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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998 OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from __________________
to _______________
Commission File Number 0-20707
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 63-1098468
(State of organization) (I.R.S. employer
identification no.)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal executive
offices)
Registrant's telephone number, including area code: (205) 250-8700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Not applicable Not applicable
Securities registered pursuant to Section 12(g) of the Act: Class A Units of
Limited Partnership Interest
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 and (2) has been subject to such filing
requirements for the past 90 days. YES 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. |_|
Documents Incorporated by Reference
None.
PART I
Item 1. Business.
As used herein, the terms "CRLP" and "Operating Partnership" include
Colonial Realty Limited Partnership, a Delaware limited partnership, and its
subsidiaries and other affiliates (including, Colonial Properties Services
Limited Partnership and Colonial VRS L.L.C.) or, as the context may require,
Colonial Realty Limited Partnership only. As used herein, the term "Company"
includes Colonial Properties Trust, an Alabama real estate investment trust, and
one or more of its subsidiaries and other affiliates (including CRLP, Colonial
Properties Services Limited Partnership and Colonial Properties Services, Inc.)
or, as the context may require Colonial Properties Trust only. As used herein,
the terms "we", "us", and "our" refer to Colonial Realty Limited Partnership.
This annual report on Form 10-K contains certain "forward-looking
statements", including but not limited to anticipated timetables for
acquisitions, developments and expansions, expected economic growth in
geographic markets where CRLP owns or expects to own properties, and plans for
continuing CRLP's diversified strategy. These statements involve risks and
uncertainties that may cause actual results to be materially different from
those anticipated. Prospective investors should specifically consider, in
connection with these forward-looking statements, the various risk factors
identified herein and in CRLP's filings with the SEC which could cause actual
results to differ, including downturns in local or national economies,
competitive factors, the availability of suitable properties for acquisition at
favorable prices, and other risks inherent in the real estate business.
CRLP is the Operating Partnership of the Company, which is one of the
largest owners, developers and operators of multifamily, retail and office
properties in the Sunbelt region of the United States. It is a fully-integrated
real estate company, whose activities include ownership of a diversified
portfolio of 106 properties as of December 31, 1998, located in Alabama,
Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas,
and Virginia, development of new properties, acquisition of existing properties,
build-to-suit development, and the provision of management, leasing, and
brokerage services for commercial real estate. As of December 31, 1998, CRLP
owned 49 multifamily apartment communities containing a total of 15,381
apartment units (the "Multifamily Properties"), 40 retail properties containing
a total of approximately 13.5 million square feet of retail space (the "Retail
Properties"), 17 office properties containing a total of approximately 2.7
million square feet of office space (the "Office Properties"), and certain
parcels of land adjacent to or near three of these properties (the "Land"). (The
Multifamily Properties, the Retail Properties, the Office Properties and the
Land are referred to collectively as the "Properties"). As of December 31, 1998,
the Multifamily Properties that had achieved stabilized occupancy, the Retail
Properties, and the Office Properties were 93.5%, 91.9% and 92.2% leased,
respectively.
CRLP's executive offices are located at 2101 Sixth Avenue North,
Suite 750, Birmingham, Alabama, 35203 and its telephone number is (205)
250-8700. CRLP was formed in Delaware on August 6, 1993.
Formation of the Company
The Operating Partnership were formed to succeed to substantially all
of the interests of Colonial Properties, Inc., an Alabama corporation
("Colonial"), its affiliates and certain others in a diversified portfolio of
multifamily, retail, and office properties located in Alabama, Florida, and
Georgia and to the development, acquisition, management, leasing, and brokerage
businesses of Colonial.
On September 29, 1993, (i) the Company consummated an initial public
offering (the "IPO") of 8,480,000 of its common shares of beneficial interest,
$.01 par value per share ("Common Shares"), (ii) the Operating Partnership
assumed ownership of 36 Properties (or interests therein) held by Thomas H.
Lowder, James K. Lowder, Robert E. Lowder, and their mother, Catherine Lowder
(the "Lowder family"), and third-party partners of the Lowder family, and the
operating businesses of Colonial, (iii) the Company transferred the net proceeds
from the IPO through Colonial Properties Holding Company, Inc. ("CPHC"), which
was dissolved in 1998, to the Operating Partnership, in exchange for 8,480,000
units of limited partnership interest in the Operating Partnership ("OP Units"),
(iv) the Operating Partnership repaid approximately $150.2 million of
indebtedness and prepayment penalties associated therewith secured by certain of
the Properties, and (v) the Operating Partnership established a $35.0 million
line of credit with SouthTrust Bank, which has since been increased to $250.0
million, to fund development activities and property acquisitions and for
general corporate purposes (collectively, the "Formation Transactions"). On
October 28, 1993, the underwriters of the IPO exercised an over-allotment option
to purchase an additional 686,200 shares.
Recent Developments
Since the Company's IPO, CRLP has significantly expanded its
portfolio of Properties and its operating businesses. Acquisitions by CRLP of
new properties represent a total investment of over $1.3 billion. CRLP has also
completed the expansion of eleven multifamily properties since the IPO, adding a
total of 2,348 units to its multifamily portfolio. CRLP currently has 12 active
expansion and development projects in progress for Multifamily Properties, one
Retail Property development, and two Office Property developments . CRLP has
also disposed of six Multifamily Properties representing 2,464 apartment units,
one Office Property representing 25,000 square feet of office space, and entered
into two joint ventures.
The following is a summary of CRLP's acquisition, disposition, joint
venture, and development activity in 1998.
Acquisition and Disposition Activity
CRLP acquired four Multifamily Properties, including one in Florida,
one in Georgia, one in Texas and one in South Carolina containing 1,026 units
for a total purchase price of $48.2 million.
CRLP added 2.9 million square feet of retail shopping space
(including 1.5 million square feet in two joint ventures) through the
acquisition of a community shopping center, an enclosed mall, and investment in
two joint ventures, at a net cost of $117.5 million.
CRLP also acquired five Office Properties, including three in
Alabama, one in Florida and one in Georgia, containing 827,000 square feet of
office space for a total purchase price of $87.9 million.
Joint Ventures
During the fourth quarter of 1998, CRLP entered into two joint
ventures. On December 9, 1998, CRLP and CBL & Associates Properties, Inc. formed
a joint venture to acquire Parkway City Mall in Huntsville, Alabama for $11.4
million. In addition to the purchase of the property, the joint venture will
redevelop the mall, with all related costs being shared equally by both venture
partners. At December 31, 1998, CRLP had invested approximately $5.7 million in
the joint venture and had an ending net investment balance of $5.9 million.
On December 29, 1998, CRLP and Prudential Real Estate Investors
("Prudential"), through its Property Investment Separate Account ("PRISA") fund,
entered into a joint venture to own Orlando Fashion Square. In connection with
the formation of the joint venture, Prudential acquired a 50% interest in
Orlando Fashion Square from CRLP for $52 million. Subsequent to formation, the
joint venture leveraged the property with a $65 million non-recourse note and
the proceeds from the issuance of the note were distributed equally to the joint
venture partners. CRLP's investment in the joint venture at December 31, 1998
was $20.2 million. CRLP used the proceeds from the Prudential joint venture to
fund acquisition and development activities.
Development Activity
During 1998 CRLP constructed 596 new apartment units in seven
multifamily communities and acquired land on which it intends to develop
additional multifamily communities during 1999. The aggregate cost of this
multifamily development activity was $90.4 million. As of December 31, 1998,
CRLP had 2,426 apartment units in 12 multifamily communities under development
or expansion. Management anticipates that the 12 multifamily projects will be
completed during 1999 through 2001. Management expects to invest an additional
$115 million over this period to complete these multifamily projects.
During 1998 CRLP began development of a community shopping center in
Birmingham, Alabama. The aggregate investment in the retail development during
1998 was $8.8 million. Management anticipates that it will invest an additional
$25.7 million to complete the retail development.
During 1998 CRLP began development of two office properties. The
aggregate investment in the office developments during 1998 was $5.3 million.
Management estimates that it will invest an additional $24.3 million to complete
these projects.
The table below provides an overview of CRLP's acquisition and
development activity during 1998:
Summary of 1998
Acquisition and Development
Activity
Completion or Type of Units (M) Cost or
Anticipated Name of Property GLA (R/O) Anticipated
Completion Date Property (1) Location (2) (3) Cost (4)
- ----------------- ---------------------------------- ----------------- --------- ----------- --------------
Acquisitions:
1st Qtr 98 Perimeter Corporate Park Huntsville, AL O 233,000 $ 19,500
1st Qtr 98 Independence Plaza Birmingham, AL O 106,000 7,500
2nd Qtr 98 CV at Ashley Plantation Bluffton, SC M 200 13,700
2nd Qtr 98 Orlando Fashion Square (6)Orlando, FL R 1,100,000 (5) 104,000
3rd Qtr 98 CV at River Hills I Tampa, FL M 248 8,500
3rd Qtr 98 CV at Haverhill San Antonio, TX M 322 17,200
3rd Qtr 98 Mansell Overlook 200 Atlanta, GA O 163,000 27,700
3rd Qtr 98 Shoppes at Mansell Atlanta, GA R 21,000 3,700
3rd Qtr 98 Shades Brook Building Birmingham, AL O 35,000 3,100
3rd Qtr 98 Concourse Center Tampa, FL O 290,000 30,100
3rd Qtr 98 CV at Walton Way Augusta, GA M 256 8,800
4th Qtr 98 Bel Air Mall Mobile, AL R 1,434,000 89,100
4th Qtr 98 Parkway City Mall (6)Huntsville, AL R 414,000 11,400
Developments:
1st Qtr 98 CV at River Hills III Tampa, FL M 276 14,186
1st Qtr 98 CV at Inverness Birmingham, AL M 84 6,631
2nd Qtr 98 CG at Hunter's Creek Orlando, FL M 496 33,426
2nd Qtr 98 CG at Bayshore II Bradenton, FL M 164 9,289
1st Qtr 98 CG at Wesleyan I Macon, GA M 240 13,503
1st Qtr 99 CG at Inverness Lakes II (expansion) Mobile, AL M 132 8,900
4th Qtr 99 CV at Ashley Plantation (expansion) Bluffton, SC M 214 13,800
2nd Qtr 99 CG at Edgewater II (expansion) Huntsville, AL M 192 12,600
3rd Qtr 99 CG at Wesleyan II (expansion) Macon, GA M 88 6,200
2nd Qtr 00 CG at Liberty Park Birmingham, AL M 300 26,218
2nd Qtr 00 CV at Heather Glen Orlando, FL M 448 31,234
2nd Qtr 99 CG at Citrus Park Tampa, FL M 176 12,300
2nd Qtr 99 CG at Lakewood Ranch Sarasota, FL M 288 20,300
1st Qtr 99 CG at Cypress Crossing Orlando, FL M 250 20,000
1st Qtr 00 CV at Madison Huntsville, AL M 336 23,000
3rd Qtr 00 CG at Promenade Montgomery, AL M 384 27,878
1st Qtr 00 CG at Ridgeland Jackson, MS M 170 12,400
1st Qtr 00 Colonial Promenade Trussville Birmingham, AL R 386,000 31,000
4th Qtr 99 1800 International Park Birmingham, AL O 149,457 16,600
4th Qtr 99 Colonial Center at Research Park Huntsville, AL O 133,368 13,000
==============
Total $ 696,765
==============
(1)In the listing of Multifamily Property names, CG has been used as an
abbreviation for Colonial Grand and CV has been used as an abbreviation for
Colonial Village.
(2)M refers to Multifamily Properties, R refers to Retail Properties, and O
refers to Office Properties.
(3)Units (in this table only) refers to multifamily apartment units and GLA
refers to gross leasable area of retail and office space.
(4)Amounts in thousands.
(5)Includes 739,000 square feet of GLA and 361,000 square feet of tenant owned
space.
(6)Properties are 50% owned by CRLP at December 31, 1998.
Multifamily Property Acquisitions
Colonial Village at Ashley Plantation--On May 1, 1998, CRLP acquired
Colonial Village at Ashley Plantation, a 200-unit apartment complex developed in
1997 on approximately 21 acres of land in Bluffton, South Carolina. The average
unit size is 1,026 square feet, and the average unit market rent is $768 per
month. The purchase price of $13.7 million was financed through an advance on
CRLP's unsecured line of credit.
Colonial Village at River Hills I--On July 1, 1998, CRLP acquired
Colonial Village at River Hills I, a 248-unit phase of the River Hills apartment
complex on approximately 30 acres of land in Tampa, Florida. The multifamily
community was developed in 1985 and was 90% leased at the time of acquisition.
The average unit size is 907 square feet with average unit market rent of $549
per month. The purchase price of $8.5 million was funded through an advance on
CRLP's unsecured line of credit.
Colonial Village at Haverhill--On July 1, 1998, CRLP acquired a 79.8%
interest in Colonial Village at Haverhill, a 322-unit apartment complex on
approximately 19 acres of land in San Antonio, Texas. The multifamily community
was developed in 1998 and was 90% leased at the time of acquisition. The average
unit size is 1,019 square feet with average unit market rent of $857 per month.
The purchase price of $17.2 million was funded through an advance on CRLP's
unsecured line of credit. The remaining 20.2% ownership in this property is
reflected as "minority interest in consolidated operating property" in CRLP's
statement of income, and is included in "minority interest" on CRLP's balance
sheet and statement of cash flows.
Colonial Village at Walton Way --On July 30, 1998, CRLP acquired
Colonial Village at Walton Way, a 256-unit multifamily apartment community on
approximately 22 acres of land in Augusta, Georgia. The community was developed
in 1970 and 1988, and was 98% leased at the time of acquisition. The average
unit size is 993 square feet with average unit market rent of $671 per month.
The purchase price of $8.8 million was funded through an advance on CRLP's
unsecured line of credit.
CRLP intends to continue to pursue acquisitions in the Sunbelt region
of the United States that meet CRLP's acquisition criteria for property quality,
market strength, and investment return.
Completed Multifamily Expansion and Development Activity
Colonial Village at River Hills III--CRLP completed construction on a
276-unit expansion of Colonial Village at River Hills located in Tampa, Florida.
The community amenities include a clubhouse, a swimming pool, an exercise
center, an air-conditioned racquetball court, tennis courts, and laundry
facilities. Project development costs, including land acquisition costs, totaled
$14.2 million and were funded through advances on CRLP's line of credit. CRLP
completed construction in the first quarter of 1998.
Colonial Village at Inverness--CRLP completed construction on an
84-unit expansion of Colonial Village at Inverness located in Birmingham,
Alabama. This expansion phase offers the same amenities as the existing
community. Project development costs, including land acquisition costs, totaled
$6.6 million and were funded through advances on CRLP's line of credit. CRLP
completed construction in the first quarter of 1998.
Colonial Grand at Bayshore II--CRLP completed construction on a
164-unit expansion to this development located in Bradenton, Florida. CRLP
acquired the land (12.5 acres) at a cost of $1.0 million pursuant to an option
acquired at the time CRLP purchased the land for the existing Colonial Grand at
Bayshore development in November 1995. This expansion phase offers the same
amenities as the existing community. Project development costs, including land
acquisition costs, totaled $9.3 million and were funded through advances on
CRLP's line of credit. CRLP completed construction in the second quarter of
1998.
Colonial Grand at Hunter's Creek--CRLP completed construction on a
496-unit development located in Orlando, Florida. CRLP acquired the land (36
acres) at a cost of $4.0 million. The new apartment community offers a variety
of amenities, including a swimming pool and spa, an exercise room, enclosed
garages, tennis courts, and a car wash. Project development costs, including
land acquisition costs, totaled $33.4 million and were funded through advances
on CRLP's line of credit. CRLP completed construction in the second quarter of
1998.
Colonial Grand at Wesleyan I--CRLP completed construction on a
240-unit development of Colonial Grand at Wesleyan located in Macon, Georgia
during 1998. Project development costs, including land acquisition costs,
totaled $13.5 million and were funded through advances on CRLP's line of credit.
CRLP completed construction in the first quarter of 1998.
Continuing Multifamily Expansion and Development Activity
Colonial Grand at Inverness Lakes II--CRLP continued construction on
a 132-unit expansion of Colonial Grand at Inverness Lakes located in Mobile,
Alabama during 1998. Project development costs, including land acquisition
costs, are expected to total $8.9 million and will be funded through advances on
CRLP's line of credit. CRLP expects to complete construction in the first
quarter of 1999.
Colonial Grand at Edgewater II--CRLP continued construction on a
192-unit expansion of Colonial Grand at Edgewater in Huntsville, Alabama during
1998. Project development costs, including land acquisition costs, are expected
to total $12.6 million and will be funded through advances on CRLP's line of
credit. CRLP expects to complete construction in the first quarter of 1999.
Colonial Grand at Wesleyan II--CRLP continued construction on an
88-unit expansion of Colonial Grand at Wesleyan located in Macon, Georgia during
1998. This expansion phase offers the same amenities as the existing community.
Project development costs, including land acquisition costs, are expected to
total $6.2 million and will be funded through advances on CRLP's line of credit.
CRLP expects to complete construction in the second quarter of 1999.
Colonial Village at Citrus Park--CRLP continued construction on a
176-unit development located in Tampa, Florida during 1998. The new apartment
community will offer a variety of amenities, including a swimming pool, fitness
center, resident business center, garages, covered parking and a gated entry.
Project development costs, including land acquisition costs, are expected to
total $12.3 million and will be funded through advances on CRLP's line of
credit. CRLP expects to complete construction in the second quarter of 1999.
Colonial Grand at Lakewood Ranch--CRLP continued construction on a
288-unit development located in Sarasota, Florida during 1998. The new
apartments will feature numerous luxuries that include crown molding, tiled
floors, chair railings, intrusion alarms, fireplaces and screened patios on all
first floor units. Amenities will include a swimming pool, fitness center,
tennis courts and a gated entry. Project development costs, including land
acquisition costs, are expected to total $20.3 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 1999.
New Multifamily Expansion and Development Activity
Colonial Village at Ashley Plantation--CRLP began construction on a
214-unit expansion of Colonial Village at Ashley Plantation located in Bluffton,
South Carolina during the second quarter of 1998. Project development costs,
including land acquisition costs, are expected to total $13.8 million and will
be funded through advances on CRLP's line of credit. CRLP expects to complete
construction in the fourth quarter of 1999.
Colonial Grand at Liberty Park-- CRLP began construction on a
300-unit development located in Birmingham, Alabama during the third quarter of
1998. The new apartments will feature numerous luxuries that include crown
molding, tiled floors, chair railings, intrusion alarms, fireplaces and screened
patios on all first floor units. Amenities will include a swimming pool, fitness
center, tennis courts and a gated entry. Project development costs, including
land acquisition costs, are expected to total $26.2 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Village at Heather Glen-- CRLP began construction on a
448-unit development located in Orlando, Florida during the third quarter of
1998. The new apartments will offer a variety of amenities, including a
clubhouse, car-care center, fitness center with a child play area, two swimming
pools, tennis courts, and a picnic area. Project development costs, including
land acquisition costs, are expected to total $31.2 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Grand at Cypress Crossing-- CRLP began construction on a
250-unit development located in Orlando, Florida during the third quarter of
1998. The new apartments will feature numerous luxuries including a security
system, automated climate control, highest-speed Internet access, and home
theatre pre-wiring. Project development costs, including land acquisition costs,
are expected to total $20.0 million and will be funded through advances on
CRLP's line of credit. CRLP expects to complete construction in the first
quarter of 1999.
Colonial Grand at Madison-- CRLP began construction on a 336-unit
development located in Huntsville, Alabama. The new apartments will offer a
variety of amenities, including a swimming pool and spa, an exercise room,
tennis courts, and a car wash. Project development costs, including land
acquisition costs, are expected to total $23.0 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the first quarter of 2000.
Colonial Grand at Promenade-- CRLP began construction on a 384-unit
development located in Montgomery, Alabama. The new apartments will offer a
variety of amenities, including a swimming pool, an exercise room, a clubhouse,
tennis courts, and a gated entry. Project development costs, including land
acquisition costs, are expected to total $27.9 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Grand at Ridgeland-- CRLP began construction on a 170-unit
development located in Jackson, Mississippi. The new apartments will offer a
variety of amenities, including a fitness center, swimming pool, garages, and
tennis courts. Project development costs, including land acquisition costs, are
expected to total $12.4 million and will be funded through advances on CRLP's
line of credit. CRLP expects to complete construction in the first quarter of
2000.
Retail Property Acquisitions and Mergers
Orlando Fashion Square--On May 29, 1998, CRLP acquired Orlando
Fashion Square, a 1.1 million square foot regional mall (including 361,000
square feet of tenant-owned space) in Orlando, Florida, for a total purchase
price of $104 million. The mall anchors include Burdine's, Sears, Gayfers, JC
Penney and General Cinemas. The entire purchase price was funded through an
advance on CRLP's unsecured line of credit.
Shoppes at Mansell--On July 1, 1998, CRLP completed the final phase of
its merger with certain affiliates of Johnson Development Company. The final
phase included the Shoppes at Mansell, a 21,000 square foot community shopping
center. The Shoppes at Mansell was developed in 1997 and was 95% occupied at the
time of the merger. The merger of Shoppes at Mansell, valued at $3.7 million,
was funded through the issuance of 76,809 limited partnership units valued at
$2.3 million, and an advance on CRLP's unsecured line of credit.
Bel Air Mall--On December 29, 1998, CRLP acquired Bel Air Mall, a 1.4
million square foot regional mall in Mobile, Alabama, for a total purchase price
of $89.1 million. The mall anchors include Parisian, Dillard's, Sears, JC
Penney, and Target. The purchase price was funded through the proceeds received
in connection with the formation of the Orlando Fashion Square Joint Venture and
an advance on CRLP's unsecured line of credit.
Retail Development Activity
Colonial Promenade Trussville--During the third quarter of 1998, CRLP
began the development of a 386,000 square foot retail shopping center in
Birmingham, Alabama. The shopping center development will be anchored by a
Wal-Mart Supercenter, Regal Cinemas, Marshall's Department Store, and Goody's
Family Clothing. Project expansion costs are expected to total $31.0 million and
will be funded through advances on CRLP's line of credit. CRLP expects to
complete the development during the first quarter of 2000.
Office Property Acquisitions
Perimeter Corporate Park--On January 1, 1998, CRLP acquired
Perimeter Corporate Park, an office park comprised of two multi-tenant
buildings in Huntsville, Alabama totaling 233,000 square feet of leasable area.
Major tenants include Mevatec, Schafer Corporation, Computer Systems
Technology, EER Systems Corporation, and Silicon Graphics. The purchase price
of $19.5 million was funded by the assumption of $5.7 million of debt and an
advance on CRLP's unsecured line of credit.
Independence Plaza--Also on January 1, 1998, CRLP acquired
Independence Plaza, a 106,000 square foot office building in Birmingham,
Alabama, for a purchase price of $7.5 million. Major tenants include AmSouth
Bank, the Cooney, Rikard & Curtin insurance firm and Wall Street Deli (executive
offices). The entire purchase price was funded through an advance on CRLP's
unsecured line of credit.
Mansell Overlook 200--On July 1, 1998, CRLP completed the final phase
of its merger with certain affiliates of Johnson Development Company. The final
phase included Mansell Overlook 200, a six-story office building containing
163,000 square feet of space. Mansell Overlook 200 was developed in 1997 and was
95% occupied at the time of the merger. This part of the merger, valued at $27.7
million, was funded through the issuance of 396,365 limited partnership units in
Colonial Realty Limited Partnership valued at $11.7 million, and an advance on
CRLP's unsecured line of credit.
Shades Brook Building--On July 13, 1998, CRLP acquired the Shades
Brook Building, a three-story office building containing 35,000 square feet of
space in Birmingham, Alabama. Shades Brook was acquired for a total purchase
price of $3.1 million, which was financed through the issuance of 28,492 limited
partnership units in Colonial Realty Limited Partnership valued at $871,000, and
an advance on CRLP's unsecured line of credit. Shades Brook was built in 1979
and was 93% occupied at the time of acquisition.
Concourse Center--On July 23, 1998, CRLP acquired Concourse Center,
an office park comprised of four multi-tenant buildings in Tampa, Florida
totaling 290,000 square feet of leasable area. The purchase price of $30.1
million was financed through an advance on CRLP's unsecured line of credit.
Concourse Center was built between 1981 and 1985 and was 99% occupied at the
time of acquisition.
Office Property Development Activity
1800 International Park--In August 1998, CRLP began development of a
six story multi-tenant office building in Birmingham, Alabama with a total of
149,457 square feet of leasable area. Project development costs are expected to
total $16.6 million and will be funded through advances on CRLP's unsecured
line of credit. CRLP expects to complete construction in the fourth quarter of
1999.
Colonial Center at Research Park--Also in August 1998, CRLP began
development of two office buildings in Huntsville, Alabama with a total of
133,368 square feet of leasable area. Colonial Center features Class A office
space with first-class amenities. Project development costs are expected to
total $13.0 million and will be funded through advances on CRLP's unsecured
line of credit. CRLP expects to complete construction in the fourth quarter of
1999.
Financing Activity
CRLP funded a large portion of its acquisitions and developments
through the issuance of debt securities and through cash contributions from the
Company through the issuance of its common shares. During 1998, the Company and
CRLP completed the following equity and debt transactions:
Common Share Offerings
(in thousands)
--------------------------------
Number of Price Per Gross Offering Net
Date ............... Common Share Proceeds Costs Proceeds
- -------------------- --------- ------- --------- --------- ---------
February ........... 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March .............. 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March .............. 381,046 $ 31.00 $ 11,182 $ 656 $ 11,156
April .............. 3,046,400 $ 30.12 $ 91,773 $ 4,973 $ 86,800
Debt Offering
Gross
Type of Proceeds
Date Note Maturity Rate (in thousands)
- -------------- -------- ---------- ---- --------
July Senior July, 2007 7.00% $175,000
On July 10, 1998, CRLP increased the borrowing capacity under its unsecured line
of credit from $200 million to $250 million. The credit facility, which is used
by CRLP primarily to finance additional property investments, bears interest at
a rate ranging between 80 and 135 basis points above LIBOR and is renewable in
July 2000. The line of credit agreement includes a competitive bid feature that
will allow CRLP to convert up to $125 million under the line of credit to a
fixed rate, for a fixed term not to exceed 90 days. As of December 31, 1998, the
balance outstanding on CRLP's line of credit was $174.5 million.
Business Strategy
The general business strategy of the Company and CRLP is to generate
stable and increasing cash flow and portfolio value for its shareholders. The
Company and CRLP (and its predecessor) have implemented this strategy
principally by (i) realizing growth in income from its existing portfolio of
properties, (ii) developing, expanding, and selectively acquiring additional
multifamily, retail, and office properties in growth markets located in the
Sunbelt region of the United States, where CRLP has first-hand knowledge of
growth patterns and local economic conditions, (iii) managing its own
properties, which has enabled it to better control operating expenses and
establish long-term relationships with its retail and office tenants, (iv)
maintaining the Company's third-party property management business, which has
increased cash flow and established additional relationships with tenants, and
(v) employing a comprehensive capital maintenance program to maintain properties
in first-class condition. CRLP's business strategy and the implementation of
that strategy are determined by CRLP's partners and may be changed from time to
time.
Financing Strategy
CRLP's strategy is to maintain coverage ratios in order to sustain
its investment grade status. CRLP's total market capitalization as of December
31, 1998, was $2.0 billion, and its ratio of debt to total market capitalization
was 45.1%. At December 31, 1998, CRLP's total debt included fixed-rate debt of
$681.2 million, or 74.9% of total debt, and floating-rate debt of $228.1
million, or 25.1% of total debt. CRLP has obtained interest rate protection for
$50.0 million of the floating-rate debt.
CRLP may from time to time reevaluate its borrowing policies in light
of then current economic conditions, relative costs of debt and equity capital,
market values of properties, growth and acquisition opportunities, and other
factors. CRLP may modify its borrowing policy and may increase or decrease its
ratio of debt to total market capitalization. To the extent that the board of
trustees of CRLP determines to seek additional capital, CRLP may raise such
capital through additional equity offerings by the Company, debt financings, or
retention of cash flow (subject to provisions in the Code requiring the
distribution by a REIT of a certain percentage of taxable income and taking into
account taxes that would be imposed on undistributed taxable income) or a
combination of these methods.
Property Management
CRLP is experienced in the management and leasing of multifamily,
retail, and office properties and believes that the management and leasing of
its own portfolio has helped the Properties maintain consistent income growth
and has resulted in reduced operating expenses from the Properties. This also
allows CRLP to establish additional relationships with tenants who may require
additional retail or office space and to identify potential acquisitions.
Operational Structure
Multifamily Division--The multifamily division of CRLP is responsible
for all aspects of CRLP's multifamily operations, including day-to-day
management and leasing of the 49 Multifamily Properties, as well as the
provision of third-party management services for apartment communities in which
CRLP does not have an ownership interest. The multifamily division utilizes
centralized functions of accounting, information technology, due diligence and
administrative services. Decisions for investments in acquisitions and
developments and for dispositions are also centralized. The multifamily division
has regional offices in Birmingham, Mobile and Montgomery, Alabama, Orlando and
Tampa, Florida, and Stockbridge, Georgia.
Retail Division--CRLP's retail division is responsible for all
aspects of CRLP's retail operations, including the provision of management and
leasing services for the 40 Retail Properties, as well as the provision of
third-party management services for retail properties in which CRLP does not
have an ownership interest and for brokerage services in other retail property
transactions. The retail division utilizes centralized functions of accounting,
information technology, due diligence and administrative services. Decisions for
investments in acquisitions and developments and for dispositions are also
centralized. The retail division has regional offices in Birmingham, Alabama,
Orlando, Florida, Macon, Georgia and Burlington, North Carolina.
Office Division--CRLP's office division is responsible for all
aspects of CRLP's commercial office operations, including the provision of
management and leasing services for the 17 Office Properties, as well as the
provision of third-party management services for office properties in which CRLP
does not have an ownership interest and for brokerage services in other office
property transactions. The office division utilizes centralized functions of
accounting, information technology, due diligence and administrative services.
Decisions for investments in acquisitions and developments and for dispositions
are also centralized. The office division has regional offices in Birmingham,
Alabama and Atlanta, Georgia.
Employees
CRLP employs approximately 900 persons, including on-site property
employees who provide services for the Properties that CRLP owns and/or manages.
Tax Status
CRLP has no provision for income taxes since all taxable income or
loss or tax credits are passed through to the partners. The Company has made an
election to be taxed as a REIT under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), commencing with its taxable year
ending December 31, 1993. If the Company qualifies for taxation as a REIT, the
Company generally will not be subject to Federal income tax to the extent it
distributes at least 95% of its REIT taxable income to its shareholders. Even if
the Company qualifies for taxation as a REIT, the Company may be subject to
certain state and local taxes on its income and property and to federal income
and excise taxes on its undistributed income.
Risk Factors
Set forth below are the risks that we believe are material to
investors who purchase or own our units of limited partnership interest. Our
units are redeemable for cash or, at the election of Colonial Properties Trust,
on a one-for-one basis for Colonial Properties Trust's shares of beneficial
interest.
Our performance and property value are subject to risks associated
with the real estate industry. If our assets do not generate income sufficient
to pay our expenses, service our debt and maintain our properties, we may not be
able to make expected distributions to our unitholders. Whether our properties
will generate sufficient revenue to pay our expenses and permit us to make
distributions to our unitholders will depend on whether we can attract tenants
at favorable rental rates and whether we can adequately control our costs.
Factors that may adversely affect our ability to attract tenants or to generate
sufficient revenue include:
o local conditions such as an oversupply of multifamily, retail
or office properties or a reduction in demand for
multifamily, retail or office properties;
o the attractiveness of our properties to residents, shoppers and
tenants; decreases in market rental rates; and
o our ability to collect rent from our tenants.
Factors that may adversely affect our operating costs include:
o the need to pay for adequate insurance and other operating costs,
including real estate taxes, which could increase over time; and
o the need to periodically repair, renovate and relet space.
Our expenses may remain constant even if our revenues drop. The
expenses of owning and operating a property are not necessarily reduced when
circumstances such as market factors and competition cause a reduction in income
from the property. As a result, if revenues drop, we may not be able to reduce
our expenses accordingly. Loan payments are an example of a cost that will not
be reduced simply because our revenues drop. If a property is mortgaged and we
are unable to meet the mortgage payments, the lender could foreclose on the
mortgage and take the property, resulting in a further reduction in revenues.
We may be unable to renew leases or relet space as leases expire.
When our tenants decide not to renew their leases upon their expiration, we may
not be able to relet the space. Even if the tenants do renew or we can relet the
space, the terms of renewal or reletting, including the cost of required
renovations, may be less favorable than current lease terms. If we are unable to
promptly renew the leases or relet the space, or if the rental rates upon such
renewal or reletting are significantly lower than expected rates, then our cash
flow and ability to service debt and make distributions to shareholders would be
adversely affected.
New acquisitions may fail to perform as expected. Assuming we are
able to obtain capital on commercially reasonable terms, we intend to
selectively acquire multifamily, retail or office properties where we perceive
strategic opportunities consistent with our strategy. Newly acquired properties
may fail to perform as expected. We may underestimate the costs necessary to
bring an acquired property up to the standards we have established for its
intended market position. In addition, we may not be in a position or have the
opportunity in the future to make suitable property acquisitions on favorable
terms. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
Competition for acquisitions could result in increased prices for
properties. We expect other major real estate investors with significant capital
to compete with us for attractive investment opportunities. These competitors
include publicly traded REITs, private REITs, investment banking firms and
private institutional investment funds. This competition could increase prices
for multifamily, retail or office properties.
Our development and expansion activities subject us to risks. We
intend to continue to develop new properties and expand existing properties
where we believe that development or expansion is consistent with our business
strategies. New projects subject us to a number of risks, including risks that:
o construction delays or cost overruns may increase project costs;
o permanent debt or equity financing may not be available on
acceptable terms to finance new development or expansion projects;
o we may fail to meet anticipated occupancy or rent levels;
o we may fail to secure required zoning, occupancy and other
governmental permits and authorizations; and
o changes in applicable zoning and land use laws may require us to
abandon projects prior to their completion, resulting in the loss of
development costs incurred prior to abandonment.
Because real estate investments are illiquid, we may not be able to
sell properties when appropriate. Real estate investments generally cannot be
sold quickly. We may not be able to vary our portfolio promptly in response to
economic or other conditions. This inability to respond to changes in the
performance of our investments could adversely affect our ability to service
debt and make distributions to our unitholders.
Scheduled debt payments could adversely affect our financial
condition. Our business is subject to risks normally associated with debt
financing. If principal payments due at maturity cannot be refinanced, extended
or paid with proceeds of other capital transactions, such as new equity capital,
our cash flow will not be sufficient in all years to repay all maturing debt. If
prevailing interest rates or other factors at the time of refinancing, such as
the possible reluctance of lenders to make commercial real estate loans, result
in higher interest rates, increased interest expense would adversely affect cash
flow and our ability to service our debt and make distributions to unitholders.
Our obligation to comply with financial covenants in our debt
agreements could restrict our range of operating activities. Our credit facility
contains customary restrictions, requirements and other limitations on our
ability to incur indebtedness, including:
o debt to assets ratios;
o secured debt to total assets ratios;
o debt service coverage ratios; and
o minimum ratios of unencumbered assets to unsecured debt.
The indenture under which our senior unsecured indebtedness is issued
contains financial and operating covenants including coverage ratios. Our
indenture also limits our ability to (1) incur secured and unsecured
indebtedness, (2) sell all or substantially all or our assets and (3) engage in
mergers, consolidations and acquisitions.
Our degree of leverage could limit our ability to obtain additional
financing. Our "debt to market capitalization" ratio, which we calculate as
total debt as a percentage of total debt plus the market value of our
outstanding units and the outstanding shares of beneficial interest of Colonial
Properties Trust, was approximately 45.1% as of December 31, 1998. Increases in
our leverage could adversely affect our ability to obtain additional financing
in the future for (1) working capital, (2) capital expenditures, (3)
acquisitions, (4) development or (4) other general corporate purposes, and may
make us more vulnerable to a downturn in business or the economy generally.
Rising interest rates could adversely affect our cash flow. Advances
under our credit facility bear interest at a variable rate ranging between 80
and 135 basis points above LIBOR. We may borrow additional money with variable
interest rates in the future, and may enter into other transactions to limit our
exposure to rising interest rates as appropriate and cost effective. Increases
in interest rates, or the loss of the benefits of hedging agreements, would
increase our interest expense, which would adversely affect cash flow and our
ability to service our debt and make distributions to unitholders.
Environmental problems are possible and can be costly. Federal, state
and local laws and regulations relating to the protection of the environment may
require a current or previous owner or operator of real property to investigate
and clean up hazardous or toxic substances or petroleum product releases at the
property, without regard to whether the owner or operator knew or caused the
presence of the contaminants. If unidentified environmental problems arise at
one of our properties, we may have to make substantial payments to a
governmental entity or third parties for property damage and for investigation
and clean-up costs. Even if more that one person may have been responsible for
the contamination, we may be held responsible for all of the clean-up costs
incurred. Our liability under environmental laws could adversely affect our cash
flow and our ability to make distributions to our unitholders.
At one of our properties, the Gadsden Mall in Gadsden, Alabama, four
underground storage tanks were removed in 1989. In connection with the removal
of these gasoline storage tanks, associated petroleum contamination was
discovered in the soil and groundwater. We are currently working with the state
regulatory agency to remediate the contamination in accordance with applicable
requirements. Because the tanks were registered with the Alabama Department of
Environmental Management and the facility was in compliance with regulations
prior to the incident, we have been reimbursed under the Alabama Underground
Storage Tank Trust Fund for the costs incurred to date in connection with the
ongoing cleanup, and expect to be reimbursed for the remaining costs as well. We
have received a "no further action" letter from the Alabama Department of
Environmental Management.
On December 29, 1998, we acquired Bel Air Mall in Mobile, Alabama.
During the course of our environmental due diligence, we identified several
different areas of the property in which contamination is present. One of those
areas involves drycleaner solvent; the others involve petroleum contamination.
The Alabama Department of Environmental Management is overseeing the
investigation and cleanup of the drycleaner contamination. It is possible that a
claim could be asserted against us, as owner of the property, for the
investigation and remediation of the contamination. Pursuant to the purchase and
sale agreement, the former owner of the property purchased a $10 million
insurance policy and established escrow accounts totaling $1,275,000 to cover
the costs associated with investigating and remediating the contaminated areas.
In addition, subject to limitations, the seller will be performing all required
remediation of the drycleaner contamination.
Some of our general partner's trustees and officers have conflicts of
interest and could exercise influence in a manner inconsistent with unitholders'
best interests. As a result of their substantial ownership of Colonial
Properties Trust's common shares and our units, Messrs. Thomas Lowder, Colonial
Properties Trust's Chairman of the Board, Chief Executive Officer and President,
and James Lowder, Harold Ripps, Herbert Meisler and William Johnson, each of
whom is a trustee of Colonial Properties Trust, might seek to exert influence
over our decisions as to sales or refinancings of particular properties we own.
Any such exercise of influence might produce decisions which are not in the best
interest of all of our unitholders.
The Lowder family, which includes Thomas, James, Robert and Catherine
Lowder and their affiliates, holds interests in companies that have performed
construction management, insurance brokerage and other services with respect to
our properties. These companies may perform similar services for us in the
future. As a result, the Lowder family may realize benefits from transactions
between such companies and us that are not realized by other unitholders. In
addition, Thomas Lowder and his brother, James Lowder, as trustees of Colonial
Properties Trust, may be in a position to influence us to do business with
companies in which the Lowder family has a financial interest. Our policies may
not be successful in eliminating the influence of conflicts. Moreover,
transactions with companies controlled by the Lowder family, if any, may not be
on terms as favorable to us as we could obtain in an arms-length transaction
with a third party.
We do not control our management, leasing and brokerage businesses.
To facilitate maintenance of Colonial Properties Trust's REIT qualification, we
have a "non-controlled subsidiary" which conducts management, leasing and
brokerage business for properties we do not wholly own. While we own 99% of the
economic interest in the noncontrolled subsidiary, 99% of its voting stock is
owned by members of the Lowder family. We therefore do not control the timing or
amount of distributions or the management and operation of the noncontrolled
subsidiary. We also lack the ability to set the business policies and operations
of the noncontrolled subsidiary.
We are subject to risks associated with the property management,
leasing and brokerage businesses. In addition to the risks we face as a result
of our ownership of real estate, we face risks relating to the property
management, leasing and brokerage businesses of our "non-controlled subsidiary,"
including risks that:
o management contracts or service agreements with third-party owners will be
lost to competitors;
o contracts will not be renewed upon expiration or will not
be renewed on terms consistent with current terms; and
o leasing and brokerage activity generally may decline.
Each of these developments could adversely affect our ability to make
debt service payments or expected distributions to unitholders.
We are dependent on external sources of capital. To qualify as a
REIT, Colonial Properties Trust must distribute to its shareholders each year at
least 95% of its net taxable income, excluding any net capital gain. Our
partnership agreement generally requires us to distribute substantially all of
our net cash revenues each quarter and to make reasonable efforts to distribute
to Colonial Properties Trust enough cash for it to meet the 95% distribution
requirement. Because of these distribution requirements, it is not likely that
we will be able to fund all future capital needs from income from operations. We
therefore will have to rely on third-party sources of capital which may or may
not be available on favorable terms or at all. Our access to third-party sources
of capital depends on a number of things, including the market's perception of
our growth potential and our current and potential future earnings. Moreover,
additional equity offerings may result in substantial dilution, and additional
debt financing may substantially increase our leverage.
We intend to qualify as a partnership, but cannot guarantee that we
will qualify. We intend to qualify as a partnership for federal income tax
purposes. However, we will be treated as a corporation for federal income tax
purposes if we are a "publicly traded partnership," unless at least 90% of our
income it qualifying income as defined in the tax code. The income requirements
applicable to REITs and the definition of qualifying income for purposes of this
90% test are similar in most, but not all, respects. Qualifying income for the
90% test generally includes passive income, such as specified types of real
property rents, dividends and interest. We cannot guarantee that we will meet
this qualifying income test. If we were to be taxed as a corporation, we would
incur substantial tax liabilities, Colonial Properties Trust would fail to
qualify as a REIT for tax purposes and Colonial Properties Trust's and our
ability to raise additional capital could be impaired.
Colonial Properties Trust intends to qualify as a REIT, but we cannot
guarantee that it will qualify. We believe that Colonial Properties Trust has
qualified for taxation as a REIT for federal income tax purposes commencing with
its taxable year ended December 31, 1993. If Colonial Properties Trust qualifies
as a REIT, it generally will not be subject to federal income tax on its income
that it distributes to its shareholders. Colonial Properties Trust plans to
continue to meet the requirements for taxation as a REIT, but it may not qualify
as a REIT. Many of the REIT requirements are highly technical and complex. The
determination that Colonial Properties Trust is a REIT requires an analysis of
various factual matters and circumstances that may not be totally within its
control. For example, to qualify as a REIT, at least 95% of our gross income
must come from certain sources that are itemized in the REIT tax laws. Colonial
Properties Trust also is required to distribute to shareholders at least 95% of
its REIT taxable income, excluding capital gains. The fact that Colonial
Properties Trust holds its assets through Colonial Realty further complicates
the application of the REIT requirements. Even a technical or inadvertent
mistake could jeopardize Colonial Properties Trust's REIT status. Furthermore,
Congress and the IRS might make changes to the tax laws and regulations, and the
courts might issue new rulings that make it more difficult, or impossible, for
Colonial Properties Trust to remain qualified as a REIT. We do not believe,
however, that any pending or proposed tax law changes would jeopardize its REIT
status.
If Colonial Properties Trust failed to qualify as a REIT, Colonial
Properties Trust would be subject to federal income tax at regular corporate
rates. Also, unless the IRS granted us relief under certain statutory
provisions, Colonial Properties Trust would remain disqualified as a REIT for
the four years following the year Colonial Properties Trust first failed to
qualify. If Colonial Properties Trust failed to qualify as a REIT, it would have
to pay significant income taxes and would therefore have less money available
for investments or for distributions to shareholders. This would likely have a
significant adverse affect on the value of our securities. In addition, Colonial
Properties Trust would no longer be required to make any distributions to
shareholders, but we would still be required to distribute quarterly
substantially all of our net cash revenues to our unitholders.
Proposed legislation, if enacted, could require us to restructure our
ownership of Colonial Properties Services, Inc. The Clinton Administration's
fiscal year 2000 budget proposal could require us to restructure our ownership
of Colonial Properties Services, Inc. The budget proposal, announced February 1,
1999, includes a proposal that would prohibit a REIT from owning more than 10%
of the vote or value of the outstanding securities of any corporation, except
for a qualified REIT subsidiary or another REIT. Currently, a REIT cannot own
more than 10% of the outstanding securities of any one issuer. A REIT can,
however, own more than 10% of the value of the stock of a corporation, so long
as not more than 25% of the REIT's total assets are comprised stock of
corporations, except for qualified REIT subsidiaries or other REIT's, and the
stock of any single corporation does not account for more than 5% of the value
of the REIT's total assets. The proposal also contains an exception to the 5%
and 10% asset tests that would allow a REIT to have "taxable REIT subsidiaries,"
including both "qualified independent contractor subsidiaries," which could
perform noncustomary and other currently prohibited services for tenants and
other customers, and "qualified business subsidiaries," which could undertake
third-party management and development activities as well as other non-related
real estate activities. Under the proposal, no more than 15% of a REIT's total
assets could consist of taxable REIT subsidiaries and no more than 5% of a
REIT's total assets could consist of qualified independent contractor
subsidiaries. Under the budget proposal, a taxable REIT subsidiary would not be
entitled to deduct any interest on debt funded directly or indirectly by the
REIT. This proposal would be effective after the date of enactment and a REIT
would be allowed to combine and convert existing corporate subsidiaries into
taxable REIT subsidiaries tax-free prior to a certain date. A transition period
would allow for conversion of existing corporate subsidiaries before the 10%
vote or value test would become effective. For Colonial Properties Trust's
taxable years after the effective date of the proposal and after any applicable
transition period, the 10% vote or value test would apply to Colonial Properties
Trust's ownership in Colonial Properties Services, Inc. unless Colonial
Properties Services, Inc. is converted into a taxable REIT subsidiary. It is
presently uncertain whether any proposal regarding REIT subsidiaries, including
the budget proposal, will be enacted or, if enacted, what the terms, including
the effective date, of such proposal will be.
Our operations could be adversely affected by the year 2000 problem.
Our revenues may be adversely affected if the year 2000 problem poses
significant problems for any of our tenants which prevent them from paying us
rent as it comes due. The year 2000 problem could also adversely affect us
should any of our lenders, manufacturers, vendors or suppliers cease to conduct
business, as we would be forced to contract with alternate providers at rates
which might not be favorable to us. Moreover, our plans do not address a
"doomsday" scenario which would require a contingency process for restoration of
our existing systems and components in the event of a complete failure due to
the year 2000 problem.
Item 2. Properties.
General
CRLP acquired 36 properties in connection with the Formation
Transactions, and acquired or developed 19 additional properties and an
additional phase of an existing property in 1994, six additional properties in
1995, 11 additional properties in 1996, 25 additional properties in 1997, and 14
additional properties in 1998. Since the Company's initial public offering
("IPO"), CRLP has developed eleven additional Multifamily Properties and has
disposed of eight properties, all through tax-deferred, like-kind exchanges. The
106 Properties owned by CRLP at December 31, 1998, consisted of 49 Multifamily
Properties, 40 Retail Properties, and 17 Office Properties, as described in more
detail below.
Summary of Properties
Total 1998 Percent of
Units/ Property Total 1998 Percentage
Number of GLA/ Revenue (2) Property Occupancy at
Type of Property Properties NRA (1) (in thousands) Revenue (2) Dec. 31, 1998 (3)
- ---------------- ---------- ----------- ----------- ---------- ----------------
Multifamily 49 15,381 $ 104,462 40.7% 93.5%
Retail 40 13,478,000 117,572 45.9% 91.9%
Office 17 2,707,000 34,409 13.4% 92.2%
--- ----------- ----------
Total 106 $ 256,443 100.0%
=== =========== ==========
(1)Units (in this table only) refers to multifamily apartment units, GLA refers
to gross leasable area of retail space and NRA refers to net rentable area of
office space. Information is presented as of December 31, 1998.
(2)Includes CRLP's proportionate share of revenue from those Office and
RetailProperties accounted for under the equity method, and the Company's
share of the properties disposed of in 1998.
(3)Excludes 1,842 units of expansion phases of seven Multifamily Properties that
had not achieved stabilized occupancy as of December 31, 1998.
Multifamily Properties
The 49 Multifamily Properties owned by CRLP at December 31, 1998,
contain a total of 15,381 garden-style apartments and range in size from 120 to
1,080 apartment units. Fourteen of the Multifamily Properties were acquired by
CRLP in connection with the Formation Transactions, 13 Properties and one
additional phase of an existing Property were acquired during 1994, seven
Properties were acquired during 1996, five Properties were acquired during 1997,
and four Properties were acquired in 1998. Also, since the IPO, CRLP has
developed eleven additional Multifamily Properties. Twenty Multifamily
Properties (containing a total of 7,293 apartment units) are located in Alabama,
16 Multifamily Properties (containing a total of 5,014 apartment units) are
located in Florida, nine Multifamily Properties (containing a total of 1,874
apartments units) are located in Georgia, one Multifamily Property (containing a
total of 328 apartment units) are located in Mississippi, two Multifamily
Properties (containing a total of 550 apartment units) sre located in South
Carolina, and one Multifamily Property (containing 322 apartment units) is
located in Texas. Each of the Multifamily Properties is established in its local
market and provides residents with numerous amenities, which may include a
swimming pool, exercise room, jacuzzi, clubhouse, laundry room, tennis court(s),
and/or a playground. All of the Multifamily Properties are managed by CRLP.
The following table sets forth certain additional information
relating to the Multifamily Properties as of and for the year ended December 31,
1998.
Multifamily Properties
Total
Average Multifamily Percent of
Year Number Approximate Rental Property Total 1998
Multifamily Completed of Rentable Area Percent Rate Revenue for Property
Property (1) Location (2) Units (3) (Square Feet) Occupied Per Unit 1998 Revenue (4)
- ----------------------- ------------ ---------- ---------- ------------ ------- ----------------------- ----------
Alabama:
CV at Ashford Place Mobile 1983 168 139,000 96.4% $ 514 $ 995,008 0.4%
CV at Rocky Ridge Birmingham 1984 226 259,000 92.9% 612 1,504,737 0.6%
Colony Park Mobile 1975 201 130,000 86.1% 414 882,172 0.3%
CG at Galleria Woods Birmingham 1994 244 261,000 97.0% 665 1,685,198 0.7%
CG at Mountain Brook Birmingham 1987/91 392 393,000 96.7% 688 2,805,188 1.1%
CV at Trussville Birmingham 1996/97 376 410,000 97.1% 685 2,662,530 1.0%
CV at Cahaba Heights Birmingham 1992 125 131,000 100.0% 695 957,168 0.4%
CG at Edgewater Huntsville 1990 500 423,000 (7) 693 2,542,056 1.0%
CV at Inverness Birmingham 1986/87/90 586 395,000 98.6% 595 3,545,719 1.4%
CV at Huntleigh Woods Mobile 1978 233 199,000 94.4% 457 1,222,101 0.5%
CG/CV at Inverness Lakes Mobile 1983/96 482 477,000 (7) 630 2,932,495 1.1%
CV at McGehee Place Montgomery 1986/95 468 404,000 90.1% 608 2,679,894 1.0%
CV at Monte D'Oro Birmingham 1977 200 296,000 98.5% 659 1,547,956 0.6%
Patio Auburn 1966/83/84 240 179,000 87.9% 424 1,057,375 0.4%
CV at Hillcrest Mobile 1981 104 114,000 97.0% 610 684,919 0.3%
CG at Galleria Birmingham 1986/96 1,080 1,195,000 93.9% 617 7,487,917 2.9%
CG at Research Park Huntsville 1987/94 736 809,000 75.3% 655 4,585,282 1.8%
CG at Riverchase Birmingham 1984/91 468 746,000 95.5% 721 3,794,680 1.5%
Ski Lodge Tuscaloosa Tuscaloosa 1976/92 304 273,000 94.4% 415 1,498,359 0.6%
CV at Hillwood Montgomery 1984 160 151,000 95.0% 534 1,035,246 0.4%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Alabama (20 Properties) 7,293 7,384,000 92.4% 613 46,106,000 18.0%
---------- ------------ ------- ------- ------------- ----------
Florida:
CG at Kirkman Orlando 1991 370 337,000 93.0% 771 3,363,400 1.3%
CG at Carrollwood Tampa 1966 244 286,000 95.5% 827 2,239,291 0.9%
CG at Bayshore Bradenton 1997 376 369,000 (7) 720 2,558,815 1.0%
CG at Heathrow Orlando 1997 312 370,000 100.0% 833 3,197,016 1.2%
CG at Hunter's Creek Orlando 1997 496 624,000 95.4% 868 5,010,829 2.0%
CG at Palma Sola Bradenton 1992 340 292,000 92.0% 699 2,409,968 0.9%
CG at Palm Aire Sarasota 1991 248 252,000 97.2% 806 2,363,955 0.9%
CG at Gainesville Gainesville 1989/93/94 560 489,000 98.8% 757 4,688,565 1.8%
CG at Ponte Vedra Jacksonville 1988 240 212,000 92.8% 680 1,717,797 0.7%
CV at Oakleigh Pensacola 1997 176 186,000 94.0% 738 1,512,500 0.6%
CV at River Hills Tampa 1991/97 776 465,000 92.3% 663 4,350,077 1.7%
CV at Lake Mary Orlando 1991/95 504 431,000 99.0% 645 3,873,508 1.5%
CV at Cordova Pensacola 1983 152 116,000 95.0% 492 874,374 0.3%
CG at Lakewood Ranch Sarasota 1999 64 64,000 (7) 937 27,955 (6) 0.0%
CG at Citrus Park Tampa 1999 16 48,000 (7) 851 5,074 (6) 0.0%
CG at Cypress Crossing Orlando 1999 140 183,000 (7) 1,138 314,498 (6) 0.1%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Florida (16 Properties) 5,014 4,724,000 95.5% 701 38,507,622 14.9%
---------- ------------ ------- ------- ------------- ----------
Georgia:
CG at Barrington Macon 1996 176 201,000 96.0% 655 1,204,779 0.5%
CG at Wesleyan Macon 1997 264 288,000 (7) 668 1,675,365 0.7%
CV at North Ingle Macon 1983 140 133,000 88.6% 562 750,802 0.3%
CV at White Bluff Savannah 1986 120 108,000 95.0% 668 857,625 0.3%
CV at Vernon Marsh Savannah 1986/87 178 151,000 92.7% 662 1,267,517 0.5%
CG at Spring Creek Macon 1992/94 296 328,000 96.3% 622 2,096,104 0.8%
CV at Stockbridge Stockbridge 1993/94 240 253,000 97.9% 686 1,881,614 0.7%
CV at Timothy Woods Athens 1996 204 211,000 97.6% 737 1,591,704 0.6%
CV at Walton Way Augusta 1984 256 254,000 91.5% 561 751,423 (6) 0.3%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Georgia (9 Properties) 1,874 1,927,000 90.1% 642 12,076,933 4.7%
---------- ------------ ------- ------- ------------- ----------
Mississippi:
CG at Natchez Trace Jackson 1995/97 328 343,000 93.0% 636 2,477,790 1.0%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Mississippi (1 Property) 328 343,000 93.0% 636 2,477,790 1.0%
---------- ------------ ------- ------- ------------- ----------
South Carolina:
CV at Ashley Plantation Bluffton 1998 200 205,000 99.0% 824 1,295,982 (6) 0.5%
CV at Caledon Wood Greenville 1995/96 350 367,000 82.9% 857 2,433,183 0.9%
---------- ------------ ------- ------- ------------- ----------
Subtotal - South Carolina (2 Properties) 550 572,000 88.8% 845 3,729,165 1.4%
---------- ------------ ------- ------- ------------- ----------
Texas:
CV at Haverhill San Antonio 1997 322 327,000 92.0% 923 1,564,509 (6) 0.6%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Texas (1 Property) 322 327,000 92.0% 923 1,564,509 0.6%
---------- ------------ ------- ------- ------------- ----------
TOTAL (49 Properties) 15,381 15,277,000 93.5% $ 642 (5)$ 104,462,019 40.6%
========== ============ ======= ======= ============= ==========
(footnotes on next page)
(1) All Multifamily Properties are 100% owned by CRLP with the exception
of CV at Haverhill, which is 79.8% owned by CRLP. In the listing of
Multifamily Property names, CG has been used as an abbreviation for
Colonial Grand and CV as an abbreviation for Colonial Village.
(2) Year initially completed and, where applicable, year(s) in which
additional phases were completed at the Property.
(3) Units (in this table only) refers to multifamily apartment units.
Number of Units includes all apartment units occupied or available for
occupancy at December 31, 1998.
(4) Percent of Total 1998 Property Revenue represents the Multifamily
Property's proportionate share of all revenue from CRLP's 106
Properties.
(5) Represents weighted average rental rate per unit of the 49 Multifamily
Properties at December 31, 1998.
(6) Represents revenues from the date of CRLP's acquisition/expansion of
this Property in 1998 through December 31, 1998.
(7) Expanded or newly developed property currently undergoing lease-up.
The following table sets forth the total number of apartment units,
percent leased and average base rental rate per apartment unit as of the end of
each of the last five years for the Multifamily Properties:
Average Base
Number Percent Rental Rate
Year-End of Units Leased (2) Per Unit
- -------------------- ------ ---------- ----------
December 31, 1998 15,381 93.5% $ 642
December 31, 1997 13,759 93.8% $ 631
December 31, 1996 13,617 94.8% $ 579
December 31, 1995 11,239 95.7% $ 552
December 31, 1994 10,972 96.0% $ 531
(1) Units (in this table only) refers to multifamily apartment units owned at
year end.
(2) Represents weighted average occupancy of the Multifamily Properties that had
achieved stabilized occupancy at the end of the respective period.
Retail Properties
The 40 Retail Properties owned by CRLP at December 31, 1998, contain
a total of approximately 13.5 million square feet (including space owned by
anchor tenants). Twelve of the Retail Properties are located in Alabama, twelve
are located in Florida, seven are located in Georgia, five are located in North
Carolina, one is located in South Carolina, one is located in Tennessee, and two
Retail Properties are located in Virginia. The Retail Properties consist of 15
enclosed regional malls, two power centers, and 23 neighborhood shopping
centers. Nine of the 40 Retail Properties were originally developed by CRLP, two
were acquired in 1994, six were acquired in 1995, four were acquired in 1996, 16
were acquired in 1997, and three were acquired in 1998. All of the Retail
Properties are managed by CRLP.
The following table sets forth certain information relating to the
Retail Properties as of and for the year ended December 31, 1998.
Retail Properties
Average
Base
Gross Rent
Leasable Per Total Retail % of
Year Area Number Total Leased Property Total1998
Retail Completed (Square Of Percent Annualized Square Revenue for Prop.
Property (1) Location (2) Feet) (3) Stores Leased (3) Base Rent Foot (4) 1998 Rev.(5)
- ------------------------------------------------------------------------------------------------------------------------------------
Alabama:
Colonial Mall Decatur Decatur 1979/89 494,000 55 88.1% $ 3,464,000 $ 17.48 $ 5,157,527 2.0%
81,000 (6)
Brookwood Village Birmingham 1973/91 463,000 64 88.2% 3,827,000 13.99 6,303,392 2.5%
231,000 (6)
Colonial Mall Gadsden Gadsden 1974/91 492,000 57 96.6% 2,623,000 17.09 4,881,547 1.9%
Colonial Mall Auburn/Opelika Auburn 1973/84/89 399,000 54 89.8% 2,409,000 16.53 4,215,395 1.6%
Colonial Promenade Montgomery Montgomery 1990/97 274,000 39 97.8% 2,242,000 12.70 3,080,774 1.2%
174,000 (6)
Colonial Shoppes McGehee Montgomery 1986 55,000 14 100.0% 581,000 12.23 741,873 0.3%
50,000 (6)
Colonial Shoppes Bellwood Montgomery 1988 37,000 15 94.5% 462,000 11.43 538,858 0.2%
50,000 (6)
Old Springville Shopping Center Birmingham 1982 64,000 9 94.0% 170,000 7.75 537,756 0.2%
Colonial Shoppes Inverness Birmingham 1984 28,000 5 100.0% 400,000 12.58 509,360 0.2%
Olde Town Shopping Village Montgomery 1978/90 39,000 15 89.6% 324,000 9.37 395,500 0.2%
Bel Air Mall Mobile 1966/90/97 1,434,000 92 87.8% 7,394,000 15.11 63,889 (7) 0.0%
Parkway City Mall Huntsville 1975 414,000 44 86.0% 1,423,000 11.35 62,267 (7) 0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Alabama (12 Properties) 4,779,000 463 90.2% 25,319,000 14.39 26,488,138 10.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Florida:
Colonial Promenade University Park Orlando 1986/89 399,000 41 96.2% 2,961,000 12.56 4,237,886 1.7%
Colonial Promenade Tuskawilla Orlando 1990 217,000 28 100.0% 1,084,000 10.27 1,847,793 0.7%
Colonial Promenade Burnt Store Punta Gorda 1990 199,000 21 91.6% 1,199,000 10.69 1,529,212 0.6%
Colonial Promenade Winter Haven Orlando 1986 197,000 26 92.0% 1,329,000 9.03 1,626,772 0.6%
Northdale Court Tampa 1988 193,000 19 75.1% 1,107,000 10.38 1,941,326 0.8%
55,000 (6)
Colonial Promenade Bear Lake Orlando 1990 125,000 18 70.7% 627,000 8.18 1,737,043 0.7%
Colonial Shoppes Paddock Park Ocala 1988 87,000 20 91.6% 658,000 12.82 847,439 0.3%
Colonial Promenade Bardmoor St. Petersbu1981 158,000 25 74.0% 1,108,000 15.53 1,810,622 0.7%
Colonial Promenade Hunter's Creek Orlando 1993/95 222,000 24 100.0% 1,944,000 15.65 2,622,659 1.0%
Colonial Promenade Wekiva Orlando 1990 209,000 21 80.3% 1,824,000 17.82 2,459,186 1.0%
Colonial Promenade Lakewood Jacksonville1995 195,000 45 93.2% 1,078,000 12.56 2,391,810 0.9%
Orlando Fashion Square Orlando 1973/89/93 711,000 227 94.6% 9,722,000 16.49 10,212,704 (7) 4.0%
361,000 (6)
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Florida (12 Properties) 3,328,000 515 90.6% 24,641,000 13.76 33,264,452 13.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia:
Macon Mall Macon 1975/88/97 757,000 150 92.4% 10,047,000 23.95 17,000,938 6.6%
682,000 (6)
Beechwood Center Athens 1963/92 336,000 41 98.5% 2,411,000 10.56 3,028,040 1.2%
Britt David Shopping Center Columbus 1990 110,000 9 100.0% 711,000 12.85 947,982 0.4%
Lakeshore Mall Gainesville 1984-97 518,000 66 92.8% 3,375,000 17.44 5,636,174 2.2%
Valdosta Mall Valdosta 1982-85 325,000 51 95.1% 2,884,000 16.99 5,625,802 2.2%
74,000 (6)
Glynn Place Mall Brunswick 1986 285,000 47 84.0% 2,443,000 16.32 3,868,983 1.5%
226,000 (6)
Shoppes at Mansell (8) Atlanta 1996/97 - 8 92.9% 366,000 18.78 190,369 (7) 0.1%
Village at Roswell Summit Atlanta 1988 25,000 9 80.4% 371,000 14.56 399,001 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Georgia (7 Properties) 3,338,000 381 92.9% 22,608,000 18.69 36,697,289 14.4%
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina:
Holly Hill Mall Burlington 1969/86/94 422,000 51 95.7% 2,549,000 15.50 5,168,367 2.0%
Mayberry Mall Mount Airy 1968/86 150,000 17 94.6% 713,000 10.64 1,040,238 0.4%
55,000 (6)
Quaker Village Greensboro 1968/88/97 114,000 33 100.0% 1,078,000 12.38 1,480,977 0.6%
Yadkin Town Center Yadkinville 1971/97 94,000 12 100.0% 636,000 7.71 726,603 0.3%
Stanly Plaza Locust 1987/96 47,000 7 100.0% 250,000 7.33 303,020 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-North Carolina (5 Properties) 882,000 120 96.8% 5,226,000 12.59 8,719,205 3.4%
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina:
Briarcliffe Mall Myrtle Beach1986 488,000 64 94.5% 2,999,000 19.68 7,603,861 3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-South Carolina (1 Property) 488,000 64 94.5% 2,999,000 19.68 7,603,861 3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee:
Rivermont Shopping Center Chattanooga 1986/97 75,000 9 97.1% 210,000 6.72 491,315 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Tennessee (1 Property) 75,000 9 97.1% 210,000 6.72 491,315 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia:
Staunton Mall Staunton 1969/86/97 422,000 46 93.5% 1,808,000 8.62 3,116,642 1.2%
Abingdon Towne Centre Abingdon 1987/96 166,000 19 100.0% 1,024,000 10.03 1,191,174 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Virginia (2 Properties) 588,000 65 95.3% 2,832,000 8.92 4,307,816 1.7%
- -----------------------------------------------------------===========---====================================================-======
Total (40 Properties) 13,478,000 1,617 91.9% $ 83,835,000 $ 14.48 $ 117,572,076 46.0%
- -----------------------------------------------------------===========---===========================================================
(footnotes on next page)
(1) All Retail Properties are 100% owned by CRLP, with the exception of
Orlando Fashion Square and Parkway City mall, which are owned 50% by CRLP.
(2) Year initially completed and, where applicable, year(s) in which the
Property was substantially renovated or an additional phase of the
Property was completed.
(3) Total GLA includes space owned by anchor tenants, but Percent Leased
excludes such space.
(4) Includes specialty store space only.
(5) Percent of Total 1998 Property Revenue represents the Retail Property's
proportionate share of all revenue from the 106 Properties.
(6) Represents space owned by anchor tenants.
(7) Represents revenues from the date of CRLP's acquisitions of the Property
in 1998 through December 31, 1998.
(8) This Property is located within the Mansell Business Park and is included
in property total with the Mansell Business Park.
The following table sets forth the total gross leasable area, percent
leased and average base rent per leased square foot as of the end of each of the
last five years for the Retail Properties:
Gross Average
Leasable Area Percent Base Rent Per
Year-End (Square Feet) Leased Leased Square Foot (2)
- -------------------- ---------- ---------- ----------
December 31, 1998 11,105,000 91.9% $ 14.48
December 31, 1997 8,880,000 93.3% $ 14.38
December 31, 1996 4,856,000 93.8% $ 14.66
December 31, 1995 3,758,000 93.1% $ 13.23
December 31, 1994 2,467,000 95.8% $ 12.61
(1) Excludes 2,373,000 square feet of space owned by anchor tenants. (2) Average
base rent per leased square foot is calculated using specialty
store year-end base rent figures.
The following table sets out a schedule of the lease expirations for
leases in place as of December 31, 1998, for the Retail Properties:
Net Rentable Annualized Percent of Total
Year of Number of Area Of Base Rent of Annual Base Rent
Lease Tenants with Expiring Leases Expiring Represented by
Expiration Expiring Leases (Square Feet) (1) Leases (1)(2) Expiring Leases (1)
- ---------------------------------------------------------------------------------------------------
1999 242 632,000 7,196,000 8.0%
2000 276 1,352,000 11,308,000 12.5%
2001 198 689,000 8,054,000 8.9%
2002 216 745,000 9,587,000 10.6%
2003 154 639,000 6,874,000 7.6%
2004 91 1,065,000 6,135,000 6.8%
2005 102 316,000 6,120,000 6.8%
2006 93 689,000 7,590,000 8.4%
2007 115 706,000 8,407,000 9.3%
2008 65 611,000 5,325,000 5.9%
Thereafter 66 2,357,000 13,884,000 15.3%
=============== ================ ============== ===========
1,618 9,801,000 $ 90,480,000 100.0%
=============== ================ ============== ===========
(1) Excludes 2,373,000 square feet of space owned by anchor tenants and
1,304,000 square feet of space not leased as of December 31, 1998.
(2) Annualized base rent is calculated using base rents as of December 31, 1998.
Office Properties
The 17 Office Properties owned by CRLP at December 31, 1998, contain
a total of approximately 2.7 million rentable square feet. Fourteen of the
Office Properties are located in Alabama (representing 67% of the office
portfolio's net rentable square feet) , one is located in Atlanta, Georgia and
two are located in Florida. The Office Properties range in size from
approximately 30,000 square feet to 536,000 square feet. Four of the Office
Properties were developed by Colonial, five of the Properties were acquired at
various times between 1980 and 1990, four of the Properties were acquired in
1997, and four of the Properties were acquired in 1998. All of the Office
Properties are managed by CRLP.
The following table sets forth certain additional information
relating to the Office Properties as of and for the year ended December 31,
1998.
Office Properties
Average
Base
Rent
Rentable Per Total Office Percent of
Year Area Total Leased Property Total 1998
Office Completed Square Percent Annualized Square Revenue for Property
Property (1) Location (2) Feet Leased Base Rent Foot2) 1998 (3) Revenue (4)
- -------------------- ---------- --------- ----------- -------- ----------- -------- ---------- --------
Alabama:
Interstate Park Montgomery 1982-85/89 227,000 92.5% $ 2,816,000 $ 13.71 $ 3,104,381 1.1%
Riverchase Center Birmingham 1984-88 306,000 92.7% 2,727,000 10.05 3,150,860 1.1%
International Park Birmingham 1987/89 93,000 100.0% 2,588,000 14.24 1,432,125 0.6%
Colonial Plaza Birmingham 1982 168,000 34.0% 1,010,000 14.73 2,913,954 1.1%
Progress Center Huntsville 1983-91 225,000 91.0% 1,681,000 9.08 2,093,690 0.8%
Lakeside Office Park Huntsville 1989/90 121,000 100.0% 1,370,000 12.72 1,624,128 0.6%
AmSouth Center Huntsville 1990 157,000 94.2% 2,516,000 17.74 2,973,182 1.2%
P&S Building Gadsden 1946/76/91 40,000 100.0% 178,000 4.50 178,020 0.1%
250 Commerce St Montgomery 1904/81 35,000 100.0% 366,000 10.50 419,008 0.2%
Anderson Block Bldg(5)Montgomery 1981/83 34,000 97.8% 334,000 10.39 121,413 0.0%
Land Title Bldg. Birmingham 1975 30,000 100.0% 393,000 13.19 148,880 0.1%
Independence Plaza Birmingham 1979 106,000 97.0% 1,294,000 13.07 1,460,438 (6) 0.6%
Shades Brook Building Birmingham 1979 35,000 92.5% 151,000 13.82 225,724 (6) 0.1%
Perimeter Corporate
Park Huntsville 1986/89 233,000 99.7% 2,834,000 13.96 3,200,829 (6) 1.2%
----------- -------- ----------- -------- ---------- --------
Subtotal-Alabama (14 Properties) 1,810,000 89.7% 20,258,000 12.58 23,046,632 8.8%
----------- -------- ----------- -------- ---------- --------
Florida:
Concourse Center Tampa 1981/85 290,000 97.7% 2,580,000 14.95 2,344,572 (6) 0.9%
University Park Orlando 1985 71,000 99.4% 769,000 13.47 913,686 0.4%
----------- -------- ----------- -------- ---------- --------
Subtotal-Florida (2 Properties) 361,000 98.0% 3,349,000 14.65 3,258,258 1.3%
----------- -------- ----------- -------- ---------- --------
Georgia:
Mansell Business Park Atlanta 1987/96/97 536,000 96.6% 7,277,000 20.53 8,104,019 3.2%
----------- -------- ----------- -------- ---------- --------
Subtotal-Georgia (1 Property) 536,000 96.6% 7,277,000 20.53 8,104,019 3.2%
=========== ======== =========== ======== ========== ========
TOTAL (17 Properties) 2,707,000 92.2% $ 30,884,000 $ 14.58 $34,408,909 13.3%
=========== ======== =========== ======== ========== ========
(1) All Office Properties are 100% owned by CRLP with the exceptions of Anderson
Block and Land Title Building, which are each 33.33% owned by CRLP.
(2) Year initially completed and, where applicable, most recent year in which
the Property was substantially renovated or in which an additional phase of
the Property was completed.
(3) Total 1998 Office Property revenue is CRLP's share (based on its percentage
ownership of the property) of total Office Property revenue, unless
otherwise noted.
(4) Percent of Total 1998 Property Revenue represents the Office Property's
proportionate share of all revenue from CRLP's 106 Properties.
(5) CRLP has a leasehold interest in this Property.
(6) Represents revenues from the date of CRLP's acquisition of this Property
in 1998 through December 31, 1998.
The following table sets out a schedule of the lease expirations for
leases in place as of December 31, 1998, for the Office Properties (including
all lease expirations for partially-owned Properties).
Net Rentable Annualized Percent of Total
Year of Number of Area Of Base Rent of Annual Base Rent
Lease Tenants with Expiring Leases Expiring Represented by
Expiration Expiring Leases(Square Feet) (1) Leases (1)(2) Expiring Leases (1)
- -----------------------------------------------------------------------------------------
1999 84 455,000 5,900,000 19.1%
2000 107 487,000 6,348,000 20.6%
2001 62 332,000 3,638,000 11.8%
2002 44 294,000 3,814,000 12.3%
2003 43 347,000 4,867,000 15.8%
2004 14 126,000 1,784,000 5.8%
2005 5 148,000 2,131,000 6.9%
2006 4 110,000 1,253,000 4.1%
2007 2 39,000 636,000 2.1%
2008 2 26,000 494,000 1.6%
Thereafter 3 2,000 19,000 0.1%
========== ============= =============== ============
370 2,366,000 $ 30,884,000 100.0%
========== ============= =============== ============
(1) Excludes 341,000 square feet of space not leased as of December 31, 1998.
(2) Annualized base rent is calculated using base rents as of December 31, 1998.
The following sets forth the net rentable area, total percent leased
and average base rent per leased square foot for each of the last five years for
the Office Properties:
Total Average Base
Rentable Area Percent Rent Per Leased
Year-end (Square Feet) Leased Square Foot (1)
- -------------------------------------------------------------
December 31, 1998 2,707,000 92.2% $ 14.58
December 31, 1997 1,859,000 95.5% $ 12.18
December 31, 1996 1,009,000 97.4% $ 13.80
December 31, 1995 1,009,000 94.0% $ 13.52
December 31, 1994 1,009,000 95.0% $ 12.99
(1) Average base rent per leased square foot is calculated using base rents as
of December 31 for each respective year.
Undeveloped Land
CRLP owns five undeveloped land parcels consisting of approximately
144.7 acres (collectively, the "Land"). These parcels are adjacent to three of
the Properties and are suitable for potential expansion at those Properties. The
Land suitable for expansion is located adjacent to a Multifamily Property and
two Retail Properties. Land adjacent to Multifamily Properties typically will be
considered for potential development of another phase of an existing Multifamily
Property if CRLP determines that the particular market can absorb additional
apartment units. CRLP currently owns one such parcel. For expansions at Retail
Properties, CRLP owns parcels both contiguous to the boundaries of Retail
Properties, which would accommodate expansion of the mall or shopping center,
and outparcels which are suitable for restaurants, financial institutions or
free standing retailers. CRLP owns three such parcels.
Property Markets
The table below sets forth certain information with respect to the
geographic concentration of the Properties as of December 31, 1998.
Geographic Concentration of Properties
Percent
Units Total Of Total
(Multifamily) GLA NRA 1998 Property 1998 Property
State (1) (Retail) (2) (Office)(3) Revenue Revenue
- -------------------- ---------- ------------ ----------- ------------ --------
Alabama 7,293 4,779,000 1,810,000 $ 95,640,770 37.4%
Florida 5,014 3,328,000 361,000 75,030,332 29.5%
Georgia 1,874 3,338,000 536,000 56,878,241 22.3%
Mississippi 328 -0- -0- 2,477,790 1.0%
North Carolina -0- 882,000 -0- 8,719,205 3.4%
South Carolina 550 488,000 -0- 11,333,026 3.9%
Tennessee -0- 75,000 -0- 491,315 0.2%
Texas 322 -0- -0- 1,564,509 0.6%
Virginia -0- 588,000 -0- 4,307,816 1.7%
---------- ------------ ----------- ------------ --------
Total 15,381 13,478,000 2,707,000 $256,443,004 100.0%
========== ============ =========== ============ ========
(1) Units (in this table only) refer to multifamily apartment units. (2) GLA
refers to gross leaseable area of retail space. (3) NRA refers to net rentable
area of office space.
CRLP believes that the demographic and economic trends and
conditions in the markets where the Properties are located indicate a potential
for continued growth in property net operating income. The Properties are
located in a variety of distinct submarkets within Alabama, Florida, Georgia,
Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia;
however, Birmingham, Huntsville and Montgomery, Alabama, Orlando, Tampa and
Sarasota/Bradenton, Florida, and Macon and Atlanta, Georgia, are CRLP's primary
markets. CRLP believes that its markets in these nine states, which are
characterized by stable and increasing population and employment growth, should
continue to provide a steady demand for multifamily, retail, and office
properties.
Mortgage Financing
Certain of the Properties are subject to mortgage indebtedness. The
Properties whose financial results are consolidated in the financial statements
of CRLP are subject to existing mortgage indebtedness and other notes payable in
an aggregate amount as of December 31, 1998, of approximately $909.3 million
carrying a weighted average interest rate of 7.07% and a weighted average
maturity of 6.6 years. The mortgage indebtedness on the Properties as of
December 31, 1998, is set forth in the table below:
Mortgage Debt and Notes Payable
Anticipated
Annual Debt
Principal Service Estimated
Interest Balance (as of (1/1/99- Maturity Balance Due
Property (1) Rate 12/31/98) 12/31/99) Date (2) on Maturity
- ------------------------------------ ----------- ---------------- --------------- ------------ ----------------
Multifamily Properties:
CG at Carrollwood 8.870% 6,230,000 $ 552,601 03/05/05 $ 6,230,000
CG at Natchez Trace 7.950% 6,830,143 574,150 09/01/35 47,813
CG at Natchez Trace 8.000% 4,066,699 339,941 02/01/37 29,071
CV at Rocky Ridge 5.900% 6,000,000 354,000 08/01/02 (5) 6,000,000
CV at Rocky Ridge 7.625% 1,245,000 190,137 08/01/02 (3) 841,667
CG at Galleria Woods 6.875% 7,101,608 7,345,726 06/15/99 7,035,235
CG at Mountain Brook 8.000% 11,929,545 1,141,187 01/10/00 11,742,632
CV at Cahaba Heights 8.060% 3,607,835 374,615 05/10/00 3,502,055
CV at Inverness 4.520% 9,900,000 447,480 06/15/26 (4) 9,685,749
CV at Inverness Lakes 5.900% 4,000,000 236,000 08/01/02 (5) 4,000,000
CV at Inverness Lakes 7.625% 1,583,333 206,257 08/01/02 (6) 1,234,167
CG at Galleria 4.440% 22,400,000 994,560 06/15/26 (4) 22,400,000
CG at Research Park 4.490% 12,775,000 573,598 06/15/26 (4) 12,775,000
CV at White Bluff 4.520% 4,500,000 203,400 07/01/26 (4) 4,500,000
CV at Vernon Marsh 4.570% 3,400,000 155,380 07/01/26 (4) 3,400,000
CV at Hillwood 5.900% 3,330,000 196,470 08/01/02 (5) 3,300,000
CV at Hillwood 7.625% 1,515,000 197,820 08/01/02 (6) 1,179,167
Retail Properties:
Colonial Promenade Hunter's Creek 8.800% 10,089,395 1,061,620 10/01/01 9,578,044
Mayberry Mall 9.220% 3,350,078 363,445 10/01/01 3,237,064
Colonial Promenade Montgomery 9.250% 10,810,000 999,925 07/01/00 10,810,000
Rivermont Shopping Center 10.125% 1,693,400 273,553 09/01/08 52,091
Colonial Promenade University Park 8.870% 14,445,000 1,281,272 03/05/05 14,445,000
Village at Roswell Summit 8.930% 1,628,831 170,306 09/01/05 1,401,860
Office Properties:
2100 International Park 8.650% 1,967,410 2,095,046 10/01/99 1,931,425
1800 International Park 6.500% 1,793,554 1,880,990 10/01/99 1,793,554
Interstate Park 8.500% 4,208,107 642,311 08/01/03 2,648,144
Riverchase Center 7.880% 8,238,096 902,959 12/01/00 7,766,043
Mansell Overlook 100 8.250% 17,419,860 1,589,386 01/10/08 15,285,811
Mansell One Story Bldg. 10 8.625% 13,876,373 1,331,115 06/01/00 13,682,324
Perimeter Corporate Park 8.680% 5,536,731 609,507 12/01/03 4,858,772
Other debt:
Land Loan 7.020% 642,641 45,113 09/30/00 649,897
Line of Credit, incl. Comp. Bid 6.492% (7) 174,489,000 11,327,826 07/10/00 (8) 174,489,000
Unsecured Senior Notes 7.500% 64,916,320 4,868,724 07/15/01 65,000,000
Unsecured Senior Notes 8.050% 64,770,044 5,213,989 07/15/06 65,000,000
Medium Term Notes 7.050% 50,000,000 3,525,000 12/15/03 50,000,000
Medium Term Notes 7.160% 50,000,000 3,580,000 01/17/03 50,000,000
Medium Term Notes 6.960% 75,000,000 5,220,000 07/26/04 75,000,000
Medium Term Notes 6.960% 25,000,000 1,740,000 08/01/05 25,000,000
Medium Term Notes 6.980% 25,000,000 1,745,000 09/26/05 25,000,000
Senior Notes 7.000% 174,033,125 12,182,319 07/14/07 175,000,000
================ =============== ================
TOTAL $ 909,322,129 $ 76,732,725 $ 890,531,585
================ =============== ================
(footnotes presented on the next page)
- ----------------
(1) As noted in the table, certain Properties were developed in phases and
separate mortgage indebtedness may encumber each of the various phases. In
the listing of property names, CG has been used as an abbreviation for
Colonial Grand and CV as an abbreviation for Colonial Village.
(2) All of the mortgages can be prepaid at any time, subject to prepayment
penalties calculated typically on a percentage basis, except for the
mortgages encumbering CV at Rocky Ridge, CV at Inverness Lakes, and CV at
Hillwood, which are closed to prepayment for varying lengths of time.
(3) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2007.
(4) These loans are financed through tax-exempt bonds which are credit
enhanced by Fannie Mae. The loans, which bear interest at a weekly
variable interest rate, require monthly interest payments through June
2006 and principal and interest payments from July 2006 through June 2026.
The weighted average interest rate of these three was 4.51% at December
31, 1998. On February 15, 1999, CRLP entered into an interest rate swap
for these bonds at a rate of 3.23%
(5) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2022.
(6) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2010.
(7) This line of credit facility bears interest at a variable rate, based on
LIBOR plus a spread that ranges from 80 to 135 basis points. At December
31, 1998, line of credit facility bore interest at a rate of 95 basis
points above LIBOR. The facility also includes a competitive bid feature
that allows CRLP to convert up to $125 million under the line of credit to
a fixed rate, for a fixed term not to exceed 90 days. At December 31,
1998, $65 million was outstanding under a competitive bid loan which bore
interest at a weighted average rate of 6.29%.
(8) This credit facility has a term of two years beginning in July 1998 and
provides for a two-year amortization in the event of non-renewal.
In addition to the foregoing mortgage debt, the two Office Properties
and one Retail Property in which CRLP owns partial interests (and which
therefore are not consolidated in the financial statements of CRLP) also are
subject to existing mortgage indebtedness. CRLP's pro-rata share of such
indebtedness as of December 31, 1998, was $33,512,000 which carried a weighted
average interest rate of 6.9%. The maturity dates of these loans range from May
31, 1999 to January 15, 2006 and as of December 31, 1998, the loans had a
weighted average maturity of 6.6 years.
Item 3. Legal Proceedings.
Neither CRLP nor the Properties are presently subject to any material
litigation nor, to CRLP's knowledge, is any material litigation threatened
against CRLP or the Properties, other than routine litigation arising in the
ordinary course of business which is expected to be covered by liability
insurance.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to CRLP's unit holders during the fourth
quarter of 1998.
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.
There is no established public trading market for the Units. As of
March 10, 1999, there were 76 holders of record of Units.
CRLP has made consecutive quarterly distributions since its formation
in the third quarter of 1993. CRLP's ability to make distributions depends on a
number of factors, including its net cash provided by operating activities,
capital commitments and debt repayment schedules. Holders of Units are entitled
to receive distributions when, as and if declared by the Board of Trustees of
the Company, its general partner, out of any funds legally available for that
purpose.
The following table sets forth the distributions per Unit paid by
CRLP during the periods noted:
Calendar Period Distribution
--------------------------------------
1998:
First Quarter...... $.55
Second Quarter..... $.55
Third Quarter...... $.55
Fourth Quarter..... $.55
1997:
First Quarter...... $.52
Second Quarter..... $.52
Third Quarter...... $.52
Fourth Quarter..... $.52
Item 6. Selected Financial Data.
The following table sets forth selected financial and operating
information on a historical basis for CRLP for each of the five years ended
December 31, 1998.
Dollar amounts in thousands, except unit data 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
OPERATING DATA
Total revenue $ 257,367 $ 184,126 $ 134,881 $ 111,437 $ 63,958
Expenses:
Depreciation and amortization 48,647 33,278 23,533 20,615 13,060
Other operating expenses 87,972 63,581 46,819 42,282 24,011
Income from operations 120,748 87,267 64,529 48,540 26,887
Interest expense 52,063 40,496 24,584 23,972 10,820
Other income (expense), net (62) 3,069 1,104 674 582
Income before extraordinary items 68,623 49,840 41,049 25,242 16,650
Dividends to preferred unitholders 10,938 1,671 -- -- --
Net income available to common unitholders 57,284 44,519 40,538 25,242 16,650
Per unit - basic and diluted:
Net income 1.64 1.55 1.58 1.28 1.17
Distributions 2.20 2.08 2.00 1.90 1.73
- ----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
Land, buildings, and equipment, net $ 1,566,840 $ 1,268,430 $ 801,798 $ 624,514 $ 555,577
Total assets 1,756,548 1,396,660 947,947 681,297 603,135
Total debt 909,322 702,044 506,435 354,100 344,234
- ----------------------------------------------------------------------------------------------------------------------
OTHER DATA
Total properties (at end of period) 106 93 73 61 55
- ----------------------------------------------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
GENERAL
Colonial Realty Limited Partnership, a Delaware limited partnership is the
operating partnership of Colonial Properties Trust, an Alabama real estate
investment trust (the "Company") whose shares are listed on the New York Stock
Exchange. The Company is engaged in the ownership, development, management, and
leasing of multifamily communities, retail malls and shopping centers, and
office buildings. The Company owns and operates properties in nine states in the
Sunbelt region of the United States. As of December 31, 1998, CRLP's real estate
portfolio consisted of 49 multifamily communities, 40 retail properties, and 17
office properties.
CRLP manages its business with three separate and distinct operating divisions:
Multifamily, Retail, and Office. Each division has an Executive Vice President
that oversees growth and operations and has a separate management team that is
responsible for acquiring, developing, and leasing properties within each
division. This structure allows CRLP to utilize specialized management personnel
for each operating division. Constant communication among the Executive Vice
Presidents and centralized functions of accounting, information technology, due
diligence and administrative services provide CRLP with unique synergy allowing
CRLP to take advantage of a variety of investment opportunities. Decisions for
investments in acquisitions and developments and for dispositions are also
centralized.
The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements appearing
elsewhere in this report.
Any statement contained in this report which is not a historical fact, or which
might be otherwise considered an opinion or projection concerning CRLP or its
business, whether express or implied, is meant as, and should be considered, a
forward-looking statement as that term is defined in the Private Securities
Litigation Reform Act of 1996. Forward-looking statements are based upon
assumptions and opinions concerning a variety of known and unknown risks,
including but not limited to changes in market conditions, the supply and demand
for leasable real estate, interest rates, increased competition, changes in
governmental regulations, and national and local economic conditions generally,
as well as other risks more completely described in CRLP's filings with the
Securities and Exchange Commission. If any of these assumptions or opinions
prove incorrect, any forward-looking statements made on the basis of such
assumptions or opinions may also prove materially incorrect in one or more
respects.
Results of Operations - 1998 vs. 1997
In 1998, CRLP experienced growth in revenues, operating expenses, and net income
which primarily resulted from the acquisition and development of 40 properties
and the expansion of 13 properties during 1998 and 1997. As a result of the
acquisitions, developments, and expansions CRLP's net income before dividends to
preferred unitholders increased by $22.0 million, or 47.7%, for 1998 when
compared to 1997. On a per unit basis, net income was $1.64 for 1998, a 5.2%
increase, compared to $1.55 for 1997.
Revenues - Total revenues increased by $73.2 million, or 39.8%, during 1998 when
compared to 1997. Of this increase, $61.7 million relates to revenues generated
by properties that were acquired or developed during 1998 and 1997, net of
revenues of properties disposed of in 1997. The retail division accounted for
the majority of the overall revenue increase, approximately $46.4 million, while
the office and multifamily divisions accounted for $18.2 million and $9.0
million, respectively. The divisional revenue growth was primarily attributable
to the acquisition, development, and expansion of 21 retail properties, 22
multifamily properties, and 10 office properties during 1998 and 1997. The
remaining increase relates to increases in rental rates at existing properties
and lease buyouts during 1998.
Operating Expenses - Total operating expenses increased by $39.8 million, or
41.1%, during 1998 when compared to 1997. The majority of this increase relates
to additional property operating expenses of $20.3 million and additional
depreciation of $13.4 million associated with properties that were acquired,
developed, or expanded during 1998 and 1997, net of operating expenses of
properties disposed of during 1997. Depreciation expense on existing properties
increased by $1.5 million during 1998 when compared to 1997. Divisional property
operating expenses increased by $14.8 million, $2.8 million, and $5.5 million
for retail, multifamily, and office divisions, respectively, during 1998 when
compared to 1997. The increase in divisional property operating expenses was
primarily attributable to the acquisition, development, and expansion of 21
retail properties, 22 multifamily properties, and 10 office properties during
1998 and 1997. The remaining increase primarily relates to increases in
operating expenses at existing properties, and overall increases in corporate
overhead and personnel costs associated with CRLP's continued growth.
Other Income and Expenses - Interest expense increased by $14.7 million, or
39.3%, during 1998 when compared to 1997. The increase in interest expense is
primarily attributable to the assumption of $5.7 million of debt, the issuance
of $175 million in Senior Unsecured Notes, and the net increased usage of CRLP's
Line of Credit in conjunction with the financing of acquisitions and
developments.
Results of Operations - 1997 vs. 1996
In 1997, CRLP experienced growth in revenues, operating expenses, and net income
which resulted from the acquisition and development of 38 properties and the
expansion of 7 properties during 1997 and 1996. As a result of the acquisitions
and developments, CRLP's net income before dividends to preferred unitholders
increased by $5.0 million, or 18.0%, for 1997 when compared to 1996. On a per
unit basis, net income was $1.55 for 1997, a 1.9% decrease, compared to $1.58
for 1996. The decrease in net income available to common shareholders, on a per
share basis, is directly attributable to the extraordinary loss from early
extinguishment of debt and the dividends paid to the preferred shareholders in
1997.
Revenues - Total revenues increased by $49.2 million, or 36.5%, during 1997 when
compared to 1996. Of this increase, $43.4 million relates to revenues generated
by properties that were acquired or developed during 1997 and 1996. The
remaining increase primarily relates to increases in rental rates at existing
properties. The retail division accounted for the majority of the overall
revenue increase, approximately $25.4 million, while the multifamily and office
divisions accounted for $14.6 million and $8.9 million, respectively. The
divisional revenue growth was primarily attributable to the acquisition,
development, and expansion of 20 retail properties, 19 multifamily properties,
and 6 office properties during 1997 and 1996.
Operating Expenses - Total operating expenses increased by $26.5 million, or
37.7%, during 1997 when compared to 1996. The majority of this increase relates
to additional property operating expenses of $13.3 million and additional
depreciation of $8.2 million associated with properties that were acquired or
developed during 1997 and 1996. Depreciation expense on existing properties
increased by $1.8 million during 1997 when compared to 1996. Divisional property
operating expenses increased by $7.4 million, $2.1 million, and $4.9 million for
retail, multifamily, and office divisions, respectively, during 1997 when
compared to 1996. The increase in divisional property operating expenses was
primarily attributable to the acquisition, development, and expansion of 20
retail properties, 19 multifamily properties, and 6 office properties during
1997 and 1996. The remaining change primarily relates to the resolution of prior
year reserves for certain tax contingencies, increases in operating expenses at
existing properties, and overall increases in corporate overhead and personnel
costs associated with CRLP's continued growth.
Other Income and Expenses - Interest expense increased by $15.9 million, or
64.7%, during 1997 when compared to 1996. The increase in interest expense is
primarily attributable to the assumption of $75 million of debt, the issuance of
$175 million in Medium-Term Notes, and the increased usage of CRLP's Line of
Credit in conjunction with the financing of acquisitions and developments.
LIQUIDITY AND CAPITAL RESOURCES
During 1998, CRLP invested $358.1 million, net of disposition, in the
acquisition and development of properties. This acquisition and development
activity increased CRLP's multifamily, retail, and office property holdings.
CRLP financed the growth through proceeds from public offerings of equity and
debt totaling $315 million during 1998, advances on its bank line of credit, the
issuance of limited partnership units in CRLP, the proceeds from joint ventures,
and cash from operations. CRLP also used these sources of funds to repay $29.5
million on five mortgage loans.
Acquisition and Development Activities
Multifamily Properties - During 1998, CRLP added 1,026 apartment units through
the acquisition of four multifamily communities at an aggregate cost of $48.2
million. CRLP also completed development of 596 apartment units in seven
multifamily communities during 1998 and acquired land on which it intends to
develop additional multifamily communities during 1999. The aggregate investment
in the multifamily developments during 1998 was $90.4 million.
As of December 31, 1998, CRLP has 2,426 apartment units in 12 multifamily
communities under development or expansion. Management anticipates that the 12
multifamily projects will be completed during 1999 through 2001. Management
estimates that it will invest an additional $115 million to complete these
multifamily communities.
Retail Properties - During 1998, CRLP added 2.9 million square feet of retail
shopping space (including 1.5 million square feet in two joint ventures) through
the acquisition of a community shopping center, an enclosed mall and investment
in two joint ventures at a net cost of $117.5 million. In addition, CRLP began
the development of a community shopping center in Birmingham, Alabama. The
aggregate investment in the retail development during 1998 was $8.8 million.
Management anticipates that it will invest an additional $25.7 million to
complete the retail development.
Office Properties - During 1998, CRLP increased its office portfolio by 827,000
square feet with the acquisition of five office properties at an aggregate cost
of $87.9 million. In addition, CRLP began development on two office properties.
The aggregate investment in the office developments during 1998 was $5.3
million. Management estimates that it will invest an additional $24.3 million to
complete these properties.
Joint Ventures
During the fourth quarter of 1998, CRLP entered into two joint ventures. On
December 9, 1998, CRLP and CBL & Associates Properties, Inc. formed a joint
venture to acquire Parkway City Mall in Huntsville, Alabama for $11.4 million.
In addition to the purchase of the property, the joint venture will redevelop
the mall, with all related costs being shared equally by both venture partners.
At December 31, 1998, CRLP had invested approximately $5.7 million in the joint
venture and had an ending net investment balance of $5.9 million. On December
29, 1998, CRLP and Prudential Real Estate Investors, through its Property
Investment Separate Account Fund (Prudential), entered into a joint venture to
own Orlando Fashion Square. In connection with the formation of the joint
venture, Prudential acquired a 50% interest in Orlando Fashion Square from CRLP
for $52 million which approximated both book value and fair value of the
recently acquired property. Subsequent to formation, the joint venture leveraged
the property with a $65 million nonrecourse note and the proceeds from the
issuance of the note were distributed equally to the joint venture partners.
CRLP's investment in the joint venture at December 31, 1998 was $20.2 million.
CRLP used the proceeds from the Prudential joint venture to fund acquisition and
development activities. Both joint ventures have been accounted for using the
equity method.
Financing Activities
CRLP funded a large portion of its acquisitions and developments through the
issuance of debt securities and through cash contributions from the Company
through the issuance of its common and preferred shares. During 1998, the
Company and CRLP completed the following equity and debt transactions:
Common Share Offerings
(in thousands)
--------------------------------
Number of Price Per Gross Offering Net
Date ............... Common Share Proceeds Costs Proceeds
- -------------------- --------- ------- --------- --------- ---------
February ........... 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March .............. 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March .............. 381,046 $ 31.00 $ 11,182 $ 656 $ 11,156
April .............. 3,046,400 $ 30.12 $ 91,773 $ 4,973 $ 86,800
Debt Offering
Gross
Type of Proceeds
Date Note Maturity Rate (in thousands)
- -------------- -------- ---------- ---- ------------
July Senior July, 2007 7.00% $ 175,000
On July 10, 1998, CRLP increased the borrowing capacity under its unsecured line
of credit from $200 million to $250 million. The credit facility, which is used
by CRLP primarily to finance additional property investments, bears interest at
a rate ranging between 80 and 135 basis points above LIBOR and is renewable in
July 2000. The line of credit agreement includes a competitive bid feature that
will allow CRLP to convert up to $125 million under the line of credit to a
fixed rate, for a fixed term not to exceed 90 days. As of December 31, 1998, the
balance outstanding on CRLP's line of credit was $174.5 million.
At December 31, 1998, CRLP's total outstanding debt balance was $909.3 million.
The outstanding balance includes fixed-rate debt of $681.2 million, or 74.9%,
and floating-rate debt of $228.1 million, or 25.1%. CRLP has obtained interest
rate protection for $50.0 million of the floating-rate debt. The cap agreement
limits the debt to an interest rate of 8.00% through May 2, 2000. CRLP's total
market capitalization as of December 31, 1998 was $2.0 billion and its ratio of
debt to total market capitalization was 45.1%. Certain loan agreements of CRLP
contain restrictive covenants which, among other things, require maintenance of
various financial ratios. At December 31, 1998, CRLP was in compliance with
these covenants.
CRLP has only limited involvement with derivative financial instruments and does
not use them for trading purposes. Interest rate cap agreements and interest
rate swaps are used to reduce the potential impact of increases in interest
rates on variable-rate debt. Treasury lock agreements are used by CRLP to lock
in interest rates in connection with public debt offerings. CRLP has entered
into an interest rate cap agreement which limits debt of $50 million to an
interest rate of 8.00% through May 2, 2000. Subsequent to year-end, CRLP entered
into two interest rate swap agreements. On January 4, 1999, CRLP entered into an
interest rate swap for $50 million of its line of credit at 4.97% plus 80 to 135
basis points and on January 15, 1999, CRLP entered into an interest rate swap
for $52 million of tax exempt bonds at a rate of 3.23%. Both of these interest
rate swap agreements have one-year terms and any payments made or received under
the agreements are recognized as adjustments to interest expense as incurred.
CRLP is exposed to credit losses in the event of nonperformance by the
counterparties to its interest rate cap and nonderivative financial assets but
has no off-balance-sheet credit risk of accounting loss. CRLP anticipates,
however, that counterparties will be able to fully satisfy their obligations
under the contracts. CRLP does not obtain collateral or other security to
support financial instruments subject to credit risk but monitors the credit
standing of counterparties.
OUTLOOK
Management intends to maintain CRLP's strength through continued
diversification, while pursuing acquisitions and developments that meet the
Company's criteria for property quality, market strength, and investment return.
Management will continue to use its line of credit to provide short-term
financing for acquisition and development activities and plans to continue to
replace significant borrowings under the bank line of credit with funds
generated from the sale of additional equity securities and permanent financing,
as market conditions permit. Management believes that these potential sources of
funds, along with the possibility of issuing limited partnership units of CRLP
in exchange for properties, will provide CRLP with the means to finance
additional acquisitions and development.
In addition to the issuance of equity and debt, management is investigating
alternate financing methods and sources to raise future capital. Private
placements, joint ventures, and non-traditional equity and debt offerings are
some of the alternatives CRLP is contemplating. The Company continues to work
diligently to improve its credit rating, in order to reduce its cost of raising
future capital. Management anticipates that its net cash provided by operations
and its existing cash balances will provide the necessary funds on a short- and
long-term basis to cover its operating expenses, interest expense on outstanding
indebtedness, recurring capital expenditures, and dividends to shareholders in
accordance with Internal Revenue Code requirements applicable to real estate
investment trusts.
YEAR 2000 ISSUE
Overview of Y2K Problem
The Year 2000 or "Y2K" problem refers to the inability of many existing computer
programs having time-sensitive software to recognize a date using "00" as the
year 2000. Instead, the computer programs interpret such data as the year 1900.
This failure to accurately recognize the year 2000 and other key dates could
result in a variety of problems ranging from data miscalculations to the failure
of entire systems. In an attempt to eliminate or minimize this potential risk,
CRLP has initiated an effort to identify, understand, and address the myriad of
issues associated with the Y2K problem. CRLP has identified two main areas where
potential Y2K problems exist: (a) Property Management Systems and; (b)
Information Systems.
Phase One - Assessing CRLP's Y2K Readiness
As a result of potential risks posed by Y2K problems on CRLP's operations, in
the early months of 1998, CRLP formed a Year 2000 Committee to oversee, manage,
and implement a Year 2000 Compliance Program (the "Program"). The Committee is
comprised of representatives from senior management and various departments and
advisors at the home and regional offices, including the telecommunications,
information systems, and office services departments. Because of the
wide-ranging implications of the Y2K problem, management decided to carry out
the Program in multiple phases over the remainder of 1998 and 1999. Many of the
phases of the Program are being carried out simultaneously.
The initial step in assessing CRLP's Y2K readiness consisted of identifying
systems that are date sensitive and, accordingly, could pose potential Y2K
problems. The process included an examination of information technology and
non-information technology systems at CRLP's home and regional offices and at
CRLP's properties. The initial step of identifying systems has been completed by
CRLP's information services department and building services department through
a combination of physical inspections and informational interviews with Company
employees.
Having identified systems that could have a potential Y2K problem, CRLP is
attempting to determine which of the systems actually have a Y2K problem. Much
of the required information is within the exclusive control of CRLP's vendors
and manufacturers, who are being contacted through standard form letters and
telephone calls requesting such information. In the case of property management
systems, a database was compiled for the types of equipment, names of
manufacturers and model numbers. The following is a summary of the Phase One
results obtained to date.
Property Management Systems
CRLP has identified six categories of property management systems in which it
has the most exposure to potential Y2K problems. These categories include:
o Building automation (e.g., energy management, HVAC) o Security card access o
Fire and life safety o Elevator o Garage revenue control o Office equipment
In April 1998, CRLP began gathering data from vendors to catalog the equipment
in all of its buildings. To date, approximately 75% of the information requested
has been received. CRLP does not expect to receive 100% of the information
requested due to a number of nonresponsive vendors or unavailable information.
All of the responses have confirmed that their systems would not be affected in
an adverse way due to the Y2K date change. The Y2K steering committee is in the
process of evaluating if any of these property management systems are mission
critical in nature and would have a negative impact on CRLP's ability to conduct
business if a failure occurs. At this time CRLP does not believe these systems
are mission critical. Regardless, efforts continue to obtain additional evidence
from vendors concerning these systems such as processes followed, test scripts,
and actual findings. Once received, CRLP will further evaluate these systems and
will determine if it will be necessary to confirm the information received from
the vendors. Due to the positive responses received CRLP does not feel that this
will be necessary.
Information Systems
Information systems fall into four general categories: Accounting and property
management; network operating systems; desktop software; and secondary systems.
Accounting and Property Management - The general ledger and property management
software systems are not currently compliant. However, new versions have been
written and are stated to be Y2K compliant by the supplying vendor. CRLP is
currently in the process of testing the new versions and the expected schedule
for confirming compliance is as follows:
o System testing - First Quarter 1999 o Test software upgrades - First and
Second Quarter 1999 o Begin installation of upgrades - Second Quarter 1999 o
Full Y2K Compliance - Second and Third Quarter 1999
New versions of the general ledger software system were written and delivered to
CRLP during the first quarter of 1999. CRLP found the new versions would not run
in the current environment. The vendor continues to develop the software systems
and has represented to CRLP that it expects to deliver Y2K compliant systems
during the early part of the third quarter. Upon receipt, CRLP will test the
systems and the software upgrades and, assuming that the systems and upgrades
are operational, will install the systems in the third and fourth quarters with
a goal of becoming fully compliant during the early part of the fourth quarter.
While the vendor is revising the systems, CRLP intends to pursue test
alternative software systems offered by other vendors. If CRLP finds an
acceptable alternative software system that is Y2K compliant, it may implement
that system instead of the system being revised by CRLP's current vendor. If
CRLP were to implement an alternative system, CRLP may be able to achieve full
Y2K compliance as early as the third quarter.
Network Operating Systems - Management believes that the network operating
servers are currently Y2K compliant subject to certain possible exceptions.
Microsoft Corporation recently announced that Windows NT 4.0, which CRLP uses,
is not Y2K compliant with service pak level III. However, Microsoft has stated
that service pak level IV will need to be loaded to become completely Y2K
compliant. Upgrades of Company network operating systems are expected to be
installed in the first and second quarters of 1999, bringing the network
operating servers into full compliance. Management believes that testing of this
new software will not be necessary, as it has already been proven in the
industry to be Y2K compliant.
Desktop Software - Management has reviewed all desktop systems and software
applications, identified those that are not in compliance and compiled a list of
necessary upgrades. Those upgrades have been completed for 95% of the current
systems and are now Y2K compliant. The remaining upgrades for 5% of the systems
are anticipated to be completed by the end of the first quarter. As part of the
continuing efforts to be Y2K compliant, every new system is tested upon
installation.
The status of desktop compliance is as follows:
o Systems (hardware and software) testing - Complete
o Installation of updated software that also provides Y2K compliance - November
1998 o Complete installation/full compliance - First Quarter 1999
Secondary Information Systems - "Secondary" information systems include, but are
not limited to: payroll; fixed-asset system; and forecasting modeling software,
which provide projections on property returns and other items. Letters have been
received confirming Y2K compliance from the vendors of CRLP's secondary systems.
The number of computers related to these secondary systems are nominal and
testing is expected to be completed by the end of the second quarter of 1999.
Telecommunications Systems - In general, management believes that the internal
telephone systems are not date sensitive and should not be materially affected
by Y2K problems. A letter has been received from the telephone system vendor
confirming Y2K readiness of the voice mail system, telephone system and
telephone hardware. Testing will be completed by the end of the second quarter
of 1999.
Phase Two - Determining the Cost of Achieving Y2K Readiness and Implementing the
Y2K Action Plan
During the last two years, costs for new technology to ensure Y2K readiness,
including computers, telephone systems, and software, has been approximately $1
million and an additional $400,000 is estimated to be spent on property
management software upgrades and testing from a third-party consultant on
current secondary systems. However, the costs of the project and the completion
date are based on management's best estimates, which are based on numerous
assumptions of future events.
Phase Three - Assessing the Risks to CRLP of Noncompliance
Management does not believe that the impact of Y2K will have a material adverse
effect on CRLP's financial condition, results of operations and cash flows. Such
belief is based on management's analysis of the risks to CRLP related to CRLP's
own potential Y2K problems discussed above and the assessment of the Y2K
problems of vendors, suppliers, and customers.
Property Management Systems - Management believes that the Y2K risks to CRLP's
financial condition and operations associated with a failure of building
management systems is immaterial due to the fact that each of CRLP's properties
have, for the most part, separate building management systems. In addition,
based upon the investigation results received to date, management believes there
is sufficient time to correct those system problems within CRLP's control before
the Year 2000.
In the event a failure of essential property management systems occurs at one or
more of CRLP's buildings, whether due to a failure of a Company system or an
interruption of utilities, management believes that the individual tenant leases
will protect CRLP from claims of constructive eviction or other remedies that
could result in a termination of lease rights. It is also management's belief
that most of the leases eliminate, limit or qualify the rights of a tenant to
receive an abatement under such circumstances. Although there is always a risk
of claims being brought on a noncontractual basis (e.g., in tort), it is
management's belief that CRLP's efforts to identify and solve Y2K problems will
minimize such risk. CRLP has also attempted to allocate the risk of
noncompliance to the vendors and manufacturers of the property management and
information systems by establishing standard riders and addenda to be attached
to new contracts for systems using time sensitive data.
Information Systems - Because CRLP's major source of income is rental payments
under long-term leases, the failure of key information systems is not expected
to have a material adverse effect on CRLP's financial condition, results of
operations, or cash flows for its existing properties. Even if problems with the
information systems are experienced, the payment of rent under leases would not
be excused. However, the ability of CRLP to produce complete and accurate
financial information in a timely fashion could be impaired. This situation
would affect CRLP's anticipated development projects or acquisitions of new
properties. Management expects to correct any information system problems within
CRLP's control before the Year 2000, thereby minimizing or avoiding the
increased cost of correcting problems after the fact.
Our Vendors - The success of CRLP's business is not closely tied to the
operations of any one manufacturer, vendor or supplier. Accordingly, if any
manufacturers, vendors or suppliers cease to conduct business due to Y2K related
problems, management expects to be able to contract with alternate providers
without experiencing any material adverse effect on CRLP's financial condition,
results of operations, or cash flows.
Our Customers - Because of a broad customer/tenant base, CRLP's success is not
closely tied to the success of any particular tenant. Accordingly, management
believes that there should not be a material adverse effect on CRLP's financial
condition, results of operations, or cash flows if any tenant ceases to conduct
business due to Y2K related problems. CRLP has requested that major tenants
provide periodic updates as to their Y2K readiness.
Phase Four - Developing Contingency Plans
CRLP currently does not have contingency plans in place; however, management
expects to develop and implement contingency plans by the end of the second
quarter of 1999. CRLP's contingency plans will be structured to address both
restoration of systems and their components and overall business operating risk.
These plans are intended to mitigate both internal risks, as well as potential
risks in the supply chain of CRLP's suppliers and customers.
RECENTLY ISSUED ACCOUNTING STANDARD
Statement of Financial Accounting Standards No. 133 (SFAS 133), Accounting for
Derivative Instruments and Hedging Activities, addresses the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. Under SFAS 133, CRLP will be required
to account for derivative financial instruments, if any, at their fair market
value, and make certain required disclosures. CRLP is required to adopt SFAS 133
for periods beginning January 1, 2000.
INFLATION
Substantially all of the leases at the retail properties provide for the
pass-through to tenants of certain operating costs, including real estate taxes,
common area maintenance expenses, and insurance. Leases at the multifamily
properties generally provide for an initial term of six months to one year and
allow for rent adjustments at the time of renewal. Leases at the office
properties typically provide for rent adjustments and the pass-through of
certain operating expenses during the term of the lease. All of these provisions
permit CRLP to increase rental rates or other charges to tenants in response to
rising prices and, therefore serve to minimize CRLP's exposure to the adverse
effects of inflation.
Item 8. Financial Statements and Supplementary Data.
The following are filed as a part of this report:
Report of Independent Accountants
Financial Statements:
Consolidated Balance Sheets as of December 31, 1998 and 1997
Consolidated Statements of Income for the years ended December 31,
1998, 1997, and 1996
Consolidated Statements of Partner's Capital for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
Report of Independent Accountants
To the Partners
of Colonial Realty Limited Partnership
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of
Colonial Realty Limited Partnership at December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedules listed in the accompanying index present fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedules are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits. We conducted
our audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers L.L.P.
PricewaterhouseCoopers L.L.P.
Birmingham, Alabama
January 13, 1999, except for Note 13, as
to which the date is February 10, 1999
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
1998 1997
- --------------------------------------------------------------------------------
ASSETS
Land, buildings, & equipment, net $ 1,566,840 $ 1,268,430
Undeveloped land and construction in progress 128,336 98,555
Cash and equivalents 4,582 4,534
Restricted cash 2,897 2,665
Accounts receivable, net 9,151 7,174
Prepaid expenses 3,116 3,038
Notes receivable 696 575
Deferred debt and lease costs 9,644 7,031
Investment in partnerships 26,079 (28)
Other assets 5,207 4,686
- --------------------------------------------------------------------------------
$ 1,756,548 $ 1,396,660
- --------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable $ 909,322 $ 702,044
Accounts payable 8,150 11,913
Accounts payable to affiliates 4,670 2,320
Accrued interest 12,051 6,526
Accrued expenses 3,559 2,700
Tenant deposits 4,272 3,715
Unearned rent 2,800 2,253
- --------------------------------------------------------------------------------
Total liabilities 944,824 731,471
- --------------------------------------------------------------------------------
Redeemable units, at redemption value 282,597 299,492
- --------------------------------------------------------------------------------
Partners' capital excluding redeemable units 529,127 365,697
- --------------------------------------------------------------------------------
$ 1,756,548 $ 1,396,660
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
For the Years Ended December 31, 1998, 1997, 1996
- -------------------------------------------------------------------------------------------------
1998 1997 1996
- -------------------------------------------------------------------------------------------------
Revenue:
Base rent $ 206,234 $ 154,063 $ 115,174
Base rent from affiliates 1,027 879 758
Percentage rent 4,002 2,161 1,841
Tenant recoveries 31,573 17,349 10,717
Other 14,531 9,674 6,391
- -------------------------------------------------------------------------------------------------
Total revenue 257,367 184,126 134,881
- -------------------------------------------------------------------------------------------------
Property operating expenses:
General operating expenses 20,590 12,603 9,530
Salaries and benefits 12,600 10,283 8,606
Repairs and maintenance 24,795 18,669 13,073
Taxes, licenses, and insurance 22,312 15,578 11,538
General and administrative 7,675 6,448 4,071
Depreciation 46,841 31,956 22,025
Amortization 1,806 1,322 1,509
- -------------------------------------------------------------------------------------------------
Total operating expenses 136,619 96,859 70,352
- -------------------------------------------------------------------------------------------------
Income from operations 120,748 87,267 64,529
- -------------------------------------------------------------------------------------------------
Other income (expense):
Interest expense (52,063) (40,496) (24,584)
Income (loss) from partially owned entities (43) 502 635
Gains (losses) from sales of property (19) 2,567 469
- -------------------------------------------------------------------------------------------------
Total other expense (52,125) (37,427) (23,480)
- -------------------------------------------------------------------------------------------------
Income before extraordinary items 68,623 49,840 41,049
Extraordinary loss from early extinguishment of debt (401) (3,650) (511)
- -------------------------------------------------------------------------------------------------
Net income 68,222 46,190 40,538
Dividends to preferred unitholders (10,938) (1,671) -0-
- -------------------------------------------------------------------------------------------------
Net income available to common unitholders 57,284 44,519 40,538
- -------------------------------------------------------------------------------------------------
Basic and Diluted net income per unit:
- -------------------------------------------------------------------------------------------------
Income before extraordinary item $ 1.65 $ 1.64 $ 1.60
Extraordinary loss from early extinguishment of debt (0.01) (0.09) (0.02)
- -------------------------------------------------------------------------------------------------
Net income per common unit $ 1.64 $ 1.55 $ 1.58
- -------------------------------------------------------------------------------------------------
Weighted average common units outstanding 34,944 28,719 25,703
- -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statments.
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(Amounts in Thousands)
For the Years Ended December 31, 1998, 1997, 1996
- --------------------------------------------------------------
Total
Partners'
Capital
- --------------------------------------------------------------
Balance, December 31, 1995 $ 102,999
Cash Contributions 106,847
Distributions (51,819)
Net income 40,538
Issuance of limited partnership units 7,027
Allocations to redeemable units (48,502)
- --------------------------------------------------------------
Balance, December 31, 1996 157,090
Cash Contributions 221,873
Distributions (59,471)
Net income 44,519
Issuance of limited partnership units 45,079
Allocations to redeemable units (43,393)
- --------------------------------------------------------------
Balance, December 31, 1997 365,697
Cash Contributions 142,243
Distributions (76,545)
Net income 57,284
Earnings in minority interest property 153
Issuance of limited partnership units 23,400
Allocations to redeemable units 16,895
- --------------------------------------------------------------
Balance, December 31, 1998 529,127
- --------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
For the Years Ended December 31, 1998, 1997, 1996
- ------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 57,284 $ 44,519 $ 40,538
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 48,647 33,278 23,533
Income from partnerships (110) (502) (635)
Gains from sales of property 19 (2,567) 468
Other, net 336 4,204 90
Decrease (increase) in:
Restricted cash (232) (215) (371)
Accounts receivable (4,287) (2,620) (3,246)
Prepaid expenses (75) 879 (248)
Other assets 729 424 (1,187)
Increase (decrease) in:
Accounts payable (1,413) (3,191) 10
Accrued interest 5,525 1,061 3,570
Accrued expenses and other (2,967) (5,421) 404
- ------------------------------------------------------------------------------
Net cash provided by
operating activities 103,456 69,849 62,926
- ------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of properties (312,585) (301,931) (125,926)
Development expenditures (62,075) (37,589) (22,168)
Development expenditures paid to
an affiliate (40,347) (46,481) (70,414)
Tenant improvements (4,140) (2,792) (1,029)
Capital expenditures (24,982) (12,325) (6,825)
Proceeds from sales of property,
net of selling costs 52,238 54,092 1,254
Distributions from partnerships 32,314 719 984
Capital contributions to partnerships (5,850) (320) (14)
- ------------------------------------------------------------------------------
Net cash used in investing
activities (365,427) (346,627) (224,138)
- ------------------------------------------------------------------------------
Cash flows from financing activities:
Principal reductions of debt (31,725) (122,880) (45,798)
Proceeds from additional borrowings 173,976 175,246 179,540
Net change in revolving credit balance 57,403 68,271 (21,877)
Cash contributions 142,243 221,873 106,847
Cash distributions (76,545) (59,471) (51,819)
Payment of mortgage financing cost (3,734) (1,417) (3,416)
Other, net 401 (3,650) (510)
- ------------------------------------------------------------------------------
Net cash provided by financing
activities 262,019 277,972 162,967
- ------------------------------------------------------------------------------
Increase in cash and equivalents 48 1,194 1,755
Cash and equivalents, beginning of period 4,534 3,340 1,585
- ------------------------------------------------------------------------------
Cash and equivalents, end of period $ 4,582 $ 4,534 $ 3,340
- ------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the year for interest$ 46,538 $ 39,435 $ 20,077
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
1. Organization and Basis of Presentation
Organization - Colonial Realty Limited Partnership (the "Operating
Partnership"or "CRLP"), a Delaware limited partnership, was formed on August 6,
1993, to succeed as owner of substantially all of the predecessor interest of
Colonial Properties, Inc. (CPI), Equity Partners Joint Venture, and Colonial
Properties Management Association, and certain real estate interest of Thomas H.
Lowder, Robert E. Lowder, James K. Lowder, Catherine K. Lowder, and the Bellwood
Trust (collectively referred to as the Colonial Group for purposes of these
financial statements). CRLP is the operating partnership of Colonial Properties
Trust, an Alabama real estate investment trust (the "Company") whose shares are
listed on the New York Stock Exchange ("NYSE"). CRLP is engaged in the
ownership, development, management, and leasing of multifamily housing
communities, retail malls and centers, and office buildings. Certain parcels of
land are also included.
Federal Income Tax Status -No provision for income taxes is provided
since all taxable income or loss or tax credits are passed through to the
partners. The Company, which is considered a corporation for federal income tax
purposes, qualifies as a real estate investment trust ("REIT") for federal
income tax purposes and generally will not be subject to federal income tax to
the extent it distributes its REIT taxable income to its shareholders. REITs are
subject to a number of organizational and operational requirements. If the
Company fails to qualify as a REIT in any taxable year, the Company will be
subject to federal income tax on its taxable income at regular corporate rates.
Principles of Consolidation - The consolidated financial statements
include the Operating Partnership and Colonial Properties Services Limited
Partnership (in which CRLP holds 99% general and limited partner interests).
Investments in Partially Owned Entities - Partnerships and corporations
in which CRLP owns a 50% or less interest and does not control are reflected in
the consolidated financial statements as investments accounted for under the
equity method. Under this method the investment is carried at cost plus or minus
equity in undistributed earnings or losses since the date of acquisition.
2. Summary of Significant Accounting Policies
Land, Buildings, and Equipment - Land, buildings, and equipment is
stated at the lower of cost, less accumulated depreciation, or net realizable
value. Where an impairment of a property's value is determined to be other than
temporary, an allowance for the estimated potential loss is established to
record the property at its net realizable value. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets, which
range from seven to 40 years. Repairs and maintenance are charged to expense as
incurred. Replacements and improvements are capitalized and depreciated over the
estimated remaining useful lives of the assets. When items of land, buildings,
or equipment are sold or retired, the related cost and accumulated depreciation
are removed from the accounts and any gain or loss is included in the results of
operations.
Undeveloped Land and Construction in Progress - Undeveloped land and
construction in progress is stated at the lower of cost or net realizable value.
CRLP capitalizes all costs associated with land development including
construction period interest and property taxes.
Capitalization of Interest - CRLP capitalizes interest during periods
in which property is undergoing development activities necessary to prepare the
asset for its intended use.
Cash and Equivalents - CRLP includes highly liquid marketable
securities and debt instruments purchased with a maturity of three months or
less in cash equivalents.
Restricted Cash - Cash which is legally restricted as to use consists
primarily of tenant deposits.
Deferred Debt and Lease Costs - Amortization of debt costs is recorded
using the straight-line method, which approximates the effective interest
method, over the terms of the related debt. Leasing commissions and fees are
amortized using the straight-line method over the terms of the related leases.
Derivatives - CRLP has only limited involvement with derivative
financial instruments and does not use them for trading purposes. Interest rate
cap agreements and interest rate swaps are used to reduce the potential impact
of increases in interest rates on variable-rate debt. Premiums paid for
purchased interest rate cap agreements are amortized to expense over the terms
of the caps. Unamortized premiums are included in other assets in the balance
sheets. Amounts receivable under cap agreements are accrued as a reduction of
interest expense. Payments under interest rate swap agreements are recognized as
adjustments to interest expense as incurred. Treasury lock agreements are used
by CRLP to set interest rates in anticipation of public debt offerings. Any
gains or losses related to treasury locks are included in deferred debt and
lease cost on the balance sheet and amortized over the life of the related debt
to the extent that such treasury locks are utilized. All unutilized treasury
locks are expensed when their future utility expires. All treasury locks were
utilized during 1998 and 1997.
Revenue Recognition - Rental income and management fees are recognized
as earned. Anticipated losses, if any, are recognized when such amounts become
known.
Net Income Per Unit - Basic net income per unit is calculated by
dividing the net income available to common unitholders by the weighted average
numbers of common units outstanding during the periods. Diluted net income per
unit is calculated by dividing the net income available to common unitholders by
the weighted average numbers of common units outstanding during the periods,
adjusted for the assumed conversion of all potentially dilutive securities.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the reported amounts of revenues and expenses. Actual results
could differ from those estimates.
Recently Issued Accounting Standard - Statement of Financial Accounting
Standards No. 133 (SFAS 133), Accounting for Derivative Instruments and Hedging
Activities, addresses the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and hedging
activity. Under SFAS 133, CRLP will be required to account for derivative
financial instruments, if any, at their fair market value, and make certain
required disclosures. CRLP is required to adopt SFAS 133 for periods beginning
January 1, 2000.
Segment Reporting - In 1998, CRLP adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), Disclosure about Segments of an
Enterprise and Related Information. Reportable segments are identified based
upon management's approach for making operating decisions and assessing
performance of CRLP. The adoption of SFAS 131 did not affect results of
operations or financial position but did require the disclosure of segment
information (see Note 7).
Software Development - CRLP capitalizes certain internally developed
software costs. Costs capitalized in connection with internal software
development are amortized using the straight-line method over the estimated
useful life of the software.
Reclassifications - Certain immaterial reclassifications have been made
to the 1996 and 1997 financial statements in order to conform them to the 1998
financial statement presentation.
3. Property Acquisitions and Dispositions
CRLP acquired 12 properties and invested in an additional joint
venture during 1998, 25 properties during 1997, and 11 properties during 1996 at
aggregate costs of $348.6 million, $430.6 million, and $173.7 million,
respectively. CRLP funded these acquisitions with cash proceeds from its public
offerings of equity (see Note 9) and debt (see Note 8), advances on bank lines
of credit, the issuance of limited partnership units in CRLP, the proceeds
received from the formation of joint ventures (see Note 6), and cash from
operations.
Effective
Acquisition
Location Date
- --------------------------------------------------------------------------------
Retail Properties:
Briarcliffe Mall .................. Myrtle Beach, SC July 1, 1996
Colonial Promenade Wekiva ......... Orlando, FL October 1, 1996
Colonial Promenade Bardmoor ....... St. Petersburg, FL October 1, 1996
Colonial Promenade
Hunter's Creek .............. Orlando, FL October 1, 1996
Colonial Shoppes Inverness ........ Birmingham, AL March 24, 1997
Beechwood Shopping Center ......... Athens, GA March 27, 1997
Brookwood Village ................. Birmingham, AL May 13, 1997
Lakewood Plaza .................... Jacksonville, FL October 1, 1997
Glynn Place Mall .................. Brunswick, GA November 1, 1997
Lakeshore Mall .................... Gainesville, GA November 1, 1997
Valdosta Mall ..................... Valdosta, GA November 1, 1997
Holly Hill Mall ................... Burlington, NC November 1, 1997
Yadkin Town Center ................ Yadkinville, NC November 1, 1997
Mayberry Mall ..................... Mount Airy, NC November 1, 1997
Quaker Village .................... Greensboro, NC November 1, 1997
Stanly Plaza ...................... Locust, NC November 1, 1997
Rivermont Plaza ................... Chattanooga, TN November 1, 1997
Staunton Mall ..................... Staunton, VA November 1, 1997
Abingdon Village .................. Abingdon, VA November 1, 1997
Village at Roswell Summit ......... Atlanta, GA December 31, 1997
Orlando Fashion Square ............ Orlando, FL May 29, 1998
Shoppes at Mansell ................ Atlanta, GA July 1, 1998
Parkway City Mall ................. Huntsville, AL December 9, 1998
Bel Air Village ................... Mobile, AL December 29, 1998
Multifamily Properties:
Colonial Village at Ashford Place . Mobile, AL April 1, 1996
Colonial Village at Hillcrest ..... Mobile, AL April 1, 1996
Colonial Grand at Spring Creek .... Macon, GA April 1, 1996
Colonial Grand at Galleria Woods .. Birmingham, AL April 15, 1996
Colonial Grand at Mountain Brook .. Birmingham, AL May 10, 1996
Colonial Village at Cahaba Heights Birmingham, AL May 10, 1996
Colonial Grand at Barrington ...... Macon, GA September 13, 1996
Colonial Village at Trussville .... Birmingham, AL April 1, 1997
Colonial Village at Timothy Woods . Athens, GA July 1, 1997
Colonial Grand at Oakleigh ........ Pensacola, FL July 1, 1997
Colonial Grand at Natchez Trace ... Jackson, MS August 1, 1997
Colonial Village at Caledon Wood .. Greenville, SC October 1, 1997
Colonial Village at Ashley Plantation Bluffton, SC May 1, 1998
Colonial Village at Haverhill ..... San Antonio, TX July 1, 1998
Colonial Village at Walton Way .... Augusta, GA July 1, 1998
Colonial Village at River Hills I . Tampa, FL July 1, 1998
Office Properties:
Riverchase Center ................. Birmingham, AL January 1, 1997
Lakeside Office Park .............. Huntsville, AL May 23, 1997
Progress Center ................... Huntsville, AL June 24, 1997
Mansell Business Park ............. Atlanta, GA July 31, 1997
Perimeter Corporate Park .......... Huntsville, AL January 1, 1998
Independence Plaza ................ Birmingham, AL January 1, 1998
Shades Brook Building ............. Birmingham, AL July 1, 1998
Mansell Overlook 200 .............. Atlanta, GA July 1, 1998
Concourse Center .................. Tampa, FL July 1, 1998
Results of operations of these properties, subsequent to their
respective acquisition dates, are included in the consolidated financial
statements of CRLP. The cash paid to acquire these properties is included in the
statements of cash flows. The acquisitions during 1998, 1997, and 1996 are
comprised of the following:
(in thousands) 1998 1997 1996
- -------------- ---- ---- ----
Assets purchased:
Land, buildings, and equipment .... $ 348,564 $ 430,614 $ 173,277
Other assets ...................... -- 4 455
- --------------------------------------------------------------------------------
348,564 430,618 173,732
Notes and mortgages assumed ........... (7,509) (74,910) (40,444)
Other liabilities assumed ............. (5,070) (8,716) (1,774)
Issuance of limited partnership units of
Colonial Realty Limited
Partnership (23,400) (45,061) (5,587)
- --------------------------------------------------------------------------------
Cash paid .............................. $ 312,585 $ 301,931 $ 125,927
- --------------------------------------------------------------------------------
During 1998, CRLP contributed Orlando Fashion Square into a joint
venture equally owned by CRLP and an unrelated party. Proceeds received from
this contribution were used to fund additional acquisitions and developments.
CRLP accounts for its 50% interest in the joint venture as an equity investment
(see Note 6).
CRLP's unaudited pro forma results of operations, assuming these
acquisitions and disposition had been effected by CRLP prior to January 1, 1997,
are as follows:
For the Year Ended For the Year Ended
December 31, 1997 December 31, 1998
(in thousands) (unaudited) (unaudited)
- --------------------------------------------------------------------------------
Revenues $ 265,903 $ 250,713
- --------------------------------------------------------------------------------
Net Income available to
common unitholders $ 61,481 $ 65,980
- --------------------------------------------------------------------------------
Net Income per unit-basic and diluted 1.65 1.60
- --------------------------------------------------------------------------------
4. Land, Buildings, and Equipment
Land, buildings, and equipment consists of the following at December 31, 1998
and 1997:
(in thousands) ......... 1998 1997
- -----------------------------------------------------
Buildings .............. $ 1,416,937 $ 1,140,504
Furniture and fixtures . 43,074 30,147
Equipment .............. 12,027 3,087
Land improvements ...... 35,580 27,343
Tenant improvements .... 18,733 15,273
- -----------------------------------------------------
1,526,351 1,216,354
Accumulated depreciation (169,522) (124,254)
- -----------------------------------------------------
1,356,829 1,092,100
Land ................... 210,011 176,330
- -----------------------------------------------------
$ 1,566,840 $ 1,268,430
=====================================================
5. Undeveloped Land and Construction in Progress
During 1998, CRLP completed the construction of five multifamily
development projects at a combined total cost of $77.0 million. The multifamily
development projects produced 1,260 new apartment units that were completed
during 1998 and 1997. The completed multifamily developments are as follows:
Total Total
Units Cost
Completed Developments:
Colonial Village at River Hills II Tampa, FL 276 $14,186
Colonial Village at Inverness Birmingham, AL 84 6,631
Colonial Grand at Hunter's Creek Orlando, FL 496 33,426
Colonial Grand at Bayshore II Bradenton, FL 164 9,289
Colonial Grand at Wesleyan Macon, GA 240 13,503
- --------------------------------------------------------------------------------
1,260 $77,035
================================================================================
CRLP currently has 15 active expansion and development projects in
progress and various parcels of land available for expansion, construction, or
sale. During 1998, CRLP completed construction on 596 apartment units (including
the remaining units completed in the projects mentioned above), and CRLP has an
additional 2,978 apartment units in progress at December 31, 1998. Undeveloped
land and construction in progress is comprised of the following at December 31,
1998:
Costs
Estimated Total Costs Capitalized
to Date
Completion(in thousands)(in thousands)
- -----------------------------------------------------------------------------------------------------
Multifamily Projects:
Colonial Grand at Inverness Lakes II (expansion) 132 1999 $ 8,900 $ 8,838
Colonial Village at Ashley Plantation (expansion) 214 1999 13,800 2,949
Colonial Grand at Edgewater II (expansion) 192 1999 12,600 12,487
Colonial Grand at Wesleyan II (expansion) 88 1999 6,200 5,945
Colonial Grand at Liberty Park 300 2000 26,218 2,924
Colonial Grand at Heather Glen 448 2000 31,234 9,800
Colonial Grand at Citrus Park 176 1999 12,300 9,482
Colonial Grand at Lakewood Ranch 288 1999 20,300 17,839
Colonial Grand at Cypress Crossing 250 1999 20,000 19,176
Colonial Grand at Madison 336 2000 23,000 4,690
Colonial Grand at Promenade 384 2000 27,878 4,320
Colonial Grand at Ridgeland 170 2000 12,400 1,454
- ----------------------------------------------------------------------------------------------
Total Multifamily Projects 2,978 214,830 99,904
- ----------------------------------------------------------------------------------------------
Retail Projects:
Colonial Promenade Trussville 386,000 2001 31,000 5,321
- ----------------------------------------------------------------------------------------------
Total Retail Projects 386,000 31,000 5,321
- ----------------------------------------------------------------------------------------------
Office Projects:
1800 International Park 149,457 1999 16,600 3,950
Colonial Center at Research Park 133,368 1999 13,000 1,373
- ----------------------------------------------------------------------------------------------
Total Office Projects 282,825 29,600 5,323
- ----------------------------------------------------------------------------------------------
Other Projects and Undeveloped Land 17,788
- ----------------------------------------------------------------------------------------------
$275,430 $128,336
==============================================================================================
Interest capitalized on construction in progress during 1998, 1997, and
1996 was $3.7 million, $4.1 million, and $3.7 million, respectively.
6. Investment in Partnerships
Investment in partnerships at December 31, 1998 and 1997 consists of
the following:
Percent
(in thousands) Owned 1998 1997
- -----------------------------------------------------------------------------
Office:
600 Building Partnership, Birmingham, AL 33.34% $ (30) $ (8)
Anderson Block Properties Partnership,
Montgomery, AL 33.33% (24) (38)
- -----------------------------------------------------------------------------
(54) (46)
Retail:
Orlando Fashion Square, Orlando, FL 50.00% 20,241 --
Parkway Place LP, Huntsville, AL 50.00% 5,859 --
- -----------------------------------------------------------------------------
26,100 --
Other:
Colonial/Polar-BEK Management Company,
Birmingham, AL 50.00% 33 18
- -----------------------------------------------------------------------------
33 18
- -----------------------------------------------------------------------------
$ 26,079 $ (28)
=============================================================================
During December 1998, CRLP entered into two joint ventures. The Parkway
Place Limited Partnership owns and operates the Parkway City Mall in Huntsville,
Alabama. At December 31, 1998, CRLP had invested approximately $5.7 million in
the joint venture and had an ending net investment balance of $5.9 million. The
Orlando Fashion Square Joint Venture owns and operates the Orlando Fashion
Square in Orlando, Florida. CRLP's net investment in the joint venture at
December 31, 1998 was $20.2 million. Both joint ventures have been accounted for
using the equity method.
The summarized financial information related to the significant
partially owned entities is as follows:
December 31, 1998 (in thousands)
Balance Sheet
Assets
Land, building, and equipment, net ............. $ 113,799
Construction in progress ....................... 3,369
Other assets ................................... 1,175
------------------------------------------------------------
Total assets .......................... $ 118,343
------------------------------------------------------------
Liabilities and Partners' Equity
Notes payable .................................. $ 65,000
Other liabilities .............................. 392
Partners' Equity ............................... 52,951
------------------------------------------------------------
Total liabilities and partners' capital $ 118,343
------------------------------------------------------------
Statement of Operations
Revenues ......................................... $ 246
Operating expenses ............................... (76)
Depreciation and amortization .................... (14)
- --------------------------------------------------------------
Net income .............................. $ 156
-------------------------------------------------------------
7. Segment Information
CRLP is organized into, and manages its business based on the
performance of, three separate and distinct operating divisions: Multifamily,
Retail, and Office. Each division has a separate management team that is
responsible for acquiring, developing, managing, and leasing properties within
each division. The applicable accounting policies of the segments are the same
as those described in the "Summary of Significant Accounting Policies."
Management evaluates the performance of its segments and allocates resources to
them based on net operating income (NOI). NOI consists of revenues in excess of
general operating expenses, salaries and wages, repairs and maintenance, taxes,
licenses, and insurance. Segment information for the years ended December 31,
1998, 1997, and 1996 is as follows:
(in thousands)
1998 Retail Office Multifamily Total
- -----------------------------------------------------------------
Divisional revenues $117,572 $ 34,409 $104,462 $ 256,443
NOI 83,059 24,307 68,789 176,155
Divisional assets 683,042 240,161 783,097 1,706,300
1997
- -----------------------------------------------------------------
Divisional revenues $ 71,179 $ 16,224 $ 95,503 $ 182,906
NOI 51,500 11,615 62,658 125,773
Divisional assets 577,954 147,974 652,923 1,378,851
1996
- -----------------------------------------------------------------
Divisional revenues $ 45,775 $ 7,337 $ 80,914 $ 134,026
NOI 33,455 4,813 53,011 91,279
Divisional assets 306,771 32,457 595,397 934,625
A reconciliation of total segment revenues to total revenues, total
segment NOI to income from operations, and total divisional assets to total
assets, for the years ended December 31, 1998, 1997, and 1996, is presented
below:
(in thousands)
Revenues 1998 1997 1996
- ----------------------------------------------------------------------------------
Total divisional revenues $ 256,443 $ 182,906 $ 134,026
Unallocated corporate revenues 924 1,220 855
- ----------------------------------------------------------------------------------
Total revenues $ 257,367 $ 184,126 $ 134,881
- ----------------------------------------------------------------------------------
NOI 1998 1997 1996
- ----------------------------------------------------------------------------------
Total divisional NOI $ 176,155 $ 125,773 $ 91,279
Unallocated corporate revenues 924 1,220 855
General and administrative expenses (7,675) (6,448) (4,071)
Depreciation (46,841) (31,956) (22,025)
Amortization (1,806) (1,322) (1,509)
Other (9) -- --
- ----------------------------------------------------------------------------------
Income from operations $ 120,748 $ 87,267 $ 64,529
- ----------------------------------------------------------------------------------
Assets 1998 1997 1996
- ----------------------------------------------------------------------------------
Total divisional assets $ 1,706,300 $ 1,378,851 $ 934,625
Unallocated corporate assets 50,248(1) 17,809 13,322
- ----------------------------------------------------------------------------------
Total assets $ 1,756,548 $ 1,396,660 $ 947,947
- ----------------------------------------------------------------------------------
(1) Includes the Company's investment in partially owned entities of $25,181
(see Note 6).
8. Notes and Mortgages Payable
Notes and mortgages payable at December 31, 1998 and 1997 consist of the
following:
(in thousands) 1998 1997
- --------------------------------------------------
Revolving credit agreement $174,489 $117,086
Mortgages and other notes:
4.50% to 6.00% 66,305 66,305
6.01% to 7.50% 471,694 316,701
7.51% to 9.00% 179,187 175,207
9.01% to 10.25% 17,647 26,745
- --------------------------------------------------
$909,322 $702,044
--------------------------------------------------
As of December 31, 1998, CRLP has an unsecured bank line of credit
providing for total borrowings of up to $250 million. This line of credit
agreement bears interest at LIBOR plus 80 to 135 basis points, is renewable in
July 2000 and provides for a two-year amortization in the case of nonrenewal.
The line of credit agreement includes a competitive bid feature that will allow
CRLP to convert up to $125 million under the line of credit to a fixed rate, for
a fixed term not to exceed 90 days. The credit facility is primarily used by
CRLP to finance property acquisitions and development and has an outstanding
balance at December 31, 1998, of $174.5 million. The weighted average interest
rate of this short-term borrowing facility, including the competitive bid
balance, was 6.42% and 6.70% at December 31, 1998 and 1997, respectively.
During 1998 and 1997, CRLP completed five public offerings of unsecured
debt securities totaling $350 million. The proceeds of the offerings were used
to fund acquisitions, development expenditures, repay balances outstanding on
CRLP's revolving credit facility, repay certain notes and mortgages payable, and
for general corporate purposes. Details relating to these debt offerings are as
follows:
Gross Proceeds
Date Type of Note Maturity Rate (in thousands)
- --------------------------------------------------------------------------------
January 1997 Medium-term January 2003 7.16% $ 50,000
July 1997 Medium-term July 2004 6.96% $ 75,000
August 1997 Medium-term August 2005 6.96 $ 25,000
September 1997 Medium-term September 2005 6.98% $ 25,000
July 1998 Senior July 2007 7.00 $175,000
CRLP has entered into an interest rate cap agreement which limits debt
of $50 million to an interest rate of 8.00% through May 2, 2000. CRLP paid
$227,500 for the interest rate cap, which is being amortized over the life of
the agreement. Subsequent to year-end, CRLP entered into two interest rate swap
agreements. On January 4, 1999, Colonial entered into an interest rate swap for
$50 million of its line of credit at 4.97% plus 80 to 135 basis points and on
January 15, 1999, CRLP entered into an interest rate swap for $52 million of tax
exempt bonds at a rate of 3.23%. Both of these interest rate swap agreements
have one-year terms and any payments made or received under the agreements are
recognized as adjustments to interest expense as incurred. Treasury lock
agreements are used by CRLP, to set interest rates in anticipation of public
debt offerings. CRLP is exposed to credit losses in the event of nonperformance
by the counterparties to its interest rate cap and nonderivative financial
assets but has no off-balance-sheet credit risk of accounting loss. CRLP
anticipates, however, that counterparties will be able to fully satisfy their
obligations under the contracts. CRLP does not obtain collateral or other
security to support financial instruments subject to credit risk but monitors
the credit standing of counterparties.
At December 31, 1998, CRLP had $704.5 million in unsecured indebtedness
including balances outstanding on its bank line of credit and certain other
notes payable. The remainder of CRLP's notes and mortgages payable are
collateralized by the assignment of rents and leases of certain properties and
assets with an aggregate net book value of $320.8 million at December 31, 1998.
The aggregate maturities of notes and mortgages payable at December 31,
1998, are as follows:
(in thousands)
- ---------------------------------------------
1999 $ 12,809
2000 224,308
2001 79,128
2002 1,404
2003 108,652
Thereafter 483,021
- ---------------------------------------------
$909,322
- ---------------------------------------------
Based on borrowing rates available to CRLP for notes and mortgages
payable with similar terms, the estimated fair value of CRLP's notes and
mortgages payable at December 31, 1998 and 1997 was approximately $912.6 million
and $711.0 million, respectively.
Certain loan agreements of CRLP contain restrictive covenants which,
among other things, require maintenance of various financial ratios. At December
31, 1998, CRLP was in compliance with these covenants.
Certain partners of CRLP have guaranteed indebtedness of CRLP totaling
$33.5 million at December 31, 1998. These individuals have not been indemnified
by CRLP.
9. Cash Contributions
During 1998, 1997 and 1996, the Company completed eight public offerings of
common stock totaling 12,575,070 common shares of beneficial interest (Common
Shares) and one public offering of preferred stock (Preferred Shares) totaling
5,000,000. The proceeds of the offerings were contributed to CRLP and used to
fund acquisition and development expenditures, repay balances outstanding on
CRLP's revolving credit agreement, repay certain notes and mortgages payable,
and for general corporate purposes. Details relating to these equity offerings
are as follows:
(in thousands)
-------------------------------
Number of Price Per Gross Offering Net
Offering Shares Share Proceeds Costs Proceeds
- --------------------------------------------------------------------------------------
January 1996 Common 4,600,000 $ 24.63 $ 113,275 $ 6,632 $ 106,643
January 1997 Common 1,500,000 $ 29.88 $ 44,812 $ 1,457 $ 43,355
July 1997 Common 1,700,000 $ 30.94 $ 52,594 $ 2,945 $ 49,649
November 1997 Preferred 5,000,000 $ 25.00 $ 125,000 $ 4,451 $ 120,549
December 1997 Common 165,632 $ 30.19 $ 5,000 $ 330 $ 4,670
February 1998 Common 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March 1998 Common 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March 1998 Common 381,046 $ 31.00 $ 11,812 $ 656 $ 11,156
April 1998 Common 3,046,400 $ 30.13 $ 91,773 $ 4,973 $ 86,800
10. Employee Benefits
Employees of CRLP and Colonial Properties Services, Inc. ("CPSI")
participate in a noncontributory defined benefit pension plan designed to cover
substantially all employees. Pension expense includes service and interest costs
adjusted by actual earnings on plan assets and amortization of prior service
cost and the transition amount. The benefits provided by this plan are based on
years of service and the employee's final average compensation. CRLP's policy is
to fund the minimum required contribution under ERISA and the Internal Revenue
Code.
The table below presents a summary of pension plan status as of
December 31, 1998 and 1997, as it relates to the employees of CRLP and CPSI.
(amounts in thousands) 1998 1997
- ------------------------------------------------------------ ------ ------
Actuarial present value of accumulated benefit obligation
including vested benefits of $1,193 and $828
at December 31, 1998 and 1997, respectively $1,368 $ 961
Actuarial present value of projected benefit obligations
at year end $2,593 $1,957
Fair value of assets at year end $ 981 $ 861
Accrued pension cost $ 868 $ 536
Net pension cost for the year $ 393 $ 310
Actuarial assumptions used in determining the actuarial present value
of accumulated benefit obligations at January 1, 1998, are as follows:
1998 1997
---- ----
Weighted-average interest rate 6.75% 7.25%
- --------------------------------------------------------------------------------
Increase in future compensation levels 4.00% 4.25%
CRLP and CPSI participate in a salary reduction profit sharing plan
covering substantially all employees. This plan provides, with certain
restrictions, that employees may contribute a portion of their earnings with
CRLP and CPSI matching one-half of such contributions, solely at CRLP and CPSI's
discretion. Contributions by CRLP and CPSI were $178,000, $159,000 and $164,000
for the years ended December 31, 1998, 1997 and 1996, respectively.
11. Leasing Operations
CRLP is in the business of leasing and managing office, retail, and
multifamily property. For properties owned by CRLP, minimum rentals due in
future periods under noncancelable operating leases extending beyond one year at
December 31, 1998, are as follows:
(in thousands)
-----------------
1999 $ 107,651
2000 90,435
2001 77,498
2002 67,999
2003 55,640
Thereafter 228,509
-----------------
$ 627,732
=================
The noncancelable leases are with tenants engaged in retail and office
operations in Alabama, Georgia, Florida, North Carolina, South Carolina,
Tennessee, and Virginia. Performance in accordance with the lease terms is in
part dependent upon the economic conditions of the respective areas. No
additional credit risk exposure relating to the leasing arrangements exists
beyond the accounts receivable amounts shown in the December 31, 1998 balance
sheet. Leases with tenants in multifamily properties are generally for one year
or less and are thus excluded from the above table. Substantially all of CRLP's
land, buildings, and equipment represent property leased under the above and
other short-term leasing arrangements.
Rental income for 1998, 1997, and 1996 includes percentage rent of $4.0
million, $2.2 million, and $1.8 million, respectively. This rental income was
earned when certain retail tenants attained sales volumes specified in their
respective lease agreements.
12. Related Party Transactions
CRLP has generally used affiliated construction companies to manage and
oversee its development projects. CRLP paid $40.0 million, $41.3 million, and
$42.6 million ($37.3 million, $39,8 million, and $41.2 million of which was
subsequently then paid to unaffiliated subcontractors, respectively) for
property development costs to Lowder Construction Company, Inc., a construction
company owned by The Colonial Company ("TCC") (an affiliate of certain
shareholders and minority interest holders), during the years ended December 31,
1998, 1997, and 1996, respectively. CRLP had outstanding construction invoices
and retainage payable to Lowder Construction Company, Inc. totaling $4.3 million
and $2.3 million at December 31, 1998 and 1997, respectively. CRLP also paid
$0.4 million, $5.2 million, and $27.9 million for property development costs to
two construction companies owned by three trustees during the years ended
December 31, 1998, 1997, and 1996, respectively. CRLP had outstanding
construction invoices and retainage payable to these construction companies
totaling $1.2 million at December 31, 1998. There were no outstanding
construction invoices and retainage payable to these construction companies at
December 31, 1997.
Colonial Commercial Investments, Inc. ("CCI"), which is owned by
trustees James K. Lowder and Thomas H. Lowder has guaranteed indebtedness
totaling $1.3 million at December 31, 1998 for Anderson Block Properties, which
is a partnership accounted for by CRLP under the equity method (listed in Note
6). CRLP has indemnified CCI from its guarantees of this indebtedness.
On July 1, 1998, CRLP acquired a 79.8% interest in Colonial Village at
Haverhill (formerly Haverhill Apartments). The remaining 20.2% interest in this
property was acquired by entities that are owned by a trustee of CRLP.
In connection with the Riverchase Center acquisition, CRLP initially
acquired a 73% interest in a portion of the office complex. Effective November
1, 1997, CRLP purchased the remaining 27% interest in the property by issuing
114,798 limited partnership units to the seller. The seller is a trustee of
CRLP.
In November 1997, CRLP purchased Polar BEK's 50% interest in Polar
BEK/Colonial Partnership I (a partnership previously accounted for under the
equity method of accounting), a partnership which owned a 168,000 square foot
office building in Birmingham for $7.4 million. This purchase increased CRLP's
ownership from 50% to 100%.
Following is a summary of property acquisitions from entities for which
directors of the Company are involved as a partner or shareholder:
Date Property and Land Acquired Purchase Price Units Issued
- ----------------------- --------------------------------------- --------------------- ----------------------------
November 1998 Colonial Center at Research Park $1.0 million 36,647 CRLP Units
September 1998 1800 International Park $1.8 million(1)
October 1998 Colonial Grand at Promenade $1.5 million 34,700 CRLP Units
July 1998 Mansell Overlook 200 $27.7 million 396,365 CRLP Units
July 1998 Shoppes at Mansell $3.7 million 76,809 CRLP Units
March 1997 Colonial Shoppes Inverness $3.0 million 16,303 CRLP Units
April 1997 Colonial Village at Trussville $20.5 million 57,072 CRLP Units
July 1997 Colonial Village at Timothy Woods $12.8 million 27,275 CRLP Units
August 1997 Colonial Grand at Inverness Lakes II $0.5 million 10,822 CRLP Units
December 1997 Village at Roswell Summit $3.0 million 34,777 CRLP Units
(1) In connection with purchase, the Company issued a $1.8 million note payable
to a related entity.
During 1997 CRLP, through CPSI, exercised options to purchase land from
a related party in the amount of $366,000. As of December 31, 1998, all options
to purchase land from a related party had expired. In December 1997, CPSI
acquired a parcel of land from CCI and sold the land, along with an adjoining
parcel of land, to an unaffiliated third party for a net gain of $60,000. Also
in December 1997, CPSI sold a separate parcel of land to CCI, which resulted in
a net gain of $120,000.
CRLP and its subsidiaries provided certain services to and received
certain services from related entities which resulted in the following income
(expense) included in the accompanying statements of income:
(Amounts in thousands)
1998 1997 1996
----------------------------------
Rental income $1,027 $879 $758
Management/leasing fee income 289 368 356
Insurance brokerage expense (131) (182) (187)
Rental expense 0 (156) (211)
13. Subsequent Event
On January 23, 1999, the Board of Trustees of the Company declared a
cash distribution to partners of CRLP in the amount of $.58 per share and per
partnership unit, totaling $21.3 million. The distribution was made to partners
of record as of February 3, 1999, and was paid on February 10, 1999.
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.
CRLP is managed by the Company, the general partner of CRLP. The
directors and officers of the Company are as follows:
Thomas H. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. He is the chairman of the board, president and chief
executive officer of the Company. Mr. Lowder became President of Colonial
Properties, Inc., the Company's predecessor, in 1976, and since that time has
been actively engaged in the acquisition, development, management, leasing and
sale of multifamily, retail and office properties for the Company. Mr. Lowder is
a member and past president of the Alabama Chapter of the Commercial Investment
Real Estate Institute. Mr. Lowder is a former state Chairman of the Young
Presidents' Organization and is a member of the Birmingham Area Board of
Realtors, the National Association of Industrial Office Parks, the International
Council of Shopping Centers and the National Association of Real Estate
Investment Trusts (NAREIT). He serves on the Board of Directors of, among other
companies, the Children's Hospital of Alabama, American Red Cross - Birmingham
Area Chapter and the United Way of Central Alabama. Mr. Lowder is a member of
the Executive Committee of the Board of Trustees and a member of the board of
directors of the Management Corporation.
Carl F. Bailey, 68, has been a trustee of the Company and a director
of Colonial Properties Services, Inc., which conducts the Company's third-party
management, leasing and brokerage operations (the "Management Corporation")
since September 1993. Mr. Bailey is a former co-chairman of BellSouth
Telecommunications, Inc. and former chairman and chief executive officer of
South Central Bell Telephone Company, positions from which he retired in 1991.
He worked for South Central Bell in a number of capacities over the past three
and a half decades and was elected president and a member of the board of
directors in 1982. Mr. Bailey is president of BDI, vice chairman of Polymers,
Inc., and a member of the board of directors of SouthTrust Corporation. Mr.
Bailey serves on the board of trustees of Birmingham Southern College. Mr.
Bailey is a member of the Executive Committee and is chairman of the Audit
Committee of the Board of Trustees.
M. Miller Gorrie, 63, is a trustee of the Company. Mr. Gorrie is
chairman of the board and chief executive officer of Brasfield & Gorrie, L.L.C.,
a general contracting firm located in Birmingham, Alabama that is ranked
consistently among ENR's "Top 100 Contractors." He serves on the board of
directors of Winsloew Furniture Co. and is a past director of AmSouth Bank of
Alabama, the Southern Research Institute, the Alabama Chamber of Commerce, the
Associated General Contractors, the Building Science Advisory Board of Auburn
University, the Business Council of Alabama and the United Way of Alabama. Mr.
Gorrie is chairman of the Executive Committee and is a member of the Executive
Compensation Committee of the Board of Trustees. He also is a member of the
executive compensation committee of the board of directors of the Management
Corporation.
William M. Johnson, 52, has been a trustee of the Company since July
1997, following the first stage of the Company's acquisition from Mr. Johnson,
by merger, of six office buildings in Mansell 400 Business Center, the largest
Class-A multi-tenant office park in the North Fulton (Atlanta, Georgia) area,
and additional office and retail space totaling 560,600 square feet. Mr. Johnson
is president and chief executive officer of Johnson Development Company, a real
estate development, construction and management firm which he founded in 1978.
As chief executive officer, he directed the development of 1.2 million square
feet of office, warehouse, retail and hotel space having a value in excess of
$117 million. Mr. Johnson has been an active member of the Roswell United
Methodist Church and the North Fulton Chamber of Commerce, was the founding
chairman of the board of the Coalition for Drug-Free North Fulton, is a member
of the board of directors and the executive committee of the American Tract
Society Ministry, and is a member of the board of directors of Reach Out
Ministries. Mr. Johnson serves as an advisor in strategic planning for
not-for-profit agencies in Colorado, Montana, Texas and Kentucky. Mr. Johnson is
a member of the Executive Compensation Committee of the Board of Trustees of the
Company.
James K. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. Mr. Lowder is also chairman of the board and chief
executive officer of The Colonial Company, chairman of the board of Lowder
Construction Company, Inc., chairman of the board of Lowder New Homes, Inc.,
chairman of the board of Lowder Realty Company, Inc., chairman of the board of
Colonial Commercial Realty, Inc., chairman of the board of Colonial Homes, Inc.,
chairman of the board of American Colonial Insurance Company, chairman of the
board and president of Colonial Commercial Investments, Inc. and treasurer of
Colonial Insurance Agency. He also is a member of the Alabama Association of
Realtors, the Montgomery Board of Realtors, the Home Builders Association of
Alabama, and the Greater Montgomery Home Builders Association, and is a member
of the board of directors of Alabama Power Company. Mr. Lowder is a member of
the Executive Compensation Committee of the Board of Trustees. Mr. Lowder is the
brother of Thomas H. Lowder.
Herbert A. Meisler, 71, is a trustee of the Company. Together with Mr.
Ripps, he formed The Rime Companies, a real estate development, construction and
management firm specializing in the development of multifamily properties. In
December 1994, the Company purchased ten multifamily properties from partners
associated with The Rime Companies. While with The Rime Companies, Mr. Meisler
oversaw the development and construction of approximately 15,000 multifamily
apartment units in the southeastern United States. He currently serves on the
board of directors of the Community Foundation of South Alabama and the Mobile
Airport Authority. He is a past director of the Alabama Eye and Tissue Bank and
past president of the Mobile Jewish Welfare Fund. Mr. Meisler is a member of the
Executive Compensation Committee (and its Option Plan Subcommittee) and the
Audit Committee of the Board of Trustees.
Claude B. Nielsen, 48, has been a trustee of the Company since
September 1993. Since 1990, Mr. Nielsen has been president of Coca-Cola Bottling
Company United, Inc., headquartered in Birmingham, Alabama, serving also as
chief operating officer from 1990 to 1991 and as chief executive officer since
1991. Prior to 1990, Mr. Nielsen served as president of Birmingham Coca-Cola
Bottling Company. Mr. Nielsen is on the board of directors of AmSouth
Bancorporation. He also currently serves as a board member of the Birmingham
Civil Rights Institute and the Birmingham Airport Authority. Mr. Nielsen is
chairman of the Executive Compensation Committee of the Board of Trustees and is
chairman of its Option Plan Subcommittee.
Harold W. Ripps, 60, is a trustee of the Company. Together with Mr.
Meisler, they formed The Rime Companies, a real estate development, construction
and management firm specializing in the development of multifamily properties.
In December 1994, the Company purchased ten multifamily properties from partners
associated with The Rime Companies. While with The Rime Companies, Mr. Ripps
oversaw the development and construction of approximately 15,000 multifamily
apartment units in the southeastern United States. He is a member of the
executive committee of the Birmingham Council of Boy Scouts of America, the
President's Advisory Committee of Birmingham Southern College and the
President's Council of the University of Alabama in Birmingham. Mr. Ripps is a
member of the Executive Committee of the Board of Trustees and is a member of
the board of directors and the executive compensation committee of the
Management Corporation.
Donald T. Senterfitt, 79, has been a trustee of the Company since
September 1993. Mr. Senterfitt is a former director and vice chairman of
SunTrust Banks, Inc., a bank holding company. He is past president of the
American Bankers Association and former general counsel of the Florida Bankers
Association, and served both organizations in a variety of other capacities. Mr.
Senterfitt is president and chief executive officer of The Pilot Group, L.C., a
financial institutions consulting firm headquartered in Orlando, Florida. He is
a member of the board of directors and currently serves as president of CITE,
Inc., the Center for Independence, Technology and Education, a non-profit
organization which serves the needs of blind, visually handicapped and
multi-handicapped children and adults.
Executive Officers of the Company
Thomas H. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. He is the chairman of the board, president and chief
executive officer of the Company. Mr. Lowder became President of Colonial
Properties, Inc., the Company's predecessor, in 1976, and since that time has
been actively engaged in the acquisition, development, management, leasing and
sale of multifamily, retail and office properties for the Company. Mr. Lowder is
a member and past president of the Alabama Chapter of the Commercial Investment
Real Estate Institute. Mr. Lowder is a former state Chairman of the Young
Presidents' Organization and is a member of the Birmingham Area Board of
Realtors, the National Association of Industrial Office Parks, the International
Council of Shopping Centers and the National Association of Real Estate
Investment Trusts (NAREIT). He serves on the Board of Directors of, among other
companies, the Children's Hospital of Alabama, American Red Cross - Birmingham
Area Chapter and the United Way of Central Alabama. Mr. Lowder is a member of
the Executive Committee of the Board of Trustees and a member of the board of
directors of the Management Corporation.
Howard B. Nelson, Jr., 51, has been Chief Financial Officer of the
Company, with general responsibility for financing matters since May 1997. Mr.
Nelson was Senior Vice President and Chief Operating Officer of the Company,
with responsibility for the day-to-day management of the Company, from September
1993 to May 1997. He joined Colonial in 1984 as a vice president and became
Senior Vice President-Finance in 1987. Mr. Nelson has served as treasurer, vice
president, president, and board member of the Birmingham Chapter of the National
Association of Industrial and Office Parks as well as vice president and board
member of the Building Owners and Managers Association of Metropolitan
Birmingham. He also serves on the Board of Directors of the Children's Harbor
Family Center and the College of Business Advisory Council of Auburn University.
He holds a Bachelor of Science Degree from Auburn University.
C. Reynolds Thompson, III, 36, has been Chief Investment Officer of
the Company, with the responsibility for the Company's investment strategy,
since May 1998. Mr. Thompson was Executive Vice President--Office Division, with
responsibility for management of all office properties owned and/or managed by
the Company, from May 1997 to May 1998. Mr. Thompson joined the Company in
February 1997 as Senior Vice President--Office Acquisitions, with responsibility
for all acquisitions of office properties. Prior to joining Colonial, Mr.
Thompson worked for CarrAmerica Realty Corporation in office building
acquisitions and due diligence. Mr. Thompson's twelve year real estate
background includes acquisitions, development, leasing, and management of office
properties in the south. He is an active member of the National Association of
Industrial and Office Parks, serves on the Board of Trustees for the Alabama
Real Estate Research and Education Center, and holds a Bachelor of Science
Degree from Washington and Lee University.
Paul F. Earle, 41, has been Executive Vice-President-Multifamily
Division of the Company, with responsibility for management of all multifamily
properties owned and/or managed by the Company, since May 1997. He joined
Colonial in 1991 and has served as Vice President-Acquisitions, as well as
Senior Vice President--Multifamily Division. Mr. Earle serves as Chairman of the
Alabama Multifamily Council and is an active member of the National Apartment
Association. He also serves on the Board of Directors of Big Brother/Big Sisters
and is a Board member of the National Multifamily Housing Council. Before
joining Colonial, Mr. Earle was the President and Chief Operating Officer of
American Residential Management, Inc., Executive Vice President of Great
Atlantic Management, Inc., and Senior Vice President of Balcor Property
Management, Inc.
John N. Hughey, 39, has been Executive Vice President-Retail Division
of the Company, with responsibility for all retail properties owned and/or
managed by the Company, since May 1997. He joined Colonial in 1982 and assumed
responsibility for an increasing number of shopping centers until being named to
Senior Vice President-Retail Division of Colonial in 1991. Mr. Hughey served as
the Alabama/Mississippi State Operations Chairman for the International Council
of Shopping Centers from 1993-1995. He holds a Bachelor of Science Degree from
Auburn University.
Charles A. McGehee, 53, has been Executive Vice President-Land
Acquisitions, Brokerage and Dispositions of the Company, with responsibility for
the Company's acquisitions and dispositions and the sales brokerage departments,
since May 1997. Mr. McGehee was Senior Vice President--Multifamily
Acquisitions/Development from September 1993 to May 1997 and Senior Vice
President--Office Division from January 1990 to September 1993. He joined
Colonial in 1976 as vice president of retail leasing and was responsible for
leasing all retail space owned and/or managed by Colonial. Mr. McGehee has
served as president and a board member of the National Association of Industrial
and Office Parks as well as a member of the Board of Directors of the Birmingham
Area Board of Realtors. He holds a Bachelor of Science Degree from Auburn
University.
Robert A. "Bo" Jackson, 44, has been Executive Vice President-Office
Division of the Company, with general responsibility for management of all
office properties owned and/or managed by the Company since May 1998. Prior to
joining the Company, Mr. Jackson worked for Beacon Properties as a vice
president responsible for leasing performance, new office development and
acquisitions. He has received professional accolades from The Atlanta Board of
Realtors, The Downtown Developers Group and NAIOP. He holds a Bachelor of
Science Degree in Business Administration from the University of Delaware.
Kenneth E. Howell, 49, has been Senior Vice President-Chief
Accounting Officer of the Company, with general responsibility for the
supervision of accounting for all of the properties owned and/or managed by the
Company, since August 1998. He joined the Company in 1981 and was Vice
President, Controller from 1981 to 1998. Mr. Howell holds a Bachelor of Science
Degree in Business Administration from Auburn University.
Item 11. Executive Compensation.
The following table sets forth certain information concerning the
annual and long-term compensation for the chief executive officer and the four
other most highly compensated executive officers of the Company (the "Named
Executive Officers"):
Annual Compensation Long-Term Compensation
------------------------------------- -----------------------------------
Restricted Securities All
Share Underlying Other
Name and Principal Position Year Salary ($) Bonus($)(1) Compensation Awards($)(1) Options (#)Compensation(2)
- -----------------------------------------------------------------------------------------------------------------------------
Thomas H. Lowder 1998 $310,000 $ -- -- $ 94,640 -- $ 2,721
Chairman of the Board, 1997 295,000 225,000 -- 89,250 16,000 3,453
President and Chief Executive 1996 285,000 30,000 -- 68,950 16,000 4,500
Officer
Howard B. Nelson, Jr 1998 208,000 -- -- 53,200 -- 2,721
Chief Financial Officer and 1997 198,000 120,000 -- 51,000 10,000 3,453
Secretary 1996 171,726 23,000 -- 34,475 8,500 4,500
C. Reynolds Thompson, III 1998 149,500 22,500 -- 38,500 -- 2,906
Chief Investment Officer (3) 1997 103,242 75,000 -- 14,438 2,500 --
John N. Hughey 1998 145,000 41,405 -- 60,333 -- 2,721
Executive Vice President- 1997 120,000 75,000 -- 19,125 3,500 3,453
Retail Division 1996 104,998 50,000 -- 14,775 3,500 3,145
Robert A. Jackson 1998 130,000 64,400 -- 33,437 10,000 --
Executive Vice President -
Office Division (4)
(1) The Company's incentive compensation plan permits officers to elect to
receive all or part of their annual bonus in the form of restricted
shares instead of cash. Officers who elect to receive up to 50% of
their bonus in restricted shares receive shares having a market value
on the issue date equal to 125% of the deferred amount. Officers who
elect to receive more than 50% of their annual bonus in restricted
shares receive shares having a market value on the issue date equal to
140% of the deferred amount. Messrs. Lowder, Nelson, Thompson, Hughey
and Jackson elected to receive 100%, 100%, 55%, 51% and 20%,
respectively, of their bonuses in restricted shares. The restricted
shares issued to Messrs. Lowder, Nelson, Thompson and Hughey vest over
three years, with 50% vesting on the first anniversary of the issue
date and the remaining 50% vesting in equal installments on the second
and third anniversaries of the issue date. The restricted shares
issued to Mr. Jackson vest over two years, with 60% vesting on the
first anniversary of the issue date and the remaining 40% vesting on
the second anniversary. The restricted shares issued under the
incentive compensation plan were issued in February 1999. The number
and value of restricted shares held by the Named Executive Officers as
of December 31, 1998 were as follows: Mr. Lowder - 7,378 shares
($196,439); Mr. Nelson - 4,024 shares ($107,139); Mr. Thompson - 1,907
shares ($50,773); Mr. Hughey - 3,044 shares ($81,046); and Mr.
Jackson- 1,236 shares ($32,908). Dividends are paid on restricted
shares at the same rate paid to all other holders of Common Shares.
(2) All Other Compensation consists solely of employer contributions to
the Company's 401(k) Plan.
(3) Mr. Thompson became an executive officer of the Company in 1997.
(4) Mr. Jackson became an executive officer of the Company in 1998. When
Mr. Jackson joined the Company he received 500 restricted shares which
had a market value as of December 31, 1998 of $13,312. These
restricted shares vest ratably in five annual installments beginning
on the third anniversary of the date of issuance, unless accelerated
by achievement of certain performance targets.
Number of Value of Unexercised
Shares Securities Underlying In-the-Money
Acquired Value Unexercised Options Options
Name on Exercise(#) Realized($) at December 31, 1998 at December 31, 1998(1)
- --------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
-----------------------------------------------------
Thomas H. Lowder -- $ -- 47,836 15,999 $ 112,828 7,666
Howard B. Nelson, Jr. -- -- 18,911 9,499 38,495 4,072
C. Reynolds Thompson, III -- -- 834 1,666 -- --
John N. Hughey -- -- 9,535 3,500 21,835 1,677
Robert A. Jackson -- -- -- 10,000 -- --
(1) Based on the closing price of $26.625 per Common Share on December 31,
1998, as reported by the New York Stock Exchange.
The following table sets forth certain information relating to
options to purchase Common Shares granted to the Named Executive Officers during
1998:
Option Grants in Last Fiscal Year
Individual Grants
- ------------------------------------------------------------------------------------------------------------
Percent Potential Realizable
Number of of Total Value at Assumed
Securities Options Annual Rates of Share
Underlying Granted to Exercise Price Appreciation for
Options Employees in Price Expiration Option Term
----------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% 10%
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas H. Lowder -- -- -- -- $ -- $ --
Howard B. Nelson, Jr. -- -- -- -- -- --
C. Reynolds Thompson, III -- -- -- -- -- --
John N. Hughey -- -- -- -- -- --
Robert A. Jackson 10,000 67% $30.69 2/20/2008 $183,830 $474,490
All options granted in 1998 become exercisable in three equal annual
installments beginning on the first anniversary of the date of grant and have a
term of ten years.
Defined Benefit Plan
The Company maintains a Retirement Plan (the "Plan") for all of the
employees of the Company and its subsidiaries. An employee becomes eligible to
participate in the Plan on January 1 or July 1 following the first anniversary
of the person's employment by the Company or one of its consolidated or
unconsolidated subsidiaries or age 21 if later. Benefits are based upon the
number of years of service (maximum 25 years), and the average of the
participant's earnings during the five highest years of compensation during the
final 10 years of employment. Each participant accrues a benefit at a specified
percentage of compensation up to the Social Security wage base, and at a higher
percentage of compensation above the Social Security wage base. Employment by
Colonial, the Company's predecessor, or certain of its affiliated entities is
treated as covered service for purposes of the Plan. A participant receives
credit for a year of service for every year in which 1,000 hours are completed
in the employment of the Company or its subsidiaries.
The following table reflects estimated annual benefits payable upon
retirement under the Plan as a single life annuity commencing at age 65. These
benefits ignore the lower benefit rate applicable to earnings below the Social
Security covered compensation level.
Pension Plan Table
Years of Service
-----------------------------------------------------------------------------------
Remuneration 5 10 15 20 25
- ----------------------
$ 100,000 $ 7,600 $15,200 $22,800 $30,400 $38,000
125,000 $ 9,500 $19,000 $28,500 $38,000 $47,500
150,000 $11,400 $22,800 $34,200 $45,600 $57,000
$ 160,000 or over $12,160 $24,320 $36,480 $48,640 $60,800
The benefits shown are limited by the current statutory limitations
which restrict the amount of benefits which can be paid from a qualified
retirement plan. The statutory limit on compensation which may be recognized in
calculating benefits is $160,000 in 1999. This limit is scheduled to increase
periodically with the cost of living.
Covered compensation under the Plan includes the employees' base
salary and other earnings received from the Company. Thomas H. Lowder has 24
years of covered service under the Plan, Howard B. Nelson, Jr. has 14 years of
service, C. Reynolds Thompson, III has two years of service, John N. Hughey has
16 years of service, and Robert A. Jackson has one year of service.
Employment Agreement
Thomas H. Lowder, the chief executive officer of the Company, entered
into an employment agreement with the Company in September 1993. This agreement
provides for an initial term of three years, with automatic renewals for
successive one year terms if neither party delivers notice of non-renewal at
least six months prior to the next scheduled expiration date. The agreement
provides for annual compensation of at least $275,000 and incentive compensation
on substantially the same terms as set forth in the description of the Annual
Incentive Plan. See "Report on Executive Compensation -- Annual Incentive Plan."
The agreement includes provisions restricting Mr. Lowder from competing with the
Company during employment and, except in certain circumstances, for two years
after termination of employment. The employment agreement provides for certain
severance payments in the event of disability or termination by the Company
without cause or by the employee with cause.
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
None of the five members of the Executive Compensation Committee is an
employee of the Company. As described below, M. Miller Gorrie, William M.
Johnson and James K. Lowder, who are members of the Committee, own interests in
certain entities that, during 1997, were parties to certain transactions
involving the Company
On July 1, 1998, the Company acquired the Shoppes at Mansell, a retail
shopping center containing 20,900 square feet of gross leasable area, from Mr.
Johnson and a partnership controlled by Mr. Johnson, for approximately $3.7
million. The Company paid the purchase price with 76,809 units of limited
partnership interest in the Operating Partnership ("Units").
Also on July 1, 1998, the Company acquired Mansell Overlook 200, a
Class-A office building with 162,693 square feet of net rentable area and a
500-car parking facility, from a partnership controlled by Mr. Johnson for
approximately $27.7 million. The Company paid the purchase price with 396,365
Units. By these two acquisitions, the Company completed the transactions by
which it acquired Mr. Johnson's real estate portfolio, as contemplated by the
1997 merger between the Company and Mr. Johnson.
On July 1, 1998, the Company acquired a 79.8% interest in Colonial
Village at Haverhill, a multifamily property located in San Antonio, Texas, for
a purchase price of $17.2 million. The remaining 20.2% interest was purchased by
certain entities controlled by Mr. Gorrie for a purchase price of $4.3 million.
On August 31, 1998, the Company acquired land known as 1800
International Park, from Polar BEK/Colonial Partnership II, a general
partnership of which one of the two general partners is Equity Partners Joint
Venture, a general partnership in which Messrs. J. Lowder, T. Lowder and their
brother, Robert E. Lowder, are the sole general partners ("EPJV"), for $1.8
million. The Company paid the purchase price by issuing a promissory note
payable to Polar BEK/Colonial Partnership II for the full amount of the purchase
price.
On October 7, 1998, the Company acquired land known as Colonial Grand
at Promenade from Colonial Commercial Investments, Inc. ("CCI"), a corporation
owned by Messrs. J. Lowder and T. Lowder for approximately $1.5 million. The
Company paid the purchase price with 34,700 Units.
On November 18, 1998, the Company acquired land known as Colonial
Center at Research Park from CCI for approximately $1.0 million. The Company
paid the purchase price with 36,647 Units.
Brasfield & Gorrie General Contractors, Inc. ("B&G"), a corporation of
which Mr. Gorrie is a shareholder and chairman of the board, was engaged during
1995 to construct the expansion of the Company's Macon Mall. The Company paid
B&G a total of $0.4 million ($384,000 of which was then paid to unaffiliated
subcontractors) during 1998 pursuant to this engagement. The Company had
outstanding construction invoices and retainage payable to this company totaling
$1.2 million at December 31, 1998.
CCI has guaranteed indebtedness of a partnership accounted for by the
Company under the equity method in the aggregate amount of $1.3 million as of
December 31, 1998. The Company has indemnified CCI against any liability it may
incur under this guarantee.
The Management Corporation provided management and leasing services
during 1998 to certain entities in which Messrs. J. Lowder, T. Lowder and R.
Lowder have an interest. The aggregate amount of fees paid to the Management
Corporation by such entities during 1998 was approximately $289,000. The Company
owns a 99% economic interest in the Management Corporation but, due to
limitations imposed by the IRS's REIT rules, owns only 1% of the voting stock.
The remainder of the voting stock is held by members of the Lowder family.
Colonial Insurance Company, a corporation indirectly owned by the
Lowder family, provided insurance brokerage services for the Company during
1998. The aggregate amount paid by the Company to Colonial Insurance Company for
these services for the year ended December 31, 1998, was approximately $131,000.
The Company leased space to certain entities in which the Lowder
family has an interest and received rent from these entities totaling
approximately $1.0 million during 1998.
The Company engaged Lowder Construction Company, Inc., of which Mr. J.
Lowder serves as chairman of the board and which is indirectly owned by Mr. J.
Lowder and T. Lowder, to serve as construction manager for ten multifamily
development and expansion projects during 1998. The Company paid a total of
$40.0 million ($37.3 million of which was then paid to unaffiliated
subcontractors) for the construction of these development and expansion projects
during 1998. The Company had outstanding construction invoices and retainage
payable to Lowder Construction Company, Inc. totaling $4.3 million at December
31, 1998.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial
ownership of Common Shares as of March 10, 1999 for (1) each person known by the
Company to be the beneficial owner of more than five percent of the Company's
outstanding Common Shares, (2) each trustee of the Company and each Named
Executive Officer and (3) the trustees and executive officers of the Company as
a group. Each person named in the table has sole voting and investment power
with respect to all shares shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table. References in the table to
"Units" are to units of limited partnership interest in the Operating
Partnership. Units owned by a person named in the table are included in the
"Number of Common Shares" column because such Units are redeemable, at the
option of the holder, for cash equal to the value of an equal number of Common
Shares or, at the election of the Company, for an equal number of Common Shares.
Because of limitations on ownership of Common Shares imposed by the Company's
Declaration of Trust, none of the Lowder brothers nor Mr. Ripps could in fact
redeem all of his Units for Common Shares without divesting a substantial number
of Common Shares in connection with the redemption. The extent to which a person
holds Units as opposed to Common Shares is set forth in the footnotes.
Percent of
Number of Percent of Common
Name and Business Address Common Common Shares
of Beneficial Owner Shares Shares (1) and Units(2)
- -------------------- ------- ---------- ------------
Thomas H. Lowder 3,285,819 (3) 11.20% 8.90%
Colonial Plaza, Suite 750
2101 Sixth Avenue North
Birmingham, Alabama 35203
James K. Lowder 3,250,950 (4) 11.10% 8.80%
2000 Interstate Parkway
Suite 400
Montgomery, Alabama 36104
Robert E. Lowder 1,848,161 (5) 6.60% 5.00%
One Commerce Street
Montgomery, Alabama 36104
Ohio PERS 1,435,000 (6) 5.50% 3.90%
277 East Town Street
Columbus, OH 43215
Carl F. Bailey 36,442 (7) * *
M. Miller Gorrie 289,346 (8) 1.10% *
William M. Johnson 1,049,853 (9) 3.80% 2.80%
Herbert A. Meisler 541,934 (10) 1.90% 1.50%
Claude B. Nielsen 21,000 (11) * *
Harold W. Ripps 1,925,896 (12) 6.80% 5.20%
1094 Greystone Crest
Birmingham, AL 35242
Donald T. Senterfitt 21,000 (11) * *
Howard B. Nelson, Jr 41,550 * *
C. Reynolds Thompson III 3,791 (14) * *
John N. Hughey 18,494 (14) * *
Robert A. Jackson 4,570 (14) * *
All executive officers and
trustees as a group
(16 persons) 8,705,867 (15) 25.40%(16) 23.40%(17)
* Less than 1%
(1) For purposes of this calculation, the number of Common Shares deemed
outstanding includes 26,314,504 Common Shares currently outstanding
and the number of Common Shares issuable to the named person(s) upon
redemption of Units or upon the exercise of options exercisable within
60 days.
(2) For purposes of this calculation, the number of Common Shares and
Units deemed outstanding includes 26,314,504 Common Shares currently
outstanding, 10,610,321 Units currently outstanding (excluding Units
held by the Company), and the number of Common Shares issuable to the
named person(s) upon the exercise of options exercisable within 60
days.
(3) The total includes 68,689 shares owned by Thomas Lowder, 175,296
shares owned by Colonial Commercial Investments, Inc. ("CCI"), a
corporation owned equally by Thomas and James Lowder, 61,574 shares
owned by Equity Partners Joint Venture ("EPJV"), a general partnership
of which Thomas, James and Robert Lowder are the sole general
partners, 9,457 shares owned pursuant to the Company's 401(k) plan,
4,000 shares held in trust for the benefit of Thomas Lowder's children
and 58,502 shares subject to options exercisable within 60 days. In
addition, the total includes 538,211 Units owned by Thomas Lowder,
1,356,919 Units owned by CCI, 1,012,976 Units owned by EPJV and 195
Units held in trust for the benefit of Thomas Lowder's children.
Shares and Units owned by CCI are reported twice in this table, once
as beneficially owned by Thomas Lowder and again as beneficially owned
by James Lowder. Shares and Units owned by EPJV are reported three
times in this table, as beneficially owned by each of the Lowder
brothers.
(4) The total includes 54,020 shares owned by James Lowder, 175,296 shares
owned by CCI, 61,574 shares owned by EPJV, 19,200 shares owned by
James K. Lowder as custodian for his children, 11,252 shares owned
pursuant to the Company's 401(k) plan and 20,000 shares subject to
options exercisable within 60 days and 1,307 shares owned pursuant to
the Company's Non-Employee Trustee Share Plan. In addition, the total
includes 538,211 Units owned by James Lowder, 1,356,919 Units owned by
CCI, 1,012,976 Units owned by EPJV and 195 Units held in trust for the
benefit of James Lowder's children.
(5) The total includes 61,574 shares owned by EPJV and 5,000 shares
subject to options exercisable within 60 days. In addition, the total
includes 737,201 Units owned by Robert Lowder, 1,012,976 Units owned
by EPJV and 195 Units held in trust for the benefit of Robert Lowder's
children.
(6) Based on a Schedule 13G filed with the SEC, reflecting beneficial
ownership as of December 31, 1998.
(7) Includes 1,000 shares owned by Mr. Bailey's spouse and 20,000 shares
subject to options exercisable within 60 days.
(8) Includes 60,422 shares owned by Brasfield & Gorrie, Inc., a
corporation controlled by Mr. Gorrie, 52,961 shares owned by Brasfield
& Gorrie General Contractor, Inc., a corporation controlled by Mr.
Gorrie, 26,000 shares held in an account for Mr. Gorrie's aunt and
over which Mr. Gorrie shares voting and investment power, 2,300 shares
held in trust for Mr. Gorrie's brother, 10,000 shares subject to
options exercisable within 60 days and 115,167 units owned by B&G
Properties.
(9) Includes 564,262 Units owned by Mr. Johnson, 396,365 Units owned by
William M. Johnson Investments II, LLLP, en entity controlled by Mr.
Johnson, 74,505 Units owned by William M. Johnson Investments I, LLLP,
an entity controlled by Mr. Johnson, 12,706 Units owned by Mr.
Johnson's spouse and 348 Units owned by VRS Corp. I, an entity
controlled by Mr. Johnson. Also includes 1,667 shares subject to
options exercisable within 60 days.
(10) Includes 10,000 shares subject to options exercisable within 60 days
and 526,934 Units owned by Meisler Enterprises L.P., a limited
partnership of which Mr. Meisler and his wife are the sole partners.
(11) Includes 20,000 shares subject to options exercisable within 60 days.
(12) Includes 6,667 shares subject to options exercisable within 60 days
and 1,908,380 Units.
(13) Includes 369 Units. Mr. Nelson also owns 400 shares of the Company's
Series A Cumulative Redeemable Preferred Shares, representing less
than 1.0% of the series outstanding.
(14) Includes, for Messrs. Nelson, Thompson, Hughey and Jackson,
respectively, 4,634, 99, 442, and 0 shares held pursuant to the
Company's 401(k) plan and 25,077, 1,667, 11,868 and 3,334 shares
subject to options exercisable within 60 days.
(15) Includes 684,927 Common Shares, 7,783,139 Units and 237,801 Common
Shares subject to options exercisable within 60 days. Shares and Units
held by CCI and EPJV have been counted only once for this purpose.
(16) For purposes of this calculation, the number of Common Shares deemed
outstanding includes 26,314,504 Common Shares outstanding as of March
10, 1999, 7,783,139 Units reported as beneficially owned by Thomas H.
Lowder, James K. Lowder, Mr. Ripps, Mr. Meisler, Mr. Johnson, Mr.
Gorrie and Mr. Nelson, and 237,801 Common Shares subject to options
exercisable within 60 days.
(17) For purposes of this calculation, the number of Common Shares and
Units deemed outstanding is described in note 2 to this table and
includes 237,801 Common Shares subject to options exercisable within
60 days.
Item 13. Certain Relationships and Related Transactions.
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the captions
"Executive Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions."
Part IV
Item 14. Exhibits, Financial Schedules, and Reports on Form 8-K.
14(a)(1) and (2) Financial Statements and Schedules
Index to Financial Statements and Financial Statement Schedules
Financial Statements:
The following financial statements of CRLP are included in Part II,
Item 8 of this report:
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1998 and 1997
Consolidated Statements of Income for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Partner's Capital for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
Financial Statement Schedules:
Schedule III Real Estate and Accumulated Depreciation
Report of Independent Accountants
All other schedules have been omitted because the required
information of such other schedules is not present in amounts sufficient to
require submission of the schedule or because the required information is
included in the consolidated financial statements.
14(a)(3) Exhibits
* 3.1 Declaration of Trust of Company.
* 3.2 Bylaws of the Company.
** 10.1 Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership,as amended.
+ 10.2.1 Registration Rights and Lock-Up Agreement
dated September 29, 1993, among the Company and the
persons named therein.
(PSI) 10.2.2 Registration Rights and Lock-Up Agreement dated
March 25, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.3 Registration Rights and Lock-Up Agreement dated
November 4, 1994, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.4 Registration Rights and Lock-Up Agreement dated
August 20, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.5 Registration Rights and Lock-Up Agreement dated
November 1, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.6 Registration Rights and Lock-Up Agreement dated
July 1, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.7 Registration Rights and Lock-Up Agreement dated
July 1, 1996, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.8 Registration Rights and Lock-Up Agreement dated
February 23, 1999, among the Company Belcrest
Realty Corporation, and Belair Real Estate
Corporation. (EDGAR Version Only)
10.2.9 Registration Rights and Lock-Up Agreement dated
July 1, 1998, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.10 Registration Rights and Lock-Up Agreement dated
July 31, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.11 Registration Rights and Lock-Up Agreement dated
November 18, 1998, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.12 Registration Rights and Lock-Up Agreement dated
December 24, 1994, among the Company and the persons
named therein. (EDGAR Version Only)
+ 10.6++ Employment Agreement between the Company and
Thomas H. Lowder.
+ 10.7++ Officers and Trustees Indemnification Agreement.
+ 10.8 Partnership Agreement of the Management Partnership.
** 10.9 Articles of Incorporation of the Management
Corporation, as amended.
+ 10.10 Bylaws of the Management Corporation.
++ 10.11 Credit Agreement between the Colonial Realty Limited
Partnership and SouthTrust Bank,National
Association, AmSouth Bank, N.A., Wells Fargo Bank,
National Association, Wachovia Bank, N.A., First
National Bank of Commerce, N.A., and PNC Bank, Ohio,
National Association dated July 10, 1997 and related
promissory notes.
10.11.1 Amendment to Credit Agreement dated July 10, 1998.
10.11.2 Second Amendment to Credit Agreement dated
August 21,1998.
+ 10.12 ++ Annual Incentive Plan.
++++10.13 Indenture dated as of July 22, 1996, by and between
Colonial Realty Limited Partnership and Bankers
Trust Company, as amended.
10.13.1 First Supplemental Indenture dated as of
December 31, 1998 by and between Colonial Realty
Limited Partnership and Bankers Trust Company,
as amended.
21.1 List of Subsidiaries
23.1 Consent of PricewaterhouseCoopers L.L.P.
27 Financial Data Schedules (EDGAR Version Only)
- --------------------
* Incorporated by reference to the Annexes to Colonial's Proxy
Statement dated September 1, 1995.
** Incorporated by reference to the same titled and number exhibit in
Colonial's Annual Report on Form 10-K dated December 31, 1994.
+ Incorporated by reference to the same titled and numbered
exhibit in Colonial's Registration Statement on Form S-11,
No. 33-65954.
++ Management contract or compensatory plan required to be filed
pursuant to Item 14(c) of Form 10-K.
++ Incorporated by reference to the same titled and number exhibit in
CRLP's Quarterly Report on Form 10-Q dated June 30, 1997.
++++ Incorporated by reference to (i) Exhibit D to the Form 8-K dated July
19, 1996, filed by Colonial Realty Limited Partnership, and (ii)
Exhibit B to the Form 8-K dated December 6, 1996, filed by Colonial
Realty Limited Partnership.
(PSI) Incorporated by reference to the same titled and number exhibit in the
Company's Annual Report on Form 10-K dated December 31, 1997.
(PI) Incorporated by reference to Exhibit 99.1 to Colonial's Registration
Statement on Form S-8, No. 333-60333.
+/- Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27203.
+/-+/- Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27205.
(OMEGA) Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27201.
14(b) Reports on Form 8-K
Reports on Form 8-K filed during the last quarter of 1998: Form 8-K
dated October 26, 1998 reported the authorization of the Form of Rights
Agreement between the Company and BankBoston N.A. under Item 5, "Other
Events".
14(c) Exhibits
The list of Exhibits filed with this report is set forth in
response to Item 14(a)(3).
14(d) Financial Statements
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on March
30, 1999.
COLONIAL REALTY LIMITED PARTNERSHIP
a Delaware limited partnership
By: /s/ Howard B. Nelson Jr.
------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons on behalf
of the registrant and the capacities indicated on March 30, 1999.
Signature
/s/ Thomas H. Lowder Chairman of the Board, President,
- -------------------------- and Chief Executive Officer
Thomas H. Lowder
/s/ Howard B. Nelson, Jr. Chief Financial Officer
- --------------------------
Howard B. Nelson, Jr.
/s/ Kenneth E. Howell Senior Vice President-Chief
- -------------------------- Accounting Officer
Kenneth E. Howell
/s/ Carl F. Bailey Trustee
- --------------------------
Carl F. Bailey
/s/ M. Miller Gorrie Trustee
- --------------------------
M. Miller Gorrie
/s/ William M. Johnson Trustee
- --------------------------
William M. Johnson
/s/ James K. Lowder Trustee
- --------------------------
James K. Lowder
/s/ Herbert A. Meisler Trustee
- --------------------------
Herbert A. Meisler
/s/ Claude B. Nielsen Trustee
- --------------------------
Claude B. Nielsen
/s/ Harold W. Ripps Trustee
- --------------------------
Harold W. Ripps
/s/ Donald T. Senterfitt Trustee
- --------------------------
Donald T. Senterfitt
SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1998
Initial Cost to Cost Gross Amount at Which
Company Capitalized Carried at Close of Period
Buildings and Subsequent to Buildings and
Description Encumbrances Land Improvements Acquisition Land Improvements
- ------------------------------ ------------- -------------- -------------- -------------- -------------- ---------------
S-1
Multifamily:
CG at Barrington $ -0- $ 880,000 $ 8,605,143 $ 168,569 $ 880,000 $ 8,773,712 $ 9,653,712
CG at Bayshore -0- 2,044,100 -0- 18,885,484 1,265,561 19,664,023 20,929,584
CG at Carrollwood 6,230,000 1,464,000 10,657,840 887,864 1,464,000 11,545,704 13,009,704
CG at Edgewater -0- 1,540,000 12,671,606 560,342 1,540,000 13,231,948 14,771,948
CG at Gainesville -0- 3,360,000 24,173,649 3,304,425 3,361,850 27,476,224 30,838,074
CG at Galleria 22,400,000 4,600,000 39,078,925 2,318,735 4,600,000 41,397,660 45,997,660
CG at Galleria II -0- 758,439 7,902,382 26,890 758,439 7,929,272 8,687,711
CG at Galleria Woods 7,101,608 1,220,000 12,480,949 347,858 1,220,000 12,828,807 14,048,807
CG at Heathrow -0- 2,560,661 17,612,990 379,575 2,560,661 17,992,565 20,553,226
CG at Hunter's Creek -0- 3,949,850 -0- 29,885,576 4,725,936 29,109,490 33,835,426
CG at Inverness Lakes -0- 641,334 8,873,906 2,683,421 641,334 7,684,466 8,325,800
CG at Kirkman -0- 2,220,000 21,747,240 885,192 2,220,000 22,632,432 24,852,432
CG at Mountain Brook 11,929,545 1,960,000 21,181,118 1,125,328 1,960,000 22,306,446 24,266,446
CG at Natchez Trace 10,896,842 1,312,000 16,568,050 176,568 1,312,000 16,744,618 18,056,618
CG at Palm Aire -0- 1,488,000 13,515,075 292,594 1,489,500 13,806,169 15,295,669
CG at Palma Sola -0- 1,479,352 -0- 12,571,483 1,479,352 12,571,483 14,050,835
CG at Ponte Vedra -0- 1,440,000 10,038,593 948,276 1,440,000 10,986,869 12,426,869
CG at Research Park 12,775,000 3,680,000 29,322,067 1,054,756 3,680,000 30,376,823 34,056,823
CG at Riverchase -0- 2,340,000 25,248,548 1,105,212 2,340,000 26,353,760 28,693,760
CG at Spring Creek -0- 1,184,000 13,243,975 319,662 1,184,000 13,563,637 14,747,637
CG at Wesleyan -0- 720,000 12,760,587 40,537 720,000 12,801,124 13,521,124
Colony Park -0- 409,401 4,345,599 404,085 409,406 4,749,680 5,159,085
CV at Ashford Place -0- 537,600 5,839,838 142,174 537,600 5,982,012 6,519,612
CV at Ashley Plantation -0- 1,160,000 12,540,387 115,604 1,160,000 12,655,991 13,815,991
CV at Cahaba Heights 3,607,835 625,000 6,548,683 177,084 625,000 6,725,767 7,350,767
CV at Caledon Wood -0- 2,100,000 19,482,210 251,926 2,100,000 19,734,136 21,834,136
CV at Cordova -0- 134,000 3,986,304 393,665 134,000 4,379,969 4,513,969
CV at Haverhill -0- 1,771,000 19,749,176 18,546 1,771,000 19,767,722 21,538,722
CV at Hillcrest -0- 332,800 4,310,671 227,385 332,800 4,538,056 4,870,856
CV at Hillwood 4,845,000 511,700 5,508,300 381,894 511,700 5,890,194 6,401,894
CV at Huntleigh Woods -0- 745,600 4,908,990 750,730 745,600 5,659,720 6,405,320
CV at Inverness 9,900,000 1,713,668 10,352,151 132,842 1,713,668 10,484,993 12,198,661
CV at Inverness II/III -0- 635,819 5,927,265 8,381,975 635,819 14,309,240 14,945,059
CV at Inverness Lakes 5,583,333 735,080 7,254,920 1,807,530 735,080 9,062,450 9,797,530
CV at Lake Mary -0- 2,145,480 -0- 19,409,367 3,634,094 17,920,753 21,554,847
CV at McGehee Place -0- 795,627 -0- 17,163,015 842,321 17,116,321 17,958,642
CV at Monte D'Oro -0- 1,000,000 6,994,227 1,326,469 1,000,000 8,320,696 9,320,696
CV at North Ingle -0- 497,574 4,122,426 406,424 497,574 4,528,850 5,026,424
CV at Oakleigh -0- 880,000 9,685,518 200,802 1,024,334 9,741,986 10,766,320
CV at River Hills -0- 15,319,754 7,474,784 11,171,763 2,551,154 31,415,147 33,966,301
CV at Rocky Ridge 7,245,000 644,943 8,325,057 499,329 644,943 8,824,386 9,469,329
CV at Stockbridge -0- 960,000 11,975,947 382,176 960,000 12,358,123 13,318,123
CV at Timothy Woods -0- 1,020,000 11,910,546 82,777 1,020,000 11,993,323 13,013,323
CV at Trussville -0- 1,504,000 18,800,253 871,867 1,504,000 19,672,120 21,176,120
CV at Vernon Marsh 3,400,000 960,984 3,511,596 3,149,558 960,984 6,661,154 7,622,138
CV at Walton Way -0- 1,024,000 7,877,766 104,791 1,024,000 7,982,557 9,006,557
CV at White Bluff 4,500,000 699,128 4,920,872 330,315 699,128 5,251,187 5,950,315
Patio I, II & III -0- 249,876 3,305,124 1,945,935 366,717 5,134,218 5,500,935
Ski Lodge - Tuscaloosa -0- 1,064,000 6,636,685 880,414 1,064,000 7,517,099 8,581,099
S-2
Retail:
Abingdon Town Centre -0- 2,051,250 6,687,616 66,883 2,051,250 6,754,499 8,805,749
Colonial Mall Auburn-Opelika -0- 103,480 -0- 15,553,538 723,715 14,933,303 15,657,018
Colonial Shoppes Bardmoor -0- 1,989,019 9,047,663 105,743 2,143,152 8,999,273 11,142,425
Colonial Promenade Bear Lake -0- 2,134,440 6,551,683 94,660 2,134,440 6,646,343 8,780,783
Beechwood Shopping Center -0- 2,565,550 19,647,875 786,371 2,565,550 20,434,246 22,999,796
Bel Air Mall -0- 7,517,000 81,585,057 -0- 7,517,000 81,585,057 89,102,057
Colonial Shoppes Bellwood -0- 330,000 -0- 3,209,650 330,000 3,209,650 3,539,650
Briarcliffe Mall -0- 9,099,972 33,663,654 12,953 9,099,972 33,676,607 42,776,579
Britt David Shopping Center -0- 1,755,000 4,951,852 1,194 1,755,000 4,953,046 6,708,046
Brookwood Village -0- 8,136,700 24,435,002 1,673,055 8,136,700 26,108,057 34,244,757
Colonial Promenade Burnt Store -0- 3,750,000 8,198,677 83,847 3,750,000 8,282,524 12,032,524
Colonial Promenade Tuskawilla -0- 3,659,040 6,783,697 113,066 3,659,040 6,896,763 10,555,803
Colonial Mall Decatur -0- 3,262,800 23,636,229 1,566,670 3,262,800 25,202,899 28,465,699
Colonial Mall Gadsden -0- 639,577 -0- 19,561,774 639,577 19,561,774 20,201,351
Glynn Place Mall -0- 3,588,178 22,514,121 1,054,761 3,588,178 23,568,882 27,157,060
Holly Hill Mall -0- 4,120,000 25,632,587 393,711 4,120,000 26,026,298 30,146,298
Colonial Promenade Hunter's Creek 10,089,395 4,181,760 13,023,401 151,399 4,181,760 13,174,800 17,356,560
Lakeshore Mall -0- 4,646,300 30,973,239 2,076,687 4,646,300 33,049,926 37,696,226
Lakewood Plaza -0- 2,984,522 11,482,512 1,900,323 2,984,522 13,382,835 16,367,357
Macon Mall -0- 1,684,875 -0- 91,501,975 5,591,743 87,595,107 93,186,850
Mayberry Mall 3,350,078 862,500 3,778,590 133,806 862,500 3,912,396 4,774,896
Colonial Shoppes McGehee -0- 197,152 -0- 3,954,077 197,152 3,954,077 4,151,229
Colonial Promenade Montgomery 10,810,000 3,788,913 11,346,754 1,200,517 4,332,432 12,003,752 16,336,184
Colonial Promenade Montgomery Nor -0- 2,400,000 5,664,858 560,392 2,400,000 6,225,250 8,625,250
Northdale Court -0- 3,059,760 8,054,090 850,077 3,059,760 8,904,167 11,963,927
Old Springville Shopping Center -0- 272,594 -0- 3,364,134 277,975 3,358,753 3,636,728
Olde Town Shopping Village -0- 343,325 -0- 2,470,994 343,325 2,470,994 2,814,319
Colonial Shoppes Paddock Park -0- 1,532,520 3,754,879 110,214 1,532,520 3,865,093 5,397,613
Quaker Village -0- 931,000 7,901,874 163,198 931,000 8,065,072 8,996,072
Rivermont Shopping Center 1,693,400 515,250 2,332,486 128,741 515,250 2,461,227 2,976,477
Colonial Shoppes Inverness -0- 1,680,000 1,387,055 93,216 1,680,000 1,480,271 3,160,271
Shoppes at Mansell -0- 600,000 3,089,565 21,041 600,000 3,110,606 3,710,606
Stanly Plaza -0- 450,000 1,657,870 58,196 450,000 1,716,066 2,166,066
Staunton Mall -0- 2,895,000 15,083,542 254,735 2,895,000 15,338,277 18,233,277
Colonial Promenade University Par 14,445,000 6,946,785 20,104,517 414,563 6,946,785 20,519,080 27,465,865
Valdosta Mall -0- 5,377,000 30,239,796 857,786 5,377,000 31,097,582 36,474,582
Village at Roswell Summit 1,628,831 450,000 2,563,642 126,073 450,000 2,689,715 3,139,715
Colonial Promenade Wekiva -0- 2,817,788 15,302,375 127,375 2,817,788 15,429,750 18,247,538
Colonial Promenade Winter Haven -0- 1,768,586 3,928,903 4,574,790 4,045,045 6,227,234 10,272,279
Yadkin Town Center -0- 1,080,000 1,224,136 3,211,391 1,080,000 4,435,527 5,515,527
S-3
Office:
250 Commerce Street -0- 25,000 200,200 2,280,668 25,000 2,480,868 2,505,868
AmSouth Center -0- 764,961 -0- 18,150,464 764,961 18,150,464 18,915,425
Colonial Plaza -0- 1,001,375 12,381,023 228,170 1,001,375 12,609,193 13,610,568
Concourse Center -0- 4,875,000 25,702,552 42,002 4,875,000 25,744,554 30,619,554
Independence Plaza -0- 1,505,000 6,018,476 180,678 1,505,000 6,199,154 7,704,154
International Park 1,967,410 1,279,355 5,668,186 150,575 1,279,355 5,818,761 7,098,116
Interstate Park 4,208,107 1,125,990 7,113,558 8,924,443 1,125,988 16,038,003 17,163,991
Lakeside Office Park -0- 423,451 8,313,291 235,247 423,451 8,548,538 8,971,989
Mansell Office Park 31,296,233 4,540,000 71,712,971 954,671 4,540,000 72,667,642 77,207,642
P&S Building -0- 104,089 558,646 214,930 104,089 773,576 877,665
Perimeter Corporate Park 5,536,731 1,422,169 18,377,648 261,614 1,422,169 18,639,262 20,061,431
Progress Center -0- 521,037 14,710,851 683,654 521,037 15,394,505 15,915,542
Riverchase Center 8,238,096 1,916,727 22,091,651 1,074,586 1,916,727 23,166,237 25,082,964
Shades Brook Building -0- 873,000 2,240,472 -0- 873,000 2,240,472 3,113,472
University Park -0- 396,960 2,971,049 1,644,998 396,960 4,616,047 5,013,007
Active Development Projects:
CG at Citrus Park -0- 1,223,652 -0- 8,258,914 1,223,652 8,258,914 9,482,566
CG at Cypress Crossing -0- 1,942,202 -0- 17,233,557 1,942,202 17,233,557 19,175,759
CG at Edgewater II -0- 999,221 -0- 11,487,365 999,221 11,487,365 12,486,586
CG at Heather Glen -0- 3,836,003 -0- 5,964,285 3,836,003 5,964,285 9,800,288
CG at Inverness Lakes II -0- 477,259 -0- 8,360,459 477,259 8,360,459 8,837,718
CG at Lakewood Ranch -0- 1,831,987 -0- 16,007,271 1,831,987 16,007,271 17,839,258
CG at Liberty Park -0- 2,115,340 -0- 808,388 2,115,340 808,388 2,923,728
CG at Promenade -0- 1,536,313 -0- 2,783,611 1,536,313 2,783,611 4,319,924
CG at Research Park II -0- 3,538 -0- 51,299 3,538 51,299 54,837
CG at Ridgeland -0- 1,025,720 -0- 428,564 1,025,720 428,564 1,454,284
CG at Wesleyan II -0- 550,991 -0- 5,393,690 550,991 5,393,690 5,944,681
CV at Ashley Plantation II -0- 1,383,770 -0- 1,565,180 1,383,770 1,565,180 2,948,950
CV at Madison -0- 1,695,369 -0- 2,995,140 1,695,369 2,995,140 4,690,509
CV at McGehee Place -0- 60,438 -0- 53,018 60,438 53,018 113,456
Colonial Promenade Trussville -0- 4,199,186 -0- 1,121,816 4,285,842 1,035,160 5,321,002
1800 International Park -0- 1,793,000 -0- 2,156,857 3,949,857 -0- 3,949,857
Colonial Center at Research Park -0- 1,000,000 -0- 373,238 1,373,238 -0- 1,373,238
Other Miscellaneous Projects -0- -0- -0- 1,470,351 -0- 1,470,351 1,470,351
Unimproved Land:
Briarcliffe Mall -0- 1,433,596 -0- -0- 1,433,596 -0- 1,433,596
Valdosta Mall -0- 975,506 -0- -0- 975,506 -0- 975,506
McGehee Place Land 668,364 436,471 -0- -0- 436,471 -0- 436,471
North Heathrow Land -0- 9,553,734 -0- 2,167,333 9,553,734 2,167,333 11,721,067
============= =========== =========== =========== =========== =========== ===========
$ 204,345,808 $246,033,816$1,186,268,309 $435,369,401 $245,185,945$1,618,612,721$1,863,798,665
============= =========== =========== =========== =========== =========== ===========
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
SCHEDULE III, CONTINUED
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
Date
Acquired/
Accumulated Date Placed In Depreciable
Description Depreciation Completed Service Lives-Year
- -------------------------------------------------------------------------------------
S-1
Multifamily:
CG at Barrington $ 790,514 1996 1996 7-40 Years
CG at Bayshore 1,196,831 1997 1985/97/98 7-40 Years
CG at Carrollwood 2,062,188 1966 1994 7-40 Years
CG at Edgewater 2,289,403 1990 1994 7-40 Years
CG at Gainesville 4,318,899 1989/93/94 1994 7-40 Years
CG at Galleria 4,278,059 1986 1994 7-40 Years
CG at Galleria II 679,141 1996 1996 7-40 Years
CG at Galleria Woods 1,206,846 1994 1996 7-40 Years
CG at Heathrow 1,586,655 1997 1994/97 7-40 Years
CG at Hunter's Creek 1,632,756 1996 1996 7-40 Years
CG at Inverness Lakes 994,984 1996 1996 7-40 Years
CG at Kirkman 3,272,298 1991 1994 7-40 Years
CG at Mountain Brook 1,549,053 1987/91 1996 7-40 Years
CG at Natchez Trace 830,133 1995/97 1997 7-40 Years
CG at Palm Aire 2,229,216 1991 1994 7-40 Years
CG at Palma Sola 4,054,758 1992 1992 7-40 Years
CG at Ponte Vedra 1,388,793 1988 1994 7-40 Years
CG at Research Park 3,760,816 1987/94 1994 7-40 Years
CG at Riverchase 3,067,215 1984/91 1994 7-40 Years
CG at Spring Creek 1,267,969 1992/94 1996 7-40 Years
CG at Wesleyan 668,831 1997 1996/97 7-40 Years
Colony Park 665,854 1975 1993 7-40 Years
CV at Ashford Place 414,703 1983 1996 7-40 Years
CV at Ashley Plantation 297,331 1997 1998 7-40 Years
CV at Cahaba Heights 559,259 1992 1996 7-40 Years
CV at Caledon Wood 844,822 1995/96 1997 7-40 Years
CV at Cordova 2,337,725 1983 1983 7-40 Years
CV at Haverhill 227,776 1998 1998 7-40 Years
CV at Hillcrest 319,714 1981 1996 7-40 Years
CV at Hillwood 797,130 1984 1993 7-40 Years
CV at Huntleigh Woods 655,991 1978 1994 7-40 Years
CV at Inverness 1,503,594 1986/87/90 1986/87/90 7-40 Years
CV at Inverness II/III 3,049,894 1997 1997 7-40 Years
CV at Inverness Lakes 1,045,135 1983/96 1993 7-40 Years
CV at Lake Mary 4,252,705 1991/95 1991/95 7-40 Years
CV at McGehee Place 4,266,205 1986/95 1986/95 7-40 Years
CV at Monte D'Oro 913,566 1977 1994 7-40 Years
CV at North Ingle 630,407 1983 1983 7-40 Years
CV at Oakleigh 532,147 1997 1997 7-40 Years
CV at River Hills 3,860,203 1985 1998 7-40 Years
CV at Rocky Ridge 1,134,717 1984 1993 7-40 Years
CV at Stockbridge 1,835,157 1993/94 1994 7-40 Years
CV at Timothy Woods 637,961 1996 1997 7-40 Years
CV at Trussville 1,200,635 1996/97 1997 7-40 Years
CV at Vernon Marsh 1,685,612 1986/87 1986/93 7-40 Years
CV at Walton Way 83,691 1970/88 1998 7-40 Years
CV at White Bluff 713,076 1986 1993 7-40 Years
Patio I, II & III 699,322 1966/83/84 1994/93/93 7-40 Years
Ski Lodge - Tuscaloosa 866,439 1976/92 1994 7-40 Years
S-2
Retail:
Abingdon Town Centre 202,618 1987/96 1997 7-40 Years
Colonial Mall Auburn-Opelika 8,286,927 1973/84/89 1973/84/89 7-40 Years
Colonial Shoppes Bardmoor 545,346 1981 1996 7-40 Years
Colonial Promenade Bear Lake 607,055 1990 1995 7-40 Years
Beechwood Shopping Center 923,225 1963/92 1997 7-40 Years
Bel Air Mall 12,114 1966/90/97 1998 7-40 Years
Colonial Shoppes Bellwood 1,039,508 1988 1988 7-40 Years
Briarcliffe Mall 2,017,547 1986 1996 7-40 Years
Britt David Shopping Center 515,845 1990 1994 7-40 Years
Brookwood Village 1,164,788 1973/91 1997 7-40 Years
Colonial Promenade Burnt Store 935,279 1990 1994 7-40 Years
Colonial Promenade Tuskawilla 610,478 1990 1995 7-40 Years
Colonial Mall Decatur 2,262,361 1979/89 1993 7-40 Years
Colonial Mall Gadsden 9,004,107 1974/91 1974 7-40 Years
Glynn Place Mall 784,516 1986 1997 7-40 Years
Holly Hill Mall 791,409 1969/86/94 1997 7-40 Years
Colonial Promenade Hunter's Creek 811,823 1993/95 1996 7-40 Years
Lakeshore Mall 1,148,848 1984-87 1997 7-40 Years
Lakewood Plaza 375,609 1995 1997 7-40 Years
Macon Mall 18,411,197 1975/88/97 1975/88 7-40 Years
Mayberry Mall 115,584 1968/86 1997 7-40 Years
Colonial Shoppes McGehee 1,265,015 1986 1986 7-40 Years
Colonial Promenade Montgomery 2,431,972 1990 1993 7-40 Years
Colonial Promenade Montgomery Nor 148,361 1997 1995 7-40 Years
Northdale Court 642,677 1988 1995 7-40 Years
Old Springville Shopping Center 2,700,536 1982 1982 7-40 Years
Olde Town Shopping Village 699,057 1978/90 1978/90 7-40 Years
Colonial Shoppes Paddock Park 312,079 1988 1995 7-40 Years
Quaker Village 265,428 1968/88/97 1997 7-40 Years
Rivermont Shopping Center 69,521 1986/97 1997 7-40 Years
Colonial Shoppes Inverness 69,468 1984 1997 7-40 Years
Shoppes at Mansell 32,183 1996/97 1998 7-40 Years
Stanly Plaza 52,617 1987/96 1997 7-40 Years
Staunton Mall 452,286 1969/86/97 1997 7-40 Years
Colonial Promenade University Par 6,331,114 1986/89 1993 7-40 Years
Valdosta Mall 1,054,291 1982-85 1997 7-40 Years
Village at Roswell Summit 66,061 1988 1997 7-40 Years
Colonial Promenade Wekiva 913,009 1990 1996 7-40 Years
Colonial Promenade Winter Haven 485,229 1986 1995 7-40 Years
Yadkin Town Center 102,084 1971/97 1997 7-40 Years
S-3
Office:
250 Commerce Street 2,326,569 1904/81 1980 7-40 Years
AmSouth Center 6,108,744 1990 1990 7-40 Years
Colonial Plaza 339,665 1982 1997 7-40 Years
Concourse Center 270,075 1981/85 1998 7-40 Years
Independence Plaza 143,234 1979 1998 7-40 Years
International Park 246,545 1987/89 1997 7-40 Years
Interstate Park 4,822,534 1982-85/89 1982-85/89 7-40 Years
Lakeside Office Park 342,092 1989/90 1997 7-40 Years
Mansell Office Park 1,844,656 1987/96/97 1997 7-40 Years
P&S Building 442,562 1946/76/91 1974 7-40 Years
Perimeter Corporate Park 422,730 1986/89 1998 7-40 Years
Progress Center 584,073 1983/91 1997 7-40 Years
Riverchase Center 1,097,429 1984-88 1997 7-40 Years
Shades Brook Building 23,338 1979 1998 7-40 Years
University Park 1,811,232 1985 1985 7-40 Years
Active Development Projects:
CG at Citrus Park -0- N/A 1997 N/A
CG at Cypress Crossing 123,830 N/A 1998 N/A
CG at Edgewater II 318,451 N/A 1997 N/A
CG at Heather Glen -0- N/A 1998 N/A
CG at Inverness Lakes II 349,674 N/A 1994 N/A
CG at Lakewood Ranch 17,320 N/A 1997 N/A
CG at Liberty Park -0- N/A 1998 N/A
CG at Promenade -0- N/A 1998 N/A
CG at Research Park II -0- N/A 1985 N/A
CG at Ridgeland -0- N/A 1998 N/A
CG at Wesleyan II 1,744 N/A 1996 N/A
CV at Ashley Plantation II -0- N/A 1998 N/A
CV at Madison -0- N/A 1998 N/A
CV at McGehee Place -0- N/A 1987 N/A
Colonial Promenade Trussville -0- N/A 1998 N/A
1800 International Park -0- N/A 1998 N/A
Colonial Center at Research Park -0- N/A 1998 N/A
Other Miscellaneous Projects -0- N/A 1993 N/A
Unimproved Land:
Briarcliffe Mall -0- N/A 1981 N/A
Valdosta Mall -0- N/A 1982/85 N/A
McGehee Place Land -0- N/A 1981 N/A
North Heathrow Land -0- N/A 1997 N/A
- ---------------------------------------------------------------------------------------
$ 169,451,798
=======================================================================================
NOTES TO SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
December 31, 1998
(1) The aggregate cost for Federal Income Tax purposes was approximately
$1,464,775,000 at December 31, 1998.
(2) See description of mortgage notes payable in Note 8 of Notes to
Consolidated Financial Statements.
(3) The following is a reconciliation of real estate to balances reported
at the beginning of the year:
Reconciliation of Real Estate
1998 1997 1996
--------------- --------------- ---------------
Real estate investments:
Balance at beginning of year $ 1,489,114,015 $ 1,017,009,315 $ 736,937,703
Acquisitions of new property 346,267,522 451,256,964 173,276,789
Improvements and development 134,804,450 97,564,705 107,834,251
Dispositions of property (106,387,322) (76,716,969) (1,039,428)
--------------- --------------- ---------------
Balance at end of year $ 1,863,798,665 $ 1,489,114,015 $ 1,017,009,315
=============== =============== ===============
Reconciliation of Accumulated Depreciation
1998 1997 1996
------------- ------------- -------------
Accumulated depreciation:
Balance at beginning of year $ 124,236,057 $ 101,541,658 $ 79,780,292
Depreciation 46,787,982 31,945,960 22,015,054
Depreciation of disposition of property (1,572,241) (9,251,561) (253,688)
------------- ------------- -------------
Balance at end of year $ 169,451,798 $ 124,236,057 $ 101,541,658
============= ============= =============
S-4
EX-10
2
EXHIBIT 10.2.8 REGISTRATION RIGHTS AGREEMENT
Exhibit 10.2.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of February 23, 1999, between COLONIAL PROPERTIES TRUST, an
Alabama real estate investment trust (the "Company"), BELCREST REALTY
CORPORATION, a Delaware corporation ("Belcrest") and BELAIR REAL ESTATE
CORPORATION, a Delaware corporation ("Belair"; Belcrest and Belair are
collectively referred to herein as the "Contributors").
This Agreement is made in connection with the private sale of
8.875% Series B Cumulative Redeemable Perpetual Preferred Units (the "Series B
Preferred Units") of partnership interest in COLONIAL REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Operating Partnership")
pursuant to (i) that certain Contribution Agreement, dated as of February 23,
1999, between Belcrest, the Company and the Operating Partnership, in which the
Company holds the sole general partnership interest, and (ii) that certain
Contribution Agreement, dated as of February 23, 1999, between Belair, the
Company and the Operating Partnership. The foregoing contribution agreements are
collectively referred to herein as the "Contribution Agreements." The Series B
Preferred Units may be exchanged for shares of 8.875% Series B Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest (the "Preferred
Shares"), par value $.01 per share, of the Company, pursuant to the terms of the
Series B Preferred Units (any such exchange, an "Exchange"). To induce each of
the Contributors to enter into the Contribution Agreements, the Company has
agreed to register for sale by the Contributors and the Holders the Registrable
Securities and to provide the Contributors with certain registration rights set
forth herein. The execution of this Agreement is a condition to the closing
under each of the Contribution Agreements.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
Person specified.
"Belair" shall have the meaning set forth in the preamble.
"Belcrest" shall have the meaning set forth in the preamble.
"Closing Date" shall mean the date of closing of the Company's
sale of Series B Preferred Units to the Contributors.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors or other parties who succeed to the
Company's obligations hereunder.
"Contribution Agreements" shall have the meaning set forth in
the preamble.
"Contributors" shall have the meaning sets forth in the
preamble and shall include their successors and permitted assigns.
"Exchange" shall have the meaning set forth in the preamble.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the relevant time.
"Holder" shall mean (i) either of the Contributors or (ii) any
Person holding Registrable Securities as a result of a transfer or assignment of
Registrable Securities to that Person other than pursuant to an effective
registration statement or Rule 144 under the Securities Act, in each case where
securities sold in such transaction may be resold in a public distribution
without subsequent registration under the Securities Act, and together the
entities described in clauses (i) and (ii) hereof shall be "Holders".
"Indemnified Party" shall have the meaning set forth in
Section 7(c) hereof.
"Indemnifying Parance, if the Company so desires; and (vii)
fees and expenses of other Persons reasonably necessary in connection with the
Registration retained by the Company, including any experts, transfer agent or
registrar.
"Registration Request" shall have the meaning set forth in
Section 2(b) hereof.
"Registration Statement" shall mean a registration statement
of the Company and any other person required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities Act,
which covers the resale of all of the Registrable Securities on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission or
any successor federal agency.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute thereto, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the relevant time.
"Series B Preferred Units" shall have the meaning therefor set
forth in the preamble hereof.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
"Underwritten Offering" shall mean a sale of securities of the
Company to an underwriter or underwriters for reoffering to the public.
2. Registration Under the Securities Act.
(a) Demand Registration. Upon receipt of a written request (a "Registration
Request"), which shall include a description of such Holders' proposed method of
distribution (which method may also include an Underwritten Offering by a
nationally recognized Underwriter selected by the Company and reasonably
acceptable to the Registering Holders) from Holders holding Registrable
Securities having an aggregate expected offering price of at least $15,000,000
(or all remaining Registrable Securities if all such remaining Registrable
Securities shall have an aggregate expected offering price of less than
$15,000,000), the Company shall (i) promptly give notice of the Registration
Request to all non-requesting Holders and (ii) prepare and file with the SEC,
within sixty (60) days after receipt of such Registration Request, a
Registration Statement for the sale of all Registrable Securities held by the
requesting Holders and any other Holder who makes a written request of the
Company to have her or his Registrable Securities included in such Registration
Statement, which written request must be received by the Company within ten (10)
days after such Holder receives the Registration Request (all of such Holders,
collectively, the "Registering Holders"). Upon receipt of such written request,
the Company shall use its best efforts to cause such Registration Statement to
be declared effective within one hundred twenty (120) days after receipt of a
Registration Request. The Company shall keep such Registration Statement
continuously effective until the date on which all Registrable Securities have
been sold pursuant to such Registration Statement or are eligible for resale
under Rule 144 without regard to holding periods or volume limitations.
(b) Expenses. The Company shall pay all Registration Expenses in
connection with any registration undertaken pursuant to Section 2(a) hereof. If
the Company at any time agrees (an "Other Agreement") to pay for or reimburse
the legal fees and expenses of any holder(s) of any equity securities of the
Company incurred in connection with one or more registrations of such securities
pursuant to such Other Agreement (including, without limitation, in connection
with compliance with federal or state securities or blue sky laws), then (i) the
Company shall pay or reimburse to the Contributors their reasonable legal fees
and expenses in connection with an equal number of registrations under this
Agreement, up to the amount agreed to be paid or reimbursed by the Company
pursuant to such Other Agreement (it being agreed that, if the Company enters
into more than one Other Agreement, the Contributors' rights under this Section
2(b)(i) shall be determined by reference to the Other Agreement that is most
favorable to the Contributors) and (ii) Registration Expenses shall include such
expenses. The Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Registration Statement.
3. Hold-Back Agreement.
Each Holder of Registrable Securities shall agree not to
effect any public sale or distribution of securities of the Company of the same
or similar class or classes of the securities included in the Registration
Statement or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during such periods as reasonably requested by the Underwriter
in an underwritten public offering by the Company; provided that no Holder shall
be so obligated under this Section 3 in the event that any such period requested
by the Underwriter is longer than ninety (90) days and or occurs more than once
in any twelve (12) month period.
4. Registration Procedures.
In connection with the obligations of the Company with respect
to a Registration Statement pursuant to Section 2(a) hereof, the Company shall
use all commercially reasonable efforts to effect or cause to be effected the
registration of the Registrable Securities under the Securities Act to permit
the sale of such Registrable Securities by the Holder in accordance with its
intended method or methods of distribution, and the Company shall:
(a) prepare and file with the SEC, as specified in Section 2 hereof, a
Registration Statement, which Registration Statement shall comply as to form in
all material respects with the requirements of the applicable form and include
all financial statements required by the SEC to be filed therewith, and use its
best efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) subject to Section 4(j) hereof, prepare and file with the SEC
such amendments and post-effective amendments to each such Registration
Statement as may be necessary to keep such Registration Statement effective for
the applicable period; cause each such Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 or any similar rule that may be adopted under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
selling Holder thereof;
(c) furnish to the Holder of Registrable Securities without
charge, as many copies of each Prospectus, including each or summary prospectus
preliminary Prospectus, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities; the Company
consents to the use of any such Prospectus, including each preliminary
Prospectus, by the Holder of Registrable Securities, if any, in connection with
the offering and sale of the Registrable Securities covered by any such
Prospectus;
(d) use its best efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Securities by the time the
applicable Registration Statement is declared effective by the SEC under all
applicable state securities or "blue sky" laws of such jurisdictions as the
Holder of Registrable Securities covered by a Registration Statement shall
reasonably request in writing, keep each such registration or qualification or
exemption effective during the period such Registration Statement is required to
be kept effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction or to register as a broker
or dealer in such jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;
(e) notify the Holder of Registrable Securities promptly and,
if requested by such Holder, confirm such advice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, and (iii) of the happening of any event during the period a
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iv) of the
Company's receipt of any notification of the suspension of the qualification of
any Registrable Securities covered by a Registration Statement for sale in any
jurisdiction; in the event the Company shall give notice as to the occurrence of
any event described Sections 4(e)(ii), 4(e)(iii) or 4(e)(iv) hereof, the Company
shall extend the period during which such Registration Statement shall be
maintained effective by the number of days during the period from and including
the date of the giving of such notice to the date the Company delivers notice
that disposition may be made;
(f) furnish to the Holder of Registrable Securities copies of any request
by the SEC or any state securities authority of amendments of supplements to a
Registration Statement and Prospectus or for additional information;
(g) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(h) provide to the Holders, at no cost to such Holders, a copy of the
Registration Statement and any amendment thereto with respect to Registrable
Securities, each Prospectus contained in such Registration Statement or
post-effective amendment and any amendment or supplement thereto and such other
documents as such Holders may reasonably request in order to facilitate the
disposition of their Registrable Securities covered by such Registration
Statement; the Company consents to the use of each such Prospectus and any
supplement thereto by such Holders in connection with the offering and sale of
their Registrable Securities covered by such Registration Statement or any
amendment thereto;
(i) upon the occurrence of any event contemplated by Section
4(e)(iii) hereof, immediately notify all Holders of the Registrable Securities
affected by such event of such event and prepare and provide to such Holders a
supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference and file
any required document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(j) make available for inspection by representatives of the Holder of the
Registrable Securities and any Underwriters participating in any disposition
pursuant to a Registration Statement and any special counsel or accountant
retained by such Holders or Underwriters, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
respective officers, trustees and employees of the Company to supply all
information reasonably requested by any such representative, Underwriter,
special counsel or accountant in connection with a Registration Statement;
provided, however, that such records, documents or information which the Company
determines, in good faith, to be confidential and notifies such representatives,
Underwriters ' special counsel or accountants are confidential shall not be
disclosed by the representatives, underwriters special counsel or accountants
unless (i) the disclosure of such records, documents or information is necessary
to avoid or correct a misstatement or omission in a Registration Statement, (ii)
the release of such records, documents or information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or (iii) such
records, documents or information have been generally made available to the
public;
(k) use all commercially reasonable efforts (including, without limitation,
seeking to cure any deficiencies (within the Company's control) cited by such
exchange or market in the Company's listing application) to list all Registrable
Securities on The New York Stock Exchange (unless the Company qualifies and
chooses to list all Registrable Securities on the American Stock Exchange or The
NASDAQ National Market, in which event the Company shall use its best efforts to
list all Registrable Securities on the American Stock Exchange or The NASDAQ
National Market);
(l) provide a CUSIP number for all Registrable Securities, not
later than the effective date of the Registration Statement;
(m) comply with the Securities Act and the Exchange Act in
connection with the offer and sale of the Registrable Securities to be sold
pursuant to a Registration Statement, and shall use all commercially reasonable
efforts to make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least twelve (12) months which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) provide and cause to be maintained a transfer agent for all
Registrable Securities covered by such Registration Statement from and after a
date not later than the effective date of such Registration Statement;
(o) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing their Registrable Securities to be sold
pursuant to a Registration Statement and not bearing any Securities Act legend;
and enable certificates for such Registrable Securities be issued for such
numbers of shares and registered in such names as such Holders may reasonably
request at least two (2) business days prior to any sale of their Registrable
Securities;
(p) enter into customary agreements (including an underwriting
agreement or securities sales agreement, if any, in customary form) containing
such representations and warranties to the Holders of such Registrable
Securities and the Underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten offerings as
may be reasonably requested by them and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities; and
(q) furnish to each Registering Holder and to each Underwriter,
if any, a signed counterpart, addressed to such Registering Holder or
Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants (to the extent permitted by the standards of the American Institute
of Certified Public Accountants), each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters, as the
case may be, as the Holders of a majority of the Registrable Securities included
in such offering or the managing Underwriter or Underwriters therefor reasonably
request.
The Company may require the Holder of Registrable Securities
to furnish to the Company in writing such information regarding the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
The Holders agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4(e)(iii)
hereof, such Holder will immediately discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holders' receipt of
the copies of the supplemented or amended Prospectus, if so directed by the
Company, such Holders will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then in
such Holders' possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Black-Out Period.
(a) Following the effectiveness of a Registration Statement (and the
filings with any state securities commissions), the Company may direct the
Holder to suspend sales of the Registrable Securities for such times as the
Company reasonably may determine is necessary and advisable, including the
following events (each, a "Suspension Event"): (i) an underwritten primary
offering by the Company where the Company is advised by the underwriters for
such offering that sale of Registrable Shares under the Registration Statement
would have a material adverse effect on the primary offering, or (ii) pending
negotiations relating to, or consummation of, a transaction or the occurrence of
an event (x) that would require additional disclosure of material information by
the Company in the Registration Statement (or such filings), (y) as to which the
Company has a bona fide business purpose for preserving confidentiality or (z)
which renders the Company unable to comply with SEC requirements, in each case
under circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis, as
applicable.
(b) In the event of a Suspension Event, the Company may give notice (a
"Suspension Notice") to the Holder to suspend sales of the Registrable Shares so
that the Company may correct or update the Registration Statement (or such
filings); provided, however, that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing. The Holder agrees that
it will not effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company. If so directed by the Company, Holder will
deliver to the Company all copies of the Prospectus covering the Registrable
Shares held by them at the time of receipt of the Suspension Notice. The Holder
may recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement (or such filings) following further notice to such effect
(an "End of Suspension Notice") from the Company, which End of Suspension Notice
shall be given by the Company promptly following the conclusion of any
Suspension Event and the effectiveness of any required amendment or supplement
to be the Registration Statement.
(c) Notwithstanding the provisions of Sections 5(a) and 5(b) to the
contrary: (i) no Holder shall be subject to the provisions of Sections 5(a) and
5(b) hereof for a period of time in excess of sixty (60) days; and (ii) no
Suspension Notice may be given more than twice in any twelve (12) month period.
Moreover, notwithstanding Section 2(a) hereof, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees it shall extend
the period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from the date
of the giving of the Suspension Notice to and including the date when the
Holders shall have received the End of Suspension Notice and copies of the
supplemented or amended Prospectus necessary to resume sales.
6. Rule 144 and Rule 144A.
For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act, the Company covenants that
it will timely file the reports required to be filed by it under the Securities
Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations
adopted by the SEC thereunder and, if at any time the Company is not required to
file such reports, it will, upon the request of any Holder of Registrable
Securities, make publicly available other information so long as necessary to
permit sales pursuant to Rule 144 under the Securities Act. The Company also
covenants that it will provide the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any Holder of
Registrable Securities and it will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time, to enable such Holder to sell its Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, (b) Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or (c) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
7. Indemnification.
(a) The Company will indemnify each Registering Holder, each such Holder's
officers and directors, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable legal expenses), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus relating to
such Holders' Registrable Securities, or any amendment or supplement thereto, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not indemnify and will not
be liable to any Registered Holder in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
conformity with and in reliance upon information furnished in writing to the
Company by such Holder or by an underwriter for inclusion therein or such
Holder's failure to deliver any Prospectus or amendment or supplement thereto.
(b) Each Registering Holder will indemnify the Company, each of its
trustees and each of its officers who signs the registration statement, each
underwriter, if any, of the Company's securities covered by such registration
statement, and each person who controls the Company or such underwriter within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable legal fees and expenses)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement or prospectus, or
any amendment or supplement thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement or prospectus, in reliance upon and in conformity with information
furnished in writing to the Company by such Holder for inclusion therein.
(c) Each party entitled to indemnification under this Section 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. However,
the failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which it may have to the Indemnified Party
pursuant to the provisions of this Section 7, except to the extent of the actual
damages suffered by such delay in notification. The Indemnifying Party shall
assume the defense of such action. including the employment of counsel, which
shall be chosen by the Indemnifying Party and shall be reasonably satisfactory
to the Indemnified Party, and payment of expenses in connection with such
defense. The Indemnified Party shall have the right to employ its own counsel in
any such case, but the legal fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the employment of such counsel shall
have been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party shall not have assumed the defense of such action within a reasonable
period of time, or (iii) the Indemnified Party shall have been reasonably
advised by its counsel that there may be defenses available to it or them which
are different from or additional to those available to Indemnifying Party (in
which case the Indemnifying Party shall not have the right to direct the defense
of such action on behalf of the Indemnified Party), in any of which events such
fees and expenses shall be borne by the Indemnifying Party. No Indemnifying
Party in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to the entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to each such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 7 is unavailable to
a party that would have been an Indemnified Party under this Section 7, then
each party that would have been an Indemnifying Party hereunder shall, in lieu
of indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such claims, losses, damages,
liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and such Indemnified
Party on the other in connection with the statement or omission which resulted
in such claims, losses, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
related to information supplied by the Indemnifying Party or the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Registering Holder agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation that fails to take account of the equitable
considerations referred to above in this Section 7(d).
(e) No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(f) In no event shall any Registering Holder be liable for any claims,
losses, damages, liabilities or expenses pursuant to this Section 7 in excess of
the proceeds to such Holder for the sale of such Holder's Registrable Securities
pursuant to a Registration.
8. Miscellaneous.
(a) No Inconsistent Agreement. The Company has not entered into nor will
the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holder of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holder do not in any way conflict with and are not
inconsistent with the rights granted to the holder of the Company's other issued
and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and the Holder(s) of a majority of
the Registrable Securities (including outstanding Series B Preferred Units).
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to the Contributors, c/o Eaton Vance Management, One Federal Plaza Street,
Boston, Massachusetts 02110, Attention: Alan Dynner, telecopier number (617)
338-8054, and thereafter at such other address or telecopier number, notice of
which is given in accordance with the provisions of this Section 8(c), with a
copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022,
Attention: Peter H. Blessing, Esq., telecopier number (212) 848-7179, (ii) if to
an assignee or transferee of the Contributors, to such address or telecopier
number such assignee or transferee shall have provided to the Company, and
thereafter at such other address or telecopier number, notice of which is given
in accordance with the provisions of this Section 8(c) and (iii) if to the
Company, at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203,
Attention: President, telecopier number (205) 250-8890, and thereafter at such
other address or telecopier number, notice of which is given in accordance with
the provisions of this Section 8(c), with a copy to Hogan & Hartson, L.L.P.,
Columbia Square, 555 13th Street, N.W., Washington, D.C. 20004, Attention: Alan
Dye, Esq., telecopier number (202) 637-5910. All such notices and communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five (5) business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.
(d) Successors. The rights and obligations of any Holder hereunder may be
assigned to any other Holder. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the Company and the Holder.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ALABAMA, WITHOUT GIVING EFFECT
TO THE CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF ALABAMA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to complete specific performance of the obligations of any other party under
this Agreement to accordance with the terms and conditions of this Agreement in
any court of the United States or any State thereof having jurisdiction.
(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof. (k) Attorneys' Fees. If the Company or any Holder brings an
action to enforce its rights under this Agreement, the prevailing party in the
action shall be entitled to recover its costs and expenses, including without
limitation, reasonable attorneys' fees, incurred in connection with such action,
including any appeal of such action.
(1) Authority; Binding Effect. Each party hereto represents and warrants
that it has the fall legal right, power and authority to execute this Agreement,
that this Agreement has been duly authorized, executed and delivered on behalf
of such party and constitutes a valid and binding agreement of such party
enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
COLONIAL PROPERTIES TRUST
By:
Name:
Title:
BELCREST REALTY CORPORATION
By:
Name:
Title:
BELAIR REAL ESTATE CORPORATION
By:
Name:
Title: