EX-99.2 3 a4695912ex992.txt EXHIBIT 99.2 EXHIBIT 99.2 Supplemental Operating and Financial Information Second Quarter 2004 As of and for the three and six months ended June 30, 2004. All dollar amounts shown in this report are unaudited. This Supplemental Operating and Financial Information is not an offer to sell or solicitation to buy any securities of AmeriVest Properties Inc. Any offers to sell or solicitations to buy any securities of AmeriVest Properties Inc. shall be made by means of a prospectus. Table of Contents Corporate Information 1 Financial Information Selected Financial Data 3 Consolidated Statements of Operations 4 Geographic Operating Information - 2004 5 Geographic Operating Information - 2003 6 Non-GAAP Financial Measures 7 Consolidated Balance Sheets 8 Debt Summary 9 Portfolio Information Property Summary 10 Lease Expiration Information 11 Other Property Information 14 Corporate Information Company Overview AmeriVest Properties Inc. is a real estate investment trust (REIT) which owns and operates commercial office buildings in select markets catering to small and medium size businesses. At June 30, 2004, AmeriVest owned 28 properties totaling 2,480,232 square feet located in Colorado, Texas, Arizona and Indiana. The Company's core portfolio (which excludes assets it owns less than 100% and smaller office buildings primarily leased to the State of Texas) included 14 properties totaling 2,198,129 square feet located in metropolitan Denver, Dallas, Phoenix and Indianapolis. Strategy We believe that office space for small to medium size businesses is a large and underserved market. According to data compiled by the Office of Advocacy of the U.S. Small Business Administration in 2001, 89% of all U.S. businesses employed fewer than 20 employees. As a result, we believe that many businesses have office space requirements of no more than 4,000 square feet. Small to medium size businesses often have specific needs and limitations that are different from larger businesses. For example, small and medium size businesses cannot usually afford large corporate staffs to manage office leasing. These businesses have needs similar to larger firms, such as access to cutting edge technology, conference facilities, high quality telecommunications equipment and other amenities, but usually do not have a comparable budget to those firms. Our strategy is to focus on providing an office product targeted to this large market and its unmet needs in a cost effective manner. The key elements of our strategy include: -- Provide a superior, consistent product - We seek to provide a level of amenities to small and medium size businesses in our office properties that usually only larger companies would be able to obtain, such as keyless entry card systems, use of conference rooms with the latest telecommunication and presentation equipment, and the ability to access high speed voice and data service from multiple providers. -- Simplify the leasing process - Our leasing process is designed to meet the unique needs of a small to medium size customer base with limited staffing through our "no hassle" leasing philosophy which reduces the per lease cost for us and the customer. -- Provide a high level of service - With our deliberate focus on small and medium size businesses, we have developed a positive, service-oriented approach specifically tailored for our customer base. -- Target select cities - We target cities that meet specific criteria where we hope to build meaningful multi-property portfolios over the near term. As a result of our focused strategy, we believe that our properties provide office space that is particularly attractive for small and medium size businesses. By executing on our strategy, we believe we have been able to maintain high occupancy rates while still maintaining strong rent per square foot trends in our core markets as compared to the general office market. 1 Directors and Executive Officers Initial Date Name Position as Director ---- -------- ------------ William T. Atkins Chief Executive Officer, Director and Chairman of the Board 1999 Charles K. Knight President, Chief Operating Officer and Director 1999 Kathryn L. Hale Chief Financial Officer and Secretary - John B. Greenman Chief Investment Officer and Vice President - Patrice Derrington Outside Director 2003 Harry P. Gelles Outside Director 2000 Alexander S. Hewitt Director and Vice Chairman 2004 Robert W. Holman, Jr. Lead Outside Director 2001 John A. Labate Outside Director 1995 Jerry J. Tepper Outside Director 2000 Corporate Headquarters Investor Relations 1780 South Bellaire Street Kim P. Boswood Suite 100 (303) 297-1800 x118 Denver, Colorado 80222 kim@amvproperties.com (303) 297-1800 Stock Exchange Ticker American Stock Exchange AMV 2 Financial Information Selected Financial Data
As of and for the three months ended- ------------------------------------- 6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003 --------- --------- ---------- --------- --------- (Amounts in thousands, except share, per share and property data) Operating Data- Real estate operating revenue(1) $11,403 $9,594 $8,669 $6,895 $6,681 General and administrative expenses 984 933 1,171 777 743 G&A as a percentage of revenue 8.6% 9.7% 13.5% 11.3% 11.1% Loss Per Share- Net loss $(548) $(375) $(1,251) $(24) $(1,110) Loss per share - basic (0.02) (0.02) (0.07) 0.00 (0.09) Loss per share - diluted (0.02) (0.02) (0.07) 0.00 (0.09) Funds From Operations (FFO)(2)- FFO $2,796 $1,878 $1,317 $1,667 $358 FFO per share - basic 0.12 0.11 0.08 0.10 0.03 FFO per share - diluted 0.12 0.11 0.07 0.10 0.03 Balance Sheet Data- Net investment in real estate(3) $277,569 $259,921 $220,698 $197,671 $157,661 Total assets 294,876 275,911 240,500 216,245 181,218 Total liabilities 188,824 166,477 170,396 142,834 105,729 Minority interest 1,775 1,836 - - - Total stockholders' equity 104,278 107,598 70,104 73,411 75,489 Common Stock Data- Common shares outstanding 23,928,849 23,859,639 17,401,309 17,375,467 17,348,052 Weighted average shares - basic 23,898,957 17,567,414 17,383,652 17,356,751 12,806,389 Weighted average shares - diluted 24,011,520 17,721,219 17,633,834 17,459,294 12,906,283 Closing share price $5.89 $6.75 $7.18 $6.50 $6.26 Share price range for period (high - low) 6.93 - 5.48 7.64 - 6.40 6.50 - 7.21 6.75 - 6.11 6.65 - 5.85 Dividends declared per share 0.13 0.13 0.13 0.13 0.13 Annualized dividend yield 8.8% 7.7% 7.2% 8.0% 8.3% Market value of common equity $140,941 $161,053 $124,941 $112,941 $108,599 Total liabilities 188,535 166,477 170,396 142,834 105,729 ------------------------------------------------------------ Total market capitalization $329,476 $327,530 $295,337 $255,775 $214,328 ============================================================ Cash Flow Data- Net cash flow from operating activities $2,369 $1,719 $3,265 $2,812 $2,590 Net cash flow from investing activities (8,992) (33,931) (18,859) (16,536) (2,199) Net cash flow from financing activities 7,425 32,761 15,899 6,441 5,306 ------------------------------------------------------------ Net change in cash and cash equivalents $802 $549 $305 $(7,283) $5,697 ============================================================ Property Data- Properties owned 28 27 30 28 27 Rentable square feet 2,480,232 2,365,640 2,222,079 1,891,352 1,563,063 Occupancy 85.1% 84.5% 84.2% 86.8% 89.0%
(1) Excludes the revenues of assets classified as held for sale (Texas Bank Buildings - sold March 16, 2004). (2) See page 7 for a reconciliation of FFO from net loss and a comparison of FFO per share to loss per share, the most directly comparable GAAP measures. FFO is not intended to be a measure of cash flow or liquidity. (3) Excludes the real estate assets of properties classified as held for sale (Texas Bank Buildings - sold March 16, 2004). 3 Consolidated Statements of Operations
For the three For the six months ended months ended June 30, June 30, -------- -------- 2004 2003 2004 2003 ---- ---- ---- ---- Real Estate Operating Revenue Rental revenue $11,402,649 $6,680,723 $20,996,544 $13,229,350 Real Estate Operating Expenses Property operating expenses- Operating expenses 3,105,339 1,660,895 5,911,233 3,209,600 Real estate taxes 1,477,758 762,939 2,715,622 1,514,777 Management fees 17,428 33,297 34,750 67,174 General and administrative expenses 984,265 742,773 1,916,814 1,579,853 Ground rent expense 160,542 - 321,683 - Interest expense 2,831,282 1,781,535 5,553,349 3,506,970 Depreciation and amortization expense 3,445,634 1,414,553 6,222,725 2,742,519 Impairment of investment in real estate - 1,465,932 - 1,465,932 ------------------------------------------------ Total operating expenses 12,022,248 7,861,924 22,676,176 14,086,825 ------------------------------------------------ Loss From Continuing Operations (619,599) (1,181,201) (1,679,632) (857,475) Other Income/(Loss) Interest income 10,893 11,936 26,256 17,753 Equity in loss of affiliate - (13,312) (18,076) (23,914) Minority interest(1) 61,118 - 61,118 - ------------------------------------------------ Total other income/(loss) 72,011 (1,376) 69,298 (6,161) ------------------------------------------------ Loss Before Discontinued Operations (547,588) (1,182,577) (1,610,334) (863,636) Discontinued Operations - 72,526 687,735 158,549 ------------------------------------------------ Net Loss $(547,588)$(1,110,051) $(922,599) $(705,087) ================================================ Loss Per Share Basic $(0.02) $(0.09) $(0.04) $(0.06) ================================================ Diluted $(0.02) $(0.09) $(0.04) $(0.06) ================================================ Weighted Average Common Shares Outstanding Basic 23,898,957 12,806,389 20,733,185 11,958,053 ================================================ Diluted 23,898,957 12,806,389 20,733,185 11,958,053 ================================================
(1) As a result of adopting FIN 46R, "Consolidation of Variable Interest Entities (VIE)", the Company consolidated the operations of an entity management identified as a VIE. The Company recognizes minority interest equal to third party voting interests. 4 Geographic Operating Information - 2004
As of and for the three months ended June 30, 2004- Denver Dallas Phoenix Indianapolis Non-core(1) Corporate Consolidated ------ ------ ------- ------------ -------- --------- ------------ Real estate operating revenue $2,395,182 $3,574,653 $4,369,539 $441,227 $622,048 $- $11,402,649 Real estate operating expenses 1,067,314 1,288,735 1,709,236 178,752 356,488 - 4,600,525 ----------- ---------- ---------- -------- -------- -- ----------- Net operating income 1,327,868 2,285,918 2,660,303 262,475 265,560 - 6,802,124 ----------- ---------- ---------- -------- -------- -- ----------- Percent of total 19.5% 33.6% 39.1% 3.9% 3.9% 0.0% 100.0% Adjustments to arrive at net loss- General and administrative expenses (984,265) Ground rent expense (160,542) Interest expense (2,831,282) Depreciation and amortization expense (3,445,634) Interest income 10,893 Minority interest 61,118 ------------- Total adjustments (7,349,712) ------------- Net loss $(547,588) ============= As of and for the six months ended June 30, 2004- Real estate operating revenue $4,790,442 $6,704,046 $7,604,968 $875,701 $1,021,387 $- $20,996,544 Real estate operating expenses 2,167,707 2,543,461 3,039,148 346,715 564,574 - 8,661,605 ----------- ---------- ---------- -------- -------- -- ----------- Net operating income 2,622,735 4,160,585 4,565,820 528,986 456,813 - 12,334,939 ----------- ---------- ---------- -------- -------- -- ----------- Percent of total 21.3% 33.7% 37.0% 4.3% 3.7% 0.0% 100.0% Adjustments to arrive at net loss- General and administrative expenses (1,916,814) Ground rent expense (321,683) Interest expense (5,553,349) Depreciation and amortization expense (6,222,725) Interest income 26,256 Equity in loss of affiliate (18,076) Minority interest 61,118 Discontinued operations(2) 687,735 ------------- Total adjustments (13,257,538) ------------- Net loss $(922,599) ============= Net investment in real estate $70,873,918 $70,652,862 $112,380,004 $10,245,393 $13,311,644 $105,170 $277,568,991 =========== ========== ============ =========== =========== ======== ============ Properties owned 4 4 5 1 14 - 28 Rentable square feet 556,491 689,777 837,107 114,754 282,103 - 2,480,232 Occupancy 84.9% 88.0% 87.3% 81.5% 73.6% - 85.1%
(1) Includes the Texas State Buildings and Panorama Falls. Due to the adoption of FASB Interpretation No. 46R, the assets and liabilities of Panorama Falls are consolidated with those of AmeriVest effective March 31, 2004 and the real estate assets are reflected in the 'net investment in real estate' balance in the 'non-core' column. Beginning April 1, 2004, the operations of Panorama Falls are consolidated with those of AmeriVest. Prior to April 1, 2004, the investment in Panorama Falls was accounted for under the equity method and AmeriVest's share of the net loss of the entity is reflected above as 'equity in loss of affiliate'. (2) Includes the net operations, including gain on sale, of the Texas Bank Buildings which were sold March 16, 2004. 5 Geographic Operating Information - 2003
As of and for the three months ended June 30, 2003- Denver Dallas Phoenix Indianapolis Non-core(1) Corporate Consolidated ------ ------ ------- ------------ -------- --------- ------------ Real estate operating revenue $2,488,928 $1,924,767 $1,453,659 $409,666 $403,703 - $6,680,723 Real estate operating expenses 962,174 687,282 433,668 137,028 236,979 - 2,457,131 ----------- ---------- ---------- -------- -------- -- ----------- Net operating income 1,526,754 1,237,485 1,019,991 272,638 166,724 - 4,223,592 ----------- ---------- ---------- -------- -------- -- ----------- Percent of total 36.1% 29.3% 24.2% 6.5% 3.9% 0.0% 100.0% Adjustments to arrive at net loss- General and administrative expenses (742,773) Interest expense (1,781,535) Depreciation and amortization expense (1,414,553) Impairment of investment in real estate (1,465,932) Interest income 11,936 Equity in loss of affiliate (13,312) Discontinued operations(2) 72,526 ------------- Total adjustments (5,333,643) ------------- Net loss $(1,110,051) ============= As of and for the six months ended June 30, 2003- Real estate operating revenue $5,103,399 $3,918,141 $2,529,269 $869,656 $808,885 $- $13,229,350 Real estate operating expenses 1,946,375 1,332,200 749,490 296,567 466,919 - 4,791,551 ----------- ---------- ---------- -------- -------- -- ----------- Net operating income 3,157,024 2,585,941 1,779,779 573,089 341,966 - 8,437,799 ----------- ---------- ---------- -------- -------- -- ----------- Percent of total 37.4% 30.6% 21.1% 6.8% 4.1% 0.0% 100.0% Adjustments to arrive at net loss- General and administrative expenses (1,579,853) Interest expense (3,506,970) Depreciation and amortization expense (2,742,519) Impairment of investment in real estate (1,465,932) Interest income 17,753 Equity in loss of affiliate (23,914) Discontinued operations(2) 158,549 ------------- Total adjustments (9,142,886) ------------- Net loss $(705,087) ============= Net investment in real estate $67,469,147 $43,440,170 $30,130,314 $9,652,742 $6,868,430 $99,795 $157,660,598 =========== ========== ============ =========== =========== ======== ============ Properties owned 4 2 2 1 18 - 27 Rentable square feet 556,885 323,224 243,752 96,561 342,641 - 1,563,063 Occupancy 84.1% 96.2% 99.5% 92.0% 81.7% - 89.0%
(1) Includes the Texas State Buildings and Panorama Falls. (2) Includes the net operations, including gain on sale, of the Texas Bank Buildings which were sold March 16, 2004. 6 Non-GAAP Financial Measures Funds from operations (FFO) is a non-GAAP financial measure. We believe FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), to be an appropriate measure of performance for an equity REIT, for reasons, and subject to the qualifications, specified in the paragraph entitled "Non-GAAP Financial Measures" below. The following table reflects the reconciliation of FFO from net loss and a comparison of FFO per share to loss per share, the most directly comparable GAAP measures:
As of and for the three months ended- ------------------------------------- 6/30/2004 3/31/2004 12/31/2003 9/30/2003 6/30/2003 --------- --------- ---------- --------- --------- (Amounts in thousands except share and per share data) Funds From Operations (FFO)- Net loss $(548) $(375) $(1,251) $(24) $(1,110) Depreciation and amortization expense 3,319 2,805 2,546 1,669 1,448 Share of depreciation and amortization expense of unconsolidated affiliate 25 22 22 22 20 Gain on sale - (574) - - - -------------------------------------------------------- FFO $2,796 $1,878 $1,317 $1,667 $358 ======================================================== Loss per share - diluted $(0.02) $(0.02) $(0.07) $0.00 $(0.09) ======================================================== FFO per share - diluted $0.12 $0.11 $0.07 $0.10 $0.03 ======================================================== Common Stock Data- Weighted average shares - diluted 24,011,520 17,721,219 17,633,834 17,459,294 12,906,283
Non-GAAP Financial Measures: Funds from operations (FFO) is a non-GAAP financial measure. FFO is defined as net income or loss, computed in accordance with generally accepted accounting principles (GAAP), excluding gains or losses from sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures. We believe that FFO is helpful to investors as a measure of the performance of an equity REIT because, it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a more meaningful and accurate indication of our performance. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. FFO does not represent cash generated from operating activities determined by GAAP and should not be considered as an alternative to net income or loss (determined in accordance with GAAP) as an indication of our financial performance or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. FFO may include funds that may not be available for our management's discretionary use due to requirements to conserve funds for capital expenditures, debt repayments, property acquisitions and other commitments and uncertainties. 7 Consolidated Balance Sheets
June 30, December 31, 2004 2003 -------- ------------ Assets Investment in real estate- Land 37,607,272 $28,838,214 Buildings and improvements 226,587,118 184,519,890 Furniture, fixtures and equipment 1,144,438 799,730 Tenant improvements 11,161,115 6,144,440 Tenant leasing commissions 2,097,777 1,061,160 Intangible assets 17,657,776 11,468,120 Less: accumulated depreciation and amortization (18,686,505) (12,134,025) --------------- ------------- Net investment in real estate 277,568,991 220,697,529 Cash and cash equivalents 2,828,615 1,477,585 Escrow deposits 8,579,577 5,778,427 Assets - held for sale - 3,196,877 Investment in affiliate - 1,364,032 Due from related party - 3,371,526 Due from affiliate - 262,347 Accounts receivable 798,768 296,377 Deferred rents receivable 2,084,806 1,401,455 Deferred financing costs, net 2,186,199 2,301,043 Prepaid expenses and other assets 829,542 353,264 --------------- ------------- Total assets $294,876,498 $240,500,462 =============== ============= Liabilities Mortgage loans and notes payable $176,637,287 $158,237,661 Liabilities - held for sale - 1,296,049 Accounts payable and accrued expenses 2,796,019 2,736,657 Accrued real estate taxes 3,034,605 3,169,183 Prepaid rents, deferred revenue and security deposits 3,244,960 2,694,335 Dividends payable 3,110,750 2,262,170 --------------- ------------- Total liabilities 188,823,621 170,396,055 --------------- ------------- Minority Interest 1,775,186 - --------------- ------------- Stockholders' Equity Preferred stock, $.001 par value Authorized - 5,000,000 shares Issued and outstanding - none - - Common stock, $.001 par value Authorized - 75,000,000 shares Issued and outstanding - 23,928,849 and 17,401,309 shares, respectively 23,929 17,401 Capital in excess of par value 132,184,673 91,706,371 Distributions in excess of accumulated earnings (27,930,911) (21,619,365) --------------- ------------- Total stockholders' equity 104,277,691 70,104,407 --------------- ------------- Total liabilities and stockholders' equity $294,876,498 $240,500,462 =============== =============
8 Debt Summary
June 30, 2004 December 31, 2003 ------------- ----------------- Maturity Principal Interest Principal Interest Lender Mortgaged Property Date Balance Rate(1) Balance Rate(1) ------ ------------------ ---- --------- -------- --------- -------- Fixed rate- Teachers Insurance and AmeriVest Plaza at Annuity Association Inverness of America 1/10/2006 $14,494,197 7.90% $14,572,888 7.90% Greenwich Capital Parkway Centre II Financial Products Centerra Southwest Gas Building 10/1/2008 38,500,889 5.13% 38,876,849 5.13% Allstate Life Insurance Financial Plaza Company 10/5/2010 24,383,337 5.25% 24,669,760 5.25% Southern Farm Bureau Life Scottsdale Norte Insurance Company 4/1/2011 6,592,835 7.90% 6,625,460 7.90% J. P. Morgan Chase Hackberry View - 1st 9/1/2012 11,488,487 6.57% - - J. P. Morgan Chase Hackberry View - 2nd(2) 9/1/2012 986,279 8.00% - - Teachers Insurance and Sheridan Center Annuity Association Arrowhead of America Fountains Kellogg Building 1/1/2013 29,085,396 7.40% 29,309,686 7.40% Security Life of Denver Keystone Office Insurance Company Park - 1st 5/1/2022 4,281,614 8.00% 4,334,828 8.00% Security Life of Denver Keystone Office Insurance Company Park - 2nd 5/1/2022 480,079 8.63% 485,638 8.63% Transatlantic Capital Texas State Company, LLC Buildings 8/1/2028 5,620,932 7.66% 5,660,436 7.66% ------------ ----- --------- ----- Subtotal $135,913,787 6.42%$124,535,545 6.39% ------------ ----- --------- ----- Variable rate- Fleet National Bank - Chateau Plaza Senior Secured Line of Greenhill Park Credit Camelback Lakes 11/12/2005 $40,650,000 3.91% $18,470,020 3.90% Fleet National Bank - Unsecured 11/12/2005 - - 15,149,725 5.17% Unsecured Line of Credit ------------ ----- --------- ----- Subtotal $40,650,000 3.91% $33,619,745 4.47% ------------ ----- --------- ----- Other notes payable- Lease Capital Corporation Phone system 10/31/2007 $73,500 11.11% $82,371 11.11% ------------ ------ ------- ------ Subtotal $73,500 11.11% $82,371 11.11% ------------ ------ ------- ------ Total mortgage loans and notes payable $176,637,287 5.84% $158,237,661 5.98% ============ ===== ============ ===== Liabilities - held for sale Jefferson Pilot Texas Bank Buildings $- - $1,292,749 9.00% ------------ ------ ---------- ----- Total including mortgage loan included in 'liabilities - held for sale' $176,637,287 5.84% $159,530,410 6.01% ============ ===== ============ =====
Scheduled maturities (for the years ended December 31,)- 2004 $1,119,300 2005 43,113,577 2006 16,674,529 2007 2,587,128 2008 37,348,319 Thereafter 75,794,434 ------------- Total $176,637,287 ============= Cash flow information (for the three months ended June 30, 2004)- Additions $58,224,715 Repayments (40,264,964) Scheduled principal repayments (1,141,306) ------------- Total $16,818,445 ============= (1) Interest only, does not include amortization of deferred financing costs or unused facility fees. (2) The amount recorded reflects a net present value calculation based on a fair market value rate of 8%. The actual loan balance assumed was $697,847 at an interest rate of 15%. 9 (3) Portfolio Information Property Summary
June 30, 2004 December 31, 2003 ------------- ----------------- Building/ Year Rentable Occupancy Average Occupancy Average Location Acquired Area(1) Rate(2) Rent Per SF(3) Rate(2) Rent Per SF(3) --------- -------- -------- --------- ----------- --------- ----------- Same Store- Southwest Gas Building Phoenix, AZ 2003 147,660 86.0% $ 22.20 80.4% $ 22.10 Chateau Plaza Dallas, TX 2002 171,294 97.4% 23.03 100.0% 22.70 Centerra Denver, CO 2002 186,582 82.1% 18.11 72.9% 19.89 Parkway Centre II Plano, TX 2002 151,968 93.3% 20.11 95.4% 20.61 Kellogg Building Littleton, CO 2001 111,580 91.2% 20.80 85.8% 21.04 Arrowhead Fountains Peoria, AZ 2001 96,090 00.0% 21.89 100.0% 21.85 AmeriVest Plaza at Inverness Englewood, CO 2001 118,720 90.6% 22.37 91.3% 23.10 Sheridan Center Denver, CO 2000 139,609 78.6% 16.52 82.7% 16.36 --------- ----- ------ ----- ------ Subtotal 1,123,503 89.4% $20.65 87.8% $20.99 --------- ----- ------ ----- ------ 2003 Acquisitions and Developments- Greenhill Park Addison, TX 2003 251,917 73.0% $ 18.59 76.7% $ 18.84 Scottsdale Norte Scottsdale, AZ 2003 79,233 79.2% 22.86 80.9% 23.16 Financial Plaza Mesa, AZ 2003 310,830 84.2% 23.17 80.5% 23.02 Keystone Office Park Indianapolis, IN 1999/2003 114,754 81.5% 17.58 86.4% 17.71 --------- ----- ------ ----- ------ Subtotal 756,734 79.5% $20.87 80.2% $20.84 --------- ----- ------ ----- ------ 2004 Acquisitions- Hackberry View Irving, TX 2004 114,598 100.0% $ 20.81 N/A N/A Camelback Lakes Phoenix, AZ 2004 203,294 90.2% 21.21 N/A N/A --------- ----- ------ ----- ------ Subtotal 317,892 93.7% $21.05 N/A N/A --------- ----- ------ ----- ------ Joint Ventures- Panorama Falls(4) Englewood, CO 2000 59,561 60.4% $ 19.37 78.0% $ 19.01 --------- ----- ------ ----- ------ Subtotal 59,561 60.4% $19.37 78.0% $19.01 --------- ----- ------ ----- ------ Non-Core- Texas Bank Buildings(5) Texas 1998 N/A N/A N/A 100.0% $ 15.88 Texas State Buildings(6) Texas 1997/1998 222,542 77.1% $ 9.05 76.8% 9.00 ------- ----- ------ ----- ------ Subtotal 222,542 77.1% $9.05 81.7% $10.79 ------- ----- ------ ----- ------ Total 2,480,232 85.1% $19.80 84.2% $19.63 --------- ----- ------ ----- ------
(1) Includes office space but excludes storage, telecommunications and garage space. (2) Includes approximately 67,000 square feet (2.7% of total rentable area) that has been leased but is not yet occupied and approximately 28,000 square feet (1.1% of total rentable area) that is leased but has been vacated. Excludes approximately 29,000 square feet (1.2% of total rentable area) that expired on or about June 30, 2004. (3) Annualized cash basis revenue divided by leased area. (4) 20% of the property is owned by AmeriVest and 80% of the property is owned by one other investor as tenants in common. Beginning March 31, 2004, the balance sheet and results of operations for this joint venture are included in the Company's consolidated financial statements. (5) These buildings were sold March 16, 2004. (6) 11 of 13 buildings are leased primarily to various agencies of the State of Texas. The Clint and Paris, Texas buildings are currently vacant. 10 Lease Expiration Information The following schedules detail the tenant(1) lease expirations for our 100%-owned properties(2) at June 30, 2004 in total and by geographic region: Consolidated Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 54 181,339 $3,232,230 8.0% 2005 105 481,648 10,093,232 25.0% 2006 93 301,168 5,676,298 14.1% 2007 85 375,443 7,565,694 18.8% 2008 42 174,303 3,443,155 8.5% 2009 38 231,573 4,832,726 12.0% 2010 10 194,611 3,592,488 8.9% 2011 6 40,142 745,560 1.9% 2012 2 32,910 749,794 1.9% 2013 - - - - 2014 1 19,798 235,200 0.6% 2015 2 6,120 116,280 0.3% --- --------- ----------- ------ Total 438 2,039,055 $40,282,657 100.0% === ========= =========== ====== Denver Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 29 43,997 $881,687 10.3% 2005 62 141,943 3,052,771 35.6% 2006 41 59,825 1,092,546 12.8% 2007 34 67,481 1,251,054 14.6% 2008 21 69,741 1,314,127 15.3% 2009 13 28,118 508,739 5.9% 2010 - - - - 2011 2 6,744 115,454 1.4% 2012 - - - - 2013 - - - - 2014 1 19,798 235,200 2.7% 2015 2 6,120 116,280 1.4% --- --------- ----------- ------ Total 205 443,767 $8,567,858 100.0% === ========= =========== ====== 11 Lease Expiration Information - continued Phoenix Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 11 29,445 $694,273 4.3% 2005 19 110,111 2,442,907 15.1% 2006 29 117,713 2,671,661 16.5% 2007 31 153,280 3,407,635 21.1% 2008 8 32,266 745,639 4.6% 2009 17 154,844 3,386,427 20.9% 2010 4 89,696 1,889,829 11.7% 2011 1 16,879 388,217 2.4% 2012 1 24,444 546,610 3.4% 2013 - - - - 2014 - - - - 2015 - - - - --- --------- ----------- ------ Total 121 728,678 $16,173,198 100.0% === ========= =========== ====== Dallas Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 7 47,944 $966,278 7.8% 2005 15 184,829 4,120,539 33.4% 2006 10 43,298 902,290 7.3% 2007 16 146,313 2,759,432 22.4% 2008 11 68,916 1,326,283 10.8% 2009 5 39,899 782,451 6.4% 2010 3 53,987 1,125,292 9.1% 2011 1 7,729 139,122 1.1% 2012 1 8,466 203,184 1.7% 2013 - - - - 2014 - - - - 2015 - - - - --- --------- ----------- ------ Total 69 601,381 $12,324,871 100.0% === ========= =========== ====== 12 Lease Expiration Information - continued Indianapolis Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 5 21,924 $380,928 22.9% 2005 7 11,910 211,868 12.7% 2006 9 31,534 576,802 34.7% 2007 4 8,369 147,573 8.9% 2008 2 3,380 57,106 3.4% 2009 3 8,712 155,109 9.3% 2010 1 5,343 93,503 5.6% 2011 1 2,400 40,800 2.5% 2012 - - - - 2013 - - - - 2014 - - - - 2015 - - - - --- --------- ----------- ------ Total 32 93,572 $1,663,689 100.0% === ========= =========== ====== Non-core Number of Square Annual Percentage of Total Year Leases Footage Revenue Annual Revenue ---- --------- ------- ------- ------------------- 2004 2 38,029 $309,064 19.9% 2005 2 32,855 265,147 17.1% 2006 4 48,798 432,999 27.9% 2007 - - - - 2008 - - - - 2009 - - - - 2010 2 45,585 483,864 31.1% 2011 1 6,390 61,967 4.0% 2012 - - - - 2013 - - - - 2014 - - - - 2015 - - - - --- --------- ----------- ------ Total 11 171,657 $1,553,041 100.0% === ========= =========== ====== (1) Excludes Kellogg Executive Suite and month-to-month tenants. (2) Does not include Panorama Falls. 13 Other Property Information The following chart illustrates the geographic distribution of our 100%-owned core properties(1) by square footage at June 30, 2004: [GRAPHIC OMITTED - DATA ONLY] The following table categorizes the leased area of our 100%-owned core properties(1) by our tenant's industry at June 30, 2004: Percentage Industry of Area -------- ---------- Wholesale trade and manufacturing 13.1% Consulting and business services 11.1% Healthcare 9.6% Real estate 9.5% Financial services - advisement and brokerage 8.4% Financial services - insurance 6.9% Legal 6.8% Financial services - mortgage 6.0% Energy 5.7% Computer systems and software 4.6% Travel, entertainment and food service 4.6% Telecommunications 3.8% Other 3.3% Financial services - banking 3.2% Accounting 2.7% Engineering 0.4% Advertising and marketing 0.3% (1) Does not include the Texas State Buildings or Panorama Falls.