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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]For the Fiscal
Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]For the
transition period from _________ to __________
Commission File No. 1-12494
CBL & ASSOCIATES PROPERTIES, INC.
________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 62-1545718
_______________________________ _____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Park Place
6148 Lee Highway
Chattanooga, Tennessee 37421
_______________________________ _____________________
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code:
(423) 855-0001
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of Each Class on which Registered
_______________________________ _____________________
Common Stock, $.01 par New York Stock Exchange
value per share
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed
all Reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
______ ______
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by
non-affiliates of the Registrant was approximately $596,361,906
based on the closing price on the New York Stock Exchange for
such stock on March 24, 1997.
As of March 24, 1997, there were 23,974,348 shares of the
Registrant's Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part II incorporates certain information by reference from the
Registrant's 1996 Annual Report to Shareholders (the "Annual
Report"). With the exception of the sections of the Annual
Report specifically incorporated by reference herein, the Annual
Report is not deemed to be filed as part of this Form 10-K.
Part III incorporates certain information by reference to the
Registrant's definitive proxy statement filed on March 25, 1997
in respect to the Annual Meeting of Stockholders to be held on
May 1, 1997.
FORM 10-K
TABLE OF CONTENTS
Item No. Page
________ _____
PART I
Item 1 Business . . . . . . . . . . . . . . . . . . . . . . 3
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . 13
Item 3 Legal Proceedings. . . . . . . . . . . . . . . . . 32
Item 4 Submission of Matters to a Vote of Security Holders 32
PART II
Item 5 Market for Registrant's Common Equity and Related
Shareholder Matters. . . . . . . . . . . . . . . . 32
Item 6 Selected Financial Data. . . . . . . . . . . . . . 33
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . 33
Item 8 Financial Statements and Supplementary Data. . . . 34
Item 9 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure. . . . . . . . 34
PART III
Item 10 Directors and Executive Officers of the Registrant 34
Item 11 Executive Compensation. . . . . . . . . . . . . . 34
Item 12 Security Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . 34
Item 13 Certain Relationships and Related Transactions. . 34
PART IV
Item 14 Exhibits, Financial Statement Schedules and
Reports on Form 8-K . . . . . . . . . . . . . . . 35
PART I
ITEM 1. BUSINESS.
FORMATION OF THE REIT
CBL & Associates Properties, Inc. (the "Company") was
incorporated on July 13, 1993 under the laws of the State of
Delaware to acquire an interest in substantially all of the real
estate properties owned by CBL & Associates, Inc. and its
affiliates ("CBL") and to provide a public vehicle for the
expansion of CBL's shopping center business. The Company is a
self-managed, self-administered, fully-integrated real estate
company which is engaged in the ownership, operation, marketing,
management, leasing, expansion, development, redevelopment,
acquisition and financing of regional malls and community and
neighborhood centers.
The Company conducts all of its business through CBL &
Associates Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"). To comply with certain technical
requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), the Operating Partnership carries out the Company's
property management and development activities through CBL &
Associates Management, Inc. (the "Management Company").
On November 3, 1993, the Company completed initial public
offerings, inside and outside the United States (the
"Offerings"), of 15,400,000 shares of its common stock, par value
$.01 per share (the "Common Stock"). Simultaneously with the
completion of the Offerings, CBL transferred to the Operating
Partnership substantially all of CBL's interests in its real
estate properties and its management and development operations
in exchange for an aggregate 35.4% limited partner interest in
the Operating Partnership. CBL also acquired an additional 4.9%
limited partner interest in the Operating Partnership for a cash
payment of $24.4 million. Each of the partnership interests in
the Operating Partnership may, at the election of its respective
holder, be exchanged for shares of Common Stock of the Company,
subject to certain limitations imposed by the Code. Following
the Offerings, the Company owned a 59.7% general partner interest
in the Operating Partnership.
The Offerings and the application of proceeds therefrom,
including the Operating Partnership's acquisition of certain
property interests, and the contribution by CBL of property
interests to the Operating Partnership, are referred to herein as
the "Formation."
In December, 1993, CBL exercised its right under the
Operating Partnership's partnership agreement to exchange a 4.7%
limited partner interest in the Operating Partnership for
1,221,744 shares of Common Stock. In October 1994, the Operating
Partnership exercised its option to acquire from CBL the former
Phar-Mor space at Valley Crossing in Hickory, North Carolina for
a value of $3,575,400. The Operating Partnership issued a .5377%
limited partnership interest (190,688 share equivalents) to CBL
in return for the former Phar-Mor space.
In September, 1995, the Company completed a follow-on
offering of 4,163,500 shares of its Common Stock at $20.625 per
share. CBL purchased 150,000 of these shares. The net proceeds
of $80.7 million were used to repay floating rate indebtedness on
the Company's revolving lines of credit.
In August, 1996, the Company exercised its option to acquire
from CBL a parcel of land for the recently constructed Just for
Feet on the periphery of Hamilton Place Mall in Chattanooga,
Tennessee for a value of $780,053. The Operating Partnership
issued a .0798% limited partner interest (34,246 share
equivalents) to CBL in return for the parcel.
After giving effect to the above transactions and at
December 31, 1996, CBL held a 30.97% limited partner interest in
the Operating Partnership, and the Company held a 69.03% general
partner interest in the Operating Partnership. In addition, CBL
held approximately 1.5 million of the outstanding shares of
Common Stock for a total ownership share of 36.01%.
Subsequent to the end of the 1996 year, in January, 1997,
the Company completed a spot offering of 3,000,000 shares of its
Common Stock at $26.125 per share. CBL purchased 55,000 of those
shares as part of the offering. The net proceeds of $74.3
million, were used to repay variable rate indebtedness incurred
in the Company's development and acquisition program.
After giving effect to the above transactions, CBL holds a
28.18% limited partner interest in the Operating Partnership, and
the Company holds a 71.82% general partner interest in the
Operating Partnership. In addition, CBL holds approximately 1.6
million of the outstanding shares of Common Stock for a total
ownership share of 32.95%.
GENERAL
The Company owns interests in a portfolio of properties,
consisting of 18 enclosed regional malls (the "Malls"), of which
three are joint venture investments, eight associated centers
(the "Associated Centers"), each of which is part of a regional
shopping mall complex, and 75 independent community shopping
centers (the "Community Centers").
Additionally, the Company owns one mall, two associated
centers, two power centers, and four community shopping centers
currently under construction (the "Construction Properties").
The Company also owns options to acquire certain shopping center
development sites (the "Development Properties").
The Company also holds mortgages (the "Mortgages") on six
community and neighborhood shopping centers owned by non-CBL
affiliates. The Mortgages were granted in connection with sales
by CBL of certain properties previously developed by CBL. The
Company also owns an interest in a three-story office building in
Chattanooga, Tennessee, a portion of which serves as the
Company's headquarters (the "Office Building"). The Malls,
Associated Centers, Community Centers, Construction Properties,
Development Properties, Mortgages and Office Building are
collectively referred to herein as the "Properties" and
individually as a "Property."
The Company and the Operating Partnership generally own a
100% interest in the Properties. In all but one of the
Properties where the Company and the Operating Partnership own
less than a 100% interest the Operating Partnership is the sole
general partner or managing general partner of the property
partnership which owns such Properties. In one Mall, an
affiliate of the Operating Partnership is a non-managing general
partner.
For a full description of the Properties, see Item 2
"Properties."
The Company's executive offices are located at One Park
Place, 6148 Lee Highway, Chattanooga, Tennessee 37421. The
telephone number at this address is (423) 855-0001.
MANAGEMENT AND OPERATION OF PROPERTIES
MANAGEMENT COMPANY
The Company is self-managed and self-administered. To
comply with certain technical requirements of the Code, the
Operating Partnership carries out the Company's property
management and development activities through the Management
Company.
The Operating Partnership holds 100% of the preferred stock
and 5% of the common stock of the Management Company. The
remaining 95% of the common stock is held by Charles Lebovitz,
his family and his associates. Substantially all of CBL's asset
management, property management and leasing and development
operations, including CBL's executive, property, financial, legal
and administrative personnel, were transferred to the Management
Company as part of the Formation. The Management Company manages
all of the Properties (except for Governor's Square see below)
pursuant to a management agreement that may be terminated at any
time by the Operating Partnership upon 30 days written notice.
In addition, the Management Company manages certain properties
owned by CBL that were not transferred to the Company in the
Formation as well as certain shopping centers owned by non-CBL
affiliates. Through its ownership of the Management Company's
preferred stock, the Operating Partnership enjoys substantially
all of the economic benefits of the Management Company's
business. Pursuant to requirements set forth in the Management
Company's Amended and Restated Certificate of Incorporation, a
majority of the Management Company's board of directors are
required to be independent of CBL. From November 1993 to the
current date, the board of directors of the Management Company
consist of the same individuals as the Company's board of
directors including the four independent directors.
ON-SITE MANAGEMENT
The on-site property management functions at the Malls
include leasing, management, data processing, rent collection,
project bookkeeping, marketing, and promotion. Each Mall, for
itself and its Associated Centers, has an on-site property
manager who oversees the on-site staff and an on-site marketing
director who oversees the marketing program for that mall.
District managers, most of whom are located at the Company's
headquarters, oversee the leasing and operations at a majority of
the Community Centers. The on-site Mall managers are experienced
managers with training in mall management.
Virtually all operating activities are supported by a
computer software system which is designed to provide management
with operating data necessary to make informed business decisions
on a timely basis. During 1994, the Company implemented a new
management information system which included hardware and
software. The system was developed to more efficiently assist
management in efforts to maintain management quality and tenant
relations while minimizing operating expenses. Retail sales
analysis, leasing information, budget controls, accounts
receivable/payable, operating expense variance reports and income
analysis are continually available to management. Management
also has available an information system that facilitates the
development and monitoring of budgets and other relevant
information.
An affiliate of the Management Company also leases certain
equipment, such as furniture, computers and vehicles, to
partnerships that own title to the Properties (the "Property
Partnerships") for use at the Malls. During 1996, security,
maintenance and cleaning services at most of the Malls were
provided by a company (ERMC, L.P.) in which certain executive
officers of the Company had an interest at year end. In
February, 1997, substantially all of the assets of ERMC, L.P.
were sold to a third party not affiliated with CBL or any of the
Company's executive officers.
Management pursues periodic preventative maintenance
programs, which encompass paving, roofing, HVAC and general
improvements to the Properties' common areas. The on-site
property managers oversee all such work in accordance with
approved budgets.
GOVERNOR'S SQUARE
Governor's Square is the only Property in the Company's
portfolio in which the Company is not the sole general partner or
managing general partner. Governor's Square is owned by a
Property Partnership, the managing general partner of which is a
non-CBL affiliate which owns a 47.5% interest in the Mall.
Although the managing general partner of this partnership
controls the timing of distributions of cash flow, the Company's
approval is required for certain major decisions, including
permanent financing, refinancing and sale of all or substantially
all of the partnership's assets. Property management services,
including accounting, auditing, maintenance, promotional
programs, leasing, collection and insurance, are performed by a
property manager affiliated with the non-CBL managing general
partner for which such property manager receives a fee.
EMPLOYEES
The Company, through the Management Company, currently
employs approximately 266 full time and 160 part time persons.
None of these employees is currently represented by any union.
Prior to the Formation, substantially all of the employees were
employed by CBL. The Company does not have any employees other
than its statutory officers.
ENVIRONMENTAL MATTERS
Under various federal, state and local laws and regulations,
a current or previous owner or operator of real estate may be
liable for the costs of removal or remediation of certain
hazardous or toxic substances on such real estate. Such laws
typically impose such liability without regard to whether the
owner or operator knew of, or was responsible for, the presence
of such hazardous or toxic substances. The costs of remediation
or removal of such substances may be substantial, and the
presence of such substances, or the failure to promptly remediate
such substances, may adversely affect the owner's or operator's
ability to sell such real estate or to borrow using such real
estate as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of such substances at the
disposal or treatment facility, regardless of whether such
facility is owned or operated by such person. Certain laws
require abatement or removal of friable and certain non-friable
asbestos-containing materials ("ACMs") in the event of demolition
or certain renovations or remodeling. Certain laws regarding
ACMs require building owners and lessees, among other things, to
notify and train certain employees working in areas known or
presumed to contain ACMs. Certain laws also impose liability for
release of ACMs into the air and third parties may seek recovery
from owners or operators of real properties for personal injury
or property damage associated with ACMs. In connection with its
ownership and operations of the Properties, the Company, the
Operating Partnership or the relevant Property Partnership, as
the case may be, may be potentially liable for such costs or
claims.
All of the Properties, except for Development Property land
options, have been subject to Phase I environmental assessments
or updates of existing Phase I environmental assessments within
approximately the last four years. Such assessments were
intended to evaluate the environmental condition of, and
potential environmental liabilities associated with, the
Properties. The Phase I assessments generally consisted of an
investigation of environmental conditions at the Properties,
including a preliminary investigation of the sites and
identification of publicly known conditions concerning properties
in the vicinity of the sites, limited screening and sampling for
the presence of ACMs, an investigation as to the presence of
polychlorinated biphenyls ("PCBs") and above ground and
underground storage tanks presently or formerly at the sites and
the preparation and issuance of written reports. Where believed
to be warranted, soil samplings or other subsurface
investigations were undertaken. Some of the Properties contain,
or at one time contained, underground storage tanks ("UST's")
used to store heating oil for on-site consumption or petroleum
products or wastes typically related to the auto service or other
operations conducted at such Properties. Certain Properties
contain, or at one time contained dry cleaning establishments
utilizing solvents. Certain adjacent Properties also contain or
contained USTs. The Company, as a result of the Phase I surveys,
has no reason to believe that these conditions have had a
material adverse impact on the Properties. Nevertheless, there
can be no assurance that the Properties have not been adversely
affected by such USTs or dry cleaning establishments or that the
Company would not be responsible for remediating contamination
associated with those conditions. The Phase I assessments
included a limited survey for friable ACMs which revealed the
presence of friable ACMs at a limited number of the Properties,
primarily in the form of pipe insulation and ceiling tiles.
Earlier inspections revealed non-friable ACMs at certain of the
Properties, primarily in the form of mastic adhesive bonding in
floor tiles. At certain Properties, where warranted by the
conditions, the Company has developed and implemented an
operations and maintenance program that establishes operating
procedures with respect to ACMs. The costs associated with the
development and implementation for such programs was not
material. The Company intends to obtain or review environmental
site assessments prior to exercising any Development Property
land options.
None of the environmental assessments conducted to date has
revealed any environmental condition which management believes
would have a significant material adverse effect on the Company's
business, assets or results of operations, nor is management
otherwise aware of any such condition. Nevertheless, it is
possible that these assessments do not reveal all potential
environmental liabilities, that adverse environmental conditions
have arisen subsequent to the performance of the environmental
assessments, or that there are material environmental liabilities
of which management is unaware. Moreover, no assurances can be
given that (i) future laws, ordinances or regulations will not
impose any material environmental liability or (ii) the current
environmental condition of the Properties has not been or will
not be affected by tenants and occupants of the Properties, by
the condition of properties in the vicinity of the Properties or
by third parties unrelated to the Company, the Operating
Partnership or the relevant Property Partnership.
The Company believes that the Properties are in compliance
in all material respects with federal, state and local
ordinances and regulations regarding the handling, discharge and
emission of hazardous or toxic substances. Neither the Company
nor the Operating Partnership has been notified by any
governmental authority, or is otherwise aware, of any material
noncompliance, liability or claim relating to hazardous or toxic
substances in connection with any of its present or former
properties.
The Company has not recorded in its financial statements any
material liability in connection with environmental matters.
INSURANCE
The Operating Partnership carries comprehensive liability,
fire, extended coverage and rental loss insurance covering all
the Properties, with policy specifications and insured limits
customarily carried for similar properties. Management believes
that the Properties are adequately insured in accordance with
industry standards.
THE COMPANY'S STRATEGY FOR GROWTH
Management believes that per share growth in the Company's
Funds from Operations is one of the key factors in enhancing
shareholder value. It is the objective of the Company's
management to achieve growth in Funds from Operations through the
aggressive management of the Company's existing Properties, the
expansion and renovation of existing Properties, the development
of new properties, and select acquisitions. Funds from
Operations can also be affected by external factors, such as
inflation, fluctuations in interest rates or changes in general
economic conditions, which are beyond the control of the
Company's management.
"Funds from Operations" is defined by the Company as net
income (loss) before property depreciation, other non-cash items
(consisting of the effect of straightlining of rents), gains or
losses on sales of real estate and gains or losses on investments
in marketable securities. Funds from Operations also includes
the Company's share of Funds from Operations from unconsolidated
affiliates but minority investors' interests are excluded from
Funds from Operations. The Company complies with the National
Association of Real Estate Investment Trust's ("NAREIT") revised
definition of Funds from Operations by not adding back to income
from operations depreciation and amortization of finance costs
and non-real estate assets. The Company continues to exclude
outparcel sales and the effect of straight-line rents from its
Funds from Operations calculation, even though the revised
definition allows their inclusion. Funds from Operations does
not represent cash flow from operations as defined by generally
accepted accounting principles ("GAAP") and is not necessarily
indicative of cash available to fund all cash flow needs and
should not be considered an alternative to net income (loss) for
purposes of evaluating the Company's operating performance or to
cash flow as a measure of liquidity.
Specifically, the Company has implemented its objective of
growing its Funds from Operations and will continue to do so by:
| Maximizing the cash flow from its existing portfolio of
regional malls, community centers, and other retail
complexes through aggressive leasing, management, and
marketing, including:
an active leasing strategy which seeks to increase
occupancy. At December 31, 1996, the occupancy at
the Stabilized Malls, New Malls, Associated
Centers, and Community Centers was 89.0%, 87.7%,
99.6%, and 97.2%, respectively, as compared to
occupancies of 89.8%, 81.1%, 99.0%, and 96.8%,
respectively, at December 31, 1995;
expanded merchandising, marketing and promotional
activities, with the goal of enhancing tenant
sales and thereby increasing percentage rents.
Mall shop sales per square foot for the year ended
December 31, 1996 were 1.5% higher at the
Stabilized Malls than for the year ended December
31, 1995;
increased base rents as tenant leases expire,
renegotiation of leases and negotiation of
terminations of leases of under performing
retailers. At December 31, 1996 average base
rents per square foot at the Malls, Associated
Centers, and Community Centers was $19.64, $8.59,
and $6.94, respectively, as compared to average
base rents per square foot of $18.72, $8.37, and
$6.66, respectively, at December 31, 1995;
control of operating costs. Occupancy costs as a
percentage of sales at the Malls decreased to
11.5% for the year ended December 31, 1996 as
compared to 12.3% for the year ended December 31,
1995.
| Expanding and renovating existing properties to
maintain their competitive position.
Most of the Malls were designed to allow for expansion
and growth through the addition of new department
stores or other large retail stores as anchors
("Anchors"). Fourteen of the 18 Malls have undergone
expansion or renovation since their opening, and all of
the Malls have been either built or renovated in the
last 10 years or are in the process of being renovated.
Four of the Malls had available Anchor pads at December
31, 1996, two of which are now Dillard stores which
opened in March, 1997. Eighteen existing Anchors at 10
Malls have expansion potential at their existing
stores. During 1996, the Company completed the
renovation of Pemberton Square Mall in Vicksburg,
Mississippi and Twin Peaks Mall in Longmont, Colorado.
The Company plans to renovate and expand Foothills Mall
in Maryville, Tennessee in 1997 and Hamilton Place in
Chattanooga, Tennessee in 1998.
In the community center portfolio, the Company expanded
four Food Lion stores totaling approximately 24,800
square feet in 1996, and one other community center was
renovated. Renovations and expansions are planned for
seven community centers in 1997 as well as a 24,000
square foot expansion for Barnes & Noble.
| Developing new retail properties with profitable
returns on capital, leading to growth for the future.
In 1996, the Company opened one Mall redevelopment and
expansion, two free standing buildings on the periphery
of two Malls and four community centers. Summary
information concerning these properties is set forth
below.
SUMMARY INFORMATION CONCERNING PROPERTIES
OPENED DURING THE YEAR ENDED DECEMBER 31, 1996
Anchor Non-
Name of Center/ Total GLA Anchor Percentage
Location GLA(1) (2) GLA Leased(3) Anchors
MALLS
Westgate Mall 1,100,059 833,643 266,416 85% Belk, Dillards,
Spartanburg, SC(5) J.B. White, JCPenney,
Regal Cinemas, Sears,
Uptons
Just for Feet 15,000 15,000 0 100% Just for Feet
Chattanooga, TN
Barnes & Noble 25,920 25,920 0 100% Barnes & Noble
High Point, NC --------- --------- ---------
Total Malls................. 1,140,979 874,563 0
--------- --------- ---------
COMMUNITY CENTERS
Lowe's Plaza 101,287 101,287 0 100% Lowe's
Adrian, MI(4)
Devonshire Place 104,517 104,517 0 100% Hannaford Bros.
Cary, NC Borders, Kinetix
Kingston Overlook 116,926 116,926 0 100% HomePlace
Knoxville, TN Baby Superstore
Michael's(6)
LaGrange Commons 59,799 44,799 15,000 85% A & P
LaGrange, NY
Chester Square 54,664 54,664 0 100% Hannaford Bros.
Chester, VA(4) --------- --------- ---------
Total Community Centers..... 437,193 422,193 15,000
--------- --------- ---------
TOTAL PROPERTIES GLA........ 1,578,172 1,296,756 281,000
--------- --------- ---------
LESS EXISTING GLA(5)........ 676,030 493,675 182,355
--------- --------- ---------
TOTAL PROPERTIES OPENINGS... 902,142 803,081 99,061
========= ========= =========
(1) Includes total square footage of Anchors
(whether owned or leased by the Anchor) and
mall stores or shops.
(2) Includes total square footage of Anchors
(whether owned or leased by the Anchor).
(3) Percentage leased for Westgate Mall does not
include Anchor GLA. For the community
centers, percentage leased includes leased
Anchor and GLA.
(4) Center sold during 1996.
(5) At Westgate Mall there was existing GLA of
676,030, consisting of Anchor GLA of
493,675 and mall store GLA of 182,355.
(6) Michael's is leased and will open in July, 1997.
The Company currently has one mall, two associated centers, two
power centers, and four community centers under construction.
These properties will add approximately 3,128,000 square feet to
the Company's portfolio and are all scheduled to open during 1997
or early 1998.
SUMMARY INFORMATION CONCERNING CONSTRUCTION PROPERTIES
AS OF MARCH 15, 1997
Ownership
by Company
Anchor Non- Annualized and Percentage
Name of Center/ Total GLA Anchor Base Operating Pre- Projected
Location GLA (1) (2) GLA Rent (3) Partnership Leased(4) Opening Anchors
- ------------------- ---------- --------- ------- ----------- ----------- ---------- ----------- ---------------
MALLS
Bonita Lakes Mall 633,140 449,427 183,713 $ 1,822,000 100% 48% October 1997 Dillards(5),
Meridian, MS McRae's(5),
---------- --------- ------- ------------ JCPenney,
Sears(5),
Goody's
POWER CENTERS
Springhurst Town 808,159 594,159 214,000 $ 2,608,636 100% 80% July 1997/ Meijer(5),
Center June 1998 Target(5),
Louisville, KY Kohls',
Party Source,
Cinemark, Gap
Old Navy, TJ Maxx
Cortlandt Town 769,163 576,816 231,343 6,304,830 100% 83% October 1997/ Home Depot(5),
Center June 1998 HomePlace,
Cortland, NY Wal*Mart,
---------- --------- ------- ------------ Barnes & Noble,
The Wiz, A & P,
United Artist
Total Power
Centers........... 1,577,322 1,170,975 445,343 $ 8,913,466
---------- --------- ------- ------------
ASSOCIATED CENTER
Bonita Lakes 74,000 50,000 24,000 $ 168,200 100% 29% October 1997 Books A Million
Crossing
Meridian, MS
The Terrace 157,923 157,923 0 1,596,875 100% 100% March 1997/ Circuit City(5)(6),
Chattanooga, TN April 1997 HomePlace(6),
Barnes & Noble,
Gap Old Navy,
Staples
---------- --------- ------- ------------
Total Associated
Centers............ 231,923 207,923 24,000 $ 1,765,075
COMMUNITY CENTERS
Massard Crossing 290,717 260,057 30,660 $ 757,748 100% 100% March 1997 Wal*Mart(5),
Fort Smith, AR Goody's,
TJ-Maxx
Salem Crossing 289,305 251,892 37,413 569,168 100% 98% April 1997/ Hannaford Bros.,
Virginia Beach, VA May 1997 Wal*Mart(5)
Northpark Center 62,500 62,500 0 337,500 100% 100% March 1997 Hannaford Bros.
Richmond, VA
Strawbridge Market 43,570 43,570 0 533,732 100% 100% August 1997 Regal Cinema
Place
Virginia Beach, VA
---------- --------- ------- ------------
Total Community
Centers ........... 686,092 618,019 68,073 $ 2,198,148
---------- --------- ------- ------------
Total Construction
Properties......... 3,128,477 2,446,344 721,129 $14,698,689
========== ========= ======= ============
_________________________
( 1) Includes total square footage of Anchors (whether owned or
leased by the Anchor) and mall stores or shops.
( 2) Includes total square footage of Anchors (whether owned or
leased by the Anchor)
( 3) Represents initial base rents from leases executed prior to
March 5, 1997.
( 4) Percentage leased for malls does not include Anchor GLA.
For the community, associated, and power centers percentage leased
includes non-Anchor GLA and leased Anchor GLA.
( 5) Owned by Tenant.
( 6) Circuit City and Home Place were open prior to March 15, 1997
In addition to the Construction Properties, the Company
is pursuing the development of a number of sites which
the Company believes are viable for future development
as malls and community and neighborhood shopping
centers. Regional mall development sites are being
pursued in Alabama, Georgia, and Kansas and community
shopping center sites are being pursued in Alabama,
Florida, Georgia, New York, North Carolina, Tennessee
and Virginia.
In general, the Company seeks out development
opportunities in middle-market trade areas that it
believes are under-serviced by existing retail
facilities, have demonstrated improving demographic
trends or otherwise afford an opportunity for effective
market penetration and competitive presence.
| Acquiring existing retail properties where cash flow
can be enhanced by improved management, leasing,
redevelopment and expansion.
Management believes that an opportunity for growth
exists through the acquisition of shopping centers that
meet the Company's investment criteria and targeted
returns. In general, the Company seeks to acquire
well-located shopping centers in middle-market
geographic areas consistent with management's
experience where management believes significant value
can be created through its development, leasing and
management expertise.
In November, 1996 the Company purchased St. Clair
Square located in Fairview Heights, Illinois, an
approximate 1,044,000 square foot super regional mall
for $86.4 million. St. Clair Square is anchored by
Dillard's, Famous-Barr, JCPenney and Sears and is
currently 97.7% leased. The acquisition was funded by a
$66.0 million acquisition loan with the balance funded
from the Company's credit lines.
In December, 1996, the Company completed the
acquisition of a controlling interest in Foothills
Mall, an approximate 472,000 square foot regional mall
located in Maryville, Tennessee. The Company received a
95% partnership interest in the center in exchange for
extending the term of the mortgage for an additional
five years. The Company had already owned the space
occupied by JCPenney prior to the acquisition.
In January, 1997 the Company purchased Sutton Plaza, a
community center located in Mount Olive, New Jersey
for $5.7 million. The approximate 122,000 square foot
community center is 100% leased and is anchored by A&P
and Ames.
| Strengthening our balance sheet through selective
dispositions of five of our community centers. Summary
information concerning these dispositions is set forth
below.
SUMMARY INFORMATION CONCERNING DISPOSITIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
Name of Total Gross Sales
Center/Location GLA Price Cost Gain on Sale Anchors
- ------------------- --------- ----------- ---------- ------------- -------------
Lowe's Plaza 125,357 $ 8,000 $ 5,877 $ 2,123(1) Lowe's
Benton Harbor, MI
Lowe's Plaza 101,287 7,519 6,328 1,191 Lowe's
Adrian, MI
Hannaford Bros. 63,113 5,624 4,283 1,341 Hannaford Bros.
West Broad, VA
Chester Plaza 54,664 2,792 2,303 489 Hannaford Bros.
Chester, VA
Lakeshore Crossing 123,948 7,435 5,009 2,426 Lowe's
Gainesville, GA --------- ----------- ---------- ------------
468,369 $ 31,370 $ 23,800 $ 7,570
========= =========== ========== ============
(1) Disposition was structured as a like-kind exchange pursuant to Section
1031 of the code.
COMPETITION
There are numerous shopping facilities that compete with the
Properties in attracting retailers to lease space. In addition,
retailers at the Properties face continued competition from
discount shopping centers, outlet malls, wholesale clubs, direct
mail, telemarketing, television shopping networks and shopping
via the Internet. Competition could adversely affect the Company's
revenues and funds available for distribution to shareholders.
QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST
The Company has elected to be taxed as real estate
investment trust under the Code, commencing with its taxable year
ended December 31, 1993, and will seek to maintain such status.
As a qualified real estate investment trust, the Company
generally will not be subject to Federal income tax to the extent
it distributes at least 95% of its real estate investment trust
taxable income to its shareholders. If the Company fails to
qualify as a real estate investment trust in any taxable year,
the Company will be subject to Federal income tax (including any
applicable alternative minimum tax) on its taxable income at
regular corporate rates.
ITEM 2. PROPERTIES.
MALLS
Each of the Malls is an enclosed regional shopping complex.
Each Mall generally has at least three Anchors which own or lease
their stores and numerous Mall Stores, most of which are national
or regional retailers, located along enclosed malls connecting
the Anchors. At most of the Malls, additional freestanding
restaurants and retail stores are located on the periphery of the
Mall complex. These freestanding stores are, in most cases,
owned by their occupants. Seven of the Mall complexes include
one or more Associated Centers.
The total GLA of the 18 Malls is approximately 12.5 million
square feet or an average GLA of approximately 693,000 square
feet per Mall. The Company classifies its regional malls into
two categories - Stabilized Malls which have completed their
initial lease-up and New Malls which are in the initial lease-up
phase. Currently, Oak Hollow Mall in High Point, North Carolina,
Turtle Creek Mall in Hattiesburg, Mississippi, and Westgate Mall
in Spartanburg, South Carolina are characterized as New Malls.
The Stabilized Mall occupancy was 89.0% at December 31, 1996 (94%
including leased Anchor GLA). The Company wholly owns all but
five of its Malls and manages all but one of them.
In the years ended December 31, 1994, 1995 and 1996, Mall
revenues represented approximately 72.0%, 72.5% and 72.8%,
respectively, of total revenues from the Company's Properties.
Stabilized Mall Store occupancy decreased from 89.8% at
December 31, 1995, to 89.0% at December 31, 1996. St. Clair
Square and Foothills Mall, which were acquired during 1996, were
included in the Stabilized Mall category at December 31, 1996. If
such malls had not been included, occupancy would have been 89.7%
in the Stabilized Mall category.
In the years ended December 31, 1994, 1995 and 1996, average
Stabilized Mall Store sales per square foot were approximately
$226, $237 and $240, respectively (computed using a monthly
weighted average). Average Stabilized Mall Store sales per
square foot increased by 1.5% for the year ended December 31,
1996 as compared to the year ended December 31, 1995.
Average base rent per square foot at the Mall Stores
increased from $18.72 at December 31, 1995 to $19.64 at December
31, 1996.
Occupancy costs as a percentage of sales for tenants in the
Stabilized Malls (excluding St. Clair Square and Foothills Mall
which the Company did not own for the entire 1996 year) were
12.2%, 12.3% and 11.7% for the years 1994, 1995, and 1996,
respectively.
The Malls are generally located in middle-markets.
Management believes that the Malls have strong competitive
positions because they generally are the only or largest enclosed
malls within their respective trade areas. Trade areas have been
identified by management based upon a number of sources of
information, including the location of other malls, publicly
available population information, customer surveys, surveys of
customer automobile license plates as well as ZIP codes and
third-party market studies.
The two largest revenue-producing Malls are Hamilton Place
and CoolSprings Galleria. Hamilton Place is located on a
187-acre site in Chattanooga, Tennessee and represented, as of
December 31, 1996, 5.67% of the Properties' total GLA, 6.38% of
total Mall Store GLA and 9.8% of total revenues from the
Company's Properties. CoolSprings Galleria is located on a
148-acre site in metropolitan Nashville, Tennessee and
represented, as of December 31, 1996, 5.6% of the Properties'
total GLA, 6.51% of total Mall Store GLA and 8.92% of total
revenues from the Company's Properties.
Fourteen of the eighteen Malls have undergone an expansion
or remodeling since their opening, and all of the Malls have
either been built or renovated in the last 10 years or are in the
process of being renovated with the exception of Hamilton Place
which is scheduled for renovation in 1998. Four of the Malls
have available Anchor pads providing expansion potential totaling
approximately 358,000 buildable square feet at December 31, 1996.
The Company constructed a Dillard's on two of the available
anchor pads at Twin Peaks Mall and Frontier Mall which opened in
March, 1997 leaving approximately 205,700 buildable square feet.
Eighteen existing Anchors at ten Malls have aggregate expansion
potential at their existing stores of approximately 473,000
buildable square feet.
With the exception of Westgate Mall and St. Clair Square
which were acquired by the Company in March 1995 and November,
1996 respectively, each of the Malls was developed by the
Company. The land underlying the Malls is owned in fee in all
cases, except for Walnut Square, Westgate Mall, and St. Clair
Square, which are each subject to long-term ground leases for all
or a portion of the land underlying these malls.
The table on the following page sets forth certain
information for each of the Malls as of December 31, 1996.
Ownership Mall
by Store Percentage
Year of Company Total Sales Mall
Opening/ and Mall Per Store Fee or
Name of Mall/ Recent Operating Total Store Square GLA Anchor Ground
Location Expansion Partnership GLA(1) GLA(2) Foot(3) Leased(4) Anchors Vacancies Lease
- ------------------ ---------- ----------- --------- --------- ------- --------- ------------- ---------- -------
NEW MALLS
Oak Hollow Mall 1995/N/A 75% 829,194 252,366 $209 86% Goody's, None Fee
High Point, NC JCPenney, Belk-
Beck, Sears,
Dillard's
Turtle Creek Mall 1994/1995 100% 844,668 221,574 243 93% JCPenney, Sears, None Fee
Hattiesburg, MS Dillard's,
Gayfers, Goody's
McRae's
Westgate Mall 1975/1996 100% 1,100,57 276,461 309 85% Belk-Hudson, None Fee/
Spartanburg, SC --------- ------- --- JCPenney, Ground
Dillard's, Sears, Lease(5)
Upton's, JB White
Total New Malls 2,774,437 750,401 87%
========= ======= ===
STABILIZED MALLS
College Square 1988/1993 100% 460,463 157,594 $206 82% JCPenney, Sears, None Fee
Morristown, TN Wal*Mart, Goody's,
Proffitt's
CoolSprings Galleria 1991/1994 100% 1,130,597 375,582 264 90% Castner-Knott, None Fee
Cheyenne, WY Dillard's, Sears,
JCPenney, Parisian
Foothills Mall 1983(6)/N/A 95% 472,220 175,524 180 69% Sears, None Fee
Maryville, TN JCPenney(7),
Proffitt's,
Proffitt's II
Frontier Mall 1981/1983 100% 438,004 202,417 189 86% Fashion Bar(8), None(8) Fee
Cheyenne, WY JCPenney,
Joslins, Sears
Georgia Square 1981/N/A 100% 680,135 258,581 217 92% Belk, JCPenney, None Fee
Athens, GA Macy's, Sears
Governor's Square 1986/1994 48% 692,320 271,319 222 94% JCPenney, Parks- None Fee
Clarksville, TN Belk, Sears
Dillard's, Goody's
Hamilton Place 1987/1992 90% 1,159,636 367,988 331 97% Belk, Parisian, None Fee
Chattanooga, TN Proffitt's I,
Proffitt's II,
Sears, JCPenney
Lakeshore Mall 1992/N/A 100% 408,534 153,053 193 81% Kmart, Belk- None Fee
Sebring, FL Lindsey, JCPenney,
Beall's (9)
Madison Square 1984/1985 50% 933,845 300,025 283 96% Castner Knott, None Fee
Huntsville, AL JCPenney, McRae's,
Parisian, Sears
Pemberton Square 1985/1990 100% 353,300 135,065 185 82% JCPenney, None Fee
Vicksburg, MS McRae's,
Wal*Mart, Goody's
Plaza Del Sol 1979/1990 51% 245,685 89,504 152 99% Beall Bros.(9), None Fee
Del Rio, TX JCPenney, Kmart
Post Oak Mall 1982/1985 100% 776,823 318,642 228 84% Beall Bros.(9), None Fee
College Station, TX Dillard's,
Foley's, Service
Merchandise,
Sears, JCPenney
St. Clair Square 1974(10)/N/A 100% 1,044,599 315,656 341 94% Famous Barr, None Fee/
Fairview Heights, IL Sears, JCPenney, Ground
Dillard's Lease(11)
Twin Peaks Mall 1985/1987 100% 448,685 202,197 170 81% JCPenney(12), None(12) Fee
Longmont, CO Joslins, Sears
Walnut Square 1980/1992 100% 450,385 171,192 181 96% Belk, JCPenney, None Ground
Dalton, GA --------- --------- ---- ---- Proffitt's, Sears, Lease(13)
Goody's
TOTAL STABILIZED MALLS 9,695,231 3,494,348 $240 89%
========= ========= ==== ====
(1) Includes the total square footage of the Anchors (whether
owned or leased by the Anchor) and Mall Stores. Does not
include future expansion areas.
(2) Does not include Anchors.
(3) Totals represent weighted averages.
(4) Includes tenants paying rent for executed leases as of
December 31, 1996.
(5) The Company is the lessee under several ground leases
for approximately 53% of the underlying land. The leases
extend through October 31, 2084, including six ten-year
renewal options. Rental amount is $130,000 per year.
In addition to base rent, the landlord receives 20% of
the percentage rents collected. The Company has a right
of first refusal to purchase the fee.
(6) Originally opened in 1983 and controlling interest acquired
by the Company in December 1996.
(7) A lease with Goody's was executed and they opened in March, 1997.
(8) Fashion Bar's lease expired January 31, 1997 and is
currently vacant. A new anchor Dillard's opened in March,
1997.
(9) Beall Bros. operating in Texas is unrelated to Beall's
operating in Florida.
(10) Originally opened in 1974, last renovation completed in
1994, and acquired by the Company in November, 1996.
(11) The Company is the lessee under a ground lease for 20 acres
which extends through January 31, 2073, including 14
five-year renewal options and one four-year renewal option.
Rental amount is $40,000 per year. In addition to base
rent, the landlord receives .25% of Dillard's sales in
excess of $16,200,000.
(12) An additional anchor Dillard's opened in March, 1997.
(13) The Company is the lessee under several ground leases which
extend through March 14, 2078, including six ten-year
renewal options and one eight-year renewal option. Rental
amount is $149,450 per year. In addition to base rent, the
landlord receives 20% of the percentage rents collected.
The Company has a right of first refusal to purchase the
fee.
ANCHORS. Anchors are a critical factor in a Mall's
success because of the public's identification with a property
typically focuses on its Anchors. Mall Anchors generally are
department stores whose merchandise appeals to a broad range of
shoppers. Although the Malls derive a smaller percentage of
their operating income from Anchor stores than from Mall Stores,
strong Anchors play an important part in generating customer
traffic and making the Malls desirable locations for Mall Store
tenants.
Anchors either own their stores together with the land
under them and sometimes with adjacent parking areas, or enter
into long-term leases with respect to their stores at rental
rates that are significantly lower than the rents charged to
tenants of Mall Stores. Anchors which lease their stores account
for approximately 12.0% of the total revenues from the Company's
Properties. Each Anchor which owns its own store has entered
into a reciprocal easement agreement with the Company covering,
among other things, operating covenants, reciprocal easements,
property operations, initial construction and future expansions.
The Malls have a total of 84 Anchors. No Anchor
Stores at any of the Malls were vacant as of December 31, 1996.
The Fashion Bar lease at Cheyenne, Wyoming, expired January 31,
1997 and is currently vacant . The following table indicates all
Mall Anchors and sets forth the aggregate number of square feet
owned or leased by Anchors in the Malls as of December 31, 1996.
Mall Anchor Summary Information
GLA GLA Total
Number Owned Leased Occupied
of Anchor by by by
Name Stores Anchor Anchor Anchor(1)
- ----------------------- --------- ---------- ---------- ----------
JCPenney............... 18 424,471 1,080,335 1,504,806
Sears.................. 15 987,843 651,466 1,639,309
Proffitt's
Proffitt's...... 6 492,654 0 492,654
McRae's........ 3 283,559 0 283,559
Parisian....... 3 207,520 133,000 340,520
--------- ---------- ---------- ----------
Subtotal..... 12 983,733 133,000 1,116,733
Dillard's.............. 7 846,350 169,504 1,015,854
Belk
Belk........... 4 0 457,888 457,888
Belk-Lindsey... 1 0 61,029 61,029
Belk-Hudson.... 1 0 152,890 152,890
Parks-Belk..... 1 0 122,367 122,367
-------- ---------- ---------- ----------
Subtotal..... 7 0 794,174 794,174
Mercantile Stores
Castner Knott.. 2 326,004 30,000 356,004
J.B. White..... 1 150,000 0 150,000
Gayfers........ 1 127,800 0 127,800
Joslins........ 2 152,914 2,500 155,414
-------- ---------- ---------- ----------
Subtotal..... 6 756,718 32,500 789,218
The May Company
Foley's........ 1 103,888 0 103,888
Famous Barr.... 1 0 236,489 236,489
-------- ---------- ---------- ----------
Subtotal..... 2 103,888 236,489 340,377
Wal*Mart............... 2 0 214,653 214,653
Goody's................ 6 0 190,795 190,795
Kmart.................. 2 0 173,940 173,940
Macy's................. 1 115,623 0 115,623
Uptons................. 1 0 69,993 69,993
Beall Bros. (Texas).... 2 0 61,916 61,916
Beall's (Florida)...... 1 0 45,844 45,844
Fashion Bar, Inc....... 1 0 24,750 24,750
Service Merchandise.... 1 0 40,804 40,804
-------- ----------- --------- ----------
TOTAL.......... 84 4,218,626 3,920,163 8,138,789
======== =========== ========= ==========
(1) Includes all square footage owned by or leased to such
Anchor including TBA (tire, battery and automotive)
facilities and storage square footage.
(2) Proffitt's occupies two Anchor spaces at Foothills Mall and
three at Hamilton Place Mall.
MALL STORES. The Malls have approximately 1,492 Mall
Stores. National or regional chains (excluding individually
franchised stores) lease approximately 81.52% of the occupied
Mall Store GLA. Although Mall Stores occupy only 34.1% of total
Mall GLA, for the year ended December 31, 1996, the Malls derived
approximately 88.0% of their revenue from Mall Stores.
Among the companies with the largest representation
among Mall Stores are: The Limited Stores, Inc./Intimate Brands
(The Limited, Limited Too, Express, Lerner New York, Lane Bryant,
Structure, Victoria Secret, and Bath and Body Works) and
Woolworth Corporation (Footlocker, Lady Footlocker, Kinney Shoes,
Champs Sports Stores, Afterthoughts Boutique and San Francisco
Music Box). As of December 31, 1996, The Limited Stores,
Inc.'s/Intimate Brands 65 stores accounted for 10.9% of total
leased GLA and 8.37% of total revenues from the Company's
Properties. No single Mall Store retailer accounted for more
than 11.0% of total leased GLA and no single Mall Store retailer
accounted for more than 8.37% of total revenues from the
Company's Properties.
The following table sets forth certain information for
executed renewal leases with current tenants or leases of
previously at the Malls during the year ended December 31, 1996.
Prior Lease New Lease Increase Increase
Total Base and Initial Year Per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
of leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ----------- -------- ----------------- ----------------- --------- ---------- ---------
178 372,328 $16.20 $17.92 $1.71 $18.32 $2.12
The following table sets forth the total Mall Store
GLA, the total square footage of leased Mall Store GLA, the
percentage of Mall Store GLA leased, the average base rent per
square foot of Mall Store GLA and average Mall Store sales per
square foot as of the end of each of the past five years.
STABILIZED MALL STORE SUMMARY INFORMATION
Total Percentage Average Average Mall
Total Mall Store of Mall Store Base Rent Store Sales
At Mall Store Leased GLA per Square per Square
December 31, GLA GLA Leased (1) Foot (2) Foot (3)
- -------------------- ------------- ------------ --------------- ------------- -------------
1992................ 2,563,308 2,172,979 84.8% $15.67 $205
1993................ 2,576,047 2,268,790 88.1 16.12 217
1994................ 2,576,047 2,284,987 88.7 16.55 226
1995................ 3,003,334 2,697,969 89.8 18.28 237
1996................ 3,452,997 3,073,190 89.0 19.03 240
(1) Mall Store occupancy includes tenants with executed leases
who are paying rent.
(2) Average base rent per square foot is based on Mall Store GLA
occupied as of the last day of the indicated period for the
preceding twelve-month period.
(3) Calculated for the preceding twelve-month period.
LEASE EXPIRATIONS. The following table shows the
scheduled lease expirations for the Malls (assuming that none of
the tenants exercise renewal options) for the year ending
December 31, 1997 and for the next nine years for the Mall
Stores.
MALL LEASE EXPIRATION
Percentage of Total
Approximate Represented by
Annualized Mall Store Expiring Leases
Number of Base Rent GLA of ------------------------------
Year Ending Leases of Expiring Expiring Annualized Leased Mall
December 31, Expiring Leases* Leases Base Rent Store GLA
- -------------------- ------------- ------------ --------------- ------------- --------------
1997................ 252 $7,027,648 351,970 10.21% 9.63%
1998................ 156 4,982,897 269,193 7.24 7.36
1999................ 155 5,024,921 255,451 7.30 6.99
2000................ 146 5,084,560 319,525 7.39 8.74
2001................ 146 6,052,840 306,069 8.79 8.37
2002................ 126 5,713,431 268,391 8.30 7.34
2003................ 109 4,992,322 248,069 7.25 6.79
2004................ 126 5,572,033 248,351 8.09 6.79
2005................ 145 7,591,693 355,712 11.03 9.73
2006................ 66 5,471,840 272,766 7.95 7.46
* Total annualized base rent for all leases executed as of
December 31, 1996 includes rent for space that is leased but
not yet occupied but excludes (i) percentage rents, (ii)
additional payments by tenants for common area maintenance,
real estate taxes and other expense reimbursements and (iii)
contractual rent escalations and cost of living increases
due after December 31, 1996.
COST OF OCCUPANCY. Management believes that in order to
maximize the Company's Funds from Operations, tenants in Mall
Stores must be able to operate profitably. A major factor
contributing to tenant profitability is the tenant's cost of
occupancy.
The following table summarizes for Stabilized Mall Store
tenants the occupancy costs under their leases as a percentage of
total Mall Store sales for the last three years.
For the Year Ended
December 31, (1)
---------------------------------
1994 1995 1996
--------- --------- ---------
Mall Store sales (in thousands)(2)....... $422,499 $526,107 $515,121
Minimum rents............................ 8.7% 8.6% 7.9%
Percentage rents......................... 0.4 0.5 0.3
Expense recoveries....................... 3.1 3.2 3.3
--------- --------- ---------
Mall tenant occupancy costs.............. 12.2% 12.3% 11.5%
- --------------------
(1) Excludes Malls not open for full reporting period.
(2) Consistent with industry practice, sales are based on
reports by retailers (excluding theaters) leasing Mall Store
GLA and occupying space for the reporting period.
Represents 100% of sales for these Malls. In certain cases,
the Company and the Operating Partnership will own less than
100% interest in these Malls.
(3) Represents real estate tax and common area maintenance
charges.
At December 31, 1996 the Company had investments in three
malls in joint ventures with third parties, all of which are
reflected using the equity method of accounting. The Company's
investment in Brownwood Associates (Heartland Mall in Brownwood,
Texas) was transferred to the lender in April, 1995. The
effect of this transfer on the financial statements was not
material. Condensed combined results of operations for the
unconsolidated affiliates are presented in the following table.
Total for the Year Company's Share for the Year
Ended Ended
December 31, December 31,
--------------------------- ---------------------------
(dollars in thousands) 1996 1995 1996 1995
------------ ------------ ------------ ------------
Revenues......................... $ 21,014 $ 20,729 $ 10,318 $ 10,186
Depreciation & Amortization...... 2,592 2,583 1,268 1,264
Interest Expense................. 8,278 8,709 4,061 4,273
Other Operating Expenses......... 6,389 6,462 3,159 3,199
------------ ------------ ------------ ------------
Net Income Before
Extraordinary Item............. 3,755 2,975 1,830 1,450
Extraordinary Item............... 1,727 0 820 0
------------ ------------ ------------ ------------
Income After Extraordinary Item.. $ 2,028 $ 2,975 $ 1,010 $ 1,450
------------ ------------ ------------ ------------
ASSOCIATED CENTERS
The eight Associated Centers are each part of a Mall complex
and generally have one or two Anchor tenants and various smaller
tenants. Anchor tenants in these centers include such retailers
as Service Merchandise, Target, Toys "R" Us, and TJ Maxx, which
are category dominant retailers that benefit from the regional
draw of the Malls. The Associated Centers also increase the draw
to the total Mall complex.
Total leasable GLA of the eight Associated Centers is
approximately 0.5 million square feet, including Anchors, or an
average of approximately 62,000 square feet per center. As of
December 31, 1996, 99.6% of total leasable GLA at the Associated
Centers was occupied.
In the years ended December 31, 1994, 1995, and 1996,
revenues from the Associated Centers represented approximately
3.9%, 3.5% and 3.3%, respectively, of total revenues from the
Company's Properties.
In the years ended December 31, 1994, 1995 and 1996, average
tenant sales per square foot at the Associated Centers were
approximately $214, $215 and $207, respectively.
Average base rent per square foot at the Associated Centers
increased from $8.37 at December 31, 1995 to $8.59 at December
31, 1996.
Each of the Associated Centers was developed by the Company.
All of the land underlying the Associated Centers is owned in
fee.
LEASE EXPIRATIONS. The following table shows for the
Associated Centers (assuming that none of the tenants exercise
renewal options) the scheduled lease expirations for the year
ending December 31, 1997 and for the next nine years.
ASSOCIATED CENTER LEASE EXPIRATION
Percentage of Total
Approximate Represented by
Annualized Mall Store Expiring Leases
Number of Base Rent GLA of ------------------------------
Year Ending Leases of Expiring Expiring Annualized Leased Mall
December 31, Expiring Leases* Leases Base Rent Store GLA
- -------------------- ------------- ------------ --------------- ------------- --------------
1997................ 14 $ 315,782 32,085 8.07% 4.35%
1998................ 10 239,759 24,448 6.13 3.32
1999................ 24 581,939 45,582 14.87 6.19
2000................ 9 451,720 57,898 11.55 7.86
2001................ 5 92,553 5,050 2.37 0.69
2002................ 2 186,000 28,757 4.75 3.90
2003................ 2 279,810 33,903 7.15 4.60
2004................ 3 68,296 121,139 1.75 16.44
2005................ 5 422,879 50,404 10.81 6.84
2006................ 3 518,864 91,660 13.26 12.44
* Total annualized base rent for all leases executed as of
December 31, 1996 includes 12 months of rent for space that
is newly leased but not yet occupied but excludes (i)
percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other
expenses reimbursements and (iii) contractual rent
escalations and cost of living increases due after December
31, 1996.
The following table sets forth certain information for
executed renewal leases with current tenants or leases
of previously occupied space with new tenants at the
Associated Centers during the year ending December 31, 1996.
Prior Lease New Lease Increase Increase
Total Base and Initial Year Per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
of leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ----------- -------- ----------------- ----------------- --------- ---------- ---------
13 43,223 $10.91 $11.46 $0.56 $12.05 $1.14
The following table sets forth certain information for each of the
Associated Centers as of December 31, 1996:
Ownership
by
Year of Company
Opening/ and Total Percentage
Name of Mall/ Recent Operating Total Leasable GLA
Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors
- --------------------- ----------- ------------ ---------- ----------- ----------- ------------------------
CoolSprings Crossing.. 1992 100% 340,596 40,513 100% Target,
Nashville, TN Service Merchandise,
Toys "R" Us, Uptons,
Carmike Cinemas
Foothills Plaza....... 1983/1988 100% 204,400(4) 94,400(4) 97.9%(4) Goody's(5), Food Lion,
Maryville, TN Eckerd(6), Carmike
Cinemas
Frontier Square....... 1985 100% 161,615 16,615 100% Dan's County Market,
Cheyenne, WY Target
Georgia Square Plaza.. 1984 100% 15,393 15,393 100% General Cinema
Athens, GA
Hamilton Corner 1990 90% 88,298 88,298 100% Michael's, Goody's,
Chattanooga, TN Fresh Market
Hamilton Crossing..... 1987/1994 92% 171,370 78,257 100% Service Merchandise,
Chattanooga, TN Toys "R" Us, TJ Maxx
Madison Plaza......... 1984(7) 75% 153,085 98,690 100% Food World, TJ Maxx,
Huntsville, AL Service Merchandise
Pemberton Plaza....... 1986 100% 65,918 14,972 100% Kroger
Vicksburg, MS
---------- ----------- -----------
TOTAL ASSOCIATED
CENTERS........... 1,200,675 447,138 99%
========== =========== ===========
(1) Includes the total square footage of the Anchors (whether
owned or leased by the Anchor) and shops. Does not include
future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants paying rent on executed leases on
December 31, 1996. Calculation includes leased
Anchors.
(4) Total GLA includes and Total Leasable GLA and
Percentage GLA Leased exclude a vacant former Hills
Department Store (80,000 square feet of GLA), which is
owned by senior management of the Company. The Company
has a ten-year option (with approximately seven years
remaining) to acquire this property for a fixed
acquisition price of $3,800,000. Carmike Cinemas is
subject to a ground lease (30,000 square feet of GLA).
(5) Goody's lease was terminated in March 1997 to allow them to
move into Foothills Mall.
(6) Eckerd has closed its store but is continuing to meet its
financial obligations under its lease.
(7) Center was renovated during 1995.
COMMUNITY CENTERS
In addition to Mall development, the Company's development
activities focus on Community Center projects. Community Centers
pose fewer development risks than Malls because they have shorter
development timetables and lower up-front costs. Community
Centers also afford the Company the opportunity to meet the needs
of retailers for whom a "convenience" type of location is more
appropriate and the needs of customers whose trade areas cannot
support a regional mall.
The Company's Community Center developments in the 1980's
were generally anchored by supermarkets, and, in certain cases,
by drug stores. Management's current focus has expanded to
include the development of larger centers, anchored by mass
merchandisers and department stores, while continuing the
development of smaller centers anchored by supermarkets and drug
stores. Recently completed Community Centers include centers in
Adrian, Michigan; Cary, North Carolina; LaGrange, New York;
Knoxville, Tennessee; and Chester, Virginia. Anchors at these
new centers include, Lowe's Home Improvement, Hannaford Brothers,
A&P, and HomePlace. The Community Centers in Adrian, Michigan
and Chester, Virginia were sold by the Company in 1996. See
"Summary Information Concerning Dispositions for the Year ended
December 31, 1996".
Community Centers range in size from 25,000 square feet to
in excess of 286,000 square feet. Anchors in Community Centers
generally lease their store space and occupy 60-85% of a center's
GLA. The number of stores in a Community Center ranges up to
sixteen with an average of seven stores per center.
Total GLA of the 75 Community Centers is approximately 6.2
million square feet, or an average of approximately 84,000 square
feet per center. As of December 31, 1996, 97.2% of total
leasable GLA at the Community Centers was leased.
In the years ended December 31, 1994, 1995 and 1996,
revenues from the Community Centers represented approximately
21.0%, 21.2% and 21.4%, respectively, of total revenues from the
Company's Properties.
Occupancy at the Community Centers increased from 96.8% at
December 31, 1995 to 97.2% at December 31, 1996.
Average base rent per square foot at the Community Centers
increased from $6.66 at December 31, 1995, to $6.94 at December
31, 1996.
As of December 31, 1996, Food Lion, a major regional
supermarket operator with headquarters in North Carolina
served as an anchor tenant in 37 of the Company's Community
Centers and in one Associated Center. For the year ended
December 31, 1996, Food Lion accounted for approximately 5.01% of
the revenues generated by the Company's Properties.
With the exception of Suburban Plaza and Sutton Plaza, which
were acquired by the Company in March, 1995 and January, 1997
respectively, each of the Community Centers was developed by the
Company.
The following table summarizes the percentage of total
leasable GLA leased, average base rent per square foot (excluding
percentage rent) and tenant sales per square foot at the
Community Centers for each of the last five years.
COMMUNITY CENTER SUMMARY INFORMATION
Average
Percentage Base Rent Tenant
Year Ended GLA Per Square Sales Per
December 31, Leased (1) Foot (2) Square Foot (3)
- --------------------------- ----------- ---------- ---------------
1992...................... 94.1% $ 6.10 $ 206
1993...................... 95.0 6.44 205
1994...................... 96.5 6.64 200
1995...................... 96.8 6.66 202
1996...................... 97.2 6.94 210
______________________
(1) Percentage leased includes tenants who have executed
leases and are paying rent as of the specified date.
(2) Average base rent per square foot is based on GLA occupied
as of the last day of the indicated period.
(3) Consistent with industry practice, sales are based on
reports by retailers (excluding theaters) leasing GLA and
occupying space for the 12 months ending on the last day
of the indicated period.
LEASE EXPIRATIONS. The following table shows the scheduled
lease expirations for the Community Centers (assuming that none of
the tenants exercise renewal options) for the year ending December
31, 1997, and for the next nine years.
COMMUNITY CENTER LEASE EXPIRATION
Percentage of Total
Represented by
Annualized Approximate Expiring Leases
Number of Base Rent GLA of ------------------------------
Year Ending Leases of Expiring Expiring Annualized Leased Mall
December 31, Expiring Leases* Leases Base Rent Store GLA
- -------------------- ------------- ------------ --------------- ------------- --------------
1997................ 95 $1,446,159 238,768 5.82% 6.16%
1998................ 108 1,648,039 286,200 6.63 7.38
1999................ 73 1,488,103 257,656 5.99 6.64
2000................ 34 1,041,314 176,745 4.19 4.56
2001................ 51 1,332,043 155,961 5.36 4.02
2002................ 18 568,140 77,320 2.29 1.99
2003................ 6 326,844 43,296 1.32 1.12
2004................ 12 541,875 87,032 2.18 2.24
2005................ 12 1,095,879 250,172 4.41 6.45
2006................ 12 913,905 138,831 3.68 3.58
_______________________
* Total annualized base rent for all leases executed as of
December 31, 1996 includes 12 months of rent for space that
is newly leased but not yet occupied but excludes (i)
percentage rents, (ii) additional payments by tenants for
common area maintenance, real estate taxes and other
expenses reimbursements and (iii) contractual rent
escalations and cost of living increases for periods after
December 31, 1996.
The following table sets forth certain information for
executed renewal leases of previously occupied space with new
tenants at the Community Centers during the year ending
December 31, 1996.
Prior Lease New Lease Increase Increase
Total Base and Initial Year Per New Lease Per
Number Square Percentage Rent Base Rent Square Average Square
of leases Feet per Square Foot per Square Foot Foot Base Rent Foot
- ----------- -------- ----------------- ----------------- --------- ---------- ---------
158 403,489 $6.80 $6.69 $(0.11) $6.79 $(0.01)
The following table sets forth certain information regarding
the Community Centers as of December 31, 1996 except for Sutton Plaza
which was acquired in January, 1997.
Year of Ownership
Opening/ By Company Sq Ft
Name Of Most And Total Percentage of Fee or Number
Community Center Resent Operating Total Leasable GLA Anchor Ground of
/Location Expansion Partnership GLA(1) GLA(2) Leased(3) Anchors Vacancies Lease Stores
- ----------------- --------- ----------- ------- --------- ----------- ------------------ ---------- ------- ------
Anderson Plaza 1983/1994 100% 46,258 46,258 100% Food Lion, Eckerd None Fee 4
Greenwood, SC
Bartow Village 1990 100% 40,520 40,520 98% Food Lion, Family Dollar None Fee 4
Bartow, FL
Beach Crossing 1984 100% 45,790 45,790 96% Food Lion(4), Revco Drug 21,000 Fee 6
Myrtle Beach, SC
Bennington Place 1994 100% 42,712 42,712 97% Food Lion None Fee 3
Roanoke, VA
BJ's Plaza 1991 100% 104,233 104,233 100% BJ's Wholesale Club None Ground 1
Portland, ME Lease(5)
Briarcliff Square 1989 100% 41,778 41,778 100% Food Lion None Fee 9
Oak Ridge, TN
Buena Vista Plaza 1989/1994 100% 143,820 10,000 100% Wal*Mart, Winn Dixie None Fee 4
Columbus, GA
Bulloch Plaza 1986 100% 34,400 34,400 100% Food Lion, Rite Aid None Fee 4
Statesboro, GA
Capital Crossing 1995 100% 83,700 83,700 100% Hannaford Bros., Staples None Fee 2
Raleigh, NC
Cedar Bluff Crossing 1986/1994 100% 53,050 53,050 94% Food Lion None Fee 11
Knoxville, TN
Cedar Plaza 1988 100% 95,000 50,000 100% Quality Stores, None None Fee 5
Cedar Springs, MI Great Day Foods
Centerview Plaza 1986/1994 100% 43,720 43,720 100% Food Lion, Eckerd None Fee 6
China Grove, NC
Chestnut Hills 1982 100% 68,364 68,364 95% JCPenney None Fee 9
Murray, KY
Clark's Pond 1995 100% 134,920 134,920 100% Home Quarters None Fee 1
Portland, ME Warehouse
Colleton Square 1986 100% 31,000 31,000 100% Food Lion None Fee 5
Walterboro, SC
Collins Park Common 1989 100% 37,400 37,400 87% Food Lion None Ground 4
Plant City, FL Lease(6)
Conway Plaza 1985 100% 33,000 33,000 96% Food Lion(7) 21,000 Ground 6
Conway, SC Lease(8)
Cosby Station 1984/1991 100% 77,811 77,811 100% Publix None Fee 9
Douglasville, GA
County Park Plaza 1982 100% 47,325 47,325 71% Bi-Lo 28,875(9) Fee 2
Scottsboro, AL
Devonshire Place 1996 100% 104,517 104,517 100% Hannaford Bros., Kinetix, None Ground 4
Cary, NC Borders Books Lease(10)
Dorchester Crossing 1985 100% 40,007 40,007 96% Food Lion None Fee 6
Charleston, SC
East Ridge Crossing 1988 100% 54,000 54,000 98% Food Lion, Revco None Fee 11
Chattanooga, TN
East Towne Crossing 1989/1990 100% 158,751 70,011 100% Home Depot, Regal None Fee 8
Knoxville, TN Cinemas, Food Lion
58 Crossing 1988 100% 49,984 49,984 100% Food Lion, Revco None Fee 9
Chattanooga, TN
Garden City Plaza 1984/1991 100% 188,446 76,246 95% Wal*Mart, JCPenney None Fee 14
Garden City, KS
Genesis Square 1990/1996 100% 35,000 35,000 100% Food Lion None Fee 4
Crossville, TN
Girvin Plaza 1990 100% 56,297 20,375 100% Winn Dixie None Fee 8
Jacksonville, FL
Greenport Towne Cen 1994 100% 191,622 75,525 100% Wal*Mart, Price-Chopper None Fee 2
Hudson, NY
Hampton Plaza 1990 100% 44,624 44,624 92% Food Lion None Fee 6
Tampa, FL
Henderson Square 1995 100% 268,327 164,329 100% JCPenney, Legget's, None Fee 13
Henderson, NC Goody's, Wal*Mart
Hollins Plantation Plaza
Roanoke, VA 1985 100% 40,640 40,640 100% Food Lion, Revco Drug None Fee 5
Jasper Square 1986/1990 100% 95,950 50,550 100% Lowe's, Goody's None Fee 7
Jasper, AL
Jean Ribaut 1977/1993 100% 223,497 223,497 100% Belk, Kmart, Bi-Lo None Fee 17
Beaufort, SC
Karns Corner 1987/1996 100% 35,000 35,000 100% Food Lion None Fee 4
Knoxville, TN
Keystone Crossing 1989 100% 40,400 40,400 96% Food Lion None Fee 4
Tampa, FL
Kingston Overlook 1996 100% 96,885 96,885 100% Baby Superstore, None Fee/ 1
Knoxville, TN(20) Home Place, Ground
Michael's(20) Lease(11)
Lady's Island 1983/1993 100% 60,687 60,687 100% Winn Dixie, Eckerd None Fee 9
Beaufort, SC
LaGrange Commons 1996 100% 59,799 59799 A & P Food Store None Fee 3
LaGrange, NY
Lakeshore Crossing 1994 100% 8,000 8,000 100% None Fee 5
Gainesville, GA
Longview Crossing 1988 100% 29,800 29,800 96% Food Lion None Ground 3
Hickory, NC Lease(12)
Lowe's Plaza 1993 100% 125,351 125,351 100% Lowe's None Fee 1
Joplin, MO
Lunenburg Crossing 1994 100% 198,115 25,515 100% Wal*Mart, Shop'n Save None Fee 8
Lunenburg, MA
North Creek Plaza 1983 100% 28,500 28,500 100% Food Lion None Fee 2
Greenwood, SC
North Haven Crossin 1993 100% 104,612 104,612 100% Sports Authority, Office None Fee 6
North Haven, CT Max, Barnes & Noble
Northridge Plaza 1984/1988 100% 129,570 79,570 99% Winn Dixie, Eckerd None Fee 17
Hilton Head, SC
Northwoods Plaza 1983/1992 100% 32,705 32,705 100% Food Lion None Fee 2
Albemarle, NC
Oaks Crossing 1990/1993 100% 144,978 27,280 92% Wal*Mart, Rite Aid, None Fee 10
Otsego, MI Food City
Orange Plaza 1983 100% 46,875 46,875 76% Food World (13) 24,900 Fee 8
Roanoke, VA
Park Village 1990 100% 48,570 48,570 83% Food Lion, Family Dollar None Fee 6
Lakeland, FL
Perimeter Place 1985/1988 100% 156,945 54,525 10% Home Depot, Drugs For Less None Fee 17
Chattanooga, TN
Rawlinson Place 1987 100% 35,750 35,750 85% Food Lion None Fee 5
Rock Hill, SC
Rhett at Remount 1983/1994 100% 42,628 42,628 100% Food Lion, Eckerd None Fee 3
Charleston, SC
Sattler Square 1989 100% 132,746 94,760 96% Quality Stores, Perry None Fee 13
Big Rapids, MI Drugs, Denny's Value
Land Supermarket
Seacoast Shopping 1991 100% 208,690 91,690 89% Wal*Mart None Fee 12
Seabrook, NH Shaw's supermarket
Shenandoah Crossing 1988 100% 28,600 28,600 100% Food Lion None Fee 2
Roanoke, VA
Signal Hills Villag 1987/1989 100% 24,100 24,100 58% (14) None Ground 5
Statesville, NC Lease(15)
Southgate Crossing 1985 100% 40,100 40,100 85% Food Lion(4) 25,000 Ground 2
Bristol, TN Lease(16)
Sparta Crossing 1989 100% 29,800 29,800 92% Food Lion None Fee 2
Sparta, TN
Springs Crossing 1987/1996 100% 42,920 42,920 100% Food Lion, Rite Aid None Ground 4
Hickory, NC Lease (17)
Statesboro Square 1986 100% 41,000 41,000 100% Food Lion(7) 25,000 Fee 6
Statesboro, GA
Stone East Plaza 1983 100% 45,259 45,259 91% Food Lion(16) None Fee 9
Kingsport, TN
Suburban Plaza 1995 100% 124,109 124,109 100% Toys "R" Us None Fee 23
Knoxville, TN
Surry Square 1985 100% 32,900 32,900 96% Food Lion(4), 21,000 Fee 3
Elkin, NC Revco Drug
Sutton Plaza 1972(19) 100% 122,027 122,027 100% A & P, Ames None Fee 14
Mt. Olive, NJ
34th St. Crossing 1989 100% 51,120 51,120 97%Food Lion, Family Dollar None Fee 11
St. Petersburg, FL
Townshire Shopping 1988 100% 72,440 72,440 100% Blinn College None Space 4
Bryan, TX Lease(18)
Tyler Square 1987 100% 48,370 48,370 100% Food Lion, Revco Drug None Fee 8
Radford, VA
University Crossing 1986 100% 101,964 20,053 81% Wal*Mart None Fee 7
Pueblo, CO
Uvalde Plaza 1987/1992 75% 111,160 34,000 100% Wal*Mart, C.R. Anthony None Fee 7
Uvalde, TX
Valley Commons 1988/1994 100% 45,580 45,580 100% Food Lion None Fee 11
Salem, VA
Valley Crossing 1988/1991 100% 186,077 186,077 100% Goody's, TJ Maxx, None Fee 20
Hickory, NC Office Depot, Circuit City,
Belk Outlet Store
The Village at
Wexford 1990 100% 102,450 72,450 98% Quality Stores(21), None Fee 8
Cadillac, MI Glen's Supermarket,
Village Square 1990/1993 100% 163,294 27,050 96% Wal*Mart, None Fee 10
Houghton Lake, MI Glen's Supermarket,
Perry Drug Store
Wildwood Plaza 1985/1994 100% 39,580 39,580 100% Food Lion None Fee 4
Salem, VA
Willow Springs
Plaza 1991/1994 100% 224,344 121,956 100% Home Depot, Office Max, None Fee 10
Nashua, NH JCPenney Home Store
---------- ----------- ------
TOTAL COMMUNITY CENTERS 6,200,263 4,493,679 97%
========== =========== ======
(1) Includes the total square footage of the Anchors (whether
owned by others or leased by the Anchor) and shops. Does
not include future expansion areas.
(2) Includes leasable Anchors.
(3) Includes tenants paying rent on executed leases on
December 31, 1996. Calculation includes leased Anchors.
(4) Tenant has closed its store but is continuing to meet its
financial obligation and is sub-leasing the space.
(5) Ground Lease term extends to 2051 including four 10-year
extensions. Lessee has an option to purchase and a right
of first refusal to purchase the fee.
(6) Ground Lease term extends to 2049 including three 10-year
extensions. Lessor receives a share of percentage rents
during initial term and extensions. Lessee has an option
to purchase and a right of first refusal to purchase the fee.
(7) Represents a Food Lion which has closed its store but is
continuing to meet its financial obligations under its lease.
(8) Ground Lease term extends to 2055 including two 20-year
extensions. During extension periods, lessor receives a
share of percentage rents. Lessee has a right of first
refusal to purchase the fee. Lessor receives a share of
sale proceeds upon sale of the center to a third party.
(9) Bi-Lo is closed but continues to meet its financial
obligations under its lease.
(10) Ground lease extends to 2097 including 12 five year
options. Lessor receives no additional rent.
(11) Grounds lease for a portion of the land extends to 2046
including 4 ten year options. Lessor receives 20% of
percentage rentals.
(12) Ground Lease term extends to 2049 including three 10-year
extensions. Lessor receives a share of percentage rents
during initial term and extensions. Lessee has a right of
first refusal to purchase the fee.
(13) Represents a Food World which has closed its store but is
continuing to meet its financial obligations under its
lease and is sub-leasing the space.
(14) Signal Hills Village is part of Signal Hills Crossing, a
Property on which the Company holds a Mortgage.
(15) Ground Lease term extends to 2084. Rent for entire term
has been prepaid. Lessee has an option to purchase the fee
under certain circumstances.
(16) Ground Lease term extends to 2055 including one 20-year
extension. Commencing in 2005, rental will be the greater
of base rent or a share of the revenue from the center.
Lessee has a right of first refusal to purchase the fee.
(17) Ground Lease term extends to 2048 including three 10-year
extensions. Lessor receives a share of percentage rents
during initial term and extensions. Lessee has a right of
first refusal to purchase the fee.
(18) Represents a space lease for this center. Lease term
expires in 1999 with one 10-year extension option available.
(19) Sutton Place opened in 1972 and was acquired by the Company
in January, 1997.
(20) The remaining 23,000 square feet are still under
development the tenant Michael's, will open in July 1997
occupying 100% of this space.
(21) Quality Stores has an option to purchase its 56,850 square
foot store commencing in 1996 for a price based upon
capitalizing minimum annual rent being paid at the time of
exercise at a rate of 8.33%.
MORTGAGES
The Company owns certain Mortgages which were granted prior to
the IPO in connection with sales by the Company's predecessor of
properties which it had previously developed.
The Company also holds fee mortgages on six community
centers, which mortgages had, as of December 31, 1996, an
aggregate outstanding principal of $12.3 million. Such mortgages
entitle the Company to receive substantially all of such
properties' current cash flow in the form of periodic debt
service payments. The encumbered properties all opened between
1981 and 1984 and have no Anchor vacancies.
In the years ended December 31, 1994, 1995, and 1996,
revenues from the Mortgages represented approximately 2.4%, 2.2%,
and 2.0%, respectively, of total revenues from the Company's
Properties.
The following table sets forth certain additional information
regarding the Mortgages as of December 31, 1996.
Mortgage Information Center Information
------------------------------------------ ---------------------------------------
Annual Principal Annual Total Percentage Number
Name of Center/ Interest Balance as Debt Maturity Total Leasable GLA of
Location Rate of 12/31/96 Service Date GLA(1) GLA Leased(2) Anchors Stores
- -------------------- --------- ----------- ------- ---------- -------- -------- ---------- --------- ------
MALL COMMUNITY
CENTERS
BI-LO South......... 9.50 $ 1,608 $ 175 Dec-1996(3) 48,075 48,075 100% BI-LO, 7
Cleveland, TN Rite-Aid
Gaston Square....... 11.00 1,637 179 Oct-97 33,640 33,640 100 Food Lion, 4
Gastonia, NC Eckerd
Inlet Crossing...... 11.00 1,942 327 Oct-97 55,248 55,248 100 Food Lion, 13
Myrtle Beach, SC Revco
Drug
Olde Brainerd
Centre............ 9.50 2,792 245 Dec-2006 57,293 57,293 100 BI-LO, 7
Chattanooga, TN Revco
Drug
Signal Hills
Crossing.......... 11.00 2,306 244 Oct-1997 44,220 44,220 100 Food Lion, 6
Statesville, NC Revco
Drug
Soddy Daisy Plaza... 9.50 1,982 163 Dec-2006 100,095 47,325 100 Wal*Mart, 5
Soddy Daisy, TN BI-LO,
Revco
Drug
----------- ------- -------- -------- ---------- ------
TOTAL COMMUNITY... $12,267 $1,333 338,571 285,801 100% 42
=========== ======= ======== ======== ========== ======
Centers Subject to
Mortgages
_________________________
(1) Includes Anchors.
(2) Includes all leases executed on or before December 31, 1996. Leased GLA includes non-Anchor GLA and leased
Anchor GLA.
(3) The mortgage is on a month-to-month extension pending execution of extension agreements.
OFFICE BUILDING
The Company owns a 95% interest in a 49,082 square foot
office building in Chattanooga, Tennessee in which the Company's
headquarters are located. The Company occupies 26,613 square
feet or 54% of the total square footage of the Office Building.
The Office Building is 100% occupied.
TOP 25 TENANTS
The following table sets forth the Company's top 25 tenants
based upon a percentage of total revenues from the Company's
Properties in 1996.
% OF NUMBER OF SQUARE
RANK TENANT REVENUES STORES FEET
- ---- --------------------------------- ---------- --------- ----------
1 The Limited, Inc................. 7.12% 50 400,694
2 Food Lion........................ 5.43% 38 1,037,807
3 Woolworth Corp................... 2.44% 44 106,257
4 IC Penney Co., Inc............... 2.33% 17 1,156,946
5 Belk Atlanta Group Office........ 1.97% 9 774,018
6 Goody's Family Clothing, Inc..... 1.95% 11 371,823
7 Intimate Brands.................. 1.25% 15 62,197
8 The Shoe Show.................... 1.25% 15 69,928
9 Carmike Cinema................... 1.23% 8 157,119
10 The Regis Corporation............ 1.18% 39 42,475
11 The Gap, Inc..................... 1.16% 8 49,297
12 Regal Cinemas, Inc............... 1.11% 4 105,871
13 Walden Books..................... 1.09% 15 49,449
14 Camelot Music, Inc............... 1.03% 11 44,834
15 County Seat...................... 1.02% 13 51,390
16 Lowe's Companies, Inc............ 0.91% 2 246,499
17 Footstar......................... 0.89% 11 41,552
18 The May Department Stores........ 0.89% 18 290,165
19 Parisian, Inc.................... 0.88% 1 133,000
20 Sears, Roebuck and Co............ 0.86% 6 568,411
21 U.S. Shoe Corporation............ 0.85% 13 41,735
22 Tandy Corporation................ 0.78% 20 49,678
23 Ruby Tuesday, Inc................ 0.72% 7 34,341
24 Consolidated Stores Corporation.. 0.67% 12 41,553
25 American Eagle Outfitters........ 0.64% 7 27,906
---------- --------- ----------
MORTGAGE DEBT AND RATIO TO TOTAL MARKET CAPITALIZATION
As of December 31, 1996, the Operating Partnership's
proportionate share of indebtedness of all Properties (whether or
not consolidated for financial statement reporting purposes
including the Construction Properties) was approximately $612.5
million. The Company's total market capitalization (the
aggregate market value of the Company's outstanding shares of
Common Stock, assuming the full exchange of the limited
partnership interests in the Operating Partnership for Common
Stock, plus the $612.5 million total debt of the Operating
Partnership) as of December 31, 1996 was $1.4 billion.
Accordingly, the Company's debt to total market capitalization
ratio as of December 31, 1996 was 43.8%. The debt to total market
capitalization ratio, which is based upon the Company's
proportionate share of consolidated and unconsolidated
indebtedness and market values of equity, differs from
debt-to-book capitalization ratios, which are based upon
consolidated indebtedness and book values.
The following table sets forth certain information regarding
the mortgages and secured lines of credit encumbering the
Properties.
MORTGAGE DEBT
(Dollars in thousands; numbers may not add due to rounding)
MORTGAGE LOANS OUTSTANDING IN
WHOLE OR IN PART AT DECEMBER 31, 1996
Ownership Earliest
Share of Estimated Date at
Company Principal Balloon Which
and Annual Balance Annual Annual Payment Loans
Center Pledged Operating Interest as of Interest Debt Maturity Due on Can Be
as Collateral Partnership Rate 12/31/96(1) Payment (2) Service Date Maturity Prepaid(3)
- ------------------------ ----------- -------- ----------- ----------- ------- ---------- --------- ------------
MALLS:
College Square.......... 100% 10.000% $ 13,824 $ 1,382 $ 1,548 Jan-2003 $ 13,393 --(4)
Coolsprings Galleria.... 100% 8.290% 68,987 5,719 6,636 Sep-2010 -- Oct-2000(5)
Frontier Mall........... 100% 10.000% 8,611 861 2,220 Dec-2001 -- --(6)
Governor's Square....... 48% 8.230% 36,685 3,020 3,476 Sep-2016 14,454 Sep-2001(7)
Hamilton Place......(15) 90% 9.250% 60,359 5,583 6,526 Dec-1997 59,461 Jan-1995(8)
Madison Square.......... 50% 9.250% 49,412 4,571 4,936 Mar-2002 46,482 Feb-1997(10)
Oak Hollow Mall......... 75% 7.310% 53,336 3,899 4,709 Feb-2008 39,567 Feb-2002(12)
Plaza del Sol.......(13) 51% 9.500%(14) 2,572 244 244 Nov-1997 1,729 --
St. Clair Square....(41) 100% 7.180% 66,000 4,739 4,739 Nov-1999 66,000 --
Turtle Creek Mall....... 100% 7.400% 34,712 2,569 2,966 Mar-2006 26,992 Mar-1999(16)
Walnut Square.......(17) 100% 10.125% 957 97 140 Feb-2008 -- --(18)
Walnut Square........... 100% 10.000%(9) 389 29 39 Mar-1996 389 --(9)
Westgate Mall.......(11) 100% 7.210%(52) 38,502 2,776 2,776 Jul-1997 38,502 --
---------
Malls Subtotal: 434,346
ASSOCIATED CENTERS:
Georgia Square Plaza.... 100% 9.000% 479 43 141 Jan-2001 -- Feb-1997(8)
Hamilton Corner......... 90% 10.125% 3,589 363 471 Aug-2011 -- --(20)
Hamilton Crossing....... 92% 9.250% 5,228 484 565 Dec- 1997 5,190 Jan-1995(21)
Madison Plaza........... 75% 10.125% 2,850 289 537 Feb-2004 -- --(22)
---------
Associated Centers Subtotal: 12,146
COMMUNITY CENTERS:
Bartow Village.......... 100% 9.750% 1,715 $167 $ 228 Aug-2000 $1,458 Sept-1997(23)
Bennington Place........ 100% 10.250% 611 63 83 Aug-2010 -- Jul-2000(24)
BJ's Plaza.............. 100% 10.400% 3,609 375 476 Dec-2011 -- (19)
Briarcliff Square....... 100% 10.375% 1,765 183 226 Feb-2013(25) -- Feb-1998(26)
Bulloch Plaza........... 100% 10.000% 1,027 103 162 Jan-2007 -- Dec-1996(24)
Cedar Bluff Crossing.... 100% 10.625% 1,492 158 230 Jan-2008 -- Jan-2008(27)
Centerview Plaza........ 100% 10.000% 1,418 142 191 Jan-2010(28) -- Jan-1999(24)
Colleton Square......... 100% 9.375% 1,102 103 143 Aug-2010(29) -- Aug-1998(24)
Collins Park Commons.... 100% 10.250% 1,491 153 202 Oct-2010 -- Sept-2000(24)
Cosby Station........... 100% 8.500% 4,477 381 490 Sep-2014 -- Sep-2001(30)
East Ridge Crossing..... 100% 10.125% 1,523 154 324 May-2003 -- Jan-9001(31)
Fifty-Eight Crossing.... 100% 10.125% 1,468 149 312 May-2003 -- Jan-2001(31)
Genesis Square.......... 100% 10.250% 1,133 116 147 Aug-2010 -- Jul-2000(32)
Greenport Towne Center.. 100% 9.000% 4,681 421 529 Sep-2014 -- --(33)
Hampton Plaza........... 100% 10.000% 2,170 217 256 Nov-2000 1,992 Nov-1997(34)
Henderson Square....(35) 100% 7.500%(35) 7,267 545 750 Apr-2014 -- May-2005(35)
Hollins Plantation
Plaza................. 100% 10.000% 1,272 127 211
(36) Jun-2007 -- Jun-1997(37)
Jean Ribaut............. 100% 8.750% 4,206 368 477 Oct-1998 4,019 --(38)
Karns Corner............ 100% 10.250% 1,051 108 146 Jan-2010 (39) Feb-1999(24)
Keystone Crossing....... 100% 9.625% 2,402 231 278 Aug-2000 2,207 Sept-1997(40)
Longview Crossing....... 100% 10.250% 485 50 66 Aug-2010 -- Aug-2000(24)
Lowe's Plaza............ 100% 9.125% 5,363 489 625 Oct-2013 -- Oct-2003(43)
North Haven Crossing.... 100% 9.550% 8,667 828 1,225 Oct-2008 -- Oct-1998(44)
Northwoods Plaza........ 100% 9.750% 1,362 133 171 Jun-2012 -- --(45)
Perimeter Place......... 100% 10.625% 1,805 192 278 Jan-2008 -- Jan-2008(27)
Seacoast Shopping
Center................ 100% 9.750% 6,079 593 721 Sep-2002 5,110 Oct-1997(46)
Shenandoah Crossing..... 100% 10.250% 610 63 83 Aug-2010 -- Aug-2000(24)
Sparta Crossing......... 100% 10.250% 932 96 127 Aug-2010 -- Jul-2000(47)
Suburban Plaza.......... 100% 8.500% 5,325 453 615 May-1999 5,325 --
(48)
34th St. Crossing...(49) 100% 10.625% 1,703 181 234 Dec-201 0 -- Dec-2000(50)
Tyler Square............ 100% 9.750% 2,021 197 251 Oct-2012(51) -- Nov-1994(26)
Uvalde Plaza............ 75% 10.625% 867 92 133 Feb-2008 -- Feb-2008(27)
Valley Commons.......... 100% 10.250% 1,049 108 142 Oct-2010 -- Oct-2000(24)
Willow Springs Plaza.... 100% 9.750% 6,182 603 934 Aug-2007 601 Aug-1997(47)
---------
Community Centers Subtotal: 88,330
CONSTRUCTION PROPERTIES:
The Terrace........... 100% 7.100% 6,898 490 490 May-1998 6,898 --
Springhurst Towne
Center................ 100% 7.140% 2,856 204 204 Nov-1998 2,856 --
Bonita Lakes Mall....... 100% 7.230% 3,852 279 279 Oct-1998 3,852 --
Cortland Towne Center... 100% 7.250% 12,787 2,776 2,776 Nov-1998 12,787 --
---------
Construction Properties Subtotal: 26,393
OTHER:
Park Place.............. 95% 10.000% 2,147 215 459 Apr-2003 -- --(8)
Credit Lines............ 100% 6.81%(54) 115,595(54) 7,867 7,867 Various 115,595 --
---------
Total: $ 678,959
Operating Partnership's Share of Total: $612,550(55)
(1) The amount listed includes 100% of the loan amount even
though the Company and the Operating Partnership may own
less than 100% of the property.
(2) Interest has been computed by multiplying the annual
interest rate by the outstanding principal balance as of
December 31, 1996.
(3) Unless otherwise noted, loans are prepayable at any time.
(4) Prepayment premium is greater of 1% or yield maintenance for
any prepayment prior to January, 1998; thereafter, the
prepayment premium is 5%, decreasing by .5% per year to a
minimum of 3%; there is no prepayment premium after July 15,
2002.
(5) Prepayment premium is the greater of 1% or yield maintenance
after October 1, 2000.
(6) Prepayment premium is based on yield maintenance (not less
than 1%) for any prepayment prior to January, 1997;
thereafter, the prepayment premium is 5%, decreasing by 1%
per year to a minimum of 1%; there is no prepayment premium
during the last 120 days of the loan term.
(7) Prepayment premium is based on the greater of yield
maintenance or 2%.
(8) Prepayment premium is the greater of 1% or yield
maintenance.
(9) Interest is floating at 1 1/2% over prime priced at December
31, 1996. The maturity date is 90 days after notice.
(10) Prepayment premium is based on yield maintenance; there is
no prepayment premium after October 1, 2001.
(11) Permanent loan of $52,000,000 at a rate of 6.95% closed in
March, 1997.
(12) Prepayment premium is the greater of 1% or yield
maintenance.
(13) The loan can be extended for 3 one year periods, the
extension fee is 1/4 point for each extension.
(14) Interest is floating at 1% over prime priced at December 31,
1996.
(15) Permanent loan of $75,000,000 at a rate of 7% closed in
March, 1997.
(16) Prepayment premium is the greater of 1% or yield
maintenance.
(17) The loan is secured by a first mortgage lien on the land and
improvements comprising the Goody's anchor store and no
other property.
(18) Prepayment premium is the greater of 1% or yield
maintenance; there is no prepayment premium after
November 1, 2007.
(19) Prepayment premium is based on yield maintenance.
(20) Prepayment premium is the greater of 1% or yield
maintenance; there is no prepayment premium during the last
120 days of the loan term.
(21) Prepayment premium is the greater of 1% or yield
maintenance; there is no prepayment premium after June 1,
1997.
(22) Prepayment premium is the greater of 1% or yield
maintenance; there is no prepayment premium after November
1, 2003.
(23) Prepayment premium is 5%, decreasing to 3% after September,
1998 and to 1% after September, 1999; there is no prepayment
premium during the last 90 days of the loan term.
(24) Prepayment premium is 5%, decreasing by 1% per year to a
minimum of 2% there is no prepayment premium during the last
120 days of the loan term.
(25) Lender has option to accelerate loan between March 1, 2001
and February 28, 2002; March 1, 2006 and February 28, 2007;
and March 1, 2011 and February 28, 2012.
(26) Prepayment premium is 7%, decreasing by 1% per year to a
minimum of 3%.
(27) Loan may not be prepaid.
(28) Lender may accelerate the loan after September, 2006 upon
expiration of the primary term of the lease of either Food
Lion or Eckerds, unless both leases have been extended
beyond January 1, 2010.
(29) Lender may accelerate loan on July 1, 2007 unless Food Lion
exercises an extension option.
(30) Prepayment premium of 7% decreasing by 1% per year to a
minimum of 2%; there is no prepayment premium during the
last six months of the loan term.
(31) Prepayment premium is 5%, decreasing 1% per year to a
minimum of 1%; there is no prepayment premium during the
last two years of the loan term.
(32) Prepayment premium is 5% from July 1, 2000 to June 30, 2001;
thereafter decreasing by 1% per year to a minimum of 2%;
there is no prepayment premium after May 1, 2010.
(33) Prepayment premium is the greater of 10% or 1/12 of the
annual yield difference before Oct-2014. Thereafter the
prepayment premium is 1%.
(34) The interest rate is floating at 190 basis points over
LIBOR. Priced at December 3, 1996. The maximum Loan is
$7,000,000, with no extensions.
(35) Loan may be prepaid after the 9 years. The prepayment
premium is the greater of 1% or yield maintenance.
(36) Annual debt service is reduced to $152,004 (payable monthly)
after June 1, 2004.
(37) Prepayment premium is 5%, decreasing by 1% per year to a
minimum of 1%; there is no prepayment premium during the
last year of the loan term.
(38) Prepayment premium is the greater of 1% or yield
maintenance.
(39) Lender may accelerate loan after January 1, 2008 unless Food
Lion exercises an extension option beyond January 1, 2008.
(40) Prepayment premium is 5%, which is reduced to 3% after
September, 1998 and to 1% after September, 1999; there is no
loan prepayment premium during the last 90 days of the loan
term.
(41) The interest rate is floating at 150 Basis points over
LIBOR. Loan may be extended for 2 years with 90 days written
notice prior to maturity date. Extension fee equal to 1/4%
of the outstanding balance.
(42) The interest rate is floating at 50 Basis points over LIBOR.
Priced at December 31, 1996. The maximum loan amount is
$25,000,000.
(43) Prepayment premium is 5%, decreasing by .5% per year to a
minimum of 1%; there is no loan prepayment premium during
the last 180 days of the loan term.
(44) Prepayment premium is the greater of 2% or yield maintenance
before October, 1998, afterwards it is the greater of 1% or
yield maintenance.
(45) Prepayment premium is based on yield maintenance; there is
no loan prepayment premium during the last 120 days of the
loan term.
(46) Prepayment premium is the greater of 1% or yield
maintenance; there is no loan prepayment premium during the
last three months of the loan term.
(47) Prepayment premium is 5% from August 1, 2000 to July 30,
2001; thereafter decreasing to 1% per year to a minimum of
2%; there is no prepayment premium after May 1, 2010.
(48) Interest only through May, 1997. Annual debt service of
$728,976 on the maximum loan amount of $7,000,000 begins
June, 1997.
(49) The note is secured by rent payable by the Food Lion Anchor
store.
(50) Prepayment premium is 5%, decreasing by 1% per year to a
minimum of 2%. There is no loan prepayment premium during
the last 90 days of the loan term.
(51) Lender has option to accelerate loan between October 1, 1996
and September 30, 1997; October 1, 2001 and September 30,
2002; October 1, 2006 and September 30, 2007; and October 1,
2011 and September 30, 2012.
(52) The interest rate is floating at 175 basis points over
LIBOR. Priced at December 31, 1996. The maximum loan amount
is $42,000,000.
(53) The loan can be extended for 3 one year periods with a fee
of 1/4 point. Principal payments during the second extension
are $100,000 each quarter and $150,000 per quarter during the
third extension.
(54) Interest rates on the credit lines are at various spreads over
LIBOR whose weighted average interest rate is 6.81% with various
maturities through 1999.
(55) Represents non-recourse indebtedness on Properties and
reflects the less than 100% ownership of the Company and the
Operating Partnership with respect to certain Properties
subject to such indebtedness.
ITEM 3. LEGAL PROCEEDINGS.
The Company and the Operating Partnership are not currently
involved in any material litigation nor, to management's
knowledge, is any material litigation currently threatened
against the Company, the Operating Partnership, the Property
Partnerships or the Properties, other than litigation arising in
the ordinary course of business, most of which is expected to be
covered by liability insurance.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS.
(a) MARKET INFORMATION
The principal United States market in which the Common Stock
is traded is the New York Stock Exchange.
The following table sets forth the high and low sales prices
for the Common Stock for each quarter of the Company's two most
recent fiscal years.
1995 Quarter Ended High Low
----------------------- ------- -------
March 31............... $21.125 $18.875
June 30................ 20.250 19.125
September 30........... 22.000 19.875
December 31............ 22.000 20.125
1996 Quarter Ended High Low
----------------------- ------- -------
March 31............... $22.000 $20.375
June 30................ 22.875 19.750
September 30........... 23.500 21.500
December 31............ 25.875 22.750
(b) HOLDERS
The approximate number of shareholders of record of the
Common Stock was 322 as of March 24, 1997.
(c) DIVIDENDS
The following table sets forth the frequency and amounts
of dividends declared and paid for each quarter of the
Company's two most recent fiscal years.
Quarter Ended 1995 1996
----------------------- ------- -------
March 31............... $0.3975 $0.4200
June 30................ 0.3975 0.4200
September 30........... 0.3975 0.4200
December 31............ 0.3975 0.4200
Future dividend distributions are subject to the Company's
actual results of operations, economic conditions and such other
factors as the Board of Directors of the Company deems relevant.
The Company's actual results of operations will be affected by a
number of factors, including the revenues received from the
Properties, the operating expenses of the Company, the Operating
Partnership and the Property Partnerships, interest expense, the
ability of the anchors and tenants at the Properties to meet
their obligations and unanticipated capital expenditures.
ITEM 6. SELECTED FINANCIAL DATA.
Information set forth under the caption "Selected Financial
Data" on page 1 of the Company's 1996 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" on page 14 of the Company's 1996 Annual Report to
Shareholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Consolidated Financial Statements of the Company and Report
of Independent Public Accountants on page 22 and 35, respectively,
of the Company's 1996 Annual Report to Shareholders is incorporated
herein by reference. Reference is made to Item 14(a) of this report
for the schedules to the Company's Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Incorporated herein by reference from the Company's
definitive proxy statement filed on March 25, 1997 with the
Securities and Exchange Commission (the "Commission") with
respect to its Annual Meeting of Stockholders to be held on May
1, 1997.
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated herein by reference from the Company's
definitive proxy statement filed on March 25, 1997 with the
Commission with respect to its Annual Meeting of Stockholders to
be held on May 1, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Incorporated herein by reference from the Company's
definitive proxy statement filed on March 25, 1997 with the
Commission with respect to its Annual Meeting of Stockholders to
be held on May 1, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated herein by reference from the Company's
definitive proxy statement filed on March 25, 1997 with the
Commission with respect to its Annual Meeting of Stockholders to
be held on May 1, 1997.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
(1) Financial Statements
Incorporated herein by reference from page 22 of the Company's 1996
Annual Report to Shareholders.
(2) Financial Statement Schedules
Report of Independent Public Accountants
Schedule III Real Estate and Accumulated Depreciation
Schedule IV Mortgage Loans on Real Estate
Financial Statement Schedules not listed herein are either
not required or the information required to be included therein
is included in the Company's Consolidated Financial Statements
which are incorporated herein by reference from page 22 of the
Company's 1996 Annual Report to Shareholders.
(3) Exhibits
Exhibit
Number Description
- -------- -------------------------------------------------
3.1 Amended and Restated Certificate of Incorporation
of the Company(a)
3.2 Amended and Restated Bylaws of the Company(a)
4 See Amended and Restated Certificate of
Incorporation of the Company,
relating to the Common Stock(a)
10.1 Partnership Agreement of the Operating
Partnership(a)
10.2 Property Management Agreement between the
Operating Partnership and the Management
Company(a)
10.3 Property Management Agreement relating to Retained
Properties(a)
10.4.1 CBL & Associates Properties, Inc. 1993 Stock
Incentive Plan(a)
10.4.2 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Charles B. Lebovitz
10.4.3 Non-Qualified Stock Option Agreement, dated May
10, 1994, for James L. Wolford
10.4.4 Non-Qualified Stock Option Agreement, dated May
10, 1994, for John N. Foy
10.4.5 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Jay Wiston
10.4.6 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Ben S. Landress
10.4.7 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Stephen D. Lebovitz
10.4.8 Stock Restriction Agreement, dated December 28,
1994, for Charles B. Lebovitz
10.4.9 Stock Restriction Agreement, dated December 2,
1994, for John N. Foy
10.4.10 Stock Restriction Agreement, dated December 2,
1994, for Jay Wiston
10.4.11 Stock Restriction Agreement, dated December 2,
1994, for Ben S. Landress
10.4.12 Stock Restriction Agreement, dated December 2,
1994, for Stephen D. Lebovitz
10.5 Purchase Agreement relating to Frontier Mall(b)
10.6.1 Purchase Agreement relating to Georgia Square
(JMB)(b)
10.6.2 Purchase Agreement Relating to Georgia Square
(JCPenney)(b)
10.7 Purchase Agreement relating to Post Oak Mall(b)
10.8 Indemnification Agreements between the Company and
the Management Company and their officers and
directors(a)
10.9.1 Employment Agreement for Charles B. Lebovitz(a)
10.9.2 Employment Agreement for James L. Wolford(a)
10.9.3 Employment Agreement for John N. Foy(a)
10.9.4 Employment Agreement for Jay Wiston(a)
10.9.5 Employment Agreement for Ben S. Landress(a)
10.9.6 Employment Agreement for Stephen D. Lebovitz(a)
10.10 Subscription Agreement relating to purchase of the
Common Stock and Preferred Stock of the Management
Company(a)
10.11 Option Agreement relating to certain Retained
Properties(a)
10.12 Option Agreement relating to Outparcels(a)
10.13.1 Property Partnership Agreement relating to
Hamilton Place(a)
10.13.2 Property Partnership Agreement relating to
CoolSprings Galleria(a)
10.14.1 Acquisition Option Agreement relating to Hamilton
Place(a)
10.14.2 Acquisition Option Agreement relating to the
Hamilton Place Centers(a)
10.14.3 Acquisition Option Agreement relating to the
Office Building(a)
10.15 Revolving Credit Agreement between the Operating
Partnership and First Tennessee Bank, National
Association, dated as of March 2, 1994(c)
10.16 Revolving Credit Agreement, dated July 28, 1994,
between the Operating Partnership and Wells Fargo
Advisors Funding, Inc., NationsBank of Georgia,
N.A. and First Bank National Association(d)
10.17 Revolving Credit Agreement, dated October 14,
1994, between the Operating Partnership and
American National Bank and Trust Company of
Chattanooga(e)
10.18 Revolving Credit Agreement, dated November 2,
1994, between the Operating Partnership and First
Tennessee Bank National Association(e)
10.19 Promissory Note Agreement between the Operating
Partnership and Union Bank of Switzerland dated
May 5, 1995(f)
10.20 Amended and Restated Loan Agreement between the
Operating Partnership and First Tennessee Bank
National Association dated July 12, 1995(g)
10.21 Second Amendment to Credit Agreement between the
Operating Partnership and Wells Fargo Realty
Advisors Funding, Inc. dated July 5, 1995(g)
10.22 Consolidation, Amendment, Renewal, and Restatement
of Notes between the Galleria Associates, L.P. and
The Northwestern Mutual Life Insurance Company(h)
10.23 Promissory Note Agreement between High Point
Development Limited Partnership and The
Northwestern Mutual Life Insurance Company
dated January 26, 1996(i)
10.24 Promissory Note Agreement between Turtle Creek
Limited Partnership and Connecticut General Life
Insurance Company dated February 14, 1996(i)
10.25 Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A.
etal dated September 26, 1996. (j)
10.26 Promissory Note Agreement between the Operating
Partnership and Compass Bank dated September 17,
1996. (j)
10.27 Promissory Note Agreement between St Clair Square
Limited Partnership and Wells Fargo National
Bank dated, December 11, 1996.
10.28 Promissory Note Agreement between Lebcon
Associates and Principal Mutual Life Insurance
Company dated, March 18, 1997.
10.29 Promissory Note Agreement between Westgate Mall
Limited Partnership and Principal Mutual Life
Insurance Company dated, February 16, 1997.
10.30 Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank
etal dated February 24, 1997.
13 Company's 1996 Annual Report to Shareholders
21 Subsidiaries of the Company
23 Consent of Arthur Andersen LLP
24 Powers of Attorney
(a) Incorporated by reference to Post-Effective
Amendment No. 1 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to
the Company's Registration Statement on Form S-11
(No. 33-67372), as filed with the Commission on
October 26, 1993.
(c) Incorporated herein by reference to the Company's
Annual Report in Form 10-K for the fiscal year
ended December 31, 1993.
(d) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994.
(e) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994.
(f) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
(g) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995.
(h) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual
Report in Form 10-K for the fiscal year ended
December 31, 1995.
(j) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
A management contract or compensatory plan or
arrangement required to be filed pursuant to Item
14(c) of this report.
(4) Reports on Form 8-K
The outline from the Company's February 5, 1997
conference call with analysts regarding earnings
(Item 5) was filed on February 5, 1997.
Information on the acquisition of St. Clair Square
in Fairview Heights, IL was filed on December 9, 1996.
Information on the retirement of James. L Wolford Executive
Vice President was filed on January 15, 1997.
Information on the acqusition of St Clair Square in
Fairview Heights, IL was filed as an 8-KA on
January 15, 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CBL & ASSOCIATES PROPERTIES, INC.
(Registrant)
BY:
Charles B. Lebovitz
Chairman of the Board,
President and Chief
Executive Officer
Dated: March 27, 1997
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Signature Title Date
_________________ Chairman of the Board, March 28, 1997
Charles B. Lebovitz Board, President
and Chief Executive
Officer(Principal
Executive Officer)
____________________
John N. Foy Director, Executive March 28, 1997
Vice President, Chief
Financial Officer
and Secretary
(Principal Financial
Officer and Principal
Accounting Officer)
____________________
Stephen D. Lebovitz Director, Senior March 28, 1997
Vice President and
Treasurer
____________________
Claude M. Ballard Director March 28, 1997
____________________
Leo Fields Director March 28, 1997
____________________
William J. Poorvu Director March 28, 1997
____________________
Winston W. Walker Director March 28, 1997
____________________
*By:
Charles B. Lebovitz Attorney-in-Fact March 28, 1997
INDEX TO FINANCIAL STATEMENT SCHEDULES
Report of Independent Public Accountants. . . . . . . . 42
Schedule III-Real Estate and
Accumulated Depreciation . . . . . . . . . . . . . . . 43
Schedule IV- Mortgage Loans on Real Estate. . . . . . . 50
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of CBL
& Associates Properties, Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements included in CBL
& Associates Properties, Inc. annual report to shareholders
incorporated by reference in this Form 10-K, and have issued our
report thereon dated February 4, 1997. Our audit was made for
the purpose of forming an opinion on those consolidated
statements taken as a whole. The schedules listed in the
accompanying index are the responsibility of the management of
CBL & Associates Properties, Inc. and are presented for purposes
of complying with the Securities and Exchange Commission's rules
and are not part of the basic consolidated financial statements.
These schedules have been subjected to the auditing procedures
applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as
a whole.
ARTHUR ANDERSEN LLP
Chattanooga, Tennessee,
February 4, 1997
H
CBL & ASSOCIATES PROPERTIES, INC.
SCHEDULE III
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(Dollars in Thousands) Gross Amounts at
To The Company Costs Close Of Period
-------------------- Capitalized Disposals ---------------------------
Buildings Subsequent of Buildings Accumulated Date of
Encumbrances And to Land And And Depreciation Construction
Description (B) Land Improvements Acquisition Buildings Land Improvements Total(C) (D) /
Purchase
Malls
College Square $13,824 $2,954 $17,787 $3,073 $27 $2,927 $20,860 $23,787 $4,601
1987-1988
Morristown, TN
Coolsprings Galleria 68,987 13,527 86,755 18,863 ---- 13,527 105,618 119,145 10,053
1989-1991
Nashville, TN
Foothills Mall ---- 4,537 15,226 ---- ---- 4,537 15,226 19,763 ---- 1996
Maryville, TN
Foothills Mall JCP ---- ---- 2,650 ---- ---- ---- 2,650 2,650 817 1983
Maryville, TN
Frontier Mall 8,611 2,681 15,858 3,251 ---- 2,681 19,109 21,790 2,694 1984-1985
Cheyenne, WY
Georgia Square (E ---- 2,982 31,071 3,262 ---- 2,983 34,332 37,315 4,689 1982
Athens, GA
Hamilton Place 60,359 2,880 42,211 9,510 729 2,932 50,940 53,872 11,074
1986-1987
Chattanooga, TN
Lakeshore Mall ---- 1,443 28,819 739 ---- 1,443 29,558 31,001 3,797 1991-1992
Sebring, FL
Oak Hollow Mall 53,336 4,344 52,904 3,661 ---- 4,344 56,565 60,909 2,424
1994-1995
High Point, NC
Pemberton Square ---- 1,191 14,305 3,279 186 581 18,008 18,589 4,222 1986
Vicksburg, MS
Post Oak Mall (E) ---- 3,936 48,948 928 ---- 3,936 49,876 53,812 11,604 1984-1985
College Station, TX
St. Clair Square 66,000 11,028 75,581 ---- ---- 11,028 75,581 86,609 204 1996
Fairview Heights, IL
Turtle Creek Mall 34,713 2,345 26,418 6,677 ---- 3,535 31,905 35,440 2,638 1993-1995
Hattiesburg, MS
Twin Peaks Mall ---- 1,873 22,022 10,248 65 1,768 32,310 34,078 7,669 1984
Longmont, CO
Walnut Square (E) 1,347 50 15,138 4,442 ---- 50 19,580 19,630 7,013 1984-1985
Dalton, GA
Westgate Mall 38,503 2,150 23,257 32,280 ---- 2,150 55,537 57,687 1,193 1995
Spartanburg, SC
Associated Centers
Coolsprings Xing (E) ---- 2,803 14,985 34 ---- 2,804 15,018 17,822 1,483 1991-1993
Nashville, TN
Foothills Plaza (E) ---- 132 2,123 225 ---- 141 2,339 2,480 782 1984-1988
Maryville, TN
Foothills Plaza Exp ---- 137 1,960 178 ---- 148 2,127 2,275 428 1984-1988
Maryville, TN
Frontier Square ---- 346 684 63 86 260 747 1,007 195 1985
Cheyenne, WY
Georgia Square Plaza 479 100 1,082 14 ---- 100 1,096 1,196 466 1984
Athens, GA
Hamilton Corner 3,589 960 3,670 624 226 734 4,294 5,028 701 1986-1987
Chattanooga, TN
Hamilton Crossing 5,228 3,318 4,387 421 1,370 1,948 4,808 6,756 1,185 1987
Chattanooga, TN
Madison Plaza 2,850 473 2,888 115 ---- 473 3,003 3,476 255 1984
Huntsville, AL
Pemberton Plaza ---- ---- 662 116 ---- ---- 778 778 186 1986
Vicksburg, MS
Community Centers
34th St Crossing 1,703 1,102 2,743 39 ---- 1,023 2,861 3,884 532 1989
St. Petersburg, FL
58 Crossing 1,468 839 2,360 5 96 743 2,365 3,108 493 1988
Chattanooga, TN
Anderson Plaza ---- 198 1,316 1,562 ---- 198 2,878 3,076 325 1983
Greenwood, SC
Bartow Village 1,716 224 2,010 221 ---- 224 2,231 2,455 338 1989
Bartow, FL
Beach Crossing ---- 725 1,749 122 107 623 1,866 2,489 402 1984
Myrtle Beach, SC
Bennington Place 611 256 1,754 618 ---- 175 2,453 2,628 528 1988
Roanoke, VA
BJ'S Plaza 3,609 170 4,735 ---- ---- 170 4,735 4,905 631 1991
Portland, ME
Briarcliff Square 1,765 299 1,936 65 32 267 2,001 2,268 372 1989
Oak Ridge, TN
Buena Vista Plaza ---- 830 1,476 (805) 20 604 877 1,481 186 1988-1989
Columbus, GA
Bullock Plaza 1,027 98 1,493 ---- ---- 98 1,493 1,591 394 1986
Statesboro, GA
Capital Crossing ---- 1,908 756 2,242 ---- 2,544 2,362 4,906 51 1995
Raleigh, NC
Cedar Bluff Crossin 1,492 412 2,128 796 ---- 412 2,924 3,336 564 1987
Knoxville, TN
Cedar Plaza ---- 206 1,845 89 ---- 206 1,934 2,140 384 1988
Cedar Springs, MI
Centerview Plaza 1,418 246 1,584 691 ---- 197 2,324 2,521 485 1986
China Grove, NC
Chestnut Hills (E) ---- 600 1,775 105 ---- 600 1,880 2,480 246 1992
Murray, KY
Colleton Square 1,102 190 1,349 20 34 156 1,369 1,525 349 1986
Walterboro, SC
Collins Park Common 1,491 25 1,858 3 ---- 25 1,861 1,886 345 1989
Plant City, FL
Conway Plaza ---- 110 1,071 897 110 ---- 1,968 1,968 501 1984
Conway, SC
Cosby Station 4,477 999 4,516 474 ---- 999 4,990 5,989 303 1993-1994
Douglasville, GA
County Park Plaza ---- 196 1,500 93 56 140 1,593 1,733 276 1980
Scottsboro, AL
Devonshire Place ---- 520 5,738 ---- ---- 520 5,738 6,258 29 1995-1996
Cary, NC
Dorchester Crossing ---- 493 1,483 236 50 443 1,719 2,162 485 1985
Charleston, SC
East Ridge Crossing 1,523 832 2,494 74 101 731 2,568 3,299 528 1988
Chattanooga, TN
East Towne Xing (E) ---- 867 2,765 584 71 786 3,359 4,145 583 1989
Knoxville, TN
Garden City Plaza (E) ---- 1,056 2,569 139 29 580 3,155 3,735 940 1984
Garden City, KS
Genesis Square 1,134 227 1,435 939 ---- 223 2,378 2,601 213 1990
Crossville, TN
Girvin Plaza ---- 898 1,998 99 142 756 2,097 2,853 325 1989-1990
Jacksonville, FL
Greenport Towne Ctr 4,681 659 6,161 132 ---- 659 6,293 6,952 428 1993-1994
Hudson, NY
Hampton Plaza 2,170 973 2,689 14 ---- 965 2,711 3,676 426 1989-1990
Tampa, FL
Henderson Square 7,267 428 8,074 68 ---- 432 8,138 8,570 384 1994-1995
Henderson, NC
Hollins Plantation 1,272 229 1,845 232 ---- 198 2,108 2,306 581 1985
Roanoke, VA
Home Quarters Warehouse ---- 2,739 ---- 59 ---- 2,738 60 2,798 6 1994
South Portland, ME
Jasper Square (E) ---- 235 1,423 592 ---- 235 2,015 2,250 494 1986
Jasper, AL
Jean Ribaut Square 4,206 505 4,007 1,311 ---- 505 5,318 5,823 1,281 1983-1984
Beaufort, SC
Jean Ribaut K-Mart ---- 317 2,065 654 ---- 340 2,696 3,036 324 1983-1984
Beaufort, SC
Karns Corner 1,051 206 1,360 772 ---- 206 2,132 2,338 366 1987
Knoxville, TN
Keystone Crossing 2,402 938 2,216 44 113 825 2,260 3,085 526 1989
Tampa, FL
Kingston Overlook ---- 1,693 5,664 ---- ---- 1,693 5,664 7,357 ---- 1996
Knoxville, TN
Lady's Island (E) ---- 300 2,323 237 ---- 300 2,560 2,860 284 1992
Beaufort, SC
Lagrange Commons ---- 835 5,765 ---- ---- 835 5,765 6,600 17 1995-1996
Lagrange, NY
Lakeshore Station ---- 200 401 10 ---- 200 411 611 29 1993-1994
Gainesville, GA
Longview Crossing 485 ---- 1,308 ---- ---- ---- 1,308 1,308 269 1988
Hickory, NC
Lowe's Plaza 5,363 1,427 4,440 (28) ---- 1,427 4,412 5,839 359 1992-1993
Joplin, MO
Lunenburg Crossing ---- 1,020 2,308 (26) ---- 1,019 2,283 3,302 133 1993-1994
Lunenburg, MA
North Creek Plaza ---- 98 1,201 38 ---- 97 1,240 1,337 146 1983
Greenwood, SC
North Haven Crossin 8,667 3,229 8,061 1 ---- 3,229 8,062 11,291 722 1992-1993
North Haven, CT
Northridge Plaza (E ---- 1,087 2,970 1,996 ---- 1,244 4,809 6,053 1,303 1984
Hilton Head, SC
Northwoods Plaza 1,362 496 1,403 86 ---- 496 1,489 1,985 174 1995-1996
Albemarle, NC
Oaks Crossing ---- 571 2,885 (1,146) 253 655 1,402 2,057 510 1988
Otsego, MI
Orange Plaza ---- 395 2,111 4 ---- 395 2,115 2,510 255 1992
Roanoke, VA
Park Village ---- 586 2,874 46 ---- 520 2,986 3,506 379 1990
Lakeland, FL
Perimeter Place 1,805 764 2,049 290 ---- 770 2,333 3,103 628 1985
Chattanooga, TN
Rawlinson Place ---- 279 1,573 46 ---- 292 1,606 1,898 372 1987
Rock Hill, SC
Rhett At Remount ---- 67 1,877 848 ---- 67 2,725 2,792 420 1992
Charleston, SC
Sattler Square (E) ---- 792 4,155 128 ---- 705 4,370 5,075 818 1988-1989
Big Rapids, MI
Seacoast Shopping 6,079 1,374 4,164 2,558 179 1,195 6,722 7,917 862 1991
Seabrook, NH
Shenandoah Crossing 610 122 1,382 7 ---- 115 1,396 1,511 295 1988
Roanoke, FL
Signal Village ---- ---- 579 425 ---- ---- 1,004 1,004 210 1983-1984
Statesville, NC
Southgate Crossing ---- ---- 1,002 ---- ---- ---- 1,002 1,002 257 1984-1985
Bristol, TN
Sparta Crossing 932 180 1,463 29 ---- 145 1,527 1,672 275 1989
Sparta, TN
Springs Crossing ---- ---- 1,422 908 ---- ---- 2,330 2,330 324 1987
Hickory, NC
Statesboro Square (E) ---- 237 1,643 135 ---- 227 1,788 2,015 476 1986
Statesboro, GA
Stone East Plaza (E ---- 266 1,635 51 49 217 1,686 1,903 557 1987
Kingsport, TN
Suburban Center 5,325 3,223 3,796 1,228 ---- 3,223 5,024 8,247 185 1995
Knoxville, TN
Surry Square ---- ---- 1,402 ---- ---- ---- 1,402 1,402 377 1985
Elkin, NC
Tyler Square 2,021 196 2,021 (57) ---- 103 2,057 2,160 508 1986
Radford, VA
Wal*Mart Plaza North ---- 545 1,216 (38) ---- 377 1,346 1,723 380 1985
Pueblo, CO
Uvalde Plaza 867 574 1,506 (167) ---- 319 1,594 1,913 430 1987
Uvalde, TX
Valley Commons 1,049 342 1,819 576 ---- 342 2,395 2,737 447 1988
Salem, FL
Valley Crossing (E) ---- 2,390 6,471 3,843 37 3,034 9,633 12,667 1,382 1988
Hickory, NC
Village At Wexford ---- 555 3,009 3 ---- 501 3,066 3,567 527 1989-1990
Cadillac, MI
Village Square ---- 750 3,591 (340) 608 142 3,251 3,393 587 1989-1990
Houghton Lake, MI
Wildwood Plaza ---- 429 1,082 1,103 72 357 2,185 2,542 495 1985
Salem, VA
Willow Springs Plaza 6,182 2,917 6,107 4,985 ---- 2,917 11,092 14,009 1,142 1991
Nashua, NH
Office Buildings
Park Place 2,147 ---- 3,590 709 ---- 231 4,068 4,299 1,209 1984
Chattanooga, TN
Disposals
Chester Plaza ---- 774 1,524 ---- 2,298 ---- ---- ---- ---- 1995-1996
Iron Bridge, VA (F)
Lakeshore Crossing ---- 1,723 3,446 (26) 5,143 ---- ---- ---- ---- 1993-1994
Gainesville, GA (F)
Lowe's' Plaza ---- 1,154 4,690 13 5,857 ---- ---- ---- ---- 1993-1994
Benton Harbor, M (F)
W Broad St Hannaford ---- 2,407 1,867 37 4,311 ---- ---- ---- ---- 1995
Richmond, VA (F)
Lowe's Plaza --- 1,192 5,136 --- 6,328 --- --- --- --- 1991-1992
Adrian, MI (F)
Other
CBL & Associates, LP ---- ---- ---- ---- ---- ---- ---- ---- 775 ----
Westchester Mall ---- 7,000 10,000 ---- ---- 7,000 10,000 17,000 21 1996
Cortlandt, NY
Developments in Progress,
Consisting of Construction and
Development Property 141,990 2,840 ---- 97,401 2,093 ---- 98,148 98,148 ---- ----
TOTALS $590,295 $132,974 $768,598 $231,102 $30,878 $119,965 $981,831 $1101796 $114,536
Schedule III
(A) Initial cost represents the total cost capitalized including carrying cost at the end of the first
fiscal year in which the property opened or was acquired.
(B) Encumbrances represent the mortgage notes payable balances at December 31, 1996.
(C) The aggregate cost of land and buildings and improvements for federal income tax purposes is
approximately $935 million at December 31, 1996.
(D) Depreciation for all properties is computed over the useful life which is generally forty years.
(E) Property is pledged as collateral on the secured lines of credit used for development properties.
(F) Lowes - Benton Harbor, Michigan, Lowes - Adrian, Michigan, West Broad St. Sam's - Richmond, Virginia,
Chester Plaza - Iron Bridge, Virginia, Lakeshore Crossing - Gainesville, Georgia were sold during 1996.
CBL & ASSOCIATES PROPERTIES, INC.
REAL ESTATE ASSETS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
The changes in real estate assets and accumulated depreciation
for the years ending December 31, 1996, December 31, 1995, and
December 31, 1994 (dollars in thousands):
1996 1995 1994
------------ ------------ ------------
REAL ESTATE ASSETS:
Balance at beginning of period $ 848,756 $ 747,228 $ 628,954
Additions during the period:
Additions and improvements 165,035 75,533 115,872
Acquisitions of property 123,372 32,301 3,638
(Deductions) during the period:
Cost of sales (34,720) (5,701) (1,236)
Write-off of development projects (646) (605)
Outparcel land transferred to CBL -- -- --
------------ ------------ ------------
Balance at end of period $1,101,797 $ 848,756 $ 747,228
============ ============ ============
ACCUMULATED DEPRECIATION:
Balance at beginning of period $ 89,818 $ 67,503 $ 50,635
Accumulated Depreciation on
properties sold (423) -- --
Depreciation Expense 25,141 22,315 16,868
------------ ------------ ------------
Balance at end of period $ 114,536 $ 89,818 $ 67,503
============ ============ ============
Schedule IV
CBL & ASSOCIATES PROPERTIES, INC.
MORTGAGE LOANS ON REAL ESTATE
AT DECEMBER 31, 1996
(dollars in thousands)
Carrying Mortgages
Monthly Balloon Face Amount Subject to
Final Payment Payment Amount of Delinquent
Interest Maturity Amount at Prior of Mortgage Principal
Name of Center/Location Rate Date (1) Maturity Leins Mortgage (2) or Interest
- ----------------------- -------- -------- ------- --------- ------ --------- --------- -----------
COMMUNITY CENTERS
Bi-Lo South 9.50% 12/96(3) $ 15 $ 1,598 None $ 1,608(3) $ 1,608 $ 0
Cleveland, TN
Gaston Square 11.00% 10/97 15 1,621 None 1,637 1,637 0
Gastonia, NC
Inlet Crossing 11.00% 10/97 27 1,942 None 1,942 1,942 0
Myrtle Beach, SC
Olde Brainerd Centre 9.50% 12/06 20 2,746 None 2,792(3) 2,792 0
Chattanooga, TN
Signal Hills Plaza 11.00% 10/97 20 2,267 None 2,306 2,306 0
Statesville, NC
Soddy Daisy Plaza 9.50% 12/06 14 1,859 None 1,982(3) 1,982 0
Soddy Daisy, TN
Other 10.00% 07/98- 2,591 2,591 0
09/03 ------- --------- ------ --------- --------- -----------
$111 $12,033 $14,858 $14,858 $ 0
======= ========= ====== ========= ========= ============
(1) Equal monthly installments comprised of principal and interest unless otherwise noted.
(2) The aggregate carrying value for federal income tax purposes is approximately $14,858 at December 31, 1996.
(3) Mortgage has been extended on a month to month basis at the same terms while renegotiating mortgage
extension.
CBL & ASSOCIATES PROPERTIES, INC,
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
1996 1995 1994
------------ ------------ ------------
Beginning Balance $ 34,262 $ 32,651 $ 29,471
Additions 3,697 2,006 3,344
Other Reductions 19,908 0 0
Payments (3,193) 395 164
------------ ------------ ------------
Ending Balance $ 14,858 $ 34,262 $ 32,651
============ ============ ============
Exhibit
Number Description
- -------- -------------------------------------------------
3.1 Amended and Restated Certificate of Incorporation
of the Company(a)
3.2 Amended and Restated Bylaws of the Company(a)
4 See Amended and Restated Certificate of
Incorporation of the Company,
relating to the Common Stock(a)
10.1 Partnership Agreement of the Operating
Partnership(a)
10.2 Property Management Agreement between the
Operating Partnership and the Management
Company(a)
10.3 Property Management Agreement relating to Retained
Properties(a)
10.4.1 CBL & Associates Properties, Inc. 1993 Stock
Incentive Plan(a)
10.4.2 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Charles B. Lebovitz
10.4.3 Non-Qualified Stock Option Agreement, dated May
10, 1994, for James L. Wolford
10.4.4 Non-Qualified Stock Option Agreement, dated May
10, 1994, for John N. Foy
10.4.5 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Jay Wiston
10.4.6 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Ben S. Landress
10.4.7 Non-Qualified Stock Option Agreement, dated May
10, 1994, for Stephen D. Lebovitz
10.4.8 Stock Restriction Agreement, dated December 28,
1994, for Charles B. Lebovitz
10.4.9 Stock Restriction Agreement, dated December 2,
1994, for John N. Foy
10.4.10 Stock Restriction Agreement, dated December 2,
1994, for Jay Wiston
10.4.11 Stock Restriction Agreement, dated December 2,
1994, for Ben S. Landress
10.4.12 Stock Restriction Agreement, dated December 2,
1994, for Stephen D. Lebovitz
10.5 Purchase Agreement relating to Frontier Mall(b)
10.6.1 Purchase Agreement relating to Georgia Square
(JMB)(b)
10.6.2 Purchase Agreement Relating to Georgia Square
(JCPenney)(b)
10.7 Purchase Agreement relating to Post Oak Mall(b)
10.8 Indemnification Agreements between the Company and
the Management Company and their officers and
directors(a)
10.9.1 Employment Agreement for Charles B. Lebovitz(a)
10.9.2 Employment Agreement for James L. Wolford(a)
10.9.3 Employment Agreement for John N. Foy(a)
10.9.4 Employment Agreement for Jay Wiston(a)
10.9.5 Employment Agreement for Ben S. Landress(a)
10.9.6 Employment Agreement for Stephen D. Lebovitz(a)
10.10 Subscription Agreement relating to purchase of the
Common Stock and Preferred Stock of the Management
Company(a)
10.11 Option Agreement relating to certain Retained
Properties(a)
10.12 Option Agreement relating to Outparcels(a)
10.13.1 Property Partnership Agreement relating to
Hamilton Place(a)
10.13.2 Property Partnership Agreement relating to
CoolSprings Galleria(a)
10.14.1 Acquisition Option Agreement relating to Hamilton
Place(a)
10.14.2 Acquisition Option Agreement relating to the
Hamilton Place Centers(a)
10.14.3 Acquisition Option Agreement relating to the
Office Building(a)
10.15 Revolving Credit Agreement between the Operating
Partnership and First Tennessee Bank, National
Association, dated as of March 2, 1994(c)
10.16 Revolving Credit Agreement, dated July 28, 1994,
between the Operating Partnership and Wells Fargo
Advisors Funding, Inc., NationsBank of Georgia,
N.A. and First Bank National Association(d)
10.17 Revolving Credit Agreement, dated October 14,
1994, between the Operating Partnership and
American National Bank and Trust Company of
Chattanooga(e)
10.18 Revolving Credit Agreement, dated November 2,
1994, between the Operating Partnership and First
Tennessee Bank National Association(e)
10.19 Promissory Note Agreement between the Operating
Partnership and Union Bank of Switzerland dated
May 5, 1995(f)
10.20 Amended and Restated Loan Agreement between the
Operating Partnership and First Tennessee Bank
National Association dated July 12, 1995(g)
10.21 Second Amendment to Credit Agreement between the
Operating Partnership and Wells Fargo Realty
Advisors Funding, Inc. dated July 5, 1995(g)
10.22 Consolidation, Amendment, Renewal, and Restatement
of Notes between the Galleria Associates, L.P. and
The Northwestern Mutual Life Insurance Company(h)
10.23 Promissory Note Agreement between High Point
Development Limited Partnership and The
Northwestern Mutual Life Insurance Company
dated January 26, 1996(i)
10.24 Promissory Note Agreement between Turtle Creek
Limited Partnership and Connecticut General Life
Insurance Company dated February 14, 1996(i)
10.25 Amended and Restated Credit Agreement between the
Operating Partnership and Wells Fargo Bank N.A.
etal dated September 26, 1996. (j)
10.26 Promissory Note Agreement between the Operating
Partnership and Compass Bank dated September 17,
1996. (j)
10.27 Promissory Note Agreement between St Clair Square
Limited Partnership and Wells Fargo National
Bank dated, December 11, 1996.
10.28 Promissory Note Agreement between Lebcon
Associates and Principal Mutual Life Insurance
Company dated, March 18, 1997.
10.29 Promissory Note Agreement between Westgate Mall
Limited Partnership and Principal Mutual Life
Insurance Company dated, February 16, 1997.
10.30 Amended and Restated Credit Agreement between the
Operating Partnership and First Tennessee Bank
etal dated February 24, 1997.
13 Company's 1996 Annual Report to Shareholders
21 Subsidiaries of the Company
23 Consent of Arthur Andersen LLP
24 Powers of Attorney
27 Financial Data Schedule
(a) Incorporated by reference to Post-Effective
Amendment No. 1 to the Company's Registration
Statement on Form S-11 (No. 33-67372), as filed
with the Commission on January 27, 1994.
(b) Incorporated by reference to Amendment No. 2 to
the Company's Registration Statement on Form S-11
(No. 33-67372), as filed with the Commission on
October 26, 1993.
(c) Incorporated herein by reference to the Company's
Annual Report in Form 10-K for the fiscal year
ended December 31, 1993.
(d) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1994.
(e) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1994.
(f) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
(g) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended June 30, 1995.
(h) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1995.
(i) Incorporated by reference to the Company's Annual
Report in Form 10-K for the fiscal year ended
December 31, 1995.
(j) Incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
A management contract or compensatory plan or
arrangement required to be filed pursuant to Item
14(c) of this report.