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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

FORM 10-K

 

(Mark One)

 

ý

 

Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

For the fiscal year ended December 31, 2003

 

OR

 

 

o

 

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  0-20625

 

DUKE REALTY LIMITED PARTNERSHIP

 

State of Incorporation:

 

IRS Employer ID Number:

Indiana

 

35-1898425

 

600 East 96th Street, Suite 100
Indianapolis, Indiana 46240

 

Telephone:   (317)  808-6000

 

Securities registered pursuant to Section 12(b) of the Act:  None

 

Securities registered pursuant to Section 12(g) of the Act:  None

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý   No  o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 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.  ý

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act).   Yes  o   No  ý

 

The aggregate market value of the Limited Partner Units held by non-affiliates of Registrant is $259.7 million based on the last reported sale price of the common shares of Duke Realty Corporation into which Limited Partner Units are exchangeable, on June 30, 2003.

 

The aggregate number of Limited Partnership Units outstanding as of February 26, 2004, was 151,972,229.

 

Documents Incorporated by Reference

 

Portions of the registrant’s General Partner’s Proxy Statement for its 2004 Annual Meeting of Shareholders to be held on April 26, 2004, are incorporated by reference in Part III of this Annual Report on Form 10-K.

 



 

TABLE OF CONTENTS

 

Form 10-K

 

Item No.

 

 

 

 

 

 

 

PART I

 

 

 

 

 

 

 

1.

Business

 

 

2.

Properties

 

 

3.

Legal Proceedings

 

 

4.

Submission of Matters to a Vote of Security Holders

 

 

 

Executive Officers of the General Partner

 

 

 

 

 

PART II

 

 

 

 

 

 

 

5.

Market for the Registrant’s Common Equity and Related Stockholder Matters

 

 

6.

Selected Consolidated Financial Data

 

 

7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

7A.

Quantitative and Qualitative Disclosures about Market Risk

 

 

8.

Financial Statements and Supplementary Data

 

 

9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

 

9A.

Disclosure Controls and Procedures

 

 

 

 

 

PART III

 

 

 

 

 

 

 

10.

Directors and Executive Officers of the Registrant

 

 

11.

Executive Compensation

 

 

12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

 

13.

Certain Relationships and Related Transactions

 

 

14.

Principal Accountant Fees and Services

 

 

 

 

 

PART IV

 

 

 

 

 

 

 

15.

Exhibits, Financial Statement Schedules and Reports on Form 8-K

 

 

 

 

 

Signatures

 

 

 



 

PART I

 

Item 1.  Business

 

Risk Factors

 

There are certain risk factors associated with an investment of securities issued by Duke Realty Corporation (the “General Partner”) and Duke Realty Limited Partnership (the “Partnership”). Discussion of these risk factors can be found within Item 7, Management’s Discussion and Analysis, Financial Conditions and Results of Operations, of this Annual Report Form 10-K and in the Partnership’s Current Report on Form 8-K dated September 5, 2003.

 

Background

 

The Partnership was formed on October 4, 1993, when Duke Realty Corporation (the “Predecessor” or the “General Partner”) contributed all of its properties and related assets and liabilities, along with the net proceeds of $309.2 million from the issuance of an additional 14,000,833 shares of the General Partner through an offering to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest. The General Partner was formed in 1985 and qualifies as a Real Estate Investment Trust (“REIT”) under provisions of the Internal Revenue Code. The General Partner is the sole general partner of the Partnership, owning 90.6% of the common Partnership interest as of December 31, 2003 (“General Partner Units”). The remaining 9.4% of the Partnership’s common interest is owned by limited partners (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”). The Limited Partner Units are exchangeable for shares of the General Partner’s common stock on a one-for-one basis subject generally to a one-year holding period.  As of December 31, 2003, the Partnership owns interest in a diversified portfolio of 899 rental properties (including 15 properties totaling 2.8 million square feet under development) which encompass over 109.0 million rentable square feet and are leased by a diverse and stable base of approximately 4,100 tenants whose businesses include manufacturing, retailing, wholesale trade, distribution and professional services. The Partnership also owns or controls nearly 3,800 acres of unencumbered land ready for development.

 

The Partnership, through its Service Operations, also provides, on a fee basis, leasing, property and asset management, development, construction, build-to-suit, and other tenant-related services for approximately 300 tenants in over 8.4 million square feet of space at properties owned by third-party clients. With 13 primary operating platforms, the Partnership concentrates its activities in the Midwest and Southeast United States. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data” for financial information. The Partnership conducts its Service Operations through Duke Realty Services Limited Partnership (“DRSLP”) and Duke Construction Limited Partnership (“DCLP”). All references to the “Partnership” in this Form 10-K Report include the Partnership and those entities owned or controlled by the Partnership, unless the context indicates otherwise.

 

The Partnership’s headquarters and executive offices are located in Indianapolis, Indiana. In addition, the Partnership has twelve regional offices located in Atlanta, Georgia; Cincinnati, Ohio; Columbus, Ohio; Cleveland, Ohio; Chicago, Illinois; Dallas, Texas; Minneapolis, Minnesota; Nashville, Tennessee; Orlando, Florida; Raleigh, North Carolina; St. Louis, Missouri; and Tampa, Florida. The Partnership had 1,011 employees as of December 31, 2003.

 

Business Strategy

 

The Partnership’s business objective is to increase its Funds From Operations (“FFO”) by (i) maintaining and increasing property occupancy and rental rates through the management of its portfolio of existing properties; (ii) expanding existing properties; (iii) developing and acquiring new properties; and (iv) providing a full line of real estate services to the Partnership’s tenants and to third-parties. FFO is used by industry analysts and investors as a supplemental operating performance measure of an equity REIT. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of the National

 

1



 

Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income (loss) determined in accordance with accounting principles generally accepted in the United States (“GAAP”), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures.

 

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminished predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes that the use of FFO, combined with the required primary GAAP presentations, has improved the understanding of operating results of REITs among the investing public and made comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing comparative operating and financial performance (although FFO should be reviewed in conjunction with net income which remains the primary measure of performance) because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO assists in comparing the operating performance of a company’s real estate between periods or as compared to different companies.

 

As a fully integrated commercial real estate firm, the Partnership believes that its in-house leasing, management, development and construction services and the Partnership’s significant base of commercially zoned and unencumbered land in existing business parks should give the Partnership a competitive advantage in its future development activities.

 

The Partnership believes that the analysis of real estate opportunities and risks can be done most effectively at regional or local levels. As a result, the Partnership intends to continue its emphasis on increasing its market share and effective rents in its primary markets where it owns properties. The Partnership also expects to utilize its nearly 3,800 acres of unencumbered land and its many business relationships with nearly 4,100 commercial tenants to expand its build-to-suit business (development projects substantially pre-leased to a single tenant) and to pursue other development and acquisition opportunities in its primary markets. The Partnership believes that this regional focus will allow it to assess market supply and demand for real estate more effectively as well as to capitalize on its strong relationships with its tenant base. In addition, the Partnership seeks to further capitalize on strong customer relationships to provide third party construction and build-for-sale services outside its primary markets.

 

The Partnership’s policy is to seek to develop and acquire Class A commercial properties located in markets with high growth potential for Fortune 500 companies and other quality regional and local firms. The Partnership’s industrial and suburban office development focuses on business parks and mixed-use developments suitable for multiple projects on a single site where the Partnership can create and control the business environment. These business parks and mixed-use developments generally include restaurants and other amenities, which the Partnership believes will create an atmosphere that is particularly efficient and desirable. The Partnership’s retail development focuses on lifestyle, community and neighborhood centers in its existing markets and is developed primarily fro held-for-sale opportunities. As a fully integrated real estate company, the Partnership is able to arrange for or provide to its industrial, office and retail tenants not only well located and well maintained facilities, but also additional services such as build-to-suit construction, tenant finish construction, expansion flexibility and advertising and marketing services.

 

All of the Partnership’s properties are located in areas that include competitive properties. Institutional investors, other REITs or local real estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in the Partnership’s current markets. The supply and demand of similar available rental properties may affect the rental rates the Partnership will receive on its properties.

 

2



 

Financing Strategy

 

The Partnership seeks to maintain a well-balanced, conservative and flexible capital structure by: (i) extending and sequencing the maturity dates of its debt; (ii) borrowing primarily at fixed rates; (iii) generally pursuing current and future long-term debt financings and refinancing on an unsecured basis; and (iv) maintaining conservative debt service and fixed charge coverage ratios. Management believes that these strategies have enabled and should continue to enable the Partnership to access capital markets for their long-term requirements such as debt refinancing and financing development and acquisitions of additional rental properties. In addition, as discussed under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the Partnership has a $500 million unsecured line of credit available for short-term fundings of development and acquisition of additional rental properties. In addition, the Partnership pursues favorable opportunities to dispose of assets that no longer meet the Partnership’s long-term investment criteria and re-deploy the proceeds into new investments that the Partnership believes have excellent long-term growth prospects. The Partnership’s debt to total market capitalization ratio (total market capitalization is defined as the total market value of all outstanding Common Units and Preferred equity plus outstanding indebtedness) at December 31, 2003 was 30.8%. The Partnership’s ratio of earnings to debt service and ratio of earnings to fixed charges for the year ended December 31, 2003 were 2.10x and 1.81x, respectively. In computing the ratio of earnings to debt service, earnings have been calculated by adding debt service to income from continuing operations before earnings or losses from the sale of land and depreciable property dispositions, net of impairment adjustments. Debt service consists of interest expense and recurring principal amortization (excluding maturities) and excludes amortization of debt issuance costs. In computing the ratio of earnings to fixed charges, earnings have been calculated by adding fixed charges, excluding capitalized interest, to income from continuing operations before earnings or losses from the sale of land and depreciable property dispositions, net of impairment adjustments. Fixed charges consist of interest costs, whether expensed or capitalized, the interest component of rental expense, amortization of debt issuance costs and distribution requirements for preferred limited partner interest (“Preferred Units”).

 

Corporate Governance

As a limited partnership that has one general partner owning over 90% of the partnership interest, the governance of the Partnership is necessarily linked to the corporate governance of the General Partner.  The General Partner has and continues to be a leader in issues important to investors such as disclosure and corporate governance initiatives. Summarized below are highlights of the General Partner’s Corporate Governance Initiatives.

 

Board Composition

 

General Partner’s Board is controlled by supermajority (67%+) of Independent Directors

 

 

 

Board Committees

 

General Partner’s Board Committee members are all Independent Directors

 

 

 

Lead Director

 

The Chairman of the Corporate Governance Committee serves as Lead Director of the General Partner’s Independent Directors

 

 

 

Board Guidelines

 

Code of Conduct applies to all Directors of the General Partner and Employees; waivers require the vote of the General Partner’s Independent Directors

 

 

Effective orientation program created for new Directors of the General Partner

 

 

Independence of the General Partner’s Directors is reviewed annually

 

 

Independent Directors of the General Partner meet at least quarterly in executive session

 

 

Independent Directors of the General Partner receive no compensation from the Partnership other than as Directors

 

 

Equity-based compensation plans require General Partner’s shareholder approval

 

 

Board effectiveness and performance is reviewed annually by the Corporate Governance Committee

 

3



 

 

 

Corporate Governance Committee conducts an annual review of the CEO succession plan

 

 

Independent Directors of the General Partner and all Board Committees may retain outside advisors, as they deem appropriate

 

 

Mandatory retirement age for Directors of the General Partner

 

 

Outstanding stock options of the General Partner may not be repriced

 

 

Directors of the General Partner are required to offer resignation upon job change

Ownership

 

Minimum Stock Ownership Guidelines apply to all Directors and Executive Officers of the General Partner

 

The General Partner’s Code of Conduct and its Corporate Governance Guidelines are available in the investor information/corporate governance section of the General Partner’s website at www.dukerealty.com.  A copy of these documents may also be obtained without charge by writing to Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240, Attention: Investor Relations.

 

Other

 

For additional information regarding the Partnership’s investments and operations, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, “Financial Statements and Supplementary Data.” For additional information about the Partnership’s business segments, see Item 8, “Financial Statements and Supplementary Data.”

 

In addition to this Annual Report, the General Partner and the Partnership file quarterly and special reports, proxy statements and other information with the SEC. All documents that are filed with the SEC by the Partnership are available free of charge on the SEC website, which is http://www.sec.gov. You may also read and copy any document filed at the public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. 25049.  Please call the SEC at (800) SEC-0330 for further information about the public reference facilities. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”) via electronic means, including the SEC’s home page on the Internet (http://www.sec.gov). In addition, since some of the General Partner’s securities are listed on the New York Stock Exchange, you can read its SEC filings at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

 

Item 2.  Properties

 

Product Review

 

As of December 31, 2003, the Partnership owns an interest in a diversified portfolio of 899 commercial properties encompassing over 109.0 million net rentable square feet (including 15 properties comprising 2.8 million square feet under development) and nearly 3,800 acres of land for future development.

 

Industrial Properties: The Partnership owns interests in 642 industrial properties encompassing approximately 81.3 million square feet (74% of total square feet) more specifically described as follows:

                  Bulk Warehouses – Industrial warehouse/distribution buildings with clear ceiling heights of 20 feet or more. The Partnership owns 425 buildings totaling 68.1 million square feet of such properties.

                  Service Centers – Also known as flex buildings or light industrial, this product type has 12-18 foot clear ceiling heights and a combination of drive-up and dock-height loading access. The Partnership owns 217 buildings totaling 13.2 million square feet of such properties.

 

Office Properties:  The Partnership owns interests in 250 office buildings totaling approximately 26.9 million square feet (25% of total square feet) more specifically described as follows:

      Suburban Office – The Partnership owns 246 suburban office buildings totaling 26.0 million square feet.

      CBD Office – The Partnership owns four downtown office projects totaling approximately 861,000 square feet.

 

4



 

Retail Properties:  The Partnership owns interests in 7 retail projects totaling approximately 800,000 square feet (1% of total square feet). These properties encompass both power and neighborhood shopping centers.

 

Land:  The Partnership owns or controls more than 3,800 acres of land located primarily in its existing business parks. The land is ready for immediate use and is unencumbered by debt. Over 60.0 million square feet of additional space can be developed on these sites substantially and all of the land is zoned for either office, industrial or retail development.

 

Service Operations:  The Partnership provides property and asset management, development, leasing and construction services to third party owners in addition to its own properties. The Partnership’s current property management base for third parties includes over 8.4 million square feet of properties serving approximately 300 tenants.

 

Property Descriptions

 

The following schedule represents the geographic highlights of the Partnership’s properties in its primary markets.

 

5



 

Duke Realty Limited Partnership

Geographic Highlights

In Service Properties as of December 31, 2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Net
Effective
Rent (2)

 

Percent of
Annual Net
Effective
Rent

 

 

 

Square Feet (1)

 

 

 

 

 

Industrial

 

Office

 

 

 

 

 

Percent of
Overall

 

 

 

 

 

Service Center

 

Bulk

 

Suburban

 

CBD

 

Retail

 

Overall

 

 

 

 

Primary Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlanta

 

3,214,230

 

8,859,456

 

2,247,270

 

 

4,115

 

14,325,071

 

13.48

%

80,590,375

 

13.66

%

Indianapolis

 

1,608,384

 

17,721,945

 

2,726,050

 

161,984

 

82,374

 

22,300,737

 

20.99

%

75,960,615

 

12.89

%

Cincinnati

 

1,240,393

 

7,873,090

 

3,632,071

 

699,402

 

601,537

 

14,046,493

 

13.22

%

74,036,670

 

12.56

%

St. Louis

 

1,334,011

 

2,942,200

 

3,516,953

 

 

 

7,793,164

 

7.34

%

67,121,068

 

11.39

%

Columbus

 

82,520

 

4,376,427

 

3,231,852

 

 

 

7,690,799

 

7.24

%

46,145,229

 

7.83

%

Cleveland

 

60,600

 

3,358,888

 

2,173,613

 

 

 

5,593,101

 

5.27

%

42,132,283

 

7.15

%

Minneapolis

 

2,117,291

 

3,563,091

 

975,323

 

 

 

6,655,705

 

6.27

%

41,466,448

 

7.04

%

Raleigh

 

1,159,756

 

1,513,910

 

2,237,183

 

 

 

4,910,849

 

4.62

%

39,990,134

 

6.78

%

Nashville

 

1,285,261

 

3,335,928

 

785,634

 

 

 

5,406,823

 

5.09

%

38,270,740

 

6.49

%

Chicago

 

276,344

 

4,121,431

 

1,718,207

 

 

50,572

 

6,166,554

 

5.81

%

35,514,517

 

6.03

%

Central Florida

 

350,493

 

2,628,772

 

1,277,439

 

 

 

4,256,704

 

4.01

%

25,574,217

 

4.34

%

Dallas

 

470,754

 

5,337,053

 

152,000

 

 

 

5,959,807

 

5.61

%

13,441,731

 

2.28

%

South Florida

 

 

 

677,806

 

 

 

677,806

 

0.64

%

8,598,504

 

1.46

%

Other (3)

 

 

436,139

 

 

 

 

436,139

 

0.41

%

557,914

 

0.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

13,200,037

 

66,068,330

 

25,351,401

 

861,386

 

738,598

 

106,219,752

 

100.00

%

$

589,400,445

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.43

%

62.21

%

23.87

%

0.81

%

0.70

%

100.00

%

 

 

 

 

 

 

 

 

 

Occupancy %

 

 

 

Industrial

 

Office

 

 

 

 

 

 

 

Service Center

 

Bulk

 

Suburban

 

CBD

 

Retail

 

Overall

 

Primary Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlanta

 

84.93

%

84.71

%

91.86

%

 

100.00

%

85.89

%

Indianapolis

 

87.40

%

96.57

%

87.59

%

94.72

%

99.95

%

94.81

%

Cincinnati

 

79.94

%

91.95

%

87.47

%

93.65

%

98.21

%

90.09

%

St. Louis

 

90.48

%

95.28

%

88.21

%

 

 

91.27

%

Columbus

 

100.00

%

71.83

%

87.32

%

 

 

78.64

%

Cleveland

 

100.00

%

93.45

%

83.42

%

 

 

89.63

%

Minneapolis

 

88.57

%

92.28

%

86.90

%

 

 

90.31

%

Raleigh

 

74.00

%

91.86

%

81.69

%

 

 

83.01

%

Nashville

 

86.38

%

89.95

%

81.99

%

 

 

87.95

%

Chicago

 

89.05

%

93.74

%

83.02

%

 

100.00

%

90.60

%

Central Florida

 

86.70

%

84.38

%

74.15

%

 

 

81.50

%

Dallas

 

95.09

%

94.96

%

100.00

%

 

 

95.10

%

South Florida

 

 

 

83.47

%

 

 

83.47

%

Other (3)

 

 

100.00

%

 

 

 

100.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

85.75

%

91.13

%

85.90

%

93.85

%

98.54

%

89.29

%

 


(1)          Includes all wholly owned and joint venture projects shown at 100% as of report date.

 

(2)          Represents the average annual rental property revenue due from tenants in occupancy as of the date of this report, excluding additional rent due as operating expense reimbursements, landlord allowances for operating expenses and percentage rents.  Joint Venture properties are shown at the Partnership’s ownership percentage.

 

(3)          Represents properties not located in the Partnership’s primary markets.  These properties are located in similar midwest or southeast markets.

 

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Item 3.  Legal Proceedings

 

Broadband Office, Inc. and Official Committee of Unsecured Creditors of Broadband Office, Inc. recently filed a complaint against a group of real estate investment trusts and real estate operating companies and certain affiliated entities and individuals in connection with the formation and management of Broadband Office. Among the defendants are the General Partner, the Partnership and Mr. Dennis Oklak, one of the General Partner’s executive officers. The complaint alleges various breaches of purported fiduciary duties by the defendants, seeks recharacterization or equitable subordination of debt, seeks recovery of alleged avoidable transfers, appears to seek to hold them liable for, among other things, the debt of Broadband Office under alter-ego, veil-piercing and partnership theories, and seeks other relief under other theories. The complaint seeks aggregate damages in excess of $300 million from all of the defendants. The Partnership believes that it and Mr. Oklak have meritorious defenses to the plaintiff’s allegations and intends to vigorously defend this litigation. Due to the inherent uncertainties of the litigation process and the judicial system, the Partnership is not able to predict the outcome of this litigation. If this litigation is not resolved in the Partnership’s favor, it could have a material adverse effect on its business, financial condition and results of operations.

 

Item 4.  Submission of Matters to a Vote of Security Holders

 

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2003.

 

EXECUTIVE OFFICERS OF THE GENERAL PARTNER

 

Robert M. Chapman, age 50.  Mr. Chapman has served as Senior Executive Vice President, Real Estate Operations, since November 2003. From 2000 through November 2003, Mr. Chapman served as the General Partner’s Executive Vice President, Southern Region, responsible for the General Partner’s Atlanta, Orlando, Tampa, Raleigh, Nashville and Dallas property portfolios. Mr. Chapman was Executive Vice President of the Atlanta/Texas region from 1999 to 2000, and Executive Vice President of Acquisitions and Dispositions from 1997 to 1999. Before joining the General Partner in 1997, he served as Senior Vice President and Portfolio Manager for The RREEF Funds, and held positions at Gerald Hines Interests and Lincoln Property Company.

 

Matthew A. Cohoat, age 44. Mr. Cohoat was named Executive Vice President and Chief Financial Officer of the General Partner on January 1, 2004. From 1990 through 2003, Mr. Cohoat held various positions in the General Partner’s accounting group, most recently that of Senior Vice President and Corporate Controller. From 1982 until 1990 he was employed by Ernst & Young, LLP.

 

James B. Conner, age 45. Mr. Connor has served as Regional Executive Vice President for the General Partner’s Chicago Region, which includes its Chicago, Minneapolis, St. Louis and Nashville portfolios, since December 2003. Mr. Connor served as Senior Vice President responsible for the General Partner’s Chicago Operations since joining the Company in 1998. Prior to joining the General Partner, Mr. Connor held several executive and brokerage positions with Cushman & Wakefield, most recently serving as Senior Managing Director for the Midwest area.

 

Howard L. Feinsand, age 56.  Mr. Feinsand has served as the General Partner’s Executive Vice President and General Counsel since 1999. Mr. Feinsand served on the General Partner’s Board of Directors from 1988 to January 2003. From 1996 until 1999, Mr. Feinsand was the founder and principal of Choir Capital Ltd. From 1995 until 1996, he was Managing Director of Citicorp North America, Inc.  He was the Senior Vice President and Manager-Capital Markets, Pricing and Investor Programs of GE Capital Aviation Services, Inc. from 1989 to 1995. From 1971 through 1989, Mr. Feinsand practiced law in New York City.

 

Robert D. Fessler, age 46. Mr. Fessler has served as Executive Vice President of the General Partner’s Atlanta Region, which includes its Atlanta, Raleigh, Florida and Dallas portfolios since July 2003.  Mr. Fessler was Senior Vice President of Cincinnati Operations from 2001 to July 2003, led the Cincinnati Industrial Group from 1988 through 2001 and was a leasing representative from 1987 to 1988.  Prior to

 

7



 

joining the General Partner, Mr. Fessler worked for the Trammell Crow Company and General Electric Company.

 

John W. Guinee III, age 48. Mr. Guinee has served as Executive Vice President and Chief Investment Officer of the General Partner since February 2003. From 1997 through 2001, Mr. Guinee was Executive Vice President and the Chief Investment Officer of Charles E. Smith Residential Realty. From 1985 through 1997, he was Managing Director of LaSalle Advisors (Alex. Brown Kleinwort Benson prior to a merger). From 1982 through 1985, Mr. Guinee was a development manager with Gerald D. Hines Interests in San Francisco.

 

Thomas L. Hefner, age 57.  Mr. Hefner has served as Chief Executive Officer of the General Partner since 1993 and as its Chairman since 1998.  Mr. Hefner has served as a Director of the General Partner since 1993.

 

Steven R. Kennedy, age 47. Mr. Kennedy was named Executive Vice President, Construction on January 1, 2004. From 1986 until 2004, he served the General Partner in various capacities in the construction group, most recently as Senior Vice President.  Prior to joining the General Partner, Mr. Kennedy was employed as a project manager for Charles Pankow Builders, Inc., a West Coast-based design-build and general contractor.

 

Dennis D. Oklak, age 50.  Mr. Oklak was named President and Chief Operating Officer of the General Partner in January 2003. He had been Co-Chief Operating Officer of the General Partner since April 2002.  Mr. Oklak joined the General Partner in 1986 as Tax Manager and was later named Controller of the General Partner’s development companies before being named Vice President and Treasurer. In that position, he served as the Chief Accounting Officer with responsibility for financial reporting in public offerings of securities; assisting the vice presidents of each business unit with deal structuring; and supervising all financial aspects of the General Partner. Mr. Oklak assumed the position of Executive Vice President and Chief Administrative Officer of the General Partner in 1997 and supervised accounting, tax, information technology, human resources and tenant services.

 

Christopher L. Seger, age 36. Mr. Seger was appointed Executive Vice President, National Development/Construction of the General Partner in December 2003. From 2001 to 2003, Mr. Seger was Senior Vice President of the General Partner’s Florida Group, with responsibility for its office and industrial portfolio in Central and South Florida.  From 1999 to 2001, Mr. Seger was Senior Vice President of the General Partner’s Indiana Office Group; and from 1993 to 1999 served in the General Partner’s Acquisitions and Leasing groups.

 

PART II

 

Item 5.  Market for the Registrant’s Common Equity and Related Stockholder Matters

 

There is no established public trading market for the Common Units.  The following table sets forth the cash distributions paid during each quarter.  As of February 26, 2004 there were 175 record holders of Common Units.

 

Quarter Ended

 

2003 Distributions
per Common Unit

 

2002 Distributions
per Common Unit

 

 

 

 

 

 

 

December 31

 

$

.460

 

$

.455

 

September 30

 

.460

 

.455

 

June 30

 

.455

 

.450

 

March 31

 

.455

 

.450

 

 

On January 28, 2004, the Partnership declared a quarterly cash distribution of $.46 per Common Unit, payable on February 27, 2004, to Common Unitholders of record on February 12, 2004.

 

Item 6.  Selected Consolidated Financial Data

 

The following sets forth selected consolidated financial and operating information on a historical basis for the Partnership for each of the years in the five-year period ended December 31, 2003. The following

 

8



 

information should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data” included in this Form 10-K (in thousands, except per units amounts):

 

 

 

2003

 

2002

 

2001

 

2000

 

1999

 

Results of Operations:

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Rental Operations

 

$

730,437

 

$

698,107

 

$

701,014

 

$

693,983

 

$

523,929

 

Service Operations

 

58,496

 

67,860

 

80,459

 

82,799

 

54,031

 

Total Revenues from Continuing Operations

 

$

788,933

 

$

765,967

 

$

781,473

 

$

776,782

 

$

577,960

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available for Common Units

 

$

179,587

 

$

171,601

 

$

259,892

 

$

245,029

 

$

159,447

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Unit Data :

 

 

 

 

 

 

 

 

 

 

 

Basic Income per Common Unit:

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

$

1.09

 

$

1.11

 

$

1.71

 

$

1.66

 

$

1.30

 

Discontinued Operations

 

.11

 

.04

 

.05

 

.02

 

.03

 

Diluted Income per Common Unit:

 

 

 

 

 

 

 

 

 

 

 

Continuing Operations

 

1.08

 

1.10

 

1.69

 

1.64

 

1.29

 

Discontinued Operations

 

.11

 

.04

 

.05

 

.02

 

.03

 

Dividends paid per Common Unit

 

1.83

 

1.81

 

1.76

 

1.64

 

1.46

 

Weighted Average Common Units Outstanding

 

150,280

 

149,423

 

147,961

 

145,906

 

119,467

 

Weighted Average Common and Dilutive Potential Common Units

 

151,141

 

150,839

 

151,710

 

147,441

 

120,511

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (at December 31):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

5,558,711

 

$

5,347,055

 

$

5,330,246

 

$

5,461,233

 

$

5,487,284

 

Total Debt

 

2,335,536

 

2,106,285

 

1,814,856

 

1,973,215

 

2,113,476

 

Total Preferred Equity

 

511,785

 

415,466

 

583,419

 

689,216

 

690,340

 

Total Partners’ Equity

 

2,878,320

 

2,919,843

 

3,179,232

 

3,147,598

 

3,101,989

 

Total Common Unit’s Outstanding

 

150,628

 

149,907

 

148,438

 

146,911

 

144,803

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

Funds From Operations (1)

 

$

372,519

 

$

358,871

 

$

388,355

 

$

365,129

 

$

267,243

 

Cash Flow Provided by (Used by):

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

368,088

 

$

568,973

 

$

348,680

 

$

363,610

 

$

316,286

 

Investing activities

 

(319,579

)

(337,247

)

93,488

 

(11,972

)

(740,847

)

Financing activities

 

(52,943

)

(225,050

)

(470,915

)

(330,952

)

436,449

 

 


(1) Funds From Operations (“FFO”) is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust (“REIT”). FFO is calculated in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income (loss) determined in accordance with accounting principles generally accepted in the United States (“GAAP”), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures.

 

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminished predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes that the use of FFO, combined with the required primary GAAP presentations, has improved the understanding of operating results of REITs among the investing public and made comparisons of REIT operating results more meaningful. As a REIT subsidiary, the Partnership’s management considers FFO to be a useful measure for reviewing comparative operating and financial performance (although FFO should be reviewed in conjunction with net income which remains the primary measure of performance) because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO assists in comparing the operating performance of a company’s real estate between periods or as compared to different companies.

 

9



 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Cautionary Statement Regarding Forward Looking Statements

 

Certain statements in this Annual Report, including those related to the Partnership’s future operations, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Partnership, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this report. Some of the risks, uncertainties and other important factors that may affect future results include, among others:

 

•  General economic and business conditions;

•  The General Partner’s continued qualification as a real estate investment trust;

•  Competition for tenants and decrease in property occupancy;

•  Potential increases in real estate construction costs;

•  Potential changes in interest rates;

•  Continuing ability to favorably raise debt and equity in the capital markets; and

•  Other risks inherent in the real estate business including tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments.

 

This list of risks and uncertainties, however, is not intended to be exhaustive. The Partnership has on file with the Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K dated September 5, 2003, with additional risk factor information.

 

The words “believe,” “estimate,” “expect,” “anticipate” and similar expressions or statements regarding future periods are intended to identify forward-looking statements. Although we believe that the plans, expectations and results expressed in or suggested by our forward-looking statements are reasonable, all forward-looking statements are inherently uncertain as they involve substantial risks and uncertainties beyond the Partnership’s control. New factors emerge from time to time, and it is not possible for us to predict the nature or assess the potential impact of each new factor on the Partnership’s business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. The Partnership undertakes no obligation to update or revise any of its forward-looking statements for events or circumstances that arise after the statement is made.

 

Business Overview

 

As of December 31, 2003, the Partnership:

 

                  Owned or jointly controlled 899 industrial, office and retail properties (including properties under development), consisting of over 109.0 million square feet primarily located in 10 states; and

                  Owned or jointly controlled approximately 3,800 acres of land with an estimated future development potential of more than 60.0 million square feet of industrial, office and retail properties.

 

The Partnership provides the following services for its properties and for certain properties owned by third parties:

                  leasing;

                  management;

                  construction;

                  development; and

                  other tenant-related services.

 

The Partnership’s operating results depend primarily upon rental income from its office, industrial and retail properties (“Rental Operations”). The following highlights the areas of Rental Operations that the Partnership considers critical for future revenue growth (all square footage totals and occupancy percentages reflect both wholly-owned properties and properties in joint ventures):

 

10



 

Same Property Performance: The Partnership tracks same property performance, which measures the performance of properties that were in-service for all reported portions of a two-year period by comparing the results of the second year with the results of the first year. In 2003, net operating income from the same property portfolio decreased by 3.5% from 2002, compared to .3% growth in 2002 over 2001. The current year decline is a result of a decrease of $8.8 million in same property lease termination fees compared to 2002. In addition to the decrease in lease termination fees, the Partnership increased the use of free rent concessions in 2003 as an incentive to attract quality tenants.

 

Occupancy Analysis: The ability to maintain occupancy rates is a principal driver of the Partnership’s results of operations. The following table sets forth information regarding the Partnership’s in-service portfolio of rental properties as of December 31, 2003 and 2002 (square feet in thousands):

 

 

 

Total
Square Feet

 

Percent of
Total Square Feet

 

Percent Occupied

 

Type

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

Industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Centers

 

13,200

 

13,758

 

12.4

%

13.0

%

85.8

%

87.4

%

Bulk

 

66,068

 

66,021

 

62.2

%

62.8

%

91.1

%

87.1

%

Office

 

26,213

 

24,578

 

24.7

%

23.4

%

86.2

%

86.5

%

Retail

 

739

 

839

 

.7

%

0.8

%

98.5

%

98.5

%

Total

 

106,220

 

105,196

 

100.0

%

100.0

%

89.3

%

87.1

%

 

The overall increase in occupancy for 2003 was the result of increased activity primarily in the bulk industrial product, fewer lease terminations through lease buyouts and fewer tenant bankruptcies. An improving economy coupled with increased business spending and aggressive leasing led to the overall occupancy increase. The current year decrease in Service Centers’ occupancy was mainly the result of a tenant terminating 241,000 square feet through a lease buyout in December 2003 in exchange for a termination payment of $3.0 million.

 

Lease Expiration and Renewals: The Partnership’s ability to maintain and grow its occupancy rates primarily depends upon its continuing ability to re-lease expiring space. The following table reflects the Partnership’s in-service lease expiration schedule as of December 31, 2003, by product type. The table indicates square footage and annualized net effective rents (based on December 2003 rental revenue) under expiring leases (in thousands):

 

 

 

Total Portfolio

 

Industrial

 

Office

 

Retail

 

Year of Expiration

 

Square
Feet

 

Dollars

 

%

 

Square
Feet

 

Dollars

 

Square
Feet

 

Dollars

 

Square
Feet

 

Dollars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2004

 

11,717

 

$

77,603

 

11

%

9,092

 

$

41,621

 

2,625

 

$

35,982

 

 

$

 

2005

 

13,124

 

91,409

 

14

%

10,289

 

50,825

 

2,799

 

40,084

 

36

 

500

 

2006

 

10,827

 

76,367

 

12

%

8,507

 

44,545

 

2,318

 

31,789

 

2

 

33

 

2007

 

11,192

 

77,080

 

12

%

8,490

 

41,276

 

2,677

 

35,527

 

25

 

277

 

2008

 

13,122

 

79,650

 

12

%

10,538

 

46,383

 

2,563

 

32,904

 

21

 

363

 

2009

 

8,797

 

58,830

 

9

%

6,727

 

31,021

 

2,050

 

27,421

 

20

 

388

 

2010

 

6,956

 

52,659

 

8

%

5,053

 

25,392

 

1,889

 

27,031

 

14

 

236

 

2011

 

3,783

 

32,904

 

5

%

2,461

 

12,290

 

1,306

 

20,369

 

16

 

245

 

2012

 

4,597

 

28,389

 

4

%

3,547

 

13,655

 

1,043

 

14,401

 

7

 

333

 

2013

 

3,725

 

38,629

 

6

%

1,673

 

7,888

 

1,989

 

29,826

 

63

 

915

 

2014 and Thereafter

 

7,002

 

44,952

 

7

%

5,151

 

21,266

 

1,327

 

20,150

 

524

 

3,536

 

 

 

94,842

 

$

658,472

 

100

%

71,528

 

$

336,162

 

22,586

 

$

315,484

 

728

 

$

6,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Portfolio Square Feet

 

106,220

 

 

 

 

 

79,269

 

 

 

 

 

26,212

 

 

 

739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Occupied

 

89.3

%

 

 

 

 

90.2

%

 

 

 

 

86.2

%

 

 

98.5

%

 

The Partnership renewed 72.3% of its leases up for renewal in 2003, totaling 8.1 million square feet on which it attained a 1.4% growth in net effective rents. The relatively flat growth in rental rates is indicative of excess vacancies in many of the Partnership’s markets requiring competitive pricing strategies to retain current tenants.

 

The average term of renewals decreased to 3.5 years in 2003, from 4.4 years in 2002. The Partnership is currently renewing tenants for shorter terms in anticipation of better market rates for future renewal periods.

 

The Partnership’s lease renewal percentages over the past three years have remained relatively consistent at a 70-75% success rate despite the relatively weak market conditions. The Partnership does not currently expect its renewal percentage in 2004 to significantly differ from that experienced in 2003.

 

11



 

Future Development: Another source of growth in earnings for the Partnership is the development of additional rental properties. The Partnership had approximately 2.8 million square feet of properties under development at December 31, 2003 with total projected costs of approximately $160.3 million. The total projected costs of properties under development at December 31, 2002 was $195.0 million. The lower volume reflects the relative slowdown in business expansion in response to the overall weakened economy, and the Partnership’s plan to limit the development of speculative properties until activity increases.

 

The properties under development are expected to provide future Rental Operations growth as they are placed in service or, for those properties that are being developed for sale, earnings through Service Operations upon their eventual sale. A summary of the properties under development as of December 31, 2003, follows (in thousands, except percent leased and stabilized returns):

 

Anticipated
In-Service
Date

 

Square
Feet

 

Percent
Leased

 

Project
Costs

 

Anticipated
Stabilized
Return

 

Held for Rental:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Quarter 2004

 

1,485

 

64

%

$

59,738

 

9.9

%

2nd Quarter 2004

 

225

 

36

%

16,257

 

11.0

%

3rd Quarter 2004

 

200

 

53

%

11,997

 

9.9

%

Thereafter

 

193

 

100

%

6,475

 

9.9

%

 

 

2,103

 

63

%

$

94,467

 

10.1

%

Held-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1st Quarter 2004

 

422

 

100

%

$

37,110

 

9.0

%

2nd Quarter 2004

 

26

 

100

%

2,567

 

11.6

%

3rd Quarter 2004

 

262

 

100

%

26,143

 

10.1

%

Thereafter

 

 

 

 

 

 

 

710

 

100

%

$

65,820

 

9.5

%

 

 

 

 

 

 

 

 

 

 

Total

 

2,813

 

73

%

$

160,287

 

9.9

%

 

Acquisition and Disposition Activity:The Partnership has an active capital recycling program based upon a strategy to dispose of non-strategic assets and utilize the proceeds to fund new development and acquisitions of more desirable properties. Through this program, the Partnership is continually improving the overall quality of its investment portfolio. During 2000 and 2001, the Partnership disposed of over $1 billion of properties, which generated substantially greater proceeds than were required to fund new development and acquisitions. The excess proceeds were utilized to pay down Partnership debt, which has reduced the Partnership’s debt-to-total market capitalization ratio to a conservative 30.8% at December 31, 2003.

 

Dispositions of held-for-rental properties slowed in 2003 and 2002, totaling $126 million and $41 million, respectively, as the slower business climate limited reinvestment opportunities. The disposition proceeds were used to partially fund 2003 and 2002 acquisitions of $232 million and $114 million, respectively. The Partnership will continue to pursue both disposition and acquisition opportunities that arise in 2004. While management expects the volume of acquisitions to exceed dispositions, management cannot predict when or if these opportunities will arise.

 

Funds From Operations

 

Funds From Operations (“FFO”) is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust (“REIT”). FFO is calculated in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income (loss) determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures.

 

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or

 

12



 

fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes that the use of FFO, combined with the required primary GAAP presentations, has improved the understanding of operating results of REITs among the investing public and made comparisons of REIT operating results more meaningful. As a REIT subsidiary, the Partnership’s management considers FFO to be a useful measure for reviewing comparative operating and financial performance (although FFO should be reviewed in conjunction with net income which remains the primary measure of performance) because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO assists in comparing the operating performance of a company’s real estate between periods or as compared to different companies.

 

The following table summarizes the calculation of FFO for the years ended December 31 (in thousands):

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Net income available for common units

 

$

179,587

 

$

171,601

 

$

259,892

 

Add back (deduct):

 

 

 

 

 

 

 

Depreciation and amortization

 

196,234

 

175,621

 

159,714

 

Share of adjustments for unconsolidated companies

 

18,839

 

17,598

 

14,177

 

Loss (Earnings) from depreciated property sales

 

(22,141

)

(5,949

)

(45,428

)

Funds From Operations

 

$

372,519

 

$

358,871

 

$

388,355

 

 

Funds From Operations for 2002 and 2001 have been restated to include the effects of the Partnership’s adoption of the SEC’s July 31, 2003 Staff Policy Statement that clarifies the application of FASB-EITF Topic D-42, “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock.” See discussion of Restatement of Net Income below. Additionally, the Partnership has restated 2002 and 2001 FFO through the adoption of recent guidance from the SEC requiring the inclusion of impairment adjustments in the calculation of FFO.

 

Results of Operations

 

A summary of the Partnership’s operating results and property statistics for each of the years in the three-year period ended December 31, 2003, follows (in thousands, except number of properties and per unit amounts):

 

 

 

2003

 

2002

 

2001

 

Rental Operations revenues

 

$

730,437

 

$

698,107

 

$

701,014

 

Service Operations revenues

 

58,496

 

67,860

 

80,459

 

Earnings from Rental Operations

 

185,043

 

216,650

 

250,902

 

Earnings from Service Operations

 

21,118

 

29,520

 

35,115

 

Operating income

 

184,819

 

221,466

 

270,478

 

Net income available for common units

 

179,587

 

171,601

 

259,892

 

Weighted average common units outstanding

 

150,280

 

149,423

 

147,961

 

Weighted average common and dilutive potential common units

 

151,141

 

150,839

 

151,710

 

Basic income per common unit:

 

 

 

 

 

 

 

Continuing operations

 

$

1.09

 

$

1.11

 

$

1.71

 

Discontinued operations

 

$

.11

 

$

.04

 

$

.05

 

Diluted income per common unit:

 

 

 

 

 

 

 

Continuing operations

 

$

1.08

 

$

1.10

 

$

1.69

 

Discontinued operations

 

.11

 

.04

 

.05

 

Number of in-service properties at end of year

 

884

 

910

 

888

 

In-service square footage at end of year

 

106,220

 

105,196

 

102,982

 

Under development square footage at end of year

 

2,813

 

3,058

 

4,701

 

 

Comparison of Year Ended December 31, 2003 to Year Ended December 31, 2002

 

Rental Income from Continuing Operations

Rental income from continuing operations increased from $670.9 million in 2002 to $706.7 million in 2003.  The following table reconciles rental income by reportable segment to the Partnership’s total reported rental income from continuing operations for the years ended December 31, 2003 and 2002 (in thousands):

 

13



 

 

 

2003

 

2002

 

Office

 

$

421,660

 

$

395,542

 

Industrial

 

273,307

 

264,572

 

Retail

 

7,999

 

6,885

 

Other

 

3,783

 

3,928

 

Total

 

$

706,749

 

$

670,927

 

 

Although the Partnership’s three reportable segments comprising Rental Operations (office, industrial and retail) are all within the real estate industry, they are not necessarily affected by the same economic and industry conditions. For example, the Partnership’s retail segment experienced high occupancies and strong overall performance during 2003, while the Partnership’s office and industrial segments reflected the weaker economic environment for those property types. The primary causes of the increase in rental income from continuing operations, with specific references to a particular segment when applicable, are summarized below:

 

                  During 2003, in-service occupancy improved from 87.1% at the end of 2002 to 89.3% at the end of 2003. The second half of 2003 was highlighted by a significant increase in the industrial portfolio occupancy of 2.1% along with a slight increase in office portfolio occupancy of .9%. Increased occupancy continues to be management’s primary focus for 2004.

                  Lease termination fees totaled $27.4 million in 2002 compared to $17.2 million in 2003. Most of this decrease was attributable to the office segment, which recognized $21.1 million of termination fees in 2002 as compared to $11.8 million in 2003. Lease termination fees relate to specific tenants that pay a fee to terminate their lease obligations before the end of the contractual lease term. The high volume of termination fees in 2002 was reflective of the contraction of the business of large office users during that year and their desire to downsize their use of office space. The decrease in termination fees for 2003 was indicative of an improving economy and a more stable financial position of the Partnership’s tenants. Although there is no way to predict the amount of future lease termination fees, management believes that the amount of these fees will continue to decline in 2004.

                  During the year ended 2003, the Partnership acquired $232 million of properties totaling 2.1 million square feet. The acquisitions were primarily Class A office buildings in existing markets with overall occupancy near 90%. Revenues associated with these acquisitions totaled $10.2 million in 2003.  In addition, revenues from 2002 acquisitions totaled $15.8 million in 2003 compared to $4.8 million in 2002. This significant increase is primarily due to a large office acquisition that closed at the end of December 2002.

                  Developments placed in-service in 2003 provided revenues of $6.6 million, while revenues associated with developments placed in-service in 2002 totaled $13.7 million in 2003 compared to $4.7 million in 2002.

                  Proceeds from dispositions of held for rental properties totaled $126.1 million in 2003, compared to $40.9 million in 2002. These properties generated revenue of $12.5 million in 2003 versus $19.6 million in 2002.

 

Equity in Earnings of Unconsolidated Companies

Equity in earnings represents the Partnership’s share of net income from investments in unconsolidated companies. These joint ventures generally own and operate rental properties and hold land for development. These earnings decreased from $27.2 million in 2002 to $23.6 million in 2003.  This decrease is a result of the following significant activity:

 

                  In 2002, a $1.8 million gain was recognized on a property that was developed and sold upon completion to a third party.

                  In 2003, the Partnership’s total investment in joint ventures decreased. This decrease was the result of the Partnership acquiring its partner’s interest in three joint ventures, selling its interest in two and one venture being dissolved in the current year. While the number of joint ventures decreased, the joint ventures’ occupancy increased from 93.2% to 94.0% in 2003.

 

14



 

Rental Expenses and Real Estate Taxes

The following table reconciles rental expenses and real estate taxes by reportable segment to the Partnership’s total reported amounts in the statement of operations for the years ended December 31, 2003 and 2002 (in 000’s):

 

 

 

2003

 

2002

 

Rental Expenses:

 

 

 

 

 

Office

 

$

104,447

 

$

92,401

 

Industrial

 

36,954

 

30,252

 

Retail

 

926

 

494

 

Other

 

1,689

 

1,394

 

Total

 

$

144,016

 

$

124,541

 

 

 

 

 

 

 

Real Estate Taxes:

 

 

 

 

 

Office

 

$

43,049

 

$

38,608

 

Industrial

 

31,123

 

29,206

 

Retail

 

477

 

445

 

Other

 

4,128

 

3,044

 

Total

 

$

78,777

 

$

71,303

 

 

The increased rental and real estate tax expenses for 2003, as compared to 2002, was the result of the Partnership’s increase in average in-service square fee and occupancy.  These increases resulted from the Partnership’s acquisition activities and developments placed in service in 2003.

 

Interest Expense

The Partnership’s interest expense increased from $114.7 million in 2002 to $129.1 million in 2003.  Although the Partnership benefited from significantly lower interest rates during the year, interest expense increased because of increased borrowings during the year and a decrease in the amount of interest that was capitalized. The increased borrowings reflected the funding of the Partnership’s developments during the year and the excess of properties acquired over those disposed. Interest capitalized for 2003 was significantly lower than 2002 as development activity for 2003 was substantially slower than prior years. Development starts for 2003 totaled only $108 million compared to approximately $225 million for 2002. Other significant factors impacting interest expense for 2003 are summarized as follows (in thousands):

 

                  The Partnership continued to replace secured debt financing with unsecured debt, and paid off over $120 million of secured loans throughout 2003. The payoffs included secured loans due in 2003 and those due in 2004 and beyond for which the Partnership was able to take advantage of expired or negotiated lower pre-payment penalties and utilize lower financing costs from unsecured debt offerings or the unsecured line of credit.

                  Approximately $425 million of new unsecured debt was issued in 2003. The Partnership issued $175 million of seven-year debt in January 2003 at an effective interest rate of 5.37%, $150 million of ten-year debt in May 2003 at an effective interest rate of 4.64% and $100 million of four-year debt in November 2003 at an effective interest rate of 3.63%. The Partnership retired $175 million of debt in June 2003 that had an effective interest rate of 7.33%.

                  The Partnership utilized its $500 million unsecured line of credit more heavily in 2003 than it did during 2002 in order to take advantage of the historically low borrowing costs. The balance on the line of credit was $351 million at December 31, 2003 compared to $281 million at December 31, 2002.

 

Depreciation and Amortization Expense

Depreciation and amortization expense for 2003 increased by over $22.5 million compared to 2002 because of an increase in tenant improvements and leasing costs. As discussed earlier, the Partnership experienced higher overall occupancy and more acquisition activity in 2003, which resulted in increased capital expenditures for tenant improvements and deferred lease commissions as well as increases in held for investment property basis. The following highlights the significant changes in depreciable and amortizable property during 2003:

 

                  The basis of the held for investment property portfolio increased by $166 million as a result of the Partnership’s development and acquisition activity.

 

15



 

                  The Partnership incurred tenant improvement costs of $91.3 million in 2003.

                  The Partnership incurred lease commissions of $41.6 million in 2003.

 

Also contributing to the increased expense in 2003 was the effect of Statement of Financial Accounting Standards No. 141, Business Combinations (“SFAS 141”), on acquisitions. This accounting pronouncement requires the allocation of a portion of a property’s purchase price to intangible assets for leases acquired and in-place at the closing date of the acquisition. These intangible assets are amortized over the remaining life of the leases (generally 3-5 years) as compared to the building basis portion of the acquisition, which is depreciated over 40 years. The amortization associated with the acquired lease intangible assets recorded on 2003 acquisitions totaled $4.2 million.

 

Service Operations

Service Operations primarily consist of leasing, management, construction and development services for joint venture properties and properties owned by third parties. These operations are heavily influenced by the current state of the economy as leasing and management fees are dependent upon occupancy while construction and development services rely on businesses expanding operations. The following highlights the significant components of revenues in Service Operations:

 

                  The Partnership experienced more than a 2% decrease in its overall gross profit margin percentage in its general contractor business in 2003 because of more competitive pricing in many of its markets.  However, despite this decrease, the Partnership was able to increase its net general contractor revenues from $21.9 million in 2002 to $26.8 million in 2003 because of a significant increase in volume. This volume increase was attributable to the low cost of financing available to businesses, thereby making it more attractive for them to own instead of lease facilities. The Partnership has a substantial backlog of $175.6 million for third party work as of December 31, 2003 that will carry into 2004.

                  Property management, maintenance and leasing fee revenues have remained fairly constant between 2002 and 2003 as the number of properties managed by the Partnership has not changed significantly.

                  Construction management and development activity income represents construction and development fees earned on projects where the Partnership acts as the construction manager along with profits from the Partnership’s held-for-sale program under which the Partnership develops a property with the intent to sell upon completion. The decrease in revenues from $29.4 million in 2002 to $15.5 million in 2003 is primarily due to fewer properties being sold in 2003 from the held-for-sale program. During 2002, the Partnership sold eight held-for-sale properties for a pre-tax gain of $28.2 million compared to the sale of four properties in 2003 for a pre-tax gain of $15.4 million in 2003. Profit margins on held-for-sale transactions fluctuate by sale depending on the type of property being sold, the strength of the underlying tenant and the nature of the sale, such as a pre-contracted purchase price for a primary tenant versus a sale on the open market.

 

Service Operations expenses decreased from $38.3 million in 2002 to $37.4 million in 2003.  Included in these amounts are income taxes which decreased to $5.7 million in 2003 from $8.4 million in 2002 primarily as a result of lower income from the disposition of held-for-sale properties. Other Service Operations expenses increased by approximately $2.0 million in 2003 over 2002. This increase was driven primarily from the costs associated with increased third party construction volume.

 

General and Administrative Expense

General and administrative expense decreased from $24.7 million in 2002 to $21.3 million for the year ended December 31, 2003. The decrease is primarily attributable to an increase in construction volume for third party projects resulting in a greater allocation of overhead to Service Operations operating expenses.

 

Other Income and Expenses

Gain on sale of land and depreciable property dispositions, net of impairment adjustment, is comprised of the following amounts in 2003 and 2002:

 

16



 

 

 

2003

 

2002

 

 

 

 

 

 

 

Gain on sales of depreciable properties

 

$

0

 

$

4,491

 

Gain on sale of joint venture interests

 

8,639

 

0

 

Gain on land sales

 

7,695

 

4,478

 

Impairment adjustment

 

(560

)

(6,629

)

 

 

 

 

 

 

Total

 

$

15,774

 

$

2,340

 

 

Gain on sales of depreciable properties represent sales of previously held for investment rental properties which did not qualify to be classified as discontinued operations under SFAS 144 (see discussion under Discontinued Operations below). There were no such sales in 2003.

 

In 2003, the Partnership sold its interests in two joint ventures that owned and operated depreciable investment property. The Partnership owned 50% of each of these joint ventures.

 

Gain on land sales represents sales of undeveloped land owned by the Partnership. The Partnership pursues opportunities to dispose of land in markets with a high concentration of undeveloped land and those markets where the land no longer meets strategic development plans of the Partnership.

 

The Partnership recorded $560,000 of impairment charges on three land parcels that were sold in 2003. The Partnership has analyzed each of its in-service properties and has determined that there are no additional valuation adjustments that need to be made as of December 31, 2003. The $6.6 million adjustment recorded in 2002 was associated with four properties determined to be impaired.

 

Other revenue and expenses is comprised primarily of the write-off of contract development costs for abandoned development projects and gains on terminations of interest rate swaps. In 2003, the Partnership recorded contract development expenses of $1.0 million compared to $1.2 million in 2002. The Partnership accumulates costs of potential projects as an asset until such time as the costs are capitalized into a new project or expensed for a failed project.

 

In 2003, the Partnership terminated four forward starting interest rate swap agreements for a net gain of $643,000. The swap agreements were entered into as hedges for future anticipated debt issuances. These agreements were terminated as a result of the Partnership’s capital needs being met through the General Partner’s issuance of the Series J Preferred Stock in lieu of the contemplated debt issuances and the contribution of the net proceeds of such offering to the Partnership in return for the issuance of Series J Preferred Units. In 2002, a $1.4 million gain was recognized in connection with a swap that did not qualify for hedge accounting. The Partnership has no swaps or other derivative instruments outstanding at December 31, 2003. See discussion of the Partnership’s use of derivative instruments in the footnotes to the financial statements.

 

Discontinued Operations

The Partnership adopted Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”), on January 1, 2002. SFAS 144 requires the Partnership to report in discontinued operations the results of operations of a property that has either been disposed or is classified as held-for-sale, unless certain conditions are met.

 

At December 31, 2003, the Partnership classified the results of operations and gains or losses of 45 buildings as discontinued operations. Of these buildings, 2 were sold in 2002 and 42 were sold in 2003.  Impairment charges of $500,000 were recognized in 2003 relating to a single property that was sold in 2003.  As a result of the sale, these charges were classified in discontinued operations for 2003.  One property is owned at December 31, 2003, and is under contract to sell in 2004. Impairment charges totaling $2.7 million that were recognized in 2002 have been reclassed to discontinued operations as the properties to which they pertain were sold in 2003. Beginning in 2002, results of operations and any gains or losses on all sales of depreciable properties are classified in discontinued operations.

 

17



 

Comparison of Year Ended December 31, 2002 to Year Ended December 31, 2001

 

Rental Income from Continuing Operations

Rental income from continuing operations increased from $669.6 million in 2001 to $670.9 million in 2002.  The following table reconciles rental income by reportable segment to the Partnership’s total reported rental income from continuing operations for the years ended December 31, 2002 and 2001 (in thousands):

 

 

 

2002

 

2001

 

Office

 

$

395,542

 

$

374,805

 

Industrial

 

264,572

 

272,891

 

Retail

 

6,885

 

18,165

 

Other

 

3,928

 

3,762

 

Total

 

$

670,927

 

$

669,623

 

 

The following significant fluctuations are the primary causes of the increase in rental income from continuing operations for all three segments, with specific references to a particular segment when applicable:

 

                  Throughout 2002, in-service occupancy decreased from 88.6% at the end of 2001 to 87.1% at the end of 2002.  The decline was the result of the weakened economy and its effect on business in the Partnership’s markets. These markets experienced a shortage of demand compared to the supply of office and industrial space resulting from downsizing of leased space for existing tenants, the lack of new business growth, and the tendency of existing businesses to hold off on growth plans until the economy improves.

                  Lease termination fees totaled $27.4 million in 2002 compared to $17.9 million in 2001. In 2002, there were significant individual termination fees received, particularly in the office portfolio, where $21.1 million of termination fees were recognized compared to $12.1 million in 2001. This trend was consistent with the continuing decline in occupancy for office space in many of the Partnership’s markets.

                  In August of 2001, the Partnership sold 21 properties or approximately 75% of its retail portfolio. As a result of this sale, the Partnership had eight months of operations associated with these properties in 2001.

 

Equity in Earnings of Unconsolidated Companies

Equity in earnings decreased from $31.4 million in 2001 to $27.2 million for 2002 as a result of the following:

 

                  The Partnership’s share of lease termination fees for 2001 was approximately $2.1 million, compared to approximately $658,000 in 2002.

                  During 2002, a 50% joint venture had increased interest expense of approximately $900,000 as a result of $71.0 million in debt issued during the second quarter of 2001.

 

Rental Expenses and Real Estate Taxes

The following table reconciles rental expenses and real estate taxes by reportable segment to the Partnership’s total reported amounts in the statement of operations for the years ended December 31, 2002 and 2001 (in 000’s):

 

 

 

2002

 

2001

 

Rental Expenses:

 

 

 

 

 

Office

 

$

92,401

 

$

86,782

 

Industrial

 

30,252

 

28,214

 

Retail

 

494

 

1,619

 

Other

 

1,394

 

1,797

 

Total

 

$

124,541

 

$

118,412

 

 

 

 

 

 

 

Real Estate Taxes:

 

 

 

 

 

Office

 

$

38,608

 

$

33,893

 

Industrial

 

29,206

 

29,520

 

Retail

 

445

 

1,553

 

Other

 

3,044

 

3,281

 

Total

 

$

71,303

 

$

68,247

 

 

18



 

The Partnership’s three reportable segments comprising Rental Operations (office, industrial and retail) are all within the real estate industry. The increased rental and real estate tax expense were the result of the Partnership’s increased real estate assets associated with current year developments and acquisitions.

 

Depreciation and Amortization

Depreciation and amortization expense for the year ended December 31, 2002, increased over the prior year through an increase in the Partnership’s building asset basis, increased investments in tenant improvements and the expensing of undepreciated tenant improvements associated with the early terminations of tenants.

 

Interest Expense

The $5.2 million increase in interest expense is attributable to the following:

 

                  Interest capitalized on development projects decreased from $25.9 million in 2001 to $13.5 million in 2002 because of decreased development activity by the Partnership in response to soft demand in most of the Partnership’s markets.

                  Interest expense on corporate unsecured debt increased from $98.7 million in 2001 to $100.8 million in 2002. The Partnership issued $150 million of ten-year unsecured debt in August 2002 at an effective interest rate of 5.88% and $50 million of ten-year unsecured debt in September 2002 at an effective interest rate of 5.45%. Also in 2002, the Partnership paid off $50 million of debt that matured in September, which had an effective rate of 7.31%.

                  Interest expense on the Partnership’s secured debt decreased from $30.8 million in 2001 to $22.9 million in 2002 as the Partnership paid off $13.5 million of secured debt throughout 2002 and experienced lower borrowings on its secured line of credit during 2002 compared to 2001.  Additionally, the Partnership paid off approximately $128.5 million of secured debt throughout 2001.

                  Interest expense on the Partnership’s $500 million unsecured line of credit decreased by approximately $1.1 million in 2002 compared to 2001 as the Partnership maintained lower balances on the line throughout most of 2002.

 

Service Operations

Service Operations primarily consist of leasing, management, construction and development services for joint venture properties and properties owned by third parties. Service Operations revenues decreased from $80.5 million for the year ended December 31, 2001, to $67.9 million for the year ended December 31, 2002. The prolonged effect of the slow economy has been the primary factor in the overall decrease in revenues. The Partnership experienced a decrease of $12.7 million in net general contractor revenues because of a decrease in the volume of construction in 2002, compared to 2001, as well as slightly lower profit margins.

 

Property management, maintenance and leasing fee revenues decreased from $22.8 million in 2001 to $14.3 million in 2002 primarily because of a decrease in landscaping maintenance revenue resulting from the sale of the landscaping operations in the third quarter of 2001.

 

Construction management and development activity income represents construction and development fees earned on projects where the Partnership acts as the construction manager along with profits from the Partnership’s held-for-sale program under which the Partnership develops a property for sale upon completion. The increase in revenues of $10.3 million was 2002 is primarily due to an increase in volume of the sale of properties from the held-for-sale program.

 

Service Operations expenses decreased from $45.3 million in 2001 to $38.3 million in 2002. The decrease was attributable to the decrease in construction and development activity and the reduced overhead costs as a result of the sale of the landscape business in 2001.

 

General and Administrative Expense

General and Administrative Expense increased from $15.5 million in 2001 to $24.7 million for the year ended December 31, 2002. The Partnership was successful in reducing total operating and administration

 

19



 

costs; however, reduced construction and development activities resulted in a greater amount of overhead being charged to general and administrative expense instead of being capitalized into development projects or charged to Service Operations.

 

Other Income and Expenses

Gain on sale of land and depreciable property dispositions, net of impairment adjustment, was comprised of the following amounts in 2002 and 2001:

 

 

 

2002

 

2001

 

 

 

 

 

 

 

Gain on sales of depreciable properties

 

$

4,491

 

$

45,428

 

Gain on land sales

 

4,478

 

5,080

 

Impairment adjustment

 

(6,629

)

(4,800

)

 

 

 

 

 

 

Total

 

$

2,430

 

$

45,708

 

 

Gain on sales of depreciable properties represent sales of previously held for investment rental properties. Beginning in 2000 and continuing into 2001, the Partnership pursued favorable opportunities to dispose of real estate assets that no longer met long-term investment objectives. In 2002, the Partnership significantly reduced the amount of its property sales.

 

Gain on land sales represents sales of undeveloped land owned by the Partnership. The Partnership pursues opportunities to dispose of land in markets with a high concentration of undeveloped land and those markets where the land no longer meets strategic development plans of the Partnership.

 

Other revenue for the year ended December 31, 2002, includes $1.4 million of gain related to an interest rate swap that did not qualify for hedge accounting.

 

Restatement of Net Income

 

In July of 2003, the SEC issued a Staff Policy Statement that clarified the application of FASB-EITF Topic D-42 (Topic D-42), “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Equity.” Under Topic D-42, the difference between the amounts paid to the holders of preferred equity upon redemption and the carrying amount of the preferred equity on the issuer’s balance sheet must be subtracted from net income when computing earnings per share. The Staff Policy Statement clarified that, in computing the reduction in net income, the carrying amount of the preferred equity should be reduced by the issuance costs of the preferred equity. As a result of this clarification, the Partnership’s net income per unit was restated for 2002 and 2001. The impact of this restatement is summarized as follows:

 

 

 

Twelve Months Ended December 31,

 

 

 

2002

 

2001

 

Net income available for common unitholders:

 

 

 

 

 

Prior to Topic D-42

 

179,746

 

$

262,430

 

Post adoption of Topic D-42

 

171,601

 

$

259,892

 

 

 

 

 

 

 

Basic net income per common unit:

 

 

 

 

 

Prior to Topic D-42

 

$

1.20

 

$

1.77

 

Post adoption of Topic D-42

 

$

1.15

 

$

1.76

 

 

 

 

 

 

 

Diluted net income per common unit:

 

 

 

 

 

Prior to Topic D-42

 

$

1.19

 

$

1.75

 

Post adoption of Topic D-42

 

$

1.14

 

$

1.74

 

 

Critical Accounting Policies

 

The preparation of the Partnership’s consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. The Partnership’s estimates, judgments and assumptions are continually evaluated based upon available information and experience. Note 1 to the Consolidated Financial Statements includes further discussion of the Partnership’s significant accounting policies.

 

20



 

The Partnership’s management has assessed the accounting policies used in the preparation of its financial statements and discussed them with the General Partner’s Audit Committee and independent auditors. The following accounting policies are considered critical based upon materiality to the financial statements, degree of judgment involved in estimating reported amounts and sensitivity to changes in industry and economic conditions:

 

Accounting for Joint Ventures: The Partnership has equity interests ranging from 10-95% in joint ventures that own and operate rental properties and hold land for development. The Partnership consolidates those joint ventures that it controls through majority ownership interests or substantial participating rights. Control is further demonstrated by the ability of the general partner to manage day-to-day operations, refinance debt and sell the assets of the joint venture without the consent of the limited partner and inability of the limited partner to replace the general partner. The Partnership uses the equity method of accounting for those joint ventures where the Partnership does not have control over operating and financial polices. Under the equity method of accounting, the assets and liabilities of joint ventures for which the Partnership uses the equity method are not included on the Partnership’s balance sheet.

 

Cost Capitalization: Direct and certain indirect costs, including interest, clearly associated with the development, construction, leasing or expansion of real estate investments are capitalized as a cost of the property. The following discusses the significant categories of costs incurred by the Partnership:

 

Within the Rental Operations of the Partnership, direct and indirect costs are capitalized under the guidelines of SFAS 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects (“SFAS 67”), and interest costs are capitalized under the guidelines of SFAS 34, “Capitalization of Interest Cost” (“SFAS 34”). The Partnership capitalizes these project costs associated with the initial construction of a property up to the time the property is substantially complete and ready for its intended use. The Partnership believes the completion of the building shell is the proper basis for determining substantial completion and that this basis is the most widely accepted standard in the real estate industry. The interest rate used to capitalize costs is based upon the Partnership’s average borrowing rate on existing debt.

 

In addition, the Partnership capitalizes costs, including interest costs, on vacant space during extended lease-up periods after construction of the building shell has been completed if costs are being incurred to ready the vacant space for its intended use. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once necessary work has been completed on a vacant space, project costs are no longer capitalized. The Partnership ceases capitalization of all project costs on extended lease-up periods after the shorter of a one-year period after the completion of the building shell or when the property attains a 90% occupancy. The Partnership follows guidelines in SFAS 34 and SFAS

67 in determining the capitalization of project costs during the lease-up period of a property and believes that this treatment is consistent with real estate industry standards for project cost capitalization.

 

All direct construction and development costs associated with the development of a new property are capitalized. In addition, all leasing commissions paid to third parties for new leases or lease renewals are capitalized. A portion of the Partnership’s indirect costs associated with its construction/ development and leasing efforts are capitalized. In assessing the amount of indirect costs to be capitalized, the Partnership first allocates payroll costs, on a department-by-department basis, among activities for which capitalization is warranted (i.e., construction, development and leasing) and those for which capitalization is not warranted (e.g., property management, maintenance, acquisitions and dispositions and general corporate functions). To the extent the employees of a department split their time between capitalizable and non-capitalizable activities, the allocations are made based on estimates of the actual amount of time spent in each activity. Once the payroll costs are allocated, the non-payroll costs of each department are allocated among the capitalizable and non-capitalizable activities in the same proportion as payroll costs. The capitalized cost pool does not include any costs allocable to its executive officers.

 

To ensure that an appropriate amount of costs are capitalized, the amount of capitalized costs that are allocated to a specific project are limited to amounts using standards developed by the Partnership. These standards consist of a percentage of the total development costs of a project and a percentage of the total gross lease

 

21



 

amount payable under a specific lease. These standards are derived after considering both the amount of costs that would need to be paid by the Partnership if the services were performed by third parties, and the amounts that would be allocated if the personnel in the departments were working at full capacity. The use of these standards ensures that overhead costs attributable to downtime or to unsuccessful projects or leasing activities are not capitalized by the Partnership.

 

Impairment of Real Estate Investments: The Partnership evaluates its real estate investments upon occurrence of significant changes in the operations, but not less than annually, to assess whether any impairment indications are present that affect the recovery of the recorded value. If any real estate investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated fair value. The Partnership utilizes the guidelines established under SFAS 144 to determine if impairment conditions exist. Under SFAS 144, the Partnership reviews the expected undiscounted cash flows of each property in its held for rental portfolio to determine if there are any indications of impairment of a property. The review of anticipated cash flows involves subjective assumptions of estimated occupancy and rental rates and ultimate residual value. In addition to reviewing anticipated cash flows, the Partnership assesses other factors such as changes in business climate and legal factors that may affect the ultimate value of the property. These assumptions are subjective and the anticipated cash flows may not ultimately be achieved.

 

Real estate assets to be disposed of are reported at the lower of their carrying value amount or the fair value less estimated cost to sell.

 

Acquisition of Real Estate Property. The Partnership treats each material property acquisition as a “business” within the scope of SFAS 141. In accordance with that statement, the Partnership allocates the purchase price of acquired properties to net tangible and identified intangible assets based on their respective fair value.

 

The allocation to tangible assets (building and land) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models similar to those used by independent appraisers. Factors considered by management include an estimate of carrying costs during the expected lease-up periods considering current market conditions, and costs to execute similar leases. The remaining purchase price is allocated among three categories of intangible assets consisting of the above or below market component of in–place leases, the value of in-place leases and the value of customer relationships.

 

                  The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using an interest rate which reflects the risks associated with the lease) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using current fair market rates over the remaining term of the lease. The amounts allocated to above or below market leases are included in deferred leasing and other costs in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.

                  The total amount of intangible assets is further allocated to in-place lease values and to customer relationship values, based upon management’s assessment of their respective values. These intangible assets are included in deferred leasing and other costs in the balance sheet and are depreciated over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable.

 

Valuation of Receivables: The Partnership is subject to tenant defaults and bankruptcies that could affect the collection of outstanding receivables. In order to mitigate these risks, the Partnership performs in-house credit review and analysis on major existing tenants and all significant leases before they are executed. The Partnership has established the following procedures and policies to evaluate the collectibility of outstanding receivables and record allowances:

 

                  The Partnership maintains a tenant “watch list” containing a list of significant tenants for which the payment of receivables and future rent may be at risk. Various factors such as late rent payments, lease or debt instrument defaults, and indications of a deteriorating financial position are considered when determining whether to include a tenant on the watch list.

 

22



 

                  As a matter of policy, the Partnership reserves the entire receivable balance, including straight-line rent, of any tenant with an amount outstanding over 90 days.

                  Straight-line rent receivables for any tenant on the watch list or any other tenant identified as a potential long-term risk, regardless of the status of rent receivables, are reviewed and reserved as necessary. In addition, a general reserve for straight-line rent receivables is provided in an amount equal to 1% to 2% of the outstanding balance.

 

Revenue Recognition on Construction Contracts: The Partnership recognizes income on construction contracts where the Partnership serves as a general contractor on the percentage of completion method. Using this method, profits are recorded on the basis of the Partnership’s estimates of the overall profit and percentage of completion of individual contracts. A portion of the estimated profits is accrued based upon the Partnership’s estimates of the percentage of completion of the construction contract. Cumulative revenues recognized may be less or greater than cumulative costs and profits billed at any point in time during a contract’s term. This revenue recognition method involves inherent risks relating to profit and cost estimates with those risks reduced through approval and monitoring processes.

 

With regards to critical accounting policies, management has discussed the following with the Audit Committee of the General Partner’s Board of Directors:

 

                  Criteria for identifying and selecting;

                  Methodology in applying; and

                  Impact on the financial statements.

 

The Audit Committee of the General Partner has reviewed the critical accounting policies identified by the Partnership.

 

Liquidity and Capital Resources

 

Sources of Liquidity

 

The Partnership expects to meet its liquidity requirements over the next twelve months, including payments of distributions to unitholders as well as recurring capital expenditures relating to maintaining the Partnership’s current real estate assets, primarily through the following:

 

                  working capital; and

      net cash provided by operating activities

 

Although the Partnership historically has not used any other sources of funds to pay for recurring capital expenditures on its current real estate investments, the use of borrowings or property disposition proceeds may be needed to fund such expenditures during periods of high leasing volume. This situation could arise in 2004 if the Partnership experiences a significant increase in its occupancy.

 

The Partnership expects to meet its long-term liquidity requirements, such as scheduled mortgage debt maturities, preferred equity redemptions, the retirement of unsecured notes and amounts outstanding under the unsecured credit facility, property acquisitions, financing of development activities and other non-recurring capital improvements, primarily from the following sources:

 

      issuance of additional unsecured notes;

      issuance of additional General Partner preferred equity;

      undistributed cash provided by operating activities, if any; and

      proceeds received from real estate dispositions.

 

Rental Operations

The Partnership believes that its principal source of liquidity, cash flows from Rental Operations, provides a stable source of cash to fund operational expenses. The Partnership believes that this cash-based revenue stream is substantially aligned with revenue recognition (except for periodic straight-line rental income

 

23



 

accruals) as cash receipts from the leasing of rental properties are generally received in advance of or in a short time following the actual revenue recognition. The Partnership is subject to risks of decreased occupancy through market conditions as well as tenant defaults and bankruptcies, and potential reduction in rental rates upon renewal or re-letting of properties, which would result in reduced cash flow from operations. However, management believes that these risks are mitigated by the Partnership’s strong market presence in most of its locations and the fact that the Partnership performs in-house credit review and analysis on major tenants and all significant leases before they are executed.

 

Credit Facilities

The Partnership had the following line of credit available (in thousands):

 

Description

 

Borrowing
Capacity

 

Maturity
Date

 

Interest
Rate

 

Amount
Outstanding
at December
31, 2003

 

Unsecured Line of Credit

 

$

500,000

 

February 2004

 

LIBOR + .65%

 

$

351,000

 

 

The line of credit is used to fund development activities to acquire additional rental properties and to provide working capital.

 

In January 2004, the Partnership renewed the unsecured line of credit, extending the maturity date to January 2007 and lowering the interest rate from LIBOR + .65% to LIBOR + .60%.

 

The line of credit contains financial covenants that require the Partnership to meet defined levels of performance. As of December 31, 2003, the Partnership is in compliance with all such covenants and expects to remain in compliance for the foreseeable future.

 

Debt and Equity Securities

The Partnership currently has on file with the SEC an effective shelf registration statement that permits the Partnership to sell up to an additional $670 million of unsecured debt securities as of December 31, 2003.  In addition, the General Partner has on file with the SEC an effective shelf registration statement that permits the General Partner to sell up to an additional $400.7 million of common and preferred stock as of December 31, 2003. From time-to-time, the Partnership and the General Partner expect to issue additional securities under these registration statements to fund development and acquisition of additional rental properties and to fund the repayment of the credit facilities and other long-term debt upon maturity.

 

The indenture governing the Partnership’s unsecured notes also requires the Partnership to comply with financial ratios and other covenants regarding the operations of the Partnership. The Partnership is currently in compliance with all such covenants and expects to remain in compliance for the foreseeable future.

 

In January 2004, the Partnership completed a $125 million unsecured debt offering at an effective interest rate of 3.4%, due January 2008.

 

Sale of Real Estate Assets

The Partnership utilizes sales of real estate assets as an additional source of liquidity. During 2000 and 2001, the Partnership engaged in a capital-recycling program that resulted in sales of over $1 billion of real estate assets. In 2002 and 2003, volume was substantially reduced as capital needs were met through other sources and the slower business climate provided fewer opportunities to profitably reinvest sale proceeds. The Partnership continues to pursue opportunities to sell real estate assets when beneficial to the long-term strategy of the Partnership.

 

Uses of Liquidity

 

The Partnership’s principal uses of liquidity include the following:

 

                  Property investments;

                  Recurring leasing/capital costs;

 

24



 

                  Distributions to unitholders;

      Long-term debt maturities; and

      Other contractual obligations.

 

Property Investments

The Partnership evaluates development and acquisition opportunities based upon market outlook, supply, and long-term growth potential.

 

Recurring expenditures

A summary of the Partnership’s recurring capital expenditures is as follows for the year ended December 31,  (in thousands):

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Tenant improvements

 

$

35,972

 

$

28,011

 

$

18,416

 

Leasing costs

 

20,932

 

17,975

 

13,845

 

Building improvements

 

19,544

 

13,373

 

10,873

 

Totals

 

$

76,448

 

$

59,359

 

$

43,134

 

 

Dividends and Distributions

In order to qualify as a REIT for federal income tax purposes, the General Partner must currently distribute at least 90% of its taxable income to its shareholders. The Partnership paid distributions per Common Unit of $1.83, $1.81 and $1.76 for the years ended December 31, 2003, 2002 and 2001, respectively. The Partnership expects to continue to distribute taxable earnings at least to the extent necessary for the General Partner to maintain its REIT status. However, distributions are declared at the discretion of the General Partner’s Board of Directors and are subject to actual cash available for distribution, the Partnership’s financial condition, capital requirements and such other factors as the General Partner’s Board of Directors deems relevant.

 

Debt Maturities

Debt outstanding at December 31, 2003, totaled $2.3 billion with a weighted average interest rate of 5.65% maturing at various dates through 2028. The Partnership had $2.1 billion of unsecured debt and $208.6 million of secured debt outstanding at December 31, 2003. Scheduled principal amortization of such debt totaled $9.0 million for the year ended December 31, 2003.

 

Following is a summary of the scheduled future amortization and maturities of the Partnership’s indebtedness at December 31, 2003, including the $351 million outstanding on the unsecured line of credit in 2007 maturities to reflect the January 2004 renewal (in thousands):

 

 

 

Future Repayments

 

 

 

Weighted Average

 

Year

 

Scheduled
Amortization

 

Maturities

 

Total

 

Interest Rate of
Future Repayments

 

 

 

 

 

 

 

 

 

 

 

2004

 

$

8,064

 

$

166,834

 

$

174,898

 

7.37

%

2005

 

7,749

 

205,980

 

213,729

 

7.21

%

2006

 

7,326

 

180,186

 

187,512

 

6.00

%

2007

 

5,842

 

565,615

 

571,457

 

3.21

%

2008

 

4,922

 

134,028

 

138,950

 

6.31

%

2009

 

4,694

 

275,000

 

279,694

 

7.38

%

2010

 

4,076

 

175,000

 

179,076

 

5.38

%

2011

 

3,334

 

175,000

 

178,334

 

6.94

%

2012

 

1,944

 

200,000

 

201,944

 

5.85

%

2013

 

1,581

 

150,000

 

151,581

 

4.62

%

Thereafter

 

8,361

 

50,000

 

58,361

 

6.64

%

 

 

$

57,893

 

$

2,277,643

 

$

2,335,536

 

5.65

%

 

Historical Cash Flows

 

A comparison of the Partnership’s historical cash flows for 2003, 2002 and 2001 is as follows (in millions):

 

25



 

 

 

Years Ended December 31,

 

 

 

2003

 

2002

 

2001

 

Net cash provided by Operating Activities

 

$

368.1

 

$

569.0

 

$

348.7

 

 

 

 

 

 

 

 

 

Net Cash Provided (Used) by Investing Activities

 

(319.6

)

(337.2

)

93.5

 

 

 

 

 

 

 

 

 

Net Cash Used for Financing Activities

 

(52.9

)

(225.1

)

(470.9

)

 

Operating Activities

Cash flows from operating activities provide the cash necessary to meet normal, operational requirements.  The receipt of rental income from Rental Operations continues to provide the primary source of revenues and operating cash flows for the Partnership. However, in 2002, as explained in more detail below, the Partnership had a large number of sales of buildings developed with the intent to sell, resulting in a significant source of operational cash flows and revenues in 2002 compared to 2001 and 2003. While the Partnership continues to pursue these opportunities, revenues from rental operations will continue to be the primary source of revenue of the Partnership. Management continues to focus on increasing occupancy as its primary objective for 2004.

 

                  The Partnership sold eight build-for-sale properties in 2002 generating sales proceeds of $196.9 million. In contrast, four properties were sold in 2003 with gross proceeds of $50.1 million, and eleven properties were sold in 2001 with gross proceeds of $102.2 million.

                  The Partnership has a backlog of build-for-sale buildings as of December 31, 2003, with projected project costs of $65.8 million that it anticipates selling throughout 2004.

 

Investing Activities

Investing activities are one of the primary uses of the Partnership’s liquidity. Development and acquisition activity is necessary to generate additional rental revenues and provide cash flows for operational requirements. Highlights of significant cash uses are as follows:

 

                  Development costs decreased from $251.4 million in 2001 and $158.1 million in 2002 to $129.2 million in 2003. This trend is reflective of the weakened economy and excess supply over demand in many of the Partnership’s markets. New developments, particularly speculative office, have been limited by management in an effort to focus on lease-ups of existing properties in most markets.

                  Acquisitions of real estate have increased significantly since 2001 as the Partnership continues to view acquisitions in current markets as sources for growth opportunities.

                  Recurring costs for tenant improvements, lease commissions and building improvements have also continued to increase over the past three years in direct relation to the re-leasing of vacant space. As occupancy fell to a low in 2001, management focused its attention over the past two years on improving and re-letting its existing spaces. Towards the latter half of 2003, occupancy improved in the Partnership’s in-service portfolio. Management anticipates these costs to remain high in 2004 as occupancy trends upward, but occupancy trends are not predictable.

                  Proceeds from property sales increased in 2003 over 2002 as the Partnership again looked to dispose of non-strategic assets. The Partnership experienced significant sales in 2000 and 2001 as efforts were made to de-leverage the balance sheet in anticipation of a slowed economy in 2001 and 2002. This strategy has created a low debt to market capitalization for the Partnership as of the end of 2003. Sales of property will continue to be utilized as part of the Partnership’s capital recycling program to fund acquisitions and new development.

 

Financing Activities

The Partnership increased its borrowings under both its unsecured line of credit and in the public debt markets as a source of capital over the past two years. In order to enhance its flexibility with respect to its properties, the Partnership has continued to replace secured debt with unsecured debt. The low leverage resulting from the large volume of property dispositions in 2000 and 2001 provided the Partnership with the opportunity to borrow funds at very attractive rates. Highlights of significant financing activities are as follows:

 

26



 

                  The Partnership received $425.0 million in proceeds from unsecured debt offerings in 2003 and repaid $135.5 million of secured debt in accordance with the strategy outlined above. The Partnership has obtained very low coupon rates on its newly issued debt and has staggered the maturity dates over the next 10 years, with no single year having disproportionate maturities.

                  Borrowings on the unsecured line of credit have increased since 2001 as the Partnership has taken advantage of lower interest rates and excess capacity to fund development, acquisition and working capital needs. The Partnership renewed its unsecured line in January 2004, extending the due date to 2007 and lowering the interest rate from LIBOR + .65% to LIBOR + .60%.

 

Credit Ratings

 

The General Partner and the Partnership are currently assigned investment grade corporate credit ratings on its senior unsecured notes from Fitch Ratings, Moody’s Investor Service and Standard and Poor’s Ratings Group. Currently, Fitch and Standard and Poor’s have assigned a rating of BBB+ and Moody’s Investors has assigned a rating of Baa1 to the senior notes. These ratings could change based upon, among other things, the Partnership’s results of operations and financial condition.

 

The General Partner and the Partnership also have received investment grade credit ratings from the same rating agencies on its preferred stock.  Fitch and Standard and Poor’s have assigned a Preferred Stock rating of BBB and Moody’s Investors has assigned a Preferred Stock rating of Baa2. These ratings could change based upon, among other things, the Partnership’s results of operations and financial condition.

 

Financial Instruments

 

In December 2002, the Partnership simultaneously entered into two $50 million forward-starting interest rate swaps as a hedge to effectively fix the rate on unsecured debt financings expected in 2003. The fair value of the swaps was a liability of $2.1 million as of December 31, 2002, and was recorded in other liabilities in the accompanying balance sheet.

 

In February 2003, the Partnership simultaneously entered into two additional $25 million forward-starting interest rate swaps as a hedge to effectively fix the rate on unsecured debt financings expected in 2003. All four swaps qualified for hedge accounting under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (“SFAS 133”); therefore, changes in fair value were recorded in other comprehensive income.

 

In July 2003, the Partnership terminated the swaps for a net gain of $643,000, which is included in other revenue in the Statements of Operations. The swaps were terminated because the Partnership’s capital needs were met through the issuance of the General Partner’s Series J Preferred Stock in lieu of the previously contemplated issuance of debt. The proceeds of the Series J Preferred Stock were contributed to the Partnership.

 

In July 2001, the Partnership terminated three interest rate swaps that were tied to an $85 million unsecured term loan. The swaps qualified for hedge accounting under SFAS 133. The cost to terminate the swaps was $548,000, which was recorded as interest expense.

 

In May 2003, the FASB issued Statement No. 150 Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). SFAS 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS 150 is effective for all financial instruments created or modified after May 31, 2003, and otherwise is effective July 1, 2003. The Partnership includes the operations of five joint ventures in its consolidated financial statements. These joint ventures are partially owned by unaffiliated parties that have noncontrolling interests. SFAS 150 requires the disclosure of the estimated settlement value of these noncontrolling interests. As of December 31, 2003, the estimated settlement value of these noncontrolling interests was approximately $4.3 million as compared to the minority interest liability recorded on the Partnership’s books for these joint ventures of $1.2 million.

 

27



 

Off Balance Sheet Arrangements

 

Investments in Unconsolidated Companies

The Partnership has equity interests ranging from 10 – 64% in unconsolidated joint ventures that own and operate rental properties and hold land for development. The equity method of accounting is used for these investments in which the Partnership has the ability to exercise significant influence, but not control, over operating and financial policies. As a result, the assets and liabilities of these joint ventures are not included on the Partnership’s balance sheet.

 

The Partnership’s investment in unconsolidated companies represents less than 6% of the Partnership’s total assets as of December 31, 2003. These investments provide several benefits to the Partnership including increased market share, tenant and property diversification and an additional source of capital to fund real estate projects.

 

The following tables presents summarized financial information for the unconsolidated companies for the years ended December 31, 2003 and 2002 (in thousands, except percentages):

 

 

 

Dugan
Realty, LLC

 

Dugan
Texas, LLC

 

Dugan
Office, LLC

 

Other Industrial
and Office
Joint Ventures

 

Total

 

 

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

2003

 

2002

 

Land, buildings and tenant improvements, net

 

$

727,411

 

$

739,372

 

$

209,602

 

$

214,796

 

$

91,170

 

$

94,718

 

$

145,049

 

$

183,140

 

$

1,173,232

 

$

1,232,026

 

Land held for development

 

17,663

 

18,763

 

12,710

 

9,148

 

4,293

 

4,294

 

16,662

 

6,643

 

51,328

 

38,848

 

Other assets

 

29,213

 

26,372

 

16,535

 

17,427

 

2,934

 

4,654

 

13,514

 

19,137

 

62,196

 

67,590

 

 

 

$

774,287

 

$

784,507

 

$

238,847

 

$

241,371

 

$

98,397

 

$

103,666

 

$

175,225

 

$

208,920

 

$

1,286,756

 

$

1,338,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property indebtedness

 

$

409,349

 

$

408,305

 

$

16,035

 

$

17,200

 

$

69,160

 

$

69,936

 

$

83,188

 

$

84,452

 

$

577,732

 

$

579,893

 

Other liabilities

 

18,232

 

17,533

 

9,342

 

7,851

 

3,460

 

3,790

 

10,657

 

22,883

 

41,691

 

52,057

 

 

 

427,581

 

425,838

 

25,377

 

25,051

 

72,620

 

73,726

 

93,845

 

107,335

 

619,423

 

631,950

 

Owner’s equity

 

346,706

 

358,669

 

213,470

 

216,320

 

25,777

 

29,940

 

81,380

 

101,585

 

667,333

 

706,514

 

 

 

$

774,287

 

$

784,507

 

$

238,847

 

$

241,371

 

$

98,397

 

$

103,666

 

$

175,225

 

$

208,920

 

$

1,286,756

 

$

1,338,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

97,150

 

$

94,176

 

$

28,248

 

$

26,636

 

$

18,202

 

$

17,280

 

$

26,627

 

$

31,591

 

$

170,227

 

$

169,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

23,397

 

$

28,164

 

$

12,688

 

$

13,308

 

$

1.536

 

$

1,660

 

$

3,444

 

$

7,881

 

$

41,065

 

$

51,013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total square feet

 

22,761

 

22,757

 

5,808

 

5,878

 

652

 

648

 

4,465

 

5,452

 

33,686

 

34,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent leased

 

94.8

%

94.1

%

95.0

%

95.3

%

87.4

%

95.3

%

89.4

%

87.2

%

94.0

%

93.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company ownership percentage

 

50.0

%

50.0

%

50.0

%

50.0

%

50.0

%

50.0

%

10.0% - 64.0

%

10.0%- 64.0

%

 

 

 

 

 

Off Balance Sheet Arrangements

The Partnership does not have any relationships with unconsolidated entities or financial partnerships, such as “special purpose entities,” which are generally established for the purpose of facilitating off-balance sheet arrangements or other specific purposes.

 

Contractual Obligations

As of December 31, 2003, the Partnership is subject to certain contractual payment obligations as described in the schedule below (in thousands):

 

 

 

Payments due by Period

 

Contractual Obligations

 

Total

 

2004

 

2005

 

2006

 

2007

 

2008

 

Thereafter

 

Long-term debt (1)

 

$

1,984,536

 

$

174,898

 

$

213,729

 

$

187,512

 

$

220,458

 

$

138,950

 

$

1,048,989

 

Line of credit (2)

 

351,000

 

 

 

 

351,000

 

 

 

Share of mortgage debt of unconsolidated joint ventures (3)

 

278,732

 

29,246

 

65,214

 

5,627

 

45,920

 

985

 

131,740

 

Capital leases

 

2,003

 

501

 

501

 

501

 

500

 

 

 

Ground leases

 

5,657

 

344

 

344

 

355

 

359

 

359

 

3,896

 

Development and construction backlog costs (4)

 

196,553

 

196,553

 

 

 

 

 

 

Future land acquisitions (5)

 

13,816

 

13,816

 

 

 

 

 

 

Other (6)

 

5,531

 

996

 

943

 

713

 

540

 

327

 

2,012

 

Total Contractual Obligations

 

$

2,837,828

 

$

416,354

 

$

280,731

 

$

194,708

 

$

618,777

 

$

140,621

 

$

1,186,637

 

 


(1)          This long term debt consists of both secured and unsecured debt.

(2)          In January 2004, the maturity of the Partnership’s line-of-credit was extended to 2007.

(3)          The Partnership has guaranteed $92.0 million of the total $278.7 million Partnership share of unconsolidated joint venture debt.

(4)          Estimated remaining costs on the completion of held-for-rental, held-for-sale and third-party construction projects.

(5)          These land acquisitions are subject to the completion of due diligence requirements, resolution of certain contingencies and completion of customary closing conditions. If the Partnership were to terminate these contracts, the Partnership would forfeit its total escrow amount of $100,000 and would have no further contractual obligations.

(6)          This amount consists of operating leases and infrastructure development commitments.

 

28



 

Related Party Transactions

 

The Partnership provides property management, leasing, construction and other tenant related services to properties in which certain executives have ownership interests. The Partnership had an option to acquire the executive officers’ interests in these properties. Two of these properties, the Bank One Towers office buildings in Cincinnati, Ohio, were acquired in August 2003 at a price of $45.5 million. The terms of this acquisition were reviewed and approved by the independent members of the General Partner’s Board of Directors. The options on the remaining properties expired in October 2003, as the independent members of the General Partner’s Board of Directors determined that it was not in the best interests of the Partnership to exercise the options.

 

The Partnership received fees totaling $1.2 million, $1.4 million and $1.7 million in 2003, 2002 and 2001, respectively, for services provided to these properties. The fees charged by the Partnership for such services are equivalent to those charged to third-party owners for similar services.

 

The Partnership provides property management, leasing, construction and other tenant related services to unconsolidated companies in which the Partnership has equity interests. For the years ended December 31, 2003, 2002 and 2001, respectively, the Partnership received management fees of $4.9 million, $4.9 million and $4.7 million, leasing fees of $2.3 million, $2.5 million and $2.8 million and construction and development fees of $1.4 million, $4.5 million and $5.2 million from these unconsolidated companies. These fees were charged at market rates and the Partnership eliminates its ownership percentage of these fees in the consolidated financials.

 

In 2002, the Partnership received lease termination fees totaling $7.7 million from a tenant that is a subsidiary of Progress Energy, Inc. William Cavanaugh III is President and Chief Executive Officer of Progress Energy, Inc. and a member of the General Partner’s Board of Directors. The General Partner’s independent directors approved the transaction and management believes that the amount received approximates a value that would have been charged to tenants with similar lease terms and commitments.

 

The Partnership has other related party transactions that are insignificant and are at terms that management considers to be arm’s-length and equal to those negotiated with independent parties.

 

Commitments and Contingencies

 

The Partnership has the following commitments and contingencies in addition to those previously disclosed:

 

In 1998 and 1999, certain members of management and the General Partner’s Board of Directors purchased $69 million of common stock in connection with an Executive and Senior Officer Stock Purchase Plan. The purchases were financed by five-year personal loans from financial institutions. As of December 31, 2003, the outstanding balance on these loans was $11.7 million as some participants have exited the program and repaid their principal balance. These loans were secured by common shares with a fair market value of $18.2 million purchased through this program and owned by the remaining plan participants at December 31, 2003. As a condition of the financing agreement with the financial institution, the Partnership guaranteed the repayment of principal, interest and other obligations for each participant, but is fully indemnified by the participants. In the opinion of management, it is not probable that the Partnership will be required to satisfy these guarantees.

 

In October 2000, the Partnership sold or contributed industrial properties and undeveloped land with a fair value of $487 million to a joint venture (Dugan Realty LLC) in which the Partnership has a 50% interest and recognized a net gain of $35.2 million. This transaction expanded an existing joint venture with an institutional real estate investor. As a result of the total transactions, the Partnership received $363.9 million of proceeds. The joint venture partially financed this transaction with $350 million of secured mortgage debt, the repayment of which was directly or indirectly guaranteed by the Partnership. The guarantee associated with $260 million of such debt expired in December 2003 without the Partnership being required to satisfy the guarantee. The remaining $90 million of such debt is still guaranteed by the Partnership. In connection with this transaction, the joint venture partners were given an option to put up to a $50 million interest in the joint venture to the Partnership in exchange for common stock of the Partnership or cash (at

 

29



 

the option of the Partnership), subject to certain timing and other restrictions. As a result of this put option, the Partnership deferred $10.2 million of gain on sale of depreciated property and recorded a $50 million liability.

 

The Partnership has guaranteed the repayment of $3.5 million of economic development bonds issued by the City of Carmel, Indiana. The Partnership will be required to make payments under its guarantee to the extent that incremental taxes from one of its office park developments are not sufficient to pay the bond debt service. Management does not believe that it is probable that the Partnership will be required to make any significant payments in satisfaction of this guarantee.

 

The Partnership has also guaranteed the repayment of a $2 million mortgage loan encumbering the real estate of one its unconsolidated joint ventures. Management believes that the value of the real estate exceeds the loan balance and that the Partnership will not be required to satisfy this guarantee.

 

The Partnership has entered into agreements, subject to the completion of due diligence requirements, resolution of certain contingencies and completion of customary closing conditions, for the future acquisition of land totaling $13.8 million. The acquisitions are scheduled to close periodically through 2004 and will be paid for by cash.

 

The Partnership renewed all of its major insurance policies in 2003. These policies include coverage for acts of terrorism for its properties. The Partnership believes that this insurance provides adequate coverage against normal insurance risks and that any loss experienced would not have a significant impact on the Partnership’s liquidity, financial position, or results of operations.

 

Broadband Office, Inc. and Official Committee of Unsecured Creditors of Broadband Office, Inc. recently filed a complaint against a group of real estate investment trusts and real estate operating companies and certain affiliated entities and individuals in connection with the formation and management of Broadband Office. Among the defendants are the General Partner, the Partnership and Mr. Dennis Oklak, one of the General Partner’s executive officers. The complaint alleges various breaches of purported fiduciary duties by the defendants, seeks recharacterization or equitable subordination of debt, seeks recovery of alleged avoidable transfers, appears to seek to hold them liable for, among other things, the debt of Broadband Office under alter-ego, veil-piercing and partnership theories, and seeks other relief under other theories. The complaint seeks aggregate damages in excess of $300 million from all of the defendants. The Partnership believes that it has meritorious defenses to the plaintiff’s allegations and intends to vigorously defend this litigation. Due to the inherent uncertainties of the litigation process and the judicial system, the Partnership is not able to predict the outcome of this litigation. If this litigation is not resolved in the Partnership’s favor, it could have a material adverse effect on its business, financial condition and results of operations.

 

The Partnership is subject to various legal proceedings and claims that arise in the ordinary course of business.  In the opinion of management, the amount of any ultimate liability with respect to these actions will not materially affect the Partnership’s consolidated financial statements or results of operations.

 

Recent Accounting Pronouncements

 

In January 2003, FASB issued Interpretation 46, Consolidation of Variable Interest Entities (“Interpretation 46”), which addresses the consolidation of certain entities in which a company has a controlling financial interest through means other than voting rights. This interpretation was revised in December 2003.  For calendar year companies, Interpretation 46 contains an effective date of December 31, 2003 for special purpose entities and periods ending after March 15, 2004 for all other entities. The Partnership does not own interests in special purpose entities and management does not believe that the adoption of Interpretation 46 will have a material impact on the Partnership’s financial statements.

 

Item 7A.  Quantitative and Qualitative Disclosure About Market Risks

 

The Partnership is exposed to interest rate changes primarily as a result of its line of credit and long-term debt borrowings. The Partnership’s interest rate risk management objective is to limit the impact of interest rate

 

30



 

changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives the Partnership borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Partnership does not enter into derivative or interest rate transactions for speculative purposes.

 

The Partnership’s interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts (in thousands) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period, fair values and other terms required to evaluate the expected cash flows and sensitivity to interest rate changes.

 

 

 

2004

 

2005

 

2006

 

2007

 

2008

 

Thereafter

 

Total

 

Fair
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed rate secured debt

 

$

23,924

 

$

12,760

 

$

46,491

 

$

19,490

 

$

38,094

 

$

12,701

 

$

153,460

 

$

167,586

 

Weighted average interest rate

 

7.97

%

7.03

%

7.21

%

7.65

%

5.25

%

7.86

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Variable rate Treasury based secured debt

 

$

711

 

$

741

 

$

40,781

 

$

811

 

$

856

 

$

11,289

 

$

55,189

 

$

55,189

 

Weighted average interest rate

 

1.18

%

1.18

%

2.89

%

1.17

%

1.16

%

1.09

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured notes

 

$

150,264

 

$

200,227

 

$

100,240

 

$

200,156

 

$

100,000

 

$

1,025,000

 

$

1,775,887

 

$

1,943,222

 

Weighted average interest rate

 

7.30

%

7.24

%

6.72

%

5.31

%

6.76

%

6.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured line of credit

 

$

 

$

 

$

 

$

351,000

 

$

 

$

 

$

351,000

 

$

351,000

 

Weighted average interest rate

 

N/A

 

N/A

 

N/A

 

1.77

%

N/A

 

N/A

 

 

 

 

 

 

As the table incorporates only those exposures that exist as of December 31, 2003, it does not consider those exposures or positions that could arise after that date. As a result, the Partnership’s ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the Partnership’s hedging strategies at that time, and interest rates.

 

The Partnership’s unsecured line of credit was renewed in January 2004 with the maturity date being extended to January 2007.  The table above reflects the 2007 maturity date.

 

Item 8.  Financial Statements and Supplementary Data

 

The financial statements and supplementary data are included under Item 15 of this Report.

 

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

 

Part III

 

Item 9A. Disclosure Controls and Procedures

 

The Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in our annual and periodic reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

 

Based on the most recent evaluation, which was completed as of December 31, 2003, the General Partner’s chief executive officer, chief operating officer and chief financial officer believe that the disclosure controls and procedures are effective. There have been no significant changes in the Partnership’s internal controls over financial reporting or in other factors that could significantly affect the internal controls over financial reporting subsequent to the date the evaluation was completed.

 

Item 10.  Directors and Executive Officers of the Registrant

 

The Partnership does not have any directors or officers. The information required by Item 10 for Directors and Certain Executive Officers is contained in a definitive proxy statement for the General Partner, which herein is incorporated by reference.

 

31



 

Item 11.  Executive Compensation

 

The information required by Item 11 is contained in a definitive proxy statement for the General Partner, which herein is incorporated by reference.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters

 

The information required by Item 12 is contained in a definitive proxy statement for the General Partner, which herein is incorporated by reference.

 

Item 13.  Certain Relationships and Related Transactions

 

The information required by Item 13 is contained in a definitive proxy statement for the General Partner, which herein is incorporated by reference.

 

Item 14.  Principal Accountant Fees and Services

 

The information required by Item 14 is contained in a definitive proxy statement for the General Partner, which herein is incorporated by reference.

 

Part IV

 

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

 

(a)   The following documents are filed as part of this Form 10-K:

 

1.              Consolidated Financial Statements

 

The following Consolidated Financial Statements of the Partnership, together with the Independent Auditors’ Report, are listed below:

 

Independent Auditors’ Report

Consolidated Balance Sheets, December 31, 2003 and 2002

Consolidated Statements of Operations, Years Ended December 31, 2003, 2002 and 2001

Consolidated Statements of Cash Flows, Years Ended December 31, 2003, 2002 and 2001

Consolidated Statements of Partners’ Equity, Years Ended December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements

 

2.              Consolidated Financial Statement Schedules

 

Schedule III – Real Estate and Accumulated Depreciation

 

3.              Exhibits

 

The following exhibits are filed with this Annual Report Form 10-K or incorporated herein by reference to the listed document previously filed with the SEC. Previously unfiled documents are noted with an asterisk (*).

 

Number

 

Description

 

 

 

4.1

 

Third Restated Articles of Incorporation of the Partnership, incorporated by reference from Exhibit 3.1 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended March 21, 2003.

 

 

 

4.2

 

Third Amended and Restated Bylaws of the Partnership, incorporated by reference from Exhibit 3.2 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003.

 

 

 

4.3

 

Amendment to the Third Restated Articles of Incorporation, incorporated by reference from Exhibit 3 of the Partnership’s Current Report on Form 8-K dated August 25, 2003.

 

32



 

4.4

 

Amendment to the Third Restated Articles of Incorporation, incorporated by reference from Exhibit 3 of the Partnership’s Current Report on Form 8-K dated February 13, 2004.

 

 

 

4.5

 

Indenture between DRLP and The First National Bank of Chicago, Trustee, incorporated by reference to Exhibit 4.1 to the Partnership’s Current Report on Form 8-K filed September 22, 1995.

 

 

 

4.6

 

First Supplement to Indenture, incorporated by reference to Exhibit 4.2 to the Partnership’s Current Report on Form 8-K filed September 22, 1995.

 

 

 

4.7

 

Second Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed July 12, 1996.

 

 

 

4.8

 

Third Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed May 20, 1997.

 

 

 

4.9

 

Fourth Supplement to Indenture, incorporated by reference to Exhibit 4.8 to the Partnership’s Form S-4 Registration Statement No. 333-77645 dated May 4, 1999 (Merger Registration Statement).

 

 

 

4.10

 

Fifth Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed June 1, 1998.

 

 

 

4.11

 

Sixth Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed February 12, 1999.

 

 

 

4.12

 

Seventh Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed June 29, 1999.

 

 

 

4.13

 

Eighth Supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed November 15, 1999.

 

 

 

4.14

 

Ninth supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed March 2, 2001.

 

 

 

4.15

 

Tenth supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed August 13, 2002.

 

 

 

4.16

 

Eleventh supplement to Indenture, incorporated by reference to Exhibit 4 to the Partnership’s Current Report on Form 8-K filed August 26, 2002.

 

 

 

4.17

 

Twelfth supplement to Indenture, incorporated by reference to Exhibit 4 to Partnership’s Current Report on Form 8-K filed January 16, 2002.

 

 

 

4.18

 

Thirteenth Supplement to Indenture, incorporated by Reference to Exhibit 4 to Partnership’s Current Report on Form 8-K filed May 22, 2003.

 

 

 

4.19

 

Fourteenth Supplement to Indenture, incorporated by Reference to Exhibit 4 to Partnership’s Current Report on Form 8-K filed October 24, 2003.

 

 

 

4.20

 

Fifteenth Supplement to Indenture, incorporated by Reference to Exhibit 4 to Partnership’s Current Report on Form 8-K filed January 9, 2004.

 

 

 

4.21

 

Sixteenth Supplement to Indenture, incorporated by Reference to Exhibit 4 to Partnership’s Current Report on Form 8-K filed January 23, 2004.

 

 

 

10.1

 

Second Amended and Restated Agreement of Limited Partnership of DRLP, incorporated by reference from Exhibit 4.1 to DRLP’s Current Report on Form 8-K filed July 16, 1999.

 

 

 

10.2

 

First Amendment to Second Amended and Restated Agreement of Limited Partnership of DRLP, incorporated by reference from Exhibit 10.2 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

 

33



 

10.3

 

Second Amendment to Second Amended and Restated Agreement of Limited Partnership of DRLP incorporated by reference from Exhibit 10.3 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.4

 

Third Amendment To Second Amended and Restated Agreement of Limited Partnership of DRLP incorporated by reference from Exhibit 10.4 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.5

 

Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership of DRLP incorporated by reference from Exhibit 10.5 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.6

 

Second Amended and Restated Agreement of Limited Partnership of Duke Realty Services Limited Partnership (the “Services Partnership”), incorporated herein by reference to Exhibit 10.3 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 1995.

 

 

 

10.7

 

First Amendment to Second Amended and Restated Agreement of Limited Partnership of the Services Partnership incorporated by reference from Exhibit 10.7 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.8

 

Second Amendment to Second Amended and Restated Agreement of Limited Partnership of the Services Partnership incorporated by reference from Exhibit 10.8 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.9

 

Third Amendment to Second Amended and Restated Agreement of Limited Partnership of the Services Partnership incorporated by reference from Exhibit 10.9 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.

 

 

 

10.10

 

Promissory Note of the Services Partnership, incorporated herein by reference to Exhibit 10.3 to the Partnership’s Form S-2 Registration Statement No. 33-64038 filed June 8, 1993 (the “1993 Registration Statement”).

 

 

 

10.11

 

Services Partnership 1993 Stock Option Plan, incorporated herein by reference to Exhibit 10.4 to the 1993 Registration Statement.#

 

 

 

10.12

 

Amendment One to Services Partnership 1993 Stock Option Plan incorporated by reference from Exhibit 10.12 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.13

 

Amendment Two to Services Partnership 1993 Stock Option Plan incorporated by reference from Exhibit 10.13 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#

 

 

 

10.14

 

Amendment Three to Services Partnership 1993 Stock Option Plan incorporated by reference from Exhibit 10.14 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002.#

 

 

 

10.15

 

Acquisition Option Agreement relating to certain properties not contributed to the Operating Partnership by Duke Associates (the “Excluded Properties”), incorporated herein by reference to Exhibit 10.5 to the 1993 Registration Statement.

 

 

 

10.16

 

Management Agreement relating to the Excluded Properties, incorporated herein by reference to Exhibit 10.6 to the 1993 Registration Statement.

 

 

 

10.17

 

Indemnification Agreement, incorporated herein by reference to Exhibit 10.11 to the 1993 Registration Statement.

 

34



 

10.18

 

1995 Key Employee Stock Option Plan of the Partnership, incorporated herein by reference to Exhibit 10.13 to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 1995.#

 

 

 

10.19

 

Amendment One To The 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.19 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.20

 

Amendment Two to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.20 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.21

 

Amendment Three to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.21 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.22

 

Amendment Four to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.22 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.23

 

Amendment Five to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.23 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.24

 

Amendment Six to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. incorporated by reference from Exhibit 10.24 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.25

 

Amendment Seven to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc., incorporated herein by reference to Exhibit 10.1 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.#

 

 

 

10.26

 

Amended and Restated Dividend Increase Unit Plan of the Services Partnership incorporated by reference from Exhibit 10.25 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.27

 

Amendment One to the Amended and Restated Dividend Increase Unit Plan of Services Partnership incorporated by reference from Exhibit 10.26 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.28

 

Amendment Two to the Amended and Restated Dividend Increase Unit Plan of Services Partnership incorporated by reference from Exhibit 10.27 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.29

 

Amendment Three to the Amended and Restated Dividend Increase Unit Plan of Duke Realty Services Limited Partnership, incorporated herein by reference to Exhibit 10.5 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001.#

 

 

 

10.30

 

1995 Shareholder Value Plan of the Services Partnership incorporated herein by reference to Exhibit 10.15 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 1995.#

 

 

 

10.31

 

Amendment One to the 1995 Shareholder Value Plan of Services Partnership incorporated by reference from Exhibit 10.29 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.32

 

Amendment Two to the 1995 Shareholder Value Plan of Services Partnership incorporated by reference from Exhibit 10.30 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

35



 

10.33

 

Amendment Three to the 1995 Shareholder Value Plan of Services Partnership incorporated by reference from Exhibit 10.31 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001.#

 

 

 

10.34

 

Amendment Four to the 1995 Shareholder Value Plan of Services Partnership, incorporated herein by reference to Exhibit 10.2 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.#

 

 

 

10.35

 

1998 Duke Realty Severance Pay Plan, incorporated herein by reference to Exhibit 10.18 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998.#

 

 

 

10.36

 

1999 Directors’ Stock Option and Dividend Increase Unit Plan, incorporated by reference to Annex F to the Prospectus in the Merger Registration Statement.#

 

 

 

10.37

 

1999 Salary Replacement Stock Option and Dividend Increase Unit Plan is incorporated by reference to Annex G to the Prospectus in the Merger Registration Statement.#

 

 

 

10.38

 

Amendment One to the 1999 Salary Replacement Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. incorporated herein by reference to Exhibit 10.3 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.#

 

 

 

10.39

 

Amendment Two to the 1999 Salary Replacement Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. incorporated herein by reference to Exhibit 10.4 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.#

 

 

 

10.40

 

2000 Performance Share Plan of Duke-Weeks Realty Corporation incorporated herein by reference to Proposal 2 of the partnership’s 2001 Proxy filed March 13, 2001.

 

 

 

10.41

 

Amendment One to the 2000 Performance Share Plan of Duke-Weeks Realty Corporation incorporated herein by reference to Exhibit 10.6 to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2002.

 

 

 

10.42

 

Amendment Two to the 2000 Performance Share Plan of Duke-Weeks Realty Corporation incorporated herein by reference to Exhibit 10.42 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.*

 

 

 

10.43

 

Fourth Amended and Restated Revolving Credit Agreement dated January 22, 2004, among the Partnership, as borrower, Duke Realty Corporation as General Partner and Guarantor, and Bank One as Administrative Agent and Lender incorporated by reference from Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed January 22, 2004.*

 

 

 

11.1

 

Statement of Computation of Ratios of Earnings to Fixed Charges.*

 

 

 

11.2

 

Statement of Computation of Ratios of Earnings to Debt Service.*

 

 

 

21.

 

List of the Partnership’s Subsidiaries.*

 

 

 

23.

 

Consent of KPMG LLP.*

 

 

 

24.

 

Executed powers of attorney of certain directors.*

 

 

 

31.1

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

 

 

 

31.2

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

 

 

 

31.3

 

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

 

 

 

32.1

 

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

 

 

32.2

 

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

36



 

32.3

 

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

 

 

99.1

 

Selected Quarterly Financial Information.*

 


# Represents management contract or compensatory plan or arrangement.

 

The Partnership will furnish to any security holder, upon written request, copies of any exhibit incorporated by reference, for a fee of 15 cents per page, to cover the costs of furnishing the exhibits. Written request should include a representation that the person making the request was the beneficial owner of securities entitled to vote at the Annual Meeting of Shareholders of the General Partner.

 

(b)           Reports on Form 8-K

 

A current report was filed on Form 8-K, dated January 22, 2004, reporting under items 5 and 7 the execution of a new $500 million revolving line of credit.

 

A current report was filed on Form 8-K, dated January 16, 2004, setting forth under item 5 the issuance of $125,000,000 aggregate principal amount of Notes due in 2008 at 3.35%.

 

(c)           Exhibits

 

The exhibits required to be filed with this Form 10-K pursuant to Item 601 of Regulation S-K or listed under “Exhibits” in Part IV, Item 14(a)(3) of Form 10-K, which are incorporated herein by reference.

 

(d)           Financial Statement Schedule

 

The Financial Statement Schedule required to be filed with this Form 10-K is listed under “Consolidated Financial Statement Schedules” in Part IV, Item 14(a)(2) of this Form 10-K, and is incorporated herein by reference.

 

37


Independent Auditors’ Report

 

The Partners

Duke Realty Limited Partnership:

 

We have audited the consolidated balance sheets of Duke Realty Limited Partnership and Subsidiaries as of December 31, 2003 and 2002, and the related consolidated statements of operations, cash flows and partners’ equity for each of the years in the three-year period ended December 31, 2003. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule III. These consolidated financial statements and the financial statement schedule are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the consolidated financial statements and the financial statement schedule based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Duke Realty Limited Partnership and Subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

 

 

KPMG LLP

Indianapolis, Indiana

January 28, 2004

 

 

 

38



 

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31

(in thousands, except per unit amounts)

 

 

 

2003

 

2002

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Real estate investments:

 

 

 

 

 

Land and improvements

 

$

641,544

 

$

608,995

 

Buildings and tenant improvements

 

4,452,624

 

4,237,360

 

Construction in progress

 

119,441

 

85,756

 

Investments in unconsolidated companies

 

295,837

 

315,589

 

Land held for development

 

314,446

 

326,250

 

 

 

5,823,892

 

5,573,950

 

Accumulated depreciation

 

(677,357

)

(555,858

)

 

 

 

 

 

 

Net real estate investments

 

5,146,535

 

5,018,092

 

 

 

 

 

 

 

Cash and cash equivalents

 

12,695

 

17,129

 

Accounts receivable, net of allowance of $2,430 and $2,008

 

16,215

 

15,415

 

Straight-line rent receivable, net of allowance of $1,240 and $2,491

 

71,049

 

52,062

 

Receivables on construction contracts

 

44,905

 

23,181

 

Deferred financing costs, net of accumulated amortization of $10,703 and $15,390

 

13,358

 

11,431

 

Deferred leasing and other costs, net of accumulated amortization of $67,317 and $50,543

 

158,562

 

112,772

 

Escrow deposits and other assets

 

95,392

 

96,973

 

 

 

$

5,558,711

 

$

5,347,055

 

LIABILITIES AND PARTNERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Indebtedness:

 

 

 

 

 

Secured debt

 

$

208,649

 

$

299,147

 

Unsecured notes

 

1,775,887

 

1,526,138

 

Unsecured lines of credit

 

351,000

 

281,000

 

 

 

2,335,536

 

2,106,285

 

 

 

 

 

 

 

Construction payables and amounts due subcontractors

 

60,789

 

43,232

 

Accounts payable

 

2,268

 

548

 

Accrued expenses:

 

 

 

 

 

Real estate taxes

 

52,955

 

51,472

 

Interest

 

33,259

 

27,374

 

Other

 

49,029

 

52,485

 

Other liabilities

 

107,321

 

106,893

 

Tenant security deposits and prepaid rents

 

37,975

 

33,710

 

Total liabilities

 

2,679,132

 

2,421,999

 

 

 

 

 

 

 

Minority interest

 

1,259

 

5,213

 

 

 

 

 

 

 

Partners’ equity:

 

 

 

 

 

General Partner

 

 

 

 

 

Common equity

 

2,153,844

 

2,203,060

 

Preferred equity (liquidation preference of ($540,507)

 

511,785

 

415,466

 

 

 

2,665,629

 

2,618,526

 

Limited Partners’ common equity

 

212,691

 

235,473

 

Limited Partners’ preferred equity

 

 

67,955

 

Accumulated other comprehensive income

 

 

(2,111

)

Total Partners’ equity

 

2,878,320

 

2,919,843

 

 

 

$

5,558,711

 

$

5,347,055

 

 

See accompanying Notes to Consolidated Financial Statements.

 

39



 

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended December 31

(in thousands, except per unit amounts)

 

 

 

2003

 

2002

 

2001

 

RENTAL OPERATIONS:

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Rental income from continuing operations

 

$

706,749

 

$

670,927

 

$

669,623

 

Equity in earnings of unconsolidated companies

 

23,688

 

27,180

 

31,391

 

 

 

730,437

 

698,107

 

701,014

 

Operating expenses:

 

 

 

 

 

 

 

Rental expenses

 

144,016

 

124,541

 

118,412

 

Real estate taxes

 

78,777

 

71,303

 

68,247

 

Interest expense

 

129,160

 

114,675

 

109,544

 

Depreciation and amortization

 

193,441

 

170,938

 

153,909

 

 

 

545,394

 

481,457

 

450,112

 

Earnings from continuing rental operations

 

185,043

 

216,650

 

250,902

 

 

 

 

 

 

 

 

 

SERVICE OPERATIONS:

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

General contractor gross revenue

 

286,689

 

194,439

 

264,455

 

General contractor costs

 

(259,930

)

(172,559

)

(229,845

)

Net general contractor revenue

 

26,759

 

21,880

 

34,610

 

 

 

 

 

 

 

 

 

Property management, maintenance and leasing fees

 

14,731

 

14,301

 

22,824

 

Construction management and development activity income

 

15,486

 

29,428

 

19,142

 

Other income

 

1,520

 

2,251

 

3,883

 

Total revenue

 

58,496

 

67,860

 

80,459

 

 

 

 

 

 

 

 

 

Operating expenses

 

37,378

 

38,340

 

45,344

 

 

 

 

 

 

 

 

 

Earnings from service operations

 

21,118

 

29,520

 

35,115

 

 

 

 

 

 

 

 

 

General and administrative expense

 

(21,342

)

(24,704

)

(15,539

)

 

 

 

 

 

 

 

 

Operating income

 

184,819

 

221,466

 

270,478

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

Interest income

 

3,590

 

3,783

 

5,037

 

Earnings from sale of land and depreciable property dispositions, net of impairment adjustment

 

15,774

 

2,340

 

45,708

 

Other revenue (expense)

 

(734

)

182

 

(2,582

)

Other minority interest in earnings of subsidiaries

 

(586

)

(1,093

)

(2,411

)

Income from continuing operations

 

202,863

 

226,678

 

316,230

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

Net income from discontinued operations

 

2,947

 

5,698

 

7,050

 

Gain on sale of discontinued operations, net of impairment adjustment

 

13,002

 

(17

)

 

Income from discontinued operations

 

15,949

 

5,681

 

7,050

 

 

 

 

 

 

 

 

 

Net income

 

218,812

 

232,359

 

323,280

 

Dividends on preferred units

 

(39,225

)

(52,613

)

(60,850

)

Adjustment for redemption of preferred units

 

 

(8,145

)

(2,538

)

Net income available for common unitholders

 

$

179,587

 

$

171,601

 

$

259,892

 

 

 

 

 

 

 

 

 

Basic net income per common units:

 

 

 

 

 

 

 

Continuing operations

 

$

1.09

 

$

1.11

 

$

1.71

 

Discontinued operations

 

.11

 

.04

 

.05

 

Total

 

$

1.20

 

$

1.15

 

$

1.76

 

Diluted net income per common units:

 

 

 

 

 

 

 

Continuing operations

 

$

1.08

 

$

1.10

 

$

1.69

 

Discontinued operations

 

.11

 

.04

 

.05

 

Total

 

$

1.19

 

$

1.14

 

$

1.74

 

 

 

 

 

 

 

 

 

Weighted average number of common units outstanding

 

150,280

 

149,423

 

147,961

 

Weighted average number of common and dilutive potential common units

 

151,141

 

150,839

 

151,710

 

 

See accompanying Notes to Consolidated Financial Statements.

 

40



 

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31

(in thousands)

 

 

 

2003

 

2002

 

2001

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

 

$

218,812

 

$

232,359

 

$

323,280

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation of buildings and tenant improvements

 

168,959

 

154,565

 

138,723

 

Amortization of deferred leasing and other costs

 

27,275

 

21,056

 

20,991

 

Amortization of deferred financing costs

 

3,626

 

3,725

 

4,589

 

Minority interest in earnings

 

586

 

1,093

 

2,411

 

Straight-line rent adjustment

 

(22,387

)

(12,500

)

(12,593

)

Earnings from land and depreciated property sales

 

(28,776

)

(1,048

)

(45,708

)

Build-to-suit operations, net

 

(20,899

)

168,199

 

(79,912

)

Construction contracts, net

 

(3,210

)

(11,656

)

9,651

 

Other accrued revenues and expenses, net

 

15,319

 

8,605

 

(10,908

)

Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies

 

8,783

 

4,575

 

(1,844

)

Net cash provided by operating activities

 

368,088

 

568,973

 

348,680

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Development of real estate investments

 

(129,199

)

(158,131

)

(251,405

)

Acquisition of real estate investments

 

(201,819

)

(98,062

)

(13,927

)

Acquisition of land held for development and infrastructure costs

 

(32,944

)

(27,182

)

(92,203

)

Recurring tenant improvements

 

(35,972

)

(28,011

)

(18,416

)

Recurring leasing costs

 

(20,932

)

(17,975

)

(13,845

)

Recurring building improvements

 

(19,544

)

(13,373

)

(10,873

)

Other deferred leasing costs

 

(17,167

)

(18,219

)

(10,621

)

Other deferred costs and other assets

 

(24,412

)

(17,350

)

3,223

 

Tax deferred exchange escrow, net

 

 

 

27,260

 

Proceeds from land and depreciated property sales, net

 

167,891

 

52,186

 

436,113

 

Capital distributions from unconsolidated companies

 

 

 

59,249

 

Advances to unconsolidated companies

 

(5,481

)

(11,130

)

(21,067

)

Net cash provided (used) by investing activities

 

(319,579

)

(337,247

)

93,488

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Contribution from General Partner, common units

 

14,026

 

22,651

 

36,483

 

Contribution from General Partner, preferred units

 

96,700

 

 

72,210

 

Payments for exercise of warrants

 

(4,692

)

 

 

Proceeds from indebtedness

 

425,000

 

200,000

 

175,000

 

Payments on unsecured debt

 

(175,000

)

 

 

Proceeds from debt refinancing

 

38,340

 

 

 

Proceeds from issuance of secured debt

 

40,000

 

 

 

Payments for redemption of preferred units

 

(65,020

)

(202,953

)

(75,018

)

Payments on indebtedness including principal amortization

 

(143,542

)

(71,953

)

(223,578

)

Borrowings (payments) on lines of credit, net

 

46,105

 

157,305

 

(125,067

)

Distributions to common unitholders

 

(275,282

)

(271,659

)

(262,237

)

Distributions to preferred unitholders

 

(42,180

)

(54,613

)

(61,418

)

Distributions to minority interest

 

(1,531

)

(565

)

(2,023

)

Deferred financing costs

 

(5,867

)

(3,263

)

(5,267

)

Net cash provided by financing activities

 

(52,943

)

(225,050

)

(470,915

)

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

(4,434

)

6,676

 

(28,747

)

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of year

 

17,129

 

10,453

 

39,200

 

Cash and cash equivalents at end of year

 

$

12,695

 

$

17,129

 

$

10,453

 

Other non-cash items:

 

 

 

 

 

 

 

Assumption of debt for real estate acquisitions

 

$

 

$

9,566

 

$

16,403

 

Contributions of property to unconsolidated companies

 

$

5,009

 

$

 

$

4,501

 

Conversion of Limited Partner Units to common shares of General Partner

 

$

9,984

 

$

13,226

 

$

4,259

 

Issuance of Limited Partner Units for real estate acquisitions

 

$

3,187

 

$

4,686

 

$

3,787

 

Transfer of debt in sale of depreciated property

 

$

 

$

2,432

 

$

16,000

 

Redemption of Limited Partner Units for depreciated property

 

$

 

$

 

$

13,445

 

Acquisition of partners’ interest in unconsolidated companies

 

$

20,630

 

$

12,149

 

$

18,049

 

 

See accompanying Notes to Consolidated Financial Statements.

 

41



 

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Partners’ Equity

(in thousands, except per unit data)

 

 

 

General Partner

 

Limited
Partners’
Common
Equity

 

Limited
Partners’
Preferred
Equity

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Total

 

Common
Equity

 

Preferred
Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2000

 

2,128,138

 

586,261

 

330,244

 

102,955

 

 

3,147,598

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

229,399

 

53,010

 

32,463

 

8,408

 

 

323,280

 

Distributions to preferred unitholders

 

 

(53,010

)

 

(8,408

)

 

(61,418

)

Transition adjustment resulting from adoption of FASB No. 133

 

 

 

 

 

398

 

398

 

Gains (losses) on derivative instruments

 

 

 

 

 

(1,138

)

(1,138

)

Settlement of derivative instrument

 

 

 

 

 

548

 

548

 

Comprehensive income available for common unitholders

 

 

 

 

 

 

 

 

 

 

 

261,670

 

Capital contribution from General Partner

 

37,845

 

72,210

 

 

 

 

110,055

 

Acquisition of partnership interest for common stock of General Partner

 

36,351

 

 

(32,092

)

 

 

4,259

 

Acquisition of partnership interest for real estate investments

 

 

 

(13,445

)

 

 

(13,445

)

Acquisition of property in exchange for Limited Partner Units

 

 

 

3,787

 

 

 

3,787

 

Redemption of Series A Preferred units

 

 

(75,018

)

 

 

 

(75,018

)

Conversion of Series D Preferred units to common units

 

34

 

(34

)

 

 

 

 

Retirement of common units

 

(437

)

 

 

 

 

(437

)

Distributions to partners ($1.76 per Common Unit)

 

(228,039

)

 

(34,198

)

 

 

(262,237

)

Balance at December 31, 2001

 

$

2,203,291

 

$

583,419

 

$

286,759

 

$

102,955

 

$

(192

)

$

3,176,232

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

159,178

 

47,053

 

18,568

 

7,560

 

 

232,359

 

Distributions to preferred unitholders

 

 

(47,053

)

 

(7,560

)

 

(54,613

)

Gains (losses) on derivative instruments

 

 

 

 

 

(1,919

)

(1,919

)

Comprehensive income available for common unitholders

 

 

 

 

 

 

 

 

 

 

 

175,827

 

Capital contribution from General Partner

 

22,651

 

 

 

 

 

22 651

 

Acquisition of partnership interest for common stock of General Partner

 

60,509

 

 

(47,283

)

 

 

13,226

 

Acquisition of property in exchange for Limited Partner Units

 

 

 

5,439

 

 

 

5,439

 

Repurchase of Series D Preferred units

 

 

(25

)

 

 

 

(25

)

Redemption of Series B Preferred units

 

 

(17,928

)

 

 

 

(17,928

)

Redemption of Series F Preferred units

 

 

(150,000

)

 

 

 

(150,000

)

Redemption of Series G Preferred units

 

 

 

 

(35,000

)

 

(35,000

)

Tax benefits from Employee Stock Plans

 

856

 

 

 

 

 

856

 

FASB 123 Compensation Expense

 

224

 

 

 

 

 

224

 

Distributions to General Partner

 

(1,174

)

 

 

 

 

(1,174

)

Distributions to partners ($1.81 per Common Unit)

 

(242,475

)

 

(28,010

)

 

 

(270,485

)

Balance at December 31, 2002

 

$

2,203,060

 

$

415,466

 

$

235,473

 

$

67,955

 

$

(2,111

)

$

2,919,843

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

162,041

 

37,321

 

17,546

 

1,904

 

 

218,812

 

Distributions to preferred unitholders

 

 

(37,321

)

 

(1,904

)

 

(39,225

)

Gains (losses) on derivative instruments

 

 

 

 

 

2,111

 

2,111

 

Comprehensive income available for common unitholders

 

 

 

 

 

 

 

 

 

 

 

181,698

 

Capital contribution from General Partner

 

14,160

 

96,700

 

 

 

 

110,860

 

Acquisition of partnership interest for common stock of

 

 

 

 

 

 

 

 

 

 

 

 

 

General Partner

 

26,546

 

 

(16,562

)

 

 

9,984

 

Acquisition of property in exchange for Limited Partner Units

 

 

 

3,187

 

 

 

3,187

 

Redemption of Series H Preferred units

 

 

 

 

(67,955

)

 

(67,955

)

Repurchase of Series D Preferred units

 

 

(20

)

 

 

 

(20

)

Conversion of Series D Preferred units

 

361

 

(361

)

 

 

 

 

Tax benefits from Employee Stock Plans

 

542

 

 

 

 

 

542

 

Exercise of General Partner Warrants

 

(4,692

)

 

 

 

 

(4,692

)

FASB 123 Compensation Expense

 

155

 

 

 

 

 

155

 

Distribution to General Partner

 

(229

)

 

 

 

 

(229

)

Distributions to partners ($1.83 per Common Unit)

 

(248,100

)

 

(26,953

)

 

 

(275,053

)

Balance at December 31, 2003

 

$

2,153,844

 

$

511,785

 

$

212,691

 

$

 

$

 

$

2,878,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Units outstanding at December 31, 2003

 

136,594

 

 

 

14,411

 

 

 

 

 

150,705

 

 

See accompanying Notes to Consolidated Financial Statements.

 

42



 

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

 

Notes to Consolidated Financial Statements

 

(1)                                 The Partnership

 

Duke Realty Limited Partnership (the “Partnership”) was formed on October 4, 1993, when Duke Realty Corporation (the “General Partner”) contributed all of its properties and related assets and liabilities, along with the net proceeds of $309.2 million from the issuance of an additional 14,000,833 shares of the General Partner through an offering to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest. The General Partner was formed in 1985 and qualifies as a Real Estate Investment Trust (“REIT”) under provisions of the Internal Revenue Code. The General Partner is the sole general partner of the Partnership, owning 90.6% of the common partnership interests as of December 31, 2003 (“General Partner Units”). The remaining 9.4% of the Partnership’s common interest is owned by limited partners (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”). The Limited Partner Units are exchangeable for shares of the General Partner’s common stock on a one-for-one basis subject generally to a one-year holding period.

 

The Partnership owns and operates a portfolio of industrial, office and retail properties in the midwestern and southeastern United States and provides real estate services to third-party owners. The Partnership conducts Service Operations through Duke Realty Services Limited Partnership (“DRSLP”) and Duke Construction Limited Partnership (“DCLP”).

 

(2)                                 Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Partnership and its controlled subsidiaries. The equity interests in these controlled subsidiaries not owned by the Partnership are reflected as minority interests in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. Investments in entities that the Partnership does not control through majority voting interest or where the other owner has substantial participating rights are not consolidated and are reflected as investments in unconsolidated companies under the equity method of reporting.

 

Reclassifications

 

Certain 2001 and 2002 balances have been reclassified to conform to the 2003 presentation.

 

Real Estate Investments

 

Rental real property, including land, land improvements, buildings and building improvements, are included in real estate investments and are generally stated at cost. Buildings and land improvements are depreciated on the straight-line method over their estimated life not to exceed 40 and 15 years, respectively, and tenant improvement costs are depreciated using the straight-line method over the term of the related lease.

 

Direct and indirect costs, including interest and real estate taxes associated with the development, construction, leasing or expansion of real estate investments, are capitalized as a cost of the property.  Indirect costs include an estimate of internal costs associated with the development and leasing of real estate investments. All external costs associated with the acquisition of real estate investments are capitalized as a cost of the property.

 

Construction in process and land held for development are included in real estate investments and are stated at cost. Real estate investments also include the Partnership’s equity interests in unconsolidated joint ventures that own and operate rental properties and hold land for development. The equity method of accounting is used for these investments in which the Partnership has the ability to exercise significant influence, but not control, over operating and financial policies. Any difference between the carrying amount

 

43



 

of these investments and the underlying equity in net assets is amortized to equity in earnings of unconsolidated companies over the depreciable life of the property, generally 40 years.

 

The Partnership adopted Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (“SFAS144”), in 2002.  In accordance with this statement, properties held for rental are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis) from a rental property over its anticipated holding period is less than is historical net cost basis. Upon determination that a permanent impairment has occurred, a loss is recorded to reduce the net book value of that property to its fair market value. Real properties to be disposed of are reported at the lower of net historical cost basis or its estimated fair market value, less costs to sell. Once a property is designated as held for disposal, no further depreciation expense is recorded.

 

In accordance with Statement of Financial Accounting Standard No. 141, Business Combinations (“SFAS 141”), the Partnership allocates the purchase price of acquired properties to net tangible and identified intangible assets based on their respective fair values. The allocation to tangible assets (building and land) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models similar to those used by independent appraisers. Factors considered by management include an estimate of carrying costs during the expected lease-up periods considering current market conditions, and costs to execute similar leases. The remaining purchase price is allocated among three categories of intangible assets consisting of the above or below market component of in—place leases, the value of in-place leases and the value of customer relationships.

 

The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above or below market leases are included in deferred leasing and other costs in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.

 

The total amount of intangible assets is further allocated to in-place lease values and to customer relationship values based upon management’s assessment of their respective values. These intangible assets are included in deferred leasing and other costs in the balance sheet and are depreciated over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable.

 

Cash Equivalents

 

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

 

Deferred Costs

 

Costs incurred in connection with obtaining financing are amortized to interest expense on the straight-line method, which approximates a constant spread over the term of the related loan. All direct and indirect costs, including estimated internal costs, associated with the leasing of real estate investments owned by the Partnership are capitalized and amortized over the term of the related lease. Unamortized costs are charged to expense upon the early termination of the lease or upon early payment of the financing.

 

44



 

Revenues

 

Rental Operations

 

Rental income from leases with scheduled rental increases during their terms is recognized on a straight-line basis.

 

Service Operations

 

Management fees are based on a percentage of rental receipts of properties managed and are recognized as the rental receipts are collected. Maintenance fees are based upon established hourly rates and are recognized as the services are performed. Construction management and development fees represent fee based third party contracts and are recognized as earned based on the terms of the contract, which approximates the percentage of completion method.

 

The Partnership recognizes income on construction contracts where the Partnership serves as a general contractor on the percentage of completion method. Using this method, profits are recorded based on the Partnership’s estimates of the percentage of completion of individual contracts, commencing when the work performed under the contracts reach a point where the final costs can be estimated with reasonable accuracy. The percentage of completion estimates are based on a comparison of the contract expenditures incurred to the estimated final costs. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and income and recognized in the period in which the revisions are determined.

 

Property Sales

 

Gains from sales of depreciated property are recognized in accordance with Statement of Financial Accounting Standard No. 66, Accounting for Sales of Real Estate (“SFAS 66”), and are included in earnings from sales of land and depreciable property dispositions, net of any impairment adjustments, in the Statement of Operations if identified as held-for-sale prior to adoption of SFAS 144 and in discontinued operations if identified as held-for-sale after adoption of SFAS 144.

 

Gains or losses from the sale of property that were developed with the intent to sell and not for long-term rental are recognized in accordance with SFAS 66 and are included in construction management and development activity income in the Statement of Operations.

 

Net Income Per Common Unit

 

Basic net income per common unit is computed by dividing net income available for common units by the weighted average number of common units outstanding for the period. Diluted net income per common unit is computed by dividing the sum of net income available for common unitholders by the sum of the weighted average number of common units and outstanding, including any dilutive potential common units for the period.

 

The following table reconciles the components of basic and diluted net income per common unit (in thousands):

 

45



 

 

 

 

2003

 

2002

 

2001

 

Basic net income available for common units

 

$

179,587

 

$

171,601

 

$

259,892

 

Joint venture partner convertible ownership net income

 

 

 

3,423

 

Diluted net income available for common units and dilutive potential common units

 

$

179,587

 

$

171,601

 

$

263,315

 

 

 

 

 

 

 

 

 

Weighted average number of common units outstanding

 

150,280

 

149,423

 

147,961

 

Joint venture partner convertible ownership common unit equivalents

 

 

 

2,092

 

Dilutive units for stock-based compensation plans

 

861

 

1,416

 

1,657

 

Weighted average number of common units and dilutive potential common units

 

151,141

 

150,839

 

151,710

 

 

The Partnership’s outstanding Series D Convertible Preferred Units was anti-dilutive for the years ended December 31, 2003, 2002 and 2001; therefore, no conversion to common units is included in weighted average dilutive potential common units. In September 2002, the Partnership redeemed the Series G Convertible Preferred Units at their par value of $35.0 million. These Units were anti-dilutive for the years ended December 31, 2002 and 2001; therefore, no conversion to common shares was included in weighted average dilutive potential common shares.

 

A joint venture partner in one of the Partnership’s unconsolidated companies has the option to convert a portion of its ownership to the General Partner’s common shares, which would require the issuance of additional Common units to the General Partner. The effect of this option on earnings per unit was anti-dilutive for the years ended December 31, 2003 and 2002 and was dilutive for the year ended December 31, 2001; therefore, conversion to common units was included in weighted dilutive potential common units for that year.

 

Federal Income Taxes

 

The Partnership recorded federal and state income taxes of $3.7 million, $11.2 million and $4.0 million for 2003, 2002 and 2001, respectively, which were primarily attributable to the earnings of the Partnership’s taxable REIT subsidiaries. The taxable REIT subsidiaries had no significant deferred income tax items.

 

As a partnership, the allocated share of income and loss other than the operations of the taxable REIT subsidiaries is included in the income tax returns of the partners; accordingly, no accounting for federal income taxes is required in the accompanying consolidated financial statements.

 

Stock Based Compensation

 

Under the limited partnership agreement of the partnership, the Partnership is required to issue one Common Unit to the General Partner for each share of common stock issued by the General Partner.  Accordingly, the issuance of common shares by the General Partner under its stock based compensation plans requires the issuance of a corresponding number of Common Units by the Partnership to the General Partner.

 

The Partnership applies the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations in accounting, for all stock based awards issued by the General Partner prior to 2002. Accordingly, for stock options granted prior to 2002, no compensation expense is reflected in net income as all options granted had an exercise price equal to the market value of the General Partner’s underlying common stock on the date of the grant.

 

In 2002, the Partnership prospectively adopted the fair value recognition provisions of SFAS 123, Accounting for Stock-Based Compensation (SFAS 123”), for all awards granted after January 1, 2002.

 

Awards under the General Partner’s stock based employee compensation plans generally vest over five years at 20% per year. Therefore, the expense related to these plans is less than that which would have been recognized if the fair value method had been applied to all awards since the original effective date of SFAS 123. The following table illustrates the effect on net income and earnings per share if the fair value method

 

46



 

had been applied to all outstanding and unvested awards in each period.

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Net income, as reported

 

$

179,587

 

$

171,601

 

$

259,892

 

Add:  Stock-based employee compensation expense included in net income determined under fair value method

 

155

 

224

 

0

 

Deduct:  Total stock based compensation expense determined under fair value method for all awards

 

(778

)

(1,153

)

(1,236

)

Proforma Net Income

 

$

178,964

 

$

170,672

 

$

258,656

 

 

 

 

 

 

 

 

 

Basic net income per unit

 

 

 

 

 

 

 

As reported

 

$

1.20

 

$

1.15

 

$

1.76

 

Pro forma

 

$

1.19

 

$

1.14

 

$

1.75

 

 

 

 

 

 

 

 

 

Diluted net income per unit

 

 

 

 

 

 

 

As reported

 

$

1.19

 

$

1.14

 

$

1.74

 

Pro forma

 

$

1.18

 

$

1.13

 

$

1.73

 

 

Derivative Financial Instruments

 

The Partnership periodically enters into certain interest rate protection agreements to effectively convert or cap floating rate debt to a fixed rate, and to hedge anticipated future financing transactions. Net amounts paid or received under these agreements are recognized as an adjustment to the interest expense of the corresponding debt. The Partnership does not utilize derivative financial instruments for trading or speculative purposes.

 

The Partnership adopted SFAS 133 Accounting for Derivative Instruments and Hedging Activities, as amended (“SFAS 133”), on January 1, 2001. SFAS 133 requires that all derivative instruments be recorded on the balance sheet as assets or liabilities at their fair value. The cumulative effect of adopting SFAS 133 was not material to the Partnership’s financial statements on the date of adoption. Derivatives that are not hedges must be adjusted to fair value through the recording of income or expense. If a derivative qualifies as a hedge, the changes in fair value of the effective portion of the hedge are recognized in other comprehensive income, while the ineffective portion of the derivative’s change in fair value is recognized in earnings. The Partnership estimates the fair value of derivative instruments using standard market conventions and techniques such as discounted cash flow analysis, option pricing models and termination cost at each balance sheet date.

 

Use Of Estimates

 

The preparation of the financial statements requires management to make a number of estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

 

(3)                                 Related Party Transactions

 

The Partnership provides property management, leasing, construction and other tenant related services to properties in which certain executives have ownership interests. The Partnership had an option to acquire the executive officers’ interests in these properties. Two of these properties, the Bank One Towers office buildings in Cincinnati, Ohio, were acquired in August 2003 at a price of $45.5 million. The terms of this acquisition were reviewed and approved by the independent members of the General Partner’s Board of Directors. The options on the remaining properties expired in October 2003, as the independent members of the General Partner’s Board of Directors determined that it was not in the best interests of the Partnership to exercise the options.

 

47



 

The Partnership received fees totaling $1.2 million, $1.4 million and $1.7 million in 2003, 2002 and 2001, respectively, for services provided to these properties. The fees charged by the Partnership for such services are equivalent to those charged to third-party owners for similar services.

 

The Partnership provides property management, leasing, construction and other tenant related services to unconsolidated companies in which the Partnership has equity interests. For the years ended December 31, 2003, 2002 and 2001, respectively, the Partnership received management fees of $4.9 million, $4.9 million and $4.7 million, leasing fees of $2.3 million, $2.5 million and $2.8 million and construction and development fees of $1.4 million, $4.5 million and $5.2 million from these unconsolidated companies. These fees were charged at market rates and the Partnership eliminates its ownership percentage of these fees in the consolidated financials.

 

In 2002, the Partnership received lease termination fees totaling $7.7 million from a tenant that is a subsidiary of Progress Energy, Inc. William Cavanaugh III is President and Chief Executive Officer of Progress Energy, Inc. and a member of the General Partner’s Board of Directors. The General Partner’s independent directors approved the transaction and management believes that the amount received approximates a value that would have been charged to tenants with similar lease terms and commitments.

 

The Partnership has other related party transactions that are insignificant and are at terms that management considers to be arm’s-length and equal to those negotiated with independent parties.

 

(4)                                 Investments in Unconsolidated Companies

 

The Partnership has equity interests ranging from 10 – 64% in unconsolidated joint ventures that own and operate rental properties and hold land for development.

 

Combined summarized financial information for the unconsolidated companies as of December 31, 2003 and 2002, and for the years ended December 31, 2003, 2002, and 2001, are as follows (in thousands):

 

 

 

2003

 

2002

 

2001

 

Land, buildings and tenant improvements, net

 

$

1,173,232

 

$

1,232,026

 

 

 

Land held for development

 

51,328

 

38,848

 

 

 

Other assets

 

62,196

 

67,590

 

 

 

 

 

$

1,286,756

 

$

1,338,464

 

 

 

Property indebtedness

 

$

577,732

 

$

579,893

 

 

 

Other liabilities

 

41,691

 

52,057

 

 

 

 

 

619,423

 

631,950

 

 

 

Owners’ equity

 

667,333

 

706,514

 

 

 

 

 

$

1,286,756

 

$

1,338,464

 

 

 

Rental income

 

$

170,227

 

$

169,683

 

$

172,257

 

Net income

 

$

41,065

 

$

51,013

 

$

58,091

 

Earnings distributions received

 

$

30,844

 

$

29,238

 

$

37,022

 

 

The Partnership’s share of the scheduled payments of long term debt for the unconsolidated joint ventures for each of the next five years and thereafter as of December 31, 2003, are as follows (in thousands):

 

Year

 

Future Repayments

 

2004

 

$

29,246

 

2005

 

65,214

 

2006

 

5,627

 

2007

 

45,920

 

2008

 

985

 

Thereafter

 

131,740

 

 

 

$

278,732

 

 

The following significant transactions involving the unconsolidated companies have occurred over the past three years:

 

48



 

During 2003, the Partnership purchased its partner’s interest in three separate joint ventures. The Partnership had a 50% interest in each of these ventures prior to their acquisition. The Partnership also sold its 50% interest in two separate joint ventures to its partners. In addition, the Partnership contributed cash and undeveloped land to a joint venture that owns undeveloped land and an office building in return for a 50% interest.

 

In 2002, the Partnership recognized a gain of $1.8 million on the sale of a building that was developed for sale by a joint venture in which the Partnership owned a 50% interest. The gain was included in equity in earnings in the Statement of Operations. The Partnership also bought out its other partners’ interest in six separate joint ventures.  The Partnership had a 50% interest in each of these ventures prior to their acquisition.

 

During 2001, the Partnership received approximately $50.0 million in cash distributions resulting from secured debt financing within two 50 % owned joint ventures. The debt is nonrecourse to the Partnership and is secured by rental properties owned by the joint ventures. In addition, the Partnership recognized a gain of $2.9 million from the sale of depreciable property by a joint venture in which the Partnership owned a 50% interest. The gain is included in equity in earnings in the Statement of Operations.

 

(5)                                 Real Estate Investments

 

The Partnership adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long Lived Assets (“SFAS 144”), on January 1, 2002. SFAS 144 requires the Partnership to report in discontinued operations the results of operations of a property which has either been disposed or is classified as held-for-sale, unless certain conditions are met.

 

The Partnership has classified operations of 45 buildings as discontinued operations in accordance with SFAS 144. These 45 buildings consist of thirty-four industrial, seven office and four retail properties. As a result, the Partnership classified net income of $2.9 million, $5.7 million and $7.1 million as net income from discontinued operations for the years ended December 31, 2003, 2002 and 2001, respectively. Forty-two of these properties were sold during 2003, two properties were sold during 2002 and one operating property is classified as held-for-sale at December 31, 2003; therefore, the gains on disposal of these properties, net of impairment adjustment, of $13.0 million and ($17,000) for the year ended December 31, 2003 and 2002, respectively, are also reported in discontinued operations.

 

The following table illustrates the major classes of assets and operations affected by the 45 buildings identified as discontinued operations at December 31, 2003 (in thousands):

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Balance Sheet:

 

 

 

 

 

 

 

Real estate investments, net

 

$

951

 

$

108,106

 

 

 

Other Assets

 

294

 

14,395

 

 

 

Total Assets

 

$

1,245

 

$

122,501

 

 

 

Accrued Expenses

 

$

32

 

$

2,192

 

 

 

Other Liabilities

 

 

991

 

 

 

Equity

 

1,213

 

119,318

 

 

 

Total Liabilities and Equity

 

$

1,245

 

$

122,501

 

 

 

Statement of Operations:

 

 

 

 

 

 

 

Revenues

 

$

12,495

 

$

19,635

 

$

22,335

 

Expenses:

 

 

 

 

 

 

 

Operating

 

4,410

 

5,690

 

5,445

 

Interest

 

2,346

 

3,608

 

4,286

 

Depreciation and Amortization

 

2,793

 

4,683

 

5,805

 

General and Administrative

 

24

 

32

 

20

 

Operating Income

 

2,922

 

5,622

 

6,779

 

Other Income

 

25

 

76

 

271

 

Minority interest expense -  operating and other income

 

(286

)

(587

)

(873

)

Income from discontinued operations, before gain on sale

 

2,661

 

5,111

 

6,177

 

Gain on sale of property, net of impairment adjustment

 

13,002

 

(17

)

 

Minority interest expense – gain on sales

 

(1,273

)

2

 

 

Income from discontinued operations

 

$

14,390

 

$

5,096

 

$

6,177

 

 

49



 

The Partnership allocates interest expense to discontinued operations as permitted under EITF 87-24, “Allocation of Interest to Discontinued Operations,” and has included such interest expense in computing net income from discontinued operations. Interest expense allocable to discontinued operations includes interest on the debt for the secured properties and an allocable share of the Partnership’s consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the Gross Book Value of the discontinued unencumbered operations population as it related to the Partnership’s entire unencumbered population.

 

At December 31, 2003, the Partnership had four office, three industrial and one retail properties comprising approximately 785,000 square feet classified as held-for-sale. With the exception of one industrial property mentioned above, each of these properties was under development on that date and had no operations. Net operating income (defined as total property revenues, less property expenses, which include real estate taxes, repairs and maintenance, property management, utilities, insurance and other expenses) of the properties held-for-sale for the years ended December 31, 2003, 2002 and 2001 was approximately $206,000, $89,000 and $88,000, respectively. The net book value of the properties held-for-sale at December 31, 2003, was approximately $47.2 million.

 

In 2003 the Partnership recorded $1.1 million of impairment adjustments for one industrial building and three land parcels that were held-for-sale. These adjustments reflect the write-down of the carrying value of the properties to their projected sales price, less selling expenses, once it became probable that the properties would be sold.  Each of these properties was later sold in 2003.

 

The Partnership recorded a $9.4 million impairment adjustment for six properties in 2002. This total consisted of a $7.7 million adjustment for three industrial properties and a $1.7 million adjustment for three office properties. The properties were identified as impaired upon the comparison of their projected undiscounted cash flows to their carrying value. The impairment adjustment reflects the write-down of the carrying value of the properties to their estimated fair market value. In estimating fair market value, management considers valuation factors used by independent appraisers, including the sales of comparable properties, replacement cost and the capitalization of future expected net operating income.

 

In 2001, the Partnership recorded a $4.8 million impairment adjustment for an industrial property that was sold in 2002. This adjustment reflected the write-down of the carrying value of that property to an amount equal to its projected sales price, less selling expenses, once it became probable the property would be sold.

 

(6)                                 Indebtedness

 

Indebtedness at December 31 consists of the following (in thousands):

 

 

 

2003

 

2002

 

Fixed rate secured debt, weighted average interest rate of 6.94% at December 31, 2003, and 7.35% at December 31, 2002, maturity dates ranging from 2004 to 2017

 

$

153,460

 

$

259,376

 

 

 

 

 

 

 

Variable rate secured debt, weighted average interest rate of 2.42% at December 31, 2003, and 1.71% at December 31, 2002, maturity dates ranging from 2006 to 2025

 

55,189

 

39,771

 

 

 

 

 

 

 

Fixed rate unsecured notes, weighted average interest rate of 6.41% at December 31, 2003, and 6.95% at December 31, 2002, maturity dates ranging from 2004 to 2028

 

1,775,887

 

1,526,138

 

 

 

 

 

 

 

Unsecured line of credit, interest rate of 1.77% at December 31, 2003, and 2.07% at December 31, 2002, maturity date of 2007

 

351,000

 

281,000

 

 

 

$

2,335,536

 

$

2,106,285

 

 

The fair value of the Partnership’s indebtedness as of December 31, 2003, was $2.5 billion.

 

As of December 31, 2003, the $208.6 million of secured debt was collateralized by rental properties with a carrying value of $453.7 million and by letters of credit in the amount of $15 million.

 

The Partnership had one unsecured line of credit available at December 31, 2003, described as follows (in thousands):

 

50



 

Description

 

Borrowing
Capacity

 

Maturity
Date

 

Interest
Rate

 

Outstanding
at December
31, 2003

 

Unsecured Line of Credit

 

$

500,000

 

February 2004

 

LIBOR + .65%

 

$

351,000

 

 

In January 2004, the line of credit was extended through January 2007 at an interest rate of LIBOR plus .60%. The line of credit is used to fund development activities and acquire additional rental properties and to provide working capital.

 

At December 31, 2003, the scheduled amortization and maturities of all indebtedness for the next five years and thereafter were as follows (in thousands):

 

Year

 

Amount

 

2004

 

$

174,898

 

2005

 

213,729

 

2006

 

187,512

 

2007

 

571,458

 

2008

 

138,950

 

Thereafter

 

1,048,989

 

 

 

$

2,335,536

 

 

The amount of interest paid in 2003, 2002, and 2001 was $130.1 million, $125.9 million and $140.5 million, respectively. The amount of interest capitalized in 2003, 2002 and 2001 was $6.7 million, $13.5 million and $25.9 million, respectively.

 

In January 2004, the Partnership issued $125.0 million of unsecured debt having an effective interest rate of 3.36% due 2008.

 

The indenture governing the Partnership’s unsecured notes also requires the Partnership to comply with financial ratios and other covenants regarding the operations of the Partnership. At December 31, 2003, the Partnership is in compliance with all such covenants and expects to remain in compliance for the foreseeable future.

 

(7)                                 Segment Reporting

 

The Partnership is engaged in four operating segments: the ownership and rental of office, industrial and retail real estate investments (collectively, “Rental Operations”), and the providing of various real estate services such as property management, maintenance, leasing, development and construction management to third-party property owners (“Service Operations”). The Partnership’s reportable segments offer different products or services and are managed separately because each requires different operating strategies and management expertise. There are no material intersegment sales or transfers.

 

Non-segment revenue consists mainly of equity in earnings of unconsolidated companies. Non-segment assets consist of corporate assets including cash, deferred financing costs and investments in unconsolidated companies. Interest expense and other non-property specific revenues and expenses are not allocated to individual segments in determining the Partnership’s performance measure.

 

The Partnership assesses and measures segment operating results based upon an industry performance measure referred to as Funds From Operations (“FFO”), which management believes is a useful indicator of the Partnership’s operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust (“REIT”). FFO is calculated in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO, as defined by NAREIT, represents net income (loss) determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after adjustment for unconsolidated partnerships and joint ventures.

 

51



 

The revenues and FFO for each of the reportable segments for the years ended December 31, 2003, 2002, and 2001, and the assets of each reportable segment as of December 31, 2003 and 2002 are summarized as follows (in thousands):

 

 

 

2003

 

2002

 

2001

 

Revenues

 

 

 

 

 

 

 

Rental Operations:

 

 

 

 

 

 

 

Office

 

$

421,660

 

$

396,022

 

$

377,187

 

Industrial

 

273,307

 

265,129

 

274,495

 

Retail

 

7,999

 

6,885

 

18,165

 

Service Operations

 

58,496

 

68,580

 

80,459

 

Total Segment Revenues

 

761,462

 

736,616

 

750,306

 

Non-Segment Revenue

 

27,471

 

30,036

 

31,167

 

Consolidated Revenue from continuing operations

 

788,933

 

766,652

 

781,473

 

Discontinued Operations

 

12,495

 

20,910

 

22,335

 

Consolidated Revenue

 

$

801,428

 

$

787,562

 

$

803,808

 

 

 

 

 

 

 

 

 

Funds From Operations

 

 

 

 

 

 

 

Rental Operations:

 

 

 

 

 

 

 

Office

 

$

274,164

 

$

264,533

 

$

254,130

 

Industrial

 

205,231

 

205,115

 

215,156

 

Retail

 

6,593

 

5,947

 

14,993

 

Services Operations

 

21,118

 

29,520

 

35,115

 

Total Segment FFO

 

507,106

 

505,115

 

519,394

 

 

 

 

 

 

 

 

 

Non-Segment FFO:

 

 

 

 

 

 

 

Interest expense

 

(129,160

)

(114,675

)

(109,544

)

Interest income

 

3,590

 

3,783

 

5,037

 

General and administrative expense

 

(21,342

)

(24,704

)

(15,539

)

Gain on land sales

 

7,135

 

4,478

 

5,080

 

Impairment charges on depreciable property

 

(500

)

(9,379

)

(4,800

)

Other expenses

 

(2,765

)

(330

)

(3,899

)

Minority interest in earnings of subsidiaries

 

(586

)

(1,093

)

(2,411

)

Joint Venture FFO

 

42,526

 

44,778

 

45,570

 

Dividends on preferred units

 

(39,225

)

(52,613

)

(60,850

)

Adjustment for redemption of preferred units

 

 

(8,145

)

(2,538

)

Discontinued operations

 

5,740

 

11,656

 

12,855

 

Consolidated FFO

 

372,519

 

358,871

 

388,355

 

 

 

 

 

 

 

 

 

Depreciation and amortization on continuing operations

 

(193,441

)

(170,938

)

(153,909

)

Depreciation and amortization on discontinued operations

 

(2,793

)

(4,683

)

(5,805

)

Share of joint venture adjustments

 

(18,839

)

(17,598

)

(14,177

)

Earnings (loss) from depreciated property sales on continuing operations

 

 

7,241

 

45,428

 

Earnings (loss) from depreciated property sales on discontinued operations

 

22,141

 

(1,292

)

 

Net income available for common unitholders

 

$

179,587

 

$

171,601

 

$

259,892

 

 

 

 

December 31,
2003

 

December 31,
2002

 

Assets

 

 

 

 

 

Rental Operations

 

 

 

 

 

Office

 

$

2,884,834

 

$

2,677,427

 

Industrial

 

2,177,483

 

2,144,686

 

Retail

 

47,293

 

71,072

 

Service Operations

 

111,318

 

91,399

 

Total Segment Assets

 

5,220,928

 

4,984,584

 

Non-Segment Assets

 

337,783

 

362,471

 

Consolidated Assets

 

$

5,558,711

 

$

5,347,055

 

 

In addition to revenues and FFO, the Partnership also reviews its recurring capital expenditures in measuring the performance of its individual segments. These recurring capital expenditures consist of tenant improvements, leasing commissions and building improvements. These expenditures are reviewed by the Partnership to determine the costs associated with re-leasing vacant space. The Partnership’s recurring capital expenditures by segment are summarized as follows for the years ended December 31, 2003, 2002 and 2001, respectively (in thousands):

 

 

 

2003

 

2002

 

2001

 

Recurring Capital Expenditures

 

 

 

 

 

 

 

Office

 

$

44,602

 

$

31,616

 

$

20,426

 

Industrial

 

31,711

 

27,398

 

22,176

 

Retail

 

135

 

345

 

532

 

Total

 

$

76,448

 

$

59,359

 

$

43,134

 

 

52



 

(8)                                 Leasing Activity

 

Future minimum rents due to the Partnership under non-cancelable operating leases at December 31, 2003, are as follows (in thousands):

 

Year

 

Amount

 

 

 

 

 

2004

 

 

$

558,432

 

2005

 

 

505,625

 

2006

 

 

434,301

 

2007

 

 

368,852

 

2008

 

 

298,722

 

Thereafter

 

 

912,439

 

 

 

$

3,078,371

 

 

In addition to minimum rents, certain leases require reimbursements of specified operating expenses that amounted to $130.3 million, $120.1 million, and $115.7 million for the years ended December 31, 2003, 2002 and 2001, respectively.

 

(9)                                 Employee Benefit Plans

 

The Partnership maintains a 401(k) plan for its full-time employees. The Partnership makes matching contributions up to an amount equal to three percent of the employees’ salary and may also make annual discretionary contributions. The total expense recognized by the Partnership for this plan was $1.6 million, $1.7 million and $1.3 million for the years ended 2003, 2002 and 2001, respectively.

 

The Partnership makes contributions to a contributory health and welfare plan as necessary to fund claims not covered by employee contributions. The total expense recognized by the Partnership related to this plan was $6.4 million, $4.9 million and $5.6 million for 2003, 2002 and 2001, respectively. These expense amounts include estimates based upon the historical experience of claims incurred but not reported as of year-end.

 

(10)                          Partners’ Equity

 

The General Partner periodically accesses the public equity markets to fund the development and acquisition of additional rental properties or to pay down debt. The proceeds of these offerings are contributed to the Partnership in exchange for an additional interests in the Partnership.

 

The following series of preferred units were outstanding as of December 31, 2003 (in thousands, except percentages):

 

Description

 

Units
Outstanding

 

Dividend
Rate

 

Redemption
Date

 

Liquidation
Preference

 

Convertible

 

 

 

 

 

 

 

 

 

 

 

 

 

Series B Preferred

 

265

 

7.990

%

September 30, 2007

 

$

132,250

 

No

 

Series D Preferred

 

533

 

7.375

%

December 31, 2003

 

133,257

 

Yes

 

Series E Preferred

 

400

 

8.250

%

January 20, 2004

 

100,000

 

No

 

Series I Preferred

 

300

 

8.450

%

February 6, 2006

 

75,000

 

No

 

Series J Preferred

 

400

 

6.6250

%

August 29, 2008

 

100,000

 

No

 

 

All series of preferred equity require cumulative distributions and have no stated maturity date (although the General Partner may redeem them on or following their optional redemption dates).

 

The Series B, Series E, Series I and Series J Preferred units may be redeemed only at the General Partner’s option, in whole or in part. The Series D Preferred units may be redeemed at the General Partner’s option in whole or in part, as well as at the option of a shareholder’s estate, upon the death of a shareholder.

 

The General Partner issued $100 million of Series J Preferred units in August 2003.

 

The Series D Preferred units are convertible at a conversion rate of ..93677 General Partner common shares for each preferred unit outstanding.

 

53



 

The distribution rate on the Series B Preferred units increases to 9.99% after September 12, 2012. The General Partner repurchased 355,000 shares is Series B Preferred stock in September 2002, which resulted in the repurchase of 355,000 Series B Preferred units by the Partnership from the General Partner. The repurchase transaction was initiated by a group of Series B Preferred stockholders who voluntarily approached the General Partner with an opportunity for the General Partner to buyback these shares before their earliest stated redemption date.

 

The General Partner and the Partnership redeemed its $150.0 million Series F Preferred units in October 2002 at par value. Effective August 31, 2002, the Partnership terminated a shareholder rights plan that had included the potential issuance of Series C Junior Preferred units.

 

The General Partner and the Partnership redeemed the $100.0 million Series E Preferred units on January 20, 2004, at par value.

 

(11)                          Stock Based Compensation

 

At December 31, 2003, the General Partner had nine stock-based employee compensation plans that are described more fully below. The General Partner is authorized to issue up to 7,812,984 shares of the General Partner’s stock under these Plans.

 

Fixed Stock Option Plans

 

The General Partner had options outstanding under six fixed stock option plans as of December 31, 2003. Additional grants may be made under three of those plans.

 

A summary of the status of the fixed stock option plans as of December 31, 2003, 2002 and 2001 and changes during the years ended on those dates follows:

 

 

 

2003

 

2002

 

2001

 

 

 

Shares

 

Weighted
Average
Exercise
Price

 

Shares

 

Weighted
Average
Exercise
Price

 

Shares

 

Weighted
Average
Exercise
Price

 

Outstanding, beginning of year

 

3,920,198

 

$

22.09

 

4,691,659

 

$

21.12

 

5,235,464

 

$

19.52

 

Granted

 

609,390

 

25.48

 

676,038

 

23.37

 

718,320

 

24.98

 

Exercised

 

(773,625

)

21.87

 

(1,203,534

)

18.82

 

(982,243

)

15.21

 

Forfeited

 

(169,603

)

23.63

 

(243,965

)

22.96

 

(279,882

)

21.84

 

Outstanding, end of year

 

3,586,360

 

22.65

 

3,920,198

 

22.09

 

4,691,659

 

21.12

 

Options exercisable, end of year

 

2,014,875

 

 

 

2,297,500

 

 

 

2,965,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average fair value of options granted during the year

 

$

1.81

 

 

 

$

2.05

 

 

 

$

2.19

 

 

 

 

The fair values of the options were determined using the Black-Scholes option-pricing model with the following assumptions:

 

 

 

2003

 

2002

 

2001

 

Dividend yield

 

7.25

%

7.25

%

7.50

%

Volatility

 

20.0

%

20.0

%

20.1

%

Risk-free interest rate

 

3.2

%

4.7

%

5.0

%

Expected life

 

6 years

 

6 years

 

6 years

 

 

The options outstanding at December 31, 2003, under the fixed stock option plans have a range of exercise prices from $12.94 to $29.23 with a weighted average exercise price of $22.65 and a weighted average remaining contractual life of 6.17 years. The options exercisable at December 31, 2003 have a weighted average exercise price of $21.61.

 

Each option’s maximum term is ten years. With limited exceptions, options vest at 20% per year, or, if earlier, upon the death, retirement or disability of the optionee or a change in control of the General Partner.

 

54



 

Performance Based Stock Plans

 

Performance shares are granted under the 2000 Performance Share Plan, with each performance share economically equivalent to one share of the General Partner’s common stock. The performance shares vest over a 5-year period with the vesting percentage for a year dependent upon the General Partner’s attainment of certain predefined levels of earnings growth for such year. The value of vested performance shares are payable in cash upon the retirement or termination of employment of the participant. At December 31, 2003, plan participants had the right to receive up to 64,849 performance shares, of which 33,350 were vested and 31,499 were contingent upon future earnings achievement.

 

The amount of compensation cost was based upon the intrinsic value of the vested performance shares at the end of each applicable reporting period. The compensation cost that was charged against income for this plan was $529,000, $96,000 and $201,000 for 2003, 2002 and 2001, respectively.

 

In October 2002, the General Partner amended its Shareholder Value Plan (“SVP Plan”) and Dividend Increase Unit Plans (“DIU Plans”) by requiring that all payouts under these two plans to be in cash only. Payments made under the SVP Plan are based upon the General Partner’s cumulative shareholder return for a three-year period as compared to the cumulative total return of the S&P 500 and the NAREIT Equity REIT Total Return indices. Payments under the DIU Plans are based upon increases in the General Partner’s dividend per common share. The total compensation cost that was charged against income for these two plans was $1.6 million, $4.6 million and $6.0 million for 2003, 2002 and 2001, respectively.

 

Directors Stock Payment Plan

 

Under the General Partner’s 1999 Directors’ Stock Payment Plan, non-employee members of the General Partner’s Board of Directors are entitled to 1,200 shares of its common shares per year as partial compensation for services as a board member. The shares are fully vested when issued and the Partnership records the value of the shares as an expense. The amount of that expense was $415,000, $274,000 and $260,000 for 2003, 2002 and 2001, respectively.

 

Employee Stock Purchase Plan

 

Under the General Partner’s Employee Stock Purchase Plan, employees are entitled to purchase the General Partner’s common stock at a 15% discount through payroll deductions. Under SFAS 123, the Partnership is required to record the amount of the discount as compensation expense. The amount of that expense for 2003 and 2002 was $219,000 and $181,000, respectively.

 

(12)                          Financial Instruments

 

In December 2002, the Partnership simultaneously entered into two $50 million forward-starting interest rate swaps as a hedge to effectively fix the rate on unsecured debt financings expected in 2003. The fair value of the swaps was a liability of $2.1 million as of December 31, 2002, and was recorded in other liabilities in the accompanying balance sheet.

 

In February 2003, the Partnership simultaneously entered into two additional $25 million forward-starting interest rate swaps as a hedge to effectively fix the rate on unsecured debt financings expected in 2003. All four swaps qualified for hedge accounting under SFAS 133; therefore, changes in fair value were recorded in other comprehensive income.

 

In July 2003, the Partnership terminated the swaps for a net gain of $643,000, which is included in other revenue in the Statements of Operations. The swaps were terminated because the Partnership’s capital needs were met through the issuance of the Series J Preferred equity in lieu of the previously contemplated issuance of debt.

 

55



 

During the years ended December 31, 2002 and 2001, the Partnership recorded a $1.4 million gain and a $1.4 million loss, respectively, associated with an interest rate contract that did not qualify for hedge accounting.  The contract expired on December 30, 2002.

 

In July 2001, the Partnership terminated three interest rate swaps that were tied to an $85 million unsecured term loan. The swaps qualified for hedge accounting under SFAS 133. The costs to terminate the swaps was $548,000, which was recorded as interest expense and reversed out of other comprehensive income.

 

In May 2003, the FASB issued SFAS No. 150 Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). SFAS 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS 150 is effective for all financial instruments created or modified after May 31, 2003, and otherwise is effective July 1, 2003. The Partnership includes the operations of five joint ventures in its consolidated financial statements. These joint ventures are partially owned by unaffiliated parties that have noncontrolling interests. SFAS 150 requires the disclosure of the estimated settlement value of these noncontrolling interests. As of December 31, 2003, the estimated settlement value of these noncontrolling interests was approximately $4.3 million as compared to the minority interest liability recorded on the Partnership’s books for these joint ventures of $1.2 million.

 

(13)                          Recent Accounting Pronouncements

 

In July of 2003, the SEC issued a Staff Policy Statement that clarified the application of FASB-EITF Topic D-42 (Topic D-42), “The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Equity.” Under Topic D-42, the difference between the amounts paid to the holders of preferred equity upon redemption and the carrying amount of the preferred equity on the issuer’s balance sheet must be subtracted from net income when computing earnings per share. The Staff Policy Statement clarified that, in computing the reduction in net income, the carrying amount of the preferred equity should be reduced by the issuance costs of the preferred equity. As a result of this clarification, the Partnership’s net income per unit was restated for 2002 and 2001. The impact of this restatement is summarized as follows:

 

 

 

Twelve Months Ended December 31,

 

 

 

2002

 

2001

 

Net income available for common unitholders:

 

 

 

 

 

Prior to Topic D-42

 

179,746

 

$

262,430

 

Post adoption of Topic D-42

 

171,601

 

$

259,892

 

 

 

 

 

 

 

Basic net income per common unit:

 

 

 

 

 

Prior to Topic D-42

 

$

1.20

 

$

1.77

 

Post adoption of Topic D-42

 

$

1.15

 

$

1.76

 

 

 

 

 

 

 

Diluted net income per common unit:

 

 

 

 

 

Prior to Topic D-42

 

$

1.19

 

$

1.75

 

Post adoption of Topic D-42

 

$

1.14

 

$

1.74

 

 

In January 2003, FASB issued Interpretation 46, Consolidation of Variable Interest Entities (“Interpretation 46”), which addresses the consolidation of certain entities in which a company has a controlling financial interest through means other than voting rights. This interpretation was revised in December 2003.  For calendar year companies, Interpretation 46 contains an effective date of December 31, 2003 for special purpose entities and periods ending after March 15, 2004 for all other entities. The Partnership does not own interests in special purpose entities and management does not believe that the adoption of Interpretation 46 will have a material impact on the Partnership’s financial statements.

 

(14)                          Commitments and Contingencies

 

In 1998 and 1999, certain members of management and the Board of Directors of the General Partner purchased $69 million of common stock in connection with an Executive and Senior Officer Stock Purchase

 

56



 

Plan. The purchases were financed by five-year personal loans at market interest rates from financial institutions. As of December 31, 2003, the outstanding balance on these loans was $11.7 million as some participants have exited the program and repaid their principal balance. These loans were secured by common shares with a fair market value of 18.2 million purchased through this program and owned by the remaining plan participants at December 31, 2003. As a condition of the financing agreement with the financial institution, the Partnership guaranteed repayment of principal, interest and other obligations for each participant, but is fully indemnified by the participants. In the opinion of management, it is not probable that the Partnership will be required to satisfy these guarantees.

 

In October 2000, the Partnership sold or contributed industrial properties and undeveloped land with a fair value of $487 million to a joint venture (Dugan Realty LLC) in which the Partnership has a 50% interest and recognized a net gain of $35.2 million. This transaction expanded an existing joint venture with an institutional real estate investor. As a result of the total transactions, the Partnership received $363.9 million of proceeds. The joint venture partially financed this transaction with $350 million of secured mortgage debt, the repayment of which was directly or indirectly guaranteed by the Partnership. The guarantee associated with $260 million of such debt expired in December 2003 without the Partnership being required to satisfy the guarantee. The remaining $90 million of such debt is still guaranteed by the Partnership. In connection with this transaction, the joint venture partners were given an option to put up to a $50 million interest in the joint venture to the Partnership in exchange for common stock of the Partnership or cash (at the option of the Partnership), subject to certain timing and other restrictions. As a result of this put option, the Partnership deferred $10.2 million of gain on sale of depreciated property and recorded a $50 million liability.

 

The Partnership has guaranteed the repayment of $3.5 million of economic development bonds issued by the City of Carmel, Indiana. The Partnership will be required to make payments under its guarantee to the extent that incremental taxes from one of its office park developments are not sufficient to pay the bond debt service.  Management does not believe that it is probable that the Partnership will be required to make any significant payments in satisfaction of this guarantee.

 

The Partnership has also guaranteed the repayment of a $2 million mortgage loan encumbering the real estate of one its unconsolidated joint ventures. Management believes that the value of the real estate exceeds the loan balance and that the Partnership will not be required to satisfy this guarantee.

 

The Partnership has entered into agreements, subject to the completion of due diligence requirements, resolution of certain contingencies and completion of customary closing conditions, for the future acquisition of land totaling $13.8 million. The acquisitions are scheduled to close periodically through 2004 and will be paid for by cash.

 

The Partnership renewed all of its major insurance policies in 2003. These policies include coverage for acts of terrorism for its properties. The Partnership believes that this insurance provides adequate coverage against normal insurance risks and that any loss experienced would not have a significant impact on the Partnership’s liquidity, financial position, or results of operations.

 

Broadband Office, Inc. and Official Committee of Unsecured Creditors of Broadband Office, Inc. recently filed a complaint against a group of real estate investment trusts and real estate operating companies and certain affiliated entities and individuals in connection with the formation and management of Broadband Office. Among the defendants are the General Partner, the Partnership and Mr. Dennis Oklak, one of the General Partner’s executive officers. The complaint alleges various breaches of purported fiduciary duties by the defendants, seeks recharacterization or equitable subordination of debt, seeks recovery of alleged avoidable transfers, appears to seek to hold them liable for, among other things, the debt of Broadband Office under alter-ego, veil-piercing and partnership theories, and seeks other relief under other theories. The complaint seeks aggregate damages in excess of $300 million from all of the defendants. The Partnership

 

57



 

believes that it has meritorious defenses to the plaintiff’s allegations and intends to vigorously defend this litigation. Due to the inherent uncertainties of the litigation process and the judicial system, the Partnership is not able to predict the outcome of this litigation. If this litigation is not resolved in the Partnership’s favor, it could have a material adverse effect on its business, financial condition and results of operations.

 

The Partnership is subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability with respect to these actions will not materially affect the Partnership’s consolidated financial statements or results of operations.

 

58



 

DUKE REALTY LIMITED PARTNERSHIP

 

Schedule 3

REAL ESTATE AND ACCUMULATED DEPRECIATION

 

 

DECEMBER 31, 2003

 

 

(IN THOUSANDS)

 

 

 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ALPHARETTA, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brookside Office Park

 

3925 Brookside Parkway

 

Office

 

 

 

1,269

 

14,749

 

7

 

1,269

 

14,755

 

16,025

 

1,666

 

1998

 

1999

 

Brookside Office Park

 

3625 Brookside Parkway

 

Office

 

 

 

1,625

 

11,070

 

2,639

 

1,625

 

13,709

 

15,334

 

2,665

 

1999

 

1999

 

Brookside Office Park

 

Radiant II

 

Office

 

 

 

831

 

7,294

 

115

 

831

 

7,409

 

8,240

 

518

 

2000

 

2000

 

Brookside Office Park

 

Brookside II

 

Office

 

 

 

1,381

 

12,278

 

1,060

 

1,381

 

13,338

 

14,720

 

1,130

 

2000

 

2001

 

Hembree Crest

 

11800 Wills Road

 

Industrial

 

 

 

304

 

2,152

 

275

 

304

 

2,427

 

2,731

 

357

 

1987

 

1999

 

Hembree Crest

 

11810 Wills Road

 

Industrial

 

 

 

296

 

2,260

 

240

 

296

 

2,500

 

2,796

 

407

 

1987

 

1999

 

Hembree Crest

 

11820 Wills Road

 

Industrial

 

 

 

488

 

2,285

 

872

 

488

 

3,157

 

3,645

 

352

 

1987

 

1999

 

Hembree Crest

 

11415 Old Roswell Road

 

Industrial

 

 

 

648

 

2,463

 

1,039

 

648

 

3,502

 

4,150

 

599

 

1991

 

1999

 

Hembree Park

 

1750 Founders

 

Industrial

 

 

 

1,936

 

7,794

 

282

 

1,936

 

8,076

 

10,012

 

1,640

 

1999

 

2000

 

Hembree Park

 

NMeadow SC II @ Founders

 

Industrial

 

 

 

1,369

 

3,620

 

985

 

1,369

 

4,605

 

5,974

 

275

 

2001

 

2001

 

North Meadow

 

1350 Northmeadow Parkway

 

Industrial

 

 

 

672

 

3,658

 

260

 

672

 

3,918

 

4,590

 

559

 

1994

 

1999

 

North Meadow

 

11835 Alpharetta Highway

 

Retail

 

 

 

524

 

2,869

 

40

 

524

 

2,909

 

3,433

 

321

 

1994

 

1999

 

Northwinds Pointe

 

2550 Northwinds Parkway

 

Office

 

 

 

2,271

 

20,070

 

351

 

2,271

 

20,421

 

22,692

 

2,319

 

1998

 

1999

 

Ridgeland

 

1320 Ridgeland Pkwy

 

Industrial

 

 

 

998

 

5,890

 

37

 

998

 

5,927

 

6,924

 

656

 

1999

 

1999

 

Ridgeland

 

Ridgeland Business Dist I

 

Industrial

 

 

 

488

 

2,966

 

1,346

 

488

 

4,312

 

4,801

 

1,398

 

1999

 

1999

 

Ridgeland

 

Ridgeland Business Dist. II

 

Industrial

 

 

 

579

 

2,536

 

28

 

579

 

2,564

 

3,143

 

448

 

1999

 

2000

 

Windward

 

800 North Point Parkway

 

Office

 

 

 

1,250

 

18,274

 

 

1,250

 

18,274

 

19,524

 

392

 

1991

 

2003

 

Windward

 

900 North Point Parkway

 

Office

 

 

 

1,250

 

13,842

 

 

1,250

 

13,842

 

15,092

 

300

 

1991

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANTIOCH, TENNESSEE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jackson Business Center

 

Keebler

 

Industrial

 

 

 

307

 

1,305

 

20

 

307

 

1,325

 

1,632

 

282

 

1985

 

1995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARLINGTON HEIGHTS, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Arlington Business Park

 

Atrium II

 

Office

 

 

 

776

 

7,230

 

1,041

 

776

 

8,272

 

9,047

 

1,395

 

1986

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ATLANTA, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Druid Chase

 

6 W. Druid Hills Drive

 

Office

 

 

 

473

 

6,758

 

1,469

 

473

 

8,227

 

8,700

 

901

 

1968

 

1999

 

Druid Chase

 

2801 Buford Highway

 

Office

 

 

 

794

 

9,905

 

1,572

 

794

 

11,477

 

12,271

 

1,431

 

1977

 

1999

 

Druid Chase

 

1190 W. Druid Hills Drive

 

Office

 

 

 

689

 

6,631

 

784

 

689

 

7,416

 

8,105

 

790

 

1980

 

1999

 

Druid Chase

 

2071 N. Druid Hills Drive

 

Retail

 

 

 

98

 

321

 

0

 

98

 

321

 

419

 

36

 

1968

 

1999

 

Gwinnett Park

 

Gwinnett Park Land

 

Grounds

 

 

 

 

 

 

 

30

 

30

 

 

30

 

2

 

 

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AURORA, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meridian Business Campus

 

535 Exchange

 

Industrial

 

 

 

386

 

925

 

64

 

386

 

989

 

1,374

 

140

 

1984

 

1999

 

Meridian Business Campus

 

515-525 North Enterprise

 

Industrial

 

 

 

342

 

1,686

 

120

 

342

 

1,805

 

2,147

 

286

 

1984

 

1999

 

Meridian Business Campus

 

615 Enterprise

 

Industrial

 

 

 

468

 

2,824

 

527

 

468

 

3,351

 

3,819

 

424

 

1984

 

1999

 

Meridian Business Campus

 

3615 Exchange

 

Industrial

 

 

 

410

 

1,610

 

59

 

410

 

1,669

 

2,079

 

242

 

1986

 

1999

 

Meridian Business Campus

 

4000 Sussex

 

Industrial

 

 

 

417

 

1,946

 

32

 

417

 

1,977

 

2,395

 

279

 

1990

 

1999

 

Meridian Business Campus

 

3737 East Exchange

 

Industrial

 

 

 

598

 

2,552

 

27

 

598

 

2,579

 

3,177

 

362

 

1985

 

1999

 

Meridian Business Campus

 

444 North Commerce

 

Industrial

 

 

 

722

 

5,443

 

411

 

722

 

5,855

 

6,577

 

829

 

1985

 

1999

 

Meridian Business Campus

 

Meridian I

 

Industrial

 

 

 

1,150

 

6,703

 

148

 

1,150

 

6,852

 

8,001

 

1,425

 

1999

 

2000

 

Meridian Business Campus

 

Meridian II

 

Industrial

 

 

 

567

 

184

 

1,701

 

567

 

1,885

 

2,451

 

26

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BEACHWOOD, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Exchange

 

One Corporate Exchange

 

Office

 

5,610

 

1,287

 

8,764

 

1,013

 

1,287

 

9,777

 

11,064

 

2,001

 

1989

 

1996

 

Corporate Place

 

Corporate Place

 

Office

 

 

 

1,161

 

7,872

 

686

 

1,163

 

8,556

 

9,719

 

1,611

 

1988

 

1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BLOOMINGTON, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alpha Buildings

 

Alpha Business Ctr I&II

 

Office

 

 

 

280

 

1,624

 

271

 

280

 

1,895

 

2,175

 

290

 

1980

 

1999

 

Alpha Buildings

 

Alpha Business Ctr III&IV

 

Industrial

 

 

 

341

 

1,973

 

198

 

341

 

2,171

 

2,512

 

312

 

1980

 

1999

 

Alpha Buildings

 

Alpha Business Ctr V

 

Industrial

 

 

 

537

 

3,107

 

183

 

538

 

3,290

 

3,827

 

422

 

1980

 

1999

 

Bloomington Industrial Center

 

Bloomington Industrial Center

 

Industrial

 

1,366

 

621

 

3,668

 

770

 

621

 

4,438

 

5,059

 

1,016

 

1963

 

1997

 

Hampshire Dist. Center

 

Hampshire Dist Center North

 

Industrial

 

2,049

 

779

 

4,506

 

130

 

779

 

4,636

 

5,415

 

699

 

1979

 

1997

 

Hampshire Dist. Center

 

Hampshire Dist Center South

 

Industrial

 

2,453

 

901

 

5,239

 

303

 

901

 

5,541

 

6,443

 

917

 

1979

 

1997

 

Hampshire Tech Center

 

Hampshire Tech Center

 

Industrial

 

 

 

2,124

 

13,123

 

773

 

2,223

 

13,797

 

16,020

 

2,416

 

1998

 

1998

 

Lyndale Commons

 

Lyndale Commons I

 

Industrial

 

 

 

247

 

1,449

 

134

 

247

 

1,583

 

1,830

 

286

 

1981

 

1998

 

Lyndale Commons

 

Lyndale Commons II

 

Industrial

 

 

 

181

 

1,056

 

251

 

183

 

1,305

 

1,488

 

261

 

1985

 

1998

 

Norman Center

 

Norman Center 4

 

Office

 

 

 

562

 

3,276

 

247

 

579

 

3,507

 

4,085

 

547

 

1967

 

1998

 

Norman Center Plaza

 

Norman Pointe I

 

Office

 

 

 

3,660

 

28,292

 

1,895

 

3,673

 

30,174

 

33,847

 

2,346

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BLUE ASH, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alliance Woods

 

McAuley Place

 

Office

 

 

 

2,331

 

18,677

 

978

 

2,331

 

19,656

 

21,986

 

1,371

 

2000

 

2001

 

 

59



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Cornell Commerce Center

 

Cornell Commerce Center

 

Industrial

 

 

 

495

 

4,811

 

242

 

495

 

5,052

 

5,548

 

1,038

 

1989

 

1996

 

Creek Road

 

Creek Road Bldg 1

 

Industrial

 

 

 

103

 

833

 

59

 

103

 

893

 

995

 

158

 

1971

 

1996

 

Creek Road

 

Creek Road Bldg 2

 

Industrial

 

 

 

132

 

1,155

 

79

 

132

 

1,234

 

1,365

 

223

 

1971

 

1996

 

Huntington Bank Building

 

Huntington Bank Building

 

Office

 

 

 

175

 

241

 

0

 

175

 

241

 

416

 

43

 

1986

 

1996

 

Lake Forest/Westlake

 

Lake Forest Place

 

Office

 

 

 

1,953

 

20,289

 

1,853

 

1,953

 

22,142

 

24,095

 

4,596

 

1985

 

1996

 

Lake Forest/Westlake

 

Westlake Center

 

Office

 

 

 

2,459

 

16,959

 

1,588

 

2,459

 

18,547

 

21,005

 

3,649

 

1981

 

1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BOLINGBROOK, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bolingbrook (ComEd)

 

555 Joliet Road

 

Industrial

 

 

 

2,184

 

9,284

 

92

 

2,184

 

9,376

 

11,560

 

424

 

1967

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BRANDON, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regency Park North

 

Regency I

 

Office

 

 

 

1,048

 

4,254

 

111

 

1,048

 

4,365

 

5,413

 

883

 

2000

 

2000

 

Regency Park North

 

Regency II

 

Office

 

 

 

1,411

 

3,696

 

(0

)

1,411

 

3,696

 

5,107

 

455

 

2001

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BRASELTON, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Braselton

 

Braselton II

 

Industrial

 

 

 

1,365

 

9,528

 

166

 

1,529

 

9,530

 

11,059

 

488

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BRENTOOD, TENNESSEE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brentwood South Bus. Center

 

7104 Crossroads Blvd

 

Industrial

 

 

 

1,065

 

6,011

 

479

 

1,065

 

6,489

 

7,555

 

772

 

1987

 

1999

 

Brentwood South Bus. Center

 

7106 Crossroads Blvd

 

Industrial

 

 

 

1,065

 

2,846

 

927

 

1,065

 

3,773

 

4,838

 

437

 

1987

 

1999

 

Brentwood South Bus. Center

 

7108 Crossroads Blvd

 

Industrial

 

 

 

848

 

4,152

 

313

 

848

 

4,465

 

5,313

 

527

 

1989

 

1999

 

Creekside Crossing

 

Creekside Crossing One

 

Office

 

 

 

1,900

 

8,485

 

415

 

1,901

 

8,899

 

10,800

 

2,113

 

1997

 

1998

 

Creekside Crossing

 

Creekside Crossing Two

 

Office

 

 

 

2,087

 

9,692

 

556

 

2,087

 

10,249

 

12,335

 

2,116

 

1999

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BROOKLYN PARK, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7300 Northland Drive

 

7300 Northland Drive

 

Industrial

 

 

 

700

 

6,547

 

0

 

703

 

6,544

 

7,247

 

1,258

 

1980

 

1998

 

Crosstown North

 

Crosstown North Bus. Ctr. 1

 

Industrial

 

 

 

835

 

5,480

 

1,013

 

1,286

 

6,042

 

7,328

 

964

 

1998

 

1999

 

Crosstown North

 

Crosstown North Bus. Ctr. 2

 

Industrial

 

 

 

449

 

2,970

 

368

 

599

 

3,188

 

3,787

 

521

 

1998

 

1999

 

Crosstown North

 

Crosstown North Bus. Ctr. 3

 

Industrial

 

 

 

758

 

2,753

 

142

 

837

 

2,815

 

3,652

 

826

 

1999

 

1999

 

Crosstown North

 

Crosstown North Bus. Ctr. 4

 

Industrial

 

 

 

2,079

 

8,165

 

969

 

2,397

 

8,816

 

11,213

 

1,719

 

1999

 

1999

 

Crosstown North

 

Crosstown North Bus. Ctr. 5

 

Industrial

 

 

 

1,079

 

5,615

 

212

 

1,354

 

5,552

 

6,906

 

985

 

1999

 

2000

 

Crosstown North

 

Crosstown North Bus. Ctr. 6

 

Industrial

 

 

 

788

 

3,666

 

1,410

 

1,031

 

4,834

 

5,864

 

625

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BURNSVILLE, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CANAL WINCHESTER, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nifco at Canal Winchester

 

Nifco at Canal Winchester

 

Industrial

 

 

 

400

 

3,401

 

6

 

400

 

3,407

 

3,807

 

282

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CARMEL, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hamilton Crossing

 

Hamilton Crossing Bldg 1

 

Industrial

 

 

 

835

 

4,915

 

1,857

 

847

 

6,760

 

7,607

 

1,587

 

1989

 

1993

 

Hamilton Crossing

 

Hamilton Crossing Bldg 2

 

Office

 

 

 

313

 

1,423

 

832

 

384

 

2,184

 

2,568

 

618

 

1997

 

1997

 

Hamilton Crossing

 

Hamilton Crossing Bldg 3

 

Office

 

 

 

890

 

10,095

 

414

 

890

 

10,509

 

11,399

 

1,403

 

2000

 

2000

 

Hamilton Crossing

 

Hamilton Crossing Bldg 4

 

Office

 

 

 

515

 

6,475

 

0

 

598

 

6,392

 

6,990

 

1,685

 

1999

 

1999

 

Hamilton Crossing Retail

 

Hamilton Crossing Retail Bld 1

 

Retail

 

 

 

728

 

6,804

 

301

 

1,006

 

6,827

 

7,833

 

1,027

 

1999

 

1999

 

Hamilton Crossing Retail

 

Hampton Inn Land Lease

 

Grounds

 

 

 

137

 

 

72

 

209

 

 

209

 

23

 

1999

 

 

 

Hamilton Crossing Retail

 

Max & Ermas

 

Grounds

 

 

 

167

 

 

(0

)

167

 

 

167

 

 

2000

 

 

 

Meridian Technology Center

 

Meridian Tech Center

 

Office

 

 

 

600

 

2,695

 

352

 

600

 

3,047

 

3,647

 

121

 

1986

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAROL STREAM, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carol Stream Business Park

 

Carol Stream #4

 

Industrial

 

 

 

1,973

 

8,697

 

 

1,973

 

8,697

 

10,670

 

58

 

1994

 

2003

 

Carol Stream Business Park

 

Carol Stream #5

 

Industrial

 

 

 

4,553

 

7,317

 

 

4,553

 

7,317

 

11,870

 

74

 

1986

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CARY, NORTH CAROLINA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regency Forest

 

200 Regency Forest Dr.

 

Office

 

 

 

1,230

 

13,535

 

261

 

1,230

 

13,796

 

15,026

 

1,571

 

1999

 

1999

 

Regency Forest

 

100 Regency Forest Dr.

 

Office

 

 

 

1,538

 

10,788

 

1,954

 

1,618

 

12,662

 

14,280

 

2,236

 

1997

 

1999

 

Weston Parkway

 

6501 Weston Parkway

 

Office

 

 

 

1,775

 

10,700

 

87

 

1,775

 

10,787

 

12,562

 

1,222

 

1996

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CELEBRATION, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Celebration Business Center

 

Celebration Business Center I

 

Office

 

 

 

1,102

 

4,859

 

879

 

1,308

 

5,533

 

6,840

 

1,066

 

1997

 

1999

 

Celebration Business Center

 

Celebration Business Center II

 

Office

 

 

 

771

 

3,590

 

190

 

961

 

3,590

 

4,551

 

453

 

1997

 

1999

 

Celebration Business Center

 

Celebration Office Center I

 

Office

 

 

 

1,382

 

7,957

 

14

 

1,382

 

7,971

 

9,353

 

1,406

 

2000

 

2000

 

Celebration Business Center

 

Celebration Office Center II

 

Office

 

 

 

1,382

 

6,264

 

171

 

1,382

 

6,435

 

7,818

 

454

 

2001

 

2001

 

 

60



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

CHANHASSEN, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chanhassen Lakes

 

Chanhassen Lakes I

 

Industrial

 

 

 

357

 

2,078

 

689

 

370

 

2,755

 

3,125

 

576

 

1983

 

1998

 

Chanhassen Lakes

 

Chanhassen Lakes II

 

Industrial

 

 

 

438

 

2,542

 

481

 

453

 

3,009

 

3,461

 

428

 

1986

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPEL HILL, NORTH CAROLINA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Governors Village

 

Governors Village

 

Office

 

 

 

515

 

5,669

 

 

515

 

5,669

 

6,184

 

392

 

2000

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHICAGO, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CINCINNATI, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

312 Elm

 

312 Elm

 

Office

 

37,815

 

4,750

 

47,312

 

3,123

 

5,428

 

49,757

 

55,185

 

12,868

 

1992

 

1993

 

312 Plum

 

312 Plum

 

Office

 

 

 

2,539

 

24,862

 

2,225

 

2,590

 

27,036

 

29,625

 

7,067

 

1987

 

1993

 

Bank One Towers

 

Bank One Towers

 

Office

 

 

 

4,891

 

38,096

 

 

4,891

 

38,096

 

42,987

 

461

 

1989

 

2003

 

Blue Ash Office Center

 

Blue Ash Office Ctr VI

 

Office

 

 

 

518

 

2,852

 

310

 

518

 

3,162

 

3,680

 

516

 

1989

 

1997

 

Executive Plaza

 

Executive Plaza I

 

Office

 

 

 

728

 

5,547

 

404

 

728

 

5,952

 

6,679

 

1,105

 

1980

 

1996

 

Executive Plaza

 

Executive Plaza II

 

Office

 

 

 

728

 

5,642

 

517

 

728

 

6,160

 

6,887

 

1,016

 

1981

 

1996

 

Executive Plaza

 

Executive Plaza III

 

Office

 

 

 

509

 

5,025

 

1,143

 

509

 

6,167

 

6,677

 

1,589

 

1998

 

1998

 

Governors Hill

 

8790 Governor’s Hill

 

Office

 

 

 

400

 

4,796

 

635

 

408

 

5,422

 

5,830

 

1,394

 

1985

 

1993

 

Governors Hill

 

8800 Governor’s Hill

 

Office

 

 

 

225

 

2,309

 

23

 

231

 

2,326

 

2,557

 

1,020

 

1985

 

1986

 

Governors Hill

 

8600 Governor’s Hill

 

Office

 

 

 

1,220

 

19,007

 

2,043

 

1,245

 

21,024

 

22,269

 

5,007

 

1986

 

1993

 

Iams Industrial Park

 

Cincinnati Bell Supply

 

Industrial

 

 

 

606

 

3,251

 

0

 

606

 

3,252

 

3,857

 

311

 

1999

 

2000

 

Kenwood Commons

 

8230 Kenwood Commons

 

Office

 

4,163

 

638

 

3,308

 

811

 

638

 

4,120

 

4,757

 

2,279

 

1986

 

1986

 

Kenwood Commons

 

8280 Kenwood Commons

 

Office

 

2,537

 

638

 

1,863

 

341

 

638

 

2,205

 

2,842

 

993

 

1986

 

1986

 

Kenwood Executive Center

 

Kenwood Executive Center

 

Office

 

 

 

606

 

4,052

 

436

 

606

 

4,489

 

5,094

 

722

 

1981

 

1997

 

Kenwood MOB

 

Kenwood MOB

 

Office

 

 

 

7,823

 

37

 

 

7,860

 

7,860

 

868

 

1994

 

1999

 

 

 

One Ashview Place

 

One Ashview Place

 

Office

 

 

 

1,204

 

12,674

 

2,783

 

1,204

 

15,457

 

16,661

 

2,346

 

1989

 

1997

 

Park 50

 

Dun & Bradstreet Bldg

 

Office

 

 

 

270

 

2,730

 

458

 

466

 

2,993

 

3,458

 

1,276

 

1972

 

1986

 

Pfeiffer Place

 

Pfeiffer Place

 

Office

 

 

 

3,608

 

14,988

 

880

 

3,608

 

15,867

 

19,476

 

1,204

 

2001

 

2001

 

Pfeiffer Woods

 

Pfeiffer Woods

 

Office

 

 

 

1,450

 

12,360

 

235

 

1,450

 

12,595

 

14,045

 

1,382

 

1998

 

1999

 

Remington Office Park

 

Remington Park Bldg A

 

Office

 

 

 

560

 

1,472

 

199

 

560

 

1,671

 

2,231

 

303

 

1982

 

1997

 

Remington Office Park

 

Remington Park Bldg B

 

Office

 

 

 

560

 

1,563

 

353

 

560

 

1,916

 

2,476

 

318

 

1982

 

1997

 

Triangle Office Park

 

Triangle Office Park

 

Office

 

4,690

 

1,018

 

11,511

 

25

 

1,018

 

11,536

 

12,555

 

5,025

 

1965

 

1986

 

World Park

 

World Park Bldg 5

 

Industrial

 

 

 

270

 

3,406

 

81

 

276

 

3,481

 

3,757

 

1,301

 

1987

 

1988

 

World Park

 

World Park Bldg 6

 

Industrial

 

 

 

378

 

3,860

 

134

 

385

 

3,987

 

4,372

 

1,500

 

1987

 

1988

 

World Park

 

World Park Bldg 7

 

Industrial

 

 

 

525

 

4,538

 

144

 

537

 

4,670

 

5,207

 

1,717

 

1987

 

1988

 

Zussman Building

 

Zussman Bldg

 

Office

 

 

 

339

 

6,887

 

882

 

346

 

7,762

 

8,108

 

3,155

 

1986

 

1993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COLUMBUS, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Easton

 

Easton Way One

 

Office

 

 

 

1,874

 

10,396

 

415

 

1,874

 

10,811

 

12,685

 

1,641

 

2000

 

2000

 

Easton

 

Easton Way Two

 

Office

 

 

 

2,005

 

10,335

 

499

 

2,005

 

10,834

 

12,839

 

964

 

2001

 

2001

 

Easton

 

Easton Way Three

 

Office

 

 

 

2,504

 

7,438

 

 

2,504

 

7,438

 

9,941

 

66

 

2002

 

2003

 

Easton Oval

 

One Easton Oval

 

Office

 

 

 

2,789

 

12,176

 

266

 

2,789

 

12,442

 

15,230

 

3,056

 

1998

 

1999

 

Easton Oval

 

Two Easton Oval

 

Office

 

 

 

2,489

 

16,882

 

748

 

2,489

 

17,630

 

20,119

 

2,473

 

1996

 

1998

 

Polaris

 

1000 Polaris Parkway

 

Office

 

 

 

1,200

 

6,636

 

1,458

 

1,293

 

8,001

 

9,294

 

1,178

 

1992

 

1999

 

Westbelt Drive

 

2190-2200 Westbelt Drive

 

Industrial

 

 

 

300

 

1,971

 

84

 

300

 

2,056

 

2,356

 

282

 

1986

 

1998

 

Westbelt West

 

Westbelt West #1

 

Industrial

 

 

 

432

 

4,188

 

872

 

432

 

5,061

 

5,492

 

1,004

 

1999

 

1999

 

Westbelt West

 

Westbelt West #2

 

Industrial

 

 

 

509

 

5,246

 

323

 

509

 

5,568

 

6,077

 

745

 

1999

 

2000

 

Zane Trace

 

3800 Zane Trace Drive

 

Industrial

 

 

 

170

 

2,109

 

316

 

170

 

2,425

 

2,595

 

527

 

1978

 

1994

 

Zane Trace

 

3635 Zane Trace Drive

 

Industrial

 

 

 

236

 

1,820

 

176

 

236

 

1,996

 

2,231

 

275

 

1980

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CREVE COUER, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twin Oaks Office Ctr

 

Twin Oaks

 

Office

 

 

 

566

 

8,333

 

1,398

 

566

 

9,731

 

10,297

 

1,536

 

1995

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CRYSTAL, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crystal Industrial Center

 

Crystal Industrial Center

 

Industrial

 

 

 

456

 

2,629

 

374

 

480

 

2,979

 

3,459

 

623

 

1974

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAVENPORT, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FL Central Park North

 

Park 27 Distribution Center

 

Industrial

 

 

 

1,678

 

6,871

 

 

1,678

 

6,871

 

8,548

 

174

 

2002

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DES PLAINES, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

105 East Oakton

 

105 East Oakton

 

Industrial

 

 

 

1,132

 

4,290

 

370

 

1,132

 

4,660

 

5,792

 

726

 

1974

 

1999

 

Deckbrand Building

 

Wolf Road Building

 

Industrial

 

 

 

179

 

1,637

 

352

 

179

 

1,989

 

2,168

 

268

 

1966

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOWNERS GROVE, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Towers

 

Executive Towers I

 

Office

 

 

 

2,652

 

24,524

 

3,403

 

2,652

 

27,927

 

30,579

 

4,824

 

1983

 

1997

 

 

61



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Executive Towers

 

Executive Towers II

 

Office

 

 

 

3,386

 

31,916

 

6,524

 

3,386

 

38,440

 

41,826

 

7,416

 

1984

 

1997

 

Executive Towers

 

Executive Towers III

 

Office

 

 

 

3,512

 

32,989

 

5,073

 

3,512

 

38,061

 

41,574

 

6,090

 

1987

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DUBLIN, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Groveport

 

Groveport CC Common Area

 

N/A

 

 

 

 

 

 

47

 

 

47

 

47

 

24

 

 

 

 

 

Scioto Corporate Center

 

Scioto Corporate Center

 

Office

 

 

 

1,100

 

3,367

 

800

 

1,100

 

4,167

 

5,267

 

870

 

1987

 

1996

 

Tuttle Crossing

 

Metrocenter III

 

Office

 

 

 

887

 

3,015

 

489

 

887

 

3,504

 

4,390

 

663

 

1983

 

1996

 

Tuttle Crossing

 

Qwest (LCI

)

Office

 

 

 

2,618

 

19,002

 

960

 

2,670

 

19,910

 

22,581

 

5,181

 

1990

 

1993

 

Tuttle Crossing

 

Sterling 1

 

Office

 

 

 

1,494

 

12,907

 

413

 

1,524

 

13,290

 

14,814

 

3,325

 

1990

 

1993

 

Tuttle Crossing

 

4700 Lakehurst Ct.

 

Office

 

 

 

717

 

2,482

 

400

 

717

 

2,883

 

3,600

 

886

 

1994

 

1994

 

Tuttle Crossing

 

Sterling 2

 

Office

 

 

 

605

 

5,902

 

81

 

605

 

5,983

 

6,588

 

1,277

 

1995

 

1995

 

Tuttle Crossing

 

John Alden Life Ins.

 

Office

 

 

 

1,066

 

7,753

 

219

 

1,066

 

7,972

 

9,038

 

1,689

 

1995

 

1995

 

Tuttle Crossing

 

5555 Glendon Court

 

Office

 

 

 

1,600

 

10,933

 

1,122

 

1,767

 

11,889

 

13,655

 

4,975

 

1995

 

1995

 

Tuttle Crossing

 

Sterling 3

 

Office

 

 

 

1,601

 

8,768

 

71

 

1,601

 

8,839

 

10,440

 

2,596

 

1996

 

1996

 

Tuttle Crossing

 

Compmanagement

 

Office

 

 

 

867

 

4,437

 

545

 

867

 

4,982

 

5,849

 

1,017

 

1997

 

1997

 

Tuttle Crossing

 

Sterling 4

 

Office

 

 

 

483

 

9,399

 

892

 

483

 

10,291

 

10,774

 

2,019

 

1998

 

1998

 

Tuttle Crossing

 

Xerox Bldg-5555 Parkcenter Cir

 

Office

 

 

 

1,580

 

9,406

 

560

 

1,580

 

9,966

 

11,546

 

2,486

 

1992

 

1994

 

Tuttle Crossing

 

Parkwood Place

 

Office

 

 

 

1,690

 

11,637

 

895

 

1,690

 

12,533

 

14,222

 

2,860

 

1997

 

1997

 

Tuttle Crossing

 

Nationwide

 

Office

 

 

 

4,815

 

19,322

 

72

 

4,815

 

19,394

 

24,209

 

5,648

 

1996

 

1996

 

Tuttle Crossing

 

Emerald II

 

Office

 

 

 

495

 

3,181

 

0

 

495

 

3,181

 

3,676

 

680

 

1998

 

1998

 

Tuttle Crossing

 

Atrium II, Phase I

 

Office

 

 

 

1,649

 

10,077

 

175

 

1,649

 

10,252

 

11,901

 

1,814

 

1997

 

1998

 

Tuttle Crossing

 

Atrium II, Phase II

 

Office

 

 

 

1,597

 

10,350

 

922

 

1,597

 

11,272

 

12,869

 

3,406

 

1998

 

1999

 

Tuttle Crossing

 

Blazer I

 

Office

 

 

 

904

 

5,759

 

580

 

904

 

6,339

 

7,243

 

1,854

 

1999

 

1999

 

Tuttle Crossing

 

Parkwood II

 

Office

 

 

 

1,848

 

14,091

 

56

 

1,848

 

14,148

 

15,996

 

2,134

 

2000

 

2000

 

Tuttle Crossing

 

Blazer II

 

Office

 

 

 

1,016

 

6,933

 

139

 

1,016

 

7,073

 

8,089

 

1,053

 

2000

 

2000

 

Tuttle Crossing

 

Emerald III

 

Office

 

 

 

1,685

 

9,907

 

120

 

1,694

 

10,019

 

11,712

 

949

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DULUTH, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Breckinridge

 

2825 Breckinridge Blvd

 

Industrial

 

 

 

317

 

3,634

 

174

 

317

 

3,807

 

4,125

 

474

 

1986

 

1999

 

Breckinridge

 

2875 Breckinridge Blvd

 

Industrial

 

 

 

476

 

4,809

 

25

 

476

 

4,834

 

5,310

 

538

 

1986

 

1999

 

Breckinridge

 

2885 Breckinridge Blvd

 

Industrial

 

 

 

487

 

6,910

 

561

 

487

 

7,471

 

7,957

 

1,039

 

1997

 

1999

 

Business Park At Sugarloaf

 

2775 Premiere Parkway

 

Industrial

 

 

 

560

 

4,709

 

11

 

560

 

4,720

 

5,280

 

527

 

1997

 

1999

 

Business Park At Sugarloaf

 

3079 Premiere Parkway

 

Industrial

 

 

 

776

 

6,538

 

406

 

776

 

6,945

 

7,720

 

831

 

1998

 

1999

 

Business Park At Sugarloaf

 

Sugarloaf Office I

 

Industrial

 

 

 

1,042

 

8,650

 

662

 

1,042

 

9,311

 

10,354

 

1,063

 

1998

 

1999

 

Business Park At Sugarloaf

 

Sugarloaf Office II

 

Industrial

 

 

 

972

 

4,066

 

33

 

972

 

4,099

 

5,071

 

130

 

1999

 

2002

 

Business Park At Sugarloaf

 

Sugarloaf Office III

 

Industrial

 

 

 

696

 

3,773

 

29

 

696

 

3,801

 

4,497

 

112

 

1999

 

2002

 

Business Park At Sugarloaf

 

Sugarloaf Office IV

 

Industrial

 

 

 

623

 

3,938

 

0

 

623

 

3,938

 

4,561

 

853

 

2000

 

2000

 

Business Park At Sugarloaf

 

Sugarloaf Office V

 

Industrial

 

 

 

744

 

3,980

 

374

 

744

 

4,354

 

5,098

 

675

 

2001

 

2001

 

Business Park At Sugarloaf

 

2850 Premiere Parkway

 

Industrial

 

 

 

621

 

4,592

 

0

 

621

 

4,592

 

5,213

 

134

 

1997

 

2002

 

Business Park At Sugarloaf

 

2855 Premiere Parkway

 

Industrial

 

 

 

765

 

3,986

 

186

 

765

 

4,173

 

4,938

 

608

 

1999

 

1999

 

Business Park At Sugarloaf

 

6655 Sugarloaf

 

Industrial

 

 

 

1,651

 

6,474

 

4

 

1,651

 

6,478

 

8,129

 

336

 

1998

 

2001

 

Crestwood Pointe

 

3805 Crestwood Parkway

 

Office

 

 

 

877

 

15,197

 

530

 

877

 

15,728

 

16,604

 

1,823

 

1997

 

1999

 

Crestwood Pointe

 

3885 Crestwood Parkway

 

Office

 

 

 

878

 

14,187

 

920

 

878

 

15,107

 

15,985

 

2,224

 

1998

 

1999

 

Hampton Green

 

Hampton Green Off I

 

Office

 

 

 

1,388

 

12,400

 

224

 

1,388

 

12,625

 

14,012

 

1,268

 

2000

 

2000

 

River Green

 

3450 River Green Court

 

Industrial

 

 

 

194

 

2,197

 

195

 

194

 

2,392

 

2,586

 

356

 

1989

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EAGAN, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Apollo Distribution Center

 

Apollo Industrial Ctr I

 

Industrial

 

 

 

866

 

4,992

 

1,031

 

882

 

6,007

 

6,889

 

974

 

1997

 

1997

 

Apollo Distribution Center

 

Apollo Industrial Ctr II

 

Industrial

 

 

 

474

 

3,156

 

0

 

474

 

3,156

 

3,629

 

604

 

2000

 

2000

 

Apollo Distribution Center

 

Apollo Industrial Ctr III

 

Industrial

 

 

 

1,432

 

6,933

 

(0

)

1,432

 

6,933

 

8,365

 

731

 

2000

 

2000

 

Eagandale Crossing

 

Eagandale Crossing

 

Industrial

 

 

 

974

 

4,846

 

82

 

987

 

4,914

 

5,901

 

1,939

 

1998

 

1998

 

Eagandale Tech Center

 

Eagandale Tech Center

 

Industrial

 

 

 

987

 

5,731

 

535

 

997

 

6,256

 

7,254

 

1,077

 

1998

 

1998

 

Lunar Pointe

 

Lunar Pointe

 

Industrial

 

 

 

982

 

4,462

 

245

 

982

 

4,707

 

5,689

 

13

 

2001

 

2001

 

Silverbell Commons

 

Silverbell Commons

 

Industrial

 

 

 

1,807

 

6,826

 

520

 

1,807

 

7,346

 

9,153

 

1,155

 

1999

 

1999

 

Trapp Road

 

Trapp Road Commerce I

 

Industrial

 

 

 

671

 

3,906

 

351

 

700

 

4,228

 

4,927

 

749

 

1996

 

1998

 

Trapp Road

 

Trapp Road Commerce II

 

Industrial

 

 

 

1,250

 

7,043

 

312

 

1,266

 

7,339

 

8,605

 

1,122

 

1998

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARTH CITY, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earth City

 

3322 NGIC

 

Office

 

6,099

 

2,615

 

10,927

 

1,226

 

2,615

 

12,153

 

14,769

 

2,117

 

1987

 

1997

 

Earth City

 

Corporate Center, Earth City

 

Industrial

 

 

 

783

 

4,543

 

715

 

783

 

5,258

 

6,040

 

1,025

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EAST POINTE, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Camp Creek

 

Camp Creek Bldg 1400

 

Industrial

 

 

 

561

 

3,418

 

128

 

561

 

3,546

 

4,107

 

299

 

1988

 

2001

 

Camp Creek

 

Camp Creek Bldg 1800

 

Industrial

 

 

 

462

 

3,034

 

(0

)

462

 

3,034

 

3,496

 

384

 

1989

 

2001

 

 

62



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Camp Creek

 

Camp Creek Bldg 2000

 

Industrial

 

 

 

395

 

2,301

 

17

 

395

 

2,318

 

2,713

 

173

 

1989

 

2001

 

Camp Creek

 

Camp Creek Bldg 2400

 

Industrial

 

 

 

296

 

1,851

 

47

 

296

 

1,898

 

2,194

 

195

 

1988

 

2001

 

Camp Creek

 

Camp Creek Bldg 2600

 

Industrial

 

 

 

364

 

2,356

 

21

 

364

 

2,377

 

2,741

 

232

 

1990

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EDEN PRAIRIE, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edenvale Executive Center

 

Edenvale Executive Center

 

Industrial

 

 

 

1,184

 

6,755

 

675

 

1,185

 

7,430

 

8,614

 

959

 

1987

 

1999

 

Golden Triangle Tech Center

 

Golden Triangle Tech Ctr

 

Industrial

 

 

 

1,446

 

8,305

 

284

 

1,458

 

8,577

 

10,035

 

1,183

 

1997

 

1998

 

Valley Gate/Green

 

Valley Gate North

 

Industrial

 

 

 

548

 

3,145

 

574

 

556

 

3,711

 

4,267

 

634

 

1986

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EDINA, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edina Interchange

 

Edina Interchange I

 

Industrial

 

1,471

 

630

 

3,660

 

373

 

630

 

4,033

 

4,663

 

724

 

1995

 

1997

 

Edina Interchange

 

Edina Interchange II

 

Industrial

 

949

 

432

 

2,512

 

65

 

432

 

2,577

 

3,009

 

403

 

1980

 

1997

 

Edina Interchange

 

Edina Interchange III

 

Industrial

 

1,071

 

487

 

2,833

 

71

 

487

 

2,904

 

3,391

 

459

 

1981

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FAIRFIELD, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Faifield Business Center

 

Fairfield Bus. Ctr. D

 

Industrial

 

 

 

135

 

1,749

 

153

 

135

 

1,903

 

2,038

 

416

 

1990

 

1995

 

Faifield Business Center

 

Fairfield Bus. Ctr. E

 

Industrial

 

 

 

398

 

2,603

 

40

 

398

 

2,644

 

3,042

 

518

 

1990

 

1995

 

University Moving

 

Thunderbird Bldg 1

 

Industrial

 

 

 

248

 

1,764

 

146

 

248

 

1,911

 

2,159

 

417

 

1991

 

1995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FENTON, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fenton Interstate Buildings

 

Fenton Interstate Building C

 

Industrial

 

 

 

519

 

1,987

 

102

 

519

 

2,088

 

2,608

 

266

 

1986

 

1999

 

Fenton Interstate Buildings

 

Fenton Interstate Building D

 

Industrial

 

 

 

1,286

 

5,193

 

206

 

1,286

 

5,399

 

6,685

 

796

 

1987

 

1999

 

Fenton Interstate Buildings

 

Fenton Industrial Bldg A

 

Industrial

 

 

 

603

 

2,631

 

0

 

603

 

2,632

 

3,234

 

323

 

1987

 

2000

 

Fenton Interstate Buildings

 

Fenton Industrial Bldg B

 

Industrial

 

 

 

702

 

2,330

 

40

 

702

 

2,371

 

3,073

 

244

 

1986

 

2000

 

Southport

 

Southport II

 

Industrial

 

 

 

151

 

664

 

58

 

151

 

721

 

872

 

117

 

1978

 

1997

 

Southport

 

Southport Commerce Ctr

 

Industrial

 

 

 

233

 

1,021

 

159

 

233

 

1,180

 

1,413

 

198

 

1978

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FISHERS, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exit 5

 

Exit 5 Bldg I

 

Industrial

 

 

 

833

 

2,705

 

101

 

822

 

2,817

 

3,639

 

412

 

1999

 

1999

 

Exit 5

 

Exit 5 Bldg. II

 

Industrial

 

 

 

760

 

4,634

 

159

 

749

 

4,804

 

5,553

 

895

 

1999

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FRANKLIN, TENNESSEE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aspen Grove Business Center

 

277 Mallory Station

 

Industrial

 

 

 

936

 

6,556

 

234

 

936

 

6,790

 

7,727

 

791

 

1996

 

1999

 

Aspen Grove Business Center

 

320 Premier Court

 

Industrial

 

 

 

1,151

 

6,539

 

373

 

1,151

 

6,912

 

8,063

 

784

 

1996

 

1999

 

Aspen Grove Business Center

 

305 Seaboard Lane

 

Industrial

 

 

 

970

 

6,336

 

566

 

970

 

6,902

 

7,872

 

1,574

 

1998

 

1999

 

Aspen Grove Business Center

 

Aspen Grove 4

 

Industrial

 

 

 

492

 

2,416

 

4

 

492

 

2,420

 

2,912

 

113

 

2002

 

2002

 

Aspen Grove Business Center

 

416 Mary Lindsay Polk Dr

 

Industrial

 

 

 

943

 

5,304

 

756

 

943

 

6,060

 

7,003

 

810

 

1996

 

1999

 

Aspen Grove Business Center

 

318 Seaboard Lane Bldg 200

 

Industrial

 

 

 

240

 

1,390

 

555

 

240

 

1,945

 

2,185

 

450

 

1999

 

1999

 

Aspen Grove Business Center

 

341 Cool Springs Blvd

 

Office

 

 

 

950

 

7,522

 

1,689

 

950

 

9,211

 

10,161

 

1,569

 

1999

 

1999

 

Aspen Grove Business Center

 

318 Seaboard Lane Bldg 100

 

Industrial

 

 

 

301

 

1,684

 

745

 

301

 

2,429

 

2,730

 

716

 

1999

 

1999

 

Aspen Grove Business Center

 

Aspen Grove Flex Ctr III

 

Industrial

 

 

 

327

 

2,037

 

303

 

327

 

2,340

 

2,667

 

90

 

2001

 

2001

 

Aspen Grove Business Center

 

Aspen Grove Flex Ctr IV

 

Industrial

 

 

 

205

 

1,535

 

148

 

205

 

1,683

 

1,888

 

259

 

2001

 

2001

 

Brentwood South Bus. Center

 

119 Seaboard Lane

 

Industrial

 

 

 

569

 

2,442

 

22

 

569

 

2,464

 

3,034

 

274

 

1990

 

1999

 

Brentwood South Bus. Center

 

121 Seaboard Lane

 

Industrial

 

 

 

445

 

1,936

 

(0

)

445

 

1,936

 

2,381

 

216

 

1990

 

1999

 

Brentwood South Bus. Center

 

123 Seaboard Lane

 

Industrial

 

 

 

489

 

1,248

 

415

 

489

 

1,663

 

2,152

 

201

 

1990

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FRIDLEY, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

River Road

 

River Road Business Ctr. S.

 

Industrial

 

3,415

 

1,083

 

6,400

 

549

 

1,112

 

6,920

 

8,032

 

1,053

 

1986

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FT. LAUDERDALE, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sawgrass

 

Sawgrass — Building 1

 

Office

 

 

 

1,211

 

6,424

 

75

 

1,211

 

6,499

 

7,710

 

1,439

 

1999

 

2000

 

Beacon Pointe At Weston

 

Beacon Pointe@Weston Bldg 2

 

Office

 

 

 

2,183

 

10,830

 

 

2,183

 

10,830

 

13,013

 

151

 

200

 

2003

 

Beacon Pointe At Weston

 

Beacon Pointe@Weston Bldg 3

 

Office

 

 

 

2,183

 

11,531

 

 

2,183

 

11,531

 

13,713

 

159

 

2001

 

2003

 

Beacon Pointe At Weston

 

Beacon Pointe@Weston Bldg 1

 

Office

 

 

 

2,580

 

10,020

 

 

2,580

 

10,020

 

12,600

 

137

 

1999

 

2003

 

Beacon Pointe At Weston

 

Beacon Pointe @ Weston Land

 

Grounds

 

 

 

 

9

 

 

 

9

 

9

 

 

 

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GENEVA, IL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Geneva

 

The Shoppes at Geneva Commons

 

Retail

 

 

 

2,871

 

3,984

 

 

2,871

 

3,984

 

6,855

 

 

2003

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLENWILLOW, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerald Valley

 

Emerald Valley Bldg 1

 

Industrial

 

 

 

555

 

6,434

 

132

 

556

 

6,565

 

7,121

 

705

 

1999

 

1999

 

Emerald Valley

 

Emerald Valley Bldg 2

 

Industrial

 

 

 

519

 

5,052

 

672

 

519

 

5,724

 

6,243

 

123

 

2001

 

2002

 

 

63



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

GOLDEN VALLEY, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Golden Hills

 

Golden Hills 1

 

Industrial

 

 

 

1,081

 

6,298

 

346

 

1,105

 

6,619

 

7,725

 

969

 

1996

 

1998

 

Golden Hills

 

Golden Hills 2

 

Industrial

 

 

 

1,741

 

4,341

 

397

 

1,742

 

4,737

 

6,479

 

1,406

 

1999

 

1999

 

Golden Hills

 

Golden Hills 3

 

Industrial

 

 

 

1,813

 

4,875

 

370

 

1,815

 

5,243

 

7,058

 

1,326

 

1999

 

1999

 

5075 Building

 

5075 Building

 

Office

 

 

 

506

 

2,393

 

340

 

539

 

2,700

 

3,239

 

449

 

1965

 

1998

 

Tyrol West

 

Tyrol West

 

Office

 

 

 

350

 

2,016

 

327

 

380

 

2,313

 

2,693

 

389

 

1968

 

1998

 

Sandburg Industrial Center

 

Sandburg Industrial Center

 

Industrial

 

 

 

451

 

2,629

 

396

 

451

 

3,024

 

3,476

 

577

 

1973

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GREENWOOD, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Park-Indiana

 

South Park Bldg 1

 

Office

 

 

 

287

 

2,577

 

380

 

292

 

2,952

 

3,244

 

792

 

1989

 

1993

 

South Park-Indiana

 

South Park Bldg 2

 

Industrial

 

 

 

334

 

3,444

 

793

 

341

 

4,230

 

4,571

 

1,282

 

1990

 

1993

 

South Park-Indiana

 

South Park Bldg 3

 

Office

 

 

 

208

 

2,390

 

673

 

212

 

3,059

 

3,271

 

719

 

1990

 

1993

 

South Park-Indiana

 

Brylane Parking Lot

 

Grounds

 

 

 

54

 

 

3

 

57

 

 

57

 

25

 

 

 

1994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROVE CITY, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

South Pointe

 

South Pointe Bldg D

 

Industrial

 

 

 

276

 

3,194

 

159

 

276

 

3,353

 

3,629

 

673

 

1997

 

1997

 

South Pointe

 

South Pointe Bldg E

 

Industrial

 

 

 

279

 

2,466

 

754

 

279

 

3,220

 

3,498

 

859

 

1997

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROVEPORT, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6600 Port Road

 

6600 Port Road

 

Industrial

 

 

 

2,725

 

23,622

 

929

 

2,850

 

24,427

 

27,276

 

3,924

 

1995

 

1997

 

Groveport Commerce Ctr

 

Groveport Comm Ctr #2

 

Industrial

 

 

 

1,049

 

7,633

 

1,031

 

1,065

 

8,648

 

9,713

 

1,218

 

1999

 

1999

 

Groveport Commerce Ctr

 

Groveport Comm Ctr #3

 

Industrial

 

 

 

510

 

3,896

 

539

 

510

 

4,434

 

4,944

 

447

 

1999

 

2000

 

Groveport Commerce Ctr

 

Groveport Comm Ctr #4

 

Industrial

 

 

 

1,114

 

8,717

 

29

 

1,132

 

8,728

 

9,860

 

1,049

 

2000

 

2000

 

Groveport Commerce Ctr

 

Groveport Commerce Ctr. #345

 

Industrial

 

 

 

1,045

 

7,372

 

577

 

1,045

 

7,950

 

8,994

 

843

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HEBRON, KENTUCKY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KY, Southpark

 

Ky. Southpark Bldg 4

 

Industrial

 

 

 

779

 

3,381

 

51

 

779

 

3,432

 

4,211

 

807

 

1994

 

1994

 

KY, Southpark

 

CR Services

 

Industrial

 

 

 

1,085

 

4,233

 

1,205

 

1,085

 

5,438

 

6,523

 

1,256

 

1994

 

1994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HIGHLAND HILLS, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Plaza

 

Metropolitan Plaza

 

Office

 

 

 

2,310

 

13,521

 

 

2,310

 

13,521

 

15,831

 

 

2000

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HIGHLAND HEIGHTS, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avion Park

 

5335 Avion Park Drive

 

Industrial

 

 

 

606

 

2,534

 

7

 

606

 

2,542

 

3,148

 

124

 

1994

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOPKINS, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cornerstone Business Center

 

Cornerstone Business Center

 

Industrial

 

5,716

 

1,469

 

8,482

 

237

 

1,543

 

8,644

 

10,187

 

1,357

 

1996

 

1997

 

Westside Business Park

 

Westside Business Park

 

Industrial

 

 

 

1,176

 

6,865

 

1,354

 

1,170

 

8,225

 

9,395

 

1,301

 

1987

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INDEPENDENCE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6111 Oak Tree

 

Oak Tree Place

 

Office

 

 

 

703

 

4,687

 

416

 

703

 

5,103

 

5,806

 

850

 

1979

 

1997

 

Corporate Plaza

 

Corporate Plaza I

 

Office

 

8,348

 

2,116

 

14,240

 

509

 

2,116

 

14,750

 

16,865

 

2,893

 

1989

 

1996

 

Corporate Plaza

 

Corporate Plaza II

 

Office

 

7,467

 

1,841

 

12,411

 

807

 

1,841

 

13,218

 

15,058

 

2,816

 

1991

 

1996

 

Freedom Square

 

Freedom Square I

 

Office

 

 

 

595

 

4,007

 

308

 

600

 

4,311

 

4,911

 

878

 

1980

 

1996

 

Freedom Square

 

Freedom Square II

 

Office

 

7,081

 

1,746

 

11,813

 

641

 

1,746

 

12,454

 

14,200

 

2,509

 

1987

 

1996

 

Freedom Square

 

Freedom Square III

 

Office

 

 

 

701

 

6,378

 

0

 

701

 

6,378

 

7,079

 

1,291

 

1997

 

1997

 

Park Center

 

Park Center Bldg I

 

Office

 

 

 

2,193

 

14,027

 

556

 

2,193

 

14,583

 

16,776

 

3,455

 

1998

 

1998

 

Park Center

 

Park Center Bldg II

 

Office

 

 

 

2,190

 

13,782

 

201

 

2,190

 

13,982

 

16,173

 

2,935

 

1999

 

1999

 

Park Center

 

Park Center Bldg III

 

Office

 

 

 

2,190

 

12,891

 

1,383

 

2,190

 

14,274

 

16,464

 

1,899

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INDIANAPOLIS, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franklin Road Business Park

 

Franklin Road Bus. Ctr.

 

Industrial

 

 

 

594

 

10,775

 

408

 

594

 

11,183

 

11,778

 

2,750

 

1962

 

1995

 

Hillsdale

 

Hillsdale Bldg 4

 

Industrial

 

 

 

366

 

5,147

 

625

 

366

 

5,773

 

6,138

 

1,376

 

1987

 

1993

 

Hillsdale

 

Hillsdale Bldg 5

 

Industrial

 

 

 

251

 

3,250

 

587

 

251

 

3,838

 

4,089

 

1,027

 

1987

 

1993

 

Hillsdale

 

Hillsdale Bldg 6

 

Industrial

 

 

 

315

 

4,334

 

1,451

 

315

 

5,786

 

6,100

 

1,371

 

1987

 

1993

 

KATC - North

 

3520 Commerce Crossing

 

Office

 

 

 

950

 

2,063

 

36

 

950

 

2,099

 

3,049

 

544

 

1976

 

1993

 

KATC - South

 

8465 Keystone Crossing

 

Office

 

 

 

89

 

1,389

 

215

 

89

 

1,604

 

1,693

 

374

 

1983

 

1995

 

Keystone Crossing

 

8555 Keystone Crossing

 

Office

 

 

 

 

6,061

 

581

 

 

6,642

 

6,642

 

1,265

 

1985

 

1997

 

Nampac Building

 

6061 Guion Rd

 

Industrial

 

 

 

274

 

1,809

 

105

 

274

 

1,915

 

2,189

 

426

 

1974

 

1995

 

4750 Kentucky Avenue

 

4750 Kentucky Avenue

 

Industrial

 

 

 

246

 

2,392

 

220

 

246

 

2,612

 

2,858

 

466

 

1974

 

1996

 

Software Artistry

 

River Road Bldg I

 

Office

 

 

 

856

 

7,766

 

693

 

856

 

8,459

 

9,315

 

1,669

 

1997

 

1998

 

4316 West Minnesota

 

4316 West Minnesota

 

Industrial

 

 

 

287

 

2,291

 

294

 

287

 

2,585

 

2,872

 

461

 

1970

 

1996

 

One North Capital

 

One North Capital

 

Office

 

 

 

1,439

 

9,696

 

20

 

1,439

 

9,717

 

11,156

 

1,349

 

1980

 

1998

 

Park 100

 

Silver Burdett

 

Industrial

 

 

 

1,414

 

13,859

 

(0

)

1,667

 

13,606

 

15,273

 

2,941

 

1994

 

1995

 

Park 100

 

Park 100 Bldg 98

 

Industrial

 

 

 

273

 

8,336

 

1,551

 

273

 

9,886

 

10,159

 

2,042

 

1968

 

1994

 

 

64



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Park 100

 

Park 100 Bldg 100

 

Industrial

 

 

 

103

 

2,482

 

512

 

103

 

2,994

 

3,098

 

803

 

1995

 

1995

 

Park 100

 

Park 100 Bldg 107

 

Industrial

 

 

 

99

 

1,709

 

111

 

99

 

1,821

 

1,920

 

377

 

1984

 

1995

 

Park 100

 

Park 100 Bldg 109

 

Industrial

 

 

 

240

 

1,850

 

53

 

246

 

1,897

 

2,143

 

806

 

1985

 

1986

 

Park 100

 

Park 100 Bldg 116

 

Office

 

 

 

341

 

3,224

 

175

 

348

 

3,391

 

3,739

 

1,163

 

1988

 

1988

 

Park 100

 

Park 100 Bldg 118

 

Office

 

 

 

226

 

2,433

 

447

 

230

 

2,876

 

3,106

 

770

 

1988

 

1993

 

Park 100

 

Park 100 Bldg 119

 

Office

 

 

 

388

 

3,736

 

1,310

 

500

 

4,933

 

5,433

 

1,285

 

1989

 

1993

 

Park 100

 

Park 100 Bldg 122

 

Industrial

 

 

 

284

 

3,763

 

192

 

290

 

3,950

 

4,239

 

1,021

 

1990

 

1993

 

Park 100

 

Park 100 Bldg 124

 

Office

 

 

 

227

 

2,760

 

1

 

227

 

2,761

 

2,989

 

181

 

1992

 

2002

 

Park 100

 

Park 100 Bldg 127

 

Industrial

 

 

 

96

 

1,944

 

302

 

96

 

2,246

 

2,342

 

618

 

1995

 

1995

 

Park 100

 

Ups Parking

 

Grounds

 

 

 

270

 

 

0

 

270

 

 

270

 

51

 

 

 

1997

 

Park 100

 

Norgate Ground Lease

 

Grounds

 

 

 

51

 

 

0

 

51

 

 

51

 

 

 

 

1995

 

Park 100

 

Zollman Ground Lease

 

Grounds

 

 

 

115

 

 

(0

)

115

 

 

115

 

 

 

 

1994

 

Park 100

 

Becton Dickinson Lot

 

Grounds

 

 

 

 

 

13

 

13

 

 

13

 

5

 

 

 

1993

 

Park Fletcher

 

Park Fletcher Bldg 14

 

Industrial

 

 

 

76

 

740

 

65

 

76

 

805

 

881

 

165

 

1978

 

1996

 

Parkwood Crossing

 

One Parkwood

 

Office

 

 

 

1,018

 

10,247

 

390

 

1,028

 

10,627

 

11,654

 

2,130

 

1989

 

1995

 

Parkwood Crossing

 

Two Parkwood

 

Office

 

 

 

861

 

7,652

 

40

 

871

 

7,683

 

8,554

 

2,442

 

1996

 

1996

 

Parkwood Crossing

 

Three Parkwood

 

Office

 

 

 

1,377

 

9,811

 

253

 

1,387

 

10,055

 

11,441

 

2,264

 

1997

 

1997

 

Parkwood Crossing

 

Four Parkwood

 

Office

 

 

 

1,489

 

11,226

 

0

 

1,537

 

11,179

 

12,716

 

2,206

 

1998

 

1998

 

Parkwood Crossing

 

Five Parkwood

 

Office

 

 

 

1,485

 

13,690

 

445

 

1,528

 

14,093

 

15,620

 

3,001

 

1999

 

1999

 

Parkwood Crossing

 

Six Parkwood

 

Office

 

 

 

1,960

 

15,700

 

363

 

1,960

 

16,063

 

18,023

 

2,064

 

2000

 

2000

 

Parkwood Crossing

 

Parkwood Crossing East Bldg 8

 

Office

 

 

 

5,593

 

14,800

 

 

5,593

 

14,800

 

20,393

 

279

 

2002

 

2002

 

Woodfield

 

Two Woodfield Crossing

 

Office

 

 

 

719

 

9,516

 

1,218

 

733

 

10,719

 

11,452

 

2,846

 

1987

 

1993

 

Woodfield

 

Three Woodfield Crossing

 

Office

 

 

 

3,767

 

21,323

 

2,930

 

3,843

 

24,177

 

28,020

 

6,733

 

1989

 

1993

 

Woodland Corporate Park

 

Woodland Corporate Park I

 

Office

 

 

 

290

 

4,630

 

635

 

320

 

5,235

 

5,555

 

1,248

 

1998

 

1998

 

Woodland Corporate Park

 

Woodland Corporate Park II

 

Office

 

 

 

271

 

3,644

 

827

 

297

 

4,444

 

4,741

 

731

 

1999

 

1999

 

Woodland Corporate Park

 

Woodland Corporate Park III

 

Office

 

 

 

1,227

 

4,455

 

72

 

1,227

 

4,527

 

5,754

 

710

 

1999

 

2000

 

Woodland Corporate Park

 

Woodland Corporate Park IV

 

Office

 

 

 

715

 

7,288

 

155

 

715

 

7,443

 

8,159

 

914

 

2000

 

2000

 

Woodland Corporate Park

 

Woodland Corporate Park V

 

Office

 

 

 

768

 

10,002

 

 

768

 

10,002

 

10,770

 

277

 

2002

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JACKSONVILLE, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KENNESAW, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Town Point

 

3391 Town Point Drive

 

Office

 

 

 

797

 

8,474

 

1,155

 

797

 

9,629

 

10,426

 

1,897

 

1999

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAKE FOREST, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bradley Business Center

 

Ballard Drive Building

 

Industrial

 

 

 

186

 

1,761

 

299

 

186

 

2,060

 

2,246

 

289

 

1985

 

1998

 

Bradley Business Center

 

Laurel Drive Building

 

Industrial

 

 

 

98

 

913

 

53

 

98

 

965

 

1,064

 

140

 

1981

 

1998

 

Bradley Business Center

 

13825 W. Laurel Dr.

 

Industrial

 

 

 

750

 

1,886

 

916

 

750

 

2,803

 

3,553

 

514

 

1978

 

1999

 

Conway Park

 

One Conway Park

 

Office

 

 

 

1,901

 

18,399

 

944

 

1,901

 

19,344

 

21,245

 

3,188

 

1989

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAKE MARY, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northpoint

 

Northpoint Center I

 

Office

 

 

 

1,087

 

11,546

 

200

 

1,087

 

11,746

 

12,833

 

2,574

 

1998

 

1999

 

Northpoint

 

Northpoint Center II

 

Office

 

 

 

1,202

 

10,891

 

71

 

1,202

 

10,962

 

12,164

 

1,818

 

1999

 

2000

 

Northpoint

 

Northpoint III

 

Office

 

 

 

1,552

 

11,034

 

25

 

1,552

 

11,059

 

12,611

 

901

 

2001

 

2001

 

Northpoint

 

Northpoint IV

 

Office

 

 

 

1,605

 

8,583

 

1,029

 

1,605

 

9,612

 

11,217

 

85

 

2002

 

2002

 

Technology Park

 

Technology Park I

 

Industrial

 

 

 

641

 

3,530

 

210

 

640

 

3,742

 

4,382

 

498

 

1986

 

1999

 

Technology Park

 

Technology Park II

 

Industrial

 

 

 

835

 

4,318

 

280

 

835

 

4,598

 

5,433

 

581

 

1998

 

1999

 

Technology Park

 

Technology Park III

 

Industrial

 

 

 

477

 

3,859

 

113

 

477

 

3,972

 

4,449

 

527

 

1998

 

1999

 

Technology Park

 

Technology Park IV

 

Industrial

 

 

 

669

 

2,930

 

285

 

669

 

3,215

 

3,884

 

462

 

1999

 

1999

 

Technology Park

 

Technology Park V

 

Industrial

 

 

 

547

 

2,900

 

244

 

547

 

3,143

 

3,691

 

386

 

1999

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAKELAND, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakeland Interstate Park

 

Lakeland Interstate Park I

 

Industrial

 

 

 

864

 

4,267

 

290

 

864

 

4,557

 

5,421

 

269

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LAWRENCEVILLE, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hillside at Huntcrest

 

Huntcrest I

 

Office

 

 

 

1,193

 

10,997

 

 

1,193

 

10,997

 

12,190

 

997

 

2000

 

2001

 

Hillside at Huntcrest

 

Huntcrest II

 

Office

 

 

 

927

 

11,550

 

 

927

 

11,550

 

12,477

 

1,300

 

2000

 

2001

 

Hillside at Huntcrest

 

Huntcrest III

 

Office

 

 

 

1,358

 

12,956

 

 

1,358

 

12,956

 

14,313

 

439

 

2001

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEBANON, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lebanon Bus. Park

 

Lebanon Building 4

 

Industrial

 

 

 

305

 

9,717

 

90

 

305

 

9,806

 

10,111

 

1,608

 

1997

 

1997

 

Lebanon Bus. Park

 

Lebanon Building 9

 

Industrial

 

 

 

554

 

6,931

 

666

 

554

 

7,597

 

8,151

 

885

 

1999

 

1999

 

Lebanon Bus. Park

 

Lebanon Building 11

 

Industrial

 

 

 

480

 

5,202

 

 

480

 

5,202

 

5,682

 

129

 

2003

 

2003

 

Lebanon Bus. Park

 

Lebanon Bldg 13

 

Industrial

 

 

 

561

 

6,579

 

 

561

 

6,579

 

7,140

 

27

 

2003

 

2003

 

 

65



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Lebanon Bus. Park

 

Lebanon Bldg 12

 

Industrial

 

 

 

1,517

 

16,929

 

 

1,517

 

16,929

 

18,447

 

 

2002

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEWIS CENTER, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Orange Point Commerce Park

 

Orange Point #73

 

Industrial

 

 

 

551

 

3,281

 

232

 

551

 

3,514

 

4,065

 

315

 

2001

 

2001

 

Orange Point Commerce Park

 

Orange Point 144

 

Industrial

 

 

 

886

 

4,970

 

19

 

886

 

4,989

 

5,875

 

506

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MARIETTA, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Franklin Forest

 

805 Franklin Court

 

Industrial

 

 

 

313

 

1,937

 

58

 

313

 

1,994

 

2,308

 

232

 

1983

 

1999

 

Franklin Forest

 

810 Franklin Court

 

Industrial

 

 

 

255

 

1,658

 

64

 

255

 

1,722

 

1,976

 

204

 

1983

 

1999

 

Franklin Forest

 

811 Livingston Court

 

Industrial

 

 

 

193

 

1,428

 

264

 

193

 

1,691

 

1,884

 

242

 

1983

 

1999

 

Franklin Forest

 

825 Franklin Court

 

Industrial

 

 

 

358

 

562

 

1,118

 

358

 

1,681

 

2,038

 

252

 

1983

 

1999

 

Franklin Forest

 

830 Franklin Court

 

Industrial

 

 

 

133

 

759

 

28

 

133

 

787

 

920

 

87

 

1983

 

1999

 

Franklin Forest

 

835 Franklin Court

 

Industrial

 

 

 

393

 

637

 

1,023

 

393

 

1,659

 

2,053

 

253

 

1983

 

1999

 

Franklin Forest

 

840 Franklin Court

 

Industrial

 

 

 

242

 

893

 

6

 

242

 

899

 

1,140

 

100

 

1983

 

1999

 

Franklin Forest

 

821 Livingston Court

 

Industrial

 

 

 

145

 

975

 

100

 

145

 

1,076

 

1,221

 

130

 

1983

 

1999

 

Franklin Forest

 

841 Livingston Court

 

Industrial

 

 

 

275

 

2,736

 

6

 

275

 

2,743

 

3,017

 

306

 

1983

 

1999

 

Northwest Business Center

 

1335 Capital Circle

 

Industrial

 

 

 

416

 

2,112

 

136

 

416

 

2,247

 

2,664

 

257

 

1985

 

1999

 

Northwest Business Center

 

1337-41-51 Capital Circle

 

Industrial

 

 

 

558

 

5,364

 

773

 

558

 

6,138

 

6,695

 

770

 

1985

 

1999

 

Northwest Business Center

 

2260 Northwest Parkway

 

Industrial

 

 

 

320

 

1,826

 

693

 

320

 

2,518

 

2,838

 

322

 

1982

 

1999

 

Northwest Business Center

 

2252 Northwest Parkway

 

Industrial

 

 

 

92

 

982

 

85

 

92

 

1,066

 

1,158

 

131

 

1982

 

1999

 

Northwest Business Center

 

2242 Northwest Parkway

 

Industrial

 

 

 

175

 

1,444

 

142

 

175

 

1,586

 

1,760

 

184

 

1982

 

1999

 

Northwest Business Center

 

2256 Northwest Parkway

 

Industrial

 

 

 

85

 

916

 

108

 

85

 

1,024

 

1,108

 

129

 

1982

 

1999

 

Northwest Business Center

 

2244 Northwest Parkway

 

Industrial

 

 

 

47

 

492

 

67

 

47

 

559

 

606

 

79

 

1982

 

1999

 

Northwest Business Center

 

2150 Northwest Parkway

 

Industrial

 

 

 

294

 

3,087

 

206

 

294

 

3,292

 

3,587

 

414

 

1982

 

1999

 

Northwest Business Center

 

2152 Northwest Parkway

 

Industrial

 

 

 

161

 

1,637

 

72

 

161

 

1,709

 

1,871

 

200

 

1982

 

1999

 

Northwest Business Center

 

2130 Northwest Parkway

 

Industrial

 

 

 

353

 

2,885

 

406

 

353

 

3,291

 

3,644

 

418

 

1982

 

1999

 

Northwest Business Center

 

2270 Northwest Parkway

 

Industrial

 

1,676

 

483

 

3,887

 

393

 

483

 

4,279

 

4,762

 

493

 

1988

 

1999

 

Northwest Business Center

 

2275 Northwest Parkway

 

Industrial

 

1,108

 

327

 

2,641

 

167

 

327

 

2,808

 

3,135

 

326

 

1988

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MARYLAND HEIGHTS, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Riverport Business Park

 

Riverport Tower

 

Office

 

 

 

3,549

 

30,135

 

2,695

 

3,954

 

32,424

 

36,378

 

5,297

 

1991

 

1997

 

Riverport Business Park

 

Riverport Distribution A

 

Industrial

 

 

 

242

 

2,256

 

110

 

242

 

2,367

 

2,608

 

376

 

1990

 

1997

 

Riverport Business Park

 

Express Scripts HQ

 

Office

 

 

 

2,285

 

12,476

 

190

 

2,285

 

12,666

 

14,951

 

3,234

 

1999

 

1999

 

Riverport Business Park

 

Riverport 1

 

Industrial

 

 

 

900

 

4,423

 

107

 

900

 

4,531

 

5,430

 

1,547

 

1999

 

1999

 

Riverport Business Park

 

Riverport 2

 

Industrial

 

 

 

1,238

 

7,020

 

2

 

1,238

 

7,022

 

8,260

 

2,119

 

2000

 

2000

 

Riverport Business Park

 

Riverport 3

 

Industrial

 

 

 

1,269

 

4,541

 

1,230

 

1,269

 

5,771

 

7,040

 

489

 

2001

 

2001

 

Riverport Distribution

 

Express Scripts Service Center

 

Industrial

 

 

 

1,197

 

8,786

 

172

 

1,197

 

8,958

 

10,155

 

1,474

 

1992

 

1997

 

West Port Center

 

Westport Center I

 

Industrial

 

 

 

1,707

 

5,907

 

0

 

1,707

 

5,908

 

7,614

 

1,079

 

1998

 

1998

 

West Port Center

 

Westport Center II

 

Industrial

 

 

 

915

 

2,885

 

226

 

914

 

3,112

 

4,026

 

1,048

 

1998

 

1998

 

West Port Center

 

Westport Center III

 

Industrial

 

 

 

1,207

 

2,995

 

442

 

1,206

 

3,438

 

4,644

 

677

 

1998

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MASON, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deerfield Crossing

 

Deerfield Crossing Bldg 1

 

Office

 

 

 

1,493

 

14,417

 

690

 

1,493

 

15,107

 

16,600

 

3,487

 

1999

 

1999

 

Deerfield Crossing

 

Deerfield Crossing Bldg 2

 

Office

 

 

 

1,069

 

14,191

 

170

 

1,069

 

14,361

 

15,430

 

1,747

 

2001

 

2001

 

Governor’s Pointe

 

Governor’s Pointe 4770

 

Office

 

 

 

586

 

7,996

 

120

 

596

 

8,106

 

8,702

 

3,052

 

1986

 

1988

 

Governor’s Pointe

 

Governor’s Pointe 4700

 

Industrial

 

 

 

584

 

5,847

 

20

 

595

 

5,856

 

6,451

 

2,181

 

1987

 

1988

 

Governor’s Pointe

 

Governor’s Pointe 4900

 

Industrial

 

 

 

654

 

4,378

 

256

 

673

 

4,615

 

5,288

 

1,650

 

1987

 

1989

 

Governor’s Pointe

 

Governor’s Pointe 4705

 

Office

 

 

 

719

 

7,940

 

2,317

 

987

 

9,990

 

10,976

 

3,223

 

1988

 

1993

 

Governor’s Pointe

 

Governor’s Pointe 4605

 

Office

 

 

 

630

 

17,727

 

824

 

909

 

18,272

 

19,181

 

4,700

 

1990

 

1993

 

Governor’s Pointe

 

Governor’s Pointe 8990

 

Office

 

 

 

594

 

6,165

 

436

 

594

 

6,601

 

7,195

 

2,002

 

1997

 

1997

 

Governor’s Pointe

 

Governor’s Pointe 4660

 

Office

 

 

 

385

 

4,811

 

0

 

529

 

4,667

 

5,196

 

990

 

1997

 

1997

 

Governor’s Pointe

 

Governor’s Pointe 4680

 

Office

 

 

 

1,115

 

8,644

 

82

 

1,115

 

8,726

 

9,841

 

2,085

 

1998

 

1998

 

Governor’s Pointe

 

Governor’s Pointe 4690

 

Office

 

 

 

907

 

3,469

 

6

 

907

 

3,474

 

4,381

 

246

 

2002

 

2002

 

Governors Pointe Retail

 

Bigg’s Supercenter

 

Retail

 

 

 

2,107

 

9,979

 

54

 

4,227

 

7,912

 

12,139

 

2,125

 

1996

 

1996

 

Governors Pointe Retail

 

Lowes

 

Retail

 

 

 

3,750

 

6,569

 

216

 

3,750

 

6,784

 

10,534

 

1,807

 

1997

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MAYFIELD HEIGHTS, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landerbrook Corporate Ctr

 

Landerbrook Corp. Center One

 

Office

 

 

 

1,807

 

10,700

 

(0

)

1,808

 

10,699

 

12,507

 

2,422

 

1997

 

1997

 

Landerbrook Corporate Ctr

 

Landerbrook Corp. Center Two

 

Office

 

 

 

1,382

 

10,175

 

1,620

 

1,382

 

11,795

 

13,177

 

2,368

 

1998

 

1998

 

Landerbrook Corporate Ctr

 

Landerbrook Corp. Center Three

 

Office

 

 

 

1,528

 

8,545

 

4,313

 

1,684

 

12,701

 

14,385

 

869

 

2000

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MCDONOUGH, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Dist. Center

 

120 Declaration Drive

 

Industrial

 

 

 

615

 

8,603

 

32

 

615

 

8,635

 

9,250

 

974

 

1997

 

1999

 

Liberty Dist. Center

 

Liberty III

 

Industrial

 

 

 

2,273

 

14,543

 

423

 

2,273

 

14,966

 

17,240

 

1,215

 

2001

 

2001

 

 

66



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

MENDOTA HEIGHTS, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enterprise Industrial Center

 

Enterprise Industrial Center

 

Industrial

 

1,957

 

864

 

5,054

 

281

 

864

 

5,335

 

6,199

 

862

 

1979

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MIDDLETOWN, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MILFORD, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Park 50

 

Park 50 Bldg 17

 

Office

 

 

 

500

 

5,488

 

285

 

510

 

5,763

 

6,273

 

2,458

 

1985

 

1986

 

Park 50

 

Park 50 Bldg 20

 

Industrial

 

 

 

461

 

7,077

 

0

 

469

 

7,069

 

7,538

 

3,107

 

1987

 

1988

 

Park 50

 

Park 50 Bldg 25

 

Industrial

 

 

 

1,161

 

4,146

 

680

 

1,184

 

4,802

 

5,986

 

1,325

 

1989

 

1993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MINNEAPOLIS, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadway Business Center

 

Broadway Business Ctr III

 

Industrial

 

 

 

140

 

817

 

64

 

144

 

877

 

1,021

 

126

 

1983

 

1998

 

Broadway Business Center

 

Broadway Business Ctr IV

 

Industrial

 

 

 

194

 

1,163

 

204

 

200

 

1,360

 

1,560

 

259

 

1983

 

1998

 

Broadway Business Center

 

Broadway Business Ctr VI

 

Industrial

 

 

 

433

 

2,527

 

578

 

447

 

3,091

 

3,538

 

497

 

1983

 

1998

 

Broadway Business Center

 

Broadway Business Ctr VII

 

Industrial

 

 

 

233

 

1,377

 

82

 

241

 

1,451

 

1,692

 

205

 

1983

 

1998

 

Minneapolis

 

Chilies Ground Lease

 

Grounds

 

 

 

921

 

 

69

 

990

 

 

990

 

2

 

1998

 

 

 

Minneapolis

 

Olive Garden Ground Lease

 

Grounds

 

 

 

921

 

 

(0

)

921

 

 

921

 

 

1998

 

 

 

10801 Red Circle Drive

 

10801 Red Circle Dr.

 

Office

 

 

 

527

 

3,478

 

701

 

527

 

4,179

 

4,706

 

1,460

 

1977

 

1997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MONROE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monroe Business Center

 

Monroe Business Center Bldg. 1

 

Industrial

 

 

 

660

 

5,458

 

304

 

660

 

5,763

 

6,422

 

801

 

1992

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MORRISVILLE, NORTH CAROLINA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Perimeter Park

 

507 Airport Blvd

 

Industrial

 

 

 

1,327

 

8,464

 

780

 

1,351

 

9,220

 

10,571

 

1,261

 

1993

 

1999

 

Perimeter Park

 

5151 McCrimmon Pkwy

 

Industrial

 

 

 

1,318

 

8,241

 

420

 

1,342

 

8,637

 

9,979

 

1,181

 

1995

 

1999

 

Perimeter Park

 

2600 Perimeter Park Dr

 

Industrial

 

 

 

975

 

5,407

 

331

 

991

 

5,722

 

6,713

 

660

 

1997

 

1999

 

Perimeter Park

 

5150 McCrimmon Pkwy

 

Industrial

 

 

 

1,739

 

12,278

 

102

 

1,773

 

12,346

 

14,119

 

1,378

 

1998

 

1999

 

Perimeter Park

 

2400 Perimeter Park Dr.

 

Office

 

 

 

760

 

6,322

 

973

 

778

 

7,277

 

8,055

 

822

 

1999

 

1999

 

Perimeter Park

 

3000 Perimeter Park Dr

 

Industrial

 

1,801

 

482

 

3,165

 

595

 

491

 

3,751

 

4,242

 

532

 

1989

 

1999

 

Perimeter Park

 

2900 Perimeter Park Dr

 

Industrial

 

1,361

 

235

 

2,346

 

582

 

241

 

2,921

 

3,162

 

448

 

1990

 

1999

 

Perimeter Park

 

2800 Perimeter Park Dr

 

Industrial

 

2,501

 

777

 

4,940

 

177

 

791

 

5,103

 

5,894

 

617

 

1992

 

1999

 

Perimeter Park

 

100 Perimeter Park Drive

 

Industrial

 

 

 

477

 

3,250

 

524

 

477

 

3,774

 

4,251

 

439

 

1987

 

1999

 

Perimeter Park

 

200 Perimeter Park Drive

 

Industrial

 

 

 

567

 

3,160

 

79

 

567

 

3,239

 

3,806

 

384

 

1987

 

1999

 

Perimeter Park

 

300 Perimeter Park Drive

 

Industrial

 

 

 

567

 

3,159

 

129

 

567

 

3,288

 

3,855

 

392

 

1986

 

1999

 

Perimeter Park

 

400 Perimeter Park Drive

 

Industrial

 

3,740

 

486

 

4,470

 

104

 

486

 

4,574

 

5,060

 

540

 

1983

 

1999

 

Perimeter Park

 

500 Perimeter Park Drive

 

Industrial

 

 

 

522

 

4,421

 

113

 

522

 

4,534

 

5,056

 

559

 

1985

 

1999

 

Perimeter Park

 

800 Perimeter Park Drive

 

Industrial

 

2,765

 

405

 

3,321

 

1,664

 

405

 

4,985

 

5,390

 

624

 

1984

 

1999

 

Perimeter Park

 

900 Perimeter Park Drive

 

Industrial

 

 

 

629

 

1,918

 

1,037

 

629

 

2,955

 

3,584

 

355

 

1982

 

1999

 

Perimeter Park

 

1000 Perimeter Park Drive

 

Industrial

 

 

 

405

 

3,268

 

948

 

405

 

4,217

 

4,622

 

605

 

1982

 

1999

 

Perimeter Park

 

1100 Perimeter Park Drive

 

Industrial

 

 

 

777

 

6,056

 

465

 

794

 

6,504

 

7,298

 

761

 

1990

 

1999

 

Perimeter Park

 

1400 Perimeter Park Drive

 

Office

 

 

 

666

 

4,614

 

351

 

974

 

4,658

 

5,632

 

561

 

1991

 

1999

 

Perimeter Park

 

1500 Perimeter Park Drive

 

Office

 

 

 

1,148

 

10,424

 

368

 

1,177

 

10,763

 

11,940

 

1,280

 

1996

 

1999

 

Perimeter Park

 

1600 Perimeter Park Drive

 

Office

 

 

 

1,463

 

10,160

 

295

 

1,492

 

10,426

 

11,918

 

1,242

 

1994

 

1999

 

Perimeter Park

 

1800 Perimeter Park Drive

 

Office

 

 

 

907

 

5,751

 

156

 

970

 

5,844

 

6,814

 

689

 

1994

 

1999

 

Perimeter Park

 

2000 Perimeter Park Drive

 

Office

 

 

 

788

 

5,860

 

574

 

842

 

6,380

 

7,222

 

986

 

1997

 

1999

 

Perimeter Park

 

1700 Perimeter Center West

 

Office

 

 

 

1,230

 

10,808

 

322

 

1,260

 

11,100

 

12,360

 

1,231

 

1997

 

1999

 

Perimeter Park

 

3900 N. Paramount Parkway

 

Office

 

 

 

540

 

13,328

 

154

 

574

 

13,447

 

14,022

 

1,531

 

1998

 

1999

 

Perimeter Park

 

3900 S.Paramount Pkwy

 

Office

 

 

 

1,575

 

12,528

 

1,001

 

1,612

 

13,492

 

15,104

 

2,035

 

2000

 

1999

 

Perimeter Park

 

5200 East Paramount

 

Office

 

 

 

1,748

 

17,829

 

228

 

1,797

 

18,008

 

19,805

 

2,771

 

1999

 

1999

 

Perimeter Park

 

3500 Paramount Pkwy

 

Office

 

 

 

755

 

13,022

 

2

 

755

 

13,024

 

13,779

 

1,831

 

1999

 

2000

 

Perimeter Park

 

2700 Perimeter Park

 

Industrial

 

 

 

662

 

3,222

 

948

 

662

 

4,170

 

4,832

 

314

 

2001

 

2001

 

Perimeter Park

 

5200 West Paramount

 

Office

 

 

 

1,831

 

13,288

 

15

 

1,831

 

13,303

 

15,134

 

973

 

2000

 

2001

 

Perimeter Park

 

2450 Perimeter Park

 

Office

 

 

 

669

 

4,003

 

0

 

669

 

4,003

 

4,672

 

547

 

2001

 

2001

 

Research Triangle Ind. Ctr

 

409 Airport Blvd Bldg A

 

Industrial

 

763

 

296

 

1,291

 

2

 

300

 

1,289

 

1,588

 

151

 

1983

 

1999

 

Research Triangle Ind. Ctr

 

409 Airport Blvd Bldg B

 

Industrial

 

476

 

175

 

772

 

34

 

177

 

804

 

981

 

102

 

1986

 

1999

 

Research Triangle Ind. Ctr

 

409 Airport Blvd bldg C

 

Industrial

 

1,553

 

185

 

2,856

 

199

 

193

 

3,047

 

3,240

 

373

 

1982

 

1999

 

Woodlake Center

 

100 Innovation Avenue

 

Industrial

 

 

 

633

 

4,014

 

261

 

633

 

4,275

 

4,908

 

583

 

1994

 

1999

 

Woodlake Center

 

101 Innovation Ave

 

Industrial

 

 

 

615

 

4,106

 

98

 

615

 

4,203

 

4,818

 

492

 

1997

 

1999

 

Woodlake Center

 

200 Innovation Drive

 

Industrial

 

 

 

357

 

4,513

 

23

 

357

 

4,536

 

4,893

 

687

 

1999

 

1999

 

Woodlake Center

 

501 Innovation Ave.

 

Industrial

 

 

 

640

 

7,107

 

47

 

640

 

7,154

 

7,794

 

1,564

 

1999

 

1999

 

Woodlake Center

 

1000 Innovation

 

Industrial

 

 

 

514

 

2,927

 

1

 

514

 

2,928

 

3,442

 

134

 

1996

 

2002

 

Woodlake Center

 

1200 Innovation

 

Industrial

 

 

 

740

 

5,914

 

 

740

 

5,914

 

6,654

 

243

 

1996

 

2002

 

 

67



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

NAPERVILLE, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Meridian Business Campus

 

1835 Jefferson

 

Industrial

 

 

 

1,723

 

5,553

 

 

1,723

 

5,553

 

7,276

 

66

 

2003

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NASHVILLE, TENNESSEE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Airpark Business Center

 

1420 Donelson Pike

 

Industrial

 

550

 

1,331

 

5,417

 

626

 

1,357

 

6,017

 

7,374

 

801

 

1985

 

1999

 

Airpark Business Center

 

1410 Donelson Pike

 

Industrial

 

631

 

1,411

 

6,917

 

155

 

1,411

 

7,073

 

8,484

 

828

 

1986

 

1999

 

Airpark Business Center

 

1400 Donelson Pike

 

Industrial

 

492

 

1,276

 

5,057

 

269

 

1,276

 

5,327

 

6,603

 

713

 

1996

 

1999

 

Airpark Business Center

 

400 Airpark Center

 

Industrial

 

1,752

 

419

 

2,188

 

8

 

419

 

2,196

 

2,615

 

258

 

1989

 

1999

 

Airpark Business Center

 

500 Airpark Center Dr.

 

Industrial

 

2,880

 

923

 

2,465

 

909

 

923

 

3,374

 

4,297

 

480

 

1988

 

1999

 

Airpark Business Center

 

600 Airport Center Dr

 

Industrial

 

2,782

 

729

 

3,341

 

52

 

729

 

3,393

 

4,122

 

387

 

1990

 

1999

 

Airpark Business Center

 

700 Airpark Center Dr.

 

Industrial

 

2,702

 

801

 

2,849

 

359

 

801

 

3,209

 

4,010

 

380

 

1992

 

1999

 

Airpark Business Center

 

800 Airpark Center Dr.

 

Industrial

 

2,478

 

924

 

4,021

 

241

 

924

 

4,263

 

5,187

 

548

 

1995

 

1999

 

Airpark Business Center

 

900 Airpark Center Dr

 

Industrial

 

2,008

 

798

 

3,424

 

205

 

798

 

3,630

 

4,427

 

458

 

1995

 

1999

 

Airpark Business Center

 

1000 Airpark Center Dr.

 

Industrial

 

 

 

1,300

 

9,650

 

26

 

1,300

 

9,676

 

10,976

 

1,088

 

1997

 

1999

 

Airpark Business Center

 

5270 Harding place

 

Industrial

 

1,111

 

535

 

2,501

 

8

 

535

 

2,509

 

3,045

 

283

 

1996

 

1999

 

Airpark Business Center

 

1415 Donelson Pike

 

Industrial

 

3,806

 

1,308

 

8,822

 

230

 

1,308

 

9,052

 

10,361

 

1,010

 

1996

 

1999

 

Airpark Business Center

 

1413 Donelson Pike

 

Industrial

 

1,235

 

549

 

2,751

 

37

 

549

 

2,788

 

3,336

 

318

 

1996

 

1999

 

Airpark Business Center

 

5233 Harding Place

 

Industrial

 

 

 

628

 

3,084

 

9

 

628

 

3,093

 

3,721

 

574

 

1998

 

1999

 

Airpark East

 

Airpark East-Eagle Bldg

 

Industrial

 

 

 

1,564

 

3,341

 

677

 

1,564

 

4,018

 

5,582

 

106

 

2001

 

2002

 

Cumberland Business Center

 

Cumberland Business Center I

 

Industrial

 

 

 

1,461

 

6,958

 

(0

)

1,461

 

6,958

 

8,419

 

1,255

 

1999

 

1999

 

Four-Forty Business Center

 

700 Melrose Avenue

 

Industrial

 

3,326

 

938

 

6,481

 

1

 

938

 

6,481

 

7,420

 

724

 

1997

 

1999

 

Four-Forty Business Center

 

684 Melrose Ave

 

Industrial

 

 

 

1,812

 

7,605

 

392

 

1,812

 

7,997

 

9,809

 

1,060

 

1998

 

1999

 

Four-Forty Business Center

 

782 Melrose Avenue

 

Industrial

 

 

 

1,522

 

5,766

 

260

 

1,522

 

6,027

 

7,549

 

738

 

1997

 

1999

 

Four-Forty Business Center

 

784 Melrose Ave.

 

Industrial

 

 

 

471

 

3,331

 

517

 

471

 

3,847

 

4,319

 

653

 

1999

 

1999

 

Greenbriar

 

Greenbriar Business Park

 

Industrial

 

 

 

1,445

 

5,199

 

620

 

1,445

 

5,819

 

7,264

 

1,329

 

1986

 

1994

 

Haywood Oaks

 

Haywood Oaks Bldg 2

 

Industrial

 

 

 

395

 

1,932

 

106

 

395

 

2,039

 

2,433

 

510

 

1988

 

1993

 

Haywood Oaks

 

Haywood Oaks Bldg 3

 

Industrial

 

 

 

346

 

1,763

 

360

 

346

 

2,123

 

2,470

 

587

 

1988

 

1993

 

Haywood Oaks

 

Haywood Oaks Bldg 4

 

Industrial

 

 

 

435

 

2,115

 

209

 

435

 

2,325

 

2,760

 

665

 

1988

 

1993

 

Haywood Oaks

 

Haywood Oaks Bldg 5

 

Industrial

 

 

 

629

 

3,075

 

103

 

629

 

3,179

 

3,808

 

803

 

1988

 

1993

 

Haywood Oaks

 

Haywood Oaks Bldg 6

 

Industrial

 

 

 

924

 

6,394

 

383

 

946

 

6,756

 

7,701

 

1,707

 

1989

 

1993

 

Haywood Oaks

 

Haywood Oaks Bldg 7

 

Industrial

 

 

 

456

 

1,864

 

261

 

456

 

2,125

 

2,581

 

449

 

1995

 

1995

 

Haywood Oaks

 

Haywood Oaks Bldg 8

 

Industrial

 

 

 

617

 

3,536

 

78

 

751

 

3,480

 

4,231

 

916

 

1997

 

1997

 

Haywood Oaks East

 

Haywood Oaks East

 

Industrial

 

 

 

969

 

5,883

 

248

 

969

 

6,131

 

7,100

 

1,009

 

2000

 

2000

 

Lakeview Place

 

Three Lakeview

 

Office

 

 

 

2,126

 

13,966

 

1,619

 

2,126

 

15,585

 

17,711

 

2,445

 

1999

 

1999

 

Lakeview Place

 

One Lakeview Place

 

Office

 

 

 

2,046

 

11,852

 

1,418

 

2,123

 

13,193

 

15,316

 

2,023

 

1986

 

1998

 

Lakeview Place

 

Two Lakeview Place

 

Office

 

 

 

2,046

 

11,883

 

1,040

 

2,046

 

12,924

 

14,970

 

2,105

 

1988

 

1998

 

Metro Center

 

545 Mainstream Dr.

 

Office

 

 

 

847

 

6,326

 

494

 

847

 

6,821

 

7,668

 

858

 

1983

 

1999

 

Metro Center

 

566 Mainstream Dr.

 

Industrial

 

 

 

454

 

3,937

 

496

 

454

 

4,433

 

4,887

 

571

 

1982

 

1999

 

Metro Center

 

621 Mainstream Dr.

 

Industrial

 

 

 

428

 

2,868

 

223

 

428

 

3,092

 

3,519

 

359

 

1984

 

1999

 

Metro Center

 

Riverview Business Center I

 

Industrial

 

 

 

497

 

2,862

 

58

 

497

 

2,921

 

3,418

 

510

 

2000

 

2000

 

Metro Center

 

Riverview Business Center II

 

Industrial

 

 

 

685

 

2,723

 

203

 

685

 

2,927

 

3,612

 

310

 

2001

 

2001

 

Metropolitan Airport Center

 

Metro Airport Center Bldg 1

 

Industrial

 

 

 

1,180

 

4,836

 

168

 

1,190

 

4,994

 

6,184

 

1,295

 

1999

 

1999

 

Metropolitan Airport Center

 

Metro Airport Bus Ctr C

 

Industrial

 

 

 

1,053

 

6,615

 

111

 

1,053

 

6,726

 

7,779

 

447

 

2001

 

2001

 

Nashville Business Center

 

3300 Briley Park Blvd

 

Industrial

 

 

 

936

 

6,603

 

0

 

936

 

6,603

 

7,539

 

1,099

 

1997

 

1999

 

Grassmere

 

Powertel Pk Lot at Grassmere

 

Grounds

 

 

 

1,050

 

 

 

1,050

 

 

1,050

 

 

2003

 

2003

 

Royal Parkway Center

 

2515 Perimeter Park

 

Industrial

 

 

 

731

 

4,766

 

201

 

734

 

4,963

 

5,698

 

556

 

1990

 

1999

 

Royal Parkway Center

 

500 Royal Parkway

 

Industrial

 

 

 

603

 

4,644

 

8

 

603

 

4,652

 

5,255

 

520

 

1990

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEW HOPE, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NORCROSS, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gwinnett Park

 

1750 Beaver Ruin

 

Industrial

 

 

 

640

 

6,793

 

427

 

640

 

7,220

 

7,860

 

873

 

1997

 

1999

 

Gwinnett Park

 

4258 Communications Drive

 

Industrial

 

 

 

29

 

2,388

 

116

 

29

 

2,504

 

2,533

 

277

 

1981

 

1999

 

Gwinnett Park

 

4291 Communications Drive

 

Industrial

 

 

 

4

 

1,467

 

75

 

16

 

1,531

 

1,546

 

168

 

1981

 

1999

 

Gwinnett Park

 

1826 Doan Way

 

Industrial

 

 

 

51

 

3,065

 

122

 

51

 

3,187

 

3,238

 

408

 

1984

 

1999

 

Gwinnett Park

 

1650 International Blvd

 

Industrial

 

 

 

69

 

2,211

 

641

 

75

 

2,847

 

2,921

 

334

 

1984

 

1999

 

Gwinnett Park

 

4245 International Blvd

 

Industrial

 

 

 

192

 

10,874

 

(0

)

192

 

10,874

 

11,066

 

1,216

 

1985

 

1999

 

Gwinnett Park

 

4250 International Blvd

 

Industrial

 

 

 

193

 

3,042

 

140

 

216

 

3,159

 

3,375

 

350

 

1986

 

1999

 

Gwinnett Park

 

4295 International Blvd

 

Industrial

 

 

 

58

 

2,330

 

35

 

58

 

2,365

 

2,423

 

264

 

1984

 

1999

 

Gwinnett Park

 

4320 International Blvd

 

Industrial

 

 

 

44

 

2,058

 

391

 

54

 

2,439

 

2,493

 

250

 

1984

 

1999

 

Gwinnett Park

 

4350 International Blvd

 

Industrial

 

 

 

78

 

3,061

 

354

 

78

 

3,416

 

3,493

 

391

 

1982

 

1999

 

Gwinnett Park

 

4355 International Blvd

 

Industrial

 

 

 

233

 

2,969

 

264

 

233

 

3,233

 

3,467

 

463

 

1983

 

1999

 

Gwinnett Park

 

4405A International Blvd

 

Industrial

 

 

 

97

 

2,680

 

768

 

97

 

3,448

 

3,545

 

639

 

1984

 

1999

 

Gwinnett Park

 

4405B International Blvd

 

Industrial

 

 

 

118

 

3,900

 

233

 

137

 

4,114

 

4,251

 

485

 

1984

 

1999

 

 

68



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Gwinnett Park

 

4405C International Blvd

 

Industrial

 

 

 

21

 

800

 

82

 

21

 

883

 

904

 

101

 

1984

 

1999

 

Gwinnett Park

 

1858 Meca Way

 

Industrial

 

 

 

20

 

1,828

 

171

 

27

 

1,991

 

2,019

 

247

 

1975

 

1999

 

Gwinnett Park

 

4316 Park Drive

 

Industrial

 

 

 

262

 

1,424

 

206

 

262

 

1,629

 

1,892

 

179

 

1980

 

1999

 

Gwinnett Park

 

4357 Park Drive

 

Industrial

 

 

 

12

 

2,251

 

417

 

12

 

2,669

 

2,680

 

372

 

1979

 

1999

 

Gwinnett Park

 

4366 Park Drive

 

Office

 

 

 

6

 

205

 

312

 

22

 

502

 

524

 

59

 

1981

 

1999

 

Gwinnett Park

 

4386 Park Drive

 

Industrial

 

 

 

17

 

986

 

411

 

17

 

1,397

 

1,415

 

187

 

1973

 

1999

 

Gwinnett Park

 

4436 Park Drive

 

Industrial

 

 

 

18

 

2,279

 

36

 

26

 

2,306

 

2,333

 

257

 

1968

 

1999

 

Gwinnett Park

 

4437 Park Drive

 

Industrial

 

 

 

21

 

2,644

 

206

 

21

 

2,850

 

2,871

 

346

 

1978

 

1999

 

Gwinnett Park

 

4467 Park Drive

 

Industrial

 

 

 

6

 

1,630

 

95

 

6

 

1,725

 

1,731

 

214

 

1978

 

1999

 

Gwinnett Park

 

4487 Park Drive

 

Industrial

 

 

 

6

 

3,407

 

374

 

6

 

3,781

 

3,787

 

486

 

1978

 

1999

 

Gwinnett Park

 

1835 Shackleford Court

 

Office

 

 

 

29

 

6,309

 

711

 

29

 

7,020

 

7,049

 

841

 

1990

 

1999

 

Gwinnett Park

 

1854 Shackleford Road

 

Office

 

 

 

52

 

10,387

 

1,067

 

52

 

11,454

 

11,506

 

1,596

 

1985

 

1999

 

Gwinnett Park

 

4274 Shackleford Road

 

Industrial

 

 

 

27

 

3,626

 

184

 

32

 

3,805

 

3,837

 

437

 

1974

 

1999

 

Gwinnett Park

 

4275 Shackleford Court

 

Office

 

384

 

8

 

2,125

 

451

 

12

 

2,573

 

2,584

 

322

 

1985

 

1999

 

Gwinnett Park

 

4344 Shackleford Road

 

Industrial

 

 

 

286

 

2,221

 

196

 

293

 

2,410

 

2,702

 

390

 

1975

 

1999

 

Gwinnett Park

 

4355 Shackleford Road

 

Industrial

 

 

 

7

 

1,904

 

141

 

70

 

1,983

 

2,053

 

643

 

1972

 

1999

 

Gwinnett Park

 

4364 Shackleford Road

 

Industrial

 

 

 

9

 

982

 

6

 

9

 

987

 

997

 

110

 

1973

 

1999

 

Gwinnett Park

 

4366 Shackleford Road

 

Industrial

 

 

 

20

 

2,567

 

315

 

26

 

2,875

 

2,901

 

417

 

1981

 

1999

 

Gwinnett Park

 

4388 Shackelford Road

 

Industrial

 

 

 

33

 

4,002

 

395

 

43

 

4,387

 

4,430

 

472

 

1981

 

1999

 

Gwinnett Park

 

4444 Shackleford Road

 

Industrial

 

 

 

31

 

2,632

 

358

 

31

 

2,989

 

3,021

 

439

 

1979

 

1999

 

Gwinnett Pavilion

 

1505 Pavillion Place

 

Industrial

 

 

 

448

 

3,996

 

530

 

455

 

4,519

 

4,974

 

976

 

1988

 

1999

 

Gwinnett Pavilion

 

3883 Steve Reynolds Blvd.

 

Industrial

 

 

 

612

 

4,928

 

27

 

612

 

4,955

 

5,567

 

553

 

1990

 

1999

 

Gwinnett Pavilion

 

3890 Steve Reynolds Blvd

 

Industrial

 

 

 

519

 

3,026

 

0

 

519

 

3,026

 

3,545

 

341

 

1991

 

1999

 

Gwinnett Pavilion

 

3950 Steve Reynolds Blvd.

 

Industrial

 

 

 

684

 

2,825

 

79

 

684

 

2,903

 

3,588

 

334

 

1992

 

1999

 

Northeast I85

 

5755 Peachtree Industrial Blvd

 

Office

 

 

 

800

 

3,652

 

229

 

800

 

3,881

 

4,681

 

434

 

1997

 

1999

 

Northeast I85

 

5765 Peachtree Industrial Blvd

 

Industrial

 

 

 

521

 

4,671

 

0

 

521

 

4,671

 

5,192

 

523

 

1997

 

1999

 

Northeast I85

 

5775 Peachtree Industrial Blvd

 

Industrial

 

 

 

521

 

4,695

 

36

 

521

 

4,730

 

5,251

 

543

 

1997

 

1999

 

Northwoods

 

2915 Courtyards Drive

 

Industrial

 

 

 

268

 

1,967

 

42

 

268

 

2,009

 

2,276

 

226

 

1986

 

1999

 

Northwoods

 

2925 Courtyards Drive

 

Industrial

 

 

 

333

 

3,243

 

291

 

333

 

3,534

 

3,867

 

367

 

1986

 

1999

 

Northwoods

 

2975 Courtyards Drive

 

Industrial

 

 

 

144

 

1,268

 

260

 

144

 

1,528

 

1,672

 

167

 

1986

 

1999

 

Northwoods

 

2995 Courtyards Drive

 

Industrial

 

 

 

109

 

894

 

6

 

109

 

900

 

1,010

 

100

 

1986

 

1999

 

Northwoods

 

2725 Northwoods Pkwy

 

Industrial

 

 

 

440

 

2,575

 

661

 

440

 

3,236

 

3,676

 

441

 

1984

 

1999

 

Northwoods

 

2755 Northwoods Pkwy

 

Industrial

 

 

 

249

 

2,887

 

150

 

249

 

3,037

 

3,286

 

351

 

1986

 

1999

 

Northwoods

 

2775 Northwoods Pkwy

 

Industrial

 

 

 

322

 

2,431

 

145

 

322

 

2,576

 

2,898

 

273

 

1986

 

1999

 

Northwoods

 

2850 Colonnades Court

 

Industrial

 

 

 

562

 

5,294

 

106

 

562

 

5,399

 

5,961

 

591

 

1988

 

1999

 

Northwoods

 

3040 Northwoods Pkwy

 

Industrial

 

 

 

298

 

1,806

 

311

 

298

 

2,117

 

2,415

 

290

 

1984

 

1999

 

Northwoods

 

3044 Northwoods Circle

 

Industrial

 

 

 

167

 

718

 

150

 

167

 

868

 

1,035

 

85

 

1984

 

1999

 

Northwoods

 

3055 Northwoods Pkwy

 

Industrial

 

 

 

213

 

1,560

 

110

 

213

 

1,670

 

1,883

 

260

 

1985

 

1999

 

Northwoods

 

3075 Northwoods Pkwy

 

Industrial

 

 

 

374

 

2,872

 

133

 

374

 

3,005

 

3,379

 

379

 

1985

 

1999

 

Northwoods

 

3100 Northwoods Pkwy

 

Industrial

 

 

 

393

 

2,550

 

157

 

393

 

2,707

 

3,100

 

290

 

1985

 

1999

 

Northwoods

 

3155 Northwoods Pkwy

 

Industrial

 

 

 

331

 

2,511

 

12

 

331

 

2,522

 

2,854

 

281

 

1985

 

1999

 

Northwoods

 

3175 Northwoods Pkwy

 

Industrial

 

 

 

250

 

2,076

 

42

 

250

 

2,118

 

2,368

 

233

 

1985

 

1999

 

Peachtree Corners Tech Center

 

3170 Reps Miller Road

 

Industrial

 

 

 

500

 

3,671

 

18

 

500

 

3,689

 

4,189

 

412

 

1998

 

1999

 

Peachtree Corners Tech Center

 

3180 Reps Miller Road

 

Industrial

 

 

 

500

 

2,951

 

38

 

500

 

2,989

 

3,489

 

335

 

1998

 

1999

 

Peachtree Corners Tech Center

 

3190 Reps Miller Road

 

Industrial

 

 

 

525

 

2,371

 

534

 

525

 

2,905

 

3,430

 

329

 

1998

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NORTHLAKE, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Northlake

 

Northlake I

 

Industrial

 

 

 

5,721

 

10,792

 

 

5,721

 

10,792

 

16,513

 

400

 

2002

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NORTH OLMSTED, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Great Northern Corp Center

 

Great Northern Corp Center I

 

Office

 

 

 

1,048

 

7,182

 

662

 

1,040

 

7,852

 

8,892

 

1,571

 

1985

 

1996

 

Great Northern Corp Center

 

Great Northern Corp Center II

 

Office

 

 

 

1,048

 

7,262

 

891

 

1,048

 

8,153

 

9,201

 

1,762

 

1987

 

1996

 

Great Northern Corp Center

 

Great Northern Corp Center III

 

Office

 

 

 

604

 

5,732

 

856

 

604

 

6,588

 

7,192

 

1,551

 

1999

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OLIVETTE, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I-170 Center

 

I-170 Center

 

Industrial

 

 

 

950

 

4,206

 

679

 

1,018

 

4,816

 

5,834

 

989

 

1986

 

1996

 

Warson Commerce Center

 

Warson Commerce Center

 

Industrial

 

 

 

749

 

5,426

 

486

 

749

 

5,911

 

6,660

 

903

 

1987

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ORLANDO, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Centre at Lee Vista

 

Lee Vista Distribution Ctr I

 

Industrial

 

 

 

819

 

4,559

 

436

 

819

 

4,995

 

5,814

 

1,383

 

1998

 

1999

 

Business Centre at Lee Vista

 

Lee Vista Distribution Ctr II

 

Industrial

 

 

 

740

 

3,945

 

12

 

740

 

3,957

 

4,697

 

832

 

1999

 

2000

 

Business Centre at Lee Vista

 

Lee Vista Service Center I

 

Industrial

 

 

 

926

 

2,357

 

627

 

926

 

2,984

 

3,910

 

202

 

2000

 

2001

 

Business Centre at Lee Vista-Gen

 

Lee Vista Distrib. Center III

 

Industrial

 

 

 

841

 

3,580

 

167

 

841

 

3,748

 

4,588

 

163

 

2001

 

2002

 

Liberty Park @ Southcenter

 

Southcenter I-Brede/Allied BTS

 

Industrial

 

 

 

2,489

 

4,469

 

 

2,489

 

4,469

 

6,959

 

115

 

2002

 

2002

 

 

69



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg B

 

Industrial

 

 

 

565

 

4,906

 

22

 

565

 

4,927

 

5,492

 

552

 

1996

 

1999

 

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg A

 

Industrial

 

 

 

493

 

4,557

 

22

 

493

 

4,579

 

5,072

 

520

 

1997

 

1999

 

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg D

 

Industrial

 

 

 

593

 

4,142

 

0

 

593

 

4,142

 

4,735

 

477

 

1998

 

1999

 

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg E

 

Industrial

 

 

 

649

 

4,667

 

158

 

649

 

4,826

 

5,474

 

548

 

1997

 

1999

 

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg F

 

Industrial

 

 

 

1,030

 

5,543

 

916

 

1,030

 

6,459

 

7,489

 

954

 

1999

 

1999

 

Parksouth Dist. Center

 

Parksouth Dist. Ctr-Bldg H

 

Industrial

 

 

 

725

 

3,962

 

4

 

725

 

3,966

 

4,691

 

434

 

2000

 

2000

 

Parksouth Dist. Center

 

Chase BTS-Orlando

 

Industrial

 

 

 

598

 

2,049

 

1,168

 

669

 

3,146

 

3,815

 

147

 

2000

 

2001

 

Parksouth Dist. Center

 

Parksouth-Benjamin Moore BTS

 

Industrial

 

 

 

708

 

2,070

 

 

708

 

2,070

 

2,778

 

48

 

2003

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PARK RIDGE, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oakmont Corporate Center

 

O’Hare Corporate Centre

 

Office

 

 

 

1,476

 

8,819

 

 

1,476

 

8,819

 

10,295

 

 

1985

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PEPPER PIKE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Circle

 

Corporate Circle

 

Office

 

 

 

1,696

 

11,484

 

2,092

 

1,698

 

13,575

 

15,272

 

2,470

 

1983

 

1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLAINFIELD, INDIANA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plainfield Business Park

 

Plainfield Building 1

 

Industrial

 

6,168

 

1,104

 

11,190

 

10

 

1,104

 

11,200

 

12,304

 

1,089

 

2000

 

2000

 

Plainfield Business Park

 

Plainfield Building 2

 

Industrial

 

 

 

1,387

 

9,691

 

0

 

1,387

 

9,691

 

11,078

 

1,091

 

2000

 

2000

 

Plainfield Business Park

 

Plainfield Building 3

 

Industrial

 

 

 

2,016

 

12,415

 

 

2,016

 

12,415

 

14,431

 

170

 

2002

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLANO, TEXAS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legacy Business Park

 

Metasolv Building Phase I

 

Office

 

 

 

1,527

 

5,849

 

706

 

1,527

 

6,555

 

8,082

 

829

 

1997

 

1999

 

Legacy Business Park

 

Metasolv Building Phase II

 

Office

 

 

 

1,181

 

11,236

 

65

 

1,181

 

11,301

 

12,482

 

1,515

 

1999

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PLYMOUTH, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medicine Lake

 

Medicine Lake Indus. Center

 

Industrial

 

3,352

 

1,158

 

6,701

 

838

 

1,145

 

7,551

 

8,696

 

1,325

 

1970

 

1997

 

Plymouth Office/Tech Center

 

Plymouth Office/Tech Center

 

Industrial

 

 

 

428

 

2,450

 

622

 

431

 

3,068

 

3,499

 

501

 

1986

 

1998

 

Plymouth Service Center

 

Plymouth Service Center

 

Industrial

 

 

 

345

 

2,009

 

742

 

351

 

2,745

 

3,096

 

615

 

1978

 

1999

 

Westpoint Buildings

 

Westpoint Business Ctr

 

Office

 

 

 

98

 

573

 

292

 

114

 

848

 

963

 

168

 

1978

 

1999

 

Westpoint Buildings

 

Westpoint Bldg B&C

 

Industrial

 

 

 

370

 

2,149

 

526

 

370

 

2,674

 

3,045

 

495

 

1978

 

1999

 

Westpoint Buildings

 

Westpoint Bldg D&E

 

Industrial

 

 

 

362

 

2,111

 

733

 

362

 

2,844

 

3,206

 

683

 

1978

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RALEIGH, NORTH CAROLINA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brook Forest

 

Brook Forest I

 

Office

 

 

 

1,242

 

6,199

 

84

 

1,242

 

6,283

 

7,525

 

798

 

2000

 

2000

 

Centerview

 

Centerview 5540

 

Office

 

 

 

773

 

6,307

 

 

773

 

6,307

 

7,079

 

41

 

1986

 

2003

 

Centerview

 

Centerview 5565

 

Office

 

 

 

513

 

4,831

 

 

513

 

4,831

 

5,344

 

33

 

1999

 

2003

 

Centerview

 

Centerview 5580

 

Office

 

 

 

768

 

5,675

 

 

768

 

5,675

 

6,443

 

39

 

1987

 

2003

 

Crabtree Overlook

 

Crabtree Overlook

 

Office

 

 

 

2,164

 

20,949

 

 

2,164

 

20,949

 

23,113

 

1,617

 

2000

 

2001

 

Interchange Plaza

 

6525 West Campus Oval

 

Office

 

 

 

842

 

3,451

 

1,917

 

881

 

5,329

 

6,210

 

332

 

1993

 

1999

 

Interchange Plaza

 

801 Jones Franklin Rd

 

Office

 

4,963

 

1,351

 

7,800

 

251

 

1,351

 

8,051

 

9,402

 

900

 

1995

 

1999

 

Interchange Plaza

 

5520 Capital Ctr. Dr

 

Office

 

 

 

842

 

4,412

 

507

 

842

 

4,919

 

5,761

 

574

 

1993

 

1999

 

Spring Forest Business Center

 

3200 Spring Forest Road

 

Industrial

 

 

 

561

 

5,253

 

544

 

561

 

5,797

 

6,358

 

663

 

1986

 

1999

 

Spring Forest Business Center

 

3100 Spring Forest Road

 

Industrial

 

 

 

616

 

4,232

 

344

 

616

 

4,576

 

5,192

 

545

 

1992

 

1999

 

Spring Forest Business Center

 

Spring Forest Bus Center III

 

Office

 

 

 

462

 

3,124

 

309

 

462

 

3,433

 

3,895

 

189

 

2002

 

2002

 

Walnut Creek

 

Walnut Creek Business Park #1

 

Industrial

 

 

 

419

 

3,112

 

7

 

419

 

3,119

 

3,538

 

366

 

2001

 

2001

 

Walnut Creek

 

Walnut Creek Business Park #2

 

Industrial

 

 

 

456

 

3,790

 

31

 

456

 

3,821

 

4,277

 

346

 

2001

 

2001

 

Walnut Creek

 

Walnut Creek Business Park #3

 

Industrial

 

 

 

679

 

4,357

 

767

 

679

 

5,124

 

5,803

 

138

 

2001

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROMEOVILLE, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crossroads Business Park

 

Chapco Carton Company

 

Industrial

 

 

 

917

 

5,217

 

 

917

 

5,217

 

6,133

 

252

 

1999

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROSWELL, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hembree Crest

 

11545 Wills Road

 

Industrial

 

 

 

1,225

 

6,479

 

158

 

1,225

 

6,637

 

7,862

 

733

 

1998

 

1999

 

Hembree Park

 

105 Hembree Park Drive

 

Industrial

 

 

 

288

 

1,796

 

302

 

288

 

2,098

 

2,386

 

265

 

1988

 

1999

 

Hembree Park

 

150 Hembree Park Drive

 

Industrial

 

 

 

824

 

3,761

 

242

 

824

 

4,003

 

4,827

 

505

 

1985

 

1999

 

Hembree Park

 

200 Hembree Park Drive

 

Industrial

 

 

 

160

 

2,064

 

154

 

160

 

2,219

 

2,379

 

259

 

1985

 

1999

 

Hembree Park

 

645 Hembree Parkway

 

Industrial

 

 

 

248

 

2,627

 

368

 

248

 

2,995

 

3,243

 

469

 

1986

 

1999

 

Hembree Park

 

655 Hembree Parkway

 

Industrial

 

 

 

248

 

2,762

 

258

 

248

 

3,020

 

3,268

 

358

 

1986

 

1999

 

Hembree Park

 

250 Hembree Park Drive

 

Industrial

 

 

 

686

 

5,269

 

422

 

686

 

5,690

 

6,376

 

659

 

1996

 

1999

 

Hembree Park

 

660 Hembree Park Drive

 

Industrial

 

 

 

785

 

5,083

 

365

 

785

 

5,449

 

6,233

 

608

 

1998

 

1999

 

Hembree Park

 

245 Hembree Park Drive

 

Industrial

 

 

 

616

 

6,388

 

653

 

616

 

7,041

 

7,657

 

1,478

 

1999

 

1999

 

Mansell Commons

 

993 Mansell Road

 

Industrial

 

 

 

136

 

1,288

 

(0

)

136

 

1,288

 

1,424

 

144

 

1987

 

1999

 

Mansell Commons

 

995 Mansell Road

 

Industrial

 

 

 

80

 

917

 

52

 

80

 

970

 

1,050

 

129

 

1987

 

1999

 

Mansell Commons

 

997 Mansell Road

 

Industrial

 

 

 

72

 

666

 

48

 

72

 

714

 

786

 

96

 

1987

 

1999

 

 

70



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Mansell Commons

 

999 Mansell Road

 

Industrial

 

 

 

104

 

955

 

9

 

104

 

965

 

1,069

 

107

 

1987

 

1999

 

Mansell Commons

 

1003 Mansell Road

 

Industrial

 

 

 

136

 

1,365

 

121

 

136

 

1,486

 

1,622

 

214

 

1987

 

1999

 

Mansell Commons

 

1005 Mansell Road

 

Industrial

 

 

 

72

 

948

 

4

 

72

 

952

 

1,024

 

109

 

1987

 

1999

 

Mansell Commons

 

1007 Mansell Road

 

Industrial

 

 

 

168

 

2,135

 

278

 

168

 

2,412

 

2,580

 

328

 

1987

 

1999

 

Mansell Commons

 

1009 Mansell Road

 

Industrial

 

 

 

264

 

2,546

 

298

 

264

 

2,844

 

3,108

 

381

 

1986

 

1999

 

Mansell Commons

 

1011 Mansell Road

 

Industrial

 

 

 

256

 

2,662

 

395

 

256

 

3,057

 

3,313

 

462

 

1984

 

1999

 

North Meadow

 

1100 Northmeadow Parkway

 

Industrial

 

 

 

552

 

3,966

 

336

 

557

 

4,297

 

4,853

 

510

 

1989

 

1999

 

North Meadow

 

1150 Northmeadow Parkway

 

Industrial

 

 

 

464

 

3,239

 

169

 

464

 

3,408

 

3,872

 

443

 

1988

 

1999

 

North Meadow

 

1125 Northmeadow Parkway

 

Industrial

 

 

 

320

 

3,647

 

389

 

320

 

4,036

 

4,356

 

526

 

1987

 

1999

 

North Meadow

 

1175 Northmeadow Parkway

 

Industrial

 

 

 

328

 

3,418

 

509

 

328

 

3,927

 

4,255

 

532

 

1987

 

1999

 

North Meadow

 

1250 Northmeadow Parkway

 

Industrial

 

 

 

312

 

4,370

 

356

 

312

 

4,726

 

5,038

 

627

 

1989

 

1999

 

North Meadow

 

1225 Northmeadow Parkway

 

Industrial

 

 

 

336

 

3,518

 

262

 

336

 

3,780

 

4,116

 

480

 

1989

 

1999

 

North Meadow

 

1325 Northmeadow Parkway

 

Industrial

 

 

 

472

 

6,448

 

312

 

472

 

6,759

 

7,231

 

934

 

1990

 

1999

 

North Meadow

 

1335 Northmeadow Parkway

 

Industrial

 

 

 

946

 

8,195

 

237

 

946

 

8,432

 

9,378

 

964

 

1996

 

1999

 

North Meadow

 

11390 Old Roswell Road

 

Industrial

 

 

 

530

 

3,595

 

14

 

530

 

3,609

 

4,139

 

406

 

1997

 

1999

 

North Meadow

 

1400 Hembree Road

 

Industrial

 

 

 

545

 

3,267

 

41

 

545

 

3,308

 

3,853

 

374

 

1998

 

1999

 

North Meadow

 

Northmeadow BD IV

 

Industrial

 

 

 

694

 

5,702

 

1

 

694

 

5,702

 

6,396

 

609

 

1999

 

1999

 

North Meadow

 

Northmeadow Service Ctr V

 

Industrial

 

 

 

705

 

3,256

 

(0

)

705

 

3,256

 

3,961

 

369

 

1999

 

1999

 

North Meadow

 

Northmeadow BD VI

 

Industrial

 

 

 

423

 

3,061

 

28

 

423

 

3,090

 

3,513

 

597

 

2000

 

2000

 

Northbrook

 

Northbrook Business Dist II

 

Industrial

 

 

 

267

 

2,228

 

575

 

267

 

2,804

 

3,071

 

240

 

2000

 

2000

 

Other North Central Prop.

 

10745 Westside Parkway

 

Office

 

 

 

925

 

7,177

 

291

 

925

 

7,469

 

8,394

 

937

 

1995

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEVEN HILLS, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rock Run

 

Rock Run - North

 

Office

 

3,455

 

837

 

5,654

 

457

 

878

 

6,069

 

6,948

 

1,239

 

1984

 

1996

 

Rock Run

 

Rock Run - Center

 

Office

 

4,483

 

1,046

 

6,991

 

913

 

1,087

 

7,863

 

8,951

 

1,856

 

1985

 

1996

 

Rock Run

 

Rock Run - South

 

Office

 

3,557

 

877

 

5,925

 

445

 

918

 

6,329

 

7,247

 

1,300

 

1986

 

1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHARONVILLE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enterprise Park

 

Enterprise Bldg 1

 

Industrial

 

 

 

1,030

 

6,038

 

217

 

1,051

 

6,234

 

7,285

 

1,568

 

1990

 

1993

 

Enterprise Park

 

Enterprise Bldg 2

 

Industrial

 

 

 

733

 

3,927

 

676

 

747

 

4,589

 

5,336

 

1,379

 

1990

 

1993

 

Enterprise Park

 

Enterprise Bldg A

 

Industrial

 

 

 

119

 

728

 

125

 

119

 

854

 

973

 

198

 

1987

 

1995

 

Enterprise Park

 

Enterprise Bldg B

 

Industrial

 

 

 

119

 

1,242

 

56

 

119

 

1,298

 

1,417

 

280

 

1988

 

1995

 

Enterprise Park

 

Enterprise Bldg D

 

Industrial

 

 

 

243

 

2,003

 

17

 

243

 

2,020

 

2,263

 

418

 

1989

 

1995

 

Mosteller Dist. Center

 

Mosteller Distribution Ctr I

 

Industrial

 

 

 

1,327

 

6,339

 

1,471

 

1,327

 

7,810

 

9,137

 

1,727

 

1957

 

1996

 

Mosteller Dist. Center

 

Mosteller Distribution Ctr II

 

Industrial

 

 

 

828

 

4,785

 

919

 

828

 

5,704

 

6,532

 

1,296

 

1997

 

1997

 

Perimeter Park

 

Perimeter Park Bldg A

 

Industrial

 

 

 

229

 

1,348

 

179

 

229

 

1,527

 

1,756

 

312

 

1991

 

1996

 

Perimeter Park

 

Perimeter Park Bldg B

 

Industrial

 

 

 

244

 

1,070

 

140

 

244

 

1,210

 

1,454

 

272

 

1991

 

1996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SOLON, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fountain Parkway

 

Fountain Parkway Bldg 2

 

Industrial

 

 

 

1,138

 

8,773

 

37

 

1,138

 

8,810

 

9,948

 

1,180

 

1998

 

1999

 

Fountain Parkway

 

Fountain Parkway Bldg 1

 

Industrial

 

 

 

527

 

2,920

 

41

 

527

 

2,961

 

3,488

 

459

 

1997

 

1998

 

Solon

 

30600 Carter

 

Industrial

 

 

 

819

 

3,450

 

411

 

821

 

3,859

 

4,680

 

614

 

1971

 

1997

 

Solon

 

6230 Cochran

 

Industrial

 

 

 

600

 

2,505

 

714

 

602

 

3,218

 

3,820

 

849

 

1977

 

1997

 

Solon

 

5821 Harper

 

Industrial

 

 

 

554

 

2,312

 

249

 

555

 

2,560

 

3,115

 

472

 

1970

 

1997

 

Solon

 

6161 Cochran

 

Industrial

 

 

 

395

 

1,655

 

509

 

396

 

2,163

 

2,559

 

435

 

1978

 

1997

 

Solon

 

5901 Harper

 

Industrial

 

 

 

349

 

1,441

 

175

 

350

 

1,615

 

1,965

 

271

 

1970

 

1997

 

Solon

 

29125 Solon

 

Industrial

 

 

 

504

 

2,072

 

441

 

526

 

2,492

 

3,018

 

402

 

1980

 

1997

 

Solon

 

6661 Cochran

 

Industrial

 

 

 

244

 

1,017

 

114

 

245

 

1,130

 

1,375

 

183

 

1979

 

1997

 

Solon

 

6521 Davis

 

Industrial

 

 

 

128

 

537

 

124

 

128

 

660

 

788

 

102

 

1979

 

1997

 

Solon

 

30301 Carter Street

 

Industrial

 

 

 

650

 

5,000

 

425

 

650

 

5,425

 

6,075

 

1,087

 

1972

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ST. LOUIS PARK, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cedar Lake Business Center

 

Cedar Lake Business Center

 

Industrial

 

 

 

332

 

1,939

 

111

 

332

 

2,050

 

2,382

 

347

 

1976

 

1997

 

Minneapolis-West

 

1600 Tower

 

Office

 

 

 

2,321

 

31,931

 

3,605

 

2,321

 

35,536

 

37,857

 

4,333

 

2000

 

2000

 

North Plaza

 

North Plaza

 

Office

 

 

 

374

 

1,669

 

218

 

374

 

1,886

 

2,260

 

319

 

1966

 

1998

 

South Plaza

 

South Plaza

 

Office

 

 

 

397

 

1,736

 

167

 

397

 

1,903

 

2,300

 

358

 

1966

 

1998

 

Travelers Express Tower

 

Travelers Express Tower

 

Office

 

 

 

3,039

 

36,146

 

953

 

3,091

 

37,046

 

40,137

 

4,408

 

1987

 

1999

 

Novartis

 

Novartis Warehouse

 

Industrial

 

 

 

2,005

 

10,982

 

443

 

2,005

 

11,426

 

13,431

 

1,621

 

1960

 

1998

 

SW Submkt-Minneapolis West BC

 

5219 Building

 

Office

 

 

 

99

 

574

 

71

 

102

 

642

 

744

 

92

 

1965

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ST. LOUIS, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Clayton

 

Interco Corporate Tower

 

Office

 

 

 

6,150

 

37,279

 

365

 

6,150

 

37,644

 

43,794

 

1,096

 

1986

 

2002

 

Craig Park Center

 

Craig Park Center

 

Industrial

 

 

 

254

 

2,319

 

378

 

254

 

2,697

 

2,951

 

385

 

1984

 

1998

 

Earth City

 

3300 Pointe 70

 

Office

 

4,115

 

1,186

 

7,628

 

1,044

 

1,186

 

8,673

 

9,859

 

1,416

 

1989

 

1997

 

 

71



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Hawthorn Office Park

 

Hawthorn Office#1

 

Office

 

 

 

2,600

 

15,239

 

149

 

2,600

 

15,389

 

17,989

 

721

 

1997

 

2002

 

Lakeside Crossing

 

Lakeside Crossing I

 

Industrial

 

 

 

574

 

2,272

 

96

 

574

 

2,368

 

2,942

 

56

 

2001

 

2002

 

Lakeside Crossing

 

Lakeside Crossing III

 

Industrial

 

 

 

1,851

 

4,881

 

308

 

1,851

 

5,189

 

7,040

 

119

 

2001

 

2002

 

Lakeside Crossing

 

Lakeside Crossing 6

 

Industrial

 

 

 

1,074

 

2,125

 

387

 

1,074

 

2,513

 

3,586

 

92

 

2002

 

2002

 

Lakeside Crossing

 

Lakeside Crossing 2

 

Industrial

 

 

 

727

 

2,284

 

 

727

 

2,284

 

3,010

 

94

 

2002

 

2002

 

Laumeier Office Park

 

Laumeier I

 

Office

 

 

 

1,384

 

10,116

 

1,725

 

1,384

 

11,841

 

13,225

 

2,704

 

1987

 

1995

 

Laumeier Office Park

 

Laumeier II

 

Office

 

 

 

1,421

 

10,077

 

1,241

 

1,421

 

11,318

 

12,739

 

2,570

 

1988

 

1995

 

Laumeier Office Park

 

Laumeier IV

 

Office

 

 

 

1,029

 

7,414

 

853

 

1,029

 

8,267

 

9,296

 

1,357

 

1987

 

1998

 

Maryville Center

 

500-510 Maryville Centre

 

Office

 

 

 

3,402

 

24,823

 

985

 

3,402

 

25,808

 

29,209

 

4,123

 

1984

 

1997

 

Maryville Center

 

530 Maryville Centre

 

Office

 

6,834

 

2,219

 

15,770

 

1,403

 

2,219

 

17,173

 

19,392

 

2,992

 

1990

 

1997

 

Maryville Center

 

550 Maryville Centre

 

Office

 

 

 

1,996

 

12,561

 

28

 

1,996

 

12,589

 

14,585

 

1,957

 

1988

 

1997

 

Maryville Center

 

635-645 Maryville Centre

 

Office

 

10,674

 

3,048

 

18,511

 

337

 

3,048

 

18,849

 

21,897

 

3,012

 

1987

 

1997

 

Maryville Center

 

655 Maryville Centre

 

Office

 

6,930

 

1,860

 

13,295

 

55

 

1,860

 

13,350

 

15,210

 

2,061

 

1994

 

1997

 

Maryville Center

 

540 Maryville Centre

 

Office

 

 

 

2,219

 

14,980

 

492

 

2,219

 

15,472

 

17,691

 

2,627

 

1990

 

1997

 

Maryville Center

 

520 Maryville Centre

 

Office

 

 

 

2,404

 

16,051

 

41

 

2,404

 

16,092

 

18,497

 

3,302

 

1998

 

1999

 

Maryville Center

 

700 Maryville Centre

 

Office

 

 

 

4,556

 

28,715

 

20

 

4,556

 

28,735

 

33,291

 

3,650

 

1999

 

2000

 

Maryville Center

 

533 Maryville Centre

 

Office

 

 

 

3,230

 

17,996

 

43

 

3,230

 

18,038

 

21,268

 

1,838

 

2000

 

2000

 

Maryville Center

 

555 Maryville Centre

 

Office

 

 

 

3,226

 

15,799

 

99

 

3,226

 

15,898

 

19,124

 

821

 

2000

 

2001

 

Maryville Center

 

625 Maryville Centre

 

Office

 

5,983

 

2,509

 

11,158

 

44

 

2,509

 

11,201

 

13,710

 

701

 

1996

 

2002

 

Maryville Center Grounds

 

Maryville Center Grounds

 

Office

 

 

 

 

 

 

 

 

 

39

 

 

 

St. Louis Business Center

 

St. Louis Business Center A

 

Industrial

 

 

 

194

 

1,782

 

459

 

194

 

2,241

 

2,434

 

337

 

1987

 

1998

 

St. Louis Business Center

 

St. Louis Business Center B

 

Industrial

 

 

 

250

 

2,290

 

1,054

 

250

 

3,344

 

3,594

 

702

 

1986

 

1998

 

St. Louis Business Center

 

St. Louis Business Center C

 

Industrial

 

 

 

166

 

1,524

 

409

 

166

 

1,934

 

2,099

 

386

 

1986

 

1998

 

St. Louis Business Center

 

St. Louis Business Center D

 

Industrial

 

 

 

168

 

1,542

 

376

 

168

 

1,918

 

2,086

 

341

 

1987

 

1998

 

Southridge

 

Southridge Business Center

 

Industrial

 

 

 

1,158

 

4,234

 

759

 

1,158

 

4,993

 

6,150

 

19

 

2002

 

2002

 

West Port Center

 

Westport Center IV

 

Industrial

 

 

 

1,440

 

5,553

 

(0

)

1,440

 

5,553

 

6,993

 

994

 

2000

 

2000

 

West Port Center

 

Westport Center V

 

Industrial

 

 

 

493

 

1,602

 

(0

)

493

 

1,602

 

2,095

 

305

 

1999

 

2000

 

West Port Center

 

Westport Place

 

Office

 

 

 

1,990

 

7,848

 

274

 

1,990

 

8,123

 

10,113

 

1,968

 

1999

 

2000

 

Westmark

 

Westmark

 

Office

 

 

 

1,497

 

10,941

 

2,391

 

1,488

 

13,342

 

14,830

 

3,584

 

1987

 

1995

 

Westview Place

 

Westview Place

 

Office

 

 

 

669

 

9,415

 

1,776

 

669

 

11,191

 

11,860

 

2,517

 

1988

 

1995

 

Woodsmill Commons

 

Woodsmill Commons II (400

)

Office

 

 

 

1,718

 

6,740

 

 

1,718

 

6,740

 

8,458

 

 

1985

 

2003

 

Woodsmill Commons

 

Woodsmill Commons I (424

)

Office

 

 

 

1,836

 

6,690

 

 

1,836

 

6,690

 

8,527

 

 

1985

 

2003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ST. PAUL, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

University Crossing

 

University Crossing

 

Industrial

 

 

 

874

 

5,072

 

807

 

911

 

5,842

 

6,753

 

1,005

 

1990

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ST. PETERS, MISSOURI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Horizon Business Ctr

 

Horizon Business Center

 

Industrial

 

 

 

344

 

2,492

 

144

 

344

 

2,636

 

2,980

 

376

 

1985

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STRONGSVILLE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commerce Parkway

 

Commerce Parkway Bldg 1

 

Industrial

 

 

 

594

 

3,754

 

857

 

594

 

4,611

 

5,205

 

167

 

2002

 

2002

 

Dymet

 

Dyment

 

Industrial

 

 

 

816

 

5,390

 

39

 

816

 

5,429

 

6,245

 

890

 

1988

 

1997

 

Johnson Controls

 

Johnson Controls

 

Industrial

 

 

 

364

 

2,409

 

134

 

364

 

2,542

 

2,906

 

409

 

1972

 

1997

 

Park 82

 

Park 82 Bldg 2

 

Industrial

 

 

 

322

 

2,918

 

595

 

294

 

3,541

 

3,834

 

796

 

1998

 

1998

 

Park 82

 

Park 82 Bldg 1

 

Industrial

 

 

 

243

 

1,977

 

279

 

215

 

2,285

 

2,499

 

451

 

1998

 

1998

 

Park 82

 

Park 82 Bldg 3

 

Industrial

 

 

 

298

 

2,702

 

712

 

270

 

3,442

 

3,712

 

570

 

1999

 

1999

 

Park 82

 

Park 82 Bldg 4

 

Industrial

 

 

 

360

 

5,494

 

95

 

357

 

5,592

 

5,949

 

686

 

2000

 

2000

 

Park 82

 

Park 82 Bldg 5

 

Industrial

 

 

 

351

 

4,450

 

197

 

349

 

4,649

 

4,998

 

375

 

2000

 

2000

 

Srague Rd. Industrial

 

Mohawk Dr. Bldg. 1

 

Industrial

 

 

 

564

 

4,474

 

(0

)

564

 

4,474

 

5,038

 

343

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUNRISE, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sawgrass

 

Sawgrass Commerce Ctr Phase II

 

Office

 

 

 

1,147

 

5,961

 

(0

)

1,147

 

5,961

 

7,108

 

897

 

2000

 

2001

 

Sawgrass

 

Sawgrass Pointe

 

Office

 

 

 

3,484

 

21,827

 

1,265

 

3,484

 

23,092

 

26,576

 

1,162

 

2001

 

2002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUWANEE, GEORGIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TAMPA, FLORIDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr I

 

Industrial

 

 

 

483

 

2,666

 

8

 

487

 

2,669

 

3,156

 

304

 

1998

 

1999

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr II

 

Industrial

 

 

 

530

 

4,913

 

11

 

534

 

4,920

 

5,454

 

559

 

1998

 

1999

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr III

 

Industrial

 

 

 

334

 

2,778

 

39

 

338

 

2,814

 

3,151

 

315

 

1999

 

1999

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr IV

 

Industrial

 

 

 

600

 

2,567

 

874

 

604

 

3,437

 

4,041

 

788

 

1999

 

1999

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr V

 

Industrial

 

 

 

488

 

3,548

 

57

 

488

 

3,606

 

4,093

 

409

 

2000

 

2000

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr VI

 

Industrial

 

 

 

555

 

4,532

 

192

 

555

 

4,724

 

5,279

 

358

 

2001

 

2001

 

Fairfield Distribution Center

 

Fairfield Distribution Ctr VII

 

Industrial

 

 

 

394

 

4,046

 

503

 

394

 

4,548

 

4,942

 

589

 

2001

 

2001

 

 

72



 

Development

 

Name

 

Building
Type

 

Encumbrances

 

Initial Cost

 

Cost Capitalized
Subsequent to
Development

 

Gross Book Value 12/31/03

 

Accumulated
Depreciation (1)

 

Year
Constructed

 

Year
Acquired

 

Land

 

Buildings

to Acquisition

Land/Land Imp

 

Bldgs/TI

 

Total

Highland Oaks

 

Highland Oaks I

 

Office

 

 

 

1,525

 

14,217

 

426

 

1,525

 

14,643

 

16,168

 

2,598

 

1999

 

1999

 

Highland Oaks

 

Highland Oaks II

 

Office

 

 

 

1,605

 

11,886

 

1,474

 

1,605

 

13,360

 

14,965

 

1,528

 

1999

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TWINSBURG, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enterprise Parkway

 

Enterprise Parkway #1

 

Industrial

 

 

 

198

 

1,593

 

191

 

198

 

1,784

 

1,982

 

243

 

1974

 

1998

 

Enterprise Parkway

 

Enterprise Parkway Bldg 2

 

Industrial

 

 

 

610

 

7,426

 

3

 

610

 

7,428

 

8,039

 

792

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEST CHESTER, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

World Park Union Centre

 

World Park at Union Ctr 12

 

Industrial

 

 

 

306

 

3,484

 

3

 

306

 

3,488

 

3,793

 

678

 

2000

 

2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WESTERVILLE, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Westerville Executive Campus

 

Liebert

 

Office

 

 

 

755

 

4,538

 

876

 

755

 

5,413

 

6,169

 

1,551

 

1999

 

1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WESTMONT, ILLINOIS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oakmont Corporate Center

 

Oakmont Tech Center

 

Industrial

 

 

 

1,501

 

8,750

 

445

 

1,703

 

8,993

 

10,696

 

1,186

 

1989

 

1998

 

Oakmont Corporate Center

 

Oakmont Circle Office

 

Office

 

 

 

3,177

 

14,231

 

1,128

 

3,527

 

15,008

 

18,536

 

2,148

 

1990

 

1998

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WOODLAWN, OHIO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Glenwood Crossing

 

Glenwood Crossing

 

Retail

 

 

 

3,651

 

1,402

 

77

 

3,651

 

1,478

 

5,130

 

308

 

1999

 

2000

 

 

 

McDonalds Ground Lease

 

Grounds

 

 

 

480

 

 

 

480

 

 

480

 

 

 

 

2000

 

 

 

Eliminations

 

 

 

 

 

 

 

(26,226

)

(181

)

(26,045

)

(26,226

)

(10,743

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

208,649

 

630,608

 

4,197,485

 

266,074

 

641,544

 

4,452,624

 

5,094,168

 

677,357

 

 

 

 

 

 


(1)          Depreciation of real estate is computed using the straight-line method over 40 years for buildings, 15 years for land improvements and shorter periods based on lease terms (generally 3 to 10 years) for tenant improvements.

 

 

 

Real Estate Assets

 

Accumulated Depreciation

 

 

 

2003

 

2002

 

2001

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of year

 

$

4,846,355

 

$

4,652,853

 

$

4,570,563

 

$

555,858

 

$

425,721

 

$

338,426

 

Acquisitions

 

233,248

 

137,706

 

13,927

 

 

 

 

Construction costs and tenant improvements

 

188,449

 

275,020

 

467,285

 

 

 

 

Depreciation expense

 

 

 

 

168,959

 

154,565

 

138,723

 

Acquisition of minority interest

 

9,984

 

13,163

 

4,259

 

 

 

 

 

 

5,278,036

 

5,078,742

 

5,056,034

 

724,817

 

580,286

 

477,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deductions during year:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of real estate sold or contributed

 

(150,874

)

(204,248

)

(386,495

)

(14,966

)

(5,668

)

(39,542

)

Impairment Allowance

 

(500

)

(9,379

)

(4,800

)

 

 

 

 

 

 

Write-off of fully amortized assets

 

(32,494

)

(18,760

)

(11,886

)

(32,494

)

(18,760

)

(11,886

)

Balance at end of year

 

$

5,094,168

 

$

4,846,355

 

$

4,652,853

 

$

677,357

 

$

555,858

 

$

425,721

 

 

73



 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

DUKE REALTY LIMITED PARTNERSHIP

 

 

By:

Duke Realty Corporation
Its General Partner

 

 

 

March 9, 2004

 

By:

/s/  Thomas L. Hefner

 

 

 

 

Thomas L. Hefner

 

 

 

Chairman of the Board,
and Chief Executive Officer
of the General Partner

 

 

 

 

 

By:

/s/ Dennis D. Oklak

 

 

 

 

Dennis D. Oklak

 

 

 

President and Chief Operating
Officer of the General Partner

 

 

 

 

 

 

By:

/s/ Matthew A. Cohoat

 

 

 

 

Matthew A. Cohoat

 

 

 

Executive Vice President and
Chief Financial Officer of the
General Partner

 

 

 

(Principal Financial Officer)

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature

 

Date

 

Title

 

 

 

 

 

 

 

/s/ Thomas L. Hefner *

 

 

3/9/04

 

Chairman of the Board,

 

Thomas L. Hefner

 

 

 

Chief Executive Officer

 

 

 

 

 

  and Director of the General Partner

 

 

 

 

 

 

 

/s/ Dennis D. Oklak *

 

 

3/9/04

 

President and Chief Operating

 

Dennis D. Oklak

 

 

 

  Officer of the General Partner

 

 

 

 

 

 

 

/s/ Matthew A. Cohoat *

 

 

3/9/04

 

Executive Vice President and Chief

 

Matthew A. Cohoat

 

 

 

  Financial Officer of the General Partner

 

74



 

/s/ Barrington H. Branch*

 

 

3/9/04

 

Director of the General Partner

 

Barrington H. Branch

 

 

 

 

 

 

 

 

 

 

 

 

 

/Gary A. Burk

 

 

3/9/04

 

Director of the General Partner

 

Gary A. Burk

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Geoffrey Button *

 

 

3/9/04

 

Director of the General Partner

 

Geoffrey Button

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ William Cavanaugh, III*

 

 

3/9/04

 

Director of the General Partner

 

William Cavanaugh, III

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Ngaire E. Cuneo *

 

 

3/9/04

 

Director of the General Partner

 

Ngaire E. Cuneo

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Charles R. Eitel*

 

 

3/9/04

 

Director of the General Partner

 

Charles R. Eitel

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ L. Ben Lytle *

 

 

3/9/04

 

Director of the General Partner

 

L. Ben Lytle

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ William O. McCoy *

 

 

3/9/04

 

Director of the General Partner

 

William O. McCoy

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ John W. Nelley, Jr. *

 

 

3/9/04

 

Director of the General Partner

 

John W. Nelley, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ James E. Rogers *

 

 

3/9/04

 

Director of the General Partner

 

James E. Rogers

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Jack R. Shaw *

 

 

3/9/04

 

Director of the General Partner

 

Jack R. Shaw

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Robert J. Woodward *

 

 

3/9/04

 

Director of the General Partner

 

Robert J. Woodward

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Darell E. Zink, Jr. *

 

 

3/9/04

 

Director of the General Partner

 

Darell E. Zink, Jr.

 

 

 

 

 

 

 


* By Dennis D. Oklak, Attorney-in-Fact

/s/  Dennis D. Oklak

 

 

 

75