | (457 | ) | ||||
Equity in loss of Sealy Airpark Nashville |
(1,107 | ) | (1,056 | ) | ||||
Equity in loss of Sealy Newmarket |
(1,193 | ) | (691 | ) | ||||
Operating income |
25,789 | 16,014 | ||||||
Depreciation and amortization expense |
(10,008 | ) | (10,585 | ) | ||||
Interest expense |
(13,193 | ) | (13,774 | ) | ||||
Net income (loss) |
$ | 2,588 | $ | (8,345 | ) | |||
| an increase of $1,495,000 in income from our 12 Marc Realty equity investments. We
received cash distributions of $4,147,000 from the Marc Realty equity investments during
the year ended December 31, 2010; |
| rents and reimbursements of $831,000 from our four 2010 property acquisitions; |
45
| an increase of $252,000 in rents and reimbursements at our Jacksonville, Florida
property as a result of the property being 100% occupied for the full year in 2010; |
| a $10,000,000 impairment loss recorded in 2009 on our Churchill, Pennsylvania property;
and |
| a $2,500,000 other-than-temporary impairment loss recorded in 2009 on our Marc Realty
equity investment in the property located at 1701 East Woodfield Rd, Schaumburg, Illinois; |
||
Partially offset by: |
| a $1,632,000 increase in operating expenses due primarily to increased cost of $491,000
at our River City property, a $205,000 increase in costs at our Andover, Massachusetts
property as a result of the lease in 2010 being a gross lease as compared to a net lease in
2009, a $956,000 increase in legal and professional fees related to tenant disputes
primarily in connection with the Churchill tenant litigation and $550,000 of operating
expenses at our four 2010 property acquisitions; |
| a decrease of $846,000 in rents and reimbursements from our two Lisle, Illinois
properties due to an approximate 20% decrease in average occupancy at one of the properties
and an approximate 10% decrease at the other property in 2010; |
| an $806,000 increase in losses from our Sealy equity investments due primarily to a
$502,000 increase in loss related to our Newmarket office complex in Atlanta, Georgia which
experienced a 12% loss in occupancy during 2010; |
| a decrease of $745,000 in rents and reimbursements at our Andover, Massachusetts
property due to the expiration of the lease in place at December 31, 2009. This space was
leased effective March 18, 2010; |
| a decrease of $571,000 in rents and reimbursements at our One East Erie property as a
result of an approximate 4% decrease in average occupancy |
| a decrease of $417,000 in rents and reimbursements at our River City property due to the
turnover of tenants; and |
| a decrease of $340,000 in rents and reimbursements pursuant to a restructuring as of
April 1, 2009 which provided for a reduction in rent in exchange for a ten-year extension
of the lease for our Plantation, Florida property. |
2010 | 2009 | |||||||
Interest and discount accretion income |
$ | 14,473 | $ | 3,442 | ||||
Equity in earnings of preferred equity investment in Marc Realty |
338 | 78 | ||||||
Impairment loss on preferred equity investments |
| (2,186 | ) | |||||
Impairment loss on Lex-Win Concord |
| (31,670 | ) | |||||
Equity in loss of Lex-Win Concord |
| (66,904 | ) | |||||
Equity in earnings of ROIC-Riverside |
473 | | ||||||
Equity in loss of PSW NYC |
(1,246 | ) | | |||||
Realized gain on loan securities carried at fair value |
469 | | ||||||
Unrealized gain on loan securities carried at fair value |
5,011 | | ||||||
Impairment loss on available for sale loan |
| (203 | ) | |||||
Provision for loss on loans receivable |
| (2,152 | ) | |||||
Operating income (loss) |
19,518 | (99,595 | ) | |||||
General and administrative expense |
(300 | ) | (235 | ) | ||||
Net income (loss) |
$ | 19,218 | $ | (99,830 | ) | |||
46
| a $5,011,000 unrealized gain on loan securities carried at fair value recognized in 2010
and a $469,000 realized gain on loan securities which were paid off at par at maturity in
December 2010; |
| a $2,152,000 provision for loss on loans receivable related to properties in our Marc
Realty portfolio recognized in 2009; |
| a $11,031,000 increase in interest income due primarily to $11,713,000 recognized on
loan assets acquired since June 2009 which was partially offset by a reduction of $661,000
of interest on our tenant improvement and capital expenditure loans related to the Marc
Realty investments which are now reported in the operating properties segment as of July 1,
2009; and |
| a reduction of impairments from the prior year resulting in a $2,446,000 increase in
earnings from our preferred equity investment in Marc Realty. |
| a $1,246,000 loss recognized on our 2010 investment in our PSW NYC venture. |
2010 | 2009 | |||||||
Dividends |
$ | 2,655 | $ | 3,894 | ||||
Gain on sale of securities carried at fair value |
558 | 5,416 | ||||||
Unrealized gain on securities carried at fair value |
5,060 | 17,862 | ||||||
Equity in loss of Lex-Win Acquisition, LLC |
| (95 | ) | |||||
Operating income |
8,273 | 27,077 | ||||||
Interest expense |
| (75 | ) | |||||
Net income |
$ | 8,273 | $ | 27,002 | ||||
| a $12,802,000 decrease in unrealized gain on securities carried at fair value; |
| a $1,239,000 decrease in interest and dividend income primarily as the result of the
sale of various securities; and |
| a $4,858,000 decrease in realized gain on the sale of securities carried at fair value. |
47
2010 | 2009 | |||||||
Interest income |
$ | 139 | $ | 172 | ||||
General and administrative |
(8,534 | ) | (7,068 | ) | ||||
Interest expense |
(2,182 | ) | (2,815 | ) | ||||
Gain on extinguishment of debt |
| 6,846 | ||||||
State and local taxes |
(134 | ) | (157 | ) | ||||
Operating loss |
$ | (10,711 | ) | $ | (3,022 | ) | ||
| a $5,681,000 gain on extinguishment of debt recognized in 2009 resulting from our 2009
purchase of 1,017,105 Series B-1 Preferred Shares at a discount to their liquidation value; |
| a $1,165,000 gain on extinguishment of debt recognized in 2009 resulting from the
conversion of 544,000 Series B-1 Preferred Shared to Series C Preferred Shares; and |
| A $1,466,000 increase in general and administrative expense due primarily to an increase
in the base management fee paid to our advisor of $2,118,000 partially offset by a
reduction in professional fees of $642,000. |
||
Partially offset by: |
| a $633,000 decrease in corporate interest expense due primarily to lower aggregate
payments in 2010 of $897,000 on our Series B-1 Preferred Shares as a result of fewer Series
B-1 Preferred Shares outstanding during 2010 offset by an increase in interest expense of
$264,000 related to our KeyBank line of credit. |
2009 | 2008 | |||||||
Rents and reimbursements |
$ | 40,021 | $ | 41,504 | ||||
Operating expenses |
(7,042 | ) | (6,767 | ) | ||||
Real estate taxes |
(2,542 | ) | (2,428 | ) | ||||
Impairment loss on investments in real estate |
(10,000 | ) | (2,100 | ) | ||||
Equity in income of Marc Realty investments |
281 | | ||||||
Impairment loss on Marc Realty equity investment |
(2,500 | ) | | |||||
Equity in loss of Sealy Northwest Atlanta |
(457 | ) | (409 | ) | ||||
Equity in loss of Sealy Airpark Nashville |
(1,056 | ) | (1,023 | ) | ||||
Equity in loss of Sealy Newmarket |
(691 | ) | (250 | ) | ||||
Operating income |
16,014 | 28,527 | ||||||
Depreciation expense |
(10,585 | ) | (11,572 | ) | ||||
Interest expense |
(13,774 | ) | (14,289 | ) | ||||
Net income (loss) |
$ | (8,345 | ) | $ | 2,666 | |||
48
| a $10,000,000 impairment loss recorded in 2009 as compared to an impairment loss of
$2,100,000 recognized in 2008; |
| a $2,500,000 other-than-temporary impairment loss on our Marc Realty equity investment
in the property located at 1701 East Woodfield Rd, Schaumburg, Illinois; |
| a decrease of $1,021,000 in rents and reimbursements from our net lease portfolio due to
the reduced rent pursuant to the restructuring and 10-year extension of the lease for our
Plantation, Florida property as of January 1, 2009; |
| a decrease of $686,000 in rents and reimbursements at our Jacksonville, Florida property
due to the loss of two tenants who occupied approximately 80% of the property; |
| a decrease of $529,000 in rents and reimbursements from our Lisle, Illinois properties
due to an approximate 12% decrease in average occupancy at one of the properties in 2009; |
| a $275,000 increase in operating expenses due primarily to increased cost of $145,000 at
our One East Erie property, a $380,000 bad debt reserve at our Burlington property as a
result of a tenant bankruptcy and a $122,000 increase in legal and professional fees
related to tenant disputes which were offset by a $290,000 decrease in costs at our River
City property; and |
| a $522,000 increase in losses from our Sealy equity investments due primarily to a
$441,000 increase in loss related to our Newmarket office complex in Atlanta, Georgia which
we held for 12 months in 2009. Losses from the Sealy portfolio are primarily the result of
non-cash depreciation and amortization expenses. We received cash distributions of
$1,195,000 from the Sealy equity investments for the year ended December 31, 2009. |
| income of $281,000 in 2009 representing our share of operations from our 12 Marc Realty
equity investments since July 1, 2009. We received cash distributions of $1,089,000 from
the Marc Realty equity investments during the year ended December 31, 2009; |
| an increase of $194,000 in rents and reimbursements at our One East Erie property as a
result of a $412,000 increase in rental revenue due to an approximate 1% increase in
average occupancy which was partially offset by a $218,000 decline in revenue from the
parking facility in 2009; and |
| an increase of $577,000 in rents and reimbursements at our River City property due to an
approximate 6% increase in average occupancy in 2009. |
2009 | 2008 | |||||||
Interest income |
$ | 3,442 | $ | 1,532 | ||||
Equity in earnings of preferred equity investment of Marc Realty |
78 | 5,868 | ||||||
Impairment loss on preferred equity investments |
(2,186 | ) | (7,513 | ) | ||||
Impairment loss on Lex-Win Concord |
(31,670 | ) | (36,543 | ) | ||||
Equity in loss of Lex-Win Concord |
(66,904 | ) | (30,207 | ) | ||||
Gain on sale of mortgage backed securities |
| 454 | ||||||
Gain on sale of other assets |
| 24 | ||||||
Impairment loss on available for sale loan |
(203 | ) | | |||||
Provision for loss on loan receivable |
(2,152 | ) | (1,179 | ) | ||||
Operating loss |
(99,595 | ) | (67,564 | ) | ||||
General and administrative expense |
(235 | ) | | |||||
Interest expense |
| (206 | ) | |||||
Net loss |
$ | (99,830 | ) | $ | (67,770 | ) | ||
49
| a $36,697,000 increase in equity in loss from Lex-Win Concord due primarily to our
allocable share of the increased operating loss from Concord for the year ended December
31, 2009 compared to the year ended December 31, 2008. In addition, we recorded a
$31,670,000 other-than-temporary impairment loss in 2009 to reduce our equity investment in
Lex-Win Concord to zero. In 2008, we recorded a $36,543,000 other-than-temporary
impairment loss. |
| a $5,790,000 decrease in earnings from our preferred equity investment primarily as a
result of the restructuring of the Marc Realty portfolio. Items that affected the decrease
included a $2,664,000 loss from the transfer of our interest in three of the properties in
the Marc Realty portfolio in May 2009, a $2,624,000 decrease in interest earnings and a
$511,000 decrease in gains on sale of real estate; and |
| a $973,000 increase in provision for loss on loans receivable related to properties in
our Marc Realty portfolio; |
||
Partially offset by: |
| a $1,910,000 increase in interest income due primarily to $2,675,000 recognized on loan
assets acquired in 2009 which was partially offset by a reduction of $522,000 of interest
on our tenant improvement and capital expenditure loans related to the Marc Realty
investments which are now reported in the operating properties segment as of July 1, 2009;
and |
| a $5,327,000 decrease in impairment loss on preferred equity investments. We recognized
$2,186,000 of other-than-temporary impairments on four of our Marc Realty preferred equity
investments during the year ended December 31, 2009 compared with a $7,513,000
other-than-temporary impairment recognized on four Marc Realty preferred equity investments
during the same period in 2008. |
2009 | 2008 | |||||||
Dividends |
$ | 3,894 | $ | 916 | ||||
Gain on sale of securities carried at fair value |
5,416 | | ||||||
Gain on sale of available for sale securities |
| 1,580 | ||||||
Impairment loss on available for sale securities |
| (207 | ) | |||||
Unrealized gain on securities carried at fair value |
17,862 | 24 | ||||||
Equity in loss of Lex-Win Acquisition, LLC |
(95 | ) | (878 | ) | ||||
Operating income |
27,077 | 1,435 | ||||||
Interest expense |
(75 | ) | (89 | ) | ||||
Net income |
$ | 27,002 | $ | 1,346 | ||||
| a $2,978,000 increase due primarily to interest and dividends as the result of the
increased investment in REIT securities during the year ended December 31, 2009; |
| a $17,862,000 unrealized gain on securities carried at fair value recognized in 2009;
and |
| a $3,836,000 increase in gain on sale of securities. |
50
2009 | 2008 | |||||||
Interest income |
$ | 172 | $ | 1,670 | ||||
General and administrative |
(7,068 | ) | (6,887 | ) | ||||
Interest expense |
(2,815 | ) | (7,379 | ) | ||||
Gain on extinguishment of debt |
6,846 | 6,284 | ||||||
State and local taxes |
(157 | ) | (329 | ) | ||||
Other |
| 499 | ||||||
Operating loss |
$ | (3,022 | ) | $ | (6,142 | ) | ||
| a $4,564,000 decrease in corporate interest expense due primarily to lower aggregate
payments in 2009 of $3,470,000 on our Series B-1 Preferred Shares as a result of fewer
Series B-1 Preferred Shares outstanding during 2009 and a reduction of interest expense of
$1,102,000 related to our KeyBank line of credit; |
| a $1,498,000 decrease in corporate interest income earned on our cash and cash
equivalents due primarily to lower yields on U.S. Treasury securities and other depository
accounts during 2009 versus 2008; and |
| state income taxes decreased by $172,000 to $157,000 for the year ended December 31,
2009 from $329,000 for the year ended December 31, 2008 due primarily to our anticipated
lower taxable income for state purposes, after deductions for dividends paid and after the
utilization of net operating loss carryforwards, where applicable. |
51
52
53
| Effective June 30, 2010, we entered into an interest rate swap agreement, with a notional
amount of $20,000,000 and will expire June 30, 2011 which effectively converts the interest
rate on that portion of principal from a floating rate of 1.75% to a fixed rate of 2.675%. |
Change in LIBOR(2) | ||||||||||||||||
-0.26% | 1% | 2% | 3% | |||||||||||||
Change in consolidated interest expense |
$ | (66 | ) | $ | 255 | $ | 509 | $ | 764 | |||||||
Pro-rata share of change in interest expense
of debt on non-consolidated entities (1) |
(20 | ) | 77 | 237 | 423 | |||||||||||
(Increase) decrease in net income |
$ | (86 | ) | $ | 332 | $ | 746 | $ | 1,187 | |||||||
(1) | Represents our pro-rata share of a change in interest expense in our Marc Realty
equity investment. The amount does not reflect our equity investment in Concord which
has been written down to zero. |
|
(2) | The one month LIBOR rate at December 31, 2010 was 0.26%. |
54
Page | ||||
56 | ||||
57 | ||||
58 | ||||
59 | ||||
61 | ||||
63 | ||||
55
56
December 31, | ||||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Investments in real estate, at cost |
||||||||
Land |
$ | 37,142 | $ | 20,659 | ||||
Buildings and improvements |
271,357 | 228,419 | ||||||
308,499 | 249,078 | |||||||
Less: accumulated depreciation |
(36,232 | ) | (31,269 | ) | ||||
Investments in real estate, net |
272,267 | 217,809 | ||||||
Cash and cash equivalents |
45,257 | 66,493 | ||||||
Restricted cash held in escrows |
8,593 | 9,505 | ||||||
Loans receivable, net |
110,395 | 26,101 | ||||||
Accounts receivable, net of allowances of $262 and $565, respectively |
12,402 | 14,559 | ||||||
Securities carried at fair value |
33,032 | 52,394 | ||||||
Loan securities carried at fair value |
11,981 | 1,661 | ||||||
Available for sale securities, net |
| 203 | ||||||
Preferred equity investment |
4,010 | 4,012 | ||||||
Equity investments |
81,937 | 73,207 | ||||||
Lease intangibles, net |
26,821 | 22,666 | ||||||
Deferred financing costs, net |
1,158 | 1,495 | ||||||
Assets held for sale |
2,275 | 3,087 | ||||||
TOTAL ASSETS |
$ | 610,128 | $ | 493,192 | ||||
LIABILITIES |
||||||||
Mortgage loans payable |
$ | 230,443 | $ | 216,767 | ||||
Series B-1 Cumulative Convertible Redeemable Preferred Shares,
$25 per share liquidation preference; 852,000 shares authorized
and outstanding at December 31, 2010 and December 31, 2009 |
21,300 | 21,300 | ||||||
Revolving line of credit |
25,450 | | ||||||
Accounts payable and accrued liabilities |
12,557 | 7,401 | ||||||
Dividends payable |
4,431 | 3,458 | ||||||
Deferred income |
150 | 48 | ||||||
Below market lease intangibles, net |
2,696 | 2,849 | ||||||
Liabilites of held for sale assets |
33 | | ||||||
TOTAL LIABILITIES |
297,060 | 251,823 | ||||||
COMMITMENTS AND CONTINGENCIES |
||||||||
NON-CONTROLLING REDEEMABLE PREFERRED INTEREST |
||||||||
Series C Cumulative Convertible Redeemable Preferred Shares,
$25 per share liquidation preference, 144,000 and 544,000 shares
authorized and outstanding at December 31, 2010 and
December 31, 2009, respectively |
3,221 | 12,169 | ||||||
Total non-controlling redeemable preferred interest |
3,221 | 12,169 | ||||||
EQUITY |
||||||||
Winthrop Realty Trust Shareholders Equity: |
||||||||
Common Shares, $1 par, unlimited shares authorized; 27,030,186 and
20,375,483 issued and outstanding at December 31, 2010 and
December 31, 2009, respectively |
27,030 | 20,375 | ||||||
Additional paid-in capital |
569,586 | 498,118 | ||||||
Accumulated distributions in excess of net income |
(300,782 | ) | (301,317 | ) | ||||
Accumulated other comprehensive loss |
(63 | ) | (87 | ) | ||||
Total Winthrop Realty Trust Shareholders Equity |
295,771 | 217,089 | ||||||
Non-controlling interests |
14,076 | 12,111 | ||||||
Total Equity |
309,847 | 229,200 | ||||||
TOTAL LIABILITIES AND EQUITY |
$ | 610,128 | $ | 493,192 | ||||
57
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Revenue |
||||||||||||
Rents and reimbursements |
$ | 38,239 | $ | 40,021 | $ | 41,504 | ||||||
Interest, dividends and discount accretion |
17,128 | 7,336 | 2,448 | |||||||||
55,367 | 47,357 | 43,952 | ||||||||||
Expenses |
||||||||||||
Property operating |
8,674 | 7,042 | 6,767 | |||||||||
Real estate taxes |
2,542 | 2,542 | 2,428 | |||||||||
Depreciation and amortization |
10,008 | 10,585 | 11,572 | |||||||||
Interest |
15,375 | 16,664 | 21,963 | |||||||||
Impairment loss on investment in real estate |
| 10,000 | 2,100 | |||||||||
Impairment loss on available for sale securities |
| | 207 | |||||||||
Provision for loss on loans receivable |
| 2,152 | 1,179 | |||||||||
General and administrative |
8,834 | 7,303 | 6,887 | |||||||||
State and local taxes |
134 | 157 | 329 | |||||||||
45,567 | 56,445 | 53,432 | ||||||||||
Other income (loss) |
||||||||||||
Earnings (loss) from preferred equity investments |
338 | (2,108 | ) | (1,645 | ) | |||||||
Equity in loss of equity investments |
(2,007 | ) | (103,092 | ) | (69,310 | ) | ||||||
Gain on sale of available for sale securities |
| | 1,580 | |||||||||
Gain on sale of mortgage-backed securities |
| | 454 | |||||||||
Gain on sale of other assets |
| | 24 | |||||||||
Realized gain on sale of securities carried at fair value |
558 | 5,416 | | |||||||||
Unrealized gain on securities carried at fair value |
5,060 | 17,862 | 24 | |||||||||
Impairment loss on real estate loan available for sale |
| (203 | ) | | ||||||||
Gain on extinguishment of debt |
| 6,846 | 6,284 | |||||||||
Realized gain on loan securities carried at fair value |
469 | | | |||||||||
Unrealized gain on loan securities carried at fair value |
5,011 | | | |||||||||
Interest income |
139 | 172 | 1,670 | |||||||||
Other income |
| | 499 | |||||||||
9,568 | (75,107 | ) | (60,420 | ) | ||||||||
Income (loss) from continuing operations |
19,368 | (84,195 | ) | (69,900 | ) | |||||||
Discontinued operations |
||||||||||||
Income (loss) from discontinued operations |
(2,003 | ) | 865 | 2,207 | ||||||||
Consolidated net income (loss) |
17,365 | (83,330 | ) | (67,693 | ) | |||||||
Income attributable to non-controlling interest |
(888 | ) | (1,017 | ) | (483 | ) | ||||||
Net income (loss) attributable to
Winthrop Realty Trust |
16,477 | (84,347 | ) | (68,176 | ) | |||||||
Income attributable to non-controlling redeemable
preferred interest |
(288 | ) | (147 | ) | | |||||||
Net income (loss) attributable to Common Shares |
$ | 16,189 | $ | (84,494 | ) | $ | (68,176 | ) | ||||
Comprehensive income (loss) |
||||||||||||
Consolidated net income (loss) |
$ | 17,365 | $ | (83,330 | ) | $ | (67,693 | ) | ||||
Change in unrealized gain on mortgage-backed securities |
| | 190 | |||||||||
Change in unrealized gain on available for sale securities |
2 | 19 | 1,662 | |||||||||
Change in unrealized gain (loss) on interest rate derivative |
22 | 543 | (743 | ) | ||||||||
Change in unrealized gain (loss) from equity investments |
| 26,174 | (6,137 | ) | ||||||||
Less reclassification adjustment included in net income |
| | (2,058 | ) | ||||||||
Comprehensive income (loss) |
$ | 17,389 | $ | (56,594 | ) | $ | (74,779 | ) | ||||
Per Common Share data Basic |
||||||||||||
Income (loss) from continuing operations |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | ||||
Income (loss) from discontinued operations |
(0.09 | ) | 0.05 | 0.15 | ||||||||
Net income (loss) attributable to Winthrop Realty Trust |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | ||||
Per Common Share data Diluted |
||||||||||||
Income (loss) from continuing operations |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | ||||
Income (loss) from discontinued operations |
(0.09 | ) | 0.05 | 0.15 | ||||||||
Net income (loss) attributable to Winthrop Realty Trust |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | ||||
Basic Weighted-Average Common Shares |
22,566 | 16,277 | 14,866 | |||||||||
Diluted Weighted-Average Common Shares |
22,568 | 16,277 | 14,866 | |||||||||
58
Accumulated | Accumulated | |||||||||||||||||||||||||||
Common Shares | Additional | Distributions | Other | Non- | ||||||||||||||||||||||||
of Beneficial Interest | Paid-In | in Excess of | Comprehensive | Controlling | ||||||||||||||||||||||||
Shares | Amount | Capital | Net Income | Income | Interests | Total | ||||||||||||||||||||||
Balance, December 31, 2007 |
13,258 | $ | 66,292 | $ | 358,145 | $ | (124,553 | ) | $ | (8,090 | ) | $ | 9,978 | $ | 301,772 | |||||||||||||
Net loss attributable to Winthrop Realty Trust |
| | | (68,176 | ) | | | (68,176 | ) | |||||||||||||||||||
Net income attributable to non-controlling interests |
| | | | | 483 | 483 | |||||||||||||||||||||
Distributions to non-controlling interests |
| | | | | (103 | ) | (103 | ) | |||||||||||||||||||
Contributions from non-controlling interests |
| | | | | 600 | 600 | |||||||||||||||||||||
Dividends paid or accrued on Common
Shares of beneficial interest
($1.35 per share) |
| | | (20,555 | ) | | | (20,555 | ) | |||||||||||||||||||
Change in unrealized loss on available for
sale securities, net of reclassification
adjustments for amounts included
in net income |
| | | | 58 | | 58 | |||||||||||||||||||||
Change in unrealized loss on mortgage
backed securities held for sale |
| | | | (264 | ) | | (264 | ) | |||||||||||||||||||
Change in unrealized gain on interest rate
derivatives |
| | | | (743 | ) | | (743 | ) | |||||||||||||||||||
Change in unrealized loss from
equity investments |
| | | | (6,137 | ) | | (6,137 | ) | |||||||||||||||||||
Effect of the Reverse Split |
| (63,298 | ) | 63,298 | | | | | ||||||||||||||||||||
Partial shares retired due to Reverse Split |
(1 | ) | (5 | ) | (5 | ) | | | | (10 | ) | |||||||||||||||||
Purchase and retirement of Common Shares |
(70 | ) | (70 | ) | (860 | ) | | | | (930 | ) | |||||||||||||||||
Conversion of Series B-1 Preferred
Shares to Common Shares |
548 | 2,742 | 9,190 | | | | 11,932 | |||||||||||||||||||||
Issuance of Common Shares through
rights offering |
1,769 | 8,845 | 28,029 | | | | 36,874 | |||||||||||||||||||||
Stock issued pursuant to dividend
reinvestment plan |
250 | 1,248 | 3,159 | | | | 4,407 | |||||||||||||||||||||
Balance, December 31, 2008 |
15,754 | 15,754 | 460,956 | (213,284 | ) | (15,176 | ) | 10,958 | 259,208 | |||||||||||||||||||
Cumulative effect, change in accounting principle |
| | | 11,647 | (11,647 | ) | | | ||||||||||||||||||||
Net loss attributable to Winthrop Realty Trust |
| | | (84,347 | ) | | | (84,347 | ) | |||||||||||||||||||
Net income attributable to non-controlling interests |
| | | | | 1,017 | 1,017 | |||||||||||||||||||||
Distributions to non-controlling interests |
| | | | | (843 | ) | (843 | ) | |||||||||||||||||||
Contributions from non-controlling interests |
| | | | | 979 | 979 | |||||||||||||||||||||
Dividends paid or accrued on Common
Shares of beneficial interest
($0.9125 per share) |
| | | (15,186 | ) | | | (15,186 | ) | |||||||||||||||||||
Dividends paid or accrued on Series C Preferred
Shares ($0.406 per share) |
| | | (147 | ) | | | (147 | ) | |||||||||||||||||||
Change in unrealized loss on available for
sale securities, net of reclassification
adjustments for amounts included
in net income |
| | | | 19 | | 19 | |||||||||||||||||||||
Change in unrealized gain on interest rate
derivatives |
| | | | 543 | | 543 | |||||||||||||||||||||
Change in unrealized loss from
equity investments |
| | | | 26,174 | | 26,174 | |||||||||||||||||||||
Issuance of Common Shares through
rights offering |
4,451 | 4,451 | 35,717 | | | | 40,168 | |||||||||||||||||||||
Stock issued pursuant to dividend
reinvestment plan |
170 | 170 | 1,445 | | | | 1,615 | |||||||||||||||||||||
Balance, December 31, 2009 |
20,375 | 20,375 | 498,118 | (301,317 | ) | (87 | ) | 12,111 | 229,200 | |||||||||||||||||||
59
Accumulated | Accumulated | |||||||||||||||||||||||||||
Common Shares | Additional | Distributions | Other | Non- | ||||||||||||||||||||||||
of Beneficial Interest | Paid-In | in Excess of | Comprehensive | Controlling | ||||||||||||||||||||||||
Shares | Amount | Capital | Net Income | Income | Interests | Total | ||||||||||||||||||||||
Balance, December 31, 2009 |
20,375 | $ | 20,375 | $ | 498,118 | $ | (301,317 | ) | $ | (87 | ) | $ | 12,111 | $ | 229,200 | |||||||||||||
Net income attributable to Winthrop Realty Trust |
| | | 16,477 | | | 16,477 | |||||||||||||||||||||
Net income attributable to non-controlling interests |
| | | | | 888 | 888 | |||||||||||||||||||||
Distributions to non-controlling interests |
| | | | | (354 | ) | (354 | ) | |||||||||||||||||||
Contributions from non-controlling interests |
| | | | | 1,431 | 1,431 | |||||||||||||||||||||
Dividends paid or accrued on Common
Shares of beneficial interest
($0.65 per share) |
| | | (15,654 | ) | | | (15,654 | ) | |||||||||||||||||||
Dividends paid or accrued on Series C Preferred
Shares ($0.406 per share) |
| | | (288 | ) | | | (288 | ) | |||||||||||||||||||
Change in unrealized loss on available for
sale securities, net of reclassification
adjustments for amounts included
in net income |
| | | | 2 | | 2 | |||||||||||||||||||||
Change in unrealized gain on interest rate
derivatives |
| | | | 22 | | 22 | |||||||||||||||||||||
Conversion of Series C Preferred Shares
to Common Shares |
714 | 714 | 8,234 | | | | 8,948 | |||||||||||||||||||||
Net proceeds from Common Shares offering |
5,750 | 5,750 | 61,024 | | | | 66,774 | |||||||||||||||||||||
Stock issued pursuant to dividend
reinvestment plan |
191 | 191 | 2,210 | | | | 2,401 | |||||||||||||||||||||
Balance, December 31, 2010 |
27,030 | $ | 27,030 | $ | 569,586 | $ | (300,782 | ) | $ | (63 | ) | $ | 14,076 | $ | 309,847 | |||||||||||||
60
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities |
||||||||||||
Net income (loss) |
$ | 17,365 | $ | (83,330 | ) | $ | (67,693 | ) | ||||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |
||||||||||||
Depreciation and amortization (including amortization
of deferred financing costs) |
6,988 | 7,504 | 8,072 | |||||||||
Amortization of lease intangibles |
3,033 | 4,771 | 5,507 | |||||||||
Straight-lining of rental income |
212 | (1,280 | ) | (1,701 | ) | |||||||
Loan discount accretion |
(8,782 | ) | (1,021 | ) | | |||||||
(Earnings) loss of preferred equity investments |
(338 | ) | 2,758 | 2,805 | ||||||||
Distributions of income from preferred equity investments |
340 | 2,373 | 4,804 | |||||||||
Loss of equity investments |
2,007 | 103,092 | 69,310 | |||||||||
Distributions of income from equity investments |
5,270 | 2,784 | 6,878 | |||||||||
Restricted cash held in escrows |
1,167 | (1,824 | ) | (318 | ) | |||||||
Gain on sale of securities carried at fair value |
(558 | ) | (5,416 | ) | | |||||||
Unrealized gain on securities carried at fair value |
(5,060 | ) | (17,862 | ) | (24 | ) | ||||||
Gain on sale of available for sale securities |
| | (1,580 | ) | ||||||||
Gain on sale of mortgage backed securities held for sale |
| | (454 | ) | ||||||||
Gain on sale of investments in real estate |
| | (1,807 | ) | ||||||||
Gain on loan securities carried at fair value |
(469 | ) | | | ||||||||
Unrealized gain on loan securities carried at fair value |
(5,011 | ) | | | ||||||||
Impairment loss on real estate loan available for sale |
| 203 | | |||||||||
Impairment loss on investments in real estate |
2,720 | 10,000 | 2,307 | |||||||||
Gain on extinguishment of debt |
| (7,138 | ) | (6,284 | ) | |||||||
Provision for loss on loan receivable |
| 2,152 | 1,179 | |||||||||
Tenant leasing costs |
(2,996 | ) | (2,191 | ) | 795 | |||||||
Bad debt (recovery) expense |
(643 | ) | 340 | 62 | ||||||||
Net change in interest receivable |
(361 | ) | (74 | ) | (70 | ) | ||||||
Net change in accounts receivable |
2,363 | | | |||||||||
Net change in accounts payable and accrued liabilities |
2,365 | (873 | ) | 4,084 | ||||||||
Net cash provided by operating activities |
19,612 | 14,968 | 25,872 | |||||||||
Cash flows from investing activities |
||||||||||||
Issuance and acquisition of loans receivable |
(122,301 | ) | (31,514 | ) | (24,124 | ) | ||||||
Investments in real estate |
(23,484 | ) | (2,522 | ) | (3,901 | ) | ||||||
Investment in equity investments |
(25,632 | ) | (3,358 | ) | (14,093 | ) | ||||||
Investment in preferred equity investment |
| (487 | ) | (4,973 | ) | |||||||
Return of equity on equity investments |
9,625 | 118 | 19,041 | |||||||||
Investment in real estate loan available for sale |
| (35,000 | ) | | ||||||||
Return of capital distribution from securities carried at fair value |
181 | | | |||||||||
Purchase of available for sale securities |
| | (5,055 | ) | ||||||||
Purchase of securities carried at fair value |
(13,222 | ) | (33,115 | ) | (36,896 | ) | ||||||
Proceeds from sale of investment in real estate |
1,750 | | | |||||||||
Proceeds from preferred equity investments |
| 145 | 21,273 | |||||||||
Proceeds from sale of mortgage backed securities available for sale |
| | 78,318 | |||||||||
Proceeds from sale of real estate loan available for sale |
| 34,797 | | |||||||||
Proceeds from sale of securities carried at fair value |
31,249 | 39,015 | 422 | |||||||||
Proceeds from sale of available for sale securities |
205 | | 58,088 | |||||||||
Proceeds of loan securities at maturity |
2,272 | | | |||||||||
Proceeds from sale of loans receivable |
12,876 | | | |||||||||
Restricted cash held in escrows |
(1,508 | ) | 2,668 | (252 | ) | |||||||
Collection of loans receivable |
15,064 | 11,467 | 12,635 | |||||||||
Cash from foreclosure on properties |
275 | | | |||||||||
Net cash provided by (used in) investing activities |
(112,650 | ) | (17,786 | ) | 100,483 | |||||||
61
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from mortgage loans payable |
$ | | $ | 49 | $ | 875 | ||||||
Proceeds from loan payable |
| 19,818 | | |||||||||
Payment of loan payable |
| (19,818 | ) | | ||||||||
Proceeds from revolving line of credit |
25,450 | 35,000 | 70,000 | |||||||||
Payment of revolving line of credit |
| (35,000 | ) | (70,000 | ) | |||||||
Principal payments of mortgage loans payable |
(10,199 | ) | (6,229 | ) | (8,063 | ) | ||||||
Restricted cash held in escrows |
1,520 | 4,004 | (5,127 | ) | ||||||||
Payments of note payable |
| (9,800 | ) | | ||||||||
Deferred financing costs |
(252 | ) | (61 | ) | (392 | ) | ||||||
Contribution from non-controlling interest |
1,431 | 979 | 600 | |||||||||
Distribution to non-controlling interest |
(354 | ) | (843 | ) | (103 | ) | ||||||
Issuance of Common Shares under Dividend Reinvestment Plan |
2,401 | 1,615 | 4,407 | |||||||||
Issuance of Common Shares through offering |
66,774 | 40,168 | 36,874 | |||||||||
Dividend paid on Common Shares |
(14,573 | ) | (17,809 | ) | (30,863 | ) | ||||||
Dividend paid on Series C Preferred Shares |
(396 | ) | | | ||||||||
Redemption of Series B-1 Preferred Shares |
| (2,000 | ) | (18,583 | ) | |||||||
Repayment of borrowings under repurchase agreement |
| | (75,175 | ) | ||||||||
Deposit on Series B-1 Preferred Shares |
| | (17,081 | ) | ||||||||
Proceeds from note payable |
| | 9,800 | |||||||||
Purchase of retirement of Common Shares |
| | (930 | ) | ||||||||
Redemption of Common Shares through reverse split |
| | (10 | ) | ||||||||
Net cash provided by (used in) financing activities |
71,802 | 10,073 | (103,771 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents |
(21,236 | ) | 7,255 | 22,584 | ||||||||
Cash and cash equivalents at beginning of period |
66,493 | 59,238 | 36,654 | |||||||||
Cash and cash equivalents at end of period |
$ | 45,257 | $ | 66,493 | $ | 59,238 | ||||||
Supplemental Disclosure of Cash Flow Information |
||||||||||||
Interest paid |
$ | 14,240 | $ | 16,324 | $ | 25,167 | ||||||
Taxes paid |
$ | 133 | $ | 220 | $ | 189 | ||||||
Supplemental Disclosure on Non-Cash Investing and Financing Activities |
||||||||||||
Dividends accrued on Common Shares |
$ | 4,392 | $ | 3,311 | $ | 5,934 | ||||||
Dividends accrued on Series C Preferred Shares |
$ | 39 | $ | 147 | | |||||||
Capital expenditures accrued |
$ | 1,046 | $ | 201 | $ | 358 | ||||||
Distribution from equity investment |
$ | | $ | 161 | $ | | ||||||
Conversion of Series B-1 Preferred Shares into Common Shares |
$ | | $ | | $ | 12,339 | ||||||
Redemption of Series B-1 Preferred Shares |
$ | | $ | (17,081 | ) | $ | | |||||
Deposit on redemption of Series B-1 Preferred Shares |
$ | | $ | 17,081 | $ | | ||||||
Transfer of preferred equity investments to equity method investments |
$ | | $ | (41,823 | ) | $ | | |||||
Transfer of loans to equity method investments |
$ | | $ | (15,805 | ) | $ | | |||||
Transfer to equity method investments from loans and preferred equity investments |
$ | | $ | 57,628 | $ | | ||||||
Transfer from loan assets to investments in real estate and lease intangibles |
$ | 19,210 | $ | | $ | | ||||||
Transfer to investments in lease intangibles |
$ | 3,204 | $ | | $ | | ||||||
Transfer to investments in real estate |
$ | 41,425 | $ | | $ | | ||||||
Transfer to below market lease intangibles |
$ | 125 | $ | | $ | | ||||||
Assumption of mortgage loan on investment in real estate |
$ | 23,875 | $ | | $ | | ||||||
62
Amounts related to number of buildings, square footage and tenant data are unaudited. |
1. | Business |
Winthrop Realty Trust (WRT), a real estate investment trust (REIT) under Sections 856-860
of the Internal Revenue Code (the Code), is an unincorporated association in the form of a
business trust organized in Ohio under a Declaration of Trust dated August 1, 1961, as amended and
restated on May 21, 2009, which has as its stated principal business activity the ownership and
management of, and lending to, real estate and related investments. |
||
Since January 1, 2005, WRT has conducted its business through WRT Realty L.P., a Delaware limited
partnership (the Operating Partnership). WRT is the sole general partner of, and owns directly
and indirectly, 100% of the limited partnership interest in the Operating Partnership. All
references to the Trust refer to WRT and its consolidated subsidiaries, including the Operating
Partnership. |
||
The Trust is engaged in the business of owning real property and real estate related assets which
it categorizes into three specific areas: (i) ownership of investment properties (operating
properties); (ii) origination and acquisition of loans and debt securities collateralized directly
or indirectly by commercial real property (loan assets), including collateral mortgage-backed
securities and collateral debt obligation securities; and (iii) equity and debt interests in other
real estate investment trusts (REIT securities). |
2. | Summary of Significant Accounting Policies |
Consolidation and Basis of Presentation |
||
The consolidated financial statements represent the consolidated results of WRT, its wholly-owned
taxable REIT subsidiary, WRT-TRS Management Corp. (TRS), and the Operating Partnership. TRS
sole asset is a 0.2% ownership interest in the Operating Partnership. All majority-owned
subsidiaries and affiliates over which the Trust has financial and operating control and variable
interest entities (VIEs) in which the Trust has determined it is the primary beneficiary are
included in the consolidated financial statements. All significant intercompany balances and
transactions have been eliminated in consolidation. The Trust accounts for all other unconsolidated
joint ventures using the equity method of accounting. Accordingly, the Trusts share of the
earnings of these joint ventures and companies is included in consolidated net income. |
||
Reverse Stock Split |
||
In November 2008 WRT effected a 1-for-5 reverse stock split (the Reverse Split) of its Common
Shares of Beneficial Interest (Common Shares) pursuant to which five Common Shares issued and
outstanding as of the close of the market on November 28, 2008 were automatically combined into one
Common Share, subject to the elimination of fractional shares. All references to Common Shares
outstanding, per Common Share amounts and stock option data have been restated to reflect the
effect of the Reverse Split for all periods presented. |
||
Reclassifications |
||
Certain prior year balances have been reclassified in order to conform to the current year
presentation. Discontinued operations for the periods presented include the Trusts properties in
Biloxi, Mississippi; Athens, Georgia; Kansas City, Kansas; Lafayette, Louisiana; Sherman, Texas;
and Knoxville, Tennessee. |
||
Out of Period Adjustments |
||
During the quarter ended June 30, 2010, the Trust identified an error in its year ended December
31, 2009 allocation of fair value attributable to the building component of its Athens, Georgia
property which was assessed for impairment in connection with its reclassification as held for sale
and its presentation in discontinued operations. As a result, net loss was understated by
approximately $700,000 for the year ended December 31, 2009. The Trust determined that this
amount was not material to the years ended December 31, 2010 or 2009, or to the three and six
months ended June 30, 2010. As such, a charge of approximately $700,000 has been recorded in the
consolidated statement of operations within
discontinued operations as an out of period adjustment in the second quarter of 2010. There was no
impact on cash flow from operations.
|
||
During the quarter ended December 31, 2010, the Trust identified an error
related to the capitalization of certain legal costs in its year ended December
31, 2009 financial statements. As a result, net loss was understated by
approximately $228,000 for the year ended December 31, 2009. The Trust determined
that this amount was not material to the year or any quarter for the years ended
December 31, 2010 or 2009. As such, a charge of $228,000 has been recorded in
the consolidated statement of operations as an out of period adjustment for the
year ended December 31, 2010. There was no impact on cash flow from operations. |
63
64
65
66
67
68
2010 | 2009 | 2008 | ||||||||||
Basic |
||||||||||||
Income (loss) from continuing operations |
$ | 19,368 | $ | (84,195 | ) | $ | (69,900 | ) | ||||
Income attributable to non-controlling interest |
(888 | ) | (1,017 | ) | (483 | ) | ||||||
Preferred dividend of Series C Preferred Shares |
(288 | ) | (147 | ) | | |||||||
Income (loss) from continuing operations applicable
to Common Shares |
18,192 | (85,359 | ) | (70,383 | ) | |||||||
Income (loss) from discontinued operations |
(2,003 | ) | 865 | 2,207 | ||||||||
Net income (loss) applicable to Common Shares
for earnings per share purposes |
$ | 16,189 | $ | (84,494 | ) | $ | (68,176 | ) | ||||
Basic weighted-average Common Shares |
22,566 | 16,277 | 14,866 | |||||||||
Income (loss) from continuing operations |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | ||||
Income (loss) from discontinued operations |
(0.09 | ) | 0.05 | 0.15 | ||||||||
Net income (loss) per Common Share |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | ||||
Diluted |
||||||||||||
Income (loss) from continuing operations |
$ | 19,368 | $ | (84,195 | ) | $ | (69,900 | ) | ||||
Income attributable to non-controlling interest |
(888 | ) | (1,017 | ) | (483 | ) | ||||||
Preferred dividend of Series C Preferred Shares |
(288 | ) | (147 | ) | | |||||||
Income (loss) from continuing operations applicable
to Common Shares |
18,192 | (85,359 | ) | (70,383 | ) | |||||||
Income (loss) from discontinued operations |
(2,003 | ) | 865 | 2,207 | ||||||||
Net income (loss) applicable to Common Shares
for earnings per share purposes |
$ | 16,189 | $ | (84,494 | ) | $ | (68,176 | ) | ||||
Basic weighted-average Common Shares |
22,566 | 16,277 | 14,866 | |||||||||
Series B-1 Preferred Shares (1) |
| | | |||||||||
Series C Preferred Shares (2) |
| | | |||||||||
Stock options (3) |
2 | | | |||||||||
Diluted weighted-average Common Shares |
22,568 | 16,277 | 14,866 | |||||||||
Income (loss) from continuing operations |
$ | 0.81 | $ | (5.24 | ) | $ | (4.74 | ) | ||||
Income (loss) from discontinued operations |
(0.09 | ) | 0.05 | 0.15 | ||||||||
Net income (loss) per Common Share |
$ | 0.72 | $ | (5.19 | ) | $ | (4.59 | ) | ||||
(1) | The Series B-1 Preferred Shares are
anti-dilutive for the years ended December 31,
2010, 2009 and 2008 and are not included in the weighted-average shares outstanding for
the calculation of diluted earnings per Common Share. |
|
(2) | The Series C Preferred Shares were issued
November 1, 2009, are anti-dilutive
for the years ended December 31, 2010 and 2009
and are not included in the
weighted-average shares outstanding for the calculation of diluted earnings per Common
Share. |
|
(3) | The Trusts stock options were dilutive for the year ended December 31, 2010.
The stock options were anti-dilutive for the years ended December 31, 2009 and 2008 and
are not included in the weighted-average shares outstanding for the calculation of
diluted earnings per Common Share. |
69
3. | Fair Value Measurements |
70
71
Quoted Prices in | ||||||||||||||||
Active Markets | Significant Other | Significant | ||||||||||||||
for Identical Assets | Observable | Unobservable | ||||||||||||||
and Liabilities | Inputs | Inputs | ||||||||||||||
Recurring Basis | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 45,257 | $ | | $ | | $ | 45,257 | ||||||||
Restricted cash held in escrow |
8,593 | | | 8,593 | ||||||||||||
Securities carried at fair value |
33,032 | | | 33,032 | ||||||||||||
Loan securities carried at fair value |
| | 11,981 | 11,981 | ||||||||||||
$ | 86,882 | $ | | $ | 11,981 | $ | 98,863 | |||||||||
Liabilities |
||||||||||||||||
Derivative liabilities |
$ | | $ | 63 | $ | | $ | 63 | ||||||||
Quoted Prices in | ||||||||||||||||
Active Markets | Significant Other | Significant | ||||||||||||||
for Identical Assets | Observable | Unobservable | ||||||||||||||
and Liabilities | Inputs | Inputs | ||||||||||||||
Recurring Basis | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 66,493 | $ | | $ | | $ | 66,493 | ||||||||
Restricted cash held in escrow |
9,505 | | | 9,505 | ||||||||||||
Available for sale securities |
203 | | | 203 | ||||||||||||
Securities carried at fair value |
51,702 | | 692 | 52,394 | ||||||||||||
Loan securities carried at fair value |
| | 1,661 | 1,661 | ||||||||||||
$ | 127,903 | $ | | $ | 2,353 | $ | 130,256 | |||||||||
Liabilities |
||||||||||||||||
Derivative liabilities |
$ | | $ | 85 | $ | | $ | 85 | ||||||||
72
Loan Securities | ||||||||
Securities Carried | Carried at Fair | |||||||
Year Ended Ended December 31, 2010 | at Fair Value | Value | ||||||
(in thousands) | ||||||||
Fair value, January 1, 2009 |
$ | | $ | | ||||
Purchases |
692 | 1,661 | ||||||
Transfers in/and or out of Level 3 |
| | ||||||
Fair value, January 1, 2010 |
692 | 1,661 | ||||||
Purchases |
| 7,112 | ||||||
Sale Repayment |
(692 | ) | (2,272 | ) | ||||
Realized Gain |
469 | |||||||
Unrealized gain, net |
| 5,011 | ||||||
Transfers in/and or out of Level 3 |
| | ||||||
Fair value, December 31, 2010 |
$ | | $ | 11,981 | ||||
73
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Identical Assets and | Observable Inputs | Unobservable | ||||||||||||||
Non-Recurring Basis | Liabilities (Level 1) | (Level 2) | Inputs (Level 3) | Total | ||||||||||||
Equity investments |
$ | | $ | | $ | | $ | | ||||||||
Assets held for sale |
| | 2,209 | 2,209 | ||||||||||||
Investments in real estate |
| | | | ||||||||||||
$ | | $ | | $ | 2,209 | $ | 2,209 | |||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Identical Assets and | Observable Inputs | Unobservable | ||||||||||||||
Non-Recurring Basis | Liabilities (Level 1) | (Level 2) | Inputs (Level 3) | Total | ||||||||||||
Equity investments |
$ | | $ | | $ | 1,582 | $ | 1,582 | ||||||||
Investments in real estate |
| | 10,813 | 10,813 | ||||||||||||
$ | | $ | | $ | 12,395 | $ | 12,395 | |||||||||
74
Financial Instruments at Fair Value | December 31, 2010 | December 31, 2009 | ||||||
Assets |
||||||||
Securities carried at fair value: |
||||||||
REIT Debentures |
$ | | $ | 18,794 | ||||
REIT Preferred shares |
28,547 | 23,950 | ||||||
REIT Common shares |
4,485 | 9,650 | ||||||
Loan securities carried at fair value |
11,981 | 1,661 | ||||||
$ | 45,013 | $ | 54,055 | |||||
Fair Value at | Amount Due | |||||||||||
December 31, 2010 | Upon Maturity | Difference | ||||||||||
Assets |
||||||||||||
Loan securities carried at fair value |
$ | 11,981 | $ | 25,241 | $ | 13,260 | ||||||
$ | 11,981 | $ | 25,241 | $ | 13,260 | |||||||
4. | Acquisition, Disposition, Leasing and Financing Activities |
75
Carrying | ||||
Value | ||||
Land |
$ | 8,098 | ||
Buildings and improvements |
40,768 | |||
Lease intangibles |
4,965 | |||
Below market lease intangibles |
(527 | ) | ||
Total |
$ | 53,304 | ||
Weighted | ||||||||
Average | ||||||||
Carrying | Amortization | |||||||
Value | Period (years) | |||||||
Lease intangible assets: |
||||||||
Above market tenant leases acquired |
$ | 414 | 7.4 | |||||
In-place lease value |
1,668 | 3.3 | ||||||
Tenant relationship value |
2,547 | 10.7 | ||||||
Leasing commissions |
336 | 3.5 | ||||||
Total |
$ | 4,965 | 7.46 | |||||
Intangible liabilities: |
||||||||
Below market tenant leases assumed |
$ | (527 | ) | 4.13 | ||||
Rents and reimbursements |
$ | 831 | ||
Total expenses (including depreciation, amortization and interest) |
(1,841 | ) | ||
Net loss |
$ | (1,010 | ) | |
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(unaudited) | (unaudited) | |||||||
Pro forma revenues |
$ | 60,263 | $ | 53,336 | ||||
Pro forma income (loss) from continuing operations |
$ | 17,346 | $ | (87,904 | ) | |||
Pro forma net income (loss) attributable to Common Shares |
$ | 15,055 | $ | (87,186 | ) | |||
Income (loss) per Common Share from continuing operations: |
||||||||
Basic as reported |
$ | 0.84 | $ | (5.24 | ) | |||
Basic as pro forma |
$ | 0.76 | $ | (5.40 | ) | |||
Diluted as reported |
$ | 0.84 | $ | (5.24 | ) | |||
Diluted as pro forma |
$ | 0.76 | $ | (5.40 | ) |
76
77
78
5. | Loans Receivable |
Contractual | ||||||||||||||
Stated | Carrying Amount | Maturity | ||||||||||||
Description | Location | Interest Rate | 2010 | 2009 | Date | |||||||||
Beverly Hilton (1) |
Beverly Hills, CA | Libor + 1.74% | $ | 7,899 | $ | 5,384 | Aug-11 | |||||||
Westwood (1) |
Phoeniz, AZ | 11.00% | 3,500 | | Oct-11 | |||||||||
Metropolitan Tower (1) |
New York, NY | Libor + 1.51% | 10,312 | 6,638 | Nov-11 | |||||||||
Moffett Towers (1) |
Sunnyvale, CA | Libor + 6.48% | 21,752 | | Jan-12 | |||||||||
Siete Square |
Phoeniz, AZ | 10.37% (2) | 2,488 | 5,505 | Jun-12 | |||||||||
160 Spear |
San Francisco, CA | 9.75% (3) | 6,674 | 4,281 | Jun-12 | |||||||||
160 Spear |
San Francisco, CA | 15.00% | 3,029 | 1,212 | Jun-12 | |||||||||
Legacy Orchard (1) |
Various | 15.00% | 9,750 | | Oct-14 | |||||||||
San Marbeya (1) |
Tempe, AZ | 5.88% | 26,966 | | Jan-15 | |||||||||
CDH CDO LLC (1) |
n/a | 12.00% | 3,498 | | Dec-15 | |||||||||
Rockwell |
Shirley, NY | 12.00% | 255 | | May-16 | |||||||||
500-512 7th Ave |
New York, NY | 7.19% | 9,954 | | Jul-16 | |||||||||
180 N. Michigan (1) |
Chicago, IL | 8.50% (4) | 1,862 | 717 | Dec-16 | |||||||||
Wellington Tower (1) |
New York, NY | 6.79% | 2,456 | 2,364 | Jul-17 | |||||||||
$ | 110,395 | $ | 26,101 | |||||||||||
(1) | The Trust determined that certain loans receivable are variable interests in VIEs
primarily based on the fact that the underlying entities do not have sufficient equity at risk
to permit the entity to finance its activities without additional subordinated financial
support. The Trust does not have the power to direct the activities of the entity that most
significantly impact the entitys economic performance and is not required to consolidate the
underlying entity. |
|
(2) | The Trust holds a B participation in this loan. Interest on the B participation equals the
difference between (i) interest on the entire outstanding loan principal balance ($7,219 at
December 31, 2010) at a rate of 9.8375% per annum less (ii) interest payable on the
outstanding principal balance of the A participation ($3,000 at December 31, 2010) at a rate
of 8.0% per annum. As a result, the effective yield on the Trusts $2,410 cash investment is
21.0%. |
|
(3) | The Trust holds a B note in this loan. Interest on the B note equals the difference between
(i) interest on the entire outstanding loan principal balance ($73,796 at December 31, 2010)
at a rate of 6.48215% per annum less (ii) interest payable on the outstanding principal
balance of the A note ($35,000 at December 31, 2010) at a rate of 9.75% per annum. As a
result, the effective yield on the Trusts $3,410 cash investment is 40.8%. |
|
(4) | Represents tenant improvement and capital expenditure loans collateralized by a subordinate
mortgage or the ownership interests in the owner of the applicable property. |
79
2010 | 2009 | 2008 | ||||||||||
Interest and Dividends Detail: |
||||||||||||
Interest on loan assets |
$ | 5,691 | $ | 2,421 | $ | 1,532 | ||||||
Accretion of loan discount |
8,782 | 1,021 | | |||||||||
Interest and dividends on REIT securities |
2,655 | 3,894 | 916 | |||||||||
Total Interest and Dividends |
$ | 17,128 | $ | 7,336 | $ | 2,448 | ||||||
Carring Value | ||||||||
Number of | of Loans | |||||||
Internal Credit Quality | Loans (1) | Receivable | ||||||
Greater than zero |
8 | $ | 50,361 | |||||
Equal to zero |
5 | 56,536 | ||||||
Less than zero |
| | ||||||
13 | $ | 106,897 | ||||||
(1) | The Trust holds one unsecured loan at December 31, 2010
not included above that has a carrying amount of $3,498. The Trust anticipates repayment in the first quarter of
2011. |
80
2010 | 2009 | |||||||
Balance at January 1 |
$ | 26,101 | $ | 22,876 | ||||
Purchase and advances |
122,301 | 31,514 | ||||||
Proceeds from sale |
(12,876 | ) | | |||||
Interest (received) accrued, net |
361 | 74 | ||||||
Repayments |
(15,064 | ) | (11,467 | ) | ||||
Provision for loan loss allowance |
| (2,152 | ) | |||||
Loan accretion |
8,782 | 1,021 | ||||||
Reclass to investment in real estate |
(19,210 | ) | | |||||
Reclass from other assets |
| 40 | ||||||
Reclass to equity investments |
| (15,805 | ) | |||||
Balance at December 31 |
$ | 110,395 | $ | 26,101 | ||||
6. | Securities Carried at Fair Value |
2010 | 2009 | |||||||||||||||
Cost | Fair Value | Cost | Fair Value | |||||||||||||
REIT Debentures |
$ | | $ | | $ | 13,597 | $ | 18,794 | ||||||||
REIT Preferred shares |
15,757 | 28,547 | 14,231 | 23,950 | ||||||||||||
REIT Common shares |
3,590 | 4,485 | 8,234 | 9,650 | ||||||||||||
19,347 | 33,032 | 36,062 | 52,394 | |||||||||||||
Loan securities |
7,574 | 11,981 | 1,661 | 1,661 | ||||||||||||
$ | 26,921 | $ | 45,013 | $ | 37,723 | $ | 54,055 | |||||||||
7. | Preferred Equity Investments Marc Realty |
81
8. | Equity Investments |
Nominal % Ownership | ||||||||||||
at December 31, | December 31, | December 31, | ||||||||||
Venture Partner (1) | Equity Investment | 2010 | 2010 | 2009 | ||||||||
Marc Realty (2) |
8 South Michigan LLC | 50.0% | $ | 7,087 | $ | 6,859 | ||||||
Marc Realty (2) |
11 East Adams Street LLC | 49.0% | 3,223 | 2,963 | ||||||||
Marc Realty (2) |
29 East Madison Street LLC | 50.0% | 7,720 | 7,750 | ||||||||
Marc Realty (2) |
Michigan 30 LLC | 50.0% | 12,080 | 11,881 | ||||||||
Marc Realty (2) |
Brooks Building LLC | 50.0% | 7,452 | 7,346 | ||||||||
Marc Realty (2) |
High Point Plaza LLC | 50.0% | 6,275 | 5,986 | ||||||||
Marc Realty (2) |
Salt Creek LLC | 50.0% | 2,344 | 1,536 | ||||||||
Marc Realty (2) |
1701 Woodfield LLC | 50.0% | 4,221 | 1,582 | ||||||||
Marc Realty (2) |
River Road LLC | 50.0% | 4,123 | 4,075 | ||||||||
Marc Realty (2) |
3701 Algonquin Road LLC | 50.0% | 2,931 | 2,827 | ||||||||
Marc Realty (2) |
Enterprise Center LLC | 50.0% | 3,018 | 3,094 | ||||||||
Marc Realty (2) |
900 Ridgebrook LLC | 50.0% | 1,676 | 1,661 | ||||||||
Sealy |
Northwest Atlanta Partners LP | 60.0% | 2,479 | 3,189 | ||||||||
Sealy |
Newmarket GP LLC | 68.0% | 6,647 | 7,840 | ||||||||
Sealy |
Airpark Nashville GP | 50.0% | 2,778 | 4,618 | ||||||||
Lexington (2) (3) |
Lex-Win Concord LLC | | | | ||||||||
Inland/Lexington (2) (3) |
Concord Debt Holdings LLC | 33.3% | | | ||||||||
Inland/Lexington (2) (3) |
CDH CDO LLC | 33.3% | | | ||||||||
ROIC |
WRT-ROIC Riverside LLC | 50.0% | 7,883 | | ||||||||
Pershing Square |
PSW NYC LLC | 22.5% | | | ||||||||
$ | 81,937 | $ | 73,207 | |||||||||
(1) | The Trust has various venture partners. Further detail is provided for the equity
investments under their respective headings below. |
|
(2) | The Trust has determined that all of the equity investments, other than those with Sealy
and ROIC are VIEs. The Trust has determined that it is not the primary beneficiary of these
investments. |
|
(3) | The Lex-Win entity has been dissolved and the assets previously held through Lex-Win are
now separated and held through Concord and CDH CDO. |
82
Marc | Concord | WRT- | Lex-Win | |||||||||||||||||||||||||
Realty | Sealy | Investments (1) | ROIC | PSW NYC | Acquisition | Total | ||||||||||||||||||||||
Balance at December 31, 2008 |
$ | | $ | 19,046 | $ | 73,061 | $ | | $ | | $ | 95 | $ | 92,202 | ||||||||||||||
Transfers from preferred
equity |
41,823 | | | | | | 41,823 | |||||||||||||||||||||
Transfer of loans receivable |
15,805 | | | | | | 15,805 | |||||||||||||||||||||
Other comprehensive income
reclassification |
| | 4,695 | | | | 4,695 | |||||||||||||||||||||
Equity in other
comprehensive income |
| | 21,479 | | | | 21,479 | |||||||||||||||||||||
Contributions |
3,240 | | 118 | | | | 3,358 | |||||||||||||||||||||
Distributions |
(1,089 | ) | (1,195 | ) | (500 | ) | | | | (2,784 | ) | |||||||||||||||||
Non-cash distribution |
| | (161 | ) | | | | (161 | ) | |||||||||||||||||||
Return of capital |
| | (118 | ) | | | | (118 | ) | |||||||||||||||||||
Equity in loss |
(2,219 | ) | (2,204 | ) | (98,574 | ) | | | (95 | ) | (103,092 | ) | ||||||||||||||||
Balance at December 31, 2009 |
57,560 | 15,647 | | | | | 73,207 | |||||||||||||||||||||
Contributions |
6,961 | | | 7,800 | 10,871 | | 25,632 | |||||||||||||||||||||
Equity in income (loss) |
1,776 | (3,010 | ) | | 473 | (1,246 | ) | | (2,007 | ) | ||||||||||||||||||
Distributions |
(4,147 | ) | (733 | ) | | (390 | ) | | | (5,270 | ) | |||||||||||||||||
Return of capital |
| | | | (9,625 | ) | | (9,625 | ) | |||||||||||||||||||
Balance at December 31, 2010 |
$ | 62,150 | $ | 11,904 | $ | | $ | 7,883 | $ | | $ | | $ | 81,937 | ||||||||||||||
(1) | Includes equity investments in Lex-Win Concord, Concord Debt Holdings LLC and CDH CDO LLC
(the Trusts Concord Investments). |
83
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS |
||||||||
Real estate, net |
$ | 171,961 | $ | 174,310 | ||||
Cash and cash equivalents |
1,633 | 1,100 | ||||||
Receivables and other assets |
27,194 | 25,287 | ||||||
Total Assets |
$ | 200,788 | $ | 200,697 | ||||
LIABILITIES AND MEMBERS CAPITAL |
||||||||
Mortgage and notes payable |
$ | 86,236 | $ | 94,969 | ||||
Other liabilities |
12,557 | 12,722 | ||||||
Members Capital |
101,995 | 93,006 | ||||||
Total Liabilities and Members Capital |
$ | 200,788 | $ | 200,697 | ||||
Trusts share of equity |
$ | 51,376 | $ | 46,497 | ||||
Basis differentials (1) |
13,274 | 13,563 | ||||||
Other-than-temporary impairment |
(2,500 | ) | (2,500 | ) | ||||
Carrying value of the Trusts investments in the equity investments |
$ | 62,150 | $ | 57,560 | ||||
(1) | This amount represents the aggregate difference between the Trusts historical cost
basis and the basis reflected at the equity investment level, which is typically
amortized over the life of the related assets and liabilities. The basis
differentials are the result of other-than-temporary impairments at the investment
level and a reallocation of equity at the venture level as a result of the
restructuring. In addition, certain acquisition, transaction and other costs may not
be reflected in the net assets at the equity investment level. |
For the Period | ||||||||
For the Year Ended | July 1 to | |||||||
December 31, 2010 | December 31, 2009 | |||||||
Total revenue |
$ | 40,088 | $ | 20,179 | ||||
Expenses |
||||||||
Operating |
18,522 | 9,279 | ||||||
Interest |
4,685 | 2,284 | ||||||
Real estate taxes |
4,880 | 2,847 | ||||||
Depreciation and amortization |
9,820 | 4,740 | ||||||
Other expense |
306 | 175 | ||||||
Total expenses |
38,213 | 19,325 | ||||||
Other income |
||||||||
Gain from extinguishment of debt |
2,207 | | ||||||
Other Income |
59 | | ||||||
Total Other Income |
2,266 | | ||||||
Net income |
$ | 4,141 | $ | 854 | ||||
Trusts share of net income |
$ | 2,065 | $ | 425 | ||||
Amortization of basis differential |
(289 | ) | (144 | ) | ||||
Other-than-temporary impairment |
| (2,500 | ) | |||||
Income from equity investments |
$ | 1,776 | $ | (2,219 | ) | |||
84
85
December 31, 2010 | December 31, 2009 | |||||||
ASSETS |
||||||||
Real estate, net |
$ | 149,207 | $ | 153,565 | ||||
Cash and cash equivalents |
960 | 971 | ||||||
Receivables and other assets |
12,902 | 14,658 | ||||||
Total Assets |
$ | 163,069 | $ | 169,194 | ||||
LIABILITIES AND MEMBERS CAPITAL |
||||||||
Mortgage and notes payable |
$ | 139,750 | $ | 139,750 | ||||
Other liabilities |
3,868 | 3,373 | ||||||
Members Capital |
19,451 | 26,071 | ||||||
Total Liabilities and Members Capital |
$ | 163,069 | $ | 169,194 | ||||
Carrying value of the Trusts investments in the equity investments |
$ | 11,904 | $ | 15,647 | ||||
For the Years Ended | For the Years Ended | For the Years Ended | ||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2008 | ||||||||||
Total revenue |
$ | 16,253 | $ | 17,246 | $ | 15,568 | ||||||
Expenses |
||||||||||||
Operating |
4,439 | 3,765 | 3,550 | |||||||||
Real estate taxes |
1,750 | 1,758 | 1,601 | |||||||||
Interest |
8,442 | 8,345 | 6,851 | |||||||||
Depreciation and amortization |
6,691 | 7,110 | 6,546 | |||||||||
Other expenses |
82 | 157 | 115 | |||||||||
Total expenses |
21,404 | 21,135 | 18,663 | |||||||||
Net loss |
$ | (5,151 | ) | $ | (3,889 | ) | $ | (3,095 | ) | |||
Trusts share of net loss |
$ | (3,010 | ) | $ | (2,204 | ) | $ | (1,682 | ) | |||
86
December 31, 2009 | |||||
ASSETS |
|||||
Cash and restricted cash |
$ | 26,116 | |||
Real estate debt investments, net of loss allowance |
447,270 | ||||
Real estate debt investments held for sale |
66,311 | ||||
Available for sale securities, net |
83,977 | ||||
Other assets |
10,834 | ||||
Total assets |
$ | 634,508 | |||
LIABILITIES AND MEMBERS CAPITAL |
|||||
Repurchase agreements |
$ | 135,064 | |||
Revolving credit facility |
58,850 | ||||
Note payable to related party |
| ||||
Collateralized debt obligations |
347,525 | ||||
Collateral support obligation |
9,757 | ||||
Sub-participation obligation |
4,500 | ||||
Accounts payable and other liabilities |
14,198 | ||||
Non-controlling redeemable preferred interest |
5,720 | ||||
Members capital |
113,928 | ||||
Accumulated other comprehensive loss |
(55,148 | ) | |||
Non-controlling interest |
114 | ||||
Total Liabilities and Members Capital |
$ | 634,508 | |||
Trusts share of equity |
$ | 29,390 | |||
Basis differential (1) |
(29,390 | ) | |||
Carrying value of the Trusts investment |
$ | | |||
(1) | At December 31,
2009, this amount represents other-than-temporary impairments recognized by the
Trust of $68,213 adjusted for suspended losses of $11,249 and accumulated other
comprehensive losses of $27,574. |
87
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2009 | 2008 | |||||||
Condensed Consolidated Statement of Operations |
||||||||
Interest and other income |
$ | 38,948 | $ | 71,307 | ||||
Interest expense |
(17,335 | ) | (36,410 | ) | ||||
Impairment loss on available for sale securities, net |
(16,302 | ) | (73,832 | ) | ||||
Provision for loss allowance on real estate debt
investments |
(80,620 | ) | (31,053 | ) | ||||
Impairment loss on real estate debt investments held
for sale |
(101,027 | ) | | |||||
Net realized loss on sale of investments |
(32,246 | ) | | |||||
Interest income on bank deposits |
7 | 426 | ||||||
Gain on extinguishment of debt |
| 15,603 | ||||||
Collateral support expense |
(9,757 | ) | | |||||
General and administrative |
(5,712 | ) | (4,824 | ) | ||||
Loss from discontinued operations |
(959 | ) | | |||||
Consolidated net loss |
(225,003 | ) | (58,783 | ) | ||||
Loss (income) attributable to non-controlling
redeemable preferred interest |
68,709 | (1,619 | ) | |||||
Income attributable to non-controlling interest |
(12 | ) | (12 | ) | ||||
Net loss attributable to Lex-Win |
$ | (156,306 | ) | $ | (60,414 | ) | ||
Trusts share of net loss |
(78,153 | ) | (30,207 | ) | ||||
Suspended loss |
11,249 | | ||||||
Other-than-temporary impairment |
(31,670 | ) | (36,543 | ) | ||||
Loss from equity investment |
$ | (98,574 | ) | $ | (66,750 | ) | ||
88
9. | Debt |
Balance at | Balance at | |||||||||||||
Location of | Spread Over | Interest Rate at | December 31, | December 31, | ||||||||||
Collateral | Maturity | LIBOR/Prime | December 31, 2010 | 2010 | 2009 | |||||||||
Andover, MA |
Mar 2011 | | 6.60% | $ | 6,135 | $ | 6,266 | |||||||
S. Burlington, VT |
Mar 2011 | | 6.60% | 2,629 | 2,686 | |||||||||
Various (1) |
Jun 2011 | LIBOR+1.75% | (2) | 19,002 | 23,761 | |||||||||
Meriden, CT |
Feb 2012 | 5.83% | 23,875 | | ||||||||||
Chicago, IL |
Apr 2012 | | 6.00% | 9,100 | 9,300 | |||||||||
Amherst, NY |
Oct 2013 | | 5.65% | 16,116 | 16,526 | |||||||||
Indianapolis, IN |
Apr 2015 | | 5.82% | 4,245 | 4,317 | |||||||||
Chicago, IL |
Mar 2016 | | 5.75% | 20,828 | 21,118 | |||||||||
Houston, TX |
Apr 2016 | | 6.34% | 60,351 | 63,869 | |||||||||
Lisle, IL |
Jun 2016 | | 6.26% | 23,905 | 24,176 | |||||||||
Lisle, IL |
Mar 2017 | | 5.55% | 5,600 | 5,600 | |||||||||
Orlando, FL |
Jul 2017 | | 6.40% | 38,657 | 39,148 | |||||||||
$ | 230,443 | $ | 216,767 | |||||||||||
(1) | The KeyBank loan is collateralized by 11 properties. |
|
(2) | Effective June 30, 2010, the Trust entered into an interest rate swap
agreement in the notional amount of $20,000,000, effectively converting the
floating interest rate to a fixed rate of 2.675% through June 30, 2011. |
Year | Amount | |||
2011 |
$ | 33,547 | ||
2012 |
38,940 | |||
2013 |
21,534 | |||
2014 |
6,922 | |||
2015 |
11,400 | |||
Thereafter |
118,100 | |||
$ | 230,443 | |||
89
10. | Revolving Line of Credit |
11. | Derivative Financial Instruments |
90
Change in Swap | ||||||||||||||||||||||||
Estimated Fair | Unrealized Gain | Valuations | ||||||||||||||||||||||
Value of Swap | on Settled Swap | Included in Other | ||||||||||||||||||||||
Notional | Cost | in Other | in Other | Comprehensive Income | ||||||||||||||||||||
Swap | Amount | of | Comprehensive | Comprehensive | For the Year Ended | |||||||||||||||||||
Maturity | Rate | of Hedge | Hedge | Income | Income | December 31, 2010 | ||||||||||||||||||
June 2011 |
0.925 | % | $ | 20,000 | (1) | $ | | $ | (63 | ) | $ | | $ | (63 | ) | |||||||||
June 2010 |
1.05 | % | 23,000 | | | | 85 |
Change in Swap | ||||||||||||||||||||||||
Estimated Fair | Unrealized Gain | Valuations | ||||||||||||||||||||||
Value of Swap | on Settled Swap | Included in Other | ||||||||||||||||||||||
Notional | Cost | in Other | in Other | Comprehensive Income | ||||||||||||||||||||
Swap | Amount | of | Comprehensive | Comprehensive | For the Year Ended | |||||||||||||||||||
Maturity | Rate | of Hedge | Hedge | Income | Income | December 31, 2009 | ||||||||||||||||||
December 2009 |
4.05 | % | $ | 26,000 | (1) | $ | | $ | | $ | | $ | 627 | |||||||||||
June 2010 |
1.05 | % | 23,000 | (1) | | (85 | ) | | (85 | ) |
(1) | Represents swap agreements related to the KeyBank Loan. |
12. | Preferred Shares |
91
13. | Common Shares |
Date of Issuance | Number of Shares Issued | Price per Share | Type of Offering | |||||||
January 15, 2008 |
64,308 | $ | 25.35 | DRIP (1) | ||||||
April 15, 2008 |
41,026 | $ | 20.65 | DRIP | ||||||
May 15, 2008 |
1,768,987 | $ | 21.35 | Rights Offering (2) | ||||||
July 15, 2008 |
58,354 | $ | 16.10 | DRIP | ||||||
October 15, 2008 |
85,950 | $ | 11.52 | DRIP | ||||||
January 15, 2009 |
61,292 | $ | 10.85 | DRIP | ||||||
April 15, 2009 |
7,462 | $ | 8.27 | DRIP | ||||||
July 15, 2009 |
37,982 | $ | 8.72 | DRIP | ||||||
October 15, 2009 |
63,471 | $ | 8.96 | DRIP | ||||||
November 27, 2009 |
4,450,781 | $ | 9.05 | Rights Offering (3) | ||||||
January 15, 2010 |
47,385 | $ | 12.73 | DRIP | ||||||
April 15, 2010 |
44,181 | $ | 13.75 | DRIP | ||||||
July 15, 2010 |
50,439 | $ | 12.15 | DRIP | ||||||
September 27, 2010 |
5,750,000 | $ | 12.25 | (4) | Public Offering | |||||
October 15, 2010 |
48,398 | $ | 12.53 | DRIP |
92
(1) | The Trusts Dividend Reinvestment and Stock Purchase Plan. |
|
(2) | Rights offering pursuant to which each holder of Common
Shares and Series B-1 Preferred Shares received one basic
subscription right for every ten Common Shares
owned, or in the case of Series B-1 Preferred Shares, one basic
subscription right for every ten Common Shares issuable upon
conversion of such Series B-1 Preferred Shares. |
|
(3) | Rights offering pursuant to which each holder of Common
Shares and Series B-1 Preferred Shares received one basic
subscription right for every three and one-half Common Shares owned,
or in the case of Series B-1 Preferred Shares, one basic subscription
right for every three and one-half Common Shares issuable upon
conversion of such Series B-1 Preferred Shares. |
|
(4) | Before underwriting discount |
14. | Common Share Options |
15. | Discontinued Operations |
93
2010 | 2009 | 2008 | ||||||||||
Revenues |
$ | 900 | $ | 2,517 | $ | 3,853 | ||||||
Operating expenses |
(80 | ) | (705 | ) | (762 | ) | ||||||
Depreciation and amortization |
(103 | ) | (480 | ) | (412 | ) | ||||||
Impairment Loss |
(2,720 | ) | | | ||||||||
Interest Expense |
| (467 | ) | (472 | ) | |||||||
Income (loss) from discontinued operations |
$ | (2,003 | ) | $ | 865 | $ | 2,207 | |||||
16. | Federal and State Income Taxes |
Capital Gains | Nontaxable | Total Dividends | ||||||||||||||
Ordinary Dividends | 15% Rate | Distribution | Paid | |||||||||||||
2010 |
$ | 2.03 | $ | | $ | | $ | 2.03 | ||||||||
2009 |
1.22 | | | 1.22 | ||||||||||||
2008 |
1.38 | 0.25 | | 1.63 |
94
Capital Gains | Nontaxable | Total Dividends | ||||||||||||||
Ordinary Dividends | 15% Rate | Distribution | Paid | |||||||||||||
2010 |
$ | 2.03 | $ | | $ | | $ | 2.03 | ||||||||
2009 |
| | | |
Capital Gains | Nontaxable | Total Dividends | ||||||||||||||
Ordinary Dividends | 15% Rate | Distribution | Paid | |||||||||||||
2010 |
$ | 0.65 | $ | | $ | | $ | 0.65 | ||||||||
2009 |
0.65 | | 0.10 | 0.75 | ||||||||||||
2008 |
0.48 | 0.09 | | 0.57 |
For the Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net income(loss) attributable to Winthrop Realty Trust |
$ | 16,477 | $ | (84,347 | ) | $ | (68,176 | ) | ||||
Book/Tax differences from depreciation and amortization expense |
189 | 1,512 | 1,869 | |||||||||
Book/Tax differences of accretion of discount |
(8,782 | ) | (1,021 | ) | | |||||||
Book/Tax differences of unrealized gains |
(10,080 | ) | (18,530 | ) | 1,155 | |||||||
Book/Tax differences on gains/losses from capital transactions |
1,655 | 1,532 | (549 | ) | ||||||||
Book/Tax differences on Preferred Shares |
1,563 | (4,386 | ) | (90 | ) | |||||||
Book/Tax differences for impairment losses |
2,720 | 19,105 | 9,817 | |||||||||
Book/Tax differences on investments in unconsolidated joint ventures |
15,667 | 95,831 | 86,719 | |||||||||
Other book/tax differences, net |
(134 | ) | 607 | 179 | ||||||||
Book/Tax differences on dividend income |
93 | 1,642 | 3,120 | |||||||||
Taxable income |
$ | 19,368 | $ | 11,945 | $ | 34,044 | ||||||
17. | Commitments and Contingencies |
95
18. | Related-Party Transactions |
For the Years Ended | ||||||||||||
December 31, 2010 | December 31, 2009 | December 31, 2008 | ||||||||||
Base Asset Management Fee |
$ | 5,225 | $ | 3,233 | $ | 5,616 | ||||||
WRP Sub-Management LLC Credit |
(129 | ) | (255 | ) | (1,763 | ) | ||||||
Property Management Fee |
248 | 262 | 264 | |||||||||
Construction Management Fee |
24 | 38 | 23 | |||||||||
$ | 5,368 | $ | 3,278 | $ | 4,140 | |||||||
96
97
19. | Future Minimum Lease Payments |
Year | Amount | |||
2011 |
$ | 31,240 | ||
2012 |
30,818 | |||
2013 |
29,476 | |||
2014 |
25,992 | |||
2015 |
22,324 | |||
Thereafter |
55,783 | |||
$ | 195,633 | |||
20. | Reportable Segments |
98
December 31, 2010 | December 31, 2009 | |||||||
Assets |
||||||||
Operating properties |
$ | 373,142 | $ | 313,682 | ||||
Loan assets |
134,269 | 31,774 | ||||||
REIT securities |
33,032 | 52,597 | ||||||
Corporate |
||||||||
Cash and cash equivalents |
45,257 | 66,493 | ||||||
Restricted cash |
8,593 | 9,505 | ||||||
Accounts receivable and prepaids |
12,402 | 14,559 | ||||||
Deferred financing costs |
1,158 | 1,495 | ||||||
Discontinued operations |
2,275 | 3,087 | ||||||
Total Assets |
$ | 610,128 | $ | 493,192 | ||||
Capital Expenditures |
||||||||
Operating Properties |
$ | 6,121 | $ | 2,548 | ||||
99
2010 | 2009 | 2008 | ||||||||||
Operating Properties |
||||||||||||
Rents and reimbursements |
$ | 38,239 | $ | 40,021 | $ | 41,504 | ||||||
Operating expenses |
(8,674 | ) | (7,042 | ) | (6,767 | ) | ||||||
Real estate taxes |
(2,542 | ) | (2,542 | ) | (2,428 | ) | ||||||
Impairment loss on investments in real estate |
| (10,000 | ) | (2,100 | ) | |||||||
Equity in income of Marc Realty investments |
1,776 | 281 | | |||||||||
Impairment loss on Marc Realty equity investment |
| (2,500 | ) | | ||||||||
Equity in loss of Sealy Northwest Atlanta |
(710 | ) | (457 | ) | (409 | ) | ||||||
Equity in loss of Sealy Airpark Nashville |
(1,107 | ) | (1,056 | ) | (1,023 | ) | ||||||
Equity in loss of Sealy Newmarket |
(1,193 | ) | (691 | ) | (250 | ) | ||||||
Net operating income |
25,789 | 16,014 | 28,527 | |||||||||
Depreciation and amortization expense |
(10,008 | ) | (10,585 | ) | (11,572 | ) | ||||||
Interest expense |
(13,193 | ) | (13,774 | ) | (14,289 | ) | ||||||
Operating properties net income (loss) |
2,588 | (8,345 | ) | 2,666 | ||||||||
Loan Assets |
||||||||||||
Interest income |
14,473 | 3,442 | 1,532 | |||||||||
Equity in earnings of preferred equity investment in Marc Realty |
338 | 78 | 5,868 | |||||||||
Impairment loss on preferred equity investments |
| (2,186 | ) | (7,513 | ) | |||||||
Equity in loss of Lex-Win Concord |
| (66,904 | ) | (30,207 | ) | |||||||
Impairment loss on investment in Lex-Win Concord |
| (31,670 | ) | (36,543 | ) | |||||||
Equity in earnings of WRT-ROIC |
473 | | | |||||||||
Equity in loss of PSW NYC |
(1,246 | ) | | | ||||||||
Gain on loan securities carried at fair value |
469 | | | |||||||||
Gain on sale of mortgage backed securities |
| | 454 | |||||||||
Gain on sale of other assets |
| | 24 | |||||||||
Unrealized gain on loan securities carried at fair value |
5,011 | | | |||||||||
Impairment loss on available for sale loan |
| (203 | ) | | ||||||||
Provision for loss on loans receivable |
| (2,152 | ) | (1,179 | ) | |||||||
Net operating income (loss) |
19,518 | (99,595 | ) | (67,564 | ) | |||||||
General and administrative expense |
(300 | ) | (235 | ) | | |||||||
Interest expense |
| | (206 | ) | ||||||||
Loan assets net income (loss) |
19,218 | (99,830 | ) | (67,770 | ) | |||||||
REIT Securities |
||||||||||||
Dividends |
2,655 | 3,894 | 916 | |||||||||
Gain on sale of available for sale securities |
| | 1,580 | |||||||||
Gain on sale of securities carried at fair value |
558 | 5,416 | | |||||||||
Impairment loss on available for sale securities |
| | (207 | ) | ||||||||
Unrealized gain on securities carried at fair value |
5,060 | 17,862 | 24 | |||||||||
Equity in loss of Lex-Win Acquisition, LLC |
| (95 | ) | (878 | ) | |||||||
Net operating income |
8,273 | 27,077 | 1,435 | |||||||||
Interest expense |
| (75 | ) | (89 | ) | |||||||
REIT securities net income |
8,273 | 27,002 | 1,346 | |||||||||
Net Income (Loss) |
30,079 | (81,173 | ) | (63,758 | ) | |||||||
Reconciliations to GAAP Net Income (Loss): |
||||||||||||
Corporate Income (Expense) |
||||||||||||
Interest income |
139 | 172 | 1,670 | |||||||||
General and administrative |
(8,534 | ) | (7,068 | ) | (6,887 | ) | ||||||
Interest expense |
(2,182 | ) | (2,815 | ) | (7,379 | ) | ||||||
Gain on extinguishment of debt |
| 6,846 | 6,284 | |||||||||
State and local taxes |
(134 | ) | (157 | ) | (329 | ) | ||||||
Other |
| | 499 | |||||||||
Income (loss) from continuing operations before non-controlling interest |
19,368 | (84,195 | ) | (69,900 | ) | |||||||
Non-controlling interest |
(888 | ) | (1,017 | ) | (483 | ) | ||||||
Income (loss) from continuing operations attributable to Winthrop Realty Trust |
18,480 | (85,212 | ) | (70,383 | ) | |||||||
Income (loss) from discontinued operations attributable to Winthrop Realty Trust |
(2,003 | ) | 865 | 2,207 | ||||||||
Net Income (Loss) Attributable to Winthrop Realty Trust |
$ | 16,477 | $ | (84,347 | ) | $ | (68,176 | ) | ||||
100
21. | Variable Interest Entities |
101
102
22. | Quarterly Results of Operations (Unaudited) |
Quarters Ended | ||||||||||||||||
(In thousands, except per-share data) | March 31 | June 30 | September 30 | December 31 | ||||||||||||
2010 |
||||||||||||||||
Revenues |
$ | 12,584 | $ | 13,079 | $ | 14,246 | $ | 15,458 | ||||||||
Net income |
$ | 4,205 | $ | 4,576 | $ | 3,808 | $ | 3,888 | ||||||||
Net income applicable to Common Shares |
$ | 4,092 | $ | 4,518 | $ | 3,749 | $ | 3,830 | ||||||||
Per share |
||||||||||||||||
Net income applicable to Common Shares, basic |
$ | 0.20 | $ | 0.21 | $ | 0.18 | $ | 0.14 | ||||||||
Net income applicable to Common Shares, diluted |
$ | 0.20 | $ | 0.21 | $ | 0.18 | $ | 0.14 | ||||||||
2009 |
||||||||||||||||
Revenues |
$ | 12,262 | $ | 12,173 | $ | 12,636 | $ | 10,286 | ||||||||
Net income (loss) |
$ | (22,433 | ) | $ | (71,196 | ) | $ | 15,157 | $ | (5,875 | ) | |||||
Net income (loss) applicable to Common Shares |
$ | (22,433 | ) | (71,196 | ) | $ | 14,318 | $ | (6,022 | ) | ||||||
Per share |
||||||||||||||||
Net income (loss) applicable to Common Shares, basic |
$ | (1.42 | ) | $ | (4.50 | ) | $ | 0.90 | $ | (0.34 | ) | |||||
Net income (loss) applicable to Common Shares, diluted |
$ | (1.42 | ) | $ | (4.50 | ) | $ | 0.90 | $ | (0.34 | ) | |||||
23. | Subsequent Event |
103
104
105
106
WINTHROP REALTY TRUST |
||||
Dated: March 16, 2011 | By: | /s/ Michael L. Ashner | ||
Michael L. Ashner | ||||
Chief Executive Officer | ||||
Dated: March 16, 2011 | By: | /s/ Thomas Staples | ||
Thomas Staples | ||||
Chief Financial Officer |
Name | Title | Date | ||
/s/ Michael L. Ashner
|
Trustee | March 16, 2011 | ||
/s/ Carolyn Tiffany
|
Trustee | March 16, 2011 | ||
Arthur Blasberg, Jr. |
||||
Howard Goldberg |
||||
Thomas McWilliams |
||||
Lee Seidler |
||||
Steven Zalkind
|
Trustee | March 16, 2011 |
By:
|
/s/ Carolyn Tiffany | |||
Carolyn Tiffany, as attorney-in fact |
107
Cost | ||||||||||||||||||||||||||||||||||||||||||||
capitalized/(impaired) | ||||||||||||||||||||||||||||||||||||||||||||
subsequent to | ||||||||||||||||||||||||||||||||||||||||||||
Initial Cost to Registrant | acquisition | As of December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||||
Mortgage | Building and | Land/Building and | Building and | Accumulated | Date | |||||||||||||||||||||||||||||||||||||||
Description | Location | Location | Encumbrances | Land | Improvements | Improvements | Land | Improvements | Total | Depreciation | Acquired | Life | ||||||||||||||||||||||||||||||||
Continuing Operations: | ||||||||||||||||||||||||||||||||||||||||||||
Office | Orlando | FL |
$ | 38,657 | $ | | $ | 17,248 | $ | 42 | $ | | $ | 17,290 | $ | 17,290 | $ | 2,647 | 11/2004 | 40 yrs | ||||||||||||||||||||||||
Office | Plantation | FL |
| | 8,915 | 4,020 | 4,000 | 8,935 | 12,935 | 1,368 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Indianapolis | IN |
4,245 | 270 | 1,609 | 6,268 | 1,763 | 6,384 | 8,147 | 3,414 | 10/1974 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Chicago | IL |
20,828 | | 23,635 | 1,745 | | 25,380 | 25,380 | 3,586 | 10/2005 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Amherst | NY |
16,116 | 1,591 | 18,027 | | 1,591 | 18,027 | 19,618 | 2,535 | 5/2005 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Andover | MA |
6,135 | | 7,611 | 717 | 1,200 | 7,128 | 8,328 | 881 | 12/2005 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | South Burlington | VT |
2,629 | | 3,099 | 314 | | 3,413 | 3,413 | 392 | 12/2005 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Chicago | IL |
9,100 | 1,149 | 9,989 | 4,796 | 1,149 | 14,785 | 15,934 | 1,081 | 10/2007 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Houston | TX |
60,351 | 7,075 | 62,468 | | 7,075 | 62,468 | 69,543 | 9,500 | 1/2005 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Lisle | IL |
16,973 | 3,774 | 16,371 | 591 | 3,774 | 16,962 | 20,736 | 2,027 | 2/2006 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Lisle | IL |
6,932 | 2,361 | 6,298 | 290 | 2,361 | 6,588 | 8,949 | 783 | 2/2006 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Lisle | IL |
5,600 | 780 | 2,803 | 463 | 780 | 3,266 | 4,046 | 372 | 2/2006 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Phoenix | AZ |
| 801 | 7,387 | 25 | 801 | 7,412 | 8,213 | 86 | 8/2010 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Englewood | CO |
| 2,580 | 5,403 | | 2,580 | 5,403 | 7,983 | 45 | 11/2010 | 40 yrs | ||||||||||||||||||||||||||||||||
Office | Englewood | CO |
| 1,829 | 5,612 | | 1,829 | 5,612 | 7,441 | 15 | 12/2010 | 40 yrs | ||||||||||||||||||||||||||||||||
187,566 | 22,210 | 196,475 | 19,271 | 28,903 | 209,053 | 237,956 | 28,732 | |||||||||||||||||||||||||||||||||||||
Retail | Atlanta | GA |
| | 4,633 | 5 | | 4,638 | 4,638 | 710 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | Louisville | KY |
| | 2,722 | 377 | 373 | 2,726 | 3,099 | 417 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | St. Louis | MO |
| | 990 | 649 | 647 | 992 | 1,639 | 152 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | Greensboro | NC |
| | 3,797 | 4 | | 3,801 | 3,801 | 582 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | Memphis | TN |
| | 760 | 637 | 635 | 762 | 1,397 | 117 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | Denton | TX |
| | 1,574 | 918 | 915 | 1,577 | 2,492 | 241 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Retail | Seabrook | TX |
| | 1,393 | 618 | 616 | 1,395 | 2,011 | 214 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
| | 15,869 | 3,208 | 3,186 | 15,891 | 19,077 | 2,433 | |||||||||||||||||||||||||||||||||||||
Other | Jacksonville | FL |
| 2,166 | 8,684 | 1,491 | 2,166 | 10,175 | 12,341 | 1,523 | 11/2004 | 40 yrs | ||||||||||||||||||||||||||||||||
Other | Churchill | PA |
| | 23,834 | (9,963 | ) | | 13,871 | 13,871 | 3,405 | 11/2004 | 40 yrs | |||||||||||||||||||||||||||||||
Other | Meriden | CT |
23,875 | 2,887 | 22,367 | | 2,887 | 22,367 | 25,254 | 139 | 10/2010 | 40 yrs | ||||||||||||||||||||||||||||||||
Other (1) | 19,002 | | | | | | | | ||||||||||||||||||||||||||||||||||||
42,877 | 5,053 | 54,885 | (8,472 | ) | 5,053 | 46,413 | 51,466 | 5,067 | ||||||||||||||||||||||||||||||||||||
Total from Continuing Operations | $ | 230,443 | $ | 27,263 | $ | 267,229 | $ | 14,007 | $ | 37,142 | $ | 271,357 | $ | 308,499 | $ | 36,232 | ||||||||||||||||||||||||||||
(1) Represents a first mortgage loan collateralized by the Finova properties. The aggregate cost in the properties for federal income tax purposes was approximately |
$ | 228,541 |
108
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Real Estate |
||||||||||||
Balance at beginning of period |
$ | 249,078 | $ | 267,706 | $ | 266,290 | ||||||
Additions during the period: |
||||||||||||
Land |
9,408 | | | |||||||||
Buildings and improvements |
6,121 | 2,548 | 3,376 | |||||||||
Consolidation of Deer Valley |
8,188 | | | |||||||||
Consolidation of Newbury Apartments |
25,254 | | | |||||||||
Consolidation of Crossroads II |
7,983 | | | |||||||||
Purchase of Crossroads I |
7,441 | | | |||||||||
Transfer (to) from discontinued operations, net |
(3,970 | ) | (10,811 | ) | 140 | |||||||
Impairments during the period |
| (10,000 | ) | (2,100 | ) | |||||||
Disposal of fully amortized assets |
(1,004 | ) | (365 | ) | | |||||||
Balance at end of period |
$ | 308,499 | $ | 249,078 | $ | 267,706 | ||||||
Accumulated Depreciation |
||||||||||||
Balance at beginning of period |
$ | 31,269 | $ | 25,901 | $ | 19,214 | ||||||
Additions charged to operating expenses |
6,399 | 6,652 | 6,701 | |||||||||
Transfer (to) from discontinued operations, net (1) |
(432 | ) | (919 | ) | (14 | ) | ||||||
Disposal of fully amortized assets |
(1,004 | ) | (365 | ) | | |||||||
Balance at end of period |
$ | 36,232 | $ | 31,269 | $ | 25,901 | ||||||
(1) | In 2010, the Knoxville, Tennessee; Lafayette, Louisiana and Sherman, Texas properties were
placed into discountinued operations. In 2009, the Athens, Georgia property was placed into
discontinued operations and the Kansas City, Kansas property was foreclosed. |
109
Page | |||||
Exhibit | Description | Number | |||
3.1
|
Second Amended and Restated Declaration of Trust as of May 21, 2009 - Incorporated by reference to Exhibit 3.1 to the Trusts Quarterly Report on Form 10-Q for the period ended June 30, 2009. | | |||
3.2
|
By-laws of Winthrop Realty Trust as amended and restated on November 3, 2009 Incorporated by reference to Exhibit 3.1 to the Trusts Current Report on Form 8-K filed November 6, 2009. | | |||
3.3
|
Amendment to By-laws Incorporated by reference to Exhibit 3.1 to the Trusts Current Report on Form 8-K filed March 6, 2010. | | |||
4.1
|
Form of certificate for Common Shares of Beneficial Interest. Incorporated by reference to Exhibit 4.1 to the Trusts Annual Report on Form 10-K for the year ended December 31, 2008. | | |||
4.2
|
Warrant to purchase 500,000 shares of Beneficial Interest of Trust - Incorporated by reference to Exhibit 4(l) to the Trusts Annual Report on Form 10-K for the year ended December 31, 1998. | | |||
4.3
|
Agreement of Limited Partnership of WRT Realty L.P., dated as of January 1, 2005 Incorporated by reference to Exhibit 4.1 to the Trusts Form 8-K filed January 4, 2005. | | |||
4.4
|
Amended and Restated Certificate of Designations for Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest (Series B-1 Certificate of Designations) Incorporated by reference to Exhibit 4.1 to the Trusts Form 8-K filed June 21, 2005. | | |||
4.5
|
Amendment No. 1 to Series B-1 Certificate of Designations Incorporated by reference to Exhibit 4.1 to the Trusts Form 8-K filed November 13, 2007. | | |||
4.6
|
Certificate of Designations for Series C Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest Incorporated by reference to Exhibit 4.1 to the Trusts Form 8-K filed November 2, 2009. | | |||
10.1
|
Stock Purchase Agreement between the Trust and FUR Investors, LLC, dated as of November 26, 2003, including Annex A thereto, being the list of Conditions to the Offer Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed December 1, 2003. | | |||
10.2
|
Second Amended and Restated Advisory Agreement dated March 5, 2009, between the Trust, WRT Realty L.P. and FUR Advisors LLC. Incorporated by reference to Exhibit 10.3 to the Trusts Annual Report on Form 10-K for the year ended December 31, 2008. | | |||
10.3
|
Amendment No. 1 to Second Amended and Restated Advisory Agreement - Incorporated by reference to Exhibit 10.30 to the Trusts Quarterly Report on Form 10-Q for the period ended March 31, 2009. | | |||
10.4
|
Amendment No. 2 to Second Amended and Restated Advisory Agreement - Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed January 29, 2010. | | |||
10.5
|
Exclusivity Services Agreement between the Trust and Michael L. Ashner - Incorporated by reference to Exhibit 10.4 to the Trusts Form 8-K filed December 1, 2003. | |
110
Page | |||||
Exhibit | Description | Number | |||
10.6
|
Amendment No. 1 to Exclusivity Agreement, dated November 7, 2005 - Incorporated by reference to Exhibit 10.7 to the Trusts Form 8-K filed November 10, 2005. | | |||
10.7
|
Covenant Agreement between the Trust and FUR Investors, LLC - Incorporated by reference to Exhibit 10.5 to the Trusts Form 8-K filed December 1, 2003. | | |||
10.8
|
Amended and Restated Omnibus Agreement, dated March 16, 2005, among Gerald Nudo, Laurence Weiner and WRT Realty L.P. Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed March 18, 2005 | | |||
10.9
|
Agreement, dated as of July 1, 2009, among Gerald Nudo, Laurence Weiner and WRT Realty L.P. Incorporated by reference to Exhibit 10.14 to the Trusts Form 10-Q for the period ended June 30, 2009 filed August 10, 2009 | | |||
10.10
|
Securities Purchase Agreement, dated February 25, 2005, between First Union Real Estate Equity and Mortgage Investments, Perrin Holden & Davenport Capital Corp. and the Investors named therein Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed March 3, 2005. | | |||
10.11
|
Securities Purchase Agreement, dated June 15, 2005, between First Union Real Estate Equity and Mortgage Investments, Perrin Holden & Davenport Capital Corp. and the Investors named therein Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed June 21, 2005. | | |||
10.12
|
Amended and Restated Registration Rights Agreement, dated June 20, 2005, between First Union Real Estate Equity and Mortgage Investments and the Investors named therein Incorporated by reference to Exhibit 10.2 to the Trusts Form 8-K filed June 21, 2005. | | |||
10.13
|
Amended and Restated Investor Rights Agreement, dated June 20, 2005, between First Union Real Estate Equity and Mortgage Investments and the Investors named therein Incorporated by reference to Exhibit 10.3 to the Trusts Form 8-K filed June 21, 2005. | | |||
10.14
|
Securities Purchase Agreement, dated November 7, 2005, between the Trust and Vornado Investments L.L.C. (Vornado) Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed November 10, 2005. | | |||
10.15
|
Agreement between Michael L. Ashner and Winthrop Realty Trust dated July 23, 2006 Incorporated by reference to Exhibit 10.2 to the Trusts Form 8-K filed July 25, 2006. | | |||
10.16
|
Winthrop Realty Trust 2007 Long Term Stock Incentive Plan Incorporated by reference to the Trusts Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 30, 2007. | | |||
10.17
|
Form of Series B-1 and Series C Preferred Share Purchase Agreement, dated November 1, 2009 Incorporated by reference to Exhibit 10.1 to the Trusts Form 8-K filed November 2, 2009. | | |||
10.18
|
Investor Rights Agreement (Series C Preferred Shares), dated November 1, 2009, between Winthrop Realty Trust and the investors party thereto - Incorporated by reference to Exhibit 10.2 to the Trusts Form 8-K filed November 2, 2009. | | |||
10.19
|
Amended and Restated Loan Agreement, dated as of March 3, 2011, between WRT Realty L.P. and KeyBank, National Association. | * | |||
10.20
|
Guaranty from Winthrop Realty Trust and certain of its Subsidiaries in favor of KeyBank, National Association. | * |
111
Page | |||||
Exhibit | Description | Number | |||
21
|
List of Subsidiaries | * | |||
23.1
|
Consent of Independent Accounting Firm PricewaterhouseCoopers LLP | * | |||
23.2
|
Consent of Independent Accounting Firm PricewaterhouseCoopers LLP (Lex-Win Concord financials) | * | |||
24
|
Power of Attorney | * | |||
31
|
Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | * | |||
32
|
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | * | |||
99.1
|
Consolidated Financial Statements of Lex-Win Concord LLC | * |
* | filed herewith |
112
Page | ||||
ARTICLE 1 BACKGROUND |
1 | |||
1.1 Defined Terms |
1 | |||
1.2 Borrower |
1 | |||
1.3 Use of Loan Proceeds |
1 | |||
1.4 Guaranties |
1 | |||
1.5 Loan |
2 | |||
ARTICLE 2 LOAN PROVISIONS |
2 | |||
2.1 The Facility/Advances |
2 | |||
2.2 Term of Loan; Extension Rights |
4 | |||
2.3 Interest Rate and Payment Terms |
4 | |||
2.4 Interest Rate |
4 | |||
2.5 Principal |
6 | |||
2.6 Fees |
8 | |||
2.7 Acceleration |
9 | |||
2.8 Conditions to Extending Loan |
9 | |||
2.9 Increased Costs and Capital Adequacy |
10 | |||
2.10 Borrower Withholding |
11 | |||
2.11 Interest Rate Agreements |
12 | |||
ARTICLE 3 SECURITY FOR THE LOANS; LOAN AND SECURITY DOCUMENTS |
12 | |||
3.1 Security for Loan |
12 | |||
3.2 Loan Documents and Security Documents |
14 | |||
3.3 Additional Borrowing Base Collateral |
14 | |||
3.4 Removal of Borrowing Base Assets |
15 | |||
ARTICLE 4 CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES |
16 | |||
4.1 Authorized Representatives |
16 | |||
ARTICLE 5 CONDITIONS PRECEDENT |
16 | |||
5.1 Satisfactory Loan Documents and Related Documents; Loan Agenda Items |
16 | |||
5.2 Financial Information; No Material Change |
16 | |||
5.3 Warranties and Representations Accurate |
17 | |||
5.4 Validity and Sufficiency of Security Documents |
17 | |||
5.5 Payment Direction And Authorization |
18 | |||
5.6 Litigation |
18 | |||
5.7 Formation Documents and Entity Agreements |
18 | |||
5.8 Compliance With Law |
19 | |||
5.9 Compliance With Financial Covenants |
19 | |||
5.10 Due Diligence |
19 | |||
5.11 Condition of Property |
19 | |||
5.12 Insurance |
20 | |||
5.13 Third Party Consents and Agreements |
20 | |||
5.14 Legal Opinions |
20 |
- i -
Page | ||||
5.15 No Default |
20 | |||
5.16 Patriot Act/OFAC |
20 | |||
ARTICLE 6 WARRANTIES AND REPRESENTATIONS |
20 | |||
6.1 Formation |
20 | |||
6.2 Proceedings; Enforceability |
21 | |||
6.3 Conflicts |
21 | |||
6.4 Ownership and Taxpayer Identification Numbers |
21 | |||
6.5 Litigation |
22 | |||
6.6 Information |
22 | |||
6.7 Taxes |
22 | |||
6.8 Financial Information |
22 | |||
6.9 Management Agreements |
22 | |||
6.10 Control Provisions |
22 | |||
6.11 Formation Documents |
23 | |||
6.12 Related Documents |
23 | |||
6.13 Bankruptcy Filings |
23 | |||
6.14 Options |
23 | |||
6.15 Investment Company |
23 | |||
6.16 Holding Company |
23 | |||
6.17 Individual Properties |
23 | |||
6.18 Use of Proceeds |
25 | |||
6.19 Insurance |
25 | |||
6.20 Deferred Compensation and ERISA |
25 | |||
6.21 No Default |
26 | |||
6.22 Other Loan Parties Warranties and Representations |
26 | |||
ARTICLE 7 AFFIRMATIVE COVENANTS |
26 | |||
7.1 Notices |
26 | |||
7.2 Financial Statements; Reports; Officers Certificates |
26 | |||
7.3 Existence |
29 | |||
7.4 Payment of Taxes |
30 | |||
7.5 Insurance; Casualty, Taking |
30 | |||
7.6 Inspection |
30 | |||
7.7 Loan Documents |
30 | |||
7.8 Further Assurances |
30 | |||
7.9 Books and Records |
31 | |||
7.10 Business and Operations |
31 | |||
7.11 Title |
31 | |||
7.12 Estoppel |
32 | |||
7.13 ERISA |
32 | |||
7.14 Depository Accounts |
33 | |||
7.15 Cash Flow; Payment Direction Letters |
33 | |||
7.16 Distributions |
34 | |||
7.17 Costs and Expenses |
34 | |||
7.18 Appraisals |
34 | |||
7.19 Indemnification |
34 | |||
7.20 RESERVED |
35 |
- ii -
Page | ||||
7.21 Future Collateral Obligations |
35 | |||
7.22 Replacement Documentation |
35 | |||
7.23 Other Covenants |
36 | |||
7.24 Related Documents |
36 | |||
7.25 Reserved |
36 | |||
7.26 Financial Covenants |
36 | |||
ARTICLE 8 NEGATIVE COVENANTS |
39 | |||
8.1 No Changes to the Borrower and other Loan Parties |
39 | |||
8.2 Restrictions on Liens |
39 | |||
8.3 Consolidations, Mergers, Sales of Assets, Issuance and Sale of Equity |
40 | |||
8.4 Restrictions on Debt |
41 | |||
8.5 Respecting Individual Properties |
42 | |||
8.6 Other Business |
42 | |||
8.7 Change of Control |
42 | |||
8.8 Forgiveness of Debt |
42 | |||
8.9 Affiliate Transactions |
42 | |||
8.10 Amendments; Terminations of Related Documents |
42 | |||
8.11 ERISA |
42 | |||
8.12 Bankruptcy Filings |
42 | |||
8.13 Investment Company |
42 | |||
8.14 Holding Company |
42 | |||
8.15 Use of Proceeds |
43 | |||
8.16 Distributions |
43 | |||
8.17 Restrictions on Investments |
43 | |||
8.18 Negative Pledges, Etc. |
43 | |||
ARTICLE 9 SPECIAL PROVISIONS |
44 | |||
9.1 Legal Requirements |
44 | |||
9.2 Recourse Provisions |
44 | |||
9.3 Payment of Obligations |
44 | |||
ARTICLE 10 EVENTS OF DEFAULT |
44 | |||
10.1 Default and Events of Default |
44 | |||
10.2 Grace Periods and Notice |
48 | |||
ARTICLE 11 REMEDIES |
49 | |||
11.1 Remedies |
49 | |||
11.2 Written Waivers |
49 | |||
11.3 Power of Attorney |
49 | |||
ARTICLE 12 SECURITY INTEREST AND SET-OFF |
50 | |||
12.1 Security Interest |
50 | |||
12.2 Set-Off |
50 | |||
12.3 Application |
51 | |||
12.4 Right to Freeze |
51 | |||
12.5 Additional Rights |
51 |
- iii -
Page | ||||
ARTICLE 13 THE AGENT AND THE LENDERS |
51 | |||
13.1 Appointment |
51 | |||
13.2 Reliance on Agent |
51 | |||
13.3 Powers |
51 | |||
13.4 Disbursements |
52 | |||
13.5 Distribution and Apportionment of Payments |
53 | |||
13.6 Agency Provisions Relating to Collateral |
56 | |||
13.7 Lender Actions Against Borrower or the Collateral |
57 | |||
13.8 Assignment and Participation |
58 | |||
13.9 Ratable Sharing |
58 | |||
13.10 General Immunity |
58 | |||
13.11 No Responsibility for Loan, Recitals, Etc. |
58 | |||
13.12 Action on Instructions of Lenders |
59 | |||
13.13 Employment of Agents and Counsel |
59 | |||
13.14 Reliance on Documents; Counsel |
59 | |||
13.15 Agent Reimbursement and Indemnification |
59 | |||
13.16 Rights as a Lender |
59 | |||
13.17 Lenders Credit Decisions |
60 | |||
13.18 Notice of Events of Default |
60 | |||
13.19 Successor Agent |
60 | |||
13.20 Distribution by Agent |
61 | |||
13.21 Holders |
61 | |||
13.22 Assignment and Participation |
61 | |||
13.23 Several Liability |
64 | |||
13.24 Miscellaneous Assignment Provisions |
64 | |||
13.25 Assignment by Borrower |
65 | |||
13.26 Consents and Approvals |
65 | |||
13.27 Lead Arranger |
67 | |||
ARTICLE 14 GENERAL PROVISIONS |
67 | |||
14.1 Notices |
67 | |||
14.2 Limitations on Assignment |
69 | |||
14.3 Further Assurances |
69 | |||
14.4 Payments |
69 | |||
14.5 Parties Bound |
69 | |||
14.6 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial |
70 | |||
14.7 Survival |
71 | |||
14.8 Cumulative Rights |
71 | |||
14.9 Claims Against Agent or Lenders |
71 | |||
14.10 Regarding Consents |
72 | |||
14.11 Obligations Absolute |
72 | |||
14.12 Table of Contents, Title and Headings |
72 | |||
14.13 Counterparts |
72 | |||
14.14 Satisfaction of Commitment |
72 | |||
14.15 Time Of the Essence |
72 | |||
14.16 No Oral Change |
72 | |||
14.17 Patriot Act |
72 | |||
14.18 Electronic Information |
73 | |||
14.19 Monthly Statements |
74 |
- iv -
Exhibit A
|
| Definitions | ||
Exhibit B
|
| Form of Assignment and Assumption Agreement | ||
Exhibit C
|
| Form of Note | ||
Exhibit D
|
| Authorized Representatives | ||
Exhibit E
|
| Required Property, Hazard and Other Insurance | ||
Exhibit F
|
| Ownership Interests and Taxpayer Identification Numbers | ||
Exhibit G-1
|
| Form of Compliance Certificate | ||
Exhibit G-2
|
| Form of Financial Covenant Compliance Certificate | ||
Exhibit G-3
|
| Form of Borrowing Base Certificate | ||
Exhibit H
|
| Form of Notice of Rate Selection | ||
Exhibit I
|
| Lenders Commitments | ||
Exhibit K
|
| Loan Agenda | ||
Exhibit L
|
| Reserved | ||
Exhibit M
|
| Pledged Subsidiaries | ||
Exhibit N
|
| Pledged Securities |
- v -
Schedule 6.9 |
22 | |||
Schedule 6.10 |
23 | |||
Schedule 6.17.3 |
25 | |||
Schedule 6.17.4 |
25 | |||
Schedule 6.17.5 |
25 | |||
Schedule 6.17.7 |
26 | |||
Schedule 8.4.2(b) |
44 |
- vi -
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
First: | To the Agent, towards any fees and any expenses for which the Agent is entitled to
reimbursement under this Agreement or the other Loan Documents not theretofore paid to
the Agent. |
||
Second: | To all applicable Lenders in accordance with their proportional share based upon
their respective Percentages until all Lenders have been reimbursed for all expenses
which such Lenders have previously paid to the Agent and not theretofore paid to such
Lenders. |
||
Third: | Pro Rata to (a) all Lenders in accordance with their proportional share based upon
their respective Percentages until all Lenders have been paid in full all principal and
interest due to such Lenders under the Loan, with each Lender applying such proceeds
for purposes of this Agreement against the outstanding principal balance and accrued
and unpaid interest due to such Lender under the Loans in such fashion and priority as
the Agent may direct, and (b) to the Agent in connection with any Interest Rate
Protection Agreement (if any) or other hedging or protection arrangement entered into
by the Borrower or any other party with the KeyBank National Association with respect
to the Loan. |
||
Fourth: | To all applicable Lenders in accordance with their proportional share based upon
their respective Percentages until all Lenders have been paid in full all other amounts
due to such Lenders under the Loans including, without limitation, any costs and
expenses incurred directly by such Lenders to the extent such costs and expenses are
reimbursable to such Lenders by the Borrower under the Loan Documents. |
||
Fifth: | To the Borrower or such third parties as may be entitled to claim Liquidation
Proceeds. |
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
BORROWER: | WRT REALTY L.P., a Delaware limited partnership By: Winthrop Realty Trust, general partner |
|||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President |
S-1
AGENT: | KEYBANK NATIONAL ASSOCIATION, a national banking association |
|||
By: | ||||
Jane E. McGrath | ||||
Vice President | ||||
LENDER: | KEYBANK NATIONAL ASSOCIATION, a national banking association |
|||
By: | ||||
Jane E. McGrath | ||||
Vice President | ||||
S-2
Section |
||||
Reference |
||||
Number |
||||
Exhibit A Definitions |
1.1 | |||
Exhibit B Form of Assignment and Assumption |
13.22 | |||
Exhibit C Form of Note |
3.2 | |||
Exhibit D Authorized Representatives |
4.1, 14.9, Exhibit A | |||
Exhibit E Required Property, Hazard and Other Insurance |
6.19, 7.5.1 | |||
Exhibit F Ownership Interests and Taxpayer Identification Numbers |
6.4 | (a) | ||
Exhibit G-1 Form of Compliance Certificate. |
7.2 | (c) | ||
Exhibit G-2 Form of Financial Covenant Compliance Certificate. |
||||
Exhibit G-3 Form of Borrowing Base Certificate. |
7.2 | (c) | ||
Exhibit H Form of Notice of Rate Selection |
2.4.3 | |||
Exhibit I Lenders Commitments |
Exhibit A | |||
Exhibit K Loan Agenda |
Exhibit A | |||
Exhibit M Pledged Subsidiaries |
Exhibit A | |||
Exhibit N Pledged Securities |
3.1.2 | |||
Exhibit A-1
Applicable Margin | Applicable Margin | |||
LIBOR Rate Option | Adjusted Prime Rate Option | |||
3.00% |
1.50 | % |
Exhibit A-2
Exhibit A-3
Exhibit A-4
Exhibit A-5
Exhibit A-6
Exhibit A-7
Exhibit A-8
Exhibit A-9
Exhibit A-10
Exhibit A-11
Exhibit A-12
Exhibit A-13
Exhibit A-14
Exhibit A-15
Exhibit A-16
Exhibit A-17
Exhibit A-18
Exhibit F-1
* | Not a Borrower Subsidiary |
Exhibit F-2
-1-
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
GUARANTORS: WINTHROP REALTY TRUST, an Ohio Business trust |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT TRS MANAGEMENT CORP., a Delaware corporation |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
FT-FIN ACQUISITION LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
FT-FIN GP LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-ANDOVER PROPERTY LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-ANDOVER PROPERTY MANAGER LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-SOUTH BURLINGTON PROPERTY LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-SOUTH BURLINGTON PROPERTY MANAGER LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT PROPERTY HOLDING LLC, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-CROSSROADS LLC, a Delaware limited liability company | ||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
WRT-CROSSROADS ONE LLC, a Delaware limited liability company | ||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
FT-WD PROPERTY LLC, a Delaware limited liability company | ||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
FT-KRG (Atlanta) LLC FT-KRG (Denton) LLC FT-KRG (Louisville) LLC FT-KRG (Memphis) LLC FT-KRG (Seabrook) LLC FT-KRG (Greensboro) LLC |
||||
Each, a Delaware limited liability company |
||||
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
FT-KRG PROPERTY L.P., a Delaware limited partnership |
||||
By: | FT-FIN GP LLC, a Delaware limited | |||
liability company, its general partner |
By: | ||||
Name: | Carolyn Tiffany | |||
Title: | President | |||
Name of Entity | State of Formation | |
1051 Perimeter Drive Property LLC |
Delaware | |
180 North Wacker Property LLC |
Delaware | |
29 East Madison Property LLC |
Delaware | |
5400 Westheimer Court LLC |
Delaware | |
5400 Westheimer Holding L.P. |
Delaware | |
5400 Westheimer Limited Partnership |
Delaware | |
CDH CDO LLC |
Delaware | |
FT-5400 New Unit Lender LLC |
Delaware | |
FT-5400 Westheimer LLC |
Delaware | |
FT-Amherst Property LLC |
Delaware | |
FT-Amherst Property Manager LLC |
Delaware | |
FT-Churchill Property L.P. |
Delaware | |
FT-Circle Tower LLC |
Delaware | |
FT-Circle Tower Manager LLC |
Delaware | |
FT-FIN Acquisition LLC |
Delaware | |
FT-FIN GP LLC |
Delaware | |
FT-Florida Property LLC |
Delaware | |
FT-Florida Property Manager LLC |
Delaware | |
FT-KRG (Athens) LLC |
Delaware | |
FT-KRG (Atlanta) LLC |
Delaware | |
FT-KRG (Denton) LLC |
Delaware | |
FT-KRG (Greensboro) LLC |
Delaware | |
FT-KRG (Knoxville) LLC |
Delaware | |
FT-KRG (Lafayette) LLC |
Delaware | |
FT-KRG (Louisville) LLC |
Delaware | |
FT-KRG (Memphis) LLC |
Delaware | |
FT-KRG (Seabrook) LLC |
Delaware | |
FT-KRG (Sherman) LLC |
Delaware | |
FT-KRG (St. Louis) LLC |
Delaware | |
FT-KRG Property L.P. |
Delaware | |
FT-Marc Class B LLC |
Delaware | |
FT-Marc Loan LLC |
Delaware | |
FT-Ontario Holdings LLC |
Delaware | |
FT-Ontario Parking LLC |
Delaware | |
FT-Ontario Parking Manager LLC |
Delaware | |
FT-Ontario Property LLC |
Delaware | |
FT-Ontario Property Manager LLC |
Delaware | |
FT-Orlando Property LLC |
Delaware | |
FT-Orlando Property Manager LLC |
Delaware | |
FT-WD Property LLC |
Delaware | |
Lex-Win Acquisition LLC |
Delaware | |
Newbury Apartments LLC |
Delaware | |
NY 46th Street Lender LLC |
Delaware | |
WRT-46th Street Gotham LLC |
Delaware | |
WRT-1050 Corporetum Holdings LLC |
Delaware |
Name of Entity | State of Formation | |
WRT-1050 Corporetum Property LLC |
Delaware | |
WRT-1050 Corporetum Property Manager LLC |
Delaware | |
WRT-550/650 Corporetum Property LLC |
Delaware | |
WRT-550/650 Corporetum Property Manager LLC |
Delaware | |
WRT-701 Arboretum Property LLC |
Delaware | |
WRT-701 Arboretum Property Manager LLC |
Delaware | |
WRT-Andover Property LLC |
Delaware | |
WRT-Andover Property Manager LLC |
Delaware | |
WRT-Atlanta LLC |
Delaware | |
WRT-CDH II LLC |
Delaware | |
WRT-Concord LLC |
Delaware | |
WRT-Crossroads LLC |
Delaware | |
WRT-Crossroads One LLC |
Delaware | |
WRT-DV LLC |
Delaware | |
WRT-Lender LLC |
Delaware | |
WRT-Marc 180 North Wacker LLC |
Delaware | |
WRT-Marc RC Holding LLC |
Delaware | |
WRT-Marc RC Land LLC |
Illinois | |
WRT-Marc RC LLC |
Illinois | |
WRT-Moffett LLC |
Delaware | |
WRT-MT LLC |
Delaware | |
WRT-Nashville Airpark LLC |
Delaware | |
WRT-Plantation Property Owner LLC |
Delaware | |
WRT-Property Holdings LLC |
Delaware | |
WRT Realty L.P. |
Delaware | |
WRT-Rockwell LLC |
Delaware | |
WRT-ROIC Riverside LLC |
Delaware | |
WRT-Science Center Property Owner LLC |
Delaware | |
WRT-Science Center Property Manager LLC |
Delaware | |
WRT-SD Driver LLC |
Delaware | |
WRT-South Burlington Property LLC |
Delaware | |
WRT-South Burlington Property Manager LLC |
Delaware | |
WRT-Springing Member LLC |
Delaware | |
WRT-TALF LLC |
Delaware | |
WRT TRS Management Corp. |
Delaware | |
WRT-VHH LLC |
Delaware | |
WRT-Vision Creekwood LLC |
Delaware | |
WRT-Vision Holdings LLC |
Delaware | |
WRT-Vision LLC |
Delaware | |
WRT-Vision Loan LLC |
Delaware | |
WRT-Vision Management LLC |
Delaware | |
WRT-Westwood Noteholder LLC |
Delaware |
/s/ Arthur Blasberg, Jr.
|
||
/s/ Howard Goldberg
|
||
/s/ Thomas McWilliams
|
||
/s/ Lee Seidler
|
||
/s/ Steven Zalkind
|
Date: March 16, 2011 | /s/ Michael L. Ashner | |||
Michael L. Ashner | ||||
Chief Executive Officer |
Date: March 16, 2011 | /s/ Thomas C. Staples | |||
Thomas C. Staples | ||||
Chief Financial Officer |
Date: March 16, 2011 | /s/ Michael L. Ashner | |||
Michael L. Ashner | ||||
Chief Executive Officer | ||||
Date: March 16, 2011 | /s/ Thomas C. Staples | |||
Thomas C. Staples | ||||
Chief Financial Officer | ||||
Report of Independent Registered Public Accounting Firm |
1 | |||
Consolidated Balance Sheet at December 31, 2009 |
2 | |||
Consolidated Statements of Operations for the Period from January 1, 2010 to August 26,
2010 (Dissolution) (Unaudited) and the Years Ended December 31, 2009 and 2008 |
3 | |||
Consolidated Statements of Comprehensive Loss for the Period from January 1, 2010 to
August 26, 2010(Dissolution) (Unaudited) and the Years Ended December 31, 2009 and 2008 |
4 | |||
Consolidated Statements of Changes in Members Capital for the Period from January 1,
2010 to August 26, 2010 (Dissolution) (Unaudited) and the Years Ended December 31, 2009
and 2008 |
5 | |||
Consolidated Statements of Cash Flows for the Period from January 1, 2010 to August 26,
2010 (Dissolution) (Unaudited) and the Years Ended December 31, 2009 and 2008 |
7 | |||
Notes to Consolidated Financial Statements |
9 |
1
December 31, | ||||
2009 | ||||
Assets: |
||||
Cash and cash equivalents |
$ | 747 | ||
Restricted cash |
25,369 | |||
Real estate debt investments, net of allowance for loss |
447,270 | |||
Real estate debt investments held for sale, at fair value |
66,311 | |||
Available for sale securities, net |
83,977 | |||
Interest and other receivables |
1,756 | |||
Deferred financing costs, net of accumulated amortization |
5,306 | |||
Real estate properties held for sale |
3,634 | |||
Other assets |
138 | |||
Total assets |
$ | 634,508 | ||
Liabilities and Members Capital: |
||||
Liabilities: |
||||
Repurchase agreements |
$ | 135,064 | ||
Revolving credit facility |
58,850 | |||
Collateralized debt obligations |
347,525 | |||
Collateral support obligation |
9,757 | |||
Sub-participation obligation |
4,500 | |||
Liabilities of discontinued operations |
142 | |||
Other liabilities |
14,056 | |||
Note payable to related parties |
| |||
Total liabilities |
569,894 | |||
Non-controlling redeemable preferred interest: |
||||
Non-controlling redeemable preferred interest |
5,720 | |||
Total non-controlling redeemable preferred interest |
5,720 | |||
Members Capital: |
||||
Lex-Win Concord LLC members capital |
113,928 | |||
Accumulated other comprehensive loss |
(55,148 | ) | ||
Total Lex-Win Concord LLC members capital |
58,780 | |||
Non-controlling equity interest |
114 | |||
Total members capital |
58,894 | |||
Total liabilities and members capital |
$ | 634,508 | ||
2
(Unaudited) | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Income: |
||||||||||||
Interest income on real estate debt
investments and available for sale securities |
$ | 17,930 | $ | 38,948 | $ | 71,307 | ||||||
Realized gain on sale of real estate debt investments |
7,760 | | | |||||||||
Total income |
25,690 | 38,948 | 71,307 | |||||||||
Expenses: |
||||||||||||
Interest |
9,581 | 17,335 | 36,410 | |||||||||
Provision for loss on real estate debt investments |
106,150 | 80,620 | 31,053 | |||||||||
Realized loss on sale of real estate debt investments |
2,407 | 9,606 | | |||||||||
Impairment loss on real estate debt investments held for sale |
| 101,027 | | |||||||||
Realized loss on sale of real estate debt investments held for sale |
| 17,566 | | |||||||||
Other-than-temporary impairment losses on available-for-sale securities |
||||||||||||
Gross impairment losses |
3,874 | 29,770 | 65,905 | |||||||||
Less: Impairments recognized in other comprehensive losses |
| (13,468 | ) | 7,927 | ||||||||
Net impairment losses recognized in earnings |
3,874 | 16,302 | 73,832 | |||||||||
Realized loss on sale of available for sale securities |
| 5,074 | | |||||||||
Fees and expenses paid to related party |
470 | 1,108 | 1,637 | |||||||||
Collateral support expense |
319 | 9,757 | | |||||||||
General and administrative |
1,754 | 4,604 | 3,187 | |||||||||
Total expenses |
124,555 | 262,999 | 146,119 | |||||||||
Other income: |
||||||||||||
Interest income on bank deposits |
6 | 7 | 426 | |||||||||
Gain on extinguishment of debt |
| | 15,603 | |||||||||
Total other income |
6 | 7 | 16,029 | |||||||||
Loss from continuing operations |
(98,859 | ) | (224,044 | ) | (58,783 | ) | ||||||
Discontinued operations: |
||||||||||||
Loss from discontinued operations |
(971 | ) | (959 | ) | | |||||||
Total discontinued operations |
(971 | ) | (959 | ) | | |||||||
Consolidated net loss |
(99,830 | ) | (225,003 | ) | (58,783 | ) | ||||||
(Income) loss attributable to the non-controlling redeemable
preferred interest |
4,585 | 68,709 | (1,619 | ) | ||||||||
Income attributable to the non-controlling interest |
(8 | ) | (12 | ) | (12 | ) | ||||||
Net loss attributable to Lex-Win Concord LLC |
$ | (95,253 | ) | $ | (156,306 | ) | $ | (60,414 | ) | |||
3
(Unaudited) | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Consolidated net loss |
$ | (99,830 | ) | $ | (225,003 | ) | $ | (58,783 | ) | |||
Other comprehensive income (loss): |
||||||||||||
Unrealized gain (loss) on cash flow hedges |
(4,486 | ) | 10,668 | (20,200 | ) | |||||||
Unrealized gain (loss) on available for sale securities |
5,774 | (29,770 | ) | (65,905 | ) | |||||||
Reclassification of unrealized loss to impairment loss |
| 16,302 | 73,832 | |||||||||
Other comprehensive loss |
1,288 | (2,800 | ) | (12,273 | ) | |||||||
Comprehensive loss |
(98,542 | ) | (227,803 | ) | (71,056 | ) | ||||||
Comprehensive income attributable to non-controlling interest |
(8 | ) | (12 | ) | (12 | ) | ||||||
Comprehensive (income) loss attributable to non-controlling
redeemable preferred interest |
4,585 | 68,709 | (1,619 | ) | ||||||||
Comprehensive loss attributable to
Lex-Win Concord LLC |
$ | (93,965 | ) | $ | (159,106 | ) | $ | (72,687 | ) | |||
4
Accumulated | ||||||||||||||||||||
Other | Non- | |||||||||||||||||||
Comprehensive | Controlling | |||||||||||||||||||
Winthrop | Lexington | Income (Loss) | Interest | Total | ||||||||||||||||
Balance at December 31, 2007 |
$ | 163,851 | $ | 163,851 | $ | (16,781 | ) | $ | 102 | 311,023 | ||||||||||
Contributions from Members |
5,087 | 5,087 | | | 10,174 | |||||||||||||||
Distributions to Members |
(14,600 | ) | (14,600 | ) | | | (29,200 | ) | ||||||||||||
Net income allocated to
non-controlling interests |
| | | 12 | 12 | |||||||||||||||
Distributions to non-
controlling interests |
| | | | | |||||||||||||||
Unrealized loss on cash
flow hedges |
| | (20,200 | ) | | (20,200 | ) | |||||||||||||
Unrealized gain on available
for sale securities |
| | 7,927 | | 7,927 | |||||||||||||||
Net income allocation |
(30,207 | ) | (30,207 | ) | | | (60,414 | ) | ||||||||||||
Balance at December 31, 2008 |
124,131 | 124,131 | (29,054 | ) | 114 | 219,322 | ||||||||||||||
Adjustment to opening balance
for cumulative effect of adopting
new accounting method |
11,647 | 11,647 | (23,294 | ) | | | ||||||||||||||
Net income allocated to
non-controlling interests |
| | | 12 | 12 | |||||||||||||||
Contributions from Members |
118 | 118 | | | 236 | |||||||||||||||
Distributions to Members |
(779 | ) | (779 | ) | | | (1,558 | ) | ||||||||||||
Distributions to non-
controlling interests |
| | | (12 | ) | (12 | ) | |||||||||||||
Unrealized gain on cash
flow hedges |
| | 10,668 | | 10,668 | |||||||||||||||
Unrealized loss on available
for sale securities |
| | (13,468 | ) | | (13,468 | ) | |||||||||||||
Net loss allocation |
(78,153 | ) | (78,153 | ) | | | (156,306 | ) | ||||||||||||
Balance, December 31, 2009 |
56,964 | 56,964 | (55,148 | ) | 114 | 58,894 | ||||||||||||||
5
Accumulated | ||||||||||||||||||||
Other | Non- | |||||||||||||||||||
Comprehensive | Controlling | |||||||||||||||||||
(Unaudited) | Winthrop | Lexington | Income (Loss) | Interest | Total | |||||||||||||||
Balance at December 31, 2009 |
56,964 | 56,964 | (55,148 | ) | 114 | 58,894 | ||||||||||||||
Net income allocated to
non-controlling interests |
| | | 8 | 8 | |||||||||||||||
Distributions to non-
controlling interests |
| | | (12 | ) | (12 | ) | |||||||||||||
Unrealized loss on cash
flow hedges |
| | (4,486 | ) | | (4,486 | ) | |||||||||||||
Unrealized gain on available
for sale securities |
| | 5,774 | | 5,774 | |||||||||||||||
Net loss allocation |
(47,627 | ) | (47,626 | ) | | | (95,253 | ) | ||||||||||||
Dissolution adjustment |
(9,337 | ) | (9,338 | ) | 53,860 | (110 | ) | 35,075 | ||||||||||||
Balance, August 26, 2010 |
$ | | $ | | $ | | $ | | $ | | ||||||||||
6
(Unaudited) | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash flows from operating activities: |
||||||||||||
Consolidated net income (loss) |
$ | (99,830 | ) | $ | (225,003 | ) | $ | (58,783 | ) | |||
Adjustments to reconcile net income (loss) to cash provided
by operating activities |
||||||||||||
Amortization and accretion of interest |
(1,270 | ) | (4,866 | ) | (7,686 | ) | ||||||
Amortization of deferred financing costs |
1,634 | 1,945 | 1,469 | |||||||||
Impairment loss on available for sale securities |
3,874 | 16,302 | 73,832 | |||||||||
Provision for loss on real estate debt investments |
106,150 | 80,620 | 31,053 | |||||||||
Impairment loss on real estate debt investments held for sale |
| 101,027 | | |||||||||
Realized loss on sale of real estate debt investments |
1,187 | 9,606 | | |||||||||
Realized loss on sale of real estate debt investments held for sale |
1,220 | 17,566 | | |||||||||
Realized loss on sale of available for sale securities |
| 5,074 | | |||||||||
Realized loss on sale of real estate properties held for sale |
708 | | | |||||||||
Realized gain on sale of investments held for sale |
(2,130 | ) | | | ||||||||
Realized gain on available for sale securities |
(1,323 | ) | | | ||||||||
Realized gain on sale of real estate debt investments |
(4,307 | ) | | | ||||||||
Gain on extinguishment of debt |
| | (15,603 | ) | ||||||||
Changes in operating assets and liabilities: |
||||||||||||
Interest and other receivables |
250 | 1,842 | 1,579 | |||||||||
Other assets |
104 | (36 | ) | 455 | ||||||||
Other liabilities |
(527 | ) | (904 | ) | 442 | |||||||
Liabilities of discontinued operations |
(90 | ) | 142 | | ||||||||
Collateral support obligation |
319 | 9,757 | | |||||||||
Net cash provided by operating activities |
5,969 | 13,072 | 26,758 | |||||||||
Cash flows from investing activities: |
||||||||||||
Proceeds from sale of real estate debt investments |
9,888 | 18,817 | | |||||||||
Proceeds from sale of real estate debt investments held for sale |
70,038 | 86,481 | | |||||||||
Proceeds from sale of available for sale securities |
2,868 | 3,670 | | |||||||||
Proceeds from sale of real estate properties held for sale
discontinued operations |
| 6,721 | | |||||||||
Purchase of real estate debt investments |
| | (14,534 | ) | ||||||||
Funding of commitments on real estate debt investments |
| (1,714 | ) | | ||||||||
Real estate debt investments repaid |
| 30,168 | 78,496 | |||||||||
Available for sale securities purchased |
(13,562 | ) | (6,856 | ) | | |||||||
Real estate debt investments purchased |
(3,000 | ) | ||||||||||
Available for sale securities repaid |
296 | 3,935 | 5,296 | |||||||||
Change in restricted cash |
13,112 | (22,550 | ) | 2,770 | ||||||||
Net cash provided by investing activities |
79,640 | 118,672 | 72,028 | |||||||||
7
(Unaudited) | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from related party notes payable |
$ | | $ | 8,360 | $ | 20,000 | ||||||
Repayment of related party notes payable |
| (18,360 | ) | (10,000 | ) | |||||||
Repayments on repurchase agreements |
(71,627 | ) | (105,540 | ) | (231,720 | ) | ||||||
Proceeds from revolving line of credit facility |
| | 80,000 | |||||||||
Repayment of revolving credit facility |
(20,801 | ) | (21,150 | ) | | |||||||
Payment to terminate derivative contract |
| (8,221 | ) | | ||||||||
Payment on collateralized debt obligation |
| | (13,111 | ) | ||||||||
Proceeds from sub-participation arrangement |
| 4,500 | | |||||||||
Payment of deferred financing costs |
| (87 | ) | (1,401 | ) | |||||||
Distributions to non-controlling redeemable preferred interest |
| (3,152 | ) | | ||||||||
Distributions to non-controlling interests |
(12 | ) | (12 | ) | (1,178 | ) | ||||||
Distribution to members |
| (1,240 | ) | (29,200 | ) | |||||||
Distribution to members upon liquidation |
(3,416 | ) | | | ||||||||
Contributions from non-controlling redeemable preferred interest |
9,500 | 1,354 | 76,000 | |||||||||
Contributions from members |
| 236 | 10,174 | |||||||||
Net cash used in financing activities |
(86,356 | ) | (143,312 | ) | (100,436 | ) | ||||||
Net decrease in cash and cash equivalents |
(747 | ) | (11,568 | ) | (1,650 | ) | ||||||
Cash and cash equivalents at beginning of period |
747 | 12,315 | 13,965 | |||||||||
Cash and cash equivalents at end of period |
$ | | $ | 747 | $ | 12,315 | ||||||
Supplemental cash flow information: |
||||||||||||
Interest paid |
$ | 7,881 | $ | 16,505 | $ | 33,798 | ||||||
Collateral support arrangement |
$ | | $ | | $ | 231 | ||||||
Non-cash investing activity: |
||||||||||||
Investment in real estate debt investment by issuance
of first mortgage seller financing on real estate property sold |
$ | | $ | 955 | $ | | ||||||
Non-cash financing activities: |
||||||||||||
Distribution of available for sale security to members |
$ | | $ | 318 | $ | | ||||||
Distribution of available for sale security to non-controlling
redeemable preferred interest |
$ | | $ | 214 | $ | | ||||||
Accrued dividend payable to non-controlling interest |
$ | 8 | $ | 12 | $ | 12 | ||||||
Accrued dividend payable to non-controlling redeemable
preferred interest |
$ | | $ | 5,720 | $ | 441 | ||||||
Adjustment of Assets and Liabilites upon Dissolution |
||||||||||||
Resricted cash |
$ | (12,257 | ) | $ | | $ | | |||||
Real estate debt investments, net of allowance |
$ | (338,008 | ) | $ | | $ | | |||||
Available for sale securities |
$ | (98,217 | ) | $ | | $ | | |||||
Interest and other receivables |
$ | (1,506 | ) | $ | | $ | | |||||
Deferred and other assets |
$ | (4,788 | ) | $ | | $ | | |||||
Repurchase agreements |
$ | 63,437 | $ | | $ | | ||||||
Revolving credit facility |
$ | 38,049 | $ | | $ | | ||||||
Collaterlized debt obligations |
$ | 347,525 | $ | | $ | | ||||||
Collateral support obligation |
$ | 10,076 | $ | | $ | | ||||||
Sub-participation obligation |
$ | 17,762 | $ | | $ | | ||||||
Deferred items and other liabilities |
$ | 5,783 | $ | | $ | | ||||||
Non-controlling redeemable preferred interest |
$ | 110 | $ | | $ | | ||||||
Non-controlling equity interest |
$ | 10,635 | $ | | $ | | ||||||
Members capital |
$ | (35,185 | ) | $ | | $ | | |||||
8
9
10
11
12
13
14
15
16
17
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Significant | ||||||||||||||
Identical Assets | Observable | Unobservable | Balance at | |||||||||||||
and Liabilities | Inputs | Inputs | December 31, | |||||||||||||
(in thousands) | (Level 1) | (Level 2) | (Level 3) | 2009 | ||||||||||||
Assets |
||||||||||||||||
Cash and
cash equivalents |
$ | 747 | $ | | $ | | $ | 747 | ||||||||
Restricted cash |
25,369 | | | 25,369 | ||||||||||||
Impaired real
estate debt
investments |
| | 15,473 | 15,473 | ||||||||||||
Real estate
debt
investments
held for sale |
| | 66,311 | 66,311 | ||||||||||||
Available for
sale
securities |
| | 83,977 | 83,977 | ||||||||||||
Liabilities |
||||||||||||||||
Derivative financial
instruments |
$ | | $ | 12,274 | $ | | $ | 12,274 |
Impaired Real | Real Estate Debt | |||||||||||
Available For | Estate Debt | Investments | ||||||||||
Period Ended August 26, 2010 | Sale Securities | Investments | Held for Sale | |||||||||
(in thousands) |
||||||||||||
Fair value, January 1, 2010 |
$ | 83,977 | $ | 15,473 | $ | 66,311 | ||||||
Transfers in/and or out of level 3 |
| | | |||||||||
Included in statement of operations: |
||||||||||||
Net impairment losses recognized in earnings |
(3,874 | ) | | | ||||||||
Provision for loan loss contingencies |
| (4,078 | ) | | ||||||||
Amortization of discount |
637 | 119 | | |||||||||
Unrealized impairment losses |
(5,774 | ) | | | ||||||||
Purchases, issuances and settlements, net |
13,248 | (17 | ) | | ||||||||
Sale of investments |
(1,545 | ) | | | ||||||||
Dissolution adjustment |
(86,669 | ) | (11,497 | ) | (66,311 | ) | ||||||
Fair value, August 26, 2010 |
$ | | $ | | $ | | ||||||
18
Impaired Real | Real Estate Debt | |||||||||||
Available For | Estate Debt | Investments | ||||||||||
Year Ended December 31, 2009 | Sale Securities | Investments | Held for Sale | |||||||||
(in thousands) |
||||||||||||
Fair value, January 1, 2009 |
$ | 118,491 | $ | 65,638 | $ | | ||||||
Transfers in/and or out of level 3 |
| 11,731 | 276,243 | |||||||||
Included in statement of operations: |
||||||||||||
Accretion income on realized losses |
1,071 | | | |||||||||
Impairment losses on real estate debt
investments held for sale |
| | (101,027 | ) | ||||||||
Net impairment losses recognized in earnings |
(16,302 | ) | | | ||||||||
Provision for loan loss contingencies |
| (52,141 | ) | | ||||||||
Amortization of discount |
538 | 170 | | |||||||||
Unrealized impairment losses |
(13,468 | ) | | | ||||||||
Purchases, issuances and settlements, net |
11 | 75 | (4,857 | ) | ||||||||
Sale of investments |
(6,364 | ) | (10,000 | ) | (104,048 | ) | ||||||
Fair value, December 31, 2009 |
$ | 83,977 | $ | 15,473 | $ | 66,311 | ||||||
Real Estate Debt | ||||||||
Investments, | ||||||||
Net of Allowance | ||||||||
December 31, 2009 | Loan Count | |||||||
Whole loans |
50,836 | 4 | ||||||
B-notes |
184,550 | 13 | ||||||
Mezzanine loans |
303,979 | 23 | ||||||
Loan loss allowance |
(86,035 | ) | | |||||
Discounts on loans |
(6,060 | ) | | |||||
Total loans |
$ | 447,270 | 40 | |||||
19
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year |
$ | (55,464 | ) | $ | (26,021 | ) | $ | | ||||
Charge-offs (1) |
3,118 | 17,900 | | |||||||||
Recoveries |
42,421 | | | |||||||||
Valuation allowance |
(111,870 | ) | (51,343 | ) | (26,021 | ) | ||||||
Transfers (2) |
| 4,000 | | |||||||||
Dissolution adjustment |
121,795 | | | |||||||||
Balance at end of year |
$ | | $ | (55,464 | ) | $ | (26,021 | ) | ||||
(1) | The charge-offs of $17,900,000 for the year ended December 31, 2009 represent
allowances for which the Company foreclosed on and the collateral of which was sold or
obtained through foreclosure sale. |
|
(2) | Transfers represent loan allowances on real estate debt investments that were
transferred to real estate loan assets held for sale. |
20
Amortized | Gross Unrealized | Gross Unrealized | ||||||||||||||
December 31, 2009 | Cost (1) | Gains | Losses | Fair Value | ||||||||||||
CMBS |
||||||||||||||||
Rake Bonds |
$ | 60,668 | $ | | $ | (13,804 | ) | $ | 46,864 | |||||||
Pool Bonds |
59,521 | 2,176 | (25,044 | ) | 36,653 | |||||||||||
Total CMBS |
120,189 | 2,176 | (38,848 | ) | 83,517 | |||||||||||
CDO |
460 | | | 460 | ||||||||||||
Total available for
sale securities |
$ | 120,649 | $ | 2,176 | $ | (38,848 | ) | $ | 83,977 | |||||||
(1) | Amortized cost basis includes adjustments made to the cost of an investment for
accretion, amortization, collection of cash, and previous other-than-temporary impairments recognized in earnings. |
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
Gross | Gross | Gross | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
December 31, 2009 | Fair Value | Losses | Fair Value | Losses | Fair Value | Losses | ||||||||||||||||||
CMBS |
||||||||||||||||||||||||
Rake Bonds |
$ | 52 | $ | (986 | ) | $ | 45,231 | $ | (12,819 | ) | $ | 45,283 | $ | (13,805 | ) | |||||||||
Pool Bonds |
4,513 | (3,126 | ) | 20,183 | (21,918 | ) | 24,696 | (25,044 | ) | |||||||||||||||
Total CMBS |
4,565 | (4,112 | ) | 65,414 | (34,737 | ) | 69,979 | (38,849 | ) | |||||||||||||||
CDO |
| | | | | | ||||||||||||||||||
Total available for
sale securities |
$ | 4,565 | $ | (4,112 | ) | $ | 65,414 | $ | (34,737 | ) | $ | 69,979 | $ | (38,849 | ) | |||||||||
21
December 31, 2009 | ||||||||
Amortized | ||||||||
Cost | Fair Value | |||||||
CMBS Rake Bonds |
||||||||
Due within 1 year |
$ | 36,506 | $ | 28,107 | ||||
After 1 but within 5 years |
13,089 | 9,750 | ||||||
After 5 but within 10 years |
11,072 | 9,007 | ||||||
After 10 years |
| | ||||||
Total CMBS Rake Bonds |
60,667 | 46,864 | ||||||
CMBS Pool Bonds |
||||||||
Due within 1 year |
33,736 | 17,277 | ||||||
After 1 but within 5 years |
18,609 | 10,023 | ||||||
After 5 but within 10 years |
7,177 | 9,353 | ||||||
After 10 years |
| | ||||||
Total CMBS Pool Bonds |
59,522 | 36,653 | ||||||
CDO |
||||||||
Due within 1 year |
| | ||||||
After 1 but within 5 years |
| | ||||||
After 5 but within 10 years |
460 | 460 | ||||||
After 10 years |
| | ||||||
Total |
460 | 460 | ||||||
Total available for
sale securities |
$ | 120,649 | $ | 83,977 | ||||
22
| The length of time and the extent to which fair value has been below amortized cost
basis; |
||
| Adverse conditions specifically related to the security, an industry, or a geographic
area; |
||
| The historical and implied volatility of the fair value of the security; |
||
| The payment structure of the debt security; |
||
| Failure of the issuer of the security to make scheduled interest or principal payments; |
||
| Any changes to the rating of the security by the rating agency; and |
||
| Recoveries or additional declines in fair value subsequent to the balance sheet date. |
| Identification and evaluation of investments that have indications of possible
impairment; |
||
| Analysis of individual investments that have fair values less than amortized cost,
including consideration of the length of time the investment has been in an unrealized loss
position and expected recovery period; |
||
| Discussion of evidential matter, including an evaluation of factors or triggers that
could cause individual investments to qualify as having other-than-temporary impairment and
those that would not support other-than-temporary impairment; and |
||
| Documentation of the results of these analyses, as required under business policies. |
2010 | 2009 | |||||||
Impairment losses related to securities which the Company does not intend to
sell or is not more likely than not that it will be required to sell: |
||||||||
Total OTTI losses recognized during the period |
$ | 3,874 | $ | 24,826 | ||||
Less: portion of OTTI loss recognized in other comprehensive loss |
| (13,468 | ) | |||||
Net impairment losses recognized in earnings for securities that the Company
does not intend to sell or is more likely than not that will not be required to sell |
3,874 | 11,358 | ||||||
Plus OTTI Losses recognized in earnings for securities that the Company
intends to sell or is more-likely-than-not will be required to sell |
| 4,944 | ||||||
Total impairment losses recognized in earnings |
$ | 3,874 | $ | 16,302 | ||||
23
Cumulative Other-Than-Temporary Impairment Credit Losses Recognized in Earnings for | ||||||||||||||||||||||||
Available-for-Sale Debt Securities | ||||||||||||||||||||||||
Credit | ||||||||||||||||||||||||
Credit | impairments | |||||||||||||||||||||||
impairments | recognized in | |||||||||||||||||||||||
Beg Balance | recognized in | earnings on | Reductions due | |||||||||||||||||||||
Adjustment to | earnings on | securities that | to sales or | |||||||||||||||||||||
Other | securities not | have been | maturities of | |||||||||||||||||||||
December 31, | Comprehensive | previously | previously | credit impaired | December 31, | |||||||||||||||||||
2008 Balance | Loss | impaired | impaired | securities | 2009 Balance | |||||||||||||||||||
CMBS |
||||||||||||||||||||||||
Rake Bonds |
$ | 10,938 | $ | (9,095 | ) | $ | 689 | $ | 949 | $ | | $ | 3,481 | |||||||||||
Pool Bonds |
45,896 | (15,491 | ) | | 9,705 | (3,009 | ) | 37,101 | ||||||||||||||||
Total CMBS |
56,834 | (24,586 | ) | 689 | 10,654 | (3,009 | ) | 40,582 | ||||||||||||||||
CDO |
27,875 | | | 4,959 | | 32,834 | ||||||||||||||||||
Total |
$ | 84,709 | $ | (24,586 | ) | $ | 689 | $ | 15,613 | $ | (3,009 | ) | $ | 73,416 | ||||||||||
24
December 31, 2009 | ||||||||
Debt Carrying | Collateral Carrying | |||||||
(in thousands) | Vaue | Value (3) | ||||||
Royal Bank of Scotland, PLC, successor in interest to
Greenwich Capital Financial Products, Inc., matures on
February 1, 2012, interest is variable based on 1-month
LIBOR rate plus 1% or 1.23% and 2.04% respectively |
$ | 59,550 | $ | 71,530 | ||||
Royal Bank of Scotland, PLC, successor in interest to
Greenwich Capital Financial Products, Inc., matures on
January 15, 2011, interest is variable based on 1-month
LIBOR rate plus 1% or 1.23% and 1.51% respectively |
3,543 | 6,452 | ||||||
Column Financial Inc., variable interest based on 1-
month LIBOR plus 1%, the rate was 1.47% at December
31, 2008. (1) |
| | ||||||
Column Financial Inc., expiration December 31, 2010,
interest is variable based on 1-month LIBOR plus 0.85%
to 1.35%, the weighted average was 1.27%, and 1.49%,
respectively. (2) |
71,971 | 74,276 | ||||||
Total repurchase agreements |
$ | 135,064 | $ | 152,258 | ||||
(1) | In February 2009, the repurchase agreement was terminated and the asset which was
subject to this repurchase agreement was added to the multiple loan asset repurchase
agreement. The multiple loan asset repurchase agreement was modified to provide that the
interest rate, maturity date and advance rate, with respect to the asset added to the
multiple loan asset repurchase facility, would remain as it was under the specific
repurchase agreement. |
|
(2) | On April 14, 2009, the multiple loan asset repurchase agreement was modified as
discussed above. |
|
(3) | Collateral carrying value equals face value less bond discounts, unrealized gains and
losses and other-than-temporary impairment losses plus bond premiums and unrealized gains. |
25
26
27
28
Interest Rate Derivative | Number of Instruments | Notional | ||||||
Interest Rate Swaps |
2 | $ | 137,887,000 |
29
Liability Derivatives | Balance Sheet | |||||
(in thousands) | Location | Fair Value | ||||
Derivatives designated as hedging
instruments under SFAS 133 |
||||||
Interest Rate Swap |
Other Liabilities | $ | 8,714 | |||
Interest Rate Swap |
Other Liabilities | 3,560 | ||||
Total derivatives designated as hedging
instruments under SFAS 133 |
$ | 12,274 | ||||
(in thousands) | 2010 | 2009 | ||||||
Unrealized losses on cash flow hedges |
$ | (17,762 | ) | $ | (12,274 | ) | ||
Deferred loss on cancellation of interest rate swaps |
(5,201 | ) | (6,203 | ) | ||||
Unrealized gains/(losses) on available-for-sale securities |
(7,603 | ) | (13,377 | ) | ||||
Adjustment for cumulative effect of adopting new accounting pronoucement |
(23,294 | ) | (23,294 | ) | ||||
Dissolution adjustment |
53,860 | | ||||||
$ | | $ | (55,148 | ) | ||||
30
2010 | 2009 | |||||||
Total revenues |
$ | 159 | $ | 332 | ||||
Total expenses |
(422 | ) | (1,291 | ) | ||||
Loss on discontined operations |
(708 | ) | | |||||
Loss from discontinued operations |
$ | (971 | ) | $ | (959 | ) | ||
2010 | 2009 | 2008 | ||||||||||
Base management fee |
$ | 361 | $ | 533 | $ | | ||||||
Employee wages and benefits |
228 | 647 | 1,960 | |||||||||
Total related party fees and expenses paid |
$ | 589 | $ | 1,180 | $ | 1,960 | ||||||
31
32
2*
M`RY`W(&)3H;WF86=`2]$W1EMW41-#7J`CDK0"#>:H^ JB).@@(0`> (B8<'!X1S
MBI"1DI.)#0.4F(0A`%=AB0@3!FHP?WH!,FQB%P*9K:ZOL*U<:&PG"[&O>R8O
M;# +#0G>+-S>$`4>=04./`\<\'_,?10+,`4&0$`6\,9J%@!24'QP/042(+06
MT=T"I80H@`/O5<,J;-[7<0$9-@008-_(0`.<<+4 ]IV<+<[""@``P@`0Y<`&Z&ED;@`%T0P`&P%X42ZLX990C=;<;
MP`(W0@!A(`6\T0$=!JT:H`92X#)/H`8M"QXB<`(&@$^<(@`^\`7T!0 G^)BHN)`PT#$D&);`P#
M`R24EB2/BS@;B@<->W^"EV=/K
MW`L`A80!T.2*!G5Z/0OZ_`O:_0DS)$.C!HE*E?A4X(X"6+!D%6CSP=:`7Q@C
M#.'QRT6"`'MT_/G2808'>"B;O4O)LJ7+ES!CROR&;]VY=#.M";RV,BO^^S!@"ID$?)1)H7"3F;AB\/[9&
M'J*GLJ7+ES"'%4`!QD0F,B7P`&C1*)8`!PV""@UZA@J;.S!$Q%R:B<0#`C?*
M;2'P0"E37R6%G4P9D^75KV##PA3A9DB&3`54Q``@QDA/5@2L5S)X("L5]]
M2Q(H^:(3D^&`FR!R^NK,&V,O5JN+'CQ\&@R&'P]M(>"&825%G0*J[
"T(@#/``X$__L*I_>,B@P*+)0``A
MI`!HXJC#""V*2#QI4"),GQ<9U.3`LF,(@P!WMNS1\@;,!!0H_J"XHL*GN)Z.
M(TN>3+FRRYKE;NJRO&RG-)
M%@P`(N#/'A,*@M#0XTA!@`5Q29,FH>G/`B,]DBSE$4#''F*M&X?&!GJ[]^_@
MP\/$+$ZS.N^>JW47#SY,@P+L(Z^/3[^^_?NQ$*(T'SX]M?GX3;;!'.@$^!*`
M!B:HX((MD1<.?^#Y%PV"#%9HX2L79JCAAM@X"`Z$WTD(#84